Novem Group S.A.

Earnings Release • Feb 16, 2023

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For the first nine months of the financial year 2022/23, Novem reported an Adj. EBIT of €60.5 million, representing 3.3% year-on-year growth. This corresponds to a YTD profit margin of 11.5%. As in the previous quarters, the high Tooling share within total revenue led to a certain dilution of the Adj. EBIT marqin of 11.4% in Q3 2022/23. Furthermore, this decrease was caused by continued headwinds from higher material prices, increased energy costs and freight expenses. Novem already received further compensation payments from OEMs that partly mitigate the impact from inflation and will continue the discussions in 2023.

Outstanding free cash flow and lower working capital

Free cash flow reached an outstanding value of €24.6 million, exceeding the Q3 2021/22 by €15.6 million. Cash flow from operating activities (€28.5 million) contributed the most due to lower receivables and higher profit.

At the end of the quarter, total working capital 1 recorded at €137.1 million, a decrease of -9.8% compared to previous year. The positive deviation of €14.8 million year-on-year was mainly due to a lower tooling net (€+14.0 million) and higher trade payables (€+5.2 million). This was offset by an increase in inventories (€ 5.9 million), which was largely attributable to safety stock requirements from OEMs in order to cushion potential supply chain disruptions.

Stable capital expenditure

Capital expenditure 1 of €4.7 million in the third quarter of the financial year 2022/23 remained almost flat compared to the previous year (€4.5 million). Based on total revenue of €166.9 million, the underlying capex ratio of 2.8% was at a similar level compared to last year. The majority of investments comprised growth capex concerning new platforms to be launched with almost half of total capex invested in Langfang in China (€2.2 million).

Continued successful deleveraging

As of 31 December 2022, Novem's gross financial debt | recorded at prior year's level, while cash rose considerably. Principal sources of funds comprised €132.4 million cash (PY: €73.9 million) and €38.2 million derived from non-recourse factoring (PY: €42.0 million). Net financial debt ' as of 31 December 2022 stood at €150.0 million and implied a sharp decline over last year's €207.6 million. The net leverage ratio1 with 1.3x Adj. EBITDA fell to the lowest level since the post-IPO refinancing. Thus, Novem has continued to successfully deleverage its balance sheet in a challenging market environment.

The quarterly statement for the third quarter of financial year 2022/23 can be found on the Investor Relations website at Reports & Presentations.

16.02.23, 09:19

Novem Group S.A.: Q3 2022/23 results show solid revenue growth and outstanding free cash flow | Corporate - EQS News

1 For the definition/calculation of the used Alternative Performance Measures (APMs), please refer to the glossary provided in the corresponding quarterly statement for the third quarter of financial year 2022/23, which can be found on the Investor Relations website under Reports & Presentation.

About Novem

German-headquartered Novem is a globally leading supplier of decorative interior trim parts for the premium automotive industry. Across the range of key materials such as genuine wood, aluminium, carbon and premium synthetics, the Company offers unrivalled quality, technology and innovation to a growing customer base including all major premium carmakers worldwide. Founded in Vorbach, Germany, back in 1947, the Company has continuously expanded its qlobal footprint in Germany, Italy, Czech Republic, Slovenia, China, USA, Honduras and Mexico. Novem employs about 5,440 people at 12 locations and achieved revenue of around €615 million in FY 2021/22.

Contact Investor Relations Press Contact Mareike Völker Isabel Henninger Head of Investor Relations Phone: +49 69 506 037 583 Phone: +49 9205 18 1399 E-Mail: isabel.henninger@kekstcnc.com E-Mail: investor.relations@novem.com

For more information, please visit www.novem.com.

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