Syzygy AG

Quarterly Report • May 7, 2020

3-MONTH-REPORT AS PER MARCH 31, 2020

The human experience company

Key financial figures

Sales	Operating income	Financial income
(in kEUR)	(in kEUR)	(in kEUR)
2016	2016	2016
14,425	1,475	396
2017	2017	2017
14,795	1,004	503
2018	2018	2018
15,424	1,104	151
2019	2019	2019
15,689	1,442	-8
2020	2020	2020
14,925	1,097	-139
14,925	1,097	-139
3M 2019	3M 2019	3M 2019
Income before taxes	Net income	Earnings per share
(in kEUR)	(in kEUR)	undiluted (in EUR)
2016	2016	2016
1,871	1,374	0.10
2017	2017	2017
1,507	1,071	0.09
2018	2018	2018
1,255	920	0.07
2019	2019	2019
1,434	1,075	0.08
2020	2020	2020
958	680	0.05
958	680	0.05
3M 2019	3M 2019	3M 2019
Operating cash fl ow (in kEUR)	Sales by employee annualised (in kEUR)	Balance sheet structure
2016 141 2017 -2,106 2018 3,815 2019 -9,268 2020 2,338	2016 111 2017 100 2018 96 2019 99 2020 101	Current assets 24 % Non current assets 76 % Equity 42 % Liabilities 58%
2,338	101	42%
3M 2019	2019	Equity

Sales by segments	Sales by clients' volume	Sales allocation by vertical markets
Germany 81 % United Kingdom 11 % Others 8 %	Top 5 34 % Top 6-10 15 % Others 51 %	Automotive 28 % Services 26% Finance/insurances 18 % Consumer goods 12% Telecommunications/IT 7 % Others 9%
81% Germany	34% Top 5	28% Automotive
Portfolio structure of cash and marketable securities	Employees by function
Bank deposit 45 % Corporate and government bonds 55 %	Strategy/consulting 22 % Technology 18 % Performance marketing 17 % Project management 15 % Design 14 % Administration 14 %
45% Bank deposit	22% Strategy/consulting
Shareholders' structure
WPP plc. 50.33 % HANSAINVEST 3.03 % Hauck & Aufhäuser 2.97 % Treasury stocks 0.54 % Free float 43.13 % 50.33% WPP plc.

Content

• Management Report
• Consolidated balance sheet
• Consolidated statement of comprehensive income
• Statement of changes in equity
• Consolidated statement of cash flows
• Notes to the Consolidated financial statements
• Financial calendar and contact

ir.syzygy.net

Business development

and management report

		1. Quarter
In kEUR	2020	2019	Change
Sales	14,925	15,689	-5%
EBITDA	2,563	2,654	-3%
EBITDA margin	17.2%	16.9%	0.3 pp
EBIT	1,097	1,442	-24%
EBIT margin	7.4%	9.2%	-1.8 pp
Financial income	-139	-8	n.a.
EBT	958	1,434	-33%
Net income	680	1,075	-37%
Earnings per share (EUR)	0.05	0.08	-38%
Employees incl. freelancers	589	609	-3%
Liquid assets	9,084	12,296	-26%
Operating cash flow	2,338	-9,268	n.a.

1. General

The following Group Management Report provides information on the performance of the SYZYGY Group (hereinafter referred to as "SYZYGY", the "Group" or the "Company"). The consolidated financial statements on which the Group Management Report is based have been prepared in accordance with International Financial Reporting Standards (IFRS). The financial year corresponds to the calendar year.

This short version of the Group Management Report is an optional quarterly financial report, focusing on company-related information. It does not include any comments on general trends in the economy and in the advertising market. Please see the relevant information in the 2019 Annual Report.

2. Group profile

2.1. Business activities and structure

SYZYGY is a leading consultancy and implementation partner for digital transformation of marketing and sales. It is one of the top 10 companies in the Internet agency ranking published annually by the German Association for the Digital Economy (BVDW) (2019: 9th place).

SYZYGY designs, creates and orchestrates digital experiences and products for brands, companies and people. The Group's core service categories are strategy, product and activation, with technology as the connecting and scaling element.

Founded in 1995, the SYZYGY Group employs some 550 people (previous year: 560) across four countries. It has offices in Bad Homburg v. d. Höhe, Berlin, Frankfurt, Hamburg, Munich, London, New York and Warsaw.

