ATOSS Software AG — Interim / Quarterly Report 2021

Aug 13, 2021

ATOSS|2021 HALF-YEAR REPORT

Dear Shareholders, Ladies and Gentlemen,

In the first half of 2021, ATOSS Software AG maintained its growth trajectory and the successful development of its range of cloud solutions in an impressive manner, while at the same time laying down crucial, strategic markers for strengthening the Group's global focus and further expansion of its cloud business.

The current development of the business is evidence of the high, undiminished demand and relevance of digital solutions for demand-optimized workforce scheduling in professional corpo rate management, further accelerated by digital transformation in all walks of life and business processes. In an age of globalization, digitization and transformation, the optimum deployment of the available workforce is of strategic importance for companies. The dynamic organizations of tomorrow need to be built upon agile personnel infrastructures, smooth processes and new forms and ways of work. And it is crucial to be able to tap the potential of valuable working time to the fullest extent. This is precisely the strength of ATOSS and its innovative workforce management solutions.

For this reason, the newspaper DIE WELT also perceives us as one of the key players in the design of working environments in the 21st century.* We are particularly delighted by this recognition in the global software market, as it represents impressive evidence that ATOSS' aspirations and vision – to design the transformation of the world of work for the benefit of companies, employees and society – are already perceived as reality in society today. Not only on a domestic level but also on a global scale. Around 10,000 customers are now planning and managing more than 3.5 million employees in over 50 countries with our ATOSS solutions.

ATOSS Software AG is also set up for further growth with its first tier of management. Accordingly, effective as from April 1, we appointed Dirk Häußermann to the Management Board as the new Co-CEO for the globalization and marketing areas and Pritim Kumar Krishnamoorthy as the new CTO as from July 1. These seasoned professionals both draw on many years of experience in the software sector gained with renowned, globally active companies. This Management Board structure will put us in a position to pack an even more powerful punch in our target markets, enabling us to continue driving our globalization strategy and implementation of cloud trans formation on a sustainable basis.

The conditions for doing so are excellent. This is reflected not least in our latest key indicators for the order book: For example, the key metric for managing the cloud – Annual Recurring Revenue (ARR for short) – increased by 74 percent as of June 30, 2021, coming in at EUR 18.5 million

LETTER TO SHAREHOLDERS

Andreas F. J. Obereder CEO ATOSS Software AG

6

(previous year: EUR 10.6 million). Furthermore, the Group succeeded in significantly expanding the proportion of orders received for Cloud & Subscriptions in total orders for software to over 70 percent. By comparison: in fiscal 2020, the share of cloud orders received was still at 42 percent. Consequently, ATOSS is continuing to pursue the cloud transformation of its business model.

ATOSS Software AG is and remains a growth company with high stability, a successful business model and great innovative energy.

Also against the backdrop of the progress made in cloud transformation, which is significantly above budget, the Management Board is maintaining its forecast for the whole of 2021, already increased at the start of the year. This forecast looks for sales to grow to EUR 95 million. Furthermore, the company is budgeting an EBIT margin of 27 percent, taking account of the capital expenditure planned, particularly in sales and distribution to open up new markets and in development capacity.

Best regards

Andreas F. J. Obereder CEO

Dirk Häußermann Co-CEO

Pritim Kumar Krishnamoorthy CTO

Christof Leiber CFO

1. half-year 1. half-year

Economic environment

Economic activity in Germany enjoyed a noticeable recovery in the second quarter of 2021, following on from a 1.8 percent drop in GDP in the first quarter in the wake of the third wave of the pandemic. In view of the vaccination progress made and the associated decline in infection rates, the economy can be expected to pick up pace again as the year progresses.

The estimates of the digital association Bitkom, whose business sentiment index on the current state of business has shown positive growth in the last few months also support this confidence. There was a particularly sharp rise in May in the expectations of the ICT companies surveyed for the coming six months and in the Bitkom-ifo Digital Index which is calculated using the estimate of business position and business expectations. The Digital Index rose by 2.3 points in May 2021 by comparison with the previous month, reaching 34.2 points, its highest level for 32 months.

The company

The growth in sales and earnings in the first half of 2021 underlines continued customer interest and therefore also the strong competitive position of ATOSS within the workforce management field.

The long-term development of the key performance indicators remains very pleasing. A sixteenth record year in succession looks likely.

Total Sales (Mio. EUR)

EBIT (Mio. EUR)

Software Sales (Mio. EUR)

CONSOLIDATED OVERVIEW AS PER IFRS: HALF-YEAR COMPARISON IN KEUR

8 9 * In accordance with IAS 33.64, earnings per share (EPS) have been retrospectively adjusted for the previous period due to the share split carried out in June 2020.

