Good morning, everybody, and welcome to the Q1 Ringmetall conference call. My name is Ingo Middelmenne, and I'm happy to welcome you this morning at this early hour. Please note, as usual, the disclaimer, this call will be recorded, and the recording will be made publicly available on our website in the course of the day. So, I hope you can hear me well. As you see, Christoph Petri is not with us this morning. He's traveling today. Those of you who at this point in the past before know that this is mostly a good sign and not a bad sign. So, he is traveling as well as me. That's why we're starting this call as this early in the morning.
In the next 15 to 20 minutes, I'm gonna guide you through our quick presentation, and afterwards, we'll have enough time for a Q&A, as usual. As I'll be steering this whole call myself, I would prefer if you don't ask your questions in the chat, but directly. You don't ask them at all, please ask them in the chat. So, let's start with the presentation. So, the group highlights in Q1. We've managed to sustainably stabilize our business, which is very important after the turbulent turmoils in the past year. After all that's happened, with war and interest rate hikes, and energy price hikes, we can really say Q1 has been a notably calmer environment and notably calmer business. So it's almost as usual business, but on a lower level.
So as you know, last year, we have sold our subsidiary, HSM, and with this, discontinued our segment, Industrial Handling, by the end of H1. That's why this year we're introducing adjusted figures, not officially. You will always see the tables in the corporate news and also in the reports, you will always see the official IFRS reporting. But for everybody to understand how we really operationally developed, we decided to subtract all the from HSM in 2020 basis, majorly and actually only, the only reason here is the steel price decline. I'm saying steel price here because plastic granulate stayed quite stable, but we'll come to this a bit later. Total output has, of course, decreased a bit more. I have to let somebody in.
Decreased a bit more because we just produced a bit less, and cleared our inventory a bit. EBITDA even rose. This is because, you know, we can pass on raw material price effects to our customers, and, as you know, we've introduced activity measures in the past months and quarters, and of course, these also work as well. But really, the major effect here is steel prices. So for the whole year, we're confirming our outlook. It's too early to give you more than a hint where we are, but we're not concretizing it yet, but I'll come to this later as well.
Looking at the growth drivers of revenue of the company as a whole, as you will remember in, I think, Q3, that was last year, we stopped stating detailed percentage figures for the drivers of our revenue. This is because just in this environment, negotiations with our clients really get harder. So, our clients really read through all the material that we put out, and our purchasing departments have been confronted with the information we provided to the market. That's why, we had to find another way to give the capital markets a good idea of what is driving our revenue, and that's why, we decided to introduce some kind of arrow and color scheme here.
Meaning a flat arrow always means that the development is in the range of +2.5 to -2.5. 45-degree angle is then in the area of 7.5 to 2.5, always on the plus and minus, and a 90-degree angle is everything higher than 7.5%, also plus and minus. What we saw on the company as a whole, and this is basically. Here, we don't have comparison figures to adjusted by HSM because this is basically just the industrial packaging department. We see strong raw material effects on the whole company as a whole, and this is heavily the steel price. Steel prices have declined. Raw material prices for granulates stay pretty much at a decent level.
This is the fifth consecutive quarter where we're seeing these steep raw material declines. On the inorganic side, you see growth effects from IDF and Liner Factory, which we acquired last year. Organically, our business is pretty much flat, and this is in the current environment from our perspective a very good news. Looking at the product area analysis. Last year, you've seen here a segment analysis. From 2024 onwards, we will not have two segments anymore as the industrial handling segment has been closed down. We have never reported on a product area, and we will not, for the time being, introduce another segment, because the segments are still too small and we are not currently required by our auditor to do so.
But of course, we understand that you, as in our investors, need more details on the development of our company, and also here we've introduced a revenue share, which is pretty precise and will divide the company, the former industrial packaging segment, into the two product areas, closure systems. This is everything with rings, lids, gaskets, and some other appliances around the industrial drum, and on the other side, the liners product area. Which are the typical liners, such as round bottom liners, aluminum liners, technical liners, but also what we have as a kind of a sub-product area, but it's really small, so it doesn't make sense to report anything here at all currently. And this is the specialty packaging for the beverage industry. So the beer tank Liners and the bag-in-box systems.
So looking at closure systems, we see in general a rebound of the chemical industry, which is good news, not only for our company, but I think for the industry, especially in Germany as a whole. But we're still way below pre-pandemic levels. And we also have the opinion that a couple percentage points of the former business will probably never return, at least not for the foreseeable future. So revenue share in the closure, closure systems product area was exactly at 70.0%, down 3.4%. So this has shifted to the liner segment due to the acquisitions that I've mentioned before. On the raw material side, you see strong decline of steel prices. We see on inorganically, no move at all.
