Aumann AG

Quarterly Report • Nov 16, 2018

Quarterly Financial Report 30 September 2018

Aumann AG, Beelen

Welcome Note from the Executive Board

Dear Shareholders,

As anticipated, Aumann AG's strong corporate growth to date remained dynamic in the third quarter. Revenue rose to €212.0 million in the reporting period, up 51.1% on the same period of the previous year. Adjusted EBIT also developed positively and rose to more than €23.7 million with an adjusted EBIT margin of 11.2%. We have therefore already achieved higher revenue and earnings in the first nine months of this year than in the 2017 financial year – a very good performance in view of the current economic slowdown in the automotive industry.

Revenue in the E-mobility segment surged by 94.4% year-on-year to €78.4 million. The segment's EBIT also soared by 120.3% as against the previous year to €10.6 million. At the same time, incoming orders in E-mobility grew by 46.4% to €74.9 million, corresponding to a share of around 37%.

Total incoming orders rose by 50.8% to around €204.1 million until September. This does not include nominations from new Asian customers with a total volume of more than €20 million, which fall into the fourth quarter. We are thus not just expanding our international customer base, but also growing our position on the key Asian e-mobility market in line with our strategy. We will continue to pursue this thrust further in the future, for which we believe we are excellently positioned both technologically and operationally.

We would like to thank our employees for their tireless commitment and our business partners and customers for working with us. Above all, we would also like to thank you, our investors, for your faith in this great company.

We are delighted to have you by our side on our ongoing journey towards automotive electrification.

Rolf Beckhoff Sebastian Roll Chief Executive Officer Chief Financial Officer

Aumann in figures

Nine months	2018	2017	Δ 2018 /
(unaudited)	IFRS	IFRS	2017
	€ k	€ k	%
Order backlog	196,205	127,158	54.3
Order intake	204,082	135,296	50.8
Revenue	212,032	140,329	51.1
there of E-mobility	78,355	40,309	94.4
Operating performance	212,385	141,068	50.6
Total performance	217,782	143,958	51.3
Cost of materials	-128,580	-88,353	45.5
Staff costs	-53,316	-32,902	62.0
EBITDA	26,080	16,320	59.8
EBITDA margin	12.3%	11.6%
EBIT	21,729	15,072	44.2
EBIT margin	10.2%	10.7%
adjusted EBIT	23,719	15,072	57.4
adjusted EBIT margin	11.2%	10.7%
EBT	21,199	14,616	45.0
EBT margin	10.0%	10.4%
Consolidated net profit	14,774	10,223	44.5
Number of shares	15,250	14,000	8.9
eps in €*	0.97	0.73	32.9
Figures from the statement	30 Sep	31 Dec
of financial position	€ k	€ k	%
Non-current assets	85,247	83,000	2.7
Current assets	233,523	243,789	-4.2
there of cash and equivalents **	89,047	113,195	-21.3
Issued capital (share capital)	15,250	15,250	0.0
Other equity	177,733	165,403	7.5
Total equity	192,983	180,653	6.8
Equity ratio	60.5%	55.3%
Non-current liabilities	51,227	52,242	-1.9
Current liabilities	74,560	93,894	-20.6
Total assets	318,770	326,789	-2.5
Net debt (-) or
net cash (+) *	64,953	85,852	-24.3
Employees	1,091	981	11.2

* Based on shares outstanding on 30 September 2018.

** This figure includes securities.

Contents

Welcome Note from the Executive Board	2
Aumann in figures	3
Contents	4
Interim Group management report	5
Business and economic conditions	5
Results of operations, financial position and net assets	6
Segment performance	6
Employees	7
Report on risks and opportunities	7
Report on expected developments	7
IFRS interim consolidated financial statements for 2018	8
Notes to the interim consolidated financial statements	14
Accounting	14
Accounting policies	14
Segment reporting	14
Changes in contingent liabilities	15
Related party transactions	15
Events after the end of the reporting period	15
Review	15
Responsibility statement	15
Financial calendar	16
Conferences	16
Contact	16
Legal notice	16

Interim Group management report

Aumann is a world-leading manufacturer of innovative speciality machinery and automated production lines with a focus on electromobility. The company combines unique winding technology for the highly efficient production of electric motors with decades of automation experience, particularly in the automotive industry. Leading companies around the world rely on Aumann solutions for the serial production of purely electric and hybrid vehicle drives and for production automation. Given the dynamic market growth in e-mobility, Aumann's products in the e-mobility segment focus on the development and production of automated production lines for components of the electric powertrain. The company has its own technologies, some of which unique, for the automated mass production of both electric engines and energy storage. Aumann's manufacturing solutions thus cover essential technologies for the key components of the electric powertrain.

