Stabilus SE — Investor Presentation 2019

Aug 5, 2019

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Q3 FY2019 RESULTS

August 5, 2019

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Disclaimer

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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.

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Agenda

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• 1. Operational highlights
• 1. Financial highlights
• 1. Results by region
• 1. Results by market
• 1. Outlook
• 1. Appendix

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Agenda

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1. Operational highlights

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Additional gas-spring production facility for HAHN

HAHN's new building

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Capacity expansion at HAHN (industrial business)

• Since acquisition in summer 2016 HAHN's annual sales increased by almost 50% to more than €30m
• To support further growth, the adjacent production facility has been acquired for €4.2m (agreement in late FY18, payment in FY19, machinery/production equipment installed)
• Size of the new facility: c. 3.5k sqm, thereof c. 2.5k sqm production area (in addition to the existing production area in the Hahn facility of c. 5.1k sqm)
• New facility will allow an increase of HAHN's annual production capacity in Aichwald (near Stuttgart, Germany) by around 50%

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New Powerise production facility in China

Greenfield site in Pinghu

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Capacity expansion at Stabilus China

• Medium-term Automotive Powerise revenue plan for China supports a sizable capacity expansion
• Separation of Gas Spring and Powerise production also advisable for China (as done in Mexico and Romania)
• Construction project for a new Powerise production facility in Pinghu, Zhejiang Province, China (c. onehour drive from Shanghai) started this year
• A two-step expansion project:
  • Step 1: building construction (c. 12.6k sqm) till March 2020 and transfer of existing two Powerise lines from current Wujin plant to Pinghu by end of 2020; new building will be able to house up to nine Powerise assembly lines
  • Step 2: Until the end of FY2023 construction of a building extension (c. 7.5k sqm) which will be able to accommodate additional lines
• Local investment support for 80% of the €10m land and building cost
• Up to €50m investment in Pinghu, timing depending on market development

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Three acquisitions in the first nine months of FY2019

Select products and applications

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Acquisitions in 9M FY19 (industrial business)

• General Aerospace develops and assembles motion control components and systems for the aerospace industry (2018 revenue: €11m, 2019 expected revenue: €16m; transaction closed in April 2019)
  • Rationale: expand motion control product portfolio in aviation industry, strengthen Stabilus market position, develop aircraft aftermarket / retrofit business
• Clevers is an Argentine niche manufacturer of gas springs and dampers primarily focused on South American customers (2018 revenue: c. €1m; transaction closed in May 2019)
  • Rationale: expand and further develop independent aftermarket and industrial business in South America
• Piston is a Turkish manufacturer of gas springs and dampers (2018 revenue: c. €5m; transaction closed in June 2019)
  • Rationale: expand and further develop independent aftermarket and industrial business

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1.

Agenda

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1. Financial highlights

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Q3 FY2019 highlights

Fiscal year-end September

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Revenue	Revenue at €241.6m, - 3.4% y/y: \$/€ currency translation (FX): + 2.1% y/y , acquisitions (ACQ): + 1.6% y/y, organic (ORG): - 7.1% y/y
Adj. EBIT	Adj. EBIT1 at €37.1m (vs. €39.5m in Q3 FY18), - 6.1% y/y (ORG: - 9.1% y/y) Adj. EBIT margin at 15.4% (vs. 15.8% in Q3 FY18)
Profit	Profit at €19.3m in Q3 FY19 (vs. €25.3m in Q3 FY18) Profit margin at 8.0% (vs. 10.1% in Q3 FY18)
Net leverage ratio	Net leverage ratio1 at 1.2x (vs. 1.2x as of end Q3 FY18 and 1.1x as of end FY18) Net financial debt1 at €225.5m
Acquisitions	Acquisitions of General Aerospace, Clevers and Piston have been closed in Q3 FY19 Revenue and earnings of General Aerospace are included in group's income statement for Q3 FY19; assets and liabilities of all three acquired entities are included in group's balance sheet as of end Q3 FY19
Outlook	FY2019 revenue expected to be between €950m and €960m – in line with current market expectations FY2019 adj. EBIT margin expected at c. 15%

