Press Releases

aap Implantate AG ("aap" or "Company") informs that as of October 31, 2024, conversion rights in the amount of 97.4% of the mandatory convertible bond issued in October 2023 were exercised in the context of elective conversions. This means that only 2.6% of the conversion rights have not yet been exercised, which corresponds to an amount of around EUR 69.5 thousand.

The exercise of these conversion rights will reduce the company's liabilities by EUR 2.63 million as well as the associated interest burden of 6% per annum for the remaining term until October 6, 2028. The equity ratio is rising accordingly.

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aap Implantate AG (ISIN DE0005066609) - General Standard/Regulated Market - All German Stock Exchanges –

About aap Implantate AG

 aap Implantate AG is a global medical technology company headquartered in Berlin, Germany. The company develops, manufactures and markets products for traumatology. In addition to the innovative anatomical plate system LOQTEQ®, the IP-protected portfolio includes a wide range of perforated screws. In addition, aap Implantate AG has an innovation pipeline with promising development projects, such as antibacterial silver coating technology and magnesium-based implants. These technologies address critical and not yet adequately solved problems in traumatology.  In Germany, aap Implantate AG sells its products directly to hospitals, purchasing groups and affiliated clinics, while on an international level, it primarily uses a broad network of distributors in around 25 countries. In the USA, the company is relying  on a hybrid sales strategy with its subsidiary aap Implants Inc. Sales are carried out both through distribution agents and within the framework of partnerships with global orthopaedic companies. The shares of aap Implantate AG are listed in the General Standard of the Frankfurt Stock Exchange (XETRA: AAQ.DE). For more information, please visit our website at www.aap.de.

There may be technical rounding differences in the figures presented in this press release, which do not affect the overall statement.

Forward-Looking Statements

This release may contain forward-looking statements based on the current expectations, assumptions and forecasts of the Management Board and information currently available to it. The forward-looking statements are not to be understood as guarantees of future developments and results referred to therein. Various known and unknown risks, uncertainties and other factors could cause the actual results, financial condition, development or performance of the Company to differ materially from the estimates given herein. These factors also include those  described by aap in published reports. Forward-looking statements therefore speak only as of the date on which they are made. We undertake no obligation to update the forward-looking statements made in this release or to conform them to future events or developments.

If you have any questions, please contact: aap Implantate AG; Rubino Di Girolamo; Chairman of the Board of Directors/CEO; Lorenzweg 5; 12099 Berlin

Phone: +49 (0)30 75019 – 141; Fax: +49 (0)30 75019 – 290; Email: r.digirolamo@aap.de

aap Implantate AG ("aap" or "Company") has reached another important milestone in the transition from MDD (Medical Device Directive 93/42/EEC) to MDR (Medical Device Regulation EU 2017/745). In the week from 9 September 2024 to 13 September 2024, the Notified Body mdc medical device certification GmbH audited aap's quality system according to MDR. The audit was successfully completed. With this important milestone and the first positively audited technical documentation for its Class IIa products in accordance with the MDR, the company is continuing to work with its notified body to ensure a smooth and rapid transition to MDR certification.

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aap Implantate AG (ISIN DE0005066609) - General Standard/Regulated Market - All German stock exchanges -

About aap Implantate AG

aap Implantate AG is a globally active medical technology company based in Berlin, Germany. The company develops, produces and markets products for traumatology. In addition to the innovative LOQTEQ® anatomical plate system, the IP-protected portfolio includes a wide range of cannulated screws. In addition, aap Implantate AG has an innovation pipeline with promising development projects such as antibacterial silver coating technology and magnesium-based implants. These technologies address critical problems in traumatology that have not yet been adequately solved. In Germany, aap Implantate AG sells its products directly to hospitals, purchasing groups and group clinics, while internationally it primarily utilises a broad network of distributors in around 25 countries. In the USA, the company utilises a hybrid sales strategy through its subsidiary aap Implants Inc. Sales are conducted both via distribution agents and through partnerships with global orthopaedic companies. The aap Implantate AG share is listed in the General Standard segment of the Frankfurt Stock Exchange (XETRA: AAQ.DE). For further information, please visit our website at www.aap.de.

The figures presented in this press release may be subject to technical rounding differences that do not affect the overall picture.

Forward-looking statements

This release may contain forward-looking statements that are based on the current expectations, assumptions and forecasts of the Executive Board and information currently available to it. The forward-looking statements are not to be understood as guarantees of the future developments and results mentioned therein. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual results, financial situation, development or performance of the company and the estimates given here. These factors include those that aap has described in published reports. Forward-looking statements therefore only apply on the date on which they are made. We assume no obligation to update the forward-looking statements made in this release or to adapt them to future events or developments.

• BfArM and lead ethics committee approve early end of recruitment
• Last patient included on 6 August 2024;
• A total of 202 patients were included in the study;
• Start of the MDR registration phase

aap Implantate AG ("aap" or "Company") informs that due to the ongoing good results the patient recruitment of the human clinical trial could be terminated early. After the incidence rate remained at a very low level and more than 200 patients were recruited for the study, an application to discontinue patient recruitment was submitted in July 2024. This application was approved by the Federal Office for Drugs and Medical Devices (BfArM) and the lead ethics committee. The study has a follow-up period of one year and will end in August 2025. aap would like to thank all participating clinics for their excellent performance in the context of patient recruitment and the very good cooperation to date. 

The decision represents a milestone for aap after the company has invested around EUR 15 million in development work and associated costs in the years since the start of the project. This makes aap the only company with a nearly completed human clinical study on an antibacterial trauma implant, which puts it in an excellent starting position in a market worth billions.

Rubino Di Girolamo (CEO) comments on this success: "We are very pleased about the approval granted by the BfArM and the leading ethics committee. This underlines a successful intermediate step, which was achieved after several obstacles through persistent adherence to the goal and brings aap's opportunity to make a significant contribution to the fight against antibiotic resistance closer."

In the next step, aap is preparing the MDR registration of the technology with the aim of authorising an initial product group in the 2026 - 2027 timeframe, depending on the regulatory requirements, and subsequently generating initial sales. The company anticipates that the funds required for product approval in the period 2025 - 2027 will amount to between EUR 1 million and EUR 2 million. With additional, manageable funds, aap can also initiate its own small series production, which will enable an adequate level of sales. Doctors and clinics that took part in the study have already signalled great interest in the product.  Depending on funding commitments or licence agreements with strategic market participants, the scope of product approvals and production capacities can be expanded considerably.

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aap Implantate AG (ISIN DE0005066609) - General Standard/Regulated Market - All German stock exchanges -

About aap Implantate AG

aap Implantate AG is a globally active medical technology company based in Berlin, Germany. The company develops, produces and markets products for traumatology. In addition to the innovative LOQTEQ® anatomical plate system, the IP-protected portfolio includes a wide range of cannulated screws. In addition, aap Implantate AG has an innovation pipeline with promising development projects such as antibacterial silver coating technology and magnesium-based implants. These technologies address critical problems in traumatology that have not yet been adequately solved. In Germany, aap Implantate AG sells its products directly to hospitals, purchasing groups and group clinics, while internationally it primarily utilises a broad network of distributors in around 25 countries. In the USA, the company utilises a hybrid sales strategy through its subsidiary aap Implants Inc. Sales are conducted both via distribution agents and through partnerships with global orthopaedic companies. The aap Implantate AG share is listed in the General Standard segment of the Frankfurt Stock Exchange (XETRA: AAQ.DE). For further information, please visit our website at www.aap.de.

The figures presented in this press release may be subject to technical rounding differences that do not affect the overall picture.

Forward-looking statements

This release may contain forward-looking statements that are based on the current expectations, assumptions and forecasts of the Executive Board and information currently available to it. The forward-looking statements are not to be understood as guarantees of the future developments and results mentioned therein. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual results, financial situation, development or performance of the company and the estimates given here. These factors include those that aap has described in published reports. Forward-looking statements therefore only apply on the date on which they are made. We assume no obligation to update the forward-looking statements made in this release or to adapt them to future events or developments.

aap Implantate AG; Rubino Di Girolamo; Chairman of the Management Board/ CEO; Lorenzweg 5; 12099 Berlin
Phone: +49 (0)30 75019 - 170; Fax: +49 (0)30 75019 - 290; Email: r.digirolamo@aap.de

Financial year 2023 got off to a promising start for aap Implantate AG ("aap" or "Company"). Sales increased in all regions and exceeded the previous year's figures. The initial upswing lost momentum and the outlook in aap's sales markets gradually deteriorated due to financial difficulties in the healthcare sector and uncertainties about further economic development in the various regions. Many distributors reduced their inventories in order to counteract the higher financing costs, extended payment cycles and uncertainties. The planned sales in new markets could not be realised due to delays in approvals caused by the establishment of new health authorities in the respective countries, the replacement of authorities due to accusations of corruption or new requirements. These circumstances led to overall disappointing annual sales at the previous year's level.

2023/2022 - Turnover

In contrast to the markets, a great deal of progress was made in the operational area. The optimisation projects continued in 2022 and 2023 resulted in full delivery capability and timely delivery to our customers. We were also able to reduce electricity consumption by 13% per unit produced by increasing efficiency. The MDD surveillance audit carried out at the end of 2023 together with ISO 13485 recertification was successfully completed. In view of the important transition from the current Medical Device Directive 93/42/EEC (MDD) to the Medical Device Regulation MDR (EU 2017/745), the company was able to drive the process forward with the newly appointed Notified Body for the MDR and is sticking to its plan to have completed the transition by the end of 2024.

Due to the repeated weak sales, aap had to implement a further restructuring programme. This is intended to ensure that the sustained lower level of sales in the operating business no longer results in losses and that the break-even point can be reached within two years in order to ensure the self-financing of the operating business.

For a detailed evaluation of the Management Agenda 2023, aap refers to the consolidated annual financial report 2023 published today.

Key financial figures

EBITDA 2023/2022

EBITDA deteriorated in the 2023 financial year; the originally expected target values for the 2023 financial year of between EUR -2.5 million and EUR -1.7 million could not be achieved.

Recruiting EBITDA 2023/2022

Based on the valuation calculations used to date, recurring EBITDA is within the guidance last communicated in December 2023.

The following developments were decisive for the change in EBITDA:

• Sales level realised below the company's original planning in 2023, mainly in the USA and due to massive delays in new registrations in new markets,
• Restructuring costs,
• High value adjustment of outstanding receivables,
• Negative change in inventories,
• Massive increase in acquisition and audit costs in other costs,
• Cost increase from conducting the human clinical trial for aap's innovative antibacterial silver implant technology by accelerating patient recruitment.

Cash flow

As a result of the developments already mentioned, aap's operating cash flow also deteriorated in the financial year 2023 compared to the previous year.

In the financial area, a number of revaluations and reclassifications had to be carried out as part of the work on the financial statements, which led to delays. Some of these measures resulted in high one-off corrections, some of which had a negative impact on EBITDA. This is reflected in the result of recurring EBITDA, which shows a slight improvement compared to the 2022 financial year.

The fact that the company was threatened with the payment of a six-figure penalty as a result of the delay in the preparation of the financial statements and that the main audit procedures had been completed led to the decision to terminate the audit, accepting a failure note due to an audit impediment. The Executive Board will work with all available resources to eliminate the audit impediment in order to remove it for the 2024 annual and consolidated financial statements.

The adopted annual financial statements and the approved consolidated financial statements including the summarized management report for the individual and consolidated financial statements as well as the report of the Supervisory Board and the explanatory report on the disclosures pursuant to Sections 289a and 315a HGB for the 2023 financial year will be presented respective proposed for resolution together with the resolutions on the discharge of the Executive Board and the Supervisory Board for the 2023 financial year on the agenda of the 2025 Annual General Meeting.

Outlook

aap aims to set positive trends in terms of sales and earnings in financial year 2024. The investments in sales initiated in previous years form the basis for the planned increase in sales in 2024.

The human clinical trial for the innovative antibacterial silver implant technology, which was continued in 2023 with the modified study protocol, was able to recruit more than one hundred patients by the end of 2023; as of today, there are already 203 patients. Under the leadership of the University Hospital Regensburg, Prof. Dr Alt, fifteen study centers were involved. The change in the study protocol achieved the desired effect of accelerating patient recruitment and generating the necessary data. An above-average success rate was achieved by the end of 2023, which should lead to a reduction in patient recruitment (a corresponding application has been submitted). This means that phase 2 of development could be completed in the course of 2024 and aap will be able to start phase 3 (approval). For this and for the industrialization of the technology, aap will have to raise the necessary funding. Financing can also be provided both through additional funding and through development partnerships with companies from application areas outside traumatology.

In addition, a key focus will be on the planned implementation of activities to achieve certification in accordance with the new EU Medical Device Regulation (MDR 2017/745/EU) within the transition period until 2024.

Not included in the following forecast statements:

• A significant tightening of sanctions against Russia or a modified interpretation of existing sanctions for other markets,
• An expansion of the conflict situation outside Ukraine,
• Financial risks due to recession-related measures in various markets and their impact on public finances in the healthcare sector.

Depending on the economic development of aap and the further macroeconomic development, the Management Board is evaluating various options for financing further activities.

The Executive Board is forecasting sales of between EUR 11.5 million and EUR 13.5 million for the 2024 financial year and is on track with the sales of EUR 6.4 million achieved in the first half of 2024. With regard to earnings, the Executive Board is sticking to the EBITDA of between EUR -2.5 million and EUR -1.4 million communicated for the 2024 financial year. Even though the EBITDA result was exceeded in the first half of 2024, the Management Board will initially monitor the further project costs for the implementation of the human clinical trial of its antibacterial implant technology and the associated further activities and re-evaluate the guidance at a later date.

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aap Implantate AG (ISIN DE0005066609) - General Standard/Regulated Market - All German stock exchanges -

About aap Implantate AG

aap Implantate AG is a globally active medical technology company based in Berlin, Germany. The company develops, produces and markets products for traumatology. In addition to the innovative LOQTEQ® anatomical plate system, the IP-protected portfolio includes a wide range of cannulated screws. In addition, aap Implantate AG has an innovation pipeline with promising development projects such as antibacterial silver coating technology and magnesium-based implants. These technologies address critical problems in traumatology that have not yet been adequately solved. In Germany, aap Implantate AG sells its products directly to hospitals, purchasing groups and group clinics, while internationally it primarily utilises a broad network of distributors in around 25 countries. In the USA, the company utilises a hybrid sales strategy through its subsidiary aap Implants Inc. Sales are conducted both via distribution agents and through partnerships with global orthopaedic companies. The aap Implantate AG share is listed in the General Standard segment of the Frankfurt Stock Exchange (XETRA: AAQ.DE). For further information, please visit our website at www.aap.de.

There may be technical rounding differences in the figures presented in this press release that do not affect the overall statement. All key financial figures with reference to the balance sheet date of 31 December 2023 in the published consolidated interim report as at 30 June 2024 are preliminary and unaudited. The business figures for 2023 will be confirmed at a later date with the publication of the 2023 annual financial statements.  

Forward-looking statements

This release may contain forward-looking statements that are based on the current expectations, assumptions and forecasts of the Executive Board and information currently available to it. The forward-looking statements are not to be understood as guarantees of the future developments and results mentioned therein. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual results, financial situation, development or performance of the company and the estimates given here. These factors include those that aap has described in published reports. Forward-looking statements therefore only apply on the date on which they are made. We assume no obligation to update the forward-looking statements made in this release or to adapt them to future events or developments.

If you have any queries, please contact: aap Implantate AG; Rubino Di Girolamo, Chairman of the Management Board/ CEO, Lorenzweg 5; 12099 Berlin

Phone: +49 (0)30 75019 - 170; Fax: +49 (0)30 75019 - 290; Email: r.digirolamo@aap.de

• Sales: H1/2024 increased by 10% to EUR 6.4 million compared to H1/2023; main growth driver EMEA region
• EBITDA: H1/2024 breaks even, Trauma achieves positive EBITDA

aap Implantate AG ("aap" or "Company") looks back on a pleasing first half-year. The Company was able to increase sales and EBITDA compared to the previous year and generate a positive EBITDA in the trauma business. The company's sales increased by 10% to EUR 6.4 million compared to the same period of the previous year (H1/2023: EUR 5.9 million). In terms of earnings, the company recorded an almost balanced EBITDA of EUR ‑0.0 million (H1/2023: EUR -1.0 million) in the first six months of 2024, which primarily reflects the growth in sales coupled with lower costs and effects from restructuring.

H1/2024 - Key financial figures*

EBITDA H1/2024

aap thus realized a significantly improved EBITDA of EUR ‑0.0 million in the first half of 2024 compared to the same period of the previous year (H1/2023: EUR ‑1.0 million). The following developments were decisive for the result:

• Strong sales growth (H1: +10 % compared to previous year),
• Stable high gross margin (> 87%),
• Decline in personnel costs (-12%) in the first six months compared to the same period of the previous year,
• Improvement in the margin and cost situation in the USA

Cash flow

aap's operating cash flow improved by 34% year-on-year in the first half of 2024 to EUR 1.0 million at‑ , mainly due to the improved operating result. Cash flow from investing activities showed an outflow of EUR 0.0 million in H1/2024, with investments in development projects accounting for EUR 22 thousand (H1/2023: EUR 59 thousand). In the area of financing activities, there was a cash inflow totaling EUR 0.5 million in the first half of 2024 (H1/2023: cash inflow of EUR 2.8 million), which was primarily due to the cash inflow from the capital increase in the net amount of EUR 1.0 million, taking out a shareholder loan of EUR 0.3 million, the repayment of financial liabilities and shareholder loans in the amount of EUR 0.6 million (H1/2023: EUR 0.5 million) and the payment of interest in the amount of EUR 133 thousand (H1/2023: EUR 80 thousand). As a result, cash and cash equivalents decreased to EUR 0.8 million at the end of the second quarter. Net debt (total cash and cash equivalents less all interest-bearing liabilities) amounted to EUR 1.2 million as at June 30, 2024 (December 31, 2023: EUR 1.8 million).

Outlook

Not included in the following forecast statements:

• A significant tightening of sanctions against Russia or a modified interpretation of existing sanctions for other markets,
• An expansion of the conflict situation outside Ukraine,
• Further significant additional increases in energy and commodity prices above the currently foreseeable level or restrictions on the company's ability to operate due to partial or complete cessation of gas and/or energy supplies as a result of the war in Ukraine, among other things,
• Financial risks due to recession-related measures in various markets and their impact on state finances in the healthcare sector.

In the second half of 2024, the focus will be on stabilizing aap's financial situation in order to finance the next stage of its activities in antibacterial implant technology, completing patient recruitment for the human clinical trial for the innovative antibacterial implant technology, starting the approval documentation and submitting applications to the EIC program and the upcoming MDR audit.

In terms of revenue, the Management Board expects revenue for the second half of 2024 to remain the same as in the first six months and expects to achieve the planned revenue level of between EUR 11.5 million and EUR 13.5 million for the 2024 financial year. Taking into account the full project costs for the further implementation of the human clinical trial for the antibacterial implant technology, the Management Board expects EBITDA for the 2024 financial year to be between EUR -2.5 million and EUR -1.4 million.

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aap Implantate AG (ISIN DE0005066609) - General Standard/Regulated Market - All German stock exchanges -

About aap Implantate AG

aap Implantate AG is a globally active medical technology company based in Berlin, Germany. The company develops, produces and markets products for traumatology. The IP-protected portfolio includes the innovative anatomical plate system LOQTEQ® and a wide range of cannulated screws. In addition, aap Implantate AG has an innovation pipeline with promising development projects such as antibacterial silver coating technology and magnesium-based implants. These technologies address critical problems in traumatology that have not yet been adequately solved. In Germany, aap Implantate AG sells its products directly to hospitals, purchasing groups and group clinics, while internationally it primarily uses a broad network of distributors in around 25 countries. In the USA, the company relies on a hybrid sales strategy through its subsidiary aap Implants Inc. Sales are conducted both through distribution agents and through partnerships with global orthopedic companies. The aap Implantate AG share is listed in the General Standard of the Frankfurt Stock Exchange (XETRA: AAQ.DE). For further information, please visit our website at www.aap.de.

There may be technical rounding differences in the figures presented in this press release that do not affect the overall statement. All key financial figures with reference to the balance sheet date of December 31, 2023 in the published consolidated interim report as at June 30, 2024 are preliminary and unaudited. The business figures for 2023 will be confirmed at a later date with the publication of the 2023 annual financial statements.  

Forward-looking statements

This release may contain forward-looking statements that are based on the current expectations, assumptions and forecasts of the Executive Board and information currently available to it. The forward-looking statements are not to be understood as guarantees of the future developments and results mentioned therein. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual results, financial situation, development or performance of the company and the estimates given here. These factors include those that aap has described in published reports. Forward-looking statements therefore speak only as of the date on which they are made. We assume no obligation to update the forward-looking statements made in this release or to adapt them to future events or developments.

If you have any questions, please contact: aap Implantate AG; Rubino Di Girolamo, Chairman of the Management Board/ CEO, Lorenzweg 5; 12099 Berlin

Phone: +49 (0)30 75019 - 170; Fax: +49 (0)30 75019 - 290; Email: r.digirolamo@aap.de

• Sales: Q2 at EUR 3.3 million (+14% yoy), main growth driver EMEA (Q2: +44%);
• Sales: H1/2024 increased by 10% to EUR 6.4 million compared to H1/2023;
• The human clinical trial of the innovative antibacterial implant technology has so far recruited 200 patients, and aap has applied to complete patient recruitment;

aap Implantate AG ("aap" or "Company") continued its growth in the second quarter. In the EMEA region, aap was able to significantly increase the overall result for the first half of the year, mainly due to an order from an aid organization in the second quarter. At the same time, existing markets such as Spain/Portugal (+41% yoy), South Africa (+9% yoy) and smaller countries in the Middle East achieved up to double-digit growth rates.

The effects of the reorganization in the USA, which were highlighted in the first quarter, could not be offset in the second quarter, meaning that sales were down 22% on the previous year in the first half of the year. Positive developments in customer acquisition as well as a well-filled project pipeline make the Management Board confident that this decline can be made up for over the course of the year through the continued focused work of the reorganized and growing team.