01/01/2021 - 06/30/2021	Proportion of total sales	01/01/2020 - 06/30/2020	Proportion of total sales	Change 2021 to 2020
45,726	100%	40,635	100%	13%
30,922	68%	26,154	64%	18%
8,077	18%	7,398	18%	9%
14,084	31%	12,998	32%	8%
8,761	19%	5,757	14%	52%
12,119	27%	11,642	29%	4%
2,059	5%	1,788	4%	15%
625	1%	1,051	3%	-41%
13,851	30%	13,343	33%	4%
11,976	26%	11,532	28%	4%
11,995	26%	11,863	29%	1%
8,258	18%	8,252	20%	0%
8,054	18%	11,852	29%	-32%
33,808		30,747		10%
1.04		1.04		0%
588		524		12%

CONSOLIDATED OVERVIEW AS PER IFRS: QUARTERLY COMPARISON IN KEUR

	Q2/21	Q1/21	Q4/20	Q3/20	Q2/20
Sales	22,775	22,951	24,932	20,486	20,885
Software	15,562	15,360	16,736	13,156	14,325
Licenses	3,708	4,369	6,090	3,021	4,684
Maintenance	7,222	6,862	6,868	6,734	6,582
Cloud & Subscriptions	4,631	4,130	3,779	3,401	3,059
Consulting	5,831	6,288	6,580	5,881	5,482
Hardware	1,056	1,003	1,162	965	565
Others	326	299	453	485	512
EBITDA	6,898	6,953	9,705	6,711	7,319
EBIT	5,815	6,161	8,808	5,825	6,425
EBIT margin in %	26%	27%	35%	28%	31%
EBT	5,856	6,139	8,588	5,747	6,694
Net profit	4,113	4,145	5,795	3,667	4,826
Cash flow	960	7,094	744	10,610	5,832
Liquidity (1/2)	33,808	46,567	40,488	40,680	30,747
EPS in euro (3)	0.52	0.52	0.73	0.46	0.61
Employees (4)	588	571	557	540	524

FACTS OVERVIEW

1. half-year

2. (1) Cash and cash equivalents, other current and non-current financial assets (sight deposits, gold) as of the qualifying date, adjusted to exclude borrowings (loans)

3. (2) Dividend of EUR 1.67 on 05/05/2021 (KEUR 13,282). As a result of the share split carried out in June 2020, the dividend paid in 2020 has been adjusted retrospectively for comparison purposes: Dividend of EUR 1.275 per share on 06/03/2020 (KEUR 10,140).

(3) In accordance with IAS 33.64, earnings per share (EPS) have been retrospectively adjusted for the previous period due to the share split

carried out in June 2020.

(4) At the end of the quarter/year

9.3

9.9

10.9

11.7

13.1

x

14.5

16.6

18.5

22.0

26.2

30.9

11 12 13 14 15 16 17 18 19 20 21

1. half-year

CONSOLIDATED OVERVIEW PURSUANT TO IFRS QUARTERLY COMPARISON IN EUR

	Q2/21	Q1/21	Q4/20	Q3/20	Q2/20
Share price high (1)	186.4	197.0	159.5	139.5	105.0
Share price low (1)	152.0	147.5	116.0	95.6	62.75
Share price at the end of the quarter (1)	186.4	161.5	158.0	133.5	103.0
Dividend per share (1/3)	1.67	0	0	0	1.28
Cash flow per share (1)	0.12	0.89	0.09	1.33	0.73
Liquidity per share (1/2/3)	4.25	5.86	5.09	5.12	3.87
EPS (1)	0.52	0.52	0.73	0.46	0.61
EPS (diluted) (1)	0.52	0.52	0.73	0.46	0.61

(1) To enhance comparability, the figures shown are after the share split

(2) Cash and cash equivalents, other current and non-current financial assets (deposits, gold) as of the reporting date, adjusted to exclude borrowings (loans)

(3) Dividend of EUR 1.67 on 05/05/2021 (KEUR 13,281) and dividend of EUR 2.55 on 06/03/2020 (KEUR 10,140)

SHARE PRICE DEVELOPMENT: 01/2010 – 06/2021

ATOSS share hits new heights in the first half of 2021

The ATOSS share set a new record in the first half of 2021 and has therefore continued its positive long-term development. The share traded at EUR 197.0 at the end of January 2021 – its highest price since the IPO in 2000 – and closed on June 30, 2021 at EUR 186.4.

The ATOSS share also looks strong across a longer time frame. From 2010 to the end of June 2021, the share price has risen by 2,968 percent. By way of comparison, the Software Performance Index DAX sub-sector was only able to grow by 346 percent over the same period. The SDAX, on which ATOSS Software AG has been traded since July 1, 2021, climbed 351 percent over the same period. The ATOSS stock has therefore significantly outperformed both indices and grown faster than the market by an appreciable factor.

10 11 * For greater comparability, the figures shown are after the stock split

Dividend policy

In January 2020, the Management Board decided to propose to the Supervisory Board a sustainable increase in the company's previous distribution ratio from 50 to 75 percent of consolidated earnings per share. Otherwise, the dividend policy that has been in place since 2006 remains unchanged. This policy follows the principle of dividend continuity according to which this year's dividend should not fall below that of the previous year and should be increased if this is possible with a distribution ratio of now 75 percent (previously 50 percent) with respect to consolidated earnings per share. By adjusting its dividend policy in the previous year, ATOSS Software AG is thereby maintaining the sustainable participation of shareholders in the success of the company. A cumulative amount of EUR 15.83 per share has been paid to shareholders since the company went public, including several special dividends.

Given this distribution policy – in combination with highly positive earnings growth – ATOSS will retain its positioning in future as a technology company offering an attractive and reliable dividend return, as well as consistently positive development, plus the growth opportunities on offer.

