SHW AG: Result for the first six months of 2018 burdened by non-recurring items with business running overall according to plan; guidance adjusted for the full year 2018

ANNOUNCEMENT ON INSIDER INFORMATION
PURSUANT TO ARTICLE 17 OF REGULATION (EU) No 596/2014

SHW AG: Result for the first six months of 2018 burdened by non-recurring items with business running overall according to plan; guidance adjusted for the full year 2018

- Non-recurring items totalling EUR 7.6 million burden earnings in the first half of 2018

- Group sales for the full year 2018 are expected to lie in a range between EUR 420 million and EUR 440 million

- Taking account of the reduced sales forecast, the EBITDA margin (before non-recurring items) for the full year 2018 is expected to lie in a range between 9 per cent and 10 per cent.

Aalen, 10 July 2018. As the result of reviewing existing risk provisions as of 30 June 2018 and an updated forecast, the Management Board of SHW AG adjusts its guidance for the full year 2018. This was decided on today by the Management Board.

In sum, the operating performance developed according to plan in the first half of 2018. Due to recent developments in the current fiscal year, the Management Board decided to increase provisions for litigation risks and to record impairment losses in the interim financial statements for the first six months of 2018 that primarily concern matters already reported on in the risk report for 2017. The Group's EBITDA (defined as consolidated earnings before interest, tax and depreciation and amortisation) was also burdened by expenses incurred in the first half of 2018 related to the change in the CEO. Overall, non-recurring expenses in the first half of 2018 amount to a total of EUR 7.6 million.

Due to the weaker demand for diesel vehicles, the shift to the new WLTP exhaust test cycle and flatter start-up curves for various projects, SHW AG expects Group sales for the full year 2018 to now range between EUR 420 million and EUR 440 million (previous forecast: EUR 450 million to EUR 470 million; previous year: EUR 400.6 million). Sales of the Pumps and Engine Components business segment are anticipated to now lie in a range between EUR 315 million and EUR 330 million (previous forecast: EUR 345 million to EUR 360 million; previous year: EUR 305.9 million). For the Brake Discs business segment, sales of EUR 105 million to EUR 110 million are forecast without change (previous year EUR 94.7 million).

Before the aforementioned non-recurring expenses, SHW AG now anticipates an EBITDA margin of between 9 per cent and 10 per cent (previous year: 10.3 per cent). This corresponds to an EBITDA (before the aforementioned non-recurring expenses) for fiscal year 2018 in a range between EUR 37.8 million and EUR 44.0 million (previous forecast: EUR 49.5 million to EUR 56.4 million - no non-recurring expenses; previous year: EUR 41.3 million).

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