Stabilus S A : Annual report 2020

December 13, 2020 at 01:31 pm EST

A N N U A L

R E P O R T

F O C U S O N I N N O V A T I O N , G R O W T H & E F F I C I E N C Y

A TO OUR SHAREHOLDERS

B COMBINED MANAGEMENT REPORT

C CONSOLIDATED FINANCIAL STATEMENTS

D ANNUAL ACCOUNTS

E ADDITIONAL INFORMATION

KEY FIGURES

									Revenue by operating segment (i.e. region, location of Stabilus company)


		Year ended Sept 30,						IN %
				14


IN € MILLIONS	2020		2019		Change		% change

Revenue	822.1		951.3	(129.2)	(13.6%)


EBIT	56.1		124.0	(67.9)	(54.8%)

Adjusted EBIT	96.7		142.7	(46.0)	(32.2%)					50
													50%		EMEA
Profit for the period	30.0		80.9	(50.9)	(62.9%)



														36%		AMERICAS
Capital expenditure	(47.6)		(56.5)	8.9	(15.8%)	36


Free cash flow (FCF)	61.2		48.5		12.7		26.2%					14%		APAC

Adjusted FCF	62.3		89.9	(27.6)	(30.7%)


EBIT as % of revenue	6.8%		13.0%					Revenue by business unit

Adjusted EBIT as % of revenue	11.8%		15.0%

			IN %

Profit in % of revenue	3.6%		8.5%


Capital expenditure as % of revenue	5.8%		5.9%


FCF in % of revenue	7.4%		5.1%			26
Adjusted FCF in % of revenue	7.6%		9.5%
												41
Net leverage ratio		1.2x	1.0x			39

														41%		Industrial Business


														33%		Automotive Gas Spring

							33				26%		Automotive Powerise®

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OUR GLOBAL FOOTPRINT

C CONSOLIDATED FINANCIAL STATEMENTS

D ANNUAL ACCOUNTS

E ADDITIONAL INFORMATION

A M E R I C A S

Argentina Buenos Aires

Brazil Itajubá

Mexico Ramos Arizpe

USA Farmington Hills / MI

USA Gastonia / NC

USA Lynnwood / WA

USA Miamisburg / OH

USA Sterling Heights / MI

USA Stoughton / MA

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E M E A

France Poissy

Germany Aichwald

Germany Büttelborn

Germany Eschbach

Germany Koblenz

Germany Langenfeld

Italy Pinerolo

Luxembourg Luxembourg

Romania Brasov

Russia Moscow

Spain Derio

Turkey Bursa

UK Banbury

UK Haydock

A P A C

Australia Dingley

China Changzhou

China Pinghu

China Shanghai

Japan Yokohama

New Zealand Auckland

Singapore Singapore

South Korea Busan

South Korea Suwon

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D ANNUAL ACCOUNTS

E ADDITIONAL INFORMATION

CONTENTS

TO OUR SHAREHOLDERS
LETTER FROM THE CEO	4
REPORT OF THE SUPERVISORY BOARD	6
FOCUS ON INNOVATION, GROWTH & EFFICIENCY	8
STABILUS SHARE	15

COMBINED MANAGEMENT REPORT
GENERAL	18
STRATEGY	18
BUSINESS AND GENERAL ENVIRONMENT	20
RESULTS OF OPERATIONS	23
DEVELOPMENT OF OPERATING SEGMENTS	27
FINANCIAL POSITION	29
LIQUIDITY	30
STATUTORY RESULTS OF OPERATIONS AND
FINANCIAL POSITION OF STABILUS S. A.	33
RISKS AND OPPORTUNITIES	33
CORPORATE GOVERNANCE	38
SUBSEQUENT EVENTS	41
OUTLOOK	41

CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME	43
CONSOLIDATED STATEMENT OF
FINANCIAL POSITION	44
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY	45
CONSOLIDATED STATEMENT OF CASH FLOWS	46
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS	47
RESPONSIBILITY STATEMENT	100
MANAGEMENT BOARD OF STABILUS S. A.	101
SUPERVISORY BOARD OF STABILUS S. A.	102
INDEPENDENT AUDITOR'S REPORT	103

	ANNUAL ACCOUNTS
	BALANCE SHEET	107
	PROFIT AND LOSS ACCOUNT	108
	NOTES TO THE ANNUAL ACCOUNTS	109
	RESPONSIBILITY STATEMENT	115
	INDEPENDENT AUDITOR'S REPORT	116

	ADDITIONAL INFORMATION
	FINANCIAL CALENDAR	119
	DISCLAIMER	119
	TABLE DIRECTORY	120
	INFORMATION RESOURCES	123

S TA B I L U S ANNNUUAAL LR RE PE OP OR TR T2 022002 0

TO OUR

SHAREHOLDERS

LETTER FROM THE CEO	4
REPORT OF THE SUPERVISORY BOARD	6
FOCUS ON INNOVATION, GROWTH & EFFICIENCY	8
ASTABILUS SHARE	15

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D ANNUAL ACCOUNTS

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LETTER FROM THE CEO

LETTER

FROM

THECEO

Dr. Michael Büchsner

Chief Executive Officer

S TA B I L U S A N N U A L R E P O R T 2 0 2 0

Dear shareholders, customers,

business partners, employees,

ladies and gentlemen,

We look back on an unusual 2020 fiscal year - and with confidence toward the future. After meeting our targets for the first quarter, which ended on December 31, 2019, the remaining three quarters were significantly impacted by the COVID-19 pandemic, which had a negative effect worldwide on all our target industries in both the automotive and industrial business. However, our revenue for the year as a whole fell by only a comparatively moderate percentage. Not only were we able to finish the year profitably, we also expect to see revenue growth in the fiscal year ahead. Taken together, these developments demonstrate the resilience of our business model, which is strongly influenced by our wide-ranging product portfolio and innovative strength. In the year under review, the rapid and effective rollout of a pandemic plan at all our locations also made a major contribution to allowing us to effectively protect our employees and maintain production without interruption.

At €822.1 million, revenue was down 13.6% year on year from the prior-year figure of €951.3 million. The adjusted EBIT margin amounted to 11.8%. As a result, we exceeded our forecast for the 2020 fiscal year, which was updated after the third quarter, thanks to a recovery of the markets in the last three months of the year.

Compared to the prior year, the share of industrial business increased from 39% to 41% of Group's total revenue. In this business segment we achieved €337.1 million revenue, after €369.9 million in the previous fiscal year. Revenue in Automotive Gas Spring stood at

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LETTER FROM THE CEO

€268.0 million (PY: €331.4 million) and in Automotive Powerise at €217.0 million

(PY:€250.0 million). Broken down by region, revenue was down by 14.7% to €411.1 million in EMEA and by 18.1% to €299.6 million in the Americas. However, revenue was up by 7.8% to €111.4 million in the APAC region.

Even in turbulent times, we continue strengthening the future viability of our company. In the period under review, we invested €47.6 million (total capex), with a focus on the development of new products and on further future growth. Because the Asian market is a key region in our long-term strategy, we are continuously expanding our capacities there. In particular, the Powerise® products, which have been produced locally in China since 2017, are set to make a significant contribution to the development of Stabilus in Asia.

The pandemic also impacted our earnings in the 2020 fiscal year, with adjusted EBIT of €96.7 million standing in contrast to the prior-year figure of €142.7 million. Following €80.9 million in the prior year, net profit amounted to €30.0 million in the period under review. The decline was due in particular to non-cash impairments of intangible assets of the aerospace segment, which was significantly impacted by the pandemic. We want our shareholders to participate in the company's positive net profit situation once again this year and will propose the payment of a dividend of €0.50 per share to the Annual General Meeting.

»Even in turbulent times, we continue strengthening the future viability of our company… Our vision is to attain a leading position in the field of motion control solutions worldwide by 2025.«

The megatrends behind our long-term growth remain intact despite the pandemic. Demographic change, higher standards of life, a rising desire for comfort, and more stringent health and safety standards will continue to influence societies worldwide, as well as their consumption and buying decisions, in the future. Our motion control solutions for a wide range of industries will allow us to benefit disproportionately from these trends. In certain fields, such as contactless applications, the current crisis is also acting as a catalyst for accelerated development that offers us further opportunities.

For the 2021 fiscal year, we expect revenue of €850 million to €900 million and an adjusted EBIT margin of between 12% and 13%. These assumptions are based on a stabilizing global economy and the expected recovery in global automotive production.

Our vision is to attain a leading position in the field of motion control solutions worldwide by 2025. Expressed in numbers, that vision translates into a goal of achieving revenue growth of 6% a year on average between now and the 2025 fiscal year. Our adjusted EBIT margin target for 2025 stands at 15%. Innovative strength will continue to be a major success factor going forward. One aim is to generate €250 million in revenue with new products in the 2025 fiscal year. With our highly motivated staff, our strong international management team, proven innovative strength and efficiency, and our consistent and systematic customer orientation, we have everything it takes to achieve this ambitious goal.

On behalf of the entire management team, I would like to take this opportunity to thank our shareholders for the confidence they have shown in Stabilus. I would also like to thank our employees for their continued hard work and for the team spirit that has so far helped our company successfully navigate the pandemic. Last but by no means least, I would like to thank our customers for their confidence and loyalty, as well as our business partners for the focused and successful cooperation we enjoy. We are well positioned to ascend to new heights with a host of new product ideas once the pandemic has been overcome and the global economy has started to recover.

Yours sincerely,

D R . M I C H A E L B Ü C H S N E R

C H I E F E X E C U T I V E O F F I C E R

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REPORT OF THE SUPERVISORY BOARD

REPORT

OF THE SUPERVISORY BOARD

Dr. Stephan Kessel

Chairman of the Supervisory Board

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Dear shareholders,

The past year was extremely volatile witnessing the start and global spreading of a pandemic. COVID-19 impacted all areas of the Stabilus business particularly the automotive and the aviation branches. The Management Board headed by Dr. Büchsner, who started on October 1, 2019, was confronted with a difficult task. The wellbeing of our employees was paramount to the company resulting in the creation of a specific task force, which regularly updated staff, management and the Executive Board. The Supervisory Board increased its oversight, too, to ensure that the Stabilus S. A. provides the basis for a speedy and well-organized recovery. The focus of the Managing Board was approved by the Supervisory Board and shows a first sign of recovery. Nevertheless, we at Stabilus S. A. are aware that the pandemic is far from over and the year ahead will be as challenging as the past fiscal year.

In the fiscal year ending September 30, 2020, the Supervisory Board of Stabilus S. A. performed its tasks and monitored the Management Board in accordance with legal requirements and the Articles of Association of Stabilus S. A. The Management Board and the Supervisory Board maintained close and regular contact. The Supervisory Board advised the Management Board regarding strategic and operational decisions as well as governance topics and decided on matters requiring Supervisory Board approval. In the fiscal year ending September 30, 2020, the members of the Supervisory Board were Dr. Stephan Kessel (Chairman), Dr. Joachim Rauhut, Dr. Ralf-Michael Fuchs and Dr. Dirk Linzmeier.

The Supervisory Board held in total eleven meetings during the fiscal year ending September 30, 2020. Six of aforementioned meetings were extraordinary meetings mainly focusing on the COVID-19 impact on Stabilus S. A.

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REPORT OF THE SUPERVISORY BOARD

In all of the Supervisory Board meetings, all members were present. To comply with the social distancing requirements, seven of the meetings were held via conference calls. Ongoing

subjects in the meetings were the current status and performance of the Stabilus Group, including its commercial position as well as its relevant financial data. The discussions were based on regular and extensive reports in verbal and written form by the Management Board. Other activities included strategy presentations and a strategy workshop, as well as the organizational development and potential acquisitions to enhance the profitable growth of the Stabilus Group.

One additional meeting composed by three members of the Supervisory Board, the Management Board and the Senior Management of Stabilus was held on February 13, 2020, in Luxembourg.

During the reporting period, the members of the Audit Committee were Dr. Joachim Rauhut (Chairman), and Dr. Stephan Kessel. Material questions concerning auditing, accounting, risk management, compliance and respective controls and systems were subject to the monitoring duties of the Audit Committee. The Audit Committee discussed in particular the Quarterly Reports, the relationship with investors and the audit assignment to KPMG Luxembourg Société coopérative including the focus areas of the audit. In the fiscal year ending September 30, 2020, the Committee held six meetings. In the meetings, all members were present; three meetings were conducted via conference call.

During the reporting period, the members of the Remuneration and Nomination Committee were Dr. Stephan Kessel (Chairman) and Dr. Ralf-Michael Fuchs. Remuneration, nomination and general Board matters were discussed by the Committee. The Committee prepared the remuneration report in accordance with the Luxembourg law of August 1, 2020, the Second Shareholders' Rights Directive ("SRD II", Directive (EU) 2017/828). The Remuneration and Nomination Committee held three meetings two of which via conference call. In all meetings, all members of the Remuneration and Nomination Committee were present.

on their findings, provided a written presentation and were available to give additional

explanationsand opinions. The Supervisory Board did not raise objections to the Company's annual accounts or to the consolidated financial statements drawn up by the Management Board for the fiscal year ending September 30, 2020, and to the auditors' presentation. The Supervisory Board agreed to the proposal of the Management Board, recommended by the Audit Committee, and approved the Company's annual accounts and the consolidated financial statements for fiscal year 2020. The auditor issued unqualified audit opinions on December 10, 2020.

»COVID-19 impacted all areas of the Stabilus business… The Supervisory Board increased its oversight… to ensure … a speedy and well-organized recovery.«

On behalf of the Supervisory Board, I would like to thank the Stabilus management for excellent achievements throughout the challenging last fiscal year and for the open and effective collaboration. I want to thank the Stabilus employees for their remarkable contributions to the Company's success as well as our shareholders for the highly valued trust which they place in Stabilus.

Luxembourg, December 10, 2020

On behalf of the Supervisory Board of Stabilus S. A.

Yours sincerely,

The Supervisory Board examined the Company's annual accounts, the consolidated financial statements and the management report for the fiscal year ending September 30, 2020. Representatives of the auditor KPMG Luxembourg Société coopérative attended the meetings of the Audit Committee on November 11, 2020, and on December 10, 2020, at which the financial statements were examined. The representatives of the auditor reported extensively

D R . S T E P H A N K E S S E L

C H A I R M A N O F T H E S U P E R V I S O R Y B O A R D

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FOCUS ON INNOVATION,

GROWTH & EFFICIENCY

FOCUS ON INNOVATION, GROWTH & EFFICIENCY

Powerise

The POWERISE electromechanical drive for automatically opening and closing vehicle doors represents the logical development of the gas spring and points the way to the electronic age. Since realizing the first

Image: SD90 POWERISE

STABILUS - OUR FUTURE IN MOTION

Founded more than 85 years ago as a producer of retrofittable stabilizers for the American automotive

industry, Stabilus continues to set new technological standards as a pioneer for the development of gas springs, dampers, and electromechanical drives. We have continuously expanded this pioneering role: With a comprehensive range of applications, a unique product range and decades of experience, we are the world's leading manufacturer of solutions in the area of motion control. Developing innovative products and technologies plays an important part in Stabilus' success, as we have been able to continuously reinvent our products and identify new areas of application.

»We systematically improve our products, integrate electronics, and use new materials.

That is our strength and how we create solutions that inspire our customers.«

Dorstop

POWERISE system in a series-produced vehicle, we have systematically expanded our excellent market position in this product area and are now the market leader in this sector.

Image: Coaxial spindle drive (POWERISE)

DA90

The latest innovation from Stabilus is the POWERISE DOOR ACTUATOR, which combines the benefits of the DORSTOP and the POWERISE to allow vehicle doors to be comfortably opened and closed automatically for the first time. The technology will play a particularly important role in autonomous driving, as fully automatic doors will be one of the fundamental conditions for this technology. Stabilus has already attracted four customers from the premium segment for the POWERISE DOOR ACTUATOR (DA90). Production for these customers, which include providers of electric vehicles, will begin successively from 2021 onward.

Innovative solutions - satisfied customers

We systematically improve our products, integrate electronics, and use new materials. That is our strength and how we create solutions that inspire our customers.

With the DORSTOP, we were the first company in the world to develop a variable hydraulic door stay for the automotive industry. The DORSTOP has been the benchmark for vehicle door adjustment for premium vehicles for many years. It offers a true plus in terms of comfort and safety when getting in and out of the car.

Image: Axially parallel spindle drive (POWERISE)

Image: DA90 DOOR ACTUATOR

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FOCUS ON INNOVATION,

GROWTH & EFFICIENCY

INNOVATION

DRIVING GROWTH

Innovation Race - an innovation culture for long-term success

In order to further expand Stabilus' innovative strength, we launched an investment program as part of our STAR 2025 long-term strategy, with an internal innovation competition called Innovation Race as a key component. The aim of the competition is to continue to promote the culture of innovation at Stabilus as a means of securing the technology leadership of the Stabilus Group for the long term. More than 20% of all employees participated in the first round of this global idea collection process, which began in 2019. To date, the competition has resulted in 426 creative product and process suggestions. All of the ideas submitted to the dedicated digital platform were inspected and discussed by in-house experts and evaluated in terms of their customer benefit and feasibility. Everyone who submitted an idea received feedback. The jury selected the 15 best ideas from a preselected list so that they could be developed in greater detail by support teams. In a subsequent assessment round, six teams qualified for the final.

All the finalists were actively assisted and supported in continuing their projects by internal sponsors at management level. The top ideas included suggestions from Romania, China, the USA, and Germany, thereby underlining the international reach of the competition.

The winner of the first innovation competition was a team headed by development engineer Alexander Reiser which succeeded in finding a clever solution to compensate for the temperature-dependent forces of traditional gas springs. For a wide range of application fields, this approach will help to ensure reliable motion control at different ambient temperature levels, also in conjunction with existing Stabilus systems. The winning team is now sponsored by the respective Stabilus business units and is expected to move forward to series development based on a successful proof of concept.

»Temperature and temperature fluctuation is the Achilles heel of a traditional gas spring and temperature compensation is therefore the holy grail in this field.«

Image: Celebrating the winning team of the 2019 Innovation Race

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FOCUS ON INNOVATION,

GROWTH & EFFICIENCY

INTERVIEW WITH DR. BÜCHSNER ON THE TOPIC OF INNOVATION

Progress is fueled by new ideas. This is why Stabilus is actively generating new impetus in this area with its innovation competition. We talked to Dr. Michael Büchsner, CEO of Stabilus, about the ideas that are currently coming to fruition - and what else is required to be successful in the long term.

You have been with Stabilus for just over a year now. What do you believe makes Stabilus special, and how important is the topic of innovation in particular?

I had come into contact with Stabilus on many occasions during my career to date. I already viewed the company as being synonymous with innovation and high-quality products. My first year at Stabilus only served to confirm this impression. Across our

organization,we place considerable emphasis on innovation, as we see it as representing the revenues of tomorrow. One example of our innovative strength is the POWERISE DOOR ACTUATOR, which brings the act of getting into a car to a new level by automatically opening and closing the doors. We are continuing to promote this culture of innovation with the launch of a competition entitled "Innovation Race".

How has the innovation competition gone so far?

Extremely well. It has set an incredible number of things in motion - across business units, across loca- tions, and even across company boundaries. The entire Stabilus Group has shown tremendous commitment. I had hoped that this would be the case, but it was not guaranteed. After all, this is the first time we have organized a competition like this.

Has the response been at the level you expected?

The figures alone are impressive: With 1,352 participants and 426 ideas submitted, we practically exceeded even our most optimistic expectations. What I am just as pleased to see, however, is employees who did not previously know each other coming into contact through their ideas and entering into an

intensive dialog . Many colleagues are clearly enjoying

the opportunity to think outside the box. This is almost more important to me than the number of ideas generated.

Are there any initial findings about the quality of the ideas?

We have seen a broad mix of ideas, all the way through to some revolutionary concepts whose feasibility is impossible to judge right now. But it would be negligent to talk about quality in this phase of the process. Quality is what is added subsequently. Everyone is invited to look at the ideas and join in the discussion on the competition platform. This will undoubtedly help to make them even better.

What do you see as being the perfect Stabilus DNA?

It is a combination of many things. Pride in your ability and your achievements. But also humility - because being ahead and staying ahead are two very different animals. Then there is the staying

power you need to analyze difficulties and not give

up immediately . The willingness to shine a light on weaknesses so that they can be rectified. The ability to reach out in order to think and work across business units. Product and process developers need to pull in the same direction or even the best idea is doomed to fail. And perhaps the most important thing of all for me: Staying hungry! Even the global market leader cannot afford to rest on its laurels.

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FOCUS ON INNOVATION,

GROWTH & EFFICIENCY

What do you currently see as the biggest opportunities?

Our statement is "Your motion, our solution". This encapsulates what we and our developments stand for. We are focusing on products in the areas of comfort and motion. In the automotive segment, we see opportunities in the trend toward electric mobility and semi-autonomous driving. We are supporting this trend with our automatic door and tailgate drive systems. Our global footprint ensures that all of our developments are made with the customer in mind. In the Industrial business unit, this proximity to the

customer also represents a significant opportunity for us. Applying the same model as in our automotive business, our products in the Industrial business are manufactured in all regions, bringing us closer to our customers and making us more effective than many of our competitors. I see a major opportunity in the breadth of our Industrial product portfolio, which extends from commercial vehicles and energy applications through to medical applications and aerospace.

What are the main development topics currently being addressed by your team?

In the area of door and tailgate drive systems, we are working on complete solutions for

our customers that include the drive unit, the control unit and electronic components, so that it is easier for customers to integrate the systems into their vehicles. We are also especially keen to ensure the

robustness of our products and processes, so that we can deploy our products quickly and efficiently around the world. We are in the process of further

expanding our portfolio in the Industrial business unit with a focus on applications in the area of damping technology for solar and energy management. We are also continuing to work on our portfolio for medical technology and mechanical engineering. Here, too, we are concentrating on complete solutions,

such as products with integrated measuring and control technology.

»Staying hungry! Even the global market leader cannot afford to rest on its laurels.«

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FOCUS ON INNOVATION,

GROWTH & EFFICIENCY

INNOVATION TREE -

Circular Economy	Agricultural Vehicles

IDENTIFYING MEGATRENDS IN MOTION CONTROL

As part of its long-term strategy, Stabilus has visualized its innovation and development areas in the form of an innovation tree so that it can continue to gear its

	Green Energy
Efﬁciency
	Planes
Industry 4.0	M O D E R N

	I N D U S T R Y
Eco Materials	RVs

High EHS Standards

Autonomous	Military Vehicles
Electric Cars

	Street Scooter

N E X T

G E N E R A T I O N V E H I C L E S

product portfolio toward the development of global megatrends in the future. In particular, this is intended to significantly heighten the focus on the customer and allow the experience gained over time to be harnessed systematically for product development and

Entertainment

Digital Engineering

H U M A N

W E L L - B E I N G

Infrastructure

Safety

Micro

Drones

Trains

Compact Living

enhancement. The innovation tree also makes it easier to identify white spots in Stabilus' product portfolio and regional focus so that strategies and initiatives can be defined in order to close these gaps. This will allow Stabilus to reinforce its leading role in the market for motion control over the coming years.

In developing the innovation tree, Stabilus already generated some initial ideas for applications. In the area of electric mobility, for example, it is focusing on charging and battery change technology. In the future, it could be possible for batteries to be automatically

Medical /

Demographic

Change

Comfort

Sport & Fitness

Mobility

Delivery

U R B A N L I F E

Sharing

Green

Living

Public Mass Transportation

Digital

Interface

exchanged at gas stations. The battery change mechanism is an example of a field in which Stabilus could offer its solutions based on its leading position in the market for motion control.

M O T I O N & M O B I L I T Y

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FOCUS ON INNOVATION,

GROWTH & EFFICIENCY

Another future area of activity is solar technology, where the linear motion technology in Stabilus' existing product portfolio can be applied to various comfort-oriented products.

The COVID-19 pandemic has led to serious challenges for many parts of our society. At the same time, demand for innovation has enjoyed a significant boost. The virus has changed the typical behavioral patterns of our society. COVID-19 has given rise to considerable demand for contactless applications. For example, we are developing systems for the contact-free opening of overhead bins on aircraft. Thanks to its technologies, Stabilus is excellently positioned to offer solutions that help society to master the changed needs of public life in the form of innovative products.

FOCUS: STABILUS IN MEDICAL TECHNOLOGY

Mobile X-ray machines at the epicenter of the epidemic

When the then unknown COVID-19 illness turned the Chinese city of Wuhan into the epicenter of the pandemic in early 2020, it was vitally important for local intensive care medics to be able to assess the condition of patients' lungs using rapidly deployable imaging techniques. Mobile X-ray machines proved to be among the most effective tools - and machines manufactured by Wangdong, an internationally

between the various brands within the Stabilus Group: The tension gas spring is a Hahn design that is used in ACE application technology and marketed by the local ACE team via Stabilus China.

Custom-made stainless steel gas springs for hygiene chairs make life easier for caregivers

A hygiene chair specially designed for children and young people with disabilities requires a sturdy locking mechanism in the seat and tilt positions. Thanks to two lockable gas springs specially developed and manufactured for this application, the chair has a tilt-in-space

function to make life easier for relatives and caregivers . It allows the stepless adjustment of the hygiene chair as it is tilted forward and backward, making it more comfortable and safer to use for caregivers and patients alike. The gas springs are made from stainless steel in order to satisfy all hygiene requirements.

recognized specialist for imaging techniques, were in use right from the start. Thanks to its connected product network, the company was able to produce hundreds of machines in a short period of time, making an important contribution to the treatment of tens of thousands of patients. The mobile X-ray machines manufactured by Wangdong use gas springs from the Stabilus brand ACE to safely position the X-ray arm of the machine above the patient. The movement of the arm is complex, as it has to be set individually depending on the anatomy of the respective patient and stay in a secure and stable position throughout the X-ray procedure. The technology used also serves to underline the strong synergies and smooth interplay

Gas springs provide enhanced protection for laboratory equipment

ACE industrial gas springs protect samples in incubators used in chemical and biochemical applications. The perspex hood that covers the laboratory material is securely held in an open and closed position by two maintenance-free,ready-to-install gas springs. This makes it easy for the user to open the hood and lock it in place, while the hood remains safely closed when the incubator is in use.

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FOCUS ON INNOVATION,

GROWTH & EFFICIENCY

GROWTH &	Industrial Business Unit

EFFICIENCY

Industrial sales by market segment

IN %

21%

New segment structure - one face to the customer

Stabilus adjusted the structure of its business segments at the start of the 2020 fiscal year and now reports three business units: Automotive Gas Spring, Automotive Powerise, and Industrial. To improve

efficiency following the acquisitions made in recent years and enable more effective access to customers in particular, the former Industrial / Capital Goods and Vibration and Velocity Control business units were combined to form the Industrial business unit. As a result of these

adjustments,Stabilus is now managing its sales activities in the Industrial business unit on the basis of its customers' individual industrial segments rather than by product category as previously. This serves to underline Stabilus' customer orientation and the growing importance of the industrial business, as well as unlocking additional growth potential.

We have continued to expand our product portfolio in recent years with the integration of ACE, Hahn Gasfedern, Fabreeka, Tech Products,

General Aerospace, Clevers, and Piston into the Stabilus Group, meaning that our customers now benefit from the concentration of even greater expertise in the area of motion control. The new structure of the Industrial

business unit comprises following customer / market segments: Mobility, Health, Recreation & Furniture, Energy, Construction, Industrial Machinery

Automation. In addition, independent aftermarket and distributor
businesses are part of the Industrial business unit.

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https://www.stabilusindustryline.com/

https://www.acecontrols.com

https://www.hahn-gasfedern.de/en.html

https://www.fabreeka.com/

https://www.novibes.com

https://www.general-aero.com/en

http://www.piston.com.tr/

http://www.clevers.com.ar/

33%

2019

19%

27%

20%

33%

2020

21%

26%

Distributors, Independent Aftermarket, E-commerce

Mobility

Healthcare, Recreation & Furniture

Energy, Construction, Industrial Machinery & Automation

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STABILUS SHARE

STABILUS

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Stabilus share price up by 12%

Shareholder structure

Stabilus share data

As of September 30, 2020, and in year-on-year comparison, Stabilus' share price increased by twelve percent and noticeably outperformed its peer index DAXsector Industrial. The annual progress was roughly in line with the development of the SDAX and DAXsector All Automobile indices during the same period of time.

According to the voting rights notifications received until September 30, 2020, Marathon Asset Management LLP, London, UK, Allianz Global Investors GmbH, Frankfurt am Main, Germany and Teleios Capital Partners LLC, Zug, Switzerland each hold more than 5% of Stabilus shares. Stabilus management, i.e. members of the Management Board and of the

Ticker symbol

Bloomberg ticker symbol

Reuters ticker symbol

ISIN

German security identification number (WKN)

STM

STM:GR

STAB.DE

LU1066226637

A113Q5

Share price development

Supervisory Board, hold 0.3% of the total shares.

The aforementioned and all other voting-right notifications are published

on WWW.IR.STABILUS.COM.

Number of shares outstanding (Sept 30, 2020)

Type of shares

Capital stock (Sept 30, 2020)

24,700,000

Dematerialized shares with

nominal value of €0.01 €247,000

50%

40%

Closing price

30%

Sept 30, 2020 €50.15

20%

10%

Opening price

- 10%

Oct 1, 2019 €44.62

- 20%

- 30%

- 40%

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

June

July

Aug

Sep

- 50%

Stabilus

SDAX (Price index)

DAXsector All Automobile (Price index)

DAXsector Industrial (Price index)

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	STABILUS SHARE

Shareholder structure		Development of Stabilus share price since IPO

IN % AS OF SEPTEMBER 30, 2020

7.1

5.2

5.0 0.3

82.4

7.1% Marathon Asset Management LLP, London, UK

5.2% Allianz Global Investors GmbH, Frankfurt am Main, Germany

																		€ 100
																		€ 80
															Closing	price

															Sept 30,	2020

															€50.15		€ 60

																		€ 40


																		€ 20

	First	trading day

	May	23, 2014

	€22.	75																€ 0
MAY	SEP	MAY	SEP		MAY	SEP	MAY	SEP	MAY	SEP	MAY	SEP	MAY	SEP
2014		2015		2016		2017	2018		2019		2020

5.0% Teleios Capital Partners LLC, Zug, Switzerland

0.3% Management

82.4% Other institutional and private investors

Annual General Meeting

Approximately 60% of equity capital was represented at our Annual General Meeting which was held on February 12, 2020, in Luxem- bourg. Each resolution proposed by the company's management was approved with more than 95% of votes. All documents and information regarding the Annual General Meeting can be found at

Regular dialog with investors and analysts

In fiscal year 2020 we continued to pursue our goal of providing all

market participants with relevant and reliable information. In the first half of the fiscal year 2020 we conducted seven investor events (i.e. roadshows and site visits), while in the second half of the year, during the COVID-19 pandemic, the IR events were held in virtual format (video and audio conferences). In addition, in FY2020 we participated in the following international conferences:

Berenberg Milan Seminar, Milan

Berenberg European Corporate Conference, Pennyhill Park, Surrey

J.P. Morgan Annual Auto Conference, London (virtual conference)

Commerzbank Sector Conference, Frankfurt am Main (virtual conference)

Baader Investment Conference, Munich (virtual conference)

Berenberg and Goldman Sachs German Corporate Conference, Munich (virtual conference)

The following equity analysts publish regular assessments and recommendations on Stabilus stock:

Research coverage

WWW.IR.STABILUS.COM.

Dividend proposal of €0.50 per share

The Management Board and the Supervisory Board have resolved to

propose a dividend distribution of €0.50 per share to the Annual General Meeting to be held in Luxembourg on February 10, 2021. It corresponds to a total dividend of €12.4 million (PY: €27.2 million) and the distribution ratio of around 41.2% (PY: 33.7%) of the consolidated profit attributable to the Stabilus shareholders.

Commerzbank German Investment Seminar, New York

Baader German Corporate Day, Toronto

Kepler Cheuvreux German Corporate Conference, Frankfurt am Main

UBS Pan European Small and Mid-Cap Conference, London (virtual conference)

Commerzbank Northern European Conference, New York and Boston (virtual conference)

Berenberg Conference USA, Tarrytown (virtual conference) Societe Generale Nice Conference, Nice (virtual conference)

Berenberg

Commerzbank

Hauck & Aufhäuser

J.P. Morgan Kepler Cheuvreux

Quirin

Societe Generale Stifel

UBS

Warburg Research

Philippe Lorrain

Yasmin Steilen

Christian Glowa

Jose M Asumendi, Akshat Kacker Hans-Joachim Heimbürger

Daniel Kukalj

Stephen Reitman

Alexander Wahl

Sabrina Reeh

Marc-René Tonn

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COMBINED

MANAGEMENT REPORT

as of and for the fiscal year ended September 30, 2020

GENERAL	18	STATUTORY RESULTS OF OPERATIONS AND
STRATEGY	18	FINANCIAL POSITION OF STABILUS S. A.	33
BUSINESS AND GENERAL ENVIRONMENT	20	RISKS AND OPPORTUNITIES	33
RESULTS OF OPERATIONS	23	CORPORATE GOVERNANCE	38
DEVELOPMENT OF OPERATING SEGMENTS	27	SUBSEQUENT EVENTS	41
B FINANCIAL POSITION	29	OUTLOOK	41
LIQUIDITY	30

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GENERAL

STRATEGY

GENERAL

Stabilus S. A., Luxembourg, hereafter also referred to as "Stabilus" or the "Company" is a public limited liability company (Société Anonyme) incorporated in Luxembourg and governed by Luxembourg law. The registered office is 2, rue Albert Borschette, L-1246 Luxembourg, Grand Duchy of Luxembourg.

Stabilus S. A. is the parent company of the Stabilus Group. The Group is organized and managed primarily on a regional level. The three reportable operating segments of the Group are EMEA (Europe, Middle East and Africa), Americas (North and South America) as well as APAC (Asia

Pacific) . Stabilus' fiscal year is a twelve-month period from October 1 until September 30 of the following year.

The Stabilus Group is a leading manufacturer of gas springs, dampers, vibration isolation products as well as electromechanical tailgate opening systems (motion control solutions). The products are used in a wide range of applications in the automotive and the industrial and domestic sector. Typically, the products are used to aid the lifting and lowering or dampening of movements. As world market leader for gas springs, the Group manufactures for all key vehicle producers, a broad spectrum of industrial customers

diversifies the Group's customer	base. Almost 41% (PY: 40%) of the
Group's revenue in fiscal year 2020	was achieved with industrial customers.

STRATEGY

The Stabilus Group is a leading supplier of gas springs to automotive and industrial customers. In addition, the Company has successfully expanded into the production and sale of automatic opening and closing systems, primarily used for vehicle tailgates. With the acquisition of Hahn Gasfedern, ACE, Fabreeka and Tech Products in fiscal year 2016 and the acquisition of General Aerospace (Germany), Piston (Turkey) and Clevers (Argentina) in fiscal year 2019, the Group expanded its product offe-

ring and regional presence. The Group offers a broad range of solutions for motion control including damping vibration insulation solutions. Stabilus' strategic aim is to further extend its leadership positions in this product range. The key focus areas of its strategy process STAR are to: (i) drive profitable and cash-generating growth, (ii) benefit from

megatrends,such as increased standard of living, increasing comfort requirements and aging population, (iii) focus on innovative gas spring solutions, especially in the industrial business through new applications and selected add-on acquisitions and (iv) maintain and strengthen the Company's cost and quality leadership.

Drive profitable and cash generating growth in all regional segments and across end markets

The Stabilus management aims to continue to increase revenue, profits and cash flows across all business segments by further focusing on regions and sectors where the Stabilus Group has room to grow, by entering new markets and by strengthening the Group with selected add-on acquisitions.

Automotive Gas Spring & Powerise®: Focus on rapidly growing regions and increased comfort demand

Stabilus intends to continue to further expand its international presence in rapidly growing markets, in particular in Asia, which has become a significant growth driver for the automotive sector and where the Company's market share still lags behind the market share in EMEA and Americas. Management seeks to increase revenue from Asian OEMs in the automotive business, supported by targeted investments in additional production capacity in this region. To achieve this goal, management has implemented a targeted sales strategy and is further strengthening application engineering capabilities in China, which has already secured orders from several local Chinese OEMs, both for Gas Spring and Powerise®. Stabilus´s market share with European and US car manufactures has long since been strong.

Increased demand for boxy car designs like crossover, hatchback and estate body type, as well as family van and SUV will provide a strong foundation for increased sales. Powerise®, our automatic opening and closing system for vehicle tailgates fulfills increased comfort requirements of end customers across all regions. The Company is in the process of setting up a dedicated Powerise® production building in Pinghu, China, besides existing Powerise® plants in Mexico and Romania.

Industrial: Increase regional coverage

While Stabilus has a large industrial market share in some European

countries in which the Company has a strong commercial presence, the Group believes that there is still potential to increase market share in Asia

and North America, where the Company's market coverage is comparatively less strong. Management has identified regions and countries in which the Company has the opportunity to repeat the successful strategies from markets where Stabilus has a high share, by improving market coverage with the objective of strengthening the local sales footprint. In addition, Stabilus is duplicating its production, application engineering and sales know-how from EMEA and Americas to the APAC region, to strengthen the Group's footprint there. The Company has increased its product offering in Asia, especially China. Stabilus has extended its Chinese production capabilities and set up local application engineering, sales and project management teams. The Stabilus management believes that a strong local presence in China will further strengthen the Group's position in the APAC region.

The acquired entities in last fiscal year, General Aerospace (Germany), Piston (Turkey) and Clevers (Argentina) to strengthen the Industrial business in all regions and in specific end markets. One important end market is the aerospace business. The rationale is to expand the motion control product portfolio in the aviation industry and to further develop the aircraft aftermarket and the retrofit business.

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STRATEGY

Benefit from megatrends, such as increasing comfort requirements and aging population

Stabilus continues to adapt its product offerings towards megatrends, such as comfort requirements. The Powerise® solution enhances comfort through automatically opening and closing car tailgates and trunk lids. In addition, the Company's gas springs offer more comfortable opening and closing solutions as well as increased comfort in commercial furniture and industrial applications, such as airplane seats.

The share of people older than 55 years of the global population is

growing considerably faster than the population as a whole in a number of countries. Stabilus aims to benefit from this megatrend. It is inevitable that an aging consumer base in mature markets requests more movement

support and more automated systems in aspects of their daily lives and specifically in their vehicles. The Group intends to benefit from this megatrend as a leading system provider of automatic opening and closing systems which will continue to experience an increasing demand.

Focus on innovative components and systems to take advantage of global industry trends

The products of Stabilus are at the forefront of innovation in moti-

on control . The Company employs 399 people (PY: 405 people) in R&D across its three regional segments as of September 30, 2020. Stabilus is focused on designing and manufacturing highly engineered components, modules and system solutions that address key global trends in the automotive and industrial sectors. The Company aims to adapt to these

trends by continuouslyimproving its existing technology, in particular the requirement for ergonomic solutions as well as automated opening and closing systems. Management believes that actively addressing these key trends reinforces the Company's ability to maintain its market share and profitability.

In the industrial sector, the Company continues to develop products for enhanced safety and comfort. For example, it is selling a seat application based on the Bloc-O-Lift® system for use in airplane seats. In addition, dampers manufactured by Stabilus are increasingly used in sun tracking solar parks. Our dampers protect the modules by reducing wind induced vibration.

Management expects that the recent and ongoing growth of our customer base for Powerise® solutions due to the superior technology features of the Company's products will be a key growth driver for Stabilus. While Powerise® systems were in the past deployed only in the luxury and SUV car segments, Powerise® has successfully gained market shares with mid-class vehicles. The Company is working on and investing in improving and further developing its current spindle drive technology to further reduce noise, weight and costs. In addition, Stabilus is exploring industrial applications for its Powerise® systems.

Maintain and strengthen cost and quality leadership

Build on the Group's global footprint and proximity to customers

Based on Stabilus guiding strategy "in the region, for the region", we have established our facilities in close proximity to the Group's customers and have done so continuously over the past years e.g. the US, in China, South Korea, Mexico. It is the Company's goal to continue to provide a comprehensive product and service offering to current and new customers globally. The Group seeks to fully globalize its product portfolio and

to provide an even broader range of components and systems to each customer. The companies acquired in 2019 will benefit from the access to a broader customer base.

Continue to optimize cost base

Stabilus continuously implements operational improvements relating to plant and overhead, which includes productivity improvements, overhead optimization and the rollout / implementation of local sourcing, to improve the Company's operating cost structure.

