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Stabilus SE Investor Presentation 2020
6214_ip_2020-02-03_fe00a7b1-8875-4b83-8f5c-98eee13b3b6e.pdf
Investor Presentation
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051.102.204
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Q1 FY2020 RESULTS
February 3, 2020
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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.
Numbers were rounded to one decimal. Due to rounding, numbers presented may not add up precisely to the totals provided.
051.102.204
153.204.255 000.102.204
036.083.161
255.153.000
150.150.150
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235.185.052
227.230.232
149.154.162
083.086.090
021.067.132
025.057.106
-
- Operational highlights
-
- Financial highlights
-
- Results by operating segment
-
- Outlook
-
- Appendix
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- Operational highlights
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Organizational adjustments from FY2020 on
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Reflecting Stabilus' growth profile and expanding footprint, starting with FY2020, the names and composition of Stabilus' operating segments will be changed from Europe, NAFTA, Asia / Pacific and RoW to Europe, Middle East and Africa ("EMEA"), Americas, Asia-Pacific ("APAC"), i.e. there will be no Rest of World (RoW) subsegment anymore, Latin American market will be part of the Americas segment and the Middle East & Africa part of EMEA
To increase efficiency and effectiveness of customer access as well as to strengthen our focus on the industrial business, the business units Industrial / Capital Goods and Vibration and Velocity Control will be integrated into one Industrial business unit. From FY2020 on, Stabilus business units are Automotive Gas Spring ("AGS"), Automotive Powerise ("APR") and Industrial ("IND")
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Rationale for integrating Capital Goods and Vibration & Velocity Control
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| Industrial business unit | Key reasons for establishing ONE Industrial BU | ||
|---|---|---|---|
| Finalize the integration of entities acquired in 2016 and 2019, i.e. ACE, Hahn Gasfedern, Fabreeka, Tech Products, General Aerospace, Clevers and Piston Gas Springs |
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| Capture all growth potentials in the regions by joint Industrial market approach |
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| Apply best fit of expert brand and business model according to target groups (all brands and business models will be kept and strengthened) |
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| Offer all products to all market segments |
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| Leverage available resources, competences and customer access to grow faster together |
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| Foster recognition and valuation by markets as Industrial motion control solutions provider |
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| + future Industrial acquisitions | Build a mature basis for further acquisitions in the Industrial segment |
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Increasing the share of direct sales in the independent aftermarket
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1.
2. Financial highlights
| 3. |
|---|
| 4. |
| 5. |
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Q1 FY2020 financial highlights
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| Revenue | Revenue at €231.4m (vs. €225.0m in Q1 FY19), + 2.8% y/y Acquisition effect: + 2.5% y/y, currency translation effect: + 1.6% y/y, organic growth: - 1.3% y/y |
|---|---|
