Stabilus SE — Investor Presentation 2023

Jan 30, 2023

Q1 FY2023 RESULTS

JANUARY 30, 2023

¹ MOTION CONTROL

Stabilus SE (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.

AGENDA

OPERATIONAL UPDATE

FINANCIAL RESULTS

RESULTS BY OPERATING SEGMENT

OUTLOOK

5 APPENDIX

OPERATIONAL UPDATE

Solar panels at Stabilus plants in Germany and China Key highlights in Q1 FY23

• › Organic revenue growth of 14% y/y in Q1 FY23
• › Strong business in Americas and APAC with organic revenue growth rates of 23% and 18% y/y, respectively
• › Organic growth rate of 32% in Automotive Powerise in Q1 FY23 reflects high end customer demand for automated tailgates
• › We continue to diversify our energy sources: In addition to the solar panels on the roof of our plant in Pinghu, China, we also installed them on the roof of our plant in Koblenz, Germany; we will further extend these photovoltaic systems in the next years

FINANCIAL RESULTS

Revenue	› Revenue at €290.7m (vs. €243.7m in Q1 FY22), + €47.0m or + 19.3% y/y › Acquisition effect: 0% y/y, currency translation effect: 5.4% y/y, organic growth: 13.9% y/y (incl. impacts on pricing)
Adj. EBIT	› Adj. EBIT at €32.6m (vs. €29.3m in Q1 FY22), + 11.3% y/y › Adj. EBIT margin at 11.2% (vs. 12.0% in Q1 FY22), impacted by higher cost inflation in EMEA
Profit	› Profit at €15.5m (vs. €18.0m in Q1 FY22), - 13.9% y/y › Profit margin at 5.3% (vs. 7.4% in Q1 FY22)
Adj. FCF	› Adj. FCF (i.e., FCF before acquisitions) at €32.7m (vs. €7.4m in Q1 FY22), + 341.9% y/y, supported by positive development of net working capital
Net leverage ratio	› Net leverage ratio at 0.3x (vs. 0.4x as of end FY2022 and 0.7x the end of Q1 FY22) › Net financial debt at €63.5m (vs. €88.4m as of end FY2022 and 124.1m at the end of Q1 FY22)
Outlook	› FY2023 forecast: revenue of €1.1bn - €1.2bn with an adjusted EBIT margin of 13% - 14%

KEY FIGURES

Q1 FY2023

RESULTS BY OPERATING SEGMENT

9

Revenue (€m) Comments

Adj. EBIT (€m)

• › Light vehicle production (LVP) in Europe, Middle East and Africa in Q1 FY23 at 4.6m units, + 1.5% vs. Q1 FY22
• › EMEA's revenue up by €3.7m or 3.5% y/y to €109.2m in Q1 FY23, organically + 4.3% y/y (incl. impacts on pricing)
• › Automotive Gas Spring revenue + 0.8% y/y and Automotive Powerise + 21.7% y/y organically; Automotive Powerise growth was supported by higher production of Powerise units for, e.g., BMW: 4-series, 5-series, iX (EV); Ford Puma; Geely XC40 Coupé; Hyundai Kia Sportage; Tesla Model Y (EV); VW Group: Audi A5, A6; VW: Arteon, Passat, T7
• › Industrial revenue down by €1.4m or 2.4%y/y, organic change at - 0.6% y/y, due to the softer Health, Recreation & Furniture (HRF) business
• › Adj. EBIT margin decreased to 4.8% in Q1 FY23, as a result of material, energy and labor cost inflation, and phasing of compensation by customers

AMERICAS Q1 FY2023

Revenue (€m) Comments

Adj. EBIT (€m)

• › Light vehicle production (LVP) in Americas in Q1 FY23 at 4.3m units, + 7.2% vs. Q1 FY22
• › Americas' revenue up by €32.0m or 41.5% y/y, currency translation effect at 18.3%, organic growth at 23.2% y/y (incl. impacts on pricing)
• › Automotive Gas Spring revenue up by 4.7% y/y and Automotive Powerise revenue up by 29.9% y/y organically; Automotive Powerise growth was driven by higher production of Powerise units for, e.g., Ford: Expedition, Navigator; GM: Chevrolet Equinox, Cadillac XT4, XT6, Hyundai Kia Sorento; Lucid Air (EV); Rivian R1T (EV); Stellantis: Jeep Grand Cherokee; Tesla: Model X, Y (EVs); VW Group: Audi Q5, Q5 Sportsback, VW Atlas
• › Industrial revenue increased by €12.6m or 47.0% y/y, organic growth at + 31.8%y/y, as a result of strong growth in all industrial market segments, particularly in Energy, Construction, Industrial Machinery & Automation (ECIMA)
• › Adj. EBIT margin recovered to 11.0% in Q1 FY23, supported by strong revenue growth and stringent cost management; Q1 of the previous FY was particularly impacted by high labor cost inflation (incl. higher costs for healthcare)

