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Stabilus SE

Quarterly Report Feb 5, 2018

6214_10-q_2018-02-05_74178a30-673e-4388-b047-464ec1806e71.pdf

Quarterly Report

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QUARTERLY STATEMENT Q1 FY2018

KEY FIGURES

T_001
Three months ended Dec 31,
IN EUR MILLIONS 2017 2016 CHANGE % CHANGE
Revenue 230.6 210.7 19.9 9.4%
EBIT 29.5 24.1 5.4 22.4%
Adjusted EBIT 33.9 29.4 4.5 15.3%
Profit for the period 21.7 29.8 (8.1) (27.2)%
Capital expenditure (9.9) (9.5) (0.4) 4.2%
Free cash flow (FCF) 14.7 6.8 7.9 >100.0%
EBIT as % of revenue 12.8% 11.4%
Adjusted EBIT as % of revenue 14.7% 14.0%
Profit in % of revenue 9.4% 14.1%
Capital expenditure as % of revenue 4.3% 4.5%
FCF in % of revenue 6.4% 3.2%
Net leverage ratio 1.4x 2.3x

REVENUE BY REGION IN Q1 FY2018

(LOCATION OF STABILUS COMPANY)

REVENUE BY MARKETS IN Q1 FY2018

CONTENTS

02 INTERIM MANAGEMENT STATEMENT

  • Results of operations
  • Development of operating segments
  • Financial position
  • Liquidity
  • Risks and opportunities
  • Subsequent events
  • Outlook

12 S U P P L E M E N TA R Y FINANCIAL INFORMATION

  • Consolidated statement of comprehensive income
  • Consolidated statement of financial position
  • Consolidated statement of cash flows
  • Segment reporting

ADDITIONAL INFORMATION

  • Financial calendar
  • Disclaimer

INFORMATION RESOURCES

I N T E R I M M A N AG E M E N T STATEMENT

for the three months ended December 31, 2017

RESULTS OF OPERATIONS

The table below sets out Stabilus Group's consolidated income statement for the first quarter of fiscal 2018 in comparison to the first quarter of fiscal 2017:

Income statement T _ 002

Three months ended Dec 31, IN € MILLIONS 2017 2016 Change % change Revenue 230.6 210.7 19.9 9.4% Cost of sales (162.9) (150.8) (12.1) 8.0% Gross profit 67.7 59.9 7.8 13.0% Research and development expenses (10.1) (7.9) (2.2) 27.8% Selling expenses (20.5) (19.9) (0.6) 3.0% Administrative expenses (9.0) (9.0) – 0.0% Other income 4.5 3.9 0.6 15.4% Other expenses (3.1) (2.8) (0.3) 10.7% Profit from operating activities (EBIT) 29.5 24.1 5.4 22.4% Finance income 0.1 20.3 (20.2) (99.5)% Finance costs (2.5) (2.8) 0.3 (10.7)% Profit / (loss) before income tax 27.1 41.6 (14.5) (34.9)% Income tax income/ (expense) (5.4) (11.8) 6.4 (54.2)% Profit / (loss) for the period 21.7 29.8 (8.1) (27.2)%

I nterim M ana g ement S tatement I nterim M ana g ement S tatement STABILUS QUARTERLY STATEMENT Q1 FY2018

Revenue

Revenue by region T _ 003

Three months ended Dec 31,
IN € MILLIONS 2017 2016 Change % change
Europe1) 116.0 102.2 13.8 13.5%
NAFTA1) 83.6 81.6 2.0 2.5%
Asia / Pacific and RoW1) 31.0 26.8 4.2 15.7%
Revenue1) 230.6 210.7 19.9 9.4%

1) Revenue breakdown by location of Stabilus company (i. e. "billed-from view").

Revenue by markets T _ 004

2017 2016 Change % change
83.1 83.2 (0.1) (0.1)%
64.5 53.4 11.1 20.8%
147.6 136.5 11.0 8.1%
50.9 45.9 5.0 10.9%
24.8 21.4 3.4 15.9%
7.3 6.8 0.5 7.4%
83.0 74.1 8.9 12.0%
230.6 210.7 19.9 9.4%
Three months ended Dec 31,

Total revenue in the first quarter of fiscal 2018 increased by 9.4% compared to the first quarter of fiscal 2017.

