The Ergis Group in 2016: Very good preliminary financial results, record-breaking revenue, 26% increase in sales of nanoERGIS® film

THE ERGIS GROUP IN 2016: VERY GOOD PRELIMINARY FINANCIAL RESULTS, RECORD-BREAKING REVENUE, 26% INCREASE IN SALES OF nanoERGIS® FILM

The preliminary results for 2016 suggest that the ERGIS Group, a leader in plastics processing in the Central and Eastern Europe, generated record-breaking revenue at a level of PLN 696.2 million (growth by 3.1%).

Operating result in 2016 amounted to PLN 35.4 million (growth by 17%), EBITDA reached almost PLN 60 million (growth of 9.6%), while the net result totalled PLN 23.9 million (as compared to the last year's loss of PLN 16.5 million resulting from the impairment loss made in Q4 2015).

The reason behind that result is a 26% increase in the sales of the Group's most innovative product - the nanoErgis®film.The industrial packaging segment saw an increase in sales of 4.2%. Sales of soft PVC film and printed packaging grew by 13.3% and 7.2%, respectively. Successful restructuring activities aimed to integrate the production of multilayer rigid packaging film with the production of PET mono film in a single manufacturing plant in Berlin had a positive influence on the Group's performance.

As announced earlier, the Group is building another line for the production of the nanoErgis film in the Oława plant. The line is due to be launched in the second half of 2017. The Group believes that the packaging products segment is experiencing a dynamic growth, and as announced earlier, the Group will focus on further developing this area of its business.

FINANCIAL PERFORMANCE IN DETAILS

Preliminary financial results of the ERGIS Group in 2016 are presented in the table below:

PLN '000	2016*	2015	Growth rate	2015**	Growth rate
Revenue	696,226	675,100	+3.1%	675,100	+3.1%
Operating profit	35,354	30,223	+17.0%	30,223	+17.0%
Gross profit	30,116	-18,979	-	26,853	+12.1%
EBITDA	59,962	54,689	+9.6%	54,689	+9.6%
Net profit	23,902	-16,471	-	20,653	+15.7%

* preliminary results

** results for 2015 without account taken of the impairment loss of PLN 45.8 million made in Q4 2015 in connection with the commenced merger of two German companies

The Group achieved a record-breaking revenue of PLN 696.2 million (growth of 3.1% as compared to 2015), which in the most part resulted from the growth in the sale in the Group's largest product group, i.e. industrial packaging, including a 26% growth in the sale of nanoERGIS® film and a 22% growth in the sale of PET tapes. It should also be noted that the sale of PVC soft films grew by 13.3%, which is mostly the result of an increase in the sale of insulating and decorating films.

The above preliminary results for 2016 show a significant growth compared to the results achieved in 2015 also because gross profit and net profit in 2015 were reduced by an impairment loss of PLN 45.8 million made in Q4 2015 in connection with the commenced merger of two German companies.

'I believe that the preliminary results for 2016 are very good. This could be achieved through continued growth in the sale of our most innovative product, that is the nanoERGIS film, and the growth in the sale of PET tapes and PVC soft films. The outcome of the restructuring process carried out in Germany in 2015 also exerted a positive influence on the results. Our clients' growing interest in multilayer nanoErgis film made us commence works at the end of the last year to launch another line for the production of this film in our plant in Oława. Our plan is to launch that line in the second half of 2017,' said Tadeusz Nowicki, President of the Management Board of ERGIS S.A.

ADDITIONAL INFORMATION

The ERGIS Group, listed at the Warsaw Stock Exchange, holds the leading position in the plastics processing sector in the Central and Eastern Europe. Out of its five manufacturing plants, four are situated in Poland and one in Germany. The Group's profile includes manufacturing of packaging for food (printed multilayer laminates, and PVC and PET-based barrier films and laminates) and industrial packaging (LLDPE stretch films and PET binding tapes). Moreover, ERGIS is a manufacturer of films for packaging pharmaceuticals, hydro-insulating films and PVC compounds. In 2016 the Group's revenue exceeded PLN 696 million.

Additional information is also available atwww.ergis.eu