Geratherm Medical AG

Earnings Release • May 20, 2020

GERATHERM AT A GLANCE

Facts and figures	January March 2020	January March 2019	Change %
Sales revenues	6,253 kEUR	6,276 kEUR	-0.4 %
of which export share	5,341 kEUR	4,946 kEUR	8.0 %
Export ratio	85 %	79 %	7.6 %
Gross result for period under review (EBITDA)	671 kEUR	1,232 kEUR	-45.5 %
EBITDA margin	10.7 %	19.6 %	-45.4 %
Amortisation and depreciation	-299 kEUR	-275 kEUR	8.9 %
Operating result (EBIT)	372 kEUR	957 kEUR	-61.1 %
EBIT margin	5.9 %	15.2 %	-61.2 %
Financial results	-24 kEUR	-12 kEUR	100.0 %
Profit (loss) on ordinary business activities	348 kEUR	945 kEUR	-63.2 %
Net earnings of the parent company's shareholders in given period	287 kEUR	582 kEUR	-50.7 %
Long-term assets	13,340 kEUR	11,016 kEUR	* 21.1 %
Short-term assets	20,276 kEUR	20,143 kEUR	* 0.7 %
Balance sheet total	33,616 kEUR	31,159 kEUR	* 7.9 %
Equity capital	18,665 kEUR	20,532 kEUR	* -9.1 %
Return on equity	6.2 %	11.3 %	* -45.8 %
Equity ratio	55.5 %	65.9 %	* -15.8 %
Cash, cash equivalents and securities	8,159 kEUR	8,113 kEUR	0.6 %
Net result per share for given period according to IFRS (EPS)**	EUR 0.06	EUR 0.12	-50.0 %
Net result per share for given period as per DVFA** (German Association for Financial Analyses and Asset Management)	EUR 0.06	EUR 0.12	-50.0 %
Number of employees at end of period	211	207	1.9 %
Total shares issued
** based on total shares issued	4,949,999 4,949,999	4,949,999 4,949,999	0.0 % 0.0 %

*Last year's figures are only comparable to a limited extent, see error correction as at 31/12/2019

Business Performance from 1 January to 31 March 2020

• Sales revenues EUR 6.3 million -0.4 %
• Gross result for first quarter (EBITDA) 671 kEUR -45.5 %
• Operating result (EBIT) 372 kEUR (2019: 957 kEUR).
• EBIT margin 5.9 % (2019: 15.2 %)
• Results from ordinary activities 348 kEUR (2019: 945 kEUR).
• Relocation of Geratherm Respiratory to the new production facility completed
• Postponements in installations in hospitals and clinics abroad due to closed borders
• Earnings per share EUR 0.06 (2019: EUR 0.12)

Dear Shareholders and Parties Interested in Geratherm Medical,

We have survived the first "Corona quarter" without suffering any major bruises. In terms of sales and earnings, we were able to maintain the very healthy first quarter of the previous financial year, posting a slight decrease of -0.4 %. There were two opposing trends that occurred in the first quarter of 2020. On the one hand, we had limited options to procure products from China, and on the other hand, we increased production significantly as a result of the coronavirus pandemic in Europe. The supply bottlenecks have been rectified so that we are expecting higher domestic production.

As negative special factors, we had to take into account the strong devaluation of the Brazilian real of almost 30 % at our subsidiary in Brazil in our quarterly financial statements. The delivery of LMT's major order to Poland was also not possible due to the closed borders. On a positive note, Geratherm Respiratory in Bad Kissingen posted a healthy growth of +35.5 % for its pulmonary function measuring devices in the first quarter and the production of clinical thermometers was expanded considerably at the Thuringia plant in mid-March.

The gross result of the overall performance was EUR 4.052 million (2019: EUR 4.214 million). The gross margin on sales was 64.8 % (2019: 67.1 %). The EBIT margin decreased to 5.9 % (2019: 15.2%). The operating result EBIT was during the first quarter 372 kEUR (2019: 957 kEUR).

