Geratherm Medical AG

Quarterly Report • Nov 21, 2013

GERATHERM AT A GLANCE

Group financial ratio	January September 2013	January September 2012	Change
Turnover	12,918 TEUR	11,694 TEUR	10.5 %
Including export share	11,436 TEUR	10,198 TEUR	12.1 %
Export rate	89 %	87 %	2.3 %
Gross result (EBITDA)	1,376 TEUR	701 TEUR	96.2 %
EBITDA-Margin	10.7 %	6.0 %	78.3 %
Depreciation	-613 TEUR	-566 TEUR	8.4 %
Operating results (EBIT)	763 TEUR	135 TEUR	>100.0 %
EBIT margin	5.9 %	1.2 %	>100.0 %
Financial results	89 TEUR	466 TEUR	-80.8 %
Result of ordinary activities	852 TEUR	601 TEUR	41.7 %
Net earnings of the parent company`s shareholders in the period concerned	624 TEUR	615 TEUR	1.5 %
Long-term assets	5,261 TEUR	5,612 TEUR	-6.3 %
Short-term assets	22,608 TEUR	17,780 TEUR	27.2 %
Balance sheet total	27,869 TEUR	23,392 TEUR	19.1 %
Equity capital	19,225 TEUR	17,910 TEUR	7.3 %
Return on equity	4.3 %	4.6 %	-5.5 %
Equity ratio	69.0 %	76.6 %	-9.9 %
Cash and securities	14,164 TEUR	8,379 TEUR	69.0 %
Result per share pursurant to IFRS (EPS)*	0.13 EUR	0.12 EUR	8.3 %
Result per share pursurant to DVFA*	0.13 EUR	0.12 EUR	8.3 %
Number of employees at end of the period	115	123	-6.5 %
No-par value shares	4,949,999	4,949,999	-
* compared to registered shares in circulation	4,949,999	4,949,999	-

Business performance from 1 January to 30 September 2013

• Sales proceeds 12.9 m EUR +10.5%
• Gross period earnings (EBITDA) 1,376 TEUR +96.2%
• Operating results (EBIT) 763 TEUR +463.2%
• Result of normal business activity 852 TEUR +41.7%
• Earnings after taxes (EAT) 624 TEUR +1.5%
• New business divisions generate growth

Dear Geratherm Medical shareholders and other interested parties,

The positive Geratherm Medical sales and earnings trend also continued into the third quarter 2013. Sales increased by 10.5% for the first nine months. The new business divisions of Cardio/Stroke (+55.0%), Medical Warming Systems (+42.6%) and Respiratory (+41.9%) made an above-average contribution to sales growth. The Healthcare Diagnostic sector saw sales increase by +3.9%.

The export rate amounted to 88.5%. The momentum of the individual market outlets developed in line with previous quarters, with markets in the Middle East (+38.3%), the USA (+23.3%) and Europe (+17.7%) continuing to develop positively. Weaker development was seen in the market outlets of South America (−3.8%) and Germany (−0.9%).

In terms of income, development in the third quarter declined slightly compared with the previous quarter, yet it was still significantly better than in the same quarter of the previous year. The gross income (EBITDA) rose in the third quarter to 367 TEUR (p.y. 156 TEUR), while operating results (EBIT) rose to 161 TEUR (p.y. −37 TEUR).

In the third quarter it was not possible to achieve a positive net financial result, the final figure being −53 TEUR (p.y. +96 TEUR). This was due to unrealised income from security sales.

After deducting taxes on corporate income and business profits, the third quarter 2013 revealed a consolidated net income of 62.7 TEUR (p.y. 61.9 TEUR). The income for the period for non-controlling interests accounted for 27.5 TEUR. Earnings after taxes in the third quarter amounted to 35 TEUR(p.y. 161 TEUR) or 1 cent per share (p.y. 3 cents).

