Consolidated Interim Report

Transcription

1 Consolidated Interim Report as of 30 September 2015 UNIWHEELS AG

2 CONTENTS 1. Selected financials 2. Our share / Investor relations 3. Condensed interim group management report as of 30 September Condensed interim consolidated financial statements of UNIWHEELS AG as of 30 September 2015 The UNIWHEELS Group is one of the leading manufacturers of aluminium wheels for cars in Europe and is one of the few technology leaders worldwide in the aluminium wheel industry. UNIWHEELS is the third largest European supplier of OEM wheels for the automotive industry as well as the market-leading manufacturer of alloy wheels for the accessories market (AM) in Europe. Wellknown group brands include ATS, RIAL, ALUTEC and ANZIO. The group currently has three production plants, two of which are in Poland (Stalowa Wola) and one in Germany (Werdohl). UNIWHEELS sees itself as one of the leading partners of the automotive industry for the optimum reduction of CO2 emissions by reducing the weight of alloy wheels. As well as weight-optimized construction methods, the following procedures are primarily used: Flow Forming, Lightforming, undercutting and forging. On May 8th, 2015 UNIWHEELS AG went public on Main Market of Warsaw Stock Exchange (IPO). The UNIWHEELS stock is floated under security identification number A13STW, ISIN DE000A13STW4 and ticker symbol UNW. 2

3 1. Selected financials 9M M 2014 Change Sales EUR k 320, , % EBITDA EUR k 41,557 31, % EBIT EUR k 30,581 20, % EBT EUR k 28,045 15, % Profit or loss for the period EUR k 27,859 15, % Interest expense EUR k 3,680 7, % Capital expenditure EUR k 29,844 13, % Earnings per share (basic/diluted) EUR per share % EBITDA margin % pp EBIT margin % pp EBT margin % pp 9M 2015 FY 2014 Change Average headcount No. 2,529 2, % 30 Sep Dec 2014 Change Equity ratio % pp Net debt EUR k 25,277 90, % 3

4 2. Our share / Investor relations 2.1. IPO in May The UNIWHEELS share began trading on the Warsaw stock exchange on May 8 th, A syndicate of two banks accompanied the initial public offering of the company. The shares were initially placed at 105 zloty. The offer, which consisted of a public offer in Poland and a private placement among institutional investors outside of Poland, was over-subscribed many times over. In total 4.8 million shares were placed. Of these, 2.4 million shares originated from a capital increase. The proceeds flowed directly to the company. Another 2.4 million shares were provided by the holding company of the shareholder. The volume of the IPO came to a total of PLN million (EUR million 1 ). The company received PLN million from the IPO. As a result, UNIWHEELS AG is responsible for the largest IPO in Poland to date in UNIWHEELS AG intends to use the proceeds from the IPO to finance part of the construction of a new production location in Stalowa Wola, Poland. In addition, the share issue improved the equity ratio of the group and has laid the foundation to finance the long-term growth of the UNIWHEELS Group. Basic data of the UNIWHEELS share: 2.2. Shareholder composition Subsequent to the IPO, 38.7% of the shares of UNIWHEELS AG were in free float. Approximately 61.3% are held by the majority shareholder, UNIWHEELS Holding (Malta) Ltd., Sliema, Malta. The largest group of shareholders of shares in free float are institutional investors from Poland (pension funds and investment funds), followed by institutional investors in the UK, Austria and Germany. On September 14 th, 2015, UNIWHEELS was informed by Norges Bank that the state pension fund of the Kingdom of Norway holds a share of voting rights of just over 3%. Shareholder structure: 1 On 23 April 2015, the exchange rate between the Polish zloty and the Euro was EUR per PLN 1.0, according to the exchange rate of the European Central Bank ( 4

5 2.3. Development of the share price At the beginning of July, the sovereign debt crisis in Greece led to considerable uncertainties on the European stock markets. In August, European industrials were put under high pressure by the concerns about declining growth in China. In addition, from mid-september, the scandal surrounding manipulated emission values in diesel engines by a European car manufacturer burdened the share prices of the automotive market as a whole. The European stock market was particularly affected by the related uncertainty until the end of the third quarter. These external factors also impacted the development of the UNIWHEELS share. Nevertheless, the share closed at PLN on September 30 th, This corresponds to a rise of +10.5% since the IPO. In the third quarter, the share price rose by +2.2%. Compared to the relevant share index, the mwig40, the share developed 5.2 percentage points better than the market. The UNIWHEELS share outperformed the MDAX by 3.9 percentage points. Market capitalization at the end of the third quarter came to PLN 1,438 million (EUR 339 million). Development of the UNIWHEELS share from 8 May 2015 (first day of trading) to 30 September 2015: 2.4. Investor relations The goal of investor relations at UNIWHEELS is to win the trust of all players on the capital markets by means of reliable open, consistent and prompt reporting and to convince them of the business model of UNIWHEELS AG. Close dialogue with the capital markets is of great importance to UNIWHEELS. New financial reports will be published on the investor relations pages of the UNIWHEELS website along with corporate news releases, presentations and other information. The Investor Relations team welcomes any queries and is happy to serve both institutional and private investors alike. At the end of August and the beginning of September UNIWHEELS organized international roadshows in London, Stockholm and Frankfurt. The management addressed present and potential institutional investors in approximately 20 meetings. In addition, UNIWHEELS offered several factory tours for financial analysts and investors. During numerous international conference calls, institutional investors and analysts were familiarized with the company by the Investors Relations team. UNIWHEELS has scheduled a number of international roadshows and investor conferences for the fourth quarter. For additional information see page 25 of our financial calendar. 5

