Gestamp Automocion : Significant Fact – Report on Q3 2017 results

Gestamp Automoción, S.A. October 24, 2017

1. PRESENTATION OF FINANCIAL AND OTHER INFORMATION

   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.

   We have presented certain information in this report that has not been prepared in accordance with IFRS or any other accounting standards. 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. We present these non-IFRS measures because we believe that they 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. 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.

   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. 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 you 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.

   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 2023.

   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. You are 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.

2. BUSINESS PERFORMANCE AND RESULT

Global economic growth during the first nine months of 2017 has been stronger than expected, with the third quarter confirming the recovery path seen during the first half. Signs of recovery seen in USA during the second quarter have been confirmed during the third quarter, adding to the solid performance of the Eurozone and Japan. Recent political developments in Europe, such as the results of the German elections, Catalonia and the ongoing negotiations on Brexit, have had a limited impact on growth during the third quarter.

In this context, the evolution of the automotive sector has been positive. Global light vehicle production, according to IHS data as of September 2017, grew by 2.6% during the first nine months of 2017 (versus the first nine months of 2016). The growth in Gestamp's footprint stood at 2.0%, driven by strong market production in particular in Mercosur (+21.6%) and Eastern Europe (+7.3%) and overall stable performance in mature markets.

Global OEM's have continued to focus on "CASE" (Connectivity, Autonomous driving, Shared mobility and Electrification), which supports the outsourcing of the "Hardware" of a vehicle to global suppliers, such as Gestamp. During the IAA Autoshow in Frankfurt, the new trends around electrified car, autonomous driving, diesel debate, European production and spin-offs were the key topics and areas of debate. During the event, several OEM's announced new electrified car models, including: (i) BMW's launch of 25 models by 2025 with an electrified drive system of which 12 are expected to be pure-electric, (ii) VW's strategy for electrification called 'Roadmap E', with 80 new electric vehicles by 2025. These model launches announced by OEM's are expected to lead to an increase in the levels of outsourcing to global suppliers, such as Gestamp. In general, macroeconomic and auto sector conditions have been positive, driving growth globally. Mature and developing markets have been influenced each by their respective trends and dynamics. The aforementioned macro and auto trends provide a solid foundation and continue to reinforce Gestamp's vision, strategy and objectives.

Despite the above, the results of the third quarter of 2017 have been negatively affected by the issues announced in September with project launches mainly affecting two new plants in North America, as well as the impact of foreign exchange rates. In spite of these circumstances, EBITDA during the third quarter reached 175 million euros, in the line with the third quarter of 2016 (representing growth at constant exchange rates of 0.8%). Revenues grew by 12.1% during the first nine months of 2017 reaching €6,004.9 million and EBITDA by 7.3% reaching €627.4 million (13.6% and 9.2% at constant FX respectively). The profitability has been impacted by higher costs in North America and higher sales of tooling, particularly during the third quarter. Net Income grew by 18.3% when compared to the first nine months of 2016, reaching €152.6 million.

Gestamp Revenue Growth vs. Market Production Growth in Gestamp's Footprint (9M 2017 vs 9M 2016)

NAFTA

Western Europe

Eastern Europe

31 .6%

7 .3%

0 .2%

11 .3%

Market Gestamp

-2 .6%

-1 .4%

Asia

Mercosur

2 .9%

7 .7%

21 .6%

39 .9%

Total in Our Footprint

12 .1%

Market Gestamp

Market Gestamp

2 .0%

Market Gestamp

Note: Market production volume growth is basedon countries in Gestamp's production footprint (IHS September 2017)

During the first nine months of 2017 Gestamp has outperformed market production volume growth (in its production footprint - IHS data as of September 2017) by more than 6 times.

Growth during the first nine months of 2017 has been driven by positive trends both at the macro level as well as in the auto sector, together with good volumes of existing programs and the ramp-up of new projects, especially in Mercosur and Europe.

During the first nine months of 2017, 5 new plants have been added to our footprint with the opening of three new greenfields (India, Brazil and USA) and the acquisition of two plants (Romania and SMA). Gestamp has continued to focus on its Asia strategy with the start of construction of its first plant in Japan. In addition, during this period Gestamp has strengthened its R&D capabilities by opening new centers in Tokyo (Japan) and Michigan (USA), which enhance our ability to work closely with our customers and co-develop industry-leading solutions to produce lighter and safer vehicles.