Strong recovery of Ercros in the fourth quarter of 2020

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Barcelona, 26 February 2020. - Ercros recovers in the fourth quarter of 2020 to pre-covid-19 levels in terms of tonnes and turnover, and improves the advanced ebitda forecast at 13/11/2020.

  • Despite the severe economic crisis associated with covid-19, Ercros’ ebitda fell by only 18%.
  • The drop in prices and sales volumes has been largely offset by the reduction in the price of procurements and supplies.
  • Even in a clearly adverse economic environment, Ercros maintains a solid financial position: it has EUR 72 million in liquidity; it has significantly increased its free cash flow; and it has reduced its net financial debt.
  • Ercros’ earnings per share in 2020 were below the minimum required by the shareholder remuneration policy, which is why, despite having met the other two requirements, and based on the criteria set out in the policy, it is not possible to pay shareholders out of 2020 profit.
  • This circumstance, due to the adverse impact of covid-19, is exceptional. It should not call into question the positive effects of the shareholder remuneration policy, nor Ercros’ commitment to reward shareholders in the future. During the 2016-2020 period, Ercros paid EUR 60.4 million in shareholder remuneration, of which EUR 21.2 million corresponded to dividends and EUR 39.2 million to treasury share repurchase. Furthermore, the Ercros board of directors, at its meeting held on 19 February, while pointing out that it was impossible to pay shareholders out of 2020 profit, agreed to resume share repurchase (from the first of March, under the fifth repurchase programme still in force) to redeem these shares as part of shareholder remuneration out of 2021 profit.
  • The recovery observed in the fourth quarter of 2020 will continue in the first quarter of 2021 and foreseeably also in the rest of the year. This forecast is based on: (i) the gradual increase in demand associated with the economic recovery; (ii) the prolongation of the PVC bonanza, due to the increase in public works and the aid for construction from the use of European funds; and (iii) the expected advance of the recovery of the caustic soda price, motivated by the effects of the intense cold wave on the chemical industry of the North American Gulf coast. All this, naturally, subject to the uncertainty that the persistence of the pandemic still imposes.

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