In Latin America, after a strong first quarter, which was primarily characterized by investments in aap systems to equip new customers, growth continued in the second quarter. In addition to Brazil (+67% yoy) and Mexico (+23% yoy), aap's largest sales markets, other markets such as Colombia (+39% yoy) also grew in terms of sales. In the APAC region, the customer base was expanded to include new customers, meaning that further future growth is expected in the region.

Q2/2024 - Turnover

Half-year 2024 - Turnover

The company is making great progress in the ongoing human clinical trial with the antibacterial implant technology and has recruited 200 patients to date. Due to the continued very positive progress of the study, aap applied to the approving body to be able to complete patient recruitment in mid-2024. If approved, the 12-month follow-up phase with the last patient included could be completed earlier than originally planned.

At the beginning of July, aap received the positive news that the first hurdle in the application for funding and investment under the European Horizon program (EIC Accelerator) had been successfully overcome and that the company could submit a full application for its antibacterial implant technology in a further step. A positive assessment of the full application would open the possibility that the European Investment Bank could invest in aap in 2025 and provide significant support for the investments required for the transformation.

The German Federal Ministry of Education and Research ("BMBF") is funding the clinical study. The grant awarded to the company (funding codes 13GW0313A+B, 13GW0449A+B) is part of the BMBF's "Healthcare industry in the healthcare research framework program" (= funding body). According to the BMBF, funding is provided for projects on the topic of "Transferring medical technology solutions to patient care - proving clinical evidence without delay". For further information, please refer to the relevant guidelines on the BMBF website: https://www.bmbf.de/foerderungen/bekanntmachung-1376.html.

The company also made significant progress towards MDR approval. In the first few months, all main product files required for the MDR were submitted to the notified body. A first main product file was positively reviewed by the notified body in accordance with the MDR at the end of June. The company remains committed to its plan to complete MDR approval by the end of 2024 and thus launch new products on the CE market in 2025.

As part of aap's further product development activities, the company also received US FDA approval for its double-threaded compression screws in the first half of the year and can begin preparations for market launch activities in the United States and other markets that accept FDA approval for 2025 in the second half of the year.

The detailed half-year report will be published on August 14, 2024.




 

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aap Implantate AG (ISIN DE0005066609) - General Standard/Regulated Market - All German stock exchanges -

About aap Implantate AG

aap Implantate AG is a globally active medical technology company based in Berlin, Germany. The company develops, produces and markets products for traumatology. The IP-protected portfolio includes the innovative anatomical plate system LOQTEQ® and a wide range of cannulated screws. In addition, aap Implantate AG has an innovation pipeline with promising development projects such as antibacterial silver coating technology and magnesium-based implants. These technologies address critical problems in traumatology that have not yet been adequately solved. In Germany, aap Implantate AG sells its products directly to hospitals, purchasing groups and group clinics, while internationally it primarily uses a broad network of distributors in around 25 countries. In the United States, the company relies on a sales strategy via distribution agents through its subsidiary aap Implants Inc. The aap Implantate AG share is listed in the General Standard of the Frankfurt Stock Exchange (XETRA: AAQ.DE). For further information, please visit our website at www.aap.de.

The figures presented in this press release may be subject to technical rounding differences that do not affect the overall picture.

Forward-looking statements

This release may contain forward-looking statements that are based on the current expectations, assumptions and forecasts of the Executive Board and information currently available to it. The forward-looking statements are not to be understood as guarantees of the future developments and results mentioned therein. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual results, financial situation, development or performance of the company and the estimates given here. These factors include those that aap has described in published reports. Forward-looking statements therefore speak only as of the date on which they are made. We assume no obligation to update the forward-looking statements made in this release or to conform them to future events or developments.

If you have any questions, please contact: aap Implantate AG; Rubino Di Girolamo, Chairman of the Management Board/ CEO, Lorenzweg 5; 12099 Berlin

Phone: +49 (0)30 75019 - 170; Fax: +49 (0)30 75019 - 290; Email: r.digirolamo@aap.de

Notice to the Holders of the Mandatory Convertible Bond 2023/2028

(ISIN: DE000A351ZH9 / WKN: A351ZH)

aap Implantate AG announces today that the resolution adopted in the vote held without a meeting from March 26, 2024, to March 28, 2024, to cancel the vesting period regarding the conversion of the bonds and to allow a first-time conversion right in the period of 14 days before May 31, 2024, has become effective. After the expiry of the statutory challenge period, the resolution on the amendment of the terms and conditions of the Bonds ("Bond Terms") was deposited with the depositary Clearstream Banking Frankfurt and attached to the global certificate. The announcement of the completion of the terms and conditions of the bond is also expected to be published in the Federal Gazette on 24 May 2024.

As a result of the change in the terms and conditions of the bonds, the bondholders are now entitled to convert their bonds into shares of aap Implantate AG during the exercise period in accordance with the terms and conditions of the bond. The last exercise day of the actual exercise period is Wednesday, May 29, 2024.

In order to exercise the conversion right, the bondholder must submit a duly completed and signed declaration to the conversion agent or its custodian bank during normal business hours on a business day using a form available on the website of aap Implantate AG under https://www.aap.de/investoren/wandelschuldverschreibung . Declarations of exercise are irrevocable.

The exercise of the conversion right is subject to the delivery of the bonds for which the conversion right is to be exercised to the conversion agent no later than 29 May 2024, namely by delivery (transfer) of the bonds to the account of the conversion agent at Clearstream Frankfurt.

IMPORTANT INFORMATION

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE AN OFFER OR SOLICITATION OF AN OFFER TO BUY OR SUBSCRIBE FOR ANY SECURITIES. THE DISTRIBUTION OF THIS ANNOUNCEMENT MAY BE SUBJECT TO LEGAL RESTRICTIONS IN CERTAIN JURISDICTIONS. PERSONS READING THIS NOTICE MUST INFORM THEMSELVES ABOUT THESE RESTRICTIONS AND COMPLY WITH THESE RESTRICTIONS

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aap Implantate AG (ISIN DE0005066609) - General Standard/Regulated Market - All German Stock Exchanges –

About aap Implantate AG

aap Implantate AG is a global medical technology company headquartered in Berlin, Germany. The company develops, manufactures, and markets products for traumatology. In addition to the innovative anatomical plate system LOQTEQ®, the IP-protected portfolio includes a wide range of perforated screws. In addition, aap Implantate AG has an innovation pipeline with promising development projects, such as antibacterial silver coating technology and magnesium-based implants. These technologies address critical and not yet adequately solved problems in traumatology.  In Germany, aap Implantate AG sells its products directly to hospitals, purchasing groups and affiliated clinics, while on an international level, it primarily uses a broad network of distributors in around 25 countries. In the USA, the company and its subsidiary aap Implants Inc. are focusing on a sales strategy via distribution agents. The shares of aap Implantate AG are listed in the General Standard of the Frankfurt Stock Exchange (XETRA: AAQ.DE). For more information, please visit our website at www.aap.de.

There may be technical rounding differences in the figures presented in this press release, which do not affect the overall statement.

Forward-Looking Statements

This release may contain forward-looking statements based on the current expectations, assumptions and forecasts of the Management Board and information currently available to it. The forward-looking statements are not to be understood as guarantees of future developments and results referred to therein. Various known and unknown risks, uncertainties and other factors could cause the actual results, financial condition, development, or performance of the Company to differ materially from the estimates given herein. These factors also include those described by aap in published reports. Forward-looking statements therefore speak only as of the date on which they are made. We undertake no obligation to update the forward-looking statements made in this release or to conform them to future events or developments.

Contact:

If you have any questions, please contact: aap Implantate AG; Rubino Di Girolamo, Chairman/ CEO, Lorenzweg 5; 12099 Berlin.

Tel.: +49 (0)30 75019 – 170; Fax: +49 (0)30 75019 – 290; Email: r.digirolamo@aap.de

• Sales increase by 5.6% compared to the same quarter of the previous year
• Major order and parts of Q1 sales form strong basis for growth in Q2
• Human clinical trial of the innovative antibacterial implant technology is progressing positively and opens up the possibility of an earlier conclusion

aap Implantate AG ("aap" or "Company") continued its good start into the new year. The regions LATAM and APAC contributed significantly to growth.

Q1/2024 – Sales

In the EMEA region, aap achieved double-digit growth, particularly in South Africa (+21% year-on-year), Spain/Portugal (+11% year-on-year) and Germany (+11% year-on-year). An order placed from the Middle East had to be postponed to Q2 2024 at the customer's request, meaning that the EMEA region cannot report any growth. As a result of the reorganization in North America, unprofitable sales were eliminated, resulting in a decline of ~18% compared to the previous year for the first quarter. The Management Board is confident that this decline will be made up for over the course of the year through the continued focused work of the newly established team and new customers.

In Latin America, investments in aap systems to equip new customers led to a larger order volume compared with the same quarter of the previous year, particularly in Brazil and Mexico. These investment orders contributed significantly to the strong growth in the region. aap is confident that the investments in aap systems made in Q1 2024 will sustainably strengthen the business in the region. In the APAC region, existing and new customers also invested in further aap systems.

The Company is making great progress in the ongoing human clinical trial with the antibacterial implant technology and has recruited almost 160 patients to date. Due to the continued very positive progress of the study, there is currently the possibility of significantly reducing the number of patients to be recruited and completing the recruitment phase as early as the middle of this year. This would enable an earlier completion of the follow-up phase and an earlier start to the approval and industrialization phase. This step will again require substantial funds, which the Company will raise together with renowned industry partners and private investors.

The German Federal Ministry of Education and Research ("BMBF") is funding the clinical trial. The grant awarded to the company (funding codes 13GW0313A+B, 13GW0449A+B) is part of the BMBF's "Healthcare industry in the healthcare research framework program" field of action (= funding body). According to the BMBF, projects on the topic of "Transferring medical technology solutions to patient care - proving clinical evidence without delay" are being funded. For further information, please refer to the relevant guideline on the BMBF website: https://www.bmbf.de/foerderungen/bekanntmachung-1376.html.

The Company also made significant progress towards MDR authorization. Several main product files were submitted to the notified body in the first few months. aap remains committed to its plan to finalize MDR approval by the end of 2024. In the financial/legal area, a partial authorization of shares was completed, a vote without a meeting to lift the lock-up period for investors was carried out with 100% success and a 10% capital increase excluding subscription rights was placed at a premium of 37.5%. Due to personnel bottlenecks in the finance department combined with a new auditing company, the annual financial statements could not be finalized as planned and publication had to be postponed.

The second quarter started with a good order basis due to a major order from an international organization and the postponement of orders placed in Q1 2024. The Management Board therefore remains confident about the Company's positive development in 2024.




 

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aap Implantate AG (ISIN DE0005066609) - General Standard/Regulated Market - All German stock exchanges -

About aap Implantate AG

aap Implantate AG is a globally active medical technology company based in Berlin, Germany. The company develops, produces and markets products for traumatology. In addition to the innovative LOQTEQ® anatomical plate system, the IP-protected portfolio includes a wide range of cannulated screws. In addition, aap Implantate AG has an innovation pipeline with promising development projects such as antibacterial silver coating technology and magnesium-based implants. These technologies address critical problems in traumatology that have not yet been adequately solved. In Germany, aap Implantate AG sells its products directly to hospitals, purchasing groups and group clinics, while internationally it primarily uses a broad network of distributors in around 25 countries. In the United States, the company relies on a sales strategy via distribution agents through its subsidiary aap Implants Inc. The aap Implantate AG share is listed in the General Standard of the Frankfurt Stock Exchange (XETRA: AAQ.DE). For further information, please visit our website at www.aap.de.

The figures presented in this press release may be subject to technical rounding differences that do not affect the overall picture.

Forward-looking statements

This release may contain forward-looking statements that are based on the current expectations, assumptions and forecasts of the Executive Board and information currently available to it. The forward-looking statements are not to be understood as guarantees of the future developments and results mentioned therein. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual results, financial situation, development or performance of the company and the estimates given here. These factors include those that aap has described in published reports. Forward-looking statements therefore speak only as of the date on which they are made. We assume no obligation to update the forward-looking statements made in this release or to conform them to future events or developments.


 

If you have any questions, please contact: aap Implantate AG; Rubino Di Girolamo, Chairman of the Management Board/ CEO, Lorenzweg 5; 12099 Berlin

Phone: +49 (0)30 75019 - 170; Fax: +49 (0)30 75019 - 290; Email: r.digirolamo@aap.de

• The premium to the current share price of EUR 0.8 amounted to 37.5%
• The cash inflow will strengthen the company's own resources for the ongoing human clinical trial of the innovative antibacterial implant technology

aap Implantate AG ("aap" or "Company") successfully completed the 10% capital increase announced on March 18, 2024 with exclusion of subscription rights at a placement price of EUR 1.10, which corresponds to a premium of 37.5%. The company will thus receive liquid funds of EUR 986,311.70. This cash inflow will strengthen the company's own resources for the ongoing human clinical trial of the innovative antibacterial implant technology. The investors have also already signaled that they will provide further funds if business develops positively.




 

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aap Implantate AG (ISIN DE0005066609) - General Standard/Regulated Market - All German stock exchanges -

About aap Implantate AG

aap Implantate AG is a globally active medical technology company based in Berlin, Germany. The company develops, produces and markets products for traumatology. In addition to the innovative LOQTEQ® anatomical plate system, the IP-protected portfolio includes a wide range of cannulated screws. In addition, aap Implantate AG has an innovation pipeline with promising development projects such as antibacterial silver coating technology and magnesium-based implants. These technologies address critical problems in traumatology that have not yet been adequately solved. In Germany, aap Implantate AG sells its products directly to hospitals, purchasing groups and group clinics, while internationally it primarily uses a broad network of distributors in around 25 countries. In the United States, the company relies on a sales strategy via distribution agents through its subsidiary aap Implants Inc. The aap Implantate AG share is listed in the General Standard of the Frankfurt Stock Exchange (XETRA: AAQ.DE). For further information, please visit our website at www.aap.de.

The figures presented in this press release may be subject to technical rounding differences that do not affect the overall picture.

Forward-looking statements

This release may contain forward-looking statements that are based on the current expectations, assumptions and forecasts of the Executive Board and information currently available to it. The forward-looking statements are not to be understood as guarantees of the future developments and results mentioned therein. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual results, financial situation, development or performance of the company and the estimates given here. These factors include those that aap has described in published reports. Forward-looking statements therefore speak only as of the date on which they are made. We assume no obligation to update the forward-looking statements made in this release or to conform them to future events or developments.

If you have any questions, please contact:

aap Implantate AG; Rubino Di Girolamo, Chairman of the Management Board/ CEO, Lorenzweg 5; 12099 Berlin

Phone: +49 (0)30 75019 - 170; Fax: +49 (0)30 75019 - 290; Email: r.digirolamo@aap.de
 

• 86.03% of the nominal amount and the votes of all outstanding bonds participated in the vote
• Approval by 100% of the votes cast

aap Implantate AG ("aap" or "Company") successfully completed the vote without a meeting of bondholders on an amendment to the terms and conditions of the Bonds with an approval of 100% of the votes cast and the nominal value of the Bonds. 86.03% of the nominal amount and the votes of all outstanding bonds participated in the vote. The company thanks the creditors for this strong result and their support of the company.

The main amendment to the terms and conditions of the bond relates to the option of granting bondholders the right to elect conversion without observing a lock-up period and also to grant them the right to exercise their conversion right for the first time as early as May 2024.

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aap Implantate AG (ISIN DE0005066609) - General Standard/Regulated Market - All German stock exchanges -

About aap Implantate AG

aap Implantate AG is a globally active medical technology company based in Berlin, Germany. The company develops, produces and markets products for traumatology. In addition to the innovative LOQTEQ® anatomical plate system, the IP-protected portfolio includes a wide range of cannulated screws. In addition, aap Implantate AG has an innovation pipeline with promising development projects such as antibacterial silver coating technology and magnesium-based implants. These technologies address critical problems in traumatology that have not yet been adequately solved. In Germany, aap Implantate AG sells its products directly to hospitals, purchasing groups and group clinics, while internationally it primarily utilises a broad network of distributors in around 25 countries. In the USA, the company relies on a sales strategy with its subsidiary aap Implants Inc. via distribution agents. The aap Implantate AG share is listed in the General Standard segment of the Frankfurt Stock Exchange (XETRA: AAQ.DE). For further information, please visit our website at www.aap.de.

The figures presented in this press release may be subject to technical rounding differences that do not affect the overall picture.

Forward-looking statements

This release may contain forward-looking statements that are based on the current expectations, assumptions and forecasts of the Executive Board and information currently available to it. The forward-looking statements are not to be understood as guarantees of the future developments and results mentioned therein. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual results, financial situation, development or performance of the company and the estimates given here. These factors include those that aap has described in published reports. Forward-looking statements therefore only apply on the date on which they are made. We assume no obligation to update the forward-looking statements made in this release or to adapt them to future events or developments.

• Silver: significant acceleration in patient recruitment with over 130 patients
  as of the end of January 2024.
• Sales: very good start to the 2024 financial year
• Start of MDR certification

In the past financial year, aap Implantate AG ("aap" or "Company") was able to significantly accelerate patient recruitment with the realignment of the world's first clinical human study for its innovative antibacterial implant technology. At the same time, the number of predefined, product-related incidents has so far been significantly lower than assumed values, which, if the results remain the same, would enable early completion of patient recruitment in mid-2024 and thus the completion of the study after the end of the follow-up period in mid-2025. Building on these promising developments, aap will continue its efforts to attract significant third-party funding for the industrial expansion of the technology in the 2024 financial year.

After a mixed 2023 financial year in the LOQTEQ® trauma division, aap was able to make a positive start to the new 2024 financial year. In January, sales in Germany increased significantly by 30% compared to sales in January 2023. International business was up 10% year-on-year and the U.S. stayed within budget for Q1 with the aim of increasing profitability and consolidating sales. With the conclusion of a distribution agreement with a leading global medical technology company and supplier of products in the field of spine treatment and orthopedics for the French market with the highest-selling system LOQTEQ® VA-Radius system, a further step in the sustainable sales development could be made. Due to the difficult forecast for annual sales, aap is cautiously optimistic about sales in 2024 of between EUR 11.5 million and EUR 13.0 million.

In the operational area, the looming delay in MDR certification could be used for a successful re-certification according to ISO 13485 and monitoring under MDD. The process with the Notified Body for MDR certification has been started and is expected to be completed in 2024 according to the timetable agreed with the Notified Body.

To strengthen the liquidity base, aap evaluates the timely implementation of an initial capital measure. These and other measures are primarily necessary to finance the ongoing activities for aap's antibacterial implant technology, which is causing increased costs due to the acceleration, and secondarily to manage the additional burdens in the trauma business due to the MDR changeover.

The clinical trial is funded by the German Federal Ministry of Education and Research ("BMBF"). The grant granted to the company (funding code 13GW0313A+B, 13GW0449A+B) is part of the BMBF's field of action "Healthcare Economy in the Health Research Framework Program" (= funding body). According to the BMBF, projects on the topic of "Transferring medical technology solutions into patient care - proving clinical evidence without delay" will be funded. For further information, please refer to the corresponding guideline on the BMBF website: https://www.bmbf.de/foerderungen/bekanntmachung-1376.html.

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aap Implantate AG (ISIN DE0005066609)  - General Standard/Regulated Market - All German Stock Exchanges –

About aap Implantate AG

aap Implantate AG is a global medical technology company headquartered in Berlin, Germany. The company develops, manufactures and markets products for traumatology. In addition to the innovative anatomical plate system LOQTEQ®, the IP-protected portfolio includes a wide range of perforated screws. In addition, aap Implantate AG has an innovation pipeline with promising development projects, such as antibacterial silver coating technology and magnesium-based implants. These technologies address critical problems in traumatology that have not yet been adequately solved.  In Germany, aap Implantate AG sells its products directly to hospitals, purchasing groups and affiliated clinics, while on an international level it primarily uses a broad network of distributors in around 25 countries. In the U.S., the company and its subsidiary aap Implants Inc. are pursuing a hybrid sales strategy. Distribution is carried out both through distribution agents and through partnerships with global orthopaedic companies. The shares  of aap Implantate AG are listed in the General Standard of the Frankfurt Stock Exchange (XETRA: AAQ.DE). For more information, please visit our website at www.aap.de.

The figures presented in this press release may be subject to technical rounding differences that do not affect the overall statement.

Forward-Looking Statements

This release may contain forward-looking statements that are based on the current expectations, assumptions and forecasts of the Management Board and information currently available to it. The forward-looking statements are not guarantees of future developments and results. Various known and unknown risks, uncertainties and other factors may cause the actual results, financial position, development or performance of the Company to differ materially from the estimates given herein. These factors also include those  described by aap in published reports. Forward-looking statements speak only as of the date on which they are made. We undertake no obligation to update the forward-looking statements contained in this release or to conform them to future events or developments.

If you have any questions, please contact: aap Implantate AG; Rubino Di Girolamo, CEO, Lorenzweg 5; 12099 Berlin

Tel.: +49 (0)30 75019 – 170; Fax: +49 (0)30 75019 – 290; Email : r.digirolamo@aap.de
 

aap Implantate AG (“aap”) announces the conclusion of a distribution agreement for its LOQTEQ® VA Radius System with a leading global spine and orthopedics company.

The distribution agreement for the LOQTEQ® VA Radius System, the top selling product of aap`s anatomical plates and screws portfolio, is exclusively distributed in the entire territory of France and has a five-year term with a renewal option and an expected business volume of around EUR 2.0 – 2.5 million for the initial term with potential upsides.

The conclusion of the agreement represents further important progress in the aimed distribution focus in established markets and will sustainably strengthen the planned sales growth.

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aap Implantate AG (ISIN DE0005066609) - General Standard/Regulated Market - All German Stock Exchanges -

About aap Implantate AG

aap Implantate AG is a globally active medical technology company headquartered in Berlin, Germany. The company develops, manufactures and markets products for traumatology. In addition to the innovative anatomical plate system LOQTEQ®, the IP-protected portfolio includes a wide range of cannulated screws. In addition, aap Implantate AG has an innovation pipeline with promising development projects such as antibacterial silver coating technology and magnesium-based implants. These technologies address critical problems in traumatology that have not yet been adequately solved. In Germany, aap Implantate AG sells its products directly to hospitals, purchasing groups and group clinics, while at international level it primarily uses a broad network of distributors in around 25 countries. In the USA, the company relies on a hybrid sales strategy through its subsidiary aap Implants Inc. This involves sales both via distribution agents and as part of partnerships with global orthopedic companies. The aap Implantate AG share is listed in the General Standard of the Frankfurt Stock Exchange (XETRA: AAQ.DE). For further information, please visit our website at www.aap.de.

