Novem Group S.A.: Q1 revenue marks dynamic start into FY 2022/23

• Q1 2022/23 revenue of €181.9 million, +16.5% above Q1 2021/22
• Adj. EBIT of €21.4 million, -17.1% below PY
• Market remains difficult due to inflationary pressures and inefficiencies as well as customer plant shutdowns in China

Luxembourg, 18 August 2022 – Novem Group S.A. today published its figures for the first quarter of its financial year 2022/23. Despite facing a number of headwinds, Novem generated total revenue of €181.9 million, +16.5% compared to the same period last year.

Continued revenue growth despite challenging market conditions

Both revenue Series and Tooling increased in the first quarter year-on-year. With an increase of 5.8% year-on-year, revenue Series at €151.9 million was anchored on decent underlying growth. Meanwhile, latest available LMC figures showed a slight increase of 1.4% year-on-year in light vehicle production. Tooling revenue saw a significant rise from €12.5 million to €30.0 million in the period under review due to the closure of major projects. Adjusted for currency effects, primarily from Americas and Asia, revenue would have been -4.9% lower.

From a geographical perspective, revenue increased in all regions. Europe saw the most substantial increase with €13.8 million (+17.3% year-on-year), primarily driven by Tooling. The sharp rise in Americas (+14.5% year-on-year) was directly linked to Series and strongly supported by a positive FX impact from the USD. The favourable deviation in Asia (+18.6% year-on-year) was mainly attributable to Tooling, whilst Series was significantly affected by several customer plant shutdowns relating to China’s zero-Covid policy.

For the period under review, Adj. EBIT declined by €-4.4 million resulting in a margin of 11.8%. This decrease was largely caused by higher input costs and inefficiencies due to volatile customer call-offs (stop-and-go approach). Price increases for certain raw materials as well as soaring energy and logistics expenses also continued to impact bottom line.

Increased working capital led to slightly negative free cash flow

As of 30 June 2022, total working capital recorded well above last year at €154.8 million (+9.8% year-on-year). The variance of €-13.8 million year-on-year is due to higher trade receivables (€-9.4 million), increased tooling net (€-6.7 million), higher stock (€-4.3 million) and contract assets (€-0.7 million). Conversely, Novem posted higher trade payables (€+7.2 million) as of 30 June 2022.

Driven mainly by increased working capital requirements, free cash flow of €-2.5 million in Q1 2022/23 turned slightly negative and came down by €-12.6 million from previous year. While cash flow from investing activities remained almost on last year’s level, cash flow from operating activities was €-13.2 million lower.

Increased capital expenditure

Capital expenditure of €3.7 million in Q1 2022/23 exceeded last year's level by 82.0%. As a result of the higher investments, the underlying capex ratio rose from 1.3% last year to 2.1% of revenue. As previously reported, the takeover of the Faurecia aluminium business implied higher capex last year, notably in Q4 2021/22. Q1 2022/23 contained a remaining impact of €1.1 million.

Improved leverage ratio

As of 30 June 2022, both gross financial debt and cash declined considerably in comparison to the previous year. Principal sources of funds consisted of €111.6 million cash and cash equivalents (30 June 2021: €177.8 million) and €40.6 million non-recourse factoring (30 June 2021: €48.5 million). Net financial debt as of 30 June 2022 amounted to €170.3 million and showed a sharp decrease versus 30 June 2021 (€253.9 million). As a result, Novem could successfully de-lever its balance sheet through the post-IPO refinancing. Since then, the net leverage ratio oscillated at a solid level of around 1.6x.

The quarterly statement for the first quarter of financial year 2022/23 can be found at the Investor Relations website at .

About Novem

German-headquartered Novem is a globally leading supplier of decorative interior trim parts for the premium automotive industry. Across the range of key materials such as genuine wood, aluminium, carbon and premium synthetics, the Company offers unrivalled quality, technology and innovation to a growing customer base including all major premium carmakers worldwide. Founded in Vorbach, Germany, back in 1947, the Company has continuously expanded its global footprint in Germany, Italy, Czech Republic, Slovenia, China, USA, Honduras and Mexico. Novem employs about 5,440 people at 12 locations and achieved revenue of around €615 million in FY 2021/22.

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