VARTA : Preliminary Results 2020

VARTA AG

Preliminary Results FY2020

Disclaimer

This presentation contains certain financial me assures (including forward - looking measures) that are not calculated in accordance with IFRS and are therefore considered "non- IFRS financial measures". The management of VARTA believes that these non- IFRS financial measures used by VARTA, when considered in conjunction with ( but not in lieu of) other measures that are computed in accordance with IFRS, enhance an understanding of VARTA' s results of operations, financial position or cash flows. A number of these non- IFRS financial measures are also commonly used by securities analysts, credit rating agencies and investors to evaluate and compare the periodic and future operating performance and value of other companies with which VARTA competes. These non- IFRS financial measures should not be considered in isolation as a measure of VARTA' s profitability or liquidity, and should be considered in addition to, rather than as a substitute for, net income and the other income or cash flow data prepared in accordance with IFRS. In particular, there are material limitations associated with the use of non- IFRS financial measures, including the limitations inherent in determination of each of the relevant adjustments. The non- IFRS financial measures used by VARTA may differ from, and not be comparable to, similarly- titled measures used by other companies.

Certain numerical data, financial information and market data (including percentages) in this presentation have been rounded according to established commercial standards. Furthermore, in tables and charts, these rounded figures may not add up exactly to the totals contained in the respective tables and charts.

Source, footnote

Executive Overview

• ▼ Preliminary 2020 figures above guidance: Historic group revenue and earnings growth

  • − Group revenue EUR 870m (+140% YoY); w/o acquisition: +47% YoY

  • − Adj. EBITDA* EUR 239m (+145% YoY); w/o acquisition: +90% YoY

  • − Adj. EBITDA margin at 27.5%

• ▼ Microbatteries & Solutions driving growth

  • − Cost reduction and economies of scale lead to further increase of EBITDA margin of 9PP

  • − Lithium-Ion CoinPower: further strong growth in revenue; well positioned with new product with +30% higher energy density for the expected strong market growth in the coming years

  • − Hearing aid batteries: expansion of market leadership for rechargeables

• ▼ Household Batteries with excellent cash flow support growth in Li-ion business − Consumer Batteries: Focus on VARTA branded business increased profitability and generates excellent cash flow, successful integration completed; increase of energy density in autumn − Energy Storage Systems: Increased profitability and 50% growth in revenue

• ▼ Modernised brand and ingredient brand strategy − All segments benefit from increased brand visibility − Ingredient brand strategy to further improve product positioning and brand value

Executive Overview

• ▼ Preliminary 2020 figures above guidance: Historic group revenue and earnings growth

  • − Group revenue EUR 870m (+140% YoY); w/o acquisition: +47% YoY

  • − Adj. EBITDA* EUR 239m (+145% YoY); w/o acquisition: +90% YoY

  • − Adj. EBITDA margin at 27.5%

• ▼ Microbatteries & Solutions driving growth

  • − Cost reduction and economies of scale lead to further increase of EBITDA margin of 9PP

  • − Lithium-Ion CoinPower: further strong growth in revenue; well positioned with new product with +30% higher energy density for the expected strong market growth in the coming years

  • − Hearing aid batteries: expansion of market leadership for rechargeables

• ▼ Household Batteries with excellent cash flow support growth in Li-ion business − Consumer Batteries: Focus on VARTA branded business increased profitability and generates excellent cash flow, successful integration completed; increase of energy density in autumn − Energy Storage Systems: Increased profitability and 50% growth in revenue

• ▼ Modernised brand and ingredient brand strategy − All segments benefit from increased brand visibility − Ingredient brand strategy to further improve product positioning and brand value

• ▼ IPCEI funding helps to massively accelerate R&D

• ▼ Focus on sustainability pays off

• ▼ First guidance 2021**: Group revenue expected to be around 940m EUR in 2021; adj. EBITDA expected to reach 30 %

VARTA Group | Financial Highlights

FY 2020 (prelim.)