INVESTOR RELATIONS

ATOSS DIVIDEND IN EUR

Shareholder structure

The founding family holds 51.2 percent of the shares in ATOSS Software AG. Since December 6, 2012, Mr. Andreas Obereder has held 50.0000025 percent of the shares indirectly via AOB Invest GmbH, of which he is sole owner.

Admission to the SDAX

ATOSS Software AG was admitted to Deutsche Börse AG's SDAX at the start of trading on July 1, 2021. The SDAX comprises 70 companies listed on the regulated market of the Frankfurt Stock Exchange and ranking below the MDAX in terms of size and liquidity. Selection is based on the free float market capitalization and 12-month order book sales. The SDAX is weighted by free float market capitalization although no company may make up more than 10 percent of the index.

Analysts praise impressive progress with cloud transformation

Besides new records for sales and earnings in the first half of the year, ATOSS particularly impressed the analysts from Warburg Research and Hauck & Aufhäuser with respect to the expansion of its cloud business. The proportion of orders received for Cloud & Subscriptions in total orders received jumped to over 70 percent, and Annual Recurring Revenue in the cloud increased by 74 percent to EUR 18.5 million (previous year: EUR 10.6 million). Consequently, ATOSS is continuing to successfully drive the cloud transformation of its business model. Against this background, the share price target has already been raised twice this year: According to the current analysts' evaluation from Warburg Research, the ATOSS stock is rated as a "Buy" with a target of EUR 215. According to the analysis published by Hauck & Aufhäuser on July 27, 2021, ATOSS stock is rated "Buy" with a target price of EUR 204.

For further information, please go to: www.atoss.com/en-gb/investor-relations/atoss-stock

1. Business and operating conditions: Economic recovery accelerates

Growth of the global economy slowed at the start of the year, primarily due to the coronavirus pandemic. In the meantime, global GDP has now recovered from its dramatic collapse in the spring of 2020 and was recently almost back to its pre-crisis level.1) The effects of the pandemic were largely limited to the service sectors. Industrial output and global trade, on the other hand, continued to expand strongly even if the upswing was partly constrained by supply bottlenecks and logistics problems. As a result, there have already been sharp increases in the price of commodities, intermediate goods and transportation services, which have fed through to a noticeable rise in consumer prices.2)

Economic growth in the Eurozone followed a similar path and, according to economic researchers, can be expected to expand strongly over the summer months and surpass its pre-crisis levels by the end of 2021.2) Nevertheless, the autumn will be particularly decisive for the trajectory of further growth as only then will it become clear to what extent vaccinations can prevent the virus and its mutations from spreading.3)

In Germany, too, the economy has picked up pace and, according to the latest studies, it will continue to grow or even exceed its pre-crisis level.4) In this context, the German high-tech sector views the future with particular confidence. This is evidenced by the assessment of the digital association Bitkom in May 2021. According to this assessment, the Bitkom-ifo Digital Index, calculated using business position and business expectations, rose by 2.3 points over the previous month in May 2021, reaching 34.2 points and thus its highest level for 32 months.5)

Against this backdrop, ATOSS recorded strong business development in the first half of 2021, with sales growth of 13 percent as well growth in operating profits (EBIT) of 4 percent. Together with the successful expansion of the cloud business, as a result of which the main control parameter for this sector – Annual Recurring Revenue (ARR for short) – increased by 74 percent to EUR 18.5 million (previous year: EUR 10.6 million), ATOSS is outstandingly positioned to maintain its strategic growth trajectory.

GROUP MANAGEMENT REPORT

¹⁾ ifo economic forecast – 06/16/2021: ifo economic forecast summer 2021: German economy caught between opening s and supply bottlenecks

²⁾ ifw Kiel Institute for the World Economy; Kiel Economic Reports: Global Economy in Summer 2021 (No. 79 (2021IQ2))

³⁾ Austrian National Bank: Recovery of Global Economy accelerates (Konjunktur aktuell (Economy Update) – June 2021)

⁵⁾ Bitkom-ifo Digital Index: May 2021: Business climate continues to trend upwards

2. Earnings situation: Strong performance in the first half of the year

In the first half of the 2021 financial year, ATOSS generated overall sales growth of 13 percent to EUR 45.7 million (previous year: EUR 40.6 million). Sales in the core software business posted double-digit growth of 18 percent, reaching EUR 30.9 million (previous year: EUR 26.2 million). This equates to a share of overall Group sales of 68 percent (previous year: 64 percent). The largest boost to growth within software revenues came from recurring sales with cloud solutions, which jumped 52 percent to EUR 8.8 million (previous year: EUR 5.8 million). The growth in software maintenance which has been consistently positive for years, also continued. Sales here rose by 8 percent to EUR 14.1 million (previous year: EUR 13.0 million). Overall, the proportion of recurring revenue in total sales – and thus the central, key factor in the company's future growth – continued to grow in line with the budget and has now reached 50 percent for the first time (previous year: 46 percent). Sales from consulting services showed moderate growth of 4 percent to EUR 12.1 million (previous year: EUR 11.6 million) – based on the figure for the previous year which was already very high.