The figures presented in this press release may be subject to technical rounding differences which do not affect the overall presentation.

Forward-looking statements

This release may contain forward-looking statements based on current expectations, beliefs and projections of the Management Board and currently available information. The forward-looking statements are not guarantees of future performance or results. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in aap's public reports. Forward-looking statements therefore speak only as of the date they are made. We assume no obligation to update the forward-looking statements made in this release or to conform them to future events or developments.

Contact:

If you have any questions, please contact: aap Implantate AG; Rubino Di Girolamo, Chairman of the Management Board, CEO; Lorenzweg 5; 12099 Berlin

Phone: +49 (0)30 75019 - 294; Fax: +49 (0)30 75019 - 290; E-Mail: r.digirolamo@aap.de

• Clinical trial: Visible acceleration with already more than 60 patients recruited since clinical trial resumption in April; completion of patient recruitment planned in 2024
• BMBF funding: increase in total funding by around EUR 0.4 million to up to EUR 3.1 million underscores the strategic innovative character of aap's antibacterial silver coating technology

aap Implantate AG ("aap" or the "Company") announces that, at aap's request, the German Federal Ministry of Education and Research (BMBF) has increased the overall funding framework for the conduct of the human clinical trial for the intended market approval of its silver coating technology by approximately EUR 0.4 million. In addition to the funding of up to EUR 2.7 million already committed by the BMBF in 2019, this now results in a funding framework of up to EUR 3.1 million over the entire duration of the study. The BMBF funding underscores the innovative and strategic nature of aap's silver coating technology and its potential to significantly relieve healthcare systems at the cost level.

In the human clinical trial, which was able to enroll the first patient according to the adapted study protocol in May, a visible acceleration in patient recruitment was achieved. By mid-October, more than 60 patients were enrolled in the study as planned. Overall, the study has been very successful to date. This is reflected, among other things, in the significantly lower number of incidents of predefined, product-dependent adverse events than originally assumed in the study planning. If this trend continues, the necessary number of patients to be included would be reduced in order to make the statistical statements. Depending on patient volume and possible events as mentioned above, aap expects to complete patient recruitment in the course of 2024.

With its groundbreaking surface modification technology, in which elemental silver is incorporated into the titanium surface in an extremely low but highly effective concentration, aap is aiming for a unique selling proposition that effectively counters increasing antibiotic resistance in medicine and has the potential to become the gold standard in traumatology. Depending on the human clinical trial and the regulatory authorities, aap expects the first market launch of the new technology in 3 years.

The execution of the clinical study is funded by the German Federal Ministry of Education and Research ("BMBF"). The grant awarded to the company (grant numbers 13GW0313A+B, 13GW0449A+B) is part of the BMBF's (= grantor) field of action "Healthcare Industry in the Health Research Framework Program". According to the BMBF, projects on the topic of "Transferring medical technology solutions into patient care - proving clinical evidence without delay" are being funded. For further information, please refer to the corresponding guideline on the BMBF website: https://www.bmbf.de/foerderungen/bekanntmachung-1376.html.





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aap Implantate AG (ISIN DE0005066609) - General Standard/Regulated Market - All German Stock Exchanges -

About aap Implantate AG
aap Implantate AG is a globally active medical technology company headquartered in Berlin, Germany. The company develops, manufactures and markets products for traumatology. In addition to the innovative anatomical plate system LOQTEQ®, the IP-protected portfolio includes a wide range of cannulated screws. In addition, aap Implantate AG has an innovation pipeline with promising development projects such as antibacterial silver coating technology and magnesium-based implants. These technologies address critical problems in traumatology that have not yet been adequately solved. In Germany, aap Implantate AG sells its products directly to hospitals, purchasing groups and group clinics, while at international level it primarily uses a broad network of distributors in around 25 countries. In the USA, the company relies on a hybrid sales strategy through its subsidiary aap Implants Inc. This involves sales both via distribution agents and as part of partnerships with global orthopedic companies. The aap Implantate AG share is listed in the General Standard of the Frankfurt Stock Exchange (XETRA: AAQ.DE). For further information, please visit our website at www.aap.de.

The figures presented in this press release may be subject to technical rounding differences which do not affect the overall presentation.

Forward-looking statements
This release may contain forward-looking statements based on current expectations, beliefs and projections of the Management Board and currently available information. The forward-looking statements are not guarantees of future performance or results. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in aap's public reports. Forward-looking statements therefore speak only as of the date they are made. We assume no obligation to update the forward-looking statements made in this release or to conform them to future events or developments.



Contact:
Marek Hahn; Member of the Management Board/ CFO; Lorenzweg 5; 12099 Berlin
Phone: +49 (0)30 75019 - 134; Fax: +49 (0)30 75019 - 290; Email: m.hahn@aap.de

About aap Implantate AG
aap Implantate AG is a globally active medical technology company headquartered in Berlin, Germany. The company develops, manufactures and markets products for traumatology. In addition to the innovative anatomical plate system LOQTEQ®, the IP-protected portfolio includes a wide range of cannulated screws. In addition, aap Implantate AG has an innovation pipeline with promising development projects such as antibacterial silver coating technology and magnesium-based implants. These technologies address critical problems in traumatology that have not yet been adequately solved. In Germany, aap Implantate AG sells its products directly to hospitals, purchasing groups and group clinics, while at international level it primarily uses a broad network of distributors in around 25 countries. In the USA, the company relies on a hybrid sales strategy through its subsidiary aap Implants Inc. This involves sales both via distribution agents and as part of partnerships with global orthopedic companies. The aap Implantate AG share is listed in the General Standard of the Frankfurt Stock Exchange (XETRA: AAQ.DE). For further information, please visit our website at www.aap.de.

The figures presented in this press release may be subject to technical rounding differences which do not affect the overall presentation.

Forward-looking statements
This release may contain forward-looking statements based on current expectations, beliefs and projections of the Management Board and currently available information. The forward-looking statements are not guarantees of future performance or results. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in aap's public reports. Forward-looking statements therefore speak only as of the date they are made. We assume no obligation to update the forward-looking statements made in this release or to conform them to future events or developments.



Contact:
aap Implantate AG; Marek Hahn; Member of the Management Board, CFO; Lorenzweg 5; 12099 Berlin
Phone: +49 (0)30 75019 - 134; Fax: +49 (0)30 75019 - 290; E-Mail: m.hahn@aap.de

• Sales: Q2 at EUR 2.9 million (+8 % yoy) and H1 at EUR 5.9 million (+6 % yoy); all regions in Q2 above previous year with LATAM (Q2: +13 %; H1: +29 % yoy) and North America (Q2: +7 %; H1: +11 % yoy) as main growth drivers
• EBITDA: improvement in Q2 (+21 %) with EUR ‑0.6 million (Q2/2022 corr.: EUR ‑0.7 million) and H1 (+13 %) with EUR ‑1.0 million (H1/2022.corr.: EUR -1.2 million) as a result of sales growth and cost savings
• Silver: Clinical trial resumed with revised study protocol in April; acceleration in patient recruitment visible.
• Outlook H2/2023: Sales expected to increase compared to H1/2023 with sales/EBITDA targets within previously communicated guidance range

aap Implantate AG ("aap" or the "Company") can look back on a good second quarter. The Company was able to increase sales and EBITDA compared to the previous year both in the second quarter and in the first months. The Company's revenues increased by 8 % to EUR 2.9 million in Q2/2023 compared to the same period last year (Q2/2022: EUR 2.7 million). In the first six months of the current fiscal year, sales increased by 6 % to EUR 5.9 million compared to the first half of 2022 (H1/2022: EUR 5.6 million). Regarding earnings, the Company recorded improved EBITDA of EUR ‑0.6 million (Q2/2022 corr.: EUR ‑0.7 million) in the second quarter and of EUR‑ 1.0 million (H1/2022 corr.: EUR‑ 1.2 million) in the first six months of 2023, respectively, mainly reflecting revenue growth combined with lower other costs.

Q2/2023 and H1/2023 - Key financial figures

After the publication of the 2022 half-year financial statements, technical errors were identified in the determination of the inventory valuation of work in progress. These errors were corrected and the results of the 2022 half-year financial statements were subsequently adjusted. In the published consolidated interim report as of June 30, 2023, the published figures and the corrected figures are presented for the previous year. In the following, only the corrected figures are compared with the figures as of June 30, 2023 as prior-year comparatives. For further details, please refer to the published interim Group report as of June 30, 2023.

Sales Q2/2023 and H1/2023

Looking at the individual regions, aap achieved in some cases very significant sales increases. Business in the LATAM markets developed particularly strongly, with growth in the second quarter and the first half of the year of +13 % and +29 % respectively. This positive development is due to the continuous expansion of our distributors in important markets such as Mexico and Brazil, the progressing market development by the new distributor in Colombia, and the growing activities in the entire Latin American region.

In the EMEA region, Germany performed well again after a long period of stagnation and grew across the board in the second quarter, resulting in an overall increase in sales of +16 %. As a result of the upturn in the second quarter, Germany can therefore report an increase of +5 % for the first half of the year. In the other central EMEA markets, customers were still reluctant to make new investments and build up inventories due to the continuing difficult economic situation, particularly as a result of severely delayed payment flows from healthcare facilities/systems. Sales excluding Germany declined slightly (Q2: ‑2 % yoy, H1: ‑8 % yoy). We expect a catch-up effect here in the second half of the year.

In the North America, aap continued its growth path with +7 % sales growth in the second quarter and thus half-year growth of +11 %. In addition to the growing number of surgeries performed, sales growth was also supported by higher-value fittings.

EBITDA Q2/2023 and H1/2023

aap thus realized an improved EBITDA in the second quarter as well as in the first half of 2023 compared to the same period of the previous year of EUR‑ 0.6 million (Q2/2022: EUR -0.7 million) and EUR‑ 1.0 million (H1/2022: EUR‑ 1.2 million), respectively. The following developments were the main factors here:

• Sales growth (Q2: +8 %; H1: +6 % yoy) and increased total output (Q2: +10 %; H1: +1 % yoy) in Q2 and H1/2023,
• Improved gross margin[1] in Q2 and stable high gross margin (in %) in H1 with increase in gross margin[2] in absolute figures (Q2: EUR +0.5 million, H1: EUR +0.3 million),
• Slight decline in personnel expenses in the second quarter and in the first six months compared with the same period of the previous year,
• Decrease in other costs mainly from decreased costs for external consulting and premises and incidental rental costs mainly due to decreased costs for electricity,
• increased net cost effect[3] from the conduct of the human clinical trial as a result of restarting the study in Q2/2023 under a modified study protocol,
• reduced non-recurring effects that had an earnings-improving impact on EBITDA in the previous year.

Based on the aforementioned developments, - Recurring EBITDA adjusted for non-recurring effects - improved to EUR ‑0.6 million (Q2/2022: EUR ‑1.0 million) and EUR ‑1.0 million (H1/2022: EUR ‑1.4 million) in both the second quarter and the first half of 2023.

Cash flow

aap's operating cash flow decreased by 17 % year-on-year in H1/2023 to EUR ‑1.5 million mainly due to the reduction of operating and other liabilities following the capital increase. Cash flow from investing activities showed an outflow of EUR 0.1 million in H1/2023 and was attributable to investments in development projects of EUR 59 thousand (H1/2022: EUR 67 thousand) and property, plant and equipment of EUR 93 thousand (H1/2022: EUR 249 thousand). In the area of financing activities, there was a cash inflow totaling EUR 2.8 million for the first half of 2023 (H1/2022: cash outflow of EUR 0.2 million), which was primarily due to the payment from the capital increase of net EUR 3.3 million EUR, taking up a shareholder loan in the amount of EUR 0.1 million, repayment of financial liabilities and shareholder loans in the amount of EUR 0.5 million (H1/2022: EUR 0.3 million), and payment of interest in the amount of EUR 80 thousand (H1/2022: EUR 130 thousand). As a result, cash and cash equivalents increased to EUR 1.4 million at the end of the second quarter. Net debt (total of all cash and cash equivalents less all interest-bearing liabilities) was EUR 1.5 million on June 30, 2023 (December 31, 2022: EUR 3.0 million).

Silver coating technology

In the field of silver coating technology, aap was able to successfully resume the recruitment phase in the ongoing human clinical trial with an adapted study design in the first half of 2023 and, after only a short time, enroll more patients with the new study protocol than with the previous study protocol. During the reporting period, the focus was on the resumption of the human clinical study and the provision of a sufficient number of test samples for the new study design and the corresponding infrastructure in the clinical study centers required for this purpose. In addition, discussions continued on possible co-funding of the human clinical trial and further cooperation opportunities.

Outlook

Not included in the following forecast statements:

• A significant tightening of sanctions against Russia or a change in the interpretation of existing sanctions,
• An expansion of the conflict situation outside Ukraine,
• Further additional significant increases in energy and commodity prices above currently foreseeable levels or restrictions on the Company's ability to operate due to partial or total cessation of gas and/or energy supplies due to, among other things, the war in Ukraine,
• Financial risks from ongoing interest rate increases in various markets and their impact on government finances in healthcare.

In the second half of 2023, in addition to stabilizing aap's financial position, the focus will be on expanding the human clinical trial for the innovative antibacterial silver coating technology to all planned clinic centers and preparing for the currently planned MDR audit in Q4.

Based on the aap share price loss, the conversion of the remaining amount of the convertible bond will become due for repayment and will thus burden liquidity by around EUR 0.5 million. Depending on the economic development of aap in the second half of the year as well as the further macroeconomic development, this may lead to an early refinancing of the Company, which was planned in the Annual Report 2022 only for the financial year 2024. The Management Board is currently evaluating various options in this context.

On the revenue side, the Executive Board plans for an increase in the second half of 2023 compared to the first six months and expects the planned revenue level of EUR 12 million to EUR 14 million for fiscal year 2023. For EBITDA in fiscal year 2023, the Executive Board expects a value of EUR ‑2.5 million to EUR ‑1.7 million, considering the full project costs for the further implementation of the human clinical trial for the antibacterial silver coating technology.





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aap Implantate AG (ISIN DE0005066609) - General Standard/Regulated Market - All German Stock Exchanges -

About aap Implantate AG
aap Implantate AG is a globally active medical technology company headquartered in Berlin, Germany. The company develops, manufactures and markets products for traumatology. In addition to the innovative anatomical plate system LOQTEQ®, the IP-protected portfolio includes a wide range of cannulated screws. In addition, aap Implantate AG has an innovation pipeline with promising development projects such as antibacterial silver coating technology and magnesium-based implants. These technologies address critical problems in traumatology that have not yet been adequately solved. In Germany, aap Implantate AG sells its products directly to hospitals, purchasing groups and group clinics, while at international level it primarily uses a broad network of distributors in around 25 countries. In the USA, the company relies on a hybrid sales strategy through its subsidiary aap Implants Inc. This involves sales both via distribution agents and as part of partnerships with global orthopedic companies. The aap Implantate AG share is listed in the General Standard of the Frankfurt Stock Exchange (XETRA: AAQ.DE). For further information, please visit our website at www.aap.de.

The figures presented in this press release may be subject to technical rounding differences which do not affect the overall presentation.

Forward-looking statements
This release may contain forward-looking statements based on current expectations, beliefs and projections of the Management Board and currently available information. The forward-looking statements are not guarantees of future performance or results. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in aap's public reports. Forward-looking statements therefore speak only as of the date they are made. We assume no obligation to update the forward-looking statements made in this release or to conform them to future events or developments.

^[1] Gross margin in % = (sales revenue +/- change in inventories of finished goods and work in progress - cost of materials / cost of purchased services)/ sales revenue

^[2] Gross margin absolute = sales revenue +/- change in inventories of finished goods and work in progress - cost of materials / cost of purchased services

^[3] Cost of conducting the clinical trial less grant funding

• aap shareholders met for the Annual General Meeting in Berlin on July 25, 2023
• Around 63 percent of the capital stock was represented at the Annual General Meeting
• All items on the agenda were approved with approval rates of >99 %

 
aap Implantate AG ("aap" or the "Company") had invited its shareholders to the Annual General Meeting on July 25, 2023, at the Panorama Congress Center at Wernerwerk in Berlin.

In the Ernst von Siemens Hall, the chairman of the meeting and chairwoman of the Supervisory Board, Dr. med. Nathalie Krebs, welcomed the shareholders and guests. Following the speech by the Management Board, CEO Rubino di Girolamo, CFO Marek Hahn and COO Agnieszka Mierzejewska answered the shareholders' questions about the Group and the course of business.

Of the Company's capital stock, 62.61 percent was represented. The shareholders approved the items on the agenda with large majorities (all agenda items put to the vote had approval rates of over 99 percent). In addition to the ratification of the actions of the Management Board and Supervisory Board, the election of the auditor, an amendment to the Articles of Association to allow virtual Annual General Meetings, the compensation report for the Management Board and Supervisory Board, and an authorization to acquire and use treasury shares, the resolution on the creation of a new Authorized Capital 2023/I was also put to the vote.

"I am very pleased with the results of the Annual General Meeting and, on behalf of the entire Management Board, would like to thank our shareholders for their trust and support," says Rubino Di Girolamo, Chairman / CEO of aap. "We see this as a clear appreciation of the performance of the management and employees of the company in further challenging times. We also see these results as a sign of support for the corporate strategy pursued, both in terms of short-term performance metrics and long-term value creation."

The voting results on the agenda items are published on the aap website under Investors / Annual General Meeting.





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aap Implantate AG (ISIN DE0005066609) - General Standard/Regulated Market - All German Stock Exchanges -

About aap Implantate AG
aap Implantate AG is a globally active medical technology company headquartered in Berlin, Germany. The company develops, manufactures and markets products for traumatology. In addition to the innovative anatomical plate system LOQTEQ®, the IP-protected portfolio includes a wide range of cannulated screws. In addition, aap Implantate AG has an innovation pipeline with promising development projects such as antibacterial silver coating technology and magnesium-based implants. These technologies address critical problems in traumatology that have not yet been adequately solved. In Germany, aap Implantate AG sells its products directly to hospitals, purchasing groups and group clinics, while at international level it primarily uses a broad network of distributors in around 25 countries. In the USA, the company relies on a hybrid sales strategy through its subsidiary aap Implants Inc. This involves sales both via distribution agents and as part of partnerships with global orthopedic companies. The aap Implantate AG share is listed in the General Standard of the Frankfurt Stock Exchange (XETRA: AAQ.DE). For further information, please visit our website at www.aap.de.

The figures presented in this press release may be subject to technical rounding differences which do not affect the overall presentation.

Forward-looking statements
This release may contain forward-looking statements based on current expectations, beliefs and projections of the Management Board and currently available information. The forward-looking statements are not guarantees of future performance or results. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in aap's public reports. Forward-looking statements therefore speak only as of the date they are made. We assume no obligation to update the forward-looking statements made in this release or to conform them to future events or developments.



Contact:
aap Implantate AG; Marek Hahn; Member of the Management Board, CFO; Lorenzweg 5; 12099 Berlin
Phone: +49 (0)30 75019 - 134; Fax: +49 (0)30 75019 - 290; E-Mail: m.hahn@aap.de

With regard to its innovative antibacterial silver coating technology, aap was able to successfully resume recruitment in the ongoing human clinical trial with an adapted study design and achieve a significant acceleration in patient recruitment after only a short time with the new study protocol.

Currently, aap expects patient recruitment to be completed in 12 to 18 months involving 12 to 14 clinical trial centers. Cure trials that have been very successful so far make aap optimistic that this result will also be reflected in the clinical trial.

With its groundbreaking surface modification technology, in which elemental silver is incorporated into the titanium surface in an extremely low but highly effective concentration, aap is aiming for a unique selling proposition that effectively counters increasing antibiotic resistance in medicine and has the potential to become the gold standard in traumatology. Depending on the human clinical trial and the regulatory authorities, aap expects the first market launch of the new technology in 3 years.

In addition to the human clinical trial, the Company will increasingly start to participate in events of the medical scientific societies, nationally and internationally, in the coming months and thus prepare the first steps of the market introduction phase to make the product better known in the market.





-------------------------------------------------------
aap Implantate AG (ISIN DE0005066609) - General Standard/Regulated Market - All German Stock Exchanges -

About aap Implantate AG
aap Implantate AG is a globally active medical technology company based in Berlin, Germany. The company develops, manufactures and markets products for traumatology. In addition to the innovative anatomical plate system LOQTEQ®, the IP-protected portfolio includes a wide range of cannulated screws. In addition, aap Implantate AG has an innovation pipeline with promising development projects such as antibacterial silver coating technology and magnesium-based implants. These technologies address critical problems in traumatology that have not yet been adequately solved. In Germany, aap Implantate AG sells its products directly to hospitals, purchasing groups and group clinics, while at international level it primarily uses a broad network of distributors in around 25 countries. In the USA, the company relies on a hybrid sales strategy through its subsidiary aap Implants Inc. This involves sales both via distribution agents and as part of partnerships with global orthopedic companies. The aap Implantate AG share is listed in the General Standard of the Frankfurt Stock Exchange (XETRA: AAQ.DE). For further information, please visit our website at www.aap.de.

The figures presented in this press release may be subject to technical rounding differences which do not affect the overall presentation.

Forward-looking statements
This release may contain forward-looking statements based on current expectations, beliefs and projections of the Management Board and currently available information. The forward-looking statements are not guarantees of future performance or results. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in aap's public reports. Forward-looking statements therefore speak only as of the date they are made. We assume no obligation to update the forward-looking statements made in this release or to conform them to future events or developments.