8 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. FX = currency effect resulting from translation of NAFTA revenue from USD to EUR. ACQ = acquisition effect, contribution of the acquired entities to group's revenue and earnings. ORG = organic growth, i.e. growth excluding \$/€ currency translation effect (FX) and acquisition effect (ACQ). Numbers rounded to one decimal. Due to rounding, numbers presented may not add up precisely to the totals provided.

Q3 FY2019 impacted by softer markets in Europe and China

Note: Capital expenditure: €12.8 in Q3 FY19 versus €8.7m in Q3 FY18, i.e. +€4.1m or +47.1% y/y.

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FX = currency effect resulting from translation of NAFTA revenue from USD to EUR. Avg. fx rate of 1.12\$/€ in Q3 FY19 versus 1.19\$/€ in Q3 FY18. ACQ = acquisition effect, contribution of the acquired General Aerospace to group's revenue and earnings in Q3 FY19. ORG = organic growth, i.e. growth excluding \$/€ currency translation effect (FX) and acquisition effect (ACQ). ¹ Adj. FCF = FCF before acquisitions, i.e. cash flow from operating activities plus cash flow from investing activities, excluding 'acquisition of assets and liabilities within business combination, net of cash acquired' (General Aerospace, Clevers and Piston). See appendix for further details.

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9M FY2019 impacted by softer markets in Europe and China

Note: Capital expenditure: €42.6m in 9M FY19 versus €27.6m in 9M FY18, i.e. +€15.0m or +54.3% y/y.

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FX = currency effect resulting from translation of NAFTA revenue from USD to EUR. Avg. fx rate of 1.13\$/€ in 9M FY19 versus 1.20\$/€ in 9M FY18. ACQ = acquisition effect, contribution of the acquired General Aerospace to group's revenue and earnings in Q3 FY19. ORG = organic growth, i.e. growth excluding \$/€ currency translation effect (FX) and acquisition effect (ACQ). ¹ Adj. FCF = FCF before acquisitions, i.e. cash flow from operating activities plus cash flow from investing activities, excluding 'acquisition of assets and liabilities within business combination, net of cash acquired' (General Aerospace, Clevers and Piston). See appendix for further details.

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Agenda

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1. Results by region

2. 1. 1. 1. 1. 051.102.204

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Q3 FY2019 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. FX = currency effect resulting from translation of NAFTA revenue from USD to EUR. Avg. fx rate of 1.12\$/€ in Q3 FY19 versus 1.19\$/€ in Q3 FY18. ACQ = acquisition effect, contribution of the acquired General Aerospace to group's revenue and earnings in Q3 FY19. ORG = organic growth, i.e. growth excluding \$/€ currency translation effect (FX) and acquisition effect (ACQ). ¹ Billed-from view, without intersegment revenue.

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9M FY2019 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. FX = currency effect resulting from translation of NAFTA revenue from USD to EUR. Avg. fx rate of 1.13\$/€ in 9M FY19 versus 1.20\$/€ in 9M FY18. ACQ = acquisition effect, contribution of the acquired General Aerospace to group's revenue and earnings in Q3 FY19. ORG = organic growth, i.e. growth excluding \$/€ currency translation effect (FX) and acquisition effect (ACQ). ¹ Billed-from view, without intersegment revenue.

