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ElringKlinger AG Interim / Quarterly Report 2024
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Interim / Quarterly Report
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REPORT ON THE $2^{\text {ND }}$ QUARTER AND 1 ST HALF
Key figures
ElringKlinger Group
| Order Situation | 2nd quarter 2024 |
1st quarter 2024 |
4th quarter 2023 |
3rd quarter 2023 |
2nd quarter 2023 |
|
|---|---|---|---|---|---|---|
| Order intake | EUR million | 364.9 | 489.4 | 465.0 | 376.8 | 373.8 |
| Order backlog | EUR million | 1,249.3 | 1,329.3 | 1,305.2 | 1,279.3 | 1,354.1 |
| Sales/Earnings | ||||||
| Sales revenue | EUR million | 445.0 | 465.3 | 439.0 | 451.6 | 468.7 |
| Cost of sales | EUR million | 335.5 | 354.7 | 344.2 | 355.2 | 368.7 |
| Gross profit margin | 24.6\% | 23.8\% | 21.6\% | 21.3\% | 21.3\% | |
| EBITDA | EUR million | 49.7 | 50.8 | 52.3 | 47.7 | 46.8 |
| EBIT | EUR million | 22.4 | 23.8 | 18.8 | 21.4 | 16.7 |
| EBIT adjusted ${ }^{1}$ | EUR million | 22.5 | 24.0 | 26.3 | 22.7 | 24.8 |
| EBIT margin adjusted | 5.0\% | 5.2\% | 6.0\% | 5.0\% | 5.3\% | |
| Earnings before taxes | EUR million | 15.9 | 17.9 | 8.3 | 16.9 | 11.4 |
| Net income | EUR million | 9.5 | 9.8 | 24.9 | 4.7 | $-0.5$ |
| Net income attributable to shareholders of ElringKlinger AG | EUR million | 9.8 | 13.3 | 22.5 | 7.8 | 2.4 |
| Cash flow | ||||||
| Net cash from operating activities | EUR million | 23.2 | 16.8 | 70.1 | 36.2 | 26.8 |
| Net cash from investing activities | EUR million | $-40.8$ | $-22.2$ | $-23.0$ | $-22.6$ | $-25.8$ |
| Net cash from financing activities | EUR million | $-37.6$ | 30.4 | $-52.2$ | $-3.8$ | 11.5 |
| Operating free cash flow ${ }^{2}$ | EUR million | $-4.5$ | $-5.8$ | 41.6 | 11.7 | 3.7 |
| Balance Sheet | ||||||
| Balance sheet total | EUR million | 2,007.5 | 2,060.5 | 2,008.2 | 2,025.0 | 2,041.0 |
| Equity | EUR million | 905.8 | 917.3 | 910.7 | 884.7 | 886.0 |
| Equity ratio | 45.1\% | 44.5\% | 45.3\% | 43.7\% | 43.4\% | |
| Net financial debt ${ }^{3}$ | EUR million | 350.4 | 329.1 | 323.2 | 366.3 | 380.1 |
| Net debt-to-EBITDA ratio ${ }^{4}$ | 1.7 | 1.7 | 1.6 | 1.8 | 1.9 | |
| Human Resources | ||||||
| Employees (as at end of quarter) | 9,560 | 9,606 | 9,576 | 9,625 | 9,607 | |
| Stock | ||||||
| Earnings per share | EUR | 0.15 | 0.21 | 0.36 | 0.12 | 0.04 |
${ }^{1}$ For definition see Annual Report 2023, section internal control system
${ }^{2}$ Net cash from operating activities and net cash from investing activities (excluding cash flows for M&A activities and for changes in financial assets)
${ }^{3}$ Current and non-current financial liabilities less cash and cash equivalents and less short-term securities
${ }^{4}$ Net debt/EBITDA
Summary of Q2 and H1 2024
- Group revenue of ElringKlinger in Q2 and H1 2024 at EUR 445.0 million and EUR 910.2 million respectively - a decline of $3.8 \%{ }^{1}$ on the strong prior-year figures when adjusted for currency effects; performance influenced by lackluster market environment (global automotive production down $0.2 \%$ ) and changes in customer call-off volumes for individual series production projects in the passenger car and commercial vehicle sectors; Group outperforms market as a whole in Europe, the region generating the highest revenue; ramp-up in the E-Mobility business unit;
- Adjusted EBIT in Q2 and H1 2024 at EUR 22.5 million and EUR 46.5 million respectively; adjusted EBIT margin on target at $5.0 \%$ and $5.1 \%$ respectively; this is underpinned in part by lower commodity prices and a reduction in material and administrative costs compared to the previous year; earnings per share up significantly at EUR 0.37 in the first half of the year;
- Financial position and cash flows of the ElringKlinger Group remain solid; equity ratio rises to $45.1 \%$; net financial liabilities of EUR 350.4 million down year on year; net debt-to-EBITDA ratio improved at 1.7; operating free cash flow in Q2 and H1 2024 at EUR - 4.5 million and EUR - 10.3 million respectively; investment ratio up as expected in H1 2024, rising to $4.3 \%$ as part of the portfolio transformation;
- Outlook: Order backlog of EUR 1,249.3 million at the end of the period under review, in H1 slight improvement in order intake; nomination volume in the E-Mobility business unit points to growth trajectory for the coming years; ElringKlinger Group guidance for 2024 financial year confirmed: slight organic revenue growth; adjusted EBIT margin of around 5\%;
- Other events in H1 2024: ElringKlinger presents SHAPE30 transformation strategy; go-ahead for new Battery Center in the United States; Helmut P. Merch new Chairman of the Supervisory Board since May 16, 2024; Annual General Meeting 2024 approves unchanged dividend payment of EUR 0.15 per share;
"Overall, ElringKlinger can look back on a respectable first half of 2024 in what remains a challenging environment. Despite the slight decline in revenue, we are on track in respect of profitability and also saw improvements in other key financial metrics, such as operating cash flow. At the same time, we are pursuing a clearly charted roadmap in the form of our SHAPE30 strategy, which will guide the Group through its transformation by focusing on the five factors for success."
Thomas Jessulat, CEO of ElringKlinger AG
[^0]
[^0]: ${ }^{1}$ Unless otherwise specified, changes refer to the same period of the previous year.
2023 marked the start of series production of cell contacting systems in Neuffen. The e-mobility site plays a pivotal role in ElringKlinger's Group strategy.
Find out more about our efforts in the field of battery technology: »Components of the future « in the 2024 issue of »pulse « magazine offers all the insights.
Contents
INTERIM GROUP MANAGEMENT REPORT
06 Macroeconomic Conditions and Business Environment
07 Significant Events
08 Sales and Earnings Performance
14 Financial Position and Cash Flows
18 Opportunities and Risks
19 Report on Expected Developments
INTERIM CONSOLIDATED
FINANCIAL STATEMENTS
24 Group Income Statement
25 Group Statement of Comprehensive Income
26 Group Statement of Financial Position
28 Group Statement of Changes in Equity
30 Group Statement of Cash Flows
31 Group Sales Revenue
32 Segment Reporting
34 Notes
41 Responsibility Statement
Macroeconomic Conditions and Business Environment
Global economic output showed signs of moderate expansion in the first half of 2024, remaining remarkably stable despite prevailing geopolitical uncertainties, according to economists. ${ }^{1}$ The differences in economic momentum, particularly among the advanced nations, became less pronounced. The US economy lost some of its drive compared to the previous year, partly due to the slowdown in private consumption within the domestic market, while the European economy emerged from stagnation and trended slightly upwards in the year to date. The Chinese economy expanded at a slower pace, having been impacted by persistent structural problems, such as the real estate crisis and the high level of corporate debt.
In June 2024, the European Central Bank lowered its benchmark interest rate slightly by $0.25 \%$ to $4.25 \%$ for the first time since the start of its restrictive approach adopted in 2022. However, it has so far been reluctant to loosen it any further. In the wake of stubborn price rises within the services sector, in particular, efforts to drive down inflation stalled over the course of the first half of 2024, making it more difficult to return monetary policy to a more normal course or cut interest rates. The upper limit of the key interest rate corridor set by the US Federal Reserve also remained high at $5.5 \%$ as of the end of the first half of 2024, meaning that demand for consumer and capital goods is expected to be subdued in both the US and the eurozone due to restrictive financing terms. In the second quarter of 2024, the level of inflation in the eurozone, at $2.5 \%$, and in the United States, at $3.3 \%$, continued to fall short of the central bank targets of $2 \%$ for both economies. Overall, however, it was evident that the majority of central banks overseeing the world's economies have adopted a stance that suggests interest rate cuts.
In addition to prevailing geopolitical conflicts such as the ongoing war in Ukraine and the conflict in the Middle East, trade disputes between the USA, China, and the European Union are a source of tension. Trade policies with regard to the automotive sector became more hawkish in the second quarter of 2024. In June, for example, the EU Commission announced tariffs on e-cars from China in an effort to
counteract what it sees as competition-distorting subsidies granted by the Chinese government. These tariffs were put into force provisionally at the beginning of July. The United States also announced a hike in tariffs for electric cars from China with effect from the third quarter of 2024.
GDP growth
| Year-on-year change in \% | $4^{\text {th }}$ quarter $\mathbf{2 0 2 3}$ |
$1^{\text {st }}$ quarter $\mathbf{2 0 2 4}$ |
$2^{\text {nd }}$ quarter $\mathbf{2 0 2 4}$ |
|---|---|---|---|
| Germany | -0.2 | -0.2 | -0.1 |
| Eurozone | 0.2 | 0.4 | 0.4 |
| USA | 3.1 | 2.9 | 2.8 |
| Brazil | 2.1 | 2.5 | 2.1 |
| China | 5.2 | 5.3 | 6.0 |
| India | 8.6 | 7.8 | 7.2 |
| Japan | 1.1 | -0.1 | -0.6 |
Source: HSBC (June 2024)
Spluttering global vehicle production
Following the gains made last year, vehicle production has increasingly slackened over the course of the year to date. Having overcome supply-side bottlenecks in 2023 and replenished stocks, manufacturers were able to meet demand for new vehicles at shorter notice again this year. According to industry data provider S\&P Global Mobility, 43.7 million light vehicles (passenger cars and light commercial vehicles) were produced worldwide in the first half of 2024, which falls just short of zero percent change compared to the previous year. While global production growth stood at $0.1 \%$ in the first quarter of 2024 compared to the same period of the previous year, the second quarter of 2024 closed with a decline of $0.5 \%$. The direction taken by the individual regions varied, as shown in the table.
[^0]
[^0]: ${ }^{1}$ Sources in this section include data from the International Monetary Fund, the Kiel Institute for the World Economy (IfW), HSBC Bank, and own research.
| Vehicles millions | |||
|---|---|---|---|
| Region | $\mathbf{1}^{\text {st }}$ half 2023 | $1^{\text {st }}$ half 2024 | Year-on-year change |
| Europe ${ }^{1}$ | 9.1 | 8.7 | $-4.6 \%$ |
| China | 12.7 | 13.3 | $5.1 \%$ |
| Japan/Korea | 6.3 | 5.9 | $-7.0 \%$ |
| Middle East/Africa | 1.1 | 1.1 | $4.3 \%$ |
| North America | 8.0 | 8.1 | $1.8 \%$ |
| South America | 1.4 | 1.3 | $-8.0 \%$ |
| South Asia | 4.8 | 4.8 | $-0.8 \%$ |
| World | $\mathbf{4 3 . 7}$ | $\mathbf{4 3 . 6}$ | $\mathbf{- 0 . 2 \%}$ |
${ }^{1}$ excl. Russland
Source: S&P Global Mobility, July 2024
More uniform momentum in international sales markets International sales markets, on the other hand, showed signs of positive growth almost across the board in the first half of 2024, as reflected in data presented by the German association of the automotive industry VDA. With the exception of Japan, sales figures picked up in all major markets and regions, although in some cases - such as the USA and the EU - they still fell short of those recorded in 2019.
