Semperit : Report Q1 2024

REPORT ON THE FIRST QUARTER 2024

QUARTER

1 / 2024

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Semperit-Group I Report on the first quarter 2024

Key figures of the Semperit-Group

Key performance figures1

in EUR million	1-3 2024	Change	1-3 2023	2023
Revenue	176.0	-0.2%	176.4	721.1
EBITDA		23.0	+9.4%	21.0	71.8
EBITDA margin		13.0%	+1.2 PP	11.9%	10.0%
EBIT		11.6	-15.1%	13.6	34.6
EBIT margin		6.6%	-1.1 PP	7.7%	4.8%
Earnings after taxes		5.0	-42.8%	8.7	24.9
Earnings per share (EPS)2, in EUR		0.18	n/a	0.02	-0.82
Return on equity3		10.0%	+1.7 PP	8.3%	10.1%
Balance sheet key figures
in EUR million	31.03.2024	Change	31.3.2023	31.12.2023
Total assets		950.1	+12.1%	847.6	937.9
Equity		428.1	-17.3%	518.0	425.3
Equity ratio		45.1%	-16.1 PP	61.1%	45.3%
Additions to intangible assets and property,
plant and equipment4		9.9	+84.1%	5.4	249.5
Employees (at reporting date)		4,285	+2.5%	4,182	4,576

Cashflow key figures

in EUR million

Gross cash flow

Free cash flow before the sale of companies

Cash investments for intangible assets and property, plant and equipment (CAPEX)

Cash and cash equivalents

Sector and segment key figures

1-3 2024	Change	1-3 2023	2023
22.0	n/a	10.1	24.4
3.5	-49.3%	6.9	26.3
22.6	+56.2%	14.5	55.6
119.9	+1.6%	118.0	112.7

in EUR million	1-3 2024	Change	1-3 2023	2023
Industry = SIA + SEA
Revenue		176.0	-0.2%	176.4	681.8
EBITDA		29.2	-4.5%	30.6	97.3
EBIT	18.2	-23.0%	23.7	63.0
SIA
Revenue		74.5	-25.0%	99.4	330.8
EBITDA		13.8	-20.9%	17.5	46.9
EBIT		9.4	-27.6%	12.9	29.7
SEA
Revenue		101.5	+31.7%	77.1	351.0
EBITDA		15.4	+17.2%	13.1	50.5
EBIT		8.9	-17.4%	10.7	33.2

Note: Rounding differences in the totalling of rounded amounts and percentages may arise from the use of automatic data processing.

1. On March 21, 2024, a co-use agreement was signed with Harps, the buyer of the medical business, for the glove production site. As a result, the sale of the Surgical Operations is expected to be completed in the next 12 months, and as a consequence, this area will be reported as discontinued operations. The comparative period 1-3 2023 has been adjusted accordingly; while 2023 shows the figures reported at the end of 2023, i.e. Surgical Operations is included in the figures
2. Earnings per share are only attributable to the core shareholders of Semperit AG Holding.
3. Based on a full-year projection.
4. Excluding right-of-use in accordance with IFRS 16

Foreword of the Executive Board

Semperit Group I Report on the first quarter of 2024

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Foreword of the Executive Board

Dear Shareholders, dear Sir or Madam,

The Semperit Group, which has focused exclusively on industrial customers with the two divisions Semperit Industrial Applications (SIA) and Semperit Engineered Applications (SEA) since its reorganization in the previous year, has performed very solidly in the first quarter of the 2024 financial year. Although the market environment remained challenging, the cost savings we introduced early on are taking effect, and our industrial strategy with investments in our growth and a further increase in sales excellence is being fully implemented.

We are also a big step closer to the second and final closing of the sale of the medical business. It was agreed that we would take over the contract manufacturing of surgical gloves for Harps for up to five years - i.e. until 2028 - after we sold and handed over the majority of the glove business to Harps in 2023. At the end of March, we concluded a so-calledco-use agreement with Harps, which states that Harps can use certain properties at the Wimpassing production site after the complete purchase of our glove business. We now expect this transaction to be completed within the next 12 months. In accounting terms, this means that Surgical Operations is now presented as discontinued operations.

Improved EBITDA

In the first three months of 2024, we generated stable revenue of EUR 176 million and a 9.4% increase in EBITDA to EUR 23 million in our industrial core business in a persistently challenging market environment. The EBITDA margin thus improved to 13.0%, compared to 11.9% in the first quarter of the previous year. The cost-cutting programs introduced in the previous year already reduced expenses by a total of EUR 9.9 million, of which EUR 4.1 million was attributable to the first quarter of 2024. Earnings after tax improved to EUR 3.6 million, with earnings after tax from continued operations positive at EUR 5.0 million.

