WORLDWIDE
A N N U A L R E P O R T 2 0 1 8
A N N U A L R E P O R T 2 0 1 8
IN EUR MILLIONS
Revenue
EBIT
Adjusted EBIT
Profit for the period
Capital expenditure
Free cash flow (FCF)
EBIT as % of revenue
Adjusted EBIT as % of revenue
Profit in % of revenue
Capital expenditure as % of revenue
FCF in % of revenue
Net leverage ratio
Revenue by region
(Location of Stabilus company)
51
13
36
51%
36%
13%
Europe
NAFTA
Asia / Pacific and RoW
CHANGE
% CHANGE
52.6
13.5
11.7
26.2
(2.4)
22.4
5.8%
11.4%
8.5%
33.1%
5.3%
28.8%
Year ended Sept 30,
2018
962.6
131.9
149.3
105.4
(47.5)
100.2
13.7%
15.5%
10.9%
4.9%
10.4%
1.1x
2017
910.0
118.4
137.6
79.2
(45.1)
77.8
13.0%
15.1%
8.7%
5.0%
8.5%
1.5x
Revenue by market
3
35
11
37
63
28
Automotive Business
Automotive Gas Spring
Automotive Powerise®
Industrial Business
Industrial / Capital Goods
Vibration & Velocity Control
Commercial Furniture
23
63%
35%
28%
37%
23%
11%
3%
S E I Z I N G O P P O R T U N I T I E S W O R L D W I D E
S T A B I L U S
MOTION
CONTROL
As one of the world’s leading providers of gas
springs, dampers and electromechanical drives, we
have been showing our prowess for eight decades –
in the automobile industry, mechanical engineering,
shipping, aviation, renewable energies and a host
of other sectors such as the furniture segment and
building services engineering. With our gas springs,
dampers and electromechanical Powerise® drives,
we optimize opening, closing, lifting, lowering and
adjusting actions from deep sea to outer space.
01
S E I Z I N G O P P O R T U N I T I E S W O R L D W I D E
S T A B I L U S
FOOTPRINT
N
A
F
T
A
Mexico Ramos Arizpe
USA Stoughton / MA
USA Sterling Heights / MI
USA Farmington Hills / MI
USA Schaumburg / IL
USA Miamisburg / OH
USA Gastonia / NC
02
E
U
R
O
P
E
Germany Aichwald
Germany Büttelborn
Germany Koblenz
Germany Langenfeld
Luxembourg Luxembourg
Italy Turin
France Poissy
UK Banbury
UK Haydock
Spain Derio
Romania Brasov
Russia Moscow
S E I Z I N G O P P O R T U N I T I E S W O R L D W I D E
S T A B I L U S
S E I Z I N G O P P O R T U N I T I E S W O R L D W I D E
S T A B I L U S
A
S
I
A
&
R
O
W
P
A
C
I
F
I
C
South Korea Uiwang
South Korea Busan
Singapore Singapore
China Changzhou
China Shanghai
Japan Yokohama
New Zealand Auckland
Australia Dingley
Brazil Itajubá
03
S E I Z I N G O P P O R T U N I T I E S W O R L D W I D E
S T A B I L U S
TO OUR SHAREHOLDERS
CONSOLIDATED FINANCIAL STATEMENTS
06 Letter from the Chief Executive Offi cer
08 Report of the Supervisory Board
10
20 Stabilus Share
In the Region, for the Region
COMBINED MANAGEMENT REPORT
25 General
25 Strategy
27 Business and General Environment
29 Results of Operations
33 Development of Operating Segments
34 Financial Position
36 Liquidity
39 Statutory Results of Operations and
Financial Position of Stabilus S. A.
39 Risks and Opportunities
46 Corporate Governance
48 Subsequent Events
48 Outlook
51 Consolidated Statement of Comprehensive Income
52 Consolidated Statement of Financial Position
54 Consolidated Statement of Changes in Equity
55 Consolidated Statement of Cash Flows
56 Notes to the Consolidated Financial Statements
120 Responsibility Statement
121 Management Board of Stabilus S. A.
122 Supervisory Board of Stabilus S. A.
Independent Auditor’s Report
123
ANNUAL ACCOUNTS
130 Balance Sheet
132 Profi t and Loss Account
133 Notes to the Annual Accounts
141 Responsibility Statement
142
Independent Auditor’s Report
ADDITIONAL INFORMATION
148 Financial Calendar
148 Disclaimer
149 Table Directory
151
Information Resources
04
S E I Z I N G O P P O R T U N I T I E S W O R L D W I D E
S T A B I L U S
P A G E 0 5 – 2 2
SHARE
HOLDERS
CEO
Dear Shareholders,
Customers, Business
Partners, Employees,
Ladies and
Gentlemen
We look back to a successful fiscal year in which we
increased revenue by 5.8% to around €963 million
and achieved an adjusted EBIT margin of 15.5%.
This result is fully in line with our outlook for the
2018 fiscal year. We have seen solid and profitable
growth and demonstrated our strong performance
in a heterogeneous market environment. This puts
us on track to achieve the vision set out in the STAR
2025 strategy and become the world’s leading com-
pany for motion-control solutions by 2025.
The global megatrends such as demographic change,
higher standards of living and greater demand for
comfort as well as rising health and safety require-
ments are the underlying growth drivers and con-
tinue to provide further growth potential for our
innovative applications in the automotive and
industrial sectors. Our gas springs and dampers
business is just as crucial for our success as new
solutions in the industrial sector and the marketing
of our electromechanical Powerise®.
Our revenue in the automotive business rose 4.6%
to €610.6 million in the 2018 fiscal year. The steady
global trend towards SUVs, crossovers, MPVs and
06
STABILUSTO OUR SHAREHOLDERS hatchback cars was a key driver of growth and the
Powerise® technology is proving to be a lasting
success. For the record – we continue to grow faster
than the global automotive market.In the industrial
business we achieved 7.9% growth to €352.0 mil-
lion. The successful integration of ACE, Hahn Gas-
federn, Fabreeka and Tech Products
into the
Stabilus Group and the ongoing development of
the industrial business with new and existing
branches contributed largely to these results. We
also realized a significant increase in sales, in par-
ticular in the fields of agricultural and construction
machinery, buses, commercial vehicles, and medi-
cal technology.
Global demand for our products remains high: we
made substantial gains in all three regions (Europe
up 7.7%, NAFTA at year-on-year constant USD/EUR
exchange rate up 7%, and Asia / Pacific and RoW up
19.5%). Our decision to create a new Management
Board position for Asia proved correct considering
that growth hotspots are visibly shifting, in particular
in the automotive industry. Powerise® products,
which we have been producing locally in China
since the third quarter of 2016 fiscal year, will play
a major role in Stabilus´continued positive develop-
ment in Asia.
We once again made significant investments in our
growth over the reporting period – the total capital
expenditure increased by 5.3% to €47.5 million in
fiscal year 2018. In particular, we increased Powerise®
production capacity in China and Romania, installed
new production machines in Mexico and modern-
ized infrastructure at the German plant.
07
In terms of income, we increased adjusted EBIT
by around 8.5% to €149.3 million in the 2018
fiscal year, while net income rose from €79.2 mil-
lion in the 2017 fiscal year to €105.4 million in
the 2018 fiscal year. We will propose an
increased dividend of €1.00 per share to the
Annual General Meeting.
Continued profitable growth remains a key
target for Stabilus. Accordingly, we are aiming
for revenue growth of at least 6% per year on
average up to 2025. We firmly believe in the
strong market potential of our products.
Keeping in mind the current heterogeneous
market environment, for 2019 fiscal year we
expect revenue to grow by some 5% to approx-
imately EUR 1,010 million (at year-on-year con-
stant USD/EUR exchange rate of 1.19) and an
adjusted EBIT margin of approximately 15.5%.
This means that, for the first time, we are
anticipating annual revenue of over €1 bil-
lion – an outstanding milestone for our cus-
tomers, employees, business partners and
shareholders.
On behalf of the entire management team,
I would like to thank our customers for loyalty,
our shareholders for confidence, our business
partners for excellent cooperation and last but
not least our employees for their consistent
hard work.
We look forward to continuing our course of
growth in the 2019 fiscal year.
Yours sincerely,
Dr. Stephan Kessel
CEO
STABILUSTO OUR SHAREHOLDERSSTABILUSTO OUR SHAREHOLDERS SUPER
VISORY
BOARD
Dear Shareholders,
During the reporting period from October 1, 2017 to
September 30, 2018, the Supervisory Board of
Stabilus S.A. performed its tasks and monitored the
activities of the Management Board in accordance
with legal requirements and the Articles of Associ-
ation of Stabilus S. A. The Management Board and
the Supervisory Board maintained close and regular
contact. The Supervisory Board advised the Manage-
ment Board in regard to strategic and operational
decisions as well as governance topics and decided
on matters requiring Supervisory Board approval.
Composition of the Supervisory Board
The composition of the Supervisory Board changed
during the reporting period. Reason for this change
was the resignation of Dietmar Siemssen as CEO of
Stabilus as per July 31, 2018. The Supervisory Board
appointed its Chairman, Stephan Kessel, as member
of the Management Board and Interim CEO of Stabilus
with effect on August 1, 2018. According to Luxem-
bourg laws, his functions in the Supervisory Board
are suspended as long as he is a member of the Man-
agement Board. It is intended that Stephan Kessel
rejoins the Supervisory Board as soon as a new per-
manent CEO has been appointed.
Udo Stark, who held office as Chairman of the Super-
visory Board until the 2018 Annual General Meeting,
has been re-appointed as Supervisory Board member
by means of co-optation to the Supervisory Board
with effect of August 1, 2018. The Supervisory Board
re-elected him as Chairman. It is intended that
Udo Stark resigns as Supervisory Board member as
soon as Stephan Kessel rejoins the Supervisory Board
and returns to his position as the Board’s Chairman.
08
STABILUSTO OUR SHAREHOLDERS After the above described changes, the Supervisory
Board consists of Udo Stark (Chairman), Joachim
Rauhut, Ralf-Michael Fuchs and Dirk Linzmeier.
Meetings of the Supervisory Board
The Supervisory Board held in total seventeen meet-
ings during the last fiscal year and so far three in the
current fiscal year. Except for two meetings in which
one Supervisory Board member could not partici-
pate, all of the Supervisory Board members were
present in all meetings.
Ongoing subjects in these meetings were the current
status and performance of the Company and 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 ver-
bal and written form by the Management Board.
Other activities included strategy presentations and
a strategy workshop with the Management Board
supported by presentations of the respective busi-
ness leaders Further subjects were potential acquisi-
tions to enhance the profitable growth of the
Stabilus Group as well as the organizational devel-
opment.
Audit Committee and Remuneration and
Nomination Committee
The Supervisory Board has established two commit-
tees for the performance of specific tasks: The Audit
Committee, consisting of Joachim Rauhut (Chairman)
and Udo Stark, and the Remuneration and Nomina-
tion Committee, consisting of Udo Stark (Chairman)
and Ralf-Michael Fuchs.
Material questions concerning auditing, account-
ing, risk management, compliance and respective
controls and systems have been treated within the
Audit Committee. The Audit Committee discussed in
particular the Quarterly Reports, the relationship
with investors and the audit assignment to KPMG Lux-
embourg Société Coopérative including the focus
areas of their audit. During the reporting period, the
Audit Committee held five meetings and two meet-
ings were held since the beginning of the current
fiscal year. In all meetings, all of the Audit Commit-
tee members were present.
Remuneration, nomination and general Board mat-
ters were discussed by the Remuneration and
Nomination Committee. This committee prepared
Supervisory Board decisions regarding the appoint-
ment of Markus Schädlich as Management Board
member with specific responsibility for business in
Asia. As a consequence of Dietmar Siemssen leav-
ing his CEO position, the committee further pre-
pared and decided upon the terms of his departure
09
and initiated the search for a successor. Discus-
sions with qualified candidates are ongoing. The
Remuneration and Nomination Committee also
prepared the decisions of the Supervisory Board for
a new compensation scheme for the Management
Board members. During the reporting period, the
Remuneration and Nomination Committee held
nine meetings and two meetings were held since
the beginning of the current fiscal year. In all meet-
ings, all of the Remuneration and Nomination
Committee members were present.
Drawing up of the Financial Statements
The Supervisory Board examined the Company’s stand-
alone annual accounts, the consolidated financial
statements and the management report for the
financial year ending on September 30, 2018. Repre-
sentatives of the auditor KPMG Luxembourg Société
Coopérative attended the meetings of the Audit
Committee on November 14, 2018 and on Decem-
ber 12, 2018 at which the financial statements were
examined. The representatives of the auditor
reported extensively on their findings, provided a
written presentation and were available to give addi-
tional explanations and 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 financial year ending on September
30, 2018 and to the auditors’ presentation. Accord-
ing to the recommendation of the Audit Committee,
the Supervisory Board agreed to the proposal of the
Management Board to approve both the Company’s
annual accounts and the consolidated financial
statements for fiscal year 2018. The auditor issued
unqualified audit opinions on December 12, 2018.
On behalf of the Supervisory Board, I would like to
thank the Stabilus Management for excellent achieve-
ments throughout the last fiscal year and for the
open and effective collaboration. I want to thank the
Stabilus employees for their remarkable contribu-
tions to the Company’s success as well as our share-
holders for the highly valued trust which they place
in Stabilus.
Luxembourg, December 12, 2018
On behalf of the Supervisory Board of Stabilus S. A.
Udo Stark
Chairman of the
Supervisory Board
STABILUSTO OUR SHAREHOLDERSSTABILUSTO OUR SHAREHOLDERS S T A B I L U S
T O O U R S H A R E H O L D E R S
S T A B I L U S
I N T H E R E G I O N , F O R T H E R E G I O N
F
O
C
U
S
O
N
A
S
I
A
FOR THE
REGION
10
S T A B I L U S
T O O U R S H A R E H O L D E R S
S T A B I L U S
I N T H E R E G I O N , F O R T H E R E G I O N
A leading global provider
of gas springs, dampers and
electromechanical drives. More
than 6,500 dedicated employ-
ees. Revenue of almost €1 bil-
lion, up significantly more than
twofold since 2011.
A global production network,
ambitious long-term targets,
and a clear strategy. This
is how Stabilus can be de-
scribed in just a few words.
The Company’s recent history is one of record-break-
ing achievements. Stabilus is using this momentum
to achieve its next ambitious long-term targets for
the period to 2025 – including an average annual
revenue growth of at least 6% until 2025.
In doing so, the Company will build on its balanced
production network and its “in the region, for the
region” approach, which results in proximity to the
customer, short supply chains and local develop-
ment capacities for innovative solutions in the re-
spective markets. At the same time, this will also
generate natural stability in the face of fl uctuations
in individual markets or currencies.
In recent years, automotive and industrial suppliers
have succeeded in expanding their traditionally
strong automotive business while also moving into
various additional sectors as industrial suppliers. To-
day, Stabilus solutions can be found in aircraft, aer-
ospace and deep sea applications, solar modules,
agricultural machinery, and the health care sector.
Stabilus achieves growth by developing new prod-
ucts and applications as well as through value-add-
ing acquisitions, such as the industrial suppliers ACE,
Fabreeka, Tech Products and Hahn Gasfedern that
11
were acquired by the SKF Group in 2016. Stabilus
now has 17 production facilities around the world.
The basis for Stabilus’ sustainable success is the local
networking of global activities. To this end, the Com-
pany expands its production and sales capacities on
a targeted basis internationally while also driving
ahead the production of internationally well-estab-
lished brands in Europe. In 2018, for example, ACE
expanded its production from Farmington Hills, USA,
to Koblenz, Germany. A production facility for indus-
trial shock absorbers for the Magnum series, one of
ACE’s central products, was established at Stabilus’
headquarters. This has given ACE greater proximity
to the European market, as well as freeing up capac-
ity at the US plant so that it can better satisfy local
demand in the future. For Hahn Gasfedern in Aich-
wald, Germany, a neighboring property was acquired
in 2018 and will be home to additional production
lines from 2019.
The USA and Mexico also saw targeted investments
in machinery and a signifi cant increase in capacity
for gas springs. In addition, business in the NAFTA
region was supported with a new distribution center
in Mexico. In Romania, an additional production
building for Powerise® drives is currently being con-
structed in order to meet the growth in demand for
the drives on the European market. In the region, for
the region – a philosophy that is applied in practice,
for the benefi t of customers and all other Stabilus
stakeholders around the world.
S T A B I L U S
I N T H E R E G I O N , F O R T H E R E G I O N
S T A B I L U S
I N T H E R E G I O N , F O R T H E R E G I O N
B
U
S
A
N
T
O
K
Y
O
C
H
A
N
G
Z
H
O
U
S
H
A
N
G
H
A
I
ASIA
12
S T A B I L U S
I N T H E R E G I O N , F O R T H E R E G I O N
S T A B I L U S
I N T H E R E G I O N , F O R T H E R E G I O N
Asia. A small word for a region
that could hardly be more diverse
in terms of its individual markets.
The economic strength of the
Asian nations is extremely varied,
often with significant differenc-
es in income even within single
nations. What the larger markets
have in common is population
growth accompanied by economic
growth in most cases, resulting in
a large number of people with ris-
ing income as well as a significant
upturn in vehicle production over
the years.
This momentum is accompanied by a growing need
for comfort, one of the megatrends that is support-
ing Stabilus’ growth along with the rising average
age of the global population and more stringent in-
dustrial health and safety standards around the
world.
Stabilus has pursued a similar path to many western
industrial companies: From the mid-1990s onwards,
European automotive corporations in particular be-
gan establishing their own production facilities in
Asia. They were followed by many suppliers, Stabilus
included, with an interest in supporting their cus-
tomers’ local production.
Stabilus inaugurated its production in Korea in 2003,
followed by China in 2005, and the Company’s cus-
tomer base in Asia has expanded signifi cantly ever
since. In addition to western automotive groups,
Stabilus’ solutions have won over Asian manufactur-
ers such as Toyota, Hyundai, SAIC Volkswagen, SAIC
General Motors, Nissan, Honda and Mitsubishi. To-
day, Stabilus’ customer base in Asia comprises a
balanced portfolio of local and global automotive
13
clients who not only commission Stabilus for pro-
duction in Asia, but who also see the Company’s
global development and production network as a
particularly important factor. Many products are de-
veloped in Japan or Korea before being shipped
globally, for example.
Stabilus also has access to extensive opportunities
in terms of industrial applications, such as solutions
aimed at the needs of mega-cities in countries like
China. For instance, Stabilus offers elastomer mats
that isolate residential buildings from the vibrations
that can result from sources such as passing rail traf-
fi c. Other examples include mechanical and electro-
mechanical mechanisms for furniture that help peo-
living areas fl exibly and
ple to use compact
comfortably. Stabilus also offers solutions for Asia’s
growing mechanical engineering industry, such as
dampers that absorb vibrations from machine tools,
thereby increasing the precision of production and
extending machine durability. One particularly visi-
ble example of the wide-ranging industrial applica-
tions of dampers is the new Terminal 3 at Taoyuan
Airport in Taipei. The terminal is designed for 45 mil-
lion passengers annually and is scheduled for com-
pletion in 2020. Its attractive ceiling construction
uses Stabilus dampers to allow access to certain ar-
eas for maintenance.
All in all, Stabilus has generated strong double-digit
growth rates in the Asia/RoW region every year since
its IPO in 2014. The Company intends to continue on
its growth path in the future by further expanding
the Stabilus Group’s market share and product port-
folio in Asia.
MARKUS
SCHÄDLICH
In addition to the historical-
ly strong regions Europe and
NAFTA, Asia is a focus market
for Stabilus on account of its
growth and population de-
velopment. Stabilus wants to
foster further opportunities
through organizational adjust-
ments and has reinforced the
Management Board with an
Asia expert, Markus Schädlich,
who brings years of experience
in developing strategies fo-
cused on the Asian market and
who will realize the full growth
potential available to Stabilus
in this region.
14
What are the defining characteristics
of the Asian markets as far as you
are concerned?
Thanks to its population growth, Asia will remain
one of the key drivers of the world economy. Growth
rates of between 3% and just under 7% illustrate
the sustained high potential of the Asian nations.
And although not every country in Asia is still seeing
growth in vehicle production, there are many factors
that support our ability to outgrow the market. One
of them is the continuous rise in the share of hatch-
back cars, such as SUVs, in which a particularly large
number of our solutions are used. This is leading to
a significant upturn in the average proportion of gas
springs and Powerise® drives installed per vehicle. In
other words, our growth is not tied solely to the
quantitative development of general automotive
production. Comfort is also becoming increasingly
important for the growing middle class in Asia, not
only within the automotive industry but far beyond.
Our positive development is also being supported by
the trend away from cheap solutions in favor of
high-quality systems in which customers expect the
quality and performance that Stabilus provides.
STABILUSIN THE REGION, FOR THE REGIONSTABILUSIN THE REGION, FOR THE REGION How is Stabilus positioned
in the Asian region?
In addition to technological expertise and quality
leadership, Stabilus’ strength lies in its ability to de-
velop products in a targeted manner together with
the customer and to deliver them in any batch size.
Our globally and regionally balanced production and
development footprint, our proximity to the custom-
er and our short supply chains all play their part in
the positive standing we enjoy among our custom-
ers. As a strong, innovative brand, Stabilus has in-
creasingly positioned itself with major automotive
and industrial manufacturers in the region and suc-
cessfully attracted new customers. A close dialog
with the customer and targeted presentations of
product innovations at the manufacturers play an
important role in this respect. Our focus on the high
volumes required in the automotive industry has
helped us to become the leading supplier in the Asia
region. And our locations outside Asia are also reap-
ing the benefits. The economies of scale we have
achieved in Asia are helping us to become even
more competitive, because cost remains an impor-
tant factor for Asian customers even as their quality
standards have risen.
We are currently also seeing growing potential in
market segments such as commercial vehicles, the
transport industry, public transportation, production
technology, and many more besides. In recent years,
our growth in these segments has tended to be op-
portunistic in nature because our primary focus has
been on volume. However, our position as the lead-
ing provider is now helping us achieve greater
awareness in all market segments, thereby making it
easier for us to grow in smaller market segments
and attractive niches.
In terms of industrial applications, too, there are
promising developments in Asia as many manufac-
turers become increasingly quality-focused. For low-
cost providers of motion solutions, the consequence
is rising costs. For us, on the other hand, economies
of scale are making us increasingly economically in-
teresting for manufacturers, who are turning to
Stabilus as a supplier in order to clearly set their
15
products apart from the competition. In other words,
our established positioning as a quality provider and
our investments in local production capacities are
paying off. Stabilus is being noticed by many indus-
tries in Asia thanks to its innovative solutions and is
systematically increasing its market share in the
region as a result.
What are Stabilus’ plans for
the future in Asia?
We intend to continue to expand our footprint in
Asia in the medium term. Within Asia, Stabilus has
production sites in China and Korea. Having already
significantly expanded our Powerise® production in
China towards the end of the 2016 financial year, we
are currently increasing our capacities further to in-
clude an additional production line for Powerise®.
Customers in Japan are looked after by our sales and
development company in Tokyo. In Shanghai, we
have an additional sales team for the Chinese mar-
ket that complements the team in Changzhou ex-
tremely well. And the other Asian nations are cov-
ered by a dedicated team based in Singapore. India,
Malaysia and Thailand offer potential for which we
have developed and are implementing a clear strat-
egy. We also expect a number of other countries to
generate sustainably positive development in the
coming years. When it comes to tapping the poten-
tial of the Asian market, our excellent reputation in
the automotive industry is just as helpful as our re-
gionally oriented approach. Our proximity to the
customer and our global capabilities are proving to
be key virtues.
Our presence in Asia encompasses more than just
production and sales. We are aware that customers
in Asia want more than just the same products as in
Europe or the Americas. China in particular is seeing
the emergence of a sales market that demands inno-
vations and solutions specifically tailored to the
populous nation with an extremely short time be-
tween the concept phase and the finished product.
We are meeting these requirements by systematical-
ly establishing local development and innovation
expertise. We are developing an organization with
the capability to act throughout Asia and in line with
Asian standards.
STABILUSIN THE REGION, FOR THE REGIONSTABILUSIN THE REGION, FOR THE REGION CHINA
The Chinese population is currently growing by sev-
en million every year, with a good million of this
figure attributable to migrants from neighboring
countries seeking to participate in the country’s
strong economic development. With macroeconomic
growth of 6.9 percent in 2017, more and more peo-
ple are earning a regular income and the middle
class is growing as a result. Experience from other
emerging economies shows that this typically goes
hand in hand with increased expenditure on mobility
and comfort. Accordingly, car production in China
has grown every year since 2005 – from 3.1 million
vehicles in 2005 to around 25 million (or around
29 million units including commercial vehicles) in 2017.
As in the western industrialized nations, demo-
graphic development in China means the average
age is rising. By 2050, around 40% of the Chinese
population will be aged 65 or over. As such, China is
also set to be home to a large number of people
with an active interest in comfortable solutions for
carrying out everyday tasks. We therefore expect the
megatrend of comfort to continue to drive Stabilus’
growth in the long term. However, the geographical
dimensions of China and its population also mean
that speed and the smooth movement of people and
goods are vital if the country is to work efficiently.
Stabilus ensures smooth support and protection for
all kinds of movement, from high-bay warehouses,
supermarket refrigerator doors and ATMs through to
trains and buses. The acceleration, deceleration, pro-
tection and isolation of production processes are
also driving Stabilus’ growth in Asia.
Stabilus has had a production presence in China
since 2005. Since then, the company has continu-
ously entered new sectors on the back of its reputa-
tion in the automotive industry. However, Stabilus
also sees considerable potential for further expand-
ing its market position with Chinese car makers.
Local development capacities and contacts will play
a key role in this process. These will allow Stabilus
to quickly turn specific requirements into actual
applications as a local partner.
The Chinese plant supplies customers throughout
the region. Thanks to targeted expansion, gas spring
production has been modified and capacity increased
to over one million units. The expansion of capacity
for the production of Powerise® drives will allow us to
manufacture a seven-digit number of Powerise® units
in China in the medium term. In the 2018 financial
year, local engineering and production capacities ena-
bled the start of series production on projects for
Chinese and Korean car makers such as SAIC and
Hyundai, which are now using Powerise® drives with
strut support for opening and closing the tailgates of
their Chinese models.
When it comes to industrial applications, Stabilus
supplies Customers from the construction, agricultur-
al and engineering sectors, among others.
Stabilus has more than 200 competitors in China
alone. The secret of the company’s success is ensuring
the best possible quality and technically critical
product features even in large-scale production
processes. This expertise and the associated barriers
16
STABILUSIN THE REGION, FOR THE REGIONSTABILUSIN THE REGION, FOR THE REGION S T A B I L U S
I N T H E R E G I O N , F O R T H E R E G I O N
S T A B I L U S
I N T H E R E G I O N , F O R T H E R E G I O N
P
E
K
I
N
G
S
H
I
J
I
A
Z
H
U
A
N
G
X
I'
A
N
C
H
O
N
G
Q
I
N
G
C
H
E
N
G
D
U
H
A
N
G
Z
H
O
U
S
H
A
N
G
H
A
I
H
O
N
G
K
O
N
G
to market entry for Asian competitors, combined
with a service- and customer solution-oriented
global organization, are what make Stabilus unique.
The global STAR process and the values enshrined in
CODE S also help to create a corporate culture
that motivates all employees around the world to
work together and continue to expand Stabilus’
market leadership.
Population1:
1.4 BN
GDP growth1:
+ 6.9% Y/Y
GDP1:
US$ 12.3 M
Light vehicle production2::
27.7 M
1
2
Source: World Bank Open Data for 2017, https://data.worldbank.org/, as of November 2018.
Source: IHS Markit IHS LV production forecast for 2018 as of October 2018.
17
S T A B I L U S
I N T H E R E G I O N , F O R T H E R E G I O N
S T A B I L U S
I N T H E R E G I O N , F O R T H E R E G I O N
concluded an agreement for the provision of
Powerise® solutions for the automatic opening and
closing of tailgates in the Hyundai Motor Group’s
cars for the fi rst time. With this development,
Stabilus has successfully entered the Korean market
with Powerise® and generated momentum for addi-
tional strategic partnerships. In addition, the world’s
fi rst gas damper is currently being developed in co-
operation with the Hyundai Motor Group. This tech-
nology offers a great deal of potential for the future
and is already attracting interest from other manu-
facturers.
The expansion of Stabilus’ production in Korea is
therefore in full fl ow. While the Korean economy and
its car makers had to deal with recessionary trends
between 2014 and 2016, there was a moderate
recovery in 2017 and the economy is expected to
see positive overall development in 2018. Stabilus is
benefi ting from this trend, with solid growth in its
existing products and new segments. The model
policy of Korean car makers focused on SUVs at a
comparatively late stage, meaning there is still
signifi cant additional growth potential for us in this
market. With around fi ve million vehicles produced
worldwide, Korean automotive manufacturers ar e a
loyal customer group for Stabilus.
In Korea, too, Stabilus’ strategy of initially focus-
ing on the high-volume automotive industry has
proved successful. Building on its established
presence in the country and the corresponding
capacities and expertise, Stabilus also intends to
grow into other market segments on a targeted
basis in the coming years.
We see particular potential in the semiconductor
and electronics industry, where the isolation of pro-
duction processes from vibrations and the protec-
tion of semi-fi nished products during transportation
are important factors. ACE, Fabreeka and many
Stabilus products are world-leading in this area.
However, Stabilus is also anticipating growth in oth-
er segments such as the transport industry or agri-
cultural applications, as local providers often fi nd
themselves reaching the limits of their capacity.
