Stabilus SE — Earnings Release 2022

Nov 11, 2022

FY2022 PRELIMINARY RESULTS

NOVEMBER 11, 2022

¹ MOTION CONTROL

The figures in this document are preliminary and have neither been approved by the Supervisory Board nor audited by the external auditor.

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.

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, numbers presented may not add up precisely to the totals provided.

AGENDA

OPERATIONAL UPDATE

FINANCIAL RESULTS

RESULTS BY OPERATING SEGMENT

OUTLOOK

5 APPENDIX

OPERATIONAL UPDATE

OPERATIONAL UPDATE FY2022 PRELIMINARY RESULTS

Key highlights in FY2022

• › Record revenue of €320m in Q4 FY22 (+40% y/y) as well as of €1,116m in FY2022 (+ 19% y/y) achieved: €1bn revenue threshold surpassed for the first time in FY2022
• › Strong business in APAC and Americas – organically and supported by favorable fx translation effects:
• › APAC's revenue up by 73% y/y (60% y/y organically) in FY2022, with triple-digit revenue growth of 168% y/y (148% y/y organically) in APAC's Automotive Powerise division
• › Americas' revenue up by 20% y/y (9% y/y organically) in FY2022
• › Organic growth rate of 34% in Automotive Powerise in FY2022 reflects high end customer demand for automated tailgates
• › Uncertainty for new fiscal year remains high due to cost inflation on material and energy, Ukraine war and supply chain issues

FINANCIAL RESULTS

Revenue	› Record revenue at €1,116.3m (vs. €937.7m in FY2021), + €178.6m or + 19.0% y/y, exceeding the guidance of €1,070m › Acquisition effect: 0% y/y, currency translation effect: 4.8% y/y, organic growth: 14.2% y/y (incl. impacts on pricing)
Adj. EBIT	› Adj. EBIT at €156.2m (vs. €135.0m in FY2021), + 15.7% y/y › Adj. EBIT margin at 14.0% (vs. 14.4% in FY2021) , meeting the guidance of 14.0%
Profit	› Profit at €104.3m (vs. €73.8m in FY2021), + 41.3% y/y › Profit margin at 9.3% (vs. 7.9% in FY2021)
Adj. FCF	› Adj. FCF (i.e., FCF before acquisitions) at €81.7m (vs. €88.6m in FY2021), - 7.8% y/y, essentially due to higher net working capital as of Sept 2022
Net leverage ratio	› Net leverage ratio at 0.4x (vs. 0.6x as of end FY2021) › Net financial debt at €88.4m (vs. €107.0m as of end FY2021)
Outlook	› FY2023 forecast: revenue of €1.1bn - €1.2bn with an adjusted EBIT margin of 13% - 14%

KEY FIGURES

Q4 FY2022 PRELIMINARY RESULTS

KEY FIGURES

FY2022 PRELIMINARY RESULTS

RESULTS BY OPERATING SEGMENT

10

FY2022 PRELIMINARY RESULTS

Revenue (€m) Comments

Adj. EBIT (€m)

• › Light vehicle production (LVP) in Europe, Middle East and Africa in FY2022 at 17.8m units, - 7.0% vs. FY2021
• › EMEA's revenue up by €5.4m or 1.2% y/y to €469.4m in FY2022, organically + 2.8% y/y (incl. impacts on pricing)
• › Automotive Gas Spring revenue 6.3% y/y and Automotive Powerise + 3.7% y/y organically; Automotive Powerise growth was supported by higher production of Powerise units for, e.g., BMW: 4-series, 5-series, iX (EV); Geely XC40 Coupé; Hyundai Kia Sportage; Mercedes-Benz EQS (EV); Tesla Model Y (EV); VW Group: Audi A6, e-tron (EV), Porsche: Macan, Taycan (EV), Cayenne Coupé; VW: Arteon, Passat, Transporter, T7
• › Industrial revenue increased by €10.5m or 4.2%y/y, organic growth at 6.9% y/y, driven by improvements in all industrial market segments, partially offset by soft business in Health, Recreation & Furniture (HRF)
• › Adj. EBIT margin decreased by 2.7pp to 11.7% in FY2022, as a result of material and energy cost inflation, and phasing of increases in sales prices