Our financial position remains very solid: our cash and cash equivalents at the end of March 2024 amounted to around EUR 120 million, the equity ratio was 45.1% and the debt ratio measured by net financial debt in relation to EBITDA was a conservative 1.6.

After our shareholders approved all items on the agenda at the Annual General Meeting for the 2023 financial year on April 23, 2024, we paid out a dividend totaling EUR 10.3 million (or EUR 0.5 per share) on April 30.

With a view to 2024 as a whole, we confirm our guidance and the aim to increase our EBITDA to around EUR 80 million.

The Executive Board

Karl Haider	Helmut Sorger	Gerfried Eder
CEO	CFO	CIO

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Semperit Group I Report on the first quarter of 2024

Group management report

Group Management Report

With its two divisions, Semperit Industrial Applications (SIA) and Semperit Engineered Applications (SEA), the Semperit Group develops, produces and sells high-quality elastomer products and applications for industrial customers. The SIA division focuses on industrial applications with highly efficient production and cost leadership; these include hydraulic and industrial hoses as well as profiles. The SEA division focuses on customized, tailor-made technical solutions and comprises escalator hand- rails, cable car rings and other customer-specific elastomer products, including elastomer sheets and conveyor belts. The Rico Group, a leading supplier of silicone injection molding tools and producer of liquid and solid silicone components, has also been part of this division since August 1, 2023.

On March 21, 2024, Semperit concluded a co-use agreement with Harps, the buyer of the medical business. This agreement allows Harps to use the production site for surgical gloves in Wimpassing after the sale of the Surgical Operations business by Semperit. Semperit's management therefore assumes that the sale of this business unit ("second closing") is highly probable in the next twelve months. Thus, Surgical Operations met the requirements for a presentation as discontinued operations for the first time as of March 31, 2024; the presentation for the comparative quarter of 2023 was adjusted accordingly.

Development in the raw material markets

Various raw materials such as butadiene, carbon black and natural rubber are important basic components for the manufacture of elastomer products. After the geopolitical environment led to a shortage of supply and sharp price increases for a number of raw materials in 2022, the situation eased in 2023. Exceptions to this were the prices for carbon black, which were primarily impacted by a supply shortage as well as energy and CO2 surcharges. Following the partial price declines in the previous year, prices recorded a slight upward trend again in the reporting period. Below is an overview of the most important raw materials:

Indexed to January 1, 2021; Source: Reuters, Refinitiv Eikon;

Brent Crude, LCOc1 ICE Europe Brent Crude Electronic Energy Future (USD/bbl)

HFO, Heavy Fuel Oil 1% NWE (USD/t)

Butadiene, PHAKE00 BD Korea, PHAKG00 BD Europe (USD/t)

Technically Specified Rubber, TSR20 SICOM (Usc/kg)

Crude oil is an important raw material for synthetic rubber precursors such as butadiene, but also for carbon black. Similar to the increase in crude oil prices, the average prices for the basic raw material butadiene, which is relevant for both divisions, were higher in the first quarter of 2024 than in the first quarter of 2023, both in Asia and in Europe (by around 11%). This was also reflected in the price trend for butadiene derivatives.

In the past, prices for the filler carbon black, which is used in both divisions, generally correlated strongly with the development of heavy fuel oil (HFO), which was on average 8% more expensive in

Group management report

Semperit Group I Report on the first quarter of 2024

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the first quarter of 2024 than in the first quarter of the previous year in line with the development of crude oil prices. Similarly, carbon black prices were therefore higher overall in the first quarter of 2024 than in the same period of the previous year.

Natural rubber, which is particularly relevant for the Belting business, was traded around 15% more expensive on the commodity exchanges in Asia in the first quarter of 2024 than in the first quarter of 2023.

The average price of iron ore (raw material for wire rod production) for the first quarter of 2024 was 2% lower than the average price for the same period of the previous year. Similarly, the average price of wire rod in both China and Europe was below the prices for the same period in 2023.

