SNP Schneider Neureither & Partner : Interim Statement Q3/2023

INTERIM STATEMENT Q3 2023

2

KEY FIGURES

in € million, unless otherwise indicated

Order entry

Revenue

EBITDA

EBIT

Profit or loss for the period

Earnings per share (in €)

Operating cash flow

Cash and cash equivalents

Employees as of September 30

in € million, unless otherwise indicated

Order entry

Revenue

EBITDA

EBIT

Profit or loss for the period

Earnings per share (in €)

Operating cash flow

9M 2023

169.6

149.6

16.0

8.3

4.5

0.63

-1.6

29.3

1,399

Q3 2023

60.2

54.1

7.4

4.8

4.2

0.40

7.3

9M 2022		Delta absolut		Delta in %
122.7		47.2		38%
124.9		24.7		20%
9.9		6.1		62%
1.9		6.4	330%
-0.1		4.6		n/a
-0.00		0.63		n/a
-12.9		11.3		n/a
19.1		10.2		50%
1,309		90		7%

Q3 2022		Delta absolut		Delta in %
40.1		20.1		50%
41.6		12.5		30%
2.7		4.7		171%
0.1		4.7	5,495%
-0.2		4.4		n/a
-0.03		0.4		n/a
-0.3		7.6		n/a

INTERIM STATEMENT | Q3 2023

3

Business Performance of

SNP Schneider-Neureither & Partner SE

for the Third Quarter of 2023 and for the Period from January 1 to September 30, 20231

ORDER BACKLOG AND ORDER ENTRY

ORDER ENTRY AND ORDER BACKLOG BY BUSINESS SEGMENT

€112.8 million, or approximately 67%, of the order entry volume is attributable to the Services business segment (previous year: € 78.0 million, or approximately 64%).

Over the first nine months of the year, the LATAM (€ 29.9 million compared with € 18.6 million in the previous year, +61%), USA (€ 27.3 million compared with

in € million

Order entry

Service

Software

EXA

in € million

Order entry

Service

Software

EXA

Order backlog

Service

Software

EXA

Q3 2023

Q3 2022

60.2 40.1

38.0 25.6

20.8 12.9

1.3 1.6

9M 2023

9M 2022

169.6 122.7

1. 78.0

1. 35.9

6.3 8.8

1. 126.6

1. 76.5

1. 46.3

1. 3.8

∆

+50%

+49%

+62%

-16%

∆

+38%

+45%

+40%

-28%

+14%

+41%

-28%

-22%

The Software business segment accounts for € 50.4 million, or approximately 30%, of the order entry volume (previous year: € 35.9 million, or approximately 29%).

• 6.3 million, or approximately 2%, of the order entry volume in the reporting period is attributable to the EXA business segment (previous year: € 8.8 million, or ap- proximately 7%).

Order entry in connection with upcoming SAP S/4HANA projects continued to develop positively: At € 85.0 million in the first nine months of 2023, order entry is significantly higher than the previous year's level of € 39.7 million; SAP S/4HANA projects therefore represent approximately 50% of the overall order entry volume of the

• 13.4 million in the previous year, +104%) and UKI (€ 14.2 million compared with € 5.8 million in the pre- vious year, 145%) regions were the highest-growthregions in terms of order entry.

Only incoming orders in the JAPAC region are lower than the figure for the previous year (€ 10.1 million, compared to € 13.0 million in the previous year, -23%).

Incoming orders generated via partners amounted to

• 62.9 million over the first nine months of the year (previous year: € 39.5 million); this represents an in- crease of around 61% on the previous year.

The order backlog amounted to € 144.6 million as of September 30, 2023, compared to € 131.8 million as of

Order intake of € 169.6 million in the first nine months of the current fiscal year was increased substantially by € 46.9 million, or 38%, compared to the previous year (previous year: € 122.7 million), which is mainly attributable to the acquisition of major projects from well-known customers in the USA, CEU, LATAM and UKI regions. The increase in the third quarter of 2023 relative to the same quarter in the previous year amounted to € 20.1 million or 50%.

SNP Group (previous year: approximately 32%).

The CEU region continues to provide the largest share of incoming orders: This region accounts for € 88.1 million of the order entry volume; this represents an increase of around 23% relative to the first nine months of the previous year (previous year: € 71.9 million). The CEU region's share of global order entry volume thus amounts to 52% (previous year: 59%).

December 31, 2022 (+10%).

• The following percentage changes are based on exact and not rounded values.