Notwithstanding the significant year-on-year increase in expenses – particularly for R&D as part of the continuous refinement of ATOSS software solutions as well as higher personnel costs resulting from its international expansion of capacity in Sales – the return on sales relative to operating earnings (EBIT) of EUR 12.0 million (previous year: EUR 11.5 million) remains at a high level of 26 percent (previous year: 28 percent).

Earnings before taxes (EBT) stand at EUR 12.0 million (previous year: EUR 11.9 million) as of June 30, 2021. After deducting taxes, this results in net income of EUR 8.3 million (previous year: EUR 8.3 million). As a result, earnings per share totaled EUR 1.04 (previous year: EUR 1.04).

Thanks to the successful expansion of its cloud business, the crucial metric for controlling the cloud – Annual Recurring Revenue (ARR for short) – increased significantly by 74 percent to EUR 18.5 million (previous year: EUR 10.6 million). ARR stands for the sales generated by the company within the next 12 months on the basis of monthly cloud usage fees applicable on the closing date.

3. Net assets and financial position

In the first six months of the year, cash flow from operations totaled EUR 8.1 million (previous year: EUR 11.9 million). Liquidity (cash and cash equivalents less borrowings) increased compared with the previous year period from EUR 13.6 million to EUR 14.1 million. The overall position comprising liquidity and other current and non-current financial assets adjusted for borrowings (e.g. loans) increased from EUR 30.7 million to EUR 33.8 million in spite of the dividend payment of EUR 13.3 million (EUR 1.67 per share) at the beginning of May 2021. Liquidity per share including other current and non-current financial assets and adjusted for borrowings stood at EUR 4.25 on June 30, 2021 (previous year: EUR 3.87).

The principal factors impacting positively on cash flow from operations include net earnings and high cash flows from major projects. Effects that reduced cash flow derived primarily from the formation of trade receivables.

The negative cash flow from investment activities results from the acquisition of fixed assets (EUR 0.4 million; previous year: EUR 0.4 million) and payments for the acquisition of financial assets (EUR 5.0 million; previous year: EUR 3.9 million). Payments received from the reflow of investments in financial assets in an amount of EUR 2.4 million (previous year: EUR 0 million) had a positive impact on the cash flow from investment activities.

Besides cash outflows from investment activities, the payment of a dividend of EUR 1.67 per share (previous year: EUR 1.28 per share) – total amount distributed EUR 13.3 million (previous year: EUR 10.1 million) – and the repayment of lease liabilities in an amount of EUR 1.3 million (previous year: EUR 1.3 million) had a negative effect on cash and cash equivalents. The sale of 4 percent of the shares in ATOSS Aloud GmbH led to an increase in cash and cash equivalents of KEUR 211 (previous year: EUR 0).

As of June 30, 2021, ATOSS had an equity ratio of 42 percent (previous year: 40 percent).

Thanks to the consistently excellent earnings situation overall and sound asset position, the company expects its ability to meet its financial commitments at any time to remain unchanged in the future.

4. Product development

Research and development remains an important component of the ATOSS growth strategy, with the goal of further extending the company's strong position as a technological leader in workforce management moving forward. Research and development costs in the first six months rose by 16 percent compared with the previous year and stood at EUR 8.2 million as of June 30, 2021 (previous year: EUR 7.0 million). R&D costs as a proportion of overall sales amounted to 18 percent (previous year: 17 percent).

The company continues to refrain from capitalizing the expense of developing product innovations. All expenditure for this purpose is recognized in the income statement in the period in which it is incurred.

5. Employees

The number of employees has risen from 524 in the previous year to 588. As of June 30, 2021, ATOSS is employing 209 members of staff in Development (previous year: 194), 171 in Consulting (previous year: 159), 129 in Sales and Marketing (previous year: 92) and 79 in Administration (previous year: 79).

Personnel costs for the current financial year totaled EUR 23.7 million on June 30, 2021 (previous year: EUR 20.1 million).

6. Risks associated with future development

No material changes to the company's risk structure occurred with regard to the description provided in the consolidated financial statements as of December 31, 2020.

The market risk associated with financial assets available for sale largely concerns the fair value of the investment funds and the company's gold holdings, which stood at EUR 10.4 million and EUR 2.6 million respectively as of June 30, 2021, and this risk is dependent on the performance of the share price and movements in the gold price moving forward.

7. Outlook

ATOSS Software AG can look back on an exceptionally successful first half of the year with new records set in sales and earnings. Together with the consistently high figures in the order book which are primarily characterized by the successful expansion of cloud business in the first half of the year and consequently have played a pivotal role in raising the share of recurring revenue, ATOSS has an excellent platform for maintaining its strategic growth trajectory. For this reason, the Management Board is standing by its forecast for the whole of 2021, already increased at the start of the year. This forecast calls for sales to grow to EUR 95 million and an EBIT margin of at least 27 percent.

