Einhell Germany : Business report for 2023,

FINANCIAL	REPORT

2023

WE CELEBRATE!

60 YEARS EINHELL.

I COMBINED MANAGEMENT REPORT OF THE EINHELL GROUP AND EINHELL GERMANY AG

1. PREAMBLE

The combined management report published in the Annual Report 2023 comprises the Group management report and the management report of Einhell Germany AG. Unless otherwise stated, the report on performance and financial figures as well as the situation and the expected development relates to both the Group and Einhell Germany AG. Sections containing information on Einhell Germany AG only are identified as such. In the economic report, disclosures in accordance with the German Commercial Code (HGB) for Einhell Germany AG are presented in a separate section.

2. BUSINESS ACTIVITIES, STRUCTURE, MANAGEMENT AND GOALS OF THE EINHELL GROUP

2.1 General operations and business segments

Einhell Germany AG is one of the market leaders in the DIY sector and designs and distributes solutions for DIY enthusiasts and hobby gardeners for use at home, in the workshop and in the garden. Headquartered in Landau an der Isar, Bavaria, the Company is celebrating its 60th anniversary this year. It has 49 subsidiaries around the world and does business in more than 100 countries. The products are distributed via DIY stores, e-commerce and other distribution channels with high product expertise in the DIY market. Subsidiaries and selected business partners ensure the proximity to Einhell's globally operating customers. The product range includes hand-held power tools, stationary tools and accessories as well as lawn and garden care tools, irrigation and drainage solutions.

Einhell places special emphasis on further developing its cordless Power X-Changebattery-operated product range, which already includes more than 300 battery- powered DIY and gardening tools. Depending on the individual requirements, different batteries with varying capacities are available and can be used to operate any of the tools in the Power-X-Change family.

Since August 2021, Einhell has also been the "Official Home & Garden Expert" for FC Bayern Munich football club and uses its battery-powered tools to create the best possible conditions for the team in the Allianz Arena and at their training premises1. The partnership

with the record champion and two-time Triple winner underlines Einhell's ambition to take a market-leading role in the future. In order to further strengthen the international positioning of the brand, Einhell has further been the proud partner of the Mercedes-AMG PETRONAS F1 Team since January 2023. Einhell supports the team with its Power X-Change devices as its "Official Tool Expert", providing for maximum performance in the most prestigious motorsports discipline.2

In addition to superior quality, excellent customer- oriented services and outstanding value for money, the Einhell brand stands for performance, endurance, safety and cordless freedom of movement for DIY enthusiasts implementing their own projects 3 . Our overriding objective is customer satisfaction4.

The subsidiaries comprise distribution companies mainly in Europe, but also in South America, Australia and Canada, as well as trading companies in Asia. The Asian subsidiaries are also responsible for product sourcing, product processing and procurement. As production is mainly carried out in Asia, this is also where quality assurance takes place. In its global workforce, Einhell currently counts approx. 2,500 employees. Group revenue amounted to EUR 971.5 million in financial year 2023 (previous year: EUR 1,032.5 million). For the Einhell Group, revenue is always recognised at a point in time. There are no products and services for which revenue is recognised over a period of time.

The Einhell Group divides its activities into the "D/A/CH", "Western Europe", "Eastern Europe", "Overseas and Other Countries" and "Production and Sourcing Companies" segments. In line with the management approach, "Production and Sourcing Companies" was added as a new segment in the year under review. This segment contains the companies in China and Hong Kong, EINHELL Operations Kft. and the company in Vietnam. The Overseas segment was renamed to Overseas and Other Countries. The results from the previous year were regrouped in line with the new structure. The two companies in South Africa, which had previously been included in Other countries, were allocated to the Overseas and Other Countries region. Operational responsibility for the respective Central Processing Unit (CPU) lies with the Board of

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Directors of Einhell Germany AG and the Managing Directors of the subsidiaries.

2.2 Legal structure and management of the Group

1. Legal structure and changes to Group structure Einhell Germany AG, Landau an der Isar, holds direct and indirect shareholdings in a total of 49 subsidiaries, each of which is a separate legal entity. It holds 100% of the shares in subsidiaries with a centralised or special function such as services, product
   sourcing/product processing, procurement/ purchasing and quality control/quality assurance. The Group also usually holds all the shares in the global distribution companies.