4

REVENUE PERFORMANCE

REVENUE DISTRIBUTION BY BUSINESS SEGMENT

REVENUE IN THE SOFTWARE BUSINESS SEGMENT

The SNP Group increased its Group revenue by around 19.8% in the first nine months of 2023 to € 149.6 million

OVERALL REVENUE BY BUSINESS SEGMENT

in € million

Q3

2023

18.1

2022

13.0

∆

+39%

(previous year: € 124.9 million). With a significant in-

crease of 29.9% to € 54.1 million (previous year: € 41.6 million), the third quarter made a significant contribution to the positive overall development of Group revenue.

The increase in revenue is decisively attributable to the positive development of software revenue (including software revenue of the EXA Group); as a result of the

in € million

Q3

Service

Software

EXA

9M

Service

Software

EXA

2023

54.1

33.8

18.1

2.1

149.6

95.4

47.7

6.5

2022

41.6

26.3

13.0

2.3

124.9

81.2

36.5

7.2

∆

30%

28%

39%

-5%

+20%

+17%

+31%

-10%

Software licenses

Software support

Cloud/SaaS

9M

Software licenses

Software support

Cloud/SaaS

13.2

3.8

1.1

47.7

33.5

10.9

3.3

8.2

3.7

1.1

36.5

22.5

10.8

3.2

+60%

+4%

+1%

+31%

+49%

+1%

+2%

sale of larger program licenses, software revenue increased disproportionately by € 11.6 million, or 31.4%, to

As already achieved in the first two quarters of the current fiscal year, software revenue once again increased

• 48.6 million (previous year: € 37.0 million). This devel- opment underscores the continued successful imple- mentation of SNP's software and partner strategy for its end customer and partner business.

Service revenues (incl. the service revenues of EXA AG) of € 101.1 million are € 13.1 million, or 14.9%, higher than in the previous year (previous year: € 88.0 million).

In the first nine months of 2023, the Service business segment provided € 95.4 million (9M 2022: € 81.2 mil- lion) of Group revenue. Revenue in this business segment thus increased by € 14.2 million, or 17.5%, compared with the first nine months of the previous year, due to an improved order situation and higher customer prices. Measured in terms of the overall revenue volume of € 149.6 million, the revenue achieved in the Service business segment corresponds to a share of approximately 64% (9M 2022: 65%). This business segment's revenue in the third quarter increased by € 7.5 million or 28.3% to € 33.8 million.

disproportionately in the third quarter; this is primarily due to the increased sales of program licenses, mainly for the implementation of numerous SAP S/4HANA projects. Revenue in the Software business segment (including maintenance and cloud) thus increased by

• 11.2 million, or around 31%, compared to the same nine-month period in the previous year to € 47.7 million (9M 2022: € 36.5 million). Measured in terms of the overall revenue volume of € 149.6 million, the revenue achieved in the Software business segment corre- sponds to a share of 32% (previous year: 29%).

INTERIM STATEMENT | Q3 2023

5

Within the Software business segment, revenue from software licenses of € 33.5 million increased significantly by € 11.0 million, or around 49%, over the previous year (previous year: € 22.5 million).

Recurring software support revenue was slightly higher than in the previous year at € 10.9 million (previous year:

• 10.8 million). Maintenance revenue has been shaped by countervailing effects: While support revenue for SNP's own software increased by € 0.8 million in the first nine months of the year, support revenue for third-party software fell by € 0.7 million.

REVENUE DISTRIBUTION BY REGION

The increase in Group revenue in the first nine months of 2023 is attributable to a positive revenue trend in almost all of SNP's regions. The USA and UK regions accounted for the highest increases in percentage terms, which are attributable in particular to major S/4HANA projects with well-known companies. The following tables show the distribution and development of external revenue by region:

OPERATING PERFORMANCE

		Q3 2023
EBITDA (in € million)	7.4
EBITDA margin	13.7%
EBIT (in € million)	4.8
EBIT margin		8.9%

	9M 2023
EBITDA (in € million)	16.0
EBITDA margin	10.7%
EBIT (in € million)	8.3
EBIT margin	5.5%

Q3 2022	∆
2.7	+170.6%
6.6%	+7.1 PP
0.1	+5,494.9%
0.2%	+8.7 PP

9M 2022		∆
9.9	+61.5%
7.9%		+2.8 PP
1.9	+330.3%
1.5%		+4.0 PP

Cloud revenue (including software as a service) increased slightly by € 0.1 million to € 3.3 million (9M 2022: € 3.2 million).

The EXA business segment accounted for external revenue of € 6.5 million in the first nine months of the year (previous year: € 7.2 million).

