Lloyd Fonds : Warburg Research - 13. November 2020

Lloyd Fonds

(Scale All Share, Financial Services, L1OA GR)

RESEARCH

Buy
EUR 8.20	(EUR 6.50)
Price	EUR 6.10
Upside	34.4 %

Value Indicators:

EUR

Warburg ESG Risk Score:

1.4

Description:

ESG Score (MSCI based):

3.0

DCF:

8.18

Asset and wealth management

Balance Sheet Score:

1.3

company

Market Liquidity Score:

0.0

Market Snapshot:

EUR m

Shareholders:

Key Figures (WRe):

2020e

Freefloat

51.0 %

Market cap:

80.92

Beta:

1.7

No. of shares (m):

13.27

Achim Plate

9.0 %

Price / Book:

1.9 x

EV:

77.84

LAC

7.0 %

Equity Ratio:

39 %

Freefloat MC:

41.27

DEWB AG

23.0 %

Ø Trad. Vol. (30d):

110.81 th

SPSW investors

11.0 %

Strong recovery raises the prospects of performance fees; PT up

Lloyd Fonds has announced that the FY20 target for assets under management (AuM) of EUR 1.4bn has already been reached. Comparing these figures to the end of 2019, this implies a run-rate of EUR 350m ytd, despite COVID-19 and the market collapse in March and April.

Overall, the company clearly benefited disproportionately from the strong market recovery throughout the past months. The segment LLOYD FONDS contributed strongly to the AuM growth. The performance of the fund European Hidden Champion, in particular, resulted in a high net inflow of assets, amounting to more than EUR 93m most recently. Furthermore, the company won a mandate from a Scandinavian institutional investor, showing the quality of the investment process.

The artificial intelligence-based investment segment LAIC also got off to a strong start. While the contribution to AuM of more than EUR 30m still appears low at first sight, the product range that has been established is promising. Five digitally-managed mutual funds were set up. The individual digital wealth management based on the LAIC investment process is up and running. A digital pension scheme was also launched. Furthermore, the company entered various sales cooperation agreements, which include cooperative banks and insurers (Helvetia and Condor). Overall, this should clearly help to drive AuM in LAIC products and, combined with proof of concept, should develop this segment into one of the main pillars of the company.

Assessment: Lloyd Fonds obviously benefited from a strong market recovery. Besides the increase in AuM which is now also reflected in our updated model, this revives hope for a potential performance fee by year. This would presumably result in additional revenues without additional costs and should therefore lift EBIT and net income margins for the current year. For example, the unit price for the largest fund WHC Global Discovery stood at EUR 109.55 at the beginning of the year, whereas the high-water mark should thus lie in the area of roughly EUR 114. It is now at roughly EUR 118, which would result in a performance fee for the company. Therefore, despite the uncertainty of the overall market development for the remainder of the year, our updated estimates include performance fees of EUR 4.5m. Furthermore, our assumptions for AuM development were lifted, resulting in a new PT of EUR 8.20. Buy rating confirmed.

	Changes in Estimates:														Comment on Changes:
			+ / -		2021e	+ / -		2022e			+ / - Assumptions for AuM development raised
	FY End: 31.12.		2020e
	in EUR m		(old)				(old)				(old)					For 2020, our updated estimates include performance fees of EUR 4.5m,
																	leading to overall profitability for the current year
	Sales		14.89	57.1 %		21.84	32.4 %		32.67		7.9 %
	EBIT		-5.24	n.m.		2.80	104.8 %		7.78	30.5 %
	EPS		-0.31	n.m.		0.05	300.0 %		0.42	28.6 %
								FY End: 31.12.		CAGR
								in EUR m		(19-22e)			2016	2017	2018	2019	2020e	2021e	2022e
								Sales			62.4 %			9.46	7.46	7.92	8.22	23.39	28.91	35.24
								Change Sales yoy					-17.2 %	-21.2 %	6.2 %	3.9 %	184.5 %	23.6 %	21.9 %
								Gross profit margin					89.0 %	93.5 %	93.4 %	94.8 %	90.0 %	90.0 %	90.0 %
								EBITDA			-			0.85	-1.14	-2.20	-10.54	5.85	9.54	13.75
								Margin						9.0 %	-15.3 %	-27.8 %	-128.2 %	25.0 %	33.0 %	39.0 %
								EBIT					-			0.36	-1.62	-2.31	-11.80	2.29	5.72	10.15
								Margin						3.8 %	-21.7 %	-29.2 %	-143.5 %	9.8 %	19.8 %	28.8 %
								Net income			-			3.18	1.36	-1.53	-0.09	3.39	2.68	7.18
								EPS					-			0.35	0.15	-0.16	-0.01	0.26	0.20	0.54
								EPS adj.			-			0.35	0.15	-0.16	-0.01	0.26	0.20	0.54
								DPS					-			0.00	0.00	0.00	0.00	0.00	0.00	0.00
					Dividend Yield							n.a.	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
	Rel. Performance vs Scale All
	1 month:		18.3 %			FCFPS						0.23	0.37	-0.23	-0.26	1.07	-0.23	0.22
			EV / Sales							1.0 x	2.4 x	3.8 x	9.0 x	3.3 x	3.1 x	2.8 x
	6 months:		46.2 %
				EV / EBITDA						10.6 x	n.a.	n.a.	n.a.	13.3 x	9.5 x	7.2 x
	Year to date:		5.7 %
				EV / EBIT						25.3 x	n.a.	n.a.	n.a.	33.9 x	15.8 x	9.7 x
	Trailing 12 months:		6.3 %			P / E									6.8 x	20.4 x	n.a.	n.a.	23.5 x	30.5 x	11.3 x
								P / E adj.							6.8 x	20.4 x	n.a.	n.a.	23.5 x	30.5 x	11.3 x
	Company events:						Net Debt						-12.72	-10.23	-11.49	6.13	-3.09	9.58	17.41
								ROE						16.9 %	7.2 %	-7.8 %	-0.3 %	8.5 %	6.2 %	15.0 %
								ROCE (NOPAT)						5.5 %	n.a.	n.a.	n.a.	n.a.	8.1 %	11.0 %
								Guidance:		n.a.
Analyst
Marius Fuhrberg					COM M ENT		Published 13.11.2020 08:15		1
[e-mail]
[phone]