In all consolidated subsidiaries where Einhell Germany AG does not hold all the shares, Einhell Germany AG has a direct or indirect majority shareholding.

With regard to the responsibilities of the Einhell Group companies, all activities that can be centralised are carried out at just one location. Product processing, the search for factories, their auditing and certification, procurement, services, controlling, financing, IT and other administrative activities, for example, are carried out centrally by the Group companies in Germany and China. This organisational structure within the Group allows all distribution companies to focus on their core functions. Einhell is also in a position to press ahead with international expansion as each distribution company has a similar structure and the business model can be efficiently rolled out in additional countries. As organic growth offers great potential, the organisation and efficient development of the Einhell Group's business model are among the management's most important responsibilities.

The Group structure changed as follows during financial year 2023:

In November 2023, Einhell Germany AG acquired a minority interest of 10% in Einhell Polska Sp. z o. o., which is now fully owned by Einhell Germany AG.

In 2023, Einhell Germany AG founded EINHELL Operations Kft. headquartered in Budapest/Hungary. The Group holds 100% of the shares in EINHELL Operations Kft.

Einhell Germany AG acquired 100% of the shares in the Vietnamese company Swisstec Sourcing Vietnam Joint Stock Company headquartered in Thu Dau Mot City, Binh Dong/Vietnam on 1 April 2023. The company is an established distributor of screws, fastening fixtures and a range of hand-held tools, whose main customers are European and Canadian DIY retail chains.

Effective on 1 June 2023, Einhell Germany AG acquired 66.67% of shares in the newly founded Thai company

Surazinsano Co., Ltd. headquartered in Samutprakarn Province/Thailand. By means of an asset deal, this new company took over the assets that are needed to successfully establish the Group on the market, such as inventories, customer and employee contracts, from a company that has already been a successful player on the Thai market for several decades.

In financial year 2023, Einhell Germany AG acquired the 49% minority interest in the South African companies Einhell South Africa (Pty) Ltd (previously: Lawn Star (Pty) Ltd) and Mould Star (Pty) Ltd, which are now wholly owned subsidiaries of the Einhell Group.

b) Management and control

Responsibility for the business activities of the Einhell Group lies with the Board of Directors of Einhell Germany AG. This comprised four members at the time of preparation of the annual financial statements, consolidated financial statements and management report. The Board of Directors manages, organises and monitors strategies and operational business processes for the whole Group. Responsibilities within the Board of Directors are allocated based on the departments assigned to the respective member.

The Chairman of the Board of Directors is responsible for sales, procurement, marketing, product management and corporate strategy.

The Chief Financial Officer is responsible for finance and accounting, tax, legal, internal audit, controlling, investor relations, human resources and maintenance.

The Chief Technical Officer is responsible for technology, product development, quality control, supply chain management and production.

The Chief IT and Digitization Officer is responsible for IT, digitalisation and services.

The Board of Directors supervises the specialists and managers in the relevant departments and relies on the corresponding hierarchy of divisional and departmental management at Einhell Germany AG, and on Managing Directors and their specialists and managers in the subsidiaries. The Board of Directors seeks to ensure flat hierarchies and makes sure to maintain direct contact with employees and specialist staff in all divisions. Regular meetings of the Board of Directors and of individual departments, as well as divisional and cross-departmental meetings when required, ensure efficient communication and information flow to all responsible parties.

The Supervisory Board of Einhell Germany AG, which consists of three members, monitors and advises the Board of Directors in accordance with legal requirements and the provisions of the German Corporate Governance Code.

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At regular meetings of the Supervisory Board, the Board of Directors provides information to the Supervisory Board about the Group's current situation, business transactions and corporate strategy.

The Supervisory Board also maintains ongoing lines of communication with the Board of Directors outside of regular meetings and ensures an adequate level of communication and informational flow between the Board of Directors and the Supervisory Board.