For the coming years, management expects to continue on this path with productivity improvements and a range of initiatives to increase profitability. This is backed by a high level of business which has already been locked in. Due to the Company's production know-how and long-standing client relationships backed by Stabilus's quality leadership, management is confident that it can protect the Group's market shares in gas springs in EMEA and Americas and gain further market shares for gas springs in the APAC region, especially with local customers. An increasing market share of Powerise® supports this positive outlook, as well as on expanded range of innovative products for the broad market.

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BUSINESS AND GENERAL ENVIRONMENT

Stabilus Group operates in automotive and in industrial markets.

In the industrial markets, Stabilus supplies customers in a large number of sub-industries, e.g. distributors, independent aftermarket, e-commerce, mobility, healthcare, recreation and furniture, energy, construction, industrial machinery and automation. Hence, our revenue development in the industrial business depends to a certain degree on the macroeconomic development, i.e. the growth rate of the gross domestic product (GDP) in the countries and regions we operate in.

In the automotive market, an important driver of our revenue growth is the

global production volume of light vehicles (which comprise passenger cars and light commercial vehicles weighing less than six tons) and ultimately the number of vehicles sold, e.g. the registration of new vehicles as an indicator of car sales. The average content of Stabilus products per vehicle differs with the car body configurations (for instance, hatchbacks, crossovers, family vans have generally a higher Stabilus content per car). Therefore, the demand and popularity of certain vehicle body configurations should be considered as an additional variable in a revenue forecast model.

Macroeconomic development

As per the latest figures published by the International Monetary Fund (IMF), the negative global GDP growth in the calendar year 2020 is projected to be - 4.4% (2019: 2.8%). Global GDP growth is projected

to increase to 5.2% in the calendar year 2021 whereas the growth in advanced economies will be less than the growth in developing economies. Advanced economies are projected to decrease by - 5.8% in the calendar year 2020. This is significantly lower than the 1.7% growth experienced by advanced economies in the calendar year 2019. It is projected that growth in advanced economies will strongly increase by 3.9% in the calendar year 2021. Developing economies are projected to decrease less than advanced economies in 2020 and continue to enjoy stronger growth than advanced economies in calendar year 2021.The growth rate in developing economies

Latest growth projections for selected economies	T_001

% YEAR-ON-YEAR CHANGE IN THE CALENDAR YEAR	2019	2020*	2021*
World	2.8%	(4.4)%	5.2%
Advanced economies	1.7%	(5.8)%	3.9%
Euro Area	1.3%	(8.3)%	5.2%
United Kingdom	1.5%	(9.8)%	5.9%
United States	2.2%	(4.3)%	3.1%
Canada	1.7%	(7.1)%	5.2%
Japan	0.7%	(5.3)%	2.3%
Developing economies (emerging markets)	3.7%	(3.3)%	6.0%
Emerging and developing Europe	2.1%	(4.6)%	3.9%
Russia	1.3%	(4.1)%	2.8%
China	6.1%	1.9%	8.2%
Mexico	(0.3)%	(9.0)%	3.5%
Brazil	1.1%	(5.8)%	2.8%
Source: IMF, October 2020 World Economic Outlook.
* Projections

is projected to be significantly lower at - 3.3% in the calendar year 2020 (2019: 3.7%) and improving to 6.0% in 2021. The overall development is affected by the uncertainties from the COVID-19 pandemic.

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BUSINESS AND GENERAL ENVIRONMENT

Development of vehicle markets

The global production of light vehicles in the last twelve months decreased significantly. The COVID-19 outbreak in 2020 is the main reason for this development. According to IHS forecasts as of October 2020, the global production of light vehicles is expected to decrease from

million units in calendar year 2019 to approximately 73.0 million vehicles in 2020, a decrease of -17.9%. Thus, in 2020, the output of new
passenger cars and light commercial vehicles in APAC is forecasted to
reach around 39.7 million vehicles (-14.1% versus 46.2 million units in 2019), approximately 18.0 million vehicles (- 22.1% versus 23.1 million units in 2019) in EMEA and around 15.3 million vehicles (- 21.9% versus

million units in 2019) in the Americas region.

Estimations of the German Association of the Automotive Industry (VDA) for the period January until September 2020 show a more and more uniform negative development of new car registrations in the major car markets due to the COVID-19 pandemic. New car registrations in Germany from January to September decreased by - 25% compared to the same period in 2019 while total Europe new car registrations were down by - 29%. The sales in the US light vehicle market shows a similar development with a decrease of -19% compared to the same period in 2019, whereas Japan decreased by -18%. China decreased by -13%.

According to information released by the China Association of Automobile Manufacturers (CAAM) for the period January until September 2020, the sales of passenger cars was down by -12.4% compared to the same period in 2019. Sale of SUVs and MPVs declined by - 5.5% and - 32.7% respectively in the same period.

Alternative Performance Measures (APMs) in the annual report of fiscal year 2020

In accordance with the European Securities and Markets Authority (ESMA) guidelines on Alternative Performance Measures, the Stabilus Group provides a definition, the rationale for use and a reconciliation of APMs used. The Group uses the following APMs: organic growth, adjusted EBIT, free cash flow (FCF), adjusted free cash flow and the net leverage ratio.

Production of light vehicles							T_002
IN MILLIONS OF UNITS PER CALENDAR YEAR	2019	2020**	2021**	2022**	2023**	2024**	2025**
EMEA	23.1	18.0	20.9	22.1	22.6	23.0	23.3
Americas	19.6	15.3	18.9	19.6	19.7	19.9	20.2
APAC	46.2	39.7	43.3	45.6	47.7	49.4	51.3
Worldwide production of light vehicles*	88.9	73.0	83.1	87.2	89.9	92.3	94.7

Source: IHS

Passenger cars and light commercial vehicles (<6t)
IHS forecast as of October 2020

In Germany, the German Department of Motor Vehicles (Kraftfahrt- Bundesamt, KBA), a government agency administering vehicle registrations publishes monthly statistics of new passenger car registrations, classified by car models and segment types. According to KBA statistics, there is a very strong decrease in the SUV segment of - 24.1% for the period January to September 2020, compared to the same period in 2019 while registrations for off-road vehicles recorded a decrease of -18.2% over the same period in comparison to 2019. The overall new car registrations decreased by - 25.5% in the period from January until September 2020.

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The calculation of the net leverage ratio is based on net financial debt and adjusted EBITDA, which are also considered APMs.

The APM organic growth is presented because we believe it aids in understanding our operating performance. We have modified this definition in the current financial year with regards to foreign exchange effects. In the past we have only reported at constant USD / EUR exchange rates for the NAFTA region. However, due to increasing impacts also from other foreign currencies we will determine organic growth based on all relevant foreign currencies.

The modified definition is as follows: Organic growth is defined as the reported revenue growth after removing the effects of acquisitions, divestitures and at constant foreign exchange rates. The effects resulting from constant foreign exchange rates are calculated as current year revenues converted at current year's exchange rates less current year revenues converted at prior year's exchange rates.

The definitions and required disclosures of all other APMs are provided in the relevant sections of this annual report.

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BUSINESS AND GENERAL ENVIRONMENT

Change in the organizational structure since the beginning of fiscal year 2020

As of October 1, 2019, the Stabilus Group changed its organizational and management structure to better address the requirements of regions and markets. Stabilus continues focus on regions to manage its business. The change is that South America and the former NAFTA are now managed within Stabilus as Americas, and, consequently, South America is not part

of Asia / Pacific	anymore. As such the new regions are as follows:
--	EMEA:	Europe, Middle East and Africa
-- AMERICAS: North and South America
--	APAC:	Asia Pacific

These regions are the operating segments of the Stabilus Group. Further- more, the Industrial business will not be split into different business units anymore. We have merged the business units Vibration & Velocity Control and Industrial / Capital Goods into Industrial. This is to align the market approach for all industrial markets, e.g. to realize cross selling opportunities and to optimize cost structures in managing the industrial business. Consequently, Stabilus has three business units:

Automotive Gas Spring
Automotive Powerise®
Industrial

The presentation of prior year figures is adjusted to provide comparative information already reflecting the new structure.

Impact of COVID-19 on the Stabilus Group	maximum leverage ratio permitted under the senior facility agreement and
			opens the ability to issue promissory loan notes (Schuldscheindarlehen) up
Fiscal year 2020 was significantly affected by the COVID-19 crisis, which	to an aggregated amount of €150.0 million. The senior facility agreement,
had a negative on all regions and all our market segments in which we	as amended, provides additional financial stability.
operate, i.e. automotive and industrial business. In the first three quarters
of calendar year 2020 the macroeconomic environment and the global	At	the	balance sheet date,	the Group has	a committed revolving
economy as a whole were significantly impacted. This bears various risks	facility of €70.0 million (PY: €70.0 million). As at September 30, 2020,
for Stabilus, e.g. decreasing customer demand, shortages in the supply	the	Group	had	drawn	€29.9	million	under	the	committed
chain, governmentally enforced closure of plants, limited cost flexibility,	€70.0 million revolving credit facility. The Group utilized €0.8 million
devaluation of assets, cash shortages or the health of our employees.	out	of the	€70.0	million revolving	credit facility to	secure existing
			guarantees. Furthermore, the Group has the above mentioned undrawn
To mitigate the risks of the COVID-19 pandemic, Stabilus has implemented	committed credit line of €50.0 million (PY: €- million) (we refer to
a global multidisciplinary crisis management team that monitors and	Note 22). In the financial year 2020, the COVID-19 crisis did not have
analyzes	the situation on a local and a global level and is taking actions to	any material adverse effects on the	financial	stability	of the Stabilus
address and mitigate identified risks. Amongst others Stabilus has reduced	Group (details in Note 32). The financial covenants of the senior facility
capacities, e.g. by making use of short time work, furlough as well as	agreement were complied with any time (we refer to net leverage ratio
selected redundancies. In addition, Stabilus emphasizes on a very strict	on page 32).
monitoring of cost, liquidity as well as impairment risks. All employees
are well informed about safety measures in business and private life.	Due to the weak overall economy the Group's total revenue decreased
Also adjusted	shift patterns, increased offering of home office and pulling	by (13.6)% to €822.1 million in fiscal	year 2020. The decrease in Group
forward	of vacation, reduce the risk of the virus spreading further. Due to	revenue in fiscal year 2020 primarily occurred in EMEA by (14.7)% to
our rapid response to the new global situation and the effective rollout	€411.1 million, and in the Americas by (18.1)% to €299.6 million. The
of pandemic plans to all our locations we were able to effectively protect	revenue in APAC increased by 7.8% to €111.4 million.
our employees and maintain production without interruption. In fiscal
year 2020, Stabilus received government grants for social security	This global market development is also reflected in the development	of the
contributions	and rental subsidies due to the impact of COVID-19 with	market segments in which we operate.The Automotive Gas Spring business
an amount of €4.4 million. These grants are directly recognized in the	was strongly impacted by the COVID-19 crisis and decreased by (19.1)%
various functional areas in which they were incurred as a direct deduction	to €268.0 million and the Automotive Powerise® business decreased
from the related expenses. Furthermore, Stabilus received reimbursements	by (13.2)% to €217.0 million. The decline in the Automotive Powerise®
for short time work of €3.9 million (set out in Note 5).	business	is lower than in the Automotive Gas Spring business which is a
			result of the rising demand for Automotive Powerise® in our Chinese	entity
On July 31, 2020, the Group signed an amendment of the senior facility	which led to an increase of revenue by €8.1 million compared	to prior year.
agreement dated June 7, 2016, to prepare for potential future challenges	Currently, Stabilus is in the process of setting up a dedicated Powerise®
from the COVID-19 crisis. The amendment provides for an additional	production building in Pinghu, China, besides already existing Powerise®
committed credit line of €50.0 million, a temporary increase of the	plants in Mexico and Romania.

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BUSINESS AND GENERAL ENVIRONMENT

RESULTS OF OPERATIONS

Our Industrial business was also impacting from the COVID-19 crisis,

the revenue decreased by (8.9)% to €337.1 million. The smaller decline in the industrial business compared to the automotive business reflected the high diversification of the product portfolio and of our broad customer portfolio in the industrial sector which helps to mitigate the impact.

The Group tested impairments on goodwill, development cost and other non-financial assets on an annual basis, or if there is an

indication that the carrying amount may not be recoverable. Based on the triggering event "COVID-19" the Group has performed

impairment tests, especially for goodwill and for other intangible

assets from purchase price allocations. For goodwill no impairment has to be recognized in fiscal year 2020. However the headroom's have decreased; the underlying assumptions are described in Note 13. For other intangible assets the Group accounted in the third quarter of fiscal year 2020 a non-cash impairment of €25.7 million, related to our aerospace business which is heavily impacted by the COVID-19 crisis. This primarily lead to reduced demand of our products for the

For the fiscal year 2021, we expect revenue of €850 million to €900 million and an adjusted EBIT margin of between 12% and 13%. These assumptions are based on a stabilizing global economy and the expected recovery in global automotive production and no further unexpected impacts of the COVID-19 pandemic.

The consolidated financial statements have been prepared under the going concern assumption. From the current perspective there are no risks to the continued existence of the Stabilus Group.

RESULTS OF OPERATIONS

The table below sets out Stabilus Group's consolidated income statement for the fiscal year 2020 in comparison to the fiscal year 2019:

Income statement	T _ 003

Year ended Sept 30,

aviation industry due to reduced production of aircrafts and fewer retrofits of existing aircrafts. However, we are confident that the aerospace business is still an excellent addition to Stabilus´ motion control portfolio with future growth potential.

The impairment test for fiscal year 2020 confirms that the book value of goodwill is fully recoverable and that the goodwill attributable to the individual operating CGUs is not impaired. In addition, no further other intangible assets from purchase price allocations have been impaired.

The overall impact of the COVID-19 crisis is also affecting our net profit in fiscal year 2020, which declined from €80.9 million in fiscal year 2019 by €(50.9) million to €30.0 million in the current financial

year. The decline contains the non-cash impairment from other intangible assets of €(18.0) million (net of tax).

IN € MILLIONS	2020
Revenue	822.1
Cost of sales	(590.6)
Gross profit	231.5
Research and development expenses	(40.6)
Selling expenses	(106.1)
Administrative expenses	(35.5)
Other income	8.9
Other expenses	(2.1)
Profit from operating activities (EBIT)	56.1
Finance income	2.3
Finance costs	(11.0)
Profit / (loss) before income tax	47.4
Income tax income / (expense)	(17.4)
Profit / (loss) for the period	30.0

2019		Change	% change

951.3	(129.2)	(13.6)%

(675.0)	84.4	(12.5)%

276.4	(44.9)	(16.2)%

(39.2)	(1.4)	3.6%

(84.2)	(21.9)	26.0%

(35.7)	0.2	(0.6)%

8.3	0.6	7.2%

(1.7)	(0.4)	23.5%

124.0	(67.9)	(54.8)%

1.3	1.0	76.9%

(10.4)	(0.6)	5.8%

114.9	(67.5)	(58.7)%

(34.0)	16.6	(48.8)%

80.9	(50.9)	(62.9)%

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Revenue

Group's total revenue developed as follows:

Revenue by region and business unit										T _ 004

		Year ended Sept 30,
										% acquisition		% currency		% organic

IN € MILLIONS	2020		2019		Change		% change		effect		effect		growth

EMEA

Automotive Gas Spring	111.7		145.4	(33.7)	(23.2%)		-	0.0%	(23.2%)

Automotive Powerise®	84.2		98.1	(13.9)	(14.2%)		-	(1.7%)	(12.5%)

Industrial2)	215.2		238.6	(23.4)	(9.8%)	4.6%	(0.1%)	(14.3%)

Total EMEA1)	411.1		482.1	(71.0)	(14.7%)	2.3%	(0.4%)	(16.6%)

Americas

Automotive Gas Spring	88.2		118.9	(30.7)	(25.8%)		-	(2.7%)	(23.1%)

Automotive Powerise®	105.7		133.0	(27.3)	(20.5%)		-	(6.7%)	(13.8%)

Industrial2)	105.7		114.0	(8.3)	(7.3%)	0.6%	(0.2%)	(7.7%)

Total Americas1)	299.6		365.9	(66.3)	(18.1%)	0.2%	(3.4%)	(14.9%)

APAC

Automotive Gas Spring	68.1		67.1	1.0	1.5%		-	(1.0%)	2.5%

Automotive Powerise®	27.1		19.0	8.1	42.6%		-	(1.8%)	44.4%

Industrial2)	16.2		17.2	(1.0)	(5.8%)		-	(1.3%)	(4.5%)

Total APAC1)	111.4		103.3	8.1	7.8%		-	(1.2%)	9.0%

Stabilus Group

Total Automotive Gas Spring	268.0		331.4	(63.4)	(19.1%)		-	(1.2%)	(17.9%)

Total Automotive Powerise®	217.0		250.0	(33.0)	(13.2%)		-	(4.3%)	(8.9%)

Total Industrial2)	337.1		369.9	(32.8)	(8.9%)	3.2%	(0.2%)	(11.9%)

Revenue1)	822.1		951.3	(129.2)	(13.6%)	1.2%	(1.6%)	(13.2%)

Revenue breakdown by location of Stabilus company (i.e. "billed-from view").
As of October 1, 2019, our Vibration & Velocity business and Industrial / Capital Goods business units were combined into the Industrial business. The presentation of prior-year figures was changed accordingly.

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Total revenue of €822.1 million in fiscal year 2020 decreased by €(129.2) million or (13.6)% compared to the fiscal year 2019. The Group´s organic growth in fiscal year 2020 was €(125.3) million or (13.2)%. The entities acquired in fiscal year 2019 (General Aerospace in April 2019, Clevers and Piston in July 2019) contributed €11.7 million revenue to the organic growth in fiscal year 2020, while the effect from exchange rate movements amounted to €(15.5) million.

The decline in Group revenue in fiscal year 2020 primarily occurred in EMEA (€(71.0) million or (14.7)%, organic growth rate (16.6)%) and in the Americas (€(66.3) million or (18.1)%, organic growth rate (14.9)%). Meanwhile, revenue in APAC increased by €8.1 million or 7.8%. APAC´s organic growth rate was 9.0%.

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RESULTS OF OPERATIONS

Cost of sales and overhead expenses

Cost of sales

Cost of sales decreased from €(675.0) million in fiscal year 2019 by (12.5)% to €(590.6) million in fiscal year 2020, primarily due to decreased revenue. The decrease in cost of sales (12.5)% is lower than the decrease in revenue (13.6)%. This is reflecting a weaker fixed cost absorption as certain fixed cost elements are not reduced in line with revenue and impairment losses on other intangible assets amounting to €(1.3) million are recognized in cost of sales. The Group took stringent cost saving measures to address the COVID-19 impact on the business. Cost savings are e.g. realized by aligning the headcount structure in all regions, to the reduced business volume. Cost of sales as a percentage of revenue increased by 80 basis points to 71.8% (PY: 71.0%) and the gross profit margin declined to 28.2% (PY: 29.1%).

R&D expenses

R&D expenses (net of R&D cost capitalization) increased by 3.6% from €(39.2) million in fiscal year 2019 to €(40.6) million in fiscal year 2020 and reflecting our innovative R&D focused business approach.

The capitalizationof R&D expenses (less related customer contribution) increased from €(14.2) million in fiscal year 2019 to €(16.7) million in fiscal year 2020. This increase reflects especially the project specific

developmentactivities for our Powerise® business as well as the increased engineering activities to develop new products and product applications to open new areas of business for Stabilus. In addition, the increase is due to the non-recurring impairment charges of €2.3 million in fiscal year 2020 compared to €0.4 million in fiscal year 2019. Furthermore, the acquired entities General Aerospace and Piston contributed €0.5 million to the €1.4 million increase. As a percentage of revenue, R&D expenses increased by 80 basis points to 4.9% (PY: 4.1%).

Selling expenses

Selling expenses increased from €(84.2) million in fiscal year 2019 by 26.0% to €(106.1) million in fiscal year 2020. This increase is primarily due to an impairment loss on customer relationships in the aerospace business amounting to €(24.4) million. Excluding the effect from this impairment the selling expenses decreased by €2.5 million in fiscal year 2020 compared to fiscal year 2019.The acquired entities (General Aerospace, Clevers and Piston) contributed expenses of €1.9 million to the development of the selling expenses. As a percentage of revenue, selling expenses increased

by 400 basis points to 12.9% (PY: 8.9%). Excluding the impairment losses on intangible assets, the selling expenses (as percentage of revenue) increased by 100 basis points to 9.9%.

Administrative expenses

Administrative expenses decreased slightly from €(35.7) million in fiscal year 2019 by (0.6)% to €(35.5) million in fiscal year 2020. The acquired entities (General Aerospace, Clevers and Piston) contributed expenses of €0.9 million in fiscal year 2020. The prior year includes €0.7 million advisory costs related to the acquisitions of General Aerospace, Clevers and Piston. As a percentage of revenue, administrative expenses increased by 50 basis points to 4.3% (PY: 3.8%).

Other income and expense

Other income increased from €8.3 million in fiscal year 2019 by €0.6 million to €8.9 million in fiscal year 2020. Other income includes a non-recurring effect of €3.0 million (PY: €3.3 million) from a purchase price adjustment related to the acquisitions of General Aerospace and

Piston . The increase is due to the foreign currency translation gains from the operating business amounting to €1.2 million.

Other expense increased from €(1.7) million in fiscal year 2019 by €(0.4) million to €(2.1) million in fiscal year 2020.

Finance income and costs

Finance income increased from €1.3 million in fiscal year 2020 to €2.3 million in fiscal year 2020. The increase is mainly due to net foreign exchange gains amounting to €0.9 million from the translation of intragroup loans, cash and cash equivalents and financial liabilities.

Finance costs increased from €(10.4) million in fiscal year 2019 to €(11.0) million in fiscal year 2020. The increase is primarily due to the initial application of IFRS 16 (Leases) which results in an additional €(1.5) million (PY: €- million) interest expense. In addition, €(0.9) million (PY: €(1.1) million relates to the derecognition of unamortized debt issuance costs and unamortized adjustments of the carrying value from a voluntary prepayment of the term-loan facility in February 2020.

Finance costs primarily contain ongoing interest expense. Interest expense in fiscal year 2020 of €(10.3) million (PY: €(9.7) million) are especially related to the term-loan facility, of which €(4.8) million (PY: €(3.6) million) is cash interest, the current fiscal year includes €(1.5) million interest expenses from IFRS 16. In addition, an amount of €(5.5) million (PY: €(6.1) million) is due to the amortization of debt issuance cost and the amortization of the adjustment of the carrying value using the effective interest rate method.

Income tax expense

The tax expense decreased from €(34.0) million in fiscal year 2019 to €(17.4) million in fiscal year 2020. The Group´s effective tax rate in fiscal year 2020 is 36.7% (PY: 29.6%). In fiscal year 2020 the effective tax rate is negatively affected by withholding tax charges on intragroup dividend payments mainly from Mexico, US and China. For ongoing tax audits for fiscal years 2017 to 2019 the Group recognized an income tax liability.

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Reconciliation of EBIT to adjusted EBIT

The following table shows a reconciliation of EBIT (earnings before interest and taxes) to adjusted EBIT for the fiscal years 2020 and 2019:

Reconciliation of EBIT to adjusted EBIT	T _ 005

Year ended Sept 30,

E ADDITIONAL INFORMATION

IN € MILLIONS	2020
Profit from operating activities (EBIT)	56.1
PPA adjustments - depreciation and amortization	17.9
PPA adjustments - impairment on intangible assets	25.7
Environmental protection measures	-
Advisory	-
Purchase price adjustment	(3.0)
Adjusted EBIT	96.7

2019	Change	% change
124.0	(67.9)	(54.8)%
19.8	(1.9)	(9.6)%
-	25.7	n/a
1.5	(1.5)	(100.0)%
0.7	(0.7)	(100.0)%
(3.3)	0.3	(9.1)%
142.7	(46.0)	(32.2)%

Adjusted EBIT represents 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 (PPAs).

Adjusted EBIT is presented because we believe it helps understanding our operating performance.

The PPA adjustments for depreciation and amortization in fiscal year 2020 amounted to €17.9 million (PY: €19.8 million). Thereof, €7.0 million (PY: €9.3 million) stem from the April 2010 PPA and €8.4 million (PY: €8.4 million) result from the June 2016 PPA.

Furthermore, €2.5 million (PY: €2.1 million) arise from the acquisitions in fiscal year 2019 (General Aerospace in April, Piston and Clevers in July).

The PPA adjustment for impairments of other intangible assets, predominantly of customer relationships, amounted to €25.7 million in fiscal year 2020.

In addition, the purchase price adjustment amounting to €(3.0) million (PY: €(3.3) million) in the current year relates almost exclusively to a purchase price reduction from the acquisition of General Aerospace.

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DEVELOPMENT OF OPERATING SEGMENTS

The Stabilus Group is organized and managed primarily on a regional level. The three reportable operating segments of the Group are EMEA (Europe, Middle East and Africa), Americas (North and South America) and APAC (Asia Pacific).

The table below sets out the development of our operating segments for the fiscal years 2020 and 2019:

The external revenue generated by our companies located in the EMEA region decreased from €482.1 million in fiscal year 2019 by (14.7)% or €71.0 million to €411.1 million in fiscal year 2020. The acquired

entities General Aerospace and Piston contributed €11.1 million to the revenue growth in EMEA and the currency translation effect amounted to €(1.9) million resulting in an organic growth rate of (16.6)%. The reduction is mainly driven by our Automotive Gas Spring business, which decreased

from €145.4 million by (23.2)% or €(33.7) million to €111.7 million. Organic growth of the Automotive Gas Spring business was (23.2)%.

Operating segments	T _ 006

Year ended Sept 30,

Our Automotive Powerise® business decreased from €98.1 million by (14.2)% or €(13.9) million to €84.2 million. The organic growth rate of the Automotive Powerise® business was (12.5)%. In the first half of

IN € MILLIONS	2020
EMEA
External revenue1)	411.1
Intersegment revenue1)	25.9
Total revenue1)	437.0
Adjusted EBIT	42.4
as % of total revenue	9.7%
as % of external revenue	10.3%
Americas
External revenue1)	299.6
Intersegment revenue1)	20.6
Total revenue1)	320.2
Adjusted EBIT	40.3
as % of total revenue	12.6%
as % of external revenue	13.5%
APAC
External revenue1)	111.4
Intersegment revenue1)	0.2
Total revenue1)	111.6
Adjusted EBIT	14.0
as % of total revenue	12.5%
as % of external revenue	12.6%

2019		Change	% change


482.1	(71.0)	(14.7)%

28.6	(2.7)	(9.4)%

510.7	(73.7)	(14.4)%

68.4	(26.0)	(38.0)%

13.4%

14.2%


365.9	(66.3)	(18.1)%

24.7	(4.1)	(16.6)%

390.7	(70.5)	(18.0)%

61.8	(21.5)	(34.8)%

15.8%

16.9%


103.3	8.1	7.8%

0.1	0.1	100.0%

103.4	8.2	7.9%

12.6	1.4	11.1%

12.2%

12.2%

fiscal year 2020 the ongoing weak light-vehicle production in Europe influenced our business. Since April 2020 this was significantly intensified by the COVID-19 crisis which started in February and strongly influenced our business, especially in the third quarter of fiscal year 2020. To address the general weak demand from the COVID-19 crisis various stimulus programs from governments were initiated aiming to support the recovery in the global economy. These measures resulted in a first increase in demand and a slight market recovery in the fourth quarter of fiscal year 2020. The Industrial business decreased from €238.6 million by (9.8)% or €(23.4) million to €215.2 million, the entities acquired in the third quarter of fiscal year 2019, i.e. General Aerospace and Piston, contributed €11.1 million to the revenue of the Industrial business. Organically, the Industrial business decreased by (14.3)%. This slowdown in the Industrial business reflects the continuously weak macroeconomic environment and the omnipresent effects from the global COVID-19 crisis. Our broad customer portfolio in the industrial sector helps to mitigate the impact of this weaker demand. The adjusted EBIT of the EMEA segment decreased by (38.0)% or €(26.0) million and the adjusted EBIT margin, i.e. adjusted EBIT in percent of external revenue, decreased in fiscal year 2020 to 10.3% (PY: 14.2%).

Revenue breakdown by location of Stabilus company (i.e. "billed-from view").

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E ADDITIONAL INFORMATION

The external revenue of our companies located in Americas decreased from €365.9 million in fiscal year 2019 by (18.1)% or €(66.3) million to €299.6 million in fiscal year 2020.The currency translation effectamounted to €(12.3) million and especially stems from the weak Mexican peso and revenue of €0.7 million from the Clevers acquisition. This led to an organic growth rate of (14.9)%. The Automotive Gas Spring business decreased from €118.9 million by (25.8%) or €(30.7) million to €88.2 million, the organic growth rate was (23.1)%. The Automotive Powerise® business decreased from €133.0 million by (20.5)% or €(27.3) million to €105.7 million and decreased (13.8)% organically. The Automotive

business was also strongly impacted by the COVID-19 crisis leading to plant closures from end of March until mid of May. In the fourth quarter of fiscal year 2020, the US light-vehicle market recovered with stronger sales in the private car sector as well as in the commercial vehicle market. The economic environment is still difficult and challenging and influenced by stimulus packages from various

governmentsand the - at that time - upcoming election in the US. Our Industrial business decreased from €114.0 million by (7.3%) or €(8.3) million to €105.7 million. The decline in the industrial business is

smaller than in the automotive business. The industrial business benefits from the diversification of the product portfolio e.g. growth in the solar damper and e-commerce business, which was more than offset by the independent aftermarket segment. Organically, the Industrial business

decreased by (7.7)%. The adjusted EBIT of the Americas segment decreased by (34.8)% or €(21.5) million and the adjusted EBIT margin decreased in fiscal year 2020 to 13.5% (PY: 16.9%).

The external revenue of our companies located in APAC increased from €103.3 million in fiscal year 2019 by 7.8% or €8.1 million to €111.4 million in fiscal year 2020. The currency translation effect amounted to €(1.3) million and led to an organic growth rate for APAC of 9.0%. This increase was mainly driven by the Automotive Powerise® business, which increased by 42.6% or €8.1 million to €27.1 million, the organic growth rate was 44.4%. In addition, the Automotive Gas

Spring business increased slightly from €67.1 million by 1.5% or €1.0 million to €68.1 million. The organic growth rate was 2.5%. The Industrial business decreased slightly from €17.2 million by (5.8)% or €(1.0) million to €16.2 million. The organic growth rate of the Industrial business was (4.5)%. The overall positive development especially in China, with stronger sales and wins of new OEM platforms in the region, was stopped by the temporary closure of production facilities in February and March, initiated by the government as a consequence of COVID-19. Following the reopening of the production facilities in APAC the auto-

motive production is stabilizing with constant rising demand, especially in China. The government in China initiated several funding programs to alleviate the impact of the COVID-19 pandemic on the overall economy. In particular the automotive market benefits strongly from the stabilization programs. Nevertheless, the market environment is challenging especial-

ly driven by international trade conflicts between the US and China.The adjusted EBIT of the APAC segment increased by 11.1% or €1.4 million and the adjusted EBIT margin increased in fiscal year 2020 to 12.6% (PY: 12.2%).

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FINANCIAL POSITION

Balance sheet				T _ 007
IN € MILLIONS	2020	2019	Change	% change
Assets
Non-current assets	678.2	706.0	(27.8)	(3.9)%
Current assets	405.4	393.2	12.2	3.1%
Total assets	1,083.6	1,099.2	(15.6)	(1.4)%
Equity and liabilities
Total equity	469.6	499.6	(30.0)	(6.0)%
Non-current liabilities	425.5	428.2	(2.7)	(0.6)%
Current liabilities	188.4	171.4	17.0	9.9%
Total liabilities	614.0	599.6	14.4	2.4%
Total equity and liabilities	1,083.6	1,099.2	(15.6)	(1.4)%

dividends amounting to €(27.2) million paid to our shareholders in the second quarter of fiscal year 2020. This was offset by the profit in fiscal year 2020 of €30.0 million.

Non-current liabilities

Non-current liabilities decreased slightly from €428.2 million as of September 30, 2019, by (0.6)% or €(2.7) million to €425.5 million as of September 30, 2020. Our other financial liabilities increased due to the initial application of IFRS 16, amounting to €36.9 million, and due to new leasing contracts with an amount of €3.5 million.This increase was more than offset from a voluntary prepayment of the term-loan facility amounting to €(20.0) million in February and from the derecognition of deferred tax liabilities of €(7.7) million relating to the impairment of intangible assets. In addition, the decrease is due to a reclassification of financial liabilities from long-term to short-term amounting to €3.0 million. Furthermore, pension liabilities decreased by €(2.9) million as a consequence of the increased discount rate (September 30, 2020: 1.14% versus September 30, 2019: 0.93%). The amortization of debt issuance costs and the amortization of the adjustment of the carrying value using the effective

Total Assets

The Group's balance sheet total decreased from €1,099.2 million as of September 30, 2019, by (1.4)% to €1,083.6 million as of September 30, 2020.

Non-current assets

Our non-current assets decreased from €706.0 million as of September 30, 2019, by (3.9)% or €(27.8) million to €678.2 million as of September 30, 2020. This decrease is especially driven by the impairment losses of €(25.7) million and ongoing amortization of €(17.8) million on other intangible assets from purchase price allocations but also to foreign exchange rate-related carrying value adjustments, e.g. decrease in goodwill of €(7.1) million. This was partly offset by the recognition of right-of-use

assets from operating leases due to the initial application of IFRS 16 amounting to €43.7 million as well as from new leasing contracts in fiscal year 2020 amounting to €4.5 million. The Group invested €29.9 million in property, plant and equipment for ongoing capacity expansion projects.

Current assets

Current assets increased from €393.2 million as of September 30, 2019, by 3.1% or €12.2 million to €405.4 million as of September 30, 2020. This was primarily driven by an increase of the cash balance amounting to €23.4 million. Furthermore, current tax assets increased by €4.6 million and other financial assets increased by €2.5 million. This was partly offset by the decrease in trade accounts receivable amounting to €(13.2) million due to weaker sales reflecting the COVID-19 crisis. In addition, inventories decreased by €(3.1) million.

Equity

The Group's equity decreased from €499.6 million as of September 30, 2019, by €(30.0) million to €469.6 million as of September 30, 2020. This results from other comprehensive expenses amounting to €(32.8) million especially from unrealized losses from foreign currency translation amounting to €(34.2) million (detailed in Note 21). In addition,

interest rate method amount to €4.3 million.

Current liabilities

Current liabilities increased from €171.4 million as of September 30, 2019, by €17.0 million or 9.9% to €188.4 million as of September 30, 2020. This increase is due to a sharp rise of our financial liabilities by €31.5 million which mainly resulted from the partial drawdown of our revolving credit facility of €29.9 million and from a reclassification of financial liabilities from long-term to short-term amounting to €3.0 million. In addition, other financial liabilities increased by €6.2 million, especially from the initial application of IFRS 16. This was partially offset by decreased trade accounts payables amounting to €(19.9) million as a consequence of reduced business volume and by decreased current tax liabilities amounting to €(3.4) million.

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LIQUIDITY

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LIQUIDITY

Cash flow from operating activities

Cash flow from operating activities decreased from €145.4 million in fiscal year 2019 by €(36.5) million or (25.1)% to €108.9 million in fiscal year 2020, mainly reflecting a reduced business volume. The operating cash flow of the current fiscal year compared to last fiscal year is influenced by the initial application of IFRS 16 amounting to €9.7 million (see cash flow from financing activities).

Cash flow from investing activities

Cash outflow for investing activities decreased from €(96.9) million in fiscal year 2019 by €49.2 million or (50.8)% to €(47.7) million in fiscal year 2020. This decrease is mainly attributable to the business combinations from prior year amounting to €41.4 million (net of cash acquired). In addition, the decrease is due to lower capital expenditures in property, plant and equipment which decreased by €(11.5) million to €29.9 million

Cash flows

reflecting the stringent cash management during the COVID-19 crisis. This was offset by an increased cash outflow for intangible assets of €2.5 million to €17.7 million. Furthermore, a payment of €(1.1) million relates to the July 2019 acquisition of Piston.

Cash flow from financing activities

Cash outflow from financing activities decreased from €(54.2) million in fiscal year 2019 by €22.3 million or (41.1)% to €(31.9) million in fiscal year 2020. This is generally driven by the partial drawdown of the revolving credit facility amounting to €29.9 million (PY: €- million). This is partly offset by payments for lease liabilities of €(8.2) million (PY: €0.4 million) and to interest expenses on lease liabilities amounting to €(1.5) million (PY: €0.0 million), substantially resulting from the initial application of IFRS

16. As last year we repaid senior facilities amounting to €20.0 million (PY: €21.1 million). Furthermore, we paid higher dividends of €(27.2) million (PY: €(24.7) million) to our shareholders. In addition, we repaid financial liabilities amounting to €(1.6) million in fiscal year 2020 (PY: €3.7 million).

T _ 008

	Year ended Sept 30,

IN € MILLIONS	2020	2019		Change	% change

Cash flow from operating activities	108.9	145.4	(36.5)	(25.1%)

Cash flow from investing activities	(47.7)	(96.9)	49.2	(50.8%)

Cash flow from financing activities	(31.9)	(54.2)	22.3	(41.1%)

Net increase / (decrease) in cash	29.3	(5.7)	35.0	<(100.0)%

Effect of movements in exchange rates on cash held	(5.9)	1.7	(7.6)	<(100.0)%

Cash as of beginning of the period	139.0	143.0	(4.0)	(2.8%)

Cash as of end of the period	162.4	139.0	23.4	16.8%

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LIQUIDITY

Free cash flow (FCF)

Free cash flow (FCF) is defined as the total of cash flow from operating and investing activities. The Group considers FCF as an essential alternative performance measure as it aids in the evaluation of the Group´s ability to

generate cash which can be used, among others, for further investments. The following table sets out the composition of FCF:

Free cash flow	T _ 009

IN € MILLIONS

Cash flow from operating activities

Cash flow from investing activities

Free cash flow

Year ended Sept 30,
2020	2019	Change	% change
108.9	145.4	(36.5)	(25.1)%
(47.7)	(96.9)	49.2	(50.8)%
61.2	48.5	12.7	26.2%

Adjusted free cash flow

Adjusted free cash flow is defined as the total of cash flow from operating and investing activities before acquisitions. The adjusted free cash flow

decreased from €89.9 million in fiscal year 2019 to €62.3 million in fiscal year 2020.

Adjusted free cash flow	T _ 010

IN € MILLIONS

Cash flow from operating activities

Cash flow from investing activities before acquisitions

Adjusted FCF

Year ended Sept 30,
2020	2019	Change	% change
108.9	145.4	(36.5)	(25.1)%
(46.6)	(55.5)	8.9	(16.0)%
62.3	89.9	(27.6)	(30.7)%

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LIQUIDITY

Net leverage ratio

The net leverage ratio is defined as net financial debt divided by adjusted

EBITDA.

Net financial debt is the nominal amount of financial debt, i.e. current and non-current financial liabilities, less cash and cash equivalents. Adjusted EBITDA is defined as adjusted EBIT before depreciation / amortization and before exceptional non-recurring items (e.g. restructuring or one-time advisory costs).

Net leverage ratio

The net leverage ratio is presented because we believe it is a useful indicator to evaluate the Group's debt leverage and financing structure.

The net leverage ratio increased from 1.0x in fiscal year 2019 to 1.2x in fiscal year 2020. See the following table:

T _ 011

	Year ended Sept 30,

IN € MILLIONS	2020		2019		Change	% change

Financial debt	334.7		328.1	6.6	2.0%

Cash and cash equivalents	(162.4)		(139.0)	(23.4)	16.8%

Net financial debt	172.3		189.1	(16.8)	(8.9%)

Adjusted EBITDA	148.9		183.2	(34.3)	(18.7%)

Net leverage ratio	1.2x	1.0x

Financial debt						T_012

	Year ended Sept 30,
IN € MILLIONS	2020	2019
Financial liabilities (non-current)	288.1	308.8
Financial liabilities (current)	34.3	2.8
Adjustment carrying value	12.3	16.5
Financial debt	334.7	328.1

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STATUTORY RESULTS OF OPERATIONS

AND FINANCIAL POSITION OF STABILUS S. A.

