DGAP-News: Nanogate AG

DGAP-News: Nanogate improves profitability significantly

DGAP-News: NANOGATE AG / Key word(s): Half Year Results Nanogate improves profitability significantly

28.09.2016 / 07:26 The issuer is solely responsible for the content of this announcement.

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Nanogate improves profitability significantly

Sales grow by around 20 % in the first half-year - Consolidated EBITDA rises to EUR 5.9 million - Consolidated EBIT increases significantly by almost 40 % - Consolidated net income improves from EUR 0.3 million to EUR 1.2 million - Cash flow from operating activities climbs by 30 % - US business increasingly significant - Forecast for the year confirmed

Göttelborn, Germany, 28 September 2016. Nanogate AG, a leading international integrated systems provider for high-performance surfaces, can look back on a strong performance in the first half of 2016, with sales having increased by around 20 % to EUR 52.2 million and the operating result (EBITDA) from EUR 4.9 million to EUR 5.9 million. Consolidated EBIT increased significantly by almost 40 % to EUR 2.3 million. Consolidated net income also rose considerably from EUR 0.3 million to EUR 1.2 million. Nanogate continues to expect a dynamic development of business for the year as a whole and confirms its forecast.

Nanogate AG's CEO, Ralf Zastrau, commented: "Nanogate again expanded its market position in the first half-year, making significant progress internationally. A particularly positive development was that in addition to strong growth in sales and the operating result (EBITDA), consolidated EBIT and consolidated net income improved especially well. Nanogate's products give it a global presence. Having already gained a strong position in Europe, we are now also making good progress in important and high- volume markets beyond our home continent. Over the current year, the Group has been growing primarily in the US, where it has achieved significant growth. Demand is also strong in Asia, where we have been active now for three years. Following the very good first half-year and thanks to the strong order base, we remain very optimistic about the course of business and therefore confirm our forecast."

Consolidated net income rises particularly strongly Nanogate increased its Group sales in the first half-year by around 20 % to EUR 52.2 million (previous year: EUR 43.3 million), thereby reaching a record high. Both the strong demand in all target markets, particularly in the strategic growth areas of advanced metals and advanced polymers, as well as the first-time consolidation of the recently acquired majority equity holding, Walter Goletz GmbH, contributed to the positive performance. The overall performance increased to EUR 53.4 million (previous year: EUR 45.5 million). The Group is focusing more and more on the systems business and on supplying complete components. The component business promises greater sales and a greater margin, but is associated with greater use of materials. Accordingly, the gross profit margin (as a proportion of overall performance) came to 61.2 % in the first half-year (previous year: 62.4 %).

Nanogate improved its profitability significantly in the first half-year. The increase in sales of around 20 % was accompanied by an increase in the operating result (EBITDA), also of around 20 %, to EUR 5.9 million (previous year: EUR 4.9 million). Without the expenses associated with the ongoing growth programme as well as following adjustment for transaction and integration costs, the operating result would have risen even further. The EBITDA margin amounted to 11.3 % (previous year: 11.4 %), thereby reaching the previous year's level. Despite the increase in amortisation as a result of the course of investment, consolidated EBIT increased considerably by almost 40 % to EUR 2.3 million (previous year: EUR 1.7 million). The net financial result is positively influenced by changes relating to the valuation of subsidiaries and their obligations (IAS 8). Pre-tax profit rose to EUR 1.8 million (previous year: EUR 0.5 million) despite the expenses resulting from the Phase5 growth strategy. Consolidated net income increased accordingly from EUR 0.3 million to EUR 1.2 million, improving the profit per share from EUR 0.09 to EUR 0.36 per share.

In addition to increased profitability, cash flow from operating activities, which has improved again, is reflected in the Group's good financial development. The cash inflow from operating activities increased by around 30 % to some EUR 4.3 million (previous year: EUR 3.3 million). Cash flow from investments came to EUR -7.8 million (previous year: EUR -6.4 million). The most important expansion steps include the majority stake in plastics specialist Goletz and the creation of the new N-Metals Chrome platform. The Group's balance sheet as at the 30 June 2016 reporting date is also affected by the first-time consolidation of Goletz, meaning that the balance sheet total increased to EUR 143.1 million (31 December 2015: EUR 123.8 million). Due to consolidation effects, the equity ratio amounted to 36.4 % (31 December 2015: 41.4 %). Equity improved again with the capital increase in July 2016.

Forecast confirmed for 2016 as a whole Following the strong course of business, Nanogate is also confident for the year as a whole. The growth course is likely to continue thanks to numerous new projects and applications. These include, for example, further orders from the furniture industry as well as greater demand for glazing components from the US. Sales also remain high for the ongoing projects such as enhanced plastic components for several luxury car manufacturers. In addition, the Group increased its order base further - such as with a major order to supply components for a luxury SUV, implementation of which will begin in 2017. The new N-Metals Chrome technology platform will also be contributing to sales and earnings from next year.

