EQS-Adhoc

edding Aktiengesellschaft: Unexpectedly high negative effect of EUR 5.0 million from deconsolidation of edding Argentina S.A. - Seite 2

The determination of the deconsolidation effect, which was carried out with external support by a certified public accountant, was very time-consuming and complex, among other things due to the hyperinflationary accounting mentioned above. Our auditors will audit this issue at short notice; it cannot be ruled out that the auditors will come to different conclusions on individual aspects and that the deconsolidation effect may change significantly.

The Management Board of edding Aktiengesellschaft emphasises that the Group's cash flow is not affected by this effect and that the Group's equity is only marginally affected by the deconsolidation. Therefore, the commercially reasonable sale of edding Argentina S.A. would also have been decided with prior knowledge of this effect.

This technically necessary and non-cash one-time effect from the deconsolidation will lead to a negative annual result in the consolidated financial statements for the first time in the history of edding Aktiengesellschaft since 1960 and makes it necessary to correct our forecast corridors published with the Annual Report 2022 for the year 2023.

Besides this negative impact on Group EBIT from the deconsolidation effect, the sale of edding Argentina S.A. and, to a lesser extent, a refocusing of Prismade Labs GmbH also have an impact on the sales forecast; the launch of a new business model of Prismade Labs GmbH originally planned for 2023 under the "Soulmade Origins" brand, which was to involve the printing of so-called non-fungible tokens (NFT) with an interface to digital origins based on Prismade technology, will no longer be implemented within the edding Group.

Overall, compared with the original budget, this results in slightly lower Group sales revenues, a significantly reduced Group EBIT in accordance with IFRS and moderately higher impairment expenses in the individual financial statements of edding Aktiengesellschaft. Accordingly, the edding Group now expects Group EBIT in accordance with IFRS to be between EUR -4.0 and -1.0 million in 2023 (previously EUR 3.0 to 6.0 million). Group sales revenues are now expected to be in a range of EUR 161.0 to 176.0 million (previously EUR 166.0 to 181.0 million). Net income for the year in edding AG's individual financial statements under German commercial law is expected to be between EUR -0,5 and 1.5 million (previously: EUR 1.0 to 3.0 million).