Rotterdam, The Netherlands (17 August 2018) - IMCD N.V. ("IMCD" or "Company"), a leading distributor of speciality chemicals and food ingredients, today announces its first half year 2018 results.

Highlights
· Gross profit growth of 24% to EUR 263.1 million (+30% on a constant currency basis)
· Operating EBITA increase of 24% to EUR 105.2 million (+30% on a constant currency basis)
· Net result before amortisation and non-recurring items increase of 28% to EUR 74.2 million (+34% on a constant currency basis)
· Cash earnings per share increased by 20% to EUR 1.31 (first half of 2017: EUR 1.09)
· Acquisition of E.T. Horn, completed on 31 July 2018, supporting IMCD's strategy of offering its suppliers and customers national US coverage and dedicated segment expertise

Piet van der Slikke, CEO: "It goes without saying that we are happy with the results over the first six months. We could optimally benefit from our strong business model combined with favourable economic conditions. The signing and closing of our acquisition of E.T. Horn (La Mirada, California) represents an important milestone in the execution of our North American strategy. We will work hard to create an organisation in this region which will offer the best possible service to our suppliers and customers and great opportunities for our staff."

Key figures
EUR million
Jan. 1 - June 30, 2018 Jan. 1 - June 30, 2017 Change Change Fx adj. change
Revenue 1,151.8 936.2 215.6 23% 29%
Gross profit 263.1 212.2 50.9 24% 30%
Gross profit in % of revenue 22.8% 22.7% 0.1%
Operating EBITA1 105.2 84.6 20.6 24% 30%
Operating EBITA in % of revenue 9.1% 9.0% 0.1%
Conversion margin2 40.0% 39.9% 0.1%
Net result before amortisation/non-recurring items 74.2 57.9 16.3 28% 34%
Free cash flow3 54.0 73.8 (19.8) (27%)
Cash conversion margin4 50.2% 84.9% (34.7%)
Earnings per share (weighted) 1.02 0.82 0.20 26% 30%
Cash earnings per share (weighted)5 1.31 1.09 0.22 20% 25%
Number of full time employees end of period 2,280 1,912 368 19%

1 Result from operating activities before amortisation of intangibles and non-recurring items
2 Operating EBITA in percentage of Gross profit
3 Operating EBITDA excluding non-cash share based payment expenses, plus/less changes in working capital, less capital expenditures
4 Free cash flow in percentage of Operating EBITDA
5 Result for the year before amortisation (net of tax)

Revenue
Revenue increased from EUR 936.2 million to EUR 1,151.8 million, an increase of 23% compared to the first half of 2017. On a constant currency basis, the increase in revenue is 29%, consisting of organic growth (+11%) and the impact of the first time inclusion of businesses acquired in 2017 (+18%).

Gross profit
Gross profit, defined as revenue less costs of materials and inbound logistics, increased by 24% from EUR 212.2 million in the first half of 2017 to EUR 263.1 million in the same period of 2018. On a constant currency basis, the gross profit growth was 30%, consisting of organic growth of 14% and the impact of the first time inclusion of businesses acquired in 2017 of 16%.
Gross profit in % of revenue increased from 22.7% in the first half of 2017 to 22.8% in 2018. This increase is the result of the first time inclusion of acquired companies, local market circumstances, currency changes and
the usual fluctuations in the product mix.

Operating EBITA
Operating EBITA increased by 24% from EUR 84.6 million in the first half of 2017 to EUR 105.2 million in the same period of 2018 (+30% on a constant currency basis).
The growth in operating EBITA is a combination of organic growth and the first time inclusion of acquisitions completed in 2017. The operating EBITA in % of revenue increased by 0.1%-point from 9.0% in the first half of 2017 to 9.1% in 2018.
The conversion margin, defined as operating EBITA as a percentage of gross profit, improved from 39.9% in the first half of 2017 to 40.0% in 2018.

Cash flow and capital expenditure
Free cash flow was EUR 54.0 million compared to EUR 73.8 million in the first half of 2017, a decrease of EUR 19.8 million. The cash conversion margin, defined as free cash flow as a percentage of operating EBITDA, was
50.2% compared to 84.9% in the first half of 2017. The higher operating EBITDA was more than offset by higher working capital investments, driven by organic revenue growth.
Working capital investment in the first half of 2018 of EUR 52.7 million (EUR 12.6 million in the first half of 2017) was the result of new and increased business activities, partly offset by the impact of the weakening of
non-EUR currencies in 2018.
Capital expenditure was EUR 1.8 million in the first half of 2018 compared to EUR 1.5 million in the same period of 2017 and mainly relates to investments in ICT infrastructure, office furniture and equipment.

Net debt
As at 30 June 2018, net debt was EUR 506.2 million compared to EUR 490.0 million as at 31 December 2017.
The leverage ratio (net debt/operating EBITDA ratio including full year impact of acquisitions) at the end of June 2018, was 2.7 times EBITDA (31 December 2017: 2.8). The leverage ratio at the end of June 2018, based on definitions used in the IMCD loan documentation, was 2.7 times EBITDA (31 December 2017: 2.7) which is well below the maximum required under the loan documentation of 3.5 (excluding acquisition spike).

Second quarter 2018 leverage development was amongst others influenced by a EUR 32.6 million dividend payment in May.
In March 2018, IMCD successfully placed an EUR 300 million unrated corporate bond with institutional investors. This seven-year senior unsecured bond, maturing in March 2025, has a fixed coupon of 2.5% and is listed on the Luxemburg Stock Exchange MTF market. The proceeds have been used to repay outstanding term loans and part of existing revolving facilities.
Early April IMCD entered into a new 5-year syndicated EUR 400 million multi-currency revolving facility. This new facility has a slightly lower interest margin, a fixed leverage covenant of 3.75 (previously variable up to
3.5) with an acquisition spike of 4.25 (previously: 4.00) and improved other terms and conditions.
Transaction costs related to these refinancings are EUR 2.9 million and will be amortised over the expected duration of these loans. Repayment of the old term loans and revolving facilities resulted in accelerated amortisation of related transaction costs (non-cash) of EUR 4.6 million reflected as non-recurring item in the first half of 2018.
The refinancing improved terms and conditions of IMCD´s financing structure, extended the maturity profile and provides further flexibility with appropriate leverage levels to support future business development.

Developments by operating segment
The reporting segments are defined as follows:
• EMEA: all operating companies in Europe, Turkey and Africa
• Asia Pacific: all operating companies in Australia, New Zealand, India, China, Malaysia, Indonesia, Philippines, Thailand, Singapore, Vietnam and Japan
• Americas: all operating companies in the United States of America, Canada, Brazil, Puerto Rico, Chile, Argentina and Uruguay
• Holding companies: all non-operating companies, including the head office in Rotterdam and the regional offices in Singapore and New Jersey, US

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