S
E
O
U
L
D
A
E
G
U
B
U
S
A
N
Population1:
51.5 M
SOUTH
KOREA
GDP1:
US$ 1.5 M
GDP growth1:
+ 3.1% Y/Y
Light vehicle production2::
4.0 M
Although many people view Asia as a single region,
the individual countries are extremely varied when it
comes to their economic structure and the relevant
factors for success as a foreign company. Stabilus’
early decision to manufacture in Korea and establish
a strong local production, sales and development
team sets it apart from domestic and global compet-
itors alike. High-volume automotive customers in
particular recognize Stabilus’ strategic commitment
and substantial local and global market share as a
sign of quality.
As a result, Stabilus supplies products for the Korean
and global production sites (USA, China, EU) of all
Korean manufacturers. For our customers in Korea
and for Stabilus itself, the production of Powerise®
in Korea represents a natural step in the develop-
ment process. One major customer in Korea is the
Hyundai Motor Group (Hyundai, KIA), with which
Stabilus has a long-standing business relationship
for gas springs. In September 2018, Stabilus also
1
2
Source: World Bank Open Data for 2017,
https://data.worldbank.org/, as of November 2018.
Source: IHS Markit IHS LV production forecast for 2018
as of October 2018.
18
S T A B I L U S
I N T H E R E G I O N , F O R T H E R E G I O N
S T A B I L U S
I N T H E R E G I O N , F O R T H E R E G I O N
JAPAN
T
O
K
Y
O
K
Y
O
T
O
N
A
G
O
Y
A
Population1:
126.8 M
GDP1:
US$ 4.9 M
GDP growth1:
+ 1.7% Y/Y
Light vehicle production2::
9.2 M
With over 120 million inhabitants and high popula-
tion density, Japan is more than just a major market
for Stabilus: The specifi c demands of Japanese socie-
ty and domestic culture also require country-specifi c
applications.
With a high degree of sensitivity for market-specifi c
requirements, Stabilus regularly proves to be the
manufacturer of choice for major projects in Japan
and is continuously expanding its sales of gas
springs. Customers in Japan include all of the lead-
ing manufacturers from the Japanese automotive
industry. Stabilus has met the high standards of
Toyota in recent years thanks to international team-
work, receiving numerous new orders and winning
supplier awards as a result. Stabilus’ global footprint,
with its proximity to Japanese OEMs in Mexico, the
USA, Europe and China, takes cooperation to a new
qualitiative level by also making the Company a
reliable partner for Japanese customers with pro-
duction facilities outside Japan. Today, Stabilus is
the leading global provider of gas springs for the
Japanese automotive industry. Furthermore, potential
Powerise® projects with Japanese OEMs are currently
1
2
Source: World Bank Open Data for 2017,
https://data.worldbank.org/, as of November 2018.
Source: IHS Markit IHS LV production forecast for 2018
as of October 2018.
being examined for the fi rst time. Stabilus also uses
its leading international position to develop seg-
ments outside the automotive market in Japan. Even
today, Stabilus works with Japanese customers to
develop innovative motion solutions in areas such
as furniture and production technology. We also see
additional potential for the products of the industrial
supplier acquired by Stabilus in 2016.
19
SHARE
Stabilus share data
Ticker symbol
Bloomberg ticker symbol
Reuters ticker symbol
STM
STM:GR
STAB.DE
ISIN
LU1066226637
German security
identification number (WKN)
A113Q5
Number of shares
outstanding (Sept 30, 2018)
24,700,000
Type of shares
Capital stock
(Sept 30, 2018)
Dematerialized
shares with a
nominal value
of €0.01
€247,000
Stabilus share price developed in line with
automotive indices yoy
Over the course of the fiscal year 2018, Stabilus’
share price decreased by around 7% from €76.79
on the last trading day of fiscal 2017 to €71.10 on
the last trading day of fiscal 2018. During the
same period, the SDAX declined by around 2%,
DAXsector All Automobile by around 8% and
DAXsector Industrial remained as of end Sep-
tember 2018 roughly on the same level as a
year before.
Shareholder structure
to
the voting
According
rights notifications
received until September 30, 2018, Marathon
Asset Management LLP, London, UK, BlackRock,
Inc., Wilmington, DE, USA and Ameriprise Finan-
cial, Inc., Minneapolis, MN, USA each hold more
than 5% of Stabilus shares. Stabilus management,
i.e. members of the Management Board and of the
Supervisory Board, hold 0.3% of the total shares.
The aforementioned and all other voting-right noti-
fications can be viewed on the Company's website
(www.ir.stabilus.com).
Annual General Meeting
Almost two thirds (65.8%) of equity capital was
represented at our Annual General Meeting which
was held on February 14, 2018 in Luxembourg.
A large majority of shareholders approved all
proposed resolutions – with one exception: The
Annual General Meeting did not resolve to
amend the articles of association of the company
20
STABILUSTO OUR SHAREHOLDERSSTABILUSTO OUR SHAREHOLDERS
S T A B I L U S
T O O U R S H A R E H O L D E R S
S T A B I L U S
T O O U R S H A R E H O L D E R S
Share price performance
20%
15%
10%
5%
0%
– 5%
– 10%
– 15%
Closing price
Sept 29, 2017
€76.79
Closing price
Sept 28, 2018
€71.10
Oct
Dec
Feb
Apr
June
Aug
Stabilus SDAX (Price index) DAXsector All Automobile (Price index) DAXsector Industrial (Price index)
allowing the Supervisory Board to appoint ordinary
members of the Management Board for a period
exceeding one year, specifically up to three years.
The appointment period of the Management
Board members designated as Chief Executive
and Chief Financial Officers remains at four and
three years, respectively. All of the documents
and information regarding the Annual General
Meeting can be found on the Company's website
(www.ir.stabilus.com).
Dividend proposal of €1.00 per share
The Management Board and the Supervisory Board
have resolved to propose a dividend distribution
of €1.00 per share to the Annual General Meeting
to be held in Luxembourg on February 13, 2019
(PY: €0.80). The total dividend will thus amount
to €24.7 million (PY: 19.8 million) and the distri-
bution ratio will be 23.4% of the consolidated
profit attributable to the Stabilus shareholders.
Shareholder structure
in % as of September 30, 2018
81.9
7.1
5.6
5.1
0.3
7.1%
5.6%
5.1%
0.3%
81.9%
Marathon Asset
Management LLP
BlackRock, Inc.
Ameriprise Financial, Inc.
Management
Other institutional
and private investors
21
Closing price
Sept 28, 2018
€71.10
€90
€85
€80
€75
€70
€65
€60
€55
€50
€45
€40
€35
€30
€25
S T A B I L U S
T O O U R S H A R E H O L D E R S
Development of Stabilus share price since IPO
First trading day
May 23, 2014
€22.75
Jul Sept Nov
Jan Mar May
2015
Jul Sept Nov
Jan Mar May
2016
Jul Sept Nov
Jan Mar May
2017
Jul Sept Nov
Jan Mar May
2018
Jul Sept
Regular dialog with investors and analysts
In fi scal year 2018 we continued to pursue our
goal of providing all market participants with
relevant and reliable information. We conducted
nineteen investor events (i.e. roadshows and site
visits) and participated in the following interna-
tional conferences:
Berenberg European Corporate Conference,
Pennyhill Park, Surrey
Commerzbank German Investment Seminar,
New York
Kepler Cheuvreux 17th German Corporate
Conference, Frankfurt am Main
12th Oddo BHF German Conference,
Frankfurt am Main
Bankhaus Lampe Deutschlandkonferenz,
Baden-Baden
UBS Pan European Small and Mid-Cap
Conference, London
Commerzbank Northern European Conference,
New York
Commerzbank Northern European Conference,
Boston
Berenberg European Conference USA,
Tarrytown
Societe Generale Nice Conference, Nice
J.P. Morgan 6th Annual Auto Conference,
London
Warburg Highlights Conference, Hamburg
Commerzbank Sector Conference,
Frankfurt am Main
Citi Small Cap Growth Conference, London
Berenberg and Goldman Sachs Seventh
German Corporate Conference, Munich
Baader Investment Conference, Munich
The following equity analysts publish regular
assessments and recommendations on Stabilus
stock:
Research coverage
Bankhaus Lampe
David Klus
Berenberg
Philippe Lorrain, Simon Toennessen
Commerzbank
Yasmin Steilen, Demian Flowers
Credit Suisse
Sascha Gommel, Daniel Schwarz
Equinet Bank
Manuel Tanzer, Stefan Augustin
Hauck & Aufhäuser
Christian Glowa
J.P. Morgan
Jose M Asumendi, Akshat Kacker
Kepler Cheuvreux
Hans-Joachim Heimbürger
MainFirst
Quirin
Alexander Wahl
Daniel Kukalj
Societe Generale
Stephen Reitman, Erwann Dagorne
Warburg Research
Marc-René Tonn
22
S T A B I L U S
T O O U R S H A R E H O L D E R S
P A G E 2 3 – 4 8
P A G E 2 3 – 4 8
MANAGEMENT
REPORT
COMBINED MANAGEMENT REPORT
as of and for the fiscal year ended September 30, 2018
25 GENERAL
25 STRATEGY
27
BUSINESS AND GENERAL
ENVIRONMENT
29 RESULTS OF OPERATIONS
33
DEVELOPMENT OF
OPERATING SEGMENTS
36 LIQUIDITY
39
STATUTORY RESULTS OF
OPERATIONS AND FINANCIAL
POSITION OF STABILUS S. A.
39 RISKS AND OPPORTUNITIES
46 CORPORATE GOVERNANCE
48 SUBSEQUENT EVENTS
34 FINANCIAL POSITION
48 OUTLOOK
24
STABILUSCOMBINED MANAGEMENT REPORTSTABILUSCOMBINED MANAGEMENT REPORT GENERAL
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.
Stabilus S. A., Luxembourg, hereafter also referred to as “Stabilus”
or the “Company” is a public limited liability company (société
D R I V E P R O F I TA B L E A N D C A S H G E N E R AT I N G
anonyme) incorporated in Luxembourg and governed by Luxem-
G R O W T H I N A L L R E G I O N A L S E G M E N T S A N D
bourg law. The registered office is 2, rue Albert Borschette, L-1246
A C R O S S E N D M A R K E T S
Luxembourg, Grand Duchy of Luxembourg.
The Stabilus Management aims to continue to increase revenue,
Stabilus S. A. is the parent company of the Stabilus Group. The
profits and cash flows across all business segments by further
Group is organized and managed primarily on a regional level.
focusing on regions and sectors where the Stabilus Group has
The three reportable operating segments of the Group are Europe,
room to grow, by entering new markets and by strengthening the
NAFTA as well as Asia / Pacific and Rest of World (RoW). Stabilus’
Group with selected add-on acquisitions.
fiscal year is not a calendar year but a twelve-month period from
October 1 until September 30 of the following year.
Automotive Gas Spring & Powerise®: Focus on rapidly
growing regions and increased comfort demand
The Stabilus Group is a leading manufacturer of gas springs, damp-
Stabilus intends to continue to further expand its international
ers, vibration isolation products as well as electromechanical tail-
presence in rapidly growing markets, in particular in Asia, which
gate opening systems (motion control solutions). The products are
has become a significant growth driver for the automotive sector
used in a wide range of applications in the automotive and the
and where the Company’s market share still lags behind the market
industrial and domestic sector. Typically the products are used to aid
share in Europe and NAFTA. Management seeks to increase reve-
the lifting and lowering or dampening of movements. As world
nue from Asian OEMs in the automotive business, supported by
market leader for gas springs, the Group manufactures for all key
new targeted investments in additional production capacity in this
vehicle producers. A broad spectrum of industrial customers diver-
region. To achieve this goal, management has implemented a
sify the Group’s customer base. Around 37% of the Group’s reve-
targeted sales strategy and is further strengthening engineering
nue in fiscal 2018 were achieved with industrial customers.
capabilities in China, which has already secured orders from
STRATEGY
several local Chinese OEMs, both for Gas Spring and Powerise®.
Stabilus´ market share with European and US car manufactures
has long since been strong.
Increased demand for SUVs, crossovers and hatchback cars will pro-
vide a strong foundation for increased Powerise® sales. Powerise®,
The Stabilus Group is a leading supplier of gas springs to automo-
our automatic opening and closing system for vehilce tailgates fullfills
tive and industrial customers. In addition, the Company has suc-
increased comfort requirements across all regions. The Company is in
cessfully expanded into the production and sale of automatic open-
the process of adding further capacities at its three Powerise® pro-
ing and closing systems, primarily used for vehicle tailgates. With
duction plants.
the acquisition of Hahn Gasfedern, ACE and Fabreeka / Tech Prod-
ucts in fiscal 2016 the Group expanded its product offering. The
Industrial: Increase regional coverage
Company offers now a broad range of solutions for motion control,
While Stabilus has a large industrial market share in certain Euro-
which contains additional damping solutions including vibration
pean countries in which the Company has a strong commercial
insulation. Stabilus’ strategic aim is to further extend its leadership
presence, the Group believes that there is still potential to increase
positions. The key focus areas of its strategy process STAR are to: (i)
market share in Asia and North America, where the Company’s
drive profitable and cash-generating growth, (ii) benefit from meg-
market coverage is comparatively less strong. Management has
atrends, such as increased standard of living, increasing comfort
identified regions and countries in which the Company has the
requirements and aging population, (iii) focus on innovative gas
opportunity to repeat the successful strategies from markets where
25
STABILUSCOMBINED MANAGEMENT REPORTSTABILUSCOMBINED MANAGEMENT REPORT Stabilus has a high share, by improving market coverage with the
F O C U S O N I N N O VAT I V E C O M P O N E N T S A N D
objective of strengthening the local sales footprint. In addition,
S YS T E M S TO TA K E A D VA N TA G E O F G L O B A L
Stabilus intends to duplicate its production, application engineer-
I N D U S T RY T R E N D S
ing and sales know-how from Europe and NAFTA to the Asia / Pacific
region, to strengthen the Group’s footprint there. The Company is
The products of Stabilus are at the forefront of innovation in motion
increasing its presence in China. Stabilus has extended its Chinese
control. The Company employs 352 people in R&D across its three
production capabilities and set up local application engineering,
regional segments as of September 30, 2018. Stabilus is focused
sales and project management teams. In China the Company has
on designing and manufacturing highly-engineered components,
set up their first production line for industrial products, which will
modules and system solutions that address key global trends in the
help gain additional local market shares. The Stabilus management
automotive and industrial sectors. The Company aims to adapt to
believes that a strong local presence in China will further strengthen
these trends by continuously improving its existing technology, in
the Group’s position in the Asia / Pacific region.
particular the requirement for ergonomic solutions as well as auto-
mated opening and closing systems. Management believes that
As the only non-Asian producer of gas springs for high quality com-
actively addressing these key trends reinforces the Company’s ability
mercial furniture, Stabilus is in an excellent position to gain further
to maintain its market share and profitability.
market share in Europe and NAFTA. Management has successfully
turned around the commercial furniture business and increased prof-
In the industrial sector, the Company continues to develop products
itability and stabilized revenue. Stabilus expects this positive momen-
for enhanced safety and comfort. For example, it is selling a seat
tum to continue.
application based on the Bloc-O-Lift® system for use in airplane
seats. In addition, dampers manufactured by Stabilus are increas-
B E N E F I T F R O M M E G AT R E N D S, S U C H A S
ingly used in suntracking solar parks. Our dampers protect the
I N C R E A S I N G C O M F O R T R E Q U I R E M E N T S A N D
modules by reducing wind induced vibration.
A G I N G P O P U L AT I O N
Management expects that the recent and ongoing growth of our
Stabilus continues to adapt its product offerings towards meg-
customer base for Powerise® solutions due to the superior technol-
atrends, such as comfort requirements. The Powerise® solution
ogy features of the Company’s products will be a key growth
enhances comfort through automatically opening and closing car
driver for Stabilus. While Powerise® systems were in the past
tailgates and trunk lids. In addition, the Company’s gas springs
deployed only in the luxury and SUV car segments, Powerise® has
offer more comfortable opening and closing solutions as well as
recently successfully gained market shares with mid-class vehicles
increased comfort in commercial furniture and industrial applica-
such as the VW Passat and Ford Mondeo. The Company is working
tions, such as airplane seats.
on and investing in improving and further developing its current
The global population of older people is growing considerably
costs. In addition, Stabilus is exploring new industrial applica-
spindle drive technology to further reduce noise, weight and
faster than the population as a whole in a number of countries.
tions for its Powerise® systems.
Stabilus focuses on capitalizing on this megatrend. It is inevitable
that an aging consumer base requests more movement support
M A I N TA I N A N D S T R E N G T H E N C O S T A N D
and more automated systems in their vehicles and in other aspects
Q U A L I T Y L E A D E R S H I P
of their daily lives. The Group intends to benefit from this meg-
atrend as it has a leading position as a system provider of auto-
Build on the Group’s global footprint and
matic opening and closing systems which will continue to experi-
proximity to customers
ence an increasing demand.
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
26
STABILUSCOMBINED MANAGEMENT REPORTSTABILUSCOMBINED MANAGEMENT REPORT to continue to provide a comprehensive product and service offer-
For the coming years, management expects to continue on this path
ing to current and new customers globally. The Group seeks to fully
with productivity improvements, a range of initiatives to profitability
globalize its product portfolio and to provide an even broader range
backed by a high level of business which has already been locked
of components and systems to each customer.
in. Due to the Company’s production know-how and long-standing
client relationships backed by Stabilus’ quality leadership, manage-
Continue to optimize cost base
ment is confident that it can protect the Group’s market shares
Stabilus continuously implements operational improvements relat-
in gas springs in Europe and NAFTA and gain further market shares
ing to plant and overhead, which includes productivity improve-
for gas springs in the Asia / Pacific region, especially with local
ments, overhead optimization and the rollout / implementation of
customers. An increasing market share in Powerise® supports this
local sourcing, to improve the Company’s operating costs.
positive outlook.
BUSINESS AND GENERAL
ENVIRONMENT
Stabilus Group operates in automotive and in industrial markets.
Macroeconomic development
In the industrial markets, Stabilus supplies customers in a large
According to the latest figures published by the International Mon-
number of sub-industries, e.g. industrial production equipment,
etary Fund (IMF), the global GDP growth projection in the calendar
automation, construction machinery, transportation (aircrafts,
year 2018 is expected to be 3.7% (2017: 3.7%). The Growth in
trucks and buses, marine), agriculture machinery, medical applica-
the advanced economies is projected to expand by 2.4% in 2018
tions, renewable energy (in particular solar and wind). Hence, our
and is marginally higher compared to 2.3% in calendar year 2017
revenue development in the industrial business depends to a cer-
before softening to 2.1% in 2019. The developing economies are
tain degree on the macroeconomic development, i.e. the growth
still experiencing high growth rates. The growth rate of developing
rate of the gross domestic product (GDP) in the countries and
countries’ GDP is set to remain constant at 4.7% in 2018 and
regions we operate in.
2019, compared to 4.7% in 2017.
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 and SUVs have
generally a higher Stabilus content per car). Hence, the demand
and popularity of certain vehicle body configurations should be
considered as an additional variable in a revenue forecast model.
27
STABILUSCOMBINED MANAGEMENT REPORTSTABILUSCOMBINED MANAGEMENT REPORT Latest growth projections for selected economies
% Y E A R - O N - Y E A R C H A N G E I N T H E C A L E N D A R Y E A R
World
Advanced economies
Euro Area
United Kingdom
United States
Canada
Japan
Developing economies (emerging markets)
Emerging and developing Europe
Russia
China
Mexico
Brazil
Source: IMF, October 2018 World Economic Outlook.
* Projections.
2017
3.7%
2.3%
2.4%
1.7%
2.2%
3.0%
1.7%
4.7%
6.0%
1.5%
6.9%
2.0%
1.0%
2018*
3.7%
2.4%
2.0%
1.4%
2.9%
2.1%
1.1%
4.7%
3.8%
1.7%
6.6%
2.2%
1.4%
T_001
2019*
3.7%
2.1%
1.9%
1.5%
2.5%
2.0%
0.9%
4.7%
2.0%
1.8%
6.2%
2.5%
2.4%
Development of vehicle markets
Europe and around 17.0 million vehicles (– 0.1% versus 17.1 mil-
lion units in 2017) in the NAFTA region.
The global production of light vehicles in the last twelve months
developed slightly positively. According to IHS forecasts as of Octo-
Estimations of the German Association of the Automotive Industry
ber 2018, the global production is expected to increase from 95.2 mil-
(VDA), as of October 2018, show a global year-on-year increase of
lion units in calendar year 2017 to approximately 95.8 million vehi-
new car registrations in calendar year 2018 amounting to approxi-
cles in 2018 which corresponds to a growth rate of 0.7% in 2018.
mately 1%. The development varies significantly in the world’s
Thus, in 2018, the output of new passenger cars and light commer-
regions: + 15% in Russia, + 11% in Eastern Europe, + 10% in Brazil,
cial vehicles in Asia / Pacific and RoW is forecasted to reach around
+ 2% in China, + 0% in Western Europe, – 2% in the USA, and
56.6 million vehicles (+ 0.8% versus 55.9 million units in 2017),
– 5% in Mexico.
approximately 22.2 million vehicles (unchanged versus 2017) in
Production of light vehicles
T_002
I N M I L L I O N S O F U N I T S P E R C A L E N D A R Y E A R
Europe
NAFTA
Asia / Pacific and RoW
Worldwide production of light vehicles*
Source: IHS
* Passenger cars and light commercial vehicles (<6t)
** IHS forecast as of October 2018
2017
22.2
17.1
55.9
95.2
2018**
2019**
2020**
2021**
2022**
2023**
22.2
17.0
56.6
95.8
22.5
17.1
58.1
97.7
22.6
16.8
59.4
98.8
23.1
17.4
61.1
23.4
17.6
63.4
23.5
17.7
65.2
101.6
104.4
106.4
28
STABILUSCOMBINED MANAGEMENT REPORTSTABILUSCOMBINED MANAGEMENT REPORT Sport utility vehicles (SUV), multi-purpose vehicles (MPV), crossovers,
as well as station wagons and hatchbacks continue to be favored by
an increasing number of end customers – not only in North America
Alternative Performance Measures (APM)
in the annual report of fiscal year 2018
and Europe, but increasingly also in Asia / China. For instance: the
In accordance with the European Securities and Markets Authority
German Department of Motor Vehicles (Kraftfahrt- Bundesamt, KBA),
(ESMA) guidelines on Alternative Performance Measures the Stabilus
a government agency administering vehicle registrations, pub-
Group provides a definition, the rationale for use and a reconcilia-
lishes monthly statistics of new passenger car registrations on its
tion of APM used. The Group uses the following APMs: Adjusted
website – classified by car models and vehicle segments. Accord-
EBIT, Free cash flow (FCF), Net Leverage Ratio. The calculation of
ing to these statistics for 2017, registrations of new SUVs in
the net leverage ratio is based on net financial debt and adjusted
Germany increased by 18.4% in a year-on-year comparison and
EBITDA which are also considered APMs. The required disclosures
off-road vehicles by 3.2% – i.e. more strongly than other vehicle
are provided in the relevant sections of this annual report.
segments and total new car registrations which increased by 2.7%.
In the ten-month period from January to October 2018, the regis-
The APM adjusted free cash flow and Organic growth have been
trations of new SUVs in Germany increased by 12.0% and the reg-
used in past annual reports to anticipate a business combination in
istrations of off-road vehicles decreased by 6.6% compared to the
fiscal 2016. As we do not have a comparable transaction in fiscal years
respective period of the previous year.
2017 and 2018 we do not use these APMs in this annual report.
RESULTS OF OPERATIONS
The table below sets out Stabilus Group’s consolidated income
statement for the fiscal year 2018 in comparison to the fiscal
year 2017:
Income statement
I N € M I L L I O N S
Revenue
Cost of sales
Gross profit
Research and development expenses
Selling expenses
Administrative expenses
Other income
Other expenses
Profit from operating activities (EBIT)
Finance income
Finance costs
Profit / (loss) before income tax
Income tax income/ (expense)
Profit / (loss) for the period
T _ 003
Change
% change
52.6
(34.2)
18.3
(3.8)
(0.9)
(3.2)
–
3.2
13.5
(15.6)
17.7
15.6
10.6
26.2
5.8%
5.4%
6.7%
9.9%
1.1%
9.1%
0.0%
(71.1)%
11.4%
(70.0)%
(59.4)%
14,1%
(33.4)%
33,1%
Year ended Sept 30,
2018
962.6
(671.4)
291.2
(42.0)
(81.3)
(38.5)
3.9
(1.3)
131.9
6.7
(12.1)
126.5
(21.1)
105.4
2017
910.0
(637.2)
272.9
(38.2)
(80.4)
(35.3)
3.9
(4.5)
118.4
22.3
(29.8)
110.9
(31.7)
79.2
29
STABILUSCOMBINED MANAGEMENT REPORTSTABILUSCOMBINED MANAGEMENT REPORT Revenue
Group’s total revenue developed as follows:
Revenue by region
I N € M I L L I O N S
Europe1)
NAFTA1)
Asia / Pacific and RoW 1)
Revenue1)
T _ 004
Year ended Sept 30,
2018
491.3
348.1
123.1
962.6
2017
456.3
350.7
103.0
910.0
Change
% change
35.0
(2.6)
20.1
52.6
7.7%
(0.7%)
19.5%
5.8%
1) Revenue breakdown by location of Stabilus company (i. e. “billed-from view”).
Total revenue of €962.6 million in fiscal year 2018 increased by
The decrease in NAFTA is driven by the relatively weaker US dollar,
5.8% compared to the fiscal year 2017.
i.e. the currency translation of NAFTA´s revenue from US dollar to
euro (average rate per €1: $1.19 FY2018 versus $1.10 FY2017).
The Group´s revenue growth in fiscal 2018 was primarily driven by
This currency translation effect amounted to €(27.3) million.
our entities in Europe (€35.0 million or 7.7%) and Asia / Pacific and
At constant US dollar rates NAFTA´s revenue grew by 7.0%.
RoW (€20.1 million or 19.5%), whereas revenue from our NAFTA
entities decreased by €(2.6) million or (0.7)%.
Revenue by market
I N € M I L L I O N S
Automotive Gas Spring
Automotive Powerise®
Automotive business
Industrial / Capital Goods
Vibration & Velocity Control
Commercial Furniture
Industrial business
Revenue
Year ended Sept 30,
2018
342.3
268.3
610.6
220.0
101.6
30.4
352.0
962.6
2017
340.5
243.2
583.7
204.4
93.9
28.0
326.3
910.0
T _ 005
Change
% change
1.8
25.1
26.9
15.6
7.7
2.4
25.7
52.6
0.5%
10.3%
4.6%
7.6%
8.2%
8.6%
7.9%
5.8%
The revenue of our Automotive business increased by €26.9 million
The revenue of our Industrial business increased by €25.7 million
or 4.6% from €583.7 million in fiscal year 2017 to €610.6 million in
or 7.9% from €326.3 million in fiscal year 2017 to €352.0 million
fiscal year 2018. This is substantially due to our Automotive Powerise®
in fiscal year 2018. This increase was primarily driven by our Indus-
business increasing by €25.1 million or 10.3% to €268.3 million,
trial / Capital Goods business which grew by €15.6 million or 7.6%
reflecting stronger sales in China. Revenue in the Automotive Gas
and our Vibration & Velocity business which grew by €7.7 million
Spring business increased slightly by €1.8 million or 0.5% from
or 8.2%. Both businesses benefit from the strong growth in several
€340.5 million to €342.3 million.
30
STABILUSCOMBINED MANAGEMENT REPORTSTABILUSCOMBINED MANAGEMENT REPORT relevant segments (e.g. agriculture machinery, construction machin-
A D M I N I S T R AT I V E E X P E N S E S
ery, bus / truck / transportation, medical technology).
Commercial Furniture revenue increased by 8.6% from €28.0 mil-
year 2017 by 9.1% to €(38.5) million in fiscal year 2018. This
lion in fiscal year 2017 to €30.4 million in fiscal year 2018.
increase is especially due to an increased headcount addressing
Administrative expenses increased from €(35.3) million in fiscal
Cost of sales and overhead expenses
increased slightly by 10 basis points to 4.0% (PY:3.9%).
the overall growth of the Stabilus Group and the overall payroll
inflation. As a percentage of revenue, administrative expenses
C O S T O F S A L E S
OT H E R I N C O M E A N D E X P E N S E
Cost of sales increased from €(637.2) million in fiscal year 2017 by
Other income remained unchanged at €3.9 million in fiscal year
5.4% to €(671.4) million in fiscal year 2018 and this is generally
2017 compared to fiscal year 2018. This mainly comprises income
driven by increased revenue. The cost of sales increase (5.4%) is
from scrap and income from rental to external companies.
less than the increase in revenue (5.8%). Consequently, cost of
sales as a percentage of revenue decreased to 69.7% (PY: 70.0%)
Other expense decreased from €(4.5) million in fiscal year 2017 by
and the gross profit margin improved to 30.3% (PY: 30.0%).
€3.2 million to €(1.3) million in fiscal year 2018. This mainly com-
This reflects a shift to strong margin business and a better fixed
prises the presentation of net foreign currency translation losses
cost absorption due to economies of scale.
from the operating business.
