LETTER TO SHAREHOLDERS

In the Solar segment we were once again very successful in the business year 2018. In a globally expanding energy market we see promising growth potential here for our company in the next couple of years. In addition, we were also able to position ourselves very well in the market with our products and respective orders in the Semiconductor division and the new work areas Decorative Coatings as well as Medical Technology.

The solar market will remain the most important market for SINGULUS TECHNOLOGIES in the medium-term. In the course of the climate discussion during the COP24, the annual conference of the UN Framework Convention on Climate Change (UNFCCC), a report was published in November 2018 explaining the feasibility of a European climate change based on 100 % renewable energy sources. The new scientific study shows that a transition towards 100 % renewable energies would be economically competitive compared with today’s conventional, fossil-nuclear system and that green house gas emissions could be reduced to zero even before 2050. In this scenario, solar energy would provide the biggest share with 62 % of the energy generation. In fact, photovoltaics today is already the most cost-efficient technology for electricity generation in the world and a sharp increase in the expansion of solar power capacities are recorded worldwide.

Against this background we rely on the ever increasing deployment of renewable energies with a focus on photovoltaics. We are confident for the future and we are on a path to further increase the market leadership for CIGS production machines. In addition to the already pending projects, we were able to sign several letters-of-intent (LOI) in November 2018 for the delivery of production machines for the manufacturing of CIGS thin-film solar modules were signed with the customer China National Building Materials, Beijing, China (CNBM). The production and delivery of the machines are mainly scheduled for the years 2019 and 2020. In the area of highly efficient, crystalline solar cells, e.g. based on the heterojunction technology (HJT), we are working on the introduction of additional, new machines concepts for the solar market and also see great potential here for our company in the future.

In 2018, SINGULUS TECHNOLOGIES received an order for the construction of a complex TIMARIS vacuum coating machine from a leading European manufacturer of semiconductor production machines. We see this as a confirmation for the productivity of our machines as well as for the potential in the semiconductor market.

Our company is mainly focused on the five sales markets solar, semiconductor, medical technology, consumer goods, and optical disc. Here, we focus on the sectors vacuum coating technology, wet-chemical processes, surface technology as well as thermal processing technology. SINGULUS TECHNOLOGIES' strategy is to take advantage of the existing know-how and to gain market share in existing markets as well as to transition this expertise to other markets and to win new customers.

In the past couple of years we have developed innovative machines concepts for the photovoltaic sector and for the new work areas decoration coatings as well as medical technology and subsequently introduced these machines to the market. In 2018, we received an order from the automotive sector for a complete production line of the DECOLINE II type for the finishing of three-dimensional plastic parts of car interiors. In medical technology we had received a first order exceeding EUR 10 million for the sale of processing machines for the treatment of contact lenses. At the beginning of June 2018, a follow-up order for such equipment was already received. For the business year 2019 we are expecting further sales success for these new production machines.

We intend to win new customer for the existing sales market and to increase our market shares here as well as to expand to new markets on the basis of our technologic know-how. The extensive marketing of our existing as well as of the new production systems should for the basis for a stable growth path.