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Semperit Group I Report on the first quarter of 2024

Group management report

Revenue and earnings performance

Key figures Semperit Group

in EUR million	1-3 20241	Change	1-3 20231
Revenue		176.0	-0.2%	176.4
EBITDA		23.0	+9.4%	21.0
EBITDA margin		13.0%	+1.2 PP	11.9%
EBIT		11.6	-15.1%	13.6
EBIT margin		6.6%	-1.1 PP	7.7%
Earnings after taxes from continued operations		5.0	-42.8%	8.7
Earnings after taxes from discontinued operations		-1.4	-83.3%	-8.3
Earnings after taxes		3.6	n/a	0.4
Additions to intangible assets and property, plant and
equipment2		9.9	+84.1%	5.4

1. On March 21, 2024, a co-use agreement was signed with Harps, the buyer of the medical business, for the glove production site. As a result, the sale of the Surgical Operations is expected to be completed in the next 12 months, and as a consequence, this area will be reported as discontinued operations. The comparative period 1-3 2023 has been adjusted accordingly.
2. Excluding right-of-use in accordance with IFRS 16

In the first three months of 2024, the Semperit Group generated stable revenue of EUR 176.0 million, the EBITDA increased by 9.4% to EUR 23.0 million in an unchanged challenging market environment. The cost-cutting programs initiated in 2023 already reduced expenses by a total of EUR 9.9 million, of which EUR 4.1 million was attributable to the first quarter of 2024. Earnings after tax improved to EUR 3.6 million (1-3 2023: EUR 0.4 million). Earnings after tax from continued operations were positive at EUR 5.0 million. After the majority of the medical business was sold to Harps in the previous year, the remaining glove business (Surgical Operations) is expected to be sold in the next twelve months. Surgical Operations is therefore reported as discontinued operations. This segment had a negative impact of EUR -1.4 million on earnings.

Group management report

Semperit Group I Report on the first quarter of 2024

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The Semperit Group has focused exclusively on industrial customers with the two divisions Semperit Industrial Applications (SIA) and Semperit Engineered Applications (SEA) since its reorganization in the previous year and generated stable revenue of EUR 176.0 million (-0.2%) in the first three months of 2024. The two divisions performed differently depending on the market environment and customer sectors. While the persistently challenging economic situation at SIA (comprising Hoses and Profiles) led to a decline in sales volumes and thus also a decrease in revenue by -25.0% to EUR 74.5 million, the SEA division (comprising Form, Belting and Rico/Liquid Silicone Rubber) benefited primarily from higher sales volumes. Sales in the SEA division thus rose by 31.7% to EUR 101.5 million, of which EUR 24.3 million was attributable to the first-time inclusion of Rico.

Total expenses decreased by 3.6% to EUR 156.1 million. Cost of materials (including energy and purchased services) fell by EUR 14.1 million or 15.9% to EUR 74.8 million (previous year: EUR 88.9 million). This is primarily due to easing raw material prices and lower sales volumes in the SIA division.

Personnel expenses increased to EUR 57.8 million in the first three months of 2024 (+17.2% compared to EUR 49.3 million in the same period in 2023), primarily as a result of the Rico takeover. Other effects included inflation-related wage and salary increases. This increase was partially offset by capacity-related adjustments to headcount. At EUR 23.5 million, other operating expenses were 0.9% lower than in the previous year (previous year: EUR 23.7 million).

The cost-cutting programs introduced early in 2023 already reduced expenses by a total of EUR 9.9 million, of which EUR 4.1 million became effective in the first quarter of 2024. Overall, around 82% of the savings are attributable to personnel expenses and the remainder to other operating expenses.

EBITDA in continued operations improved to EUR 23.0 million (previous year: EUR 21.0 million) and the EBITDA margin to 13.0% (previous year: 11.9%).

Regular depreciation and amortization increased to EUR 11.4 million in the first three months of 2024 (previous year: EUR 7.4 million), primarily as a result of the acquisition of the Rico Group. EBIT from continued operations therefore amounted to EUR 11.6 million (previous year: EUR 13.6 million).

The financial result amounted to EUR -3.6 million (previous year: EUR -2.0 million), which was primarily due to a slight increase in bank liabilities for the financing of growth projects.

Tax expenses remained unchanged at EUR 2.9 million (previous year: EUR 2.9 million), resulting in an effective tax rate for continued operations of 33.2% compared to 22.9% in the same period of the previous year.

Earnings after tax from continued operations were positive at EUR 5.0 million (previous year: EUR 8.7 million), while earnings after tax from discontinued operations amounted to EUR -1.4 million (previous year: EUR -8.3 million).

