EQS-News: Puchheim, November 9, 2023 STEMMER IMAGING continues to deliver strong results and remains on track in its strategic transformation as outlined in its new medium-term guidance

Puchheim, November 9, 2023

STEMMER IMAGING continues to deliver strong results and remains on track in its strategic transformation as outlined in its new medium-term guidance

• Ongoing weakness in order intake temporarily dampens the revenue growth path – revenue remains at previous year's level at EUR 113.0 million.
• EBITDA margin remains strong at 17.6%, despite one-time expenses of EUR 1.2 million (9M 2023 normalized: 18.7%; 9M 2022: 16.6%) – Earnings per share are stable at EUR 1.77 (9M 2023 normalized: EUR 2.09; 9M 2022: EUR 1.76).
• Operational cash flow nearly doubles to EUR 15.8 million (9M 2022: EUR 8.6 million).
• STEMMER IMAGING updates its mid-term guidance while maintaining an ambitious goal of achieving double-digit growth per year in the medium term: revenue level of EUR 240 million and EBITDA margin between 17% and 21% targeted for the year 2026. Aim: dividend payout above 70%.

Puchheim, November 9, 2023 – Today, STEMMER IMAGING AG (ISIN DE000A2G9MZ9 / GSIN A2G9MZ) publishes the results for the first nine months and the third quarter of the current fiscal year along with an updated medium-term guidance.

A restrained third quarter in terms of order intake and revenue temporarily slows down the company's growth in the current fiscal year. The company is using this period to refine its strategic positioning.

The purchasing restraint, which was already expected in the half-year report for the third quarter due to high customer inventory levels and the ongoing uncertain economic conditions, has had a more pronounced impact in the third quarter than anticipated, both in terms of order intake and revenue. The order intake for STEMMER IMAGING AG in the nine-month period amounted to EUR 105.2 million, falling behind previous expectations in line with the generally deteriorating economic forecasts.

In the first nine months of 2023, STEMMER IMAGING achieved revenue of EUR 113.0 million, maintaining the revenue at a constant level compared to the previous year (9M 2022: EUR 113.0 million). The revenue for the third quarter was EUR 34.6 million (Q3 2022: EUR 40.6 million). While most regions, especially the Netherlands and Switzerland, reported revenue declines, the Spanish subsidiary INFAIMON and the UK subsidiary achieved significantly higher revenues compared to the previous year. In terms of end markets, the Print & Packaging and Metrology markets saw the most substantial revenue growth in the industrial Machine Vision sector, while the Factory Automation market experienced declining revenues. In the non-industrial sector of Artificial Vision, the Transport & Logistics segment, among others, recorded revenue increases, whereas the Food & Agriculture segment saw declines.

The gross profit margin maintained the strong level observed in the half-year figures, reaching 39.2% in comparison to the previous year (9M 2022: 37.7%), demonstrating a remarkable improvement. In the third quarter, the gross margin, influenced mainly by mix effects, stood at 38.4%, compared to 37.3% in the same quarter of the previous year.

Thanks to the positive development of the gross profit margin throughout the fiscal year and proactive, timely cost management, the operating profit (EBITDA) increased from EUR 18.7 million in the previous year to EUR 19.9 million in the first nine months, despite stagnant revenues. The previously announced one-time expenses of EUR 1.2 million, mainly resulting from the further integration of the INFAIMON subsidiary, have been fully accounted for in the nine-month period.

The normalized EBITDA amounted to EUR 21.1 million in the first nine months of 2023. The EBITDA margin increased to 17.6% (9M 2023 normalized: 18.7%; 9M 2022: 16.6%), being well within the target range of 15% to 19%. In the third quarter, STEMMER IMAGING, burdened by the aforementioned one-time expenses, achieved an EBITDA of EUR 5.7 million (Q3 2023 normalized: EUR 6.9 million; Q3 2022: EUR 7.4 million). Consequently, the EBITDA margin temporarily dropped to 16.4% in the third quarter (Q3 2022: 18.3%). Adjusted for the one-time expenses, the EBITDA margin in the third quarter reached 19.9%, exceeding the target range.

