technotrans SE — Investor Presentation 2020

Aug 11, 2020

PRESENTATION OF THE RESULTS FOR THE FIRST SIX MONTHS 2020

August 11, 2020

MANAGEMENT SUMMARY

› Conslidated revenue of € 95.1 million realised, only 7.3 % below the previous year

• → Revenue decline below VDMA calculated industry average Jan. June 2020
• → Diversification has a stabilising effect
• › EBIT remains positiv with € 2.8 million, EBIT margin at 3.0 %
• › The adjusted EBIT Margin was increased for 4.0 % to 4.2 % compared to the previous year
  • → COVID-19 independent one-off expenses in the amout of € 1.2 million included
  • → Adjusted EBIT reaches € 4.0 million
  • → Measures for strict cost control take effect (among others short-time-work used)
• › Earnings per share at € 0.26
• › Net worth and financial position remain solid
  • → Equity ratio: 50.4% / Cash and Cash equivalents: € 22.8 million
• › Free cashflow at € -1.3 million

DEVELOPMENT IN OUR MARKETS IN THE FIRST SIX MONTHS

Print:

Extensive burdens from COVID-19: Deferred investments and postponed repairs led to to lower demand for technotrans equipment from press manufacturers and end customers.

Laser- and machine tool industry:

A broader diversification on the customer side and a continuously growing EUV business had a stabilizing effect.

Plastic processing:

Development in line with expectations. Group companies achieve sales growth compared to the previous year.

Growth markets: E-Mobility:

Major serial orders acquired in the railway technology sector. Leading position expanded. High prior-year sales of rapid-charging columns could not be maintained due to reduced market dynamics. Medical- and scannertechnology: Pre-series order for blood cooling solution received.

Pleasing sales figures for cooling devices for baggage scanners. Airports use market weakness to modernization.

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TECHNOTRANS COVID-19 UPDATE

› Employees and company:

Extensive measures Measures to protect employees against infection and to safeguard business operations will continue unchanged.

› Operating activities:

German plants have been producing without interruption since the beginning of the year. Production in China has returned to normal.

› Sales:

Global travel restrictions affect our service and sales activities. Order intake weakened noticeably in the 2nd quarter.

› Supply chain:

The supply of components and parts was always sufficiently ensured under difficult delivery conditions.

› Cost structure:

Strict cost control and comprehensive measures to further reduce personnel and material costs. In June, 640 employees (= 57 % of the workforce) in Germany were on short-time working. This reduced capacities by around 25 % in June.

DEVELOPMENT IN OUR MARKETS – OUTLOOK 2020

Print:

Continued high volatility of order intake due to COVID-19 expected.

Negative effects in the shorter-term serial business expected in Q3. EUV business remains stable.

Plastic processing:

Project business with comparatively stable outlook. Series business with increased volatility.

Growth markets:

E-Mobility: Positive sales expectation based on new business concluded. Revival in the fast-charging segment is not expected before 2021 at the earliest.

Medical- und scannertechnology

The first units are scheduled for delivery from the fourth quarter of 2020. Continued positive development in cooling solutions for baggage scanners expected. o/-

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KEY FIGURES FIRST SIX MONTHS 2020

€ million	H1 2019	H1 2020	Δ
Revenue	102.6	95.1	-7%
EBITDA	7.6	6.3	-17%
EBIT	4.1	2.8	-31%
EBIT margin (%)	4.0%	3.0%
Net profit for the period	2.7	1.8	-34%
Earnings per share (€)	0.39	0.26

	31/ Dez/ 2019	30/ Jun/ 2020
Equity	75.1	76.7	2%
Equity ratio (%)	51.4%	50.4%
Net debt	24.2	25.8	7%
Ø Employees (FTE)	1,280	1,280	0%

• › Positive EBIT generated
• › COVID-19-independent one-offs:
  • › € 1.8 million expenses from structural and personnel measures
  • › € 0.6 million income from the termination of fine proceedings (BaFin)
• › Adjusted result:
  • › EBIT: € 4.0 million
  • › EBIT margin: 4.2 %
• › Equity ratio > 50%