Business and economic conditions

In the third quarter, the euro area's gross domestic product (GDP) grew by only 0.2% compared to the previous quarter. In Germany, GDP fell by 0.2 % according to initial estimates, due to higher expenses in the automotive industry for the changeover to the new harmonized light vehicles test procedure WLTP. With GDP growth of 3.5%, the trend in the US was still positive, albeit somewhat weaker than in the previous quarter. In particular, the reasons for this include the continuing strong private consumer spending environment and the positive economic stimulus of the tax reform passed at the end of 2017. At the same time, GDP growth in China remained stable but slowed slightly from 6.7% to 6.5%, reflecting the cooling off of world trade.

The global growth forecast of 3.4% for 2018 has already been lowered to less than 3% for 2019. Germany's growth forecast for the current year was reduced from 2.2% to 1.7%, which experts attribute in particular to the effects of US trade policy and the rising shortage of skilled workers. According to the announcement by the US Federal Reserve, interest rates are expected to be raised again as early as December. Positive stimulus is stemming from the German domestic economy, where the unemployment rate is set to fall from 5.2% to 4.5% by 2020. Domestic consumption is also expected to grow in 2019 as against 2018 on account of the improved tax and social security situation for private citizens.

The transition to the stricter WLTP test procedure for exhaust emissions and fuel consumption in the third quarter had negative repercussions for sales development for European car manufacturers. The associated price war, which brought pressure to bear on margins, led to volatile car sales in Western Europe with the result that demand was even slightly lower than the level for the year as a whole in the past quarter. The ongoing trade dispute between China and the US is affecting the most important markets for German and European car manufacturers. The uncertainty in world trade has risen. The unpredictable impact of the trade dispute between the two biggest economies in the world could potentially slow the growth of the global economy.

The German Association of the Automotive Industry (VDA) is forecasting a slight increase in the number of registrations of 1% to 3.5 million cars for the current year. The VDA anticipates potential risks in imminent US import tariffs on European cars and in China's intended retaliatory tariff increases on US cars. Despite the risks, market forecasts are cautiously optimistic. Global car sales are expected to grow by around 2% to 86 million vehicles in 2018. Slightly weaker growth of 2% to 24.7 million cars is forecast for China.

According to the German Mechanical Engineering Industry Association (VDMA), mechanical engineering orders were up 3% year-on-year in real terms from July to September. In particular, Germany reported an increase in domestic orders of around 8% in this period, while foreign orders rose by 1%. The VDMA has confirmed its forecast for production growth in Germany of 5.0% for the year as a whole, but it is less optimistic further down the line. Reasons for this include the trade dispute between China and the US, Brexit and the escalating shortage of skilled workers. The VDMA has adjusted its growth forecast for 2019 downwards to 2.0% in real terms. This is mainly on account of the expected cyclical and typical slowdown in growth, which has been at a high level for years.

The decision by EU environment ministers to reduce CO2 limits for new cars by 35% in 2030 is a watershed moment with far-reaching consequences for the automotive industry. Experts expect that the significant tightening of exhaust emission targets will be tantamount to a quota for electric cars. As a result, the conversion to electric drives will have to advance more quickly and more ambitiously in order to meet the emission targets. The share of cars with electric or hybrid drives sold in Germany is less than 2%. Accordingly, experts predict that at least half of new cars will have to have electric drives by the end of 2030.

Results of operations, financial position and net assets

Aumann's results of operations, financial position and net assets were positive in the first nine months of the 2018 financial year. The consolidated revenue of the Aumann Group was up 51.1% year-on-year at €212.0 million (previous year: €140.3 million).

The ratio of cost of materials to total operating performance fell from 62.6% in the first six months of the previous year to 60.5%. The staff costs ratio rose from 23.3% in the previous year to 25.1% in the same period. This change in the material and staff costs ratios reflects the success of hiring new employees, which has reduced the number of temporary employees and the volume of purchased services.

