Blue Cap : 2023 Half-Year Report

BLUE

CAP

VALUE- ADD PERFORMANCE

2023 half-year report

BLUE CAP

CONTENTS

GROUP KEY FIGURES

EUR thousand

VALUE-ADD

PERFORMANCE

• Letter to our shareholders
  5 Our business model
  BUY, TRANSFORM & SELL
  7 Highlights in the first half of 2023
  9 Blue Cap on the capital market

14 _ INTERIM GROUP MANAGEMENT REPORT

33 _ INTERIM CONSOLIDATED

FINANCIAL STATEMENT

58 _ FURTHER INFORMATION

59 Adjusted consolidated­income

statement

60 Contact, financial calendar and legal notice

INTERESTING

FACTS You can find more details about the NAV starting on page 16

Continuing operations

Revenue

Adjusted EBITDA

Adjusted EBITDA margin in% * Adjusted EBIT

Adjusted EBIT margin in% * Consolidated income

Cash flow from operating activities Cash flow from investment activities

Earnings per share in EUR

Total assets

Net asset value in EUR million Equity

Equity ratio in%

Working capital (net) **

Net debt ratio in years***

No. of employees in the Group (aver- age)

No. of employees in the holding ­company (average)

	H1
	2023	H1 2022	Change in%
	145,375				145,828		0.3
	11,453				15,795		27.5
	7.9%				10.5%		24.8
	4,128				10,114		59.2
	2.8%				6.7%		57.8
	-7,876	14,387		>100
	7,865
				-4,833	>100
	-2,173	-4,330	49.8
	-1.78	3.36		>100
	30 June
	31 Decem-
	2023
			ber 2022	Change in%
	282,243				298,701		5.5
	136.2				160.8		15.3
	97,777				109,362		10.6
	34.6%				36.6%		5.4
	59,462				63,452		6.3
	3.1				2.4		29.2
	1,475
				1,452		1.6
	13
				13		0

• Adjustments: Adjusted to reflect extraordinary, non-period and other effects resulting from reorganisation measures and one-off effects, as well as effects arising from the purchase price allocations

• incl. contract assets and contract liabilities
• Taking into account the net cash inflows from the sale of the Knauer Uniplast Group collected in July 2023, the net gearing ratio as at 30 June 2023 is 2.7 years

2023 HALF-YEAR REPORT _

2

BLUE CAP		VALUE-ADD	INTERIM GROUP	INTERIM CONSOLIDATED	FURTHER
	PERFORMANCE	MANAGEMENT REPORT	FINANCIAL STATEMENT	INFORMATION
		_ LETTER TO OUR SHAREHOLDERS

LETTER TO OUR SHAREHOLDERS

Dear shareholders,

Blue Cap AG performed solidly as expected in the first six months of the financial year, considering the challenging economic environment. After a subdued first quarter of the year, earnings in particular made headway in the second quarter and were on target by the end of the first half of the year.

This was mainly thanks to the successes of the operational transformation measures implemented at the individual portfolio companies. Introducing an optimised pricing and cost management strategy at many of the portfolio companies prompted an increase in the adjusted EBITDA margin from 6.2% in the first quarter of 2023 to 9.7% in the second quarter. For the first half of the year as a whole, this corresponds to a margin of 7.9% which, as expected, did not reach the previous year's high level of 10.5%. The foundation for this is consolidated net sales of EUR 145.4 million and an operating result (adjusted EBITDA) of EUR 11.5 million. The strong business performance of HY-LINE

and improvements at H+E had a positive impact. The year-on-year decline in earnings is mainly down to weaker business at con-pearl as anticipated, following the record year 2022, as well as at the two companies in the Adhesives & Coatings segment.

Alongside the company's operational development, all our activities in the first half of the year focussed on strategic advancement and on additional earnings improvement through active portfolio management in particular. The transformation of our portfolio is one of our business model's three main pillars - 'Buy, Transform, Sell'. We see this process as the core of Blue Cap, from acquisition to exit. To achieve our goal, we are developing strategic focus areas for our portfolio companies along our transformation radar. In the first half of 2023, these were reflected most especially in the "People & Culture," "Margin" and "Balance Sheet" dimensions. In the first half of the year, we completed the restructuring of the management levels of our portfolio companies. Cost-saving measures in many of the companies are paying off in terms of securing margins, and stringent working capital management is improving liquidity in the portfolio as a whole. All told, we have succeeded in increasing the portfolio's resilience in a measurable way. In order to benefit from this for the full year, we are relying on the second half

_ from left to right:

Henning Eschweiler, Chief Operating Officer and ­responsible for portfolio management and ESG, Tobias ­Hoffmann-­Becking, Chief Executive Officer and responsible for M&A and

Capital­ Markets, Matthias Kosch, Chief Financial Officer and ­responsible for finance, accounting and IT

2023 HALF-YEAR REPORT _

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BLUE CAP		VALUE-ADD	INTERIM GROUP	INTERIM CONSOLIDATED	FURTHER
	PERFORMANCE	MANAGEMENT REPORT	FINANCIAL STATEMENT	INFORMATION
		_ LETTER TO OUR SHAREHOLDERS

of the year being at least equal to the first six months in terms of turnover.

