De'Longhi

Earnings Release • May 10, 2024

Treviso, May 10, 2024 PRESS RELEASE

The Board of Directors of De' Longhi SpA approved today the consolidated results¹ of the first quarter of 2024:

• o revenues of € 658.8 million, up 9.4% (+5.9% on a like-for-like basis and +7.3% on a like for like basis and constant currencies);
• o adjusted² Ebitda of € 93.8 million, equal to 14.2% of revenues (compared to 12.3% achieved in the first quarter of 2023);
• o a net income pertaining to the Group of € 51.3 million, equal to 7.8% of revenues (vs. 6.4% of first quarter of 2023);
• o a positive net financial position amounting to € 307.6 million, after the net absorption in relation to the closing of the business combination between La Marzocco and Eversys.

In the words of the C.E.O., Fabio de' Longhi:

(Eur million)	$Q1 - 24$	$Q1 - 23$	change	change %
Revenues	658.8	602.4	56.4	$9.4\%$
net ind. margin	335.4	304.4	31.0	10.2%
% of revenues	50.9%	50.5%
adjusted Ebitda	93.8	74.3	19.5	26.2%
% of revenues	14.2%	12.3%
Ebitda	91.2	75.5	15.7	20.8%
% of revenues	13.8%	12.5%
Ebit	64.8	50.1	14.7	29.2%
% of revenues	9.8%	8.3%
Net Income*	51.3	38.7	12.6	32.5%
% of revenues	7.8%	6.4%

The first quarter of 2024 highlighted a trend continuity with the second part of last year, achieving an increase in organic turnover at constant currencies at a high single digit rate for the third consecutive quarter.

The normalisation of the post-pandemic effects on consumption, combined with a restored level of normality of stocks at the distribution level, have favoured a significant comeback in growth dynamics over the last few quarters, both in the coffee sector and in the nutrition and preparation area of foods.

These dynamics of increase in volumes, together with the stabilization of some production costs compared to previous years, have allowed the Group to obtain a further margin improvement, quickly bringing it within the historical profitability range.

The overall picture indicates a consolidation and strengthening of results following the gradual post-pandemic normalisation phase in recent years, despite being aware that the current macroeconomic and geopolitical scenario remains uncertain and variable.

It should be noted that the revenues in the quarter were impacted by around €21 million as a result of the one-month consolidation of La Marzocco.

In the first quarter, the Group's revenues reached €658.8 million, showing a 9.4% increase compared to the previous year, thanks to a like-for-like growth of 5.9%, which was 7.3% at constant exchange rates.

The currency component thus had a negative impact of around 1.4 percentage points on organic growth, primarily because of the devaluation of certain currencies, such as the US dollar and the Yen.

The geographical expansion, in line with previous quarters, displayed a steady growth trend in the European area, achieving organic growth at a low-teens rate.

	Reported		At constant perimeter
EUR million	$01 - 24$	var. %	$01 - 24$	var. %	var. % at constant FX
South West Europe	242.4	12.3%	238.6	10.6%	$10.1\%$
North East Europe	181.9	15.6%	179.6	14.1%	17.1%
EUROPE	424.3	13.7%	418.1	$12.1\%$	13.1%
MEIA (MiddleEast/India/Africa)	39.2	$-11.5%$	38.2	$-13.8\%$	$-12.2\%$
Americas	105.7	$10.1\%$	98.1	2.2%	3.3%
Asia-Pacific	89.6	$0.6\%$	83.3	$-6.4\%$	$-3.0\%$
TOTAL REVENUES	658.8	$9.4\%$	637.8	5.9%	7.3%

In details:

• South-Western Europe experienced organic growth of roughly 10%, in line with the main trends identified in the second half of 2023. Within this context, the main markets witnessed significant growth in turnover across all major product categories, with certain countries like the Iberian Peninsula and Switzerland showing accelerated growth in the double digits;
• North-Eastern Europe witnessed significant organic revenue growth for the fourth consecutive quarter, reinforced by the high-teens performance in the early months of 2024. We observe the continuation of the favourable trend of the UK and Poland, with an acceleration in the Czech Republic, Slovakia, and Hungary area;
• the MEIA area has gone through a decline in turnover, which has been heavily influenced by a complex macroeconomic and geopolitical context;
• the Americas area achieved an increase in turnover of around 10%, thanks to the consolidation of La Marzocco and mid-single digit organic growth, supported mainly by the performance of the nutrition and food preparation sector driven by the expansion of Nutribullet's products;
• finally, the Asia Pacific region, which was the only one to show growth in the first quarter of last year, maintains a turnover in line with 2023, showing a partial decline at an organic and constant currency level, however growth accelerated in countries like Australia and New Zealand.