R & D E X P E N S E S
F I N A N C E I N C O M E A N D C O S T S
R&D expenses (net of R&D cost capitalization) increased by 9.9%
Finance income decreased from €22.3 million in fiscal year 2017 to
from €(38.2) million in fiscal year 2017 to €(42.0) million in fiscal
€6.7 million in fiscal year 2018. Finance income resulted mainly
year 2018. The increase in R&D expenses reflects engineering activ-
from the adjustment of the carrying value of the term loan facility.
ities to develop new products and product applications to open
In the current year this reflects the extension of the term by
new areas of business for Stabilus. The non-capitalizable R&D costs
one year (€3.4 million), a further decrease in the margin in February
increased even more as resources are currently reassigned from
2018 (€1.3 million) and changed assumptions for voluntary pre-
capitalizable activities to others. As a percentage of revenue, R&D
payments (€1.7 million). In the prior year this reflects the decrease
expenses increased by 20 basis points to 4.4% (PY: 4.2%). The
in the margin (€17.5 million) and last year’s extension of the term
capitalization of R&D expenses decreased from €(11.4) million in
by one year (€4.6 million).
fiscal year 2017 to €(9.1) million in fiscal year 2018.
S E L L I N G E X P E N S E S
Finance costs decreased from €(29.8) million in fiscal year 2017 to
€(12.1) million in fiscal year 2018. Finance costs in fiscal year 2018
comprised interest expense of €(8.5) million (PY: €(12.8) million)
Selling expenses increased from €(80.4) million in fiscal year 2017
and net foreign exchange losses of €(2.6) million (PY: €(16.5) million).
by 1.1% to €(81.3) million in fiscal year 2018 generally due to
increased revenue. As a percentage of revenue, selling expenses
Interest expense on financial liabilities include ongoing interest
decreased by 40 basis points to 8.4% (PY: 8.8%).
expense of €(8.5) million (PY: €(9.6) million) especially related to
the euro term loan facility. Thereof, an amount of €(3.8) million
(PY: €(8.3) million) is cash interest. This decrease reflects the lower
margin based on the improved net leverage ratio of the Group and
the reduced outstanding nominal amount. In addition, an amount
of €(4.7) million (PY: €(2.4) million) is due to the amortization of
debt issuance cost and the amortization of adjustments of the
31
STABILUSCOMBINED MANAGEMENT REPORTSTABILUSCOMBINED MANAGEMENT REPORT carrying value by using the effective interest rate method. In the
The decrease in the tax rate is especially due to the US tax reform
prior year prepayments of the euro term loan facility lead to a derecog-
and a changed financing and legal structure of our US operations.
nition of unamortized debt issuance cost and unamortized adjust-
The US tax reform signed in December 2017 reduces the federal
ments of the carrying value with a total amount of €(3.1) million.
income tax rate from 35% to 21% with effect from January 1,
2018, and requires a remeasurement of the deferred tax position
Net foreign exchange losses are a result of financial assets and
of our US operations with a non-recurring net tax benefit of
liabilities of group entities denominated in foreign currency. The
€3.9 million. In the context of the changed financing and legal
reduction compared to prior year is due to certain measures we
structure of our US operations a non-recurring net tax benefit
took to reduce our foreign exchange exposure.
amounting to €7.2 million has been recognized reflecting the
I N C O M E TA X E X P E N S E
gains and the recoverability of interest expense from prior years.
release of deferred tax liabilities for unrealized foreign exchange
The tax expense decreased from €(31.7) million in fiscal year 2017
R E C O N C I L I AT I O N O F E B I T TO A D J U S T E D E B I T
to €(21.1) million in the fiscal year 2018. The Group´s tax rate in
fiscal year 2018 is 16.7% (PY: 28.6%).
The following table shows a reconciliation of EBIT (earnings before
interest and taxes) to adjusted EBIT for the fiscal years 2018
and 2017:
Reconciliation of EBIT to adjusted EBIT
T _ 006
I N € M I L L I O N S
Profit from operating activities (EBIT)
PPA adjustments - depreciation and amortization
Adjustments
Adjusted EBIT
Year ended Sept 30,
2018
131.9
17.4
–
149.3
2017
118.4
19.2
–
137.6
Change
% change
13.5
(1.8)
–
11.7
11.4%
(9.4)%
n/a
8.5%
Adjusted EBIT represents EBIT, adjusted for exceptional non-recurring
The PPA adjustments in the current year contain €9.3 million
items (e.g. restructuring or one-time advisory costs) and deprecia-
(PY: €10.8 million) related to the April 2010 PPA and €8.2 million
tion / amortization of fair value adjustments from purchase price
(PY: €8.4 million) to the June 2016 PPA.
allocations (PPAs). Adjusted EBIT is presented because we believe
it helps understanding our operating performance.
32
STABILUSCOMBINED MANAGEMENT REPORTSTABILUSCOMBINED MANAGEMENT REPORT DEVELOPMENT OF
OPERATING SEGMENTS
Stabilus Group is organized and managed primarily on a regional
The table below sets out the development of our operating seg-
level. The three reportable operating segments of the Group are
ments for the fiscal years 2018 and 2017.
Europe, NAFTA, Asia / Pacific and RoW.
Operating segments
I N € M I L L I O N S
Europe
External revenue1)
Intersegment revenue1)
Total revenue1)
Adjusted EBIT
as % of total revenue
as % of external revenue
NAFTA
External revenue1)
Intersegment revenue1)
Total revenue1)
Adjusted EBIT
as % of total revenue
as % of external revenue
Asia / Pacific and RoW
External revenue1)
Intersegment revenue1)
Total revenue1)
Adjusted EBIT
as % of total revenue
as % of external revenue
Year ended Sept 30,
2018
2017
Change
% change
T _ 007
491.3
32.3
523.6
77.4
14.8%
15.8%
348.1
26.1
374.2
51.9
13.8%
14.9%
123.1
0.1
123.2
20.0
16.2%
16.2%
456.3
30.4
486.7
68.0
14.0%
14.9%
350.7
24.7
375.4
55.1
14.7%
15.7%
103.0
0.7
103.7
14.5
14.0%
14.1%
35.0
1.9
36.9
9.4
(2.6)
1.4
(1.2)
(3.2)
20.1
(0.6)
19.5
5.5
7.7%
6.3%
7.6%
13.8%
(0.7)%
5.7%
(0.3)%
(5.8)%
19.5%
(85.7)%
18.8%
37.9%
1) Revenue breakdown by location of Stabilus company (i. e. “billed-from view”).
33
STABILUSCOMBINED MANAGEMENT REPORTSTABILUSCOMBINED MANAGEMENT REPORT The external revenue generated by our European companies
translation effect amounted to €(27.3) million. At constant US dol-
increased from €456.3 million in fiscal year 2017 by €35.0 million
lar rates NAFTA´s revenue grew by 7.0%. Measured in US dollars
or 7.7% to €491.3 million in fiscal year 2018. This is driven by
the Automotive business grew by 6.7% (Powerise® business + 7.4%
growth in all European markets of the Automotive and Industrial
and Automotive Gas Spring business + 5.8%). The Industrial busi-
business. This increase was primarily driven by Industrial / Capital
ness grew by 7.7% (Vibration & Velocity business + 14.1%, Com-
Goods and Automotive Powerise®. Industrial / Capital Goods grew
mercial Furniture + 6.6% and Industrial / Capital Goods + 4.1%).
by 12.2% and contributed €15.9 million and Automotive Powerise®
Adjusted EBIT of the NAFTA segment decreased by 5.8% or €3.2 mil-
grew by 9.0% and contributed €9.0 million to Europe`s revenue
lion and the adjusted EBIT margin decreased in fiscal 2018 year by
growth. Adjusted EBIT of the European segment increased by 13.8%
80 basis points to 14.9% (PY: 15.7%).
or €9.4 million and the adjusted EBIT margin, i.e. adjusted EBIT in
percent of external revenue, increased in fiscal year 2018 by 90
The external revenue of our companies located in the region Asia /
basis points to 15.8% (PY: 14.9%).
Pacific and RoW increased from €103.0 million in fiscal year 2017
by €20.1 million or 19.5% to €123.1 million in fiscal year 2018.
The external revenue of our companies located in the NAFTA region
This increase is mainly driven by the Automotive Powerise® busi-
decreased from €350.7 million in fiscal year 2017 by €(2.6) million
ness which grew by €16.6 million, especially due to increased busi-
or (0.7)% to €348.1 million in fiscal year 2018. Industrial / Capital
ness volume following the ramp-up of the Powerise® production in
Goods contributed €(2.2) million and Automotive Gas Spring
our Chinese entity. In addition, the Vibration and Velocity Control
€(2.1) million to NAFTA´s development, offset by €2.0 million from
business grew by €2.5 million. Adjusted EBIT of the Asia / Pacific
the Vibration & Velocity Control business. The decrease in NAFTA is
and RoW segment increased by €5.5 million or 37.9% and the
generally driven by the relatively weaker US dollar, i.e. the currency
adjusted EBIT margin increased in fiscal year 2018 by 210 basis
translation of NAFTA´s revenue from US dollar to euro (average
points to 16.2% (PY: 14.1%).
rate per €1: $1.19 in FY2018 versus $1.10 in FY2017). This currency
FINANCIAL POSITION
Balance sheet
I N € M I L L I O N S
Assets
Non-current assets
Current assets
Total assets
Equity and liabilities
Total equity
Non-current liabilities
Current liabilities
Total liabilities
Total equity and liabilities
T _ 008
2018
2017
Change
% change
640.7
369.8
1,010.4
426.5
422.9
161.0
583.9
1,010.4
647.8
282.2
930.0
336.4
430.8
162.8
593.6
930.0
(7.1)
87.6
80.4
90.1
(7.9)
(1.8)
(9.7)
80.4
(1.1)%
31.0%
8.6%
26.8%
(1.8)%
(1.1)%
(1.6)%
8.6%
34
STABILUSCOMBINED MANAGEMENT REPORTSTABILUSCOMBINED MANAGEMENT REPORT TOTA L A S S E T S
unrealized actuarial gains on pensions (net of tax) amounting to
€0.5 million and unrealized gains from foreign currency translation
The Group’s balance sheet total increased from €930.0 million as
amounting to €4.1 million. In February 2018 dividends amounting
of September 30, 2017, by 8.6% to €1,010.4 million as of Septem-
to €(19.8) million were paid to our shareholders.
ber 30, 2018.
N O N - C U R R E N T A S S E T S
N O N - C U R R E N T L I A B I L I T I E S
Non-current liabilities decreased from €430.8 million as of Septem-
Our non-current assets decreased from €647.8 million as of Sep-
ber 30, 2017, by €(7.9) million to €422.9 million as of September 30,
tember 30, 2017, by (1.1%) or €(7.1) million to €640.7 million as
2018. This decrease is primarily due to the reduction of deferred
of September 30, 2018. This reduction is mainly attributable to the
tax liabilities by €(12.2) million reflecting the US tax reform and
€(21.7) million decrease of other intangible assets substantially
the necessary remeasurement of deferred tax positions of our US
resulting from the ongoing amortization of intangible assets from
entities, the release of deferred tax liabilities for unrealized foreign
the 2010 and 2016 purchase price allocations. This was partly
exchange gains, and in addition, the reduction of deferred tax lia-
offset by ongoing capacity expansion projects, i.e. the purchase of
bilities related to the amortization of the 2010 and 2016 purchase
property, plant and equipment (€36.6 million) and intangible
price allocations. The decrease is partly offset by the reclassification
assets (€10.9 million). Furthermore, the deferred taxes increased
of financial liabilities from short-term to long-term amounting to
by €3.0 million, mainly driven by the changes in the legal structure
€8.9 million. The pension liability decreased by €(1.1) million as a
of our US entities.
C U R R E N T A S S E T S
consequence of a slightly increased discount rate (September 30,
2017: 1.87% versus September 30, 2018: 2.00%) and other finan-
cial liabilities decreased by €(1.3) million due to an early settle-
ment of the finance lease arrangement for a Romania Powerise®
Current assets increased from €282.2 million as of September 30,
production building that is now owned by Stabilus.
2017, by 31.0% or 87.6 million to €369.8 million as of Septem-
ber 30, 2018. This is driven by an increase in the cash balance by
C U R R E N T L I A B I L I T I E S
€74.9 million which results from our strong cash flow in fiscal year
2018. In addition, trade accounts receivables increased by €6.1 mil-
Current liabilities decreased from €162.8 million as of Septem-
lion or 5.8% and inventories increased by €5.5 million or 6.5% in
ber 30, 2017, by €(1.8) million or 1.1% to €161.0 million. The
line with our revenue growth.
current financial liabilities decreased by the reclassification of
E Q U I T Y
financial liabilities from short-term to long-term amounting to
€8.9 million. This decrease is partly offset by an increase in trade
accounts payable by €4.1 million or 5.2% and an increase in
The Group’s equity increased from €336.4 million as of September 30,
provisions by €1.9 million or 5.6% in line with our revenue growth.
2017, by €90.1 million to €426.5 million as of September 30, 2018.
This increase results from the profit of €105.4 million that was
generated in the fiscal year 2018 and from other comprehensive
income of €4.6 million. Other comprehensive income comprises
35
STABILUSCOMBINED MANAGEMENT REPORTSTABILUSCOMBINED MANAGEMENT REPORT LIQUIDITY
C A S H F L O W F R O M O P E R AT I N G A C T I V I T I E S
C A S H F L O W F R O M F I N A N C I N G A C T I V I T I E S
Cash flow from operating activities increased by €23.6 million from
Cash outflow from financing activities decreased from €(83.7) mil-
€121.9 million in fiscal year 2017 to €145.5 million in fiscal year
lion in fiscal year 2017 by €58.2 million to €(25.5) million in fiscal
2018. This increase is mainly due to the strong revenue and earn-
year 2018. The high cash outflow in fiscal year 2017 is substantially
ings growth and partly offset by higher net working capital as a
due to repayments of the term loan facility amounting to € 62.5 mil-
consequence of the continuing growth.
lion. In addition, cash interest in fiscal year 2018 is €(4.4) million
C A S H F L O W F R O M I N V E S T I N G A C T I V I T I E S
est margin based on the improved net leverage ratio of the Group
lower compared to the fiscal year 2017 reflecting the lower inter-
Cash outflow for investing activities increased from €(44.1) million
offset by increased dividends of €(19.8) million (PY: €(12.4) mil-
in fiscal year 2017 to €(45.3) million in fiscal year 2018. This
lion) paid to our shareholders in February 2018.
and the reduced outstanding nominal amount. The decrease was
increase is due to higher capital expenditure in property plant and
equipment of €3.1 million and was partly offset by proceeds from
disposal of property plant and equipment.
Cash flows
I N € M I L L I O N S
Cash flow from operating activities
Cash flow from investing activities
Cash flow from financing activities
Net increase / (decrease) in cash
Effect of movements in exchange rates on cash held
Cash as of beginning of the period
Cash as of end of the period
Year ended Sept 30,
2018
145.5
(45.3)
(25.5)
74.7
0.2
68.1
143.0
2017
121.9
(44.1)
(83.7)
(5.9)
(1.0)
75.0
68.1
T _ 009
Change
% change
23.6
(1.2)
58.2
80.6
1.2
(6.9)
74.9
19.4%
2.7%
(69.5%)
<(100.0)%
<(100.0)%
9.2%
>100.0%
36
STABILUSCOMBINED MANAGEMENT REPORTSTABILUSCOMBINED MANAGEMENT REPORT F R E E C A S H F L O W ( F C F )
Free cash flow (FCF) is defined as the total of cash flow from oper-
the Group’s ability to generate cash which can be used for further
ating and investing activities. The Group considers FCF as an essen-
investments, distributions to shareholders and debt service. The
tial alternative performance measure as it aids in the evaluation of
following table sets out the composition of FCF:
Free cash flow
T _ 010
I N € M I L L I O N S
Cash flow from operating activities
Cash flow from investing activities
Free cash flow
N E T L E V E R A G E R AT I O
Year ended Sept 30,
2018
145.5
(45.3)
100.2
2017
121.9
(44.1)
77.8
Change
% change
23.6
(1.2)
22.4
19.4%
2.7%
28.8%
The net leverage ratio is defined as net financial debt divided by
The net leverage ratio is presented because we believe it is a use-
adjusted EBITDA.
ful indicator to evaluate the Group’s debt leverage and financing
Net financial debt is the nominal amount of financial debt, i.e.
structure.
current and non-current financial liabilities excluding other finan-
The net leverage ratio decreased from 1.5x in fiscal year 2017 to
cial liabilities, less cash and cash equivalents. Adjusted EBITDA is
1.1x in fiscal year 2018. See the following table:
defined as EBIT before depreciation / amortization and before
exceptional non-recurring items (e.g. restructuring or one-time
advisory costs).
Net leverage ratio
I N € M I L L I O N S
Financial debt
Cash and cash equivalents
Net financial debt
Adjusted EBITDA
Net leverage ratio
Year ended Sept 30,
2018
342.2
(143.0)
199.2
189.7
1.1x
2017
342.5
(68.1)
274.4
179.5
1.5x
T _ 011
Change
% change
(0.3)
(74.9)
(75.2)
10.2
(0.1%)
>100.0%
(27.4%)
5.7%
37
STABILUSCOMBINED MANAGEMENT REPORTSTABILUSCOMBINED MANAGEMENT REPORT Financial debt
I N € M I L L I O N S
Financial liabilities (non-current)
Financial liabilities (current)
Adjustment carrying value
Financial debt
Adjusted EBITDA
I N € M I L L I O N S
Profit from operating activities (EBIT)
Depreciation
Amortization
EBITDA
Adjustments
Adjusted EBITDA
Year ended Sept 30,
2018
318.9
1.1
22.2
342.2
T_012
2017
312.0
10.0
20.5
342.5
T _ 013
Year ended Sept 30,
2018
131.9
25.5
32.3
189.7
–
189.7
2017
118.4
26.4
34.7
179.5
–
179.5
Change
% change
13.5
(0.9)
(2.4)
10.2
–
10.2
11.4%
(3.4)%
(6.9)%
5.7%
n/a
5.7%
38
STABILUSCOMBINED MANAGEMENT REPORTSTABILUSCOMBINED MANAGEMENT REPORT STATUTORY RESULTS
OF OPERATIONS AND
FINANCIAL POSITION
OF STABILUS S. A.
increase in the cash balance by €28.0 million which reflects the
distribution from affiliated companies.
The Company’s capital and reserves decreased from €619.9 million as
of September 30, 2017, to €601.8 million as of September 30, 2018,
due to the dividend payment to our shareholders of €19.8 million.
This was partly offset by profit for the financial year amounting to
€1.7 million.
For the statutory annual accounts of Stabilus S. A., please refer
to Chapter D.
Results of operations
The Company’s income results from services that are provided to
other Stabilus Group entities based on service level agreements
RISKS AND
OPPORTUNITIES
amounting to €4.2 million (PY: €3.5 million) and income from
affiliated undertakings of €2.5 million (PY: €47.2 million), which
Risk management and control over
financial reporting in the Stabilus Group
relates to the dividend distribution of Blitz F10 neun GmbH,
Germany.
The Company considers Risk Management (RM) to be a key part of
effective management and internal control. The Company strives for
Other external expenses increased from €2.1 million in fiscal year
effective RM and financial navigation to safeguard the assets of
2017 to €3.2 million in fiscal year 2018 basically related to con-
the Company and to proactively support the Company’s strategic
sulting fees.
and compliance initiatives. The goal of RM is to help the Company
to operate more effectively in a dynamic environment by providing
In fiscal year 2018 we have no comparable amount for value
a framework for a systematic approach to risk management and
adjustments in respect of financial assets.
exploring opportunities with an acceptable level of risk. The Super-
The profit for fiscal year 2018 amounted to €1.7 million (PY:
operational and financial results as well as the related risks.
visory Board and the Management Board regularly discuss the
€29.9 million).
Financial position
Risk Management covers financial, strategic, compliance as well
as operational aspects. Operational risk is the risk of direct or indi-
rect loss arising from a wide variety of causes associated with the
Total assets decreased from €629.8 million as of September 30, 2017,
Group’s processes, personnel, technology and infrastructure, and
to €605.1 million as of September 30, 2018.
from external factors other than credit, market and liquidity risks
such as those arising from legal and regulatory requirements and
Fixed assets essentially comprise shares in affiliated undertakings
generally accepted standards of corporate behavior. These opera-
which decreased from €628.4 million as of September 30, 2017, to
tional risks arise from all of the Group’s operations. The Group’s
€574.4 million as of September 30, 2018. The Company decreased
objective is to manage operational risk in a way to balance the
its investment in Stable II S. à r. l. by distributing €28,000 thousand
avoidance of financial losses and damage to the Group’s reputa-
in May 2018 and €26,000 thousand in September 2018 out of the
tion with overall cost effectiveness, as well as avoiding control
share premium account of Stable II S. à r. l.
procedures that restrict initiative and creativity. The Company’s pol-
Current assets increased from €1.0 million as of September 30, 2017,
and cash flow management and protection of Group equity capi-
to €30.4 million as of September 30, 2018. This driven by an
tal against financial risks. As part of its evolution, the Company
icy on managing financial risks seeks to ensure effective liquidity
39
STABILUSCOMBINED MANAGEMENT REPORTSTABILUSCOMBINED MANAGEMENT REPORT implements continuous improvements in its risk management and
will continue to be influenced, to a significant extent, by the general
internal control systems.
state and the performance of the global economy.
Our accounting control system is designed to ensure all business
Although the global economy has recovered a lot from the severe
transactions are correctly and promptly accounted for and that
downturn in 2008 and 2009, the recent volatility of the financial
reliable data on the Company’s financial situation is available. It
markets and also the slower than expected economic growth in
ensures compliance with legal stipulations, accounting standards
Asia show that there can be no assurance that any recovery is sus-
and accounting rules. By separating financial functions and through
tainable or that there will be no recurrence of the global financial
ongoing review, we ensure that potential errors are identified on
and economic crisis or similar adverse market conditions.
a timely basis and accounting standards are complied with.
Stabilus manages these risks and opportunities by operating in
Our internal control system is an integral component of the risk
different regions and markets for local and global customers.
management. The purpose of our internal control system for account-
ing and reporting is to ensure its compliance with legal stipulations,
W E O P E R AT E I N C Y C L I C A L I N D U S T R I E S
the principles of proper accounting, the rules on the International
Financial Reporting Standards as adopted by the EU and with Group
Our business is characterized by high fixed costs. Should our facilities
standards. In addition, we perform assessments to help identify and
be underutilized, this could result in idle capacity costs, write-offs
minimize any risk with a direct influence on our financial reporting.
of inventories and losses on products due to falling average sales
We monitor changes in accounting standards and enlist the advice
prices. Furthermore, falling production volumes cause declines in
of external experts to reduce the risk of accounting misstatements
revenue and earnings. On the other hand, our facilities might have
in complex issues.
insufficient capacity to meet customer demand if the markets in
which we are active grow faster than we have anticipated.
The Company and individual entity financial statements are subject
to external audits which act as an independent check and monitor-
Our automotive business, from which we generated 63% of our rev-
ing mechanism of the accounting system and its output. The princi-
enue in the fiscal year ended September 30, 2018, sells its products
pal risks that could have a material impact on the Group are set
primarily to automotive original equipment manufacturers (“OEMs”)
out in the Note 32 of the Consolidated Financial Statements and
in the automotive industry. These sales are cyclical and depend,
are summarized below.
Risks and opportunities related to the
markets in which we operate
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 con-
sumer financing. Given the variety of such economic parameters influ-
encing the global automotive demand, the volume of automotive pro-
We are exposed to risks and opportunities associated with the
duction has historically been, and will continue to be, characterized
performance of the global economy and the performance of the
by a high level of fluctuation, making it difficult for us to accurately
economy in the jurisdictions in which we operate.
predict demand levels for our products aimed at automotive OEMs.
Due to our global presence, we are exposed to substantial risks
We generated, in the aggregate, 37% of our revenue in the fiscal
and opportunities associated with the performance of the global
year ended September 30, 2018, from sales to our industrial custom-
economy. In general, demand for our products is dependent on the
ers. We sell our products to customers in diverse industries, including
demand for automotive products as well as for commercial vehicles,
agricultural machines, renewable energy (in particular solar, wind),
agricultural machinery, medical equipment, renewable energy (in
railway, aircraft applications, commercial vehicles, marine applica-
particular solar, wind), aerospace, marine and furniture components,
tions, furniture, health care and production equipment. These sales
which in turn is directly related to the strength of the global econ-
depend on the industrial production level in general as well as on the
omy. Therefore, our financial performance has been influenced, and
development of new products and technologies by our customers,
40
STABILUSCOMBINED MANAGEMENT REPORTSTABILUSCOMBINED MANAGEMENT REPORT which include our products as component parts. Stabilus manages
changes in local economic conditions; governmental restrictions on
these opportunities and risks by operating in different regions and
foreign investment, transfer or repatriation of funds; protectionist
markets for the local and global customers.
trade measures, such as anti-dumping measures, duties, tariffs
or embargoes; prohibitions or restrictions on acquisitions or joint
The business environment in which we operate is characterized by
ventures; changes in laws or regulations and unpredictable or
strong competition, which affects some of our products and markets,
unlawful government actions; the difficulty of enforcing agreements
which could reduce our revenue or put continued pressure on our
and collecting receivables through foreign legal systems; variations in
sales prices.
protection of intellectual property and other legal rights; potential
nationalization of enterprises or other expropriations; and political or
The markets in which we operate are competitive and have been
social unrest or acts of sabotage or terrorism. As personnel costs
characterized by changes in market penetration, increased price
have a significant effect on our business, we are also exposed to the
competition, the development and introduction of new products,
risks of labor cost inflation and limited employment contract flexi-
product designs and technologies by significant existing and new
bility in the countries in which our production facilities are located
competitors. The majority of gas springs and electromechanical lift-
and where we have sales personnel. Any of these risks could have a
ing and closing systems manufactured globally are used for either
material adverse effect on our business, financial condition and
automotive, industrial or commercial furniture applications, which
results of operations.
are core markets for us. Our competitors are typically regional com-
panies and our competition with them is generally on a regional
W E A R E E X P O S E D TO O P P O R T U N I T I E S A N D R I S K S
scale. We compete primarily on the basis of price, quality, timeliness
A S S O C I AT E D W I T H M A R K E T T R E N D S A N D D E V E L-
of delivery and design as well as the ability to provide engineering
O P M E N T S
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
There can be no assurance that (i) we will be successful in develop-
future, then more and more of our customers could decide to pro-
ing new products or systems or in bringing them to market in a
cure products from our competitors.
timely manner, or at all; (ii) products or technologies developed by
others will not render our offerings obsolete or non-competitive;
Our efforts to expand in certain markets are subject to a variety of
(iii) our customers will not substitute our products with competing
business, economic, legal and political risks.
products or alternate technologies (such as third arm systems,
hydraulic drives or hinge / direct drives); (iv) the market will accept
We manufacture our products in several countries and we market
our innovations; (v) our competitors will not be able to produce our
and sell our products worldwide. We are actively operating and
non-patented products at lower costs than we can; and (vi) we will
expanding our operations in various markets, with a focus on the
be able to fully adjust our cost structure in the event of contraction
rapidly growing and emerging markets in the Asia / Pacific region,
of demand.
where we have production plants in China and South Korea, operate
a wide network of representative sales offices and employ our own
The Company develops appropriate strategies as a response to
sales force and distribution network. We plan to expand our Asian
these or similar market trends and to enhance existing products,
production capacities to meet growth expectations and supplement
develop new products or keep pace with developing technologies,
demand with our other regional production plants as needed.
to counter loss of growth opportunities, pressure on margins or
the loss of existing customers. We devote resources to the pursuit
Potential social, political, legal, and economic instability may pose
of new technologies and products. In addition, technological
significant risks to our ability to conduct our business and expand
advances and wider market acceptance of our Powerise® automatic
our activities in certain markets. Inherent in our international opera-
drive systems (or the development and wider market acceptance
tions is the risk that any number of the following circumstances
of similar automatic lid drive systems by our competitors) could
could affect our operations: underdeveloped infrastructure; lack of
result in cannibalization of our gas spring applications.
qualified management or adequately trained personnel; currency
exchange controls, exchange rate fluctuations and devaluations;
41
STABILUSCOMBINED MANAGEMENT REPORTSTABILUSCOMBINED MANAGEMENT REPORT Risks and opportunities related to our
business
L E G A L , TA X AT I O N A N D E N V I R O N M E N TA L R I S K S
A N D O P P O R T U N I T I E S
We are exposed to fluctuations in prices of prefabricated materials
We are exposed to warranty and product liability claims.
and components.
