Stabilus SE

Investor Presentation • Oct 12, 2023

ACQUISITION OF DESTACO EXPANDING STABILUS INDUSTRIAL AUTOMATION BUSINESS

ANALYST & INVESTOR WEB CONFERENCE ON OCTOBER 12, 2023

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Stabilus SE (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.

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

THE WORLD CHANGES: MACRO-ECONOMIC TRENDS

AUTOMATION – THE KEY MEGATREND TODAY AND IN THE FUTURE

Source: IMF World Economic Outlook et al.

• › Economic growth requires higher production capacity.
• › Labor shortages, driven by demographic change, limit production capacity and economic growth.
• › As a result, higher automation is required to offset labor shortages.

› Current geopolitical situation necessitates balanced production footprint.

• › Industrial reshoring brings manufacturing back to high-cost countries.
• › As a result, higher automation is required to ensure competitiveness.

• › Demand for safe and ergonomic working environment continues to increase.
• › Workers prefer physically less strenuous jobs.
• › As a result, higher automation is required to perform physically demanding tasks.
• Rising labor shortages and costs, along with economic growth, drive global demand for automation.
• Industrial production reshoring to EMEA and AMER worsens labor availability, fueling the need for automation.
• Stabilus already provides automation components and the acquisition of DESTACO will further strengthen Stabilus position.

ACQUISITION OF DESTACO – AN IMPORTANT STEP…

… TOWARDS LEADERSHIP IN INDUSTRIAL MOTION CONTROL TECHNOLOGIES

Transaction summary	› Acquisition of DESTACO from the Dover Corporation; an exclusively negotiated deal › DESTACO generated US\$213m revenue with 20% EBIT margin in FY2022 › Agreement signed on October 11, 2023, closing expected in H1 CY2024
Transaction value	› Purchase price of US\$680m (cash and debt free) for 100% of the share capital › Approx. 13x 2024E EV/EBIT pre synergies, and c. 12x 2024E EV/EBIT after synergies › In addition, c. US\$50m present value of expected tax benefits for Stabilus
Transaction financing	› All-cash consideration to Dover Corporation › Transaction to be financed on closing by c. €150m cash, €250m revolving credit facility and €250m new bridge facility › Net leverage ratio at closing below 2.5x (net debt / EBITDA), to be reduced below 2.0x until end FY2026
Strategic impact	› Further diversifying Stabilus' industrial product offering and improving Stabilus Group's automotive / industrial balance › Automation boost on the way to our vision (STAR 2030), backed by megatrends; balancing of geographical exposure
Financial impact	› Incl. synergies, revenue growth of c. 9% p.a. expected for DESTACO 2022-2028 with EBIT margin increasing to c. 23 % › Revenue synergies > €50m p.a., cost synergies > €10m p.a., plus c. US\$50m present value of expected tax benefits › Significant positive impact on Stabilus Group's revenue, adj. EBIT margin and earnings

DESTACO AT A GLANCE

LEADER IN AUTOMATION, WORKHOLDING AND REMOTE HANDLING

• › DESTACO (www.destaco.com) is a global leader in the design and manufacture of high-performance automation, workholding and remote handling solutions.
• › As industrial automation expert, the Company serves customers in a variety of markets and regions. Its machinery & automaton equipment is supplied to customers in consumer goods, packaging, aerospace, automotive, life sciences, and nuclear sectors.
• › The company was founded in 1915, is based in Auburn Hills, Michigan, USA, and operates globally through 650 employees, 5 major production locations in USA, China, Thailand, France and Germany.
• › Revenues of US\$213m with 20% EBIT margin were generated in FY2022; solid track record; revenues of c. US\$360m with c. 23% EBIT margin are targeted for FY2028, i.e., a revenue CAGR (2022- 2028) of c. 9% (after synergies) with higher margin due to growing share of electromechanical / powered solutions in DESTACO's product portfolio, economies of scale and synergies
• › Experienced, long-time management with the CEO Stefan Eggers at the head to remain on board

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Headquarters in Auburn Hills, Michigan, USA Annual revenue > \$200m, EBIT margin > 20%

FY2022 revenue by region

DESTACO AT A GLANCE

GLOBAL FOOTPRINT

Strong global manufacturing footprint allowing close client coverage and potential to efficiently leverage network effects.

