GRAMMER AG — Interim / Quarterly Report 2021

Apr 28, 2021

ONE GRAMMER

Interim Management Statement January to March 2021

EBIT margin 4.5%

Operating EBIT margin 4.2%

Equity ratio 23.0%

Net profit 13.3 EUR million

Free cash flow -12.9 EUR million EBIT 22.6 EUR million Capital expenditure 9.0

EUR million

Company profile

GRAMMER AG is a globally active stock-listed manufacturer of seating systems and automotive interiors. The Commercial Vehicles Division develops and manufactures technologically sophisticated seating systems for commercial and offroad vehicles as well as for trains and buses. GRAMMER's Automotive Division engineers and produces high-quality headrests, center consoles, armrests and interior components as well as innovative thermoplastic components for carmakers and their OEMs. GRAMMER serves its customers worldwide with a workforce of around 14,000 employees in 20 countries.

1 On average 446 employees were accounted for by Central Services.

291.7 2 The consolidation effect of revenue between regions amounts to EUR 22.4 million.

Operating EBIT by region

AMERICAS -8.5 EUR million EMEA 18.8 EUR million

15.6 EUR million

APAC

Overview of business performance

• Significant recovery in business performance continued in Q1 2021, contrasting with impact from COVID-19 pandemic in Q1 2020
• Revenue and earnings performance benefited in first quarter from economic recovery in EMEA and APAC as well as from strong demand in Commercial Vehicles
• GRAMMER Group revenue increased by 10.7% in Q1 2021 to EUR 503.7 million (Q1 2020: EUR 454.9 million), with 4.9% recovery in Automotive and 24.6% revenue growth in Commercial Vehicles
• APAC generated revenue of EUR 103.2 million and year-on-year growth of 84.9% in Q1 2021 (Q1 2020: EUR 55.8 million)

• EMEA region achieved revenue of EUR 291.7 million in Q1 2021, with year-on-year growth of 4.8% (Q1 2020: EUR 278.3 million)

• AMERICAS generated revenue of EUR 131.2 million in Q1 2021 (Q1 2020: EUR 138.4 million), marking a year-on-year decrease of 5.2%

• Operating EBIT amounted to EUR 21.0 million in Q1 2021 (Q1 2020: EUR 0.4 million), corresponding to an operating EBIT margin of 4.2% (Q1 2020: 0.1%)
• GRAMMER Group EBIT came to EUR 22.6 million from January to March 2021 (Q1 2020: EUR –2.1 million)
• New reporting structure from January 1, 2021: Organizational structure realignment commencing 2020 now reflected in external reporting; the EMEA, AMERICAS and APAC regions are now the leading reportable business segments
• Guidance for 2021 confirmed: For the full year, the GRAMMER Group expects revenue of approximately EUR 1.8 billion (2020: EUR 1.7 billion) and operating EBIT of roughly EUR 65 million (2020: EUR –11.7 million)

Contents

Dashboard	2
Overview of business performance	3
A Interim Management Statement January to March 2021
1. Business environment	5
2. GRAMMER Group key figures	6
3. Business performance in the first quarter of 2021	7
4. Results of operations	7
5. Performance of regions	9
6. Assets, liabilities and financial position	10
7. Capital expenditure	10
8. Employees	11
9. Events subsequent to the reporting date	11
10. Opportunities and risks	11
11. Outlook	11
12. Forward-looking statements	11

B | Financial information January to March 2021

13. Consolidated Statement of Income	12
14. Consolidated Statement of Comprehensive Income	13
15. Consolidated Statement of Financial Position	14
16. Consolidated Statement of Cash Flows	16

Financial Calendar 2021/Contact/ Publisher's Information 18

A | Interim Management Statement January to March 2021

1. Business environment

Global economy and impacts of the COVID-19 pandemic

The COVID-19 pandemic plunged the global economy into a deep recession in 2020. After a sharp contraction in economic activity during the first half of the year, some of the resulting loss in output was offset in the second half. In what is now the second year of the COVID-19 pandemic, the global economy continues to present a very mixed picture across different sectors and regions. According to the IMF's April 2021 forecast, global economic output will grow by 6.0% over the year as a whole, as compared with a 3.3% decline last year. While industrial production and global trade have already almost fully recovered, the services sector remains in crisis mode in many countries around the world.