Lloyd Fonds

RESEARCH

Sales development	EBIT development
in EUR m	in EUR m

Source: Warburg Research	Source: Warburg Research

Company Background

• Lloyd Fonds AG is an independent investment management company that offers active mutual funds management, individual fund portfolio solutions, and digital wealth management
• Lloyd Fonds AG manages mutual funds with different risk-return profiles. Current AuM, including SPSW Capital and Lange Assets & Consulting, amounts to more than EUR 1bn
• To ensure AuM growth, the company aquired established players SPSW Capital GmbH and Lange Assets & Consulting GmbH in 2018 and 2019
• Customers are private and institutional investors

Competitive Quality

• Lloyd Fonds AG positions itself as an independent asset manager that is not bound by corporate guidelines as opposed to peers which are subsidiaries of larger corporations
• The company combines active and digital asset management to offer customised solutions
• The mutual funds of SPSW Capital have received several awards including awards from Euro, Börse Online, Scope and a five-star rating from Morningstar
• Rather than a generic digital solution, as offered by many robo advisors, LF-System offers customised individual fund investment portfolios

AuM development LF-Linie	AuM development LF-System	AuM development LF-Vermögen
in EUR m	in EUR m	in EUR m

Source: Warburg Research	Source: Warburg Research	Source: Warburg Research
	COM M ENT		Published 13.11.2020		2

Lloyd Fonds

RESEARCH

DCF model

	Detailed forecast period					Transitional period					Term. Value
Figures in EUR m	2020e	2021e	2022e	2023e	2024e	2025e	2026e	2027e	2028e	2029e	2030e	2031e	2032e
Sales	23.39	28.91	35.24	41.45	47.83	54.58	60.58	66.03	69.33	71.07	72.49	73.94	75.42
Sales change	184.5 %	23.6 %	21.9 %	17.6 %	15.4 % 14.1 % 11.0 %	9.0 %	5.0 %	2.5 %	2.0 %	2.0 %	2.0 %	2.0 %
EBIT	2.29	5.72	10.15	14.01	16.64	19.10	21.20	23.11	24.27	24.87	25.37	25.88	26.40
EBIT-margin	9.8 %	19.8 %	28.8 %	33.8 %	34.8 % 35.0 % 35.0 %	35.0 % 35.0 % 35.0 %	35.0 %	35.0 %	35.0 %
Tax rate (EBT)	30.0 %	30.0 %	30.0 %	33.0 %	33.0 % 33.0 % 33.0 %	33.0 % 33.0 % 33.0 %	33.0 %	33.0 %	33.0 %
NOPAT	1.60	4.01	7.11	9.39	11.15	12.80	14.21	15.48	16.26	16.66	17.00	17.34	17.68
Depreciation	3.56	3.82	3.59	1.87	1.91	1.64	1.21	0.66	0.69	0.71	0.72	0.74	0.75
in % of Sales	15.2 %	13.2 %	10.2 %	4.5 %	4.0 %	3.0 %	2.0 %	1.0 %	1.0 %	1.0 %	1.0 %	1.0 %	1.0 %
Changes in provisions	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
Change in Liquidity from
- Working Capital	-7.71	9.10	7.30	2.14	3.19	4.45	2.73	0.66	0.03	0.02	0.01	0.01	0.01
- Capex	0.50	0.50	0.50	0.41	0.48	0.55	0.61	0.66	0.69	0.71	0.72	0.74	0.75
Capex in % of Sales	2.1 %	1.7 %	1.4 %	1.0 %	1.0 %	1.0 %	1.0 %	1.0 %	1.0 %	1.0 %	1.0 %	1.0 %	1.0 %
Other	4.94	9.56	10.80	10.19	2.47	2.98	3.55	0.00	0.00	0.00	0.00	0.00	0.00
Free Cash Flow (WACC	7.43	-11.34	-7.90	-1.49	6.93	6.47	8.53	14.82	16.23	16.65	16.98	17.32	17.67	18
Model)
PV of FCF	7.43	-10.32	-6.54	-1.13	4.75	4.04	4.84	7.66	7.63	7.13	6.62	6.14	5.70	74
share of PVs		-8.01 %						45.37 %					62.64 %

