Masterflex with profitability boost in third quarter 2023 - full-year guidance confirmed

Masterflex with profitability boost in third quarter 2023 – full-year guidance confirmed

• Significant progress in profitability in the third quarter with 16.2% operating EBIT margin
• Consolidated sales revenue after nine months up 3.8% on previous year at EUR 79.0 million 
• Consolidated operating EBIT after nine months at EUR 11.0 million (9M/2022: EUR 10.4 million), operating EBIT margin rises to 14.0% (9M/2022: 13.7%)
• Forecast for fiscal 2023 confirmed

Gelsenkirchen, November 08, 2023 – In the third quarter of 2023, Masterflex SE (ISIN: DE0005492938) continued the positive development of the previous quarters and remained on its growth course despite the economic and geopolitical headwinds. The third quarter of 2023 showed a significant increase in profitability in particular.

In the entire nine-month period of the current year, the Masterflex Group generated sales revenue of EUR 79.0 million, compared with EUR 76.0 million in the same period of the previous year. This corresponds to a year-on-year increase of 3.8%. Operating EBIT after nine months amounted to EUR 11.0 million, compared to EUR 10.4 million in the same period of the previous year. This results in a year-on-year increase in operating EBIT of 6.1%, which is disproportionate to sales revenue, and a further improvement in the operating EBIT margin from 13.7% in the previous year to 14.0%. Consolidated earnings for the first nine months of 2023 amounted to EUR 7.2 million (9M/2022: EUR 7.3 million) or EUR 0.75 per share (9M/2022: EUR 0.76).

The balance sheet situation of Masterflex SE has further improved as of September 30, 2023. Equity increased from EUR 52.0 million at the end of the fiscal year 2022 to EUR 57.4 million. This results in a continued rock-solid equity ratio of 59.5% after 57.6% as of December 31, 2022.

In the 3 months from July to September 2023, the Group generated an operating EBIT of EUR 4.3 million on sales revenue of EUR 26.3 million (Q3/2022: EUR 26.9 million). This corresponds to earnings growth of 14.7% compared with the already good prior-year figure of EUR 3.7 million. The operating EBIT margin for the third quarter thus improved significantly compared with the prior-year figure of 13.8% to 16.2%. Despite higher interest expenses due to rising market interest rates, consolidated net income for the third quarter increased by 11.1% to just under EUR 3.0 million (Q3/2022: EUR 2.7 million). Accordingly, earnings per share for the third quarter of 2023 also increased to EUR 0.31 (Q3/2022: EUR 0.27). This positive development reflects the successful turnaround of the subsidiary APT Advanced Polymer Tubing GmbH, price adjustments implemented in the market, and the continuous implementation of further cost optimization measures.

Overall, business development in the third quarter continued the trend seen in previous quarters. In the aviation business, in the life science sector and medical technology, the Masterflex Group continued to see good demand momentum. In the traditional cyclical sectors, the economic headwind and geopolitical concerns were reflected in a temporary decline in demand, as expected. However, the development in the third quarter, in particular, makes it clear that Masterflex can largely compensate for the cyclical fluctuations of individual customer sectors thanks to its broadly diversified range of industries for connection solutions, and is also able to further increase the quality of earnings thanks to its increased focus on high-margin growth markets in combination with a deepening value creation and continuous cost optimization measures.

Dr. Andreas Bastin, CEO of the Masterflex Group: "Unfortunately, the economic and, above all, geopolitical uncertainties have not diminished in recent weeks, but we are nevertheless doing well operationally. Our intensified focus on growth markets such as medical technology is paying off in the form of stable revenue development and, in conjunction with further cost optimizations and deepened value creation, is resulting in a higher level of profitability. We are on target and can look back with pride on a highly profitable third quarter."

The order situation at Masterflex remains robust. Order intake is at a satisfactory normal level, so that the Masterflex Group confirms the previous forecast for 2023, although the significantly stronger economic, interest rate and geopolitical uncertainties affect the forecast quality. Based on the successful business development in the first nine months, the Management reaffirms the target of generating sales revenue in a range of EUR 103 million to EUR 110 million in the 2023 financial year. Operating EBIT is still expected to be in the range of EUR 11.0 million to EUR 14.0 million.

Selected key figures

*) unaudited

The quarterly report as of September 30, 2023 is available online at https://www.masterflexgroup.com/investor-relations/financial-reports-of-masterflex-se/.

About Masterflex SE:

The Masterflex Group is the specialist for the development and manufacture of sophisticated connection and hose systems. With 14 operating units in Europe, America and Asia, the Group is represented almost worldwide. Growth drivers are internationalization, innovation, operational excellence and digitalization. Masterflex shares (ISIN DE0005492938, GSIN 549293) have been listed in the Prime Standard of Deutsche Börse since 2000.

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