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Nano Dimension: Another Stellar Q2/2023 and H1/2023 Results

47% Organic Growth since Q3/2022
33% Higher Revenue over Q2/2022
38% Higher Revenue over H1/2022

44% Q2/23 Gross Margin, Up From 32% in Q2/2022
44% H1/23 Gross Margin, Up From 21% in H1/2022
48% Q2/23 Adjusted Gross Margin, Up From 40% in Q2/2022
47% H1/23 Adjusted Gross Margin, Up From 40% in H1/2022

Conference Call to be Held Today at 9:00 AM EDT

WALTHAM, Mass., Aug. 21, 2023 (GLOBE NEWSWIRE) -- Nano Dimension Ltd. (Nasdaq: NNDM, “Nano Dimension” or “Nano” or the “Company”), a leading supplier of Additively Manufactured Electronics (“AME”) and multi-dimensional polymer, metal & ceramic Additive Manufacturing (“AM”), today announced financial results for the second quarter ended June 30th, 2023.

Revenue

Gross Margin (“GM”)

Adjusted1 Gross Margin (“Adjusted GM”)

Adjusted EBITDA for Q2/2023 was negative $24 million,
including Research & Development expenses: $13 million2.

Adjusted EBITDA for H1/2023 was negative $47 million,
including Research & Development expenses: $28 million2.

Details regarding Adjusted EBITDA and Adjusted gross profit can be found below in this press release under “Non-IFRS Measures.”

_______________
1 Excluding cost of revenues from depreciation and amortization and share-based compensation expenses.
2 Excluding share-based compensation expenses and depreciation.

CEO MESSAGE TO SHAREHOLDERS:

Dear Shareholders,

Nano Dimension’s momentum continues, and the second quarter and first half of 2023 are no exception. The financial results prove that the people, initiatives, business plan and M&A strategy we have put in place are delivering exceptional revenue and gross margin improvements. Moreover, the 47% organic revenue growth since Q3/2022, across different product lines, is a testament of our unique and synergistic business model.

When many, if not all other businesses, in our space have top-lines that are stagnating or declining, our revenues are growing 33% quarter-over-quarter and 38% half-over-half for 2023. When many of our peers have had to lower prices to compete and/or pay more for an inefficiently managed supply chain, our gross profits are increasing:

We strongly believe that this is only the beginning. We have the right people, technologies, and products for this business to continue to deliver strong results. During the most recent 3-4 quarters, however, I am not focusing on quarterly results, as good as they are – but rather looking at annual trends, aiming for improvements in margins, and potentially, in the not too far future, a positive EBITDA and bottom line. I am confident of this trajectory based on our strong R&D achievements, especially in materials’ developments, pipeline and customer relationships, as well as build-up of sales & marketing infrastructure.

Considerations for Profitability and Cash Flow:

We prudently continue to invest in R&D and Go-to-Market. Those are larger investments than what a company at our present size can typically afford, should it wish to be profitable in near term quarters. However, we are growing steadily – and that’s what we aim to do. Negative cashflows are temporary investments which are meticulously calculated and aimed to match the significant organic growth we expect and the upcoming consolidation waves that we foresee in our industry.

We are prioritizing long-term value creation with a horizon of a few quarters, rather than nearer-term profitability at the expense of the Company’s future potential. If we cut expenses and maximize profit now, an alternative that is definitely doable, we would be sacrificing a substantially increased valuation for the Company down the road. Hence, investors with a different investment-event-horizon, may join us by stretching their timeline slightly, and their expected returns will emerge.

We are not where we are by accident, in particular the cash on our balance sheet was and is preplanned. We are here because we have always respected our fiduciary responsibility to our shareholders, which has led us to spend your capital more prudently than others.

Our disciplined approach to capital allocation has enabled us to enter the next phase of this marketplace - when capital is tight for many - and fully execute on our strategic growth plans. Nano has the cash firepower to continue to build our business and we see significant opportunities ahead, such as the acquisition we announced last week of U.K.-based Additive Flow's technology and intellectual property, which covers solutions for 3D design simulation and optimization.

There will be a few leaders that emerge as dominating the digital manufacturing fields, and we are ideally positioned to act as a consolidator in the highly fragmented market landscape with numerous attractive potential targets. It is hard to imagine who is better positioned than we are.