The Group consists of SYZYGY AG as the holding company and eleven subsidiaries: SYZYGY Deutschland GmbH, strategy consultancy diffferent GmbH, consultancy USEEDS° GmbH, which specialises in customer centricity, SYZYGY Performance GmbH, SYZYGY Media GmbH, SYZYGY Berlin GmbH, Polish design studio Ars Thanea S.A., Unique Digital Marketing Ltd., SYZYGY UK Ltd. and SYZYGY Digital Marketing Inc. Its clients include prestigious brands such as AVIS, BMW, Commerzbank, Consorsbank, Daimler, Deutsche Bank, Kyocera, Lufthansa, Mazda, Miles & More, mobile.de, O2, PayPal, Porsche, health insurer Techniker Krankenkasse and Volkswagen.

2.2. Group management

The organisational structure of the SYZYGY Group is decentralised. As the management holding company, SYZYGY AG manages the subsidiaries on the basis of quantitative and qualitative targets (management by objectives). The management teams in the individual companies operate largely independently, within the constraints of their targets and budgets. A control and reporting system is in place for management and monitoring purposes within the Group. It compares the financial figures against the budget on a monthly basis, while also highlighting key opportunities and risks.

DRS 20 stipulates that financial and non-financial performance indicators must be included in reporting if they are also used for the Group's internal management.

Financial performance indicators

The main financial performance indicators used for managing the SYZYGY Group are sales and earnings before interest and taxes (EBIT). They are presented and explained in detail in the following Management Report.

Non-financial performance indicators

As part of its reporting on sustainability, SYZYGY AG has issued a declaration of conformity that addresses the German Sustainability Code and its individual standards, while also assessing the relevance for the SYZYGY Group. The action areas with strategic importance for SYZYGY in this respect are:

• client relationships,
• employees,
• growth and development of the Group,
• economic efficiency,
• environmental protection and
• corporate governance.

The SYZYGY Group pursues a style of corporate management based on sustainable growth. It adopts measures based on the above action areas that help drive the successful long-term performance of the SYZYGY Group. Further information on sustainability is available in the SYZYGY AG declaration of conformity under ir.syzygy.de and "Sustainability".

SYZYGY AG is exempt from preparing a non-financial declaration in accordance with Article 315b (2) sentence 2, HGB. The parent company, WPP plc., St. Helier, Jersey, publishes the non-financial declaration on its website at wpp.com/wpp/sustainability

2.3. Employees

The headcount at the SYZYGY Group was broadly unchanged in the period covered by the report. The SYZYGY Group had a total of 547 permanent employees as at March 31, 2020. This represents a small increase of 5 people compared with December 31, 2019. Compared with the end of the same quarter of the previous year, the headcount fell by 15; this was primarily due to shedding around 40 people in London. By contrast, SYZYGY in Germany hired additional staff (+30 people).

The number of freelancers was around 42 (based on FTEs) as at the reporting date, 3 fewer than in March 2019.

The following table shows the distribution of permanent employees by region:

Employees	31/03/2020	31/03/2019
Germany	419	389
United Kingdom	50	91
Poland	72	75
United States	6	7
Total	547	562

Employees by region

On average over the period, 548 people – including around 42 freelancers – worked for the SYZYGY Group. Annualised sales per head were therefore EUR 101,000 (previous year: EUR 99,000, with an average headcount of 607).

2.4. Net assets, financial position and results of operations of the SYZYGY Group

2.4.1. Results of operations

The sales figures for the SYZYGY Group are arrived at by deducting media costs from billings. Media costs are incurred in the performance marketing companies as transitory items on the revenue and expenses side.

Over the first three months of the year, sales fell by 5 per cent to EUR 14.9 million.

area has not changed significantly and breaks down as follows: Employees 31/03/2020 31/03/2019

The proportion of employees in each function/work

Strategy/consulting	124	113
Technology	98	96
Performance marketing	91	124
Project management	80	76
Administration	77	78
Design	77	75
Total	547	562

Employees by function

The SYZYGY Group has historically had high exposure to clients in the German automotive industry. Sales by client industry are as follows:

Shifts in sales patterns gave rise to a number of changes compared to the previous year. Sales generated with clients in the consumer goods segment fell by 8 percentage points compared with the previous year; sales attributable to clients in the automotive industry decreased by 3 per cent. Sales to companies in the services sector rose by 8 per cent. The proportion of sales in the telecommunications/ IT segment decreased by 2 percentage points compared with the prior-year quarter. Two per cent more sales were generated with clients from the financial and insurance segment in the quarter under review. Sales derived from companies that cannot be assigned to any of these five key areas were up 3 per cent.

