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STS Group AG

Investor Presentation • May 15, 2019

418_ip_2019-05-15_834c4a89-a329-4da7-9c8e-777b2713be2c.pdf

Investor Presentation

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Disclaimer

This presentation may contain forward-looking statements that are subject to risks and uncertainties, including those pertaining to the anticipated benefits to be realized from the proposals described herein. Forward-looking statements may include, in particular, statements about future events, future financial performance, plans, strategies, expectations, prospects, competitive environment, regulation and supply and demand. STS Group AG has based these forward-looking statements on its current views and expectations and on certain assumptions of which many are beyond STS Group AG's control. Actual financial performance could differ materially from that projected in forward-looking statements due to the inherent uncertainty of estimates, forecasts and projections, and financial performance may be better or worse than anticipated. Given these uncertainties, readers should not put undue reliance on any forward-looking statements. The information contained in this presentation is subject to change without notice and STS Group AG does not undertake any duty to update the forward-looking statements, and the estimates and assumptions associated with them, except to the extent required by applicable laws and regulations.

This presentation includes references to non-IFRS financial measures, including, but not limited to: FOCF, EBITDA, Adjusted EBITDA, EBITDA Margin, Adjusted EBITDA Margin, EBIT, EBIT margin, capital expenditure as percentage of revenue, other operating income, net financial debt, and net working capital. We have provided these measures and other information in this presentation because we believe they provide investors with additional information to assess our performance. Our use of these supplemental financial measures may vary from others in our industry and should not be considered in isolation or as an alternative to our results as reported under IFRS.

Due to rounding, numbers presented throughout this and other documents may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.

Presenter

Andreas Becker and Dr. Ulrich Hauck will present STS Group AG Financial Figures for the first three months 2019.

Andreas BeckerCEOAd B k

Andreas Becker has been Chief Executive Officer (CEO) of the STS Group since its foundation in 2017. His areas of responsibility include in particular sales, purchasing, research & development and human resources. In addition, the companies MCR and STS China report directly to him.

Before Andreas Becker lead STS Acoustics as CEO (2013). Between 1996 and 2013 he held various management positions at the Autoneum Group, a global automotive supplier like STS Group. From 2010 to 2013, he was also responsible for the management in Italy as well as the Truck Business Worldwide division.

responsibility comprise in particular controlling, accounting, treasury, taxes and IT.

kUlrich Hauck took over the CFO role at STS Group April 1, 2019. His areas of Prior to joining STS Group, Ulrich Hauck held the positions of Group CFO at Schaeffler, Corporate Senior Vice President at Bayer AG, heading global accounting and controlling of Bayer and Vice President at Rheinmetall. He started his career as CPA and tax consultant at Deloitte.

Agenda

  • 1. Overview
  • 2. Business Highlights 3M 2019
  • 3. Financial Highlights Q1 2019
  • 4. Outlook

Earnings Call - May 15, 2019

Earnings Call - May 15, 2019

Overview

3M 2019 results

Weaker 3M 2019 were nearly in line with management expectations for 2019.

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Key aspects:

  • Revenues decreased by 12.3 % mainly due to:
  • BU Acoustics weak passenger car market in Italy;
  • BU Plastics planned end of a major order;
  • BU China overall decline in market and logistical bottlenecks at a major customer.
  • EBITDA increased due to completed integration activities. Adj. EBITDA impacted by lower volumes.
  • Polish plant improved earnings in Q1 2019, but still negative EBITDA contribution. Measures to increase capacity utilization and further cost efficiency in place.
  • Initial costs at the new production location in Shiyan.

Business Highlights 3M 2019 Focus China

Highlights China:

  • April 11, 2019 opening ceremony of Shiyan plant.
  • Next Step: Introduction of injection molding technology in new plant.
  • Continuously strong order intake.
  • Several project SOPs expected in 2HY 2019.
  • Volume and market share growth for

FY 2019forecasted.

Earnings Call - May 15, 2019

Financial Highlights Q1 2019

Key Figures

Key Financials show overall mixed picture.