As part of the announced integration activities of the Spanish and Latin American subsidiary INFAIMON, the Executive Board has decided that INFAIMON will operate under the name STEMMER IMAGING in the future. This unified corporate identity further strengthens the core brand of the STEMMER IMAGING Group. The rebranding represents the next important step in the integration of INFAIMON into the STEMMER IMAGING Group as part of a global vision for the future. In the third quarter 2023, the write-off of the INFAIMON brand name was therefore carried out, resulting in an additional impact on EBIT of EUR 0.9 million. This will lead to future cost savings of EUR 1.7 - 2.0 million annually through the utilization of synergies via centralization of functions and standardization of processes and systems. Despite the effect of this extraordinary depreciation and the previously mentioned one-time expenses, the EBIT for the first nine months of 2023 amounted to EUR 16.0 million, representing a slight increase compared to the previous year (9M 2022: EUR 15.8 million).

The group's net income for the first nine months of the current fiscal year was EUR 11.5 million (9M 2023 normalized: EUR 13.6 million), slightly higher than the previous year's figure of EUR 11.4 million. This results in stable earnings per share of EUR 1.77 (9M 2022: EUR 1.76). Adjusted for the mentioned one-time expenses, the earnings per share increased to EUR 2.09.

The operating cash flow for the first nine months of the current fiscal year was EUR 15.8 million, nearly doubling compared to the same period in the previous year (9M 2022: EUR 8.6 million). In the third quarter, the operating cash flow was EUR 7.6 million (Q3 2022: EUR 4.5 million). The strong development of the operating cash flow is primarily attributed to the reduction of working capital while maintaining a good operational performance, despite the restrained earnings situation.

As previously announced in the ad-hoc notification on October 17, 2023, the Executive Board of STEMMER IMAGING now expects a reduced revenue for the current fiscal year in the range of EUR 144 million to EUR 151 million. This corresponds to a decrease in revenue of 3% to 7% compared to the previous year. The previous forecast for the current fiscal year anticipated revenue at the lower end of the forecast range between EUR 163 million and EUR 176 million. Based on this, the Executive Board still expects a planned development of results, which is likely to lead to an EBITDA in the lower range of the existing forecast range of EUR 26 million to EUR 32 million for the full year 2023. This means that the EBITDA will be at a similar level to the previous year (EUR 28.2 million) or decrease by a maximum of 8% . Consequently, the EBITDA margin is expected to remain at the previous year's level (18.1%), placing it in the upper range of the forecasted range of 15% to 19%, despite the expected decline in revenue.

Based on the temporarily restrained order intake and revenue situation, the Executive Board is updating its medium-term guidance from 2021, with a revenue target of EUR 200 million for the year 2024. STEMMER IMAGING is convinced that the market drivers remain intact beyond the current market-related period of weakness, and thus, the machine vision industry continues to be a growth sector. As the systemhouse in the field of machine vision and with its technology offering, STEMMER IMAGING enables the dynamically evolving market to unlock the potential of Artificial Intelligence (AI) and gives AI the ability to see. From the Executive Board's perspective, this refined strategic positioning and focus on implementing strategic measures enable STEMMER IMAGING, to achieve double-digit growth rates in revenue over a multi-year period and further improvements in profitability. Accordingly, STEMMER IMAGING sets the ambitious goal of reaching a revenue level of EUR 240 million in the year 2026. Furthermore, the Executive Board is increasing its medium-term EBITDA margin goals for the year 2026, targeting a profitability range between 17% and 21% (previously: 15% – 19%). As part of the dividend policy, the aim in the future is to realize a payout ratio of at least 70% of the annual result.

"Our robust operational performance enables us to continue delivering strong results and even to further increase our EBITDA margin during periods when customers are temporarily hesitant in placing orders. In this phase, we are concentrating to align ourselves to the new mid-term guidance, both organically and with regard to potential acquisitions. The further refinement of our positioning as the machine vision systemhouse supports us in this," comments CEO Arne Dehn.

The nine-month report of STEMMER IMAGING AG as of September 30, 2023, is available for download on www.stemmer-imaging.com in the Investor section.

Today (November 9, 2023), at 15:00 CET, there will be a webcast for analysts, institutional investors, and press representatives to discuss the financial results for the third quarter and the first nine months of the current fiscal year as well as the outlook for the future.

About STEMMER IMAGING

STEMMER IMAGING is the leading international partner for machine vision technology.

For industrial and non-industrial applications, our product range combines an extensive commercial range of products combined with a high level of expertise and value-added services.
In addition, we develop subsystems to solve specific tasks.

For over 35 years, we have been helping our customers to take a leading role in their markets – across Europe and Latin America.

Contact:

STEMMER IMAGING AG
Michael Bülter
Chief Financial Officer
Gutenbergstr. 9-13
82178 Puchheim
Germany
Phone +49 89 80902-196
ir@stemmer-imaging.com
www.stemmer-imaging.com