Novem Group S.A.

Investor Presentation • Nov 29, 2023

29 November 2023

HY 2023/24 Results

• In Q2 2023/24, Novem generated revenue of €171.9m equalling a modest decline over previous year (-3.1% y/y)
• Like in the preceding quarter, the trading conditions remained challenging across all regions, especially in Europe
• Adj. EBIT of €18.0m resulted in a margin of 10.4% and was mainly affected by production inefficiencies
• Free cash flow of €22.3m underpinned the Group's ability of achieving a strong cash conversion
• Closure of production in Bergamo announced and transfer of platforms to other locations in preparation
• Further consolidation of capacities will improve cost structure and utilisation of the current manufacturing footprint
• Floods in Slovenia also hit the plant based in Žalec and caused some disruption of the operation
• Novem has been nominated as supplier for the Tesla Model Y facelift (aluminium décor) and the Jaguar Panthera

Difficult market environment making 2023/24 a year of transition

HY 2023/24 financial highlights

2 GROUP RESULTS

Page 6

Revenue

• Total revenue of €171.9m in Q2 2023/24 fell short of prior year by €-5.5m or -3.1%
• Top line was unfavourably impacted by FX effects; revenue would have been higher by €+6.5m or +3.8% at constant FX rates
• Revenue Series contributed 87.0% to total revenue and shrank by €-6.9m or -4.4% y/y
• Decline in Series business was driven by weak customer call-offs and model changes in Europe and Asia
• According to the latest LMC report, global LVP rose by +5.6% y/y from 21.4m to 22.6m units
• Revenue Tooling of €22.3m increased considerably by €+1.4m or +6.7% versus last year
• In the last twelve months, total revenue of €688.1m decreased by €-5.5m or -0.8% compared to previous quarter

Adj. EBIT

• In Q2 2023/24, Adj. EBIT decreased by €-2.1m, translating into a solid margin of 10.4% for the period under review
• Operating result was influenced by weak revenue, particularly in Europe and Asia
• As a consequence, Novem suffered from mediocre utilisation of several plants (Bergamo, Pilsen, Žalec)
• Savings measures underway, including the closure of the plant in Bergamo and personnel adjustments
• Furthermore, disadvantageous development of the product mix through certain model changes
• On the other hand, operating result was supported by continued lower input costs and freight expenses
• Additionally, bottom line benefited from customer compensation payments

Free cash flow

• In Q2 2023/24, Novem posted a strong free cash flow of €22.3m, which was similar to last year's level of €22.8m
• Cash flow from operating activities (€24.7m) recorded marginally below prior year by €-1.1m due to the following reasons:
• Decreased other liabilities (€-4.6m) and trade payables (€-4.1m), higher tax payments (€-2.2m) and Others (€-3.1m); conversely, lower trade receivables (€+8.2m) as well as inventories (€+4.7m)
• Substantial reduction of other liabilities was largely attributable to increased advanced tooling payments
• Cash flow from investing activities of €-2.4m fell short of previous year (€-3.0m PY)
• On a last-twelve-month calculation, free cash flow of €97.7m was well above PY by €+23.2m or +31.2%

Capital expenditure

• In Q2 2023/24, capital expenditure of €4.6m exceeded last year's level by €+0.7m or +19.5%
• Due to the increased investments, the underlying capex ratio also increased to 2.7% of revenue (2.2% PY)
• Majority of capital expenditure was invested in Querétaro (€1.4m), Langfang (€0.9m) and Žalec (€0.8m) for new projects
• LTM capital expenditure of €18.3m led to a capex ratio of 2.7% of revenue
• Plant closure in Bergamo is not expected to trigger investments in other locations
• Consolidated footprint in Europe will enhance the utilisation of the available production capacities

Total working capital

LTM total working capital (€m)

• As of 30 September 2023, total working capital recorded notably below last year at €136.3m (-12.8%)
• Favourable deviation of €+20.0m resulted from lower tooling net (€+14.4m), trade receivables (€+6.6m) and inventories (€+4.7m) as well as contract assets (€+1.2m); on the other hand, negative impact from lower trade payables (€-6.9m)
• Lower tooling net achieved by deferred cash out-flow for several projects; conversely, lower trade payables due to volume
• In % of LTM revenue, total working capital fell short of last year's level of 23.0% at 19.8% only
• Trade working capital, excluding tooling net and contract assets, also developed positively from €60.3m to €56.0m
• Reported in days outstanding, DIO of 38 (39 PY) and DSO of 33 (36 PY) improved, while DPO of 49 (53 PY) deteriorated