DESTACO AT A GLANCE PRODUCT PORTFOLIO

Product groups … … from robotic tools to clamps

• › Robotic tooling, gripping & remote handling (c. 30% of sales)
  • › Electric automation grippers, pneumatic automation grippers, sheet metal grippers, material/packaging grippers
  • › BodyBuilder octagonal tooling, compliance devices, accelerate lightweight tooling, round tooling, spider grip geometric tooling, tool changers, vacuum products, accelerate digital solutions, small payload tooling (<10kg)
  • › Telemanipulators, transfer systems, glove ports
• › Linear & rotary positioning (c. 20% of sales)
  • › Conveyors, feed escapements, slides
  • › Mechanical indexers, clutches, part handlers, rotaries, servo positioners
• › Clamping (c. 50% of sales)
  • › Manual, pneumatic, hydraulic, electric clamps

SELECT PRODUCTS, BRANDS AND APPLICATIONS

INDUSTRIAL MOTION CONTROL: AUTOMATING TOMORROW TM

SELECT PRODUCTS, BRANDS AND APPLICATIONS

INDUSTRIAL MOTION CONTROL: AUTOMATING TOMORROW TM

DESTACO'S AND STABILUS' PRODUCTS ARE WIDELY USED…

… IN AUTOMATED PRODUCTION LINES

DESTACO's product portfolio is complementary to Stabilus Group's Industrial Machinery & Automation business.

• › DESTACO's very good standing in USA and Asia
• › Leading position in industrial automation markets: clamping, positioning, robotic tooling and remote handling
• › Strong brands (DESTACO, Bodybuilder, Robohand, Camco, CRL et al.) and technology
• › Attractive financial profile (20% EBIT margin in FY2022)

DESTACO's strengths Stabilus' strengths Highly complementary combination

• › Better access and distribution to customers in existing geographies; similar customer base drives sales synergies
• › Complementary footprint provides cost advantages
• › Increased share of industrial business, higher diversification and robustness; strong position in high-growth industrial automation market segment

• › Leading supplier of smart motion control technologies and subsystems to a large number of industrial customers, perfectly in line with the current mega trends

• › Stabilus' distribution network with large number of distribution partners worldwide

• › Strong player in high-volume automotive production with diversified Industrial product portfolio
• › Strong financial performance and value creation track record
• › Successful product innovation

RECAP: STABILUS LONG-TERM STRATEGY STAR 2030

… BACKED BY MACRO-ECONOMIC TAILWINDS

› Labor shortages

› Expected global economic growth is threatened by significant shortage of skilled workers. Therefore, transformation of production towards automation is necessary.

› Industrial reshoring

› Geopolitical uncertainties lead to industrial reshoring towards Europe and North America. US Inflation Reduction Act will accelerate industrial automation.

› Ergonomics and workplace safety

› The aging population of skilled labor in developed countries requires more support in the production processes, i.e., more handling tools, safer and highly automated production.

As a consequence, intelligent motion control and industrial automation become even more important.

PLANNED STRATEGIC DEVELOPMENT

VISION: LEADER IN INTELLIGENT MOTION CONTROL TECHNOLOGIES

DESTACO is an important step in Stabilus Group's evolution from a component supplier in the past to a leader in intelligent motion control systems in 2030.