Nano’s Performance 2020-2023:
Nano’s ambitious and focused M&A strategy, combined with strong organic growth, has already driven significant value creation in recent years:

Upcoming Annual General Meeting of Shareholders (“Annual Meeting”):

As many of you are aware, Murchinson Ltd. (“Murchinson”), a small non-institutional fund trying to establish itself as a legitimate “activist,” is threatening to derail the Company’s progress and future value creation opportunity at our upcoming Annual Meeting on September 7th, 2023. Murchinson’s goal is to remove 9 directors – 7 of whom are independent – all of whom have diverse skills and expertise that are critical to Nano’s future success.

Murchinson has presented NO strategic plan and NO vision for Nano’s future. We believe Murchinson’s campaign is a blatant attempt to elevate the fund’s profile as an “activist” on the account of Nano Dimension and make a quick profit by gaining access to the Company’s significant cash reserves, at the expense of substantial long-term value creation potential for other shareholders.

Murchinson's efforts to manipulate Nano’s stock, with the help of collaborators, has resulted in its cost basis of (estimated) $2.50 per share. The fund stands to generate an (estimated) 60% return in (estimated) 12 months by seeking to liquidate the Company at $4.00 per share. Doing so would deprive you of the considerable upside as Nano continues to execute on its strategy.

They now falsely claim that the cash value of ~$4.00 per share today should be the maximum value of your company, and wish to take it over, liquidate and distribute what will end up less than $4.00 per share to 170,000 (estimated number) retail shareholders. Most of those have cost-basis which is much higher than that, and they will be deprived of the opportunity to reach value which is much more than $4.00 per share.

Those eccentric-pseudo-activist shareholders are attempting to oust our board, replace it with their own nominees (which were already paid $250,000 in non-refundable cash in advance, just to be participants in this predator’s scheme, even if they are not voted to be directors; just to lend their names to a derogatory proxy fight).

We hope results like today will also resonate with shareholders since they validate the success of our business model and strategic initiatives as we continue to build on our leadership in the industry. Nano, under the existing Board and management team, has a bright future ahead, with a multi-pronged growth strategy buoyed by strong fundamentals, including disciplined M&A objectives and strong organic growth from leading technology development and innovation efforts. We hope existing and prospective shareholders will see the opportunity as we continue to deliver strong results annually.

However, this will not continue if Murchinson has its way. As previously announced, I intend to resign as the Company's CEO if EVEN ONE of the Murchinson nominees are elected to the Board. A large number of Nano’s senior management indicated similar intentions. I believe Murchinson’s involvement will derail the Company’s strategic direction and I (and others) simply refuse to work with any representative of Murchinson, when I believe their intention is to dismantle Nano Dimension.

Murchinson nominees have all accepted inducement payments of $50,000 each to simply stand for election, a clear mechanism to buy their loyalty.

I urge shareholders to vote to protect their investment and the significant value creation opportunity that Nano represents and vote FOR the current Nano Board.

Thank you for your support.

Yoav Stern
Chairman and Chief Executive Officer


FINANCIAL RESULTS:

Financial results for the second quarter ended June 30th, 2023

Financial results for the six months ended June 30th, 2023

Balance sheet highlights


Conference call information

The Company will host a conference call to discuss these financial results today, August 21st, 2023, at 9:00 a.m. EDT (4:00 p.m. IDT).

We encourage participants to pre-register for the conference call using the following link:  https://dpregister.com/sreg/10181392/fa0dd604c0

Webcast link: https://event.choruscall.com/mediaframe/webcast.html?webcastid=E9fFwO4y

U.S. Dial-in Number: 844-695-5517
INTERNATIONAL DIAL IN: 1-412-902-6751
Israel Dial-in Number: 1-80-9212373.
Please request the “Nano Dimension NNDM call” when prompted by the conference call operator. For those unable to participate in the conference call, there will be a replay available from a link on Nano Dimension’s website at http://investors.nano-di.com/events-and-presentations.


About Nano Dimension
Nano Dimension’s (Nasdaq: NNDM) vision is to transform existing electronics and mechanical manufacturing into Industry 4.0 environmentally friendly & economically efficient precision additive electronics and manufacturing – by delivering solutions that convert digital designs to electronic or mechanical devices - on demand, anytime, anywhere.

Nano Dimension’s strategy is driven by the application of deep learning-based AI to drive improvements in manufacturing capabilities by using self-learning & self-improving systems, along with the management of a distributed manufacturing network via the cloud.