In Europe (EU, EFTA, and UK), new car registrations increased by $4.4 \%$ year on year to 6.9 million vehicles in the first six months of 2024. The five largest individual markets were similar in their performance, recording the following growth rates: the United Kingdom and Spain each grew by
around $6 \%$, Germany and Italy by $5 \%$ each, and France by $3 \%$. The electric vehicle segment grew at a slower rate than the overall market. The USA registered 7.8 million new light vehicles in the reporting period, up $2 \%$ on the figure for the same period in the previous year. In June, hacker attacks on dealership IT systems acted as a brake on more vigorous growth. In China, meanwhile, 9.9 million new passenger cars were registered in the first half of 2024, around $3 \%$ more than in the same period of the previous year, although sales recently slowed as a result of sluggish consumer spending. While Japan's market for passenger cars is in recession and recorded a year-on-year decline of $12.1 \%$, India continued on an extremely positive trajectory with growth of $7.3 \%$.
Significant Events
Helmut P. Merch appointed as new Chairman of the Supervisory Board of ElringKlinger AG
The anticipated change in the position of Chairman of the Supervisory Board was confirmed subsequent to the Annual General Meeting on May 16, 2024. Klaus Eberhardt was succeeded by Helmut P. Merch, who had previously chaired the Audit Committee. In March 2024, Eberhardt had announced his intention to step down from his position and relinquish his mandate at the end of the Annual General Meeting and pass on the chairmanship to younger hands. Eberhardt had been a member of the Supervisory Board since 2013 and had assumed
the role of Chairman in May 2017. At the constituent meeting of the Supervisory Board held subsequent to the Annual General Meeting 2024, Helmut P. Merch was elected as the new Chairman of the Supervisory Board. Merch has been a member of the Supervisory Board of ElringKlinger AG since July 2020.
As proposed by the Supervisory Board, the Annual General Meeting on May 16, 2024, elected Ludger Heuberg as a new member of the Supervisory Board. Heuberg has held the position of CFO for several large companies and can draw on many years of experience in the automotive sector.
Nomination volume up in E-Mobility business unit
ElringKlinger saw a further increase in the number of nominations received for e-mobility applications over the course of the first half of 2024. For example, ElringKlinger subsidiary EKPO Fuel Cell Technologies GmbH (EKPO for short) signed a contract with the Chinese FAW Group for the development and supply of NM12 Single fuel cell modules. The stacks are used in the fuel cell vehicle of FAW's premium Hongqi marque. EKPO has been represented in China since 2022 with a site for the development and production of fuel cell technology.
Start for battery center in the United States
In June 2024, ElringKlinger has started with the establishment of its new battery center in the US. The Group company ElringKlinger South Carolina, LLC. founded for this purpose at the site in Easley, South Carolina, represents the next step in the implementation of the Group's SHAPE30 transformation strategy. Its focus will be on the manufacture of battery technology products from 2025 onward. ElringKlinger has already secured its first high-volume series production nomination. The plan is to develop the site into a battery hub for the American market.
Sales and Earnings Performance
Year-on-year decline in Group revenue amid challenging market conditions
Following a record second-quarter performance in the previous year, the Group generated revenue of EUR 445.0 million in the second quarter of 2024 (Q2 2023: EUR 468.7 million), down EUR 23.7 million or $5.1 \%$. Alongside the effects of foreign exchange rates, changes in customer call-off volumes relating to individual series production projects for e-vehicles and in the commercial vehicle sector had a dampening effect on revenue. In the first half of the year, revenue amounted to EUR 910.2 million (H1 2023: EUR 956.4 million), a decrease of EUR 46.2 million or $4.8 \%$.
This performance reflects the weaker market environment compared to the previous year. According to data prepared by industry data service provider S\&P Global Mobility, global automobile production from April to June 2024 fell by $0.5 \%$ compared to the same quarter of the previous year, and by as much as $6.1 \%$ in Europe, ElringKlinger's strongest market in terms of revenue. In the first six months of 2024, the volume of light vehicles produced worldwide was $0.2 \%$ lower than in the first half of 2023, and 3.5\% lower in Europe.
Group revenue was also affected by the direction taken by exchange rates. The movement of the Mexican peso provided a slight tailwind for revenue in the second quarter of 2024, while changes in the Turkish lira, the Japanese yen, and the Brazilian real had the opposite effect. Adjusted for currency
effects, revenue amounted to EUR 919.7 million in the first half of 2024, down $3.8 \%$ on the same period of the previous year, and EUR 450.7 million in the second quarter, also $3.8 \%$ less than in the previous year. There were no effects from changes in the scope of consolidation (M\&A activities) in either the quarter under review or in the first half of 2024 as a whole.
Factors influencing Group revenue in $1^{\text {st }}$ half 2024 in EUR million
Challenging market environment in the key automotive regions
In its strongest revenue-generating region, Rest of Europe, the ElringKlinger Group recorded sales revenue of EUR 139.9 million in the second quarter of 2024 (Q2 2023: EUR 145.8 million), which corresponds to a share of $31.4 \%$ of Group revenue and a year-on-year decline of $4.0 \%$. Adjusted for currency effects, revenue generated in this region fell by just $1.6 \%$, which was significantly better than the direction taken by car production in Europe, which contracted by $6.1 \%$ in the second quarter (Europe excluding Germany and Russia: -7.8\%). In the first half of 2024, the Group recorded revenue of EUR 293.0 million (H1 2023: EUR 304.9 million) in this sales region. Adjusted for currency effects, revenue in this period amounted to EUR 299.7 million, down $1.7 \%$ on the prior-year figure but well above the market trend in Europe of $-3.5 \%$ (excluding Germany and Russia: $-4.1 \%$ ).
In Germany, revenue increased by EUR 5.3 million or $5.6 \%$ to EUR 100.2 million in the second quarter of 2024 (Q2 2023: EUR 94.9 million), while automotive production in Germany fell by $3.5 \%$ in this period. Revenue from foreign sales as a percentage of Group revenue was slightly lower than in the period from April to June 2023 at 77.5\% (Q2 2023: 79.8\%). In the first half of 2024, $78.6 \%$ (H1 2023: $79.9 \%$ ) of revenue was generated abroad, or $78.9 \%$ when adjusted for currency effects (H1 2023: 79.9\%).
In the Asia-Pacific region, meanwhile, the Group generated revenue of EUR 65.5 million in the second quarter (Q2 2023: EUR 83.9 million), which corresponds to $14.7 \%$ of Group revenue. Thus, the revenue trend seen in the first quarter
continued into the next period. The decline was attributable primarily to a change in customer call-off patterns relating to series production projects for e-mobility applications as well as currency effects. In the first half of 2024, revenue in the Asia-Pacific region amounted to EUR 136.2 million (H1 2023: EUR 165.3 million). In comparative terms, markets in this region moved along divergent lines in the first six months of 2024. While automotive production in China increased noticeably, Japan, Korea, and South Asia recorded significant declines in some cases.
Slight downturn in North America
Following significant growth in the second quarter of the previous year, revenue in the sales region of North America declined slightly in the quarter under review. The region encompassing North America accounted for around a quarter (25.6\%) of Group revenue in the second quarter of 2024, with revenue of EUR 113.8 million (Q2 2023: EUR 119.9 million). This makes North America the Group's second strongest region. In the first half of 2024, revenue amounted to EUR 235.1 million (H1 2023: EUR 247.6 million). Exchange rate effects played a relatively minor role with regard to the revenue trajectory in the region encompassing North America. Automotive production in the region has been relatively lackluster in the year to date. The second quarter of 2024 saw an expansion of $1.7 \%$, while the first six months produced growth of $1.8 \%$.
Growth in South America and Rest of World
Revenue in South America and Rest of World totaled EUR 25.4 million in the quarter under review, i. e., $5.7 \%$ of Group revenue (Q2 2023: EUR 24.3 million or 5.2\%), which corresponds to growth of $4.5 \%$ in the second quarter of 2024. Exchange rate movements acted as a brake on growth. In the
| Original Equipment | 667.8 | $(728.8)$ |
|---|---|---|
| - Lightweighting/Elastomer Technology | 253.5 | $(305.6)$ |
| - Metal Sealing Systems \& | ||
| $\quad$ Drivetrain Components | 247.5 | $(257.5)$ |
| - Metal Forming \& Assembly Technology | 137.8 | $(147.6)$ |
| - E-Mobility | 29.0 | $(17.1)$ |
| - Other ${ }^{1}$ | 0.0 | $(1.1)$ |
| - Aftermarket | 175.2 | $(157.3)$ |
| - Engineered Plastics | 66.3 | $(68.6)$ |
| Other | 1.0 | $(1.7)$ |
${ }^{1}$ Revenue "Other" mainly attributable to Exhaust Gas Purification business unit until 2023
first half of 2024, revenue expanded by as much as $9.8 \%$, or $10.9 \%$ adjusted for currency effects. As a result, revenue in this region took a different path compared to the market as a whole, which contracted by $-4.6 \%$ in the second quarter and $-2.6 \%$ in the first six months of 2024.
Original Equipment: growth for E-Mobility business unit In the second quarter of 2024, the Original Equipment segment recorded a decline in revenue of EUR 31.4 million compared to the same quarter of the previous year. From April to June 2024, the above-mentioned challenges in the Asia-Pacific region and the sluggish momentum of automotive production in Europe (excluding Russia), which S\&P Global Mobility put at $-6.8 \%$, had a dampening effect on segment revenue. Revenue generated in the Original Equipment segment totaled EUR 328.3 million in the second quarter of 2024 (Q2 2023: EUR 359.7 million). Accounting for $73.7 \%$ of Group revenue in the second quarter of 2024, Original Equipment is the Group's largest segment.
Project ramp-ups developed favorably, including in the E-Mobility business unit. E-Mobility revenue increased by EUR 6.8 million or $62.4 \%$ to EUR 17.7 million (Q2 2023: EUR 10.9 million). This expansion was driven by growth in the area of battery technology. By contrast, revenue attributable to what were originally seen as the traditional business units Lightweighting/Elastomer Technology, Metal Forming \& Assembly Technology, and Metal Sealing Systems \& Drivetrain Components declined year on year amid challenging market conditions, as described above. In the first half of 2024, ElringKlinger recorded revenue of EUR 667.8 million (H1 2023: EUR 728.8 million) in the Original Equipment segment. The effects of volume in the Original Equipment
business were also of significance when looking at the first half of the year.
Although the direction taken by segment revenue was also reflected in earnings, effects relating to the product mix and the development of procurement prices for several key raw materials helped to bolster the segment result in a year-onyear comparison. In the second quarter of 2024, adjusted earnings before interest and taxes (adjusted EBIT) for the Original Equipment segment amounted to EUR - 1.3 million (Q2 2023: EUR 3.4 million), with a margin of $-0.4 \%$ (Q2 2023: $0.9 \%)$. In the first six months of 2024, the segment recorded an adjusted EBIT margin of $-0.6 \%$ (H1 2023: $0.6 \%$ ).
Aftermarket business up by 12 percent
In the second quarter of 2024, the Aftermarket segment saw revenue continue to grow compared to the same period of the previous year. With revenue standing at EUR 84.8 million (Q2 2023: EUR 75.6 million) in the months from April to June 2024, the Aftermarket segment accounted for $19.1 \%$ of Group revenue, making it the second largest segment. Revenue increased by EUR 9.2 million or $12.2 \%$ in the second quarter. As in the first three months of 2024, all key sales regions contributed to growth generated in the quarter under review. Revenue in Europe as well as in North and South America showed particularly dynamic growth in the second quarter of 2024. Segment revenue in the first half of the year amounted to EUR 175.2 million (H1 2023: EUR 157.3 million).
On the back of revenue growth, the segment also saw an increase in earnings. Adjusted EBIT amounted to EUR 20.5 million in the quarter under review (Q2 2023:
EUR 19.0 million). This translates into an adjusted EBIT margin of $24.2 \%$ for the second quarter (Q2 2023: 25.1\%). In the first half, the segment achieved adjusted EBIT of EUR 43.2 million (H1 2023: EUR 38.9 million), corresponding to an adjusted EBIT margin of $24.7 \%$ (H1 2023: 24.7\%).
