Schoeller-Bleckmann Oilfield Equipment AG

Quarterly Report • May 24, 2017

L E T T E R T O O U R SHAREHOLDERS 1-3 2017

H I G H L I G H T S

• Continued market recovery in North America
• Sales and bookings develop positively within expectations
• The company is well positioned to respond flexibly to the upswing

M A N A G E M E N T R E P O R T

" N O R T H A M E R I C A C O N T I N U E D A P P R E C I A B L E R E C O V E R Y I N T H E FIRST QUARTER"

MARKET ENVIRONMENT

In the first quarter of 2017, the balance of supply and demand in the global crude market was nearly reached. Year-on-year, demand rose by 1 million barrels per day (mb/d) to 96.5 mb/d (1-3/2016: 95.5 mb/d). Over the full year 2016, demand went up by as much as 1.6 mb/d.

On 30 November 2016, OPEC members agreed on a production limit of 32.5 mb/d (crude oil without natural gas liquids / NGLs), which took effect on 1 January 2017. Led by Saudi Arabia, the OPEC countries adhered to the agreement in the first quarter of 2017: Average compliance was 99 %. OPEC's output totalled 31.9 mb/d, which is 1.4 mb/d below the production in the fourth quarter of 2016, before the production limit was introduced. Non-OPEC output also fell, by 0.2 mb/d from the fourth quarter of 2016, but including seasonal effects such as Canada's spring break-up. Crude production in the United States, by contrast, went up by 0.2 mb/d in quarterly comparison. In total, crude supply (including natural gas liquids / NGLs) in the first quarter of 2017 reached 96.6 mb/d (1-3/2016: 96.7 mb/d). Therefore, supply exceeded demand by 0.1 mb/d.

Due to rising crude production in the United States and an increasing amount of crude imports in America and Europe, also OECD crude stocks came to a higher level. Crude stocks totalled 1.235 million barrels (mb) by the end of the quarter, after 1.177 mb by the end of the fourth quarter of 2016.1

Prices of WTI and Brent crudes clearly remained above the USD 50 mark in the first quarter of 2017. WTI started the year at a price of USD 52.33, whereas Brent was traded for USD 56.82. At the end of the quarter, the price of WTI arrived at USD 50.60 and of Brent at USD 52.83. Year-onyear, the price of WTI climbed by 32.0 % (31. March 2016: USD 38.34) and of Brent by 33.4 % (31. March 2016: USD 39.60).2

The number of globally active drilling rigs (rig count) continued to rise in the first quarter. In March 2017, the rig count arrived at 1,985 rigs, up 41.3 % from its low in May 2016 (1,405 rigs). Compared to December 2016, the rig count went up by 12.0 % (1,772 rigs). The rise seen in the first quarter of 2017 is due mainly to the development in the US, where the rig count totalled 789 rigs in March 2017, representing an increase of 93.4 % from the low in May 2016 (408 rigs). Compared to December 2016, this is a growth of 24.4 % (634 rigs).3 Improving drilling activity is equally reflected in the number of drilled but uncompleted Wells (DUCs) in North America, which climbed by 10.2 % to 5,534 units (December 2016: 5,023 units).4

¹ International Energy Agency (IEA), Oil Market Report, May 2017.

² Bloomberg: CO1 Brent Crude (ICE) and CL1 WTI Crude (Nymex).

³ Baker Hughes Rig Count.

⁴ U.S. Energy Information Administration, EIA Estimates of Drilled but Uncompleted Wells (DUCs), May 2017.

" I M P R O V I N G A C T I V I T Y L E V E L S H A D P O S I T I V E E F F E C T O N S A L E S A N D B O O K I N G S O F S B O "

B U S I N E S S D E V E L O P M E N T

The repercussions of the sharpest decline in the past 30 years, which had a firm grip on the oilfield service industry since the second half of 2014, were still felt heavily throughout the first quarter of 2017. While North America had experienced a marked recovery since the second half of 2016, the oilfield service industry was struggling to get off the ground again. Specifically, growth in international business was limited in the first quarter of 2017. These developments are evidenced also by the result of Schoeller-Bleckmann Oilfield Equipment AG (SBO). The company has very consciously positioned itself on the North American market and underlined this, once again, by the acquisition of US-based "Downhole Technology LLC" (Downhole Technology).

