Quarterly Report Q3 2021

VARTA AG Group

Quarterly Report Q3/2021

as of September 30, 2021

VISION

We are defining the future of battery

technology to empower a more independent

life.

MISSION

Through continuous investments in research and development, we set the benchmark in battery technology and customization to strive for market leadership in our business segments.

VARTA AG - SELECTED GROUP KPIs

(€ k)	SEPTEMBER 30, 2021	SEPTEMBER 30, 2020
Revenue		630,339
622,326
EBITDA	181,974	151,555
Adjustments:
Cost of share-based payment	428	701
Non-cash effects from purchase price allocation (PPA)	0	8,661
Costs of M&A transactions	71	1,784
Restructuring costs of VARTA Consumer Business	0	14,065
Adjusted EBITDA	182,473	176,766
Adjusted EBITDA Margin (%)	29.3%	28.0%
Group net result	75,886	78,314
Earnings per share	1.87	1.93
Investments (CAPEX)	138,659	190,521
Free Cash Flow	-171,211	-140,961
Equity ratio*	38.1%	44.4%
Balance sheet total*	1,267,992	1,122,803
Employees at the end of quarter	4,734	4,601

* Comparison period relates to December 31, 2020

VARTA AG

VARTA AG produces and markets a comprehensive battery portfolio that ranges from microbatteries, household batteries and energy storage systems all the way through to customer-specific battery solutions for a wide range of uses, setting the industry standards as technology leader in many important areas. As the parent company of the Group, it is active in the "Lithium-Ion Solutions & Microbatteries" and "Household Batteries" business segments. The "Lithium-Ion Solutions & Microbatteries" segment (previously Microbatteries & Solutions) has been re-named and focuses on the microbatteries business, lithium-ion CoinPower, lithium-ion large cells as well as the lithium-ion battery pack business. Through intensive research and development, VARTA sets global standards in many areas of lithium-ion technology and microbatteries, and is a recognized innovation leader in the important growth markets of lithium-ion technology and primary hearing aid batteries. The "Household Batteries" segment covers the battery business for end customers, and includes household batteries, rechargeable batteries, chargers, portable power (power banks), lights and energy storage systems. The VARTA AG Group currently employs around 4,700 staff. At present, VARTA AG's operating subsidiaries are active in more than 75 countries around the world, with five production and assembly facilities located in Europe and Asia as well as distribution centers in Asia, Europe and the USA.

Lithium-Ion Solutions & Microbatteries

The "Lithium-Ion Solutions & Microbatteries" segment focuses on the microbatteries, lithium-ion CoinPower, lithium-ion large cells and lithium-ion battery pack business. Until now, microbatteries and hearing aid batteries for the professional area came under Healthcare, while CoinPower with the OEM microbatteries were allocated to Entertainment.

VARTA AG is a globally leading manufacturer of microbatteries for hearing aids and rechargeable microbatteries. The Company boasts reputable firms as clients and manufactures batteries in numerous key electro-chemical systems as well as in a variety of structural shapes and sizes, while the range of applications extends from hearing aid batteries to wireless headsets, all the way through to automotive applications operated on the basis of microbatteries. In the area of lithium-ion battery packs, the Group can call on extensive industry experience in the construction of high-performance, safe and needs-based solutions - for medical technology, robotics, connectivity and telecommunications applications. The product portfolio ranges from customer-specific battery packs to fully configured standard batteries.

VARTA AG | 3

Household Batteries

The "Household Batteries" segment covers the battery business for end customers and includes household device batteries, rechargeable batteries, chargers, portable power (power banks), lights and energy storage systems. In the Consumer (household device batteries) segment, VARTA AG is the European market leader, with production located in Germany. The innovative, high-quality products are developed and manufactured using cutting-edge technology and by way of the expertise of internationally qualified specialists. A combination of innovative capacity, diversity, quality and design make the product range unique. For VARTA, a pronounced focus on consumer lifestyles and close working relationship with retail partners are essential in order to react quickly and flexibly to emerging device trends with the best energy solutions. By developing and manufacturing energy storage solutions within the Energy Storage Systems business segment, VARTA is contributing to the energy revolution. The energy storage solutions developed by VARTA in the home and mass storage markets range from compact, basic models such as the wall-mounted VARTA pulse neo to large-scale storage solutions including the VARTA flex storage for commercial applications. The AC-coupled systems feature integrated battery inverters and can be combined with all sources of green energy without the need for additional PV inverters. This makes them suitable for all new installations and retrofit projects. The smart energy management system also ensures optimal use of self-produced solar energy and is designed to significantly increase domestic solar power use.

4 | VARTA AG QUARTALSMITTEILUNG Q3 2021

Business development in the first nine months

VARTA AG remains committed to adjusted EBITDA margin of 30 percent

• Despite the ongoing effects of COVID-19 on the business of some customers, adjusted EBITDA rose to € 182.5 million in the first nine months of 2021 and is thus around 3% above the previous year.
• The new revenue target for 2021 is around € 900 million.
• Pilot production of the Lithium-ionhigh-performance cell will start as planned at the end of the year.
• Production of larger lithium-ion round cells for use in BEVs in the performance sector of the premium automotive segment is being planned.
• The Household Batteries segment is developing very positively.
• Outlook for 2021: adjusted EBITDA will increase again in the 2021 financial year, margin will improve by up to 2.5 percentage points to around 30%.

Despite the ongoing effects of the global Covid-19 pandemic on the business of some customers, VARTA AG looks to the coming months with confidence. The technology company from Ellwangen is assuming a further increase in profitability this year. Adjusted EBITDA rose by around 3% to € 182.5 million (EBITDA: € 182.0 million, + 20.1%). VARTA AG sees its goal of further increasing the adjusted EBITDA margin to around 30% for 2021 confirmed. In spring, VARTA announced the start of the pilot production of ultra- high-performancelithium-ion round cells at the end of the year. The company recently announced that it would now also build traction batteries for battery electric vehicles (BEV) with even larger cell formats. The target group here is the performance sector of the premium automotive segment. VARTA will provide details on this in spring 2022. With the new lithium-ion cell factory officially opened at the Nördlingen site at the end of June, VARTA AG now has the infrastructure to produce up to 400 million lithium-ion button cells per year. New projects with customers for small-formatlithium-ion cells are being planned.

Herbert Schein, CEO of VARTA AG: "We will increase the very good operating result of last year again - even though our customers are currently affected by high prices for raw materials, the lack of important electronic components and production downtimes due to local lockdowns. We are very optimistic about the future." According to Schein, VARTA expects the market for small lithium-ion cells to continue to grow. The company is prepared for further impulses such as the bundling of smartphones with True Wireless Stereo Headsets (TWS) due to its capacity expansion. The company is on schedule for the larger lithium-ion round cells. "VARTA is currently preparing for a growth offensive. V4Drive is a complete success. We can see that in the high level of customer interest. In the next two years, we will set up mass production for the cell in the 21700 format. We will decide on the size at the end of the year based on customer orders."

Armin Hessenberger, Chief Financial Officer (CFO) of VARTA AG, adds: "Our planned customer orders are currently running - albeit with a delay. We will therefore achieve the goal of a further increased adjusted EBITDA margin of around 30 percent this year and generate revenues of around € 900 million. The low net debt to EBITDA ratio of just over 1 gives us the financial leeway we need for further growth."

VARTA AG | 5