Financial Report - Other disclosures

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Other disclosures relating to the consolidated financial statements

Consolidated cash flow statement

The consolidated cash flow statement is presented using the indirect method. The change in deferred taxes is included in the other non-cash operating expenses and income.

The table below shows the change in liabilities from financing activities:

kEUR	31/12/2019	Outflows	Inflows	Other changes	Changes ‎in scope ‎of conso- ‎lidation	New lease con- ‎tracts	Changes in fair value	Currency effects	31/12/2020
Non-current ‎financial ‎liabilities ‎to banks	120,574	-35,930	30,000	-409	0	0	0	0	114,235
Current ‎financial ‎liabilities ‎to banks	1,327	-1,033	5	505	0	0	0	0	804
Lease ‎liabilities	19,696	-5,848	0	498	0	3,884	0	-239	17,990
Total	141,596	-42,811	30,005	594	0	3,884	0	-239	133,028

kEUR	31/12/2018	Outflows	Inflows	Other changes	Changes ‎in scope ‎of conso- ‎lidation	New lease con- ‎tracts	Changes in fair value	Currency effects	31/12/2019
Non-current ‎financial ‎liabilities ‎to banks	76,768	-32,795	77,500	-899	0	0	0	0	120,574
Current ‎financial ‎liabilities ‎to banks	5,325	-268	0	883	-4,613	0	0	0	1,327
Lease ‎liabilities	1,666	-3,741	0	11,358	0	10,412	0	0	19,696
Total	83,759	-36,999	77,500	11,537	-4,613	10,412	0	0	141,596

Other changes in connection with lease liabilities relate to expiring leases.

Research and Development

Development costs totaling kEUR 2,693 were incurred in 2020 (previous year: kEUR 2,676). Of these, intangible assets amounting to kEUR 553 (previous year: kEUR 947) had to be capitalized in accordance with IAS 38. This equates to a capitalization rate of 21% (previous year: 35%). Amortization of development costs in the amount of kEUR 3,668 (previous year: kEUR 1,263) was recognized, of which kEUR 3,128 (previous year: kEUR 208) relates to unscheduled depreciation.

Risk Management

General information on financial risks

The MAX Group can be exposed to various risks through financial instruments. These are as follows:

Credit risks

Liquidity risks

Market price risks

Credit risks essentially arise from trade receivables. It is particularly important to assess the risks in connection with the project business, as in the provisional financing of orders, for example.

Liquidity risks consist of the risk of not being able to meet payment obligations in a timely manner. These risks are generally associated with a negative development of the operating business.

Market price risks arise from changes in exchange rates and interest rates. On the sales side, the main currency risks relate to invoicing on a US dollar basis.

Risk categories

Credit risks

Credit risk is the risk of an economic loss if a counterparty fails to meet its contractual or payment obligations. The risk essentially comprises the default risk and the risk arising from a deterioration in creditworthiness.

Trade receivables are due as a result of the worldwide sales operations of the individual companies.

The following safeguarding measures are taken as a general rule as a result of the different credit ratings of the customers:

Export credit insurance

Letters of credit

Prepayments

Guarantees and sureties

Internal credit lines

Assignments as security

The maximum default risk (credit risk) comprises the complete default of the positive carrying amounts of the financial instruments. The default risk of the unimpaired financial instruments is fundamentally judged to be low from the present-day perspective due to the debtor structure, as the probability of default is kept to a minimum by the strict constraints of the risk management system.

In addition to specific allowances to be recognized for receivables in the event of a default event, an allowance for expected losses has also been recognized in accordance with IFRS 9. Financial assets of the Group that are subject to the expected credit loss model are trade receivables and contractual assets. The Group applies the simplified approach under IFRS 9 to measure expected credit losses. Accordingly, expected credit losses over the term are used for all trade receivables and contractual assets.

In order to measure the expected credit losses, trade receivables and contractual assets are clustered. The valuation allowance ratios are determined on the basis of the specific debtor, the industry or region using credit default swap spreads. The calculation takes into account the interest effect.

The following overviews show the calculated default risk position for the Group’s trade receivables and contractual assets:

Impairment Matrix 31. December 2020
	Default rate	Gross book value Trade receivables & Contract assets	Expected credit loss
	%	kEUR	kEUR

Customer specific	0.29%	18,708	54

Automotive Asia	0.41%	11,098	46
Automotive Europe	0.36%	6,897	25
Mechanical engineering Europe	0.23%	3,080	7
Industries Europe	0.24%	2,608	6
Pharmaceutical & healthcare industry Europe	0.09%	2,152	2
Industries Europe	0.22%	1,995	4
Recylcing Europe	0.22%	1,602	4
Food & Beverage Europe	0.13%	1,558	2

China	0.07%	186	0

Others	0.26%	12,460	32

Total	0.29%	62,344	182

Impairment Matrix 31. December 2019
	Default rate	Gross book value Trade receivables & Contract assets	Expected credit loss
	%	kEUR	kEUR

Customer specific	0.17%	44,217	74

Automotive Europe	0.16%	9,466	15
Automotive Asia	0.13%	3,929	5
Energy America	0.19%	3,649	7
Mechanical engineering Europe	0.12%	2,490	3
Pharmaceutical & healthcare industry Europe	0.08%	1,881	1
Industries Europe	0.15%	1,542	2
Food & Beverage Europe	0.06%	1,496	1

Europe	0.04%	8,413	4
America	0.07%	3,313	2

Others	0.11%	8,746	10

Total	0.14%	89,142	124

Furthermore, depreciation of contractual assets and trade receivables was performed on a case-by-case basis in the amount of TEUR 1,536 (previous year: TEUR -2,629).