RISKS AND OPPORTUNITIES

Adjusted EBITDA	T _ 013

Year ended Sept 30,

The Company's capital and reserves decreased from €576.1 million as of September 30, 2019, to €547.0 million as of September 30, 2020, due to the dividend payment to our shareholders of €(27.2) million and due to

IN € MILLIONS	2020
Profit from operating activities (EBIT)	56.1
Depreciation	35.9
Amortization	34.2
PPA adjustments - impairment on
intangible assets	25.7
EBITDA	151.9
Advisory	-
Environmental protection measures	-
PPA adjustments - inventory step-up	-
Purchase price adjustment	(3.0)
Adjusted EBITDA	148.9

2019		Change		% change

124.0	(67.9)	(54.8)%

26.8	9.1	34.0%

32.8	1.4	4.3%

-	25.7		n/a

183.6	(31.7)	(17.3)%

0.7	(0.7)	(100.0)%

1.5	(1.5)	(100.0)%

0.7	(0.7)	(100.0)%

(3.3)	0.3	(9.1)%

183.2	(34.3)	(18.7)%

the loss for the fiscal year 2020 amounting to €(1.9) million.

RISKS AND

OPPORTUNITIES

Risk management and control over financial reporting in the Stabilus Group

The Company considers Risk Management (RM) to be a key part of effective

management and internal control. The Company strives for effective RM and financial navigation to safeguard the assets of the Company and to proactively support the Company's strategic and compliance initiatives.

STATUTORY RESULTS OF OPERATIONS AND FINANCIAL POSITION OF STABILUS S. A.

For the statutory annual accounts of Stabilus S. A., please refer to Chapter D.

Results of operations

The Company's income amounts to €4.2 million (PY: €3.9 million) and results from services that are provided to other Stabilus Group entities based on service level agreements.

Other external expenses decreased slightly from €2.9 million in fiscal year 2019 to €2.8 million in fiscal year 2020 mainly due to reduced consulting fees.

The loss for fiscal year 2020 amounted to €(1.9) million (PY: €1.1 million).

Financial position

Total assets decreased from €577.9 million as of September 30, 2019, to €549.3 million as of September 30, 2020.

Fixed assets essentially comprise shares in affiliated undertakings which decreased from €553.4 million as of September 30, 2019, to €545.9 million as of September 30, 2020. The Company decreased its investment in Stable

S. à r. l. by distributing €7.5 million out of the share premium account of Stable II S. à r. l. in February 2020 and Blitz F10 neun GmbH liquidated during financial year 2020.

Current assets decreased from €24.2 million as of September 30, 2019, to €3.2 million as of September 30, 2020. This was driven by a decrease in the cash balance by €20.5 million which reflects the dividend payment of €(27.2) million which was partly offset by the distribution from affiliated companies.

The goal of RM is to help the Company to operate more effectively in a

dynamic environment by providing a framework for a systematic approach to risk management and exploring opportunities with an acceptable level of risk. The Supervisory Board and the Management Board regularly discuss the operational and financial results as well as the related risks.

Risk management covers financial, strategic, compliance as well as operational aspects. Operational risk is the risk of direct or indirect

loss arising from a wide variety of causes associated with the Group's processes, personnel, technology and infrastructure, and from external factors other than credit, market and liquidity risks such as those arising from legal and regulatory requirements and generally accepted standards of corporate behavior. These operational risks arise from all of the Group's operations. The Group's objective is to manage operational risk in a way to balance the avoidance of financial losses and damage to the Group's reputation with overall cost effectiveness, as well as avoiding control

procedures that restrict initiative and creativity. The Company's policy on managing financial risks seeks to ensure effective liquidity and cash flow

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management and protection of Group equity capital against financial risks. As part of its evolution, the Company implements continuous improvements in its risk management and internal control systems.

Our accounting control system is designed to ensure all business transactions are correctly and promptly accounted for and that reliable data on the Company's financial situation is available. It ensures

compliance with legal stipulations, accounting standards and accounting rules. By separating financial functions and through ongoing review, we ensure that potential errors are identified on a timely basis and accounting standards are complied with.

Our internal control system is an integral component of the risk management.

The purpose of our internal control system for accounting and reporting is to ensure its compliance with legal stipulations, the principles of proper accounting, the rules on the International Financial Reporting Standards as adopted by the EU and with Group standards. In addition, we perform

assessmentsto help identify and minimize any risk with a direct influence on our financial reporting. We monitor changes in accounting standards and enlist the advice of external experts to reduce the risk of accounting misstatements in complex issues.

The Company and individual entity financial statements are subject to external audits which act as an independent check and monitoring

mechanism of the accounting system and its output. The principal risks that could have a material impact on the Group are set out in the Note 32 of the consolidated financial statements and are summarized below.

Risks and opportunities related to the markets in which we operate

We are exposed to risks and opportunities associated with the performance of the global economy and the performance of the economy in the jurisdictions in which we operate.

Due to our global presence, we are exposed to substantial risks and

opportunitiesassociated with the performance of the global economy. In general, demand for our products is dependent on the demand for automotive products as well as for commercial vehicles, agricultural machinery, medical equipment, renewable energy (in particular solar, wind), aerospace, marine and furniture components, which in turn is directly related to the strength of the global economy. Therefore, our financial performance has been influenced, and will continue to be influenced, to a significant extent, by the general state and the performance of the global economy.

Although the global economy has recovered a lot from the severe downturn in 2008 and 2009, the recent volatility of the financial markets and also the slower than expected economic growth in Asia show that there can be no assurance that any recovery is sustainable or that there will be no recurrence of the global financial and economic crisis or similar adverse market conditions. In addition, the current uncertainties in the market environment due to the COVID-19 crisis are still omnipresent and the economy recovered slightly. The overall development is affected by considerable uncertainties against the background on the course of the COVID-19 pandemic.

Stabilus manages these risks and opportunities by operating in different regions and markets for local and global customers.

We operate in cyclical industries

Our business is characterized by high fixed costs. Should our facilities be underutilized, this could result in idle capacity costs, write-offs of inventories and losses on products due to falling average sales prices. Furthermore, falling production volumes cause declines in revenue and earnings. On the other hand, our facilities might have insufficient capacity to meet customer demand if the markets in which we are active grow faster than we have anticipated.

Our automotive business, from which we generate 59% (PY: 61%) of our revenue in the fiscal year ended September 30, 2020, sells its products

primarily to automotive original equipment manufacturers ("OEMs") in the automotive industry. These sales are cyclical and depend, among other things, on general economic conditions as well as on consumer spending and preferences, which can be affected by a number of factors, including employment, consumer confidence and income, energy costs, interest rate levels and the availability of consumer financing. Given the variety of such economic parameters influencing the global automotive demand, the volume of automotive production has historically been, and will continue to be, characterized by a high level of fluctuation, making it difficult for us to accurately predict demand levels for our products aimed at automotive OEMs.

We generated, in the aggregate, 41% (PY: 39%) of our revenue in the fiscal year ended September 30, 2020, from sales to our industrial customers.We sell our products to customers in diverse industries, including

agriculturalmachines, renewable energy (in particular solar, wind), railway, aircraft applications, commercial vehicles, marine applications,

furniture, health care and production equipment. These sales depend on the industrial production level in general as well as on the development

of new products and technologies by our customers, which include our products as component parts. Stabilus manages these opportunities and risks by operating in different regions and markets for the local and global customers.

The business environment in which we operate is characterized by strong competition, which affects some of our products and markets, which could reduce our revenue or put continued pressure on our sales prices.

The markets in which we operate are competitive and have been characterized by changes in market penetration, increased price competition, the development and introduction of new products, product designs and technologies by significant existing and new competitors. The majority of gas springs and electromechanical lifting and closing systems manufactured globally are used for either automotive, industrial or commercial furniture applications, which are core markets for us. Our competitors are typically regional companies

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and our competition with them is generally on a regional scale. We compete primarily on the basis of price, quality, timeliness of delivery and design as well as the ability to provide engineering support and services on a global basis. Should we fail to secure the quality of our products and the reliability of our supply in the future, then more and more of our customers could decide to procure products from our competitors.

Our efforts to expand in certain markets are subject to a variety of business, economic, legal and political risks.

We manufacture our products in several countries, and we market and sell our products worldwide. We are actively operating and expanding our

operations in various markets, with a focus on the rapidly growing and emerging markets in the APAC region, where we have production plants in China and South Korea, operate a wide network of representative sales offices and employ our own sales force and distribution network. We plan to expand our Asian production capacities to meet growth expectations and supplement demand with our other regional production plants as needed.

Potential social, political, legal, and economic instability may pose

significant risks to our ability to conduct our business and expand our activities in certain markets. Inherent in our international operations is the risk that any number of the following circumstances could affect our operations: underdeveloped infrastructure; lack of qualified management or adequately trained personnel; currency exchange controls; exchange rate fluctuations and devaluations; changes in local economic conditions; governmental restrictions on foreign investment, transfer or repatriation of funds; protectionist trade measures, such as anti-dumping measures, duties, tariffs or embargoes; prohibitions or restrictions on acquisitions or joint ventures; changes in laws or regulations and unpredictable or unlawful government actions; the difficulty of enforcing agreements and collecting receivables through foreign legal systems; variations in protection of intellectual property and other legal rights; potential nationalization of enterprises or other expropriations; and political or social unrest or acts of sabotage or terrorism. As personnel costs have a significant effect on our

business, we are also exposed to the risks of labor cost inflation and limited employment contract flexibility in the countries in which our production facilities are located and where we have sales personnel. Any of these risks could have a material adverse effect on our business, financial condition and results of operations.

We are exposed to opportunities and risks associated with market trends and developments

There can be no assurance that (i) we will be successful in developing new products or systems or in bringing them to market in a timely manner, or at all; (ii) products or technologies developed by others will not render our offerings obsolete or non-competitive; (iii) our customers will not substitute our products with competing products or alternate technologies (such as third-arm systems, hydraulic drives or hinge / direct drives); (iv) the market will accept our innovations; (v) our competitors will not be able to produce our non-patented products at lower costs than we can; and (vi) we will be able to fully adjust our cost structure in the event of contraction of demand.

The Company develops appropriate strategies as a response to these or similar market trends and to enhance existing products, develop new

products or keep pace with developing technologies, to counter loss of growth opportunities, pressure on margins or the loss of existing customers. We devote resources to the pursuit of new technologies and products. In addition, technological advances and wider market acceptance of our Powerise® automatic drive systems (or the development and wider market acceptance of similar automatic lid drive systems by our competitors) could result in cannibalization of our gas spring applications.

Risks and opportunities related to our business

We are exposed to fluctuations in prices of prefabricated materials and components.

We procure large quantities of prefabricated materials and components from third-party suppliers. The prices of prefabricated materials,

components and manufacturing services we purchase from our suppliers depend on a number of factors, including to a limited extent the development of prices of raw materials used in these products, such as steel, copper, rubber and water, as well as energy, which have been volatile in the past.

So far, this has not resulted in a general increase in the cost of prefabricated materials and components we procure for the manufacture of our products. However, it cannot be excluded that this volatility may result in a cost increase in the future. If we are not able to compensate for or pass on our cost increases to customers, such price increases could have a material adverse impact on our financial results. Even to the extent that we are

successful in compensating for or passing on our increased costs to our customers by increasing prices on new products, the positive effects of

such price increases may not occur in the periods in which the additional expenses have been incurred, but in later periods. If costs of raw materials and energy rise, and if we are not able to undertake cost saving measures elsewhere in our operations or increase to an adequate level the selling prices of our products, we will not be able to compensate such cost increases, which could have a material adverse effect on our business,

financial condition and results of operations. The long-term increase of our costs (and resultant increase in the price of our products) may also negatively impact demand for our products.

Our future business success depends on our ability to maintain the high quality of our products and processes. For customers, one of the determining factors in purchasing our components and systems is the high quality of our products and manufacturing processes. A decrease in the actual and perceived quality of these products and processes could damage our image and reputation as well as those of our products. Any errors or delays caused by mistakes or miscalculations in our project management could negatively affect our customers' own production processes, resulting in

reputationaldamage to us as supplier as well as to the affected customer as manufacturer. In addition, defective products could result in loss of sales, loss of customers and loss of market acceptance.

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RISKS AND OPPORTUNITIES

Legal, taxation and environmental risks and opportunities We are exposed to warranty and product liability claims.

As a manufacturer, we are subject to product liability lawsuits and other proceedings alleging violations of due care, violations of warranty obligations, treatment errors, safety provisions and claims arising from

breaches of contracts (like delivery delays), recall actions or fines imposed by government or regulatory authorities in relation to our products. Any such lawsuits, proceedings and other claims could result in increased costs for us. Additionally, authorities could prohibit the future sale of our products, particularly in cases of safety concerns. The aforementioned scenarios could result in loss of market acceptance, loss of revenue and loss of customers, in particular against the background that many of our products are components which often have a major impact on the overall safety, durability and performance of our customers' end-product.

The risks arising from such warranty and product liability lawsuits,

proceedingsand other claims are insured as we consider economically reasonable, but the insurance coverage could prove insufficient in individual cases. Any major defect in one of our products could also have a material adverse effect on our reputation and market perception, which in turn could have a significant adverse effect on our revenue and results of operations.

In addition, vehicle manufacturers are increasingly requiring a contribution from, or indemnity by, their suppliers for potential product liability, warranty and recall claims and we have been subject to continuing efforts by our customers to change contract terms and conditions concerning warranty and recall participation.

Furthermore, we manufacture many products pursuant to OEM customer specifications and quality requirements. If the products manufactured and delivered by us are deemed not to be fit for use by our OEM customers at the agreed date of delivery, production of the relevant products is generally

discontinueduntil the cause of the product defect has been identified and remedied. Furthermore, our OEM customers could potentially bring claims for damages on the basis of breach of contract, even if the cause of the defect is remedied at a later point in time. In addition, failure to perform with respect to quality requirements could negatively affect the market acceptance of our other products and our market reputation in various market segments.

We are and may become party to certain disadvantageous contracts pursuant to which we are required to sell certain products at a loss or to agree to broad indemnities. For example, we may enter into a contract at an agreed price and production costs may end up exceeding what was assumed in the development phase. If the assumptions on which we rely in contract negotiations turn out to be inaccurate, this could have an adverse effect on our revenue and results of operations.

We are exposed to certain risks and opportunities with regards to our intellectual property, its validity and the intellectual property of third parties.

Our products and services are highly dependent upon our technological know-how and the scope and limitations of our proprietary rights therein. We have obtained or have applied for a number of intellectual property rights, which can be difficult, lengthy and expensive to procure. Furthermore, patents may not provide us with meaningful protection or a commercial advantage. In addition, where we incorporate an individual customer's input to create a product that responds to a particular need, we face the risk that such customer will claim ownership rights in the associated intellectual property.

Our competitors, suppliers, customers and other third parties also submit a large number of intellectual property protection applications. Such other parties could hold effective and enforceable intellectual property rights to certain processes, methods or applications and consequently could assert infringement claims (including illegitimate ones) against us.

A major part of our know-how is not patented and cannot be protected through intellectual property rights. Consequently, there is a risk that third parties, in particular competitors, may utilize our know-how without

incurring any expenses of their own. Our intellectual property is often discovered by and during the course of our employees' employment. As

a result, there is a risk that we have failed or will fail to properly utilize inventions of our employees. Present or former employees who made or

make employee inventions might continue to be the owners of the valuable rights to inventions if we fail to claim the invention in a timely manner.

The realization of any of these risks could give rise to intellectual property claims against us. Such claims, if successful, could require us to cease

manufacturing,using or marketing the relevant technologies or products in certain countries or be forced to make changes to manufacturing

processes or products. In addition, we could be liable to pay compensation or damages for infringements or could be forced to purchase licenses to make use of technology from third parties. This could have a material adverse effect on our business, financial condition and results of operations.

We are subject to risks from legal, administrative and arbitration proceedings.

We are involved in a number of legal and administrative proceedings related to products, patents and other matters incidental to our business and could become involved in additional legal, administrative and

arbitration proceedingsin the future. These proceedings or potential proceedings could involve, in particular in the United States, substantial

claims for damages or other payments. Based on a judgment or a settlement agreement, we could be obligated to pay substantial damages. Our litigation costs and those of third parties could also be significant.

Due to our high market share, we may be exposed to legal risks regarding anti-competition fines and related claims for damages.

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RISKS AND OPPORTUNITIES

Our market share in most of the markets in which we operate is high, which may induce competition authorities to initiate proceedings or third


parties	to file claims against us alleging violation of competition laws.
A successful	anti-competition challenge could adversely affect us in a
variety	of ways. For example, it could result in the imposition of fines by
one or more authorities	and /or in third parties	(such as competitors
or customers) initiating	civil litigation claiming	damages caused by

anti-competitive practices. In addition, anti-competitive behavior may give rise to reputational risk to us. The realization of this risk could have a material effect on our business, financial condition and results of operations.

Interest carryforwards may be forfeited in part or in full as a result of subsequent share sales.

Some Stabilus subsidiaries have significant interest carryforwards as a result of the application of the statutory interest ceiling rules that limit

the deduction of net interest expenses for tax purposes. The interest carry -forward may be deducted to the extent that in subsequent assessment periods the then current interest expenses do not reach the interest ceiling applicable to the relevant assessment period, and, thus, reduce the tax payable by the relevant subsidiary.

However, the interest carry-forward will be forfeited on a pro rata basis or in full if more than a defined percentage of the shares in entities are directly or indirectly transferred to a new shareholder, persons related to such shareholder or a group of shareholders acting in the same interest, or in case of similar transactions (such as a capital increase) that result in a change of the shareholder structure. Such forfeiture would increase the tax payable by the relevant subsidiary if without the forfeiture the interest carry-forward could have been used in part or in full.

We could be held liable for soil, water or groundwater contamination or for risks related to hazardous materials.

Many of the sites at which we operate have been used for industrial purposes for many years, leading to risks of contamination and the

resulting site restoration obligations. In addition, we could be held responsible for the remediation of areas adjacent to our sites if these areas were potentially contaminated due to our activities. Groundwater contamination was discovered at a site in Colmar, Pennsylvania operated by us from 1979 to 1998. In June 2012, the U.S. Environmental Protection Agency ("EPA") issued an administrative order against our U.S. subsidiary and determined requirements in respect of the remedy and the remedy cost. Our subsidiary, together with the other responsible parties, is requested to reimburse the EPA for past and current expenses and to bear the remediation costs. If additional contamination is discovered in the future, the competent authorities could assert further claims against us, as the owner or tenant of the affected plots, for the examination or remediation of such soil or groundwater contamination or order us to dispose of or treat contaminated soil excavated in the course of construction. We could also be required to indemnify the owners of plots leased by us or of other properties, if the authorities were to pursue claims against the relevant owner of the property and if we caused the contamination. Costs typically incurred in connection with such claims are generally difficult to predict. Also, if any contamination were to become the subject of a more intense public discussion, there is a risk that our reputation or relations with our customers could be harmed.

Furthermore, at some of the sites at which we operate, or at which we operated in the past, small quantities of hazardous materials were used in the past, such as asbestos-containing building materials used for heat insulation. While we consider it unlikely, it cannot be ruled out that the health and safety of third parties (such as former employees) may have been affected due to the use of such hazardous materials or that other claims may be asserted, and we could therefore be exposed to related claims for damages in the future. Even if we have contractually excluded or limited our liability in connection with the sale of such properties, we could be held responsible for currently unknown contamination on properties which we previously owned or used.

The in-house legal department monitors these risks continuously and reports regularly to Group management and the Supervisory Board.

Risks and opportunities related to our capital structure

Since the Company's IPO we have been able to continuously reduce our financial leverage which also supported our objective to actively manage and reduce the Group's liquidity risks.

Our cash from operating activities, current cash resources and existing sources of external financing could be insufficient to meet our further capital needs, especially if our sales decrease significantly. Disruptions in the financial markets, including the bankruptcy, insolvency or restructuring of a number of financial institutions, and restricted availability of liquidity could adversely impact the availability and cost of additional financing for us and could adversely affect the availability of financing already

arranged or committed. Our liquidity could also be adversely impacted if our suppliers tighten terms of payment as the result of any decline in our financial condition or if our customers were to extend their normal payment terms.

Stabilus has set an appropriate liquidity risk management framework for the management of the Group's short, medium and long-term funding and liquidity requirements. The Group manages liquidity risk by regular reviews, maintaining certain cash reserves, as well as open credit lines.

We are exposed to risks and opportunities associated with changes in currency exchange rates.

We operate worldwide and are therefore exposed to financial risks that arise from changes in exchange rates. Currency exchange fluctuations could cause losses if assets denominated in currencies with a falling exchange rate lose value, while at the same time liabilities denominated in currencies with a rising exchange rate appreciate. In addition, fluctuations

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CORPORATE GOVERNANCE

in foreign exchange rates could enhance or minimize fluctuations in the prices of materials, since we purchase a considerable part of the prefabricated materials which we source in foreign currencies. As a result of these factors, fluctuations in exchange rates could affect our results of opera- tions. External and internal transactions involving the delivery of products and services to and /or by third parties result in cash inflows and outflows which are denominated in currencies other than the functional currency of our respective Group member. Among other factors, we are particularly exposed to fluctuations of net inflows in U.S. dollar (surplus) and net outflows in Romanian leu (demand). To the extent that cash outflows are not offset by cash inflows resulting from operational business in such currency, the remaining net foreign currency exposure is not hedged as of September 30, 2020.

Although we may enter into certain hedging arrangements in the future, there can be no assurance that hedging will be available or continue to be available on commercially reasonable terms. In addition, if we were to use any hedging transactions in the future in the form of derivative

financial instruments, such transactions may result in mark-to-market losses. In addition, we are exposed to foreign exchange risks arising from internal loan agreements, which result from cash inflows and outflows in currencies other than the functional currency of our respective Group member. As of September 30, 2020, these foreign exchange risks are not hedged against by using derivative financial instruments. Our net foreign investments are generally not hedged against exchange rate fluctuations. In addition, a number of our consolidated companies report their results in currencies other than the euro, which requires us to convert the relevant items into euro when preparing our consolidated financial statements. Translation risks are generally not hedged.

Other risks

At the beginning of the first quarter of calendar year 2020 the worldwide coronavirus crisis (COVID-19) has significantly affected the macroeconomic environment and the global economy as a whole and also bears various risks

for Stabilus, e.g. decreasing customer demand, shortages in the supply chain, governmentally enforced closure of plants, limited cost flexibility, devaluation of assets, cash shortages or the health of our employees. To mitigate these risks Stabilus has implemented a global multidisciplinary crisis management team that monitors and analyzes the situation on a daily basis on a local and a global level and is taking actions to address and mitigate identified risks. Amongst others Stabilus has reduced capacities, e.g. by making use of short time work, furlough as well as selected redundancies. In addition, Stabilus emphasizes a very strict monitoring of cost, liquidity as well as impairment risks. All employees are well informed about safety measures in business and private life. Also adjusted shift patterns, increased offering of home office and pulling forward of vacation reduce the risk of the virus spreading further.

Risks and opportunities: Overall assessment

The Management Board does not see any individual or aggregate risk that could endanger the future of Stabilus in any material way to continue as going concern.

CORPORATE GOVERNANCE

As a Luxembourg société anonyme, the Company is subject to the corporate governance regime as set forth in particular in the law of August 10, 1915, on commercial companies. As a Company whose shares are listed on a regulated market, the Company is further subject to the law of May 24, 2011, on the exercise of certain shareholder rights in listed companies.

As a Luxembourg société anonyme whose shares are exclusively listed on a regulated market in Germany, the Company is not required to adhere to the Luxembourg corporate governance regime applicable to companies that are traded in Luxembourg or to the German corporate governance regime applicable to stock corporations organized in Germany. The Company has decided to set up own corporate governance rules as described in the following paragraphs rather than to confirm such corporate governance

regimes in order to build up a corporate governance structure which meets the specific needs and interests of the Company.

Stabilus Group is obliged by the European directive and Luxembourg law to report on non-financial and diversity information. Stabilus' Non -Financial Report will be published with this Annual Report, i.e. on December 11, 2020.

From fiscal year 2019 on, Stabilus is obliged by the European directive and Luxembourg law to draw up a remuneration policy for the Supervisory Board as well as for the Management Board. The principles and measurement of the remuneration policy for the Management Board and Supervisory Board of the Stabilus S. A. are prepared in accordance with Article 7bis of the Luxembourg law of May 24, 2011, on Shareholders Rights, as amended. The remuneration report will be published separately from this Annual Report.

The internal control systems and risk management for the establishment of financial information is described in the section "Risk management and control over financial reporting in the Stabilus Group".

According to theArticles of Incorporation of the Company, the Management Board must be composed of at least two Management Board members, and the Supervisory Board must be composed of at least three Supervisory Board members. The Supervisory Board has set up the following committees in accordance with the Articles of Incorporation: Audit Committee and Remuneration Committee. The Audit Committee is responsible for the consideration and evaluation of the auditing and accounting policies and its financial controls and systems. The Remuneration Committee is

responsible for making recommendations to the Supervisory Board and the Management Board on the terms of appointment and the benefits of the managers of the Company. Further details on the composition and purpose of these committees and of the Management Board and the Supervisory Board are described in the section "Management and Supervisory Board of Stabilus S. A.".

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B COMBINED MANAGEMENT REPORT

C CONSOLIDATED FINANCIAL STATEMENTS

D ANNUAL ACCOUNTS

E ADDITIONAL INFORMATION

CORPORATE GOVERNANCE

The Annual General Meeting shall be held at such time as specified by the Management Board and the Supervisory Board in the convening notice. The Management Board and Supervisory Board may convene extraordinary general meetings as often as the Company's interests so require. An extraordinary general shareholders' meeting must be convened upon the request of one or more shareholders who together represent at least one tenth of the Company's share capital.

Each share entitles the holder to one vote. The right of a shareholder to participate in a General Meeting and to exercise the voting rights attached to his shares are determined with respect to the shares held by such shareholder the 14th day before the General Meeting. Each shareholder can exercise his voting rights in person, through a proxyholder or in writing (if provided for in the relevant convening notice).

The information required by Article 10.1 of Directive 2004 / 25 / EC on takeover bids which has been implemented by Article 11 of the Luxembourg Law on Takeovers of May 19, 2006, (the "Law on Takeovers") is set forth here below under "Disclosure Regarding Article 11 of the Law on Takeovers of May 19, 2006".

DISCLOSURES PURSUANT TO ARTICLE 11 OF THE LUXEMBOURG LAW ON TAKEOVERS OF MAY 19, 2006

For information regarding the structure of capital, reference is made to Note 21 of the consolidated financial statements.
The Articles of Incorporation of the Company do not contain any
restrictions on the transfer of shares of the Company.
According to the voting rights notifications received until September 30, 2020, the following shareholders held more than 5% of total voting rights attached to Stabilus shares: Marathon Asset Management LLP, London, UK (direct: 1,745,599 voting rights attached to shares or 7.07% of total voting rights, indirect: 1,459,614 voting rights attached
to shares or 5.91% of total voting rights), Allianz Global Investors

GmbH, Frankfurt am Main, Germany (indirect: 1,291,376 voting rights attached to shares or 5.23% of total voting rights) and Teleios Capital Partners, Zug, Switzerland (indirect: 1,242,713 voting rights attached to shares or 5.03% of total voting rights).

The control rights of any shares issued in connection with employee share schemes are exercised directly by the respective employee.
The Articles of Incorporation of the Company do not contain any

restrictions on voting rights.

There are no agreements with shareholders which are known to the Company and may result in restrictions on the transfer of securities or voting rights within the meaning of Directive 2004 / 109 /EC, as

amended, (Transparency Directive).

Rules governing the appointment and replacement of Management Board members and the amendment of the Articles of Incorporation:
- The Management Board members are appointed by the Supervisory Board by the majority of the votes of the members present or
  represented(abstention or non-participation being taken into
  account as a vote against the appointment), or in the case of a vacancy, by way of a decision of the remaining Management Board members for the period until the next Supervisory Board Meeting.
- Management Board members serve for the following terms: Chief Executive Officer up to four years, and for any other Board members up to three years. Management Board members are eligible for re-appointment.
- Management Board members may be removed at any time with or without cause by the Supervisory Board by a simple majority of the votes.
- Resolutions to amend the Articles of Incorporation may be adopted by a majority of two-thirds of the votes validly cast, without
  counting the abstentions, if the quorum of half of the share capital is met. If the quorum requirement of half of the share capital of

the Company is not met at the Annual General Meeting, then the shareholders may be re-convened to a second General Meeting. No quorum is required in respect of such second General Meeting and the resolutions are adopted by a super majority of two-thirds of the votes validly cast, without counting the abstentions.

Powers of the Management Board:
- The Company is managed by a Management Board under the
  supervision of the Supervisory Board.
- The Management Board is vested with the broadest powers to
  perform or cause to be performed any actions necessary or useful in connection with the purpose of the Company.
- All powers not expressly reserved by the Luxembourg Companies Act or by the Articles of Incorporation to the General Meeting or the
  Supervisory Board fall within the authority of the Management Board.
- Certain transactions and measures are subject to the prior approval of the Supervisory Board on the terms set out in the Articles of Incorporation.
- The Management Board may appoint one or more persons, who may be a shareholder or not, or who may be a member of the
  ManagementBoard or not, to the exclusion of any member of the Supervisory Board, who shall have full authority to act on behalf of the Company in all matters pertaining to the daily management and affairs of the Company.
- The Management Board is also authorized to appoint a person, either a director or not, to the exclusion of any member of the
  Supervisory Board, for the purposes of performing specific functions at every level within the Company.
- The Management Board may also appoint committees and sub-committees in order to deal with specific tasks, to advise the Management Board or to make recommendations to the Manage- ment Board and / or, as the case may be, the General Meeting, the members of which may be selected either from among the members of the Management Board or not, to the exclusion of any member of the Supervisory Board.

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C CONSOLIDATED FINANCIAL STATEMENTS

D ANNUAL ACCOUNTS

E ADDITIONAL INFORMATION

CORPORATE GOVERNANCE

- The Management Board does not have currently any authority to issue shares in the Company under the Articles of Incorporation.
- The Management Board is authorized to buy back shares under the Articles of Incorporation or a buy-back program, for a period of five years (resolution of the Annual General Meeting on February 12, 2020). The maximum number of the shares to be acquired, shall be not exceeding 2 million shares of the aggregate nominal amount of the issued share capital. The purchase shall be affected either through the stock exchange or on the basis of a public purchase offer to all shareholders. If the shares are acquired on the Frank- furt Stock Exchange the consideration payable per share shall not exceed by more than 10% and shall not undercut by more than 20% the arithmetic mean of the closing price in XETRA trading on the Frankfurt Stock Exchange on the last three days of trading prior to the decision to repurchase shares.
There are no significant agreements to which the Company is party, and which take effect, alter or terminate upon a change of control of the Company following a takeover bid.
There are agreements between the Company and its Management Board members or employees providing for compensation if they resign or are made redundant without valid reason or if their employment
ceases because of a takeover bid.

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C CONSOLIDATED FINANCIAL STATEMENTS

D ANNUAL ACCOUNTS

E ADDITIONAL INFORMATION

SUBSEQUENT EVENTS

OUTLOOK

SUBSEQUENT EVENTS

As of December 10, 2020, there were no further events or developments that could have materially affected the measurement and presentation of the Group's assets and liabilities as of September 30, 2020.

OUTLOOK

The Stabilus Group also confirms its STAR 2025 long-term forecast, which expects organic annual revenue growth of an average of 6% per year until fiscal 2025 and the return to an adjusted EBIT margin of 15%. Innovative strength will continue to be a major success factor going forward. One aim is to generate €250 million in revenue with new products in the 2025 fiscal year. With our highly motivated staff, our strong international

managementteam, proven innovative strength and efficiency, and our consistent and systematic customer orientation, we have everything it takes to achieve this ambitious goal.

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CONSOLIDATED

FINANCIAL STATEMENTS

for the fiscal year ended September 30, 2020

CONSOLIDATED STATEMENT OF				19	Current tax assets	76

COMPREHENSIVE INCOME	43			20	Cash and cash equivalents	76

CONSOLIDATED STATEMENT OF				21	Equity	77

FINANCIAL POSITION	44			22	Financial liabilities	78

CONSOLIDATED STATEMENT OF				23	Other financial liabilities	79
C CHANGES IN EQUITY	45			24	Leases	79

CONSOLIDATED STATEMENT OF CASH FLOWS	46			25	Provisions	80

NOTES TO THE CONSOLIDATED FINANCIAL				26	Pension plans and similar obligations	83

STATEMENTS	47			27 Trade accounts payable	85

		1	General information	47			28	Current tax liabilities	85

		2	Basis for presentation	47			29	Other liabilities	85

		3 Accounting policies	56			30	Contingent liabilities and other

		4	Revenue	61				financial commitments	85

		5 Cost of sales, research and development,				31	Financial instruments	87

			selling and administrative expenses	62			32	Risk reporting	88

		6	Other income	63			33	Capital management	91

		7	Other expenses	63			34	Notes to the consolidated statement of

		8	Finance income	63				cash flows	91

		9	Finance costs	63			35	Segment reporting	92

		10	Income tax expense	63			36	Share-based payments	94

		11	Earnings per share	66			37 Auditor's fees	98

		12	Property, plant and equipment	67			38	Related party relationships	99

		13	Goodwill	70			39	Remuneration of key management

		14	Other intangible assets	72				personnel	99

		15	Other financial assets	73			40 Subsequent events	99

		16	Other assets	74	RESPONSIBILITY STATEMENT	100

		17	Inventories	74	MANAGEMENT BOARD OF STABILUS S. A.	101

		18 Trade and other receivables	74	SUPERVISORY BOARD OF STABILUS S. A.	102

						INDEPENDENT AUDITOR'S REPORT	103

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A TO OUR SHAREHOLDERSB COMBINED MANAGEMENT REPORTC CONSOLIDATED FINANCIAL STATEMENTSD ANNUAL ACCOUNTSE ADDITIONAL INFORMATION

CONSOLIDATED STATEMENT OF

COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the fiscal year ended September 30, 2020

Consolidated statement of comprehensive income				T _ 014

			Year ended Sept 30,

IN € THOUSANDS	Note	2020		20193)

Revenue	4	822,126		951,339

Cost of sales	5	(590,627)		(674,955)

Gross profit		231,499		276,384

Research and development expenses	5	(40,645)		(39,150)

Selling expenses	5	(106,068)		(84,191)

Administrative expenses	5	(35,510)		(35,655)

Other income	6	8,927		8,294

Other expenses	7	(2,060)		(1,667)

Profit from operating activities		56,143		124,015

Finance income	8	2,258		1,254

Finance costs	9	(11,013)		(10,417)

Profit / (loss) before income tax		47,388		114,852

Income tax income / (expense)	10	(17,400)		(33,953)

Profit / (loss) for the period		29,988		80,899

thereof attributable to non-controlling interests		(1,445)		273

thereof attributable to shareholders of Stabilus		31,433		80,626

Other comprehensive income / (expense)

Foreign currency translation difference1)	21	(34,184)		11,753

Unrealized actuarial gains and losses2)	21	1,347		(6,424)

Other comprehensive income / (expense), net of taxes		(32,837)		5,329

Total comprehensive income / (expense) for the period		(2,849)		86,228

thereof attributable to non-controlling interests		(1,445)		273

thereof attributable to shareholders of Stabilus		(1,404)		85,955

Earnings per share (in €):

basic	11	1.27		3.26

diluted	11	1.27		3.26

Item that may be reclassified ("recycled") to profit and loss at a future point in time when specific conditions are met.
Item that will not be reclassified to profit and loss.
Since October 1, 2019, the Stabilus Group has adopted the new standard IFRS 16 (Leases) by using the modified retrospective transition method. In accordance with this method, prior year figures were not restated.

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B COMBINED MANAGEMENT REPORT

C CONSOLIDATED FINANCIAL STATEMENTS

D ANNUAL ACCOUNTS

E ADDITIONAL INFORMATION

CONSOLIDATED STATEMENT OF

FINANCIAL POSITION

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as of September 30, 2020

Consolidated statement of financial position	T _ 015	Consolidated statement of financial position	T _ 015

IN € THOUSANDS		Note	Sept 30, 2020		Sept 30, 20191)

Assets

Property, plant and equipment2)	12		229,809			199,946

Goodwill	13		207,661			214,821

Other intangible assets	14		229,251			276,159

Other assets	16		281			1,711

Deferred tax assets	10		11,149			13,371

Total non-current assets				678,151			706,008

Inventories	17		97,237			100,339

Trade and other receivables	18		117,071			130,328

Current tax assets	19		9,591			4,987

Other financial assets	15		7,274			4,743

Other assets	16		11,816			13,814

Cash and cash equivalents	20		162,431			139,020

Total current assets				405,420			393,231

Total assets				1,083,571			1,099,239

IN € THOUSANDS		Note	Sept 30, 2020		Sept 30, 20191)

Equity and liabilities

Issued capital	21		247			247

Capital reserves	21		225,848			225,848

Retained earnings	21		287,702			283,423

Other reserves	21		(52,120)			(19,283)

Equity attributable to shareholders of Stabilus				461,677			490,235

Non-controlling interests				7,921			9,382

Total equity				469,598			499,617

Financial liabilities	22		288,078			308,761

Other financial liabilities	23		33,066			83

Provisions	25		3,699			3,565

Pension plans and similar obligations	26		57,029			59,893

Deferred tax liabilities	10		43,656			55,933

Total non-current liabilities				425,528			428,235

Trade accounts payable	27		71,080			90,992

Financial liabilities	22		34,306			2,824

Other financial liabilities	23		16,345			10,096

Current tax liabilities	28		9,658			13,088

Provisions	25		40,168			38,144

Other liabilities	29		16,888			16,243

Total current liabilities				188,445			171,387

Total liabilities				613,973			599,622

Total equity and liabilities				1,083,571			1,099,239

The accompanying notes form an integral part of these consolidated financial statements.

Since October 1, 2019, the Stabilus Group has adopted the new standard IFRS 16 (Leases) by using the modified retrospective transition method. In accordance with this method, prior year figures were not restated.
The Stabilus Group is disclosing the right-of-use assets to property, plant and equipment in the same balance sheet position as the underlying assets, as if they were own property.

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A TO OUR SHAREHOLDERSB COMBINED MANAGEMENT REPORTC CONSOLIDATED FINANCIAL STATEMENTSD ANNUAL ACCOUNTSE ADDITIONAL INFORMATION

CONSOLIDATED STATEMENT OF

CHANGES IN EQUITY

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the fiscal year ended September 30, 2020

Consolidated statement of changes in equity																T _ 016

													Equity
													attributable to		Non-
					Issued				Retained				shareholders		controlling
IN € THOUSANDS		Note	capital		Capital reserves		earnings		Other reserves		of Stabilus		interests		Total equity

Balance as of Sept 30, 2018					247	225,848	225,090	(24,612)	426,573	(50)	426,523

Effects IFRS 9					-		-	834		-	834		-	834

Balance as of Oct 1, 2018					247	225,848	225,924	(24,612)	427,407	(50)	427,357

Profit / (loss) for the period					-		-	80,626		-	80,626	273	80,899

Other comprehensive income / (expense)	21			-		-		-	5,329	5,329		-	5,329

Total comprehensive income for the period					-		-	80,626	5,329	85,955	273	86,228

Dividends					-		-	(24,700)		-	(24,700)	(62)	(24,762)

Change in ownership interest in subsidiaries without a change of control					-		-	1,573		-	1,573	(2,774)	(1,201)

Change in non-controlling interest					-		-		-		-		-	11,415	11,415

Receipts from non-controlling interest					-		-		-		-		-	580	580

Balance as of Sept 30, 2019					247	225,848	283,423	(19,283)	490,235	9,382	499,617

Profit / (loss) for the period					-		-	31,433		-	31,433	(1,445)	29,988

Other comprehensive income / (expense)	21			-		-		-	(32,837)	(32,837)		-	(32,837)

Total comprehensive income for the period					-		-	31,433	(32,837)	(1,404)	(1,445)	(2,849)

Dividends	21			-		-	(27,170)		-	(27,170)		-	(27,170)

Change in ownership interest in subsidiaries without a change of control					-		-	16		-	16	(16)		-

Change in non-controlling interest					-		-		-		-		-		-	-

Receipts from non-controlling interest					-		-		-		-		-		-	-

Balance as of Sept 30, 2020					247	225,848	287,702	(52,120)	461,677	7,921	469,598

The accompanying notes form an integral part of these consolidated financial statements.

