Stabilus SE — Investor Presentation 2015

Aug 17, 2015

Third quarter results FY2015

Disclaimer

Stabilus S.A. (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.

Agenda

1.	Financial highlights
2.	Business by region
3.	Business by customer market
4.	Outlook
5.	Appendix

Third quarter results FY2015

1. Financial highlights 1.

Highlights Q3 FY2015

Fiscal year-end September

Revenue	• Revenue up by 23.2% to €160.4mm (+€30.2mm vs. Q3 FY14) • Growth in all regions with NAFTA (+35.1%), Asia / Pacific and RoW (+21.5%) as well as Europe (+16.2%) • Growth in all markets with Powerise (+58.9%), Swivel Chair (+22.6%), Gas Spring (+17.6%) and Capital Goods (+11.7%)
Adj. EBITDA	• Adj. EBITDA up by 12.2% to €27.5mm (+€3.0mm vs. Q3 FY14) • Adj. EBITDA margin at 17.1% (vs. Q3 FY14 margin of 18.8%)
Adj. EBIT	• Adj. EBIT up by 10.6% to €19.8mm (+€1.9mm vs. Q3 FY14) • Adj. EBIT margin at 12.3% (vs. Q3 FY14 margin of 13.7%)
Net debt	• Refinancing of the high-yield bond concluded on June 16, 2015 • Net financial debt of €239.9mm • Net financial debt / adj. EBITDA LTM decreased to 2.3x (vs. 2.5x as per FY2014)
Outlook	• Full year revenue guidance increased to €600mm • Adj. EBIT margin is expected to be in line with historic results at 12-13%

Stabilus strong operating performance in Q3 FY2015 (y-o-y)

Note: Stabilus fiscal year-end is September

¹ Adj. EBIT/ EBITDA represents EBIT/ EBITDA, as adjusted by management primarily in relation to advisory fees, IPO-related expenses, restructuring / ramp-up expenses and pension interest

²Simplified definition of FCF differs to more detailed presentation in quarterly report

Stabilus strong operating performance in 9M FY2015 (y-o-y)

Note: Stabilus fiscal year-end is September

¹ Adj. EBIT/ EBITDA represents EBIT/ EBITDA, as adjusted by management primarily in relation to advisory fees, IPO-related expenses, restructuring / ramp-up expenses and pension interest

²Simplified definition of FCF differs to more detailed presentation in quarterly report

3.

1.

4.

5.

Third quarter results FY2015

2. Business by region

7

Quarterly revenue and adj. EBITDA growth – by region (y-o-y)

Note: Stabilus fiscal year-end is September. Numbers rounded to one decimal. Due to rounding, numbers presented may not add up precisely to the totals provided. ¹ Billed-from view, without intersegment revenue.

² Adj. EBITDA represents EBITDA, as adjusted by management primarily in relation to advisory fees, IPO-related expenses, restructuring / ramp-up expenses and pension interest

NAFTA – Revenue growth (y-o-y)

• NAFTA car production in Q3 FY15 at 4.5mm units, i.e. +2.5% vs. previous year
• NAFTA Q3 revenue increased by 35.1% to €60.0mm (37.4% of group revenue vs. 34.1% in Q3 FY14)
• Revenue in US\$ terms improved by 9.3% to \$66.7mm in Q3 FY15 vs. \$61.0mm in Q3 FY14
• US: preparation for the installation of an additional fully automated gas spring production line and for the set up of an improved aftermarket distribution process
• Mexico: preparation for the installation of the fifth Powerise line
• NAFTA profitability in Q3 FY15 is impacted by an increase of warranty provision

Asia / Pacific and RoW – Revenue growth (y-o-y)

• Asia/Pacific and RoW car production in Q3 FY15 at 12.3mm units, i.e. -1.1% vs. previous year
• Strong year-over-year revenue growth of 21.5% in Q3 FY15 mainly driven by automotive gas springs
• China: China's Q3 FY15 revenue at €11.3mm (+34.5% vs. Q3 FY14); China 9M FY15 revenue at €32.4mm (+27.6% vs. 9M FY14); China's revenue is approx. 7 % of group revenue
• Korea: new powder coating line installed, preparation to start production in July 2015
• Brazil continues to show revenue weakness and its EBITDA is €0.1mm below prior year

China: Increasing share of SUV sales offers potential for more gas springs

• Growth of China's automobile market
• − Automobile market growth shows a 6.2% CAGR or 4.5mm units increase over the next three years
• Gas spring sales should outperform the automotive market growth due to the increased share of SUVs (from 19.1% in 2014 to 25.4% in 2017)
• − SUV annual sales expected to show a 17.1% CAGR or 2.6mm units increase over the next three years
• − The strong SUV trend offers more gas spring installations (SUVs typically require two gas springs for the tailgate)

Europe – Revenue growth (y-o-y)

• Car production in Q3 FY15 at 5.3mm units, i.e. -1.9% vs. previous year
• Europe's Gas Spring revenue increased by 3.9% to €34.6mm in Q3 FY15 (in 9M FY15 up to €101.1mm, +4.2% yoy)
• European Powerise revenue more than doubled in Q3 FY15 (€14.0mm in Q3 FY15 vs. €6.2mm in Q3 FY14 and €38.2mm in 9M FY15 vs. €13.6mm in 9M FY14)
• Germany: construction of a fully-automated gas spring production line with capacity of ~7mm units p.a. in progress; expected start of production: Jan 2016

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5.

