Stabilus SE

Investor Presentation • May 7, 2018

Q2 FY2018 RESULTS

May 7, 2018

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
• 1. Results by region
• 1. Results by market
• 1. Outlook
• 1. Appendix

Agenda

1. Financial highlights

Q2 FY2018 highlights

Fiscal year-end September

Revenue	Revenue up by 2.5% to €251.0m (+€6.1m vs. Q2 FY17) Asia / Pacific and RoW up by 17.6% y/y, Europe up by 4.8% y/y, NAFTA 'suffers' from the weak \$: - 4.6% y/y Capital Goods + 11.3% y/y, Vibration & Velocity Control + 6.0% y/y, Automotive Powerise + 3.4% y/y and Commercial Furniture + 1.3% y/y, Automotive Gas Spring - 4.3% y/y
Adj. EBIT	Adj. EBIT1 up by 2.3% to €39.3m (vs. €38.4m in Q2 FY17) Adj. EBIT margin at 15.7% (vs. 15.7% in Q2 FY17)
Profit	Profit at €25.62m in Q2 FY18 (vs. €14.62m in Q2 FY17) Profit margin at 10.2% (vs. 6.0% in Q2 FY17)
Net leverage ratio	Net leverage ratio1 at 1.4x (vs. 2.0x as of end Q2 FY17 and 1.5x as of end FY17) Net financial debt1 at €266.5m
Outlook	FY2018 revenue guidance increased from c. 7.1% to c. 8.8% y-o-y organic growth at constant \$/€ rate of 1.10 \$/€, i.e. c. 5.5% y-o-y change to €960m @ avg. fx rate of 1.20 \$/€ in FY18 FY2018 adj. EBIT margin guidance of c. 15.5% confirmed

Note:

¹ For definition/calculation of KPIs like adj. EBIT, net leverage ratio etc. refer to appendix and/or our financial reports and quarterly statements under www.ir.stabilus.com.

² The development of profit from Q2 FY17 to Q2 FY18 is impacted by non-cash items in the financial result: €(8.4)m net foreign exchange loss on loans in Q2 FY17 and €(4.3)m net foreign exchange loss on loans in Q2 FY18.

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

Stabilus shows strong operating performance in Q2 FY2018 (y-o-y)

Note: FX = currency effect resulting from translation of NAFTA revenue from USD to EUR. Avg. fx rate of 1.23\$/€ in Q2 FY18 versus 1.07\$/€ in Q2 FY17.

¹ The development of profit from Q2 FY17 to Q2 FY18 is impacted by non-cash items in the financial result: €(8.4)m net foreign exchange loss on loans in Q2 FY17 and €(4.3)m net foreign exchange loss on loans in Q2 FY18.

Stabilus shows strong operating performance in H1 FY2018 (y-o-y)

Note: FX = currency effect resulting from translation of NAFTA revenue from USD to EUR. Avg. fx rate of 1.20\$/€ in H1 FY18 versus 1.07\$/€ in H1 FY17.

¹ The development of profit from H1 FY17 to H1 FY18 is impacted by non-cash items in the financial result: €11.8m net foreign exchange gain on loans in H1 FY17 (i.e. €8.3m impact, after 30% tax charge) and €(4.7)m net foreign exchange loss on loans in H1 FY18.

1.

Agenda

1. Results by region

Q2 FY2018 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.

H1 FY2018 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.

Europe

Note: Stabilus fiscal year-end is September.

¹ External revenue only.

• Europe car production in Q2 FY18 at 5.9m units, i.e. + 0.9% vs. Q2 FY17
• Europe's revenue increased by 4.8% y/y
• The increase was primarily driven by our Capital Goods revenue which grew by 12.8% to €41.5m (Q2 FY17: €36.8m)
• Adj. EBIT margin improved from 15.5% in Q2 FY17 to 17.0% in Q2 FY18 reflecting a strong drop-through rate at ACE (Vibration & Velocity Control Europe) and Stabilus Romania; due to partial sourcing from the US, ACE also benefits from weaker US dollar

NAFTA

• NAFTA car production in Q2 FY18 at 4.4m units, i.e. - 2.6% vs. Q2 FY17
• NAFTA's revenue 4.6% y/y due to weaker US dollar (+9.9% y/y excluding the \$/€ currency translation effect)
• NAFTA's development in Q2 FY18 was primarily driven by our industrial business, in particular Capital Goods + 7.6% y/y (+ 24.2% y/y excl. currency effect) and Vibration & Velocity Control - 2.1% y/y (+ 13.4% y/y excl. currency effect); automotive revenue - 7.6% y/y (+ 6.3% y/y excl. currency effect)
• Adj. EBIT margin at 14.0% (Q2 FY17: 16.9%), i.e. - 2.9 pp, due to higher expenses in Capital Goods, e.g. for subsequent product amendments

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 1.23\$/€ in Q2 FY18 versus 1.07\$/€ in Q2 FY17.

