Carel Industries

Investor Presentation • May 12, 2022

CAREL INDUSTRIES S.p.A. 2022 – Q1 Results

Q1 2022 – Financial highlights

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For the fifth consecutive quarter Carel reported a double digit revenues growth. Q1 2022 results were underpinned by a very strong demand both in HVAC and in Refrigeration, substantially confirming the acceleration reported in several applications during 2021. On top of this the positive contribution from M&A.

• Excluding the positive impact of the exchange rates, and the contribution coming from the acquisition of CFM and Enginia (~8m€) the organic revenues growth rate reported remains above 20% (+21.7%).

• Such a significant growth was made possible by the ability of the company to cope with the raw material shortage scenario, which, in Q1 2022 did not show improving signals compared to the last quarters.

• EBITDA margin equal to 21.1%, substantially in line with FY 2021.

• The positive operating leverage effects along with a moderate increase in sale prices offset higher raw materials costs due to the shortage.

• As a part of the strategy to better face the actual and possible future shortage scenario, CAREL, as already anticipated, increased its safety stock by ~9m€.

Q1 2022 – Results

KPIs
m€	Q1 2021	Q1 2022	Δ%
Revenue	97.6	128.9(1)	32.1%
Revenue FX Adj.	97.6	126.5	29.6%
Revenue (no M&A)	97.6	121.1	24.1%
EBITDA	22.0	27.2(2)	23.8%
EBITDA /Revenue	22.5%	21.1%
Net Profit	13.3	16.4	22.8%
Capex	2.0	4.7	n.r.

(1) Including ~7.8m€ from the inclusion of CFM and Enginia in the consolidation perimeter (2) Including approx 2.1m€ from the inclusion of CFM and Enginia in the consolidation perimeter

• Revenue +32.1%: In spite of the challenging scenario related to the electronic material shortage phenomenon, the company managed to grow organically above 20%, thanks to its resilience. It is worth noting that the growth rate reported in Q1 2021 was already significant (+24%)
• EBITDA +23.8%: The very positive results reported in revenues were reflected in the EBITDA growth rate. The company managed to recover part of the raw material cost inflation thanks to operating leverage and a number of price increases set during the last 12 months.
• Net Profit +22.8%: benefitting from the operating results. Tax-rate substantially aligned with expectations (20.5%)
• Capex: higher capex including the new plant in Croatia.

Q1 2022 – Revenue breakdowns

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• EMEA The same growth rate trend reported in FY 2021, in one of the most important geographic areas, continue (~22% growth on a LFL basis) in spite of the raw materials shortage phenomenon.
• APAC Very positive performance in China, taking also into consideration that China Q1 2022 GDP growth (+4.8%) halved compared to FY 2021 (+8.1%)
• 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 partly capped by the shortage. Seasonal trend in Brazil.

• HVAC: Excellent growth (~24% excluding M&A), driven by a strong demand across the board. The acceleration in heat pumps, Indoor air quality and data centers continued in Q1 2022.

• Refrigeration: Even excluding the contribution coming from M&A, the growth reported in the sector would have been higher than 20% thanks mainly to the energy efficiency/natural refrigerants trend in food retail. Good results also in Food Service. 4

From EBITDA to Net Profit

• Higher D&A mainly due to the purchase price allocation amortisation

• Financial charges in line with Q1 21

• Slight tax-rate increase (20.5%), compared to 19.4% reported in Q1 2022 due to different country mix.

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Q1 2022 – NFP Bridge

• Robust cash generation was offset by an expected increase in NWC.
• ΔNWC +24.4m€: The significant increase in NWC is mainly due to higher revenues (DSO are substantially the same compared to Q1 2021) and a strategic consolidation of the safety stock (~9m€) in order to be more resilient in such challenging raw material shortage scenario.
• Slightly less than half of the total Q1 2022 NFP is related to IFRS 16 accounting effect.

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Closing Remarks

Challenges • The electronic material shortage phenomenon and inflation have not shown any signs of relief/recovery compared to 2021. • The current lock-down situation in Shanghai and the possible extension to Bejing could create further disruption in the supply chain. • HVAC/Ref. scenario remains very positive in terms of demand. Some applications continue to stand out such as heat pumps, data centers, Indoor Air Quality in HVAC and Food Retail in Refrigeration. • Thanks to its broad range of solutions and its resilience CAREL managed to take advantage of this favourable scenario, mitigating the effect of raw-materials shortage and scoring a double-digit organic growth in revenues for the fifth consecutive quarter. • CAREL has already taken significant initiatives in the last 18 months to increase its resilience: Chippivoting one fifth of the microprocessors embedded in its products, extending purchasing orders length, increasing safety stock, gradually increasing prices. • On top of this the imminent coming on stream of the new plant in Croatia will add further production flexibility. Q1 2022 Results Resilience

Guidance

The very positive demand scenario and the resilience shown by CAREL over time will be fundamental in coping with the above-mentioned challenges. Thanks to this, the Company expect to report also in Q2 2022 a significant growth even if with a lower magnitude than in Q1. Expectations are to report a low-to-mid double-digit growth in revenues (on a like for like – QoQ basis).

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Annexes

Shareholding structure (>5% voting rights)

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Income statement and Balance Sheet

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Income statement Balance sheet

K€	Q1 2022	Q1 2021	Delta %
Revenues	128,949	97,623	32.1%
Other revenues	914	1,982	(53.9%)
Operating costs	(102,629)	(77,610)	32.2%
EBITDA	27,234	21,995	23.8%
Depreciation and impairments	(5,414)	(4,742)	14.2%
EBIT	21,821	17,253	26.5%
EBT	21,156	16,568	27.7%
Taxes	(4,345)	(3,214)	35.2%
Net result of the period	16,811	13,353	25.9%
Non controlling interest	425	7	>100%
Group net result	16,386	13,347	22.8%

K€	Q1 2022	FY 2021	Delta %
Fixed Capital	230,805	230,630	0.1%
Working Capital	82,177	55,591	47.8%
Employees defined benefit plans	(8,761)	(8,612)	1.7%
Net invested capital	304,221	277,610	9.6%
Equity	189,125	169,875	11.3%
Non currrent liabilities	50,238	49,894	0.7%
Net financial position (asset)	64,859	57,841	12.1%
Total	304,221	277,610	9.6%

Company Profile

Leading provider of advanced control solutions for HVAC/R

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Note: 1) avg. 2015A-21A; 2) Net of Enginia/CFM contribution, Revenues CAGR=12.1%

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…

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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

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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

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C

Leading provider of advanced energy efficient control solutions

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

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

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Source: Company information

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

Geo expansion Expansion to adjacent niches Secular trends Cross-selling Up-selling Energy savings Digitalisation Focus on environment Expansion of market of reference CAREL share of applications market Market of reference for applications CAREL can address

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Increase in share of wallet

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

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

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FROM PRODUCT PLATFORMS TO INTEGRATED ELECTRONIC SOLUTIONS…

…IN THE HVAC AND REFRIGERATION MARKETS

Positioning and innovation capability hard to replicate 3

Leadership position in HVAC OEM premium niches… 3

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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

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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

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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;

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

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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

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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.

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• 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

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• 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

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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