Net assets and financial position

The changes in the net asset position and capital structure in the 2022/23 financial year are due mainly to operating effects and the negative result for the year.

Non-current assets decreased from € 47.6 million in the previous year to € 45.5 million. This was due to both amortization and depreciation as well as a reduction in equity-accounted investments.

Current assets decreased from € 30.4 million to € 25.5 million. This was due, in particular, to the lower level of cash and cash equivalents, which is attributable mainly to the acquisition of the minority interests in Biocatalysts Ltd. This was offset by an increase in trade receivables from € 8.0 million to € 9.4 million, reflecting the higher revenue level.

Equity decreased from € 34.2 million to € 23.0 million. The main reasons for this are the negative result for the year and the effect on retained earnings from the acquisition of the two remaining minority interests in Biocatalysts Ltd. No capital measures were implemented at Group level in the reporting period.

As at the 30 September 2023 reporting date, the company reports authorized capital of € 4,369,499 and conditional capital of € 2,184,749 (conditional capital to fulfil option or conversion rights from the issue of bonds with warrants and/or convertible bonds) and € 2,184,748 (conditional capital to fulfil option rights from the issue of share options).

Non-current liabilities increased from € 22.4 million in the previous year to € 30.4 million in the year under review. This is due mainly to the higher level of financial liabilities. In the financial year under review, € 4.0 million of a credit line was utilized and further loans were taken out from banks in order to further advance the strategic development of the BioProducts segment.

Current liabilities were reduced from € 21.4 million to € 17.5 million. This was due mainly to scheduled repayments of financial liabilities and a lower level of trade payables.

Financial management at BRAIN mainly entails securing the necessary liquidity to achieve the company’s objectives and to meet payment obligations at all times. Such financial management includes deploying various financing instruments such as loans and leasing.

The financial liabilities are predominantly denominated in euros and pounds sterling. In addition to silent partnerships, the interest-bearing financial liabilities mainly consist of loans from financial institutions with a fixed nominal interest rate of between 1.15 % and 8.12 %, as well as liabilities for the potential acquisition of company shares from the exercise of put options. Of the interest-bearing loans, € 6.3 million have a remaining term up to one year and € 6.0 million a remaining term of between more than one year.

The equity ratio stood at 32.4 % as of the reporting date, down on the previous year (43.9 %). The debt-to-equity ratio increased from 56.1 % in the previous year to 67.6 % as of 30 September 2023 in the context of the aforementioned parameters. Total assets decreased from € 78.0 million as of 30 September 2022 to € 70.9 million as of 30 September 2023.

Investments

Investments in the financial year under review focused on the acquisition of minority interests in Biocatalysts Ltd. in order to advance the strategic restructuring and further development of the BioProducts segment, as well as investment in the development pipeline of BRAIN Biotech AG. A further focus of capital expenditures was on property, plant and equipment, which amounted to € 2.0 million, due mainly to the expansion of production capacity at Biocatalysts.

Liquidity

Extract from the cash flow statement

The BRAIN Biotech Group’s gross cash flow amounted to € -4.4 million in the 2022/2023 financial year compared with € -5.1 million in the previous year.

Cash flow from operating activities deteriorated from € -1.5 million to € -4.2 million in the financial year under review. This was due to the negative comprehensive income and a higher cash outflow from changes in trade payables and other liabilities. This was offset by a year-on-year higher level of cash inflows from deferred income.

Cash flow from investing activities totaled € 0.6 million in the financial year under review compared with € 12.7 million in the previous year. The cash flow from investing activities is positively characterized by the payment of the purchase price from the divestment of L.A. Schmitt GmbH. This was offset by investments in property, plant and equipment. These were lower than in the previous year. The previous year was also significantly characterized by the acquisition of the Breatec Group.

Cash flow from financing activities totaled € 0.5 million and reflects the proceeds from the assumption of financial liabilities (€ 13.0 million) on the one hand and the payments for the acquisition of minority interests in Biocatalysts Ltd. (€ 9.6 million) and the scheduled repayment of financial liabilities (€ 3.0 million) on the other.

The individual cash flows led to an overall reduction in cash and cash equivalents of € 3.2 million compared with € 16.1 million in the previous year.

Cash and cash equivalents of € 5.4 million as of the 30 September 2023 reporting date were offset by current financial liabilities of € 4.7 million and non-current financial liabilities of € 24.3 million. In addition, the company has unused credit lines of € 3.0 million, which give it the flexibility to meet the aforementioned payment obligations.

In the Management Board’s assessment, no restrictions exist that can limit the availability of cash and/or capital.