technotrans SE

Quarterly Report • Nov 7, 2023

Key figures of the technotrans Group (IFRS)

		previous year	01/01 30/09/2023	01/01 30/09/2022	2022
Revenue		12.7 %	199,255	176,805	238,218
Technology		14.3 %	152,547	133,514	180,203
Services		7.9 %	46,708	43,291	58,015
EBIT		-3.5 %	10,064	10,429	14,329
EBIT margin	%		5.1	5.9	6.0
Net profit for the period1		-18.7 %	5,599	6,884	8,900
as percent of revenue	%		2.8	3.9	3.7
ROCE	%		12.3	12.4	13.3
Earnings per share			0.81	1.00	1.29
Balance sheet total assets		7.7 %	175,199	165,474	162,715
Equity*		2.0 %	92,916	88,906	91,070
Equity ratio	%		53.0	53.7	56.0
Net debt*2		14.8 %	29,790	26,828	25,957
Free cash flow3			2,963	-5,338	-3,738
Employees (balance sheet date)*		8.1 %	1,622	1,476	1,500

*Change compared to December 31, 2022

¹Result for the period: Profit attributable to shareholders of technotrans SE

²Net debt: interest-bearing financial liabilities (including lease liabilities in accordance to IFRS 16 minus cash and cash equivalents

³ Free cash flow: Net cash from operating activities

plus Net cash used for investments according to cash flow statement

Quarterly Communication January 1 - September 30, 2023

technotrans maintains revenue growth and realises EBIT rise in Q3

Development of key figures in the first 9 months 2023

		Q1	Q2	Q3	9M	Change from previous year
Revenue		68.3	64.1	66.8	199.3	(+ 12.7 %)
EBIT		3.5	2.4	4.2	10.1	(-3.5 %)
EBIT margin	%	5.2	3.7	6.2	5.1	(-0.8 pp)
ROCE*	%	13.0	12.4	12.3	12.3	(-0.1 pp)

* EBIT rolling

In a challenging economic environment technotrans maintained its revenue growth and achieved a rise in EBIT. In the third quarter of the 2023 financial year, the Group realised a consolidated revenue of %. It achieved a solid performance for the quarter, in line with the more dynamic earning capacity expected in the second half of 2023 based on the easing of temporary pressures on earnings and the adjustments made to selling prices mid-way through the year.

The focus markets Plastics, Energy Management, Print and the Laser & Machine Tools market again delivered clear year-on-year revenue growth in the period under review. With an increase in revenue by 87 %, Energy Management achieved the most dynamic performance. Only the Healthcare & Analytics focus market did not reach previous year's revenue level. This development was due to the consolidation of stock levels of technotrans systems by customers, as presented in the Interim Report. However, this pattern of demand has broadly returned to normal since August 2023.

The availability of input materials has fundamentally continued to improve. The only exception is individual electronic components and control equipment. Despite falling commodity prices, the prices of materials remain high because of the delay in a positive price effect filtering through to component level. The order backlog was reduced supply chain. In addition, the level of orders in individual markets showed initial signs of a slower economic development. The book-to-bill ratio remained unchanged at 0.9.

margin of 2.7 % (previous year: 3.4 %). In the Services segment, revenue rose by 7.9 million, with an EBIT margin of 12.6 % (previous year: 13.6 %).

-5.3 million. The main factor behind this change was the higher cash flow from operating activities. The equity ratio of 53.0 % indicates steadily solid economic circumstances.

The Board of Management is satisfied with the course of business in the third quarter, even though the earnings performance in the first 9 months was below expectations due to the prevailing conditions.

The forecast revised on August 2, 2023 is confirmed and now envisages consolidated revenue at the 255 to 265 million range for the 2023 financial year, yielding an EBIT margin of 5.0 % to 6.0 %. The mid-range forecast remains valid.