Model parameter

Derivation of WACC:			Derivation of Beta:
Debt ratio	11.00 %		Financial Strength	1.50
Cost of debt (after tax)	2.1 %		Liquidity (share)	1.50
Market return	7.00 %		Cyclicality	2.00
Risk free rate	1.50 %		Transparency	1.70
			Others	1.80
WACC	9.89 %		Beta	1.70

Valuation (m)

Present values 2032e	44
Terminal Value	74
Financial liabilities	15
Pension liabilities	0
Hybrid capital	0
Minority interest	3
Market val. of investments	0
Liquidity	9		No. of shares (m)	13.3
Equity Value	108		Value per share (EUR)	8.18

Sensitivity Value per Share (EUR)

		Terminal Growth								Delta EBIT-margin
Beta	WACC	1.25 %	1.50 %	1.75 % 2.00 % 2.25 % 2.50 %	2.75 %	Beta	WACC	-1.5 pp	-1.0 pp	-0.5 pp	+0.0 pp	+0.5 pp	+1.0 pp	+1.5 pp
1.90	10.9 %	6.42	6.53	6.65	6.77	6.89	7.03	7.17	1.90	10.9 %	6.30	6.45	6.61	6.77	6.92	7.08	7.24
1.80	10.4 %	7.02	7.15	7.28	7.43	7.58	7.74	7.91	1.80	10.4 %	6.93	7.09	7.26	7.43	7.59	7.76	7.93
1.75	10.1 %	7.35	7.49	7.63	7.79	7.95	8.13	8.32	1.75	10.1 %	7.27	7.44	7.62	7.79	7.96	8.13	8.31
1.70	9.9 %	7.69	7.84	8.00	8.18	8.36	8.55	8.76	1.70	9.9 %	7.64	7.82	8.00	8.18	8.35	8.53	8.71
1.65	9.6 %	8.06	8.23	8.40	8.59	8.79	9.00	9.23	1.65	9.6 %	8.04	8.22	8.41	8.59	8.77	8.96	9.14
1.60	9.4 %	8.46	8.64	8.83	9.03	9.25	9.49	9.74	1.60	9.4 %	8.46	8.65	8.84	9.03	9.22	9.42	9.61
1.50	8.9 %	9.33	9.54	9.78	10.02	10.29	10.58	10.89	1.50	8.9 %	9.41	9.61	9.82	10.02	10.23	10.44	10.64

• The cash outflows for the acquisition of Lange and SPSW are reflected in the line "Other"
• #BEZUG!
• Margins look set to expand as a result of the highly scalable business model
• Increased sales growth in 2022e due to lower basis in 2021 as legacy business expires largely in 2020e

COM M ENT	Published 13.11.2020	3

Lloyd Fonds

RESEARCH

Valuation

	2016	2017	2018	2019	2020e	2021e	2022e
Price / Book	1.1 x	1.5 x	2.0 x	1.8 x	1.9 x	1.8 x	1.6 x
Book value per share ex intangibles	2.08	2.02	2.11	-1.47	-0.95	-0.46	0.34
EV / Sales	1.0 x	2.4 x	3.8 x	9.0 x	3.3 x	3.1 x	2.8 x
EV / EBITDA	10.6 x	n.a.	n.a.	n.a.	13.3 x	9.5 x	7.2 x
EV / EBIT	25.3 x	n.a.	n.a.	n.a.	33.9 x	15.8 x	9.7 x
EV / EBIT adj.*	25.3 x	n.a.	n.a.	n.a.	33.9 x	15.8 x	9.7 x
P / FCF	10.3 x	8.4 x	n.a.	n.a.	5.7 x	n.a.	27.2 x
P / E	6.8 x	20.4 x	n.a.	n.a.	23.5 x	30.5 x	11.3 x
P / E adj.*	6.8 x	20.4 x	n.a.	n.a.	23.5 x	30.5 x	11.3 x
Dividend Yield	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
FCF Potential Yield (on market EV)	9.6 %	-5.5 %	-9.2 %	-7.5 %	13.9 %	9.3 %	10.9 %
*Adjustments made for: -

