--- source_url: "https://www.scribd.com/document/658842807/20230328-Exyte-AR22-EN-web" title: "Exyte Annual Report 2022 Overview | PDF | Financial Statement | Risk" mirrored_at: 2026-08-16T03:38:08.334Z host: www.scribd.com cited_in_42a: true mirror_canonical: "https://index.42a.ai/www.scribd.com/document/658842807/20230328-Exyte-AR22-EN-web" --- > **Original source:** https://www.scribd.com/document/658842807/20230328-Exyte-AR22-EN-web ## ANNUAL REPORT 2022 GROWING TOGETHER Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 2 Exyte ANNUAL REPORT 2022 ABOUT THIS REPORT  3 FIGURES AT A GLANCE 32 Consolidated Statement of Financial Position This report is an interactive pdf file that offers 33 Development of Consolidated Equity you many advantages. You can navigate  4 FOREWORD 34 Consolidated Statement of Cash Flows quickly and easily through the report using the 35 Notes to the Consolidated Financial Statements elements listed below.  7 GROUP MANAGEMENT REPORT 80 Executive Management of Exyte GmbH  8 About the Group 80 Supervisory Board of Exyte GmbH 10 Business­ Segments 81 List of shareholdings of Exyte GmbH   BACK TO CONTENT PAGE 11 Economic Report for 2022   BACK TO PREVIOUS PAGE 21 Human Resources 84 INDEPENDENT AUDITOR’S REPORT 22 Risks, Opportunities, and Forecast   ONE PAGE BACK 86 IMPRINT   ONE PAGE FORWARD 30 CONSOLIDATED FINANCIAL STATEMENTS 31 Consolidated Statement of  Comprehensive Income Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 3 Exyte FIGURES AT A GLANCE Key figures Key figures Sales by region1 in € million in € thousand in € million (previous year) 1.1. –31.12.2022 1.1. –31.12.2021 Change 31.12.2022 31.12.2021 Change in % Order intake 7,559 8,114 –6.8 % Non-current assets 632,550 542,624 16.6 % Sales 7,403 4,865 +52.2 % Current assets 3,325,622 2,364,425 +40.7 % T&S AMER 775 (427) 560 (423) Gross profit 589 389 +51.4 % Equity 661,633 447,818 +44.7 % 10.1 (8.5)  7.3 (8.4)  Gross profit margin in % 8.0 8.0 – Non-current liabilities 144,329 114,680 +25.9 % EBIT 397 258 +53.9 % Current liabilities 3,152,210 2,344,551 +34.4 % EMEA APAC 2,109 (2,441) 4,239 (1,732) EBIT margin in % 5.4 5.3 +0.1 PP Total assets/equity and liabilities 3,958,172 2,907,049 +36.2 % 27.4 (48.6) 55.2 (34.5)  Adjusted EBIT1 416 263 +58.2 % 1 Adjusted EBIT is defined as the result from operating activities (EBIT) adjusted for income or expenses deriving from irregular, non-recurring effects. EBIT adjustments result from income or expenses related to Adjusted EBIT margin in % 5.6 5.4 +0.2 PP the Exyte Group’s reorganization (in particular, from write-downs), restructuring costs, costs incurred due to site closures and relocations, effects on earnings deriving from purchase price allocations, as well as other Group net profit 349 217 +60.8 % income and expenses that are nonrecurring in nature or are incurred outside the normal course of business, as well as COVID 19-related effects. Adjusted EBIT is used to determine profitability, excluding irregular, 1 Before consolidation of the regions. Group net profit margin in % 4.7 4.5 +0.2 PP nonrecurring positive or negative effects, thus ensuring comparability between different reporting periods. 2 The percentage in the financial year 2022 is calculated based on the 2022 sales, which is €7,403 million. Full Number of employees (full-time year 2021 sales: €4,865 million. equivalents at the end of the period) 8,965 7,444 +20.4 % Sales by business segment 2022 Cash flow from operating activities 687 630 +9.0 % in € million (previous year) Cash flow from investing activities –81 –185 +56.2 % in % Free cash flow 606 445 +36.2 % ## Data Centers Regional Specific Business 31.12.2022 31.12.2021 Change 288 (180) 75 (81) Order backlog 6,848 6,696 +2.3 % 3.9 (3.7) 1.0 (1.7) ## Net working capital –1,266 –972 +30.2 % Net working capital in % of sales2 –17.1 –20.0 +2.9 PP Biopharma & Life ­Sciences 610 (357) 8.2 (7.3) Advanced ­Technology Facilities 6,430 (4,246) 86.9 (87.3) Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 4 Exyte FOREWORD DEAR READERS, 2022 was an extremely successful financial year for the Exyte Group. We achieved or exceeded all our ambitious forecasts for our important key figures: order intake, sales, and adjusted EBIT. In view of the challenges provided by the geopolitical and economic environment, this is an outstanding achievement of which we are justifiably proud. “THE 2022 ANNUAL Our sales increased significantly in comparison to the previous year, by 52% to a level of €7.4 billion. We have thus set another sales record. This provides further evidence for the success RESULTS PROVIDE of our sustainable growth strategy. Factors such as the COVID pandemic, the war between Russia and Ukraine, or the deteriorating economic environment did not have any significant FURTHER EVIDENCE impact on our operational business in 2022. This is evidenced by the development of our order intake. At a level of €7.6 billion, this was only slightly lower than the record level that we achieved FOR THE SUCCESS in 2021. We were yet again successful in increasing our profitability in financial year 2022: OF OUR SUSTAIN- Adjusted EBITDA increased by 56% to €460 million and adjusted EBIT by 58% to €416 million. The adjusted EBITDA margin improved to a level of 6.2%. We were able to increase the adjusted ABLE GROWTH EBIT margin to 5.6%. Taking into account the order backlog of €6.8 billion euros that is reported as of December 31, 2022, we have achieved an excellent basis for the future development of the STRATEGY.” Exyte Group. Due to our strategic focus on industries fueled by long-term megatrends, we are well positioned to continue our growth trajectory even under more challenging macroeconomic conditions. All our targeted industry sectors show sustainable high growth rates and thus offer us the opportunity for long-term profitable growth. Our dedicated employees are essential to our success, supporting our clients around the globe with their tireless commitment, great passion, and comprehensive expertise. We are an attractive employer and provide our employees with a wide range of programs to help their development in line with their individual requirements. During 2022, we significantly expanded our employee development options and added new online and digital training opportunities within our Learning Management System. Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 5 Exyte Diversity is a key driver for business success. In the past year, we became a signatory to the Exyte is a dynamically growing organization with a clear strategic focus. We have ambitious “Charta der Vielfalt” (Diversity Charter). In doing so, we have documented to the outside world plans for 2023 and have set ourselves challenging targets. We intend to consistently pursue our what has long been our daily practice. We promote inclusion and diversity and are committed “Pathway to Ten” growth strategy and realize our “Next Level” agenda for the future. Despite the to open and respectful interaction with each other – regardless of age, ethnic origin, nationality, current economic and geopolitical uncertainties, our excellent market positioning provides us gender, gender identity, as well as sexual orientation and social background. We are one team. with an excellent basis to benefit from long-term megatrends. Our corporate culture, which is based on ownership, collaboration and a sense of belonging, is the central pillar of our new employer brand, which we have introduced as part of our “Next Level” Our thanks go to our employees, whose commitment is the basis for Exyte Group’s success. We agenda for the future. The Exyte employer brand provides support for our global recruitment of are enabling our clients to create a better world with their innovations. Our claim with the slogan new talent for the Group and thus helps promote the dynamic expansion of our team. “Bringing the future of technology to life” describes this perfectly. We would like to thank our clients and business partners for their great confidence in us. We look forward to continuing our The “Next Level” agenda for the future is closely linked to our “Pathway to Ten” strategy for success story and cooperating in the joint development and implementation of innovative tech- growth. Our stated objective is to increase our total sales to €10 billion by 2027 and to generate nological solutions. an EBIT margin in excess of 6%. Our three global business units – Advanced Technology Facilities, ## “IN 2023, WE INTEND TO Biopharma & Life Sciences, and Data Centers – are excellently positioned in targeted growth The motto for our 2022 Annual Report is “Growing Together.” The stories illustrate how we grow markets around the world. together as a business, whether as a team, with our clients, or by means of technological innova- CONSISTENTLY PURSUE tions. Where businesses, a wealth of ideas and human resources come together, new solutions Targeted strategic acquisitions in selected growth areas also form an essential part of our for a better future are born. ## OUR ‘PATHWAY TO TEN’ “Next Level” agenda for the future. In October 2022, with the acquisition of Airgard, Inc., a US American specialist for exhaust gas cleaning systems, we completed our second acquisition in the Technology & Services business area within a space of twelve months. Airgard is the market leader in the development and production of so-called wet scrubbers, which have been deployed GROWTH STRATEGY throughout the world by numerous, reputable companies in the semiconductor industry sector. In this manner, we are strengthening our strategy of vertical integration, and thus improving our Sincerely, AND REALIZE OUR ‘NEXT market position, in this strategic market segment. Our clients benefit from additional technical solutions for their exhaust management that assist them to make semiconductor production LEVEL’ AGENDA FOR more sustainable. THE FUTURE.” In November 2022, BDT & MSD Partners announced their intention to become a minority share- holder in Exyte. We are thereby gaining another strong partner who will accompany and promote our further development. BDT has excellent connections, especially in the important US market. After the transaction has been completed, which is expected to take place in the spring of 2023, Dr. Wolfgang Büchele Peter Schönhofer BDT can then provide us with additional impetus for our regional growth activities in the USA. Chief Executive Officer Chief Financial Officer Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 6 Exyte ## THE €7.4 bn SALES ADJ. EBIT €416 m ORDER INTAKE €7.6 bn YEAR 2022 IN FIGURES +52% SALES ADJ. EBIT EMPLOYEES +58% 9,000 Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 7 Exyte GROUP MANAGEMENT REPORT  8 ABOUT THE GROUP 16 Development of the business segments 23 Risk assessment  8 Executive management 17 Financial Performance 25 Risk treatment  9 Corporate structure 18 Assets and liabilities 25 Risk monitoring 20 Liquidity management 25 Risk reporting 10 BUSINESS SEGMENTS 20 Cash flow development 25 Group risk report for 2022 10 Advanced Technology Facilities 20 Summary of the economic situation 26 Strategic risks 10 Biopharma & Life Sciences 26 Operational risks 10 Data Centers 21 HUMAN RESOURCES 26 Financial risks 27 Risks related to financial instruments 11 ECONOMIC REPORT FOR 2022 22 RISKS, OPPORTUNITIES, AND 27 Risks related to the COVID-19 pandemic 11 The overall economic situation and FORECAST 27 Risks related to macroeconomic in specific industry sectors 22 Risks developments 11 The overall economic situation 22 Risk management system 27 Overall assessment of the risk situation 11 Developments by industry sector 22 Risk management principles within Exyte 28 Opportunities 13 Business performance in 2022 22 Materiality thresholds 28 Opportunities deriving from 13 Key financial performance indicators 23 Risk management process “Next Level – Pathway to Ten“ 14 Business development 23 Risk identification 29 Forecast 14 Developments in the regions Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 8 Exyte ABOUT THE GROUP The Exyte Group (“Exyte”) is a global leader in the planning, development, and delivery of EXECUTIVE MANAGEMENT high-tech production facilities. In more than 100 years of its corporate history, Exyte has acquired extensive experience and developed profound professional expertise for controlled The executive management team of Exyte GmbH has two members. Up until August 17, 2022, and regulated environments. From the provision of initial consulting services to the design and it had three members. implementation of turnkey solutions for the semiconductor and pharmaceutical industries, as well as for data centers, Exyte offers a complete range of services for its clients in growth Dr. Wolfgang Büchele, the Chief Executive Officer, manages the two strategic business segments markets. With a presence in more than 20 countries, Exyte supports its clients at both a local Advanced Technology Facilities and Biopharma & Life Sciences, as well as heading up these and global level. corporate functions: Corporate Strategy/M&A, Corporate Compliance, Corporate Internal Audit, Corporate Human Resources, and Corporate Communications & Investor Relations. In addition, up until April 30, 2022, he also had responsibility for the strategic business segment Data Centers. From May 1 onwards, he has also taken over responsibility for the management of the APAC (Asia-Pacific) region, the T&S business area, and the corporate functions Corporate Opportunity & Risk Management and Corporate Environment, Health & Safety (EHS). Peter Schönhofer, Chief Financial Officer, is responsible for the Corporate Accounting, Corporate Treasury, Corporate Controlling, Corporate Legal & Insurance, Corporate IT, Corporate Tax, and Corporate Procurement & Subcontracting functions. Furthermore, from May 1, 2022 onwards, he has also taken responsibility for the strategic business segment Data Centers, for management of the AMER (USA) and EMEA (Europe) regions, and the Corporate Quality Management Dr. Wolfgang Büchele, Chief Executive Officer function. The Corporate Commercial Project Management function, of which Mr. Schönhofer had previously been the head, was merged together with the Corporate Project & Construction Management function with effect from May 1, 2022 and has now been renamed as the Corporate Project & Commercial Management function. Roberto Penno, who was Chief Operating Officer up until August 17, 2022, retained responsibility for the management of the APAC (Asia-Pacific), AMER (USA), and EMEA (Europe) regions up until April 30, 2022, and also for the T&S (Technology & Services) business area, the Regional Specific Business segment, as well as for the Corporate Engineering & Design, Corporate Project & Construction Management, Corporate Environment, Health & Safety (EHS), Corporate Quality Management, and Corporate Risk Management & Internal Controls functions (again, up until April 30, 2022). ## Peter Schönhofer, Chief Financial Officer Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 9 Exyte CORPORATE STRUCTURE Exyte manages its business primarily by regions, which at the same correspond to the The group of Exyte companies that were fully consolidated as of December 31, 2022 reportable segments. In addition to the three regions of AMER, EMEA, and APAC, the was as follows: T&S business area is also a reportable segment. Corporate structure In the 2022 financial year, the following changes were made to the Group: • Exyte Rus, LLC was liquidated; up to the date of its liquidation, the entity was assigned EXYTE GROUP¹ to the EMEA segment. – Exyte GmbH • Exyte Netherlands B.V. was newly incorporated as a subsidiary of Exyte Europe Holding – Exyte Management GmbH GmbH and has been assigned to the EMEA segment. ## AMER EMEA APAC T&S • Cyclone Acquisition Sub, Inc. was newly incorporated as a subsidiary of Critical Process Systems Group, Inc. In order to facilitate the acquisition of Airgard, Inc., Cyclone Acquisition – Exyte Americas Holding, Inc. – Exyte Europe Holding GmbH – Exyte Asia-Pacific Holding Ltd. – Exyte Technology GmbH Sub, Inc., was merged into Airgard, Inc. with effect from October 1, 2022. As a result, – Exyte U.S., Inc. – Exyte Central Europe GmbH – Exyte Singapore Pte. Ltd. – Exyte Technology CZ s.r.o. Airgard, Inc. became a 100% subsidiary of Critical Process Systems Group, Inc. Airgard, – Exyte France SAS – Exyte Malaysia Sdn. Bhd. – Exyte Technology Shanghai Co., Ltd. Inc. is a US company specializing in exhaust gas cleaning technology, which is active in – Exyte Italy S.r.l. – Exyte Vietnam Co., Ltd. – Exyte Hargreaves Ltd. the development and manufacture of wet scrubbers that are used by companies in the – Exyte Israel Projects Ltd. – Exyte Shanghai Co., Ltd. (Project – Exyte Services (Singapore) Pte. Ltd. semiconductor industry sector throughout the world. Airgard, Inc. has been assigned to – Exyte Netherlands B.V. business) – Exyte Services (Malaysia) Sdn. Bhd. the T&S segment. – Exyte Northern Europe Ltd. – Exyte Trading Shanghai Co., Ltd. – Exyte Shanghai Co., Ltd. – Blitz S18-226 GmbH – Exyte Trading (Singapore) Pte. Ltd. (Service business) – Exyte Taiwan Co., Ltd. – Total Facility Solutions, Inc. – Delicatessen Engineering Services – CPS Holdco, LLC Pvt. Ltd. – CPS Intermediate, LLC – CPS Buyer, LLC – Critical Process Systems Group, Inc. – BioPharm Engineered Systems, LLC – CPS Process Solutions, LLC – Diversified Fluid Solutions, LLC – ENGVT, LLC – Fab-Tech, Inc. – Pure Guard, LLC – NEHP, Inc. – NEHP Worldwide, LLC – CPS Intermediate II. LLC – CPS Buyer Holdco II, LLC – CPS Buyer II, LLC – Nuance Systems, LLC – Airgard, Inc. ## 1 Exyte is part of the Stumpf Group Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 10 Exyte BUSINESS In addition to the reportable segments APAC, AMER, EMEA, and T&S, Exyte manages its business through the three strategic business SEGMENTS segments Advanced Technology Facilities (ATF), Biopharma & Life Sciences (BLS), and Data Centers (DTC). In this manner, Exyte manages its business as a matrix structure. Financial information relating to the segments can be found in Note 30 in the notes to the consolidated financial statements. ## ADVANCED TECHNOLOGY FACILITIES BIOPHARMA & LIFE SCIENCES DATA CENTERS Advanced Technology Facilities Advanced Technology Facilities (ATF): The ATF business segment Biopharma & Life Sciences (BLS): This business segment offers Data Centers (DTC): In the DTC business segment, the focus is on provides consulting and planning services, engineering and design complete solutions for clients in the biotechnology, pharmaceutical, building energy-efficient data centers for providers of cloud facilities, • Semiconductors services, as well as project management services surrounding the medical technology, food and nutrition, and consumer care sectors. high-performance computing, and co-location centers. DTC’s key clients • Flat Panel Displays building of manufacturing plants and installations for research and The range of services includes the overall planning, engineering, are large technology organizations that invest extensively in high-capacity • Photovoltaics development facilities in the electronics industry sector. Exyte combines construction, commissioning, and qualification of production facilities cloud data centers throughout the world. DTC is also active on behalf of • Batteries its range of services to provide turnkey engineering, procurement, and that comply with industry-specific and legal requirements. We have co-location service providers that offer additional capacity for scaling implementation solutions (Design & Build). In addition to this, Exyte offers extended our global presence by opening up new branches in Raleigh, purposes to providers of cloud services. services in the area of mechanical, electrical, and process systems (MEP), North Carolina (USA), in Philadelphia, Pennsylvania (USA), and in Cork, provides cleanroom technology, as well as necessary gas and chemical Ireland. We see attractive growth opportunities in the Biopharma & Life Regional Specific Business (RSB): In addition to the activities carried out Biopharma & Life Sciences dosing systems, and carries out the installation (Tool Install) of the Sciences sectors for complex projects that we can offer to our clients as in the three strategic business segments of ATF, BLS, and DTC, Exyte process equipment used for semiconductor manufacturing purposes. a reliable partner throughout the entire project cycle. The basis for this offers products and services in the Regional Specific Business segment. • Pharmaceuticals & Biotechnology The integration of the Critical Process Systems Group (CPS) and Airgard strategy is provided by our qualified and experienced staff, who realize Activities in this segment primarily covers the heating, ventilation, and • Food & Nutrition within the Exyte Group has expanded the range of products and services first-class, high-quality solutions for our clients. BLS benefits from the air-conditioning (HVAC) systems provided by the British Group company, • Consumer Care offered to ATF clients. The range offered encompasses innovative, long-standing relationships with its global clients to secure such projects. Exyte Hargreaves Ltd., as well as defense projects in Israel and Italy. In • Specialty Chemicals critical subsystems, such as, for example, precision chemical and gas BLS concentrates its efforts on deepening and building relationships with addition, various Group companies are equipped with the necessary mixing systems, distribution and delivery systems, and special exhaust both existing and new clients. We are aggressively promoting a course expertise to conduct other nonstrategic business in their local markets. gas cleaning systems that enable semiconductor manufacturers to of global, integrated project delivery in order to further the segment’s Such activities are also covered by the RSB segment. significantly reduce their greenhouse gas emissions. ATF thus supports continued growth across the business regions. Our technological Data Centers its clients in the semiconductor, battery and flat panel display industry processes create added value for our clients through automated design, sectors in their efforts to decarbonize their factories and transition to smart construction, and innovative modular solutions. Our business • Cloud Computing more sustainable business processes. Exyte acquires contracts for its activities and our services to our clients are characterized by our • Co-Location projects from its global and regional client base – mainly organizations commitment to sustainability. • High Performance with which Exyte has longstanding business relationships. ATF’s extensive • Computing Enterprise experience in delivering sophisticated high-tech facilities, by means of its integrated design and build approach, provides its clients with the reliability they expect in terms of safety, costs, timelines, and quality. Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 11 Exyte ECONOMIC REPORT FOR 2022 THE OVERALL ECONOMIC SITUATION AND IN SPECIFIC INDUSTRY SECTORS The overall economic situation The emerging economies proved to be robust. In China, the economy recovered in the third Advanced Technology Facilities (ATF) quarter despite continuing negative impacts deriving from the COVID pandemic, as well as Semiconductors The global economy weakened during the course of 2022, especially as a general trend in the from problems in the real estate sector, following the collapse of production in the spring due Following strong growth in 2021, sales in the global semiconductor industry sector in 2022 developed economies. Negative influences resulted from the drastic increase in energy prices, to massive lockdowns. GDP in China rose by 2.9%. India also showed strong GDP growth, even increased by 13.9% to a level of €633 billion, due to higher demand for chips.2,3 At the same time, a monetary policy to mitigate the high inflationary pressure through use of significantly rising though the country’s overall economic production had suffered from a historic heat wave in capital expenditure investment in 2022 increased to €185.5 billion. This represents an increase by interest rates, as well as from widespread uncertainty triggered by these developments. Towards the summer. The other emerging Asian economies were also able to increase their production 21%.2,4 Overall, the market has continued to grow compared to the previous year and is expected the end of 2022, the IfW indicator (IfW = Institute for the World Economy), which is a reliable output. The level of economic activity in Latin America was also predominantly on the increase. to continue to show long-term, steady growth, although demand for semiconductors is under indicator for further economic development, continued to decline. In Malaysia, GDP grew by 5.5% in 2022. With a few exceptions – such as Ghana, Ecuador, and considerable pressure due to inflation, more restrictive monetary policies, declining consumer Pakistan – no serious negative impacts deriving from the restrictive, global monetary policies confidence, corona-related restrictions, and the war in Ukraine. At the same time, supply and According to the IfW, despite these negative factors of influence, global production showed have so far been identified for the group of emerging economies. demand are drawing closer together in the industry sector as more production capacity comes growth of 3.2%1 in 2022. At the beginning of the year, world trade was robust and the previous into operation, especially in the “memory” product group. year’s growth rates were initially maintained. Towards the end of the year, however, its In 2022, economic development was strongly influenced by high energy prices and high development had lost significant momentum. inflationary pressures, resulting from the war between Russia and Ukraine. In addition, Nevertheless, the market is expected to grow by 4.6% in 2023. Technological advancements geopolitical developments, such as the trade relations between the USA and China, continue such as the Internet of Things (IoT), Artificial Intelligence (AI), Big Data, Industry 4.0, and Economic development varied in the different regions. For example, the economic momentum to shape overall conditions in the global economy. Under the new US administration, relations e-mobility continue to drive the digital transformation process. Powerful chips play an important in the developed economies continued to weaken despite extensive fiscal support measures. still remain tense. Trade policy measures to promote national economic interests cannot be role in smart mobile consumer devices, as well as in driver assistance systems and other Overall, although the total economic production generated by these countries increased slightly, ruled out. technological solutions in the field of autonomous driving. Electric and hybrid vehicles contain the rate of expansion for domestic consumption declined. In addition, construction investment around twice as many semiconductors as conventional vehicles. Technological solutions are also in the USA also fell significantly. Nevertheless, GDP showed an increase of 0.7% in 2022. In the needed to combat climate change. euro area, the growth rate fell to 0.3%, while in the United Kingdom and Japan there was an Developments by industry sector actual respective decline by 0.2%. In Germany, GDP grew by 1.9% in 2022 and in Austria by 4.9%. Many of our clients are expanding their production capacity in Europe and the US, after the EU Denmark achieved growth of 3.2%, while Ireland even recorded growth of 11.8%. The following developments were observable, in financial year 2022 and thereafter, in the and the US government announced plans to subsidize local wafer plants for mass production specific industry sectors in which the business segments of Exyte are active. purposes, e.g. through the so-called US Chips Act. The pressure on our clients to continue to be innovative and promote cutting-edge technologies is increasing the need for larger and more complex semiconductor facilities around the world. 2 Change compared to the previous year in USD without any adjustment changes in exchange rates (1 € = 1.2 USD in 2022). 3 World Semiconductor Trade Statistics article published online: “The World Semiconductor Trade Statistics 1 The statistics cited in this section are taken from a research paper published by the Kiel Institute for (WSTS) has released its new August 2022 semiconductor market forecast.” the World Economy (IfW) entitled “The World Economy in the Winter of 2022,” which was completed on 4 IC Insights article published online on August 23, 2022: “Semi Capex on pace for 21% growth to December 21, 2022. $185.5 billion this year.” Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 12 Exyte Batteries The global photovoltaic (PV) market achieved sales of €253 billion in 2022, representing an Exyte is continuing on its growth path by following its “Pathway to Ten” approach. BLS plays a Exyte has focused its attention on the fast-growing market for high-performance batteries. increase of 57% in comparison to 2021.2,9 In conjunction with increasing demand, some 232 GWp significant role in this process. The business segment will continue to focus on working closely Electric vehicles, energy storage applications, and a growing number of battery-powered devices of newly installed PV production capacity became operational in 2022. This corresponds to a with multinational pharmaceutical companies in future and on strengthening its capabilities in for industrial and private use are increasing the demand for such products. capacity increase of 32% compared to the previous year.10 the area of engineering and construction of specialized equipment. Our goal is to provide support to our clients around the world with our special expertise. Subsidies from various European governments that take the form of national environmental China and other Asian countries now produce almost all the PV modules that are sold worldwide. incentives are accelerating the demand for hybrid and electric vehicles across Europe. For This region also constitutes the largest market. Companies continue to invest in new production The process of blending technology and health requirements is accelerating rapidly. Digital example, the current coalition agreement drawn up by German government has set the target facilities for PV modules. Exyte’s key accounts in this sector are two long-standing clients in transformation enables us to achieve efficient results for our clients. In recent years, of having at least 15 million fully electric passenger vehicles registered by the year 2030. In South East Asia. digitalization, and the innovations associated with it, have had a huge impact on the way we order to achieve this, respective production sites are to be supported.5 execute and deliver our projects. The BLS segment integrates digital solutions into workflows Biopharma & Life Sciences (BLS) that help to deliver critical projects more quickly. We are simultaneously boosting productivity In June 2022, the EU Commission presented plans to ban the sale of new vehicles powered by Not least due to the pandemic, innovation and scientific breakthroughs have been achieved by and increasing efficiency by means of our lean engineering and smart construction processes. internal combustion engines in all EU member states from 2035 onwards. The US Department of many biopharma & life sciences companies. We expect to see billions of dollars of continued We are internally promoting a principle of “technology-driven delivery.” In this manner, we aim to Energy announced funding of $3.1 billion to subsidize battery manufacturing facilities in the US.6 investment in these sectors across the globe over the next five years. Investment projects are stimulate a culture of high performance and profitable growth. This will encourage more companies to manufacture battery cells and components in the US. planned for the production of biotech products, the filling and manufacturing of pharmaceutical substances, cell and gene therapy, blood fractionation, and personalized medication due to Innovations in the fields of pharmaceutical research, genetics, biotechnology, bioinformatics, and Up until 2030, global capacity for battery production is expected to increase to some 6,000 advances in the field of genetics. We are also observing a shift towards more data-driven materials science have led to improvements in the treatment of AIDS, cancer, and heart disease, gigawatt hours per year. This corresponds to an average annual growth rate of over 20%. Europe approaches across the value chain, greater collaboration, and digital transformation. Global and offer hope for improved therapies for neurodegenerative diseases. Low-cost genetic and North America will account for about 40% of the production capacity.7 engagement in healthcare is also leading to advances in vaccines that effectively prevent disease sequencing, genome mapping, biomarker testing, and targeted medication and treatments will and deaths. Exyte is gearing itself up to support both existing and new clients to meet the make it possible to provide customized health information and develop personalized treatments Flat Panel Displays and Photovoltaics demand arising from these developments. to improve results for patients. All of this will lead to a wave of capital expenditure investment in As compared to the previous year, global sales of flat panel displays (FPD) increased by 4.3% new manufacturing facilities as pharmaceutical platforms are further developed. This will prompt in 2022, to a level of €146 billion.2,8 Demand for electronic devices such as laptops, TVs, mobile Social developments – such as population growth, increasing prosperity, and higher life biopharma companies to create space in existing manufacturing facilities and improve their phones, and tablets will continue to increase slightly, despite the decline in demand for consumer expectancy – continue to be important growth drivers for the market. These trends continue flexibility. goods in the current global economic environment. Important factors driving the growth of unchanged despite the COVID pandemic. The COVID pandemic has shown how important it is the FPD market are the increased use of automotive display technology, OLED (Organic Light- for the pharmaceuticals sector to react quickly and flexibly to health crises. Whether it involves Data Centers (DTC) Emitting Diode) displays, LCD (Liquid Crystal Display) displays for digital signage applications, and the upgrading of existing equipment to enable rapid production changeovers or the expansion Growth in the global data centers market sector continues to show positive momentum and the growing demand for display-based devices in healthcare. of production facilities to increase production capacity levels, BLS, together with the engineering continues to fuel the business development of Exyte’s Data Centers business segment. In 2022, and construction industries, play a crucial role in enabling the pharma sector to respond quickly the global market for data centers grew to a level of €60 billion, representing a growth rate of and efficiently to changing requirements and conditions. almost 14%.11 ## 5 German government coalition agreement 2021–2025. 6 Electrek article published online on May 2, 2022: “US Dept. of Energy announces US$3 billion funding for EV battery manufacturing and supply chain.“ 9 Online article published by GlobeNewswire on October 6, 2022: “Global Solar PV (Photovoltaic) 7 Benchmark information provided by Mineral Intelligence & Rystad coupled with Exyte estimates. Market Size/Share Worth 306.16 Billion by 2030 at an 8.3% CAGR.“ 8 Online article published by Future Market Insights: “Outlook for Flat Panel Displays 2022–2027.“ 10 Online article published by IHS Markit on April 12, 2022: “Solar PV Market Outlook 2022 and Beyond.“ 11 Data Center Services Global Market Report 2022 (\[Link\]), September 2022. Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 13 Exyte ## BUSINESS PERFORMANCE IN 2022 The DTC business segment was able to acquire major contracts in Asia and Europe from globally Key financial performance indicators restructuring costs, costs incurred due to site closures and relocations, effects on earnings active key clients. The provision of resources for the successful realization and delivery of these deriving from purchase price allocations, as well as other income and expenses that are projects enjoys the highest priority. In the future, the DTC segment expects to secure follow-up The key financial performance indicators used by the executive management to manage the nonrecurring in nature or are incurred outside the normal course of business, as well as projects in core Exyte markets from these key clients, which will have a positive impact on the Exyte Group, which are also used to manage the regions, are order intake, sales, as well as COVID 19-related effects. segment’s business development in the coming years. adjusted EBIT, or respectively, the adjusted EBIT margin. Adjusted EBIT is used to determine profitability, excluding irregular, nonrecurring positive or Notwithstanding the end of the COVID lockdowns, the industry sector continues to show Order intake negative effects, thus ensuring comparability between different reporting periods. signs of long-term, stable growth. A consequence of the pandemic is that many companies are An order forms part of the order intake when all prerequisites for an effective client contract increasingly reliant on working from home. This significantly increases the amount of data traffic. have been fulfilled. Specifically, this means that: Adjusted EBIT margin Available data center capacities are being strained to an even greater extent. Existing capacities The adjusted EBIT margin is defined as the relationship between the adjusted EBIT and sales. need to be expanded or new data centers built in order to cope with the increasing data volumes (i) A binding order document has been signed by the client and by Exyte, in which the This key indicator is used to compare operating profitability between different segments and and to avoid system outages. scope of the services to be performed is clearly defined; over time. The continuing digitalization of companies continues to have a strong impact on the global (ii) A price has been fixed or can be determined by reference to the terms of the contract; Further important financial performance indicators are the order backlog, the gross profit, demand for data center capacity. The increasing spread of data-based applications, such as, for and the gross profit margin. example, smart devices, autonomous vehicles, and robotics, as well as the use of technology, (iii) A time schedule for the delivery of goods or the performance of the services has been such as artificial intelligence and the Internet of Things, is leading to a rapid increase in the defined; Order backlog volume of data. The associated need for data processing close to the point-of-use has led to an The order backlog represents value of the Exyte Group’s unprocessed orders at the end of increased demand for data centers in metropolitan areas, i.e. near major cities and urban centers (iv) The terms and conditions governing the business transaction have been defined and the respective reporting period. It is derived from the order backlog at the beginning of the such as Frankfurt am Main, Paris, or Madrid. Large storage and computing capacities can ensure agreed; and reporting period, plus the order intake, less the sales recognized in the period reported. In very short response times for local critical applications, such as autonomous driving, industrial addition, adjustments for orders canceled or reduced during the period reported need to be production, or other solutions based on artificial intelligence. The number of such projects and (v) The financing of the transaction by the client is not subject to any constraints. taken into account, as well as any effects arising though fluctuations in currency exchange future project opportunities increased last year. rates. The order backlog shows the orders that are still unprocessed at a certain point in time The key order intake performance indicator is used to measure Exyte’s success in acquiring and provides indications for the allocation of resources required to process the orders. This key In the Data Centers segment, Exyte is engaged in an environment with great growth potential, new business compared to previous reporting periods. performance indicator is also used in the budgeting and forecasting process, in order to predict which offers good opportunities for the further growth of the Group in the coming years, due to the development of sales for the current year and in subsequent years. sustained digitalization momentum. Sales A key element of Exyte’s strategy is profitable organic sales growth. The development of sales Gross profit serves as a benchmark to measure this. For a detailed presentation of the different types of The gross profit is determined as the net amount of sales and the cost of sales. The earnings sales generated by the Exyte Group and the method of sales recognition, please refer to the figure provides information as to profitability, taking only the sales-related costs into account. disclosures made in the section of the notes to the consolidated financial statements entitled “Accounting Principles.” Gross profit margin The gross profit margin defines the relationship between the gross profit and sales. This key Adjusted EBIT performance indicator is used to measure the profitability of the operational business. Adjusted EBIT is defined as the result from operating activities (EBIT) adjusted for income or expenses deriving from irregular, non-recurring effects. EBIT adjustments result from income or expenses related to the Exyte Group’s reorganization (in particular, from write-downs), Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 14 Exyte Business development Particularly due to the increase in the gross profit, adjusted EBIT increased, by €153.0 million or Developments in the regions 58.1%, to a level of €416.3 million (2021: €263.3 million). The adjusted EBIT margin was 5.6% and At a level of €7.6 billion, Exyte’s order intake in 2022 was only slightly lower than the record level was thus higher than that of the previous year’s level of 5.4%. Exyte supplies its clients in all key markets at both global and local levels. The focus on specific achieved in the previous year (2021: €8.1 billion). regions is determined by the clients’ capital expenditure investment plans (“follow the client Comparison of actual to planned business development approach“). In 2022, Exyte GmbH significantly increased its sales, by €2.5 billion or 52.2%, to a level of Exyte was able to achieve or exceed all of the forecasts that had been made for 2022. €7.4 billion. Neither the COVID pandemic nor the war in Ukraine had any significant impact on the The following table shows the important key figures and ratios for the regions. Due to the development of Exyte’s sales in financial year 2022. Sales to the semiconductor industry sector Comparison of actual to planned business development significant increase in sales for the APAC region, its share of total sales (before elimination of in the business segment Advanced Technology Facilities continue to be the main driving force for consolidation adjustments between the regions) increased significantly in 2022 and reached a Exyte’s sales. Forecast for Change 2022 new level of 55.2% (2021: 34.5%). Thus, the APAC region was the Group’s strongest sales region 2022 Actual 2022 2021 vs. 20211 in 2022. The EMEA region’s share of total revenue sales (before elimination of consolidation The increase in sales is attributable to the €2.5 billion higher sales generated in the APAC region adjustments between the regions) decreased to a level 27.4% (2021: 48.6%), as a result of and resulted in particular from major projects in Singapore, Malaysia and China. Changes in sales Order intake Nearly €7 billion €7.6 billion €8.1 billion –6.8% declining sales in 2022. levels in the other regions balanced each other out during financial year 2022. Approx. Sales €6 billion €7.4 billion €4.9 billion +52.2% The analysis of sales by region is as shown below: As of December 31, 2022, the order backlog amounted to €6.8 billion and was thus at roughly the same level as in the previous year (December 31, 2021: €6.7 billion). The unchanged high order Adjusted EBIT2 Increased €416.3 million €263.3 million +58.1% backlog provides an excellent basis for the future business development of the Exyte Group. Slightly Adjusted EBIT margin increasing 5.6% 5.4% +0.2 pp In financial year 2022, the gross profit increased significantly, by €199.6 million or 51.2%, to a level of €589.0 million (2021: €389.4 million). The gross profit margin was unchanged in comparison to 1 Percentages are calculated based on figures denoted in millions. 2 Please refer to the “Financial Performance” section for further details concerning adjustments to the the previous year at a level of 8.0%. reported EBIT. ## Important key figures/ratios by region1 Sales by region 2022¹ in € million in € million (previous year) APAC EMEA AMER T&S in % 2022 2021 2022 2021 2022 2021 2022 2021 T&S AMER Order Intake 4,055 4,543 1,839 2,812 961 380 1,063 563 775 (427) 560 (423) 10.1 (8.5)  7.3 (8.4)  Order backlog 3,971 4,157 1,669 1,959 688 274 740 435 Sales 4,239 1,732 2,109 2,441 560 423 775 427 EMEA APAC Gross profit 346 178 140 147 15 11 93 52 2,109 (2,441) 4,239 (1,732) Gross profit margin 8.2 % 10.3 % 6.6 % 6.0 % 2.7 % 2.6 % 12.0 % 12.1 % 27.4 (48.6) 55.2 (34.5)  ## Adjusted EBIT 300 150 100 100 –7 0 69 33 Adjusted EBIT margin 7.1 % 8.7 % 4.8 % 4.1 % –1.3 % 0.0 % 8.9 % 7.8 % 1 The figures are shown before any consolidation adjustments. Effects deriving from consolidation eliminations between the regions are not considered and figures for Exyte GmbH and Exyte Management GmbH 1 Before consolidation of the regions. are not included. Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 15 Exyte ## APAC EMEA AMER The order intake for the APAC region was €4,055 million and reduced by €488 million in The order intake in financial year 2022 for the EMEA region amounted to €1,839 million The order intake in the AMER region increased significantly in financial year 2022 to a level of comparison to the record order intake for the previous year (2021: €4,543 million). The largest (2021: €2,812 million) and thus declined by €973 million. The reduction was predominantly due €961 million (2021: €380 million). This was mainly due to further incoming orders from an ongoing project, with a contract value of €1,100 million, was awarded to Exyte in Malaysia by a major to lower incoming orders deriving from a semiconductor project in Ireland, which reduced by major project in the Advanced Technology Facilities business segment, which amounted to some client operating in the semiconductor industry sector. In addition, the Advanced Technology €1,500 million, due to the fact that the project is in the end phase of its execution. Counteracting €700 million. Facilities business segment won two further major projects with respective order totals of above effects derived in particular from projects in Austria (with a volume of just under €290 million) €700 million in China and just under €600 million in Singapore. In the Data Centers business and in Israel (with a volume of some €160 million) in the Advanced Technology Facilities business At a level of €560 million, sales in the AMER region in financial year 2022 exceeded those of the segment, a project was won in Taiwan with an order volume of almost €170 million. segment, as well as a project in Denmark (with a volume of some €170 million) in the Data previous year by €137 million (2021: €423 million). A major project that had commenced in the Centers business segment. previous year was a significant contributing factor. Sales in financial year 2022 increased significantly to a level of €4,239 million (2021: €1,732 million). This was especially due to sales increases in Singapore, Malaysia and China, which particularly Sales generated in the EMEA region declined by €332 million to a level of €2,109 million At a level of €15 million, the gross profit in financial year 2022 was €4 million above the level resulted from the handling of major projects. (2021: €2,441 million). The main reason for this were the lower sales for the semiconductor that had been achieved in the previous year (2021; €11 million). This was due to positive volume project in Ireland, which could not be fully compensated by growth in sales from other projects. effects deriving from the higher sales. At a level of 2.7%, the gross profit margin was at nearly the The gross profit increased significantly in financial year 2022, by €168 million to a level of same level as that achieved in the previous year (2021: 2.6%). €346 million (2021: €178 million). Positive volume effects, deriving from higher sales, were partially The gross profit in financial year 2022 reduced slightly, from €147 million to €140 million. Volume offset by the lower gross profit margin. This fell, in comparison to the previous year, from a level of effects, deriving from the lower level of sales were compensated by an improved gross profit The AMER region generated an adjusted EBIT of –€7 million (2021: €0 million) with an adjusted 10.3% to 8.2%. The main reason for this was a change in the margin structure due to the higher margin, which increased to a level of 6.6% (2021: 6.0%). EBIT margin of –1.3% (2021: 0.0%). The decline in the adjusted EBIT, despite the slight proportion of major projects. improvement in the gross profit margin, was particularly due to loss allowances and a slight At a level of €100 million, the adjusted EBIT generated for the EMEA region was at the same increase in administration and selling costs. The APAC region generated an adjusted EBIT of €300 million in financial year 2022 level as in the previous year, despite the slightly lower gross profit. The adjusted EBIT margin (2021:€150 million). The increase by €150 million was predominantly due to the higher gross increased from 4.1% to 4.8%. T&S profit, which increased by €168 million. A slight counteracting effect derived from an increase in At a level of €1,063 million, the order intake for T&S in financial year 2022 was significantly administration and selling costs, amounting to €15 million, which resulted from the adaptation of above that of the previous year (2021: €563 million). €268 million of the overall increase of cost structures to cope with the increased sales volume. The adjusted EBIT margin decreased €500 million was due to the incoming orders generated by the CPS Group, which was acquired from 8.7% to 7.1%, mainly due to the decline in the gross profit margin. as of November 1, 2021 so that the figure for the previous year only includes a period of two months. The remaining increase of €232 million was particularly due to orders for service business generated by T&S (€204 million). Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 16 Exyte Sales generated by T&S also increased in financial year 2022, from a level of €427 million to Advanced Technology Facilities Data Centers €775 million. €172 million of the total increase in sales, which amounted to €348 million, resulted The order intake in 2022 for the Advanced Technology Facilities business segment amounted The order intake in the Data Centers business segment increased in financial year 2022 to a from the higher sales contribution made by the CPS Group. to €6,506 million (2021: €7,270 million) and thus reduced – in comparison to the record order level of €415 million (2021: €305 million). This was particularly due to two major projects for the intake that had been achieved in the previous year – by €764 million. Exyte was able to win new construction of data centers in Denmark and Taiwan. The gross profit increased from €52 million to €93 million, mainly due to the higher volume of large-volume projects in the semiconductor industry sector – especially in Malaysia, China, and business. At a level of 12.0%, the gross profit margin in financial year 2022 was roughly at the Singapore. In addition, further incoming orders from ongoing semiconductor projects in the USA Sales generated by the Data Centers business segment also increased significantly to a level of same level as in the previous year (12.1%). and Ireland are also included. Orders for the latter project reduced significantly in comparison to €288 million (2021: €180 million). The main contributions to sales came from major projects in the previous year, as the project is in the end phase of its execution. Israel and Malaysia. T&S achieved an adjusted EBIT of €69 million (2021: €33 million). The adjusted EBIT margin was 8.9% and increased in comparison to that of the previous year (2021: 7.8%). This increase was Sales in the Advanced Technology Facilities business segment increased significantly in 2022, At a level of €18 million, the gross profit was at the same level as in the previous year. Volume particularly due to the inclusion of the CPS Group for the whole year, as their EBIT margin is to a level of €6,430 million (2021: €4,246 million). This was primarily due to higher project sales in effects deriving from the higher sales were offset by counteracting effects due to the reduced higher than the average for the segment. Singapore and Malaysia. As had been the case in the previous year, the main contribution to sales gross margin, which reduced to 6.3% (2021: 10.1%). came from the major project in Ireland. Regional Specific Business At a level of 8.6%, the gross profit margin was more or less at the same level as had been The order intake in the Regional Specific Business segment increased, from a level of €46 million Development of the business segments achieved in the previous year (2021: 8.7%). in 2021 to €57 million in 2022. The higher order intake was mainly due to projects in Israel in the defense industry market segment. Sales development in the business segments Biopharma & Life Sciences As had already been the case in the previous year, the Advanced Technology Facilities business The order intake in the Biopharma & Life Sciences business segment increased in financial year Sales in the Regional Specific Business segment reduced slightly to a level of €75 million segment made the biggest contribution to the total sales of Exyte during financial year 2022. 2022 to €581 million, following on from €492 million in the previous year. The largest project (2021: €81 million). The share of sales decreased slightly, from 87.3% to 86.9%. awarded to Exyte in the pharmaceuticals and biotechnology sector was located in Germany and had a contract value of just under €140 million. The gross profit/loss (–) improved significantly from –€30 million to €3 million. The gross loss in the previous year derived from a reduction in the margin of a project in France. Sales in the Biopharma & Life Sciences business segment increased significantly to a level of €610 million (2021: €357 million). The main sales drivers in 2022 were major projects in Singapore and Malaysia. At a level of €16 million, the gross profit was lower than that achieved in the previous year (2021: €33 million). Positive volume effects deriving from the higher sales were negatively compensated by the lower gross profit margin, which reduced from 9.1% to 2.6%. This was particularly due to a change in the project portfolio with a higher proportion of low margin projects. Sales by business segment 2022 in € million (previous year) in % ## Important key figures/ratios by business segment Data Centers Regional Specific Business in € million 288 (180) 75 (81) Advanced Technology Facilities Biopharma & ­Life Sciences Data Centers Regional Specific B ­ usiness 3.9 (3.7) 1.0 (1.7) 2022 2021 2022 2021 2022 2021 2022 2021 Order intake 6,506 7,270 581 492 415 305 57 46 Biopharma & Life Sciences 610 (357) Order backlog 5,917 5,854 524 533 347 222 60 85 8.2 (7.3) Sales 6,430 4,246 610 357 288 180 75 81 Advanced ­Technology Facilities 6,430 (4,246) Gross profit 552 369 16 33 18 18 3 –30 86.9 (87.3) Gross profit margin 8.6 % 8.7 % 2.6 % 9.1 % 6.3 % 10.1 % 4.2 % –36.9 % Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 17 Exyte Financial Performance Other operating income reduced by €1.2 million in comparison to the previous year, to a level The reconciliation to the adjusted EBIT is presented in the following table: of €18.6 million (2021: €19.8 million). €5.6 million of the reduction was due to the lower figure for Exyte’s gross profit (sales less cost of sales) for the reported 2022 financial year increased income deriving from the reimbursement of COVID-related costs, which resulted from COVID- substantially, by €199.6 million or 51.2%, to a level of €589.0 million (2021: €389.4 million). This support programs in Asia. In addition, gains on the disposal of intangible assets and property, Reconciliation to the adjusted EBIT was due to the significant increase in sales. As had been the case in the previous year, a gross plant and equipment reduced by €1.7 million, which is mainly due to the non-recurrence of In €million margin of 8.0% was achieved. income deriving from a sale-and-lease-back transaction (the building in Renningen) that was 2022 2021 disclosed in the previous year. A counteracting effect derived from the €4.0 million higher gain on Selling costs increased by 24.8% in comparison to the previous year, to a level of €50.5 million the disposal of consolidated entities, which resulted from the deconsolidation of Exyte Rus, LLC, Result from operating activities (EBIT) 397.0 257.6 (2021: €40.4 million) due to the increase in business volumes. They mainly consist of costs of Moscow, Russia, an entity that was liquidated in financial year 2022. Furthermore, the amount of Adjustments 19.3 5.7 personnel and materials or services incurred by the sales organization, expenses in connection income deriving from the charge-out of expenses to third parties and from leases increased by with the preparation of proposals for projects that were not awarded, or could not be passed €2.6 million. Thereof: on to clients, as well as marketing expenses, public relations costs, and advertising expenses. Impact on earnings deriving from purchase price Furthermore, amortization and depreciation charges that are attributable to the sales area are Other operating expenses increased by €1.2 million in the year reported, to a level of allocations 7.7 1.2 also included. €18.4 million (2021: €17.2 million). The main cause for this were €5.3 million higher expenses deriving from the recognition of impairment losses, which were primarily attributable to Costs for restructuring measures 3.6 1.9 Administration costs amounted to €141.7 million (2021: €94.0 million) and increased by a US-American client. A counteracting effect arose from the reduction in COVID related Transaction costs relating to (planned) business €47.7 million, or 50.7%, in comparison to the previous year. They mainly include costs of costs by €3.3 million, which were particularly incurred for the continued payment of salaries acquisitions 2.3 5.4 personnel and materials or services incurred by administrative functions, as well as amortization during shutdown periods in Singapore and are offset by corresponding income from and depreciation charges that are attributable to the administration area. €11.8 million of the government support programs. In addition, these costs also include expenses for hygiene Costs deriving from transaction-related bonuses 2.1 0.0 increase was due to inclusion for the first time of the CPS Group for a full year in the consolidated measures and additional accommodation costs incurred because of government quarantine COVID-related income and expenses 0.1 –2.4 financial statements, following its acquisition as of November 1, 2021. The remaining increase regulations (especially in Asia). We also refer to the explanatory comments concerning other of €35.9 million was particularly due to the measures taken to secure the general strategy for operating income. Income deriving from the sale-and-lease-back growth, as well as the implementation of a new ERP system. We refer to the further information transaction for the building in Renningen 0.0 –1.4 presented in the report on opportunities concerning the strategy for growth. At a level of €397.0 million, the result from operating activities (EBIT) in financial year 2022 Income deriving from the reversal of allowances set up was considerably higher, by €139.4 million or 54.1%, than that of the previous year against receivables due from Exyte Group companies (2021: €257.6 million). As explained in the section “Key financial performance indicators,“ that are not included in the consolidation, due to the executive management assesses Exyte’s earnings performance on the basis of adjusted restructuring measures 0.0 –1.1 EBIT. This amounted to €416.3 million in financial year 2022 (2021: €263.3 million) and was also considerably higher, by €153.0 million or 58.1%. Costs deriving from other non-recurring items (e.g. one-time IT costs, legal and consulting costs, or other expenses) 3.5 2.1 Adjusted EBIT 416.3 263.3 Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 18 Exyte The net income from financing activities for the 2022 year reported was positive at a level As of December 31, 2022, the total assets amounted to €3,958.2 million and had thus increased (€2.0 million), which exceeded charges for depreciation (€31.4 million). The additions mainly result of €7.7 million, (2021: –€1.4 million). €6.9 million of the overall €9.1 million improvement in the by €1,051.1 million in comparison to the figure as of December 31, 2021 (€2,907.1 million). The from leasing contracts concluded for real estate in financial year 2022. net income from financing activities was due to the higher net balance of interest income and main reason for this was the both the increase in current assets (€961.2 million) and non-current interest expenses, which resulted in particular from the higher interest earned on credit balances, assets (€89.9 million) Inventories, amounting to €90.4 million (December 31, 2021: €55.4 million), predominantly due to the general increase in interest rate levels. The remaining improvement is driven by the resulted from entities that are assigned to the T&S segment and only to a limited extent from increased currency result. Intangible assets amounted to €373.6 million (December 31, 2021: €338.7 million). the Group’s project-related business. Consolidated earnings before tax (EBT) amounted to €404.8 million and were thus €307.8 million of this amount is attributable to goodwill (December 31, 2021: €280.9 million). The advance payments made of €252.0 million (December 31, 2021: €125.0 million) mainly €148.6 million above the level that had been achieved in the previous year (2021: €256.2 million). €17.4 million of the total increase in goodwill, amounting to €26.9 million, derives from the result from advance payments to sub-suppliers in the project business sector. The income tax expense amounted to €55.8 million (2021: €39.7 million); this equates to a acquisition of Airgard, Inc. In addition, an adjustment to the goodwill arising from the acquisition slightly lower overall Group tax rate of 13.8% (2021: 15.5%). Further explanations concerning of the CPS Group, which was completed in the previous year, resulted in an increase by The figure for contract assets increased by €167.7 million at the reporting date, to a level of the tax position are to be found in the notes to the consolidated financial statements in Note 8 €1.8 million, following the final determination of the purchase price in financial year 2022. €456.1 million. Trade receivables also increased, by €141.5 million to €835.5 million. The overall (“Income tax”). Goodwill also increased by €7.7 million due to currency translation effects. increase of the contract assets and trade receivables, by €309.2 million or 31.5%, was due to the higher business volumes. After taking income tax into account, the resultant consolidated net profit amounted to Other intangible assets amounted to €65.8 million (December 31, 2021: €57.8 million). Assets €349.0 million and was €132.5 million higher than the consolidated net profit for the previous year of €13.4 million were added during financial year 2022, of which €13.0 million was mainly due to Other current financial assets amounted to €51.5 million (December 31, 2021: €23.3 million) (2021: €216.5 million). additions of other intangible assets (mainly customer relationships, technology-based intangible and thus increased by €28.2 million. The main reason for this resulted from short-term time assets and the brand name), in connection with the acquisition of Airgard, Inc. In addition, positive deposits made by Exyte GmbH with banks, amounting to €23.0 million. In addition, the figure for effects of €2.3 million derived from currency translation. A counteracting effect of €7.7 million derivative financial instruments disclosed as current financial assets increased by €9.1 million. Assets and liabilities arose from scheduled amortization charges for the financial year. The increase in other current assets by €12.9 million, from €24.8 million to a level of €37.7 million, Due to the nature of the Group’s business activities, the assets situation is mainly characterized The figure for property, plant and equipment increased by €12.9 million in financial year 2022, was due to a higher figure for refundable VAT, which increased by €12.1 million. by the current assets. Current assets make up 84.0% (December 31, 2021: 81.3%) of the total to a level of €51.3 million. The increase is due to the fact that the asset additions of the financial assets. The current assets are subject to fluctuation depending on the volume of contracts, year (€24.4 million, of which €0.4 million derived from the acquisition of Airgard, Inc.) and positive As of December 31, 2022, the Group had available cash and cash equivalent balances of the project mix and the amount of advance payments that customers have made in respect effects deriving from currency translation (€0.8 million) were offset by lower asset disposals €1,592.4 million (December 31, 2021: €1,148.9 million). The increase in cash and cash equivalents of ongoing projects. In a year-on-year comparison, the relative share of the non-current (€0.7 million) and depreciation charges (€11.6 million). of €443.5 million is detailed in the explanations concerning cash flow development. As in the assets reduced slightly from 18.7% to 16.0%. In relation to the figure for total assets, Exyte’s previous year, unutilized cash credit lines exist, amounting to €10.0 million. non-current assets (particularly intangible assets, property plant and equipment, right-of-use Right-of-use assets deriving from leases amounted to €129.5 million (December 31, 2021: assets, and deferred tax assets) continue to be relatively less significant. €98.0 million). The increase of €31.5 million results from additions in the financial year €213.8 million of the increase of €1,051.1 million in total equity and liabilities derives from the (€60.3 million, of which €3.3 million resulted from the acquisition of Airgard, Inc.), positive increase in equity. In addition, current and non-current liabilities increased by €807.7 million and effects deriving from currency translation (€0.6 million), and contract modifications €29.6 million respectively. Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 19 Exyte The non-current assets were covered by equity and non-current liabilities to an extent of Trade payables increased at the year-end closing date by €679.0 million, from €1,228.2 million Development of working capital 127.4% (2021: 103.7%). to €1,907.2 million. The increase was primarily due to higher usage of sub-contractor services. in € million 31.12.2022 31.12.2021 The increase in equity by €213.8 million, from a level of €447.8 million to €661.6 million, is In a manner analogous to the development of rights of use assets and non-current lease primarily due to the consolidated net profit of €349.0 million for financial year 2022. In addition, liabilities, the current lease liabilities also increased by €5.6 million, from €22.9 million to Inventories and advance payments made 342.3 180.5 equity increased by €14.8 million, in particular due to effects deriving from changes in currency €28.5 million, in financial year 2022. Trade receivables 834.6 691.6 exchange rates of €15.8 million. The €150.0 million distribution to the sole shareholder in financial year 2022 had a counteracting effect. Contingent liabilities, deriving from guarantees and sureties provided by the Exyte Group, Trade payables –1,907.1 –1,227.5 increased by €187.4 million to €449.7 million due to the significant increase in project volumes. Trade working capital –730.2 –355.4 The equity ratio was 16.7% (December 31, 2021: 15.4%). Financing and working capital management Contract assets 456.1 288.4 The increase in non-current liabilities, by €29.6 million, is mainly due to higher non-current Exyte finances its ongoing business activities through working capital. The Group is independent Contract liabilities –993.1 –906.9 lease liabilities, which increased by €29.0 million. The non-current and current lease liabilities are of external forms of financing; borrowing from banks does not play a role. offset by corresponding rights of use on the assets side. The increase is mainly due to new lease Working capital deriving from construction contracts –537.0 –618.5 contracts for real estate concluded in financial year 2022. Within the scope of its business activities, Exyte concentrates on the engineering and realization Net working capital relating to third parties –1,267.2 –973.9 of plant projects and project management, as its core business. The Group uses a large number At a level of €7.4 million (December 31, 2021: €10.5 million), the figure for provisions for pensions of subcontractors and suppliers to carry out tasks in different trade areas. As work on the Receivables from associated entities and was below that of the previous year; this was particularly due to the higher level for interest rates. project progresses, trade receivables and contract assets are counterbalanced by client advance non-consolidated subsidiaries 0.9 2.4 payments, which are used to finance the projects and are reported under contract liabilities, and Liabilities to associated entities and Other current provisions increased by €23.3 million, from €78.5 million to €101.8 million. The trade payables. Therefore, for the vast majority of projects, no additional financing is required. non-consolidated subsidiaries –0.1 –0.7 reason for this was an increase of €13.6 million in employee-based provisions (in particular for As a rule, the projects show positive liquidity from their commencement. The executive performance-related remuneration and bonuses). management monitors the development of the working capital on an ongoing basis. Net working capital relating to associated entities and non-consolidated subsidiaries 0.8 1.7 Contract liabilities increased in financial year 2022 by €86.2 million, from €906.9 million to a level The following table shows the working capital as of the year-end reporting date as of Net working capital of the Group –1,266.4 –972.2 of €993.1 million. The increase resulted mainly from higher client payments for ongoing projects. December 31, 2022 and as of the previous year-end: As a percentage of sales1 –17.1 –20.0 1 Based on sales of €7,403 million for 2022 and €4,865 million for 2021. Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 20 Exyte It proved possible to improve the Group’s negative net working capital by –€294.2 million in Liquidity management had derived from cash inflows resulting from the sale-and-lease-back transaction involving the financial year 2022, from a level of –€972.2 million to –€1,266.4 million. The working capital ratio in production building in Renningen (€34.7 million). relation to the consolidated sales revenue was –17.1% (December 31, 2021: –20.0%). As a general rule, Exyte GmbH handles the Group’s financing in its role as the parent company of the Group. In the context of its liquidity management activities, any surplus funds within the The cash flow from financing activities increased significantly by –€156.2 million in comparison to A significant driver for this development was the trade working capital, which improved by Group are deposited with the parent company and loans are granted to subsidiaries, as required. the previous year, from –€20.5 million to –€176.7 million. The distribution to the sole shareholder –€374.8 million in financial year 2022, from –€355.4 million to a new level of –€730.2 million. This The local lead companies are responsible for the financing function within the subgroups in Asia was responsible for –€150.0 million of this increase. In addition, payments for the redemption of is largely attributable to the higher level for trade payables, the increase in which more than and America; the Group’s parent company provides this function itself in Europe. finance lease liabilities amounted to –€27.8 million (2021: –€21.0 million). compensated the increase in trade receivables. As had been the case in the previous year, trade payables significantly exceeded trade receivables and inventories. After taking exchange rate effects on cash and cash equivalents, amounting to €14.4 million, Cash flow development into account, the cash and cash equivalents increased by €443.5 million, from €1,148.9 million to The decrease in the balance of working capital deriving from construction contracts by €1,592.4 million, in the year reported. €81.5 million, from a level of –€618.5 million to –€537.0 million, had a counteracting effect. This The positive cash flow from operating activities increased by €56.4 million in comparison to the was primarily due to a higher level of contract assets resulting from ongoing project business. previous year, to €686.5 million. This was primarily due to the increase by €148.6 million in the consolidated earnings before tax (EBT). A counteracting effect derived in particular from the Summary of the economic situation Overall, this resulted in negative net working capital deriving from third parties of €85.4 million lower positive effect deriving from the change in working capital. –€1,267.2 million, which shows an improvement of –€293.3 million in comparison to the previous Global economic development in 2022 was massively influenced by the effects of the COVID-19 year (December 31, 2021: –€973.9 million). The cash flow from investing activities in financial year 2022 amounted to –€80.7 million, pandemic and the war in Ukraine. The effects on the business development of Exyte in financial compared to –€185.3 million in the previous year, and thus reduced considerably, by €104.6 year 2022 were relatively insignificant, due to the business sectors in which the Exyte Group is The net working capital deriving from associated entities and non-consolidated subsidiaries million. In financial year 2022, it included in particular cash outflows for investments in intangible active. Overall, the Exyte Group continued to develop positively in 2022, even under the difficult amounted to €0.8 million (December 31, 2021: €1.7 million) and is thus only of minor importance assets and property, plant and equipment (–€24.5 million), for the acquisition of the subsidiary, surrounding conditions, and was able to achieve or exceed its forecast targets. Sales increased for the net working capital position of the Group, as was also the case in the previous year. Airgard, Inc. (–€32.5 million), and for time deposits made with banks (–€23.0 million). In the significantly, from €4.9 billion to €7.4 billion. The adjusted EBIT also increased considerably, from previous year, it had been predominantly impacted by a cash outflow of –€210.4 million for the €263.3 million to €416.3 million. As of the year-end reporting date, the Group continues have a   acquisition of the CPS Group. In addition, cash outflows for capital investments in intangible high level of available liquid resources, which account for 40.2% (December 31, 2021: 39.5%) of assets and property, plant and equipment had amounted to –€9.6 million. A counteracting effect total assets. Exyte finances itself and its growth through its operational business activities. Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 21 Exyte HUMAN RESOURCES As of December 31, 2022, the Exyte Group employed 8,965 employees, expressed as full-time The increase in the number of employees in the AMER segment, by 110, or 27.0%, is due to equivalents (FTE), representing an increase, by 1,521 employees or 20.4%, in comparison to the project-related recruitment and the expansion of central functions within Exyte U.S., Inc. number as of December 31, 2021 (7,444 employees) The number of employees in the APAC segment increased by 840, or 26.4%. This is particularly due to the recruitment of employees for operational business purposes for the national Employee numbers by regional segment (FTE) companies in Malaysia, China and Singapore. 