Stabilus SE

Investor Presentation • Feb 5, 2018

Q1 FY2018 RESULTS

February 5, 2018

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 FY2018 Highlights

Fiscal year-end September

Revenue	Revenue up by 9.4% to €230.6m (+€19.9m vs. Q1 FY17) Growth in all regions: Europe (+13.5%), NAFTA (+2.5%), as well as Asia / Pacific and RoW (+15.7%) Growth in Powerise (+20.8%), Vibration & Velocity Control (+15.9%), Capital Goods (+10.9%) as well as Commercial Furniture (+7.4%)
Adj. EBIT	Adj. EBIT1 up by 15.3% to €33.9m (vs. €29.4m in Q1 FY17) Adj. EBIT margin at 14.7% (vs. 14.0% in Q1 FY17)
Profit	Profit after tax at €21.72m in Q1 FY18 (vs. €29.82m, or €15.7m excl. impact from fx gain on loans, in Q1 FY17) Profit margin at 9.4% (vs. 14.1% in Q1 FY17)
Net leverage ratio	Net leverage ratio1 at 1.4x (vs. 2.3x as of end Q1 FY17 and 1.5x as of end FY17) Net financial debt1 at €262.2m
Outlook	FY2018 revenue guidance: ~ 7.1% y-o-y growth to €975m (organic, at constant \$/€ rate, i.e. @ 1.10 \$/€), ~ 5.5% change y/y to €960m @ 1.15 \$/€ and ~ 3.8% change y/y to €945m @ 1.20 \$/€ FY2018 adj. EBIT margin guidance: ca. 15.5%

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.

² The development of profit from Q1 FY17 to Q1 FY18 is impacted by non-cash items in the financial result: €20.2m net foreign exchange gain on loans in Q1 FY17 (i.e. €14.1m impact, after 30% tax charge) and €(0.3)m net foreign exchange loss on loans in Q1 FY18.

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

Stabilus shows strong operating performance in Q1 FY2018 (y-o-y)

Note: FX = currency effect resulting from translation of NAFTA revenue from USD to EUR. Avg. fx rate of 1.18\$/€ in Q1 FY18 versus 1.08\$/€ in Q1 FY17.

¹ The development of profit from Q1 FY17 to Q1 FY18 is impacted by non-cash items in the financial result: €20.2m net foreign exchange gain on loans in Q1 FY17 (i.e. €14.1m impact, after 30% tax charge) and €(0.3)m net foreign exchange loss on loans in Q1 FY18.

1.

Agenda

1. Results by region

Q1 FY2018 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. ¹ Billed-from view, without intersegment revenue.

Europe

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

• Europe car production in Q1 FY18 at 5.8m units, i.e. +7.9% vs. Q1 FY17
• Europe's revenue grew by 13.5% y/y
• The increase was primarily driven by our automotive business: Powerise revenue grew by 22.7% to €26.5m (Q1 FY17: €21.6m) and Gas Spring revenue grew by 11.0% to €37.4m (Q1 FY17: €33.7m)
• Revenue grew by €13.8m y/y and adj. EBIT by €4.2m reflecting a strong drop-through rate of c. 30%

NAFTA

• NAFTA car production in Q1 FY18 at 4.2m units, i.e. - 4.1% vs. Q1 FY17
• NAFTA's revenue grew by 2.5% (11.8% excluding the \$/€ currency translation effect)
• The increase was primarily driven by our Powerise and Vibration & Velocity Control (VVC) businesses:
• NAFTA's Powerise revenue increased by 8.1% to €33.3m in Q1 FY18 (vs. €30.8m in Q1 FY17), i.e. +17.9% excluding currency effect
• VVC revenue up by 14.9% to €10.0m in Q1 FY18 (vs. €8.7m in Q1 FY17), i.e. +25.3% excluding currency effect, – supported by growth in construction, automation, energy management
• Adj. EBIT margin stable at approx. 15% (15.0% in Q1 FY18 vs. 15.1% in Q1 FY17)

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 1.18\$/€ in Q1 FY18 versus 1.08\$/€ in Q1 FY17.