As a manufacturer, we are subject to product liability lawsuits and
We procure large quantities of prefabricated materials and compo-
other proceedings alleging violations of due care, violations of war-
nents from third-party suppliers. The prices of prefabricated materi-
ranty obligations, treatment errors, safety provisions and claims arising
als, components and manufacturing services we purchase from our
from breaches of contracts (like delivery delays), recall actions or
suppliers depend on a number of factors, including to a limited
fines imposed by government or regulatory authorities in relation
extent the development of prices of raw materials used in these
to our products. Any such lawsuits, proceedings and other claims
products, such as steel, copper, rubber and water, as well as energy,
could result in increased costs for us. Additionally, authorities could
which have been volatile in the past.
prohibit the future sale of our products, particularly in cases of safety
concerns. The aforementioned scenarios could result in loss of market
So far, this has not resulted in a general increase in the cost of pre-
acceptance, loss of revenue and loss of customers, in particular
fabricated materials and components we procure for the manufac-
against the background that many of our products are components
ture of our products. However, it cannot be excluded that this vola-
which often have a major impact on the overall safety, durability and
tility may result in a cost increase in the future. If we are not able
performance of our customers’ end-product.
to compensate for or pass on our cost increases to customers, such
price increases could have a material adverse impact on our financial
The risks arising from such warranty and product liability lawsuits,
results. Even to the extent that we are successful in compensating
proceedings and other claims are insured as we consider economi-
for or passing on our increased costs to our customers by increasing
cally reasonable, but the insurance coverage could prove insufficient
prices on new products, the positive effects of such price increases
in individual cases. Any major defect in one of our products could
may not occur in the periods in which the additional expenses have
also have a material adverse effect on our reputation and market
been incurred, but in later periods. If costs of raw materials and
perception, which in turn could have a significant adverse effect on
energy rise, and if we are not able to undertake cost saving meas-
our revenue and results of operations.
ures elsewhere in our operations or increase to an adequate level
the selling prices of our products, we will not be able to compen-
In addition, vehicle manufacturers are increasingly requiring a contri-
sate such cost increases, which could have a material adverse effect
bution from, or indemnity by, their suppliers for potential product
on our business, financial condition and results of operations. The
liability, warranty and recall claims and we have been subject to
long-term increase of our costs (and resultant increase in the price
continuing efforts by our customers to change contract terms and
of our products) may also negatively impact demand for our products.
conditions concerning warranty and recall participation.
Our future business success depends on our ability to maintain the
Furthermore, we manufacture many products pursuant to OEM
high quality of our products and processes. For customers, one of
customer specifications and quality requirements. If the products
the determining factors in purchasing our components and systems
manufactured and delivered by us are deemed not to be fit for use
is the high quality of our products and manufacturing processes.
by our OEM customers at the agreed date of delivery, production of
A decrease in the actual and perceived quality of these products
the relevant products is generally discontinued until the cause of the
and processes could damage our image and reputation as well as
product defect has been identified and remedied. Furthermore, our
those of our products. Any errors or delays caused by mistakes or
OEM customers could potentially bring claims for damages on the
miscalculations in our project management could negatively affect
basis of breach of contract, even if the cause of the defect is remedied
our customers’ own production processes, resulting in reputational
at a later point in time. In addition, failure to perform with respect to
damage to us as supplier as well as to the affected customer as
quality requirements could negatively affect the market acceptance
manufacturer. In addition, defective products could result in loss of
of our other products and our market reputation in various market
sales, loss of customers and loss of market acceptance.
segments.
42
STABILUSCOMBINED MANAGEMENT REPORTSTABILUSCOMBINED MANAGEMENT REPORT We are and may become party to certain disadvantageous contracts
to pay compensation or damages for infringements or could be
pursuant to which we are required to sell certain products at a loss
forced to purchase licenses to make use of technology from third
or to agree to broad indemnities. For example, we may enter into a con-
parties. This could have a material adverse effect on our business,
tract at an agreed price and production costs may end up exceeding
financial condition and results of operations.
what was assumed in the development phase. If the assumptions on
which we rely in contract negotiations turn out to be inaccurate, this
We are subject to risks from legal, administrative and arbitration
could have an adverse effect on our revenue and results of operations.
proceedings.
We are exposed to certain risks and opportunities with regards to
We are involved in a number of legal and administrative proceed-
our intellectual property, its validity and the intellectual property of
ings related to products, patents and other matters incidental to
third parties.
our business and could become involved in additional legal, admin-
istrative and arbitration proceedings in the future. These proceed-
Our products and services are highly dependent upon our technolo-
ings or potential proceedings could involve, in particular in the
gical know-how and the scope and limitations of our proprietary
United States, substantial claims for damages or other payments.
rights therein. We have obtained or have applied for a number of
Based on a judgment or a settlement agreement, we could be
intellectual property rights, which can be difficult, lengthy and expen-
obligated to pay substantial damages. Our litigation costs and
sive to procure. Furthermore, patents may not provide us with mean-
those of third parties could also be significant.
ingful protection or a commercial advantage. In addition, where we
incorporate an individual customer’s input to create a product that
Due to our high market share, we may be exposed to legal risks
responds to a particular need, we face the risk that such customer
regarding anti-competition fines and related damage claims.
will claim ownership rights in the associated intellectual property.
Our market share in most of the markets in which we operate is
Our competitors, suppliers, customers and other third parties also
high, which may induce competition authorities to initiate proceed-
submit a large number of intellectual property protection applica-
ings or third parties to file claims against us alleging violation of
tions. Such other parties could hold effective and enforceable intel-
competition laws. A successful anti-competition challenge could
lectual property rights to certain processes, methods or applications
adversely affect us in a variety of ways. For example, it could result in
and consequently could assert infringement claims (including illegiti-
the imposition of fines by one or more authorities and / or in third
mate ones) against us.
parties (such as competitors or customers) initiating civil litigation
claiming damages caused by anti-competitive practices. In addition,
A major part of our know-how is not patented and cannot be pro-
anti-competitive behavior may give rise to reputational risk to us.
tected through intellectual property rights. Consequently, there is a
The realization of this risk could have a material effect on our busi-
risk that third parties, in particular competitors, may utilize our
ness, financial condition and results of operations.
know-how without incurring any expenses of their own. Our intel-
lectual property is often discovered by and during the course of
Interest carry-forwards may be forfeited in part or in full as a result
our employees’ employment. As a result, there is a risk that we
of subsequent share sales.
have failed or will fail to properly utilize inventions of our employ-
ees. Present or former employees who made or make employee
Some Stabilus subsidiaries have significant interest carry-forwards as
inventions might continue to be the owners of the valuable rights to
a result of the application of the statutory interest ceiling rules that
inventions if we fail to claim the invention in a timely manner.
limit the deduction of net interest expenses for tax purposes. The
The realization of any of these risks could give rise to intellectual
quent assessment periods the then current interest expenses do not
property claims against us. Such claims, if successful, could require us
reach the interest ceiling applicable to the relevant assessment
to cease manufacturing, using or marketing the relevant technolo-
period, and, thus, reduce the tax payable by the relevant subsidiary.
interest carry-forward may be deducted to the extent that in subse-
gies or products in certain countries or be forced to make changes to
manufacturing processes or products. In addition, we could be liable
43
STABILUSCOMBINED MANAGEMENT REPORTSTABILUSCOMBINED MANAGEMENT REPORT However, the interest carry-forward will be forfeited on a pro rata
could therefore be exposed to related damage claims in the future.
base or in full if more than a defined percentage of the shares in
Even if we have contractually excluded or limited our liability in
entities are directly or indirectly transferred to a new shareholder,
connection with the sale of such properties, we could be held
persons related to such shareholder or a group of shareholders act-
responsible for currently unknown contamination on properties
ing in the same interest, or in case of similar transactions (such as a
which we previously owned or used.
capital increase) that result in a change of the shareholder structure.
Such forfeiture would increase the tax payable by the relevant sub-
The in-house legal department monitors these risks continuously and
sidiary if without the forfeiture the interest carry-forward could have
reports regularly to Group management and the Supervisory Board.
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.
Risks and opportunities related to our
capital structure
Many of the sites at which we operate have been used for industrial
Due to our high level of debt we face potential liquidity risks.
purposes for many years, leading to risks of contamination and the
resulting site restoration obligations. In addition, we could be held
Our cash from operating activities, current cash resources and
responsible for the remediation of areas adjacent to our sites if these
existing sources of external financing could be insufficient to meet
areas were potentially contaminated due to our activities. Ground-
our further capital needs, especially if our sales decrease signifi-
water contamination was discovered at a site in Colmar, Pennsylva-
cantly. Disruptions in the financial markets, including the bank-
nia operated by us from 1979 to 1998. In June 2012, the U.S. Envi-
ruptcy, insolvency or restructuring of a number of financial institu-
ronmental Protection Agency (“EPA”) issued an administrative order
tions, and restricted availability of liquidity could adversely impact
against our U.S. subsidiary and determined requirements in respect
the availability and cost of additional financing for us and could
of the remedy and the remedy cost. Our subsidiary, together with the
adversely affect the availability of financing already arranged or
other responsible parties, is requested to reimburse the EPA for past
committed. Our liquidity could also be adversely impacted if our
and current expenses and to bear the remediation costs. If additional
suppliers tighten terms of payment as the result of any decline in
contamination is discovered in the future, the competent authorities
our financial condition or if our customers were to extend their
could assert further claims against us, as the owner or tenant of the
normal payment terms.
affected plots, for the examination or remediation of such soil or
groundwater contamination, or order us to dispose of or treat con-
Stabilus has set an appropriate liquidity risk management frame-
taminated soil excavated in the course of construction. We could also
work for the management of the Group’s short, medium and long-
be required to indemnify the owners of plots leased by us or of other
term funding and liquidity requirements. The Group manages
properties, if the authorities were to pursue claims against the
liquidity risk by regular reviews, maintaining certain cash reserves,
relevant owner of the property and if we caused the contamina-
as well as open credit lines.
tion. Costs typically incurred in connection with such claims are gen-
erally difficult to predict. Also, if any contamination were to become
We are exposed to risks and opportunities associated with changes
the subject of a more intense public discussion, there is a risk that
in currency exchange rates.
our reputation or relations with our customers could be harmed.
We operate worldwide and are therefore exposed to financial risks
Furthermore, at some of the sites at which we operate, or at which
that arise from changes in exchange rates. Currency exchange fluc-
we operated in the past, small quantities of hazardous materials
tuations could cause losses if assets denominated in currencies
were used in the past, such as asbestos-containing building materi-
with a falling exchange rate lose value, while at the same time
als used for heat insulation. While we consider it unlikely, it cannot
liabilities denominated in currencies with a rising exchange rate
be ruled out that the health and safety of third parties (such as for-
appreciate. In addition, fluctuations in foreign exchange rates could
mer employees) may have been affected due to the use of such
enhance or minimize fluctuations in the prices of materials, since
hazardous materials or that other claims may be asserted and we
we purchase a considerable part of the prefabricated materials
44
STABILUSCOMBINED MANAGEMENT REPORTSTABILUSCOMBINED MANAGEMENT REPORT which we source from foreign currencies. As a result of these fac-
tors, fluctuations in exchange rates could affect our results of oper-
ations. 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, 2018.
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 Septem-
ber 30, 2018, these foreign exchange risks are not hedged against
by using derivative financial instruments. Our net foreign invest-
ments 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 con-
vert the relevant items into Euro when preparing our consolidated
financial statements. Translation risks are generally not hedged.
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.
45
STABILUSCOMBINED MANAGEMENT REPORTSTABILUSCOMBINED MANAGEMENT REPORT CORPORATE GOVERNANCE
the Supervisory Board are described in the section “Management
and Supervisory Board of Stabilus S. A.”.
As a Luxembourg société anonyme, the Company is subject to the
The Annual General Meeting shall be held at such time as specified
corporate governance regime as set forth in particular in the law of
by the Management Board and the Supervisory Board in the con-
August 10, 1915, on commercial companies. As a Company whose
vening notice. The Management Board and Supervisory Board may
shares are listed on a regulated market, the Company is further
convene extraordinary general meetings as often as the Company’s
subject to the law of May 24, 2011, on the exercise of certain share-
interests so require. An extraordinary general shareholders’ meet-
holder rights in listed companies.
ing must be convened upon the request of one or more sharehold-
ers who together represent at least one tenth of the Company’s
As a Luxembourg société anonyme whose shares are exclusively
share capital.
listed on a regulated market in Germany, the Company is not
required to adhere to the Luxembourg corporate governance
Each share entitles the holder to one vote. The right of a shareholder
regime applicable to companies that are traded in Luxembourg or
to participate in a General Meeting and to exercise the voting
to the German corporate governance regime applicable to stock
rights attached to his shares are determined with respect to the
corporations organized in Germany. The Company has decided to
shares held by such shareholder the 14th day before the General
set up own corporate governance rules as described in the follow-
Meeting. Each shareholder can exercise his voting rights in person,
ing paragraphs rather than to confirm such corporate governance
through a proxyholder or in writing (if provided for in the relevant
regimes in order to build up a corporate governance structure
convening notice).
which meets the specific needs and interests of the Company.
From fiscal year 2018 on, Stabilus is obliged by the European direc-
on takeover bids which has been implemented by Article 11 of the
tive and Luxembourg law to report on non-financial and diversity
Luxembourg Law on Takeovers of May 19, 2006, (the “Law on
information. Stabilus’ first Non-Financial Report will be published
Takeovers”) is set forth here below under “Disclosure Regarding
with this this Annual Report, i.e. on December 14, 2018.
Article 11 of the Law on Takeovers of May 19, 2006”.
The information required by Article 10.1 of Directive 2004 / 25 / EC
The internal control systems and risk management for the estab-
D I S C L O S U R E S P U R S U A N T TO A R T I C L E 1 1
lishment of financial information is described in the section
O F T H E L U X E M B O U R G L A W O N TA K E O V E R S
“Risk management and control over financial reporting in the
O F M AY 1 9 , 2 0 0 6
Stabilus Group”.
A) For information regarding the structure of capital, reference is
According to the Articles of Incorporation of the Company, the
made to Note 21 of the Consolidated Financial Statements.
Management Board must be composed of at least two Management
B) The Articles of Incorporation of the Company do not contain any
Board members, and the Supervisory Board must be composed of
restrictions on the transfer of shares of the Company.
at least three Supervisory Board members. The Supervisory Board
C) According to the voting rights notifications received in fiscal
has set up the following committees in accordance with the Articles
year 2018, the following shareholders held more than 5% of
of Incorporation: Audit Committee and Remuneration Committee.
total voting rights attached to Stabilus shares as of September
The Audit Committee is responsible for the consideration and eval-
30, 2018: Marathon Asset Management LLP, London, UK (direct:
uation of the auditing and accounting policies and its financial con-
1,745,599 voting rights attached to shares or 7.07% of total
trols and systems. The Remuneration Committee is responsible for
voting rights, indirect: 1,459,614 voting rights attached to
making recommendations to the Supervisory Board and the Manage-
shares or 5.91% of total voting rights), BlackRock, Inc., Wilm-
ment Board on the terms of appointment and the benefits of the
ington, DE, USA (indirect: 1,387,422 voting rights attached to
managers of the Company. Further details on the composition and
shares or 5.62% of total voting rights and 639,767 voting rights
purpose of these committees and of the Management Board and
or 2.59% of total voting rights, through financial instruments
46
STABILUSCOMBINED MANAGEMENT REPORTSTABILUSCOMBINED MANAGEMENT REPORT according to Article 13(1)(b) of Directive 2004 / 109 / EC) and
– The Management Board is vested with the broadest powers
Ameriprise Financial, Inc., Minneapolis, MN, USA (indirect:
to perform or cause to be performed any actions necessary
1,271,128 voting rights attached to shares or 5.15% of total
or useful in connection with the purpose of the Company.
voting rights.
– All powers not expressly reserved by the Luxembourg Com-
panies Act or by the Articles of Incorporation to the General
D) The control rights of any shares issued in connection with
Meeting or the Supervisory Board fall within the authority
employee share schemes are exercised directly by the respective
of the Management Board.
employee.
– Certain transactions and measures are subject to the prior
E) The Articles of Incorporation of the Company do not contain any
approval of the Supervisory Board on the terms set out in
restrictions on voting rights.
the Articles of Incorporation.
F) There are no agreements with shareholders which are known
– The Management Board may appoint one or more persons,
to the Company and may result in restrictions on the transfer
who may be a shareholder or not, or who may be a member
of securities or voting rights within the meaning of Directive
of the Management Board or not, to the exclusion of any
2004 / 109 / EC (Transparency Directive).
member of the Supervisory Board, who shall have full
G) Rules governing the appointment and replacement of Manage-
authority to act on behalf of the Company in all matters
ment Board members and the amendment of the Articles of
pertaining to the daily management and affairs of the
Incorporation:
Company.
– The Management Board members are appointed by the
– The Management Board is also authorized to appoint a per-
Supervisory Board by the majority of the votes of the mem-
son, either a director or not, to the exclusion of any member
bers present or represented (abstention or non-participation
of the Supervisory Board, for the purposes of performing
being taken into account as a vote against the appoint-
specific functions at every level within the Company.
ment), or in the case of a vacancy, by way of a decision of
– The Management Board may also appoint committees and
the remaining Management Board members for the period
sub-committees in order to deal with specific tasks, to
until the next Supervisory Board Meeting.
advise the Management Board or to make recommendations
– Management Board members serve for the following terms:
to the Management Board and / or, as the case may be, the
Chief Executive Officer four years, Chief Financial Officer
General Meeting, the members of which may be selected
three years and other Board members one year. Manage-
either from among the members of the Management Board
ment Board members are eligible for re-appointment.
or not, to the exclusion of any member of the Supervisory Board.
– Management Board members may be removed at any time
– The Management Board does not have currently any author-
with or without cause by the Supervisory Board by a simple
ity to issue shares in the Company under the Articles of
majority of the votes.
Incorporation.
– Resolutions to amend the Articles of Incorporation may be
– The Management Board does not have currently any author-
adopted by a majority of two thirds of the votes validly cast,
ity to buy back shares under the Articles of Incorporation or
without counting the abstentions, if the quorum of half of
a buy-back program.
the share capital is met. If the quorum requirement of half
I) There are no significant agreements to which the Company is
of the share capital of the Company is not met at the
party and which take effect, alter or terminate upon a change of
Annual General Meeting, then the shareholders may be
control of the Company following a takeover bid.
re-convened to a second General Meeting. No quorum is
J) There are no agreements between the Company and its Manage-
required in respect of such second General Meeting and the
ment Board members or employees providing for compensation
resolutions are adopted by a supermajority of two-thirds of
if they resign or are made redundant without valid reason or if
the votes validly cast, without counting the abstentions.
their employment ceases because of a takeover bid.
H) Powers of the Management Board:
– The Company is managed by a Management Board under
the supervision of the Supervisory Board.
47
STABILUSCOMBINED MANAGEMENT REPORTSTABILUSCOMBINED MANAGEMENT REPORT S T A B I L U S
C O M B I N E D M A N A G E M E N T R E P O R T
SUBSEQUENT EVENTS
We intend to grow our automotive and industrial business in all
operating segments, i.e. in Europe, NAFTA as well as Asia / Pacific
and RoW. Considering the current heterogeneous market environ-
As of December 12, 2018, there were no further events or develop-
ment, we expect revenue growth of approximately 5% (y / y con-
ments that could have materially affected the measurement and pres-
stant currency rate of 1.19 $ / € in fiscal year 2019). In Europe and
entation of Group’s assets and liabilities as of September 30, 2018.
NAFTA we estimate a revenue growth rate of around 3% to 5%.
OUTLOOK
As a result of our ongoing initiatives in China, we aim to grow in
Asia / Pacific and RoW with a double digit revenue growth rate.
Assuming an average currency rate of 1.19 $ / €, we expect total
revenue of approximately €1,010 million or a revenue growth of
approximately 5.0% and an adjusted EBIT margin of around
As last year the global economic environment continues to remain
15.5% for fiscal year 2019.
challenging and the IMF in substance predicts constant growth
rates on a global level. The overall growth rate is projected to be
A five dollar cent lower currency rate assumption (1.14 $ / €) would
3.7% in 2018 and 3.7% in 2019, compared to a growth rate of
lead to a €15 million higher revenue expectation (approximately
3.7% in 2017. Considering the individual countries separately
€1,025 million). A five dollar cent higher currency rate assumption
there is a mixed picture of the development of growth rates, as
(1.24 $ / €) would lead to a €15 million lower revenue expectation
reflected in the October 2018 World Economic Outlook.
(approximately €995 million).
As important markets for Stabilus, the Euro Area shows a decreas-
ing growth rate of 2.0% in fiscal year 2018 versus 2.4% in fiscal
year 2017, whereas the United States shows an increased growth
rate of 2.9% in fiscal year 2018 versus 2.2% in fiscal year 2017.
China still shows a decreased but still strong growth rate with
6.6% for fiscal year 2018 versus 6.9% in fiscal year 2017.
IHS Markit, an information services and automotive forecasts provider,
expects the worldwide production of light vehicles to increase to
around 95.8 million units in calendar year 2018 (+ 0.7% y / y) and
around 97.7 million units in calendar year 2019 (+ 2.0% y / y). See
table T_002 on page 28 for further details. Considering our prod-
uct markets we aim to outperform the growth rate of the world-
wide light-vehicle production (+ 0.7%) and the growth rate of the
global economy (GDP growth: 3.7% in 2018) respectively.
48
S T A B I L U S
C O M B I N E D M A N A G E M E N T R E P O R T
P A G E 4 9 – 1 2 8
P A G E 4 9 – 1 2 8
FINANCIAL
STATEMENTS
CONSOLIDATED FINANCIAL STATEMENTS
for the fiscal year ended September 30, 2018
51 CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
52 CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
54 CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
55 CONSOLIDATED STATEMENT
OF CASH FLOWS
56 NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
56 1 General Information
57 2 Basis for presentation
67 3 Accounting policies
75 4 Revenue
76 5 Cost of sales, research and develop-
ment, selling and administrative
expenses
77 6 Other income
78 7 Other expenses
78 8 Finance income
79 9 Finance costs
80 10 Income tax expense
83 11 Earnings per share
84 12 Property, plant and equipment
85 13 Goodwill
87 14 Other intangible assets
88 15 Other financial assets
89 16 Other assets
89 17 Inventories
90 18 Trade accounts receivable
90 19 Current tax assets
91 20 Cash and cash equivalents
91 21 Equity
92 22 Financial liabilities
93 23 Other financial liabilities
94 24 Provisions
96 25 Pension plans and similar obligations
99 26 Trade accounts payable
99 27 Current tax liabilities
100 28 Other liabilities
100 29 Leasing
101 30 Contingent liabilities and other
financial commitments
103 31 Financial instruments
105 32 Risk reporting
108 33 Capital management
109 34 Notes to the consolidated statement
of cash flows
109 35 Segment reporting
113 36 Share-based payments
118 37 Auditor’s fees
118 38 Related party relationships
119 39 Remuneration of key management
personnel
119 40 Subsequent events
120 RESPONSIBILITY STATEMENT
121 MANAGEMENT BOARD OF
STABILUS S. A.
122 SUPERVISORY BOARD OF
STABILUS S. A.
123 INDEPENDENT AUDITOR’S REPORT
50
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
for the fiscal year ended September 30, 2018
Consolidated statement of comprehensive income
T _ 014
I N € T H O U S A N D S
Revenue
Cost of sales
Gross profit
Research and development expenses
Selling expenses
Administrative expenses
Other income
Other expenses
Profit from operating activities
Finance income
Finance costs
Profit / (loss) before income tax
Income tax income / (expense)
Profit / (loss) for the period
thereof attributable to non-controlling interests
thereof attributable to shareholders of Stabilus
Other comprehensive income / (expense)
Foreign currency translation difference 1)
Unrealized actuarial gains and losses 2)
Other comprehensive income / (expense), net of taxes
Total comprehensive income / (expense) for the period
thereof attributable to non-controlling interests
thereof attributable to shareholders of Stabilus
Earnings per share (in €):
basic
diluted
Year ended Sept 30,
2018
962,564
2017 3)
910,016
(671,407)
(637,164)
291,157
(42,031)
(81,330)
(38,504)
3,886
(1,296)
131,882
6,704
(12,084)
126,502
(21,147)
105,355
(55)
105,410
4,115
471
4,586
109,941
(55)
109,996
272,852
(38,194)
(80,380)
(35,343)
3,948
(4,494)
118,389
22,323
(29,799)
110,913
(31,670)
79,243
(12)
79,255
3,328
3,306
6,634
85,877
(12)
85,889
4.27
4.27
3.21
3.21
N OT E
4
5
5
5
5
6
7
8
9
10
21
21
11
11
1) Item that may be reclassified (‘recycled’) to profit and loss at a future point in time when specific conditions are met.
2) Item that will not be reclassified to profit and loss.
3) The comparative figures for other income and other expense have been adjusted for the change of the presentation of foreign currency translation gains
and losses. These have been presented on a gross basis in the past. This has changed to a net presentation. For details pls. refer to Note 6.
The accompanying Notes form an integral part of these Consolidated Financial Statements.
51
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
as of September 30, 2018
Consolidated statement of financial position
T _ 015
I N € T H O U S A N D S
Assets
Property, plant and equipment
Goodwill
Other intangible assets
Other assets
Deferred tax assets
Total non-current assets
Inventories
Trade accounts receivable
Current tax assets
Other financial assets
Other assets
Cash and cash equivalents
Total current assets
Total assets
N OT E
Sept 30, 2018
Sept 30, 2017
12
13
14
16
10
17
18
19
15
16
20
179,225
195,231
247,181
3,951
15,088
640,676
90,763
111,271
5,292
3,407
16,033
143,000
369,766
1,010,442
169,659
194,184
268,911
2,951
12,083
647,788
85,262
105,147
5,802
5,155
12,718
68,123
282,207
929,995
52
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS Consolidated statement of financial position
T _ 015
I N € T H O U S A N D S
Equity and liabilities
Issued capital
Capital reserves
Retained earnings
Other reserves
Equity attributable to shareholders of Stabilus
Non-controlling interests
Total equity
Financial liabilities
Other financial liabilities
Provisions
Pension plans and similar obligations
Deferred tax liabilities
Total non-current liabilities
Trade accounts payable
Financial liabilities
Other financial liabilities
Current tax liabilities
Provisions
Other liabilities
Total current liabilities
Total liabilities
Total equity and liabilities
The accompanying Notes form an integral part of these Consolidated Financial Statements.
N OT E
Sept 30, 2018
Sept 30, 2017
21
21
21
21
22
23
24
25
10
26
22
23
27
24
28
247
225,848
225,090
(24,612)
426,573
(50)
426,523
318,921
520
3,402
52,180
47,847
247
225,848
139,440
(29,198)
336,337
43
336,380
311,951
1,830
3,771
53,236
60,036
422,870
430,824
83,171
1,100
10,867
16,366
34,920
14,625
161,049
583,919
1,010,442
79,073
10,000
9,613
15,612
33,061
15,432
162,791
593,615
929,995
53
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
for the fiscal year ended September 30, 2018
Consolidated statement of
changes in equity
I N € T H O U S A N D S
N OT E
Issued
capital
Capital
reserves
Retained
earnings
Other
reserves
Equity
attributable to
shareholders
of Stabilus
Non-
controlling
interests
T _ 016
Total
equity
Balance as of Sept 30, 2016
247
225,848
72,535
(35,832)
262,798
79,255
–
79,255
94
(12)
262,892
79,243
Profit / (loss) for the period
Other comprehensive
income / (expense)
Total comprehensive income
for the period
Dividends
Receipts from non-controlling interest
Balance as of Sept 30, 2017
Profit / (loss) for the period
Other comprehensive
income / (expense)
Total comprehensive income
for the period
Dividends
Receipts from non-controlling interest
21
21
21
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
6,634
6,634
–
6,634
79,255
6,634
(12,350)
–
–
–
247
225,848
139,440
(29,198)
105,410
–
85,889
(12,350)
–
336,337
105,410
(12)
(54)
15
43
85,877
(12,404)
15
336,380
(55)
105,355
–
4,586
4,586
–
4,586
105,410
4,586
(19,760)
–
–
–
109,996
(19,760)
–
(55)
(38)
–
109,941
(19,798)
–
Balance as of Sept 30, 2018
247
225,848
225,090
(24,612)
426,573
(50)
426,523
The accompanying Notes form an integral part of these Consolidated Financial Statements.
54
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF CASH FLOWS
for the fiscal year ended September 30, 2018
Consolidated statement of cash flows
I N € T H O U S A N D S
Profit / (loss) for the period
Income tax expense
Net finance result
Interest received
Depreciation and amortization (incl. impairment losses)
Gains / losses from the disposal of assets
Changes in inventories
Changes in trade accounts receivable
Changes in trade accounts payable
Changes in other assets and liabilities
Changes in provisions
Income tax payments
Cash flow from operating activities
Proceeds from disposal of property, plant and equipment
Purchase of intangible assets
Purchase of property, plant and equipment
Cash flow from investing activities
Receipts under financial liabilities
Payments for redemption of financial liabilities
Receipts from non-controlling interests
Payments for redemption of senior facilities
Payments for finance leases
Dividends paid
Dividends paid to non-controlling interests
Payments for interest
Cash flow from financing activities
Net increase / (decrease) in cash and cash equivalents
Effect of movements in exchange rates on cash held
Cash and cash equivalents as of beginning of the period
Cash and cash equivalents as of end of the period
The accompanying Notes form an integral part of these Consolidated Financial Statements.
T _ 017
Year ended Sept 30,
N OT E
8/9
12/14
34
14
12
29
21
34
2018
105,355
21,147
5,380
265
57,816
(89)
(5,501)
(6,124)
4,098
(947)
416
(36,361)
145,455
2,243
(10,900)
(36,630)
(45,287)
6,427
(563)
–
(6,427)
(1,253)
(19,760)
(38)
(3,837)
(25,451)
74,717
160
68,123
143,000
2017
79,243
31,670
7,476
230
61,102
(49)
(10,581)
(7,547)
(1,316)
(7,716)
1,504
(32,090)
121,926
980
(11,552)
(33,497)
(44,069)
–
–
15
(62,500)
(547)
(12,350)
(54)
(8,280)
(83,716)
(5,859)
(1,055)
75,037
68,123
55
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
as of and for the fiscal year ended September 30, 2018
1 General 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. B0151589 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 and dampers, as well as electric tailgate
opening and closing equipment. The products are used in a wide range in automotive and industrial
applications, 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 techni-
cal focused distributors further diversify the Group’s customer base.