The composition of the Supervisory Board did not change in financial year 2023:

Supervisory Board	2023
Univ.-Prof.Dr.-Ing.Dr.-Ing.	Chairman
E.h. Dr. h.c. Dieter Spath
Philipp Thannhuber	Deputy Chairman
Maximilian Fritz	Employee
representative

1. Principles of the remuneration system for the Board of Directors
   Members of the Board of Directors receive fixed and performance-based variable remuneration with short- term and long-term components. The individual performance-based components depend on factors such as consolidated net profit, segment earnings in the previous financial year, the development of the Group's asset structure and personal targets. On 22 April 2021, the Supervisory Board adopted a new remuneration system for the Board of Directors that was approved by the Annual General Meeting on 18 June 2021. The Annual General Meeting on 23 June 2023 approved the remuneration report for 2022. The evaluation system ensures transparent and sustaina- ble accounting practices based on the Group's strategic priorities. A pre-defined cap limits the impact of extraordinary one-off effects on the variable remuneration component. Members of the Board of Directors privately hold shares in Einhell Germany AG. There are no share option programmes or similar schemes. An agreement is in place with one of the members of the Board of Directors stipulating that a proportion of the variable remuneration component must be used to purchase Einhell shares. If the employment contract is not extended after twelve years, members of the Board of Directors receive one year's salary plus the average management bonus paid over the last three years. If the employment contract is terminated before the twelve-year threshold, the proportional remuneration is calculated on a pro rata temporis basis. Commitments were made to pay a pension to the members of the Board of Directors in the form of annuity payments that can be paid out as soon as the respective Board member turns 60 or 62, respectively and the amount of which is based on the Board member's years of service. More information on

the Board remuneration is provided in the notes to the annual financial statements and the remuneration report that is available at www.einhell.com.

1. Personnel changes to the Board of Directors There were no personnel changes to the Board of Directors in financial year 2023. The distribution of responsibilities among the Board members did not change significantly.
   2.3 Corporate strategy and management

The Board of Directors embarked on a structured strategy development process together with the heads of divisions and departments to define and communicate the objectives and values of the Einhell Group.

The Einhell Group's primary objective is to generate sustainable and profitable revenue and profit growth. Profitability takes priority over pure growth targets.

a) Strategy

The Group's main strategic priority was and is the further development of the EINHELL brand. The highly successful measures commenced in recent years, like the cooperations with the Mercedes-AMG PETRONAS F1 Team or FC Bayern Munich as well as the TV campaigns in some countries will be continued in the next few years. These are important strategic cornerstones towards the goal of becoming the global market and technology leader in battery-powered garden and DIY tools. Our social media community is to become one of the largest in the DIY industry. In addition to the number of followers, we also intend to increase the engagement rate and impressions significantly.

Another focal point of our corporate strategy over the next few years will continue to be product policy. Here, our Power X-Change platform will remain on the top of our list. We intend to expand the revenue share of the Power X-Change platform to more than 70% by financial year 2027. The extension of the Power X- Change range is to be further pursued in financial year 2024, until the platform reaches approx. 450 products in 2027. We will continue to further develop our technology in this area to achieve our objective of obtaining market leadership for battery-powered systems in all the countries with Einhell branch offices.

Digital organisation will also remain another major task for the Einhell Group. We will continue to implement our central ERP strategy based on SAP S/4HANA in the coming years. In the past financial year, we started to implement our new ERP software at our subsidiary Einhell Electro Machinery Technology Co., Ltd. in Kunshan City, China. SAP S/4HANA was also introduced at EINHELL Operations Kft. in Hungary. In the next few years, SAP will also be rolled out to other

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Asian companies, followed by further subsidiaries in other countries.

For several years now, we have been working intensively on sustainability. As part of our strategy process, we have over the past few years started to gradually introduce a sustainability strategy. This strategy is to bundle ongoing and future projects, initiatives and activities and is to define clear responsibilities with quantifiable targets, measures to be derived on that basis and measurable key figures for effective sustainability management. The strategy addresses social, environmental and financial aspects in equal measures. In addition to analysing the carbon footprint of selected sites, the strategy focuses on occupational health and safety matters, social responsibility, resource efficiency and the circular economy, the use and expansion of renewable energy and CO2 reduction measures as well as compliance with our due diligence obligations along the value chain. With regard to our product range, the sustainability concept builds on the continuous expansion of our Power X-Change platform for battery-powered tools and equipment. By ensuring that all tools and batteries are compatible, more than 300 tools can now be operated with just one battery and charging station, significantly reducing the use of resources5.

