Allgeier SE: Additional details on the publication of a review order by the BaFin on July 12, 2022

Munich, July 13, 2022 – Yesterday the BaFin published an announcement on an accounting review regarding the presentation of the split of Nagarro SE in the consolidated financial statements of Allgeier SE (WKN A2GS63, ISIN DE000A2GS633) as of December 31, 2020. We have published an explanatory note to this topic. yesterday. Due to inquiries, we are supplementing the explanation on the merits of the review order based on our knowledge as follows:

The audit issues raised relate exclusively to the presentation of the split operation in the consolidated financial statements of Allgeier SE as of December 31, 2020 and have no impact on the companies involved Allgeier SE and Nagarro SE beyond.

The review order covers the following two main aspects:

• Firstly, the BaFin considers that the standards of IFRIC 17 are applicable to the spin-off and wishes to examine whether we should have presented separately an accounting profit of the order of 200 million euros in discontinued operations in the income statement consolidated as of December 31, 2020. This accounting gain is caused by the disclosure of hidden reserves during the structuring of Nagarro SE in view of the spin-off. However, this gain is no longer economically available to Allgeier SE as of December 31, 2020, as it has been transferred to Allgeier SE shareholders in the form of Nagarro SE shares with the execution of the Nagarro SE spin-off on December 15, 2020. We have therefore presented the two partial aspects of the split – namely the disclosure of hidden reserves in the Nagarro group and the transfer to shareholders – in a net form in equity as part of the balance sheet. If the merger with BaFin should lead to an adjustment of this disclosure, we will do so.
• Second, BaFin addresses when Nagarro SE should be considered a discontinued operation and therefore the depreciation and amortization of Nagarro SE assets should no longer be recognized in Allgeier’s consolidated financial statements. In our opinion, this was the case until the spin-off became effective on December 15, 2020. BaFin would like to consider earlier dates. The date of the General Meeting of September 24, 2020 or the expiry of the deadline for contesting the resolution of the General Meeting could be considered. If this were to be followed, the impairments on Nagarro SE’s assets included in discontinued operations would already end on these dates. The difference would be around 1 to 2 million euros net, whereby the expense appearing in discontinued operations as of December 31, 2020 would then be lower.

We are carefully examining these points and will finalize their content with BaFin. In any case, according to our current knowledge, they relate exclusively to the accounting presentation of the demerger operation in the consolidated financial statements as of December 31, 2020.

The effectiveness of the split itself is not affected by BaFin’s audit ratings. The spin-off has indeed been executed without a doubt and nothing will change in this regard.

The continuing activities of the Allgeier group, ie all of Allgeier’s current activities, are also not affected by the audit points. Likewise, the annual and consolidated financial statements of Allgeier SE as of December 31, 2021 and subsequent financial statements are not materially affected. Disclosure issues also have no tax relevance and have no impact on the Group’s liquidity.

Nagarro SE’s business and Nagarro SE’s annual and consolidated financial statements are also unaffected by the audit issues.

This concerns only the correct presentation of the split transaction in the consolidated financial statements of Allgeier SE as a one-time disclosure issue against various IFRS standards.

Contact:

Allgeier SE
Corporate Communication and Investor Relations
Dr. Christopher Grosse
Einsteinstraße 172
81677 Munich
Telephone: +49 (0)89/998421-0
Fax: +49 (0)89/998421-11
Email: ir@allgeier.com
Web: www.allgeier.com

Allgeier SE is one of the leading technology companies for digital transformation: the fast-growing group headquartered in Munich guides its customers through the challenges of digital transformation to ensure their future success. Allgeier has a broad and stable customer base consisting of globally active enterprises, successful mid-sized companies and public sector customers. To its more than 2,000 customers, Allgeier offers a comprehensive portfolio of IT and software services ranging from high-end software development to business efficiency solutions to support the digitization and transformation of critical business processes. In doing so, Allgeier achieves breakthroughs towards new digital business models, sets strategic priorities and implements breakthrough projects with high flexibility and scalability to shape agile and intelligent organizations for the digital age. The two segments of the Enterprise IT group and mgm technology partners employ more than 3,000 employees and more than 1,000 independent experts at a total of 42 locations worldwide in the DACH region, France and the Czech Republic, as well as in India , Vietnam and the United States. In fiscal year 2021, Allgeier generated revenue of €403 million from continuing operations. According to the Lünendonk® 2022 list, Allgeier is one of the leading IT services companies in Germany. Allgeier SE is listed on the regulated market of the Frankfurt Stock Exchange in the general standard (WKN A2GS63, ISIN DE000A2GS633). More information on: www.allgeier.com