Einhell

FINANCIAL REPORT

2021

Einhell

Official Home & Garden Expert

einhell.com

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I COMBINED MANAGEMENT REPORT OF THE EINHELL GROUP

1. PREAMBLE

The combined management report published in the Annual Report 2021 comprises the Group management report and the management report of Einhell Germany AG. Unless otherwise stated, the report on performance and financial figures as well as the situation and the expected development relates to both the Group and Einhell Germany AG. Sections containing information on Einhell Germany AG only are identified as such. In the economic report, disclosures in accordance with the German Commercial Code (HGB) for Einhell Germany AG are presented in a separate section.

2. BUSINESS ACTIVITIES, STRUCTURE, MANAGEMENT AND GOALS OF THE EINHELL GROUP

2.1 General operations and business segments

Einhell Germany AG, with its registered office in Landau an der Isar (Germany), is the parent company of the international Einhell Group. For more than 55 years, Einhell has been one of the global market leaders in designing and delivering solutions for DIY enthusiasts and hobby gardeners for use at home, in the workshop and the garden. The product range includes hand-held power tools, stationary machines and accessories as well as lawn and garden care tools, irrigation and drainage solutions. The products are sold through DIY stores and other distribution channels with a high level of competence in terms of the DIY product mix offered. Einhell is active in more than 90 countries worldwide. Subsidiaries and associates across the world ensure the proximity to Einhell's globally operating customers.

Einhell places special emphasis on further developing its cordless Power X-Change battery-operated product range that already encompasses more than 200 battery-operated DIY and garden tools. Depending on the individual requirements, different batteries with varying capacities are available and can be used to operate any of the tools in the Power-X-Change family. Einhell also offers select partners the Power X-Change platform for their products.

In August 2021, Einhell Germany AG and its Power X-Change tools were appointed the "Official Home and Garden Expert" and "Gold Partner" of the football club FC Bayern München. The partnership with the record champion and two-time Triple winner underlines Einhell's ambition to take a leading role in all the markets where the Company is active.

In addition to reliable quality, extensive customer services and excellent value for money, the Einhell brand stands for freedom, simple handling, safety and joy when implementing one's own DIY projects¹. Our overriding objective is customer satisfaction². Therefore, customer-oriented services are more than just an empty phrase but in fact our everyday standard³.

The subsidiaries comprise distribution companies mainly in Europe but also in South America and Australia as well as trading companies in Asia. The Asian subsidiaries are also responsible for product sourcing, product processing and procurement. As production is carried out in Asia, this is also where quality assurance takes place. In its global workforce, Einhell currently counts approx. 1,800 employees, Group revenue amounted to EUR 927.4 million in financial year 2021 (previous year: EUR 724.7 million).

The Einhell Group structures its operations according to the regions "D/A/CH", "Western Europe", "Eastern Europe", "Overseas" and "Other countries". Operational responsibility for the respective CPU lies with the Board of Directors of Einhell Germany AG and the Managing Directors of the subsidiaries.

¹ Unverified statement
² Unverified statement
³ Unverified statement

2.2 Legal structure and management of the Group

a) Legal structure and changes to Group structure

Einhell Germany AG, Landau an der Isar, holds direct and indirect shareholdings in a total of 42 subsidiaries, which each form separate legal entities. It holds 100% of the shares in subsidiaries with a centralised or special function such as services, product sourcing/product processing, procurement/purchasing and quality control/quality assurance. The Group also usually holds all the shares in the global distribution companies.

In all consolidated subsidiaries where Einhell Germany AG does not hold all the shares, Einhell Germany AG has a direct or indirect majority shareholding.

With regard to the responsibilities of the Einhell Group companies, all activities that can be centralised are carried out at just one location. Product processing, the search for factories, their auditing and certification, procurement, services, controlling, financing, IT and other administrative activities, for example, are carried out centrally by the Group companies in Germany and China. This organisational structure within the Group allows all distribution companies to focus on their core functions. Einhell is also in a position to press ahead with international expansion as each distribution company has a similar structure and the business model can be efficiently rolled out in additional countries. As organic growth offers great potential, the organisation and efficient development of the Einhell Group's business model are among the management's most important responsibilities.

The Group structure changed as follows during financial year 2021:

In financial year 2021, the Einhell Group founded a wholly owned company in Uruguay. The company was established in a free trade zone in Montevideo.

b) Management and control

Responsibility for the business activities of the Einhell Group lies with the Board of Directors of Einhell Germany AG. This comprised four members at the time of preparation of the annual financial statements, consolidated financial statements and management report. The Board of Directors manages, organises and monitors strategies and operational business processes for the whole Group. Responsibilities within the Board of Directors are allocated based on the departments the individual member is in charge of.

The Chairman of the Board of Directors is responsible for sales, procurement, marketing, product management and corporate strategy.

The Chief Financial Officer is responsible for finance and accounting, tax, legal, internal audit, controlling, investor relations, human resources and maintenance.

The Chief Technical Officer is responsible for technology, product development, quality control, supply chain management and production.

The Chief IT and Digitization Officer is responsible for IT, digitization and services.

The Board of Directors supervises the specialists and managers in the relevant departments and relies upon the corresponding hierarchy of divisional and departmental management at Einhell Germany AG, and on Managing Directors and their specialists and managers in the subsidiaries.

The Board of Directors seeks to ensure flat hierarchies and makes sure to maintain direct contact with employees and specialist staff in all divisions. Regular meetings of the Board of Directors and of individual departments, as well as divisional and cross-departmental meetings where required, secure efficient communication and informational flows to all responsible parties.

The Supervisory Board of Einhell Germany AG, comprising three members, monitors and provides advice to the Board of Directors in accordance with legal requirements and the provisions of the German Corporate Governance Code.

At regular meetings of the Supervisory Board, the Board of Directors provides information to the Supervisory Board about the Group's current situation, business transactions and corporate strategy.

The Supervisory Board also maintains ongoing lines of communication with the Board of Directors outside of regular meetings and ensures an adequate level of communication and informational flows between the Board of Directors and the Supervisory Board.

The composition of the Supervisory Board did not change in financial year 2021:

Supervisory Board	2021
Univ.-Prof. Dr.-Ing. Dr.-Ing. E.h. Dr. h.c. Dieter Spath	Chairman
Philipp Thannhuber	Deputy Chairman
Maximilian Fritz	Employee representative

c) Principles of the remuneration system for the Board of Directors

Members of the Board of Directors receive fixed and performance-based variable remuneration with short-term and long-term components. The individual performance-based components depend on factors such as consolidated net profit, segment earnings in the previous financial year, the development of the Group's asset structure and personal targets. On 22 April 2021, the Supervisory Board adopted a new remuneration system for the Board of Directors that was approved by the Annual General Meeting on 18 June 2021. The evaluation system ensures transparent and sustainable accounting practices based on the Group's strategic aims. A pre-defined cap limits the impact of extraordinary one-off effects on the variable remuneration component. Members of the Board of Directors privately hold shares in Einhell Germany AG. There are no share option programmes or similar schemes. An agreement is in place with one of the members of the Board of Directors stipulating that a proportion of the variable remuneration component must be used to purchase Einhell shares. If the employment contract is not extended after twelve years, members of the Board of Directors receive one year's salary plus the average management bonus paid over the last three years. If the employment contract is terminated before the twelve-year threshold, the proportional remuneration is calculated on a pro rata temporis basis. Commitments were made to pay a pension to the members of the Board of Directors in the form of annuity payments that can be paid out as soon as the respective Board member turns 60 or 62, respectively and the amount of which is based on the Board member's years of service. More information on the Board remuneration is provided in the notes to the annual financial statements and the remuneration report that is available on the Company website www.einhell.com.

d) Personnel changes to the Board of Directors

There were no personnel changes to the Board of Directors in financial year 2021. The distribution of responsibilities among the Board members did not change significantly.

2.3 Corporate strategy and management

The Board of Directors embarked on a structured strategy development process together with the heads of divisions and departments to define and communicate the objectives and values of the Einhell Group.

The Einhell Group's primary objective is to generate sustainable and profitable revenue and profit growth. Profitability takes priority over pure growth targets.

a) Strategy

The Company's main strategic priority is the further development of the EINHELL brand. Its cooperation with FC Bayern München and Oliver Kahn is an important component in achieving this goal. These two partners perfectly represent power, performance, endurance, success and emotions, which are also the strongest elements of our brand proposition as the most competent battery platform on the market⁴. We have already run TV campaigns in six countries with FC Bayern München and Oliver Kahn and our E-Team in 2021 and are planning to roll out our TV campaigns to a total of twelve countries in 2022. This will further enhance the awareness and positive perception of the Einhell brand at an international level. The TV advertising campaigns are accompanied by print, online and point-of-sale measures.

Our strategic goal in the online business is to attract customers by offering the best content and thus achieving high visibility. Our websites therefore offer useful customer services, such as the Einhell battery advisor, the spare parts shop etc.

The online trading segment continues to grow and Einhell will systematically continue on its path towards digital leadership. Various projects and measures are planned to promote further revenue growth, which will increasingly be driven by digital distribution channels in the near future.

In addition, our corporate strategy will continue to focus on product policy in general and the Power X-Change platform in particular in the coming years. We intend to expand the revenue share of the Power X-Change platform to more than 40% in financial year 2022. At the end of 2021, the Power X-Change family comprised approx. 200 products. In 2022, the platform is to be expanded by about 50 additional products. We will continue to use our battery and charger expertise to further develop our technology in this field and to constantly design new and innovative solutions for end consumers.

Digital organisation will also remain a major task for the Einhell Group in the next few years. A new ERP software (SAP) will be introduced in China in the near future and, after being implemented in the Asian companies, will be rolled out to include additional countries.

Furthermore, we are working intensely on other digitalisation topics, like, for instance, optimising the supply chain management. In this context, centralised demand forecasts and planning processes and central scheduling management, the introduction of a shipment consolidation management system, the introduction of a central capacity management system and new transport management system in China, the expansion and introduction of inbound freight management of all transcontinental goods movements and the establishment and introduction of international warehouse management are given the utmost priority.

We also plan to further develop the international distribution network in the upcoming years to enable us to meet our medium-term revenue targets. For this purpose, we will both unlock additional potential in the existing markets and tap into new DIY markets where we are not yet present. The sales organisation of the existing companies is to be strengthened by hiring additional field staff, working on the divisionalised structure and setting up a designated distribution network for the products of kwb Germany GmbH, our accessories subsidiary. The further expansion of the e-commerce teams in the entire Group is another important strategic goal. We aim to integrate additional distribution subsidiaries into our existing organisation over the next few years. The corresponding focus is particularly on Canada, Finland, Thailand, Israel, Mexico and Japan.

b) Management system

Management of the business activities of the Einhell Group is mainly based on the financial performance indicators revenue and earnings be

fore tax. The two key figures are the most significant performance indicators of the Einhell Group.

In addition to the financial performance indicators, Einhell Germany AG and the Group companies at a local level use additional key performance indicators (KPIs) such as gross profit margin and the main drivers of working capital, inventories and trade receivables for management purposes. However, these key performance indicators are subject to strong country-specific variations and are therefore interpreted within the context of the individual company. Inventories are analysed on an ongoing basis and monitored on the basis of stock turnover and inventory range with regard to possible impairment losses. Moreover, a sanity check is carried out on the order process for new goods, involving checking and managing product availability and stock volumes. Trade receivables are constantly monitored on the basis of maturity structures and assessed by means of standardised evaluation criteria. Receivables are usually limited to the extent of the receivables insurance or subject to management based on internally set limits. Accounts receivable targets are also subject to constant monitoring and are an important management parameter for the Group's working capital.

The Einhell Group's basic objective is to generate sustainable and profitable growth of revenue and profit. Profitability takes priority over pure growth targets.

The management system has not been changed compared to the previous year.

2.4 Product processing and quality management

a) Product processing

Product processing expenses amounted to EUR 10.4 million in financial year 2021 (previous year: EUR 9.2 million). 60 employees (previous year: 60 employees) were employed in this business unit. Product processing at Einhell is mainly sales-driven and customer-oriented. Therefore, cooperation with other departments, such as quality assurance, is important, as is communication with customers. Customer requirements are taken into account from the outset during the design of new products and versions. The customer is regarded as a partner. This allows the entire Einhell Group to consistently adapt to markets and made Einhell one of the fastest reacting companies in the sector⁵.

b) Quality management

Most of the Einhell product range is currently produced in China. Quality standards stipulated by the Einhell Group to the Chinese suppliers are determined based on customer requirements. Quality control and quality management comply with high standards.

Since high priority is given to quality checks before shipping from China, this area is constantly monitored. In addition to strict shipping controls on site, there are also controls in place with regard to observance of customer-specific quality requirements, inspections of ongoing production and optimisation of manufacturer processes.

Supplier quality is optimised on an ongoing basis. Dependency on individual suppliers is avoided by maintaining an adequate number of suppliers and a broad distribution of orders. In order to create additional leeway for flexible procurement options, Einhell strives to further intensify its cooperation with select suppliers by forming strategic alliances in the field of product development.

⁵ Unverified statement

2.5 Personnel and HR services

The number of employees rose in financial year 2021 compared to the previous financial year. On average, the Einhell Group had 1,796 employees (previous year: 1,658). Revenue per employee was EUR 516 thousand (previous year: EUR 437 thousand).

In accordance with the CSR Directive Implementation Act, which went into effect in April 2017, we disclose the concepts we have pursued in the past financial year with regard to key non-financial matters relevant to Einhell Germany AG. The Company decided to report on these matters in a separate non-financial report, which is not included in the management report. For further information about HR and social matters, please refer to our Corporate Social Responsibility Report, continually available under https://www.einhell.com/en/company/csr-report.html.

3. ECONOMIC REPORT

3.1 General economic conditions

Financial year 2021 was still dominated by the COVID-19 crisis. At the beginning of the year, the rise in freight rates due to the severe shortage of shipping capacity posed a great challenge. However, despite a difficult year for the DIY store sector that suffered from store closures in the wake of the pandemic, Einhell managed to once again increase its unit sales. Furthermore, the Group massively increased the revenue generated with Power X-Change products.

The following figures on the GDP, inflation rate and the unemployment rate are based on figures published by the German Federal Statistical Office, Eurostat, the Austrian Economic Chamber and the Australian Bureau of Statistics.

a) D/A/CH

The German DIY market has continued to grow in recent years and is now the second largest DIY market in the world after North America/USA.

About 50% of German DIY revenue is generated by the large well-known DIY chains. It is therefore important for Einhell to be listed by these chains.

The DIY sector experienced an extremely unfavourable start into the year 2021. Other than during the first lockdown in the spring of 2020, the sector was not considered to be of systemic significance and DIY and garden stores had to close when lockdown measures came into place. Following the record results achieved in the previous year's period, DIY and garden stores suffered a revenue slump of 15.2% to EUR 10.03 billion in the first half of 2021 (H1 2020: EUR 11.82 billion or +15.6%). According to the German association of DIY retailers (BHB), the strong decline in revenue is attributable to a base effect resulting from the high level in the first half of the previous year, cool weather and, in particular, the losses suffered by brick-and-mortar retailers due to the lockdown. The DIY and home improvement stores in Germany generated total gross revenue of EUR 24.28 billion in 2021, which corresponds to a decline of 8.2% year-on-year.

The price-adjusted gross domestic product (GDP) in Germany was 2.7% higher in 2021 than in the previous year. The President of the Federal Statistical Office stated that the economic performance continued to correlate strongly with COVID-19 infections and the corresponding protective measures in 2021.

On average, consumer prices in Germany increased by 3.1% year-on-year in 2021 compared to 2020. The high inflation rates we have been experiencing since July 2021 are caused by various factors, including base effects due to the low prices in the previous year. The temporary reduction in the VAT rates and the erosion of prices for mineral oil products in the previous year mean that the current overall inflation is felt all the more strongly. Furthermore, crisis-related factors, such as supply bottlenecks and the pronounced price increases in upstream processes are also starting to have an impact.

The harmonised index of consumer prices (HICP), which is calculated for European purposes, increased by an average of 3.2% year-on-year in Germany in 2021 compared to 2020.

b) Western and Eastern Europe

Due to the COVID-19 pandemic and the corresponding restrictions, the economy in the European Union recovered only slightly. The gross domestic product in the Eurozone showed a moderate improvement by 0.3% in 2021, while the gross domestic product in the European Union as a whole rose by 0.4%.

In the Eastern and Western European markets that are relevant for the Einhell Group, economic performance showed the following trend:

WESTERN EUROPE

(in %)	2021	2020
Spain	5.7	-12.8
France	6.3	-9.8
UK	6.8	-9.8
Italy	5.8	-10.6

EASTERN EUROPE

(in %)	2021	2020
Croatia	6.3	-9.0
Poland	5.1	-3.6
Romania	7.0	-4.8
Czech Republic	3.8	-6.5

Adjusted for seasonal effects, the unemployment rate in the Eurozone was 7.0% in December 2021 and therefore below the level of 8.2% in December 2020. The unemployment rate for the entire European Union stood at 6.4% in December 2021. One year before, the unemployment rate had still amounted to 7.5%.

In December 2021, 13.612 million men and women were unemployed in the European Union (11.481 million of which in the Eurozone).

The statistics authority Eurostat states that inflation in the Eurozone rose by 5.0% in 2021. One year before, the inflation rate had still amounted to -0.3%. The European Central Bank is targeting a medium-term inflation rate of just under 2%.

c) Overseas

The lockdown in the second half of 2021 slightly hampered the recovery of the Australian economy. In mid-2021 the gross domestic product (GDP) was still forecast to grow by more than 5% in 2021. Meanwhile, the experts have reduced their GDP growth forecast to about 3.4% for 2021. This economic performance, however, would still exceed the pre-crisis level. So far, Australia has come through the pandemic relatively unscathed.

In the South American countries where the Einhell Group is active, the following growth rates were achieved in 2021.

(in %)	2021	2020
Argentina	7.5	-11.8
Colombia	7.6	-8.2
Chile	11.0	-6.0

3.2 Performance report

Einhell Group increases revenue

The Einhell Group was able to raise its revenue sharply compared to the previous year. Group revenue amounts to EUR 927.4 million in financial year 2021, compared to EUR 724.7 million in the previous year.

The Einhell Group was thus able to significantly exceed its forecast for financial year 2021 announced at the beginning of 2021, in which the Board of Directors expected an increase in revenue to approx. EUR 739 - 746 million.

Revenue of the Einhell Group clearly exceeded the prior-year values in the first quarter. Revenue increased from EUR 154.9 million in the previous year's comparable quarter to EUR 229.6 million.

In the second quarter, revenue amounted to EUR 233.8 million, which clearly exceeded the prior-year level (EUR 186.7 million). This was owed to a marked increase in revenue in nearly all of the regions.

With the excellent business performance continuing in the third quarter, Einhell achieved significant revenue growth. At EUR 223.3 million, revenue in the third quarter was well above the previous year's level (EUR 188.0 million).

In the fourth quarter, revenue showed a highly positive development compared to the prior-year period, rising from EUR 195.1 million to EUR 240.7 million. Thus, the Group was able to achieve record revenue again in the 2021 financial year.

The regional development of revenue in financial year 2021 breaks down as follows:

REVENUE DEVELOPMENT BY REGION

(in EURk and %)	2021		2020		Change
D/A/CH	374,565	40.4	301,631	41.6	72,934	24.2
Western Europe	169,437	18.3	139,930	19.3	29,507	21.1
Eastern Europe	84,953	9.1	69,191	9.6	15,762	22.8
Overseas	214,936	23.2	170,993	23.6	43,943	25.7
Other countries	83,527	9.0	42,931	5.9	40,596	94.6
Total	927,418	100.0	724,676	100.0	202,742	28.0

The Einhell Group was able to significantly increase revenue in all regions in financial year 2021.

Further revenue growth is driven by the strong demand for the Power X-Change products that meanwhile account for a 37% share in Group revenue (previous year: 31%).

REVENUE DEVELOPMENT BY SEGMENT

(in EURk and %)	2021		2020		Change
Tools	600,967	64.8	484,084	66.8	116,883	24.1
Garden & Leisure	326,451	35.2	240,592	33.2	85,859	35.7
Total	927,418	100.0	724,676	100.0	202,742	28.0

4. EARNINGS

The Einhell Group has significantly increased its profitability. In financial year 2021, the Einhell Group generated earnings before tax of EUR 81.8 million (previous year: EUR 56.4 million). The pre-tax margin is 8.8% (previous year: 7.8%).

The following table shows the development of earnings before tax by region:

(in EURk)	2021	2020	Change
D/A/CH	24,892	16,221	8,671
Western Europe	17,917	12,074	5,843
Eastern Europe	12,911	7,465	5,446
Overseas	27,849	20,078	7,771
Other countries	9,332	4,602	4,730
Reconciliation	-11,065	-4,075	-6,990
Profit before income taxes	81,836	56,365	25,471

At the beginning of the 2021 financial year, the Einhell Group had expected an increase in revenue to about EUR 739 - 746 million and a pre-tax margin of approx. 7.0%.

Despite the positive business performance in the first three months of financial year 2021, the Board of Directors did not raise its forecasts. The main reason for this was the hike in freight rates due to the severe shortage of shipping capacity.

Given the fact that the business performance clearly exceeded expectations, in particular in April and May 2021, and the excellent order situation, the Board of Directors then did raise its forecast. The Einhell Group now expected revenue of EUR 800 million and a pre-tax margin of approx. 8.0%.

The exceptionally good performance in July and August prompted the Einhell Group's Board of Directors to raise the forecasts once again. Despite the high freight rates and increases in raw material prices, the Board of Directors now expected revenue of about EUR 830 to 850 million and a pre-tax margin of about 8.0% in financial year 2021.

The DIY boom led to another guidance increase at the beginning of November. At the end of the financial year, the Group expected revenue of EUR 880 million and a pre-tax margin of 8.5%.

The new EBT forecast with a margin of 8.5% was even slightly exceeded at the end of the financial year.

The earnings development benefited mainly from the revenue growth, while revenue growth resulted from strong demand for DIY products. Its excellent listings and broad presence on the market had a very positive effect for Einhell here. Especially at the beginning of the year, the share of e-commerce rose further as stores were temporarily closed and curfews were imposed.

The domestic market of the D/A/CH region continued to perform very well in the past financial year. Revenue in our Power X-Change products segment was once again expanded. At the same time, partial restrictions in the region because of the COVID-19 pandemic also led to another increase in DIY activities, and Einhell managed to benefit from this trend. Furthermore, the investments in the EINHELL

brand as well as the marketing activities in recent years are clearly showing their worth.

Current market data from Germany for 2021 reveals that Einhell has gained further market share in the field of battery-operated tools with its Power X-Change family. In terms of units sold, Einhell is still one of the top three sellers of power tools together with competitors Bosch and Makita. In the garden tools market, Einhell continues in 2021 to rank first in the field of cordless devices with the most units sold, ahead of Gardena and Bosch.

Revenue in the Western Europe region also increased again in financial year 2021. Particularly in France and Italy, revenue increased significantly over the previous year, and revenue growth in Spain was also highly satisfactory.

In the Eastern Europe region, both revenue and earnings were above the previous year once again in 2021. Einhell Turkey, in particular, which has not been quite as successful in recent years, was able to achieve excellent revenue and earnings levels in the past financial year. The companies with the highest revenue in this region are Einhell Turkey, Einhell Croatia and Einhell Poland.

In the Overseas region, revenues and earnings were also significantly higher than in the previous year. Ozito Industries Pty Ltd was able to increase revenue and earnings year-on-year despite strict temporary lockdowns. Einhell Chile, the largest subsidiary in South America, also performed very well.

Market penetration and in particular the cooperation with one important key account are very good in Chile and had a positive effect on revenue and earnings.

Other countries with the procurement companies in Asia made another significant contribution to consolidated net profit with revenue and earnings in this region also clearly exceeding the prior-year figures.

The gross profit margin is calculated as the ratio of gross profit (revenue minus cost of materials) to revenue and amounts to 35.9%, as in the previous year (35.9%).

Personnel expenses climbed by EUR 15,679 thousand to EUR 107,768 thousand. This is mainly due to the increase in headcount.

Other operating expenses increased by 29.0% year-on-year to EUR 140,745 thousand. This increase is mainly attributable to higher freight costs in connection with revenue growth, while higher marketing expenses weighed on the other operating expenses. The increase in marketing expenses is in line with the corporate strategy with a focus on further strengthening the Einhell brand. The objective is to further expand the high market shares reached in previous years.

The financial result improved by EUR 2,094 thousand to EUR -548 thousand. The financial result mainly comprises the interest result of EUR -1,522 thousand (previous year: EUR -764 thousand) and the gains/losses from currency translation/currency hedging amounting to EUR 974 thousand (previous year: EUR -1,844 thousand).

Tax expenses amounted to EUR 21.7 million in financial year 2021 (previous year: EUR 14.6 million). The increase is due to the positive business performance.

Consolidated net income after non-controlling interests of minority shareholders increased from EUR 41,201 thousand to EUR 58,626 thousand in the 2021 financial year.

5. ASSETS AND FINANCIAL POSITION

The material items in the statement of financial position for the financial years 2021 and 2020 are as follows:

Assets and financial position

(in EUR million)	2021	2020	Change
Assets	95.2	78.5	16.7
Goods inventories	450.0	194.8	255.2
Trade receivables	135.9	119.2	16.7
Cash and cash equivalents	11.5	32.1	-20.6
Equity	341.0	245.3	95.6
Liabilities to banks	182.3	22.9	159.4
Trade payables	137.5	96.8	40.7

Total assets increased by EUR 353.5 million or 73.9% to EUR 831.9 million.

Investments and non-current assets

Investments amounted to EUR 17.5 million in financial year 2021 (previous year: EUR 17.4 million), not including the right-of-use assets from the adoption of IFRS 16. Most of the investments pertain to land and buildings in company assets, plant and office equipment and assets under construction. The investments mainly pertain to the construction of a new logistics centre at the Landau an der Isar site.

Depreciation amounted to EUR 12,041 thousand in 2021 (previous year: EUR 9,623 thousand). This includes depreciation amounting to EUR 5,497 thousand (previous year: EUR 4,959 thousand) due to the adoption of IFRS 16.

Current assets

Inventories increased from EUR 194,761 thousand to EUR 449,976 thousand as at the reporting date. This was driven by the Board's decision to meet the problems in the supply chain with higher inventories. Fortunately, no major problems were encountered on the Asian procurement markets in financial year 2021. There were only some delays in deliveries at the beginning of the COVID-19 crisis due to the development in China and related curfews.

Trade receivables increased to EUR 135,859 thousand on the reporting date (previous year: EUR 119,197 thousand).

Financing

The financial requirements of the Einhell Group, which also vary greatly depending on the season, are driven in particular by the level of inventories and trade receivables. Stock turnover rates of inventories and the maturities of trade receivables play a major role here and have a significant impact on the financial requirements.

The Einhell Group's funding derives, on the one hand, from the equity that was provided by its shareholders when the Company was founded and the subsequent capital increases and retained earnings that are set aside in reserves. In addition, the Einhell Group procures debt capital in the form of loans and short-term borrowings as well as, to some extent, supplier loans. Loans are predominantly denominated in EUR. Supplier loans are mainly in CNY or USD. Anticipated cash flows from the payment of supplier liabilities in foreign currencies are largely hedged with the corresponding hedge transactions.

Owing to the very healthy and solid financing structure of the Einhell Group – the Einhell Group traditionally has an excellent equity ratio that currently stands at 41.0% – the Board of Directors does not anticipate any problems with current business operations, nor does it foresee any financing problems for future business volume in connection with the further expansion of the Group.

