EQS Group-Ad-hoc: Airopack Technology Group AG / Key word(s): Half Year
Results
Airopack Technology Group AG: Airopack Half-Year Report 2018
30-Sep-2018 / 23:36 CET/CEST
Release of an ad hoc announcement pursuant to Art. 53 KR
The issuer is solely responsible for the content of this announcement.
Ad-Hoc Release / Press Release
*Airopack Half-Year Report 2018*
*- Production and revenue growth during the first half of 2018*
*- 22 million Planet Friendly Aerosols produced, an increase of 21% over
first half of 2017*
*- Operating income of EUR 14.8 million, an increase of 22% over first half
of 2017*
*- EBITDA loss of EUR 11.2 million due to ramping up the organization and
production*
*- Net loss of EUR 23.5 million, primarily due to increased amortization and
financing costs*
*- Business plan, substantial market opportunity and manufacturing platform
confirmed by two independent global top 50 consulting companies*
*- EBITDA targeted to turn positive on a monthly basis by late 2018*
*- Refinancing process started*
Baar, 30 September 2018 - Airopack Technology Group AG ("Airopack"),
manufacturer of Planet Friendly Aerosols, today announced its results over
the first half of 2018. After the start-up of the new Waalwijk factory in
2017, the first half of 2018 was marked by a further ramp-up in production
and building an organisation that is ready for future growth. In the second
half of 2018, Airopack targets production to continue to grow, with more
stable run rates. EBITDA is targeted to turn positive on a monthly basis by
late 2018.
Airopack produces a safe, all-plastic pressurized Planet Friendly Aerosol
powered purely by air that is environmental and planet friendly. It was
developed by Airopack, which holds the relevant patents and is the sole
producer of this unique Planet Friendly Aerosol worldwide.
*Production volumes increased - filling equipment production capacity
secured*
In the first half of 2018, further progress was made with scaling up the
organization, production volumes and sales. While still in the middle of its
production ramp-up phase, Airopack produced a total of 22 million Airopack
dispensers in the first half of 2018, reflecting a 21% volume increase over
the same period of 2017. In February 2018, Airopack completed the
acquisition of Scholle IPN Equipment which was renamed Airofiller Equipment
Solutions. With this acquisition, Airopack secured the production capacity
that is required to meet strong customer demand for Airofiller filling
equipment, resulting from the growing demand for its Planet Friendly
Aerosol.
*Operating income increased*
Operating income amounted to EUR 14.8 million, an increase of 22% over the
first half of 2017. Various new customer launches in our Planet Friendly
Aerosol, including Boldking foaming shave gel, hit the market. The launch
for a new global customer with substantial projected sales volumes was
delayed due to further validation work required for their specific product.
Final validation is scheduled in October 2018 and Airopack is confident that
all requirements will be met.
*Result development*
The scale-up of the organization and production capacity of Airopack's
Waalwijk factory had a clear impact on the results for the first half of
2018. Building a new Airopack organization that has grown from 64 employees
per mid 2016 to 180 employees per mid 2018 has proven to be very
challenging, also during the first half of 2018. Production run rates were
not yet at the planned output levels and stability during the first half of
2018, but substantial improvements have been realized over the past two
months. Airopack is now increasing its production run rates month by month.
The Waalwijk factory started as a 1 shift operation in January 2017, is
operating with 4 shifts since August 2018 and the target is to operate 5
fully qualified shifts by late 2018.
The Airopack SG&A and factory overhead organization have been developed to
support a higher production and sales run rate than the company currently
operates at. As a result and despite the 22% increase of operating income,
the EBITDA loss for the first half of 2018 was EUR 11.2 million, a 7%
increase compared to the first half of 2017. During the first half of 2018,
installed production capacity was increased to 150 million Airopack
dispensers annually. Due to increased depreciation and amortization and high
interest and financing-related costs on the increased debt to fund capital
expenditures, the Scholle IPN Equipment acquisition and operational losses,
the net loss for the first half of 2018 was EUR 23.5 million, a 21% increase
compared to the first half of 2017.
*Commercial Outlook*
In the first half of 2018, Airopack has made further progress with multiple
key prospective customers in the personal and home care markets in Europe,
Asia and the United States by passing their stringent qualification tests
for both the Airopack Planet Friendly Aerosol and the Waalwijk factory.
Consequently, contract negotiations with these prospective customers,
including indicative timing of market launches, volumes and prices, are now
in more advanced stages. An announcement on a new global customer will be
made separately soon.
Airopack's Board of Directors and Group Management remain confident that its
medium-term goal of a run rate volume of 300 million Airopack dispensers
annually can be achieved in the existing facilities by 2020, compared to the
global aerosol market which is estimated at c. EUR 6.8 billion and grew by
7% p.a. since 2014. Historically, the aerosol components market has proven
to be resilient to economic downturns. The global aerosol market is expected
to grow at c. 5% p.a. in volume and at c. 7% p.a. in value to 2027 (source:
Euromonitor 2018).
*Airopack strengthens management team*
Airopack is pleased to announce that its management team will be
strengthened with Mr André de Oliveira who will be appointed as COO per 1
October 2018. Mr. de Oliveira has an impressive track record in leading
new-to-the-world innovations start-up and ramp-up manufacturing sites for
Pirelli and Tetra Pak.
*Financial Outlook*
Airopack targets production and sales volumes to continue to grow in the
second half of 2018. Production run rates were not yet at the planned output
levels and stability during the first half of 2018, but substantial
improvements have been realized over the past two months. Airopack is now
increasing its production run rates month by month. This should result in an
ongoing improvement of results through better coverage of the fixed
production and organizational cost base and improved operational efficiency.