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C CONSOLIDATED FINANCIAL STATEMENTS

D ANNUAL ACCOUNTS

E ADDITIONAL INFORMATION

CONSOLIDATED STATEMENT OF CASH FLOWS

for the fiscal year ended September 30, 2020

Consolidated statement of cash flows	T _ 017	Consolidated statement of cash flows	T _ 017

		Year ended Sept 30,
IN € THOUSANDS	Note	2020	20191)
Profit / (loss) for the period		29,988	80,899
Income tax expense		17,400	33,953
Net finance result	8 / 9	8,756	9,163
Interest received		499	419
Depreciation and amortization (incl. impairment losses)	13 / 15	95,816	59,633
Gains / losses from the disposal of assets		38	(136)
Changes in inventories		3,102	(4,847)
Changes in trade accounts receivable		13,257	(11,395)
Changes in trade accounts payable		(19,912)	3,661
Changes in other assets and liabilities		(4,795)	11,497
Changes in provisions		1,159	(1,500)
Income tax payments	34	(36,427)	(35,930)
Cash flow from operating activities		108,881	145,417
Proceeds from disposal of property, plant and equipment		938	1,032
Purchase of intangible assets	14	(17,663)	(15,108)
Purchase of property, plant and equipment	12	(29,915)	(41,413)
Acquisition of assets and liabilities within the business
combination, net of cash acquired		(1,062)	(41,415)
Cash flow from investing activities		(47,702)	(96,904)

		Year ended Sept 30,
IN € THOUSANDS	Note	2020	20191)
Receipts under financial liabilities		29,894	-
Payments for redemption of financial liabilities		(1,550)	(3,694)
Receipts from non-controlling interests		-	580
Payments for redemption of senior facilities		(20,000)	(21,073)
Payments for lease liabilities	34	(8,245)	(443)
Dividends paid	21	(27,170)	(24,700)
Dividends paid to non-controlling interests		-	(62)
Payment for acquisition of non-controlling interests		-	(1,200)
Payments for interest	34	(4,814)	(3,643)
Cash flow from financing activities		(31,885)	(54,235)
Net increase / (decrease) in cash and cash equivalents		29,294	(5,722)
Effect of movements in exchange rates on cash held		(5,883)	1,742
Cash and cash equivalents as of beginning of the period		139,020	143,000
Cash and cash equivalents as of end of the period		162,431	139,020

The accompanying notes form an integral part of these consolidated financial statements.

Since October 1, 2019, the Stabilus Group has adopted the new standard IFRS 16 (Leases) by using the modified retrospective transition method. In accordance with this method, prior year figures were not restated.

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D ANNUAL ACCOUNTS

E ADDITIONAL INFORMATION

NOTES TO THE CONSOLIDATED

FINANCIAL STATEMENTS

GENERAL INFORMATION

BASIS FOR PRESENTATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

as of and for the fiscal year ended September 30, 2020

1General information

Stabilus S. A., Luxembourg, hereinafter also referred to as "Stabilus" or the "Company" is a public limited liability company (Société Anonyme) incorporated in Luxembourg and governed by Luxembourg law. The Company is registered with the Luxembourg Trade and Companies Register (Registre de Commerce et des Sociétés Luxembourg) under No. B151589

and its registered office is located at 2, rue Albert Borschette, L-1246 Luxembourg, Grand Duchy of Luxembourg. The Company was founded under the name Servus HoldCo S.à r. l. on February 26, 2010.

The Company´s fiscal year is from October 1 to September 30 of the

following year (twelve-month period). The consolidated financial statements of Stabilus S. A. include Stabilus and its subsidiaries (hereafter also referred to as "Stabilus Group" or the "Group").

The Stabilus Group is a leading manufacturer of gas springs, dampers, vibration isolation products as well as electric tailgate opening and closing equipment. The products are used in a wide range of applications in the automotive, industrial and domestic sector, as well as in the furniture industry. Typically, the products are used to support the lifting and lowering or dampening of movements. As world market leader for gas springs, the Group ships to all key vehicle manufacturers. Various Tier 1 suppliers of the global car industry as well as large technical focused distributors further diversify the Group's customer base.

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The consolidated financial statements are prepared in euro (€) rounded to the nearest thousand. Due to rounding, numbers presented may not add up precisely to totals provided.

The consolidated financial statements of Stabilus and its subsidiaries have been prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the EU.

The consolidated financial statements were authorized for issue by the Management Board on December 10, 2020.

2Basis for presentation

Preparation

In the statement of financial position assets and liabilities are classified as non-current and current. They are reported as current if the remaining term is less than one year and as non-current if the remaining term is over one year. Deferred tax assets and liabilities, as well as provisions for defined benefit pension plans and similar obligations are reported as non-current. The consolidated statement of comprehensive income is presented using the cost of sales method.

In relation of the first-time application of IFRS 16 "Leases" and IFRIC 23 "Uncertainty over Income Tax Treatments" as of October 1, 2019. Stabilus Group has applied the modified retrospective method for the transition to IFRS 16 and IFRIC 23.

Measurement

The consolidated financial statements have been prepared on historical cost basis, except for certain items, that are measured at fair value, like derivative financial instruments. The exceptions are described below.

Use of estimates and judgments

The preparation of financial statements requires estimates that involve complex and subjective judgments and the use of assumptions for matters

that are uncertain and are subject to change. Estimates can change from period to period and can have a material impact on financial positions, income and expenses. Estimates and underlying assumptions are reviewed on an ongoing basis from the Management. These are updated, if necessary. Revisions to estimates are recognized prospectively.

Impairment of non-financial assets

Stabilus monitors whether there are indications that its non-financial assets may be impaired. Goodwill and development cost under construction are tested for impairment annually. Further tests are carried out if there

are indications for impairment. Other non-financial assets are tested for impairment if there are indications that the carrying amount may not be recoverable. If the fair value less costs of disposal is calculated, management must estimate the expected future cash flows from the asset or the cash- generating unit and select an appropriate discount rate in order to determine the present value.

Trade and other receivables

The allowance for doubtful accounts requires management judgment and review of individual receivables based on individual customer creditworthi- ness, current economic trends, analysis of historical allowances and determination of expected credit losses (ECL) on financial assets. Details of bad debt allowances on trade receivables are presented in Note 18.

Deferred tax assets

The valuation of deferred tax assets is based on mid-term business plans of the entities carrying the deferred tax asset. The mid-term business plans range from three to five years and include various assumptions and estimates relating to the business development, strategic changes,

A TO OUR SHAREHOLDERS

B COMBINED MANAGEMENT REPORT

cost optimization and business improvement and also general market and economic development. Deferred tax assets are recognized to the extent that sufficient taxable profit will be available for the utilization


of the deductible	temporary differences. Stabilus recognizes a valuation
allowance	for deferred tax assets when it is unlikely that sufficient future
taxable profit will	be available. Please also refer to Note 10.

Provisions

Significant estimates are required in the determination of provisions related to pensions and other obligations, contract losses, warranty costs and legal proceedings. Please also refer to Notes 25 and 26.

Risks and uncertainties

The Group's net assets, financial position and results of operations are subject to risks and uncertainties. Actual results can vary from expectations due to changes in the overall economy, evolvement of price-aggressive competitors, significant price changes for raw materials and overall purchase costs. Furthermore, quality issues may result in significant costs for the Group. The Group financing is based on variable interest rates and is subject to risks and uncertainties due to the development of the Euribor and the net leverage level of the Stabilus Group.

S TA B I L U S A N N U A L R E P O R T 2 0 2 0

C CONSOLIDATED FINANCIAL STATEMENTS

D ANNUAL ACCOUNTS

BASIS FOR PRESENTATION

Going concern

These consolidated financial statements have been prepared under the going concern assumption, from the current perspective there are no risks to the continued existence of the Stabilus Group.

Scope of consolidation

The consolidated financial statements include the financial statements of Stabilus S. A. and all subsidiaries, which are directly or indirectly controlled by Stabilus. Control exists if the Company has the decision-making power over the relevant activities of an entity and it participates in positive and negative variable returns from that entity and it can affect these returns by its decision-making power.

Non-controlling interests represent the portion of profit and loss and net assets not held by the Company. They are presented separately in the consolidated statement of comprehensive income and the consolidated statement of financial position.

The results of subsidiaries acquired or disposed during the period are included in the consolidated statement of comprehensive income from the date of acquisition or until the date of disposal, as appropriate.

E ADDITIONAL INFORMATION

A TO OUR SHAREHOLDERS

B COMBINED MANAGEMENT REPORT

C CONSOLIDATED FINANCIAL STATEMENTS

D ANNUAL ACCOUNTS

E ADDITIONAL INFORMATION

BASIS FOR PRESENTATION

Next to Stabilus S. A., 37 (PY: 36) subsidiaries (see following list) are included in the consolidated financial statements as of September 30, 2020.

Subsidiaries										T _ 018

NO.		NAME OF THE COMPANY		Registered office of the entity		Interest and control held by		Holding in %		Consolidation method

1		Stable II S.à r.l.		Luxembourg		Stabilus S.A.	100.00%		Full

2		Stable Beteiligungs GmbH		Koblenz, Germany		Stable II S.à r.l.	100.00%		Full

3		Stable HoldCo Australia Pty. Ltd.		Dingley, Australia		Stable II S.à r.l.	100.00%		Full

4		Stabilus UK Ltd.		Banbury, United Kingdom		Stable Beteiligungs GmbH	100.00%		Full

5		Stabilus GmbH		Koblenz, Germany		Stable Beteiligungs GmbH	100.00%		Full

6		Stabilus Pty. Ltd.		Dingley, Australia		Stable HoldCo Australia Pty. Ltd.	100.00%		Full

7		Stabilus Ltda.		Itajubá, Brazil		Stabilus GmbH	100.00%		Full

8		Stabilus Espana S.L.		Lezama, Spain		Stabilus GmbH	100.00%		Full

9		Stabilus Co. Ltd.		Busan, South Korea		Stabilus GmbH	100.00%		Full

10		Stabilus S.A. de C.V.		Ramos Arizpe, Mexico		Stabilus GmbH	99.9998%		Full
						Stabilus UK Ltd.	0.0002%

11		Stabilus Inc.		Gastonia, USA		Stabilus US Holding Corp.	100.00%		Full

12		Stabilus Limited		Auckland, New Zealand		Stabilus GmbH	80.00%		Full

13	Stabilus Japan Corp.		Yokohama, Japan		Stable Beteiligungs GmbH	100.00%		Full

14	New Clevers S.A.		Buenos Aires, Argentina		Stable Beteiligungs GmbH	60.00%		Full

15	Piston Amortisör San. ve Tic. A. Ş.		Bursa, Turkey		Stable Beteiligungs GmbH	53.00%		Full

16	Stabilus France S.à r.l.		Poissy, France		Stabilus GmbH	100.00%		Full

17	Stabilus Romania S.R.L.		Brasov, Romania		Stable Beteiligungs GmbH	0.001%		Full
						Stabilus GmbH	99.999%

18	Stabilus (Jiangsu) Ltd.		Wujin, China		Stabilus GmbH	100.00%		Full

19	Stabilus Mechatronics Service Ltd.		Shanghai, China		Stabilus (Jiangsu) Ltd.	100.00%		Full

20	Stabilus PTE Ltd.		Singapore		Stabilus GmbH	100.00%		Full

21	Stabilus (Zhejiang) Ltd.		Pinghu, China		Stable II S.à r.l.	100.00%		Full

22	Stabilus US Holding Corp.		Wilmington, USA		Stable II S.à r.l.	100.00%		Full

23	Stabilus Motion Controls GmbH		Langenfeld, Germany		Stable II S.à r.l.	100.00%		Full

24	General Aerospace GmbH		Eschbach, Germany		Stabilus Motion Controls GmbH	90.00%		Full

25	General Aerospace Inc.		Lynnwood, USA		General Aerospace GmbH	100.00%		Full

26	Fabreeka Group Holdings, Inc.		Stoughton, USA		Stabilus US Holding Corp.	100.00%		Full

S TA B I L U S A N N U A L R E P O R T 2 0 2 0

A TO OUR SHAREHOLDERS	B COMBINED MANAGEMENT REPORT	C CONSOLIDATED FINANCIAL STATEMENTS	D ANNUAL ACCOUNTS	E ADDITIONAL INFORMATION
				BASIS FOR PRESENTATION

Subsidiaries (continued)					T _ 018

NO.	NAME OF THE COMPANY	Registered office of the entity	Interest and control held by		Holding in %		Consolidation method

27	ACE Controls Inc.	Farmington Hills, USA	Stabilus US Holding Corp.	100.00%		Full

28	ACE Controls International Inc.	Farmington Hills, USA	Stabilus US Holding Corp.	100.00%		Full

29	Fabreeka International Holdings Inc.	Stoughton, USA	Fabreeka Group Holdings Inc.	100.00%		Full

30	Fabreeka International Inc.	Stoughton, USA	Fabreeka International Holdings Inc.	100.00%		Full

31	Tech Products Corporation	Miamisburg, USA	Fabreeka International Holdings Inc.	100.00%		Full

32	Fabreeka GmbH Deutschland	Büttelborn, Germany	Fabreeka International Holdings Inc.	100.00%		Full

33	ACE Controls Japan L.L.C.	Farmington Hills, USA	ACE Controls Inc.	100.00%		Full

34	ACE Stoßdämpfer GmbH	Langenfeld, Germany	Stabilus Motion Controls GmbH	94.90%		Full
			Stable II S.à r.l.	5.10%

35	HAHN-Gasfedern GmbH	Aichwald, Germany	Stabilus Motion Controls GmbH	100.00%		Full

36	YAKIDO B.V.1)	Zwijndrecht, Netherlands	HAHN-Gasfedern GmbH	50.00%		Full

37	Stabilus Actio GmbH	Langenfeld, Germany	Stabilus Motion Controls GmbH	100.00%		Full

The entity has been fully consolidated as the Stabilus Group can exercise control over the company in the meaning of IFRS 10.

S TA B I L U S A N N U A L R E P O R T 2 0 2 0

A TO OUR SHAREHOLDERS

B COMBINED MANAGEMENT REPORT

C CONSOLIDATED FINANCIAL STATEMENTS

D ANNUAL ACCOUNTS

E ADDITIONAL INFORMATION

BASIS FOR PRESENTATION

The decrease of subsidiaries is due to the ongoing simplification of the legal structure of the Stabilus Group. In fiscal year 2020, one subsidiary was

liquidated and two entities were founded in fiscal year 2020. This had no material effect on the Group's consolidated financial statements.

Principles of consolidation

The assets and liabilities of domestic and foreign entities included in the consolidated financial statements are accounted for in accordance with the uniform accounting policies of the Stabilus Group. Receivables and liabilities or provisions between the consolidated entities are eliminated. Intragroup revenue and other intragroup income and the corresponding cost and expenses are eliminated. Intercompany gains and losses on intragroup delivery and service transactions are eliminated through profit or loss, unless they are immaterial.

Business combination

Business combinations are accounted for using the acquisition method as of the acquisition date, which is the date on which control is obtained by the Group. Goodwill is measured as:

Foreign currency translation

The consolidated financial statements are presented in euro (€).

For each entity in the Group its functional currency is determined, which is the currency of the primary economic environment in which the entity operates. Items included in the financial statements of each entity are measured using the functional currency. Transactions in foreign currencies are initially translated into the functional currency using the exchange rate at the date of the transaction. Monetary assets and liabilities denominated in foreign currency are translated into the functional currency using the exchange rate at the balance sheet date. The resulting foreign currency exchange gains or losses are recognized in profit and loss.

Non-monetary items in a foreign currency that are measured at historical cost are translated using the exchange rates as of the date of the initial transaction. Non-monetary items in foreign currency measured at fair value are translated using the exchange rate at the date when the fair value is determined.

Assets and liabilities of foreign subsidiaries with a functional currency other than euro (€) are translated using the exchange rates as at the balance sheet date, while their income, expenses and cash flows are translated using the average exchange rates during the period.

Foreign currency exchange gains and losses on operating activities are

included in other operating income and expense. Foreign currency gains and losses on financial receivables and debts are included in interest income and expense.

Translation adjustments arising from exchange rate differences are recognized directly in shareholder's equity and are presented as a separate component of equity. On disposal of a foreign entity, the translation adjustment relating to that particular foreign operation is recognized in profit or loss.

Exchange differences from foreign currency loans that are part of a net investment in a foreign operation are recognized directly in equity.

The exchange rates of the significant currencies of non-euro countries used in the preparation of the consolidated financial statements were as follows:

• The fair value of the consideration transferred, plus the recognized

amount of any non-controlling interests in the acquiree, less the

net recognized amount (generally the fair value) of the identifiable

Exchange rates	T _ 019

assets

acquired and liabilities assumed.

The consideration transferred does not include amounts related to the settlement of transactions existing before the business combination. Such amounts are generally recognized in profit or loss. Costs related to the acquisition, other than those associated with the issue of debt or equity securities that the Group incurs in connection with the business combination are expensed as incurred.

Non-controlling interests in the net assets of consolidated subsidiaries consist of the value of those interests at the date of the original business combination and their share of changes in equity since that date.

		Closing rate Sept 30,
COUNTRY	ISO Code	2020	2019
Australia	AUD	1.6438	1.6126
Argentina	ARS	89.1154	62.4212
Brazil	BRL	6.6308	4.5288
China	CNY	7.9720	7.7784
South Korea	KRW	1,368.5100	1,304.8300
Mexico	MXN	26.1848	21.4522
Romania	RON	4.8725	4.7496
Turkey	TRY	9.0990	6.1491
USA	USD	1.1708	1.0889

Average rate for the year ended Sept 30,

20202019

1.65251.6029

73.336747.9888

5.42054.3604

7.84607.7569

1,337.34011,300.9884

23.717121.8837

4.81184.7189

7.29726.3238

1.11991.1281

S TA B I L U S A N N U A L R E P O R T 2 0 2 0

A TO OUR SHAREHOLDERS

B COMBINED MANAGEMENT REPORT

C CONSOLIDATED FINANCIAL STATEMENTS

D ANNUAL ACCOUNTS

E ADDITIONAL INFORMATION

BASIS FOR PRESENTATION

CHANGES IN ACCOUNTING POLICIES / NEW

STANDARDS ISSUED

The accounting policies applied in the consolidated financial	statements
comply with the IFRSs required to be applied in the EU as of September 30,
2020. In financial year	2020, the following new and revised standards and
interpretations had to be applied for the first time in the Stabilus Group's
financial statements:
New standards, interpretations and amendments in the financial year			T _ 020

							Impact on
				Effective date		Effective date	Stabilus
				stipulated		stipulated	financial
				by IASB		by EU	statements

		Leases					Reference is made to the
IFRS 16		(issued on January 13, 2016)		January 1, 2019		January 1, 2019	descriptions below

		Uncertainty over Income Tax Treatments					Reference is made to the
IFRIC 23		(issued on June 7, 2017)		January 1, 2019		January 1, 2019	descriptions below

		Prepayment Features with Negative Compensation
Amendments to IFRS 9		(issued on October 12, 2017)		January 1, 2019		January 1, 2019	No impact

		Plan Amendment, Curtailment or Settlement			Reference is made to the
Amendments to IAS 19		(issued on February 7, 2018)		January 1, 2019		January 1, 2019	descriptions below

		Long-term Interests in Associates and Joint Ventures
Amendments to IAS 28		(issued on 12 October 2017)		January 1, 2019		January 1, 2019	No impact

		Annual Improvements to IFRSs 2015-2017 Cycle
Annual Improvements		(issued on December 12, 2017)		January 1, 2019		January 1, 2019	No impact

		COVID-19-Related Rent Concession					Reference is made to the
Amendments to IFRS 16		(issued on May 28, 2020)		June 1, 2020		June 1, 2020	descriptions below

The effective date presented above is the date of mandatory application in annual periods beginning on or after that date.

In the financial year 2020 the Stabilus Group applied the new standards IFRS 16 Leases and IFRIC 23 Uncertainty over Income Tax Treatments and the Amendments to IFRS 16 and IAS 19 for the first time. The effect of the initial application of IFRS 16 was an increase in property, plant and equipment of €43.7 million due to the recognition of right-of-use assets as of October 1, 2019. In compliance with the transitional provisions,

comparativeinformation was not restated. Nonetheless, this does not significantly impact overall comparability with prior year figures.

IFRS 16 Leases

IFRS 16 (Leases) changes the regulations for the recognition, measurement, presentation and disclosure of leases. IFRS 16 (Leases) supersedes the previous standard for lease accounting (IAS 17 Leases) and the relating interpretations (IFRIC 4 Lease Arrangement, SIC-15 Operating Leases - Incentives and SIC-27 Evaluation of Lease Transactions).

In the financial year 2020 starting October 1, 2019, the Stabilus Group applied the new standard IFRS 16 (Leases) for the first-time using the modified retrospective transition method. In accordance with this method, the prior year figures were not restated. In addition, the Group used the practical expedient in IFRS 16.C3 to apply IFRS 16 (Leases) only to those contracts that were previously identified as leases under IAS 17 (Leases) or IFRIC 4 (Lease Arrangement). In the ordinary business, the Stabilus Group is the lessee of property, plant and equipment (e.g. IT hardware, cars, and other machinery and equipment). For all leases respective lease term options (e.g. renewal options) are considered. The application of such lease term options provides the Group with the greatest possible flexibility concerning its leased assets. The majority of the current options to extend or terminate the leases can only be exercised by the Group and not by the respective lessor. Within the Stabilus Group the extension options

are solely used for the asset class "buildings". For all other leases the minimum term of lease is considered.

Within the scope of a group-wide project a software for contract data management was introduced.

S TA B I L U S A N N U A L R E P O R T 2 0 2 0

A TO OUR SHAREHOLDERS

B COMBINED MANAGEMENT REPORT

C CONSOLIDATED FINANCIAL STATEMENTS

D ANNUAL ACCOUNTS

E ADDITIONAL INFORMATION

BASIS FOR PRESENTATION

Based on the retrospective initial recognition as of October 1, 2019, the

effects resulted in an increase of the balance sheet total. Right-of-use

assets in the amount of €43.7 million and corresponding lease liabilities were recognized in the consolidated financial statements for fiscal year 2020. The Stabilus Group decided to recognize the right-of-use assets in the same amount as the lease liabilities. The lease liabilities are divided into €36.9 million non-current and €6.8 million current. The effects on the consolidated statement of cash flows in fiscal year 2020 are: Increase

loss of production in case of non-renewal, costs for an acquisition of an asset or the going concern criteria on the business activity, are also part of the decision process whether to take into account a renewal option or not. Due the fact that most of the contracts include such renewal options and the Group is expecting a going concern for all production and non- production buildings by considering all factors stated above, the amount of the exercised renewal options is reasonably certain.

The lease liabilities were discounted as of October 1, 2019, using the

incrementalborrowing rate. The Stabilus Group's weighted average interest rate as at October 1, 2019, amounted to 3.86%.

The following tables set out the effects of the first-time application of IFRS

16 (Leases):

in the cash flow from financing activities amounting to €9.7 million. This increase is attributable to the payments for lease liabilities of €(8.2) million and to the interest expense from lease liabilities amounting to €(1.5) million. The cash flow from operating activities is reduced accordingly.

The Stabilus Group decided to use some practical expedients outlined in IFRS 16 (Leases) like short-term leases (leases with a lease term less than 12 months) and low-value assets (underlying asset < 5.000 EUR / USD e.g.

printers and copiers). Thereof, short-term leases can be classified in an amount of €(0.9) million. Leases of low-value assets amounted to €(0.8) million. The regulations of IFRS 16 (Leases) are not applied for the Group's intangible assets. Furthermore, the Stabilus Group shows only a distinction between lease and non-lease components for real estate. For all non- movable goods, there is no distinction between lease and non-lease compo- nents. For leases with similar characteristics the portfolio application is used.

The main impact of the transition resulted in the assessment of the lease term options from real estate and vehicles (e.g. cars, forklifts). Considering renewal options (solely for real estate) that are expected to be exercised with reasonable certainty, an amount of €17.4 million could be

measured . By determining if a renewal option will be exercised the Group considers different factors that have an impact on the respective lease term. The main factors are those that are directly related to the contract or the Company. Contract related factors mean that only for those real estates that have such renewal options in their contracts the Group can apply to. In addition, the high of the rental payments are relevant throughout the decision process. Factors that are related to the Company, like a

S TA B I L U S A N N U A L R E P O R T 2 0 2 0

Reconciliation of IFRS 16 effects on the consolidated statement of financial position					T_021

									Effects of
									IFRS 16
									first-time
IN € MILLIONS				as of Sept 30, 2019			application	as of Oct 1, 2019

Assets

Property, plant and equipment				199.9		43.7			243.6

Other non-current assets				506.1						506.1

Current assets				393.2						393.2

Total assets				1,099.2		43.7			1,142.9


Equity and liabilities

Equity				499.6						499.6

Other non-current liabilities				428.1						428.1

Other financial liabilities (non-current)				0.1		36.9			37.0

Other current liabilities				161.3						161.3

Other financial liabilities (current)				10.1		6.8			16.9

Total equity and liabilities				1,099.2		43.7			1,142.9

Reconciliation of IFRS 16 effects on the consolidated statement of comprehensive income					T_022


					Effects of			Year ended	Year ended
					IFRS 16			Sept 30, 2020	Sept 30, 2019
	Year ended		first-time			without application	without application
IN € MILLIONS	Sept 30, 2020		application			of IFRS 16	of IFRS 16

Profit from operating activities (EBIT)	56.1	1.5	54.6		124.0

Net financial result	(8.8)	(1.5)	(7.3)		(9.2)

Profit / (loss) for the period	30.0		-	30.0		80.9

											53

A TO OUR SHAREHOLDERS	B COMBINED MANAGEMENT REPORT	C CONSOLIDATED FINANCIAL STATEMENTS	D ANNUAL ACCOUNTS
				BASIS FOR PRESENTATION

Reconciliation of IFRS 16 effects on the consolidated statement of cash flows				T_023


						Effects of	Year ended	Year ended
						IFRS 16	Sept 30, 2020	Sept 30, 2019
		Year ended	first-time		without application	without application
IN € MILLIONS	Sept 30, 2020	application		of IFRS 16	of IFRS 16

Cash flow from operating activities	108.9				(9.7)	99.2	145.4

Cash flow from investing activities	(47.7)				-	(47.7)	(96.9)

Cash flow from financing activities	(31.9)				9.7	(22.2)	(54.2)

Reconciliation of lease liabilities							T_024

IN € MILLIONS							as of Oct 1, 2019

Operating rental and lease agreements as of Sept 30, 2019				32.7

Lease liabilities resulting from finance leases as of Sept 30, 2019				0.5

Short-term leases with a lease term < 12 months							(0.9)

Leases of low value							(0.8)

Other1)							1.1

Extension and termination options reasonably certain to be exercised				17.4

Operating rental and lease agreements as of Oct 1, 2019							50.1

Discounted at the incremental borrowing rate as of Oct 1, 2019							(6.4)

Lease liabilities resulting from the initial application of IFRS 16 as of Oct 1, 2019				43.7

Commitments for leases that had not commenced on September 30, 2019.

S TA B I L U S A N N U A L R E P O R T 2 0 2 0

E ADDITIONAL INFORMATION

IFRIC 23 UNCERTAINTY OVER INCOME TAX TREATMENTS

In June 2017, the IASB issued IFRIC 23 Uncertainty over Income Tax Treatments. IFRIC 23 is applicable to financial years beginning on or after January 1, 2019 (Stabilus Group's financial year 2020). The interpretation supplements the provisions of IAS 12 Income Taxes on accounting for

effective and deferred taxes with regard to uncertainties over the treatment of particular circumstances and transactions by the tax authorities and courts pertaining to income tax. Based on our current assessments, this clarification does not have a significant impact on the consolidated financial statements of the Stabilus Group.

AMENDMENTS TO IAS 19: PLAN AMENDMENT, CURTAILMENT OR SETTLEMENT

The amendments to IAS 19 address the accounting when a plan amend- ment, curtailment or settlement occurs during a reporting period. The amendments specify that when a plan amendment, curtailment or settlement occurs during the annual reporting period, an entity is required to recalculate the current service cost and the net interest for the remainder of the period after the plan amendment, curtailment or settlement.

The amendments also clarify that an entity first determines any past service cost, or gain or loss on settlement, without considering the effect of the asset ceiling. This amount is recognized in profit or loss. An entity then determines the effect of the asset ceiling after the plan amendment, curtailment or settlement. Any change in that effect, excluding amounts included in the net interest, is recognized in other comprehensive income. The amendments apply to plan amendments, curtailments, or settlements occurring on or after the beginning of the first annual reporting period that begins on or after January 1, 2019 (Stabilus Group's financial year 2020). These amendments will apply only to any future plan amendments, curtailments, or settlements of Stabilus Group.

A TO OUR SHAREHOLDERS

B COMBINED MANAGEMENT REPORT

C CONSOLIDATED FINANCIAL STATEMENTS

D ANNUAL ACCOUNTS

E ADDITIONAL INFORMATION

BASIS FOR PRESENTATION

AMENDMENTS TO IFRS 16: COVID-19-RELATED RENT CONCESSION

In May 2020, the IASB issued the amendments to IFRS 16 COVID-19- Related Rent Concession. The amendment can be applied from all lessees but not from lessors and provides for an optional simplification that allows lessees to dispense with the assessment of whether a rental agreement in connection with COVID-19 constitutes a modification of the lease in accordance with IFRS 16. Instead, lessees should be given the option to treat such rent concessions as if they were not a modification of the lease. The practical expedient would apply only to rent concessions occurring as a direct consequence of the COVID-19 pandemic and only if all of the following conditions are met:

The change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, the
considerationfor the lease immediately preceding the change;
Any reduction in lease payments affects only payments originally due on or before June 30, 2021;
There is no substantive change to other terms and conditions of the lease.

Lessees that apply the exemption will need to disclose that fact. Further- more, this practical expedient must be applied consistently to all lease contracts with similar characteristics and in similar circumstances.

The amendments would be effective for annual reporting periods beginning

on or after June 1, 2020. Earlier application	is permitted, including in
financial	statements not authorized for issue at	May 28, 2020.

The Stabilus Group has early adopted the amendment and applied the practical expedient of IFRS 16. The Stabilus Group received rent reductions granted by the lessor in an amount of €0.3 million, for the Chinese entities for the rent periods February and March. These lease reductions will reduce the rental expenses.

The IASB issued new standards and amendments which have been

endorsed by the EU and whose application accordingly is not yet compulsory in financial year 2020. The Stabilus Group is not planning an early application of these standards, amendments and interpretations.

AMENDMENTS TO IFRS 9, IAS 39 AND IFRS 7: INTEREST RATE BENCHMARK REFORM

In September 2019, the IASB issued Amendments to IFRS 9, IAS 39 and IFRS 7 the so-called Interest Rate Benchmark Reform. The amendments are effective for annual periods beginning on or after January 1, 2020. The amendments provide relief from the highly probable and prospective assessment required by IFRS 9 and IAS 39 for hedging relationships that are affected by the uncertainties of the IBOR reform. With the same purpose, the amendments provide relief from the retrospective assessment under IAS 39. The exceptions described in the amendments apply only to those hedging relationships directly affected by uncertainties of the IBOR reform including cross-currency interest swaps (for the interest component affected). Based on our current assessments, the regulations do not have a significant impact on the consolidated financial statements of the Stabilus Group. Currently, there is no use of hedge accounting within the Group.

The above-mentioned new and revised standards, interpretations and amendments will probably have no material impact on the Stabilus Group's consolidated financial statements.

New standards, interpretations and amendments issued and endorsed by the EU (not yet adopted)		T_025

			Effective date	Effective date		Impact on Stabilus
			stipulated by IASB	stipulated by EU		financial statements

	Amendments to References
	to the Conceptual Framework
Conceptual Framework for	in IFRS Standards
Financial Reporting	(issued on March 29, 2018)	January 1, 2020	January 1, 2020		No impact

	Definition of a Business
Amendments to IFRS 3	(issued on October 22, 2018)	January 1, 2020	January 1, 2020		No impact

Amendments to IFRS 9,	Interest Rate Benchmark Reform						Reference is made to the
IAS 39 and IFRS 7	(issued on September 26, 2019)	January 1, 2020	January 1, 2020		descriptions below

Amendments to	Definition of Material
IAS 1 and IAS 8	(issued on October 31, 2018)	January 1, 2020	January 1, 2020		No impact

The effective date presented above is the date of mandatory application in annual periods beginning on or after that date.

S TA B I L U S A N N U A L R E P O R T 2 0 2 0

The new and revised standards and amendments issued but not yet endorsed by the EU mentioned in the table below are currently evaluated. Based on our current assessments, the new and revised standards and interpretations mentioned in the table below will probably have no material impact on the Stabilus Group's consolidated financial statements.

A TO OUR SHAREHOLDERS	B COMBINED MANAGEMENT REPORT	C CONSOLIDATED FINANCIAL STATEMENTS	D ANNUAL ACCOUNTS
				BASIS FOR PRESENTATION

				ACCOUNTING POLICIES

New standards, interpretations and amendments issued but not yet endorsed by the EU		T _ 026

		Effective	Effective	Impact on
		date stipulated	date stipulated	Stabilus financial
		by IASB	by EU	statements

	Insurance Contracts
IFRS 17	(issued on May 18, 2017)	January 1, 2023	Pending	No impact

	Deferral of IFRS 9
Amendments to IFRS 4	(issued on June 30, 2020)	January 1, 2021	Pending	Evaluating

Amendments to IFRS 9,
IAS 39, IFRS 7, IFRS 4	Interest Rate Benchmark Reform
and IFRS 16	(issued on August 27, 2020)	January 1, 2021	Pending	Evaluating

Amendments to IFRS 3,
IAS 16, IAS 37 and Annual
Improvements 2018-2020	All issued on May 14, 2020	January 1, 2022	Pending	Evaluating

	Classification of Liabilities as Current or
Amendments to IAS1	Non-current (issued on January 23, 2020)	January 1, 2023	Pending	Evaluating

The effective date presented above is the date of mandatory application in annual periods beginning on or after that date.

E ADDITIONAL INFORMATION

Research expenses and non-capitalized development expenses

Research expenses and non-capitalized development expenses are recognized in profit or loss as incurred.

Selling expenses

Selling expenses include costs for sales personnel and other sales-related costs such as marketing and travelling as well as impairment on intangible assets are included. Shipping and handling costs are expensed within selling expenses as incurred. Fees charged to customers are shown as sales. Advertising costs (expenses for advertising, sales promotion and other sales-related activities) are expensed within selling expenses as incurred.

Borrowing costs

3Accounting policies

Revenue

Revenue is recognized when or as the control over distinct goods or services is transferred to the customer and when it is probable that the economic

benefits will flow to the Group and the revenue can be measured reliably . Revenue is measured at the fair value of the consideration received or to be received. Customer bonuses, discounts, rebates, and other sales

taxes or duties reduce the amount of revenue recognized. The effects of significant financing components can be ignored if the vendor expects, at contract inspection, that the period between the transfer of a promised good or service to the customer and the date of payment will be one year or less. Revenue from the sale of goods is recognized when significant risks and rewards of ownership have been transferred to the customer, a price is

agreed or can be determined and when the payment is probable. Revenue from a contract to provide services is recognized according to the stage of completion, if the amount of the revenue can be measured reliably and it is probable that the economic benefits will flow to the Group.

Cost of sales

Cost of sales comprises costs for the production of goods and for merchandise sold. In addition to directly attributable material and production costs, indirect production-related overheads like production and purchase management, warranty expenses, depreciation on production plants and amortization as well as impairment of intangible assets. Cost of sales also includes write-downs on inventories to the lower net realizable value.

Borrowing costs are expensed as incurred, unless they are directly attributable to the acquisition, construction or production of a qualifying asset and therefore form part of the cost of that asset.

Interest income and expense

The interest income and expense include the interest expenses from liabilities and the interest income from the investment of cash. The interest components from defined benefit pension plans and similar obligations are reported within personnel expenses.

Other financial income and expense

The other financial result includes all remaining income and expenses from financial transactions that are not included in the interest income and expense.

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ACCOUNTING POLICIES

Income taxes

Income tax expense comprises current and deferred tax.

Current tax comprises the expected tax payable or receivable for the year and any adjustment related to previous years and is measured using tax rates enacted or substantively enacted at the reporting date. Current tax assets and liabilities are offset only if certain criteria are met.

For potential risks related to uncertain tax positions the Group recognized provisions in accordance with IFRIC 23. Measurement is based on either the most likely amount or the expected value, depending on which amount best reflects the expectations.

Deferred tax is recognized on temporary differences between the carrying value of assets and liabilities under IFRS and their tax base, except for temporary differences arising from goodwill or from the initial recognition,

other than in a business combination, of assets and liabilities in a transaction that affects neither taxable nor accounting profit.

Deferred tax assets are recognized for deductible temporary differences, tax loss carryforwards and tax credits to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date to determine whether it is probable that the related tax benefit will be realized. The carrying value is adjusted accordingly.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on tax rates enacted or substantively enacted at the reporting date. The measurement of deferred

tax reflects the tax consequences that would follow from the manner in which Stabilus expects to recover or settle the carrying amount of its

assets and liabilities. Deferred tax assets and liabilities are offset only if certain criteria are met.

Goodwill

Goodwill is measured at cost less any accumulated impairment losses and is not amortized. It is tested for impairment at least annually and if an indication for impairment exists.

The Group tests goodwill for impairment by comparing its recoverable amount with its carrying amount. For this purpose, goodwill is allocated to the cash-generating units (CGU) that are expected to benefit from the business combination at the acquisition date. Goodwill is tested for impairment at the lowest level within the Group at which goodwill is being monitored.

An impairment loss on goodwill is recognized if the recoverable amount of the cash-generating unit is below its carrying amount. Impairment losses are recognized in profit or loss. Impairment losses on goodwill are not reversed.

Other intangible assets

Purchased intangible assets are measured at acquisition cost and internally generated intangible assets at production cost less any accumulated amortization and impairment losses. Internally generated intangible assets are only recognized when the criteria in accordance with IAS 38 are met.

Intangible assets with finite useful lives are amortized on a straight-line basis over their useful economic life and tested for impairment if there is an indication that the intangible asset may be impaired. The estimated useful life and the amortization method are reviewed at the end of each reporting period. The effect of changes in the estimate is being accounted for on a prospective basis. Intangible assets with indefinite useful lives are not amortized and are tested for impairment at least annually and if an indication for impairment exists.

The following useful lives are used in the calculation of amortization: Software (3 to 5 years), patented technology (16 years), customer relationships (19 to 24 years), unpatented technology (6 to 10 years) and trade names (7 years).

Research and development expenses

Development costs are capitalized when the criteria in accordance with IAS 38 are met, otherwise expensed as incurred.

To meet the recognition criteria of IAS 38, Stabilus has to demonstrate the following: (1) the technical feasibility of completing the intangible asset so that it will be available for use or sale; (2) the intention to complete the intangible asset and use or sell it; (3) the ability to use or sell the intangible asset; (4) how the intangible asset will generate probable future economic benefits; (5) the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and (6) the ability to measure reliably the expenditure attributable to the intangible asset during its development.

Capitalized development costs comprise all costs directly attributable to the development process and are amortized systematically from the start of production over the expected product cycle of three to fifteen years depending on the lifetime of the product.

Property, plant and equipment

Property, plant and equipment, exempt from right-of-use assets under leases (IFRS 16), is measured at cost less accumulated depreciation and impairment losses.

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ACCOUNTING POLICIES

Cost for property, plant and equipment include the purchase price, costs directly attributable to bringing the asset to the location and condition necessary to be capable of operating in the manner intended. This also applies for self-constructed plant and equipment taking into account the cost of production.

Subsequent costs are capitalized only if they increase the future economic benefits embodied in the specific asset to which they relate.

Depreciation on property, plant and equipment is recognized on a straight-line basis over the estimated useful lives of the assets. The residual values, depreciation methods and useful lives are reviewed annually and adjusted, if necessary.

Depreciation is primarily based on the following useful lives: Buildings (40 years), machinery and equipment (5 to 10 years) and other equipment (5 to 8 years).

Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss. If necessary, additional impairment is recognized on the affected items.

As of October 1, 2019, the Stabilus Group applied the IFRS 16 (Leases) standard for the first time. For all leases (exempt practical expedients) a right-of-use asset has to be activated on the balance sheet. The Stabilus Group is disclosing the right-of-use assets to property, plant and equipment in the same balance sheet position as the underlying assets, as if they were own property.

Stabilus recognizes government grants when there is reasonable assurance that the conditions attached to the grants are complied with and the grants will be received. Government grants related to the purchase or the production of fixed assets are generally offset against the acquisition or production costs of the respective assets so that the grant is recognized in profit or loss over the life of the asset through reduced depreciation expense.

Leases

Since fiscal year 2020, starting October 1, 2019, the Company accounted for leases using IFRS 16 (Leases). By adopting this standard, the Group changed its accounting method for all leases where Stabilus is the lessee. There is no distinction between finance lease and operating lease anymore. In the last fiscal year, there was one finance lease classified by the Group.