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Q3 FY2019 – Europe

• European light vehicle production in Q3 FY19 at 5.6m units, i.e. - 6.6% vs. Q3 FY18
• Europe's revenue decreased by €4.3m or 3.3% y/y (6.4% y/y excl. acquisition effect)
• Europe's automotive revenue continue to be impacted by weak automotive markets: Automotive Gas Spring - €3.0m or - 7.4% y/y (negative mix effects: vehicle body style and applications); Automotive Powerise - €5.0m or - 17.1% y/y
• Capital Goods revenue at €44.9m (vs. €44.8m in Q3 FY18); Vibration & Velocity Control +€3.6m or + 25.7% y/y (- 2.9% y/y excl. €4m acquisition effect)
• Adj. EBIT margin at 14.9% (vs. 15.0% in Q3 FY18)

Note: Stabilus fiscal year-end is September.

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ACQ = acquisition effect, contribution of the acquired General Aerospace to group's revenue and earnings in Q3 FY19. ORG = organic growth, i.e. growth excluding \$/€ currency translation effect (FX) and acquisition effect (ACQ). ¹ External revenue only.

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Q3 FY2019 – NAFTA

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• NAFTA's light vehicle production in Q3 FY19 at 4.3m units, i.e. - 2.1% vs. Q3 FY18
• NAFTA's revenue + 1.7% y/y (- 4.2% y/y excluding the \$/€ currency translation effect)
• NAFTA's revenue development in Q3 FY19: Automotive Gas Spring + 4.7% y/y (- 1.1% excl. currency effect); Automotive Powerise - 6.3% y/y (- 11.6% y/y excl. currency effect); Capital Goods + 15.3% y/y (+ 8.3% y/y excl. currency effect); Vibration & Velocity Control + 1.0% (- 4.9% y/y excl. currency effect)
• Adj. EBIT margin up by 1pp to 17.1%: positive mix from more industrial business (vs. automotive)

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 1.12\$/€ in Q3 FY19 versus 1.19\$/€ in Q3 FY18. ACQ = acquisition effect, contribution of the acquired General Aerospace to group's revenue and earnings in Q3 FY19. ORG = organic growth, i.e. growth excluding \$/€ currency translation effect (FX) and acquisition effect (ACQ).

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Q3 FY2019 – Asia / Pacific and RoW

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

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• Asia/Pacific and RoW's light vehicle production in Q3 FY19 at 12.4m units, i.e. - 9.6% vs. Q3 FY18 (China - 16.2%, Japan/Korea + 4.6%, South America - 1.7%)
• Asia/Pacific and RoW's revenue decreased by 17.5% or €5.7m y/y
• Revenue development continue to be impacted by weak markets in China: Automotive Gas Spring - €2.7m or - 13.0% y/y; Automotive Powerise - €2.8m or - 39.4% y/y; Capital Goods - €0.3m or - 9.1%; Vibration & Velocity Control + €0.2m or + 15.4% y/y
• Adj. EBIT margin decreased from 18.2% in Q3 FY18 to 10.8% in Q3 FY19, due to lower revenue but undiminished overhead structure: keeping and strengthening Stabilus market presence in China remains part of our long-term strategy

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Agenda

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1. Results by market

2. 6.

Q3 FY2019 revenue growth – by market / business (y-o-y)

Note: Stabilus fiscal year-end is September.

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¹Industrial including Capital Goods and Vibration & Velocity Control revenue. FX = currency effect resulting from translation of NAFTA revenue from USD to EUR. Avg. fx rate of 1.12\$/€ in Q3 FY19 versus 1.19\$/€ in Q3 FY18. ACQ = acquisition effect, contribution of the acquired General Aerospace to group's revenue and earnings in Q3 FY19. ORG = organic growth, i.e. growth excluding \$/€ currency translation effect (FX) and acquisition effect (ACQ). Numbers rounded to one decimal. Due to rounding, numbers presented may not add up precisely to the totals provided.

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9M FY2019 revenue growth – by market / business (y-o-y)

Note: Stabilus fiscal year-end is September.

