Q beyond : Half-Year Financial Report H1/2022

Half-Year Financial Report as of 30 June 2022

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02	q.beyond Half-Year Financial Report as of 30 June 2022

At a Glance

Key figures

€ million	2022	2021	2022		2021
	01/04/ - 30/06/	01/04/ - 30/06/	01/01/ - 30/06/		01/01/ - 30/06/
Revenues	42.0	38.8	83.3		76.3
Cloud & IoT	33.8	28.6	65.7		54.9
SAP	8.3	10.2	17.5		21.4
EBITDA	1.4	1.2	2.3		2.0
Depreciation and amortisation1, 2	4.0	4.1	8.1		8.2
EBIT	(2.6)	(2.9)	(5.8)		(6.3)
Consolidated net income	(3.1)	(3.4)	(6.6)		(6.9)
Earnings per share3 (in €)	(0.03)	(0.03)	(0.05)		(0.06)
Capital expenditure4	0.1	2.3	0.3		3.3
Free cash flow	(1.9)	(3.6)	(3.5)		(7.8)
Net liquidity			44.2	6	56.2	7
Shareholders' equity			140.8	6	147.4	7
Equity ratio (in %)			74.9	6	73.6	7
Xetra closing price5 (in €)			1.12		1.91
Number of shares5			124,569,487		124,569,487
Market capitalisation5			139.5		237.9
Number of employees5			1,144		1,016

1 Including share-based remuneration.

2 Including depreciation of right-of-use assets (IFRS 16). Diluted and basic.

Not accounting for IFRS 16. As of 30 June.

As of 30 June 2022.

As of 31 December 2021.

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Robust revenue growth

in challenging environment

Revenues in € million

42.0

38.8

Strong growth in cloud business

Quarterly revenues in the Cloud & IoT segment rise by 18% to € 33.8 million year-on-year thanks to success in operating­ business with cloud, IoT and SaaS solutions and targeted acquisitions.

+8%

Macroeconomic uncertainty

holds back SAP business

Quarterly revenues in the SAP segment fall by 19% to € 8.3 million year-on-year due to cautious approach taken by customers given rising risk of recession and pandemic-related restrictions.

Q2 2021

Q2 2022

04	q.beyond Half-Year Financial Report as of 30 June 2022

Group Interim Management Report

Business Performance

Robust growth

in challenging environment

q.beyond maintained its growth in the second quarter­ of 2022. In a challenging environment, revenues rose year-on-year by 8% to € 42.0 million. This means that revenues nevertheless fell short of the original budget. Given the increasingly uncertain economic climate, q.beyond observed a certain caution on the part of companies across all of its business fields. The ongoing war in Ukraine has significantly raised the risk of recession in Germany, while the massive rise in prices for fossil-based energies is further fuelling inflation. In this exceptional situation, our close and trust-based cooperation with our cus- tomers, some of which we have accompanied for many years now, has particularly paid off. Recurring revenues accounted for 78% of total revenues in the second quarter of 2022.

78%

of Q2 2022 revenues are recurring.

second-quarter revenues in the Cloud & IoT segment rose by 18% to € 33.8 million. The companies acquired during 2021 made major contributions to this strong growth. Furthermore, the software as a service (SaaS) revenues included in this segment also increased. However, the economic uncertainty left its mark on the Cloud business as well, with individual projects delayed and others postponed for the time being.

Package of measures creates new growth momentum

Against this backdrop, q.beyond has taken four steps to prepare the company for the possibility of a prolonged recession and provide additional growth momentum. Firstly, the SAP segment will adapt its market alignment and further optimise its use of existing resources. Secondly, the CEO Jürgen Hermann will personally assume responsibility for the "SaaS" business field still in development. He will place the focus more clearly than previously on developing marketable products and services and launching these swiftly onto the market. These measures will be accompanied by optimised cost and liquidity management­ and a more clearly focused sales strategy, taking particular account of opportunities for cross-selling and upselling with existing customers.

Cloud revenues grow year-on-year by 18% in quarter under report

Together with high sickness levels due to the pan- demic, the economic uncertainty had an adverse impact on the SAP segment in particular in the past quarter. Revenues here amounted to € 8.3 million in the second quarter of 2022, compared with € 10.2 million in the previous year. By contrast,

Focus on retail, logistics and manufacturing

Moreover, from now on we will concentrate on the three focus sectors of retail, logistics and manufac- turing, which accounted for 64% of total revenues in the second quarter of 2022. Energy, previously the fourth focus sector, has been massively affected by

Group Interim Management Report

64%

Share of revenues in focus sectors of retail, logistics and manufacturing

the consequences of the war in Ukraine and will initially not be prioritising measures to modernise its IT. Not least in view of this, our company decided not to pursue an acquisition in the energy sector. This had been presented in the "beyond 2022" strategy and was included in the outlook for the 2022 financial year as a whole.

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New orders of € 106.3 million in first half of 2022

In the meantime, our main focus will be on accelerating our organic growth in the second half of 2022 and beyond. The newly introduced package of measures will lay a foundation for this. Our company is also benefiting from a high volume of new orders. These amounted to € 30.0 million in the second quarter of 2022, with 72% of this figure involving new customers or new orders from existing cus- tomers. New orders for the first six months of the current financial year totalled € 106.3 million.

Net liquidity of € 44.2 million offers scope for further acquisitions

A further reason not to pursue the acquisition was the change in underlying conditions following the outbreak of war in Ukraine. Given the risk of a recession and high inflation, we are prioritising the market maturity of the respective products and the ability of new subsidiaries to make positive earnings contributions from the outset. Where these requirements are met, we will continue in future as well to make targeted acquisitions of companies capable of strengthening and extending our portfolio. With net liquidity of € 44.2 million as of 30 June 2022, we have the necessary funds to finance further acquisitions from our own resources.

q.beyond reinforces position among leading IT service providers

A high volume of new orders creates a basis for continued growth beyond 2022. With its "beyond 2022" strategy, our company has once again set itself ambitious medium-term targets. In 2025, we aim to generate revenues of between € 270 million and

• 300 million, and to achieve an EBITDA margin of 14% to 16% as well as free cash flow of between
• 15 million and € 25 million. The new Lünendonk ranking underlines how well q.beyond is positioned in the market when it comes to generating strong and profitable growth: In this highly reputed anal- ysis, our company has reinforced its position among the leading IT service providers in Germany. 1

1 https://www.luenendonk.de/aktuelles/presseinformation/ luenendonk-listen-2022-fuehrende-it-dienstleister-in-deutschland(press release only available in German)