A lease is defined as a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration. For all leases that are not classified as low-value leases (underlying asset < 5.000 EUR / USD), short-term leases (lease term less than 12 months) or intangible assets, a right-of-use asset with a corresponding lease liability is classified. The right-of-use assets are measured at cost. All right-of-use assets are depreciated over the total lease term on a straight-line basis. The lease liabilities are measured by increasing the carrying amount to reflect the interest expenses for the leases and by reducing the carrying amount to reflect the lease payments made.

For all leases respective lease term options (e.g. renewal options) are considered. The application of such lease term options provides the Group with the greatest possible flexibility concerning their leased assets. The majority of the current options to extend or terminate the leases can only be exercised by the Group and not by the respective lessor. Within the Stabilus Group the extension options are solely used for the asset class "buildings". For all other leases the minimum term of lease is considered.

The residual terms of the lease agreements are as follows:

--	Building + land improvements (IFRS 16): 2 to 15 years
--	Machinery + equipment (IFRS 16):	2 to 8,5 years
--	Other tangible equipment (IFRS 16):	>1 to 8 years

The Stabilus Group is disclosing the right-of-use assets to property, plant and equipment in the same balance sheet position as the underlying assets, as if they were own property.

For all leases that are not classified under IFRS 16 (Leases) the corresponding lease payments are recognized as an expense in profit or loss on a straight-line basis over the lease term.

The Stabilus Group acts only as a lessee.

Impairment of non-financial assets

Stabilus assesses at each reporting date whether there is an indication that an asset may be impaired. If such indication exists Stabilus estimates the recoverable amount of the asset. Goodwill and intangible assets under construction are tested annually for impairment.

The recoverable amount is determined for individual assets, unless an asset does not generate cash inflows that are largely independent of those from other assets or groups of assets (cash-generating units).

The recoverable amount is the higher of its fair value less costs of disposal and its value in use. Stabilus determines the recoverable amount as fair value less costs of disposal and compares this with the carrying amounts (including goodwill). The fair value less costs of disposal is measured by discounting future cash flows using a risk-adjusted interest rate. The future cash flows are estimated on the basis of the operative planning (five-year window). Periods not included in the business plans are taken into account by applying a residual value which considers a growth rate of 1.0%. If the fair value less costs of disposal cannot be determined or is lower than the carrying amount, the fair value less costs of disposal is calculated. If the carrying amount exceeds the recoverable amount an impairment loss has to be recognized.

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ACCOUNTING POLICIES

The calculation of the value in use and the fair value less costs of disposal is most sensitive to the following assumptions: (1) Gross margins are

based on average values achieved in the last two years adopted over the budget period for anticipated efficiency improvements. (2) Discount rates reflect the current market assessments of the risks of the cash-generating unit. The rate was estimated based on the average percentage of a weighted average cost of capital for the industry. (3) Estimates regarding the raw materials price developments are obtained by published indices from countries in which the resources are mainly bought. Forecast figures (mainly in Europe and the US) and past price developments have been used as an indicator for future developments. (4) Management notices that the Group's position continues to strengthen, as customers shift their purchases to larger and more stable companies. Therefore, there is no need for any doubt regarding the assumption of market share. (5) Revenue growth rates are estimated based on published industry research.

At each reporting date an assessment is made to determine whether there is any indication that impairment losses recognized in earlier periods no longer exist. In this case, Stabilus recognizes a reversal of the impairment loss up to a maximum of the amortized historical cost. Impairment losses on goodwill are not reversed.

Inventories

Inventories are recognized at the lower of cost and net realizable value using the average cost method. Production costs include all direct costs of material and labor and an appropriate portion of fixed and variable overhead expenses. Net realizable value is calculated as the estimated selling price less all estimated costs of completion and costs necessary to make the sale. Borrowing costs for the production period are not included. Previously recognized impairment losses must be reversed if the reasons for the impairment no longer exit. Impairment losses are reversed up to a maximum of the amortized historical cost. Provisions are set up on the basis of the analysis of stock moving and / or obsolete stock.

Government grants

According to the regulations of IAS 20 government grants are only reported if there is reasonable assurance that the conditions are complied, and the grants will be received. Government grants are recognized at fair value. Government grants related to expenses are recognized over the same period as the corresponding expenses were incurred.

In fiscal year 2020, government grants especially include grants for short -time work, social security and rental subsidies due to the impact of COVID-19. Those government grants are presented as deduction of the related expenses in the same functional area as the related expense items were accounted for. Grants which were awarded for future expenses are presented as deferred income.

The accounting for government grants related to the purchase or

production of fixed assets is separately described in the notes section property, plant and equipment.

Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or an equity instrument of another entity. Financial instruments recorded as financial assets or financial liabilities are generally reported separately. Financial instruments are recognized as soon as the Stabilus Group becomes a party to the contractual provisions of the financial instrument. Financial instruments comprise financial receivables or liabilities, trade accounts receivable or payable, cash and cash equivalents and other financial assets or liabilities. A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not measured at fair value through profit and loss, transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price in accordance with IFRS 15.

The financial instruments are allocated to one of the categories defined in IFRS 9 "Financial Instruments". The measurement categories relevant for Stabilus are financial assets at amortized cost and financial liabilities measured at amortized costs.

Financial assets

IFRS 9 contains three categories for classifying financial assets: "measured at amortized cost (AC)", "measured at fair value through profit or loss (FVtPL)" and "measured at fair value through other comprehensive income (FVOCI)". The classification of financial assets whose cash flows are comprised entirely of interest and redemption payments is then dictated by the business model. Financial instruments held so as to collect contractual cash flows are recognized at amortized cost. With the exception of derivative financial instruments and of contingent consideration, all financial assets fulfill these criteria and are recognized at amortized cost. The contingent consideration is classified in the category fair value through profit or loss (FVtPL). The Group does not currently apply the category fair value through other comprehensive income (FVOCI).

Financial assets measured at amortized cost

A financial asset measured at amortized costs includes trade accounts receivable, other receivables, assets related to the sale of trade accounts receivable (security retention amount), cash and cash equivalents and loans originated by the Group. They are held for the purpose of the Stabilus business model which is to hold the assets and generate contractual cash flows. The cash flow criteria for these financial assets are met. After initial recognition, the assets are subsequently carried at amortized cost using the effective interest rate method less impairment losses. Gains and

losses are recognized in profit or loss when the assets are derecognized or impaired. Interest from using the effective interest rate method is

similarly recognized in profit or loss. Assets bearing no or lower interest rates compared to market rates with a maturity of more than one year

are discounted . Dividends are recognized in profit or loss when legal entitlement to the payment arises.

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ACCOUNTING POLICIES

Impairment of financial assets

Under IFRS 9, valuation allowances for expected credit losses ("expected loss model") must be recognized for all financial assets measured at

amortized cost and for all debt instruments measured at fair value through other comprehensive income. IFRS 9 provides a three-level method for this purpose. Risk provisions are accrued on the basis either of the 12 months expected losses (level 1), or of the lifetime expected losses if the credit risk has increased significantly since initial recognition (level 2), or if the credit rating has been downgraded significantly (level 3). The simplified approach is adopted for trade accounts receivable with no material financing component. As such, the expected credit losses are always determined for the lifetime expected losses of the financial instruments.

Financial assets measured at amortized costs

its amortized cost at the reversal date. Impaired debts are derecognized when they are assessed as uncollectible. Cash and cash equivalents are measured using the general impairment approach. Details of the impairment approach of cash and cash equivalents are presented in Note 20.

Derivative financial instruments

As of September 30, 2020, and September 30, 2019, the Stabilus Group does not have derivative financial instruments.

Financial liabilities and equity instruments

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangement.

Pensions and similar obligations

The contributions to our pension plans are recognized as an expense when the entity consumes the economic benefits arising from the services provided by the employees in exchange for employee benefits. Fordefined benefit pension plans the projected unit credit method is used to determine the present value of a defined benefit obligation.

For the valuation of defined benefit plans, differences between actuarial assumptions used and actual developments as well as changes in actuarial assumptions result in actuarial gains and losses, which have a direct impact on the consolidated statement of financial position and on other comprehensive income. The pension obligations are measured on the basis of actuarial reports by independent actuaries.

Equity instruments

Other provisions

For trade accounts receivables the Stabilus Group elects to use the simplified approach based on expected credit losses over relevant terms. Default rates are based on historical losses and forward-looking expectations under consideration of the relevant economic environment to determine regional risks. To determine the forward-looking economic conditions, the Group considers in particular the credit default swaps (CDS) of the respective client's geographical location that ensures the risks of the counterparty in the respective country are taken into account. In the current fiscal year, the weighting of the CDS spreads was adjusted as part of the back-tes- ting, the current ECLs may be lower than in the previous year. In addition, the Group has taken out trade credit insurance to insure against the default risk. Trade accounts receivables impaired due to insolvency or other

similar situations or significantly overdue shall be written off on a case by case basis. The carrying amount of the asset is reduced through use of an allowance account. The amount of the loss is recognized in profit or loss. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the

impairment was recognized, the previously recognized impairment loss is reversed, to the extent that the carrying value of the asset does not exceed

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of transaction costs.

Financial liabilities

The first-time application of IFRS 9 had no significant impact on the Group's accounting policies for financial liabilities and derivative financial instruments. IFRS 9 largely retains the existing requirements of IAS 39 for the classification of financial liabilities. Financial liabilities primarily include a term loan, trade accounts payable and other financial liabilities.

Financial liabilities measured at amortized cost

Financial liabilities that are measured at amortized cost include a term loan.

After initial recognition the financial liabilities are subsequently measured at amortized cost applying the effective interest rate method. Gains and losses are recognized in profit or loss through the amortization process or when the liabilities are derecognized.

Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. All cost elements that are relevant flow into the measurement of other provisions - in particular those for warranties and potential losses on pending transactions. Non-current provisions with a residual term of more than one year are recognized at the balance sheet date with their discounted settlement amount. The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the balance sheet date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the obligation, its carrying amount is the present value of those cash flows. When some or

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REVENUE

all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

A restructuring provision is recognized when the Group has developed a detailed formal plan for the restructuring and has raised a valid expectation

in those affected that it will carry out the restructuring by starting to implement the plan or announcing its main features to those affected by it. The measurement of a restructuring provision includes only the direct expenditure arising from the restructuring, which are those amounts that are both necessarily entailed by the restructuring and not associated with the ongoing activities of the entity.

Termination benefits are granted if an employee is terminated before the normal retirement age or if an employee leaves the Company voluntarily in return for the payment of a termination benefit. The Group records

termination benefits if it is demonstrably committed, without realistic possibility of withdrawal, to a formal detailed plan to terminate the employment of current employees or if it is demonstrably committed to pay termination benefits if employees leave the Company voluntarily.

Provisions for warranties are recognized at the date of sale of the relevant products, at the management's best estimate of the expenditure required to settle the Group's obligation. Provisions for expected losses from onerous contracts are recognized if the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it.

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4Revenue

The Group's revenue developed as follows:

Revenue by region and business unit			T _ 027

		Year ended Sept 30,

IN € THOUSANDS	2020			2019

EMEA

Automotive Gas Spring	111,689			145,507

Automotive Powerise®	84,181			98,032

Industrial2)	215,253			238,560

Total EMEA1)	411,123			482,099

Americas

Automotive Gas Spring	88,184			118,859

Automotive Powerise®	105,734			132,985

Industrial2)	105,637			114,144

Total Americas1)	299,555			365,988

APAC

Automotive Gas Spring	68,137			67,057

Automotive Powerise®	27,099			18,979

Industrial2)	16,212			17,216

Total APAC1)	111,448			103,252

Stabilus Group

Total Automotive Gas Spring	268,010			331,423

Total Automotive Powerise®	217,014			249,996

Total Industrial2)	337,102			369,920

Revenue1)	822,126			951,339

Revenue breakdown by location of Stabilus company (i.e. "billed-from view").
As of October 1, 2019, our Vibration & Velocity business and Industrial / Capital Goods business unit were combined into Industrial business. The presentation of prior-year figures was changed accordingly.

Group revenue results from the sale of goods or services. Stabilus operates in automotive and industrial markets. As of October 1, 2019, the Stabilus Group changed its organizational and management structure to better address the requirements of regions and markets. The change is that South America and the former NAFTA is now managed as Americas, and,

consequently,South America is not part of Asia / Pacific anymore. As such the new regions of the Group are EMEA (Europe, Middle East and Africa), Americas (North and South America) and APAC (Asia Pacific). These regions are the operating segments of the Stabilus Group.

Furthermore, the industrial business will not be split into different business units anymore. We have merged the business units Vibration & Velocity Control and Industrial / Capital Goods into Industrial. This is to align the market approach for all industrial markets, e.g. to realize cross selling opportunities and to optimize cost structures in managing the industrial business. The presentation of prior year figures is adjusted to provide comparative information already reflecting the new structure.

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D ANNUAL ACCOUNTS

E ADDITIONAL INFORMATION

COST OF SALES, RESEARCH AND DEVELOPMENT,

SELLING AND ADMINISTRATIVE EXPENSES

5Cost of sales, research and development, selling and administrative expenses

Expenses by function									T _ 028

				Year ended Sept 30, 2020

				Research &
		Cost of		development				Adminis-
IN € THOUSANDS	sales		expenses		Selling expenses		trative expenses		Total

Capitalized development cost	-	17,340		-		-	17,340

Personnel expenses	(162,445)	(25,726)	(31,274)	(29,730)	(249,175)

Material expenses	(371,969)	(9,145)	(11,316)	(5,421)	(397,851)

Depreciation and amortization	(36,624)	(15,898)	(40,276)	(3,018)	(95,816)

Other	(19,589)	(7,216)	(23,202)	2,659	(47,348)

Total	(590,627)	(40,645)	(106,068)	(35,510)	(772,850)

				Year ended Sept 30, 2019

				Research &
		Cost of		development				Adminis-
IN € THOUSANDS	sales		expenses		Selling expenses		trative expenses		Total

Capitalized development cost	-	14,319		-		-	14,319

Personnel expenses	(176,500)	(25,656)	(32,875)	(29,908)	(264,939)

Material expenses	(443,308)	(7,416)	(12,247)	(5,342)	(468,313)

Depreciation and amortization	(31,022)	(12,608)	(13,084)	(2,919)	(59,633)

Other	(24,125)	(7,789)	(25,985)	2,514	(55,385)

Total	(674,955)	(39,150)	(84,191)	(35,655)	(833,951)

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The expense items in the statement of comprehensive income include the following personnel expenses:

Personnel expenses		T _ 029

	Year ended Sept 30,

IN € THOUSANDS	2020	2019

Wages and salaries	(175,546)	(187,613)

Compulsory social security contributions	(55,611)	(55,788)

Pension cost	(12,496)	(14,938)

Other social benefits	(5,522)	(6,600)

Personnel expenses	(249,175)	(264,939)

In fiscal year 2020, Stabilus received government grants for social security contribution and rental subsidies due to the impact of COVID-19 with an amount of €4.4 million. These grants are directly recognized in the various functional areas in which they were incurred as a direct deduction from the related expenses. Furthermore, for short time work an amount of €3.9 million were recognized.

The following table shows the Group's average number of employees:

Average number of employees				T _ 030

		Year ended Sept 30,

		2020		2019

Wage earners	4,703		4,823

Salaried staff	1,562		1,549

Trainees and apprentices	109		116

Average number of employees	6,374		6,488

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6Other income

Piston	. The increase is due to the foreign currency translation gains from
the operating business amounting to €1.2 million.
Other income			T _ 031

		Year ended Sept 30,

IN € THOUSANDS	2020	2019

Net foreign currency translation gains	2,872	1,636

Gains on sale / disposal of assets	108	207

Income from the release of other accruals	473	475

Miscellaneous other income	5,474	5,976

Other income	8,927	8,294

7Other expenses

Other expenses				T _ 032

		Year ended Sept 30,

IN € THOUSANDS	2020		2019

Losses on sale / disposal of tangible assets	(146)		(71)

Miscellaneous other expenses	(1,914)		(1,596)

Other expenses	(2,060)		(1,667)

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C CONSOLIDATED FINANCIAL STATEMENTS	D ANNUAL ACCOUNTS
		OTHER INCOME

		OTHER EXPENSES

		FINANCE INCOME

		FINANCE COSTS

		INCOME TAX EXPENSE

8Finance income
Finance income			T _ 033

				Year ended Sept 30,

IN € THOUSANDS	2020		2019

Interest income on loans and financial
receivables not measured at fair value
through profit and loss	443		374

Net foreign exchange gain	1,759		835

Other interest income	56		45

Finance income	2,258		1,254

Finance income increased from €1.3 million in fiscal year 2019 to €2.3 million in fiscal year 2020. The increase is mainly due to net foreign exchange gains amounting to €0.9 million from the translation of

intragroup loans, cash and cash equivalents and financial liabilities.

9Finance costs

Finance costs			T _ 034

	Year ended Sept 30,

IN € THOUSANDS	2020	2019

Interest expense on financial liabilities
not measured at fair value through
profit and loss	(8,832)	(9,663)

Interest expenses lease liabilities1)	(1,453)	(2)

Other interest expenses	(728)	(752)

Finance costs	(11,013)	(10,417)

Since October 1, 2019, the Stabilus Group has adopted the new standard IFRS 16 (Leases) by using the modified retrospective transition method. In accordance with this method, prior year figures were not restated.

E ADDITIONAL INFORMATION

(PY: €- million) interest expense. Finance costs increased from €(10.4) million in fiscal year 2019 to €(11.0) million in fiscal year 2020. The increase is primarily due to the initial application of IFRS 16 (Leases) which results in an additional €(1.5) million (PY: €- million) interest expense. In addition, €(0.9) million (PY: €(1.1) million relates to the derecognition of unamortized debt issuance costs and unamortized adjustments of the carrying value from a voluntary prepayment of the term-loan facility in February 2020.

10Income tax expense

Income taxes comprise current taxes on income (paid or owed) in the

individual countries and deferred taxes. The tax rates which are applicable on the reporting date are used for the calculation of current taxes. Tax rates for the expected period of reversal, which are enacted or substantively enacted at the reporting date, are used for the calculation of deferred taxes. Deferred taxes are recognized as deferred tax expenses or income in the statement of comprehensive income, either through profit or loss or other comprehensive income, depending on the underlying transaction.

Income tax expense		T _ 035

	Year ended Sept 30,

IN € THOUSANDS	2020	2019

Current income taxes	(26,298)	(31,543)

Income taxes prior year	(2,376)	(1,535)

Deferred taxes	11,274	(875)

Income tax expense	(17,400)	(33,953)

		63

A TO OUR SHAREHOLDERS

B COMBINED MANAGEMENT REPORT

C CONSOLIDATED FINANCIAL STATEMENTS

D ANNUAL ACCOUNTS

E ADDITIONAL INFORMATION

INCOME TAX EXPENSE

The respective local rates have been used to calculate the deferred taxes. The current income taxes comprise prior year taxes amounting to €(2,376) thousand (PY: €1,535 thousand).

The actual income tax expense of €(17,400) thousand is €(5,582) thousand higher than the expected income tax expense of €(11,818) that results from applying the Company's combined income tax rate of 24.9% to the Group's consolidated profit before income tax. The individual items that reconcile the expected income tax expense to the actual income tax expense are disclosed in the table below:

The tax effect reported as a foreign tax rate differential reflects the

difference between the combined income tax rate of 24.9% that is pertinent to Stabilus S. A. and the combined income tax rates applicable to the individual subsidiaries in varying countries. The combined statutory income tax rate that is applicable to Stabilus S. A. remained unchanged at 24.9% in the fiscal year 2020. The tax effect of non-deductible expenses consists primarily of expenses that are non-deductible in the determination

Deferred tax assets and liabilities

of the taxable profits in Germany. The tax effect of non-capitalized deferred taxes on domestic losses is calculated with the local tax rates on the basis of the negative earnings before taxes (EBTs) of the respective companies.

The deferred tax assets (DTA) and deferred tax liabilities (DTL) in respect of each type of the temporary difference and each type of unused tax losses are as follows:

T _ 037

Tax expense reconciliation (expected to actual)		T _ 036

	Year ended Sept 30,

IN € THOUSANDS	2020	2019

Profit / (loss) before income tax	47,388	114,852

Expected income tax expense	(11,818)	(28,644)

Foreign tax rate differential	971	(1,839)

Tax-free income	4,206	4,504

Non-deductible expenses	(7,223)	(6,727)

Prior year taxes	(2,376)	(1,535)

Change of the valuation allowance on
deferred tax assets	(1,033)	10

Tax rate changes	(251)	(32)

Other	124	310

Actual income tax expense	(17,400)	(33,953)

Effective tax rate	(36.7)%	29.6%

S TA B I L U S A N N U A L R E P O R T 2 0 2 0

			Sept 30, 2020						Sept 30, 2019

IN € THOUSANDS	DTA		DTL	Total	DTA		DTL		Total

Intangible assets	250	(56,391)		(56,141)			426	(69,303)	(68,877)

Property, plant & equipment	4,206	(11,431)		(7,225)			6,545	(9,233)	(2,688)

Inventories	3,763	(202)		3,561			3,593	(144)	3,449

Receivables	645	(12)		633			427	(12)	415

Other assets	386	(124)		262			16	(176)	(160)

Provisions and liabilities	20,908	(694)		20,214			18,887	(615)	18,272

Tax and interest losses	6,189		-	6,189			7,027		-	7,027

Subtotal	36,347	(68,854)		(32,507)			36,921	(79,483)	(42,562)

Netting	(25,198)	25,198		-		(23,550)	23,550		-

Total	11,149	(43,656)		(32,507)			13,371	(55,933)	(42,562)

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B COMBINED MANAGEMENT REPORT

C CONSOLIDATED FINANCIAL STATEMENTS

D ANNUAL ACCOUNTS

E ADDITIONAL INFORMATION

INCOME TAX EXPENSE

Deferred tax assets and deferred tax liabilities have been offset if they relate to income taxes levied by the same tax authorities and if there is a right to offset current tax assets against current tax liabilities.

The following table provides a detailed overview of the tax loss and interest carryforwards and the expiration dates:

Tax loss and interest carry-forwards									T _ 038

							Year ended Sept 30, 2020

			Tax loss and
			interest			Deferred tax		Valuation		Deferred tax
IN € THOUSANDS			carry-forward	Tax rate		asset (gross)		allowance		asset (net)	Expiration date

Germany		23,328		27.0 - 31.0%	6,147		-	6,147		Indefinite

Spain		5,234		28.0%	1,465	(1,465)		-		Indefinite

USA			-	-		-		-		-	-

Brazil		125		34.0%	42		-	42		Indefinite

Total		28,687			7,654	(1,465)	6,189

							Year ended Sept 30, 2019

			Tax loss and
			interest			Deferred tax		Valuation		Deferred tax
IN € THOUSANDS			carry-forward	Tax rate		asset (gross)		allowance		asset (net)	Expiration date

Germany	23,377		27.0 - 31.0%	6,355	(6)	6,349		Indefinite

Spain	5,229		28.0%	1,464	(1,464)		-		Indefinite

USA	5,393		22.0 - 35.0%	597		-	597		Within 20 years

Brazil	238		34.0%	81		-	81		Indefinite

Total	34,237			8,497	(1,470)	7,027

S TA B I L U S A N N U A L R E P O R T 2 0 2 0

The movement in deferred income tax assets and liabilities in fiscal year

2020 are as follows:

Reconciliation movement in deferred tax
assets and liabilities		T_039


IN € THOUSANDS	2020	2019

Deferred tax liabilities (net) - as of Oct 1,	42,561	32,758

Deferred tax income	(11,274)	875

Taxes recognized in other
comprehensive income	573	(2,786)

Taxes from business combination	0	12,340

Foreign exchange rate differences	647	(626)

Deferred tax liabilities (net) - as of Sept 30,	32,507	42,562

As of September 30, 2020, the Group has unused tax loss carryforwards (including German and US interest loss carryforwards) of €28,687 thousand (PY: €34,237 thousand).

The	interest carry-forward comes from our	German	entities with
an	amount of €18,320 thousand and a gross	deferred	tax asset of

€4,919 thousand and unused tax loss carry-forward from our entities in the USA, Spain, Germany and Brazil relating to corporate tax and trade tax with an amount of €10,367 thousand and a gross deferred tax asset of €2,735 thousand. The amount recognized as a deferred tax asset is calculated under consideration of the actual corporate planning and its utilization within the planning period. Uncertainties exists regarding to the recognized tax losses carried forward from the US restructuring.

Tax loss carryforwards in Luxembourg are not considered, as it is not likely that these carryforwards will be utilized.

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B COMBINED MANAGEMENT REPORT

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D ANNUAL ACCOUNTS

E ADDITIONAL INFORMATION

EARNINGS PER SHARE

11Earnings per share

The weighted average number of shares used for the calculation of
earnings	per share in the fiscal years	ended September	30, 2020 and
2019, is set out in the following table:
Weighted average number of shares										T _ 040

												Total shares
DATE			Number of days	Transaction	Change	Total shares			(time-weighted)

September 30, 2018						24,700,000	24,700,000

October 1, 2018	365					24,700,000	24,700,000

September 30, 2019						24,700,000	24,700,000

October 1, 2019	365					24,700,000	24,700,000

September 30, 2020							24,700,000	24,700,000

The earnings per share for the fiscal years ended September 30, 2020 and
2019, were as follows:
Earnings per share										T _ 041

										Year ended Sept 30,

									2020		2019

Profit / (loss) attributable to shareholders of the parent (in € thousands)				31,433	80,626

Weighted average number of shares						24,700,000		24,700,000

Earnings per share (in €)						1.27		3.26

Basic and diluted earnings per share are calculated by dividing the profit attributable to the shareholders of the Company by the weighted average number of shares outstanding.

S TA B I L U S A N N U A L R E P O R T 2 0 2 0

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C CONSOLIDATED FINANCIAL STATEMENTS

D ANNUAL ACCOUNTS

E ADDITIONAL INFORMATION

PROPERTY, PLANT AND EQUIPMENT

12Property, plant and equipment

Property, plant and equipment are presented in the following table:

Property, plant and equipment											T _ 042

			Land, equivalent		Buildings and land		Technical equipment
IN € THOUSANDS	rights to real property		improvements		and machinery		Other tangible equipment		Construction in progress		Total

Gross value
Balance as of Sept 30, 2018			15,045		50,911		205,318		55,787		23,553		350,614
Additions from business combination			2,088		11		929		481		8		3,517
Foreign currency difference			(3)		888		3,903		1,488		87		6,363
Additions		609	6,128	9,362	5,043		21,448	42,590
Disposals			-		(823)		(2,035)		(6,025)		-		(8,883)
Reclassifications			-		3,628		10,385		5,161		(19,174)		-
Balance as of Sept 30, 2019	17,739	60,743	227,862	61,935	25,922	394,201
Additions from business combination			-		-		-		-		-		-
Initial application of IFRS 16			-		37,842		1,766		4,116		-		43,724
Foreign currency difference			(318)		(4,878)		(15,449)		(3,388)		(994)		(25,027)
Additions			-		3,310		8,799		4,064		18,306		34,479
Disposals		-	(111)	(1,226)	(2,022)	(13)	(3,372)
Reclassifications			-		(122)		9,191		1,835		(10,891)		13
Balance as of Sept 30, 2020		17,421	96,784	230,943	66,540	32,330	444,018
Accumulated depreciation
Balance as of Sept 30, 2018			-		(15,740)		(115,560)		(40,089)		-		(171,389)
Foreign currency difference			-		(532)		(2,541)		(1,230)		-		(4,303)
Depreciation expense			-		(3,134)		(15,817)		(7,839)		-		(26,790)
Thereof impairment loss			-		-		-		-		-		-
Disposal		-		798		1,467		5,962		-		8,227
Reclassifications			-		-		-		-		-		-
Balance as of Sept 30, 2019	-	(18,608)	(132,451)	(43,196)		-	(194,255)
Foreign currency difference			-		1,398		9,380		2,555		-		13,334
Depreciation expense			-		(8,875)		(17,298)		(9,760)		-		(35,933)
Thereof impairment loss		-		-	(20)		-		-	(20)
Disposal			-		49		717		1,880		-		2,645
Reclassifications			-		-		-		-		-		-
Balance as of Sept 30, 2020		-	(26,036)	(139,652)	(48,521)		-	(214,209)
Carrying amount
Balance as of Sept 30, 2019	17,739	42,135	95,411	18,739	25,922	199,946
Balance as of Sept 30, 2020			17,421	70,748	91,291	18,019	32,330	229,809
S TA B I L U S A N N U A L R E P O R T 2 0 2 0										67

A TO OUR SHAREHOLDERS

B COMBINED MANAGEMENT REPORT

Property, plant and equipment include right-of-use assets due to the first -time application of IFRS 16 (Leases) in fiscal year 2020. Please refer to Note 24 "Leases" for additional information on future lease payments.

The first-time application of IFRS 16 (Leases) as of October 1, 2019, amounted to €43,724 thousand. During the fiscal year 2020 additions of right-of-use assets amounted to €4,527 thousand. The main impact was from additions of buildings €2,960 thousand and from other tangible equipment like cars in the amount of €1,567 thousand. The right-of- use assets carrying amount as of September 30, 2020, amounted to €38,550 thousand. The carrying amount of the accumulated depreciation of the right-of-use assets by asset class amounted to €8,245 thousand.

In fiscal year 2020 the government grants received for the ramp-up of a dedicated Powerise® production building in Pinghu, China, amounted to €1,114 thousand (PY: €0 thousand).

In fiscal year 2015 the Stabilus Group received government grants amounting to €805 thousand which are linked to the installation of our third Powerise® production line in Romania. For the entitlement to this grant Stabilus Romania S.R.L. has to meet certain thresholds (headcount and quantity of products) over a five-year period. If such thresholds were not met, the grant would have to be paid back.

Contractual commitments for the acquisition of property, plant and equipment amount to €1,983 thousand (PY: 4,033 thousand).

The Group recognized impairment losses on property, plant and equipment amounting to €20 thousand (PY: €0 thousand).

Prepayments by the Stabilus Group for property, plant and equipment and intangible assets of €28 thousand (PY: €66 thousand) are included in other non-current assets. Larger prepayments are typically secured by a bank guarantee or an in-depth check of the relevant supplier.

C CONSOLIDATED FINANCIAL STATEMENTS	D ANNUAL ACCOUNTS	E ADDITIONAL INFORMATION
		PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment - carrying amount			T _ 043


IN € THOUSANDS	Sept 30, 2020	Sept 30, 2019

Land, equivalent rights to real property	17,421		17,739

Building and land improvements	36,924		42,135

Technical equipment and machinery	89,848		95,411

Other tangible equipment	14,736		18,739

Construction in progress	32,330		25,922

RoU - Building and land improvements	33,824		-

RoU - Technical equipment and machinery	1,443		-

RoU - Other tangible equipment	3,283		-

Total	229,809		199,946

The total depreciation expense for tangible assets is included in the consolidated statement of comprehensive income in the following line items:

Reconciliation depreciation expense for property, plant and equipment				T _ 044


					Year ended
	Year ended		Sept 30, 2020		Year ended
IN € THOUSANDS	Sept 30, 2020	Effect of IFRS 16	without IFRS 16		Sept 30, 2019

Cost of sales	(29,731)		(5,873)	(23,858)		(23,323)

Research and development expenses	(1,777)		(463)	(1,314)		(1,388)

Selling expenses	(2,311)		(1,103)	(1,208)		(540)

Administrative expenses	(2,114)		(806)	(1,308)		(1,539)

Depreciation expense	(35,933)		(8,245)	(27,688)		(26,790)

S TA B I L U S A N N U A L R E P O R T 2 0 2 0

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				PROPERTY, PLANT AND EQUIPMENT

Right of use assets							T_045
		Buildings		Technical
		and land		equipment		Other tangible
IN € THOUSANDS	improvements		and machinery		equipment		Total

Gross value

Balance as of Sept 30, 2019	2,850		-		-	2,850

Initial application of IFRS 16	37,842	1,766	4,116	43,724

Foreign currency difference	(2,414)	(42)	(233)	(2,689)

Additions	2,960		-	1,567	4,527

Disposals	(104)		-	(247)	(351)

Reclassifications	-		-		-		-

Balance as of Sept 30, 2020	41,134	1,724	5,203	48,061


Accumulated depreciation

Balance as of Sept 30, 2019	(1,666)		-		-	(1,666)

Foreign currency difference	173	5	46	224

Depreciation expense	(5,859)	(286)	(2,100)	(8,245)

Thereof impairment loss	-		-		-		-

Disposal	42		-	134	176

Reclassifications	-		-		-		-

Balance as of Sept 30, 2020	(7,310)	(281)	(1,920)	(9,511)


Carrying amount

Balance as of Sept 30, 2019	1,184		-		-	1,184

Balance as of Sept 30, 2020	33,824	1,443	3,283	38,550

S TA B I L U S A N N U A L R E P O R T 2 0 2 0

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C CONSOLIDATED FINANCIAL STATEMENTS

D ANNUAL ACCOUNTS

E ADDITIONAL INFORMATION

GOODWILL

13Goodwill

The total goodwill of €207.7 million (PY: €214.8 million) is allocated to the operating segments (CGUs) on the relevant acquisition date, based on their relative fair value.

The table below sets out the development of the goodwill:

Goodwill							T_046

							Total
IN € THOUSANDS		EMEA		Americas		APAC

Gross value

Balance as of Sept 30, 2018	111,876	70,767	12,588	195,231

Additions from business
combination	14,228		-	1,510	15,738

Foreign currency difference	453	3,621	(222)	3,852

Additions		-		-		-	-

Disposals		-		-		-	-

Impairment losses		-		-		-	-

Reclassifications		-		-		-	-

Balance as of Sept 30, 2019	126,557	74,388	13,876	214,821

Additions from business
combination		-		-		-	-

Foreign currency difference		(2,463)	(4,621)	(76)	(7,160)

Additions		-		-		-	-

Disposals		-		-		-	-

Impairment losses		-		-		-	-

Reclassifications		-	1,178	(1,178)		-

Balance as of Sept 30, 2020		124,094	70,945	12,622	207,661


Carrying amount

Balance as of Sept 30, 2019	126,557	74,388	13,876	214,821

Balance as of Sept 30, 2020		124,094	70,945	12,622	207,661

S TA B I L U S A N N U A L R E P O R T 2 0 2 0

The fair value less cost of disposal for each cash-generating unit as the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or other groups of assets is measured by discounting the future cash flows generated from the continuing use of the unit and was based on the following key assumptions: the underlying cash flow forecasts which are based on the five-year medium term plan ("MTP") approved by the Management Board and Supervisory Board. The cash flow planning takes into account price agreements based on experience and anticipated efficiency enhancements (e.g. relocation from high cost to low cost countries, higher automation, etc.) as well as average total sales growth of approximately 3.5% (PY: 4.0%) for EMEA, 7.2% (PY: 4.3%) for Americas and 15.7% (PY: 20.1%) for APAC on compound average based on the strategic outlook leading to an average higher growth rate for the free cash flow. The higher free cash flow growth rate is also impacted by the product mix effects and the assumed stable gross margins and improved fixed costs absorption. While the overall economic outlook is very volatile, the Group believes

that its market -orientated approach and leading-edge products and services allow for some revenue growth. Cash flows after the five-year

period were extrapolatedby applying a 1% (PY: 1%) terminal growth rate. This growth rate was based on the expected consumer price inflation for the countries included in the respective cash generating units, adjusted for expected technological progress and efficiency gains in the overall

economy . Furthermore, the Group uses inflation deltas to cover the several forward rate risks, 0.70% for EMEA, 1.63% for Americas and 1.40% for APAC, moreover the Group incorporated country risk premiums into its projections to reflect the varying volatility expected in the individual country risks, 1.21% for EMEA, 1.57% for Americas and 0.95% for APAC. The Group's weighted average cost of capital (WACC) has been used as the discount rate for the operating segments. The Stabilus Group uses the recommendation of the "Institut der Wirtschaftsprüfer (IDW)" to determine a proxy for the risk-free rate and the market risk premium. The beta factor represents the individual risk of a share compared to a market index.

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B COMBINED MANAGEMENT REPORT

C CONSOLIDATED FINANCIAL STATEMENTS

D ANNUAL ACCOUNTS

GOODWILL

E ADDITIONAL INFORMATION

Stabilus is evaluating the beta factors used by a group of comparable companies (peer group), on an average of past years. The cost of debt were derived from a number of peers with publicly traded debt. The following assumptions (measurement factors) were used to determine the WACC:

Weighted average cost of capital (WACC)

T _ 047

The following table shows the input data to selected key figures required for the respective recoverable amounts to equal the carrying amount. In management's view this change is not reasonably possible.

Goodwill sensitivity analysis	T _ 048

	Sept 30, 2020

IN %

Interest base-rate

Beta factor Stabilus Group

Market risk premium

Debt ratio

Cost of debt before tax

WACC

Year ended Sept 30,

2020 2019

0.050.21

1.121.08

6.506.50

19.8713.75

1.951.15

6.136.37

		Input data required for
		carrying amount to equal
IN %	recoverable amount

		EMEA	Americas	APAC

Discount rate	6.5	14.3		9.0

Budgeted gross margin
reduction to plan	6.7	8.2		7.3

The impairment test for fiscal year 2020 confirms that the book value of goodwill is fully recoverable and that the goodwill attributable to the

The discount rates applied also reflect the individual country risk of each operating CGU. The discount rate to cash flow projections is 8.0% (PY: 7.1%) for EMEA, 9.2% (PY: 7.2%) for Americas and 8.5% (PY: 7.3%) for APAC.

S TA B I L U S A N N U A L R E P O R T 2 0 2 0

individual operating CGUs is not impaired.

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				OTHER INTANGIBLE ASSETS

14Other intangible assets

Other intangible assets are presented in the following table:

Intangible assets															T _ 049

				Development cost
IN € THOUSANDS	Development cost		under construction		Software		Patents		Customer relationships		Technology		Trade name		Total

Gross value

Balance as of Sept 30, 2018	78,539	12,304	14,018	1,020	204,819	69,403	16,790	396,893

Additions from business combination	190	187	1,499	1,603	39,551		-	1,063	44,093

Foreign currency difference	1,401	59	96	1	2,706	503	(58)	4,708

Additions	2,366	11,801	736	52		-		-		-	14,955

Disposals	(11,182)		-	(1,311)		-		-		-		-	(12,493)

Reclassifications	4,631	(5,319)	688		-		-		-		-		-

Balance as of Sept 30, 2019	75,945	19,032	15,726	2,676	247,076	69,906	17,795	448,156

Additions from business combination	-		-		-		-		-		-		-		-

Foreign currency difference	(1,773)	(87)	(196)	(10)	(3,816)	(593)	(222)	(6,697)

Additions	2,416	14,290	770	5		-		-		-	17,481

Disposals	(8,612)		-	4		-		-		-		-	(8,608)

Reclassifications	8,082	(8,836)	754		-		-		-		-		-

Balance as of Sept 30, 2020	76,058	24,399	17,058	2,671	243,260	69,313	17,573	450,332

Accumulated amortization

Balance as of Sept 30, 2018	(38,679)		-	(9,503)	(907)	(45,907)	(47,322)	(7,394)	(149,712)

Foreign currency difference	(854)		-	(119)	(1)	(488)	(71)	(23)	(1,556)

Amortization expense	(10,888)		-	(2,840)	(126)	(11,828)	(5,845)	(1,316)	(32,843)

Thereof impairment loss	(398)		-		-		-		-		-		-	(398)

Disposals	10,804		-	1,310		-		-		-		-	12,114

Reclassifications	-		-		-		-		-		-		-		-

Balance as of Sept 30, 2019	(39,617)		-	(11,152)	(1,034)	(58,223)	(53,238)	(8,733)	(171,997)

Foreign currency difference	1,268		-	188	3	858	114	62	2,493

Amortization expense	(13,675)		-	(3,154)	(1,141)	(36,747)	(3,537)	(1,629)	(59,883)

Thereof impairment loss	(2,348)		-	(318)	(988)	(24,149)		-	(245)	(28,048)

Disposals	8,310		-	(4)		-		-		-		-	8,306

Reclassifications	-		-		-		-		-		-		-		-

Balance as of Sept 30, 2020	(43,714)		-	(14,122)	(2,172)	(94,112)	(56,661)	(10,300)	(221,081)

Carrying amount

Balance as of Sept 30, 2019	36,328	19,032	4,574	1,642	188,853	16,668	9,062	276,159

Balance as of Sept 30, 2020	32,344	24,399	2,936	499	149,148	12,652	7,273	229,251

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A TO OUR SHAREHOLDERS

B COMBINED MANAGEMENT REPORT

C CONSOLIDATED FINANCIAL STATEMENTS

D ANNUAL ACCOUNTS

E ADDITIONAL INFORMATION

OTHER INTANGIBLE ASSETS

OTHER FINANCIAL ASSETS

Additions to intangible assets in the fiscal year 2020 amounted to €17,481 thousand compared to €59,048 thousand in fiscal year 2019. In prior year an amount of €44,093 thousand relates to the business

combinations. During the fiscal year 2020, costs of €16,706 thousand (PY: €14,167 thousand) (less related customer contributions) were capitalized for development projects.