Presentation of significant events and business performance in the first 9 months 2023

Development of the markets

Plastics focus market: the positive business performance continued. The mainstays included OEM business. New orders were secured especially for variothermal temperature control systems, freezer equipment and systems that run on the natural refrigerant propane (R290). technotrans uses this refrigerant in a wide range of innovative cooling systems that it showcased to a wide audience at the Fakuma 2023 industry exhibition. To some extent orders for large-scale refrigeration plants were postponed due to sharply higher interest rates that prompted investment hold-back among individual customers. Revenue for the nine-month period is roughly 8 % up on the equivalent period of the previous year.

Energy Management focus market: the 87 % revenue gain compared with the previous year is evidence that this area is enjoying a continued high growth momentum. The main factors behind its robust health are the consistently high number of battery thermal management systems (BTMS) delivered for rail vehicles and escalating demand for solutions for battery-buffered ultra-rapid charging stations. We have also made significant progress in expanding our market position for liquid cooling for data centres.

Healthcare & Analytics focus market: following on from the consolidation of stock levels at one major Healthcare & Analytics customer as described in the Interim Financial Report, demand has almost returned to normal since August 2023. Unit sales of other systems in this market have progressed according to plan. Development work in the complementary area of activity of thermal management solutions based on the natural refrigerant propane (R290) was intensified. This is a clear declaration by technotrans that it aims to reduce the global warming potential (GWP) of its products, using a solution that is also transferable to other markets. The revenue volume was around 21 % down on the scribed.

Print focus market: the Print focus market continued to develop more strongly than forecast in the Future Ready 2025 strategy. Packaging printing of cartons and films was the main driver of the positive business performance in the period under review. This more than compensated for the weaker performance of newspaper printing, leading to an overall 12 % rise in revenue.

Laser & Machine Tools: the Laser & Machine Tools area again achieved comparable growth to the preceding quarter in Q3. However, there were initial signs of a cyclical drop in investment activity. Overall, earnings for the nine-month period showed 13 % growth on the prior-year period. The clean room has moreover enabled technotrans to consolidate its position as a partner for laser-based processes in the semiconductor industry and to increase its capacity utilisation yet further.

Strategy

Since the publication of the Future Ready 2025 strategy in 2020, external factors have brought about a huge shift in the general situation. This prompted the Board of Management to commission an external consultancy in May 2023 to review the original strategic assumptions. The assignment was carried out in Q2 and Q3 2023.

The main outcome was that the general strategic direction as implemented by the Board of Management and the objective of the technotrans Group were in essence confirmed. The core technology of thermal management is underpinned by global megatrends such as electrification, digitalisation and decarbonisation, thus offering consistently high organic growth and profit potential. The focus on the Plastics, Healthcare & Analytics, Energy Management and Print markets enables technotrans to serve virtually every market segment that it considers attractive. One visible sign of the tec company to achieve significant growth even in economically unsettled times.

In light of the dynamic growth that Phase II of the Future Ready 2025 strategy is designed to deliver, the review provided a sharper emphasis and focus on individual aspects of the strategy. These aspects include the future elevation of the market for highly specific laser applications to the status as a focus market. The crucial factors behind this assessment are the significant growth achieved in the 2021 and 2022 financial years along with the positive market opportunities for the laser market.

As regards future product development and the general sales emphasis, there has been a shift in all of the now five focus markets towards modular products with scalable volumes. In parallel, expanding the range of services guarantees an appropriate share of recurring revenue. One further area of action involves focusing geographically on the Europe and North America regions and giving sales, purchasing and service operations. Suitable M&A opportunities are considered as a means of accelerating strategic growth. However, the overriding goal remains a steady, organic rise in revenue and earnings.

The potential ways identified for achieving this goal will be elaborated over the coming weeks and incorporated into the strategic roadmap. Each of them will be assigned specific measures. These will be steadily implemented by Group-wide project management in order to realise the short and medium-term revenue and earnings potential in each case.

Sustainability

presented in the 2022 Annual Report, technotrans has virtually eliminated printed documentation thanks to the easybrowse content delivery portal operated by the Group subsidiary gds. This form of digitalisation helps technotrans save 1.3 million sheets of paper printed on both sides every year, at the Sasse

The drive to electrify the vehicle fleet continued. Since August, there have been two fully electric pool vehicles at Sassenberg. Such vehicles are also already available at the Meinerzhagen and Holzwickede locations. Work is just beginning at Sassenberg on the installation of an extensive charging infrastructure.