REVENUE BY REGION

in € million

CEU

USA

LATAM

UKI

JAPAC

in € million

CEU

USA

LATAM

UKI

JAPAC

Q3 2023

Q3 2022

28.4 23.9

1. 4.3

1. 7.7

5.5 1.7

3.8 4.0

9M 2023

9M 2022

84.1 73.7

1. 14.9

1. 19.9

1. 5.4

1. 11.0

∆

+19%

+95%

+3%

+220%

-5%

∆

+14%

+48%

+3%

+127%

-4%

In the first nine months of 2023, SNP achieved earnings before interest, taxes, depreciation and amortization (EBITDA) of € 16.0 million (previous year: € 9.9 million); this corresponds to an increase of € 6.1 million, or approximately 62%, on the previous year. The EBITDA margin accordingly amounts to 10.7% (previous year: 7.9%).

In the same period, earnings before interest and taxes (EBIT) of € 8.3 million were significantly higher than the previous year's figure of € 1.9 million (€ +6.4 million or +330.3%). The EBIT margin is thus 5.5% (previ- ous year: 1.5%).

6

The increase in operating earnings is mainly attributable to revenue growth. The negative currency result of € -0.3 million (previous year: positive currency result:

• 4.5 million), on account of the trend for the US dollar in particular, prevented an even stronger improvement in earnings in the first nine months of the year.

Costs of purchased services and the cost of materials rose at a disproportionately lower rate year-over-year relative to revenue growth by € 0.7 million, or 4.4%, year- over-year to € 17.6 million (previous year: € 16.9 million).

Personnel expenses increased by € 10.7 million or 13.0% to € 93.0 million (previous year: € 82.3 million). In addition to a higher number of employees (year- over-year increase of +88 to 1,399), the increase was mainly due to salary increases, and to a special inflation adjustment payment granted to employees in Germany in January 2023.

Depreciation and amortization declined slightly by € 0.3 million to € 7.7 million (previous year: € 8.0 million).

Other operating expenses increased by € 5.8 million in the first nine months of the year to € 31.6 million (previ- ous year: € 25.8 million). This is mainly due to exchange rate losses, particularly as a result of the weak US dollar (€ 8.1 million, compared with € 3.9 million in the previous year), higher travel expenses (€ 2.0 million, compared with € 1.2 million in the previous year), increased advertising and hospitality expenses (€ 3.9 million, compared with € 3.3 million in the previous year) and higher legal and consulting expenses (€ 2.0 million, compared with € 1.4 million in the previous year).

Compared with the previous year, other operating income decreased by € 0.6 million to € 9.7 million. This trend is mainly attributable to a lower level of income earned on exchange rates.

EBIT IN THE SERVICE BUSINESS SEGMENT
		9M	2023		9M	2022
EBIT (in € million)			1.0			-0.9
EBIT margin		1.0%			-1.1%
		Q3	2023		Q3	2022
EBIT (in € million)			1.4			-1.9
EBIT margin			4.2%			-7.2%

EBIT IN THE SOFTWARE BUSINESS SEGMENT

		9M	2023
EBIT (in € million)			18.8
EBIT margin	39.4%
		Q3	2023
EBIT (in € million)			7.4
EBIT margin		40.6%
EBIT IN THE EXA BUSINESS SEGMENT
		9M	2023
EBIT (in € million)			0.3
EBIT margin			4.6%
		Q3	2023
EBIT (in € million)			0.0
EBIT margin			0.4%

9M 2022

12.1

33.2%

Q3 2022

5.4

41.9%

9M 2022

0.8

10.9%

Q3 2022

0.1

5.4%

INTERIM STATEMENT | Q3 2023

7

NET FINANCIAL RESULT AND RESULT FOR THE PERIOD

to minority shareholders was therefore reportable as interest expense on the consolidated income state-

On the assets side of the balance sheet, as of Septem- ber 30, 2023 current assets had risen slightly by € 0.5

in € million

Net financial income

Earnings before taxes (EBT)

Income taxes

Result for the period

Earnings per share (diluted and basic)

in € million

Net financial income

Earnings before taxes (EBT)

Income taxes

Result for the period

Earnings per share (diluted and basic)

