Q beyond : Quarterly Statement Q1/2021

Quarterly Statement

Q1 2021

q.beyond Quarterly Statement Q1 2021	02

At a Glance

Key figures

	2020		2021
€ million	01/01/ - 31/03/		01/01/ - 31/03/
Revenues	34.1		37.5
Cloud & IoT	23.3		26.3
SAP	10.8		11.2
EBITDA	(1.1)		0.7
Depreciation and amortisation1, 2	4.2		4.1
EBIT	(5.3)		(3.4)
Consolidated net income (loss)	(5.5)		(3.5)
Earnings per share3 (in €)	(0.04)		(0.03)
Capital expenditure4	0.8		1.1
Free cash flow	(4.1)		(4.2)
Net liquidity	44.9	6	40.47
Shareholders' equity	136.6	6	133.17
Equity ratio (in %)	71.6	6	74.37
Xetra closing price5 (in €)	1.00		1.89
Number of shares5	124,172,487		124,509,487
Market capitalisation5	124.2		235.3
Number of employees5	860		955

1

2

3

4

5

6

7

Including non-cashshare-based compensation.

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

Not accounting for IFRS 16. As of 31 March.

As of 31 December 2020. As of 31 March 2021.

q.beyond Quarterly Statement Q1 2021	03

Revenues in € million

37.5

34.1

+3.4

q.beyond posts further strong and profitable growth in first quarter of 2021. This significant increase in EBITDA underlines how scalable the business model is.

EBITDA in € million

0.7

+1.8

(1.1)

Q1 2020

Q1 2021

Q1 2020

Q1 2021

q.beyond Quarterly Statement Q1 2021	04

Q1 2021 at a Glance

Business Performance

Further double-digit revenue growth

q.beyond upheld its strong and profitable growth in the first quarter of 2021. Revenues grew year-on-­ year by 10% to € 37.5 million. EBITDA improved to € 0.7 million, up from € -1.1 million in the first quarter of 2020. As planned, the free cash flow

of € -4.2 million was virtually at the previous year's level.

This further double-digit revenue growth, gener­ ated against the backdrop of the pandemic, was driven by further consistent implementation of the company's "2020plus" growth strategy. This chiefly aims to sustainably increase the company value, defined as market capitalisation less net liquidity. In the first quarter of 2021, the company value grew by 19% to € 194.9 million. Compared with 31 March 2020, this key figure even rose three times over.

Our growth strategy has as its centrepiece an attractive core business with a high share of recurring revenues. These accounted for 76% of total reve­ nues in the first quarter of 2021. We focus on digi­ talisation and on developing and implementing forward -looking business models in the three focus sectors of retail, manufacturing and energy. These contributed 68% of revenues in the past quarter. Companies from these sectors also made a key contribution to the new orders of € 28.8 million received in the first three months of this year, 83% of which involved orders from new customers or orders for new services from existing customers.

Award for StoreButler

Further core elements of q.beyond's growth strategy include platform-based innovations and further investments in the future. This way, we are laying strong foundations to generate consistently strong and profitable growth beyond 2021. The first quarter of 2021 witnessed the marketing launch of the StoreButler, an internally developed platform for digitalising retail outlets. In recognition of this one- stop cloud and IoT technology solution, in March 2021 the prestigious EHI Retail Institute singled us out for this year's "reta award" for the best techno­ logy supplier to the retail sector. Together with our customer Fressnapf, we were awarded the prize in the "Best Enterprise Solution" category.

New partners in retail and for cybersecurity

Another factor that is contributing to the success of the "2020plus" growth strategy is active partner management, which also creates new connections for our platform-based innovations. Since the beginning of 2021, we have been cooperating with the consultancy CAS to promote the introduction of SAP S/4HANA in the retail sector. In future, CAS will be supplementing our own extensive retail and SAP know-how with its expertise in the omni-channel platform SAP CAR, a core element for enhancing customers' shopping experience across all channels.

Since February, our partners have also included the security specialist Northwave. This partnership aims to provide medium-sized companies with proven mechanisms for defending against potential cyber­ attacks. q.beyond already provides a wide range of services in this area and is now supplementing these with expertise from Northwave.

q.beyond Quarterly Statement Q1 2021

Earnings Performance

Gross profit rises by 25%

Our business model is disproportionately scalable. That is apparent if the development in revenues and cost of revenues in the first quarter 2021 is compared with the previous year's figures. While revenues rose by 10% to € 37.5 million, the corresponding costs rose just 7% to € 30.6 million. As a result, gross profit increased by 25% to € 6.9 million and the gross margin rose by 2 percentage points to 18%.

At € 2.7 million, the sales and marketing expenses reported for the first quarter of 2021 fell short of the previous year's figure of € 3.3 million. General and administrative expenses amounted to € 4.0 million in the past quarter, as against € 3.8 million in the previous year's period.

EBITDA sustainably positive

First-quarter EBITDA rose from € -1.1 million in the previous year to € 0.7 million in 2021. As planned, since the fourth quarter of 2020 q.beyond has generated sustainably positive operating earnings before depreciation and amortisation. At € 4.1 million in the first quarter of 2021, depreciation and amor­ tisation were slightly lower than the previous year's figure of € 4.2 million. Of this total, an amount of

• 1.2 million involved the depreciation of IFRS 16 lease liabilities.

First-quarter EBIT improved year-on-year to

• -3.4million,­ up € 1.9 million on the figure of
• -5.3million reported for the first quarter of 2020. Consolidated net income stood at € -3.5 million, as against € -5.5 million in the previous year's period.

05

Earnings Performance by Segment

Cloud & IoT business grows by 13%

The persistently high demand for cloud solutions enabled­ the Cloud & IoT segment to generate dis­ proportionate growth in the first quarter of 2021, in which revenues rose year-on-year by 13% to

26.3 million. Among other factors, q.beyond bene­ fited here from its expertise in setting up and oper­ ating digital workplaces. Ever more companies are making preparations for their employees to work at least partly from home even once the pandemic is over.

This revenue growth was accompanied once again in the first quarter of 2021 by rising earnings contri- butions: gross profit improved to € 4.7 million, up from € 4.2 million in the previous year's quarter. The segment contribution rose to € 2.6 million, com­ pared with € 2.0 million one year earlier. The segment margin improved by 1 percentage point to 10%.

SAP margin rises to 13%

The SAP business has been affected more closely by the ongoing restrictions on contact due to the pandemic than has the Cloud & IoT business. The SAP segment nevertheless managed to increase its first-quarter revenues to € 11.2 million, up from

• 10.8 million in the previous year's period, with particularly great demand for our expertise in SAP operations and application management and in SAP S/4HANA migration. By offering a "Transformation Launchpad", we are making it easier for our custom­ ers to introduce the new SAP software generation in future. This new tool, which has been internally de- veloped, accelerates the migration to SAP S/4HANA by up to 30%.