Engineered Plastics segment
The Engineered Plastics segment generated revenue of EUR 31.5 million in the second quarter of 2024 (Q2 2023: EUR 32.7 million), representing $7.1 \%$ of Group revenue. Thanks to its broad industry mix, the segment's revenue remained robust overall despite the lack of economic momentum. In the first half of 2024, revenue in the Engineered Plastics segment amounted to EUR 66.3 million (H1 2023: EUR 68.6 million).
As regards earnings, slightly higher staff costs as part of the segment's transformation contrasted with an improved materials expense ratio due to a slight year-on-year decline in prices for high-performance plastics such as fluoropolymers. Overall, the Engineered Plastics segment's adjusted EBIT improved from EUR 2.5 million in the second quarter of the previous year to EUR 2.7 million from April to June 2024, which corresponds to an adjusted EBIT margin of $8.6 \%$ (Q2 2023: $7.6 \%$ ). In the first half of the year, the adjusted EBIT margin for the Engineered Plastics segment was 9.0\% (H1 2023: $11.1 \%$ ).
Other segment
The segment referred to as "Other" mainly comprises services provided by various subsidiaries. This includes logistics services for the Group's aftermarket business, in addition to catering services provided by a subsidiary. In the second quarter of 2024, segment revenue amounted to EUR 0.4 million (Q2 2023: EUR 0.7 million). In the first six months, revenue declined to EUR 1.0 million (H1 2023: EUR 1.7 million), which is partly due to the discontinuation of business activities in the area of engine testing services. Adjusted segment earnings before interest and taxes improved from EUR - 2.8 million in the second quarter of the previous year to EUR 0.5 million.
Headcount down slightly
The headcount of the ElringKlinger Group stood at 9,560 (Jun. 30, 2023: 9,607) at the end of the quarter under review, which corresponds to a decrease of $0.5 \%$. While the Group expanded its workforce in Germany and North America, the number of employees in the Asia-Pacific and Rest of Europe regions as well as South America and Rest of World decreased. In Germany, upstaffing was centered around the strategic future areas battery and fuel cell technology.
Compared to the same quarter of the previous year, the proportion of employees in Germany rose to $43.2 \%$ (Jun. 30, 2023: $42.4 \%$ ). Accordingly, as a percentage, the non-domestic headcount declined to $56.8 \%$ (Jun. 30, 2023: 57.6\%).
Gross profit margin improved at 24.6\%
While Group revenue decreased by $5.1 \%$ in the quarter under review, the cost of sales fell by EUR 33.2 million or $9.0 \%$ and amounted to EUR 335.5 million (Q2 2023: EUR 368.7 million). The Group's gross profit improved by EUR 9.5 million to EUR 109.5 million in the second quarter (Q2 2023: EUR 100.0 million). This corresponds to a gross profit margin of $24.6 \%$ (Q2 2023: $21.3 \%$ ) in the quarter under review. For the period from January to June 2024, the gross profit margin amounted to $24.2 \%$ (H1 2023: $22.1 \%$ ).
Overall, changes in the procurement prices for several key raw materials required by the Group for its production relative to the months of April to June 2023 proved beneficial. For example, the price of aluminum trended lower compared to the second quarter of the previous year despite a slight increase in exchange prices. Prices for steels and plastic pellets were also lower compared to the previous year. Despite these developments, the overall price level for key raw materials remained noticeably above the pre-crisis level. Prices for certain elastomers were significantly higher than in the previous year. Thus, the cost of materials amounted to EUR 186.1 million in the quarter under review (Q2 2023: EUR 216.5 million), while the cost-of-materials ratio (cost of materials in relation to revenue) fell to $41.8 \%$ (Q2 2023: $46.2 \%$ ). It also fell significantly from $45.1 \%$ in the first six months of 2023 to $42.0 \%$ in the first half of the year.
Staff costs within the Group, which are accounted for in various functional categories of the income statement, totaled EUR 150.9 million in the second quarter of 2024 (Q2 2023: EUR 152.4 million). The slightly lower number of direct and indirect employees and a non-recurring effect from the termination of the CEO's contract in the same period of the previous year helped to drive staff costs down. In total, staff costs fell by $1.0 \%$. As a result, staff costs in relation to revenue amounted to $33.9 \%$ both in the quarter under review (Q2 2023: $32.5 \%$ ) and in the first six months of 2024 (H1 2023: $32.2 \%$ ).
The ElringKlinger Group's selling expenses rose to EUR 39.4 million in the second quarter of 2024 (Q2 2023: EUR 37.9 million) due to a slight increase in staff costs. In the first six months of 2024, selling expenses totaled EUR 77.5 million, compared to EUR 76.3 million in the first half of the year.
EBIT $1^{\text {st }}$ half $2024^{1}$
| in EUR million | $2^{\text {nd }}$ quarter 2024 |
$2^{\text {nd }}$ quarter 2023 |
Year-on-year change |
$1^{\text {st }}$ half 2024 | $1^{\text {st }}$ half 2023 | Year-on-year change |
|---|---|---|---|---|---|---|
| Reported EBIT | 22.4 | 16.7 | 5.7 | 46.2 | 42.8 | 3.4 |
| Impairment losses | 0.0 | 0.5 | 0.0 | 0.5 | ||
| of which goodwill impairment losses | 0.0 | 0.0 | 0.0 | 0.0 | ||
| Restructuring | 0.1 | 2.9 | 0.1 | 3.2 | ||
| Other non-operational effects | 0.0 | 4.7 | 0.2 | 4.7 | ||
| Adjusted EBIT | 22.5 | 24.8 | $-2.3$ | 46.5 | 51.2 | $-4.7$ |
| Adjusted EBIT margin | $5.0 \%$ | $5.3 \%$ | $-0.3 p p$ | $5.1 \%$ | $5.4 \%$ | $-0.3 p p$ |
${ }^{1}$ A detailed definition of adjusted EBIT margin can be found in the "Internal Control System" section of the 2023 annual report.
General and administrative expenses decreased by EUR 1.2 million to EUR 25.2 million in the second quarter of 2024 (Q2 2023: EUR 26.4 million), which is mainly due to the aforementioned one-off effect in the same quarter of the previous year. In the first six months of 2024, general and administrative expenses remained virtually unchanged at EUR 51.8 million (H1 2023: EUR 52.0 million).
R\&D ratio of $6.0 \%$ for the first half of the year
The ElringKlinger Group's research and development (R\&D) activities are focused on alternative drive technologies. In the second quarter of 2024, R\&D expenses amounted to EUR 22.5 million in total (Q2 2023: EUR 19.0 million). The year-on-year increase is partly due to the scheduled expansion of personnel in the strategic future areas. In addition, a total amount of EUR 5.2 million (Q2 2023: EUR 5.8 million) was capitalized in the quarter under review. In the first half of 2024, R\&D expenses totaled EUR 43.5 million (H1 2023: EUR 41.6 million). In addition, a sum of EUR 10.9 million (H1 2023: EUR 10.5 million) was capitalized. This translates into a capitalization ratio of $18.7 \%$ for the second quarter of 2024 (Q2 2023: $23.5 \%$ ) and $20.0 \%$ in the first half of 2024 (H1 2023: $20.2 \%$ ).
As a result, the R\&D ratio (i. e., R\&D expenses, incl. capitalization, in relation to Group revenue) increased to $6.2 \%$ in the second quarter (Q2 2023: $5.3 \%$ ) and $6.0 \%$ in the first half (H1 2024: $5.4 \%$ ) of 2024.
Similar to other operating expenses, which amounted to EUR 3.6 million for the period from April to June 2024 (Q2 2023: EUR 6.3 million), other operating income was down on the prior-year figure and totaled EUR 3.6 million for the period from April to June 2024 (Q2 2023: EUR 6.3 million). This includes government grants of EUR 2.1 million (Q2 2023: EUR 2.1 million). In the first six months of 2024, government grants amounted to EUR 2.7 million (H1 2023: EUR 2.4 million).
Adjusted EBIT margin on track at $5.1 \%$
Despite the decline in revenue in the second quarter of 2024, the ElringKlinger Group generated earnings before interest, taxes, depreciation, and amortization (EBITDA) of EUR 49.7 million (Q2 2023: EUR 46.8 million). Thus, EBITDA for the second quarter of 2024 showed a significant improvement compared to the period from April to June 2023. This was driven by the price trends for materials mentioned above as well as the Group's revenue mix. In the period from January to June 2024, EBITDA remained largely unchanged at EUR 100.5 million (H1 2023: EUR 100.3 million).
After deducting depreciation and amortization, which amounted to EUR 27.3 million in the reporting quarter (Q2 2023: EUR 30.0 million), the Group's reported EBIT stood at EUR 22.4 million (Q2 2023: EUR 16.7 million), which corresponds to a gain of EUR 5.7 million. The same quarter of the previous year had included non-recurring effects totaling EUR 8.1 million, which were due, among other things, to the discontinuation of engine testing services and the termination of the CEO's contract. Taking these one-off items into account, adjusted EBIT amounted to EUR 24.8 million in the same quarter of the previous year.
The Group posted adjusted EBIT of EUR 22.5 million (Q2 2023: EUR 24.8 million) in the quarter under review, resulting in an adjusted EBIT margin of $5.0 \%$ (Q2 2023: $5.3 \%$ ). Compared to the same quarter of the previous year, the lower contribution margins due to the decline in revenue contrasted with lower expenses for certain key raw materials as well as for energy and logistics. In the first half, adjusted EBIT stood at EUR 46.5 million (H1 2023: EUR 51.2 million), while the adjusted EBIT margin amounted to $5.1 \%$ (H1 2023: $5.4 \%$ ).
Lower interest expense, improved net interest result
At EUR - 5.8 million (Q2 2023: EUR -7.3 million), the net interest result for the months from April to June 2024 improved by EUR 1.5 million compared to the second
Net finance cost/income $1^{\text {st }}$ half 2024
| in EUR million | $2^{\text {nd }}$ quarter 2024 |
$2^{\text {nd }}$ quarter 2023 |
Year-on-year change |
$1^{\text {st }}$ half 2024 | $1^{\text {st }}$ half 2023 | Year-on-year change |
|---|---|---|---|---|---|---|
| Net interest result | -5.8 | -7.3 | 1.5 | -10.4 | -12.1 | 1.7 |
| Net foreign exchange result and other net finance result |
-0.7 | 2.0 | -2.7 | -2.0 | -2.6 | 0.6 |
| Net finance cost | -6.5 | $\mathbf{- 5 . 3}$ | $\mathbf{- 1 . 2}$ | -12.4 | $\mathbf{- 1 4 . 7}$ | $\mathbf{2 . 4}$ |
quarter of the previous year. Interest expense amounted to EUR 6.5 million in the second quarter of 2024 (Q2 2023: EUR 7.9 million). While realized interest expenses were roughly on a par with the previous year, the same period of the previous year had included unrealized interest expenses for pensions in the amount of EUR 1.5 million. Interest income remained largely unchanged in the quarter under review. The downturn in foreign exchange gains coincided with lower foreign exchange losses, which led to a net foreign exchange result and other net finance result of EUR -0.7 million (Q2 2023: EUR 2.0 million).
Income from associates, which is included in net finance cost and relates to the interest held in hofer AG, amounted to EUR - 0.8 million (Q2 2023: EUR 0.4 million). At EUR - 6.5 million (Q2 2023: EUR - 5.3 million), net finance cost was down on the prior-year figure in the second quarter of 2024.
In the first six months of 2024, the net finance result of EUR - 12.4 million (H1 2023: EUR - 14.7 million) was better than in the same period of the previous year - mainly due to lower interest expenses and a stronger net result from associates than in the first half of 2023.
Taking net finance cost into account, ElringKlinger recorded a noticeable increase in earnings before taxes to EUR 15.9 million in the second quarter of 2024 (Q2 2023: EUR 11.4 million). Earnings before taxes amounted to EUR 33.8 million in the first half of 2024 (H1 2023: EUR 28.0 million).
