Novem Group S.A.

Investor Presentation • Feb 16, 2023

16 February 2023

Q3 2022/23 Results

• In Q3 2022/23, Novem posted solid revenue growth of +4.4% y/y under continued challenging trading conditions
• Top line was affected by Covid-19 disruptions in China and extended customer plant holidays in Europe
• Adj. EBIT margin of 11.4% for Q3 remained stable sequentially (YTD Adj. EBIT margin 11.5%)
• High quality of business model and resilience of earnings despite several headwinds (inflation, volatile call-offs)
• Moreover, significant free cash flow of €24.6m generated largely driven by Tooling cash in-flow
• Commitment to sustainability reinforced through second reforestation program with 4,500 trees in Germany
• Discussions with OEMs on the compensation for increased input costs to be continued in 2023
• Strategically, Novem entered into a technology partnership with Finnish based company for in-mould electronics

Strong sequential financial performance in volatile environment

YTD 2022/23 financial highlights

2 GROUP RESULTS

Page 6

Revenue

• Total revenue of €166.9m in Q3 2022/23 showed a solid increase of +4.4% in comparison to last year
• As previously, top line benefitted from favourable FX effects; total revenue would have been lower by -4.0% at constant FX rates
• Revenue Series of €147.4m grew only marginally by +1.2% y/y and was impacted by a weak December 2022
• Latest available LMC figures reported moderate growth in LVP of +4.0% y/y for the relevant period
• Revenue Tooling of €19.6m was well above PY (+36.6%) driven by major projects (e.g. BMW X8, Mercedes-Benz C-class)
• LTM total revenue of €685.5m rose over the preceding reporting period and is approaching the €700m mark

Adj. EBIT

• In Q3 2022/23, Adj. EBIT of €19.0m recorded on a similar level as previous year
• Continued headwinds from higher material prices, energy costs and freight expenses
• Further compensation payments received from OEMs to mitigate the impact from inflation
• Profit margin of 11.4% showed a sequentially stable development since the beginning of the financial year 2022/23
• Like in the previous quarters, the high Tooling share within total revenue led to a certain dilution of the Adj. EBIT margin
• In a twelve-month view, Adj. EBIT of €82.8m slightly decreased in comparison to previous quarter (€84.2m)

Free cash flow

• Outstanding free cash flow of €24.6m for the quarter under review outperformed last year by €+15.6m
• Cash flow from operating activities (€28.5m) contributed the most to this result (€+10.6m vs. PY) due to the following reasons:
• Lower receivables (€+26.9m) and higher profit (€+11.4m); on the other hand, non-cash income (€-16.4m), reduced payables (€-11.1m) and Others (€-0.2m) partly offset the positive deviation
• Receivables came down because of significant Tooling payments in Q3 2022/23, while foreign exchange revaluation effects caused the variance in other non-cash expenses to a large extent
• Cash flow from investing activities was around half of prior year's figure at €-3.9m leading to a positive variance of €+5.0m
• Free cash flow for the last twelve months peaked at a record level of €90.1m and improved by €+15.6m q/q

Capital expenditure

• Capital expenditure of €4.7m in Q3 2022/23 remained almost flat compared to previous year (€4.5m)
• Based on total revenue of €166.9m, the underlying capex ratio of 2.8% was similar to last year
• Majority of investments comprised growth capex concerning new platforms to be launched
• Almost half of the total capex for the relevant period was invested in Langfang in China (€2.2m)
• Stable development of capital expenditure since the beginning of the financial year 2022/23
• On a last-twelve-month calculation, the capex ratio stood at 3.0% of LTM total revenue of €685.5m

Total working capital

LTM total working capital (€m)

• At the end of the quarter, total working capital stood at €137.1m and was -9.8% lower than last year
• Positive deviation of €+14.8m versus PY due to lower tooling net (€+14.0m), higher trade payables (€+5.2m) and lower trade receivables (€+1.9m); conversely, increased inventories (€-5.9m) and contract assets (€-0.3m)
• Higher inventories across all regions mainly attributable to safety stock requirements from OEMs to cushion potential supply chain disruptions should they arise
• As of 31 December 2022, total working capital measured in % of LTM revenue equalled 20.0% versus 23.8% last year
• Trade working capital, excluding tooling net and contract assets, also developed well and diminished from €61.8m to €60.6m
• Operationally, DIO rose to 43 days (40 PY), DPO improved to 53 days (48 PY) and DSO remained stable at 33 days (34 PY)