The revenue of our European entities increased by 13.5% from €102.2 million in the first quarter of fiscal 2017 to €116.0 million in the first quarter of fiscal 2018. This increase is substantially due to our Automotive Powerise® business which grew by €4.9 million or 22.7% and our Automotive Gas Spring business which grew by €3.7 million or 11.0%. In addition the Industrial / Capital Goods business grew by €3.7 million or 12.4% in Europe.

NAFTA´s revenue increased by 2.5% from €81.6 million in the first quarter of fiscal 2017 to €83.6 million in the first quarter of fiscal 2018. This is due to the strong business in NAFTA essentially driven by Powerise® business which grew by €2.5 million or 8.1% and by our Vibration and Velocity Control business which grew by €1.3 million or 14.9%. However, NAFTA´s revenue is significantly influenced by the weaker US dollar (average rate per €1: \$1.18 in Q1 FY2018 versus \$1.08 in Q1 FY2017). This leads to a reduction of NAFTA`s revenue measured in euro of approximately €(7.6) million. Measured in US dollars NAFTA´s revenue grew by 11.8%.

Revenue of our entities in Asia / Pacific and RoW increased by 15.7% from €26.8 million in first quarter of fiscal 2017 to €31.0 million in the first quarter of fiscal 2018. This is strongly driven by the Powerise® business that now also starts to be a growth driver in China. In this region our Powerise® business grew by €3.6 million or 370.9% to €4.6 million.

Revenue in the Automotive business increased by €11.0 million or 8.1% to €147.6 million (PY: €136.5 million). This is particularly due to our Powerise® business. The increase in the Powerise® business by €11.1 million or 20.8% is generally driven by higher take-rates of Powerise® Systems and also stronger sales in China.

Revenue in the Industrial business increased by €8.9 million or 12.0% to €83.0 million (PY: €74.1 million) in the three months ended December 31, 2017. This increase is materially driven by Industrial / Capital Goods with a growth of €5.0 million or 10.9% and Vibration & Velocity Control with a growth of €3.4 million or 15.9%. Both businesses benefit from the strong growth in several relevant segments (e.g. independent aftermarket, solar dampers, agriculture machinery).

Commercial Furniture revenue increased by 7.4% from €6.8 million in the first quarter of fiscal 2017 to €7.3 million in the first quarter of fiscal 2018.

Cost of sales and overhead expenses

COST OF SALES

Cost of sales increased from €(150.8) million in the three months ended December 31, 2016 by 8.0% to €(162.9) million in the three months ended December 31, 2017, primarly due to the stronger sales. The cost of sales increase (8.0%) is less than the increase in revenue (9.4%). Consequently the cost of sales as a percentage of revenue decreased by 100 basis points to 70.6% (PY: 71.6%) and the gross profit margin improved to 29.4% (PY: 28.4%).

R&D EXPENSES

R&D expenses (net of R&D cost capitalization) increased by 27.8% from €(7.9) million in the first quarter of fiscal 2017 to €(10.1) million in the first quarter of fiscal 2018 as a consequence of increased general R&D activities. As a percentage of revenue, R&D expenses increased by 70 basis points to 4.4% (PY: 3.7%). The capitalization of R&D expenses decreased from €(3.2) million in the first quarter of fiscal 2017 to €(2.0) million in the first quarter of fiscal 2018.

SELLING EXPENSES

Selling expenses increased from €(19.9) million in the first quarter of fiscal 2017 by 3.0% to €(20.5) million in the first quarter of fiscal 2018. As a percentage of revenue, the selling expenses decreased by 50 basis points to 8.9% (PY: 9.4%).

ADMINISTRATIVE EXPENSES

Administrative expenses are unchanged by €(9.0) million in the first quarter of fiscal 2017 compared in the first quarter of fiscal 2018. As a percentage of revenue, administrative expenses decreased by 40 basis points to 3.9% (PY: 4.3%).

OTHER INCOME AND EXPENSE

Other income increased from €3.9 million in the first quarter of fiscal 2017 by €0.6 million to €4.5 million in the first quarter of fiscal 2018. This mainly comprises foreign currency translation gains from the operating business.