Regarding product segments, it is worth highlighting that there has been positive momentum across all macro categories, allowing the Group to achieve organic growth at constant exchange rates in the high single digits.

Specifically, the coffee machine sector (area including both domestic and professional products), which currently accounts for approximately 60% of total revenue, grew significantly in the quarter at a low teens rate, driven by an acceleration in the expansion of the household fully automatic machines and the contribution from La Marzocco consolidation of 1 month. In the nutrition and food preparation category, personal blenders and hand blenders supported the sector's performance in the quarter, which recorded low to mid-single digit increase. Lastly, in the quarter, there was a worth noting expansion of Braun branded ironing products, with significant growth in many countries in the European area.

Over the last quarters, the Group has been able to significantly enhance its margin profile in comparison to the complexities faced in 2022. Volume growth, together with partial improvements in industrial costs, allowed a further improvement in margins in the first quarter of this year.

In details:

• the net industrial margin stood at €335.4 million, equal to 50.9% of revenues, compared to 50.5% in 2023, benefiting from a positive effect of the mix and an easing of inflationary pressures on product costs;
• the Ebitda adjusted was €93.8 million, or 14.2% of revenues compared to 12.3% the previous year. The expansion of volumes, a further partial easing of inflationary pressures on some industrial costs and an investment in media and communication in line respect to 2023 (A&P on revenues at 11.2%), have supported an improvement in margins, despite an increase in labour costs and organizational structures;
• the Ebitda amounted to €91.2 million, or 13.8% of revenues, after €2.1 million of non-recurring expenses compared to 1.4 million of non-recurring income in 2023;
• the operating result (Ebit) stood at €64.8 million, equal to 9.8% of revenues, with a level of depreciation substantially in line with the previous year;
• finally, the Group's net profit rose to €51.3 million, representing 7.8% of revenues (6.4% in Q1 2023). Financial income was €4.1 million, compared to financial expenses of €0.6 million in 2023, reflecting a careful liquidity investment strategy and an effective currency management.

The Group ended the quarter with a positive Net Financial Position of €307.6 million, after €326.8 million of net absorption in relation to the closing of the business combination between La Marzocco and Eversys. Similarly, the net position towards banks and other financiers showed a large change, amounting to €409.9 million.

Free Cash Flow before dividends and acquisitions amounted to €389.2 million in the twelve months, thanks to a significant contribution from current operations. In the first quarter of the year, Free Cash Flow before dividends and acquisitions was negative by €28.2 million, due to an increase in net working capital compared to the year-end value.

Operating working capital (equal to 5.9% of revenues) showed a partial increase compared to the position at the end of the year due to the effect of the consolidation of La Marzocco and the seasonality relating to the warehouse.

EUR million	Mar 31st, 24	Mar 31st, 23	change 12 months	Dec 31st, 23	change 3 months
Net working Capital	36.4	159.9	$-123.5$	$-82.8$	119.2
operating NWC	183.6	256.6	$-73.0$	61.1	122.5
operating NWC / Revenues	5.9%	8.5%	$-2.6\%$	$2.0\%$	3.9%
Net Financial Position	307.6	317.2	$-9.6$	662.6	$-355.0$
Net Bank Position	409.9	399.2	10.7	761.7	-351.8
Net Equity	2,005.5	1.682.7	322.8	1.811.1	194.4

Capital Expenditures absorbed €25.7 million, up from €19.2 million last year.

There are no significant events following the end of period.

In the words of the C.E.O., Fabio de' Longhi:

The Officer Responsible for Preparing the Company's Financial Report, Stefano Biella, hereby declares, as per article 154 bis, paragraph 2, of the "Testo Unico della Finanza", that all information related to the company's accounts contained in this press release are fairly representing the accounts and the books of the company.