We intend to expand our international distribution network by adding a company in the USA. Talks are currently underway with suitable takeover candidates with the aim of having our own distribution subsidiary in the USA in the future. The newly acquired company in Thailand is to be further integrated into the existing organisation by, as a first step, setting up an English- speaking management level to facilitate the further integration.

Following the successful start of our own battery production in Kunshan, China, we plan to commence operations at our own battery plant in Eastern Europe this year. The production target of both plants together is one million batteries from our own production in 2024.

The scope and geographic range of the Einhell sourcing activities is to be increased in the next few years to reduce our dependency on China in the field of procurement. We will establish a supplier industrial park in Vietnam with the help of our sourcing company in Vietnam and our strategic partners.

b) Management system

The internal management system of the Einhell Group is designed to support the implementation of the corporate strategy and associated long-term financial

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targets. Accordingly, the Group uses key performance indicators to measure profitable revenue and earnings growth. Profitability takes priority over pure growth targets.

The management system has not been changed compared to the previous year.

Management of the business activities of the Einhell Group is mainly based on the financial performance indicators revenue and earnings before tax (EBT). These two key figures are the most significant performance indicators of the Einhell Group.

In addition to the financial performance indicators, Einhell Germany AG and the Group companies at a local level use additional key performance indicators such as gross profit margin and the main drivers of working capital, inventories and trade receivables for management purposes. However, these indicators are subject to significant country-specific variations and should be interpreted in the context of each individual company. Inventories are analysed on an ongoing basis and monitored on the basis of stock turnover and inventory range with regard to possible impairment losses. Moreover, a sanity check is carried out on the order process for new goods, involving checking and managing product availability and stock volumes. Trade receivables are constantly monitored on the basis of maturity structures and assessed by means of standardised evaluation criteria. Receivables are usually limited by the volume of the receivables insurance and managed by means of internally set limits. Accounts receivable targets are also subject to constant monitoring and are an important management parameter for the Group's working capital.

2.4 Product processing and quality management

a) Product processing

Product processing expenses amounted to EUR 11.1 million in financial year 2023 (previous year: EUR 9.6 million). 72 employees (previous year: 65 employees) were employed in this business unit. New cost centres for quality assurance and quality management of kwb products and development of electronics were included in the expense item in the financial year under review, increasing expenses and the number of employees in financial year 2023. Product processing at Einhell is mainly sales-driven and customer-oriented. Therefore, cooperation with other departments, such as quality assurance, is important, as is communication with customers. Customer requirements are taken into account from the outset when new products and versions are

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designed. The customer is regarded as a partner. This allows the entire Einhell Group to consistently adapt to markets and made Einhell one of the fastest reacting companies in the sector6.

b) Quality management

Most of the Einhell product range is currently produced in China. Quality standards stipulated by the Einhell Group for the Chinese suppliers are determined based on customer requirements. Quality control and quality management comply with high standards. 7 The Einhell Group intends to further reduce its dependency on Chinese suppliers in the years to come and has made important steps towards this goal in financial year 2023 in the scope of its second-source strategy.

Einhell Germany AG acquired the Vietnamese company Swisstec Sourcing Vietnam JSC. The company is an established distributor of screws, fastening fixtures and a range of hand-held tools, whose main customers are European and Canadian DIY retail chains. The takeover gives Einhell access to the Vietnamese procurement market.

Further, Einhell Germany AG founded EINHELL Operations Kft. in Hungary in financial year 2023 with the main objective of producing batteries for the Power X-Change platform there.

Since high priority is given to quality checks before shipping from China, this area is constantly monitored. In addition to rigorous shipping controls on site, there are also controls in place with regard to observance of customer-specific quality requirements, inspections of ongoing production and optimisation of manufacturer processes.