CONSOLIDATED BALANCE SHEET AS AT 06/30/2021

06/30/2021	12/31/2020
183,043	275,677
3,652,810	3,765,608
9,062,011	9,714,401
1,281,396	1,338,414
1,392,769	1,579,025
15,572,030	16,673,125
0	3,027
12,937,973	8,861,514
19,073,769	16,382,953
3,206,712	2,624,217
14,123,650	23,408,265
49,342,104	51,279,976
64,914,134	67,953,101

Liabilities (EUR)	06/30/2021	12/31/2020
Equity
Subscribed capital	7,953,136	7,953,136
Capital reserve	-661,338	-661,338
Equity deriving from unrealized profits/losses	-3,089,638	-3,089,638
Unappropriated net income	23,476,792	28,179,727
Equity attributable to the equity holders of the parent company	27,678,952	32,381,887
Non-controlling interests	-109,013	-69,042
Total equity	27,569,939	32,312,845
Non-current liabilities
Pension provisions	6,905,665	6,838,641
Non-current leasing liabilities	9,216,121	9,914,645
Deferred tax liabilities	98,755	101,897
Total non-current liabilities	16,220,541	16,855,183
Current liabilities
Trade accounts payable	937,243	538,817
Contractual liabilities	6,130,505	3,723,615
Current leasing liabilities	344,082	304,815
Other current financial liabilities	2,438,782	2,352,423
Other current non-financial liabilities	9,206,983	10,054,047
Tax provisions	1,962,199	1,707,495
Other provisions	103,861	103,861
Total current liabilities	21,123,654	18,785,073
Total equity and liabilities	64,914,134	67,953,101

CONSOLIDATED INCOME STATEMENT FROM 01/01/ TO 06/30/2021

	Quarterly report		6-monthly report
EUR	04/01/2021 - 06/30/2021	04/01/2020 - 06/30/2020	01/01/2021 - 06/30/2021	01/01/2020 - 06/30/2020
Sales revenues	22,774,742	20,884,578	45,725,742	40,634,996
Cost of sales	-6,269,837	-5,386,192	-12,811,837	-11,512,985
Gross profit on sales	16,504,905	15,498,385	32,913,905	29,122,011
Distribution costs	-4,173,665	-3,405,159	-8,199,545	-6,790,352
Administration costs	-2,234,361	-1,868,344	-4,373,651	-3,658,554
Research and development costs	-4,099,600	-3,641,479	-8,154,126	-7,044,649
Other operating income	12,555	20,721	43,349	113,706
Other operating expenses	-61,344	-48,510	-71,502	-123,819
Net impairment on financial assets	-134,242	-130,736	-182,852	-86,411
Operating profit	5,814,248	6,424,879	11,975,578	11,531,931
Interest and similar income	196,992	326,596	207,774	441,211
Interest and similar expenses	-155,214	-57,921	-188,685	-110,154
Earnings before taxes	5,856,025	6,693,554	11,994,667	11,862,989
Taxes on income and earnings	-1,742,568	-1,867,443	-3,736,568	-3,610,710
Net income	4,113,458	4,826,111	8,258,099	8,252,279
Attributable to:
Equity holders of the parent:	4,113,458	4,826,111	8,258,099	8,252,279
Non-controlling interests:	0	0	0	0
Earnings per share (undiluted)*	0.52	0.61	1.04	1.04
Earnings per share (diluted)*	0.52	0.61	1.04	1.04
Average shares Outstanding (undiluted)*	7,953,136	7,953,136	7,953,136	7,953,136
Average shares Outstanding (diluted)*	7,953,136	7,953,136	7,953,136	7,953,136

CONSOLIDATED CASH FLOW STATEMENT FROM 01/01/2021 TO 06/30/2021

EUR	01/01/2021 - 06/30/2021	01/01/2020 - 06/30/2020
Earnings before taxes	11,994,667	11,862,989
Depreciation	1,875,473	1,811,334
Interest and similar income	-207,774	-441,211
Interest and similar expenses	188,685	110,154
Income from the disposal of fixed assets	1,851	335
Changes in net current assets
Trade receivables	-4,076,459	-302,819
Inventories and other non-financial assets	-845,557	-224,237
Other assets	43,714	30,752
Trade accounts payable	398,426	-487,684
Other current financial and non-financial liabilities	-760,705	-601,514
Other provisions	0	100,000
Contractual liabilities	2,406,890	2,861,723
Interest received	54,656	19,686
Interest paid	0	0
Income taxes received	344,175	295,852
Income taxes paid	-3,364,428	-3,183,517
Cash flow generated from operating activities (1)	8,053,613	11,851,842
Cash flow from investment activities
Expenditure for the purchase of tangible and intangible assets	-384,575	-444,700
Expenditure for the purchase of financial assets	-4,956,000	-3,850,000
Proceeds from the sale of financial assets	2,350,000	0
Cash flow generated from investment activities (2)	-2,990,575	-4,294,700
Cash flow from financing activities
Redemption element leasing liability IFRS 16	-1,299,578	-1,230,860
Interest element leasing liability under IFRS 16	-47,070	-62,140
Dividends paid	-13,281,737	-10,140,248
Proceeds from the sale of non-controlling interests with no change of control	280,732	0
Cash flow generated from financing activities (3)	-14,347,653	-11,433,249
Changes in cash and cash equivalents – total (1) to (3)	-9,284,615	-3,876,108
Cash and cash equivalents at the beginning of the period	23,408,265	17,523,701
Cash and cash equivalents at the end of the period	14,123,650	13,647,593