Other expenses increased from €(2.8) million in the first quarter of fiscal 2017 by €(0.3) million to €(3.1) million in the first quarter of fiscal 2018. This mainly comprises foreign currency translation losses from the operating business.

FINANCE INCOME AND COSTS

Finance income decreased from €20.3 million in the first quarter of fiscal 2017 to €0.1 million in the first quarter of fiscal 2018. Finance income in the first quarter of fiscal 2017 was strongly impacted by net foreign exchange gains especially on euro loans of our US entities amounting to €20.2 million due to the strengthening US dollar (closing rate per €1: \$1.12 as at September 2016 versus €1: \$1.06 as at December 2016). As in the first quarter of fiscal 2018 the US dollar has weakened (closing rate per €1: \$1.18 as at September 2017 versus €1: \$1.20 as at December 2017) and due to certain measures we have taken to reduce the foreign exchange exposure this effect from the first quarter of fiscal 2017 is not recurring in the first quarter of fiscal 2018.

Finance costs decreased from €(2.8) million in the first quarter of fiscal 2017 to €(2.5) million in the first quarter of fiscal 2018. Finance costs in the first quarter of fiscal 2018 is primarily due to interest expense on financial liabilities amounting to €(2.1) million compared to an interest expense on financial liabilities of €(2.8) million in the first quarter of fiscal 2017. Interest expense on financial liabilities include ongoing interest expense of €(2.1) million (PY: €(2.7) million) related to the euro term loan facility. Thereof, an amount of €(1.0) million (PY: €(2.4) million) is cash interest. This decrease reflects the lower margin based on the improved net leverage ratio of the Group and the reduced outstanding nominal amount. In addition,

an amount of €(1.1) million (PY: €(0.3) million) is due to the amortization of debt issuance cost and the amortization of the adjustment of the carrying value by using the effective interest rate method.

I N C O M E TA X E X P E N S E

The income tax expense decreased from €(11.8) million in the first quarter of fiscal year 2017 to €(5.4) million in the first quarter of fiscal year 2018. The Group´s tax rate in the first quarter of fiscal 2018 is 19.9% (PY: 28.4%). The decrease in the tax rate is due to the US tax reform signed in December 2017. The US tax reform

generally reduces the federal income tax rate from 35% to 21% with effect from January 1, 2018 and consequently required a remeasurement of the deferred tax positions of our US operations causing a non-recurring net effect of €4.1 million on income tax expense in the first quarter of fiscal 2018.

RECONCILIATION OF EBIT TO ADJUSTED EBIT

The following table shows a reconciliation of EBIT (earnings before interest and taxes) to adjusted EBIT for the first quarter of fiscal years 2018 and 2017.

T _ 005
2017 2016 Change % change
29.5 24.1 5.4 22.4%
4.4 5.3 (0.9) (17.0%)
33.9 29.4 4.5 15.3%
Three months ended Dec 31,

Adjusted EBIT represents EBIT, adjusted for exceptional nonrecurring items (e.g. restructuring or one-time advisory costs) and depreciation / amortization of fair value adjustments from purchase price allocations (PPAs).

Adjusted EBIT is represented because we believe it is a useful indicator of the Group´s operating performance before items which are considered exceptional and not relevant to an assessment of our operational performance.

The PPA adjustments in the current year contain €2.3 million (PY: €3.2 million) related to the April 2010 PPA and €2.1 million (PY: 2.1 million) to the June 2016 PPA.

DEVELOPMENT OF OPERATING SEGMENTS

The Stabilus Group is organized and managed primarily on a regional level. The three reportable operating segments of the Group are Europe, NAFTA, Asia / Pacific and RoW.

The table below sets out the development of our operating segments for the first quarter of the fiscal years 2018 and 2017.