Asia / Pacific and RoW

Note: Stabilus fiscal year-end is September. ¹ External revenue only.

• Asia/Pacific and RoW car production in Q2 FY18 at 13.9m units, i.e. - 0.8% vs. Q2 FY17 (China: - 3.1%, Japan/Korea: - 1.4%, South America: + 11.5%)
• Asia/Pacific and RoW's revenue increased by 17.6%
• The increase was primarily driven by our Powerise and Vibration & Velocity Control businesses: Powerise revenue grew from €0.5m in Q2 FY17 to €5.2m in Q2 FY18 and VVC revenue increased from €1.1m in Q2 FY17 to €2.4m in Q2 FY18
• Adj. EBIT margin improved from 12.8% in Q2 FY17 to 15.0% in Q2 FY18 due to higher capacity utilization of the Powerise line in China and growth in Vibration & Velocity Control

Agenda

1. 1.

4.

5.

1. Results by market

Q2 FY2018 revenue growth – by market / business (y-o-y)

Note: Stabilus fiscal year-end is September.

¹Industrial including Capital Goods, Vibration & Velocity Control and Commercial Furniture revenue.

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

Q2 FY2018 revenue growth – Automotive business (y-o-y)

Note: Stabilus fiscal year-end is September.

FX = currency effect resulting from translation of NAFTA revenue from USD to EUR. Avg. fx rate of 1.23\$/€ in Q2 FY18 versus 1.07\$/€ in Q2 FY17. Numbers rounded to one decimal. Due to rounding, numbers presented may not add up precisely to the totals provided.

Q2 FY2018 revenue growth – Industrial business (y-o-y)

• Industrial revenue increased by 9.0% (13.9% excluding \$/€ currency translation effect)
• Excluding \$/€ currency translation effect Capital Goods grew by 16.0%, Vibration & Velocity Control by 11.9%, and Commercial Furniture by 4.0%
• Continuing strong growth e.g. in the following segments: agriculture and construction machinery, bus/truck/transportation and independent aftermarket

Note: Stabilus fiscal year-end is September.

FX = currency effect resulting from translation of NAFTA revenue from USD to EUR. Avg. fx rate of 1.23\$/€ in Q2 FY18 versus 1.07\$/€ in Q2 FY17. Numbers rounded to one decimal. Due to rounding, numbers presented may not add up precisely to the totals provided.

Agenda

1. Outlook

5.

Outlook

	FY2017 Actual	FY2018 Guidance
		€ million	percent
Revenue	€910.0m (@ 1.10 \$/€)	~ €990m (@ 1.10 \$/€) ~ €960m (@ 1.20 \$/€)	~ 8.8% growth (organic, at constant \$/€ rate) ~ 5.5% y/y
% Adj. EBIT margin	15.1%		~ 15.5%

Comments

• Revenue guidance FY2018 increased from c. 7.1% to c. 8.8% organic revenue growth, i.e.
• ~ 8.8% y-o-y growth (organic and at constant avg. \$/€ rate of 1.10 vs. prior year), i.e.
• ~ 5.5% y-o-y change to approx. €960m, under assumption of avg. \$/€ rate of 1.20 in FY18
• Decrease of US\$/€ avg. fx rate in FY18 by 0.10 \$/€ leads to a revenue increase by approx. €30m and vice versa, e.g.: 1.10 \$/€ ~ €990m (~ 8.8% y/y), 1.15 \$/€ ~ €975m (~ 7.1% y/y), 1.20 \$/€ ~ €960m (~ 5.5% y/y), 1.25 \$/€ ~ €945m (~ 3.8% y/y)
• FY2018 adj. EBIT margin guidance of c. 15.5% confirmed

Agenda

1. Appendix

Revenue by region and customer market (3M ended March 31, 2018)

