2023 INTERIM REPORT as at 31 March 2023

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
13 Regional developments
14 Financial position 15 Net assets
16 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 2023

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 2023
Viscom structure

Operating figures

Profit and loss

		3M 2023	3M 2022

Revenues	K€	23,615	20,815
EBIT	K€	232	180
Net profit for the period	K€	-111	77

Balance sheet and cashflow statement figures

		3M 2023	3M 2022

Total assets	K€	116,988	99,906
Equity ratio	%	51.3	56.9
Cash flow from operating activities	K€	4,637	1,248
Cash flow from investing activities	K€	-1,031	-1,071
Cash flow from financing activities	K€	-1,191	-989
Cash and cash equivalents	K€	-15,518	-6,884

	3M 2023	3M 2022
Result per share €	0.00	0.01

Employees

	3M 2023	3M 2022

Employees on 31 March	578	496

VISCOM. Vision Technology.

Founded:

1984 by Dr. Martin Heuser and Volker Pape

Number of employees worldwide: 578

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:

Viscom France S.A.R.L., Paris, France Viscom Tunisie S.A.R.L., Tunis, Tunisia Viscom Inc., Atlanta, Georgia, USA Viscom Machine Vision Pte Ltd., Singapore Viscom Machine Vision Trading Co. Ltd., Shanghai, China VICN Automated Inspection Technology (Huizhou), Huizhou, China Co., Ltd VISCOM MACHINE VISION (INDIA) PRIVATE LIMITED, Bangalore, India Viscom Metallgestaltung GmbH, Langenhagen/ Hanover, Germany Exacom GmbH, Hanover, Germany VISCOM VXS S. DE R.L. DE C.V., Zapopan/ Guadalajara, Mexico

Foreword by the Executive Board

Viscom AG's positive business performance continued in the first quarter of 2023, following on from the very good performance of the previous year. Business activity led to our highest incoming orders in a single quarter since the company was founded, which increased by around 38 % year-on-year to € 35.2 million (previous year: € 25.5 million).

This sharp rise in incoming orders was driven by high demand in Europe, especially from our major customers and our OEM customers in the X-ray tube segment. Our subsidiary Exacom GmbH also received a major order to supply X-ray inspection systems to a customer in the battery cell production sector. This is the successful outcome of our strategy of unlocking special revenue potential in the inspection of energy storage products – i. e. in the inspection of battery cells. The order has a total volume of around € 5 million and will largely affect revenue in this financial year.

At € 23.6 million, revenue in the first quarter of 2023 was around 13 % higher than the previous year's level (€ 20.8 million). Revenue recognition also continued to be hampered by supply chain disruption. In the first quarter of 2023, this affected, among other things, specialized parts for optics and the machine drives. EBIT was held back by the increased material and staff costs and was level with the previous year at € 0.2 million in the first three months of 2023 (previous year: € 0.2 million).

After 35 years at Viscom, Peter Krippner, Chief Operations Officer, will step back from the operating business at Viscom AG on 31 May 2023 for personal reasons. This was not an easy decision for Mr. Krippner, and he will continue to be associated with Viscom AG in an advisory capacity. With his great dedication and expertise in image processing, Mr. Krippner has played a significant part in Viscom AG's success over the last few decades. His competence in the field of electronic assemblies inspection is esteemed within the company and throughout the industry. We warmly thank Mr. Krippner for his work and his untiring commitment to Viscom's needs and wish him continued success both professionally and privately.

From 1 June 2023, the Viscom Executive Board will consist of three members: Dr. Martin Heuser (Technology), Carsten Salewski (Sales) and Dirk Schwingel (Finance). Peter Krippner's responsibilities will be assumed by Dr. Martin Heuser (Development/Production) and Carsten Salewski (Sales/Operations). In day-to-day operating business, they will be supported by the new Head of Operations, Kai-Uwe Schablack.

We are confident that we will achieve our objectives for the current financial year thanks to our sustainable and marketoriented business policy and the great dedication of our employees. We continue to forecast incoming orders and revenue of between € 110 million and € 120 million in the 2023 financial year, with the EBIT-Margin coming in at between 5 % and 10 %. This corresponds to EBIT of between € 5.5 million and € 12.0 million.

Thank you for your interest and for your confidence in us.