The reconciliation of the opening balance of expected credit losses for trade receivables and contract assets to the closing balance as of 31 December is as follows:

Expected credit loss
in kEUR	Trade receivables & Contract assets ‎(simplified approach)
Expected credit loss as of 01. January 2020	125
increase	523
decrease	-470
currency translation differences and others	5
Expected credit loss as of 31. December 2020	183

Opening balance gross book value as of 01. January 2020	89,142
Closing balance gross book value as of 31. December 2020	62,344

Expected credit loss
in kEUR	Trade receivables & Contract assets ‎(simplified approach)
Expected credit loss as of 01. January 2019	375
increase	129
decrease	-378
currency translation differences and others	-1
Expected credit loss as of 31. December 2019	125

Opening balance gross book value as of 01. January 2019	116,682
Closing balance gross book value as of 31. December 2018 adjusted¹⁾	115,782
Closing balance gross book value as of 31. December 2019	89,142

1) Further information on the adjusted previous year’s figures can be found in the Notes to the 2019 Annual Report in the chapter entitled “Corrections of errors.”

Liquidity risk

The Group monitors the risk of a potential liquidity bottleneck by means of a liquidity planning tool and as part of rolling financial planning. A broadly diversified refinancing approach is pursued and the Group accordingly makes use of various sources of liquidity, such as overdraft facilities, syndicated loans, advance payments, leasing and equity instruments. The MAX Group has sufficient sources of financing at its disposal.

In operational liquidity management, the short-and medium-term cash flows of the companies are summarized at Group Level. In addition to the maturities of the financial assets and liabilities, these cash flows also include the expectations of the operating cash flows of the Group companies.

As of 31 December 2020, the financial liabilities of the MAX Group result in the following cash outflows from interest and principal payments:

kEUR	Book value ‎31/12/2020	Cashflow ‎up to 1 year	Cashflow ‎1 to 5 years	Cashflow ‎over 5 years
Non-derivative financial liabilities
Financial liabilities	115,038	4,624	115,936	0
Trade payables (excluding advance payments received)	23,660	23,660	0	0
Other interest-bearing and non-interest-bearing liabilities	32,931	19,783	11,200	3,156
Cash outflows from derivative financial instruments
- Currency derivatives	63	3,088	0	0
- Interest rate derivatives	0	0	0	0
Cash inflows from derivative financial instruments
- Currency derivatives	63	3,025	0	0
- Interest rate derivatives	0	0	0	0

kEUR	Book value ‎31/12/2019	Cashflow ‎up to 1 year	Cashflow ‎1 to 5 years	Cashflow ‎over 5 years
Non-derivative financial liabilities
Financial liabilities	121,900	34,369	12,269	90,945
Trade payables (excluding advance payments received)	49,818	49,818	0	0
Other interest-bearing and non-interest-bearing liabilities	40,144	25,268	12,925	23,061
Cash outflows from derivative financial instruments
- Currency derivatives	-163	10,585	0	0
- Interest rate derivatives	0	0	0	0
Cash inflows from derivative financial instruments
- Currency derivatives	-163	10,422	0	0
- Interest rate derivatives	0	0	0	0

Market price risk

The Group is exposed to market price risks in the form of exchange rate risks and interest rate risks due to its international operations. These risks can have a negative impact on the net assets, financial position and results of operations of the Group. The general economic conditions are constantly monitored and relevant market information is consulted in order to evaluate and assess the risks.

The Group has established a central risk management system in order to be able to systematically identify and assess market price risk. This involves reporting to the Managing Directors on an ongoing basis.

Currency risks

Due to its international orientation, the MAX Automation Group is exposed to risks from exchange rate fluctuations in its business operations and with regard to the reported financial transactions and cash flows. The exchange rate risk for the Group is driven by its sales volume and to a large extent by conversions between the US dollar and the euro. The transaction risk is of particular importance here as the revenue is measured in foreign currency and the associated costs are in euro. Exchange rate fluctuations are partly hedged by using the appropriate hedging instruments.

Foreign currency forwards are used to minimize the transaction risks associated with individual projects. In the process, the open currency position is fully hedged using contractually defined milestones. In addition, planned foreign currency inflows are hedged on a continuous basis using a macro approach, whereby the hedging ratio here is in the range of 50-75%. Pure trading transactions are not entered into without corresponding underlying transactions.

Forward sales of currencies may give rise to market price risks in the form of potential obligations to sell foreign currencies at a spot rate below the market rate on the settlement date.

The terms and scope of the currency hedges correspond to those of the underlying transactions requiring hedging. The Group held the following hedging instruments as of the reporting date:

in kEUR	Nominal volume in kEUR		Fair value in kEUR
	31/12/2020	31/12/2019	31/12/2020	31/12/2019
Forward exchange transactions (sales)	3,035	10,585	63	-124

Financial instruments for currency hedging

The currency sensitivity analyses are based on the following assumptions:

Primary financial instruments which are denominated in a foreign currency are subject to currency risk and are therefore included in the sensitivity analysis.

Exchange rate-related changes in the market values of foreign exchange derivatives for which no hedge accounting was applied affect the currency result and are therefore included in the sensitivity analysis.

USD sensitivity analysis (in kEUR)	Impact on group result
	2020	2019
Appreciation 10%	-673	143
Devaluation 10%	822	-180

The risks arising from GBP, CNY and PLN have been subjected to a sensitivity analysis but have no material impact.

Interest rate risks

Interest-sensitive assets and liabilities are held in the MAX Group to the usual extent.

Business operations are financed by the syndicated loan at matching maturities. In order to maintain flexibility in the market, however, variable-interest refinancing options are used to a limited extent.

