Basler : Six-month Report 2020 - PDF (989 kB)

6-MONTH REPORT

2021

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6-MONTH REPORT 2021	KEY FIGURES

KEY FIGURES

	01/01/ -	01/01/ -	Changes to
in € m*	06/30/2021	06/30/2020	previous year
Sales revenues	115.2	88.9	30 %
Incoming orders	152.4	92.3	65 %
Gross results	62.7	47.2	33 %
Gross profit margin	54.4 %	53.1 %	1.3 Pp.
Full costs for research and
development	14.2	12.1	17 %
Research and development
ratio	12.3 %	13.6 %	-1.3 Pp.
EBITDA	29.7	19.8	50 %
EBIT	21.0	13.2	59 %
EBT	20.8	12.8	63 %
EBT Margin	18.1 %	14.4 %	3.7 Pp.
Net income	15.7	9.6	64 %
Weighted average number of
shares	10,002,716	10,006,082	0 %
Result per share (€)	1.57	0.96	64 %
Cash flow from operating
activities	19.7	15.4	28 %
Cash flow from investing
activities	-9.1	-13.6	-33 %
Free Cash flow	10.6	1.8	>100 %

*unless otherwise stated

			Changes to
in € m*	06/30/2021	12/31/2020	previous year
Total assets	204.3	190.1	7 %
Long-term assets	95.1	95.0	0 %
Equity	122.7	114.9	7 %
Liabilities	81.6	75.2	9 %
Equity ratio	60.1 %	60.4 %	-0.3 Pp.
Net cash	23.0	23.0	0 %
Working Capital	38.2	27.3	40 %
Number of employees for the
period (full time equivalents)	833	808	3 %
Share price (XETRA) in €	104.40	72.00	45 %
Number of shares in
circulation	9,977,500	10,005,264	<1 %
Market capitalization	1,041.7	720.4	45 %

*unless otherwise stated

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INTERIM GROUP MANAGEMENT REPORT JANUARY - JUNE 2021

OVERVIEW OF THE FIRST SIX MONTHS OF 2021:

• Incoming orders: € 152.4 million (previous year: € 92.3 million, +65 %)
• Sales: € 115.2 million (previous year: € 88.9 million, +30 %)
• EBITDA: € 29.7 million (previous year: € 19.8 million, +50 %)
• EBT: € 20.8 million (previous year: € 12.8 million, +63 %)
• Net result: € 15.7 million (previous year: € 9.6 million, +64 %)
• Free cash flow: € 10.6 million (previous year: € 1.8 million, >100 %)

Dear Ladies and Gentlemen,

We are pleased to report very positive half-year results after a continuing positive course of business. We increased incoming orders, sales, and results with high growth rates. We take this momentum into the second half-year and even the way for a presumably strong financial year.

Despite continuing Corona related restrictions, and an increasingly challenging situation with the supply markets for semiconductor and electronics, we were fully functional in the first half-year, and increased our production volume by 37 % compared to the previous year. However, the very strong demand combined with bottlenecks in material procurement led to an extension of our delivery times and a further increase in the order backlog, representing a major challenge in the second half of the year against the background of the further worsening situation in the procurement market. We would like to take this opportunity to thank our customers for their trust and understanding and will continue to manage our supply chains with the highest priority in order to successfully master the situation in the procurement markets.

Beyond the operational business success, we recorded considerable progress in our strategic organizational and product development projects, and thus made further contributions to our long-term growth plans. Additionally, on April 1, a new organizational structure went live even better supporting the implementation of our company strategy.

Particularly due to our strong position in Asia, we benefitted in the best possible way and significantly stronger than the industry from the current upswing, and thus further increased our market shares. The double-digit increase in sales led to considerable economies of scale within the group. Consequently, we increased our net result by over 60 % compared to the previous year. The pre- tax return rate of 18 % was considerably above our long-term steering target of approximately 12 %.

These positive results were mainly achieved by the passion and extraordinary high commitment of our employees. We would like to thank them for their tireless dedication - especially in these challenging times.

In order to continue our further growth path with a high employee loyalty and new talents, we continuously invest in the employer attractiveness of Basler. In this context, we are very pleased to have recently been awarded the "Audit Beruf und Familie" (Job and Family) certificate for the fourth time. An attractive and family-friendly working environment is an integral part of our growth strategy. Furthermore, for the second time in a row, we won the Axia Best Management Award. The jury certified us excellent in strategy, productivity & innovation, culture & commitment as well as governance & finance.

The signs for a further good global economic development in 2021 are positive. We assume that the continuing overdemand for semiconductor and electronic products will lead to further equipment investments and thus to a demand for image processing technology. Furthermore, we see the first signs of a step- by-step improvement of the demand for image processing components from the general machinery and plant engineering categories as well as from the automotive industry. However, at the same time we assume the situation in the supply markets to remain very tense in the upcoming months limiting our

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6-MONTH REPORT 2021	INTERIM GROUP MANAGEMENT REPORT JANUARY - JUNE 2021

production volume due to supply bottlenecks. This is why we adhere to our annual forecast until further notice - despite the very high incoming orders and a positive market outlook.

The successful start into the year and the outlook for the upcoming quarters motivate us to further scale our global organization. With great passion and powerful investments, we will continue to shape Basler's future and transform the company from a camera maker to a full range supplier. In this context, in the past months, we authorized the recruiting of approximately 150 new employees and started the implementation of this recruiting program.

With this compact report, we would like to give you a deeper insight into the development of the Basler AG in the first half of this fiscal year.

