Stabilus S A : Q3 FY2020 Results Presentation

Q3 FY2020

RESULTS

August 3, 2020

Disclaimer

Stabilus S.A. (the "Company", later "Stabilus") has prepared this presentation solely for your information. It should not be treated as giving investment advice. Neither the Company, nor any of its directors, officers, employees, direct or indirect shareholders and advisors nor any other person shall have any liability whatsoever for any direct or indirect losses arising from any use of this presentation.

While the Company has taken all reasonable care to ensure that the facts stated in this presentation are accurate and that the opinions contained in it are fair and reasonable, this presentation is selective in nature. Any opinions expressed in this presentation are subject to change without notice and neither the Company nor any other person is under any obligation to update or keep current the information contained in this presentation. Where this presentation quotes any information or statistics from any external source, you should not interpret that the Company has adopted or endorsed such information or statistics as being accurate. This presentation contains forward-looking statements, which involve risks, uncertainties and assumptions that could cause actual results, performance or events to differ materially from those described in, or expressed or implied by, such statements. These statements reflect the Company's current knowledge and its expectations and projections about future events and may be identified by the context of such statements or words such as "anticipate," "believe", "estimate", "expect", "intend", "plan", "project" and "target". No obligation is assumed to update any such statement.

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

1

Agenda

1. Operational update
2. Financial results
3. Results by operating segment
4. Outlook
5. Appendix

2

Agenda

1. Operational update

2.

3.

4.

5.

3

Operational update: COVID-19 situation

Status quo

During the last quarter (Q3 FY20) there have been a few COVID-19 cases at Stabilus production plants in Romania, Mexico, US and Germany; pandemic plan still applies: close monitoring of all activities to reduce COVID-19 risks for Stabilus employees and operations

Global light vehicle production in Q3 FY20 down by around 45% y/y, as a result of noticeable OEM production shutdowns in Europe and Americas

So far no ramp-up interruptions in operations of Stabilus

State of the balance sheet: net leverage ratio at 1.4x EBITDA, c. €114m cash as of June 2020

Corporate actions

Top priorities: ensuring safety of our employees and business continuity (keeping the production running)

Stabilus pandemic plan: strict hygiene rules, social distancing, shift crew mixing stopped, home office enabled et al.

Cost flexibilization (EBIT recovery) program in successful execution

Aligning/adjusting our production capacity to customer demand by utilizing short-time work schemes, furloughs, plant shutdowns for several days, selected layoffs et al.

In addition to the existing and currently largely not utilized €70m revolving credit facility (thereof €22m drawn, €48m not drawn), a further credit line secured (committed €50m) and covenant headroom increased

4

Agenda

1.

2. Financial results

3.

4.

5.

5

Q3 FY2020 financial results

Revenue

Adj. EBIT

Profit

Adj. FCF

Net leverage ratio

Outlook

Revenue at €147.0m (vs. €241.6m in Q3 FY19), - 39.2% y/y

Acquisition effect: + 0.5% y/y, currency translation effect: - 3.0% y/y, organic growth: - 36.7% y/y

Adj. EBIT at €5.7m (vs. €37.1m in Q3 FY19), - 84.6% y/y

Adj. EBIT margin at 3.9% (vs. 15.4% in Q3 FY19)

Group result at €(16.4)m in Q3 FY20 (vs. €19.3m in Q3 FY19), including €(18)m net impact from impairment on intangible assets, in particular customer relationships in aerospace segment, i.e. €25.7m impairment after deferred tax

Adj. FCF = FCF before acquisitions; no payments for acquisitions in Q3 FY20 (vs. €39.3m in Q3 FY19)

Adj. FCF at €(6.0)m (vs. €31.4m in Q3 FY19) and FCF at €(6.0)m (vs. €(7.9)m in Q3 FY19); slightly negative FCF, partly due to the y-o-y higher and not lower capex in Q3 FY20, inter alia for the new Pinghu Powerise plant

Net leverage ratio at 1.4x (vs. 1.2x as of end Q3 FY19 and 1.0x as of end FY19)

