Ergis : Preliminary results of the Ergis Group for four quarters of 2015: EBITDA highest in history despite adverse market events, formation of impairment losses, plans to pay dividend and buy back shares.

According to preliminary results, the ERGIS Group, leader of plastics processing in Central and Eastern Europe, generated revenue of PLN 674.8 million after the four quarters of 2015 (an increase of 1.1% compared to the previous year), operating profit of PLN 31.1 million (similar to that achieved in 2014) and EBITDA of PLN 55.5 million (an increase of 4.3%). The good results for the full year were achieved in spite of the adverse events that occurred in Q3 2015. According to preliminary results, the Group achieved its highest ever EBITDA, but suffered a net loss due to impairment losses. Net profit excluding the impairment losses amounted to PLN 22.3 million (an increase of 16.5% compared to 2014), which was a record in the Company's history.

In accordance with the Dividend Policy adopted, the Management Board intends to recommend to the General Shareholders Meeting that the dividend for 2015 should amount to PLN 0.16 per share, which is the highest in the Group's history.

The Management Board convened an Extraordinary General Shareholders Meeting for 22 February 2016, during which it expects to receive shareholders' approval to buy back up to 5% of treasury shares.

Preliminary financial results of the ERGIS Group in 2015 are presented in the table below:

in PLN '000,000	Q4 2015	Q4 2014	Change	Q1-4 2015	2014	Change
Revenue	163.4	162.2	0.7%	674.8	667.5	1.1%
Operating profit	2.6	4.6	-42.1%	31.1	31.1	-0.1%
EBITDA	8.9	9.6	-7.7%	55.5	53.1	4.3%
Gross profit (excl. impairment loss)	1.0	2.0	-49.7%	27.8	24.1	15.3%
Net profit (excl. impairment loss)	0.5	1.4	-68.6%	22.3	19.1	16.5%
Net profit incl. impairment loss	-36.7	1.4		-14.9	19.1	-

The good operating results were achieved, in particular, due to the significant increase in sales of the innovative nanoERGIS film, the soft PVC sales results, and the development of sales of flexible laminates for food packaging.

The Group had failed to fulfill plans for increasing sales of Greenstrap, and the profitability of hard laminates for packaging food and medicines has declined in connection with the raw materials situation and restructuring costs. The Management Board believes, however, that the benefits of the restructuring carried out in 2015 will pave the way to re-growth of profitability of this business.

The above negative values of gross and net profit are due to impairment losses on account of the goodwill of the German companies, entered in the Group's balance sheet at the time of their acquisition. This is associated with the planned merger of these companies as the last stage of restructuring. The impairment loss of PLN 45.8 will be recognised under 'finance costs' in the profit and loss accounts of the ERGIS Group for Q4 2015.

In connection with the fact that the operation has no bearing on EBITDA, and the impairment loss has solely the effect of reducing the gross and net profit of the Group, following consultations with the banks that provide financing to the Group, the Management Board believes that these operations will not adversely affect the relations with the banks and are not detrimental to the Group's payment capabilities.

In accordance with the Dividend Policy adopted (Current Report No. 8/2014 of 24 April 2014), the Management Board intends to recommend to the General Shareholders Meeting that the dividend for 2015 should amount to PLN 0.16 per share.

The Management Board convened an Extraordinary General Shareholders Meeting for 22 February 2016, during which it expects to receive shareholders' approval to the buyback of up to 5% of treasury shares.

'According to preliminary results, in 2015 the Group achieved its highest ever EBITDA. The good results were achieved due to the significant increase in sales of the innovative nanoERGIS film, the good performance on the soft PVC market, and an improvement in the sale of flexible laminates for food packaging. The decision to create impairment losses, which resulted in a loss in net profit, was motivated by restructuring measures related to the intended merger of the German companies. The losses, as a purely bookkeeping operation, have no impact on the financial position of the Group', said Tadeusz Nowicki, President of the Management Board of ERGIS S.A.

'Having assessed the situation and prospects of the Company as positive, the Management Board intends to ask the General Shareholders Meeting to pay the highest ever dividend of PLN 0.16 per share. At the same time, the Management Board convened a General Shareholders Meeting, during which we expect to be given permission to the buyback of up to 5% of treasury shares, which is motivated by the current valuation of shares, which, in the opinion of the Management Board, is not reflecting the value of the Group', added Tadeusz Nowicki.

ADDITIONAL INFORMATION

The ERGIS Group holds the leading position in the plastics processing sector in the Central and Eastern Europe. Out of its six manufacturing plants, four are situated in Poland and two in Germany. The Group's profile includes manufacturing of packaging for food (films and PVC and PET-based barrier laminates, printed multilayer laminates) and industrial packaging (LLDPE stretch films and PET films). Moreover, ERGIS is a manufacturer of films for packaging pharmaceuticals, hydro-insulating films and PVC compounds. In 2015 the Group's revenue exceeded PLN 674 million.

Additional information is also available atwww.ergis.eu