intelligent green software · analyst conference annual report 2019 webcast, 24 march 2020...

Analyst Conference Annual Report 2019Webcast, 24 March 2020

INTELLIGENTGREENSOFTWARE

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Safe-Harbour-Statement

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This presentation may contain forward-looking statements regarding the business, results of operations,financial condition and earnings outlook of PSI Group. These statements may be identified by words suchas “anticipate“, “believe”, “estimate“, “expect”, “forecast”, “intend“, “may”, “plan”, “project”, “predict“, “should”and “will” and variations of such words or similar expressions. These forward-looking statements are basedon our current assessments, expectations and assumptions, of which many are beyond control of PSIGroup, and are subject to risks and uncertainties. You should not place undue reliance on these forward-looking statements. Should these risks or uncertainties materialise, or should underlying expectations notoccur or assumptions prove incorrect, actual results, performance or achievements of PSI Group maymaterially vary from those described explicitly or implicitly in the relevant forward-looking statement. Thiscould result from a variety of factors, such as the level of customer orders received, the demand forprocess control and optimisation software in the market, the timing of final acceptance of deliveries bycustomers, the condition of financial markets and access to financing for PSI Group, general conditions inthe software market and macroeconomic conditions, cancellations, rescheduling or delays in projects,capacity constraints, extended sales and qualification cycles, misuse of systems or misbehaviour by own orsubcontractors employees, misuse of systems or misbehaviour by customers, organisational failures,technical failures of own software and hardware systems, technical failures of 3rd party software andhardware systems and any other factors discussed in any reports or other announcements, in particular inthe Risk Report in the PSI Group Annual Report. Any forward-looking statements contained in thisdocument are based on current expectations and projections of the executive board based on informationavailable the date hereof. PSI Group undertakes no obligation to revise or update any forward-lookingstatements as a result of new information, future events or otherwise, unless expressly required to do soby law.



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PSI Software – Optimizing the flow of energy and materials

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PSI segments and vertical markets (in percentage of sales revenues)

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Energy Management Production Management

Elektrical & combined grids 34%

Gas grids/oil 10% Energytrading 2%

Public transport 6%

Metals 22%

Automotive/machinery 16% Logistics 11%

PSI Java Platform with shared modules, common tool chain and resource poolsShared world wide sales & service centers

Headquarter with shared services



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New orders and order backlog 2015-2019

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New orders with strong growth in energy, automotive, metals and in PolandNew orders 2019 with 236 million EUR8,8 % über VorjahrOrder backlog on 31 December 2019 at 142 million EUR 2.2 % above last yearOrder backlog on 29 February 2020 at 182 Million EUROrder coverage 31. December 2019: 8 monthsOrder coverage as of today: 10 months

195182

190

217

236

129 129 128139 142

2015 2016 2017 2018 2019

New ordersOrder backlog on 31 December

IFRS in million EUR



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Important orders 2019

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Transnet BW AFFR (power frequency control Germany)Amprion (DeepQualicision/SASO and integration new control system)DB Energie (radio router network connection for control systems)NEW Netz (integrated control system for electricity, gas, water, wastewater)DREWAG/ENSO (integrated control system for electricity, gas, water, heat)Nowega, Thyssengas, ONTRAS (control system upgrades for gas grids)Stadtwerke Duisburg Energiehandel (energy trading system)GVB Amsterdam (cloud based control system for public transport)Keolis S.A. (depot and charging management for e-buses in the Paris area)Stadtwerke Bonn (depot management for buses and trams)HBIS Laoting (steel plant solution production management, China)TMK (planning and production management tube steel plant, Russia)KÖNIG METALL (ERP, SCM and MES for automotive parts supplier)Continental Tires Germany (swarm production optimization)VAR Partners Fiege Logistics (5 warehouse projects, last year 2)Airport Bratislava (baggage identification system)



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104 92 102 100128

109

8695

115100

124

116

190 186

217

199

236

225

2017 2018 2019

Production management

Energy management

New orders 2019 with236 million EUR 9% above last year (217)Sales revenues 2019 with225 million EUR 13% above last year (199)Growth indicator book-to-bill-ratio grows from 102% to 105%Development of long-term upgrade contractsleads to declination of this indicator