Supplier quality is optimised on an ongoing basis. Dependency on individual suppliers is avoided by maintaining an adequate number of suppliers and a broad distribution of orders. In order to create additional leeway for flexible procurement options, Einhell strives to further intensify its cooperation with select suppliers by forming strategic alliances in the field of product development.

2.5 Personnel and HR services

The number of employees rose in financial year 2023 compared to the previous financial year. On average, the Einhell Group had 2,309 employees (previous year: 1,963). Revenue per employee was EUR 421 thousand (previous year: EUR 526 thousand).

In accordance with the CSR Directive Implementation Act, which went into effect in April 2017, we disclose the concepts we have pursued in the past financial

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year with regard to key non-financial matters relevant to Einhell Germany AG. The Company decided to report on these matters in a separate non-financial report, which is not included in the management report. For further information about HR and social matters, please refer to our Corporate Social Responsibility Report, which is permanently available

athttps://www.einhell.com/investor- relations/sustainability-reports/.

3. ECONOMIC REPORT

3.1 General economic conditions

Financial year 2023 was impacted by high inflation rates, weak economic growth, the ongoing war in Ukraine and the flaring up of the conflict in the Middle East.

At the same time, there were indications of the prices for commodities and freight easing. The availability of freight capacities also seemed to be improving until the Houthi militia started attacking freight liners in the Red Sea. Since then, most of the container ships have been avoiding the strait between the Gulf of Aden and the Red Sea. Alternative routes around the African continent increase transit times by about 14 days.

Consumer spending on everyday items continued to be restrained given the strong cost and price increases in financial year 2023. As a result, the DIY store sector experienced a challenging year with a general decline in unit sales. Despite the difficult environment this year for the DIY sector, Einhell was able to achieve a satisfactory result.

The following figures on the GDP, inflation rate and the unemployment rate are based on figures published by the German Federal Statistical Office, Eurostat and the Austrian Economic Chamber.

a) D/A/CH

Second only to North America/USA, the German market is one of the largest DIY markets worldwide and therefore of great significance for the Einhell Group.

About 50% of German DIY sales are generated by the large, well-known DIY chains. It is therefore important for Einhell to be listed by these chains.

Consumer reticence and spending restraint have also affected the DIY store sector in Germany. The German association of DIY retailers (BHB) states that revenues in 2023 decreased in nominal terms by 3.1% to EUR 21.2 billion year-on-year despite the increase in prices. Business was affected not only by geopolitical

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conflicts, inflation and consumer uncertainty, but also by bad weather in the spring and summer.

The German economy slipped into recession in the last year. According to calculations by the Federal Statistical Office, the price-adjusted gross domestic product (GDP) in Germany declined by 0.3% in 2023 versus the previous year. The high inflation curtailed consumer spending, which is an important pillar of economic performance.

On average, consumer prices in Germany increased by 5.9% year-on-year in 2023. The inflation rate thus remains at a high level, although it has eased slightly compared with the previous year. According to the Federal Statistical Office, food prices in particular have risen sharply.

b) Western and Eastern Europe

Given the high cost of living, the weak foreign demand and the tight monetary policy, the European economy has lost momentum in the current financial year. Even though the economy is bound to gradually recover, the gross domestic product in the European Union increased by a mere 0.5% in 2023. Growth in the eurozone was also 0.5% in 2023.

In the Eastern and Western European markets that are relevant for the Einhell Group, the economic development was as follows:

Western Europe

in %	2023	2022
Spain	2.4	5.2
France	0.8	2.6
UK	0.5	4.1
Italy	0.7	3.9

Eastern Europe

in %	2023	2022
Croatia	2.7	5.9
Poland	0.6	5.4
Romania	2.2	4.8
Czech Republic	0.2	1.9

About 12.9 million persons were out of work in the European Union in December 2023, corresponding to an unemployment rate of 5.9%. The unemployment rate of 6.4% in the eurozone was slightly higher than the level in the European Union. Spain (11.7%) and Greece (9.2%) recorded the largest job shortages.