The results from ordinary business activities was 348 kEUR (2019: 945 kEUR). The shareholders' result after taxes was 287 kEUR for the first quarter (2019: 582 kEUR) or EUR 0.06 per share (2019: EUR 0.12)

Facts and figures		I/20	IV/19	III/19	II/19	I/19
(in kEUR)	Sales	6,253	4,503	4,644	4,428	6,276
	EBITDA margin	10.7%	5.0%	13.3%	6.3%	19.6%
	EBIT	372	-198	304	-14	957
	EPS (EUR)	0.06	-0.04	0.03	0.00	0.12
	Cash flow	1,043	694	536	345	1,171

Sales development

Sales development varied considerably in the individual regions during the first quarter. This was influenced by the strong demand for Geratherm products that are produced in Germany and a non-intact supply chain in the first two months for Geratherm products that are produced in Asia. All in all, we were able to match the very healthy prior-year quarter with a slight drop in sales of 0.4 %.

Geratherm managed to post an increase in sales of +7.5 % during the first quarter on the European market. There was a -31.4 % decline in sales on the German market, which is mainly due to the slump in demand for sensors, in particular among industrial customers.

On the US market, we were able to show a +22.3 % increase in sales compared to the first quarter of the prior year. We recorded a positive trend with a +20.2 % increase in sales on the South American market, which is mainly due to the strong sales of clinical thermometers. In the Middle East there was a decrease in sales of -48.5 % as of the reporting date.

Sales by regions 1/1 to 31/3/2020

Geratherm Medical's products are primarily marketed internationally. 85.4 % (2019: 78.8 %) of Geratherm products were exported in the first quarter.

Sales by segments 1/1 to 31/3/2020

In the Healthcare Diagnostic segment, where we primarily market clinical thermometers, blood pressure monitors and women's health products to pharmacies and drugstores world-wide, we showed a slight drop of -1.3 % in sales. The environmentally friendly Gallium-based glass thermometer manufactured in Germany managed to post a growth of +6.7 %. The clinical "non-contact" thermometers showed a sales expansion of +97.2 %. The sales of blood pressure monitors had to post a -38.0 % drop in sales as a result of change in customer priority. The same applies to the Women Health segment that posted a -51.8 % drop in sales in the first quarter. The Healthcare Diagnostic segment accounted for 65.2 % of the Geratherm Group (2019: 65.8 %)

In the Respiratory segment, where we offer sensors and products for testing pulmonary function, we managed to also record a slight growth in segment sales of +1.0 %. Sensor Systems which were included in the segment sales had posted a drop of -29.2 % as a result of the lower demand for sensors. The sales of medical products for measuring pulmonary function showed very dynamic development with an increase in sales of +35.5 % over the prior-year quarter.

The rate of growth in the Cardio/Stroke segment was also maintained during the course of the first quarter. The segment managed to report once again a double-digit increase in sales of +16.0 % during the first three months.

Sales in the Medical Warming Systems segment had declined in the period under review, as in the quarters of the previous year. All in all, we had to show another decline in sales of -14.6 %. The warming systems for operating rooms are still in the recertification process and LMT products could not be installed in hospitals and clinics due to closed borders, especially in Poland.

Earnings situation

Despite the challenging underlying conditions, we were able to conclude the first three months with a positive consolidated result. With an almost steady level of sales, extraordinary charges arose as a result of the significant devaluation of the Brazilian real at the end of the quarter as well as the negative profit contribution on part of LMT Medical and Warming Systems, while higher personnel expenses led to a lower operating result. With an EBITDA margin of 10.7 % and an EBIT margin of 5.9 %, we did not meet our earnings expectations in the first quarter.

The gross profit margin of sales during the first three months amounted to 64.8 % (2019: 67.1 %). The gross profit of EUR 4.052 million was with a decrease of 3.8 % slightly below the prior-year's level.

The EBITDA decreased to 671 kEUR (EUR 1.232 million) as a result of +5.1 % higher personnel expenses and considerably higher other operating expenses. The write-offs increased by +8.9 % to 299 kEUR.