AMERICAS

FY2022 PRELIMINARY RESULTS

Revenue (€m) Comments

Adj. EBIT (€m)

• › Light vehicle production (LVP) in Americas in FY2022 at 16.9m units, + 3.8% vs. FY2021
• › Americas' revenue up by €64.0m or 19.8% y/y, currency translation effect at 10.5%, organic growth at 9.3% y/y (incl. impacts on pricing)
• › Automotive Gas Spring revenue up by 5.4% y/y and Automotive Powerise revenue up by 10.9% y/y organically; Automotive Powerise growth was driven by higher production of Powerise units for, e.g., BMW X6, FCA: Chrysler Pacifica, Jeep Grand Cherokee, Ford: F-150, Lincoln Aviator, Explorer; GM: Chevrolet Equinox, Cadillac XT4, Hyundai Kia Sorento; Lucid Air (EV); Rivian R1T (EV); Tesla: Model S, 3, X, Y (EVs)
• › Industrial revenue increased by €23.5m or 21.2% y/y, organic growth at + 10.7%y/y, as a result of strong growth in all industrial market segments
• › Adj. EBIT margin slightly (10bp) below the prior-year level of 13.5%

FY2022 PRELIMINARY RESULTS

REVENUE BY BUSINESS UNIT

FY2022 PRELIMINARY RESULTS

INDUSTRIAL REVENUE BY MARKET SEGMENT

FY2022 PRELIMINARY RESULTS

Distributors, Independent Aftermarket, E-commerce (DIAMEC) Mobility (M) Healthcare, Recreation & Furniture (HRF)

Energy, Construction, Industrial Machinery & Automation (ECIMA)

• › Industrial revenue at €415.8m, up by €38.8m or 10.3% y/y
• › The growth in industrial business was primarily driven by market segments Energy, Construction, Industrial Machinery & Automation (ECIMA), Distributors, Independent Aftermarket, Ecommerce (DIAMEC) and Mobility, partly offset by soft business development in Healthcare, Recreation & Furniture (HRF)
• › As a result, the revenue share of ECIMA has increased from 17% of total industrial revenue in FY2021 to 19% in FY2022, and the revenue share of HRF has decreased from 19% to 15%, respectively

OUTLOOK

Guidance			Comments
	FY2022 Prelim	FY2023 Guidance
Revenue	€1,116.3m	€1.1bn - €1.2bn
Adj. EBIT margin	14.0%	13% - 14%

• › Global light vehicle production (LVP) expected to grow by c. 4% y/y in FY2023 (Oct 2022 - Sept 2023): 84.6m in FY2023 vs. 81.4m in FY2022 (IHS Markit, October 2022)
• › The wider range of revenue and margin expectations reflects the higher uncertainty, as a result of the current macroeconomic and geopolitical situation (COVID-19 lockdown risks in China, material and personnel cost inflation, risks of political unrests etc.)
• › Based on our strategic pyramid, we continue to pursue our longterm strategy, focusing on profitable and sustainable growth, customer and employee satisfaction, innovation and sustainability

APPENDIX

REVENUE AND ADJUSTED EBIT MARGIN BY QUARTER

INCLUDING Q4 FY22 PRELIMINARY RESULTS

19

REVENUE OVERVIEW

THREE MONTHS ENDED SEPTEMBER 30, 2022: PRELIMINARY RESULTS

Revenue (€m)

