Frequentis : Half-year Financial Report 2022 | 17.08.2022

FOR A SAFER WORLD

Half-year Financial Report 2022

Key figures Frequentis Group

All figures in EUR million, except where otherwise stated.

Earnings	H1 2022	H1 2021	+/- in %	+/-	2021
in EUR million
Revenues	167.3	144.6	+15.7%	+22.7	333.5
EBITDA	8.4	12.4	-31.9%	-4.0	46.5
EBITDA margin	5.1%	8.6%	-3.5 pp	-	13.9%
EBIT	-0.5	5.4	-	-5.9	29.0
EBIT margin	-0.3%	3.7%	-0.3 pp	-	8.7%
Profit/loss for the period	-0.3	4.1	-	-4.4	20.8
Earnings per share in EUR	-0.03	0.28	-	-	1.50
Orders	H1 2022	H1 2021	+/- in %	+/-	2021
in EUR million
Order intake	161.2	157.1	+2.6%	+4.1	333.2
Orders on hand at end of period	498.1	453.0	+10.0%	+45.1	467.9

Statement of financial position

30 June	30 June 2021	+/- in %	+/-	2021
2022	in EUR million

Total assets	318.5	290.4	+9.7%	+28.2	315.7
Shareholders' equity	129.8	115.1	+12.8%	+14.7	129.9
Equity ratio	40.7%	39.6%	+1.1 pp	-	41.1%
Net cash	84.5	77.2	+9.5%	+7.3	101.1
No. of employees (average, in FTE)1)	2,021	2,077	+9.2%	-	1,937
Cash flow statement	H1 2022	H1 2021	+/- in %	+/-	2021
in EUR million
Cash flow from operating activities	-3.3	2.9	-	-6.2	48.8
Cash flow from investing activities	-4.2	-9.4	-55.2%	-5.2	-24.6
Cash flow from financing activities	-12.3	-7.0	-75.4%	-5.3	-12.6
Cash and cash equivalents at end of period	84.7	78.2	+8.3%	+6.5	103.8

Note: Minimal arithmetical differences may arise from the application of commercial rounding to individual items and percentages.

1. Number of employees reported as average full-time equivalents (FTE); figures for 2021 restated.

Frequentis Group
Half-Year Financial Report 2022	Preface	3

Preface

Ladies and gentlemen,

In the first six months of 2022, our operating business was hardly influenced by the COVID-19 pandemic. Thanks to the stable Frequentis business model as a provider of communication and information systems for control centres in the safety-critical sector, demand remains high, as shown by the increase in order intake. The rise in order intake and revenues was partly due to the companies acquired from L3Harris Technologies in 2021 and the acquisition of the Italian company Regola in January 2022.

Highlights

Despite the global economic disruption resulting from the war in Ukraine, we continued to grow. On this basis, we are satisfied with our performance in the first six months of 2022:

• Order intake increased by 2.6% to EUR 161.2 million (H1 2021: EUR 157.1 million)
• Orders on hand were 10.0% higher at EUR 498.1 million as at June 2022 (June 2021: EUR 453.0 million).
• Revenues rose by 15.7% to EUR 167.3 million (H1 2021: EUR 144.6 million)
• EBITDA was EUR 8.4 million (H1 2021: EUR 12.4 million)
• EBIT was EUR -0.5 million (H1 2021: EUR 5.4 million)
• The Group made a loss of EUR 0.3 million (H1 2021: profit of EUR 4.1 million)
• The equity ratio was 40.7% (June 2021: 39.6%)
• Net cash was EUR 84.5 million (June 2021: EUR 77.2 million)

Continued growth

Order intake increased further to EUR 161.2 million with orders coming from around the world. Orders on hand now amount to half a billion euros. The increase was due to our product portfolio on the one hand, and our customers' trust on the other. Revenues posted double-digit growth of 15.7% to EUR 167.3 million, thanks to organic growth, which was at 4.3%, and also to our acquisitions.