6 Analyst coverage Institution Analyst Date Target Price Recommendation BZ WBK Brokerage Michał Sopiel November 2, 2015 PLN BUY Wood & Company Maciej Wardejn October 15, 2015 PLN BUY Bank BPS Marek Olewiecki July 9, 2015 PLN BUY mbank Dom Maklerski Jakub Szkopek June 11, 2015 PLN BUY In the third quarter, the stockbrokers Wood & Company, BZ WBK and Bank BPS began covering the share and issued targets of PLN to PLN and a BUY recommendation. At the end of the reporting period, the number of institutes which publish research reports about UNIWHEELS on a regular basis came to four. Other analysts from international institutes have announced they will begin covering the share shortly and have started their research work Inclusion in the swig80 index Pursuant to the management board decision of the Warsaw Stock Exchange of August 13 th, 2015, the shares of UNIWHEELS AG are included in the swig80 index from the end of trading on September 18 th, 2015 in the course of the quarterly adjustment. The change takes effect on September 21 st, The UNIWHEELS share was included in the swig80 Small Cap Index only four months after the successful IPO of UNIWHEELS AG on the Warsaw Stock Exchange. UNIWHEELS is first on the reserve list for inclusion in the mwig40 Mid Cap Index. 6

7 3. Interim group management report as of 30 September Macroeconomic developments and industry trends According to a new forecast, growth in the global economy will continue to slow down this year. The International Monetary Fund (IMF) is forecasting growth of just 3.1% in its revised forecast. As recently as July it was still forecasting growth of 3.3% for In 2014 the figure was 3.4%. The German economy is forecast to grow by 1.6% this year and 1.7% in the following year with the euro zone forecast to grow by 1.5% this year and 1.6% next year, respectively. In the USA the economy is anticipated to grow more strongly than assumed to date, with GDP rising by 2.5%. The situation in emerging economies remains difficult. According to the IMF forecast, China is facing the lowest growth rates in decades, with growth of 6.8% (2015) and 6.3% respectively. Russia and Brazil are even threatened by long-lasting recessions. The Chief Economist of the IMF, Maurice Obstfeld, perceives three main factors as causes of the problems: the changes in the Chinese economy, with all of its problems, the considerable fall in commodity prices and the pending turnaround in interest rates in the USA (source: Der Spiegel: The trend described above is reflected in the monthly reports for July, August and September issued by the VDA (German Automobile Industry Association). The trend can be clearly seen on the key markets of Europe, the USA and China. Developments on the international automobile markets are by no means uniform. While the markets in Europe and the USA are growing, the automobile market in China is beginning to stutter. In the period from January to September, the automobile market in the European Union grew by 8.8% with western Europe recording growth on a broad front (July: 8.9%, August: 10.7%, September 9.7%). The US market performed similarly in the third quarter, with 1,504,000 passenger cars sold in July. This represents the strongest July in ten years and corresponds to growth on the prior year of 5.3%. There was a timeshift effect in the US market in August as the Labor Day weekend, which traditionally displays high sales, fell entirely within the month of September in This led to a slight decline in August (-1%). On the other hand, the timing of the Labor Day weekend resulted in the best September sales in the USA in 15 years. A total of 1,435,100 vehicles were sold, corresponding to growth of 15.9%. Average growth on the US market for the period from January to September comes to 5.1%. The opposite trend was observed in China in Q3. In July China was forced to suffer a market contraction of 5.9%. The Chinese market grew slightly until August, when demand fell by roughly 2%. In October, China recorded the first upwards trend in three months with growth of 5.5%. In spite of the weak summer in comparison to the prior year, China managed to increase its sales for the nine months from January to September by 4.7%. The picture painted by the markets in Russia, Brazil and Japan was less rosy. These markets are all contracting. Sales in Russia were well down on the prior year (July: -27.5%, August: -19.4%, September: -28.6%). Brazil was similarly weak in the same period with sales down by -21.6%, -22.9% and -31.8% respectively. As already mentioned, the Japanese market is also trending downwards (-9.1%, -3.5% and -7.4%). (Sources: press releases from the VDA dated 17 August 2015, 15 September 2015, 16 October 2015). The VDA confirms that the position of Germany as an economic powerhouse continues to expand. Exports and production both rose in the period from January to September, increasing by 3% and 2% respectively. (Source: VDA press release dated 2 October 2015). The 66th International Motor Show (IAA) closed on 27 September. Exhibitors recorded a rise of 6% in visitor numbers, which increased by 50,000 to 931,700. It should also be added that the average age of the visitors has fallen by three years to 34. The topics of network access and digitalization were the dominant themes at this year s show. Overall the signs for the future development of the automobile industry are positive. (Source: VDA press release dated 27 September 2015). In sum, it can be stated that the third quarter was very successful for German car makers Significant events The most significant event in the third quarter was the construction of the new plant (Werk 4) in Stalowa Wola, Poland. The project is running according to schedule. Construction of the assembly hall has been completed including the floors on which the first new machines will be installed shortly. The first components of the paint shop have also arrived. These are particularly important as the paint shop is at the heart of the new factory. 7

