Carel Industries

Investor Presentation • Aug 4, 2022

CAREL INDUSTRIES S.p.A. 2022 – H1 Results

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.

H1 2022 – Highlights

2

2

Q2 2022 is the sixth consecutive quarter in which CAREL reported a double digit organic revenues growth. These very solid results, characterized by a demand that remains strong both in HVAC and in Refrigeretion were achieved in spite of a persistent challenging scenario in the supply chain.

• Excluding the positive impact of the exchange rates, and the contribution coming from the acquisition of CFM and Enginia (~16m€) the organic revenues growth rate reported is +18.2%.
• Q2 2022 organic revenues growth (LFL at constant exchange rate) equal to 15.0%, standing in the highest end of the guidance given in May.
• Supply chain challenging scenario exacerbated by the lock-downs in China due to a resurgence of COVID-19 epidemic.

• EBITDA margin equal to 21.5%: higher both on FY 2021 and on Q1 2022 level.
• The full deployment of the effects deriving from previous price-list increases and the positive operating leverage effects partly offset higher raw materials costs due to the shortage.

• M&A pipeline remains active. During H1 2022 CAREL completed two bolt-on transactions:
  • Acquisition of 70% of the share capital of Sauber
  • Acquisition of a further 30% stake in Arion

M&A – 2022 – Sauber

• Company profile: Sauber is based in Porto Mantovano (Mantua) and is active mainly in the sector of on-field installation and maintenance services for HVAC/humidification systems in commercial and residential buildings, with a strong focus on energy saving and optimization.
• Rationale: the transaction can be traced back to the implementation of one of the main pillars of CAREL's strategy of strengthening its services area (digital, onfield and consulting) both by internal activities and through acquisitions.
• Transaction structure: Carel takes over control of Sauber through the acquisition of 70% of its share capital. The acquisition of the remaining 30%, the valuation of which is tied to Sauber future results, is governed by a cross-option mechanism between the parties, exercisable in 2025.

3

3

• Key Data:

• Equity value (70%) = 3.6m€
• 2021 Revenues = 7.6m€
• EBITDA = 0.8m€
• Employees = ~55

• Industrial fitting:

• Bolt-on acquisition
• Strong know-how in on-field services and energy savings
• Strong possible synergies with Iot/Digital services provided by CAREL
• Financial fitting:
• ~7x EV/EBITDA
• Low impact on Carel's NFP

M&A – 2022 – Arion

• Company profile: Arion is the joint venture based in Bolgare (Bergamo Province - Italy), established in 2015 between CAREL and Bridgeport S.p.A. with the aim of developing sensor technology expressly dedicated to the air conditioning and refrigeration sectors.
• Rationale: The transaction is consistent with the Group's long-term strategy since the use of increasingly advanced sensors will make the equipment more efficient, more reliable and more connected with the eco-system in which they are inserted, also facilitating the activation of digital services.
• Transaction structure: Carel acquired a further 30% of the share capital of Arion reaching a 70% stake.

4

4

• Key Data:

• Equity value (30%) = 1.2m€
• 2021 Revenues = 2.7m€
• 2020 EBITDA = 0.5m€
• Employees = 6
• Industrial fitting:
• Bolt-on acquisition
• Enabler of digital services
• Focus on those applications presenting higher growth trends
• Secure supply-chain in critical technology
• Financial fitting:
• ~7x EV/EBITDA* Low impact on Carel's NFP

H1 2022 – Results

KPIs
m€	H1 2021	H1 2022	Δ%
Revenue	202.6	261.3(1)	29.0%
Revenue FX Adj.	202.6	255.3	26.0%
Revenue (no M&A)	202.6	245.5	21.2%
EBITDA	44.1	56.1(2)	27.2%
EBITDA /Revenue	21.8%	21.5%
Net Profit	26.8	34.8	29.7%
Capex	6.9	8.9	29.0%

(1) Including ~15.8m€ from the inclusion of CFM and Enginia in the consolidation perimeter (2) Including approx 3.8m€ from the inclusion of CFM and Enginia in the consolidation perimeter

• Revenue +29.0%: In spite of the challenging scenario (supply chain tensions, cost inflation, slow-down in global economy), the company managed to grow organically close to 20% (+18.2%), thanks to the excellent execution of its multi-year strategic guidelines, including the pursuit of resilience and production flexibility. It is worth noting that the growth rate reported in H1 2021 was already very high (+26%)
• EBITDA +27.2%: The very positive results reported in revenues were reflected in the EBITDA growth rate. Q2 2022 EBITDA margin close to 22% thanks to the full deployment of previous price-list increases, along with operating leverage which helped in recovering part of the raw material cost inflation.
• Net Profit +29.7%: benefitting from the operating results. Higher Tax-rate (21.4%) compared to what reported in H1 2021 (19.9%) due to a different country mix.
• Capex: higher capex including the new plant in Croatia.

