VT5 Acquisition Company AG

Investor Presentation • Apr 17, 2024

R&S Group Full Year 2023 Results

Presentation for investors, analysts and financial media

17 April 2024

This presentation contains certain forward-looking statements. Such forward-looking statements reflect the current views of management and are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause actual results, performance or achievements of the Group to differ materially from those expressed or implied herein. Although R&S Group is convinced that the forward-looking statements are based on reasonable assumptions, R&S Group cannot guarantee that these expectations will be realized.

Should such risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this presentation.

R&S Group is providing the information in this presentation as of this date and does not undertake any obligation to update any forward-looking statements contained in it as a result of new information, future events or otherwise.

Today's speakers ³

Markus Laesser Group CEO

Matthias P. Weibel Group CFO

Table of contents ⁴

Introduction and highlights – Markus Laesser, Group CEO 1

• Strategy Markus Laesser, Group CEO 2
• Full year 2023 financial results Matthias P. Weibel, Group CFO 3
• Sustainability Matthias P. Weibel, Group CFO 4
• Outlook & take aways Markus Laesser, Group CEO 5

6 Your questions

Successful year 2023 marked by strong sales and record profitability results. Net sales (adjusted) up by 40% on an organic basis.

Solid order intake and strong order backlog.

Secular tailwinds for the electricity distribution sector driving multidimensional future growth.

Strong operational results turning into remarkable cash conversion.

Achievements delivered as promised in FY 2023 guidance.

Listing on SIX Swiss Exchange on 13 December 2023 under the symbol «RSGN».

R&S has the DNA of a quality local champion with the necessary scale

Source: Management information Notes:

1. Founded in 2012, R&S was built on a company from 1919

2. Industries include photovoltaic and wind (renewables), e-mobility, and Datacenters

Introduction and highlights Our highly reliable transformer portfolio

Reliable and highly efficient electrical infrastructure products

Introduction and highlights Continued significant investment in 2023 to boost future growth

8

Strategy

Markus Laesser | Group CEO

Strategy ¦ Market Strong secular market tailwinds for increased electricity demand

…drive accelerated transformer market growth

1 MW of new power capacity leads to ~3 MVA in transformer capacity given energy is transformed several times

…combined with massive replacement

Expected development of installed power generation capacity (GW) per region CAGR requirements….

Operating time (years)

0 5 10 15 20 25 30 35 40 45 50

Secular tailwinds…

0

Changing electricity consumption

Rise in traditional demand and the upgrading of grid infrastructure as well as the emergence of new demand through electrification

Expansion of large-scale renewables

Growth of centralised renewables creating the need for long distance transmission and a flexible grid. In this context CHF18bn from the Cohesion Policy fund is invested into renewable energy sources

Growth of distributed renewables

Including residential and commercial generation, requiring grid upgrades for bi-directional flows (supported by EU CHF40bn fund aimed to support low carbon, nascent technologies)

Aging grid infrastructure

Increasing number of replacements needed for equipment, as well as growing maintenance needs with currently 30% and by 2030 about 50% of the EU grid being over 40 years old

Increasing reliability and resiliency concerns

Cybersecurity, weather & climate changes and geopolitical challenges all require improved resiliency and reliability in the grid

11

Strategy ¦ Our response 12 Strategic roadmap of ongoing & future upside levers

M&A potential

Focus on what we have and accelerate. Create long-term value, based on leading positions with selected products and specific countries. Focus on what we do best and offer our engineering expertise, quality and reliability to new markets.

Strategy ¦ Leadership Culture as a key driver for value creation and growth

Full year 2023 financial results

Matthias P. Weibel | Group CFO

FY 2023 financial results Key messages per 31 December 2023

16

FY 2023 financial results Key financial figures 2023 (adjusted )

Consolidated key financial	figures 2022 reported1	2022 1 adjusted	2023 reported1	2023 adjusted1	Change in adjusted figures
	MCHF	MCHF	MCHF	MCHF	in%
Order intake	240 9	231 6	264 6	2 245 0	6%
Order backlog	158 9	151 9	185 7	185 7	22%
Net sales	155 1	144 3	216 9	2 201 6	40%
(EBIT) Operating result	7 7	9 1	28 7	3 37 5	312%
% of net sales as	0% 5	3% 6	13 2%	18 6%
Profit after tax	4 3	5 9	11 6	4 28 9	391%
share CHF Earnings in per	0 15	0 20	0 40	1 00	391%
position5 Net financial	4 7	0 7	6 7	6 6 7	-5%
Dividend share in CHF per	n.a.	n.a.	0 25	7 0 25
Year-end Number of full-time equivalents	712	540	616	616	14%

