Stabilus SE — Investor Presentation 2016

Nov 28, 2016

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.

1. FY2016 Highlights

• 1. Results by Region
• 1. Results by Market
• 1. Outlook
• 1. Appendix

• FY2016 Highlights 1.

Highlights FY2016 (preliminary figures)

Fiscal year-end September

Revenue	• Revenue up by 20.6% to €737.5mm (+€126.2mm vs. FY15) • Growth in all regions with NAFTA (+26.0%), Europe (+18.1%) as well as Asia / Pacific and RoW (+14.7%) • Growth in all markets with Powerise (+39.7%), Capital Goods (+14.5%), Gas Spring (+8.7%) and Swivel Chair (+3.2%)
Adj. EBIT	• Adj. EBIT up by 29.7% to €98.8mm (+€22.6mm vs. FY15) • Adj. EBIT margin at 13.4% (vs. FY15 margin of 12.5%)
Profit	• Profit after tax up by 182.4% to €48.0mm (+€31.0mm vs. FY15) • Profit margin at 6.5% (vs. FY15 margin of 2.8%)
Net debt	• Net financial debt1 at €330.0mm • Net financial debt / adj. EBITDA LTM at 2.5x, pro-forma2 at approx. 2.1x (vs. 2.1x as per end FY2015)
Significant events and transactions	• Acquisition of ACE, Hahn Gasfedern and Fabreeka / Tech Products – partially financed by capital increase • From Q4 FY16 on, Hahn Gasfedern is part of Industrial / Capital Goods business unit; ACE, Fabreeka / Tech Products form a new, fifth business unit Vibration & Velocity Control
Outlook	• FY2017 revenue guidance: €865mm, i.e. ~17% y-o-y revenue growth (US\$/€ rate assumption: 1.15 \$/€) • Adj. EBIT margin guidance increased to 13%-14%
	Note: 1 Net financial debt = outstanding principal amount of senior facilities less cash: €405.0mm - €75.0mm = €330.0mm.

² Pro-forma, i.e. considering LTM earnings of acquired companies: Adj. EBITDA LTM: €133.3.xmm + €20.3mm (3/4 of €27.0mm) = €153.6mm.

Stabilus shows strong operating performance in FY2016 (y-o-y)

Note: Stabilus fiscal year-end is September.

¹Adj. FCF = cash flow from operating activities plus cash flow from investing activities, adjusted for acquisition effect in FY2016. See page 20 for further details. FX = currency effect resulting from translation of NAFTA revenue from USD to EUR. Avg. fx rate of 1.11\$/€ in FY16 versus 1.16\$/€ in FY15. M&A = effect from the acquisition of ACE, Hahn Gasfedern, Fabreeka / Tech Products in fiscal 2016.

2. Results by Region

1.

FY2016 revenue and adj. EBIT 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.

NAFTA – FY2016 revenue and adj. EBIT growth (y-o-y)

• NAFTA car production in FY16 at 17.9mm units, i.e. +2.6% vs. previous fiscal year
• NAFTA FY16 revenue increased by 26.0% to €289.0mm (39.2% of group revenue vs. 37.5% in FY15)
• Revenue in US\$ terms improved by 20.7% to \$321.1mm in FY16 vs. \$266.0mm in FY15;
• Excluding M&A and \$/€ currency translation effect, NAFTA's revenue grew by 16.8% y/y
• NAFTA's Powerise revenue increased by 32.0% to €112.2mm (FY15: €85.0mm) and NAFTA's Capital Goods revenue increased by 23.5% to €55.1mm (FY15: €44.6mm)

Note: Stabilus fiscal year-end is September. ¹ External revenue only. FX = currency effect resulting from translation of NAFTA revenue from USD to EUR. Avg. fx rate of 1.11\$/€ in FY16 versus 1.16\$/€ in FY15. M&A = effect from the acquisition of ACE, Hahn Gasfedern, Fabreeka / Tech Products in fiscal 2016.

Europe – FY2016 revenue and adj. EBIT growth (y-o-y)

• Car production in FY16 at 21.3mm units, i.e. +3.2% vs. previous fiscal year
• Europe's Gas Spring revenue increased by 4.0% to €139.4mm (FY15: 134.0mm), supported by increased strut sales ("Federbein")
• Excluding M&A, Europe's revenue grew by 12.4% y/y
• European Powerise revenue increased by 49.1% to €81.7mm (FY15: €54.8mm) following various launches since FY15 as well as further Powerise share increase in existing platforms

Note: Stabilus fiscal year-end is September.

¹ External revenue only.

M&A = effect from the acquisition of ACE, Hahn Gasfedern, Fabreeka / Tech Products in fiscal 2016.

Asia / Pacific and RoW – FY2016 revenue and adj. EBIT growth (y-o-y)

• Asia/Pacific and RoW car production in FY16 at 51.8mm units, i.e. +4.0% vs. previous fiscal year (China: +11.3%, Japan/Korea: -2.8%, South America: -18.9%)
• Revenue growth (+€10.8mm y/y) in FY16 is mainly driven by automotive business: +€7.6mm Gas Spring, +€1.4mm Powerise (output of the new Powerise line in China)
• Excluding M&A, Asia / Pacific and RoW's revenue improved by 13.3%
• China's FY16 revenue at €53.3mm (+24.5% vs. FY15)
• Chinese market continues to show increasing trend to SUVs and "boxy cars" which is very supportive for our revenue outlook in this market

Note: Stabilus fiscal year-end is September.