Net financial debt at €214.2m (vs. €225.5 as of end Q3 FY19 and €189.1m as of end FY19)

Revenue forecast for FY2020: c. €800m

Adj. EBIT margin forecast for FY2020: c. 11%

6

Q3 FY2020 - Key figures

	Revenue (€m)				Adj. EBIT (€m)
		y-o-y organically				% margin	3.9%
		- 39.2%			15.4%
		- 36.7%
										- 84.6%

241.6		37.1
APAC
	147.0	APAC
AMERICAS
	AMERICAS
		5.7
EMEA
	EMEA
Q3 FY19	Q3 FY20	Q3 FY19	Q3 FY20

Profit (€m)		Adj. FCF (€m)

% revenue

8.0%(11.2)% - 185.0%

19.3 (16.4)

% revenue

incl. €(18m) net impact from impairment (€25.7m less deferred tax)

13.0%(4.1)%

- 119.1%

31.4

(6.0)

y-o-y higher capex in Q3FY20, inter alia for the new Pinghu Powerise plant

Q3 FY19

Q3 FY20

Q3 FY19

Q3 FY20

7

9M FY2020 - Key figures

	Revenue (€m)				Adj. EBIT (€m)
		y-o-y organically				% margin	11.1%
		- 15.1%			14.7%
		- 16.2%
										- 35.5%

705.7	599.4
APAC
AMERICAS
EMEA
9M FY19	9M FY20

103.5
APAC	66.8
AMERICAS
EMEA
9M FY19	9M FY20

Profit (€m)		Adj. FCF (€m)

% margin

8.1%3.0%

- 68.5%

57.4

18.1

% revenue

incl. €(18m) net impact from impairment (€25.7m less deferred tax)

7.1%2.5%

- 70.6%

50.4

14.8

9M FY19

9M FY20

9M FY19

9M FY20

8

Agenda

1.

2.

3. Results by operating segment

4.

5.

9

Q3 FY2020 - EMEA

	Revenue (€m)				Comments
		y-o-y organically				Light vehicle production (LVP) in Europe, Middle East and
	- 37.3%	- 37.9%			Africa in Q3 FY20 at 2.4m units, i.e. - 61.1% vs. Q3 FY19
124.5

IND	62.5	78.1
APR		48.0
		24.2
AGS		13.5
37.8
		16.6
		Q3 FY19	Q3 FY20

EMEA's Q3 revenue was impacted by COVID-19 crisis, down by €46.4m or - 37.3% y/y (i.e. - 37.9% organically); 61% of revenue was generated in industrial business (vs. 50% in Q3 FY19)

Industrial revenue decreased from €62.5m in Q3 FY19 to €48.0m in Q3 FY20, - 23.2% y/y or - 24.8% organically

Adj. EBIT (€m)

% margin	2.3%
14.9%

- 90.3% 18.6

1.8

Organic decline in Automotive Gas Spring at - 56.1% y/y and in Automotive Powerise at - 43.1% y/y; the development of Automotive Powerise revenue was supported by exports of Powerise units (for BMW X1 and 5-series) to China to cover Asian market demand by utilizing Romanian capacity while European OEMs' production was shut down

Adj. EBIT margin at 2.3% vs. 14.9% in Q3 FY19, key factors: revenue development and operating leverage in EMEA

Q3 FY19

Q3 FY20

10

Q3 FY2020 - AMERICAS

Revenue (€m)

Comments

y-o-y organically

Light vehicle production (LVP) in Americas in Q3 FY20 at 1.5m

- 54.3%

- 47.5%

units, i.e. - 71.3% vs. Q3 FY19

92.5

IND

29.0

Americas' revenue down by €50.2m, - 54.3% y/y or - 47.5%

APR

33.0

42.3

organically

AGS

23.7

Industrial revenue down by €5.3m, - 18.3% y/y (- 18.8% y/y

30.5

8.4

10.2

organically)