The US economy grew significantly in the second half of 2020 but did not fully recover from the spring 2020 recession triggered by the onset of the coronavirus pandemic. For the USA, the IMF forecasts year-on-year growth of 6.4% in 2021 as a whole.

Notably China and the other Asian countries show a positive trend in economic activity. In China, the largest APAC market, the IMF expects economic output to grow by 8.4% in 2021.

The current resurgence of COVID-19 infection rates in many countries around the world, coupled with significantly tougher measures to contain the third wave of infection, may have impacted economic activity in the first quarter of 2021, especially in the eurozone. This could thus delay or slow down economic recovery. However, a slump like the one seen in spring 2020 is not anticipated. Some manufacturing industries also face challenges due to capacity constraints with regard to certain raw materials and intermediate goods such as semiconductors. For the eurozone as a whole, the IMF expects gross domestic product to increase by 4.4% year-on-year.

The performance of the German economy as part of the eurozone will also be affected by the onward path of the COVID-19 pandemic as well as by measures to contain it. The IMF anticipates that economic output in Germany will grow by 3.6% in the full year 2021.

Business environment for automotive industry and Commercial Vehicles

According to market data published by IHS in April, strong economic growth in the APAC region resulted in 10.6% more vehicles being produced worldwide in the first quarter of 2021 than in the same quarter of the previous year. The APAC region saw production increase by 27.4%, with most of the growth resulting from the positive trend in China. There, production figures rose by 70.9% in the first quarter of 2021 relative to the same quarter last year, which was heavily impacted by factory shutdowns due to COVID-19.

In EMEA and AMERICAS, the automotive industry and its suppliers continue to be affected by the ongoing COVID-19 pandemic and the worldwide supply bottlenecks with semiconductors. Production in the EMEA region was 3.5% down in the first three months of 2021, while IHS data for April indicated a 4.3% yearon-year shortfall in the AMERICAS region.

The economy is expected to recover in most parts of the world over the full year 2021. According to LMC, the global truck market grew in the first quarter by 40.3% year-on-year. This improvement relative to the same quarter of the previous year was mainly driven by the APAC region, which recorded the strongest growth at 69.3%. For China, LMC reported 92.0% growth in truck production. Allowance must, however, be made for the fact that the figures for the previous year were exceptionally low due to COVID-19-related factory closures.

The AMERICAS region saw a slight increase of 0.7% in the first quarter of 2021, while LMC recorded a 6.8% decline in the production figures for the EMEA region.

2. GRAMMER Group key figures

GRAMMER Group key figures (IFRS)

EUR m				EUR m				EUR m
	01–03 2021	01–03 2020	2020		01–03 2021	01–03 2020	2020				Decem
Group revenue	503.7	454.9	1,710.7	Consolidated					March 31,	March 31,	ber 31,
EMEA revenue	291.7	278.3	965.8	statement of					2021	2020	2020
AMERICAS				financial position				Share data
revenue	131.2	138.4	476.6	Total assets	1,427.0	1,423.1	1,376.4	Price (Xetra
APAC revenue	103.2	55.8	339.2	Equity	328.2	363.4	302.2	closing price
				Equity ratio				in EUR)	25.50	19.20	19.90
Consolidated				(in %)	23.0	25.5	22.0	Market
Statement of				Net financial				capitalization
Income				liabilities	311.3	332.0	287.1	(in EUR m)	388.6	242.1	303.2
EBITDA	43.2	19.5	41.7	Gearing (in %)	94.9	91.3	95.0	Earnings per share	0.88	–0.80	–5.10
EBITDA margin
(in %)	8.6	4.3	2.4	Consolidated
EBIT	22.6	–2.1	–46.1	Statement of
EBIT margin				Cash Flows
(in %)	4.5	–0.5	–2.7	Capital expendi
Operating EBIT	21.0	0.4	–11.7	ture (excluding
Operating EBIT				financial assets)	9.0	19.5	83.8
margin				Depreciation and
(in %)	4.2	0.1	–0.7	amortization	20.6	21.6	87.8
Earnings before				Free cash flow	–12.9	–53.4	–36.3
taxes	17.4	–14.1	–70.7
Net profit/loss	13.3	–9.8	–64.7	Employees
				(number, average)	14,204	14,709	14,192

New reporting structure from January 1, 2021

The realignment of the organizational structure commencing 2020 is now reflected in external reporting. Effective January 1, 2021, GRAMMER AG made fundamental changes to its management and resource allocation structure. The regions AMERICAS, APAC and EMEA have been designated as the leading internal reporting structures and now comprise the reportable business segments. Automotive and Commercial Vehicles, the previous reportable segments, are now two divisions, focusing on the development and implementation of the global market, customer and product strategies. The global functions – the corporate departments – support the three regions and the two divisions as before by providing systems, standards and policies together with specified services such as in research and development. The revenue by region published in the 2020 Annual Report does not correspond to the comparative figures for 2020 provided in this interim management statement, which additionally include the revenue with the other reportable segments because of the change in segment reporting.

