Statement of the results for the first half of 2020

Ercros nearly completely recovered its pre-covid-19 monthly sales volume

• In May and June, . Considering a sharp 30.4% drop in April 2020, relative to the same month the previous year, tons sold in the first half of the year fell 13.8%.
• In June 2020, Ercros billed virtually the same amount as in the first two months of the year, before the outbreak of covid-19 in Europe: EUR 49.3 million vs. EUR 50 million. Given the recovery of sales in May and June, billing declined 18.7% in the first semester, a downturn like the 13% drop experienced before covid-19 on the falling price of caustic soda and other products resulting from cheaper raw materials.  
• Due to covid-19, contribution (sales minus the variable costs) fell in March and April, relative to the same period the previous year: 8.3% and 22.5%, respectively. In May and June, however, it stood at levels practically identical to 2019, dipping 6.6% in the first half of the year, a decline of EUR 7.8 million in absolute terms.
• Given that contribution fell less than sales, the contribution margin (contribution per euro billed) in the first half of 2020 exceeded the same figure for 2019: 38.0% vs. 32.8%. In the first half of 2020, the contribution margin increased an average of 5.2 percentage points. 
• Adjusted ebidta for the first half of 2020 reached EUR 25.96 million, while adjusted ebitda for the same period in 2019 totalled EUR 31.64 million: a half year decline of 17.9%. In absolute terms, this decrease equals EUR 5.7 million, somewhat less than the decrease in contribution (7.8 million), owing to the positive performance of fixed costs.
• Profits for the first half of 2020 totalled EUR 4.4 million, a decrease of EUR 6.1 million from the same period in 2019. The difference is like the decline in ebitda (5.7 million) and contribution (7.8 million).
• At the close of the first half of 2020, net financial debt (NFD) reached EUR 108.8 million, EUR 1.4 million less than total NFD at the close of FY 2019. 
• Despite the crisis triggered by covid-19, the resources generated by the company in the first half of 2020 have provided the liquidity necessary to meet its obligations in a timely manner. Free cash flow totalled EUR 14.9 million, much higher than the EUR 1.3 million generated in the same period of 2019. These resources allowed the company to remunerate shareholders in the amount of EUR 12.8 million and reduce NFD by EUR 1.4 million.
• At 30 June 2020, Ercros held EUR 63.9 million in liquidity, EUR 27 million of which corresponds to cash and EUR 36.9 million to undrawn loans.
• In addition to the market effects on sales, margins and profits (described above), the direct cost of covid-19 in the first half of 2020 reached EUR 1.8 million: EUR 0.5 million was allocated to the purchase of safety and protection materials; EUR 0.7 million to other operating expenses; and the remaining EUR 0.6 million to asset impairment losses (specifically, accounts receivable).

Icome statements for the 2020 and 2019 first halfs