Interim Report as at 31 March 2022

CONTENT

Foreword by the Executive Board

Viscom's shares

Interim Group Management Report
Basic information on the Group
Business model of the Group

Economic Report

Macroeconomic and sector development
Summary analysis of the Company's net assets, financial position and results of operations and course of business
- Results of operations
- 12 Regional developments
- 13 Financial position
- 14 Net assets
- 15 Key figures on the Group's net assets, financial position and results of operations
Supplementary Report
Report on risks and opportunities
Report on future developments in 2022
Economic conditions

Other disclosures

IFRS interim consolidated financial statements

19 Consolidated statement of comprehensive income
20 Consolidated statement of financial position: assets
21 Consolidated statement of financial position: equity and liabilities
22 Consolidated statement of cash flows
23 Statement of changes in equity
Selected notes
Notes to the consolidated statement of comprehensive income
Responsibility statement
Financial calendar 2022
Viscom structure

OPERATING FIGURES

Profit and loss

		3M 2022	3M 2021
Revenues	K€	20,815	15,664
EBIT	K€	180	-203
Net profit for the period	K€	77	-284

Balance sheet and cashflow statement figures

		3M 2022	3M 2021
Total assets	K€	99,906	83,117
Equity ratio	%	56.9	64.1
CF from current business	K€	1,248	-1,425
CF from investment	K€	-1,071	-819
CF from financing	K€	-989	-813
End of period capital	K€	-6,884	1,354

		3M 2022	3M 2021
Result per share	€	0.01	-0.03

Employees

	3M 2022	3M 2021
Employees on 31 March	496	469

VISCOM. VISION TECHNOLOGY.

Founded:

1984 by Dr. Martin Heuser and Volker Pape

Number of employees worldwide: 496

World Market Leader:

Viscom is the No. 1 solution provider for automatic optical inspection in the automobile industry.

Headquarters and production: "Made in Germany":

Hanover, Germany

Subsidiaries:

FOREWORD BY THE EXECUTIVE BOARD

The positive business performance continued at the start of the year and Viscom AG has enjoyed a gratifying first quarter of 2022. Business activity remains encouragingly brisk and, at € 25.5 million, led to our highest incoming orders in a first quarter since the company was founded. The increase of around 23 % as against the previous year (€ 20.7 million), in conjunction with the higher order backlog of € 33.6 million (previous year: € 24.0 million), will allow excellent capacity utilisation in production for the coming months. At € 20.8 million, revenue was around 33 % higher than the previous year's level in the first quarter (€ 15.7 million). EBIT improved to € 0.2 million in the first three months of 2022 after € -0.2 million in the same period of the previous year.

We are confident for the 2022 financial year, in which many new concrete projects are planned, particularly with our existing customers. Demand for our iX7059 product family for automated X-ray inspection, which was introduced last year, has been especially high. We have received several major orders in Device Inspection; the iX7059 has also allowed us to land new customers in Module Inspection. The supply chain shortages remain a challenge. Ensuring the full supply of parts is requiring more organisational and personnel effort, and is increasingly leading to delays in deliveries and thus revenue recognition. However, it is important to us to maintain close contact with our customers as well as open and honest communications with them. An impact on their production processes has largely been avoided to date. In the months ahead it will remain, our goal to provide our customers with optimal support and to ensure a smooth, punctual production start-up.

In order to minimise its dependence on key technologies and the current supply shortages for the frames needed to manufacture inspection systems, Viscom AG acquired a long-standing supplier for the manufacture of metal frames by way of purchase agreement dated 28 March 2022 and effective 1 April 2022. This company will work exclusively for Viscom AG.

The tragic events in Ukraine are causing great suffering to the people there. However, the long-term economic repercussions of the Russia/Ukraine war are still nigh on impossible to predict. The increasingly high inflation and disruption of supply chains are affecting Viscom AG as well. To date, the sanctions against Russia have not had any notable impact on Viscom. We are monitoring the situation carefully and will act and react in good time. We continue to anticipate target revenue and incoming orders of between € 90 million and € 95 million in the 2022 financial year. The EBIT-Margin will be between 5 % and 10 %, with EBIT of between € 4.5 million and € 9.5 million.

Thank you for your confidence. We hope that you continue to help us navigate these challenging times and that you stay healthy!