3. Business performance in the first quarter of 2021

GRAMMER Group revenue came to EUR 503.7 million in the first quarter of 2021 (Q1 2020: EUR 454.9 million), an increase of 10.7% year-on-year. This means that the marked recovery in business performance from the second half of 2020 continued in the first quarter of 2021, in contrast to the first half of 2020, which was heavily impacted by the effects of the COVID-19 pandemic.

The GRAMMER Group's positive revenue performance in the first quarter of this year was driven mainly by significant revenue growth in the APAC and EMEA regions. Compared to the prior-year quarter, which was impacted by the effects of the COVID-19 pandemic, revenue in the APAC region increased by 84.9% to EUR 103.2 million (Q1 2020: EUR 55.8 million). Revenue in the EMEA region increased by 4.8% to EUR 291.7 million (Q1 2020: EUR 278.3 million). Revenue in the AMERICAS region decreased by –5.2% to EUR 131.2 million (Q1 2020: EUR 138.4 million).

Implementation of the restructuring measures launched in fiscal year 2020 continued as planned in the first quarter of 2021. These include the consolidation of plant locations in Europe and North America as well as a reduction of the workforce by roughly 300 administrative positions by mid 2021. With the aid of the voluntary redundancy program adopted for this purpose, GRAMMER has already achieved, in a socially responsible manner, the target of a sustainable reduction in structural costs by 2021. We also continued to systematically implement the strict cost management measures from last year in the first quarter of 2021.

Both the positive revenue trend and the favorable product mix combined with ongoing, effective implementation of the cost and process optimization measures made for a substantial increase in earnings. The GRAMMER Group's operating EBIT went up significantly in the first quarter of 2021 to EUR 21.0 million (Q1 2020: EUR 0.4 million), corresponding to an operating EBIT margin of 4.2% (Q1 2020: 0.1%). This figure is adjusted for EUR 2.2 million in positive currency translation effects as well as for EUR 0.6 million in directly attributable costs of corona-related protection and response measures.

4. Results of operations

GRAMMER Group revenue

GRAMMER AG increased Group revenue to EUR 503.7 million in the first quarter of 2021 (Q1 2020: EUR 454.9 million), corresponding to a year-on-year increase of 10.7%. Both the Automotive Division and the Commercial Vehicles Division contributed to the increase. Revenue in the Automotive Division increased by 4.9% to EUR 336.2 million, while revenue in the Commercial Vehicles Division rose even more strongly by 24.6% to EUR 167.5 million.

The positive revenue performance was driven mainly by growth in the APAC and EMEA regions.

Revenue performance by region and division

EUR m
	GRAMMER Group		EMEA			AMERICAS			APAC
	01–03 2021	01–03 2020	Change	01–03 2021	01–03 2020	Change	01–03 2021	01–03 2020	Change	01–03 2021	01–03 2020	Change
Automotive	336.2	320.5	4.9%	164.6	168.7	–2.4%	112.5	119.6	–5.9%	64.2	37.1	73.0%
Commercial Vehicles	167.5	134.4	24.6%	127.1	109.6	16.0%	18.7	18.8	–0.5%	39.0	18.7	108.6%
Total	503.7	454.9	10.7%	291.7	278.3	4.8%	131.2	138.4	–5.2%	103.2	55.8	84.9%

GRAMMER Group earnings

GRAMMER Group Condensed Consolidated Statement of Income

EUR k
	01–03	01–03
	2021	2020	Change
Revenue	503,717	454,949	48,768
Cost of sales	–441,694	–413,828	–27,866
Gross profit	62,023	41,121	20,902
Selling expenses	–6,254	–9,301	3,047
Administrative
expenses	–36,073	–37,369	1,296
Other operating
income	2,924	3,435	–511
Earnings before
interest and taxes
(EBIT)	22,620	–2,114	24,734
Financial result	–5,241	–12,034	6,793
Earnings before
taxes	17,379	–14,148	31,527
Income taxes	–4,049	4,315	–8,364
Net profit/loss	13,330	–9,833	23,163