Investor Relations: Samuele Chiodetto T: +39 0422 4131 e-mail: investor.relations@delonghigroup.com

Media relations: T: +39 0422 4131 e-mail: media.relations@delonghigroup.com

www.delonghigroup.com

(€/million)	31.03.2024	% revenues	31.03.2023	% revenues
Revenues	658.8	100.0%	602.4	100.0%
Change	56.4	9.4%
Materials consumed & other production costs (production services and payroll costs)	(323.4)	(49.1%)	(298.0)	(49.5%)
Net industrial margin	335.4	50.9%	304.4	50.5%
Services and other operating expenses Payroll (non-production)	(171.1) (70.5)	(26.0%) (10.7%)	(166.1) (63.9)	(27.6%) (10.6%)
EBITDA before non-recurring income (expenses)/stock option costs	93.8	14.2%	74.3	12.3%
Change	19.5	26.2%
Non-recurring income (expenses)/stock option costs	(2.6)	(0.4%)	1.2	0.2%
EBITDA	91.2	13.8%	75.5	12.5%
Amortization	(26.4)	(4.0%)	(25.4)	(4.2%)
EBIT	64.8	9.8%	50.1	8.3%
Change	14.7	29.2%
Net financial income (expenses)	4.1	0.6%	(0.6)	(0.1%)
Profit (loss) before taxes	68.8	10.4%	49.5	8.2%
Taxes	(15.8)	(2.4%)	(10.8)	(1.8%)
Net result	53.0	8.0%	38.8	6.4%
Minority interests	1.7	0.3%	-	0.0%
Profit (loss) pertaining to the Group	51.3	7.8%	38.7	6.4%

(€/million)	1st Quarter 2024	%	1st Quarter 2024 at like for like perimeter	%	1st Quarter 2023	%	Change at current FX rates and like for like perimeter	Change % like for like at current FX rates	Change % like for like at constant FX rates
Europe	424.3	64.4%	418.1	65.6%	373.2	62.0%	45.0	12.1%	13.1%
Americas	105.7	16.0%	98.1	15.4%	96.0	15.9%	2.1	2.2%	3.3%
Asia Pacific	89.6	13.6%	83.3	13.0%	89.0	14.8%	(5.7)	(6.4%)	(3.0%)
MEIA (Middle East/India/Africa)	39.2	6.0%	38.2	6.0%	44.3	7.3%	(6.1)	(13.8%)	(12.2%)
Total revenues	658.8	100.0%	637.8	100.0%	602.4	100.0%	35.4	5.9%	7.3%

(€/million)	31.03.2024	31.03.2023	31.12.2023
- Intangible assets	1,241.8	880.3	878.3
- Property, plant and equipment	537.7	440.2	478.0
- Financial assets	10.9	11.6	9.7
- Deferred tax assets	71.3	64.6	60.4
Non-current assets	1,861.7	1,396.7	1,426.4
- Inventories	625.5	615.3	504.7
- Trade receivables	225.5	171.8	272.7
- Trade payables	(667.4)	(530.6)	(716.2)
- Other payables (net of receivables)	(147.2)	(96.6)	(143.9)
Net working capital	36.4	159.9	(82.8)
Total non-current liabilities and provisions	(200.2)	(191.2)	(195.1)
Net capital employed	1,697.9	1,365.4	1,148.5
(Net financial assets)	(307.6)	(317.2)	(662.6)
Total net equity	2,005.5	1,682.7	1,811.1
Total net debt and equity	1,697.9	1,365.4	1,148.5

(€/million)	31.03.2024	31.03.2023	31.12.2023
Cash and cash equivalents	893.4	847.5	1,250.2
Other financial receivables	312.6	286.2	172.5
Current financial debt	(409.7)	(181.7)	(289.0)
Net current financial position	796.3	952.0	1,133.6
Non-current financial receivables and assets	122.7	124.2	122.0
Non-current financial debt	(611.4)	(759.0)	(593.1)
Non-current net financial debt	(488.7)	(634.8)	(471.0)
Total net financial position	307.6	317.2	662.6
of which:
- positions with banks and other financial payables	409.9	399.2	761.7
- lease liabilities	(109.8)	(75.4)	(98.4)
- other financial non-bank assets/liabilities (fair value of derivatives and financial debt connected to business combinations)	7.5	(6.5)	(0.7)

	31.03.2024	31.03.2023	31.12.2023
(€/million)	3 months	3 months	12 months
Cash flow by current operations	97.6	72.5	446.3
Cash flow by changes in working capital	(116.0)	(31.1)	138.0
Cash flow by current operations and changes in NWC	(18.4)	41.4	584.3
Cash flow by investment activities	(25.7)	(19.2)	(132.3)
Cash flow by operating activities	(44.1)	22.2	452.0
Acquisitions	(326.8)	-	-
Dividends paid	-	-	(72.1)
Stock options exercise	5.0	-	5.1
Cash flow by other changes in net equity	10.9	(3.8)	(21.2)
Cash flow generated (absorbed) by changes in net equity	15.8	(3.8)	(88.2)
Cash flow for the period	(355.0)	18.5	363.8
Opening net financial position	662.6	298.8	298.8
Closing net financial position	307.6	317.2	662.6