SYZYGY generated 48 per cent of total sales from its ten largest clients, a rise of 2 percentage points compared with the same period in the prior year. This reflects an increase in business with major clients.

2.4.2. Operating expenses and depreciation

The cost of sales fell slightly in line with sales, decreasing by 3 per cent to EUR 11.0 million (previous year: EUR 11.4 million). Gross margin thus fell by 1 percentage point to 26 per cent.

General administrative expenses rose by 2 per cent to EUR 1.9 million (previous year: EUR 1.8 million).

In contrast, sales and marketing costs in the 2020 reporting period were broadly unchanged compared to the prior-year period, at EUR 1.3 million.

Depreciation of fixed assets increased from EUR 1.2 million in the previous year to EUR 1.5 million.

2.4.3. Operating income and EBIT margin

The SYZYGY Group's operating profit declined by 24 per cent, falling from EUR 1.4 million to EUR 1.1 million compared with the same period of the previous year; the EBIT margin thus fell to 7.4 per cent (previous year: 9.2 per cent).

2.4.4. Financial income

SYZYGY reported negative financial income of EUR 0.1 million in the first quarter of 2020 (previous year: EUR 0.0 million). Financial expenses chiefly comprise pro rata interest expense from long-term contracts in accordance with IFRS 16 (primarily leases). Financial income of EUR 0.1 million (previous year: EUR 0.2 million) from investment in securities was only partially able to offset expenses.

2.4.5. Income taxes, net income, earnings per share

Business performance at the SYZYGY Group is reflected in pre-tax income of EUR 1.0 million. In the same period of the previous year, the figure was EUR 1.4 million, meaning that pre-tax income declined by 33 per cent. After income taxes of EUR 0.3 million, net income was EUR 0.7 million.

Undiluted earnings per share were EUR 0.05, based on the average available 13,421,000 shares qualifying for participation in the profits and after deducting minority shares of EUR 27,000. This figure is EUR 0.03 below the level achieved in the prior-year period (prior-year quarter: EUR 0.08).

2.4.6. Segment reporting

In accordance with IFRS 8, which is based on the management approach, SYZYGY uses geographical criteria to report segments and thus distinguishes between Germany, the UK and the Other segment. The latter category includes Ars Thanea and SYZYGY Digital Marketing Inc. Under IFRS 8.13, these companies are not big enough to be reported as geographically independent segments.

In the first three months of 2020, the individual segments contributed to earnings as follows, compared with the same period in the previous year:

	Germany		United Kingdom		Other
3M (in kEUR)	2020	2019	2020	2019	2020	2019
Sales (unconsolidated)	12,278	11,549	1,697	2,858	1,252	1,677
Operating income (EBIT)	1,580	1,763	-44	-39	-127	14
Operating income (EBIT)	12 %	15 %	-3 %	-1 %	-10 %	1 %
Share of Group sales (consolidated)	81 %	72 %	11 %	18 %	8 %	10 %

2.4.7. Financial position

SYZYGY had liquidity reserves totalling EUR 9.1 million as at the balance sheet date, corresponding to an increase of EUR 4.5 million compared with December 31, 2019. Both components were up: liquid funds increased from EUR 0.9 million to EUR 4.1 million, while securities holdings rose from EUR 3.6 million to EUR 5.0 million The reason for the sharp rise in liquidity reserves is the positive operating cash flow of EUR 2.3 million and also taking out a money market loan of EUR 5.0 million.

A total of 55 per cent of funds were invested in corporate bonds as at March 31, 2020, while 45 per cent were accounted for by bank deposits. The average residual maturity of the bonds was 5.7 years.