There is an interest cap arrangement – the contractual agreement of an interest rate ceiling – according to which the variable interest payable is limited to 4.35%. The cap is agreed for a fixed term until 7 June 2024.

in kEUR	Nominal volume in kEUR		Fair value in kEUR
	31/12/2020	31/12/2019	31/12/2020	31/12/2019
Interest rate caps	131	169	0	0

Interest rate risks are presented by means of sensitivity analyses in accordance with IFRS 7. These analyses show the effects of changes in market interest rates on interest income and interest expense, other income components and, where applicable, on equity. The interest rate sensitivity analyses are based on the following assumptions:

Changes in the market interest rates of primary financial instruments with fixed interest rates only affect earnings if they are measured at fair value. All fixed-interest financial instruments measured at amortized cost are therefore not subject to interest rate risk as defined by IFRS 7.

Changes in market interest rates affect the result of primary variable-rate financial instruments, with respect to which the interest payments are not designated as underlying transactions in cash flow hedges against interest rate changes, and are therefore included in the sensitivity calculations.

Changes in market rates for interest rate derivatives which are not included in a hedging relationship under IFRS 9 have an impact on the interest result and are therefore taken into account in the sensitivity calculations.

Market interest rate sensitivity analysis (in kEUR)	Impact on group result
	2020	2019
Appreciation 100 basis points	-626	-884
Devaluation 100 basis points	59	23

Other price risks

As part of the presentation of market risks, IFRS 7 also requires disclosures on how hypothetical changes in other price risk variables affect the prices of financial instruments. Stock exchange prices or market averages are particularly well-suited for use as risk variables.

No financial instruments were held to this effect, either in the year under review or in the previous year.

Categorization of financial instruments

Financial assets and liabilities currently exist only for the categories “at amortized cost” and “at fair value with through profit or loss.”

	Valuation category according	Book value	Fair Value ‎Level 2	Book value	Fair Value ‎Level 2
in kEUR	to IFRS 9	31/12/2020	31/12/2020	31/12/2019	31/12/2019

Financial Assets
Borrowings	AC	1,745	1,750	6,665	6,665
Trade receivables	AC	27,053		45,402
Cash and cash equivalents	AC	47,736		40,596
Other financial assets	AC	3,423		3,150
Financial liabilities
Loans	AC	115,038	115,038	121,900	121,900
Trade payables	AC	23,660		49,818
Derivative financial instruments	FVTPL	1	1	124	124
Other financial liabilities	AC	2,918		3,141

Measurement of fair value

All assets and liabilities for which the fair value is determined or subsequently disclosed are assigned to the measurement hierarchy described below:

Level 1: All financial instruments traded on active markets whose quoted prices have been adopted for measurement without any change.

Level 2: Measurement is performed on the basis of procedures using input factors that have been derived directly or indirectly from observable market data.

Level 3: Measurement is performed on the basis of procedures using input factors that are not exclusively based on observable market data.

Earnings per share

Since MAX Automation SE has not issued any dilutive instruments to date, the undiluted and diluted earnings per share are identical.

in kEUR	2020	2019
Profit attributable to the shareholders of MAX Automation SE used to determine the undiluted/diluted earnings per share	-26,452	-34,733

Number	2020	2019
Weighted average number of shares used as denominator to calculate undiluted/diluted earnings per share	29,459,415	29,459,415

in EUR	2020	2019
Undiluted/diluted earnings per share due to shareholders of MAX Automation SE	-0.90	-1.18

In the reporting period, the number of weighted shares corresponds to the number of shares issued.

Segment Reporting

Segment	Process ‎Technologies		Environmental ‎Technologies
Reporting Period	2020	2019	2020	2019
	kEUR	kEUR	kEUR	kEUR
Order intake	46,801	62,542	111,315	140,300
Order book position	20,184	24,696	47,221	47,505
Segment sales	50,883	73,377	110,312	127,637
- With external customers	50,698	73,323	110,310	127,633
- Inter-segment sales	185	54	2	4
Segment operating profit before depreciation & amortization (EBITDA)	6,866	14,821	14,167	12,943
EBITDA margin (in %, in relation to sales)	13.5%	20.2%	12.8%	10.1%
Total operating revenue	-	68,861	-	131,241
depreciation/amortization	-2,489	-2,219	-2,350	-1,782
impairment	0	0	0	0
Additions to other provisions and pension provisions	-	-1,201	-	-4,662
Segment operating profit (EBIT before PPA amortization)	4,377	12,603	11,817	11,161
PPA amortization	-223	-222	0	0
Goodwill Impairment	0	0	0	0
Segment operating profit after PPA amortization	4,154	12,380	11,817	11,161
Interest and similar income	-	3	-	116
Interest and similar expenses	-	-303	-	-189
Income from equity accounted investments	-	0	-	0
Segment result from ordinary activities (EBT)	-	12,081	-	11,088
Income taxes	-	-513	-	-2,124
Annual result	-	11,567	-	8,964
Non-current segment assets (excluding deferred tax)	20,355	20,405	23,111	20,858
- thereof Germany	15,045	15,256	19,262	17,268
- thereof other EU countries	4,032	4,458	116	22
- thereof North America	1,154	506	3,733	3,569
- thereof Rest of the world	124	185	0	0
Investments in non-current segment assets	1,744	2,521	4,581	2,724
Working Capital	13,307	16,648	17,222	17,605
Goodwill	-	6,163	-	6,399
ROCE (in %)¹⁾	11.2%	34.9%	24.7%	36.7%
Net debt	-8,989	-5,967	28,073	20,787
Average number of personnel excluding trainees	409	368	420	404

1) The return on capital employed (ROCE) corresponds to the ratio of EBIT to capital employed. Capital employed is the sum of intangible assets, property, plant and equipment, working capital, investment property and goodwill based on the twelve-month average.