Amortization of capitalized internal development projects amounted to €13,675 thousand (PY: €10,888 thousand). The borrowing costs

capitalized during the period amounted to €179 thousand (PY: €155 thousand). A capitalization rate was used to determine the amount of borrowing costs. The capitalization rate used in the fiscal year 2020 was 0.95% (PY: 1.05%). The total amortization expense and impairment loss for intangible assets is included in the consolidated statements of comprehensive income in the following line items:

Other intangible assets - carrying amount	T _ 050


IN € THOUSANDS		Sept 30, 2020	Sept 30, 2019

Development cost		32,344		36,328

Development cost under
construction		24,399		19,032

Software		2,936		4,574

Patents		499		1,642

Customer relationships		149,148		188,853

Technology		12,652		16,668

Tradename		7,273		9,062

Total		229,251		276,159

In fiscal year 2020, especially the aviation market was heavily	compared to a market index. Stabilus is evaluating the beta factors
influenced	by the COVID-19 impacts, leading to reduced demand for our	used by a group of comparable companies (peer group), on an average
products servicing the aviation industry due to reduced production of	of past years (we refer to Note 13 for further details). The cost of debt was
aircraft and fewer retrofits of existing aircrafts. The Group tested the	derived from a number of peers with publicly traded debt and the discount
recoverable amount (i.e. value in use) of the CGU General Aerospace and	rates applied also reflects the individual country risk of the CGU General
not of each individual intangible asset. We have performed these tests	Aerospace. The discount rate to cash flow projections is 5.8% (PY:
on the following key assumptions: the underlying cash flow forecasts	5.2%). The impairment test resulted in an impairment of €25.7 million
which are based on the five-yearmedium-term plan ("MTP") approved	for the other intangible assets from purchase price allocation of General
by the Management Board and Supervisory Board. Cash flows after the	Aerospace. The impairment of other intangible assets is included in the
five-year period were extrapolated by applying a 1% (PY: 1%) terminal	research	and development expenses and cost of sales. Previously recognized
growth rate. This growth rate was based on the expected consumer price	impairment on other intangible assets will be reversed if the reason for the
inflation, adjusted for expected technological progress and efficiency gains	impairment no longer exist. In this case, the Group would recognize a rever-
in the overall economy. The Group's weighted average cost of capital	sal of the impairment loss up to a maximum of the amortized historical cost.
(WACC) has been used as part of the discount rate for the CGU General	We are confident that the aerospace business is still an excellent addition to
Aerospace, i.e. interest base rate, market risk premium and beta factor. The	Stabilus´ motion control portfolio with future growth potential.
Stabilus Group uses the recommendation of the "Institut der Wirtschafts-
prüfer (IDW)" to determine a proxy for the risk-free rate and the market risk	Contractual commitments for the acquisition of intangible assets amount
premium. The beta factor represents the individual risk of a share	to €1,459 thousand (PY: €718 thousand).

15Other financial assets

Other financial assets										T _ 051

		Sept 30, 2020							Sept 30, 2019

IN € THOUSANDS	Current	Non-current		Total	Current		Non-current		Total

Other miscellaneous	7,274	-	7,274			4,743		-	4,743

Other financial assets	7,274	-	7,274			4,743		-	4,743

Amortization expenses on development costs include impairment losses of €2,348 thousand (PY: €398 thousand) due to the withdrawal of customers from the respective projects.The impairment loss is included in the research and development expenses.

Other miscellaneous

Other miscellaneous financial assets in the fiscal year 2020 comprises €4,538 thousand (PY: €1,843 thousand) from the anticipated purchase price adjustment and from the contingent consideration from the business combination with General Aerospace GmbH. Furthermore, an amount of €2,736 thousand (PY: €2,900 thousand) is related to the security

retention amount of the sale of trade accounts receivable from a factoring arrangement (€20.9 million (PY: €22.6 million)). Stabilus considers that its other financial assets have a low credit risk based on the external credit ratings of the customers and impairments were insignificant.

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				OTHER ASSETS

				INVENTORIES

				TRADE AND OTHER RECEIVABLES

16Other assets

Other assets											T _ 052

			Sept 30, 2020							Sept 30, 2019

IN € THOUSANDS	Current		Non-current		Total	Current		Non-current		Total

VAT	3,278		-	3,278			4,071		-	4,071

Prepayments	1,967	28	1,995			2,438	66	2,504

Deferred charges	4,613		-	4,613			5,394		-	5,394

Other miscellaneous	1,958	253	2,211			1,911	1,645	3,556

Other assets	11,816	281	12,097			13,814	1,711	15,525

Non-current prepayments comprise prepayments on property, plant and equipment.

The Stabilus Group's prepayments for inventories amounting to €1,047 thousand (PY: €1,212 thousand) are included in prepayments in other current assets.

17Inventories

Inventories		T _ 053


IN € THOUSANDS	Sept 30, 2020	Sept 30, 2019

Raw materials and supplies	48,049		48,548

Finished products	21,521		23,726

Work in progress	13,731		15,361

Merchandise	13,936		12,704

Inventories	97,237		100,339

Inventories that are expected to be turned over within twelve months amounted to €97,237 thousand (PY: €100,339 thousand). Write-downs on inventories to net realizable value amounted to €(13,813) thousand (PY: €(12,509) thousand). In the reporting period raw materials, consumables and changes in finished goods and work in progress recognized as cost of sales amounted to €(371,969) thousand (PY: €(443,308) thousand).

18Trade and other receivables Trade accounts receivable include the following items:

Trade and other receivables			T _ 054


IN € THOUSANDS	Sept 30, 2020		Sept 30, 2019

Trade accounts receivable	116,441	131,177

Other receivables	3,452	1,048

Allowance for doubtful accounts	(2,822)	(1,897)

Trade and other receivables	117,071	130,328

S TA B I L U S A N N U A L R E P O R T 2 0 2 0

A TO OUR SHAREHOLDERS

B COMBINED MANAGEMENT REPORT

C CONSOLIDATED FINANCIAL STATEMENTS

D ANNUAL ACCOUNTS

E ADDITIONAL INFORMATION

TRADE AND OTHER RECEIVABLES

Trade accounts receivable decreased in the fiscal year ended September 30, 2020, mainly due to the lower sales in the third and fourth quarter of fiscal year 2020. Other receivables contain bills of exchange guaranteed by a bank for trade receivables of our Chinese clients.

The Group uses an allowance matrix to measure the lifetime ECLs of trade accounts receivables segmented by geographic region (EMEA, Americas and APAC). Loss rates are based on actual credit loss experience over the past years. These rates take into account the current conditions and the Group's view of economic conditions over the expected lives of the

Exposure to credit risk and ECLs

receivables . The Group considers a financial asset to be in default when the borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to actions such as realizing security (if any is held); or the financial asset is more than 360 days past due. The gross carrying amount of a trade account receivable is written off when the Group has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof.

The following table provides information about the exposure to credit risk and ECLs for trade receivables as at September 30, 2020:

T_055

				Sept 30, 2020
IN € THOUSANDS


Region	Weighted average loss rate		Gross carrying amount		Loss allowance

EMEA	0.34%	37,040	128

Americas	2.12%	49,885	1,057

APAC	0.17%	32,968	57

Total		119,893	1,242

				Sept 30, 2019
IN € THOUSANDS


Region	Weighted average loss rate		Gross carrying amount		Loss allowance

EMEA	0.66%	40,652	270

Americas	0.67%	66,534	443

APAC	0.63%	25,039	157

Total		132,225	870

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C CONSOLIDATED FINANCIAL STATEMENTS

D ANNUAL ACCOUNTS

E ADDITIONAL INFORMATION

TRADE AND OTHER RECEIVABLES

CURRENT TAX ASSETS

CASH AND CASH EQUIVALENTS

Individual loss allowances of €2,822 thousand (PY: €1,897 thousand) were recognized as of the reporting date.

The Group provides credit in the normal course of business and performs ongoing credit evaluations on certain customers' financial condition, but generally does not require collateral to support such receivables. The Group established an allowance for doubtful accounts based on historically

observed default rates adjusted for forward-looking estimates to accrue for expected credit losses. To determine the forward-looking economic conditions, the Group considers in particular the credit default swaps (CDS)

Allowance for doubtful accounts

of the respective client's geographical location that ensures the risks of the counterparty in the respective country are taken into account. In the current fiscal year, the weighting of the CDS spreads was adjusted as part of the back-testing, the current ECLs may be lower than in the previous year. In the course of the COVID-19 crisis there were no significant defaulted trade account receivables and no significant additional allowances for doubtful accounts were recorded. In addition, the Group has taken out trade credit insurance to insure against the default risk.

The allowances for doubtful accounts developed as follows:

T _ 056

19Current tax assets

Current tax assets amounted to €9,591 thousand (PY: €4,987 thousand) and are measured at the amount expected to be recovered from the taxation authorities when the amount already paid in respect of current and prior periods exceeds the amount due for those periods. The initial application of IFRIC 23 has not had any impact on the consolidated financial statements.

20Cash and cash equivalents

Cash and cash equivalents include cash on hand and in banks, i.e. liquid funds and demand deposits. As of September 30, 2020, it amounted to

IN € THOUSANDS	Sept 30, 2020		Sept 30, 2019

Allowance for doubtful accounts as of Sept 30, 2019	(1,897)	(1,744)

Foreign currency differences	85	(35)

Increase in the allowance	(1,495)	(232)

Decrease in the allowance	485	114

Allowance for doubtful accounts as of Sept 30, 2020	(2,822)	(1,897)

S TA B I L U S A N N U A L R E P O R T 2 0 2 0

€162,431 thousand (PY: €139,020 thousand). Cash in banks earned marginal interest at floating rates based on daily bank deposit rates.

The cash and cash equivalents are held with bank and financial institution counterparties, which are investment grade rated as of the reporting date. The estimated impairment on cash and cash equivalents has been

measured on a 12-months expected loss basis and reflects external credit ratings of the counterparties and the short remaining maturities of the exposures. The Stabilus Group believes that the credit risk pertaining to its cash and cash equivalents is low. No significant impairments on cash and cash equivalents were identified in fiscal year 2020.

A TO OUR SHAREHOLDERS

B COMBINED MANAGEMENT REPORT

C CONSOLIDATED FINANCIAL STATEMENTS

D ANNUAL ACCOUNTS

E ADDITIONAL INFORMATION

EQUITY

21Equity

The development of the equity is presented in the statement of changes in equity.

along with the Company's issued capital the total amount of capital that	the shareholders of Stabilus S. A. As this dividend is subject to shareholder
stockholders have contributed to the Company.	approval at the Annual General Meeting, no liability has been recognized in
	the consolidated financial statements as of September 30, 2020.
Retained earnings

Issued capital

Issued capital as of September 30, 2020, amounted to €247 thousand (PY: €247 thousand) and was fully paid in. It is divided into 24,700,000 shares each with a nominal value of €0.01. The authorized capital of the Company is set at €271 thousand represented by a maximum of 27.1 million shares, each with nominal value of €0.01.

Authorization for repurchase of own shares

The Annual General Meeting of the shareholders on February 12, 2020, authorized the Management Board to buy back up to 2 million own

shares . This authorization is given for a period of five years from the date of resolution. The repurchased shares may be used for any legally permissible purpose. The purchase shall be affected either through the stock exchange or on the basis of a public purchase offer to all shareholders. If the shares are acquired on the Frankfurt Stock Exchange the consideration payable per share shall not exceed more than 10% and shall not undercut by more than 20% the arithmetic mean of the closing price in XETRA trading on

Retained earnings as of September 30, 2020, amounted to €287,702 thousand (PY: €283,423 thousand) and included the Group's net result in the fiscal year 2020 amounting to €31,433 thousand.

Dividends

In the second quarter of fiscal year 2020, a dividend amounting to €27.17 million (PY: €24.70 million) was paid to our shareholders. In fiscal year 2020 there were no dividend payments (PY: €62 thousand) to non-controlling shareholders of a Stabilus subsidiary.

The Management Board and the Supervisory Board resolved to propose a dividend distribution of €0.50 per share (PY: €1.10 per share) to the Annual General Meeting to be held in Luxembourg on February 10, 2021. The total dividend will thus amount to €12.35 million (PY: €27.17 million) and the distribution ratio will be 41.2% of the consolidated profit attributable to

Accumulated other comprehensive income / (expense)

Other reserves

The following table shows a breakdown of the line item "other reserves" and the movements in such reserves during the reporting period. A description of the nature and purpose of each reserve is provided below the table.

Exchange differences arising on the translation of the financial statements of the Group's foreign operations are recognized in other comprehensive income and accumulated in a separate reserve within equity which is displayed in the table above as the cumulative foreign currency translation adjustment. On disposal of a foreign operation, the related amount is reclassified out of the cumulative foreign currency translation adjustment into profit or loss where it is recognized as part of the gain or loss on disposal.

The unrealized actuarial gains and losses relate to our defined benefit pension plan which is further explained in Note 26.

T_057

the Frankfurt Stock Exchange on the last three days of trading prior to the decision to repurchase shares.

During the fiscal year 2020, the Company did not buy any of its own shares.

Capital reserves

Capital reserves amounted to €225,848 thousand as of September 30, 2020, (PY: €225,848 thousand) and include premiums received for the issuance of additional shares in 2016 amounting to €224,000 thousands less transaction costs of €(6,273) thousands, a distributable reserve of €4,835 thousand and other capital contributions by owners of €3,286 thousand. The capital reserve is presented separately to indicate

S TA B I L U S A N N U A L R E P O R T 2 0 2 0

		Cumulative foreign
		currency translation		Unrealized actuarial
IN € THOUSANDS	adjustment		gains and losses		Total

Balance as of Sept 30, 2018	(14,182)	(10,430)	(24,612)

Before tax	11,753	(9,211)	2,542

Tax (expense) / benefit	-	2,787	2,787

Other comprehensive income / (expense), net of taxes	11,753	(6,424)	5,329

Non-controlling interest	-		-		-

Balance as of Sept 30, 2019	(2,429)	(16,854)	(19,283)

Before tax	(34,184)	1,920	(32,264)

Tax (expense) / benefit	-	(573)	(573)

Other comprehensive income / (expense), net of taxes	(34,184)	1,347	(32,837)

Non-controlling interest	-		-		-

Balance as of Sept 30, 2020	(36,613)	(15,507)	(52,120)

					77

A TO OUR SHAREHOLDERS

B COMBINED MANAGEMENT REPORT

C CONSOLIDATED FINANCIAL STATEMENTS

D ANNUAL ACCOUNTS

E ADDITIONAL INFORMATION

FINANCIAL LIABILITIES

22Financial liabilities

The financial liabilities comprise the following items:

Financial liabilities												T _ 058
				Sept 30, 2020						Sept 30, 2019

IN € THOUSANDS	Current	Non-current	Total			Current		Non-current		Total

Senior facilities	-	282,724		282,724			-	298,501	298,501

Revolving credit facility	29,894		-	29,894			-		-		-

Other facilities	4,412		5,354		9,766		2,824	10,260	13,084

Financial liabilities	34,306		288,078		322,384		2,824	308,761	311,585

for this loan is 3.95% and it matures on January 15, 2025. The outstanding

nominal amount as at September 30, 2020, is $5.1 million (PY: $6.1 million) . Furthermore, as part of the business combination in fiscal year 2019, the Group entered in several bank loans and the outstanding nominal amount as at September 30, 2020, is €4.3 million (PY: €4.9 million), the effective interest rates are between 1.25% and 2.50%. The maturities of these loan agreements are between March 20, 2021, and September 30, 2023. In addition, the Group recognized purchase price obligations amounting to €1.0 million (PY: €2.5 million) for the acquired entities Piston and Clevers in fiscal year 2019.

As at September 30, 2020, the Group had drawn €29.9 million under the committed €70.0 million revolving credit facility. The Group utilized

On June 7, 2016, Stabilus entered into a €640.0 million senior facilities agreement with, among others, Commerzbank Aktiengesellschaft, Crédit Agricole Corporate and Investment Bank, Landesbank Hessen-Thüringen Girozentrale and UniCredit Bank AG as mandated lead arrangers and UniCredit Luxembourg S. A. as facility and security agent. The agreement comprises a term loan facility of €455.0 million, an equity bridge facility of €115.0 million and a revolving credit facility of €70.0 million. The term loan facility and the revolving credit facility originally mature on June 29, 2021. The duration of the major portion of the senior facilities (other than the equity bridge facility) has been extended to June 28, 2023.

The term loan facility has to be repaid on June 29, 2022, with an amount of €45.0 million and on June 28, 2023, with an amount of €250.0 million.

On July 31, 2020, Stabilus signed an amendment of the senior facility agreement dated June 7, 2016, to prepare for potential future challenges from the COVID-19 crisis and to strengthen financial liquidity. The

amendmentprovides for an additional committed credit line of €50.0 million, a temporary increase of the maximum leverage ratio permitted

under the senior facility agreement and opens the ability to issue promissory loan notes (Schuldscheindarlehen) up to an aggregated amount of €150.0 million. The Group did not issue any promissory loan note in fiscal year 2020.

In respect of the senior facilities a share pledge over the shares of all major subsidiaries has been granted as a security in favor of the lenders on first priority. If the Group defaults on its loan, the lenders could enforce their security and substantially all major operating subsidiaries of the Stabilus Group could be separated from Stabilus S. A. and transferred to


the lenders	through a share pledge enforcement.
Stabilus repaid €50.0 million	on August 31,	2016, €10.0 million
on December 31, 2016, €2.5	million on March	31, €50.0 million on

September 30, 2017, €6.4 million on March 28, 2018, €21.1 million on September 27, 2019, and €20.0 million on February 27, 2020, and reduced the outstanding nominal amount to €295.0 million as at September 30, 2020. The Group´s liability under the senior facility agreement (the

remaining €295.0 million term-loan) is measured at amortized cost under consideration of transaction costs and the adjustment of the carrying value using the effective interest rate method. The adjustment of the carrying value of the term loan facility reflects the change in estimated future cash flows discounted with the original effective interest rate due to a decreased margin based on the improved net leverage ratio of the Group.

In the financial year 2018, Stabilus US entered into a $7.8 million loan agreement which requires monthly installments. The effective interest rate

€0.8 million out of the €70.0 million revolving credit facility to secure existing guarantees. The committed credit line of €50.0 million (PY: €- million) is undrawn.

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OTHER FINANCIAL LIABILITIES

LEASES

23Other financial liabilities

Other financial liabilities											T _ 059

				Sept 30, 2020						Sept 30, 2019

IN € THOUSANDS		Current	Non-current		Total	Current	Non-current		Total

Liabilities to employees	7,168	-	7,168			6,550		-	6,550

Social security contribution	2,272	-	2,272			3,105		-	3,105

Lease liabilities
(PY: finance lease obligation)1)	6,905	33,066	39,971			441		83	524

E ADDITIONAL INFORMATION

Outflows for lease payments	T_060
IN € THOUSANDS	Sept 30, 2020

within one year	8,159

after one year but not more than five years	23,739

more than five years	13,165

Total	45,063

Interest expense on lease liabilities	T_061

Other financial liabilities	16,345	33,066	49,411	10,096	83	10,179

Since October 1, 2019, the Stabilus Group has adopted the new standard IFRS 16 (Leases) by using the modified retrospective transition method. In accordance with this method, prior year figures were not restated.

IN € THOUSANDS

within one year

after one year but not more than five years

more than five years

Sept 30, 2020

1,254

3,021

817

The increase is especially due to the effects resulting from first-time application of IFRS 16 amounting to €43.7 million, thereof €36.9 million as non-current and €6.8 million as current. The liabilities to employees mainly comprise outstanding salaries and wages.

expedient in IFRS 16.6 by not accounting short-term leases (leases with a lease term less than 12 months) and low-value assets (underlying asset < 5.000 EUR / USD e.g. printers and copiers) as right-of-use assets.

Total

Maturity of lease liabilities

5,092

T_062

24Leases

IFRS 16 (Leases) was initially applied in the Stabilus Group as of October 1, 2019, under the modified retrospective approach without any adjustment of prior year figures. In the ordinary business, the Stabilus Group is the

lessee of property, plant and equipment (e.g. IT hardware, cars, and other machinery and equipment). For all leases respective lease term options (e.g. renewal options) are considered. The application of such lease term options provides the Group with the greatest possible flexibility concerning their leased assets. The majority of the current options to extend or terminate the leases can only be exercised by the Group and not by the respective lessor. Within the Stabilus Group the extension options are solely used for the asset class "buildings". For all other leases the minimum term of lease is considered. The Stabilus Group applied the practical

The future minimum lease payments under non-cancellable leases are expected to amount €45.1 million within the next years. Thereof €8.2 million lease payments are payable within the next fiscal year 2021.

The Stabilus Group expects interest expenses on lease liabilities in the amount of €1.3 million for the financial year 2021.

As of September 30, 2020, the lease liabilities amounted to €40.0 million. Thereof €6.9 million are due within the next fiscal year 2021.

In fiscal year 2020 the Group made lease payments due to low-value leases in the amount of €0.3 million and due to short-term leases in the amount of €1.0 million.

IN € THOUSANDS	Sept 30, 2020

within one year	6,905

after one year but not more than five years	20,718

more than five years	12,348

Total	39,971

Expenses of short-term and low-value leases	T_063

IN € THOUSANDS	Sept 30, 2020

Expenses related to short-term leases	1,005

Expenses related to low-value leases	297

Total	1,302

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				PROVISIONS

25Provisions

Provisions											T _ 064
			Sept 30, 2020							Sept 30, 2019

IN € THOUSANDS	Current		Non-current		Total	Current	Non-current		Total

Anniversary benefits	21	154	175			33		153	186

Early retirement contracts	1,350	2,046	3,396			1,037		1,946	2,983

Employee-related costs	12,893		-	12,893			11,332		-	11,332

Environmental protection	460	1,051	1,511			827		1,130	1,957

Other risks	3,719		-	3,719			3,008		-	3,008

Legal and litigation costs	60		-	60			97		-	97

Warranties	15,676		-	15,676			16,806		-	16,806

Other miscellaneous	5,989	448	6,437			5,004		336	5,340

Provisions	40,168	3,699	43,867			38,144		3,565	41,709

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D ANNUAL ACCOUNTS

E ADDITIONAL INFORMATION

PROVISIONS

The discount rate used for the calculation of non-current provisions as of September 30, 2020, was 0.0% (PY: 0.0%). The non-current provisions developed as follows:

Changes of non-current provisions										T _ 065

		Anniversary		Early		EPA		Other
IN € THOUSANDS		benefits		retirement		provision		miscellaneous		Total

Balance as of Sept 30, 2018	129	1,785	1,099	389	3,402

Additions from business combination		-		-		-	16	16

Reclassifications		-		-		-		-		-

Foreign currency differences	4		-	54	16	74

Costs paid	(1)		-	(614)		-	(615)

Release to income		-		-		-	(100)	(100)

Additions	21	161	591	15	788

Balance as of Sept 30, 2019	153	1,946	1,130	336	3,565

Additions from business combination		-		-		-		-		-

Reclassifications		-		-		-		-		-

Foreign currency differences		(4)		-	(79)	(18)	(101)

Costs paid		-		-		-	(117)	(117)

Release to income		(9)		-		-		-	(9)

Additions		14	100		-	247	361

Balance as of Sept 30, 2020		154	2,046	1,051	448	3,699

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D ANNUAL ACCOUNTS

E ADDITIONAL INFORMATION

PROVISIONS

The development of current provisions is set out in the table below:

Changes of current provisions																	T _ 066

				Environmental
		Employee-related		protection				Legal and		Anniversary		Early				Other
IN € THOUSANDS	costs		measures		Other risks		litigation costs		benefits		retirement		Warranties		miscellaneous		Total

Balance as of Sept 30, 2018	13,574		-	1,727	94	17	1,020	14,030	4,458	34,920

Additions from business combination	90		-		-		-		-		-	1,106	1,926	3,122

Foreign currency differences	160	30	16	3	1		-	341	20	571

Reclassifications	-		-		-		-		-		-		-		-		-

Costs paid	(11,500)		-	(1,643)		-	(5)	(480)	(5,382)	(4,317)	(23,327)

Release to income	(2)		-		-		-		-		-	(34)	(12)	(48)

Additions	9,010	797	2,908		-	20	497	6,745	2,929	22,906

Balance as of Sept 30, 2019	11,332	827	3,008	97	33	1,037	16,806	5,004	38,144

Additions from business combination	-		-		-		-		-		-		-		-		-

Foreign currency differences	(1,199)	(44)	(208)	(30)	(1)		-	(1,442)	(202)	(3,126)

Reclassifications	-		-		-		-		-		-		-		-		-

Costs paid	(9,415)	(323)	(2,805)	(7)	(16)		-	(8,879)	(3,294)	(24,739)

Release to income	-		-		-		-		-		-		-		-		-

Additions	12,175		-	3,724		-	5	313	9,191	4,481	29,889

Balance as of Sept 30, 2020	12,893	460	3,719	60	21	1,350	15,676	5,989	40,168

The provision for employee-related expenses comprises employee bonuses and termination benefits.

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PROVISIONS

PENSION PLANS AND SIMILAR OBLIGATIONS

The provision for environmental protection measures relate to the 1985 vacated former Stabilus Inc. US site in Colmar, PE, USA at the North Penn Area 5. In the meantime, this North Penn Area 5 has been identified by the United States Environmental Protection Agency (EPA) as an area requiring

environmental remediation. In 2011, the EPA contacted seven companies

in the North Penn Area 5 as potential responsible parties for cost sharing, Stabilus being one of them. The Group is currently unable to develop a reasonable estimate of its share of the ultimate obligation as cost

apportionmentmethod of the EPA and Stabilus insurance reimbursement are unclear at this point in time. As such, no liability for an EPA reimbursement has been reflected in the balance sheet as of September 30, 2020. For the corresponding ongoing long-term bioremediation,

a current provision of €460 thousand (PY: €827 thousand) and a non-

current provision of €1,051 thousand (PY: €1,130 thousand) have been recorded as of September 30, 2020.

The provision for other risks from purchase and sales commitments

represents expected sales discounts, expected losses from pending deliveries of goods and other sales-related liabilities.

The provision for legal and litigation costs represents costs of legal advice and notary charges as well as the costs of litigation.

The provision for warranties represents the accrued liability for pending risks from warranties offered by the Group for their products. The Group issues various types of contractual warranties under which it generally guarantees the performance of products delivered and services rendered. The Group accrues for costs associated with product warranties at the date products are sold. This also comprises accruals that are calculated for individual cases. Insurance reimbursements related to individual cases are presented in other financial assets if the recognition criteria are met.

26Pension plans and similar obligations

Liabilities for the Group's pension benefit plans and other post-employment plans comprise the following:

Pension plans and similar obligations				T _ 067

		Sept 30,			Sept 30,
IN € THOUSANDS	2020		2019

Principal pension plan	56,854		59,595

Deferred compensation	175		298

Pension plans and similar obligations	57,029		59,893

Defined benefit plans and deferred compensation

Defined benefit plan

The Stabilus Group granted post-employment pension benefits to employees in Germany. The level of post-employment benefits is generally based on eligible compensation levels and / or ranking within the Group hierarchy and years of service.

In order to mitigate future liquidity risk, the Group's pension policies for one major plan granted to employees who joined the Group prior to January 1, 2006, were amended as of December 21, 2010, and the title earned in the former defined benefit plan was frozen. Going forward no additional defined benefit titles can be earned except for certain older employees. At the same time, the Group introduced a defined contribution plan in which direct payments to an external insurer are made.

Liabilities for principal pension plans amounting to €56,854 thousand (PY: €59,595 thousand) result from unfunded accumulated benefit obligations.

The weighted average duration of the defined benefit obligations in the fiscal year 2020 is 16.3 years (PY: 16.9 years).

Deferred compensation

The deferred compensation is a form of retirement pay which is financed by the employees, where, based on an agreement between the Group and the employees, part of their income is retained by the Group and paid to the respective employees after retirement.

The total deferred compensation as of September 30, 2020, amounts to €175 thousand (PY: €298 thousand).

The unfunded status is as follows:

Unfunded status			T _ 068

		Year ended Sept 30,

IN € THOUSANDS	2020		2019

Present value of defined
benefit obligations	58,220		61,015

Less: Fair value of plan assets	(1,191)		(1,122)

Unfunded status	57,029		59,893

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The present value of the net pension liability developed as follows:

Present value of the net pension liability obligations			T _ 069
		Year ended Sept 30,

IN € THOUSANDS	2020		2019

Present value of net pension liability
as of beginning of fiscal year	59,893		52,180

Contribution to plan assets	-		(1,122)

Service cost	322		347

Interest cost	551		1,005

Effect of change in financial assumptions	(2,267)		9,816

Experience assumptions	347		(605)

Actuarial (gains) / losses	(1,920)		9,211

Pension benefits paid	(1,816)		(1,728)

Present value of net pension liability
as of fiscal year-end	57,029		59,893

The pension cost in the consolidated statement of comprehensive income includes the following expenses for defined benefit plans:

Pension cost for defined benefit plans			T _ 070

	Year ended Sept 30,

IN € THOUSANDS	2020	2019

Service cost	322	347

Interest cost	551	1,005

Pension cost for defined benefit plans	873	1,352

C CONSOLIDATED FINANCIAL STATEMENTS

D ANNUAL ACCOUNTS

PENSION PLANS AND SIMILAR OBLIGATIONS

The present value of the defined benefit obligation and the experience adjustments arising on the plan liabilities are as follows:

Present value of the defined benefit obligation and
the experience adjustments on the plan liabilities		T _ 071

		Defined				Change in
		benefit		Experience		demographic
IN € THOUSANDS		obligation		adjustments		assumptions

Sept 30, 2016	58,738	(1,055)		-

Sept 30, 2017	53,236	234		-

Sept 30, 2018	52,180	(107)	533

Sept 30, 2019	59,893	(605)		-

Sept 30, 2020		57,029	347		-

Generally, the measurement date for the Group's pension obligations is September 30. The measurement date for the Group's net periodic pension cost generally is the beginning of the period. Assumed discount rates, pension increases and long-term return on plan assets vary according to the economic conditions in the country in which the pension plan is situated.

Following assumptions (measurement factors) were used to determine the pension obligations:

Significant factors for the calculation of
pension obligations	T _ 072

	Year ended Sept 30,
IN % P. A.	2020	2019
Discount rate	1.14%	0.93%
Pension increases	1.50%	1.50%
Turnover rate	4.00%	4.00%
	Heubeck Mortality	Heubeck Mortality
Biometric assumptions	Table 2018G	Table 2018G

E ADDITIONAL INFORMATION

The discount rates for the pension plans are determined annually as of September 30, 2020, on the basis of first-rate,fixed-interest industrial bonds with maturities and values matching those of the pension payments.

Sensitivity analysis

If the discount rate were to differ by + 0.5% / - 0.5% from the interest rate used at the balance sheet date, the defined benefit obligation for pension benefits would be an estimated €5,040 thousand lower or €4,380 thousand higher. If the future pension increase used were to differ by + 0.2% / - 0.2% from management's estimates, the defined

benefit obligation for pension benefits would be an estimated €840 thousand higher or €2,060 thousand lower. The reduction / increase of the mortality rates by 1-year results in an increase / decrease of life expectancy depending on the individual age of each beneficiary. The effects on the defined benefit obligation (the "DBO") as of September 30, 2020, due to a 1-year decrease / increase of the life expectancy would result in an increase of €1,980 thousand or a decrease of €3,240 thousand.

When calculating the sensitivity of the DBO to significant actuarial assumptions the same method (present value of the DBO calculated with the projected unit credit method) has been applied as when calculating the post-employment benefit obligation recognized in the consolidated

statement of financial position. Increases and decreases in the discount rate or the rate of pension progression which are used in determining the DBO do not have a symmetrical effect on the DBO due to the compound interest effect created when determining the net present value

of the future benefit . If more than one of the assumptions are changed simultaneously, the combined impact due to the changes would not necessarily be the same as the sum of the individual effects due to the changes. If the assumptions change at a different level, the effect on the DBO is not necessarily in a linear relation.

Expected pension benefit payments for the fiscal year 2021 will amount to €1,901 thousand (PY: €1,909 thousand).

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Defined contribution plans

The expenses incurred under defined contribution plans are primarily related to government-run pension plans. Expenses for these plans in the reporting period amounted to €11,420 thousand (PY: €13,711 thousand).

27Trade accounts payable

Trade accounts payable amount to €71,080 thousand (PY: €90,992 thousand) as of the end of the fiscal year. The full amount is due within one year. The liabilities are measured at amortized cost. For information on liquidity and exchange rate risks for trade accounts payable, please see Note 32.

28Current tax liabilities

C CONSOLIDATED FINANCIAL STATEMENTS

D ANNUAL ACCOUNTS

E ADDITIONAL INFORMATION

PENSION PLANS AND SIMILAR OBLIGATIONS

TRADE ACCOUNTS PAYABLE

CURRENT TAX LIABILITIES

OTHER LIABILITIES

CONTINGENT LIABILITIES AND OTHER FINANCIAL COMMITMENTS

29Other liabilities

The following table sets out the breakdown of the Group's other current and non-current liabilities:

Other liabilities									T _ 073
		Sept 30, 2020					Sept 30, 2019

IN € THOUSANDS	Current	Non-current	Total	Current	Non-current	Total

Advanced payments received	2,553	-	2,553		2,278		-	2,278

Vacation expenses	3,717	-	3,717		4,066		-	4,066

Other personnel-related expenses	6,545	-	6,545		6,611		-	6,611

Outstanding costs	3,869	-	3,869		2,908		-	2,908

Miscellaneous	204	-	204		380		-	380

Other liabilities	16,888	-	16,888		16,243		-	16,243

The current tax liabilities amounted to €9,658 thousand (PY: €13,088 thousand) and relate to income and trade taxes. The initial application of IFRIC 23 did not have any impact on the consolidated financial statements.

30Contingent liabilities and other financial commitments

Contingent liabilities

Contingent liabilities are possible obligations whose existence has yet to be confirmed by the occurrence or non-occurrence of uncertain future events that are not wholly within the control of the entity. If the outcome is probable and estimable, the liability is shown in the statement of financial position.

Further information regarding actual and contingent obligations imposed by the US EPA for the former Stabilus site in Colmar can be found in Note 25.

Guarantees

On October 11, 2005, Stabilus Romania S.R.L., Brasov, ("STRO") entered into a rental agreement with ICCO SRL (ICCO) for a production facility with an area of 8,400 square meters. The initial rental agreement had

a contract period of seven years which has been extended. STAB Dritte Holding GmbH, Koblenz, which has merged into Stable Beteiligungs GmbH, Koblenz, a wholly owned subsidiary of the Company, issued a bank guarantee of €600 thousand (PY: €600 thousand), for the event that STRO will be unable to pay. Stabilus GmbH, Koblenz, issued a letter of support for the event that STRO will be unable to pay.

On September 22, 2005, Stabilus S. A. de C. V. ("STMX") entered into a lease agreement with Deutsche Bank Mexico, S. A., and Kimex Industrial BEN, LLC, for a production facility with an area of 28,951 square meters of

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CONTINGENT LIABILITIES AND OTHER

FINANCIAL COMMITMENTS

land and 5,881 square meters of construction buildings in Ramos Arizpe, State of Coahuila, Mexico. The lease agreement had an initial contract period of ten years and has already been extended. Stabilus GmbH, Koblenz, issued a letter of support for the event that STMX will be unable to pay.

On June 7, 2016, the Group entered into a senior facilities agreement. Certain material subsidiaries of the Group are guarantors, as defined in the senior facilities agreement, and gave a credit guarantee in favor of the financing parties. The guarantees are subject to limitations, including being limited to the extent that otherwise the guarantee would amount to unlawful financial assistance and other jurisdiction-specific tests (e.g. net assets).

Given a normal course of the economic development as well as a normal course of business, management believes these guarantees should not result in a material adverse effect for the Group.

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Other financial commitments

From October 1, 2019, obligations from operating leases have been recognized in accordance with the requirements of IFRS 16 and further information can be found in Note 24.

The capital commitments for fixed and other intangible assets decreased from €4,750 thousand as of September 30, 2019, to €3,442 thousand as of September 30, 2020.

Nominal values of other financial commitments are as follows:

Financial commitments											T _ 074
						Sept 30, 2020

IN € THOUSANDS	Less than 1	year	1	to 5	years		More than 5	years		Total

Capital commitments for fixed and other intangible assets		3,442				-			-	3,442

Total		3,442				-			-	3,442

						Sept 30, 2019

IN € THOUSANDS	Less than 1	year	1	to 5	years		More than 5	years		Total

Capital commitments for fixed and other intangible assets		4,750				-			-	4,750

Total		4,750				-			-	4,750

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FINANCIAL INSTRUMENTS

31Financial instruments

The following table shows the carrying amounts and fair values of the Group's financial instruments within the meaning of IFRS 7 as well as by the measurement category. The fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Financial instruments									T _ 075
				Sept 30, 2020		Sept 30, 2019
		MEASUREMENT
			Carrying			Carrying
		CATEGORY
			amount	Fair value2)		amount		Fair value2)
IN € THOUSANDS	ACC. TO IFRS 9

Trade accounts receivables	AC		117,071		-	130,328		-

Cash	AC		162,431		-	139,020		-

Other financial assets	AC		2,736		-	2,900		-

Contingent consideration	FVtPL		4,538		4,538	1,843	1,843

Total financial assets			286,776		4,538	274,091	1,843

Financial liabilities	FLAC		322,384		330,216	311,585	330,918

Trade accounts payable	FLAC		71,080		-	90,992		-

Lease liabilities (PY: finance lease liabilities)1)	n/a		39,971		-	524		-

Total financial liabilities			433,435		330,216	403,101	330,918


Aggregated according to categories in IFRS 9:

Financial assets measured at amortized cost (AC)			282,238		-	272,248		-

Financial assets measured at fair value through profit or loss (FVtPL)			4,538		4,538	1,843	1,843

Financial liabilities measured at amortized cost (FLAC)			393,464		330,216	402,577	330,918

Since October 1, 2019, the Stabilus Group has adopted the new standard IFRS 16 (Leases) by using the modified retrospective transition method. In accordance with this method, prior year figures were not restated.
The simplification provision under IFRS 7.29a has been applied with respect to fair value disclosures. This does not apply to the contingent consideration.

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FINANCIAL INSTRUMENTS

RISK REPORTING

The following table provides an overview of the classification of financial instruments presented above in the fair value hierarchy, except for financial instruments with fair values corresponding to the carrying amounts (i.e. trade accounts receivable and payable, cash and other financial liabilities).

Financial instruments													T _ 076
			Sept 30, 2020						Sept 30, 2019

IN € THOUSANDS	Total	Level 11)		Level 22)		Level 33)		Total		Level 11)		Level 22)	Level 33)

Financial liabilities

Senior facilities	290,300	-	290,300		-		317,834	-	317,834		-

Other facilities	39,916	-	39,916		-		13,084	-	13,084		-

Contingent consideration	4,538	-	4,538		-		1,843	-	1,843		-

Fair value measurement based on quoted prices (unadjusted) in active markets for these or identical instruments.
Fair value measurement based on inputs that are observable on active markets either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Fair value measurement based on inputs that are not observable market data.

32Risk reporting

Internal risk management

The Group employs within the budgeting process an integrated system for the early identification and monitoring of risks specific to the Group, in order to identify changes in the business environment and deviations from targets at an early stage and to initiate countermeasures in advance. This includes monthly short- and medium-term analysis of the order intake and of the accounts receivable balance. Based on the results of this initial assessment further evaluations are frequently conducted for individual companies if deemed appropriate. Customer behavior is ascertained and analyzed continuously, and the information obtained from these serves as an early warning indicator for possible changes in demand patterns.

In addition, significant KPIs (order intake, sales and EBIT, staffing level, quality indicators) are reported monthly by all Group companies and are

It is the Group's policy to recognize transfers into and out of a level of the fair value hierarchy at the date of the event or change in circumstances that caused the transfer. There were no transfers between Level 2 and Level 3 of the fair value hierarchy in the current and the previous financial year.

The fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following methods and assumptions were used to estimate the fair values in the previous fiscal year:

The senior secured notes are categorized within Level 2 of the fair value hierarchy as the instruments themselves are not traded in an active market, but as all significant inputs required for their fair value measurement are observable in active markets. Their fair value is estimated using a present value technique, by discounting
the contractual cash flows using the implied yields for similar
instruments of entities with a similar standing and marketability.
The most significant input is the discount rate that reflects the

credit risk of the issuer. The Group obtains the valuation for its senior secured notes from an independent service provider on a

quarterly basis. The fair value of the contingent consideration does not underlie any variation, the recognized amount is fixed.

The carrying amounts of trade accounts receivables, cash, other financial assets and trade accounts payable closely approximate their fair value due to their predominantly short-term nature.

The net gains and losses on financial instruments result in the fiscal year ended September 30, 2020, from the currency translation and changes in the estimate of future cash flows of financial assets measured at amortized cost and financial liabilities measured at amortized cost, as well as gains from changes in fair value of derivative instruments. They are set out in Notes 8 and 9. The net foreign exchange gain amounted to €1,759 thousand (PY: gain €835 thousand).

Total interest income and expense from financial instruments are reported in Notes 8 and 9.

assessed by the Group´s management.

Financial risks

The Group's Corporate Treasury function provides services to the business, coordinates access to domestic and international financial markets, and monitors and manages the financial risks relating to the operations of the Group. These risks include credit risk, liquidity risk and market risk (including currency risk and fair value interest rate risk).

The Group seeks to minimize the effects of financial risks by using derivative financial instruments to hedge these exposures wherever considered economically reasonable. The use of financial derivatives is governed by the Group's policies approved by the Management Board, which provide principles on foreign currency risk, interest rate risk, credit risk, the use of financial derivatives and non-derivative financial instruments, and the

investment of excess liquidity.The Group does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes. The Group does not have any derivative financial instruments as of September 30, 2020.

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RISK REPORTING

Credit risks

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted a policy of dealing only with creditworthy counterparties and obtaining sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from defaults. As of the reporting date the Stabilus Group does not hold any collateral. The Group's exposure and the credit ratings of its counterparties are monitored, and the aggregate value of transactions concluded is spread amongst approved counterparties.

Trade accounts receivable consist of a large number of customers, spread across diverse industries and geographical areas. Credit evaluation is performed on the financial condition of accounts receivable and, where viewed appropriate, credit guarantee insurance cover is purchased. Besides this, commercial considerations are taken into account when

determiningthe maximum volume of the credit lines granted to each customer. The Group has established the policy to write-off all trade receivables when there is no reasonable expectation of recovery. Among others, the failure to make payments within 360 days from the invoice date or the initiation of bankruptcy proceedings are considered indicators of no reasonable expectation of recovery. In addition, the Group established an allowance for doubtful accounts based on historically observed default rates adjusted for forward-looking estimates to accrue for expected credit losses. To determine the forward-looking economic conditions, the Group considers in particular the credit default swaps (CDS) of the respective client's geographical location that ensures the risks of the counterparty in the respective country are taken into account.

In the course of the COVID-19 crisis there was no significant increase in defaulted trade account receivables and no additional allowance for doubtful accounts was recorded. In addition, the Group has taken out trade credit insurance to insure against the default risk.

The maximum exposure to credit risk is reflected by the carrying amounts of the following financial assets:

Credit risks included in financial assets										T _ 077

						Sept 30, 2020

		Neither past due
IN € THOUSANDS	nor impaired		< 30 days		30 - 60 days		60 - 90 days	90 - 360 days	> 360 days		Total

Financial assets

Trade and other
receivables	108,112	6,949	1,531	455	1,191	(1,167)	117,071

Other miscellaneous	7,274		-		-		-	-	-	7,274

Cash and cash equivalents	162,431		-		-		-	-	-	162,431

Total	277,817	6,949	1,531	455	1,191	(1,167)	286,776

						Sept 30, 2019

		Neither past due
IN € THOUSANDS	nor impaired		< 30 days		30 - 60 days		60 - 90 days	90 - 360 days	> 360 days		Total

Financial assets

Trade and other
receivables	117,632	9,250	1,308	790	1,566	(218)	130,328

Other miscellaneous	4,743		-		-		-	-	-	4,743

Cash and cash equivalents	139,020		-		-		-	-	-	139,020

Total	261,395	9,250	1,308	790	1,566	(218)	274,091

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RISK REPORTING

Credit risk resulting from other financial assets, which comprise cash and cash equivalents and miscellaneous financial assets, arises from a possible default of the counterparty, with a maximum exposure equal to the carrying amount of these instruments.

The Group does not have any critical credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. The credit risk on liquid funds is limited because the counterparties are banks with high credit ratings assigned by international credit rating

agencies and are also typically lenders to the Group. Therefore, the credit quality of financial assets which are neither past due nor impaired is considered to be high.

In fiscal year 2020, the Group had one customer which accounted for at least 11% of total external revenue and two customers which accounted for at least 8% of total external revenue. The revenue with these customers was €91,040 thousand (PY: €107,792 thousand), €76,129 thousand (PY: €87,551 thousand) and €56,523 thousand (PY: €74,294 thousand), respectively. In fiscal year 2020 and 2019. Such revenue was generated in all three operating segments.

Liquidity risks

The Management Board has established an appropriate liquidity risk

managementframework for the management of the Group's short-, medium- and long-term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities and by monitoring forecast cash flows at regular intervals.

The following maturities summary shows how cash flows from the Group's liabilities as of September 30, 2020, will influence its liquidity position. The summary describes the course of the undiscounted principal and interest outflows of the financing liabilities and the undiscounted cash outflows of the trade accounts payable. The undiscounted cash outflows are subject to the following conditions: If the counterparty can request payment at different dates, the liability is included on the basis of the earliest payment date. The underlying terms and conditions are described in Note 22 and 24.

The senior facilities agreement, as amended, gives planning stability over the next years. At the balance sheet date, the Group has committed facilities of €70.0 million (PY: €70.0 million), thereof €29.9 million were drawn. Furthermore, the Group has a new undrawn committed credit line of €50.0 million (PY: €- million) to strengthen financial liquidity as well as for potential future challenges from the COVID-19 crisis. In the financial year 2020, the COVID-19 crisis did not have any material adverse effects to the liquidity of the Stabilus Group.

Finance market risks

The Group's activities expose it primarily to the financial risks of changes in foreign currency exchange rates (see below) and interest rates (see below). As of September 30, 2020, the Group has not entered into any derivative financial instruments. The Group monitors closely its exposure to interest rate risk and foreign currency risk and regularly checks the opportunities of entering into a variety of derivative financial instruments.

Exchange rate risk

Due to its subsidiaries, the Group has significant assets and liabilities

Liquidity outflows for liabilities							T _ 078

IN € THOUSANDS	Senior facility		Other facilities		Lease liabilities		Trade accounts payable	Total

within one year	2,803	35,636	8,159	71,080	117,678

after one year but not
more than five years	299,477	8,979	23,739		-	332,195

more than five years	-		-	13,165		-	13,165

Total	302,280	44,615	45,063	71,080	463,038

outside the Eurozone especially in US dollar. These assets and liabilities are denominated in local currencies. When the net asset values are converted into euro, currency fluctuations result in period to period changes in those net asset values. The Group's equity position reflects these changes in net asset values. The Group does not hedge against these structural currency risks.

The Group also has transactional currency exposures which arise from

sales or purchases denominated in currencies other than the functional currency and loans denominated in foreign currencies. In order to mitigate

the impact of currency exchange rate fluctuations for the operating business, the Group continually assesses its exposure and attempts to balance revenue and costs in a currency to thus reduce the currency risk.

Besides the balance sheet, the Group's revenue and costs are also impacted by currency fluctuations.

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Stabilus main exposure to currency risk is $42 million as of the reporting date. A 1% increase / decrease in the value of the US dollar compared to the euro would lead to an increase / decrease of EBIT of approximately €0.4 million.

Hyperinflation

The Group has one entity which is located in Argentina where the inflation has been high for several years. After Argentina's cumulative inflation rate over a three-year period has exceeded 100% and as the qualitative indicators of hyperinflation are, to varying degrees, also present, we

consider Argentina to be a hyperinflationary economy. Accordingly, IAS 29 has to be applied which requires that the financial statements of subsidiaries reporting in the currencies of hyperinflationary economies are restated by applying a suitable general price index. This requirement

generally applies to our newly acquired subsidiary New CLEVERS S.R.L. as well. However, as the revenue generated by our Argentine operations account for less than 1% of total Group revenue, the standard has not been applied by the Stabilus Group on the grounds of materiality.

Based on our evaluation the application of IAS 29 will not have a material impact on Stabilus Group´s consolidated financial statements. We are continuously monitoring the development of our Argentine operations and might apply IAS 29 in subsequent periods if our operations in Argentina experience significant growth.

Interest rate risk

The Group is exposed to interest rate risks, which mainly relate to debt obligations, as the Group financing is primarily based on Euribor-related credit agreements.

The interest rate risk is assessed and managed by central financial risk management by analyzing the cash flow sensitivity of the Group's cash flows due to floating interest loans.

C CONSOLIDATED FINANCIAL STATEMENTS

D ANNUAL ACCOUNTS

RISK REPORTING

CAPITAL MANAGEMENT

NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS

Stabilus exposure to interest rate risk includes variable-rate liabilities with a notional amount of €295 million. A 1% increase of floating interest rates (Euribor) would lead to an increase of financial expense of approximately €3.0 million. As the Euribor is below 0% as of September 30, 2020, a decrease has no effect on finance costs.

33Capital management

The Stabilus Group's capital management objectives are to ensure the Group's ability to continue as a going concern and to maintain an optimal capital structure through a balanced mix of debt and equity considering the positive effects of the debt tax shield and the additional costs of financial distress that result from increased leverage. For the accomplishment of this objective the Group monitors various internal factors like the development of some financial ratios over time but also considers external factors like changes in the competitive environment or in the overall economic conditions.

The Stabilus Group is not subject to any externally imposed capital requirements.

Due to the broad product range and our well-balanced global presence, the Stabilus Group generates under normal economic conditions predictable and sustainable cash flows.

For monitoring our capital structure, we utilize, among others, the ratio of "equity" to "total capital" as well as the ratio of "net debt" to "adjusted EBITDA (earnings before interest, taxes, depreciation and amortization)". The latter one is also used as a covenant in the senior facilities agreement and its development is further explained in the management report. The Company does not expect a breach of this covenant.

E ADDITIONAL INFORMATION

The development of the equity ratio is set out in the table below:

Equity ratio				T _ 079
		Year ended Sept 30,

IN € THOUSANDS	2020		2019

Equity	469,598		499,617

Total assets	1,083,571		1,099,239

Equity ratio	43.3%		45.5%

In order to maintain or adjust the capital structure, we may increase or decrease the dividends, issue new shares or return capital to our shareholders, and raise additional or reduce parts of our outstanding debt.

34Notes to the consolidated statement of cash flows

The statement of cash flows is prepared in compliance with IAS 7. The statement of cash flows of the Stabilus Group shows the development of the cash flows from operating, investing and financing activities. Inflows and outflows from operating activities are presented in accordance with the indirect method and those from investing and financing activities by the direct method.

The cash funds reported in the statement of cash flows comprise all liquid funds, cash balances and cash at banks reported in the statement of financial position.

S TA B I L U S A N N U A L R E P O R T 2 0 2 0

A TO OUR SHAREHOLDERS

B COMBINED MANAGEMENT REPORT

C CONSOLIDATED FINANCIAL STATEMENTS

D ANNUAL ACCOUNTS

E ADDITIONAL INFORMATION

NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS

SEGMENT REPORTING

Interest payments of €4,814 thousand (PY: €3,643 thousand) are

reflected in cash outflows from financing activities. Income tax payments of €36,427 thousand (PY: €35,930 thousand) are recognized in cash flows from operating activities.

The table below shows the details of changes in the Group´s liabilities

arising from financing activities, including both cash and non-cash

changes . Liabilities arising from financing activities are those for which cash flows will be classified in the Group´s consolidated statement of cash flows as cash flows from financing activities.

35Segment reporting

The Stabilus Group is organized and managed primarily on a regional level. The three reportable operating segments of the Group are EMEA, Americas and APAC. The product portfolio is largely similar in these three regional segments.

The Group measures the performance of its operating segments through a measure of segment profit or loss (key performance indicator) which is

referred to as "adjusted EBIT". Adjusted EBIT represents EBIT, adjusted for exceptional non-recurring items (e.g. restructuring or one-time advisory costs) and depreciation / amortization of fair value adjustments resulting from purchase price allocations (PPAs).

Segment information for the fiscal years ended September 30, 2020 and

2019 is as follows:

Reconciliation financing activities				T _ 080

		Senior
		facility		Other		Lease
IN € THOUSANDS	agreement		facilities		liabilities

Balance as of Sept 30, 2019	298,501	10,504	524

Cash receipts	-	30,083		-

Cash payments	(20,000)	(1,739)	(8,245)

Changes from financing
cash flows	(20,000)	28,344	(8,245)

Effect of changes in
foreign exchange rates	-	(353)	(559)

Initial application IFRS 16	-		-	43,724

Other changes	4,223	84	4,527

Balance as of Sept 30, 2020	282,724	38,579	39,971

S TA B I L U S A N N U A L R E P O R T 2 0 2 0

Segment reporting													T _ 081

		EMEA		Americas			APAC

		Year ended Sept 30,	Year ended Sept 30,			Year ended Sept 30,

IN € THOUSANDS	2020		2019		2020			2019		2020			2019

External revenue1)	411,123		482,099		299,555			365,988		111,448			103,252

Intersegment revenue1)	25,855		28,598		20,644			24,692		157			114

Total revenue1)	436,978		510,697		320,199			390,680		111,605			103,366

Depreciation and amortization
(incl. impairment losses)	(64,390)		(31,066)		(16,249)			(13,519)		(8,208)			(5,768)

EBIT	12,346		63,951		36,945			56,945		13,821			12,398

Adjusted EBIT	42,367		68,439		40,336			61,752		13,976			12,553

		Total segments		Other / Consolidation		Stabilus Group

		Year ended Sept 30,	Year ended Sept 30,			Year ended Sept 30,

IN € THOUSANDS	2020		2019		2020			2019		2020			2019

External revenue1)	822,126		951,339		-		-		822,126			951,339

Intersegment revenue1)	46,656		53,404		(46,656)			(53,404)		-	-

Total revenue1)	868,782		1,004,743		(46,656)			(53,404)		822,126			951,339

Depreciation and amortization
(incl. impairment losses)	(88,847)		(50,353)		(6,969)			(9,280)		(95,816)			(59,633)

EBIT	63,112		133,295		(6,969)			(9,280)		56,143			124,015

Adjusted EBIT	96,679		142,745		-		-		96,679			142,745

Revenue breakdown by location of Stabilus company (i.e. "billed-from view").

A TO OUR SHAREHOLDERS

B COMBINED MANAGEMENT REPORT

C CONSOLIDATED FINANCIAL STATEMENTS

D ANNUAL ACCOUNTS

E ADDITIONAL INFORMATION

SEGMENT REPORTING

The column "Other / Consolidation" includes among others the effects from the purchase price allocation for the April 2010 business combination. The effects from the purchase price allocation for the June 2016 and April 2019 business combination are included in the regions.

The EBIT of operating segment EMEA in the fiscal year ended September 30, 2020, includes impairment losses of €(28,068) thousand (PY: €(398) thousand). The amounts presented in the column "Other / Consolidation" above include the elimination of transactions between the segments and certain other corporate items which are related to the Stabilus Group as a whole and are not allocated to the segments, e.g. depreciation from purchase price allocations.

The following table sets out the reconciliation of the total segments' profit (adjusted EBIT) to profit before income tax:

Reconciliation of the total segments' profit to
profit / (loss) before income tax			T _ 082

		Year ended Sept 30,

IN € THOUSANDS	2020	2019

Total segments' profit (adjusted EBIT)	96,679	142,745

Other / consolidation		-	-

Group adjusted EBIT	96,679	142,745

Adjustments to EBIT	(40,536)	(18,730)

Profit from operating activities (EBIT)	56,143	124,015

Finance income	2,258	1,254

Finance costs	(11,013)	(10,417)

Profit / (loss) before income tax	47,388	114,852

The information about geographical areas is set out in the following tables:

Geographical information: Revenue by country		T _ 083

	Year ended Sept 30,

IN € THOUSANDS	2020	2019

Germany	301,626	356,156

Romania	100,204	119,949

UK	3,836	4,629

Turkey	4,943	1,365

Netherlands	514		-

EMEA	411,123	482,099

Mexico	146,282	188,305

USA	147,582	169,040

Brazil	4,698	8,315

Argentina	993	328

Americas	299,555	365,988

China	88,945	80,241

South Korea	11,526	10,731

Australia	2,351	2,817

Japan	7,049	7,538

New Zealand	1,577	1,925

APAC	111,448	103,252

Revenue	822,126	951,339

Geographical information: Non-current assets by
country					T _ 084
		Year ended Sept 30,

IN € THOUSANDS	2020			2019

Germany	229,432			270,383

Romania	34,687			28,815

Spain	738			790

Luxembourg	805			413

UK	5,415			5,468

Switzerland		-	0

France	131			4

Turkey	2,552			2,225

Netherlands	0			-

Goodwill	124,094			126,557

EMEA	397,854			434,655

USA	77,076			85,810

Mexico	34,032			34,432

Brazil	1,445			1,761

Argentina	775			1,119

Goodwill	70,945			74,388

Americas	184,273			194,630

China	60,958			35,822

South Korea	7,875			7,689

Australia	1,227			856

Japan	1,622			1,385

New Zealand	428			270

Singapore	143			-

Goodwill	12,622			13,876

APAC	84,875			62,778

Total	667,002			692,063

The non-current assets above exclude financial instruments, deferred tax assets, post-employment benefit assets and rights arising under insurance contracts.

S TA B I L U S A N N U A L R E P O R T 2 0 2 0

A TO OUR SHAREHOLDERS

B COMBINED MANAGEMENT REPORT

C CONSOLIDATED FINANCIAL STATEMENTS

D ANNUAL ACCOUNTS

E ADDITIONAL INFORMATION

SHARE-BASED PAYMENTS

36Share-based payments

The Group established share-based payment arrangements for members of the Management Board (matching stock program) and for senior management employees (phantom stock program).

Matching stock program

The variable compensation for the members of the Management Board

includes a matching stock program. The matching stock program (the "MSP") provides for four annual tranches granted each year during the financial year ending September 30, 2014 until September 30, 2017. The program "MSP A" was extended by one year to September 30, 2018. Due to the unpredictable and extraordinary impact of COVID-19 on the share price development of Stabilus, which was beyond the management's

influence, the Supervisory Board decided to extend the two-year exercise period for the tranches 2016 to 2018 by two years for the current Management Board members. By this measure the incentive effect of the MSP tranches will be maintained. However, the performance targets

including number of options and exercise prices remain unchanged. Participation in the matching stock program requires Management Board members to invest in shares of the Company. The investment has generally to be held for the lock-up period.

As part of the matching stock program A (the "MSP A") for each share the Management Board invests in the Company in the specific year

(subject to general cap), the Management Board members receive a certain number of fictitious options to acquire shares in the Company for each tranche of the matching stock program. The amount of stock

options received depends upon a factor to be set by the Supervisory Board (Remuneration Committee) annually in a range between 1.0 and 1.7 times

for a certain tranche. Thus, if a Management Board member were to buy 1,000 shares under the MSP A in the Company, he would receive 1,000 to 1,700 fictitious options for a certain tranche. The fictitious options are subject to a lock-up period of four years and may be exercised during a subsequent two-year exercise period.

The fictitious options are subject to a lock-up period of four years and may be exercised during a subsequent two-year exercise period. The

options may only be exercised if the stock price of the Company exceeds a set threshold for the relevant tranche, which the Supervisory Board will determine at the time of granting the options, and which needs to be between 10% and 50% growth over the base price, which is the share price on the grant date. If exercised, the fictitious options are transformed into a gross amount equaling the difference between the option price and the relevant stock price multiplied by the number of exercised options. The Company plans a cash settlement. The maximum gross amounts resulting from the exercise of the fictitious options of one tranche in general is limited in amount to 50% of the base price. Reinvestment of IPO proceeds from previous equity programs is not taken into account for MSP A.

Phantom stock program

The Group initiated for 2015 and 2016 a Phantom Stock Program for ten senior management employees excluding Stabilus S. A. directors. To participate in the program, the employees have to invest a certain amount in Stabilus shares. The employee receives options in a ratio of two for each self-investment, capped at an investment level of €10,000 per program year. The fictitious options are subject to a lock-up period of four years and may be exercised during a subsequent two-year exercise period. The

exercise is triggered by the sale of the underlying shares. The payout price is triggered by the price of the share sales in the exercise period. The payout is capped at 500% of the invested amount. In fiscal year 2020 an amount of €469 thousand was paid for the Phantom Stock Program 2015.

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B COMBINED MANAGEMENT REPORT

Measurement of fair values

C CONSOLIDATED FINANCIAL STATEMENTS	D ANNUAL ACCOUNTS	E ADDITIONAL INFORMATION
		SHARE-BASED PAYMENTS

Input parameters for fair value measurement of MSP

T_085

The fair value of the share-based payments of the MSP has been measured by using a binomial simulation.

The inputs used in the measurement of the fair values at the grant date and the measurement date of the MSP include market conditions and were as follows. The expected volatility has been based on the historical volatility of the 3-year period ending September 30, 2020.

VALUATION DATE

MSP A/B (2016)

Fair value

Share price

Expected annual volatility

Expected annual dividend yield

Expected remaining duration (timing of exercise)

Risk-free annual interest rate

Exercise price

MSP A (2017)

Fair value

Share price

Expected annual volatility

Expected annual dividend yield

Expected remaining duration (timing of exercise) Risk-free annual interest rate

Exercise price

MSP A (2018)

Fair value

Share price

Expected annual volatility

Expected annual dividend yield

Expected remaining duration (timing of exercise) Risk-free annual interest rate

Exercise price

Sept 30, 2020
€9.11
€50.15
47.0%
2.00%
-
(0.67)%
€48.64
€7.01
€50.15
47.0%
2.00%
1.0 year
(0.67)%
€74.74
€7.03
€50.15
45.0%
2.00%
2.0 years
(0.73)%
€74.22

Sept 30, 2019

€6.99

€44.90

43.0%

2.00%

1.0 year

(0.73)%

€48.64

€3.14

€44.90

35.0%

2.00%

2.0 years

(0.80)%

€74.74

€3.25

€44.90

33.0%

2.00%

3.0 years

(0.82)%

€74.22

Sept 30, 2018

€14.99

€71.70

27.0%

1.00%

2.0 years

(0.54)%

€48.64

€10.03

€71.10

30.0%

1.00%

3.0 years

(0.40)%

€74.74

S TA B I L U S A N N U A L R E P O R T 2 0 2 0

A TO OUR SHAREHOLDERS

B COMBINED MANAGEMENT REPORT

C CONSOLIDATED FINANCIAL STATEMENTS

D ANNUAL ACCOUNTS

E ADDITIONAL INFORMATION

SHARE-BASED PAYMENTS

Performance Share Plan

The Management Board members of Stabilus S. A. and for individual senior management employees, received allocations under the Performance Share Plan (the "PSP") in the form of virtual shares. The virtual shares of the

PerformanceShare Plan are based on an annual target amount granted at the beginning of a three-year performance period as a future entitlement. In order to determine the target number of virtual shares granted, the

the Company's share closing price during the last 60 trading days prior to the respective performance period end date. The payout amount is limited to a maximum of 250% of the target amount (payout cap). The Performance Share Plan is paid out in cash at the end of the performance period.

In the fiscal year 2020 options for the PSP were issued as follows:

annual target amount is divided by the start share price, whereby the start share price refers to the arithmetic mean of the Company's share closing price during the last 60 trading days prior to the respective performance period start date.

The performance factor which determines the final number of virtual shares is calculated at the end of the three-year performance period via the relative total shareholder return (weighted with 70%) and the EBIT margin (weighted with 30%).

The target achievement for the relative TSR is based on a comparison with the constituents of the MDAX index. In order to determine the relative TSR, firstly, the absolute TSR values of Stabilus as well as each index constituent of the MDAX over the respective performance period are calculated. The absolute TSR value of each company equals the theoretical growth in value of a share holding over the performance period, assuming that (gross) dividends are directly re-invested. Secondly, the calculated absolute TSR values of Stabilus and each index constituent are ranked by size in order to calculate the target achievement.

The target achievement for EBIT margin is based on a comparison with a strategic target. To determine the percentage of target achievement, the actual EBIT margin at the end of the respective performance period is compared with the strategic EBIT margin defined for the respective performance period.

S TA B I L U S A N N U A L R E P O R T 2 0 2 0

Number of share options																T_086

		MSP A/B (2015)		MSP A/B (2016)		MSP A (2017)		MSP A (2018)

		Number of		Exercise		Number of		Exercise		Number of		Exercise		Number of		Exercise
		options		price		options		price		options		price		options		price

Outstanding as at October 1, 2017	35,119		€31.08	27,449		€48.64		-		-		-		-

Granted during the year		-		-		-		-	24,190		€74.74		-		-

Forfeited during the year	4,884		-	7,320		-	16,952		-		-		-

Exercised during the year		-		-		-		-		-		-		-		-

Outstanding as at September 30, 2018	30,235		€31.08	20,129		€48.64	7,238		€74.74		-		-

Exercisable as at September 30, 2018		-		-		-		-		-		-		-		-

Outstanding as at October 1, 2018	30,235		€31.08	20,129		€48.64	7,238		€74.74		-		-

Granted during the year		-		-		-		-		-		-	10,423		€74.22

Forfeited during the year	9,652		-		-		-		-		-		-		-

Exercised during the year		-		-		-		-		-		-		-		-

Outstanding as at September 30, 2019	20,583		€31.08	20,129		€48.64	7,238		€74.74	10,423		€74.22

Exercisable as at September 30, 2019	20,583		€31.08		-		-		-		-		-		-

Outstanding as at October 1, 2019	20,583		€31.08	20,129		€48.64	7,238		€74.74	10,423		€74.22

Granted during the year		-		-		-		-		-		-		-		-

Forfeited during the year		-		-	4,112		-		-		-		-		-

Exercised during the year		20,583		€31.08		-		-		-		-		-		-

Outstanding as at September 30, 2020		-		-	16,017		€48.64	7,238		€74.74	10,423		€74.22

Exercisable as at September 30, 2020		-		-	16,017		€48.64		-		-		-		-

A TO OUR SHAREHOLDERS

B COMBINED MANAGEMENT REPORT

C CONSOLIDATED FINANCIAL STATEMENTS

D ANNUAL ACCOUNTS

E ADDITIONAL INFORMATION

SHARE-BASED PAYMENTS

The Phantom Stock Program is measured by using a binomial simulation and accrued over the vesting time.

Input parameters for fair value measurement of PSP										T_087


VALUATION DATE			Sept 30, 2020			Sept 30, 2019	Sept 30, 2018

Phantom Stock Program 2015/16

Fair value				€50.15			€44.90	€70.63

Share price				€50.15			€44.90	€71.10

Expected annual dividend yield				-			-	1.00%

Exercise price				-			-	-

Phantom Stock Program options													T_088
			Phantom Stock	Phantom Stock
			Program 2014/15	Program 2015/16

		Number of options	Exercise price	Number of options	Exercise price

Outstanding as at October 1, 2017	5,642			-	3,217			-

Granted during the year			-				-				-	-

Forfeited during the year	1,209			-	644			-

Exercised during the year			-				-				-	-

Outstanding as at September 30, 2018	4,433			-	2,573			-

Exercisable as at September 30, 2018	4,433			-				-	-

Outstanding as at October 1, 2018	4,433			-	2,573			-

Granted during the year			-				-				-	-

Forfeited during the year			-				-				-	-

Exercised during the year			-				-				-	-

Outstanding as at September 30, 2019	4,433			-	2,573			-

Exercisable as at September 30, 2019	4,433			-	2,573			-

Outstanding as at October 1, 2019	4,433			-	2,573			-

Granted during the year			-				-				-	-

Forfeited during the year			-				-				-	-

Exercised during the year		4,433			-				-	-

Outstanding as at September 30, 2020			-				-	2,573			-

Exercisable as at September 30, 2020			-				-	2,573			-

S TA B I L U S A N N U A L R E P O R T 2 0 2 0

A TO OUR SHAREHOLDERSB COMBINED MANAGEMENT REPORTC CONSOLIDATED FINANCIAL STATEMENTSD ANNUAL ACCOUNTS

SHARE-BASED PAYMENTS

AUDITOR'S FEES

Performance Share Plan											T_089

VALUATION DATE	Sept 30, 2019				Sept 30, 2020		Sept 30, 2020

Performance period	Oct 1, 2018 - Sept 30, 2021		Oct 1, 2018 - Sept 30, 2021		Oct 1, 2019 - Sept 30, 2022

Price of the Stabilus share			€44.90				€50.15		€50.15

"Initial Price" Stabilus share			€73.74				€73.74		€41.77

Expected annual dividend yield	2.00%			2.00%			2.00%

Remaining duration of granted performance shares			2.0 years				1.0 year		2.0 years

Risk-free annual interest rate (duration 2.0 years)	(0.80)%			(0.67)%			(0.73)%

Expected target achievement for internal target EBIT	100%			100%			100%

Cap per performance share used in the valuation		250% x €73.74				250% x €73.74		250% x €41.77

Number of share options											T_090

				PSP (2019)						PSP (2020)

		Number of options		Fair value		Number of options		Fair value

Outstanding as at October 1, 2018	-		-				-		-

Granted during the year	8,056				€30.65				-		-

Forfeited during the year	-		-				-		-

Exercised during the year	-		-				-		-

Outstanding as at September 30, 2019	8,056				€30.65				-		-

Exercisable as at September 30, 2019	-		-				-		-

Outstanding as at October 1, 2019	8,056				€30.65				-		-

Granted during the year		-		-	28,010		€47.30

Forfeited during the year		1,526				-	4,848		-

Exercised during the year		-		-				-		-

Outstanding as at September 30, 2020		6,530				€36.66	23,162		€47.30

Exercisable as at September 30, 2020		-		-				-		-

E ADDITIONAL INFORMATION

Expense recognized in profit or loss

An amount of €557 thousand (PY: gain €(108) thousand) was recognized in the related employee benefit expenses and an amount of €845 thousand (PY: €1,268 thousand) in provisions for employee-related expenses.

37Auditor's fees

For all financial statements since fiscal year 2014 (year of Initial Public Offering in SDAX of the Frankfurt Stock Exchange) KPMG has been Stabilus' auditor. The Independent Auditor's Report on the consolidated financial statements for fiscal year 2020 was signed by Thomas Feld. He is the responsible audit partner and signed the Independent Auditor's Report for the first time for the year ended September 30, 2017.

For fiscal year ended September 30, 2020, a global fee (excluding VAT) of €895 thousand (PY: €902 thousand) was agreed with the Group auditors for the audit of the consolidated and annual financial statements of the Stabilus entities. These fees are included in the Group's administrative expenses.

Auditor's fees				T _ 091
		Year ended Sept 30,

IN € THOUSANDS (EXCLUDING VAT)	2020		2019

Audit fees	895		902

Thereof for the prior year	36		30

Audit-related fees	7		127

Tax fees	40		60

Other fees	-			-

Total	942		1,089

In addition, KPMG Luxembourg, and other member firms of the KPMG network, billed audit-related fees amounting to €7 thousand (PY: €127 thousand) and tax service fees amounting to €40 thousand (PY: €60 thousand) to the Stabilus Group. Tax services comprise the preparation of tax filings and the provision of tax advice.

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B COMBINED MANAGEMENT REPORT

C CONSOLIDATED FINANCIAL STATEMENTS

D ANNUAL ACCOUNTS

E ADDITIONAL INFORMATION

RELATED PARTY RELATIONSHIPS

REMUNERATION OF KEY MANAGEMENT PERSONNEL

SUBSEQUENT EVENTS

38Related party relationships

According to IAS 24 the reporting entity has to disclose specific information of transactions between the Group and other related parties. Balances and transactions between the Company and its fully consolidated subsidiaries, which constitute related parties within the meaning of IAS 24, have been eliminated in the course of consolidation and are therefore not commented on in this note. As to our knowledge no individual shareholder of Stabilus S. A. can exercise significant influence over the Company or the Group. The consolidated financial statements do not include any associated companies that are accounted for using the equity method and none of the Group entities can exercise significant influence over entities that are not included in the scope of consolidation.

Related parties of the Stabilus Group primarily comprise the Stabilus Group's management which also holds an investment in the Company. The remuneration of and other transactions with key managers of the Company constitute related party transactions pursuant to IAS 24. For related party transactions with members of the Executive Board and the Supervisory Board, please refer to the Notes "Share-based payment" and "Remuneration of key management personnel".

39Remuneration of key management personnel

The key management personnel are the members of the Management Board Dr. Michael Büchsner (CEO), Mark Wilhelms (CFO), Andreas Schröder (Group Financial Reporting Director), Andreas Sievers (Director Group Accounting and Strategic Finance Projects) and Markus Schädlich (Head of Asia / Pacific until June 30, 2020).

From fiscal year 2019 on, Stabilus is obliged by the European directive and Luxembourg law to draw up a remuneration policy for the Supervisory Board

as well as the Management Board. The principles and measurement of the remuneration policy for the Management Board and Supervisory Board of the Stabilus S. A. are prepared in accordance with Article 7bis of the Luxembourg law of May 24, 2011 on Shareholders Rights, as amended. The remuneration report will be published separately from this Annual Report.

The total remuneration paid to key management personnel of the Group is calculated as the amount of remuneration paid in cash, benefits in kind and expenses for share-based payments. Benefits in kind primarily comprise the provision of company cars and pensions.

The total remuneration of the above-mentioned key management personnel at the various key Stabilus Group affiliates during the reporting period are as follows:

Remuneration	T _ 092

	Year ended Sept 30,
IN € THOUSANDS	2020	2019
Base salary	1,395	1,442
Fringe benefits	67	57
Pension expenses	321	200
Termination benefits1)	150	-
Short-term incentive	363	483
Long-term incentive2)	544	(25)
Total	2,840	2,157

Post contractual non-compete obligation
Expenses for share-based payments

Total remuneration increased from €2,157 thousand in fiscal year 2019 to €2,840 thousand in fiscal year 2020. The overall increase is amongst others reflecting the onboarding of the new CEO who joined Stabilus on October 1, 2019, replacing the interim CEO, who did not have a full

compensationpackage. Another factor is the contractual non-compete compensation for a board member who left the company during fiscal year 2020. Additionally, the accruals for all outstanding share-based payment arrangements increased, following the rebound of the share price in fiscal year 2020. In contrast the share price decreased in fiscal year 2019.

The total remuneration for the members of the Supervisory Board amounts to €406 thousand (PY: €439 thousand).

Members of the Management and Supervisory Board have a direct interest in Stabilus S. A. of about jointly 0.3% of the total shares.

40Subsequent events

Luxembourg, December 10, 2020

Stabilus S. A.

Management Board

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RESPONSIBILITY STATEMENT

RESPONSIBILITY

STATEMENT

We, Dr. Michael Büchsner (Chief Executive Officer), Mark Wilhelms (Chief Financial Officer), Andreas Schröder (Director Group Financial Reporting) and Andreas Sievers (Director Group Accounting and Strategic Finance Projects), confirm, to the best of our knowledge, that the consolidated financial statements which have been prepared in accordance with the International Financial Reporting Standards as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit or loss of Stabilus S. A. and the undertakings included in the consolidation taken as a whole and that the combined management report includes a fair review of the development and performance of the business and the position of Stabilus S. A. and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

Luxembourg, December 10, 2020

Dr. Michael Büchsner

Mark Wilhelms

Andreas Schröder

Andreas Sievers

Management Board

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MANAGEMENT BOARD OF STABILUS S. A.

The Management Board comprises four members:

Dr. Michael Büchsner (Chairman) is the Chief Executive Officer. Over the past 20 years, he held a number of senior positions at components supplier TRW in Austria, Germany and the USA, and, following its takeover of TRW, at ZF Friedrichshafen AG. Most recently, he was global head of the Passive Safety Systems division. The main focus of his activities were strategy, finances, investments, and customer relations. Dr. Michael Büchsner holds a degree in chemical engineering from the Technical University of Graz, at which he later completed a doctorate, and an Executive MBA awarded by the St. Gallen Institute.

Mark Wilhelms is the Chief Financial Officer and was appointed to the Management Board in 2014. With 25 years of experience in the automotive industry, Mr. Wilhelms joined Stabilus in 2009 from FTE Automotive, where he served as Chief Financial Officer for six years. From 2007, he was also head of the NAFTA region at FTE. Prior to that, he held various management positions in finance, plant and marketing at various locations over his 17-year career at Ford. He holds a degree in process engineering as well as a degree in economics. Since August 29, 2018, he has been member of the Supervisory Board of NORMA Group SE. Mr. Wilhelms also holds further management positions within the Stabilus Group.

Andreas Schröder is the Group Financial Reporting Director and was

appointed to the Management Board in 2014. Mr. Schröder joined Stabilus in 2010. Prior to that, he worked for several years in assurance and advisory business services at Ernst & Young. He holds a degree in business

administration. Mr. Schröder also holds further management positions within the Stabilus Group.

Andreas Sievers is the Director Group Accounting and Strategic Finance Projects of the Stabilus Group. Mr. Sievers joined Stabilus in 2016. From 2010 to 2015 he worked for the Schaeffler Group as Vice

President Accounting Excellence and External Reporting and Vice President Accounting Projects. Prior to that he served as a German and U.S. Certified Public Accountant including positions at PricewaterhouseCoopers AG and Deloitte GmbH. He holds a degree in business administration and passed exams as a U.S. and German Certified Public Accountant in 2002 and 2004, respectively. Mr. Sievers also holds further management positions within the Stabilus Group.

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SUPERVISORY BOARD OF STABILUS S. A.

The Supervisory Board comprises four members:

Dr. Stephan Kessel has served as member of the Supervisory Board since 2014 and as the Chairman of the Supervisory Board since 2018. From August 2018 to July 2019, he led Stabilus as Interim CEO and then returned to the position as Chairman of the Supervisory Board. For many years, he was a member of the managing board at Continental AG, and the company's CEO until 2002. Since then Dr. Kessel has taken up a number of board positions at European companies including Stabilus. From 2008 through 2010, Dr. Kessel was Chairman of the Board of the former holding company of the operating Stabilus Group and acted as Stabilus' CEO for a certain period. In addition to his position at Stabilus, he currently serves as Chairman of the Advisory Boards of Novem Beteiligungs GmbH and Dayco Products L.L.C.

Dr. Joachim Rauhut has served as a member of the Supervisory Board since May 12, 2015. He was a member of the Executive Board of Wacker Chemie AG until October 31, 2015. He joined the Management Board of Wacker Chemie GmbH in 2001 and supported Wacker Chemie's initial public offering in 2006. Previously, he served in various leading corporate positions, including posts at Mannesmann AG and Krauss-Maffei AG. He is a member of the Supervisory Board of MTU Aero Engines AG, B. Braun Melsungen AG and creditshelf AG, as well as member of the Advisory Counsel of J. Heinrich Kramer Holding GmbH.

Dr. Ralf-MichaelFuchs has served as a member of the Supervisory Board since 2015. He was member of the Dürr Senior Executive Board and Chief Executive of Division Measuring and Process Systems until 2017.

He served as Chairman of the board of various Dürr companies and as Chairman of the management board of Carl SCHENCK AG. Before he joined Dürr AG in 2000, he held various leading positions at IWKA AG and AGIV AG. From 2004 until 2018 he was member of the Board of Directors of Nagahama Seisakusho Ltd., Japan.

Dr. Dirk Linzmeier has served as a member of the Supervisory Board

since 2018. He is CEO of the Osram Continental GmbH. From 2006 to 2017 he held several leading positions in the development of driver assistance systems and automotive electronics at Robert Bosch GmbH. From 2014 to 2017 he served as Vice President and Managing Director of an Automotive Electronics business unit and as Vice President of Corporate Start-up Management. Prior to that, he worked as a development engineer in Advanced Development at DaimlerChrysler AG.

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INDEPENDENT AUDITOR'S REPORT

To the Shareholders of Stabilus S. A.

2, rue Albert Borschette, L-1246 Luxembourg

Report of the réviseur d'entreprises agréé

Report on the audit of the consolidated financial statements

Opinion
We have	audited the consolidated financial statements of Stabilus
S. A. and its subsidiaries (the "Group"), which comprise the consolidated
statement	of financial position as at 30 September 2020, and the
consolidated	statement of comprehensive income, consolidated statement

of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements give a true and fair view of the consolidated financial position of the Group as at 30 September 2020, and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union.