¹ External revenue only. M&A = effect from the acquisition of ACE, Hahn Gasfedern, Fabreeka / Tech Products in fiscal 2016.

1. Results by Market

2. 1. 1. 5.

FY2016 revenue growth – by business (y-o-y)

Note: Stabilus fiscal year-end is September.

¹Industrial including Capital Goods, Vibration & Velocity Control and Swivel Chair revenue.

FY2016 revenue growth – Automotive business (y-o-y)

• Global car production in FY16 up to 91.0mm (+3.5% vs. 88.0mm in FY15)
• Continuing consumer trend towards SUV's supports automotive revenue development
• Automotive Gas Spring business with 8.7% revenue increase (7.1% without \$/€ currency translation effect) continues to outperform vehicle production growth
• 39.7% growth (36.3% without \$/€ currency translation effect) in Powerise reflects production ramp-ups and new product launches across various OEMs since FY15

Note: Stabilus fiscal year-end is September.

FX = currency effect resulting from translation of NAFTA revenue from USD to EUR. Avg. fx rate of 1.11\$/€ in FY16 versus 1.16\$/€ in FY15.

ORG = FY16 revenue excluding effects from acquisition and \$/€ currency conversion.

FY2016 revenue growth – Industrial business (y-o-y)

• Growth in Capital Goods business at 14.5% (at 9.8% excluding acquisition of SKF Group entities and \$/€ currency translation effect ) outperforms global economic growth
• The acquired entity Hahn Gasfedern is part of Capital Goods unit (€4.8mm revenue in FY16); ACE, Fabreeka / Tech Products form a new business unit Vibration & Velocity Control (€22.5mm revenue in FY16)
• Swivel Chair revenue up by €0.5mm in Europe and €0.3mm in NAFTA

Note: Stabilus fiscal year-end is September.

FX = currency effect resulting from translation of NAFTA revenue from USD to EUR. Avg. fx rate of 1.11\$/€ in FY16 versus 1.16\$/€ in FY15.

M&A = effect from the acquisition of ACE, Hahn Gasfedern, Fabreeka / Tech Products in fiscal 2016.

ORG = FY16 revenue excluding effects from acquisition and \$/€ currency conversion.

1. Outlook

5.

Outlook FY2017: Financial performance

	FY2016 Preliminary	FY2017 Guidance
Revenue	€737.5mm	€865mm
% Growth	20.6% (14.2% organic)	~17%
% Adj. EBIT margin	13.4%	13%-14%

Comments

• On track to deliver another record year, aiming for ambitious revenue and EBIT targets
• Powerise continues to be a clear growth driver
• Revenue guidance for FY2017: €865mm (US\$/€ avg. fx rate assumption for FY2017 of 1.15 \$/€)

• Adj. EBIT margin guidance increased to 13%-14%.

• Appendix 5.

FY2016 P&L overview

P&L (€mm)
	2015 Actual	2016 Preliminary
Revenue	611.3	737.5
COGS	(463.6)	(547.7)
Gross Profit	147.7	189.8
% margin	24.2%	25.7%
R&D	(24.2)	(26.6)
S&M	(44.1)	(55.5)
G&A	(27.3)	(33.9)
Other income/expenses	3.6	2.8
Adjustments	20.5	22.1
Adj. EBIT	76.2	98.8
% margin	12.5%	13.4%
Depreciation & amortization (excl. PPA D&A)	31.1	32.2
PPA adjustment - inventory step-up	-	2.3
Adj. EBITDA	107.3	133.3
% margin	17.6%	18.1%
Advisory1 1.4 3.9

Restructuring / ramp-up	5.3	-
Pension interest add-back3	1.1	1.1
PPA adjustments2	12.7	17.1
Total adjustments	20.5	22.1

Note: ¹ Advisory expenses of €3.9mm in FY2016 relate to the acquisition of ACE, Hahn Gasfeder, Fabreeka / Tech Products.

² PPA adjustments (D&A) in FY16 comprise €12.7mm for old Stabilus and €4.4mm for new acquisition of ACE, Hahn Gasfedern, Fabreeka / Tech Products.

³ Adjustments for pension interest add-back will be discontinued from FY2017 on.