Operating segments T _ 006

Three months ended Dec 31,
IN € MILLIONS 2017 2016 Change % change
Europe
External revenue1) 116.0 102.2 13.8 13.5%
Intersegment revenue1) 8.1 7.1 1.0 14.1%
Total revenue1) 124.1 109.3 14.8 13.5%
Adjusted EBIT 16.3 12.1 4.2 34.7%
as % of total revenue 13.1% 11.1%
as % of external revenue 14.1% 11.8%
NAFTA
External revenue1) 83.6 81.6 2.0 2.5%
Intersegment revenue1) 6.3 5.7 0.6 10.5%
Total revenue1) 89.9 87.4 2.5 2.9%
Adjusted EBIT 12.5 12.3 0.2 1.6%
as % of total revenue 13.9% 14.1%
as % of external revenue 15.0% 15.1%
Asia/ Pacific and RoW
External revenue1) 31.0 26.8 4.2 15.7%
Intersegment revenue1) 0.0 0.1 (0.1) (100.0)%
Total revenue1) 31.0 26.9 4.1 15.2%
Adjusted EBIT 5.1 5.0 0.1 2.0%
as % of total revenue 16.5% 18.6%
as % of external revenue 16.5% 18.7%

1) Revenue breakdown by location of Stabilus company (i.e. "billed-from view").

The external revenue generated by our European companies increased by 13.5% from €102.2 million in the first quarter of fiscal 2017 to €116.0 million in the first quarter of fiscal 2018. This increase is substantially due to our Automotive business. Powerise® grew by €4.9 million or 22.7% and our Automotive Gas Spring business grew by €3.7 million or 11.0%. In addition Industrial/Capital Goods grew by €3.7 million or

12.4% in Europe as a consequence of the growth that was observed in several of the relevant segments (e.g. independent aftermarket, agriculture machinery). The adjusted EBIT of the European segment increased by 34.7% or €4.2 million and the adjusted EBIT margin, i.e. adjusted EBIT in percent of external revenue, increased in the first quarter of fiscal 2018 by 230 basis points to 14.1% (PY: 11.8%).

The external revenue of our companies located in the NAFTA region increased from €81.6 million in the first quarter of fiscal 2017 by 2.5% to €83.6 million in the first quarter of fiscal 2018. This is essentially driven by the Powerise® business which grew by €2.5 million or 8.1% and contributed €33.3 million to NAFTA´s revenue. Another growth driver was the Vibration and Velocity Control business which grew by €1.3 million or 14.9%. NAFTA's revenue measured in euro is negatively influenced by the weaker US dollar, i.e. measured in US dollar NAFTA´s revenue grew by 11.8%. The adjusted EBIT of the NAFTA segment increased by 1.6% or €0.2 million and the adjusted EBIT margin, i.e. adjusted EBIT in percent of external revenue, decreased in the first quarter of fiscal 2018 by slightly 10 basis points to 15.0% (PY: 15.1%).

The external revenue of our companies located in the region Asia / Pacific and RoW increased from €26.8 million in the first quarter of fiscal 2017 by 15.7% to €31.0 million in the first quarter of fiscal 2018. Thereof, an amount of €21.2 million was generated by our Automotive Gas Spring business and another €4.6 million by our Powerise® business. Due to the ramp-up of the Powerise® production in our Chinese entity local Powerise® sales grew by €3.6 million or 370.9% to €4.6 million. The adjusted EBIT of the Asia / Pacific and RoW segment increased slightly by €0.1 million or 2.0% and the adjusted EBIT margin, i.e. adjusted EBIT in percent of external revenue, decreased in the first quarter of fiscal 2018 by 220 basis points to 16.5% (PY: 18.7%).

FINANCIAL POSITION

Financial position T _ 007
IN € MILLIONS Dec 31, 2017 Sept 30, 2017 Change % change
Assets
Non-current assets 636.3 647.8 (11.5) (1.8)%
Current assets 299.0 282.2 16.8 6.0%
Total assets 935.3 930.0 5.3 0.6%
Equity and liabilities
Equity 352.3 336.4 15.9 4.7%
Non-current liabilities 425.5 430.8 (5.3) (1.2)%
Current liabilities 157.5 162.8 (5.3) (3.3)%
Total liabilities 583.0 593.6 (10.6) (1.8)%
Total equity and liabilities 935.3 930.0 5.3 0.6%

TOTAL ASSETS

The Group's balance sheet total increased from €930.0 million as of September 30, 2017 by 0.6% to €935.3 million as of December 31, 2017.