Energy management16% growth (last year 5%) to 116 million EUR mainly due to takeover and traffic transition

Production managementGrows again at 10% (last year 10%) to109 million EUR mainly in logistics in Germany and Poland

New orders and sales revenues by segments 2017-2019

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IFRS in million EUR

2017 2018 2019



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Sales revenues by regions 2015-2019

8

93,1 97,0 104,7 115,7132,8

32,237,6

38,336,1

39,4

19,3 11,410,8

13,3

10,6

11,0 9,811,9

14,6

19,8

2,1 1,74,3

3,3

2,6

26,0 19,416,1

16,2

20,0

183,7 176,9186,1

199,2

225,2

2015 2016 2017 2018 2019

China, Southeast Asia, Pacific

Middle East

Russia and Eastern Europe

North and South America

Western and Northern Europe

Germany2019:

Organic growth and acquisitionBTC Smart Grid in GermanyRecovery of demand in Russiain gas gridsand logisticsIn steelbusiness large orders in China, USAand Russia

Trend 2020:Stable business with grid operators, but steel/CO2 and Diesel crisis in EuropeGrowth consumer logistics (DE, PL, RU)Partial agreement in tariff dispute USA/China



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21,0% 21,0% 20,8% 22,5% 24,3% 26,8% 27,9% 29,6% 31,1% 31,9%33,5%5,9% 6,2% 8,4%

9,7% 11,0% 7,4%7,2% 7,7%

6,5%8,0%

8,3%11,1% 11,0%

11,9%12,3%

13,8%

59,4%63,3%

60,9%57,6% 52,1% 56,0%

44,5% 43,9%42,4%

38,6%

34,9%

13,7%

9,6%9,9%

10,2%12,6% 9,9%

9,4%7,8%

8,1%

9,2%

9,5%

147,0

158,7169,5

180,8 176,3 175,3183,7

176,9186,0

199,2

225,2

09 10 11 12 13 14 15 16 17 18 19

Sales revenue analysis 2009 – 2019

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IFRS in million EUR

Fixed price projects

Maintenance & upgrades

Partner products

Time & material projects

Licenses

Product and platform strategy drives high marginrevenues from consulting at cost, licenses, upgrade fees and maintenance.

Partner products (IT equipment) with weak margins (+ headquarter charge)Relative share of fixed price projects further reduced to 35%. Fixed price projects with risks and negative margins after central costs.Increasing number of new customer projects Nwith binary products ona time & material basis (or with partners).Margins are still weak but much better than in fixed price business.Low risk, profitable, recurring software product business (maintenance, upgrade, licenses, consulting) growths to 56% (125 million EUR), (last year 52%, 104 mllion EUR).



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Earnings 2015-2019

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15,416,1

17,7

20,1

28,0

11,111,8

13,4

15,5

17,2

9,4

11,212,5

14,5

16,4

7,58,6

9,510,6

14,3

2015 2016 2017 2018 2019

EBITDAEBITEBTGroup net result

IFRS in million EUR

5,5

2,4

EBITDA grows by 40% to 28 million EUR

thereof IFRS 16 effect 5.3 million EUR

EBIT improved by 11 % to 17,2 million EURBetter financial result (Forex) and lower tax expenses due tocapitalisation of tax losses carried forwardthereof IFRS 16 effect 5.3 million EURNettoergebnis increased by 33,8 % to14.3 million EUR

Earnings per share up from0.68 EUR to 0.91 EUR



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EBIT 2014-2019 by segments

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4,8 5,3 5,8

2,2

6,27,1

9,9 10,0

11,8

1,80,8

0,1

4,4

6,8 7,2

-1,2 -1,2 -1,2 -0,9 -1,3 -1,8

7,7

11,111,8

13,4

15,5

17,2

2014 2015 2016 2017 2018 2019

Energy management

Production management

Energy management

Infrastructure management

* 2017 segment color changed

Production management with11.8 million EUR EBIT (10.8% EBIT margin)which means 18% earnings growth in logistics, automotive, Poland and in metals industries

