FACC AG

Quarterly Report • Nov 10, 2021

FACC AG Finanzbericht 1.Halbjahr 2018/19

1

Q3 2021 - Highlights

2

• Q3 better than expected despite seasonally weak summer months: third positive quarterly operating result in a row
• Construction rates of the most important FACC platform (A320 family) are developing as positively as announced by Airbus
• New order won: Empennage components for Airbus A220
• FACC consistently implements efficiency measures and further reduces net debt in Q3
• The successful implementation of a new factoring program generated additional liquidity in Q3 and further optimized working capital
• Market development positive: Opening of the United States of America on 8 November as an important impulse
• Outlook for the end of the year 2021 adjusted: around EUR 500 million revenues, around EUR 30 million negative one-off effects and slightly positive operating EBIT expected

Selected Group Key Performance Indicators

Revenues 101.5 118.1 398.5 thereof Aerostructures 32.6 36.0 135.5 thereof Engines & Nacelles 17.4 24.8 90.4 thereof Interiors 51.5 57.3 172.6 Earnings before interest, taxes, depreciation and amortisation (EBITDA) 2) –10.8 7.6 3.3 Earnings before interest and taxes (EBIT) –18.6 0.1 –53.0 thereof Aerostructures –6.6 0.2 –20.9 thereof Engines & Nacelles –6.6 0.1 –14.9 thereof Interiors –5.3 –0.2 –17.2 EBIT margin –18.3% 0.1% –13.3% 0.8% Earnings after taxes –20.7 –2.0 –60.3 Earnings per share (in EUR) –0.45 –0.04 –1.32 30.09.2020 31.12.2020 30.09.2021 in EUR mill. in EUR mill. in EUR mill. Cash flow from operating activities 12.7 25.8 Cash flow from investing activities –22.9 –28.3 –19.1 30.09.2020 31.12.2020 30.09.2021 in EUR mill. in EUR mill. in EUR mill. Net Working Capital 167.8 146.4 Net financial debt 236.3 232.1 Equity ratio 38.6% 37,4% 37.7% Balance sheet total 666.9 649.5 Headcount (at the balance sheet date) - FTE 3,296 2,655 2,461 01.07.2020 - 01.07.2021 - 01.01.2020 - 01.01.2021 - 30.09.2020 30.09.2021 30.09.2020 30.09.2021 in EUR mill. in EUR mill. in EUR mill. in EUR mill. Trading volume 4,001,954 5,323,606 24,871,232 20,735,246 Average daily trading volume 60,636 80,661 130,216 108,561 Yearly high 6.49 10.5 12.93 12.0 Yearly low 4.84 7.9 4.84 7.9 Closing price 5.09 9.42 5.09 9.42 Performance of period –21.57% –0.63% –56.86% 9.28% Market capitalization 233.1 431.3 233.1 431.3	01.07.2020 - 30.09.20201) in EUR mill.	01.07.2021 - 30.09.2021 in EUR mill.	01.01.2020 - 30.09.20201) in EUR mill.	01.01.2021 - 30.09.2021 in EUR mill.
				358.3
				120.5
				76.4
				161.3
				28.2
				2.9
				1.2
				4.2
				–2.4
				1.1
				0.02
				48.1
				128.3
				213.4
				621.3

1) Due to an error correction in accordance with IAS 8, the previous year's figures were adjusted retrospectively (see Note 3 – Correction of errors, Annual Report 2020). 2) The EBITDA is calculated as the sum of the EBIT plus depreciation and impairment as well as amortization and impairment of the contract performance costs.

Revenues and earnings development

	Q3 20201) in EUR mill.	Q3 2021 in EUR mill.	Change	9m 20201) in EUR mill.	9m 2021 in EUR mill.	Change
Revenues	101.5	118.1	16.3%	398.5	358.3	–10.1%
Earnings before interest and taxes (EBIT)	–18.6	0.1	-	–53.0	2.9	-
EBIT margin	–18.3%	0.1%	-	–13.3%	0.8%	-
Assets	666.9	621.3	–6.8%	666.9	621.3	–6.8%
Investments of the period	7.4	7.3	–1.3%	22.9	19.1	–16.5%

1) Due to an error correction in accordance with IAS 8, the previous year's figures were adjusted retrospectively (see Note 3 – Correction of errors, Annual Report 2020).