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¹Industrial including Capital Goods and Vibration & Velocity Control revenue. FX = currency effect resulting from translation of NAFTA revenue from USD to EUR. Avg. fx rate of 1.13\$/€ in 9M FY19 versus 1.20\$/€ in 9M FY18. ACQ = acquisition effect, contribution of the acquired General Aerospace to group's revenue and earnings in Q3 FY19. ORG = organic growth, i.e. growth excluding \$/€ currency translation effect (FX) and acquisition effect (ACQ). Numbers rounded to one decimal. Due to rounding, numbers presented may not add up precisely to the totals provided.

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Q3 FY2019 revenue growth – Automotive business (y-o-y)

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• Global light vehicle production in Q3 FY19 at 22.3m units, i.e. - 7.5% vs. Q3 FY18
• Automotive revenue 9.1% y/y (- 11.3% without \$/€ currency translation effect) due to weak production in Europe and China
• Automotive Gas Spring revenue 5.1% y/y (- 6.8% without \$/€ currency translation effect, i.e. 70bps better than global light vehicle production)
• Powerise revenue 14.1% y/y (- 16.8% y/y without \$/€ currency translation effect): higher share of single- vs. dual-drive Powerise platforms and weaker demand in China

Note: Stabilus fiscal year-end is September. FX = currency effect resulting from translation of NAFTA revenue from USD to EUR. Avg. fx rate of 1.12\$/€ in Q3 FY19 versus 1.19\$/€ in Q3 FY18. ACQ = acquisition effect, contribution of the acquired General Aerospace to group's revenue and earnings in Q3 FY19. ORG = organic growth, i.e. growth excluding \$/€ currency translation effect (FX) and acquisition effect (ACQ). Numbers rounded to one decimal. Due to rounding, numbers presented may not add up precisely to the totals provided.

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Q3 FY2019 revenue growth – Industrial business (y-o-y)

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• From Oct 1, 2018 Commercial Furniture is part of Capital Goods business unit to better reflect customer demand for a broad product portfolio and to further increase overhead efficiency
• Industrial revenue increased by 6.7% (0.3% organically)
• Capital Goods + 3.3% (+ 1.6% organically), Vibration & Velocity Control + 15.2% (- 2.7% organically, plus €4m acquisitions)
• Growth in the segments solar dampers, production and construction technology, medical was partly offset by weaker business with distributors and lower revenues in the segments independent aftermarket, office furniture and agricultural machinery

Note: Stabilus fiscal year-end is September. FX = currency effect resulting from translation of NAFTA revenue from USD to EUR. Avg. fx rate of 1.12\$/€ in Q3 FY19 versus 1.19\$/€ in Q3 FY18. ACQ = acquisition effect, contribution of the acquired General Aerospace to group's revenue and earnings in Q3 FY19. ORG = organic growth, i.e. growth excluding \$/€ currency translation effect (FX) and acquisition effect (ACQ). Numbers rounded to one decimal. Due to rounding, numbers presented may not add up precisely to the totals provided.

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Agenda

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1. Outlook

6.

Outlook

	FY2018 Actual	FY2019 Guidance
		€ million	percent
Revenue	€962.6m	€950m – €960m	~ (1)% – 0% y/y (c. + 2% FX, c. + 1% ACQ, c. (4)% – (3)% ORG)
Adj. EBIT margin	15.5%		~ 15%

Comments

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• FY2019 revenue expected to be between €950m and €960m in line with current market expectations
• FY2019 adj. EBIT margin forecast at c. 15%

Note: Stabilus fiscal year-end is September. FX = currency effect resulting from translation of NAFTA revenue from USD to EUR. ACQ = acquisition effect, contribution of the acquired entities to group's revenue and earnings. ORG = organic growth, i.e. growth excluding \$/€ currency translation effect (FX) and acquisition effect (ACQ).