Facts and figures		III/13	II/13	I/13	IV/12	III/12
(in TEUR)	Turnover	4,220	4,324	4,374	4,276	3,834
	EBITDA	8.7 %	8.9 %	14.2%	23.7%	4.1%
	EBIT	161	180	422	822	-38
	EPS (EUR)	0.01	0.07	0.05	0.12	0.03
	Cash flow	266	216	611	977	135

Sales trend

The trend of Geratherm Medical sales was positive for the first nine months, with the exception of the South American and German markets. In Europe and the US we identified significant demand for clinical thermometers, as in previous quarters, while new product approvals enabled above-average sales growth in the Middle East. At 30.09.2013, sales in South America had declined by −3.8%. This was caused by weaker market demand and the devaluation of the national currency. Market demand in Germany remained constant.

Turnover based on region 1.01. - 30.09.2013

Distribution of sales by sector remained relatively constant. The key sales drivers, with a 78.3% share (p.y. 83.2%), are products in the Healthcare Diagnostics division. Sales of environmentally friendly gallium thermometers experienced a market boost,

increasing by +10.7% in the first nine months. In core business, sales of clinical thermometers generally fared better than sales of blood pressure monitors. The sales drivers of the last three quarters were the new business divisions, which saw significant double-digit growth rates.

The Respiratory sector, in which we offer products measuring lung function, developed dynamically with sales growth of +41.9%. We are pleased not only to have acquired numerous new customers but also to have equipped the cardiology departments of UNI Lausanne (Switzerland) and the clinic in Pisa (Italy) with Geratherm spirometry systems. A complete system for pneumologic functional diagnostics was installed in the teaching hospital in Zwolle (the Netherlands) and integrated into the hospital's information system.

The Warming Systems sector also saw good growth rates, with an increase of +42.6%. In the third quarter, we were still heavily involved in the approval process for the "Third Edition", a new EU Approval Directive. The Warming Systems product group comes under group 2b in the classification of medicinal products. Approval criteria for medicinal products are becoming stricter, which is a considerable burden. On a more positive note, we were able to fully equip the Florence Nightingale private clinic group (Turkey) with Geratherm warming systems in the third quarter.

Much like the other new sectors, the Cardio/Stroke division saw positive growth, with an increase of 55.0%. Overall, we were able to forge connections with eight clinics in the third quarter, including leading clinics such as TU München's Klinikum rechts der Isar, Oldenburg district clinic (one of the largest stroke units in Lower Saxony) and the Aarau cantonal hospital (Switzerland's first stroke centre).

The number of linked stroke centres increased to 37 (p.y. 22). We are adhering to our goal of having at least 50 clinics linked by the end of the year. We will reach the break-even point for the Cardio/Stroke sector in the fourth quarter 2013.

Turnover by sector 1.01.- 30.09.2013

Profit situation

In the first nine months, operative earning quality improved in comparison with the previous year. We are, however, yet to reach our target of a minimum EBIT margin of 10%. In core business, at the Geschwenda site, we have returned to our target margin and we have raised operative EBIT returns from 3.5% to 10.5%, excluding the Warming Systems division. This division does, however, represent 78.3% of company sales.

Operating results incurred a loss of −50 TEUR in the first nine months as the result of increased approval costs affecting the Warming Systems division. The Respiratory sector significantly increased its EBIT returns, from 3.8% to 6.5%. Geratherm do Brasil saw weaker earnings, contributing operative EBIT returns of only 8 TEUR (p. y. 153 TEUR) as a result of currency factors and weaker sales growth. The Cardio/Stroke division reduced its losses, but nevertheless decreased consolidated EBIT earnings by −122 TEUR in the first nine months (p.y. −190 TEUR). Consolidated gross profit increased by 4.6% in the first nine months. The gross margin remained on a par with the previous year, at a level of 53.2%. Personnel costs dropped by −8.1%.

Because of the investments made at the Geschwenda/Thuringia site in the past three years, the depreciation volume rose by 8.4% to 613 TEUR (p.y. 566 TEUR). Gross income (EBITDA) doubled in the first nine months of the current business year to 1,376 TEUR (p.y. 701 TEUR).

Operating results (EBIT) rose significantly in the first nine months of the current business year to 763 TEUR (p.y. 135 TEUR).