Total cash flow of the SYZYGY Group was positive as at the reporting date, at EUR 3.2 million. Cash flow from business operations was also positive, standing at EUR 2.3 million in the period under review. This was due to positive net income of EUR 0.7 million, depreciation and amortisation of EUR 1.5 million and a fall in accounts receivable and other assets of EUR 1.0 million. In contrast, a fall in accounts payable and tax liabilities by a total of EUR 0.8 million put pressure on operating cash flow. Cash flow from investment operations was negative at EUR -3.0 million. This reflects the balance of EUR -2.3 million from the purchase and sale of securities. In addition, the acquisition of consolidated companies (increase of capital stock) and investments in assets and fixed assets of EUR 0.3 million in each case led to a corresponding outflow of funds. Cash flow from financing activities in the quarter under review included the medium-term raising of money market loans (EUR 5.0 million) and a change in lease obligations of EUR -0.9 million.

2.4.8. Asset situation

Total assets of the SYZYGY Group rose by EUR 3.6 million to EUR 123.1 million in the period under review compared to December 31, 2019 (previous quarter: EUR 119.5 million).

At EUR 93.4 million, non-current assets remained virtually unchanged (previous quarter: EUR 93.3 million). Small changes were seen only in other intangible assets and fixed assets, which increased by EUR 0.8 million to EUR 32.7 million, and in goodwill, which declined by EUR 0.7 million compared to the previous quarter to stand at EUR 57.7 million. At EUR 29.6 million, current assets were significantly below the level of the prior-year quarter (EUR 37.4 million), but above the figure for December 2019 (EUR 26.1 million). The increase in current assets is primarily due to the higher level of liquid funds and securities of EUR 9.1 million compared to the year-end 2019 figure of EUR 4.5 million Accounts receivable also fell by EUR 1.7 million, while other current assets rose by EUR 0.7 million compared to the previous quarter.

Equity of EUR 52.0 million was down by EUR 1.0 million compared with December 31, 2019. This is due to a drop in other net income from EUR -1.5 million to EUR -3.2 million This item mainly comprises unrealised rate changes for foreign exchange positions. Profit reserves went from EUR 14.7 million to EUR 15.3 million This corresponds to an equity ratio of 42 per cent.

At EUR 31.8 million, current liabilities were above the level as at year-end 2019 (EUR 28.2 million). This mainly involves a rise of EUR 2.4 million in other provisions to EUR 7.3 million and in other current liabilities of EUR 8.6 million to EUR 9.3 million.

2.5. Expected performance of the SYZYGY Group

The ongoing shift of marketing budgets to the digital channel and continuing investment in digitisation of sales and marketing processes are both factors that create a favourable backdrop for the SYZYGY Group.

On the other hand, the effects of the coronavirus SARS-CoV-2 pandemic are expected to lead to a decline in spending by SYZYGY's clients. At the time of publishing this quarterly report it is not realistically possible to make precise estimates of future developments. The situation around the coronavirus SARS-CoV-2 pandemic and its economic consequences is very fluid.

On the basis of the information available to date, SYZYGY AG expects sales to fall by between 10 and 20 per cent in the 2020 financial year. With regard to profitability, we anticipate an EBIT margin (i.e. the quotient of EBIT and sales revenue) in the mid single-digit range. In Germany, sales will decline by a high single-digit amount, while the international companies will see a drop in sales of around 20–30 per cent.

Any acquisitions, which are part of the SYZYGY Group's growth strategy, may affect these forecasts positively or negatively. The results of the SYZYGY Group will be determined by the performance of the operating units and the future interest income of SYZYGY AG.

The Management Board of SYZYGY AG is therefore confirming the forecast made in the 2019 annual report.

