Stabilus SE

Investor Presentation • Feb 4, 2019

Q1 FY2019 RESULTS

February 4, 2019

Disclaimer

Stabilus S.A. (the "Company", later "Stabilus") 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 update 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.

• 1. Financial highlights
• 1. Results by region
• 1. Results by market
• 1. Outlook
• 1. Appendix

• Financial highlights

Q1 FY2019 highlights

Fiscal year-end September

Revenue	Revenue down by 2.4% to €225.0m (- €5.6m vs. Q1 FY18); revenue change w/o FX: - 3.6% y/y NAFTA + 0.1% y/y, Europe - 2.9% y/y and Asia / Pacific and RoW - 7.4% y/y Capital Goods - 0.2% y/y, Automotive Gas Spring - 2.0% y/y, Automotive Powerise - 3.9% y/y and Vibration & Velocity Control - 5.2% y/y
Adj. EBIT	Adj. EBIT1 at €30.8m (vs. €33.9m in Q1 FY18), down 9.1% Adj. EBIT margin at 13.7% (vs. 14.7% in Q1 FY18)
Profit	Profit at €17.7m in Q1 FY19 (vs. €21.7m in Q1 FY18, thereof €4.1m lower income taxes due to non-recurring remeasurement of the deferred tax positions, as a consequence of the US tax reform in Dec 2017) Profit margin at 7.9% (vs. 9.4% in Q1 FY18)
Net leverage ratio	Net leverage ratio1 at 1.0x (vs. 1.4x as of end Q1 FY18 and 1.1x as of end FY18) Net financial debt1 at €187.8m
Outlook	FY2019 revenue outlook: c. 2% y/y revenue growth (at constant \$/€ rate vs. FY18 of 1.19) FY2019 adj. EBIT margin forecast: c. 15%

Note:

¹ For definition/calculation of KPIs like adj. EBIT, net leverage ratio etc. refer to appendix and/or our financial reports and quarterly statements under www.ir.stabilus.com.

FX = currency effect resulting from translation of NAFTA revenue from USD to EUR. Avg. fx rate of 1.14\$/€ in Q1 FY19 versus 1.18\$/€ in Q1 FY18.

Numbers rounded to one decimal. Due to rounding, numbers presented may not add up precisely to the totals provided.

Q1 FY2019 impacted by softer markets in Germany (WLTP) and China

Note: FX = currency effect resulting from translation of NAFTA revenue from USD to EUR. Avg. fx rate of 1.14\$/€ in Q1 FY19 versus 1.18\$/€ in Q1 FY18.

1.

Agenda

1. Results by region

Q1 FY2019 revenue and adj. EBIT growth – by region (y-o-y)

Note: Stabilus fiscal year-end is September. Numbers rounded to one decimal. Due to rounding, numbers presented may not add up precisely to the totals provided. FX = currency effect resulting from translation of NAFTA revenue from USD to EUR. Avg. fx rate of 1.14\$/€ in Q1 FY19 versus 1.18\$/€ in Q1 FY18. ¹ Billed-from view, without intersegment revenue.

Europe

Note: Stabilus fiscal year-end is September. ¹ External revenue only.

• Europe's light vehicle production in Q1 FY19 at 5.5m units, i.e. - 3.9% vs. Q1 FY18
• Europe's revenue decreased by €3.4m or 2.9% y/y, esp. December showing poor sales y-o-y
• Europe's automotive revenue was impacted by the weak market in Germany (conversion to WLTP): Automotive Powerise - 7.2% or - €1.9m y/y, Automotive Gas Spring - 5.3% or - €2.0m y/y;
• Industrial revenue growth lower due to softer business with distributers: Capital Goods +2.8% or €1.1m y/y, Vibration & Velocity Control - 4.8% or - €0.6m y/y
• Adj. EBIT margin at 13.9% (vs. 14.1% in Q1 FY18)

NAFTA

• NAFTA's light vehicle production in Q1 FY19 at 4.2m units, i.e. + 2.9% vs. Q1 FY18
• NAFTA's revenue + 0.1% y/y (- 3.0% y/y excluding the \$/€ currency translation effect)
• NAFTA's revenue development in Q1 FY19: Automotive Gas Spring + 8.1% y/y (+ 4.9% excl. currency effect); Automotive Powerise - 2.4% y/y (- 5.4% y/y excl. currency effect) primarily due to platform changes from dual-sided to single-sided tailgate systems; Capital Goods - 5.8% y/y (- 9.0% y/y excl. currency effect)
• Adj. EBIT margin at 14.0% (vs. 15.0% in Q1 FY8)

Note: Stabilus fiscal year-end is September. ¹ External revenue only.