In the first nine months, a positive net financial result of 89 TEUR was recorded. The net financial result of the previous year (466 TEUR) benefited from significantly higher security sales and dividend income, at levels we were not able to achieve in the first nine months of the current year.

In the first nine months of the current business year, Geratherm achieved an overall result of 852 TEUR for normal business activity (+41.7%), minus taxes on corporate income and business profits of 203 TEUR (p.y. 95 TEUR). However, the effective taxes only amounted to 47 TEUR, with the remaining 156 TEUR expended on reducing the non-cash effective deferred tax assets via losses carried forward.

The consolidated net income for the first nine months totalled 649 TEUR (p.y. 506 TEUR), marking growth of 28.3%.

After taking minority interest results into account, the end result for parent company shareholders for the first nine months was 624 TEUR (p.y. 615 TEUR). The results per share for the first nine months totalled 13 cents (p.y. 12 cents).

Net asset position and financial status

Geratherm Medical is in good financial shape and its net asset position is positive. The balance sheet total was 27.9 m EUR (p.y. 27.4 m EUR), most of which comprised equity capital amounting to 19.2 m EUR (p.y. 18.6 m EUR). The accounted balance sheet total included 14.2 m EUR liquid assets and securities.

The company equity ratio amounted to 69.0% of the balance sheet total, while the return on investment for the first nine months of the current business year totalled 4.3% (p.y. 4.6%).

The non-current assets amounted to 5.3 m EUR, while intangible assets rose slightly to 684 TEUR (+28.6%), which was attributable to development costs, product approvals and invoicing of clinical studies. The property and plant assets declined by 8.2% to 3.5 m EUR, while the item of deferred taxes fell by 12.7% to 1.1 m EUR via losses carried forward.

Inventories of gallium thermometers were further reduced in the third quarter, reducing stock assets to 4.6 m EUR (p.y. 5.5 m EUR), while receivables and other assets remained constant at 3.8 m EUR. At 30 September, securities amounting to 4.9 m EUR were identified (+31.3%). The increase in security items is mainly the result of a higher market valuation. The income and expenses recognised directly in equity amounted to 954 TEUR (p.y. 153 TEUR). The means of payment amounted to 9.3 m EUR (p.y. 8.8 m EUR).

The gross cash flow for the first nine months totalled 1,093 TEUR (p.y. 607 TEUR), while the cash flow from operating activities rose to 1,856 TEUR (p.y. 667 TEUR). The cash flow from investment amounted to −168 TEUR (p.y. +39 TEUR).

Research and development

The main focus of research and development activities has not changed since the semi-annual report. In the third quarter, various approvals were in their final phase. In the fourth quarter, we are expecting the "Third Edition" for warming-system products to come into force and various approvals relating to in-vitro diagnostics to be granted.

Geratherm is currently in a state of transition. The overall Geratherm strategy involves using highly innovative products, on which complex approval hurdles are imposed, to establish unique future selling points and thus position the company with clear product advantages compared with the competition.

Employees

As at 30 September 2013 the Geratherm group employed a total of 115 employees (p.y. 123), 86 of whom were domestic employees.

Outlook

As things currently stand, we expect continued sales growth and a higher operative income for the fourth quarter. The reduction in inventories of gallium thermometers reached its lowest point in October and as of November this year we are increasing production capacity by 20%. Demand for gallium thermometers is currently positive and this is set to continue until well into 2014. A positive development in the medium term is the international agreement on reducing global mercury emissions that was signed by the United Nations in Minamata, Japan, on 10 October 2013.

Financial income is set to grow in the fourth quarter. We are expecting to realise additional financial income of roughly 500 TEUR. As things currently stand, we are expecting to see better results in terms of sales and income for the business year 2013 than for the previous year.