NON-CURRENT ASSETS

Our non-current assets decreased from €647.8 million as of September 30, 2017 by 1.8% or €(11.5) million to €636.3 million as of December 31, 2017. This reduction is attributable to the €(6.7) million decrease of other intangible assets that mainly results from the ongoing amortization of intangible assets from the purchase price allocations 2010 and 2016, but also to foreign exchange raterelated carrying value adjustments, especially due to the weaker US dollar (closing rate per €1: \$1.18 as at September 30, 2017 versus €1: \$1.20 as at December 31, 2017), effecting generally all line items presented in non-current assets, e.g. a decrease in goodwill of (€0.9) million. The decrease of deferred tax assets is especially reflecting a reduction of tax loss carryforwards that are applied to

taxable profits and a remeasurement of deferred tax assets of our US entities due to the US tax reform. This decrease was partly offset by ongoing capacity expansions, i.e. the purchase of property plant and equipment amounted to €8.1 million.

CURRENT ASSETS

Current assets increased from €282.2 million as of September 30, 2017 by 6.0% or €16.8 million to €299.0 million as of December 31, 2017. This is essentially the consequence of a €12.2 million higher cash balance that results from our strong cash flow in the first quarter of fiscal 2018 but also from increased inventories of €2.5 million and increased trade accounts receivable of €1.1 million due to ongoing business growth.

EQUITY

The Group's equity increased from €336.4 million as of September 30, 2017 by €15.9 million to €352.3 million as of December 31, 2017. This increase results from the profit of €21.7 million that has been generated in the first quarter of fiscal 2018, which was partially offset by other comprehensive income of €(5.8) million. Other comprehensive income comprises unrealized actuarial gains on pensions (net of tax) amounting to €0.2 million and unrealized losses from foreign currency translation amounting to €(6.0) million.

NON-CURRENT LIABILITIES

Non-current liabilities decreased from €430.8 million as of September 30, 2017 by 1.2% or €(5.3) million to €425.5 million as of December 31, 2017. This decrease is primarily due to the reduction of the deferred tax liability by €(6.0) million which was mainly affected by the US tax reform and the necessary remeasurement of the deferred tax positions of our US entities.

CURRENT LIABILITIES

Current liabilities decreased from €162.8 million as of September 30, 2017 by 3.3% or €(5.3) million to €157.5 million as of December 31, 2017. This decrease was essentially driven by a significant reduction of our trade accounts payables by €(7.7) million or 9.8% as a consequence of shorter payment cycles for trade payables to benefit from early payment discounts. The other liabilities decreased by €(2.1) million especially due to the payment of the Christmas bonus in Germany. This decrease was more than offset by an increase in current provision for warranties provisions and personnel expenses.

I nterim M ana g ement S tatement I nterim M ana g ement S tatement STABILUS QUARTERLY STATEMENT Q1 FY2018

LIQUIDITY

Cash flows T _ 008

2017 2016 Change % change
24.6 16.3 8.3 50.9%
(9.9) (9.5) (0.4) 4.2%
(1.2) (12.5) 11.3 (90.4)%
13.5 (5.7) 19.2 <(100.0)%
(1.2) 0.4 (1.6) <(100.0)%
68.1 75.0 (6.9) (9.2)%
80.3 69.7 10.6 15.2%
Three months ended Dec 31,

CASH FLOW FROM OPERATING ACTIVITIES

Cash flow from operating activities increased from €16.3 million in the first quarter of fiscal 2017 by €8.3 million to €24.6 million in the first quarter of fiscal 2018. This increase is mainly due to the strong revenue and earnings growth and partly offset by higher net working capital as a consequence of the continuing growth and shorter payment cycles for trade payables.

CASH FLOW FROM INVESTING ACTIVITIES

Cash outflow for investing activities increased from €(9.5) million in the first quarter of fiscal 2017 by €0.4 million to €(9.9) million in the first quarter of fiscal 2018 due to higher capital expenditures in property, plant and equipment of €1.4 million. This increase was partly offset by slightly reduced investments in intangible assets especially by a €(0.7) million reduction of capitalized R&D costs (less related customer contributions).

CASH FLOW FROM FINANCING ACTIVITIES

Cash flow from financing activities decreased from €(12.5) million in the first quarter of fiscal 2017 by €(11.3) million to €(1.2) million in the first quarter of fiscal 2018. In the first quarter of fiscal 2017 we made a voluntary prepayment of €10.0 million of the term loan facility. In addition the cash interest in the first quarter of fiscal 2018 is €(1.4) million lower compared to the first quarter of fiscal 2017. This reflects the lower margin based on the improved net leverage ratio of the Group and the reduced outstanding nominal amount.