External revenue (€m)
	Q2 FY2017 Actual	Q2 FY2018 Actual	Change	% change
Automotive Gas Spring	41.3	41.5	0.2	0.5%
Automotive Powerise	27.4	27.8	0.4	1.5%
Industrial / Capital Goods	36.8	41.5	4.7	12.8%
Vibration & Velocity Control	14.5	14.8	0.3	2.1%
Commercial Furniture	6.2	6.5	0.3	4.8%
Europe	126.1	132.2	6.1	4.8%
Automotive Gas Spring1	29.3	27.2	(2.1)	(7.2)%
Automotive Powerise1	37.8	34.8	(3.0)	(7.9)%
Industrial / Capital Goods1	15.7	16.9	1.2	7.6%
Vibration & Velocity Control1	9.7	9.5	(0.2)	(2.1)%
Commercial Furniture1	1.3	1.0	(0.3)	(23.1)%
NAFTA1	93.7	89.4	(4.3)	(4.6)%
Automotive Gas Spring	20.8	18.9	(1.9)	(9.1)%
Automotive Powerise	0.5	5.2	4.7	>100.0%
Industrial / Capital Goods	2.7	3.0	0.3	11.1%
Vibration & Velocity Control	1.1	2.4	1.3	>100.0%
Commercial Furniture	-	-	-	n/a
Asia / Pacific and RoW	25.0	29.4	4.4	17.6%
Total Automotive Gas Spring	91.5	87.6	(3.9)	(4.3)%
Total Automotive Powerise	65.6	67.8	2.2	3.4%
Total Industrial / Capital Goods	55.1	61.3	6.2	11.3%
Total Vibration & Velocity Control	25.2	26.7	1.5	6.0%
Total Commercial Furniture	7.5	7.6	0.1	1.3%
Total	244.9	251.0	6.1	2.5%

Note: ¹ NAFTA Q2 FY18 revenue includes currency effect of €(13.6)m, resulting from translation of NAFTA revenue from USD to EUR. Avg. fx rate of 1.23\$/€ in Q2 FY18 versus 1.07\$/€ in Q2 FY17.

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

Revenue by region and customer market (6M ended March 31, 2018)

External revenue (€m)
	H1 FY2017 Actual	H1 FY2018 Actual	Change	% change
Automotive Gas Spring	75.0	78.9	3.9	5.2%
Automotive Powerise	49.0	54.3	5.3	10.8%
Industrial / Capital Goods	66.6	75.0	8.4	12.6%
Vibration & Velocity Control	26.0	27.3	1.3	5.0%
Commercial Furniture	11.8	12.6	0.8	6.8%
Europe	228.4	248.1	19.7	8.6%
Automotive Gas Spring1	56.6	51.7	(4.9)	(8.7)%
Automotive Powerise1	68.6	68.1	(0.5)	(0.7)%
Industrial / Capital Goods1	29.3	31.4	2.1	7.2%
Vibration & Velocity Control1	18.4	19.6	1.2	6.5%
Commercial Furniture1	2.5	2.2	(0.3)	(12.0)%
NAFTA1	175.3	173.0	(2.3)	(1.3)%
Automotive Gas Spring	43.0	40.1	(2.9)	(6.7)%
Automotive Powerise	1.5	9.8	8.3	>100.0%
Industrial / Capital Goods	5.1	5.9	0.8	15.7%
Vibration & Velocity Control	2.3	4.6	2.3	100.0%
Commercial Furniture	-	0.1	0.1	n/a
Asia / Pacific and RoW	51.8	60.4	8.6	16.6%
Total Automotive Gas Spring	174.7	170.7	(4.0)	(2.3)%
Total Automotive Powerise	119.0	132.3	13.3	11.2%
Total Industrial / Capital Goods	100.9	112.2	11.3	11.2%
Total Vibration & Velocity Control	46.6	51.5	4.9	10.5%
Total Commercial Furniture	14.3	14.8	0.5	3.5%
Total	455.5	481.5	26.0	5.7%

Note: ¹ NAFTA H1 FY18 revenue includes currency effect of €(21.2)m, resulting from translation of NAFTA revenue from USD to EUR. Avg. fx rate of 1.20\$/€ in H1 FY18 versus 1.07\$/€ in H1 FY17.

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

P&L overview (3M ended March 31, 2018)

P&L (€m)
	Q2 FY2017 Actual	Q2 FY2018 Actual	Change	% change
Revenue	244.9	251.0	6.1	2.5%
COGS	(169.7)	(172.8)	(3.1)	1.8%
Gross Profit	75.2	78.2	3.0	4.0%
% margin	30.7%	31.2%
R&D	(10.7)	(11.6)	(0.9)	8.4%
S&M	(20.6)	(20.3)	0.3	(1.5)%
G&A	(8.8)	(10.4)	(1.6)	18.2%
Other income/expenses	(1.7)	(0.9)	0.8	(47.1)%
EBIT	33.3	35.0	1.7	5.1%
% margin	13.6%	13.9%
Adjustments1	5.1	4.3	(0.8)	(15.7)%
Adj. EBIT1	38.4	39.3	0.9	2.3%
% margin	15.7%	15.7%

Note: ¹ Adjusted EBIT represents profit from operating activities (EBIT), adjusted for exceptional non-recurring items (e.g. restructuring or one-time advisory costs) and depreciation/amortization of fair value adjustments from purchase price allocations (PPA).