5

H1 2022 – Revenue breakdowns

6

• EMEA Robust growth rate reported also in Q2 2022, in spite of the raw material shortage still affecting the business. H1 2022 LFL growth rate equal to 19%
• APAC The deceleration in the growth rate of the area is attributable to the prolonged and strict numerous lock-downs in China. Very positive results instead in South APAC (>20%)
• Americas (North) Even excluding M&A contribution and the positive FX impact, the growth rate reported would have been higher than 20%.
• Americas (South) Growth rate acceleration in Q2 2022 thanks also to seasonality in Refrigeration sector.

• HVAC: Excellent growth confirmed (~20% excluding M&A and FX), driven by a strong demand across the board already experienced in the last quarters (particularly strong in heat pumps, Indoor air quality and data centers).
• Refrigeration: Excluding M&A and FX the growth rate would have been ~16%. The slow-down in growth reported in Q2 2022 is linked to the very strong results reported in Q2 2021 and not to a deceleration in demand, which remains robust. 6

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.

From EBITDA to Net Profit

K€	H1 '21	H1 '22	Δ%
EBITDA	44,123	56,106	27.2%
D&A	-9,669	-11,168
EBIT	34,454	44,938	30.4%
Financial (charges)/income	-1,130	-1,540
FX gains/losses	-255	-153
Companies consolid. with Eq. . Methods	618	2,363
EBT	33,688	45,608	35.4%
Taxes	-6,701	-9,756
Minorities	-145	-1044
Group net profit	26,843	34,809	29.7%

• Higher D&A mainly due to the purchase price allocation amortisation
• Financial charges slightly higher compared to H1 '21 impacted mainly by the financial effects of the put/call option on CFM
• The growth in Companies consolidated with equity method is due to the application of the fair-value principle on Arion stake, following the related M&A transaction.

• tax-rate increase (21.4%), compared to 19.9% reported in H1 2022 due to different country mix.

7

H1 2022 – NFP Bridge

• Robust cash generation was offset by a strategic increase in NWC along with the payment of 2021 dividends.

• ΔNWC +37.4m€: The significant increase in NWC is mainly due to higher revenues (DSO are substantially the same compared to H1 2021) and a strategic consolidation of the safety stock (~19m€) in order to be more resilient in such challenging raw material shortage scenario.
• Approximately one third of the total H1 2022 NFP is related to IFRS 16 accounting effect.

Closing Remarks

9

• Solid growth across the board and in all the regions with a demand level that remains high and healthy. Some applications continue to stand out such as heat pumps, data centers, Indoor Air Quality in HVAC and Food Retail in Refrigeration.
• The strong effort that the Company put and is still putting into initiatives to increase its resilience (chippivoting, longer-term orders, double source/country suppliers, new plant in Croatia) allowed for a double-digit organic growth in revenues for the sixth consecutive quarter.

M&A

• In H1 2022 CAREL completed two minor bolt-on acquisitions but with a significant strategic potential:
  • Sauber Strengthening Group's positioning in the services area
  • Arion Securing the supply chain and opening new opportunities in the sensors field
• M&A pipeline is still active, with a particular focus on Europe and US.

Challenges

Q2/H2 2022 Results

• The electronic material shortage phenomenon and inflation have not shown significant and unmistakable signs of relief/recovery compared to previous quarters.
• The restrictive monetary policy adopted by Fed and ECB are likely to slow-down global economic growth (US real GDP decreased by 1.6% in Q1 2022 and by 0.9% in Q2 2022)

Guidance

9 A demand scenario that remains positive and the continuous effort of the company in increasing its resilience should allow the company to positively cope with the above-mentioned challenges. Thanks to this, and net of possible further worsening in the supply chain, the Company expect to report in H2 2022 a low-to-mid double-digit growth in revenues (on a like for like – HoH – current FX basis).

Annexes

Shareholding structure (>5% voting rights)

11

Income statement and Balance Sheet

12

12

Income statement Balance sheet

K€	H1 2022	H1 2021	Delta %
Revenues	261,346	202,601	29.0%
Other revenues	2,023	2,761	(26.7%)
Operating costs	207,262	161,239	28.5%
EBITDA	56,106	44,123	27.2%
Depreciation and impairments	(11,168)	(9,669)	15.5%
EBIT	44,938	34,454	30.4%
EBT	45,608	33,688	35.4%
Taxes	(9,756)	(6,701)	45.6%
Net result of the period	35,853	26,987	32.9%
Non controlling interest	1,044	145	>100%
Group net result	34,809	26,843	29.7%

K€	H1 2022	FY 2021	Delta %
Fixed Capital	237,814	230,338	3.2%
Working Capital	93,044	55,591	67.4%
Employees defined benefit plans	(7,906)	(8,612)	(8.2%)
Net invested capital	322,952	277,317	16.5%
Equity	198,304	169,875	16.7%
Non currrent liabilities	49,892	49,602	0.6%
Net financial position (asset)	74,756	57,841	29.2%
Total	322,952	277,317	16.5%

Company Profile

Leading provider of advanced control solutions for HVAC/R

14

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.

