26 August 2021

Q1 2021/22 Results

In Q1 2021/22, Novem reported revenue growth of +81.7% in comparison to the same quarter previous year
Adj. EBIT margin recovered well to 16.5% versus last year when the company posted a minor loss of €-1.1m
As expected, the business rebounded strongly against Q1 2020/21, which was hit the most by the pandemic
On a LTM basis, Adj. EBIT margin came in at 16.8%, in line with the guidance given in the context of the IPO
As also indicated at that time, Novem fully repaid its €400.0m bond subsequent to the listing of the company
As a result, the net financial debt ratio could be further lowered to 1.4x LTM Adj. EBITDA as of 31 July 2021
Risks of delay and disruption in the supply chain have risen notably due to shortages of certain commodities
Production output at customers has been adversely affected most recently and become increasingly volatile

Current trading conditions allow only limited visibility

	Q1 Jun 2020/21	Q1 Jun 2021/22
Revenue	85.9	156.1
Adj. EBIT (€m)	-1.1	25.8
Adj. EBIT margin (%)	-1.2%	16.5%
Free cash flow (€m)	-13.5	10.1
Cash conversion (%)	29.9%	93.9%
Net leverage (x Adj. EBITDA)	n/a	1.5x

2 GROUP RESULTS

Page 5

Revenue

In Q1 2021/22, overall revenue of €156.1m exceeded previous year (PY) by +81.7%
Revenue Series of €143.5m contributed 92.0% to total revenue and was driven by higher volumes across all relevant platforms
As was to be expected, the business rebounded strongly after the global Covid-19 lockdown in Q1 2020/21
The revenue share of the Top 3 customers (Daimler, BMW, Audi) accounted for c.74% (-3.3pp y/y)
Tooling added €12.5m to total revenue which was well above PY when project work with the OEMs came almost to a standstill
If FX rates had remained constant at PY level, reported revenue would have been higher by +1.4%
LTM revenue recovered strongly from the previous quarter due to the "carve-out" of the lockdown period in the last twelve months

Adj. EBIT

Adj. EBIT in Q1 2021/22 outperformed PY by €+26.9m which translated into a margin of 16.5% for the period under review
Outperformance was largely attributable to the increased revenue across all regions except for Asia
Lower personnel and other operating expenses resulted mainly from highly effective Covid-19 savings measures last year

Free cash flow

With the recovery of trading conditions, free cash flow turned positive to €+10.1m in Q1 2021/22, relative to Q1 2020/21, when free cash flow was negative at €-13.5m due to the worldwide lockdown
While cash flow used in investing activities remained almost on the same level as PY, cash flow from operating activities recorded €23.3m higher than last year
Improvement mainly due to the marked increase in profit by €+27.6m; the balance being attributable to Others (€-4.3m)
Overall trade working capital (excluding tooling net and contract assets) was relatively stable. However, individual constituents developed variably
LTM free cash flow saw a sharp rise to €113.3m because of the exclusion of the cash drain in Q1 2020/21

Capital expenditure

In Q1 2021/22, capital expenditure was €2.1m compared to €4.6m last year
This was achieved through cautious and active capex spending
As a result, the capex ratio declined to 1.3% of revenue (5.4% PY)
The company's asset base is solid and fully invested with limited investments required in the short term
LTM capital expenditure was €13.3m, which lowered the capital expenditure ratio to 2.0%
Management considers this level to be temporary due to Covid-19 and confirms the general guidance of c.4.0%
It should be noted that, in this presentation, capital expenditure excludes any currency translation effects

Total working capital

LTM total working capital (€m)