PERFORMANCE SEGMENT TECHNOLOGY

• › Half-year revenue for the Technology segment of € 69.4 million (previous year: € 73.3 million) fell by 5.3%, largely due to corona.
• › The segment EBIT of € -0.7 million (previous year: € -0.1 million) is largely attributable to the weak revenue volume and non-recurring effects from COVID-19-independent structural costs and extraordinary income from the reversal of a provision for a terminated fine proceedings (BaFin)
• › After adjustment for these one-off effects, the Technology segment achieved EBIT of € +0.3 million with an EBIT margin of 0.4 %

8 technotrans | August 11, 2020

PERFORMANCE SEGMENT SERVICES

• › Revenue for the first six months amounted to € 25.7 million, compared with € 29.3 million in the previous year. The 12.1% decline is mainly due to COVID-19 related travel restrictions, which have impacted the performance in the second quarter of 2020
• › With EBIT of € 3.5 million in the first six months (previous year: € 4.2 million), the segment result is proving to be comparatively robust
• › The EBIT margin in the Services segment fell to 13.6 %. Adjusted for one-time effects the segment achieved an EBIT margin of 14.5% at the previous year's level

KEY PERFORMANCE INDICATORS

Equity base remains solid (€ million / %)

Net debt increased (€ million)*

FINANCIAL POSITION

Financial liabilities 2017-2020 short-term/long-term (€ million)

H1 2020 incl. liabilities from leases € 2,1 million (long term) and € 2.0 million (short term)

14.8 15.6 20.9 22.8 2017 2018 2019 H1 2020

Net-Working Capital 2017-2020 (€ million)

BUSINESS MODEL

BUSINESS MODEL

Data as of June 30, 2020

GROWTH STRATEGY

THE TECHNOTRANS GROUP

Termotek founded 1998 (ttGROUP2011)

Hauptsitz (founded 1970) tt Taicang founded 2013 (ttGROUP2013)

Headquarter:

technotrans SE, Sassenberg, Germany

• › 1,445 employees (June 30, 2020)
• › IPO: 1998
• › 18 locations, thereof 7 production sites (5 x Germany, China, USA)
• › Worldwide sales- and services network

INTERNATIONAL FOOTPRINT

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"SHAPING THE FUTURE THROUGH DEVELOPMENT!"

KEY AREAS OF THE STRATEGIC REORIENTATION

• › Create an integrated Group to reinforce the global brand "technotrans"
• › Establish industry focus in sales independent from location
• › Enhance competecies of locations in order to prevent parallel structures
• › Improve innovative strength
• › Adjust organisational structure
• › Leverage additional synergies, expand shared service functions

2020 - 2025

"SHAPING THE FUTURE THROUGH DEVELOPMENT!"

CURRENT STATUS OF STRUCTURAL MEASURES

"SHAPING THE FUTURE THROUGH DEVELOPMENT!"

MID-TERM TARGETS 2025

	Organic growth ›
Group	5 – 6 % p.a. ›
revenue	Increase market penetration with existing and new customers trough solutions at ›
€ 250m	the latest technical level
+	M & A ›
€ 50m	Opening up new markets and fields of application ›
	Further sharpening technological expertise trough strategic additions ›
(approx.)	Extend regional coverage ›

EBIT margin

› Efficiency program

• › Establish production sites with high specialisation of flexibility
• › Increase capacity utilisation, flexibility and quality level
• › Optimize production processes (operational excelence)
• › Consolidate production volumes
• › Realise additional synergy potentials
• › Reduce complexity– increase fixed cost degression

≈ 10 % p.a.