The third quarter of the 2021 financial year (1 July - 30 September) developed positively compared to the previous year. Compared to Q2 2021, revenue and EBIT declined slightly which was based on seasonal factors - the weaker summer months had been considered in the planning.

Revenues in the first nine months of 2021 amount to EUR 358.3 million (comparative period 2020: EUR 398.5 million). Regarding the previous year's revenues for the first nine months 2020, the revenues from the first quarter of 2020 have to be considered particularly. These amounted to EUR 195.4 million and are only suitable as a reference value to a limited extent, as Q1 2020 was not affected by the Covid-19-pandemic. Revenues in the summer months of July and August 2021 were seasonally lower as expected.

The gross profit margin for the first nine months of 2021 is 7.5% (comparative period 2020: 6.2%).

Reported earnings before interest and taxes (EBIT) for the first nine months of 2021 stood at EUR 2.9 million (comparative period 2020: EUR -53.0 million). EBIT in the first nine months of 2020 includes one-time effects resulting from impairments, changes in estimates in connection with the COVID-19 crisis and the associated effects on the medium-term market environment amounting to EUR 37.4 million as well as social plan costs in the amount of EUR 11.1 million.

It was especially pleasing that despite the seasonally weaker summer months, the third positive quarterly operating EBIT in a row was achieved in Q3 2021.

The measures implemented by FACC to reduce costs and increase efficiency are taking effect and laying the important foundation for a sustainable improvement in performance with a stronger increase in revenues in the future.

SEGMENT REPORTING

The recovery of the divisions is progressing according to plan and is in line with the plans and expectations of the Executive Board.

The new plant in Croatia will start production at the end of 2021 and is expected to generate significant earnings improvements in the Cabin Interiors Division from 2022 onwards.

Aerostructures

	Q3 20201) in EUR mill.	Q3 2021 in EUR mill.	Change	9m 20201) in EUR mill.	9m 2021 in EUR mill.	Change
Revenues	32.6	36.0	10.4%	135.5	120.5	–11.1%
Earnings before interest and taxes (EBIT)	–6.6	0.2	-	–20.9	1.2	-
EBIT margin	–20.3%	0.5%	-	–15.4%	1.0%	-
Assets	274.8	254.3	–7.5%	274.8	254.3	–7.5%
Investments of the period	1.6	3.5	120.7%	5.7	8.3	46.2%

1) Due to an error correction in accordance with IAS 8, the previous year's figures were adjusted retrospectively (see Note 3 – Correction of errors, Annual Report 2020).

Revenues in the Aerostructures segment in the first nine months of 2021 amounted to EUR 120.5 million (comparative period 2020: EUR 135.5 million).

Earnings before interest and taxes (EBIT) in the first nine months of 2021 amounted to EUR 1.2 million (comparative period 2020: EUR -20.9 million).

Engines & Nacelles

	Q3 20201) in EUR mill.	Q3 2021 in EUR mill.	Change	9m 20201) in EUR mill.	9m 2021 in EUR mill.	Change
Revenues	17.4	24.8	42.5%	90.4	76.4	–15.4%
Earnings before interest and taxes (EBIT)	–6.6	0.1	-	–14.9	4.2	-
EBIT margin	–38.2%	0.4%	-	–16.5%	5.5%	-
Assets	127.1	119.4	–6.1%	127.1	119.4	–6.1%
Investments of the period	0.9	0.1	–84.9%	3.9	0.7	–83.1%

1) Due to an error correction in accordance with IAS 8, the previous year's figures were adjusted retrospectively (see Note 3 – Correction of errors, Annual Report 2020).

Revenues in the Engines & Nacelles segment in the first nine months of 2021 amounted to EUR 76.4 million (comparative period 2020: EUR 90.4 million).

Earnings before interest and taxes (EBIT) in the Engines & Nacelles segment in the first nine months of 2021 amounted to EUR 4.2 million (comparative period 2020: EUR -14.9 million).

