Novem Group S.A.

Earnings Release • May 29, 2024

29 May 2024

FY 2023/24 Preliminary Results

• Novem generated full-year revenue of €635.5m (-9.3% y/y) with continued weak market demand in the last quarter of the year
• Lower turnover clearly left its mark on the Adj. EBIT of €69.1m, still translating into a solid profit margin of 10.9%
• In order to further adjust the cost structure to the reduced revenue, Novem laid off c.60 employees in the operation in Vorbach
• Besides the closure of the Bergamo plant, this was the second key restructuring initiative to streamline the footprint in Europe
• In the financial year 2023/24, Novem booked an order intake of >€150m supporting the mid-term growth outlook
• Among others, winning a major US premium EV carmaker is most noticeable, making it one of Novem's future top 5 account
• Strategically, the acquisition of the first exterior component marked the entry into the high-end exterior trim market for Novem

Short-term market conditions remain challenging but good prospects in the medium-term

2 GROUP RESULTS

Page 6

Revenue

• Total revenue of €149.7m in the last quarter of 2023/24 fell behind previous year by €-24.4m or -14.0%
• Top line was again impacted by negative FX effects; total revenue would have been higher by €+1.0m or +0.7% at constant FX rates
• Revenue Series of €129.4m was well below prior year by €-33.1m or -20.4% and contributed 86.4% to total revenue
• Top line was again hampered by a persistently soft market, above all in Europe and Asia
• In contrast to the past, LMC reported a flat development in global LVP of 21.5m units (0.0% y/y)
• Revenue Tooling of €20.3m increased well by €+8.7m because of a different project phasing
• On a full-year basis, total revenue of €635.5 remained noticeably below last year by €-64.8m or -9.3%

Adj. EBIT

• In Q4 2023/24, Adj. EBIT of €14.4m recorded considerably behind last year by €-6.7m or -31.8%
• Once again, bottom line was badly affected by the lacklustre sales development and thus a weak cost coverage
• Novem responded to the further reduction in call-offs with rigorous cost control and streamlined its operation in Vorbach
• Restructuring activities in 2023/24 (Bergamo and Vorbach) should help lift the utilisation of the plants in Europe
• In addition, the operating result was diluted by the negative effects from product mix and model changes
• Relatively high personnel expenses partly driven by wage inflation compensation payments in Germany
• On the other hand, the Adj. EBIT was supported by lower material expenses and customer settlement claims

Free cash flow

• Excellent free cash flow of €24.2m in Q4 2023/24 but still down by €-15.5m or -39.0% y/y
• Cash flow from operating activities of €25.9m was well behind last year by €-18.5m due to the following reasons:
• Income taxes (€-12.0m), profit (€-10.8m) and provisions (€-10.1m) as well as Others (€-5.6m); conversely, other non-cash expenses (€+8.0m), reduced other receivables (€+6.5m) and stock (€+5.5m)
• High tax payments came from the assessment of previous periods (deferred due to Covid-19) and prepayments in Germany
• Decrease in provisions was primarily driven by the out-flow for the restructuring measures in Q4 2023/24
• Cash flow from investing activities of €-1.8m was around a third of prior year's figure of €-4.8m only

Capital expenditure

• Capital expenditure reached €3.5m in the last quarter of 2023/24, which was €-2.2m lower versus previous year
• Based on total revenue of €149.7m, the underlying capex ratio of 2.3% came in below last year's figure of 3.3%
• On a full-year basis, Novem made overall investments of €16.1m, which led to a capex ratio of 2.5%
• More than half of the capital expenditure in the financial year was undertaken in Langfang (€-6.1m) and Querétaro (€-4.0m)
• Majority of capital expenditure was growth-related and necessary for the ramp-up of new projects
• Looking ahead, the newly acquired platform of a US premium EV carmaker will require additional capex over the coming months

Total working capital

LTM total working capital (€m)

• As of 31 March 2024, total working capital stood at €133.3m and was +7.5% higher than last year (€124.0m)
• Variance of €-9.3m y/y came from lower payables (€-14.4m) and higher tooling net (€-11.8m); conversely, lower trade receivables (€+8.6m), inventories (€+7.9m) and contract assets (€+0.4m)
• Decline in trade payables mainly related to the shrinking volume; conversely, lower trade receivables due to reduced top-line
• As percentage of LTM revenue, total working capital recorded at 21.0% as of 31 March 2024 (17.7% PY)
• Trade working capital (excluding tooling net and contract assets) developed favourably from €53.3m to €51.1m
• If measured in days outstanding, DIO of 39 (36 PY) and DSO of 35 (33 PY) as well as DPO of 47 (50 PY) worsened

