Gestamp Automoción S A : Q1 2024 Interim Results

Management Discussion and Analysis of the Financial Condition and Results of Operations for the three months period ended March 31st, 2024

Gestamp Automoción, S.A.

May 9th, 2024

Q1 2024 Management Report

Index

1. LEGAL NOTICE IN RELATION TO THE PRESENTATION OF FINANCIAL AND OTHER

INFORMATION	3
1.1.	Financial information and operational data	3
1.2.	Industry data	3
1.3.	Forward looking statements and other qualifications	4
2.	BUSINESS PERFORMANCE UPDATE	5
3.	FINANCIAL PERFORMANCE FOR THE PERIOD	7
3.1.	Revenues	7
3.2.	Operating expenses	7
3.3.	EBITDA	8
3.4.	Operating result	8
3.5.	Financial result	8
3.6.	Exchange differences	8
3.7.	Income tax expense	8
3.8.	Result attributable to non-controlling interests	8
4.	FINANCIAL INFORMATION BY GEOGRAPHIC SEGMENT	9
4.1.	Revenues & EBITDA	9
5.	INFORMATION ON CASH FLOW STATEMENT	11
5.1.	Cash flow from operating activities	13
5.2.	Working capital	13
5.3.	Cash flow used in investing activities	13
5.4.	Cash flow from financing activities	13
6.	INVESTMENTS IN FIXED ASSETS	14
7.	INFORMATION ON CONSOLIDATED BALANCE SHEET	15
7.1. Liquidity	16
8.	OTHER RELEVANT FINANCIAL DATA	17

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Q1 2024 Management Report

1. LEGAL NOTICE IN RELATION TO THE PRESENTATION OF FINANCIAL AND OTHER INFORMATION

1.1. Financial information and operational data

Unless otherwise indicated, all financial information in this report has been prepared in accordance with IFRS applicable at the relevant date and is presented in Euros. IFRS differs in certain significant respects from generally accepted accounting principles in the US.

In this sense, certain information presented in this report has not been prepared in accordance with IFRS or any other accounting standards and also contains alternative performance measures ("APM") as defined in the Guidelines on Alternative Performance Measures published by the European Securities and Markets Authority (ESMA) on October 5, 20151. As used in this report, this information includes "EBITDA", which represents operating profit before amortization, impairment and depreciation. This report also contains other measures such as: cash, cash equivalent and current financial assets, total financial debt and net financial debt, growth at constant exchange rates, and capex split by categories. We present these non- IFRS measures because we believe those indicators and similar measures are widely used by certain investors, securities analysts and other interested parties as supplemental measures of performance and liquidity.

In particular, we believe that EBITDA is meaningful for investors because it provides an analysis of our operating results, profitability and ability to service debt and because EBITDA is used by our chief operating decision makers to track our business evolution, establish operational and strategic targets and make important business decisions. To facilitate the analysis of our operations, this indicator excludes amortization, impairment and depreciation expenses from operating profit in order to eliminate the impact of general long-term capital investment. Although we are presenting this measure to enhance the understanding of our historical operating performance, EBITDA should not be considered an alternative to operating profit as an indicator of our operating performance, or an alternative to cash flows from operating activities as a measure of our liquidity. Growth at constant exchange rates is a numerical translation of our figures from local currencies to euros, and not a description of the situation if the currencies had not moved, as this could have had some other implications on the economy and our business situation and contracts. Capex split in categories is a management judgement and should not be considered as a substitute for additions of tangible and intangible assets, nor depreciation and amortization. The presentation of these measures is not intended to and does not comply with the reporting requirements of the SEC; compliance with its requirements would require us to make changes to the presentation of this information.

Rounding adjustments have been made in calculating some of the financial information included in this report. Figures shown as totals in some tables and elsewhere may not be exact arithmetic aggregations of the figures that precede them.

1 In this regard, a breakdown of the explanations, definitions and reconciliations of the APMs used in this report can be found, as applicable, in Note 4.6. of the Notes to the Consolidated Financial Statements of the Gestamp Group as of December 31, 2023, in the relevant results presentation and also in this report, all of them available both on Gestamp's corporate website (https://gestamp.com/Investors-Shareholders/Economic-Financial-information) and on the website of the National Securities Market Commission (Comisión Nacional del Mercado de Valores) (www.cnmv.es).