Cabin Interiors

	Q3 20201) in EUR mill.	Q3 2021 in EUR mill.	Change	9m 20201) in EUR mill.	9m 2021 in EUR mill.	Change
Revenues	51.5	57.3	11.3%	172.6	161.3	–6.5%
Earnings before interest and taxes (EBIT)	–5.3	–0.2	96.0%	–17.2	–2.4	85.8%
EBIT margin	–10.3%	–0.4%	96.4%	–10.0%	–1.5%	84.8%
Assets	265.0	247.6	–6.6%	265.0	247.6	–6.6%
Investments of the period	4.9	3.7	–25.3%	13.4	10.2	–23.8%

1) Due to an error correction in accordance with IAS 8, the previous year's figures were adjusted retrospectively (see Note 3 – Correction of errors, Annual Report 2020).

Revenues in the Cabin Interiors segment in the first nine months of 2021 amounted to EUR 161.3 million (comparative period 2020: EUR 172.6 million).

Earnings before interest and taxes (EBIT) in the Cabin Interiors segment in the first nine months of 2021 amounted to EUR -2.4 million (comparative period 2020: EUR -17.2 million).

Financial Position

Inventories at the end of the reporting period stood at EUR 93.2 million (31 December 2020: EUR 105.6 million). The activities to reduce inventories are being implemented continuously and are proceeding according to plan.

Trade receivables decreased from EUR 68.0 million to EUR 62.0 million since the last reporting in the half-year 2021. Trade payables have increased from EUR 46.9 million to EUR 51.3 million since the half-year reporting.

Investments in the first nine months of 2021 amounted to EUR 19.1 million (comparative period 2020: EUR 22.9 million) and include, contrary to previous reportings, investments in contract costs of EUR 9.7 million (comparative period 2020: EUR 10.4 million).

In August 2018, FACC Operations GmbH subscribed to a syndicated loan in the amount of EUR 225 million with seven participating banks. FACC AG serves as a guarantor. The loan volume was increased by a further EUR 60 million as of 30 June 2020 (COVID-19 framework credit for large enterprises (KRR) of the Austrian Kontrollbank). All syndicate banks participated according to their quotas.

A net financial debt/EBITDA ratio of less than 3.5 was defined as

a financial covenant in August 2018. Due to the proven impact of changed accounting standards (IFRS 15, IFRS 16), the limit was increased from 3.5 to 4.0 in agreement with the syndicate banks with effect from 31 August 2019. The ratio is checked every six months (31 December and 30 June). In the event that the ratio is exceeded, the creditors are able to exercise their right of termination. Due to the Covid-19-pandemic, FACC reached an agreement with the lenders in the amendment agreement of December 21, 2020 to suspend the ratio for the test dates December 31, 2020 and June 30, 2021. The next test of the ratio will now take place on December 31, 2021. FACC must achieve a net financial debt/EBITDA ratio of less than or equal to 5.25.

As a result of the strict efficiency enhancement measures and various cash flow optimization programs (e.g. new factoring program), net debt was significantly reduced to EUR 213.4 million in Q3 2021.

As of the reporting date 30 September 2021, the FACC Group had unused committed credit facilities of EUR 150 million at its discretion.

The company's share capital amounts to EUR 45.8 million and is fully paid in. It is divided into 45,790,000 individual shares with a value of EUR 1 each.

Outlook

Operationally, the financial year to date has been in line with the plans of FACC's management. Thus, FACC does not expect any significant deviations from the planned revenues and operating results in the fourth quarter. In this respect, the expectations for the end of the year for consolidated annual revenues remain unchanged at around EUR 500 million. However, due to a number of court decisions, FACC will have to record negative one-off effects of approximately EUR 30 million in the fourth quarter. At the same time, a further slightly positive operating EBIT in the single-digit million range is expected from operating activities.