| Adj. EBIT | Adj. EBIT at €30.0m (vs. €30.8m in Q1 FY19), - 2.6% y/y Adj. EBIT margin at 13.0% (vs. 13.7% in Q1 FY19) |
| Profit | Profit at €16.4m in Q1 FY20 (vs. €17.7m in Q1 FY19) Profit margin at 7.1% (vs. 7.9% in Q1 FY19) |
| Adj. FCF | Adj. FCF (i.e. FCF before acquisitions) = FCF: there were no payments for acquisitions in Q1 FY20 Adj. FCF at €7.8m (vs. €12.4m in Q1 FY19) |
| Net leverage ratio | Net leverage ratio at 1.0x (vs. 1.0x as of end FY19) Net financial debt at €184.3m (vs. €189.1m as of end FY19) |
| Outlook | FY2020 revenue and adj. EBIT guidance from November 2019 (i.e. €970m – €990m and c. 15%) unchanged Please refer to the outlook page of this presentation for further details |
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Q1 FY2020 – Key figures
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- Results by operating segment
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Q1 FY2020 – EMEA
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| Revenue (€m) | Comments | |||||
|---|---|---|---|---|---|---|
| y-o-y organically | 112.6 | y-o-y: (2.1)% | (6.3)% 110.2 |
Light vehicle production in the Europe, Middle East and Africa ("EMEA") region in Q1 FY20 at 5.6m units, i.e. - 6.0% vs. Q1 FY19 |
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| IND APR AGS |
52.6 24.6 35.4 Q1 FY19 |
54.2 23.7 32.3 Q1 FY20 |
EMEA's Q1 revenue decreased by €2.4m or 2.1% y/y, in spite of positive contribution from General Aerospace and Piston which were acquired in 2019: acquisition effect: +4.8% y/y, currency translation effect: - 0.6% y/y, organic growth: - 6.3% y/y |
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| Adj. EBIT (€m) | EMEA's Automotive Gas Spring ("AGS"; - 8.8% y/y) and Automotive Powerise ("APR"; - 3.7% y/y) revenue in Q1 FY20 |
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| % margin | 13.9% 15.6 |
12.3% 13.5 |
continues to be impacted by weak automotive markets Supported by the revenue from acquired entities, Industrial ("IND") revenue increased by €1.6m or 3.0% y/y; organic growth stood at - 7.0% y/y |
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| Q1 FY19 | Q1 FY20 | Adj. EBIT margin decreased by 160bp due to lower fixed cost absorption and one-off costs of c. €0.6m for outsourcing of certain logistics processes in Koblenz to an external service provider |
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Q1 FY2020 – AMERICAS
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Q1 FY2020 – APAC
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Q1 FY2020 – Revenue by business unit
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235.185.052
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149.154.162
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021.067.132
025.057.106
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255.153.000
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- Outlook
6.
Outlook
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| Guidance | Comments | ||
|---|---|---|---|
| FY2019 Actual |
FY2020 Guidance |
||
| Revenue | €951.3m | €970m – €990m ~ 2% – 4% y/y |
|
| Adj. EBIT margin | 15.0% | ~ 15% |
- Guidance published in November 2019: Based on light vehicle production forecast of 88.3m vehicles for FY2020 (i.e. 88.8m for CY2019, 89.0m for CY2020), outlook for FY2020 revenue and adj. EBIT margin is at €970m – €990m and c. 15%, respectively; this revenue corresponds to an annual revenue growth rate between 2% and 4% (0% y/y currency translation, c. 1% y/y acquisitions and c. 1% - 3% y/y organic growth)
- Light vehicle production forecast as of January 2020 is at 87.8m vehicles for FY2020 (i.e. 88.3m for CY2020), i.e. largely unchanged since November 2019
- Guidance unchanged vs. November 2019 guidance
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- Appendix