EBITDA increased by 59.8% to €26.1 million in the first nine months (previous year: €16.3 million). After depreciation and amortisation of €4.4 million, the Aumann Group's EBIT amounted to €21.7 million (previous year: €15.1 million). €1.6 million of this figure relates to hidden reserves that were capitalised as part of the acquisition of USK Karl Utz Sondermaschinen GmbH. Moreover, a provision of €0.4 million was recognised in June 2018 in connection with the departure of a member of the Executive Board. Adjusted for depreciation, amortisation and the provision, EBIT amounted to €23.7 million, with adjusted EBIT rising by 57.4% year-on-year. Taking into account net finance costs of minus €0.5 million, EBT amounted to €21.2 million (previous year: €14.6 million). Consolidated net profit was €14.8 million (previous year: €10.2 million) or €0.97 per share (based on an average of 15,250,000 shares outstanding) in the first nine months of the year.

In the third quarter, revenue grew by 85.6% compared to the third quarter of the previous year to €78.7 million. EBIT amounted to €7.6 million in the third quarter, an increase of 173.8% as against the previous year. Adjusted EBIT for the third quarter amounted to €8.1 million. Consolidated net profit for the quarter was €4.9 million (previous year: €1.7 million), putting earnings per share at €0.32.

Incoming orders amounted to €204.1 million after the first nine months. The order backlog amounted to €196.2 million as at the end of September.

The Group's equity rose by 6.8% to €193.0 million as at the end of the first nine months of the year (31 December 2017: €180.7 million). Based on total consolidated assets of €318.8 million, the equity ratio was 60.5%.

In light of the growth achieved, working capital has risen by €38,3 million since 31 December 2017.

Financial liabilities amounted to €24.1 million as at 30 September 2018 (31 December 2017: €27.4 million) and cash funds, including securities, to €89.0 million (31 December 2017: €113.2 million). Accordingly, net cash from the above liabilities and cash items amounted to €65.0 million as against €85.9 million on 31 December 2017.

Segment performance

Given their different market prospects, Aumann differentiates between the E-mobility and Classic segments, which are described in more detail below.

In its E-mobility segment, Aumann predominantly manufactures speciality machinery and automated production lines with a focus on the automotive industry. Customers use Aumann's products for the highly efficient, technologically advanced mass production of electricmotors and coils. This involves highly specialised and, in some cases, unique winding technologies that are used to wind electric components with copper wire. State-of-the-art automation solutions for related processes are no less important. Major customers from the automotive and e-bike industries use Aumann technology to manufacture the latest generation of electric motors. Aumann's product range also includes speciality machinery and production lines for the manufacture of energy storage systems and product-related services such as maintenance, repair and spare part supply.

Revenue in the E-mobility segment grew by 94.4% year-on-year to €78.4 million in the first nine months. The segment's EBIT amounts to €10.6 million after the first nine months with an EBIT margin of 13.5%. Incoming orders in E-mobility amount to €74.9 million.

In the Classic segment, Aumann mainly manufactures specialist machinery and automated production lines for the automotive, consumer electronics, appliances and aerospace industries. For example, Aumann's solutions include systems for the production of drive components that reduce CO2 emissions from combustion engine vehicles. Aumann also offers highly automated manufacturing and assembly solutions for the consumer electronics and appliances industries in addition to specific solutions for other sectors.

Revenue in the Classic segment has increased by 33.7% year-on-year to €133.7 million in the first nine months. One of the main reasons for the growth in the Classic segment is still the trend towards emissionreduction components in vehicles with combustion engines. But outside the automotive industry as well, the segment is benefiting from growth trends such as rising efficiency requirements for industrial engines and household appliances, or the growing drive for automation in the production of consumer electronics.

Segment EBIT amounted to €12.9 million in the first nine after €10.2 million in the same period of the previous year. This corresponds to an EBIT margin of 9.6%. Order intake in the Classic segment amounted to €129.2 million.

Employees

Not including temporary employees or trainees, the number of employees increased to 1,091 as at 30 September 2018. Headcount has risen by 70.5% compared to 30 September 2017.