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 Decem-
ber 12, 2018.
56
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS 2 Basis for presentation
P R E PA R AT I O N
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.
M E A S U R E M E N T
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.
U S E O F E S T I M AT E S A N D J U D G M E N T S
The preparation of financial statements requires estimates that involve complex and subjective judg-
ments 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. Management regularly reviews estimates and assumptions. These are updated if necessary.
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 receiva-
bles based on individual customer creditworthiness, current economic trends and analysis of historical
allowances. Please also refer to 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, 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.
57
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS 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 24 and 25.
R I S K S A N D U N C E R TA I N T I E S
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. Further-
more 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 Company. One part of the term loan agreement ends in June 2022 and another
part ends in June 2023. Please also refer to Note 32.
G O I N G C O N C E R N
These consolidated financial statements have been prepared under the going concern assumption.
S C O P E O F C O N S O L I DAT I O N
The consolidated financial statements include the financial statements of Stabilus S. A. and all sub-
sidiaries, 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 of 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.
58
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS Next to Stabilus S. A., 33 (PY: 38) subsidiaries (see following list), are included in the consolidated
financial statements as of September 30, 2018.
Registered office of the
entity
Interest and control held by
Holding in %
T _ 018
Consolidation
method
Koblenz, Germany
Stabilus S.A.
Luxembourg
Stabilus S.A.
Stable Beteiligungs GmbH
Koblenz, Germany
Stable II S.à r.l.
Stable HoldCo Australia Pty. Ltd.
Dingley, Australia
Stable II S.à r.l.
LinRot Holding AG i.L.
Zurich, Switzerland
Stable II S.à r.l.
Stabilus UK Ltd.
Banbury, United Kingdom Stable Beteiligungs GmbH
Stable UK HoldCo Ltd.
Banbury, United Kingdom Stabilus UK Ltd.
Koblenz, Germany
Stable Beteiligungs GmbH
Dingley, Australia
Stable HoldCo Australia Pty. Ltd.
Itajubá, Brazil
Lezama, Spain
Stabilus GmbH
Stabilus GmbH
Busan, South Korea
Stabilus GmbH
Stabilus UK Ltd.
Gastonia, USA
Stabilus US Holding Corp.
Auckland, New Zealand
Stabilus GmbH
Ramos Arizpe, Mexico
Stabilus GmbH
99.9998%
Subsidiaries
N A M E O F T H E C O M PA N Y
Blitz F10-neun GmbH
Stable II S.à r.l.
Stabilus GmbH
Stabilus Pty. Ltd.
Stabilus Ltda.
Stabilus Espana S.L.
Stabilus Co. Ltd.
Stabilus S.A. de C.V.
Stabilus Inc.
Stabilus Limited
Stabilus Japan Corp.
Yokohama, Japan
Stable Beteiligungs GmbH
Stabilus France S.à r.l.
Poissy, France
Stabilus GmbH
Stabilus Romania S.R.L.
Brasov, Romania
Stable Beteiligungs GmbH
Stabilus (Jiangsu) Ltd.
Wujin, China
Stabilus GmbH
Stabilus GmbH
Stabilus Mechatronics Service Ltd.
Shanghai, China
Stabilus (Jiangsu) Ltd.
Stabilus US Holding Corp.
Wilmington, USA
Stable II S.à r.l.
Stabilus Motion Controls GmbH
Langenfeld, Germany
Stable II S.à r.l.
Fabreeka Group Holdings, Inc.
Stoughton, USA
Stabilus US Holding Corp.
ACE Controls Inc.
Farmington Hills, USA
Stabilus US Holding Corp.
ACE Controls International Inc.
Farmington Hills, USA
Stabilus US Holding Corp.
Fabreeka International Holdings Inc.
Stoughton, USA
Fabreeka Group Holdings Inc.
Fabreeka International Inc.
Stoughton, USA
Fabreeka International Holdings Inc.
Tech Products Corporation
Miamisburg, USA
Fabreeka International Holdings Inc.
Fabreeka GmbH Deutschland
Büttelborn, Germany
Fabreeka International Holdings Inc.
ACE Controls Japan L.L.C.
Farmington Hills, USA
ACE Controls Inc.
ACE Stoßdämpfer GmbH
Langenfeld, Germany
Stabilus Motion Controls GmbH
HAHN-Gasfedern GmbH
Aichwald, Germany
Stabilus Motion Controls GmbH
Stabilus Actio GmbH
Langenfeld, Germany
Stabilus Motion Controls GmbH
Stable II S.à r.l.
59
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
0.0002%
100.00%
80.00%
100.00%
100.00%
3.01%
96.99%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
94.90%
5.10%
100.00%
70.00%
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS The decrease of subsidiaries is due to the ongoing simplification of the legal structure of the Stabilus
Group. In fiscal year 2018, five subsidiaries were liquidated and / or merged into other Group companies.
This had no material effect on the Group’s consolidated financial statements.
P R I N C I P L E S O F C O N S O L I DAT I O N
The assets and liabilities of domestic and foreign entities included in the consolidated financial state-
ments 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. Inter-
company gains and losses on intragroup delivery and service transactions are eliminated through profit
or loss, unless they are immaterial.
B U S I N E S S C O M B I N AT I O N
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:
•
•
•
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 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 (excluding goodwill) 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.
F O R E I G N C U R R E N C Y T R A N S L AT I O N
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 currency are initially trans-
lated 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. These foreign currency exchange gains or losses are recognized
in profit and loss.
60
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS 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 meas-
ured at fair value are translated using the exchange rate at the date when the fair value is determined.
Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the
carrying amounts of assets and liabilities arising on the acquisition are treated as assets and liabilities
of the foreign operation and translated at the historic rate.
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 and expenses 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 trans-
lation 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:
Exchange rates
T _ 019
C O U N T RY
Australia
Brazil
China
South Korea
Mexico
Romania
USA
Closing rate Sept 30,
Average rate for the
year ended Sept 30,
2018
1.6048
4.6535
7.9662
2017
1.5075
3.7635
7.8534
2018
1.5657
4.1775
7.7818
2017
1.4512
3.5306
7.5209
1,285.7500
1,351.8300
1,303.1971
1,266.6493
21.7800
21.4614
22.6385
21.1129
4.6638
1.1576
4.5993
1.1806
4.6439
1.1906
4.5461
1.1041
I S O C O D E
AUD
BRL
CNY
KRW
MXP
RON
USD
61
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS C H A N G E S I N A C C O U N T I N G P O L I C I E S / N E W S TA N DA R D S I S S U E D
The accounting policies applied in the consolidated financial statements comply with the IFRSs required
to be applied in the EU as of September 30, 2018. In financial year 2018, the following new and revised
standards and interpretations had to be applied for the first time in the Group’s financial statements:
New standards, interpretations and amendments in the financial year
T _ 020
S TA N D A R D / I N T E R P R E TAT I O N
Amendments to IAS 7
Amendments to IAS 12
Disclosure Initiative
(issued on January 29, 2016)
Recognition of Deferred Tax Assets for
Unrealized Losses
(issued on January 19, 2016)
Effective date
stipulated
by IASB
Effective date
stipulated
by EU
January 1, 2017
January 1, 2017
Impact on Stabilus
financial statements
Extended disclosures
in the notes
January 1, 2017
January 1, 2017
No impact
Annual Improvements
Annual Improvements to IFRSs 2014-2016 Cycle
(issued on December 8, 2016)
January 1, 2017
(IFRS 12 only)
January 1, 2017
(IFRS 12 only)
No impact
The effective date presented above is the date of mandatory application in annual periods beginning on or after that date.
New standards, interpretations and amendments issued and endorsed by the EU (not yet adopted)
T _ 021
Effective date
stipulated
by IASB
Effective date
stipulated
by EU
January 1, 2018
January 1, 2018
January 1, 2018
January 1, 2018
January 1, 2018
January 1, 2018
January 1, 2019
January 1, 2019
Impact on Stabilus
financial statements
Reference is made to
the descriptions below
Reference is made to
the descriptions below
Reference is made to
the descriptions below
Reference is made to
the descriptions below
January 1, 2018
January 1, 2018
No impact
January 1, 2019
January 1, 2019
Evaluating
January 1, 2018
January 1, 2018
No impact
January 1, 2018
January 1, 2018
No impact
S TA N D A R D / I N T E R P R E TAT I O N
IFRS 9
IFRS 15
Financial Instruments
(issued on July 24, 2014)
Revenue from Contracts with Customers
(issued on May 28, 2014)
including amendments to IFRS 15: Effective
date of IFRS 15 (issued on September 11, 2015)
Clarifications to IFRS 15
Revenue from Contracts with Customers
(issued on April 12, 2016)
Leases
(issued on January 13, 2016)
Foreign Currency Transactions and Advance
Consideration (issued on December 8, 2016)
Uncertainty over Income Tax Treatments
(issued on June 7, 2017)
Classification and Measurement of Share-based
Payment Transactions (issued on June 20, 2016)
Applying IFRS 9 Financial Instruments
with IFRS 4 Insurance Contracts
(issued on September 12, 2016)
IFRS 16
IFRIC 22
IFRIC 23
Amendments to IFRS 2
Amendments to IFRS 4
Amendments to IFRS 9
Amendments to IAS 40
Annual Improvements
Prepayment Features with Negative Compensation
(issued on October 12, 2017)
January 1, 2019
January 1, 2019
Evaluating
Transfers of Investment Property
(issued on December 8, 2016)
January 1, 2018
January 1, 2018
No impact
Annual Improvements to IFRSs 2014-2016 Cycle
(issued on December 8, 2016)
January 1, 2018
(IFRS 1 and IAS 28)
January 1, 2018
(IFRS 1 and IAS 28)
No impact
The effective date presented above is the date of mandatory application in annual periods beginning on or after that date.
62
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS A M E N D M E N T S TO I A S 7 : D I S C L O S U R E I N I T I AT I V E
Amendments to IAS 7: Disclosure Initiative requires that entities provide disclosures that enable users of
financial statements to evaluate changes in liabilities arising from financing activities. The amendments are
intended to expand the disclosure of components of changes in liabilities arising from financing activities
for the purpose of reconciliation. Consequently, the amendments lead to additional disclosures in the notes
and therefore have no impact on Stabilus Group's results.
A M E N D M E N T S TO I A S 1 2 : R E C O G N I T I O N O F D E F E R R E D TA X A S S E T S F O R
U N R E A L I Z E D L O S S E S
Amendments to IAS 12: Recognition of Deferred Tax Assets for Unrealized Losses clarify that unrealized
losses on debt instruments measured at fair value result in deductible temporary differences. It also clari-
fies that an assessment must be made for the aggregate of all deductible temporary differences as to
whether it is probable that sufficient taxable income will be available in future, to allow the temporary
differences to be used and recognized. Rules and examples supplementing IAS 12 clarify how future
taxable income is to be determined for recognition of deferred tax assets. The Amendments have no impact
on Stabilus Group's results.
I F R S 9 F I N A N C I A L I N S T R U M E N T S
IFRS 9 Financial Instruments introduces a universal approach to the classification and measurement of
financial assets and financial liabilities and replaces IAS 39 Financial Instruments: Recognition and Meas-
urement. In accordance with IFRS 9, all financial assets and liabilities are measured at amortized cost or
fair value. The classification of financial assets to one of the two measurement categories is based on how
an entity manages its financial instruments (so-called “business model”) and the contractual cash flow
characteristics of the financial assets. The reclassification of trade receivables that are to be sold under a
factoring agreement from the IAS 39 measurement category to the IFRS 9 measurement category will have
no material impact on Stabilus Group’s consolidated financial statements accordingly.
Furthermore, IFRS 9 adds a new expected loss impairment model that is based on the concept of providing
for expected losses at inception of a contract, except in the case of purchased or originated credit-impaired
financial assets, where expected credit losses are incorporated into the effective interest rate. Stabilus Group
has decided to exercise the option to apply the simplified approach for trade receivables to measure the
loss allowance at an amount equal to lifetime expected credit losses (ECL) at initial recognition and
throughout its life. As a practical expedient, a provision matrix based on its historical observed default
rates adjusted for forward-looking estimates is used to estimate the expected credit losses (ECL) for these
financial instruments.
In addition, IFRS 9 establishes a new hedging model that represents a substantial overhaul of hedge
accounting that will enable entities to better reflect their risk management activities in their financial
statements. These new hedge accounting requirements of IFRS 9 will not have a material impact on
Stabilus Group’s consolidated financial statements.
63
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS IFRS 9 will be applied for the first time in the annual reporting period beginning on October 1, 2018
(the Group’s financial year 2019). In general, IFRS 9 must be applied retrospectively, but various transi-
tion options are allowed. Pursuant to the transition provisions in IFRS 9, Stabilus Group has elected to
use the option for simplified initial application as described in IFRS 9. This means that prior year com-
paratives to be presented in the year of initial application will not be restated; instead, Stabilus Group
will provide an explanation of the reasons for the changes in items in the statement of financial posi-
tion and the income statement for the current period. The Stabilus Group is currently finalizing the data
analysis for the determination of the quantitative effects resulting from the implementation of the new
impairment model. The data analysis relates to portfolios of homogeneous customer groups for deter-
mining the valuation allowance. Based on our current assessment, the overall effect of the required
adjustments for all portfolios should be in the low one-digit million EUR range and the evaluation pro-
cess is expected to be finalized within the next couple of weeks. For cash and cash equivalents there
we will not have a material effect from the transition to the new impairment model of IFRS 9. However,
as IFRS 9 requires extensive disclosures, the first-time adoption will lead to extended disclosures in the
notes. The cumulative effects of the conversion, arising particularly from the remeasurement of trade
receivables, will be recognized as an adjustment to the opening balance of equity in the annual report-
ing period of initial application, beginning on October 1, 2018 (the Group’s financial year 2019).
I F R S 1 5 R E V E N U E F R O M C O N T R A C T S W I T H C U S TO M E R S
IFRS 15 Revenue from Contracts with Customers provides a single, principles-based five-step model for
the determination and recognition of revenue to be applied to all contracts with customers. The new
standard replaces the existing guidance on revenue recognition, including IAS 18 Revenue, IAS 11
Construction Contracts and the relevant interpretations (IFRIC 13, IFRIC 15, IFRIC 18 and SIC 13). The
core principle of IFRS 15 is that revenue will be recognized in an amount that corresponds to the con-
sideration that the entity expects to receive. A so-called “5-step model” is used to determine at which
point in time or over which period of time revenues are to be recognized and in what amount. IFRS 15
also adds the items “Contract Assets” and “Contract Liabilities” to the balance sheet. Furthermore, the
standard includes detailed guidance and extended disclosure requirements.
The new standard will be applied for the first time in the annual reporting period beginning on Octo-
ber 1, 2018 (the Group’s financial year 2019), using the modified retrospective transition method,
limiting the retroactive application of IFRS 15 to customer contracts that have not yet been completely
fulfilled at the date of initial application. The effects of IFRS 15 were analysed as part of a group-wide
project for implementing the new standard. As the previously applied accounting policies of Stabilus
Group regarding revenue recognition essentially correspond to the provisions in IFRS 15, the first-time
application of the new standard will not have a material impact on Stabilus Group’s consolidated
financial statements. The cumulative effects of the conversion will be recorded to the opening balance
as of October 1, 2018 (the Group’s financial year 2019). Based on our evaluation this effect will not
have a material impact on Stabilus Group´s consolidated financial statements. Prior year comparatives
to be presented in the year of initial application will not be restated; instead, Stabilus Group will pro-
vide an explanation of the reasons for the changes in items in the statement of financial position and
the income statement for the current period as a result of applying IFRS 15 for the first time.
64
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS I F R S 1 6 L E A S E S
IFRS 16 Leases changes the regulations for the recognition, measurement, presentation and disclosure
of leases. IFRS 16 supersedes the previous standard for lease accounting (IAS 17 Leases) and the relating
interpretations (IFRIC 4, SIC-15 and SIC-27). The objective of the new leasing standard is to recognize
all leases and their associated contractual rights and obligations in the balance sheet. Therefore, the
previous distinction between finance and operating lease is eliminated from the perspective of a lessee.
Apart from short-term and low-value leases, IFRS 16 introduces a methodology for all lease contracts
similar to that previously applied for finance leases, i.e. alongside a right-of-use asset a corresponding
lease liability is also recognized upon initial recognition. Both items are updated as appropriate. When
accounting for leases, lessors are still required to perform a review to classify leases as operating or
finance leases. IFRS 16 will basically make it necessary to recognize all leases in the balance sheet in
future financial years. For the financial statements of the Stabilus Group, this relates in particular to
those rental agreements previously classified as operating leases, which are disclosed as financial
commitments in the notes. As a result, non-current assets and financial debt will both increase in
future financial years. Furthermore, changes will also arise in the income statement. To date, rental
payments in connection with operating lease agreements were mainly included as expenses within
operating expenses. In future financial years, these expenses will be split into depreciation and interest
expenses and recognized accordingly. IFRS 16 is applicable to annual reporting periods beginning on
or after January 1, 2019. Stabilus Group is planning to apply the modified retrospective transition
method, according to which the cumulative effects of the conversion to the opening balance as of
October 1, 2019 must be recorded. The effects are currently analysed as part of a group-wide project
for implementing IFRS 16. Due to the volume of future minimum lease payments under non-cancellable
operating leases in relation to the balance sheet total, Stabilus Group currently assumes that
the first-time and ongoing application of IFRS 16 will not have a material impact on its consolidated
financial statements.
The IASB published new standards and amendments, whose application is not yet compulsory in financial
year 2018 or which have not yet been endorsed by the EU. The Group is not planning an early application
of these standards and amendments.
65
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS New standards, interpretations and amendments issued but not yet endorsed by the EU
T_022
Amendments to IAS 19
Amendments to IAS 28
Annual Improvements
Amendments to IFRS 3
Plan Amendment, Curtailment or Settlement
(issued on February 7, 2018)
Long-term Interests in Associates and Joint Ventures
(issued on 12 October 2017)
Annual Improvements to IFRSs 2015-2017 Cycle
(issued on December 12, 2017)
Business Combinations
(issued on October 22, 2018)
Amendments to IAS 1
and IAS 8
Definition of Material
(issued on October 31, 2018)
Conceptual Framework for
Financial Reporting
Amendments to References to the
Conceptual Framework in IFRS Standards
(issued on March 29, 2018)
IFRS 17
Insurance Contracts
(issued May 18, 2017)
Effective date
stipulated by IASB
Effective date
stipulated by EU
Impact on Stabilus
financial statements
January 1, 2019
Pending
Evaluating
January 1, 2019
Pending
No impact
January 1, 2019
Pending
Evaluating
January 1, 2020
Pending
Evaluating
January 1, 2020
Pending
Evaluating
January 1, 2020
Pending
No impact
January 1, 2021
Pending
No impact
The effective date presented above is the date of mandatory application in annual periods beginning on or after that date.
A M E N D M E N T S TO I A S 1 9 : P L A N A M E N D M E N T,
C U R TA I L M E N T O R S E T T L E M E N T
The amendments to IAS 19 address the accounting when a plan amendment, 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:
• Determine current service cost for the remainder of the period after the plan amendment, curtailment
or settlement, using the actuarial assumptions used to remeasure the net defined benefit liability
(asset) reflecting the benefits offered under the plan and the plan assets after that event;
• Determine net interest for the remainder of the period after the plan amendment, curtailment or
settlement using the net defined benefit liability (asset) reflecting the benefits offered under the
plan and the plan assets after that event and the discount rate used to remeasure that net defined
benefit liability (asset).
The amendments also clarify that an entity first determines any past service cost, or a 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 settle-
ments occurring on or after the beginning of the first annual reporting period that begins on or after
January 1, 2019. These amendments will apply only to any future plan amendments, curtailments, or
settlements of Stabilus Group.
66
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS Besides the Amendments to IAS 19, the other in the table above mentioned new and revised standards,
interpretations and amendments issued but not yet endorsed by the EU will probably have no material
impact on the Stabilus Group’s consolidated financial statements.
3 Accounting policies
R E V E N U E
Revenue is recognized to the extent that 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, excluding discounts, rebates, and other sales taxes or duty. 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.
C O S T O F S A L E S
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 of
intangible assets are included. Cost of sales also includes write-downs on inventories to the lower net
realizable value.
R E S E A R C H E X P E N S E S A N D N O N - C A P I TA L I Z E D D E V E L O P M E N T E X P E N S E S
Research expenses and non-capitalized development expenses are recognized in profit or loss as incurred.
S E L L I N G E X P E N S E S
Selling expenses include costs for sales personnel and other sales-related costs such as marketing and
travelling. 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.
B O R R O W I N G C O S T S
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.
I N T E R E S T I N C O M E A N D E X P E N S E
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.
67
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS OT H E R F I N A N C I A L I N C O M E A N D E X P E N S E
The other financial result includes all remaining income and expenses from financial transactions that
are not included in the interest income and expense. In fiscal year 2018, the presentation format of the
other income and expenses has been changed in the statement of the foreign currency translation. In our
view the presentation of a net basis for the foreign currency translation gives more useful information to
the reader of our financial statements. The presentation of prior years has been changed accordingly.
I N C O M E TA X E S
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.
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 carry-forwards 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.
G O O D W I L L
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 at the acquisition date goodwill is allocated to cash-generating units (CGU)
that are expected to benefit from the business combination. Goodwill is tested for impairment at the
lowest level within the Group at which goodwill is being managed.
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.
68
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS OT H E R I N TA N G I B L E A S S E T S
Purchased intangible assets are measured at acquisition cost and internally generated intangible
assets at production cost less any accumulated amortization and impairment losses. Internally gener-
ated 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 eco-
nomic 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 (20-24 years), unpatented technology (6 to 10 years)
and trade names (7 years).
R E S E A R C H A N D D E V E L O P M E N T E X P E N S E S
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.
P R O P E R T Y, P L A N T A N D E Q U I P M E N T
Property, plant and equipment is measured at cost less accumulated depreciation and impairment
losses.
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.
69
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS 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).
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 pur-
chase 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.
L E A S I N G
Leases are all arrangements that transfer the right to use a specified asset for a stated period of time
in return for a payment.
Leases that transfer substantially all risks and rewards associated with the ownership to Stabilus are
classified as finance leases. The leased asset and a corresponding liability is initially measured at fair
value or the lower present value of the minimum lease payments. Assets are depreciated on a straight-
line basis over the estimated useful life of the asset or the shorter term of the lease. Lease payments
resulting from finance leases are divided into repayments of the principal and interest payments.
Other leases are classified as operating leases. The corresponding lease payments are recognized as
an expense in profit or loss on a straight-line basis over the lease term.
I M PA I R M E N T O F N O N - F I N A N C I A L A S S E T S
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 intangi-
ble 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 car-
rying 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.
70
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS The calculation of the value in use and the fair value less costs of disposal is most sensitive to the fol-
lowing 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 develop-
ments 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. Impairment losses on goodwill are not reversed.
I N V E N TO R I E S
Inventories are measured 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 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. Provisions are set up on the basis of the analysis of stock moving and / or obsolete stock.
F I N A N C I A L I N S T R U M E N T S
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.
Financial instruments are initially measured at fair value. For the purpose of subsequent measurement,
financial instruments are allocated to one of the categories defined in IAS 39 “Financial Instruments:
Recognition and Measurement”. The measurement categories relevant for Stabilus are loans and
receivables, financial assets at fair value through profit or loss and financial liabilities measured at
amortized costs.
71
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are
not quoted in an active market. Examples include trade accounts receivable and loans originated by
the Group. After initial recognition, loans and receivables 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 loans and receivables are derecognized or impaired. Interest from using the effective
interest rate method is similarly recognized in profit or loss. Loans and receivables bearing no or lower
interest rates compared to market rates with a maturity of more than one year are discounted.
F I N A N C I A L A S S E T S
In addition to financial instruments assigned to a measurement category, financial assets also include
cash and cash equivalents. Cash and cash equivalents consist primarily of cash on hand, checks and
deposits at banks. The Group considers all highly liquid investments purchased with an original matu-
rity of three months or less to be cash equivalents. Cash and cash equivalents correspond with the
classification in the consolidated statement of cash flows. Interest received on these financial assets is
generally recognized in profit or loss applying the effective interest rate method. Dividends are recog-
nized in profit or loss when legal entitlement to the payment arises.
I M PA I R M E N T O F F I N A N C I A L A S S E T S
At each reporting date the carrying amounts of the financial assets, except those measured at fair value
through profit or loss, are investigated to assess whether objective evidence of impairment (such as
the debtor’s inability to meet its current obligations or significant changes in the technological,
economic, legal or the market environment of the debtor) exists. For equity instruments a significant
or prolonged decline in fair value is considered to be objective evidence for impairment. Stabilus has
defined criteria for the significance and duration of a decline in fair value.
Loans and receivables
If there is objective evidence that an impairment loss on assets carried at amortized cost has been
incurred, the amount of the loss is measured as the difference between the asset’s carrying amount
and the present value of estimated future cash flows (excluding future expected credit losses that have
not been incurred) discounted at the financial asset’s original effective interest rate (i.e. the effective
interest rate computed at initial recognition). 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 its amortized cost at the
reversal date. Any subsequent reversal of an impairment loss is recognized in profit or loss. In relation
to trade accounts receivable, a provision for impairment is made when there is objective evidence (such
as the probability of insolvency or significant financial difficulties of the debtor) that the Group will be
unable to collect all of the amounts due under the original terms of the invoice. The carrying amount of
the receivable is reduced through use of an allowance account. Impaired debts are derecognized when
they are assessed as uncollectible.
72
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS D E R I VAT I V E F I N A N C I A L I N S T R U M E N T S
As of September 30, 2018, and September 30, 2017, the Stabilus Group does not have derivative
financial instruments.
When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in
the fair value is recognized in other comprehensive income and the ineffective portion is recognized in
profit and loss. The amount recognized in other comprehensive income is reclassified when the hedged
transaction occurs. Stabilus considers the hedge related to a business combination as a hedge of a
non-financial item and recognizes the gain or loss from the hedging instrument recognized in other
comprehensive income as an adjustment to goodwill.
F I N A N C I A L L I A B I L I T I E S A N D E Q U I T Y I N S T R U M E N T S
Debt and equity instruments are classified as either financial liabilities or as equity in accordance with
the substance of the contractual arrangement.
E Q U I T Y I N S T R U M E N T S
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 transac-
tion costs.
F I N A N C I A L L I A B I L I T I E S
Financial liabilities primarily include a term loan, trade accounts payable and other financial liabilities.
Financial liabilities measured at amortized cost
Financial liabilities measured at amortized cost include a term loan.
After initial recognition the financial liabilities are subsequently measured at amortized cost applying
the effective interest method. Gains and losses are recognized in profit or loss through the amortiza-
tion process or when the liabilities are derecognized.
Financial liabilities at fair value through profit or loss
As of September 30, 2018, and 2017, the Group does not measure any financial liabilities at fair value
through profit or loss.
73
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS P E N S I O N S A N D S I M I L A R O B L I G AT I O N S
The contributions to our pension plans are recognized as an expense when the entity consumes the eco-
nomic benefits arising from the services provided by the employees in exchange for employee benefits.
For defined 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.
OT H E R P R O V I S I O N S
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 esti-
mate 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 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 measure-
ment 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 with-
drawal, to a formal detailed plan to terminate the employment of current employees or if it is demon-
strably 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 manage-
ment’s best estimate of the expenditure required to settle the Group’s obligation.
74
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS T _ 023
Year ended Sept 30,
2018
491,323
348,127
123,114
962,564
2017
456,306
350,737
102,973
910,016
T _ 024
Year ended Sept 30,
2018
342,253
268,349
610,602
220,032
101,580
30,350
351,962
962,564
2017
340,475
243,210
583,685
204,408
93,920
28,003
326,331
910,016
4 Revenue
The Group’s revenue developed as follows:
Revenue by region
I N € T H O U S A N D S
Europe
NAFTA
Asia / Pacific and RoW
Revenue
Revenue by market
I N € T H O U S A N D S
Automotive Gas Spring
Automotive Powerise®
Automotive business
Industrial / Capital Goods
Vibration & Velocity Control
Commercial Furniture
Industrial business
Revenue
Group revenue results from sales of goods. Stabilus operates in automotive and industrial markets.
The Automotive Gas Spring and Automotive Powerise® units service our automotive customers,
whereas Industrial / Capital Goods, Vibration & Velocity Control as well as Commercial Furniture units
supply our industrial customers.
75
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS 5
Cost of sales, research and development,
selling and administrative expenses
Expenses by function
I N € T H O U S A N D S
Capitalized development cost
Personnel expenses
Material expenses
Depreciation and amortization
Other
Total
I N € T H O U S A N D S
Capitalized development cost
Personnel expenses
Material expenses
Depreciation and amortization
Other
Total
Year ended 30, 2018
Cost of
sales
–
(165,755)
(443,639)
(29,828)
(32,185)
Research &
development
expenses
9,083
(22,448)
(6,339)
(13,413)
(8,914)
Selling
expenses
–
(30,740)
(12,146)
(11,850)
(26,594)
T _ 025
Total
9,083
Adminis-
trative
expenses
–
(39,102)
(258,045)
(4,786)
(2,725)
8,109
(466,910)
(57,816)
(59,584)
(671,407)
(42,031)
(81,330)
(38,504)
(833,272)
Year ended 30, 2017
Cost of
sales
–
(156,151)
(429,810)
(30,692)
(20,511)
Research &
development
expenses
11,405
(19,054)
(6,004)
(15,770)
(8,771)
Selling
expenses
–
(30,877)
(11,356)
(12,006)
(26,141)
Adminis-
trative
expenses
–
Total
11,405
(34,350)
(240,432)
(5,266)
(2,634)
6,907
(452,436)
(61,102)
(48,516)
(637,164)
(38,194)
(80,380)
(35,343)
(791,081)
The expense items in the statement of comprehensive income include following personnel expenses.