In operational terms, we are continuing the transformation across the entire portfolio. Having implemented the rigorous measures to secure earnings in the first six months, our focus for the second half of the year is increasingly on creating the basis for value-oriented growth and leveraging synergies in the operational structure concerned - the "growth" dimension of our transformation radar. In most of our companies, the targeted improvement in sales performance offers not only the opportunity to benefit early from an economic upturn, but also to present growth in the medium term in a scenario of sideways developing markets. At inorganic level, we are increasingly screening potential add-on targets, particularly for HY-LINE.

Let us emphasise this one thing: None of these initiatives stands contrary to the clear focus on cost control. We are expecting a challenging second half of the year, will act in line with the situation concerned and maintain the cost discipline we have learned.

On the M&A side, we were able to post a success with the Uniplast sale in the first half of the year. Total proceeds (before taxes) were in the low double-digit million range. We are particularly pleased that we have transformed the company in the last few years with numerous measures to increase results in such a way that it could be sold to the Managing Director and COO&CIO in a management buy-out and they can continue the growth in a new constellation.

Despite the overall solid results, there is no disguising the fact that we are not happy with the development of our share price. However, we are firmly convinced that we are setting the right course with our initiatives, creating the basis for a medium-term recovery of the share price.

Overall, we feel well positioned with our portfolio companies for the second half of 2023. With this in mind, we are expecting consolidated sales of between 275-295 million euro and an adjusted EBITDA margin of 8-9% for the full year 2023, excluding the divested Uniplast. In the medium term, we see significant growth and earnings potential at most of our portfolio companies as a result of the measures described above and have set ourselves the target of achieving a net asset value per share of EUR 55 for the Group by the end of 2025. We are doing everything in our power to achieve this - ultimately, Blue Cap's potential should be reflected in generating value for you, our shareholders.

We would like to take this opportunity to thank our employees for their outstanding commitment, without which these positive developments and changes in our Group would not be possible.

We would also like to thank you, our shareholders, for your confidence in our company. Our appreciation is also reflected in the increase in the dividend to 0.90 EUR per share. This year, for the first time, we offered the alternative of receiving new shares, an option which was taken up by 70% of our shareholders. We

consider this a huge show of support, which we intend to live up to in our day-to-day activities.

It would give us the greatest of pleasure to have you with us on the journey we have planned to sustainable and profitable growth.

Munich, August 2023

Your Management Board

2023 HALF-YEAR REPORT _

4

BLUE CAP		VALUE-ADD	INTERIM GROUP	INTERIM CONSOLIDATED	FURTHER
	PERFORMANCE	MANAGEMENT REPORT	FINANCIAL STATEMENT	INFORMATION
		_ OUR BUSINESS MODEL

OUR BUSINESS MODEL

BUY, TRANSFORM & SELL

As an investment company, Blue Cap AG acquires and supports SMEs from the B2B sector that have clear potential for improving their earnings and growth prospects.

"BUY":

STRUCTURED M&A PROCESS

Our acquisition process involves the systematic identification and selection of target companies based on solid criteria. Value enhancement potentials and our ability to transform enterprises also come into play. The initial situations are as diverse as the companies we acquire. However, we always apply one general principle: We adapt to individual circumstances and put the well-being of the company in the foreground. We focus our attention on corporate culture and on employees.

"TRANSFORM":

ACTIVE PORTFOLIO MANAGEMENT

As a matter of principle, all our companies pursue stand-alone, operational strategies designed to be driven forward by their management boards. At the same time, we provide active support to the portfolio companies. Both immediately after the acquisition during the onboarding phase, and also as part of the companies' further strategic and operational develop- ment. We define the transformation projects together with the management team and devise a quantified vision. We do this using the Blue Cap transformation radar, which identifies value drivers in seven dimen- sions. "People & Culture" as well as "Balance Sheet", "Margin" and "Growth" are the core of our transformation skills and value creation expertise. As a team, we have outstanding capabilities in these dimensions

• they are at the centre of our active portfolio manage- ment. In the "Technology", "ESG" and "Business Model" dimensions, we draw on an excellent network of experts. We act as the initiator and enabler for our port- folio and take responsibility for project management to make the initiatives a success.

OUR FOCUS: MEDIUM- SIZED ENTERPRISES IN THE B2B SECTOR

_ Fundamentally intact core business

_ Attractive positioning in a market niche

• Registered office in Germany,
  Austria or Switzerland

_ Annual revenue: EUR 30 million to EUR 80 million

_ Majority stake

_ Potential for economic improvement

_ Growth opportunities (organic and inorganic)

• Compatibility with our sustainability objectives

2023 HALF-YEAR REPORT _

5