The Executive Board

Carsten Salewski Peter Krippner

Dr. Martin Heuser Dirk Schwingel

VISCOM'S SHARES

Basic information on Viscom's shares

German Securities Code Number (WKN)	784686
ISIN	DE 000 7846867
Ticker symbol	V6C
Market segment	Regulated market (Prime Standard)
Type of shares	No-par value bearer shares
Share capital (€)	9,020,000
Share capital (units)	9,020,000
Number of voting shares	8,885,060

Opening price on 3 January 2022	€ 14.15
Closing price on 31 March 2022*	€ 11.05
Percentage change	-22 %
High on 3 January 2022*	€ 13.85
Low on 4 March 2022*	€ 9.80
Market capitalisation as at 31 March 2022	€ 99,671,000

* All share price information is based on XETRA daily closing prices

Share price performance

as against the DAX and TecDAX in the first three months of 2022

Share price performance in the reporting period 01.01. – 31.03.2022

The stock markets had a turbulent start to the year after a difficult 2021. Viscom AG's shares began the current financial year at a price of € 14.15 on 3 January 2022. Economic concern and mounting geopolitical tension, in particular the Russia/Ukraine crisis, caused prices to fall on the global financial markets, in some cases drastically. Investors' nerves were also reflected in a significant increase in volatility. Viscom's shares reached their high for the year to date on 3 January 2022, closing at € 13.85 before buckling under the market environment and losing the ground they had gained. The negative trend on the stock markets continued in February 2022 as well. Attempts at a diplomatic solution to the political differences between Russia and Ukraine have failed. The stock markets responded to the outbreak of war with significant price losses and extreme volatility. On top of this, ongoing inflation and interest worries, COVID and the supply chains problems have had a negative impact on the ongoing development of the capital markets. Viscom's shares reached their low for the year to date at € 9.80 on 4 March 2022. Hopes for a diplomatic resolution to the Russia/Ukraine conflict brightened investor sentiment at times, though a lasting recovery failed to materialise. Viscom's shares recovered slightly over March. No doubt this was also thanks to Viscom AG's good business figures for 2021 and the positive outlook published for 2022. The average price of Viscom's stock was € 11.61 in the first three months of 2022, closing at € 11.05 per share on 31 March 2022.

Shareholder structure

Viscom AG's shareholder structure is largely defined by the considerable investment held by its founders, Dr. Martin Heuser and Volker Pape. Dr. Heuser and Mr. Pape hold 59.99 % of the shares, either directly or through intermediary companies and foundations. Viscom AG itself holds 1.50 % of its own shares, which the company purchased under a share buyback programme in 2008/2009. 6.50 % of the shares are held by Allianz and a further 3.02 % by Universal-Investment-Gesellschaft mbH. The 28.99 % of shares in free float are primarily held by investors in Germany and other European countries.

Annual General Meeting

The next Annual General Meeting of Viscom AG will again be held in virtual form on 8 June 2022. The Supervisory Board and the Executive Board will propose a dividend of € 0.20 per entitled share at the Annual General Meeting. Further information can be found in the Company/Investor Relations/Annual General Meeting section of the website at www.viscom.com.

Shareholder structure

Investor Relations

The objective of our investor relations work is to enable all capital market participants to assess Viscom AG fairly. This is why we pursue a policy of continuous and transparent communication. Extensive information on Viscom's shares can be found in the Investor Relations section of the company's website at www.viscom.com.

Pareto Securities AS and EQUI.TS GmbH regularly cover and comment on Viscom's shares. The shares had two "buy" recommendations as at 31 March 2022. The current ratings can be found in the Company/Investor Relations/Shares/Analyst Coverage section of the website at www.viscom.com.

The Investor Relations department can be contacted at the following address:

Viscom AG Investor Relations Sandra M. Liedtke Carl-Buderus-Str. 9 – 15 30455 Hanover e-mail: [email protected] Tel.: +49 511 94996-791 Fax: +49 511 94996-555

INTERIM GROUP MANAGEMENT REPORT BASIC INFORMATION ON THE GROUP

Business model of the Group

Structure of the company and its investees

Viscom AG, Hanover (hereinafter: Viscom AG), is the parent company of the Viscom Group (hereinafter referred to as Viscom). With subsidiaries in Asia, the Americas, Europe and Africa that are directly or indirectly wholly owned by Viscom AG, the Group has an efficient, market-oriented organisational structure. All the companies focus on their respective customer groups and their requirements. This enables them to act and respond quickly and flexibly. They also benefit from the advantages of belonging to a larger group, thus enabling the mutual sharing and utilisation of knowledge and experience. Production takes place exclusively in the Group's home base, Hanover. This means that Viscom enjoys the production advantages of one of the most highly developed industrial locations, allowing it to guarantee a very high level of quality for its products.