FX = currency effect resulting from translation of NAFTA revenue from USD to EUR. Avg. fx rate of 1.14\$/€ in Q1 FY19 versus 1.18\$/€ in Q1 FY18.

Asia / Pacific and RoW

Note: Stabilus fiscal year-end is September. ¹ External revenue only.

• Asia/Pacific and RoW's light vehicle production in Q1 FY19 at 14.7m units, i.e. - 4.9% vs. Q1 FY18 (China - 11.3%, Japan/Korea + 8.3%, South America - 0.6%)
• Asia/Pacific and RoW's revenue decreased by 7.4% or €2.3m y/y
• Automotive Powerise +6.5% y/y reflecting continued interest in the feature; Automotive Gas Spring revenue - €1.8m or - 8.5% y/y due to the softening of the auto market in China; Vibration & Velocity Control revenue - €0.5m or - 22.7% y/y due to softer call-offs on a long-term contract

• Adj. EBIT margin decreased from 16.5% in Q1 FY18 to 11.8% in Q1 FY19, as Chinese plant overhead structure is being maintained, in order to increase the likelihood of further contract wins

• 1.

4.

5.

1. Results by market

Q1 FY2019 revenue growth – by market / business (y-o-y)

Note: Stabilus fiscal year-end is September.

¹Industrial including Capital Goods and Vibration & Velocity Control revenue.

FX = currency effect resulting from translation of NAFTA revenue from USD to EUR. Avg. fx rate of 1.14\$/€ in Q1 FY19 versus 1.18\$/€ in Q1 FY18. Numbers rounded to one decimal. Due to rounding, numbers presented may not add up precisely to the totals provided.

Q1 FY2019 revenue growth – Automotive business (y-o-y)

• Global light vehicle production in Q1 FY19 at 24.4m units, i.e. - 3.4% vs. Q1 FY18
• Automotive revenue 2.8% y/y (- 4.1% without \$/€ currency translation effect) due to weak automotive market in Germany and China
• Automotive Gas Spring revenue 2.0% y/y (- 3.0% without \$/€ currency translation effect)
• Powerise revenue 3.9% y/y (- 5.4% y/y without \$/€ currency translation effect), in spite of 6.5% revenue growth in Asia/Pacific and RoW

Note: Stabilus fiscal year-end is September.

FX = currency effect resulting from translation of NAFTA revenue from USD to EUR. Avg. fx rate of 1.14\$/€ in Q1 FY19 versus 1.18\$/€ in Q1 FY18. Numbers rounded to one decimal. Due to rounding, numbers presented may not add up precisely to the totals provided.

Q1 FY2019 revenue growth – Industrial business (y-o-y)

• From Oct 1, 2018 Commercial Furniture is part of Capital Goods business unit to better reflect customer demand for a broad product portfolio and to further increase the efficiency in CRM
• Industrial revenue decreased by 1.7% (2.7% excluding \$/€ currency translation effect)
• Excluding \$/€ currency translation effect Capital Goods - 1.0%, Vibration & Velocity Control - 6.5%
• Growth in construction machinery, engineering / production technology and improvement (rebound) in solar damper business; softer business with distributers; weaker markets in agricultural machinery and transportation

Note: Stabilus fiscal year-end is September.

FX = currency effect resulting from translation of NAFTA revenue from USD to EUR. Avg. fx rate of 1.14\$/€ in Q1 FY19 versus 1.18\$/€ in Q1 FY18. Numbers rounded to one decimal. Due to rounding, numbers presented may not add up precisely to the totals provided.

