Disposal of Chemring Military Products, Inc.

FOR IMMEDIATE RELEASE                                                                                                        5th April 2019

CHEMRING GROUP PLC ("Chemring", the "Group" or the "Company")

Disposal of Chemring Military Products, Inc.

Chemring today announces completion of the sale of its military trading business Chemring Military Products Inc. ("CMP") to Global Ordnance LLC ("Global Ordnance") for a cash consideration of $4 million.

Following a strategic review, the Group announced in November 2018 its intention to exit the commoditised Energetics businesses, located in Derby and Florida, and to focus on the niche specialist energetic devices and materials businesses in Chicago, Scotland and Norway, where the Group has strong intellectual property and high barriers to entry.

CMP, located in Perry, Florida, procures and delivers worldwide US-standard and non-standard ammunition, and weapons systems. In the year ended 31 October 2018, CMP generated revenues of $111 million, an operating profit of $11 million, had gross assets of $19 million and net assets of $3 million. The business was treated as discontinued in the Group's 2018 financial statements and for the year ended 31 October 2019 was not expected to make a material contribution to Group operating profit.

$2.5 million of the consideration was paid on completion. Additional payments of $1 million and $0.5 million are due on the first and second anniversaries of completion respectively.

The proceeds after costs will be used by the Group for general corporate purposes.

Global Ordnance is a Veteran Owned Small Business that responds to the critical needs of the US Government and its allies worldwide. Global Ordnance is a trusted partner of US Special Operations Command and the US Army, providing them with the products and services they depend upon.

Processes to exit the Group's remaining commoditised energetics businesses in Florida and Derby are ongoing. The Group will provide further updates when appropriate.

Michael Ord, Chief Executive of Chemring, said:

 "I am pleased to announce the sale of Chemring Military Products to Global Ordnance. This follows our decision to exit the commoditised Energetics businesses and will enable a greater focus on our growing and differentiated positions in Countermeasures & Energetics and Sensors & Information, and will improve the quality of the Group and its earnings."

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For further information:

 Cautionary statement

This announcement contains unaudited information based on management accounts and forward-looking statements that are based on current expectations or beliefs, as well as assumptions about future events. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as anticipate, target, expect, estimate, intend, plan, goal, believe, will, may, should, would, could, is confident, or other words of similar meaning. Undue reliance should not be placed on any such statements because they speak only as at the date of this document and, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and Chemring's plans and objectives, to differ materially from those expressed or implied in the forward-looking statements.

There are a number of factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements. Among the factors that could cause actual results to differ materially from those described in the forward-looking statements are; increased competition, the loss of or damage to one or more key customer relationships, changes to customer ordering patterns, delays in obtaining customer approvals for engineering or price level changes, the failure of one or more key suppliers, the outcome of business or industry restructuring, the outcome of any litigation, changes in economic conditions, currency fluctuations, changes in interest and tax rates, changes in raw material or energy market prices, changes in laws, regulations or regulatory policies, developments in legal or public policy doctrines, technological developments, the failure to retain key management, or the key timing and success of future acquisition opportunities or major investment projects.

Chemring undertakes no obligation to revise or update any forward-looking statement contained within this announcement, regardless of whether those statements are affected as a result of new information, future events or otherwise, save as required by law and regulations.

Notes to editors

·      Chemring is a global business that specialises in the manufacture of high technology products and the provision of services to the aerospace, defence and security markets

·      Employing approximately 2,500 people worldwide, and with production facilities in four countries, Chemring meets the needs of customers in more than fifty countries

·      Chemring is now organised under two strategic product segments:  Countermeasures & Energetics, and Sensors & Information

·      Chemring has a diverse portfolio of products that deliver high reliability solutions to protect people, platforms, missions and information against constantly changing threats

·      Operating in niche markets and with strong investment in research and development, Chemring has the agility to rapidly react to urgent customer needs

www.chemring.co.uk