Revenue overview (3M ended Dec 31, 2019)
Revenue (€m)
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| Q1 FY2019 Actual |
Q1 FY2020 Actual |
Change | % change | Acquisition effect | Currency effect | Organic growth | |
|---|---|---|---|---|---|---|---|
| Automotive Gas Spring | 35.4 | 32.3 | (3.1) | (8.8)% | - | 0.0% | (8.8)% |
| Automotive Powerise | 24.6 | 23.7 | (0.9) | (3.7)% | - | (2.2)% | (1.5)% |
| Industrial | 52.6 | 54.2 | 1.6 | 3.0% | 10.2% | (0.2)% | (7.0)% |
| EMEA | 112.6 | 110.2 | (2.4) | (2.1)% | 4.8% | (0.6)% | (6.3)% |
| Automotive Gas Spring |
28.0 | 25.9 | (2.1) | (7.5)% | - | 3.3% | (10.8)% |
| Automotive Powerise |
32.5 | 33.1 | 0.6 | 1.8% | - | 5.9% | (4.1)% |
| Industrial | 24.9 | 31.4 | 6.5 | 26.1% | 1.1% | 3.9% | 21.1% |
| AMERICAS | 85.4 | 90.4 | 5.0 | 5.9% | 0.3% | 4.4% | 1.2% |
| Automotive Gas Spring | 18.0 | 19.8 | 1.8 | 10.0% | - | 1.4% | 8.6% |
| Automotive Powerise |
4.9 | 6.8 | 1.9 | 38.8% | - | 1.4% | 37.4% |
| Industrial | 4.1 | 4.2 | 0.1 | 2.4% | - | 0.8% | 1.6% |
| APAC | 27.0 | 30.8 | 3.8 | 14.1% | - | 1.3% | 12.8% |
| Total Automotive Gas Spring (AGS) | 81.4 | 77.9 | (3.5) | (4.3)% | - | 1.4% | (5.7)% |
| Total Automotive Powerise (APR) |
62.0 | 63.6 | 1.6 | 2.6% | - | 2.3% | 0.3% |
| Total Industrial (IND) | 81.6 | 89.9 | 8.3 | 10.2% | 6.9% | 1.1% | 2.2% |
| Total | 225.0 | 231.4 | 6.4 | 2.8% | 2.5% | 1.6% | (1.3)% |
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P&L overview (3M ended Dec 31, 2019)
P&L (€m)
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| Q1 FY2019 Actual |
Q1 FY2020 Actual |
Change | % change | ||
|---|---|---|---|---|---|
| Revenue | 225.0 | 231.4 | 6.4 | 2.8% | |
| Cost of sales |
(161.3) | (164.6) | (3.3) | 2.0% | |
| Gross Profit | 63.7 | 66.8 | 3.1 | 4.9% | |
| % margin | 28.3% | 28.9% | |||
| R&D expenses |
(9.8) | (10.5) | (0.7) | 7.1% | |
| Selling expenses |
(20.3) | (22.0) | (1.7) | 8.4% | |
| Administrative expenses |
(9.1) | (8.5) | 0.6 | (6.6)% | |
| Other income/expenses | 1.4 | (0.3) | (1.7) | <(100.0)% | |
| EBIT | 25.9 | 25.4 | (0.5) | (1.9)% | |
| % margin | 11.5% | 11.0% | |||
| Adjustments | 4.9 | 4.6 | (0.3) | (6.1)% | |
| Adj. EBIT | 30.8 | 30.0 | (0.8) | (2.6)% | |
| % margin | 13.7% | 13.0% |
| Total adjustments |
4.9 | 4.6 |
|---|---|---|
| Advisory costs (M&A) |
0.5 | - |
| PPA adjustments (2019 PPA) | - | 0.8 |
| PPA adjustments (2016 PPA) | 2.1 | 2.1 |
| PPA adjustments (2010 PPA) | 2.3 | 1.7 |
Comments
- Capitalized R&D expenses in Q1 FY20 at €3.9m (vs. €2.7m in Q1 FY19), reflecting finalization work at a supplier for a large project
- R&D headcount increased by 37 employees: from 363 in Q1 FY19 to 400 in Q1 FY20
- Increase in selling expenses results from acquired entities General Aerospace, Clevers and Piston which operate in industrial business with higher selling expenses ratio as well as comparative payroll inflation
- Administrative expenses y-o-y down €0.6m, reflecting nonrepeat acquisition advise costs in Q1 FY19 – cf. prior year's adjustments for advisory costs (M&A)
- IFRS 16 impact: Recognition of all leases in the balance sheet leads to depreciation (instead of leasing expenses) in the same functional costs and in similar magnitude, i.e. there is no significant impact from IFRS 16 on the functional costs; interest expense from leases amounted to €0.4m in Q1 FY20
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Balance sheet overview
Balance sheet (€m)
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| Sept 2019 Actual |
Dec 2019 Actual |
Change | % change | ||
|---|---|---|---|---|---|
| Property, plant and equipm. | 199.9 | 242.1 | 42.2 | 21.1% | |
| Goodwill | 214.8 | 212.6 | (2.2) | (1.0)% | |
| Other intangible assets | 276.2 | 270.1 | (6.1) | (2.2)% | |
| Inventories | 100.3 | 101.2 | 0.9 | 0.9% | |