The Executive Board

Carsten Salewski Peter Krippner

Dr. Martin Heuser Dirk Schwingel

Viscom's shares

Basic information on the 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 2 January 2023	€ 8.80
Closing price on 31 March 2023*	€ 9.74
Percentage change	+11 %
High on 25 January 2023*	€ 10.55
Low on 9 January 2023*	€ 8.68
Market capitalisation as at 31 March 2023	€ 87,854,800

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

Share price performance

in the reporting period 1 Jan. – 31 Mar. 2023

Viscom AG's shares began the current financial year at a price of € 8.80 on 2 January 2023 and reached their low for the year to date at € 8.68 on 9 January 2023. Falling inflation rates raised investors' hopes of less restrictive monetary policy on the part of the central banks. The end of the zero-COVID policy in China alleviated fears of recession and increased economic optimism. European stock markets then saw a rapid price increase and thus a tremendous start to the 2023 stock market year. In this stock market environment, Viscom's shares reached their high for the year to date on 25 January 2023, closing at € 10.55. Persistently high inflation and central bank monetary policy were the decisive issues and led to a consolidation of market barometers in February. Recurring interest rate worries, concerns over demand and the fear of a new banking crisis put investor confidence to the test at the end of the first quarter of 2023. After their weak performance in 2022, technology stocks were among the winners in the first quarter of 2023 with growth of around 14 %. Viscom AG's good business figures for 2022 and the positive outlook published for 2023 helped Viscom's shares gain around 11 % in the first quarter of 2023. The average price of Viscom's stock was € 9.59 in the first three months of 2023, closing at € 9.74 per share on 31 March 2023.

Share price performance as against the DAX and TecDAX in the first three months of 2023

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. 4.92 % of the shares are held by Allianz Retraite S.A. and a further 3.02 % by Universal-Investment-Gesellschaft mbH. The 30.57 % of shares in free float are primarily held by investors in Germany and other European countries.

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 2023. 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-Strasse 9-15 30455 Hanover

E: [email protected] T: +49 511 94996-791 F: +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).

Viscom AG is registered with Hanover Court of Registration under commercial register number HRB 59616.

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. Viscom AG directly holds 85 % of the shares in Exacom GmbH. 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 quality level 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. 4.92 % of the shares are held by Allianz Retraite S.A. and 3.02 % by Universal-Investment-Gesellschaft mbH.

The Extraordinary General Meeting held on 20 August 2013 agreed to convert some of the committed capital reserves (€ 22,550 thousand) into free capital reserves (section 272(2) no. 4 of the Handelsgesetzbuch (HGB – German Commercial Code)) by way of an increase in the company's share capital from corporate funds without issuing new shares and a subsequent reduction in capital. This was in accordance with the proposals by the Executive Board and Supervisory Board published in the German Federal Gazette (Bundesanzeiger) on 10 July 2013.

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 2023.

The Executive Board of Viscom AG has four members as at 31 March 2023:

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 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 the inspection systems use to identify potential production errors.

The company's business is segmented geographically by sales regions; it serves the European market from its headquarters in Hanover which includes the Exacom GmbH, and a sales subsidiary in Paris, France, the sales market of the Americas from its sales subsidiary in Atlanta, USA, plus the service company in Mexico acquired in 2022, and the Asian market from its sales subsidiary in Singapore, which in turn has its own sales 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.

In addition, Viscom AG operates a company for the manufacture of metal frames, Viscom Metallgestaltung GmbH. This company works exclusively for Viscom AG.

There were no 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. This enables greater production safety, especially in view of precarious supply chains.

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.

Operational availability 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 assist Viscom's customers in that job. 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

In the first quarter of 2023, the financial markets and the world economy were still affected by inflation and interest concerns, supply chain shortages and increased energy and raw material prices. These were joined by fears of a new banking crisis. In the German mechanical engineering industry, the shortage of materials is still by far the biggest obstacle to production, followed by the labour shortage. This significant shortage in various components for pre-production is also affecting Viscom AG's business and causing delays in revenue recognition. Higher staff costs as well as energy and raw material prices in Germany are likewise having a negative impact on Viscom. 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 reviews submitted monthly 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 systems 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 revenue per capita, 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 need for action emerging results in decisions that are usually implemented in the short term.

Research and development

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

The focus of research and development activities is described in detail on pages 38 to 41 of Viscom AG's 2022 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 € 895 thousand were capitalised in the first three months of 2023 (previous year: € 790 thousand). Capitalised development costs were written down in the amount of € 570 thousand (previous year: € 684 thousand).

Economic report

Macroeconomic and sector development

Macroeconomic development

The economic environment is still characterised by geopolitical uncertainties and their economic ramifications. Everyday business continues to be shaped by material and energy concerns. The fluctuations in energy prices have abated, but the new cost level is several times higher than the average prices before the pandemic. The generally slow pace of the global economy continues, restraining global trade. There are also uncertainties regarding the effects of rising inflation and more restrictive monetary policy on banks and the global financial markets.

Sector development

Revenue recognition at Viscom is focused on the manufacture of systems for the inspection of electronic assemblies. 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 a key 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. These assemblies can only be tested reliably using automated inspection systems. Hidden solder joints, miniaturised components and densely populated printed circuit boards must be inspected reliably 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 increasingly 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 in recent years also 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. It is focusing on growth industries in the electromobility and computers, communication and consumer (3C) sectors. Mechanical engineering companies are facing a wide range of global challenges. While the war in Ukraine is affecting Europe in particular, supply chain disruptions, shortages and higher inflation are global issues.