Basis for opinion

We conducted our audit in accordance with the EU Regulation N° 537/2014, the Law of 23 July 2016 on the audit profession ("Law of 23 July 2016") and with International Standards on Auditing ("ISAs")

as adopted for Luxembourg by the "Commission de Surveillance du Secteur Financier" ("CSSF"). Our responsibilities under the EU Regulation N° 537/2014, the Law of 23 July 2016 and ISAs are further described in the «Responsibilities of "Réviseur d'Entreprises agréé" for the audit of the consolidated financial statements» section of our report. We are also independent of the Group in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants ("IESBA Code") as adopted for Luxembourg by the CSSF together with the ethical requirements that are relevant to our audit of the consolidated financial statements, and have fulfilled our other ethical responsibilities under those ethical requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of the audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Goodwill

Why the matter was considered to be one of most significance in our audit of the consolidated financial statements of the current period?

As at 30 September 2020, the Group's goodwill represents EUR 207,7 million or 19,2% of the Group's total assets. The Group conducted an impairment assessment of the goodwill on all its cash-generating units ("CGUs") to identify if the recoverable amount is less than the carrying amount.

The Group determined the recoverable amount of CGUs using the "fair value less cost of disposal" model based on discounted cash flow approach considering a business plan with five-year projections and a terminal value.

Due to the inherent uncertainty of forecasting, derivation of the discount rate and respective assumptions, e.g. beta factor or market risk premium, the fair value derivation underlies a significant area of judgment and is typically focused by capital market participants.

For CGUs where the difference between fair value less cost of disposal and the carrying amount is relatively small, the risk of a goodwill impairment is generally higher. The risk of a goodwill impairment depends on the CGUs' fair value which is most sensitive to estimates of future cash flows and other key assumptions. Therefore, a risk exists that information disclosed in connection with the goodwill impairment test (e.g. pre-tax WACC, sensitivity calculations) would not be appropriate.

b) How the matter was addressed in our audit

Our procedures included the assessment of the Group's Goodwill

impairment -testing process, key controls and the assumptions and financial and capital market data used.

We tested key assumptions forming the Group's fair value less cost of disposal calculations, the cash flow projections and discount rates. We reconciled the managements' future cash flow forecasts to the financial budget approved by the Supervisory Board.

We evaluated the reasonableness of cash flow projections and compared key inputs, such as the discount rates and growth rates, to externally available financial, economic and industry data, and the Group's performance history and accuracy of the forecasting figures retrospectively.

With the assistance of our own valuation specialists, we critically assessed the underlying assumptions and methodologies used to determine the fair values less cost of disposal for those CGUs where significant goodwill was found to be sensitive to changes in those assumptions.

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INDEPENDENT AUDITOR'S REPORT

Additionally, we also reconciled the aggregate fair value less cost of

disposal of the CGUs determined by the Group to its market capitalization. We considered whether the Group's disclosures of the application of judgment in estimating key assumptions and the sensitivity of the results of those estimates adequately reflect the risk associated with goodwill impairment.

Other information

The Management Board is responsible for the other information. The other information comprises the information stated in the consolidated report including the consolidated management report and the Corporate

GovernanceStatement but does not include the consolidated financial statements and our report of "Réviseur d'Entreprises agréé" thereon.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so,

consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report this fact. We have nothing to report in this regard.

Responsibilities of the Management Board and Those Charged with Governance for the consolidated financial statements The Management Board is responsible for the preparation and fair

presentationof the consolidated financial statements in accordance

with IFRSs as adopted by the European Union, and for such internal control as the Management Board determines is necessary to enable

the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, the Management Board is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Management Board either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Group's financial reporting process.

Responsibilities of the Réviseur d'Entreprises agréé for the audit of the consolidated financial statements

The objectives of our audit are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a report of "Réviseur d'Entreprises agréé" that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the EU Regulation N° 537/2014, the Law of 23 July 2016 and with ISAs as adopted for Luxembourg by the CSSF will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually

or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with the EU Regulation N° 537/2014, the Law of 23 July 2016 and with ISAs as adopted for Luxembourg by the CSSF, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the
consolidatedfinancial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to

provide a basis for our opinion. The risk of not detecting a material

misstatementresulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances,but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management Board.
Conclude on the appropriateness of the Management Board's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report of the "Réviseur d'Entreprises agréé" to the related disclosures in the consolidated financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our report of the "Réviseur d'Entreprises agréé". However, future events or conditions may
cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities and business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.

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INDEPENDENT AUDITOR'S REPORT

E ADDITIONAL INFORMATION

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our report unless law or regulation precludes public disclosure about the matter.

We confirm that the audit opinion is consistent with the additional report to the audit committee or equivalent.

We confirm that the prohibited non-audit services referred to in the EU Regulation No 537/2014 were not provided and that we remained independent of the Group in conducting the audit.

Other matter

The Corporate Governance Statement includes, when applicable, information required by Article 68ter paragraph (1) points a), b), e), f) and

of the law of 19 December 2002 on the commercial and companies
register and on the accounting records and annual accounts of undertakings, as amended.

Report on other legal and regulatory	Luxembourg, 10 December 2020
requirements
	KPMG Luxembourg Société coopérative
We have been appointed as "Réviseur d'Entreprises agréé" by the	Cabinet de révision agréé
Shareholders on 12 February 2020 and the duration of our uninterrupted
engagement, including previous renewals and reappointments, is seven years.	T. Feld
The consolidated management report is consistent with the consolidated	Partner
financial statements and has been prepared in accordance with applicable
legal requirements.

The Corporate Governance Statement is included in the management report. The information required by Article 68ter paragraph (1) letters

and d) of the law of 19 December 2002 on the commercial and
companies register and on the accounting records and annual accounts
of undertakings,as amended, is consistent with the consolidated financial statements and has been prepared in accordance with applicable legal requirements.

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E ADDITIONAL INFORMATION

ANNUAL

ACCOUNTS

for the fiscal year ended September 30, 2020

BALANCE SHEET	107
PROFIT AND LOSS ACCOUNT	108
NOTES TO THE ANNUAL ACCOUNTS	109
		1	General	109

	2 Summary of significant valuation

			and accounting policies	109
	3 Movements in fixed assets	110

		4 Financial assets	111

		5 Debtors	111

		6 Prepayments	111

	7 Capital and reserves	111

	8 Amounts owed to affiliated undertakings	111

	9 Other operating income	111

	10 Other external expenses	111

		11 Staff costs	112

		12 Taxation	112

		13 Related parties	112

		14 Share-based payments	112

	15 Commitments, contingencies and pledges	114

		16 Subsequent events	114

RESPONSIBILITY STATEMENT	115
INDEPENDENT AUDITOR'S REPORT	116

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BALANCE SHEET

as of September 30, 2020

Balance sheet	T_093	Balance sheet	T_093

IN € THOUSANDS	NOTE	Sept 30, 2020		Sept 30, 2019

Assets

Fixed assets	3	545,916	553,444

Intangible assets

Concessions, patents, licenses, trade marks and similar rights
and assets, if they were acquired for valuable consideration
and need not be shown under C.I.3		-		-

Tangible assets

Other fixtures and fittings, tools and equipment		-		-

Financial assets

Shares in affiliated undertakings	4	545,916	553,444

Current assets		3,219	24,179

Debtors	5	760	1,200

Amounts owed by affiliated undertakings

becoming due and payable within one year		679	712

Other debtors

becoming due and payable within one year		81	488

Cash at bank and in hand		2,459	22,979

Prepayments	6	217	268

Total assets		549,352	577,891

IN € THOUSANDS	NOTE	Sept 30, 2020		Sept 30, 2019

Liabilities

Capital and reserves	7	547,014	576,065

Subscribed capital		247	247

Share premium account		419,801	419,801

Reserves

Legal reserve		1,597	1,597

Other reserves, including the fair value reserve		4,835	4,835

Profit or loss brought forward		122,415	150,662

Profit or loss for the financial year		(1,881)	(1,077)

Provisions		239		-

Provisions for taxation		239		-

Creditors		2,099	1,826

Trade creditors

becoming due and payable within one year		1,096	1,040

Amounts owed to affiliated undertakings

becoming due and payable within one year	8	3	3

Other creditors

Social security authorities		14	13

Other creditors

becoming due and payable within one year		986	770

Total liabilities		549,352	577,891

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E ADDITIONAL INFORMATION

PROFIT AND LOSS ACCOUNT

for the fiscal year ended September 30, 2020

Profit and loss account	T_094

IN € THOUSANDS	NOTE

Other operating income	9

Raw materials and consumables and other external expenses	10

Other external expenses

Staff costs	11

Wages and salaries

Social security on salaries and wages

Other operating expenses

Income from participating interests

derived from affiliated undertakings

Interest payable and similar expenses

concerning affiliated undertakings

Other interest and similar financial expenses

Tax on profit or loss

Profit or loss for the financial year

Year ended Sept 30,
2 0 2 0	2019
4,200	3,951
(2,755)	(2,939)
(2,755)	(2,939)
(2,186)	(1,310)
(2,114)	(1,248)
(72)	(62)
(703)	(547)
-	0
-	0
(85)	(16)
-	-
(85)	(16)
(352)	(216)
(1,881)	(1,077)

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		NOTES TO THE ANNUAL ACCOUNTS

			GENERAL

SUMMARY OF SIGNIFICANT VALUATION

AND ACCOUNTING POLICIES

NOTES TO THE ANNUAL ACCOUNTS

for the year ended September 30, 2020

1General

registered office of the Company is 2, rue Albert Borschette, L-1246 Luxembourg, Grand Duchy of Luxembourg. The trade register number is B151589. The Company was founded under the name of Servus HoldCo S. à r. l. on February 26, 2010.

The Company is managed by a Management Board under the supervision of the Supervisory Board.

The Company is formed for an unlimited duration.

The purpose of the Company is (i) the acquisition, holding and disposal,

The Company's financial year starts on October 1 and ends on September 30 each year.

The Company has no parent company which prepares consolidated financial statements including the Company as a subsidiary.

The Company prepares consolidated financial statements in accordance with EU regulation 1606/2002.

The copies of the consolidated financial statements are available at the registered office of the Company at 2, rue Albert Borschette, L-1246 Luxembourg or on www.stabilus.com.

2Summary of significant valuation and accounting policies

Basis of presentation

The annual accounts are prepared in accordance with Luxembourg company law and generally accepted accounting principles applicable in Luxembourg. The accounting policies and valuation principles are, apart from those enforced by law, determined by the Management Board.

opens the ability to issue promissory loan notes (Schuldscheindarlehen) up to an aggregated amount of €150,000 thousand (we refer to Note 15). The senior facility agreement, as amended, gives planning stability over the next years. In the financial year 2020, the COVID-19 crisis did not have any material adverse effects to the liquidity of the Company.

The impairment test for fiscal year 2020 confirms that the book value of the financial assets of the Stabilus S. A. is fully recoverable and has not been impaired.

The impacts of the COVID-19 crisis affecting the net profit of the Stabilus S. A. insignificantly, the key business model of the Company is the

acquisition, holding and disposal of interests in Luxembourg and / or in foreign companies and undertakings, as well as the administration, development and management of such interest.

The annual accounts have been prepared under the going concern

assumption and in accordance with current legal requirements and generally accepted accounting principles in the Grand Duchy of Luxembourg. From the current perspective there are no risks to the continued existence of the Stabilus S. A. and its affiliated companies.

in any form, by any means, whether directly or indirectly, of participations, rights and interests in, and obligations of, Luxembourg and foreign

companies, including but not limited to any entities forming part of the Stabilus Group, (ii) the acquisition by purchase, subscription, or in any other manner, as well as the transfer by sale, exchange or in any other manner of stock, bonds, debentures, notes and other securities or financial

instrumentsof any kind (including notes or parts or units issued by Luxembourg or foreign mutual funds or similar undertakings) and

receivables, claims or loans or other credit facilities and agreements or contracts relating thereto, and (iii) the ownership, administration, development and management of a portfolio of assets (including, among other things, the assets referred to in (i) and (ii) above).

Fiscal year 2020 was significantly affecting from the COVID-19 crisis, which had a negative effect worldwide. To mitigate the risks of the

COVID -19 pandemic, Stabilus has implemented a global multidisciplinary crisis management team that monitors and analyzes the situation on a daily basis on a local and a global level and is taking actions to address and mitigate identified risks.

On July 31, 2020, Stabilus signed an amendment of the senior facility agreement dated June 7, 2016, to prepare for potential future challenges from the COVID-19 crisis. The amendment provides for an additional committed credit line of €50,000 thousand, a temporary increase of the maximum leverage ratio permitted under the senior facility agreement and

Foreign currency translation

The Company maintains its books and records in euro (€). The balance sheet and the profit and loss account are expressed in this currency.

Formation expenses, intangible, tangible and financial fixed assets denominated in currencies other than euro are translated at the historical exchange rates.

Cash at bank denominated in currencies other than euro are translated at the exchange rates prevailing at the date of the balance sheet.

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SUMMARY OF SIGNIFICANT VALUATION

AND ACCOUNTING POLICIES

MOVEMENTS IN FIXED ASSETS

Current assets and liabilities denominated in currencies other than euro (having an economic link and similar characteristics) are recorded globally at the exchange rates prevailing at the date of the balance sheet.

Long term debts denominated in currencies other than euro having an economic link with receivables recorded in financial assets (and having

similar characteristics) are translated at the historical exchange rates (loans "back to back").

As a result, realized exchange gains and losses and unrealized exchange losses are recorded in the profit and loss account. Unrealized exchange gains are not recognized.

These value adjustments may not be continued if the reasons for which the value adjustments were recognized have ceased to exist.

Debtors

Current receivables are recorded at their nominal value. Current receivables are written down to their recoverable amount if there is a permanent impairment.

These value adjustments may not be continued if the reasons for which the value adjustments were recognized have ceased to exist.

Provisions

Provisions are intended to cover losses or debts, the nature of which is clearly defined and which, at the date of the balance sheet, are either likely to be incurred or certain to be incurred but uncertain as to their amount or the date on which they will arise.

Creditors

Debts are recorded at their reimbursement value. Where the amount repayable on account exceeds the amount received, the difference is shown as an asset and is written off over the period of the debt.

Intangible and tangible assets

Intangible and tangible assets are used for business purposes and are measured at cost less accumulated value adjustments. Depreciation on intangible and tangible assets is recorded on a straight-line basis in

accordance with its utilization and based on the useful life of the asset. The residual value, depreciation methods and useful life are reviewed annually and adjusted, if necessary.

Financial assets

Shares in affiliated undertakings, participating interests and securities held as fixed assets are stated at acquisition cost. Write-downs are recorded if a permanent reduction in the fair value is expected. The impairment analysis is done individually for each investment.

Loans to affiliated undertakings are recorded at their nominal value. Loans are written down to their recoverable amount if there is a permanent impairment.

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3Movements in fixed assets

Fixed assets schedule							T_095

						Shares in affiliated
IN € THOUSANDS		Intangible assets		Tangible assets		undertakings	Total

Gross value

Balance as of Sept 30, 2019	22	44	553,444	553,510

Additions		-		-		-	-

Decrease		-		-	(7,528)	(7,528)

Balance as of Sept 30, 2020		22	44	545,916	545,982


Accumulated value adjustments

Balance as of Sept 30, 2019	(22)	(44)		-	(66)

Additions		-		-		-	-

Disposals		-		-		-	-

Balance as of Sept 30, 2020		(22)	(44)		-	(66)


Carrying amount

Balance as of Sept 30, 2019	(0)	(0)	553,444	553,444

Balance as of Sept 30, 2020		(0)	(0)	545,916	545,916

110

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B COMBINED MANAGEMENT REPORT

C CONSOLIDATED FINANCIAL STATEMENTS

D ANNUAL ACCOUNTS

E ADDITIONAL INFORMATION

FINANCIAL ASSETS

DEBTORS

PREPAYMENTS

CAPITAL AND RESERVES

AMOUNTS OWED TO AFFILIATED UNDERTAKINGS

4Financial assets

OTHER OPERATING INCOME

OTHER EXTERNAL EXPENSES

Shares in affiliated undertakings

T_096

Under Luxembourg law, the Company is required to allocate annually at

least 5% of its statutory net profit to a legal reserve until the aggregate

Shares in affiliated

Equity as

reserve equals 10% of the subscribed share capital. The reserve is not

Proportion of

undertakings as at

at year-end

Profit or loss for

available for distribution. In financial year 2020, no additional amount was

IN € THOUSANDS

capital held

Year-end date

Sept 30, 2020

(including result)

the year ended

allocated to the legal reserve.

Stable II S.à r. l.,2,

rue Albert Borschette,

1246 Luxembourg, Luxembourg

100%

30.09.2019

545,916

431,974

(2,193)

8Amounts owed to affiliated

Total

545,916

undertakings

Blitz F10 neun GmbH was liquidated during financial year 2020. The Company decreased its investment in Stable II S. à r. l. by distributing €7,500 thousand in February 2020 out of the share premium account of Stable II S. à r. l.

5Debtors

5.1 Amounts owed by affiliated undertakings

The amount of €679 thousand is a receivable from affiliated undertakings for providing management services (PY: €712 thousand).

5.2 Other debtors

The amount mainly consists of a tax receivable amounting to € 72 thousand (PY: €329 thousand). In financial year 2020 the Company received a VAT refund of €351 thousand (PY: €469 thousand) for prior years.

6Prepayments

Prepayments mainly relate to insurance contracts.

7Capital and reserves

The Annual General Meeting of the shareholders on February 12, 2020,

authorized the Management Board to buy back up to 2 million own shares. This authorization is given for a period of five years from the date of resolution. The repurchased shares may be used for any legally permissible purposes.

The Annual General Meeting on February 12, 2020, approved the distribution of a dividend of €1.10 per share with a total amount of €27,170 thousand out of profit brought forward and to set off the loss from fiscal year 2019 amounting to €1,077 thousand from profit brought forward.

The amount of €3 thousand (PY: €3 thousand) consists of a trade liability owed to affiliated undertakings.

9Other operating income

The other operating income only includes reimbursements for management services provided by Stabilus S. A. to other Stabilus Group companies amounting to €4,200 thousand (PY: €3,764 thousand).

10Other external expenses

Other external expenses	T_097

	Year ended Sept 30,
IN € THOUSANDS	2020	2019
Administration fees	280	267
Consulting fees	1,671	1,716
Audit fees	371	412
Group insurance	183	189
Legal and professional fees	213	312
Bank charges	37	43
Total	2,755	2,939

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C CONSOLIDATED FINANCIAL STATEMENTS

D ANNUAL ACCOUNTS

E ADDITIONAL INFORMATION

STAFF COSTS

TAXATION

RELATED PARTIES

SHARE-BASED PAYMENTS

11Staff costs

The Company employs 6 employees as of September 30, 2020 (PY: 8). The

average number of employees in the financial year 2020 was 7 (PY: 8).

12Taxation

The Company is subject to Luxembourg company tax law.

13Related parties

The remuneration of the members of the Management Board amounts to €1,070 thousand (PY: €1,444 thousand). The remuneration of the members of the Supervisory Board amounts to €406 thousand (PY: €439 thousand). From fiscal year 2019 on, Stabilus is obliged by the European directive and Luxembourg law to draw up a remuneration policy for the Supervisory Board as well as the Management Board. The principles and measurement of the remuneration policy for the Management Board and Supervisory Board of the Stabilus S. A. are prepared in accordance with Article 7bis of the Luxembourg law of May 24, 2011 on Shareholders Rights, as amended. The remuneration report will be published separately from this Annual Report.

As of September 30, 2020, members of the Management and Supervisory Board held about 0.3% of the total shares in Stabilus S. A.

14Share-based payments

The variable compensation for the members of the Management Board

ManagementBoard members. By this measure the incentive effect of the MSP tranches will be maintained. However, the performance targets including number of options and exercise prices remain unchanged.

Participation in the matching stock program requires Management Board members to invest in shares of the Company. The investment has generally to be held for the lock-up period.

As part of the matching stock program A (the "MSP A") for each share the Management Board invests in the Company in the specific year (subject to general cap), the Management Board members receive a certain number of fictitious options to acquire shares in the Company for each tranche of the matching stock program. The amount of stock options received depends upon a factor to be set by the Supervisory Board (Remuneration Committee) annually in a range between 1.0 time and 1.7 times for a certain tranche. Thus, if a Management Board member were to buy 1,000

shares under the MSP A in the Company, he would receive 1,000 to 1,700 fictitious options for a certain tranche. The fictitious options are subject to a lock-up period of four years and may be exercised during a subsequent two-year exercise period.

As part of matching stock program B (the "MSP B") for each share the Management Board holds in the Company in the specific year (subject to a general cap), the Management Board members receive a certain number of fictitious options to acquire shares in the Company for each tranche of the matching stock program. The amount of stock options received depends upon a factor to be set by the Supervisory Board (Remuneration Committee) annually which will be in a range between 0.0 and 0.3 times for a certain tranche. Thus, if a Management Board member were to be holding 1,000 shares under the MSP B in the Company, he would receive 0 to 300 fictitious options for a certain tranche. The fictitious options are subject to a lock-up period of four years and may be exercised during a subsequent two-year exercise period. The options may only be exercised if the stock price of the Company exceeds a set threshold for the relevant tranche, which the Supervisory Board will determine at the time of granting the options, and which needs to be between 10% and 50% growth over the base price, which is the share price on the grant date. If exercised, the fictitious options are transformed into a gross amount equaling the difference between the option price and the relevant stock price multiplied by the number of exercised options. The Company plans a cash settlement.

The maximum gross amounts resulting from the exercise of the fictitious options of one tranche in general is limited in amount 50% of the base price. Reinvestment of IPO proceeds from previous equity programs are not taken into account for MSP A. In fiscal year 2020, the number of MSP A and MSP B share options developed as follows:

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					SHARE-BASED PAYMENTS

Number of share options																	T_098

			MSP A/B (2015)		MSP A/B (2016)		MSP A (2017)	MSP A (2018)

			No. of options		Exercise price		No. of options		Exercise price		No. of options		Exercise price	No. of options		Exercise price

Outstanding as at October 1, 2019	20,583		€31.08	20,129		€48.64	7,238		€74.74	10,423		€74.22

Granted during the year			-		-		-		-		-		-	-		-

Forfeited during the year			-		-	4,112		-		-		-	-		-

Exercised during the year		20,583		€31.08		-		-		-		-	-		-

Outstanding as at September 30, 2020			-		-	16,017		€48.64	7,238		€74.74	10,423		€74.22

Exercisable as at September 30, 2020			-		-	16,017		€48.64		-		-	-		-

Performance Share Plan

The Management Board members of Stabilus S. A. received allocations under the Performance Share Plan (the "PSP") in the form of virtual shares. The virtual shares of the Performance Share Plan are based on an

annual target amount granted at the beginning of a three-year performance period as a future entitlement. In order to determine the target number of virtual shares granted, the annual target amount is divided by the start share price, whereby the start share price refers to the arithmetic mean of the Company's share closing price during the last 60 trading days prior to the respective performance period start date.

The performance factor which determines the final number of virtual shares is calculated at the end of the three-year performance period via the relative Total Shareholder Return (weighted with 70%) and the EBIT margin (weighted with 30%).

dividends are directly re-invested. Secondly, the calculated absolute TSR values of Stabilus and each index constituent are ranked by size in order to calculate the target achievement.

The final number of virtual shares is determined by multiplying the overall target achievement with the target number of virtual shares granted.The final number of virtual shares is capped at 150% of the target number of virtual shares granted. The payout of the respective tranche of the Performance Share Plan is calculated by multiplying the final number of virtual shares with the relevant end share price including any dividends paid during the performance period. The end share price refers to the arithmetic mean of the Company's share closing price during the last 60 trading days prior to the respective performance period end date. The payout amount is limited to a maximum of 250% of the target amount (payout cap). The Performance Share Plan is paid out in cash at the end of the performance period.

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					SHARE-BASED PAYMENTS

					COMMITMENTS, CONTINGENCIES

					AND PLEDGES
					SUBSEQUENT EVENTS

The number of Performance Shares developed as follows in fiscal year 2020:

Performance Share Plan												T_099


VALUATION DATE			Sept 30, 2019				Sept 30, 2020		Sept 30, 2020

Performance period			Oct 1, 2018 - Sept 30, 2021		Oct 1, 2018 - Sept 30, 2021		Oct 1, 2019 - Sept 30, 2022

Price of the Stabilus share					€44.90				€50.15		€50.15

"Initial Price" Stabilus share					€73.74				€73.74		€41.77

Expected annual dividend yield	2.00%		2.00%			2.00%

Remaining duration of granted performance shares					2.0 years				1.0 year		2.0 years

Risk-free annual interest rate (duration 2.0 years)	(0.80)%		(0.67)%			(0.73)%

Expected target achievement for internal target EBIT	100%		100%			100%

Cap per performance share used in the valuation			250% x €73.74				250% x €73.74		250% x €41.77

Number of share options												T_100

			PSP (2019)						PSP (2020)

		Number of options	Fair value		Number of options		Fair value

Outstanding as at October 1, 2018			-		-				-		-

Granted during the year	3,662			€30.65				-		-

Forfeited during the year			-		-				-		-

Exercised during the year			-		-				-		-

Outstanding as at September 30, 2019	3,662			€30.65				-		-

Exercisable as at September 30, 2019			-		-				-		-

Outstanding as at October 1, 2019	3,662			€30.65				-		-

Granted during the year			-		-	8,834		€47.30

Forfeited during the year		1,526			-	4,848		-

Exercised during the year			-		-				-		-

Outstanding as at September 30, 2020		2,136			€36.66	3,986		€47.30

Exercisable as at September 30, 2020			-		-				-		-

15Commitments, contingencies and pledges

In fiscal year 2016, the Company and other affiliated companies entered into a senior facility agreement with a total amount of €640,000 thousand made up of a €455,000 thousand senior A facility, an equity bridge facility commitment of €115,000 thousand and a €70,000 thousand revolving facility. The equity bridge facility commitment had already been repaid per September 30, 2016. The original term of the senior term loan was June 29, 2021 and was extended to June 28, 2023 in August 2018. On July 31, 2020, Stabilus signed an amendment of the senior facility agreement from June 7, 2016, to prepare for potential future challenges from the COVID-19 crisis. The amendment provides for an additional committed credit line of €50,000 thousand, a temporary increase of the maximum leverage ratio and opens the ability to issue promissory loan notes (Schuld- scheindarlehen) up to an aggregated amount of €150,000 thousand.

The Company is guarantor of the senior facility agreement.

16Subsequent events

There were no events or developments that could have materially affected the measurement and presentation of the Company's assets and liabilities as of September 30, 2020.

Luxembourg, December 10, 2020

Stabilus S. A.

Management Board

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C CONSOLIDATED FINANCIAL STATEMENTS

D ANNUAL ACCOUNTS

E ADDITIONAL INFORMATION

RESPONSIBILITY STATEMENT

We, Dr. Michael Büchsner (Chief Executive Officer), Mark Wilhelms (Chief Financial Officer), Andreas Schröder (Group Financial Reporting Director) and Andreas Sievers (Director Group Accounting and Strategic Finance Projects), confirm, to the best of our knowledge, that the annual accounts which have been prepared in accordance with the legal requirements and generally accepted accounting principles applicable in the Grand Duchy of Luxembourg, give a true and fair view of the assets, liabilities, financial position and profit and loss of Stabilus S. A. and that the combined

managementreport includes a fair review of the development and performance of the business and the position of Stabilus S. A., together with a description of the principal risks and uncertainties that they face.

Luxembourg, December 10, 2020

Dr. Michael Büchsner

Mark Wilhelms

Andreas Schröder

Andreas Sievers

Management Board

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C CONSOLIDATED FINANCIAL STATEMENTS

D ANNUAL ACCOUNTS

E ADDITIONAL INFORMATION

INDEPENDENT AUDITOR'S REPORT

To the Shareholders of

Stabilus S. A.

2, rue Albert Borschette, L-1246 Luxembourg

Report of the réviseur d'entreprises agréé

Report on the audit of the annual accounts

Opinion

We have audited the annual accounts of Stabilus S. A. (the "Company"), which comprise the balance sheet as at 30 September 2020, and the

profit and loss account for the year then ended, and notes to the annual accounts, including a summary of significant accounting policies.

In our opinion, the accompanying annual accounts give a true and fair view of the financial position of the Company as at 30 September 2020 and of the results of its operations for the year then ended in accordance with Luxembourg legal and regulatory requirements relating to the preparation and presentation of the annual accounts.

Basis for Opinion

We conducted our audit in accordance with the EU Regulation N° 537/2014, the Law of 23 July 2016 on the audit profession ("Law of 23 July 2016") and with International Standards on Auditing ("ISAs") as adopted for Luxembourg by the "Commission de Surveillance du Secteur Financier" ("CSSF"). Our responsibilities under the EU Regulation N° 537/2014, the Law of 23 July 2016 and ISAs are further described in the «Responsibilities of "Réviseur d'Entreprises agréé" for the audit

of the annual accounts» section of our report. We are also independent of the Company in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants ("IESBA Code") as adopted for Luxembourg by the CSSF together with

the ethical requirementsthat are relevant to our audit of the annual accounts, and have fulfilled our other ethical responsibilities under those

ethical requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the annual accounts of the current period. These matters were addressed in the context of the audit of the annual accounts as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

We have determined that there are no key audit matters to communicate in our report.

Other information

The Management Board is responsible for the other information. The other information comprises the information stated in the annual

report including the management report (on consolidated level) and the Corporate Governance Statement but does not include the annual accounts and our report of "Réviseur d'Entreprises agréé" thereon.

Our opinion on the annual accounts does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the annual accounts, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the annual accounts or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information we are required to report this fact. We have nothing to report in this regard.

Responsibilities of the Management Board and Those Charged with Governance for the annual accounts

The Management Board is responsible for the preparation and fair presentation of the annual accounts in accordance with Luxembourg legal and regulatory requirements relating to the preparation and presentation of the annual accounts, and for such internal control as the Management Board determines is necessary to enable the preparation of annual accounts that are free from material misstatement, whether due to fraud or error.

In preparing the annual accounts, the Management Board is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Management Board either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

Responsibilities of the Réviseur d'Entreprises agréé for the audit of the annual accounts

The objectives of our audit are to obtain reasonable assurance about whether the annual accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue a report of

"Réviseur d'Entreprises agréé" that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the EU Regulation N° 537/2014, the Law of 23 July 2016 and with ISAs as adopted for Luxembourg by the CSSF will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these annual accounts.

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C CONSOLIDATED FINANCIAL STATEMENTS

D ANNUAL ACCOUNTS

E ADDITIONAL INFORMATION

INDEPENDENT AUDITOR'S REPORT

Identify and assess the risks of material misstatement of the annual accounts, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances,but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management Board.
Conclude on the appropriateness of the Management Board's use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report of
the "Réviseur d'Entreprises agréé" to the related disclosures in the
annual accounts or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up
to the date of our report of the "Réviseur d'Entreprisesagréé". Howe-
ver, future events or conditions may cause the Company to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the
annual accounts, including the disclosures, and whether the annual accounts represent the underlying transactions and events in a manner that achieves fair presentation.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the annual accounts of the current period and are therefore the key audit matters. We describe these matters in our report unless law or regulation precludes public disclosure about the matter.

Report on other legal and regulatory requirements

We have been appointed as "Réviseur d'Entreprises agréé" by the Board of Directors on 12 February 2020 and the duration of our uninterrupted engagement, including previous renewals and reappointments, is seven years.

The Corporate Governance Statement is included in the management report of the consolidated financial statements. The information required by Article 68ter paragraph (1) letters c) and d) of the law of 19 December

2002 on the commercial and companies register and on the accounting

records and annual accounts of undertakings, as amended, is consistent with the annual accounts and has been prepared in accordance with applicable legal requirements.

We confirm that the audit opinion is consistent with the additional report to the audit committee or equivalent.

We confirm that the prohibited non-audit services referred to in the EU Regulation No 537/2014 were not provided and that we remained independent of the Company in conducting the audit.

Other matter

The Corporate Governance Statement includes, when applicable, information required by Article 68ter paragraph (1) points a), b), e), f) and g) of the law of 19 December 2002 on the commercial and

companies register and on the accounting records and annual accounts of undertakings, as amended.

Luxembourg, 10 December 2020

KPMG Luxembourg Société coopérative

Cabinet de révision agréé

Feld Partner

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ADDITIONAL

INFORMATION

for the fiscal year ended September 30, 2020

FINANCIAL CALENDAR	119
DISCLAIMER	119
TABLE DIRECTORY	120
E INFORMATION RESOURCES	123

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C CONSOLIDATED FINANCIAL STATEMENTS

D ANNUAL ACCOUNTS

FINANCIAL CALENDAR

Financial calendar	T _ 101

DATE1)2)	PUBLICATION / EVENT

E ADDITIONAL INFORMATION

FINANCIAL CALENDAR DISCLAIMER

November 13, 2020

December 11, 2020

February 1, 2021

February 10, 2021

May 3, 2021

August 2, 2021

November 12, 2021

December 10, 2021

Publication of preliminary financial results for fiscal year 2020 Publication of full year results for fiscal year 2020 (Annual Report 2020)

Publication of the first-quarter results for fiscal year 2021 (Quarterly Statement Q1 FY2021) Annual General Meeting

Publication of the second-quarter results for fiscal year 2021 (Interim Report Q2 FY2021) Publication of the third-quarter results for fiscal year 2021 (Quarterly Statement Q3 FY2021) Publication of preliminary financial results for fiscal year 2021

Publication of full year results for fiscal year 2021 (Annual Report 2021)

We cannot rule out changes of dates. We recommend checking them on our website in the Investors / Financial Calendar section (www.ir.stabilus.com).
Please note that our fiscal year (FY) comprises a twelve-month period from October 1 to September 30 of the following calendar year. E.g. the fiscal year 2021 comprises a year ending September 30, 2021.

DISCLAIMER

Forward-looking statements

This annual report contains forward-looking statements that relate to the current plans, objectives,

forecasts and estimates of the management of Stabilus S. A. These statements take into account only information that was available up and including the date that this annual report was prepared. The management of Stabilus S. A. makes no guarantee that these forward-looking statements will prove to be right. The future development of Stabilus S. A. and its subsidiaries and the results that are actually

achieved are subject to a variety of risks and uncertainties which could cause actual events or results to differ significantly from those reflected in the forward-looking statements. Many of these factors are beyond the control of Stabilus S. A. and its subsidiaries and therefore cannot be precisely predicted. Such factors include, but are not limited to, changes in economic conditions and the competitive situation, changes in the law, interest rate or exchange rate fluctuations, legal disputes and investigations, and the availability of funds. These and other risks and uncertainties are set forth in the combined management

report. However, other factors could also have an adverse effect on our business performance and

results . Stabilus S. A. neither intends to nor assumes any separate obligation to update forward-looking statements or to change these to reflect events or developments that occur after the publication of this annual report.

Rounding

Certain numbers in this annual report have been rounded up or down. There may therefore be discrepancies between the actual totals of the individual amounts in the tables and the totals shown as well as between the numbers in the tables and the numbers given in the corresponding analyses in the text of the annual report. All percentage changes and key figures in the combined management report were calculated using the underlying data in millions of euros to one decimal place (€ millions).

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C CONSOLIDATED FINANCIAL STATEMENTS

D ANNUAL ACCOUNTS

TABLE DIRECTORY

DESCRIPTION		NUMBER	PAGE

Latest growth projections for selected economies	001	20

Production of light vehicles	002	21

Income statement	003	23

Revenue by region and business unit	004	24

Reconciliation of EBIT to adjusted EBIT	005	26

Operating segments	006	27

Balance sheet	007	29

Cash flows	008	30

Free cash flow	009	31

Adjusted free cash flow	010	31

Net leverage ratio	011	32

Financial debt	012	32

Adjusted EBITDA	013	33

Consolidated statement of comprehensive income	014	43

Consolidated statement of financial position	015	44

Consolidated statement of changes in equity	016	45

Consolidated statement of cash flows	017	46

Subsidiaries	018	49

Exchange rates	019	51

New standards, interpretations and amendments in the financial year	020	52

Reconciliation of IFRS 16 effects on the consolidated statement of financial position	021	53

Reconciliation of IFRS 16 effects on the consolidated statement of comprehensive income	022	53

Reconciliation of IFRS 16 effects on the consolidated statement of cash flows	023	54

Reconciliation of lease liabilities	024	54

New standards, interpretations and amendments issued and endorsed by the EU (not yet adopted)	025	55

New standards, interpretations and amendments issued but not yet endorsed by the EU	026	56

Revenue by region and business unit	027	61

Expenses by function	028	62

Personnel expenses	029	62

Average number of employees	030	62

Other income	031	63

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TABLE DIRECTORY

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C CONSOLIDATED FINANCIAL STATEMENTS

D ANNUAL ACCOUNTS

DESCRIPTION		NUMBER	PAGE

Other expenses	032	63

Finance income	033	63

Finance costs	034	63

Income tax expense	035	63

Tax expense reconciliation (expected to actual)	036	64

Deferred tax assets and liabilities	037	64

Tax loss and interest carry-forwards	038	65

Reconciliation movement in deferred tax assets and liabilities	039	65

Weighted average number of shares	040	66

Earnings per share	041	66

Property, plant and equipment	042	67

Property, plant and equipment - carrying amount	043	68

Reconciliation depreciation expense for property, plant and equipment	044	68

Right of Use Assets	045	69

Goodwill	046	70

Weighted average cost of capital (WACC)	047	71

Goodwill sensitivity analysis	048	71

Intangible assets	049	72

Other intangible assets - carrying amount	050	73

Other financial assets	051	73

Other assets	052	74

Inventories	053	74

Trade and other receivables	054	74

Exposure to credit risk and ECLs	055	75

Allowance for doubtful accounts	056	76

Accumulated other comprehensive income / (expense)	057	77

Financial liabilities	058	78

Other financial liabilities	059	79

Outflows for lease payments	060	79

Interest expense on lease liabilities	061	79

Maturity of lease liabilities	062	79

Expenses of short-term and low-value leases	063	79

Provisions	064	80

Changes of non-current provisions	065	81

Changes of current provisions	066	82

S TA B I L U S A N N U A L R E P O R T 2 0 2 0

E ADDITIONAL INFORMATION

TABLE DIRECTORY

121

A TO OUR SHAREHOLDERS

B COMBINED MANAGEMENT REPORT

C CONSOLIDATED FINANCIAL STATEMENTS

D ANNUAL ACCOUNTS

DESCRIPTION	NUMBER		PAGE

Pension plans and similar obligations	067	83

Unfunded status	068	83

Present value of the net pension liability obligations	069	84

Pension cost for defined benefit plans	070	84

Present value of the defined benefit obligation and the experience adjustments on the plan liabilities	071	84

Significant factors for the calculation of pension obligations	072	84

Other liabilities	073	85

Financial commitments	074	86

Financial instruments	075	87

Financial instruments	076	88

Credit risks included in financial assets	077	89

Liquidity outflows for liabilities	078	90

Equity ratio	079	91

Reconciliation financing activities	080	92

Segment reporting	081	92

Reconciliation of the total segments' profit to profit / (loss) before income tax	082	93

Geographical information: Revenue by country	083	93

Geographical information: Non-current assets by country	084	93

Input parameters for fair value measurement of MSP	085	95

Number of share options	086	96

Input parameters for fair value measurement of PSP	087	97

Phantom Stock Program options	088	97

Performance Share Plan	089	98

Number of share options	090	98

Auditor's fees	091	98

Remuneration	092	99

Balance sheet	093	107

Profit and loss account	094	108

Fixed assets schedule	095	110

Shares in affiliated undertakings	096	111

Other external expenses	097	111

Number of share options	098	113

Performance Share Plan	099	114

Number of share options	100	114

Financial calendar	101	119

S TA B I L U S A N N U A L R E P O R T 2 0 2 0

E ADDITIONAL INFORMATION

TABLE DIRECTORY

122

A TO OUR SHAREHOLDERS	B COMBINED MANAGEMENT REPORT	C CONSOLIDATED FINANCIAL STATEMENTS	D ANNUAL ACCOUNTS	E ADDITIONAL INFORMATION
					INFORMATION RESOURCES

INFORMATION RESOURCES

Further information including news, reports and publications can be found in the investors section of our website at www.ir.stabilus.com.

Investor Relations

Phone: +352 286 770 21

Fax: +352 286 770 99

Email: investors@stabilus.com

S TA B I L U S A N N U A L R E P O R T 2 0 2 0

123

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Stabilus SA published this content on 11 December 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 December 2020 18:30:02 UTC

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