In financial year 2018, Einhell Germany AG took out long-term loans of EUR 25.0 million from three different banks. The loans are subject to a subsidy programme provided by the German development bank KfW and have a term of ten years. The first repayments were made in June 2020, the last are to be made at the end of March 2028. The loan agreements also contain a financial covenant. This covenant refers to the interest cover ratio. The interest rates are fixed and do not include any variable components. Einhell Germany AG complied with this covenant in financial year 2021.

The Group took out promissory note loans totaling EUR 75.0 million in financial year 2021. The maturities are five years for a tranche of EUR 50.0 million and seven years for a tranche of EUR 25.0 million. The promissory note loans do not require any collateral or covenants and are due upon maturity. The interest rates are fixed and do not include any variable components.

Liquidity

As at the reporting date, the Group had approx. EUR 238.0 million in unsecured credit lines including the public KfW loans at its disposal for the operating business. Overall, the Einhell Group had credit balances of EUR 11,513 thousand with banks and liabilities from debt capital to banks in the amount of EUR 182,282 thousand on the reporting date.

The subsidiaries participating in the cash pooling scheme therefore do not need to make investment or borrowing transactions on the capital markets, but simply have receivables or liabilities with Einhell Germany AG. This procedure serves to protect credit lines provided by banks and optimises the interest result. All Einhell Group companies are currently included in the cash pooling, as far as this is legally possible and feasible.

The Board of Directors declares that all the Einhell Group's land and buildings are free from third-party security interests. Transfers by way of security or comparable third-party rights do not exist. All inventories and receivables are also free from third-party security interests.

The summarised cash flow statement shows the development of the financial position in financial year 2021:

(in EUR million)	2021	2020	Change
Cash flow from operating activities	-151.4	36.3	-187.7
Cash flow from investing activities	-17.4	-17.7	+0.3
Cash flow from financing activities	146.5	-10.6	+157.1
	-22.3	8.0	-30.3
Changes from currency translation	1.7	-1.6	+3.3
Net decrease/increase in cash and cash equivalents	-20.6	6.4	-27.0
Cash and cash equivalents at beginning of period	32.1	25.7	+6.4
Cash and cash equivalents at end of period	11.5	32.1	-20.6

Despite the highly positive profit before income taxes of EUR 81,836 thousand, the cash flow from operating activities shows a significant deterioration since the previous year due to the increase in inventories (EUR 255,376 thousand) and the increase in trade receivables (EUR 18,544 thousand).

Cash flow from financing activities includes mainly repayment of loans (EUR 3,132 thousand) and taken up new loans (EUR 164,080 thousand) as well as the dividend distribution.

Cash flow from investing activities mainly pertains to capital expenditure for property, plant and equipment.

Due to negative cash flow from the operating business, cash and cash equivalents as of the reporting date fell by EUR 20.6 million to EUR 11.5 million. Their share in total assets amounts to $1.4\%$ (previous year: $6.7\%$ ).

Equity/debt capital

The Einhell Group has a good equity ratio of $41.0\%$ (previous year: $51.3\%$ ). Net debt in financial year 2021 amounts to EUR 170,768 thousand (previous year: net cash of EUR 9,174 thousand).

Debt capital taken out by the Einhell Group increased to EUR 490.9 million (previous year: EUR 233.1 million).

6. OVERALL ECONOMIC SITUATION

Again, the Einhell Group's revenue growth was primarily driven by its consistent product range policy and strong innovative products. The strong market penetration of the Power X-Change battery products in some areas had a highly positive effect here. High capital expenditure in the fields of product development and marketing and for intensifying customer relationships incurred higher costs, but is considered an investment in the further strategic development of Einhell. Moreover, the subsidiaries in politically or economically unstable countries, such as Argentina or Turkey, also performed very well in the last few years and in 2021. The accessories subsidiary kwb Germany GmbH showed a positive development and also makes a very positive contribution to revenue and earnings. This also includes revenues generated on the international markets of our other distribution companies.

As such, the Einhell Group's revenue and earnings improved once again, with both figures reaching new historic record levels.

7. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The European Parliament and the EU member states adopted a directive in 2014 to expand the reporting of large, publicly traded companies, banks, financial services providers and insurance companies (CSR Directive). The directive's objective is, in particular, to increase transparency with regard to ecological and social aspects of companies in the EU. This concerns disclosures of environmental, social and employee matters as well as with regard to the respect of human rights and combating corruption and bribery for both the Einhell Group and the Einhell Germany AG.

Non-financial group statement

The non-financial group statement, which must be submitted in accordance with Sections 315b, 315c German Commercial Code (HGB) as well as Sections 289 b-e German Commercial Code (HGB) is made available in the form of a CSR Report on the Einhell website at https://www.einhell.com/en/company/csr-report.html. It includes information on the business model and disclosures on environmental, social and employee matters, on the respect of human rights and on combating corruption and bribery. The non-financial report is not included in the combined management report.

8. OPPORTUNITIES AND RISKS REPORT

The risk management system of the Einhell Group seeks to identify and evaluate opportunities and risks at an early stage to be able to apply the required measures to exploit opportunities and limit any negative consequences on the business performance. This is aimed at ensuring the existence of the Group as a going concern and creating values for the long term by improving business decisions. The Einhell Group defines risk as any event that could negatively impact the achievement of operating or strategic objectives. The management decides on a case-by-case basis whether the risk is transferred (e.g. via insurances), recognised in the statement of financial position (e.g. via provisions, impairments) or deliberately accepted.

8.1 Description of the risk management and significant characteristics of the internal monitoring and risk management system for Group accounting processes as per Section 315 (4) German Commercial Code (HGB)

a) Description of risk management process

The risk management process in the Einhell Group is split into two stages. The first stage is the decentralised recognition of risks in subsidiaries and the various departments of Einhell Germany AG by the risk officers appointed by the Board of Directors. They are responsible for risk identification and assessment. The critical aspect here for the Einhell Group is identification, since no risk planning can be undertaken for risks that have not yet been identified. In the Einhell

Group, risks are identified by linking a bottom-up and a top-down approach. This means that centrally determined risks must be assessed. In addition, the Einhell subsidiaries and the heads of department in the Group are called upon to identify and assess specific risks for their relevant functional areas and departments. The identified risks are evaluated by multiplying the probability of the damage occurring and the maximum amount of damage. The evaluation focuses on net risk, i.e. the risk that remains after various preventative measures have been taken. The second step comprises risk consolidation, analysis and control by risk managers and corporate management.

Einhell uses various methods of risk management. Risk avoidance means that risks, and associated opportunities, will not be taken. Another management method minimises risks, for instance by using organisational methods, and is therefore also referred to as risk reduction. A further method is transferring risk by means of insurance, contracts with suppliers etc. Remaining risks are deliberately taken by the Einhell Group, depending on whether the risk/opportunity ratio is reasonable.

Risks are constantly monitored and reported on a quarterly basis. The most important risks are also discussed at meetings of the Board of Directors. Opportunities are not recorded separately in the risk management system.

b) Elements of the internal control and risk management system

The internal control system of the Einhell Group includes all principles, processes and measures to ensure the effectiveness, economy and validity of its accounting, and ensure compliance with applicable legal regulations.

The internal control system comprises integrated process controls and internal control systems.

The domestic controlling, investment controlling, finance, internal audit, Group accounting and legal departments constitute the internal control system of the Einhell Group. The Einhell Group companies make a forecast in the relevant financial year to budget the following financial year. Based on differentiated revenue planning, the corresponding items in the statement of financial position, the statement of income and cash flows are budgeted. These projected figures are collated for the Group into a budgetary statement of income.

The actual figures from the individual companies are processed on a monthly basis. As a result, a complete consolidated statement of income is devised that compares the budgeted and actual figures and allows for their analysis. The development of inventories, margins etc. is also reported for all companies on a monthly basis. The comparison is discussed with the members of the Board of Directors and with the managers of the separate divisions and companies. The analysis of the budgeted and actual figures permits relevant measures to be developed and implemented.

The internal monitoring system is comprised of measures that are integrated into the processes and measures that are independent of the processes. In addition to automated IT process controls, manual controls also form an important part of integrated process measures which are, for example, also carried out by the internal audit department. The Supervisory Board, the Group auditors and other audit bodies, e.g. tax auditors, are involved in the control system of the Einhell Group and carry out process-independent auditing activities.

The audit of the consolidated financial statements by the Group auditors is the main process-independent control measure with respect to Group accounting processes.

c) Important regulatory and control activities to ensure propriety and reliability of Group accounting

The internal control measures aimed at propriety and reliability of Group accounting ensure that transactions are fully recorded in compliance with statutory requirements and the stipulations of Einhell's articles of association as well as in a timely manner.

They also ensure that inventory-taking is carried out in a proper manner, and that assets and liabilities are properly recognised, measured and shown in the consolidated financial statements. The rules also ensure that the accounting documentation provides reliable and transparent information.

The control activities to ensure propriety and reliability of Group accounting comprise example analyses of circumstances and developments on the basis of specific key figure analysis. The separation of administration, implementation, invoicing and authorisation functions and the fact that they are performed by different persons reduces the likelihood of wilful contravention. It also ensures, for instance, that changes to the IT systems used for the underlying bookkeeping in Group companies are subject to full and timely logging of bookkeeping transactions in the relevant reporting period. The internal control system also guarantees that changes in the economic or legal circumstances of the Einhell Group are recognised and that new or amended statutory regulations for Group accounting are applied.

The International Financial Reporting Standards (IFRS) provide standardised accounting and valuation principles for the companies in Germany and other countries that are included in the Einhell consolidated financial statements. In addition to general accounting principles and methods, there are also regulations regarding the statement of financial position, statement of income, notes, management report, cash flow statement and segment reporting in place that comply with the legal requirements in the EU.

The Einhell accounting policies also stipulate concrete formal requirements regarding the consolidated financial statements. As well as determining the companies included in the consolidation, they also include detailed rules about the elements of reporting packages to be prepared by Group companies. The formal requirements also cover the mandatory application of standardised and complete form sets. The Einhell accounting principles also contain concrete rules about presentation and handling of Group billing transactions and any resulting reconciliation.

At Group level, specific control activities to ensure propriety and reliability of Group accounting comprise the analysis and correction (where necessary) of the individual financial statements prepared by Group companies. Central implementation of impairment tests for the cash-generating units identified by the Group allows for the application of uniform and standardised measurement criteria. The preparation and aggregation of further data for the preparation of

external information in the notes and management report, including significant events after reporting date, is also carried out at Group level.

8.2 Description of risks

To be able to effectively measure and control the identified risks, we evaluate them on the basis of the parameters "incidence rate" and the "effect on EBT" in the case of occurrence. Here, we rely on empirical data and forward-looking assumptions. The following table shows all the risk categories we have identified with their potential effects on EBT and the incidence rate. This enables us to take suitable risk mitigation measures at the level of individual risks.

The Einhell Group does not expect any major changes in risks in 2022. Some risks were adjusted compared with the previous year in line with current trends and expectations.

Possible current effects on earnings of risks after taking measures

Possible effects concerning:	effects on earnings		incidence rate
	-	2022 +	2022
Environment & Industry
Political risks	□□■■■■■		rare	46%
Industry risks	□□□□□■		rare	12%
Company-specific risks
Procurement risks	□□■■■■■		rare	32%
Sales market risks	□□■■■■■		improbable	9%
Strategic and expansion risks	□□□□■■		rare	11%
Liability risks, Legal risks	□□□■■■		improbable	9%
IT risks	□□■■■■■		rare	15%
Human resources risks	□□□■■■		rare	13%
Other risks	□□□□■■		rare	13%
Finance
Financial, interest and currency risks	□□■■■■■		rare	44%
Default risks	□□□■■■		rare	20%
Liquidity risks	□□□□□■		rare	12%
Tax risks	□□□■■■		improbable	8%

Effects on earnings:

□□□□□■ < 1.5 million €
□□□□■■ ≥ 1.5 million € < 3.0 million €
□□□■■■ ≥ 3.0 million € < 6.0 million €
□□■■■■■ ≥ 6.0 million € < 12.0 million €
□■■■■■■ ≥ 12.0 million € < 21.0 million €
■■■■■■■ ≥ 21.0 million €

Incidence rate:

≥ 0% < 10% improbable
≥ 10% < 50% rare
≥ 50% < 70% probable
≥ 70% very probable

Possible current effects on earnings of risks after taking measures

Possible effects concerning:	effects on earnings		incidence rate
	-	2021 +	2021
Environment & Industry
Political risks	□□■■■■■		rare	28%
Industry risks	□□□□□■		rare	12%
Company-specific risks
Procurement risks	□■■■■■■		rare	41%
Sales market risks	□□■■■■■		improbable	8%
Strategic and expansion risks	□□□□■■		rare	11%
Liability risks, Legal risks	□□□■■■		rare	10%
IT risks	□□■■■■■		rare	13%
Human resources risks	□□□■■■		rare	14%
Other risks	□□□□■■		rare	13%
Finance
Financial, interest and currency risks	□□■■■■■		rare	39%
Default risks	□□□■■■		rare	20%
Liquidity risks	□□□□□■		improbable	2%
Tax risks	□□□■■■		rare	23%

Effects on earnings:

□□□□□■ < 1.5 million €
□□□□■■ ≥ 1.5 million € < 3.0 million €
□□□■■■ ≥ 3.0 million € < 6.0 million €
□□■■■■ ≥ 6.0 million € < 12.0 million €
□■■■■■ ≥ 12.0 million € < 21.0 million €
■■■■■■ ≥ 21.0 million €

Incidence rate:

$\geq 0\% < 10\%$ improbable
$\geq 10\% < 50\%$ rare
$\geq 50\% < 70\%$ probable
$\geq 70\%$ very probable

Since the beginning of 2020, COVID-19 has spread all over the world. Restrictions of personal contacts and other measures were introduced in most countries to keep new infection numbers as low as possible. Many sectors have consequently suffered enormous revenue losses. Although Einhell, as a player in the DIY sector, also initially feared high revenue and earnings losses due to worldwide closures of DIY stores, the sales market of the sector actually developed very well in 2021. On balance, negative expectations with regard to the sales market risk were therefore not confirmed in 2021. And the positive trend is expected to continue.

The financial, interest rate and currency risk will also remain high in financial year 2022. In some countries, the risk of currency losses remains high. The instruments for hedging currency losses are either too expensive for these countries or entirely unavailable.

Sales market risks

The Einhell Group sees sales market risks arising mainly from the general development of demand in the sector, its own unit sales and revenue volumes and bad debt losses. Where possible, the Einhell Group uses trade credit insurance to counter credit risk. Innovative products that meet customer requirements in terms of design, functionality and value for money diminish the risk of a reduction in sales volume. This risk is being countered with the incremental introduction of two clearly defined product lines. One customer accounted for more than 10% of the Einhell Group's revenue in the past financial years. Nevertheless, the management has not identified any risk of dependency on this customer. The sales market risk, which is low compared to earlier years, is estimated to be at basically the same level as in the previous year.

Procurement risks

Procurement is a primary process in the Einhell business model and plays an important role for risk management within the Einhell Group. The objective of procurement is to ensure that products are acquired on time, are of sufficient quality and are reasonably priced.

One important factor is the suppliers. As the Einhell Group maintains long-term relationships with its suppliers, price and sourcing risks are minimised. With constant quality checks, suppliers are integrated into the quality control system of the Einhell Group. The Einhell Group is not dependent on individual suppliers. Einhell started to implement a second source strategy several years ago, which is still being optimised.

In order to optimise procurement planning, purchase quantities are regularly coordinated with the sales departments, reconciled and planned via an online order system. We also use a new disposition software that improves the coordination between procurement and sales in determining quantities and further consolidates orders. In order to enhance the transparency of order processing over the entire supply chain from the supplier to the national warehouses, we work with a newly implemented transport management system.

Where possible, the Einhell Group counters risk of price increases, such as from changes in commodity prices, by concluding the corresponding procurement and sales agreements, i.e. by reflecting changes in procurement prices on the sales side with a minimal time lag. A corresponding product mix, a broad customer base and a strong procurement structure support this process.

To minimise the supplier default risk, both the procurement and project management teams work with the finance department to develop joint hedging concepts.

The Einhell Group believes that the procurement risk for financial year 2022 is lower than in the previous year. At the end of 2020, the international freight rates reached an all-time high. Last year, the Einhell companies were able to partly compensate for higher raw material prices and freight rates through higher selling prices.

IT risks

Information and communications systems are the basis for many business processes of the Einhell Group. The subsidiary iSC GmbH operates a centralised IT service centre that is responsible for the implementation of the Group's international strategy. Given the rising speed and complexity of digitalisation, the dependency on IT systems also continues to increase. Resulting risks, such as the non-availability of systems or data, or unauthorised access, can never be fully eliminated and have a tremendous impact on business operations if an incident occurs. The Group takes diverse and innovative measures to minimise the likelihood of such risks occurring (incidence rate) to the greatest possible degree. Great importance is attached to the realisation of uniform international IT standards that are designed to ensure the effectiveness, efficiency and continuity of IT processes within a framework of corporate and statutory requirements.

A fixed part of these standards is the implementation of suitable measures within the area of physical security, use of high-performance and reliable hardware components, operation of carefully selected infrastructure and business applications, and provision of high-quality services and processes for the operation and further development of the entire information and communications structure. The organisation of IT processes is designed around an ITIL process framework.

Required specialist know how, such as in the area of local compliance requirements, is provided by qualified service partners, for whom the scope and extent of performance is contractually defined and who work closely with the IT organisation. Applications are operated in line with their criticality for business operations in highly dependable system environments and are subject to adequate business continuity mechanisms. IT-based precautions that are regularly checked and updated, in conjunction with the use of qualified staff and corresponding roles and legal concepts, ensure the best possible protection for confidential data.

The Einhell Group's IT strategy is closely linked to the business strategy and is subject to regular controls and adjustments to take account of the business environment. In order to protect itself as much as possible against cyberattacks, the Einhell Group continuously invests in the security of its IT systems.

Liability risks, legal risks

Liability risks arise for the Einhell Group mainly in connection with product liability. The main procurement market for Einhell products is the People's Republic of China. In order to ensure quality locally, a quality management system has been set up in China, which directly monitors supplier production and implements process controls. Our own quality control officers monitor rules and regulations on an ongoing basis. The remaining risk for product liability claims is covered by economically sensible and appropriate insurance. Product liability claims are classified and efficiently processed on the basis of a clear organisation and procedural structure. In addition, liability risks also include risk in connection with corruption. This risk is determined for each company based on the international corruption index.

This creates clear lines of responsibility and communication that are supported by written documentation of recall plans and checklists. This system also involves external specialist offices and experts.

The Einhell Group is exposed to legal risks. These may arise from conclusion of inter-company agreements with suppliers, customers and other business partners. Einhell is further exposed to various different international legal systems during the negotiation and conclusion of contracts. This applies in particular to the conclusion of corporate contracts, for example in the event of business incorporation, and patent agreements and similar contracts that are designed to protect the intellectual property of Einhell.

Einhell tries to minimise such risks by having its own legal department in Germany and by con

stantly checking and monitoring legal circumstances in China. Our own staff carries out coordination and checks, but we seek advice from external specialists from the relevant jurisdiction or legal system on a case-by-case basis.

Human resource risks

The Group has a number of instruments in place to counter economic risks, such as changes in the market or competitive environment, which help us to react flexibly to fluctuations in the order situation, particularly seasonal fluctuations. This includes working time accounts that are filled by working overtime and reduced by taking the corresponding leave. Another instrument for reacting more flexibly to fluctuations are temporary workers. All these measures help the Einhell Group to maintain a stable permanent workforce while reacting to changes in the order situation.

The professional expertise and individual commitment of our employees are important prerequisites for the success of the Einhell Group. Our strategic and holistic personnel development approach offers employees attractive opportunities for further training and career development.

In addition to offering vocational training on the basis of a dual system (part school, part practical work), we also offer dual university courses to ensure we have young talent to source from. We provide extensive and highly specific qualification measures to address risks resulting from fluctuation and loss of experience when older employees retire.

Financial, interest and currency risks

The continuing growth of the Einhell Group is also associated with financing risks. The Einhell Group manages financing risks by combining short-term and long-term financing strategies.

years. The first repayments were made in June 2020, the last are to be made at the end of March 2028. The loan agreements also contain a financial covenant. This covenant refers to the interest cover ratio. The interest rates are fixed and do not include any variable components. Einhell Germany AG complied with this covenant in financial year 2021.

Einhell Germany AG took out promissory note loans totalling EUR 75.0 million in financial year 2021. The maturities are five years for a tranche of EUR 50.0 million and seven years for a tranche of EUR 25.0 million. The promissory note loans do not require any collateral or covenants and are due upon maturity. The interest rates are fixed and do not include any variable components.

The Einhell Group also has mainly conventional lines of credit that were only partially utilised in financial year 2021.

Cash and cash equivalents, as well as equity, stood at very good levels in the reporting year.

The financial planning of the Einhell Group for the next five years is continuously adjusted to the current planning budget. This ensures that the further growth of the Group is financially secured.

The Einhell Group is also expanding its netting system and cash pool that was set up together by the parent company and its subsidiaries. Subsidiaries are financed almost exclusively by inter-Group loans. This reduces the risk of non-transparent and inefficient loan structures in the Group. The parent company has set up internal credit lines for the subsidiaries, the amount of which is determined by the budget and the expected business volume of the corresponding subsidiaries.

Risks from interest rate changes and fluctuations are managed, if required, with derivative financial instruments such as non-current interest swaps and interest caps. No need was identified in financial year 2021 to enter into interest rate derivatives. Risks from currency fluctuation are

mainly managed by using standard currency futures. The risk of currency fluctuation in procurement is covered where possible by hedging transactions in the form of currency futures and options. Currency hedging is carried out pursuant to IAS/IFRS regulations regarding hedge accounting for the individual hedge periods.

Please see the notes to the consolidated financial statements, section "6. RISK REPORT AND FINANCIAL INSTRUMENTS", for more information on interest, financial and currency risks.

Default risk

Einhell's corporate policy is to minimise default risk both from customers and suppliers by using instruments that are customary in international practice. This helps Einhell to evaluate default risks of the ordering company for each order based on the relevant economic situation. To counter the risks associated with new customers and high-risk countries in particular, Einhell sometimes uses letters of credit. In the offer phase, the sales and finance departments jointly decide on what collateral is required and adjust these requirements when the orders are placed. The company also uses external information from banks and credit agencies to support the assessment of risk. To minimise the supplier default risk, both the procurement and project management teams work with the finance department to develop joint security concepts.

The maximum default risk corresponds to the carrying amount of the receivables. Trade receivables pertain to DIY chains, specialist stores and discounters and amount to EUR 135,859 thousand (previous year: EUR 119,197 thousand).

Where possible, the Einhell Group uses trade credit insurance to counter credit risk. Despite the positive development of the sector, we continue to see a slightly increased risk of bad debt losses, as the expiry of the German government's protective shield for trade credit insurance is expected to result in the cancellation of cover commitments for many customers.

As the derivatives are acquired from well-known financial institutions, the Group expects that the maximum default risk from derivatives will be covered by their positive market value.

Bank balances amounted to EUR 11,513 thousand on the reporting date (previous year: EUR 32,087 thousand). These assets are held at first-rate, well-known banks.

The Einhell Group counters price and supply risks in supply markets by maintaining long-term supply relationships, which are constantly subjected to quality management.

Liquidity risk

Liquidity risk is the possibility that a company will no longer be in a position to meet its financial obligations (such as repayment of financial liabilities or payment of orders). The Einhell Group limits this risk by using effective management of net working capital and cash and traditional credit lines from well-known banks. At the reporting date, the Group had approx. EUR 238.0 million in unsecured credit lines at its disposal for the operating business. The Group also keeps a constant eye on the financial markets for financing opportunities in order to secure the financial flexibility of the Einhell Group and limit excessive refinancing risks.

The significant increase in the Einhell Group's working capital leads to an increase in liquidity risk.

Tax risks

In many countries, the Group is subject to the respective national tax provisions. Risks may arise from changes to local tax law or legal rulings and disparate interpretations of existing provisions. These risks can thus affect our tax expenses and income as well as tax receivables and liabilities. As a result of the complex transfer price guidelines of individual countries, which are sometimes interpreted from a one-sided perspective, we feel obliged to implement a margin policy in the Group that addresses this problem in order to counteract the risk of unjustified additional tax payments.

6 Unverified statement

General economic and sector risks

The Einhell Group is subject to general risks from the global economy and specific risks for the building supplies, specialist retail and DIY store sector.

The measures taken to contain the COVID-19 pandemic show the impact of policy decisions on the economy. Political risks have increased for the Einhell Group compared to the previous year.

Political risks

The Einhell Group is subject to global economic risks from its international operations. These can take the form of political and economic risks. Political decisions in the countries in which the Einhell Group operates today can affect the stability and economies of these countries. Also, policies in the countries in which the Einhell Group hopes to expand its operations can affect its business strategy. The risk also extends, for example, to the currency policies of countries, import and customs duties regulations or armed conflicts. The same also applies to procurement countries where Einhell sources its products. The Einhell Group seeks to keep abreast of general political risks by way of Group management maintaining close contacts with responsible local managers in order to constantly keep up to date with current developments. The Einhell Group also pursues a strategy of limiting investment in non-current assets, such as real estate, in such countries. This gives the Group maximum flexibility to react to unfavourable developments and to be able to have current assets available to take appropriate action in any country at any given time.

Because of the armed conflict between Russia and Ukraine, the recoverability of the trade receivables (EUR 1.9 million) and inventory (EUR 1.9 million) of Einhell Ukraine are fraught with uncertainty. It is doubtful whether trade receivables that are outstanding at the reporting date can still be collected, and whether warehouses and inventories will still be intact.

Sector risks

With respect to sector risks, the Einhell Group is subject to developments in the DIY sector and specialist retail stores as well as e-commerce in the relevant countries. It is also subject to the effects of behaviour and growth of competitors.

Changes in the sector, such as market concentration of customers, may therefore affect Einhell's business. Einhell seeks to minimise dependence on such factors by expanding its strong international market position. The establishment of a strong product range and customer-friendly service allows Einhell to strengthen its position with customers, even during changes in market concentration. Strategy changes by competitors may also affect the Einhell Group. New competitors may be in a position to take over market shares from Einhell, or existing competitors may affect the Group's market position. Einhell seeks to counter such changes by establishing a relatively wide product range, extending from Tools to Garden & Leisure, and also driving its international expansion. It is very hard to find a competitor in the market that offers a comparable product range while maintaining an international presence comparable to Einhell's⁶.

Strategic and expansion risks

Risks are also associated with implementing the Einhell Group strategy. They can result, for instance, from the fact that resources or elements required to implement the strategy are not available at a particular time or run up against realisation problems. The reasons for this could be related to personnel or technology issues.

The establishment and acquisition of subsidiaries also carries fundamental risks. Einhell seeks to counter these risks by conducting a fundamental investigation of the target country before it begins to identify new sales areas. This includes an assessment of sales environment and market potential. The Group also begins to search for suitable managing directors and spe

cialised staff at an early stage. With respect to infrastructure, Einhell selects a standard approach for each new sales subsidiary that is compatible with the internal processes and IT infrastructure. This reduces the risks associated with setting up a new subsidiary.

Risks also result from acquisitions of the Einhell Group. Einhell seeks to reduce these risks in that the takeover candidates are usually long-term partners of the Group. This ensures that new Group companies are integrated into Group structures and strategies from the outset. Due diligence is also carried out at the companies to be acquired; these investigations are carried out by internal staff from our investment control department, the legal department and, in individual cases, other Einhell Group departments, supported by external advisors.

Specific Group accounting risks

Specific Group accounting risks may arise from the conclusion of unusual or complex transactions. Transactions that are not normally carried out in the course of business also present a latent risk.

The discretionary scope given to employees for the recognition and measurement of assets and liabilities can also lead to other Group accounting related risks.

Other risks

In addition to the risks described above, some external factors are unforeseeable and may have consequences that are very difficult to control. Such factors may, if they actually occur, impact the further development of the Einhell Group. These risks include natural hazards, epidemics and terrorist attacks.