As of 30 June 2021, total working capital of €140.9m was +0.9% above last year
Deviation of €-1.2m compared to PY resulted from higher trade payables (€+15.0m), lower trade receivables (€+2.5m) as well as decreased contract assets (€+4.3m); on the other hand, higher inventories (€-14.1m) and tooling net (€-8.8m)
As % of LTM revenue, total working capital stood at 20.9%, highlighting management's close attention to all aspects of working capital development
Trade working capital (excluding tooling net and contract assets) decreased from €56.0m to €52.7m (-5.9% y/y)
Measured in days outstanding, all ratios developed favourably: DIO 40 (52 PY), DSO 31 (59 PY), DPO 57 (54 PY)
Novem purposely carried excess stock to mitigate the implications of the current supply shortages in the automotive industry

Capital structure

Gross financial debt Cash and cash equivalents

LTM net leverage (€m)

As of 30 June 2021, cash rose by €+2.5m compared to 31 March 2021, bolstering the company's liquidity reserves further
Net leverage ratio strongly improved from 1.9x to 1.5x at the end of Q1 2021/22
As of 30 June 2021, the principal sources of funds represented €177.8m cash (31 March 2021: €175.3m) and €48.5m derived from non-recourse factoring (31 March 2021: €40.1m)

Subsequent events

As stated in the context of the IPO, Novem redeemed its €400.0m bond in July 2021 through new equity from the private placement and the drawdown of a €250.0m term loan
As part of the €310.0m senior facilities agreement the €60.0m revolving facility remained undrawn as of 31 July 2021
Refinancing process was successfully completed as per plan

Revenue by operating segments

Europe Americas Asia

Revenue growth was largely driven by Europe (+106.3% y/y) and the Americas (+130.7% y/y)
Both segments showed a pronounced rebound compared to the lockdown period last year; all platforms contributed to the strong recovery of the top line, especially the big SUV models (Audi Q5, BMW X5/X6/X7, Daimler GLE, GM Escalade) in the Americas
Revenue in Asia was no longer compromised by the pandemic in Q1 2020/21 (pent-up demand) and therefore does not show the rebound Europe and the Americas do; the region suffered a moderate decline (-7.3% y/y) mainly due to lower revenue with Daimler E-class
LTM revenue split by region showed the following composition: 52.4.% Europe, 34.3% Americas and 13.4% Asia
Compared to last quarter, LTM revenue surged from €602.7m to €673.0m (+11.7%)

Adj. EBIT by operating segments

Europe Americas Asia

All segments contributed to a considerable turnaround of Adj. EBIT by €+26.9m
On a segmental basis, Adj. EBIT margin improved strongly and consistently, starting with Europe 15.9% (-8.8% PY), followed by Americas 12.4% (-16.1% PY) and Asia 28.9% (26.1% PY)
Improvement in Europe and Americas primarily driven by revenue growth, partly tempered by higher personnel and other operating expenses which could not be temporarily absorbed by short-time work or reduced through Covid-19 savings measures
Adj. EBIT in Asia reached almost the same level as last year, however, the company received lower governmental grants than previously
LTM Adj. EBIT soared to €113.3m with Q4 2020/21 representing the strongest quarter in the last twelve months

Profit and loss statement

Profit and loss statement (€m)

Q1	Q1
2020/21	2021/22

85	156
9	1

3	9
4	0

89	165
3	0


0	2
6	7

44	78
1	8

29	40
6	0

7	7
6	6

9	15
6	6

-1	25
1	8


0	0
2	6


-1	25
2	2


2	2
0	9

12	12
6	7

-10	-9
6	8


0	6
7	3

0	1
7	0

7	7
6	3


-19	8
5	2

Balance sheet

Balance sheet (€m)