Segment	Evolving ‎Technologies		Non-Core
Reporting Period	2020	2019	2020	2019
	kEUR	kEUR	kEUR	kEUR
Order intake	130,479	113,504	30,986	63,580
Order book position	108,738	80,689	33,276	46,629
Segment sales	104,935	136,213	43,645	89,806
- With external customers	102,566	134,918	43,427	89,608
- Inter-segment sales	2,369	1,296	218	199
Segment operating profit before depreciation & amortization (EBITDA)	7,269	16,900	-13,301	-36,580
EBITDA margin (in %, in relation to sales)	6.9%	12.4%	-30.5%	-40.7%
Total operating revenue	-	131,217	-	69,485
depreciation/amortization	-3,241	-3,548	-2,008	-3,007
impairment	-41	-208	-6,812	0
Additions to other provisions and pension provisions	-	-2,495	-	-4,945
Segment operating profit (EBIT before PPA amortization)	3,987	13,143	-22,121	-39,586
PPA amortization	-126	-189	0	-777
Goodwill Impairment	-3,463	0	-4,165	0
Segment operating profit after PPA amortization	398	12,953	-26,286	-40,363
Interest and similar income	-	252	-	162
Interest and similar expenses	-	-1,514	-	-1,994
Income from equity accounted investments	-	0	-	0
Segment result from ordinary activities (EBT)	-	11,678	-	-42,195
Income taxes	-	255	-	-820
Annual result	-	11,933	-	-43,015
Non-current segment assets (excluding deferred tax)	48,274	41,172	5,738	15,903
- thereof Germany	48,207	41,049	5,441	14,271
- thereof other EU countries	0	0	298	1,633
- thereof North America	0	0	0	0
- thereof Rest of the world	67	123	0	0
Investments in non-current segment assets	2,745	1,518	1,487	1,662
Working Capital	-2,867	7,668	11,873	31,199
Goodwill	-	29,512	-	4,165
ROCE (in %)¹⁾	0.7%	23.0%	-55.9%	-63.5%
Net debt	-53,176	-51,627	-9,256	-23,170
Average number of personnel excluding trainees	558	549	259	486

Segment	MAX Automation SE2)		Consolidation
Reporting Period	2020	2019	2020	2019
	kEUR	kEUR	kEUR	kEUR
Order intake	0	0	0	0
Order book position	0	0	0	0
Segment sales	2,104	3,270	-4,878	-4,816
- With external customers	0	6	0	0
- Inter-segment sales	2,104	3,264	-4,878	-4,816
Segment operating profit before depreciation & amortization (EBITDA)	-9,207	-8,641	-137	-336
EBITDA margin (in %, in relation to sales)	-	-	-	-
Total operating revenue	-	3,270	-	-4,816
depreciation/amortization	-248	-281	16	0
impairment	0	0	0	0
Additions to other provisions and pension provisions	-	-902	-	0
Segment operating profit (EBIT before PPA amortization)	-9,455	-8,921	-121	-336
PPA amortization	0	0	0	0
Goodwill Impairment	0	0	0	-2,676
Segment operating profit after PPA amortization	-9,455	-8,921	-121	-3,012
Interest and similar income	-	3,475	-	-3,264
Interest and similar expenses	-	-3,702	-	3,252
Income from equity accounted investments	-	-1,007	-	597
Segment result from ordinary activities (EBT)	-	-36,523	-	9,550
Income taxes	-	2,047	-	0
Annual result	-	-34,476	-	9,550
Non-current segment assets (excluding deferred tax)	87,359	97,857	-75,980	-60,300
- thereof Germany	87,359	97,857	-75,980	-60,300
- thereof other EU countries	0	0	0	0
- thereof North America	0	0	0	0
- thereof Rest of the world	0	0	0	0
Investments in non-current segment assets	50	118	-123	0
Working Capital	-410	-1,157	0	0
Goodwill	-	0	-	0
ROCE (in %)¹⁾	-	-	-	-
Net debt	-42,792	-49,069	847	8,046
Average number of personnel excluding trainees	15	9	0	0

2) The column MAX Automation SE contains the values of the parent company. The business transactions between the segments are eliminated in the Consolidation column. The sum of the two afore-mentioned columns is shown in the “Reconciliation” column in order to reconcile the segment information with the Group figures.

Segment	Reconciliation		Group
Reporting Period	2020	2019	2020	2019
	kEUR	kEUR	kEUR	kEUR
Order intake	0	0	319,581	379,925
Order book position	0	0	209,419	199,520
Segment sales	-2,774	-1,546	307,001	425,488
- With external customers	0	6	307,001	425,488
- Inter-segment sales	-2,774	-1,552	0	0
Segment operating profit before depreciation & amortization (EBITDA)	-9,344	-8,977	5,657	-893
EBITDA margin (in %, in relation to sales)	-	-	1.8%	-0.2%
Total operating revenue	-	-1,546	-	399,258
depreciation/amortization	-232	-281	-10,320	-10,836
impairment	0	0	-6,853	-208
Additions to other provisions and pension provisions	-	-902	-	-14,205
Segment operating profit (EBIT before PPA amortization)	-9,576	-9,257	-11,516	-11,937
PPA amortization	0	0	-349	-1,189
Goodwill Impairment	0	-2,676	-7,628	-2,676
Segment operating profit after PPA amortization	-9,576	-11,933	-19,493	-15,801
Interest and similar income	-	211	-	744
Interest and similar expenses	-	-451	-	-4,450
Income from equity accounted investments	-	-411	-	-411
Segment result from ordinary activities (EBT)	-	-26,974	-	-34,323
Income taxes	-	2,047	-	-1,154
Annual result	-	-24,926	-	-35,477
Non-current segment assets (excluding deferred tax)	11,379	37,557	108,857	135,896
- thereof Germany	11,379	37,557	99,333	125,400
- thereof other EU countries	0	0	4,446	6,113
- thereof North America	0	0	4,887	4,074
- thereof Rest of the world	0	0	191	308
Investments in non-current segment assets	-73	118	10,484	8,543
Working Capital	-410	-1,157	39,125	71,962
Goodwill	-	0	-	46,239
ROCE (in %)¹⁾	-	-	-9.3%	-8.4%
Net debt	-41,945	-41,023	-85,293	-101,000
Average number of personnel excluding trainees	15	9	1,661	1,816

The breakdown of operations into the Process Technologies, Environmental Technologies, Evolving Technologies and Non-Core Business segments corresponds to the current status of internal reporting. Allocations to the respective segments are made based on the products and services offered.