As you know, we actually do not acquire companies in this product area anymore. That would be a very rare occasion. Organically, we're almost flat as well, a bit in the positives. So, on the liner side, we see a revenue share of 30.0. Now, raw material prices have not moved here significantly, so plastic granulates are pretty stable. Organically, you see the growth effects from the acquisitions mentioned. But here we see a decline in organic growth. So, let's say a medium decline.
This is because specialty inliners, especially aluminum inliners that are filled with hot glue, have a bit lower demand because this is the type of specialty chemicals industry that is still suffering a lot from weaker demand in the furniture industry, in the automotive industry, and so on. So now some business insights into our company. We've just installed a new line of bag-in-box for the bag-in-box production at our subsidiary, Tesseraux, in Bürstadt. I just visited the plant last month, last week, and that's a very interesting investment we're doing here. Overall, we're investing around EUR 3 million-EUR 4 million. This is split up between the years 2023 and 2024. What we're doing here is expanding our production lines.
The lines come from the same manufacturer as the old lines that we had before, but they're way faster. They have four instead of two simultaneous lanes, and the first production line has just been installed, and we had the test runs being done last week. Everything runs smoothly so far. In the next months, a second line will be installed, and for us, this is a very exciting moment in the company because it's one of the biggest investments the company has done so far. And we think we have a very good position as a niche player in the bag-in-box market. And I think this is an interesting enhancement for the company, and it will certainly strengthen our position in the market. Now, for the outlook, cautiousness remains, but chances as well, that pretty much hits it.
If things continue in the next weeks and months, the way this year has started and the way the months have evolved, I'm pretty sure we're looking into a good 2024 year. But currently, also on a weekly basis, there are still fluctuations in order intake. So we are confident this environment, this more positive environment, will remain in the next months, but we cannot be sure. And as you know, we're always taking a conservative approach on guiding the markets. So that's why we still stick to the guidance that we have released in January with the release of our preliminary figures.
This is holding a pessimistic and an optimistic view on our environment and gives us a revenue bandwidth of EUR 170 million-EUR 195 million for group revenues, and EUR 20 million-EUR 27 million for group EBITDA. Here, I would like to remind you, because this question has arisen very often, is wow, look at this group EBITDA. You've done a bit more than EUR 20 million in the past year, and now you want to grow to EUR 27 million. No, if you want to compare this, please also adjust 2023 on the EBITDA level for the extraordinary, extraordinary effects of HSM, which were around EUR 4 million. So roughly, our comparison from the last year was EUR 24 million.
I don't have the correct figure in front of me, but you will know it. You will probably know it. So, meaning there is a downside and an upside scenario for us. What's very interesting here, and what we continue to see, we have streamlined our companies in a lot of departments, so our cash flow is even stronger than it already was in the past years. And if we don't acquire a company, this would mean we potentially end up at net debt of zero by the end of the year. But if you ask me, I assume there might be another acquisition, and of course, this is what we're all waiting for. But as you also know, in the end, the acquisition is not always in our hand. It's very...
These are very small markets that we're in, and the seller really needs to want to sell. In the end, we want to pay a reasonable price and don't overprice. You know, we have a very conservative pricing here, and as you can imagine, in an environment like this, we're rather more on the conservative side as we were before, 3-4x EBITDA, maybe a bit more if the company really has an edge, but we stay conservative here. I think now we can start with the Q&A. If you want to ask a question, please just raise your hand. Oh, Holger Steffen is there. Great. Holger, I'll unmute you, or you can unmute yourself, please.
Good morning, Mr. Middelmenne.
Good morning, Holger.
Thank you very much. Thank you very much for your presentation. I have only few questions about last development. You have mentioned negotiations become harder at the moment. Now your customers may see your margin development. Do you fear more, or do you see more pressure to reduce prices now?
So, if you remember the last calls we've had, we've highlighted this for a year now, maybe even more, that the negotiations get more intense. So I wouldn't talk about pricing pressure because there are actually no competitors, only very small ones. But as you know, it's a mutual dependency that we have. And of course, in times where your clients suffer from environmental effects, then they negotiate harder. So I don't wanna talk about pricing pressure, I wanna talk about harder negotiations, which is in a way the same, but it sounds a bit different. So, I think you asked if the margins that we are showing would be another reason for them to pressure us on prices even more.