SBO generated sales worth MEUR 60.1 in the first quarter of 2017. Compared to the same quarter of 2016, this is an increase of 28.5 % (1-3/2016: MEUR 46.8). Bookings rose by 72.0 %, to MEUR 69.9, following MEUR 40.6 in the first quarter of 2016. As a result, the book-to-bill ratio, which measures the number of orders coming in compared to sales and serves as an indicator of medium-term development, was greater than 1 for the second consecutive quarter: In the first quarter of 2017 it was 1.2 (1-3/2016: 0.9). At the end of the first quarter of 2017, the order backlog totalled MEUR 30.5 (31 March 2016: MEUR 28.3).

Earnings before interest, taxes, depreciation, and amortisation (EBITDA) were MEUR 7.2 (1-3/2016: MEUR minus 4.8). The operating result (EBIT) posted a clear increase, from MEUR minus 16.9 in the first quarter of 2016 to MEUR minus 5.8 in the first quarter of 2017. The EBITDA margin stood at 12.0 % (1-3/2016: minus 10.2 %), and the EBIT margin at minus 9.6 % (1-3/2016: minus 36.1 %). The – sustained – cost-cutting measures taken in the past two years delivered a positive contribution to the development of SBO's business result.

The financial result amounted to MEUR minus 0.5 (1-3/2016: MEUR minus 3.3), including the positive result from the revaluation of option commitments of MEUR 0.9. Profit before tax was MEUR minus 6.3 (1-3/2016: MEUR minus 20.2), and profit after tax MEUR minus 4.9 (1-3/2016: MEUR minus 15.0). Earnings per share came to EUR minus 0.31 (1-3/2016: EUR minus 0.94).

The company has a fundamentally strong balance sheet structure: As at 31 March 2017, SBO's equity ratio was 52.6 % (31 March 2016: 57.1 %), and net debt was MEUR 54.9 (31 March 2016: Net liquidity MEUR 24.2). On 1 April 2016, SBO acquired Downhole Technology. SBO again generated a positive operating cashflow of MEUR 2.1 in the first quarter of 2017 (1-3/2016: MEUR 6.3). The cash position was MEUR 188.8 (31 March 2016: MEUR 224.9). Spending for property, plant and equipment and for intangible assets (CAPEX) arrived at MEUR 5.8 (1-3/2016: MEUR 3.1). Purchase commitments for expenditure in property, plant and equipment as at 31 March 2017 were MEUR 1.3 (31 March 2016: MEUR 0.1).

DEVELOPMENT OF THE SEGMENTS

With the beginning of 2017, SBO introduced adaptations to its corporate structure due to amended market requirements and now presents business reports in line with the new structure. In the past years, subsidiaries under the former segment "High Precision Components" were increasingly overlapping with those subsidiaries offering service and repair within the segment "Oilfield Equipment". Moreover, both businesses have a similar customer structure, and the reorganisation of segments allows for a more transparent presentation of the procurement behaviour of SBO's customers. Under the new structure, SBO's business operations are subdivided into two reportable segments - "Advanced Manufacturing & Services" (AMS) and "Oilfield Equipment" (OE):

• f The "Advanced Manufacturing & Services" (AMS) segment comprises high-precision machining and repair of drill collars and complex MWD (Measurement While Drilling) / LWD (Logging While Drilling) components made of non-magnetic corrosion-resistant stainless steel. These form the housing for sensitive measuring instruments needed for the precise measurement of inclination and azimuth of the drillstring as well as petrophysical parameters.
• f The "Oilfield Equipment" (OE) segment contains a broad offering of highly specialized solutions for the oil and gas industry: High performance drilling motors and tools for the directed drive of the drillstring, as well as downhole circulation tools; in addition thereto, products for the efficient and resource-saving completion of unconventional resources in both dominating technologies "sliding sleeve" and "plug-n-perf".

In the "Advanced Manufacturing & Services" (AMS) segment, sales stood at MEUR 19.3 (1-3/2016: MEUR 29.4) and the operating result (EBIT) at MEUR minus 7.1 (1-3/2016: MEUR minus 5.3) in the first quarter of 2017.

In the "Oilfield Equipment" (OE) segment, rising segment sales came to MEUR 40.8 (1-3/2016: MEUR 17.4) and the operating result (EBIT) to MEUR 2.9 (1-3/2016: MEUR minus 5.2).