Reduction in income tax expense
Income tax expense for the period from April to June 2024 fell by EUR 5.4 million to EUR 6.5 million (Q2 2023: EUR 11.9 million) compared to the second quarter of the previous year, mainly as a result of effects from the change in the transfer pricing system. This produces an effective tax rate - i. e., income tax expenses in relation to earnings before income taxes - of $40.5 \%$ (Q2 2023: 104.1\%) in the reporting quarter and $42.9 \%$ (H1 2023: $86.1 \%$ ) in the first half of 2024.
Significant increase in earnings per share
Having deducted income tax expenses, net income for the ElringKlinger Group stood at EUR 9.5 million in the second quarter of 2024 (Q2 2023: EUR - 0.4 million). Taking into account the share of net income attributable to non-controlling interests, net income attributable to the shareholders of ElringKlinger AG amounted to EUR 9.8 million (Q2 2023: EUR 2.4 million). In the first half of 2024, net income for the period amounted to EUR 19.3 million and EUR 23.2 million for ElringKlinger shareholders (H1 2023: EUR 3.9 million and EUR 9.0 million respectively).
As a result, earnings per share in the first six months of 2024, at EUR 0.37, and in the second quarter of 2024, at EUR 0.15, were also well in excess of the previous year's figures of EUR 0.14 and EUR 0.04 respectively. As of June 30, 2024, the number of shares outstanding that were entitled to a dividend remained unchanged at 63,359,990.
Financial Position and Cash Flows
The financial position and cash flows of the ElringKlinger Group can still be described as solid at the end of the first half of 2024. With the equity ratio standing at $45.1 \%$ of the balance sheet total, a large proportion of assets continues to be financed by the Group's own funds. Net financial liabilities amounted to EUR 350.4 million at the end of the reporting period and were therefore around EUR 30 million lower than
at the end of the first half of 2023. The Group generated net cash from operating activities of EUR 39.9 million in the first six months of 2024. This largely covered the payments made in connection with investing activities. On this basis, operating free cash flow ${ }^{2}$ in the first half of the year amounted to EUR - 10.3 million.
Key figures Financial Position and Cash Flows
in EUR million
| Total equity and liabilities | 2,007.5 | 2,060.5 | 2,008.2 | 2,041.0 |
|---|---|---|---|---|
| Equity ratio | $45.1 \%$ | $44.5 \%$ | $45.3 \%$ | $43.4 \%$ |
| Net working capital ${ }^{1}$ | 482.4 | 489.3 | 466.3 | 529.0 |
| in relation to Group revenue | $26.8 \%$ | $26.8 \%$ | $25.2 \%$ | $28.0 \%$ |
| Net financial debt ${ }^{2}$ | 350.4 | 329.1 | 323.2 | 380.1 |
| Net debt-to-EBITDA ratio ${ }^{3}$ | 1.7 | 1.7 | 1.6 | 1.9 |
| ROCE $^{4}$ | $6.2 \%$ | $6.4 \%$ | $5.6 \%$ | $5.6 \%$ |
| 2nd quarter 2024 | 2nd quarter 2023 | $1^{\text {st }}$ half 2024 | $1^{\text {st }}$ half 2023 | |
|---|---|---|---|---|
| Net cash from operating activities | 23.2 | 26.8 | 39.9 | 23.3 |
| Operating free cash flow ${ }^{5}$ | $-4.5$ | 3.7 | $-10.3$ | $-16.5$ |
| Investments in property, plant, and equipment (payments) | 22.7 | 17.4 | 39.6 | 29.7 |
| Investment ratio | $5.1 \%$ | $3.7 \%$ | $4.3 \%$ | $3.1 \%$ |
${ }^{1}$ Inventories as well as trade receivables less trade payables
${ }^{2}$ Current and non-current financial liabilities less cash and short-term securities
${ }^{3}$ Net financial liabilities/EBITDA
${ }^{4}$ Return on capital employed; ROCE adjusted (calculation based on EBIT adjusted): Jun. 30, 2024: 6.3\%, Mar. 31, 2024: 6.4\%, Dec. 31, 2023: 6.8\%, Jun. 30, 2023: 6.7\%
${ }^{5}$ Cash flow from operating activities and cash flow from investing activities, excluding cash flows for M\&A activities and for financial assets
Total assets stand at two billion euros
At EUR 2,007.5 million as of June 30, 2024 (Dec. 31, 2023: EUR 2,008.2 million), the ElringKlinger Group's total assets were on a par with the figure posted at the beginning of the year. Compared to the previous quarter, total assets were down by EUR 53.0 million or $2.6 \%$ and compared to the previous year by EUR 33.5 million or $1.6 \%$, which in both cases is attributable to lower carrying amounts in the category of current assets. Currency effects at the end of the first half of the year proved slightly dilutive for many balance sheet items, particularly compared to the end of the previous quarter.
Non-current assets had a total carrying amount of EUR 1,095.9 million as of June 30, 2024 (Dec. 31, 2023: EUR 1,092.4 million). Their share of total assets corresponded to $54.6 \%$ (Dec. 31, 2023: $54.4 \%$ ). In this context, property, plant, and equipment constituted the largest item at EUR 856.2 million (Dec. 31, 2023: EUR 858.0 million). At EUR 53.2 million, additions from investments in property, plant, and equipment (including additions from leases) were slightly higher than depreciation and amortization (including write-ups) of EUR 51.2 million in the same period. Currency effects from reporting date valuations resulted in a slight overall decline in the carrying amount of property, plant, and
[^0]
[^0]: ${ }^{2}$ Cash flow from operating activities less cash flow from investing activities (adjusted for M\&A activities and cash flows for financial assets)
equipment compared to the end of the previous year and also compared to the total of EUR 859.9 million at the end of the previous quarter. The decline in property, plant, and equipment by EUR 19.1 million compared to the 2023 half-year reporting date (EUR 875.3 million) is due, among other things, to the discontinuation of engine testing services and the associated disposal of assets in 2023.
Compared to the 2023 year-end figure, intangible assets were up slightly at EUR 173.9 million as of June 30, 2024 (Dec. 31, 2023: EUR 168.2 million). This increase was driven primarily by additions associated with internally generated development costs, which, along with (acquired) goodwill, constitute a major component of this balance sheet item.
There were no significant changes in the other items of non-current assets compared to the end of the reporting periods of the previous quarter or year-end 2023.
Net working capital down year on year
Current assets recognized by the ElringKlinger Group were down on the comparative figures for the previous quarter, the end of the year, and the first half of the previous year; their carrying amount as of June 30, 2024, was EUR 911.7 million (Dec. 31, 2023: EUR 915.9 million). Their share of total assets corresponded to $45.4 \%$ (Dec. 31, 2023: $45.6 \%$ ). Compared to the end of the first quarter of 2024 (EUR 968.1 million), current assets fell by EUR 56.5 million.
Working capital, which is made up of inventories and trade receivables, accounts for a significant proportion of current assets. Although it increased slightly compared to the end of the year to EUR 706.6 million (Dec. 31, 2023: EUR 683.2 million), it was scaled back by EUR 17.7 million and EUR 26.3 million compared to the previous quarter and the preceding twelve months respectively. At EUR 247.5 million (Dec. 31, 2023: EUR 246.9 million), trade receivables were almost at the same level as at the end of 2023. Inventories increased slightly by EUR 22.8 million to EUR 459.1 million at the end of the first half of the year (Dec. 31, 2023: EUR 436.3 million). The change in inventories was attributable to a multitude of developments, including, for example, a ramp-up in the prototype production of battery components in the E-Mobility business unit or the temporary increase in inventories of customer-specific tools, which are held in stock in advance of series production ramp-ups until they are sold to the respective customer. In addition, measures aimed at relocating specific production activities at Group level also led to temporary increases in inventories, the objective being to ensure that call-off volumes requested by customers as part
of their ongoing scheduling arrangements could be processed smoothly at any time.
Working capital less trade represents net working capital and amounted to EUR 224.3 million at the end of the first half (Dec. 31, 2023: EUR 216.9 million), and to EUR 482.4 million as of June 30, 2024 (Dec. 31, 2023: EUR 466.3 million) respectively. Net working capital decreased by EUR 6.9 million and EUR 16.1 million compared to the previous quarter and the 2023 year-end figure respectively; it was down even more substantially compared to the end of the first half of the previous year, by as much as EUR 46.6 million. Group management endeavors to limit the amount of capital tied up in net working capital as much as possible, while at the same time maintaining the inventories necessary for effective operations.
For the first half of 2024, the ratio of net working capital to revenue amounted to $26.8 \%$ (Dec. 31, 2023: $25.2 \%$ ), which was on a par with the ratio recorded at the end of the previous quarter. Compared to the end of the first half of 2023 (28.0\%), it was scaled back by 1.2 percentage points.
As of June 30, 2024, the ElringKlinger Group had cash and cash equivalents of EUR 80.9 million (Dec. 31, 2023: EUR 113.7 million).
Equity ratio up slightly at $45 \%$
At 45.1\% (Dec. 31, 2023: 45.3\%), the ElringKlinger Group's equity continued to represent a large proportion of total equity and liabilities at the end of the first half of 2024. Thus, the ratio was slightly higher than at the end of the first half of 2023 ( $43.4 \%$ ) and remains within the management's target range of $40 \%$ to $50 \%$.
Overall, Group equity amounted to EUR 905.8 million at the end of the period under review, compared to EUR 910.7 million at the end of the 2023 financial year. It amounted to EUR 886.0 million as of June 30, 2023. In the first half of 2024, it was up as a result of net income for the period of EUR 19.3 million and a capital allocation of EUR 4.0 million from the co-owner of the Group subsidiary EKPO Fuel Cell Technologies GmbH, Dettingen/Erms, Germany (EKPO for short). By contrast, differences from the currency translation of separate financial statements, which are recognized in total comprehensive income, led to a dilution of equity of EUR - 17.3 million. In addition, the second quarter of 2024 saw ElringKlinger distribute the dividend for the 2023 financial year to shareholders of ElringKlinger AG; the proposed and approved dividend amounted to 15 cents per share.
Including distributions to non-controlling interests, the dividend payout amounted to EUR 10.9 million in total.
At EUR 102.7 million at the end of the first half of 2024 (Dec. 31, 2023: EUR 104.0 million), the Group's pension provisions were almost on a par with the carrying amount posted at the end of the 2023 financial year.
In addition, non-current and current provisions totaled EUR 78.0 million (Dec. 31, 2023: EUR 74.7 million) at the end of the reporting period. Non-current provisions remained largely unchanged compared to the end of the previous quarter at EUR 28.0 million and mainly comprised person-nel-related obligations, for example for partial retirement, long-service awards, and similar future benefits. At EUR 50.0 million as of June 30, 2024, (Dec. 31, 2023: EUR 50.9 million), current provisions were also at a similar level to the figure posted at the end of 2023. The provisions for contingent losses included in this item were slightly higher due to allocations in the first quarter of 2024, which were subsequently scaled back again in the second quarter. Compared to the comparative reporting date of June 30, 2023, non-current and current provisions decreased by a net amount of EUR 8.7 million - partly due to a provision utilized in 2023 in connection with the discontinuation of specific production activities in Germany.
Year-on-year reduction in net financial liabilities
The ElringKlinger Group's net financial liabilities ${ }^{3}$ (also known as net financial debt or net debt) amounted to EUR 350.4 million as of June 30, 2024 (Dec. 31, 2023: EUR 323.2 million), again significantly lower than in previous years. Compared to the mid-2023 figure of EUR 380.1 million, net financial liabilities were down by EUR 29.7 million, reflecting the management's ambition to maintain a robust financial position in support of transformation. Non-current financial liabilities amounted to EUR 287.1 million, while current items totaled EUR 169.3 million.
This resulted in a net debt-to-EBITDA ${ }^{4}$ ratio of 1.7 (Dec. 31, 2023: 1.6). This represents an improvement on the figure of 1.9 at the end of the first half of 2023.
Non-current liabilities as a whole amounted to EUR 454.8 million or $22.7 \%$ of the balance sheet total at the end of the first half of 2024. Current liabilities had a total carrying amount of EUR 647.0 million, accounting for $32.2 \%$ of the balance sheet total at the end of the period under review.
[^0]The return on capital employed (ROCE) as of June 30, 2024, was $6.2 \%$ (June 30, 2023: $5.6 \%$ ) or $6.3 \%$ (June 30, 2023: $6.7 \%$ ) taking into account the same non-recurring effects as for adjusted EBIT.