BUSINESS DEVELOPMENT

The Basler group closed very successfully the first six months. Compared to the same period of the previous year, sales increased by 30 % and incoming orders by 65 %. The strong demand for investment goods in the semiconductor, electronics, and logistics sectors continued in the second quarter. The demand from the general machinery and plant engineering as well as from the automotive industry showed the first signs of recovery.

Orders and sales of the German industry for image processing components also confirm this market development. According to VDMA (Verband Deutscher Maschinen- und Anlagenbau, German Engineering Federation), compared to the previous year, they recorded double-digit growth rates in the first six months of the year. At the end of June 2021, for the year under review, the VDMA (Verband Deutscher Maschinen- und Anlagenbau, German Engineering Federation) reported an increase in sales of 17 % for the German manufacturers of image processing components. According to VDMA, the industry's incoming orders increased by 29 % in the same period. Consequently, the Basler group considerably increased its market shares.

The Basler group also is affected by the global shortage in semiconductor components. Until now, the company successfully managed this shortage by its market position, long-term supplier relationships as well as a professional

supply-chain-management and thus ensured a material supply for a high production level. However, the situation on the supply markets for semiconductor and electronics components is very tense and will probably only improve in the course of the following calendar year. This presents the company with the great challenge to continue the delivery capability of the first half-year and additionally reduce the order backlog and delivery times.

PRODUCT LAUNCHES

All activities around the development and launch of new products took place with high intensity in the first half-year. A total of € 14.2 million (previous year: € 12.1 million) was spent on development services. In the area of market communication, the Corona pandemic led to an even stronger focus on online activities in order to reach customers.

Mid-January, Basler announced the expansion of the boost camera series by CoaXPress 2.0 (CXP 2.0) interface and launched six new high resolution models based on this technology. Thanks to their CXP 2.0 interface, Basler boost cameras are ideally suitable for applications with image transmission distances up to 40 meters requiring high data rates and resolutions. This can be for example applications in the semiconductor, photovoltaic, inspection of displays, print and packaging industries, and medical technology industries.

Additionally, a new processing kit was presented at the embedded world 2021 DIGITAL rethinking embedded vision: The board developed by Basler is both - from the hardware and the software - optimized for a variety of vision applications. Due to its design developed for industrial use, the development kit can be used not only for prototyping but also in series production. Developers can thus use the embedded processing kit to create ready-to-use vision solutions very quickly. Furthermore, the new cooperation activities with Amazon Web Services were presented at the fair aiming at providing customers with embedded vision systems with cloud connection and AI algorithms.

Moreover, Basler extended its cooperation with the Variscite company in the field of embedded vision solutions with NXP i.MX 8M Plus technology. Variscite is the only system-on-module (SoM) manufacturer listed as platinum partner of

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INTERIM GROUP MANAGEMENT REPORT JANUARY - JUNE 2021

NXP giving it early access to new product launches before they are introduced on the market. Thus, Variscite is the only global SoM manufacturer launching the entire i.MX 8 product range on the market simultaneously with the launch of new NXP processors.

Within the change from a camera maker to a full range provider of accessories

• cables, lenses, processing cards and lighting - the offering continues to expand. In this context, it is worth mentioning the Vision Systems Design 2021 Innovators Award, that was presented to Basler AG and its cooperation partner CCS Inc. at the end of May. Basler and CCS, a leading provider of LED industrial lighting, developed a comprehensive portfolio of intelligent lighting. The new lighting solution for selected Basler ace cameras with the Basler SLP feature enable a direct communication between the camera and the light source with only one software, the pylon camera suite software. This reduces the complexity of a vision system and shortens the time required for design and installation on the customer side.

In order to enable customers a targeted selection of image processing components, additional web tools were made available for them.

OUTLOOK

The Basler group very successfully closed the first six months of the current financial year 2021 above expectations. It started with a very positive ratio between incoming orders and sales into the third quarter of 2021.

The positive trend of demand for image processing components in applications for semiconductor and electronics as well as logistics typically weakens in the second half-year due to season reasons. However, due to the bottlenecks in the supply markets this weakening is expected be milder this year.

Furthermore, the management assumes the demand for image processing components to recover further in other automation fields and the demand from the medical sector to increase continuously.

Despite positive market outlooks, the management confirms its growth forecast until further notice, due to high uncertainties in the procurement markets. This includes sales within a corridor of € 205 - 225 million at a pre-tax return rate of 13 - 15.5 %. This yield includes increasing personnel costs and material costs in the course of the second half-year that will be caused by new hirings and the reduction of Corona restrictions. In addition, the yield forecast takes into account a slight decrease in the gross profit margin due to increased material costs from interim purchases from brokers.

Management is positive about the future and will update its medium-term business planning at the end of the year. This currently envisages achieving sales of approximately Euro 250 million in 2023.

INTERIM MANAGEMENT REPORT INCLUDING ESSENTIAL SUPPLEMENTARY DISCLOSURES OF THE ANNUAL FINANCIAL STATEMENT OF DECEMBER 31, 2020 ACCORDING TO IFRS

REPORT ON PROFIT, FINANCE, AND ASSET SITUATION

SALES AND INCOMING ORDERS, COSTS OF SERVICE PROVISION

Compared to the same period of the previous year, sales increased by 30 % to Euro 115.2 million (previous year: Euro 88.9 million). Incoming orders increased by 65 % to € 152.4 million (previous year: € 92.3 million). The geographical distribution of sales is heavily weighted towards Asia, at 57 %. The relatively strong demand from the semiconductor and electronics sector as well as the

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