AlzChem : Quarterly Statement Q1 2024

Alzchem Group AG

QUARTERLY STATEMENT

Q1 2024

2 Q1 2024 | Quarterly Statement Alzchem Group AG

Alzchem at a Glance

~ € 150 ~ € 25
mn	mn
sales generated by Alzchem in	EBITDA generated by Alzchem in
the 1st quarter of 2024	the 1st quarter of 2024
1st quarter of 2023: ~ € 150 mn	1st quarter of 2023: ~ € 19 mn

MARKETS

HEALTH &	ANIMAL	FINE	PHARMA	AGRICULTURE
NUTRITION	NUTRITION	CHEMISTRY

RENEWABLE	METALLURGY	CUSTOM	AGRI	AUTOMOTIVE
ENERGIES		SYNTHESIS	SOLUTIONS	& DEFENSE

EBITDA MARGIN BY MAIN SEGMENTS

THREE REPORTING SEGMENTS

24.4%
	3.7%
SPECIALTY CHEMICALS	BASICS & INTERMEDIATES

62% SPECIALTY CHEMICALS

Production and distribution of high-quality chemical products

CONTRIBUTION

TO SALES

1st QUARTER

2024

33% BASICS &

INTERMEDIATES

Production of chemical intermediates for direct sale or refinement as specialty chemicals products

5% OTHER & HOLDING

Other activities, mainly services related to the chemical parks Trostberg and Hart

3 Q1 2024 | Quarterly Statement Alzchem Group AG

Table of contents

1.	Development of the Group	7
1.1	SIGNIFICANT DEVELOPMENTS IN THE 3-MONTH PERIOD FROM JANUARY 1 TO MARCH 31, 2024	7
1.2	ALZCHEM GROUP AG RECEIVES EUR 34.4 MILLION IN EU FUNDING	8
1.3	RESULTS OF OPERATIONS	8
1.4	FINANCIAL POSITION	10
1.5	NET ASSETS	11
2.	Development in the segments	13
2.1.	SPECIALTY CHEMICALS SEGMENT	13
2.2	BASICS & INTERMEDIATES SEGMENT	14
2.3	OTHER & HOLDING SEGMENT	15
3.	Sustainability at Alzchem	16
3.1	SAP SUSTAINABILITY FOOTPRINT MANAGEMENT (SFM): IMPLEMENTATION PLANNED	16
3.2	NEW TRAINING CENTER FOR CHEMICAL TECHNICIANS IN TROSTBERG	16
3.3	IMPLEMENTATION OF THE ACT ON CORPORATE DUE DILIGENCE OBLIGATIONS IN SUPPLY CHAINS....	17
4.	Forecast	17
5.	Significant events after the balance sheet date	18
LIST OF ABBREVIATIONS	18
FINANCIAL CALENDAR 2024	18
REMARKS	19
IMPRINT	19

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4 Q1 2024 | Quarterly Statement Alzchem Group AG

EBITDA growth of 31.7% especially thanks to specialty chemicals; confirmation of the forecast for the fiscal year

• Group sales reach the previous year's level at EUR 150.1 million.
• Group EBITDA increases significantly by 31.7% to EUR 24.9 million; EBITDA margin rises strongly from 12.6% to 16.6%.
• Specialty chemicals business remains earnings driver with significant increases in both sales and EBITDA.
• The Human Nutrition (Creapure®), Animal Nutrition (Creamino®) and Defense (nitroguanidine) product areas continue to record high demand.
• Industry and price-related challenging developments in the area of multi-purpose plants (custom manufacturing) and in the NITRALZ® business.
• Positive investment decision for incremental expansion of creatine production capacities.
• The various ESG activities are progressing according to plan.
• Capital market rewards sustained positive business performance with share price increase of 41% in the first quarter 2024.
• Outlook 2024: forecast confirmed.

Note: Unless otherwise stated, all amounts are stated in EUR thousand. For computational reasons, rounding differences of ± one unit may occur in tables.

5 Q1 2024 | Quarterly Statement Alzchem Group AG

KEY FIGURES OF THE ALZCHEM GROUP

SALES AND EBITDA SHARE BY SEGMENT IN THE 1ST QUARTER 2024

Key figure	Unit	1st quarter 2023
Sales	EUR thousand	150,432
EBITDA	EUR thousand	18,917
EBITDA margin	%	12.6
EBIT	EUR thousand	12,598
Result for the period	EUR thousand	7,710
Earnings per share	EUR	0.76
(undiluted and diluted)*

1st quarter 2024

150,064

24,910

16.6

18,375

12,237

1.20

5%

Other & Holding

62%

Specialty Chemicals

SALES

33%

Basics & Intermediates

Equity ratio

%

34.7

40.0

2%

Other & Holding

7%

Basics & Intermediates

• In the period 01/01-03/31/2023 calculated with 10,149,281 shares; in the period 01/01-03/31/2024 calculated with 10,176,335 shares.