Cash flow from operating activities at EUR 40 million
The ElringKlinger Group generated net cash from operating activities of EUR 39.9 million in the first half of 2024 (H1 2023: EUR 23.3 million). In the second quarter of 2024 financial year, ElringKlinger recorded net cash from operating activities of EUR 23.2 million (Q2 2023: EUR 26.8 million).
In contrast to earnings before taxes for the period of EUR 33.8 million (H1 2023: EUR 28.0 million), non-cash components of earnings were eliminated, as is customary, when calculating operating cash flow. In this context, the largest item is depreciation and amortization (less write-ups) of non-current assets for the period, which amounted to EUR 54.3 million in the first six months of 2024 (H1 2023: EUR 57.4 million). Interest paid in this period reduced cash by EUR 11.3 million (H1 2023: EUR 10.8 million).
Furthermore, the use of funds for net working capital, i. e., the funds used for inventories and trade receivables after deducting trade payables, also had a significant bearing on cash flows. By its very nature, this use of funds is subject to continuous fluctuation, as it is closely linked to prevailing revenue and order levels as well as market conditions. These changes in inventories (including changes in other assets and liabilities that are not attributable to investing or financing activities) resulted in an outflow of EUR 39.3 million for the Group in the year to date, slightly less than in the same period of the previous year (H1 2023: EUR 47.7 million). The second quarter of 2024 accounted for an outflow of EUR 11.0 million (Q2 2023: outflow of EUR 2.0 million).
Cash flow from operating activities $1^{\text {st }}$ half in EUR million
[^0]: ${ }^{3}$ Current and non-current financial liabilities less cash and cash equivalents and short-term securities
${ }^{4}$ EBITDA: Earnings before interest, taxes, depreciation, and amortization
Slight increase in investments in property, plant, and equipment
Capital expenditure on property, plant, and equipment amounted to EUR 39.6 million in the first half of 2024 (H1 2023: EUR 29.7 million). Thus, the ElringKlinger Group invested around EUR 10.0 million more in the first half of 2024 than in the same period a year ago. This trend was also evident in the second quarter, which accounted for EUR 22.7 million (Q2 2023: EUR 17.4 million) of these outflows.
A key area of expenditure related to the expansion and alignment of production activities in support of the Group's strategic goal of transforming its portfolio. Accordingly, a larger proportion of investments was spent on battery and fuel cell technology. The latter is associated with the Group company EKPO; here investments were directed at both the established center at the headquarters in Dettingen/Erms and the US subsidiary. In the first two quarters of 2024, ElringKlinger made larger investments in production facilities and assembly lines for upcoming customer projects and series production ramp-ups in the area of battery technology, for which ElringKlinger AG's specialist plant in Neuffen, Germany, is responsible.
Cash outflows for investments related to all segments and Group regions. The Group's portfolio transformation is embedded within the new SHAPE30 Group strategy. In addition to the expansion of the E-Mobility and Lightweighting business units as well as applications for the hydrogen economy, it also
involves a steady stream of innovations and corresponding investment measures for the long-standing business units.
Capital expenditure on intangible assets amounted to EUR 11.2 million in the first half of 2024 (H1 2023: EUR 10.8 million). Of this amount, EUR 5.3 million was attributable to the second quarter of 2024 (Q2 2023: EUR 5.9 million). This item mainly consists of capitalized development costs with a focus on electromobility applications.
As expected, the investment ratio (payments for investments in property, plant, and equipment in relation to Group revenue) in the first half of 2024 rose year on year to $4.3 \%$ (H1 2023: $3.1 \%$ ), with an increase to $5.1 \%$ (Q2 2023: $3.7 \%$ ) being recorded in the second quarter in particular as a result of preparations for the series production of major orders.
Slight improvement in operating free cash flow
Net cash from operating activities did not fully cover payments for investments in the first half of the year or in the first two quarters of 2024 in each case. This resulted in operating free cash flow of EUR - 10.3 million for the reporting period. Nevertheless, the Group achieved a slight improvement compared to the same period of the previous year, when operating free cash flow had stood at EUR - 16.5 million. In the second quarter of 2024, operating free cash flow amounted to EUR - 4.5 million (Q2 2023: EUR 3.7 million).
Changes in cash $1^{\text {st }}$ half 2024
in EUR million
[^0]
[^0]: ${ }^{1}$ Payments for investments in property, plant, and equipment and intangible assets
${ }^{2}$ Including proceeds of EUR 14.0 million from OPmobility for investment in EKPO and utilization of funds of EUR 12.7 million for short-term securities
Reduction in long-term loans
In the first half of 2024, ElringKlinger used net funds of EUR 10.3 million relating to changes in non-current and current loans, which were mainly channeled into the repayment of non-current loans. The distributions to shareholders and non-controlling interests in the amount of EUR 10.9 million, which were almost exclusively effected in the second quarter of 2024, are also attributable to cash flow from financing activities. At the same time, the Group received EUR 14.0 million in the first quarter of 2024 from the co-owner of the Group company EKPO as a capital contribution or in connection with a capital increase executed by this subsidiary.
As a result, the ElringKlinger Group's cash outflow from financing activities amounted to EUR 7.2 million in the first six months of 2024 (H1 2023: cash inflow of EUR 16.3 million). In the second quarter, net cash from financing activities amounted to EUR - 37.6 million (Q2 2023: EUR 11.5 million).
At the end of the first half of 2024, the ElringKlinger Group had cash and cash equivalents of EUR 80.9 million (Jun. 30, 2023: EUR 109.4 million) and open, unused credit lines of EUR 299.1 million (Jun. 30, 2023: EUR 213.0 million).
Opportunities and Risks
Risks emanating from geopolitical events have persisted in the first half of 2024. Alongside the uncertainties relating to the US presidential elections, which will be held in November 2024, the first half produced new imponderables surrounding protective tariffs and associated trade conflicts. Tariffs and retaliatory measures tend to have an impact on international trade and may prove detrimental to the global economy. In particular, trade relations between the United States, China, and the European Union were strained in the period under review, which also affected the automotive sector and thus ElringKlinger. In July 2024, the EU Commission imposed additional tariffs on e-cars from China on a provisional basis, citing the cost advantages enjoyed by Chinese manufacturers as a result of anti-competitive subsidies granted by the Chinese government. The Chinese government has announced that it intends to implement countermeasures. It remains to be seen what the final outcome of this cascade of measures and international negotiations at a political level will be.
As regards other opportunities and risks for the ElringKlinger Group, the first half of 2024 saw no significant changes compared to the disclosures made in the 2023 annual report of the ElringKlinger Group.
There are currently no discernible risks that might jeopardize the future existence of the Group as a going concern, either in isolation or in conjunction with other risk factors.
The opportunity and risk report of the 2023 annual report (pages 96 ff .) can be accessed via the ElringKlinger website www.elringklinger.de/ar2023/report-on-opportunities-and-risks
Report on Expected Developments
Outlook - Market and Sector
According to economists ${ }^{5}$, the global economy is again expected to experience a moderate upturn in the second half of 2024. In its latest outlook for 2024 as a whole, the International Monetary Fund (IMF) predicts that global economic output will be up $3.2 \%$ on the previous year. Global trade in goods is likely to expand only slightly at first.
The growth disparities between industrialized countries are expected to diminish further. In the United States, the economy is expected to cool slightly after a period of more dynamic revival coinciding with a decline in consumption. In contrast, Japan and the eurozone are expected to experience continued economic recovery. In Europe, impetus is likely to come from an upturn in private consumption, underpinned by an increase in wages in real terms, favorable labor market conditions, and lower inflation.
The emerging Asian countries, particularly the heavyweight economies of China and India, are likely to continue to act as the engine of growth for the global economy. Nevertheless, the trend toward lower growth rates is expected to persist in China due to the real estate crisis, high levels of corporate debt, deteriorating employment prospects, and the stance taken on trade policy.
Leading central banks may continue to adhere to their restrictive policies for longer in response to the slow pace of disinflation, according to the IMF, but fundamentally the trend appears to be towards interest rate cuts in the second half of 2024. Import duties and industrial policy measures, as reflected in the recent tensions between the USA, the EU, and China in the automotive sector, could pose a further risk to global trade.
GDP growth projections
| Year-on-year change in \% | 2023 | $2024 e^{1}$ |
|---|---|---|
| World | 3.3 | 3.2 |
| Advanced economies | 1.7 | 1.7 |
| Emerging and developing countries | 4.4 | 4.3 |
| Germany | -0.2 | 0.2 |
| Eurozone | 0.5 | 0.9 |
| USA | 2.5 | 2.6 |
| Brazil | 2.9 | 2.1 |
| China | 5.2 | 5.0 |
| India | 8.2 | 7.0 |
| Japan | 1.9 | 0.7 |
${ }^{1}$ Projection
Source: IMF (July 2024)
Stagnation of global vehicle production
According to the July 2024 forecast presented by industry data service provider S&P Mobility, global vehicle production will reach 88.7 million light vehicles (passenger cars and light commercial vehicles) in 2024. The institute has thus revised its forecast downwards compared to the previous quarter ( 90.5 million vehicles) across all key regions. Overall, this would suggest that the global market is trending slightly lower compared to the previous year, which had seen significant growth and the replenishment of stocks.
Projections Light vehicle production
| Region | Vehicles millions | Year-on-year change | |
|---|---|---|---|
| 2023 | $2024 e^{1}$ | ||
| Europe $^{2}$ | 17.3 | 16.4 | $-5.6 \%$ |
| China | 29.0 | 29.1 | $0.0 \%$ |
| Japan/Korea | 12.8 | 12.1 | $-5.3 \%$ |
| Middle East/Africa | 2.3 | 2.2 | $-3.0 \%$ |
| North America | 15.7 | 15.8 | $0.6 \%$ |
| South America | 2.9 | 2.8 | $-2.9 \%$ |
| South Asia | 9.8 | 9.6 | $-2.2 \%$ |
| World | 90.5 | 88.7 | $-2.0 \%$ |
| ${ }^{1}$ Projection ${ }^{2}$ excl. Russia |
|||
| Source: S&P Global Mobility, July 2024 |
[^0]
[^0]: ${ }^{5}$ Statements based on data provided by the International Monetary Fund, the Kiel Institute for the World Economy (IPW), HSBC Bank, and own research
Sales markets show slight growth
According to data published by the German association of automotive industry VDA in July 2024, the international sales markets, measured in terms of new car and light vehicle registrations, will generate slight growth almost across the board over the year as a whole. In this context, an increase of
Outlook - Company
Business conditions in the automotive industry remain challenging. In addition to being driven by geopolitical tensions, including trade policies centered around customs measures, this is also attributable to macroeconomic developments such as inflation and economic growth as well as industry-specific factors such as declining demand for electric vehicles and debate in Europe about lifting the bans imposed on combustion engines. Fundamentally, this translates into persistent uncertainty and volatility. Nevertheless, ElringKlinger is of the opinion that the trend toward the decarbonization of mobility and the general upturn in demand for electric vehicles remains essentially intact.
Order intake influenced by currency effects
Currency effects had a significant impact on incoming orders: based on reported figures, the Group's order intake in the second quarter of 2024 was EUR 364.9 million (Q2 2023: EUR 373.8 million), down $2.4 \%$ or EUR 8.9 million on the same period of the previous year. Assuming stable exchange rates, however, order intake increased by $1.4 \%$ or EUR 5.1 million. The Group also saw an improvement in customer call-off volumes in the first half of the year: after EUR 848.7 million in the first half of 2023, the Group recorded incoming orders of EUR 854.3 million in the first six months of 2024 - an increase of $0.7 \%$ or EUR 5.6 million. Excluding exchange rate effects, growth in this area amounted to $2.4 \%$ or EUR 20.6 million.