Personnel expenses
I N € T H O U S A N D S
Wages and salaries
Compulsory social security contributions
Pension cost
Other social benefits
Personnel expenses
T _ 026
Year ended Sept 30,
2018
2017
(184,795)
(172,819)
(46,729)
(15,399)
(11,122)
(42,694)
(15,061)
(9,858)
(258,045)
(240,432)
76
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS The following table shows the Group’s average number of employees.
Number of employees
Wage earners
Salaried staff
Trainees and apprentices
Average number of employees
6 Other income
In fiscal year 2018, the presentation format of the other income and expenses was changed in the
statement for the foreign currency translation. In our view the presentation of a net basis of the foreign
currency translation provides more useful information to the reader of our financial statements. The
presentation of prior years was changed accordingly. In previous year the foreign currency translation
gains were €8,817 thousand and the foreign currency translation losses were €(12,202) thousand.
Other income
I N € T H O U S A N D S
Net foreign currency translation gains
Gains on sale / disposal of assets
Income from the release of other accruals
Miscellaneous other income
Other income
T _ 027
2017
4,523
1,341
100
5,964
Year ended Sept 30,
2018
4,874
1,461
108
6,443
T _ 028
2017
–
276
287
3,385
3,948
Year ended Sept 30,
2018
18
434
322
3,112
3,886
77
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS 7 Other expenses
Other expenses
I N € T H O U S A N D S
Net foreign currency translation losses
Losses on sale / disposal of tangible assets
Miscellaneous other expenses
Other expenses
8 Finance income
Finance income
I N € T H O U S A N D S
Interest income on loans and financial receivables not measured at fair value through profit and loss
Net foreign exchange gain
Gains from changes in carrying amount of financial liabilities
Other interest income
Finance income
Finance income decreased from €22.3 million in fiscal year 2017 to €6.7 million in fiscal year 2018.
Finance income is substantially due to the adjustment of the carrying value of the term loan facility.
In the current year this reflects the extension of the term by one year (€3.4 million), a further decrease
in the margin in February 2018 (€1.3 million) and changed assumptions for voluntary prepayments
(€1.7 million). In the prior year this reflects the decrease in the margin (€17.5 million) and last year’s
extension of the term by one year (€4.6 million).
T _ 029
Year ended Sept 30,
2018
–
(345)
(951)
2017
(3,385)
(227)
(882)
(1,296)
(4,494)
T _ 030
Year ended Sept 30,
2018
238
–
6,439
27
6,704
2017
185
–
22,093
45
22,323
78
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS T _ 031
Year ended Sept 30,
2018
(8,522)
(2,624)
(29)
(909)
2017
(12,853)
(16,471)
(69)
(406)
(12,084)
(29,799)
9 Finance costs
Finance costs
I N € T H O U S A N D S
Interest expense on financial liabilities not measured at fair value through profit and loss
Net foreign exchange loss
Interest expenses finance lease
Other interest expenses
Finance costs
Finance costs decreased from €(29.8) million in fiscal year 2017 to €(12.1) million in fiscal year 2018.
Finance costs in fiscal year 2018 comprised interest expense of €(8.5) million (PY: €(12.8) million) and
net foreign exchange losses of €(2.6) million (PY: €(16.5) million).
Interest expense on financial liabilities include ongoing interest expense of €(8.5) million (PY:
€(9.6) million) especially related to the euro term loan facility. Thereof, an amount of €(3.8) million (PY:
€(8.3) million) is cash interest. This decrease reflects the lower margin based on the improved net lev-
erage ratio of the Group and the reduced outstanding nominal amount. In addition, an amount of
€(4.7) million (PY: €(2.4) million) is due to the amortization of debt issuance cost and the amortization of
adjustments of the carrying value by using the effective interest rate method. In the prior year prepay-
ments of the euro term loan facility lead to a derecognition of unamortized debt issuance cost and
unamortized adjustments of the carrying value with a total amount of €(3.1) million.
Net foreign exchange losses are a result of financial assets and liabilities of group entities denomi-
nated in foreign currency. The reduction compared to prior year is due to certain measures we took to
reduce our foreign exchange exposure.
79
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS 10
Income 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
I N € T H O U S A N D S
Current income taxes
Deferred taxes
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 €6,282 thousand (PY: €(1,793) thousand).
The actual income tax expense of €(21,147) thousand deviates in the amount of €16,803 thousand
from the expected tax expense of €(37,950) thousand that results from applying the expected income
tax rate of 30% to the Group’s profit or loss before income taxes. The individual items that reconcile
the expected income tax expense to the actual income tax expense are disclosed in the table below.
Tax expense reconciliation (expected to actual)
I N € T H O U S A N D S
Profit / (loss) before income tax
Expected income tax expense
Foreign tax rate differential
Tax-free income
Non-deductible expenses
Prior year taxes
Change of the valuation allowance on deferred tax assets
Tax rate changes
Other
Actual income tax expense
Effective tax rate
80
T _ 032
Year ended Sept 30,
2018
(36,560)
15,413
(21,147)
2017
(37,893)
6,223
(31,670)
T _ 033
Year ended Sept 30,
2018
126,502
(37,950)
7,440
1,802
(3,776)
6,282
904
3,445
706
2017
110,913
(33,273)
5,677
3,292
(5,958)
(1,793)
518
96
(230)
(21,147)
(31,670)
16.7%
28.6%
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS The tax effect reported as a foreign tax rate differential reflects the difference between the expected
tax rate of 30% and the actual tax rates that are applicable to the individual subsidiaries. The decrease
in the effective tax rate compared to the prior year was primarily driven to remasurement of the
deferred tax position of our US operations relating to the US tax reform. The US tax reform reduces the
federal income tax rate from 35% to 21% and become effective on January 1, 2018. The tax effect of
non- deductible expenses consists primarily of expenses that are non-deductible in the determination 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:
Deferred tax assets and liabilities
Sep 30, 2018
Sep 30, 2017
I N € T H O U S A N D S
Intangible assets
Property, plant & equipment
Inventories
Receivables
Other assets
Provisions and liabilities
Tax and interest losses
Subtotal
Netting
Total
DTA
227
2,599
3,260
773
215
14,951
13,973
35,998
DTL
(58,923)
(8,788)
(123)
(71)
(285)
(567)
–
Total
(58,696)
(6,189)
3,137
702
(70)
14,384
13,973
(68,757)
(32,759)
DTA
165
3,000
3,255
493
584
14,511
14,606
36,614
DTL
(71,393)
(7,522)
(83)
(1,124)
(3,401)
(1,044)
–
(20,910)
20,910
–
(24,531)
24,531
–
15,088
(47,847)
(32,759)
12,083
(60,036)
(47,953)
(84,567)
(47,953)
T _ 034
Total
(71,228)
(4,522)
3,172
(631)
(2,817)
13,467
14,606
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.
As of September 30, 2018, the Group has unused tax loss carry-forwards (including German and US
interest loss carry-forwards) of €52,886 thousand (PY: €59,949 thousand).
81
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS The following table provides a detailed overview of the tax loss and interest carry-forwards and the
expiration dates.
Tax loss and interest carry-forwards
T _ 035
I N € T H O U S A N D S
Germany
Spain
USA
Great Britain
Brazil
Total
I N € T H O U S A N D S
Germany
Spain
USA
Great Britain
Brazil
Total
Year ended Sept 30, 2018
Tax loss and
interest
carry-forward
Tax rate
Deferred tax
asset (gross)
Valuation
allowance
Deferred tax
asset (net)
31,511
27.0 – 31.0%
5,221
28.0%
15,835
22.0 – 35.0%
–
319
52,886
–
30.0%
8,495
1,462
5,400
–
96
(18)
(1,462)
8,477
–
Expiration date
Indefinite
Indefinite
–
–
–
5,400 Within 20 years
–
96
–
Indefinite
15,453
(1,480)
13,973
Year ended Sept 30, 2017
Tax loss and
interest
carry-forward
Tax rate
Deferred tax
asset (gross)
Valuation
allowance
Deferred tax
asset (net)
47,693
27 – 30%
12,872
5,192
5,666
273
1,125
59,949
28.0%
36.2%
22.0%
34.0%
1,454
2,049
60
383
16,818
(2,212)
14,606
(698)
(1,454)
–
(60)
–
12,175
–
Expiration date
Indefinite
Indefinite
2,049 Within 20 years
–
383
Indefinite
Indefinite
The interest carry-forward comes from our German entities with an amount of €30,588 thousand and a
gross deferred tax asset of €8,213 thousand and from our US entities with an amount of €14,754 thou-
sand and a gross deferred tax asset of €5,164 thousand of which a deferred tax assets of €13,377 thou-
sand was shown in the balance sheet. The unused tax loss carry-forward comprises €7,544 thousand
relating to corporate tax and trade tax. The amount recognized as a deferred tax asset is calculated
under consideration of the actual corporate planning and its utilization within the planning period.
Tax loss carry-forwards in Luxembourg are not considered, as it is not likely that these carry-forwards
will be utilized.
82
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS 11 Earnings per share
The weighted average number of shares used for the calculation of earnings per share in the fiscal
years ended September 30, 2018 and 2017 is set out in the following table:
Number of days
Transaction
Change
Total shares
T _ 036
Total shares
(time-weighted)
Weighted average number of shares
D AT E
September 30, 2016
October 1, 2016
September 30, 2017
October 1, 2017
September 30, 2018
365
365
24,700,000
21,668,547
24,700,000
24,700,000
24,700,000
24,700,000
24,700,000
24,700,000
24,700,000
24,700,000
T _ 037
Year ended Sept 30,
2018
105,410
2017
79,255
24,700,000
24,700,000
4.27
3.21
The earnings per share for the fiscal years ended September 30, 2018 and 2017, were as follows:
Earnings per share
Profit / (loss) attributable to shareholders of the parent (in € thousands)
Weighted average number of shares
Earnings per share (in €)
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.
83
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS
12 Property, plant and equipment
Property, plant and equipment are presented in the following table.
Property, plant and equipment
Land,
equivalent
rights to
real property
Buildings
and land
improve-
ments
Technical
equipment
and
machinery
Other
tangible
equipment
Construc-
tion in pro-
gress
I N € T H O U S A N D S
Gross value
Balance as of Sept 30, 2016
Foreign currency difference
Additions
Disposals
Reclassifications
13,586
(181)
2,817
51,072
(1,307)
744
(1,179)
(1,987)
–
526
170,562
(4,976)
11,886
(1,719)
13,986
Balance as of Sept 30, 2017
15,043
49,048
189,739
Foreign currency difference
Additions
Disposals
Reclassifications
2
–
–
–
95
1,030
(10)
748
(254)
8,705
(3,246)
10,374
Balance as of Sept 30, 2018
15,045
50,911
205,318
55,787
44,111
(1,759)
6,317
(2,226)
2,032
48,475
165
4,234
(530)
3,443
21,912
(315)
11,972
(833)
(16,544)
16,192
–
21,926
–
(14,565)
23,553
T _ 038
Total
301,243
(8,538)
33,736
(7,944)
–
318,497
8
35,895
(3,786)
–
350,614
Accumulated depreciation
Balance as of Sept 30, 2016
Foreign currency difference
Depreciation expense
Thereof impairment loss
Disposal
Reclassifications
Balance as of Sept 30, 2017
Foreign currency difference
Depreciation expense
Thereof impairment loss
Disposal
Reclassifications
Balance as of Sept 30, 2018
Carrying amount
Balance as of Sept 30, 2017
Balance as of Sept 30, 2018
–
–
–
–
–
–
–
–
–
–
–
–
–
(12,728)
(90,500)
(29,627)
(819)
(133,674)
579
3,031
(2,620)
(16,769)
–
1,648
–
(389)
1,630
(3)
1,326
(7,005)
(5)
2,197
3
(13,121)
(102,611)
(33,106)
(49)
(15)
(2,570)
(15,710)
–
–
–
–
2,776
–
(188)
(7,240)
–
445
–
(15,740)
(115,560)
(40,089)
–
–
–
819
–
–
–
–
–
–
–
–
4,936
(26,394)
(394)
6,294
–
(148,838)
(252)
(25,520)
–
3,221
–
(171,389)
15,043
15,045
35,927
35,171
87,128
89,758
15,369
15,698
16,192
23,553
169,659
179,225
84
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS Property, plant and equipment include assets resulting from one finance lease contract with a carrying
amount of €1,610 thousand (PY: €3,767 thousand).
In fiscal year 2018, Stabilus Group did not receive government grants (PY: €0 thousand).
Government grants received in the past 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 thresh-
olds (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 €11,520 thou-
sand (PY: €5,775 thousand).
The Group did not recognize impairment losses on property, plant and equipment in the actual year
(PY: €394 thousand).
The total depreciation expense for tangible assets is included in the consolidated statement of compre-
hensive income in the following line items:
Depreciation expense for property, plant and equipment
T _ 039
I N € T H O U S A N D S
Cost of sales
Research and development expenses
Selling expenses
Administrative expenses
Depreciation expense
Year ended Sept 30,
2018
2017
(22,564)
(23,599)
(882)
(587)
(955)
(468)
(1,487)
(1,372)
(25,520)
(26,394)
Prepayments by the Stabilus Group for property, plant and equipment and intangible assets of
€1,242 thousand (PY: €507 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.
13 Goodwill
The first-time consolidation of Stable II S.à r. l., Luxembourg as of April 8, 2010, resulted in goodwill of
€51.1 million and the first-time consolidation of an Romanian entity resulted in goodwill of €0.4 million.
The first-time consolidation of ACE, Hahn Gasfedern and Fabreeka / Tech Products as of June 30, 2016,
resulted in goodwill of €146.9 million. The acquisition of a small niche business in New Zealand resulted
in goodwill of €0.2 million. These acquisitions resulted in total goodwill of €198.6 million (PY: €198.6 mil-
lion). On the relevant acquisition date goodwill is allocated to the operating segments (CGUs) based on
their relative fair values. As such €112.4 million have been allocated to Europe, €73.3 million to NAFTA
and €12.9 million to Asia / Pacific and Rest of World (RoW).
85
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS The foreign currency difference in fiscal year 2018 on goodwill is €1.0 million in prior years the for-
eign currency difference was €(4.4) million.
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 contin-
uing use of the unit and was based on the following key assumptions: the underlying cash flow fore-
casts 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 4.0% (PY: 1.8%) for Europe,
3.9% (PY: 2.6%) for NAFTA and 15.4% (PY: 16.1%) for Asia / Pacific and RoW 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 extrapolated by applying a 1%
(PY: 1%) growth rate. This growth rate was based on the expected consumer price inflation for the coun-
tries included in the respective cash generating units, adjusted for expected technological progress
and efficiency gains in the overall economy. The discount rate applied to cash flow projections is 8.5%
(PY: 8.9%) for Europe, 8.5% (PY: 8.6%) for NAFTA and 8.6% (PY: 8.8%) for Asia / Pacific and RoW.
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
I N P E R C E N T
Discount rate
Budgeted gross margin reduction to plan
Sept. 30, 2018
Input data required for carrying amount to
equal recoverable amount
Europe
19.1
8.8
NAFTA
21.1
8.3
T _ 040
RoW
16.9
6.9
86
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS 14 Other intangible assets
Other intangible assets are presented in the following table:
Intangible assets
T _ 041
Develop-
ment cost
under
construc-
tion
Develop-
ment cost
Software
Patents
Customer
relation-
ship
Tech-
nology
Trade
name
Total
I N € T H O U S A N D S
Gross value
Balance as of Sept 30, 2016
83,899
22,492
Foreign currency difference
(1,155)
Additions
Disposals
1,773
(14,287)
764
7,583
–
Reclassifications
14,332
(15,659)
8,885
(867)
2,401
(666)
1,327
1,320
206,449
69,654
16,839
409,538
(13)
(2,327)
(406)
(65)
3
–
–
–
–
–
–
–
–
–
–
–
(4,069)
11,760
(14,953)
–
Balance as of Sept 30, 2017
84,562
15,180
11,080
1,310
204,122
69,248
16,774
402,276
Foreign currency difference
Additions
Disposals
432
969
1
41
7,700
2,080
(17,445)
–
Reclassifications
10,021
(10,577)
(4)
22
–
(308)
697
155
–
–
–
–
–
–
16
–
–
–
1,338
10,771
(17,492)
–
(47)
864
Balance as of Sept 30, 2018
78,539
12,304
14,018
1,020
204,819
69,403
16,790
396,893
Accumulated amortization
Balance as of Sept 30, 2016
(41,858)
Foreign currency difference
497
Amortization expense
(14,628)
Thereof impairment loss
Disposals
Reclassifications
(2,390)
13,537
–
Balance as of Sept 30, 2017
(42,452)
Foreign currency difference
(249)
Amortization expense
(12,340)
Thereof impairment loss
Disposals
Reclassifications
(1,671)
16,362
–
Balance as of Sept 30, 2018
(38,679)
Carrying amount
–
–
–
–
–
–
–
–
–
–
–
–
–
(5,631)
(1,079)
(24,498)
(35,745)
(4,912)
(113,723)
108
(2,127)
(76)
638
–
12
(78)
–
–
–
228
32
14
891
(10,859)
(5,765)
(1,251)
(34,708)
–
–
–
–
–
–
–
–
–
(2,466)
14,175
–
(7,012)
(1,145)
(35,129)
(41,478)
(6,149)
(133,365)
(38)
(2,184)
–
28
4
(131)
(21)
(6)
(441)
(63)
(10,647)
(5,823)
(1,239)
(32,296)
–
–
–
–
–
–
–
–
–
–
–
(1,671)
16,390
–
(297)
297
(9,503)
(907)
(45,907)
(47,322)
(7,394)
(149,712)
Balance as of Sept 30, 2017
42,110
15,180
Balance as of Sept 30, 2018
39,860
12,304
4,068
4,515
165
113
168,993
27,770
10,625
268,911
158,912
22,081
9,396
247,181
87
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS Additions to intangible assets in the fiscal year 2018 amounting to €10,771 thousand (PY: €11,760 thou-
sand) and mainly comprised capitalized development cost amounting to €8,669 thousand (PY: €9,356 thou-
sand) (less related customer contributions). Amortization of capitalized internal development projects
amounted to €12,339 thousand (PY: €14,628 thousand). The borrowing costs capitalized during the period
amounted to €129 thousand (PY: €208 thousand). A capitalization rate was used to determine the amount
of borrowing costs. The capitalization rate used in the fiscal year 2018 was 1,05% (PY: from October 2016
to April 2017 was 2.0%, and from May to September 2017 was 1.5%). The total amortization expense
and impairment loss for intangible assets is included in the consolidated statements of comprehensive
income in the following line items:
Amortization expense for intangible assets
I N € T H O U S A N D S
Cost of sales
Research and development expenses
Selling expenses
Administrative expenses
T _ 042
Year ended Sept 30,
2018
(7,264)
(12,531)
(11,263)
(1,238)
2017
(7,093)
(14,628)
(11,537)
(1,450)
Amortization expense (incl. impairment loss)
(32,296)
(34,708)
Amortization expenses on development costs include impairment losses of €1,671 thousand
(PY: €2,390 thousand) due to the withdrawal of customers from the respective projects. The
impairment loss is included in the research and development expenses.
Contractual commitments for the acquisition of intangible assets amount to €1,538 thousand
(PY: €1,686 thousand).
15 Other financial assets
Other financial assets
Sept 30, 2018
Sept 30, 2017
I N € T H O U S A N D S
Other miscellaneous
Other financial assets
Current
Non-current
3,407
3,407
–
–
Total
3,407
3,407
Current
Non-current
5,155
5,155
–
–
T _ 043
Total
5,155
5,155
88
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS OT H E R M I S C E L L A N E O U S
Other miscellaneous financial assets in the fiscal year 2018 mainly comprise assets related to the
sale of trade accounts receivable (€23.9 million (PY: €27.6 million)) amounting to €3,407 thousand
(PY: €3,657 thousand). The decrease is mainly due to the payment of the receivable from the sale of
the land and building of Stabilus Spain.
16 Other assets
Other assets
I N € T H O U S A N D S
VAT
Prepayments
Deferred charges
Other miscellaneous
Other assets
Sept 30, 2018
Sept 30, 2017
Current
Non-current
Current
Non-current
5,941
3,299
4,737
2,056
16,033
–
1,242
–
2,709
3,951
Total
5,941
4,541
4,737
4,765
3,570
3,062
4,274
1,812
19,984
12,718
–
507
–
2,444
2,951
Non-current prepayments comprise prepayments on property, plant and equipment.
17
Inventories
Inventories
I N € T H O U S A N D S
Raw materials and supplies
Finished products
Work in progress
Merchandise
Inventories
Inventories that are expected to be turned over within twelve months amounted to €90,763 thousand
(PY: €85,262 thousand). Write-downs on inventories to net realizable value amounted to €(11,147) thou-
sand (PY: €(10,068) thousand). In the reporting period raw materials, consumables and changes in
finished goods and work in progress recognized as cost of sales amounted to €(443,639) thousand
(PY: €(429,810) thousand).
The Stabilus Group’s prepayments for inventories amounting to €1,695 thousand (PY: €1,607 thou-
sand) are included in prepayments in other current assets.
89
T _ 044
Total
3,570
3,569
4,274
4,256
15,669
T _ 045
Sept 30, 2018
Sept 30, 2017
42,536
23,469
14,439
10,319
90,763
39,876
22,095
14,203
9,088
85,262
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS 18 Trade accounts receivable
Trade accounts receivable include the following items:
Trade accounts receivable
I N € T H O U S A N D S
Trade accounts receivable
Allowance for doubtful accounts
Trade accounts receivable
T _ 046
Sept 30, 2018
Sept 30, 2017
113,849
(2,578)
111,271
107,693
(2,546)
105,147
Trade accounts receivable increased in the fiscal year ended September 30, 2018 mainly due to the
higher sales partly compensated by the additional sale of receivables to factors.
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 receiv-
ables. The Group established an allowance for doubtful accounts based upon factors such as the credit
risk of specific customers, historical trends and other information.
The allowances for doubtful accounts developed as follows:
Allowance for doubtful accounts
T _ 047
I N € T H O U S A N D S
Allowance for doubtful accounts as of beginning of fiscal year
Foreign currency differences
Increase in the allowance
Decrease in the allowance
Sept 30, 2018
Sept 30, 2017
(2,546)
(2,227)
3
(261)
226
75
(460)
66
Allowance for doubtful accounts as of fiscal year-end
(2,578)
(2,546)
19 Current tax assets
Current tax assets 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.
90
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS 20 Cash 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, 2018, it amounted to €143,000 thousand (PY: €68,123 thousand). Cash in banks
earned marginal interest at floating rates based on daily bank deposit rates.
21 Equity
The development of the equity is presented in the statement of changes in equity.
Issued capital
Issued capital as of September 30, 2018, 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 €315 thousand represented by a maximum of 31.5 million shares,
each with nominal value of €0.01.
Capital reserves
Capital reserves as of September 30, 2018, amounted to €225,848 thousand (PY: €225,848 thou-
sand).
Retained earnings
Retained earnings as of September 30, 2018, amounted to €225,090 thousand (PY: €139,440 thou-
sand) and included the Group’s net result in the fiscal year 2018 amounting to €105,410 thousand.
Dividends
In the second quarter of fiscal 2018, a dividend amounting to €19.76 million (PY: 12.35 million) was
paid to our shareholders and a dividend amounting to €38 thousand (PY: €54 thousand) was paid to a
non-controlling shareholder of a Stabilus subsidiary.
The Management Board and the Supervisory Board have resolved to propose a dividend distribution of
€1.00 per share (PY: €0.80 per share) to the Annual General Meeting to be held in Luxembourg on
February 13, 2019. The total dividend will thus amount to €24.70 million (PY: €19.76 million) and the
distribution ratio will be 23.4% of the consolidated profit attributable to the Stabilus shareholders. As
this dividend is subject to shareholder approval at the Annual General Meeting, no liability has been
recognized in the consolidated financial statements as of September 30, 2018.
91
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS Other reserves
Other reserves comprise all foreign currency differences arising from the translation of the financial
statements of foreign operations and unrealized actuarial gains and losses. The following table shows the
changes in other reserves recognized in equity through other comprehensive income as well as the
income tax recognized in equity through other comprehensive income.
Unrealized gains/
(losses)
from foreign
currency translation
Unrealized actuarial
gains and losses
(21,625)
(14,207)
3,328
–
3,328
–
4,591
(1,285)
3,306
–
T_048
Total
(35,832)
7,919
(1,285)
6,634
–
(18,297)
(10,901)
(29,198)
4,115
–
4,115
–
678
(207)
471
–
4,793
(207)
4,586
–
(14,182)
(10,430)
(24,612)
Other comprehensive income / (expense)
I N € T H O U S A N D S
Balance as of Sept 30, 2016
Before tax
Tax (expense) / benefit
Other comprehensive income / (expense), net of taxes
Non-controlling interest
Balance as of Sept 30, 2017
Before tax
Tax (expense) / benefit
Other comprehensive income / (expense), net of taxes
Non-controlling interest
Balance as of Sept 30, 2018
1) See also consolidated statement of comprehensive income above
22 Financial liabilities
The financial liabilities comprise following items:
Financial liabilities
I N € T H O U S A N D S
Senior facilities
Other facilities
Financial liabilities
Sept 30, 2018
Sept 30, 2017
T _ 049
Current
Non-current
Total
–
313,846
313,846
5,075
6,175
Current
10,000
–
Non-current
Total
311,951
321,951
–
–
318,921
320,021
10,000
311,951
321,951
1,100
1,100
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
92
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS 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 by one additional
year at the Company’s request to June 28, 2023.
The term loan facility has to be repaid in June 29, 2022 with an amount of €51.3 million and in
June 28, 2023 with an amount of €284.8 million.
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 and €6.4 million on March 28, 2018 and reduced the
outstanding nominal amount to €336.1 million as at September 30, 2018. The Group´s liability under the
senior facility agreement (the remaining €336.1 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 euro 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 and the extension of the maturity by one year.
In the current financial year, Stabilus entered into a $7.8 million loan agreement which requires monthly
installments. The effective interest rate for this loan is 3.95% and it matures on January 15, 2025.
As at September 30, 2018, the Group had no liability under the committed €70.0 million revolving
credit facility. The Group utilized €1.0 million out of the €70.0 million revolving credit facility to secure
existing guarantees.
23 Other financial liabilities
Other financial liabilities
Sept 30, 2018
Sept 30, 2017
I N € T H O U S A N D S
Current
Non-current
Liabilities to employees
Social security contribution
Finance lease obligation
Other financial liabilities
7,557
2,920
390
10,867
–
–
520
520
Total
7,557
2,920
910
11,387
Current
Non-current
6,796
2,514
303
9,613
–
–
1,830
1,830
The finance lease obligation relates to leasing contracts for land and buildings for the production
facility in Romania.
T _ 050
Total
6,796
2,514
2,133
11,443
93
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS 24 Provisions
Provisions
Sept 30, 2018
Sept 30, 2017
I N € T H O U S A N D S
Current
Non-current
Anniversary benefits
Early retirement contracts
Employee-related costs
Environmental protection
Other risks
Legal and litigation costs
Warranties
Other miscellaneous
Provisions
17
1,020
13,574
–
1,727
94
14,030
4,458
34,920
129
1,785
–
1,099
–
–
–
389
3,402
Total
146
2,805
13,574
1,099
1,727
94
14,030
4,847
38,322
Current
Non-current
29
811
12,099
48
2,868
111
12,984
4,111
33,061
105
1,851
–
1,421
–
–
–
394
3,771
The non-current provisions developed as follows:
Changes of non-current provisions
I N € T H O U S A N D S
Balance as of Sept 30, 2016
Reclassifications
Foreign currency differences
Costs paid
Release to income
Additions
Balance as of Sept 30, 2017
Reclassifications
Foreign currency differences
Costs paid
Release to income
Additions
Balance as of Sept 30, 2018
Anniversary
benefits
61
–
(3)
–
–
47
105
–
1
–
–
23
129
Early
retirement
2,599
–
(1)
–
(747)
–
1,851
(589)
–
–
–
523
1,785
EPA
provision
Other
miscellaneous
990
–
(24)
–
–
455
1,421
–
9
(331)
–
–
1,099
131
–
29
–
–
234
394
–
3
(26)
–
18
389
The discount rate used for the calculation of non-current provisions as of September 30, 2018 was
0.0% (PY: 0.0%).
