V ZUG : Half-year Report, July 2023

Half-Year Report

2023

V-ZUG Group

Key figures for the first half of 2023

26.1 (+ 6.0 %) Investments (Capex 1) in CHF million

Improved results with stable sales development. Sales-increasing and cost-saving measures are being implemented.

Net sales 2021 - 2023 per half year in CHF million

5.1 (+ 20.0 %) Operating result (EBIT) in CHF million

Net sales total and by region in CHF million

298.2

(- 1.6 %)

350					International markets
300					proportion 20.4 %
250					Switzerland 237.4
200					Europe (excl. Switzerland) 15.1
				North and South America 27.6
150					Asia / Pacific / Other 18.1
100
50					17.9 (+ 171.0 %)
2021	2021	2022	2022	2023
0	H2	H1	H2	H1
H1
					Cash flow from
Switzerland				operating activities
V-ZUG international brand		in CHF million
International OEM business

1) "Capex" refers to additions to tangible and intangible assets

V-ZUGHalf-Year Report 2023

Letter to shareholders

Zug, 21 July 2023	be allocated to lower volumes. At CHF 5.1
Dear Shareholders	million, it was 20.0 % above the previous
year (CHF 4.3 million). The V-ZUG Group is
	addressing this development with sales-in-
Following the pandemic-induced economic	creasing and cost-saving measures. Con-
conditions characterised by exceptionally	tinuous efforts are being made to lower
high demand for V-ZUG appliances in 2021	procurement costs, the number of tem-
and significant supply chain disruptions	porary jobs has been reduced, vacancies
linked with strong purchase price increases	were only selectively filled and recruitment
in 2022, we have faced challenging mar-	activities by and large suspended. Projects
ket conditions in recent months. For quite	have been reprioritised and expenditures
some time now, there has been uncertainty	cut. V-ZUG adjusts its structural cost base
about the geopolitical situation as well as	successively in order to remain agile with-
factors affecting investments such as rising	out negatively impacting product, delivery
interest rates and inflation. This is reflected	and service quality.
in many industries and companies, includ-	Cash flow from operating activities was
ing ours. Demand for household appliances
was lower in the first half of 2023 com-	CHF 17.9 million in the first half of 2023
pared to the previous year. Our customers'	(previous year's period: CHF - 25.2 million)
inventories were still well stocked, which	as a consequence of deviations in trade
put further pressure on volumes. Purchase	receivables and inventory changes. As in
prices remained high. However, purchases	the previous year, cash flow from investing
on spot-buy markets, could be avoided to a	activities was mainly influenced by the site
large extent. V-ZUG is back to unrestricted	transformation; it amounted to CHF - 25.4
delivery capacity since February 2023.	million, i.e. it was on the level of last year's
	period (CHF - 24.0 million). Free cash flow
Lower volumes in Switzerland, sales growth	was CHF - 7.5 million (previous year's period:
in International Markets and sales price in-	CHF - 49.2 million).
creases resulted in net sales of CHF 298.2	As of 30 June 2023, the balance sheet re-
million, 1.6 % below the previous year (CHF
303.0 million). However, EBIT improved on	mained strong with an equity ratio of 75.4 %
a low level, as operating expenses had to	(31 December 2022: 74.8 %) and cash

Letter to shareholders

3

V-ZUGHalf-Year Report 2023

Oliver Riemenschneider	Peter Spirig
Chairman of the Board of Directors	Chief Executive Officer

4 Letter to shareholders

V-ZUGHalf-Year Report 2023

and cash equivalents including securities of CHF 56.4 million (31 December 2022: CHF 64.5 million).

Slowdown in the Swiss market

The Swiss industry is influenced by the global economy, which is currently marked by uncertainty. The situation in the Swiss market for household appliances has been challenging since the beginning of the year. The sluggish development of new builds in the construction industry - partly due to delayed approval processes - and the reluctance to invest in renovations, as a direct consequence of the strong activities during the Corona pandemic, had a corresponding impact on V-ZUG. However, replacement investments and service have held steady.

"Replacement investments and service are weathering the challenging market conditions."

These challenges are reflected in net sales, which at CHF 237.4 million were 4.7 % below the previous year (CHF 249.2 million). In addition to the cost-saving measures already mentioned, various measures were also introduced to improve sales.

Attractive growth in International Markets In International Markets, V-ZUG's total net sales increased 13.0 % to CHF 60.8 million;

sales development varied across regions. Order intake was affected to some extent by the global uncertainties and cautious consumer behaviour.

"Premium positioning in international metropolitan areas progressing

as planned."

V-ZUG systematically invests in the growth of carefully selected international markets and metropolitan areas. The focus is on the clear premium positioning of products and solutions that offer numerous customer benefits and enable the company's business partners to deliver a new value proposition. V-ZUG has made strategic preparations to enter the Danish market; this was accomplished on the occasion of the event "3daysofdesign" in Copenhagen at the beginning of June 2023. The "Nordic chic" style, characterised by a bold, mini- malist design and high quality, aligns well with V-ZUG's positioning.

Distinct identity of V-ZUG

V-ZUG's positioning gives both the company and its products a unique identity and a dedicated place in the market: V-ZUG is synonymous with high quality of products, delivery and service. In Switzerland, V-ZUG covers the premium and mid-range seg- ments. In the international markets, it focuses exclusively on the premium segment.

Letter to shareholders

5