8 3.3. Business development Unit sales of wheels developed as follows: Unit figures 9M M 2014 Change Q Q Change thousand units thousand units % thousand units thousand units Accessory 955 1, Automotive 4,748 4, ,474 1, ,703 5, ,819 1, % The business development of the UNIWHEELS Group over the last three years has shown that the number of wheels sold can be steadily increased: 6.4 million in 2012, 6.9 million in 2013 and 7.2 million in Correspondingly, as a long-standing partner of all large European manufacturers of premium automobiles, we have constantly expanded on our position in the automotive market as a provider of technology and development services, even though the accessory market is contracting overall. In this sector, price increases announced for the second half of the year led to a rise in sales in the second quarter in anticipation. Consequently, sales in the third quarter were down as a result. UNIWHEELS AG can look back on a successful first nine months for In spite of the fact that the production plants were all working at peak capacity, the company managed to sell more alloy wheels and continues to grow. Unit sales in the first nine months of 2015 rose by 7.0% on the comparable period of the prior year, resulting in a record number of 5.7 million wheels sold. Sales in the third quarter were affected by the strong sales in September but also by the two-week interruption of production in August Financial performance Revenue External revenue 9M M 2014 Change Q Q Change EUR k EUR k % EUR k EUR k % Accessory 53,006 51, ,008 20, Automotive 262, , ,691 71, Other 4,855 3, , , , ,138 92, In sum, UNIWHEELS looks back on a particularly strong performance in the first nine months of The consolidated revenue of the UNIWHEELS Group increased to EUR million. In comparison to the comparable period of the prior year, this represents a rise of EUR 56.8 million or 21.6%. The main factors in this regard are the rise in unit sales of wheels, the improved product mix and the quarterly price adjustments to accommodate the rise in the price of aluminium in comparison to the prior year. The revenue of the Automotive division rose by 25.6% to EUR million. The revenue of the Accessory division rose by EUR 53.0 million, which represents an increase of 3.2% on the comparative period of the prior year. Other operating income rose by 9.5% to EUR 3.3 million. The increase is predominantly due to realized foreign exchange gains. 8

9 Key expense items Key expense items 9M M 2014 Change EUR k EUR k % Cost of material 199, , Personnel expenses 48,731 43, Other operating expenses 41,658 38, Depreciation and amortization 10,976 10, Interest expense 3,680 7, The cost of material of the UNIWHEELS Group rose by 23.3% to EUR million. The increase in the cost of material is primarily due to the higher cost of raw materials in comparison to the comparative period of the prior year, aluminium in particular. By contrast, energy costs and the cost of paint remained constant in spite of the sharp rise in production volume. A detailed breakdown of the cost of material can be found in Section of the notes to these interim financial statements. Personnel expenses increased by EUR 5.2 million or 12.0% on the prior year to EUR 48.7 million. The fact that this rise in personnel expenses is much lower than the rise in revenue is a reflection of the goal of the company to maintain efficient cost structures. The increase of 8.6% in other expenses to EUR 41.7 million is largely due to the costs of EUR 2.4 million associated with the IPO. Exchange rate losses (EUR 1.1 million) are largely attributable to realized exchange rate losses on time deposits denominated in PLN. A detailed breakdown of other operating expenses can be found in Section of the notes to these interim financial statements. Depreciation and amortization of non-current assets increased slightly by 3.0% to EUR 11.0 million in the first nine months of Interest expenses were almost halved, falling by EUR 3.6 million to EUR 3.7 million. The background to the decline lies in the much improved financing structure (including premature repayment of the Mittelstand bond and conversion of the shareholder loan into equity) and a much lower interest margin arranged on the syndicated loan, which was reduced from 2.2% to 1.75%. Other finance revenue/costs are mostly due to a change of EUR 1.4 million in the market value of foreign exchange derivatives in the first three quarters of 2015, that affected the result positively in the first quarter but negatively in the second and third quarters. Earnings situation Key earnings indicators 9M M 2014 Change EUR k EUR k % EBITDA 41,557 31, EBIT 30,581 20, Net profit or loss 27,859 15, % % percentage points EBITDA margin EBIT margin Earnings per share (basic) Earnings per share (diluted) EUR per share EUR per share Earnings before interest, taxes, depreciation and amortization (EBITDA) increased by 32.0% on the prior year to EUR 41.6 million. This increase in EBITDA can be attributed to the increase in revenue due to higher unit sales and a relatively slower increase in expenses in both operations and administrative functions. Likewise the more favorable price for aluminium than the quarterly price adjustments agreed on with OEM customers had a positive impact on the result. The EBITDA margin increased from 12.0% to 13.0%. 9