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Q1 2024 Management Report

1.2. Industry data

In this report, we may rely on and refer to information regarding our business and the market in which we operate and compete in. We have obtained this information from various third party sources, including providers of industry data, discussions with our customers and our own internal estimates. We cannot assure that any of this information is accurate or correctly reflects our position in the industry, and none of our internal surveys or information has been verified by any independent sources. We do not make any representation or warranty as to the accuracy or completeness of any such information set forth in this report.

1.3. Forward looking statements and other qualifications

The following discussion and analysis is based on and should be read in conjunction with our historical financials included elsewhere in this quarterly report. Certain capitalized terms used herein have the meaning set out in the offering memorandum for our senior secured notes due 2026.

The discussion includes forward looking statements, which, although based on assumptions that we consider reasonable, are subject to risks and uncertainties, which could cause actual events or conditions to differ materially from those implied herein. Please be cautioned not to place undue reliance on these forward looking statements. These forward statements are made as of the date of this report and are not intended to give any assurance as to future results.

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Q1 2024 Management Report

2. BUSINESS PERFORMANCE UPDATE

The International Monetary Fund (IMF World Economic Outlook as of April 2024) has slightly revised upwards its global GDP growth forecasts to +3.2% year-on-year(YoY) for 2024 (+0.1 percentage points higher than the January 2024 WEO projections at +3.1% YoY). The pace of the economy expansion is still below historical standards as there is still uncertainty arising from: i) geopolitical tensions from the war in Ukraine and the conflict in Gaza, with its inherent risk of a rise in global oil prices; ii) the divergence in disinflation speed across major economies, and iii) a higher geoeconomic fragmentation that could imply higher barriers to goods, capital and people flows. As for 2025, the IMF expects global GDP to continue the same pace and grow by +3.2% YoY, unchanged versus the January forecast.

Within the auto sector, S&P Global Mobility (former IHS) forecasts production volumes for the year to remain flat YoY at 90.3 million vehicles (IHS geographies as of April 2024), which is slightly above (+0.4%) the 90.0 million vehicles for 2024 that were estimated in February. The slight increase in projections for the full year confirms that 2024 is expected to be a transition year in terms of global light vehicle production following an extraordinary growth in 2023 and within a context of a progressive recovery of 2017 peak levels at 95.1 million vehicles. Market production volumes are now expected to surpass peak levels only by 2027 with 95.1 million vehicles expected to be produced.

During the first quarter of 2024 the auto sector has seen a slight decrease in production volumes in Gestamp's footprint of -0.4% YoY (according to IHS as of April 2024). During the period, we have seen volumes decreasing in Mercosur (-6.0% YoY), Western Europe (-4.7% YoY) and Asia (-0.5% YoY). On the other hand, Eastern Europe has been the strongest performing region in the period with a rise in volumes of +4.8% YoY and NAFTA has seen a +1.9% YoY volumes increase.

In this context, Gestamp has seen revenues in the first quarter decreasing by -3.0% YoY to €3,049.3 million, which includes a €153.9 million contribution from Gescrap. Organic revenues (excluding Gescrap) have decreased by -2.9% YoY mainly due to a tough comparable figure in the quarter as Q1 2023 was a record. On a constant currency basis, this growth implies an outperformance to the market of 3.9 percentage points (in Gestamp's footprint - IHS data as of April 2024), or 3.5 percentage points on a weighted basis.

With regards to profitability, EBITDA in absolute terms decreased by -7.6% YoY in the first quarter of 2024, reaching €311.0 million. In terms of EBITDA margin, the Auto business has achieved a 10.3% (or 10.5% if we exclude the €4.4 million costs related to Phoenix Plan), which is below our target for the full year due to: i) the typical business seasonality, ii) tough comparable figures, and iii) persistent inflationary pressures. Nevertheless, this is in line with our expectations for the year and Gestamp remains committed to reach a flat or slightly improve EBITDA margin YoY in the full year. As for Gescrap, EBITDA margin in the first quarter of 2024 has reached an 8.3%.

Looking at the short term and considering the persistent macroeconomic and sector uncertainties, Gestamp continues working towards achieving the financial targets set for 2024, that exclude extraordinary Phoenix costs and are based on: i) revenues for the auto business outperforming market production volumes growth in the low-single digit range with a flat reported EBITDA margin when compared to 2023; ii) for Gescrap, the Group expects similar revenues and EBITDA in 2024 versus 2023; iii) positive Free Cash Flow (FCF defined as Net Debt

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Q1 2024 Management Report

reduction excluding acquisitions and dividends) in the range of the €200 million and iv) a net debt to EBITDA ratio of 1.0-1.5x. Gestamp is strongly committed on delivering on this guidance.