The resulting EBITDA improvements on a month by month basis will also
improve the operational cash flow and liquidity position. Airopack targets
to reach EBITDA break-even at a production and sales run rate of 100 million
Airopack dispensers annually by late 2018.
*Liquidity and Refinancing*
The Board of Directors approved a EUR 10 million bridge loan maturing end of
December 2018 from funds managed by affiliates of Apollo Global Management,
LLC and another reputable investment firm in July 2018, which became
available in full during July and August 2018.
Given Airopack's debt size, interest rates and actual liquidity position,
discussions with its main lenders and two main shareholders have been
initiated on a comprehensive refinancing solution that is in the best
interest of the company and its shareholders. Airopack has mandated
Greenhill to review and secure a broad range of comprehensive refinancing
and additional liquidity solutions with Airopack's main shareholders, main
lenders, as well as new parties. Term sheets and proposals for such
refinancing and liquidity solutions have been received and discussions are
at various stages of advancement. Airopack is fully focused to ensure
funding and refinancing requirements are met in a timely manner and expects
to make further announcements on the refinancing process in the coming
weeks.
In the context of this refinancing process, Airopack engaged two global top
50 consulting companies to prepare commercial and operational due diligence
reports. The report prepared by L.E.K. Consulting confirmed the addressable
market size and opportunity for Airopack dispensers as well as our growth
plan. The operational excellence in quality and manufacturing cost of our
Waalwijk factory was confirmed by a report prepared by Alix Partners.
*Going Concern Disclaimer*
_Accurate forecasting of expected revenues from customer projects remains
difficult in the current phase of Airopack's development. However, as
indicated in Airopack's Half-Year Report 2018 and customary when reporting
results, a formal going concern statement has to be made in this context,
pursuant to which the aforementioned conditions indicate the existence of a
material uncertainty, which, when realized, could jeopardise the group's
ability to continue as a going concern._
*Financial highlights* in TEUR in TEUR
*HY 2018 1* *HY2017*
*Consolidated income statement*
Operating Income 14'795 11'835
Operating expense -25'959 -22'225
EBITDA -11'164 -10'390
EBIT -20'455 -17'712
Net result -23'549 -19'533
Net result per share in EUR -1.18 -1.06
*Consolidated cash flow* -6'453 3'814
*Consolidated balance sheet*
Cash and cash equivalents 793 12'157
Shareholders' equity -46'696 -16'336
Balance sheet total 135'539 98'292
1 Including the Airofiller acquisition from February 2018 onwards
_The Half-Year Report 2018 is available for download on the Airopack website
(www.airopackgroup.com) under the link Investor relations - Reports
(www.airopackgroup.com/en/investor-relations/reports)._
*For more information:*
*For investors*:
Airopack Technology Group AG
Quint Kelders, CEO / Liebwin van Lil, CFO
Blegistrasse 5/1 OG
CH-6340 Baar E-Mail:
T: +41 41 768 50 50
E-Mail: quint.kelders@airopackgroup.com
E-Mail: liebwin.vanlil@airopackgroup.com
*For media:*
Dynamics Group Zurich
Edwin van der Geest
T: +41 43 268 32 32
vdg@dynamicsgroup.ch
*The Company*
Airopack Technology Group AG is a leading developer and supplier
of mechanical and pressure-controlled dispensing packaging
technologies and systems for manufacturers and suppliers of
cosmetics, body care, home care, pharmaceutical and food
products.
The revolutionary and patented Airopack(R) technology offers a
safe, all-plastic pressurized dispenser that is environmentally
and planet friendly. Airopack Technology Group holds the patent
and is worldwide the sole producer of this unique dispenser.
Airopack Technology Group operates an Airopack Ready to Fill
manufacturing facility in Waalwijk, The Netherlands and a
Full-Service Filling operation in Heist-op-den-Berg Belgium
(Airosolutions) as well as a manufacturing plant for filling
equipment in Houten, The Netherlands (Airofiller Equipment
Solutions). The Global Research and Development Team, the
Airopack Global Management and Customer Service Organisation are
located in Waalwijk, The Netherlands.
The shares of the Company are listed on the Swiss Reporting
Standard of the SIX Swiss Exchange since 2010 (Ticker: AIRN /
ISIN: CH0242606942).
*Disclaimer*
This Ad Hoc Release / Press Release and accompanying Half-Year
Report 2018 may contain certain forward-looking statements. In
some cases forward looking statements can be identified by the
use of terms such as "believes", "enables", "estimates",
"anticipates", "projects", "expects", "intends", "may", "will",
"seeks" or "should" or variations thereof, or by discussions of
strategy, plans, objectives, goals, future events or intentions.
By their nature, forward-looking statements involve risk and
uncertainty because they relate to future events and
circumstances.
Actual outcomes and results may differ materially from any
outcomes or results expressed or implied by such forward-looking
statements. The success or achievement of various results,
targets and objectives is dependent upon a multitude of factors,
many of which are beyond the control of Airopack. No
representations are made as to the accuracy of such statements
or that such results, targets or objectives will be realized.
www.airopackgroup.com
End of ad hoc announcement
Language: English
Company: Airopack Technology Group AG
Blegistrasse 5
6340 Baar
Switzerland
Phone: +41 417663500
Fax: +41 417663509
E-mail: liebwin.vanlil@airopackgroup.com
Internet: www.airopackgroup.com
ISIN: CH0242606942
Listed: SIX Swiss Exchange
End of Announcement EQS Group News Service
728905 30-Sep-2018 CET/CEST
(END) Dow Jones Newswires
September 30, 2018 17:37 ET (21:37 GMT)
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