In this context, it should be noted that ElringKlinger only uses the order book recording customers' short-term orders placed as part of their scheduling arrangements to determine its key order indicators (order intake and order backlog). These call-offs, i. e., orders placed by customers as part of their scheduling arrangements, refer to the period
around $2 \%$ to 15.7 million light vehicles (passenger cars and light commercial vehicles) is expected for the United States and a slight rise of around $1 \%$ to 21.9 million passenger cars for China. In Europe (EU, EFTA, UK), new car registrations may rise by around $4 \%$ to 13.3 million new vehicles in 2024 as a whole.
immediately thereafter, but not to the nomination volume over the respective contract periods.
Order backlog, which comprises customers' aggregated and as yet unrealized short-term call-offs, amounted to EUR 1,249.3 million at the end of the quarter under review (Jun. 30, 2023: EUR 1,354.1 million). In the case of order backlog, currency effects had a minor impact in the second quarter of 2024; assuming stable exchange rates, order backlog was up EUR 9.6 million or $0.8 \%$ at EUR 1,258.9 million.
Guidance confirmed
Against the backdrop of generally challenging economic and geopolitical conditions, ElringKlinger can confirm its guidance for the current financial year on the basis of its half-year results and current market assessments. Accordingly, the Group remains confident that it will be in a position to slightly exceed last year's revenue in organic terms in the current financial year. Amid difficult and uncertain market conditions, the Group assumes that the new series production orders for electric vehicles will ramp up and that general projections regarding the production of light and commercial vehicles will not be subject to any significant further adjustments.
ElringKlinger continues to anticipate an adjusted EBIT margin, i. e., adjusted earnings before interest and taxes (based on the definition presented in the 2023 annual report) in relation to Group revenue, of around 5\%. Furthermore, the Group anticipates operating free cash flow of around 2\% of Group revenue and ROCE of around 6\% in 2024.
Mid-term outlook
Despite the difficult conditions seen within the business environment in which ElringKlinger operates, the company considers itself to be well positioned in the medium to long term. ElringKlinger was quick off the mark in its efforts to embrace the transition toward e-mobility with products engineered specifically for battery and fuel cell systems as well as for electric drive units. The Lightweighting/Elastomer Technology, Metal Sealing Systems \& Drivetrain Components, and Metal Forming \& Assembly Technology business units, originally focused on the traditional fields of application, have an established market position in product solutions centered around the combustion engine, but are also geared up for the
transformation of the mobility market, as evidenced by the revenue already achieved in connection with e-mobility applications or the nominations received in recent years. Against this backdrop, ElringKlinger anticipates further growth. In the medium term, i. e., over a period of 3 to 5 years, the Group expects revenue to increase at an annual organic growth rate of around 5 to $7 \%$. With regard to the earnings situation, the Group has set itself the goal of achieving an adjusted EBIT margin of around $7 \%$ in the medium term. The Group has also confirmed its other medium-term targets.
Dettingen/Erms, August 7, 2024
Management Board
Thomas Jessulat CEO
Reiner Drews
Dirk Willers
ElringKlinger and the Capital Markets
Stock market with mixed performance
Stock markets performed very well in many regions over the course of the first half of 2024. Market activity was shaped by initial interest rate cuts implemented by the world's major central banks, together with economic and inflationary trends, the momentum provided by artificial intelligence (AI), and the ongoing conflicts in Ukraine and Gaza.
Meanwhile, falling inflation rates in the eurozone and the US over the course of the first half of the year provided positive impetus for central banks, which for their part are "navigating by sight." The US Fed left its benchmark interest rate in a target range of $5.25 \%$ to $5.50 \%$ in the first half of the year but held out the prospect of interest rate cuts in the course of the year. The ECB, by contrast, lowered the main refinancing rate from $4.50 \%$ to $4.25 \%$.
Although the performance of Germany's blue-chip index, the DAX, was well into positive territory, the German stock market as a whole recorded a net outflow of liquidity on account of the economic outlook. It was evident that investors often preferred other asset classes or regions. Stocks with a lower market capitalization (small and mid caps) were particularly negatively affected by this, as they tend to have higher valuation discounts compared to larger stocks (large caps) in
the event of an outflow of liquidity. This explains the mixed performance of the principal German share indices: the DAX blue-chip index rose by $8.9 \%$ in the first half of 2024 and the SDAX by just $2.6 \%$, while the MDAX fell by as much as $7.2 \%$.
The international markets, particularly those of Japan and the United States, developed positively over the first half of the year. The broad-market S6P 500 rose by $15.3 \%$ between January and June 2024, while the tech-laden Nasdaq 100 index gained $17.5 \%$. The Euro Stoxx 50 also gained ground with growth of $11.2 \%$, although it lagged behind the performance of the aforementioned US indices. The US market rally was underpinned by AI-induced momentum and the performance of major tech companies.
Following on from 2023, the Japanese stock market remained bullish, with the Nikkei gaining 19.3\% in the first six months of 2024. Meanwhile, investors in China showed concern over the local economy, prompting a less favorable performance of the key Chinese indices compared to their European and US counterparts. Hong Kong's Hang Seng was up 6.2\% at the end of June, while the SSE Composite Index of the Shanghai Stock Exchange gained just $0.9 \%$.
ElringKlinger's share price performance from January 1 to June 30, 2024 (indexed)
in\%
Shareholder structure as of June 30, 2024
ElringKlinger stock at year-to-date high thanks to financial results
On the back of the favorable stock market reaction to the publication of the financial results for 2023 on March 27, 2024, ElringKlinger's share price continued to rise, reaching its high for the year to date of EUR 7.20 on April 9. However, similar to the route taken by the market as a whole and other automotive stocks, the company's share price subsequently trended downwards again. Alongside short-term profit-taking in the case of ElringKlinger shares, the key industry indices were also impacted by the prospect of trade barriers in the second quarter of 2024. Specifically, the EU Commission announced tariffs on electric cars imported from China in the second quarter of 2024. In general, automotive stocks underperformed the market as a whole in the first half of 2024. This also applied to ElringKlinger's shares. At the end of the second quarter of 2024, the company's share price stood at EUR 4.98 .
Trading volume of around 50 thousand shares per day At an average of 49,908 shares per stock exchange day, the volume traded in the second quarter of 2024 was lower than in the same period of the previous year (Q2 2023: 72,325 shares). Thus, ElringKlinger's stock also saw a reduction in the daily trading value on German stock exchanges, reaching an average of EUR 0.3 million per day in the second quarter, a lower figure than in the same period last year (Q2 2023: EUR 0.6 million). The stock's liquidity was sufficiently high at all times during the quarter under review, thus providing the basis for larger share transactions to be concluded during this period.
Engaged in dialogue with the capital markets
ElringKlinger maintained its close dialogue with international investors, analysts, and other capital market players over the course of the second quarter of 2024. The financial results for
the first quarter of 2024 were published on May 7. The Management Board presented the key financials for the first quarter to the large number of capital market participants in attendance. Between April and June 2024, ElringKlinger AG also engaged with the capital market at two investor conferences and roadshows, both in person and in a virtual format. In addition, the company held numerous one-on-one meetings with investors and analysts.
Virtual Annual General Meeting in May
The $119^{\text {th }}$ Annual General Meeting of ElringKlinger AG was held on May 16, 2024. The shareholders approved all proposed resolutions with a clear majority. In total, $72.0 \%$ of the voting share capital was represented at the Annual General Meeting. The proposed dividend payout of EUR 0.15 per share, unchanged year on year, was approved by a large majority of $99.7 \%$. In addition, the Annual General Meeting approved the actions of the Management Board and the Supervisory Board with $98.0 \%$ and $96.4 \%$ of the votes respectively, in addition to approving the compensation report as well as the compensation system of the Management Board members. Furthermore, a replacement election was held for the Supervisory Board: after Chairman of the Supervisory Board Klaus Eberhardt had announced in March 2024 that he would be stepping down from his office and relinquishing his Supervisory Board mandate, Ludger Heuberg was elected as a new member of the Supervisory Board as proposed by the Annual General Meeting.
Former Chairman of the Audit Committee Helmut P. Merch succeeded Klaus Eberhardt as Chairman of the Supervisory Board of ElringKlinger AG. At the Supervisory Board meeting subsequent to the Annual General Meeting, Merch was elected as the new Chairman of the Supervisory Board and Ludger Heuberg was elected Chairman of the Audit Committee at this meeting.
ElringKlinger Stock (WKN 785 602)
| $2^{\text {nd }}$ quarter 2024 |
$2^{\text {nd }}$ quarter 2023 |
|
|---|---|---|
| Number of shares outstanding | $63,359,990$ | $63,359,990$ |
| Share price (daily price in EUR) ${ }^{1}$ | ||
| High | 7.20 | 10.64 |
| Low | 4.98 | 8.02 |
| Closing price ${ }^{2}$ | 4.98 | 8.25 |
| Average daily trading volume ${ }^{3}$ | ||
| (volume of shares traded) | 49,908 | 72,325 |
| Average daily trading value ${ }^{3}$ (in EUR) | 311,623 | 677,143 |
| Market capitalization (EUR million) ${ }^{1,2}$ | 315.2 | 522.7 |
[^0]
[^0]: ${ }^{1}$ Rätta trading
${ }^{2}$ as of June 30
${ }^{3}$ German stock exchanges
Group Income Statement
of ElringKlinger AG, January 1 to June 30, 2024
Group Statement of Comprehensive Income
of ElringKlinger AG, January 1 to June 30, 2024
Group Statement of Financial Position
of ElringKlinger AG, as at June 30, 2024
| EUR k | Jun. 30, 2024 | Dec. 31, 2023 | Jun. 30, 2023 |
|---|---|---|---|
| ASSETS | |||
| Intangible assets | 173,893 | 168,151 | 151,552 |
| Property, plant and equipment | 856,175 | 857,981 | 875,267 |
| Financial assets | 11,815 | 11,646 | 13,696 |
| Shares in associates | 12,002 | 14,089 | 14,063 |
| Non-current income tax assets | 2,684 | 2,464 | 2,629 |
| Other non-current assets | 2,009 | 1,732 | 11,814 |
| Deferred tax assets | 25,567 | 24,889 | 21,323 |
| Contract performance costs | 5,914 | 5,348 | 5,973 |
