At the end of 2023, Softing AG expects goodwill impairments of EUR 7.0 million to EUR 9.0 million at Group level in the Softing IT Networks and GlobalmatiX divisions.

The background to the impairment of these goodwill is the fact that these goodwill were created as "goodwill" at the time of the respective company acquisition on the basis of the expected income from the known or expected transactions at the time of the acquisition. It is not possible to reassign or offset against income from other types of business. Therefore, the impairment must be carried out even if the newly formed values exceed those of goodwill.

That is the situation in the present case in both cases.

At the time of Softing's takeover of Psiber Data GmbH, today's Softing IT Networks, the company had only one product of its own, with revenues mainly generated by trading business. Since the acquisition in 2014, IT Networks' business model has evolved from the original trading business to the more lucrative product business with its own products. The expected sales and earnings from the product business far exceed the results of the trading business at that time. Nevertheless, due to the almost complete discontinuation of the old trading business, a value adjustment is necessary.

The same applies to the impairment at GlobalmatiX AG. The sales approach and marketing strategy pursued at the time of the acquisition in 2018 have now changed significantly, as the original services with comparatively simple data such as GPS location and standard OBD data sets no longer offer sufficient returns today. The now established business with data for the detection and analysis of minor damage, the extraction of complex and manufacturer-specific data, transmission of data from modern tire pressure sensors, etc. forms the basis of GlobalmatiX's sales and earnings today. The plans continue to predict a significant improvement in sales and earnings as early as 2024. Nevertheless, the value adjustment must also be carried out here.

The correction of goodwill in both companies is therefore unique. Further risks arising from goodwill do not exist after this correction.

Dr. Wolfgang Trier, CEO of Softing AG: "Although both Softing IT Networks and GlobalmatiX are developing in line with the latest plans and are facing significant revenue and earnings growth in 2024, we have to make impairments on the goodwill originally formed due to the changes in the respective business models that have taken place in recent years. This step will not have any impact on our main performance indicators of Group operating EBIT (Group EBIT adjusted for capitalized development activities and their depreciation and amortization, as well as effects from the purchase price distribution), Group EBITDA and Group cash flow. Despite a rather subdued economic environment, we remain optimistic about the coming financial year."

About Softing AG
Softing is a globally active management holding company. The Softing companies produce and sell hardware and software in the Automotive Electronics, Industrial Automation and IT Networks business segments. In close customer relationships, technologically high-quality standard products as well as individual solutions are realized. Softing operates in growth markets with all three business segments.

Contact:
Dr. Wolfgang Trier
CEO