SIGNIFICANT EXPANSION OF INDUSTRIAL BUSINESS…

… AND INDUSTRIAL MACHINERY & AUTOMATION SUBSEGMENT

SUSTAINABLE PROFITABLE GROWTH EXPECTED…

… DRIVEN BY AUTOMATION, ELECTRIFICATION, DIGITALIZATION

Outlook for DESTACO's sustainable profitable growth

Large potential and room for growth in robotic tooling

• › Robotic tooling, gripping & remote handling is the highest growth market through 2025
• › The estimated growth for DESTACO's revenue, CAGR (2022, 2028) at c. 9% p.a. after synergies, driven by increasing
  • › automation,
  • › electrification and
  • › digitalization
• › With advancing electrification, pneumatic product applications are being replaced by smarter, electromechanical solutions
• › Estimated EBIT margin improvement from 20% in 2022 to c. 23% in 2028 due to higher share of electromechanical / powered solutions in DESTACO's product portfolio, economies of scale and synergies

EXPECTED SYNERGIES

SYNERGIES FOCUSED ON HIGHER MARKET PENETRATION

Identified synergies

• › Full run rate revenue synergies > €50m p.a., with expected drop-through rate (EBIT margin) of > 20%
• › Full run rate cost synergies > €10m p.a., with major share (75%) to be achieved promptly, during the first two years following the closing
• › Tax benefit of US\$25m-US\$30m expected in the years 2024-2028, i.e., a significant portion of the c. US\$50m total present value of expected tax benefits; benefits arise due to combined asset and share deal, i.e., acquisition of intellectual property, trade names etc. from Dover as part of asset deals

Key priorities Timeline

• › Distribution of DESTACO's products through Stabilus' large number of distribution partners worldwide; more than 400 distributors relevant for DESTACO's products
• › As DESTACO has a very good standing in the US and Asia, distribution of Stabilus products through DESTACO's distribution partners in Americas and APAC
• › Leveraging of access to OEMs in all regions
• › Integration of production sites, insurance cost and administrative cost savings by incorporating DESTACO into Stabilus Group

SOLID FINANCING STRUCTURE…

… WITH NET LEVERAGE < 2.5X AT CLOSING AND FAST DELEVERAGING

Expected fast deleveraging (net debt / EBITDA)

Financing structure (in €m) Comprehensive financing concept

• › The purchase price of US\$680m for the acquisition of 100% shares in DESTACO, i.e., around €650m at 1.05 US\$/€ fx rate, will be financed with:
  • › c. €150m cash,
  • › €250m utilization of the currently unused revolving credit facility (RCF) of €350m and
  • › €250m new bridge facility.
• › Net leverage ratio at closing below 2.5x (net debt / EBITDA), to be reduced below 2.0x until September 2026, due to strong cash generating ability of the Group

SUCCESSFUL M&A TRACK RECORD SINCE IPO IN 2014

PROVEN ABILITY TO EXECUTE VALUE ACCRETIVE ACQUISITIONS

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Key facts		Strong rationale for transformational transaction
› 1	for Purchase price of US\$680m 100% of the share capital	Transaction summary	› ›	Acquisition of DESTACO creates a strong player in Industrial Automation Continuing our path to become the global leader in intelligent motion control technologies
› 2	EV implies c.13x 2024E EV/EBIT pre synergies, c. 12x 2024E EV/EBIT after synergies In FY2022 DESTACO's revenue was at US\$213m with an EBIT margin of 20% For FY2028 revenue of c. US\$360m	Attractive growth market	› ›	Increasing the share of our Industrial business, particularly expanding our Industrial Machinery & Automation subsegment Highly attractive high-growth market for industrial motion control
› 3 ›		Transaction financing	› ›	Exclusively negotiated all-cash deal Transaction will be financed with c. €150m cash, 250m revolving credit facility
4 › 5	with an EBIT margin of c. 23% targeted (after synergies) Significant positive impact on	Complementary footprint	› ›	and a €250m new bridge facility Complementary market positions and client base Strong global manufacturing footprint allowing close client coverage and potential to efficiently leverage network effects
	Group's sales and margin; attractive value creation potential in the mid to long-term	Strong financial profile & value creation	› ›	Strong financial track record of growth and margins Conservative top-line and bottom-line synergies from leveraging complementary setup

Q&A SESSION

MOTION CONTROL

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