Contact:
aap Implantate AG; Marek Hahn; Member of the Management Board, CFO; Lorenzweg 5; 12099 Berlin
Phone: +49 (0)30 75019 - 134; Fax: +49 (0)30 75019 - 290; E-Mail: m.hahn@aap.de

• Sales Q2: EUR 2.9 million (+8 % yoy); LATAM (+13 % yoy), USA (+7 % yoy) and EMEA (+6 % yoy, resulting from growth in Germany).
• Revenue half-year 2023: EUR 5.9 million (+6 % yoy); LATAM (+29 % yoy) and USA (+11 % yoy) with significant double-digit growth; EMEA at -3 % yoy, recovery trend after Q1 due to upturn in Q2.

aap Implantate AG ("aap" or the "Company") recorded solid sales growth in both the second quarter and the first half of 2023. According to preliminary figures, aap increased sales in the second quarter of 2023 by +8 % year-on-year to EUR 2.9 million (Q2/2022: EUR 2.7 million). In the first six months of the current financial year, sales thus also increased by +6 % compared with the first half of 2022 to EUR 5.9 million (H1/2022: EUR 5.6 million). Overall, aap is still on a growth track after the solid start in the first quarter and underlines its growth targets for the financial year 2023 with the accelerated sales increase in the second quarter.

Sales Q2/2023

Sales H1/2023

Looking at the individual regions, aap achieved in some regions very significant sales increases. Business in the LATAM markets developed particularly strongly, with growth in the second quarter and the first half of the year of +13 % and +29 % respectively. This positive development can be attributed to the continuous expansion of our distributors in important markets such as Mexico and Brazil, the progressing market development through the new distributor in Colombia, as well as the growing activities in the entire Latin American region. In the EMEA region, Germany in particular performed well again after a long period of stagnation and grew across the board in the second quarter, resulting in an overall increase in sales of +16 %. As a result of the upswing in the second quarter, Germany recorded an increase of +5 % for the first half of the year. In the other central EMEA markets, customers continued to hold back on new investments and inventory build-up due to the ongoing difficult economic situation, particularly because of severely delayed payment flows from healthcare facilities/systems. Sales excluding Germany declined slightly (Q2: -2 % y-o-y, H1: -8 % y-o-y). aap expects a positive catch-up effect here in the second half of the year.

In the USA, aap continued its growth path with +7 % sales growth in the second quarter and thus half-year growth of
+11 %. In addition to the growing number of surgeries performed, sales growth was also supported by higher-valued cases.

The figures contained in this press release are preliminary as of June 30, 2023, which are subject to change until final publication. aap plans to publish a press release on July 20, 2023, on the study progress of the human clinical trial of the promising antibacterial silver coating technology and to announce the final results of the second quarter and the first half of 2023 on August 14, 2023.





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aap Implantate AG (ISIN DE0005066609) - General Standard/Regulated Market - All German Stock Exchanges -

About aap Implantate AG

aap Implantate AG is a globally active medical technology company based in Berlin, Germany. The company develops, manufactures and markets products for traumatology. In addition to the innovative anatomical plate system LOQTEQ®, the IP-protected portfolio includes a wide range of cannulated screws. In addition, aap Implantate AG has an innovation pipeline with promising development projects such as antibacterial silver coating technology and magnesium-based implants. These technologies address critical problems in traumatology that have not yet been adequately solved. In Germany, aap Implantate AG sells its products directly to hospitals, purchasing groups and group clinics, while at international level it primarily uses a broad network of distributors in around 25 countries. In the USA, the company relies on a hybrid sales strategy through its subsidiary aap Implants Inc. This involves sales both via distribution agents and as part of partnerships with global orthopedic companies. The aap Implantate AG share is listed in the General Standard of the Frankfurt Stock Exchange (XETRA: AAQ.DE). For further information, please visit our website at www.aap.de.

The figures presented in this press release may be subject to technical rounding differences which do not affect the overall presentation.

Forward-looking statements

This release may contain forward-looking statements based on current expectations, beliefs and projections of the Management Board and currently available information. The forward-looking statements are not guarantees of future performance or results. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in aap's public reports. Forward-looking statements therefore speak only as of the date they are made. We assume no obligation to update the forward-looking statements made in this release or to conform them to future events or developments.

If you have any questions, please contact: aap Implantate AG; Marek Hahn; Member of the Management Board, CFO; Lorenzweg 5; 12099 Berlin; Phone: +49 (0)30 75019 - 134; Fax: +49 (0)30 75019 - 290; E-Mail: m.hahn@aap.de

About aap Implantate AG
aap Implantate AG is a globally active medical technology company based in Berlin, Germany. The company develops, manufactures and markets products for traumatology. In addition to the innovative anatomical plate system LOQTEQ®, the IP-protected portfolio includes a wide range of cannulated screws. In addition, aap Implantate AG has an innovation pipeline with promising development projects such as antibacterial silver coating technology and magnesium-based implants. These technologies address critical problems in traumatology that have not yet been adequately solved. In Germany, aap Implantate AG sells its products directly to hospitals, purchasing groups and group clinics, while at international level it primarily uses a broad network of distributors in around 25 countries. In the USA, the company relies on a hybrid sales strategy through its subsidiary aap Implants Inc. This involves sales both via distribution agents and as part of partnerships with global orthopedic companies. The aap Implantate AG share is listed in the General Standard of the Frankfurt Stock Exchange (XETRA: AAQ.DE). For further information, please visit our website at https://www.aap.de/.

The figures presented in this press release may be subject to technical rounding differences which do not affect the overall presentation.

Forward-looking statements
This release may contain forward-looking statements based on current expectations, beliefs and projections of the Management Board and currently available information. The forward-looking statements are not guarantees of future performance or results. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in aap's public reports. Forward-looking statements therefore speak only as of the date they are made. We assume no obligation to update the forward-looking statements made in this release or to conform them to future events or developments.



Contact:
aap Implantate AG; Marek Hahn; Member of the Management Board, CFO; Lorenzweg 5; 12099 Berlin
Tel.: Phone: +49 (0)30 75019 - 134; Fax: +49 (0)30 75019 - 290; E-Mail: m.hahn@aap.de

• CFO Marek Hahn recently informed the company of his wish not to accept the offered contract extension and to terminate his Executive Board activities as of Dec. 31, 2023
• Dr. Nathalie Krebs, Chairwoman of the Supervisory Board, praises Hahn's "dedication, strategic clarity and leadership"
• CEO Rubino di Girolamo and COO Agnieszka Mierzejewska will continue to lead the company together after Hahn's departure; both contracts extended ahead of schedule until the end of 2025

The CFO of aap Implantate AG ("aap" or the "Company") recently informed the Chairwoman of the Company's Supervisory Board, Dr. Nathalie Krebs, of his wish not to accept the offered contract extension and to terminate his Management Board activities upon expiry of the currently valid Management Board contract on December 31, 2023. Dr. Nathalie Krebs announced that the Supervisory Board will work with Marek Hahn to implement the scheduled termination of his contract, which runs until December 31, 2023. In parallel, the Executive Board contracts of Rubino di Girolamo, CEO and Agnieszka Mierzejewska, COO have been extended by a further 2 years until the end of 2025.

CFO Marek Hahn says: "My decision is the result of careful consideration. After more than fifteen unique years in which aap was my priority, I would like to give my life a new direction. I would now like to devote more time to my grown family and obligations in the parental environment. For my own professional future, I would like more freedom to pursue new interests beyond aap. For me, it has always been a gift and a privilege to be part of aap, and it will be incredibly difficult for me to leave it all behind. aap has enabled me to be part of and actively shape the very varied and exciting history of the company. I will leave aap at a time when the company is accelerating its growth again and is best positioned for the future. Until my departure, I will continue to ensure that we press ahead with the implementation of our strategy at full speed."

Dr. Nathalie Krebs, Chairwoman of the Supervisory Board: "The Supervisory Board regrets Marek's decision, but we have the highest respect for his personal motives. We appreciate Marek's transparency and openness, which give the Supervisory Board and the company sufficient time for the transition phase. In the past four years of our collaboration, I have experienced first-hand Marek's commitment, strategic clarity and leadership combined with his profound expertise, which he has brought to bear for the benefit of aap. Examples include the extensive restructuring, refinancing and repositioning of aap both strategically and financially despite severely hampered conditions due to the COVID-19 pandemic with most recently always fully placed or oversubscribed capital rounds, which were significantly driven by Marek. We take these results as a clear appreciation of the performance of the management team but also as a sign of support for the pursued corporate strategy, both in terms of short-term performance metrics and long-term value creation. We look forward to continuing to work closely together in the coming months and are confident that Marek will remain closely associated with aap in the long term."

Marek Hahn was appointed to the Management Board as CFO with effect from January 1, 2010 and has led aap with Rubino di Girolamo as CEO since 2019 and jointly with Agnieszka Mierzejewska as COO since 2021. Rubino di Girolamo and Agnieszka Mierzejewska will continue to lead the company as CEO and COO after Marek Hahn's departure.

Rubino di Girolamo, CEO: "When I took on the role as CEO in 2019, we could not have imagined where this journey would take us. Marek's impact on the results and successes we have achieved since then cannot be put into words. We will greatly miss him as a strategic thinker, leader and critical sparring partner." Agnieszka Mierzejewska, COO: "I had the privilege to get to know Marek in various responsibilities. We owe him a lot, as a business partner and as a colleague. I am sure that he will continue to follow aap's further development intensively in the future."





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aap Implantate AG (ISIN DE0005066609) - General Standard/Regulated Market - All German Stock Exchanges -

About aap Implantate AG
aap Implantate AG is a globally active medical technology company headquartered in Berlin, Germany. The company develops, manufactures and markets products for traumatology. In addition to the innovative anatomical plate system LOQTEQ®, the IP-protected portfolio includes a wide range of cannulated screws. In addition, aap Implantate AG has an innovation pipeline with promising development projects such as antibacterial silver coating technology and magnesium-based implants. These technologies address critical problems in traumatology that have not yet been adequately solved. In Germany, aap Implantate AG sells its products directly to hospitals, purchasing groups and group clinics, while at international level it primarily uses a broad network of distributors in around 25 countries. In the USA, the company relies on a hybrid sales strategy through its subsidiary aap Implants Inc. This involves sales both via distribution agents and as part of partnerships with global orthopedic companies. The aap Implantate AG share is listed in the General Standard of the Frankfurt Stock Exchange (XETRA: AAQ.DE). For further information, please visit our website at www.aap.de.

The figures presented in this press release may be subject to technical rounding differences which do not affect the overall presentation.

Forward-looking statements
This release may contain forward-looking statements based on current expectations, beliefs and projections of the Management Board and currently available information. The forward-looking statements are not guarantees of future performance or results. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in aap's public reports. Forward-looking statements therefore speak only as of the date they are made. We assume no obligation to update the forward-looking statements made in this release or to conform them to future events or developments.



Contact:
aap Implantate AG; Marek Hahn, Member of the Management Board, CFO; Lorenzweg 5; 12099 Berlin
Phone: +49 (0)30 75019 - 134; Fax: +49 (0)30 75019 - 290; Email: m.hahn@aap.de

• Sales: EUR 3.0 million (+3 % yoy; CER[1] : +2 % yoy); LATAM (+55 % yoy) and USA (+15 % yoy) with significant double-digit growth; EMEA with -9 % yoy remains below expectations
• EBITDA unchanged year-on-year at EUR -0.5 million in cost- and interest-rate-inflationary environment; operating cash flow +74 % year-on-year
• Silver: Clinical trial resumed with revised study protocol in April; significant acceleration in patient recruitment expected
• Successful capital round: Full placement of capital increase with subscription rights with net inflow of around EUR 3.2 million 

aap Implantate AG ("aap" or the "Company") has made a solid start to the financial year 2023. Even though the first quarter was characterized by inflation-related interest rate and cost increases as well as continuing uncertainties due to the war in Ukraine, the Company was able to slightly increase sales and keep EBITDA constant compared to the previous year. In the process, aap increased sales by 3 % year-on-year to EUR 3.0 million (Q1/2022: EUR 2.9 million) and realized EBITDA of EUR -0.5 million (Q1/2022: EUR -0.5 million). Starting from an unchanged EBITDA, the company was able to significantly improve the operating cash flow (+74 % compared to previous year), which resulted mainly from working capital management measures. In addition, aap successfully carried out a capital increase with subscription rights in the first quarter that was fully subscribed by shareholders or placed with investors by way of private placement, resulting in a net inflow of around EUR 3.2 million.

Q1/2023 - Key financial figures

Sales

Looking at the individual regions, the development of sales in the first quarter of 2023 varied. In the EMEA region (= Europe, Middle East, Africa; -9 % year-on-year), growth was achieved above all in Spain (+15 % year-on-year) and in Saudi Arabia (+23 % year-on-year), although this was unable to compensate for the development in markets such as Germany, Egypt, South Africa and Romania, which were in some cases significantly below the level of the previous year. Overall, the region fell short of the company's expectations in the first quarter of 2023 despite numerous ongoing sales activities.

In the USA, the sales momentum was continued, and double-digit growth was achieved (+15 % compared to the previous year). The absolute increase in trauma cases treated with higher-priced LOQTEQ® plate systems was the background for the sales increase.

In Latin America (+55 % year-on-year), the company also achieved significant double-digit growth, resulting primarily from the central markets of Mexico (+43 % year-on-year) and Brazil (+20 % year-on-year). In the Asia-Pacific region, aap recorded a 44 % year-on-year decline in sales, resulting primarily from a reduced volume of business with the Chinese distributor due to a sharp drop in the price situation.

EBITDA

aap realized in the first quarter a constant EBITDA and an only slightly worsened Recurring EBITDA (EBITDA without one-off effects) of EUR -0.5 million (Q1/2022: EUR -0.5 million) and EUR -0.5 million (Q1/2022: EUR -0.4 million), respectively. The following developments in the first quarter of 2023 were the main factors here:

• Slight decrease in total output (-6 %) due to lower inventory changes in inventories,
• slightly improved gross margin[2] (in %; +0.3 percentage points) with an increased gross margin in absolute terms as a result of the increase in sales,
• virtually unchanged level in personnel costs,
• Decrease in other costs mainly due to lower costs for legal advice and external consulting as well as costs for the termination of legal disputes (previous year: one-time effect),
• reduced net effect[3] from conducting the human clinical trial for aap's innovative silver coating technology,
• reduced non-recurring effects that had a negative impact on EBITDA in the previous year (termination of legal disputes)

Cash flow

aap's operating cash flow in Q1/2023 improved by +74 % year-on-year to EUR -0.2 million mainly due to better working capital management. Cash flow from investing activities showed an outflow of EUR 0.1 million in Q1/2023, with investments in development projects accounting for EUR 25 thousand (Q1/2022: EUR 16 thousand) and property, plant and equipment for EUR 50 thousand (Q1/2022: EUR 85 thousand). In the area of financing activities, there was a cash inflow totaling EUR 1.2 million for the first quarter of 2023, which was primarily characterized by the partial payment from the capital increase in the amount of EUR 1.3 million, taking out a shareholder loan in the amount of EUR 0.1 million, repayment of financial liabilities in the amount of EUR 0.2 million (Q1/2022: EUR 0.2 million) and payment of interest in the amount of EUR 39 thousand (Q1/2022: EUR 84 thousand). As a result, cash and cash equivalents increased to EUR 1.2 million at the end of the first quarter. Net debt (total of all cash and cash equivalents less all interest-bearing liabilities) was EUR 2.1 million on March 31, 2023 (December 31, 2022: EUR 3.0 million).
 

Silver coating technology

In the area of silver coating technology, the focus in the first quarter of 2023 was primarily on completing all preparatory work to be able to continue the clinical study in the second quarter under a modified study protocol. In this context, the study was resumed in the first trial centers at the end of April as planned. Under the leadership of the University Hospital Regensburg, Prof. Dr. Alt, the Company plans to include 17 study centers in Germany in the clinical study by late summer. With the new study protocol, aap expects a massive acceleration of the study so that the necessary number of patients can be recruited within 12 to 18 months.





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aap Implantate AG (ISIN DE0005066609) - General Standard/Regulated Market - All German Stock Exchanges -

About aap Implantate AG
aap Implantate AG is a globally active medical technology company based in Berlin, Germany. The company develops, manufactures and markets products for traumatology. In addition to the innovative anatomical plate system LOQTEQ®, the IP-protected portfolio includes a wide range of cannulated screws. In addition, aap Implantate AG has an innovation pipeline with promising development projects such as antibacterial silver coating technology and magnesium-based implants. These technologies address critical problems in traumatology that have not yet been adequately solved. In Germany, aap Implantate AG sells its products directly to hospitals, purchasing groups and group clinics, while at international level it primarily uses a broad network of distributors in around 25 countries. In the USA, the company relies on a hybrid sales strategy through its subsidiary aap Implants Inc. This involves sales both via distribution agents and as part of partnerships with global orthopedic companies. The aap Implantate AG share is listed in the General Standard of the Frankfurt Stock Exchange (XETRA: AAQ.DE). For further information, please visit our website at www.aap.de.

The figures presented in this press release may be subject to technical rounding differences which do not affect the overall presentation.

Forward-looking statements
This release may contain forward-looking statements based on current expectations, beliefs and projections of the Management Board and currently available information. The forward-looking statements are not guarantees of future performance or results. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in aap's public reports. Forward-looking statements therefore speak only as of the date they are made. We assume no obligation to update the forward-looking statements made in this release or to conform them to future events or developments.



^[1]CER = Constant exchange rates

^[2] Gross margin = sales revenue +/- change in inventories of finished goods and work in progress - cost of materials / cost of purchased services.

^[3] Cost of conducting the clinical trial less grant funding



Contact:
aap Implantate AG; Marek Hahn; Member of the Management Board, CFO; Lorenzweg 5; 12099 Berlin
Phone: +49 (0)30 75019 - 134; Fax: +49 (0)30 75019 - 290; E-Mail: m.hahn@aap.de

• Sales: EUR 11.5 million (-6 % yoy; CER[1] : -9 % yoy); markets generally in difficult environment with mixed results; USA in H2/2022 with solid growth and excluding one-off effects +16 % yoy
• EBITDA: EUR -1.7 million (FY/2021: EUR -0.8 million); operating cash flow +23 % yoy
• Silver: Release revised study protocol in Q4/2022 with restart study in Q2/2023; Ongoing promising clinical data from individual healing trials
• Successful refinancing: approx. 10 % capital increase via strategic investor and shareholder loan; exercise of conversion rights with EUR 1.6 million equity effect
• Outlook FY/2023: Sales between EUR 12.0 and 14.0 million (+4 % to +22 %); EBITDA total company (incl. costs silver coating technology) of EUR -2.5 to -1.7 million

aap Implantate AG ("aap" or the "Company") consolidated its basis and operating business in a particularly challenging financial year 2022. The year started turbulently with the beginning of the war in Europe, subsequent inflation explosion, interest rate hikes and cost explosions for energy sources and raw materials as well as a continuing COVID-19 pandemic situation. The first half of the year left its mark and the Company was unable to achieve the targeted sales increases despite investments in distribution. The second half of the year then showed signs of recovery in markets such as LATAM and the USA, with the result that the last two quarters closed just above the previous year. The sales forecast revised in the summer was achieved with EUR 11.5 million and a slight decline in sales (-6 % y-o-y; FY/2021: EUR 12.2 million). EBITDA deteriorated to EUR -1.7 million (FY/2021: EUR -0.8 million) but remained within the originally forecast range. Despite the deterioration in earnings, aap improved operating cash flow by +23 % year-on-year in FY2022 (FY/2021: EUR -2.5 million). Overall, the trend of previous years towards a positive result and a balanced cash flow in 2022 was thus stopped by the accumulation of external negative events.

FY/2022 - Key financial figures

Sales

* In North America, two special effects amounting to EUR 0.4 million are to be excluded from the sales comparison. Excluding these non-recurring effects results in growth of +16 % for the fiscal year 2022
 

Looking at the individual regions, sales for fiscal 2022 were ambivalent. In the EMEA region (= Europe, Middle East, Africa; -9 % y-o-y), growth was realized above all in South Africa (+14 % y-o-y) as well as in Israel and smaller European markets, which, however, could not compensate for the development of the central markets such as Spain and Germany, among others, which were below the previous year's level. In both central markets, the sales measures initiated did not yet lead to a turnaround compared to the pre-COVID 19 level due to staff shortages in hospitals and low trauma cases up to postponements of unnecessary operations.

The picture in the USA is divided: While at first glance there is a decline in sales for the region in fiscal year 2022 (‑ 3 % compared to the previous year), two special effects amounting to EUR 0.4 million must be excluded from the sales comparison. A one-off effect in the previous year resulted from the termination of the contractual relationship with a long-standing distribution partner, while another revenue effect resulted from the crediting of revenue reported in the previous year due to financing problems of the customer. Excluding these non-recurring effects, growth of +16 % for the financial year 2022 was achieved, mainly driven by the increased number of trauma cases treated with LOQTEQ® products, the increased average invoiced price per surgery performed and the development of the USD/EUR exchange rate. Overall, despite the generally unsteady environment, aap succeeded in stabilizing business in the USA and underpinning its dynamic development.

In Latin America (+11 %), the Company achieved significant growth in key markets such as Mexico (+48 %) and Brazil (+30 %), but also established new markets with Ecuador and Venezuela. In the Asia-Pacific region, aap recorded a 40 % year-on-year decline in sales, mainly because of a massive reduction in business volume due to a sharp drop in the price situation with the Chinese distribution partner.
 

EBITDA

aap realized a deteriorated EBITDA and Recurring EBITDA (EBITDA excluding one-off effects) of EUR ‑1.7 million (FY/2021: EUR -0.8 million) and EUR -2.3 million (FY/2021: EUR -1.2 million) respectively, in fiscal year 2022. The largest one-off effects resulted from the sharply reduced Corona help programs of EUR 0.6 million, an adjustment in the write-down in inventories of EUR 0.3 million and a derecognition of accrued liabilities of EUR 0.2 million. The following developments in fiscal year 2022 were the main factors:

• Sales level realized in 2022 below the Company's original planning primarily due to the aforementioned effects from the COVID-19 pandemic, the war in Ukraine, and the general inflationary environment,
• slightly improved gross margin (in %; +2 percentage points) with reduced gross margin in absolute terms due to the decline in sales,
• planned increase in fixed personnel expenses, primarily due to the expansion of the sales infrastructure in Germany and the United States to implement the planned sales growth, and in the areas of quality management, regulatory affairs, and clinical affairs to ensure that certification under the new EU Medical Devices Regulation is achieved by 2024 as planned; offsetting effect in variable personnel expenses, primarily for bonuses and management bonuses due to failure to achieve targets for sales and EBITDA,
• increased cost level (excluding non-recurring effects) in other costs in the operating trauma business incl. central administration functions mainly from unplanned cost increases for energy (here: more than doubling of electricity costs) and purchased inputs, increased costs for insurance and an increased cost level for sales-related costs of distribution (commissions, freight costs) with a simultaneous decrease in costs for legal advice and costs in connection with the termination of legal disputes, costs for external advice and personnel recruitment costs,
• cost increase from conducting the human clinical trial for aap's innovative silver coating technology with the first surgeries performed,
• increased non-recurring effects that had an earnings-enhancing impact on EBITDA in both comparative periods (mainly from the recognition of income from COVID 19 assistance programs and from the reversal of provisions and accrued liabilities)

Looking at the development of the pure operating trauma business^[2] , we can classify fiscal 2022 as a year of consolidation. Together with the restructuring successes achieved in the years 2019 to 2021, this has also created a basis for the following financial years that will enable profitable growth in the coming years.
 