31.12.2022 31.12.2021 In the EMEA segment, the number of employees increased by 137, or 10.4%. The increase is predominantly due to the recruitment of employees in Germany, Italy and Israel. AMER 517 407 APAC 4,027 3,187 The number of employees in the T&S segment increased by 404, or 16.9%. Part of the increase resulted from the 42 employees who were added within the context of the acquisition of Airgard, EMEA 1,460 1,323 Inc. Adjusted for this acquisition-related increase, the employee numbers in the T&S segment T&S 2,795 2,391 increased by 362, or 15.1%. 147 of the remaining increase in employee numbers derives from the acquisition of the CPS Group and the build-up of employee numbers in the TECH sector Exyte Management GmbH and Exyte GmbH 166 136 (108 employees) and the service sector (107 employees). Total 8,965 7,444 The number of employees of Exyte Management GmbH and Exyte GmbH increased in total by 30, or 22.1%; this is due to the further expansion of the central functions. Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 22 Exyte RISKS, OPPORTUNITIES, AND FORECAST RISKS Risk management system Risk management principles within Exyte Materiality thresholds The risk management system represents a significant integral component of Exyte’s corporate Exyte‘s risk management system is there to support the decision-making process, the Exyte has defined risk-related materiality thresholds that are dependent on the degree of risk governance. Its objective is to continually identify, assess, treat, monitor, and report potential achievement of business objectives, and to help use resources effectively. It is based on the tolerance. In view of the profitability and cash-oriented manner in which Exyte is managed, EBIT, risks that could threaten Exyte’s business objectives or hamper its strategic initiatives. Risks following principles: as well as cash and cash equivalents, have been identified as the key parameters that serve as are defined as possible events or developments that could have an adverse impact on Exyte’s benchmarks to determine these materiality thresholds. business development and its medium-term plans. • Every business activity entails viable risks that in principle have to be identified, assessed, and communicated. Exyte distinguishes between two types of materiality thresholds: In accordance with the COSO (Committee of Sponsoring Organizations of the Treadway Commission) framework, Exyte’s risk management system encompasses all risk identification, • Risk management has the objective of ensuring compliance with rules and regulations, as • A reporting threshold for the identification and assessment of risks: any potential financial assessment, treatment, monitoring, and reporting measures. The risk management process, well as making risks transparent by implementing a systematic risk management process. impacts in excess of €1 million on EBIT, or cash and cash equivalents, are no longer considered including its instruments and all underlying principles and guidelines, also forms part of the to be immaterial risks. When this level is reached or exceeded, risks have to be addressed in the system. The risk management system is closely aligned to processes that are designed to • Risk management is a key component of our business processes. It is involved in all business risk assessment process and by means of regular risk reports. determine strategies, achieve business objectives, and safeguard assets and the value-added activities. chain. Unlike early warning systems, it addresses all significant risks, and not just grave risks that • Escalation criterion for ad-hoc reporting: a potential financial impact of €10 million on EBIT, threaten the existence of the business as a going concern • Exyte’s core values provide the fundament for its risk management system. or cash and cash equivalents, represents a medium level of financial impact. If this threshold is exceeded during the monitoring phase, then the associated risks must be reported • The risk management function is responsible for all definitions, rules, and procedures that immediately to the Head of Corporate Opportunity & Risk Management, the Executive are set out in the risk management framework, in order to facilitate the implementation of a Management, and the Supervisory Board. common understanding of the risks involved throughout the whole Group. • Every employee has the duty to proactively participate and support the risk management system. • The executive management is responsible for improving the culture of risk awareness within the organization and serves as a role model in this respect. Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 23 Exyte ## Risk management process Risk identification The risk management process outlined below, including the related regulations and guidelines, The various risk managers and the Business Partner Opportunity & Risk is applicable throughout the Exyte Group for purposes of risk identification, assessment, Management functions in the regions, business segments, and central treatment, monitoring, and reporting. functions identify risks by means of various measures such as by staging workshops, holding individual interviews, or by reviewing internal and The risk management processes within the Exyte organization are divided into five sets of external reports. Strategic risks that could affect the attainment of Exyte’s sub-processes: business objectives are identified at the regional or central management level with the support of the Head of Corporate Opportunity & Risk Management. Risk assessment SUB- RISK RISK RISK RISK RISK PROCESS IDENTIFICATION ASSESSMENT TREATMENT MONITORING REPORTING The process of risk assessment enables Exyte to prioritize identified risks and direct management’s attention to the most important matters. Furthermore, the risk assessment process provides a basis to define appropriate measures to handle and minimize the risks. Once the risk managers and the Business Partner Opportunity & Risk Management function have identified the risks in their areas of responsibility, they assess the risks in their area of responsibility with the CYCLE support of the Head of Corporate Opportunity & Risk Management. In the process, they apply the following evaluation criteria. SEMI-ANNUAL SEMI-ANNUAL EVENT-DRIVEN CONTINUOUSLY SEMI-ANNUAL Evaluation criteria Two dimensions are used to evaluate risks: The Head of Corporate Opportunity & Risk Management is responsible for Exyte’s standard • Changes to improve the efficiency of implemented controls; 1. Impact – i.e. the extent to which the occurrence of given risk could risk management process and for maintaining, and updating, the Corporate Opportunity & Risk affect the organization and the achievement of its objectives. Management Policy – at least once per year, or in the event of one of the following: • Changes related to legal or regulatory requirements; or 2\. Likelihood – i.e. the probability that the risk will occur within a • Technological changes; • Updated contractual obligations and external events. specified period of time. • Changes associated with business goals and processes; Risk managers, who are usually the heads of the regions, business segments, and corporate The Head of Corporate Opportunity & Risk Management regularly reviews departments, are tasked to assess their respective risks and report to the Head of Corporate and updates these evaluation criteria at least once a year. • Potential new threats; Opportunity & Risk Management, who also supports the efforts of the risk managers and the regional Business Partner Opportunity & Regional Risk Management function in their task of The potential impacts deriving from a risk are evaluated by the Risk monitoring risks. Management function from a quantitative (financial) perspective and from a qualitative perspective (i.e. risks impacting business objectives, reputation, business continuity, and relating to supervisory authorities). The financial perspective is the primary criterion for the evaluation Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 24 Exyte The impact scale ranges from one (very low) to five (critical): The likelihood classification scale ranges from one (remote) to five Risk Classification: (very probable): (>20 € million) Low 1\. VERY LOW: Medium Critical Does not impact daily performance or causes only insignificant 1. REMOTE: High financial losses. The event will occur only in exceptional cases (likelihood of one event Critical within a period of five to ten years). ## (>10 ≤20 € million) 2\. LOW: Minimal negative impact on daily business; the situation can be 2. UNLIKELY: brought under control immediately or would cause only minor The event could occur from time to time (likelihood of one event Severe financial losses. within a period of three to five years). ## (>5 ≤10 € million) 3\. MEDIUM: 3. POSSIBLE: IMPACT Causes medium disruptions to daily business or medium financial The event could occur occasionally (likelihood of one event within a loss. period of one to three years). Medium 4\. SEVERE: 4. LIKELY: Causes a temporary loss of business functionality and capability, The event could repeatedly occur (likelihood of one event within a (>1 ≤5 € million) severe injury or damage to reputation, but does not have long-term period of six to twelve months). or consequential impacts, or cause high financial loss. 5\. VERY LIKELY: Low 5\. CRITICAL: The event is expected to occur in most cases (likelihood of one event Causes massive financial loss or insolvency, reputational damage, or within six months). damage to relationships with stakeholders. (>0 ≤1 € million) The combination of the two evaluation dimensions, impact and likelihood, defines the overall risk classification, which is used to Very Low prioritize the identified risks, in order to enable Exyte to allocate its resources accordingly. As shown in the following diagram, each risk is classified as low, medium, high, or critical. Remote Unlikely Possible Likely Very Likely (≥1 ≤10 %) (>10 ≤30 %) (>30 ≤50 %) (>50 ≤70 %) (>70 %) LIKELIHOOD Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 25 Exyte ## Risk treatment Risk monitoring Risk classification by risk category The risk treatment process enables Exyte to determine appropriate risk mitigation measures for The risk managers are responsible for the continuous monitoring of risks in their area of Risk each type of risk. responsibility. This includes: Risk group Risk category classification Four important risk treatment measures are outlined below: • The identification of newly emerging risks or the recognition of a necessity to reassess Strategic risks External communication Low risk scenarios that have already been identified. Executive management Low 1\. Tolerate: One possible risk treatment strategy variant is to tolerate the risk in a situation where any additional activities that are required to combat the risk would not be eco- • Recognition of the necessity to treat a risk or to redefine the risk treatment measures Major initiatives Low nomically justifiable in relation to the potential consequences. A routine part of making to be taken, if the measures taken are ineffective. Market dynamics Medium business decisions is to consciously take a foreseeable and acceptable risk, by taking into account and evaluating the cost-benefit aspects with regard to the implementation or Planning and resource allocation Low omission of additional risk management activities. Risk reporting Research and development Low 2\. Terminate: Terminating risks means that activities should be terminated in cases where A risk report is submitted to the executive management on at least a semi-annual basis. The Operational Hazards Low additional risk-taking activities are not economical and the potential returns deriving from Head of Corporate Opportunity & Risk Management prepares a risk report based on the results risks Environment, health, and safety Medium the activities are not attractive in relation to the related risks involved. of consolidated risk assessments and associated risk treatments. In addition, ad-hoc updates on critical risks identified are reported directly to the executive management if they arise outside Project delivery Medium 3\. Treat: Risk reduction includes activities and measures that reduce the probability of a risk the semi-annual reporting cycle. Sales and marketing Medium occurring or minimize the severity of the impacts if the risk scenario does occur. Information technology Medium 4\. Transfer: Risk transfer includes activities and measures that transfer the responsibility for Group risk report for 2022 Employees and HR organization High managing the risks, or any liabilities that might derive from the financial consequences of risk scenarios, to a third party. For example, risks can be transferred to third parties Exyte was exposed to various risks in 2022. Although most of the risk scenarios in the portfolio Compliance Code of conduct Low contractually or with the help of insurance. were regarded as having been known beforehand, the risk assessments for the risk positions risks Legal risks Low were verified and, where necessary, updated. This was in particular the case for risks relating to Exyte’s operational business activities. Regulatory risks Low Financial risks Accounting and reporting Medium An assessment is made as to whether individual risks exist for a twelve-month forward period, commencing from the reporting date. The following section describes the most important risks. Liquidity and credit management Low They are valid for the entire Exyte Group and are based on a net risk assessment. The table below Sales cycles Low summarizes Exyte’s risk situation as of December 31, 2022, in all categories: Taxation Low Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 26 Exyte Based on the findings included in Exyte’s internal Group risk report for the second half of 2022, Project delivery reputation, competitive position and its operational processes could suffer due to cyber-attacks. the risks are described in the following section that may have a material impact on business Project delivery is an important risk management category within Exyte’s core business Exyte continuously invests in resources to improve its IT infrastructure and further reduce this objectives, activities, earnings, or on the organization’s reputation. These are risks that have been activities. Project-related risks may derive from various factors, such as high project complexity risk. designated to a risk classification of “medium” or “high.” or through short project durations. As Exyte is globally active, the identification and treatment of risks is usually handled within the regions, or respectively, at project level within the business Employees and HR organization segments. Of particular importance is the comprehensive management of subcontractors, in At present, the recruitment market for highly qualified employees is highly competitive. It is Strategic risks order to minimize risks deriving from the failure to meet deadlines or from cost overruns. Project therefore a challenge to recruit the right employees to fill vacancies. At the same time, given the teams, working together with the regional and strategic business segment management teams, current low unemployment rate and the competition in the targeted industry sectors across Market dynamics coordinate efforts to mitigate these risks. the individual regions, Exyte is also faced with a challenge to retain its capable and experienced In view of the changing market environment and volatile economic and political developments, employees. The risk of not being able to fill key positions and also that deriving from a high Exyte may be exposed to macroeconomic down cycles, resulting from political tensions that Sales and marketing turnover rate could jeopardize business processes, or respectively lead to a situation in which could arise in any of the geographic regions in which Exyte does business. In its role as a globally active organization, Exyte carries out projects in a number of different Exyte would be unable to take advantage of opportunities that present themselves. The HR geographic regions. In some cases, various projects may be delivered in different geographic organization and the senior management team are continually developing initiatives and planning The international semiconductor market is heavily dependent on global economic growth and regions for the same client. This presents a challenge for Exyte, as delays or problems in one measures to counteract these risks. Exyte’s client portfolio includes some of the biggest players in this market. Exyte’s targeted project could adversely affect the relationship with a global client and have a direct impact on clients continue to be exposed to short-term market fluctuations, which could prompt them to Exyte’s medium and long-term business development. reduce their capital expenditure investment. This would have a direct impact on Exyte’s project Financial risks environment. At the same time, taking on several projects for individual clients can result in a situation that our project portfolio becomes heavily dependent on such clients. This is especially the case Accounting and reporting in the semiconductor industry, where the number of major global players is limited. Exyte has Reliable and high-quality financial reporting is indispensable for the management of the Operational risks a structure of global business units in place to track all projects and interface with current and organization and provides the cornerstone on which stakeholders’ trust in Exyte is built. The potential clients, in order to support efforts to diversify our project and client portfolios, and thus preparation of compliant annual and consolidated financial statements and reliable forecasts Environment, health, and safety mitigate the risks in connection with individual clients. has the highest priority within Exyte. Particular attention is paid to the correct accounting Exyte’s business operations are exposed to the risk of employee injury or damage to important presentation of project-related business activities and other complex accounting issues. In assets, due to natural hazards or pandemics. Site-specific hygiene concepts, safety, and Information technology addition, it is necessary to ensure compliance with the applicable accounting regulations and to environmental plans, as well as business continuity plans, are in place to ensure the resilience of The security of business data and the IT infrastructure is extremely important for Exyte. There properly implement changes in accounting standards in due time, by ensuring that appropriate business operations and prevent injuries, or loss of life, caused by industrial accidents. is an observable global increase in events that threaten data security and the IT infrastructure. processes and systems are in place. In order to ensure that financial reports are properly These developments must be confronted by applying effective countermeasures, as Exyte’s prepared, monthly reviews are conducted at both project and management level. Furthermore, Projects are subject to potential direct threats deriving from environmental, safety, health, or IT systems play an important role in business processes, involving both internal and external internal control systems covering financial reporting processes are monitored and employees are quality-related hazards. Within this category, the selection of subcontractors that do not meet parties. The precautionary measures that Exyte has already taken cannot completely exclude provided with appropriate training. Exyte’s required standards constitutes a significant risk, as they could adversely affect the Exyte’s every external threat to the confidentiality, availability and reliability of the data that is used in overall performance. In order to minimize this risk, Exyte assesses and controls subcontractors such systems in the areas of development, project delivery, sales, or administration. Exyte’s at project level. Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 27 Exyte Risks related to financial instruments Note 24 in the notes to the consolidated financial statements provides more information on the Risks related to macroeconomic developments extent to which hedging instruments were deployed at the year-end reporting date, as well as In the course of carrying out its business activities, the Exyte Group is exposed to financial risks. about the related accounting. Ongoing armed conflicts, such as the one between Russia and Ukraine, and the potential risk of There is an inherent potential risk, deriving from receivables due from business partners or further political or military escalations in other regions of the world in which Exyte operates, may clients, that they could default on their payments (credit or default risk). In addition, the continuing COVID pandemic exposes the Exyte Group to further risks that have have a negative impact on clients’ capital expenditure investment decisions, supply chains, and an impact on its various different risk groups and risk categories. the availability of raw materials. Exyte takes preventive measures to address these possibilities. Since many of its clients, especially those with whom longstanding business relationships have These include, in particular, instruments for legal protection in the event of delays in delivery existed for many years, are major corporations with high credit ratings, Exyte’s credit risk is during the construction phase. An easing of the global economic situation is not expected in the limited, especially in its core business areas. In order to minimize the risk deriving from receivables Risks related to the COVID-19 pandemic short term, especially against the backdrop of a looming recession. Irrespective of this, due to the with new clients, credit information is obtained as part of the project approval process. Any duration of the initiation and delivery phases for major projects, Exyte is, to a large extent, resilient outstanding receivables are regularly monitored as part of the reporting system. The COVID-19 pandemic exposes Exyte to the risk that construction sites could be temporarily to short- and medium-term market fluctuations. completely or partially shut down, due to the imposition of official lockdown measures in Some receivables are exposed to foreign currency risks, which are partly hedged through use of individual jurisdictions. This could lead to delays in the delivery of projects, which could have derivatives. However, due to the fact that the subsidiaries are located throughout the world, the the effect that Exyte is possibly not completely able to meet its contractual obligations. Due Overall assessment of the risk situation majority of projects are processed in the functional currency of the respective subsidiary, so that to ongoing global pandemic, as well as the possible further spread of virus mutations, further the amount of currency hedging that needs to be taken into consideration within the Group is waves of infection cannot be ruled out. If further waves of infection do occur, then the risk of not The overall picture of the Group’s risk situation is made up of the individual risks presented in relatively low in relation to business volumes. achieving our financial forecasts is high. Potential risks derive, for example, from contractually all risk categories. agreed penalty payments, the postponement or discontinuance of projects, from increased Currency risks result from Exyte’s international business activities. The risks in this connection project costs that cannot be passed on to the client due to the respective contractual terms and In addition to the risk categories previously described, there are other unpredictable events are that future payment flows could alter to the detriment of Exyte because of fluctuations in conditions, and from an increased risk of insolvency for our subcontractors. Stricter safety and that can have a negative impact on the business activities, and thus on the Exyte Group’s currency exchange rates or that the amount at which receivables denoted in foreign currencies hygiene requirements, as well as the potential underutilization of resources or downtimes, could financial performance, financial position, and its assets and liabilities, as well as on its reputation. are recognized could decrease, or respectively, that the amount at which liabilities denoted in have a negative impact on our sales, gross profit margin and earnings. In particular, legal risks or unethical behavior on the part of partners and suppliers may have a foreign currencies are recognized could increase. Exyte mitigates such risks by deploying forward negative impact on its image, the environment, and the employees working for partners and exchange contracts and currency options. In processes controlled by the organization’s central Exyte has addressed this risk by including COVID clauses in its contracts. suppliers. As one of the basic principles for its business activities, Exyte pays particular attention Corporate Treasury function at the level of the parent company, or respectively by the regional to compliance with legal and ethical rules; also in the process of selection of its partners and treasury hubs in the APAC region and the USA, these risks are hedged by contracting a derivative In addition, the COVID-19 pandemic also affects the process of recruiting new, qualified suppliers. that matches the term and volume of the hedged item (micro hedge). The derivatives used for employees. The risk here is that Exyte will have difficulty to attract new talent, as the willingness hedging purposes are contracted with banks with a high credit rating. of potential candidates to change jobs could be reduced by the uncertain economic environment. In order to identify risks at an early stage and to successfully counteract the current and changing risk situation, Exyte monitors and continuously develops the established risk management system. In 2022, the Group’s overall risk situation increased slightly compared to financial year 2021, due to the risks to which operational employees and personnel are exposed in conjunction with a positive market and order situation. As of December 31, 2022, the overall risk situation of the Group does not pose a threat to its existence. Risks that alone, or in combination with other risks, could jeopardize the continued existence of the Group were not discernible either at the reporting date or at the time of preparation of the management report. Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 28 Exyte OPPORTUNITIES Opportunities deriving from “Next Level – Pathway to Ten“ • Opportunities in the battery industry sector, particularly within Europe and b. Growth for Technology & Services (T&S): The strategy for vertical integration North America: Automotive manufacturers are progressively equipping their has completed our range of services offered in the value-added supply chain Based on a strategy that has defined core industry sectors and markets, Exyte has embarked vehicles with electric drive systems. This technological change requires enormous and provides support for GBU capabilities. In the technological facility equipping on a successful growth path. In order to accelerate this process, we have set ourselves new investment in the expansion of capacity for the production of battery cells. Exyte sector, our growth is driven by cleanroom and dry room products, as well as critical objectives and are further continuously developing our strategy under the title “Pathway to Ten.” is ideally positioned for the planning and construction of such production facilities sub-systems. In the services sector, we have concentrated our efforts on the due to its strengths in the building of sophisticated and controlled production mechanical, electrical, and process technology fields (MEP), as well as the installation In the medium term, up until 2027, Exyte’s target is to increase total sales to some €10 billion, environments. of machinery, off-site manufacturing, and skid systems. T&S is often an integral part with a corresponding increase in adjusted EBIT. The “Pathway to Ten“ strategy and the associated of the projects carried out by the GBUs. However, the majority of the business is “Next Level“ future agenda combine existing and new initiatives to evaluate and implement • Sustained organic growth of biotechnology and pharmaceuticals with a focus carried out with third party clients. opportunities. We have divided the strategic program into four areas of activity. Within these on the US market, as well as Northern Europe: The BLS business segment, areas, we are pursuing various strategic initiatives. which offers complete solutions for clients in the biotechnology, pharmaceutical, c. Growth through strategic takeovers: We make strategic acquisitions to strengthen medical technology, food and nutrition, and consumer care sectors, carries out our business and support our growth strategy. Our approach is based on defined 1\. Growth and profitability projects for global and regional clients covering all phases of the project life cycle. “M&A” criteria. These include business suitability, geographic focus, and business In pursuing the following three initiatives, we see an opportunity to continue our strong We offer consulting, engineering, design, and also both engineering, procurement, development. We acquired the CPS Group in the US in 2021 and Airgard in 2022. business performance, to achieve a sales volume of some €10 billion, and to generate an and construction management (EPCM) and engineering, procurement, and Further potential acquisition candidates have been identified. adjusted EBIT margin of more than 6%: construction (EPC) services, as well as customized, prefabricated module and equipment solutions. We hold leading market positions in South East Asia, North 2. Engineering & delivery a. Growth in all three GBUs: All the global business units are positioned in markets East Asia, and Continental Europe. In the next few years, we intend to significantly We see opportunities to continuously improve our processes with the following three with high potential that offer long-term growth opportunities. Our objective is expand our business in the USA and in Northern Europe. To this end, we have initiatives: to grow with, or faster than, the markets. The drivers for such growth are the opened additional BLS locations Raleigh, North Carolina, as well as in Philadelphia, intensification of our relationships with important clients, the focus on specific Pennsylvania and in Cork, Ireland. We are filling new key positions and significantly a. Strengthening our engineering capabilities: Our main focus is on engineering & regions, the utilization of our expertise, our presence, and the range of services increasing our headcount in the areas of engineering and design, project and design by increasing the number of our engineers and making resources available to offered throughout the Group, as well as the exploitation of new potential (e.g. construction management, commissioning, qualification, and validation. In our GBUs. batteries) and the introduction of innovative solutions (e.g. ExyCell®). addition, we are strengthening our team with industry sector specialists. Exyte has a reputation as a forward-looking engineering and plant construction organization b. Improvement in the area of delivery: We are strengthening the areas of project • Realizing the potential deriving from the growing global semiconductor that continuously invests in the most modern technology, software, and hardware, management and construction management, as well as commercial functions, by market: The market for electronics is growing steadily, and at present strongly, due as well as in training programs to ensure that employees can work easily and means of continuous training, and by improving our approach to procurement and to trends such as cloud computing, autonomous driving and artificial intelligence. efficiently with such new technology. We provide our clients with state-of-the-art the awarding of subcontracts. Building on this, Exyte’s strategy covers the implementation of mega projects (with technical solutions. These include “virtual” and “augmented reality,” which allow an order volume > €500 million) and large projects (with an order volume between clients to evaluate solutions in real time during the project planning phase, in order c. Management of risks and opportunities: Our systematic approach to opportunity €100 million and €500 million). In addition to projects in the field of semiconductor to optimize the deployment of equipment and the efficiency of buildings. and risk management helps us to minimize risks, maximize opportunities and thus production (front end wafer fabs), further positive market developments are achieve our objectives. For Exyte, opportunity and risk management is important emerging for Exyte. Opportunities derive from the manufacture of silicon wafers as • A pioneer for data centers in Europe and Asia: Exyte has proved that it can during the project acquisition and delivery phases. An analysis of opportunities and well as in new, complex production facilities for the assembly of integrated circuits build large-scale data centers. In Europe, Exyte has consolidated its Data Centers risks is carried out as part of the project evaluation and tendering phase. Opportunity and their final testing (system in a package, or SiP, advanced packaging). With its organization in order to have a powerful team that is able to deliver numerous and risk management is a continuous activity throughout the project handling and global presence and corresponding references in the relevant countries, Exyte is projects. In addition, Exyte has started to build up a Data Centers organization delivery phases. the ideal partner for clients who intend to build such new manufacturing facilities. in Asia. The DTC business segment is aiming to achieve sales of €1 billion by the year 2027 as part of the “Pathway to Ten” strategy. With this purpose in mind, an evaluation is also currently underway to determine business potential and opportunities within the US data centers market. Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 29 Exyte FORECAST 3\. Corporate culture 4. oneCOMPANY At the time of preparation of this Group Management Report, the COVID pandemic is still A strong corporate culture provides the basis for Exyte’s success. We are promoting We harmonize our processes and activities and set standards that are valid throughout impacting the global economic environment. Uncertainties stem in particular from the such a culture though these three initiatives: the world. To achieve this, we have launched a number of initiatives: abandonment of the zero-COVID policy in China and the related possible consequences for the global economy. With the Russian invasion at the end of February 2022, armed confrontations a. Positioning Exyte by promoting its public awareness, in order to strengthen a. oneSTRUCTURE: We have built up a global organization that is aligned to our began in Ukraine, which have continued to this day and are a burden for global macroeconomic our employer branding: We have defined an employer value proposition (EVP), corporate strategy. Our organizational structure has a strong focus on Exyte’s development. To date, no serious negative effects in financial year 2023 are expected to result including uniform and coordinated measures. On the basis of the EVP, we have markets and clients. It clearly defines areas of responsibility and authority. from these scenarios with respect to Exyte’s most important key figures, such as order intake, developed a new employer brand, which provides the basis for our recruitment and sales and adjusted EBIT. The executive management has taken these factors into account in talent acquisition activities. We want to be the employer of choice for our existing b. onePROCESS: We have defined our global business processes to harmonize our the process of preparing Exyte’s business plans for 2023. However, negative effects deriving and future employees. business activities. We also use these as a basis for the development of our ERP from them cannot be ruled out. Our plans for 2023 also assume a further recovery for the global system. economy as a whole and successful containment of inflation rates. Under these premises, we b. Introduction of a talent management approach: Talent identification and expect the following developments in financial year 2023: development are of paramount importance. We take a comprehensive approach c. oneERP: We are currently working on the completion of our new, global, and modern that starts with a consistent onboarding process. Onboarding activities are based template-based SAP system for business administration purposes. It has interfaces In 2022, Exyte was able to generate an order intake of some €7.6 billion. Due to the unchanged on a global framework concept and take special regional factors into account. to other IT applications. We will launch it in a pilot region in 2023 and roll it out globally positive surrounding conditions in the industry sectors in which we are active, we expect the Based on our newly introduced “Core Competencies,” we maintain a continuous in the following years. order intake to be at a comparable level in 2023. Based on the high order backlog at the end of dialogue with our employees with respect to their individual performance and 2022 and planned new orders, we expect a further slight increase in sales, from €7.4 billion to development, e.g. in the context of an annual performance and development d. oneCRM: We have developed an application that serves as the basis for the global around €7.7 billion, in 2023. In line with sales, we also expect a slight absolute increase in adjusted dialogue. The annual appraisal of talent is one of the tasks carried out by our management of our client and project opportunities (“Opportunities”). With its aid, EBIT for 2023, with the adjusted EBIT margin remaining constant as compared to financial senior management and helps us to identify employees with high potential. In this we can achieve full transparency at all times and manage our sales funnel by applying year 2022. way, we can identify future leaders at an early stage and can consider them for integrated approval procedures. our succession planning purposes. We are proud of our various trainee programs For the medium-term planning period, up to 2027, we are targeting a sales volume of around throughout the world, which offer university graduates an attractive start within e. oneHR: We have set up a global platform for HR specialists and employee €10 billion with a sustainable adjusted EBIT margin of 6%. We see these objectives as achievable Exyte. We have expanded our learning management system to include an self-service. It includes, among other things, a uniform payroll system, a travel due to market developments, our internal initiatives to strengthen processes and to further extensive range of online training courses. management system, as well as systems for time and employee data management. develop products and solutions, as well as the planned further increase in our employee headcount. With our experienced project teams and engineers, who are able to provide the c. Promoting a corporate culture characterized by individual responsibility, f. oneIT: Global IT tools are used for optimal project handling purposes and to provide highest level of service to our customers in high-tech sectors throughout the world, we believe teamwork, and a sense of belonging: We foster a culture in our daily working a common digital workspace. Features also include a standardized internet and that we are very well positioned to successfully meet the challenges associated with this growth. relationships that is respectful, welcoming, and inclusive. Our company values intranet presence, as well as a technical infrastructure. provide the foundation and guidelines for this. We promote a corporate culture of Stuttgart, March 14, 2023 ownership, collaboration, and a sense of belonging. With our “we take responsibility” g. oneESG: We are working on a global approach to the management of relevant approach, we promote entrepreneurial thinking, put trust in the performance of our environmental, social, and governance (ESG) issues to meet the needs of our The Executive Management employees, and empower them to take decisions. With our “we work together as stakeholders. This includes the development of an ESG strategy and the adaptation one global team” approach, we support each other and strengthen teamwork across of reporting to the changed requirements. the regions and business units. We foster a culture characterized by active feedback. With our “We feel we belong to Exyte” approach, we strengthen identification with the organization, show and experience appreciation and are proud of what we achieve. ## Dr. Wolfgang Büchele (CEO) Peter Schönhofer (CFO) Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 30 Exyte CONSOLIDATED FINANCIAL STATEMENTS 31 CONSOLIDATED STATEMENT 37 Foreign currency conversion and 45 D. Note Disclosures for Individual Items OF COMPREHENSIVE INCOME translation 79 E. Supplementary Disclosures 38 Recognition and measurement 32 CONSOLIDATED STATEMENT OF 43 C. Discretionary Decisions, Estimates, 80 EXECUTIVE MANAGEMENT OF EXYTE GMBH FINANCIAL POSITION and Assumptions 43 Uncertainties resulting from the war 80 SUPERVISORY BOARD OF EXYTE GMBH 33 DEVELOPMENT OF in Ukraine CONSOLIDATED EQUITY 43 Pandemic-related uncertainties 81 LIST OF SHAREHOLDINGS OF EXYTE GMBH 43 Possible impacts on Exyte‘s accounting 34 CONSOLIDATED STATEMENT OF and reporting processes CASH FLOWS 43 Significant discretionary decisions relating to the application of IFRS 15 35 NOTES TO THE CONSOLI- 44 Goodwill DATED FINANCIAL STATEMENTS 44 Legal disputes 35 A. General Disclosures 44 Accounting for pensions 35 B. Accounting Principles 44 Income tax 35 Basis 44 Other provisions 35 New or amended accounting standards 44 Determination of the contractual 36 Scope of the consolidation lease term in the case of renewal and 37 Consolidation methods termination options Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 31 Exyte CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME in € thousand in € thousand Note 1.1.