10 With depreciation and amortization of non-current assets remaining constant, earnings before interest and taxes (EBIT) rose by 46.8% to EUR 30.6 million. The EBIT margin therefore improved from 7.9% to 9.6%. The net profit for the period, which includes other finance revenue/costs, rose by 75.7% in the first nine months of 2015 in comparison to the comparative period of the prior year to EUR 27.9 million Capital expenditure An amount of EUR 29.8 million was invested in the intangible assets and property, plant and equipment of the group in the first nine months of The majority of the investments related to the development of coquilles, improving conveying and casting techniques and mechanical finishing as well as expanding production capacity with the construction of Werk 4. As a result, capital expenditure in the first nine months of 2015 exceeded depreciation and amortization by an amount of EUR 10.2 million. The ratio of capital expenditure to revenue comes to 9.3% (prior year: 5.1%). The investments planned for the last quarter of 2015 still mainly relate to the construction of Werk 4 at the Polish entity, UNIWHEELS Production (Poland) sp. z o.o., Stalowa Wola, Poland, replacements of production plant and equipment, quality assurance and the development of coquilles Composition of assets, equity and liabilities The total assets reported in the consolidated statement of financial position come to EUR million as of 30 September 2015 (prior year: EUR million), consisting of non-current assets of EUR million (prior year: million) and current assets of EUR million (prior year: million). Non-current assets primarily consist of other intangible assets of EUR 7.1 million (prior year: EUR 6.3 million), property, plant and equipment of EUR million (prior year: EUR million) and investment property of EUR 0.7 million (prior year: EUR 0.7 million) and deferred tax assets of EUR 34.9 million (prior year: EUR 34.7 million). The largest item in current assets is inventories of EUR 61.6 million (EUR 53.8 million). The increase is partly due to a rise of EUR 7.6 million in inventories of finished goods and merchandise as well as work in process. Current assets also include trade receivables of EUR 45.7 million (prior year: EUR 25.9 million) and cash and cash equivalents of EUR 26.3 million (prior year: EUR 20.8 million). The increase in trade receivables is largely a result of higher unit sales in the third quarter of 2015 compared to the same period of the prior year. The increase in cash and cash equivalents is attributable to the rise in deposits at banks on account of the buoyant sales in the year to date and the proceeds from the IPO. The capital tied up in current assets (inventories plus trade receivables less trade payables) increased by EUR 19.8 million in the third quarter to EUR 58.1 million. The equity ratio came to 58.9% on 30 September 2015 (prior year: 31.7%). The change in the equity ratio is largely due to the IPO on the Warsaw stock exchange in May 2015 and the conversion of the shareholder loan from UHM of EUR 24.7 million into equity, both of which bolstered the capital base of the company. Non-current trade payables relate solely to liabilities towards UHM carried by individual entities of the group for which a letter of subordination was issued within the framework of the refinancing arranged in fiscal The decrease of EUR 28.9 million in non-current financial liabilities is largely due to the conversion of the shareholder loan of EUR 24.7 million into equity and the scheduled repayment of the current syndicated bank loan of EUR 4.1 million. The decrease of EUR 27.9 million in current financial liabilities is due to the repayment of the credit line under the syndicated bank loan of EUR 25.5 million and the settlement of the overdrafts that the group had availed of. 10

11 3.7. Cash position The cash position of the group was dramatically affected by the IPO conducted in the second quarter of 2015 and the related increase in issued capital of EUR 61.3 million. In addition, the conversion of the shareholder loan from UHM into equity (EUR 24.7 million) and the repayment of the revolving facility extended under the syndicated bank loan from the proceeds of the IPO led to a significant reduction of EUR 59.3 million in financial liabilities to EUR 51.5 million. Moreover, a scheduled repayment of EUR 4.1 million was made in the first nine months of 2015 on the syndicated bank loan that was arranged at the end of fiscal This measure led to a significant reduction of net debt (calculated as current and non-current financial liabilities less cash and cash equivalents). This decreased from EUR 90.1 million in 2014 to EUR 25.3 million as of 30 September 2015, whereby net debt increased by EUR 9.5 million since the end of the first six months on account of the capital expenditures scheduled at the new plant (Werk 4). The improvement in the financial indicators used in the covenants of the syndicated loan also led to a reduction in the interest rate (mark-up on the Euribor) from 2.45% to 1.75%. The UNIWHEELS Group assumes that this interest margin will be reduced substantially once again in future. Equity was similarly positively affected by the capital adjustments and financing measures described above, rising from EUR 83.4 million to EUR million. As a result, the equity ratio rose from 31.7% to 58.9 %. More information on the liquidity and cash position of the group can be found in the cash flow statement in Section Concluding statement of the management board on business development and commercial position of the group In sum, the first nine months of 2015 developed successfully for the UNIWHEELS Group. Unit sales in the Accessory segment were weaker than in the comparative period of the prior year. This was due to the price increases conducted in spring and the timing of the summer break. In the OEM segment, by contrast, the high level of unit sales continued through into the third quarter. The revenue of the group increased by 21.2% in comparison to the YtD figure for September The resulting cash inflows were largely used for new investments. The group managed to improve slightly upon the dramatic improvement in earnings recorded in the first six months of 2015 which led to a significant improvement in the financial position and earnings in comparison to the prior year Change in the headcount The UNIWHEELS Group had an average of 2,529 employees in the first nine months of In comparison to fiscal 2014, the average headcount has risen by 163 employees Risk and opportunities report As of 30 September 2015, there were no significant changes to the risks and opportunities for the UNIWHEELS Group as discussed in the group management report for fiscal year At present, there are no risks that are likely to jeopardize the ability of the group to continue in business as a going concern. 11

