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STRATEC SE Investor Presentation 2023

Aug 9, 2023

416_ip_2023-08-09_8423b6cb-4e22-4d4d-b786-8209f8c64c91.pdf

Investor Presentation

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STRATEC H1/2023 FINANCIAL RESULTS

Birkenfeld, 2023-08-09

Forward-looking statements involve risks.

This company presentation contains various statements concerning the future performance of STRATEC. These statements are based on both assumptions and estimates. Although we are convinced that these forward-looking statements are realistic, we can provide no guarantee of this. This is because our assumptions involve risks and uncertainties which could result in a substantial divergence between actual results and those expected.

It is not planned to update these forward-looking statements.

1.H1/2023 HIGHLIGHTS

  • 2.FINANCIAL REVIEW
  • 3.OUTLOOK
  • 4.Q&A
    1. APPENDIX

H1/2023 AT A GLANCE

  • • Sales H1/2023 -9.1% at constant-currency mainly due to pandemic-related high basis of comparison (omicron wave in Q1/2022)
    • Improved sales dynamics in Q2/2023 (sales +5.0% at constant-currency); initial normalization of basis of comparison and ramp-up of newly launched systems
  • • Initiation of earnings improvement program; good progress made in Q2/2023 to achieve expected earnings improvement potential of € 10.0 million to 15.0 million in2024
  • • Acquisition of Natech Plastics – expansion of high-value consumables portfolio and strengthening of North American market position with local manufacturing site
  • • Significant expanded version of a system for flow cytometry was launched for a North American customer in Q2/2023

H1/2023 HIGHLIGHTS

ACQUISITION OF NATECHPLASTICS, INC.

Rationale

  • Provider of smart polymer-based consumables focused on medical applications (based in Ronkonkoma, NY, USA)
  • Addition of local production site (clean room manufacturing) set to further strengthen position in the US market
  • Diversification due to high share of recurring sales, extended customer base and complementary target markets
  • Synergies with exiting smart consumable business

Financials

  • Transaction value of around USD 30.0 million, plus a variable component (earn-out)
  • Closed as of July 1st, 2023

  • Sales of USD 16.3 million in 2022 with double digit growth in each of the past three years

  • Transaction multiple: EV /sales of ~2x

  • Neutral to slightly positive impact on adjusted earnings per share in 2024

Sales End Markets (2022e)

  • Diagnostics (IVD)
  • Other medical applications
  • Consumer and other products
  • Tooling only

  • 2.FINANCIAL REVIEW
  • 3.OUTLOOK
  • 4.Q&A
    1. APPENDIX

FINANCIALS AT A GLANCE1

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Adj. = adjusted / bps = basis points

1For comparison purposes, adjusted figures have been adjusted to exclude amortization resulting from purchase price allocations in the context of acquisitions and other non-recurring items (advisory expenses relating to M&A activities and one-off personnel expenses). In the previous year, the figures were additionally adjusted to exclude a provision for expected back payments of tax (including interest payments).

SALES H1/2023

As of June 30

Sales in € million

H1/2023 down by 8.9% yoy to € 125.0 million -9.1% at constant currency

  • (-) Lower pandemic-related demand for molecular diagnostics solutions (including service parts)
  • (-) Lower sales with veterinary diagnostics products
  • (-) Increased efforts by customers to optimize their inventory levels
  • (+) Higher development and services sales
  • (+) Rising call-up figures for newly launched systems

FINANCIAL REVIEW

SALES BY OPERATING DIVISIONS H1/2023

In % of total sales

Systems

Development & services

CER = Constant exchange rates

As of June 30

Sales in € million

H1/2023 FINANCIAL RESULTS – AUGUST 9, 2023

Service parts and consumables

Others

ADJUSTED EBIT AND EBIT MARGIN H1/2023

H1/2023 adjusted EBIT margin at 5.6% versus 15.4% in the prior year

  • (-) Negative economies of scale
  • (-) Sales and product mix
  • (-) Higher input costs
  • (-) Initially lower efficiency within the series manufacturing of newly launched products

As of June 30

FINANCIAL REVIEW

CASH FLOW AND NET DEBT

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  • • Operating cash flow dynamics burden by current margin challenges and still inflated working capital levels
  • •New revolving credit line of up to €50.0 million (€ 32 million drawn as of June 30, 2023) to finance Natech acquisition
  • • Investment ratio1 at 7.1% of sales versus 5.8% in H1/2022 in-line with full year target corridor of 6.0% to 8.0%
  • •Net debt / LTM EBITDA of 2.2x

1 Total investments in intangible and tangible assets in % of sales

LTM = Last twelve months

  • 1.H1/2023 HIGHLIGHTS
  • 2.FINANCIAL REVIEW
  • 3.OUTLOOK
  • 4.Q&A
    1. APPENDIX

EARNINGS IMPROVEMENT PROGRAM*

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*Compared with the original company budget

OUTLOOK

GUIDANCE FOR FISCAL YEAR 2023*

  • •Sales expected to remain stable or grow slightly on a constant-currency basis
    • Growth with newly launched systems but cool down in pandemic related product demand and delivery backlogs in the veterinary diagnostics business
    • Acquisition of Natech set to contribute around 3.0 percentage points to sales volume
  • •Adjusted EBIT margin of around 10.0% to 12.0% (2022: 16.4%)
    • Margin improvement in H2/2023 expected due to price increases already agreed in some cases, greater cost discipline, and the growing impact of measures within the earnings improvement program

•Investments in tangible and intangible assets combined of around 6.0% to 8.0% of sales

*Updated on July 18, 2023

QUESTIONS & ANSWERS

H1/2023 FINANCIAL RESULTS – AUGUST 9, 2023

APPENDIX

ADJUSTMENTS H1/2023

EBIT

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1

CONTACT

STRATEC SE Gewerbestr. 37 75217 Birkenfeld Germany

Phone +49 7082 7916-0 Fax +49 7082 7916-999 www.stratec.com

CONTACT

Jan Keppeler, CFA Head of Investor Relations, Sustainability & Corporate Communications

Phone +49 7082 7916-6515 [email protected]

THANK YOU FOR YOUR ATTENTION

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