Capital structure

• As of 31 December 2022, gross financial debt recorded at prior year's level, while cash rose considerably
• Lease liabilities, by definition included in the gross financial debt, stood at €34.2m (€33.8m PY)
• Principal sources of funds comprised €132.4m cash (€73.9m PY) and €38.2m derived from non-recourse factoring (€42.0m PY)
• Net financial debt as of 31 December 2022 stood at €150.0m and implied a sharp decline over last year (€207.6m)
• Net leverage ratio of 1.3x (net financial debt / Adj. EBITDA) fell to the lowest level since the post-IPO refinancing
• Novem continued to successfully deleverage its balance sheet in a challenging market environment

Revenue by operating segments

• From a geographical perspective, revenue growth in Q3 2022/23 was exclusively driven by Americas (€+10.4m y/y), while Asia remained stable (€+0.3m y/y) and Europe decreased (€-3.7m y/y)
• Poor revenue in Europe was largely attributable to lower call-offs from several OEMs (e.g. BMW, Mercedes-Benz, Volvo) because of extended customer plant holidays in December 2022
• Revenue in Americas was driven by a favourable FX impact from the USD, strong demand for SUVs (in particular Audi Q5) as well as increased revenue Tooling
• Asia basically showed a flat development compared to the same quarter last year, as additional revenue from BMW X5 could offset lower demand for other programs, particularly in December 2022
• LTM revenue increased by €+7.0m q/q from €678.5m to €685.5m
• From a geographical standpoint, LTM revenue was distributed as follows: 49.4% Europe, 37.1% Americas and 13.5% Asia

Adj. EBIT by operating segments

• On a segmental basis, Adj. EBIT strongly improved in Americas, while Europe moved sideways and Asia contributed only half of prior year's result
• In Europe, Adj. EBIT of €10.2m (€11.6m PY) was again affected by inflation and inefficiencies due to volatile call-offs from OEMs, partly offset by customer compensation payments
• As for the last reporting period, Americas again showed a robust performance with Adj. EBIT of €7.1m (€5.5m PY) benefiting from buoyant sales and a positive product mix
• In Asia, Adj. EBIT of €1.8m (€3.4m PY) was negatively impacted by an unfavourable product mix and Covid-19 related disruptions in December 2022
• LTM Adj. EBIT in the amount of €82.8m came down from €84.2m in Q2 2022/23, leading to a profit margin of 12.1% over the course of the last twelve months

Profit and loss statement (€m)

	Q3 2021/22	Q3 2022/23	2021/22 YTD	2022/23 YTD
Revenue	159 9	166 9	455 2	526 2
Increase or decrease in finished goods and work in process	4 4	-0 8	16 5	-6 1
operating performance Total	164 3	166 2	471 8	520 1
Other operating income	2 1	4 9	11 6	14 4
Cost of materials	-82 9	-82 2	-236 0	-266 3
Personnel expenses	-38 5	-41 0	-117 6	-123 1
Depreciation , amortisation and impairment	-7 7	-8 1	-23 0	-24 2
Other operating expenses	-16 8	-20 6	-48 2	-60 4
Adj EBIT	20 4	19 0	58 6	60 5
Adjustments	-3 6	-0 6	-6 8	-1 1
Operating result (EBIT)	16 8	18 5	51 9	59 5
Finance income	0 6	9 9	2 4	2 4
Finance costs	-2 5	-2 9	-24 7	-13 5
Financial result	-1 9	1 7	-22 3	-11 0
Income taxes	-4 9	-6 0	-14 4	-13 8
Deferred taxes	-0 5	1 5	0 2	1 1
Income result tax	4 -5	-4 6	-14 2	-12 7
Profit for the period	9 6	21 0	15 4	35 8

Balance sheet

Balance sheet (€m)
	31 Dec 2021	31 Dec 2022		31 Dec 2021	31 Dec 2022
			Total equity	33 6	89 9
Intangible assets	3 2	2 4	Pensions and similiar obligations	36 5	35 4
Property , plant and equipment	181 5	179 6	Tax liabilities
Trade receivables	50 5	50 8	Other provisions	4 9	3 2
Other non-current assets	14 4	11 8	Financial liabilities	247 6	248 1
Deferred tax assets	8 2	20 3	Other liabilities	30 6	28 0
			Deferred liabilities tax	2 6	4 0
Total non-current assets	257 8	264 9	liabilities Total non-current	322 1	318 7
Inventories	117 0	122 3	Tax liabilities	16 0	19 8
Trade receivables	48 6	43 3	Other provisions	48 3	48 3
Other receivables	26 4	33 7	Financial liabilities	0 9	1 4
Other current assets	13 8	15 2	Trade payables	48 5	52 1
Cash and cash equivalents	73 9	132 4	Other liabilities	69 2	81 5
Assets held for sale	1 2
Total current assets	280 9	346 9	Total liabilities current	182 9	203 2
Assets	538 6	611 8	Equity and liabilities	538 6	611 8

