Novem Group S.A.

Investor Presentation • Nov 14, 2024

14 November 2024

HY 2024/25 Results

• In Q2 2024/25, Novem generated total revenue of €139.4m (-18.9% y/y) in a persistently weak trading environment
• Like in the preceding quarters, the market conditions remained challenging across all regions, especially in Europe and Asia
• Top line was adversely hit by extension of customer plant holidays in China, partly due to technical actions at a major OEM
• Hurricane Helene led to production downtime for several customers in the USA and resulted in further sales setbacks
• Lower turnover clearly left its mark on the Adj. EBIT of €12.0m, translating into a profit margin of 8.6%
• Continued cost management, footprint optimisation and customer compensation to protect bottom line
• Among others, particularly notable is the award of the Mercedes V-class, which marks the entry into the luxury MPV segment

Short-term adversities remain, while solid order intake in current year supports mid-term guidance

HY 2024/25 financial highlights

2 GROUP RESULTS

Page 6

Revenue

• Total revenue of €139.4m in Q2 2024/25 came down by €-32.5m or -18.9% in comparison to last year
• Top line was negatively affected by FX effects; revenue in Q2 would have been higher by €+2.5m or +1.8% at constant FX rates
• Revenue Series of €119.5m was well below prior year by €-30.1m or -20.1% and added 85.7% to total revenue
• Drop in Series business was mainly related to ongoing weak customer call-offs, above all in Europe and Asia
• Most recent publicly available LVP market data showed a year-on-year drop of -4.6% for the period under review
• Revenue Tooling of €19.9m declined by €-2.4m or -10.9% against prior year, mainly driven by a different project phasing
• On a twelve-month basis, total revenue recorded at €567.9m and decreased by -5.4% compared to last quarter

• In Q2 2024/25, Adj. EBIT of €12.0m recorded behind prior year by €-6.0m, resulting in a margin of 8.6% for the reporting period
• Operational result was again negatively hit by poor top line, predominantly in Europe and Asia
• Cost reduction well underway but nonetheless to a lower extent than the revenue decline, which burned the Adj. EBIT and also diluted the margin
• In addition, Adj. EBIT was once again negatively impacted by an unfavourable product mix as well as model changes
• Strict cost management and restructuring measures helped to protect the bottom line
• On the other hand, operational result benefitted from customer compensations and continuously improved input costs
• Last-twelve-month Adj. EBIT of €57.2m stood at its lowest level since the IPO in July 2021

Free cash flow

• Despite the improvement against last quarter, free cash flow of €3.6m in Q2 2024/25 fell short of last year by €-18.6m or -83.8%
• Cash flow from operating activities (€6.9m) recorded considerably below prior year by €-17.8m due to the following reasons:
• Reduced provisions (€-8.3m), increased inventories (€-8.1m) and lower trade payables (€-6.8m) as well as Others (€-1.5m); partly offset by other non-cash expenses (€+6.9m)
• Decrease in provisions mainly related to prior year's restructuring costs in Bergamo as well as tax payments in Germany
• Cash out-flow from investing activities of €-3.3m stood above prior year's figure of €-2.4m due to lower interest received
• Free cash flow for the last twelve months of €20.8m came down by -47.2% compared to previous quarter (€39.5m)

Capital expenditure

• In Q2 2024/25, capital expenditure of €4.5m recorded on a similar level as previous year
• Based on weaker top line, the underlying capex ratio rose from 2.7% last year to 3.3% of revenue
• As previous quarter, most of capital expenditure was invested in the operations in Querétaro (€2.9m)
• Investments in Q2 2024/25 included around €3.0m for the ramp-up of the acquired business with a major US EV manufacturer
• LTM capital expenditure of €17.7m was almost unchanged to the first quarter of 2024/25 (€17.7m)
• Capex ratio for the last twelve months showed a slight increase from 2.9% to 3.1% compared to previous quarter

Total working capital

LTM total working capital (€m)

• As of 30 September 2024, total working capital recorded slightly above last year at €139.3m (€136.3m PY)
• Deviation of €-3.0m resulted from lower trade payables (€-13.6m), higher tooling net (€-9.5m) and contract assets (€-0.5m); on the other hand, lower trade receivables (€+15.2m) and stock (€+5.4m)
• Decline in trade payables mainly attributable to lower volume; conversely, lower trade receivables mainly due to reduced top line
• As percentage of LTM revenue, total working capital recorded at 24.5% as of 30 September 2024 (19.8% PY)
• Trade working capital (w/o both tooling net and contract assets) developed positively from €56.0m to €49.0m y/y
• Reported in days outstanding, DIO of 44 (38 PY) and DPO of 46 (49 PY) worsened, while DSO of 30 (33 PY) developed favourably