R I S K R E P O R T

The business risks of Schoeller-Bleckmann Oilfield Equipment AG did not change substantially in the first three months of 2017 over the risks described in the 2016 annual financial statements. The entire oilfield service industry continues to be confronted with curtailed capital expenditure due to the crisis in the sector. Regardless of the corrective measures described in the previous quarterly reports and taken, this has a significant influence on the assets and financial position of SBO. In addition, we refer to all risks described in the Annual Report 2016. We recommend to read this report on the first three months of 2017 in conjunction with the risk report contained in the Annual Report 2016.

S B O S H A R E

The share of SBO started into year 2017 at a price of EUR 77.44 on 2 January and closed at EUR 65.30 on 31 March 2017, dropping by 15.7 % in the first quarter. Negative price developments were also seen at crudes WTI (minus 3.3 %) and Brent (minus 7.0 %). Since the decline started in 2014, the share price has dropped by 32.0 %, strongly outperforming the oil price (minus 53.0 % (WTI) and minus 54.3 % (Brent)).

" S B O I S W E L L P O S I T I O N E D F O R A FLEXIBLE RESPONSE TO THE UPSWING"

OUTLOOK

The International Monetary Fund (IMF) expects global economic growth to arrive at 3.5 % for year 2017 and 3.6 % for year 2018, following 3.1 % in year 2016 and 3.4 % in year 2015. In the industrialised countries, economic growth should come to 2.0 % each in 2017 and 2018, following an increase of 1.7 % in 2016 and 2.1 % in 2015, mainly due to economic recovery in the United States. In the emerging and developing countries, according to IMF, growth should come to 4.5 % in 2017 and 4.8 % in 2018, following 4.1 % in 2016 and 4.2 % in 2015. This development, the IMF believes, will be supported by improved macroeconomic conditions in commodity-exporting countries.5

Spending for exploration and production (E&P spending) should be on the rise again for the first time since 2014. According to conservative estimates, global E&P spending is expected to increase by 2 %, and by 21 % in North America. Given the massive curtailment of capital expenditure in the years 2015 and 2016, the need for investing is fundamentally strong. Much of last years' spending for E&P was used only for maintaining current production levels. The assumption is that, up to the year 2025, new projects worth 16 mb/d will have to be released for production so as to meet the growing demand for crude oil.6 When considering this factor and the stable increase in demand, it cannot be ruled out, over the medium term, that the oil market might end up undersupplied.

In North America a pronounced market recovery has been observed since the second half of 2016. Internationally, this revival has not yet taken place. This is strong evidence that North America is adapting very flexibly to the new situation. The downturn in the oil market seems to finally have come to an end. A major factor of influence on this year's development will be OPEC's further line of action. At their meeting scheduled for 25 May 2017, OPEC members will decide on whether or not to extend the production limit initially set at 32.5 mb/d for a period of six months. Should the production limit be maintained, this would support sustained stability in the crude oil market.

IEA expects to see a production increase of 0.5 mb/d in North America in 2017. For non-OPEC countries (including North America), the IEA anticipates growth to arrive at 0.6 mb/d. At the same time, global demand should go up by 1.3 mb/d. The balance of supply and demand was nearly restored in the first quarter of 2017. At the same time, OECD crude stocks increased further. For the full year 2017, the decision to be taken by OPEC at the end of May 2017 and the response of E&P companies in North America will be crucial. All in all, 2017 is expected to be a transition year.7

Short response times and high flexibility are key factors for safely managing the cycles of the oil and gas industry. SBO's group structure optimisation, expansion of the Well Completion business, and research and development activities provided the basis to strengthen its position even over the past two years of the downturn. SBO is in a strong position to benefit fully from the next upswing as market and technology leader.

⁶ IEA World Energy Outlook 2016 (New Policies Scenario).

⁷ International Energy Agency (IEA), Oil Market Report, May 2017.

⁵ IMF World Economic Outlook (WEO), April 2017.