12 3.11. Outlook The International Monetary Fund (IMF) is forecasting real growth of 1.6% in Germany s GDP for the full year The VDA is anticipating a rise of almost 6% in the number of new car registrations in the western European passenger car market to 12.8 million. Management believes that business in 2015 will be dominated by growing demand for wheels from European automobile manufacturers coupled with the fact that the company is already working at near-peak capacity. In terms of cost factors, management believes the average price of aluminium on the LME (London Metal Exchange) will come to roughly EUR 1,600 per metric ton, after converting into euros. Based on these assumptions and the latest budget, management is forecasting a significant increase in the group s unit sales of wheels in the fiscal year 2015 of between 7% and 8%. In addition to the rise in unit sales, the higher-priced product mix and the aluminium-based price adjustments should ensure that the group s revenue should grow at an expected rate of 17% to 20% compared to FY EBITDA is forecast to improve markedly in fiscal 2015 at a growth rate between 20% and 22%, compared to previous year. Continuity, a sense of proportion and the potential to expand will remain the main factors on which the distribution policy of UNIWHEELS is based. Taking account of the earnings and free cash flow of the group, management is aiming at a distribution of 50% of the net profit for the year Subsequent events No significant events have occured subsequent to the closing date which would require additional explanatory disclosures. 12

13 4. Condensed interim financial statements of UNIWHEELS AG as of 30 September Consolidated statement of financial position of UNIWHEELS AG Note 30 Sep Dec 2014 EUR k EUR k ASSETS Goodwill Other intangible assets 7,186 6,308 Property, plant and equipment , ,629 Investment property Other non-current financial assets Deferred tax assets 34,931 34,744 Total non-current assets 176, ,852 Inventories ,618 53,830 Trade receivables ,673 25,855 Other current financial assets Current income tax assets Other current non-financial assets ,361 4,269 Cash and cash equivalents 26,254 20,773 Total current assets 140, ,318 Total assets 317, ,170 EQUITY AND LIABILITIES Issued capital ,400 10,000 Capital reserve , ,900 Revenue reserves ,685-41,544 Other reserves Total equity 187,073 83,407 Non-current provisions 2,658 2,562 Non-current financial liabilities ,023 73,003 Non-current trade payables 12,330 14,331 Total non-current liabilities 59,011 89,896 Current provisions 1,587 1,655 Current financial liabilities ,507 37,860 Current trade payables 49,210 41,443 Other current non-financial liabilities 12,876 8,410 Current income tax liabilities Total current liabilities 71,517 89,867 Total equity and liabilities 317, ,170 13

14 4.2. Consolidated statement of comprehensive income of UNIWHEELS AG Note 9M M 2014 Q Q EUR k EUR k EUR k EUR k Revenue , , ,138 92,218 Changes in inventories of finished goods and work in progress 7,559 8,116-2,468-3,792 Own work capitalized Total operating performance 328, , ,699 88,499 Other income 3,347 3, Cost of material* , ,854 58,984 51,160 Personnel expenses 48,731 43,521 15,016 14,223 Other expenses* ,658 38,362 13,131 13,725 Depreciation, amortization and impairments 10,976 10,656 3,653 3,522 Interest income Interest expense 3,680 7, ,539 Other finance revenue/costs* , Profit or loss before tax 28,045 15,923 8,480 5,000 Income taxes Profit or loss for the period 27,859 15,855 8,519 4,269 Items that may be recycled through profit or loss under certain conditions Foreign currency translation Net gains/losses from cash flow hedges Items that may not be recycled through profit or loss Actuarial gains/(losses) Other comprehensive income after tax Comprehensive income 27,671 15,854 8,338 4,267 Earnings per share (EUR) basic diluted * comparative figures adjusted (see Note 4.6, Change in presentation) EBITDA (EUR k) 41,557 31,486 13,692 10,079 14

15 4.3. Consolidated statement of changes in equity of UNIWHEELS AG Issued capital Capital reserve Revenue reserves Other reserves Total EUR k EUR k EUR k EUR k EUR k 31 December ,000 46,349 28, ,414 Profit or loss for the period 15,855 15,855 Other comprehensive income after tax 0 0 Comprehensive income 15, ,855 Non-cash contribution of shares in UPP 74,202 74,202 Consolidation of shares in UPP -98,938-98, September , ,551-54, , December , ,900-41, ,407 Profit or loss for the period 27,859 27,859 Other comprehensive income after tax Comprehensive income 27, ,671 Issue of new shares 2,400 2,400 Conversion of the shareholder loan from UHM 24,734 24,734 Transaction costs Capital increase from public floatation 59,569 59,569 Dividends paid -10,000-10, September , ,495-23, ,073 15