Derivation of operating EBIT

EUR m
	01–03 2021	01–03 2020	Change
EBIT	22.6	–2.1	24.7
Currency translation effects	–2.2	2.5	–4.7
Costs of corona related protection and
response measures	0.6	0.0	0.6
Operating EBIT	21.0	0.4	20.6

Group earnings before interest and taxes (EBIT) came to EUR 22.6 million in the first quarter of 2021 (Q1 2020: EUR –2.1 million). The EMEA region (EUR 20.4 million) and the APAC region (EUR 15.6 million) contributed positively to earnings, while the AMERICAS region reported negative EBIT at EUR –8.6 million.

Operating EBIT was significantly higher than in the previous year at EUR 21.0 million, with an operating EBIT margin of 4.2% (Q1 2020: EUR 0.4 million and 0.1% operating EBIT margin). This figure is adjusted for EUR 2.2 million in positive currency translation effects as well as for EUR 0.6 million in directly attributable costs of corona-related protection and response measures.

.

5. Performance of regions

EMEA

EMEA region key figures

EUR m

	01–03 2021	01–03 2020	Change
Revenue	291.7	278.3	13.4
EBIT	20.4	3.6	16.8
EBIT margin (in %)	7.0	1.3	5.7 pp
Operating EBIT	18.8	5.8	13.0
Operating EBIT margin (in %)	6.4	2.1	4.3 pp
Capital expenditure (excluding financial assets)	4.9	6.4	–1.5
Employees (number, average)	7,690	8,022	–332

AMERICAS AMERICAS region key figures

EUR m

	01–03 2021	01–03 2020	Change
Revenue	131.2	138.4	–7.2
EBIT	–8.6	–7.2	–1.4
EBIT margin (in %)	–6.6	–5.2	–1.4 pp
Operating EBIT	–8.5	–6.8	–1.7
Operating EBIT margin (in %)	–6.5	–4.9	–1.6 pp
Capital expenditure (excluding financial assets)	2.7	6.0	–3.3
Employees (number, average)	4,758	4,742	16

APAC APAC region key figures EUR m 01–03 2021 01–03 2020 Change

Revenue	103.2	55.8	47.4
EBIT	15.6	3.4	12.2
EBIT margin (in %)	15.1	6.1	9.0 pp
Operating EBIT	15.6	3.4	12.2
Operating EBIT margin (in %)	15.1	6.1	9.0 pp
Capital expenditure (excluding financial assets)	1.0	0.9	0.1
Employees (number, average)	1,310	1,294	16

The EMEA region generated revenue of EUR 291.7 million in the first quarter of 2021 (Q1 2020: EUR 278.3 million), which corresponds to growth of 4.8%. This was mostly driven by the positive performance of the Commercial Vehicles Division, which generated 16.0% revenue growth to EUR 127.1 million (Q1 2020: EUR 109.6 million). As the region where the Group's highest-revenue companies are located, EMEA thus continued the positive trend from the second half of 2020.

EMEA EBIT increased significantly to EUR 20.4 million in the first quarter of 2021 (Q1 2020: EUR 3.6 million). This is largely due to the measures taken to reduce fixed costs as well as to the good product mix. The EBIT margin rose by 5.7 percentage points to 7.0% (Q1 2020: 1.3%).

Operating EBIT increased significantly to EUR 18.8 million (Q1 2020: EUR 5.8 million). The operating EBIT margin consequently went up by 4.3 percentage points to 6.4% (Q1 2020: 2.1%).

The AMERICAS region recorded a single-digit percentage decrease in revenue by 5.2% to EUR 131.2 million in the first quarter of 2021 (Q1 2020: EUR 138.4 million). This was due to the lower number of orders from OEMs because of the global supply shortage of semiconductors. Revenue in the Automotive Division was thus down 5.9% to EUR 112.5 million (Q1 2020: EUR 119.6 million), while the Commercial Vehicles Division was on the same level as the previous year's quarter at EUR 18.7 million.

AMERICAS EBIT came to EUR –8.6 million (Q1 2020: EUR –7.2 million). The EBIT margin consequently fell by 1.4 percentage points to –6.6% (Q1 2020: –5.2%).