In the Process Technologies segment, the MAX Gruppe operates with the bdtronic-Gruppe, in the Environmental Technologies segment with the Vecoplan-Gruppe. In the Evolving Technologies segment, the MAX Gruppe is active with the companies NSM Magnettechnik GmbH, iNDAT Robotics GmbH, Mess- und Regeltechnik Jücker GmbH and AIM Micro Systems GmbH.

The Non-Core division bundles the companies ELWEMA Automotive GmbH, IWM Automation Bodensee GmbH, IWM Automation GmbH and IWM Automation Polska Sp.z.o.o., which are no longer part of the core business.

Further information about the business operations of the individual companies is provided in the Group Management Report and can be taken from this source.

The reconciliation column shows on the one hand income and expenses from transactions with other segments that are eliminated for consolidation purposes. It also shows the income and expenses of the individual company MAX Automation SE since it is a holding company and therefore has no operational activities.

Segment-related figures are published in accordance with IFRS 8 and these key ratios are also regularly reported to the Managing Directors and to the Supervisory Board and are of great importance in managing the Company. A special focus here is placed on sales and EBITDA as a measure of earnings. Working capital is also regularly subjected to more detailed analysis. Internal reporting is consistent with external accounting standards in accordance with IFRS. The segmentation of assets is also observed, whereby the domicile of the Company is the decisive criterion.

Other performance indicators included in the segment report are the average headcount, investments, order intake and order book position. In general, sales revenues from the current order backlog are expected to be realized in the next financial year.

In financial year 2020, the items total operating revenue, additions to other and pension provisions, interest income and similar income, interest expenses and similar expenses, income from equity accounted investments, EBT, income taxes and annual result are no longer shown in the segment reporting, as these internal key figures are no longer regularly reported to the chief operating decision maker and are accordingly no longer of major importance in managing the Company. In addition, the segment revenues by country from financial year 2020 onwards are shown in the “Revenue” chapter; the values of the goodwill can be found in the chapter “Goodwill.”

Transactions within the Group are generally conducted at arm’s length.

The segmentation of revenue is determined by the sales markets. Contrary to the provisions of IFRS 8.33 (a), the Company does not break down sales in the North American market by country as this market is regarded as a single unit in its economic development.

Projects accounted for revenue of TEUR 241,785 (previous year: TEUR 346,418), while sales of TEUR 65,217 (previous year: TEUR 79,070) were generated by business with service and spare parts.

One customer in the Evolving Technologies segment was responsible for revenue of kEUR 34,536 in 2020 (previous year: kEUR 52,407).

Events after the reporting period

On 15 January 2021, the Company submitted an application for contract modifications at the administrative office for the syndicated loan contract. The main objective of the application for a contract modification was to have the covenants of the syndicated loan readjusted. The bank syndicate accepted the application on 15 February 2021. As a result, the Company was able to further strengthen its financing.

The syndicated loan contract has a term until 2022 for a total volume of 190 million euros. The follow-up financing is on the work agenda of the Board of Directors for the 2021 financial year. In general, the company currently sees no reasons that would stand in the way of the successful closing of a follow-up financing due to the asset, financial and earnings situation as well as the market environment.

Other financial obligations

The following financial obligations from other non-cancellable contracts exist as of 31 December 2020:

in kEUR	2020	2019
up to 1 year	1,567	1,698
1 to 5 years	687	807
over 5 years	49	0
Total	2,303	2,505

Related party transactions

Related companies and persons as defined in IAS 24 are persons and companies (including affiliates) that can be controlled by the Company or can control the Company. In financial year 2020, MAX Automation SE was a Company dependent on Orpheus Capital II GmbH & Co. KG, Hamburg, Germany, and LS Digital & Management Services GmbH & Co. KG, Hamburg, Germany, in the sense of Section 17 AktG. There is a mutual attribution of voting rights between Orpheus Capital II GmbH & Co. KG and LS Digital & Management Services GmbH & Co. KG based on a voting agreement that came into force on 26 August 2020. The highest controlling parent company according to the AktG of Orpheus Capital II GmbH & Co. KG and of LS Digital & Management Services GmbH & Co. KG is Oliver Jaster, Germany. Control results from a constantly expected (factual) majority of votes at future general meetings.

The companies of the MAX Group provide and purchase various services for or from related companies in the course of their business operations.

Related enterprises

A free consultancy agreement was concluded with Günther Holding SE with effect from 1 September 2014, and was amended on 16 January 2017.

Related persons

Business transactions with related natural persons totaled kEUR 16 (previous year: kEUR 24). These relate to travel expenses incurred by Members of the Supervisory Board.

Auditor

Expenses for fees charged by the auditor of TEUR 975 (previous year: TEUR 522) were incurred in the year under review.

kEUR		2020	2019
1.	Audit services	875	449
	a) Services for current year	595	449
	b) Services for prior year	280	0
2.	Other assurance services	0	0
3.	Tax advisory services	0	0
4.	Other services	100	73
	Total	975	522

No other certification services were rendered in the current financial year or in the previous year.

Services in connection with the review of the mid-year financial report pursuant to Section 37w (5) of the German Securities Trading Act (WpHG) are recorded under audit services.

The other services essentially constitute forensic investigations.

Corporate Bodies of MAX Automation SE

Since the conversion to an SE on 8 February 2018, MAX Automation SE has had a monistic management structure which is characterized by the fact that the responsibility for the management of the SE is vested in a single management body, the Supervisory Board. The Managing Directors of MAX Automation SE conduct the business of the Company, taking joint responsibility for the goal of adding sustainable value. They implement the basic principles and guidelines set out by the Supervisory Board.