Strong performance | In a transition year with first time consolidation of VARTA Consumer

▼

VARTA Group | Delivered very strong FY results - further accelerating the high pace of revenue and earnings growth

• ▼ Microbatteries & Solutions | Exceptionally strong FY 2020 results

  Revenue +49%... Adj. EBITDA +96%... Adj. EBITDA margin at 36.9% (+8.9PP)

• ▼ Household Batteries | Dominated by Consumer business for approx. 90% with a strong cash-flow performance

  Adj. EBITDA margin at 14.3% (+5.0PP)

  (The previous year's figures have been adjusted to the new segmentation; retrospective pro forma adjustment)

• ▼ Dividend Payments | Totaling around 100m EUR / around 2.50 EUR per share including a special dividend to mark an extraordinarily successful fiscal year. The dividend recommendation remains subject to committee approval.

Revenue in EURm

Adj. EBITDA in EURm

EBITDA Margin

FY 2019

FY 2020e

FY 2019

FY 2020e

Microbatteries & Solutions

Financial Highlights FY 2020 (prelim.)

Strong organic growth | Fueled by Lithium-Ion batteries

Revenue in EURm

Adj. EBITDA in EURm

• ▼ Lithium-Ion batteries (CoinPower)

  By far the strongest revenue growth is again being recorded for rechargeable lithium-ion batteries for high-tech consumer products, particularly Premium True Wireless Stereo Headsets (TWS).

• ▼ Hearing aid batteries

  VARTA has been able to further expand its market position in the rechargeable hearing aid segment

• ▼ Power Pack Solutions

  High growth has continued in its business with smart, modular energy solutions (Power Pack Solutions) due to the new customer projects that were initiated over the course of the prior year.

• ▼ Adj. EBITDA

  Nearly doubled through organic revenue growth of 50 % resulting in a margin of 36.9% (+8.9PP).

EBITDA Margin

FY 2019

FY 2020e

FY 2019

FY 2020e

Household Batteries

Financial Highlights FY 2020 (prelim.)

Successful integration| Strong cash-flow generation of the consumer batteries business

Revenue in EURm

Adj. EBITDA in EURm

• ▼ Consumer Batteries

  VARTA Consumer Batteries contribute around 90 % to the

  revenue of the Segment Household Batteries; the EBITDA

  contribution is slightly above 90 %.

• ▼ Energy Storage Solutions

  Energy storage solutions business has seen very dynamic growth that outpaced the market

• ▼ Adj. EBITDA

  While the Energy Storage business reached the first time a double-digit margin in 2020, the VARTA Consumer Business could achieve an adjusted EBITDA margin of slightly more than 14 %. This margin constantly increased during the year due to the focus on branded business.

361

EBITDA Margin

52

FY 2019

FY 2020e

FY 2019

FY 2020e

VARTA Guidance 2021

Further growth in Revenue and EBITDA

• ▼ Very well positioned despite ongoing COVID-19 pandemic. Adverse impacts on our clients cannot be ruled out

• ▼ The demand for rechargeable VARTA lithium-ion batteries (TWS) remains strong - HY2 expected to grow faster than HY1

• ▼ VARTA will profit from the trend towards even smaller & more powerful batteries

• ▼ Organic revenue increase expected to be in the high single digit area, growth is above all expected in HY2: Revenue around 940 mEUR

• ▼ Further increase in profitability, adj. EBITDA margin reaching 30 %

9

Summary - FY 2020 (prelim.)

• ▼ Preliminary 2020 figures above guidance: Historic group revenue and earnings growth

• ▼ Microbatteries & Solutions driving organic growth

• ▼ Household Batteries with excellent cash flow supporting investments in the fast-growing Li-Ion business

• ▼ Modernized brand and ingredient brand strategy

• ▼ IPCEI funding helps to accelerate R&D and reduces ramp-up costs

• ▼ Focus on sustainability pays off

• ▼ Starting dividend payments with approx. 100m EUR

• ▼ Guidance 2021*:

  Group revenue expected to be around 940m EUR in 2021; adj. EBITDA to reach 30 %

*In view of the global spread of the coronavirus (COVID-19), negative effects on the VARTA AG Group cannot be ruled out. However, for now, these risks have not materialised

Contact investor relations

Financial calendar

Bernhard Wolf

Head of Investor Relations

VARTA-Platz-1

73479 Ellwangen

Phone: [phone]

E-Mail:[e-mail]

• 31.03.2021 Annual financial statements

• 12.05.2021 Interim report Q1 2021

• 17.06.2021 Annual general meeting

• 13.08.2021 Half-year report 2021

• 11.11.2021 Interim report Q3 2021

VARTA AG

Preliminary Results FY2020