Landi Renzo

Earnings Release • Nov 8, 2019

9M 2019 FINANCIAL RESULTS REVIEW

9M 2019 Highlights: sixth consecutive quarter with a positive net income with increasing profitability and SAFE&CEC starting to contribute to value creation

Landi Renzo Group key events occurred in 2019

Commercial / strategic development

• Started and almost completed new products validation with top "tier 1 OEM" both in Italy and abroad, both for HD and Off Road

• Started the development of a high pressure reducer and metering systems for Hydrogen • Signed an agreement with Hydrogenics to design and develop fuel cell hydrogen systems • SAFE&CEC is working on the adaptation of its technology to Hydrogen, in order to be ready as infrastructure • Major European OEMs confirmed their programs with LPG until 2023 and awarded new OEM CNG programs in India (2021-2024)

• and the fuel-cell market start growing as expected

• New Product development

• New experienced team started to work on Heavy Duty EMSg to offer full system from regulator to engine system, both for CNG/LNG and H2

• SAFE&CEC is studying the development of a dedicated LNG product offering, starting from Bio-LNG production

• Key management events

• of revenues and EBITDA, starting in 2020

• LRG is finalizing the agreement with KLR to fully consolidate the company, with positive impact both in terms • LRG is currently updating its strategic plan, assessing any new opportunity offered by the sustainable mobility market, to identify a set of actions to accelerate growth and sustain the performance improvement. By end of 2019 this activity will be completed

Stable revenues lead to a net income of 3,1M€ (+35,9%) Q3 2019 is the sixth consecutive quarter with a positive result

M€; %

						Q3 2019 is the sixth consecutive quarter with a positive result
M€; %						Highlights
	2019 9M	2018 9M	Delta M€	Delta %	•	Revenues are stable, with a different sales mix
Revenues	137,9	138,1	-0,2	-0,1%		conditions
Adj. EBITDA	18,1	19,1	-1,0	-5,6%
% on Revenues	13,1%	13,9%				automotive sector)
EBITDA	17,3	17,5	-0,2	-1,5%
% on Revenues	12,5%	12,7%
EBIT	8,2	9,6	-1,4	-14,2%		flexible cost structure
% on Revenues Capital Gain/Loss	6,0% 0,3	6,9% -1,2	1,5	NA
Financials	-3,6	-4,1	0,5	11,6%
EBT	4,9	4,2	0,7	15,9%
Taxes	1,8	1,9	-0,1	8,1%
Net Income	3,1	2,3	0,8	35,9%

Highlights

• Revenues are stable, with a different sales mix between OEM (+13,3% volumes) and AM business, slightly declining due to Asia&RoW temporary market conditions Delta %
• The reduced fixed cost structure is an important lever to obtain positive results also in Q3 with EBITDA at 12,4% (in line with best practices in the automotive sector)
• 9M 2019 EBITDA reached 12,5% of revenues, in line with last year, showing resilience in a temporary volume slowdown and price competition, thanks to a flexible cost structure Result) contributes to the positive result • Financial costs decreased, also thanks to the fiveyear medium-term financing agreement signed in Q3 • 9M 2019 EBT (4,9M€; +15,9% vs 9M 2018) is in line

• SAFE&CEC strong performance (Adj. EBITDA more than double compared to last year and a positive Net

• with management expectations 9M 2019 Net Income (3,1M€) increased 35,9% compared to last year; Q3 is the sixth consecutive quarter with a positive net income

9M 2019 Net Sales breakdown by sector and geographical region

M€; %

Highlights

Sector

• 18,9% • Landi Renzo confirms its position as the top OEM "tier-1" supplier in Europe
• OEM share up to 42,1% of total sales vs 37,7% in 9M 2018

Region

• Growth concentrated in Europe and Italy (+4,9M€;+5,9%) mainly due to
• OEM sales America revenues aligned to 2018, recovering in Q3 with volumes increased by 18,5% compared to Q3 2018 America Asia&RoW -15,7%
• Asia&RoW decreased mainly due to the temporary slowdown of AM volume in North Africa and India (potential consolidation of Indian OEM would positively impact) 31,5 9M '18