Revenue (€m) Comments

Adj. EBIT (€m)

• › Light vehicle production (LVP) in Asia-Pacific in Q1 FY23 at 12.6m units, on the same level as in Q1 FY22
• › APAC's revenue up by €11.2m or 18.3% to €72.3m in Q1 FY23, currency translation effect at - 0.1%, organic growth at 18.4% y/y (incl. impacts on pricing)
• › Organic growth in Automotive Gas Spring + 2.7% y/y and in Automotive Powerise + 42.2% y/y; Automotive Powerise growth was driven by higher production for, e.g., Geely Zeekr 001 (EV); Hyundai: Genesis G90, Genesis GV60 (EV), Ioniq 5 (EV), Ioniq 6 (EV), Kia EV6 (EV), K8, Niro; SAIC: Marvel X (EV); Tesla: Model Y (EV); Toyota: Sienna, Corolla Cross, Harrier; VW: ID. Roomzz (EV), Teramont
• › Industrial revenue down by €1m to €5.2m in Q1 FY23, as a result of softer business in market segments Distributors, Independent Aftermarket, E-commerce (DIAMEC) and Health, Recreation & Furniture (HRF)
• › Adj. EBIT margin of 21.3% in Q1 FY23, well above the group's average, and 20bp above the Q1 FY22 level

REVENUE BY BUSINESS UNIT

Q1 FY2023

Q1 FY2023

Distributors, Independent Aftermarket, E-commerce (DIAMEC) Mobility (M) Healthcare, Recreation & Furniture (HRF)

Energy, Construction, Industrial Machinery & Automation (ECIMA)

› Industrial revenue at €100.8m, up by €10.3m or 11.4% y/y

• › The growth in industrial business was primarily driven by market segments Energy, Construction, Industrial Machinery & Automation (ECIMA), Mobility and Distributors, Independent Aftermarket, E-commerce (DIAMEC), partly offset by soft business development in Healthcare, Recreation & Furniture (HRF)
• › As a result, the revenue share of ECIMA has increased from 17% of total industrial revenue in Q1 FY22 to 23% in Q1 FY23, and the revenue share of HRF and DIAMEC has decreased to 12% (vs. 19% in Q1 FY22) and 37% (vs. 39% in Q1 FY22), respectively; the revenue share of Mobility market segment in Q1 FY23 remained unchanged y/y, at 28% (vs. 28% in Q1 FY22)

OUTLOOK

Guidance				Comments
FY2022 Actual		FY2023 Guidance	›	Global light vehicle production (LVP) expected to grow by c. 3%
Revenue	€1,116.3m	€1.1bn - €1.2bn	›	y/y in FY2023 (Oct 2022 - Sept 2023): 83.7m in FY2023 vs. 81.6m in FY2022 (IHS Markit, January 2023) The revenue and margin expectations reflect the higher uncertainty, as a result of the current macroeconomic and
Adj. EBIT margin	14.0%	13% - 14%	›	geopolitical situation as well as the post-lockdown situation in China We expect the earnings in FY2023 to be back-end loaded and
				confirm our FY2023 guidance which was released in November 2022
			›	Based on our strategic pyramid, we continue to pursue our long term strategy, focusing on profitable and sustainable growth, customer and employee satisfaction, innovation and sustainability

APPENDIX

REVENUE AND ADJUSTED EBIT MARGIN BY QUARTER

Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23

REVENUE OVERVIEW THREE MONTHS ENDED DECEMBER 31, 2022

Revenue (€m)