Nano Dimension serves over 2,000 customers across vertical target markets such as aerospace & defense, advanced automotive, high-tech industrial, specialty medical technology, R&D and academia. The company designs and makes Additive Electronics and Additive Manufacturing 3D printing machines and consumable materials. Additive Electronics manufacturing machines enable the design and development of High-Performance-Electronic-Devices (Hi-PED®s). Additive Manufacturing includes manufacturing solutions for production of metal, ceramic, and specialty polymers-based applications - from millimeters to several centimeters in size with micron precision.

Through the integration of its portfolio of products, Nano Dimension is offering the advantages of rapid prototyping, high-mix-low-volume production, IP security, minimal environmental footprint, and design-for-manufacturing capabilities, which is all unleashed with the limitless possibilities of additive manufacturing. For more information, please visit  www.nano-di.com.


Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 and other Federal securities laws. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions or variations of such words are intended to identify forward-looking statements. Because such statements deal with future events and are based on Nano Dimension’s current expectations, they are subject to various risks and uncertainties, and actual results, performance or achievements of Nano Dimension could differ materially from those described in or implied by the statements in this press release. For example, Nano Dimension is using forward-looking statements when it discusses its growing revenues, trajectory, pipeline, customer relationships, R&D, build up of sales and marketing infrastructure, the upcoming consolidation waves in its industry, its aim at value and expected returns, notable opportunities for acquisitions, that there will be a few leaders that come to dominate digital manufacturing, potential obstacles to the Company’s plans and organic growth. The forward-looking statements contained or implied in this press release are subject to other risks and uncertainties, including those discussed under the heading “Risk Factors” in Nano Dimension’s Annual Report on Form 20-F filed with the Securities and Exchange Commission (“SEC”) on March 30, 2023, and in any subsequent filings with the SEC. Except as otherwise required by law, Nano Dimension undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. References and links to websites have been provided as a convenience, and the information contained on such websites is not incorporated by reference into this press release. Nano Dimension is not responsible for the contents of third-party websites.


NANO DIMENSION INVESTOR RELATIONS CONTACT
Yael Sandler, CFO | ir@nano-di.com


 
Unaudited Consolidated Statements of Financial Position as at
 
 June 30,December 31,
 2022 2023 20223 
(In thousands of USD)(Unaudited)(Unaudited) 
Assets   
Cash and cash equivalents706,220               454,555  685,362 
Bank deposits511,093               499,841  346,663 
Investment in securities20,574                         —  — 
Restricted deposits77                         60  60 
Trade receivables5,811                 12,523  6,342 
Other receivables6,654                    5,360  6,491 
Inventory15,982                 19,546  19,400 
Total current assets1,266,411               991,885  1,064,318 
    
Restricted deposits585                       858  850 
Bank deposits28,702                         —  — 
Investment in securities—               172,185  114,984 
Deferred tax505                       249  115 
Other receivables—                       826  809 
Property plant and equipment, net11,617                 14,014  5,843 
Right-of-use assets14,172                 14,135  16,539 
Intangible assets20,437                         —  — 
Total non-current assets76,018               202,267  139,140 
Total assets1,342,429            1,194,152  1,203,458 
    
Liabilities   
Trade payables3,511                    3,216  3,722 
Financial derivatives and deferred consideration9,558                         —  8,798 
Other payables21,082                 25,784  24,150 
Current portion of other long-term liability355 274 363 
Total current liabilities34,506                 29,274  37,033 
    
Liability in respect of government grants1,862                    1,882  1,492 
Employee benefits306                    2,485  1,462 
Liability in respect of warrants808                       140  69 
Lease liability10,969                 10,168  12,374 
Deferred tax liabilities279                         —  — 
Other long-term liabilities819                         —  — 
Loan from banks912 647 736 
Total non-current liabilities15,955                 15,322  16,133 
Total liabilities50,461                 44,596  53,166 
    
Equity   
Non-controlling interests553                       892  767 
Share capital387,312               396,238  388,406 
Share premium and capital reserves1,284,324            1,298,124  1,296,194 
Treasury shares(1,509)               (24,768)(1,509)
Foreign currency translation reserve220                    1,176  583 
Remeasurement of net defined benefit liability (IAS 19)3,127                    1,448  2,508 
Accumulated loss(382,059)            (523,554)(536,657)
Equity attributable to owners of the Company1,291,415            1,148,664  1,149,525 
Total equity1,291,968            1,149,556  1,150,292 
Total liabilities and equity1,342,429            1,194,152  1,203,458 