CONSOLIDATED BALANCE SHEET

ASSETS in TEUR	31.03.2017	31.12.2016
Current assets
Cash and cash equivalents	188,783	193,453
Trade accounts receivable	57,161	49,526
Other accounts receivable and prepaid expenses	15,071	14,270
Assets held for sale	4,987	5,068
Inventories	101,544	105,653
TOTAL CURRENT ASSETS	367,546	367,970
Non-current assets
Property, plant & equipment	159,536	165,344
Goodwill	172,626	174,716
Other intangible assets	65,598	69,904
Long-term receivables and assets	12,795	12,483
Deferred tax assets	12,385	11,639
TOTAL NON-CURRENT ASSETS	422,940	434,086
TOTAL ASSETS	790,486	802,056

CONSOLIDATED BALANCE SHEET

LIABILITIES AND SHAREHOLDERS´ EQUITY in TEUR	31.03.2017	31.12.2016
Current liabilities
Bank loans and overdrafts	31,880	32,499
Current portion of long-term loans	37,173	37,233
Finance lease obligations	19	28
Trade accounts payable	13,516	11,929
Government grants	96	97
Income taxes payable	1,998	2,010
Other payables	20,225	19,979
Other provisions	2,956	4,206
TOTAL CURRENT LIABILITIES	107,863	107,981
Non-current liabilities
Long-term loans	174,565	174,691
Government grants	57	57
Employee benefit obligations	5,370	5,296
Other payables	77,920	78,260
Deferred tax liabilities	9,253	10,038
TOTAL NON-CURRENT LIABILITIES	267,165	268,342
Shareholders´ equity
Share capital	15,953	15,947
Contributed capital	66,917	66,812
Legal reserve	785	785
Other reserves	19	19
Currency translation reserve	55,623	61,109
Retained earnings	276,161	281,061
TOTAL SHAREHOLDERS´ EQUITY	415,458	425,733
TOTAL LIABILITIES AND SHAREHOLDERS´ EQUITY	790,486	802,056

CONSOLIDATED P R O F I T A N D L O S S S T A T E M E N T

in TEUR	3 months period ended	31.03.2017	31.03.2016
Sales		60,133	46,782
Cost of goods sold		-49,072	-46,540
Gross profit		11,061	242
Selling expenses		-6,513	-4,272
General and administrative expenses		-8,444	-9,827
Other operating expenses		-3,261	-4,907
Other operating income		1,396	1,892
Profit from operations		-5,761	-16,872
Interest income		690	691
Interest expenses		-2,062	-1,284
Other financial income		0	44
Other financial expenses		0	-1
Income/expenses from revaluation of option commitments		851	-2,791
Financial result		-521	-3,341
Profit before tax		-6,282	-20,213
Income taxes		1,382	5,174
Profit after tax		-4,900	-15,039
Average number of shares outstanding		15,947,460	15,982,066
Earnings per share in EUR (basic = diluted)		-0.31	-0.94

C O N S O L I D A T E D S T A T E M E N T O F COMPREHENSIVE INCOME

in TEUR	3 months period ended	31.03.2017	31.03.2016
Profit after tax		-4,900	-15,039
Other comprehensive income to be reclassified to profit or loss in subsequent periods
Foreign exchange adjustment - subsidiaries		-5,081	-16,009
Foreign exchange adjustment - other items		-540	-927
Income tax effect		135	232
Other comprehensive income, net of tax		-5,486	-16,704
Total comprehensive income, net of tax		-10,386	-31,743

CONSOLIDATED CASHFLOW STATEMENT

in TEUR	3 months period ended	31.03.2017	31.03.2016
OPERATING ACTIVITIES
Profit/loss after tax		-4,900	-15,039
Depreciation, amortization and impairments		12,964	12,084
Other non-cash expenses and revenues		-1,311	-1,879
Cashflow from profit		6,753	-4,834
Change in working capital		-4,618	11,087
Cashflow from operating activities		2,135	6,253
INVESTING ACTIVITIES
Expenditures for property, plant & equipment and intangible assets		-5,801	-3,063
Other activities		1,039	590
Cashflow from investing activities		-4,762	-2,473
FREE CASHFLOW		-2,627	3,780
FINANCING ACTIVITIES
Change in bank loans and overdrafts & finance lease		-920	30,804
Cashflow from financing activities		-920	30,804
Change in cash and cash equivalents		-3,547	34,584
Cash and cash equivalents at the beginning of the period		193,453	196,278
Effects of exchange rate changes on cash and cash equivalents		-1,123	-5,975
Cash and cash equivalents at the end of the period		188,783	224,887

C O N S O L I D A T E D S T A T E M E N T O F CHANGES IN SHAREHOLDERS´ EQUITY

1-3 / 2017 in TEUR	Share capital	Contributed capital	Legal reserve	Other reserves	Currency translation reserve	Retained earnings	Total
1 January 2017	15,947	66,812	785	19	61,109	281,061	425,733
Profit after tax						-4,900	-4,900
Other comprehensive income, net of tax					-5,486		-5,486
Total comprehensive income, net of tax	0	0	0	0	-5,486	-4,900	-10,386
Share based payment	6	105					111
31 March 2017	15,953	66,917	785	19	55,623	276,161	415,458