Geschwenda, November 2013

Dr. Gert Frank Thomas Robst Executive Chairman Head of Sales

Statement of comprehensive income for the period January 1, 2013 to September 30, 2013

	July- Sept. 2013 EUR	July- Sept. 2012 EUR	Change	Jan.-Sept. 2013 EUR	Jan.-Sept. 2012 EUR	Change
Sales revenue	4,219,268	3,833,950	10.1%	12,917,640	11,693,810	10.5%
Change in stocks of finished and unfinished goods	-127,232	-344,085	-63.0%	-655,798	-16,906	>100.0%
Other own work capitalized	5,656	0	-	27,437	0	-
Other operating income	142,030	109,169	30.1%	297,252	288,814	2.9%
	4,239,722	3,599,034	17.8%	12,586,531	11,965,718	5.2%
Material costs
Costs for consumables, supplies and goods and for specific products	-1,865,277	-1,551,701	20.2%	-5,359,949	-5,152,991	4.0%
Costs of purchased services	-118,546	-70,725	67.6%	-350,667	-237,708	47.5%
	-1,983,823	-1,622,426	22.3%	-5,710,616	-5,390,699	5.9%
Gross profit	2,255,899	1,976,608	14.1%	6,875,915	6,575,019	4.6%
Personnel expenses
Wages and salaries	-673,751	-694,431	-3.0%	-2,001,575	-2,150,512	-6.9%
Social contributions and expenditures for pensions	-155,486	-149,468	4.0%	-462,320	-531,492	-13.0%
	-829,237	-843,899	-1.7%	-2,463,895	-2,682,004	-8.1%
Depreciation of intangible assets and tangible fixed assets	-205,847	-193,409	6.4%	-613,053	-565,798	8.4%
Other operating expenditure	-1,060,058	-976,594	8.5%	-3,036,104	-3,191,771	-4.9%
	160,757	-37,294	-	762,863	135,446	>100.0%
Operating results
Income from dividends	0	0	-	54,145	121,626	-55.5%
Income from sale of securities	52,614	120,947	-56.5%	347,858	411,502	-15.5%
Depreciation of securities Expenses from securities	0 -54,466	-11,972 -2,226	- >100.0%	0 -156,926	-11,972 -28,032	- >100.0%
Other interest and related income	4,884	3,695	32.2%	16,384	19,981	-18.0%
Interests and similar expenses	-55,962	-14,164	>100.0%	-172,196	-47,088	>100.0%
Financial result	-52,930	96,280	-	89,265	466,017	-80.8%
Result of normal business activity	107,827	58,986	82.8%	852,128	601,463	41.7%
Taxes on income and profit	-45,126	2,887	-	-202,797	-95,212	>100.0%
Group net profit for the period	62,701	61,873	1.3%	649,331	506,251	28.3%
Result of non-controlling shareholders for the period	27,506	-99,509	-	25,555	-108,560	-
Net earnings of the parent company`s shareholders in the period concerned	35,195	161,382	-78.2%	623,776	614,811	1.5%
Gross result for first quarter of year (EBITDA)	366,604	156,115	>100.0%	1,375,916	701,244	96.2%

Statement of financial position as at the end of the period by September 30, 2013