| Trade receivables | 130.3 | 117.9 | (12.4) | (9.5)% | |
| Other assets | 38.7 | 42.0 | 3.3 | 8.5% | |
| Cash | 139.0 | 142.3 | 3.3 | 2.4% | |
| Total assets | 1,099.2 | 1,128.2 | 29.0 | 2.6% | |
| Equity incl. minorities | 499.6 | 511.0 | 11.4 | 2.3% | |
| Debt (incl. accrued interest) | 311.6 | 311.2 | (0.4) | (0.1)% | |
| Pension plans | 59.9 | 57.8 | (2.1) | (3.5)% | |
| Deferred tax liabilities | 55.9 | 55.0 | (0.9) | (1.6)% | |
| Trade accounts payable | 91.0 | 75.9 | (15.1) | (16.6)% | |
| Other liabilities | 81.2 | 117.3 | 36.1 | 44.5% | |
| Total equity and liabilities | 1,099.2 | 1,128.2 | 29.0 | 2.6% | |
| Net leverage ratio | 1.0x | 1.0x |
Comments
First time adoption of the IFRS 16, recognition of all leases in the balance sheet led to an increase of PPE and other liabilities by €43.7m
Decrease in other intangible assets by €6.1m is scheduled amortization
Net leverage ratio stable at 1.0x EBITDA
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Cash flow overview (3M ended Dec 31, 2019)
Cash Flow Statement (€m)
| Q1 FY2019 Actual |
Q1 FY2020 Actual |
Change | % change | |
|---|---|---|---|---|
| Cash flow from operating activities | 24.6 | 19.8 | (4.8) | (19.5)% |
| Cash flow from investing activities | (12.2) | (12.0) | 0.2 | (1.6)% |
| Cash flow from financing activities | (1.3) | (3.6) | (2.3) | >100.0% |
| Net increase / (decrease) in cash | 11.1 | 4.2 | (6.9) | (62.2)% |
| Effect of movements in exchange rates | 0.1 | (1.0) | (1.1) | <(100.0)% |
| Cash as of beginning of the period | 143.0 | 139.0 | (4.0) | (2.8)% |
| Cash as of end of the period | 154.3 | 142.3 | (12.0) | (7.8)% |
Adj. FCF (€m)
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| Q1 FY2019 Actual |
Q1 FY2020 Actual |
Change | % change | |
|---|---|---|---|---|
| Cash flow from operating activities | 24.6 | 19.8 | (4.8) | (19.5)% |
| Cash flow from investing activities | (12.2) | (12.0) | 0.1 | (1.6)% |
| Free cash flow | 12.4 | 7.8 | (4.6) | (37.1)% |
| Adjustments | - | - | - | n/a |
| Adj. FCF | 12.4 | 7.8 | (4.6) | (37.1)% |
Comments
- Year-on-year lower cash inflow from operating activities in Q1 FY20 primarily due to decreased trade accounts payable, partially off-set by reduction in trade accounts receivable
- Year-on-year higher cash outflow from financing activities in Q1 FY20 due to first time adoption of IFRS 16: payments for lease liabilities (€2.0m) and for interest on lease liabilities (€0.4m)
- IFRS 16 impact: no impact on net cash flow, positive effect on cash flow from operating activities (and consequently free cash flow) and negative effect on cash flow from financing activities of €2.4m
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Currency exchange rates overview (3M ended Dec 31, 2019)
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| Closing and average currency exchange rates | ||||||
|---|---|---|---|---|---|---|
| 1 EURO in | ISO code | Closing rate Dec 2018 |
Closing rate Dec 2019 |
Average rate Q1 FY2019 |
Average rate Q1 FY2020 |
Average rate % change |
| Australian dollar | AUD | 1.6220 | 1.5995 | 1.5896 | 1.6202 | 1.9% |
| Argentine peso |
ARS | 43.1299 | 67.2692 | 42.4205 | 65.6620 | 54.8% |
| Brazilian real | BRL | 4.4440 | 4.5157 | 4.3477 | 4.5604 | 4.9% |
| Chinese yuan (renminbi) | CNY | 7.8751 | 7.8205 | 7.8920 | 7.7998 | (1.2)% |
| South Korean won |
KRW | 1,277.9300 | 1,296.2800 | 1,286.3714 | 1,302.0115 | 1.2% |
| Mexican peso | MXP | 22.4921 | 21.2202 | 22.6300 | 21.3242 | (5.8)% |
| Romanian leu |
RON | 4.6635 | 4.7830 | 4.6601 | 4.7672 | 2.3% |
| Turkish lira | TRY | 6.0588 | 6.6843 | 6.2815 | 6.4155 | 2.1% |
| United States dollar | USD | 1.1450 | 1.1234 | 1.1412 | 1.1072 | (3.0)% |
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www.stabilus.com
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