An efficient cost control implementation balanced the different channel sales mix in 9M 2019

Highlights

• 17,3 • EBITDA is in line with last year :
• o No impact of volumes, unchanged compared to 9M 2018
• 9M '19 o Effect of change in sales mix between Aftermarket and OEM sectors impacting by 4,4M€, offset by fixed costs reduction by 2,5M€ thanks to the full benefit from the industrial turnaround implementation
• o Effect of «IFRS 16» applied from 2019 (+1,7M€)

^31,5 • Working Capital increased to sustain strong Q4 volumes outlook and expected to return close to 12% of revenues at the end of the year

NFP impacted by investments in working capital and in R&D to support Q4 sales orders and new products development for the HD segment

(1) Short and long terms debt and bond are inclusive of amortized cost effect

(2) Accrued interests included

SAFE&CEC: strong turnover growth (+16,4%) with Adj. EBITDA more than double and positive Net Result

M€

								SAFE&CEC: strong turnover growth (+16,4%) with Adj. EBITDA more than
double and positive Net Result
M€
								Highlights
	H1	Q3	2019 9M	2018 9M	Delta M€	Delta %	•	Q3 2019 best quarterly performance since the merger, with an Adj. EBITDA of
Revenues	28,8	18,1	46,9	40,3	6,6	16,4%
							•	9M consolidated revenues reached 46,9M€, increasing by 16,4% compared to
Adj. EBITDA % on Revenues	2,0 6,9%	1,8 10,2%	3,8 8,2%	1,5 3,6%	2,3	163,8%		9M 2018, confirming the growing trend of
EBITDA	1,7	1,7	3,4	-0,3	3,7	N/A		volumes and the strong positioning of the Group on the market
% on Revenues	5,8%	9,2%	7,2%	-0,7%			•	Adj. EBITDA improved by 2,3M€, more
EBIT	0,4	1,0	1,4	-1,2	2,6	N/A		than double compared to last year, thanks
% on Revenues	1,4%	5,4%	2,9%	-2,9%				to the volume effect as well as the impact of
Net Income	-0,4	0,5 0,1 -2,7 2,8		N/A	•	Completion of integration activities reflected
								in 9M 2019 EBIT, positive by 1,4M€,
			2019	2019	2018
			9M	H1	FY		•	Net Result is positive, for the first time
Working Capital			13,4	12,4	8,7			than last year)
% on revenues			19,8%	19,7%	14,8%		•	Working capital affected by large stock to satisfy the existing order book

2019 9M	2019 H1

Highlights

• Q3 2019 best quarterly performance since the merger, with an Adj. EBITDA of M€ Delta %
• 1,8M€ and a Net Income of 0,5M€ • 9M consolidated revenues reached 46,9M€, increasing by 16,4% compared to 9M 2018, confirming the growing trend of volumes and the strong positioning of the Group on the market • Completion of integration activities reflected compared to -1,2M€ in 9M 2018 since the merger, by 0,1M€ (2,8M€ more
• Adj. EBITDA improved by 2,3M€, more than double compared to last year, thanks to the volume effect as well as the impact of cost saving initiatives completed in 2018
• in 9M 2019 EBIT, positive by 1,4M€,
• Net Result is positive, for the first time than last year) 2018 FY
• Working capital affected by large stock to satisfy the existing order book

SAFE&CEC 2019 outlook shows a growth trend of revenue and profitability, with development opportunities for the coming future

Landi Renzo - Company profile (05/11/2019)

BOARD OF DIRECTORS

SHAREHOLDING SHARE INFORMATION

N. of shares outstanding: 112.500.000

TOP MANAGERS INVESTOR RELATIONS

Investor Relations Contacts:

