PSI Software SE

Interim / Quarterly Report • Sep 16, 2021

Report on the 1st Six Months of 2021

			PSI Group Data as per 30 March 2021 at a Glance (IFRS)
--	--	--	--------------------------------------------------------	--

	01/01-30/06/21 in KEUR	01/01-30/06/20 in KEUR	Change in KEUR	Change in %
Revenues	117,117	104,853	+12,264	+11.7
Operating Result	10,133	5,413	+4,720	+87.2
Result before income taxes	9,626	5,099	+4,527	+88.8
Net result	7,034	3,723	+3,311	+88.9
Cash and cash equivalents	45,370	50,377	–5,007	–9.9
Employees on 30 March	2,145	1,995	+150	+7.5
Revenue/Employee	54.6	52.6	+2.0	+3.9

Interim Management Report

Business Development

Earnings

The PSI Group increased new orders by 3.5% to 146 million euros (30 June 2020: 141 million euros) in the first six months. The order backlog on 30 June 2021 was, at 174 million euros, just about the same as the previous year (30 June 2020: 176 million euros). Group sales improved by 11.7% to 117.1 million euros (30 June 2020: 104.9 million euros), with the energy business making the greatest contribution to growth in the second quarter. The EBIT leapt by 87% to 10.1 million euros (30 June 2020: 5.4 million euros), the group net result was significantly improved to 7.0 million euros (30 June 2020: 3.7 million euros).

Energy Management (energy networks, energy trading, public transportation) achieved 15.4% higher sales of 64.1 million euros (30 June 2020: 55.5 million euros) and a 65% higher EBIT of 4.0 million euros (30 June 2020: 2.4 million euros). The grid business was able to continue increasing its volume of new orders with orders from transmission and distribution system operators in the second quarter, although orders from Russia are only expected after the Duma elections. Demand for software for electro-bus depots remains strong. The network planning software developer NEPLAN AG, which has belonged to PSI since the fourth quarter of 2020, has collaborated in a number of projects and provided the best EBIT margin of the segment. A steel manufacturer has ordered the energy and CO2-trading software PSImarket. PSI expects a significant increase in business from the business for software that calculates (PSIreko), certifies (Blockchain) and trades (PSImarket) CO2 certificates.

Sales in Production Management (metals, industry, logistics) in the first six months were, at 53.0 million euros, 7.5% above the previous year (30 June 2020: 49.3 million euros). The business segment, whose products are already completely based on the group platform, increased by 80% to 6.7 million euros (30 June 2020: 3.7 million euros). The metals business has not yet reached the volume of new orders of the previous year, as a result of the boom in the price of steel, however, expects a significant increase in new orders with good margins. The automotive and logistics segments also continue to grow their sales and profits.

Financial Position

At 11.3 million euros, cash flow from operating activities was 41% below the comparable figure for the previous year (30 June 2020: 19.4 million euros), due in particular to growth financing. After payment of the dividend, which was increased by 4 million euros compared with the previous year, cash and cash equivalents amounted to 45.4 million euros (30 June 2020: 50.4 million euros). Following the two acquisitions last year, PSI is examining further acquisitions in the core business.

Assets

Compared to 31 December 2020, there have not been any material changes in the Group's assets.

Personnel Development

The number of employees in the group increased to 2,145 (30 June 2020: 1,995), in particular due to new hires in Poland, Germany and the USA.

PSI-Shares

The PSI stock ended the 1st six months of 2021 with a final price of 33.60 euros 37.7% above the final 2020 price of 24.40 euros. In the same period, the technology index TecDAX recorded an increase of 10.9%.

Risk Report

The estimate of the corporate risk has not changed since the Annual Report for 31 December 2020.

Outlook

PSI once again invested in the app store and in B2B multi-cloud technology in the second quarter. This means that in the future PSI products can be delivered automatically not only to the PSI Cloud, but also to all standard cloud technologies of the group's customers. After delivery, the software products are adapted to the customer's operations by the customer's IT department and specialist departments, by partners and PSI consultants at runtime using intuitive workflow and dialog design tools, and then rolled out across all workstations and technical systems. With trial projects in production and logistics progressing well, a first partner in the steel industry, a Brazilian system integrator, has now also placed an order via the app store.

Preliminary inquiries from the steel and automotive industries continue to pick up but have not yet been reflected in order intake. In the energy business, steadily growing demand continues to be marked by the trend toward electrification and the current redispatch boom of the electricity distribution networks.