Capital structure

• As of 31 March 2024, gross financial debt of €306.4m stood well above last year's figure of €288.5m (€+17.9m)
• As previously reported, the increase was largely attributable to a steep rise in lease liabilities of €+17.4m y/y
• Principal sources of funds included €141.5m cash (€165.5m PY) and €44.3m from non-recourse factoring (€54.0m PY)
• In summary, net financial debt was at €164.9m, which marked a deterioration against prior year (€123.0m)
• Net leverage ratio of 1.6x remained at a clearly higher level than previous year (1.1x Adj. EBITDA)
• However, the ratio showed a sequential improvement compared to the preceding quarter (1.7x Adj. EBITDA)

Revenue by operating segments

• From a geographic perspective, revenue declined both in Europe and Asia, while Americas developed favourably
• Poor top line in Europe (€-16.7m y/y) was attributable to revenue Series, which could not be offset by higher revenue Tooling
• At platform level, MB E-class, BMW 5-series (EOP) and MB GLC led the ranking of underperformers (in absolute terms); moreover, the structural low demand for EVs continued
• Growth in Americas (€+5.8m y/y) was driven by Tooling business, while Series revenue moved sideways, mainly due to a four-week strike over wages at the Audi plant in Puebla (Mexico)
• Lower revenue in Asia (€-13.4m y/y) was caused by both Tooling and Series with several model changes and a continued weak launch of the new Chinese programs (Avatr, FAW Hongqi, Lotus)
• LTM revenue showed the following distribution across all regions: 45.2% Europe, 42.8% Americas and 12.0% Asia

Adj. EBIT by operating segments

• On a segmental basis, Adj. EBIT remained stable both in Europe and Americas, while Asia fell distinctly short of prior year
• In Europe, Adj. EBIT decreased to €0.7m (€1.3m PY) because of lower volume, inefficiencies leading to a weak cost coverage and a continued unfavourable product mix
• While material expenses (including freights, leased workers) and customer payments developed positively, labour costs showed a negative variance (wage inflation adjustment in Germany)
• Adj. EBIT of €14.1m (€15.9m PY) in Americas was influenced by reduced income from others, while volume as well as input costs continued to be favourable
• In Asia, Adj. EBIT of €-0.3m (€4.0m PY) was negatively impacted by lower revenue for both Series and Tooling
• Overall Adj. EBIT in 2023/24 amounted to €69.1m and stood well below PY by €-12.7m or -15.5%

Profit and loss statement (€m)

	Q4 2022/23	Q4 2023/24	FY 2022/23	FY 2023/24
Revenue	174 1	149 7	700 3	635 5
Increase or decrease in finished goods and work in process	-1 4	-6 2	-7 5	-15 2
Total operating performance	172 7	143 5	692 8	620 4
Other operating income	11 4	5 2	25 8	18 3
Cost of materials	-88 4	-71 6	-354 7	-303 2
Personnel expenses	-44 6	-40 1	-167 7	-166 0
Depreciation , amortisation and impairment	-8 3	-8 3	-32 5	-33 0
Other operating expenses	-21 6	-14 3	-82 0	-67 4
Adj EBIT	21 2	14 4	81 7	69 1
Adjustments	-0 2	-3 7	-1 3	-9 7
Operating result (EBIT)	21 0	10 8	80 5	59 3
Finance income	5 3	1 5	3 6	7 4
Finance costs	-3 9	-7 5	-13 1	-19 9
Financial result	1 5	9 -5	-9 5	-12 6
Income taxes	-1 9	-4 7	-15 7	-13 1
Deferred taxes	-6 3	3 3	-5 2	1 1
Income result tax	-8 3	-1 4	-20 9	-12 0
Profit for the period	14 2	3 4	50 0	34 8