Further improvements based on group platform with PSI-Click-Design, partner program and binary standard productsin the App Store Cloud

Energy management* with 7.2 million EUR(6,2% EBIT margin) only 6% earnings growth due to - Takeover integration cost- Investments in intraday algo trader- Weakness of South Asian business

Product character of business and partnership capability will beimproved further



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Sales revenues and EBIT by quarters 2015-2019

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43,2 47,3 46,1 47,1 42,6 42,5 42,849,0

43,8 43,8 45,553,0

45,7 48,8 47,057,6

52,0 54,6 53,1

65,5

0

10

20

30

40

50

60

70

2,2 2,13,2

3,8

2,2 2,4 2,4

4,9

2,6 3,12,5

5,2

2,83,4 3,9

5,4

3,0 3,5 4,0

6,7

0

2,5

5

7,5

Sales revenues

EBIT

2015 2016 2017 2018 2019

IFRS in million EUR2015 2016 2017 2018 2019



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Cashflow and Cash 2015-2019

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14,0 13,3

1,2

19,0

12,5

-2,2 -2,9-4,1

-7,4-8,7

-2,1

-6,7

-1,1

-4,8

-10,2

38,8

43,0

38,1

44,6

38,7

2015 2016 2017 2018 2019

IFRS in million EUR

Cash flow from operating activities with 12.5 million EUR (2018: 19.0 million EUR)below last year due to growth financingCash flow from investment activities-8,7 million EUR (2018: -7,4 million EUR),investments in IT equipment and takeoverBTC Smart GridCash flow from financing activities after dividend payment and IFRS 16 application-10,2 million EUR (2018: -4,8 million EUR)Cash down to 38.7 million EUR(2018: 44,6 Mio. Euro)

Corona can be a temporary stress test for financial strength

Dividend proposal 0,05 EUR (last year 0,25 EUR)



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Balance sheet structure 2015-2019

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0

50

100

150

200

250

2019 2018 2017 2016 2015 2015 2016 2017 2018 2019

199.4 194.0208.7

199.5199.4194.0208.7

199.5

Current assets increased due to growth (highertrade receivables, percentage-of-completionreceivables and inventories)Non-current assets increased significantly through IFRS 16 effect and acquisition of BTC Smart Grid

Current liabilities increased due to higher advance payments and trade payablesLong-term liabilities increased significantly through IFRS 16 effectShareholders’ equity increased by 7.9 million EUR to 94.5 million EUR due to net profits, equity ratio at 38 %

Balance sheet total 19.2 % above last year due to IFRS 16

248.8 248.8

IFRS in million EUR

Shareholders’ equity

Non-current liabilities

Current liabilities

Non-current assets

Current assets



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PSI share price 2009-2020 (vs. TecDAX)

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31/12/2008EUR 3.60

31/12/2011EUR 14.72

31/12/2012EUR 15.41

31/12/2013EUR 13.55 31/12/2014

EUR 11.91

31/12/2015EUR 12.90

31/12/2010EUR 17.85

31/12/2009EUR 8.85

31/12/2017EUR 18.51

31/12/2016EUR 12.20

0.21€

0.22€

0.23€

0.21€

0.30€0.25€

0.23€

31/12/2018EUR 15.65

0.25€

31/12/2019EUR 20.80

31/12/2019EUR 12.20



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PSI shares and shareholder structure

Number of shares: 15.7 million sharesShare price (18/03/20): 12.20 EuroMarket capitalisation: 192 million EuroMarket segment: Prime StandardDesignated Sponsors: Pareto Securities, HSBCAnalyst coverage: DZ Bank, First Berlin, GSC Research, Dr. Kalliwoda, Quirin Privatbank,

Pareto Securities, Solventis

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Management and employeesapprox. 15%