Cash flow and balance sheet

Based on a net result after tax of EUR -2.6 million, aap's operating cash flow improved by +23 % year-on-year to EUR ‑1.9 million in FY/2022, mainly due to better working capital management. Cash flow from investing activities showed an outflow of EUR 0.5 million in the financial year and was accounted for by investments in development projects of EUR 141 thousand (FY/2021: EUR 194 thousand) and property, plant and equipment of EUR 0.3 million (FY/2021: EUR 0.3 million), while the previous year's figure still included proceeds from disposals of property, plant and equipment of EUR 0.6 million. In the area of financing activities, there was a cash inflow totaling EUR 0.5 million for fiscal year 2022, which was primarily characterized by the proceeds from the capital increase of EUR 1.2 million (FY/2021: EUR 4.8 million), the taking up of a shareholder loan of EUR 0.3 million, the repayment of financial liabilities of EUR 0.7 million (FY/2021: EUR 1.0 million), and the payment of interest of EUR 0.2 million (FY/2021: EUR 0.3 million). As a result, cash and cash equivalents decreased to EUR 0.2 million as of the balance sheet date in FY/2022. Net debt (total of all cash and cash equivalents less all interest-bearing liabilities) was unchanged at EUR 3.0 million as of December 31, 2022.

Total assets were EUR 20.2 million at the end of fiscal 2022, around 12 % lower than on December 31, 2021. Non-current assets decreased only marginally by EUR 0.6 million compared with the end of fiscal 2021 because of lower additions from investments in relation to ordinary depreciation and amortization. Current assets decreased to EUR 11.2 million as of the reporting date of the reporting period and were mainly influenced by the decrease in cash and cash equivalents, a lower level of trade receivables and other assets as well as the increase in inventories. Shareholders' equity remained unchanged at EUR 12.8 million as a result of the offsetting effect of the negative result for the period (FY/2022: EUR -2.6 million) and the conversion rights from the convertible bond exercised in the reporting period with an effect of EUR 1.6 million as well as the capital increase carried out with an effect of EUR 1.2 million as of December 31, 2022. With total assets of EUR 20.2 million as of Dec. 31, 2022 (Dec. 31, 2021: EUR 23.0 million), the equity ratio is 63 % (Dec. 31, 2021: 56 %). Non-current and current liabilities decreased to EUR 7.4 million as of the reporting date of the reporting period and were mainly influenced by the exercise of conversion rights under the convertible bond issued in 2020, the scheduled payments made on lease liabilities and other financial liabilities, and the granting of a further shareholder loan.
 

Outlook
aap aims to set positive accents in terms of sales and earnings in the financial year 2023. The investments in sales started in 2022 form the basis for the planned sales increase in 2023.

The clinical human trial for the innovative antibacterial silver coating technology, which started in 2021, will be continued in the second quarter under a modified study protocol. Under the leadership of the University Hospital Regensburg, Prof. Dr. Alt, the Company plans to include 17 study centers in Germany in the clinical study by late summer. With the new study protocol, we expect a massive acceleration of the study so that the necessary number of patients can be recruited within 12 to 18 months. At the same time, aap is seeking third-party co-funding for the human clinical trial. This can be funded both by additional grants and by development partnerships with companies from application areas outside traumatology.

In addition, a major focus will be on implementing activities as planned to achieve certification under the new EU Medical Device Regulation (MDR 2017/745/EU) within the transition period until 2024. The availability of the Notified Body will also be a factor in achieving this goal.

Not included in the following forecast statements:

• A significant tightening of sanctions against Russia or a change in the interpretation of existing sanctions,
• an expansion of the conflict situation outside Ukraine,
• an additional significant increase in energy and raw material prices, among other things due to the war in Ukraine or the associated sanctions, or
• further virus mutations (COVID 19 pandemic) leading to a renewed widespread infection situation with corresponding lockdown measures or other restrictions in the sales regions relevant for aap or production stoppages at the Berlin site or at aap's service providers/suppliers.

The Executive Board forecasts sales of between EUR 12.0 million and EUR 14.0 million for fiscal year 2023. The management assumes a similar distribution of sales over the individual quarters as in the previous year, with a possible acceleration in the fourth quarter. Regarding earnings, the Management Board expects EBITDA to be between EUR -2.5 million and EUR -1.7 million in fiscal year 2023, based on the planned sales growth and further efficiency improvements to be realized, but with higher costs for the implementation of the clinical trial for the silver coating technology compared to the previous year. In this context, the management aims to achieve an improved operating cash flow for the company as a whole, excluding the costs for the silver coating technology and, in particular, the human clinical trial, if the development is in line with the budget in the current fiscal year. After deducting the remaining financing expenses and the costs for the clinical human study, however, aap will still report a negative cash flow.





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aap Implantate AG (ISIN DE0005066609) - General Standard/Regulated Market - All German Stock Exchanges -

About aap Implantate AG
aap Implantate AG is a globally active medical technology company headquartered in Berlin, Germany. The company develops, manufactures and markets products for traumatology. In addition to the innovative anatomical plate system LOQTEQ®, the IP-protected portfolio includes a wide range of cannulated screws. In addition, aap Implantate AG has an innovation pipeline with promising development projects such as antibacterial silver coating technology and magnesium-based implants. These technologies address critical problems in traumatology that have not yet been adequately solved. In Germany, aap Implantate AG sells its products directly to hospitals, purchasing groups and group clinics, while at international level it primarily uses a broad network of distributors in around 25 countries. In the USA, the company relies on a hybrid sales strategy through its subsidiary aap Implants Inc. This involves sales both via distribution agents and as part of partnerships with global orthopedic companies. The aap Implantate AG share is listed in the General Standard of the Frankfurt Stock Exchange (XETRA: AAQ.DE). For further information, please visit our website at www.aap.de.

The figures presented in this press release may be subject to technical rounding differences which do not affect the overall presentation.

Forward-looking statements
This release may contain forward-looking statements based on current expectations, beliefs and projections of the Executive Board and currently available information. The forward-looking statements are not guarantees of future performance or results. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in aap's public reports. Forward-looking statements therefore speak only as of the date they are made. We assume no obligation to update the forward-looking statements made in this release or to conform them to future events or developments.

^[2] aap Group excluding development costs for silver coating and resorbable magnesium implant technologies, non-recurring one-off effects and non-allocable central costs

aap Implantate AG (ISIN DE0005066609) - General Standard/Regulated Market - All German Stock Exchanges -

About aap Implantate AG
aap Implantate AG is a globally active medical technology company headquartered in Berlin, Germany. The company develops, manufactures and markets products for traumatology. In addition to the innovative anatomical plate system LOQTEQ®, the IP-protected portfolio includes a wide range of cannulated screws. In addition, aap Implantate AG has an innovation pipeline with promising development projects such as antibacterial silver coating technology and magnesium-based implants. These technologies address critical problems in traumatology that have not yet been adequately solved. In Germany, aap Implantate AG sells its products directly to hospitals, purchasing groups and group clinics, while at international level it primarily uses a broad network of distributors in around 25 countries. In the USA, the company relies on a hybrid sales strategy through its subsidiary aap Implants Inc. This involves sales both via distribution agents and within the framework of partnerships with global orthopedic companies. The aap Implantate AG share is listed in the General Standard of the Frankfurt Stock Exchange (XETRA: AAQ.DE). For further information, please visit our website at www.aap.de.

The figures presented in this press release may be subject to technical rounding differences which do not affect the overall presentation.

Forward-looking statements
This release may contain forward-looking statements based on current expectations, beliefs and projections of the Management Board and currently available information. The forward-looking statements are not guarantees of future performance or results. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in aap's public reports. Forward-looking statements therefore speak only as of the date they are made. We assume no obligation to update the forward-looking statements made in this release or to conform them to future events or developments.



Contact:
aap Implantate AG; Marek Hahn; Member of the Management Board/ CFO; Lorenzweg 5; 12099 Berlin
Tel.: +49 (0)30 75019 - 134; Fax: +49 (0)30 75019 - 290; Email: m.hahn@aap.de .

About aap Implantate AG
aap Implantate AG is a globally active medical technology company headquartered in Berlin, Germany. The company develops, manufactures and markets products for traumatology. In addition to the innovative anatomical plate system LOQTEQ®, the IP-protected portfolio includes a wide range of cannulated screws. In addition, aap Implantate AG has an innovation pipeline with promising development projects such as antibacterial silver coating technology and magnesium-based implants. These technologies address critical problems in traumatology that have not yet been adequately solved. In Germany, aap Implantate AG sells its products directly to hospitals, purchasing groups and group clinics, while at international level it primarily uses a broad network of distributors in around 25 countries. In the USA, the company relies on a hybrid sales strategy through its subsidiary aap Implants Inc. This involves sales both via distribution agents and within the framework of partnerships with global orthopedic companies. The aap Implantate AG share is listed in the General Standard of the Frankfurt Stock Exchange (XETRA: AAQ.DE). For further information, please visit our website at www.aap.de.



Forward-looking statements
This release may contain forward-looking statements based on current expectations, beliefs and projections of the Management Board and currently available information. The forward-looking statements are not guarantees of future performance or results. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in aap's public reports. Forward-looking statements therefore speak only as of the date they are made. We assume no obligation to update the forward-looking statements made in this release or to conform them to future events or developments.

^[1] Source: Global Trauma Fixation Device Market Insights, Forecast to 2025, page 16; released by QYResearch

^[2] Source: https://www.orthobullets.com/trauma/1017/distal-humerus-fractures, viewed 19.03.2023

• Sales: Good start in January 2023 in the U.S. with double-digit sales growth; international distributors confident of sales expansion in 2023
• Silver: Restart of human clinical trial after approved clinical trial protocol amendment in April 2023; significant acceleration in patient recruitment expected
• Successful start of capital increase with subscription commitments of 85 % from anchor shareholders and new investors
• Outlook FY/ 2023: Revenue between EUR 12.0 and 14.0 million (+4 % to +22 % yoy) planned

aap Implantate AG ("aap" or the "Company") has made a good start to the new year after a challenging fiscal year 2022. All three sales units (Germany, International and USA) are making good progress in their markets, led by the USA, which closed January 2023 with a decent double-digit sales increase compared to the same month last year. In Europe, a test distribution is underway with a strategic partner in a promising market. In international business, the company is again recording increased activity in many markets and aap's distribution partners are again more optimistic about the financial year 2023 and thus potentially about a sales level above that of the previous year. Based on the work in the context of preparing the financial statements for the financial year 2022 and as already communicated in November 2022, the Management Board confirms a figure for sales and EBITDA at the lower end of the guidance for the past financial year 2022.

In the field of silver coating technology, aap had to adjust and simplify the clinical trial plan for the ongoing human study at the end of 2022, as the course of the study to date has shown that the originally envisaged number of patients with fractures exclusively of the distal tibia cannot be achieved within a reasonable period of time. In November 2022, the Company received all commitments and approvals from the BfArM and the Ethics Committee for the adapted study plan. aap expects that this will significantly accelerate patient recruitment. Production of the study materials for the adapted target fracture is already underway and the implants will be available for continuation of the study from April 2023. The Company expects to reach the required patient number within 12 to 18 months from the restart of the study. In the meantime, it has been possible to treat out-of-treatment patients with aap's silver-coated implants as part of individual healing trials. Overall, the healing process was very good, which is a positive indication for the ongoing clinical human trial.

The capital increase launched today to secure liquidity achieved firm subscription commitments in advance amounting to approx. 85 % of the size of the capital measure. In order to be able to immediately deliver shares admitted to stock exchange trading to all shareholders accepting the subscription offer as well as to certain investors in the course of the rump placement, existing major shareholders will provide the Company with a sufficient number of shares already admitted to stock exchange trading from their existing holdings by way of a securities loan. In addition, the future holders of non-admitted new shares have committed themselves to a lock-up from the date of signing of a lock-up commitment agreement until the end of a period of six months after admission of the part of the new shares to be admitted in November 2023. The Executive Board acknowledges these commitments as a sign of support for the corporate strategy pursued, both in terms of short-term key performance indicators and long-term value creation.





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aap Implantate AG (ISIN DE0005066609) - General Standard/Regulated Market - All German Stock Exchanges -

About aap Implantate AG
aap Implantate AG is a globally active medical technology company headquartered in Berlin, Germany. The company develops, manufactures and markets products for traumatology. In addition to the innovative anatomical plate system LOQTEQ®, the IP-protected portfolio includes a wide range of cannulated screws. In addition, aap Implantate AG has an innovation pipeline with promising development projects such as antibacterial silver coating technology and magnesium-based implants. These technologies address critical problems in traumatology that have not yet been adequately solved. In Germany, aap Implantate AG sells its products directly to hospitals, purchasing groups and group clinics, while at international level it primarily uses a broad network of distributors in around 25 countries. In the USA, the company relies on a hybrid sales strategy through its subsidiary aap Implants Inc. This involves sales both via distribution agents and within the framework of partnerships with global orthopedic companies. The aap Implantate AG share is listed in the General Standard of the Frankfurt Stock Exchange (XETRA: AAQ.DE). For further information, please visit our website at www.aap.de.

The figures presented in this press release may be subject to technical rounding differences which do not affect the overall presentation.

Forward-looking statements
This release may contain forward-looking statements based on current expectations, beliefs and projections of the Management Board and currently available information. The forward-looking statements are not guarantees of future performance or results. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in aap's public reports. Forward-looking statements therefore speak only as of the date they are made. We assume no obligation to update the forward-looking statements made in this release or to conform them to future events or developments.



Contact:
aap Implantate AG; Marek Hahn; Member of the Management Board/ CFO; Lorenzweg 5; 12099 Berlin
Tel.: +49 (0)30 75019 - 134; Fax: +49 (0)30 75019 - 290; Email: m.hahn@aap.de

The two crucial changes at a glance concern:

• Removal of double blinding: The previous situation with an unblinded surgeon who then cannot perform follow-up visits has proven difficult to implement in practice. Unblinding the entire study team and the sponsor will simplify planning and patient care. Furthermore, this allows for smaller study teams and more flexible handling in case of vacation or illness of the investigators.
• Adjustment of target fracture: Due to the significantly higher incidence of fractures of the fibula, a faster inclusion of a significant number of patients is expected. In addition, it will facilitate the planning and execution of the surgeries, which will reduce the workload on the investigators.

Following approval by the BfArM and the Ethics Committee, the Company has started production of a sufficient number of study implants for the adapted target fracture. Based on the changes to the clinical trial plan, aap plans to complete the number of patients to be included under the human clinical trial in mid-2024, after which the mandatory follow-up year will begin.

All previous applications of silver-coated implants in the context of individual healing trials showed very good healing processes and no evidence of infections could be detected. These overall very good results are a positive indication for the ongoing clinical human study.

With its antibacterial silver coating technology, aap is addressing one of the greatest and yet inadequately solved challenges in traumatology: the reduction of Surgical Site Infections (SSI). Surgical site infections represent a major burden both for the patients affected and for global healthcare systems. Antibiotic-resistant bacteria pose a particular threat. In its annual report on the state of research to overcome antibiotic resistance, the WHO recently found that some of the world's most dangerous bacteria have developed resistance to known agents.[1] Moreover, according to the WHO, nearly all antibiotics currently in development work little better than existing agents. aap's innovative antibacterial silver coating technology represents an alternative solution in the fight against bacterial infections that is not based on antibiotics and therefore offers enormous market potential. As a platform technology, the technology has a broad range of applications and can be used not only in traumatology but also in other areas of orthopedics as well as in cardiology, dentistry, or medical instruments.

The conduction of the clinical study is funded by the German Federal Ministry of Education and Research ("BMBF"). The grant awarded to the company (grant numbers 13GW0313A+B, 13GW0449A+B) is part of the BMBF's field of action "Healthcare Industry in the Health Research Framework Program". According to the BMBF, projects on the topic of "Transferring medical technology solutions into patient care - proving clinical evidence without delay" are being funded. For further information, please refer to the corresponding guideline on the BMBF website: https://www.bmbf.de/foerderungen/bekanntmachung-1376.html.





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aap Implantate AG (ISIN DE0005066609) - General Standard/Regulated Market - All German Stock Exchanges -

About aap Implantate AG

aap Implantate AG is a globally active medical technology company based in Berlin, Germany. The company develops, manufactures, and markets products for traumatology. In addition to the innovative anatomical plate system LOQTEQ®, the IP-protected portfolio includes a wide range of cannulated screws. In addition, aap Implantate AG has an innovation pipeline with promising development projects such as antibacterial silver coating technology and magnesium-based implants. These technologies address critical problems in traumatology that have not yet been adequately solved. In Germany, aap Implantate AG sells its products directly to hospitals, purchasing groups and group clinics, while at international level it primarily uses a broad network of distributors in around 25 countries. In the USA, the company relies on a hybrid sales strategy through its subsidiary aap Implants Inc. This involves sales both via distribution agents and as part of partnerships with global orthopedic companies. The aap Implantate AG share is listed in the General Standard of the Frankfurt Stock Exchange (XETRA: AAQ.DE). For further information, please visit our website at www. aap.de.

The figures presented in this press release may be subject to technical rounding differences which do not affect the overall presentation.

Forward-looking statements

This release may contain forward-looking statements based on current expectations, beliefs and projections of the Management Board and currently available information. The forward-looking statements are not guarantees of future performance or results. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in aap's public reports. Forward-looking statements therefore speak only as of the date they are made. We assume no obligation to update the forward-looking statements made in this release or to conform them to future events or developments.

^[1] 2020 Antibacterial agents in clinical and preclinical development: an overview and analysis. Geneva: World Health Organization; 2021

• Sales: Q3 at EUR 3.0 million (+1 % yoy) and 9M at EUR 8.5 million (‑4 % yoy); US business back on track with significant sales increase of +45 % in Q3
• EBITDA: Q3 normalized[1] with EUR ‑0.4 million (reported: EUR ‑0.8 million; Q3/2021: EUR +20 thousand) and 9M with EUR ‑1.5 million (9M/2021: EUR +0.1 million) impacted by revenue decline (9M), sales infrastructure build-up as planned, execution of human clinical trial, work on MDR implementation and unplanned cost increases (mainly energy costs) in general inflationary environment
• Financing: Successful execution of a capital increase stabilizes financial situation; net inflow of around EUR 1.2 million
• Silver: Approval of study protocol adaptation (change of indication) to accelerate patient recruitment as well as facilitation of study conduct
• Outlook FY 2022: Revenue and EBITDA at the lower end of guidance of EUR 11.5 million to EUR 13.5 million (revenue) and EUR -2.0 million to EUR -1.1 million (EBITDA), respectively, in continued volatile market environment (war in Ukraine; COVID-19 situation as well as ongoing inflationary pressure) 

aap Implantate AG ("aap" or the "Company") was able to realize slight sales growth in the third quarter contrary to the general downward trend in the trauma sector and in a persistently volatile market environment. Thereby, the Company's sales in Q3/2022 increased by 1 % to EUR 3.0 million compared to the same period of the previous year (Q3/2021: EUR 3.0 million). In the first nine months of the current fiscal year, sales decreased by 4 % to EUR 8.5 million compared to 9M/2021 (9M/2021: EUR 8.9 million). Taking into account constant exchange rates, the changes in sales were ‑3 % (Q3) and ‑8 % (9M).

With regard to earnings, the Company recorded normalized EBITDA¹ of EUR ‑0.4 million (reported: EUR ‑0.8 million; Q3/2021: +EUR 20 thousand) in the third quarter and of EUR ‑1.5 million (9M/2021: EUR +0.1 million) in the first nine months of 2022, respectively, mainly reflecting the decline in sales (9M), the expansion of the sales infrastructure in Germany and the U.S. as planned, the execution of the clinical trial for aap's innovative antibacterial silver coating technology as well as the extensive work on processes and documents to meet the increased regulatory requirements of the new EU Medical Device Regulation (MDR). In addition, other operating income decreased, and the Company faced partly massive unplanned cost increases (e.g. procurement prices for energy and purchased inputs) from the observable increasing pressure on global supply chains and the general inflationary cost environment, e.g. as a result of the war in Ukraine.

In general, regarding the regions outside North America, the Company continues to face the existing and now also worsening pandemic COVID-19 situation, related increasing staff shortages in hospitals and also in the increasing but persistently too low mobility and the changed mobility behavior of the populations, which is reflected in lower case numbers compared to pre-COVID-19 levels. In addition, the still ongoing war in Ukraine, the observable dynamic pressure on global supply chains and the general inflationary (cost)environment are generally affecting business development.

Q3/2022 and 9M/2022 - Key financial figures

Sales Q3/2022 and 9M/2022

Looking at the individual regions, the picture in North America is very positive: the Company achieved significant sales growth of +45 % and +9 % in both the third quarter and the first nine months. This shows a clear recovery of the market in the third quarter compared to the first half of 2022. Above all, the increased average invoiced price per surgery performed was the main factor behind the increase in sales; in addition, the development of the USD/EUR exchange rate was also beneficial. Even taking into account constant exchange rates, the changes in sales were a remarkable +24 % in the third quarter or almost at the level of the previous year in a nine-month comparison.