1. Outlook

5.

Outlook

	FY2018 Actual	FY2019 Guidance
		€ million	percent
Revenue	€962.6m (@ 1.19 \$/€)	~ €980m (@ 1.19 \$/€)	~ 2% y/y (at constant \$/€ rate)
% Adj. EBIT margin	15.5%		~ 15%

Comments

• Due to the continuing automotive market weakness in Germany and China, revenue growth forecast for FY2019 has been lowered from 5% to c. 2% y/y (at constant avg. \$/€ rate vs. FY18 of 1.19) – up to approx. €980m
• Decrease of US\$/€ avg. fx rate by 0.10 \$/€ leads to a revenue increase by approx. €30m and vice versa
• FY2019 adj. EBIT margin forecast reduced from 15.5% to c. 15%

Note: Stabilus fiscal year-end is September.

1. Appendix

Revenue by region and customer market (3M ended Dec 31, 2018)

External revenue (€m)
		Q1 FY2018 Actual	Q1 FY2019 Actual	Change	% change
Automotive Gas Spring		37.4	35.4	(2.0)	(5.3)%
Automotive Powerise		26.5	24.6	(1.9)	(7.2)%
Industrial / Capital Goods		39.6	40.7	1.1	2.8%
Vibration & Velocity Control		12.5	11.9	(0.6)	(4.8)%
Europe		116.0	112.6	(3.4)	(2.9)%
Automotive Gas Spring		24.6	26.6	2.0	8.1%
Automotive Powerise	FX effect: 3.1% y/y	33.3	32.5	(0.8)	(2.4)%
Industrial / Capital Goods	Q1 FY19: 1.1412\$/€ Q1 FY18: 1.1777\$/€	15.6	14.7	(0.9)	(5.8)%
Vibration & Velocity Control		10.0	9.9	(0.1)	(1.0)%
NAFTA1		83.6	83.7	0.1	0.1%
Automotive Gas Spring		21.2	19.4	(1.8)	(8.5)%
Automotive Powerise		4.6	4.9	0.3	6.5%
Industrial / Capital Goods		2.9	2.7	(0.2)	(6.9)%
Vibration & Velocity Control		2.2	1.7	(0.5)	(22.7)%
Asia / Pacific and RoW		31.0	28.7	(2.3)	(7.4)%
Total Automotive Gas Spring		83.1	81.4	(1.7)	(2.0)%
Total Automotive Powerise		64.5	62.0	(2.5)	(3.9)%
Total Industrial / Capital Goods		58.2	58.1	(0.1)	(0.2)%
Total Vibration & Velocity Control		24.8	23.5	(1.3)	(5.2)%
Total		230.6	225.0	(5.6)	(2.4)%

Note: ¹ NAFTA Q1 FY19 revenue includes currency effect of €2.6m, resulting from translation of NAFTA revenue from USD to EUR. Avg. fx rate of 1.14\$/€ in Q1 FY19 versus 1.18\$/€ in Q1 FY18.

Numbers rounded to one decimal. Due to rounding, numbers presented may not add up precisely to the totals provided.

P&L overview (3M ended Dec 31, 2018)

P&L (€m)
	Q1 FY2018 Actual	Q1 FY2019 Actual	Change	% change
Revenue	230.6	225.0	(5.6)	(2.4)%
COGS	(162.9)	(161.3)	1.6	(1.0)%
Gross Profit	67.7	63.7	(4.0)	(5.9)%
% margin	29.4%	28.3%
R&D	(10.1)	(9.8)	0.3	(3.0)%
S&M	(20.5)	(20.3)	0.2	(1.0)%
G&A	(9.0)	(9.1)	(0.1)	1.1%
Other income/expenses	1.4	1.4	-	0.0%
EBIT	29.5	25.9	(3.6)	(12.2)%
% margin	12.8%	11.5%
Adjustments1	4.4	4.9	0.5	11.4%
Adj. EBIT1	33.9	30.8	(3.1)	(9.1)%
% margin	14.7%	13.7%

Advisory (acquisition related) Total adjustments1	- 4.4	0.5 4.9
PPA adjustments (2016 PPA)	2.1	2.1
PPA adjustments (2010 PPA)	2.3	2.3

Note: ¹ Adjusted EBIT represents profit from operating activities (EBIT), adjusted for exceptional non-recurring items (e.g. restructuring or one-time advisory costs) and depreciation/amortization of fair value adjustments from purchase price allocations (PPA).