Note: financial data refer to consolidated accounts of CAREL Industries S.p.a. 2015-2021 IFRS. Comparability might be affected by change in consolidation perimeter

We operate in attractive niches across a wide range of end-markets…

Source: Company information as of Mar-22

…through a one-stop-shop portfolio of components and platforms

Source: Company information as of Mar-22 Note: 1) developed with partners

16

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.

Well-articulated strategies to continue the growth track record

• Consolidation of HVAC market leadership
• Growth in Refrigeration driven by technology leadership
• Upselling and cross-selling
• Global penetration
• Connectivity, IoT and AI capabilities already developed
• Advanced monitoring and optimization services to end customers to represent one of CAREL's organic growth drivers
• Maintain innovation leadership
• Deliver strong profitability
• Leveraging the current production capacity, further enhancing flexibility
• Develop talent
• Disciplined bolt-on M&A activity focused on complementing corebusiness in Europe, on expanding in US and APAC and on adjacent capabilities, leveraging on solid balance sheet

CAREL general strategy for 2020-2023 will be oriented to the research for new innovative technological solutions with a major focus on energy saving, transition to natural refrigerants, widening high-efficiency solutions offer and geographical expansion

Source: Company information as of Mar-22

A

B

C

Leading provider of advanced energy efficient control solutions

¹ High-tech leader in attractive niches of the HVAC/R industry

20

20

Source: Company information as of Mar-18, BSRIA (Mar-17)

Note: 1) 2016 market shares calculated on # of units based on BSRIA market data and management elaborations; 2) close control units for data centers in US, UK and Italy; 3) tested by third-party laboratory compared to Topten EU benchmarks; 4) compared to average semi-hermetic

² Attractive market growth supported by secular trends

21

21

Source: Company information

Growth is driven by market trends and focused strategic actions… 2

Increase in share of wallet

products driven by break-through innovations, such as energy saving features, digitalisation and environmental focus

22

…and favoured by up-selling and cross-selling 2

FROM PRODUCT PLATFORMS TO INTEGRATED ELECTRONIC SOLUTIONS…

…IN THE HVAC AND REFRIGERATION MARKETS

Positioning and innovation capability hard to replicate 3

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.

Leadership position in HVAC OEM premium niches… 3

25

25

Source: Management elaborations based on BSRIA data for the year 2016 (based on report dated Mar-17) Note: 1) Total other minor proprietary c.13%; 2) Total other minor proprietary c.8%

…and leading in innovation in the refrigeration market 3

26

26

Source: Company info; Management elaborations

4 Highly efficient global operations serving locally…

4 …diversified blue-chip customers

Well-established relationships oriented to preserve and enhance the CUSTOMER LIFE-TIME VALUE

Source: Company information as of Dec.21;

Note: 1) as% of 2021 Revenues 2) as of 2021 revenues for each market 3) Top 40 customers accounting for approx. 50% of total revenue for each market

⁵ Track record of profitable organic growth

Resulting in a solid balance sheet and strong value creation to shareholders

Source: Company information as of Mar-22 Note: 2015-2020 IFRS

Note: 1) Including the contribution from M&A and the impact of the non recurring IPO Costs (~8m€ in 2018) 2) Operating cash calculated as cash flow from operations - Capex;

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.

29

Global expansion, innovation and services 6 A

Pursuing additional opportunities improving services offer with IoT and advanced monitoring solutions

Cross-selling and upselling exploiting high-efficiency trends

Consolidation of leadership positions in HVAC Growth in Refrigeration

Geographical expansion through the introduction of innovative solutions in new geographies

Pursuing external growth through disciplined bolt-on M&A 6 C

CAREL has performed detailed analyses and scouting of potential targets, thus promoting an opportunistic approach with a focus on 3 MAIN EXPANSION AREAS:

COMPLEMENTING CORE-BUSINESS

A

through the acquisition of complementary products / services, competences and niche markets, and increasing its presence in European markets

GEOGRAPHICAL EXPANSION ABROAD, mainly US and APAC B

Potential selected acquisitions in NEW APPLICATIONS (e.g. industrial refrigeration, building automation, etc.)