THE BOARD OF MANAGEMENT

Michael Finger (Dipl.-Ing.) CEO

• › Spokesman of the Board of Management (DOB 1970)
• › Since May 2020 member of the Board of Management
• › Responsible for Markets (Sales & Services, Quality Management and Marketing)

Dirk Engel (Dipl. Kfm.) CFO

• › Member of the Board of Management (DOB 1967)
• › Since 2004 Head of Corporate Accounting, since 2006 Chief Financial Officer, since March 12, 2018 Spokesman of the Board of Management
• › Responsible for Finance & Administration (Finance/Controlling, Human Resources, IT, Legal & Compliance and Investor Relations)

Peter Hirsch (Dipl.-Ing.) CTO / COO

• › Member of the Board of Management (DOB 1972)
• › Since 2013 Business Development Manager, since 2014 Managing Director of termotek GmbH, since July 1, 2018 member of the Board of Management
• › Responsible for Technology & Operations (Research & Development, Electrical engineering, Production, Purchasing and Logistics)

THE TECHNOTRANS SHARE

TECHNOTRANS SHARE AND SHAREHOLDER STRUCTURE

Market capitalisation: € 100.9 (August 7, 2020)

Dividend policy: Distribution of up to 50% of the consolidated net profit

PERFORMANCE OF SHARE PRICE AND RESEARCH

		Research
Bankhaus Lampe	TP € 22.00, buy	2020-08-07
Warburg Research	TP € 26.80, buy	2020-05-04
Hauck + Aufhäuser	TP € 24.00, buy	2020-03-11
Commerzbank	TP € 11.50, reduce	2020-04-15
Berenberg	TP € 12.00, hold	2020-03-13

2019:	Share Price as	Market Cap as
Max:	of	of
€ 30.00 Min:	30/12/2019:	30/12/2018:
€ 24.00	€ 18.70	€ 129.2 Mio.
H1 2020:	Share Price as	Market Cap as
Max:	of	of
€ 20.85 Min:	08/07/2020:	08/07/2020:
€ 10.14	€ 14.60	€ 100.9 Mio.

Share prices = XETRA closing prices

EQUITY STORY

• › Niche supplier for technologically sophisticated solutions
• › High market entry barriers for competitors due to special know-how in "liquid technology" and focus on individual solutions
• › Diversified product portfolio focused on growth markets
• › Limited cyclicity through product/market diversification and comprehensive complementary services
• › International network as a base for the development of new customers and markets
• › Growth strategy focused on revenue and profitability
• › Adequate participation of shareholders in the company's success, dividend policy generally provides for distribution of up to 50% of the consolidated net income
• › Committment to sustainability

FINANCIAL CALENDAR 2020

November 10, 2020 Quarterly Communication 1-9/2020
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EVENTS 2020

August 18-19, 2020	Bankhaus Lampe Conference
September 22, 2020	Berenberg / Goldman Sachs Conference
November 16-18, 2020	Deutsches Eigenkapitalforum
Dezember 2, 2020	Berenberg Pennyhill Conference

As a result of the COVID 19 pandemic, numerous events (investor conferences, roadshows) were cancelled or postponed by the organisers.

technotrans is available at all times for virtual meetings and conference calls.

CONTACT

Frank Dernesch Manager Investor Relations & Corporate Finance

Tel. +49 (0)2583 301-1868 Fax +49 (0)2583 301-1054 frank.dernesch@technotrans.de

This presentation contains statements on the future development of the technotrans Group.

These reflect the present views of the management of technotrans SE and are based on the corresponding plans, estimates and expectations. We point out that the statements are subject to certain risks and uncertainties which could mean that the actual results differ considerably from those expected.

CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 2020

ASSETS	30/06/2020	31/12/2019
	€ '000	€ '000
Non-current assets
Property, plant and equipment	35,063	33,268
Right-of-use assets	3,388	3,846
Goodwill	23,513	23,513
Intangible assets	6,940	7,493
Other financial assets	170	185
Deferred tax	1,483	1,484
	70,557	69,789
Current assets
Inventories	31,417	28,257
Trade receivables	23,421	24,039
Income tax receivable	294	349
Other financial assets	1,583	733
Other assets	2,199	1,926
Cash and cash equivalents	22,812	20,910
	81,726	76,214
Total assets	152,283	146,003