| Non-current contract assets | 5,798 | 5,991 | 357 |
| Non-current assets | 1,095,857 | 1,092,291 | 1,096,674 |
| Inventories | 459,107 | 436,276 | 438,927 |
| Current contract assets | 4,481 | 7,327 | 6,757 |
| Trade receivables | 247,522 | 246,908 | 293,979 |
| Current income tax assets | 18,804 | 20,243 | 4,063 |
| Other current assets | 100,834 | 91,420 | 91,288 |
| Cash and cash equivalents | 80,914 | 113,712 | 109,351 |
| Current assets | 911,662 | 915,886 | 944,365 |
| 2,007,519 | 2,008,177 | 2,041,039 |
| EUR $\$$ | Jun. 30, 2024 | Dec. 31, 2023 | Jun. 30, 2023 |
|---|---|---|---|
| LIABILITIES AND EQUITY | |||
| Share capital | 63,360 | 63,360 | 63,360 |
| Capital reserves | 118,238 | 118,238 | 118,238 |
| Revenue reserves | 684,905 | 671,249 | 640,974 |
| Other reserves | $-26,872$ | $-9,719$ | $-8,362$ |
| Equity attributable to the shareholders of ElringKlinger AG | 839,631 | 843,128 | 814,210 |
| Non-controlling interest in equity | 66,121 | 67,552 | 71,788 |
| Equity | 905,752 | 910,680 | 885,998 |
| Provisions for pensions | 102,682 | 103,968 | 97,800 |
| Non-current provisions | 28,028 | 23,713 | 18,349 |
| Non-current financial liabilities | 287,114 | 282,227 | 384,968 |
| Non-current contract liabilities | 1,367 | 1,562 | 1,653 |
| Deferred tax liabilities | 29,419 | 25,851 | 25,905 |
| Other non-current liabilities | 6,175 | 6,419 | 9,900 |
| Non-current liabilities | 454,785 | 443,740 | 538,575 |
| Current provisions | 49,956 | 50,939 | 68,381 |
| Trade payables | 224,253 | 216,931 | 203,912 |
| Current financial liabilities | 169,336 | 167,711 | 125,283 |
| Current contract liabilities | 12,603 | 14,740 | 14,530 |
| Tax payable | 18,959 | 20,933 | 36,401 |
| Other current liabilities | 171,875 | 182,503 | 167,959 |
| Current liabilities | 646,982 | 653,757 | 616,466 |
| 2,007,519 | 2,008,177 | 2,041,039 |
Group Statement of Changes in Equity
of ElringKlinger AG, January 1 to June 30, 2024
| Other reserves | |||||
|---|---|---|---|---|---|
| Remeasurement of defined benefit plans, net | Equity impact of controlling interests | Currency translation differences | Equity attributable to the shareholders of ElringKlinger AG | Non-controlling interests in equity | Group equity |
| $-18,760$ | 48,317 | $-28,634$ | 823,961 | 72,872 | 896,833 |
| $-9,504$ | $-809$ | $-10,313$ | |||
| 0 | 6,000 | 6,000 | |||
| $-9,285$ | $-247$ | $-6,275$ | $-6,522$ | ||
| 9,038 | $-5,150$ | 3,888 | |||
| $-9,285$ | $-9,285$ | $-1,125$ | $-10,410$ | ||
| $-18,760$ | 48,317 | $-37,919$ | 814,210 | 71,788 | 885,998 |
| $-24,115$ | 48,069 | $-33,673$ | 843,128 | 67,552 | 910,680 |
| $-9,504$ | $-1,382$ | $-10,886$ | |||
| 0 | 4,000 | 4,000 | |||
| $-17,153$ | 6,007 | $-4,049$ | 1,958 | ||
| 23,160 | $-3,856$ | 19,304 | |||
| $-17,153$ | $-17,153$ | $-193$ | $-17,346$ | ||
| $-24,115$ | 48,069 | $-50,826$ | 839,631 | 66,121 | 905,752 |
Group Statement of Cash Flows
of ElringKlinger AG, January 1 to June 30, 2024
Group Sales Revenue
of ElringKlinger AG, January 1 to June 30, 2024
Sales revenue by regions
| EUR k | $2^{\text {nd }}$ quarter 2024 | $2^{\text {nd }}$ quarter 2023 | $1^{\text {st }}$ half 2024 | $1^{\text {st }}$ half 2023 |
|---|---|---|---|---|
| Germany | 100,228 | 94,904 | 194,641 | 192,083 |
| Rest of Europe | 139,899 | 145,760 | 293,049 | 304,854 |
| North America | 113,839 | 119,857 | 235,132 | 247,568 |
| Asia-Pacific | 65,545 | 83,867 | 136,229 | 165,310 |
| South America and Rest of World | 25,441 | 24,334 | 51,197 | 46,622 |
| Group | 444,952 | 468,722 | 910,248 | 956,437 |
Sales revenue by segments
| EUR k | $2^{\text {nd }}$ quarter 2024 | $2^{\text {nd }}$ quarter 2023 | $1^{\text {st }}$ half 2024 | $1^{\text {st }}$ half 2023 |
|---|---|---|---|---|
| Lightweighting/Elastomer Technology | 121,353 | 149,304 | 253,502 | 305,577 |
| Metal Sealing Systems \& Drivetrain Components | 121,654 | 126,432 | 247,540 | 257,464 |
| Metal Forming \& Assembly Technology | 67,612 | 72,981 | 137,750 | 147,596 |
| E-Mobility | 17,685 | 10,926 | 28,974 | 17,120 |
| Exhaust Gas Purification | 7 | 71 | 10 | 1,065 |
| Others | 0 | 1 | 1 | 2 |
| Segment Original Equipment | 328,311 | 359,715 | 667,777 | 728,824 |
| Segment Original Equipment | 328,311 | 359,715 | 667,777 | 728,824 |
| Segment Aftermarket | 84,813 | 75,607 | 175,200 | 157,270 |
| Segment Engineered Plastics | 31,466 | 32,662 | 66,302 | 68,607 |
| Sale of goods | 444,590 | 467,984 | 909,279 | 954,701 |
| Proceeds from the rendering of services | 362 | 738 | 969 | 1,736 |
| Revenue from contracts with customers | 444,952 | 468,722 | 910,248 | 956,437 |
| Income from rental and leasehold | 0 | 0 | 0 | 0 |
| Group | 444,952 | 468,722 | 910,248 | 956,437 |
Segment Reporting
of ElringKlinger AG, April 1 to June 30, 2024
| Segment | Original Equipment | Aftermarket | Engineered Plastics | |||
|---|---|---|---|---|---|---|
| $2^{\text {nd }}$ quarter 2024 |
$2^{\text {nd }}$ quarter 2023 |
$2^{\text {nd }}$ quarter 2024 |
$2^{\text {nd }}$ quarter 2023 |
$2^{\text {nd }}$ quarter 2024 |
$2^{\text {nd }}$ quarter 2023 |
|
| External revenue | 328,311 | 359,715 | 84,813 | 75,607 | 31,466 | 32,662 |
| Intersegment revenue | 8,095 | 7,161 | 0 | 0 | 101 | 18 |
| Segment revenue | 336,406 | 366,876 | 84,813 | 75,607 | 31,567 | 32,680 |
| EBIT ${ }^{1}$ | $-1,356$ | $-976$ | 20,548 | 18,423 | 2,694 | 2,054 |
| Adjustments | 29 | 4,331 | 0 | 591 | 0 | 470 |
| EBIT adjusted ${ }^{2}$ | $-1,327$ | 3,355 | 20,548 | 19,014 | 2,694 | 2,524 |
| Depreciation and amortization ${ }^{3}$ | $-23,574$ | $-24,370$ | $-1,643$ | $-803$ | $-1,635$ | $-1,678$ |
| Capital expenditures ${ }^{4}$ | 28,639 | 21,993 | 1,128 | 800 | 1,127 | 1,425 |
January 1 to June 30, 2024
| Segment | Original Equipment | Aftermarket | Engineered Plastics | |||
|---|---|---|---|---|---|---|
| $1^{\text {st }}$ half 2024 |
$1^{\text {st }}$ half 2023 |
$1^{\text {st }}$ half 2024 |
$1^{\text {st }}$ half 2023 |
$1^{\text {st }}$ half 2024 |
$1^{\text {st }}$ half 2023 |
|
| External revenue | 667,777 | 728,824 | 175,200 | 157,270 | 66,302 | 68,607 |
| Intersegment revenue | 20,111 | 17,784 | 0 | 0 | 109 | 34 |
| Segment revenue | 687,888 | 746,608 | 175,200 | 157,270 | 66,411 | 68,641 |
| EBIT ${ }^{1}$ | $-3,983$ | $-157$ | 43,226 | 38,266 | 5,987 | 7,173 |
| Adjustments | 267 | 4,660 | 0 | 591 | 0 | 470 |
| EBIT adjusted ${ }^{2}$ | $-3,716$ | 4,503 | 43,226 | 38,857 | 5,987 | 7,643 |
| Depreciation and amortization ${ }^{3}$ | $-47,097$ | $-48,925$ | $-3,287$ | $-1,571$ | $-3,236$ | $-3,351$ |
| Capital expenditures ${ }^{4}$ | 59,753 | 39,065 | 2,538 | 1,437 | 2,040 | 2,669 |
[^0]
[^0]: ${ }^{1}$ Earnings before interest and taxes
${ }^{2}$ Adjusted for impairments on goodwill, impairments on non-current assets, restructuring and restructuring-related charges and other non-operating effects
${ }^{3}$ Scheduled depreciation and amortization
${ }^{4}$ Investments in intangible assets and property, plant and equipment
| Other | Consolidation | Group | |||
|---|---|---|---|---|---|
| $2^{\text {nd }}$ quarter 2024 |
$2^{\text {nd }}$ quarter 2023 |
$2^{\text {nd }}$ quarter 2024 |
$2^{\text {nd }}$ quarter 2023 |
$2^{\text {nd }}$ quarter 2024 |
$2^{\text {nd }}$ quarter 2023 |
| 362 | 738 | 0 | 0 | 444,952 | 468,722 |
| 3,858 | 3,192 | $-12,054$ | $-10,371$ | 0 | 0 |
| 4,220 | 3,930 | $-12,054$ | $-10,371$ | 444,952 | 468,722 |
| 525 | $-2,766$ | 22,411 | 16,735 | ||
| 19 | 2,720 | 48 | 8,112 | ||
| 544 | $-46$ | 22,459 | 24,847 | ||
| -250 | $-502$ | $-27,102$ | $-27,353$ | ||
| 15 | 101 | 30,909 | 24,319 |
| Other | Consolidation | Group | |||
|---|---|---|---|---|---|
| $1^{\text {st }}$ half 2024 |
$1^{\text {st }}$ half 2023 |
$1^{\text {st }}$ half 2024 |
$1^{\text {st }}$ half 2023 |
$1^{\text {st }}$ half 2024 |
$1^{\text {st }}$ half 2023 |
| 969 | 1,736 | 0 | 0 | 910,248 | 956,437 |
| 7,491 | 6,306 | $-27,711$ | $-24,124$ | 0 | 0 |
| 8,460 | 8,042 | $-27,711$ | $-24,124$ | 910,248 | 956,437 |
| 973 | $-2,525$ | 46,203 | 42,757 | ||
| 19 | 2,720 | 286 | 8,441 | ||
| 992 | 195 | 46,489 | 51,198 | ||
| -497 | $-1,053$ | $-54,117$ | $-54,900$ | ||
| 157 | 168 | 64,488 | 43,339 |
Notes to the First Half of 2024
General information
ElringKlinger AG is an exchange-listed stock corporation headquartered in Dettingen/Erms, Germany.
The accompanying condensed consolidated interim financial statements of ElringKlinger AG and its subsidiaries as of June 30, 2024, have been prepared on the basis of IAS 34 (Interim Financial Reporting). The interim financial statements conform with the International Financial Reporting Standards (IFRS), including the Interpretations issued by the IFRS Interpretations Committee (IFRS IC), as adopted by the European Union.
As the consolidated interim financial statements are presented in a condensed format, the financial statements as of June 30, 2024, do not include all information and disclosures required under IFRS for annual consolidated financial statements.
The consolidated interim financial statements as of June 30, 2024, have been neither audited nor reviewed in any way by an independent auditor.
They were authorized for issue based on a resolution passed by the Management Board on August 7, 2024.
Accounting policies
The accounting policies applied in this interim report are fundamentally based on the same as those applied in the preparation of the 2023 consolidated financial statements, where they are also explained in detail.
The interim report incorporates estimates and judgments. These may have a direct impact on the amount of assets and liabilities recognized. Due to external factors, such as further unforeseeable consequences regarding the impact of the RussiaUkraine conflict, the conflict in the Middle East, the tense situation within the commodity markets, the general macroeconomic trajectory, and developments within the automotive sector, these are subject to heightened uncertainty. When updating the estimates and judgments, information available in respect of expected economic trends and country-specific measures were taken into account.
Scope of consolidated financial statements
Alongside the financial statements of ElringKlinger AG, the interim financial statements as of June 30, 2024, include the financial statements of seven domestic and 36 foreign entities in which ElringKlinger AG holds more than $50 \%$ of the interests, either directly or indirectly, or over which, for other reasons, it has the power to govern the financial and operating policies. Inclusion in the consolidated group commences on the date on which control is obtained; it ceases as soon as control no longer exists.
The interests held in hofer AG, Nürtingen, Germany, totaling $24.71 \%$ have been accounted for as an associate in noncurrent Group assets, as ElringKlinger has significant influence over the entity's operating and financial policies. A significant influence over an associate is presumed to exist if an entity holds $20 \%$ to $50 \%$ of the voting power of the investee.
Compared to the consolidated financial statements as of December 31, 2023, there were no other changes in the scope of consolidation with the exception of the formation of ElringKlinger Plastics Technology (Qingdao) Ltd., based in Qingdao, China, and ElringKlinger South Carolina, LLC., based in Easley, USA.
Newly established entity
ElringKlinger Plastics Technology (Qingdao) Ltd., based in Qingdao, China, a wholly owned subsidiary of ElringKlinger Kunststofftechnik GmbH, based in Bietigheim-Bissingen, Germany, was founded on March 4, 2024.