The operating result (EBIT) decreased by -61.1 % to 372 kEUR. The financial results amounted to -24 kEUR (2019: 12 kEUR). The result from ordinary business activities during the first three months amounted to 348 kEUR (2019: 945 kEUR).

Taxes on profit decreased by -38.4 % to 199 kEUR. A consolidated net profit for the first three months amounted to 148 kEUR (2019: 622 kEUR).

After including the result attributable to minority interests, there was a net income of 287 kEUR (2019: 582 kEUR) generated for the shareholders of the parent company for the first three months.

The result per share for the first three months is EUR 0.06 (2019: EUR 0.12).

Net assets and financial situation

Geratherm Medical enjoys a favourable asset situation. The balance sheet total of EUR 33.6 million is essentially formed by equity capital in the amount of EUR 18.7 million. The equity-to-assets ratio as of the reporting date was 55.5 % (2019: 65.9 %). The return on equity amounted to 6.2 % (2019: 11.3 %).

As of 31 March 2020, the company had cash, cash equivalents and securities in the amount of EUR 8.2 million (2019: EUR 8.1 million). Thus, the company still has a solid financial position.

The long-term assets amounted to EUR 13.3 million (2019: EUR 12.5 million). The increase is due to the completion of the new production building at the Bad Kissingen location.

The short-term assets decreased slightly by -2.5 % to EUR 20.3 million.Inventories dropped by -3.2 % to EUR 7.6 million. Due to the strong sales resulting from the corona pandemic as of mid-March, trade accounts receivables increased considerably by +40.5 % to EUR 3.5 million. All in all, the "Receivables and other assets" item increased by +33.2 % to EUR 4.5 million.

Geratherm holds securities in the amount of EUR 4.2 million. As of the reporting date, the valuation basis decreased by -22.1 %. The cash and cash equivalents available as at 31 March 2020 amounted to EUR 3.9 million (2019: EUR 4.1 million).

The gross cash flow for the first three months decreased to EUR 1.043 million (2019: EUR 1.171 million). The cash flow from operations increased to 721 kEUR (2019: 256 kEUR). The cash flow from investments amounted to -EUR 1.198 million (2019: -EUR 1.070 million). The cash flow from financing activities was 263 kEUR (2019: 139 kEUR).

Research and development

Our research and development activities are currently concentrated in the Respiratory and Medical heat Systems, in particular at LMT, as well as on the Cardio/Stroke segment.

Staff

The Geratherm Group had a staff of 211 persons in total as of 31 March 2020 (2019: 207) with 199 employees in Germany.

Outlook

Since the beginning of March, the coronavirus pandemic has led to a significant increase in the international demand especially for clinical thermometers and pulmonary function measuring devices. We therefore assume that we will have a very strong second quarter thanks to the orders received. In April 2020, the Diagnostic segment was considerably higher with a +94,4 % increase in sales than the same month of the prior year. LMT's project sales are also expected to increase during the second quarter due to the opening of borders, in particular with Poland.

Despite certain residual risks we are planning to hold this year's annual general meeting of Geratherm Medical on 12 June 2020, 2 PM in the "Grandhotel Hessischer Hof" in Frankfurt am Main, while taking into account the appropriate hygiene measures.