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FROM 01/01/ TO 06/30/2021

EUR	01/01/2021 - 06/30/2021	01/01/2020 - 06/30/2020
Net income for the period	8,258,099	8,252,279
Components not reallocated in profit or loss	0	0
Other comprehensive income for the period after taxes	0	0
Comprehensive income after taxes	8,258,099	8,252,279

STATEMENT OF CHANGES IN CONSOLIDATED EQUITY AS OF 06/30/2021

			Equity attributable to the owners of the parent company
EUR	Subscribed capital	Capital reserve	Equity deriving from unrealized gains/losses	Unappropriated net income	Non-controlling interests	Total
01/01/2020	3,976,568	-661,338	-3,056,418	24,582,473	-69,042	24,772,243
Period net income				8,252,279		8,252,279
Other comprehen sive income of the period			0			0
Total comprehen sive income of the period			0	8,252,279		8,252,279
Capital increase from company funds	3,976,568			-3,976,568		0
Dividend				-10,140,248		-10,140,248
06/30/2020	7,953,136	-661,338	-3,056,418	18,717,935	-69,042	22,884,274
01/01/2021	7,953,136	-661,338	-3,089,638	28,179,727	-69,042	32,312,845
Period net income				8,258,099		8,258,099
Other comprehen sive income of the period			0			0
Total comprehen sive income of the period				8,258,099		8,258,099
Dividend				-13,281,737		-13,281,737
Transactions with non-controlling interests				320,703	-39,971	280,732
06/30/2021	7,953,136	-661,338	-3,089,638	23,476,792	-109,013	27,569,939

ATOSS TEAM ANIL | INTERNATIONAL SALES * Adjustment as of 01/01/2019 due to first-time application of IFRS 16 Leases

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. General

This quarterly report has been prepared in accordance with the International Financial Reporting Standards (IFRS) in compliance with IAS 1.14. In particular, the report complies with the provisions contained in IAS 34 "Interim Financial Reporting". The requirements contained in the German Accounting Standard (DRS) no. 6 regarding interim reporting have also been fulfilled.

In accordance with IAS 34.20, these statements include a consolidated balance sheet, consolidated income statement, consolidated statement of comprehensive income, consolidated cash flow statement, a statement of changes in consolidated equity and explanatory notes to the consolidated statements.

The same financial accounting, measurement and computation methods have been applied as in the annual financial statements as of December 31, 2020.

The Management Board is convinced that the net assets, financial position and results of operations portrayed in the present half-year financial statements as well as the cash flows convey a true and fair picture of the company's financial position. This interim report has not undergone an auditors' review or statutory audit.

2. Reporting period

These consolidated financial statements were prepared as of June 30, 2021 for the reporting period from 1/1/2021 to 6/30/2021.

3. Currency

All figures stated are in euros. Amounts are rounded up to whole euro units.

4. Consolidated group

In addition to the parent company, ATOSS Software AG, Munich, these consolidated financial statements as of June 30, 2021 also include all subsidiary companies:

ATOSS CSD Software GmbH, Cham, Germany (100%) ATOSS Software Ges. mbH, Vienna, Austria (100%) ATOSS Software AG, Zurich, Switzerland (100%) ATOSS Software S.R.L., Timisoara, Romania (100%) ATOSS Aloud GmbH, Munich, Germany (93%)* ATOSS North America Inc., West Hollywood, USA (100%)

These companies are fully consolidated.

²⁶ 27 * On April 29, 2021, ATOSS Software AG, Munich sold 4 percent of its shares in ATOSS Aloud GmbH, Munich with economic effect from January 1, 2021.

5. Financial liabilities

As of June 30, 2021, the contractual maturities of non-derivative financial liabilities of the Group were as follows:

7. Sales revenues

The company's sales revenues in the first half of the year are composed as follows:

EUR	01/01/2021 - 06/30/2021	01/01/2020 - 06/30/2020
Licenses	8,077,179	7,398,261
Maintenance	14,083,610	12,998,212
Cloud & Subscription	8,761,303	5,757,180
Total software	30,922,092	26,153,653
Consulting	12,119,399	11,642,221
Hardware	2,058,777	1,788,168
Miscellaneous	625,474	1,050,954
Total sales revenues	45,725,742	40,634,996

The geographic breakdown of sales revenues was as follows:

EUR	01/01/2021 - 06/30/2021	01/01/2020 - 06/30/2020
Domestic	38,491,455	35,268,490
Abroad	7,234,287	5,366,506
of which Austria	3,237,270	2,210,610
of which Switzerland	2,176,467	1,922,126
of which other countries	1,820,550	1,233,770
Total sales revenues	45,725,742	40,634,996

The sales revenues were distributed between product groups as follows:

EUR	01/01/2021 - 06/30/2021	01/01/2020 - 06/30/2020
Sales revenues
ATOSS Staff Efficiency Suite (ASES) and ATOSS Startup Edition (ASE)	38,764,801	33,840,889
ATOSS Time Control (ATC)	6,217,601	6,378,648
Crewmeister	743,340	415,459
Total sales revenues	45,725,742	40,634,996

Contractual maturities of financial liabilities	Up to 3 months EUR	3 months to 1 year EUR	Over 1 year EUR	Total contractual cash flows EUR	Carrying amount of liabilities EUR
As of 06/30/2021
Trade accounts payable	937,243	0	0	937,243	937,243
Lease liabilities	641,778	1,705,495	7,682,686	10,029,959	9,560,203
Total non-derivatives	1,579,021	1,705,495	7,682,686	10,967,202	10,497,446
As of 06/30/2020
Trade accounts payable	430,594	0	0	430,594	430,594
Lease liabilities	606,466	1,610,319	8,976,797	11,193,582	10,729,053
Total non-derivatives	1,037,060	1,610,319	8,976,797	11,624,176	11,159,647

6. Changes in equity

The development of equity can be derived from the statement of changes in consolidated equity.