Change on Supervisory Board

Sebastian Reppegather resigned from the Supervisory Board with due notice for personal reasons with effect from August 31, 2023, pursuant to Section 12 (4) of the Articles of Association of the company.

By resolution dated September 29, 2023, the Local Court of Münster appointed Florian Herger as his successor until the next Annual General Meeting. His appointment was made on the application of the Board of Management and the Supervisory Board Chair. Florian Herger is currently responsible for listed investments at Luxempart S.A..

Economic environment / procurement markets

The economic environment continues to deteriorate. In its World Economic Outlook dated October 2023, the International Monetary Fund (IMF) anticipates that the global economy will grow by 3.0 % in 2023. For Germany, the IMF forecasts a contraction of 0.5 % for 2023. The German government likewise expects economic output to decline by 0.4 % this year. Key factors are the effects of higher interest rates on demand and the weakening effect this has had on industrial output. The trend is also evidenced by a declining order backlog in manufacturing industry. For August 2023, the Federal Statistical Office reported a 0.7 % dip on the previous month. In the mechanical engineering sector, this trend is even more marked at minus 1.0 %. The order reach fell to 7.1 months, its lowest level since June 2021. With the exception of electronic components and control equipment, the availability of input materials has improved further. Meanwhile the prices of materials remain high.

Overall statement by the Board of Management on the business performance

achieved a good performance in Q3 2023, confirming the expected higher earnings momentum in the second half of the year. This was substantially based on its consistent implementation of Phase II of the Future Ready 2025 strategy, extensive sales activities and the Board

The Board of Management is satisfied with the course of business in the third quarter. However, earnings performance in the first 9 months was below expectations due to the difficult conditions in the first half of the year."

Revenue and financial performance (in m

	01/01 30/09/2023	01/01 30/09/2022	Change from previous year
Revenue	199.3	176.8	12.7 %
Cost of sales	-146.6	-127.6	14.9 %
Gross profit	52.7	49.2	7.0 %
Distribution costs	-20.8	-19.5	6.4 %
Administrative expenses	-17.2	-15.5	11.3 %
Other income/expenses	-4.6	-3.8	21.9 %
EBIT	10.1	10.4	-3.5 %
Net profit for the period*	5.6	6.9	-18.6 %
	0.81	1.00	-19.0 %

* Profit attributable to shareholders of technotrans SE

Revenue performance

Management, Healthcare & Analytics and Print accounted for a 73 % share of this figure. The absolute year-onmarket, which gained 87 %.

Earnings situation

The significantly more difficult economic environment impacted the business performance in the first nine months and demanded considerable flexibility from market operators. In this challenging environment, technotrans performed well in the third quarter. The EBIT margin was increased from 4.5 % as published in the Interim Report to 5.1 %. This also demonstrated that the temporary burdens on earnings reported in the first half have eased considerably, as expected.

million). The change in the gross margin to 26.4 % (previous year: 27.8 %) was driven by the time lag, as previously mentioned in the 2023 Interim Financial Report, between price increases for materials and selling price rises, start-up and training costs from setting up the new production location in Steinhagen, the increased use of temporary personnel for clearing back orders as well as consultancy costs for the strategy review. The gross margin showed a slight improvement on the position on June 30, 2023. EBITDA was almost unchanged Temporary burdens particularly in the first half and the very volatile market environment led to a consolidated operating result an EBIT margin of 5.1 % (previous year: 5.9 %). The return on capital employed (ROCE) reached 12.3 % (previous year: 12.4 %). The consolidated result after tax for the period u 1.00).

The results for the segments developed as follows: the Technology segment achieved an EBIT margin of 2.7 % (previous year: 3.4 %), reflecting the temporary burdens outlined above. Long-term price agreements with customers coupled with higher prices for materials and the increased use of contractors led to an EBIT margin of 12.6 % for the Services segment (previous year: 13.6 %). Compared with the first-half year margins of 2.0 % for the Technology segment and 12.4 % for the Services segment, this reveals a positive trend now that the temporary burdens on margins as outlined above are coming to an end and the effect of price adjustments is filtering through.