Assets	30. September 2013 EUR	31. December 2012 EUR	Change
A. Long-term assets
I. Intangible assets
1. Development costs	182,684	254,051	-28.1%
2. Other intangible assets	425,533	202,041	>100.0%
3. Goodwill	75,750	75,750	0.0%
	683,967	531,842	28.6%
II. Tangible assets
1. Land and buildings	1,168,913	1,217,897	-4.0%
2. Plant and machinery	2,059,465	2,033,047	1.3%
3. Other plants, operating and office equipment	174,671	208,557	-16.2%
4. Assets under construction	50,235	302,799	-83.4%
	3,453,284	3,762,300	-8.2%
III. Other assets	50,003	50,004	-
IV. Deferred taxes	1,074,281	1,230,609	-12.7%
	5,261,535	5,574,755	-5.6%
B. Current assets
I. Inventories
1. Raw, auxiliary and operating materials	941,666	1,236,130	-23.8%
2. Unfinished products	1,229,156	1,497,963	-17.9%
3. Finished products and goods	2,449,938	2,725,996	-10.1%
	4,620,760	5,460,089	-15.4%
II. Receivables and other assets
1. Trade accounts receivable 2. Tax claims	3,256,810 326,666	3,205,877 232,540	1.6% 40.5%
3. Other assets	239,091	383,334	-37.6%
	3,822,567	3,821,751	0.0%
III. Securities	4,882,620	3,718,382	31.3%
IV. Means of payment	9,281,608 22,607,555	8,809,871 21,810,093	5.4% 3.7%
	27,869,090	27,384,848	1.8%
Equity and Liabilities
A. Equity
I. Subscribed capital II. Capital reserves	4,949,999 10,711,677	4,949,999 10,711,677	0.0% 0.0%
III. Other reserves	3,981,311	3,372,389	18.1%
Attributable to parent company shareholders	19,642,987	19,034,065	3.2%
Non-controlling shareholders	-417,836	-412,790	1.2%
	19,225,151	18,621,275	3.2%
B. Non-current liabilities
1. Liabilities to banks	3,016,300	3,700,000	-18.5%
2. Accrued investment subsidies	712,819	794,830	-10.3%
3. Other long-term liabilities	596,079	596,079	0.0%
	4,325,198	5,090,909	-15.0%
C. Current liabilities
1. Amounts owed to credit institutions	2,130,815	1,663,869	28.1%
2. Advances received	14,608	72,739	-79.9%
3. Trade accounts payable	1,297,158	1,171,275	10.7%
4. Tax liabilities	106,973	108,993	-1.9%
5. Other current liabilities	769,187	655,788	17.3%
	4,318,741	3,672,664	17.6%
	27,869,090	27,384,848	1.8%

Statement of cash flow for the period January 1, 2013 to September 30, 2013

	January – Sept. 2013	January – Sept. 2012
	TEUR	TEUR
Group net profit for the period	649	506
Other non-cash expenses	-43	-8
Dividend income	-54	-122
Interest income	-16	-20
Interest paid	172	47
Decrease in deferred taxes	156	81
Expenditure from income taxes	46	14
Depreciation of fixed assets	613	566
Income from the sale of securities	-348	-411
Losses from securities trading	0	0
Depreciation of securities	0	12
Amortisation of allowances and subsidies	-82	-63
Loss on disposal of fixed assets	0	5
Gross cash flow	1,093	607
Decrease/increase in inventories	839	179
Increase in trade receivables and other assets	-110	-274
Increase in current and other liabilities	178	131
Cash from dividends	54	122
Inflow from interest	16	20
Outflow from interest	-172	-47
Outflow of taxes on income and earnings	-42	-71
Cash flow from operations	1,856	667
Outflow for investment in fixed assets	-456	-521
Inflow from funds for investments	107	0
Payments from financial investments	1,589	1,453
Cash for financial investment	-1,408	-893
Cash flow from investments	-168	39
Cash inflow from non-controlling shareholders	0	71
Distribution of profits to non-controlling shareholders	-10	0
Dividend distribution	-990	-1,485
Proceeds from the repayment of loans	0	0
Outflows for the repayment of loans	-216	-134
Decrease/increase in fixed liabilities	0	-313
Cash flow from financing activities	-1,216	-1,861
Change in cash and cash equivalents	472	-1,155
Cash and cash equivalents at the start of the reporting period	8,810	4,224
Cash and cash equivalents at the end of the reporting	9,282	3,069
period