Cash flow statement

Cash flow statement (€m)

	Q3 2021/22	Q3 2022/23	YTD 2021/22	YTD 2022/23
Profit for the period	9 6	21 0	15 4	35 8
expense (+)/income (-) Income tax	4 9	6 0	14 4	13 8
Financial result (+)/(-) net	0 9	2 1	20 7	4 2
Depreciation , amortisation and impairment	7 7	8 1	23 0	24 2
Other non-cash expenses (+)/income (-)	9 3	1 -7	0 5	-6 9
(-)/decrease (+) Increase in inventories	9 2	-3 4	-14 9	7 1
Increase (-)/decrease (+) in trade receivables	-18 3	8 6	3 3	-9 5
(-)/decrease (+) Increase in other assets	4 4	0 5	1 7	-1 6
Increase (-)/decrease (+) in deferred taxes	0 3	-1 5	-0 3	-1 1
(-)/decrease expenses/deferred Increase (+) in prepaid income	0 1	1 0	-1 0	0 9
Increase (+)/decrease (-) in provisions	1 3	2 2	6 0	6 5
(+)/decrease Increase (-) in trade payables	-3 4	-14 5	-13 4	-14 6
Increase (+)/decrease (-) in other liabilities	-1 8	8 9	-6 0	2 9
Gain (-)/loss (+) on disposals of non-current assets	-0 0	0 0	-0 0	0 1
Cash received from (+)/cash paid for (-) for income taxes	-6 5	-3 5	-13 2	-7 8
Cash flow from operating activities	17 8	28 5	36 1	53 9

Cash flow statement (€m)

	Q3 2021/22	Q3 2022/23	2021/22 YTD	2022/23 YTD
Cash (+) received from disposals of intangible assets	-0 1	0 0	-0 1	0 0
Cash received (+) from disposals of , plant and equipment property	0 9	0 0	0 8	0 8
Cash (-) paid for investments in intangible assets	0 1	-0 0	-0 2	-0 1
Cash paid (-) for investments in , plant and equipment property	-10 3	-4 7	-19 2	-12 2
(+) Interest received	0 6	0 8	2 4	2 4
Dividends received (+)			0 0
Cash flow from investing activities	-8 9	-3 9	-16 3	-9 0
Cash (-) loans/cash (+) of received from loans repayments	-3 3	-0 0	247 4	-0 0
Cash received from (+) shareholders of the parent company	0 2	0 0	49 4	0 0
Cash (-) of shareholders loans repayments	0 0	0 0	0 0	0 0
Cash (-) of bond/cash received from (+) issuance of bond repayments	0 0	0 0	-400 0	0 0
Cash (-) subsidies/grants paid for	-0 0	-0 0	-0 0	-0 0
Cash paid for (-) finance leases	-2 1	-2 5	-6 1	-6 9
(-) Interest paid	-1 2	-2 3	-12 1	-5 2
Dividends paid (-)	-0 0	-0 0	-0 0	-17 2
Cash flow from financing activities	-6 4	-4 8	-121 3	-29 4
(+)/decrease (-) Net increase in cash and cash equivalents	2 5	19 8	-101 4	15 6
Effect of exchange fluctuations on cash and cash equivalents rate		-0 8		-0 1
Cash and cash equivalents the beginning of the reporting period at	71 4	113 5	175 3	117 0
Cash and cash equivalents the end of the reporting period at	73 9	132 4	73 9	132 4

EBIT adjustments (€m)

	Q3 2021/22	Q3 2022/23	2021/22 YTD	2022/23 YTD
Revenue	159 9	166 9	455 3	526 2
EBIT	16 8	18 5	51 9	59 5
EBIT margin	10 5%	11 1%	11 4%	11 3%
Revenue	159 9	166 9	21 455	526 2
Restructuring
Material quality claims			-0 1
Single impairments	3 0		3 0
Covid-19 costs	0 7	0 1	1 1	0 3
Transaction costs			2 4
Others	-0 1	0 4	0 3	0 7
Exceptional items	3 6	0 6	6 8	1 1
Discontinued operations
Adjustments	3 6	0 6	6 8	1 1
EBIT	20 4	19 0	58 6	60 5
Adj EBIT	12 8%	11 4%	12 9%	11 5%
Adj margin

1) Including revenue-related adjustments

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
• 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

16 February 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