Paolo Cilloni Tel: +39 0522 9433 E-mail: ir@landi.it www.landirenzogroup.com

STOCK VS MARKET

LandiRenzo – STOXX Europe 600 Automobiles

CONSOLIDATED P&L

(thousands of Euro)
CONSOLIDATED INCOME STATEMENT	30/09/2019	30/09/2018
Revenues from sales and services	137,910	138,083
Other revenue and income	315	249
Cost of raw materials, consumables and goods and change in inventories	-71,083	-65,433
Costs for services and use of third party assets	-27,965	-32,259
Personnel expenses	-20,169	-21,115
Allocation, write-downs and other operating expenses	-1,745	-2,008
Gross Operating Profit	17,263	17,517
Amortization, depreciation and impairment	-9,051	-7,945
Net Operating Profit	8,212	9,572
Financial income	75	106
Financial expenses	-3,178	-2,839
Exchange gains (losses)	-531	-1,376
Gains (losses) on equity investments valued using the equity method	315	-1,242
Profit (Loss) before tax	4,893	4,221
Current and deferred taxes	-1,761	-1,917
Net profit (loss) for the Group and minority interests, including:	3,132	2,304
Minority interests	-53	-107
Net profit (loss) for the Group	3,185	2,411
Basic earnings (loss) per share (calculated on 112,500,000 shares)	0.0283	0.0214
Diluted earnings (loss) per share	0.0283	0.0214

CONSOLIDATED BALANCE SHEET

(thousands of Euro)
ASSETS	30/09/2019	31/12/2018	30/09/2018
Non-current assets
Land, property, plant, machinery and equipment	11,141	12,745	12,501
Development expenditure	7,685	6,932	4,776
Goodwill	30,094	30,094	30,094
Other intangible assets with finite useful lives	12,968	14,039	14,487
Right-of-use assets	6,360	0	0
Equity investments valued using the equity method	23,594	22,292	23,059
Other non-current financial assets	404	352	373
Other non-current assets	3,420	3,991	3,990
Deferred tax assets	9,610	10,538	7,262
Total non-current assets	105,276	100,983	96,542
Current assets
Trade receivables	34,064	35,131	33,793
Inventories	43,494	38,895	45,424
Other receivables and current assets	7,049	8,016	7,956
Current financial assets	2,760	0	0
Cash and cash equivalents	17,631	15,075	17,224
Total current assets	104,998	97,117	104,397

CONSOLIDATED BALANCE SHEET

CONSOLIDATED BALANCE SHEET
(thousands of Euro)
SHAREHOLDERS' EQUITY AND LIABILITIES	30/09/2019	31/12/2018	30/09/2018
Shareholders' Equity
Share capital	11,250	11,250	11,250
Other reserves	48,943	43,931	44,192
Profit (loss) of the period	3,185	4,671	2,411
Total Shareholders' Equity of the Group	63,378	59,852	57,853
Minority interests	-323	-276	-742
TOTAL SHAREHOLDERS' EQUITY	63,055	59,576	57,111
Non-current liabilities
Non-current bank loans	55,060	23,055	24,614
Other non-current financial liabilities	0	24,427	26,560
Non-current liabilities for right-of-use	4,810	0	0
Provisions for risks and charges	3,270	5,443	6,162
Defined benefit plans for employees	1,726	1,646	1,753
Deferred tax liabilities	425	339	405
Liabilities for derivative financial instruments	357	0	0
Total non-current liabilities	65,648	54,910	59,494
Current liabilities
Bank financing and short-term loans	26,102	16,203	18,699
Other current financial liabilities	419	4,262	3,984
Current liabilities for right-of-use	1,955	0	0
Trade payables	46,614	55,166	54,562
Tax liabilities	1,684	2,385	1,807
Other current liabilities	4,797	5,598	5,282
Total current liabilities	81,571	83,614	84,334

Disclaimer

This document has been prepared by Landi Renzo S.p.A for use during meetings with investors and financial analysts and is solely for information purposes. The information set out herein 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 be held 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