Geratal, May 2020

Dr. Gert Frank Chief Executive Officer

Consolidated profit and loss statement from 1 January to 31 March 2020

	January- March 2020 EUR	January- March 2019 EUR	Change
Sales revenues	6,253,273	6,276,197	-0.4%
Change in inventory of finished products and work in process	-390,365	88,244	>100.0%
Other capitalised own work	51,923	59,500	-12.7%
Other operating income	171,748	116,165	47.8%
	6,086,579	6,540,106	-6.9%
Cost of materials
Cost of raw materials, consumables
and goods for resale	-1,783,846	-2,009,965	-11.2%
Costs of purchased services	-251,141	-315,943	-20.5%
	-2,034,987	-2,325,908	-12.5%
Gross profit or loss	4,051,592	4,214,198	-3.9%
Personnel costs
Wages and salaries	-1,592,541	-1,508,566	5.6%
Social security, pension and other benefits	-330,178	-321,364	2.7%
	-1,922,719	-1,829,930	5.1%
Other operating expenses	-1,458,173	-1,152,825	26.5%
Gross profit (EBITDA)	670,700	1,231,443	-45.5%
Amortisation of intangible assets and depreciation of tangible assets	-298,913	-274,525	8.9%
Operating results	371,787	956,918	-61.1%
Securities-related expenses	-322	-1,236	-73.9%
Other interest and similar income	463	367	26.2%
Interests and similar expenses	-24,272	-10,904	>100.0%
Financial results	-24,131	-11,773	>100.0%
Profit (loss) on ordinary business activities	347,656	945,145	-63.2%
Income taxes	-199,283	-323,255	-38.4%
Consolidated profit for the period	148,373	621,890	-76.1%
Result of non-controlling shareholders	-138,834	39,786	>100.0%
Profits of the parent company's shareholders	287,207	582,104	-50.7%
Earnings per share (undiluted)	0.06	0.12	-50.0%

Consolidated balance sheet as at 31 March 2020

Assets	31 March 2020 EUR	31 December 2019 EUR	Change
A. Long-term assets
I. Intangible assets
1. Development costs	2,139,086	1,952,094	9.6%
2. Other intangible assets	231,321	244,432	-5.4%
3. Goodwill	1	1	-
	2,370,408	2,196,527	7.9%
II. Tangible assets
1. Land, land rights and buildings	3,368,392	3,396,137	-0.8%
2. Technical equipment and machinery 3. Other equipment, factory and office equipment	3,259,746 243,848	3,310,947 252,301	-1.5% -3.4%
4. Construction in process	1,901,838	1,323,247	43.7%
	8,773,824	8,282,632	5.9%
III. Rights of use	361,768	346,142	4.5%
IV. Financial assets accounted on basis of equity method	350,000	350,000	0.0%
V. Other financial assets	1,370,650	1,173,731	16.8%
VI. Other long-term receivables	113,112	127,437	-11.2%
B. Short-term assets	13,339,762	12,476,469	6.9%
I. Inventories
1. Raw materials and supplies	2,417,163	2,318,131	4.3%
2. Unfinished goods	1,280,331	1,252,899	2.2%
3. Finished goods and merchandise	3,916,287	4,293,693	-8.8%
	7,613,781	7,864,723	-3.2%
II. Receivables and other assets
1. Trade receivables	3,521,282	2,505,893	40.5%
2. Receivables from current income taxes	328,860	360,385	-8.7%
3. Receivables from other taxes	240,043	167,827	43.0%
4. Other assets	412,659	346,794	19.0%
	4,502,844	3,380,899	33.2%
III. Securities	4,209,945	5,403,538	-22.1%
IV. Cash and cash equivalents	3,949,332	4,138,814	-4.6%
	20,275,902	20,787,974	-2.5%
	33,615,664	33,264,443	1.1%
Equity and liabilities
A. Equity capital
I. Subscribed capital	4,949,999	4,949,999	0.0%
II. Capital reserve	12,174,192	12,174,192	0.0%
III. Other reserves	2,018,046	2,703,227	-25.3%
Assignable to the shareholders of the parent company	19,142,237	19,827,418	-3.5%
Shareholders of minority interests	-477,076	-646,636	-26.2%
	18,665,161	19,180,782	-2.7%
B. Non-current liabilities
1. Liabilities to banks	5,383,329	5,208,328	3.4%
2. Accrued investment subsidies	1,319,518	1,347,995	-2.1%
3. Long-term leasing liabilities	108,980	63,011	73.0%
4. Other long-term liabilities	409,989	409,989	0.0%
	7,221,816	7,029,323	2.7%
C. Deferred taxes	35,963	30,733	17.0%
C. Current debts
1. Liabilities to banks	2,004,302	2,057,920	-2.6%
2. Trade accounts payables	1,730,662	1,410,724	22.7%
3. Short-term leasing liabilities	259,660	290,301	-10.6%
4. Liabilities from current income taxes	12,954	41,016	-68.4%
5. Contractual liabilities	1,508,317	1,267,167	19.0%
6. Other tax liabilities	465,386	520,155	-10.5%
7. Other short-term liabilities	1,711,443	1,436,322	19.2%
	7,692,724	7,023,605	9.5%
	33,615,664	33,264,443	1.1%

