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Softing AG
Interim / Quarterly Report • Aug 14, 2024
405_10-q_2024-08-14_df9ed4b0-ef1d-44bc-97a1-9c8936f9a0c6.pdf
Interim / Quarterly Report
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Half-Year Interim Report 2024
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Consolidated Key Figures
| Q2 2024 | Q2 2023 | Half-yearly report 2024 | Half-yearly report 2023 | ||
|---|---|---|---|---|---|
| Incoming orders | (EUR million) | 15.4 | 19.4 | 31.9 | 44.4 |
| Orders on hand | (EUR million) | 30.9 | 61.5 | ||
| Revenue | (EUR million) | 23.1 | 29.6 | 47.3 | 58.1 |
| EBITDA (IFRS) | (EUR million) | 1.3 | 3.2 | 3.9 | 7.2 |
| EBIT (IFRS) | (EUR million) | $-0.9$ | 1.1 | $-0.4$ | 3.1 |
| EBIT (operating) | (EUR million) | $-0.3$ | 1.4 | $-0.3$ | 3.9 |
| Consolidated profit (IFRS) | (EUR million) | $-1.6$ | 0.5 | $-1.4$ | 1.7 |
| Earnings per share (IFRS) | (EUR) | $-0.17$ | 0.05 | $-0.15$ | 0.19 |
| Non-current assets | (EUR million) | 60.0 | 63.5 | ||
| Current assets | (EUR million) | 49.6 | 46.5 | ||
| Equity | (EUR million) | 53.0 | 62.0 | ||
| Equity ratio | $48.4 \%$ | $56.4 \%$ | |||
| Cash and cash equivalents | (EUR million) | 6.3 | 9.1 | ||
| Number of employees (as of June 30) | 443 | 408 |
Table of Contents
Letter from the CEO ..... 02
Softing Shares ..... 04
Interim Group Management Report ..... 06
Responsibility Statement ..... 11
Consolidated Income Statement ..... 12
Consolidated Statement
of Comprehensive Income ..... 13
Consolidated Statement of Financial Position ..... 14
Consolidated Statement of Changes in Equity ..... 16
Consolidated Statement of Cash Flows ..... 17
Consolidated Segment Reporting ..... 18
Letter from the CEO
DEAR SHAREHOLDERS, EMPLOYEES, PARTNERS AND FRIENDS OF SOFTING AG,
The economic environment is not making life easy for us right now. Demand from industrial consumers is largely stagnating. Warehouses along the entire supply chain are still full to bursting after a boom year in 2023, while customers are extremely reluctant to make new investments. Although this is impacting us, the macroeconomic reality is that virtually every player in the market is experiencing the same challenges. While automation and digitalization remain important growth topics, uncertainty reigns in the short term due to a lack of momentum or even a negative impact from lawmakers. Former German minister of Economics Ludwig Erhard knew long ago that " $50 \%$ of economics is psychology", yet it is currently hard to find a positive overall outlook in any area of the economy.
While this applies to industrial automation, Softing's most important submarket, the automotive sector is also suffering. The industry is trapped between the broad rejection of fully electric vehicles by consumers, the discontinuation of incentive programs by legislators and a geopolitically motivated glut of Chinese electric vehicles at dumping prices, with the environmental and industrial policy mistake of committing to full electric mobility now taking its toll.
This is evident in Softing's half-year revenue figure of EUR 47.3 million, which is down almost 19\% on the record year of 2023. Although revenue is still almost $4 \%$ up on the 2022 figure of EUR 45.6 million, this represents stagnation if we view 2023's record results as an exceptional event.
Looking at our incoming orders of EUR 31.9 million, which declined by $28 \%$ from EUR 44.4 million in the previous year, it becomes clear that revenue in the first half of the year was largely influenced by the multiyear orders that fortunately dominate our portfolio. Orders on hand fell by EUR 14.2 million to EUR 30.9 million at the end of the first half of 2024. However, the trends underlying these totals differ considerably between our three segments, with declines primarily attributable to the Industrial segment, while orders and revenue increased significantly in the Automotive segment and held steady in the IT Networks segment.
Revenue in the Industrial segment dropped from EUR 44.7 million in the previous year to EUR 30.7 million in the first half of 2024, with half-year revenue again close to 2022 levels. Operating EBIT fell to EUR 1.0 million after reaching a record high of EUR 6.7 million in the prior-year period. The previous year's record figure and the decline in the current year were primarily driven by demand in North America. The situation in the EMEA region is significantly more favorable at present, with individual transactions with very strong revenue and earnings anticipated in this region in the fourth quarter in particular. Our major customers in the USA are also predicting a significant upturn in the economy during this period. Our business development pipeline is full of specific project opportunities, and we expect to win new contracts quickly as soon as the mood in the market begins to brighten.
The automotive sector is currently witnessing a dramatic macroeconomic trend, with vehicle manufacturers freezing budgets and delaying new product launches. Automotive suppliers face mass redundancies and insolvencies, and one of the largest automotive suppliers, Bosch, is making a major acquisition to shift its focus towards heating and air conditioning technology. By contrast, the situation at Softing is
encouraging, with revenue in our Automotive segment completely bucking the wider sector trend to grow by around $35 \%$ from EUR 10.0 million to EUR 13.5 million in the first half of 2024. We have succeeded in uncoupling Softing Automotive from this year's economic slump by taking on major long-term projects. Our products are designed for tasks that are still essential for this sector even amid the crisis.
Our results were hampered by what remained a sluggish performance at GlobalmatiX. While costs continue to exceed income in this business, solid negotiations are currently underway for projects in the second half of the year that should enable GlobalmatiX to break even for the full year. As a result, EBIT across the entire Automotive segment improved by just EUR 0.9 million after breaking even in the previous year.