Bad Homburg v. d. H., April 30, 2020

SYZYGY AG The Management Board

SYZYGY AG, Bad Homburg v.d.H. Consolidated balance sheet as at March 31, 2020

Assets (in kEUR)	03/31/2020	03/31/2019	12/31/2019
Non-current assets
Goodwill	57,695	58,587	58,435
Other Fixed assets, net	32,672	26,851	31,913
Non-current financial assets	200	200	200
Other non-current assets	206	318	274
Deferred tax assets	2,647	156	2,511
Total non-current assets	93,420	86,112	93,333
Current assets
Cash and cash equivalents	4,055	239	944
Marketable securities	5,029	12,057	3,642
Accounts receivable, net and contract assets	18,064	22,240	19,709
Prepaid expenses and other current assets	2,496	2,824	1,835
Total current assets	29,644	37,360	26,130
Total assets	123,064	123,472	119,463
Equity and Liablilities (in kEUR)	03/31/2020	03/31/2019	12/31/2019
Equity
Common stock*	13,500	13,500	13,500
Additional paid-in capital	27,069	27,069	27,069
Own shares	-407	-407	-407
Accumulated other comprehensive income	-3,176	-1,781	-1,529
Retained earnings	15,310	17,832	14,657
Equity attributable to shareholders of SYZYGY AG	52,296	56,213	53,290
Minorities	-343	-267	-347
Total Equity	51,953	55,946	52,943
Non-current liabilities
Long term liability	37,081	38,703	36,018
Deferred tax liabilities	2,274	262	2,276
Total non-current liabilities	39,355	38,965	38,294
Current liabilities
Income tax accruals	241	700	192
Accrued expenses	7,346	7,647	4,927
Contract liabilities	5,562	8,221	5,536
Accounts payable	9,260	11,102	9,007
Other current liabilities	9,347	891	8,564
Total current liabilities	31,756	28,561	28,226
Total liabilities and equity	123,064	123,472	119,463

*In prior year: contingent Capital kEUR 1,200.

SYZYGY AG, Bad Homburg v.d.H. Consolidated statement of comprehensive income

as at March 31, 2020

	January - March
In kEUR	2020	2019	Change	12/31/2019
Sales	14,925	15,689	-5%	64,249
Cost of revenues	-11,040	-11,393	-3%	-45,809
Sales and marketing expenses	-1,275	-1,260	1%	-5,951
General and administrative expenses	-1,887	-1,841	2%	-9,914
Impairment losses, net of trade receivables and contract assets	30	2	n.a.	-82
Other operating income/expense, net	344	245	40%	3,010
Operating profit (EBIT)	1,097	1,442	-24%	5,503
Financial income	81	154	-47%	721
Financial expenses	-220	-162	36%	-1,024
Income before income taxes (EBT)	958	1,434	-33%	5,200
Income taxes	-278	-359	-23%	-1,654
Total net income of the period	680	1,075	-37%	3,546
thereof net income share to other shareholders	27	17	59%	73
thereof net income share to shareholders of SYZYGY AG	653	1,058	-38%	3,473
Items that will not be reclassified to profit and loss:	0	0	n.a.	0
Items that will or may be reclassified to profit and loss:
Currency translation adjustment from foreign business operations	-950	469	n.a.	581
Net unrealized gains/losses on marketable securities, net of tax	-720	401	n.a.	544
Other comprehensive income	-1,670	870	n.a.	1,125
Comprehensive income	-990	1,945	-151%	4,671
thereof income share to other shareholders	4	17	-76%	77
thereof income share to shareholders of SYZYGY AG	-994	1,928	-152%	4,594
Earnings per share from total operations (basic in EUR)	0.05	0.08	-38%	0.26

Statement of changes in equity

as at March 31, 2020

							Accum, other compre hensive income
In kEUR	Number of shares (in 1,000)	Common stock	Additional paid-in capital	Own shares	Retained earnings	Foreign exchange currency	Unrealised gains and losses	Equity attributable to shareholders of SYZYGY AG	Minority interest	Total equity
January 1, 2019		13,500 13,500 27,069			-407 16,774	-2,297		-354 54,285	-284	54,001
Adjustments from first-time adoption IFRS 9							268			268
January 1, 2019, adjusted		13,500 13,500 27,069			-407 17,042	-2,297		-354 54,553	-284	54,269
Net income of the period					3,467			3,467	73	3,540
Other comprehensive income						578	544	1,122	4	1,126
Comprehensive income					3,467	578	544	4,589	77	4,666
Dividend					-5,370			-5,370	0	-5,370
Payment to minorities					-482			-482	-140	-622
December 31, 2019		13,500 13,500 27,069			-407 14,657	-1,719		190 53,290	-347	52,943
January 1, 2020		13,500 13,500 27,069			-407 14,657	-1,719		190 53,290	-347	52,943
Adjustments from first-time adoption IFRS 16										0
January 1, 2020, adjusted	13,500	13,500	27,069	-407	14,657	-1,719	190	53,290	-347	52,943
Net income of the period					653			653	27	680
Other comprehensive income						-927	-720	-1,647	-23	-1,670
Comprehensive income					653	-927	-720	-994	4	-990
March 31, 2020		13,500 13,500 27,069			-407 15,310	-2,646		-530 52,296	-343	51,953

SYZYGY AG, Bad Homburg v.d.H.