Consolidated statement of cash flows from 1 January to 31 March 2020

	January- March 2020 kEUR	January- March 2019 kEUR
Consolidated profit for the period	148	622
Non-cash expenses and income of Geratherm do Brasil Ltda.	-205	0
Other non-cash expenses	606	-46
Interest earnings	0	0
Interest expenses	24	11
Increase in deferred taxes	5	109
Income tax expenditure	194	229
Depreciation of fixed assets	224	209
Amortisation of usage rights	75	66
Amortisation of public grants and subsidies	-28	-29
Gross cash flow	1,043	1,171
Decrease/ increase in inventories	251	-331
Increase in trade receivables and other assets	-1,149	-830
Increase in current liabilities and other liabilities	781	362
Cash inflow from interest	0	0
Cash outflow from interest	-24	-11
Cash outflow from taxes	-181	-105
Cash flow from operations	721	256
Cash outflow for investments in intangible assets (without capitalised development costs) and tangible assets	-711	-351
Additions to capitalised development costs	-190	-114
Cash inflow from funding sources for investments	0	0
Cash inflow based on financial assets	0	0
Cash outflow based on financial assets	-297	-605
Cash flow from investments	-1,198	-1,070
Cash outflow for rental and lease liabilities	-75	-66
Dividend payments	0	0
Cash inflow from taking out loan liabilities	550	205
Cash outflow for repayment of loan liabilities	-212	0
Decrease/ increase in long-term liabilities	0	0
Cash flow from financing activities	263	139
Change in cash and cash equivalents	-214	-675
Cash and cash equivalents at beginning of reporting period	4,139	5,361
Exchange rate difference	24	15
Cash and cash equivalents at end of reporting period	3,949	4,701

Consolidated statement of change to the shareholders' equity as at 31 March 2020

				Other reserves
	Sub scribed capital	Capital reserve	Market valuation reserve	Currency conversion reserve	Accumulat ed earnings	Assignable to the shareholders of the parent company	Non control ling interests	Equity capital
	EUR	EUR	EUR	EUR	EUR	EUR	EUR	EUR
as of 1 January 2019	4,949,999	12,174,192	703,276	288,383	1,837,808	19,953,658	-357,718	19,595,940
Dividend paid to shareholders	0	0	0	0	0	0	0	0
Transactions with shareholders and member partners	0	0	0	0	0	0	0	0
Consolidated earnings in period concerned	0	0	0	0	582,104	582,104	39,786	621,890
Unrealised profits and losses from valuation of securities	0	0	345,406	0	0	345,406	0	345,406
Currency translation in the Group	0	0	0	-15,453	0	-15,453	-15,374	-30,827
Total consolidated income	0	0	345,406	-15,453	582,104	912,057	24,412	936,469
as of 31 March 2019	4,949,999	12,174,192	1,048,682	272,930	2,419,912	20,865,715	-333,306	20,532,409
as of 1 January 2020	4,949,999	12,174,192	1,929,289	313,599	460,339	19,827,418	-646,636	19,180,782
Dividend paid to shareholders	0	0	0	0	0	0	0	0
Transactions with shareholders and member partners	0	0	0	0	0	0	0	0
Consolidated earnings in period concerned	0	0	0	0	287,207	287,207	-138,834	148,373
Unrealised profits and losses from valuation of securities	0	0	-1,294,108	0	0	-1,294,108	0	-1,294,108
Currency translation in the Group	0	0	0	321,720	0	321,720	308,394	630,114
Total consolidated	0	0	-1,294,108	321,720	287,207	-685,181	169,560	-515,621
income

Consolidated statement of comprehensive income as per IFRS for the period from 1 January to 31 March 2020

