PRESS RELEASE

R. STAHL publishes results for financial year 2013

- Organic revenue growth of +4.6%, adjusted for currency effects +7.3%

- Results impacted by FX effects

Waldenburg, 11 April 2014 - R. STAHL, a leading supplier of products and systems for explosion protection, today published its audited results for financial year 2013 and confirms its announced preliminary results:

- Revenue growth of 4.6 % to EUR 304.4 million (EUR 290.9 million).

- Earnings before interest and taxes (EBIT) unchanged at EUR 24.9 million (EUR 24.9 million), EBIT margin of 8.2% (8.6%).

- Net income for the year increased by 8.0% to EUR 15.4 million (EUR 14.3 million), earnings per share increased to EUR 2.59 (EUR 2.43).

- Cash flow from operations grew by 31.3% to EUR 27.4 million (EUR 20.9 million).

- Management and supervisory board propose a dividend of EUR 1.00 EUR per share.

- For 2014, the company anticipates modest revenue growth and stable EBIT.

Martin Schomaker, CEO of R. STAHL AG, commented on the results, "We achieved revenue growth for 2013, attributable mainly to the strong performance in Germany, as well as Western and Northern Europe. However, growth in certain regions was limited due to weak demand. Additionally, our revenues and earnings were impacted by currency effects." Based on 2012 exchange rates, revenues for 2013 increased by 7.3%, with EBIT improving by 13.4% adjusted by currency effects.

R. STAHL's target sectors showed a generally stable to positive development in 2013, however with significant variation in the different regions: the economic environment in certain markets, such as South America and Asia/Pacific, as well as the falling oil prices in North America, resulted in reduced demand for explosion-protected products. The weakness in these areas, however, was more than compensated by strong business development in other regions, in particular the North Sea. R. STAHL benefited from its substantial installed base in Europe, as well as robust development of the company's export from the US, attributable to a solid order portfolio.

Order intake for 2013 came in at EUR 304.1 million (EUR 297.1 million), a new record high. The order backlog at the end of 2013, however, was 6.6% lower than for the end of 2012 (EUR 70.7 million). Non-German revenues accounted for 78.7% (79.1%) of the EUR 304.4 million revenues in 2013 (EUR 290.9 million).

Stable earnings - significantly improved cash flow
For the period under review, EBIT remained stable at last year's level of EUR 24.9 million, with the EBIT margin coming in at 8.2% (8.6%). Earnigns before tax (EBT) improved by 0.9% to EUR 21.3 million. Targeted price increases and process optimization measures had a positive impact on earnings development, offset by negative currency effects, as well as the market valuation of derivatives.

"In 2013, we invested in our production capacities in order to improve the speed of order delivery and customer satisfaction. Globally, our investments totaled EUR 24.2 million," stated CFO Bernd Marx. "Despite higher expenses, we were able to fully finance our investments out of operating cash flow, which improved by 31.3% to EUR 27.4 million." As of the end of the year, the company's cash balance was EUR 25 million (EUR 17.6 million).

Stable dividend of EUR 1.00 per share
In order to let shareholders participate in the company's positive business development, management and supervisory board have decided to propose an unchanged dividend of EUR1.00 per dividend-eligible share at the company's upcoming AGM in Neuenstein. With a pay-out ratio of 65% of the distributable net earnings, the Company maintains its shareholder-friendly dividend policy, while at the same time retaining sufficient means to pursue the corporate growth objectives.

Outlook - Despite cautious business development at the start to the year, R. STAHL reiterates expansion plans
Revenue development for the start of 2014 was cautious due to a lower order portfolio at the end of 2013, attributable to the postponement of projects. The granting of a substantial number of projects the company had tendered for, which management had anticipated for 2013, happened as late as March 2014. As a result, R. STAHL recorded a record order intake of EUR 88 million for the first quarter of 2014. Management expects this positive trend to continue in the coming months, and anticipates an order intake for the year of EUR 325 million to EUR 335 million, representing a 6.9% to 10.1% growth compared to last year.