Managing Directors

Daniel Fink, Dusseldorf, Germany (until 31 March 2019), CEO

Member of the following other supervisory bodies:

Chairman of the Supervisory Board of Vecoplan AG, Bad Marienberg (until 31 March 2019)

Andreas Krause, Boppelsen, Switzerland (until 15 June 2020), CFO

Member of the following other supervisory bodies:

Deputy Chairman of the Supervisory Board of Vecoplan AG, Bad Marienberg (until 31 March 2019)

Chairman of the Supervisory Board of Vecoplan AG, Bad Marienberg (until 22 April 2020)

Dr. Christian Diekmann, Hamburg (from 1 January 2021), CEO / CFO and Chairman of the Management Board

Member of the following other supervisory bodies:

Chairman of the Supervisory Board of Vecoplan AG, Bad Marienberg (from 22 April 2020)

Werner Berens, Fahrsweiler, Germany

Member of the following other supervisory bodies:

No membership in other supervisory bodies

Dr. Guido Hild, Dusseldorf, Germany

Member of the following other supervisory bodies:

No membership in other supervisory bodies

Patrick Vandenrhijn, Regensburg, Germany (from 1 May 2019)

Member of the following other supervisory bodies:

No membership in other supervisory bodies

Total compensation of the Managing Directors

The following amounts were granted to the Managing Directors of MAX Automation SE in financial year 2020:

Daniel Fink ‎Executive Director (CEO) ‎until 31/03/2019	Benefits granted				Benefits received
	2020	2020
kEUR	(min)	(max)	2020	2019	2020	2019
Fixed compensation	0	0	0	80	0	80
Ancillary benefits*	0	0	0	7	0	7
Total	0	0	0	87	0	87
One-year variable compensation (STIP)	0	0	0	51	0	51
Multi-year variable compensation (LTIP)	0	0	0	314	0	314
thereof 2016 to 2019 program¹⁾	0	0	0	0	0	0
thereof 2017 to 2020 program¹⁾	0	0	0	0	0	0
thereof 2018 to 2021 program¹⁾	0	0	0	0	0	0
Total	0	0	0	452	0	452
Pension expense	0	0	0	0	0	0
Total compensation	0	0	0	452	0	452

*The main ancillary benefits were private use of the company car, insurance premiums and rent subsidies for housing

1) Payout in 2019

Andreas Krause ‎Executive Director (CFO) ‎until 15/06/2020	Benefits granted				Benefits received
	2020	2020
kEUR	(min)	(max)	2020	2019	2020	2019
Fixed compensation	124	124	124	270	124	270
Compensation	560	560	560	0	560	0
Ancillary benefits*	16	16	16	35	16	35
Total	700	700	700	305	700	305
One-year variable compensation (STIP)	0	258	0	186	186	40
Multi-year variable compensation (LTIP)	0	92	0	92	0	0
thereof 2018 to 2021 program	0	46	0	46	0	0
thereof 2019 to 2022 program	0	46	0	46	0	0
Total	700	1,050	700	583	886	345
Pension expense	0	0	0	0	0	0
Total compensation	700	1,050	700	583	886	345

*The main ancillary benefits were private use of the company car, insurance premiums and rent subsidies for housing

Werner Berens ‎Executive Director ‎since 01/05/2019	Benefits granted				Benefits received
	2020	2020
kEUR	(min)	(max)	2020	2019	2020	2019
Fixed compensation	230	230	230	153	230	153
Ancillary benefits*	37	37	37	23	37	23
Total	267	267	267	176	267	176
One-year variable compensation (STIP)	0	255	180	210	210	0
Multi-year variable compensation (LTIP)	0	585	137	48	0	0
thereof LTIP group 2019 to 2021	0	45	0	0	0	0
thereof LTIP group 2020 to 2022	0	45	0	0	0	0
thereof LTIP group 2021 to 2023	0	45	30	0	0	0
thereof LTIP Phantom Shares 2019 to 2021	0	60	13	24	0	0
thereof LTIP Phantom Shares 2020 to 2022	0	60	17	0	0	0
thereof LTIP Phantom Shares 2021 to 2023	0	60	13	0	0	0
thereof LTIP business unit 2019 to 2021	0	90	27	24	0	0
thereof LTIP business unit 2020 to 2022	0	90	20	0	0	0
thereof LTIP business unit 2021 to 2023	0	90	17	0	0	0
Total	267	1,107	584	434	477	176
Pension expense	0	0	0	0	0	0
Total compensation	267	1,107	584	434	477	176

*The main ancillary benefits were private use of the company car, insurance premiums and rent subsidies for housing

Dr. Guido Hild ‎Executive Director ‎since 01/07/2019	Benefits granted				Benefits received
	2020	2020
kEUR	(min)	(max)	2020	2019	2020	2019
Fixed compensation	198	198	198	93	198	93
Ancillary benefits*	24	24	24	11	24	11
Total	222	222	222	104	222	104
One-year variable compensation (STIP)	0	151	46	59	60	0
Multi-year variable compensation (LTIP)	0	399	69	29	0	0
thereof LTIP group 2019 to 2021	0	38	0	0	0	0
thereof LTIP group 2020 to 2022	0	38	0	0	0	0
thereof LTIP group 2021 to 2023	0	38	25	0	0	0
thereof LTIP Phantom Shares 2019 to 2021	0	50	11	20	0	0
thereof LTIP Phantom Shares 2020 to 2022	0	50	14	0	0	0
thereof LTIP Phantom Shares 2021 to 2023	0	50	11	0	0	0
thereof LTIP business unit 2019 to 2021	0	45	2	9	0	0
thereof LTIP business unit 2020 to 2022	0	45	0	0	0	0
thereof LTIP business unit 2021 to 2023	0	45	6	0	0	0
Total	222	772	337	202	282	104
Pension expense	0	0	0	0	0	0
Total compensation	222	772	337	202	282	104