The IT Networks segment remained broadly unchanged from the previous year in the first half of 2024, with revenue only increasing slightly from EUR 3.4 million in the prior year to EUR 3.5 million. As a result, operating EBIT only made a modest improvement from EUR $\sim 1.4$ million to EUR $\sim 1.3$ million. The market for IT infrastructure such as switches and cabling contracted due to weak construction activity on practically a global scale. Softing compensated for this by ramping up its presence in growing submarkets dominated by AI and cloud computing. We expect new products to trigger a significant improvement in the IT Networks segment in the last four months of the financial year, a period that already traditionally generates around $40 \%$ of annual revenue.
Having been set up for growth after the record year of 2023, the Group's structures adversely impacted earnings amid lower-than-expected half-year revenue, as operating EBIT fell from EUR 3.9 million in the previous year to EUR $\sim 0.3$ million in the first half of 2024. Even taking into account the growth in revenue anticipated in the second half of the year with a particular focus on the fourth quarter, this situation calls for an efficiency program to restore Softing's profitability.
In the second quarter of 2024, the Executive Board developed and launched the CORE (Costs Down, Revenue Up) efficiency and focus program to adapt our cost structures to the situation. At the same time, we are focusing on a portfolio of products and services that creates the best opportunities for fresh growth. We expect this to deliver an earnings lift in the mid-single-digit million range for full-year 2025.
The combination of the aforementioned revenue outlook for the second half of the year and the initial impacts of the CORE program allow us to confirm our full-year guidance, with revenue near the lower end of our previously communicated range at around EUR 105 million. We expect operating EBIT to be in the middle of our guidance at EUR 4-5 million.
As always, every situation creates not only challenges but opportunities, too. We are ready and willing to tackle both and are heading into the second half of the year full of confidence!
Sincerely yours,
(Chief Executive Officer)
Softing Shares
MARKET CAPITALIZATION - TRADING VOLUME
Softing shares began the year at a price of EUR 5.30 before rising to EUR 5.80 in January and registering at around EUR 5.60 until mid-April. The share continued to shed value in the second quarter, hovering around the EUR 4.70 mark since then.
As a result, the market capitalization of Softing AG amounted to around EUR 43.3 million at the end of the second quarter (previous year: EUR 60.6 million). The share capital of Softing AG remains unchanged at EUR 9,105,381, divided into the same number of no-par-value shares.
During the reporting period, the average daily trading volume of Softing shares was 1,773 shares (Xetra and floor trading), largely on a par with the prior-year figure of 1,792 shares. Softing supports the liquidity of its shares by using two designated sponsors, ICF Bank AG Wertpapierhandelsbank and M.M. Warburg \& CO (AG \& CO.) KGaA.
GENERAL SHAREHOLDERS' MEETING RESOLVED INCREASED DIVIDEND OF EUR 0.13 PER SHARE
On May 8, 2024, the ordinary General Shareholders' Meeting of Softing AG adopted a resolution to distribute an increased dividend of EUR 0.13 per no-par share (previous year: EUR 0.10).
SHAREHOLDER STRUCTURE
As far as the Company is aware, Helm Trust Company Limited, St. Helier, Jersey, UK, remains the single largest investor in Softing's 9,105,381 shares with 2,043,221 shares (22.4\%). The next major shareholder is Mr. Alois Widmann, Vaduz, Principality of Liechtenstein, who holds 1,450,000 shares (15.9\%), followed by a number of institutional investors and several private anchor investors. The remaining shares are in free float.
ANALYST RECOMMENDATIONS
Warburg Research has analyzed the Softing share regularly for years in research reports and published two updates on the share in 2024. The most recent update of May 8, 2024 confirms the buy recommendation, stating a price target of EUR 8.00.
Information about analysts' reports on Softing shares is available at www.softing.com under Investor, News \& Publications, Research. The Press \& Interviews section contains information about the growth prospects of the Softing Group published in a variety of financial newspapers and magazines such as 4investors, Bernecker-Daily, boersengefluester.de, Börse Online, DER AKTIONÄR, finanzen.net, Nebenwerte Magazin, Plusvisionen and others.
BASIC DATA OF THE SOFTING SHARE
| ISIN / WKN | DE0005178008 / 517800 |
|---|---|
| Supersector | Information Technology (IT) |
| Sector | Software |
| Subsector | IT Services |
| Stock exchange symbol | SYT |
| Bloomberg / Reuters | SYT GR / SYTG |
| Market segment | Prime Standard, Official Trading, EU-regulated Market |
| Stock exchanges | XETRA, Frankfurt, Stuttgart, Munich, Hamburg, Düsseldorf, Berlin-Bremen, Tradegate |
| Initial listing (IPO) | May 16, 2000 |
| Indices | Prime All Share Performance Index |
| Share class | No-par bearer ordinary share with a notional value of EUR 1.00 per share |
| Share capital | EUR 9,105,381 |
| Authorized capital 2018 | EUR 4,552,690 until May 8, 2023 |
| Contingent capital 2018 | EUR 4,552,690 until May 8, 2023 |
| Designated sponsor | ICF Bank AG Wertpapierhandelsbank, M.M. Warburg \& CO (AG \& CO.) KGaA |
| Research coverage | Warburg Research |
PRICE OF THE SOFTING SHARE FROM 07/01/2023 TO 07/28/2024 (XETRA)
FINANCIAL CALENDAR
August 14, 2024
Half-Year Interim Report 2024
November 12, 2024
Interim management statement Q3/9M 2024
November 13, 2024
Münchner Kapitalmarkt Konferenz
November 25-27, 2024
German Equity Forum in Frankfurt/Main
Interim Group Management Report for the 2024 Half-Yearly Financial Report
REPORT ON NET ASSETS, FINANCIAL POSITION AND RESULTS OF OPERATIONS
After making an encouraging start in the first quarter, Softing was impacted by the weak industrial environment and a decline in investments in IT infrastructure in the second quarter. The resulting postponement of orders until the second half of the year and lower demand across the board clearly left their mark on the half-yearly results for 2024.