The share capital of ATOSS Software AG as of June 30, 2021 amounted to EUR 7,953,136 (12/31/2020: EUR 7,953,136) and is divided into 7,953,136 bearer shares. Each share represents EUR 1.00 of the share capital.

On April 29, 2021, ATOSS Software AG, Munich sold 4 percent of its shares in ATOSS Aloud GmbH, Munich with economic effect from January 1, 2021 ("economic effective date") for EUR 280,732. The carrying amount of the 3 percent, non-controlling interests in ATOSS Aloud GmbH as of 1/1/2021 amounted to EUR -69,042. The Group recognized a decrease in its non-controlling interests in an amount of EUR 39,971 and an increase in the equity attributable to the owners of the parent company of EUR 320,703.

8. Personnel expenses

Consolidated personnel expenses as of June 30, 2021 broke down as follows:

EUR	01/01/2021 - 06/30/2021	01/01/2020 - 06/30/2020
Wages and salaries	20,466,190	17,236,654
Social security contributions and expenditure on retirement pensions and welfare	3,198,624	2,818,159
Total personnel expenses	23,664,814	20,054,813

9. Other operating income and expenses and net impairments on financial assets

Other operating income in an amount of EUR 43,349 (previous year: EUR 113,706) essentially comprises income from exchange rate differentials in an amount of EUR 25,583 (previous year: EUR 71,818) and income from the release of provisions in an amount of EUR 13,432 (previous year: EUR 38,344).

Other operating expenses of EUR 71,502 (previous year: EUR 123,819) largely represent expenses from exchange rate differentials in an amount of EUR 70,265 (previous year: EUR 123,424). Net impairments on financial assets relates to trade receivables in the amount of EUR 182,852 (previous year: EUR 86,411).

10. Financial income and expenses

The financial investment income of EUR 207,774 (previous year: EUR 441,211) relates essentially to income with respect to the valuation of investment funds in an amount of EUR 120,040 (previous year: devaluation expenses of EUR 11,654), income from the revaluation of a fixed-term deposit account in US dollars of EUR 54,655 (previous year: EUR 0) as well as income from the valuation of claims relating to endowment policies in an amount of EUR 31,810 (previous year: EUR 31,433).

As of June 30, 2021, the company recorded financial expenses amounting to EUR 188,685 (previous year: EUR 110,154). These relate essentially to expenses from the devaluation of the company's gold holdings in an amount of EUR 91,680 (previous year: revaluation of EUR 390,080), interest expenses in connection with accounting for lease liabilities under IFRS 16 amounting to EUR 53,699 (previous year: EUR 62,140) as well as interest expenses as part of the pension provision of EUR 43,306 (previous year: EUR 32,646).

11. Tax expenses

Consolidated tax expenses as of June 30, 2021 broke down as follows:

EUR	01/01/2021 - 06/30/2021	01/01/2020 - 06/30/2020
Der Konzern-Steueraufwand stellt sich zum 30. Juni 2020 folgendermaßen dar: Pre-tax earnings pursuant to IFRS	11,994,667	11,862,989
Expected tax charge (2021: 32.47%, 2020: 32.47%)	-3,894,668	-3,851,912
Non-deductible operating expenses	-15,349	-14,978
Tax refunds / payment of tax arrears previous years	0	248,652
Lower tax rates at Group companies and branches	201,460	119,208
Tax losses not previously recognized but now used to reduce the actual tax charge	0	-131,544
Trade tax add-backs	-34,498	0
Miscellaneous	6,487	19,864
Actual Group tax expenses	-3,736,568	-3,610,710

12. Earnings per share

Earnings per share is calculated by dividing the net result of EUR 8,258,099 (previous year: EUR 8,252,279) by the weighted average number of shares outstanding. As of 6/30/2021, an average of 7,953,136 shares were in circulation. Earnings per share in the first half of the year amount to EUR 1.04 (previous year: EUR 1.04) (in accordance with IAS 33.64, earnings per share (EPS) and/or the number of shares have been retrospectively adjusted for the previous period due to the share split carried out in June 2020.

13. Employees

As of June 30, 2021, the company employed 588 members of staff (previous year: 524).