Company Specific Items

	2016	2017	2018	2019	2020e	2021e	2022e
AuM development LF-Linie	n.a.	n.a.	n.a.	0.00	0.00	0.00	0.00
AuM development LF-System	n.a.	n.a.	n.a.	0.00	0.00	0.00	0.00
AuM development LF-Vermögen	n.a.	n.a.	n.a.	0.00	0.00	0.00	0.00

COM M ENT	Published 13.11.2020	4

Lloyd Fonds

RESEARCH

Consolidated profit & loss

In EUR m	2016	2017	2018	2019	2020e	2021e	2022e
Sales	9.46	7.46	7.92	8.22	23.39	28.91	35.24
Change Sales yoy	-17.2 %	-21.2 %	6.2 %	3.9 %	184.5 %	23.6 %	21.9 %
Increase / decrease in inventory	0.00	0.00	0.00	0.00	0.00	0.00	0.00
Own work capitalised	0.00	0.00	0.00	0.00	0.00	0.00	0.00
Total Sales	9.46	7.46	7.92	8.22	23.39	28.91	35.24
Material expenses	1.04	0.48	0.52	0.43	2.34	2.89	3.52
Gross profit	8.42	6.97	7.40	7.80	21.06	26.02	31.72
Gross profit margin	89.0 %	93.5 %	93.4 %	94.8 %	90.0 %	90.0 %	90.0 %
Personnel expenses	4.30	4.77	4.35	8.73	8.19	9.25	10.22
Other operating income	0.00	0.00	0.00	0.00	0.00	0.00	0.00
Other operating expenses	3.27	3.35	5.25	9.60	7.02	7.23	7.75
Unfrequent items	0.00	0.00	0.00	0.00	0.00	0.00	0.00
EBITDA	0.85	-1.14	-2.20	-10.54	5.85	9.54	13.75
Margin	9.0 %	-15.3 %	-27.8 %	-128.2 %	25.0 %	33.0 %	39.0 %
Depreciation of fixed assets	0.11	0.08	0.10	0.91	0.05	0.06	0.07
EBITA	0.75	-1.22	-2.30	-11.45	5.80	9.48	13.67
Amortisation of intangible assets	0.39	0.40	0.01	0.35	3.51	3.76	3.52
Goodwill amortisation	0.00	0.00	0.00	0.00	0.00	0.00	0.00
EBIT	0.36	-1.62	-2.31	-11.80	2.29	5.72	10.15
Margin	3.8 %	-21.7 %	-29.2 %	-143.5 %	9.8 %	19.8 %	28.8 %
EBIT adj.	0.36	-1.62	-2.31	-11.80	2.29	5.72	10.15
Interest income	2.69	1.43	1.10	7.18	0.10	0.10	0.10
Interest expenses	0.33	0.74	0.31	1.32	4.00	2.00	0.00
Other financial income (loss)	0.44	2.13	0.53	0.86	0.00	0.00	0.00
EBT	3.16	1.20	-0.99	-5.07	-1.61	3.82	10.25
Margin	33.4 %	16.1 %	-12.5 %	-61.7 %	-6.9 %	13.2 %	29.1 %
Total taxes	-0.01	-0.16	0.55	-4.98	-5.00	1.15	3.08
Net income from continuing operations	3.18	1.36	-1.53	-0.09	3.39	2.68	7.18
Income from discontinued operations (net of tax)	0.00	0.00	0.00	0.00	0.00	0.00	0.00
Net income before minorities	3.18	1.36	-1.53	-0.09	3.39	2.68	7.18
Minority interest	0.00	0.00	0.00	0.00	0.00	0.00	0.00
Net income	3.18	1.36	-1.53	-0.09	3.39	2.68	7.18
Margin	33.6 %	18.2 %	-19.4 %	-1.1 %	14.5 %	9.3 %	20.4 %
Number of shares, average	9.16	9.16	9.63	13.27	13.27	13.27	13.27
EPS	0.35	0.15	-0.16	-0.01	0.26	0.20	0.54
EPS adj.	0.35	0.15	-0.16	-0.01	0.26	0.20	0.54
*Adjustments made for:
Guidance: n.a.