Eurostat reported that the inflation in the European Union dropped to 3.4% in 2023, down from 10.0% in 2022. The European Central Bank is targeting a medium-term inflation rate of just under 2%.

c) Overseas and Other Countries

The Australian economy is expected to generate growth of 1.8% in 2023. It is suffering from friction with its largest trade partner China. The Chinese government imposed massive punitive customs duties on certain Australian products, while coal imports were blocked and some Australian producers encountered trade barriers.

In order to reduce their dependency on China, many Western governments are increasingly looking towards countries with more similar political systems, such as Australia. This means that Australia could be facing a new commodities boom. The country has large nickel and copper deposits with cobalt as a by-product. Moreover, the fifth continent has immense lithium deposits.

The following growth rates were achieved in Canada and in the South American countries where the Einhell Group is active in 2023.

in %	2023	2022
Argentina	-1.1	4.0
Canada	1.1	3.5
Colombia	1.4	7.6
Chile	-0.5	2.0

d) Production and Sourcing Companies

In line with the management approach, Production and Sourcing Companies was added as a new segment in the year under review. This segment contains the companies in China and Hong Kong, the new battery production company EINHELL Operations Kft. and the company in Vietnam. The Overseas segment was renamed to Overseas and Other Countries.

The results from the previous year were regrouped in line with the new structure. The two companies in South Africa, which had previously been included in Other countries, were allocated to the Overseas and Other Countries region.

3.2 Performance report

Slight revenue decrease in the Einhell Group

The Einhell Group was not able to increase its revenue compared to the previous year. Group revenue fell slightly from EUR 1,032.5 million to EUR 971.5 million in financial year 2023. The revenue development was negatively affected by currency translation effects in financial year 2023. Some currencies have depreciated significantly versus the euro. This refers primarily to the revenue of the companies in Argentina, Canada, Turkey and Australia. Adjusted for currency translation effects, Group revenue declined by approx. 2.0% year- on-year (5.9% before adjustment for these effects).

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This means that the Einhell Group was not able to meet its forecast for financial year 2023, for which the Board of Directors had stated an increase in revenue by approx. 3% to EUR 1,060 million at the beginning of 2023.

In the first quarter, the Einhell Group's revenue was significantly below the prior-year value, decreasing from EUR 292.3 million in the previous year's comparable quarter to EUR 249.9 million.

In the second quarter, revenue of EUR 276.0 million was at the prior-year level (EUR 271.4 million), meaning that Group revenue managed to catch up considerably year-on-year.

Revenue development by segment

However, as the positive performance of the second quarter failed to persist, Einhell was not able to achieve further revenue growth in the third quarter. Revenue of EUR 229.9 million was below the prior-year level (EUR 242.0 million).

In the fourth quarter, revenue showed a rather restrained performance compared to the prior-year period, decreasing from EUR 226.8 million to EUR 215.7 million.

The Einhell Group achieved a good level of revenue in financial year 2023, even though the guidance was not quite met.

The regional development of revenue in financial year

2023 breaks down as follows:

in EURk and %	2023		2022		Change
D/A/CH	373,047		38.4	403,792		39.1	-30,745		-7.6
Western Europe	186,834		19.2	187,433		18.1	-599		-0.3
Eastern Europe	102,521		10.6	91,646		8.9	10,875		11.9
Overseas and Other Countries	256,819		26.4	276,700		26.8	-19,881		-7.2
Production and Sourcing Companies	52,304		5.4	72,944		7.1	-20,640		-28.3
Total	971,525		100.0	1,032,515		100.0	-60,990		-5.9

With the exception of the Eastern European region, the Einhell Group was not able to increase revenue in financial year 2023.

Revenue development by division

On a positive note, demand for the Power X-Change products that meanwhile account for a 44% share in Group revenue (previous year: 40%) continues to be strong.

in EURk and %	2023		2022		Change
Tools	633,434		65.2	673,200		65.2	-39,766		-5.9
Garden & Leisure	338,091		34.8	359,315		34.8	-21,224		-5.9
Total	971,525		100.0	1,032,515		100.0	-60,990		-5.9

4. EARNINGS

The Einhell Group lost some of its earnings power in the year under review. In financial year 2023, the Einhell Group generated earnings before tax of EUR 75,397 thousand (previous year: EUR 87,436 thousand). The pre-tax margin is 7.8% (previous year: 8.5%). Earnings before tax and depreciation from purchase price allocations (2022 and 2023) stood at EUR 77,427 thousand.

