Azelis : H1 2022 Financial Report (EN)

Azelis

Group NV

Interim Financial Report

for the first six months of 2022

Table Of Contents

Report of the management	3
H1 2022 Highlights	4
Operational review	6
Financial review	9
Statement of the Board of Directors	12
Report on review of condensed	13
consolidated interim financial
statements
Unaudited condensed consolidated	15
interim financial statements for the first
six months of 2022
Alternative performance measures	33
Disclaimer	37

2 Azelis | Interim report H1 2022

Report of the management

Azelis | Interim report H1 2022

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H1 2022 Highlights

• Revenue of EUR 2.0bn, representing year-on-year growth of 54.2%, of which 27.6% was organic. In Q2, revenue growth was 49.6%, with trends remaining strong across all regions.
• Five acquisitions completed in H1, representing total full year revenue of over EUR 190m1. Five more acquisitions representing additional total full year revenue of EUR 270m have been signed and expected to close in H2 2022.
• Gross profitof EUR 488.6m represents year-on-year growth of 64.9%, of which 37.7% was organic.
• Adjusted EBITA of EUR 242.6m represents a 90.7% increase and a 230 bp margin step-up. Conversion margin expanded by 673 bp compared to H1 2021, at 49.7%.
• Net profitof EUR 141.7m represents a year-on-year increase of 198.0%, driven by the strong topline growth, positive margin developments and lower financial costs.
• Free cash flow of EUR 139.2m shows an increase of 74.1%, despite continued investments in working capital to support strong growth.
• Leverage ratio was reduced to 2.3x at the end of June 2022, compared to 5.4x at the end of June 2021, and 2.7x at the end of December 2021.
• The Group expects to achieve full year 2022 adjusted EBITA in the range of EUR 410m-425m, versus the recently-upgraded consensus estimate of EUR 370m2.
• Tom Hallam has been appointed to the Board of Directors, and Chairman of the Audit and Risk Committee, succeeding Jürgen Buchsteiner, who is retiring from the Board after 4 years of service.

Azelis Group			Reported	Constant
(EUR m)	H1 2022	H1 2021	Change	Currency
Revenue	2,019.0	1,309.5	54.2%	49.9%
Gross Profit	488.6	296.4	64.9%	60.9%
Gross ProfitMargin	24.2%	22.6%	157 bp	162 bp
Adjusted EBITDA1	255.0	136.4	86.9%	82.9%
Adjusted EBITDA Margin	12.6%	10.4%	221 bp	224 bp
Adjusted EBITA2	242.6	127.2	90.7%	86.7%
Adjusted EBITA Margin	12.0%	9.7%	230 bp	232 bp
Conversion Margin3	49.7%	42.9%	673 bp	672 bp
Net Profit	141.7	47.5	198.0%	193.5%
Earnings per share (EPS€)4	0.59	0.20	200.8%	193.1%
Operating Cash Flow	151.5	90.2
Free Cash Flow5	139.2	80.0
FCF Conversion ratio6	56.9%	62.4%
Net Working Capital / Revenue normalized for acquisitions7	15.4%	12.5%
Leverage Ratio	2.3	5.4

1. Adjusted EBITA before depreciation of property, plant and equipment
2. Operating profitor loss before amortization and impairment of intangible assets and excluding adjustments
3. Adjusted EBITA / Gross profit
4. Prior year adjusted for current number of shares
5. Adjusted EBITDA less lease payments, plus changes in Net Working Capital, plus changes in other assets, liabilities and provisions, less net capital expenditures
6. Free Cash Flow divided by Adjusted EBITDA less lease payments
7. Net Working Capital/Revenue including those from acquisitions for the full period

1. Combined annual revenue in 2021.
2. Company compiled average consensus estimate as of July 20, 2022 (includes estimates of 9 sell-side analysts)

4 Azelis | Interim report H1 2022

Comment from Dr. Hans Joachim Müller, CEO: "I am pleased to present a strong set of H1 2022 results. In-line with our communication earlier in the year, the positive momentum in Q1 carried on to Q2, leading to revenue growth of 54% for the firsthalf of the year. We delivered another set of record results, generating almost 28% organic growth and a trebling in net profit,whilst reducing our leverage. Despite the lingering macroeconomic uncertainty, we remain focused on strengthening our business with new or expanded principal mandates, value-enhancing acquisitions and investments in our digital and laboratory network. Based on the strong performance in H1 2022, as well as our confidence in the resilience of our business, we expect to exceed current consensus expectation and deliver adjusted EBITA in the range of EUR 410m-425m for the full year.

I would like to take this opportunity to welcome Tom Hallam, who has joined the Azelis Board of Directors, and will be chairing our Audit & Risk Committee. Tom's track record in finance leadership and his breadth of industry experience will be invaluable to Azelis as we continue to grow our business and strengthen our global footprint. We thank Jürgen Buchsteiner for his service to the Board and the wider Azelis family and seeing the Group through its various growth milestones culminating in the IPO in 2021. The entire Azelis leadership team is excited for the opportunities and challenges ahead, and we remain committed to achieving our mission to become the reference innovation service provider in the specialty chemicals distribution industry."

Azelis | Interim report H1 2022

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