FREE CASH FLOW (FCF)

Free cash flow (FCF) is defined as the total of cash flow from operating and investing activities. The following table sets out the composition of FCF.

T _ 009
2017 2016 Change % change
24.6 16.3 8.3 50.9%
(9.9) (9.5) (0.4) 4.2%
14.7 6.8 7.9 >100.0%
Three months ended Dec 31,

STABILUS QUARTERLY STATEMENT Q1 FY2018 I nterim M ana g ement S tatement

N E T L E V E R AG E R AT I O

The net leverage ratio is defined as net financial debt divided by adjusted EBITDA for the last twelve months (adjusted EBITDA LTM).

Net financial debt is the nominal amount of financial debt, i.e. current and non-current financial liabilities, less cash and cash equivalents. Adjusted EBITDA is defined as adjusted EBIT before depreciation and amortization.

The net leverage ratio is presented because we believe it is a useful indicator to evaluate the Group's debt leverage and financing structure.

The net leverage ratio decreased from 2.3x for the twelve months ending December 31, 2016 to 1.4x for the twelve months ending December 31, 2017. See the following table.

Net leverage ratio T _ 010

IN € MILLIONS Dec 31, 2017 Dec 31, 2016 Change % change
Financial debt 342.5 395.0 (52.5) (13.3%)
Cash and cash equivalents (80.3) (69.7) (10.6) 15.2%
Net financial debt 262.2 325.3 (63.1) (19.4%)
Adjusted EBITDA (LTM ended Dec, 31) 185.0 142.4 42.6 29.9%
Net leverage ratio 1) 1.4x 2.3x

1) The net leverage ratio is defined as net financial debt divided by adjusted EBITDA for the last twelve months.

RISKS AND OPPORTUNITIES

We refer to the risk-related disclosures in the Group Management Report and in the audited Consolidated Financial Statements as of and for the fiscal year ended September 30, 2017.

OUTLOOK

We confirm our revenue guidance for fiscal 2018 from the Annual Report 2017, i.e. assuming an average currency rate of 1.15 \$ / €, we expect total revenue of approximately €960 million or a revenue growth of around 5.5% and an adjusted EBIT margin of around 15.5% for FY2018. The revenue growth at constant rates, i.e. based on the average rate from FY2017 of 1.10 \$ / €, is estimated to be around 7.1%. At a currency rate of 1.20 \$ / € we estimate a revenue of approximately €945 million.

SUBSEQUENT EVENTS

As of February 5, 2018, there were no further events or developments that could have materially affected the measurement and presentation of Group's assets and liabilities as of December 31, 2017.

Luxembourg, February 2, 2018

Dietmar Siemssen Mark Wilhelms Andreas Schröder Andreas Sievers

Management Board

SUPPLEMENTARY FINANCIAL INFORMATION

as of and for the three months ended December 31, 2017

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the three months ended December 31, 2017 (unaudited)

Consolidated Statement of Comprehensive Income T_011

Three months ended Dec 31,
IN € THOUSANDS 2017 2016
Revenue 230,553 210,682
Cost of sales (162,906) (150,760)
Gross profit 67,647 59,922
Research and development expenses (10,082) (7,898)
Selling expenses (20,457) (19,934)
Administrative expenses (9,005) (9,015)
Other income 4,558 3,868
Other expenses (3,112) (2,819)
Profit from operating activities 29,549 24,122
Finance income 65 20,340
Finance costs (2,476) (2,820)
Profit / (loss) before income tax 27,138 41,642
Income tax income / (expense) (5,427) (11,824)
Profit / (loss) for the period 21,711 29,817
thereof attributable to non-controlling interests (27) 8
thereof attributable to shareholders of Stabilus 21,738 29,809
Other comprehensive income / (expense)
Foreign currency translation difference 1) (6,024) (8,732)
Unrealized actuarial gains and losses 2) 200 2,923
Other comprehensive income / (expense), net of taxes (5,824) (5,808)
Total comprehensive income / (expense) for the period 15,887 24,009
thereof attributable to non-controlling interests (27) 8
thereof attributable to shareholders of Stabilus 15,914 24,001
Earnings per share (in €):
Basic 0.88 1.21
Diluted 0.88 1.21

1) Item that may be reclassified ('recycled') to profit and loss at a future point in time when specific conditions are met.