9. FORECAST

In 2022, social and economic life continues to be shaped by the COVID-19 pandemic. This forecast report of the Board of Directors is therefore still subject to uncertainty with regard to assessing the further development of the Einhell Group. Under the current conditions, the Board of Directors generally expects a continued positive development for Einhell. Despite the recurrent threat of new lockdown measures or restrictions for brick-and-mortar stores, the DIY sector and thus also Einhell succeed in maintaining high revenue levels and even further growth in revenue. The DIY sector partly benefits from stay-at-home measures as they also lead to high end-customer demand. The Board of Directors believes that the situation will also have a generally positive effect on Einhell's performance in 2022.

Because of the high brand awareness for Einhell products, sustained and stable customer relationships and long-term listings as well as a highly attractive product range, however, the Board of Directors sees no dependence on influences such as the COVID-19 pandemic⁷. In the point of view of the Board of Directors, Einhell's growth does not depend on the COVID-19 pandemic, but is largely driven by the above-mentioned success factors.

The positive trend continues to be counteracted by the current general challenges resulting from a significant increase in freight rates due to scarcity of freight resources. Prices for sea freight to the destination ports relevant for Einhell have multiplied in the last two years. At the same time, commodity prices have risen significantly. Both factors were generally handled very successfully by Einhell in 2021. However, further increases may have an impact on the development in 2022.

The GDP values, which are presented below, have partially been estimated and are based on

data published by the Federal Statistical Office, the International Monetary Fund, the EU Commission and the Austrian Federal Economic Chamber.

9.1 Expected development in the D/A/CH region

(in %)	2022	2021
GDP Germany	3.8	2.7

The German economy has grown by 2.7% year-on-year in 2021.

Economic recovery is still very much held back by problems in the supply chain, high inflation and the impact of the Omicron wave. The International Monetary Fund has now lowered its growth forecast for the current year. The IMF lowered its GDP growth forecast for Germany this year to 3.8%, which is 0.8 percentage points lower than last predicted.

The DIY sector in the D/A/CH region continued to benefit from high end-consumer demand for DIY products in 2021. This dynamic demand trend is generally expected to continue in 2022. Brick-and-mortar retailers continue to expect high business volumes and try to prevent product shortages because of supply chain problems by considerably increasing their inventories in preparation for the expected high demand. Demand is anticipated to increase significantly in the spring season, as soon as access restrictions are relaxed and the DIY stores can open again without limitation. Should stores not be permitted to open as hoped due to the pandemic situation, this will put some strain on the sales development in brick-and-mortar settings. It is generally expected that DIY sales will then shift even more to the online channel. At the same time,

7 Unverified statement

many brick-and-mortar retail chains have already positioned themselves very well in the e-commerce market and will therefore be able to partially compensate for lost offline sales with an increase in online revenues. However, not all market participants in the D/A/CH region are equally well positioned online. This could lead to a further concentration of DIY suppliers in the D/A/CH region. Pure-play e-commerce retailers will again benefit from high customer demand in 2022, and the share of e-commerce in DIY sales will continue to rise.

9.2 Expected development in the Western and Eastern Europe region

The macroeconomic forecast for the European Union for the current year was lowered to 4.0%. In 2023, growth in the EU is expected to decrease further to 2.8%, slightly more than previously expected. The economy in the Eurozone is expected to grow by 4.0% this year and by 2.7% in the coming year.

According to the European Commissioner for Economic Affairs Valdis Dombrovskis, growth is held back by the significant increase in inflation and energy prices, along with supply chain bottlenecks and shortages on the labour market. However, the economy is expected to pick up again later in the year, as soon as some of the bottlenecks are eliminated.

Inflation in the Eurozone will be significantly higher than previously expected, according to a forecast by the European Commission. The EU Commission's winter forecast estimates that inflation will peak this year at an annual average of 3.5%.

In the DIY markets in Western Europe and Eastern Europe, market activity is also dominated by the COVID-19 pandemic. Like in the D/A/CH region, stay-at-home measures lead to end consumers spending less money on e.g. travel or major purchases such as cars.

However, more projects are being carried out in the house and garden, and the organisation of leisure time shifts to personal projects that often include DIY and gardening. Due to the infection trend in Western and Eastern Europe, people's scope of movement will tend to still be restricted in 2022. It can therefore be assumed that demand for DIY products will remain high in this region as well. With regard to e-commerce, the Western Europe market is slightly more developed, which is why online sales are expected to increase here in particular. In Eastern Europe, specialist retailers are still a strong factor in many countries. In these countries it will depend on whether and to what extent this distribution channel will be affected by pandemic-related closures. All in all, the Board of Directors also expects a positive business development in these regions.

From today's perspective, the armed conflict between Russia and Ukraine does not lead to any change in the forecast for Einhell Group.

9.3 Expected development in the Overseas region

Growth forecasts for 2022 for Australia are still patchy. The economists of the National Australia Bank expect economic growth of 2.9%, while the commercial bank Westpac is much more optimistic with a growth forecast of 5%.

Growth is expected to be underpinned by private consumer spending. Over the past months, consumers have accrued substantial savings as a result of the lockdowns. Due to pent-up demand, at least some of these reserves are expected find their way back to the consumption cycle. With an unemployment rate of 4.6%, the labour market is in robust shape.

The extensive lockdown measures introduced by the Australian government in response to the COVID-19 pandemic shaped the Australian market in 2021. Australian consumers are expected to catch up on many postponed purchases in

2022, which will boost consumption. This also applies to DIY retail, which is still very much dominated by brick-and-mortar retail stores in Australia. Online shopping and subsequent deliveries still tend to be the more expensive option in Australia because of the sometimes very long distances involved. Conventional DIY stores in Australia are therefore expected to see a very good development.

The following economic growth rates are expected in South American countries where the Einhell Group is active:

(in %)	2022	2021
GDP Argentina	2.5	7.5
GDP Colombia	3.8	7.6
GDP Chile	2.5	11.0

In South America, the Board of Directors expects the positive development to continue once again in 2022. The pandemic has similar effects here as it has in other regions. A particularly strong development is expected in Chile, as Einhell already has a very strong market position with a strong presence in this country. Argentina is also expected to continue the positive development from 2020 and 2021 in 2022. However, there are increased signs that political change might be on the agenda in Argentina, which could further complicate foreign imports. The Argentine state continues to suffer from a lack of foreign currency and therefore finds it difficult to meet its obligations to international creditors. Therefore, further restrictions on imports are planned in order to limit the outflow of foreign exchange from the country⁸.

In order to efficiently meet the challenges of the highly complex import processes and goods distribution in South America, Einhell decided to establish a subsidiary in Uruguay. The subsidiary is based in a free trade zone of Montevideo where it operates a warehouse, serving as a logistics hub for the business with South American customers. The resulting potential with regard to goods supply and quality of delivery as well as

cost efficiencies is expected to already be leveraged in 2022.

9.4 Expected performance in the Other countries region

In the other countries where Einhell is active, similar effects will again be seen in 2022 as in the other regions. Einhell has numerous FOB direct customers in other countries and regions around the world that take the products to the local markets. Where markets are not affected by pandemic-related closures, high demand for DIY products from end customer gives rise to very strong revenue figures. Repeated local lockdowns cannot be ruled out here either. On balance, the Board of Directors expects positive effects to prevail in this region.

9.5 Expected performance in the markets relevant to the Einhell Group

a) Expected general development in 2022

The expected development in financial year 2022 continues to depend on the development of the COVID-19 pandemic. From the very beginning, the pandemic has, in certain aspects, created completely new market conditions for the companies, both on the procurement and distribution side. For the DIY sector, it brought positive as well as negative effects.

The positive effects result from the worldwide increase in demand for DIY products on the part of end customers. As people's scope of movement is restricted because of the measures taken to tackle COVID-19, the number of DIY projects to be realised at home and in the garden rises. And to accomplish this, they need the products Einhell has to offer.

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Negative effects continue to result from the extreme scarcity of freight equipment. On the one hand, this leads to major challenges in terms of delivery dates and, on the other hand, to significantly increased costs for sea freight.

The Board of Directors continues to believe that Einhell is in a position to tackle these challenges very well as the Group has already worked together with the relevant service providers and business partners to find good solutions that are now being made to work.

The increased demand for DIY products and Einhell's strong market position achieved in a whole range of countries will contribute to a positive revenue development. In addition to the increase in demand, however, this is also based on the excellent distribution and market presence already achieved by Einhell as well as an outstanding product range in terms of quality and price. The Board of Directors expects the business development in 2022 to benefit from these factors.

On 24 February 2022, Ukraine was attacked by the Russian Federation. In response, the countries of the European Union and other states, including the USA, have imposed far-reaching sanctions against Russian institutions and individuals. Economic sanctions affect for example the financial sector as well as the energy sector. The further development of this geopolitical crisis remains to be seen. Its impact on growth in Germany and Europe in particular as well as the further impact of rising energy prices on inflation and consumer confidence bring substantial uncertainty.

b) Expected development of the financial markets

Under the Biden administration in the USA, the monetary policy of the Federal Reserve as the world's largest central bank initially remained expansionary. Given the inflationary dangers that have now arisen, the FED has meanwhile reacted and abandoned its expansive monetary policy.

The ECB still maintains its extremely expansionary monetary policy of recent years. However, the dangers of inflation are also increasing in Europe and pressure on the ECB is mounting. Both central banks wanted to mitigate the negative effects of the COVID-19 pandemic with extremely low interest rates and a highly expansionary monetary policy. Still, the central banks cannot escape the increasing inflationary trend. This is why the Fed has already raised its interest rates and the ECB has become more likely to follow suit, even if it is still against any monetary tightening at the moment. The Board of Directors therefore expects a trend towards slight increases in the interest rate environment.

As far as the exchange rates are concerned, much will depend on how relations between the USA and China will develop further. The tensions between the USA and Russia will also impact the global capital markets and therefore the exchange rates. The EU's ambiguous positioning with regard to the USA, Russia and China is another factor of uncertainty, potentially leading to fluctuations in the exchange rates between euro, US dollar and Chinese RMB. The general trend is for the USD and RMB to become more expensive against the EUR. The Board of Directors of Einhell expects RMB and US dollar to continue to be rather strong in a continued volatile and politically charged environment and therefore carries on with its hedging strategy for the procurement of goods in foreign currency, which it has pursued successfully for many years.

c) Expected development of the sales markets

The development of the sales markets in 2022 will continue to be shaped by the effects of the COVID-19 pandemic. People continue to be somewhat restricted in their scope of movement, and travelling is still fraught with certain restrictions in 2022, with end consumers not always seeing travel as their first option. The economic difficulties of some sectors caused by the pandemic continue to create uncertainty in the population. People will therefore still be hesitant

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to make larger investments. People focus on their immediate family and on leisure activities around their house and garden. This is enjoyed and perceived as a welcome diversion and hobby where costs remain manageable and the results of one's own work are visible.

And for these projects, end consumers need products that are attractive and of high quality but affordable, like those offered by Einhell. The Board of Directors therefore expects that the current environment will lead to sustained high demand on Einhell's sales markets in 2022.

d) Expected development of the procurement markets

The situation on the procurement markets for DIY products remains challenging in 2022. In the pandemic years of 2020 and 2021, Asian factories were downright overwhelmed by the high demand for DIY products from end consumers in Europe, the USA, Australia and South America. Despite massive efforts to expand production capacities, not all manufacturers were always able to keep up with the development of demand, which led to the corresponding supply bottlenecks throughout the DIY sector. The supply with commodities, components and primary products is also still problematic for the manufacturers. In 2022, these supply bottlenecks will still be felt and lead to delays in restocking. The Board of Directors expects that this situation will last due to continued high demand. It has therefore introduced appropriate measures on the merchandise planning side in order to ensure high availability of goods.

The strong demand on the global consumer markets on the one hand and the slump in the industrial sector on the other has furthermore led to an imbalance in the global allocation of available sea freight containers.

This has caused an extreme shortage of available freight equipment in Asia, which in turn has made the cost of freight from Asia to Europe and all other countries in the world extremely expensive. Partial closures of port terminals or entire ports in Asia because of the COVID-19 pandemic

exacerbate the supply chain situation as well as delivery times. The Board of Directors recognised this at an early stage and was able to tackle these challenges on the basis of existing contracts as well as a very timely planning and materials management, and significantly increased inventories. This situation is expected to generally continue in 2022, albeit with slight improvements.

e) Expected development of the Einhell Group

The Einhell Group expects continued organic revenue growth of 5% to 10% year-on-year in financial year 2022. With regard to earnings before tax, the Einhell Group expects a pre-tax margin of approx. 8.5%.

(in EUR million)	2022 (budget)		2021 (actual)
	REVENUE	EBT	REVE-NUE	EBT
D/A/CH	394 - 412	28	374.6	24.9
Western Europe	198 - 208	15	169.4	17.9
Eastern Europe	96 - 101	10	85.0	12.9
Overseas	212 - 222	23	214.9	27.8
Other countries	74 - 77	11	83.5	9.3
Reconciliation	0	-2	0.0	-11.0
Total	974 - 1,020	85	927.4	81.8

For the D/A/CH region, the Einhell Group expects revenue of EUR 394 - 412 million, which is significantly above the previous year's level, and earnings before tax of approx. EUR 28.0 million. We anticipate that the market share gains seen in the last few years will continue to have a positive effect.

In Western Europe and Eastern Europe, we expect somewhat lower profits despite the increase in revenue. In several countries, we will invest heavily in our brand presence. This will lead to higher costs in the short term but significantly boost our future market presence. Furthermore, we are increasingly exposed to macroeconomic risks in some Eastern European countries that could lead to an economic downturn in these countries. Revenues generated in

Ukraine and Russia account for only 1% of total revenue, but the impact on assets and liabilities is difficult to assess at this stage.

In the Overseas region, we expect revenue in the 2022 financial year to be slightly above the previous year's level, and profit before income taxes to be slightly lower year-on-year. Especially in Australia, we expect costs to rise significantly.

In the other countries, we expect somewhat reduced revenue of EUR 74 - 77 million and a slight increase in margins.

f) Expected investments

In line with its corporate strategy, Einhell continues to invest heavily in product development and brand building in 2022.

With the continued high investment in these areas Einhell strives to further improve its product range, further expand its market-leading position with Power X-Change and establish the Einhell brand all over the world. The Power X-Change platform is intended to grow by another 50 or so products. The TV campaign, which was successfully implemented in six countries in 2021, is to be expanded to twelve countries in 2022.

The Einhell Group also invests every year in the expansion and maintenance of the Group's entire infrastructure. With the expansion of the logistics centre, a goods receiving terminal was completed in 2020 at a cost of approximately EUR 9.0 million. The expansion was continued in 2021, and a fully automated high-bay warehouse with 41,000 pallet spaces was built in Landau. Starting from 2022, more aisles are planned to be added as needed.

In addition, planning is underway for the creation of new work areas and office space to meet the increase in demand for these spaces. Einhell also continues to invest heavily in IT. The SAP project initiated in Asia is already being implemented. The potential acquisition of new subsidiaries would mean further investment, depending on whether it is possible to acquire interests in new companies in the target markets.

g) Expected financial situation

Efficient liquidity management remains a top priority of the Einhell Group in financial year 2022. We concentrate on constantly forecasting cash flows from operating activities, as this is our main source of liquidity. Liquidity is forecast by means of a liquidity plan that covers a period of twelve months. Another update was made to the financial planning for the next five years. Based on this financial planning, Einhell Germany AG decided to place promissory note loans on the market in order to finance the Group's further growth and long-term investments and to secure the low interest level. The promissory note loans were in many cases oversubscribed, showing the high demand on the part of investors for notes with very good credit ratings issued by solid companies such as Einhell. The promissory note loans, which were subscribed in December 2021, have a total volume of EUR 75 million and are divided into one tranche of EUR 50 million with a term of five years and another tranche of EUR 25 million with a term of seven years. For additional short-term working capital financing, Einhell continues to draw from short-term credit lines provided by its principal banks, which are sufficiently available.

9.6 Summary of expected developments

Outlook for financial year 2022

Because of the pandemic, the internationally positioned Einhell Group will continue to face highly disparate developments on the markets in the 2022 financial year. Based on previous experience during the pandemic and due to its strong positioning in the various distribution channels, the Einhell Group expects a continued positive business development.

9.7 Forward-looking statements, assumptions, uncertainties and assessment methods

The management report and Group management report for Einhell Germany AG and the Einhell Group contain forward-looking statements and assumptions. These always bear an element of uncertainty and are based on estimates and assumptions made in order to draw up corporate planning. The Einhell Group hereby advises that the forward-looking assumptions and estimates may turn out to be incorrect.

Einhell exercises great care with respect to assumptions when making forecasts that are subject to uncertainty. However, the risk from incorrect estimations cannot be excluded.

Einhell proceeds as follows in order to control planning and forecast uncertainties during planning of budgetary figures. First, Einhell plans revenue. The revenue plans are drawn up in detail for each Group company based on product groups. Revenues are also budgeted at customer group level and checked against product groups for plausibility.

In the same way, gross profit margins for each Group company are forecast at product group level and customer group level. Detailed costs are derived from revenue plans on the basis of type of cost and cost centre or reporting entity. Costs are checked for plausibility on the basis of the prior-year figures and checked for adequacy on the basis of relation to net revenues. Specific assumptions are made with respect to changes in costs, such as increases in salaries or changes in freight costs. General uncertainties related to market developments, price trends for important commodities or the development of other important cost categories are estimated and budgeted according to the principles of commercial prudence.

Supplementary provisions as per Section 289a and Section 315a German Commercial Code (HGB) for certain stock corporations are included in the notes to the consolidated financial statements under "2.9 Equity".

10. BUSINESS DEVELOPMENT OF EINHELL GERMANY AG

The annual financial statements of Einhell Germany AG were prepared in accordance with the provisions of the German Commercial Code (HGB). Einhell Germany acts as the parent company of the internationally positioned Einhell Group and is responsible for the strategic orientation of the Einhell Group. The management of Einhell Germany AG is integrated into Group management. Management is primarily based on the financial performance indicators of revenue and earnings before tax, income from investments and depreciation on financial assets.

In financial year 2021, Einhell Germany AG had an average headcount of 428 people (previous year: 395).

Earnings

Einhell Germany AG generates its revenues with the sale of products for DIY end consumers and professional craftsmen for use in the home, garden and for leisure purposes. Einhell supplies DIY stores and other distribution channels with a wide range of DIY products. In addition, Einhell Germany AG receives payments from its subsidiaries for product processing and marketing. The charging-on of related costs resulted in revenue of EUR 9.2 million (previous year: EUR 7.0 million) in financial year 2021. Einhell Germany AG generated significantly higher revenue in financial year 2021 than forecast and also clearly exceeded the prior-year level. Due to the increase in revenue as well as a stable cost situation, Einhell Germany AG generated impressive net income in 2021. It exceeded its earnings forecast announced at the beginning of the year.

Revenue above prior-year level

In the year under review, Einhell Germany AG generated revenue of EUR 361.5 million (previous year: EUR 285.4 million). Revenue was generated in the following regions.

REVENUE DEVELOPMENT BY REGION

(in EURk and %)	2021		2020		Change
Domestic	305,296	84.5	238,641	83.6	66,655	27.9
Western Europe	25,040	6.9	21,708	7.6	3,332	15.3
Eastern Europe	14,531	4.0	14,076	4.9	455	3.2
Overseas	655	0.2	487	0.2	168	34.5
Other countries	15,936	4.4	10,452	3.7	5,484	52.5
Total	361,458	100.0	285,364	100.0	76,094	26.7

REVENUE DEVELOPMENT BY DIVISION

(in EURk and %)	2021		2020		Change
Garden & Leisure	164,577	45.5	122,014	42.8	42,563	34.9
Tools	196,881	54.5	163,350	57.2	33,531	20.5
Total	361,458	100.0	285,364	100.0	76,094	26.7

Both divisions exceeded the forecasts for financial year 2021.

Gross profit margin above prior-year level

The gross profit margin increased from 33.4% in the previous year to 35.9% in financial year 2021.

Personnel expenses above prior-year level

Personnel expenses increased by EUR 5.7 million from EUR 35.6 million to EUR 41.3 million. This increase is predominantly due to the performance-based components of the remuneration for key management personnel.

Other operating expenses exceed prior-year level

Other operating expenses rose by EUR 16.9 million from EUR 59.5 million to EUR 76.4 million. This increase was mainly due to marketing and logistics expenses.

Income from investments

Income from investments (including the relevant write-ups and write-downs on interests in affiliated companies) developed as follows compared to the previous year:

(in EUR million)	2021	2020	Change
Income from investments	7.1	16.3	-9.2
Income from profit transfer agreements	6.3	4.2	2.1
Expenses from the transfer of losses	-2.1	-0.4	-1.7
	11.3	20.1	-8.8
Write-ups on financial assets	3.4	0.0	3.4
Impairment of financial assets	0.0	-1.2	1.2
	3.4	-1.2	4.6
Income from the reduction of write-downs on receivables from affiliated companies	5.8	0.1	5.7
	5.8	0.1	5.7
Income from investments	20.5	19.0	1.5

Driven by positive developments and corporate planning, financial assets were written up by EUR 3.4 million and receivables from affiliated companies by EUR 5.8 million in financial year 2021. The write-ups on financial assets pertained to Einhell Hellas A.E. and kwb Germany GmbH. Write-ups on receivables refer to receivables from Einhell Turkey Dis Ticaret Anonim Sirketi and kwb Germany GmbH.

Earnings and net income exceed prior-year level

The Company generated earnings after tax of EUR 30.0 million (previous year: EUR 22.4 million) in 2021. Net income also increased from EUR 22.3 million to EUR 29.9 million. Earnings before tax, income from investments and impairment of financial assets increased from EUR 7.3 million to EUR 16.0 million. This means that the forecast for the financial year of EUR 12.5 to 13.5 million was slightly exceeded.

PROFIT AND LOSS STATEMENT

1 January to 31 December
(in EUR million)

Revenue	2021	2020	Change	%
Other income	12.0	6.4	5.6	87.5
Cost of materials	-231.8	-190.1	-41.7	-21.9
Personnel expenses	-41.3	-35.6	-5.7	-16.0
Scheduled depreciation	-2.0	-1.2	-0.8	-66.7
Other operating expenses	-76.4	-59.5	-16.9	-28.4
Operating profit	22.0	5.4	16.6	307.4
Financial result	14.5	20.9	-6.4	-30.6
Earnings before tax (EBT)	36.5	26.3	10.2	38.8
Income taxes	-6.5	-3.9	-2.6	-66.7
Earnings after tax	30.0	22.4	7.6	33.9
Other taxes	-0.1	-0.1	0.0	0.0
Net income	29.9	22.3	7.6	34.1

Financial performance and net assets

Investments

Investments amounted to EUR 14.2 million in financial year 2021. EUR 1.9 million of this amount relates to increases in share capital at subsidiaries. The remaining investments of EUR 12.3 million comprise investments of EUR 1.2 million in intangible assets including advance payments, EUR 1.2 million in land, land rights and buildings including buildings on third-party land, EUR 0.5 million in other equipment, operating and office equipment and EUR 9.5 million in advance payments and assets under construction. The investments mainly pertain to the construction of a new modern logistics centre with a high-bay warehouse, which was capitalised at EUR 17.2 million in the past financial year.

Increase in inventories

Inventories increased from EUR 77.7 million to EUR 164.1 million as at the reporting date. This was driven by the Board's decision to meet the problems in the supply chain with higher inventories.

Trade receivables

As in the previous year, trade receivables amounted to EUR 22.2 million as at the reporting date.

Increase in receivables from affiliated companies

Receivables from affiliated companies increased by EUR 106.3 million to EUR 166.1 million compared to the previous year. Receivables from affiliated companies comprise both trade receivables and receivables from loans granted. The receivables from loans granted include impairment losses of EUR 0.8 million from previous years.

Increase in provisions

Other provisions increased by EUR 10.1 million from EUR 24.0 million to EUR 34.1 million. This increase is predominantly due to the performance-based components of the remuneration for key management personnel.

Increase in liabilities

Trade payables rose by EUR 9.7 million from EUR 9.1 million to EUR 18.8 million.

Liabilities to affiliated companies fell by EUR 6.7 million to EUR 59.2 million. This includes trade payables and also liabilities from borrowing.

Increase in equity

Equity increased by EUR 21.7 million or 11.2% to EUR 214.7 million (previous year: EUR 193.0 million) in financial year 2021. The change in equity resulted from the dividend distribution of EUR 8.2 million approved on 18 June 2021 and from net income of EUR 29.9 million. The equity ratio of Einhell Germany AG as at 31 December 2021 is 41.7% (previous year: 60.4%).

Financial management principles and objectives

Einhell Germany AG's funding derives, on the one hand, from the equity that was provided by its shareholders when the Company was founded and the subsequent capital increases and retained earnings that are set aside in reserves. In addition, Einhell Germany AG procures debt capital in the form of loans and short-term borrowings as well as, to some extent, supplier loans. Loans are predominantly denominated in EUR. Supplier loans are mainly in CNY or USD. Anticipated cash flows from the payment of supplier liabilities in foreign currencies are largely hedged with the corresponding hedge transactions.

Owing to the very healthy and solid financing structure of Einhell Germany AG, the Board of Directors does not anticipate any problems with current business operations, nor does it foresee any financing problems for future business volume in connection with the further expansion.

In financial year 2018, Einhell Germany AG took out long-term loans of EUR 25.0 million from three different banks. The loans are subject to a subsidy programme provided by the German development bank KfW and have a term of 10 years. The first repayments were made in June 2020, the last are to be made at the end of March 2028. The loan agreements also contain a financial covenant. This covenant refers to the interest cover ratio. The interest rates are fixed and do not include any variable components. Einhell Germany AG complied with this covenant in financial year 2021.

The Group uses effective cash pooling and a cash concentration system to optimise cash management and reduce debt capital to the greatest possible extent. This means that the balances of the different Group companies' bank accounts are transferred to a master account of Einhell Germany AG. As a consequence, only the balance of the master account will have to be covered by borrowings on the capital market. The subsidiaries participating in the cash pooling scheme therefore do not need to make investment or borrowing transactions on the capital markets, but simply have receivables or liabilities with Einhell Germany AG. This procedure serves to protect credit lines provided by banks and optimises the interest result. All Einhell Group companies are currently included in the cash pooling, as far as this is legally possible and feasible.

The Board of Directors declares that all land and buildings of Einhell Germany AG are free from third-party collateral.

Transfers by way of security or comparable third-party rights do not exist. All inventories and receivables are also free from third-party collateral.

The summarised cash flow statement shows the development of the financial position in financial year 2021:

STATEMENT OF CASH FLOWS

(in EUR million)	2021	2020	Change
Cash flow from operating activities	-64.0	11.5	-75.5
Cash flow from investing activities	0.4	-1.8	2.2
Cash flow from financing activities	45.4	0.5	44.9
Net increase/decrease in cash and cash equivalents	-18.2	10.2	-28.4
Cash and cash equivalents at the beginning of the period	21.5	11.3	10.2
Cash and cash equivalents at the end of the period	3.3	21.5	-18.2

As in the previous year, cash and cash equivalents comprise cash in hand and bank balances.

MATERIAL ITEMS IN THE STATEMENT OF FINANCIAL POSITION

as of 31 December
(in EUR million)

Assets	145.6	130.0	15.6	12.0
Inventories	164.1	77.7	86.4	111.2
Trade receivables	22.2	22.2	0.0	0.0
Receivables from affiliated companies	166.1	59.8	106.3	177.8
Cash and cash equivalents	3.3	21.5	-18.2	-84.7
Equity	214.7	193.0	21.7	11.2
Other provisions	34.1	24.0	10.1	42.1
Liabilities to banks	180.2	22.6	157.6	697.3
Liabilities to affiliated companies	59.2	65.9	-6.7	-10.2

Headcount

In financial year 2021, Einhell Germany AG had an average headcount of 428 employees (previous year: 395).