In the fourth quarter, FACC will focus increasingly on the following measures:

• Construction work on the new plant in Croatia is almost completed. Despite the current difficult cost environment in the construction industry, it was possible to keep the planned investment costs. Commissioning of production is planned for December 2021 with a subsequent ramp-up of production in Q1 2022.
• The defined measures for the vertical integration of strategic components and materials are still proceeding according to plan and are being driven forward with full intensity. The first projects have already been successfully transferred back out of the supply chain.
• The reduction of raw material inventory to free up blocked liquidity will continue in the fourth quarter. FACC's management continues to expect a significant cash contribution from this program in the fourth quarter.
• Following the successful implementation of a new factoring program with a financial partner from the core banking group, FACC's treasury is now working on the realisation of a reverse factoring program. This is intended to support the supply chain and further optimise FACC's working capital. The framework agreement is expected to be concluded in Q4 2021.
• As a result of the expected negative one-off effects on reported EBIT of around EUR 30 million mentioned before, and in order to secure the existing credit lines in the best possible way, FACC is currently negotiating with the core banks on a further adjustment of the financial covenant (net financial debt/EBITDA) in the existing syndicated loan.

For the next financial year 2022, the FACC management expects a slight revenue growth in the range of 5% based on the planned customer demands known today. The planned EBIT is expected to increase with sales growth and to be in the lower double-digit million EUR range. FACC continues to assume that pre-crisis revenues will be reached in 2024 – at the latest in 2025.

Consolidated Profit and Loss Statement

for the period from 1 January 2021 to 30 September 2021

	01.07.2020 – 30.09.2020 restated1) EUR'000	01.07.2021 – 30.09.2021 EUR'000	01.01.2020 – 30.09.2020 restated1) EUR'000	01.01.2021 – 30.09.2021 EUR'000
Revenues	101,482	118,067	398,500	358,255
COGS - Cost of goods sold	–96,167	–110,943	–373,918	–331,360
Gross profit	5,315	7,124	24,582	26,894
Research and developement expenses	–195	–278	–554	–1,157
Selling expenses	–965	–1,743	–5,368	–4,736
Administration expenses	–12,526	–7,849	–32,142	–25,099
Other operating income	1,048	2,976	4,449	7,543
Other operating expenses	–11,251	–150	–43,968	–510
Earnings before interest and taxes (EBIT)	–18,573	80	–53,001	2,934
Financing expenses	–1,786	–2,011	–7,241	–5,228
Other financial result	495	268	1,344	1,127
Financial result	–1,292	–1,744	–5,897	–4,100
Earnings before taxes (EBT)	–19,865	–1,664	–58,898	–1,166
Income taxes	–800	–353	–1,367	2,304
Earnings after taxes	–20,665	–2,017	–60,264	1,137
of which attributable to non-controlling interests	–2	0	2	0
of which attributable to shareholders of the parent company	–20,663	–2,017	–60,267	1,137
Diluted (=undiluted) earnings per share (in EUR)	–0.45	–0.04	–1.32	0.02
Issued shares (in shares)	45,790,000	45,790,000	45,790,000	45,790,000

1) Due to an error correction in accordance with IAS 8, the previous year's figures were adjusted retrospectively (see Note 3 – Correction of errors, Annual Report 2020).

Consolidated Statement of Comprehensive Income

for the period from 1 January 2021 to 30 September 2021

	01.07.2020 – 30.09.2020 restated1) EUR'000	01.07.2021 – 30.09.2021 EUR'000	01.01.2020 – 30.09.2020 restated1) EUR'000	01.01.2021 – 30.09.2021 EUR'000
Earnings after taxes	–20,665	–2,017	–60,264	1,137
Currency translation differeneces from consolidation	–107	85	–244	277
Cash flow hedges	9,478	–3,499	9,577	–13,804
Tax effect	–2,369	875	–2,394	3,451
Items subsequently reclassified to profit and loss	7,001	–2,539	6,939	–10,077
Revaluation effects of termination benefits	–20	5	–59	16
Fair value measurement of securities (fair value through other comprehensive income)	7	2	–4	2
Tax effect	3	–2	16	–5
Items not subsequently reclassified to profit and loss	–9	6	–47	14
Other comprehensive income after taxes	6,991	–2,533	6,892	–10,063
Total comprehensive income	–13,673	–4,550	–53,372	–8,926
of which attributable to non-controlling interests	–2	0	2	0
of which attributable to shareholders of the parent company	–13,671	–4,550	–53,375	–8,926

1) Due to an error correction in accordance with IAS 8, the previous year's figures were adjusted retrospectively (see Note 3 – Correction of errors, Annual Report 2020).