	Q4 FY2021 Actual	Q4 FY2022 Prelim	Change	% change	Acquisition effect	Currency effect	Organic growth
Automotive Gas Spring	24.9	28.6	3.7	14.9%	-	0.0%	14.9%
Automotive Powerise	19.9	26.4	6.5	32.7%	-	0.3%	32.4%
Industrial	61.0	65.7	4.7	7.7%	-	(6.0)%	13.7%
EMEA	105.8	120.7	14.9	14.1%	-	(3.4)%	17.5%
Automotive Gas Spring	21.9	32.0	10.1	46.1%	-	18.9%	27.2%
Automotive Powerise	27.6	44.9	17.3	62.7%	-	20.0%	42.7%
Industrial	29.9	40.5	10.6	35.5%	-	16.6%	18.9%
AMERICAS	79.4	117.4	38.0	47.9%	-	18.4%	29.5%
Automotive Gas Spring	20.6	29.9	9.3	45.1%	-	11.3%	33.8%
Automotive Powerise	19.3	46.2	26.9	139.4%	-	19.3%	120.1%
Industrial	4.5	6.1	1.6	35.6%	-	9.6%	26.0%
APAC	44.5	82.2	37.7	84.7%	-	14.6%	70.1%
Total Automotive Gas Spring (AGS)	67.4	90.5	23.1	34.3%	-	9.6%	24.7%
Total Automotive Powerise (APR)	66.8	117.5	50.7	75.9%	-	13.9%	62.0%
Total Industrial (IND)	95.4	112.3	16.9	17.7%	-	1.8%	15.9%
Total	229.6	320.3	90.7	39.5%	-	7.6%	31.9%

REVENUE OVERVIEW

YEAR ENDED SEPTEMBER 30, 2022: PRELIMINARY RESULTS

Revenue (€m)

	FY2021 Actual	FY2022 Prelim	Change	% change	Acquisition effect	Currency effect	Organic growth
Automotive Gas Spring	123.0	115.2	(7.8)	(6.3)%	-	0.0%	(6.3)%
Automotive Powerise	93.1	95.8	2.7	2.9%	-	(0.8)%	3.7%
Industrial	247.9	258.4	10.5	4.2%	-	(2.7)%	6.9%
EMEA	464.0	469.4	5.4	1.2%	-	(1.6)%	2.8%
Automotive Gas Spring	91.9	106.5	14.6	15.9%	-	10.5%	5.4%
Automotive Powerise	121.0	146.8	25.8	21.3%	-	10.4%	10.9%
Industrial	110.6	134.1	23.5	21.2%	-	10.5%	10.7%
AMERICAS	323.5	387.5	64.0	19.8%	-	10.5%	9.3%
Automotive Gas Spring	82.5	104.2	21.7	26.3%	-	9.0%	17.3%
Automotive Powerise	49.2	132.0	82.8	168.3%	-	20.3%	148.0%
Industrial	18.5	23.2	4.7	25.4%	-	8.2%	17.2%
APAC	150.2	259.4	109.2	72.7%	-	12.6%	60.1%
Total Automotive Gas Spring (AGS)	297.4	326.0	28.6	9.6%	-	5.7%	3.9%
Total Automotive Powerise (APR)	263.3	374.6	111.3	42.3%	-	8.3%	34.0%
Total Industrial (IND)	377.0	415.8	38.8	10.3%	-	1.7%	8.6%
Total	937.7	1,116.3	178.6	19.0%	-	4.8%	14.2%

P&L OVERVIEW

THREE MONTHS ENDED SEPTEMBER 30, 2022: PRELIMINARY RESULTS

P&L (€m)

	Q4 FY2021 Actual	Q4 FY2022 Prelim	Change	% change
Revenue	229.6	320.3	90.7	39.5%
Cost of sales	(160.9)	(230.9)	(70.0)	43.5%
Gross Profit	68.7	89.4	20.7	30.1%
% margin	29.9%	27.9%
R&D expenses	(11.2)	(11.3)	(0.1)	0.9%
Selling expenses	(20.5)	(23.7)	(3.2)	15.6%
Administrative expenses	(7.9)	(8.5)	(0.6)	7.6%
Other income/expenses	1.4	0.3	(1.1)	(78.6)%
EBIT	30.5	46.2	15.7	51.5%
% margin	13.3%	14.4%
Finance income/costs	(1.8)	1.5	3.3	<(100.0)%
EBT	28.7	47.7	19.0	66.2%
% margin	12.5%	14.9%
Income tax	(11.1)	(11.8)	(0.7)	6.3%
Profit	17.7	35.9	18.2	>100.0%
% margin	7.7%	11.2%
EPS in €	0.70	1.43	0.73	>100.0%