Q3 FY19

Q3 FY20

Organic revenue decline in Automotive Gas Spring at - 61.3%

Adj. EBIT (€m)

y/y and in Automotive Powerise at - 59.9% y/y

% revenue

17.2%	(0.9)%	Powerise revenue development includes new model launches
		- 102.5%	(e.g. Tesla Model Y, VW Teramont X) and export of Powerise
		units (for BMW X3) to China, servicing Asian demand while
15.9
	utilizing Mexican production capacity during OEM shutdowns in

America

(0.4)

Q3 FY19

Q3 FY20

Americas' adj. EBIT at €(0.4)m vs. €15.9m in Q3 FY19

11

Q3 FY2020 - APAC

Revenue (€m)

Comments

y-o-y organically

+ 8.5%

+ 10.0%

Light vehicle production (LVP) in Asia-Pacific in Q3 FY20 at

26.7

8.4m units, i.e. - 22.8% vs. Q3 FY19

24.6

IND

4.0

3.9

APAC's revenue up by €2.1m, + 8.5% y/y (+ 10.0% y/y

6.8

4.3

APR

organically)

AGS

16.3

16.0

Organic revenue development in Q3: Automotive Gas Spring

Q3 FY19

Q3 FY20

- 0.5% y/y, Automotive Powerise + 60.4% y/y due to new model

Adj. EBIT (€m)

launches in Q3 (e.g. Ford Explorer, Ford Aviator, GM Enclave,

% margin

GM XT6, Kia Mohave)

10.1%

16.1%

+ 72.0%

Industrial revenue slightly (€0.1m) below prior year's Q3

4.3

Following strong recovery, adj. EBIT margin improved to 16.1%

2.5

in Q3 FY20 (vs. 10.1% in Q3 FY19)

Q3 FY19

Q3 FY20

12

Q3 FY2020 - Revenue by business unit

Revenue (€m)

	y-o-y organically
						- 39.2%
						- 36.7%
				241.6
		IND	95.5			147.0
		APR	61.5			75.6	- 21.9%
		AGS						28.7	- 44.9%
			84.6
									42.7	- 47.3%
					Q3 FY19	Q3 FY20
				Industrial	Industrial
				40%				51%
						Automotive		Automotive
				60%			49%

Comments

All business units were impacted by COVID-19 crisis and OEM production shutdowns in Q3 - but the automotive business units were impacted to a higher degree

Share of industrial revenue increased from 40% in Q3 FY19 to more than half (51%) of group's total revenue in Q3 FY20, i.e. from 39% in 9M FY19 to 43% in 9M FY20

Diversification of the industrial business had a stabilizing effect; organic revenue decline in the industrial business amounted to

• 21.9% y/y, growth in the e-commerce business, as well as subsegments construction technology, shop equipment, home water carbonation products, partially offsetting weaker development in other subsegments

Global light vehicle production in Q3 FY20 at 12.3m units, i.e. - 44.5% vs. Q3 FY19

13

Amendment of the senior facilities agreement (SFA)

Existing SFA		Amendment of the existing SFA

On July 17, 2016, Stabilus entered into a €640m SFA, comprising €455m term loan facility, €115m equity bridge facility and €70m revolving credit facility

Current status as of June 2020:

Equity bridge facility was fully redeemed in 2016

Term loan facility was voluntarily partly redeemed over the course of the last years, the outstanding nominal amount of this facility: €295m; no further mandatory redemption required in the next years

Revolving credit facility is largely not utilized (€70m -

On July 31, 2020, Stabilus has amended the existing SFA as follows:

Covenant headroom increased: Until December 2021 the permissible net leverage ratio will be above the current threshold of 3.25x EBITDA (up to 4.25x

EBITDA)

New €50m credit line, available until June 2023

As a result, liquidity cushion as of June 2020 vs. Sept 2019 (incl. new credit line from July 2020 on):

€22m drawn = €48m unutilized)

Main SFA covenant: net leverage ratio should not surpass 3.25x EBITDA

209

70

139

Sep 2019

212
50
48	undrawn facilities
114	cash
Jun 2020

14

Agenda

1.