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Agenda

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6. Appendix

Revenue by region and customer market (3M ended June 30, 2019)

External revenue (€m)
		Q3 FY2018 Actual	Q3 FY2019 Actual	Change	% change
Automotive Gas Spring		40.8	37.8	(3.0)	(7.4)%
Automotive Powerise		29.2	24.2	(5.0)	(17.1)%
Industrial / Capital Goods		44.8	44.9	0.1	0.2%
Vibration & Velocity Control2		14.0	17.6	3.6	25.7%
Europe		128.8	124.5	(4.3)	(3.3)%
Automotive Gas Spring		27.6	28.9	1.3	4.7%
Automotive Powerise	FX effect: 5.7% y/y	35.2	33.0	(2.2)	(6.3)%
Industrial / Capital Goods	Q3 FY18: 1.1923\$/€ Q3 FY19: 1.1238\$/€	15.7	18.1	2.4	15.3%
Vibration & Velocity Control		10.3	10.4	0.1	1.0%
NAFTA1		88.9	90.4	1.5	1.7%
Automotive Gas Spring		20.7	18.0	(2.7)	(13.0)%
Automotive Powerise		7.1	4.3	(2.8)	(39.4)%
Industrial / Capital Goods		3.3	3.0	(0.3)	(9.1)%
Vibration & Velocity Control		1.3	1.5	0.2	15.4%
Asia / Pacific and RoW		32.5	26.8	(5.7)	(17.5)%
Total Automotive Gas Spring		89.1	84.6	(4.5)	(5.1)%
Total Automotive Powerise		71.6	61.5	(10.1)	(14.1)%
Total Industrial / Capital Goods		63.9	66.0	2.1	3.3%
Total Vibration & Velocity Control2		25.6	29.5	3.9	15.2%
Total		250.2	241.6	(8.6)	(3.4)%

Note: ¹ NAFTA Q3 FY19 revenue includes currency effect of €5.2m, resulting from translation of NAFTA revenue from USD to EUR. Avg. fx rate of 1.12\$/€ in Q3 FY19 versus 1.19\$/€ in Q3 FY18. ² Europe's Vibration & Velocity Control revenue includes €4.0m revenue of General Aerospace. Numbers rounded to one decimal. Due to rounding, numbers presented may not add up precisely to the totals provided.

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Revenue by region and customer market (9M ended June 30, 2019)

External revenue (€m)
		9M FY2018 Actual	9M FY2019 Actual	Change	% change
Automotive Gas Spring		119.7	111.6	(8.1)	(6.8)%
Automotive Powerise		83.5	73.4	(10.1)	(12.1)%
Industrial / Capital Goods		132.4	133.6	1.2	0.9%
Vibration & Velocity Control2		41.3	44.4	3.1	7.5%
Europe		376.9	363.0	(13.9)	(3.7)%
Automotive Gas Spring		79.3	84.2	4.9	6.2%
Automotive Powerise	FX effect: 5.5% y/y	103.3	97.5	(5.8)	(5.6)%
Industrial / Capital Goods	9M FY18: 1.1998\$/€ 9M FY19: 1.1336\$/€	49.3	50.2	0.9	1.8%
Vibration & Velocity Control		29.9	30.6	0.7	2.3%
NAFTA1		261.9	262.5	0.6	0.2%
Automotive Gas Spring		60.8	54.4	(6.4)	(10.5)%
Automotive Powerise		17.0	12.7	(4.3)	(25.3)%
Industrial / Capital Goods		9.3	8.6	(0.7)	(7.5)%
Vibration & Velocity Control		5.8	4.5	(1.3)	(22.4)%
Asia / Pacific and RoW		92.9	80.2	(12.7)	(13.7)%
Total Automotive Gas Spring		259.8	250.1	(9.7)	(3.7)%
Total Automotive Powerise		203.9	183.6	(20.3)	(10.0)%
Total Industrial / Capital Goods		191.0	192.5	1.5	0.8%
Total Vibration & Velocity Control2		77.0	79.5	2.5	3.2%
Total		731.7	705.7	(26.0)	(3.6)%

Note: ¹ NAFTA 9M FY19 revenue includes currency effect of €14.5m, resulting from translation of NAFTA revenue from USD to EUR. Avg. fx rate of 1.13\$/€ in 9M FY19 versus 1.20\$/€ in 9M FY18. ² Europe's Vibration & Velocity Control revenue includes €4.0m revenue of General Aerospace. Numbers rounded to one decimal. Due to rounding, numbers presented may not add up precisely to the totals provided.