In 2001, Viscom GmbH changed its legal form to that of a German stock corporation (Aktiengesellschaft) and became Viscom AG. The company's share capital is divided into 9,020,000 shares. 59.99 % of the shares are held by the company's founders Dr. Martin Heuser and Volker Pape, either directly or through intermediary companies and foundations. 6.50 % of the shares are held by Allianz and 3.02 % by Universal-Investment-Gesellschaft mbH.

On 29 July 2008, the Executive Board, with the approval of the Annual General Meeting on 12 June 2008 and following consultation with the Supervisory Board, resolved to acquire up to 902,000 of the company's shares by 31 March 2009. The company had bought back 134,940 shares as at 31 March 2009. Viscom AG holds around 1.50 % of its own shares as at 31 March 2022.

The Executive Board of Viscom AG has four members as at 31 March 2022:

Carsten Salewski: Sales Peter Krippner: Operations Dr. Martin Heuser: Development Dirk Schwingel: Finance

The Executive Board is monitored by the three members of the Supervisory Board:

Prof. Dr. Michèle Morner (Chairwoman) Volker Pape (Deputy Chairman) Prof. Dr. Ludger Overmeyer

Segments and key locations

Viscom develops, manufactures and sells high-quality automated inspection systems for use in industrial production. The company's business activities are broken down on the basis of work required for the project-specific adaptation of standard components and systems, and the technology used to identify potential production errors using the inspection systems.

Regionally, the company's business incorporates the European market with its headquarters in Hanover and a sales subsidiary in Paris, France, the sales market of the Americas with its subsidiary in Atlanta, USA, and the Asian market with its subsidiary in Singapore, which in turn has its own subsidiaries in Shanghai, China, Huizhou (China) and Bangalore (India). The sales company in Tunis, Tunisia, a subsidiary of the French subsidiary that cultivates and serves the North African sales market, is allocated to the geographical segment Europe.

There were no further changes in the Group's activities or structure in the reporting period.

Business processes

The inspection systems are developed and produced at Viscom AG's headquarters in Hanover. All central functions, such as business administration, development, production, service and sales management, are based here.

The company's product development activities focus on fundamental development work for future generations of inspection systems and project-specific development to adapt basic types of machinery to meet customer-specific requirements.

A large part of production is order-based. It draws on in-house pre-production of various assemblies.

Sales activities are performed by Viscom AG's sales employees and customer care teams, its Group companies and agents acting on the market as industry representatives for mechanical engineering firms.

High reliability is one of the most important aspects when using an inspection system. This requires regular maintenance, repair and calibration. Central service and the customer care teams support assist Viscom's customers in these activities. Fast reaction times are ensured thanks to the global presence of Viscom's service employees.

Major business processes are managed and supported with the help of the business software proALPHA. The order processing module included in this system is used by all Viscom locations around the world.

Legal and economic factors

The coronavirus pandemic is continuing to influence financial markets and economies around the world. Measures to contain the pandemic also still substantially affected Viscom's business in the first quarter of 2022. Service and sales activities are being hampered by travel restrictions. A severe shortage of various components for pre-production, such as semiconductors, is creating global bottlenecks in manufacturing in a wide range of sectors (consumer electronics, computers, telecommunications, automotive, etc.). These bottlenecks are also affecting Viscom AG's business and causing delays in revenue recognition. In Germany, the effects of the Russia/Ukraine crisis were mainly felt in the form of higher energy prices in the first quarter. Please refer to the economic report below for more details on the development of the economy as a whole.

Management system

The key performance indicators by which the Viscom Group is essentially managed are incoming orders, revenue, EBIT (operating profit or segment earnings) and the EBIT-Margin (EBIT / revenue).

The management of the Group is based on a reporting system that takes the form of monthly reports submitted to management and the heads of the business areas. These monthly reports include the consolidated income statement and individual breakdowns for the various Group companies.

The reports also include a detailed presentation of the cost structure and key figures of Viscom AG and other companies of the Group. They provide information on revenue in the Group's machinery installation regions, incoming orders, the order backlog, the number of employees, cash and cash equivalents, the utilisation of the overdraft facilities available, total receivables and receivables from subsidiaries, orders placed for the purchase of goods and inventories of goods and completed and partially completed systems.