2.

3.

4. Outlook

5.

15

Outlook

Guidance				Comments
	FY2019	FY2020		As of July 16, 2020, global light vehicle production (LVP) in
	Actual	Guidance
				FY2020 (Oct-Sept) is expected to be c. 20% below the prior
				year's level (i.e. c. 72m in FY20 vs. c. 90m in FY19). The return
Revenue	€951.3m	c. €800m		to the annual production level of c. 90m is expected for
				FY2024. (Source: leading forecast institutes, IHS Markit et al.)
				We continue to pursue our long-term strategy STAR 2025
		c. 11%		focusing on sustainable, profitable growth, globalization,
Adj. EBIT margin	15.0%		excellence, innovation as well as team spirit (One Stabilus).The
				currently significantly lower forecasts for global GDP and LVP
				impact our expectations for group's mid-term growth. Based on
				these assumptions, organic revenue CAGR 2019-25 of at least
				6% appears to be uncertain. Stabilus will update its long-term
				forecast at a later point in time.

16

Agenda

1.

2.

3.

4.

5. Appendix

17

Revenue overview (3M ended June 30, 2020)

Revenue (€m)

	Q3 FY2019	Q3 FY2020	Change	% change	Acquisition effect	Currency effect	Organic growth
	Actual	Actual
Automotive Gas Spring	37.8	16.6	(21.2)	(56.1)%	-	0.0%	(56.1)%
Automotive Powerise	24.2	13.5	(10.7)	(44.2)%	-	(1.1)%	(43.1)%
Industrial	62.5	48.0	(14.5)	(23.2)%	1.7%	(0.1)%	(24.8)%
EMEA	124.5	78.1	(46.4)	(37.3)%	0.9%	(0.3)%	(37.9)%
Automotive Gas Spring	30.5	10.2	(20.3)	(66.6)%	-	(5.3)%	(61.3)%
Automotive Powerise	33.0	8.4	(24.6)	(74.5)%	-	(14.6)%	(59.9)%
Industrial	29.0	23.7	(5.3)	(18.3)%	0.5%	0.0%	(18.8)%
AMERICAS	92.5	42.3	(50.2)	(54.3)%	0.2%	(7.0)%	(47.5)%
Automotive Gas Spring	16.3	16.0	(0.3)	(1.8)%	-	(1.3)%	(0.5)%
Automotive Powerise	4.3	6.8	2.5	58.1%	-	(2.3)%	60.4%
Industrial	4.0	3.9	(0.1)	(2.5)%	-	(1.8)%	(0.7)%
APAC	24.6	26.7	2.1	8.5%	-	(1.5)%	10.0%
Total Automotive Gas Spring (AGS)	84.6	42.7	(41.9)	(49.5)%	-	(2.2)%	(47.3)%
Total Automotive Powerise (APR)	61.5	28.7	(32.8)	(53.3)%	-	(8.4)%	(44.9)%
Total Industrial (IND)	95.5	75.6	(19.9)	(20.8)%	1.3%	(0.2)%	(21.9)%
Total	241.6	147.0	(94.6)	(39.2)%	0.5%	(3.0)%	(36.7)%

18

Revenue overview (9M ended June 30, 2020)

Revenue (€m)