	1/1-31/12/2020 EUR	1/1-31/3/2019 EUR
Consolidated profit for the period Income and expenses directly recognised in equity, which are not reclassified to profit or loss:	148,373	621,890
Profits or losses from valuation of investments according to IFRS 9	0	0
Profits or losses from valuation of securities according to IFRS 9	-1,294,108	345,406
	-1,294,108	345,406
Income and expenses directly recognised in equity, which are reclassified to profit or loss under specific conditions:
Profits or losses from valuation of securities according to IAS 39	0	0
Difference resulting from currency translation	630,114	-30,827
	630,114	-30,827
Income and expenses directly included in equity capital	-663,994	314,579
Total consolidated income	-515,621	936,469
of which assignable to shareholders of minority interest	169,560	24,412
of which assignable to shareholders of parent company	-685,181	912,057

Group segment report for the period from 1 January to 31 March 2020

By product groups 2020	Healthcare Diagnostic Jan.-Mar. kEUR	Respiratory Jan.-Mar. kEUR	Medical Warming Systems Jan.-Mar. kEUR	Cardio/ Stroke Jan.-Mar. kEUR	Consolidation Jan.-Mar. kEUR	Reconciliation Jan.-Mar. kEUR	Total Jan.-Mar. kEUR
Segment sales	4,400	1,378	359	519	-403	0	6,253
Operating results	364	42	-240	131	107	-32	372
including:
Amortisation/depreciatio n of intangible and tangible assets	158	35	12	17	60	17	299
Segment assets	6,975	2,398	2,127	851	0	7,925	20,276
Segment debts	6,692	2,283	1,419	1,575	0	1,371	13,340
Based on product groups 2019	Healthcare Diagnostic Jan.-Mar. kEUR	Respiratory Jan.-Mar. kEUR	Medical Warming Systems Jan.-Mar. kEUR	Cardio/ Stroke Jan.-Mar. kEUR	Consolidation Jan.-Mar. kEUR	Reconciliation Jan.-Mar. kEUR	Total Jan.-Mar. kEUR
Segment sales	4,273	1,232	416	486	-215	84	6,276
Operating results	853	180	-152	52	-213	237	957
including:
Amortisation/depreciation of intangible	148	26	39	15	9	38	275

and tangible assets
Segment assets	13,988 *	2,984	3,162 *	2,385 *	0	8,416	30,935*
Segment debts	8,335 *	1,081	619 *	483 *	0	0	10,518*

*Last year's figures are only comparable to a limited extent, see error correction as at 31/12/2019

By region	Europe	South America	Germany	Middle East	USA	Other	Total
2020	Jan.-Mar. kEUR	Jan.-Mar. kEUR	Jan.-Mar. kEUR	Jan.-Mar. kEUR	Jan.-Mar. kEUR	Jan.-Mar. kEUR	Jan.-Mar. kEUR
Sales revenues	3,967	320	1,281	194	400	494	6,656
Elimination of intragroup sales	0	-34	-369	0	0	0	-403
Sales revenues on third parties	3,967	286	912	194	400	494	6,253
Gross profit or loss	2,594	114	632	127	261	323	4,051
Operating results	399	-234	97	20	40	50	372
including:
Amortisation and depreciation of intangible and tangible assets	191	10	46	9	19	24	299
Amortisation of public grants and subsidies	19	0	4	1	2	2	28
Acquisition costs of fixed assets for the period	0	0	901	0	0	0	901
Segment assets	0	917	32,612	0	87	0	33,616

By region	Europe	South America	Germany	Middle East	USA	Other	Total
2019	Jan.-Mar. kEUR	Jan.-Mar. kEUR	Jan.-Mar. kEUR	Jan.-Mar. kEUR	Jan.-Mar. kEUR	Jan.-Mar. kEUR	Jan.-Mar. kEUR
Sales revenues	3,690	238	1,545	377	327	314	6,491
Elimination of intragroup sales	0	0	-215	0	0	0	-215
Sales revenues on third parties	3,690	238	1,330	377	327	314	6,276
Gross profit or loss	2,473	129	930	252	219	211	4,214
Operating results	539	66	203	55	48	46	957
including:
Amortisation and depreciation of intangible and tangible assets	166	1	62	17	15	14	275
Amortisation of public grants and subsidies	18	0	6	2	2	1	29
Acquisition costs of fixed assets for the period	0	58	407	0	0	0	465
Segment assets	0	864	29,987*	0	84	0	30,935*