For the sales regions outside North America, the aforementioned effects ran through almost all markets relevant to aap, albeit to varying degrees. In the EMEA region, the Company recorded a 7 % decline in sales in the third quarter, which resulted in a sales decrease of also 7 % in the first nine months of the financial year. This was mainly due to developments in markets outside the EU, which showed a lower volume of business than in the previous year. The markets within the EU showed a slightly positive development in the third quarter, although the home market of Germany was down on the previous year due to lower case numbers in clinics using aap products. By contrast, the market in South Africa, among others, developed positively in the nine-month period with significant double-digit growth, although this could only partially compensate for the development of the other submarkets in the EMEA region. Following encouraging developments in the first half of the year, the LATAM region realized a 22 % decline in sales in the third quarter, resulting in a reduction of 8 % in the nine-month period. The encouraging growth in Mexico in Q3 of 84 % could not fully compensate for the declines in the Puerto Rico and Chile markets. In addition, sales in the prior-year quarter were significantly impacted by an initial equipment order from a new customer in Colombia. In the APAC region, aap recorded a sales decline of 27 % in the third quarter and 42 % in the nine-month period compared with the respective comparative period of the previous year, mainly because of a reduced volume of business due to a sharp drop in the price situation with the Chinese distribution partner.

EBITDA Q3/2022 and 9M/2022

Regarding earnings, comparable EBITDA (normalized¹) decreased year-on-year to EUR ‑0.4 million for Q3 2022 (reported: EUR ‑0.8 million; Q3/2021: EUR +20 thousand) and to EUR -1.5 million for the first nine months of 2022 (9M/2021: EUR +0.1 million). The following developments were particularly decisive in this regard:

• Revenue level realized in the first nine months below the Company's original planning mainly due to the aforementioned effects from the COVID-19 pandemic, the war in Ukraine and the general inflationary environment; Q3/2022 revenue level in line with the revised expectation range,
• Reduced gross margin in absolute terms due to decline in sales (9M) with stable high gross margin (in %); gross margin normalized¹ in Q3/2022 at around prior-year level,
• Planned increase in personnel expenses mainly due to the expansion of the sales infrastructure in Germany and the USA to drive the planned sales growth, as well as in the areas of quality management, regulatory and clinical affairs to ensure, as planned, the achievement of certification in accordance with the new EU Medical Device Regulation (MDR 2017/745/EU) within the transition period until 2024,
• Increased cost level (excluding non-recurring effects) in other costs in the operating trauma business incl. central administration functions mainly from unplanned cost increases for energy (here: more than doubling of electricity costs) and purchased inputs, increased costs for insurance, and an increased cost level for sales-related costs of distribution (commissions, freight costs) because of the sales expansion in North America,
• Cost increase from the conduct of the human clinical trial of aap's innovative silver coating technology with the first surgeries performed and the inclusion of further hospitals participating in the trial in the first nine months of 2022,
• Lower non-recurring effects that had an earnings-enhancing impact on EBITDA in both comparative periods (mainly from the recognition of income from COVID 19 support programs and from the reversal of provisions and accrued liabilities).

Excluding non-recurring items, comparable Recurring EBITDA (normalized¹) decreased to EUR ‑0.3 million (reported: EUR ‑0.8 million; Q3/2021: EUR +4 thousand) and to EUR ‑1.7 million (9M/2021: EUR ‑0.4 million) in the third quarter and first nine months of 2022, respectively.

Financing

With a view to stabilizing aap's financial position, the Company successfully executed a capital increase of around 10 % in September/October. A total of around 0.6 million new shares were issued excluding subscription rights by way of a private placement against cash contributions at a subscription price of EUR 1.99, so that the Company received a net inflow of around EUR 1.2 million after deduction of consultancy fees and other costs. The new shares were subscribed by a strategic investor from Asia, who already has business activities in the field of orthopedics. As of September 30, 2022, the Company reported cash and cash equivalents of approximately EUR 1.0 million.

Silver coating technology

Regarding aap's innovative antibacterial silver coating technology, an application for an amendment to the clinical trial plan was submitted following restrained patient recruitment in the first nine months of 2022. This was approved by the relevant authorities and is currently being implemented. Thus, aap expects that the necessary number of patients will be reached at the beginning of 2024 and that the mandatory follow-up year will then begin. In addition, aap is still in talks about possible co-financing of the human clinical trial and further cooperation opportunities.

Outlook

Not included in the following forecast statements:

• A significant tightening of sanctions against Russia or a change in the interpretation of existing sanctions,
• An expansion of the conflict situation outside Ukraine,
• Further additional significant increases in energy and raw material prices above the currently foreseeable level or restrictions on the Company's ability to operate because of partial or complete cessation of gas and/or energy supplies due, among other things, to the war in Ukraine or related sanctions,
• Further virus mutations (COVID 19 pandemic) leading to a significant worsening of the infection situation with corresponding lockdown measures or other restrictions in the sales regions relevant for aap or resulting in production stoppages at the Berlin site or at aap's service providers/suppliers.

Based on Q3 2022 results, a continued volatile market environment due to the war in Ukraine and a re-aggravating pandemic COVID-19 situation, and including consideration of ongoing inflationary pressures, the Company now expects revenue and EBITDA at the lower end of the guidance range of EUR 11.5 million to EUR 13.5 million (revenue) and EUR -2.0 million to EUR -1.1 million (EBITDA), respectively.

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aap Implantate AG (ISIN DE0005066609) - General Standard/Regulated Market - All German Stock Exchanges -
 

About aap Implantate AG

aap Implantate AG is a globally active medical technology company headquartered in Berlin, Germany. The company develops, manufactures and markets products for traumatology. In addition to the innovative anatomical plate system LOQTEQ®, the IP-protected portfolio includes a wide range of cannulated screws. In addition, aap Implantate AG has an innovation pipeline with promising development projects such as antibacterial silver coating technology and magnesium-based implants. These technologies address critical problems in traumatology that have not yet been adequately solved. In Germany, aap Implantate AG sells its products directly to hospitals, purchasing groups and group clinics, while at international level it primarily uses a broad network of distributors in around 25 countries. In the USA, the company relies on a hybrid sales strategy through its subsidiary aap Implants Inc. This involves sales both via distribution agents and within the framework of partnerships with global orthopedic companies. The aap Implantate AG share is listed in the General Standard of the Frankfurt Stock Exchange (XETRA: AAQ.DE). For further information, please visit our website at www.aap.de.

The figures presented in this press release may be subject to technical rounding differences which do not affect the overall presentation.

Forward-looking statements

This release may contain forward-looking statements based on current expectations, beliefs and projections of the Management Board and currently available information. The forward-looking statements are not guarantees of future performance or results. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in aap's public reports. Forward-looking statements therefore speak only as of the date they are made. We assume no obligation to update the forward-looking statements made in this release or to conform them to future events or developments.

 

^[1] Q3 EBITDA normalized: Smoothing of a valuation effect from the second quarter in work in progress which neutralized this effect again in the third quarter; pure quarterly shift and therefore no impact on the 9M figures.

In general, with regard to the regions outside North America, the Company continues to face the existing and now worsening pandemic COVID-19 situation, related bottlenecks in hospitals and also the increasing but persistently too low mobility and the changed mobility behavior of the population, which is reflected in lower case numbers compared to pre-COVID-19 levels. In addition, the still ongoing war in Ukraine, the observable dynamic pressure on global supply chains and the general inflationary (cost) environment are generally affecting business development. In the North America region, on the other hand, the third quarter showed a significant recovery of the market compared to the first half of 2022 and a very dynamic development again overall: thus, starting from a significant growth of +45 % in the third quarter, the company was able to realize an increase in sales of +9 % in the nine-month period as well (constant exchange rates: +24 % in Q3 or almost at the previous year's level in the nine-month comparison).

Sales Q3/2022 and 9M/2022

With regard to the result, the Executive Board expects EBITDA between EUR ‑0.8 million and EUR ‑1.0 million (Q3/2021: EUR +20 thousand) for the third quarter and between EUR ‑1.5 million and EUR ‑1.7 million (9M/2021: EUR +0.1 million) for the first nine months of 2022, mainly reflecting the lower operating performance (sales decline and inventory reduction), investments in the expansion of the sales infrastructure, the execution of the clinical trial for the silver coating technology, and unplanned cost increases (e.g. procurement prices for energy and purchased services and inputs) due to the observable increasing pressure on global supply chains and the generally inflationary cost environment.

The figures contained in this press release are preliminary as of September 30, 2022, and are subject to change until final publication. aap plans to announce final results for the third quarter and first nine months of 2022 in a press release on November 14, 2022.




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aap Implantate AG (ISIN DE0005066609) - General Standard/Regulated Market - All German Stock Exchanges -

About aap Implantate AG

aap Implantate AG is a globally active medical technology company based in Berlin, Germany. The company develops, manufactures and markets products for traumatology. In addition to the innovative anatomical plate system LOQTEQ®, the IP-protected portfolio includes a wide range of cannulated screws. In addition, aap Implantate AG has an innovation pipeline with promising development projects such as antibacterial silver coating technology and magnesium-based implants. These technologies address critical problems in traumatology that have not yet been adequately solved. In Germany, aap Implantate AG sells its products directly to hospitals, purchasing groups and group clinics, while at international level it primarily uses a broad network of distributors in around 25 countries. In the USA, the company relies on a hybrid sales strategy through its subsidiary aap Implants Inc. This involves sales both via distribution agents and as part of partnerships with global orthopedic companies. The aap Implantate AG share is listed in the General Standard of the Frankfurt Stock Exchange (XETRA: AAQ.DE). For further information, please visit our website at www. aap.de.

The figures presented in this press release may be subject to technical rounding differences which do not affect the overall presentation.

Forward-looking statements
This release may contain forward-looking statements based on current expectations, beliefs and projections of the Management Board and currently available information. The forward-looking statements are not guarantees of future performance or results. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in aap's public reports. Forward-looking statements therefore speak only as of the date they are made. We assume no obligation to update the forward-looking statements made in this release or to conform them to future events or developments.



Contact:
If you have any questions, please contact:
aap Implantate AG; Marek Hahn; Member of the Management Board/ CFO; Lorenzweg 5; 12099 Berlin
Tel. : +49 (0)30 75019 - 134; Fax: +49 (0)30 75019 - 290; Email: m.hahn@aap.de

• Sales: Q2 at EUR 2.7 million (‑17 % yoy) and H1 at EUR 5.6 million (‑7 % yoy); growth trend intact with LTM sales up 7 %[1]
• EBITDA: Q2 at EUR ‑0.2 million (Q2/2021: EUR +0.3 million) and H1 at EUR ‑0.7 million (H1/2021: EUR +0.1 million) impacted by sales decline, planned build-up of sales infrastructure, conduction of human clinical trial and work on MDR implementation
• Silver: First sugeries performed as part of human clinical trial for innovative antibacterial silver coating technology
• H2 outlook: revenue increase expected compared to H1 with FY 2022 sales level of EUR 11.5 million to EUR 13.5 million and EBITDA (including full project costs for further execution of human clinical trial) of EUR ‑2.0 million to EUR ‑1.1 million

 
aap Implantate AG ("aap" or the "Company") operated in a challenging macroeconomic environment in both the second quarter and the first half of the year, which had a corresponding impact on business development and thus did not lead to the achievement of the targets set by the Company for the first half of 2022. In this context, the Company continues to face the existing pandemic COVID-19 situation, related bottlenecks in hospitals and also the increasing but persistently too low mobility and the changed mobility behavior of the population, which is reflected in lower case numbers compared to pre-COVID-19 levels. In addition, the still ongoing war in Ukraine, the observable dynamic pressure on global supply chains and the general inflationary environment are generally affecting business development, which is reflected, for example, in noticeable delayed execution of new customer contracts despite a well-filled pipeline or in the significantly reduced willingness of aap's existing distribution partners to invest in market expansion.

The Company's sales in the second quarter of 2022 decreased by 17 % to EUR 2.7 million compared to the same period of the previous year (Q2/2021: EUR 3.3 million). In the first six months of the current fiscal year, sales decreased by 7 % to EUR 5.6 million compared to the first half of 2021 (H1/2021: EUR 6.0 million). Taking constant exchange rates into account, the changes in sales were ‑21 % (Q2) and ‑10 % (H1). Looking at the results, the Company recorded EBITDA of ‑0.2 million EUR (Q2/2021: +0.3 million EUR) in the second quarter and of ‑0.7 million EUR (H1/2021: +0.1 million EUR) in the first six months of 2022, which mainly reflects the decline in sales, the expansion of the sales infrastructure in Germany and the U.S. as planned, the conduction of the clinical trial for aap's innovative antibacterial silver coating technology as well as the extensive work on processes and documents to meet the increased regulatory requirements of the new EU Medical Device Regulation (MDR).

Q2/2022 and H1/2022 - Key financial figures

Sales Q2/2022 and H1/2022

With regard to the individual regions, the aforementioned effects were felt in almost all markets relevant for aap, albeit to varying degrees. The development in the LATAM region is pleasing, where aap achieved growth of +38 % and +3 % in both the second quarter and the first half of 2022. Here, recovery tendencies are evident in markets such as Mexico and Brazil, but a new sales partner in Venezuela also contributed to the positive development in the LATAM region. In the EMEA region, the second quarter in particular was characterized by a significant decline of 27 %, resulting in a 6 % drop in sales in the first half of the year. Developments in the Spanish, Bosnian and Israeli markets were primarily responsible for more than 2/3 of the negative deviations. In contrast, the market in South Africa developed positively, with significant growth of +65 % in the second quarter and +24 % in the first six months, although this could only partially compensate for the development of the other submarkets in the EMEA region. In the APAC region, aap recorded a 62 % decline in sales in the second quarter and a 50 % decline in the first half of the year compared with the respective comparative period of the previous year, mainly as a result of a reduced volume of business with the Chinese sales partner.

The picture in the USA is divided: While at first glance there is a decline in sales for the region in the second quarter (‑13 %) and in the first six months (‑5 %), a non-recurring effect in the amount of EUR 0.2 million must be excluded from sales in the second quarter of 2021. This one-off effect in the previous year resulted from the termination of the contractual relationship with a long-standing distribution partner. Excluding this non-recurring effect results in growth of +14 % for the second quarter and +10 % for the first half of the year. In addition to the development of the USD/EUR exchange rate, the increase in the average invoiced price per surgery performed was also the background to the rise in sales.

Overall, the Management Board remains optimistic about the Company's further development and sees the sales development of the last 12 months compared to the corresponding period of the previous year with LTM sales growth of 7 % as confirming the fundamental orientation of aap.

EBITDA Q2/2022 and H1/2022

With regard to earnings, EBITDA decreased year-on-year to EUR -0.2 million for the second quarter of 2022 (Q2/2021: EUR +0.3 million) and to EUR -0.7 million for the first six months of 2022 (H1/2021: EUR +0.1 million). The following developments were particularly decisive in this regard:

• Sales level realized below the Company's planning in the second quarter and first half of the year mainly due to the aforementioned effects from the COVID-19 pandemic, the war in Ukraine and the general inflationary environment,
• Stable high gross margin (in %) with increase of gross margin[2] in absolute figures (excluding non-recurring effects; Q2: approx. +43 TEUR, H1: approx. +98 TEUR),
• Planned increase in personnel expenses mainly due to the expansion of the sales infrastructure in Germany and the USA to implement the planned sales growth, as well as in the areas of quality management, regulatory and clinical affairs to ensure the achievement of certification in accordance with the new EU Medical Device Regulation (MDR 2017/745/EU) within the transition period until 2024,
• Slight increase in cost level (excluding non-recurring effects) in other costs in the operating trauma business incl. central administration functions,
• Cost increase from the conduct of the human clinical trial of aap's innovative silver coating technology with the first surgeries performed and the inclusion of further hospitals participating in the trial in the first half of 2022,
• Lower non-recurring effects that had an earnings-enhancing impact on EBITDA in both comparative periods (mainly from the recognition of income from COVID 19 support programs and from the reversal of provisions and accrued liabilities).

Excluding the one-off effects, recurring EBITDA decreased further in Q2 and H1/2022 to EUR -0.5 million (Q2/2021: EUR -0.1 million) and EUR ‑0.9 million (H1/2022: EUR ‑0.4 million), respectively.

Silver coating technology

With regard to aap's innovative antibacterial silver coating technology, the first human clinical trial surgeries were performed in the first half of 2022 and further trial centers were initiated. In addition, the Company carried out promising test coatings for a leading medical technology company in the reporting period. The aim is to demonstrate the possible application of silver coating technology to non-aap products and thus to create the preconditions for potential joint development projects. In addition, aap is still in talks about possible co-financing of the human clinical trial and further cooperation opportunities.

Outlook

Not included in the following forecast statements:

• A significant tightening of sanctions against Russia or a change in the interpretation of existing sanctions,
• An expansion of the conflict situation outside Ukraine,
• Further additional significant increases in energy and raw material prices above the currently foreseeable level or restrictions on the Company's ability to operate as a result of partial or complete cessation of gas and/or energy supplies due, among other things, to the war in Ukraine or related sanctions,
• Further virus mutations (COVID 19 pandemic) leading to a significant worsening of the infection situation with corresponding lockdown measures or other restrictions in the sales regions relevant for aap or resulting in production stoppages at the Berlin site or at aap's service providers/suppliers.

In the second half of 2022, in addition to stabilizing aap's financial position, the focus will be in particular on the further implementation of the human clinical trial for the innovative antibacterial silver coating technology and the further revision of processes and documents to meet the increased regulatory requirements of the new EU Medical Devices Regulation MDR. On the revenue side, the Executive Board expects an increase for the second half of 2022 compared to the first six months and anticipates a revenue level of EUR 11.5 million to EUR 13.5 million for fiscal year 2022. For EBITDA in fiscal year 2022, the Executive Board expects a value of EUR ‑2.0 million to EUR ‑1.1 million, taking into account the full project costs for the further implementation of the human clinical trial for the antibacterial silver coating technology.





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aap Implantate AG (ISIN DE0005066609) - General Standard/Regulated Market - All German Stock Exchanges -
 

About aap Implantate AG

aap Implantate AG is a globally active medical technology company based in Berlin, Germany. The company develops, manufactures and markets products for traumatology. In addition to the innovative anatomical plate system LOQTEQ®, the IP-protected portfolio includes a wide range of cannulated screws. In addition, aap Implantate AG has an innovation pipeline with promising development projects such as antibacterial silver coating technology and magnesium-based implants. These technologies address critical problems in traumatology that have not yet been adequately solved. In Germany, aap Implantate AG sells its products directly to hospitals, purchasing groups and group clinics, while at international level it primarily uses a broad network of distributors in around 25 countries. In the USA, the company relies on a hybrid sales strategy through its subsidiary aap Implants Inc. This involves sales both via distribution agents and as part of partnerships with global orthopedic companies. The aap Implantate AG share is listed in the General Standard of the Frankfurt Stock Exchange (XETRA: AAQ.DE). For further information, please visit our website at www. aap.de.

The figures presented in this press release may be subject to technical rounding differences which do not affect the overall presentation.

Forward-looking statements

This release may contain forward-looking statements based on current expectations, beliefs and projections of the Executive Board and currently available information. The forward-looking statements are not guarantees of future performance or results. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in aap's public reports. Forward-looking statements therefore speak only as of the date they are made. We assume no obligation to update the forward-looking statements made in this release or to conform them to future events or developments.

^[1] LTM revenue increase: revenue for the last 12 months (01.07.2021 - 30.06.2022) compared to the corresponding period of the previous year (01.07.2020 - 30.06.2021)

^[2] Gross margin = sales revenue +/- change in inventories of finished goods and work in progress - cost of materials / cost of purchased services.

• Sales: EUR 2.9 million (+6 % yoy); EMEA (+19 % yoy) and North America (+5 % yoy) as main growth drivers
• EBITDA: EUR -0.5 million (Q1/2021: EUR -0.2 million) impacted by planned build-up of sales infrastructure and conduction of human clinical study
• Silver: First surgeries performed as part of human clinical study for innovative silver antibacterial coating technology

aap Implantate AG ("aap" or the "Company") started the financial year 2022 in a challenging macroeconomic environment with solid sales growth and EBITDA in line with expectations. In this context, aap increased sales by 6 % compared to the same period of the previous year to EUR 2.9 million (Q1/2021: EUR 2.7 million). In terms of earnings, the Company recorded EBITDA of EUR -0.5 million (Q1/2021: EUR -0.2 million), which mainly reflects the planned expansion of the sales infrastructure in Germany and the U.S. and the conduction of the human clinical study for aap's innovative antibacterial silver coating technology.

Q1/2022 - Key financial figures

Sales

Overall, the picture is ambivalent when looking at the individual regions: the pleasingly significant growth in the EMEA region (= Europe, Middle East, Africa; +19 %) is mainly based on a revival of business with existing customers in Southeastern Europe and the Middle East. In contrast, the recovery to pre-COVID-19 levels in the individual markets of importance to the Company, Spain and Germany, is taking notably longer than expected and planned, which is reflected above all in a continued lower case volume than before the onset of the COVID-19 pandemic.

In North America, aap remains on a growth track and was able to increase sales (+5 %). After a very slow start in January and the first half of February due to COVID-19 effects, March saw the highest ever number of surgeries performed in a single month.

In Latin America (-26 %) and Asia-Pacific (-34 %), the ongoing impact of the COVID-19 pandemic is clearly reflected. Rising infection rates and zero COVID19 guidelines implemented in some regions impacted business performance in the first months of the fiscal year, in some cases severely. In addition, new regulatory and procurement guidelines that came into force at short notice, particularly in China, are making further expansion of the business more difficult.

EBITDA

• Sales level realized in the first quarter below the Company's planning mainly due to the aforementioned effects from the COVID-19 pandemic and the war in Ukraine,
• Stable high gross margin (in %) with increase in gross margin^[1] in absolute figures (approx. +EUR 100 thousand) in connection with realized sales growth in Q1/2022,
• Planned increase in personnel expenses mainly due to the expansion of the sales infrastructure in Germany and the USA to implement the planned sales growth, as well as in the areas of quality management, regulatory and clinical affairs to ensure certification in accordance with the new EU Medical Device Regulation (MDR 2017/745/EU) within the transitional period until 2024 as planned
• Stable cost level (excluding non-recurring effects) in other costs in the operating trauma business incl. central administration functions,
• Cost increase from conducting the human clinical study of aap's innovative silver coating technology with the first surgeries performed and the inclusion of further clinics participating in the study in the first quarter of 2022,
• Lower non-recurring effects that had an earnings-enhancing impact on EBITDA in the first quarter of 2021 (mainly from the recognition of income from COVID-19 support programs).