In addition, they provide an overview of employee turnover, absence due to illness and per capita revenue, in addition to key indicators for project management, product development, production and logistics. The statements contained in the monthly reports are analysed in regular meetings between the Executive Board, all heads of business areas and the managing directors of the individual branches. Any action that may be necessary results in decisions which are usually implemented in the short term.

Research and development

Development activities mainly focus on the ongoing development of existing system solutions and the implementation of new market requirements in the field of optical and X-ray inspection processes. This area also focuses on the definition of new products and systems.

The focus of research and development activities is described in detail on pages 26 to 28 of Viscom AG's 2021 annual report and has not changed over the first three months of the current year.

Expenditure for research and development, not including design changes for customer-specific adaptations, remained at the previous year's level. Development costs of € 790 thousand were capitalised in the first three months of 2022 (previous year: € 789 thousand). Capitalised development costs were amortised in the amount of € 684 thousand (previous year: € 613 thousand).

ECONOMIC REPORT

Macroeconomic and sector development

Macroeconomic development

The global economy has recovered from the COVID slump of 2020, albeit haltingly and unevenly. While global industrial production increased significantly again, the momentum was only moderate overall. The world economy deteriorated considerably from the middle of 2021, and the global economic recovery slowed significantly. Growth in production and demand continued to be affected by several factors in the first quarter of 2022, including the ongoing disruption stemming from the COVID-19 virus, global supply chain problems, rising inflation and mounting geopolitical tension due to the Russia/Ukraine war.

Sector development

The inspection of electronic assemblies is Viscom's main revenue segment. Viscom is therefore predominantly represented in the automotive supplier segment within the electronics industry, one of the largest branches of industry in the world. Technical developments in the electronics industry have been an innovation driver for Viscom over the last few years. The volumes and quality requirements of increasingly complex and ever-smaller electronic assemblies are seeing constant growth, meaning that they can only be tested reliably using automated inspection systems. Hidden solder joints, miniaturised components and densely populated printed circuit boards must be inspected safely and quickly. High resolution, reliable fault detection and high throughput are extremely important here. Viscom inspection systems are used where the requirements for precision and speed are particularly high. The main customers for Viscom products are the automotive electronics sector, manufacturers of consumer and industrial electronics, and service providers (EMS) that manufacture electronic assemblies to order for various sectors. Furthermore, Viscom systems are in-creasingly being used for the automated final optical or X-ray inspection of finished equipment. This includes complete assemblies from the electromobility sector, high-end mobile consumer equipment and, since 2020, significantly more lithium-ion batteries in various designs.

In recent years, Viscom has intensified its efforts to gain a foothold in non-automotive industries such as battery production, telecommunication, industrial electronics and semiconductor production. In the 2021 financial year, Viscom continued to expand its position in the inspection of energy storage products with targeted developments in automated X-ray inspection and bolstered its presence on this growth market.

The company has already established itself with a broader base among SMEs in Europe. At the same time, it is focusing on growth industries in the electromobility and computers, communication and consumer (3C) sectors in Asia in particular.

According to provisional calculations by the Federal Statistical Office, production in the mechanical engineering sector in Germany outperformed the previous year's level by 6.4 % in 2021 (adjusted for inflation). The production of machinery had a good start to the year with an (also provisional) increase of 9.1 % in January 2022. However, the war in Ukraine is expected to reduce the result for the year as a whole. The German Mechanical Engineering Industry Association (VDMA) has therefore revised its forecast for real machinery production downwards from 7 % to 4 %. As expected, the ifo Business Climate Index for mechanical engineering nosedived in March 2022. The business outlook in particular grew much dimmer, and export forecasts likewise suffered a severe setback.

Target sectors, target markets and target customers

The inspection systems manufactured by Viscom are mainly used in the electronics industry. Producers of electronic components are the main customer segment, accounting for 63 % of revenue (previous year: 58 %). Some of these companies are involved in production for end consumers. However, the majority of Viscom's customers are suppliers for other companies that manufacture products such as electronic assemblies. These supplier parts are integrated into vehicles as end products such as motor controllers. The remaining 37 % of revenue (previous year: 42 %) relates to manufacturers from other industries, such as battery production, consumer electronics and non-destructive testing (NDT).

With its optical, X-ray and combined inspection systems, Viscom is particularly well represented in production operations with the very highest quality requirements. Accordingly, its main customers are companies who make product safety a top priority. The automotive electronics sector accounts for a particularly high volume of business in this respect. With the constant growth in in-car electronics and the high reliability requirements for vehicle systems, focus is increasingly shifting to the inspection of electronic assemblies. These assemblies, which often are safety-related components, such as ABS, ESP, or airbags, are typically inspected using systems such as those offered by Viscom.