On June 27, 2024, ElringKlinger South Carolina, LLC., based in Easley, USA, was founded as a wholly owned subsidiary of ElringKlinger Holding USA, Inc., based in Buford, USA.
Exchange rates
Exchange rates developed as follows:
| Currency | Abbr. | Closing rate | Average rate | ||
|---|---|---|---|---|---|
| Jun. 30, 2024 | Dec. 31, 2023 | Jan.-Jun. 2024 | Jan.-Dec. 2023 | ||
| US dollar (USA) | USD | 1.07050 | 1.10500 | 1.07915 | 1.08285 |
| Pound (United Kingdom) | GBP | 0.84638 | 0.86905 | 0.85347 | 0.86880 |
| Swiss franc (Switzerland) | CHF | 0.96340 | 0.92600 | 0.96478 | 0.97166 |
| Canadian dollar (Canada) | CAD | 1.46700 | 1.46420 | 1.46825 | 1.46195 |
| Real (Brazil) | BRL | 5.89150 | 5.36180 | 5.53493 | 5.39402 |
| Mexican peso (Mexico) | MXN | 19.56540 | 18.72310 | 18.53168 | 19.06578 |
| RMB (China) | CNY | 7.77480 | 7.85090 | 7.79592 | 7.68393 |
| WON (South Korea) | KRW | 1,474.86000 | 1,433.66000 | 1,467.72833 | 1,420.12250 |
| Rand (South Africa) | ZAR | 19.49700 | 20.34770 | 20.26750 | 20.04102 |
| Yen (Japan) | JPY | 171.94000 | 156.33000 | 166.15000 | 153.17583 |
| Forint (Hungary) | HUF | 395.10000 | 382.80000 | 391.37500 | 380.57417 |
| Turkish lira (Turkey) | TRY | 35.18680 | 32.65310 | 34.41903 | 26.25843 |
| Leu (Romania) | RON | 4.97730 | 4.97560 | 4.97497 | 4.95140 |
| Indian rupee (India) | INR | 89.24950 | 91.90450 | 89.84563 | 89.43426 |
| Indonesian rupiah (Indonesia) | IDR | 17,487.21000 | 17,079.71000 | 17,303.89667 | 16,482.53083 |
| Bath (Thailand) | THB | 39.31900 | 37.97300 | 39.29300 | 37.71792 |
| Swedish krona (Sweden) | SEK | 11.35950 | 11.09600 | 11.42362 | 11.48422 |
Significant events and business transactions
After Chairman of the Supervisory Board Klaus Eberhardt had announced in March 2024 that he would be stepping down from his office and relinquishing his Supervisory Board mandate at ElringKlinger AG, Ludger Heuberg was elected as a new member of the Supervisory Board as proposed by the Annual General Meeting on May 16, 2024. Klaus Eberhardt will be succeeded as Chairman of the Supervisory Board of ElringKlinger AG by the former Chairman of the Audit Committee, Helmut P. Merch. As of this date, Mr. Heuberg took over as Chairman of the Audit Committee.
There were no other significant events or business transactions in the second quarter.
For information relating to factors influencing business performance and our estimates in the context of our guidance, please refer to our comments in the interim management report.
Disclosures relating to financial instruments
This section provides a comprehensive overview of the significance of financial instruments and offers additional information on line items of the statement of financial position containing financial instruments. There was no offsetting of financial instruments recognized by the company.
The following table shows the carrying amounts (CA) and fair values (FV) of financial assets:
| EUR k | Cash | Trade receivables | Other current assets | Derivatives | Non-current securities | Other financial investments | Total | ||
|---|---|---|---|---|---|---|---|---|---|
| CA | FV | CA | FV | CA | |||||
| as of Jun. 30, 2024 | |||||||||
| Financial assets measured at amortized cost | 80,914 | 247,522 | 29,774 | 0 | 1,362 | 1,363 | 8 | 8 | 359,580 |
| Financial assets measured at fair value through profit or loss | 0 | 0 | 9,975 | 215 | 0 | 0 | 10,234 | 10,234 | 20,424 |
| Financial assets measured at fair value through other comprehensive income | 0 | 0 | 0 | 0 | 203 | 203 | 8 | 8 | 211 |
| Total | 80,914 | 247,522 | 39,749 | 215 | 1,565 | 1,566 | 10,250 | 10,250 | 380,215 |
| as of Dec. 31, 2023 | |||||||||
| Financial assets measured at amortized cost | 113,712 | 246,908 | 17,864 | 0 | 1,362 | 1,362 | 8 | 8 | 379,854 |
| Financial assets measured at fair value through profit or loss | 0 | 0 | 19,912 | 516 | 0 | 0 | 10,055 | 10,055 | 30,483 |
| Financial assets measured at fair value through other comprehensive income | 0 | 0 | 0 | 0 | 213 | 213 | 8 | 8 | 221 |
| Total | 113,712 | 246,908 | 37,776 | 516 | 1,575 | 1,575 | 10,071 | 10,071 | 410,558 |
The following table shows the carrying amounts (CA) and fair values (FV) of financial liabilities:
The management has ascertained that the carrying amounts of cash, trade receivables, other current assets, trade payables, other current financial liabilities, and other current liabilities largely correspond to their fair values, primarily as a result of the short maturities of these instruments.
Other current assets also include time deposits and securities in the amount of EUR 25,177k (Dec. 31, 2023: EUR 12,983k) and the current portion of the outstanding contribution from Plastic Omnium measured at present value in the amount of EUR 9,975k (Dec. 31, 2023: EUR 19,912k).
ElringKlinger determines the market value of non-current fixed-interest liabilities to banks and derivatives by discounting expected future cash flows with the current prevailing interest rates for similar financial liabilities with comparable residual terms and the company-specific interest rate.
Other current liabilities include a liability of EUR 39,434k (Dec. 31, 2023: EUR 39,434k) that is attributable to a written put option with the non-controlling shareholders of ElringKlinger Marusan Corporation, a company with its registered office in Tokyo, Japan. The obligation arising from this agreement is measured at fair value through profit or loss. The fair value is determined on the basis of internal estimates relating to the forecast of the company's performance and the choice of the country-specific interest rate used with regard to the liability recognized. A change in the enterprise value by $10 \%$ would result in an increase/decrease in the put option by approx. EUR 3,943k (Dec. 31, 2023: EUR 3,943k).
Financial assets and liabilities measured at fair value are classified into the following three-level fair value hierarchy as of the end of the reporting period of June 30, 2024:
| EUR k | Level 1 | Level 2 | Level 3 |
|---|---|---|---|
| Jun. 30, 2024 | |||
| Financial assets | |||
| Non-current securities | 203 | 0 | 0 |
| Other financial investments | 8 | 0 | 10,234 |
| Derivatives* | 0 | 215 | 0 |
| Total | 211 | 215 | 10,234 |
| Financial liabilities | |||
| Derivatives* | 0 | 10,976 | 0 |
| Total | 0 | 10,976 | 0 |
| Dec. 31, 2023 | |||
| Financial assets | |||
| Non-current securities | 213 | 0 | 0 |
| Other financial investments | 8 | 0 | 10,055 |
| Derivatives* | 0 | 516 | 0 |
| Total | 221 | 516 | 10,055 |
| Financial liabilities | |||
| Derivatives* | 0 | 9,719 | 0 |
| Total | 0 | 9,719 | 0 |
*These are derivatives that do not qualify for hedge accounting.
The following table provides details of the classification of financial assets and liabilities that are not measured at fair value but for which a fair value has been presented, according to the three-level fair value hierarchy as of the end of the reporting period of June 30, 2024:
| EUR \ | Level 1 | Level 2 | Level 3 |
|---|---|---|---|
| Jun. 30, 2024 | |||
| Financial assets | |||
| Non-current securities | 1,363 | 0 | 0 |
| Other financial investments | 0 | 0 | 8 |
| Total | 1,363 | 0 | 8 |
| Financial liabilities | |||
| Non-current financial liabilities | 0 | 226,859 | 0 |
| Purchase price liability from written put option | 0 | 0 | 39,434 |
| Total | 0 | 226,859 | 39,434 |
| Dec. 31, 2023 | |||
| Financial assets | |||
| Non-current securities | 1,362 | 0 | 0 |
| Other financial investments | 0 | 0 | 8 |
| Total | 1,362 | 0 | 8 |
| Financial liabilities | |||
| Non-current financial liabilities | 0 | 214,324 | 0 |
| Purchase price liability from written put option | 0 | 0 | 39,434 |
| Total | 0 | 214,324 | 39,434 |
The levels of the fair value hierarchy are defined as follows:
Level 1: Measurement based on quoted prices
Level 2: Measurement based on inputs for the asset or liability that are observable in active markets either directly or indirectly
Level 3: Measurement based on inputs for assets and liabilities not representing observable market data
The assessment as to whether a transfer has occurred between the levels of the fair-value hierarchy with regard to the assets and liabilities carried at fair value is conducted in each case at the end of the reporting period. No transfers occurred in the reporting period under review.
Contingencies and related-party disclosures
The contingencies and related-party relationships disclosed in the consolidated financial statements for 2023 were not subject to significant changes in the first half of 2024.
Government grants
Other operating income in the first half of 2024 includes government grants totaling EUR 2,748k (Jun. 30, 2023: EUR 2,385k). These grants were attributable primarily to development projects. In addition, grants under the European funding initiative IPCEI ("Important Project of Common European Interest") were deducted from the carrying amount of capitalized development costs in the amount of EUR 1,842k (Jun. 30, 2023: EUR 796k) (net method).
Events after the reporting period
There were no further significant events after the end of the interim reporting period that would necessitate additional explanatory disclosure.
Responsibility Statement
To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the interim consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group, and the interim management report of the Group includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal opportunities and risks associated with the expected development of the Group for the remaining months of the financial year.
Dettingen/Erms, August 7, 2024
Management Board
Imprint
ElringKlinger AG
Max-Eyth-Straße 2
72581 Dettingen/Erms
Germany
Phone +49 (0) 71 23/724-0
Fax +49 (0) 71 23/724-90 06
www.elringklinger.com
IR Contact
Dr. Jens Winter
Phone +49 (0) 71 23/724-88 335
Fax +49 (0) 71 23/724-85 8335
[email protected]
ElringKlinger AG assumes no responsibility for data and statistics originating from third-party publications.
Further information is available at www.elringklinger.com
Disclaimer - Forward-looking Statements and Forecasts
This report contains forward-looking statements. These statements are based on expectations, market evaluations and forecasts by the Management Board and on information currently available to them. In particular, the forward-looking statements shall not be interpreted as a guarantee that the future events and results to which they refer will actually materialize. Whilst the Management Board is confident that the statements as well as the opinions and expectations on which they are based are realistic, the aforementioned statements rely on assumptions that may conceivably prove to be incorrect. Future results and circumstances depend on a multitude of factors, risks and imponderables that can alter the expectations and judgments that have been expressed. These factors include, for example, changes to the general economic and business situation, variations of exchange rates and interest rates, poor acceptance of new products and services, and changes to business strategy.
Supplementary Notes
Due to rounding, some of the numbers and percentage figures specified in this document may differ from the actual values, particularly in the case of summation and percentage calculations. For the purpose of readability, we have not used gender specific forms of grammer when referring to general designations of people. Specific terms relate to all people irrespective of gender.
This report was published on August 7, 2024, and is available in German and English. Only the German version shall be legally binding.
Financial Calendar 2024
NOVEMBER
12
Financial Results
on the $3^{\text {rd }}$ Quarter and
$1^{\text {st }}$ Nine Months of 2024
MAY 2025
16
$120^{\text {th }}$ Annual General
Shareholders' Meeting
[^0]
[^0]: Changes to the above dates cannot be ruled out.
We therefore recommend visiting our website to check specific financial dates at www.etringklinger.de/en/investor-relations/financial-calendar
For trade fairy please visit our websites:
www.etringklinger.de/en/press/dates-events
www.etring.com/dates-events
eIringklinger
EIringKlinger AG
Max-Eylt-Straße 2
D-72581 Dettingen/Erms
Germany