JOST Werke AG

Investor Presentation • Nov 21, 2019

Results 9M 2019

Joachim Dürr (CEO) Dr. Christian Terlinde (CFO)

JOST Werke AG – November 21, 2019

1. Highlights – 9M 2019

• 2. Market outlook
• 3. Detailed results review
• 4. Company outlook
• 5. Q&A

s e al S	+1.9% to €579m Markets slowed down in Q3; group sales in 9M up
	were down by -2.3% to €343m in 9M, despite strong decline of trailer JOST's sales in Europe markets
	continued with strong momentum +20.9% to €129m in 9M North America
	down -3.1% to €107m affected by very weak Indian market. JOST could Sales in APA increase prior year's sales in the other countries of the region despite overall declining markets
s g n ni r a E	+0.4% to €66m in 9M Adjusted EBIT
	in 9M nearly stable at 11.3% Adjusted EBIT margin
e c n a n Fi	Operating cash flow doubled to €56m due to significant improvements in working capital
	Net Working Capital as % of LTM sales down by 2.5pp to 19.5%
Outlook		JOST expects sales and earnings in 2019 to decline in a low-single-digit percentage range compared to 2018

Agenda

1. Highlights – 9M 2019

• 2. Market outlook
• 3. Detailed results review
• 4. Company outlook

5. Q&A

Truck and trailer market outlook for 2019

Note: Market estimates for heavy truck based on LMC, Clear Consulting and FTR (as of October 2019)

Agenda

1. Highlights – 9M 2019

• 2. Market outlook
• 3. Detailed results review
• 4. Company outlook

5. Q&A

• ❖ Continued high activity level in North America partially offset weakness of markets in Europe and India during Q3
• ❖ In 9M 2019 group sales up by +1.9%
• ❖ Adj. EBIT developed mostly in line with sales, with Q3 adj. EBIT down by 6.6% and margin stable at 10.7%
• ❖ In 9M adj. EBIT grew by 0.4% with margin reaching 11.3%
• ❖ Good operating performance in North America partially offset cost pressure from increasing wages in other regions

¹ Reported sales figures do not include sales of Brazil JV

• ❖ Typical Q3 seasonality in Europe was stronger than in prior years, but sales remained on a high level with Q3 19 being the second strongest JOST's Q3 in the region.
• ❖ Market impact: Trailer production in Europe declined further and truck production was weaker compared to strong prior year. Sales to specialty trailers remained stable
• ❖ Adj. EBIT and adj. EBIT margin below prior year mostly due to:
  • lower sales volume
  • rising personnel costs
• ❖ Focus for the remainder of 2019 and the following year are:
  • further increase of efficiency across all processes
  • increasing automation in the production area

• ❖ JOST continued its growth in North America, with sales up by +20.9% in 9M and +6.8% in Q3
• ❖ Reported sales grew stronger than organic sales due to FX-tailwinds of 4.7% in Q3 and 7.1% in 9M
• ❖ Market impact: JOST continued to profit from strong demand, strengthening its market position
• ❖ Adj. EBIT up by +24.6% in 9M with adj. EBIT margin increasing to 9.4%
• ❖ Adj. EBIT margin in Q3 reached the double-digit range at 10.0% for the 2nd consecutive quarter.
• ❖ Margin improvement supported by strong sales growth and good operating performance

APA – Ongoing weakness in India affects APA results

• ❖ Sales in APA were down by 17% in Q3, mostly due to strong decline of truck and trailer demand in India
• ❖ In 9M sales only down by 3.1% due to good performance of JOST in China and other APA countries
• ❖ Market impact: In Q3 JOST was able to keep sales on prior year's level in most APA countries, but this was not enough to compensate the strong decline in India.
• ❖ Adj. EBIT down mostly in line with sales development with margins reaching 14.2% in 9M.
• ❖ Margins in Q3 improved to 14.6% despite declining sales. JOST was able to use its flexibility to scale down production levels in India and cut costs quickly, reducing negative impact for the region