9M 2023

-1.8

6.5

-1.9

0.63

0.63

Q3 2023

-0.6

4.2

-1.3

0.40

0.40

9M 2022

-2.1

-0.2

0.1

-0.00

-0.00

Q3 2022

-0.4

-0.4

0.1

-0.03

-0.03

ment. Adjusted for the above-mentionedprior-year ef- fect, interest expenses have increased by € 0.8 million to € 2.2 million, which is attributable to the increase in the interest-rate level over the course of the year. This is offset by other interest and similar income in the amount of € 0.4 million (previous year: € 0.8 million). In the previous year, higher interest income compounded on a long-term receivable in connection with the sale of the minority interests in All for One Poland, Sp. z.o.o., Suchy Las, Poland, as well as interest income in connection with an early purchase of minority interests in EXA AG, was registered. Overall, this resulted in higher interest income.

million to € 130.7 million. Within the current assets item, contract assets have increased due to higher POC (Percentage of Completion) receivables (€ +5.5 million to € 15.1 million) and trade receivables have likewise risen (€ +11.2 million to € 75.9 million) as a result of the high order volume. In addition, receivables in the amount of € 5.9 million were sold as of December 31, 2022; no receivables were sold in the reporting period. Other nonfinancial assets increased by € 0.6 million to

• 4.2 million due to the higher volume of prepaid ex- penses (December 31, 2022: € 3.5 million).

Cash and cash equivalents decreased as of Septem- ber 30, 2023, by € 9.1 million to € 29.3 million (Decem-

The net financial result over the first nine months of the year amounted to € -1.8 million (previous year: € -2.1 million). This includes interest and similar expenses of

• 2.2 million (previous year: € 2.9 million). The higher figure from the previous year is mainly attributable to the distribution made to minority shareholders of EXA AG, Heidelberg, in the amount of € 1.4 million in the first quarter of 2022. From a Group perspective, 100% of the shares were attributable to SNP SE as of March 1, 2021, due to existing put/call options. The distribution made

After income taxes in the amount of € 1.9 million (previ- ous year: € 0.0 million), the profit for the period amounted to € 4.5 million (previous year: € -0.1 million). The net margin (the ratio of the result for the period to overall revenue) is 3.0% (previous year: -0.1%).

FINANCIAL AND NET ASSET POSITION

Compared with December 31, 2022, total assets decreased by € 6.1 million to € 258.9 million.

ber 31, 2022: € 38.4 million) due to the repayment of loans, the payment of bonuses in April 2023 and the increase in working capital.

Noncurrent assets declined by € 6.6 million to € 128.2 million (December 31, 2022: € 134.8 million), which is mainly attributable to the decrease in noncurrent trade receivables (€ -1.6 million; reclassification to current trade receivables) and intangible assets (€ -2.7 million; PPA depreciation/amortization, which is not offset by additions).

8

On the liabilities side of the balance sheet, current liabilities have decreased slightly by € 0.9 million to € 63.8 million as of September 30, 2023 (December 31, 2022:

• 64.6 million). Trade payables and contract liabilities declined by € 1.7 million to € 20.0 million (December 31, 2022: € 21.6 million). At the end of last year, the last pay- ment runs were made earlier due to the Christmas holi- days, resulting in higher liabilities on the part of SNP as of year-end 2022. In addition, other non-financial liabili- ties declined by € 1.9 million to € 26.7 million, due to re- duced tax liabilities in particular. On the other hand, fi- nancial liabilities increased by € 4.0 million to € 16.3 million (December 31, 2022: € 12.2 million). The decrease in short-term bank loans by around € 5 million was offset by reclassification of promissory note loans of € 9.0 mil- lion from noncurrent to current financial liabilities.

Noncurrent assets decreased by € 10.6 million to € 82.6 million (December 31, 2022: € 93.2 million). The change is mainly a result of lower noncurrent liabilities owed to financial institutions following the reclassification from noncurrent to current financial liabilities.

At € 112.5 million, Group equity is € 5.4 million higher than at its level of € 107.2 million as of December 31, 2022. The improvement is mainly a result of an increase in retained earnings due to the result for the period

achieved. Due to the increase in equity and the decrease in total assets as of September 30, 2023, the equity ratio improved from 40.5% to 43.5%.

Development of Cash Flow and the

Liquidity Position

Negative operating cash flow of € -1.6 million (previ- ous year: € -12.9 million) in the first nine months of the year mainly reflects the increase in trade receivables and other assets (€ +16.0 million; apart from a higher revenue volume, this was also due to the sale of receivables of € 5.9 million at the end of the previous year, which were then missing as a cash receipt from receivables in the reporting period) as well as outflows of funds due to the decrease in trade payables and other liabilities (€ -0.8 million). Operating cash flow improved by € 11.3 million on the previous year.

The positive cash flow from investing activities in the amount of € 3.8 million (previous year: negative cash flow of € -9.1 million) is mainly due to proceeds from the sale of shares in All for One Poland.