Financial Ratios

	2016	2017	2018	2019	2020e	2021e	2022e
Total Operating Costs / Sales	91.0 %	115.3 %	127.8 %	228.2 %	75.0 %	67.0 %	61.0 %
Operating Leverage	-12.3 x	n.a.	6.9 x	106.6 x	n.a.	6.3 x	3.5 x
EBITDA / Interest expenses	2.6 x	n.m.	n.m.	n.m.	1.5 x	4.8 x	n.a.
Tax rate (EBT)	-0.4 %	-13.1 %	-55.6 %	98.2 %	311.1 %	30.0 %	30.0 %
Dividend Payout Ratio	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %
Sales per Employee	169,275	87,741	93,153	91,367	n.a.	n.a.	n.a.

Sales, EBITDA	Operating Performance	Performance per Share
in EUR m	in %

Source: Warburg Research	Source: Warburg Research	Source: Warburg Research
	COM M ENT		Published 13.11.2020		5

Lloyd Fonds

RESEARCH

Consolidated balance sheet

In EUR m	2016	2017	2018	2019	2020e	2021e	2022e
Assets
Goodwill and other intangible assets	0.02	0.01	0.50	57.63	54.12	50.37	46.84
thereof other intangible assets	0.02	0.01	0.50	42.98	39.47	35.72	32.19
thereof Goodwill	0.00	0.00	0.00	14.65	14.65	14.65	14.65
Property, plant and equipment	0.31	0.27	0.67	12.80	13.25	13.69	14.12
Financial assets	4.20	2.98	3.51	6.58	6.58	6.58	6.58
Other long-term assets	1.93	1.55	0.00	6.66	6.66	6.66	6.66
Fixed assets	6.47	4.81	4.68	83.68	80.62	77.30	74.20
Inventories	0.00	0.00	0.00	0.00	0.00	0.00	0.00
Accounts receivable	4.80	3.70	6.57	5.92	9.60	11.90	14.50
Liquid assets	14.99	13.98	13.91	9.15	18.37	14.70	13.88
Other short-term assets	1.36	3.97	4.34	6.09	6.09	6.09	6.09
Current assets	21.15	21.65	24.82	21.16	34.06	32.69	34.47
Total Assets	27.60	26.50	29.50	104.80	114.70	110.00	108.70
Liabilities and shareholders' equity
Subscribed capital	9.16	9.16	10.07	13.27	13.27	13.27	13.27
Capital reserve	0.00	0.00	2.90	17.15	17.15	17.15	17.15
Retained earnings	9.99	9.40	7.82	7.73	11.12	13.80	20.97
Other equity components	-0.10	0.00	0.00	0.00	0.00	0.00	0.00
Shareholders' equity	19.05	18.55	20.79	38.15	41.54	44.22	51.39
Minority interest	0.00	0.00	0.00	3.07	3.07	3.07	3.07
Total equity	19.05	18.55	20.79	41.22	44.61	47.29	54.46
Provisions	0.26	0.37	0.22	0.39	0.39	0.39	0.39
thereof provisions for pensions and similar obligations	0.00	0.00	0.00	0.00	0.00	0.00	0.00
Financial liabilities (total)	2.27	3.75	2.42	15.28	15.28	24.28	31.28
thereof short-term financial liabilities	0.00	0.00	0.00	0.67	0.67	0.67	0.67
Accounts payable	4.87	2.45	4.73	27.11	38.50	31.70	27.00
Other liabilities	1.15	1.33	1.35	20.84	15.90	6.34	-4.46
Liabilities	8.55	7.91	8.72	63.63	70.07	62.71	54.21
Total liabilities and shareholders' equity	27.60	26.50	29.50	104.80	114.70	110.00	108.70

Financial Ratios

	2016	2017	2018	2019	2020e	2021e	2022e
Efficiency of Capital Employment
Operating Assets Turnover	38.9 x	4.9 x	3.2 x	-1.0 x	-1.5 x	-4.7 x	21.8 x
Capital Employed Turnover	1.5 x	0.9 x	0.9 x	0.2 x	0.6 x	0.5 x	0.5 x
ROA	49.1 %	28.3 %	-32.8 %	-0.1 %	4.2 %	3.5 %	9.7 %
Return on Capital
ROCE (NOPAT)	5.5 %	n.a.	n.a.	n.a.	n.a.	8.1 %	11.0 %
ROE	16.9 %	7.2 %	-7.8 %	-0.3 %	8.5 %	6.2 %	15.0 %
Adj. ROE	16.9 %	7.2 %	-7.8 %	-0.3 %	8.5 %	6.2 %	15.0 %
Balance sheet quality
Net Debt	-12.72	-10.23	-11.49	6.13	-3.09	9.58	17.41
Net Financial Debt	-12.72	-10.23	-11.49	6.13	-3.09	9.58	17.41
Net Gearing	-66.8 %	-55.1 %	-55.3 %	14.9 %	-6.9 %	20.3 %	32.0 %
Net Fin. Debt / EBITDA	n.a.	n.a.	n.a.	n.a.	n.a.	100.4 %	126.6 %
Book Value / Share	2.1	2.0	2.2	2.9	3.1	3.3	3.9
Book value per share ex intangibles	2.1	2.0	2.1	-1.5	-0.9	-0.5	0.3