Harvinder Singh8.1%

Institutional Investors < 3%approx. 15%

innogy SE17.8% InvAG für langfristige Investoren TGV

20.7%

Other free floatapprox. 18%

Baden-Württembergische Versorgungsanstalt5.2%

according to WpHG voting rights announcements



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Research and development

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19,516,8 18,5

22,0 24,0

2015 2016 2017 2018 2019

Million EUR

R&D costs at 10.7 % of revenuesOngoing investments in core topics like industry 4.0, artificial intelligence, energy, traffic and heat transitionFurther development and rollout of the group software platform,e.g. business process management and WORA web mobilePreparation of the control system products not yet migratedto the group platform for the changeoverExpansion of the PSI Java platform to an automated multi-cloud cooperation platform

Collaboration platform



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PSIgui

PSI Java Framework: internal framework and open platform for customers & partners

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GenericPSI products (Java)

Flexible businessprocess management(BPMN2 Camunda)

PSI Platform forinterconnectivity and automated object relational persistence

PSIjscada PSI Time SeriesManagement

PSI AdvancedScheduling

PSI ProductionOrder (PSIpenta)

PSI Warehouse Management

PSI ManufacturingExecution

Customer or Partner Application

Platformindependence

Vertical marketPSI products (Java)

Space forcustomer ITand partner

PSI Deep Qualicision

PSI Click Design & GUI run identically onRich- and Web-Clients

PSIgui

PSI modelling framework interface

PSI PersistencePSIguiPSIchart

PSIintegration PSIganttPSIvisu2DPSIbus

PSIauth

PSIgui PSIgui



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PJF Developer GUI

Web / Mobile and WORA principle

WORA principle • Write Once, Run Anywhere

Main enabler: model driven applications• PSIgui is based on a presentation model (PM, “Click Design”)• Persistence/Database is based on a domain and persistence model (DPML)• Data transfer to PSIgui is based on a query model (QM)• The “wiring” of PSIgui actions with PSIbus commands can be achieved in a

declarative way by configurable actions.

Click Design is already supported with current PSIweb client• Configurable lists• Configurable edit views• Configurable view compositions (e.g. master/detail)• Editing models on the web client

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New growth potential from climate action programme of German government

National emission trading for heat and traffic- Rising demand for trading softwareLower electricity prices will drive electrification- Higher investments in smart grid technologiesIncentives for replacement of oil-fired heating- Investments in gas grid infrastructurePushing e-mobility (charging stations, e-vehicle funding)- Rising demand for smart charging management- New e-vehicle production lines based on swarm productionInvestments in public transport and rail traffic- Rising demand for vehicle management, train managementand depot management software

- Rising demand for transport management software in logisticsCoal phase-out and structural change in the energy sector- Higher investments in grid infrastructure for more renewablesInvestments in energy efficiency in production processes- More investments in production optimization with energymanagement and PSI Industrial Intelligence

More R&D for Hydrogen, Biogas and Biofuels- Investments in pipelines and gas grid infrastructure

20



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PSI growth topic intelligent grid control

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Climate action program and energy transition

Only 17 GW electricity from coal fired plantscoal phase-out by 2038

Share of renewable energy in electricity consumption to rise to 65 percent by 2030

Reduction of the EEG levy to lower the price of electricity accelerates electrification

Higher investment in grid infrastructure formore renewable energy

Increased investments in smart grid technologies for the intelligent control of distributed generation and consumption

Source: FotostudioSienz Kempten



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PSI growth topic intelligent gas grids and pipelines

Climate action program drives investment inhydrogen, biogas and biofuels

After the coal phase-out, gas is the onlyreserve energy for renewable energy droughts

Due to the high hydrogen content, methanegas (natural gas, biogas, green gas) reduces theCO2 content of the energy mix in the short term

Support program for the replacement of oil-fired heating systems will provide additionalimpetus for the gas industry

National hydrogen strategy and Power2Gasdemand investments in gas grids and storage

Pipeline management and monitoring as well asdetection of leaks for the transport of biofuels,bioethanol and other liquids

22



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PSI growth topic integrated energy

Climate action program drives energy,transport and heat transition

Promoting e-mobility to reduce CO2 in the transport sector

Expansion of combined heat andpower generation and extensionof promotion program until 2030