C

M&A

M&A – 2021 – CFM

• Company profile: a long-standing distributor and partner in Turkey as well as a provider of digital and on-field services and complete high added value solutions dedicated to OEMs, contractors and end users in the Turkish HVAC (Heating, Ventilation and Air conditioning) and Refrigeration market.
• Transaction structure: Carel takes control of CFM through the acquisition of 51% of the share capital of the company The acquisition of the remaining 49% of CFM, the valuation of which is tied to CFM future results, is governed by a crossoption mechanism between the parties, exercisable between 2024 and 2027.

• Key Data:

• Enterprise value (51%) = 23.1m€
• 2020 Revenues = 14.5m€
• EBITDA = 5.0m€
• Employees = ~34

• Industrial fitting:

• Bolt-on acquisition
• Footprint expansion outside Western Europe
• Strong know-how in digital and onfield services
• Financial fitting:
• ~9x EV/EBITDA
• Low impact on Carel's NFP

M&A – 2021 – Enginia

• Company profile: Enginia has been operating in the AHU sector since 1997 and has grown year after year to become a recognized leader, particularly as regards the manufacture production of dampers for air handling units.
• Rationale: expansion of the product portfolio in the HVAC market, consolidating CAREL's role as a supplier of complete solutions to manufacturers of air handling units through advanced solutions in terms of performance and energy efficiency.
• Transaction structure: Carel, through its subsidiary Recuperator, acquired 100% of the share capital of Enginia.

34

34

• Key Data:

• Enterprise value* = 12.4m€
• 2020 Revenues = 12.3m€
• 2020 EBITDA = 1.5m€
• Employees = 46

• Industrial fitting:

• Bolt-on acquisition
• Completing CAREL's product range for AHU
• Significant synergies with CAREL/Recuperator
• Financial fitting:
• ~8x EV/EBITDA* Low impact on Carel's NFP

*The transaction included the real estate complex that houses the company's headquarters, which was valued separately.

M&A – 2018 – Recuperator

• Key Data:

• Cash-out for equity = 25.7m€
• Company positive net-cash = 6.9m€
• 2017 Revenues = 16.4m€
• EBITDA = 1.7m€
• Employees = ~60

• Industrial fitting:

• Small-size Company
• Complementary products
• Carel's commercial strength
• Cross-selling

• Financial fitting:

• ~11x EV/EBITDA vs. CAREL's ~15x
• Net-Cash in the BS
• Low impact on Carel's NFP

M&A – 2018 – HygroMatik

36

36

• Key Data:

• Cash-out for equity = 56.1m€
• Enterprise Value = 59.0m€
• 2017 Revenues = 15.0m€
• EBITDA = 4.7m€
• Employees = ~60

• Industrial fitting:

• Small-size Company
• Interesting geographic positioning
• Strong in after-sale services
• Cross-selling

• Financial fitting:

• ~12.5x EV/EBITDA vs. CAREL's ~15x
• HygroMatik NFP substantially neutral.

Disclaimer

37

37

This document has been prepared by CAREL Industries S.p.A for use during meetings with investors and financial analysts and is solely for information purposes. The information set out here in has not been verified by an independent audit company.

Neither the Company nor any of its subsidiaries, affiliates, branches, representative offices (the "Group"), as well as any of their directors, officers, employees, advisers or agents (the "Group Representatives") accepts any responsibility for/or makes any representation or warranty, express or implied, as to the accuracy, timeliness or completeness of the information set out herein or any other related information regarding the Group, whether written, oral or in visual or electronic form, transmitted or made available.

This document may contain forward-looking statements about the Company and/or the Group based on current expectations and opinions developed by the Company, as well as based on current plans, estimates, projections and projects of the Group. These forward-looking statements are subject to significant risks and uncertainties (many of which are outside the control of the Company and/or the Group) which could cause a material difference between forward-looking information and actual future results.

The information set out in this document is provided as of the date indicated herein. Except as required by applicable laws and regulations, the Company assumes no obligation to provide updates of any of the aforesaid forward-looking statements.

Under no circumstances shall the Group and/or any of the Group Representatives beheld liable (for negligence or otherwise) for any loss or damage howsoever arising from any use of this document or its contents or otherwise in connection with the document or the aforesaid forward looking statements. This document does not constitute an offer to sell or a solicitation to buy or subscribe to Company shares and neither this entire document or a portion of it may constitute a recommendation to effect any transaction or to conclude any legal act of any kind whatsoever.

This document may not be reproduced or distributed, in whole or in part, by any person other than the Company. By viewing and/or accepting a copy of this document, you agree to be bound by the foregoing limitations

38

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.