–31.12.2022 1.1.–31.12.2021 Note 1.1.–31.12.2022 1.1.–31.12.2021 Sales 1 7,402,678 4,864,854 Gain/loss deriving from the translation of financial statements of foreign business units Cost of sales 2 –6,813,724 –4,475,421 Change recognized in equity without impacting profit or loss 20,113 31,382 Gross profit 588,954 389,433 Recognized in profit or loss –4,270 –243 Selling costs 3 –50,458 –40,444 Gain/loss deriving from hedging instruments Administration costs 4 –141,657 –93,974 Change recognized in equity without impacting profit or loss 24 –5,473 –2,278 Other operating income 5 18,621 19,823 Reclassification to profit or loss 24 774 34 Other operating expenses 6 –18,424 –17,222 Income tax Result from operating activities (EBIT) 397,036 257,616 Change recognized in equity without impacting profit or loss 1,671 696 Interest and similar income 7 110,319 35,876 Reclassification to profit or loss –236 –11 Interest and similar expenses 7 –102,573 –37,263 Items that will subsequently possibly be reclassified to profit or loss 12,579 29,580 Consolidated earnings before tax 404,782 256,229 Remeasurement of pension obligations Income tax 8 –55,782 –39,689 Actuarial gains (+)/losses (–) 19 3,203 453 Consolidated net profit 349,000 216,540 Income tax –967 –182 Items that will not be subsequently reclassified to profit or loss 2,236 271 Other comprehensive income 14,815 29,851 Total consolidated comprehensive income 363,815 246,391 Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 32 Exyte CONSOLIDATED STATEMENT OF FINANCIAL POSITION in € thousand in € thousand Note 31.12.2022 31.12.2021 Note 31.12.2022 31.12.2021 Assets Equity and liabilities Intangible assets 9 373,621 338,734 Share capital 18 150,000 150,000 Property, plant and equipment 10 51,266 38,433 Capital reserve 18 36,585 36,585 Right-of-use assets 11 129,492 98,007 Retained earnings 55,357 –11,183 Other financial assets 15 1,383 1,079 Other components of equity 70,691 55,876 Deferred tax assets 8 76,788 66,371 Consolidated net profit 349,000 216,540 Non-current assets 632,550 542,624 Equity 661,633 447,818 ## Inventories 12 90,361 55,434 Provisions for pensions 19 7,406 10,535 Advanced payments made 12 251,956 125,018 Other provisions 20 14,141 13,442 Contract assets 13 456,095 288,440 Lease liabilities 11 104,261 75,291 Trade receivables 14 835,475 693,983 Other financial liabilities 22 3,699 2,312 Other financial assets 15 51,535 23,326 Miscellaneous liabilities 23 107 0 Miscellaneous assets 16 37,661 24,797 Deferred tax liabilities 8 14,715 13,100 Income tax receivables 10,104 4,516 Non-current liabilities 144,329 114,680 Cash and cash equivalents 17 1,592,435 1,148,911 Other provisions 20 101,841 78,490 Current assets 3,325,622 2,364,425 Contract liabilities 13 993,127 906,879 Total assets 3,958,172 2,907,049 Trade payables 21 1,907,186 1,228,200 Lease liabilities 11 28,533 22,909 Other financial liabilities 22 7,012 7,055 Miscellaneous liabilities 23 86,780 86,110 Income tax liabilities 27,731 14,908 Current liabilities 3,152,210 2,344,551 Total equity and liabilities 3,958,172 2,907,049 Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 33 Exyte DEVELOPMENT OF CONSOLIDATED EQUITY in € thousand (18) Other components of equity Re­mea- Gains/losses Currency surement deriving Capital Retained translation of pension from hedging Consolidated Share capital reserve earnings reserve obligations instruments Income tax net profit Total Equity Balance at 1.1.2021 150,000 36,585 –178,436 29,257 –4,776 126 1,418 167,674 201,848 Transfer to retained earnings 167,674 –167,674 0 Change in the scope of the consolidation –421 –421 Consolidated net profit 216,540 216,540 Other comprehensive income 31,139 453 –2,244 503 29,851 Total comprehensive income 31,139 453 –2,244 503 216,540 246,391 Balance at 31.12.2021 150,000 36,585 –11,183 60,396 –4,323 –2,118 1,921 216,540 447,818 Transfer to retained earnings 216,540 –216,540 0 Distribution to the sole shareholder –150,000 –150,000 Consolidated net profit 349,000 349,000 Other comprehensive income 15,843 3,203 –4,699 468 14,815 Total comprehensive income 15,843 3,203 –4,699 468 349,000 363,815 Balance at 31.12.2022 150,000 36,585 55,357 76,239 –1,120 –6,817 2,389 349,000 661,633 Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 34 Exyte CONSOLIDATED STATEMENT OF CASH FLOWS in € thousand in € thousand Note 1.1.–31.12. 2022 1.1.–31.12. 2021 Note 1.1.–31.12. 2022 1.1.–31.12. 2021 Consolidated net profit 349,000 216,540 = Cash flow from operating activities (brought forward) 686,502 630,129 \+ Income tax 8 55,782 39,689 – Payments for investments in intangible assets –402 –354 –/+ Net interest (excluding foreign currency exchange gains or losses) 7 –5,783 1,067 + Proceeds from the disposal of property, plant and equipment 234 34,663 \+ Amortization and depreciation 9–11 50,703 31,322 – Payments for investments in property, plant and equipment –24,073 –9,216 Change in impairment loss allowances recognized against trade – Payments for cash invested with banks –23,000 0 \+ receivables, financial receivables, and contract assets 8,044 3,809 \+ Proceeds from the disposal of consolidated entities 0 1,059 Net gains/losses deriving from the disposal of intangible assets and – Payments for investments in consolidated entities –33,464 –211,436 +/– property, plant and equipment 5, 6 307 –1,411 \= Cash flow from investing activities –80,705 –185,284 \+ Other non-cash based expenses and income 276 12,364 Financial transactions with entities belonging to the – Income tax payments –62,402 –42,454 \+ M+W Group GmbH Group 983 393 – Interest paid –5,778 –3,170 – Payments for distributions made to the sole shareholder –150,000 0 \+ Interest received 11,694 2,662 \+ Proceeds from lease receivables 11 51 96 +/– Change in provisions 22,349 –6,283 – Payments for the redemption of lease liabilities 11, 25 –27,777 –21,057 –/+ Change in other assets and liabilities –21,340 6,974 \+ Financing of non-consolidated entities 35 99 \+ Change in working capital 283,650 369,020 \= Cash flow from financing activities –176,708 –20,469 – Thereof: change in inventories and advance payments made –154,595 –119,635 \= Cash-based changes in cash and cash equivalents 429,089 424,376 – Thereof: change in trade receivables and contract assets –299,799 –230,293 \+ Exchange rate effects on cash and cash equivalents 14,435 41,385 \+ Thereof: change in trade payables and contract liabilities 738,044 718,948 \+ Cash and cash equivalents at the beginning of the period 17 1,148,911 683,150 \= Cash flow from operating activities 686,502 630,129 \= Cash and cash equivalents at the end of the period 17 1,592,435 1,148,911 Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 35 Exyte NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS A. GENERAL DISCLOSURES Exyte GmbH, with a registered office at Löwentorbogen 9b, 70376 Stuttgart, Germany, is the The entities included in the consolidated financial statements use the calendar year as their parent company of the Exyte Group (Exyte). The Company is registered in the commercial financial year. register in Stuttgart in Section B, under registration number 775556. The consolidated financial statements have been prepared in euros, as the euro is the functional Exyte GmbH and all its significant subsidiaries are included in the consolidated financial currency of Exyte GmbH. Unless otherwise stated, all amounts are disclosed in thousands of statements of the M+W Group GmbH. As Exyte GmbH’s parent company, M+W Group GmbH euros (in € thousand); amounts are rounded in the normal commercial manner. prepares exempting consolidated financial statements in accordance with Section 291 of the HGB \[German Commercial Code\]. The consolidated financial statements of Exyte GmbH The statement of comprehensive income was prepared using the cost of sales method of are prepared on a voluntary basis. classification. The consolidated financial statements of Exyte GmbH include the smallest group of companies for which consolidated financial statements are prepared. The ultimate parent entity, which New or amended accounting standards prepares consolidated financial statements that include Exyte GmbH and its subsidiaries, is Millennium Privatstiftung Vienna, Austria. With the exception of the revised standards to be mandatorily applied for the first time in the financial year 2022, the accounting principles applied are generally consistent with those used Exyte is organized for management responsibility purposes into the regional segments Europe, in the previous year. Middle East and Africa (EMEA), Americas (AMER), Asia-Pacific (APAC), and the Technology & Services (T&S) business area. Exyte is as a globally active organization in the areas of planning, project management, and project execution in the business segments in which it is engaged New or amended accounting standards – Advanced Technology Facilities (ATF), Biopharma & Life Sciences (BLS), Data Centers (DTC), and Regional Specific Business (RSB). From the development of the initial concept right through First-time Endorsement by the (Expected) to delivery of a complete turnkey solution, Exyte carries out contracts of varying sizes that Standard/Interpretation application1 EU Commission Impacts on Exyte require fast delivery, high standards of quality, and cost efficiency. In this context, Exyte combines process technology and complex building infrastructures to deliver integrated complete Accounting standards applicable for the first time in 2022 solutions. Amendments to IFRS 16 “Leases“ – COVID-19-Related Rent Concessions beyond June 30, 2021 1.4.2021 Yes None Amendments to IFRS 3 “Business Combinations“ – Updating a Reference to the Conceptual Framework 1.1.2022 Yes None B. ACCOUNTING PRINCIPLES Amendments to IAS 16 “Property, Plant and Equipment“ – Proceeds before Intended Use 1.1.2022 Yes None Basis Amendments to IAS 37 “Provisions, Contingent Liabilities and Contingent Assets“ – Onerous Contracts – Cost of Fulfilling a Contract 1.1.2022 Yes Insignificant The consolidated financial statements have been prepared in conformity with International Annual Improvements – 2018–2020 Cycle (IFRS 1, IFRS 9, IFRS 16, IAS 41) 1.1.2022 Yes Insignificant Financial Reporting Standards (IFRS), as adopted by the European Union (EU), as well as in accordance with supplementary provisions of Section 315e (3) of the HGB. The standards and New standards to be applied in the future interpretations published at the time of preparing the financial statements, which have been IFRS 17 “Insurance Contracts“ 1.1.2023 Yes None adopted by the European Union and are relevant and mandatory for the Group, are of authoritative importance for this purpose. These consolidated financial statements provide a Amended standards/interpretations to be applied in the future true and fair view of the assets, liabilities, financial position and financial performance of Exyte. Amendments to IAS 1 “Presentation of Financial Statements“ and to IFRS Practice Statement 2 “Making Materiality Judgements“ – Disclosure of Accounting policies 1.1.2023 Yes Insignificant Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 36 Exyte New or amended accounting standards Eight (2021: eight) subsidiaries that are not significant for the presentation of the Group’s assets, liabilities, financial position and financial performance are not included in the First-time Endorsement by the (Expected) consolidated financial statements by way of full consolidation. The cost for their inclusion Standard/Interpretation application1 EU Commission Impacts on Exyte would not be counterbalanced by a corresponding benefit in information for the users of the financial statements. The shares in these subsidiaries are reported under other financial Amendments to IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors“– assets (non-current). Definition of Accounting Estimates 1.1.2023 Yes Insignificant Amendments to IAS 12 “Income Taxes“ – Deferred Tax Related to Assets and Liabilities arising The list of shareholdings of Exyte GmbH forms part of the notes to the consolidated financial from a Single Transaction 1.1.2023 Yes Insignificant statements and is attached as an appendix. Amendments to IFRS17 “Insurance Contracts“ – Initial Application of IFRS 17 and IFRS 9 – Comparative Information 1.1.2023 Yes None Acquisition of Airgard, Inc. Amendments to IAS 1 “Presentation Statements“ – Classification of Financial of Liabilities as Critical Process Systems Group, Inc., Boise, USA acquired a 100% interest in Airgard, Inc., Milpitas, Current or Non-current; Non-current Liabilities with Covenants 1.1.2024 No None USA (Airgard) with effect from October 1, 2022. Amendments to IFRS 16 “Leases“– Lease Liability in a Sale and Leaseback 1.1.2024 No None The purchase price provisionally determined at the time of the preparation of the consolidated Amendments to IFRS 10 and IAS 28 – Sales or Contributions of Assets Between an Investor financial statements amounted to USD 35,410 thousand (€37,020 thousand). and its Associate/Joint Venture Not defined No None USD 34,327 thousand (€35,888 thousand) of the total amount was paid in cash at the time of 1 The requirements are to be applied to financial years that start on or after the stipulated date. acquisition. The remaining amount of USD 1,083 thousand (€1,132 thousand) is recognized as a purchase price liability under other financial liabilities as at December 31, 2022. Payment of this amount to the seller was made in January 2023. Scope of the consolidation The following table shows the changes to the scope of the consolidation in financial year 2022: Part of the purchase price payment made in cash at the time of acquisition, amounting to The consolidated financial statements include all significant entities in which Exyte GmbH, as the USD 3,500 thousand, was paid into a blocked account. After the purchase price had been parent company, has a direct or indirect controlling influence as fully consolidated subsidiaries. Development of the scope of the consolidation determined, this amount was either to be paid (partially) to the seller or (partially) transferred Control is exercised if the parent company has powers of disposition over another entity, due back to Critical Process Systems Group, Inc. In January 2023, the remaining amount was paid to voting rights or other rights, if it participates in positive or negative variable returns from its out in full to the seller on the basis of the provisionally determined purchase price. involvement with that entity and has the ability to use its power to affect the amount of such Status as at 1.1.2022 46 returns. Inclusion in the consolidated financial statements takes place from the point in time Exyte Rus, LLC, Moscow, Russia (liquidation) –1 In addition, a further amount of USD 3,850 thousand was paid into a second blocked account that the control relationship is first established. Inclusion is discontinued when this possibility at the time of acquisition. This amount provides the buyer security for indemnity obligations for control ceases to exist. Exyte Netherlands B.V., Amsterdam, the Netherlands (incorporation) 1 assumed by the seller. 18 months after the date of acquisition of the company, any remaining Airgard, Inc., Milpitas, USA (business acquisition) 1 unutilized amount is to be paid out to the seller. As there were no indications at the time of the The composition of the companies that are included within the scope of the consolidation is preparation of the consolidated financial statements that the seller would be called upon to meet shown below: Gilbane Exyte JV, Providence, USA (incorporation/joint operation) 1 the indemnity obligations assumed, this further amount was also fully taken into account when Status as at 31.12.2022 48 calculating the provisionally determined purchase price. Number of entities Airgard, Inc. was included in the consolidated financial statements on a provisional basis, as not all the necessary information that was required for the final determination of the purchase price was 31.12.2022 31.12.2021 available at the time when the consolidated financial statements were prepared. Any possible adjustment to the purchase price could have an impact on the amount recognized for goodwill in Exyte GmbH and fully consolidated subsidiaries 45 44 the statement of financial position. Domestic 6 6 The transaction costs (in particular consulting and due diligence costs) incurred in connection Foreign 39 38 with the acquisition of Airgard, Inc. in financial year 2022 amounted to €599 thousand. They are Joint operations (only foreign) 3 2 disclosed under administration costs. Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 37 Exyte The acquired net assets are made up as follows: There are no significant differences between the gross amount and the fair value of the acquired Other business acquisitions trade receivables. The assumption is that the acquired receivables are fully recoverable. Other business acquisitions are accounted for using the acquisition method. At the time at which control of the acquired business is obtained, its assets and liabilities are required to be included in in € thousand Exyte’s regional presence in the US market has been strengthened by the acquisition and the the consolidated financial statements and are to be measured at their fair value as of the date of Carrying range of technology offered has been expanded to include point-of-use cleaning products for acquisition. amount Remeasure- Fair value at technical equipment used in high-tech manufacturing facilities in the semiconductor industry. at date of ment of assets date of initial Goodwill includes non-separable intangible assets such as employee knowhow and anticipated The cost of an acquired entity is measured at the fair value of the consideration given, i.e. as acquisition and liabilities consolidation synergy effects. The goodwill is not deductible for tax purposes. the total value of any assets transferred, of any liabilities of the seller that are assumed, and of any own equity instruments issued. Any transaction costs are recognized as an expense. If Intangible assets 0 13,006 13,006 In the period from October 1, 2022 until December 31, 2022, Airgard, Inc. generated sales the purchase price exceeds the value of net assets acquired at the purchase date, then Exyte Property, plant and equipment 357 0 357 of €4,100 thousand; earnings before tax for this period (including impacts deriving from recognizes the amount of the difference as goodwill. allocation of the purchase price) amounted to –€344 thousand. If the business combination Right-of-use assets 3,347 0 3,347 had already taken place as of January 1, 2022, the sales of the Group would have increased by Elimination of intercompany balances, intercompany profits, and expenses and income Deferred tax assets 562 0 562 €22,260 thousand and the consolidated earnings after tax by €2,035 thousand (including impacts Accounts receivable and accounts payable balances, intercompany profits, and expenses and deriving from allocation of the purchase price). income between consolidated companies are eliminated. Charges for intra-group deliveries of Inventories 3,228 864 4,092 goods and services are based on prices determined in accordance with normal market terms and Trade receivables 3,697 0 3,697 Acquisition of the CPS Group in the previous year conditions. During financial year 2022, the process of determining the purchase price for the acquisition Other financial assets 44 0 44 of the Critical Process Systems Group (CPS Holdco, LLC, Boise, USA and its 15 subsidiaries; Miscellaneous assets 338 0 338 the CPS Group), effective November 1, 2021, was finalized. Instead of the anticipated Foreign currency conversion and translation repayment claim of USD 924 thousand that, at the time of preparation of the 2021 consolidated Cash and cash equivalents 3,374 0 3,374 financial statements, was expected to derive from the provisional purchase price payment, Translation of foreign currency transactions an additional purchase price payment of USD 1,100 thousand was determined, which was Monetary items (cash and cash equivalents, accounts receivable, and liabilities) denoted in Acquired assets 14,947 13,870 28,817 paid in cash in financial year 2022. As a result, the goodwill from the acquisition of the Group foreign currencies are measured at the closing exchange rate for the purposes of inclusion in Deferred tax liabilities 0 3,557 3,556 increased by USD 2,024 thousand (€1,748 thousand) and amounted to USD 170,596 thousand the separate local currency financial statements of consolidated companies. Any exchange (€160,335 thousand) as at December 31, 2022. differences are recognized in profit or loss in the net income from financing activities. Other provisions 484 0 484 Non-monetary items denoted in foreign currency are recognized at the historical rates of Trade payables 859 0 859 exchange that were valid at the date of the original transaction. Consolidation methods Lease liabilities 3,489 0 3,489 As the entities included in the consolidation generally perform their transactions autonomously Miscellaneous liabilities 806 0 806 The assets and liabilities of the domestic and foreign companies included in the consolidated in a financial, economic, and organizational respect, the functional currency is identical to the financial statements are recognized in accordance with accounting principles that are uniformly respective local currency of the entities. Exceptions in this respect are a company in Singapore, Acquired liabilities 5,638 3,557 9,194 valid. which uses the US dollar as its functional currency, and a subgroup holding company in Acquired net assets 9,309 10,313 19,622 Singapore, which uses the euro as its functional currency. Acquisitions under common control Provisionally determined purchase price 37,020 In the case of acquisitions under common control (acquisition of businesses, whereby the Translation of financial statements designated in foreign currency Residual goodwill 17,398 acquirer and the acquired business are under the control of the same entity), the acquisition is Exyte translates assets and liabilities of entities whose functional currency is not the euro at accounted for using the book-value method. The difference between the carrying amounts of the average spot rate prevailing at the closing date of the financial year reported. Expenses and the acquired net assets and the purchase price is offset against the retained earnings and is not income are translated at the average rate for the financial year reported. Exyte recognizes the recognized in profit or loss. amount of the difference arising from foreign currency translation in equity, without impacting profit or loss, as a component of other comprehensive income. If the subsidiary is (partially) sold, any currency impacts are (proportionately) reclassified to the income statement section of the statement of comprehensive income. Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 38 Exyte Exyte has applied the following exchange rates for the purpose of foreign currency translation: Other intangible assets are measured at their costs of acquisition or generation, less systematic amortization and any recognized losses for impairment. The costs of acquisition or generation include all directly attributable costs as well as an appropriate share of development-related Foreign currency exchange rates overheads. Capitalization commences when the recognition criteria for the respective assets are met and ends as soon as the assets are available for use within the organization in accordance Year-end rate Average rate for the year with the management’s plans. ## 1 EUR 31.12.2022 31.12.2021 2022 2021 Property, plant and equipment Items of property, plant and equipment are measured at their costs of acquisition or USA USD 1.0640 1.1303 1.0520 1.1807 construction, reduced by systematic depreciation and any recognized losses for impairment. Singapore SGD 1.4323 1.5309 1.4500 1.5869 Costs of construction recognized include attributable direct costs as well as appropriate shares of material and production overheads, including depreciation related to the production process. United Kingdom GBP 0.8806 0.8412 0.8567 0.8569 The costs of acquisition or construction include not only the purchase price but also any directly Russia RUB 74.1530 83.5863 77.5832 87.0750 attributable costs that are necessary to bring the asset to the location and state of operational readiness that was intended by management. China CNY 7.4224 7.1994 7.1109 7.6155 Malaysia MYR 4.7055 4.7269 4.6336 4.8986 As was the case in the previous year, systematic straight-line depreciation is determined based on the following useful lives: Taiwan TWD 32.7603 31.3505 31.5256 33.0061 Vietnam VND 25,167.0000 25,791.0000 24,667.9167 27,070.6667 Useful lives for types of property, plant and equipment Israel ILS 3.7526 3.5179 3.5517 3.8193 Japan JPY 142.2100 129.9700 138.2783 130.1075 Useful life India INR 88.0943 84.3880 82.9817 87.1655 Buildings 25–40 years Czech Republic CZK 24.2520 24.9580 24.5840 25.6658 Machinery and technical equipment 4–25 years Other equipment, operational, and office equipment 3–13 years Recognition and measurement Exyte recognizes intangible assets in respect of own-developed products or processes if these can be clearly segregated, are assessed to be technically feasible and they are foreseen for If items of property, plant and equipment are sold or disposed of, the gain or loss arising from Goodwill internal use or sale. A further prerequisite for recognition as an asset is that is that sufficient the difference between the sales proceeds and the residual carrying amount of the assets is Goodwill is not subject to systematic amortization, but is tested for impairment once a year. A probability exists that the capitalized development costs can be recovered by future cash inflows. recorded either under other operating income or under other operating expenses. test is also performed if events or circumstances arise that indicate that the carrying amount Capitalized development costs are amortized on a systematic basis over the expected period may possibly not be recoverable. Goodwill is tested for impairment at the level of groups of cash- of sale of the products that are produced using the assets; in this case, ten years. They are Impairment of intangible assets and property, plant and equipment generating units, which represent the respective regional segments. tested annually for indications of impairment. Research costs are immediately expensed in the At each closing date, Exyte assesses intangible assets and items of property, plant and statement of comprehensive income. equipment, in order to establish whether indications exist that the respective assets are Other intangible assets impaired. If this is the case, the recoverable amount of the asset is determined in order to Intangible assets acquired, mainly comprising software, patents, and licenses, are recognized The majority of Exyte’s development activities arise in the context of client contracts. The ascertain the amount of any potential impairment loss. If the recoverable amount of the asset is as assets at their costs of acquisition. Intangible assets with finite useful lives are amortized resulting expenses are reported under cost of sales. Expenses for research and development not reliably determinable, then the test for impairment is carried out at the level of the smallest on a systematic straight-line basis over their economic useful lives of three to fifteen years. that are not directly attributable to client projects are disclosed as other operating expenses, cash-generating unit to which the asset is attributable. A cash-generating unit is the smallest Furthermore, Exyte tests such intangible assets annually for indications of impairment (refer to unless they are recognizable as assets. In financial year 2022, such operating expenses unit for which largely independent cash inflows can be identified that derive from the continued the section: “Impairment of intangible assets and property, plant and equipment”). Exyte does amounted to €83 thousand (2021: €56 thousand). use of the respective assets. not have any other intangible assets with indefinite useful lives. Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 39 Exyte The recoverable amount of an asset is the higher of its fair value less costs to sell and its Lease payments are discounted using marginal borrowing rates of the respective lessee that repayment portion. The interest portion of the payments received is recognized in profit or loss value in use. are commensurate with the currency, asset value, and term of the lease. Lease liabilities are as interest income over the term of the lease. measured and their values are updated using the effective interest method. Exyte determines the fair value less costs to sell as the amount that could be obtained from the Financial instruments sale of an asset in an arm’s length transaction between knowledgeable, willing contractual parties. The right-of-use asset is recognized at its costs of acquisition, which are made up as follows: Financial instruments are contracts that give rise to a financial asset for one counterparty and to a financial liability or equity instrument for the other counterparty. The determination of the value in use is made based on the discounted value of expected future • The present value of the lease payments (= amount of the lease liability); net cash inflows deriving from operational usage. The discount rate used is a pretax rate that Financial assets reflects the time to maturity of the cash flows and the risks specific to the asset that have not • The amount of any lease payments made at the time (or before) deployment, less any lease The financial assets of the Exyte Group include cash and cash equivalents, trade receivables, already been considered when determining the estimated future cash inflows. incentives received; other financial assets, and derivative financial instruments with a positive fair value. Other financial assets mainly comprise financial receivables due from entities belonging to the M+W If the recoverable amount of the object that is being measured is lower than its carrying amount, • Initial direct costs; Group GmbH Group, non-consolidated subsidiaries, and joint ventures, as well as other financial then the carrying amount is written down to the recoverable amount. The impairment loss is receivables (e.g. security deposits or money invested with banks for a term of between three and recognized immediately in profit or loss within the functional costs, or respectively within other • The equivalent present value of any dismantling obligation recognized as a liability. twelve months). operating expenses if such assignment is not possible. Subsequent measurement is at amortized cost. Right-of-use assets are depreciated on a Financial assets are recognized in the consolidated statement of financial position from the point Furthermore, a review of amortization and depreciation methods, useful lives, and the residual straight-line basis over the term of the lease. The terms of the leases, and thus their useful lives, in time at which Exyte becomes party to the contract for the financial instrument. Recognition of carrying amounts of assets is conducted annually. were unchanged from the previous year and were in the range of between 13 months and 18.5 normal market purchases and sales of financial assets occurs as of the date of trading. With the years. exception of trade receivables, which are measured their respective transaction prices, financial If the reason for impairment is neither fully or partially applicable in a subsequent period, Exyte assets are measured at fair value. assesses whether the impairment loss needs to be reversed. The maximum amount of the Exyte has taken advantage of both the practical expedient that is available for leases of assets impairment loss reversal is determined, on the one hand, by the amount of amortized cost of with a low value (value of the underlying leased asset when new < €5 thousand), as well as that Depending on the Group’s business model for managing assets, the financial assets are the asset that would have been applicable if no impairment loss had been recognized in previous for short-term leases (with a non-terminable basic lease term of twelve months or less). Usage classified as either “at amortized cost” (AC) or “at fair value through profit or loss” (FVTPL) and periods. On the other hand, the asset must not be recognized at an amount that exceeds its fees for leases, for which the application of the practical expedient has been invoked, are fully measured accordingly. Exyte intends to hold financial assets until maturity in order to generate recoverable amount. The amount of the impairment reversal is recognized immediately in profit recognized as an expense on a straight-line basis over the term of the lease. the contractual cash flows from them. If these contractual cash flows represent solely principal or loss. Recognition of impairment reversals for goodwill are not permissible. and interest payments on the outstanding principal amount, then Exyte measures these financial Some specific contracts for the rental of real estate contain extension and/or termination assets at amortized cost. This applies to all cash-type instruments, namely cash and cash Leases options. Changes in the term of the contract resulting from the exercise or non-exercise of such equivalents. Exyte recognizes derivative financial instruments at fair value at the closing date, A lease is a contract that transfers the right to use an asset (the leased item) in return for options are only taken into account in the term of the contract if they are sufficiently certain. with changes in value recognized in profit or loss for the year. payment for an agreed period of time. As the lessee, Exyte recognizes right-of-use assets for any leases entered into in respect of property, plant and equipment, as well as liabilities for the Within Exyte, leases exist mainly for administrative and production buildings, for apartments A financial asset is derecognized when the contractual rights to cash flows from the respective related payment obligations to the lessor. rented on behalf of employees that are project-related, and for company motor vehicles. asset expire or are transferred and the criteria for derecognition are fulfilled. The lease liability is determined as the present value of the following lease payments: In the case of one lease, Exyte acts as the sublessor and therefore as the lessor. The contract for the sublease has been classified as a finance lease and, in consequence, a receivable for the • Fixed lease payments; net amount of the respective investment has been recognized. The net value of the investment corresponds to the present value of the right to receive lease payments plus any