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P&L overview (3M ended June 30, 2019)

P&L (€m)
	Q3 FY2018 Actual	Q3 FY2019 Actual	Change	% change
Revenue	250.2	241.6	(8.6)	(3.4)%
COGS	(177.0)	(172.8)	4.2	(2.4)%
Gross Profit	73.2	68.9	(4.3)	(5.9)%
% margin	29.3%	28.5%
R&D	(10.1)	(9.2)	0.9	(8.9)%
S&M	(20.4)	(21.0)	(0.6)	2.9%
G&A	(9.4)	(8.3)	1.1	(11.7)%
Other income/expenses	1.8	(0.8)	(2.6)	<(100.0)%
EBIT	35.1	29.5	(5.6)	(16.0)%
% margin	14.0%	12.2%
Adjustments1	4.4	7.6	3.2	72.7%
Adj. EBIT1	39.5	37.1	(2.4)	(6.1)%
% margin	15.8%	15.4%

Advisory costs (M&A) Total adjustments1	-	0.2
EPA / Colmar provision	-	1.5
PPA adjustments (2019 PPA)	-	1.4
PPA adjustments (2016 PPA)	2.1	2.1
PPA adjustments (2010 PPA)	2.3	2.3

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

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P&L overview (9M ended June 30, 2019)

P&L (€m)
	9M FY2018 Actual	9M FY2019 Actual	Change	% change
Revenue	731.7	705.7	(26.0)	(3.6)%
COGS	(512.7)	(503.0)	9.7	(1.9)%
Gross Profit	219.0	202.6	(16.4)	(7.5)%
% margin	29.9%	28.7%
R&D	(31.8)	(28.9)	2.9	(9.1)%
S&M	(61.2)	(62.3)	(1.1)	1.8%
G&A	(28.8)	(26.3)	2.5	(8.7)%
Other income/expenses	2.4	1.5	(0.9)	(37.5)%
EBIT	99.6	86.7	(12.9)	(13.0)%
% margin	13.6%	12.3%
Adjustments1	13.1	16.8	3.7	28.2%
Adj. EBIT1	112.7	103.5	(9.2)	(8.2)%
% margin	15.4%	14.7%

Total adjustments1	13.1	16.8
Advisory costs (M&A)	-	0.7
EPA / Colmar provision	-	1.5
PPA adjustments (2019 PPA)	-	1.4
PPA adjustments (2016 PPA)	6.1	6.3
PPA adjustments (2010 PPA)	7.0	7.0

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

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Balance sheet overview

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Balance sheet (€m) Sept 2018 Actual June 2019 Actual Change % change Property, plant and equipm. 179.2 194.0 14.8 8.3% Goodwill 195.2 212.0 16.8 8.6% Other intangible assets 247.2 279.5 32.3 13.1% Inventories 90.8 94.0 3.2 3.5% Trade receivables 111.3 122.6 11.3 10.2% Other assets 43.7 41.0 (2.7) (6.2)% Cash 143.0 126.2 (16.8) (11.7)% Total assets 1,010.4 1,069.3 58.9 5.8% Equity incl. minorities 426.5 470.8 44.3 10.4% Debt (incl. accrued interest) 320.0 328.7 8.7 2.7% Pension plans 52.2 55.4 3.2 6.1% Deferred tax liabilities 47.8 57.4 9.6 20.1% Trade accounts payable 83.2 76.2 (7.0) (8.4)% Other liabilities 80.7 80.8 0.1 0.1% Total equity and liabilities 1,010.4 1,069.3 58.9 5.8% Net leverage ratio¹ 1.1x 1.2x