1-3 / 2016 in TEUR	Share capital	Contributed capital	Legal reserve	Other reserves	Currency translation reserve	Retained earnings	Total
1 January 2016	15,982	68,357	785	19	50,166	315,051	450,360
Profit after tax						-15,039	-15,039
Other comprehensive income, net of tax					-16,704		-16,704
Total comprehensive income, net of tax	0	0	0	0	-16,704	-15,039	-31,743
Share based payment	6	250					256
Change in reserves				-1		1	0
31 March 2016	15,988	68,607	785	18	33,462	300,013	418,873

N O T E S T O T H E I N T E R I M C O N S O L I D A T E D F I N A N C I A L STATEMENTS

NOTE 1

BASIS OF PREPARATION

The interim report as at 31 March 2017 has been prepared in accordance with the principles of the International Financial Reporting Standards (IFRS), rules for interim financial reporting (IAS 34), to be applied in the European Union.

This report on the first quarter of 2017 of the SBO group has neither been audited nor reviewed by independent accountants.

NOTE 2

ACCOUNTING POLICIES

The accounting and valuation methods of 31 December 2016 have been applied basically unchanged, with the exception of the standards which came into force in 2017. The new regulations do not have a significant implication on the consolidated financial statements. In this context, we refer to the consolidated financial statements for the year ended 31 December 2016.

NOTE 3

SCOPE OF CONSOLIDATION

During the first three months of 2017 no changes occurred in the scope of consolidation.

NOTE 4

SEASONALITY

Business development of SBO is not subject to seasonal influences.

NOTE 5

SEGMENT INFORMATION

At the beginning of the first quarter of 2017, SBO introduced changes to its internal steering and the internal reporting structure resulting thereof. In the past years, subsidiaries under the former segment "High Precision Components" were increasingly overlapping with those subsidiaries offering service and repair within the segment "Oilfield Equipment". Moreover, both businesses have a similar customer structure, and the reorganisation of segments allows for a more transparent presentation of the procurement behaviour of SBO's customers. Under the new structure, SBO's business operations are subdivided into two reportable segments - "Advanced Manufacturing & Services" (AMS) and "Oilfield Equipment" (OE):

The "Advanced Manufacturing & Services" (AMS) segment comprises high-precision machining and repair of drill collars and complex MWD (Measurement While Drilling) / LWD (Logging While Drilling) components made of non-magnetic corrosion-resistant stainless steel. These form the housing for sensitive measuring instruments needed for the precise measurement of inclination and azimuth of the drillstring as well as petrophysical parameters.

The "Oilfield Equipment" (OE) segment contains a broad offering of highly specialized solutions for the oil and gas industry: High performance drilling motors and tools for the directed drive of the drillstring, as well as downhole circulation tools; in addition thereto, products for the efficient and resource-saving completion of unconventional resources in both dominating technologies "sliding sleeve" and "plug-n-perf".

Internal management of the group as well as the allocation of resources is based on the financial performance of these segments. Prior year figures were adjusted accordingly.

Results in the total column correspond to the amounts in the income statement.

1-3/2017 in TEUR	Advanced Manufacturing & Services	Oilfield Equipment	SBO-Holding & Consolidation	Group
External sales	19,300	40,833	0	60,133
Intercompany sales	6,650	3,548	-10,198	0
Total sales	25,950	44,381	-10,198	60,133
Profit from operations before impairments and restructuring measures	-7,079	2,885	-1,567	-5,761
Profit before taxes	-6,924	2,964	-2,322	-6,282

1-3/2016 in TEUR	Advanced Manufacturing & Services	Oilfield Equipment	SBO-Holding & Consolidation	Group
External sales	29,406	17,376	0	46,782
Intercompany sales	8,249	1,992	-10,241	0
Total sales	37,655	19,368	-10,241	46,782
Profit from operations before impairments and restructuring measures	-5,346	-5,236	-6,290	-16,872
Profit before taxes	-5,245	-8,470	6,498	-20,213

NOTE 6

OWN SHARES

During the reporting period the company transferred 6,000 SBO shares resting on the share based payment program introduced in 2014.