1 without figures of plant in Czech Republic (SERW), which was divested on 5 December 2023

2 adjusted for figures of divested plant in Czech Republic (SERW)

3 adjusted for MCHF 9.5 loss from sale of SERW including disposed net assets of MCHF 4.0 and

2 recycling of historic goodwill of SERW in the amount of MCHF 5.5 included in «Other Operating Expenses»

4 adjusted for MCHF 9.5 loss from sale of SERW (see footnote 2) and non-operating listing costs from initial business combination of MCHF 8.0

⁵defined as cash and equivalents less (interest-bearing) short- and long-term liabilities

6 including MCHF 38.7 financial debt of R&S Group Holding AG (former VT5)

⁷proposal of the Board of Directors to the AGM on 28 May 2024

FY 2023 financial results Strong growth of order intake and backlog

• Stable backlog 2024 with strong Value Added; continuously high monthly order intake; no margin erosion expected in 2024 in key markets (CH, GER, IT)
• Low pressure on prices as long as material prices remain stable; build-up of new capacities and competitors that calculate very tight might change the overall picture only in the short term
• Since 3 months avg. Book-to-bill flat > 1.1 (see graph above)
• High backlog for Oil-Distribution and Power Transformers until mid of 2025, normal backlog for Cast Resin Transformers until mid of 2024

Three adjustments at holding level had a significant impact on the annual financial statements.

According to FER 24/22, transaction costs may not be offset against equity, but must be expensed as "Listing costs" in financial expenses.

Negative impact of 8 MCHF on net income.

Initial Business Combination (IBC) led to goodwill offset of CHF 17.7 million against equity

From a legal perspective, VT5, later renamed to RSG, took over the existing R&S group. From an accounting perspective, however, the existing R&S (i.e. R&S International Holding AG) bought VT5. For this reason, a specific amount of goodwill resulted, which was booked against equity (acc. to FER 30).

Historic goodwill of SERW to be fully amortized via P&L.

Negative impact of an additional MCHF 5.52 on EBITDA (total of MCHF 9.5 in other operating expenses).

A
B
C
D
E
F
G

adjusted EPS at 1.0 CHF

previous year 2022: «old» R&S group without acquired VT5

A Net sales

• adjusted net sales without SERW 201.6 MCHF (+40%)
• small FX impact: based on prior year avg. exchange rates net sales would have been 1.9% higher; mainly due to stronger CHF vs. EUR
• B Semi-/ finished goods decreased in 2023 as all plants, except ZREW, were able to reduce their semi/ finished goods
• C Material costs decreased continuously in 2023 and with good availability of key materials. Low materials ratio at 57% at the end of the year (previous year 68%).
• D Personnel costs in relation to sales down from previous year from 21% to 18%, but higher in absolute terms (+17.8%) due to salary inflation (especially in Poland) and increase number of employees to address business growth and strategic expansion of capacities (new plant in Poland)
• E Other operating expenses includes write-off of historic goodwill (5.52 MCHF) and the disposed net assets (4 MCHF) of SERW

Financial result listing costs

F

• According to FER 24/22, the ransaction costs for «going public» may not be offset against equity, but must be reported as expenses in «Financial Expenses»
• For 2024, the costs of «being public» will be recorded in operating expenses .
• G Tax expenses increased due to higher profit and continued consumption of tax loss carryforwards (most of the available losses were consumed in 2023) and expired tax exemptions for Tesar PL.

FY 2023 financial results EBIT margin significantly improved

Derivation of EBIT bridge (reported to adjusted)

FY 2023 financial results Continuously increased levels of revenue and value add

Quarterly performance illustrates how operating performance and margins have continuously improved over the last two years.