_______________
3 The December 31, 2022 balances were derived from the Company’s audited annual financial statements.


  
Unaudited Consolidated Statements of Profit or Loss and Other Comprehensive Income 
  
 Six Months Ended
June 30,
 Three Months Ended
June 30,
 Year ended
December 31,		 
 2022 2023 2022 2023 2022 
 ThousandsThousandsThousandsThousandsThousands
 USDUSDUSDUSDUSD
Revenues21,531      29,702  11,101         14,737  43,633 
Cost of revenues13,731      16,447  7,151           8,180  24,943 
Cost of revenues - write-down of inventories and impairment of assets recognized in business combination and technology3,219           194  370                62  4,639 
Total cost of revenues16,950      16,641  7,521           8,242  29,582 
Gross profit4,581      13,061  3,580           6,495  14,051 
Research and development expenses36,235      35,636  18,365         16,386  75,763 
Sales and marketing expenses19,423      15,703  10,115           8,217  38,833 
General and administrative expenses13,949      23,355  7,207         12,322  30,457 
Impairment losses on intangible assets—            —  —                —  40,523 
Operating loss(65,026)   (61,633)(32,107)       (30,430)(171,525)
Finance income7,810      80,780  5,230         23,954  22,965 
Finance expense16,835        6,442  13,431           2,852  79,471 
Income (loss) before taxes on income(74,051)     12,705  (40,308)         (9,328)(228,031)
Taxes (expenses) benefit789         (152)334              (78)(264)
Income (loss) for the period(73,262)     12,553  (39,974)         (9,406)(228,295)
Loss attributable to non-controlling interests(437)        (550)(242)           (287)(872)
Income (loss) attributable to owners(72,825)     13,103  (39,732)         (9,119)(227,423)
      
Income (loss) per share     
Basic income (loss) per share(0.28)0.05 (0.15)(0.04)(0.88)
      
Other comprehensive income items that after initial recognition in comprehensive income were or will be transferred to profit or loss     
Foreign currency translation differences for foreign operations(1,238)          597  (1,006)             194  (844)
Other comprehensive income items that will not be transferred to profit or loss     
Remeasurement of net defined benefit liability (IAS 19), net of tax3,127      (1,060)3,127          (1,060)2,508 
Total other comprehensive income (loss) for the period1,889         (463)2,121            (866)1,664 
Total comprehensive income (loss) for the period(71,373)     12,090  (37,853)       (10,272)(226,631)
Comprehensive loss attributable to non-controlling interests(488)        (546)(278)           (296)(892)
Comprehensive income (loss) attributable to owners of the Company(70,885)     12,636  (37,575)         (9,976)(225,739)


Consolidated Statements of Changes in Equity (Unaudited)
(In thousands of USD)

 Share capitalShare premium and capital reservesRemeasurement of IAS 19Treasury sharesForeign currency translation reserveAccumulated lossTotalNon-controlling interestsTotal equity
 ThousandsThousandsThousandsThousandsThousandsThousandsThousandsThousandsThousands
For the six months ended
June 30, 2023:		USDUSDUSDUSDUSDUSDUSDUSDUSD
Balance as of December 31, 2022   388,406  1,296,194         2,508  (1,509)583(536,657)1,149,525   767   1,150,292  
Investment of non-controlling party in subsidiary— — —  —  ——   —  671  671  
Income for the period— — —  —  —13,103  13,103  (550)12,553  
Other comprehensive income (loss) for the period— — (1,060)—  593—  (467)4  (463)
Exercise of warrants, options and
conversion of convertible notes		7,832 (7,832)—  —  ——   —  —  —  
Repurchase of
 treasury shares		—  — —  (23,259)——  (23,259)—  (23,259)
Share based payment acquired — (1,780)—  —  ——  (1,780)—  (1,780)
Share-based Compensation— 11,542  —  —  ——  11,542  —  11,542  
Balance as of June 30, 2023 396,238  1,298,124  1,448  (24,768)1,176(523,554)1,148,664 892   1,149,556  


