Carel Industries

M&A Activity • Jul 25, 2023

A KEY MILESTONE IN CAREL'S GROWTH STORY: THE ACQUISITION OF KIONA

Key transaction highlights

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1) Based on 11.216 NOK/EUR exchange rate as of 21/07/2023

A key milestone to accelerate growth while addressing the increasing digitalization and shift towards servitization of the HVAC-R industry

Enhance leadership towards innovative sustainable solutions with critical impact on energy management

Complement and strengthen the digital value proposition with top-notch SaaS prop-tech solutions for efficient HVAC-R systems

Integrate value-accretive human capital with extensive software and digital services expertise

Foster Kiona geographical expansion beyond the Nordics on the back of strong cross-selling opportunities via CAREL global presence

Accelerate Kiona scale-up leveraging CAREL strong know-how, channels, R&D capabilities and best practices

Deliver significant value creation for all stakeholders thanks to CAREL proven execution capabilities

Kiona: a leading rule-of-40 European SaaS provider of prop-tech solutions for energy consumption optimization and building digitalization

Business overview Pioneering SaaS provider of prop-tech solutions for energy usage control and optimization with >75% ARR¹in 2023E Formed in 2021 following the aggregation of 5 highly synergic companies and headquartered in Trondheim (Norway) Fully connected, highly open and AI driven data analysis solutions helping customers achieve sustainability and financial targets Wide range of applications across food retail, commercial and industrial buildings Leading presence in the Nordics, with 17 offices across 8 countries and c. 150 employees

Fast growing and already profitable financial profile with compelling growth prospects and tangible margins expansion potential

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1) Annual Recurring Revenues

This document and all of its contents are property of CAREL. All unauthorised use, reproduction or distribution of this document or the information contained in it, by anyone other than CAREL, is severely forbidden.

A platform to integrate all systems, both old and new

Wide range of applications across three key segments

Multi-residential housing

Focus on multi-family buildings

Cloud control and monitoring, system integration, EMS, AI, analytics and data visualization

Retail and industrial refrigeration

Commercial refrigeration, Ho.Re.Ca. and industrial refrigeration

Cloud control and monitoring, system integration, EMS, data visualization

Public and commercial buildings

Commercial buildings with several HVAC-R technical installations

Cloud control and monitoring, system integration, EMS, analytics and data visualization

Self-learning and adaptive algorithms providing energy savings in the range of 20-30% for buildings

Very short return on investment compared to other energy efficiency related interventions

Algorithms highly and easily customizable by the contractors to achieve better integration and performance

Deep data collection and energy data analytics empowering informed interventions

Attractive expected financial performance with accelerating growth and margin expansion

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1) Annual Recurring Revenues; 2) Pro-forma for acquisitions; 3) Adjusted EBITDA for 2021A and 2022A

This document and all of its contents are property of CAREL. All unauthorised use, reproduction or distribution of this document or the information contained in it, by anyone other than CAREL, is severely forbidden.

Unlocking untapped synergies potential from multiple angles: examples

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Kiona's and CAREL's combined competences and development capabilities create an important firepower in software and digital services fields

Accelerate Kiona geographical expansion outside of the Nordics leveraging on CAREL global channels

Enhance technological innovation opportunities combining CAREL widespread presence in HVAC-R units, as well as its deep knowledge in thermodynamics, with Kiona software and digital value proposition

Explore new applications for Kiona solutions, e.g. indoor air quality and ventilation domains, leveraging Carel strong know-how in sensors and presence in the contracting channel

Strong technical and commercial synergies to boost the Group positioning in the digital service space

The Board of Directors (scheduled for August 3 rd), with a view to retaining a flexible capital structure to enable CAREL to continue pursuing future growth opportunities, will submit for approval to the general meeting of CAREL's shareholders a proposal for a share capital increase (or a proxy – "delega" – to the Board of Directors to carry out such share capital increase) by way of rights offering of up to €200m (inclusive of any share premium), with pre-emption rights

Rights issue pre-underwritten by a leading financial institution, acting as Sole Global Coordinator and Bookrunner

The founding families and controlling shareholders, Luigi Rossi Luciani S.a.p.a. and Athena S.p.A., expressed their intention to support the capital increase and are expected to partially subscribe their portion of the capital increase for an overall amount of c. €50m

The share capital increase is expected to be completed indicatively by year end, subject to market conditions and obtaining the relevant regulatory authorizations

CAREL to retain a flexible capital structure to continue pursuing growth opportunities

Key takeaways

Acquisition of a leading fast growing and profitable rule-of-40 European SaaS provider of prop-tech solutions

Seamless and synergic combination of Kiona solutions offering with CAREL value proposition

Integration of value-accretive human capital with extensive software and digital services expertise

Retention of a minority stake by founder & CEO along with selected key employees to ensure a full alignment of interest

CAREL to preserve financial flexibility to pursue future growth opportunities, leveraging the solid M&A track-record

A key milestone in CAREL growth story significantly strengthening its positioning in digital services

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