Operating EBIT came to EUR –8.5 million in the first quarter of 2021 (Q1 2020: EUR –6.8 million). The operating EBIT margin amounted to –6.5% (Q1 2020: –4.9%), 1.6 percentage points down on the same quarter of the previous year.

APAC revenue increased by 84.9% in the first quarter to EUR 103.2 million (Q1 2020: EUR 55.8 million). Relating to both divisions, this significant increase reflects higher production orders in the first quarter of 2021 combined with the comparatively very low sales figures due to pandemic-related production shutdowns in the same quarter of the previous year. The revenue growth results from positive performance in both divisions. The Automotive Division reported a year-on-year increase of 73.0% to EUR 64.2 million (Q1 2020: EUR 37.1 million), while revenue in the Commercial Vehicles Division more than doubled, rising 108.6% to EUR 39.0 million (Q1 2020: EUR 18.7 million).

APAC region EBIT rose to EUR 15.6 million (Q1 2020: EUR 3.4 million); the EBIT margin increased by 9.0 percentage points to 15.1% (Q1 2020: 6.1%).

Operating EBIT likewise increased significantly to EUR 15.6 million (Q1 2020: EUR 3.4 million), with the operating EBIT margin rising by 9.0 percentage points year-on-year to 15.1% (Q1 2020: 6.1%).

6. Assets, liabilities and financial position

Consolidated statement of financial position GRAMMER Group Condensed Consolidated Statement of Financial Position

EUR k
		Decem
	March 31, 2021	ber 31, 2020	Change
Non-current
assets	800,904	799,583	1,321
Current assets	626,059	576,841	49,218
Assets	1,426,963	1,376,424	50,539
Equity	328,167	302,210	25,957
Non-current
liabilities	509,598	524,189	–14,591
Current liabilities	589,198	550,025	39,173
Equity and
liabilities	1,426,963	1,376,424	50,539

The GRAMMER Group's total assets increased slightly by EUR 50.6 million to EUR 1,427.0 million (December 31, 2020: EUR 1,376.4 million).

Non-current assets remained nearly constant at EUR 800.9 million (December 31, 2020: EUR 799.6 million). Intangible assets increased by 1.6% to EUR 183.9 million (December 31, 2020: EUR 180.9 million), while property, plant and equipment decreased slightly to EUR 444.8 million (December 31, 2020: EUR 446.7 million).

Current assets rose by 8.5% to EUR 626.1 million (December 31, 2020: EUR 576.8 million), mainly due to increases in current trade accounts receivable by 21.3% to EUR 289.8 million (December 31, 2020: EUR 238.9 million), inventories by 12.8% to EUR 174.4 million (December 31, 2020: EUR 154.6 million) and other current assets by 19.4% to EUR 33.9 million (December 31, 2020: EUR 27.3 million). Conversely, cash and shortterm deposits went down by 34.0% to EUR 59.3 million as of March 31, 2021 (December 31, 2020: EUR 89.8 million). This mainly reflects the increased capital need as a result of the high order volume.

Equity increased in the first quarter of 2021 by around EUR 26.0 million or 8.6% to EUR 328.2 million (December 31, 2020: EUR 302.2 million) due to net profit of EUR 13.3 million and other comprehensive income of EUR 12.7 million. The equity ratio consequently rose by 1.0 percentage points to 23.0% (December 31, 2020: 22.0%).

Non-current liabilities decreased by EUR 14.6 million or 2.8% to EUR 509.6 million (December 31, 2020: EUR 524.2 million). This was mostly due to a 5.0% reduction in non-current financial liabilities to EUR 240.7 million (December 31, 2020: EUR 253.3 million).

Current liabilities increased by EUR 39.2 million or 7.1% to EUR 589.2 million (December 31, 2020: EUR 550.0 million). This mainly resulted from an increase in other current liabilities by 25.4% to EUR 117.3 million (December 31, 2020: EUR 93.6 million), current trade accounts payable by 3.4% to EUR 259.3 million (December 31, 2020: EUR 250.9 million) and current financial liabilities by 5.1% to EUR 129.9 million (December 31, 2020: EUR 123.6 million).

7. Capital expenditure

In order to safeguard our financial resources, we restricted capital spending in the first quarter of 2021 to project-related expenditure. This led to a significant reduction in total capital expenditure to EUR 9.0 million (Q1 2020: EUR 19.5 million).