2) Item that will not be reclassified to profit and loss. The accompanying Notes form an integral part of these Consolidated Financial Statements.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as of December 31, 2017 (unaudited)

Consolidated Statement of Financial Position T _ 012
IN € THOUSANDS Dec 31, 2017 Sept 30, 2017
Assets
Property, plant and equipment 168,485 169,659
Goodwill 193,256 194,184
Other intangible assets 262,233 268,911
Other assets 3,378 2,951
Deferred tax assets 8,935 12,083
Total non-current assets 636,287 647,788
Inventories 87,746 85,262
Trade accounts receivable 106,280 105,147
Current tax assets 4,751 5,802
Other financial assets 4,659 5,155
Other assets 15,248 12,718
Cash and cash equivalents 80,348 68,123
Total current assets 299,032 282,207
Total assets 935,319 929,995

STABILUS QUARTERLY STATEMENT Q1 FY2018 S u pplementary Fina n cial In f ormatio

Consolidated Statement of Financial Position T _ 012

IN € THOUSANDS Dec 31, 2017 Sept 30, 2017
Equity and liabilities
Issued capital 247 247
Capital reserves 225,848 225,848
Retained earnings 161,177 139,440
Other reserves (35,022) (29,198)
Equity attributable to shareholders of Stabilus 352,250 336,337
Non-controlling interests 16 43
Total equity 352,266 336,380
Financial liabilities 313,048 311,951
Other financial liabilities 1,635 1,830
Provisions 3,939 3,771
Pension plans and similar obligations 52,819 53,236
Deferred tax liabilities 54,068 60,036
Total non-current liabilities 425,509 430,824
Trade accounts payable 71,330 79,073
Financial liabilities 10,000 10,000
Other financial liabilities 10,700 9,613
Current tax liabilities 15,796 15,612
Provisions 36,423 33,061
Other liabilities 13,295 15,432
Total current liabilities 157,544 162,791
Total liabilities 583,053 593,615
Total equity and liabilities 935,319 929,995

The accompanying Notes form an integral part of these Consolidated Financial Statements.

CONSOLIDATED STATEMENT OF CASH FLOWS

for the three months ended December 31, 2017 (unaudited)

Consolidated statement of cash flows T _ 013

Three months ended Dec 31,
IN € THOUSANDS 2017 2016 1)
Profit / (loss) for the period 21,711 29,817
Income tax expense 5,427 11,825
Net finance result 2,410 (17,520)
Interest received 65 109
Depreciation and amortization (incl. impairment losses) 14,548 14,454
Gains / losses from the disposal of assets (12) 16
Changes in inventories (2,484) (3,650)
Changes in trade accounts receivable (1,133) (314)
Changes in trade accounts payable (7,743) (13,007)
Changes in other assets and liabilities (4,776) (4,211)
Changes in provisions 3,400 2,677
Income tax payments (6,823) (3,869)
Cash flow from operating activities 24,590 16,327
Proceeds from disposal of property, plant and equipment 365 9
Purchase of intangible assets (2,213) (2,858)
Purchase of property, plant and equipment (8,056) (6,663)
Cash flow from investing activities (9,904) (9,512)
Payments for redemption of senior facilities (10,000)
Payments for finance leases (226) (136)
Payments for interest (992) (2,409)
Cash flow from financing activities (1,218) (12,545)
Net increase / (decrease) in cash and cash equivalents 13,468 (5,730)
Effect of movements in exchange rates on cash held (1,243) 388
Cash and cash equivalents as of beginning of the period 68,123 75,037
Cash and cash equivalents as of end of the period 80,348 69,695

1) Prior-year figures have been reported following the adjusted structure of the year ended September 30, 2017.

The accompanying Notes form an integral part of these Consolidated Financial Statements.