Adjusted net income and adjusted EPS increased in 9M 2019

• ❖ Adjustments to EBIT mainly from amortization of PPA (non-operating)
• ❖ Although EBT grew by 12.9% to €41.2 m (9M 2018: €36.5m), reported net earnings declined to €34.4m (9M 2018: €43.3m) due to a positive one-off tax effect in the previous year amounting to €14.8m. Accordingly EPS in 9M 2019 amounted to €2.31 (9M 2018: €2.91).
• ❖ Adjusted net income grew by 3.1% to €42.7m (9M 2018: €41.5m). Adjusted EPS grew to €2.87 (9M 2018: €2.78).

¹ Cash flow defined as adjusted EBITDA – capex; cash conversion defined as (adjusted EBITDA – capex)/adjusted EBITDA

² Capex calculated as payments to acquire property, plant and equipment as well as intangible assets

❖ Cash conversion rate rose as a result of higher operating earnings and better working capital management

Key highlights

• ❖ Capex in 9M 2019 lower than in prior year due to different phasing of investments
• ❖ Higher portion of investment should take place in Q4, with FY capex expected to be ~2.5% of sales
• ❖ Working capital improved primarily due to lower trade receivables and higher trade payables
• ❖ NWC as % of sales improved to 19.5%
• ❖ By year end NWC is expected to improve further and fall below prior year's level (2018: 18.5%) – previously JOST was expecting NWC to be at ~20%

Key highlights

• ❖ ROCE only slightly down to 19.2% despite increase of other financial liabilities following the first-time adoption of IFRS 16
• ❖ Equity ratio increased compared to year end, despite negative impact from the first-time adoption of IFRS 16, which resulted in an increase of short- and long-term financial liabilities, and dividend payments of €16.4m.

❖ Leverage improved to 0.57x

• ❖ Liquid assets grew by €25.5m reaching €91.6m
• ❖ Net debt was further reduced to €59.6m because of the strong increase in liquid assets

¹ ROCE=LTM adj. EBIT / interest-bearing capital employed (interest-bearing capital: equity + financial liabilities (excl. refinancing costs) – liquid assets + provisions for pensions) ² Net debt = Interest-bearing capital (excl. refinancing costs) – liquid assets

³ Leverage = Net debt/LTM adj. EBITDA [LTM EBITDA 9M 2019= €104m; EBITDA FY 2018 = €100m]

Agenda

1. Highlights – 9M 2019

• 2. Market outlook
• 3. Detailed results review
• 4. Company outlook
• 5. Q&A

Outlook for FY 2019

	FY 2018	Outlook 2019 (old)1	Outlook 2019 (new)
Sales	755	Low-single-digit % growth	Low-single-digit % decline
Adjusted EBITDA	100	Low-single-digit % growth	Low-single-digit % decline
Adjusted EBIT	81	Low-single-digit % growth	Low-single-digit % decline
Adjusted EBIT margin	10.7%	Stable	~ Stable
Capex2 (in % of sales)	20 (2.6%)	~2.5% of sales	~2.5% of sales
Net working capital (in % of sales)	140 (18.5%)	<20%	<18.5%
Leverage3	0.85x	<0.85x	~0.5x

¹ The previous outlook was based on the assumption of a stable macroeconomic and political environment in 2019

² Capex calculated as payments to acquire property, plant and equipment as well as intangible assets, excluding potential acquisitions

³ Excluding potential acquisitions

Agenda

1. Highlights – 9M 2019

• 2. Market outlook
• 3. Detailed results review
• 4. Company outlook

5. Q&A

Development of JOST's sales and adjusted EBIT by quarter

Shareholder structure

Shareholder structure as of November 15, 2019

• Allianz Global Investors
• Atlantic Value
• Morgan Stanley
• Paradice Investment Management
• Virtus Investment Partners
• FMR LLC
• Management Board