Key figures of the segments

		Technology			Services		technotrans Group
		9M 2023	9M 2022	9M 2023	9M 2022	9M 2023	9M 2022
Revenue		152.6	133.5	46.7	43.3	199.3	176.8
EBIT		4.2	4.5	5.9	5.9	10.1	10.4
EBIT margin	%	2.7	3.4	12.6	13.6	5.1	5.9

Net worth

2022 yearprocurement market prices and expanded business activity. The strong business performance in 15.0 million. The expanded business activity led to higher trade payables and advances received. Equity at the end of the period

Asset and capital structure

Assets	30/09/2023	31/12/2022
Fixed assets	68.0	67.6
Inventories	51.5	50.2
Trade receivables	35.3	27.4
Cash	15.0	12.5
Other assets	5.4	5.0
Total	175.2	162.7

Equity and Liabilities	30/09/2023	31/12/2022
Equity	92.9	91.1
Borrowings	44.8	38.4
Employee benefits	8.0	6.8
Provisions	3.4	3.4
Trade payables	10.1	7.4
Payments received	7.5	6.8
Other liabilities	8.5	8.9
Total	175.2	162.7

Financial position

The positive development in business in the period under review was reflected in the steady cash flow prices and the rise in receivables were much milder than in the reference period. Net cash from the prior- - 8.3 million compared with the position on September 30, 2022.

No new financing was raised in Q3 2023.

The liquidity base remained correspondingly comfortable.

Cash

	01/01 30/09/2023	01/01 30/09/2022
Cash flow from operating activities	15.4	15.5
Net cash flow from operating activities	6.1	-3.5
Cash flow from investing activities	-3.1	-1.8
Free cash flow	3.0	-5.3
Cash flow from financing activities	-0.4	-2.9

Report on post-balance sheet date events and risks report

No events with a particular impact on the net assets, financial position and results of operations of the technotrans Group occurred after September 30, 2023.

The relevant opportunities and risks for the future development of the technotrans Group and the risk management system implemented were presented in detail in the 2022 Annual Report and 2023 Interim Financial Report. The opportunity and risk situation of the Group has not changed from the position set out in the Interim Financial Report.

Outlook

Expected framework conditions

The escalation of hostilities in the Middle East prompted a marked deterioration in the geopolitical environment in October 2023. Meanwhile the further course of the conflict between Russia and Ukraine remains uncertain. There is also growing tension between the United States and China. The economic outlook, too, has deteriorated further. In its World Economic Outlook for the global economy in 2024 published in October 2023, the IMF now forecasts 2.9 % growth (previously: 3.0 %). Next year, the euro zone is also set for lower growth of 1.2 % compared with the forecast in the previous outlook dated July (1.5 %). For Germany, the IMF anticipates growth of merely 0.9 % (previously: 1.3 %). Global inflation in 2024 according to IMF estimates will reach 5.8 %. On this basis it is clear that prices of materials and interest rates will remain high. The investment propensity will therefore be muted.

Expected business development of the Group

The assumptions made in the 2022 Annual Report about the future business performance remain fundamentally valid.

There has been a further deterioration in the economic environment compared with Q2 2023. This has been evidenced in particular by the declining level of orders received in the Plastics, Healthcare & Analytics and Laser areas, due to restrained investment activity among other factors. Nor are there any signs of an improvement in the economy in China; the Taicang location will therefore again fail to make a positive profit contribution in the 2023 financial year.

Notwithstanding this environment, technotrans will press ahead consistently with Phase II of the Future Ready 2025 strategy. The findings of the strategy review are also being taken on board.

In consideration of the performance realised in the period under review, for the 2023 financial year the Board of Management stands by its expectation of consolidated revenue at the upper end of the of 5.0 % to 6.0 %. The return on capital employed (ROCE) is expected to be in the range of 13.0 % to 14.0 %.

The medium-term forecast for the 2025 financial year remains valid, envisaging revenue in the range of 9.0 % to 12.0 % and ROCE in excess of 15.0 %. It is based on the assumption that economic circumstances will continue to develop as for the 2023 financial year.