Following sales growth to EUR 52.2 million in the first half of 2016, Nanogate continues to expect Group sales to rise to more than EUR 105 million in the current year following EUR 90.9 million in 2015. The Group is therefore likely to exceed its medium-term sales target of EUR 100 million in the current year. Despite the continued expenses associated with the expansion strategy as well as the one-off transaction and integration costs, Nanogate expects the operating result (EBITDA) to increase significantly for 2016 as a whole and to exceed the EUR 12 million mark. Substantial funds will continue to flow into the ongoing investment programme and international expansion. In view of the growth course, consolidated net income will continue to be shaped by depreciation and amortisation as well as by financing costs. Despite this, Nanogate expects the consolidated net income for the year as a whole to rise particularly strongly year on year due to the overall good performance and to positive one-off effects from changes relating to the valuation of subsidiaries and their obligations.

Phase5 growth programme Organic growth, greater internationalisation, expansion of the technology and application portfolio as well as selective external growth remain among the medium- and long-term growth levers within the Phase5 strategy programme, which also encompasses numerous projects towards improving the internal coordination of development, production and sales.

"Our Phase5 strategy programme continues to act as our compass, leading Nanogate into a new dimension of expertise, services range and business volume. The 2016 half-year performance confirms both our good strategic alignment as well as the strong performance of our operating business. Nanogate is in demand around the world as an innovation partner, which is why we will be continually expanding our market position going forward", explains CEO Zastrau.

NB: The complete half-year report is available to download from our website: http://www.nanogate.de/de/investor_relations/finanzberichte

Nanogate on Twitter: http://twitter.com/nanogate_ag

If you have any queries, please contact:

Christian Dose (financial press and investors) Nanogate AG Cortent Kommunikation AG Zum Schacht 3 Tel. +49 (0)69 5770 300 0 66287 Göttelborn nanogate@cortent.de Germany www.nanogate.com Liane Stieler-Joachim Nanogate AG Tel. +49 (0)6825 9591 220 liane.stieler-joachim@nanogate.com

Nanogate AG: Nanogate (ISIN DE000A0JKHC9) is a leading international integrated systems provider for high-performance surfaces. The Group, which is based in Göttelborn (Saarland), enables the programming and integration of additional properties - such as non-stick, scratchproof and anti-corrosive - into materials and surfaces as well as enhanced plastic components. True to its slogan 'A world of new surfaces', Nanogate opens up the diverse possibilities of multifunctional surfaces based on new materials for companies in a wide range of industries.

Nanogate provides its customers with technologically and optically high- quality systems. To do so, the company uses its extensive expertise in innovative materials. The aim is to improve customers' products and processes by means of high-performance surfaces while achieving environmental benefits. The Group concentrates on attractive sectors such as automotive/transport, mechanical/plant engineering, buildings/interiors and sport/leisure as well as on the strategic growth areas of advanced polymers and advanced metals. Nanogate has a unique combination of extensive materials expertise paired with comprehensive, first-class process and production know-how. As a systems provider, Nanogate offers services throughout the entire value chain, from the purchase of raw materials, to the synthesis and formulation of the material systems, right through to the enhancement and production of the finished surfaces. The Group focuses primarily on optically high-quality plastic and metal coatings for all surface types. Its value drivers are the opening up of new, international markets, the development of new applications for the strategic growth areas of advanced polymers (innovative plastics, e.g. glazing) and advanced metals (innovative metal enhancements) as well as external growth.

The Nanogate Group has first-class references (e.g. Airbus, Audi, August Brötje, BMW, BSH Bosch und Siemens Hausgeräte, Daimler, FILA, Jaguar, Junkers, Porsche, Volkswagen). Several hundred projects have already gone into mass production. The company also has strategic partnerships with many international corporations. Nanogate comprises Eurogard B.V., GfO Gesellschaft für Oberflächentechnik AG, Nanogate Industrial Solutions GmbH, Nanogate Textile & Care Systems GmbH, Nanogate Glazing Systems B.V. and Vogler GmbH, as well as majority stakes in Plastic-Design GmbH and Walter Goletz GmbH. There are also subsidiaries in the US and in Turkey.

Disclaimer: This publication constitutes neither an offer to sell nor an invitation to buy securities. The shares in Nanogate AG (the "Shares") may not be offered or sold in the United States or to or for the account or benefit of "U.S. persons" (as such term is defined in Regulation S under the U.S. Securities Act of 1933, as amended (the "Securities Act")). No offer or sale of transferable securities is being made to the public outside Germany.

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28.09.2016 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement.

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Language: English Company: NANOGATE AG Zum Schacht 3 66287 Göttelborn Germany Phone: +49 (0)6825/95 91 0 Fax: +49 (0)6825/95 91 852 E-mail: nanogate@cortent.de Internet: www.nanogate.de ISIN: DE000A0JKHC9 WKN: A0JKHC Listed: Regulated Unofficial Market in Berlin, Dusseldorf, Munich, Stuttgart, Tradegate Exchange; Open Market (Entry Standard) in Frankfurt End of News DGAP News Service ---------------------------------------------------------------------------

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