 Share capitalShare premium and capital reservesRemeasurement of IAS 19Treasury sharesForeign currency translation reserveAccumulated lossTotalNon-controlling interestsTotal equity
ThousandsThousandsThousandsThousandsThousandsThousandsThousandsThousandsThousands
For the three months ended
June 30, 2023:		USDUSD USD USD USDUSD USD USD USD 
Balance as of March 31, 2023     389,943   1,300,781           2,508  (19,901)             973    (514,435)  1,159,869               578    1,160,447  
Investment of non-controlling party in subsidiary     — —      —  —  — —  —  610    610  
loss for the period— —  —  —  — (9,119)(9,119)(287)(9,406)
Other comprehensive income (loss) for the period— —  (1,060)—  203 —  (857)(9)(866)
Exercise of warrants, options and
conversion of convertible notes		6,295 (6,295)—  —  — —  —  —  —  
Repurchase of
 treasury shares		— —   —  (4,867)— —  (4,867)—  (4,867)
Share based payment acquired— (1,780)—  —  — —  (1,780)—  (1,780)
Share-based Compensation— 5,418  —  —  — —  5,418  —  5,418  
Balance as of June 30, 2023396,238 1,298,124   1,448  (24,768)1,176 (523,554) 1,148,664  892  1,149,556  



Consolidated Statements of Cash Flows (Unaudited)
(In thousands of USD)

 Six Months Ended
June 30,		Three Months Ended
June 30,		Year ended
December 31
 2022 2023 2022 2023 2022 
Cash flow from operating activities:     
Net income (loss)(73,262)             12,553  (39,974)         (9,406)(228,295)
Adjustments:     
Depreciation and amortization2,856                2,963  1,715           1,540  7,283 
Impairment losses—                    —  —                —  40,523 
Financing (income) expenses, net12,555            (17,622)10,361          (9,470)(1,769)
Revaluation of financial liabilities accounted at fair value(2,917)                 485  (1,547)             294  (4,516)
Revaluation of financial assets accounted at fair value(613)           (57,201)(613)       (11,925)62,791 
Loss (gain) from disposal of property plant and equipment and right-of-use assets(6)                 345  (3)             221  948 
Increase in deferred tax(1,332)                  (95)(871)             (92)(581)
Share-based compensation19,337              11,542  9,214           5,418  32,563 
Other113                    68  19                23  166 
 29,993            (59,515)18,275        (13,991)137,408 
Changes in assets and liabilities:                  —   
(Increase) decrease in inventory(1,878)             (1,212)(1,410)           (667)(4,603)
(Increase) decrease in other receivables(297)                 669  554           1,520  (1,978)
(Increase) decrease in trade receivables(1,959)             (6,039)216          (2,331)(1,992)
Increase (decrease) in other payables1,397              (1,345)(327)           (817)5,281 
Increase (decrease) in employee benefits1,736                 (399)588              162  1,497 
Increase (decrease) in trade payables839                 (828)110          (2,633)628 
      
 (162)             (9,154)(269)         (4,766)(1,167)
Net cash used in operating activities(43,431)           (56,116)(21,968)       (28,163)(92,054)
      
Cash flow from investing activities:     
Change in bank deposits(46,491)         (151,391)(24,584)        77,106  141,555 
Interest received2,491              17,998  1,729           6,706  17,465 
Change in restricted bank deposits(75)                  (34)(95)             237  (327)
Acquisition of property plant and equipment(4,539)             (7,121)(2,564)         (3,177)(9,388)
Acquisition of subsidiaries, net of cash acquired(18,159)                   —  (35)               —  (31,057)
Payment of a liability to pay a contingent consideration of business combination(9,999)             (9,255)(9,999)         (5,295)(10,708)
Acquisition of financial assets in fair value through profit and loss(17,803)                   —  (17,803)               —  (177,775)
Decrease in deposit in escrow—                    —  —                —  3,362 
Other—                    —  —                —  (800)
Net cash from (used in) investing activities(94,575)         (149,803)(53,351)        75,577  (67,673)
      
Cash flow from financing activities:     
Lease payments(1,881)             (2,471)(1,085)         (1,251)(4,151)
Repayment long-term bank debt(218)                  (96)(138)             (39)(406)
Proceeds from non-controlling interests—                  550  —              550  510 
Amounts recognized in respect of government grants liability, net(93)                (172)(48)             (87)(221)
Payments of share price protection recognized in business combination(744)             (1,780)(744)         (1,780)(1,005)
Repurchase of treasury shares—            (19,741)—          (1,349)— 
Net cash used in financing activities(2,936)           (23,710)(2,015)         (3,956)(5,273)
Increase (decrease) in cash(140,942)         (229,629)(77,334)        43,458  (165,000)
Cash at beginning of the period853,626            685,362  788,141        412,172        853,626 
Effect of exchange rate fluctuations on cash(6,464)             (1,178)(4,587)         (1,075)(3,264)
Cash at end of the period706,220            454,555  706,220        454,555        685,362 
      