Excluding the non-recurring effects, recurring EBITDA decreased to EUR -0.4 million in the first quarter of 2022 (Q1/2021: EUR -0.2 million).

Silver coating technology

With regard to aap's innovative silver coating technology, the first surgeries in the human clinical study for its innovative antibacterial silver coating technology were performed in the first quarter of 2022. The surgeries took place at the University Hospital Regensburg and went according to plan. In addition, the Company was able to include further clinics in the study in the first quarter, so that further patient recruitment can be expected in the coming months. aap had initiated the clinical human study in December last year, which is an essential step towards the planned market approval (CE) of the innovative technology.

Outlook

Despite the currently observable dynamic pressure on global supply chains, the uncertainty regarding the COVID-19 pandemic as previously described, the general inflationary environment and taking into account the first quarter results, the Management Board continues for the time being to adhere to the communicated forecast values for sales and EBITDA for the financial year 2022. Even under the current market adversities, the Company is recording a growing number of new potential distribution channels and aap's long-standing distribution partners are confident that they will return to pre-pandemic levels in the foreseeable future. In this context, aap's distribution partners and the Company anticipate a renewed increase in case numbers in the trauma segment due to observable declines in COVID-19 infection figures, a resurgence in global mobility as a result of increased return to work, increased sports and leisure activities, and a resurgence in numbers in the tourism industry.



^[1] Gross margin = sales revenue +/- change in inventories of finished goods and work in progress - cost of materials / cost of purchased services
 

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aap Implantate AG (ISIN DE0005066609) - General Standard/Regulated Market - All German Stock Exchanges -

About aap Implantate AG
aap Implantate AG is a globally active medical technology company based in Berlin, Germany. The company develops, manufactures and markets products for traumatology. In addition to the innovative LOQTEQ® anatomical plate system, the IP-protected portfolio includes a wide range of cannulated screws. In addition, aap Implantate AG has an innovation pipeline with promising development projects such as antibacterial silver coating technology and magnesium-based implants. These technologies address critical problems in traumatology that have not yet been adequately solved. In Germany, aap Implantate AG sells its products directly to hospitals, purchasing groups and group clinics, while at international level it primarily uses a broad network of distributors in around 25 countries. In the USA, the company relies on a hybrid sales strategy through its subsidiary aap Implants Inc. This involves sales both via distribution agents and as part of partnerships with global orthopedic companies. The aap Implantate AG share is listed in the General Standard of the Frankfurt Stock Exchange (XETRA: AAQ.DE). For further information, please visit our website at https://www.aap.de/

The figures presented in this press release may be subject to technical rounding differences which do not affect the overall presentation.

Forward-looking statements
This release may contain forward-looking statements based on current expectations, beliefs and projections of the Management Board and currently available information. The forward-looking statements are not guarantees of future performance or results. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in aap's public reports. Forward-looking statements therefore speak only as of the date they are made. We assume no obligation to update the forward-looking statements made in this release or to conform them to future events or developments.

In addition, aap reports that its antibacterial silver coating technology is effective against the particularly critical antibiotic-resistant hospital germ methicillin-resistant Staphylococcus aureus (MRSA), which was responsible for 100,000 deaths worldwide in 2019 alone, according to a study published in the medical journal The Lancet.^[1] Last year, for example, aap was able to demonstrate the effectiveness of its technology against the antibiotic-resistant bacterium MRSA as part of an extensive series of in vitro tests.^[2] MRSA is one of the pathogens most frequently responsible for resistance problems. The results of the study on the threat posed by antibiotic-resistant germs, which was written by an international group of experts, were published in the scientific journal "The Lancet". In addition, n-tv had also recently evaluated the results of the study.^[3] According to the study, more than 1.2 million people worldwide died directly from an infection with an antibiotic-resistant pathogen in 2019. In addition, such infections were at least partly responsible for almost five million further deaths. This makes antibiotic resistance one of the leading causes of death in the world. The results of the study reveal the extent of the problem caused by multi-resistant germs and at the same time show the acute need for action. This is precisely the starting point for aap's innovative antibacterial silver coating technology. The disruptive silver coating developed by the company represents an alternative solution in the fight against bacterial infections that is not based on antibiotics and therefore offers enormous market potential. As a platform technology, the technology has a broad range of applications and can be used not only in traumatology but also in other areas of orthopedics as well as in cardiology, dentistry or medical instruments.

Finally, in connection with the information contained in this press release, we may also refer to an interview with Prof. Dr. Dr. Volker Alt, Director of the Clinic for Trauma Surgery at the University Hospital Regensburg and an expert in the field of antimicrobial coatings, in which he talks about implant-related infections in connection with antibiotic resistance and also makes a clear case for the need for antibacterial coatings on implants that are not based on antibiotics (https://www.youtube.com/watch?v=q1UluZIkrMo).





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aap Implantate AG (ISIN DE0005066609) - General Standard/Regulated Market - All German Stock Exchanges -

About aap Implantate AG
aap Implantate AG is a globally active medical technology company headquartered in Berlin, Germany. The company develops, manufactures and markets products for traumatology. In addition to the innovative anatomical plate system LOQTEQ(R), the IP-protected portfolio includes a wide range of cannulated screws. In addition, aap Implantate AG has an innovation pipeline with promising development projects such as antibacterial silver coating technology and magnesium-based implants. These technologies address critical problems in traumatology that have not yet been adequately solved. In Germany, aap Implantate AG sells its products directly to hospitals, purchasing groups and group clinics, while at international level it primarily uses a broad network of distributors in around 25 countries. In the USA, the company relies on a hybrid sales strategy through its subsidiary aap Implants Inc. This involves sales both via distribution agents and as part of partnerships with global orthopedic companies. The aap Implantate AG share is listed in the General Standard of the Frankfurt Stock Exchange (XETRA: AAQ.DE). For further information, please visit our website at www.aap.de.

Forward-looking statements
This release may contain forward-looking statements based on current expectations, beliefs and projections of the Management Board and currently available information. The forward-looking statements are not guarantees of future performance or results. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in aap's public reports. Forward-looking statements therefore speak only as of the date they are made. We assume no obligation to update the forward-looking statements made in this release or to conform them to future events or developments.

^[1] Global burden of bacterial antimicrobial resistance in 2019: a systematic analysis; Antimicrobial Resistance Collaborators; Published: January 19, 2022; DOI: https://doi.org/10.1016/S0140-6736(21)02724-0
^[2] log4 reduction after three days of pre-incubation (in vitro) and log3 reduction after seven days of pre-incubation (in vitro).
^[3] https://www.n-tv.de/wissen/Antibiotika-Resistenz-fordert-1-2-Millionen-Opfer-article23069318.html

- Sales: EUR 12.2 million (+30% yoy) - CER^[1]: +32% yoy; all markets with significant double-digit growth rates

- EBITDA: EUR -0.8 million (+84% yoy); operating cash flow +33% yoy

- Silver: Start of human clinical study in December 2021 - already promising clinical data from individual healing trials beforehand

- Successful refinancing, in particular via shareholder loans and capital increase with significant oversubscription

- After 2 years, unqualified audit opinion again for annual financial statements 2021

- Outlook FY/2022: Sales between EUR 14.0 and 16.0 million (+15% to +31%) as well as positive EBITDA and almost balanced free cash flow planned for first time for entire Company (excl. costs silver, esp. human clinical study); EBITDA entire Company (incl. costs silver) of EUR -1.7 to -0.5 million

aap Implantate AG ("aap" or the "Company") succeeded in turning around sales and earnings in a challenging financial year 2021. Despite the continuing partly massive impact of the COVID-19 pandemic, aap recorded significant sales growth (+30%) to EUR 12.2 million last year (FY/2020: EUR 9.3 million) and consequently achieved a figure within the forecast range of EUR 12.0 to 14.0 million. EBITDA improved substantially (+84%) to EUR -0.8 million (FY/2020: EUR -4.8 million) and was thus at the upper end of the guidance of EUR -2.0 million to EUR -0.7 million raised in September 2021. If one additionally considers the positive development of operating cash flow (+33%), the trend towards a black zero is clearly recognizable.

 

FY/2021 - Key financial figures

Looking at the individual regions, it can be seen that aap was able to realize significant double-digit sales increases in all major markets in financial year 2021. The growth in the EMEA region (= Europe, Middle East, Africa; +26%) is based on a revival of business in the Middle East, new customer acquisition e.g. in Egypt, and a significant recovery of the South African market, where the pre-COVID-19 level has already almost been reached again. On the other hand, aap succeeded in stabilizing sales in its largest single market Spain, which had to struggle noticeably with the adversities of the COVID-19 pandemic. In addition, the Company recorded sales growth in its home market Germany despite the relatively late end of the lockdown in June and was additionally again able to conclude contracts with all purchasing associations, providing a good basis for financial year 2022.
 

In North America, aap remains on a growth track and was able to significantly increase sales (+21%). Decisive for the growth momentum were in particular the contracts concluded with US-wide purchasing associations and networks, which give aap access to a large number of clinics and surgical operation centers and thus also create a promising basis for the months ahead.
 

In Latin America (+90%), aap won new customers in Colombia and Ecuador and also benefited from a noticeable recovery of business in Brazil, Mexico and Puerto Rico. Furthermore, sales increased in the Asia-Pacific region (+20%), where the Company was able to reactivate its business in China, among other things.

EBITDA

With regard to earnings, aap was able to significantly improve EBITDA in financial year 2021. The background to this development is, in addition to the sales growth realized in financial year 2021 and an associated increase in gross margin^[2] in absolute terms (EUR +2.9 million) as a key driver, also a reduced cost level. The positive cost development results on the one hand from the implemented restructuring measures, which are reflected in declining other costs and almost stable personnel expenses, and on the other hand from a significant decrease in one-time effects, which in financial year 2020 were still largely characterized by the restructuring and refinancing as well as the revision of the quality management system. In addition, EBITDA in financial year 2021 were positively impacted by one-time effects from, among other things, the termination of a contract with a former distributor and an increase in other operating income (mainly income from the COVID-19 bridging assistance program III and III+). The improvement in EBITDA thus again visibly reflects the successes realized as part of the restructuring, which can be summarized as follows:
 

- Significant increase in gross margin in absolute terms due to profitable sales growth as key driver of earnings improvement

- Stabilization of personnel expenses at around prior-year level (non-significant increase of +3% vs. FY/2020)

- Declining trend in other costs (-8%) with significantly reduced non-recurring expenses

Excluding one-time effects, recurring EBITDA also improved significantly by +65% to EUR -1.2 million in financial year 2021 (FY/2020: EUR -3.4 million). Overall, this reflects the targeted development: focus on established markets with higher profit margins and sustainable streamlining of the cost structure to improve operating performance. Looking at the development of the pure operating trauma business^[3], aap was additionally able to generate a positive result (EBITDA >EUR 1.0 million) in financial year 2021 for the first time. This is again a confirmation for the implemented restructuring and transformation measures, but also an incentive to build up a sustainably profitable trauma business with further growing sales.
 

Cash flow and balance sheet

Based on a strong improvement in operating profit, operating cash flow also improved significantly by +33% to EUR -2.5 million. The improvement would have been even more pronounced but was reduced due to extremely strong monthly sales in December, the start of the human clinical study in December and the build-up of inventories for the further planned expansion of sales in working capital. With inflows from investing activities of EUR 0.2 million (mainly from the sale of machinery and a plot of land) and from financing activities of EUR 3.5 million (mainly influenced by the successful capital increase), aap had a liquidity balance of EUR 2.1 million at the end of the year.
 

Looking at the balance sheet, the balance sheet total increased to EUR 23.0 million (+16%) and was primarily characterized by the increase in rights of use (EUR +1.5 million), the reporting date-related increase in trade receivables (EUR +1.3 million) and the increase in cash and cash equivalents (EUR +1.2 million). On the liabilities side, current and non-current liabilities increased by EUR 0.8 million, while equity rose by +24% to EUR 12.8 million due to the negative result for the period and the effects of the capital increase. Based on this, the Company shows a solid equity ratio of 56% (+4 PP) as of 31 December 2021.
 

Overall, the turnaround can also be clearly seen here: A healthy balance sheet structure as well as the focus on financing the sales growth of an operationally sustainable basic structure and the promising development projects, whereby the trend towards a black zero is also clearly evident here.
 

Outlook

In financial year 2022, aap intends to grow further in terms of sales and earnings and to press ahead with the human clinical study for its innovative antibacterial silver coating technology that started in December 2021. In addition, a key focus will be on implementing activities as planned to achieve certification under the new EU Medical Device Regulation (MDR 2017/745/EU) within the transition period until 2024.
 

Based on the successfully completed capital increase, a significant portion of the net proceeds raised shall be used to finance the planned sales growth and the execution of the human clinical study for the antibacterial silver coating technology. In order to accelerate further sales growth, extensive investments have already been made in sales structures and teams, particularly in North America and Germany. Overall, all markets shall contribute to the planned sales growth, with a continued focus on North America.
 

The Management Board continues to monitor and assess very closely the global impact of the COVID-19 pandemic and the conflict between Russia and Ukraine on aap's business activities and financial results.
 

Not included in the following forecast statements are:

- A significant tightening of sanctions against Russia or a change in the interpretation of existing sanctions

- An expansion of the conflict situation outside Ukraine

- An additional significant increase in energy and raw material prices due, among other things, to the war in Ukraine or as a result of the associated sanctions

- Further virus mutations (COVID-19 pandemic) leading to a significant deterioration in the infection situation with corresponding lockdown measures or other restrictions in the sales regions relevant to aap or resulting in production stoppages at the Berlin site or at aap's service providers/suppliers

Based on the good developments in financial year 2021 and the investments already made to finance growth, as well as taking into account the recent renewed sharp increase in COVID-19 incidence figures worldwide and certain expected negative macroeconomic effects of the conflict between Russia and Ukraine, the Management Board expects sales between EUR 14.0 and 16.0 million for financial year 2022. In this context, the Management assumes a similar distribution of sales over the individual quarters as in the previous year. With regard to earnings, the Management Board expects EBITDA to be between EUR -1.7 and -0.5 million (incl. costs for the silver coating technology and particularly the human clinical study) in financial year 2022 based on the planned sales growth and further efficiency improvements to be realized. Assuming budgetary development in the current financial year, the Management aims to achieve positive EBITDA and an almost balanced free cash flow for the first time for the entire Company, excluding the costs for the silver coating technology and particularly the human clinical study. After deducting the remaining financing expenses and the costs of the human clinical study, on the other hand, aap will still report a negative cash flow.
 

The Management Board's overriding and long-term goal is to generate a sustainable positive result and thus transform aap into a financially sound and independent growth company.




^[1] CER = Constant Exchange Rates.
^[2] Gross margin = Sales revenue +/- change in inventories of finished goods and work in progress - cost of materials / cost of purchased services.
^[3] aap Group excluding development costs for silver coating and resorbable magnesium implant technologies, non-recurring one-time effects and non-allocable central costs.

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aap Implantate AG (ISIN DE0005066609) - General Standard/Regulated Market - All German stock markets -

About aap Implantate AG
aap Implantate AG is a globally active medical technology company based in Berlin, Germany. The Company develops, manufactures and markets products for trauma. The IP-protected portfolio includes besides the innovative anatomical plating system LOQTEQ(R) a wide range of cannulated screws. In addition, aap Implantate AG has an innovation pipeline with promising development projects such as the antibacterial silver coating technology and magnesium-based implants. These technologies address critical and unmet needs in trauma. In Germany, aap Implantate AG sells its products directly to hospitals, purchasing groups, and hospital groups, while at international level it primarily uses a broad network of distributors in around 25 countries. In the US the Company pursues a hybrid distribution strategy with its subsidiary aap Implants Inc. Distribution is carried out both through distribution agents and partnerships with global orthopedic companies. aap Implantate AG's stock is listed in the General Standard segment of Frankfurt Stock Exchange (XETRA: AAQ.DE). For more information, please visit our website at www.aap.de.

The figures presented in this press release may be subject to technical rounding differences which do not affect the overall presentation.

Forward-looking statement
This release may contain forward-looking statements based on current experience, estimates and projections of the management board and currently available information. They are not guarantees of future performance. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. Many factors could cause the actual results, performance or achievements of aap to be materially different from those that may be expressed or implied by such statements. These factors include those discussed in aap's public reports. Forward-looking statements therefore speak only as of the date they are made. aap does not assume any obligation to update the forward-looking statements contained in this release or to conform them to future events or developments.


For further information please contact: aap Implantate AG; Fabian Franke; Head of Investor Relations; Lorenzweg 5; 12099 Berlin, Germany; Phone: +49 (0)30 75019 - 134; Fax: +49 (0)30 75019 - 290; Email: f.franke@aap.de

- Sales +30% (FY/2021) to EUR 12.2 million and +34% (Q4) to EUR 3.2 million (CER^[1]: +32% (FY/2021) and +38% (Q4))

- Significant double-digit growth rates in all regions in FY/2021: LATAM (+90%), EMEA (+26%), North America (+21%) and APAC (+20%)

- Extensive investments in sales structures and teams, particularly in North America and Germany, shall accelerate further sales growth

- Outlook FY/2022: Sales between EUR 14.0 and 16.0 million and EBITDA of EUR -1.7 to -0.5 million

- Positive EBITDA and nearly balanced free cash flow planned for first time for entire Company excl. costs for silver coating technology, in particular clinical study

aap Implantate AG ("aap" or the "Company") continues to be on a growth track and was able to close the financial year 2021 with a significant increase in sales. According to preliminary figures, sales increased by +30% to EUR 12.2 million in the past year (FY/2020: EUR 9.3 million) and by +34% to EUR 3.2 million in the fourth quarter of 2021 (Q4/2020: EUR 2.4 million).

Sales FY/2021

Sales Q4/2021

In North America, aap remains on a growth track and was able to significantly increase sales both on a full-year basis (+21%) and in the fourth quarter of 2021 (+24%). Thus, in the last three months of the financial year, the Company once again achieved a sales level above the EUR 1 million mark. Decisive for the growth momentum were in particular the contracts concluded with US-wide purchasing associations and networks, which give aap access to a large number of clinics and surgical operation centers. Long-term customer relationships were established particularly through system sales. Overall, the number of operations performed stabilized at a good level following the sharp increase in the first six months, although the effects of the COVID-19 pandemic were felt for the first time in the second half of the year in this market, which is so important for the Company.
 

In Latin America (+90%), aap won new customers in Colombia and Ecuador and also benefited from a noticeable recovery of business in Brazil, Mexico and Puerto Rico. Furthermore, sales increased in the Asia-Pacific region (+20%), where the Company was able to reactivate its business in China, among other things. In the fourth quarter of 2021, aap also realized predominantly high double-digit growth rates in almost all regions. The sales increase was driven by the regions Asia-Pacific (>+100%), EMEA (+50%) and North America (+24%).
 

Outlook

In the financial year 2022, aap intends to grow further in terms of sales and earnings and to press ahead with the human clinical study for its innovative antibacterial silver coating technology that started in December 2021. In addition, a key focus will be on the first-time certification under the new EU Medical Device Regulation (MDR 2017/745/EU).
 

Based on the successfully completed capital increase, a significant portion of the net proceeds raised shall be used to finance the planned sales growth and the execution of the human clinical study for the antibacterial silver coating technology. In order to accelerate further sales growth, extensive investments have already been made in sales structures and teams, particularly in North America and Germany. Overall, all markets shall contribute to the planned sales growth, with a continued focus on North America.
 

With its disruptive antibacterial silver coating technology, aap reached another key milestone on the way to the planned CE approval in December with the start of the human clinical study. In financial year 2022, after the University Hospital in Regensburg, further trial centers shall be successively equipped and trained with study materials and the first operations shall be performed. At the same time, aap strives for third-party co-financing for the human clinical study via its subsidiary MCTeQ GmbH (MCTeQ = Medical Coating Technologies). In this context, funding can be provided both through additional grants and through development partnerships with companies from application areas outside traumatology.
 

The Management Board continues to monitor and assess very closely the global impact of the COVID-19 pandemic on aap's business activities and financial results. Based on last year's good developments and the investments already made to finance growth, but at the same time also strongly rising incidence figures worldwide due to the new highly infectious Omicron variant, the visible volatility as a result of COVID-19 and the working and staffing environment in the healthcare sector potentially hampering an accelerated recovery, the Management Board expects sales between EUR 14.0 and 16.0 million for the financial year 2022. In this context, the Management assumes a similar distribution of sales over the individual quarters as in the previous year. With regard to earnings, the Management Board expects EBITDA to be between EUR -1.7 and -0.5 million in financial year 2022 based on the planned sales growth and further efficiency improvements to be realized. Assuming budgetary development in the current financial year, the Management aims to achieve positive EBITDA and an almost balanced free cash flow for the first time for the entire Company, excluding the costs for the silver coating technology and particularly the human clinical study. The above sales and EBITDA forecasts are, however, subject to the condition that the infection situation in the context of the COVID-19 pandemic does not deteriorate further and that corresponding lockdown measures or other restrictions are imposed in the sales regions relevant for aap or that there are temporary production stoppages at the Berlin location or at aap's service providers/suppliers.
 

The sales figures contained in this press release are preliminary figures as of 31 December 2021, which are subject to change until final publication. aap plans to announce the final audited results for the financial year 2021 on 31 March 2022 as part of the consolidated annual financial report 2021.



^[1] CER = Constant Exchange Rates.

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aap Implantate AG (ISIN DE0005066609) - General Standard/Regulated Market - All German stock markets -

About aap Implantate AG
aap Implantate AG is a globally active medical technology company based in Berlin, Germany. The Company develops, manufactures and markets products for trauma. The IP-protected portfolio includes besides the innovative anatomical plating system LOQTEQ(R) a wide range of cannulated screws. In addition, aap Implantate AG has an innovation pipeline with promising development projects such as the antibacterial silver coating technology and magnesium-based implants. These technologies address critical and unmet needs in trauma. In Germany, aap Implantate AG sells its products directly to hospitals, purchasing groups, and hospital groups, while at international level it primarily uses a broad network of distributors in around 25 countries. In the US the Company pursues a hybrid distribution strategy with its subsidiary aap Implants Inc. Distribution is carried out both through distribution agents and partnerships with global orthopedic companies. aap Implantate AG's stock is listed in the General Standard segment of Frankfurt Stock Exchange (XETRA: AAQ.DE). For more information, please visit our website at www.aap.de.