*The main ancillary benefits were private use of the company car and insurance premiums

Patrick Vandenrhijn ‎Executive Director ‎since 01/05/2019	Benefits granted				Benefits received
	2020	2020
kEUR	(min)	(max)	2020	2019	2020	2019
Fixed compensation	230	230	230	153	230	153
Ancillary benefits*	29	29	29	13	29	13
Total	259	259	259	166	259	166
One-year variable compensation (STIP)	0	255	60	172	153	0
Multi-year variable compensation (LTIP)	235	1,120	332	275	235	0
thereof LTIP group 2019 to 2021	0	45	0	0	0	0
thereof LTIP group 2020 to 2022	0	45	0	0	0	0
thereof LTIP group 2021 to 2023	0	45	30	0	0	0
thereof LTIP Phantom Shares 2019 to 2021	0	60	13	24	0	0
thereof LTIP Phantom Shares 2020 to 2022	0	60	17	0	0	0
thereof LTIP Phantom Shares 2021 to 2023	0	60	13	0	0	0
thereof LTIP business unit 2019 to 2021	0	90	8	16	0	0
thereof LTIP business unit 2020 to 2022	0	90	6	0	0	0
thereof LTIP business unit 2021 to 2023	0	90	10	0	0	0
thereof special program 2017 to 2019	235	235	235	235	235	0
thereof special program 2020 to 2022	0	300	0	0	0	0
Total	494	1,634	651	613	647	166
Pension expense	0	0	0	0	0	0
Total compensation	494	1,634	651	613	647	166

*The main ancillary benefits were private use of the company car, insurance premiums and rent subsidies for housing

Dr. Christian Diekmann ‎Executive Director (CEO) ‎since 01/01/2021	Benefits granted				Benefits received
	2020	2020
kEUR	(min)	(max)	2020	2019	2020	2019
Fixed compensation	0	0	0	0	0	0
Ancillary benefits*	0	0	0	0	0	0
Total	0	0	0	0	0	0
Sign-on Bonus (one-time bonus)	125	125	125	0	0	0
One-year variable compensation (STIP)	0	0	0	0	0	0
Multi-year variable compensation (LTIP)	900	4,500	357	0	0	0
thereof LTIP Phantom Shares 2021 to 2024	225	1,125	173	0	0	0
thereof LTIP Phantom Shares 2022 to 2025	225	1,125	86	0	0	0
thereof LTIP Phantom Shares 2023 to 2026	225	1,125	57	0	0	0
thereof LTIP Phantom Shares 2024 to 2027	225	1,125	41	0	0	0
Total	1,025	4,625	482	0	0	0
Pension expense	0	0	0	0	0	0
Total compensation	1,025	4,625	482	0	0	0

The other compensation for the Managing Directors of MAX Automation SE consists of ancillary benefits in kind, mainly including the use of the company car and the provision of a company apartment. The individual Managing Directors are responsible for paying the taxes on the benefits in kind forming part of the compensation package. Benefits from the D&O insurance were not quantifiable for the Managing Directors of MAX Automation SE as this is a collective insurance policy that covers a number of employees.

In total, the allowances for the Managing Directors in 2020 amount to kEUR 2,272 (previous year: kEUR 2,284).

Share-based remuneration

In addition, three of the four Managing Directors are granted so-called Phantom Shares as part of a three-year LTIP. The Managing Directors are granted fictitious shares (“Phantom Shares”) for a value determined by the Supervisory Board (“issue value”) on a certain date specified in each financial year (“issue date”). The number of Phantom Shares to be granted is calculated as the quotient of the equivalent value and the arithmetic mean of the closing prices of the ordinary shares of MAX Automation SE determined in XETRA trading on the Frankfurt Stock Exchange within a period of 90 trading days before the issue date. The Phantom Shares grant the Managing Director a claim to payment of a gross amount (“Phantom Share Payment”) in the amount of the accounting value multiplied by the number of Phantom Shares. The settlement value is the arithmetic mean of the closing prices of the ordinary shares of MAX Automation SE determined in XETRA trading on the Frankfurt Stock Exchange within a period of 90 trading days before the settlement day (“settlement value”). The Phantom Share payment is limited to an individually determined maximum amount of the issue value. In addition, one of the Managing Directors is granted a special bonus that was agreed upon prior to his activity as a Managing Director. This special bonus is based on the fact that the Managing Director holds a MAX Automation SE share package, the purchase price of which is used as a factor (starting value) for EBIT development (analogous to an EBIT multiple assessment) of the business area for which the Managing Director is responsible. The special bonus is paid out as a long-term incentive at the end of a three-year term.

A new Managing Director took up his position at MAX Automation SE on 1 January 2021. In addition to fixed remuneration and a STIP, he will be granted a one-time so-called “Sign-on Bonus” in 2021. In addition, he is being given the opportunity to receive Phantom Shares per year of his four-year contract term on a fixed date, which are to be settled after a specified holding period of four years. The settlement value is the arithmetic mean of the closing prices of the ordinary shares of MAX Automation SE determined in XETRA trading on the Frankfurt Stock Exchange within a period of 90 trading days before the settlement day (“settlement value”). The Phantom Share payment is limited to a maximum amount of five times (500%) the issue value.

The fair value of the Phantom Share program was determined for all Managing Directors using the Black-Scholes-Merton model in accordance with the regulations of IFRS 2 (Share-based Payment). The expected volatility of 157%, which is included as an input parameter in the Black-Scholes-Merton model, is based on an assessment of the historical volatility of the MAX Automation SE share price over the last five years and has a corresponding influence on the fair value of the Phantom Shares.

