HMS Bergbau : Annual Report 2020 der HMS Bergbau AG (en)

Annual Report 2020

Group Key Figures

	31/12/2020	31/12/2019
BALANCE SHEET FIGURES	EUR thousand	EUR thousand
Total assets	70,973	51,120
Non-current assets	2,977	315
Current assets	41,755	29,257
Shareholders' equity	17,605	15,300
Provisions	9,769	8,647
Liabilities	43,598	27,173

	2020	2019
INCOME STATEMENT FIGURES	EUR thousand	EUR thousand
Sales	267,082	215,423
EBITDA	5,494	2,091
Net profit*	2,810	513

* 2020 net profit of EUR 3,651,446.81 excluding EUR 841,222.36 of pension provisions (2019 pension provisions of EUR: 862,823.81)

Financial Calendar

1 January 2021	Start of the financial year
July/August 2021	Annual General Meeting
30 September 2021	Interim Report 2021
31 December 2021	End of the financial year
30 June 2022	Annual financial statements 2021

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Index

1.	Letter to Shareholders	4
2.	Report of the Supervisory Board	6
3.	Investor Relations	10
4.	Group Management Report	14
5.	Consolidated Financial Statements	38
	a. Consolidated Balance Sheet as of December 31, 2020	38
	b. Consolidated Income Statement 2020	40
	c. Consolidated Cash Flow Statement 2020	41
	d. Consolidated Statement of Changes in Shareholders' Equity 2020	42
	e. Statement of Changes in Non-Current Assetsas of December 31, 2020	44
Notes to the Consolidated Financial Statements	46
Imprint	51
Auditor's report	52

The English version of the annual report and the consolidated financial statements 2020 of HMS Bergbau AG is a one-to-one translation. The English version is not audited; in the event of variances, the German version shall take precedence over the English translation.

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Letter to Shareholders

DEAR LADIES AND GENTLEMEN,

The past 2020 financial year and the first half of 2021 were both affected by a variety of regulatory measures and restrictions due to the corona pandemic. While lockdowns, border closures and numerous reductions in economic forecasts by the IMF during the course of the year were initially responsible for sharplwy falling commodity prices, there has been a steady recovery in commodity markets since the middle of 2020. Commodity prices continued to rise unchecked during the second quarter of 2021 amid significant improvements in economic forecasts and a simultaneous sharp decline in corona infection figures. Inflation rates in some areas recorded double-digitmonth-on- month percentage increases - something that has not been seen since December 2010.

As an international commodity trader, HMS was presented with some major challenges in the commodity markets over the past several months but was still able to seize on some opportunities in the reporting year due to the internationalisation strategy we have been pursuing for years, coupled with the continual expansion of our product portfolio to include other raw materials such as ores (e.g. chrome, lithium, or manganese), cement, and fertilisers.

With a share in excess of 90 per cent, the strong trading business in Asia and Africa accounted for the majority of the volumes traded by the Group, resulting in an increase in Group sales of 24 per cent to around EUR 267 million. Despite pandemic-related restrictions, HMS Group's earnings also increased in 2020 compared to 2019. EBITDA amounted to roughly EUR 5,494 thousand, marking a significant increase compared to the previous year (EBITDA 2019: EUR 2,092 thousand).

During the pandemic, we have consistently pursued our strategy of transitioning into a vertically integrated, international commodity trading group by continuously expanding business activities along the value chain. In April 2021, for example, we agreed to take a 51 per

cent stake in Maatla Resources (Pty.) Ltd, a project company in Botswana that aims to mine and market its own coal deposits. In addition to deepening the value chain through its own raw material production of 1.2 million tonnes of coal per year, HMS Bergbau AG also secured global marketing rights.

At the same time, we also forged ahead with the business and project development of our subsidiary Silesian Coal International Group of Companies S.A. After obtaining the final mining license, the aim is to produce around 1.5 million tonnes annually of coking coal, which the Eu- ropean Union defined as a critical raw material back in 2014. A bond in the amount of EUR 8 million was also placed within the scope of a private placement. The cash proceeds from this placement are to be invested primarily in operating activities, as well as in existing and new project developments.

An important consideration for HMS Bergbau AG, next to its operating activities, is environmental protection. The Group's commitment to sustainable and responsible actions during the past 2020 financial year was demonstrated, among others, by the HMS Group's continued offsetting of its total administrative and internal CO2 emissions by investing in international climate protection projects that sustainably and verifiably reduce greenhouse gases. HMS Berg- bau AG has also been certified as a CO2-neutral company since 2020.

HMS Bergbau AG demonstrated overall its ability to further expand the tonnage traded despite intense price competition thanks to its international positioning. Consequently, the HMS Group considers itself well positioned in favourably developing energy markets with steadily increasing global energy consumption. China, Indonesia and India will continue to be significant consumers of coal. Coal tends to offer these developing countries flexible power production and supply, without which less prosperity and economic growth could be re-

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alised. Here, too, HMS Bergbau AG believes it is well-positioned due to its local presence in these countries and long-established trading relationships.

Based on the aforementioned developments, the management of HMS Bergbau AG assesses the medium-term prospects as promising. Due to its international positioning and steadily growing range of services, the Group is poised to continue to generate ever-better results and higher sales volumes in the future. In its operating activities, HMS Bergbau AG takes into consideration the goals of the Paris Climate Agreement, but also plans to continue to make an active contribution to climate protection by supporting international climate protection projects.

DENNIS SCHWINDT

CHIEF EXECUTIVE OFFICER

Dennis Schwindt is Chief Executive Officer of HMS Berg- bau AG. Mr Schwindt holds a degree in economics from the Humboldt University in Berlin and has been managing several operating projects at HMS Bergbau AG as the Company's authorised representative and in the area of commodity trading since 2012. He gained extensive experience in the oil and gas industry and in plant engineering in his previous positions at both medium-sized German companies and international groups.

JENS MOIR

CHIEF FINANCIAL OFFICER

Jens Moir is Chief Financial Officer of HMS Bergbau AG. Mr Moir has more than 20 years of hands-on experience as a CFO and financial executive in international steel con- struction, oil and gas, renewable energy and entertainment companies. In his latest role, he oversaw various technology start-ups. Mr Moir is a British and German national with international experience in Germany, Poland, Austria and the USA.

In the year 2021, HMS Bergbau plans to achieve sales of approximately EUR 250 million. Based on a targeted gross margin of approximately 4 per cent, this level of sales should yield a positive EBITDA of approximately EUR 3 million.

Berlin, June 2021

DENNIS SCHWINDT	JENS MOIR
Chief Executive Officer	Chief Financial Officer

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