Consolidated statement of Cash Flows as at March 31, 2020

	January - March
In kEUR	2020	2019	2019
Period net income	680	1,075	3,540
Adjustments to reconcile income from operations to net cash provided by operating activities
– Depreciation on fixed assets	1,466	1,251	5,381
– Profit (-) and loss (+) on sale of securities	-10	-40	-114
– Profit (-) and loss (+) on sale of fixed assets	0	67	3,175
– changes in Earn-Out liablities	10	0	-1,345
– Profit (-)/Loss(+) on sale of fixed asset investments	0	0	0
– Other non-cash income and expenses	24	-67	31
Changes in operating assets and liabilities:
– Accounts receivable and other assets	969	-3,624	415
– Customer advances	24	-1,169	-3,937
– Accounts payable and other liabilities	-745	-6,705	-11,066
– Tax accruals and payables, deferred taxes	-80	-56	-538
Cash flows provided by operating activities	2,338	-9,268	-4,458
Changes in other non-current assets	70	-21	23
Investments in fixed assets	-279	-422	-2,114
Purchases of marketable securities	-3,258	-2,789	-6,870
Proceeds from sale of marketable securities	988	1,955	14,806
Changes from fixed asset investments	0	-163	-40
Acquisition of consolidated entities less liquid funds	-320	-462	-1,352
Interest expense on leasing liabilities	-177	0	-682
Cash flows used in investing activities	-2,976	-1,902	3,771
Change in bank loans	4,736	-25	-1,054
Repayment of lease obligations	-879	0	3,227
Dividend paid to minority shareholders	0	0	-622
Dividend paid to shareholders of SYZYGY AG	0	0	-5,370
Cash flows from financing activities	3,857	-25	-10,273
Total	3,219	-11,195	-10,960
Cash and cash equivalents at the beginning of the period	944	11,519	11,519
Exchange rate differences	-108	-85	385
Cash and cash equivalents at the end of the period	4,055	239	944

Accounting

Pursuant to the provisions of section 50 (6) of the BörsO (Stock Exchange Directive) in conjunction with Article 37 w WpHG (German Securities Trading Act), the financial report of SYZYGY AG for the first three months of 2020 comprises interim consolidated financial statements and an interim Group Management Report. The interim consolidated financial statements were prepared in accordance with the requirements of International Financial Reporting Standards (IFRS) for interim financial reporting as applicable within the European Union. The unaudited interim financial statements were prepared in compliance with IAS 34 and in accordance with DRS 16. Accordingly, the company elected to produce a short-form report, compared with the consolidated financial statements as at December 31, 2019. The Management Report was prepared in accordance with the applicable requirements of the WpHG. The interim financial report has not been audited in accordance with section 37 (w) of the German Securities Trading Act (WpHG).

With the following exceptions, the accounting and consolidation principles are applied as described in the notes to the consolidated financial statements to the 2019 Annual Report.

Business activities of the SYZYGY Group

The SYZYGY Group is an international consulting and realisation partner for the transformation of Marketing and Selling.

SYZYGY AG acts as a management holding company that provides its subsidiaries with central services relating to strategy, design, planning, technology development, accounting, IT infrastructure and finance. SYZYGY AG also supports the subsidiaries in their new business activities.

As operating entities, the subsidiaries are responsible for providing consultancy and other services. With branches in Bad Homburg v. d. H., Berlin, Frankfurt/ Main, Hamburg, London, Munich, New York and Warsaw, they offer large global companies an integrated portfolio of solutions, from strategic consulting to project planning, concepts and design to technical realisation of brand platforms, business applications, websites, hosting, online campaigns and mobile apps. Online media services such as media planning, search engine marketing/ optimisation and affiliate programmes are also a major business area.

In addition, SYZYGY helps clients meet customer experience and usability requirements and assists them at every stage of the user-centred design process. Digital illustrations and animations round off the range of services.

The Group's business focus is on the automotive, telecommunications/IT, services and consumer goods industries, as well as finance and insurances.