In 2023, economic development was largely driven by the processing of large order books in the wake of the Covid pandemic, particularly in the automation industry. Record revenues in 2023 prompted a significant build-up of inventories along our customers' entire distribution chains that resulted in sluggish order intake, some of which was already evident at the start of 2024 and some of which only became apparent in the second quarter of 2024. It would not be an exaggeration to describe the situation in the automotive sector and particularly among suppliers as dramatic in the first half of the year, as demonstrated by mass redundancies and a multitude of insolvencies that even included well-known companies. Fortunately, this situation has had little impact on Softing Automotive, as its major projects are long-term and urgent for its customers.
In light of these developments, the contrast with the first half of 2023 - the strongest in the Company's history to date - is particularly striking, with revenue falling by $18.6 \%$ from EUR 58.1 mil-
lion to EUR 47.3 million. The outstanding performance in the first half of 2023 was primarily driven by Softing's ability to catch up on product deliveries from the Industrial segment's large delivery backlog within just a few months, as unexpectedly fast deliveries of electronic components that were unavailable during the Covid years enabled Softing to deliver products to customers during the first half of 2023 in particular.
Incoming orders, which were inflated especially in recent years by customers placing earlier orders, fell further to EUR 31.9 million, down from EUR 44.4 million a year earlier. Customers are accepting most of the justified price increases we pass on to them. Our current pricing policies also reflect the high level of inflation compared with previous years. Due to the reasons mentioned above, orders on hand at the end of the first six months of 2024 were EUR 30.9 million, EUR 14.2 million lower than on December 31, 2023.
Although order books are at a regrettably low level, the Executive Board sees hardly any risk of cancellations here. The predominantly longer-term nature of its projects means that these orders are essential in enabling major industrial companies to process projects for their end customers.
Consolidated revenue totaled EUR 47.3 million in the first half of 2024, representing decrease of $18.6 \%$ compared with the same period of the previous year. Other operating income amounted to EUR 0.8 million after EUR 0.3 million in the previ-
ous year. Due to the revenue situation, inventories fell by $33.0 \%$ from EUR 27.0 million in the previous year to EUR 18.1 million in 2024. The gross profit margin as a percentage of revenue rose from $53.5 \%$ to a healthy $61.7 \%$ in 2024. This trend also reflects the price increases implemented in 2023 and the changed product mix. Driven both by inflation and the ensuing considerable wage increases and by the hiring of 35 new members of staff since June 30, 2023, personnel expenses rose from EUR 19.8 million in 2023 to EUR 21.7 million in the current year.
The jump in revenues in 2023 was particularly pronounced in Softing's largest segment, Industrial, resulting in a particularly heavy drop in revenue of around $31 \%$ from EUR 44.7 million to EUR 30.7 million in the first six months of the current year. This is due to the fact that revenue was realized in the first half of 2023 by reducing the high level of orders on hand at the end of 2022 and is close to the half-year revenue figure for 2022. Going forward, we currently expect revenue to normalize around the average for the last few years before returning to growth in 2025. EBIT fell from a record EUR 6.1 million in 2023 to EUR 0.5 million in the first half of 2024, while operating EBIT dropped from EUR 6.7 million to EUR 1.0 million. We expect individual transactions with significant revenue and earnings impact in the EMEA region in the second half of the year to markedly boost fullyear EBIT, with the improvement in earnings in the North America business anticipated in the second half of the year also contributing to this trend.
The traditional business in the Automotive segment shows a clearly positive trend of improved revenue and earnings figures. Bucking the dramatic sense of crisis prevailing in the automotive industry, revenue surged by $35 \%$ from EUR 10.0 million to EUR 13.5 million. Business at our subsidiary GlobalmatiX clearly improved without reaching a satisfactory level. EBIT in the Automotive segment amounted to EUR 0.9 million after EUR 0.0 million in the previous year. EBIT was hampered by the sluggish performance of GlobalmatiX's business, which saw costs continuing to exceed revenue. This caused the Automotive segment's operating EBIT to remain negative at EUR -0.3 million despite an EUR -0.5 million improvement year-onyear. Several opportunities for high-revenue and high-earnings deals are emerging at GlobalmatiX for the second half of 2024, which should result in significantly positive EBIT in the Automotive segment.
The IT Networks segment continued to be affected by weak construction activity in almost all markets, particularly in EMEA. Revenue increased slightly from EUR 3.4 million to EUR 3.5 million in the first six months of 2024. EBIT at EUR -1.7 million and operating EBIT at EUR -1.3 million were more or less flat after EUR -1.6 million and EUR -1.4 million, respectively, in the previous year. The situation is expected to improve in the second half of the year, given that products are now available without restrictions, the fourth quarter is usually the strongest of the year and the product portfolio will be expanded in the fall.
The Group's EBITDA fell from EUR 7.2 million to EUR 3.9 million in the first half of the year, with the EBITDA margin dropping from $12.4 \%$ in 2023 to $8.2 \%$ in the first half of 2024.
