Nynomic : Letter to shareholders 01/2020

Dear Ladies and Gentlemen,

Dear Shareholders,

After FY 2019 has already been a challenging year due to difficult macroeconomic factors, we find ourselves confronted with the COVID-19 Coronavirus Pandemic this year. It is a never-before seen scenario, also in its economic dimensions.

We would like to comment on this in detail from the Nynomic Group's point of view.

How does the Coronavirus Pandemic affect Nynomic and its shareholders?

First and foremost, it means that there is no valid planning security for anyone since reliable parameters are almost non-existent. Therefore no one knows exactly how the situation will proceed from a macro- and microeconomic point of view.

The recently published figures of Nynomic AG for the first quarter of 2020 show that the Group was fully on track by the end of March. In the first three months of FY 2020, sales of approximately EUR 18.2 million (PY: EUR 15.4 million; +18%) and an EBIT of approximately EUR 1.8 million (PY: EUR 2.1 million; -14%) were achieved.

Even now, at the beginning of the fifth month of the current fiscal year, the time has yet not come for us to lower our 2020 full year guidance of sales of at least EUR 70.0 million with an EBIT margin of 10% to 15%.The current order backlog of more than EUR 30.0 million confirms this assumption.

In situations like these, Nynomic and its eight subsidiaries are supported by the broad international and product-related positioning. If one region or sector is not going well, the Group usually benefits from the current demand situation in another region or sector (at present e.g. pharmaceuticals/healthcare).

We aim to actively contribute to mastering this globally challenging situation in a responsible manner. We are a reliable partner for our customers, especially now. Our business operations continue to run smoothly, and it is ensured throughout the Group that our employees are able to work decentrally and digitally and can be reached as usual. We rely on the ongoing, trusting exchange with all our customers and business partners, personally on the phone, by e-mail and by participating in virtual conferences and web fairs.

Good news comes from the consumer applications sector. The market launch of the measuring system for the determination of hemp and cannabis ingredients is proceeding according to plan and will be supplemented by further parameters soon. For the first time, this will be possible through optional add-ons in the app only and will be billed via a monthly fee. This marks another milestone in Nynomic's B2C strategy. Thus, the expansion of the business model has now been proven.

With our innovative strength, visionary solutions and intelligent product developments, we are demonstrating our capabilities in further new and exciting projects. This, together with our ability to adapt to changing business environments, gives us the confidence to look positively to the future.

In this respect, but also due to its financial solidity, Nynomic AG is robustly positioned in these uncertain times. Looking back, the decision to forego dividend payments due to continuous investments in new key technologies and in the expansion of the Group also proves to be correct.

Furthermore, we are pleased to report on the acquisition of the remaining 45% of the shares in APOS GmbH. We have thus taken a further step in our strategy of consolidating the Group structure and reducing minority interests.

How will the Annual General Meeting be organized?

In the past few weeks, many shareholders have contacted us by e-mail and by telephone. One of the most frequently asked questions related to the planned date of our Annual General Meeting on 14 July 2020.

For us, the Annual General Meeting is one of the most important events of the year. It offers us the opportunity to get into personal contact with you as our shareholders, to discuss and to exchange views, criticism, questions, suggestions and ideas for improvement. This personal exchange is very valuable for us.

However, the health of our employees, shareholders and service providers involved is of the highest priority. After careful consideration of the current overall situation, we therefore plan to make use of the temporary legal regulation and hold the event as a virtual Annual General Meeting. The corresponding invitation with details of the virtual meeting will be published in the Federal Gazette in early June 2020. We regret that it will not be possible to physically attend this year's Annual General Meeting due to the current circumstances, and we thank you for your understanding. Together with our long-term AGM service providers, we are confident that we will be able to optimally fulfill the technical and organizational requirements for a smooth process.

How do these events affect the Nynomic share?

The Nynomic share (A0MSN1) has increased in value by around 3% between the first trading day of the year on 2 January 2020 and 11 May 2020, indicating that it is very robust.

The overall market Index Scale All Share lost around 7% in the same period.

The fair value of the share was last calculated in a research study by Montega on 6 May 2020 at EUR 29.00, so that the share currently offers upside potential of more than 50%.

How will it go on?

We are currently very confident that Nynomic will withstand these difficult times relatively well. The worldwide demand for technologically high-quality, contactless and miniaturized measurement technology is increasing in the medium and long term. The Nynomic Group is strategically well positioned to benefit from this and to outperform the medium market growth.

In this respect, Nynomic's medium-term growth targets of EUR 100 million sales / EBIT margin of approximately 15% will remain valid.

Some of our competitors in individual sub-markets will not survive these disruptive times, and there will be market adjustments. We want to and will benefit from this. Strategic opportunities could arise here, perhaps even this fiscal year, which could usefully complement Nynomic AG's corporate portfolio as a ninth or even tenth pillar in the course of our buy&build strategy.

Thank you!

Dear shareholders, we would like to thank you for the trust you have placed in us even in these extreme times of crisis, also on behalf of our employees, who, like us, are currently facing new, enormous challenges every day.

We also thank our customers, suppliers, service providers and partners.

At times like these, it is good to know who you can count on.

All the best and please stay healthy,

Maik Müller and Fabian Peters

Management Board of Nynomic AG