This corresponds to a margin before taxes and PPA of 8.0%.

The PPA effects result from the purchase price allocation relating to the acquisition of Outillages King Canada Inc. and Surazinsano Co., Ltd.

The following table shows the development of earnings before tax by segment:

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in EURk	2023	2022	Change
D/A/CH	30,391	34,661	-4,270
Western Europe	9,178	11,941	-2,763
Eastern Europe	7,494	7,103	391
Overseas and Other Countries	23,380	22,063	1,317
Production and Sourcing Companies	1,098	11,006	-9,908
Reconciliation	3,856	662	3,194
EBT	75,397	87,436	-12,039

At the beginning of 2023, the Einhell Group had expected an increase in revenue to about EUR 1,060 million and a pre-tax margin of approx. 8.0% to 8.5%.

Given that the business performance clearly failed to meet expectations from July to September 2023, the Board of Directors was forced to adjust the guidance. The Einhell Group now expected revenue of EUR 1,000 million and a pre-tax margin of approx. 8.0%.

This new earnings before tax forecast with a margin of 8.0% was not reached at the end of the financial year.

The earnings development was burdened primarily by declining revenue. From the perspective of the entire Einhell Group, end consumer demand for Einhell products was good in financial year 2023, while weaker orders by DIY chains due to high inventories built up in previous years weighed on the revenue performance.

In the year under review, the home market D/A/CH was unable to match the excellent revenue level of the previous year. Demand by end customers for Einhell products was rather weak in the D/A/CH region, with the corresponding negative effect on revenue.

Current market data from Germany for 2023 again reveals that Einhell has gained further market share in the field of battery-operated tools with its Power X- Change family. In terms of units sold, Einhell is still one of the top three sellers of power tools, along with competitors Bosch and Makita. In the garden tools market, Einhell continued in 2023 to rank first in the field of cordless devices with the most units sold, ahead of Gardena and Makita.

Revenue in the Western Europe region could not be increased either in financial year 2023. Particularly in France, Italy and Spain, revenue shrank significantly since the previous year, and only the UK was able to significantly exceed the prior-year revenue. In total, earnings in the Western Europe region fell short of the previous year due to the lower revenue overall.

In the Eastern Europe region, revenue was above the prior-year level and earnings also increased slightly year-on-year. Despite the difficult economic situation within the country, Einhell Turkey was able to achieve excellent revenue and earnings levels again in the past financial year. The companies with the highest revenue in this region are Einhell Turkey, Einhell Croatia and Einhell Poland.

The fact that revenue in the Overseas and Other Countries region was lower than in the previous year is primarily attributable to currency translation effects. Einhell Australia (formerly: Ozito Industries Pty Ltd.) faced challenging market conditions in Australia which further impacted the revenue performance. The company in Canada was able to increase both revenue and earnings compared to the previous year. Both the Australian and the Canadian dollar were rather weak compared to the euro in 2023, with additional adverse effects on Group revenue. Nearly all of the companies in South America recorded declining revenue and negative earnings in 2023.

The Production and Sourcing Companies segment that includes the Asian sourcing companies was unable to make a noticeable contribution to consolidated net profit in the year under review. Revenue was clearly below the prior-yearlevels, especially due to lower revenue at the subsidiaries and the corresponding lower order volume at the sourcing companies.

Personnel expenses climbed by EUR 10,878 thousand to EUR 129,616 thousand. This is mainly due to the significant increase in the number of employees. The takeovers of Surazinsano Co., Ltd and Swisstec Sourcing Vietnam JSC took the headcount up by nearly 350 employees.

Other operating expenses increased by 8.8% year-on- year to EUR 179,795 thousand. This increase is mainly due to higher marketing expenses. The increase in marketing expenses is in line with the corporate strategy that aims to further strengthen the Einhell brand. The objective is to further expand the high market shares reached in previous years.