T _ 051
Total
134
2,662
12,099
1,469
2,868
111
12,984
4,505
36,832
T _ 052
Total
3,781
–
1
–
(747)
736
3,771
(589)
13
(357)
–
564
3,402
94
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS The development of current provisions is set out in the table below:
Changes of current provisions
Environ-
mental
protec-
tion
measures
Employee-
related
costs
I N € T H O U S A N D S
Legal and
litigation
costs
Anniver-
sary
benefits
Other
risks
Early
retire-
ment
Warran-
ties
Other
miscella-
neous
T _ 053
Total
Balance as of Sept 30, 2016
11,050
415
1,521
Foreign currency differences
Reclassifications
Costs paid
Release to income
Additions
972
99
4
–
230
–
(8,970)
(371)
(1,085)
(837)
9,785
Balance as of Sept 30, 2017
12,099
Foreign currency differences
Reclassifications
Costs paid
Release to income
Additions
(1)
–
(9,096)
(527)
11,099
Balance as of Sept 30, 2018
13,574
115
(4)
–
–
–
–
111
(22)
–
–
–
5
94
–
(2)
–
–
–
31
29
1
–
36
12,227
5,534
30,898
–
–
375
–
(388)
(158)
1,187
(59)
(42)
(4,594)
(3,649)
(18,711)
–
817
811
–
589
(332)
5,308
(169)
(1,567)
2,941
21,313
12,984
4,111
33,061
(90)
–
(20)
(122)
(144)
589
(24)
(380)
(12,481)
(2,952)
(26,392)
–
11
17
–
–
(272)
(118)
(2,118)
13,889
1,020
14,030
3,559
4,458
29,924
34,920
–
–
48
(1)
–
(229)
2,431
2,868
(11)
122
(47)
(1,412)
–
–
–
(1,201)
1,361
1,727
The provision for employee-related expenses comprises employee bonuses and termination benefits.
The provision for environmental protections 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 environ-
mental remediation. In 2011, the EPA contacted seven companies in the North Penn Area 5 as poten-
tial 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 apportionment method 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, 2018. For the cor-
responding ongoing long-term bioremediation a current provision of €0 thousand (PY: €48 thousand)
and a non-current provision of €1,099 thousand (PY: €1,421 thousand) has been recorded as of Sep-
tember 30, 2018.
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.
95
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS 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 pre-
sented in other financial assets if the recognition criteria are met.
25 Pension 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 _ 054
I N € T H O U S A N D S
Principal pension plan
Deferred compensation
Pension plans and similar obligations
Sept 30, 2018
Sept 30, 2017
50,887
1,293
52,180
52,081
1,155
53,236
D E F I N E D B E N E F I T P L A N S A N D D E F E R R E D C O M P E N S AT I O N
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 bene-
fit 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 €50,887 thousand (PY: €52,081thousand) result
from unfunded accumulated benefit obligations.
The weighted average duration of the defined benefit obligations in the fiscal year 2018 is 15.4 years
(PY: 16.5 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.
96
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS The total deferred compensation as of September 30, 2018, amounts to €1,293 thousand
(PY: €1,155 thousand).
The unfunded status is as follows:
Unfunded status
I N € T H O U S A N D S
Present value of defined benefit obligations
Less: Fair value of plan assets
Unfunded status
The present value of the defined benefit obligation developed as follows:
Present value of defined benefit obligations
I N € T H O U S A N D S
Present value of defined benefit obligations as of beginning of fiscal year
Service cost
Interest cost
Effect of change in financial assumptions
Effect of change in demographic assumptions
Experience assumptions
Actuarial (gains) / losses
Pension benefits paid
Present value of defined benefit obligations as of fiscal year-end
The pension cost in the consolidated statement of comprehensive income includes the following
expenses for defined benefit plans:
Pension cost for defined benefit plans
I N € T H O U S A N D S
Service cost
Interest cost
Pension cost for defined benefit plans
97
T _ 055
Year ended Sept 30,
2018
52,180
–
2017
53,236
–
52,180
53,236
T _ 056
Year ended Sept 30,
2018
53,236
313
980
2017
58,738
233
785
(1,104)
(4,825)
533
(107)
(678)
(1,671)
52,180
–
234
(4,591)
(1,929)
53,236
T _ 057
2017
233
785
1,018
Year ended Sept 30,
2018
313
980
1,293
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS 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
I N € T H O U S A N D S
Sept 30, 2014
Sept 30, 2015
Sept 30, 2016
Sept 30, 2017
Sept 30, 2018
Defined benefit
obligation
Experience
adjustments
48,353
47,989
58,738
53,236
52,180
914
(205)
(1,055)
234
(107)
T _ 058
Change in
demographic
assumptions
–
–
–
–
533
Generally, the measurement date for Group’s pension obligations is September 30. The measurement date
for 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
I N % P. A .
Discount rate
Pension increases
Turnover rate
Biometric assumptions
Year ended Sept 30,
2018
2.00%
1.50%
4.00%
T _ 059
2017
1.87%
1.50%
4.00%
Heubeck
Mortality Table
2018G
Heubeck
Mortality Table
2005G
The discount rates for the pension plans are determined annually as of August 31,2018, on the basis
of first-rate, fixed-interest industrial bonds with maturities and values matching those of the pension
payments.
98
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS S E N S I T I V I T Y A N A LYS I S
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 €3,870 thousand
lower or €4,395 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 esti-
mated €1,276 thousand higher or €1,229 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, 2018
due to a 1 year decrease / increase of the life expectancy would result in an increase of €1,993 thou-
sand or a decrease of €1,988 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 com-
pound 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 2019 will amount to €1,956 thousand
(PY: €1,882 thousand).
D E F I N E D C O N T R I B U T I O N P L A N S
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 €14,183 thousand
(PY: €14,084 thousand).
26 Trade accounts payable
Trade accounts payable amount to €83,171 thousand (PY: €79,073 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.
27 Current tax liabilities
The current tax liabilities relate to income and trade taxes.
99
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS 28 Other liabilities
The following table sets out the breakdown of Group’s other current and non-current liabilities:
Other liabilities
Sept 30, 2018
Sept 30, 2017
I N € T H O U S A N D S
Current
Non-current
Advanced payments received
Vacation expenses
Other personnel-related
expenses
Outstanding costs
Miscellaneous
Other liabilities
1,436
3,437
6,771
2,668
313
14,625
–
–
–
–
–
–
29 Leasing
O P E R AT I N G L E A S E
Current
Non-current
Total
1,436
3,437
6,771
2,668
313
2,807
3,396
6,517
2,472
240
14,625
15,432
–
–
–
–
–
–
T _ 060
Total
2,807
3,396
6,517
2,472
240
15,432
The Group entered into non-cancellable operating leases for IT hardware, cars and other machinery
and equipment with lease terms of 2 to 6 years. The future minimum lease payments relating to leasing
agreements during the basic rental period when they cannot be terminated are as follows:
Operating lease
I N € T H O U S A N D S
Within one year
After one year but not more then five years
More than five years
Total
T _ 061
Minimum lease payments in
the year ended Sept 30,
2018
7,764
15,202
117
23,083
2017
6,677
15,886
165
22,728
The increase in total minimum lease payments for one year is primarily due to the expansion of the
rented production facilities in China and Mexico and the decrease after one year but not more than
five years is due to favorable amendments of leasing contracts.
Current period expense for operating leases amounts to €9,050 thousand (PY: €8,358 thousand).
100
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS F I N A N C E L E A S E
Finance lease
I N € T H O U S A N D S
Within one year
After one year but not later than five years
More than five years
Total
T _ 062
Sept 30, 2018
Sept 30, 2017
Minimum lease
payments
(MLP)
Present value
of MLP
Minimum lease
payments
(MLP)
Present value
of MLP
438
1,831
0
2,269
427
1,625
0
2,052
613
2,990
62
3,665
555
2,854
60
3,469
As of September 30, 2018, there are two real estate lease contracts regarding a production facility in
Romania recorded as finance lease.
Production facility:
In fiscal year 2018 the Orion Rent Imobiliare S.R.L, Brasov, made an early settlement of the finance
lease arrangement for a Romania Powerise® production building that is now owned by Stabilus.
Stabilus Romania S.R.L. entered into a real estate lease agreement which was classified as a finance
lease starting March 1, 2015. On July 1, 2016, Stabilus Romania S.R.L. renewed the real estate lease
agreement to extend the existing production facility for the production of gas springs and dampers.
The underlying interest rate amounts to 4.75% (PY: 4.75%). The net carrying amount of the finance
lease obligation at the balance sheet date was €910 thousand (PY: €1,287 thousand). The contract has
duration of 75 months and can be extended.
The payments for finance leases in the fiscal year ended September 30, 2018, amounted to €1,253 thou-
sand (PY: €547 thousand). No contingent rents have been recognized as an expense during the period.
30
Contingent liabilities and other financial commitments
C O N T I N G E N T L I A B I L I T I E S
Contingent liabilities are uncertainties for which the outcome has not been determined. If the outcome
is probable and estimable, the liability is shown in the statement of financial position.
In regards to a potential contingent obligation in the EPA Colmar, please see Note 24.
101
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS G U A R A N T E E S
On October 11, 2005, Stabilus Romania S.R.L., Brasov, (“STRO”) entered into a rental agreement with
ICCO SRL (ICCO) for a production facility used for production facilities with an area of 8,400 square
meters for STRO in Brasov, Romania. The initial rental agreement has a contract period of seven years
which has been extended. STAB Dritte Holding GmbH, Koblenz, merged into Stable Beteiligungs GmbH,
Koblenz, a wholly owned subsidiary of the Company, issued a bank guarantee for €600 thousand (PY:
€600 thousand), in 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 land and 5,881 square meters of construction buildings in Ramos Arizpe, State of Coahuila,
Mexico. The lease agreement has a contract period of ten years and will be 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 give 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, manage-
ment believes these guaranties should not result in a material adverse effect for the Group.
OT H E R F I N A N C I A L C O M M I T M E N T S
The nominal value of the other financial commitments as of September 30, 2018 amounted to
€36,141 thousand (PY: €30,575 thousand). This increase reflects a signed contract for acquisition
of land and building that will be closed in early 2019.
102
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS Nominal values of other financial commitments are as follows:
Financial commitments
I N € T H O U S A N D S
Capital commitments for fixed and other intangible assets
Obligations under rental and leasing agreements
Total
I N € T H O U S A N D S
Capital commitments for fixed and other intangible assets
Obligations under rental and leasing agreements
Total
31 Financial instruments
Sept 30, 2018
1 to 5 years
More than
5 years
–
15,202
15,202
–
117
117
Sept 30, 2017
1 to 5 years
More than
5 years
–
15,886
15,886
–
165
165
Less
than 1
year
13,058
7,764
20,822
Less
than 1
year
7,847
6,677
14,524
T _ 063
Total
13,058
23,083
36,141
Total
7,847
22,728
30,575
The following table shows the carrying amounts and fair values of the Group’s financial instruments. 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
I N € T H O U S A N D S
Trade accounts receivables
Cash
Other financial assets
Total financial assets
Financial liabilities
Trade accounts payable
Finance lease liabilities
Total financial liabilities
Sept 30, 2018
Sept 30, 2017
Measurement
category
acc. to IAS 39
LaR
LaR
LaR
FLAC
FLAC
–
Carrying
amount
111,271
143,000
3,407
257,678
320,021
83,171
910
Fair value
111,271
143,000
3,407
257,678
312,858
83,171
2,052
Carrying
amount
105,147
68,123
5,155
178,425
321,951
79,073
2,133
T _ 064
Fair value
105,147
68,123
5,155
178,425
321,435
79,073
3,469
404,102
398,081
403,157
403,977
Aggregated according to categories in IAS 39:
Loans and receivables (LaR)
257,678
257,678
178,425
178,425
Financial liabilities measured at amortized cost
(FLAC)
403,192
396,029
401,024
400,508
103
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS 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 carry-
ing amounts (i.e. trade accounts receivable and payable, cash and other financial liabilities).
Financial instruments
T _ 065
I N € T H O U S A N D S
Financial liabilities
Senior facilities
Other facilities
Finance lease liabilities
Sept 30, 2018
Sept 30, 2017
Total
Level 11)
Level 22)
Level 33)
Total
Level 11)
Level 22)
Level 33)
306,683
6,175
2,052
–
–
–
306,683
6,175
–
–
321,435
–
–
2,052
3,469
–
–
–
321,435
–
–
–
–
3,469
1) Fair value measurement based on quoted prices (unadjusted) in active markets for these or identical instruments.
2) 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).
3) Fair value measurement based on inputs that are not observable market data.
The fair value is the price that would be received to sell an asset or paid to transfer the 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 fair value of the quoted senior secured notes is based on price quotations at the reporting date.
• The valuation technique used for the determination of the obligations under finance leases is the
discounted cash flow method. The valuation model considers the present value of expected payments,
discounted using a risk-adjusted discount rate depending on the maturity of the payment. The
expected payments are determined by considering contractual redemption payments and interest
payments with the currently agreed interest rate. Significant unobservable inputs are the risk-
adjusted discount rates from 4.75% and the forecasted interest payments. Therefore, the fair value
would change if the risk-adjusted discount rate or the interest rate changed.
• The fair value of embedded derivative instruments is calculated using a standard option pricing
model. For the valuation, the credit spread used is calibrated such that the model reproduces the
current market of the notes quoted on the Luxembourg Stock Exchange at the reporting date.
The finance lease contracts include fixed-interest rates. Therefore, the fair value of finance lease liabili-
ties (categorized as Level 3 in the fair value hierarchy table) is not exposed to interest risk through
fluctuation.
The net gains and losses on financial instruments result in the fiscal year ended September 30, 2018,
from the currency translation and changes in the estimate of future cash flows of loans and receivables
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 loss amounted to
€2,624 thousand (PY: loss €16,471 thousand).
Total interest income and expense from financial instruments is reported in Notes 8 and 9.
104
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS The value of the embedded derivatives was affected by the interest of the comparable market instru-
ment on each potential exercise date and will rise if the relevant interest rate declines and vice versa.
32 Risk reporting
I N T E R N A L R I S K M A N A G E M E N T
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 the sales invoicing behavior. Control
impulses for the individual companies are derived from this. Customer behavior is ascertained and ana-
lyzed continuously and the information obtained from this serves as an early warning indicator for pos-
sible 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 assessed by Group management.
F I N A N C I A L R I S K S
The Group’s Corporate Treasury function provides services to the business, co-ordinates 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 cur-
rency 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 useful. The use of financial derivatives is governed by the Group’s pol-
icies 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, 2018.
C R E D I T R I S K S
Credit risk refers to the risk that 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 counter-
parties and obtaining sufficient collateral where appropriate, as a means of mitigating the risk of
financial loss from defaults. The Group’s exposure and the credit ratings of its counterparties are moni-
tored 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, commer-
cial considerations impact the credit lines per customer.
105
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS The maximum exposure to credit risk of financial assets is the carrying amount as follows:
Credit risks included in financial assets
T _ 066
Sept 30, 2018
Neither past
due nor
impaired
< 30 days
30 – 60
days
60 – 90
days
90 – 360
days
> 360 days
Total
I N € T H O U S A N D S
Financial assets
Trade accounts receivable
100,664
7,946
Other miscellaneous
3,407
–
Total
104,071
7,946
870
–
870
692
–
692
908
–
908
191
–
191
111,271
3,407
114,678
I N € T H O U S A N D S
Financial assets
Trade accounts receivable
Other financial assets
Total
Neither past
due nor
impaired
< 30 days
30 – 60
days
60 – 90
days
90 – 360
days
> 360 days
Total
Sept 30, 2017
98,509
5,155
4,821
–
103,664
4,821
965
–
965
190
–
190
620
–
620
42
–
42
105,147
5,155
110,302
Credit risk of other financial assets of the Group, which comprise cash and cash equivalents, and mis-
cellaneous financial assets, arises from 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 coun-
terparties are banks with high credit ratings assigned by international credit rating agencies and are
also typically lenders to the Group. Therefore, credit quality of financial assets which are neither past
due nor impaired is assessed to be good.
In fiscal year 2018, the Group had two customers which accounted for at least 10% of total external
revenue and one customer which accounted for at least 8% of total external revenue. The revenue with
these customers was €113,706 thousand (PY: €109,304 thousand), €96,882 thousand (PY: €88,062 thou-
sand) and €75,568 thousand (PY: €80,272 thousand), respectively. In fiscal year 2018 and 2017, such
revenue was generated in all three operating segments.
L I Q U I D I T Y R I S K S
The Management Board has established an appropriate liquidity risk management framework for the
management of the Group’s short, medium and long-term funding and liquidity management require-
ments. The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve
borrowing facilities and by monitoring forecast cash flows at regular intervals.
106
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS The following maturities summary shows how cash flows from the Group’s liabilities as of Septem-
ber 30, 2018, will influence its liquidity situation. 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.
Liquidity outflows for liabilities
I N € T H O U S A N D S
Senior facility
Other facilities
Finance lease
2019
2020
2021
2022
2023
After 2023
Total
3,193
3,193
3,193
54,364
286,810
–
350,753
1,100
1,100
1,100
1,100
1,100
1,466
6,966
Trade accounts
payable
83,171
–
–
–
–
–
T _ 067
Total
87,902
4,734
4,988
56,159
287,910
1,466
438
441
695
695
–
–
2,269
83,171
443,159
The senior facilities give planning stability over the next years. At the balance sheet date, the Group
has undrawn committed facilities of €70.0 million (PY: €70.0 million) to reduce liquidity risks.
F I N A N C E M A R K E T R I S K S
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, 2018, 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 outside the Eurozone. 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 in currencies
other than the functional currency and loans in foreign currencies. In order to mitigate the impact of
currency exchange rate fluctuations for the operating business, the Group continually assesses its expo-
sure and attempts to balance sales 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.
107
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS A 1% increase / decrease in value of US dollar compared to Euro would lead to an increase / decrease
of EBIT of approximately €0.5 million.
Interest rate risk
The Group is exposed to interest rate risks, which mainly relate to debt obligations, as the Group
financing is based on Euribor-related credit agreements.
The interest rate risk is monitored by using the cash flow sensitivity of the Group’s cash flows due to
floating interest loans.
A 1% increase of floating interest rates (Euribor) would lead to an increase of financial expense of
approximately €3.4 million. As the Euribor is below 0% as of September 30, 2018, a decrease has no
effect on financial expenses.
33 Capital management
The Stabilus Group’s capital management covers both equity and liabilities. A further objective is to
maintain a balanced mix of debt and equity.
Due to the broad product range and the activities on global markets, the Stabilus Group generates
under normal economic conditions predictable and sustainable cash flows.
The equity ratio as of September 30, 2018, is calculated as follows:
Equity ratio
I N € T H O U S A N D S
Equity
Total assets
Equity ratio
T _ 068
Year ended Sept 30,
2018
426,523
1,010,442
42.2%
2017
336,380
929,995
36.2%
The Stabilus Group is not subject to externally imposed capital requirements.
The ratio of net debt to adjusted EBITDA (earnings before interest, taxes, depreciation and amortization),
which is also used as a covenant in the senior facilities agreement, is an important financial ratio (debt
ratio) used in the Stabilus Group. The objective is to improve the debt ratio in the future. The Company
does not expect a breach of this covenant.
108
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS 34
Notes 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.
Interest payments of €3,837 thousand (PY: €8,280 thousand) are reflected in cash outflows from
financing activities. Income tax payments of €36,361 thousand (PY: €32,090 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.
Reconciliation financing activities
I N € T H O U S A N D S
Balance as of Sept 30, 2017
Cash receipts
Cash payments
Changes from financing cash flows
Effect of changes in foreign exchange rates
Other changes
Balance as of Sept 30, 2018
35
Segment reporting
Senior facility
agreement
321,951
–
(6,427)
(6,427)
–
(1,678)
313,846
Other
facilities
–
6,427
(563)
5,864
311
–
6,175
T _ 069
Finance
leases
2,133
–
(1,223)
(1,223)
–
–
910
The Stabilus Group is organized and managed primarily on a regional level. The three reportable oper-
ating segments of the Group are Europe, NAFTA and Asia / Pacific including RoW. 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 deprecia-
tion / amortization of fair value adjustments resulting from purchase price allocations (PPAs).
109
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS Segment information for the fiscal years ended September 30, 2018, and 2017 is as follows:
Segment reporting
T _ 070
I N € T H O U S A N D S
External revenue1)
Intersegment revenue1)
Total revenue1)
Depreciation and amortization
(incl. impairment losses)
EBIT
Adjusted EBIT
I N € T H O U S A N D S
External revenue1)
Intersegment revenue1)
Total revenue1)
Depreciation and amortization
(incl. impairment losses)
EBIT
Adjusted EBIT
Europe
NAFTA
Asia / Pacific and RoW
Year ended Sept 30,
Year ended Sept 30,
Year ended Sept 30,
2018
491,323
32,248
523,571
2017
456,306
30,418
486,724
2018
348,127
26,075
374,202
2017
350,737
24,689
375,426
2018
2017
123,114
102,972
138
653
123,252
103,625
(30,239)
(32,426)
(12,357)
(12,721)
72,435
77,378
63,015
67,963
48,848
51,941
51,806
55,142
(5,940)
19,879
20,029
(5,155)
14,368
14,526
Total segments
Other / Consolidation
Stabilus Group
Year ended Sept 30,
Year ended Sept 30,
Year ended Sept 30,
2018
962,564
58,461
1,021,025
(48,536)
141,162
149,348
2017
910,016
55,760
965,776
(50,302)
129,189
137,631
2018
–
(58,461)
(58,461)
(9,280)
(9,280)
–
2017
–
(55,760)
(55,760)
(10,800)
(10,800)
–
2018
2017
962,564
910,016
–
–
962,564
910,016
(57,816)
131,882
149,348
(61,103)
118,389
137,631
1) Revenue breakdown by location of Stabilus company (i.e. “billed-from view”).
The column “Other / Consolidation” includes among others the effects from the purchase price alloca-
tion for the April 2010 business combination. The effects from the purchase price allocation for the
June 2016 business combination are included in the regions.
The EBIT of operating segment Europe in the fiscal year ended September 30, 2018, includes impairment
losses of €(1,671) thousand (PY: €(2,860) 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.
110
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS 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 _ 071
Year ended Sept 30,
2018
2017
149,348
137,631
–
149,348
(17,466)
131,882
6,704
(12,084)
126,502
–
137,631
(19,242)
118,389
22,323
(29,799)
110,913
T _ 072
Year ended Sept 30,
2018
356,540
130,146
4,637
491,323
190,180
157,947
348,127
91,855
11,075
7,632
4,479
5,882
2,191
123,114
962,564
2017
331,964
119,829
4,513
456,306
185,154
165,583
350,737
67,410
12,855
7,561
6,643
6,511
1,993
102,973
910,016
I N € T H O U S A N D S
Total segments’ profit (adjusted EBIT)
Other/ consolidation
Group adjusted EBIT
Adjustments to EBIT
Profit from operating activities (EBIT)
Finance income
Finance costs
Profit / (loss) before income tax
The information about geographical areas is set out in the following tables:
Geographical information: Revenue by country
I N € T H O U S A N D S
Germany
Romania
UK
Europe
Mexico
USA
NAFTA
China
South Korea
Brazil
Australia
Japan
New Zealand
Asia / Pacific and RoW
Revenue
111
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS Geographical information: Non-current assets by country
T _ 073
I N € T H O U S A N D S
Germany
Romania
Spain
Luxembourg
UK
Switzerland
France
Goodwill
Europe
USA
Mexico
Goodwill
NAFTA
China
South Korea
Brazil
Australia
Japan
New Zealand
Goodwill
Asia / Pacific and RoW
Total
Year ended Sept 30,
2018
249,109
28,192
854
589
5,905
0
10
111,876
396,535
99,648
29,563
70,767
199,978
39,687
8,567
1,575
966
1,304
410
12,588
65,097
2017
233,998
26,496
910
647
6,325
75
13
111,921
380,385
95,356
28,170
69,649
193,175
35,328
8,967
1,875
975
1,277
444
12,613
61,479
661,610
635,039
The non-current assets above exclude financial instruments, deferred tax assets, post-employment benefit assets and rights arising under insurance contracts.
112
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS 36
Share-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).
M AT C H I N G S TO C K P R O G R A M
The variable compensation for the members of the Management Board includes a matching stock pro-
gram. 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. Participation in the matching
stock program requires Management Board members to invest in shares of the Company. The invest-
ment 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.
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 sub-
sequent 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 multi-
plied 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.
113
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS P H A N TO M S TO C K P R O G R A M
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.
M E A S U R E M E N T O F FA I R VA L U E S
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 to September 30, 2018.
114
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS Input parameters for fair value measurement of MSP
T_074
VA L UAT I O N D AT E
MSP B (2014)
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/B (2015)
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/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
Sept 30, 2018
Sept 30, 2017
Sept 30, 2016
Sept 30, 2015
€8.72
€50.10
37.0%
1.00%
€8.78
€32.25
31.0%
1.50%
2.0 years
3.0 years
(0.72)%
€24.82
(0.20)%
€24.82
€12.41
€71.70
–
–
–
–
€24.82
€15.22
€71.70
27.0%
1.00%
1.0 year
(0.62)%
€31.08
€14.99
€71.70
27.0%
1.00%
€12.41
€76.79
27.0%
1.00%
1.0 year
(0.76)%
€24.82
€14.14
€76.79
32.0%
1.00%
€14.12
€76.79
34.0%
1.00%
€7.83
€50.10
33.0%
1.00%
2.0 years
3.0 years
(0.73)%
€31.08
(0.72)%
€31.08
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2.0 years
3.0 years
(0.54)%
€48.64
(0.63)%
€48.64
€10.03
€71.10
30.0%
1.00%
3.0 years
(0.40)%
€74.74
–
–
–
–
–
–
–
115
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS In the fiscal year 2018 options for the MSP A and B were issued.
Number of share options
T_075
MSP B (2014)
MSP A/B (2015)
MSP A/B (2016)
MSP A (2017)
Number
of options
Exercise
price
Number
of options
Exercise
price
Number
of options
Exercise
price
Number
of options
Exercise
price
Outstanding as at October 1, 2014
–
–
Granted during the year
19,721
€24.82
Forfeited during the year
Exercised during the year
–
–
–
–
Outstanding as at September 30, 2015
19,721
€24.82
Exercisable as at September 30, 2015
–
–
Outstanding as at October 1, 2015
19,721
€24.82
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Granted during the year
–
–
35,911
€31.08
Forfeited during the year
133
€24.82
916
€31.08
Exercised during the year
–
–
–
–
Outstanding as at September 30, 2016
19,588
€24.82
34,995
€31.08
Exercisable as at September 30, 2016
–
–
–
–
Outstanding as at October 1, 2016
19,588
€24.82
34,995
€31.08
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Granted during the year
Forfeited during the year
Exercised during the year
–
–
–
–
–
–
–
–
–
–
–
–
27,449
€48.64
–
–
–
–
Outstanding as at September 30, 2017
19,588
€24.82
34,995
€31.08
27,449
€48.64
Exercisable as at September 30, 2017
–
–
–
–
–
–
Outstanding as at October 1, 2017
19,588
€24.82
34,995
€31.08
27,449
€48.64
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Granted during the year
Forfeited during the year
Exercised during the year
–
–
–
–
–
–
–
4,884
–
–
–
–
–
7,320
–
–
–
–
24,190
€74.74
17,692
–
–
–
Outstanding as at September 30, 2018
19,588
€24.82
30,111
€31.08
20,129
€48.64
6,498
€74.74
Exercisable as at September 30, 2018
19,588
€24.82
–
–
–
–
–
–
116
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS The Phantom Stock Program is measured by using a binomial stimulation and accrued over the vesting time.
Input parameters for fair value measurement of PSP
T_076
VA L UAT I O N D AT E
Phantom Stock Program 2014/15
Fair value
Share price
Expected annual dividend yield
Exercise price
Phantom Stock Program 2015/16
Fair value
Share price
Expected annual dividend yield
Exercise price
Phantom Stock Program options
Outstanding as at October 1, 2014
Granted during the year
Forfeited during the year
Exercised during the year
Outstanding as at September 30, 2015
Exercisable as at September 30, 2015
Outstanding as at October 1, 2015
Granted during the year
Forfeited during the year
Exercised during the year
Outstanding as at September 30, 2016
Exercisable as at September 30, 2016
Outstanding as at October 1, 2016
Granted during the year
Forfeited during the year
Exercised during the year
Outstanding as at September 30, 2017
Exercisable as at September 30, 2017
Outstanding as at October 1, 2017
Granted during the year
Forfeited during the year
Exercised during the year
Outstanding as at September 30, 2018
Exercisable as at September 30, 2018
Sept 30, 2018
Sept 30, 2017
Sept 30, 2016
Sept 30, 2015
€71.10
€71.10
1.00%
–
€70.63
€71.10
1.00%
–
€76.28
€76.79
1.00%
–
€75.52
€76.79
1.00%
–
€49.27
€50.10
1.00%
–
€48.78
€50.10
1.00%
–
€32.25
€32.25
–
–
€32.25
€32.25
–
–
T_077
Phantom Stock
Program 2014/15
Phantom Stock
Program 2015/16
Number of
options
Exercise
price
Number of
options
Exercise
price
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
3,217
–
–
3,217
–
3,217
–
–
–
3,217
–
3,217
–
–
–
3,217
3,217
–
644
–
2,573
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
5,642
–
–
5,642
–
5,642
–
–
–
5,642
–
5,642
–
–
–
5,642
5,642
–
1,209
–
4,433
4,433
117
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS T _ 078
2017
797
47
–
152
–
949
Year ended Sept 30,
2018
790
52
6
331
–
1,127
E X P E N S E R E C O G N I Z E D I N P R O F I T O R L O S S
An amount of €373 thousand (PY: €673 thousand) was recognized in the related employee benefit
expenses and an amount of €1,376 thousand (PY: €1,003 thousand) in provisions for employee-
related expenses.
37 Auditor’s fees
Auditor’s fees
I N € T H O U S A N D S ( E X C L U D I N G VAT )
Audit fees
Thereof for the prior year
Audit-related fees
Tax fees
Other fees
Total
For fiscal year ended September 30, 2018, a global fee (excluding VAT) of €790 thousand (PY: €797 thou-
sand) was agreed with the Group auditors for the audit of the consolidated and annual financial state-
ments of the Stabilus entities. These fees are included in the Group’s administrative expenses.