Revenue growth, however, is anticipated to be delayed in relation to the late granting of contracts. Management currently expects a clear acceleration of growth in the second half of the year, with demand particularly strong from oil and gas customers. At the same time, political uncertainties in the Middle East and Eastern Europe increase the risks for revenue variance in these important markets. Consequently, management has adjusted its growth expectations for the coming year and currently anticipates revenues to grow by 3.5% to 6.8% to EUR 315 million to EUR 325 million. "Based on a first quarter that was behind expectations, as well as the increased macro-economic uncertainties, we felt it justified to be more cautious in our outlook. However, we see no reasons to revise our mid- and long-term growth objectives," according to CEO Martin Schomaker.

"The outlook for our target markets remains positive, and as a result we will continue to make investments aimed at strengthening our market position. In 2013, R. STAHL pushed ahead with its expansion strategy and has successfully completed the expansion of the production capacity at several of its facilities, and we intend to proceed as planned in 2014."

In assessing its performance, as of this financial year going forward, R. STAHL will change its key performance indicator from EBT to EBIT. Management considers EBIT to provide a better reflection of operational development, and the change will benefit transparency and clarity of communication with the various stakeholders. The company's international expansion resulted in growing fixed costs, which will limit profitability until full capacity utilization is reached. Furthermore, currency fluctuations constitute a risk regarding the development of the company's profitability. Corresponding to the change in revenue expectations, management has adjusted its guidance range for profitability. For 2014, management expects to achieve an EBIT ranging from EUR 24 million to EUR 26 million.

Announcement of a public takeover offer by Weidmüller
Weidmüller Beteiligungsgesellschaft mbH, a company of Weidmüller Holding AG & Co. KG, with its head office in Detmold/Germany, has announced on 10 April 2014 that they intend to give a public bid to acquire all shares of R. STAHL AG for the price of 47,50 EUR per share. The detailed offer document is expected to be published mid May 2014.

According to the stipulations of the German WpÜG management and supervisory board of R. STAHL AG will publish a statement after the publication of the official offer document. Management and supervisory point out, that neither the family consortium nor management were involved in the preparation of the offer.

Key Financials of R. STAHL Group

* Adopted for initial application of IAS 19 rev. (2011).
** Dividend proposal for AGM to be held on 23 May 2014.

Full financials for financial year 2013 will be available for download on the company's website on 15 April 2014: www.r-stahl.com/investor-relations/financial-reports.html

Conference Call
In addition to the annual results conference and call that will be held in Frankfurt at 10:30 a.m. (CET) in German language today, management of R. STAHL AG invites all interested analysts, investors and media to participate in an additional English language conference call to be held at 12:15 a.m. (CET). In this conference call management will offer the opportunity to ask questions referring to the takeover offer that was announced on 10 April 2014.

Please dial the following number to join the call: +49 69 247501895

 

Corporate calendar 2014

08 May Publication of Q1 report
23 May Annual General Meeting in Neuenstein
07 August Publication of H1 report
06 November Publication of Q3 report

About R. STAHL - www.stahl.de
R. STAHL is one of the world's leading suppliers of electrical and electronic products and systems for explosion protection. These products and systems prevent explosions in risk areas, and contribute to the safety of people, machines and the environment. The portfolio ranges from products used in switching/ distributing, installing, operating/monitoring, lighting and signalling/alarming, up to automation. Typical customers operate in growth industries, such as the oil & gas industry, the chemical and pharmaceutical industries and the food industry. In 2013, global revenues of EUR 304.4 million were generated with over 1,850 employees.

The shares of R. STAHL AG are traded on the Regulated Market/Prime Standard of Deutsche Boerse (ISIN DE000A1PHBB5).

For more information:
R. STAHL AG
Am Bahnhof 30, 74638 Waldenburg (Württ. )

Bernd Marx (CFO)
Phone: +49 7942 943-1271

Nathalie Dirian (Investor Relations)
Phone: +49 7942 943-1395

Frank Schwarz (Investor Relations)
Phone: +49 611 1745-39 811

e-mail: [email protected]