Sogefi (SGF) Status Update summary

Business unit performance and market dynamics

• Suspension business derives about 70% of turnover from stabilizer bars, with major new projects tied to German OEMs and platform changes expected to impact volumes from 2027-2028.

• High cost pressure is present due to European OEMs' concerns over Chinese competition, leading to aggressive cost reduction efforts.

• Exposure to Chinese customers is split 54% air and cooling, 44% suspension, with focus on emerging OEMs like Xiaomi and XPeng rather than established players like BYD or Geely.

• Stellantis exposure is roughly 50/50 between suspension and air and cooling, with compensation for project cancellations managed through new project awards or cash settlements.

• Air and cooling business is ramping up new battery vehicle programs, but current exposure to battery electric vehicles remains low.

Operational efficiency and capacity utilization

• Suspension plant saturation is around 60-63%, with ongoing footprint optimization including production shifts from France to Romania, Italy, Spain, and other French plants.

• Romanian suspension plant turnaround is complete, with capacity for an additional 30% volume.

• Air and cooling plants are at or near full capacity in China, North America, and Romania, with only the French plant operating at 60-65% saturation.

• Expansion plans include a new facility in China and increased capacity in Mexico and India to support new programs and market growth.

Financial management and profitability outlook

• Most raw material and energy cost fluctuations are contractually passed through to customers, with some delay due to index-based adjustments.

• Suspension aims for a 2% adjusted EBITDA growth by 2029, driven by industrial optimization and automation.

• CapEx allocation is about 60% to air and cooling, mainly for capacity expansion and new product investments in North America.

• Working capital requirements are higher in suspension due to raw material needs.

• Margins in air and cooling are impacted by turnover mix and directed buy arrangements, with improvements expected post-2026.