Operating EBIT (EBIT adjusted for capitalized development services and amortization on these as well as effects from purchase price allocation), the Group's main performance indicator, decreased from EUR 3.9 million to EUR -0.3 million in the first half of 2024. EBIT also turned slightly negative, from EUR 3.1 million to EUR -0.4 million.
This resulted in a consolidated loss of EUR 1.4 million in the first half of 2024 after a consolidated profit of EUR 1.7 million in the previous year. Accordingly, earnings per share were EUR -0.15 in the first half of 2024, compared with EUR 0.19 in the previous year.
The Group had cash of EUR 6.3 million as of June 30, 2024, compared with EUR 4.9 million as of December 31, 2023. Cash flow from operating activities after six months totaled EUR 4.9 million after EUR 9.1 million in the prior-year period. Capital expenditure on property, plant, and equipment was made for replacement purposes and to strengthen network security in connection with the increased threat of cybercrime. Please refer to the Research and Development section for information on investments in products. Cash flow from financing activities in the amount of EUR -0.2 million was driven by the payment of the 2024 dividend of EUR 1.2 million and the scheduled repay-
ment of loans of EUR 3.8 million and the raising of new long-term loans in the amount of EUR 6.0 million.
Overall, this translates into an equity ratio of $48.4 \%$ as of June 30, 2024 ( $56.4 \%$ as of June 30, 2023).
RESEARCH AND PRODUCT DEVELOPMENT
In the first six months of 2024, Softing capitalized internal and external expenses of EUR 2.8 million (after EUR 2.4 million in the previous year) for the development of new products and the enhancement of existing ones. New and improved products will be launched by all segments in the second half of 2024. Further development services for product maintenance were expensed.
EMPLOYEES
As of June 30, 2024, the Group had 443 employees (previous year: 408). No stock options were issued to employees in the reporting period.
RISKS AND OPPORTUNITIES FOR THE COMPANY'S FUTURE DEVELOPMENT
As of the reporting date of June 30, 2024, the Company's risk and opportunity structure had not deviated significantly from the description in the consolidated financial statements for the year ended December 31, 2023. Material changes are also not expected for the remaining six months of 2024. For more detailed information, we refer to our Group Management Report in the 2023 Annual Report, page 10 et seq.
SUBDUED INDUSTRIAL ECONOMIC DEVELOPMENT AND RECESSION SCENARIO
The cloudy economy in Germany and Europe has a negative impact on Softing's business performance. Although rising inflation, which is further fueled by a sharp increase in energy prices, is declining compared to previous years, many institutions (ECB, World Bank, ifo Institute, etc.) expect inflation to remain higher than 3\%, depriving the ECB of any leeway for implementing interest rate cuts to stimulate the economy. Prospects for economic recovery were scaled back in the first six months, with many institutions (ECB, World Bank, ifo Institute, etc.) anticipating only marginal growth.
In risk management terms, this means that Softing is implementing measures aimed at improving profitability - first and foremost cost-cutting programs. In spite of the steps taken, the risks cannot be controlled completely. We do not anticipate a significant loss of revenue that is not directly realizable because most of our products cannot be replaced in the short term in our customers' value chains. Increased marketing activities will also result in higher revenue in previously underdeveloped regions. These products are the backbone of business in the Industrial segment and stabilize its revenue position.
Geopolitical uncertainty caused by Russia's war of aggression, and terror and war in the Middle East remains a concern. Because Softing AG's customer base is essentially limited to Western countries, we do not fear any direct negative impacts on our business model.
The Group takes the issue of cyber security and the potential widening of hostilities in this area extremely seriously. The current recommendations of the authorities are being reviewed and implemented taking into account the situation at Softing. Softing is in the process of liaising with other companies to determine its own position. Softing continues to invest substantial sums in cyber security and provides its staff with regular training on the subject. As no company is immune from a cyber attack, it is essential to ensure that resilience and recoverability are built into IT systems and that all employees remain vigilant.
We do not currently see a triggering event necessitating an unscheduled impairment test, but we, too, are monitoring the situation closely nonetheless.
However, as a development and distribution company, Softing is directly dependent on sufficient electricity supplies. Prolonged electricity supply outages would bring its business activities to a standstill.
Overall, we are currently still expecting results of operations to improve in the second half of the year. For information on other risks and opportunities, we refer to the Group Management Report in the 2023 Annual Report, page 23 et seq.
IMPACT ON NET ASSETS, FINANCIAL POSITION AND RESULTS OF OPERATIONS
As of June 30, 2024, the Softing Group has cash and cash equivalents of EUR 6.3 million, current receivables of EUR 10.6 million and agreed but not yet drawn down credit lines of around EUR 10.2 million at its disposal. This means that the Group has up to EUR 27.1 million in near cash funds available at short notice to meet the challenges in these times of crisis.
There were no breaches of loan agreements. The banks relevant to Softing fully support the development of new technologies and products and the ongoing program to sharpen the Company's focus and reduce its costs. In addition to revenue and earnings from operations, this secures the Group's financing.
Softing continues to closely monitor its receivables management, and, with one exception, no deterioration in customer payment behavior has been observed so far. This is also due to the fact that most of Softing's customers are large international corporations with sufficient funds.
We currently expect to meet the medium to lower range of the 2024 guidance for the Group as published in the management report of the 2023 Annual Report (p. 31 et seq.).
Due to the Group's financial strength, orders on hand, strict cost discipline at all levels, additional financing options not yet utilized, and global positioning, the Executive Board sees no danger of developments threatening the continued existence of the Group as a going concern.
EVENTS AFTER THE REPORTING PERIOD
There were no events of special importance after the reporting date of June 30, 2024.