-

FY 2023 financial results Balance sheet and Cash flow: reduction of NWC unlocked cash

Guidance

Guidance R&S to deliver profitable growth on a sustainable basis

	1	2
	9-12%
	16-18% of net sales

¹ Latest guidance for 2024 (announced on January 24, 2024

² Based on current mid-term plan

Guidance ¦ Corporate Governance Stable shareholder base

650 shareholders per end of 2023 737 shareholders per 31.03.2024

Sustainability

Matthias P. Weibel | Group CFO

Sustainability Report on non-financial matters

• The non-financial report is separated from the annual report and has been established in accordance with Art. 964a et seqq. of the Swiss Code of Obligations.
• We recognize the environmental footprint of our operations and seek to avoid, minimize and mitigate our adverse environmental impact, regarding greenhouse gas (GHG) emissions, the use of water, electricity, natural resources and soil pollution.
• We continue to consider ways to understand different metrics for measuring Scope 1, 2 and 3 GHG emissions and tracking our impact on decarbonization.
• We've set the target to reduce GHG emissions by 33% by 2033 versus 2023 levels, and to be climate neutral by 2050, in accordance with the Swiss Climate and Innovation Act.
• We pursue a zero-tolerance policy with regard to child labour within the Group and does not import or process an annual quantity of conflict minerals.

Implementation of sustainability initiatives across our transformer value chain

• Flagship project demonstrated low energy losses in use and low CO² in production
• Minimising supply chain impact with bluemint® materials provided from nearby sites in Europe

Transformers produced with a demonstrable sustainable impact

…to how products are designed and perform

• Product design optimisation and use of better performing materials
• ≥80% of the final product consists of metals, of which the majority is recyclable

30

• The life expectancy of the product is ~20 years on average, with some products still in operation today after 35+ years
• Demonstrated results with 25% annual energy savings for products vs. the first product supplied in 1993²

Cast resin transformers produced with a circular economy approach

Sources: Thyssenkrupp, Management information

Note: 1. Based on an allocation method

1. Refers to energy savings in KWh/year for 1,500 kVA transformer; for the calculation of the saved load loss, assumes a transformer loaded to 80% of the full load for 24h/day working 365 days/year

Outlook & take aways

Markus Laesser | Group CEO

Well-established leadership positions in selected products and geographies provide a platform to replicate success in attractive new end markets and geographies

High quality products delivered through a dynamic, customer-centric business model, underpinning the "right to win"

Targeted accelerated growth and profitability improvement through growing demand and commercial and operational excellence

Credible roadmap of ongoing & future upside levers

Focus on what we do best and offer our engineering expertise, quality and reliability to new markets.

With our ongoing measures to boost productivity, we have built a solid foundation for commercial success and accelerate growth.

We expect continued strong demand over the long term, driven by megatrends such as decarbonization, decentralization and modernization of power grids.

Execution of our growth strategy.

1 2 3 4

	Leading market share positions across selected products & geographies
65%	Oil distribution transformers
Oil distribution transformers	30%
30%	40%
Cast resin transformers	Small power transformers
30%	45%
Cast resin transformers	Cast resin transformers
25%	35%
Cast resintransformers	Cast resin transformers
Souns: 1853 Orsup market clais and Management aslinaries

Our leading market shares in selected countries and products, provide us with a platform for replicating our success in new markets.

Q&A

Thank you for your attention.

We are now happy to answer your questions.

Financial Calendar

Annual General Meeting 28 May 2024 Trading update half-year sales 24 July 2024 Half-year results 2024 11 September 2024 Capital Markets Day 31 October 2024

Contacts

Investor Relations: Media:

Doris Rudischhauser Nicolas Weidmann Phone: +41 79 410 81 88 Phone: +41 79 372 29 81 Email: investors@the-rsgroup.com Email: media@the-rsgroup.com

17.04.