Consolidated Statement of Financial Position

as of 30 September 2021

ASSETS
	As of 31.12.2020 EUR'000	As of 30.09.2021 EUR'000
Intangible assets	4,468	4,546
Property, plant and equipment	167,890	166,903
Receivables from customer-related engineering	32,968	29,767
Contract assets	3,021	5,179
Contract costs	95,887	97,491
Other financial assets	501	503
Receivables from related companies	5,416	5,740
Derivative financial instruments	2,109	0
Other receivables	9,405	9,769
Deferred taxes	5,187	10,945
Non-current assets	326,852	330,841
Inventories	105,571	93,207
Customer-related engineering	5,566	6,551
Trade receiveables	61,374	62,032
Receivables from related companies	18,610	18,791
Current tax income receivables	263	249
Derivative financial instruments	14,362	0
Other receivables and deferred items	24,376	43,970
Cash and cash equivalents	92,548	65,650
Current assets	322,670	290,451
Balance sheet total	649,522	621,292

9

EQUITY AND LIABILITIES

	As of 31.12.2020 EUR'000	As of 30.09.2021 EUR'000
Share capital	45,790	45,790
Capital reserve	221,459	221,459
Currency translation reserve	–954	–677
Other reserves	5,551	–4,789
Retained earnings	–28,757	–27,608
Equity attributable to shareholders of the parent company	243,089	234,175
Non-controlling interests	68	0
Equity	243,157	234,175
Promissory note loans	70,000	70,000
Lease liabilities	77,192	73,812
Other financial liabilities	13,209	11,532
Derivative financial instruments	0	975
Investment grants	9,125	9,070
Employee benefit obligations	9,658	10,238
Other liabilities	63	63
Deferred tax liabilities	384	406
Non-current liabilities	179,630	176,096
Lease liabilities	5,011	6,676
Other financial liabilities	159,219	117,017
Derivative financial instruments	0	3,594
Contract liabilities from customer-related engineering	6,026	6,839
Trade payables	26,956	51,259
Liabilities from related companies	8,479	6,850
Investment grants	858	858
Income tax liabilities	271	288
Other provisions	2,182	1,631
Other liabilities and deferred items	17,734	16,007
Current liabilities	226,735	211,020
Balance sheet total	649,522	621,292

Consolidated Statement of Changes in Equity

for the period from 1 January 2021 to 30 September 2021

	Attributable to shareholders of the parent company
	Share capital EUR'000	Capital reserve EUR'000	Currency translation reserve EUR'000
As of 1 January 2020	45,790	221,459	–621
Earnings after taxes	0	0	0
Other comprehensive income after taxes	0	0	–244
Total comprehensive income	0	0	–244
As of 30 September 2020	45,790	221,459	–865
As of 1 January 2021	45,790	221,459	–954
Derecognition of non-controlling interests	0	0	0
Earnings after taxes	0	0	0
Other comprehensive income after taxes	0	0	277
Total comprehensive income	0	0	277
As of 30 September 2021	45,790	221,459	–677

Attributable to shareholders of the parent company
		Other reserves
Securities - fair value through other com	Cash flow hedges	Reserves IAS 19	Retained earnings	Total	Non-controlling interests	Total equity
prehensive income EUR'000	EUR'000	EUR'000	EUR'000	EUR'000	EUR'000	EUR'000
9	–1,026	–3,401	48,332	310,543	49	310,591
0	0	0	–60,267	–60,267	2	–60,264
–3	7,183	–44	–98	6,794	0	6,794
–3	7,183	–44	–60,365	–53,473	2	–53,471
7	6,157	–3,445	–12,032	257,070	51	257,121
10	8,699	–3,159	–28,757	243,089	68	243,157
0	0	0	12	12	–68	–56
0	0	0	1,137	1,137	0	1,137
2	–10,353	12	0	–10,063	0	–10,063
2	–10,353	12	1,149	–8,914	–68	–8,981
12	–1,654	–3,146	–27,608	234,175	0	234,175