Scope of consolidation and principles

As at March 31, 2020, the following subsidiaries were included in the consolidated financial statements of SYZYGY AG and fully consolidated:

• Ars Thanea S.A., Warsaw, Poland (Ars Thanea)
• diffferent GmbH, Berlin, Germany (diffferent)
• SYZYGY Berlin GmbH, Berlin, Germany (SYZYGY BER)
• SYZYGY Deutschland GmbH, Bad Homburg v. d. H., Germany (SYZYGY Deutschland)
• SYZYGY Digital Marketing Inc., New York City, United States of America (SYZYGY NY)
• SYZYGY Media GmbH, Hamburg, Germany (SYZYGY Media DE)

• SYZYGY Performance GmbH, Munich, Germany (SYZYGY Performance)

• SYZYGY UK Ltd, London, United Kingdom (SYZYGY UK)

• Unique Digital Marketing Ltd, London, United Kingdom (Unique Digital UK)
• USEEDS° GmbH, Berlin, Germany (USEEDS)

Effective January 1, 2020 SYZYGY has acquired 10 percent of the shares in USEEDS° GmbH, now holding 100 percent of the shares. The record in the commercial register took place on March 28th, 2020.

Information on general consolidation principles is provided in the 2019 annual report from page 68 onwards.

Segment reporting

The application of IFRS 8 requires segment reporting in line with the Group's internal management approach. Against this backdrop, SYZYGY reports on the segments according to geographical demarcation.

SYZYGY AG as a holding company mainly provides services to the operating units and must therefore be considered separately from them in the central function area. The segment Germany consists of diffferent, SYZYGY Berlin, SYZYGY Germany, SYZYGY Media, SYZYGY Performance and USEEDS. The UK segment comprises SYZYGY UK and Unique Digital UK. SYZYGY NY and Ars Thanea are presented together under "other Segments".

The individual segments apply the same accounting policies as the Group as a whole. SYZYGY AG assesses the performance of the segments primarily on the basis of revenues and EBIT. The allocation of sales revenues to third parties is based on the location of the selling business unit. The information on the geographical areas in terms of segment sales revenue and non-current assets is derived from the segment information summarized below. The revenues reported in the segment reporting consist of revenues from external customers and inter-segment revenues. Transactions within the segments, which are generally invoiced at market prices, were eliminated.

Segment assets correspond to the sum of all assets plus goodwill attributable to the respective segment, less receivables attributable to companies in the same segment.

Segment investments comprise investments in intangible assets and property, plant and equipment.

Segment liabilities correspond to the total of all liabilities excluding equity, plus minority interests attributable to the respective segment and deferred taxes on the respective intangible assets, less liabilities attributable to companies in the same segment.

Germany	United Kingdom	Other segments	functions Central	Consolidation	Total
24,587	3,111	1,614	61	-375	28,998
-12,309	-1,414	-362	0	12	-14,073
12,278	1,697	1,252	61	-363	14,925
21	3	351	0	-375	0
1,580	-44	-127	-365	53	1,097
-42	-66	-4	-7	-20	-139
1,538	-110	-131	-372	33	958
76,911	21,019	8,793	99,184	-82,843	123.064
61,853	15,482	6,715	5,864	453	90,367
43,505	8,024	6,166	0	0	57,695
126	4	32	2,593	0	2,755
722	298	140	265	41	1,466
0	0	0	0	0	0
36,539	10,459	1,541	33,729	-11.157	71.111
386	50	78	33	0	547

03/31/2019 (in kEUR)	Germany	United Kingdom	Other segments	functions Central	Consolidation	Total
Billings	26,383	4,719	8,682	8	-404	39,388
Media costs	-14,834	-1,861	-7,005	0	1	-23,699
Sales	11,549	2,858	1,677	8	-403	15,689
of which internal sales	175	10	220	0	-405	0
Operating income (EBIT)	1,763	-39	14	-303	7	1,442
Financial income	36	-65	-7	28	0	-8
Earnings before tax (EBT)	1,799	-104	7	-275	7	1,434
Assets	78,323	55,528	14,153	89,652	-114,184	123,472
of which non-current assets	55,920	17,034	7,457	5,066	-38	85,439
of which goodwill	43,755	8,308	6,525	0	0	58,588
Investments	9,180	7,134	756	4,087	0	21,157
Depreciation and amortisation	679	303	132	452	-315	1,251
Impairment on goodwill	0	0	0	0	0	0
Segment liabilities	29,381	12,449	5,929	30,786	-11,019	67,526
Employees as per balance sheet date	365	91	82	24	0	562

Treasury stock

SYZYGY is authorised to resell or call in treasury shares or to offer treasury shares to third parties in the course of acquiring companies. Treasury shares do not entitle the Company to any dividend or voting rights. The extent of the share buyback is shown as a separate item to be deducted from equity.

