Einhell Germany : Quarterly report 1st Quarter 2023,

REPORT
31 March	2023

THE

Quarterly notification as of 31 March 2023

Contents

At a glance

Financial figures

Revenue, earnings, financial position

Revenue

Earnings

Financial position

Performance by region

Current strategic developments Events after reporting date Outlook

Consolidated statement of financial position Consolidated income statement Consolidated statement of cash flows Segment reporting

Financial calendar and legal company information

At a glance

The Einhell Group generated revenues of EUR 249.9 million in the first quarter of 2023 (previous year: EUR 292.3 million). As expected, this represents a decline in revenue compared to the previous year. However, it also means that Einhell achieved the second best first quarter in the history of the company. The strong business performance and the reduction in inventories lead to a significantly improved cash flow and a sizeable reduction of the liabilities to banks of EUR 107.8 million. In the previous year 2022, the first quarter had been exceptionally strong, which will not be repeated as customers placed unusually high orders due to the uncertainties caused by the Ukraine war.

Earnings before taxes (EBT) and PPA amount to EUR 20.6 million (after PPA: EUR 20.3 million). This corresponds to a margin before taxes and PPA of 8.2% (after PPA: 8.1%). The PPA effects result from the purchase price allocation relating to the acquisition of King Canada.

Financial figures

in EUR million	Q1/2023	Q1/2022	Change
in %
Revenue	249.9	292.3	-14.5
EBT	20.3	24.6	-17.5
EBT before PPA	20.6	24.9	-17.3
EBIT	22.7	25.6	-11.3
Net debt (bank	182.8	298.6	-38.8
deposits/bank liabilities)

Equity ratio in %

Earnings per share in EUR

Q1/2023		Q1/2022	Change
	in %
46.4	37.4	24.1
3.7	4.6	-19.6

Headcount

1,994

1,948

2.4

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Quarterly notification as of 31 March 2023

Revenue, earnings and financial position

Revenue

As expected, revenue of EUR 249.9 million was below the previous year in the first quarter of 2023. Due to the continuing uncertainties in 2022, inventories were built up at customers/DIY stores to ensure their ability to deliver. Due to the high inventory levels at Einhell's customers and the purchasing restraint of end consumers, order activity was not very dynamic in the first quarter of 2023.

Earnings

From January to March 2023, the Einhell Group generated earnings before taxes of EUR 20.3 million (previous year: EUR 24.6 million). The pre-tax margin is 8.1% (previous year: 8.4%). Adjusted for the effects of the King Canada PPA, the margin amounts to 8.2%.

Consolidated net income after minority interest amounts to EUR 13.9 million in the period under review (previous year: EUR 17.5 million), while earnings per share amount to EUR 3.7 (previous year: EUR 4.6 per share).

Personnel expenses rose from EUR 28.3 million to EUR 31.4 million compared to the previous year. This is mainly due to the rise in headcount.

Depreciation and amortisation increased in the first quarter 2023 to EUR 3.8 million (previous year: EUR 3.3 million) as substantial capital was expended for property, plant and equipment and right-of-use assets in recent years.

Other expenses decreased from EUR 41.4 million to EUR 39.1 million. They mainly comprise costs for warehousing of EUR 5.4 million, outbound freight of EUR 8.2 million and advertising of EUR 10.3 million.

The financial result of EUR -2.4 million (previous year: EUR -1.0 million) is lower than in the previous year.

Financial position

The material items in the statement of financial position as at 31 March 2023 and 31 March 2022 are as follows:

in EUR million	Q1 2023	Q1 2022
Non-current assets incl.	139.1	160.6
deferred tax assets
Inventories	414.9	481.8
Trade receivables	183.0	226.6
Cash and cash equivalents	15.7	7.8
Equity	378.1	365.4
Liabilities to banks	198.5	306.4

In the period under review, the Einhell Group's CAPEX amounts to EUR 3.9 million (previous year without King Canada: EUR 1.6 million). The majority of this was spent on operating and office equipment. Non- current assets include right-of-use assets for property, plant and equipment under rental and lease contracts in the amount of EUR 16.3 million (previous year: EUR 20.5 million).

Goods inventories are down significantly on the previous year to EUR 414.9 million (previous year: EUR 481.8 million). After stock levels were increased during the Corona period to ensure delivery, inventory reductions are now being implemented as planned after the supply chain management returned back to normal in the course of the year.

Trade receivables are shown after deduction of impairment for expected credit losses. Given lower revenue, trade receivables dropped by EUR -43.6 million year-on-year to EUR 183.0 million in the period under review (previous year: EUR 226.6 million).

Cash and cash equivalents amount to EUR 15.7 million as at the reporting date (previous year: EUR 7.8 million). Compared to the previous year, liabilities to banks decreased by EUR 107.8 million from EUR 306.4 million

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Quarterly notification as of 31 March 2023

to EUR 198.5 million, including promissory note loans amounting to EUR 75 million that were issued in December 2021. The strong business performance in financial year 2022 and the reduction in working capital meant that net debt was significantly reduced in the first quarter of 2023 compared to 31 March 2022.

Performance by region

The slight decline in revenue in the first quarter of

2023 breaks down by region as follows:

in EUR million	Q1 2023	Q1 2022
D/A/CH	99.9	131.7
Western Europe	49.4	52.8
Eastern Europe	24.1	23.4
Overseas	64.9	63.6
Other countries	11.6	20.8
Einhell Group	249.9	292.3

Earnings before taxes (EBT) amount to EUR 20.3 million (previous year: EUR 24.6 million). The development in the individual regions was as follows:

in EUR million	Q1 2023	Q1 2022
D/A/CH	8.9	16.4
Western Europe	1.8	2.4
Eastern Europe	1.5	2.7
Overseas	6.0	6.1
Other countries	1.3	2.8
Reconciliation	0.8	-5.8
Einhell Group	20.3	24.6

D/A/CH

In the	D/A/CH	region, revenue	was	down
EUR 31.8 million	to EUR 99.9 million	in	the	first
quarter	of the financial year 2023.	Due	to	high

inventories, customers were more cautious with regard to placing orders in the first quarter of 2023.

Based on lower revenues in the D/A/CH region in the first quarter of 2023, earnings before taxes were down by EUR 7.5 million.

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Quarterly notification as of 31 March 2023

Western Europe

In Western Europe,	revenue amounts	to
EUR 49.4 million, which is	only slightly below	the

prior-year level. The companies with the highest revenue in the Western Europe region continued to be Einhell France with EUR 17.1 million and Einhell Italy with EUR 10.5 million.

EBT decreased by EUR 0.6 million to EUR 1.8 million in Western Europe.

High inventory levels with the associated logistics and financing costs had a particularly pronounced effect in the UK.

Eastern Europe

Revenue in the Eastern Europe region increased slightly by EUR 0.7 million. The companies with the highest revenue in the Eastern Europe region were Einhell Croatia and Einhell Turkey.

EBT declined in Eastern Europe. This was due to high inflation and the related increase in prices. In addition, higher financing costs due to the increase in interest rates were felt here.

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