	9M FY2019	9M FY2020	Change	% change	Acquisition effect	Currency effect	Organic growth
	Actual	Actual
Automotive Gas Spring	111.6	82.1	(29.5)	(26.4)%	-	0.0%	(26.4)%
Automotive Powerise	73.5	59.4	(14.1)	(19.2)%	-	(1.5)%	(17.7)%
Industrial	177.9	165.2	(12.7)	(7.1)%	6.1%	(0.1)%	(13.1)%
EMEA	363.0	306.7	(56.3)	(15.5)%	3.0%	(0.4)%	(18.1)%
Automotive Gas Spring	89.0	61.8	(27.2)	(30.6)%	-	(0.6)%	(30.0)%
Automotive Powerise	97.5	70.5	(27.0)	(27.7)%	-	(3.4)%	(24.3)%
Industrial	82.0	83.0	1.0	1.2%	0.8%	2.0%	(1.6)%
AMERICAS	268.5	215.3	(53.2)	(19.8)%	0.2%	(0.8)%	(19.2)%
Automotive Gas Spring	49.5	48.3	(1.2)	(2.4)%	-	(0.1)%	(2.3)%
Automotive Powerise	12.7	17.1	4.4	34.6%	-	(0.7)%	35.3%
Industrial	12.1	12.0	(0.1)	(0.8)%	-	(0.7)%	(0.1)%
APAC	74.3	77.4	3.1	4.2%	-	(0.3)%	4.5%
Total Automotive Gas Spring (AGS)	250.1	192.2	(57.9)	(23.2)%	-	(0.2)%	(23.0)%
Total Automotive Powerise (APR)	183.6	147.0	(36.6)	(19.9)%	-	(2.4)%	(17.5)%
Total Industrial (IND)	272.0	260.2	(11.8)	(4.3)%	4.3%	0.5%	(9.1)%
Total	705.7	599.4	(106.3)	(15.1)%	1.6%	(0.5)%	(16.2)%

19

P&L overview (3M ended June 30, 2020)

P&L (€m)						Comments
	Q3 FY2019	Q3 FY2020	Change	% change		Selling expenses up by €21.7m due to one-off,non-cash write-
	Actual	Actual
Revenue	241.6	147.0	(94.6)	(39.2)%		down (impairment) of customer relationships in aerospace
	business, as a result of the negative effect of the COVID-19
Cost of sales	(172.8)	(112.6)	60.2	(34.8)%
	pandemic on the segment
Gross Profit	68.9	34.4	(34.5)	(50.1)%
% margin	28.5%	23.4%				The impairment on intangible assets amounted to €25.7m,
R&D expenses	(9.2)	(8.9)	0.3	(3.3)%
	€24.4m are included in selling expenses and €1.3m in the cost
Selling expenses	(21.0)	(42.7)	(21.7)	>100.0%
	of sales
Administrative expenses	(8.3)	(7.6)	0.7	(8.4)%
Other income/expenses	(0.8)	3.0	3.8	<(100.0)%		Income taxes up by €15.2m, particularly due to deferred taxes
EBIT	29.5	(21.8)	(51.3)	<(100.0)%
	on the impairment of intangible assets
% margin	12.2%	(14.8)%
Finance income/costs	(2.9)	(2.5)	0.4	(13.8)%		IFRS 16 impact: Recognition of all leases in the balance sheet
EBT	26.6	(24.3)	(50.9)	<(100.0)%
	leads to depreciation (instead of leasing expenses) in the same
% margin	11.0%	(16.5)%
			functional costs and in similar magnitude, i.e. there is no
Income tax	(7.3)	7.9	15.2	<(100.0)%
	significant impact from IFRS 16 on the functional costs; interest
Profit	19.3	(16.4)	(35.7)	<(100.0)%
	expense from leases amounted to €0.4m in Q3 FY20 ( =
% margin	8.0%	(11.2)%
			positive effect on Q3 FY20's EBIT)
EPS in €	0.79	(0.59)	(1.40)	<(100.0)%

20

EBIT adjustments (3M ended June 30, 2020)