• › Record revenue in Q4 FY22: €320.3m in Q4 FY22 vs. €229.6m in Q4 FY21, + 39.5% y/y
• › Gross profit margin 2pp lower y/y, as a consequence of material and energy cost inflation, and phasing of increases in sales prices
• › Net finance costs down by €3.3m y/y, resulting in income of €1.5m in Q4 FY22, mainly due to €4.9m net fx gain in Q4 FY22 vs. €2.1m net fx loss in Q4 FY21

P&L OVERVIEW

YEAR ENDED SEPTEMBER 30, 2022: PRELIMINARY RESULTS

P&L (€m)

	FY2021 Actual	FY2022 Prelim	Change	% change
Revenue	937.7	1,116.3	178.6	19.0%
Cost of sales	(657.4)	(805.1)	(147.7)	22.5%
Gross Profit	280.3	311.2	30.9	11.0%
% margin	29.9%	27.9%
R&D expenses	(42.8)	(46.2)	(3.4)	7.9%
Selling expenses	(81.7)	(87.0)	(5.3)	6.5%
Administrative expenses	(38.4)	(39.6)	(1.2)	3.1%
Other income/expenses	3.9	3.8	(0.1)	(2.6)%
EBIT	121.3	142.2	20.9	17.2%
% margin	12.9%	12.7%
Finance income/costs	(13.3)	1.0	14.3	<(100.0)%
EBT	108.0	143.3	35.3	32.7%
% margin	11.5%	12.8%
Income tax	(34.3)	(38.9)	(4.6)	13.4%
Profit	73.8	104.3	30.5	41.3%
% margin	7.9%	9.3%
EPS in €	2.97	4.17	1.20	40.4%

• › Record revenue in FY2022: €1,116.3m in FY2022 vs. €937.7m in FY2021, + 19.0% y/y
• › Gross profit margin 2pp lower y/y, as a consequence of material price inflation and phasing of increases in sales prices
• › R&D expenses up by €3.4m or 7.9% y/y, reflecting group's increased focus on innovation (cf. Stabilus long-term strategy); capitalized R&D cost at €16.7m in FY2022 (vs. €16.1m in FY2021)
• › Other income/expenses in FY2022 include €0.1m income from the equity-accounted investment in Cultraro
• › Net finance costs down by €14.3m y/y, resulting in income of €1.0m in FY2022, primarily due to the €12.9m net fx gain in FY2022 vs. €0.8m net fx loss in FY2021
• › Income tax expense up by €4.6m as a result of higher EBT in FY2022

EBIT ADJUSTMENTS

THREE AND TWELVE MONTHS ENDED SEPTEMBER 30, 2022: PRELIMINARY RESULTS

Adjusted EBIT (€m)

	Q4 FY2021 Actual	Q4 FY2022 Prelim	Change	% change
EBIT	30.5	46.2	15.7	51.5%
PPA adj. - D&A (2010 PPA)	1.2	1.2	-	0.0%
PPA adj. - D&A (2016 PPA)	2.0	2.1	0.1	5.0%
PPA adj. - D&A (2019 PPA)	0.2	0.2	-	0.0%
Total adjustments	3.3	3.6	0.3	9.1%
Adjusted EBIT	33.8	49.7	15.9	47.0%
% margin	14.7%	15.5%

FY2021 Actual	FY2022 Prelim	Change	% change
121.3	142.2	20.9	17.2%
4.7	4.7	-	0.0%
8.2	8.5	0.3	3.7%
0.9	0.8	(0.1)	(11.1)%
13.8	14.0	0.2	1.4%
135.0	156.2	21.2	15.7%
14.4%	14.0%

Comments

› PPA adjustments comprise depreciation and amortization of step-ups and intangible assets acquired during 2010, 2016 and 2019 acquisitions