Overall, earnings after tax (from continued and discontinued operations) improved to EUR 3.6 million (previous year: EUR 0.4 million). Earnings per share attributable to the shareholders of Semperit AG Holding thus increased to EUR 0.18 in the first quarter of 2024 (previous year: EUR 0.02).

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Semperit Group I Report on the first quarter of 2024

Group management report

Discontinued operations

On March 21, 2024, the Semperit Group concluded a co-use agreement with Harps, the buyer of the medical business. This agreement enables Harps to use the production site for gloves in Wimpassing after the acquisition of the Surgical Operations business from Semperit. The Executive Board of Semperit therefore assumes that the sale of the Surgical Operations business ("second closing") is highly probable in the next twelve months. Thus, Surgical Operations met the requirements for a presentation as discontinued operations for the first time as of March 31, 2024. The comparative period (1-3 2023) was adjusted accordingly. The discontinued Examination Operations business is also presented in the comparative figures.

In the first three months of 2024, discontinued operations only comprised Surgical Operations and generated revenue of EUR 10.8 million and EBITDA of EUR 1.9 million with contract manufacturing for Harps. Following the conclusion of the co-use agreement, the sale of Surgical Operations is now likely to take place significantly earlier than originally expected. As part of the presentation as discontinued operations, a fair value based on the selling price and taking into account the planned price adjustment mechanism was determined as of March 31, 2024. Any disposal costs still to be incurred were deducted from this fair value. This resulted in an impairment requirement for Surgical Operations totaling EUR 2.8 million. Earnings after tax for discontinued operations therefore amounted to EUR -1.4 million.

Dividend policy

At the 135th Annual General Meeting of Semperit AG Holding held on April 23, 2024, the distribution of a dividend of EUR 0.50 per share for the 2023 financial year was resolved and paid out to the shareholders on April 30, 2024.

Group management report

Semperit Group I Report on the first quarter of 2024

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Assets and financial position

Balance sheet

The development of the balance sheet structure as of March 31, 2024, can be summarized as follows:

in EUR million	03/31/2024	Share	12/31/2023	Share	Change
Non-current assets		589.2	62%	597.7	64%	-1.4%
Current assets		345.5	36%	339.6	36%	+1.7%
Assets held for sale		15.4	2%	0.5	0%	n/a
ASSETS		950.1	100%	937.9	100%	+1.3%
Equity1		428.1	45%	425.3	45%	+0.7%
Non-current provisions and
liabilities		356.6	38%	346.6	37%	+2.9%
Current provisions and liabilities		156.3	16%	165.5	18%	-5.6%
Provisions and liabilities held for
sale		9.1	1%	0.4	0%	n/a
EQUITY AND LIABILITIES		950.1	100%	937.9	100%	+1.3%

1 Incl. non-controlling interests

Non-current assets changed only slightly. Essentially, additions to property, plant and equipment amounting to EUR 10.5 million (primarily machinery, technical equipment and facilities under con- struction) were offset by regular depreciation and amortization amounting to EUR 11.4 million.

Current assets increased primarily due to a EUR 7.3 million rise in cash and cash equivalents to EUR 119.9 million and a EUR 2.1 million increase in contract assets. This was offset by a reduction in inventories by EUR 4.1 million.

Equity increased to EUR 428.1 million as of March 31, 2024, due to the positive quarterly result. The slight increase in non-current provisions and liabilities was mainly due to an increase by

EUR 12.8 million in liabilities to banks for financing the expansion of hose production in Odry, Czech Republic (DH5 plant).

At EUR 156.3 million, current provisions and liabilities were EUR 9.2 million or 5.6% lower than at the end of 2023, which is mainly due to the reclassification of Surgical Operations to discontinued operations.

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Semperit Group I Report on the first quarter of 2024

Group management report

Net financial debt

in EUR million	03/31/2024	Change	12/31/2023
Corporate Schuldschein loan		38.6	+0.6%	38.4
Liabilities to banks		201.5	+6.4%	189.4
Financial liabilities		240.1	+5.4%	227.8
Cash and cash equivalents		119.9	+6.5%	112.7
Cash and cash-like investments		119.9	+6.5%	112.7
Net financial debt		120.2	+4.4%	115.2

The Semperit Group had net financial debt of EUR 120.2 million as of March 31, 2024, as financial liabilities (EUR 240.1 million) exceeded cash and cash equivalents (EUR 119.9 million) (December 31, 2023: net financial debt of EUR 115.2 million). The leverage ratio as the quotient of net financial debt divided by EBITDA was 1.6x as of March 31 (December 31, 2023: 1.6x).