Stabilus SE achieves revenue growth of 13.1% in Q3 FY2023 and specifies guidance within forecasted range

CORPORATE NEWS

Stabilus SE achieves revenue growth of 13.1% in Q3 FY2023 and specifies guidance within forecasted range

• Revenue growth of 13.1% to €306.5 million in Q3 FY2023 (Q3 FY2022: €271.1 million)
• Profitability gradually increased in FY2023: Adjusted EBIT^[1] in Q3 at €41.9 million, after €37.9 million in Q3 FY2022
• Q3 result at €21.7 million (Q3 FY2022: €24.3 million) and free cash flow before acquisitions (adj. FCF^[1]) at €48.3 million (Q3 FY2022: €26.8 million)
• Outlook for FY2023 specified within the forecasted range to revenue of €1.2 billion with an adjusted EBIT^[1] margin of 13.0%
• Increase in the stake in Cultraro Group to 60%
• Strategy for the future of Koblenz site plans for investments totaling €10 million, in order to increase efficiency and the level of automation

Koblenz, July 31, 2023 – Stabilus SE (WKN: STAB1L, ISIN: DE000STAB1L), one of the world's leading suppliers of motion control solutions for a wide range of industries, today published its quarterly statement for the third quarter of fiscal year 2023 (Q3 ended June 30, 2023). Once again, the company was able to sustain its growth. In addition, Stabilus has also set the course for the future development of the company with a strategy for the future of the Koblenz site and the increase of its stake in the Cultraro Group.

Group revenue in the third quarter of FY2023 increased by 13.1% year-on-year to €306.5 million (Q3 FY2022: €271.1 million). Adjusted for currency effects, Group revenue increased by 13.7%.

Dr. Michael Büchsner, CEO of Stabilus, said: "In the third quarter, we were once again able to achieve significant growth in all market segments, and compared to the previous quarters of the current fiscal year also increased our adjusted EBIT margin to 13.7%. In particular, the Powerise and Industrial business units continue to outperform global vehicle production and GDP growth. At the same time, we have set the course for our company’s future development. As part of our concept on the future of the Koblenz site, we are investing €10 million in the modernization and automation of our main plant. Furthermore, by increasing our stake in the Cultraro Group to 60%, we are expanding our cooperation with the specialist for small-format motion control solutions."

All regions contribute to revenue growth in Q3 FY2023

In EMEA, revenue in Q3 FY2023 increased by 9.7% to €129.9 million (Q3 FY2022: €118.4 million). In the Americas, revenue grew by 12.6% year-on-year to €109.9 million (Q3 FY2022: €97.6 million). In Asia-Pacific (APAC), the company again recorded above-average revenue growth of 21.1% year-on-year to €66.7 million (Q3 FY2022: €55.1 million). In particular, the EMEA and Asia-Pacific regions benefited from strong organic growth rates of 27.5% and 42.2%, respectively, in the Automotive Powerise business.

Automotive Powerise continued to grow at a faster rate than vehicle production

By business unit, Stabilus recorded double-digit revenue growth in both the Automotive Gas Spring and Automotive Powerise business units in the third quarter of fiscal year 2023. In the Automotive Powerise business unit, which was once again significantly decoupled from global light vehicle production (+15.5% compared to Q3 FY2022) in the reporting period, revenue rose by 22.5% to €108.5 million in Q3 FY2023 (Q3 FY2022: €88.6 million). In the Automotive Gas Spring business unit, the company recorded an increase of 12.5% to €86.5 million (Q3 FY2022: €76.9 million). Revenue in the Industrial business unit increased by 5.6% in Q3 FY2023 to €111.5 million compared to the same quarter of the previous year (Q3 FY2022: €105.6 million). Stabilus recorded the strongest development in the market segments Energy, Construction, Industrial Machinery & Automation (ECIMA) and Distributors, Independent Aftermarket, E-Commerce (DIAMEC) and Mobility.

Adjusted EBIT margin of 13.7% in the third quarter

Adjusted operating result (adjusted EBIT^[1]) increased by 10.6% to €41.9 million in Q3 FY2023 (Q3 FY2022: €37.9 million). This corresponds to an adjusted EBIT margin of 13.7% (Q3 FY2022: 14.0%). In the current fiscal year, the adjusted EBIT margin has thus increased continuously from 11.2% in Q1 FY 2023 and 13.1% in Q2 FY 2023.

In Q3 FY2023, profit was €21.7 million, which was below the figure for the same quarter of the previous year (Q3 FY2022: €24.3 million), mainly due to currency effects. Free cash flow before acquisitions (adj. FCF^[1]) benefited from positive effects in working capital as well as tax effects and, at €48.3 million, was significantly higher than in the previous year (Q3 FY2022: €26.8 million).