SEPTEMBER 30, 2022: PRELIMINARY RESULTS

Balance sheet (€m)
--------------------	--	--	--	--

	Sept 2021 Actual	Sept 2022 Prelim	Change	% change
Property, plant and equipm.	223.1	228.9	5.8	2.6%
Goodwill	208.1	216.8	8.7	4.2%
Other intangible assets	222.6	216.9	(5.7)	(2.6)%
Other investments	-	23.1	23.1	n/a
Inventories	136.9	167.5	30.6	22.4%
Trade receivables	136.7	197.7	61.0	44.6%
Other assets	46.0	47.3	1.3	2.8%
Cash	193.2	168.4	(24.8)	(12.8)%
Total assets	1,166.6	1,266.6	100.0	8.6%
Equity incl. minorities	544.3	669.7	125.4	23.0%
Debt (incl. accrued interest)	294.8	256.8	(38.0)	(12.9)%
Pension plans	54.7	37.2	(17.5)	(32.0)%
Deferred tax liabilities	47.7	54.4	6.7	14.0%
Trade payables	90.4	114.1	23.7	26.2%
Other liabilities	134.7	134.4	(0.3)	(0.2)%
Total equity and liabilities	1,166.6	1,266.6	100.0	8.6%
Net leverage ratio	0.6x	0.4x

• › Other investments comprise Company's interest in Synapticon (12% of total shares at the time of acquisition) and Cultraro (32% of total shares) which were acquired in FY2022
• › Inventories up by €30.6m primarily due to higher stock of raw materials and supplies (+ €18.4m y/y), merchandise (+ €8.8m y/y), work in progress (+ €2.5m) and finished goods (+ €0.8m) – larger buffers as mitigation of supply chain risks and short-notice customer call-off changes; DIO down from 53.7 days as of Sept 2021 to 47.1 days as of Sept 2022
• › Changes in cash and debt reflect issuance of €55m promissory note in Q2 FY22 and redemption of senior facilities by €95m in Q3 FY22 (refinancing of senior loans); the new €450m facilities agreement, signed in June 2022, comprises a €100m syndicated term loan facility and a €350m syndicated revolving credit facility (unutilized as of Sept 2022), with variable interest rates between 50bp and 150bp above Euribor, depending on the Company's leverage ratio, and a term of 5 years (with an extension option by 2 additional years)
• › Pension liabilities down by €17.5m due to higher discount rate (4.11% as of end Sept 2022 vs. 1.31% as of end Sept 2021)

CASH FLOW OVERVIEW

THREE MONTHS ENDED SEPTEMBER 30, 2022: PRELIMINARY RESULTS

Cash Flow Statement (€m)

	Q4 FY2021 Actual	Q4 FY2022 Prelim	Change	% change
Cash flow from operating activities	19.2	50.6	31.4	>100.0%
Cash flow from investing activities	(11.6)	(13.6)	(2.0)	17.2%
Cash flow from financing activities	(54.1)	(7.1)	47.0	(86.9)%
Net increase / (decrease) in cash	(46.4)	29.9	76.3	<(100.0)%
Effect of movements in exchange rates	1.2	3.5	2.3	>100.0%
Cash as of beginning of the period	238.4	135.0	(103.4)	(43.4)%
Cash as of end of the period	193.2	168.4	(24.8)	(12.8)%

Adj. FCF (€m)

	Q4 FY2021 Actual	Q4 FY2022 Prelim	Change	% change
Cash flow from operating activities	19.2	50.6	31.4	>100.0%
Cash flow from investing activities	(11.6)	(13.6)	(2.0)	17.2%
Free cash flow	7.6	37.0	29.4	>100.0%
Adjustments	-	0.3	0.3	n/a
Adj. FCF	7.6	37.3	29.7	>100.0%