P&L overview (6M ended March 31, 2018)

P&L (€m)
	H1 FY2017 Actual	H1 FY2018 Actual	Change	% change
Revenue	455.5	481.5	26.0	5.7%
COGS	(320.5)	(335.7)	(15.2)	4.7%
Gross Profit	135.1	145.8	10.7	7.9%
% margin	29.7%	30.3%
R&D	(18.6)	(21.7)	(3.1)	16.7%
S&M	(40.6)	(40.8)	(0.2)	0.5%
G&A	(17.8)	(19.4)	(1.6)	9.0%
Other income/expenses	(0.7)	0.6	1.3	<(100.0)%
EBIT	57.4	64.5	7.1	12.4%
% margin	12.6%	13.4%
Adjustments1	10.4	8.7	(1.7)	(16.3)%
Adj. EBIT1	67.8	73.2	5.4	8.0%
% margin	14.9%	15.2%

Note: ¹ Adjusted EBIT represents profit from operating activities (EBIT), adjusted for exceptional non-recurring items (e.g. restructuring or one-time advisory costs) and depreciation/amortization of fair value adjustments from purchase price allocations (PPA).

Balance sheet overview

Balance sheet (€m)
	Sept 2017 Actual	March 2018 Actual	Change	% change
Property, plant and equipment	169.7	169.2	(0.5)	(0.3)%
Goodwill	194.2	191.9	(2.3)	(1.2)%
Other intangible assets	268.9	253.8	(15.1)	(5.6)%
Inventories	85.3	85.4	0.1	0.1%
Trade receivables	105.1	126.6	21.5	20.5%
Other assets	38.7	43.2	4.5	11.6%
Cash	68.1	75.8	7.7	11.3%
Total assets	930.0	945.9	15.9	1.7%
Equity incl. minorities	336.4	360.8	24.4	7.3%
Debt (incl. accrued interest)	322.0	321.7	(0.3)	(0.1)%
Pension plans and similar obligations	53.2	51.7	(1.5)	(2.8)%
Deferred tax liabilities	60.0	53.6	(6.4)	(10.7)%
Trade accounts payable	79.1	75.1	(4.0)	(5.1)%
Other liabilities	79.3	83.0	3.7	4.7%
Total equity and liabilities	930.0	945.9	15.9	1.7%
Net leverage ratio1	1.5x	1.4x

Note:

¹ Net leverage ratio = net financial debt / adj. EBITDA LTM. Net financial debt defined as principal amount of financial debt less cash. Adj. EBITDA LTM = last-twelve-month adjusted earnings before interest, taxes, depreciation and amortization. Refer also to our financial reports and quarterly statements at www.ir.stabilus.com for further details. Numbers rounded to one decimal. Due to rounding, numbers presented may not add up precisely to the totals provided.

Cash flow overview and free cash flow (3M ended March 31, 2018)

Cash Flow Statement (€m)
	Q2 FY2017 Actual	Q2 FY2018 Actual	Change	% change
Cash flow from operating activities	28.3	25.7	(2.6)	(9.2)%
Cash flow from investing activities	(13.0)	(8.9)	4.1	(31.5)%
Cash flow from financing activities	(17.5)	(21.8)	(4.3)	24.6%
Net increase / (decrease) in cash	(2.1)	(5.0)	(2.9)	>100.0%
Effect of movements in exchange rates	0.4	0.4	-	0.0%
Cash as of beginning of the period	69.7	80.3	10.6	15.2%
Cash as of end of the period	68.0	75.8	7.8	11.5%

Free Cash Flow (€m)

	Q2 FY2017 Actual	Q2 FY2018 Actual	Change	% change
Cash flow from operating activities	28.3	25.7	(2.6)	(9.2)%
Cash flow from investing activities	(13.0)	(8.9)	4.1	(31.5)%
Free cash flow	15.3	16.8	1.5	9.8%

Cash flow overview and free cash flow (6M ended March 31, 2018)

Cash Flow Statement (€m)
	H1 FY2017 Actual	H1 FY2018 Actual	Change	% change
Cash flow from operating activities	44.6	50.3	5.7	12.8%
Cash flow from investing activities	(22.5)	(18.8)	3.7	(16.4)%
Cash flow from financing activities	(30.0)	(23.0)	7.0	(23.3)%
Net increase / (decrease) in cash	(7.8)	8.5	16.3	<(100.0)%
Effect of movements in exchange rates	0.8	(0.9)	(1.7)	<(100.0)%
Cash as of beginning of the period	75.0	68.1	(6.9)	(9.2)%
Cash as of end of the period	68.0	75.8	7.8	11.5%

Free Cash Flow (€m)

	H1 FY2017 Actual	H1 FY2018 Actual	Change	% change
Cash flow from operating activities	44.6	50.3	5.7	12.8%
Cash flow from investing activities	(22.5)	(18.8)	3.7	(16.4)%
Free cash flow	22.1	31.5	9.4	42.5%

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