16 4.4. Consolidated statement of cash flows of UNIWHEELS AG Note 9M M 2014 EUR k EUR k Cash flows from operating activities Profit / loss for the period 27,859 15,855 Income tax through profit or loss Finance costs through profit or loss 3,680 7,302 Interest income through profit or loss Gain/loss on the disposal of non-current assets Depreciation and amortization of non-current assets 10,976 10,656 Impairment losses on current and non-current assets Other non-cash expenses and income -1,338-1,447 Subtotal 41,547 33,108 (Increase)/Decrease of trade and other receivables -19,818-15,245 (Increase)/Decrease of inventories -8,472-9,912 (Increase)/Decrease of other non-financial assets -2, (Increase)/Decrease of other financial assets Increase/(Decrease) of trade payables and other liabilities 5,766 3,562 Increase/(Decrease) of provisions Increase/(Decrease) of other non-financial liabilities 4, Increase/(Decrease) of other financial liabilities -3,400-5,007 Cash inflow from operating activities 17,626 8,281 Income taxes paid Net cash inflow from operating activities 17,159 7,921 Cash flows from investing activities Cash paid for investments in property, plant and equipment ,852-9,132 Cash received from disposals of items of property, plant and equipment Cash paid for investments in intangible assets Cash received for interest Net cash outflow from investing activities -29,245-9,003 Free cash flow -12,086-1,082 Cash flow from financing activities Issue of new shares ,400 0 Capital increase from public floatation ,569 0 Transaction costs Cash received from loans 0 23,600 Cash paid for loans ,020-16,000 Dividends paid to shareholders of the parent company ,000 0 Cash paid for interest* -2,657-5,770 Net cash outflow from financing activities 16,584 1,830 Net increase in cash and cash equivalents 4, Cash and cash equivalents at the beginning of the period 20,773 8,870 Effect of exchange rate fluctuations on cash and cash equivalents Cash and cash equivalents at the end of the period 26,254 9,627 * As of 31 December 2014 this was presented under cash flow from operating activities. 16

17 4.5. General UNIWHEELS AG (hereinafter referred to as the company, the group or UW AG ) is a stock corporation based in Bad Dürkheim, Germany. The interim report covers UW AG and its affiliates (hereinafter referred to as the UNIWHEELS Group). Please refer to Section 3 of the Notes to the Consolidated Financial Statements for the year ending 31 December 2014 for a list of the entities in the group. This quarterly report as of 30 September 2015 is prepared in condensed form in accordance with IAS 34 and the International Financial Reporting Standards as endorsed by the European Union applying on the reporting date. The explanations in the notes to the consolidated financial statements for the year ending 31 December 2014, particularly with regard to the significant accounting policies, apply accordingly except for any changes to accounting policies due to accounting standards that came into force in the current period. UNIWHEELS AG has been listed on the Warsaw Stock Exchange since the initial public offering on 8 May UNIWHEELS AG placed 4,800,000 shares on the stock exchange of which 2,400,000 are new shares originating from an increase in subscribed capital (the new shares ) and 2,400,000 existing shares held by the vendor shareholder ( sold shares ). Upon issue of the new shares, the capital reserves rose by EUR 59.6 million. The costs associated with the IPO were recognized as assets on the date of the IPO and offset directly against equity on the date the new shares were issued. The total transaction costs arising from the IPO of EUR 708k were deducted from the capital reserve as of 30 September The management board of UW AG was expanded effective 10 August 2015 by the appointment of Dr. Thomas Buchholz Standards to be adopted in the reporting year and changes in presentation The company adopted the following new or amended standards in the reporting period. Standard/ Amendment/ Interpretation Content Mandatory pursuant to IASB from Mandatory pursuant to EU from IFRIC 21 Levies 1 January June 2014 Annual IFRS Improvement Process cycle 1 July January 2015 There is no significant impact on the disclosures or amounts presented in the consolidated financial statements from applying these amendments. In the course of harmonizing the internal and external financial reporting (1) the presentation of income and expenses from hedge transactions for trades in aluminium was changed in some respects. Any realized changes in value are now presented under the cost of material with any unrealized changes in value remaining in other financial expenses. In addition, (2) expenses from repairs and other personnel expenses were reclassified from the cost of material to other expenses. The prior-year figures were adjusted accordingly. The change in presentation did not have any impact on either equity or the net income for the period. Prior to Changes in After restatement restatement presentation EUR k EUR k EUR k 9M 2014 Cost of material 164,954-3, ,854 Expenses from financial instruments (1) 954 Repairs (2) -3,658 Other personnel expenses (2) -396 Other expenses (2) 34,308 4,054 38,362 Other finance revenue/costs (1) -1, ,073 17