Key highlights

• Assets and liabilities of acquired entities General Aerospace, Clevers and Piston are included in the group's balance sheet as of end June 2019
• PPE, goodwill, other intangible assets, receivables, debt (€5.1m bank loans of acquired entities), deferred taxes increased as a consequence of the acquisitions
• Cash balance decreased as a consequence of the acquisitions (purchase price payment) and the €24.7m dividend payment in Feb 19
• Pension liability increased by €3.2m due to lower discount rate (June: 1.48% vs. Sept: 2.00%)
• Equity up by €44.3m, primarily due to the profit generated in first 9M of FY19

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-twelvemonth 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.

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Cash flow overview and free cash flow (3M ended June 30, 2019)

Cash Flow Statement (€m)
	Q3 FY2018 Actual	Q3 FY2019 Actual	Change	% change
Cash flow from operating activities	48.6	44.2	(4.4)	(9.1)%
Cash flow from investing activities	(8.2)	(52.1)	(43.9)	>100.0%
Cash flow from financing activities	(1.0)	(1.2)	(0.2)	20.0%
Net increase / (decrease) in cash	39.4	(9.1)	(48.5)	<(100.0)%
Effect of movements in exchange rates	0.8	(1.2)	(2.0)	<(100.0)%
Cash as of beginning of the period	75.8	136.5	60.7	80.1%
Cash as of end of the period	115.8	126.2	10.4	9.0%

Free Cash Flow (€m)

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	Q3 FY2018 Actual (a)	Q3 FY2019 Actual (b)	Q3 FY2019 Adjusted1 (c)	Change (c)-(a)	% change [(c)-(a)] / (a)
Cash flow from operating activities	48.6	44.2	44.2	(4.4)	(9.1)%
Cash flow from investing activities	(8.2)	(52.1)	(12.8)	(4.6)	56.1%
Free cash flow	40.4	(7.9)	31.4	(9.0)	(22.3)%

Note: ¹ Adjusted = excluding 'acquisition of assets and liabilities within business combination, net of cash acquired' (General Aerospace, Clevers and Piston). Numbers rounded to one decimal. Due to rounding, numbers presented may not add up precisely to the totals provided.

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Cash flow overview and free cash flow (9M ended June 30, 2019)

Cash Flow Statement (€m)
	9M FY2018 Actual	9M FY2019 Actual	Change	% change
Cash flow from operating activities	98.9	92.3	(6.6)	(6.7)%
Cash flow from investing activities	(27.0)	(81.2)	(54.2)	>100.0%
Cash flow from financing activities	(24.0)	(28.4)	(4.4)	18.3%
Net increase / (decrease) in cash	47.9	(17.3)	(65.2)	<(100.0)%
Effect of movements in exchange rates	(0.1)	0.5	0.6	<(100.0)%
Cash as of beginning of the period	68.1	143.0	74.9	>100.0%
Cash as of end of the period	115.8	126.2	10.4	9.0%

Free Cash Flow (€m)

	9M FY2018 Actual (a)	9M FY2019 Actual (b)	9M FY2019 Adjusted1 (c)	Change (c)-(a)	% change [(c)-(a)] / (a)
Cash flow from operating activities	98.9	92.3	92.3	(6.6)	(6.7)%
Cash flow from investing activities	(27.0)	(81.2)	(41.9)	(14.9)	55.2%
Free cash flow	71.9	11.1	50.4	(21.5)	(29.9)%

Comments

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Cash flow from investing activities in 9M FY19 includes €4.2m payment for the additional Hahn building

Cash flow from financing activities in 9M FY19 includes €24.7m dividend payment (vs. €19.8m in 9M FY18)

Note: ¹ Adjusted = excluding 'acquisition of assets and liabilities within business combination, net of cash acquired' (General Aerospace, Clevers and Piston). Numbers rounded to one decimal. Due to rounding, numbers presented may not add up precisely to the totals provided.

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www.stabilus.com

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