Consolidated Statement of Cash Flows

as of 30 September 2021

	01.01.2020 – 30.09.2020 restated1)	01.01.2021 – 30.09.2021
	EUR'000	EUR'000
Earnings before taxes (EBT)	–58,898	–1,166
Plus financial result	5,897	4,100
Earnings before interest and taxes (EBIT)	–53,001	2,934
Plus/minus
Depreciation, amortisation and impairment2)	44,359	17,213
Amortisation contract costs	9,081	8,074
Impairment contract costs	2,873	0
Impairment customer-related engineering	1,780	0
Income from the reversal of investment grants	–161	–238
Change in employee benefit obligations	754	596
Other non-cash expenses/income	1,896	–963
	7,581	27,616
Change in working capital
Change in inventory and customer-related engineering	–9,193	12,642
Change in trade receivables and other receivables, receivables from customer-related engineering and contract assets	27,664	–14,190
Change in trade payables and other liabilities	–22,460	22,525
Change in current provisions	9,134	–551
Cash flow from ongoing activities	12,726	48,042
Interest received	114	43
Income taxes paid	–167	–6
Cash flow from operating activities	12,673	48,080
Payments for the acquisition of non-current assets	–22,912	–19,134
Proceeds from the disposal of non-current assets	59	0
Cash flow from investing activities	–22,853	–19,134
Repayments of bonds	–90,000	0
Proceeds from interest-bearing liabilities	110,632	0
Repayments of interest-bearing liabilities	–15,686	–43,879
Outflows from leasing agreements	–5,992	–6,279
Interest paid	–7,437	–5,573
Cash flow from financing activities	–8,483	–55,730
Net changes in cash and cash equivalents	–18,662	–26,784
Cash and cash equivalents at the beginning of the period	75,790	92,548
Effects from foreign exchange rates	–127	–114
Cash and cash equivalents at the end of the period	57,000	65,650

1) Due to an error correction in accordance with IAS 8, the previous year's figures were adjusted retrospectively (see Note 3 – Correction of errors, Annual Report 2020). 2) As of 30.09.2020, this figure includes impairment of goodwill in the amount of kEUR 18,757 and of property, plant and equipment in the amount of kEUR 7,685.

Selected Notes

To the Consolidated Financial Statements for the 3 rd quarter 2021

NOTE

The condensed Consolidated Interim Financial Statement as of 30 September 2021 have been prepared in accordance with the rules and regulations of "Prime market - Section Interim Reports" of the Vienna Stock Exchange.

The reporting currency is Euro (EUR). All figures presented in the condensed Consolidated Interim Financial Statement are quoted in thousands of euros (EUR'000), unless otherwise stated.

Rounding errors may occur when adding rounded amounts and percentages due to the use of automated invoicing aids.

WAIVER OF AUDIT REVIEW

The present consolidated interim financial statement has neither been audited nor reviewed.

Ried im Innkreis, 10 November 2021

Robert Machtlinger m. p. Chairman of the Management Board

Andreas Ockel m. p. Member of the Management Board

Aleš Stárek m. p. Member of the Management Board

Yongsheng Wang m. p. Member of the Management Board

Investor Relations

BASIC INFORMATION ABOUT THE FACC SHARE

T_
International Securities Identification Number (ISIN)	AT00000FACC2
Currency	EUR
Stock market	Vienna (XETRA)
Market segment	Prime market (official trading)
Initial listing	25.06.2014
Issue price	9.5 EUR
Paying agent	ERSTE GROUP
Indices	ATX, ATX GP, ATX IGS, ATX Prime, WBI
Share class	Ordinary shares
Ticker symbol	FACC
Reuters symbol	FACC.VI
Bloombergs symbol	FACC AV
Shares outstanding	45,790,000 shares

SHAREHOLDER STRUCTURE AND SHARE CAPITAL

FACC AG's share capital amounts to EUR 45,790,000 and is divided into 45,790,000 no-par value shares. The Aviation Industry Corporation of China holds 55.5% of voting rights of FACC AG via AVIC Cabin System Co., Ltd (previously FACC International).

The remaining 44.5% of shares represent free float and are held by both international and Austrian investors.

FACC AG did not hold any treasury shares at the end of the reporting period.

CONTACT

Florian Heindl Vice President Treasury / Investor Relations / Enterprise Risk Management Phone +43 59 616 1232 Mobile +43 59 616 71232 f.heindl@facc.com