*Last year's figures are only comparable to a limited extent, see error correction as at 31/12/2019

Notes on interim consolidated financial statements for the period from 1 January 2020 to 31 March 2020

Accounting and valuation methods

The interim consolidated financial statements of Geratherm Medical AG as at 31 March 2020 were prepared in accordance with the rules of the International Financial Reporting Standards (IFRS) valid on the date of the financial statements and in consideration of the guidance provided by the International Financial Reporting Interpretations Committee (IFRIC), as is mandatory in the European Union.

The accounting, evaluation and consolidation principles were maintained, as shown in the Notes to Consolidated Financial Statements for 2019 Fiscal Year.

The valuation of assets and liabilities is based in part on estimates and/or assumptions about future developments. The estimates are based on past experience and other knowledge of the business transactions which are to be accounted for. For instance, the assessment of capitalisation requirements for development projects, the statements on economic useful lives for long-term intangible and tangible assets are based in particular on estimates and assumptions. In addition, the assessment of assets of the "hold and sell" category, which are not traded on an active market, and the impairment tests of the cash-generating units and assets is based on corporate planning, which of course involves uncertainties such that the actual values may deviate in individual cases from the made assumptions and estimates. There are also estimates and assumptions relating to the contractual term of the leased office and storage space of subsidiaries. Estimates and the underlying assumptions are regularly checked and evaluated with regard to possible impact on accounting. There are also estimates relating to the loan obligations of the Brazilian subsidiary, which is currently in bankruptcy protection under Brazilian law. Exercise of substantial discretionary powers is not available.

Consolidated group

No changes occurred in the consolidation group as at 31 March 2020:

Company	Share quota	Share quota
	31/3/2020	31/12/2019
GME Rechte und Beteiligungen GmbH, Geschwenda, Deutschland	100.00%	100.00 %
apoplex medical technologies GmbH, Pirmasens, Germany	53.42%	53.42 %
Geratherm Respiratory GmbH, Bad Kissingen, Germany	65.27%	65.27 %
Geratherm Medical do Brasil Ltda., Sao Paulo, Brazil	51.00%	51.00 %
Sensor Systems GmbH, Steinbach Hallenberg, Germany	100.00%	100.00 %
Capillary Solutions GmbH, Geschwenda, Germany	100.00%	100.00 %
LMT Medical Systems GmbH, Lübeck, Germany	80.00%	80.00 %
Subsidiary of LMT Lübeck
LMT Medical Systems Inc., Ohio, USA	100.00%	100.00 %

Equity capital

The development of the equity capital is shown in the consolidated statement of change to the shareholders' equity. The subscribed capital of Geratherm Medical AG amounted all in all to EUR 4,949,999 as at 31 March 2020 (2019: EUR 4,949,999) and is divided into 4,949,999 (2019: 4,949,999) share certificates issued to the bearers. The subscribed capital has been paid in full. As of the reporting date, there were no shares held by the company.

These interim consolidated financial statements as at 31 March 2020 were not audited or reviewed by the company's auditors.

Geratal, May 2020

Dr. Gert Frank Chief Executive Officer

COMPANY CALENDAR 2020

Quarterly statement Q1/2020	May✓ 20
Annual general meeting in Frankfurt am Main "Grandhotel Hessischer Hof"	12 June
Quarterly statement Q2/2020	20 August
Quarterly statement Q3/2020	19 November

Geratherm Medical AG Fahrenheitstraße 1 99331 Geratal Phone: +49 36205 980 Fax.: +49 36205/98 115 e-mail: info@geratherm.com Internet: www.geratherm.com