	01/01/2021 - 06/30/2021	01/01/2020 - 06/30/2020
Development	209	194
Consulting	171	159
Sales and Marketing	129	92
Administration	79	79
Total	588	524

14. Management Board

Members of the Management Board as of June 30, 2021:

Chief Executive Officer (CEO)
Member of the Management Board (Co-CEO)
Member of the Management Board (CFO)

15. Supervisory Board

Following a resolution of the Annual General Meeting on April 30, 2021, the Supervisory Board was re-elected and is comprised as follows:

Moritz Zimmermann	Chairman
Rolf Baron Vielhauer von Hohenhau	Deputy Chairman
Klaus Bauer	Member of the Supervisory Board

16. Board member shareholdings

As of June 30, 2021, the following board members held the following volumes of ATOSS shares:

	06/30/2021
Andreas F. J. Obereder	3,976,570
Dirk Häußermann	1,700
Moritz Zimmermann	10,928

The majority shareholder, Andreas F. J. Obereder of Grünwald, Germany, holds 3,976,570 shares representing 50.0000025 percent of the shares in ATOSS Software AG via AOB Invest GmbH, Grünwald, Germany in which he owns 100 percent of the shares.

17. Notifiable participating interests

In the first six months of financial year 2021, the company received the following notification regarding changes in participating interests pursuant to Sections 21ff. of the German Securities Trading Act (WpHG):

On February 25, 2021, Ursula Obereder, Grünwald, sold a 6.04 percent share of the company's share capital.

18. Business relations with closely related persons

The daughter of the Chief Executive Officer is employed on standard market terms in respect of which the company incurred personnel costs in the amount of EUR 34,145 (previous year: EUR 40,579) in the first half of the year.

19. Events after the reporting date

Effective July 1, 2021, Supervisory Board member Mr. Pritim Kumar Krishnamoorthy was appointed to the Management Board as CTO for Product Management, Technology & Development and Cloud Operations. No further reportable events of particular significance have occurred since June 30, 2021.

Responsibility statement

To the best of our knowledge, we assure that, pursuant to the applicable accounting principles for interim reporting, the interim consolidated financial statements convey a true and fair view of the Group's net assets, financial position and results of operations, and that the business development, including the business results and the Group's position, are presented in the interim Group management report in such a way that they convey a true and fair view, and that the key opportunities and risks pertaining to the Group's prospective development in the remainder of the financial year are described.

Munich, August 13, 2021

Disclaimer

This report contains forward-looking statements that are based on the conviction of the Management Board of ATOSS Software AG and reflect current assumptions and estimations. These forward-looking statements are subject to risks and uncertainties. Many facts that cannot currently be predicted may cause the actual performance and earnings of ATOSS Software AG to develop in a different manner. This could, for example, include the non-acceptance of newly introduced products or services, changes in the general economic and business climate, a failure to achieve efficiency and cost-reduction targets or changes in business strategy.

The Management Board is firmly convinced that the expectations embodied in these forward-looking statements are sound and realistic. Should, however, the above-mentioned or other unforeseeable risks materialize, ATOSS Software AG cannot guarantee that the expectations expressed will prove to be correct.

Andreas F. J. Obereder CEO

Dirk Häußermann Co-CEO

Pritim Kumar Krishnamoorthy CTO

Christof Leiber CFO

10/25/2021 Quarterly press release announcing the 9-month financial statements

11/22–24/2021 ATOSS at the German Equity Forum

FINANCIAL CALENDAR

IMPRINT

LOCATIONS

RESPONSIBLE

ATOSS Software AG Rosenheimer Str. 141 h | 81671 Munich | Germany T +49 89 4 27 71 0 | F +49 89 4 27 71 100 internet@atoss.com | www.atoss.com

INVESTOR RELATIONS ATOSS Software AG | Christof Leiber | investor.relations@atoss.com ATOSS Software AG Rosenheimer Straße 141 h | 81671 Munich | Germany T +49 89 4 27 71 0 | F +49 89 4 27 71 100 internet@atoss.com | www.atoss.com

REPRESENTATIONS GERMANY

BERLIN	ATOSS Software AG Pfalzburger Straße 42 10717 Berlin
DÜSSELDORF	ATOSS Software AG Robert-Bosch-Straße 14 40668 Meerbusch
FRANKFURT	ATOSS Software AG Campus Carré Herriotstraße 8 60528 Frankfurt/Main
HAMBURG	ATOSS Software AG Osterbekstraße 90 b 22083 Hamburg
OSNABRÜCK	ATOSS Software AG Westerkappelner Straße 26 49497 Mettingen
STUTTGART	ATOSS Software AG Eichwiesenring 1/1 70567 Stuttgart

REPRESENTATION NETHERLANDS

UTRECHT ATOSS Software AG | Newtonlaan 115 | 3584 BH Utrecht

REPRESENTATION BELGIUM

BRÜSSEL ATOSS Software AG | Rue aux Laines 70 | 1000 Brussels

AFFILIATED COMPANIES GERMANY

CHAM	ATOSS CSD Software GmbH Rodinger Straße 19 93413 Cham
MUNICH	ATOSS Aloud GmbH Rosenheimer Straße 116 b 81669 Munich

AFFILIATED COMPANY AUSTRIA

VIENNA ATOSS Software Ges.m.b.H. | Ungargasse 64-66/3/503 | 1030 Vienna

AFFILIATED COMPANY SWITZERLAND

ZURICH ATOSS Software AG | Luggwegstrasse 9 | 8048 Zurich

AFFILIATED COMPANY ROMANIA

TIMISOARA SC ATOSS Software SRL | Calea Torontalului 69 | 300668 Timisoara