Asia / Pacific and RoW

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

• Asia/Pacific and RoW car production in Q1 FY18 at 15.4m units (vs. 15.4m in Q1 FY17), i.e. on prior year's level (China: - 0.9%, Japan/Korea: - 2.7%, South America: + 15.6%)
• Asia/Pacific and RoW's revenue grew by 15.7%
• The increase was primarily driven by our Powerise business: Powerise revenue grew by €3.6m to €4.6m in Q1 FY18 (vs. €1.0m in Q1 FY17)

• Adj. EBIT margin was impacted by softer development in Japan/Korea

• 1.

4.

5.

1. Results by market

Q1 FY2018 revenue growth – by market / business (y-o-y)

Note: Stabilus fiscal year-end is September.

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

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

Q1 FY2018 revenue growth – Automotive business (y-o-y)

Note: Stabilus fiscal year-end is September.

FX = currency effect resulting from translation of NAFTA revenue from USD to EUR. Avg. fx rate of 1.18\$/€ in Q1 FY18 versus 1.08\$/€ in Q1 FY17. Numbers rounded to one decimal. Due to rounding, numbers presented may not add up precisely to the totals provided.

Q1 FY2018 revenue growth – Industrial business (y-o-y)

• Industrial revenue grew by 12.0% (15.1% excluding \$/€ currency translation effect)
• Excluding \$/€ currency translation effect VVC revenue grew by 20.1%, Capital Goods by 13.7% and Commercial Furniture by 8.8%
• Strong growth e.g. in the segments: independent aftermarket, bus/truck/transportation, agricultural machinery, solar dampers, furniture, aircraft construction, fluid power

Note: Stabilus fiscal year-end is September.

FX = currency effect resulting from translation of NAFTA revenue from USD to EUR. Avg. fx rate of 1.18\$/€ in Q1 FY18 versus 1.08\$/€ in Q1 FY17. Numbers rounded to one decimal. Due to rounding, numbers presented may not add up precisely to the totals provided.

1. Outlook

5.

Outlook

	FY2017 Actual	FY2018 Guidance
		€ million	percent
Revenue	€910.0m (@ 1.10 \$/€)	~ €975m (@ 1.10 \$/€) ~ €960m (@ 1.15 \$/€) ~ €945m (@ 1.20 \$/€)	~ 7.1% growth (organic, at constant \$/€ rate) ~ 5.5% y/y ~ 3.8% y/y
% Adj. EBIT margin	15.1%		~ 15.5%

Comments

• Revenue guidance for FY2018:
• ~ 7.1% y-o-y growth (organic and at constant avg. \$/€ rate of 1.10 vs. prior year) to approx. €975m
• Decrease of US\$/€ avg. fx rate by 0.10 \$/€ leads to a revenue increase by approx. €30m and vice versa. E.g., 1.10 \$/€ ~ 975m (~ 7.1% y/y), 1.15 \$/€ ~ 960m (~ 5.5% y/y), 1.20 \$/€ ~ 945m (~ 3.8% y/y).
• FY2018 adj. EBIT margin estimated at ca. 15.5%

Note: Stabilus fiscal year-end is September.

1. Appendix

Revenue by region and customer market (3M ended Dec 31, 2017)

External revenue (€m)
	Q1 FY2017 Actual	Q1 FY2018 Actual	Change	% change
Automotive Gas Spring	33.7	37.4	3.7	11.0%
Automotive Powerise	21.6	26.5	4.9	22.7%
Industrial / Capital Goods	29.8	33.5	3.7	12.4%
Vibration & Velocity Control	11.5	12.5	1.0	8.7%
Commercial Furniture	5.6	6.1	0.5	8.9%
Europe	102.2	116.0	13.8	13.5%
Automotive Gas Spring1	27.3	24.6	(2.7)	(9.9)%
Automotive Powerise1	30.8	33.3	2.5	8.1%
Industrial / Capital Goods1	13.6	14.5	0.9	6.6%
Vibration & Velocity Control1	8.7	10.0	1.3	14.9%
Commercial Furniture1	1.2	1.1	(0.1)	(8.3)%
NAFTA1	81.6	83.6	2.0	2.5%
Automotive Gas Spring	22.2	21.2	(1.0)	(4.5)%
Automotive Powerise	1.0	4.6	3.6	>100.0%
Industrial / Capital Goods	2.4	2.9	0.5	20.8%
Vibration & Velocity Control	1.2	2.2	1.0	83.3%
Commercial Furniture	-	-	-	n/a
Asia / Pacific and RoW	26.8	31.0	4.2	15.7%
Total Automotive Gas Spring	83.2	83.1	(0.1)	(0.1)%
Total Automotive Powerise	53.4	64.5	11.1	20.8%
Total Industrial / Capital Goods	45.9	50.9	5.0	10.9%
Total Vibration & Velocity Control	21.4	24.8	3.4	15.9%
Total Commercial Furniture	6.8	7.3	0.5	7.4%
Total	210.7	230.6	19.9	9.4%

