Semi-annual report 2021

Half-Year Financial Report as at 30 June 2021

www.edding.com

Half-Year Financial Report as at 30 June 2021

Key figures for the Group

	2021	2020	2019
	01/01-30/06	01/01-30/06	01/01-30/06
	EUR m	EUR m	EUR m
Results of operations
EBIT¹	4.4	1.5	2.9
as a % of sales	6.3	2.6	4.2
Group result	2.5	1.7	1.3
as a % of equity as at 30 June	3.7	2.6	2.1
(return on equity)
Group earnings before taxes¹	4.3	2.9	2.8
Sales revenues	70.1	56.9	69.7
Change in %	23.2	-18.4	n/a
Foreign business in %	55.0	51.7	54.7
Gross profit¹	41.4	33.8	41.9
as a % of total output	58.8	59.2	59.9
Personnel expenses	22.0	17.7	20.6
as a % of sales	31.4	31.2	29.6
Employees (annual average)	696	665	658
Other comprehensive income	-0.1	-2.2	-0.1
	30/06/2021	31/12/2020	31/12/2019
	EUR m	EUR m	EUR m
Net assets and financial position
Total assets	131.1	129.8	118.5
Change in %	1.0	9.5	n/a
Equity	65.8	65.4	64.9
as a % of total assets	50.2	50.3	54.8
Second-degree liquidity¹
(quick ratio in %)	165.9	174.2	150.9

1 Definitions of key performance indicators are given in the edding Interim Group Management Report in the section 'Alternative key performance indicators'.

2 Key figures for the Group

edding Interim Group Management Report

Development of the business segments

As part of the new corporate strategy covering the period up to 2026, we changed to target group-oriented business units at the beginning of 2021. A description and explanation appears in the Annual Report 2020. The operational management system for this is currently being established, so until it is up and running, reporting will still be largely based on the previous business segments.

The Writing and Marking segment contains products that enable individuals to express their ideas, thoughts and feelings. In addition to markers, writing utensils, spray paints and printer cartridges, the sales generated in this area also include nail varnishes, revenues from the licensing business with printer cartridges, and partner brands.Visual Communication consists of collaboration-supporting communication and presentation products, as well as e-screens and interactive whiteboards, all of which are mainly distributed under the Legamaster brand. In the Technological Solutions segment, we combine the activities of edding Tech Solutions GmbH with our marking technologies - compact printers, edding code and the solutions offered by our subsidiary Prismade Labs GmbH. The Other segment includes the activities of edding Expressive Skin GmbH with its tattooing services and products.

The revenues of the individual business segments continue to be shaped by the COVID-19 pandemic. After a sharp decline of 18.4 % in the first half of 2020 compared to the first half of 2019, sales at Group level have recovered considerably in 2021. In the first half of 2021, they stood at EUR 70.1 million, which is even slightly up on the first half of 2019 (EUR 69.7 million), with revenue performance varying greatly depending on the segment and region. The Visual Communication business segment in particular has not yet recovered from the declines; the reluctance to equip offices with classic products such as whiteboards and flip charts is still clearly noticeable here. In Germany, our key market, demand is now picking up via projects connected with the government-subsidised Digital Pact for Schools, but cannot compensate for the downturn in the office segment.

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Sales revenues is broken down by segment and region as follows:

	2021	2020	Change
	01/01-30/06	01/01-30/06
	EUR m	EUR m	EUR m	%
Writing and Marking
Germany	25.8	21.5	4.3		20.0
Other European countries	28.8	20.8	8.0		38.5
Overseas	2.7	2.4	0.3		12.5
	57.3	44.7	12.6		28.2
Visual Communication
Germany	5.7	5.8	-0.1		-1.7
Other European countries	6.3	6.0	0.3		5.0
Overseas	0.4	0.2	0.2		100.0
	12.4	12.0	0.4		3.3
Technological Solutions
Germany	0.1	0.2	-0.1		-50.0
Other European countries	0.2	0.0	0.2		-
Overseas	0.0	0.0	0.0		-
	0.3	0.2	0.1		50.0
Other
Germany	0.1	-	0.1		-
Other European countries	-	-	-		-
Overseas	-	-	-		-
	0.1	-	0.1		-
Group total	70.1	56.9	13.2		23.2

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Writing and Marking business segment

At EUR 57.3 million, sales in the Writing and Marking business segment were 9.8 % higher in the first half of 2021 than the pre-pandemic level of 2019 (EUR 52.2 million). In addition to a recovery in the B2B¹ business, a further increase in the B2C² business contributed to this, largely driven by our new acrylic range as well as a further increase in spray paint sales.

In the German market, the drop in sales was comparatively small in the prior year at 6.9 %.

After an increase of 20.0 % to EUR 25.8 million, sales revenues here in the first half of the year were 11.7 % above the pre-crisis level of 2019 (EUR 23.1 million). In addition to the increase due to the launch of the acrylic range and the continued strong spray paint sales, other lines from the creative range also contributed positively to growth. In terms of distribution channels, it was again formats such as DIY stores, chemists, e-commerce and discounters that contributed significantly to the marked growth in sales.

In the other European markets, sales were also well above the 2019 level (EUR 25.9 million) at EUR 28.8 million. This increase of 11.2 % compared with the pre-pandemic level saw contributions from almost all markets, in particular Turkey, Spain, Russia and France.

The overseas markets had to contend with the largest percentage decline in turnover in the previous year due to the pandemic. As COVID-19 infection rates are still high in our most important markets of Argentina and Colombia, accompanied by political unrest in Colombia in particular, a recovery is not yet apparent here, and sales of EUR 2.7 million are still below those of the first half of 2019 (EUR 3.2 million).

In light of the positive performance of the Writing and Marking segment in the first half of 2021, we will moderately increase the revenue and earnings forecast for this segment compared to the figures published in the Outlook section of the Annual Report 2020.

1. In contrast with the usual definition, B2B (business-to-business) is used by edding to describe distribution to trade customers or distribution channels that mainly serve commercial end users as end customers.
2. In contrast with the usual definition, B2C (business-to-consumer) is used by edding to describe distribution to trade customers or distribution channels that mainly serve private end users as end customers.

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