DF Deutsche Forfait : 2023 Half-year report

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DF Deutsche Forfait AG

Moving forward

Combined Management Report and Group Management Report of

DF Deutsche Forfait AG for the period from 1 January 2023 to 30 June 2023

CONTENT

INTERIM GROUP MANAGEMENT REPORT 1-1-2023 - 30-6-2023

1.	Fundamentals of the Group	3
2.	Economic report	5
3.	Opportunity and risk report	10
4.	Forecast	12

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Balance Sheet, Assets	14
Consolidated Balance Sheet, Liabilities	15
Condensed Consolidated Income Statement	16
Consolidated Statement of Comprehensive Income	17
Consolidated statement of cash flows	18
Consolidated Statement of Changes in Equity	19
Selected explanatory notes to the condensed
interim consolidated financial statements	20
INDEPENDENT AUDITOR´S REPORT	29
RESPONSIBILITY STATEMENT BY THE
BOARD OF MANAGEMENT	30

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III Interim Group Management Report 1-1-2023 - 30-6-2023

I. FUNDAMENTALS OF THE GROUP

(1) Business model of the Group

DF Group is a specialist for foreign trade finance and related services. Its customers include exporters, importers and other financial companies. DF Group currently specializes in the countries of the Near and Middle East, with the main focus on Iran. Where trade with Iran is concerned, it has focused its activities exclusively on humanitarian goods since the summer of 2018 for business policy reasons.

DF Group's product portfolio is tailored to the geographical focus and specific customer needs. In the context of its marketing services, the Group - after having carried out its own compliance check - brokers transactions relating to the food, pharmaceuticals and healthcare sectors to its strategic partners for further pro- cessing. The Group also collects foreign trade receivables, which is done via its Czech subsidiary, DF Deutsche Forfait Middle East s.r.o., for the Near and Middle East region. DF Deutsche Forfait s.r.o. covers the remaining geographies with a focus on emerging markets.

Factoring services, which were added to DF Group's product portfolio in late 2020, are also provided by the Prague-based subsidiary, primarily to Czech customers. Forfaiting - where receivables are purchased by Deutsche Forfait GmbH or by DF ME s.r.o. taking into account the specific risks of each individual transaction - also made a contribution to revenues in the reporting period. DF Group generally originates business through its own sales force or through agents or strategic partners in the country of the importer. DF Group moreover markets its country-specificknow-how, its network as well as its compliance expertise by providing compliance consulting and training services.

The chart below shows the structure of the product solutions offered by DF Group in the reporting year.

Customer requirements

Cash flow

Risk management

Marketing Service (Agenting)

Trading

Forfaiting

Product solution

Factoring

Collection Service

Project finance consulting

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III Interim Group Management Report 1-1-2023 - 30-6-2023

For further diversification, DF Group has added project finance activities to its product portfolio. Here, the focus is on consulting and other services in the context of project financing, which are also offered beyond the target region - primarily in emerging markets. This increases the geographical diversification of DF Group's business activity.

Since 2023, DF Group has additionally been acting as an independent trader of agricultural products in the new Trading segment in compliance with applicable regulations.

DF Group's business model is influenced by legal, political and economic factors, especially with regard to sanctions and trade restrictions. In particular, compliance with restrictions is intensively monitored by the company's internal and experienced Compliance Team.

(2) Structure of DF Group

DF Deutsche Forfait AG ("DF AG" or "company"), headquartered in Cologne, is the holding company and ultimate parent of DF Group. DF AG has three operating subsidiaries, namely Deutsche Forfait GmbH ("DF GmbH") in Cologne, Germany, DF Deutsche Forfait s.r.o. ("DF s.r.o.") as well as DF Deutsche Forfait Middle East s.r.o. ("DF ME s.r.o.") in Prague, Czech Republic.

Organizational structure

DF Deutsche Forfait AG

(Cologne)

DF Deutsche Forfait	DF Deutsche Forfait	Deutsche Forfait
s.r.o. (Prague)	Middle East s.r.o. (Prague)	GmbH (Cologne)
100%	100%	100%

DF GmbH focuses its products, which mainly comprise marketing services, forfaiting and the collection of foreign trade receivables as well as consulting services, on the Near and Middle East. In addition, the company provides services to other DF Group entities. These include, among other things, accounting, contract management, compliance, sales and risk management.

The Prague subsidiaries are responsible for the factoring business, the handling of individual transactions such as the granting of loans, the purchase and sale of promissory notes as well as debt collection activities. DF ME s.r.o. focuses on transactions and the Trading product in the Near and Middle East, especially Iran, while DF s.r.o. covers the remaining geographies with a focus on emerging markets. All subsidiaries are legally independent entities.

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III Interim Group Management Report 1-1-2023 - 30-6-2023

II. ECONOMIC REPORT
(1) Macroeconomic and industry-related environment
In the first half of 2023, the global economic situation continued to be dominated by the effects of the war
in Ukraine and the related impact on the global economy.
At the beginning of 2023, the IMF expected the world economy to grow by 2.9% and 3.1% in 2023 and
2024, respectively. Compared with the last forecast from October 2022, this represents an upward revision
of 0.2 percentage points for 2023 and a downward revision of 0.1 percentage points for 2024. This means,
however, that growth is expected to slow down markedly by another 0.5 percentage points compared to
2022 and to remain well below the long-term average of 3.8% in the period from 2000 to 2019.
The slowdown in economic momentum is attributed in particular to the industrialized countries, which are
projected to grow by only 1.2% this year, compared to 2.7% last year. The situation is different in the
emerging and developing countries, which, according to IMF calculations, bottomed out already in 2022.
Accordingly, a very slight recovery is expected from 2023 onwards - partly as a result of the opening of the
Chinese economy after the pandemic. In 2023, China and India could account for more than 50% of global
economic growth.
In 2022, the IMF still expected the volume of world trade to grow by 2.2% and 3.3% in 2023 and 2024,
respectively. According to a WTO publication released in April 2023, global trade is expected to grow by only
1.7% in 2023. While this is more than previously estimated in October 2022, when the WTO had assumed an
increase in trade volume of only one percent, it is still very low. For comparison: Trade volume grew by 10.4%
in 2021 and still by 5.6% in 2022.
The WTO has now raised its forecast for 2023 because the outlook for global economic growth improved
from 2.3% to 2.4%. A growth rate of 3.2% is expected for 2024. However, factors such as geopolitical
tensions, supply bottlenecks on the food market and negative effects of the interest rate hikes may still
reduce this rate.
In the World Economic Outlook (WEO) update from July 2023, the experts of the International Monetary
Fund (IMF) also upgraded last year's estimate of global economic growth for 2023 by 0.2% to 3% and main-
tained their forecast for 2024 at 3%. Nevertheless, many problems still remain, and the IMF is particularly
concerned about the high global inflation. Growth is driven primarily by the major emerging countries such
as China and India, with the emerging countries as a whole expected to grow by 4% in both 2023 and 2024.
For the eurozone, the experts project a decline to 0.9% and 1.4% in 2023 and 2024, respectively (from 3.5%
in 2022). The German economy is forecast to contract by as much as 0.3% in 2023 and then to pick up again
by 1.2% in 2024. Growth in the USA is expected to slow from 2.1% in 2022 to 1.8% in 2023 and 1.0% in
2024. The IMF attributes the slowdown to the fact that US consumers used up most of their savings during
the COVID-19 pandemic.	| 5