SEGMENT REPORTING

Segment information for the three months ended December 31, 2017 and 2016 is as follows:

Segment reporting T _ 014

Europe NAFTA Asia / Pacific and RoW
Three months ended Dec 31, Three months ended Dec 31, Three months ended Dec 31,
IN € THOUSANDS 2017 2016 2017 2016 2017 2016
External revenue1) 115,973 102,244 83,595 81,639 30,985 26,799
Intersegment revenue1) 8,145 7,100 6,306 5,739 36 107
Total revenue1) 124,118 109,344 89,901 87,378 31,021 26,906
Depreciation and amortization
(incl. impairment losses)
(7,543) (7,073) (3,116) (3,002) (1,569) (1,209)
EBIT 15,108 10,904 11,680 11,452 5,081 4,936
Adjusted EBIT 16,343 12,141 12,462 12,305 5,119 4,977
Total segments Other / Consolidation Stabilus Group
Three months ended Dec 31, Three months ended Dec 31, Three months ended Dec 31,
IN € THOUSANDS 2017 2016 2017 2016 2017 2016
External revenue1) 230,553 210,682 230,553 210,682
14,487 12,946 (14,487) (12,946)
245,040 223,628 (14,487) (12,946) 230,553 210,682
(12,228) (11,284) (2,320) (3,170) (14,548) (14,454)
31,869 27,292 (2,320) (3,170) 29,549 24,122
33,924 29,423 33,924 29,423

1) Revenue breakdown by location of Stabilus company (i.e. "billed-from view").

S u pplementary Fina n cial In f ormatio A dditional I nformation STABILUS QUARTERLY STATEMENT Q1 FY2018

ADDITIONAL INFORMATION

FINANCIAL CALENDAR

Financial calendar T _ 015
DATE 1)2) PUBLICATION / EVENT
February 5, 2018 Publication of the first-quarter results for fiscal year 2018 (Quarterly Statement Q1 FY18)
February 14, 2018 Annual General Meeting
May 7, 2018 Publication of the second-quarter results for fiscal year 2018 (Interim Report Q2 FY18)
August 6, 2018 Publication of the third-quarter results for fiscal year 2018 (Quarterly Statement Q3 FY18)
November 16, 2018 Publication of preliminary financial results for fiscal year 2018
December 14, 2018 Publication of full year results for fiscal year 2018 (Annual Report 2018)

1) We cannot rule out changes of dates. We recommend checking them on our website in the Investor Relations/ Financial Calendar section (www.ir.stabilus.com). 2) Please note that our fiscal year (FY) comprises a twelve-month period from October 1 until September 30 of the following calendar year, e.g. the fiscal year 2018 comprises a year ended September 30, 2018.

DISCLAIMER

Forward-looking statements

This quarterly statement contains forward-looking statements that relate to the current plans, objectives, forecasts and estimates of the management of Stabilus S.A. These statements take into account only information that was available up to and including the date that this quarterly statement was prepared. The management of Stabilus S.A. makes no guarantee that these forward-looking statements will prove to be right. The future development of Stabilus S.A. and its subsidiaries and the results that are actually achieved are subject to a variety of risks and uncertainties which could cause actual events or results to differ significantly from those reflected in the forward-looking statements. Many of these factors are beyond the control of Stabilus S.A. and its subsidiaries and therefore cannot be precisely predicted. Such factors include, but are not limited to, changes in economic conditions and the competitive situation, changes in the law, interest rate or exchange rate fluctuations, legal disputes and investigations, and the

availability of funds. These and other risks and uncertainties are set forth in the quarterly statement. However, other factors could also have an adverse effect on our business performance and results. Stabilus S.A. neither intends nor assumes any separate obligation to update forward-looking statements or to change these to reflect events or developments that occur after the publication of this quarterly statement.

Rounding

Certain numbers in this quarterly statement have been rounded up or down. There may therefore be discrepancies between the actual totals of the individual amounts in the tables and the totals shown as well as between the numbers in the tables and the numbers given in the corresponding analyses in the text of the quarterly statement. All percentage changes and key figures in the quarterly statement were calculated using the underlying data in millions of euros to one decimal place (€ millions).

INFORMATION RESOURCES

Further information including news, reports and publications can be found in the Investor Relations section of our website at www.ir.stabilus.com.

Investor Relations

Phone: +352 286 770 21 Fax: +352 286 770 99 Email: [email protected]

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