Restructuring and expansion of heatingnetworks for the increased use of wasteheat and renewable energy

Growing demand for intelligent integrated network control systems for electricity, gas,water and heat

23



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PSI growth topic e-mobility and public transport

Climate action program for CO2-neutral traffic and transport

Expansion of the charging infrastructure to 1 millioncharging points by 2030 requires intelligent grid control

Higher purchase premium and tax incentivesfor electric cars drive investments in new vehicle models and production lines

Reduction of VAT on rail tickets to promote rail transport

Conversion of local public transport to electricbuses leads to a strong increase in demand forE-bus depot management with intelligentcharging management

Intelligent solutions to optimize the supply chainin freight transport for additional emission savings

24



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PSI in public funded research projects for the energy and heat transition

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Energy Shield (IT SEC) EUZellNetz 2050HONOR (Hollistic Flexibility Market)FlexQGrid (Network traffic light distribution grid)InnoSys 2030 (Innovative grid control)Spin AI (Intelligent peak caps)MathEnergy (Power2Gas)NetzDatenStrom (Big Data)IDEAL (Decentral impedance controller)

Approved projects: 5.2 million EUR



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PSI in public funded research projects mobility transition and industry 4.0

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BaSys 4.2 (Industry 4.2)APEROL (autonomous mobility services)SiLke (Blockchain secured supply chains) iP4MoveKiBoNum (AI-based traffic optimization)LandLeuchten (e-mobility in rural areas)

Approved projects: 4.2 million EUR



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PSI decision support and autopilot for electric grids with high share of renewable energy

27

Reactive power forecast and decision support

Phase angle forecastand decision supportVoltage stability forecast

and decision support

Areas of influenceLearning weather-basedrenewable generation and load forecast

Deep LearningExtended Fuzzy Logicgoal solver and long term calibration

Maximizing safety and profit marginsArtificial Intelligence predicts renewables based on weather dataDeep learning, extended fuzzy goal solver



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Distribution System Operators

110kV, MSP

PSI electrical & integrated grids – customers in Germany

28

TransmissionSystem Operators

380kV, 220kV

Integrated & MunicipalUtilities

Power, Gas, District Heating,Water

EnergieNetzMitte

MITNETZSTROM

WestnetzGmbH (Teil von innogy)

e-netzSüdhessen

EnergieNetzeMittelrhein GmbH

Pfalzwerke Netz AG

SYNA

SYNA

LVN

bayernwerk

AllgäuNetz GmbH & Co. KG

Main-DonauNetzgesellschaft mbH

Netze BW GmbH

ThüringerEnergienetze

avacon

Hansewerk

e.dis

DREWAG GmbHensoNETZ

EWR

EWE Netz GmbHWesernetz Bremen GmbH



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Corona scenario A "mild" 2020 and PSI reactions

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1. Hiring freeze since the beginning of February2. Layoffs in Malaysia (30 of 170 plus subs)3. Employees have been using notebooks (2000 pcs) and

3000 VPN connections for home office for years4. Employees with high health risk sent to home office on

13 March and running well so far5. Employees with a low health risk to the home office on

20 March (will be taken back if the rules are relaxed)6. System acceptance tests, change orders, upgrades,

sales presentations are already carried out via web7. Acceleration of App Store and multi-cloud deployment8. Workload balancing based on PSI Java platform 9. Early retirement and possibly probationer (130) dismissed10.Emergency operating: overtime reduction, forced

vacation, undertime, short-time work, company holidays11.Products and platform as work storage12.Variable salaries (8 MEUR) are automatically reduced=> 138 MEUR personnel costs (2019) can be reduced by

25 MEUR without relevant adjustment costs

App store

1. Quarantine schools/universities, cities, companies, countries, ...

2. Interest rate cuts/purchase programs of central banks3. Tax deferral, digressive depreciation, new software

depreciation4. State guarantees, KfW emergency loans and equity5. Acceleration of public investments (Greendeal etc.)6. Short-time working laws 7. Aggravation and relaxation phases of the quarantine8. Rapid tests, approval for antivirals, vaccine tests9. Winter 2020 vaccination campaigns