18 Prior to Changes in restatement presentation After restatement EUR k EUR k EUR k Q Cost of material 52,657-1,497 51,160 Income from financial instruments (1) 9 Expenses from repairs (2) -1,380 Other personnel expenses (2) -126 Other expenses (2) 12,219 1,506 13,725 Other finance revenue/costs (1) Foreign currency translation Changes to the underlying parameters mainly relate to exchange rates, which are listed below: Statement of financial position - closing rate Income statement - average rate 1 EUR = 30 Sep Dec M M 2014 Poland PLN Sweden SEK Significant changes Property, plant and equipment In addition to depreciation and amortization of EUR 10,175k and disposals of EUR 404k, the change in property, plant and equipment is primarily due to additions of EUR 28,974k, most of which are associated with the construction of another production plant in Poland by UNIWHEELS Production (Poland) Sp. z o.o. (UPP) Inventories / trade receivables / sales / cost of material The increase of EUR 56,797k in revenue in comparison to 9M 2014 to a total of EUR 320,175k is mostly due to external sales of the Automotive division (see the section on segment reporting). Cost of material rose accordingly. The closing balances of inventories and trade receivables both rose in association with the significant improvement in the orders on the books. Details on the changes can be found in the discussion of business development management report. The cost of material breaks down as follows: 9M M 2014 Q Q EUR k EUR k EUR k EUR k Aluminium (incl. strontium, titanium, boron) 144, ,476 41,274 35,986 Energy (incl. electricity, gas, water, heating) 16,186 15,157 4,678 4,798 Paint 10,509 10,673 3,288 3,259 Other cost of material 27,930 25,548 9,744 7, , ,854 58,984 51,160 18

19 Other current non-financial assets Other current non-financial assets break down as follows: 30 Sep Dec 2014 EUR k EUR k Tax refunds VAT 5,510 3,402 Other prepaid expenses Other items ,361 4, Equity The change in equity is primarily due to the IPO on 8 May For details please see the statement of changes in shareholders equity in Section Financial liabilities The decrease of EUR 59,332k in financial liabilities to EUR 51,530k is largely on account of the conversion of the shareholder loan from UNIWHEELS Holding (Malta) Ltd. (UHM) into equity in the course of the IPO on 8 May 2015 (which accounts for EUR 24,732k of the change) and repayments of individual components of the syndicated loan (revolving credit facility: EUR 25,540k, scheduled repayment of EUR 4,125k, working capital facility: EUR 2,355k) Other expenses Other expenses changed in comparison to the comparative period of the prior year as follows: 9M M 2014 Q Q EUR k EUR k EUR k EUR k Repairs and maintenance 11,036 10,309 4,602 4,194 Selling expenses 6,636 6,758 1,963 2,343 Legal expenses and consulting fees 3,413 3,248 1, Monetary transaction costs 2, Exchange rate losses 1, Other (individual line items < EUR 2,000k) 16,829 17,375 5,448 6,489 41,658 38,362 13,131 13,725 The cost of monetary transactions consists primarily of the costs of the IPO of EUR 2.4 million. 19

20 Other finance revenue/costs Other finance revenue/costs break down as follows: 9M M 2014 Q Q EUR k EUR k EUR k EUR k Income from fair value measurements of interest derivatives 0 1, Expenses from fair value measurements of interest derivatives Income from fair value measurements of currency derivatives 1, Expenses from fair value measurements of currency derivatives Income from fair value measurements of aluminium derivatives 0 1, Expenses from fair value measurements of aluminium derivatives , Financial revenue/costs include the unrealized effects from fair value measurements of currency derivatives and aluminium derivatives. For this reason, they are in part subject to significant fluctuations. The corresponding realized effects from fair value measurements of currency derivatives are included in other operating income and other expenses, and the effects from aluminium derivatives are included in cost of material. In respect of interest derivatives, both unrealized and realized effects from fair value measurements are presented in financial revenue/costs Segment reporting The accounting policies applied in the segment reporting do not always agree with those applied in the consolidated financial statements, as described in the section on accounting policies. On the one hand, the reporting is in keeping with the requirements of the German commercial code, which was prepared for controlling purposes and, on the other hand, in compliance with the accounting guidelines of the wider Rasch Holding group. Due to the many differences between the German GAAP controlling data and IFRS data it is not possible to generate informative reconciliations without incurring unreasonable cost. The segment information has been prepared in accordance with the method described in the consolidated financial statements for fiscal The primary management indicators of the UNIWHEELS Group pursuant to IFRS are as follows: 9M M 2014 Q Q External revenue (EUR k) 320, , ,138 92,218 Unit sales (in thousands) 5,703 5,331 1,809 1,830 EBITDA (EUR k) 41,557 31,486 13,692 10,079 The allocation of revenue and non-current assets to geographical regions is based on the country in which the group entity is based. A breakdown of revenue and non-current assets (excluding financial instruments and deferred tax assets) by region follows: External revenue 9M M 2014 Q Q EUR k EUR k EUR k EUR k Germany 123,925 99,414 43,260 37,539 Poland 196, ,861 59,878 54,659 Other , , ,138 92,218 20