In the EMEA region, first-quarter capital expenditure totaled EUR 4.9 million (Q1 2020: EUR 6.4 million) and mainly related to new production lines for product ramp-ups as well as development work.

Capital expenditure in the AMERICAS region was mainly on new production lines for product ramp-ups. In the first three months, capital expenditure in the region came to EUR 2.7 million (Q1 2020: EUR 6.0 million).

Capital expenditure from January to March in the APAC region totaled EUR 1.0 million (Q1 2020: EUR 0.9 million) and for the most part constituted replacement expenditure.

The year-on-year reduction at Central Services is mainly due to lower expenditure for the completion and interior outfitting of the GRAMMER Campus in Ursensollen near Amberg (Germany). All units were completed in September 2020 and the employees have moved into their new offices.

Capital expenditure

EUR m

	01–03 2021	01–03 2020	Change
EMEA	4.9	6.4	–1.5
AMERICAS	2.7	6.0	–3.3
APAC	1.0	0.9	0.1
Central Services	0.4	6.2	–5.8
GRAMMER Group	9.0	19.5	–10.5

8. Employees

In the quarter ending March 31, 2021, GRAMMER had a global average of 14,204 employees (Q1 2020: 14,709). This corresponds to a decrease of 3.4% relative to the previous year. Out of the total, an average of 1,310 were employed in the APAC region (Q1 2020: 1,294), an average of 7,690 in the EMEA region (Q1 2020: 8,022) and an average of 4,758 in the AMERICAS region (Q1 2020: 4,742).

Average employees

	01–03 2021	01–03 2020	Change
EMEA	7,690	8,022	–332
AMERICAS	4,758	4,742	16
APAC	1,310	1,294	16
Central Services	446	651	–205
GRAMMER Group	14,204	14,709	–505

9. Events subsequent to the reporting date

On April 13, 2021, GRAMMER AG signed an agreement to establish a new joint venture with FAW Group. Under a joint venture with a subsidiary of China's largest commercial vehicle manufacturer, we will produce high-quality truck seats for use in many of FAW Group's truck model platforms. The two companies will benefit from the ongoing trend in China toward state-of-the-art, ergonomic truck driver seats that provide a key differentiating factor for OEMs in what is the world's largest commercial vehicle market. GRAMMER AG will hold a 60% majority stake in the joint venture and will fully include it in the consolidated financial statements.

10. Opportunities and risks

The opportunities and risks we referred to and described in detail in the Management Report section of the Annual Report as of December 31, 2020 continue to apply.

We are thus monitoring developments and the economic impact of the COVID-19 pandemic very closely, as these are associated with material risks that are currently very difficult to assess. Specially established crisis management teams analyze the situation on the market as well as that of our customers and suppliers on an ongoing basis and propose specific measures to management when the need for action arises. In addition, we also monitor developments in the price of steel as well as the global supply situation for semiconductors in order to be able to respond early to shifting conditions.

11. Outlook

GRAMMER published its guidance for fiscal year 2021 on March 31, 2021. That guidance continues to apply.

We thus expect that fiscal year 2021 will see a continuation of the challenging economic conditions, especially in the markets relevant to the GRAMMER Group. The forward path of the COVID-19 pandemic in individual countries coupled with the trend as regards the global shortages in the semiconductor industry will also have a significant impact on the predicted economic recovery. Overall, however, we anticipate that revenue will recover to around EUR 1.8 billion in fiscal year 2021 (2020: EUR 1.7 billion). Based on the budgeting for the three regions relevant to GRAMMER's business performance, we expect operating EBIT of roughly EUR 65 million in 2021 (2020: EUR –11.7 million). Operating EBIT will improve in 2021, mainly as a result of the economic recovery and the outcomes of measures implemented to raise efficiency and reduce costs. In fiscal year 2020, operating EBIT was hit very hard by the impacts of the global COVID-19 pandemic as well as by costs due to various one-time effects.

12. Forward-looking statements

This interim management statement contains forward-looking statements based on current assumptions and estimates made by GRAMMER's management of future trends. Such statements refer to periods in the future or are characterized by terms such as "expect", "predict", "intend", "forecast", "plan", "estimate", "expect" or similar terms. Such statements are subject to risks and uncertainties which GRAMMER can neither estimate nor influence with any precision, e.g. future market conditions and the macroeconomic environment, the behavior of other market participants, the successful integration of newly acquired companies, the materialization of expected synergistic benefits and government actions. If any of these or other factors of uncertainty or imponderabilities occur or if any of the assumptions on which these statements are based prove to be incorrect, actual results could differ materially from the results expressed or implied in these statements. GRAMMER neither intends nor is under any obligation to update any forward-looking statements in light of any changes occurring subsequent to publication of this document.