Adjusted EBIT (€m)						Comments
	Q3 FY2019	Q3 FY2020	Change	% change		The €25.7m adjustment relates to non-cash impairment on
	Actual	Actual
EBIT	29.5	(21.8)	(51.3)	<(100.0)%		intangibles assets (customer relationships), as a result of the
	negative effect of the COVID-19 pandemic on the aerospace
PPA adj. - impairment	-	25.7	25.7	n/a
	business
PPA adj. - D&A (2010 PPA)	2.3	1.7	(0.6)	(26.1)%
PPA adj. - D&A (2016 PPA)	2.1	2.1	-	0.0%		PPA adjustments comprise depreciation and amortization of
PPA adj. - D&A (2019 PPA)	1.4	0.7	(0.7)	(50.0)%
	step-ups and intangible assets acquired during 2010, 2016
Environmental protection	1.5	-	(1.5)	(100.0)%
	and 2019 acquisitions
Advisory costs (M&A)	0.2	-	(0.2)	(100.0)%
PPA adj. - purchase price GA	-	(2.8)	(2.8)	n/a		Environmental protection adjustment in Q3 of the previous
Total adjustments	7.6	27.5	19.9	>100.0%
	fiscal year is for remediation costs in the US during 2019 (EPA
Adjusted EBIT	37.1	5.7	(31.4)	(84.6)%
	/ Colmar)
						Advisory costs (M&A) in Q3 of the previous fiscal year relate to
						2019 acquisitions
						Purchase price adjustment of €(2.8)m relates to the General
						Aerospace acquisition; the price adjustment is a consequence
						of the earn-out clause in connection with the negative impact of
						the COVID-19 pandemic on the aerospace business

21

P&L overview (9M ended June 30, 2020)

P&L (€m)							Comments
	9M FY2019		9M FY2020	Change	% change		Capitalized R&D expenses in 9M FY20 at €12.4m (vs. €9.7m in
	Actual		Actual
Revenue	705.7		599.4	(106.3)	(15.1)%		9M FY19), due to expansion of Powerise product family
Cost of sales	(503.0)		(433.7)	69.3	(13.8)%		Increase in selling expenses results primarily from impairment
Gross Profit	202.6		165.7	(36.9)	(18.2)%
							loss on intangibles assets (customer relationship) in the
% margin	28.7%		27.6%
				aerospace business
R&D expenses	(28.9)		(30.4)	(1.5)	5.2%
Selling expenses	(62.3)		(86.7)	(24.4)	39.2%		IFRS 16 impact: Recognition of all leases in the balance sheet
Administrative expenses	(26.3)		(26.0)	0.3	(1.1)%
		leads to depreciation (instead of leasing expenses) in the same
Other income/expenses	1.5		7.5	6.0	>100.0%
		functional costs and in similar magnitude, i.e. there is no
EBIT	86.7		30.1	(56.6)	(65.3)%
		significant impact from IFRS 16 on the functional costs; interest
% margin	12.3%		5.0%
				expense from leases amounted to €1.1m in 9M FY20 ( =
Finance income/costs	(6.0)		(3.3)	2.7	(45.0)%
		positive effect on 9M FY20's EBIT)
EBT	80.7		26.8	(53.9)	(66.8)%
% margin	11.4%		4.5%
Income tax	(23.3)		(8.7)	14.6	(62.7)%
Profit	57.4		18.1	(39.3)	(68.5)%
% margin	8.1%		3.0%
EPS in €	2.33		0.79	(1.54)	(66.1)%

22

EBIT adjustments (9M ended June 30, 2020)

Adjusted EBIT (€m)						Comments
	9M FY2019	9M FY2020	Change	% change		The €25.7m adjustment relates to non-cash impairment on
	Actual	Actual
EBIT	86.7	30.1	(56.6)	(65.3)%		intangibles assets (customer relationships), as a result of the
	negative effect of the COVID-19 pandemic on the aerospace
PPA adj. - impairment	-	25.7	25.7	n/a
	business
PPA adj. - D&A (2010 PPA)	7.0	5.2	(1.8)	(25.7)%
PPA adj. - D&A (2016 PPA)	6.3	6.3	-	0.0%		PPA adjustments comprise depreciation and amortization of
PPA adj. - D&A (2019 PPA)	1.4	2.3	0.9	64.3%
	step-ups and intangible assets acquired during 2010, 2016
Environmental protection	1.5	-	(1.5)	(100.0)%
	and 2019 acquisitions
Advisory costs (M&A)	0.7	-	(0.7)	(100.0)%
PPA adj. - purchase price GA	-	(2.8)	(2.8)	n/a		Environmental protection adjustment in 9M of the previous
Total adjustments	16.8	36.7	19.9	>100.0%
	fiscal year is for remediation costs in the US during 2019 (EPA
Adjusted EBIT	103.5	66.8	(36.7)	(35.5)%
	/ Colmar)
						Advisory costs (M&A) in 9M of the previous fiscal year relate to
						2019 acquisitions
						Purchase price adjustment of €(2.8)m relates to the General
						Aerospace acquisition; the price adjustment is a consequence
						of the earn-out clause in connection with the negative impact of
						the COVID-19 pandemic on the aerospace business