36

Presentation name (Insert > Header

and footer)

2024

Appendix

A
B
C
D
E
F
G

adjusted EPS at 1.0 CHF

previous year 2022: «old» R&S group without acquired VT5

A Net sales

• adjusted net sales without SERW 201.6 MCHF (+40%)
• small FX impact: based on prior year avg. exchange rates net sales would have been 1.9% higher; mainly due to stronger CHF vs. EUR
• B Semi-/ finished goods decreased in 2023 as all plants, except ZREW, were able to reduce their semi/ finished goods
• C Material costs decreased continuously in 2023 and with good availability of key materials. Low materials ratio at 57% at the end of the year (previous year 68%).
• D Personnel costs in relation to sales down from previous year from 21% to 18%, but higher in absolute terms (+17.8%) due to salary inflation (especially in Poland) and increase number of employees to address business growth and strategic expansion of capacities (new plant in Poland)
• E Other operating expenses includes write-off of historic goodwill (5.52 MCHF) and the disposed net assets (4 MCHF) of SERW

Financial result listing costs

F

• According to FER 24/22, the ransaction costs for «going public» may not be offset against equity, but must be reported as expenses in «Financial Expenses»
• For 2024, the costs of «being public» will be recorded in operating expenses .
• G Tax expenses increased due to higher profit and continued consumption of tax loss carryforwards (most of the available losses were consumed in 2023) and expired tax exemptions for Tesar PL.

Appendix Consolidated Balance Sheet per 31 Dec 2023

A
A

Increase of cash due to intensive NWC-Mgmt, incl. high advances from customers A

• B In connection with the IBC: 9.8 MCHF short-term bank loans and 30 MCHF long-term liabs.
• C R&S International Holding AG as accounting acquirer absorbed the net liabilities of VT5 Acquisition Company AG, which subsequently changed its name to R&S Group Holding AG. The Goodwill was determined as difference between the liabilities assumed and the net assets acquired and amounts to CHF 17.7 million. In accordance with Swiss GAAP FER 30, the Goodwill was offset with equity.
  • See detailed calculation on next slide or in notes 29

	B
A	A
B
	B
C
D
E
F
	C

previous year 2022: «old» R&S group without acquired VT5

R&S International Holding AG as accounting acquirer absorbed the net liabilities of VT5 Acquisition Company AG, which subsequently changed its name to R&S Group Holding AG. The Goodwill was determined as difference between the liabilities assumed and the net assets acquired and amounts to CHF 17.7 million. In accordance with Swiss GAAP FER 30, the Goodwill was offset with equity.

	2023
	TCHF
Assets acquired at 13.12.2023	23.232
Cash	3'741
Own shares	10'000
Other receivables and prepaid expenses	9'491
Liabilities assumed at 13.12.2023	40'911
Bank loan	38'700
Accounts payable and accruals	2'211
Consideration paid (neither cash nor shares)	O
Goodwill at 13.12.2023, offset with retained earnings	17'678

	Share capital	Capital reserve	Own shares	Exchange rate impact	Accumulated losses	Total
	TCHF	TCHF	TCHF	TCHF	TCHF	TCHF
of 31.12.2021	44'822	રે.83ર	0	-1'034	-6 624	42'999
profit 2022					4'252	4'252
hange rate impact				-1'487		-1'487
of 31.12.2022	44'822	5.835	0	-2'521	-2'372	45764
profit 2023					11 634	11 634
hange rate impact				-1 068		-1 068
lassification due to business combination	-41'929	41'929				0
n shares acquired in business nbination			-10'000			-10'000
setting of Goodwill from business nbination					-17678	-17678
ycling of SERW goodwill1					55720	5'520
ycling of SERW Cumulative currency slation reserve					-984	-984
re Based Payment		651				651
SCORE STARE 7-	Coole	10' 10' 14 C	חתמומים	00216	000	050000

Appendix Consolidated Cash Flow Statement 2023

A A	customer claim
B	B
	C
D
	D
E
	E
F
	business)
	F
F
	G
G

previous year 2022: «old» R&S group without acquired VT5

• ^A mainly attributable to higher tax provisions as a result of the overall increase of the business volume and operational profit, higher accrual for bonus and
• B ^B write-off of recycled goodwill from acquisition of SERW, initially directly offset against equity, (refer to Note 30)
• C C increased accounts receivables as a result of the overall increase in operations
  • D including CHF 8 millions of prepaid IBC transaction costs (listing expenses)
  • E positive impact of increase in advance payments from customers (CHF 6.7 million in other current liabilities and CHF 8 million in net inventories (WIP PoC business)
  • F Capex in new core cutting machines in Italy, new vertical winding machines in Poland, SAP- and IT-upgrades etc.
  • decrease in short-term financial liabilities mainly attributable to reduction of bank overdrafts in Italy (CHF 7.0 million) G