(SeaPRwire) –   PRESS RELEASE

Online investor presentation and Q&A at 10.30 CET on 20 March 2024 via:

2023: Strategy on track, driving improved profitability

• Sales of € 197 million (2022: € 209 million)
• Operational EBITDA 8% higher at € 24.2 million (2022: € 22.5 million)
• Net Income from operations € 2.5 million (2022: € 1.6 million)
• Cash flow from operating activities significantly improved to € 27.1 million (2022: € 5.3 million)
• Recycled raw material inflow at 89% (2022: 86%)
• Successfully secured debt refinancing of € 80 million at improved terms
• Proposed cash distribution of € 0.15 per share

Amsterdam 19 March 2024. Cabka N.V. (together with its subsidiaries “Cabka”, or the “Company”), a company specialized in transforming hard to recycle plastic waste into innovative Reusable Transport Packaging (RTP), listed at Euronext Amsterdam, announces its preliminary non-audited 2023 full year results.

Cabka CEO Tim Litjens, commented:

“In 2023 we’ve made solid progress with the execution of our strategy. Investments in product innovation have led to the launch of various new Reusable Transport Packaging (RTP) products based on recycled plastics, particularly in the strategic segments of large foldable containers and customized solutions. We launched these new products based on longer-term commercial partnerships with leading industry players such as Continental, BMW, CHEP, IFCO, and Red Bull. These partnerships form the foundation for future growth and further margin enhancement.
In our operations we completed the consolidation and expansion of our ECO business in Europe, leading to immediate sales growth, reopened and expanded our production plant in the US, and completed the divestment of our PVC business.

2023 is characterized by challenging general market circumstances with increasing interest rates leading to significant destocking and restricted capital investments from customers in most of Cabka’s end markets. This was especially notable in the US, where key customers deliberately chose to restrict their CAPEX spending. It resulted in overall lower market demand and pricing pressure across the industry especially in the second half of the year. Going into 2024 we expect to see a recovery by Q2.

In the context of these challenging market circumstances, Cabka posted full year sales in 2023 of €197 million, 6% lower compared to the record sales achieved in 2022 of €209 million. The decline in sales was driven by the divestment of the PVC business, and declining sales in the non-strategic contract manufacturing segment. The continued focus on product innovations enabled Cabka to mitigate market headwinds and deliver stable sales across its strategic segments, while the reopening of our operations in the US allows us to recover the market share lost due to the flooding.

Although sales declined, our operational EBITDA has increased by 8% from €22.5 million in 2022 to €24.2 million in 2023, representing an improvement of our operational EBITDA over Sales from 10.8% to 12.3%. Contributing factors are the continued recovery of our gross margins due to lower variable costs, and a gradual shift towards higher value-add products. On top strict cost discipline resulted in a limited increase of fixed costs against a background of high inflation.

Despite slow sales at the start of the year, the current recovery of order intake and pipeline of new product launches underpins our expectations of delivering mid-single digit sales growth for the full year, and an EBITDA margin within the 13-15% range.”

Financial Highlights

• Total sales for the full year of 2023 amounted to €197 million, 6% lower compared to the record sales achieved in 2022 of €209 million. Sales in strategic segments remained stable at € 187 million. Decline driven by a € 11 million lower sales in the divested PVC business and non-strategic Contract Manufacturing.
• Consolidation of Cabka’s strong European position in RTP Portfolio, sales up 2%.
• Customized Solutions growth of 20%, driven by new product launches in Europe and sales to Target in the US.
• ECO sales growth of 8%, following the completion of its capacity expansion in Q1 2023
• Operational gross profit at € 99.8 million (2022: € 92.6 million), bringing the gross margin to 51% (2022: 44%).
• Operational EBITDA increased to € 24.2 million (2022: € 22.5 million), reflecting a margin improvement of 1.5pp to 12.3% (2022: 10.8%).
• Net Income from operations improved 50% to € 2.5 million (2022: € 1.6 million).
• Net IFRS Income improved to € -0.7 million (2022: € -29.8 million, mainly as a result of non-cash listing expenses).
• Net Working Capital at € 27.1 million or 13.7% of sales (2022: € 38.3 million, respectively 18.3%), leading to a strong improvement in cash flow from operations to € 27.1 million (€ 5.3 million).
• Net debt € 56.8 million including lease obligations (2022: € 44.6 million),
• Total CAPEX of € 30.9 million (2022: €24.6 million), including maintenance & replacement investments of € 7.4 million, 3.8% of sales.
• An agreement was reached with a consortium of banks on a new initial debt facility of € 80 million for four years at improved terms.
• Dividend: the company proposes a cash distribution of € 0.15 per Ordinary Share, subject to AGM approval.

Strategic & Market Highlights

• New co-development products launched with our customers include:
  • the CabFold hybrid for BMW,
  • the CabFold Prime for CHEP,
  • the Red Bull BigBag pallet,
  • the IFCO Hybrid pallet,
  • the Xella Nestable pallet and
  • the Continental tire pallet.
• A two-year framework agreement with Tesla was signed, coming into effect in 2024
• Recycled raw material inflow at 89% (2022: 86%) of total compared to a European recycling average¹ of 14%
• Cabka North America’s plant in St. Louis (MO) fully up and running since July 2023 after 2022 flooding.
• Consolidation and expansion of our ECO business completed in Q1 2023.
• Divestment of non-strategic PVC business completed in Q4 2023.

Condensed bridge from operational to IFRS consolidated statement of profit and loss, 2023 preliminary unaudited ²