Consolidated Balance Sheet

Assets

	30/09/2023	31/12/2022
Non-current assets
Property, plant and equipment	36,281	35,670
Right-of-use assets	4,566	3,925
Goodwill	23,513	23,513
Intangible assets	3,604	4,531
Other financial assets	213	215
Deferred taxes	741	741
	68,918	68,595
Current assets
Inventories	51,508	50,203
Trade receivables	35,324	27,394
Income tax receivable	67	565
Other financial assets	1,362	967
Other assets	3,005	2,546
Cash and cash equivalents	15,015	12,445
	106,281	94,120
Total assets	175,199	162,715

Equity and Liabilities

	30/09/2023		31/12/2022
Equity
Issued capital	6,908	6,908
Capital reserve	19,097	19,097
Retained earnings	65,972	61,494
Other reserves	-4,661	-5,329
Net profit for the period	5,599	8,900
Total equity attributable to technotrans SE shareholders	92,915	91,070
Non-controlling interests in equity	1	0
	92,916	91,070
Non-current liabilities
Borrowings	31,089	18,908
Employee benefits	1,109	1,058
Other financial liabilities	2,779	2,350
Deferred taxes	684	821
	35,661	23,137
Current liabilities
Borrowings	9,083	15,492
Trade payables	10,065	7,363
Prepayments received	7,451	6,820
Employee benefits	6,915	5,730
Provisions	3,443	3,394
Income tax payable	2,904	4,359
Other financial liabilities	3,252	3,267
Other liabilities	3,509	2,083
	46,622	48,508
Total equity and liabilities	175,199	162,715

Consolidated Income Statement

	01/01/ - 30/09/2023	01/01/ - 30/09/2022
Revenue	199,255	176,805
of which Technology	152,547	133,514
of which Services	46,708	43,291
Cost of Sales	-146,565	-127,578
Gross profit	52,690	49,227
Distribution costs	-20,774	-19,517
Administrative expenses	-17,235	-15,489
Development costs	-4,086	-3,910
Income/expenses from impairment losses on financial assets and contract assets	-170	-80
Other operating income	1,005	1,564
Other operating expenses	-1,366	-1,366
Earnings before interest and taxes (EBIT)	10,064	10,429
Financial income	55	2
Financial expenses	-1,221	-596
Financial result	-1,166	-594
Profit before tax	8,898	9,835
Income tax expense	-3,299	-2,951
Net profit for the period	5,599	6,884
of which:
Profit attributable to technotrans SE shareholders	5,599	6,884
Profit attributable to non-controlling interests	0	0
basic / diluted	0.81	1.00
Overall result for the financial year	6,455	7,115

Condensed Consolidated Cash Flow Statement

	01/01/ - 30/09/2023	01/01/ - 30/09/2022
Cash flow from operating activities
Net profit for the period	5,599	6,884
Adjustments for:
Depreciation and amortisation	5,228	5,008
Other	4,579	3,595
Cash flow from operating activities before working capital changes	15,406	15,487
Change in:
Inventories	-1,305	-14,510
Receivables and other current assets	-8,781	-11,795
Liabilities and prepayments	4,543	7,024
Provisions and employee benefits	1,285	2,090
Cash from operating activities	11,148	-1,704
Other	-5,053	-1,765
Net cash from operating activities	6,095	-3,469
Cash flow from investing activities
Cash payments for investments in property, plant and equipment and in intangible assets	-3,256	-2,051
Proceeds from the sale of property, plant and equipment	125	182
Net cash used for investing activities	-3,131	-1,869

	01/01/ - 30/09/2023	01/01/ - 30/09/2022
Cash flow from financing activities
Cash receipts from the raising of short-term and long-term loans	18,500	7,000
Cash payments from the repayment of loans	-12,728	-5,308
Distribution to investors	-4,421	-3,523
Other	-1,712	-1,020
Net cash used in financing activities	-361	-2,851
Change in cash and cash equivalents	2,603	-8,189
Cash and cash equivalents at start of period	12,445	18,651
Net effect of currency translation in cash and cash equivalents	-33	74
Cash and cash equivalents at end of period	15,015	10,536

Information for shareholders

The following section summarises the key information for shareholders in the period under review. Further information can be found on our website.