91%

Specialty Chemicals

EBITDA

6 Q1 2024 | Quarterly Statement Alzchem Group AG

CHANGE IN SALES COMPARED TO PREVIOUS YEAR

EUR	1.9%	-1.8%	-0.3%	EUR
150.432	Volume	Price	Currency	150.064
thousand				thousand

Sales	Sales
Q1/2023	Q1/2024

7 Q1 2024 | Quarterly Statement Alzchem Group AG

1. Development of the Group

1.1 SIGNIFICANT DEVELOPMENTS IN THE 3-MONTH PERIOD FROM JANUARY 1 TO MARCH 31, 2024

The Alzchem Group has made a successful start to the fiscal year 2024. In total, Alzchem achieved consolidated sales of EUR 150.1 million in the 1st quarter of 2024, confirming the strong 1st quarter of the previous year (EUR 150.4 million). Thanks to the consistent focus on high-margin niche products in the Specialty Chemicals segment, it was possible to seamlessly continue the strong performance of the fiscal year 2023 in the first quarter of 2024. The Specialty Chemicals business thus remains Alzchem's growth driver, which is reflected in a significant increase in both sales (+8.4%) and EBITDA (+41.6%) in this segment.

The Human Nutrition (Creapure®), Animal Nutrition (Creamino®) and Defense (nitroguanidine) segments continued to perform particularly well. By contrast, business in the Custom Manufacturing segment (multi-purpose plants), which is significantly influenced by the general chemical economy, remained challenging, as did the NITRALZ® business because of persistently strong price-driven competition from China. Overall, however, the Specialty Chemicals growth segment successfully compensated for the decline in sales in the Basics & Intermediates segment.

In terms of earnings development, the Specialty Chemicals segment once again proved to be a key driver for Alzchem in the reporting period. The shift in sales between the segments means that the higher-margin specialty chemicals are increasingly reflected in earnings. The fact that the manufacturing costs of the products in the Specialty Chemicals

segment are significantly less influenced by the electricity price than in the Basics & Intermediates segment also has a positive effect here. In the reporting period, electricity prices - based on the slightly reduced but still high overall level of the 4th quarter of 2023 - no longer recorded any massive jumps, but stabilized further, which enabled Alzchem to set more constant prices on the market. The scaling of the plant expansions, particularly in the Human Nutrition segment, also had a clearly positive effect on earnings development in the 1st quarter of 2024. In addition, the Animal Nutrition and Defense divisions made further important contributions to earnings. Against this background, Group EBITDA rose significantly by 31.7% to EUR 24.9 million in the 1st quarter of 2024. Considering the stable sales trend, the EBITDA margin increased significantly from 12.6% to 16.6%.

On the production side, Alzchem has decided on a further incremental expansion of creatine production capacities. The investment volume will total around EUR 15 million and will be divided into two phases. The first phase is expected to be completed in the first half of 2025 and the second phase in the first half of 2026. With the additional capac- ities, Alzchem is responding to the continuing high market demand and thereby strengthening its good market posi- tion. In addition to the already established creatine products Creapure® and LIVADUR®, there is also great growth potential for Creavitalis®, which is used as a fine, tasteless powder in health and nutrition and was only launched on the market in autumn 2023.

The development in operating cash flow continues to be just as pleasing. The combination of increased earnings power and the continuation of strict working capital management more than tripled the operating cash flow to EUR

33.5 million compared to the same period of the previous year. This effect is also reflected in the increase in cash and cash equivalents, which also more than tripled to EUR 36.0 million compared to December 31, 2023.

At the same time as the very good performance in the operating business, the Alzchem share price also developed very positively in the 1st quarter of 2024 with a significant increase in value of 41%. From the company's perspective, the capital market is thus increasingly rewarding the sustained positive business development. Equity analysts in particular emphasize the broad diversification of the products and the high innovative strength, which have led to a steadily growing importance of the Specialty Chemicals business and a unique position in numerous high-growth and high- yield products. Moreover, Alzchem has proven itself to be a resilient company in the past times of crisis that acts with agility and can successfully adapt to the individual needs of its customers as well as to social and global developments.