21 Non-current assets pursuant to IFRS 8 30 Sep Dec 2014 EUR k EUR k Germany 28,348 28,474 Poland 112,816 94,072 Other , ,546 Revenue and unit sales figures for wheels break down by distribution channel (Automotive and Accessory) as follows: External revenue 9M M 2014 Q Q EUR k EUR k EUR k EUR k Accessory 53,006 51,369 19,008 20,241 Automotive 262, ,930 82,691 71, , , ,699 91,292 Unit figures 9M M 2014 Q Q thousand units thousand units thousand units thousand units Accessory 955 1, Automotive 4,748 4,323 1,474 1,435 5,703 5,331 1,819 1,842 Of the total revenue of EUR million (9M 2014: EUR million) 10% or more is attributable to the following key customers: 9M M 2014 Q Q EUR k EUR k EUR k EUR k Customer A 64,067 47,270 20,749 15,014 Customer B 38,915 35,133 11,744 11,983 Customer C 34,636 28,907 12,086 10, , ,310 44,579 37,084 21

22 4.10. Financial instruments Apart from the financial assets and liabilities presented in the following table, management considers the carrying amounts of the financial assets and financial liabilities in the consolidated statement of financial position as a good approximation of their fair values or, as in the case of derivatives, they are actually carried at fair value. The following table therefore lists all financial liabilities which are not regularly measured at fair value but whose fair values must be presented: Financial liabilities 30 Sep Dec 2014 Fair Fair Carrying Carrying value amount amount value EUR k EUR k EUR k EUR k Financial liabilities measured at amortized cost - Bank loans 38,595 45,250 42,585 47,719 - Loans from affiliates ,734 26,112 Total 38,595 45,250 67,319 73,831 Financial liabilities 30 Sep 2015 Level 1 Level 2 Level 3 Total EUR k EUR k EUR k EUR k Financial liabilities measured at amortized cost - Bank loans 0 45, ,250 Total 0 45, ,250 Financial liabilities 31 Dec 2014 Level 1 Level 2 Level 3 Total EUR k EUR k EUR k EUR k Financial liabilities measured at amortized cost - Bank loans 0 47, ,719 - Loans from affiliates 0 26, ,112 Total 0 73, ,831 The fair value of the above level 2 financial liabilities has been determined in accordance with the discounted cash flow method which is widely accepted. A key input in the valuation is the discount rate. Instruments have been allocated to the fair value hierarchy on 30 September 2015 in the same fashion as the allocation on 31 December 2014, without any change. 22

23 The following table contains information on how the group measures the fair value of various financial assets and financial liabilities that are regularly measured at fair value, in particular the techniques used and the associated inputs. Fair value measurement on 30 September 2015 is unchanged on the methods applied as of 31 December Financial assets / financial liabilities 30 Sep 2015 Fair value 31 Dec 2014 Hierarchy Valuation techniques and significant inputs Clearly observable inputs Ratio of nonobservable inputs to fair value 1) Forward exchange contracts Assets: EUR 668k Liabilities EUR 712k Assets: EUR 38k Liabilities EUR 1,380k Level 2 Discounted cash flow method: future cash flows estimated on the basis of forward rates (observable on the reporting date) and agreed forward exchange rates and discounted using interest curves published on the reporting date N/A N/A 2) Interest swaps 3) Commodity swaps Liabilities EUR 454k Liabilities EUR 640k Liabilities EUR 192k Assets: EUR 49k Level 2 Level 2 Discounted cash flow method: future cash flows estimated on the basis of forward interest rates (observable interest curves on the reporting date) and agreed forward interest rates and discounted using interest curves published on the reporting date Discounted cash flow method: future cash flows estimated on the basis of forward prices (observable commodity prices on the reporting date) and agreed forward prices and discounted using interest curves published on the reporting date N/A N/A N/A N/A No transfers were made between level 1 and 2 in the interim reporting period. 23

24 4.11. Related party transactions Receivables from and liabilities to related parties have not changed significantly since 31 December 2014, with the exception of the matter described below. The shareholder loan of EUR 24.7 million extended by UHM, which was presented under non-current liabilities as of 31 December 2014 was converted into equity in connection with the IPO on 8 May Subsequent events UNIWHEELS Automotive (Germany) GmbH was split retrospectively as of 1 July In this context, UNIWHEELS OEM (Germany) GmbH was founded. The entry was made in the commercial register on 1 October This transaction was internal within the group and did not have any impact on the net assets, financial position and results of operations of UW AG. There were no events after the close of the period ending 30 September 2015 which would be significant for assessing the net assets, financial position and results of operations of UW AG. UNIWHEELS AG Bad Dürkheim, xx November 2015 The Management Board Ralf Schmid Dr. Karsten Obenaus Dr. Thomas Buchholz 24

25 Contact Investor Relations: UNIWHEELS AG Oliver Madsen Head of Investor Relations Gustav-Kirchhoff-Straße 10 D Bad Dürkheim Phone: Fax: o.madsen@de.uniwheels.com 25

26 Forward-looking statements: This interim report contains statements relating to the future that are based on current assumptions and projections of the management of the UNIWHEELS Group. Various known and unknown risks, uncertainties and other factors mean that the actual results, financial position, development or performance of the company may diverge materially from the estimates made here. The company assumes no obligation of any kind to update future-oriented statements or to adjust them to reflect future events or developments. 26