potential • Variable lease payments that are dependent on a rate or index; unguaranteed residual value. The lease instalments paid by the lessee are divided into an interest and a principal repayment portion, applying the effective interest method. For subsequent • The exercise price of a purchase option if the option is reasonably certain to be exercised. measurement purposes, the leasing receivable is reduced by receipts that represent the principal Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 40 Exyte Impairment losses At the end of each financial year, Exyte checks whether the credit risk for the receivable has Derivative financial instruments Impairment losses on financial assets are generally determined using a three-stage model. In changed and adjusts amount of the allowance for impairment, where necessary. Exyte solely deploys derivative financial instruments as hedges to manage risks deriving from the general approach, changes in default risks are analyzed at each financial statement reporting fluctuations in currency exchange rates. If the requirements for a hedging relationship are date to determine any expected credit losses (ECLs) and a classification is made as to whether Impairment losses, and respectively gains deriving from the reversal of impairment losses, fulfilled, the derivatives are recognized as cash flow hedges for hedge accounting purposes. these risks have increased significantly or not. If this is not the case, then the expected credit are reported under other operating expenses or other operating income, as applicable. loss is determined over a time horizon of 12 months (12-month ECL). If, however, the risks have When a hedging relationship is initially established, the Group formally designates and increased significantly, the actual remaining term of the financial assets is used as a basis (lifetime Financial liabilities documents both the hedged item and the hedging instrument for hedge accounting purposes, ECL). The financial liabilities of the Exyte Group include trade payables, lease liabilities, other financial taking into account the Group’s risk management objectives and strategy. This documentation liabilities, and derivative financial instruments with a negative fair value. includes the specification of the hedging instrument, the hedged transaction, and the nature In determining any expected credit losses on trade receivables and on contract assets, Exyte of the risk being hedged, as well as including a description as to how the entity will assess the applies the simplified approach and does not make any classification of the default risks. Exyte Financial liabilities are classified and accordingly measured either at amortized cost (AC) or at hedging instrument’s effectiveness in compensating the risks deriving from changes in the takes into account client-specific probabilities of default that, depending on the respective fair value through profit or loss (FVTPL). All financial liabilities are initially measured at fair value hedged item’s fair value or cash flows. Such hedging relationships are considered to be highly amount of the receivable and the expected term of the receivable, could result in a corresponding when incurred. effective in achieving compensation for the hedged risks. Currency risks are hedged in a manner impairment loss, which reflects the expected credit loss over the lifetime of the receivable commensurate with the contracts (term, volume). They are assessed on an ongoing basis to (lifetime ECL). At the time the leased asset is provided, the related lease liabilities are measured at the present determine whether they were highly effective during the entire reporting period for which the value of the lease payments that are highly probably still to be made at that time. These are hedging relationship was designated. The probabilities of default, which are used In order to determine expected credit losses on trade discounted using the incremental borrowing rate of the respective lessee at the time the leased receivables and contract assets, are made available by business information service providers. asset is provided, if the underlying interest rate of the lease is not readily determinable. Derivative instruments are measured for both initial recognition and subsequent measurement Such information is based on individual and continuously updated data on the credit risk for purposes at fair value. A positive market value results in recognition of a financial asset and Exyte’s counterparties, or company and industry sector data, taking into account forward-looking Financial liabilities classified as at FVTPL are subsequently measured at fair value (in Exyte’s a negative value results in recognition of a financial liability. Any changes in their fair value are macroeconomic data. For counterparties for which no individual default probabilities are available, case, this is only relevant for derivative financial instruments that re not included in a hedging recognized in profit or loss as exchange gains or losses, as part of the result from financing country-specific benchmark data obtained from business information service providers is used. relationship). Any resultant net gains or losses, including interest expenses, are recognized in activities, unless the derivatives are designated as cash flow hedges for hedge accounting profit or loss. purposes. In the case of cash and cash equivalents, as well as for other financial receivables, use has been made of the simplification option for financial instruments with a low credit risk (“low credit risk The fair value reflects the market value or the quoted value on a stock exchange. If no active Hedge transactions are classified as cash flow hedges if they hedge the exposure to fluctuations exemption”). Debtor-specific rating information is an indicator that contributes to an assessment market exists, then the fair value is determined using financial valuation methods, for example by in cash flows that can be attributed to a risk associated with an asset, a liability, or a highly that the credit risk is low. Cash and cash equivalents, as well as other financial receivables with discounting the estimated future cash flows using market interest rates, or through application of probable transaction and such risk might have an impact on the result for the period. The at least an investment grade rating, are considered to meet the requirements for classification recognized option pricing models. effective portion of the gain or loss deriving from the hedging instrument is recognized in equity, as financial instruments with a low credit risk, such that no credit risk tracking is required as to without impacting profit or loss, whereas the ineffective portion is recognized in profit or loss. whether the credit risk has significantly increased or decreased. Financial liabilities classified as at AC are subsequently measured at their amortized cost. The amounts initially recognized in equity are recognized in profit or loss in the statement of Financing costs, including premiums payable on repayment or redemption of principal, are comprehensive income in the same period that the hedged cash flows impact the result for the In cases where there are objective indications for impairment, in addition to the expected recognized as interest expense, applying the effective interest method. Any difference between period. first-stage and second-stage credit losses, the impairment that occurred as of the year-end the effective interest expense and the interest payments results in adjustment of the carrying reporting date is also taken into account (third-stage). Objective indications include, for example, amount of the financial liability. If a highly probable transaction is no longer expected to occur, any related amounts previously significant financial difficulties of the debtor, payment defaults and delays, a downgrading of recognized in equity are recognized in profit or loss for the period. If the hedging instrument the credit rating, insolvency, or other restructuring measures adopted by the debtor, as well as A financial liability is derecognized when the obligations specified in the contract are discharged, expires or is sold, terminated, or exercised without replacement, or rolled over into another other observable data that indicate a significant reduction in the expected cash inflows deriving cancelled, or are no longer enforceable by the creditor. hedging instrument, or if the Group withdraws its designation as a hedging instrument, then the from the financial assets. Actual payment defaults result in the de-recognition of the respective amounts previously recognized in equity remain as a separate item in equity until the anticipated financial assets. transaction occurs. If the anticipated transaction is no longer expected to occur, then the respective amount is recognized in profit or loss. Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 41 Exyte Inventories Current and deferred taxes obligation, as remeasured using the parameters applicable at the end of the financial year, differs Inventories are recognized at the lower amount of their costs of acquisition or conversion and Current taxes are calculated and accounted for each entity in accordance with the respective from the impact on profit or loss deriving from continued application of the old parameters, their net realizable values. tax regulations and specifications. then the difference is recognized in other comprehensive income. The costs of conversion comprise manufacturing-related costs, determined on a full-cost Any tax consequences deriving from profit distributions are only taken into account by the The service cost is disclosed as part of the functional costs; the interest portion relating to the basis, assuming normal utilization of capacities. They include both direct costs and a reasonable entity making the distribution at the point in time when the resolution governing the increase in the provision is included as part of the net income from financing activities. proportion of necessary material and manufacturing overheads, as well as manufacturing- appropriation of profits is passed. related amortization and depreciation that can be directly attributed to the conversion For defined contribution plan retirement schemes (e.g. certain direct insurance schemes), the process. Administration costs are considered to the extent that they can be attributed to the Deferred tax amounts are recognized for all temporary differences between tax-based values benefit contributions made by the employer are accounted for directly as an expense in the manufacturing process. Borrowing costs are not recognized as part of the costs of acquisition of assets and liabilities and the values recognized for them in the consolidated statement of respective functional costs. or conversion. If the net realizable value of an inventory assets is determined to be lower than its financial position. carrying amount at the closing date, then this lower value is recognized. The measurement of Other provisions inventory assets of the same type is performed using the average value method. In addition, deferred tax is recognized in respect of tax loss carryforwards, for which future Provisions are set up in cases where, at the closing date, a present obligation exists to a third utilization is more probable than not. The deferred tax is measured using the respective national party, arising out of a past event that is expected to most probably result in a future outflow of The net realizable value is the estimated selling price less the estimated costs to completion income tax rates. The deferral is determined in the amount of the expected tax charge or tax resources, the amount of which can be reliably estimated. Other provisions are only set up for and the estimated costs necessary to make the sale. relief for future financial years based on the rate of taxation that is valid at the closing date, unless legal and constructive obligations to third parties. this rate has already been changed with effect for the years in which the temporary differences Advance payments made are expected to reverse or the losses are expected to be utilized. Provisions are recognized at their discounted settlement amount at the closing date, if the The advance payments made mainly comprise advance payments to subcontractors in interest effect is material. Discounting is performed using pre-tax interest rates that reflect connection with contracts for projects. Deferred tax benefits are not recognized as assets if their utilization is dependent upon the current market expectations with regard to both the interest effect and the specific risks related availability of income against which they can be offset in periods that are not covered by to the nature of the liability. The amount required to fulfill the obligation includes any expected Contract assets and contract liabilities corporate plans. changes in costs and prices prior to settlement. Contract assets represent a conditional entitlement deriving from contract work in progress for which Exyte has performed work in advance on behalf of the client. For projects where sales Deferred tax assets and deferred tax liabilities are not discounted. They are offset against one Exyte recognizes certain, or virtually certain, rights of recourse as assets. are recognized over a defined time period, the stage of completion of the work performed is another if they relate to income taxes levied by the same taxation authority and the entity has determined using the cost-to cost method. a legally enforceable right to set off actual tax assets against actual tax liabilities. Deferred tax Income deriving from the reversal of provisions is offset against the expense items for which balances are always classified as non-current. the provisions were originally set up. Any advance payments requested and received from the client before the promised services have been performed represent an obligation to the client. If the performance obligations are Provisions for pensions Contingent liabilities higher than the claim entitlement deriving from the client contract, Exyte discloses the net Pension provisions cover Exyte’s benefit obligations arising from defined benefit plans. Exyte Contingent liabilities are possible obligations that arise from past events and whose existence will obligation as a contract liability. measures the pension obligations based on the projected unit credit method. For this purpose, be confirmed only by the occurrence of one or more uncertain future events that are, however, annual reports are obtained from actuaries. not within Exyte’s control. Furthermore, current obligations may represent contingent liabilities if Contract assets are realized within the normal business cycle. They are therefore presented as the outflow of resources is not sufficiently probable to justify the setting up of a provision and/or current assets even if the realization of the complete contract asset or the fulfilment of the client The biometric probabilities that are applied are derived from the mortality tables (“Richttafeln the amount of the obligation cannot be estimated with sufficient reliability. contract extends beyond a period of twelve months. 2018 G”) issued by Prof. Dr. Klaus Heubeck. Contingent liabilities are not recognized as liabilities in the statement of financial position but are Partial services rendered that have already been invoiced (unconditional entitlements) are Exyte calculates the pension expense recognized in profit or loss based on the parameters at the disclosed in the notes to the consolidated financial statements. reported as trade receivables. end of the respective previous year and the relevant plan formula. If the effect on the amount of Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 42 Exyte Sales In general, contracts with clients contain only one performance obligation, as the service schedule that is dependent on the achievement of certain milestones. Timing differences Exyte plans and constructs production and research facilities for the high-tech industry performed by Exyte consists of the implementation of an integrated overall solution covering between the recognition of sales and the invoicing to the client, or payments by the client, result throughout the world. The spectrum of industries for which the Group is active includes, among everything from planning, through construction and project management, and culminating in in changes to the corresponding contract assets or contract liabilities. other sectors, the electronics industry sector, pharmaceuticals, chemical, and food producers, the creation of a client-specific, turnkey plant facility, which requires its completion and handover as well as IT and telecommunications companies. The main focus of its value-adding activities to the client in its entirety. In the few cases where contracts with clients contain more than one Exyte develops, manufactures and provides maintenance services for controlled production is in the EPC business sector, i.e. in the planning (Engineering) of facilities, the procurement of all performance obligation, Exyte allocates the transaction price to the individual performance environments and cleanroom products. These are standard products, such as filter fan units, necessary components and trade services (Procurement), and the actual building of the facilities obligations on the basis of the relative stand-alone selling prices. precision air-conditioning units and ultrapure water cabinets, as well as customized products. (Construction). The main sales deriving from contracts with clients are earned in the regional Sales deriving from the sale of products (excluding their installation) are recognized when control segments EMEA, AMER and APAC and derive from such activities. In addition to EPC business, The transaction price agreed for a contract can include both fixed and variable components. over them is transferred to the client. Control usually passes to the purchaser upon delivery of Exyte produces and markets cleanroom components and systems for the electronics and Variable components may include, for example, penalties or bonuses related to the completion the products. pharmaceutical industry sectors in the T&S segment and also offers related installation services. date or the cost of a project. Variable components are included in the scope of the transaction price in cases where it is highly probable that there will not be any significant future reversal of Billing is carried out when the contractually agreed milestones have been fulfilled. The terms A contract with a client exists if a binding agreement between the contractual parties has already recognized sales. The estimate of the variable consideration component is reassessed agreed with the client usually provide for payment within 30 to 60 days of invoice preparation. economic substance, the rights and obligations of both contracting parties are defined, and it is regularly based on the progress of the project, and at each reporting date, and adjusted where probable that Exyte will receive consideration for the transfer of a good or provision of a service. necessary. As a general rule, clients are not granted any rights of return or any rights to compensatory claims that exceed the legally prescribed guarantee or warranty provisions. The “termination Although the exact terms of individual contracts vary, Exyte’s contracts with clients are made up Exyte engages subcontractors in order to fulfill client contracts. Exyte regularly acts as the for convenience” clause contained in the contracts grants the client the right to terminate of the following contractual models, or combinations of such models: principal and, to the extent that Exyte obtains control over the goods and services before they the contract without giving reasons. In such cases, Exyte is entitled to payment for the are transferred to the client, recognizes recoverable costs as sales and cost of sales in the services rendered up to the time of termination plus a reasonable profit margin, as well as for • Reimbursable: In this case, the price includes the reimbursement of all costs approved in statement of comprehensive income. In certain cases, Exyte organizes the provision of services reimbursement of costs incurred as a result of the termination. advance by the client. The costs are set as unit prices (e.g. as hourly rates or material prices) by the subcontractor without obtaining control over the goods and services to be transferred and normally include a profit margin. to the client. The costs and other expenses related to these services are charged directly to the Government grants and assistance client by the subcontractor. In such cases, Exyte does not recognize sales and cost of sales in the Government grants and assistance that are intended to compensate Exyte for costs that it has • Cost-plus (open-book): In the case of cost-plus (open-book) contracts, Exyte agrees with statement of comprehensive income. incurred are recognized in profit or loss, as other operating income, provided that the costs that the client on the provision of the service at a price “on proof.” In such cases, the costs must are being compensated are incurred and the prerequisites for receiving the grant or assistance be disclosed to the client. In addition, there is a percentage surcharge to cover a profit margin. Exyte recognizes sales deriving from project-related business based on the stage of completion. have been fulfilled with reasonable certainty. In the case of pure cost-plus (open-book) contracts, Exyte does not benefit from any cost To determine the stage of completion, the costs already incurred are set in relation to the savings, but also does not bear the risk of any cost overruns. estimated total costs (cost-to-cost method). The estimated total costs are based on the cost Other income and other expenses budget for the project and past experience gathered from comparable projects. Operating expenses are recognized when the relevant service is received and other sales-related • Cost-plus (open-book) with a guaranteed maximum price: In this case, Exyte bears the full risk expenses are recognized as expenses at the time they are incurred. of cost overruns without benefiting from cost savings. In such cases, however, Exyte often Exyte assesses the profitability of the projects on a monthly basis. In cases where the estimated actually agrees on a model that shares both cost savings and cost overruns with the client. costs exceed the expected sales, the entity involved sets up a provision for onerous contracts in Interest expenses and interest income are recognized applying the effective interest rate the amount of any deficit. method. • Lump-sum: With this type of contract, a fixed price is agreed for the completed project. Exyte thus benefits fully from any cost savings, but also bears the full risk of any cost overruns. The payment terms of contracts for project-related business, whose performance obligations are fulfilled over a certain period, vary, but are usually based on a contractually agreed payment Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 43 Exyte ## C. DISCRETIONARY DECISIONS, ESTIMATES, AND ASSUMPTIONS The process of preparing the consolidated financial statements requires discretionary decisions, Possible impacts on Exyte‘s accounting and reporting processes Other important future-related assumptions made and the key sources of estimation estimates, and assumptions that impact the amount and presentation of recognized assets, uncertainty at the closing date that could lead to the risk of an adjustment to the carrying liabilities, income, and expenses, as well as certain disclosures in the notes to the financial The war in Ukraine and the COVID pandemic have had only a minor impact on Exyte’s amounts of assets and liabilities within the next financial year are discussed below. statements. Although great care is taken in the quantifying such estimates and assumptions, business development and on the consolidated financial statements for the year ended taking into account the best available information, the actual figures that arise may vary December 31, 2022. from them. Significant discretionary decisions relating to the application of IFRS 15 The indirect consequences of the war in Ukraine could require the recognition of additional impairment losses on assets due to necessary amendments to planning. Postponement of Assessment of the stage of completion of work performed Uncertainties resulting from the war in Ukraine capital investment expenditure by customers could have an effect on Exyte’s planning and thus, The majority of the projects carried out by Exyte are accounted for based on the stage of in particular, on the test for impairment to goodwill. However, due to the fact that the existing completion of the work performed. In order to determine the stage of completion, the precise The Russian invasion of Ukraine, which began at the end of February 2022 and has continued surplus coverage for testing purposes is substantial, this does not constitute a risk that could assessment of the degree of completion based on the actual costs incurred in relation to the up to now, with its accompanying political and economic consequences, such as sanctions and have a significant impact on the accounting and reporting. estimated total costs is a matter of judgment. The total estimated costs are calculated at countermeasures, has given rise to considerable uncertainties for the further development the beginning of a project and include cost estimates for materials, subcontractors, and the of the global economy. The war in Ukraine can have a negative impact on sales development, In the case of open-book contracts with clients, any unexpected cost increases would not equipment and personnel that are deployed for the entire duration of the project. These cost production processes as well as procurement and logistics processes, through interruptions in have a negative impact on Exyte, as the costs incurred can be billed to the clients. The risk to estimates are reviewed periodically throughout the duration of the project and are amended in supply chains, for example. This could lead to delays in the execution of Exyte’s projects. Exyte deriving from lump-sum contracts with clients is also limited, as cost increases for these the period in which the need for adjustment is identified. contracts are usually avoided by means of back-to-back agreements with sub-contractors. Any further increase in the already high inflation levels poses the risk of a prolonged wage-price Nevertheless, negative effects on the timing and amount of expected revenue deriving from Other key estimation factors include, in particular, total contract sales, as well as contract risks. spiral. Declining real incomes and increased uncertainty could also lead to a fall in demand. contracts with clients cannot be ruled out if delays occur in the handling of the project (e.g. due These estimates are also regularly reviewed and adjusted. Further uncertainties stem from the reactions of central banks to the high rates of inflation and to restricted access to construction sites because of COVID-related restrictions) or if projects the associated impact on interest rate levels. More restrictive financing policies could lead to a are postponed. Contract amendments recession in highly developed economies and pose a risk to vulnerable emerging economies. In general, the scope of a project is specifically defined in the contract with the client. In cases Exyte would be particularly affected by these developments if clients postponed or abandoned Increases in interest rates do not have an immediately significant impact on Exyte, as the where the client wishes to modify the scope, a contract amendment (“change order”) is agreed planned capital expenditure investment. consolidated financial statements contain practically no interest-sensitive items. and signed by both parties to the contract. Contract scope increases and modifications usually lead to an adjustment of the scope of the original performance obligations and thus do not Provided that no extreme scenarios arise, Exyte does not therefore expect any significant constitute independent distinguishable services. Exyte accordingly amends the estimated Pandemic-related uncertainties future negative implications to derive from the war in Ukraine and from the COVID pandemic project costs and sales and takes these into account prospectively from the date of the contract with regard to its operational business development, and thus with respect to the Group’s amendment. A subsequent adjustment of the estimated costs and sales may become necessary Global economic development continued to be influenced by the effects of the COVID pandemic assets, liabilities, financial position and financial performance. This assessment is based on during the course of the project. in 2022. In particular, lockdowns in China – as a result of the strict zero-COVID policy adopted past experience, an analysis of the possible risks deriving from the portfolio of current and new there in 2022 – put a strain on international trade and global supply chains. It is still not possible projects, together with the results of a review of client categories and subcontractors with to reliably predict how the COVID pandemic will develop. The greatest uncertainty at present regard to any potential changes in default risks. On the other hand, any consequences deriving probably stems from the abandonment of the zero-COVID policy in China and the associated from a conceivable escalation of the war in Ukraine cannot be reliably estimated. consequences of that decision for the global economy (e.g. further aggravation of supply chain bottlenecks). Moreover, the possible emergence of more aggressive virus variants also remains an incalculable risk for the global economy. Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 44 Exyte Goodwill Accounting for pensions assesses the recoverability of deferred tax assets at each reporting date. As future business developments are subject to uncertainty, and are partly beyond management’s control, the Goodwill (€307,795 thousand; 2021: €280,945 thousand) is tested for impairment annually. Provisions for pensions (€7,406 thousand; 2021: €10,535 thousand), and hence the resultant measurement of deferred tax assets may need to be adjusted in the future. In the process of performing this test, estimates have to be made in particular with respect period-related net benefit costs, are determined in conformity with actuarial computations. Such to future cash inflows and outflows that arise in connection with the object that is subject to computations are based on key assumptions, which include discount rates, salary and pension measurement. An appropriate discount rate needs to be chosen in order to determine the trends, and life expectancies. The discount rates that are applied are based on yields that can be Other provisions recoverable amount. Any changes in the situation of the overall economy, the industry sector or earned through investment in first-class fixed-interest corporate bonds with a corresponding the organization’s business itself may lead to a reduction in the cash surpluses generated, or to term and currency. If such yield information is not available, the discount rates are based on The carrying amounts for other provisions (both non-current and current) amounted to an increase in the discount rate, which can possibly lead to the recognition of an impairment market yields for government bonds. Actual developments may vary in comparison to the €115,982 thousand (2021: €91,932 thousand). Significant estimates are required in particular for loss against goodwill. assumptions made, due to fluctuating market and economic circumstances. These may have potential losses from onerous contracts, warranty provisions, and various other provisions where a significant impact on the provisions for pensions. Any resultant differences are recognized in the amount of the obligation is uncertain. other comprehensive income in the period in which they arise. Legal disputes Determination of the contractual lease term in the case of renewal and Particularly as far as its involvement in project-related business is concerned, Exyte is regularly Income tax termination options involved in legal disputes that are contested in various jurisdictions. Such legal processes can lead to situations in which the Exyte Group entities that are affected become subject to Exyte is subject to tax regulations in many different territories. The tax amounts disclosed in Some contracts for the rental of real estate include renewal and/or termination options. Such criminal or civil sanctions, fines, or other costs. Exyte sets up provisions (€3,004 thousand; 2021: the consolidated financial statements (net balance of income tax receivables (+) and income contractual conditions offer Exyte the greatest possible operational flexibility. When determining €1,755 thousand) for such legal disputes, regulatory processes, or governmental investigations tax liabilities (–): –€17,627 thousand; 2021: –€10,392 thousand) take into account the respective the duration of the contracts, all facts and circumstances are taken into account that provide in cases where it is more probable than not that a current obligation has arisen in connection with tax legislation and pertinent opinions of the various tax administrations involved. Due to their an economic incentive to exercise or not exercise such options to change the duration of such procedures that will lead to an outflow of resources and where the amount of the obligation complexity, these may be interpreted differently by the taxpayer and by the respective local tax leases. Any potential changes in the duration resulting from the exercise or non-exercise of can be reliably estimated. Legal disputes, regulatory processes or governmental investigations authorities. In particular, differences in the interpretation of tax regulations, by the judicature and such options are only taken into account when determining the term of the contract if they are often have their basis in complex legal issues and are subject to a significant level of uncertainty. administrative bodies, can impact the amounts of tax-related reporting line items disclosed in the sufficiently certain. Such assessment is accordingly subject to discretionary decisions, estimates Accordingly, any assessment at the year-end reporting date, as to whether the prerequisites for consolidated financial statements. and assumptions. Changes in estimates have an impact on the recognized right-of-use assets the setting up a provision are fulfilled, is based on discretionary judgment. The same applies to (€129,492 thousand; 2021: €98,007 thousand) and on non-current and current lease liabilities the estimation of the amount of the provision. Deferred tax assets (€76,788 thousand; 2021: €66,371 thousand) are recognized if sufficient (€132,794 thousand; 2021: €98,200 thousand). In general, these have only a minor impact on future taxable income is available, against which expenses deriving from the reversal of profit and loss. Exyte regularly assesses the current status of legal disputes, by also involving external lawyers. deductible temporary differences or tax loss carryforwards can be offset. The estimate of Due to new developments, it may become necessary for a provision for an ongoing legal this income takes into account, among other things, planned results from operating business dispute to be recognized for the first time in future or to adjust the amount involved. Changes activities, the effects on earnings deriving from the reversal of taxable temporary differences, as in estimates and assumptions over time can have a significant effect on future financial well as planned tax strategies. Based on the planned future taxable income, the management performance. In the event of an unfavorable outcome deriving from ongoing litigation, Exyte could incur expenses in excess of the provisions recognized in the statement of financial position. Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 45 Exyte ## D. NOTE DISCLOSURES FOR INDIVIDUAL ITEMS 1 Sales Analysis of sales Transaction prices to be allocated to performance obligations that are still outstanding The following table shows the analysis of sales by regional segment deriving from contracts with The following table shows sales that are expected to arise from the fulfillment of performance clients. We make reference to Note 30: “Segment information” for more detailed information obligations that existed at the reporting date: concerning the reportable segments. Expected sales from performance obligations – December 31, 2022 Sales from client contracts, by regional segment – 2022 in € thousand in € thousand 2023 2024 2025 Total Consolidation EMEA AMER APAC T&S adjustments ­Exyte 5,798,975 1,016,641 86,055 6,901,671 Sales recognized over a period of time 2,109,101 559,985 4,230,478 462,988 –198,574 7,163,978 Sales recognized at a point in time 0 0 8,522 311,908 –81,730 238,700 Expected sales from performance obligations – December 31, 2021 Total 2,109,101 559,985 4,239,000 774,896 –280,304 7,402,678 in € thousand 2022 2023 2024 Total Sales from client contracts, by regional segment – 2021 5,502,878 779,775 222,586 6,505,239 in € thousand Consolidation EMEA AMER APAC T&S adjustments ­Exyte All contracts have been measured at their transaction prices, including any agreed contract amendments. Sales recognized over a period of time 2,441,060 423,295 1,731,249 288,941 –120,764 4,763,781 Sales recognized at a point in time 0 0 668 137,884 –37,479 101,073 Only performance obligations that are part of a contract with an expected original term of more than one year are disclosed. Total 2,441,060 423,295 1,731,917 426,825 –158,243 4,864,854 As was the case in the previous year, as of the closing date, no costs relating to the initiation of contracts were recognized as assets. 