Report on risks and opportunities

A detailed presentation of the company's risks and opportunities can be found in the 2017 annual report and the securities prospectus (page 59 and onwards in particular). Both documents are available at www.aumann-ag.com. There have been no material changes in risks and opportunities since the publication of the 2017 annual report and the securities prospectus. Aumann's risk management system is suitable for identifying risks early on and taking immediate action.

Report on expected developments

Aumann is forecasting revenue of more than €300 million for the current 2018 financial year. In view of the continued dynamic growth and the advanced integration of USK, adjusted EBIT is forecast at between €28 million and €31 million.

IFRS consolidated statement of comprehensive income	1 Jan -	1 Jan -
(unaudited)	30 Sep 2018	30 Sep 2017
	€ k	€ k
Revenue	212,032	140,329
Increase (+) / decrease (-) in finished goods
and work in progress	353	739
Operating performance	212,385	141,068
Capitalised development costs	2,166	2,387
Other operating income	3,231	503
Total performance	217,782	143,958
Cost of raw materials and supplies	-108,756	-79,438
Cost of purchased services	-19,824	-8,915
Cost of materials	-128,580	-88,353
Wages and salaries	-42,003	-25,233
Social security
and pension costs	-11,313	-7,669
Staff costs	-53,316	-32,902
Other operating expenses	-9,806	-6,383
Earnings before interest, taxes, depreciation,
and amortisation (EBITDA)	26,080	16,320
Amortisation and depreciation expense	-4,351	-1,248
Earnings before interest and taxes (EBIT)	21,729	15,072
Other interest and similar income	163	149
Interest and similar expenses	-693	-605
Net finance costs	-530	-456
Earnings before taxes (EBT)	21,199	14,616
Income tax expense	-6,367	-4,262
Other taxes	-58	-131
Consolidated net profit	14,774	10,223
Earnings per share (in €)	0.97	0.73

IFRS interim consolidated financial statements for 2018

IFRS consolidated statement of comprehensive income	1 Jan -	1 Jan -
(unaudited)	30 Sep 2018 € k	30 Sep 2017 € k
Consolidated net profit	14,774	10,223
Items that may be subsequently reclassified
to profit and loss
Currency translation differences	49	-66
Available for sale financial assets	557	198
Other comprehensive income after taxes	606	132
Comprehensive income for the reporting period	15,380	10,355

IFRS consolidated statement of comprehensive income	1 Jul -	1 Jul -
(unaudited)	30 Sep 2018	30 Sep 2017
	€ k	€ k
Revenue	78,653	42,371
Increase (+) / decrease (-) in finished goods
and work in progress	10	8
Operating performance	78,663	42,379
Capitalised development costs	796	539
Other operating income	2,161	-17
Total performance	81,620	42,901
Cost of raw materials and supplies	-41,976	-23,827
Cost of purchased services	-8,218	-2,552
Cost of materials	-50,194	-26,379
Wages and salaries	-13,765	-8,470
and pension costs	-3,981	-2,553
Staff costs	-17,746	-11,023
Other operating expenses	-4,586	-2,271
Earnings before interest, taxes, depreciation,
and amortisation (EBITDA)	9,094	3,228
Amortisation and depreciation expense	-1,521	-462
Earnings before interest and taxes (EBIT)	7,573	2,766
Other interest and similar income	53	25
Interest and similar expenses	-293	-154
Net finance costs	-240	-129
Earnings before taxes (EBT)	7,333	2,637
Income tax expense	-2,401	-811
Other taxes	-19	-95
Consolidated net profit	4,913	1,731
Earnings per share (in €)	0.32	0.12

Statement of financial position	30 Sep 2018	31 Dec 2017
Assets (IFRS)	unaudited	audited
	€ k	€ k
Non-current assets
Own produced intanbible assets	5,120	3,312
Concessions, industrial property rights and similar rights	1,368	3,007
Goodwill	38,484	38,484
Intangible assets	44,972	44,803
Land and buildings
including buildings on third-party land	26,929	25,800
Technical equipment and machinery	3,004	3,391
Other equipment, operating and office equipment	3,296	3,155
Advance payments and assets under development	1,084	1,788
Property, plant and equipment	34,313	34,134
Investment securities	5,752	2,577
Financial assets	5,752	2,577
Deferred tax assets	210	1,486
	85,247	83,000
Current assets
Raw materials and supplies	3,033	2,556
Work in progress	3,342	2,489
Finished goods	694	694
Advance payments	5,978	3,241
Inventories	13,047	8,980
Trade receivables	33,693	33,635
Receivables from construction contracts	98,551	83,091
Other current assets	4,937	7,465
Trade receivables
and other current assets	137,181	124,191
Securities	2,865	3,917
Available-for-sale financial assets	2,865	3,917
Cash in hand	9	7
Bank balances	80,421	106,694
Cash in hand, bank balances	80,430	106,701
	233,523	243,789
Total assets	318,770	326,789