Report on the relations with affiliated enterprises

The majority of the shares in Einhell Germany AG are held by Thannhuber AG. A report pursuant to Section 312 of the German Stock Corporation Act (AktG) was prepared on Einhell Germany AG's relationships with affiliated companies, which is concluded with the following statement: "During the period under review, Einhell Germany AG did not enter into any legal transactions with Thannhuber AG, or in the interest or at the request of Thannhuber AG, and did not take or refrain from taking any measures that would have disadvantaged Einhell Germany AG."

Events after reporting date

For business transactions of particular importance that occurred after the end of the reporting year, please refer to the report on events after the reporting date in the Group notes and in the notes.

Risks and opportunities

The business development of Einhell Germany AG is generally subject to the same op

portunities and risks as the business development of the Einhell Group. Einhell Germany AG generally participates in the risks and opportunities of its subsidiaries and investments in accordance with its respective interest.

In its capacity as the parent company of the Einhell Group, Einhell Germany AG is responsible for providing funding to its subsidiaries. The refinancing of Einhell Germany AG is ensured by borrowing from banks. Einhell Germany AG as well as its subsidiaries benefit from the favourable refinancing conditions.

The risk of a claim arising from contingent liabilities is considered to be low. This assessment is based on the fact that the subsidiaries of Einhell Germany AG have sufficient equity or credit lines available to ensure that the obligations entered into can be met.

Einhell Germany AG has not issued any letters of comfort for the benefit of either subsidiaries or third parties.

As the parent company of the Einhell Group, Einhell Germany AG is integrated into the Group-wide risk management system. For more information, please refer to section "8. OPPORTUNITIES AND RISK REPORT" of the Einhell Group.

The description of the internal control system for Einhell Germany AG in accordance with the provisions of Section 289 (5) German Commercial Code (HGB) is provided under "8.1 Description of the risk management and significant characteristics of the internal monitoring and risk management system for Group accounting processes as per Section 315 (4) German Commercial Code (HGB)" in the combined management report.

Outlook 2022

Einhell Germany AG expects revenue of approx. EUR 375 to EUR 380 million in financial year 2022. A share of 55% is expected for the "Tools" division and a share of 45% for the

"Garden & Leisure" division. Earnings before tax, income from investments and impairment of financial assets are expected to be in a range of EUR 21.5 to 22.5 million in 2022.

In its function as the parent company of the Einhell Group, the future business development of Einhell Germany AG also depends on the development of the operating companies of the Einhell Group. For information on the macroeconomic and market development, please refer to the "FORECAST REPORT" of the Einhell Group.

Landau a. d. Isar, 31 March 2022

Einhell Germany AG

The Board of Directors

Andreas Kroiss

Jan Teichert

Dr Markus Thannhuber

Dr Christoph Urban

RESPONSIBILITY STATEMENT OF THE BOARD OF DIRECTORS

The Responsibility Statement of the Board of Directors pursuant to Section 289f and Section 315d of the German Commercial Code (HGB) is available on the website of Einhell Germany AG (https://www.einhell.com/investor-relations/corporate-governance/).

Einhell Germany AG applies corporate governance practices to ensure compliance with legal regulations that go beyond statutory requirements. In particular, Einhell Germany AG observes various policies and procedural rules that are aimed at all Group employees and are designed to avoid risks resulting from non-compliance with legal provisions.

For example, compliance with legal requirements preventing insider trading is ensured by publication of insider trading rules governing trading with securities for executive body members and employees who have access to insider information. Corporate governance practices with regard to compliance are constantly monitored and amended.

The provisions of the new European Market Abuse Directive, which came into force in 2016, were implemented consistently in the Group.

II CONSOLIDATED STATEMENT OF FINANCIAL POSITION

ASSETS

(in EURk)	Note	31.12.2021	31.12.2020
Intangible assets	(2.2)	19,627	19,828
Property, plant and equipment	(2.1)	57,173	46,158
Right-of-use assets	(2.1)	18,401	12,533
Non-derivative financial assets	(2.3)	915	751
Derivative financial assets	(2.7)	14,596	574
Other non-financial assets	(2.8)	1,963	987
Deferred tax assets	(2.4)	17,430	12,993
Non-current assets		130,107	93,823
Inventories	(2.5)	449,976	194,761
Trade receivables	(2.6)	135,859	119,197
Non-derivative financial assets	(2.3)	1,174	360
Derivative financial assets	(2.7)	54,332	6,835
Income tax receivables		2,736	1,039
Other non-financial assets	(2.8)	45,667	30,268
Contract assets		542	54
Cash and cash equivalents		11,513	32,087
Current assets		701,799	384,601
Total assets		831,906	478,424

EQUITY AND LIABILITIES (in EURk)	Note	31.12.2021	31.12.2020
Subscribed capital	(2.9)	9,662	9,662
Capital reserve	(2.9)	26,677	26,677
Retained earnings	(2.9)	274,619	224,398
Other reserves		26,600	-17,822
Equity of shareholders of Einhell Germany AG		337,559	242,915
Non-controlling interest	(2.10)	3,413	2,431
Equity		340,972	245,346
Employee benefits	(2.11)	8,956	7,915
Provisions for other risks	(2.12)	686	1,225
Liabilities from debt capital	(2.13)	91,406	19,538
Non-derivative financial liabilities	(2.14)	2,329	1,462
Derivative financial liabilities	(2.16)	120	738
Lease liabilities	(2.17)	13,492	10,019
Other non-financial liabilities	(2.18)	0	297
Deferred tax liabilities	(2.4)	20,494	3,906
Non-current liabilities		137,484	45,100
Employee benefits	(2.11)	28,010	19,130
Provisions for other risks	(2.12)	28,400	26,593
Income tax liabilities		8,823	4,041
Liabilities from debt capital	(2.13)	90,875	3,375
Non-derivative financial liabilities	(2.14)	38,926	9,613
Derivative financial liabilities	(2.16)	1,359	6,096
Trade payables		137,500	96,799
Lease liabilities	(2.17)	5,155	2,796
Other non-financial liabilities	(2.18)	13,745	19,001
Contract liabilities	(2.15)	657	534
Current liabilities		353,450	187,978
Total equity and liabilities		831,906	478,424

III CONSOLIDATED INCOME STATEMENT

(in EURk)	Note	31.12.2021	31.12.2020
Revenue	(3.1)	927,418	724,676
Other own work capitalised	(3.2)	421	1,041
Other operating income	(3.3)	9,259	8,931
Cost of materials	(3.4)	-594,161	-464,826
Personnel expenses	(3.5)	-107,768	-92,089
Depreciation and amortisation	(3.6)	-12,041	-9,623
Other operating expenses	(3.7)	-137,442	-104,702
Impairment losses pursuant to IFRS 9		-3,303	-4,401
Financial income	(3.8)	6,017	9,424
Financial costs	(3.8)	-6,565	-12,066
Financial result	(3.8)	-548	-2,642
Profit before income taxes		81,836	56,365
Income taxes	(3.9)	-21,682	-14,560
Earnings after tax		60,154	41,805
Non-controlling interest		1,528	604
Earnings after tax and non-controlling interests		58,626	41,201
Earnings per ordinary share	(3.10)	15.50	10.89
Earnings per preference share	(3.10)	15.56	10.95

IV CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(in EURk)	31.12.2021	31.12.2020
Consolidated net profit	60,154	41,805
Items of other comprehensive income that were or can be reclassified to profit or loss
Unrealised gains (previous year: losses) from currency translation	2,307	-3,493
Unrealised gains (previous year: losses) from derivative financial instruments used for hedging purposes	41,668	-1,041
	43,975	-4,534
Items of other comprehensive income that will not be reclassified to profit or loss in future periods
Unrealised losses from financial instruments at fair value through other comprehensive income	-3	-4
Remeasurement of employee benefits	445	-411
Other comprehensive income, after tax	44,417	-4,949
thereof share of other comprehensive income attributable to non-controlling interests, after tax (2.10)	-5	-11
thereof share of other comprehensive income attributable to shareholders of Einhell Germany AG, after tax	44,422	-4,938
Consolidated comprehensive income	104,571	36,856
thereof share of consolidated comprehensive income attributable to non-controlling interest	1,523	593
thereof share of consolidated comprehensive income attributable to shareholders of Einhell Germany AG	103,048	36,263

V CONSOLIDATED STATEMENT OF CASH FLOWS

(in EURk)	Note	31.12.2021	31.12.2020
Cash flows from/used in operating activities
Profit before income taxes		81,836	56,365
+ Depreciation and amortisation of intangible assets and property, plant and equipment	(3.6)	12,041	9,623
- Interest income	(3.8)	-113	-138
+ Interest expenses	(3.8)	1,635	903
+/- Other non-cash expenses and income		-1,158	1,660
Operating profit before changes in net working capital		94,241	68,413
+/- Decrease/increase in trade receivables		-18,544	-28,653
+/- Decrease/increase in inventories		-255,376	-23,041
+/- Decrease/increase in other assets		-17,169	-13,490
+/- Decrease/increase in assets held for sale		0	2,256
+/- Increase/decrease in non-current liabilities		696	1,642
+/- Increase/decrease in current liabilities		34,430	23,072
+/- Increase/decrease in trade payables		33,567	20,036
+/- Increase/decrease in liabilities in connection with assets held for sale		0	-79
Cash flows generated from operating activities		-128,155	50,156
- Taxes paid		-21,914	-13,109
+ Interest received		115	150
- Interest paid		-1,485	-887
Net cash from/used in operating activities		-151,439	36,310
Cash flows from/used in investing activities
- Payments to acquire assets		-17,483	-17,419
- Payments for acquisition of consolidated companies		0	-315
+ Proceeds from disposal of assets		103	47
Net cash used in investing activities		-17,380	-17,687

Cash flows from/used in financing activities
+ Proceeds from taking out loans	164,080	2,110
- Payments for repayment of loans	-3,132	-2,344
- Payments for acquisition of equity investments	-655	0
+ Proceeds from non-controlling interest	50	0
- Dividend payments to shareholders of Einhell Germany AG	-8,178	-5,158
- Dividend payments to non-controlling interests	-379	-373
- Payments for redemption portion of lease liabilities	-5,251	-4,878
Net cash from (previous year: used in) financing activities	146,535	-10,643
Changes to cash and cash equivalents due to currency exchange	1,710	-1,622
Net decrease/increase in cash and cash equivalents	-20,574	6,358
Cash and cash equivalents at beginning of reporting period	32,087	25,729
Cash and cash equivalents at end of reporting period	11,513	32,087

Additional details are shown in the notes under item 5.

VI CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

in EURk					Other reserves				Equity of shareholders of Einhell Germany AG	Share of non-controlling interests	Total equity
	Note	Sub-scribed capital	Capital reserve	Retained earnings	Currency translation reserve	Reserve for financial instruments FVOCI	Remeasurement reserve pursuant to IAS 19	Derivative financial instruments
1 January 2020		9,662	26,677	189,565	-12,732	31	-1,803	1,620	213,020	1,852	214,872
Consolidated net profit		-	-	41,201	-	-	-	-	41,201	604	41,805
Unrealised gains/losses		-	-	-	-3,482	-4	-604	-1,978	-6,068	-11	-6,079
Deferred taxes on unrealised gains/losses		-	-	-	-	-	193	937	1,130	-	1,130
Comprehensive income		-	-	41,201	-3,482	-4	-411	-1,041	36,263	593	36,856
Dividends	(2.9)	-	-	-5,158	-	-	-	-	-5,158	-373	-5,531
Other changes		-	-	-1,210	-	-	-	-	-1,210	359	-851
31 December 2020		9,662	26,677	224,398	-16,214	27	-2,214	579	242,915	2,431	245,346
Consolidated net profit		-	-	58,626	-	-	-	-	58,626	1,528	60,154
Unrealised gains/losses		-	-	-	2,312	-3	601	59,488	62,398	-5	62,394
Deferred taxes on unrealised gains/losses		-	-	-	-	-	-156	-17,820	-17,976	-	-17,976
Comprehensive income		-	-	58,626	2,312	-3	445	41,668	103,048	1,523	104,571
Dividends	(2.9)	-	-	-8,178	-	-	-	-	-8,178	-591	-8,769
Other changes		-	-	-227	-	-	-	-	-227	50	-177
31 December 2021		9,662	26,677	274,619	-13,902	24	-1,769	42,247	337,559	3,413	340,972

VII NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. PRINCIPLES AND METHODS

1.1 Reporting company

Einhell Germany AG is a public limited company (Aktiengesellschaft) pursuant to the laws of the Federal Republic of Germany. The Company is registered in the Commercial Register of the Local Court (Amtsgericht) in Landshut under number HRB 2171; its registered office is at Wiesenweg 22, 94405 Landau an der Isar, Germany.

Einhell Germany AG and its subsidiaries manufacture and sell manually operated, petrol powered and electronic tools, electrical tool accessories, metal and plastic products for DIY, garden and leisure activities, and air-conditioning and heating products.

On 31 March 2022, the Board of Directors released the consolidated financial statements to be passed on to the Supervisory Board and approved them for publication.

1.2 Basis of preparation

The consolidated financial statements of Einhell Germany AG and its subsidiaries (the Einhell Group) were drawn up in accordance with section 315e of the German Commercial Code (HGB) (consolidated financial statements in accordance with international accounting standards). They are also consistent with International Financial Reporting Standards (IFRS) and their interpretations, as applicable in the European Union.

a) Standards applied

The accounting and valuation methods used in the consolidated financial statements are in accordance with the IFRSs applicable in the EU as at 31 December 2021. The Group applied the following standards and amendments to standards to be adopted for the first time from 1 January 2021.

Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 „Interest Rate Benchmark Reform – Phase 2“; effective for annual periods beginning on or after 1 January 2021.
Amendments to IFRS 4 „Insurance Contracts – Deferral of IFRS 9“; effective for annual periods beginning on or after 1 January 2021.
Amendments to IFRS 16 „COVID-19-Related Rent Concessions“; effective from 1 April 2021.

These amendments do not have any material effects on net assets, financial position and results of operations as presented in the consolidated financial statements.

b) Standards and interpretations not applied earlier than mandatory

The IASB has issued the following standards, interpretations and amendments to existing standards, for which the application was not mandatory as at 31 December 2021 and which have not been applied prematurely by the Einhell Group. The Einhell Group does not currently plan a premature adoption of standards, interpretations and amendments.

The following standards, interpretations and amendments to existing standards are not applicable within the EU until they have been adopted under the prescribed EU procedures (endorsement process).

IAS 1 „Classification of Liabilities as Current or Non-Current“; effective for annual periods beginning on or after 1 January 2023. We do not expect any material effects on net assets, financial position and results of operations as presented in the consolidated financial statements.
Amendments to IAS 12 „Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction“; effective

for annual periods beginning on or after 1 January 2023. We do not expect any effects on net assets, financial position and results of operations as presented in the consolidated financial statements.

Amendments to IFRS 17 "Insurance contracts: Initial Application of IFRS 17 and IFRS 9 – Comparative Information"; effective for annual periods beginning on or after 1 January 2023. We do not expect any effects on net assets, financial position and results of operations as presented in the consolidated financial statements.
Amendments to IFRS 10 and IAS 28 "Sale or Contribution of Assets between an Investor and its Associate or Joint Venture"; adoption date to be determined. We do not expect any effects on net assets, financial position and results of operations as presented in the consolidated financial statements.

The following provisions have already been endorsed in EU law in compliance with the standard EU process.

Amendments to IFRS 3 "Business Combinations"; effective for annual periods beginning on or after 1 January 2022. We do not expect any effects on net assets, financial position and results of operations as presented in the consolidated financial statements.
Amendments to IAS 1 and IFRS Practice Statement 2, "Presentation of Financial Statements and Making Materiality Judgements titled Disclosure of Accounting Policies"; effective for annual periods beginning on or after 1 January 2023. We do not expect any effects on net assets, financial position and results of operations as presented in the consolidated financial statements.
Amendments to IAS 8 "Definition of Accounting Estimates"; effective for annual periods beginning on or after 1 January 2023. We do not expect any effects on net assets, financial

position and results of operations as presented in the consolidated financial statements.

Amendments to IAS 16 "Property, Plant and Equipment"; effective for annual period beginning on or after 1 January 2022. We do not expect any effects on net assets, financial position and results of operations as presented in the consolidated financial statements.
Amendments to IAS 37 "Provisions, Contingent Liabilities and Contingent Assets"; effective for annual periods beginning on or after 1 January 2022. We do not expect any effects on net assets, financial position and results of operations as presented in the consolidated financial statements.
Annual Improvements to IFRS Standards 2018 - 2020; effective for annual periods beginning on or after 1 January 2022. We do not expect any effects on net assets, financial position and results of operations as presented in the consolidated financial statements.
Amendments to IFRS 3 "Amendments to References to the Conceptual Framework in IFRS Standards"; effective for annual periods beginning on or after 1 January 2022. We do not expect any material effects on net assets, financial position and results of operations as presented in the consolidated financial statements.
IFRS 17 "Insurance Contracts"; effective for annual periods beginning on or after 1 January 2023. We do not expect any effects on net assets, financial position and results of operations as presented in the consolidated financial statements.

c) Presentation

The presentation in the statement of financial position differentiates between current and non-current assets and liabilities. Assets and liabilities are classified as current if they are due within one year. Deferred tax assets and liabilities are recognised as non-current line items.

The consolidated statement of income is prepared using the total cost method.

For clarity and comprehensibility of the consolidated financial statements, individual items in the statement of financial position and the statement of income have been summarised. These line items are listed separately in the notes to the consolidated financial statement.

1.3 Functional currency and reporting currency

The consolidated financial statements of Einhell Germany AG are presented in euro (EUR). Unless otherwise stated, figures are given in EUR thousands (EURk). Amounts are rounded up or down where applicable. Unless otherwise stipulated, all amounts are stated in thousands of euros (EURk). There may be minor deviations due to rounding of totals and the calculation of percentage figures.

1.4 Principles of consolidation

The consolidated financial statements include Einhell Germany AG and its subsidiaries for which Einhell Germany AG fulfils the respective criteria pursuant to IFRS 10. These companies are included in the consolidated financial statements from the time when control is gained. In turn, subsidiaries are no longer included in the consolidated financial statements when they are no longer controlled.

The financial statements of the subsidiaries included in the consolidation were prepared using standard accounting and valuation policies pursuant to IFRS 10. The cut-off date for almost all of the companies included in the consolidated financial statements is 31 December. 31 December is the reporting date of the parent company. The reporting date of Mould Star Pty Ltd and Lawn Star Pty Ltd is 30 June.

Capital consolidation is carried out using the purchase method by offsetting investment book values with the pro rata newly valued equity of the subsidiary at the time of gaining control (IFRS 10). Remaining asset-side balances are recognised as goodwill.

Within the consolidated group of companies, intra-group profits and losses, revenues, expenses and other income, all receivables and liabilities and provisions are eliminated. The income tax effects of consolidation transactions are recognised through profit or loss and appropriate deferred taxes are recognised.

1.5 Basis of consolidation

The companies included in the consolidation are Einhell Germany AG and a further 42 (previous year: 41) fully consolidated companies.

Einhell Germany AG, Landau a. d. Isar, prepares the consolidated financial statements for the smallest and for the largest group of companies. The financial statements are published in the Bundesanzeiger (German Federal Gazette).

In financial year 2021, the Einhell Group founded a wholly owned company in Uruguay. The company was established in a free trade zone in Montevideo, where Einhell will maintain a central supply warehouse for South American customers in order to optimise the complex import handling in some of the South American countries.

The subsidiaries included in the consolidated financial statements are listed in section "8. LIST OF SHAREHOLDINGS" of the notes to the consolidated financial statement. The subsidiaries iSC GmbH, Landau a. d. Isar and ECOmmerce System GmbH, Landau a. d. Isar use the exemptions pursuant to Section 264 (3) German Commercial Code (HGB).

1.6 Currency translation

The foreign investments within the consolidation group are financially, economically and organisationally autonomous. They are therefore regarded as economically independent foreign entities. Their functional currency is their relevant local currency.

In the individual financial statements of the companies in the Einhell Group, all foreign currency transactions are converted from the local currency into the reporting currency at the rate of exchange applicable at the time of the transaction. Monetary foreign currency holdings as at the reporting date are valued at the daily exchange rate on the reporting date. Currency translation differences resulting from the settlement of monetary transactions or the measurement of monetary line items of a company at exchange rates that vary from the exchange rates during the period or in financial statements in which they were originally valued, are recognised through profit or loss in the period in which they arose.

Financial statements of foreign subsidiaries are converted at the exchange rates applicable at the end of the year for the assets and liabilities in the statement of financial position, and at average rates of exchange during the reporting year for the statement of income. Equity is converted at the exchange rates valid at the time of the transaction. All resulting currency translation differences are recognised in other comprehensive income and shown in the adjustment from currency translation item (part of other reserves).

Since Argentina meets the criteria of a hyperinflationary economy under IAS 29, the financial statements of Einhell Argentina and the comparative figures for earlier periods were adjusted due to changes in the general purchasing power of the functional currency. The historical cost method was used for the financial statements. The overview below shows the price indices valid at the reporting date as well as changes in the

index ("IPC Nacional Empalme IPIM") during the current and the previous period:

(in %)	2021	2020
January	401.5071	289.8299
February	415.8595	295.6660
March	435.8657	305.5515
April	453.6503	310.1243
May	468.7250	314.9087
June	483.6049	321.9738
July	498.0987	328.2014
August	510.3942	337.0632
September	528.4968	346.6207
October	547.0802	359.6570
November	560.9184	371.0211
December	582.4575	385.8826

The effect of the application of IAS 29 on profit or loss amounts to EUR -1,053.2 thousand in the 2021 financial year (previous year: EUR -1,145.7 thousand).

The following exchange rates apply to the most important currencies for the Einhell Group:

(in %)		Reporting date rate		Average rate
		31.12.2021	31.12.2020	2021	2020
Australia	AUD	1.5653	1.5863	1.5747	1.6554
China	CNY	7.2499	7.9914	7.6340	7.8708
Hong Kong	HKD	8.8660	9.4843	9.1988	8.8517
UK	GBP	0.8402	0.8955	0.8600	0.8892
Switzerland	CHF	1.0364	1.0821	1.0814	1.0703
Turkey	TRY	15.0709	9.0777	10.4670	8.0436
USA	USD	1.1372	1.2232	1.1835	1.1413

1.7 Accounting and valuation principles

Purchased and self-developed intangible assets are capitalised pursuant to IAS 38 if there is an associated future economic benefit from these assets and the costs of the assets may be determined with certainty. The assets are recognised at acquisition or manufacturing cost and amortised over their expected useful life. The period of use is usually three to five years.

Development expenses and product processing costs are recognised in the period in which they arise. This does not include project development costs that fully meet the following criteria:

The product or process is clearly defined, and relevant costs can be clearly allocated and determined with reliability.
The technical feasibility of the product can be proven.
The Group intends and is able to either market the product or process, or to use it for its own purposes.
The assets will generate a future economic benefit (i.e. existence of a market for the product or evidence of product use by the company for internal purposes).
There are sufficient technical, financial and other resources available to complete the project.

The costs are capitalised as soon as the above criteria are fulfilled for the first time.

Costs recognised as expenses in prior financial years may not be capitalised retrospectively. Other than development costs, there are no self-developed intangible assets. Capitalised development costs are amortised by the straight-line method over the estimated useful life of the asset. Usually, the depreciation period does not amount to more than five years. The realisable amount of capitalised intangible assets is estimated whenever there are indications of impairment of the asset or indications that impairment losses recognised in previous financial years no longer exist.

Goodwill from company acquisitions is the difference between the purchase price and the pro-rated equity (measured at fair value) at the time of the purchase. Goodwill is not systematically depreciated, but is allocated to cash generating units and tested annually for impairment. When the carrying amount of the net assets of a cash generating unit exceeds the realisable value, an impairment is recognised in accordance with the provisions of IAS 36. The cash generating units are the individual companies.

Property, plant and equipment is measured at cost less scheduled depreciation and extraordinary depreciation whenever required. Depreciation is normally made on a straight-line basis in line with the expected useful life. Depreciation is made on the basis of the following ranges of expected useful life:

	Useful life
Buildings	20 - 30 years
Technical equipment and machinery	3 - 20 years
Other equipment, operating and office equipment	3 - 10 years

Leases

Lease liabilities for lease contracts are measured at the present value of the remaining lease payments in accordance with IFRS 16 and discounted using the incremental borrowing rate. Payments for any non-lease components that might be included in lease contracts are included in the calculation of the lease liability unless they refer to real estate leases. The subsequent measurement of lease liabilities is based on the effective interest rate method. Right-of-use assets are recognised in line with the lease liability at the commencement date and adjusted for special payments such as initial direct costs; subsequently, they are depreciated over their useful

lives on a straight-line basis and, whenever required, written down. Usually, the useful life equals the term of the lease contract. Lease modifications and reassessments of lease liabilities are recognised by adjusting the corresponding right-of-use asset without any impact on profit or loss.

The Group uses a number of practical expedients when applying IFRS 16 to leases. Specifically, the Group:

recognises neither right-of-use assets nor lease liabilities for leases, the term of which ends within 12 months of their commencement date,
recognises neither right-of-use assets nor lease liabilities for leases, the underlying asset of which is of low value (e.g. IT equipment),
does not recognise leases for intangible assets in accordance with IFRS 16; these are classified in accordance with IAS 38.

For further details about lease obligations, see section "7.1 Leases".

Inventories comprise raw materials and supplies and goods. Inventories are valued at acquisition cost determined in accordance with the weighted average method. Inventory and sales risks resulting from reduced merchantability are taken into account by recognising impairments. Impairments are recognised for the net realisable value of inventories whenever this value falls below acquisition costs.

Financial assets

When a financial asset is recognised for the first time, it is classified and measured as follows:

at amortised cost,
FVOCI debt instruments (investments in debt instruments that are measured at fair value with changes recognised through other comprehensive income),

FVOCI equity investments (equity investments that are measured at fair value with changes recognised through other comprehensive income),

FVTPL (at fair value with changes in value recognised through profit or loss).

A financial asset is measured at amortised cost if both of the following conditions are met:

it is held within a business model whose objective is to hold financial assets to collect their contractual cash flows, and
the contractual terms of the financial asset give rise, on specified dates, to cash flows that are solely payments of principal and interest on the principal amount outstanding.

A debt instrument is designated at FVOCI if both of the following conditions are met:

if it is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and sell financial assets, and
the contractual terms of the debt instrument give rise, on specified dates, to cash flows that are solely payments of principal and interest on the principal amount outstanding.

On initial recognition of equity instruments that are not held for trading, the Group has the irrevocable option to recognise subsequent changes in the fair value of the investment through other comprehensive income. This choice must be made for each investment.

All financial assets that are not measured at amortised cost or FVOCI are measured at FVTPL.

Financial assets that are held or managed for trading and whose changes in value are assessed by means of their fair value are measured at FVTPL.

Financial assets – subsequent measurement and gains and losses

Financial assets at FVTPL

These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in profit or loss. Please refer to section “6.5 Foreign currency risks” for derivatives that were designated as hedging instruments.

Financial assets at amortised cost

These financial assets are subsequently measured at amortised cost using the effective interest rate method. The amortised cost is adjusted for impairment losses. Interest income, foreign exchange gains and losses and impairments are recognised in profit or loss. Gains and losses resulting from derecognition are recognised in profit or loss.

Debt instruments at FVOCI

These assets are subsequently measured at fair value. Interest income that is calculated using the effective interest rate method, foreign exchange gains and losses and impairments are recognised in profit or loss. Other net gains and losses are recognised in other comprehensive income. On derecognition, the cumulated other comprehensive income is reclassified to profit or loss.