Statement of changes in equity for the period by September 30, 2013

				Other reserves
	Subscribed capital	Capital reserves	Market valuation reserve	Currency conversion reserves	Accumulat ed earnings	To be assigned to the shareholders of the parent company	Non-con trolling interests	Equity capital
	EUR	EUR	EUR	EUR	EUR	EUR	EUR	EUR
As of January 1, 2012	4,949,999	10,672,874	-92,385	27,232	3,500,315	19,058,035	-393,150	18,664,885
Increase in share capital apoplexy medical technologies GmbH	0	38,803	0	0	0	38,803	32,197	71,000
Dividend payment to shareholders	0	0	0	0	-1,484,999	-1,484,999	0	-1,484,999
Transaction with associates and shareholders	0	38,803	0	0	-1,484,999	-1,446,196	32,197	-1,413,999
Group period result	0	0	0	0	614,811	614,811	-108,560	506,251
Unrealised profits and losses from valuation of securities	0	0	161,049	0	0	161,049	0	161,049
Currency translation in group	0	0	0	-4,052	0	-4,052	-3,894	-7,946
Total consolidated income	0	0	161,049	-4,052	614,811	771,808	-112,454	659,354
As of Sept. 30, 2012	4,949,999	10,711,677	68,664	23,180	2,630,127	18,383,647	-473,407	17,910,240
As of January 1, 2013	4,949,999	10,711,677	144,916	17,968	3,209,505	19,034,065	-412,790	18,621,275
Dividend payment to shareholders	0	0	0	0	-990,000	-990,000	-9,591	-999,591
Transaction with associates and shareholders	0	0	0	0	-990,000	-990,000	-9,591	-999,591
Group period result	0	0	0	0	623,776	623,776	25,555	649,331
Unrealised profits and losses from valuation of securities	0	0	997,014	0	0	997,014	0	997,014
Currency translation in group	0	0	0	-21,868	0	-21,868	-21,010	-42,878
Total consolidated income	0	0	997,014	-21,868	623,776	1,598,922	4,545	1,603,467
As of Sept. 30, 2013	4,949,999	10,711,677	1,141,930	-3,900	2,843,281	19,642,987	-417,836	19,225,151

Consolidated Statement of Comprehensive Income (IFRS) for the period from January 1, 2013 to September 30, 2013

	01.01.-30.09.2013 EUR	01.01.-30.09.2012 EUR
Net earnings of the parent company`s shareholders in the period concerned	623,776	614,811
Profit of non-controlling shareholders	25,555	-108,560
Group net profit for the period	649,331	506,251
Profit and losses from the revaluation of securities	997,014	161,049
Difference resulting from currency translation	-42,878	-7,946
Income and expenses directly included in equity capital	954,136	153,103
Total consolidated income	1,603,467	659,354
Of which for non-controlling shareholders	4,545	-112,454
Of which for parent company shareholders	1,598,922	771,808

Segment Report for the period from January 1, 2013 to September 30, 2013

According to product segments 2013	Healthcare Diagnostic Jan.-Sept. TEUR	Med. Warming Systems Jan.-Sept. TEUR	Cardio/ Stroke Jan.-Sept. TEUR	Respiratory Jan.-Sept. TEUR	Consolidation Jan.-Sept. TEUR	Reconciliation Jan.-Sept. TEUR	Total Jan.-Sept. TEUR
Segment revenues	11,505	610	290	1,350	-832	-5	12,918
Operating results	1,172	-50	-65	188	-408	-74	763
of which:
Amortisation of intangible assets and depreciation of tangible assets	582	13	4	8	-58	64	613
Segment assets	10,909	729	163	937	0	14,057	26,795
Segment liabilities	8,239	245	68	92	0	0	8,644

According to product segments	Healthcare Diagnostic	Med. Warming Systems	Cardio/ Stroke	Respiratory	Consolidation	Reconciliation	Total
2012	Jan.-Sept. TEUR	Jan.-Sept. TEUR	Jan.-Sept. TEUR	Jan.-Sept. TEUR	Jan.-Sept. TEUR	Jan.-Sept. TEUR	Jan.-Sept. TEUR
Segment revenues	10,728	523	183	929	-669	0	11,694
Operating results	548	17	-135	-7	-223	-65	135
of which:
Amortisation of intangible assets and depreciation of tangible assets	560	18	3	7	-95	74	567
Segment assets	11,867	906	158	702	0	8,338	21,971
Segment liabilities	4,465	180	567	270	0	0	5,482