Statement of financial position	30 Sep 2018	31 Dec 2017
Equity and liabilities (IFRS)	unaudited	audited
	€ k	€ k
Equity
Issued capital	15,250	15,250
Capital reserve	131,841	131,841
Retained earnings	45,892	33,562
	192,983	180,653
Non-current liabilities
Liabilities to banks	20,233	23,060
Other interest bearing liabilities	5	23
Other liabilities	5,752	5,533
Pension provisions	18,538	18,538
Other provisions	916	1,025
Deferred tax liabilities	5,783	4,063
	51,227	52,242
Current liabilities
Liabilities to banks	3,856	4,260
Advance payments received	11,078	27,771
Trade payables	26,584	21,959
Other liabilities	4,059	7,522
Provisions with the nature of a liability	14,214	10,630
Tax provisions	120	852
Other provisions	14,649	20,900
	74,560	93,894
Total equity and liabilities	318,770	326,789

Consolidated statement of cash flows	1 Jan -	1 Jan -
(unaudited)	30 Sep 2018	30 Sep 2017
	€ k	€ k
1. Cash flow from operating activities
Earnings before interest and taxes (EBIT)	21,729	15,072
Adjustments for non-cash transactions
Write-downs on non-current assets	4,351	1,249
Increase (+) /decrease (-) in provisions	-110	-565
Losses (+) / Gains (-) for disposel of assets	-34	-155
	4,207	529
Change in working capital:
Increase (-) / decrease (+) in inventories, trade receivables
and other assets	-20,362	-33,720
Decrease (-) / increase (+) in trade payables
and other liabilities	-17,933	653
	-38,295	-33,066
Income taxes paid (-) / received (+)	-858	-2,982
Interest received	163	149
	-695	-2,833
Cash flow from operating activities	-13,054	-20,299
2. Cash flow from investing activities
Investments (-) / divestments (+) intangible assets	-1,737	-2,211
Investments (-) / divestments (+) property, plant and equipment	-2,928	-4,312
assets and securities	-1,566	561
Cash flow from investing activities	-6,231	-5,961
3. Cash flow from financing activities
Proceeds from equity transfers	0	63,000
Disbursements for equity transfers	0	-15,026
Profit distribution to shareholders	-3,050	-4,500
Proceeds from borrowing financial loans	9	5,729
Repayments of financial loans	-3,301	-1,878
Interest payments	-693	-604
Cash flow from financing activities	-7,035	46,721
Cash and cash equivalents at end of period
Change in cash and cash equivalents
(Subtotal 1-3)	-26,320	20,461
Effects of changes in foreign exchange rates (non-cash)	49	-66
Cash and cash equivalents at start of reporting period	106,701	38,183
Cash and cash equivalents at end of period	80,430	58,578
Composition of cash and cash equivalents
Cash in hand	9	10
Bank balances	80,421	58,568
Reconciliation to liquidity reserve on 31 March	2018	2017
Cash and cash equivalents at end of period	80,430	58,578
Securities	8,617	7,301
Liquidity reserve on 31 March	89,047	65,879