Going forward, Gestamp's main focus is to deliver on its long term targets for 2027 presented on the Capital Markets Day in June 2023, which are based on seven key pillars, which are: i) growth ambition; ii) being a trusted partner to its clients; iii) using its technology and innovation capabilities to be differential; iv) keep improving the operational excellence, in order to v) grow in a profitable way; vi) maintain a disciplined balance sheet profile; and vii) lead the circular economy in the automotive sector.

26.4%

4.8%

1.9%

						-4.7%	-9.4%
-3.2%						3.5%
											17.5%
21.1%		-0.5%
											-0.4%
	-6.0%

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Q1 2024 Management Report

3. FINANCIAL PERFORMANCE FOR THE PERIOD

				First Quarter
		2023		2024		% Change
Consolidated Income Statement Data		(Millions of Euros)
Operating income		3,199.8		3,118.5		-2.5%
Revenue	3,144.0	3,049.3	-3.0%
Other operating income	30.3	31.9	5.6%
Changes in inventories	25.5	37.3	46.1%
Operating expenses		-2,863.3		-2,807.5		-1.9%
Raw materials and other consumables	-2,055.0	-1,958.4	-4.7%
Personnel expenses	-464.6	-492.2	5.9%
Other operating expenses	-343.7	-356.9	3.8%
EBITDA		336.5		311.0		-7.6%
Depreciation, amortization and impairment losses	-163.2	-176.2	8.0%
Operating profit		173.3		134.8		-22.2%
Finance income	6.1	4.8	-21.7%
Finance expenses	-48.1	-51.1	6.4%
Exchange gains (losses)	-14.7	-4.5	-69.1%
Other	10.6	-1.6	-114.8%
Profit from continuing operations		127.3		82.4		-35.3%
Income tax expense	-31.5	-18.4	-41.4%
Profit for the period		95.8		63.9		-33.3%
Profit (loss) attributable to non-controlling interests	-15.9	-9.2	-42.2%
Profit attributable to equity holders of the parent		79.8		54.7		-31.5%

3.1. Revenues

During the first quarter of 2024, revenues reached €3,049.3 million, of which Body-in-White and Chassis represented €2,570.9 million, Mechanisms €295.2 million, Gescrap €153.9 million and Tooling and others €29.3 million.

Revenues in the first quarter of 2024 decreased by €94.7 million or -3.0% to €3,049.3 million versus €3,144.0 million in the first quarter of 2023.

3.2. Operating expenses

Raw materials and other consumables. Expenses related to raw materials and other consumables decreased by €96.6 million, or -4.7%, to €1,958.4 million in the first quarter of 2024, compared to €2,055.0 million for the same period of 2023. This increase is in line with the increase in revenues taking into account the specific weight of raw materials in total revenues.

Personnel expenses. Personnel expenses increased by €27.6 million, or +5.9% for the first quarter of 2024 to €492.2 million from €464.6million for the same period in 2023.

Other operating expenses. Other operating expenses increased by €13.2 million, or +3.8%, to €356.9 million in the first quarter of 2024 from €343.7 million for the same period of 2023.

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Q1 2024 Management Report

3.3. EBITDA

EBITDA for the first quarter of 2024 reached €311.0 million, representing a decrease of €25.5 million from €336.5 million for the same period in 2023. The decrease was mainly due to the typical business seasonality, tough comparable figures, and persistent inflationary pressures.

Depreciation, amortization and impairment losses. Depreciation expense increased by €13.0 million, or +8.0%, to €176.2 million in the first quarter of 2024 versus €163.2 million in the same period in 2023 for the provision corresponding to the assets that came into operation during the second half of fiscal year 2023.

3.4. Operating result

The operating result reached €134.8 million in the first quarter of 2024 versus €173.3 million for the same period in 2023, a decrease of €38.5 million. This decrease was mainly due to lower EBITDA and higher depreciation and amortization.

3.5. Financial result

Net financial expenses for the first quarter of 2024 increased by €4.4 million, or +10.5%, to €46.3 million versus €41.9 million for the same period in 2023. This increase is mainly due to the increase in the Euribor and Libor reference interest rates.