Balance sheet

Balance sheet (€m)
	31 Mar 2023	31 Mar 2024		31 Mar 2023	31 Mar 2024
			Total equity	107 3	89 9
Intangible assets	2 4	2 8	Pensions and similiar obligations	27 0	28 7
Property , plant and equipment	185 1	193 9	Other provisions	1 4	2 3
Trade receivables	46 3	49 8	Financial liabilities	248 2	248 8
Other non-current assets	10 3	13 1	Trade payables	-	0 0
Deferred tax assets	8 3	10 6	Other liabilities	33 3	55 6
			Deferred liabilities tax	0 6	1 4
Total non-current assets	252 5	270 2	liabilities Total non-current	310 6	336 8
Inventories	116 3	99 4	Tax liabilities	19 1	6 7
Trade receivables	47 5	41 3	Other provisions	46 7	38 9
Other receivables	38 0	30 0	Financial liabilities	1 2	1 2
Other current assets	18 2	19 6	Trade payables	60 6	45 4
Cash and cash equivalents	165 5	141 5	Other liabilities	92 7	82 4
Total current assets	385 5	331 9	Total liabilities current	220 2	175 5
Assets	638 0	602 1	Equity and liabilities	638 0	602 1

Cash flow statement

Cash flow statement (€m)

	Q4 2022/23	Q4 2023/24	FY 2022/23	FY 2023/24
Profit for the period	14 2	3 4	50 0	34 8
expense (+)/income (-) Income tax	1 9	4 7	15 7	13 1
Financial result (+)/(-) net	2 9	3 9	7 1	14 0
Depreciation , amortisation and impairment (+)	8 3	8 5	32 5	33 7
Other non-cash expenses (+)/income (-)	-2 3	5 7	-9 1	1 5
(-)/decrease (+) Increase in inventories	6 1	11 7	13 2	18 5
Increase (-)/decrease (+) in trade receivables	0 0	3 4	-9 4	2 1
Increase (-)/decrease (+) in other assets	-1 5	5 0	-3 2	10 6
Increase (-)/decrease (+) in deferred taxes	6 4	-3 3	2 5	-1 1
(-)/decrease (+) expenses/deferred Increase in prepaid income	1 0	-0 7	1 9	-2 0
Increase (+)/decrease (-) in provisions	-3 9	-14 0	2 7	-18 4
Increase (+)/decrease (-) in trade payables	4 6	7 7	-10 0	-14 1
Increase (+)/decrease (-) in other liabilities	7 5	2 9	10 4	-8 0
Gain (-)/loss (+) of on disposals non-current assets	0 0	0 0	0 1	0 1
Cash received (+) from/cash paid (-) for income taxes	-0 9	-12 9	-8 7	-24 5
Cash flow from operating activities	44 4	25 9	98 3	63 8

Cash flow statement (€m)

	Q4 2022/23	Q4 2023/24	2022/23 FY	2023/24 FY
Cash received (+) from disposals of , plant and equipment property	0 0	0 2	0 8	0 2
Cash paid (-) for investments in intangible assets	-0 2	-1 0	-0 3	-1 2
Cash (-) paid for investments in , plant and equipment property	-5 5	-2 4	-17 6	-14 9
(+) Interest received	0 9	1 5	3 4	5 9
Cash flow from investing activities	-4 8	-1 8	-13 8	-10 0
Cash (-) subsidies/grants paid for	-0 0	-	-0 0	-0 0
Cash paid (-) for finance leases	-2 9	-3 7	-9 8	-11 4
Interest paid (-)	-3 3	-4 4	-8 5	-16 9
Dividends paid (-)	-	-	-17 2	-49 5
Cash flow from financing activities	-6 2	-8 1	-35 5	-77 8
Net increase (+)/decrease (-) in cash and cash equivalents	33 4	16 1	49 0	-24 0
Effect of exchange fluctuations on cash and cash equivalents rate	-0 4	0 4	-0 5	0 0
Cash and cash equivalents the beginning of the reporting period at	132 4	125 1	117 0	165 5
Cash equivalents of reporting period and cash at the end the	165 5	141 5	165 5	141 5

EBIT adjustments

EBIT adjustments (€m)

	Q4 2022/23	Q4 2023/24	2022/23 FY	2023/24 FY
Revenue	174 1	149 7	700 3	635 5
EBIT	21 0	10 8	80 5	59 3
EBIT margin	12 1%	7 2%	11 5%	9 3%
Restructuring	-	3 7	-	8 9
Covid-19 costs	0 0	-	0 3	-
Others	0 2	0 0	0 9	0 8
Exceptional items	0 2	0 0	1 3	0 8
Discontinued operations	-	-	-	-
Adjustments	0 2	3 7	1 3	9 7
Adj EBIT	21 2	14 4	81 7	69 1
Adj EBIT margin	12 2%	9 6%	11 7%	10 9%

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 sales outstanding (DSO) is defined by dividing trade payables (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
• 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, hedging 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

29 May 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