Quarterly Financial Report

1 JANUARY - 30 SEPTEMBER 2021

Quarterly Financial Report

Content

2

CONTENT

At a glance ................................................................................................................................

3

Letter to our Shareholders .......................................................................................................

4

Interim Management Report as of 30 September 2021 ..........................................................

7

Basic information on the Group .......................................................................................

7

Report on economic position ...........................................................................................

7

Supplementary report ....................................................................................................

11

Opportunities and risks ..................................................................................................

11

Report on expected developments................................................................................

11

Consolidated financial statements.........................................................................................

14

Consolidated statement of comprehensive Income ..............................................................

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Consolidated statement of financial position ........................................................................

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Consolidated statement of changes in equity........................................................................

18

Consolidated statement of cash flows ...................................................................................

20

Notes on the preparation of the Quarterly Financial Report.................................................

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Financial calendar...................................................................................................................

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Quarterly Financial Report

At a glance

3

AT A GLANCE

LPKF Laser & Electronics AG

Key Group figures after 9 months 2021

Revenue (Mio. EUR)

EBIT (Mio. EUR)

EBIT margin (%)

Free Cash Flow (Mio. EUR)

EPS, diluted (EUR)

Incoming orders (Mio. EUR)

Net working capital (Mio. EUR)

Equity ratio (%)

Orders on hand (Mio. EUR)

Employees

9 Months

9 Months

2021

2020

60.275.2

-5.26.8

-8.69.1

-11.3-13.2

-0.150.20

89.665.3

As of

As of

09/30/2021

09/30/2020

25.830.1

70.678.7

67.722.4

733693

Segments and markets

Quarterly Financial Report

Letter to our Shareholders

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LETTER TO OUR SHAREHOLDERS

Garbsen, October 28th, 2021

Ladies and Gentlemen,

I am happy to report to you today on the business performance of LPKF Laser & Electronics AG in the first nine months of 2021. The positive development of orders in the Group shows that our technologies and products are increasingly in demand. Incoming orders rose by 38% in the reporting period and now stand at around EUR 90 million. In the third quarter alone, incoming orders rose by 47.7% to EUR 38 million. As of 30 September, orders on hand tripled year-on-year to approximately EUR 68 million. The book-to-bill ratio after nine months came to 1.5.

These forward-looking metrics give us the confidence to execute on our mid term strategy. However, this should not obscure the fact that there are still some short term challenges to overcome in the current financial year. As already announced on 24 September, postponements of customer projects and current disruptions to global logistics in the export of systems, particularly to China, meant that we were unable to ship a significant proportion of finished goods as planned in the third quarter.

Since the beginning of the year, LPKF has continuously taken precautions to secure material and logistics capacities at an early stage. Materials and components were ordered and delivered significantly earlier to ensure delivery to our customers. We are continuing this in the fourth quarter. As a result, we are consciously accepting a temporary increase in inventories in order to supply our customers as punctually as possible and take advantage of opportunities on the market.

The 20% drop in revenue to EUR 60.2 million in the first nine months is primarily due to the fact that we delivered some larger orders in the Solar (approximately EUR 16 million) and Electronics segments in the same period of the previous year. For the current financial year, many larger projects were completed in the third quarter as planned, and now increasingly in the fourth quarter.

At EUR -5.1 million, the cash flow from operating activities after nine months is similar to that of the previous year (EUR - 4.9 million). This is due to both the negative consolidated net profit and the increase in net working capital since the beginning of the year as described above. LPKF has a positive net cash position of EUR 1.5 million as of 30 September 2021.

Segment performance

We have a good order situation in the Electronics segment, but revenue was still significantly below the previous year's figure (-14.5%). This is due to higher demand for our products and

Quarterly Financial Report

Letter to our Shareholders

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solutions including LIDE, but also to a seasonally stronger fourth quarter than in the previous year and the delays in logistics already mentioned.

In a few weeks, our new laser system for high-precision and clean cutting of PCBs will be launched on the market. The CuttingMaster 2122 features a significantly higher cutting speed (25% faster) with the same energy consumption. In addition, we will launch further new developments in the current year, which will make our laser systems for cutting PCBs even more powerful and thus significantly more attractive for our customers.

Our LIDE (Laser Induced Deep Etching) business continues to develop positively. At the LIDE factory in Garbsen, we are producing sample parts for an increasing number of customers. In this way, we are facilitating customers to integrate innovative glass components into their products faster. The ongoing qualification projects for display and semiconductor applications are progressing according to plan. The intensive design-in and testing by our customers particularly encourages us in our approach.

In addition, further areas of application are emerging into which we are advancing with LIDE technology. We are convinced that LIDE technology will enable glass to be used as a material for high-tech industry and lead to profound changes both in production processes and in the quality of the end products.

With ARRALYZE, we have developed a new solution for cell-based medical products and cell biology research based on technologies and expertise available at LPKF. With these applications, we are addressing biotechnology, a new market for LPKF. In 2022, we will launch this highly innovative system on the market and generate our first revenues. I am pleased that we are also making good progress in this area as planned.

In the Welding segment, the positive development of recent months is continuing. Our intensive sales initiatives, particularly in the medical, e-mobility and consumer electronics sectors, have allowed us to reach many new customers worldwide and convince them of the benefits of laser welding. Revenue increased by 35% in the first nine months, while incoming orders even rose by more than 50% to EUR 22.3 million. We are confident that this trend will continue.

In the Solar segment, we received two major orders from a leading global solar module manufacturer in the third quarter, with a total volume of around EUR 20 million, which will impact revenue in 2022/2023. We have thus further consolidated our strong position on the solar market. Our laser systems enable our customers to produce ever more efficient solar modules at ever lower cost. This means that we will continue to be excellently positioned in this fast-growing sector in the future.

As a result of the coronavirus pandemic, our business with systems for research and development (Development segment) remained subdued in the third quarter because, in some cases, employees at research institutions have not yet returned to the laboratories. We are working proactively with our customers to catch up on this business as far as possible during the course of the year. Currently, we can observe a clear pick-up.

As far as protecting our employees from COVID-19 is concerned, we are continuing to monitor case rates very carefully. Our protective measures in place are under constant

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LPKF - Laser & Electronics AG published this content on 28 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 October 2021 06:10:20 UTC.