Capital structure

• Gross financial debt and cash balances rose in comparison to the same reporting date last year
• Lease liabilities, included in gross financial debt, stood at €39.3m (€34.4m PY)
• Principal sources of funds contained €136.6m cash (€113.5m PY) and €43.1m non-recourse factoring (€48.7m PY)
• Solid cash position of €136.6m despite an extraordinary dividend distribution of €49.5m in August 2023
• As of 30 September 2023, net financial debt recorded at €152.2m and showed a decrease versus previous year (€168.9m)
• Net leverage ratio of 1.4x stood almost on the same level as prior year (1.5x Adj. EBITDA)

Revenue by operating segments

Europe Americas Asia

• As last quarter, revenue decreased both in Europe and Asia, while Americas developed favourably
• Revenue decline in Europe (€-2.2m y/y) was largely attributable to the fundamentally sluggish trading conditions and the scheduled phase-out of the BMW 5-series
• Growth in Americas (€+1.1m y/y) was driven by a continued strong momentum of SUVs; on the other hand, top line was diluted by a comparatively weaker US dollar
• Revenue in Asia (€-4.4m y/y) was also unfavourably influenced by currency effects (weaker Chinese Renminbi) and model changes (launch of Lotus Lambda and SOP/EOP of MB E-class)
• LTM revenue showed the following distribution across the regions: 47.6% Europe, 38.9% Americas and 13.5% Asia

Adj. EBIT by operating segments

• On a segmental basis, Adj. EBIT showed the same development as top line: the erosion both in Europe and Asia was partly offset by a strong profit contribution from Americas
• In Europe, Adj. EBIT of €2.8m (€4.4m PY) was again affected by structurally weaker call-offs from OEMs, production inefficiencies and product mix shifts
• Customer compensation payments as well as further decreased material costs mitigated the negative impact in the region
• Americas benefited from the buoyant top line and reduced input costs leading to a solid Adj. EBIT of €12.6m (€10.7m PY)
• In Asia, Adj. EBIT of €2.6m (€5.1m PY) was largely driven by the aforementioned model changes
• In comparison with the previous quarter, LTM Adj. EBIT declined by -2.7% from €80.4m to €78.2m

Profit and loss statement

Profit and loss statement (€m)

	Q2 2022/23	Q2 2023/24	HY 2022/23	HY 2023/24
Revenue	177 4	171 9	359 3	347 1
Increase or decrease in finished goods and work in process	-4 0	-5 3	-5 3	-11 5
Total operating performance	173 4	166 7	354 0	335 5
Other operating income	0 5	3 3	9 6	4 9
Cost of materials	-90 6	-83 5	-184 1	-163 9
Personnel expenses	-40 7	-42 0	-82 1	-85 4
Depreciation , amortisation and impairment	-8 0	-8 2	-16 1	-16 5
Other operating expenses	-18 9	-18 3	-39 8	-36 7
Adj EBIT	20 1	18 0	41 5	38 0
Adjustments	-0 3	-4 7	-0 5	-4 7
(EBIT) Operating result	19 8	13 3	41 0	33 3
Finance income	0 9	2 1	1 7	3 3
Finance costs	-11 4	-8 9	-19 8	-12 4
Financial result	-10 6	-6 8	-18 1	-9 1
Income taxes	-3 1	-3 2	-7 7	-6 3
Deferred taxes	0 1	1 5	-0 4	0 2
Income result tax	-3 0	-1 6	-8 1	-6 1
Profit for period the	6 3	4 9	14 7	18 1

Balance sheet

Balance sheet (€m)
	30 Sep 2022	30 Sep 2023		30 Sep 2022	30 Sep 2023
			Total equity	82 7	78 8
Intangible assets	2 7	2 1	Pensions and similiar obligations	35 3	27 1
Property , plant and equipment	182 4	181 4	Tax liabilities	-	-
Trade receivables	51 6	52 3	Other provisions	3 2	1 5
Other non-current assets	11 8	17 3	Financial liabilities	247 9	248 5
Deferred tax assets	19 3	5 2	Other liabilities	29 9	35 8
			Deferred liabilities tax	4 2	-2 7
Total non-current assets	267 8	258 3	Total liabilities non-current	320 5	310 1
Inventories	121 7	106 3	Tax liabilities	17 0	17 0
Trade receivables	54 6	46 4	Other provisions	51 2	52 9
Other receivables	33 4	32 0	Financial liabilities	5 8	1 5
Other current assets	16 8	12 4	Trade payables	59 8	52 4
Cash and cash equivalents	113 5	136 6	Other liabilities	70 7	79 3
Total current assets	340 0	333 7	Total liabilities current	204 5	203 1
Assets	607 8	592 0	Equity and liabilities	607 8	592 0