	30 Jun 2020	30 Jun 2021		30 Jun 2020	30 Jun 2021

			equity Total	-533 .7	-497 .7
Intangible assets Property , plant and equipment	3 0 196 3	3 5 182 0	Pensions and similiar obligations Tax liabilities	31 7 0 0	34 9 0 0
Trade receivables	51 5	48 5	Other provisions	9 0	5 2
Other non-current assets	14 4	14 6	Financial liabilities	836 7	863 2
Deferred tax assets	16 2	8 0	Other liabilities	34 9	32 3
			Deferred liabilities tax	13 8	3 7
Total non-current assets	281 4	256 .7	Total liabilities non-current	926 0	939 3
Inventories	105 0	107 2	Tax liabilities	17 7	18 8
Trade receivables	43 8	42 0	Other provisions	40 0	54 5
Other receivables	22 8	28 8	Financial liabilities	78 6	3 0
Other current assets	20 1	17 4	Trade payables	36 3	50 6
Cash and cash equivalents	174 2	177 8	Other liabilities	82 4	62 8
Asset held for sale	0 0	1 2
Total current assets	365 9	374 6	Total liabilities current	255 0	189 6
Assets	647 3	631 2	Equity and liabilities	647 3	631 2

Cash flow statement

Cash flow statement (€m)

	Q1 2020/21	Q1 2021/22

Profit for the period	-19 5	8 2
Income expense (+)/income (-) tax	0 7	6 3
(+)/(-) Financial result net	12 0	12 0
Depreciation , amortization and impairment	7 6	7 6
Other non-cash expenses (+)/income (-)	-10 3	-6 7
Increase (-)/decrease (+) in inventories	-0 0	-16 0
(-)/decrease (+) Increase in trade receivables	16 2	12 1
Increase (-)/decrease (+) in other assets	-7 3	-1 4
Increase (-)/decrease (+) in deferred taxes	0 8	1 0
(-)/decrease expenses/deferred Increase (+) in prepaid income	-1 5	-3 3
(+)/decrease (-) Increase in provisions	7 4	6 6
Increase (+)/decrease (-) in trade payables	-21 6	-11 3
Increase (+)/decrease (-) in other liabilities	1 2	0 4
Gain (-)/loss (+) on disposals of non-current assets	0 0	-0 0
Cash from (+)/cash for (-) for received paid income taxes	-2 5	-2 4
Cash flow from operating activities	-10 4	12 9

Cash flow statement (€m)

	Q1 2020/21	Q1 2021/22

Cash received (+) from disposals of intangible assets	0 0	0 0
Cash received (+) from disposals of , plant and equipment property	-0 0	0 0
Cash (-) for paid investments in intangible assets	-0 0	-0 1
Cash paid (-) for investments in , plant and equipment property	-3 6	-3 4
Interest received (+)	0 6	0 7
(+) Dividends received	0 000	0 000
Cash flow from/(used in) investing activities	-3 1	-2 8

Cash of loans repayments	-1 8	-0 0
Cash received from loans	0 000	0 000
Cash (-) shareholders of the repayments to parent company	-0 0	-0 0
Cash (-) of shareholders loans repayments	0 0	0 0
Cash from (+) of received issuance bonds	0 6	0 4
Cash paid for (-) subsidies/grants	-0 0	-0 0
Cash paid for (-) finance leases	-1 6	-2 4
(-) Interest paid	-5 6	-5 6
Dividends paid (-)	0 0000	0 0000
Cash flow from/(used in) financing activities	-8 5	6 -7

increase (+)/ (-) in equivalents Net decrease cash and cash	-21 9	2 5
Effect of exchange fluctuations on cash and cash equivalents rate	0 00	0 00
Cash and cash equivalents the beginning of the reporting period at	196 2	175 3
Cash equivalents of reporting period and cash the end the at	174 2	177 8

EBIT adjustments

EBIT adjustments (€m)

	Q1 2020/21	Q1 2021/22

Revenue	85 9	156 1
EBIT	-1 2	25 2
EBIT margin	-1 4%	16 2%
Restructuring
Exceptional ramp-up costs Single impairments	0 00000 0 00000	0 00000 0 00000
Covid-19 costs	0 000000	0 2
Others	0 2	0 3
Exceptional items	0 2	0 6
Discontinued operations

Adjustments	0 2	0 6
Adj EBIT	-1 1	25 8
Adj EBIT margin	-1 2%	16 5%
Depreciation , amortization and impairment	7 6	7 6