Balance sheet overview

Balance sheet (€mm)
	September 2015 Actual	September 2016 Preliminary
Property, plant and equipment	134.0	167.6
Goodwill	51.5	197.5
Other intangible assets	166.5	295.8
Inventories	59.8	74.7
Trade receivables	62.8	97.6
Other assets	28.2	29.2
Cash	39.5	75.0
Total assets	542.2	937.4
Equity incl. minorities	76.7	262.9
Debt (incl. accrued interest)1	263.6	401.1
Pension plans and similar obligations	48.0	58.7
Deferred tax liabilities	39.0	60.6
Trade accounts payable	68.9	80.4
Other liabilities	46.0	73.7
Total equity and liabilities	542.2	937.4
Net leverage ratio1	2.1x	2.5x
Net leverage ratio – pro-forma2		~ 2.1x

Key highlights

•	2016 PPA: Purchase price €310.2mm (\$339mm base
	price and \$4.8mm price adj., at 1.11 \$/€ fx rate)
•	Other Intangibles comprise €182.0mm customer
	relationship (PY: 64.5mm), €64.5mm capitalized R&D
	cost (PY: €62.1mm), €33.9mm technology (PY:
	€28.0mm), €11.9mm trademark (PY: €9.2mm), €3.2mm
	software (PY: €2.5mm) and €0.2mm patents
	(PY:€0.2mm)
•	Old financial structure (as of Sept 30, 2015):
	− €267.5mm term loan facility and €50mm unutilized
	revolving credit facility (both due 2020)
•	New financial structure (as of Sept 30, 2016):
	− €405mm3 term loan facility and €70mm revolving

Note:

¹ Net leverage ratio = net financial debt / adj. EBITDA LTM. Net financial debt defined as principal amount of senior facilities less cash: €405.0mm - €75.0mm = €330.0mm.

² Pro-forma, i.e. considering earnings of acquired companies. Adj. EBITDA LTM: €133.3.xmm + €20.3mm (3/4 of €27.0mm) = €153.6mm.

³ Original principal amount of €455mm less €50mm redemption in Q4 FY16.

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

credit facility (both due 2021)

Cash flow overview and free cash flow

Cash Flow Statement (€mm)
	2015 Actual	2016 Preliminary	2016 Adjusted1
Cash flow from operating activities	86.0	110.4	110.4
Cash flow from investing activities2	(51.2)	(348.8)	(53.1)
Cash flow from financing activities3	(28.4)	276.1	(20.5)
Net increase / (decrease) in cash	6.4	37.7	36.8
Effect of movements in exchange rates	(0.4)	(2.1)
Cash as of beginning of the period	33.5	39.5
Cash as of end of the period	39.5	75.0

Free Cash Flow (€mm)

	2015 Actual	2016 Preliminary	2016 Adjusted1
Cash flow from operating activities	86.0	110.4	110.4
Cash flow from investing activities2	(51.2)	(348.8)	(53.1)
Free cash flow	34.8	(238.4)	57.3
Payments for interest	(32.2)	(7.0)	(7.0)
Free cash flow after interest payments	2.6	(245.4)	50.3

Note:

¹ Adjusted = excluding effects from the acquisition of ACE, Hahn Gasfedern, Fabreeka / Tech Products, refinancing of senior facilities and capital increase. No adjustment for transaction cost payments.

² Cash flow from investing activities in FY16 comprises cash outflow for the acquisition of ACE, Hahn Gasfedern, Fabreeka / Tech Products of €295.7mm, incl. proceeds from currency hedging (=€302.5mm - €6.8mm).

³ Cash flow from financing activities in FY16 comprises cash inflow from refinancing of senior facilities and capital increase of €296.6mm (=€455mm+€115mm-€115mm- €50mm-€267.5mm+€159.1mm).

External revenue by region and customer market

External revenue (€mm)
	2015 Actual	2016 Preliminary
Automotive Gas Spring	134.0	139,4
Automotive Powerise	54.8	81,7
Industrial / Capital Goods1	96.4	106.7
Vibration & Velocity Control	-	12.6
Swivel Chair	23.3	23.8
Europe	308.5	364.2
Automotive Gas Spring	95.3	108.0
Automotive Powerise	85.0	112.2
Industrial / Capital Goods	44.6	55.1
Vibration & Velocity Control	-	9.0
Swivel Chair	4.4	4.7
NAFTA	229.3	289.0
Automotive Gas Spring	65.1	72.7
Automotive Powerise	-	1.4
Industrial / Capital Goods	8.3	9.2
Vibration & Velocity Control	-	1.0
Swivel Chair	0.1	0.1
Asia / Pacific and RoW	73.5	84.3
Total Automotive Gas Spring	294.4	320.0
Total Automotive Powerise	139.8	195.3
Total Industrial / Capital Goods1	149.3	171.0
Total Vibration & Velocity Control	-	22.5
Total Swivel Chair	27.7	28.6
Total	611.3	737.5

Note: ¹ In Q4 FY16 Industrial / Capital Goods revenue includes €4.8mm revenue of Hahn Gasfedern.

FY2016 adj. EBITDA by region

Adj. EBITDA by region (€mm)
	2015 Actual	2016 Preliminary
Europe	62.5	77.2
NAFTA	31.6	40.5
Asia / Pacific and RoW	13.2	15.6
Total	107.3	133.3

					Adj. EBITDA margin (in % of external revenue)
--	--	--	--	--	-----------------------------------------------

	2015 Actual	2016 Preliminary
Europe	20.3%	21.2%
NAFTA	13.8%	14.0%
Asia / Pacific and RoW	18.0%	18.5%
Total	17.6%	18.1%