B | Financial information January to March 2021

13. Consolidated Statement of Income

January 1 – March 31, 2021/2020

EUR k
	01–03 2021	01–03 2020
Revenue	503,717	454,949
Cost of sales	–441,694	–413,828
Gross profit	62,023	41,121
Selling expenses	–6,254	–9,301
Administrative expenses	–36,073	–37,369
Other operating income	2,924	3,435
Earnings before interest and taxes (EBIT)	22,620	–2,114
Financial income	352	358
Financial expenses	–5,337	–4,530
Other financial result	–256	–7,862
Earnings before taxes	17,379	–14,148
Income taxes	–4,049	4,315
Net profit/loss	13,330	–9,833
Of which attributable to:
Shareholders of the parent company 1	13,237	–9,770
Non-controlling interests	93	–63
Net profit/loss	13,330	–9,833
Earnings per share
Basic/diluted earnings per share in EUR	0.88	–0.80

1 Of which EUR 155 thousand relates to compensation claims of the hybrid loan lender in fiscal year 2021.

14. Consolidated Statement of Comprehensive Income

January 1 – March 31, 2021/2020

EUR k
	01–03 2021	01–03 2020
Net profit/loss	13,330	–9,833
Amounts that will not be reclassified to profit or loss in future periods
Actuarial gains/losses (–) under defined benefit plans
Gains/losses (–) arising in the current period	0	21,772
Tax expenses (–)/tax income	0	–6,358
Actuarial gains/losses (–) under defined
benefit plans (after tax)	0	15,414
Total amounts that will not be reclassified to profit or loss in future periods	0	15,414
Amounts that will be reclassified to profit or loss in future periods when certain conditions are met
Gains/losses (–) from currency translation of foreign subsidiaries
Gains/losses (–) arising in the current period	12,517	12,199
Gains/losses (–) from currency translation of foreign subsidiaries (after tax)	12,517	12,199

EUR k

	01–03 2021	01–03 2020
Gains/losses (–) from cash flow hedges
Gains/losses (–) arising in the current period	–1,317	–3,627
Plus/minus (–) amounts reclassified to profit or loss	–149	–347
Tax expenses (–)/tax income	342	1,087
Gains/losses (–) from cash flow hedges (after tax)	–1,124	–2,887
Gains/losses (–) from net investments in foreign operations
Gains/losses (–) arising in the current period	1,511	–18,494
Tax expenses (–)/tax income	–277	5,640
Gains/losses (–) from net investments in
foreign operations (after tax)	1,234	–12,854
Total amounts that will be reclassified to profit or loss in future periods when certain conditions are met	12,627	–3,542
Other comprehensive income	12,627	11,872
Total comprehensive income after tax	25,957	2,039
Of which attributable to:
Shareholders of the parent company1	25,907	2,105
Non-controlling interests	50	–66

1 Of which EUR 155 thousand relates to compensation claims of the hybrid loan lender in fiscal year 2021.

15. Consolidated Statement of Financial Position

as of March 31, 2021 and December 31, 2020

Assets

EUR k
	March 31, 2021	December 31, 2020
Property, plant and equipment	444,778	446,737
Intangible assets	183,955	180,959
Investments measured at equity	970	859
Other financial assets	6,844	6,871
Deferred tax assets	64,191	64,217
Other assets	36,411	36,702
Contract assets	63,755	63,238
Non-current assets	800,904	799,583
Inventories	174,424	154,620
Current trade accounts receivable	289,772	238,884
Other current financial assets	3,437	4,027
Current income tax receivables	6,103	5,349
Cash and short-term deposits	59,255	89,838
Other current assets	33,855	27,284
Current contract assets	59,213	56,839
Current assets	626,059	576,841
Total assets	1,426,963	1,376,424