Actual	Actual	Change	% change	Acquisition effect	Currency effect	Organic growth
26.0	26.2	0.2	0.8%	-	0.0%	0.8%
21.9	26.8	4.9	22.4%	-	0.7%	21.7%
57.6	56.2	(1.4)	(2.4)%	-	(1.8)%	(0.6)%
105.5	109.2	3.7	3.5%	-	(0.8)%	4.3%
23.0	27.7	4.7	20.4%	-	15.7%	4.7%
27.4	42.0	14.6	53.3%	-	23.4%	29.9%
26.8	39.4	12.6	47.0%	-	15.2%	31.8%
77.2	109.2	32.0	41.5%	-	18.3%	23.2%
27.5	28.2	0.7	2.5%	-	(0.2)%	2.7%
27.4	39.0	11.6	42.3%	-	0.1%	42.2%
6.2	5.2	(1.0)	(16.1)%	-	(0.4)%	(15.7)%
61.1	72.3	11.2	18.3%	-	(0.1)%	18.4%
76.5	82.1	5.6	7.3%	-	4.6%	2.7%
76.7	107.8	31.1	40.5%	-	8.6%	31.9%
90.5	100.8	10.3	11.4%	-	3.3%	8.1%
243.7	290.7	47.0	19.3%	-	5.4%	13.9%
	Q1 FY2022	Q1 FY2023

P&L OVERVIEW

THREE MONTHS ENDED DECEMBER 31, 2022

P&L (€m)

	Q1 FY2022 Actual	Q1 FY2023 Actual	Change	% change
Revenue	243.7	290.7	47.0	19.3%
Cost of sales	(178.1)	(214.7)	(36.6)	20.6%
Gross Profit	65.7	75.9	10.2	15.5%
% margin	27.0%	26.1%
R&D expenses	(11.9)	(12.9)	(1.0)	8.4%
Selling expenses	(20.2)	(23.8)	(3.6)	17.8%
Administrative expenses	(9.9)	(10.5)	(0.6)	6.1%
Other income/expenses	2.3	0.4	(1.9)	(82.6)%
EBIT	25.9	29.1	3.2	12.4%
% margin	10.6%	10.0%
Finance income/costs	(0.8)	(7.9)	(7.1)	>100.0%
EBT	25.2	21.1	(4.1)	(16.3)%
% margin	10.3%	7.3%
Income tax	(7.2)	(5.6)	1.6	(22.2)%
Profit	18.0	15.5	(2.5)	(13.9)%
% margin	7.4%	5.3%
EPS in €	0.71	0.61	(0.10)	(14.1)%

Comments

• › Revenue at €290.7m in Q1 FY23 vs. €243.7m in Q1 FY22, + 19.3% y/y
• › Gross profit margin 90bp lower y/y, as a consequence of material, labor and energy cost inflation, and phasing of compensation by customers
• › Net other income down by €1.9m y/y, primarily due to €1.8m net fx loss in Q2 FY23 vs. €0.8m net fx gain Q1 FY22; the Q1 F23 income includes €0.3m income from the equity-accounted investment in Cultraro
• › Net finance costs up by €7.1m y/y, mainly due to €6.8m net fx loss in Q1 FY23 vs. €1.3m net fx gain in Q1 FY22

EBIT ADJUSTMENTS THREE MONTHS ENDED DECEMBER 31, 2022

Adjusted EBIT (€m)

	Q1 FY2022 Actual	Q1 FY2023 Actual	Change	% change
EBIT	25.9	29.1	3.2	12.4%
PPA adj. - D&A (2010 PPA)	1.2	1.2	-	0.0%
PPA adj. - D&A (2016 PPA)	2.1	2.2	0.1	4.8%
PPA adj. - D&A (2019 PPA)	0.2	0.2	-	0.0%
Total adjustments	3.4	3.5	0.1	2.9%
Adjusted EBIT	29.3	32.6	3.3	11.3%
% margin	12.0%	11.2%

Comments

› PPA adjustments comprise depreciation and amortization of step-ups and intangible assets acquired during 2010, 2016 and 2019 acquisitions

BALANCE SHEET OVERVIEW

DECEMBER 31, 2022

Balance sheet (€m)