Statement of changes in consolidated equity (unaudited)
					Retained earnings
	Issued capital	Capital reserve	Currency translation difference	Available for sale financial assets	Pension re serve	Generated con solidated equity	Consolidated equity
	€ k	€ k	€ k	€ k	€ k	€ k	€ k
1 Jan 2017	12,500	4,188	77	88	-2,417	27,001	41,437
Payed dividend	0	0	0	0	0	-4,500	-4,500
Subtotal	12,500	4,188	77	88	-2,417	22,501	36,937
Amounts recognised in other comprehensive income	0	0	0	-111	446	0	335
Currency translation difference	0	0	-62	0	0	0	-62
Consolidated net profit	0	0	0	0	0	13,040	13,040
Total comprehensive income	0	0	-62	-111	446	13,040	13,313
Capital increase	2,750	127,653	0	0	0	0	130,403
31 Dec 2017	15,250	131,841	15	-23	-1,971	35,541	180,653
Payed dividend	0	0	0	0	0	-3,050	-3,050
Subtotal	15,250	131,841	15	-23	-1,971	32,491	177,603
Amounts recognised in other comprehensive income	0	0	0	557	0	0	557
Currency translation difference	0	0	49	0	0	0	49
Consolidated net profit	0	0	0	0	0	14,774	14,774
Total comprehensive income	0	0	49	557	0	14,774	15,380
30 Sep 2018	15,250	131,841	64	534	-1,971	47,265	192,983

Notes to the interim consolidated financial statements

Accounting

The interim financial report of the Aumann Group for the period 1 January to 30 September 2018 was prepared on the basis of the International Financial Reporting Standards (IFRS) published by the International Accounting Standards Board (IASB) as adopted in the EU. It was prepared in accordance with IAS 34.

Accounting policies

The accounting policies adopted are the same as those applied in preparing the consolidated financial statements as at 31 December 2017. The preparation of the financial statements is influenced by accounting policies and assumptions and estimates affecting the amount and reporting of recognised assets, liabilities, contingent liabilities and income and expense items. Matters relating to revenue are deferred intra-year.

Segment reporting

The management of the Aumann Group classifies the segments as described in the interim Group management report

1 Jan - 30 Sep 2018	Classic	E-mobility	Reconcilation	Group
(unaudited)
	€ k	€ k	€ k	€ k
Order backlog	128,982	67,223	0	196,205
Order intake	129,201	74,881	0	204,082
Revenue from third parties	133,677	78,355	0	212,032
EBITDA	14,420	11,796	-136	26,080
Amortisation and depreciation	-1,555	-1,183	-1,613	-4,351
EBIT	12,865	10,613	-1,749	21,729
Financial result	-468	-224	162	-530
EBT	12,397	10,389	-1,587	21,199
EBIT-Margin	9.6%	13.5%		10.2%
Trade receivables and
Receivables from construction contracts	86,210	46,034	0	132,244
Advance payments	7,558	3,520	0	11,078
1 Jan - 30 Sep 2017	Classic	E-mobility	Reconcilation	Group
(unaudited)
	€ k	€ k	€ k	€ k
Order backlog	87,126	40,032	0	127,158
Order intake	84,155	51,141	0	135,296
Revenue from third parties	100,020	40,309	0	140,329
EBITDA	10,991	5,320	9	16,320
Amortisation and depreciation	-746	-502	0	-1,248
EBIT	10,246	4,817	9	15,072
Financial result	-457	-147	148	-456
EBT	9,789	4,670	157	14,616
EBIT-Margin	10.2%	12.0%		10.6%
Trade receivables and
Receivables from construction contracts	66,509	19,461	0	85,970

Changes in contingent liabilities

There were no changes in contingent liabilities as against 31 December 2017.

Related party transactions

Business transactions between fully consolidated Group companies and other companies of MBB Group are conducted at arm's-length conditions.

Events after the end of the reporting period

There were no significant events after the reporting date.

Review

The condensed interim consolidated financial statements as at 30 September 2018 and the interim Group management report were neither audited in accordance with section 317 of the German Commercial Code (HGB) nor reviewed by an auditor.

Responsibility statement

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 results of operations, financial position and net assets of the Group, 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 Group, together with a description of the principal opportunities and risks associated with the expected development of the Group for the remaining months of the financial year.

Beelen, 16 September 2018

Rolf Beckhoff Sebastian Roll Chief Executive Officer Chief Financial Officer

Financial calendar

End of financial year 31 December 2018

Conferences

German Equity Forum

Frankfurt, Germany 27 November 2018

Berenberg European Conference

Pennyhill, UK 4 December 2018

Contact

Aumann AG Dieselstrasse 6 48361 Beelen, Germany

Tel. +49 2586 888 7800 www.aumann-ag.com info@aumann-ag.com

Legal notice

Aumann AG Dieselstrasse 6 48361 Beelen, Germany Germany