2 Cost of sales The cost of sales (costs of generation of goods sold and of services rendered) during the The cost of goods also includes the expenses relating to the set-up of provisions for warranty financial year amounted to –€6,813,724 thousand (2021: –€4,475,421 thousand). claims and for potential losses deriving from onerous contracts. Reversals of provisions for warranty claims and potential losses deriving from onerous contracts, amounting to The cost of sales reporting line discloses the costs incurred in respect of the sales generated. €2,448 thousand (2021: €5,204 thousand), reduced the cost of sales. These mainly comprise material costs, costs of third-party services and personnel costs relating to the productive area. In addition, the cost of sales also includes any depreciation and 3 Selling costs amortization charges that are attributable to the generation process. Selling costs in the financial year amounted to –€50,458 thousand (2021: –€40,444 thousand). These mainly consist of costs of personnel and materials or services incurred by the sales organization, expenses in connection with the preparation of proposals for projects that were not awarded, or which could not be charged to the clients concerned, as well as marketing expenses, public relations costs, and advertising expenses. Furthermore, amortization and depreciation charges that are attributable to the sales area are also included. Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 46 Exyte 4 Administration costs The gain on the disposal of consolidated entities, amounting to €4,270 thousand in financial –€7,170 thousand (2021: €0 thousand) of the total expenses deriving from the recognition Administration costs, amounting to –€141,657 thousand (2021: –€93,974 thousand) mainly year 2022 (2021: €237 thousand), derived from the liquidation-related deconsolidation of of impairment allowances and the derecognition of receivables, amounting in total to include costs of personnel and materials or services incurred by administrative functions, as Exyte Rus, LLC. –€8,197 thousand (2021: –€2,895 thousand), relate to contract assets and trade receivables well as amortization and depreciation charges that are attributable to the administration area. due from a US American client. –€11,757 thousand of the overall increase of –€47,683 thousand derives from the fact that a full The income from government grants, amounting to €3,919 thousand (2021: €2,872 thousand), year’s costs of CPS Group, which was acquired as of November 1, 2021, were included for the mainly includes incentives of €3,699 thousand (2021: €2,654 thousand) granted by the Chinese COVID-related costs, amounting to –€452 thousand (2021: –€3,727 thousand) include, in first time in the consolidated financial statements. The remaining increase of –€35,926 thousand government. The Chinese company was entitled to claim a partial tax repayment as an incentive particular, expenses for the continued payment of salaries during shutdown periods in Asia, is mainly due to costs incurred to support the overall growth strategy, as well as costs related to fund to support its business activities. which are offset by corresponding income from government support programs (refer to the design and implementation of a new ERP system. the information contained in the note on other operating income). In addition, these costs Income deriving from the reimbursement of costs related to COVID-19, amounting to also include expenses for hygiene measures and additional accommodation costs incurred 5 Other operating income €1,083 thousand (2021: €6,695 thousand), mainly results from government COVID support because of government quarantine regulations (especially in Asia). programs in Asia. Other operating income 7 Net income from financing activities in € thousand The income deriving from tax credits for research and development activities, amounting 2022 2021 to €468 thousand (2021: €0 thousand), resulted from a Group company located in the Net income from financing activities United Kingdom. in € thousand Gain on the disposal of consolidated entities 4,270 237 2022 2021 Income from government grants 3,919 2,872 6 Other operating expenses Interest and similar income 110,319 35,876 Income deriving from the charge-out of services to Other operating expenses Foreign exchange gains (related parties) 5,049 6,171 third parties and from leases 3,535 970 in € thousand Foreign exchange gains (third parties) 93,575 27,512 Income from services charged out to entities 2022 2021 belonging to the M+W Group GmbH Group 1,561 1,743 Income from charge-on of fees for bank guarantees 159 370 Expenses deriving from the recognition of impairment Income from the reversal of allowances for impairment allowances and the derecognition of receivables –8,197 –2,895 Miscellaneous interest and similar income 11,536 1,823 and from the receipt of payments for previously Restructuring and reorganization expenses –3,786 –1,943 Interest and similar expenses –102,573 –37,263 derecognized receivables 1,151 2,725 Taxes other than income tax –1,302 –1,873 Foreign exchange losses (related parties) –26,784 –18,957 Income deriving from the reimbursement of costs related to COVID-19 1,083 6,695 Expenses deriving from services charged out to entities Foreign exchange losses (third parties) –69,877 –15,041 belonging to the M+W Group GmbH Group –1,510 –1,697 Income deriving from tax credits for research and Expenses for fees for bank guarantees –1,682 –1,861 development activities 468 0 COVID-19 related costs –452 –3,727 Interest portion of lease Installments deriving Gains on the disposal of intangible assets and Losses on the disposal of intangible assets and from lease liabilities –1,853 –1,062 property, plant and equipment 10 1,738 property, plant and equipment –317 –327 Interest expense deriving from the unwinding of Miscellaneous other items 2,624 2,843 Miscellaneous other items –2,860 –4,760 discount on provisions for pensions –104 –69 Total 18,621 19,823 Total –18,424 –17,222 Miscellaneous interest and similar expenses –2,273 –273 Net income from financing activities (net total) 7,746 –1,387 Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 47 Exyte 8 Income tax Based on origin, the figure for income tax is made up as follows: Deferred tax assets amounting to €11,142 thousand (2021: €10,506 thousand) were set Income tax comprises taxes on income paid or owed in the various individual territories (current up in respect of these utilizable losses. No further deferred tax assets were recognized in tax) and deferred tax. The computation of the expense for income tax is made using the tax rates respect of the remaining corporation tax loss carryforwards, amounting to €143,481 thousand that are valid, or that have been announced for the future, as of the year-end reporting date. Income tax, based on origin (2021: €132,838 thousand) and municipal trade tax loss carryforwards of €51,525 thousand in € thousand (2021: €38,191 thousand). €1,476 thousand (2021: €1,925 thousand) of the foreign tax loss Deferred tax assets and deferred tax liabilities are presented as separately reported line items 2022 2021 carryforwards will expire in the next five years. in the statement of financial position. They provide clarity concerning the tax effects of a future reduction of temporary differences or the future use of tax loss carryforwards. Current income tax –70,417 –41,846 In addition, Exyte has available tax credits of €4,424 thousand (2021: €16,018 thousand), which Deferred tax 14,635 2,157 mainly existed in Germany in financial year 2022. In the previous year, €13,185 thousand of these The process of measurement of deferred tax takes the relevant national income tax rates into related to the USA. No deferred tax assets were recognized in the past as the tax credits were account. For domestic companies, as of the respective year-end reporting dates, deferred tax Deferred tax deriving from temporary differences 13,364 4,763 assessed to be not utilizable. As their utilization is assessed to be improbable, these losses have was calculated using a corporation tax rate of 15.0% plus a respective solidarity tax surcharge Deferred tax deriving from tax loss carryforwards no longer been reported as of December 31, 2022. A deferred tax asset of €267 thousand (2021: of 5.5% based on the corporation tax, as well as using an effective rate of 14.7% in respect of and tax credits 1,271 –2,606 €538 thousand) was recognized in respect of the utilizable tax credits. municipal trade tax. After considering the solidarity tax surcharge and municipal trade tax, the tax rate of 30.53% – determined for computation of deferred tax for the German companies – Total –55,782 –39,689 Deferred tax credits, amounting to €167 thousand (2021: €41 thousand) arose from changes in is unchanged from the previous year. Thereof: current income tax relating to prior periods –1,835 1,164 tax rates. These arose mainly due to changes in tax legislation in the United Kingdom. For foreign companies, deferred tax is calculated using the specific tax rates that are valid for the Thereof: deferred tax relating to prior periods 2,757 –1,018 Deferred tax liabilities amounting to €5,702 thousand (2021: €1,032 thousand) were recognized respective territories. for temporary differences in connection with investments in subsidiaries, as it is currently probable that the temporary differences will reverse in this amount due to dividend payments in Current and deferred taxes are recorded in profit or loss unless they relate to items that have At the year-end reporting date, Exyte had unutilized domestic and foreign corporation tax the following year. In the event of a distribution, these dividends will be taxed in Germany at a rate been recognized in other comprehensive income or directly in equity, without impacting profit loss carryforwards, amounting to €188,997 thousand (2021: €179,348 thousand), as well as of 5% or will respectively be subject to foreign withholding tax. or loss. In such a case, the deferred tax is also accounted for in comprehensive income or unutilized municipal trade tax loss carryforwards in Germany of €68,054 thousand (2021: equity without impacting profit or loss. €46,906 thousand). Deferred tax liabilities of €284,128 thousand (2021: €330,726 thousand) were not recognized for temporary differences in connection with participatory investments in subsidiaries because The management’s assessment is that in all probability, sufficient future taxable income will be Exyte is able to control the timing of the reversal of the temporary differences and these will not generated to offset €45,516 thousand (2021: €46,510 thousand) of the tax losses carried forward reverse in the foreseeable future. that have not yet been utilized for corporation tax purposes and to offset €16,529 thousand (2021: €8,715 thousand) of the tax losses carried forward that have not yet been utilized for The following deferred tax assets and deferred tax liabilities were set up in respect of recognition municipal trade tax purposes. and measurement differences relating to individual line items in the statement of financial position and in respect of tax loss carryforwards: Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 48 Exyte Deferred tax relating to separate line items in the statement of financial position Deferred tax of €2,389 thousand (2021: €1,921 thousand) relates to business transactions in € thousand that had to be recognized directly in equity. Deferred tax recognized directly in equity mainly Deferred tax assets Deferred tax liabilities derives from the measurement of pension provisions (€306 thousand; 2021: €1,273 thousand) and from the measurement of forward exchange transactions, as part of cash flow hedges 31.12.2022 31.12.2021 31.12.2022 31.12.2021 (€2,083 thousand; 2021: €648 thousand) Non-current assets 16,868 16,016 –50,739 –39,403 The measurement of deferred tax assets resulting from deductible temporary differences and Intangible assets 15,271 14,508 –18,101 –18,892 tax loss carryforwards is based on underlying tax-planning calculations and is derived from multi- annual planning and business strategy information. Such tax planning calculations show that it Property, plant and equipment 207 34 –32,575 –20,415 is highly probable that sufficient taxable income can be expected over the period covered by the Financial assets 1,390 1,474 –63 –96 planning horizon to confirm the viability of the deferred tax assets deriving from both deductible temporary differences and tax loss carry forwards. This assessment is particularly based on Current assets 7,459 51,141 –47,089 –34,433 the achievement of the Group’s strategic objectives, which are aiming to result in an improved Inventories 686 1,445 0 0 earnings situation. In case of a history of losses, recognition of deferred tax assets is mandatory if there is convincing substantial evidence that sufficient taxable income will become available Receivables and other assets 6,773 49,696 –47,089 –34,433 from ongoing business operations. Non-current liabilities 28,201 20,221 –108 –66 The following table shows the tax reconciliation of the expected tax expense and the actual tax Provisions 2,974 4,185 –1 –66 expense reported. For purposes of determining the expected tax expense the currently valid – Liabilities 25,227 16,036 –107 0 and unchanged – domestic tax rate of 30.53% for the financial year 2022 was applied. ## Current liabilities 121,002 131,040 –24,881 –101,735 Provisions 8,995 7,593 –396 –788 Liabilities 112,007 123,447 –24,485 –100,947 Tax loss carryforwards 49,451 44,627 – – Tax credits 2,043 3,871 – – Gross value 225,024 266,916 –122,817 –175,637 Write-downs –40,134 –38,008 – – Set-offs –108,102 –162,537 108,102 162,537 Recognition in the statement of financial position 76,788 66,371 –14,715 –13,100 Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 49 Exyte ## Reconciliation of the expected and actual tax expense 9 Intangible assets in € thousand 2022 2021 Development of intangible assets in € thousand Earnings before tax 404,782 256,229 Client Expected tax expense –123,580 –78,227 relationships, Patents, Development non-competition trademarks, Adjustments to the expected tax expense: costs agreements software Goodwill Total Non-tax-deductible expenses –8,545 –5,100 Costs of acquisition or generation Tax-free income 39,058 20,371 Balance: 1.1.2022 613 46,236 23,847 280,945 351,641 Change in write-downs of deferred tax assets Currency impacts 0 1,864 728 7,704 10,296 and impacts deriving from losses in the current year, Changes to the scope of the consolidation 0 9,869 3,137 19,146 32,152 for which no deferred tax was recognized –5,011 –7,753 Additions 0 0 402 0 402 Permanent differences –871 1,535 Disposals 0 0 0 0 0 Deviations from the expected tax rate 51,098 37,711 Costs of acquisition or generation Effects deriving from municipal trade tax add-ons Balance: 31.12.2022 613 57,969 28,114 307,795 394,491 and deductions –331 284 Accumulated amortization/write-downs Impacts of changes in tax rates 167 41 Balance: 1.1.2022 –343 –789 –11,775 0 –12,907 Tax not related to the current reporting period 922 146 Currency impacts 0 8 –315 0 –307 Foreign and other local income taxes –10,604 –7,048 Changes to the scope of the consolidation 0 0 0 0 0 Other tax effects 1,915 –1,649 Additions –46 –3,470 –4,140 0 –7,656 Actual tax expense –55,782 –39,689 Disposals 0 0 0 0 0 Group tax rate 13.8 % 15.5 % Accumulated amortization/write-downs Balance: 31.12.2022 –389 –4,251 –16,230 0 –20,870 Carrying amount: 31.12.2022 224 53,718 11,884 307,795 373,621 ”Foreign and other local income taxes” mainly include tax on the results of foreign operations and foreign withholding tax. Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 50 Exyte Development of intangible assets As was the case in the previous year, there were no commitments for the purchase of intangible in € thousand assets as of the closing date. Client relationships, Patents, Amortization charges on intangible assets, amounting to –€7,656 thousand (2021: Development non-competition trademarks, –€1,671 thousand), were recorded in cost of sales (–€7,064 thousand; 2021: –€1,135 thousand) costs agreements software Goodwill Total and in administration costs (–€592 thousand; 2021: –€531 thousand). In the previous year, –€5 thousand was also recorded in other operating expenses. Costs of acquisition or generation Balance: 1.1.2021 613 1,856 11,906 131,787 146,162 As in the previous year, the annual test for impairment was made at the level of groups of cash- Currency impacts 0 1,091 298 3,561 4,950 generating units (CGUs) and was carried out in an unchanged manner at the end of the financial year. Exyte has identified the respective regional segments EMEA, AMER, APAC, and T&S as Changes to the scope of the consolidation 0 44,826 11,347 145,597 201,770 groups of CGUs. Additions 0 0 354 0 354 The recoverable amount for purposes of the impairment test of goodwill is determined as the Disposals 0 –1,537 –58 0 –1,595 value in use. The estimation of cash flows from the continued use of the CGU groups is based Costs of acquisition or generation on the most recent medium-term planning approved by management for a planning horizon of Balance: 31.12.2021 613 46,236 23,847 280,945 351,641 three years (earnings, statement of financial position and cash flow planning). The medium-term planning is based, among other things, on the existing order backlog and the expectation of Accumulated amortization/write-downs future project acquisitions. Cash flows beyond the planning horizon of the medium-term plan are Balance: 1.1.2021 –297 –1,787 –10,685 0 –12,769 extrapolated for each group of CGUs using individual planning assumptions. Currency impacts 0 –22 –38 0 –60 The following are the most significant planning assumptions used for the groups of CGUs: Changes to the scope of the consolidation 0 0 –2 0 –2 • The medium-term plan for EMEA for the years 2023 to 2025 forecasts sales for EMEA in 2023 Additions –46 –517 –1,108 0 –1,671 that remain generally stable, and significantly increasing sales from 2024 on, accompanied by Disposals 0 1,537 58 0 1,595 a more-or-less stable EBITDA margin. Increasing sales and improving EBITDA margins are forecast for AMER and T&S. For APAC, a decrease in sales is expected, accompanied by a slight Accumulated amortization/write-downs declining EBITDA margin. Balance: 31.12.2021 –343 –789 –11,775 0 –12,907 Carrying amount: 31.12.2021 270 45,447 12,072 280,945 338,734 • The sales expectations for EMEA, AMER, and APAC for purposes of the perpetual annuity were derived to an extent of 50% from the sales for the final planning year and to an extent of 50% from the average sales of the actual years 2018 to 2022 and for the plan years 2023 to 2025, in order to take fluctuations in regional business into account. Based on this, the EBITDA margin for the final planning year was then applied. Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 51 Exyte • For T&S, both the sales revenue and EBITDA of the final planning year were used to derive the The discount rates used to calculate the present value, as well as the allocation of goodwill to As had been the case in the previous year, the impairment test resulted in no requirement to perpetual annuity. the groups of CGUs, are presented below: recognize an impairment loss against the carrying amount of goodwill in the financial year. • For EMEA, AMER, APAC and T&S, sustainable growth of 0.25% was calculated for purposes of For purposes of a sensitivity analysis conducted for the groups of CGUs to which significant the perpetual annuity. Goodwill analyzed by groups of cash-generating units goodwill is allocated, a sustainable EBITDA margin in the amount of the actual EBITDA margin for 2022 (no future margin increase), or an increase in the WACC by 2 percentage points, or a The values in use that were determined are not only dependent on the forecast future cash WACC WACC reduction in the long-term growth rate to 0%, were assumed. On this basis, there was also no flows, but are also particularly influenced by the discount rates used to determine the present before tax Tax rate after tax Goodwill need for an impairment loss to be recognized for any of these groups of CGUs. value. The discount rates applied are based on the weighted average cost of capital (WACC) 31.12.2022 (in %) (in %) (in %) (in € thousand) concept. EMEA 12.0 22.7 9.3 58,474 The WACC is individually determined based on a risk-free interest rate and a market risk premium AMER 13.2 25.6 9.8 9,701 for each group of CGUs. In addition, the discount rates reflect a current market assessment of specific risks by taking into account beta factors and the debt ratios of a specific peer group, as APAC 12.2 21.2 9.6 50,422 well as country-specific premiums. The parameters used to determine the discount rates are T&S 12.5 24.8 9.4 189,198 based on external information sources. The peer group used is subject to an annual review and is adjusted if necessary. ## Goodwill analyzed by groups of cash-generating units WACC WACC before tax Tax rate after tax Goodwill 31.12.2021 (in %) (in %) (in %) (in € thousand) EMEA 10.8 19.8 8.7 58,474 AMER 11.3 25.3 8.4 9,701 APAC 10.6 20.2 8.5 50,422 T&S 11.0 24.6 8.3 162,348 Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 52 Exyte ## 10 Property, plant and equipment ## Development of property, plant and equipment in € thousand Other equipment, Technical operational, Land and equipment and office Assets under buildings and machinery equipment construction Total Costs of acquisition or construction Balance: 1.1.2022 1,929 15,719 81,081 2,418 101,147 Currency impacts –83 92 1,547 162 1,718 Changes to the scope of the consolidation 0 200 395 0 595 Additions 1 5,280 10,171 8,624 24,076 Disposals 0 –839 –1,932 –188 –2,959 Transfers 0 4,411 –1,761 –2,650 0 Costs of acquisition or construction Balance: 31.12.2022 1,847 24,863 89,501 8,366 124,577 Accumulated depreciation and write-downs Balance: 1.1.2022 –824 –9,662 –52,228 0 –62,714 Currency impacts 37 21 –980 0 –922 Changes to the scope of the consolidation 0 –124 –113 0 –237 Additions –40 –2,787 –8,819 0 –11,646 Disposals 0 516 1,692 0 2,208 Transfers 0 –1,123 1,123 0 0 Accumulated depreciation and write-downs Balance: 31.12.2022 –827 –13,159 –59,325 0 –73,311 Carrying amount: 31.12.2022 1,020 11,704 30,176 8,366 51,266 Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 53 Exyte ## Development of property, plant and equipment in € thousand Other equipment, Technical operational, Land and equipment and and office Assets under buildings machinery equipment construction Total Costs of acquisition or construction Balance: 1.1.2021 30,487 16,403 64,726 35 111,651 Currency impacts 142 1,010 4,049 64 5,265 Changes to the scope of the consolidation 27 4,232 9,134 1,629 15,022 Additions 12 530 7,631 1,043 9,216 Disposals –28,739 –6,774 –4,476 –18 –40,007 Transfers 0 318 17 –335 0 Costs of acquisition or construction Balance: 31.12.2021 1,929 15,719 81,081 2,418 101,147 Accumulated depreciation and write-downs Balance: 1.1.2021 –2,213 –8,694 –44,535 0 –55,442 Currency impacts –57 –709 –3,110 0 –3,876 Changes to the scope of the consolidation –12 –1,955 –2,543 0 –4,510 Additions –161 –843 –6,003 0 –7,007 Disposals 1,619 2,539 3,963 0 8,121 Accumulated depreciation and write-downs Balance: 31.12.2021 –824 –9,662 –52,228 0 –62,714 Carrying amount: 31.12.2021 1,105 6,057 28,853 2,418 38,433 As in the previous year, there were no restrictions on the disposal of property, plant and equipment, nor were there any obligations to purchase property, plant and equipment. Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 54 Exyte ## 11 Right-of-use assets and lease liabilities ## Development of right-of-use assets in € thousand Other equipment, Land and operational, and buildings office equipment Total Costs of acquisition or construction Balance:1.1.2022 124,810 13,232 138,042 Currency impacts 1,418 –332 1,086 Changes to the scope of the consolidation 3,347 0 3,347 Additions 52,667 4,322 56,989 Disposals –8,081 –3,863 –11,944 Remeasurement/contract amendments 1,712 260 1,972 Costs of acquisition or construction Balance: 31.12.2022 175,873 13,619 189,492 Accumulated depreciation and write-downs Balance: 1.1.2022 –33,128 –6,907 –40,035 Currency impacts –669 161 –508 Additions –26,910 –4,491 –31,401 Disposals 8,081 3,863 11,944 Accumulated depreciation and write-downs Balance: 31.12.2022 –52,626 –7,374 –60,000 Carrying amount: 31.12.2022 123,247 6,245 129,492 Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 55 Exyte ## Development of right-of-use assets Development of the lease liabilities in € thousand in € thousand Other equipment, 2022 2021 Land and operational, and Opening balance as at 1.1. 98,200 64,917 buildings office equipment Total Currency impacts 595 2,925 Costs of acquisition or construction Balance: 1.1.2021 81,780 11,344 93,124 Changes to the scope of the consolidation 3,489 4,491 Currency impacts 3,961 611 4,572 Additions 56,325 47,889 Changes to the scope of the consolidation 4,864 0 4,864 Interest expense deriving from the unwinding of discount 1,853 1,062 Additions 45,335 3,237 48,572 Payments of interest and principal –29,630 –22,119 Disposals –9,969 –2,053 –12,022 Remeasurement/contract amendments 1,962 –965 Remeasurement/contract amendments –1,161 93 –1,068 Closing balance as at 31.12. 132,794 98,200 Costs of acquisition or construction Balance: 31.12.2021 124,810 13,232 138,042 Accumulated depreciation and write-downs The interest rates used to determine the present value of the lease liabilities vary between 0.1% Balance: 1.1.2021 –22,701 –4,647 –27,348 and 7.1% (2021: 0.3% and 4.8%). ## Currency impacts –1,291 –308 –1,599 Changes to the scope of the consolidation –331 0 –331 Additions –18,639 –4,005 –22,644 Disposals 9,834 2,053 11,887 Accumulated depreciation and write-downs Balance: 31.12.2021 –33,128 –6,907 –40,035 Carrying amount: 31.12.2021 91,682 6,325 98,007 Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 56 Exyte Amounts recognized in the consolidated statement of comprehensive income 12 Inventories and advance payments made 13 Contract assets and liabilities deriving from leases in € thousand Carrying amounts for inventories Contract balances 2022 2021 in € thousand in € thousand 31.12.2022 31.12.2021 31.12.2022 31.12.2021 Depreciation of right-of-use assets –31,401 –22,644 Raw materials, consumables, and supplies 56,883 33,165 Contract assets 456,095 288,440 Interest expenses deriving from the unwinding of discount on lease liabilities –1,853 –1,062 Work in process 22,614 14,605 Contract liabilities 993,127 906,879 Expenses deriving from short-term leases –7,948 –7,725 Finished goods, merchandise for resale 10,864 7,664 Expenses for other leases relating to assets of low value –1,257 –1,348 Inventories 90,361 55,434 Sales include an amount of €890,083 thousand (2021: 250,925 thousand) that had been Net gain/loss deriving from remeasurement/ disclosed as contract liabilities at the beginning of the financial year. contract amendments 15 206 Gain deriving from sale-and-lease-back transactions 0 1,722 Impairment losses of –€1,762 thousand were recognized against inventories in financial year Sales deriving from performance obligations fulfilled in previous financial years amounted to 2022 (2021: –€1,653 thousand). The impairment losses were recognized due to the slow €66,421 thousand (2021: €64,168 thousand); these were mainly generated with major European movement of the related inventories. and Asian clients. Amounts recognized in the consolidated statement of cash flows deriving from leases Advance payments made Allowances for losses on contract assets amounted to –€7,536 thousand at the year-end in € thousand The advance payments made, amounting to €251,956 thousand (December 31, 2021: reporting date (December 31, 2021: –€489 thousand). 2022 2021 €125,018 thousand), mainly result from advance payments to sub-suppliers in the project business sector. Their total balance increased by €126,938 thousand in financial year 2022 Interest paid –1,853 –1,062 (2021: €118,545 thousand). Cash flow from operating activities –1,853 –1,062 The consumption of inventories and the utilization of advance payments made resulted in Proceeds from lease receivables 51 96 the recognition of expenses of –€112,622 thousand (2021: –€82,774 thousand). Payments for the redemption of lease liabilities –27,777 –21,057 Cash flow from financing activities –27,726 –20,961 Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 57 Exyte The following table includes an analysis of the credit quality of the contract assets: The gross carrying amounts were used as the measurement basis for the expected credit losses. The increase in the allowances for losses in the category “Credit standing not impaired (collective)” was due to the higher carrying amounts for the contract assets and resulted from Default risks for contract assets – financial year 2022 the higher business volumes. The allowance for losses set up for the category “Credit standing impaired (individual)” derives from expected payment defaults for a US American client. The Default risk – rating classes Credit loss methods and input parameters that are used to determine the allowances are described in the section “Recognition and measurement.” Gross carrying amount Credit standing not impaired Credit standing impaired Average loss Internal rating class External rating class (in € thousand) (collective) (in € thousand) (individual) (in € thousand) allowance rate (in %) 14 Trade receivables Rating class 1 AAA to A 209,451 –137 0 0.07 Carrying amount of trade receivables Rating class 2 BBB 57,825 –284 0 0.49 in € thousand Rating class 3 BB 124,826 –165 0 0.13 31.12.2022 31.12.2021 Rating class 4 B to D 46,443 –161 0 0.35 Trade receivables due from other than related parties 834,625 691,605 No rating1 – 25,086 –94 –6,695 27.06 Trade receivables due from entities belonging to the M+W Group GmbH Group 709 2,237 Total 463,631 –841 –6,695 1.63 Trade receivables due from other non-consolidated 1 On the one hand, clients with balances that are not material are directly allocated to a territory risk classification (average default risk for a business in a particular territory); on the other hand, Exyte has top clients subsidiaries 141 141 for which no risk classification is available. For these latter clients, the territory risk classification was also applied for purpose of determining the amount of the allowance. Total 835,475 693,983 ## Default risks for contract assets – financial year 2021 The fair values of the trade receivables roughly correspond to their carrying amounts. Default risk – rating classes Credit loss Gross carrying amount Credit standing not impaired Credit standing impaired Average loss Internal rating class External rating class (in € thousand) (collective) (in € thousand) (individual) (in € thousand) allowance rate (in %) Rating class 1 AAA to A 149,788 –86 0 0.06 Rating class 2 BBB 46,178 –118 0 0.26 Rating class 3 BB 34,265 –138 0 0.40 Rating class 4 B to D 49,920 –124 0 0.25 No rating1 – 8,778 –23 0 0.27 Total 288,929 –489 0 0.17 1 On the one hand, clients with balances that are not material are directly allocated to a territory risk classification (average default risk for a business in a particular territory); on the other hand, Exyte has top clients for which no risk classification is available. For these latter clients, the territory risk classification was also applied for purpose of determining the amount of the allowance. Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 58 Exyte The development of allowances that were set up for trade receivables due from other than related parties (–€6,090 thousand; December 31, 2021: –€6,156 thousand) is shown below: Allowances set up for trade receivables due from other than related parties in € thousand Credit loss 2022 Credit loss 2021 ## Credit standing Credit standing Credit standing Credit standing not impaired impaired not impaired impaired (collective) (individual) (collective) (individual) Allowance at the start of the financial year –342 –5,814 –339 –8,603 Changes to the scope of the consolidation –2 0 –16 0 Increase –282 –430 –95 –1,115 Utilization/derecognition 0 219 0 3,433 Reversal/payment received 50 880 131 1,011 Currency impacts 1 –370 –23 –540 Allowance at the end of the financial year –575 –5,515 –342 –5,814 Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 59 Exyte The following table includes an analysis of the credit quality of the trade receivables due from other than related parties: Default risk for trade receivables due from other than related parties – financial year 2022 ## Default risk – rating classes Credit loss Gross carrying amount Credit standing not impaired Credit standing impaired Average Impairment Internal rating class External rating class (in € thousand) (collective) (in € thousand) (individual) (in € thousand) allowance rate (in %) Rating class 1 AAA to A 448,564 –86 – 0.02 Rating class 2 BBB 115,827 –64 – 0.06 Rating class 3 BB 62,570 –20 – 0.03 Rating class 4 B to D 178,808 –365 – 0.20 No rating1 – 34,946 –40 –5,515 15.90 Total 840,715 –575 –5,515 0.72 1 On the one hand, client receivables that are not material are directly allocated to a territory risk classification (average default risk for a business in a particular territory); on the other hand, Exyte has top clients for which no risk classification is available. For these latter clients, the territory risk classification was also applied for purpose of determining the amount of the allowance. Default risk for trade receivables due from other than related parties – financial year 2021 ## Default risk – rating classes Credit loss Gross carrying amount Credit standing not impaired Credit standing impaired Average Impairment Internal rating class External rating class (in € thousand) (collective) (in € thousand) (individual) (in € thousand) allowance rate (in %) Rating class 1 AAA to A 399,453 –78 – 0.02 Rating class 2 BBB 72,449 –51 – 0.07 Rating class 3 BB 26,860 –22 – 0.08 Rating class 4 B to D 142,555 –142 –415 0.39 No rating1 – 56,444 –49 –5,399 9.65 Total 697,761 –342 –5,814 0.88 1 On the one hand, client receivables that are not material are directly allocated to a territory risk classification (average default risk for a business in a particular territory); on the other hand, Exyte has top clients for which no risk classification is available. For these latter clients, the territory risk classification was also applied for purpose of determining the amount of the allowance. Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 60 Exyte The increase in the allowances for losses in the category “Credit standing not impaired 15 Other financial assets As of December 31, 2022, no disposition restrictions existed in respect of the other financial (collective)” was due to the higher carrying amounts for the receivables and resulted from the receivables. In the previous year, a disposition restriction had existed with respect to a repayment higher business volumes. The methods and input parameters that are used to determine the loss Other financial assets claim deriving from a provisional purchase price payment (€817 thousand). allowances are described in the section “Recognition and measurement.” in € thousand 31.12.2022 31.12.2021 16 Miscellaneous assets In respect of those receivable balances that had a credit standing that was not impaired, there were no indications at the year-end reporting date that the debtors would not meet their Security deposits 1,368 946 Miscellaneous assets payment obligations. Before entering into a relationship with a new client, Exyte’s management Derivative financial instruments 0 118 in € thousand verifies the creditworthiness of the potential contractual partner by means of an external credit 31.12.2022 31.12.2021 check. In determining the recoverability of trade receivables, any changes in the credit rating Share interests in non-consolidated affiliated entities 15 15 between the initial granting of payment terms and the year-end reporting date are taken into Refundable input VAT 18,712 6,573 Other financial assets (non-current) 1,383 1,079 account. There is no notable concentration of credit risks due to the widespread client base Prepaid expenses and deferred charges 18,048 17,845 and because no correlations exist. Accordingly, the executive management’s opinion is that the Financial receivables from non-consolidated affiliated existing risk provisions are adequate. entities and joint ventures 1,418 1,497 Other tax receivables 899 369 ## Financial receivables from entities belonging Sundry miscellaneous assets 2 10 The gross carrying amount of the trade receivables due from entities belonging to the M+W to the M+W Group GmbH Group 0 1,184 Group GmbH Group amounted to €709 thousand (December 31, 2021: €2,237 thousand). As Miscellaneous assets (current) 37,661 24,797 had been the case in the previous year, there was no necessity for recognition of allowances Time deposits with banks 23,000 0 against receivables due from entities belonging to the M+W Group GmbH at the reporting date. Derivative financial instruments 14,078 4,955 The same applies to the receivables due from non-consolidated subsidiaries, amounting to The prepaid expenses and deferred charges (€18,048 thousand; December 31, 2021: €141 thousand (December 31, 2021: €141 thousand). Security deposits and other deposits 6,695 7,876 €17,845 thousand) particularly relate to prepayments of IT license costs that will lead to expenses in subsequent periods. Debit balances on accounts payable 639 1,038 Receivables from employees 439 567 17 Cash and cash equivalents Finance lease receivables 43 94 Cash and cash equivalents Repayment claim deriving from a provisional purchase in € thousand price payment 0 817 31.12.2022 31.12.2021 Loans receivable from third parties 0 60 Cash and cash equivalents 1,592,435 1,148,911 Miscellaneous other financial assets 5,223 5,238 Other financial assets (current) 51,535 23,326 Cash and cash equivalents are made up of cash on hand, checks and bank balances that are readily available, with an original term of up to three months. These are measured at amortized cost. The remaining term to maturity of the time deposits with banks (€23,000 thousand; December 31, 2021: €0 thousand) ranges between three and twelve months and relates As had been the case in the previous year, none of the cash and cash equivalent balances served to Exyte GmbH. as collateral security for obligations incurred by the Group. The gross carrying amounts of financial receivables due from other non-consolidated subsidiaries and joint ventures amounted to €2,240 thousand (December 31, 2021: €2,319 thousand). As was the case in the previous year, loss allowances on these financial receivables amounted to –€822 thousand at the reporting date. As was the case in the previous year, no loss allowances had been recognized in respect of financial receivables due from entities belonging to the MW Group GmbH Group. Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 61 Exyte 18 Equity The composition of the pension provisions, reflecting the present value of the defined benefit Development of the fair value of the plan assets The development of Exyte’s equity is presented in the statement showing the development of obligations and the fair value of the plan assets, is as follows: in € thousand consolidated equity. All the equity is attributable to the parent company as sole shareholder. 