Equity investments at FVOCI

These assets are subsequently measured at fair value. Dividends are recognised as income in profit or loss unless the dividend is clearly covering some of the costs of the investment. Other net gains or losses are recognised in other comprehensive income and are never reclassified to profit or loss.

The Group derecognises a financial asset when the contractual rights to collect the cash flows from the financial asset expire or when the Group transfers the rights to collect the cash flows in a transaction that also transfers substantially all the risks and rewards of ownership of the financial asset. A financial asset is also derecognised when the Group neither transfers nor retains substantially all the risks and rewards of ownership but transfers control of the asset.

Cash and cash equivalents

Cash and cash equivalents includes in particular cash in hand, cheques and bank deposits with an original maturity of up to three months. The cash and cash equivalents item corresponds with the corresponding item in the consolidated statement of cash flows.

Deferred tax assets and liabilities

Deferred tax assets and liabilities are set aside pursuant to IAS 12 “Income Taxes” for temporary differences between the carrying amounts shown in the consolidated statement of financial position and the tax values of assets and liabilities. This also applies to tax losses carried forward and tax credits if such can be determined with reasonable certainty. Deferred tax assets and liabilities are recognised in the amount of the probable tax burden or relief in future financial years. The basis is the tax rate at the time of realisation. Tax consequences of profit distributions are normally not taken into account until the resolution for disbursement of profits is passed. If the realisation of deferred tax assets is no longer probable, an adequate value adjustment is made. Actual taxes and deferred taxes must be directly taken to equity or credited if the tax refers to line items that are credited or charged directly to equity in the same or another reporting period. Deferred tax liabilities and assets are only offset if they relate to taxes levied by the same taxation authority.

The adjustment from currency translation results from the conversion of annual financial statements of consolidated companies whose functional currency varies from the reporting currency of the Group. The consolidated companies are economically independent foreign entities. Currency translation differences from monetary line items that are essentially net investments of the company in an economically independent foreign entity are recognised in the consolidated financial statements as equity until the corresponding net investment is sold. Upon sale of the corresponding assets, the pro rata adjustment from currency translation is recognised as income or expense in the same period in which

the gain or loss from the disposal of the asset is recognised.

The percentage of equity allocated to non-controlling interests (minority shareholders) is recognised under equity in the statement of financial position. The allocable consolidated net profit and allocable other comprehensive income is recognised separately in the consolidated statement of income or in the consolidated statement of comprehensive income. Non-controlling interests include the share of minority shareholders in the fair value of identifiable assets and liabilities at the time the affiliated company is acquired. Changes result from capital increases in which minority shareholders participate, distributions and shares of minority shareholders in profits, and from changes in exchange rates.

Employee benefits are set aside in accordance with IAS 19 using the Projected Unit Credit Method for defined benefit plans based on pension obligations for retirement, invalidity and surviving dependants.

The pension provisions shown in the statement of financial position on the reporting date equal the defined benefit obligations offset against the fair value of plan assets. Pursuant to IAS 19.8, plan assets include assets of long-term funds independent of the reporting company that have been set up to settle employee benefits. Actuarial gains or losses are recognised in other comprehensive income in the year they occur.

Provisions for other risks are set aside if there is an obligation to a third party and when the outflow of resources is probable and may be reliably estimated. The amount set aside as a provision is the best possible estimate of the potential liability at the reporting date. Provisions with an original term of more than one year are recognised at their settlement amount discounted to the reporting date. Provisions are checked on a regular basis and amended where there is new information or circumstances have changed.

Provisions for warranties and guarantees are set up at the time the products are sold. The measurement of warranty expenses recognised as a liability is based largely on historical values.

If there is an expectation that expenses necessary to meet an obligation for which a provision has been set aside will be reimbursed either in part or in full by a third party, the reimbursement will be recognised when it is as good as certain that the company will receive the reimbursement.

Financial liabilities are designated and measured at amortised cost or at fair value through profit or loss (FVTPL). A financial liability is designated at FVTPL if it is classified as held for trading.

Financial liabilities at FVTPL are measured at fair value, and net gains or losses, including interest expenses, are recognised in profit or loss.

Other financial liabilities are subsequently measured at amortised cost using the effective interest rate method. Interest expenses and currency translation differences are recognised in profit or loss. Gains and losses resulting from derecognition are also recognised in profit or loss.

The Group derecognises financial liabilities when the contractual obligations have been fulfilled, cancelled or have expired. The Group further derecognises financial liabilities when their contractual provisions are changed, and the cash flows of the amended liability have changed significantly. In this case, a new financial liability is recognised at fair value on the basis of the amended provisions. On derecognition of a financial liability, the difference between the carrying amount of the repaid liability and the compensation paid is recognised in profit or loss.

Financial assets and liabilities are offset and recognised in the statement of financial position as a net amount if the Group currently has a legally enforceable right of set-off in this respect and the Group intends either to settle on a net basis

or to realise the financial asset and settle the financial liability simultaneously.

Derivative financial instruments and hedge accounting

In the Einhell Group, derivative financial instruments are used only for hedging transactions as part of currency risk management arising from normal operations. They hedge against risks from fluctuations in cash flows, and are allocated to the risk associated with a specific asset or liability or with the risk of a planned transaction.

Upon initial recognition and at each subsequent reporting date, derivative financial instruments are measured at fair value. The fair value of tradeable derivatives corresponds to the positive or negative market value. If there is no market value available, they are calculated on the basis of generally accepted actuarial methods, such as discounted cash flow models or option pricing models. Derivatives are recognised as assets if their fair value is positive and as a liability if the fair value is negative. Derivative financial instruments are recorded in the Treasury system on the day of trading.

The fair value of currency futures is determined on the basis of the exchange rates applicable on the currency futures market at reporting date. For all the above instruments, the Einhell Group's fair values are additionally validated by financial institutions that have provided the Group with the relevant contracts.

If the provisions of IAS 39 on hedge accounting are met, the Einhell Group designates and documents the hedge as a cash flow hedge from this point on. A cash flow hedge secures highly probable future payment flows or fluctuating payment inflows or outflows in connection with a hedged asset or liability as recognised in the statement of financial position. Documentation of the hedge accounting includes the aims and strategy of risk management, the type of hedge relationship, hedged risk, designation of the hedge instrument and the underlying transaction as well as a description of the method of measuring efficacy. Hedge accounting allows for

effective estimation of risk compensation for changes in the fair value or payment flows in relation to the hedged risk and regularly checks that the hedge remains effective throughout the reporting period for which the hedge is designated.

The after-tax effective portion of changes in the fair value of derivative financial instruments that are allocated to a cash flow hedge are initially recognised in other comprehensive income. Upon receipt of the goods, they are reclassified to acquisition costs. The goods are therefore effectively recognised at their hedging rate. The hedge-ineffective portions of fair value changes are recognised directly in consolidated net profit.

For reasons of simplification and in accordance with the IFRS Standards, the Einhell Group continues to apply the provisions of IAS 39 to derivative financial instruments.

Revenue recognition

Revenue is recognised from the point in time when the goods are delivered to and accepted by the customer at the customer's premises (transfer of control). For contracts with customers that allow returns, revenue is recognised to the extent that it is highly probable that no material adjustment will have to be made to the cumulative revenue recognised. The amount of revenue recognised is therefore adjusted for expected returns estimated on the basis of historical data. In these cases, a reimbursement liability and an asset for the right to retrieve the products are recognised. The asset for the right to retrieve the products is measured at the previous carrying amount of the product less expected costs of retrieval. The Group reviews its estimates of expected returns at each reporting date and updates the amounts of assets and liabilities accordingly.

Interest income and expenses

Interest income and expenses includes interest income from cash and cash equivalents and interest expenses from liabilities. Interest income

and expenses are recognised on a pro rata temporis basis in accordance with contractual arrangements where applicable.

Income taxes

Current income taxes are calculated on the basis of the relevant national taxable result for the year and national tax regulations. They also include current taxes for the year and any adjustments for tax payments or credits for other years that have not yet been assessed. The change of deferred tax assets and liabilities is reflected in income taxes. Changes to be recognised in other comprehensive income are an exception to this rule.

1.8 Estimates and assessments in accounting

The consolidated financial statements contain a certain amount of estimations, assessments and assumptions. These may have an impact on the amount and recognition of carrying amounts of assets and liabilities, disclosure of contingent receivables and liabilities at reporting date and the disclosed income and expenses for the reporting period. Important circumstances affected by such estimations, assessments and assumptions are explained below. Actual results may differ from these estimations, assessments and assumptions; any changes may have a significant effect on the consolidated financial statements.

Fair value measurement

Several accounting methods and disclosures of the Group require that the fair values of financial and non-financial assets and liabilities are measured.

The fair value measurement of an asset or a liability is, to the extent possible, based on observable market data. Depending on the input factors used in the valuation models, the fair values are classified to different levels of the fair value hierarchy:

Level 1: Quoted prices (unadjusted) on active markets for identical assets and liabilities,
Level 2: Input other than quoted market prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as price) or indirectly (i.e. based on price),
Level 3: Valuation parameters for assets or liabilities that are not based on observable market data.

With regard to the fair value measurement with non-observable input factors (Level 3), the Group monitors the key input factors on a regular basis and performs valuation adjustments. If information provided by third parties, such as price quotes provided by service agencies, is used to measure fair values, the Group checks the data provided by the third party in terms of whether it meets the requirements under IFRS, including the level in the fair value hierarchy to which this information is to be classified.

If the input factors used to measure the fair value of an asset or a liability can be allocated to different levels of the fair value hierarchy, the measurement of all fair values is classified at the lowest input factor level on which the valuation is based.

The Group records possible reclassification between different levels of the fair value hierarchy at the end of the reporting period in which the changes have occurred.

Further information on the assumptions underlying the measurement of fair values is provided in the section "6. RISK REPORT AND FINANCIAL INSTRUMENTS".

In addition, the measurement of the put liability recognised in connection with the acquisition of the two South African companies as at 1 July 2020 is also based on estimates. Specifically, the measurement depends on the future EBT performance of the two companies. These changes

in value, however, do not affect the future consolidated net profit as they are recognised directly in retained earnings without any effect on profit or loss.

Impairment of cash generating units

Estimates are made as part of impairment tests for non-financial assets in order to determine the realisable amount of a cash generating unit. The main assumptions refer to future cash inflows and outflows for the planning period and for subsequent periods. The estimations refer mainly to future market shares and growth in the respective markets. Impairment tests were conducted for all companies with goodwill in 2021. The realisable values of all companies that were tested significantly exceed net asset values of the Group's cash generating units. No other impairment tests were conducted in addition to the aforementioned tests, as there was no specific need.

Pension obligations

Discount factors are also to be taken into account in determining the present value of defined benefit pension obligations. Discount factors are determined on the basis of returns that can be generated in the relevant markets at reporting date on first-rank fixed interest corporate bonds. The amount of the discount factors has a significant influence on the financing status of pension plans. Further material assumptions and the corresponding sensitivity analyses are listed in section "2.11 Employee benefits".

Income taxes

Estimates of future taxable income and the time at which deferred tax assets are to be realised are used as a basis for calculating deferred tax assets. This includes taking into account planned profits from operating activities, effects on income from the reversal of taxable temporary differences and realisable tax strategies. As future business developments are uncertain and the Group has limited control over these developments, the assumptions made in connection with the recognition of deferred tax assets are made with a significant degree of uncertainty.

On every reporting date, the Einhell Group evaluates the recoverability of deferred tax assets on the basis of planned taxable income in financial years to come. If it is unlikely that taxable income will be available against which the deductible temporary difference can in fact be offset, the value of the deferred tax assets is adjusted accordingly.

Claims and risks from legal action

Einhell Germany AG and its subsidiaries face risks from several legal proceedings and claims. In our opinion, potential liabilities that may result from these will not have a sustained effect on the Group's net assets, financial position and results of operations.

Leases

When accounting for leases in accordance with IFRS 16 it may be required in order to determine the term of the lease to exercise discretion when assessing whether unilateral termination and extension options will be or will not be exercised. The Group takes all factors into account that may create an economic incentive for the lessee to exercise, or not to exercise, the respective option.

Discretion is also used to determine the discount rate that, in addition to the base rate, also includes a credit margin that depends on the creditworthiness.

2. NOTES TO CONSOLIDATED STATEMENT OF FINANCIAL POSITION

2.1 Changes in non-current assets

Changes in non-current assets (not including other non-current assets and deferred tax assets) are shown in the following table:

in EURk	I. Intangible assets			II. Property, plant and equipment				III. Right-of-use assets			Total
	Acquired intangible assets	Self-developed intangible assets	Acquired good-will	Land and buildings in company assets	Technical equipment and machinery	Other equipment, operating and office equipment	Assets under construction	Right-of-use assets for land and buildings in company assets	Right-of-use assets for technical equipment and machinery	Right-of-use assets for other equipment, operating and office equipment
Acquisition and manufacturing cost
As at 01.01.2021	24,843	7,090	14,014	49,533	9,967	30,254	8,524	15,546	504	3,887	164,162
Additions	1,583	395	-	1,510	527	3,668	9,800	10,734	26	953	29,196
Changes in basis of consolidation	-	-	-	-	-	-	-	-	-	-	-
Disposals	-392	-117	-	-7	-36	-1,529	-148	-2,343	-7	-607	-5,184
Reclassifications	2	-	-	646	17,230	47	-17,891	-	-	-34	-
Currency translation difference	61	47	-38	214	403	563	38	222	6	-52	1,465
As at 31.12.2021	26,097	7,416	13,976	51,896	28,092	33,002	324	24,159	529	4,148	189,639
Depreciation and amortisation
As at 01.01.2021	17,893	5,845	2,381	22,203	4,950	24,967	-	5,561	215	1,628	85,643
Additions	860	1,182	-	1,267	1,118	2,117	-	4,114	129	1,254	12,041
Changes in basis of consolidation	-	-	-	-	-	-	-	-	-	-	-
Disposals	-377	-4	-	-	-19	-1,407	-	-2,299	-2	-250	-4,358
Reclassifications	-	-	-	-	-	18	-	-	-	-18	-
Currency translation difference	54	29	-	221	226	481	-	126	3	-27	1,113
As at 31.12.2021	18,430	7,051	2,381	23,690	6,275	26,176	-	7,502	345	2,587	94,438
Net carrying amount as at 31.12.2021	7,667	365	11,595	28,206	21,817	6,826	324	16,657	184	1,560	95,201
Acquisition and manufacturing cost
As at 01.01.2020	22,877	6,290	14,128	40,057	9,097	28,879	6,846	13,659	378	2,943	145,154
Additions	2,133	712	-	2,617	1,252	2,207	8,498	2,880	129	1,650	22,078
Changes in basis of consolidation	67	-	234	41	187	250	-	443	-	-	1,222
Disposals	-47	-	-	-	-525	-612	-6	-1,309	-	-669	-3,168
Reclassifications	-102	102	-	7,115	41	-329	-6,813	-	-	-14	-
Currency translation difference	-85	-14	-348	-297	-85	-141	-1	-127	-3	-23	-1,124
As at 31.12.2020	24,843	7,090	14,014	49,533	9,967	30,254	8,524	15,546	504	3,887	164,162
Depreciation and amortisation
As at 01.01.2020	17,600	5,650	2,381	21,031	4,195	23,407	-	3,331	95	922	78,612
Additions	347	195	-	1,264	846	2,012	-	3,641	120	1,198	9,623
Changes in basis of consolidation	27	-	-	17	64	171	-	-	-	-	279
Disposals	-	-	-	-	-108	-600	-	-1,304	-	-588	-2,600
Reclassifications	-	-	-	-	-	-	-	-	-	-	-
Currency translation difference	-81	-	-	-109	-47	-23	-	-107	-	96	-271
As at 31.12.2020	17,893	5,845	2,381	22,203	4,950	24,967	-	5,561	215	1,628	85,643
Net carrying amount as at 31.12.2020	6,950	1,245	11,633	27,330	5,017	5,287	8,524	9,985	289	2,259	78,519

2.2 Intangible assets

(in EURk)	2021	2020
Acquired intangible assets (without goodwill)	7,060	5,285
Self-developed intangible assets	365	1,245
Acquired goodwill	11,595	11,633
Advance payments on intangible assets	607	1,665
Total	19,627	19,828

Acquired intangible assets include the acquired Ozito brand value (EUR 3.3 million) from the acquisition of Ozito Industries Pty Ltd. The acquired brand is not depreciated on a straight-line basis as its useful life is unlimited. There is no foreseeable limit to the time period, in which the brand will bring the Company economic benefits. The brand is allocated to the same cash generating unit as the goodwill of the acquired Australian company and is tested for impairment annually together with the goodwill.

The additions to advance payments correspond to the change in the corresponding carrying amounts.

Self-developed intangible assets mainly comprise expenses arising from the development of self-developed software and new products that are amortised over the expected life cycle of the product. Expenses for product processing amounted to EUR 10,590 thousand (previous year: EUR 9,250 thousand) in financial year 2021, EUR 170 thousand of which were capitalised (previous year: EUR 68 thousand). Furthermore, development costs amounting to EUR 395 thousand (previous year: EUR 712 thousand) were incurred for self-developed software that is to support the optimisation of service procedures within the Einhell Group. These development costs were fully capitalised.

60 people were employed in the field of product processing in financial year 2021 (previous year: 60).

Goodwill pertains to the following companies:

(in EURk)	2021	2020
Ozito Industries Pty Ltd, Melbourne/Australia	5,423	5,351
Einhell Turkey Dis Ticaret Anonim Sirketi, Istanbul/Turkey	354	588
Einhell Holding Gesellschaft m.b.H., Wels/Austria	2,186	2,178
Einhell-Unicore s.r.o., Carlsbad/Czech Republic	2,360	2,237
Einhell Romania SRL, Bucharest/Romania	860	874
Einhell LLC, St. Petersburg/Russia	181	171
Lawn Star Pty Ltd, Cape Town/South Africa	171	173
Mould Star Pty Ltd, Cape Town/South Africa	60	61
	11,595	11,633

Goodwill refers to companies that directly helped the Group to enter new markets or gain market shares.

The recoverability of goodwill is verified in the scope of an annual impairment test. An impairment is recognised if the realisable amount falls below the carrying amount of the respective cash generating unit. The realisable amount is derived from future cash flows as the value in use. Determination of the cash flows is based on economic planning with a planning horizon of five years. We analysed economic developments in the markets relevant for the Einhell Group and took these findings into account.

The cash flow forecasts contain specific estimates for five years and a terminal growth rate thereafter. The terminal growth rate was determined on the basis of the Board of Directors' estimates for the average long-term annual EBIT growth rate and amounts to 1.25% (previous year: 1.25%). The estimate is in line with the assumption that a market participant would make.

The planned EBIT was estimated on the basis of past experience. Revenue growth was forecast

on the basis of the average growth rate over the last few years and the estimates revenue volume and price increases in the next five years.

The discount rate is determined on the basis of the weighted cost of equity and borrowed capital. The following discount rates (before tax) were used to determine the goodwill items stated below:

(in %)	2021	2020
Ozito Industries Pty Ltd, Melbourne/Australia	11.52	10.50
Einhell Turkey Dis Ticaret Anonim Sirketi, Istanbul/Turkey	16.14	14.64
Einhell Holding Gesellschaft m.b.H., Wels/Austria	11.36	10.43
Einhell-Unicore s.r.o., Carlsbad/Czech Republic	10.69	9.69

The following parameters were used to determine the cost of equity:

(in %)	2021	2020
Base rate	0.10	-0.10
Market risk premium	7.75	7.75

The base rate was adjusted to the current interest rate level. The market risk premium is multiplied with the beta factor derived from a peer group analysis.

A country-specific risk premium is additionally considered in the calculation of the discount rate for each individual cash generating unit (CGU), meaning that an individual discount rate is calculated for every CGU.

Pursuant to IAS 21.47, goodwill of non-euro countries is converted at the reporting date exchange rate. This led to changes in the goodwill of companies in non-euro countries in financial year 2021. Goodwill of Einhell Holding Gesellschaft m.b.H. is derived from the takeover of Einhell Croatia d.o.o., which is a wholly-owned subsidiary of Einhell Holding Gesellschaft m.b.H.

2.3 Non-derivative financial assets

(in EURk)	2021	2020
Non-current	915	751
Current	1,174	360
	2,089	1,111

In terms of non-current assets, this refers to shares in a money market fund that serves to hedge pensions, holiday and flexible time entitlements recognised at fair value. Income from the fund amounts to EUR -3 thousand (previous year: EUR -4 thousand). The expected yield on securities is 0% p.a.

The non-current non-derivative financial assets include commission receivables, supplier debits and advance payments on travel expenses.

2.4 Deferred taxes

Deferred tax assets and liabilities of the company are as follows:

(in EURk)

	Deferred tax assets		Deferred tax liabilities		Net amount
	2021	2020	2021	2020	2021	2020
Self-developed intangible assets and property, plant and equipment	41	9	-1,054	-1,285	-1,013	-1,277
Current assets	8,053	4,353	-960	-519	7,093	3,834
Other financial assets at fair value	373	1,664	-18,156	-1,627	-17,784	37
Provisions for pensions	299	547	0	0	299	547
Provisions for other risks	4,400	3,185	-55	-82	4,345	3,103
Other liabilities	714	544	-269	-392	445	152
Tax losses carried forward	3,551	2,692	0	0	3,551	2,692
	17,430	12,993	-20,494	-3,906	-3,064	9,087

The deferred taxes on hedge accounting, securities measured at fair value through other comprehensive income and the remeasurement of pensions - which are shown under deferred taxes on other financial assets - are exclusively recorded in other comprehensive income.

Deferred taxes with respect to the above line items mainly result from the following circumstances:

Capitalisation and amortisation of development costs.
Higher tax depreciation of property, plant and equipment leads to tax valuations falling under the carrying amounts.
The measurement of trade receivables is different from the measurement for the tax base.
Financial assets accounted for at fair value have different tax values and carrying amounts, because remeasurements are only carried out for accounting purposes and not for tax purposes.
The measurement of pension provisions is different from the measurement for the tax base.
In some local financial statements of foreign subsidiaries, deferred expenses may not be deducted for tax purposes until they occur,

whereas they can be recognised in profit or loss in the financial statements over a longer period of time.

Capitalisation of deferred taxes from tax losses carried forward of subsidiaries.

2.5 Inventories

(in EURk)

	2021	2020
Raw materials and supplies (at acquisition cost)	2,591	1,285
Finished goods (at acquisition cost less impairment)	446,651	193,410
Advance payments	735	65
	449,976	194,761

The inventories recognised in the financial year as expenses correspond to the expenses for raw materials and supplies and purchased goods shown in cost of materials (see section "3.4 Cost of materials").

In summary, Einhell recognised impairments of EUR 11,686 thousand (previous year: EUR 6,506 thousand). No goods were transferred by way of security at the reporting date, as in the previous year. In financial year 2021, inventory write-downs of EUR 7,979 thousand (previous year: EUR 4,604 thousand) were recognised through profit or loss in the statement of income.

2.6 Trade receivables

Trade receivables refers to amounts owed by customers for goods sold or services rendered in the usual course of business. Usually, they must be paid within one year and are therefore classified as "current". At initial recognition, trade receivables are recorded at the amount of the unconditional consideration. If they contain significant financing components, however, they must be recognised at fair value. The Group holds trade receivables in order to collect contractual cash flows and subsequently measures them at amortised cost by applying the effective interest rate method.

CHANGES IN IMPAIRMENTS

(in EURk)	2021	2020
Amount at the beginning of the year	4,401	3,447
Reversal of value-adjustments	-1,446	0
Impairments for bad debts	1,361	1,446
Amounts received for receivables written off	-767	-189
Currency translation difference	-246	-303
Amount at the end of the year	3,303	4,401

The Group's methods for recognition and calculation of impairments are described in more detail in note "6.2 Default risk".

2.7 Derivative financial assets

(in EURk)	2021	2020
Non-current derivative financial instruments included in hedge accounting	14,596	574
Non-current financial assets measured at fair value through profit or loss	0	0
	14,596	574
(in EURk)	2021	2020
---	---	---
Current derivative financial instruments included in hedge accounting	46,404	5,529
Current financial assets measured at fair value through profit or loss	7,928	1,306
	54,332	6,835

Unrealised gains/losses from derivative financial instruments included in hedge accounting are taken directly to equity after deduction of deferred taxes.

2.8 Other non-financial assets

(in EURk)	2021	2020
Non-current	1,963	987
Current	45,667	30,268
	47,630	31,255

The other current assets item consists mainly of VAT receivables amounting to EUR 40,785 thousand (previous year: EUR 24,015 thousand). The highest VAT receivables are due from our procurement companies in China.

2.9 Equity

SUBSCRIBED CAPITAL

The share capital of Einhell Germany AG is unchanged from the previous year and divided as follows:

	2021	2021
	Number	EUR
Ordinary shares
Ordinary bearer shares (no-par), each with an arithmetic interest in share capital of EUR 2.56	2,094,400	5,361,664.00
Preference shares
Non-voting preference bearer shares (no-par), each with an arithmetic interest in share capital of EUR 2.56	1,680,000	4,300,800.00
Total share capital	3,774,400	9,662,464.00

All shares are fully paid up. The dividend proposal for Einhell Germany AG amounts to EUR 9,687,776.00 for financial year 2021 (previous year: EUR 8,178,016.00). The distribution amount corresponds to a dividend of EUR 2.60 per preference share (previous year: EUR 2.20) and EUR 2.54 per ordinary share (previous year: EUR 2.14).

A minimum of EUR 0.15 per share must be paid out to the holders of preference shares and has preference over the dividend to ordinary shareholders. The dividend per preference share is EUR 0.06 higher than the dividend per ordinary share. If the net profit in one or several financial years does not suffice to pay a dividend of EUR 0.15 per preference share, the missing amounts will be paid without interest from the net profit of subsequent financial years after the minimum preference share dividend for these financial years has been paid and before distribution of a dividend for ordinary shares. There are no distributions from minimum dividends outstanding. The preference shares do not carry any voting rights. All shares are of equal rank with regard to residual assets of the Company. The ordinary shares hold voting rights in the Annual General Meeting.

CAPITAL RESERVE

The capital reserve consists of premiums on the issue of shares.

RETAINED EARNINGS AND CONSOLIDATED NET PROFIT

This item includes the Group's accumulated net profit from previous years less dividend payments. The Annual General Meeting on 18 June 2021 resolved to pay a dividend in the total amount of EUR 8,178,016.00. Dividend payouts are based on the equity that is available pursuant to German commercial law provisions.

CAPITAL MANAGEMENT

The capital management of the Group has the objective to safeguard the going concern of the Group in the long term and generate attractive returns for the shareholders. Capital management instruments include the distribution of dividends. In its capital management activities, the Group complies with the statutory regulations on capital maintenance. The articles of association state no capital requirements.

The equity in the statement of financial position amounts to EUR 340,972 thousand on 31 December 2021 (previous year: EUR 245,346 thousand), while the equity ratio amounts to 41.0% as at 31 December 2021 (previous year: 51.3%). The Einhell Group targets an equity ratio of about 50%.

For short-term financing, the Einhell Group relies on its credit lines with banks, whereas a KfW loan was taken out for medium to long-term financing.

Einhell Germany AG furthermore took out promissory note loans totalling EUR 75.0 million in financial year 2021. The maturities are five years for a tranche of EUR 50.0 million and seven years for a tranche of EUR 25.0 million. The promissory note loans do not require any collateral or covenants and are due upon maturity.

The interest rates are fixed and do not include any variable components.

The aim is to achieve a balanced maturity profile and to optimise debt financing conditions.