Financing activities result in a negative cash flow in the amount of € 10.2 million (previous year: positive cash flow in the amount of € 0.9 million). Besides the repay-

ment of lease liabilities (€ 3.7 million), the negative cash flow was due in particular to the repayment of loan liabilities in the amount of € 6.4 million.

The effects of changes in foreign exchange rates on cash and bank balances have resulted in a negative impact of € -1.1 million (previous year: € 0.3 million).

Overall cash flow during the reporting period comes to € -9.1 million (previous year: € -20.8 million).

Taking into account the changes presented here, the level of cash and cash equivalents declined to € 29.3 million as of September 30, 2023. As of December 31, 2022, cash and cash equivalents amounted to € 38.4 million. Overall, the SNP Group remains solidly positioned financially.

EMPLOYEES

As of September 30, 2023, the number of employees of the SNP Group had increased to 1,399; as of De- cember 31, 2022, the Group had 1,311 employees. In the first nine months of the current fiscal year, on average the SNP Group had 1,355 employees (previous year: 1,317).

INTERIM STATEMENT | Q3 2023

9

SIGNIFICANT EVENTS IN THE THIRD QUARTER OF 2023

Takeover Offer

The extended acceptance period for the voluntary public takeover offer to the shareholders of SNP ended on August 10, 2023. Immediately thereafter, Wolfgang Mar- guere directly and indirectly held 63.8% of SNP Schnei- der-Neureither & Partner SE's shares. The free float (the proportion of shares in the company held by investors who hold less than 5% of the share capital) decreased to around 36% as a result of the takeover offer.

Further information on the takeover offer may be found on page 14 of the half-year financial report for 2023.

Extraordinary General Meeting and Subsequent Constituent Meeting of the Supervisory Board

SNP SE's extraordinary General Meeting took place on September 27, 2023, as a virtual general meeting. The General Meeting approved all of the items on the agenda with large majorities. The shareholders accepted the proposal of the Board of Directors for the revision of the Articles of Association to change the governance sys-

tem from a monistic to a dualistic system of manage- ment. The General Meeting also approved the proposed candidates for the new Supervisory Board; Dr. Karl Benedikt Biesinger, Prof. Dr. Thorsten Grenz and Peter Maier are now serving on the three-member Supervisory Board. At its constituent meeting, the Supervisory Board elected Dr. Biesinger as its Chairman and Prof. Grenz as his deputy.

In addition, the extraordinary General Meeting granted approval of the actions of the Board of Directors for the 2023 fiscal year; the Annual General Meeting in 2023 had deferred this resolution. The resolution on the remuneration of the new Supervisory Board also received the necessary majority; the election of the Supervisory Board becomes effective with the entry of the amendment to the Articles of Association in the Commercial Register.

Establishment of an Audit Committee

The Supervisory Board also established an Audit Committee at its first meeting. The same persons serve on the Audit Committee and the Supervisory Board; Prof. Dr. Thorsten Grenz chairs the Audit Committee as an independent member.

FORECAST

Thanks to the positive course of business and the continuing momentum, the management has confirmed the outlook for the year 2023 as a whole which was raised on October 9:

• Order entry is expected to reach to between € 220 to 240 million (previous order entry forecast: € 210 to 230 million);
• Revenue is expected to be around the upper end of the notified range of between € 190 and 200 million;
• EBIT is expected to reach, or even slightly exceed, the upper end of the notified range of € 5 to 10 million.

10

CONSOLIDATED BALANCE SHEET to September 30, 2023

ASSETS
in € thousand		Sept. 30, 2023	Dec. 31, 2022	Sept. 30, 2022
Current assets
Cash and cash equivalents	29,290		38,367		19,572
Other financial assets	4,927		11,505		120
Trade receivables and other receivables	75,940		64,730		35,712
Contract asset values	15,144		9,642		40,146
Other non-financial assets	4,157		3,543		4,619
Tax receivables	1,244		2,368		884
	130,702		130,155		101,053
Non-current assets
Goodwill	73,274		72,597		74,525
Other intangible assets	16,381		19,123		20,057
Property, plant and equipment	4,655		5,188		5,142
Rights of use	13,727		15,023		15,254
Other financial assets	1,109		1,112		20,731
Investments accounted for under the equity method	225		225		225
Trade receivables and other receivables	13,952		15,525		2,856
Contract values	0		0		8,580
Other non-financial assets	237		251		236
Deferred taxes	4,606		5,771		9,860
	128,166		134,815		157,466
		258,868		264,970		258,519