8 Q1 2024 | Quarterly Statement Alzchem Group AG

1.2 ALZCHEM GROUP AG RECEIVES EUR 34.4 MILLION IN EU FUNDING

1.3 RESULTS OF OPERATIONS

CONSOLIDATED INCOME STATEMENT (IFRS, UNAUDITED)

Nitroguanidine and the precursor guanidine nitrate are a key investment focus for the expansion of capacities. Nitroguanidine is used in plant protection, as a propellant for airbags and, increasingly, in defense applications. In mid-March 2024, Alzchem was awarded an investment grant of EUR 34.4 million by the EU Commission as part of the ASAP ("Act in Support of Ammunition Production") funding instrument following a Europe-wide selection process. The non-repayable funds are to be used over a period of two and a half years to increase the production capacities for nitroguanidine and to renew and expand the existing facilities for the production of guanidine nitrate. The planned total investment volume over several years will amount to approximately EUR 75 million. Following approval in principle by the EU, the corresponding funding agreement is currently being drawn up. Once the funding agreement has been finalized, the final allocation of the funding and the respective payment dates are expected to take place in the 1st half of 2024.

in EUR thousand	1st quarter 2023
Sales	150,432
Change in inventories of finished goods and work in	916
progress
Other operating income	5,574
Cost of materials	-76,159
Personnel expenses	-35,262
Other operating expenses	-26,584
EBITDA	18,917
Depreciation and amortization	-6,319
EBIT	12,598
Other interest and similar income	49
Interest and similar expenses	-1,882
Financial result	-1,833
Result from ordinary business activities	10,765
Taxes on income and earnings	-3,055
Consolidated result for the period	7,710
thereof non-controlling interests	43
thereof shares of the shareholders of Alzchem	7,667
Group AG
Earnings per share in EUR (undiluted and diluted)*	0.76

1st quarter 2024

150,064

-6,520

3,558

-53,237

-40,588

-28,367

24,910

-6,535

18,375

292

-1,454

-1,162

17,213

-4,976

12,237

43

12,194

1.20

• In the period 01/01-03/31/2023 calculated with 10,149,281 shares; in the period 01/01-03/31/2024 calculated with 10,176,335 shares.

9 Q1 2024 | Quarterly Statement Alzchem Group AG

In the first three months of the fiscal year 2024, Alzchem generated sales of EUR 150,064 thousand, roughly on a par with the same period of the previous year. The segments again contributed to this sales development in different ways. While sales in the Specialty Chemicals growth segment increased by EUR 7,178 thousand (+8.4%) compared to the previous year, the Basics & Intermediates segment recorded a decline in sales of EUR 8,037 thousand (-14.0%), which was mainly driven by price formulas. The Other & Holding segment recorded a slight increase in sales of EUR 491 thousand. As in the previous year, the sales performance of the segments reflects the strategy of consciously accepting volume declines in low-margin business as long as this does not impair the optimal production process. This continues the trend of the Basics & Intermediates segment's share of sales increasingly shifting to the Specialty Chemicals segment.

The cost of materials is considered together with the changes in inventories as an "extended cost of materials ratio". In the first three months of the fiscal year 2024, the cost of materials amounted to EUR 53,237 thousand and was therefore EUR 22,922 thousand lower than in the previous year. While a change in inventories of EUR 916 thousand was recorded as an increase in inventories in the same period of the previous year, the volume- and cost-related reduction in inventories led to a negative change in inventories of EUR 6,520 thousand in the reporting period. The effect of this cost reduction is also reflected in the positive development of the cost of materials ratio. In addition, the further shift of sales to the Specialty Chemicals segment also has a positive effect on the cost of materials, which is generally not as strongly influenced by the price of electricity for specialty chemicals products as it is for basic chemicals. The extended cost of materials ratio has therefore fallen again and now stands at around 40%, compared to 50% in the previous year.

Other operating income was EUR 2,016 thousand below the previous year's level. This is mainly due to lower foreign currency gains.

Personnel expenses amounted to EUR 40,588 thousand in the first three months of 2024, up 15% on the previous year. The increase is the result of collectively agreed pay rises and the increase in provisions for performance-related wage and salary components for Alzchem employees due to the positive development of the underlying business result and the share price. The number of employees, on the other hand, remained largely stable.

Other operating expenses amounted to EUR 28,367 thousand in the reporting period, an increase of EUR 1,783 thousand on the previous year. Significant rises were recorded primarily in waste disposal costs as a result of higher volume production in the Specialty Chemicals segment. Foreign currency losses decreased compared to the previous year.

In the first three months of the fiscal year 2024, Alzchem generated EBITDA of EUR 24,910 thousand, up EUR 5,993 thousand or 32% on the previous year. The two operating segments developed differently. While the Specialty Chemicals segment significantly exceeded the previous year's EBITDA (EUR +6,665 thousand), the Basics & Intermediates segment recorded a decline of EUR 978 thousand.