Third quarter results FY2015

3. Business by customer market

Revenue growth – by business (y-o-y)

Revenue growth – Automotive business (y-o-y)

Revenue growth – Industrial business (y-o-y)

Third quarter results FY2015

Outlook FY2015: Financial performance

	FY2014 Actual	FY2015 Guidance
Revenue	€507mm	€600mm
% Growth	10.3%	18.3%
% Adj. EBIT margin	12.8%	12-13%

Comments

• On track to deliver another record year, achieving ambitious revenue and EBIT targets
• Strong European results support solid sector outlook
• Powerise continues to be a clear growth driver going forward
• Revenue guidance for FY2015 increased from €575-585mm to €600mm due to expected performance in Q4 and the continuing strength of the US dollar (assumed average rate per €1: \$1.10 in Q4 FY2015)
• Adj. EBIT margin guidance unchanged at 12-13%

Q&A

Financial calendar

November 27, 2015	• Preliminary Financial Results FY2015
December 21, 2015	• Annual Report 2015
Investor Relations Andreas Schröder Phone: +352 286 770 21 E-Mail: anschroeder@stabilus.com
For further information please visit: www.ir.stabilus.com

Third quarter results FY2015

P&L overview

P&L (€mm)
3 months ended			Q3 FY	June 2014 Actual	June 2015 Actual
Revenue				130.2	160.4
COGS				(97.9)	(122.6)
Gross Profit				32.2	37.8
% margin				24.7%	23.6%
R&D				(4,9)	(5.3)
S&M				(9.9)	(11.4)
G&A				(18.2)	(6.0)
Other income/expenses				0.3	0.5
Adjustments				18.3	4.2
Adj. EBIT				17.9	19.8
% margin				13.7%	12.3%
Depreciation & amortization (exc. PPA)				6.6	7.7
Adj. EBITDA				24.5	27.5
% margin				18.8%	17.1%
Advisory	14.1	0.5
Restructuring / ramp-up	0.6	0.3
Pension interest add-back	0.4	0.2
PPA adjustments	3.2	3.2
Total Adjustments	18.3	4.2

Balance sheet overview

Balance sheet (€mm)
	September 2014 Actual	June 2015 Actual
Property, plant and equipment	119.6	128.0
Goodwill	51.5	51.5
Other intangible assets	171.0	168.7
Inventories	49.5	58.4
Trade receivables	56.5	75.2
Other assets	38.7	25.2
Cash	33.5	26.1
Total assets	520.3	532.9
Equity incl. minorities	76.1	69.1
Debt (incl. accrued interest)	262.3	266.0
Pension plans and similar obligations	48.4	48.4
Deferred tax liabilities	43.8	42.7
Trade accounts payable	53.7	61.1
Other liabilities	36.0	45.6
Total equity and liabilities	520.3	532.9
Net financial debt	228.9	239.9
Net financial debt / adj. EBITDA LTM	2.5x	2.3x

Refinancing in June 2015

•	Old financial structure (until June 16, 2015):
	− High-yield bond due 2018 with the remaining €256.1
	principal amount and 7.75% interest rate and a
	committed €25 million revolving credit facility
•	New financial structure (from June 16, 2015):
	− €270 million term loan facility and €50 million
	revolving credit facility (both due 2020) with an
	interest rate of currently 2% over Euribor
•	Refinancing impact on FY2015 earnings and cash flow:
	− €9.9 million early redemption fee
	− €4.7 million transaction costs, thereof €4.4 million
	capitalized
	− €15.4 million loss from the derecognition of
	embedded derivatives (non-cash item)

Cash flow overview (9M ended June 30, 2015)

Cash Flow Statement (€mm)
9 months ended		9M FY	June 2014 Actual	June 2015 Actual
Cash flow from operating activities			58.1	46.6
Cash flow from investing activities			(25.7)	(33.4)
Cash flow from financing activities			(32.2)	(21.9)
Net increase / (decrease) in cash			0.2	(8.6)
Effect of movements in exchange rates			(0.1)	1.2
Cash as of beginning of the period			21.8	33.5
Cash as of end of period			22.0	26.1

Comments

• In 9M FY14 begin of sale of receivables program (factoring); €20.2mm trade receivables were sold to a factor, resulting in a cash-in of €19.1mm in March 2014.

External revenue by region and customer market (3M ended June 30, 2015)

External revenue (€mm)
3 months ended	Q3 FY	June 2014 Actual	June 2015 Actual
Gas Spring		33.3	34.6
Powerise		6.2	14.0
Industrial		25.1	26.3
Swivel Chair		5.3	6.3
Europe		69.9	81.2
Gas Spring		18.3	25.4
Powerise		15.7	20.7
Industrial		9.6	12.6
Swivel Chair		0.8	1.3
NAFTA		44.4	60.0
Gas Spring		13.7	16.8
Powerise		-	-
Industrial		2.2	2.3
Swivel Chair		-	0.1
Asia / Pacific and RoW		15.8	19.2
Total		130.2	160.4

External revenue by region and customer market (9M ended June 30, 2015)

External revenue (€mm)
9 months ended	9M FY	June 2014 Actual	June 2015 Actual
Gas Spring		97.0	101.1
Powerise		13.6	38.2
Industrial		73.1	74.0
Swivel Chair		16.1	17.8
Europe		199.8	231.1
Gas Spring		53.3	69.6
Powerise		46.2	59.9
Industrial		27.3	33.9
Swivel Chair		2.3	3.3
NAFTA		129.2	166.7
Gas Spring		41.3	49.0
Powerise		-	-
Industrial		5.8	6.1
Swivel Chair		0.1	0.1
Asia / Pacific and RoW		47.1	55.2
Total		376.1	453.0