GENERAL ACCOUNTING POLICIES
The consolidated financial statements of Softing AG as of December 31, 2023 were prepared in accordance with the International Financial Reporting Standards (IFRSs) based on the guidance of the International Accounting Standards Board (IASB) applicable at the reporting date. The condensed interim consolidated financial statements as of June 30, 2024, which were prepared on the
basis of International Accounting Standard (IAS) 34 "Interim Financial Reporting", do not contain all of the required information in accordance with the requirements for the presentation of the annual report and should be read in conjunction with the consolidated financial statements of Softing AG as of December 31, 2023. In general, the same accounting policies were applied in the interim financial statements as of June 30, 2024 as in the consolidated financial statements for the 2023 financial year. This 2024 half-yearly report was prepared without an auditor's review.
CHANGES IN THE BASIS OF CONSOLIDATION
As of June 30, 2024, no changes occurred in the basis of consolidation compared to December 31, 2023.
RESPONSIBILITY STATEMENT
The condensed interim consolidated financial statements for the first half of 2024 were released for publication on August 14, 2024 by resolution of the Executive Board.
To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the interim consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company, and the interim management report of the Group includes a fair review of the development and performance of the business and the position of the Company, together with a description of the material opportunities and risks associated with the expected development of the Company.
Haar, Germany, August 14, 2024
Softing AG
Dr. Wolfgang Trier Chief Executive Officer
Ernst Homolka
Executive Board member
Consolidated Income Statement
from January 1 to June 30, 2024
| EUR thousand | $\begin{gathered} 01 / 01 /- \ 06 / 30 / 2024 \end{gathered}$ | $\begin{gathered} 01 / 01 /- \ 06 / 30 / 2023 \end{gathered}$ | $\begin{gathered} 04 / 01 /- \ 06 / 30 / 2024 \end{gathered}$ | $\begin{gathered} 04 / 01 /- \ 06 / 30 / 2023 \end{gathered}$ |
|---|---|---|---|---|
| Revenue | 47,289 | 58,110 | 23,076 | 29,581 |
| Other own work capitalized | 2,842 | 2,056 | 1,475 | 1,137 |
| Other operating income | 795 | 325 | 686 | 171 |
| Operating income | 50,926 | 60,491 | 25,237 | 30,889 |
| Cost of materials / cost of purchased services | $-18,070$ | $-27,050$ | $-9,436$ | $-14,477$ |
| Staff costs | $-21,726$ | $-19,812$ | $-11,172$ | $-10,225$ |
| Depreciation, amortization and impairment losses | $-4,226$ | $-4,128$ | $-2,185$ | $-2,055$ |
| thereof depreciation / amortization due to purchase price allocation | $-834$ | $-834$ | $-418$ | $-415$ |
| thereof depreciation/amortization due to lease accounting | $-847$ | $-678$ | $-415$ | $-337$ |
| Other operating expenses | $-7,280$ | $-6,430$ | $-3,325$ | $-3,016$ |
| Operating expenses | $-51,302$ | $-57,420$ | $-26,118$ | $-29,773$ |
| Profit / loss from operations (PRI) | $-376$ | 3,071 | $-441$ | 1,116 |
| Interest income | 18 | 1 | 9 | 1 |
| Interest expense | $-322$ | $-169$ | $-216$ | $-91$ |
| Interest expense from lease accounting | $-136$ | $-65$ | $-74$ | $-31$ |
| Other finance income/finance costs | ||||
| Earnings before income taxes | $-816$ | 2,838 | $-1,162$ | 995 |
| Income taxes | $-548$ | $-1,139$ | $-411$ | $-500$ |
| Consolidated profit | $-1,364$ | 1,699 | $-1,573$ | 495 |
| Consolidated profit attributable to: | ||||
| Shareholders of Softing AG | $-1,200$ | 1,677 | $-1,407$ | 485 |
| Non-controlling interests | $-165$ | 22 | $-165$ | 10 |
| Consolidated profit | $-1,365$ | 1,699 | $-1,572$ | 495 |
| Earnings per share (basic = diluted) | $-0,15$ | 0,19 | $-0,17$ | 0,05 |
| Average number of shares outstanding (basic) | 9,015,381 | 9,015,381 | 9,015,381 | 9,015,381 |
Consolidated Statement of Comprehensive Income
from January 1 to June 30, 2024
| EUR thousand | $\begin{gathered} 01 / 01 /- \ 06 / 30 / 2024 \end{gathered}$ | $\begin{gathered} 01 / 01 /- \ 06 / 30 / 2023 \end{gathered}$ | $\begin{gathered} 04 / 01 /- \ 06 / 30 / 2024 \end{gathered}$ | $\begin{gathered} 04 / 01 /- \ 06 / 30 / 2023 \end{gathered}$ |
|---|---|---|---|---|
| Consolidated profit | $-1,365$ | 1,699 | $-1,572$ | 495 |
| Items that will be reclassified to consolidated total comprehensive income: Currency translation differences Changes in unrealized gains / losses Tax effect |