2022 2021 As of December 31, 2022, the share capital of €150,000 thousand and the capital reserve of Composition of the provisions for pensions Balance at 1.1. 153 130 €36,585 thousand were unchanged compared to the previous year. in € thousand Employer contributions 7 7 31.12.2022 31.12.2021 19 Corporate retirement benefits Interest income 1 3 Provisions for pension obligations are set up for benefit plans in respect of promises relating Present value of unfunded obligations (Germany only) 6,108 9,144 Currency impacts 4 13 to retirement, invalidity and surviving dependent benefits. The benefits provided by the Group Present value of funded obligations (Taiwan) 1,463 1,544 vary depending on legal, tax and economic factors that are relevant in the respective territories Balance at 31.12. 165 153 and are usually dependent upon length of service and the remuneration level of employees. Fair value of plan assets (Taiwan) –165 –153 Corporate retirement benefits are provided by Exyte both in the form of defined contribution and Provisions for pensions 7,406 10,535 defined benefit plans. Composition of the expenses deriving from pension obligations recognized Defined contribution plans in the consolidated statement of comprehensive income In the case of defined contribution plans, the organization pays contributions based on statutory The plan assets relate solely to a Taiwanese company. The plan assets comprise investments in € thousand or contractual requirements, or on a voluntary basis, to government or private retirement made with a bank. 2022 2021 pension organizations. The consolidated statement of comprehensive income includes total expenses of –€78,971 thousand (2021: –€54,877 thousand) for such contributions in the Current service cost –185 –177 respective functional costs. Once the contributions have been paid, the organization has no Development of the net liability deriving from defined benefit pension plans Interest expense –104 –69 further benefit obligation deriving from the defined contribution plans. in € thousand Subtotal –289 –246 2022 2021 Defined benefit plans Actuarial gains (+)/losses (–) The pension provisions for the defined benefit plans are determined using the projected unit Balance at 1.1. 10,535 10,772 credit method. Under this method, future obligations are measured based on the proportion of Thereof: experience adjustments 42 –363 Current service cost 185 177 benefits earned at the year-end reporting date. In the measurement process, trend assumptions Thereof: adjustments for other financial assumptions 3,161 861 are considered for the relevant parameters that influence the amount of the defined benefits. Interest expense 104 69 Actuarial computations are necessary for all defined benefit schemes. The defined benefit Thereof: adjustments of demographic assumptions 0 –45 Actuarial gains (–)/losses (+) –3,203 –453 plans mostly relate to benefit plans in Germany. For many years, no new defined benefit plan Subtotal 3,203 453 commitments have been made there. Thereof: experience adjustments –42 363 Pension expense recognized in the consolidated Thereof: adjustments for other financial assumptions –3,161 –861 statement of comprehensive income 2,914 207 Thereof: adjustments of demographic assumptions 0 45 Benefits paid –156 –135 Currency impacts –59 105 Balance at 31.12. 7,406 10,535 Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 62 Exyte The current service cost is included as part of the personnel cost of the functional areas; Sensitivity of the present value of the pension obligations Expected benefit payments as of 31.12.2022 the interest cost relating to the obligation is disclosed as interest and similar expenses as a in € thousand component of the net income from financing activities. 31.12.2022 31.12.2021 31.12.2022 31.12.2021 Financial years 2023 2024–2027 2028–2032 Discount rate (in %) +0.75 +0.50 –0.75 –0.50 Actuarial assumptions in Germany Germany 184 902 1,479 Present value of the in % pension obligations Taiwan 81 4 1,440 31.12.2022 31.12.2021 (in € thousand) 5,472 8,329 6,863 10,076 Total 265 906 2,919 Discount rate 3.90 1.05 Inflation rate/pension increase trend (in %) +0.75 +0.25 –0.75 –0.25 Inflation rate 2.25 1.75 Present value of the Future salary increases 2.50 2.50 Expected benefit payments as of 31.12.2021 pension obligations Future pension increases 2.25 1.75 (in € thousand) 6,654 9,454 5,628 8,849 in € thousand ## Financial years 2022 2023–2026 2027–2031 Actuarial assumptions in Taiwan If an assumption had been made that the life expectancies of those persons with benefit Germany 142 813 1,356 in % entitlements would increase by one year, the German pension obligations at December 31, 2022 Taiwan 75 12 588 31.12.2022 31.12.2021 would have increased by €233 thousand (December 31, 2021: €474 thousand). Total 217 825 1,944 Discount rate 1.75 0.63 Duration Future salary increases 4.00 3.00 The average duration of the German obligations is 15.7 years (December 31, 2021: 19.2 years). The average duration of the obligations for the Taiwanese company is 12.0 years (December 31, 2021: 12.7 years). Sensitivity analysis The main actuarial assumptions that are used to calculate the provisions for post-employment Analysis of the provisions for pensions by type of plan participant benefits in Germany are the discount rate and the trend for future increases in pensions. As in € thousand the benefit obligations mainly concerns obligations in Germany, the sensitivity analysis has 31.12.2022 31.12.2021 been restricted to the German obligations. An increase, or respectively a decrease, in the significant actuarial assumptions would have had the following impact on the present value of Active employees 3,362 5,486 the German pension obligations (December 31, 2022: €6,108 thousand; December 31, 2021: Former employees (with vested rights) 1,481 2,513 €9,144 thousand) as of the respective reporting dates: Pensioners 2,563 2,536 Provisions for pensions 7,406 10,535 Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 63 Exyte 20 Other provisions ## Development of other provisions in € thousand Change in Currency scope of the Unwinding 1.1.2022 impacts consolidation Additions of discount Usage Reversal 31.12.2022 Employee-based provisions 66,812 265 395 69,896 0 –41,867 –13,139 82,362 Onerous contracts 5,972 121 0 3,990 0 –1,185 –387 8,511 Provision for restructuring 1,118 57 0 0 0 –169 –679 327 Warranty provisions 7,496 –13 89 6,612 0 –3,422 –2,061 8,701 Legal and litigation risks 1,755 –2 0 1,321 0 –68 –2 3,004 Dismantling obligations 3,456 197 0 659 29 –649 0 3,692 Disputed claims 1,085 –118 0 3,649 0 –185 –362 4,069 Tax-related provisions 1,148 0 0 1,055 0 –116 –272 1,815 Miscellaneous other provisions 3,090 52 0 2,083 0 –1,542 –182 3,501 Total 91,932 559 484 89,265 29 –49,203 –17,084 115,982 ## Development of other provisions in € thousand Change in Currency scope of the Unwinding 1.1.2021 impacts consolidation Additions of discount Usage Reversal Reclassification 31.12.2021 Employee-based provisions 59,640 3,084 3,385 50,257 0 –43,775 –5,779 0 66,812 Onerous contracts 9,821 365 0 1,256 0 –2,289 –3,181 0 5,972 Provision for restructuring 772 86 0 885 0 –121 –504 0 1,118 Warranty provisions 7,506 540 1,038 2,575 0 –2,140 –2,023 0 7,496 Legal and litigation risks 2,729 25 0 69 0 –1,064 –4 0 1,755 Dismantling obligations 2,979 206 0 2,048 21 –6 –1,792 0 3,456 Disputed claims 712 33 0 884 0 –608 0 64 1,085 Tax-related provisions 918 0 0 1,020 0 –40 –686 –64 1,148 Miscellaneous other provisions 2,468 186 0 3,883 0 –2,957 –490 0 3,090 Total 87,545 4,525 4,423 62,877 21 –53,000 –14,459 0 91,932 Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 64 Exyte ## Employee-based provisions Other provisions by their terms to maturity Employee-based provisions are set up for long-service anniversary benefits, partial early in € thousand (prior year figures in brackets) retirement, performance-related bonuses, and similar obligations. 31.12.2022 < 1 year 1–5 years > 5 years Onerous contracts Provisions for potential losses deriving from onerous contracts are set up if the total project Employee-based provisions 82,362 70,089 11,512 761 costs are expected to exceed the respective sales on an individual project basis. (66,812) (56,475) (9,260) (1,077) Onerous contracts 8,511 8,511 0 0 Provision for restructuring (5,972) (5,972) (0) (0) The provision for restructuring is in respect of expenses for the closure of an Asian entity. Provision for restructuring 327 0 327 0 Warranty provisions (1,118) (396) (722) (0) Within the context of their operational activities, the Group’s companies incur warranty Warranty provisions 8,701 8,268 433 0 obligations. Such cases mainly involve obligations that involve the assumption of responsibility (7,496) (7,214) (282) (0) for a particular successful outcome or for a particular service to be rendered. Warranty provisions are set up for future reworking or costs for replacement deliveries due to statutory or contractual Legal and litigation risks 3,004 3,004 0 0 warranty obligations. Measurement of the provisions is made the basis of experience deriving (1,755) (1,755) (0) (0) from claims made in similar circumstances. Dismantling obligations 3,692 2,686 1,006 0 (3,456) (1,391) (2,065) (0) Legal and litigation risks Companies of the Exyte Group are involved in various court cases or arbitration procedures Disputed claims 4,069 4,069 0 0 that could have a significant impact on the economic situation of the Group. The litigation (1,085) (1,085) (0) (0) proceedings mainly relate to construction projects. Tax-related provisions 1,815 1,815 0 0 (1,148) (1,148) (0) (0) Dismantling obligations Dismantling obligations arise from lease contracts in some cases as ancillary obligations, if Miscellaneous other provisions 3,501 3,399 102 0 the layout of the rented space is amended to equip it to meet specific business requirements. (3,090) (3,054) (36) (0) Provisions for the anticipated costs are recognized if the related installations have to be removed Total as of 31.12.2022 115,982 101,841 13,380 761 at the end of the contractual lease term and the rented property has to be returned to its (91,932) (78,490) (12,365) (1,077) original condition. Disputed claims Provisions for disputed receivables are set up for trade receivables for which the risk of issuing a credit note is assessed to be more probable than not. Tax-related provisions The tax-related provisions mainly comprise provisions for expected tax advisory services in connection with tax field audits and ancillary tax services. ## Miscellaneous other provisions The miscellaneous other provisions are made up of a large number of individual risks that are recognized in the amount of the expected outflow of resources. Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 65 Exyte ## 21 Trade payables 22 Other financial liabilities 23 Miscellaneous liabilities Analysis of trade payables Analysis of the other financial liabilities Analysis of the miscellaneous liabilities in € thousand in € thousand in € thousand 31.12.2022 31.12.2021 31.12.2022 31.12.2021 31.12.2022 31.12.2021 Trade payables due to other than related parties 1,907,162 1,227,498 Purchase price liability (earn-out liability) 1,880 1,770 Liabilities for social security contributions 107 0 Trade payables due to entities belonging Derivative financial instruments 1,814 513 Miscellaneous liabilities (non-current) 107 0 to the M+W Group GmbH Group 24 660 Miscellaneous other non-current financial liabilities 5 29 VAT payable 35,345 40,453 Trade payables due to non-consolidated subsidiaries 0 42 Other financial liabilities (non-current) 3,699 2,312 Obligations to employees Total 1,907,186 1,228,200 (particularly for vacation time not yet taken, Financial liabilities due to entities belonging from flex-time credits, and from wages and salaries) 27,446 23,667 to the M+W Group GmbH Group 0 201 Liabilities for other taxes (particularly for wage tax) 14,792 10,057 Derivative financial instruments 5,174 4,261 Liabilities for social security contributions 7,041 8,481 Purchase price liability 1,018 0 Other current miscellaneous liabilities 2,156 3,452 Miscellaneous other current financial liabilities 820 2,593 Miscellaneous liabilities (current) 86,780 86,110 Other financial liabilities (current) 7,012 7,055 The purchase price liability (earn-out liability) classed as non-current is a residual obligation incurred by the CPS Group, which was acquired in financial year 2021, and derives from a business acquisition made by the CPS Group in 2020. As at the year-end reporting date, the liability was not due for payment until after more than twelve months. The purchase price liability classed as current represents the remaining purchase price outstanding in connection with the acquisition of Airgard, Inc. in financial year 2022. Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 66 Exyte ## 24 Additional disclosures concerning financial instruments Carrying amounts and fair values of financial instruments, analyzed by classes and measurement categories in € thousand ## 31.12.2022 Category Carrying amount Fair value Financial assets, by class Trade receivables AC 835,475 –1 Other non-current financial assets AC 1,383 –1 Other current financial assets AC 37,457 –1 Cash and cash equivalents AC 1,592,435 –1 Foreign currency derivatives without a hedging relationship FVTPL 11,643 11,643 Foreign currency derivatives with a hedging relationship n.a. 2,435 2,435 Total 2,480,828 1 The fair value of the financial instruments is approximately equal to the carrying amount. Carrying amounts and fair values of financial instruments, analyzed by classes and measurement categories in € thousand ## 31.12.2022 Category Carrying amount Fair value Financial liabilities, by class Lease liabilities n.a. 132,794 n.a. Trade payables AC 1,907,186 –1 Other non-current financial liabilities AC 1,885 –1 Other current financial liabilities AC 1,838 –1 Foreign currency derivatives without a hedging relationship FVTPL 3,126 3,126 Foreign currency derivatives with a hedging relationship n.a. 3,862 3,862 Total 2,050,691 1 The fair value of the financial instruments is approximately equal to the carrying amount. Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 67 Exyte Carrying amounts and fair values of financial instruments, analyzed by classes and measurement categories Exyte utilizes observable market data to the greatest extent possible when determining the in € thousand fair values of an asset or liability. Based on the input factors that are applied in such valuation techniques, fair values are classified into the various levels depending on the degree to which 31.12.2021 Category Carrying amount Fair value their determination is reliable, as follows: Financial assets, by class • Level 1: (Unadjusted) quoted prices in active markets for identical assets and liabilities Trade receivables AC 693,983 – 1 • Level 2: Determination based on use of measurement parameters, other than quoted prices Other non-current financial assets AC 961 – 1 considered under Level 1, but which can, however, either be directly (i.e. as a price) or indirectly Other current financial assets AC 18,371 – 1 (as a basis for the derivation of a price) observed for the asset or liability Cash and cash equivalents AC 1,148,911 – 1 • Level 3: Determination based on use of measurement parameters, which are not derived from Foreign currency derivatives without a hedging relationship FVTPL 4,512 4,512 observable market data. Foreign currency derivatives with a hedging relationship n.a. 561 561 If the input factors that are used to determine the fair value of an asset or liability can be classified Total 1,867,299 according to different levels of the fair value hierarchy, the measurement of the fair value is completely assigned to the hierarchy level that corresponds to the lowest level input factor that 1 The fair value of the financial instruments is approximately equal to the carrying amount. is of overall significance for purposes of measurement. As of both December 31, 2022 and December 31, 2021 reporting dates, the assets and liabilities Carrying amounts and fair values of financial instruments, analyzed by classes and measurement categories measured at fair value consist exclusively of foreign currency derivatives. in € thousand Exyte determines the fair values of forward exchange contracts by applying quoted forward rates 31.12.2021 Category Carrying amount Fair value and a net present value calculation based on yield curves. They are assigned to Level 2 of the fair value hierarchy. Financial liabilities, by class Lease liabilities n.a. 98,200 n.a. Trade payables AC 1,228,200 – 1 Other non-current financial liabilities AC 1,799 – 1 Other current financial liabilities AC 2,794 – 1 Foreign currency derivatives without a hedging relationship FVTPL 2,321 2,321 Foreign currency derivatives with a hedging relationship n.a. 2,453 2,453 Total 1,335,767 1 The fair value of the financial instruments is approximately equal to the carrying amount. Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 68 Exyte The following tables show the future cash outflows for financial liabilities at the time of their maturity, as well as their corresponding recognized net carrying amounts. ## Contractually agreed maturities for interest and principal payments as at 31.12.2022 in € thousand Gross amount (not Net carrying 2023 2024–2027 After 2027 discounted) amount Lease liabilities 31,084 64,603 50,790 146,477 132,794 Trade payables 1,907,186 0 0 1,907,186 1,907,186 Other non-current financial liabilities 0 1,885 0 1,885 1,885 Other current financial liabilities 1,838 0 0 1,838 1,838 Forward exchange transactions 5,174 1,814 0 6,988 6,988 Total 1,945,282 68,302 50,790 2,064,374 2,050,691 ## Contractually agreed maturities for interest and principal payments as at 31.12.2021 in € thousand Gross amount (not Net carrying 2022 2023–2026 After 2026 discounted) amount Lease liabilities 23,944 48,913 30,026 102,883 98,200 Trade payables 1,228,200 0 0 1,228,200 1,228,200 Other non-current financial liabilities 0 1,799 0 1,799 1,799 Other current financial liabilities 2,794 0 0 2,794 2,794 Forward exchange transactions 4,261 513 0 4,774 4,774 Total 1,259,199 51,225 30,026 1,340,450 1,335,767 Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 69 Exyte The following tables show the net gains and losses for each of the financial instrument Hedging policies and risks measurement categories: Exyte is exposed to financial risks – particularly deriving from foreign currency exchange rate fluctuations – in the context of its operational business activities, due to its financial assets and financial liabilities, as well as its regular transactions; these can have an influence on its assets, Net gains and losses deriving from financial instruments in 2022 liabilities, financial position and financial performance. in € thousand Interest/Measurement impacts The executive management is responsible for the set-up of and the control over Exyte’s risk management system and has issued relevant guidelines in this connection. The central treasury Foreign Increase in Reversals of function and the regional treasury hubs are responsible for the operational monitoring and currency Change in the allowances for allowances for management of financial risks and report regularly to the executive management. Interest conversion fair value impairment impairment Net impact Foreign currency risks Financial assets measured at amortized cost 8,576 8,422 –964 1,046 17,080 Risks deriving from fluctuations in currency exchange rates exist due to the international Financial liabilities measured at amortized cost –1,786 –7,514 –9,300 activities of Exyte and particularly arise in cases where receivables or liabilities are designated in other currencies than the respective local entity’s functional currency. Financial assets and liabilities measured at fair value through profit or loss 1,616 3,229 –1,858 2,987 Total 8,406 4,137 –1,858 –964 1,046 10,767 Forward exchange deals are contracted to hedge these foreign currency exchange rate risks (refer also to the section “Derivative financial instruments”). Such transactions are used to compensate exchange rate fluctuations in operational business payment flows that are designated in foreign currencies. Net gains and losses deriving from financial instruments in 2021 in € thousand Interest rate risks Interest/Measurement impacts Interest rate risks derive from market-related fluctuations in interest rates. The risk deriving from changes in interest rates is not significant for Exyte. No interest rate hedges were contracted by Foreign Increase in Reversals of Exyte during the financial year or during the previous year. currency Change in the allowances for allowances for Interest conversion fair value impairment impairment Net impact Default risks The default risk deriving from financial assets consists of the danger of a loss because Financial assets measured at amortized cost 1,769 23,101 –2,816 2,450 24,504 contractual partners do not fulfil their payment obligations or only partially fulfil them. Any risks Financial liabilities measured at amortized cost –1,263 –26,201 –27,464 are limited to the respective carrying amounts of the financial assets (refer to Notes 13 to 15). This type of risk is mainly associated with trade receivables, contract assets, as well as other Financial assets and liabilities measured at fair value through profit or loss 2,795 2,795 financial assets. Total 506 –3,100 2,795 –2,816 2,450 –165 As part of the client credit management process, information on creditworthiness is obtained from commercial information service providers to evaluate new clients. Many existing regular clients are major corporate groups of unquestionable creditworthiness and the risk of default for these is assessed to be very low. In the area of trade receivables and contract assets, there is no notable concentration of credit risks due to the widespread client base and because no correlations exist. The default risk for cash and cash equivalents is limited by means of the selection of banking partners, by assessing their solvency and also by spreading assets between various different contractual counterparties. Exyte accounts for the risk deriving from primary financial instruments by setting up allowances for expected credit losses. Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 70 Exyte Derivative financial instruments are only contracted directly and with reputable banks. Any An assumed netting obligation would have resulted in a netting effect of €5,280 thousand at The following negative fair values deriving from derivative financial instruments are disclosed outstanding market values are monitored within the context of risk management processes. Group level as of the current reporting date (December 31, 2021: €3,277 thousand). under the reporting line “Other financial liabilities” either as non-current or current items: Thus, the actual default risk deriving from them can be neglected. Derivative financial instruments Liquidity risk Forward exchange contracts are used to hedge currency risks, which constitute the primary Derivative financial liabilities The liquidity risk describes the risk that financial payment obligations cannot be met at the time financial risk for Exyte. in € thousand that they are due. In the context of its liquidity management processes, Exyte ensures that the 31.12.2022 31.12.2021 supply of liquidity is always sufficient to settle financial liabilities that are due for payment. Forward exchange contracts for which hedge accounting does not apply Intra-group loans designated in foreign currencies exist within the Group, which are hedged Hedging transactions covering foreign exchange risks: Liquidity is secured at all times by means of liquidity forecasts based on fixed planning horizons by deploying forward exchange contracts. These hedges constitute foreign currency forward Forward exchange contracts (cash flow hedges) 3,862 2,453 covering a number of months and through the cash and cash equivalent balances that are contracts (measured at FVPTL) and are contracted with terms that are commensurate with available. The measures used by Exyte for central liquidity management purposes include cash- the risk position of the hedged transactions. Such terms are normally between one month and Forward exchange contracts pooling arrangements, intra-group loans and, in particular, advance payment agreements with twelve months. Exyte accounts for financial instruments that are deployed to hedge intra-group (for which hedge accounting does not apply) 3,126 2,321 customers in connection with long-term construction contracts (refer also to the following hedged transactions in accordance with the applicable general regulations. Total 6,988 4,774 section “Capital management”). Forward exchange contracts for which hedge accounting does apply Capital management Depending on an assessment of the market situation, Exyte hedges both planned sales revenue The primary objectives of capital management processes are to support operating activities, and planned cost of sales designated in foreign currencies on a net basis, using forward exchange The amounts are based on market values that are determined using standard market ensure an appropriate equity ratio, and increase the value of the business. contracts, normally for periods of up to 24 months. In this manner, future cash flows deriving measurement methods. We also make reference in this connection to the disclosures from projects are hedged by deploying these instruments (cash flow hedges). In this context, the concerning the measurement of derivatives in the section “Recognition and measurement.” Exyte works with numerous subcontractors and suppliers to carry out its business activities recognized market value of the forward exchange contracts varies depending on the nominal successfully; these include planning, construction and project management activities. value of the underlying hedged transaction and the development of the respective foreign Management of foreign currency exchange rate risks Consequently, because of its business model, working capital is of particular importance to exchange rate. Exyte applies hedge accounting requirements to hedging relationships in respect Risks arise from exchange rate fluctuations to the extent that Exyte Group entities conduct Exyte. The objective of the executive management is to continue to finance the business of hedged items that exist in relation to third parties. Due to a continuously rolling strategy, only business in a currency other than their functional currency. Foreign currency exchange rate risks activities without reliance on banks. The aim is to achieve significant upfront financing of minimal ineffectiveness occurs as a consequence of credit value adjustments to the fair values of are reduced by entering into forward exchange deals. projects by both customers and suppliers, whilst at the same time operating strict receivables the forward exchange contracts. management processes. The intention is to ensure at least a moderate level of negative working Changes in values resulting from the translation of assets and liabilities of foreign business units capital at all times through the active management of payment terms within the projects. The following positive fair values deriving from derivative financial instruments are disclosed into the reporting currency (translation risks) are generally not hedged, as they do not affect the under the reporting line “Other financial receivables” either as non-current or current items: cash flows within the scope of the consolidation. The capital management processes are also operated with the objective of ensuring that the business activities of all the Exyte companies can continue as going concerns. The overall capital management strategy did not change in during the financial year. Derivative financial assets in € thousand Global netting and similar agreements 31.12.2022 31.12.2021 Exyte contracts forward exchange deals under the terms of a German framework or international framework agreements. Under such agreements, the amounts owed by each involved Hedging transactions covering foreign exchange risks: counterparty from any outstanding transactions in the same currency for each individual day Forward exchange contracts (cash flow hedges) 2,435 561 are offset against each other. In certain cases – if, for example, a credit event such as delayed payment occurs – all outstanding transactions that fall under the agreement are terminated Forward exchange contracts and the mutual claims are settled on a net basis. These framework agreements do not fulfil the (for which hedge accounting does not apply) 11,643 4,512 requirements that are necessary to allow the offsetting of the amounts in the statement of Total 14,078 5,073 financial position because they do not grant the contractual counterparties the right to settle on a net basis at any time. Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 71 Exyte The nominal amounts of the forward exchange deals contracted by Group entities, as at the Disclosures concerning cash flow hedge accounting: The hedging instruments are offset by hedged items that are not recognized for accounting respective year-end reporting dates, are shown in the following table: purposes, representing highly probable expected sales and procurement transactions, designated in foreign currencies. Cash flow hedge accounting Nominal amounts of forward exchange contracts in € thousand At the year-end reporting date, the carrying amounts of the financial assets and financial in € thousand 2022 2021 liabilities of the Group that are designated in foreign currencies are presented in the following 31.12.2022 31.12.2021 two tables: Nominal amount 99,919 100,971 EUR/USD 254,312 210,868 Carrying amount of the hedging instruments –1,427 –1,892 EUR/SGD 333,212 87,609 Financial assets Other current financial assets 2,435 561 in € thousand CNY/EUR 42,130 0 Other non-current financial assets –1,814 –513 31.12.2022 31.12.2021 MYR/USD 40,128 0 Other current financial liabilities –2,048 –1,940 USD 53,070 44,572 SGD/MYR 39,860 19,518 Measurement impacts recognized in TWD 17,140 15,914 MYR/EUR 29,000 0 other comprehensive income –4,699 –2,244 GBP 13,026 24,093 SGD/USD 13,126 1,330 Amount of the ineffective hedge recognized SGD 13,013 33,414 in profit or loss 0 0 CZK/EUR 5,961 943 DKK 12,323 2,430 Interest and Interest and GBP/EUR 3,382 3,107 Reporting line in the statement of comprehensive income similar income/ similar income/ CHF 2,726 4,506 TWD/USD 3,056 0 in which the ineffective portion of the hedge is included expenses expenses PLN 1,870 8,672 CNY/MYR 1,413 984 Amount reclassified from accumulated INR 1,333 1,396 other comprehensive income to profit or loss 774 34 CNY/SGD 0 31,771 AUD 518 553 Reporting lines in the statement of comprehensive income Sales Sales DKK/EUR 0 2,151 in which the reclassification is recognized Cost of sales Cost of sales Financial liabilities The agreements serve the purpose of hedging the main currency exchange rate risks and are The amount of hedging instruments deployed for cash flow hedge accounting purposes was as in € thousand renewed as required. As of December 31, 2022, the derivative financial instruments held by Exyte follows: 31.12.2022 31.12.2021 had a maximum term of 18 months (December 31, 2021: 30 months). USD 27,199 19,875 The significant increase in the nominal amounts of the EUR/SGD forward exchange contracts is Hedging instruments held that are designated as cash flow hedges DKK 14,316 88 mainly due to the hedging of newly granted intra-group loans designated in SGD. TWD 7,977 4,239 2022 2021 GBP 7,022 215 Forward exchange transactions (cash flow hedges) AED 1,859 1,727 Net exposure (in € thousand) 99,919 100,971 SGD 593 1,545 Average forward rate EUR/USD 1.00068 1.17756 CHF 380 162 Average forward rate EUR/SGD 1.47730 1.56666 PLN 305 2,730 Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 72 Exyte In the majority of cases, projects and client contracts involving services that are carried out and invoiced in their respective local currencies do not include cross-border transactions. Thus, the related currency risk deriving from cross-territory transactions is relatively insignificant. Exyte does not hedge such transactions. Sensitivity analysis Significant primary monetary items for which the Group is exposed to currency risks are intra- group loans, cash and cash equivalents, and trade accounts receivable and payable. These primary financial instruments are normally hedged by deploying derivative financial instruments. In such cases, both the currency-related change in the fair value of the primary financial instrument and the change in the value of the derivative financial instrument are recognized in profit or loss. In addition, currency risks derive from the use of derivatives that form part of an effective cash flow hedging relationship used to hedge exchange rate-related payment fluctuations. Changes in the exchange rates of the currencies on which these transactions are based have an impact on the hedging reserve in equity and on the fair value of the hedging transactions. In order to calculate the effects of changes in currency exchange rates on the consolidated earnings and consolidated equity, those currency pairs that are significant for the Exyte Group were taken into account. The sensitivity analyses simulate a respective hypothetical 10 % appreciation or depreciation of the euro against the US dollar and the Singapore dollar: Sensitivity analysis – Impact on consolidated earnings before tax and on consolidated equity in € thousand 31.12.2022 31.12.2021 Impact on Impact on ­consolidated Impact on ­consolidated Impact on earnings before tax c­ onsolidated equity earnings before tax ­consolidated equity EUR/USD +10 % –7,572 –1,251 –2,829 2,433 –10 % 9,255 1,528 3,458 –2,973 EUR/SGD +10 % –62 36 –142 –207 –10 % 76 –43 173 253 Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 73 Exyte 25 Reconciliation of the financial liabilities 26 Comments on the consolidated statement of cash flows The cash and cash equivalents disclosed in the statement of cash flows correspond to the cash Reconciliation of the change in financial liabilities to the cash flow from financing activities – financial year 2022 and cash equivalents disclosed in the statement of financial position. in € thousand Other current The statement of cash flows reports cash flows, distinguishing between cash inflows and financial liabilities cash outflows, from operating activities, from investing activities, and from financing activities. due to the M+W Using the consolidated net profit as the starting point, the cash flow from operating activities Lease liabilities Group GmbH Group Total is derived indirectly. The consolidated net profit is adjusted for noncash expenses and income. These adjustments mainly comprise amortization and depreciation charges, effects deriving Carrying amounts at 1.1.2022 98,200 201 98,401 from movements in currency exchange rates, non-cash effects deriving from income tax and Redemption payments –27,777 –201 –27,978 interest, as well as changes in impairment losses. After taking into account other cash-effective changes in assets and liabilities that are involved in operating business activities, the cash Change in the cash flow from financing activities –27,777 –201 –27,978 flow from operating activities is determined. Due to the nature of Exyte’s business activities, Increase due to changes in the scope of the consolidation 3,489 0 3,489 changes in working capital are particularly important in this connection. These include changes in inventories and advance payments made, trade receivables and payables (also including balances Increase in lease liabilities from new contracts 56,325 – 56,325 with non-consolidated subsidiaries and joint ventures), as well as changes in contract assets and Impact deriving from contract amendments 1,962 – 1,962 contract liabilities. Impact of changes in currency exchange rates 595 0 595 The cash flow from operating activities amounted to €686,502 thousand (2021: Carrying amounts at 31.12.2022 132,794 0 132,794 €630,129 thousand). The increase, by €56,373 thousand, is significantly influenced by the increase of €148,553 thousand in the consolidated earnings before tax (EBT). A counteracting impact particularly derived from the lower positive effect, amounting to €85,370 thousand, deriving from the change in working capital. Reconciliation of the change in financial liabilities to the cash flow from financing activities – financial year 2021 in € thousand The cash flow from investing activities amounted to –€80,705 thousand (2021: Liabilities deriving –€185,284 thousand) and thus reduced considerably. In addition to cash outflows from the from the limited Other current acquisition of intangible assets and property, plant and equipment (–€24,475 thousand; 2021: partner’s share financial liabilities –€9,570 thousand), this particularly includes cash outflows deriving from the acquisition of for a non-group due to the M+W the subsidiary Airgard, Inc. in financial year 2022 (–€32,514 thousand) and from time deposit Lease liabilities shareholder Group GmbH Group Total investments made with banks (–€23,000 thousand). In the previous year, the figure mainly included payments made for the acquisition of the CPS Group (–€210,359 thousand); a Carrying amounts at 1.1.2021 64,917 1,334 13 66,264 counteracting effect derived from the proceeds of a sale and leaseback transaction involving Redemption payments –21,057 0 –13 –21,070 the production building in Renningen (€34,649 thousand). Change in the cash flow from financing activities –21,057 0 –13 –21,070 In financial year 2022, the cash flow from financing activities, amounting to –€176,708 thousand Increase due to changes in the scope of the consolidation 4,491 0 201 4,692 (2021: –€20,469 thousand), was strongly influenced by the –€150,000 thousand outflow of funds deriving from the distribution to the sole shareholder. In addition, the figure includes cash effects Increase in lease liabilities from new contracts 47,889 – – 47,889 deriving from the repayments of lease liabilities and other financial liabilities, as well as from Impact deriving from contract amendments –965 – – –965 financial transactions with companies of the M+W Group GmbH Group. Changes in liabilities that were not cash-effective 0 –1,334 0 –1,334 The changes in the reported line items in the statement of financial position that are used to Impact of changes in currency exchange rates 2,925 0 0 2,925 present developments for purposes of the cash flow statement cannot be directly derived from the statement of financial position, as they are partially impacted by effects deriving Carrying amounts at 31.12.2021 98,200 0 201 98,401 from foreign currency translation and changes in the scope of the consolidation, which are not cash-based items. Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 74 Exyte ## 27 Contingent liabilities 29 Dealings with related parties As of December 31, 2022, the Exyte Group has contingent liabilities deriving from guarantees Related parties are entities or persons that control, or are controlled by, Exyte. Control is and sureties, amounting to €449,720 thousand (December 31, 2021: €262,252 thousand). exercised if an entity or a person has decision-making powers over another entity, deriving from These relate to potential future obligations for which the occurrence of the events that would voting rights or other rights, participates in positive or negative returns, and can influence such trigger the obligations is still uncertain at the reporting date and will probably not arise. Group returns through these decision-making powers. Furthermore, all entities qualify as related parties entities mainly incur warranty obligations during the normal course of their operational business that belong to the same corporate group as Exyte, which means that all parent companies, activities, which involve taking responsibility to achieve a particular successful result or providing subsidiaries and affiliated entities are considered to be related. a particular service. In addition, entities or persons meet the definition of related parties if they can exercise Exyte is subject to tax legislation in many different countries. Risks may arise from changes in significant influence over an entity, or if they hold a key position in the management of the entity local tax legislation as well as from different interpretations of tax regulations by the respective or the parent of the entity. This definition encompasses close members of their families. jurisdictions and tax authorities. The actual occurrence of such risk events may have an impact on the tax expenses and tax credits, as well as on Exyte’s tax receivables and liabilities. The parent company of Exyte GmbH is M+W Group GmbH, Stuttgart, the sole shareholder of which is ANDORRA Immobilien GmbH, Vienna, Austria. The parent company of ANDORRA 28 Other financial commitments Immobilien GmbH is Stumpf GmbH, Vienna, Austria. The sole shareholder of Stumpf GmbH is Financial commitments deriving from rental and leasing agreements are made up as follows: the Millennium Privatstiftung, Vienna, Austria, so that this latter entity is also the ultimate parent entity of Exyte GmbH. The sole beneficiary of the Millennium Privatstiftung is Mag. Georg Stumpf, Vienna, Austria. Other financial commitments as at 31.12.2022 in € thousand All business dealings with related parties are transacted at normal market conditions. < 1 year 1–5 years > 5 years Total Relationships to the M+W Group GmbH Group Short-term leases 1,810 0 0 1,810 Exyte maintains business relationships with the M+W Group GmbH and the companies in which Leases for assets of low value 316 351 0 667 it holds direct and indirect held participatory investment interests; these relationships resulted in the following transactions: Obligations deriving from leasing contracts concluded as of the reporting date for which lease liabilities are to be recognized in the following year upon commencement of use of the assets 1,710 11,049 10,931 23,690 Total 3,836 11,400 10,931 26,167 Transactions with entities belonging to the M+W Group GmbH Group in € thousand 2022 2021 Other financial commitments as at 31.12.2021 Goods delivered and services rendered and other income 1,694 2,509 in € thousand Goods and services received and other expenses –449 –8,415 < 1 year 1–5 years > 5 years Total Equity transactions in connection with business Short-term leases 4,742 2501 0 4,992 acquisitions 0 –421 Leases for assets of low value 338 262 19 619 Obligations deriving from leasing contracts concluded as of the reporting date for which lease liabilities are to be recognized in the following year upon commencement of use of the assets 347 3,805 4,824 8,976 Total 5,427 4,317 4,843 14,587 1 Relates to residual obligations deriving from short-term leases entered into as of the reporting date, the terms of which begin during 2022. Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 75 Exyte Exyte’s receivables and liabilities with the M+W Group GmbH Group were as follows: As had been the case in the previous year, as of December 31, 2022, Exyte had no receivables due Supervisory Board and executive management from or liabilities owed to other related parties. Remuneration granted to the members of the Supervisory Board (short-term benefits) amounted in total to €429 thousand in the financial year (2021: €429 thousand). Receivables and liabilities with entities belonging to the M+W Group GmbH Group Relationships to non-consolidated subsidiaries and joint ventures in € thousand The following expenses and income arose from transactions with non-consolidated subsidiaries The total remuneration of the executive management for the financial year amounted to 31.12.2022 31.12.2021 and joint ventures during the financial year: €5,732 thousand (2021: €4,849 thousand). This amount is split into fixed remuneration of €2,688 thousand (2021: €2,695 thousand) and variable remuneration of €3,044 thousand Receivables 709 3,421 (2021: €2,154 thousand). Thereof: receivables deriving from financing 0 1,184 Expenses and income deriving from relationships with non-consolidated subsidiaries and joint ventures 30 Segment information Thereof: trade receivables 709 2,237 General information in € thousand Liabilities 24 861 2022 2021 The business is monitored by the executive management, made up of the CEO and the CFO, who together act as Exyte’s “Chief Operating Decision Makers” (CODM). Exyte’s business Thereof: liabilities deriving from financing 0 201 Other operating income 0 1,084 activities are managed at the level of the four operational segments: Europe, Middle East and Thereof: trade payables 24 660 Interest income 35 41 Africa (EMEA), Americas (AMER), Asia-Pacific (APAC), and Technology & Services (T&S), which also constitute the reportable segments. Cost of sales –31 –136 Other operating expenses 0 –822 In addition to this, the business activities of the Group are reported to the executive As had been the case in the previous year, as of December 31, 2022, no loss allowances have management based on business segments: Advanced Technology Facilities (ATF), Biopharma been set up for financial receivables or trade receivables. & Life Sciences (BLS), Data Centers (DTC), and Regional Specific Business (RSB). The first three segments – ATF, BLS, and DTC – are also termed Global Business Units (GBUs), as their business The financial liabilities and receivables are current in nature; the agreed interest rates are revised As of the reporting date, the following receivables and liabilities of Exyte existed relating to activities are global and these also have a parallel business segment leadership – in accordance at regular intervals, depending on the development of reference interest rates on the capital non-consolidated subsidiaries and joint ventures: with the matrix structure of the organization. market. Exyte’s executive management reviews the results of the segments at least monthly, on the Relationships to other related parties Receivables and liabilities deriving from relationships with non-consolidated subsidiaries basis of internal management reports. The segment information presented has been prepared The income and expenses deriving from relationships with other related parties are shown below: and joint ventures on the same basis as is used for the purpose of preparing the internal management reports that in € thousand are used by the executive management as the basis to assess the business development of the 31.12.2022 31.12.2021 Group and for allocating resources within the Group. Expenses and income deriving from relationships with other related parties Financial receivables 1,418 1,497 The same accounting principles have been used for regional segment reporting purposes as in € thousand 2022 2021 Trade receivables 141 141 were used for the purpose of preparing the consolidated financial statements. ANDORRA Immobilien GmbH, Vienna, Austria Trade payables 0 42 Segment financial information Other operating expenses 0 –297 Regional segments A complete income statement is available for the regional segments. The main control As of December 31, 2022, loss allowances of –€822 thousand (December 31, 2021: parameters within the income statement that are used for management purposes are sales, the –€822 thousand) have been set up for financial receivables. As was the case in the previous year, gross profit, and the adjusted EBIT (earnings before interest and tax). ANDORRA Immobilien GmbH, Vienna, Austria, is part of group of companies under the control no loss allowances exist for trade receivables. of Millennium Privatstiftung, Vienna, Austria. Adjusted EBIT is defined as the result from operating activities (EBIT) adjusted for income or expenses deriving from irregular, non-recurring effects. Adjusted EBIT is used to determine profitability excluding irregular, non-recurring positive or negative effects, thus ensuring comparability between different reporting periods. Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 76 Exyte The following table shows a reconciliation of the result from operating activities (EBIT) to the As a supplement to the reconciliation, additional explanations on individual EBIT adjustments are adjusted EBIT: presented below: • The impact on earnings deriving from purchase price allocations particularly includes the Reconciliation of the result from operating activities (EBIT) to the adjusted EBIT amortization of acquired intangible assets that were not recognized as assets in the acquired in € thousand entity (e.g. client relationships). They result from the acquisitions of Airgard, Inc. and the CPS 2022 2021 Group. Result from operating activities (EBIT) 397,036 257,616 • Costs deriving from transaction-related bonuses comprise retention bonuses paid to Adjustments 19,311 5,712 employees and employee bonuses for post-merger activities incurred as a result of the acquisition of the CPS Group. Thereof: Impact on earnings deriving from • COVID-related income and expenses include costs for medical supplies, additional purchase price allocations 7,731 1,189 accommodation costs to comply with quarantine regulations, costs for the continued payment of salaries when projects come to a standstill, and income deriving from reimbursement of Costs for restructuring measures 3,620 1,894 these costs due to government support programs, especially in the Asian region. Transaction costs relating to (planned) business acquisitions 2,280 5,391 Consolidation effects result primarily from the elimination of intra-group sales and costs across segments, as well as from consolidation measures across segments that have an impact on Costs deriving from transaction-related bonuses 2,079 0 profit or loss. COVID-related income and expenses 95 –2,433 Certain costs relating to the Group’s central functions have been allocated to the regional Income deriving from the sale-and-lease-back transaction segments; other costs remain as costs attributable to the Group’s headquarters. The latter costs for the building in Renningen 0 –1,374 are presented in the following reconciliations as “Unallocated amounts.” Income deriving from the reversal of allowances set up Business segments against receivables due from Exyte Group companies The management uses the control parameters sales and gross profit to measure business that are not included in the consolidation, due to development and the profitability of the business segments. ­restructuring measures 0 –1,072 Costs deriving from other non-recurring items In cases where expenses and income cannot be allocated to a project, such items are shown in (e.g. one-time IT costs, legal and consulting costs, the following reconciliations as “Unallocated amounts” or “Consolidation adjustments.” or other expenses) 3,506 2,117 Adjusted EBIT 416,347 263,328 Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 77 Exyte ## Key figures and ratios of the regional segments for 2022 in € thousand Total regional Un-allocated Consolidation 2022 EMEA AMER APAC T&S segments amounts adjustments ­Exyte External sales of the regional segments 2,098,181 555,775 4,229,569 539,126 7,422,651 Sales between regional segments 10,920 4,210 9,431 235,770 260,331 Regional segment sales 2,109,101 559,985 4,239,000 774,896 7,682,982 –280,304 7,402,678 Cost of sales –1,969,572 –544,905 –3,893,090 –682,079 –7,089,646 275,922 –6,813,724 Gross profit 139,529 15,080 345,910 92,817 593,336 –4,382 588,954 Gross profit margin as a percentage of sales 6.6 % 2.7 % 8.2 % 12.0 % 7.7 % 8.0 % Depreciation, amortization, and write-downs –10,183 –2,823 –13,580 –21,119 –47,705 –2,998 –50,703 EBIT 95,871 –8,532 300,945 54,754 443,038 –42,051 –3,951 397,036 EBIT as a percentage of sales 4.5 % –1.5 % 7.1 % 7.1 % 5.8 % 5.4 % Adjusted EBIT 100,235 –7,213 299,565 68,639 461,226 –40,928 –3,951 416,347 Adjusted EBIT as a percentage of sales 4.8 % –1.3 % 7.1 % 8.9 % 6.0 % 5.6 % ## Key figures and ratios of the business segments for 2022 in € thousand ## 2022 ATF BLS DTC RSB ­Exyte Sales of the business segments 6,429,911 610,378 287,480 74,909 7,402,678 Thereof: EMEA 1,780,054 92,388 212,097 24,562 2,109,101 Thereof: AMER 559,543 404 38 0 559,985 Thereof: APAC 3,674,880 490,825 73,280 15 4,239,000 Thereof: T&S 672,499 49,949 2,101 50,347 774,896 Thereof: consolidation adjustments between regional segments –257,065 –23,188 –36 –15 –280,304 Cost of sales –5,878,088 –594,497 –269,343 –71,796 –6,813,724 Gross profit 551,823 15,881 18,137 3,113 588,954 Gross profit margin as a percentage of sales 8.6 % 2.6 % 6.3 % 4.2 % 8.0 % Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 78 Exyte Key figures and ratios of the regional segments for 2021 Reconciliation to the earnings before tax in € thousand Total regional Un-allocated Consolidation Reconciliation to the earnings before tax 2021 EMEA AMER APAC T&S segments amounts adjustments ­Exyte in € thousand 2022 2021 External sales of the regional segments 2,438,343 420,487 1,727,831 276,618 4,863,279 Total segment earnings (EBIT) 397,036 257,616 Sales between regional segments 2,717 2,808 4,085 150,207 159,817 Net income from financing activities 7,746 –1,387 Regional segment sales 2,441,060 423,295 1,731,916 426,825 5,023,096 –158,242 4,864,854 Consolidated earnings before tax (EBT) 404,782 256,229 Cost of sales –2,294,500 –412,284 –1,553,592 –374,972 –4,635,348 159,927 –4,475,421 Gross profit 146,560 11,011 178,324 51,853 387,748 1,685 389,433 Gross profit margin as a percentage of sales 6.0 % 2.6 % 10.3 % 12.1 % 7.7 % 8.0 % Important clients Depreciation, amortization, and write-downs –10,744 –2,401 –8,704 –7,929 –29,778 –1,544 –31,322 In both the year reported and the previous year, sales to one client, who is mainly attributable to EBIT 97,886 –5,695 152,205 32,147 276,543 –20,976 2,049 257,616 the EMEA and APAC regional segments (in 2021, to EMEA), generated more than 10 % of the Group’s sales (2022: €2,579,113 thousand; 2021: €1,943,915 thousand). In addition, sales to a EBIT as a percentage of sales 4.0 % –1.3 % 8.8 % 7.5 % 5.5 % 5.3 % further client, who is mainly attributable to the APAC regional segment generated more than 10 % of the Group’s sales (2022: €800,450 thousand; 2021: €633,708 thousand). Adjusted EBIT 99,667 101 149,830 33,243 282,841 –21,562 2,049 263,328 Adjusted EBIT as a percentage of sales 4.1 % 0.0 % 8.7 % 7.8 % 5.6 % 5.4 % ## Key figures and ratios of the business segments for 2021 in € thousand ­ 2021 ATF BLS DTC RSB Exyte Sales of the business segments 4,245,950 357,224 180,430 81,250 4,864,854 Thereof: EMEA 2,125,224 106,544 177,179 32,113 2,441,060 Thereof: AMER 413,957 9,333 0 5 423,295 Thereof: APAC 1,515,591 214,076 1,986 263 1,731,916 Thereof: T&S 345,891 30,535 1,268 49,131 426,825 Thereof: consolidation adjustments between regional segments –154,713 –3,264 –3 –262 –158,242 Cost of sales –3,877,324 –324,646 –162,181 –111,270 –4,475,421 Gross profit 368,626 32,578 18,249 –30,020 389,433 Gross profit margin as a percentage of sales 8.7 % 9.1 % 10.1 % –36.9 % 8.0 % Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 79 Exyte E. SUPPLEMENTARY DISCLOSURES Geographic Information Average number of employees Auditor’s remuneration The tables presented below show Exyte’s sales and its non-current assets, differentiating The fees charged by the auditor for services rendered amounted to: between the territory in which the organization is based and other territories. For purposes of Average number of employees presentation of this geographic information, the sales for the segment are assigned based on the respective location of the registered office of the delivering or performing entity and the 2022 2021 Auditor’s remuneration segment assets are assigned based on the geographic location of the assets. Goodwill has been in € thousand exclusively assigned to Germany, as this is the location of registered office of the parent company Industrial workers 2,065 1,292 2022 2021 of the Group. The non-current assets do not include any financial instruments or deferred tax Salaried employees 6,685 4,782 assets. For audits of financial statements –621 –649 Trainees 17 18 Thereof: relating to prior years 20 –74 Total 8,767 6,092 Sales by territory For other assurance services 0 0 in € thousand For tax advisory services 0 0 2022 2021 The average number of employees was determined based on quarterly computations. For other services –14 –14 Singapore 2,266,918 1,070,691 Total –635 –663 Ireland 1,056,848 1,686,559 Cost of materials and personnel expenses ## China 1,052,916 460,832 Cost of materials and personnel expenses USA 880,840 560,651 in € thousand Claims for relief from requirements to prepare and publish separate financial statements 2022 2021 Due to their inclusion in the consolidated financial statements of Exyte GmbH, the following Germany 798,342 561,363 fully consolidated German companies are waiving publication of their own annual financial Cost of materials –6,036,070 –3,930,015 statements: Malaysia 655,187 71,690 Cost of raw materials, consumables, and supplies and Other 691,627 453,068 • Exyte Technology GmbH, Renningen; purchased merchandise for resale –628,440 –847,597 Total 7,402,678 4,864,854 Cost of purchased services –5,407,630 –3,082,418 • Exyte Europe Holding GmbH, Stuttgart; Personnel expenses –721,597 –496,984 • Exyte Central Europe GmbH, Stuttgart; Non-current assets by territory Wages and salaries –573,947 –394,943 in € thousand Social security contributions, retirement, and other • Exyte Management GmbH, Stuttgart. 31.12.2022 31.12.2021 support benefits –147,650 –102,041 Germany 363,170 335,698 USA 137,292 85,267 Please refer to Note 19 for disclosures concerning retirement benefit expenses. Singapore 14,083 18,129 Other 39,834 36,080 Total 554,379 475,174 Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 80 Exyte EXECUTIVE SUPERVISORY MANAGEMENT BOARD OF EXYTE GMBH OF EXYTE GMBH Dr. Wolfgang Büchele Mag. Georg Stumpf Stuttgart, March 14, 2023 Chief Executive Officer Chairman Businessman Römerberg, Germany Vienna, Austria The Executive Management ## Peter Schönhofer Karl Ableidinger Chief Financial Officer Deputy Chairman Managing Director of Stumpf Capital LP Vienna, Austria Dubai, United Arab Emirates Roberto Penno Thomas Boehnke Dr. Wolfgang Büchele (CEO) Peter Schönhofer (CFO) Chief Operating Officer Head of Engineering DACH + Belgium London, United Kingdom Exyte Central Europe GmbH (up until August 17, 2022) Stuttgart, Germany ## Prof. Dr. Harald Kessler Management Consultant and Managing Director of KLS Accounting & Valuation GmbH St. Ingbert, Germany ## Dorothee Johanna Lauffer Chairperson of the Works Council of Exyte Technology GmbH and Chairperson of the Works Council for the Exyte Group Ditzingen, Germany Michael Wang Independent Board Member of Janus Technologies Inc.; Simplo Technology Co Ltd.; Casetek Holdings Ltd.; Phison Electronics Corp.; and Industrial Technology Investment Corp. Taipei City, Taiwan Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 81 Exyte LIST OF SHAREHOLDINGS OF EXYTE GMBH AS OF DECEMBER 31, 2022 Share of No. Name of company Registered office, country capital (%) via 1\. Exyte GmbH Stuttgart, Germany Consolidated subsidiaries 2\. Exyte Asia-Pacific Holding Ltd. Singapore, Singapore 100 3\. Blitz S18-226 GmbH Stuttgart, Germany 100 2\. Consolidated subsidiaries of Exyte Asia-Pacific Holding Ltd. 2.1. Exyte Americas Holding, Inc. Plano, USA 100 2.2. Exyte Europe Holding GmbH Stuttgart, Germany 100 2.3. Exyte Singapore Pte. Ltd. Singapore, Singapore 100 2.4. Exyte Trading (Singapore) Pte. Ltd. Singapore, Singapore 100 2.5. Exyte Shanghai Co., Ltd. Shanghai, China 100 2.1. Consolidated subsidiaries of Exyte Americas Holding, Inc. 2.1.1. Exyte U.S., Inc. Albany, USA 100 2.1.2. Total Facility Solutions, Inc. Plano, USA 100 2.1.3. CPS Holdco, LLC Boise, USA 100 2.1.3. Consolidated subsidiaries of CPS Holdco, LLC \[Link\]. CPS Intermediate, LLC Boise, USA 100 \[Link\]. CPS Intermediate II, LLC Boise, USA 100 \[Link\]. Consolidated subsidiaries of CPS Intermediate, LLC \[Link\].1. CPS Buyer, LLC Boise, USA 100 \[Link\].1. Consolidated subsidiaries of CPS Buyer, LLC \[Link\].1.1. Critical Process Systems Group, Inc. Boise, USA 100 \[Link\].1.1. Consolidated subsidiaries of Critical Process Systems Group, Inc. \[Link\].1.1.1. Airgard, Inc. Milpitas, USA 100 \[Link\].1.1.2. BioPharm Engineered Systems, LLC Lawrence, USA 100 Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 82 Exyte Share of No. Name of company Registered office, country capital (%) via \[Link\].1.1.3. CPS Process Solutions, LLC Lawrence, USA 100 \[Link\].1.1.4. Diversified Fluid Solutions, LLC Boise, USA 100 \[Link\].1.1.5. ENGVT, LLC Williston, USA 100 \[Link\].1.1.6. Fab-Tech, Inc. Colchester, USA 100 \[Link\].1.1.7. NEHP, Inc. Williston, USA 100 \[Link\].1.1.6. Consolidated subsidiaries of Fab-Tech, Inc. \[Link\].\[Link\]. Pure Guard, LLC Phoenix, USA 100 \[Link\].1.1.7. Consolidated subsidiaries of NEHP, Inc. \[Link\].\[Link\]. NEHP Worldwide, LLC Williston, USA 100 \[Link\]. Consolidated subsidiaries of CPS Intermediate II, LLC \[Link\].1. CPS Buyer Holdco II, LLC Boise, USA 100 \[Link\].1. Consolidated subsidiaries of CPS Buyer Holdco II, LLC \[Link\].1.1. CPS Buyer II, LLC Boise, USA 100 \[Link\].1.1. Consolidated subsidiaries of CPS Buyer II, LLC \[Link\].1.1.1. Nuance Systems, LLC Portland, USA 100 2.2. Consolidated subsidiaries of Exyte Europe Holding GmbH 2.2.1. Exyte Central Europe GmbH Stuttgart, Germany 100 2.2.2. Exyte France SAS Aix-en-Provence, France 100 2.2.3. Exyte Italy S.r.l. Agrate Brianza, Italy 100 2.2.4. Exyte Management GmbH Stuttgart, Germany 100 2.2.5. Exyte Netherlands B.V. Amsterdam, the Netherlands 100 2.2.6. Exyte Northern Europe Ltd. Maynooth, Ireland 100 2.2.7. Exyte Technology GmbH Renningen, Germany 100 2.2.7. Consolidated subsidiaries of Exyte Technology GmbH \[Link\]. Exyte Technology CZ s.r.o. Krupka, Czech Republic 100 2.3. Consolidated subsidiaries of Exyte Singapore Pte. Ltd. 2.3.1. Exyte Hargreaves Ltd. Bury, United Kingdom 100 2.3.2. Exyte Israel Projects Ltd. Nes Tsiona, Israel 100 2.3.3. Exyte Malaysia Sdn. Bhd. Penang, Malaysia 100 Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 83 Exyte Share of No. Name of company Registered office, country capital (%) via 2.3.4. Exyte Services (Singapore) Pte. Ltd. Singapore, Singapore 100 2.3.5. Exyte Vietnam Co., Ltd. Ho Chi Minh City, Vietnam 100 2.3.4. Consolidated subsidiaries of Exyte Services (Singapore) Pte. Ltd. \[Link\]. Exyte Services (Malaysia) Sdn. Bhd. Penang, Malaysia 100 2.4. Consolidated subsidiaries of Exyte Trading (Singapore) Pte. Ltd. 2.4.1. Exyte Taiwan Co., Ltd. Hsinchu, Taiwan, R.O.C. 100 2.5. Consolidated subsidiaries of Exyte Shanghai Co., Ltd. 2.5.1. Exyte Technology Shanghai Co., Ltd. Shanghai, China 100 2.5.2. Exyte Trading Shanghai Co., Ltd. Shanghai, China 100 3\. Consolidated subsidiaries of Blitz S18-226 GmbH 3.1. Delicatessen Engineering Services Pvt. Ltd. Hyderabad, India 100 4\. Non-consolidated subsidiaries 4.1. Exyte Connecticut Architecture and Engineering, P.C. Plano, USA 0¹ 2.1.1. 4.2. Exyte Michigan, Inc. East Lansing, USA 100 2.1.1. 4.3. Exyte North Carolina, Inc. Raleigh, USA 0¹ 2.1.1. 4.4. Exyte Oregon Architecture and Engineering, Inc. Plano, USA 100 2.1.1. 4.5. M+W Zander NY Architects, P.C. Plano, USA 0¹ 2.1.1. 4.6. Exyte Lotos Italy S.c.a.r.l. Agrate Brianza, Italy 51 2.2.3. 4.7. MW Services S.r.l. Agrate Brianza, Italy 100 2.2.3. 4.8. Nanjing Enviro-Chem Engineering Design Co., Ltd. Nanjing, China 75 2.5. 5\. Joint operations 5.1. M+W – Commodore J.V. Abu Dhabi, Abu Dhabi 60 2.3. (JV-Partner: Commodore Contracting Co. LLC, Abu Dhabi) 5.2. Exyte | Gilbane JV Plano, USA 51 2.1.1. (JV-Partner: Gilbane Building Co., USA) 5.3. Gilbane | Exyte JV Providence, USA 49 2.1.1. (JV-Partner: Gilbane Building Co., USA) 1 Shares are held by employees in accordance with professional licensing legislation. Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 84 Exyte INDEPENDENT AUDITOR’S REPORT To Exyte GmbH, Stuttgart Basis for the Opinions Responsibilities of Management and the Supervisory Board for the Consolidated Financial Statements and the Group Management Report We conducted our audit of the consolidated financial statements and of the group management Opinions report in accordance with Section 317 HGB and the German Generally Accepted Standards of Management is responsible for the preparation of the consolidated financial statements that Financial Statement Audits promulgated by the Institut der Wirtschaftsprüfer \[Institute of Public comply, in all material respects, with IFRSs as adopted by the EU and the additional requirements We have audited the consolidated financial statements of Exyte GmbH, Stuttgart, and its Auditors in Germany\] (IDW). Our responsibilities under those requirements and principles are of German commercial law pursuant to Section 315e (1) HGB and that the consolidated financial subsidiaries (the Group), which comprise the consolidated statement of financial position as at further described in the “Auditor’s Responsibilities for the Audit of the Consolidated Financial statements, in compliance with these requirements, give a true and fair view of the assets, 31 December 2022, and the consolidated statement of profit or loss and other comprehensive Statements and of the Group Management Report” section of our auditor’s report. We are liabilities, financial position, and financial performance of the Group. In addition, management income, consolidated statement of changes in equity and consolidated statement of cash independent of the group entities in accordance with the requirements of German commercial is responsible for such internal control as they have determined necessary to enable the flows for the financial year from 1 January to 31 December 2022, and notes to the consolidated and professional law, and we have fulfilled our other German professional responsibilities in preparation of consolidated financial statements that are free from material misstatement, financial statements, including a summary of significant accounting policies. In addition, we have accordance with these requirements. We believe that the evidence we have obtained is sufficient whether due to fraud (i.e., fraudulent financial reporting and misappropriation of assets) or error. audited the group management report of Exyte GmbH for the financial year from 1 January to and appropriate to provide a basis for our opinions on the consolidated financial statements and 31 December 2022. on the group management report. In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern. They also have the responsibility for disclosing, In our opinion, on the basis of the knowledge obtained in the audit, as applicable, matters related to going concern. In addition, they are responsible for financial Other Information reporting based on the going concern basis of accounting unless there is an intention to liquidate • the accompanying consolidated financial statements comply, in all material respects, with the Group or to cease operations, or there is no realistic alternative but to do so. the IFRSs as adopted by the EU, and the additional requirements of German commercial law Management is responsible for the other information. pursuant to Section 315e (1) HGB \[Handelsgesetzbuch: German Commercial Code\] and, Furthermore, management is responsible for the preparation of the group management report in compliance with these requirements, give a true and fair view of the assets, liabilities, and The other information comprises the information in the other parts of the annual report. that, as a whole, provides an appropriate view of the Group’s position and is, in all material financial position of the Group as at 31 December 2022, and of its financial performance for the The other information does not include the consolidated financial statements, the group respects, consistent with the consolidated financial statements, complies with German legal financial year from 1 January to 31 December 2022, and management report information audited for content and our auditor’s report thereon. requirements, and appropriately presents the opportunities and risks of future development. In addition, management is responsible for such arrangements and measures (systems) as they • the accompanying group management report as a whole provides an appropriate view of the Our opinions on the consolidated financial statements and on the group management report have considered necessary to enable the preparation of a group management report that is in Group’s position. In all material respects, this group management report is consistent with the do not cover the other information, and consequently we do not express an opinion or any other accordance with the applicable German legal requirements, and to be able to provide sufficient consolidated financial statements, complies with German legal requirements and appropriately form of assurance conclusion thereon. appropriate evidence for the assertions in the group management report. presents the opportunities and risks of future development. In connection with our audit, our responsibility is to read the other information and, in so doing, The Supervisory Board is responsible for overseeing the Group’s financial reporting process for Pursuant to Section 322 (3) sentence 1 HGB, we declare that our audit has not led to any to consider whether the other information the preparation of the consolidated financial statements and of the group management report. reservations relating to the legal compliance of the consolidated financial statements and the group management report. • is materially inconsistent with the consolidated financial statements, with the group management report information audited for content or our knowledge obtained in the audit, or ## • otherwise appears to be materially misstated. Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 85 Exyte Auditor’s Responsibilities for the Audit of the Consolidated Financial • Obtain an understanding of internal control relevant to the audit of the consolidated financial • Evaluate the consistency of the group management report with the consolidated financial Statements and of the Group Management Report statements and of arrangements and measures (systems) relevant to the audit of the statements, its conformity with \[German\] law, and the view of the Group’s position it provides. group management report in order to design audit procedures that are appropriate in the Our objectives are to obtain reasonable assurance about whether the consolidated financial circumstances, but not for the purpose of expressing an opinion on the effectiveness of these • Perform audit procedures on the prospective information presented by management in the statements as a whole are free from material misstatement, whether due to fraud or error, and systems. group management report. On the basis of sufficient appropriate audit evidence we evaluate, whether the group management report as a whole provides an appropriate view of the Group’s in particular, the significant assumptions used by management as a basis for the prospective position and, in all material respects, is consistent with the consolidated financial statements • Evaluate the appropriateness of accounting policies used by management and the information, and evaluate the proper derivation of the prospective information from these and the knowledge obtained in the audit, complies with the German legal requirements and reasonableness of estimates made by management and related disclosures. assumptions. We do not express a separate opinion on the prospective information and on the appropriately presents the opportunities and risks of future development, as well as to issue an assumptions used as a basis. There is a substantial unavoidable risk that future events will differ auditor’s report that includes our opinions on the consolidated financial statements and on the • Conclude on the appropriateness of management’s use of the going concern basis of materially from the prospective information. group management report. accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to We communicate with those charged with governance regarding, among other matters, the Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted continue as a going concern. If we conclude that a material uncertainty exists, we are required planned scope and timing of the audit and significant audit findings, including any significant in accordance with Section 317 HGB and in compliance with German Generally Accepted to draw attention in the auditor’s report to the related disclosures in the consolidated financial deficiencies in internal control that we identify during our audit. Standards for Financial Statement Audits promulgated by the Institut der Wirtschaftsprüfer statements and in the group management report or, if such disclosures are inadequate, to (IDW) will always detect a material misstatement. Misstatements can arise from fraud or error modify our respective opinions. Our conclusions are based on the audit evidence obtained up and are considered material if, individually or in the aggregate, they could reasonably be expected to the date of our auditor’s report. However, future events or conditions may cause the Group to influence the economic decisions of users taken on the basis of these consolidated financial to cease to be able to continue as a going concern. Stuttgart, 14 March 2023 statements and this group management report. • Evaluate the overall presentation, structure and content of the consolidated financial KPMG AG We exercise professional judgement and maintain professional scepticism throughout the audit. statements, including the disclosures, and whether the consolidated financial statements Wirtschaftsprüfungsgesellschaft We also: present the underlying transactions and events in a manner that the consolidated financial \[Original German version signed by:\] statements give a true and fair view of the assets, liabilities, financial position and financial • Identify and assess the risks of material misstatement of the consolidated financial performance of the Group in compliance with IFRSs as adopted by the EU and the additional statements and of the group management report, whether due to fraud or error, design requirements of German commercial law pursuant to Section 315e (1) HGB. and perform audit procedures responsive to those risks, and obtain audit evidence that is Cheung Hagg sufficient and appropriate to provide a basis for our opinions. The risk of not detecting a • Obtain sufficient appropriate audit evidence regarding the financial information of the entities Wirtschaftsprüfer Wirtschaftsprüfer material misstatement resulting from fraud is higher than the risk of not detecting a material or business activities within the Group to express opinions on the consolidated financial \[German Public Auditor\] \[German Public Auditor\] misstatement resulting from error, as fraud may involve collusion, forgery, intentional statements and on the group management report. We are responsible for the direction, omissions, misrepresentations, or the override of internal controls. supervision and performance of the group audit. We remain solely responsible for our opinions. Annual Report 2022 | Figures at a Glance | Foreword | Group Management Report | Consolidated Financial Statements | Independent Auditor’s Report | Imprint 86 Exyte IMPRINT Contact Disclaimer Exyte GmbH This report contains forward-looking statements that reflect our current view about future Corporate Communications & Investor Relations business and financial performance as well as future events or developments. Forward- Löwentorbogen 9b looking statements are characterized by the use of words such as expect, intend, plan, 70376 Stuttgart predict, assume, believe, estimate, anticipate, and similar expressions. These statements Germany are based on current expectations and assumptions made by the executive management T: +49 711 8804-0 of Exyte Group and are subject to many risks and uncertainties which are mainly beyond ir@\[Link\] Exyte’s control. Should any of these risks or uncertainties materialize or any expectations or assumptions prove to be incorrect, the actual future results may be materially different from those described explicitly or implicitly in the relevant forward-looking statement. Therefore, Vice President Exyte does not guarantee any of these forward-looking statements and neither intends nor Corporate Communications & Investor Relations assumes any obligation to update or revise those in case of developments which differ from those anticipated. René Ziegler All rights reserved. Valid March 2023. Exyte Group accepts no liability for the accuracy and completeness of information provided in this report. The German version shall govern in all Idea and coordination instances. Veronika Grießer John Warren ## Concept and design ## LauferNeo GmbH, Berlin Kirchhoff Consult AG, Hamburg Exyte GmbH Löwentorbogen 9b 70376 Stuttgart Germany ## T: +49 711 8804-0 ir@\[Link\]