23

Balance sheet overview

Balance sheet (€m)						Comments
	Sept 2019	June 2020	Change	% change		First time adoption of the IFRS 16 in FY2020 (from Oct 1, 2019
	Actual	Actual
Property, plant and equipm.	199.9	234.8	34.9	17.5%		on, recognition of all leases in the balance sheet) led to an
	increase of PPE and other liabilities by €43.7m; as of June
Goodwill	214.8	211.3	(3.5)	(1.6)%
	2020, change in PPE at €34.9m, primarily due to scheduled
Other intangible assets	276.2	236.0	(40.2)	(14.6)%
	depreciation; change in other liabilities at €27.8m (June 2020
Inventories	100.3	103.1	2.8	2.8%
	vs. Sept 2019)
Trade receivables	130.3	93.9	(36.4)	(27.9)%
Other assets	38.7	49.9	11.2	28.9%		Decrease in other intangible assets by €40.2m comprises
Cash	139.0	114.0	(25.0)	(18.0)%		scheduled amortization and impairment loss (mainly on
Total assets	1,099.2	1,043.0	(56.2)	(5.1)%		customer relationships in aerospace business), partially offset
						by capitalized development costs
Equity incl. minorities	499.6	469.5	(30.1)	(6.0)%		Trade receivables and payables decreased due to lower
Debt (incl. accrued interest)	311.6	315.4	3.8	1.2%
Pension plans	59.9	53.8	(6.1)	(10.2)%		business activity; slightly higher inventory as of June 2020 in
	order to reduce supplier induced risks
Deferred tax liabilities	55.9	45.5	(10.4)	(18.6)%
Trade accounts payable	91.0	49.7	(41.3)	(45.4)%		Pension liability decreased by €6.1m as a consequence of
Other liabilities	81.2	109.0	27.8	34.2%
	higher discount rate (0.93% as of Sept 2019 vs. 1.53% as of
Total equity and liabilities	1,099.2	1,043.0	(56.2)	(5.1)%
	June 2020)
Net leverage ratio	1.0x	1.4x

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Cash flow overview (3M ended June 30, 2020)

	Cash Flow Statement (€m)							Comments
		Q3 FY2019	Q3 FY2020	Change	% change			Capex in Q3 FY20 at €14.5m (vs. €12.8m in Q3 FY19),
		Actual	Actual
	Cash flow from operating activities	44.2	8.5	(35.7)	(80.8)%			+ 13.3% y/y, inter alia for the new Pinghu Powerise plant
	Cash flow from investing activities	(52.1)	(14.5)	37.6	(72.2)%
	Cash flow from financing activities	(1.2)	(2.7)	(1.5)	>100.0%			Cash outflow for investing activities in Q3 of the previous year
	Net increase / (decrease) in cash	(9.1)	(8.7)	0.4	(4.4)%
			FY19 includes payments for acquisitions amounting to €39.3m
	Effect of movements in exchange rates	(1.2)	0.1	1.3	<(100.0)%
	Cash as of beginning of the period	136.5	122.7	(13.8)	(10.1)%
	Cash as of end of the period	126.2	114.0	(12.2)	(9.7)%			IFRS 16 impact in Q3 FY20: no impact on net cash flow,
								positive effect of €2.4m on cash flow from operating activities
								(and consequently free cash flow) and negative effect on cash
	Adj. FCF (€m)
							flow from financing activities in the same amount
		Q3 FY2019	Q3 FY2020	Change	% change
		Actual	Actual			Adjustment to FCF in Q3 of the previous year FY19 amounting
	Cash flow from operating activities	44.2	8.5	(35.7)	(80.8)%
			to €39.9m relates to acquisition of assets and liabilities within
	Cash flow from investing activities	(52.1)	(14.5)	37.6	(72.2)%
								business combination, net of cash acquired (General
	Free cash flow	(7.9)	(6.0)	1.9	(24.1)%
	Adjustments	39.3	-	(39.3)	(100.0)%			Aerospace, Clevers and Piston)
	Adj. FCF	31.4	(6.0)	(37.4)	<(100.0)%