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The financial result deteriorated by EUR -586 thousand to EUR -5,667 thousand. The financial result mainly comprises the interest result of EUR -4.576 thousand (previous year: EUR -4,812 thousand) and the gains/losses from currency translation/currency hedging amounting to EUR -1,091 thousand (previous year: EUR -269 thousand).

Tax expenses amounted to EUR 23,836 thousand in financial year 2023 (previous year: EUR 26,636 thousand). The lower tax expense is attributable to lower earnings before taxes.

Consolidated net income after profit attributable to minority shareholders decreased from EUR 59,754 thousand to EUR 50,491 thousand in the 2023 financial year.

5. ASSETS AND FINANCIAL POSITION

The material items in the statement of financial position for the financial years 2023 and 2022 are as follows:

Assets and financial position

in EURk	2023	2022	Change
Fixed assets	128,302	113,991	14,311
Goods inventories	363,577	473,473	-109,896
Trade receivables	149,833	143,700	6,133
Cash and cash	99,445	10,662	88,783
equivalents
Equity	354,947	366,836	-11,889
Liabilities to banks	109,076	191,147	-82,071
Trade payables	154,291	116,281	38,010

Total assets decreased by EUR 32,634 thousand or 3.9% to EUR 810,069 thousand.

Investments and non-current assets
Investments	amounted to	EUR 14,063 thousand in
financial	year	2023	(previous	year:
EUR 8,801 thousand),	not	including	acquired

intangible assets and right-of-use assets from the adoption of IFRS 16. Most of the investments pertain to land and buildings in company assets, plant and office equipment and assets under construction.

The acquisition of the Vietnamese company Swisstec Sourcing Vietnam JSC led to goodwill capitalisation of EUR 2.0 million.

Several intangible assets were acquired or capitalised in connection with the asset deal to acquire the newly founded Thai company Surazinsano Co., Ltd. This refers to the customer base and brands worth EUR 6.4 million and goodwill of EUR 1.6 million at the time of acquisition.

Depreciation and amortisation amounted to EUR 16,207 thousand in 2023 (previous year: EUR 14,705 thousand). This includes depreciation of EUR 7,161 thousand (previous year: EUR 6,445 thousand) due to the application of IFRS 16.

Current assets

Inventories decreased from EUR 473,473 thousand to EUR 363,577 thousand as at the reporting date. The high inventories of the previous year were reduced significantly in financial year 2023.

Trade receivables increased to EUR 149,833 thousand on the reporting date (previous year: EUR 143,700 thousand).

Financing

The financial requirements of the Einhell Group, which also vary greatly depending on the season, are driven in particular by the level of inventories and trade receivables. Stock turnover rates of inventories and the maturities of trade receivables play a major role here and have a significant impact on the financial requirements.

The Einhell Group's funding derives, on the one hand, from the equity that was provided by its shareholders when the Company was founded and the subsequent capital increases and retained earnings that are set aside in reserves. In addition, the Einhell Group procures debt capital in the form of loans and short- term borrowings as well as, to some extent, supplier loans. Loans are predominantly denominated in EUR. Supplier loans are mainly in CNY or USD. Anticipated cash flows from the payment of supplier liabilities in foreign currencies are largely hedged with the corresponding hedge transactions.

Owing to the very healthy and solid financing structure of the Einhell Group - the Einhell Group traditionally has an excellent equity ratio that currently stands at 43.8% - the Board of Directors does not anticipate any problems with current business operations, nor does it foresee any financing problems for future business volume in connection with the further expansion of the Group.

Einhell Germany AG took out a long-term loan from a bank in the amount of EUR 7.5 million in financial year 2023. The loan is granted in connection with a subsidy programme provided by KfW (German government- owned development bank) and has a term of six years. The first repayment is due in December 2024 and the last in September 2029. The loan will be used for the new office building. Einhell will receive repayment grants totalling a maximum of EUR 0.95 million if the building achieves the planned energy efficiency standards. In this case, the repayment grants will reduce the term of the loan accordingly. The loan agreement contains a financial covenant, referring to the interest cover ratio. The interest rates are fixed and

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