	Sept 2022 Actual	Dec 2022 Actual	Change	% change
Property, plant and equipm.	228.9	220.3	(8.6)	(3.8)%
Goodwill	216.8	210.5	(6.3)	(2.9)%
Other intangible assets	216.9	209.4	(7.5)	(3.5)%
Other investments	23.1	23.0	(0.1)	(0.4)%
Inventories	167.5	169.6	2.1	1.3%
Trade receivables	197.7	163.0	(34.7)	(17.6)%
Other assets	47.3	46.9	(0.4)	(0.8)%
Cash	168.4	192.5	24.1	14.3%
Total assets	1,266.6	1,235.1	(31.5)	(2.5)%
Equity incl. minorities	669.7	657.4	(12.3)	(1.8)%
Debt (incl. accrued interest)	256.8	256.0	(0.8)	(0.3)%
Pension plans	37.2	40.1	2.9	7.8%
Deferred tax liabilities	54.4	49.5	(4.9)	(9.0)%
Trade payables	114.1	104.5	(9.6)	(8.4)%
Other liabilities	134.4	127.6	(6.8)	(5.1)%
Total equity and liabilities	1,266.6	1,235.1	(31.5)	(2.5)%
Net leverage ratio	0.4x	0.3x

Comments

› Other investments comprise Company's interest in Synapticon (12% of total shares at the time of acquisition) and Cultraro (32% of total shares) which were acquired in FY2022

› Trade receivables decreased by €34.7m (softer business in Dec 2022) and the cash balance increased by €24.1m

CASH FLOW OVERVIEW THREE MONTHS ENDED DECEMBER 31, 2022

Cash Flow Statement (€m)

	Q1 FY2022 Actual	Q1 FY2023 Actual	Change	% change
Cash flow from operating activities	16.7	45.1	28.4	>100.0%
Cash flow from investing activities	(31.9)	(12.7)	19.2	(60.2)%
Cash flow from financing activities	(3.4)	(3.1)	0.3	(8.8)%
Net increase / (decrease) in cash	(18.5)	29.3	47.8	<(100.0)%
Effect of movements in exchange rates	1.2	(5.2)	(6.4)	<(100.0)%
Cash as of beginning of the period	193.2	168.4	(24.8)	(12.8)%
Cash as of end of the period	175.9	192.5	16.6	9.4%

Adj. FCF (€m)

	Q1 FY2022 Actual	Q1 FY2023 Actual	Change	% change
Cash flow from operating activities	16.7	45.1	28.4	>100.0%
Cash flow from investing activities	(31.9)	(12.7)	19.2	(60.2)%
Free cash flow	(15.2)	32.4	47.6	<(100.0)%
Adjustments	22.6	0.3	(22.3)	(98.7)%
Adj. FCF	7.4	32.7	25.3	>100.0%

Comments

• › Cash inflow from operating activities increased substantially (€45.1m in Q1 FY23 vs. €16.7m in Q1 FY22), as a consequence of lower net working capital
• › Cash outflow for investing activities down by €19.2m y/y: the Q1 of the previous year comprised €22.6m payment for the acquisition of shares in Synapticon and Cultraro; capex in Q1 FY23 at €12.9m (vs. €9.4m in Q1 FY22), + 37.2% y/y
• › Cash outflow for financing activities slightly (0.3m) down y/y
• › Due to substantially higher cash inflow from operating activities and noticeably lower cash outflow for investing activities, FCF improved by €47.6m y/y; adjusted FCF (i.e., FCF before acquisitions) increased by €25.3m y/y

CURRENCY EXCHANGE RATES

THREE MONTHS ENDED DECEMBER 31, 2022

Closing and average currency exchange rates

1 EURO in	ISO code	Closing rate December 2021	Closing rate December 2022	Average rate Q1 FY2022	Average rate Q1 FY2023	Average rate % change
Australian dollar	AUD	1.5615	1.5693	1.5689	1.5538	(1.0)%
Argentine peso	ARS	116.4913	188.5023	114.8426	165.6218	44.2%
Brazilian real	BRL	6.3101	5.6386	6.3826	5.3698	(15.9)%
Chinese yuan (renminbi)	CNY	7.1947	7.3582	7.3140	7.2573	(0.8)%
South Korean won	KRW	1,346.3800	1,344.0900	1,353.8179	1,386.0976	2.4%
Mexican peso	MXN	23.1438	20.8560	23.7193	20.0827	(15.3)%
Romanian leu	RON	4.9490	4.9495	4.9489	4.9209	(0.6)%
Turkish lira	TRY	15.2335	19.9649	12.7738	19.0048	48.8%
United States dollar	USD	1.1326	1.0666	1.1440	1.0205	(10.8)%

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