Adj EBITDA	6 6	33 4
Adj EBITDA margin	7 7%	21 4%

Definitions and basis of preparation of the financial information

Adj. EBIT is defined as EBIT as adjusted for certain adjustments which management considers to be non-recurring in nature, as Novem believes such items are not reflective of the ongoing performance of the business
Adj. EBITDA is defined as profit for the year before income tax result, financial result and amortization, depreciation and write-downs as adjusted for certain adjustments which management considers to be non-recurring in nature, as Novem believes such items are not reflective of the ongoing performance of the business
Adj. EBIT margin is defined as Adj. EBIT divided by revenue
Adj. EBITDA margin is defined as Adj. EBITDA divided by revenue
Capital expenditure is defined as the sum of cash paid for investments in property, plant and equipment and cash paid for investments in intangible assets excluding currency translation effects
Cash conversion rate is defined as Adj. EBITDA less capital expenditure divided by Adj. EBITDA
Days inventory outstanding (DIO) is defined by dividing inventories (as shown in the consolidated statement of financial position, but excluding tooling) by revenue generated from the sale of series trim elements in the last three months
Days sales outstanding (DSO) is defined by dividing trade payables (as shown in the consolidated statement of financial position, but excluding tooling) by revenue generated from the sale of series trim elements in the last three months
Days payables outstanding (DPO) is defined by dividing trade payables (as shown in the consolidated statement of financial position, but excluding tooling) by net costs series incurred in the three months
EBIT is defined as profit for the year before income tax result and financial result
EBITDA is defined as profit for the year before income tax result, financial result and amortization, depreciation and write-downs
Net leverage ratio is defined as the ratio of net financial debt to Adj. EBITDA
Free cash flow is defined as the sum of cash flow from operating and investing activities
Trade working capital is defined as the sum of inventories non-tooling and trade receivables related to non-tooling less trade payables related to non-tooling
Total operating performance is defined as the sum of revenue and increase or decrease in finished goods
Total working capital is defined as the sum of inventories, trade receivables and contract assets excluding expected losses less trade payables, tooling received advance payments received and other provisions related to tooling
Net financial debt is defined as the sum of liabilities from bonds and liabilities to banks less cash and cash equivalents

Date of publication

26 August 2021

Contact

[email protected] | All information is constantly updated and available. Please visit the Investor Relations Portal on the Company website:https://ir.novem.com/websites/novem/English/1/investor-relations.html

Editor

Novem Group S.A. | 19, rue Edmond Reuter | 5326 Contern | Luxembourg | www.novem.com

Disclaimer

Novem Group S.A. (the "Company", "Novem") has prepared this presentation solely for your information. It should not be treated as giving investment advice. Neither the Company, nor any of its directors, officers, employees, direct or indirect shareholders and advisors nor any other person shall have any liability whatsoever for any direct or indirect losses arising from any use of this presentation. While the Company has taken all reasonable care to ensure that the facts stated in this presentation are accurate and that the opinions contained in it are fair and reasonable, this presentation is selective in nature. Any opinions expressed in this presentation are subject to change without notice and neither the Company nor any other person is under any obligation to up-date or keep current the information contained in this presentation. Where this presentation quotes any information or statistics from any external source, you should not interpret that the Company has adopted or endorsed such information or statistics as being accurate. This presentation contains forward-looking statements, which involve risks, uncertainties and assumptions that could cause actual results, performance or events to differ materially from those described in, or expressed or implied by, such statements. These statements reflect the Company's current knowledge and its expectations and projections about future events and may be identified by the context of such statements or words such as "anticipate," "believe", "estimate", "expect", "intend", "plan", "project" and "target". No obligation is assumed to update any such statement. Numbers were rounded to one decimal. Due to rounding, numbers presented may not add up precisely to the totals provided.

Novem Group S.A. 19, rue Edmond Reuter | 5326 Contern | Luxembourg

E-Mail: [email protected] www.novem.com

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