• › Cash inflow from operating activities increased significantly (€50.6m in Q4 FY22 vs. €19.2m in Q4 FY21), primarily due to higher revenue and earnings in Q4 FY22
• › Cash outflow for investing activities up by €2.0m y/y mainly due to higher capex; capex in Q4 FY22 at €14.1m (vs. €11.1m in Q4 FY21), + 27.0% y/y
• › Cash outflow for financing activities down by €47.0m y/y primarily due to the refinancing of senior loans in FY2022 (receipt of €100m new syndicated term loan facility in Q4 FY22, partly offset by redemptions)
• › As a consequence of significantly higher cash inflow from operating activities and only slightly higher cash outflow for investing activities (capex), adj. FCF up by €29.7m y/y: €37.3m in Q4 FY22 vs. €7.6m in Q4 FY21

CASH FLOW OVERVIEW

YEAR ENDED SEPTEMBER 30, 2022: PRELIMINARY RESULTS

Cash Flow Statement (€m)

	FY2021 Actual	FY2022 Prelim	Change	% change
Cash flow from operating activities	129.0	125.7	(3.3)	(2.6)%
Cash flow from investing activities	(40.4)	(67.5)	(27.1)	67.1%
Cash flow from financing activities	(60.5)	(91.6)	(31.1)	51.4%
Net increase / (decrease) in cash	28.2	(33.4)	(61.6)	<(100.0)%
Effect of movements in exchange rates	2.6	8.6	6.0	>100.0%
Cash as of beginning of the period	162.4	193.2	30.8	19.0%
Cash as of end of the period	193.2	168.4	(24.8)	(12.8)%

Adj. FCF (€m)

	FY2021 Actual	FY2022 Prelim	Change	% change
Cash flow from operating activities	129.0	125.7	(3.3)	(2.6)%
Cash flow from investing activities	(40.4)	(67.5)	(27.1)	67.1%
Free cash flow	88.6	58.2	(30.4)	(34.3)%
Adjustments	-	23.5	23.5	n/a
Adj. FCF	88.6	81.7	(6.9)	(7.8)%

• › Cash inflow from operating activities down by €3.3m essentially due to higher net working capital
• › Cash outflow for investing activities up by €27.1m y/y mainly due to the €23.2m payment for the acquisition of shares in Synapticon and Cultraro in H1 FY22 (PY: €0m): €17.2m for Cultraro shares and €6.0m for Synapticon shares; capex in FY2022 at €45.1m (vs. €40.6m in FY2021), + 11.1% y/y
• › Cash outflow for financing activities up by €31.1m y/y primarily due to lower funds from issued promissory notes by €40m (€55m note issued in FY2022 vs. €95m note in FY2021), higher dividend payment by €18.5m, partly offset by lower redemption of credit facilities by around €30m (redemption of revolver in FY2021 vs. no utilization/redemption of revolver in FY2022)
• › As a result of lower cash inflow from operating activities and higher cash outflow for investing activities, the adj. FCF (i.e., FCF before acquisitions) amounted to €81.7m in FY2022 vs. €88.6m in FY2021; €23.5m adjustment relates to afore-mentioned payment for acquisition of shares in Synapticon and Cultraro (€23.2m) and payment according to the earn-out clause for Clevers (€0.3m)

CURRENCY EXCHANGE RATES YEAR ENDED SEPTEMBER 30, 2022

Closing and average currency exchange rates

1 EURO in	ISO code	Closing rate Sept 2021	Closing rate Sept 2022	Average rate FY2021	Average rate FY2022	Average rate % change
Australian dollar	AUD	1.6095	1.5076	1.5905	1.5211	(4.4)%
Argentine peso	ARS	114.3838	144.3958	107.4239	124.0207	15.4%
Brazilian real	BRL	6.2631	5.2584	6.3953	5.6964	(10.9)%
Chinese yuan (renminbi)	CNY	7.4847	6.9368	7.7803	7.0943	(8.8)%
South Korean won	KRW	1,371.5800	1,400.6900	1,348.7593	1,350.0014	0.1%
Mexican peso	MXN	23.7439	19.6393	24.1861	22.1137	(8.6)%
Romanian leu	RON	4.9475	4.9490	4.9016	4.9387	0.8%
Turkish lira	TRY	10.2981	18.0841	9.6238	15.8271	64.5%
United States dollar	USD	1.1579	0.9748	1.1957	1.0847	(9.3)%

MOTION CONTROL