2.10 Non-controlling interest

in EURk	2021	2020
1 January	2,431	1,852
Capital contributions (incl. consolidation effects of EUR 0 thousand (previous year: EUR 381 thousand))	50	394
Disposals	0	-35
Dividends	-591	-373
Unrealised gains/losses from currency translation (= share in other comprehensive income)	-5	-11
Share in consolidated net profit	1,528	604
31 December	3,413	2,431

The total share of non-controlling interest in equity is – as in the previous year – insignificant at 1.0%. Non-controlling interests are not measured at fair value.

2.11 Employee benefits

Benefits resulting from pension obligations are based on the length of employment. The obligations comprise both benefits from pensions that are already being paid and rights to future pension payments.

Current and former members of the Board of Directors as well as a small number of employees of Einhell Germany AG and iSC GmbH, who entered the companies prior to 1993, have vested

pension rights in the form of a direct benefit commitment. The benefit commitments are based on individual contractual stipulations. No entitlement to a universal benefit plan can be derived based on the entry date. The individual pension entitlement is defined based on a fixed pension amount in euro per year of employment. The Company took out reinsurance to cover the basic entitlements. The ultimate responsibility for the pension obligations lies with the Company. Einhell Schweiz AG is required to enter an affiliation contract with a pension fund to comply with statutory requirements. By law, the pension fund has to cover at least the occupational pension.

The discount factor for the obligations of the German companies used for future beneficiaries is 1.25% (previous year: 0.80%) while the interest rate used for pensioners is 1.00% (previous year: 0.50%). A discount rate of 0.2% (previous year: 0.2%) was used for Switzerland. As in the previous year, the rate for pension progression for commitments with adjustment guarantee was 3.00%. No rate of compensation increase was available for non-salary based obligations and for commitments without adjustment guarantee. The salary trend assumed for Switzerland is 1.0% (previous year: 1.0%). The mortality in connection with the obligations in Germany was determined on the basis of the Heubeck mortality tables (Heubeck-Richttafeln RT 2018 G), while the mortality in Switzerland is based on the BVG 2015 Generationentafeln.

The defined benefit obligations (DBO) developed as follows in financial year 2021:

DEFINED BENEFIT OBLIGATIONS (DBO)

(in EURk)	2021	2020	2019	2018	2017
1 January	7,234	6,180	5,620	4,996	5,681
Current service expense (personnel expenses)	277	246	121	181	138
Interest expense (personnel expenses)	36	53	82	72	69
Actuarial losses and gains from changes in financial assumptions	-536	646	754	174	-58
Pension payments	-237	41	-82	69	-645
Payments from employees	69	65	61	57	39
Other changes	0	0	-451	0	-78
Currency translation difference	105	3	75	71	-150
31 December	6,948	7,234	6,180	5,620	4,996

Plan assets developed as follows in financial year 2021:

PLAN ASSETS

(in EURk)	2021	2020	2019	2018	2017
1 January	2,319	1,964	2,245	1,880	2,467
Interest income	0	0	0	0	2
Other changes	98	354	-333	310	-466
Currency translation difference	77	1	52	55	-123
31 December	2,494	2,319	1,964	2,245	1,880
(in EURk)	2021	2020	2019	2018	2017
---	---	---	---	---	---
Present value of defined benefit obligations	6,948	7,234	6,180	5,620	4,996
less fair value of plan assets	-2,494	-2,319	-1,964	-2,245	-1,880
Net obligations	4,454	4,915	4,216	3,375	3,116

Actuarial gains and losses refer primarily to changes in the discount rate. Expenses from obligations regarding employee benefits are shown in personnel expenses. The pension provisions shown in the statement of financial position on the reporting date equal the defined benefit obligations offset against the fair value of plan assets.

The expected return on plan assets is 0%.

Plan assets comprise

(in EURk)	2021	2020
Pension funds	665	667
Qualified insurances	1,829	1,652
	2,494	2,319

The fair value was determined on the basis of observable market prices (level 1).

Future payments

Benefits to be paid in the future are estimated as follows:

OUT-PAYMENTS FROM PLAN ASSETS

(in EURk)
2022	175
2023	182
2024	186
2025	191
2026	195
	929

There were no significant changes compared to the previous year.

Employer payments into plan assets will amount to around EUR 69 thousand in the next year (previous year: EUR 67 thousand).

In Germany, the weighted average term of defined benefit obligations for pensions is 18.9 years (previous year: 19.8 years) or 18.0 years (previous year: 19.5 years) respectively, while in Switzerland it is 18.8 years (previous year: 19.6 years).

Sensitivity analysis for benefit obligations

Sensitivity analyses are usually performed using the following parameters:

Actuarial interest rate
Salary trend
Rate for pension progression
Life expectancy

The existing benefit obligations of Einhell Germany AG are not linked to salary, making a calculation on the basis of the salary trend obsolete as the defined benefit obligations remain unchanged if the salary trend rises or falls by 0.25%. The guaranteed adjustment of current benefits for existing pension obligations by 3% p.a. is significantly higher than the current inflation trend. Therefore, a change in the rate for pension progression by +/-0.25% has no effect on the obligation, likewise rendering a sensitivity analysis obsolete as the DBO remains unchanged.

Therefore, the sensitivity analysis only accounts for the actuarial interest rate and life expectancy, whereby the latter only applies to obligations regarding future pension payments as a longer life expectancy has no effect on capital commitments.

(in EURk)
Einhell Germany AG
Actuarial interest rate +0.5%	1.75% future beneficiaries, 1.50% pensioners
Actuarial interest rate -0.5%	0.75% future beneficiaries, 0.50% pensioners
Life expectancy +1 year
iSC GmbH
Actuarial interest rate +0.5%	1.75% future beneficiaries, 1.50% pensioners
Actuarial interest rate -0.5%	0.75% future beneficiaries, 0.50% pensioners
Life expectancy +1 year
Einhell Schweiz AG
Actuarial interest rate +0.25
Actuarial interest rate -0.25
Salary trend +0.25
Salary trend -0.25
Life expectancy +1 year
Life expectancy -1 year
(in EURk)
---	---
Einhell Germany AG
Actuarial interest rate +0.5%	1.30% future beneficiaries, 1.00% pensioners
Actuarial interest rate - 0.5%	0.30% future beneficiaries, 0.00% pensioners
Life expectancy +1 year
iSC GmbH
Actuarial interest rate +0.5%	1.30% future beneficiaries, 1.00% pensioners
Actuarial interest rate - 0.5%	0.30% future beneficiaries, 0.00% pensioners
Life expectancy +1 year
Einhell Schweiz AG
Actuarial interest rate +0.25
Actuarial interest rate - 0.25
Salary trend +0.25
Salary trend -0.25
Life expectancy +1 year
Life expectancy -1 year

The sensitivity analyses are isolated analyses of the respective effects, while all other assumptions remain constant.

Risks

Risks from benefit obligations arise from the investment in plan assets. These risks might entail the requirement to pay additional capital into the plan assets to be able to meet current and future pension obligations.

Demographic/biometric risks

A large share of the benefit obligations pertains to life-long benefits and pensions for surviving dependants. Early retirement or longer benefit payments may lead to higher pension expenses and higher pension payments than previously anticipated.

The Einhell Group does not take any specific measures to balance out any potential risks that might arise. Given the overall amount of commitments, pension obligations are no major risk for the Einhell Group, and therefore no further reinsurance is needed.

In addition to pension obligations, the following employee benefits exist:

(in EURk)	2021	2020
Long-term employee benefits	4,502	3,000
Short-term employee benefits	28,010	19,130

The long-term employee benefits include commitments by Einhell Germany AG towards some members of the Board of Directors, whose entitlements accrue on a pro-rata basis over the term of their office. The entitlements each become fully vested after a maximum period of 12 years. The amount of the entitlement is based on the annual salary plus the average bonus of the last three years. Payment is expected as from the date the employee leaves the company. The obligation is measured on the basis of the current business planning.

2.12 Provisions for other risks

(in EURk)	Warranty and guarantees	Others	Total
1 Jan. 21	8,981	18,836	27,818
Utilisation	3,778	6,023	9,801
Reversals	16	9,071	9,086
Additions	5,316	14,614	19,930
Currency translation effects and other changes	21	206	226
31 Dec 21	10,525	18,562	29,086
(in EURk)	Warranty and guarantees	Others	Total
---	---	---	---
31 Dec 21
Non-current	0	686	686
Current	10,525	17,876	28,400
31 Dec 20
Non-current	0	1,225	1,225
Current	8,981	17,611	26,593

Miscellaneous other provisions mainly comprise provisions for customer bonuses. The interest effect from discounting non-current provisions with a remaining term of more than one year is immaterial.

The non-current provisions also include provisions of Einhell Italia for compensation payments for free sales agents.

2.13 Liabilities from debt capital

(in EURk)	2021	2020
Non-current
Loans, secured	0	7
Loans, unsecured	91,406	19,531
	91,406	19,538
(in EURk)	2021	2020
---	---	---
Current
Loans and overdrafts, secured	1,425	6
Loans and overdrafts, unsecured	89,450	3,369
	90,875	3,375
thereof non-current loans maturing in the short term	3,131	3,131
thereof loans and over-drafts maturing in the short term	87,744	244

Collateral in the total amount of EUR 1,854 thousand (previous year: EUR 13 thousand) was furnished to secure liabilities from debt capital pertaining to cheques and vehicles.

The Einhell Group has conventional lines of credit that were only partially utilised in financial year 2021. Cash and cash equivalents, as well as equity, stood at very good levels in the reporting year.

In financial year 2018, Einhell Germany AG took out long-term loans of EUR 25 million from three different banks. The loans are subject to a subsidy programme provided by the German development bank KfW and have a term of 10 years. The first repayments were made in June 2020, the last are to be made at the end of March 2028. The loan agreements also contain a financial covenant. This covenant refers to the interest cover ratio. The interest rates are fixed and do not include any variable components. Einhell Germany AG complied with this covenant in financial year 2021.

Einhell Germany AG took out promissory note loans totalling EUR 75 million in financial year 2021. The maturities are five years for a tranche of EUR 50 million and seven years for a tranche of EUR 25 million. The promissory note loans do not require any collateral or covenants and are due upon maturity. The interest rates are fixed and do not include any variable components.

2.14 Non-derivative financial liabilities

(in EURk)	2021	2020
Non-current	2,329	1,462
Current	38,926	9,613
	41,255	11,075

Non-derivative financial liabilities include the purchase price liability (conditional consideration and put liability) for the acquisition of Lawn Star and Mould Star totalling EUR 2,327 thousand (previous year: EUR 1,507 thousand).

2.15 Contract liabilities

Contract liabilities include repayment obligations from customer contracts amounting to EUR 657 thousand (previous year: EUR 534 thousand). These liabilities refer to the Group's obligation to take back delivered goods in the following year. On the other hand, the Group's right to reclaim goods was recognised under "contract assets".

2.16 Derivative financial liabilities

(in EURk)	2021	2020
Non-current derivative financial instruments included in hedge accounting	120	738
Non-current financial liabilities measured at fair value through profit or loss	0	0
	120	738
(in EURk)	2021	2020
---	---	---
Current derivative financial instruments included in hedge accounting	1,025	4,983
Current financial liabilities measured at fair value through profit or loss	334	1,113
	1,359	6,096

Unrealised gains/losses from derivative financial instruments included in hedge accounting are taken directly to equity after deduction of deferred taxes.

2.17 Lease liabilities

The adoption of IFRS 16 results in lease liabilities in the following amounts as at 31 December 2021:

LEASE LIABILITIES

(in EURk)	2021	2020
Non-current	13,492	10,019
Current	5,155	2,796
	18,647	12,815

2.18 Other non-financial liabilities

(in EURk)	2021	2020
Non-current	0	297
Current	13,745	19,001
	13,745	19,298

Other non-financial liabilities mainly include other tax liabilities.

3. NOTES TO THE CONSOLIDATED STATEMENT OF INCOME

3.1 Revenue

The Einhell Group mainly generates revenue from selling manually operated, petrol-powered and electronic tools, electrical tool accessories, metal and plastic products for DIY, garden and leisure activities, and air-conditioning and heating products.

The Einhell Group only generates revenue from contracts with customers in accordance with IFRS 15. The customer contracts within the meaning of IFRS 15 all have a maximum term of one year.

For the Einhell Group, revenue is always recognised at a point in time. There are no products and services, for which revenue is recognised over a period of time.

65% of revenue (previous year: 67%) was contributed by the Tools segment, while the Garden & Leisure segment contributed 35% (previous year: 33%).

The geographic allocation of the below-stated revenue to regions is based on the registered office of the invoicing party. Business activities of the Einhell Group focus exclusively on the distribution of goods.

REVENUE BY REGION

(in EURk and %)	2021		2020		Change
D/A/CH	374,565	40.4	301,631	41.6	72,934	24.2
Western Europe	169,437	18.3	139,930	19.3	29,507	21.1
Eastern Europe	84,953	9.1	69,191	9.6	15,762	22.8
Overseas	214,936	23.2	170,993	23.6	43,943	25.7
Other countries	83,527	9.0	42,931	5.9	40,596	94.6
Total	927,418	100.0	724,676	100.0	202,742	28.0

3.2 Other own work capitalised

Own work capitalised amounts to EUR 421 thousand in the financial year (previous year EUR 1,041 thousand) and mainly refers to the development of own software solutions.

3.3 Other operating income

(in EURk)	2021	2020
Income from the reversal of provisions	2,616	3,851
Commission income	1,989	1,419
Income from costs charged to suppliers (waste disposal, freight)	274	439
Income from the receipt of receivables that had been written off and from the reversal of the allowance for doubtful receivables	767	189
Proceeds from disposal of fixed assets	132	30
Income from damage compensation	152	135
Income from PV plant	576	540
Benefits in kind	462	448
Other income	2,291	1,880
Total	9,259	8,931

3.4 Cost of materials

(in EURk)	2021	2020
Expenses for raw materials and supplies and purchased goods	594,056	464,661
Expenses for purchased services	104	165
Total	594,161	464,826

3.5 Personnel expenses

(in EURk)	2021	2020
Wages and salaries	92,999	79,670
Social security contributions	9,085	7,518
Employer contribution to pension insurance	4,965	4,247
Expenses for old-age pensions	719	653
Total	107,768	92,089

NUMBER OF EMPLOYEES (ANNUAL AVERAGE)

	2021	2020
D/A/CH	732	680
Western Europe	194	175
Eastern Europe	245	236
Overseas	241	216
Other countries	384	351
Total	1,796	1,658

3.6 Depreciation and amortisation

(in EURk)	2021	2020
Amortisation of intangible assets (without goodwill)	2,042	542
Depreciation of property, plant and equipment	4,502	4,122
Depreciation of right-of-use assets according to IFRS 16	5,497	4,959
Total	12,041	9,623

3.7 Other operating expenses

(in EURk)	2021	2020
Expenses for buildings including maintenance of fixed assets	3,230	2,266
Legal and consulting expenses	3,432	4,069
Expenses for external stock keeping	14,064	9,995
Expenses on freight outward	29,936	24,537
Advertising expenses	44,378	28,643
Commission expenses	3,568	3,500
Fleet expenses	1,406	1,161
Product-related technical expenses/service expenses	3,307	2,638
Additions to warranty and guarantee provisions/other provisions	5,756	2,481
Compensation payments and contractual penalties	1,288	2,708
Expenses for hardware and software as well as office equipment	4,699	3,820
Insurance expenses	2,263	1,730
Travel costs	1,623	1,409
Fees and contributions	1,517	1,502
Waste disposal costs	3,217	2,773
Impairment losses pursuant to IFRS 9	3,303	4,401
Miscellaneous other operating expenses	13,759	11,470
Total	140,745	109,103

Given the short-term nature of the trade receivables item and the fact that payments are expected to be received in the near future, interest effects are of no major significance in calculating impairments.

3.8 Financial result

(in EURk)	2021	2020
Interest income	113	138
Interest expenses	-1,635	-903
Expenses/income from currency translation/hedging	974	-1,844
Impairment of financial assets	0	-33
Financial result	-548	-2,642
thereof expenses/income from derivatives not subject to hedge accounting	-532	-736

The financial result includes financial income amounting to EUR 6,017 thousand (previous year: EUR 9,424 thousand) and financial costs of EUR 6,565 thousand (previous year: EUR 12,066 thousand). The Group's financial income and financial costs refer to interest income, interest expenses and gains and losses from currency translation of financial assets and financial liabilities.

3.9 Income taxes

(in EURk)	2021	2020
Actual tax expenses	27,351	16,095
Deferred taxes	-5,669	-1,535
Total	21,682	14,560

In measuring a capitalised asset for future tax relief, the probability of recovery of the anticipated tax relief is also taken into account. Deferred taxes for hedge accounting and securities that are measured at fair value through other comprehensive income are only recognised in other comprehensive income. Deferred tax assets on such changes in the fair value amount to EUR 373 thousand (previous year: EUR 1,664 thousand), while the corresponding deferred tax liabilities come out to EUR 18,156 thousand (previous year: EUR 1,627 thousand).

The subsidiaries capitalised deferred taxes from loss carryforwards of EUR 3,551 thousand (previous year: EUR 2,692 thousand). Loss carryforwards that are classified as non-recoverable, because either no profit is expected or they cannot be carried forward, are not included in the calculation of deferred tax assets. In 2021, no deferred taxes were recognised for loss carryforwards of EUR 2,467 thousand (previous year: EUR 8,381 thousand).

The temporary differences between the IFRS carrying amounts of interests in subsidiaries and the tax-related values of such interests (so-called outside basis differences) amount to EUR 5,549 thousand as at the reporting date (previous year: EUR 3,497 thousand) and did not give rise to the recognition of deferred taxes as the Einhell Group is able to control their reversal and they will not reverse in the foreseeable future.

The reconciliation of the income tax amount with the theoretical amount that would have been applicable if the relevant tax rate in the Company's country of domicile had applied, is as follows:

(in EURk)	2021	2020
Expected tax expenses	24,551	16,909
Tax expenses / income from intra-Group income/expenses	745	184
Other non-tax-deductible expenses	1,230	1,313
Differing foreign tax rates	-3,537	-1,385
Tax-free income	-166	-44
Current losses without deferred taxes/utilisation of loss carryforwards without deferred taxes	14	-472
Changes in loss carryforwards	-1,590	-1,751
Taxes of previous years	435	-194
Reported tax expenses	21,682	14,560

The table shows the reconciliation of tax expenses anticipated in the financial year with the respective reported tax expenses. The anticipated tax expense is calculated by multiplying profit before taxes with the domestic total tax rate applicable in that financial year of 30.0% (2020: 30.0%).

3.10 Earnings per share

Earnings per share are calculated by dividing the earnings share of Einhell Germany AG's shareholders by the weighted average number of ordinary and preference shares outstanding in the financial year. In 2021 and 2020, there were no dilution effects on the number of shares. Therefore, diluted earnings per share equal the basic earnings per share.

The articles of association of Einhell Germany AG stipulate that preference shareholders are entitled to a dividend that is EUR 0.06 higher than the dividend paid out to the holders of ordinary shares.

(Number of shares or in EURk)	2021	2020
Ordinary shares basic/diluted	2,094,400	2,094,400
Preference shares basic/diluted	1,680,000	1,680,000

Earnings after tax	60,154	41,805
Non-controlling interest	1,528	604
Earnings after tax and non-controlling interests	58,626	41,201
thereof earnings attributable to ordinary shares basic/diluted	32,475	22,806
thereof earnings attributable to preference shares basic/diluted	26,151	18,395

Earnings per ordinary share basic/diluted	15.50	10.89
Earnings per preference share basic/diluted	15.56	10.95

4. SEGMENT REPORTING

4.1 Segment reporting by region

The allocation to the individual regions is based on the relevant Group company's registered office. Companies regarded as homogenous based on their company structure, sales market and customer structure were bundled in regions. Internal reporting reflects these structures and is presented to the Board of Directors and the Supervisory Board on a regular basis.

The reconciliation item almost exclusively reflects consolidation effects like, for instance, effects from intra-group elimination and debt consolidation.

2021

(in EURk)	Revenue by invoicing party	Revenue by invoice recipient	EBT	Depreciation and amortisation
D/A/CH	374,565	402,246	24,892	4,398
Western Europe	169,437	189,384	17,917	1,566
Eastern Europe	84,953	91,157	12,911	1,907
Overseas	214,936	234,775	27,849	1,797
Other countries	83,527	9,856	9,332	2,373
Reconciliation	0	0	-11,065	0
Einhell Group	927,418	927,418	81,836	12,041

The German companies generated revenue of EUR 345.3 million. The companies with the strongest revenue in Western and Eastern Europe are Einhell France with EUR 53.4 million, Einhell Italy with EUR 42.2 million and Einhell Commercial (Spain) with EUR 28.9 million.

Revenue in the Overseas region was generated by the subsidiaries in South America

and Australia. The largest contribution to revenue and earnings was made by Ozito Industries Pty Ltd, Australia, with revenue of EUR 162.0 million, mostly in Australia. Revenue in the Other countries is largely generated by the procurement companies in Hong Kong.

In the past financial year 2021, EUR 152,942 thousand were generated with one customer, corresponding to more than

10% of the Einhell Group's revenue. This revenue was generated in the Overseas region.

2021

(in EURk)	Financial result	Interest income	Interest expenses	Non-current assets excl. deferred tax assets
D/A/CH	1,790	3,744	-726	68,992
Western Europe	-772	0	-773	6,975
Eastern Europe	-1,242	73	-1,363	9,357
Overseas	-978	244	-1,277	17,489
Other countries	310	138	-1,547	9,864
Reconciliation	344	-4,086	4,051	0
Einhell Group	-548	113	-1,635	112,677

The share of non-current assets pertaining to Germany is EUR 66,412 thousand. The countries with the highest other assets are Australia with EUR 15,523 thousand, China with EUR 8,941 thousand and France with EUR 3,284 thousand.

2021

(in EURk)	Inventories	Depreciation of inventories
D/A/CH	192,570	3,974
Western Europe	112,165	1,971
Eastern Europe	59,738	940
Overseas	87,609	963
Other countries	19,583	131
Reconciliation	-21,689	0
Einhell Group	449,976	7,979

2020

(in EURk)	Revenue by invoicing party	Revenue by invoice recipient	EBT	Depreciation and amortisation
D/A/CH	301,631	304,222	16,221	3,250
Western Europe	139,930	159,124	12,074	1,490
Eastern Europe	69,191	73,891	7,465	1,013
Overseas	170,993	181,819	20,078	1,650
Other countries	42,931	5,620	4,602	2,220
Reconciliation	0	0	-4,075	0
Einhell Group	724,676	724,676	56,365	9,623

The German companies generated revenue of EUR 277.9 million. The companies with the strongest revenue in Western and Eastern Europe are Einhell France with EUR 42.1 million, Einhell Italy with EUR 35.2 million and Einhell UK with EUR 25.6 million.

Revenue in the Overseas region was generated by the subsidiaries in South America and Australia. The largest contribution to revenue and earnings was made by Ozito Industries Pty Ltd, Australia with revenue of EUR 138.5 million. Revenue in Other countries was mainly generated by the procurement companies in Hong Kong.

In financial year 2020, EUR 134,827 thousand had been generated with one customer, corresponding to more than 10% of the Einhell Group's revenue. This revenue was generated in the Overseas region.

2020

(in EURk)	Financial result	Interest income	Interest expenses	Non-current assets excl. deferred tax assets
D/A/CH	1,219	2,473	-585	44,707
Western Europe	-732	1	-733	7,641
Eastern Europe	-919	53	-928	10,479
Overseas	-864	181	-938	11,295
Other countries	-1,550	230	-506	6,710
Reconciliation	204	-2,800	2,787	0
Einhell Group	-2,642	138	-903	80,832

The share of non-current assets pertaining to Germany is EUR 41,953 thousand. The companies with the highest other assets are Australia with EUR 9,642 thousand, China with EUR 5,853 thousand and France with EUR 3,461 thousand.

2020

(in EURk)	Inventories	Depreciation of inventories
D/A/CH	93,426	2,461
Western Europe	37,563	659
Eastern Europe	26,049	375
Overseas	38,750	1,103
Other countries	10,434	6
Reconciliation	-11,461	0
Einhell Group	194,761	4,604

4.2 Working capital

The financial requirements of the Einhell Group are driven in particular by the level of inventories and trade receivables. Stock turnover rates of inventories and the maturities of trade receivables play a major role here and have a significant impact on the financial requirements.

The Einhell Group's funding derives, on the one hand, from the equity that was provided by its shareholders when the Company was founded and the subsequent capital increases and retained earnings that are set aside in reserves or profits carried forward. In addition, the Einhell Group procures debt capital in the form of loans and short-term borrowings as well as, to some extent, supplier loans. Loans are predominantly denominated in EUR. Supplier loans are mainly in USD or CNY. Anticipated cash flows from the payment of supplier liabilities are largely hedged with adequate hedge transactions.

5. NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS

The consolidated statement of cash flows shows the development of cash flows by inflows and outflows in connection with operating, investing and financing activities.

CASH AND NON-CASH CHANGES IN LIABILITIES FROM DEBT CAPITAL:

2021

(in EURk)	Liabilities to banks	Lease obligations	Liabilities from debt capital
1 January	22,913	12,815	35,728
Cash changes	160,948	-5,251	155,697
Non-cash changes	-68	11,713	11,645
Changes from currency translation	-1,512	-630	-2,142
Changes in basis of consolidation	0	0	0
31 December	182,281	18,647	200,928

2020

(in EURk)	Liabilities to banks	Lease obligations	Liabilities from debt capital
1 January	25,042	12,897	37,939
Cash changes	-234	-4,878	-5,112
Non-cash changes	0	4,659	4,659
Changes from currency translation	-1,942	-306	-2,248
Changes in basis of consolidation	47	443	490
31 December	22,913	12,815	35,728

6. RISK REPORT AND FINANCIAL INSTRUMENTS

6.1 Financial risk management

The Einhell Group operates internationally and is thus exposed to market risks from changes to interest rates (section "6.3 Interest risks") and exchange rates (section "6.5 Foreign currency risks"). The Group uses derivative financial instruments to manage these risks. The guidelines used for managing the associated risks are implemented with the approval of the Board of Directors by a central treasury department working in close cooperation with the Group companies. The Einhell Group monitors the current market environment to assess these risks. Further information on risk management is available in the management report.

6.2 Default risk

Default risks arise from cash and cash equivalents and contractual cash flows from debt instruments that are recognised at amortised cost or at fair value through other comprehensive income. We do not expect any material default risks from these items in the statement of financial position. The carrying amount is the maximum default risk.

Derivatives are acquired from well-known financial institutions; therefore, the Group expects that the maximum default risk from derivatives is covered by their positive market value.

The Einhell Group's most significant exposure to default risks refers to its creditor relationships with wholesale and retail customers (outstanding trade receivables).

RISK MANAGEMENT

To minimise the supplier default risk, both the procurement and project management teams work with the finance department to develop joint security concepts that are permanently validated and improved whenever required.

Einhell's corporate policy is to minimise default risk from customer receivables by using instruments that are customary in international practice. These help Einhell evaluate the default risks of the ordering company for each order based on the relevant economic situation. To counter the risks associated with new customers and high-risk countries in particular, Einhell sometimes uses letters of credit. In the offer phase, the sales and finance departments jointly decide on what collateral is required and adjust these requirements when the orders are placed. Einhell also uses external information from banks and credit agencies to support the risk assessment process whenever this is expedient.

The maximum default risk corresponds to the carrying amount of the receivables. Trade receivables pertain to DIY chains, specialist retailers and discounters and amount to EUR 135,859 thousand (previous year: EUR 119,197 thousand). In financial year 2021, there were no significant receivables for which new terms of payment were agreed. The payment terms vary from country to country and range from 30 to 180 days.

COLLATERAL

For some trade receivables, the Group may request securities in the form of sureties or letters of credit, which the Group can rely on under the terms of the contract if the contracting party defaults on its payment.