ROCE Development	Net debt	Book Value per Share
	in EUR m	in EUR

Source: Warburg Research	Source: Warburg Research	Source: Warburg Research
	COM M ENT		Published 13.11.2020		6

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Consolidated cash flow statement

In EUR m	2016	2017	2018	2019	2020e	2021e	2022e
Net income	3.18	1.36	-1.53	-0.09	3.39	2.68	7.18
Depreciation of fixed assets	0.11	0.08	0.10	0.91	0.05	0.06	0.07
Amortisation of goodwill	0.00	0.00	0.00	0.00	0.00	0.00	0.00
Amortisation of intangible assets	0.39	0.40	0.01	0.35	3.51	3.76	3.52
Increase/decrease in long-term provisions	0.00	0.00	0.00	0.00	0.00	0.00	0.00
Other non-cash income and expenses	-1.27	3.00	0.78	-22.78	0.00	0.00	0.00
Cash Flow before NWC change	2.40	4.84	-0.65	-21.62	6.95	6.49	10.77
Increase / decrease in inventory	0.00	0.00	0.00	0.00	0.00	0.00	0.00
Increase / decrease in accounts receivable	-0.33	1.11	-2.88	0.65	-3.68	-2.30	-2.60
Increase / decrease in accounts payable	0.23	-2.43	2.28	22.38	11.39	-6.80	-4.70
Increase / decrease in other working capital positions	0.00	0.00	0.00	0.00	0.00	0.00	0.00
Increase / decrease in working capital (total)	-0.10	-1.32	-0.60	23.03	7.71	-9.10	-7.30
Net cash provided by operating activities [1]	2.31	3.52	-1.24	1.42	14.66	-2.61	3.47
Investments in intangible assets	0.00	0.00	-0.50	-57.13	0.00	0.00	0.00
Investments in property, plant and equipment	0.00	-0.17	-0.50	-0.50	-0.50	-0.50	-0.50
Payments for acquisitions	0.00	0.00	0.00	-42.32	-4.94	-9.56	-10.80
Financial investments	0.00	0.00	0.40	14.43	0.00	0.00	0.00
Income from asset disposals	1.37	-3.01	4.23	5.46	0.00	0.00	0.00
Net cash provided by investing activities [2]	1.18	-3.18	2.83	-56.20	-5.44	-10.06	-11.30
Change in financial liabilities	-1.24	1.58	-1.58	-1.53	0.00	9.00	7.00
Dividends paid	0.00	0.00	0.00	0.00	0.00	0.00	0.00
Purchase of own shares	0.00	0.00	0.00	0.00	0.00	0.00	0.00
Capital measures	0.00	0.00	3.81	18.62	0.00	0.00	0.00
Other	-0.66	-1.47	0.00	29.56	0.00	0.00	0.00
Net cash provided by financing activities [3]	-1.89	0.11	2.24	46.66	0.00	9.00	7.00
Change in liquid funds [1]+[2]+[3]	1.59	0.45	3.83	-8.13	9.22	-3.67	-0.83
Effects of exchange-rate changes on cash	-0.12	0.00	0.00	3.37	0.00	0.00	0.00
Cash and cash equivalent at end of period	11.64	12.11	13.91	9.15	18.37	14.70	13.88

Financial Ratios

	2016	2017	2018	2019	2020e	2021e	2022e
Cash Flow
FCF	2.12	3.36	-2.24	-3.50	14.16	-3.10	2.97
Free Cash Flow / Sales	22.4 %	45.0 %	-28.3 %	-42.5 %	60.5 %	-10.7 %	8.4 %
Free Cash Flow / Sales	22.4 %	45.0 %	-28.3 %	-42.5 %	60.5 %	-10.7 %	8.4 %
Free Cash Flow / Net Profit	66.7 %	246.7 %	146.0 %	3758.1 %	417.4 %	-115.9 %	41.4 %
Interest Received / Avg. Cash	17.8 %	9.9 %	7.9 %	62.3 %	0.7 %	0.6 %	0.7 %
Interest Paid / Avg. Debt	11.5 %	24.5 %	9.9 %	14.9 %	26.2 %	10.1 %	0.0 %
Management of Funds
Investment ratio	0.0 %	2.3 %	12.6 %	700.8 %	2.1 %	1.7 %	1.4 %
Maint. Capex / Sales	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %
Capex / Dep	0.0 %	35.1 %	892.0 %	4580.9 %	14.0 %	13.0 %	13.9 %
Avg. Working Capital / Sales	-1.3 %	7.9 %	19.5 %	-117.6 %	-107.1 %	-84.2 %	-45.8 %
Trade Debtors / Trade Creditors	98.6 %	151.0 %	139.0 %	21.8 %	24.9 %	37.5 %	53.7 %
Inventory Turnover	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Receivables collection period (days)	185	181	303	263	150	150	150
Payables payment period (days)	1,712	1,845	3,299	23,228	6,007	4,002	2,796
Cash conversion cycle (Days)	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.