The EBITDA margin was 16.6% in the reporting period and therefore significantly higher than the 12.6% in the same period of the previous year. There are various reasons for the positive development of the Group's profitability. These include the shift in business shares with significantly increasing volumes towards the high-margin Specialty Chemicals segment. The strategy of focusing on business with higher margins while accepting lower volumes in the Basics & Intermediates segment also contributed to the positive development of Alzchem's EBITDA and EBITDA margin. In addition, the price level of energy costs has stabilized significantly compared to the same quarter of the previous year and even decreased at times, although electricity prices are still higher compared to the period before the war in Ukraine.

Depreciation and amortization increased as planned by EUR 216 thousand to EUR 6,535 thousand.

The financial result amounted to EUR -1,162 thousand and was therefore around 1/3 better than in the previous year (EUR -1,833 thousand). The improved financial result was mainly due to the stable cash situation of the Alzchem Group. On the one hand, this allowed surplus liquidity to be invested profitably and, on the other hand, the sale of receivables was reduced, which also reduced the interest burden. Non-cash interest effects also had an impact on the improved financial result. These are mainly the result of interest rate changes from the valuation of long-term personnel provisions. The different development of discount rates for non-current provisions led to a decrease in interest expenses for valuation purposes compared to the 1st quarter of 2023. Slightly lower interest expenses were recorded for pension obligations in the first three months of the fiscal year 2024, as the interest rates as of 31 De- cember of a year are always used for the subsequent period. These were lower on December 31, 2023, than on December 31, 2022, and led to EUR 32 thousand lower interest expenses than in the same period of the previous year.

Tax expenses amounted to EUR 4,976 thousand in the first three months of 2024 and were therefore EUR 1,921 thousand higher than in the same period of the previous year. With a tax rate of 28.9% (previous year: 28.4%), tax expenses thus developed in line with the increase in the operating result.

10 Q1 2024 | Quarterly Statement Alzchem Group AG

In total, consolidated result for the 3-month period 2024 amounted to EUR 12,237 thousand, up EUR 4,527 thousand or 59% on the previous year.

Earnings per share also rose as a result of the improved consolidated result for the period. They amounted to EUR 1.20 in the reporting period, an increase of EUR 0.44 or 58% compared to the previous year. Earnings per share were calculated using a weighted average number of shares in circulation of 10,176,335 in the period from January 1 to March 31, 2024, and 10,149,281 in the period from January 1 to March 31, 2023.

The Alzchem Group received EUR 33,450 thousand in cash from operating activities in the first three months of the fiscal year 2024. The increase of EUR 23,205 thousand compared to the same period of the previous year is mainly due to the increase in EBITDA (EUR +5,993 thousand) and the reduction in net working capital - in the first quarter of the previous year, there was still an increase in net working capital. The change in net working capital alone resulted in a EUR +14,157 thousand increase in operating cash flow.

The Alzchem Group spent EUR 6,894 thousand on investing activities in the reporting period. Investment expenditure was therefore EUR 2,056 thousand higher than in the previous year. While investment activity in the first quarter of 2023 was still restrained due to the uncertain overall economic situation in this period, investments were significantly higher in the first quarter of 2024. The focus of investment activity in the reporting period was primarily on

1.4 FINANCIAL POSITION

CONSOLIDATED CASH FLOW STATEMENT (IFRS, UNAUDITED)

in EUR thousand	1st quarter 2023
Cash flow from operating activities	10,245
Cash outflow from investing activities	-4,838
Free cash flow	5,407

Cash outflow (-)/inflow (+) from financing	-6,383
activities
Net decrease (-)/increase (+) in cash and	-976
cash equivalents

1st quarter 2024

33,450

-6,894

26,556

-2,415

24,141

capacity expansions, infrastructure renewals and the construction of a photovoltaic system at the Trostberg site.

The significant increase in operating cash flow of EUR 23,205 thousand led to an overall increase in free cash flow of EUR 21,149 thousand compared to the same period of the previous year, despite the EUR 2,056 thousand higher cash outflow from investing activities. Free cash flow for the first three months of 2024 therefore amounted to EUR 26,556 thousand.

The cash outflow from financing activities of EUR -2,415 thousand mainly includes the scheduled repayment of non-current liabilities to banks (EUR -1,771 thousand).

Cash and cash equivalents amounted to EUR 35,997 thousand as of March 31, 2024. Taking currency effects into account, this corresponds to an inflow of EUR 24,141 thousand compared to December 31, 2023.

Since the beginning of the fiscal year 2024, Alzchem has been able to generate a clearly positive operating cash flow, which was used for investment activities and the repayment of financial liabilities, among other things. Cash surpluses can be partially invested at short notice to generate interest. As a result of this development, Alzchem remains on a very solid financial footing and feels well equipped for future investment projects (such as the ASAP investment project mentioned above).