Note: ¹ NAFTA Q1 FY18 revenue includes currency effect of €(7.6)m, resulting from translation of NAFTA revenue from USD to EUR. Avg. fx rate of 1.18\$/€ in Q1 FY18 versus 1.08\$/€ in Q1 FY17.

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, 2017)

P&L (€m)
	Q1 FY2017 Actual	Q1 FY2018 Actual	Change	% change
Revenue	210.7	230.6	19.9	9.4%
COGS	(150.8)	(162.9)	(12.1)	8.0%
Gross Profit	59.9	67.7	7.8	13.0%
% margin	28.4%	29.4%
R&D	(7.9)	(10.1)	(2.2)	27.8%
S&M	(19.9)	(20.5)	(0.6)	3.0%
G&A	(9.0)	(9.0)	-	(0.0)%
Other income/expenses	1.1	1.4	0.3	27.3%
EBIT	24.1	29.5	5.4	22.4%
% margin	11.4%	12.8%
Adjustments1	5.3	4.4	(0.9)	(17.0)%
Adj. EBIT1	29.4	33.9	4.5	15.3%
% margin	14.0%	14.7%

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 2017 Actual	Dec 2017 Actual	Change	% change
Property, plant and equipment	169.7	168.5	(1.2)	(0.7)%
Goodwill	194.2	193.3	(0.9)	(0.5)%
Other intangible assets	268.9	262.2	(6.7)	(2.5)%
Inventories	85.3	87.7	2.4	2.8%
Trade receivables	105.1	106.3	1.2	1.1%
Other assets	38.7	37.0	(1.7)	(4.4)%
Cash	68.1	80.3	12.2	17.9%
Total assets	930.0	935.3	5.3	0.6%
Equity incl. minorities	336.4	352.3	15.9	4.7%
Debt (incl. accrued interest)	322.0	323.0	1.0	0.3%
Pension plans and similar obligations	53.2	52.8	(0.4)	(0.8)%
Deferred tax liabilities	60.0	54.1	(5.9)	(9.8)%
Trade accounts payable	79.1	71.3	(7.8)	(9.9)%
Other liabilities	79.3	81.8	2.5	3.2%
Total equity and liabilities	930.0	935.3	5.3	0.6%
Net leverage ratio1	1.5x	1.4x

Note:

¹ Net leverage ratio = net financial debt / adj. EBITDA LTM. Net financial debt defined as principal amount of senior facilities less cash: (€455m - €50m - €62.5m) - €80.3m = €262.2m. 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.

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, 2017)

Cash Flow Statement (€m)
	Q1 FY2017 Actual	Q1 FY2018 Actual	Change	% change
Cash flow from operating activities	16.3	24.6	8.3	50.9%
Cash flow from investing activities	(9.5)	(9.9)	(0.4)	4.2%
Cash flow from financing activities	(12.5)	(1.2)	11.3	(90.4)%
Net increase / (decrease) in cash	(5.7)	13.5	19.2	<(100.0)%
Effect of movements in exchange rates	0.4	(1.2)	(1.6)	<(100.0)%
Cash as of beginning of the period	75.0	68.1	(6.9)	(9.2)%
Cash as of end of the period	69.7	80.3	10.6	15.2%

Free Cash Flow (€m)

	Q1 FY2017 Actual	Q1 FY2018 Actual	Change	% change
Cash flow from operating activities	16.3	24.6	8.3	50.9%
Cash flow from investing activities	(9.5)	(9.9)	(0.4)	4.2%
Free cash flow	6.8	14.7	7.9	>100.0%

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