FORTEC Elektronik: 3rd Quarter Report FY 2021/2022

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Report 3rd QUARTER 2021/2022

Report 3rd Fiscal quarter 2021/2022

Content

Preface Group management report Consolidated balance sheet

Consolidated statement of comprehensive income Explanatory remarks

FORTEC Report 3. Quarter 2021/2022 2

Preface

Dear shareholders,

Despite exceptionally difficult market conditions, we continued to grow during the first nine months of the year.

After coping well with the changing challenges of the COVID-19 pandemic over the past two years, the war in Ukraine has once again exacerbated the disruption to our global supply chains. Additionally, new regional lockdowns have been implemented in China over the past few weeks, resulting in additional efforts from our customers.

Despite taking significant steps to protect our employees, we were increasingly impacted by staff absences due to Covid-19 related illnesses at all sites in the third quarter. However, the latest Covid-19 case numbers give us reason to be optimistic that the situation will return to normal.

In the context of these difficult circumstances, the consolidated turnover of 66.0 million euros (previous year: 57.7 million euros) generated in the first nine months of 2021/2022 and the significant increase profit with an EBIT of EUR 6.3 million (previous year: EUR 3.6 million) is a remarkable achievement by all employees. It is a gratifying result that encourages us to continue on the path we have chosen.

The order backlog, which reached €85.3 million as of March 31, 2022 (previous year: €55.0 million), provides a solid basis for the coming months, but also indicates that chain problems of supply impede the fulfillment of orders on time.

Despite the ongoing challenges, we continue to develop the group in a sustainable and successful way with a view to taking FORTEC forward into the future as an attractive, innovative and financially sound group of companies.

Thank you for your trust and support along the way.

Germering, May 2022

Sandra Maille

CEO

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Group management report: 3rd quarter of the 2021/2022 financial year 01.07.2021-31.03.2022

Profit situation

In the first nine months of the 2021/2022 financial year, consolidated sales increased by around 14.4% to 66.0 million euros (previous year: 57.7 million euros).

Other operating income fell from 900 thousand euros to 1.5 million euros. The increase is due to the first consolidation of the second-tier Czech subsidiary ALLTRONIC and to the increase in income from exchange differences.

The cost of materials increased by €39.2 million to €44.4 million, in line with the increase in turnover despite tight supply chains. The cost of sales ratio decreased slightly from 67.8% to 67.3%. Gross margin, taking into account work in progress, increased in the nine-month period of fiscal year 2021/2022 to 33.1%, compared to 31.7% the previous year.

Personnel costs increased by around 10.5% to 10.9 million euros due to salary adjustments and more expensive new appointments due to the tight labor market situation. However, the personnel expense ratio decreased from 17.1% to 16.5% due to the increase in turnover.

Depreciations of EUR 1.2 million (previous year: EUR 1.3 million) remained almost constant compared to the previous year.

Other operating expenses increased from EUR 4.4 million in the previous year to EUR 4.7 million and amounted to 7.1% of sales (prior year: 7, 6%). This increase is explained by the increase in advertising and travel costs as well as the costs of external service providers for the recruitment of staff.

Due to the factors mentioned, operating profit (EBIT) as a key financial performance indicator of EUR

6.2 million is significantly higher than the previous year’s value of 3.6 million euros. The EBIT margin, based on sales, increased from 6.2% the previous year to 9.6% during the reference period.

The net result for the nine-month period of the 2021/2022 financial year amounted to 4.6 million euros, significantly higher than that of the same period of the previous year (2.6 million euros ). The return on sales after tax thus rose from 4.5% to 7.0%.

Earnings per share improved significantly during the reporting period to EUR 1.43 (previous year: EUR 0.79).

Asset position

Assets, with total assets of EUR 66.6 million (30/06/2021: EUR 64.0 million), non-current assets

amounted to 17.9 million euros (30/06/2021: 18.3 million euros).

Of this amount, the goodwill of the acquired subsidiaries is the largest item with 6.9 million EUR (30/06/2021: 6.7 million EUR),

monitoring of rights of use recognized in accordance with IFRS 16 for 5.6 million EUR (30/06/2021: 5.9 million EUR).

Among current assets, inventories are the largest single item with a value of EUR 22.9 million (30/06/2021: EUR 19.7 million), representing 34.4% of the balance sheet total (30/06/2021: /2021: 30.8%). The accumulation of inventory serves to smooth out any further fluctuations in supply chains. The trade receivables item increased

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from €8.7 million as of June 30, 2021 to €9.8 million as of March 31, 2022 due to revenue. Cash and cash equivalents increased from €14.7 million to €13.5 million due to dividend payments and loan repayments.

Financial and liquidity position

The financial situation of the company remains excellent and, with an above-average equity ratio of 72.0% (30/06/2021: 69.6%), is also impressive compared to companies with a business model similar. With shareholders’ equity of EUR 47.9 million (30/06/2021: EUR 44.5 million), the company is sufficiently equipped to make forward-looking decisions.

Non-current debts to banks, the second largest item of non-current debts, were reduced from €2.4 million as of June 30, 2021 to €1.7 million in accordance with the repayment plan. The largest item remained the long-term lease debts of EUR 4.7 million (30/06/2021: EUR 5.1 million).

In current liabilities, liabilities related to deliveries and services went from €4.9 million at June 30, 2021 to €5.0 million at March 31, 2022. Other liabilities went from €1.3 million euros to 1.5 million euros.

Provide

In a context of good activity over the nine-month period, the Management Board confirms its forecasts for the 2021/2022 financial year and anticipates growth of up to 15% in Group sales and an increase of up to 20% of the BAII Group’s turnover.

FORTEC’s business performance will continue to be affected by the impact of the global pandemic, the critical supply situation due to tight supply chains and the war in Ukraine. Especially given the war in Ukraine and its geopolitical and economic consequences, it is extremely difficult to make reliable predictions about future developments at this time. The 2021/2022 forecast is therefore subject to the condition that the underlying circumstances do not worsen further.

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