1,242 | $-599$ | 389 | $-30$ |
| Total currency translation remeasurements | 1,242 | $-599$ | 389 | $-30$ |
| Other comprehensive income | 1,242 | $-599$ | 389 | $-30$ |
| Total Consolidated profits for the period | $-133$ | 1,100 | $-3,183$ | 465 |
| Total consolidated comprehensive income for the period attributable to: Shareholders of Softing AG |
42 | 1,078 | $-1,018$ | 455 |
| Non-controlling interests | $-165$ | 22 | $-165$ | 10 |
| Total consolidated comprehensive income for the period | $-123$ | 1,100 | $-3,183$ | 465 |
Consolidated Statement of Financial Position
as of June 30, 2024
| Assets | 06/30/2024 EUR (in thsds.) |
12/31/2023 EUR (in thsds.) |
|---|---|---|
| Non-current assets | ||
| Goodwill | 11,192 | 10,950 |
| Other intangible assets | 36,759 | 36,445 |
| Property, plant and equipment | 10,818 | 8,134 |
| Other financial assets | 435 | 435 |
| Deferred tax assets | 779 | 606 |
| Non-current assets, total | 53,383 | 56,570 |
| Current assets | ||
| Inventories | 25,792 | 23,679 |
| Trade receivables | 10,634 | 12,270 |
| Current financial assets | 715 | 341 |
| Contract assets | 1,909 | 902 |
| Current income tax assets | 742 | 593 |
| Cash and cash equivalents | 6,263 | 4,859 |
| Current assets | 3,562 | 3,845 |
| Current assets, total | 93,617 | 86,489 |
| Total assets | 103,609 | 103,059 |
| Equity and liabilities | 06/30/2024 EUR (in thsds,) |
12/31/2023 EUR (in thsds,) |
|---|---|---|
| Equity | ||
| Subscribed capital | 9,105 | 9,105 |
| Capital reserves | 31,111 | 31,111 |
| Treasury Shares | $-485$ | $-485$ |
| Retained earnings | 12,744 | 13,875 |
| Equity attributable to shareholders of Softing AG | 52,475 | 53,606 |
| Non-controlling interests | 524 | 689 |
| Equity, total | 53,000 | 55,895 |
| Non-current liabilities | ||
| Pensions | 784 | 891 |
| Long-term borrowings | 10,956 | 6,356 |
| Other non-current financial liabilities | 11,287 | 8,753 |
| Deferred tax liabilities | 5,771 | 5,314 |
| Non-current liabilities, total | 28,798 | 21,514 |
| Current liabilities | ||
| Trade payables | 8,015 | 6,750 |
| Contract liabilities | 7,158 | 5,957 |
| Provisions | 64 | 79 |
| Income tax liabilities | 235 | 279 |
| Short-term borrowings | 6,077 | 8,476 |
| Other current financial liabilities | 5,257 | 5,181 |
| Current non-financial liabilities | 996 | 728 |
| Current liabilities, total | 27,892 | 27,460 |
| Total equity and liabilities | 100,600 | 103,059 |
Consolidated Statement of Changes in Equity
from January 1 to June 30, 2024
| Subscribed capital | Capital reserves | Treasury shares | Retained earnings | Equity attributable to shareholders of Softing AG | Noncontrolling interests | Total equity | ||||
|---|---|---|---|---|---|---|---|---|---|---|
| Net retained profits and other | Remeasurements | Currency translation | Total | |||||||
| EUR (in thids) | EUR (in thids.) | EUR (in thids.) | EUR (in thids.) | EUR (in thids.) | EUR (in thids.) | EUR (in thids.) | EUR (in thids.) | EUR (in thids.) | EUR (in thids.) | |
| Balance as of January 01, 2024 | 9,105 | 31,111 | $-485$ | 18,533 | $-537$ | $-857$ | 13,574 | 33,005 | $-500$ | 54,353 |
| Consolidated profit 2024 | $-1,200$ | $-1,200$ | $-1,200$ | $-165$ | $-1,365$ | |||||
| Other comprehensive income 2024 | 1,242 | 1,242 | 1,242 | 1,242 | ||||||
| of which from remeasurements | ||||||||||
| of which currency translation | 1,242 | 1,242 | 1,242 | 1,242 | ||||||
| of which tax effect | ||||||||||
| Total consolidated comprehensive income for the period | $-1,200$ | 1,242 | 42 | 42 | $-165$ | $-123$ | ||||
| Dividend payment | $-1,172$ | $-1,172$ | $-1,172$ | $-1,172$ | ||||||
| Purchase of own shares | ||||||||||
| Changes in minority interests | ||||||||||
| Transactions with owners in their capacity as owners | $-1,172$ | $-1,172$ | $-1,172$ | $-1,172$ | ||||||
| Balance as of June 30, 2024 | 9,105 | 31,111 | $-485$ | 11,561 | $-537$ | 1,699 | 12,754 | 32,475 | 525 | 53,050 |
| Subscribed capital | Capital reserves | Treasury shares | Retained earnings | Equity attributable to shareholders of Softing AG | Noncontrolling interests | Total equity | ||||
|---|---|---|---|---|---|---|---|---|---|---|
| Net retained profits and other | Remeasurements | Currency translation | Total | |||||||
| EUR (in thids.) | EUR (in thids.) | EUR (in thids.) | EUR (in thids.) | EUR (in thids.) | EUR (in thids.) | EUR (in thids.) | EUR (in thids.) | EUR (in thids.) | EUR (in thids.) | |