PSI is working on improving the margin in Energy Management, especially with more common parts and further product migration to the PSI platform. As planned, PSI will invest more than 30 million euros this year for the functionality of energy and transportation shift as well as for the cloud and web rollout of the group platform. The PSI Board raises the growth target from at least 5% to at least 10%. The EBIT target of more than 20 million euros will also be exceeded. The increase in the earnings target can only be substantiated with the orders from the third quarter.

Group Balance Sheet

from 1 January 2021 until 30 June 2021 according to IFRS

6 Month Report	Annual Report
01/01-30/06/21	01/01-31/12/20
KEUR	KEUR
37,924	38,928
69,955	70,199
440	440
13,263	15,208
121,582	124,775
10,306	8,661
35,532	29,209
54,988	47,705
9,292	8,567
45,370	40,482
155,488	134,624
277,070	259,399

Total Equity and Liabilities

Total equity and liabilities	277,070	259,399
	84,903	72,079
Short-term financial liabilities	0	65
Liabilities from leases	5,966	5,498
Liabilities from long-tem development contracts	13,139	13,930
Other liabilities	49,159	34,609
Trade payables	16,639	17,977
Current liabilities
	89,394	86,997
Long-term financial liabilities	4,236	168
Liabilities from leases	17,662	19,132
Other liabilities	3,009	2,555
Deferred tax liabilities	9,039	8,726
Pension provisions and similar obligations	55,448	56,416
Non-current liabilities
	102,773	100,323
Net retained profits	53,284	50,954
Other reserves	–25,755	–26,033
Reserve for own stock	–78	80
Capital reserves	35,137	35,137
Subscribed capital	40,185	40,185
Equity

Group Income Statement

from 1 January 2021 until 30 June 2021 according to IFRS

	Quarterly Report II		6 Month Report
	01/04/21- 30/06/21 KEUR	01/04/20- 30/06/20 KEUR	01/01/21- 30/06/21 KEUR	01/01/20- 30/06/20 KEUR
Sales Revenues	60,979	53,965	117,117	104,853
Other operating income	2,811	2,440	5,646	4,356
Cost of materials	–9,221	–6,953	–13,819	–14,391
Personnel expenses	–39,415	–34,966	–78,902	–69,037
Depreciation and amortisation	–3,327	–2,905	–6,320	–5,727
Other operating expenses	–6,045	–8,627	–13,589	–14,641
Operating result	5,782	2,954	10,133	5,413
Net finance result	–392	112	–507	–314
Result before income taxes	5,390	3,066	9,626	5,099
Income tax	–1,495	–855	–2,592	–1,376
Net result	3,895	2,211	7,034	3,723
Earnings per share (in Euro per share, basic)	0.25	0.14	0.45	0.24
Earnings per share (in Euro per share, diluted)	0.25	0.14	0.45	0.24
Weighted average shares outstanding (basic)	15,678,559	15,673,341	15,679,195	15,676,147
Weighted average shares outstanding (diluted)	15,678,559	15,673,341	15,679,195	15,676,147

Group comprehensive Income Statement

from 1 January 2021 until 30 June 2021 according to IFRS

	01/04/21- 30/06/21 KEUR	01/04/20- 30/06/20 KEUR	01/01/21- 30/06/21 KEUR	01/01/20- 30/06/20 KEUR
Net result	3,895	2,211	7.034	3,723
Currency translation foreign operations	–53	–398	278	–829
Net losses from cash flows hedges	0	0	0	0
Income tax effects	0	0	0	0
Group comprehensive result	3,842	1,813	7.312	2,894