On May 29, 2015, the Annual General Meeting authorised the Management Board to acquire a maximum of 10 per cent of the Company's outstanding shares until May 28, 2020. SYZYGY is authorised to resell or call in treasury shares, to offer them to employees of the Company as compensation, or to offer treasury shares to third parties in the course of acquiring companies.

As at March 31, 2020, SYZYGY held 73,528 treasury shares at an average acquisition cost of EUR 5.54.

Directors' dealings

Current holdings of shares and transactions carried out in the period under review are disclosed in the following tables:

Management Board: Shares

Number of shares	Lars Lehne	Erwin Greiner	Frank Ladner	Total
As at: 12/31/2019	10,000	0	0	10,000
Purchases	0	0	0	0
Sales	0	0	0	0
As at: 03/31/2020	10,000	0	0	10,000

Supervisory Board: Shares

Number of shares	Wilfried Beeck	Dominic Grainger	Andrew Payne	Total
As at: 12/31/2019	10,000	0	0	10,000
Purchases	5,000	0	0	5,000
Sales	0	0	0	0
As at: 03/31/2020	15,000	0	0	15,000

The members of the Management Board and Supervisory Board do not hold any options.

Management Board: Phantom stocks

Number of shares	Lars Lehne	Erwin Greiner	Frank Ladner	Total
As at: 12/31/2019	144,000	80,000	55,000	279,000
Additions	0	0	0	0
Disposals	0	0	0	0
As at: 03/31/2020	144,000	80,000	55,000	279,000

The phantom stock program was launched in 2015. The beneficiary receives the difference between the share price at grant and the share price at exercise of the phantom stock as a special payment. 40 percent of the phantom stocks granted (tranche 1) can be exercised at the earliest after 2 years and expire at the latest after 3 years, 60 percent of the phantom stocks granted (tranche 2) can be exercised at the earliest after 3 years and expire at the latest after 4 years. The maximum price increase is limited to 60 percent for tranche 1 and 90 percent for tranche 2.

The base price is EUR 9.13 for Lars Lehne and EUR 11.25 for Erwin Greiner and Frank Ladner. The maximum price increase is limited to 60 percent for tranche 1 and 90 percent for tranche 2.

Further information can be found on page 57 of the 2019 Annual Report.

Shareholders' structure

As at March 31, 2020, the shareholders' structure has not changed compared to December 31, 2019.

The shareholders' structure of the Company at the reporting date was as follows:

In Thousand	Shares	per cent
WPP plc., St. Helier	6,795	50.33
HANSAINVEST	408	3.03
Hauck & Aufhäuser Fund Services S.A.	401	2.97
Free Float	5,822	43.13
Treasury Stock	74	0.54
Total	13,500	100.00

Bad Homburg v. d. H., April 28th, 2020 SYZYGY AG

The Management Board

2020 Financial calendar

Half-Year-Report (English version: 08/07)	Annual General Meeting, Frankfurt*	9-Month-Report (English version: 11/06)
07/31	10/27	10/30
German Equity Forum, Frankfurt*	MKK – Munich Capitalmarket conference*
11/16-18	12/08-09

All dates are subjects to change.

* Current informations are available at ir.syzygy.net

CONTACT/IMPRESS

SYZYGY AG HOREXSTRASSE 28 D-61352 BAD HOMBURG V.D.H. T +49 6172 9488–252 F +49 6172 9488–270 IR@SYZYGY.NET SYZYGY.NET

CHAIRMAN OF THE SUPERVISORY BOARD: WILFRIED BEECK MANAGEMENT BOARD: ERWIN GREINER, FRANK LADNER

EDITORIAL DEPARTMENT: SYZYGY AG PHOTOGRAPHY: SYZYGY, FRANZISKA TAFFELT, ANETA POMIECZYNSKA