Key figures for technotrans shares

	01/01 - 30/09/2023	01/01 - 30/09/2022	2022
Trading price (XETRA closing price)
High	29.20	29.50	29.50
Low	16.45	21.55	21.55
Reporting Date	16.65	25.00	25.45
Market Capitalisation at Reporting Date	115.0	172.7	175.8
Net profit per share	0.81	1.00	1.29

Performance of technotrans shares (XETRA)

The publication of the adjusted forecast for the 2023 financial year on August 2, 2023 did not result in any price correction of note. In addition, the stock markets are troubled by higher real interest rates and economic worries. At the end of the period under review technotrans shares were trading on Xetra around 37 % lower than at the start of the year, with an average daily Xetra trading volume of around 3,500 units. This compares with growth of 8 % and 12 % respectively for the SDAX and DAXsector Technology.

Analyst ratings as of September 30, 2023

Institution	Recommendation	Price target
Hauck & Aufhäuser	buy
Kepler Cheuvreux	buy
LBBW	buy
Warburg Research	hold

Investor Relations work

There was plenty of take-up for our extensive offer of talks in the third quarter. The Board of Management and Investor Relations were able to provide comprehensive answers to questions from current and prospective shareholders. We particularly mention the virtual roadshows put on with LBBW and Montega as well as our involvement in the Berenberg and Goldman Sachs Conference in Munich.

Michael Finger (CEO) acquired 450 shares of technotrans SE in the third quarter. Peter Hirsch (CTO/COO) purchased 700 shares. Both transactions were conducted independently of the Board of Management remuneration agreement.

Ad hoc information

On August 2, 2023 technotrans SE released ad hoc information communicating the adjusted forecast for the year. In this release, the Board of Management indicated that it expected consolidated revenue for the 2023 financial year to reach the upper end of the published million. It also adjusted the anticipated range for the EBIT margin from previously 6.2 % to 7.2 % to now 5.0 % to 6.0 %, in a reflection of the challenging economic environment.

Composition of shareholders

The reportable shareholder base remained stable. We did not receive any notifications under Sections 33 and 34 of the German Securities Trading Act (WpHG) in Q3 2023. The shareholder structure as of September 30, 2023 is as follows:

Financial Calendar/Note

Publication	Date
Annual Report 2023	March 21, 2024
Quarterly communication 1-3/2024	May 14, 2024
Interim Financial Report 2024	August 14, 2024
Quarterly communication 1-9/2024	November 19, 2024
Events
German Equity Forum	November 27 - 28, 2023
CIC Forum	December 1, 2023
ODDO BHF Forum	January 15 - 16, 2024
Annual General Meeting 2024	May 17, 2024

Current information on events can be found on our website at the following address: https://www.technotrans.com/investor-relations/financial-calendar

Notes

This Quarterly Communication contains statements on the future development of the technotrans Group. They reflect the current views of the management of technotrans SE and are based on corresponding plans, estimates and expectations. We point out that the statements involve certain risks and uncertainties that could cause actual results to differ materially from those anticipated. Figures and percentages contained in this release may be subject to rounding differences.

The English language text in this report is a translation provided for information purposes only. The original German text shall prevail in the event of any discrepancies between the English translation and the German original.

The Quarterly Communication of technotrans SE at September 30, 2023 has been prepared in accordance with Section 53 of the Exchange Rules for the Frankfurt Stock Exchange (FWB).

Contact

Frank Dernesch

Manager Investor Relations & Corporate Finance

Phone: +49 (0)2583-301-1868 Fax: +49 (0)2583-301-1054 E-Mail: investor-relations@technotrans.de

General enquiries

technotrans SE

Robert-Linnemann-Straße 17 48336 Sassenberg

Phone: +49 (0)2583-301-1000 Fax: +49 (0)2583-301-1054 E-Mail: info@technotrans.de