The default risk for trade receivables as at 31 December 2021, broken down by insured and uninsured trade receivables, is as follows:

(in EURk)	2021	2020
insured	62,631	63,929
uninsured	73,228	55,268
	135,859	119,197

IMPAIRMENT OF FINANCIAL ASSETS

DEFAULT RISK CATEGORIES

(in EURk)	Category	2021	2020
Trade receivables	1	137,782	120,040
Trade receivables with impaired creditworthiness	2	1,380	3,558
Cash and cash equivalents	N/A	11,513	32,087

The Group classifies each receivable in terms of its default risk.

Impairments of trade receivables are always measured at the amount of the expected credit loss over the term of the contract. In order to determine the expected credit loss, the receivables are allocated to different bands that reflect the time they have been past due.

Furthermore, they are allocated to geographical segments. A specific credit default rate representing the expected credit loss is calculated for each region based on the default status and actual credit losses over the last five years.

COUNTRY RISKS

(in %)	2021	2020
Australia	0.00	0.00
Chile	1.10	0.70
China	0.70	0.40
France	0.20	0.10
Germany	0.00	0.00
Italy	1.10	1.30
Spain	0.40	0.60
Turkey	4.20	3.90
UK	0.00	0.10

Whenever this is required, the rates thus determined are multiplied by scaling factors in order to account for the differences between economic conditions.

Due to the COVID-19 pandemic, the Einhell Group expects slightly higher default risks in financial year 2022. Therefore, the Group recognised additional impairment losses in the amount of EUR 799 thousand (previous year: EUR 1,264 thousand) as at 31 December 2021 to account for the increased default ratio in connection with the COVID-19 pandemic.

The default risk of the customers of our Ukrainian subsidiary is considered to be very high. The impact of the military attacks could lead to massive economic repercussions in the country. The Einhell Group therefore believes that the risk is significantly enhanced and recognised additional impairments of EUR 714 thousand.

When estimating expected credit losses, the Group takes into account appropriate and reliable information that is relevant and available without any unreasonable effort or cost. This includes both quantitative and qualitative information and analyses based on the Group's past experience and well-founded assessment, including forward-looking information.

The following table contains information on the default risk and the expected credit losses for trade receivables as at 31 December 2021.

2021 (in EURk)	Loss rate	Gross carrying amount	Value ad- justment	Creditwor- thiness im- paired
Low risk	1.23%	136,685	1,676	No
Medium risk	17.66%	866	153	No
Below average	40.84%	231	94	No
Doubtful	100.00%	101	101	Yes
Loss	100.00%	1,279	1,279	Yes
		139,162	3,303

2020 (in EURk)	Loss rate	Gross carrying amount	Value ad- justment	Creditwor- thiness im- paired
Low risk	1.51%	118,862	1,809	No
Medium risk	8.67%	621	54	No
Below average	9.78%	557	54	No
Doubtful	42.42%	1,200	508	Yes
Loss	83.81%	2,358	1,976	Yes
		123,598	4,401

The maximum default risk corresponds to the carrying amount of the receivables. $89\%$ (previous year: $93\%$ ) of total gross receivables are not yet due as at the reporting date.

The creditworthiness of trade receivables is deemed impaired if there are indications that they cannot be expected to be paid beyond any doubt. This is the case, for instance, if there are concrete signs of non-payment, such as insolvency.

The Group considers financial assets, save for trade receivables, to be in default if

it is unlikely that the debtor will be able to pay its credit obligation in full to the Group without the Group having recourse to measures such as the realisation of collateral (if any); or
the financial asset is more than 360 days past due as, based on past experience, it is highly unlikely that the payment will be made.

6.3 Interest risks

The interest risk of the Einhell Group stems mainly from interest-bearing financial liabilities.

Given the low interest level and the current market forecasts, the interest risk is currently estimated as being extremely low. Group management therefore decided not to hedge interest risks at present.

The Group is exposed to a cash flow risk from asset items (cash and cash equivalents) that are

subject to variable interest rates. A change in the market interest rate of $1\%$ would have an effect on interests at the reporting date of EUR 762 thousand (previous year: EUR 318 thousand).

6.4 Liquidity risk

Liquidity risk is the possibility that a company will no longer be in a position to meet its financial obligations (such as repayment of financial liabilities or payment of orders). The Einhell Group limits this risk by using effective management of net working capital and cash and traditional credit lines from well-known banks. As at the reporting date, the Group has about EUR 238.0 million (previous year: EUR 156.2 million) in unsecured credit lines including KfW loans to finance its operating business. The Group also keeps a constant eye on the financial markets for financing opportunities in order to secure the financial flexibility of the Einhell Group and limit excessive refinancing risks.

The following table shows all contractual payments as at 31 December 2021 for amortisation, repayments and interest for non-current financial liabilities in the statement of financial position.

(in EURk)	2023	2024 - 2026	2027 ff.
Non-current liabilities to banks	3,693	60,949	29,302
Purchase price liabilities	188	1,803	0
Lease liabilities	4,432	8,385	675
(in EURk)	2022	2023 - 2025	2026 ff.
---	---	---	---
Non-current liabilities to banks	3,259	9,626	7,092
Purchase price liabilities	63	1,797	0
Lease liabilities	3,776	5,700	543

The risk associated with the cash flows shown in the table is limited to cash outflows. Trade payables and other financial liabilities result mainly from financing operating assets (such as property, plant and equipment) and from investments in working capital (such as inventories and trade receivables). These asset values are

taken into account in the effective management of the total liquidity risk. Risk management was extended and strengthened by implementing a Group-wide, Excel-based risk management information system.

Current liabilities are not shown separately as they will all be paid in 2022 and the effect of discounting is immaterial. The payment obligations thus basically equal their carrying amounts.

CASH INFLOWS AND OUTFLOWS FROM FOREIGN EXCHANGE CONTRACTS

| 2021
(in EURk) | Total | of which
non-current |
| --- | --- | --- |
| Cash inflows with positive market values | 982,277 | 268,280 |
| Cash outflows with positive market values | 892,492 | 238,268 |
| | | |
| Cash inflows with negative market values | 162,678 | 33,104 |
| Cash outflows with negative market values | 160,555 | 29,283 |
| | | |
| Total cash inflows | 1,144,955 | 301,384 |
| Total cash outflows | 1,053,047 | 267,551 |
| 2020
(in EURk) | Total | of which
non-current |
| Cash inflows with positive market values | 365,175 | 31,284 |
| Cash outflows with positive market values | 355,836 | 29,609 |
| | | |
| Cash inflows with negative market values | 432,634 | 108,116 |
| Cash outflows with negative market values | 432,073 | 103,756 |
| | | |
| Total cash inflows | 797,809 | 139,400 |
| Total cash outflows | 787,909 | 133,365 |

Sensitivities are specified in section "6.5 Foreign currency risks".

6.5 Foreign currency risks

Due to the international nature of its operations, the Einhell Group is exposed to currency risks.

To manage and minimise these risks, the Einhell Group uses derivative financial instruments with a maximum maturity of three years. In the year under review and in the previous year, the remaining terms did not exceed three years as at the reporting date. The foreign currency risk management system of the Einhell Group has been successfully operated for several years.

Fluctuations in exchange rates can lead to undesirable and unpredictable earnings and cash flow volatility. This affects each company in the Einhell Group that trades with international partners in a currency that is not the functional currency (the relevant national currency). Within the Group, this applies in particular to procurement, which is usually denominated in USD and CNY. Einhell products, in contrast, are mainly sold in the relevant national currency. Planned purchases in USD and CNY are mostly hedged, so there is no concentration of risk here.

Companies in the Einhell Group are forbidden to buy or sell foreign currencies for speculative purposes. Intra-Group financing or investments are, where possible, made in the relevant national currencies or using currency hedges via the parent company. The currency futures that are recognised at fair value through profit or loss mainly pertain to such currency hedges taken out by Einhell Germany AG to hedge internal loans.

The Group designates currency futures to hedge currency risks from procurement transactions and applies a hedging ratio of 1:1.

Given the short-term nature of the USD and CNY payment terms, the USD and CNY exposure from financial instruments pertains mainly to derivative financial instruments. An exchange rate fluctuation of $10\%$ would lead to a currency translation gain or loss before tax of EUR 90,469 thousand or EUR -84,083 thousand, respectively, which, under cash flow hedge accounting, would be recognised in other comprehensive income.

Currency translation gains and losses are calculated on the basis of the exchange rates and the

interest rates for the respective currency on the reporting date. These data are used to determine fictitious market values, which are then compared with the market values on the reporting date.

2021 (in %)		Change in exchange rate +10%	Change in exchange rate -10%
	CNY	-75,846	81,950
	USD	-8,604	8,961
	Other	367	-442
	Total effect	-84,083	90,469
2020 (in %)		Change in exchange rate +10%	Change in exchange rate -10%
	CNY	-47,034	55,803
	USD	-4,442	4,405
	Other	246	-301
	Total effect	-51,230	59,907

The derivative financial instruments are only used to hedge the procurement of goods. A $10\%$ change in exchange rates for derivative financial instruments that are not shown under hedge accounting would result in pre-tax exchange rate gains or losses of EUR 1,076 thousand or EUR -646 thousand, respectively.

2021 (in %)		Change in exchange rate +10%	Change in exchange rate -10%
	CNY	-6,845	9,082
	USD	1,759	-2,200
	GBR	2,423	-2,962
	AUD	2,184	-2,669
	Other	1,555	-1,897
	Total effect	1,076	-646
2020 (in %)		Change in exchange rate +10%	Change in exchange rate -10%
	CNY	-3,732	5,273
	USD	-1,601	1,965
	GBR	762	-932
	AUD	1,153	-1,409
	Other	713	-868
	Total effect	-2,705	4,029

The nominal volume of derivative financial instruments is equivalent to the total of gross purchase price and sales price amounts (not offset against each other) agreed between the parties and is therefore not a reliable indicator for Group risk from the use of derivative financial instruments. Risks and opportunities are reflected in the market value, which is equivalent to the cash value of the derivative financial instruments at the reporting date.

POSITIVE AND NEGATIVE MARKET VALUES OF DERIVATIVE FINANCIAL INSTRUMENTS IN 2021

2021 (in EURk)	Gross amount shown	Offset- ting amount	Net amount shown
Derivatives with positive market values	68,928	0	68,928
Derivatives with negative market values	1,479	0	1,479
2020 (in EURk)	Gross amount shown	Offset- ting amount	Net amount shown
Derivatives with positive market values	7,409	0	7,409
Derivatives with negative market values	6,834	0	6,834

The table shows the potential effects of the offsetting of financial assets and financial liabilities that are based on legally enforceable master netting arrangements or similar contracts. Einhell may only offset financial assets and financial liabilities as per IAS 32 if it has a legal right of setoff and Einhell actually intends to settle on a net basis.

FINANCIAL INSTRUMENTS WITH A POSITIVE MARKET VALUE FROM CASH FLOW HEDGE

(in EURk)	Nominal volume		Market value
	2021	2020	2021	2020
Long-term currency futures	268,280	31,284	14,596	574
Short-term currency futures	578,077	237,800	46,404	5,529
	846,357	269,084	61,000	6,103

FINANCIAL INSTRUMENTS WITH A NEGATIVE MARKET VALUE FROM CASH FLOW HEDGE

(in EURk)	Nominal volume		Market value
	2021	2020	2021	2020
Long-term currency futures	33,104	108,116	120	738
Short-term currency futures	36,808	239,882	1,025	4,983
	69,912	347,998	1,145	5,721

The underlying transactions refer to contracted and planned purchases. Most of the cash flows are expected within a period of twelve months and are recognised in the acquisition cost of inventories. Ineffectiveness resulting from cash flow hedges is immaterial to hedge accounting due to the short-term nature of the hedge transactions. The main reasons for ineffectiveness of these hedging relationships are:

the effect of counterparty and Group credit risk on the fair value of forward foreign exchange contracts, which is not reflected in the change in fair value of the hedged cash flows attributable to changes in foreign exchange rates;
changes in the timing of hedged transactions.

The nominal volume of derivatives that have a maturity of more than twelve months on the reporting date amounts to EUR 301,384 thousand. The market value of the derivatives amounts to EUR 14,476 thousand.

The changes in the reserve for cash flow hedges is illustrated in the statement of changes in equity.

Cash flow hedging

The Group mainly controls and monitors market risks through its operating business activities and uses derivative financial instruments whenever required. The Einhell Group only uses these instruments to hedge procurement risks.

The Group held the following instruments to hedge against currency translation risks as at 31 December 2021.

2021	Maturity
Hedge against material currency translation risks	up to one year	more than one year

Currency futures
Net risk in EURk	901,627	301,383
Hedge against material currency translation risks	Delta reporting date rate vs. hedging rate in %
---	---	---
CNY	-16% to 15%	-15% to -5%
USD	-15% to 12%
GBP	-2% to 0%
AUD	0%
2020	Maturity
---	---	---
Hedge against material currency translation risks	up to one year	more than one year

Currency futures
Net risk in EURk	508,459	139,340
Hedge against material currency translation risks	Delta reporting date rate vs. hedging rate in %
---	---	---
CNY	-9% to 9%	-8% to -1%
USD	-12% to 22%
GBP	-1% to 0%
AUD	-2% to -1%

6.6 Market values and carrying amounts of financial instruments

Pursuant to IFRS 9, financial instruments (assets and liabilities) are allocated to different measurement categories. The allocation to a particular measurement category determines whether the financial instrument is measured at its fair value. The following table shows the carrying amount and fair value for the individual categories and the measurement category in the statement of financial position. The fair values are provided by banks or determined on the basis of generally accepted measurement models. The initial recognition parameters used in these models are the relevant observable market prices at the reporting date, such as volatilities and forward rates, and interest rates. For current assets and liabilities, the carrying amounts provide a good indication of the fair value. The carrying amounts and fair values of non-current liabilities from debt capital do not vary greatly either, as there are no significant changes regarding the creditworthiness of the Company that would lead to a change in the discount rate.

The following table shows the carrying amounts and fair values of financial assets and financial liabilities including their levels in the fair value hierarchy. It does not include any information on the fair values of financial assets and financial liabilities that were not measured at fair value if the carrying amount provides an appropriate approximation to the fair value.

	CARRYING AMOUNT						FAIR VALUE
2021(in EURk)	Measure-ment at FVTPL is mandatory - others	Conditional consideration at fair value	Fair value - hedging instru-ments	Financial assets at amortised cost	FVOCI - equity instru-ments	Other finan-cial liabilities	Total	Level 1	Level 2	Level 3	Total
Financial assets measured at fair value
Currency futures for hedging purposes			60,999				60,999		60,999		60,999
Hedging derivatives not subject to hedge ac-counting	7,928						7,928		7,928		7,928
Non-derivative financial assets				1,758	332		2,090		332		332
	7,928	0	60,999	1,758	332	0	71,018	0	69,260	0	69,260
Financial assets not measured at fair value
Trade receivables				135,859			135,859
Cash and cash equivalents				11,513			11,513
	0	0	0	147,372	0	0	147,372	0	0	0	0
Financial liabilities measured at fair value
Currency futures for hedging purposes			1,145				1,145		1,145		1,145
Hedging derivatives not subject to hedge ac-counting	334						334		334		334
Contingent consideration		725					725			725	725
	334	725	1,145	0	0	0	2,204	0	1,479	725	2,204
Financial liabilities not measured at fair value
Loans and overdrafts (secured, unsecured)						182,282	182,282
Trade payables						137,500	137,500
Put liabilities for the acquisition of non-con-trolling interests in South Africa						1,601	1,601
	0	0	0	0	0	321,383	321,383	0	0	0	0

	CARRYING AMOUNT							FAIR VALUE
2020(in EURk)	Measure-ment at FVTPL is mandatory - others	Conditional consideration at fair value	Fair value - hedging instru-ments	Financial assets at amortised cost	FVOCI - eq-uity instru-ments	Other finan-cial liabilities	Total	Level 1	Level 2	Level 3	Total
Financial assets measured at fair value
Currency futures for hedging purposes			6,103				6,103		6,103		6,103
Hedging derivatives not subject to hedge accounting	1,306						1,306		1,306		1,306
Non-derivative financial assets				779	333		1,112		333		333
	1,306	0	6,103	779	333	0	8,521	0	7,742	0	7,742
Financial assets not measured at fair value
Trade receivables				119,197			119,197
Cash and cash equivalents				32,087			32,087
	0	0	0	151,284	0	0	151,284	0	0	0	0
Financial liabilities measured at fair value
Currency futures for hedging purposes			5,721				5,721		5,721		5,721
Hedging derivatives not subject to hedge accounting	1,113						1,113		1,113		1,113
Contingent consideration		319					319			319	319
	1,113	319	5,721	0	0	0	7,153	0	6,834	319	7,153
Financial liabilities not measured at fair value
Loans and overdrafts (secured, unse-cured)						22,913	22,913
Trade payables						96,799	96,799
Put liabilities for the acquisition of non-controlling interests in South Africa						1,188	1,188
	0	0	0	0	0	120,900	120,900	0	0	0	0

Net gains and net losses from financial instruments include measurement results, the recognition of impairment losses, results from currency translation and interest, and any other effects on profit or loss in connection with financial instruments. The line item contingent consideration measured at fair value through profit or loss in the statement of financial position refers to earnings effects from the earn-out liabilities of Lawn Star and Mould Star.

NET GAINS AND NET LOSSES FROM FINANCIAL INSTRUMENTS

(in EURk)	2021	2020
FVOCI	0	0
of which interest result	0	0
Financial assets and liabilities for which measurement at FVTPL is mandatory	-532	-736
of which interest result	0	0
at amortised cost	784	-3,893
Financial assets	898	-1,890
of which interest result	113	138
Financial liabilities	-114	-2,003
of which interest result	-1,620	-895
Contingent consideration recognised at FVTPL	725	319
of which interest result	-15	-7

FAIR VALUE MEASUREMENT

a) Valuation techniques and material, unobservable input factors

The following table shows the valuation techniques that were used to measure level 2 and level 3 fair values as well as the material, unobservable input factors that were applied:

FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE

Type	Valuation technique	Material, unobservable input factors	Relation between material, unobservable input factors and measurement at fair value
Contingent consideration	Discounted cash flows: the valuation model considers the present value of expected payments, discounted for a risk-adjusted discount rate.	Forecast annual EBT as per the most recent adopted business planning (up to about EUR 730 thousand p.a.) multiplied by a contractually defined factor.	The estimated fair value would rise/fall if:
• the annual average revenue growth rate were higher/lower
• the EBIT margin were higher/lower
• the risk-related discount rate were lower/higher

A change in the annual revenue growth rate automatically entails a change in EBIT in the same direction. |
| Equity investments | Market comparison method: The valuation model is based on price quotes by brokers. Similar contracts are traded on an active market, and the price quotes reflect actual transactions for similar instruments. | N/A | N/A |
| Currency futures | Forward rate pricing: the fair value is determined by using forward rates quoted on the reporting date and net cash value calculations that are based on yield curves with strong creditworthiness in the corresponding currencies. | N/A | N/A |

FINANCIAL INSTRUMENTS NOT MEASURED AT FAIR VALUE

Type	Valuation technique	Material, unobservable input factors	Relation between material, unobservable input factors and measurement at fair value
Financial liabilities (secured and unsecured bank loans)	Discounted cash flows	N/A	N/A

b) Reclassifications between level 1 and level 2

In 2020 and 2021, no reclassifications were performed in either direction.

c) Fair values in level 3

RECONCILIATION OF FAIR VALUES IN LEVEL 3

CONTINGENT CONSIDERATION

(in EURk)

As at 1 January 2021	319
Earnout payment Lawn Star Pty Ltd	-383
Addition of earn-out liability Lawn Star Pty Ltd	797
Loss recognised in borrowing expenses	12
FX effects recognised in adjustment from currency translation item	-3
Earnout payment Mould Star Pty Ltd	-96
Addition of earn-out liability Mould Star Pty Ltd	77
Loss recognised in borrowing expenses	3
FX effects recognised in adjustment from currency translation item	-1
As at 31 December 2021	725

There were no reclassifications from or to level 3.

7. OTHER NOTES

7.1 Lease contracts

The Einhell Group has only entered into lease contracts in which it is the lessee.

The Group rents primarily warehouses and office buildings. The term of the leases is based on the agreements in the lease contract. Depending on the contract, lease payments are renegotiated after expiration of definite terms in order to reflect market rents. Some lease contracts provide for additional rental payments based on changes in local price indices. Certain lease agreements prohibit the Group from entering into subleases.

The warehouse and office leases were concluded many years ago as combined leases of land and buildings.

In addition, the Group leases vehicles and IT hardware with contractual terms of between one and five years.

For lease contracts that are either short-term and/or refer to leases of low-value assets, the Group has not recognised any right-of-use assets or lease liabilities.

Additional information on the right-of-use assets recognised in the statement of financial position is provided in the statement of assets (see section "2.1 Changes in non-current assets"). A maturity analysis of lease liabilities is provided in section "6.4 Liquidity risk".

AMOUNTS RECOGNISED IN THE STATEMENT OF INCOME

(in EURk)	2021	2020
Lease contracts according to IFRS 16
Interest expenses	357	235
Expenses for short-term leases	18	43
Expenses for leases of low-value assets	45	38

AMOUNTS RECOGNISED IN THE CASH FLOW STATEMENT

(in EURk)	2021	2020
Total cash outflow for lease contracts	5,609	5,194

EXTENSION OPTIONS

Some leases contain extension options that can be exercised by the Group up to one year before the end of the non-cancellable lease term. Wherever possible, the Group aims to include extension options when concluding new leases in order to ensure operational flexibility. The extension options are usually only exercisable by the Group and not by the lessor. The Group assesses on the commencement date whether the exercise of extension options is reasonably certain. The Group reassesses whether it is reasonably certain that an extension option will be exercised if a significant event or significant change in circumstances occurs.

The Group has recognised potential future lease payments as lease liabilities, provided that the extension options are likely to be exercised.

7.2 Other financial obligations

The other financial obligations from orders outstanding amounted to EUR 369,699 thousand on the reporting date (previous year: EUR 340,069 thousand).

7.3 Corporate Governance Code

The Board of Directors and the Supervisory Board of Einhell Germany AG have made the declaration of compliance prescribed by Section 161 of the German Stock Corporation Act (AktG) and made this permanently available to shareholders on the Group's website at www.einhell.com.

7.4 Related party disclosures

On 24 October 2002, Thannhuber AG, Landau a. d. Isar, submitted a notification pursuant to section 21(1) of the Securities Trading Act (WpHG) that its share of voting rights in Einhell Germany AG had exceeded the 75% threshold on 13 October 2002. Thannhuber AG is therefore the controlling shareholder of Einhell Germany AG. The following shareholdings and interlocking directorships exist between Thannhuber AG and Einhell Germany AG:

Philipp Thannhuber (Deputy Chairman of the Supervisory Board of Einhell Germany AG) is a shareholder and member of the board of Thannhuber AG.
Dr Markus Thannhuber (member of the Board of Directors of Einhell Germany AG) is a shareholder and deputy chairman of the supervisory board of Thannhuber AG.

In financial year 2021, Philipp Thannhuber and Dr Markus Thannhuber received remuneration for their activities in the corporate bodies of Einhell Germany AG.

The value of transactions and balances outstanding in connection with Thannhuber AG and its related parties break down as follows.

(in EURk)	Value of transactions		Outstanding balances as at 31 December
	2021	2020	2021	2020
Consulting (*)	26	27	13	0

(*) The Group used consulting services provided by Josef Thannhuber, Chairman of the Supervisory Board of Thannhuber AG, for project planning and implementation of construction and property projects. The fee invoiced for these services corresponded to normal market rates. The invoice amounts were due in line with normal payment terms.

Einhell Germany AG sold small amounts of goods to Comedes GmbH (managing director Philipp Thannhuber). iSC GmbH shipped a small amount of palleted goods on behalf of Comedes GmbH. The revenue from these shipping and sales services is immaterial and is based on the arm's length principle.

A report pursuant to Section 312 of the German Stock Corporation Act (AktG) was prepared on Einhell Germany AG's relationships with affiliated companies, which is concluded with the following statement: "During the period under review, Einhell Germany AG did not enter into any legal transactions with Thannhuber AG, or in the interest or at the request of Thannhuber AG, and did not take or refrain from taking any measures that would have disadvantaged Einhell Germany AG."

Related parties further include key management personnel. This includes the Board of Directors and the Supervisory Board. Information on their remuneration is provided in the section "7.5 Remuneration of the Board of Directors and the Su

pervisory Board". A list of all the individual members is included in the section "9. CORPORATE BODIES".

7.5 Remuneration of the Board of Directors and the Supervisory Board

Remuneration of key management personnel comprises:

(in EURk)	LONG-TERM
	2021	2020
Non-performance based components	0	0
Performance-based components	0	0
Increase in other entitlements	756	1,187
	756	1,187
(in EURk)	SHORT-TERM
---	---	---
	2021	2020
Non-performance based components	1,384	1,341
Performance-based components	9,691	6,839
Increase in other entitlements	0	0
	11,075	8,180

The additions to pension provisions amount to EUR 163 thousand (previous year: EUR 136 thousand). The final balance of the defined benefit obligations for active members of the Board of Directors amounts to EUR 2,072 thousand (previous year: EUR 2,183 thousand).

Members of the Board of Directors receive fixed and performance-based variable remuneration with short-term components. The performance-based components depend on consolidated net profit, segment earnings in the previous financial year, growth of Group assets and personal targets. The members of the Board of Directors

hold shares in Einhell Germany AG. There are no share option programmes or similar schemes.

Pension provisions for this group of persons totalling EUR 12,240 thousand (previous year: EUR 8,863 thousand) were recognised in liabilities. EUR 3,743 thousand thereof (previous year: EUR 2,987 thousand) refer to commitments by Einhell Germany AG towards some members of the Board of Directors, whose claims accrue on a pro-rata basis over the term of their office. The entitlements each become fully vested after a maximum period of 12 years.

Pension provisions of EUR 1,817 thousand (previous year: EUR 1,973 thousand) were set aside for former members of the Board of Directors. Pension benefits in the amount of EUR 121 thousand (previous year: EUR 118 thousand) were paid out to former members of the Board of Directors during the year under review.

The total remuneration of the Supervisory Board amounted to EUR 176 thousand (previous year: EUR 143 thousand) in the past financial year.

No loans or share options were granted to members of the Board of Directors or the Supervisory Board.

7.6 Auditor fees

Fees for the auditor Rödl & Partner GmbH entered as expense amount to EUR 238 thousand in the year under review (previous year: EUR 171 thousand). The fees pertain to the audit of the annual accounts and the consolidated financial statements. Fees of EUR 11 thousand (previous year: EUR 10 thousand) were recognised for other services related to the audit of the system for compliance with requirements resulting from Section 20 (1) of the Securities Trading Act (WpHG).

7.7 Events after the reporting date

On 17 February 2022, Einhell Germany AG signed an agreement to acquire two-thirds of the shares in the Canadian company Outillages King Canada, Inc. (King Canada). King Canada is a distributor of electronic tools, industrial equipment and other equipment for the Canadian market. With this acquisition, Einhell gains access to the Canadian market and King Canada's DIY store and specialist retail customers.

The purchase price for two thirds of the shares amounts to EUR 17.8 million in cash. Einhell as the majority shareholder and Howard Richman as the minority shareholder hold mutual options to transfer the remaining shares upon the occurrence of defined conditions.

The purchase price allocation and the initial accounting of the business combination has been initiated, but is not yet complete. Full disclosures on the company acquisition in accordance with IFRS 3 are therefore still outstanding. The purchase price allocation involves a revaluation of the assets acquired and liabilities assumed as well as an analysis of the information on the company acquisition.

The transaction was closed on 1 March 2022.