As a result of rising technological demands, including in the consumer goods industry, quality pressure is also far higher than in previous years. However, the emphasis is being placed more on process quality, as a stable process improves the delivery quality and, in particular, results in fewer rejects and hence higher levels of production efficiency. At the same time, electronics manufacturers from Asia in particular are increasingly seeking to position themselves as premium providers.

Technological developments and the accompanying technical and economic progress, combined with its international sales and service presence, have helped Viscom to expand its market position and achieve long-term customer retention. By continuously developing its products, improving its business processes and adapting its sales organisation to reflect changing conditions, Viscom is in a position to address the challenges of the future and thus maintain and expand its market position.

Close, long-term customer contacts form the basis for comprehensive and customised service. The results of this cooperation are incorporated into the development of new system solutions and the refinement of proven systems. This allows Viscom to develop new solutions and open up future markets thanks to a high degree of innovation and customer proximity.

Customer structure

Viscom generated around 47 % of its revenue with its five largest customers in the first three months of 2022 (previous year: around 54 %). A further 30 % of revenue was generated with 13 customers (previous year: 14 customers). The remaining revenue was generated with a total of 201 different customers (previous year: 170 customers).

SUMMARY ANALYSIS OF THE COMPANY'S NET ASSETS, FINANCIAL POSITION AND RESULTS OF OPERATIONS AND COURSE OF BUSINESS

Results of operations

Incoming orders / order backlog

Orders totalling € 25,463 thousand (previous year: € 20,741 thousand) were received in the first three months of 2022. This represented a substantial increase of 22.8 % as against the same period of the previous year and reflects the current positive economic situation.

The order backlog rose significantly to € 33,585 thousand as at 31 March 2022 (previous year: € 24,016 thousand), equivalent to full capacity utilisation for more than three months.

Revenue development

Revenue of € 20,815 thousand was recognised in the first quarter of 2022, an increase of around 32.9 % on the same period of the previous year (€ 15,664 thousand).

Operating profit (EBIT) / EBIT-Margin

EBIT was positive at € 180 thousand in the first quarter of 2022 (previous year: € -203 thousand), corresponding to a margin of 0.9 % (previous year: -1.3 %). The main reason for the improvement over the previous year was higher total operating revenue (total operating revenue defined as revenue plus the change in finished goods and work in progress and other own work capitalised). Total operating revenue climbed by € 5,577 thousand to € 23,598 thousand (previous year: € 18,021 thousand). Accordingly, the cost of materials was up by € 2,708 thousand at € 10,513 thousand (previous year: € 7,805 thousand). Staff costs increased to € 8,972 thousand (previous year: € 7,572 thousand) as a result of the higher headcount. The previous year had also included the cost relief of working short-time. At € 2,811 thousand, other operating expenses were up on the previous year (€ 1,935 thousand) due to higher expenses for travel, trade fairs and recruitment as well as maintenance and servicing. Earnings were also squeezed by the rise in depreciation and amortisation (€ 1,610 thousand; previous year: € 1,510 thousand) and the decline in other operating income (€ 488 thousand; previous year: € 598 thousand).

Financial result

Finance income amounted to € 0 thousand (previous year: € 0 thousand). Finance expenses of € 80 thousand (previous year: € 59 thousand) resulted from interest on lease and bank liabilities. The financial result was negative at € -80 thousand and lower than the previous year's figure (€ -59 thousand).

Net profit for the period

The net profit for the period was € 77 thousand (previous year: € -284 thousand). The effects in operating profit described above and the financial result also affected net profit for the period. This item was also affected by income tax expenses.

The pre-tax return on sales was 0.5 % (previous year: -1.7 %).

Earnings per share

Based on 8,885,060 shares, earnings per share (basic and diluted) amounted to € 0.01 (previous year: € -0.03) as at 31 March 2022.

Exchange rate effects

Viscom is exposed to exchange rate risks as it operates internationally. Given the company's business volumes and the development of the euro/US dollar exchange rate, the current level of exchange rate risk was deemed acceptable without the need for hedging. 35.9 % of total revenue was subject to direct exchange rate effects (previous year: 11.1 %). The rise in exchange rate ef-fects was due to the Americas region accounting for a higher share of total revenue. Viscom reserves the right to hedge exchange rates in individual cases.