Balance sheet overview

Balance sheet (€m)
	Sept 2018 Actual	Dec 2018 Actual	Change	% change
Property, plant and equipment	179.2	182.0	2.8	1.6%
Goodwill	195.2	195.9	0.7	0.4%
Other intangible assets2	247.2	242.5	(4.7)	(1.9)%
Inventories	90.8	95.7	4.9	5.4%
Trade receivables	111.3	102.3	(9.0)	(8.1)%
Other assets	43.7	44.8	1.1	2.5%
Cash	143.0	154.3	11.3	7.9%
Total assets	1,010.4	1,017.4	7.0	0.7%
Equity incl. minorities	426.5	446.7	20.2	4.7%
Debt (incl. accrued interest)	320.0	321.0	1.0	0.3%
Pension plans and similar obligations	52.2	50.7	(1.5)	(2.9)%
Deferred tax liabilities	47.8	46.8	(1.0)	(2.1)%
Trade accounts payable	83.2	75.3	(7.9)	(9.5)%
Other liabilities	80.7	77.0	(3.7)	(4.6)%
Total equity and liabilities	1,010.4	1,017.4	7.0	0.7%
Net leverage ratio1	1.1x	1.0x

Note:

¹ Net leverage ratio = net financial debt / adj. EBITDA LTM. Net financial debt defined as principal amount of financial debt less cash. Adj. EBITDA LTM = last-twelve-month adjusted earnings before interest, taxes, depreciation and amortization. Refer also to our financial reports and quarterly statements at www.ir.stabilus.com for further details. ² Change in other intangible assets mainly due to the amortization of fair value adjustments from purchase price allocations (PPA) in 2010 and 2016.

Numbers rounded to one decimal. Due to rounding, numbers presented may not add up precisely to the totals provided.

Cash flow overview and free cash flow (3M ended Dec 31, 2018)

Cash Flow Statement (€m)
	Q1 FY2018 Actual	Q1 FY2019 Actual	Change	% change
Cash flow from operating activities	24.6	24.6	-	0.0%
Cash flow from investing activities	(9.9)	(12.2)	(2.3)	23.2%
Cash flow from financing activities	(1.2)	(1.3)	(0.1)	8.3%
Net increase / (decrease) in cash	13.5	11.1	(2.4)	(17.8)%
Effect of movements in exchange rates	(1.2)	0.1	1.3	<(100.0)%
Cash as of beginning of the period	68.1	143.0	74.9	>100.0%
Cash as of end of the period	80.3	154.3	74.0	92.2%

Free Cash Flow (€m)

	Q1 FY2018 Actual	Q1 FY2019 Actual	Change	% change
Cash flow from operating activities	24.6	24.6	-	0.0%
Cash flow from investing activities	(9.9)	(12.2)	(2.3)	23.2%
Free cash flow	14.7	12.4	(2.3)	(15.6)%

Notes re IFRS 16 (leasing)

Notes
Leases
	IFRS 16 is applicable for fiscal years beginning on or after January 1, 2019; Stabilus is planning to apply the new method from October 1, 2019
	Recognition of all leases in the balance sheet – non-current assets and financial debt will increase
	In the income statement: currently – operating expenses, in the future – depreciation and interest expenses
	In FY2018 operating lease expense amounted to c. €9m; as of September 30, 2018, the amount of future operating lease payments (during the basic rental period when they cannot be terminated) was at c. €23m and the balance sheet total at c. €1bn
	No impact on EBIT margin, approx. 1 pp higher EBITDA margin expected, following the introduction of the new method (from Oct 1, 2019 onwards)

www.stabilus.com