On the balance sheet date 31 December 2020, a total of 303,370 Phantom Shares were taken into account for all beneficiaries within the scope of the valuation based on the settlement value determined on the grant date. The fair value amounts to kEUR 466. 251,225 new Phantom Shares were granted in financial year 2020 that are included in the afore-mentioned total number of Phantom Shares. The fair value of the Phantom Shares newly granted in the financial year is kEUR 357.

There were no changes to existing Phantom Share regulations in the financial year.

The provision for the Phantom Share program in the amount of kEUR 466 (previous year: kEUR 69) is reported under non-current liabilities under other provisions.

At this point, MAX Automation SE explicitly points out that the previously explained calculations cannot be used to derive any forecasts regarding the development of the share price on the part of the Company. This exclusively concerns the application of the calculation methodology prescribed by IFRS 2 (Share-based Payment). The same also applies to the minimum and maximum values determined for the Phantom Shares program in the tables presented above. Due to the calculation method of IFRS 2 (Share-based Payment), these are more of a theoretical nature.

No other or similar securities-based incentive systems were granted to the Managing Directors or employees.

Members of the Supervisory Board

Dr. Christian Diekmann, Hamburg

Dipl.-Kaufmann, Managing Director of ZRT GmbH and Zertus GmbH, Hamburg (until 31 December 2020)

Chairman of the Supervisory Board

Member of the following other supervisory bodies:

Member of the Board of Zertus Beteiligungen Lir Chocolates Ltd. Navan, Ireland, (until 31 December 2020)

Member of the Board of Zetar Ltd., London, Great Britain (until 31 December 2020)

Member of the Board of Zertus UK Ltd., London, England (until 31 December 2020)

Chairman of the Board of Gaea Products SA, Athens, Greece (until 12 November 2020)

Dr. Jens Kruse, Hamburg

General Representative of MM Warburg & CO (AG & Co.), Hamburg

Deputy Chairman of the Supervisory Board

Member of the following other supervisory bodies:

Member of the Supervisory Board of Biesterfeld AG, Hamburg

Deputy Chairman of the Supervisory Board of PNE AG, Cuxhaven (until 20 April 2020)

Dr. Ralf Guckert, Hamburg

Managing Director (CDO) Günther Holding SE, Hamburg

Member of the Supervisory Board (since 25 January 2019)

Member of the following other supervisory bodies:

Member of the Advisory Board of Langenscheidt GmbH & Co. KG, Munich, Langenscheidt Digital GmbH & Co. KG, Munich, and Langenscheidt Management GmbH, Munich (Günther SE Group-internal mandate) (until 31 December 2020)

Member of the Advisory Board of all4cloud GmbH & Co. KG, Viernheim, and all4cloud Management GmbH, Hamburg (Günther SE Group-internal mandate)

Member of the Advisory Board of Günther Direct Services, Bamberg, and G Connect GmbH, Munich (Günther SE Group-internal mandate)

Oliver Jaster, Hamburg

Chairman of the Supervisory Board of Günther Holding SE, Hamburg

Member of the Supervisory Board (until 29 May 2020)

Member of the following other supervisory bodies:

Member of the Supervisory Board of ZEAL Network SE, London

Chairman of the Advisory Board of Langenscheidt GmbH & Co. KG, Munich, Langenscheidt Digital GmbH & Co. KG, Munich, and Langenscheidt Management GmbH, Munich (Günther SE Group-internal mandate) (until 31 December 2020)

Chairman of the Advisory Board of all4cloud GmbH & Co. KG, Viernheim, and all4cloud Management GmbH, Hamburg (Günther SE Group-internal mandate)

Chairman of the Advisory Board of Günther Direct Services, Bamberg, and G Connect GmbH, Munich (Günther SE Group-internal mandate)

Chairman of the Board of Directors of Günther SE, Bamberg (Günther SE Group-internal mandate)

Karoline Kalb, Augsburg

Board member and CFO of Testo SE & Co. KGaA, Titisee-Neustadt

Member of the Supervisory Board (since 29 May 2020)

Member of the following other supervisory bodies:

No membership in other supervisory bodies

Marcel Neustock, Lübeck

Investment Director Günther Holding SE, Hamburg

Member of the Supervisory Board (since 29 May 2020)

Member of the following other supervisory bodies:

No membership in other supervisory bodies

Andreas Krause, Boppelsen, Switzerland

Managing Director of MAX Automation SE (until 15 June 2020)

Member of the Supervisory Board (until 29 May 2020)

Total compensation of the Supervisory Board

The compensation paid to the Supervisory Board in 2020 amounted to kEUR 283 (Previous year: kEUR 232). Besides the reimbursement of their expenses, the Chairman of the Supervisory Board receives kEUR 120, the Deputy Chairman of the Supervisory Board kEUR 60 and the remaining members of the Supervisory Board with the exception of Managing Directors kEUR 40 after the end of the financial year.

in kEUR	Fixed ‎remuneration		Consultancy ‎services		Total
	2020	2019	2020	2019	2020	2019
Dr. Christian Diekmann, Chairman (from 18/05/2019)	120	75	0	27	120	102
Dr. Jens Kruse, Deputy Chairman (from 01/01/2019 until 17/05/2019 Chairman)	60	83	0	0	60	83
Dr. Ralf Guckert (from 25/01/2019, until 17/05/2019 Deputy chairman)	40	48	0	0	40	48
Oliver Jaster (until 29/05/2020)	17	40	0	0	17	40
Karoline Kalb (from 30/05/2020)	23	0	17	0	40	0
Marcel Neustock (from 30/05/2020)	23	0	0	0	23	0

The members of the Supervisory Board did not receive any loans or advances in financial year 2020.

Further information can be found in the compensation report in the Group Management Report under “Report on Board Members’ compensation.”

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