| Balance as of January 01, 2023 | 9,105 | 31,111 | $-485$ | 20,664 | $-676$ | 1,275 | 21,264 | 60,995 | 840 | 61,815 |
| Consolidated profit 2023 | $-5,829$ | $-5,829$ | $-5,829$ | 117 | $-5,712$ | |||||
| Other comprehensive income 2023 | 159 | $-823$ | $-659$ | $-659$ | $-659$ | |||||
| of which from remeasurements | 190 | 190 | 190 | 190 | ||||||
| of which currency translation | $-818$ | $-818$ | $-818$ | $-818$ | ||||||
| of which tax effect | $-31$ | $-31$ | $-31$ | $-31$ | ||||||
| Total consolidated comprehensive income for the period | $-5,829$ | 159 | $-818$ | $-6,488$ | $-6,488$ | 117 | $-6,371$ | |||
| Dividend payment | $-902$ | $-902$ | $-902$ | $-267$ | $-1,169$ | |||||
| Purchase of own shares | ||||||||||
| Changes in minority interests | ||||||||||
| Transactions with owners in their capacity as owners | $-902$ | $-902$ | $-902$ | $-1,169$ | ||||||
| Balance as of December 31, 2023 | 9,105 | 31,111 | $-485$ | 13,933 | $-537$ | 457 | 13,874 | 53,605 | 690 | 54,295 |
Consolidated Statement of Cash Flows
from January 1 to June 30, 2024
| EUR thousand | 01/01/ - 06/30/2024 | 01/01/ - 06/30/2023 |
|---|---|---|
| Cash flows from operating activities | ||
| Profit (before tax) | $-817$ | 2,839 |
| Depreciation, amortization and impairment losses on fixed assets | 4,226 | 4,128 |
| Other non-cash changes | 532 | $-140$ |
| Cash flows for the period | 3,941 | 6,827 |
| Interest income / Finance income | $-18$ | $-1$ |
| Interest expense / Finance costs | 322 | 169 |
| Change in other and accrued liabilities | $-122$ | $-116$ |
| Change in inventories | $-2,113$ | $-2,043$ |
| Change in trade receivables | $-273$ | 3,970 |
| Changes in financial receivables and other assets | 489 | $-235$ |
| Change in trade payables | 1,265 | $-1,053$ |
| Changes in financial and non-financial liabilities and other liabilities | 1,753 | 1,753 |
| Interest received / Finance income | 18 | 1 |
| Income taxes received | 0 | 19 |
| Income taxes paid | $-344$ | $-207$ |
| Cash flows from operating activities | 4,918 | 5,044 |
| Cash paid for investments in new internal product developments | $-2,842$ | $-2,043$ |
| Cash paid for investments in new external product developments | 0 | $-396$ |
| Investments in other intangible assets | $-4$ | $-43$ |
| Cash paid for investments in property, plant and equipment | $-504$ | $-435$ |
| Cash flows from investing activities | $-3,350$ | $-2,917$ |
| Cash paid for dividends | $-1,172$ | $-902$ |
| Repayment of lease liabilities | $-766$ | $-679$ |
| Cash received from long-term bank line | 6,000 | 0 |
| Cash received from short-term bank line | 0 | 0 |
| Cash repayment of bank loans | $-3,799$ | $-2,041$ |
| Interest, lease accounting | $-136$ | $-65$ |
| Other interest paid | $-322$ | $-169$ |
| Total interest paid | $-458$ | $-234$ |
| Cash flows from financing activities | 1,171 | 3,855 |
| Net change in funds | 1,373 | 2,311 |
| Effects of exchange rate changes on cash and cash equivalents | 31 | $-49$ |
| Cash and cash equivalents at the beginning of the period | 4,859 | 6,802 |
| Cash and cash equivalents at the end of the period | 6,263 | 9,064 |
Consolidated Segment Reporting
from January 1 to June 30, 2024
| Industrial | Automotive | IT Networks | Other | Total segments | Other consolidation | Total | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| $\begin{gathered} 2024 \ \text { EUR (in } \ \text { thods.) } \end{gathered}$ | $\begin{gathered} 2023 \ \text { EUR (in } \ \text { thods.) } \end{gathered}$ | $\begin{gathered} 2024 \ \text { EUR (in } \ \text { thods.) } \end{gathered}$ | $\begin{gathered} 2023 \ \text { EUR (in } \ \text { thods.) } \end{gathered}$ | $\begin{gathered} 2024 \ \text { EUR (in } \ \text { thods.) } \end{gathered}$ | $\begin{gathered} 2024 \ \text { EUR (in } \ \text { thods.) } \end{gathered}$ | $\begin{gathered} 2023 \ \text { EUR (in } \ \text { thods.) } \end{gathered}$ | $\begin{gathered} 2024 \ \text { EUR (in } \ \text { thods.) } \end{gathered}$ | $\begin{gathered} 2023 \ \text { EUR (in } \ \text { thods.) } \end{gathered}$ | $\begin{gathered} 2024 \ \text { EUR (in } \ \text { thods.) } \end{gathered}$ | $\begin{gathered} 2023 \ \text { EUR (in } \ \text { thods.) } \end{gathered}$ | $\begin{gathered} 2024 \ \text { EUR (in } \ \text { thods.) } \end{gathered}$ | $\begin{gathered} 2023 \ \text { EUR (in } \ \text { thods.) } \end{gathered}$ | $\begin{gathered} 2024 \ \text { EUR (in } \ \text { thods.) } \end{gathered}$ | |