Equity and liabilities

EUR k

	March 31, 2021	December 31, 2020
Subscribed capital	39,009	39,009
Capital reserve	163,033	163,033
Own shares	–7,441	–7,441
Retained earnings	212,176	199,094
Cumulative other comprehensive income	–97,572	–110,242
Equity attributable to shareholders of the
parent company	309,205	283,453
Hybrid loan	19,734	19,579
Non-controlling interests	–772	–822
Equity	328,167	302,210
Non-current financial liabilities	240,657	253,255
Trade accounts payable	388	543
Other financial liabilities	53,662	54,443
Other liabilities	1,260	1,260
Retirement benefits and similar obligations	164,924	164,456
Deferred tax liabilities	46,350	46,859
Contract liabilities	2,357	3,373
Non-current liabilities	509,598	524,189

EUR k

	March 31, 2021	December 31, 2020
Current financial liabilities	129,880	123,628
Current trade accounts payable	259,289	250,861
Other current financial liabilities	16,041	16,520
Other current liabilities	117,286	93,550
Current income tax liabilities	5,794	6,448
Provisions	59,342	57,858
Current contract liabilities	1,566	1,160
Current liabilities	589,198	550,025
Total liabilities	1,098,796	1,074,214
Total equity and liabilities	1,426,963	1,376,424

16. Consolidated Statement of Cash Flows

January 1 – March 31, 2021/2020

EUR k	01–03 2021	01–03 2020
1. Cash flow from operating activities
Earnings before taxes	17,379	–14,148
Reconciliation of earnings before taxes with cash flow from operating activities
Depreciation and impairment of property, plant and equipment	16,786	17,338
Amortization and impairment of intangible assets	3,779	4,271
Gains (–)/losses from the disposal of assets	–62	191
Other non-cash changes	18,644	3,235
Financial result	5,241	12,035
Changes in operating assets and liabilities
Decrease/increase (–) in trade accounts receivable and other assets	–59,658	16,936
Decrease/increase (–) in inventories	–19,805	–4,924
Decrease (–)/increase in provisions and retirement benefit provisions	–12,707	–735
Decrease (–)/increase in accounts payable and other liabilities	30,274	–63,349
Income taxes paid	–5,910	–7,787
Cash flow from operating activities	–6,039	–36,937
2. Cash flow from investing activities
Purchases
Purchase of property, plant and equipment	–6,828	–16,575
Purchase of intangible assets	–1,123	–776
Disposals
Disposal of property, plant and equipment	388	246
Disposal of intangible assets	12	22
Disposal of financial assets	344	268
Interest received	352	358
Cash flow from investing activities	–6,855	–16,457

	01–03 2021	01–03 2020
3. Cash flow from financing activities
Payments received from hybrid loan	0	19,148
Payments received from raising financial liabilities	20,993	102,274
Payments made for the settlement of financial liabilities	–33,731	–94,444
Payments made for the settlement of lease liabilities	–4,600	–5,612
Interest paid	–4,595	–3,606
Cash flow from financing activities	–21,933	17,760
4. Cash and cash equivalents at the end of the period
Changes in cash and cash equivalents recognized in the cash flow statement (sub-total of items 1-3)	–34,827	–35,634
Effects of exchange rate differences on cash and cash equivalents	–2,148	–3,458
Cash and cash equivalents as of January 1	55,372	123,654
Cash and cash equivalents as of March 31	18,397	84,562
5. Analysis of cash and cash equivalents
Cash and short-term deposits	59,255	110,203
Bank overdrafts (including current liabilities under factoring contracts)	–40,858	–25,641
Cash and cash equivalents as of March 31	18,397	84,562

Financial Calendar 20211

Important dates for shareholders and analysts

October

Contact

GRAMMER AG

Grammer-Allee 2 92289 Ursensollen, Germany

P.O. Box 14 54 92204 Amberg, Germany

Phone +49 (0) 96 21 66 0 Fax +49 (0) 96 21 66 31000 www.grammer.com

Investor Relations

Tanja Bücherl Phone +49 (0) 96 21 66 2113 Fax +49 (0) 96 21 66 32113 Email investor-relations@grammer.com

Publisher's Information

Publisher

GRAMMER AG P.O. Box 14 54 92204 Amberg, Germany

Release date April 28, 2021

Concept, layout Kirchhoff Consult AG 22765 Hamburg, Germany

The photos taken for this year's Interim Management Statement were produced in strict compliance with the hygiene regulations mandated to contain the COVID-19 pandemic. Some photos were produced before the start of the pandemic.

1 All dates are provisional. Subject to change without notice.

April

GRAMMER AG

Grammer-Allee 2 92289 Ursensollen, Germany Phone +49 (0) 96 21 66 0 www.grammer.com