CAPEX and Cash Flow	Free Cash Flow Generation	Working Capital
in EUR m

Source: Warburg Research	Source: Warburg Research	Source: Warburg Research
	COM M ENT		Published 13.11.2020		7

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LEGAL DISCLAIMER

This research report ("investment recommendation") was prepared by the Warburg Research GmbH, a fully owned subsidiary of the M.M.Warburg & CO (AG & Co.) KGaA and is passed on by the M.M.Warburg & CO (AG & Co.) KGaA. It is intended solely for the recipient and may not be passed on to another company without their prior consent, regardless of whether the company is part of the same corporation or not. It contains selected information and does not purport to be complete. The investment recommendation is based on publicly available information and data ("information") believed to be accurate and complete. Warburg Research GmbH neither examines the information for accuracy and completeness, nor guarantees its accuracy and completeness. Possible errors or incompleteness of the information do not constitute grounds for liability of M.M.Warburg & CO (AG & Co.) KGaA or Warburg Research GmbH for damages of any kind whatsoever, and M.M.Warburg & CO (AG & Co.) KGaA and Warburg Research GmbH are not liable for indirect and/or direct and/or consequential damages. In particular, neither M.M.Warburg & CO (AG & Co.) KGaA nor Warburg Research GmbH are liable for the statements, plans or other details contained in these investment recommendations concerning the examined companies, their affiliated companies, strategies, economic situations, market and competitive situations, regulatory environment, etc. Although due care has been taken in compiling this investment recommendation, it cannot be excluded that it is incomplete or contains errors. M.M.Warburg & CO (AG & Co.) KGaA and Warburg Research GmbH, their shareholders and employees are not liable for the accuracy and completeness of the statements, estimations and the conclusions derived from the information contained in this investment recommendation. Provided a investment recommendation is being transmitted in connection with an existing contractual relationship, i.e. financial advisory or similar services, the liability of M.M.Warburg & CO (AG & Co.) KGaA and Warburg Research GmbH shall be restricted to gross negligence and wilful misconduct. In case of failure in essential tasks, M.M.Warburg & CO (AG & Co.) KGaA and Warburg Research GmbH are liable for normal negligence. In any case, the liability of M.M.Warburg & CO (AG & Co.) KGaA and Warburg Research GmbH is limited to typical, expectable damages. This investment recommendation does not constitute an offer or a solicitation of an offer for the purchase or sale of any security. Partners, directors or employees of M.M.Warburg & CO (AG

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The valuation underlying the investment recommendation for the company analysed here is based on generally accepted and widely used methods of fundamental analysis, such as e.g. DCF Model, Free Cash Flow Value Potential, NAV, Peer Group Comparison or Sum of the Parts Model (see also http://www.mmwarburg.de/disclaimer/disclaimer.htm#Valuation). The result of this fundamental valuation is modified to take into consideration the analyst's assessment as regards the expected development of investor sentiment and its impact on the share price.

Independent of the applied valuation methods, there is the risk that the price target will not be met, for instance because of unforeseen changes in demand for the company's products, changes in management, technology, economic development, interest rate development, operating and/or material costs, competitive pressure, supervisory law, exchange rate, tax rate etc. For investments in foreign markets and instruments there are further risks, generally based on exchange rate changes or changes in political and social conditions.

This commentary reflects the opinion of the relevant author at the point in time of its compilation. A change in the fundamental factors underlying the valuation can mean that the valuation is subsequently no longer accurate. Whether, or in what time frame, an update of this commentary follows is not determined in advance.

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COM M ENT	Published 13.11.2020	8

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SOURCES

All data and consensus estimates have been obtained from FactSet except where stated otherwise.

The Warburg ESG Risk Score is based on information © 2020 MSCI ESG Research LLC. Reproduced by permission. Although Warburg Research's information providers, including without limitation, MSCI ESG Research LLC and its affiliates (the "ESG Parties"), obtain information (the "Information") from sources they consider reliable, none of the ESG Parties warrants or guarantees the originality, accuracy and/or completeness, of any data herein and expressly disclaim all express or implied warranties, including those of merchantability and fitness for a particular purpose. The Information may only be used for your internal use, may not be reproduced or redisseminated in any form and may not be used as a basis for, or a component, of any financial instruments or products indices. Further, none of the Information can in and of itself be used to determine which securities to buy or sell or when to buy or sell them. None of the ESG Parties shall have any liability for any errors or omissions in connection with any data herein, or any liability for any direct, indirect, special, punitive, consequential or any other damage (including lost profits) even if notified of the possibility.