3.6. Exchange differences

Exchange losses amounted to €4.5 million in the first quarter of 2024 versus losses of €14.7 million in the first quarter of 2023. Exchange losses in the period were mainly recorded in Turkey.

3.7. Income tax expense

The tax expense was €18.4 million in the first quarter of 2024, which implies an increase of €13.1 million compared with the €31.5 million expenses for the same period in 2023. Effective tax rate for the period was 22.4%.

3.8. Result attributable to non-controlling interests

Result attributable to non-controlling interests for the first quarter of 2024 implied a negative impact of €9.2 million. The gains attributable to non-controlling interests in the first quarter of 2024 is consistent with the result of gains in those operations in which the group has non- controlling interests.

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Q1 2024 Management Report

4. FINANCIAL INFORMATION BY GEOGRAPHIC SEGMENT

4.1. Revenues & EBITDA

				First Quarter
		2023		2024		% Change
Revenues	(Millions of Euros)
Western Europe	1,252.0	1,138.9	-9.0%
Eastern Europe	450.2	468.3	4.0%
NAFTA	617.3	605.9	-1.9%
Mercosur	220.9	194.4	-12.0%
Asia	440.3	487.9	10.8%
Gescrap	163.3	153.9	-5.8%
Total		3,144.0		3,049.3		-3.0%
				First Quarter
		2023		2024		% Change
EBITDA	(Millions of Euros)
Western Europe	136.7	118.6	-13.2%
Eastern Europe	60.4	61.1	1.2%
NAFTA	46.6	23.1	-50.5%
Mercosur	23.7	22.2	-6.3%
Asia	55.9	73.2	30.9%
Gescrap	13.2	12.8	-3.0%
Total		336.5		311.0		-7.6%

Western Europe

In the first quarter, revenues in Western Europe reached €1,138.9 million, a decrease of €113.1 million, or -9.0%(-9.4% at constant FX) versus Q1 2023. The decrease is partly explained by light vehicle production volumes decreasing in the region by -4.7% (S&P Global Mobility data as of April 2024 for Gestamp's footprint) together with the decrease in raw materials price.

EBITDA in the quarter fell to €118.6 million, implying a decrease of €18.1 million, or -13.2% versus Q1 2023. This leads into an EBITDA margin of 10.4% in the first three months of the year, below the 10.9% reported in Q1 2023.

Eastern Europe

Revenues in Q1 2024 in the region increased by €18.1 million, or +4.0% (+26.4% at constant FX), versus the first quarter of 2024, reaching €468.3 million. The region experienced FX headwinds, mainly in Turkey, which negatively impacted the results.

In the quarter, EBITDA reached €61.1 million, resulting in a +1.2% growth when compared to the first quarter of 2023. EBITDA margin has reached 13.1% in the quarter.

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Q1 2024 Management Report

NAFTA

Revenues in Q1 2024 decreased by €11.4 million, or -1.9%(-3.2% at constant FX) versus Q1 2023, reaching €605.9 million.

During the first quarter of the year, EBITDA in the region fell to €23.1 million, a decrease of €23.5 million or -50.5% when compared to Q1 2023. EBITDA margin in the quarter deteriorated to a 3.8%.

Mercosur

During the first quarter, revenues in the region decreased by €26.5 million, or -12.0% (+21.1% at constant FX) versus Q1 2023, reaching €194.4 million. FX headwinds in Argentina have negatively impacted our results.

EBITDA in Q1 2024 reached €22.2 million, a decrease of €1.5 million or -6.3% versus the first quarter of 2023. EBITDA margin in the quarter improved to 11.4% versus the 10.7% seen in the first quarter of 2023.

Asia

During Q1 2024, revenues reached €487.9 million, implying an increase of €47.6 million, or +10.8% (+17.5% at constant FX) versus the first quarter of 2023. The increase in revenues is mainly driven by the good performance in China.

EBITDA in Asia reached €73.2 million in the first quarter of 2024, resulting in a +30.9% or €17.3 million increase when compared to the same period of 2023. EBITDA margin in the region reached 15.0% in Q1 2024, well above the 12.7% in Q1 2023.

Gescrap

Gescrap revenues in Q1 2024 amounted to € 153.9 million, which is -5.8% or -€9.5mn below the € 163.3m reported in the first quarter of 2023.

EBITDA in the period decreased by -3.0% to €12.8mn, which implies an EBITDA margin of 8.3%.

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