Group Cash Flow Statement

from 1 January 2021 until 30 June 2021 according to IFRS

	6 Month Report 01/01-30/06/21 KEUR	6 Month Report 01/01-30/06/20 KEUR
CASHFLOW FROM OPERATING ACTIVITIES
Result before income taxes	9,626	5,099
Adjustments for non-cash expenses
Amortisation on intangible assets	1,189	1,172
Depreciation of property, plant and equipment	1,521	1,755
Depreciation of right-of-use assets under leases (IFRS 16)	2,977	2,800
Earnings from investments in associated companies	0	–300
Interest income	–13	–37
Interest expenses	452	551
Other non-cash income/expenses	32	0
	15,784	11,040
Changes of working capital
Inventories	–1,577	179
Trade receivables and receivables from
long-term development contracts	–13,041	2,273
Other current assets	–914	–3,331
Provisions	–1,062	–1,382
Trade payables	–1,705	–3,045
Other current liabilities	14,703	13,962
	12,188	19,696
Interest paid	–106	–48
Income taxes paid	–741	–275
Cash flow from operating activities	11,341	19,373
CASHFLOW FROM INVESTING ACTIVITIES
Additions to intangible assets	–933	–805
Additions to property, plant and equipment	–1,564	–1,595
Additions to investments in subsidiaries	0	–4
Cash received from distribution of associated companies	0	288
Interest received	13	37
Cash flow from investing activities	–2,484	–2,079
CASHFLOW FROM FINANCING ACTIVITIES
Dividends paid	–4,704	–784
Proceeds/repayments from/of borrowings	4,003	–373
Payments for the principal portion of lease liabilities (IFRS 16)	–2,932	–2,796
Interest paid in connection with leases (IFRS 16)	–212	–257
Outflows for share buybacks	–158	–92
Cash flow from financing activities	–4,003	–4,302
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD
Changes in cash and cash equivalents	4,855	12,992
Valuation-related changes in cash and cash equivalents	33	–1,271
Cash and cash equivalents at beginning of the period	40,482	38,656
Cash and cash equivalents at the end of the period	45,370	50,377

Statement of Changes in Equity

from 1 January 2021 until 30 June 2021 according to IFRS

	Number of shares issued	Share capital	Additional paid-in capital	Reserve for treasury stock	Other reserves	Accumulated results	Total
	Number	KEUR	KEUR	KEUR	KEUR	KEUR	KEUR
As of 1 January 2021	15,679,838	40,185	35,137	80	–26,033	50,954	100,323
Group comprehensive result after tax					278	7,034	7,312
Share buybacks	–5,647			–158			–158
Dividends paid						–4,704	–4,704
As of 30 June 2021	15,674,191	40,185	35,137	–78	–25,755	53,284	102,773

Shares held by Management Board and Supervisory Board as of 30 June 2021

	Shares on 31 March 2021	Shares on 31 March 2020
Management Board
Harald Fuchs	7,023	7,023
Dr, Harald Schrimpf	62,000	62,000
Supervisory Board
Andreas Böwing	0	0
Elena Günzler	1,976	1,962
Prof, Dr, Uwe Hack	600	600
Prof, Dr, Wilhelm Jaroni	0	0
Uwe Seidel	447	433
Karsten Trippel	111,322	111,322

Notes on the consolidated financial statements as of 30 June 2021

The Company

1. Business Activities and Legal Background

The business activities of PSI Software AG and its subsidiaries relate to the development and sale of software systems and products fulfilling the specific needs and requirements of its customers, particularly in the following industries and service lines: utilities, manufacturing, logistics and transportation. In addition, the Group provides services of all kinds in the field of data processing, sells electronic devices and operates data processing systems.

The PSI Group is divided into the core business segments energy management and production management. The company is listed in the Prime Standard segment of the Frankfurt stock exchange.

The company is exposed to a wide range of risks that are similar to other companies active in the dynamic technology sector. Major risks for the development of the PSI Group lie in the success with which it markets its software systems and products, competition from larger companies, the ability to generate sufficient cash flows for future business development as well as in individual risks regarding the integration of subsidiaries, organisational changes and the cooperation with strategic partners.

The condensed interim consolidated financial statements for the period from 1 January 2021 to 30 June 2021 were released for publication by a decision of the management on 26 July 2021.

The condensed interim consolidated financial statements for the period from 1 January 2021 to 30 June 2021 were produced in compliance with IAS 34 "Interim Financial Reporting". The condensed interim consolidated financial statements do not contain all the data and notes prescribed for the annual financial statements and should be read in conjunction with the consolidated financial statements for 31 December 2020.

2. Accounting and Valuation Principles

With regard to the principles of accounting and valuation and especially the application of International Financial Reporting Standards (IFRS) see the group consolidated financial statements for the financial year 2020.

3. Seasonal Influences on the Business Activities

Seasonal effects resulted in the PSI Group operations with regards to the receipt of maintenance revenues in the first quarter of the financial year (deferment of the influences on the result of corresponding incoming payments throughout the year) and significantly greater demand and project accounting in the fourth quarter of the financial year.

4. Changes in the Consolidation Group

Compared to 31 December 2020 there were no changes in the consolidation group.

5. Selected Individual Items

Cash and cash equivalents

	30 June 2021	31 December 2020
	KEUR	KEUR
Bank balances	43,202	39,327
Fixed term deposits	2,144	1,133
Cash	24	22
	45,370	40,482

Costs and estimated earnings in excess of billings on uncompleted contracts

Costs and estimated earnings in excess of billings on uncompleted contracts arise when revenues have been recorded but the amounts cannot be billed under the terms of the contracts. Such amounts are recoverable from customers upon various measures of performance, including achievement of certain milestones, completion of specified units or completion of the contract. Costs and estimated earnings contain directly allocable costs (labour cost and cost of services provided by third parties) as well as the appropriate portion of overheads including pro rata administrative expenses.