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PSI Digital Sales & Services Initiative 2020

30

Collaboration platform- Communication- Business Process Adaptation- Rollout & Orchestration- Operations & Monitoring- Selfservice & Support

Automated multi-cloud deployment(or license certificates for on premise installations)App store



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PSI App Store und multi-cloud deployment

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Showing web portal designed with PJF Click Design Editing with PSI-Click-Design graphical WYSIWYG editor

Choose your cloud characteristicsbest price / performance worldwidedata stays in domestic legislationgreen powered

Configure your cloud powerhow many power users (downloaded client)how many professional users (well powered cloud)how many light users & observers (economic cloud resources)



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PSI App Store und multi-cloud deployment

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ASM server automated sizing and instantiationon Amazon Web Service Cloud

ASM client full automated downloadas app to rich client (and upgrade service)for power users

ASM client automated instantiation on Amazon Web Service Cloud with PJFwebfor light user with web browser... comming Q1 2020



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Disadvantages and advantages of corona time

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Liquidity bottlenecks with weaker customers in some customer segmentsProblems with incoming orders from new customers due to lack of trade fair contactsUps and downs in the markets by infection rate and quarantine tightening/de-tighteningBusiness with oil and gas countries like Russia and Malaysia will sufferPrice pressure for all non-USP services Slightly higher IT and TC costs (2019: 4 million EUR)Productivity in the home office of employees with care responsibilities suffersMore effort for liquidity and capacity management

States/customers are again realizing the value of PSI (must-run-physical-process) systemsMore and faster government investment programs, especially for mobility and heat transitionSome customers prefer software projects as an employment measure for their employeesLess risky fixed-price new customer projects, more upgrade projects (release harmonization)Reduced travel costs (2019: 7.4 million EUR)Lower trade fair costs, more online marketingNerds' productivity increases in the home office Employees save commuting and travel timeCompetitors, especially small ones, are disappearingFluctuation decreases, wage pressure decreases, top candidates, sense of belonging increasesCompany takeovers cheaper and more available Share buyback more favorableEven conservative customers do workshops, meetings, acceptance tests via web conferencePaperless office prevails everywhereAcceptance of the App Store/Auto-Cloud by employees and customers is massively accelerated



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Review 2019 and Guidance 2020

Risks in order intake automotive/mechanical engineering, but upgrade rolloutOil price slump hits Russia and MalaysiaEnergy network operators and consumer logistics little affected in 2020Opportunities from long-term US investment programs and China recoveryOpportunities through government investment programsTrial App Store and multi-cloud deliveryIf necessary, 25 MEUR personnel costs can be reduced by fluctuation

Incoming orders at the end of February 2020: 74 million EuroOrder expectation in March: 10 - 25 million Euro

=> Exciting year full of opportunities and risks

34

Review 2019 Revenues EBITManagement Guidance 220 approx. 17Analysts‘ estimates 220 17.1Actual 2019 225.2 17.2

Guidance 2020 Revenues EBITBefore Corona crisis +5 % +10 %Current assessment -5 % - 20 %

0

500

1000

1500

2000

2500

0

50

100

150

200

250

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

New orders

Sales revenues

Employees

Order book volume

Maintenance andupgrade revenues

EBIT



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Financial calendar 2020

35

24 March 2020: Annual Report 2019 Analyst Conference, Webcast

28 April 2020: Report on the 1st Quarter of 2020

14 May 2020: Annual General Meeting, Berlin

28 July 2020: Report on the 1st Six Months of 2020

30 October 2020: Report on the 3rd Quarter of 2020

16 - 18 November 2020: German Equity Forum, Frankfurt



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Contact

36

Karsten Pierschke Head of Investor Relations andCorporate Communications

Dircksenstrasse 42-44 10178 BerlinGermany

Phone: +49 30 2801-2727 Fax: +49 30 2801-1000

E-Mail: [email protected]

www.psi.de

intelligent green software · analyst conference annual report 2019 webcast, 24 march 2020...

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