According to regions	Germany	Europe	USA	South America	Others	Total
2013	Jan.-Sept. TEUR	Jan.-Sept. TEUR	Jan.-Sept. TEUR	Jan.-Sept. TEUR	Jan.-Sept. TEUR	Jan.-Sept. TEUR
Sales revenue	1,831	5,243	947	3,813	1,916	13,750
Elimination of intercompany Sales	-349	0	0	-483	0	-832
Sales revenue to third parties	1,482	5,243	947	3,330	1,916	12,918
Gross profit or loss	778	2,712	490	1,903	990	6,873
Operating results	77	270	49	268	99	763
of which:
Amortisation/depreciation of intangible assets and tangible assets	93	323	58	21	118	613
Amortisation of public grants and subsidies	13	45	8	0	16	82
Acquisition costs of fixed assets for the period	448	0	0	8	0	456
Segment assets	24.261	0	0	2,534	0	26,795

According to regions	Germany	Europe	USA	South America	Others	Total
2012	Jan.-Sept. TEUR	Jan.-Sept. TEUR	Jan.-Sept. TEUR	Jan.-Sept. TEUR	Jan.-Sept. TEUR	Jan.-Sept. TEUR
Sales revenue	1,921	4,453	768	3,707	1,514	12,363
Elimination of intercompany Sales	-425	0	0	-244	0	-669
Sales revenue to third parties	1,496	4,453	768	3,463	1,514	11,694
Gross profit or loss	841	2,503	432	1,948	851	6,575
Operating results	34	102	17	-53	35	135
of which:
Amortisation/depreciation of intangible assets and tangible assets	98	292	50	27	99	566
Amortisation of public grants and subsidies	11	34	6	0	12	63
Acquisition costs of fixed assets for the period	495	0	0	26	0	521
Segment assets	19,631	0	0	2,340	0	21,971

Notes on consolidated interim financial statement for the period from 1 January 2013 to 30 September 2013

Accounting and assessment principles

The consolidated interim financial statement of Geratherm Medical AG as of 30 September 2013 was drawn up in accordance with the International Financial Reporting Standards (IFRS) and the interpretations of the International Financial Reporting Interpretations Committee (IFRIC) valid as of the balance sheet date, as mandated in the European Union.

The accounting and consolidation procedures were retained, as shown in the annex to the consolidated financial statement 2012.

The assessment of assets and liabilities is based partly on estimates or assumptions about future developments. The assessment of the intrinsic value of the deferred tax accrual on the carrying-over of accumulated losses and the capitalised development costs is based on the company's planning, which is inevitably subject to uncertainties. Accordingly, the actual values may in some cases diverge from the assumptions and estimates. Estimates and the assumptions on which they are based are revised regularly and their possible effects on accounting are assessed.

Consolidated companies

As of 30 September 2013 no changes were recorded in the consolidated companies:

	Ownership interest	Ownership interest
Company	30.09.2013	31.12.2012
GME Rechte und Beteiligungen GmbH, Geschwenda / Germany	100.00%	100.00%
apoplex medical technologies GmbH, Pirmasens / Germany	59.11%	59.11%
Geratherm Respiratory GmbH, Bad Kissingen / Germany	61.27%	61.27%
Geratherm Medical do Brasil Ltda., Sao Paulo / Brazil	51.00%	51.00%

Equity capital

The change in equity capital was shown in the group statement of changes in equity.

The subscribed capital of Geratherm Medical AG as of 30.09.2013 amounted to a total 4,949,999 EUR (p.y. 4,949,999 EUR), divided into 4,949,999 (p.y. 4,949,999) non-par bearer shares. The subscribed capital is paid in full. As of the balance sheet date, no shares were held by the company.

COMPANY CALENDAR 2013

Investor/analyst conference in Hamburg 21 November

COMPANY CALENDAR 2014

Publication of Annual Report 2013	24 April
Annual General Meeting in Ilmenau, "Hotel Tanne"	27 May
3-Month Report 2014	22 May
6-Month Report 2014	21 August
9-Month Report 2014	20 November

Geratherm Medical AG Fahrenheitstraße 1 98716 Geschwenda Telefon: +49 36205 980 Fax: +49 36205/98 115 info@geratherm.com www. geratherm.com