Renold Regulatory News (RNO)

Renold plc

("Renold", "the Company" or "the Group")

Trading Statement

Renold, a leading international supplier of industrial chains and related power transmission products, is today issuing a Trading Statement covering the four month period from 1 October 2015 to 31 January 2016 ("the Period").

Our Interim Results noted a weak start to the second half of the financial year in many of the Group's end markets. Most geographical territories saw significant volatility throughout the Period in both the Chain and Torque Transmission divisions. This volatility extended to the North American markets which had experienced a flat first half. December was particularly weak and while January did improve, the overall trend for sales and orders in the second half is still negative.

Underlying1 sales for the full year are therefore expected to be around 10% lower than the prior year. The Chain division is expected to finish the year down approximately 8% and Torque Transmission down around 14%.

The sustained delivery of self-help measures has led to a further lowering of our break-even point. As a result, the Board now expects that the impact of the reduction in sales on adjusted2 operating profit will be limited to a decrease of around £2.0m (or 13%) compared to the prior year. In the Chain division, efficiency gains will deliver adjusted operating profit similar to the prior year, despite the forecast fall in underlying sales. The smaller Torque Transmission division has also made efficiency gains but its scale means it is less able to absorb the impact of the forecast fall in underlying sales.

The Group has continued to make progress in delivering the self-help measures that underpin the STEP 2020 strategic plan and its core objectives remain robust. Our acquisition of the Aventics Tooth Chain business went smoothly with the integration and business performance proceeding according to plan. Investment by the Group has been maintained on attractive payback capital projects and on revenue expenditure to support our goals for growth.

The lower operating results and the impact of the acquisition will feed through into forecast net debt at the year end which is now expected to result in a leverage ratio3 of around 1.25x. This remains comfortably within our covenant limit of 2.5x.

Robert Purcell, Chief Executive of Renold, said:

"The fact that international industrial end markets are volatile has been widely reported. We are continuing to do the right things to protect capital and revenue investment in projects to support the medium term delivery of the STEP 2020 Strategic Plan rather than simply cost cutting to deliver short term gains at the expense of the Group's future development. Our focus remains on getting the business into the right shape to withstand the current volatility and to deliver growth in the longer term."

There have been no other significant changes in the position of the Company since the publication in November 2015 of the interim results for the six month period ended 30 September 2015.

(1) The use of "underlying" excludes the impact of changes in foreign exchange rates.

(2) Adjusted operating profit excludes exceptional items, the costs of administering closed defined benefit pension schemes and amortization of acquired intangibles.

(3) Leverage ratio is calculated as Net Debt divided by Adjusted EBITDA

10 February 2016

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NOTES FOR EDITORS

Renold is a global leader in the manufacture of industrial chains and also manufactures a range of torque transmission products which are sold throughout the world to a broad range of original equipment manufacturers, end users and distributors. The Company has a well deserved reputation for quality that is recognised worldwide. Its products are used in a wide variety of industries including manufacturing, transportation, energy, steel and mining.

Further information about Renold can be found on the website at: www.renold.com