Deufol AG in the third quarter 2011

Quarterly results, Personnel

Hofheim (Wallau), (PresseBox) - .
- Sales € 80.1 million (previous year € 78.9 million)
- Operating earnings (EBITA) € 2.8 million (previous year € 3,2 million
- Net result € 1.2 million (previous year € 1.7 million
- Financial liabilities € 73.7 million (previous year € 77.8 million)

Positive sales trend

Total sales in the third quarter of 2011 were at € 80.2 million 1.7 % higher than in the same period in the previous year. Adjusted for changes due to acquisitions, this represents organic growth of 0.3 %. In Germany sales rose to € 43.3 million, an increase of 6.1 % on the same quarter in the previous year, and in the rest of Europe they rose to € 21.9 million (+ 1.9 %). In the USA, at € 14.9 million sales were 9.2 % lower than in the previous year.

Total sales in the first nine months of 2011 were at € 233.3 million 3.6 % higher than in the same period in the previous year. Adjusted for acquisitions, this represents organic growth of 2.5 %. If one also takes into consideration the US dollar's depreciation against the euro of 6.9 % on average, the increase amounts to 3.7 %.

Earnings development

At € 2.8 million, the operating result (EBITA) in the third quarter was lower than in the same period in the previous year (€ 3.2 million). The individual segments performed as follows: In Germany we recorded an EBITA € 1.2 million compared to € 1.8 million previous year (- 36.7 %). In the rest of Europe EBITA increased from € 1.2 million to € 1.8 million (+ 45.2 %). The USA / Rest of the World segment realized an operating result of € 0.4 million compared to € 0.7 million previous year (- 46.5 %).

At € 7.4 million, EBITA in the first nine months of 2011 was 11.5% below the level for the same period in the previous year (€ 8.4 million). All in all, several factors affected the result for the first nine months of the year. The income trend is positive in the rest of Europe, particularly in Belgium and Italy. In contrast, our predictions were not borne out in the USA and Germany. In the USA, factors such as lower volumes in the packaging business impacted on the result. In Germany, increased commodity prices (wood) led to additional expenditure in excess of € 1.5 million. However, the continued slight easing of wood prices in the third quarter and the increasing factoring-in of the commodities price trend in our customer relationships give cause for optimism. At the Euskirchen location, lower volumes and a revised product mix adversely affected the result. In addition, reinforcement of central control and services led to temporarily higher administrative expenses since decentralized capacities can only be wound down with a time lag.

Earnings before taxes (EBT) as of September 30 amounted to € 4.7 million (previous year: € 5.4 million). After income tax expenses (€ 2.0 million) the result is € 2.7 million, compared to € 3.6 million in the first nine months of 2010. After deduction of the profit shares of noncontrolling interests (€ 0.4 million), a net profit of € 2.2 million (previous year: € 3.3 million) is attributable to the shareholders of Deufol AG. Earnings per share for the first nine months of the year amounted to € 0.051 (previous year: € 0.075).

Financing safeguarded for the next four years

In late October the Deufol Group reorganized its financing structures. It mainly did so in order to repay existing loans but also increased its credit facility by approx. € 10 million. This financing safeguards medium-term liquidity requirements and provides scope for growth for the Group.

Cash flow development

The cash flow provided from operating activities in the first nine months of the current fiscal year amounted to € 4.5 million (previous year: € 9.9 million). This decline is predominantly due to the cut-off date-related € 7.5 million increase in trade receivables. In the same period in the previous year, trade receivables decreased by € 0.4 million while increasing cash flow.

The financial indebtedness of the Deufol Group decreased in the first nine months of the year by € 4.5 million to € 73.7 million. As cash and financial receivables simultaneously decreased (- € 9.4 million) net financial liabilities rose by € 4.9 million, from € 49.3 million at the end of the year to € 54.2 million. With a slightly higher balance sheet total, the equity ratio stood at 44.0 % after 43.6 % at the end of last year.

Outlook - Planning Revised

In the context of the figures for the first nine months, we are revising our target earnings for fiscal year 2011. We now predict an operating result (EBITA) of between € 10 million and € 12 million (previously € 12 to 14 million). We continue to predict sales in a corridor between € 310 million and 325 million.

Changes to the Executive Board

With effect as of January 1, 2012, Dr. Tillmann Blaschke will also assume overall responsibility for Finance in addition to Personnel, IT, Real Estate and Investor Relations. The current Chief Financial Officer, Mr. Tammo Fey, is to retire from the Executive Board upon expiry of his contract at the end of the year and will continue to serve the Company in an executive capacity.

Detlef W. Hübner is to assume the position of Chief Operating Officer (COO) to align our operations and give them an innovative and competitive direction for the future. Furthermore he will also centrally coordinate Purchasing which was previously generally managed in a decentralized form.

The CEO Mr. Andreas Bargende is now responsible for Business Development, Communications, Legal and Compliance.

The interim report is available on the internet at http://www.deufol.com.

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