COM M ENT	Published 13.11.2020	9

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Additional information for clients in the United States

1. This research report (the "Report") is a product of Warburg Research GmbH, Germany, a fully owned subsidiary of M.M.Warburg & CO (AG & Co.)

KGaA, Germany (in the following collectively "Warburg"). Warburg is the employer of the research analyst(s), who have prepared the Report. The research analyst(s) reside outside the United States and are not associated persons of any U.S. regulated broker-dealer and therefore are not subject to the supervision of any U.S. regulated broker-dealer.

1. The Report is provided in the United States for distribution solely to "major U.S. institutional investors" under Rule 15a-6 of the U.S. Securities Exchange Act of 1934 by CIC.
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3. The research reports are distributed in the United States of America by CIC ("CIC") pursuant to a SEC Rule 15a-6 agreement with CIC Market Solutions Inc ("CICI"), a U.S. registered broker-dealer and a related company of CIC, and are distributed solely to persons who qualify as "Major U.S. Institutional Investors" as defined in SEC Rule 15a-6 under the Securities Exchange Act of 1934.
4. Any person who is not a Major U.S. Institutional Investor must not rely on this communication. The delivery of this research report to any person in the United States of America is not a recommendation to effect any transactions in the securities discussed herein, or an endorsement of any opinion expressed herein.

Reference in accordance with section 85 of the German Securities Trading Act (WpHG) and Art. 20 MAR regarding possible conflicts of interest with companies analysed:

-1-

Warburg Research, or an affiliated company, or an employee of one of these companies responsible for the compilation of the research, hold a share of more than 5% of the equity capital of the analysed company.

Warburg Research, or an affiliated company, within the last twelve months participated in the management of a consortium for an issue in

-2- the course of a public offering of such financial instruments, which are, or the issuer of which is, the subject of the investment recommendation.

-3-

-4-

-5-

Companies affiliated with Warburg Research manage financial instruments, which are, or the issuers of which are, subject of the investment recommendation, in a market based on the provision of buy or sell contracts.

MMWB, Warburg Research, or an affiliated company, reached an agreement with the issuer to provide investment banking and/or investment services and the relevant agreement was in force in the last 12 months or there arose for this period, based on the relevant agreement, the obligation to provide or to receive a service or compensation - provided that this disclosure does not result in the disclosure of confidential business information.

The company compiling the analysis or an affiliated company had reached an agreement on the compilation of the investment recommendation with the analysed company.

-6a-

Warburg Research, or an affiliated company, holds a net long position of more than 0.5% of the total issued share capital of the analysed company.

-6b-

Warburg Research, or an affiliated company, holds a net short position of more than 0.5% of the total issued share capital of the analysed company.

-6c- The issuer holds shares of more than 5% of the total issued capital of Warburg Research or an affiliated company.

-7-

The company preparing the analysis as well as its affiliated companies and employees have other important interests in relation to the analysed company, such as, for example, the exercising of mandates at analysed companies.

Company	Disclosure	Link to the historical price targets and rating changes (last 12 months)
Lloyd Fonds	5	http://www.mmwarburg.com/disclaimer/disclaimer_en/DE000A12UP29.htm

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INVESTMENT RECOMMENDATION

Investment recommendation: expected direction of the share price development of the financial instrument up to the given price targetin the opinion of the analyst who covers this financial instrument.

-B-	Buy:	The price of the analysed financial instrument is expected to rise over the next 12 months.
-H-	Hold:	The price of the analysed financial instrument is expected to remain mostly flat over the next 12
months.
-S-	Sell:	The price of the analysed financial instrument is expected to fall over the next 12 months.
"-"	Rating suspended:	The available information currently does not permit an evaluation of the company.

WARBURG RESEARCH GMBH - ANALYSED RESEARCH UNIVERSE BY RATING
Rating	Number of stocks	% of Universe
Buy	134	65
Hold	56	27
Sell	9	4
Rating suspended	6	3
Total	205	100

WARBURG RESEARCH GMBH - ANALYSED RESEARCH UNIVERSE BY RATING N

N taking into account only those companies which were provided with major investment services in the last twelve months.

Rating	Number of stocks	% of Universe
Buy	37	82
Hold	6	13
Sell	0	0
Rating suspended	2	4
Total	45	100

PRICE AND RATING HISTORY LLOYD FONDS AS OF 13.11.2020

Markings in the chart show rating changes by Warburg Research GmbH in the last 12 months. Every marking details the date and closing price on the day of the rating change.

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COM M ENT	Published 13.11.2020	12