In addition, KPMG Luxembourg Société cooperative, Luxembourg, and other member firms of the KPMG
network, billed audit-related fees amounting to €6 thousand (PY: €0 thousand) and tax service fees
amounting to €331 thousand (PY: €152 thousand) to the Stabilus Group. Tax services comprise the
preparation of tax filings and the provision of tax advice.
38 Related party relationships
In accordance with IAS 24, persons or entities that control or are controlled by the Stabilus Group shall
be disclosed, unless they are included in consolidation as a consolidated entity.
The disclosure obligation under IAS 24 furthermore extends to transactions with persons who exercise
a significant influence on the financial and business policies of the Stabilus Group, including close family
members or interposed entrepreneurs. A significant influence on the financial and business policies of
the Stabilus Group can hereby be based on a shareholding of 20% or more in Stabilus, a seat on the
Management Board of Stabilus or another key position.
118
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS 39
Remuneration of key management personnel
The key management personnel are the members of the Management Board Dr. Stephan Kessel
(Interim CEO - since August 1, 2018), Mark Wilhelms (CFO), Markus Schädlich (Head of Asia / Pacific
and Rest of World (RoW) region) – since July 1, 2018), Andreas Schröder (Group Financial Reporting
Director), Andreas Sievers (Director Group Accounting and Strategic Finance Projects) and Dietmar
Siemssen (CEO – until July 31, 2018).
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 amounted to €3,676 thousand (PY: €2,710 thousand),
thereof €3,294 thousand (PY: €2,434 thousand) is classified as short-term employee benefits, and
€382 thousand (PY: €276 thousand) classified as share-based payments.
The compensation of the Management Board members for fiscal year 2018 was split in a fixed com-
pensation of €1,590 thousand (PY: €1,383 thousand) and a variable compensation of €1,704 thou-
sand (PY: €1,051 thousand).
The total remuneration to the members of the Supervisory Board amounts to €457 thousand
(PY: €359 thousand).
Members of the Management and Supervisory Board have direct interest in Stabilus S. A. of about
jointly 0.3% of the total shares.
40 Subsequent events
As of December 12, 2018, there were no further events or developments that could have materially
affected the measurement and presentation of Group’s assets and liabilities as of September 30, 2018.
Luxembourg, December 12, 2018
Stabilus S. A.
Management Board
119
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS RESPONSIBILITY STATEMENT
We, Dr. Stephan Kessel (Chief Executive Officer), Mark Wilhelms (Chief Financial Officer), Markus
Schädlich (Head of the Asia / Pacific and Rest of World), 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 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 manage-
ment report includes a fair review of the development and performance of the business and the posi-
tion 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 12, 2018
Dr. Stephan Kessel
Mark Wilhelms
Andreas Schröder
Andreas Sievers
Markus Schädlich
Management Board
120
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS
MANAGEMENT BOARD OF STABILUS S. A.
The Management Board comprises four members:
Markus Schädlich is the Head of the Asia / Pacific and Rest of
World region. In recent seven years, he directed the development
Dr. Stephan Kessel (Chairman) took on the role of Interim CEO
of Jost Werke AG in Japan / Asia. The main focus of his activities
effective August 1, 2018 while his mandate as member of the Supervi-
was the fostering of growth and integration of the Company’s Asia
sory Board is temporarily suspended for the length of this interim
activities into the overall corporate strategy and to prepare Asia for
period. Since 2008, he has performed a variety of roles on the Advisory
the IPO in 2017. Prior to that, he spent several years working for a
Board of Stabilus from 2008 to 2011 acted as the CEO of Stabilus. In
Japan-based management consultancy, specializing in the manage-
2014, following the floatation of the Company, he joined the newly
ment of global companies, strategy implementation- and M&A pro-
formed Supervisory Board of Stabilus. At the shareholder meeting on
jects. During this time, he held board member positions of various
February 14, 2018, he was appointed Chairman of the Supervisory
global players in Asia (Karmann, Magna, Jungbunzlauer, IAV, Saf-
Board. It is planned that Dr. Kessel returns to this position on the
eray, etc.). His career began in 1995 at Webasto, where, from 1998
Supervisory Board once the new CEO has been appointed. Stephan
onwards, he oversaw the setting up of the Thermo Systems unit in
Kessel was for many years a member of the management at Conti-
Japan and Korea, subsequently moving on from there to Jost. He
nental AG and the Chief Executive Officer until 2002. Since then
studied Production Technology at the Technical University of
Dr. Kessel has taken up a number of board positions at European
Munich. Mr. Schädlich was appointed to the Management Board in
companies including Stabilus. From 2008 through 2010, Dr. Kessel
2018. Until September 30, 2018 he also served Jost Werke AG in
was Chairman of the Board of the former holding company of the
Japan fulfilling previous commitments. He is Representative Direc-
operating Stabilus Group. Currently he serves as Chairman on the
tor of Jungbunzlauer Japan Co. Ltd. until the end of the year and of
Boards of Novem Car Interior GmbH and Dayco Products L.L.C.
Lamilux Japan Co. Ltd.
Mark Wilhelms is the Chief Financial Officer and was appointed
Andreas Schröder is the Group Financial Reporting Director and
to the Management Board in 2014. With 25 years of experience in
was appointed to the Management Board in 2014. Mr. Schröder
the automotive industry, Mr. Wilhelms joined Stabilus in 2009 from
joined Stabilus in 2010. Prior to that, he worked for several years
FTE Automotive, where he served as Chief Financial Officer for six
in assurance and advisory business services at Ernst & Young. He
years. From 2007, he was also head of the NAFTA region at FTE.
holds a degree in business administration. Mr. Schröder also holds
Prior to that, he held various management positions in finance,
further management positions within the Stabilus Group.
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
Andreas Sievers is the Director Group Accounting and Strategic
in economics. Since August 29, 2018 he has been member of the
Finance Projects of the Stabilus Group. Mr. Sievers joined Stabilus
Supervisory Board of NORMA Group SE. Mr. Wilhelms also holds
in 2016. From 2010 to 2015 he worked for the Schaeffler Group
further management positions within the Stabilus 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, respec-
tively. Mr. Sievers also holds further management positions within the
Stabilus Group.
121
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS SUPERVISORY BOARD OF STABILUS S. A.
The Supervisory Board comprises four members:
Udo Stark served as a Chairman of the Supervisory Board of
Dr. Ralf-Michael Fuchs has served as a member of the Supervisory
Stabilus S. A. from 2014 until the Company’s AGM in February
Board since 2015. He was member of the Dürr Senior Executive Board
2018. Mr. Stark was reappointed Chairman of the Supervisory
and Chief Executive of Division Measuring and Process Systems until
Board in July 2018 for the period during which Dr. Stephan Kessel
2017. He served as Chairman of the board of various Dürr companies
will serve as Interim CEO. Mr. Stark was Chairman of the Executive
and as Chairman of the management board of Carl SCHENCK AG.
Board of MTU Aero Engines AG until 2007. From 1991 until 2000,
Before he joined Dürr AG in 2000, he held various leading positions at
Mr. Stark led the listed plant construction and machinery group
IWKA AG and Agiv AG. From 2004 until 2008 he was member of the
Agiv AG. Subsequently, he became Chairman of the Shareholder
Board of Directors of Nagahama Seisakusho Ltd., Japan.
Committee at Messer Griesheim GmbH, Chairman of the Executive
Board of mg technologies AG and CEO of MTU Aero Engines AG.
Dr. Dirk Linzmeier has served as a member of the Supervisory
From 2008 to 2013, Mr. Stark served as a member of the Supervi-
Board since 2018. He is CEO of the Osram Continental GmbH.
sory Board of MTU Aero Engines AG. Until May 2016, he was a
From 2006 to 2017 he held several leading positions in the devel-
member of the Supervisory Board of Bilfinger SE and until Septem-
opment of driver assistance systems and automotive electronics at
ber 2015 he was the Chairman of the Audit Committee of Bilfinger
Robert Bosch GmbH. From 2014 to 2017 he served as Vice Presi-
SE. Until December 2015, he was a member of the Advisory Board
dent and Managing Director of an Automotive Electronics Business
of Barmenia Versicherungen and since September 2014, he is
Unit and as Vice President of Corporate Start-up Management.
Chairman of the Advisory Board of Arvos Group.
Prior to that, he worked as a development engineer in Advanced
Development at DaimlerChrysler AG.
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 Manage-
ment 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.
122
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS 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
R E P O R T O N T H E A U D I T O F T H E C O N S O L I DAT E D F I N A N C I A L S TAT E M E N T S
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 2018,
and the consolidated statements of comprehensive income, changes in equity and cash flows for the
year then ended, and notes to the consolidated financial statements, including a summary of signifi-
cant 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 2018, 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 (the “Law of 23 July 2016”) and with International Standards on Auditing
(ISAs) as adopted for Luxembourg by the “Commission de Surveillance du Secteur Financier” (the
“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 Profes-
sional Accountants (the “IESBA Code”) as adopted for Luxembourg by the CSSF together with the ethi-
cal requirements that are relevant to our audit of the consolidated financial statements, and have ful-
filled 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.
123
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS Goodwill
a) 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 2018, the Group's goodwill represents EUR 195,2 million or 19.3% 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 dis-
count 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 signif-
icant goodwill was found to be sensitive to changes in those assumptions.
124
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS 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 annual report including the management report and the Corporate Govern-
ance Statement 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 noth-
ing 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 presentation of 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.
125
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS 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 influ-
ence 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 consolidated financial 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 misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the over-
ride of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit proce-
dures 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 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 atten-
tion in our report of the “Réviseur d’Entreprises agréé” to the related disclosures in the consoli-
dated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclu-
sions 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 con-
tinue 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 underly-
ing 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.
126
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS 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 regula-
tion precludes public disclosure about the matter.
R E P O R T O N OT H E R L E G A L A N D R E G U L ATO RY R E Q U I R E M E N T S
We have been appointed as “Réviseur d’Entreprises agréé” by the General Meeting of the Sharehold-
ers on 14 February 2018 and the duration of our uninterrupted engagement, including previous renew-
als and reappointments, is five years.
The consolidated management report is consistent with the consolidated financial statements and has
been prepared in accordance with applicable legal requirements.
The Corporate Governance Statement is included in the consolidated management report. The informa-
tion required by Article 68ter paragraph (1) letters c) and d) of the law of 19 December 2002(4) on the
commercial and companies register and on the accounting records and annual accounts of undertak-
ings, as amended, is consistent with the consolidated financial statements 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 Group in conducting the audit.
127
STABILUSCONSOLIDATED FINANCIAL STATEMENTSSTABILUSCONSOLIDATED FINANCIAL STATEMENTS C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
S T A B I L U S
OT H E R M AT T E R
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, December 12, 2018
KPMG Luxembourg Société coopérative
Cabinet de révision agréé
T. Feld
128
C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
S T A B I L U S
P A G E 1 2 9 – 1 4 6
ACCOUNTS
BALANCE SHEET
as of September 30, 2018
Balance sheet
I N € T H O U S A N D S
Assets
Fixed assets
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
Current assets
Debtors
Amounts owed by affiliated undertakings
becoming due and payable within one year
Other debtors
becoming due and payable within one year
Cash at bank and in hand
Prepayments
Total assets
T_079
N OT E
Sept 30, 2018
Sept 30, 2017
3
574,444
628,451
–
–
1
6
574,444
628,444
30,381
2,091
484
1,607
28,290
309
965
643
186
458
322
348
605,134
629,764
4
5
6
130
STABILUSANNUAL ACCOUNTSSTABILUSANNUAL ACCOUNTS Balance sheet
I N € T H O U S A N D S
Liabilities
Capital and reserves
Subscribed capital
Share premium account
Reserves
Legal reserve
Other reserves, including the fair value reserve
Profit or loss brought forward
Profit or loss for the financial year
Provisions
Provisions for taxation
Creditors
Trade creditors
becoming due and payable within one year
Amounts owed to affiliated undertakings
becoming due and payable within one year
Other creditors
Social security authorities
Other creditors
becoming due and payable within one year
Total liabilities
T_079
N OT E
Sept 30, 2018
Sept 30, 2017
7
601,842
619,935
247
247
419,801
419,801
1,514
4,835
173,778
1,667
10
10
3,282
21
4,836
165,171
29,860
810
810
9,018
908
695
8
1,224
7,499
11
1,139
11
813
605,134
629,764
131
STABILUSANNUAL ACCOUNTSSTABILUSANNUAL ACCOUNTS PROFIT AND LOSS ACCOUNT
for the fiscal year ended September 30, 2018
Profit and loss account
I N € T H O U S A N D S
Other operating income
Raw materials and consumables and other external expenses
Other external expenses
Staff costs
Wages and salaries
Social security on salaries and wages
Value adjustments
in respect of formation expenses and tangible and intangible fixed assets
Other operating expenses
Income from participating interests
derived from affiliated undertakings
Other interest receivable and similar income
derived from affiliated undertakings
Value adjustments and fair value adjustments on financial current assets
Interest payable and similar expenses
concerning affiliated undertakings
Other interest and similar financial expenses
Tax on profit or loss
Profit or loss after taxation
N OT E
9
10
11
3
12
13
T_080
Year ended Sept 30,
2018
4,227
(3,179)
(3,179)
(1,190)
(1,128)
(62)
(7)
(7)
(573)
2,532
2,532
0
0
–
(6)
–
(6)
(137)
1,667
2017
3,496
(2,145)
(2,145)
(722)
(644)
(78)
(22)
(22)
(477)
47,211
47,211
–
–
(17,236)
(66)
–
(66)
(179)
29,860
132
STABILUSANNUAL ACCOUNTSSTABILUSANNUAL ACCOUNTS NOTES TO THE ANNUAL ACCOUNTS
for the year ended September 30, 2018
1 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 of the Company is 2, rue Albert Borschette, L-1246 Luxembourg, Grand Duchy of
Luxembourg. The trade register number is B0151589. 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, 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
instruments of 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).
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.
133
STABILUSANNUAL ACCOUNTSSTABILUSANNUAL ACCOUNTS 2 Summary of significant valuation and accounting policies
B A S I S O F P R E S E N TAT I O N
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.
The annual accounts have been prepared on a going concern basis and in accordance with current
legal requirements and generally accepted accounting principles in the Grand Duchy of Luxembourg.
F O R E I G N C U R R E N C Y T R A N S L AT I O N
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 € are translated at the exchange rates prevailing at
the date of the balance sheet.
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.
I N TA N G I B L E A N D TA N G I B L E A S S E T S
Intangible and tangible assets are used for business purposes and are measured at cost less accumu-
lated 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.
134
STABILUSANNUAL ACCOUNTSSTABILUSANNUAL ACCOUNTS F I N A N C I A L A S S E T S
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.
These value adjustments may not be continued if the reasons for which the value adjustments were
recognized have ceased to exist.
D E B TO R S
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.
P R O V I S I O N S
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.
C R E D I TO R S
Debts are recorded at their reimbursement value. Where the amount repayable on account is exceeds the
amount received, the difference is shown as an asset and is written off over the period of the debt.
135
STABILUSANNUAL ACCOUNTSSTABILUSANNUAL ACCOUNTS 3 Movements in fixed assets
Fixed assets schedule
I N € T H O U S A N D S
Gross value
Balance as of Sept 30, 2017
Additions
Decrease
Balance as of Sept 30, 2018
Accumulated value adjustments
Balance as of Sept 30, 2017
Additions
Disposals
Balance as of Sept 30, 2018
Carrying amount
Balance as of Sept 30, 2017
Balance as of Sept 30, 2018
4 Financial assets
Shares in affiliated
undertakings
I N € T H O U S A N D S
Blitz F10 neun GmbH,
Wallersheimer Weg 100,
56070 Koblenz, Germany
Stable II S.à r. l.,
2, rue Albert Borschette,
1246 Luxembourg, Luxembourg
Total
Intangible
assets
Tangible assets
Shares in
affiliated
undertakings
T_081
Total
22
–
–
22
(21)
(1)
–
(22)
1
–
44
–
–
44
(38)
(6)
–
(44)
628,444
628,510
–
(54,000)
574,444
–
(54,000)
574,510
–
–
–
–
(59)
(7)
–
(66)
6
–
628,444
574,444
628,451
574,444
Proportion of
capital held
Year-end date
T_082
Shares in
affiliated
undertakings
as at Sept 30,
2018
Equity as at
year-end
(including result)
Profit or loss for
the year ended
100%
31.12.2017
28
2,550
(4)
100%
30.09.2017
574,416
574,444
510,710
(3,088)
The Company decreased its investment in Stable II S. à r. l. by distributing €28,000 thousand in May 2018
and €26,000 thousand in September 2018 out of the share premium account of Stable II S. à r. l.
The dormant subsidiary Servus III (Gibraltar) Limited was liquidated on December 19, 2017.
136
STABILUSANNUAL ACCOUNTSSTABILUSANNUAL ACCOUNTS 5 Debtors
5 . 1 A M O U N T S O W E D B Y A F F I L I AT E D U N D E R TA K I N G S
The amount of €484 thousand (PY: €186 thousand) is a receivable from affiliated undertakings for
providing management services.
5 . 2 OT H E R D E B TO R S
The amount mainly consists of a tax receivable amounting to €924 thousand (PY: €449 thousand) and
tax prepayments amounting to €668 thousand.
6 Prepayments
Prepayments mainly relate to insurance contracts.
7 Capital and reserves
Issued capital as of September 30, 2018, 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 €315 thousand represented by a maximum of 31.5 million shares,
each with nominal value of €0.01.
The Annual General Meeting on February 14, 2018, resolved to allocate 5% of the profit of €29,860 thou-
sand (i.e. an amount of €1,493 thousand) to the legal reserve, in accordance with Article 461-1 of the
Luxembourg act on commercial companies dated 10 August 1915, as amended.
Furthermore, the AGM approved the distribution of a dividend amounting to €0.80 per share resulting
in an aggregate dividend distribution amounting to €19,760 thousand out of the remaining profit and
to carry forward the resulting balance of profits in an aggregate amount of €8,607 thousand together
with the profit carried forward from the previous financial year in an amount of €173,778 thousand to
the next financial year.
8 Amounts owed to affiliated undertakings
The amount of €1,224 thousand (PY: €7,499 thousand) consists of cash pool liabilities owed to affili-
ated undertakings.
9 Other operating income
The other operating income mainly includes reimbursements for management services provided by
Stabilus S. A. to other Stabilus Group companies amounting to €4,156 thousand (PY: €3,488 thousand).
137
STABILUSANNUAL ACCOUNTSSTABILUSANNUAL ACCOUNTS T_083
2017
296
1,038
361
172
233
45
Year ended Sept 30,
2018
273
2,048
291
180
351
36
3,179
2,145
10 Other external expenses
Other external expenses
I N € T H O U S A N D S
Administration fees
Consulting fees
Audit fees
Group insurance
Legal and professional fees
Bank charges
Total
11 Staff costs
The Company employs 8 employees as of September 30, 2018, (PY: 6). The average number of employees
in the financial year 2018 was 8 (PY: 6).
12
Income from participating interests
In September 2018, Blitz F10-neun GmbH distributed a dividend to its sole shareholder Stabilus S. A.
with an amount of €2,532 thousand.
13
Value adjustments in respect of financial assets and of
investments held as current assets
There were no value adjustments in respect of financial assets and of investments held as current
assets in fiscal year 2018.
The value adjustments in fiscal year 2017 substantially comprise the result of the simplified dissolution
without liquidation of the former subsidiaries Servus Sub S. à r. l. and Servus Luxembourg S. à r. l. in
May 2017. The net assets of these two entities were transferred to Stabilus S. A., and the investments
were derecognized. The difference between the net assets received and the investment is recognized as
a value adjustment in respect of financial assets with an amount of €17,147 thousand.
14 Taxation
The Company is subject to Luxembourg company tax law.
138
STABILUSANNUAL ACCOUNTSSTABILUSANNUAL ACCOUNTS 15 Related parties
The remuneration of the members of the Management Board amounts to €563 thousand (PY: €353 thou-
sand). The remuneration of the members of the Supervisory Board amounts to €457 thousand (PY:
€359 thousand).
As of September 30, 2018, members of the Management and Supervisory Board held about 0.3%
of the total shares in Stabilus S. A.
16 Share-based payments
The variable compensation for the members of the Management Board includes a matching stock pro-
gram. 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. 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 match-
ing stock program. The amount of stock options received depends upon a factor to be set by the Super-
visory Board (Remuneration Committee) annually in a range between 1.0 time and 1.7 times for a cer-
tain 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 sub-
sequent 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 multi-
plied by the number of exercised options. The Company plans a cash settlement.
139
STABILUSANNUAL ACCOUNTSSTABILUSANNUAL ACCOUNTS 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 2018, the number of MSP A and MSP B
share options developed as follows:
Number of share options
MSP B (2014)
MSP A/B (2015)
MSP A/B (2016)
MSP A (2017)
No. of
options
Exercise
price
No. of
options
Exercise
price
No. of
options
Exercise
price
No. of
options
Exercise
price
T_084
Outstanding as at October 1, 2017
19,588
€24.82
34,995
€31.08
27,449
€48.64
–
–
Granted during the year
Forfeited during the year
Exercised during the year
–
–
–
–
–
–
–
4,884
–
–
–
–
–
7,320
–
–
–
–
24,190
€74.74
17,692
–
–
–
Outstanding as at September 30, 2018
19,588
€24.82
30,111
€31.08
20,129
€48.64
6,498
€74.74
Exercisable as at September 30, 2018
19,588
€24.82
–
–
–
–
–
–
17 Commitments, contingencies and pledges
In fiscal year 2016, the Company and other affiliated companies entered into a senior term loan facility
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.
The Company is guarantor of the senior term loan facility.
The Company has a rental contract for its office building. The rental payments for the financial year
2019 will be €176 thousand.
The Company issued a bank guarantee amounting to €100 thousand for the above mentioned office lease.
18 Subsequent events
There were no events or developments that could have materially affected the measurement and pres-
entation of the Company’s assets and liabilities as of September 30, 2018.
Luxembourg, December 12, 2018
Stabilus S.A.
Management Board
140
STABILUSANNUAL ACCOUNTSSTABILUSANNUAL ACCOUNTS RESPONSIBILITY STATEMENT
We, Dr. Stephan Kessel (Chief Executive Officer), Mark Wilhelms (Chief Financial Officer), Markus
Schädlich (Head of the Asia / Pacific and Rest of World), 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 management report 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 12, 2018
Dr. Stephan Kessel
Mark Wilhelms
Andreas Schröder
Andreas Sievers
Markus Schädlich
Management Board
141
STABILUSANNUAL ACCOUNTSSTABILUSANNUAL ACCOUNTS 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
R E P O R T O N T H E A U D I T O F T H E A N N U A L A C C O U N T S
Opinion
We have audited the annual accounts of Stabilus S.A. (the “Company”), which comprise the balance
sheet as at 30 September 2018, 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 2018, 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 pres-
entation 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 requirements that
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.
142
STABILUSANNUAL ACCOUNTSSTABILUSANNUAL ACCOUNTS Other information
The Management Board is responsible for the other information. The other information comprises the
information stated the annual report including the management report 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 presenta-
tion of the annual accounts, and for such internal control as the Management Board determines is neces-
sary to enable the preparation of annual accounts that are free from material misstatement, whether due
to fraud or error.In 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.
143
STABILUSANNUAL ACCOUNTSSTABILUSANNUAL ACCOUNTS 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 scepticism throughout the audit. We also:
•
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 proce-
dures 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 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’Entreprises
agréé”. However, 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 dis-
closures, and whether the annual accounts represent the underlying transactions and events in a
manner that achieves fair presentation.
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 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 pub-
lic disclosure about the matter.
144
STABILUSANNUAL ACCOUNTSSTABILUSANNUAL ACCOUNTS R E P O R T O N OT H E R L E G A L A N D R E G U L ATO RY R E Q U I R E M E N T S
We have been appointed as “Réviseur d’Entreprises agréé” by the General Meeting of the Shareholders
on 14 February 2018 and the duration of our uninterrupted engagement, including previous renewals
and reappointments, is five years.
The management report is consistent with the annual accounts 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 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.
145
STABILUSANNUAL ACCOUNTSSTABILUSANNUAL ACCOUNTS S T A B I L U S
A N N U A L A C C O U N T S
OT H E R M AT T E R
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 com-
panies register and on the accounting records and annual accounts of undertakings, as amended.
Luxembourg, December 12, 2018
KPMG Luxembourg Société coopérative
Cabinet de révision agréé
T. Feld
146
S T A B I L U S
A N N U A L A C C O U N T S
P A G E 1 4 7 – 1 5 1
INFORMATION
FINANCIAL CALENDAR
Financial calendar
D AT E 1 ) 2 )
December 14, 2018
February 4, 2019
February 13, 2019
May 6, 2019
August 5, 2019
November 15, 2019
December 13, 2019
T _ 085
P U B L I C AT I O N / E V E N T
Publication of full year results for fiscal year 2018 (Annual Report 2018)
Publication of the first-quarter results for fiscal 2019 (Quarterly Statement Q1 FY19)
Annual General Meeting
Publication of the second-quarter results for fiscal 2019 (Interim Report Q2 FY19)
Publication of the third-quarter results for fiscal 2019 (Quarterly Statement Q3 FY19)
Publication of preliminary financial results for FY2019
Publication of full year results for fiscal 2019 (Annual Report 2019)
1) We cannot rule out changes of dates. We recommend checking them on our website in the Investor Relations/ Financial Calendar section (www.ir.stabilus.com).
2) 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
2019 comprises a year ended September 30, 2019.
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 state-
ments 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 guar-
antee that these forward-looking statements will prove to be right. The future develop-
ment 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 manage-
ment 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 obli-
gation 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 there-
fore 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).
148
STABILUSADDITIONAL INFORMATIONSTABILUSADDITIONAL INFORMATION TABLE DIRECTORY
D E S C R I P T I O N
Latest growth projections for selected economies
Production of light vehicles
Income statement
Revenue by region
Revenue by market
Reconciliation of EBIT to adjusted EBIT
Operating segments
Balance sheet
Cash flows
Free cash flow
Net leverage ratio
Financial debt
Adjusted EBITDA
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Subsidiaries
Exchange rates
New standards, interpretations and amendments in the financial year
New standards, interpretations and amendments issued and endorsed by the EU (not yet adopted)
New standards, interpretations and amendments issued but not yet endorsed by the EU
Revenue by region
Revenue by market
Expenses by function
Personnel expenses
Number of employees
Other income
Other expenses
Finance income
Finance costs
Income tax expense
Tax expense reconciliation (expected to actual)
Deferred tax assets and liabilities
Tax loss and interest carry-forwards
Weighted average number of shares
Earnings per share
Property, plant and equipment
Depreciation expense for property, plant and equipment
Goodwill sensitivity analysis
Intangible assets
Amortization expense for intangible assets
Other financial assets
Other assets
Inventories
Trade accounts receivable
Allowance for doubtful accounts
149
N U M B E R
PA G E
001
002
003
004
005
006
007
008
009
010
011
012
013
014
015
016
017
018
019
020
021
022
023
024
025
026
027
028
029
030
031
032
033
034
035
036
037
038
039
040
041
042
043
044
045
046
047
28
28
29
30
30
32
33
34
36
37
37
38
38
51
52
54
55
59
61
62
62
66
75
75
76
76
77
77
78
78
79
80
80
81
82
83
83
84
85
86
87
88
88
89
89
90
90
STABILUSADDITIONAL INFORMATIONSTABILUSADDITIONAL INFORMATION D E S C R I P T I O N
Other comprehensive income / (expense)
Financial liabilities
Other financial liabilities
Provisions
Changes of non-current provisions
Changes of current provisions
Pension plans and similar obligations
Unfunded status
Present value of defined benefit obligations
Pension cost for defined benefit plans
Present value of the defined benefit obligation and the experience adjustments on the plan liabilities
Significant factors for the calculation of pension obligations
Other liabilities
Operating lease
Finance lease
Financial commitments
Financial instruments
Financial instruments
Credit risks included in financial assets
Liquidity outflows for liabilities
Equity ratio
Reconciliation financing activities
Segment reporting
Reconciliation of the total segments’ profit to profit / (loss) before income tax
Geographical information: Revenue by country
Geographical information: Non-current assets by country
Input parameter for fair value measurement of MSP
Number of share options
Input parameters for fair value measurement of PSP
Phantom Stock Program options
Auditor’s fees
Balance sheet
Profit and loss account
Fixed assets schedule
Shares in affiliated undertakings
Other external charges
Number of share options
Financial calendar
N U M B E R
PA G E
048
049
050
051
052
053
054
055
056
057
058
059
060
061
062
063
064
065
066
067
068
069
070
071
072
073
074
075
076
077
078
079
080
081
082
083
084
085
92
92
93
94
94
95
96
97
97
97
98
98
100
100
101
103
103
104
106
107
108
109
110
111
111
112
115
116
117
117
118
130
132
136
136
138
140
148
150
STABILUSADDITIONAL INFORMATIONSTABILUSADDITIONAL INFORMATION INFORMATION RESOURCES
Further information including news, reports and publications can be found in the investor relations
section of our website at www.ir.stabilus.com.
Investor Relations
Phone: +352 286 770 21
+352 286 770 99
Fax:
investors@stabilus.com
Email:
151
STABILUSSEIZING OPPORTUNITIES WORLDWIDE 2 , R U E A L B E R T B O R S C H E T T E ,
L 1 2 4 6 L U X E M B O U R G
G R A N D D U C H Y O F L U X E M B O U R G
W W W . S T A B I L U S . C O M