The figures presented in this press release may be subject to technical rounding differences which do not affect the overall presentation.

Forward-looking statement
This release may contain forward-looking statements based on current experience, estimates and projections of the management board and currently available information. They are not guarantees of future performance. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. Many factors could cause the actual results, performance or achievements of aap to be materially different from those that may be expressed or implied by such statements. These factors include those discussed in aap's public reports. Forward-looking statements therefore speak only as of the date they are made. aap does not assume any obligation to update the forward-looking statements contained in this release or to conform them to future events or developments.

For queries, please contact:
aap Implantate AG; Fabian Franke; Head of Investor Relations; Lorenzweg 5; 12099 Berlin, Germany; Phone: +49 (0)30 75019 - 134; Fax: +49 (0)30 75019 - 290; Email: f.franke@aap.de

"Over the past 2.5 years, under the leadership of Mr. Di Girolamo, the Management Board has managed to get aap back on track through extensive restructuring and refinancing despite severely hampered conditions caused by the COVID-19 pandemic," says Dr. med. Nathalie Krebs, Chairwoman of aap's Supervisory Board. "The next step is now to continue consistently on the way chosen and to achieve the operational and strategic goals that have been set. We are firmly convinced that with the Management Board in this constellation we are excellently positioned to lead aap on a profitable growth path after the successful transformation and repositioning and thereby create sustainable value for our shareholders."
 

Rubino Di Girolamo (59) has been aap's Chairman of the Management Board (CEO) since May 2019. He is responsible for Corporate Development, Research & Development Future Technologies, Corporate Risk and Compliance Management.
 

Marek Hahn (46) has held the position of member of the Management Board (CFO) at aap since April 2010. In his function as CFO he is responsible for Finance/Controlling, Human Resources, IT, Legal Affairs, Investor and Public Relations as well as Administration.
 

Agnieszka Mierzejewska (39) has been a member of the Management Board (COO) at aap since January 2021. She is responsible for Sales & Marketing, Production, Research & Development Trauma, Quality Assurance and Regulatory Affairs.

 

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aap Implantate AG (ISIN DE0005066609) - General Standard/Regulated Market - All German stock markets -

About aap Implantate AG
aap Implantate AG is a globally active medical technology company based in Berlin, Germany. The Company develops, manufactures and markets products for trauma. The IP-protected portfolio includes besides the innovative anatomical plating system LOQTEQ(R) a wide range of cannulated screws. In addition, aap Implantate AG has an innovation pipeline with promising development projects such as the antibacterial silver coating technology and magnesium-based implants. These technologies address critical and unmet needs in trauma. In Germany, aap Implantate AG sells its products directly to hospitals, purchasing groups, and hospital groups, while at international level it primarily uses a broad network of distributors in around 25 countries. In the US the Company pursues a hybrid distribution strategy with its subsidiary aap Implants Inc. Distribution is carried out both through distribution agents and partnerships with global orthopedic companies. aap Implantate AG's stock is listed in the General Standard segment of Frankfurt Stock Exchange (XETRA: AAQ.DE). For more information, please visit our website at www.aap.de.

Forward-looking statement
This release may contain forward-looking statements based on current experience, estimates and projections of the management board and currently available information. They are not guarantees of future performance. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. Many factors could cause the actual results, performance or achievements of aap to be materially different from those that may be expressed or implied by such statements. These factors include those discussed in aap's public reports. Forward-looking statements therefore speak only as of the date they are made. aap does not assume any obligation to update the forward-looking statements contained in this release or to conform them to future events or developments.

For queries, please contact:
aap Implantate AG; Fabian Franke; Head of Investor Relations; Lorenzweg 5; 12099 Berlin, Germany; Phone: +49 (0)30 75019 - 134; Fax: +49 (0)30 75019 - 290; Email: f.franke@aap.de

aap thus achieves another major milestone on the way to the planned CE approval and is at the same time the first company in the world to test an antibacterial silver coating on anatomical plates and screws for fracture treatment as part of a study of this kind.
 

With its antibacterial silver coating technology, aap addresses one of the greatest and yet inadequately solved challenges in traumatology: the reduction of surgical site infections (SSI). Surgical site infections represent a major burden both for the patients concerned and for global healthcare systems. Antibiotic-resistant bacteria pose a particular threat. In its annual report on the state of research to overcome antibiotic resistance, the WHO recently found that some of the world's most dangerous bacteria have developed resistance to known drugs.^[1] Moreover, according to the WHO, almost all antibiotics currently in development work little better than existing drugs. aap's innovative antibacterial silver coating technology represents an alternative solution in the fight against bacterial infections that is not based on antibiotics and therefore offers enormous market potential. As a platform technology, the technology has a broad range of applications and can be used not only in traumatology but also in other areas of orthopedics as well as in cardiology, dentistry, or medical instruments.
 

In the future, aap will report regularly on the progress of the human clinical study for its innovative silver coating technology.




_{^[1] 2020 Antibacterial agents in clinical and preclinical development: an overview and analysis. Geneva: World Health Organization; 2021.}

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aap Implantate AG (ISIN DE0005066609) - General Standard/Regulated Market - All German stock markets -

About aap Implantate AG
aap Implantate AG is a globally active medical technology company based in Berlin, Germany. The Company develops, manufactures and markets products for trauma. The IP-protected portfolio includes besides the innovative anatomical plating system LOQTEQ(R) a wide range of cannulated screws. In addition, aap Implantate AG has an innovation pipeline with promising development projects such as the antibacterial silver coating technology and magnesium-based implants. These technologies address critical and unmet needs in trauma. In Germany, aap Implantate AG sells its products directly to hospitals, purchasing groups, and hospital groups, while at international level it primarily uses a broad network of distributors in around 25 countries. In the US the Company pursues a hybrid distribution strategy with its subsidiary aap Implants Inc. Distribution is carried out both through distribution agents and partnerships with global orthopedic companies. aap Implantate AG's stock is listed in the General Standard segment of Frankfurt Stock Exchange (XETRA: AAQ.DE). For more information, please visit our website at www.aap.de.

Forward-looking statement
This release may contain forward-looking statements based on current experience, estimates and projections of the management board and currently available information. They are not guarantees of future performance. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. Many factors could cause the actual results, performance or achievements of aap to be materially different from those that may be expressed or implied by such statements. These factors include those discussed in aap's public reports. Forward-looking statements therefore speak only as of the date they are made. aap does not assume any obligation to update the forward-looking statements contained in this release or to conform them to future events or developments.
 

On the basis of the capital increase against cash contributions with subscription and oversubscription rights of the Company's shareholders out of the authorized capital 2019/I resolved by the Management Board and Supervisory Board on 27 September 2021, aap published on 29 September 2021 a subscription offer for up to 1,500,000 new ordinary bearer shares (no-par value shares) in aap with a pro rata amount of the share capital of EUR 1.00 per share. Shareholders were granted the statutory subscription right. 1,500,000 new shares were issued at a subscription price of EUR 3.30.
 

Section 11 of the terms and conditions of the bonds provides for this case that the creditors of the bonds are protected against dilution. In addition to the granting of a subscription right or the payment of a subscription right compensation amount, the adjustment of the conversion price is also possible. aap hereby announces that the conversion price of the bonds has been reduced by EUR 0.14 to EUR 1.61 per share in accordance with the terms and conditions of the bonds.


 

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aap Implantate AG (ISIN DE0005066609) - General Standard/Regulated Market - All German stock markets -

About aap Implantate AG
aap Implantate AG is a globally active medical technology company based in Berlin, Germany. The Company develops, manufactures and markets products for trauma. The IP-protected portfolio includes besides the innovative anatomical plating system LOQTEQ(R) a wide range of cannulated screws. In addition, aap Implantate AG has an innovation pipeline with promising development projects such as the antibacterial silver coating technology and magnesium-based implants. These technologies address critical and unmet needs in trauma. In Germany, aap Implantate AG sells its products directly to hospitals, purchasing groups, and hospital groups, while at international level it primarily uses a broad network of distributors in around 25 countries. In the US the Company pursues a hybrid distribution strategy with its subsidiary aap Implants Inc. Distribution is carried out both through distribution agents and partnerships with global orthopedic companies. aap Implantate AG's stock is listed in the General Standard segment of Frankfurt Stock Exchange (XETRA: AAQ.DE). For more information, please visit our website at www.aap.de.

Forward-looking statement
This release may contain forward-looking statements based on current experience, estimates and projections of the management board and currently available information. They are not guarantees of future performance. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. Many factors could cause the actual results, performance or achievements of aap to be materially different from those that may be expressed or implied by such statements. These factors include those discussed in aap's public reports. Forward-looking statements therefore speak only as of the date they are made. aap does not assume any obligation to update the forward-looking statements contained in this release or to conform them to future events or developments.
 

- Sales increased 15% (Q3) to EUR 3.0 million and 29% (9M) to EUR 8.9 million (CER^[1]: 18% (Q3) and 39% (9M))

- Continued positive EBITDA in Q3 and 9M; >+100% increase (Q3) to KEUR 20 and >+100% (9M) to EUR 0.1 million

- Operating cash flow balanced for first time in Q3; +87% improvement to EUR -0.4 million (9M); still clear trend towards black zero

- Promising clinical data for antibacterial silver coating technology

aap Implantate AG ("aap" or the "Company") continued profitable growth with double-digit sales increases and positive EBITDA in both the third quarter and the nine-month period of 2021.
 

Q3/2021 and 9M/2021 - Key results and progress

- Sales by regions: Growth drivers in Q3 especially regions LATAM (= Latin America; >+100%) and APAC (= Asia Pacific; +80%) as well as in 9M LATAM (>+100%), North America distribution business (+35%) and EMEA (= Europe, Middle East, Africa; +18%)

- North America: Sales increase in distribution business in Q3 (+7%) and in 9M (+35%); overall US market continues to grow significantly in 9M (+19%)

- Earnings: Recurring EBITDA improved to black zero in Q3 (Q3/2020: EUR -0.4 million) and to EUR -0.4 million in 9M (9M/2020: EUR -3.3 million)

- Operational trauma business: Positive result (Recurring EBITDA) in Q3 and 9M^[2]

- Gross margin and costs: Gross margin^[3] remains stable at high level of 85% in 9M and with increase in gross margin in absolute terms in line with sales growth key driver of earnings improvement; reduced cost level with declining personnel (-11% in 9M) and other costs (-15% in Q3 and -13% in 9M) as well as significant decrease in one-time effects

- Balance sheet: Equity ratio at a good level of 45% (31.12.2020: 52%)

- Financing: Successful completion of capital increase with subscription rights with significant oversubscription led to net inflow of approx. EUR 4.8 million

- Silver coating technology: Promising clinical results after use of three silver-coated aap plate systems in IIT study and two individual healing trials in patients with particularly severe infections and complex bone fracture healing disorders; start of human clinical study in Q4/2021

- Resorbable magnesium implant technology: Continued talks with technology-savvy investors on financing up to complete sale of technology

Q3/2021 and 9M/2021 - Key financial figures

Sales Q3/2021

^{* In Q3/2020, sales development was still reported for the regions Germany, USA (distributors and global partners), International (excluding USA; Europe (excluding Germany), BRICS countries and RoW). The reclassification has been made in the context of the current financial reporting.}

Sales 9M/2021

Looking at the individual regions, sales growth in the third quarter of 2021 was particularly driven by Latin America (>+100%) and Asia Pacific (+80%). In Latin America, aap was able to grow significantly in all countries after the COVID-19 pandemic subsided and also won an initial order in Colombia as part of a successful distributor change. In Asia Pacific, the Company continues to record a recovery in business and expanded sales year-on-year despite regional lockdowns (e.g. in Thailand and China). The decline in the EMEA region (= Europe, Middle East, Africa; -10%) is primarily attributable to the relatively late end of the lockdown in Germany in June and to business in Spain, which was still severely affected by the consequences of the COVID-19 pandemic, as both markets together account for around 60% of the total sales volume in this region. At the same time, however, aap was able to grow at a double-digit rate again in other markets, such as South Africa. In the first nine months of 2021, the Company realized sales increases in all regions, some of which were significant. Besides Latin America (>+100%), the main growth drivers were North America (+19%) and the EMEA region (+18%), where aap benefited particularly from a revival of business in the Middle East. The Company also recorded sales growth in the Asia Pacific region (+9%).
 

In North America, aap's distribution business continued to grow in the third quarter of 2021 (+7%) and showed a further dynamic development in the first nine months as well (+35%), but at the same time felt the effects of the COVID-19 pandemic for the first time. Thus, COVID-19-related hospital stays increased steadily in the period from the end of July to the beginning of September and surgery appointments were cancelled. In the overall US market, sales development in the third quarter of 2021 stabilized at the prior-year level, as the third quarter of 2020 still included follow-up orders from a large order placed by a global partner in the first quarter of 2020, whereas only consumables were ordered in much lower volumes thereafter. In the first nine months of 2021, aap recorded an increase in sales in North America (+19%) and is thus still clearly on a growth track overall.
 

EBITDA Q3

EBITDA 9M

With regard to earnings, aap was able to achieve an improvement both in the third quarter and in the first nine months of 2021 and generated positive EBITDA in each case. The background to these developments is, in addition to the increase in gross margin in absolute terms in line with the sales growth as key driver, also a reduced cost level. The positive cost development results on the one hand from the implemented restructuring measures, which are reflected in declining personnel and other costs, and on the other hand from a significant decrease in one-time effects, which in the nine-month period of 2020 were still largely characterized by the restructuring and refinancing as well as the revision of the quality management system. The improvement in EBITDA thus visibly reflects the successes realized as part of the restructuring, which can be summarized as follows:

- Stabilization of gross margin at a high level of 85% and with increase in gross margin in absolute terms in line with sales growth key driver of earnings improvement

- Stabilization of personnel expenses in Q3/2021 at prior-year level (non-significant increase
<1% vs. Q3/2020) and decrease of 11% in 9M/2021 vs. 9M/2020

- Declining trend in other costs (-15% in Q3/2021 and -13% in 9M/2021) with significantly reduced non-recurring expenses

Excluding one-time effects, recurring EBITDA improved to a black zero in the third quarter of 2021 (Q3/2020: EUR -0.4 million) and to EUR -0.4 million in the first nine months of the current financial year (9M/2020: EUR -3.3 million). Overall, this reflects the targeted development: focus on established markets with higher profit margins and sustainable streamlining of the cost structure to improve operating performance. Looking at the development of the pure operating trauma business, aap was additionally able to generate a positive result (recurring EBITDA) in both the third quarter and the nine-month period of 2021. This is again a confirmation for the implemented restructuring and transformation measures, but also an incentive to build up a sustainably profitable trauma business with further growing sales.
 

In connection with its innovative antibacterial silver coating technology, aap was able to achieve promising clinical results in three operations with silver-coated plate systems as part of an IIT study and two individual healing trials in patients with particularly severe infections and complex fracture healing disorders. In all three cases, excellent healing processes were recorded, and no indications of infections were found. In addition, measurements of the silver concentration in two of these procedures showed that there was only a relevant increase in the silver concentration locally in the area of the wound where the antibacterial effect is needed. The overall very good results are a positive indication for the planned multicenter human clinical study that aap will start in Germany before the end of the fourth quarter of 2021 to obtain CE approval. The Company will use the funds from the successful capital increase to equip the first participating clinics with silver-coated implants by the end of the year, which will mark the official start of the study.
 

With a view to securing further financing, aap successfully completed a capital increase with subscription rights in October. The capital increase met with great interest from both existing and new investors and was in the end significantly oversubscribed. All in all, all 1.5 million shares offered were placed at a subscription price of EUR 3.30, so that after deduction of consultancy and other costs the Company received a net inflow of around EUR 4.8 million. aap takes this as a clear appreciation of the performance of the management and the employees in the Company's transformation process in the very challenging times of the COVID-19 pandemic. The Management Board also sees this result as a sign of support for the corporate strategy pursued, both in terms of short-term performance metrics and long-term value creation.

Outlook

The Management Board continues to closely monitor and assess the global impact of the COVID-19 pandemic on aap's business activities and financial results. Based on the third quarter 2021 results, currently strongly rising incidence figures in Germany as well as in many regions worldwide, the visible volatility as a result of COVID-19 and the labor and staffing environment in the healthcare sector potentially hampering an accelerated recovery, the Company now expects sales at the lower end of the guidance range of EUR 12.0 million to EUR 14.0 million. On the earnings side, management expects EBITDA to be in the upper half of the guidance range of EUR -2.0 million to EUR -0.7 million. The above sales and EBITDA forecasts are, however, subject to the condition that the infection situation in the context of the COVID-19 pandemic does not deteriorate further and that corresponding lockdown measures or other restrictions are imposed in the sales regions relevant for aap or that there are temporary production stoppages at the Berlin location or at aap's service providers/suppliers.




^{[1] CER = Constant Exchange Rates.
[2] aap Group excluding development costs for silver coating and resorbable magnesium implant technologies, non-recurring one-time effects and non-allocable central costs.
[3] Based on sales, changes in inventories of finished goods and work in progress and cost of materials / cost of purchased services.}
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aap Implantate AG (ISIN DE0005066609) - General Standard/Regulated Market - All German stock markets -

About aap Implantate AG
aap Implantate AG is a globally active medical technology company based in Berlin, Germany. The Company develops, manufactures and markets products for trauma. The IP-protected portfolio includes besides the innovative anatomical plating system LOQTEQ(R) a wide range of cannulated screws. In addition, aap Implantate AG has an innovation pipeline with promising development projects such as the antibacterial silver coating technology and magnesium-based implants. These technologies address critical and unmet needs in trauma. In Germany, aap Implantate AG sells its products directly to hospitals, purchasing groups, and hospital groups, while at international level it primarily uses a broad network of distributors in around 25 countries. In the US the Company pursues a hybrid distribution strategy with its subsidiary aap Implants Inc. Distribution is carried out both through distribution agents and partnerships with global orthopedic companies. aap Implantate AG's stock is listed in the General Standard segment of Frankfurt Stock Exchange (XETRA: AAQ.DE). For more information, please visit our website at www.aap.de.

Forward-looking statement
This release may contain forward-looking statements based on current experience, estimates and projections of the management board and currently available information. They are not guarantees of future performance. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. Many factors could cause the actual results, performance or achievements of aap to be materially different from those that may be expressed or implied by such statements. These factors include those discussed in aap's public reports. Forward-looking statements therefore speak only as of the date they are made. aap does not assume any obligation to update the forward-looking statements contained in this release or to conform them to future events or developments.


For queries, please contact:

aap Implantate AG; Fabian Franke; Head of Investor Relations; Lorenzweg 5; 12099 Berlin, Germany; Phone: +49 (0)30 75019 - 134; Fax: +49 (0)30 75019 - 290; Email: f.franke@aap.de

"I am very pleased with the outcome of the capital increase and on behalf of the entire Management Board I would like to thank our existing and all new shareholders for their trust and support," says Rubino Di Girolamo, Chairman of the Management Board / CEO of aap. "We take this as a clear appreciation of the performance of the management and the employees in the transformation process of the Company in the very challenging times of the COVID-19 pandemic. We also see this result as a sign of support for the corporate strategy pursued, both in terms of short-term performance metrics and long-term value creation."
 

The issue proceeds from the transaction shall be used to finance the planned sales growth with a focus on the USA (especially investments in sets) and the start of the human clinical study for aap's antibacterial silver coating technology in the fourth quarter of 2021.
 

"The profitable and sustainable expansion of the operational LOQTEQ(R) business, especially with a view to the USA, will continue to have top priority. We will particularly keep a close eye on the factors of quality, customer satisfaction, sales strategy, optimization projects to increase efficiency and operating costs," says Agnieszka Mierzejewska, Member of the Management Board / COO of aap. "In the long term, our LOQTEQ(R) product portfolio combined with the antibacterial silver coating will give us a unique competitive position."
 

Based on the current and the planned further business development for the coming years, the financing of the operating business and the planned human clinical study for the antibacterial silver coating technology is secured by the net inflows from the capital measure until the end of the financial year 2023. For the following years, the Management Board expects that, if the Company continues to develop according to plan, the operating business shall generate sustainable cash flow surpluses and thus also ensure the execution of the human clinical study for the antibacterial silver coating technology.
 

"In the phase that is now coming, the aim is to consistently achieve the growth targets that have been set and to successively further optimize the value creation process," says Marek Hahn, Member of the Management Board / CFO of aap. "In order to make this transparent, we want to intensify communication between the management and all stakeholders of the company, as such an iterative process supports the strategy implementation within the agreed financial framework."


 

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aap Implantate AG (ISIN DE0005066609) - General Standard/Regulated Market - All German stock markets -

About aap Implantate AG
aap Implantate AG is a globally active medical technology company based in Berlin, Germany. The Company develops, manufactures and markets products for trauma. The IP-protected portfolio includes besides the innovative anatomical plating system LOQTEQ(R) a wide range of cannulated screws. In addition, aap Implantate AG has an innovation pipeline with promising development projects such as the antibacterial silver coating technology and magnesium-based implants. These technologies address critical and unmet needs in trauma. In Germany, aap Implantate AG sells its products directly to hospitals, purchasing groups, and hospital groups, while at international level it primarily uses a broad network of distributors in around 25 countries. In the US the Company pursues a hybrid distribution strategy with its subsidiary aap Implants Inc. Distribution is carried out both through distribution agents and partnerships with global orthopedic companies. aap Implantate AG's stock is listed in the General Standard segment of Frankfurt Stock Exchange (XETRA: AAQ.DE). For more information, please visit our website at www.aap.de.

Forward-looking statement
This release may contain forward-looking statements based on current experience, estimates and projections of the management board and currently available information. They are not guarantees of future performance. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. Many factors could cause the actual results, performance or achievements of aap to be materially different from those that may be expressed or implied by such statements. These factors include those discussed in aap's public reports. Forward-looking statements therefore speak only as of the date they are made. aap does not assume any obligation to update the forward-looking statements contained in this release or to conform them to future events or developments.