Earnings guidance for FY2023 specified within forecasted range

Stabilus has specified its earnings guidance within the forecasted range and for the 2023 fiscal year now expects revenue of €1.2 billion (at the upper end of the range) with an adjusted EBIT margin of 13.0% (at the lower end of the range). This corresponds to adjusted EBIT of €156 million, which is above the original expectation of €155 million in the middle of the previous forecast range (revenue of €1.1 - 1.2 billion; adjusted EBIT margin of 13-14%).

Increase of the stake in Cultraro Group to 60%

After Stabilus acquired 32% of Cultraro Group, a specialist in small-format motion control solutions, in November 2021, a further 28% of the shares were acquired in July 2023 for a total purchase price of €14.6 million (including earn-out). Stabilus also has a preemptive right for the purchase of the remaining 40% of the shares.

In line with the STAR 2030 strategy, the Stabilus Group is thus expanding its range of small-format motion control solutions for both industrial and automotive customers. Due to the full consolidation effective Q4 FY2023, the transaction will be margin accretive for the Stabilus Group. In fiscal year 2022, Cultraro achieved an EBIT margin of 20.5% on revenue of €16.0 million. Stabilus anticipates double-digit revenue growth rates for Cultraro's business in the coming years with an EBIT margin of more than 20%, as well as revenue synergies of up to €5 million in 2025.

Investments in the future of the main plant in Koblenz

In order to maintain the competitiveness and increase the efficiency of the main plant in Koblenz, Stabilus will invest around €10 million in the modernization and automation of the site. This is accompanied by lower personnel requirements, which results in an adjustment of the workforce in production in Koblenz. Stabilus is already employing around 10% fewer employees at this site than in fiscal year 2022. By FY2025, the number of employees is to be reduced by a further 15% compared to FY2023. This reduction will take place in a socially responsible manner through natural fluctuation and, for the most part, through retirement. To this end, in July 2023 Stabilus has agreed on a future collective agreement with IG Metall which will be resolved by the collective bargaining commission in the next days. In the coming years, the company will modernize the production areas and invest in additional state-of-the-art machinery, which will be set up in such a way as to reduce production distances and heavy manual labor. In addition, all on-site service functions such as logistics, maintenance and servicing will be realigned. The aim is to further increase the degree of automation, maintain market and cost leadership, and increase the site's competitiveness and future viability.

Dr. Michael Büchsner, CEO of Stabilus, said: “Koblenz is the heart and engine of our Group, which is why we want to make the site fit for the future in a timely and effective manner and invest in it. Unfortunately, this is not possible without adjustments in the workforce, which we can fortunately guarantee without compulsory redundancies. Of course, we will continue to offer trainee programs and plan to offer our successfully qualified trainees permanent employment contracts to the usual extent in the future. Stabilus Koblenz is and will remain the main plant and competence center of the Stabilus Group in the field of product and process development. As automation and digitalization continue to increase, our demand for highly qualified specialists in the fields of mechatronics, electronics and software development will not decrease, but will instead remain high.”

The quarterly statement for the third quarter of fiscal 2023 can be downloaded on the company's website at Investors / Financial Reports & Presentations.

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^[1] Cf. definition/calculation of KPI’s adjusted EBIT and free cash flow before acquisitions (adj. FCF) in the Q3 FY2023 quarterly statement, pp. 17 and 20, on our corporate website at Investors / Financial Reports & Presentations.

Investor contact:
Andreas Schröder
Tel.: +49 261 8900 8198
E-Mail: anschroeder@stabilus.com

Press contact:
Peter Steiner
Tel.: +49 69 794090 27
E-Mail: stabilus@charlesbarker.de
Charles Barker Corporate Communications

About Stabilus

Stabilus is one of the world's leading providers of motion control solutions for customers across a broad spectrum of industries including mobility, health, recreation, furniture, energy, construction, industrial machinery and automation. With more than eight decades of demonstrated expertise, Stabilus offers reliable and innovative motion control solutions that enable, enhance and automate opening, closing, lifting, lowering and adjusting actions. The company's customized damping and vibration isolation technology protects against shocks, vibrations and noise. Employing a workforce of more than six thousand in eleven countries worldwide, the company has its operational headquarters in Koblenz, Germany and has reported revenue of €1.1 billion in fiscal year 2022. Stabilus has a global production network encompassing plants in eleven countries. Additionally, the Group maintains regional offices and relations to sales partners in over fifty countries in Europe, North and South America, as well as in Asia-Pacific. Stabilus SE is listed in the Prime Standard segment of the Frankfurt Stock Exchange and included in the MDAX index.

Important Notice

This press release may contain forward-looking statements based on current assumptions and forecasts made by Stabilus Group management and other information currently available to Stabilus. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here.