Costs and estimated earnings on uncompleted contracts and related amounts are billed as follows:

	30 June 2021 KEUR	31 December 2020 KEUR
Receivables from long-term
development contracts (gross)	152,260	135,835
Payments on account	–97,272	–88,130
Receivables from long-term
development contracts	54,988	47,705
Payments on account (gross)	110,411	102,060
Set off against contract revenue	–97,272	–88,130
Liabilities from long-term development contracts	13,139	13,930

Sales revenues

The sales revenues reported in the group income statement break down as follows:

	30 June 2021 KEUR	30 June 2020 KEUR
Software development	60,356	52,205
Maintenance	42,596	39,056
License fees	7,986	6,098
Merchandise	6,179	7,494
	117,117	104,853

Taxes on income

The main components of the income tax expenditure shown in the group income statement are added as follows:

	30 June 2021 KEUR	30 June 2020 KEUR
Effective taxes expenses
Effective tax expenses	–960	–720
Deferred taxes
Emergence and reversal of
temporary differences	–1,632	–656
Tax expenses	–2,592	–1,376

Segment Reporting

The development of the segment results can be found in the Group segment reporting.

Segments of the PSI Group:

• Energy management: Intelligent solutions for network operators in the fields of electricity, gas, district heating and pipelines as well as for public transport. Focal points are reliable and economically sound control system solutions for intelligent energy grid management and the safe operation of traffic infrastructures as well as trade and sales management in the liberalised energy market.
• Production Management: Software products and solutions for production planning, optimization and control as well as efficient logistics. Focuses are the optimization of the use of resources and the increase of efficiency, quality and profitability.

Group Segment Reporting

from 1 January 2021 until 30 June 2021 according to IFRS

	Energy Management		Management	Production	Reconciliation		PSI Group
	30/06/ 2021 TEUR	30/06/ 2020 TEUR	30/06/ 2021 TEUR	30/06/ 2020 TEUR	30/06/ 2021 TEUR	30/06/ 2020 TEUR	30/06/ 2021 TEUR	30/06/ 2020 TEUR
Sales revenues
Sales to external customers	64,114	55,537	53,003	49,316	0	0	117,117	104,853
Inter-segment sales	1,705	1,490	7,653	6,432	–9,358	–7,922	0	0
Segment revenues	65,819	57,027	60,656	55,748	–9,358	–7,922	117,117	104,853
Operating result before interest, tax, depreciation and amortisation	7,199	5,232	9,721	6,541	–467	–633	16,453	11,140
Operating result before depreciation and amortisation resulting from purchase price allocation	4,345	2,524	6,937	3,961	–517	–704	10,765	5,781
Depreciation and amortisation resulting from purchase price allocation	–386	–122	–246	–246	0	0	–632	–368
Operating result	3,959	2,402	6,691	3,715	–517	–704	10,133	5,413
Net finance result	–357	–161	–114	–153	–36	0	–507	–314
Result before income taxes	3,602	2,241	6,577	3,562	–553	–704	9,626	5,099

Responsibility Statement

To the best of our knowledge, 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 group's development and performance of its position, together with a description of the principal opportunities and risks associated with the expected development of the group in the remaining months of the financial year, in accordance with proper accounting principles of interim consolidated reporting.

Financial Calendar

24 March 2021	Publication of Annual Result 2020
24 March 2021	Analyst Conference
28 April 2021	Report on the 1st Quarter of 2021
19 May 2021	Annual General Meeting (virtual Meeting)
28 July 2021	Report on the 1st Six Months of 2021
29 October 2021	Report on the 3rd Quarter of 2021
22 to 24 November 2021	German Equity Forum, Analyst Presentation

Your Investor Relations contact:

Karsten Pierschke

Phone:	+49 30 2801-2727
Fax:	+49 30 2801-1000
E-Mail:	kpierschke@psi,de

We will be happy to include you in our distribution list for stockholder information. Please contact us should you require other information material.

For the latest IR information, please visit our website at www.psi.de/ir.

PSI Software AG

Dircksenstraße 42-44 10178 Berlin Germany Phone: +49 30 2801-0 Fax: +49 30 2801-1000 ir@psi.de www.psi.de