Machinery and equipment was manufactured for an estimated total of around € 3.4 trillion world-wide in 2022. By this metric, China continues to rank far above the USA, Germany, Japan and all other countries. EU machinery production continued to grow and expanded by 5 % in 2022. More growth would have been possible if continuing material shortages, especially in the first half of the year, had not impeded the progress of production, says the German Mechanical Engineering Industry Association (VDMA). In Germany, production fell short of the pre-pandemic year by 6.5 %. In 2022, the production level of all 27 EU countries was a good 3 % higher than in 2019. In a difficult macroeconomic environment, however, the mechanical engineering industry posted a solid performance overall in 2022. The second half of the year even brought higher growth than expected in many places, as the bottleneck situation eased for some preliminary products. In 2023, the global mechanical engineering industry is likely to grow less than in 2022, as the demand for capital goods could develop less dynamically. The VDMA economists expect a price-adjusted increase in global machinery revenue of 1 %.

Target sectors, target markets and target customers

The inspection systems manufactured by Viscom are employed primarily within the electronics industry. Producers of electronic components are the main customer segment, accounting for 73 % of revenue (previous year: 63 %). Some of these companies are involved in production for end consumers. However, the majority of Viscom's customers are suppliers that manufacture products such as electronic assemblies for other companies. These supplier parts are integrated into end products, for example motor controllers into vehicles. The remaining 27 % of revenue (previous year: 37 %) relates to manufacturers from other industries, such as consumer electronics and battery production.

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 increasing use of in-car electronics and the high reliability requirements for vehicle systems, the automotive industry is a major customer group for 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, pressure to improve quality 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 Viscom's international sales and service presence, have helped to expand the 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 50 % of its revenue with its five largest customers in the first three months of 2023 (previous year: around 47 %). A further 30 % of revenue was generated with 13 customers (previous year: 13 customers). The remaining revenue was generated with a total of 205 different customers (previous year: 201 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 € 35,157 thousand (previous year: € 25,463 thousand) were received in the first three months of 2023. This represented a substantial increase of 38.1 % as against the same period of the previous year and reflects the good placement of Viscom's inspection systems and services on the markets.

The order backlog rose significantly to € 46,026 thousand as at 31 March 2023 (previous year: € 33,585 thousand), which will ensure good capacity utilisation in all areas in the months ahead.

Revenue development

In the first quarter of 2023, revenue of € 23,615 thousand was recognised. This was therefore 13.5 % higher than in the same period of the previous year (€ 20,815 thousand).

Operating profit (EBIT) / EBIT-Margin

EBIT amounted to € 232 thousand in the first quarter of 2023 (previous year: € 180 thousand). This corresponded to an EBIT-Margin of 1.0 % (previous year: 0.9 %). Matching the previous year's level, EBIT was held back by higher staff costs and an increase in other operating expenses. Staff costs rose to € 10,329 thousand (previous year: € 8,727 thousand) as a result of the higher headcount and pay adjustments. At € 3,478 thousand, other operating expenses were up significantly on the previous year (€ 2,811 thousand) due to higher expenses for administration, packaging, marketing and maintenance. Total operating revenue (defined as revenue plus the change in finished goods and work in progress and other own work capitalised) rose significantly by € 4,676 thousand to € 28,274 thousand (previous year: € 23,598 thousand). Accordingly, the cost of materials was up by € 2,440 thousand at € 12,953 thousand (previous year: € 10,513 thousand). Earnings were also increased by the decline in depreciation and amortisation (€ 1,595 thousand; previous year: € 1,610 thousand) and the increase in other operating income (€ 313 thousand; previous year: € 243 thousand).

Financial result

Financial income amounted to € 1 thousand (previous year: € 0 thousand). Financial expenses of € 373 thousand (previous year: € 80 thousand) resulted from interest on lease and bank liabilities. The financial result was negative at € -372 thousand and lower than the previous year's figure (€ -80 thousand).

Net profit for the period

Net profit for the period amounted to € -111 thousand (previous year: € 77 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 income.

The pre-tax return on sales was -0.6 % (previous year: 0.5 %).

Earnings per share

Based on 8,885,060 shares, earnings per share (basic and diluted) amounted to € 0.00 (previous year: € 0.01) as at 31 March 2023.

Exchange rate effects

As it operates internationally, Viscom is exposed to exchange rate risks. 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. 14.4 % of total revenue was subject to direct exchange rate effects (previous year: 35.9 %). The decline in exchange rate effects was due to the Americas region accounting for a lower share of total revenue. Viscom reserves the right to hedge exchange rates in individual cases.