From today's perspective, the armed conflict between Russia and Ukraine does not lead to any change in the forecast for Einhell Group. Revenues generated in Ukraine and Russia account for only 1% of Einhell's total revenue, but the impact on assets and liabilities is difficult to assess at this stage.

The recoverability of Einhell Ukraine's trade receivables (EUR 1.9 million) and inventories (EUR 1.9 million) may be impaired. It is doubtful whether trade receivables that are outstanding at the reporting date can still be collected, and whether warehouses and inventories will still be intact.

8. LIST OF SHAREHOLDINGS

31 December 2021	Capital share in %	Equity in EURk	Net income in EURk
iSC GmbH, Landau a. d. Isar/Germany	100.0	1,134	1
Hansi Anhai Far East Ltd., Hong Kong/China	100.0	4,072	1,012
HAFE Trading Ltd., Hong Kong/China	100.0	3,516	371
Hans Einhell China (Chongqing) Co. Ltd., Chongqing/China	100.0	3,708	27
Hansi Anhai Youyang Ltd., Chongqing/China	100.0	9,591	2,911
Hans Einhell (Shanghai) Trading Co., Ltd., Shanghai/China	100.0	3,426	203
Einhell Österreich Gesellschaft m.b.H., Vienna/Austria	100.0	2,628	1,627
Einhell Portugal – Comércio Int., Lda., Arcozelo/Portugal	100.0	4,894	583
Einhell Benelux B.V., Breda/Netherlands	100.0	1,059	75
Einhell Italia s.r.l., Milan/Italy	100.0	19,892	4,927
Comercial Einhell S.A., Madrid/Spain	100.0	9,031	2,305
Einhell Polska Sp.z o.o., Wroclaw/Poland	90.0	5,260	2,034
Einhell Hungaria Kft., Budapest/Hungary	100.0	3,333	1,118
Einhell Schweiz AG, Winterthur/Switzerland	100.0	5,137	1,579
Einhell UK Ltd., Merseyside/UK	100.0	3,777	925
Einhell Bulgarien OOD., Varna/Bulgaria	67.0	716	389
Einhell Croatia d.o.o., Sveti Križ Začretje/Croatia	100.0	7,714	2,160
Einhell BiH d.o.o., Vitez/Bosnia	66.7	4,074	710
Einhell d.o.o. Beograd, Belgrade/Serbia	100.0	2,259	152
Einhell Romania SRL, Bucharest/Romania	100.0	3,821	808
Svenska Einhell AB, Malmö/Sweden	100.0	25	-3
Einhell Holding Gesellschaft m.b.H., Wels/Austria	100.0	11,227	3,329
Einhell-Unicore s.r.o., Carlsbad/Czech Republic	100.0	2,441	556
Einhell Turkey Dis Ticaret Anonim Sirketi, Istanbul/Turkey	100.0	2,840	1,525
Anxall Hellas A.E., Athens/Greece	100.0	2,207	329
Einhell Chile S.A., Santiago/Chile	100.0	8,962	5,150
Einhell Nordic AS, Lystrup/Denmark	51.0	1,587	1,318
Einhell France SAS, Villepinte/France	100.0	9,749	3,412
Einhell Argentina S.A., Buenos Aires/Argentina	100.0	5,309	905
kwb Germany GmbH, Stuhr/Germany	100.0	2,646	353
Einhell LLC, St. Petersburg/Russia	100.0	3,051	1,331
Hans Einhell Ukraine TOV, Kiev/Ukraine	100.0	1,559	402
Einhell Holding Australia Pty. Ltd., Melbourne/Australia	100.0	24,365	4,433
Einhell Colombia S.A.S., Bogota/Colombia	100.0	1,241	1,029

Ozito Industries Pty Ltd, Melbourne/Australia	100.0	33,741	12,635
ECOmmerce System GmbH, Landau a. d. Isar/Germany	100.0	2,975	0
ECOmmerce System s.r.o., Prague/Czech Republic	90.0	438	-1,121
Lawn Star Pty Ltd, Cape Town/South Africa	51.0	763	150
Mould Star Pty Ltd, Cape Town/South Africa	51.0	194	19
Einhell Electro Machinery Technology Co. Ltd., Kunshan City/China	100.0	12,102	1,833
Einhell Uruguay S.A., Montevideo/Uruguay	100.0	-47	-45
Einhell US Holding Inc., Dover/USA	100.0	96	-3

The figures for equity and earnings correspond to the figures shown in the annual financial statements that are all uniformly prepared in accordance with IFRS. Equity figures in foreign currency are converted at the exchange rate on the reporting date, while earnings figures are converted at the average rate.

9. CORPORATE BODIES

9.1 The Board of Directors

In financial year 2021, the Board of Directors of Einhell Germany AG comprised:

Andreas Kroiss, Linz/Austria (Chairman)
Sales and distribution, procurement, marketing, product management, corporate strategy
Jan Teichert, Metten
Finance and accounting, taxes, internal audit, legal, controlling, investor relations, HR, maintenance
Dr Markus Thannhuber, Landau a. d. Isar
Technology, product development, quality control, supply chain management, production
Dr Christoph Urban, Dingolfing
Services, IT, digitalisation

Andreas Kroiss is Managing Director of KA-Invest GmbH, Linz.

Dr Markus Thannhuber is the Deputy Chairman of the Supervisory Board of Thannhuber AG, Landau an der Isar and Managing Director of MAPHITHA 2 GmbH, Landau a. d. Isar.

Dr Christoph Urban is the Chairman of the Supervisory Board of Volksbank-Raiffeisenbank Ostbayern Mitte eG, Straubing.

9.2 Supervisory Board

In financial year 2021, the Supervisory Board of Einhell Germany AG comprised:

Univ.-Prof. Dr.-Ing. Dr.-Ing. E.h. Dr. h.c. Dieter Spath, Sasbachwalden, Chairman

Director of Fraunhofer Institute for Industrial Engineering IAO and Director of Institute of Human Factors and Technology Management IAT at the University of Stuttgart, Stuttgart, until October 2021
President of acatech – National Academy of Science and Engineering, Munich, until March 2021
President and Chairman of the Board of TÜV Rheinland Berlin Brandenburg Pfalz e.V., Cologne, since October 2021

Philipp Thannhuber, Wallersdorf, Deputy Chairman

Managing Director of Comedes GmbH, Wallersdorf
Managing Director of WOTOX GmbH, Landau a. d. Isar
Managing Director of MAPHITHA Verwaltungs GmbH, Landau a. d. Isar
Managing Director of MAPHITHA 2 GmbH, Landau a. d. Isar
Member of the Board of Directors Thannhuber AG, Landau a. d. Isar

Maximilian Fritz, Wallersdorf - Haidlfing, Employee representative

Sales representative

Univ.-Prof. Dr.-Ing. Dr.-Ing. E.h. Dr. h.c. Dieter Spath is a member of the following Supervisory Boards and Administrative Boards:

LIEBICH & PARTNER Management- und Personalberatung AG, Baden-Baden, Chairman of the Supervisory Board
Zeppelin GmbH, Garching, member of the Supervisory Board
TÜV Rheinland AG, Cologne, member of the Supervisory Board

Landau a. d. Isar, 31 March 2022

Einhell Germany AG
The Board of Directors

Andreas Kroiss

Jan Teichert

Dr Markus Thannhuber

Dr Christoph Urban

"The auditor's report reproduced below also includes a "note on the audit of the electronic reproductions of the financial statements and the management report prepared for the purpose of disclosure in accordance with Section 317 (3b) of the German Commercial Code" ("ESEF note"). The subject of the audit on which the ESEF note is based (ESEF documents to be audited) is not attached. The audited ESEF documents can be viewed in the Federal Gazette or retrieved from it."

Unqualified Report by the Independent Auditor

to Einhell Germany AG, Landau an der Isar

Report on the audit of the consolidated financial statements and of the combined management report

Opinions

We have audited the consolidated financial statements prepared by Einhell Germany AG, Landau an der Isar, and its subsidiaries (the Group) comprising the consolidated statement of financial position as at 31 December 2021, the consolidated statement of income, the consolidated statement of comprehensive income, the consolidated statement of cash flows and the consolidated statement of changes in equity for the financial year from 1 January to 31 December 2021 as well as the notes to the consolidated financial statements and a summary of significant accounting policies. We further audited the combined management report of Einhell Germany AG, Landau an der Isar for the financial year from 1 January to 31 December 2021. In accordance with German legal requirements, we have not audited the contents of the combined management report mentioned in the section "Other information" of our audit opinion.

In our opinion, on the basis of the knowledge obtained in the audit,

the accompanying consolidated financial statements comply, in all material respects, with the IFRSs as adopted by the EU, and the additional applicable requirements of German commercial law pursuant to Section 315e (1) German Commercial Code (HGB) and, in compliance with these requirements, give a true and fair view of the assets, liabilities and financial position of the Group as at 31 December 2021, and of its financial performance for the financial year from 1 January to 31 December 2021, and, the combined management report as a whole provides an appropriate view of the Group's position.
this combined management report is consistent in all material respects with the consolidated financial statements, complies with German legal requirements and appropriately presents the opportunities and risks of future development. Our audit opinion on the combined management report does not cover the contents of those parts of the combined management report that are included in the "Other information" section.

Pursuant to Section 322 (3) Sentence 1 German Commercial Code (HGB), we declare that our audit has not led to any reservations relating to the legal compliance of the consolidated financial statements and of the combined management report.

Basis for the opinions

We conducted our audit of the consolidated financial statements and of the combined management report in accordance with Section 317 German Commercial Code (HGB) and the EU Audit Regulation (No 537/2014, hereinafter referred to as "EU Audit Regulation") and in compliance with German Generally Accepted Standards for Financial Statement Audits promulgated by the Institute of Public Audi

tors in Germany (IDW). Our responsibilities under those requirements and principles are further described in the “Auditor’s responsibilities for the audit of the consolidated financial statements and of the combined management report” section of our auditor’s report. We are independent of the group entities in accordance with the requirements of European law and German commercial and professional law, and we have fulfilled our other German professional responsibilities in accordance with these requirements. In addition, in accordance with Art. 10 (2) f) of the EU Audit Regulation, we declare that we have not provided non-audit services prohibited under Art. 5 (1) of the EU Audit Regulation. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions on the consolidated financial statements and on the combined management report.

Key audit matters in the audit of the consolidated financial statements

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial statements for the financial year from 1 January to 31 December 2021. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon; we do not provide a separate opinion on these matters.

In our opinion, the matters set out below were the most significant for our audit (key audit matters):

Recoverability of goods

Reasons for definition as a key audit matter

Goods in the amount of EUR 447.4 million are reported in the consolidated statement of financial position as at 31 December 2021. This item includes impairments in the amount of EUR 11.7 million. The value of goods, which are initially measured at acquisition cost (including ancillary costs of acquisition), must be adjusted if their expected net realisable value no longer meets the acquisition cost. Discretionary leeway must be exercised in order to determine the net realisable values that form the value ceiling. The net realisable value is based, in part, on forward-looking estimates regarding the amounts that are likely to be realised when selling the goods.

The risk in connection with the financial statements is that goods might be overvalued if the need to recognise impairments was not identified.

Our audit approach

Our audit activities comprised, as a first step, obtaining an understanding of the process steps and internal controls implemented for the calculation of the expected net realisable values. We have, by means of a random selection, assessed the selling prices underlying the calculation of the net realisable value on the basis of sales prices directly after the reporting date. We also assessed the company’s inventory coverage analyses and verified whether the value adjustments recognised are appropriate. We verified the arithmetical accuracy of the calculations for determining the net realisable value and for determining the impairment amounts for inventories based on a deliberately risk-oriented selection as well as a random selection.

Reference to related information

For the accounting and valuation methods applied in the financial year with regard to inventories, please refer to item “1.7 Accounting and valuation principles” and item “2.5 Inventories” in the notes to the consolidated financial statements and section “2.3 b) Management system” in the combined management report.

Accrual of revenue

Reasons for definition as a key audit matter

In financial year 2021, revenue amounted to EUR 927.4 million. The Group recognises revenue upon transfer of control to the customer. For contracts with customers that allow returns, revenue is recognised to the extent that it is highly probable that no material adjustment will have to be made to the cumulative revenue recognised. The amount of revenue recognised is therefore adjusted for expected returns estimated on the basis of historical data. The key markets of the Group are in Europe and Australia. The group companies make different agreements with customers that govern international deliveries of products. As different contractual arrangements are made for different markets and discretionary decisions are made to determine and assess the time of transfer of control, there is a risk that revenues are not delimited correctly in the financial statements with regard to the cut-off date and thus revenue is recognised in the wrong period.

Our audit approach

Our audit activities comprised, as a first step, obtaining an understanding of the process steps and internal controls implemented with respect to order acceptance, outgoing goods and invoicing and, in particular, with respect to the determination and verification of the correct or actual transfer of risk. In addition, we have assessed the timing and amount of revenue recognised by matching the booked outgoing invoices to the related purchase orders and external proofs of delivery and payments received. The revenue bookings in financial year 2021 to be assessed were selected on the basis of their amount to reflect their risk relevance and on the basis of random selection. Based on this deliberate selection of risk-relevant revenue bookings as well as the random selection, we then reviewed the corresponding revenue bookings over a fixed period before and after the reporting date with respect to correct accrual by comparing external delivery notes for these select revenue bookings with the time of revenue recognition. In addition, we analysed all revenue bookings broken down by users over a fixed period before the reporting date. The selection of users was based on risk-oriented considerations on the one hand and using a mathematical-statistical method on the other. Furthermore, we examined credits for and cancellations of revenue for a certain period after the reporting date to identify any unrealised revenue in financial year 2021.

Reference to related information

Please refer to item "1.7 Accounting and valuation principles" and item "3.1 Revenue" in the notes to the consolidated financial statements for information on the methods used to recognise revenue.

Other information

The legal representatives are responsible for the other information. The other information section includes the following parts of the combined management report, the contents of which were not audited:

the non-financial group statement referred to in section "7. Corporate Social Responsibility (CSR)" in the combined management report,
the Group's combined corporate governance statement referred to in the section "Corporate Governance Statement" in the combined management report,
non-mandatory information contained in the combined management report that is designated as unaudited, and

the other parts of the annual report, with the exception of the audited consolidated financial statements and the components of the combined management report the contents of which were audited, and our audit opinion.

Our opinions on the consolidated financial statements and the combined management report do not cover the other information, and consequently we do not express an opinion or any other form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, we have a responsibility to read the other information referred to above and, in doing so, consider whether the other information

is materially inconsistent with the consolidated financial statements, the content of the audited information in the combined management report or the findings we obtained in the audit,
or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there has been a material misstatement of such other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the legal representatives and the supervisory board for the consolidated financial statements and the combined management report

The legal representatives are responsible for the preparation of consolidated financial statements that comply, in all material respects, with IFRS as adopted by the EU and the additional applicable requirements of German commercial law pursuant to Section 315e (1) German Commercial Code (HGB), and that the consolidated financial statements, in compliance with these requirements, give a true and fair view of net assets, financial position and results of operations of the Group. Furthermore, the legal representatives are responsible for such internal controls as they determine necessary to enable the preparation of consolidated financial statements that are free from material misstatements, whether due to fraud or error.

In preparing the consolidated financial statements, the legal representatives are responsible for the assessment of the Group's ability to continue as a going concern. They are also responsible for disclosing, as applicable, matters related to the continuation of the Group as a going concern. In addition, they have responsibility for accounting on the basis of the going concern principle, unless there is the intention to liquidate the Group or to discontinue operations or there is no realistic alternative.

The legal representatives are also responsible for preparing the combined management report, which as a whole provides an accurate picture of the Group's position, is consistent in all material respects with the consolidated financial statements, complies with German law and adequately depicts the opportunities and risks related to the future performance. Furthermore, the legal representatives are responsible for the precautions and measures (systems) which they have deemed necessary to enable the preparation of a combined management report in accordance with German statutory requirements and to provide sufficient suitable evidence for the statements in the combined management report.

The Supervisory Board is responsible for overseeing the Group's accounting process for the preparation of the consolidated financial statements and the combined management report.

Responsibility of the statutory auditor for the audit of the consolidated financial statements and the combined management report

Our objective is to obtain reasonable assurance as to whether the consolidated financial statements as a whole are free from material misstatements, whether due to fraud or error, and whether the combined management report as a whole provides an accurate picture of the Group's position and, in all material respects, is in accordance with the consolidated financial statements and the findings of our audit and German statutory provisions, and accurately depicts the opportunities and risks related to the future performance, and to issue an audit report that includes our audit opinion on the consolidated financial statements and the combined management report.

Reasonable assurance represents a high degree of certainty, but no guarantee that an audit conducted in accordance with Section 317 German Commercial Code (HGB) and the EU Audit Regulation as well as the German Generally Accepted Standards for Financial Statement Audits promulgated by the German Institute of Public Auditors (IDW) will always reveal a material misstatement. Misstatements may result from infringements or inaccuracies and are considered material if it could reasonably be expected that they will, individually or collectively, influence the economic decisions of addressees made on the basis of these consolidated financial statements and the combined management report.

During our audit we exercise professional judgement and due scepticism. Moreover,

we identify and assess the risks of material misstatements, whether due to fraud or error, in the consolidated financial statements and the combined management report, plan and perform audit procedures in response to these risks, and obtain audit evidence that is sufficient and appropriate to form the basis for our audit opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls;
we obtain an understanding of the internal control system relevant to the audit of the consolidated financial statements and the arrangements and measures relevant to the audit of the combined management report that are appropriate in the circumstances, but not for the purpose of expressing an audit opinion on the effectiveness of these systems;
we express an opinion on the appropriateness of the accounting policies used by the legal representatives and the reasonableness of the accounting estimates and related disclosures made by the legal representatives;
we draw conclusions about the appropriateness of the going concern principle applied by the legal representatives and assess, based on the audit evidence obtained, whether there is material uncertainty in connection with events or circumstances that could raise significant doubts about the Group's ability to continue as a going concern. If we come to the conclusion that there is material uncertainty, we are obliged to draw attention to the relevant information in the consolidated financial statements and the combined management report in our audit report or, if this information is inadequate, to modify our auditor's opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or circumstances may cause the Group to cease to continue as a going concern;
we express an opinion on the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and assess whether the consolidated financial statements present the underlying transactions and events such that the consolidated financial statements give a true and fair view of the net assets, financial position and results of

operations of the Group in accordance with the IFRS applicable within the EU and the additional requirements of German law in accordance with Section 315e (1) German Commercial Code (HGB);

we obtain sufficient suitable audit evidence for the accounting information of the companies or business activities within the Group to enable us to express an opinion on the consolidated financial statements and the combined management report. We are responsible for guiding the audit of the consolidated financial statements, its supervision and execution. We have sole responsibility for our audit opinions;
we assess the consistency of the combined management report with the consolidated financial statements, its compliance with the law and the picture it portrays of the Group's position;
we carry out audit procedures on the forward-looking statements presented by the legal representatives in the combined management report. Based on sufficient, appropriate audit evidence, we retrace in particular the significant assumptions underlying the forward-looking statements made by the legal representatives and assess the appropriate derivation of the forward-looking statements from these assumptions. We do not issue a separate audit opinion on the forward-looking statements and the underlying assumptions. There is significant unavoidable risk that future events could differ materially from the forward-looking statements.

We discuss with those charged with governance issues subjects such as the planned scope and timing of the audit and significant audit findings, including any deficiencies in the internal control system that we identify during our audit.

We make a statement to those charged with governance that we have complied with the relevant independence requirements and discuss with them all relationships and other matters that can reasonably be expected to affect our independence, and the safeguarding measures taken in this respect.

From the matters that we discussed with those charged with governance, we determine those matters that were most significant in the audit of the consolidated financial statements for the current period under review and are therefore considered key audit matters. We describe these matters in the auditor's report, unless laws or other statutory provisions prohibit a public disclosure of such information.

Other statutory and regulatory requirements

Assurance report on the electronic reproductions of the consolidated financial statements and the combined management report prepared for the purpose of disclosure in accordance with Section 317 (3a) German Commercial Code (HGB)

Assurance conclusion

We have performed an assurance engagement in accordance with Section 317 (3a) German Commercial Code (HGB) to obtain reasonable assurance about whether the electronic reproduction of the consolidated financial statements and the combined management report (hereinafter the "ESEF documents") contained in the file provided Einhell_Germany_AG_KAuKLB_ESEF_2021-12-31.zip (SHA256 hash value: c70bb3b8f6f9a1ce6c63d2b435db2ce7d6001f8a03a044ce406dbc38979dd87a) and prepared for publication purposes complies in all material respects with the requirements of Section 328 (1) German Commercial Code (HGB) for the electronic reporting format ("ESEF format").

In accordance with German legal requirements, this assurance engagement only extends to the conversion of the information contained in the consolidated financial statements and the combined management report into the ESEF format and therefore relates neither to the information contained in this reproduction nor any other information contained in the above-mentioned electronic file.

In our opinion, the reproduction of the consolidated financial statements and the combined management report contained in the above-mentioned electronic file and prepared for publication purposes complies in all material respects with the requirements of Section 328 (1) German Commercial Code (HGB) for the electronic reporting format. We do not express any opinion on the information contained in this reproduction nor on any other information contained in the above-mentioned file beyond this reasonable assurance conclusion and our audit opinion on the accompanying consolidated financial statements and the accompanying combined management report for the financial year from 1 January to 31 December 2021 contained in the "Report on the audit of the consolidated financial statements and of the combined management report" above.

Basis for the assurance opinion

We conducted our assessment of the reproduction of the consolidated financial statements and the combined management report contained in the above-mentioned electronic file in accordance with Section 317 (3a) German Commercial Code (HGB) and the IDW Assurance Standard: Assurance in accordance with Section 317 (3a) German Commercial Code (HGB) on the Electronic Reproduction of Financial Statements and Management Reports Prepared for Publication Purposes (ED IDW AsS 410 (10.2021)). Our responsibility in accordance with this standard is further described in the section "Auditor's responsibility for the audit of the ESEF documents". Our audit firm has applied the IDW Standard on Quality Management 1: Requirements for Quality Management in Audit Firms (IDW QS 1).

Responsibility of the legal representatives and the Supervisory Board for the ESEF documents

The legal representatives of the company are responsible for the preparation of the ESEF documents including the electronic reproduction of the consolidated financial statements and the combined management report in accordance with Section 328 (1) sentence 4 item 1 German Commercial Code (HGB) and for the markup of the consolidated financial statements in accordance with Section 328 (1) sentence 4 item 2 German Commercial Code (HGB).

In addition, the legal representatives of the company are responsible for the internal controls they consider necessary to enable the preparation of ESEF documents that are free from material non-compliance with the requirements of Section 328 (1) German Commercial Code (HGB) for the electronic reporting format, whether due to fraud or error.

The Supervisory Board is responsible for overseeing the preparation process of the ESEF documents as part of the financial reporting process.

Auditor's responsibility for the assessment of the ESEF documents

Our objective is to obtain reasonable assurance about whether the ESEF documents are free from material non-compliance with the requirements of Section 328 (1) German Commercial Code (HGB), whether due to fraud or error. During our audit we exercise professional judgement and due scepticism. Moreover,

we identify and assess the risks of material non-compliance with the requirements of Section 328 (1) German Commercial Code (HGB), whether due to fraud or error, design and perform assurance procedures responsive to those risks, and obtain assurance evidence that is sufficient and appropriate to form the basis for our assurance conclusion.
we obtain an understanding of the internal control system relevant to the assessment of the ESEF documents in order to design assurance procedures that are appropriate in the circumstances, but not for the purpose of expressing a conclusion on the effectiveness of these controls.
we evaluate the technical validity of the ESEF documents, i.e. we check whether the electronic file provided containing the ESEF documents meets the requirements of Commission Delegated Regulation (EU) 2019/815 on the technical specification for this electronic file applicable on the reporting date.
we evaluate whether the ESEF documents enable an XHTML reproduction with content equivalent to the audited consolidated financial statements and the audited combined management report.
we evaluate whether the markup of the ESEF documents with Inline XBRL technology (iXBRL) in accordance with Articles 4 and 6 of the Delegated Regulation (EU) 2019/815 as amended on the reporting date provides an appropriate and complete machine-readable XBRL copy of the XHTML reproduction.

Other matters – use of the auditor's report

Our audit report should always be read in conjunction with the audited consolidated financial statements and the audited combined management report as well as the audited ESEF documents. The consolidated financial statements and combined management report converted into ESEF format, including the versions to be published in the "Bundesanzeiger" (German Federal Gazette), are merely electronic reproductions of the audited consolidated financial statements and the audited combined management report, and do not replace them. The ESEF note and our audit opinion contained therein

in particular may only be used in conjunction with the audited ESEF documentation provided in electronic form.

Responsible statutory auditor

The statutory auditor responsible for the audit is Stefan Welsch.

Nuremberg, 31 March 2022

Rödl & Partner GmbH
Wirtschaftsprüfungsgesellschaft
Steuerberatungsgesellschaft

Landgraf
Auditor
(Wirtschaftsprüfer)

Welsch
Auditor
(Wirtschaftsprüfer)

Einhell

Einhell Germany AG
Wiesenweg 22
D-94405 Landau a. d. Isar
Germany
Phone +49 (0) 9951 942-0
Fax +49 (0) 9951 1702
[email protected]
www.einhell.com

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Einhell Germany AG — Annual Report 2021

134_10-k_2022-04-25_2063db9d-cb58-4c22-b28f-542030cbdc5d.pdf

FINANCIAL REPORT

1. PREAMBLE

2. BUSINESS ACTIVITIES, STRUCTURE, MANAGEMENT AND GOALS OF THE EINHELL GROUP

2.1 General operations and business segments

2.2 Legal structure and management of the Group

a) Legal structure and changes to Group structure

b) Management and control

a) Strategy

b) Management system

2.4 Product processing and quality management

a) Product processing

b) Quality management

2.5 Personnel and HR services

3. ECONOMIC REPORT

3.1 General economic conditions

a) D/A/CH

b) Western and Eastern Europe

WESTERN EUROPE

EASTERN EUROPE

c) Overseas

3.2 Performance report

Einhell Group increases revenue

REVENUE DEVELOPMENT BY REGION

REVENUE DEVELOPMENT BY SEGMENT

4. EARNINGS

5. ASSETS AND FINANCIAL POSITION

Assets and financial position

Investments and non-current assets

Current assets

Financing

Liquidity

Equity/debt capital

6. OVERALL ECONOMIC SITUATION

7. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Non-financial group statement

8. OPPORTUNITIES AND RISKS REPORT

8.1 Description of the risk management and significant characteristics of the internal monitoring and risk management system for Group accounting processes as per Section 315 (4) German Commercial Code (HGB)

a) Description of risk management process

b) Elements of the internal control and risk management system

8.2 Description of risks

Effects on earnings:

Incidence rate:

Effects on earnings:

Incidence rate:

Sales market risks

Procurement risks

Liability risks, legal risks

Human resource risks

Financial, interest and currency risks

Default risk

Liquidity risk

Tax risks

General economic and sector risks

Political risks

Sector risks

Strategic and expansion risks

Specific Group accounting risks

Other risks

9. FORECAST

9.1 Expected development in the D/A/CH region

9.2 Expected development in the Western and Eastern Europe region

9.3 Expected development in the Overseas region

9.4 Expected performance in the Other countries region

9.5 Expected performance in the markets relevant to the Einhell Group

a) Expected general development in 2022

b) Expected development of the financial markets

c) Expected development of the sales markets

d) Expected development of the procurement markets

e) Expected development of the Einhell Group

f) Expected investments

g) Expected financial situation

9.6 Summary of expected developments

Outlook for financial year 2022

9.7 Forward-looking statements, assumptions, uncertainties and assessment methods

10. BUSINESS DEVELOPMENT OF EINHELL GERMANY AG

Earnings

Revenue above prior-year level

Einhell Germany AG Annual Report 2021