As of June 2020, €3.5m subsidies for German short-time work were outstanding, i.e. in Q3 cash flow not included

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Cash flow overview (9M ended June 30, 2020)

Cash Flow Statement (€m)						Comments
	9M FY2019	9M FY2020	Change	% change		Capex in 9M FY20 at €37.7m (vs. €42.6m in 9M FY19),
	Actual	Actual
Cash flow from operating activities	92.3	52.1	(40.2)	(43.6)%		- 11.5% y/y
Cash flow from investing activities	(81.2)	(38.4)	42.8	(52.7)%		Cash outflow for investing activities in 9M of the previous year
Cash flow from financing activities	(28.4)	(35.7)	(7.3)	25.7%
Net increase / (decrease) in cash	(17.3)	(22.0)	(4.7)	27.2%		FY19 includes payments for acquisitions amounting to €39.3m
Effect of movements in exchange rates	0.5	(3.0)	(3.5)	<(100.0)%		Cash outflow for financing activities in 9M FY20 increased by
Cash as of beginning of the period	143.0	139.0	(4.0)	(2.8)%
Cash as of end of the period	126.2	114.0	(12.2)	(9.7)%		€7.3m y/y, primarily due to higher payments for lease liabilities
						and interest, as a result of IFRS 16 adoption (see below)
						IFRS 16 impact in 9M FY20: no impact on net cash flow,
Adj. FCF (€m)
						positive effect of €7.3m (€2.4m in Q1 FY20, €2.5m in Q2 FY20,
	9M FY2019	9M FY2020	Change	% change		€2.4m in Q3 FY20) on cash flow from operating activities (and
	Actual	Actual		consequently free cash flow) and negative effect on cash flow
Cash flow from operating activities	92.3	52.1	(40.2)	(43.6)%		from financing activities in the same amount
Cash flow from investing activities	(81.2)	(38.4)	42.8	(52.7)%
						Adjustments to FCF relate to acquisition of assets and liabilities
Free cash flow	11.1	13.7	2.6	23.4%
Adjustments	39.3	1.1	(38.2)	(97.2)%		within business combination, net of cash acquired
Adj. FCF	50.4	14.8	(35.6)	(70.6)%

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Currency exchange rates overview (9M ended June 30, 2020)

Closing and average currency exchange rates

1 EURO in	ISO code	Closing rate	Closing rate	Average rate	Average rate	Average rate
June 2019	June 2020	9M FY2019	9M FY2020	% change
Australian dollar	AUD	1.6244	1.6344	1.5967	1.6584	3.9%
Argentine peso	ARS	48.5926	78.7852	45.3538	69.2517	52.7%
Brazilian real	BRL	4.3511	6.1118	4.3430	5.1314	18.2%
Chinese yuan (renminbi)	CNY	7.8185	7.9219	7.7420	7.7653	0.3%
South Korean won	KRW	1,315.3500	1,345.8300	1,292.1612	1,320.2001	2.2%
Mexican peso	MXN	21.8201	25.9470	21.9793	23.0128	4.7%
Romanian leu	RON	4.7343	4.8397	4.7147	4.8006	1.8%
Turkish lira	TRY	6.5655	7.6761	6.3300	6.9065	9.1%
United States dollar	USD	1.1380	1.1198	1.1336	1.1034	(2.7)%

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