Other

¹ According to German stock exchange definition 100% of shares qualify as free float

Key figures – 9M 2019 and Q3 2019

(€ m)	9M 2019	9M 2018	yoy	Q3 2019	Q3 2018	yoy
Sales Europe	343.0	351.0	-2.3 %	102.6	108.2	-5.1%
Sales North America	129.3	106.9	20.9 %	43.3	40.6	6.8%
Sales APA	106.8	110.2	-3.1 %	31.9	38.3	-16.6%
Sales JOST Werke Group	579.1	568.1	1.9 %	177.8	187.0	-4.9%
EBITDA1 Adjusted	83.2	78.8	5.6 %	24.9	24.8	0.2%
Adjusted EBITDA margin	14.4 %	13.9%	0.5 pp	14.0 %	13.3 %	0.7 pp
EBIT1 Adjusted	65.5	65.3	0.4 %	19.0	20.3	-6.6 %
Adjusted EBIT margin	11.3 %	11.5 %	-0.2 pp	10.7 %	10.8 %	-0.1 pp
Adjusted net income1	42.7	41.5	3.1 %	12.8	12.6	1.5 %
Adjusted EPS (€)	2.87	2.78	3.2 %	0.86	0.85	1.2 %
Capex	11.1	14.2	-22.0 %	4.1	5.0	-18.1 %
Capex (% of sales)	1.9 %	2.5 %	-0.6 pp	2.3 %	2.7 %	-0.4 pp
ROCE2	19.2 %	18.9 %	0.3 pp
rate3 Cash conversion	86.7 %	82.0 %	4.7 pp	83.5%	79.8%	3.7 pp
ratio4 Leverage	0.57x	1.16x	-50.4 %

¹Adjusted for PPA effects and exceptionals

²LTM adj. EBIT/ interest-bearing capital employed; interest-bearing capital: shareholders' equity + financial liabilities excl. refinancing costs – liquid assets + provisions for pensions

³(Adj. EBITDA – Capex) / adj. EBITDA

4 Net debt / LTM adj. EBITDA

Reconciliation of earnings

(€m)	9M 2019 reported	Other Effects	PPA	Total adjustments	9M 2019 adjusted
Sales revenues	579.1				579.0
Cost of sale	-428.4	0.2		0.2	-428.2
Gross profit	150.7	0.2		0.2	150.9
Selling expenses	-66.8	0.2	18.8	19.0	-47.8
R&D expenses	-10.3				-10.3
Administrative expenses	-31.3	0.6		0.6	-30.7
Other income / -expenses	0.6	0.1		0.1	0.7
Share of JV profit	2.7				2.7
Operating profit (EBIT)	45.6	1.1	18.8	19.9	65.5
Net finance result	-4.5				-4.5
Profit / loss before tax	41.1	0	18.8	19.9	61.0
Income taxes	-6.7				-18.3
Profit / loss after taxes	34.4				42.7
Number of shares	14,900,000				14,900,000
EPS (in €)	2.31				2.87

Further information

Financial Calendar 2019

Nov. 21 Publication of 9M 2019 Report

Nov. 22 Road show London, UK

Jan. 10	ODDO BHF Forum 2020, Lyon/France
Jan. 13-15	Commerzbank German Investment Seminar 2020, New York/U.S.
Jan. 21	UniCredit & Kepler Cheuvreux, 19. German Corporate Conference, Frankfurt/Germany
Feb. 18	Preliminary Results FY 2019
Mar. 25	Publication of Annual Group Report FY 2019
May 7	Annual General Meeting 2020
May 14	Publication of Q1 2020 Report
Aug. 13	Publication of H1 2020 Report
Nov. 12	Publication of 9M 2020 Report

IR Contact

Romy Acosta Senior Manager Investor Relations

romy.acosta@jost-world.com Phone: +49-6102-295 379 Financial Calendar 2020 Fax: +49-6102-295 661

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