Novem Group S.A.: Preliminary results 2022/23 show strong revenue growth in difficult market conditions

Novem S.A.: Preliminary results 2022/23 show strong revenue growth in difficult market conditions

• FY 2022/23 revenue of €700.3 million, +14.0% above FY 2021/22
• FY 2022/23 Adj. EBIT¹ of €81.7 million, +1.0% above FY 2021/22
• Solid full year profit margin of 11.7% despite persistent headwinds

Luxembourg, 1 June 2023 – Novem Group S.A. today published its preliminary results for its financial year 2022/23, including the figures for the fourth quarter. In the past 12 months, the Company performed well with an Adj. EBIT margin of 11.7%, despite continued difficult trading conditions. Backed by strong revenue in Q4, Novem generated revenue of €700.3 million in FY 2022/23, which corresponds to a growth of 14.0% year-on-year.

Strongest quarter to end FY 2022/23

In the last quarter of FY 2022/23, total revenue came in at €174.1 million and outperformed last year by 9.3%. With revenue Series of €162.5 million and growth of 8.4% year‑on‑year, Q4 was the strongest quarter in the financial year 2022/23. This is also underpinned by the latest LMC market data, which showed a noticeable increase in LVP from 20.0 million to 21.3 million units (+6.8% year-on-year). Revenue Tooling recorded at €11.6 million, ahead of last year (+23.4%) due to the closure of several projects. Adjusted for currency effects, organic growth for the full year would have come in at 8.9%.

On a regional basis, buoyant revenue growth in Q4 2022/23 was driven by Asia (+60.2% year-on-year) and Americas (+16.5% year-on-year), while Europe (-6.5% year-on-year) showed a slight decline. The lower revenue in Europe was due to Tooling, poor customer call-offs and the phase-out of certain platforms. Growth in Americas was supported by positive currency effects from the US Dollar and continued strong demand for SUVs. The sharp rise in Asia resulted from increased revenue Tooling and the ramp-up of new programs.

Adj. EBIT in Q4 2022/23 of €21.2 million remained stable compared to last year, while the profit margin of 12.2% improved sequentially but could not reach previous year’s level of 14.0%. Bottom line was again affected by higher material prices, to some extent driven by distressed suppliers as well as energy and freight costs. However, further customer compensation payments could partly offset the negative impact of inflation.

Outstanding cash flow in FY 2022/23

For the financial year 2022/23, free cash flow¹ recorded at €84.5 million and exceeded previous year by almost one third. In addition, Novem reported a strong cash conversion¹ of 74.0% (Adj. EBITDA / FCF), despite difficult trading conditions. In the last quarter of 2022/23, Novem generated strong free cash flow of €39.6 million. Cash flow from operating activities made the largest contribution due to lower inventories, deferred taxes and provisions.

Lower capital expenditure

In the fourth quarter of 2022/23, capital expenditure¹ of €5.7 million came in well below previous year of €8.4 million. Due to the lower investments, the underlying capex ratio of 3.3% of revenue also fell behind last year’s level (PY: 5.2%). For the whole financial year, Novem made overall investments of €17.9 million, almost evenly distributed across all quarters.

Lowest net leverage ratio since IPO

At the end of FY 2022/23, gross financial debt¹ stood at previous year’s level with €288.5 million, while cash balances increased considerably. Net financial debt¹ as of 31 March 2023 recorded at €123.0 million and strengthened sequentially over last year (€165.6 million). This resulted in a net leverage ratio¹ of 1.1x, which marks the lowest level since the new financing following the IPO in July 2021. Once again, Novem has proven the ability to deleverage its balance sheet even under difficult trading conditions.

An accompanying presentation on the preliminary FY 2022/23 results can be found on the Investor Relations website under Reports & Presentation. This press release contains unaudited financial information, which may be subject to change. The final figures and the Annual Report for the financial year 2022/23 will be published on 29 June 2023 on our Investor Relations website.

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1   For the definition/calculation of the used Alternative Performance Measures (APMs), please refer to the glossary provided in the corresponding presentation on the preliminary results of financial year 2022/23, which can be found on the Investor Relations website under Reports & Presentation.

About Novem

Luxembourg-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.

For more information, please visit www.novem.com.