I think with what we can show to our clients on, for reference, how steel prices have evolved. They will clearly see that the increase in margins is really to the utmost part, a steel price effect. So we, we can pass on steel prices, we pass on lower prices to the client, we pass on higher prices to the client. As you know, this will not affect our margins. So I think that's a good point for us to—for our purchasing departments to negotiate here, and I don't see an increased pressure due to our Q1 figures.
Okay, that's fine. A main factor of shrinking demand last year was a process of destocking at your customers. What do you think, are the stocks of your customers now at a low level? And do you expect a significant increase in order intake if the industry demand picks up a bit?
So, as you know, order intake discussion is pretty unspectacular at our company because from order intake to revenue creation, it's mostly 5-10 business days. But let's say, do they pile up higher stocks and keep them on a higher level for a certain time? From our perspective, this is no longer the case. We've seen this a year ago when we still had the, what's the word? Supply chain issues throughout the world, that our clients were in fact buying more rings and more liners than they needed to have them on stock in case availability would go down. But I think throughout all industries, these supply chain effects have minimized, and we don't see them anymore in our industries.
So from the feeling we currently have is that our clients run on a rather normal stock level, maybe even a bit less, because we see that confidence on the relief in the industry is not there yet. So you can also see that if you listen to calls from BHF, BASF, and so on, they are a bit more confident, but not throughout the bank. So I would say, we are at slightly below normal stock levels.
Okay, that's great. Okay, my last question, about your annual report. You've written that, the company IDF didn't generate significant revenues in the first two months, after consolidation at the beginning of last November. Maybe you can give us some details about the, the reasons for this.
I think I would have to come back to you on that, because I would not know the reason here, 'cause I wasn't prepared for annual report. But I will get back to you on that point, what might be a reason for this.
Okay. Thank you very much for taking my questions.
Great. Thank you. So, we have a new joiner. Patrick, nice to see you on the call. We're already in the Q&A. If you would like to ask a question, please ask your question now. Same for everybody else. Are there any further questions? And currently I do not see any questions in the chat. Any further questions? So this doesn't seem to be the case. So then, thanks for your time, and of course, if you have further questions afterwards, please don't hesitate to call me. Oh, and there is a question from Simon, from Simon Scholes. Simon, please go ahead. You have to unmute yourself, please.
Can you hear me now?
Now I can hear you. Yes.
Okay. Perfect. Thanks. Just on the points that you were making earlier on about the impact of the furniture and the car business on the glue portion of the liner business. Can you give us an idea of how big the furniture bit, how important a part of the liner business the glue business overall is?
That is-
How important the furniture and car businesses are as a part of the glue business.
That is, of course, not a split that I can give you precisely. What I can tell you is that with aluminum liners, for example, these liners are very often used to fill hot melt glue. Because once oxygen is introduced to the product in the liner, then it would harden anyways instantly. So, but at the same time, we also sell these inner liners for being used for nutritional reasons. So that's why we can never give you an exact split of what the end client uses the inner liner for. Because for the major part, we sell our inner liners together with the drum.
Yeah.
So that means we sell to the drum manufacturer, and they sell the whole system to the end user client. But from what we hear, in talks with our clients, we can get a feeling where the lower demand comes from. So we strongly got this feeling in Q1 that on the specialty liners it is these industries giving lower demand to the chemical industry, and the chemical industry then giving lower demand to the drum manufacturers. This has to be understood in this point, this is how the industry works. But in general, you can say, I think I can say that, for the specialty chemical industry, this is still one of the major client groups for our specialty liners.
Thus, if they suffer, we see a suffering here as well. But to give you a better idea, this is not something that has started in Q1. This is something that we see in comparison to Q1 last year. So this situation has been here in the past quarters. It's nothing new. We just don't see the rebound effect as we see it from the rest of the chemical industry to a certain extent. So, from our perspective, it's more of a lagging behind of this industry, and to a certain extent, we assume this will pick up in the next quarters at some point. But of course, we can never know.
Okay, thanks very much.
Thanks for your questions. Are there any further questions? So now there do not seem to be any further questions. Excuse me? Hello? Okay, that was probably... I'll unmute you here. I'll mute you here. Great, so thanks for your time and your interest in our call. As I just said, if any further questions should arise, then please, just call me today, tomorrow, in the next days. And otherwise, I will be on the spring conference, next week with my family office. I won't be presenting for Ringmetall there, but if you would like to come by for a chat or a drink, let me know and we'll arrange something. So thank you very much for your time, and have a good day.