Capital structure

• As of 30 September 2024, gross financial debt of €301.9m rose by €+13.2m in comparison to the same reporting date last year
• As previously reported, the increase was again driven by a significant rise in lease liabilities to €51.9m (€+12.7m y/y)
• Principal sources of funds included €132.4m cash (€136.6m PY) and €40.3m from non-recourse factoring (€43.1m PY)
• As of 30 September 2024, net financial debt stood at €169.5m and showed a steep increase compared to prior year (€152.2m)
• Net leverage ratio of 1.9x Adj. EBITDA remained at a higher level than previous year (1.4x)

Revenue by operating segments

• On a segmental basis, revenue in Americas increased, while both Europe and Asia declined, similar to last quarter
• Poor top line in Europe (€-28.4m y/y) was primarily attributable to revenue Series due to the ongoing weak demand as well as the phase-out of larger programs
• In particular, deviation was caused by the EOP of BMW 5-series and Porsche Panamera as well as lower revenue of MB E-class and MB S-class
• Growth in Americas (€+3.0m y/y) was mainly driven by Tooling business, while revenue Series showed a slight decrease, caused by downtimes for various OEMs due to Hurricane Helene
• Reduced revenue in Asia (€-7.2m y/y) predominantly resulted from the EOP of BMW 5-series and the model change of MB E-class
• LTM revenue showed the following allocation across the regions: 50.2% Americas, 38.6% Europe and 11.2% Asia

Adj. EBIT by operating segments

Europe Americas Asia

EuropeAmericasAsia

• Adj. EBIT showed the same development as top line: negative deviation in Europe and Asia was partly compensated by higher profit contribution in Americas compared to prior year
• In Europe, Adj. EBIT of €-6.9m (€2.8m PY) continues to make a loss resulting from significantly lower revenue and volume-related inefficiencies as well as a negative product mix
• As previously, cost savings and customer compensation payments helped to mitigate these negative effects partly
• Adj. EBIT of €17.3m (€12.6m PY) in Americas developed again favourably, benefitting from the release of accruals as well as ongoing lower input costs
• In Asia, Adj. EBIT of €1.6m (€2.6m PY) fell short of prior year in particular because of the lower top line in both Series and Tooling
• In Q2 2024/25, LTM Adj. EBIT declined by -9.4% from €63.2m to €57.2m compared to preceding quarter

Profit and loss statement (€m)

	Q2 2023/24	Q2 2024/25	2023/24 HY	2024/25 HY
Revenue	171 9	139 4	347 1	279 5
Increase or decrease in finished goods and work in process	3 -5	0 5	-11 5	2 4
Total operating performance	166 7	139 9	335 5	281 9
Other operating income	3 3	3 9	4 9	5 3
Cost of materials	-83 5	-72 1	-163 9	-140 1
Personnel expenses	-42 0	-35 6	-85 4	-74 9
Depreciation , amortisation and impairment	-8 2	-8 0	-16 5	-16 1
Other operating expenses	-18 3	-16 1	-36 7	-30 0
Adj EBIT	18 0	12 0	38 0	26 2
Adjustments	-4 7	-0 1	-4 7	-2 9
Operating result (EBIT)	13 3	11 9	33 3	23 3
Finance income	2 1	5 7	3 3	2 6
Finance costs	-8 9	-5 3	-12 4	-10 8
Financial result	-6 8	0 4	-9 1	-8 2
Income taxes	-3 2	-1 9	-6 3	-4 5
Deferred taxes	1 5	-1 2	0 2	0 7
Income result tax	-1 6	-3 1	-6 1	-3 8
Profit for the period	4 9	9 2	18 1	11 2

Balance sheet

Balance sheet (€m)
	Sep 30 2023	Sep 30 2024		Sep 30 2023	Sep 30 2024
			equity Total	78 8	90 5
Intangible assets	2 1	2 9	Pensions and similiar obligations	27 1	28 7
Property , plant and equipment	181 4	180 3	Other provisions	1 5	2 1
Trade receivables	52 3	40 0	Financial liabilities	248 5	249 0
Other non-current assets	17 3	11 3	Trade payables	-	-
Deferred tax assets	5 2	11 1	Other liabilities	35 8	49 3
			Deferred liabilities tax	-2 7	1 3
Total non-current assets	258 3	245 6	Total liabilities non-current	310 1	330 4
Inventories	106 3	103 0	Tax liabilities	17 0	0 3
Trade receivables	46 4	43 0	Other provisions	52 9	35 7
Other receivables	32 0	21 2	Financial liabilities	1 5	1 0
Other current assets	12 4	19 9	Trade payables	52 4	40 5
Cash and cash equivalents	136 6	132 4	Other liabilities	79 3	66 8
Total current assets	333 7	319 5	Total liabilities current	203 1	144 2
Assets	592 0	565 1	Equity and liabilities	592 0	565 1