Non-cash transactions:     
Property plant and equipment acquired on credit35                  328  (176)           (148)52 
Repurchase of treasury shares on credit—                3,518  —           3,518  — 
Recognition of a right-of-use asset11,250                  199  13                72  15,196 
Acquisition of financial assets in fair value through profit and loss2,158 — 2,158 — — 
           

Non-IFRS Measures

The following are reconciliations of income before taxes, as calculated in accordance with International Financial Reporting Standards (“IFRS”), to EBITDA and Adjusted EBITDA, as well as of gross profit, as calculated in accordance with IFRS, to Adjusted Gross Profit:

 For the Six-Months
Period Ended June 30,		For the Three-Months
Period Ended June 30,
 2023 
 In thousands of USDIn thousands of USD
Net income (loss)12,553 (9,406)
Tax expenses152 78 
Depreciation and amortization2,963 1,540 
Interest income(23,567)(12,047)
EBITDA (loss)(7,899)(19,835)
Finance income from revaluation of assets and liabilities(56,299)(11,522)
Exchange rate differences5,475 2,430 
Share-based compensation expenses11,542 5,418 
Adjusted EBITDA (loss)(47,181)(23,509)
     


 For the Six-Months Period
Ended June 30,		For the Three-Months Period
Ended June 30,
 2022202320222023
Gross profit4,58113,0613,5806,495
Depreciation and amortization3,298186436120
Share-based compensation expenses743812419390
Adjusted gross profit8,62214,0594,4357,005
     

EBITDA is a non-IFRS measure and is defined as income before taxes, excluding depreciation and amortization expenses and amortization of assets recognized in business combination and interest income. We believe that EBITDA, as described above, should be considered in evaluating the Company’s operations. EBITDA facilitates the Company’s performance comparisons from period to period and company to company by backing out potential differences caused by variations in capital structures, and the age and depreciation charges and amortization of fixed and intangible assets, respectively (affecting relative depreciation and amortization expense, respectively), and EBITDA is useful to an investor in evaluating our operating performance because it is widely used by investors, securities analysts and other interested parties to measure a company’s operating performance without regard to the items mentioned above.

Adjusted EBITDA is a non-IFRS measure and is defined as income before taxes, excluding depreciation and amortization expenses and amortization of assets recognized in business combination, interest income, finance income for revaluation of assets and liabilities, exchange rate differences and share-based payments. We believe that Adjusted EBITDA, as described above, should also be considered in evaluating the Company’s operations. Like EBITDA, Adjusted EBITDA facilitates the Company’s performance comparisons from period to period and company to company by backing out potential differences caused by variations in capital structures, and the age and depreciation charges and amortization of fixed and intangible assets, respectively (affecting relative depreciation and amortization expense, respectively), as well as from revaluation of assets and liabilities, exchange rate differences and share-based payment expenses. Adjusted EBITDA is useful to an investor in evaluating our operating performance because it is widely used by investors, securities analysts and other interested parties to measure a company’s operating performance without regard to non-cash items, such as expenses related to revaluation, exchange rate differences and share-based payments.

Adjusted gross profit, excluding depreciation and amortization and share-based compensation expenses, is a non-IFRS measure and is defined as gross profit excluding amortization expenses. We believe that adjusted gross profit, as described above, should also be considered in evaluating the Company’s operations. Adjusted gross profit facilitates gross profit and gross margin comparisons from period to period and company to company by backing out potential differences caused by variations in amortization of inventory and intangible assets. Adjusted gross profit is useful to an investor in evaluating our performance because it enables investors, securities analysts and other interested parties to measure a company’s performance without regard to non-cash items, such as amortization expenses. Adjusted gross margin is calculated by dividing the adjusted gross profit by the revenues.

EBITDA, Adjusted EBITDA, and Adjusted gross profit do not represent cash generated by operating activities in accordance with IFRS and should not be considered alternatives to net income (loss) as indicators of our operating performance or as measures of our liquidity. These measures should be considered in conjunction with net income (loss) as presented in our consolidated statements of profit or loss and other comprehensive income. Other companies may calculate these measures differently than we do.


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