Cash flow statement

Cash flow statement (€m)

	Q2 2022/23	Q2 2023/24	HY 2022/23	HY 2023/24
Profit for the period	6 3	4 9	14 7	18 1
Income expense (+)/income (-) tax	3 1	3 2	7 7	6 3
(+)/(-) Financial result net	1 2	2 8	2 1	6 0
Depreciation , amortisation and impairment (+)	8 0	8 2	16 1	16 5
Other expenses (+)/income (-) non-cash	-0 2	-0 8	0 3	-1 6
Increase (-)/decrease (+) in inventories	4 9	9 6	10 4	12 6
(-)/decrease (+) Increase in trade receivables	-3 2	5 0	-18 1	-4 7
Increase (-)/decrease (+) in other assets	-1 0	0 5	-2 1	6 8
(-)/decrease (+) Increase in deferred taxes	-0 1	-1 5	0 4	-0 2
Increase (-)/decrease (+) in prepaid expenses/deferred income	0 3	-0 9	-0 1	-1 6
(+)/decrease (-) Increase in provisions	3 1	1 2	4 3	3 8
Increase (+)/decrease (-) in trade payables	2 8	-1 3	-0 1	-4 8
(+)/decrease Increase (-) in other liabilities	2 8	-1 8	-6 0	-11 5
Gain (-)/loss (+) on disposals of non-current assets	-0 0	0 0	0 0	0 0
Cash from/cash received (+) paid (-) for income taxes	-2 2	-4 4	-4 3	4 -7
Cash flow from operating activities	25 8	24 7	25 5	38 2

Cash flow statement (€m)

	Q2 2022/23	Q2 2023/24	2022/23 HY	2023/24 HY
Cash (+) received from disposals of intangible assets	-	-	-	-
Cash received (+) from disposals of , plant and equipment property	0 0	0 0	0 8	0 0
Cash (-) paid for investments in intangible assets	-0 0	-0 0	-0 0	-0 1
Cash paid (-) for investments in , plant and equipment property	-3 8	-4 6	-7 5	-7 9
Interest received (+)	0 9	2 1	1 7	3 3
Cash flow from investing activities	-3 0	-2 4	-5 1	-4 7
Cash paid (-) for subsidies/grants	-0 0	-0 0	-0 0	-0 0
Cash paid (-) for finance leases	-2 4	-2 5	-4 5	0 -5
Interest paid (-)	-1 6	-4 2	-2 9	-8 1
Dividends paid (-)	-17 2	-49 5	-17 2	-49 5
Cash flow from financing activities	-21 3	-56 2	-24 6	-62 6
increase (+)/decrease (-) in equivalents Net cash and cash	1 6	-34 0	-4 2	-29 1
Effect of exchange fluctuations on cash and cash equivalents rate	0 4	0 7	0 8	0 2
Cash of and cash equivalents the beginning the reporting period at	111 6	169 9	117 0	165 5
Cash and cash equivalents the end of the reporting period at	113 5	136 6	113 5	136 6

EBIT adjustments

EBIT adjustments (€m)

	Q2 2022/23	Q2 2023/24	HY 2022/23	HY 2023/24
Revenue	177 4	171 9	359 3	347 1
EBIT	19 8	13 3	41 0	33 3
EBIT margin	11 2%	7 7%	11 4%	9 6%
Restructuring	-	4 5	-	4 5
Covid-19 costs	0 0	-	0 2	-
Others	0 2	0 2	0 3	0 2
Exceptional items	0 3	0 2	0 5	0 2
Discontinued operations	-	-	-	-
Adjustments	0 3	4 7	0 5	4 7
Adj EBIT	20 1	18 0	41 5	38 0
Adj EBIT margin	11 3%	10 4%	11 5%	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 November 2023

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 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. 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