NOTE 7

RELATED PARTY TRANSACTIONS

With respect to business transactions with related parties there were no substantial changes compared to 31 December 2016. All transactions with related parties are carried out at generally acceptable market conditions. For further information on individual business relations please refer to the consolidated financial statements of SBO AG for the year ended 31 December 2016.

NOTE 8

FINANCIAL INSTRUMENTS

The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

• Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities;
• Level 2: other techniques for which all inputs which have significant effects on the recorded fair value are observable, either directly or indirectly;
• Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data.

As at balance sheet date, the Group held the following classes of financial instruments measured at fair value:

in TEUR	Balance sheet item	31.03.2017	Stufe 2	Stufe 3
Liabilities
Derivatives	Other liabilities	-57,917	-124	-57,793
in TEUR	Balance sheet item	31.12.2016	Stufe 2	Stufe 3
Liabilities
Derivatives	Other liabilities	-58,673	-124	-58,549

During the reporting period 2017 there were no transfers between level 1 and level 2 fair value measurements. In general, if required, transfers are carried out at the end of each reporting period.

Derivatives shown under level 3 consist only of contingent liabilities for purchase price payments and the option commitments relating to cancelable non-controlling interests to purchase the offered shares from the minority shareholders. The development in the reporting period 2017 was as follows:

	Contingent purchase
in TEUR	price payments	Option commitments
As at 1 Jan 2017	-17	-58,532
Addition of accrued interest	-1	-829
Gains from revaluation	0	1,356
Losses from revaluation	-0	-505
Currency adjustment	1	734
As at 31 Mar 2017	-17	-57,776

The foreign currency forward contracts are measured based on observable spot exchange rates. The contingent purchase price payments from business combinations and the option commitments relating to cancelable non-controlling interests are measured at balance sheet date according to the underlying agreements based on the expected discounted payments using the most recent sales forecast. The liabilities are discounted using a risk adequate discount rate for the duration of each liability.

The contingent purchase price payments determined as a certain percentage of achieved sales are to be paid on a yearly basis. The liabilities for contingent purchase price payments have a residual term of further two years. Gains from revaluation refer to unrealized profits and are reported in the income statement within "other financial income".

The exercise price of the option commitments relating to cancelable non-controlling interests is based on the achieved financial results of the acquired entities. Gains and losses from revaluation refer to unrealized gains and losses and are reported in the income statement within "income/expense from revaluation of option commitments".

The sensitivity analysis for significant, non-observable input factors is as follows:

in TEUR	Assumption	Change in assumption	If assumption increases, liabili ty changes by	If assumption decreases, liabili ty changes by
Option commit	Net results	+/-10 %	+5,515	-5,514
ment relating to cancelable non-con trolling interests	Interest rate 20 % resp. 4.4 % resp. 4.3 %	+/-2.5 resp. +/-1 resp. +/-1 percentage points	-919	+603

Referring to contingent purchase price payments the sensitivity analysis performed for significant non-observable input parameters only resulted in immaterial changes of the liabilities both when considering reasonable possible changes in sales revenues and interest rates.

For each category of financial instruments which are amortized at acquisition costs, both the carrying value and the deviating fair value are provided in the table below:

		31.03.2017		31.12.2016
in TEUR	Level	Carrying value	Fair value	Carrying value	Fair value
Liabilities
Borrowings from banks, finance lease obligations and other loans	2	-243,636	-248,229	-244,451	-249,329

For assessing the fair value of lendings, borrowings and leasing obligations, the expected cashflows have been discounted using market interest rates. Regarding bank and other long-term loans with variable interest, the interest rates charged are current market rates, resulting in the fact that the carrying values equal the fair values to a large extent. Cash and cash equivalents, trade receivables and payables and all other items have mostly short residual lives. Therefore, the carrying values equal the fair values at the balance sheet date.

NOTE 9

EVENTS AFTER THE BALANCE SHEET DATE

No important events have occurred after the balance sheet date.

S T A T E M E N T O F A L L LEGAL REPRESENTATIVES

We confirm to the best of our knowledge that the condensed interim financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the group as required by the applicable accounting standards and that the group management report for the first quarter gives a true and fair view of important events that have occurred during the first three months of the financial year and their impact on the interim financial statements, and of the principal risks and uncertainties for the remaining nine months of the financial year and of the major related party transactions to be disclosed.

Ternitz, 23 May 2017

Executive Board