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1) Not meaningful due to share capital in Q 1 2018 of only 50.000 shares 2) FOCF (= Free Operating Cash Flow) = Op CF - CAPEX - Leasing Cash Out 3) NFD (=Net Financial Debt) = Bank loans + Third Party loans + Recourse Factoring - Cash

Sales growth

Sales decline versus prior year across all BU's due to overall weak conditions on automotive markets

Quarter-on-quarter sales growth of 3.9%

Comments:

  • Market driven sales decline across all Business Units
  • Quarter-on-quarter sales growth of 3.9%
  • Planned phase-out of significant project at BU Plastics in Q 2 2018 with negative topline impact (-3.2 mEUR)
  • Positive FX effect of 0.4 mEUR

Financial Highlights Q1 2019 2

Adj. EBITDA

Mostly volume driven decline of Adj. EBITDA margin in Q1 2019; however margin improvement over Q4 2018.

Comments:

  • EBITDA in Q1 2019 improved over PY Quarter and Quarter 4, 2018
  • Adj. EBITDA in Q1 2019 significantly below PY quarter, however up on a quarter-onquarter basis
  • Benefit from IFRS 16 of ard. 1.0 mEUR in Q1 2019, thereof 0.4 mEUR each for BU Acoustics, Plastics

Adj. EBITDA margin:

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1) 50.000 shares until April 12, 2018; 1.050.000 until April 24, 2018; 5.000.000 until Mai 7, 2018; 6.000.000 from Mai 8, 2018 on. Financial Highlights Q1 2019 Net IncomeNet income -1.3 mEUR in Q1 2019, improved over prior year and Q4 2018. Net Income in mEUR Comments: Net income and EPS still negative in Q1 2019, however improved vs. PY Q1 and Q4, 2018 PY quarterly EPS not comparable due to different share base.-1.24.3Adj EBITDA-1.34.3EBITDA-4.4D&A-0.1EBIT Interest/Tax Net ResultQ1 Q2 Q3 Q4 Q1 -34.30-0.55-0.03-0.48-0.22Earnings per share (in €)1): 2018 2019 Q3 -0.1Q1 -1.7Q2 Q1 Q4 -1.1-1.9-1.320182019

Financial Highlights Q1 2019 4

Cash Flow

CAPEX in Q1 with 3.1 mEUR or 3.3% of salesslightly above prior year (PY quarter 2.9 mEUR, 2.6%)

Free Operating Cash Flow in Q1 -4.9 mEUR level with PY Q1. Significant saisonal built up of Trade Working Capital in Q1

www.sts.group STS Group © 2019 Slide 12

Q1

-4.9

5

Financial Highlights Q1 2019 Net DebtLeverage Leverage ratio of 1.7 as per end of Q1 2019 on a very solid level

OutlookCapital Market

Higher liquidity in 2019. Average daily trading volume has beensignificantly increased.

XETRA:

  • 2018 ard. 6.500 pcs.
  • 2019 ard. 17.000 pcs.
  • Tradegate:
  • 2018 ard. 500 pcs
  • 2019 ard. 8.000 pcs.

12.00 €

17.00 €

Outperform

Buy

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05/04/2019 MainFirst

27/02/2019 H&A

OutlookGuidance

2019

Mangement confirms guidance 2019 due to positive outlook for 2HY.

2019

  • Market environment in the automotive industry will continue to be challenging
  • Revenue expected to remain at previous year's level
  • Adjusted EBITDA at least at previous year's level (2018: 23.7 mEUR), increase of EBITDA by ≥ 100% compared to previous year (2018: 11.9 mEUR)

Assumptions

  • Challenging market environment in first half year in line with management expectations.
  • For the second half of the current year management expects:
  • A positive market development in the relevant vehicle market;
  • A stronger Chinese commercial vehicle market;
  • Start up of larger projects in China scheduled.

Outlook

Financial Calendar 2019

Conferences and relevant publications in 2019.

Upcoming conferences / publications…

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