| Revenues with third parties | 30,539 | 44,557 | 13,383 | 9,952 | 2,636 | 2,763 | 731 | 838 | 47,289 | 58,110 | 0 | 0 | 47,289 | 58,110 |
| Revenues with other segments | 184 | 167 | 115 | 72 | 890 | 651 | 0 | 0 | 1,189 | 890 | $-1,189$ | $-890$ | 0 | 0 |
| Total revenue | 30,723 | 44,724 | 13,498 | 10,024 | 3,526 | 3,413 | 731 | 838 | 48,478 | 59,000 | $-1,189$ | $-890$ | 47,289 | 58,110 |
| Depreciation / amortization | $-1,875$ | $-1,446$ | $-1,589$ | $-1,600$ | $-606$ | $-472$ | $-592$ | $-611$ | $-4,662$ | $-4,129$ | 436 | 2 | $-4,226$ | $-4,128$ |
| Impairment of assets | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Operating segment result | 1,048 | 6,723 | $-347$ | $-482$ | $-1,346$ | $-1,358$ | 177 | $-566$ | $-469$ | 4,316 | 122 | $-420$ | $-347$ | 3,896 |
| EBIT | 533 | 6,135 | 942 | $-36$ | $-1,711$ | $-1,597$ | 219 | $-513$ | $-17$ | 3,988 | $-360$ | $-917$ | $-376$ | 3,071 |
| Segment assets | 92,119 | 52,985 | 41,581 | 39,897 | 11,088 | 13,506 | $-9,966$ | 13,959 | 134,822 | 120,348 | $-25,222$ | $-10,378$ | 109,601 | 109,969 |
| of which IFRS 16 | 3,500 | 653 | 948 | 196 | 225 | 69 | 3,239 | 3,736 | 7,912 | 4,654 | 0 | 0 | 7,912 | 4,654 |
| Segment liabilities | 21,344 | 18,181 | 25,566 | 15,706 | 11,592 | 5,229 | 54,908 | 38,517 | 113,410 | 77,633 | $-56,810$ | $-29,698$ | 56,600 | 47,935 |
| of which IFRS 16 | 3,192 | 370 | 849 | 67 | 87 | 11 | 2,666 | 3,211 | 6,794 | 3,659 | 0 | 0 | 6,794 | 3,659 |
| Capital expenditure | 3,838 | 748 | 2,452 | 1,931 | 131 | 180 | 131 | 782 | 6,552 | 3,642 | 0 | $-12$ | 6,552 | 3,630 |
| Revenue from contracts with customers recognized over time | Industrial | Automotive | IT Networks | Other | Total | |||||
|---|---|---|---|---|---|---|---|---|---|---|
| $\begin{gathered} 2024 \ \text { EUR (in } \ \text { thods.) } \end{gathered}$ | $\begin{gathered} 2023 \ \text { EUR (in } \ \text { thods.) } \end{gathered}$ | $\begin{gathered} 2024 \ \text { EUR (in } \ \text { thods.) } \end{gathered}$ | $\begin{gathered} 2023 \ \text { EUR (in } \ \text { thods.) } \end{gathered}$ | $\begin{gathered} 2024 \ \text { EUR (in } \ \text { thods.) } \end{gathered}$ | $\begin{gathered} 2023 \ \text { EUR (in } \ \text { thods.) } \end{gathered}$ | $\begin{gathered} 2024 \ \text { EUR (in } \ \text { thods.) } \end{gathered}$ | $\begin{gathered} 2023 \ \text { EUR (in } \ \text { thods.) } \end{gathered}$ | $\begin{gathered} 2023 \ \text { EUR (in } \ \text { thods.) } \end{gathered}$ | ||
| Point in time | 29,262 | 43,783 | 7,370 | 3,632 | 2,626 | 2,747 | 731 | 838 | 39,990 | 51,000 |
| Over time | 1,276 | 774 | 6,013 | 6,320 | 10 | 16 | 0 | 0 | 7,299 | 7,110 |
| Total | 30,538 | 44,557 | 13,383 | 9,952 | 2,636 | 2,763 | 731 | 838 | 47,289 | 58,110 |
| Geographical segments: | Revenue | Fixed assets | Additions to fixed assets | ||||||
|---|---|---|---|---|---|---|---|---|---|
| $\begin{gathered} 2024 \ \text { EUR } \ \text { (in thods.) } \end{gathered}$ | $\begin{gathered} 2023 \ \text { EUR } \ \text { (in thods.) } \end{gathered}$ | $\begin{gathered} 2023 \ \text { EUR } \ \text { (in thods.) } \end{gathered}$ | $\begin{gathered} 2024 \ \text { EUR } \ \text { (in thods.) } \end{gathered}$ | $\begin{gathered} 2023 \ \text { EUR } \ \text { (in thods.) } \end{gathered}$ | $\begin{gathered} 2024 \ \text { EUR } \ \text { (in thods.) } \end{gathered}$ | $\begin{gathered} 2023 \ \text { EUR } \ \text { (in thods.) } \end{gathered}$ | $\begin{gathered} 2024 \ \text { EUR (in } \ \text { thods.) } \end{gathered}$ | ||
| Germany | 17,326 | 14,690 | 23,056 | 25,759 | 3,241 | 2,661 | |||
| USA | 16,883 | 29,874 | 19,702 | 17,385 | 3,236 | 48 | |||
| Other countries | 13,080 | 13,546 | 16,447 | 19,424 | 75 | 921 | |||
| Total | 47,289 | 18,110 | 59,205 | 62,569 | 6,552 | 3,630 |
Directors' Holdings
| Boards | Number of shares | Number of options | ||
|---|---|---|---|---|
| 06/30/2024 | 12/31/2023 | 06/30/2024 | 12/31/2023 | |
| Supervisory Board | ||||
| Matthias Weber (chairman), Chief Financial Officer, Holzkirchen | - | - | - | - |
| Andreas Kratzer (Deputy chairman), certified public accountant, Zurich, Switzerland | 10,155 | 10,155 | - | - |
| Dr. Klaus Fuchs (member), graduate computer scientist / graduate engineer, Helfant | 278,820 | 278,820 | - | - |
| Executive Board | ||||
| Dr.-Ing. Dr. rer. oec. Wolfgang Trier, Munich | 163,234 | 163,234 | - | - |
| Ernst Homolka, Munich | 10,900 | 10,900 | - | - |
Softing AG
Richard-Reitzner-Allee 6
85540 Haar/Germany
Phone +498945656 -0
Fax +498945656 -399
[email protected]
www.softing.com