EQUITY AND LIABILITIES	30/06/2020	31/12/2019
	€ '000	€ '000
Equity
Issued capital	6,908	6,908
Capital reserve	19,097	19,097
Retained earnings	55,456	49,367
Other reserves	-6,563	-6,394
Net profit for the period	1,781	6,089
Total equity attributable to technotrans SE shareholders	76,679	75,067
Non-current liabilities
Borrowings	33,054	33,760
Employee benefits	824	809
Other financial liabilities	2,111	2,607
Deferred tax	523	657
	36,512	37,833
Current liabilities
Borrowings	11,507	6,696
Trade payables	5,774	5,952
Prepayments received	4,465	4,242
Employee benefits	7,083	5,154
Provisions	3,280	3,891
Income tax payable	835	745
Other financial liabilities	3,338	2,991
Other liabilities	2,810	3,432
	39,092	33,103
Total equity and liabilities	152,283	146,003

CONSOLIDATED INCOME STATEMENT JANUARY 1 – JUNE 30, 2020

	01/04 - 30/06/2020	01/04 - 30/06/2020	01/01 - 30/06/2020	01/01 - 30/06/2019
	€ '000	€ '000	€ '000	€ '000
Revenue	42,977	49,522	95,138	102,591
of which Technology	31,401	35,218	69,435	73,337
of which Services	11,576	14,304	25,703	29,254
Cost of Sales	-31,080	-35,928	-68,312	-72,162
Gross profit	11,897	13,594	26,826	30,429
Distribution costs	-4,782	-6,358	-10,756	-12,579
Administrative expenses	-4,387	-4,686	-9,599	-9,611
Development costs	-1,504	-1,911	-3,936	-3,966
Net impairment losses on financial and contract assets	-23	-43	-99	-242
Other operating income	288	538	1,310	1,018
Other operating expenses	-427	-369	-928	-950
Earnings before interest and taxes (EBIT)	1,062	765	2,818	4,099
Financial income	14	13	14	13
Financial charges	-174	-156	-341	-329
Net finance costs	-160	-143	-327	-316
Profit before tax	902	622	2,491	3,783
Income tax expense	-256	-163	-710	-1,076
Net profit for the period	646	459	1,781	2,707
Earnings per share (€)
basic / diluted	0.09	0.07	0.26	0.39

Previous year's figures partly adjusted.

CONSOLIDATED CASH FLOW STATEMENT JANUARY 1– JUNE 30, 2020

	30/06/2020	30/06/2019
	€ '000	€ '000
Cash flow from operating activities
Net profit for the period	1,781	2,707
Adjustments for:
Depreciation and amortisation	3,498	3,464
Income tax expenses	710	1,076
Gain (-)/loss (+) on the disposal of property, plant and equipment	-16	-99
Foreign exchange losses (+)/gains (-)	-116	5
Net finance costs	327	316
Other non-cash changes	0	-3
Change in: Inventories	-3,160	-4,731
Receivables and other current assets	-504	2,369
Other non-current assets	16	-14
Liabilities and prepayments	-286	3,794
Provisions and employee benefits	1,333	-758
Cash from operating activities	3,583	8,126
Interest received	14	0
Interest paid	-300	-291
Income taxes paid/income tax rebates	-568
		-1,621

01/01 -

01/01 - 30/06/2019

	31/03/2020	31/03/2019
	€ '000	€ '000
Cash flow from investing activities
Cash payments for investments in property, plant and equipment and in intangible assets	-4,046	-5,234
Proceeds from the sale of property, plant and equipment	61	78
Net cash used for investing activities	-3,985	-5,156
Cash flow from financing activities
Cash receipts from the raising of short-term and long-term loans	7,750	4,061
Cash payments from the repayment of loans	-3,389	-2,786
Distribution to investors	0	-6,079
Cash payments from the repayment of lease liabilities	-1,189	-1,158
Net cash used in financing activities	3,172	-5,962
Net increase/decrease in cash and cash equivalents	1,916	-4,904
Cash and cash equivalents at start of period	20,910	15,566
Net effect of currency translation in cash and cash equivalents	-14	0
Cash and cash equivalents at end of period	22,812	10,662

01/01 - 31/03/2020	01/01 - 31/03/2019
€ '000	€ '000
-4,046	-5,234

Previous year's figures partly adjusted.