Cash flow statement

Cash flow statement (€m)

	Q2 2023/24	Q2 2024/25	HY 2023/24	HY 2024/25
Profit for the period	4 9	9 2	18 1	11 2
expense (+)/income (-) Income tax	3 2	1 9	6 3	4 5
Financial result (+)/(-) net	2 8	4 1	6 0	8 2
(+) Depreciation , amortisation and impairment	8 2	8 0	16 5	16 1
Other non-cash expenses (+)/income (-)	-0 8	6 1	-1 6	8 2
(-)/decrease (+) Increase in inventories	9 6	1 5	12 6	-4 7
Increase (-)/decrease (+) in trade receivables	5 0	4 8	-4 7	3 7
(-)/decrease (+) Increase in other assets	0 5	-6 1	6 8	2 2
Increase (-)/decrease (+) in deferred taxes	-1 5	1 2	-0 2	-0 7
(-)/decrease expenses/deferred Increase (+) in prepaid income	-0 9	3 3	-1 6	1 1
Increase (+)/decrease (-) in provisions	1 2	-7 1	3 8	-9 7
(+)/decrease Increase (-) in trade payables	-1 3	-8 1	-4 8	-8 6
Increase (+)/decrease (-) in other liabilities	-1 8	-5 9	-11 5	-13 0
Gain (-)/loss (+) on disposals of non-current assets	0 0	0 0	0 0	0 0
Cash received (+) from/cash paid (-) for income taxes	-4 4	-6 0	-7 4	-10 9
Cash flow from operating activities	24 7	6 9	38 2	7 6

Cash flow statement (€m)

	Q2 2023/24	Q2 2024/25	HY 2023/24	HY 2024/25
Cash received (+) from disposals of , plant and equipment property	0 0	-	0 0	-
Cash (-) for paid investments in intangible assets	-0 0	-0 2	-0 1	-0 4
Cash paid (-) for investments in , plant and equipment property	-4 6	-4 3	9 -7	-9 1
(+) Interest received	2 1	1 2	3 3	2 5
Cash flow from investing activities	-2 4	-3 3	-4 7	-7 0
Cash paid (-) for subsidies/grants	-0 0	-	-0 0	-
Cash (-) for paid lease liabilities	-2 5	-0 0	-5 0	1 0
Interest paid (-)	-4 2	-4 5	-8 1	-9 1
(-) Dividends paid	-49 5	-	-49 5	-
Cash flow from financing activities	-56 2	-4 6	-62 6	-8 1
Net increase (+)/decrease (-) in cash and cash equivalents	-34 0	-0 9	-29 1	6 -7
Effect of exchange fluctuations on cash and cash equivalents rate	0 7	-1 0	0 2	-1 5
Cash and cash equivalents the beginning of the reporting period at	169 9	134 4	165 5	141 5
Cash and cash equivalents the end of the reporting period at	136 6	132 4	136 6	132 4

EBIT adjustments

EBIT adjustments (€m)

	Q2 2023/24	Q2 2024/25	HY 2023/24	HY 2024/25
Revenue	171 9	139 4	347 1	279 5
EBIT	13 3	11 9	33 3	23 3
EBIT margin	7 7%	8 6%	9 6%	8 3%
Restructuring	4 5	0 0	4 5	0 0
Single impairments	-	-	-	2 6
Others	0 2	0 0	0 2	0 3
Exceptional items	0 2	0 0	0 2	2 9
Discontinued operations	-	-	-	-
Adjustments	4 7	0 1	4 7	2 9
Adj EBIT	18 0	12 0	38 0	26 2
Adj EBIT margin	10 4%	8 6%	10 9%	9 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. EBIT margin is defined as Adj. EBIT divided by revenue
• Adj. EBITDA is defined as profit for the year before income tax result, financial result and amortisation, 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. 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 is defined as free cash flow 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 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
• Days sales outstanding (DSO) is defined by dividing trade receivables (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
• 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 amortisation and depreciation
• Free cash flow is defined as the sum of cash flow from operating and investing activities
• Gross financial debt is defined as the sum of liabilities to banks and lease liabilities
• Net financial debt is defined as gross financial debt less cash and cash equivalents
• Net leverage ratio is defined as the ratio of net financial debt to Adj. EBITDA
• 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
• 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

Date of publication

14 November 2024

Contact

investor.relations@novem.com | All information is constantly updated and available. Please visit the Investor Relations Portal on the Company website: https://ir.novem.com

Editor

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

Financial information

This presentation contains unaudited financial information for Novem, which may be subject to change.

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 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 eventsand 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, the numbers presented may not add up precisely to the totals provided.

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

Email: investor.relations@novem.com www.novem.com