Overall, the seasonality commonly seen in previous years - with the exception of the first half of

2021 - was visible again. The seasonal pattern is due the customer structure and the nature of the project business: order intake and project acceptances are normally highest at the end of the year, which generally leads to a negative half-year result. EBIT was EUR -0.5 million and the Group made a loss for the period of EUR 0.3 million.

Our financials remain solid. The equity ratio was 40.7% as at June 2022, above the level at the end of June 2021. The net cash position was EUR 84.5 million and we reduced our borrowing to a minimum.

At the Annual General Meeting, our shareholders passed a resolution to increase the dividend by one third to EUR 0.20 per share. The dividend was paid in June.

				Frequentis Group
4		Preface		Half-Year Financial Report 2022

Acquisition in Italy

At the start of 2022, Frequentis continued its growth strategy in the Public Safety domain by acquiring a 51% interest in the Italian company Regola. Regola offers innovative software solutions such as an integrated control room solution to improve the emergency response of public safety teams. The command and control (CAD) solutions from Regola complement the Frequentis portfolio in the area of public safety and adjacent markets. The aim is to step up international marketing.

Six acquisitions have been made since Frequentis' IPO in May 2019. The Frequentis strategy includes searching proactively for attractive M&A opportunities to extend its product portfolio or gain access to new markets.

Forecast for 2022

In addition to the unforeseeable development of the pandemic, Frequentis faces further uncertainties in 2022. These include the macro-economic situation, inflation, and the development of prices and the availability of raw materials, electronic components, and energy as a consequence of geopolitical crises. It is not possible to make a reliable estimate of the exact effects on costs (e.g. travel expenses, pay rises), revenues (e.g. due to the deferral of project acceptances), supply chains, the budgets available to customers, and the potential postponement of investments.

The present tension in south-east Asia could cause further disruption on the global IT hardware market. In the project business, Frequentis has always had to address extensive challenges and dynamic changes in external influences and adapts constantly to the relevant conditions. The wide range of uncertainties and the resulting interdependencies make that more difficult at present.

Depending on the aspects outlined above, Frequentis aims to increase revenues and order intake in 2022 compared with 2021. Some of the increase will be attributable to the M&A transactions that have been undertaken because in 2022 the entities acquired will make a contribution to revenues and order intake from the beginning of the year. Around EUR 7 million has been earmarked for investment (capex).

Frequentis expects to report an EBIT margin of around 6-8% in 2022 - depending on the points outlined above and any outstanding post-merger integration costs.

Vienna, 16 August 2022

Best regards,

Norbert Haslacher	Peter Skerlan	Hermann Mattanovich
Chairman	Member	Member
of the Executive Board	of the Executive Board	of the Executive Board

Frequentis Group
Half-Year Financial Report 2022	The share	5

The share

Analysts

In addition to BankM (Roger Becker, Daniel Großjohann) and Raiffeisen Bank International (Teresa Schinwald), ODDO-BHF now regularly writes analyses and notes on Frequentis. That means that Frequentis is now covered by three banks. ODDO-BHF initiated coverage of the company in July 2022; the analysts are Nicolas Thorez and Amira Manai.

Dividend

The Annual General Meeting on 2 June 2022 passed a resolution to increase the dividend by one third to EUR 0.20 per share for the 2021 financial year (2020 financial year: EUR 0.15 per share). As a result, almost EUR 2.7 million was paid out, giving a dividend yield of 0.75% based on the closing price on the Vienna Stock Exchange at end-December 2021 (2020: 0.83%).

The Frequentis dividend policy is to pay out around 20-30% of adjusted profit of the Frequentis Group, after tax - bearing in mind the annual ceiling of 40% of the net profit of Frequentis AG reported in the individual financial statements of Frequentis AG prepared in compliance with the Austrian Commercial Code (UGB).

Treasury shares

The company had 15,500 treasury shares as at 31 December 2021. Following the transfer of 6,590 shares to the Chairman of the Executive Board in May 2022 as settlement for the long-term incentive plan 2019 (LITP 2019), at the end of June 2022 the company held 8,910 treasury shares. That was 0.0671% of the share capital.