Esprinet

Investor Presentation • Jun 27, 2019

COMPANY PRESENTATION

June 2019

Forward Looking Statement

This presentation may contain forward-looking statements that are subject to risks and uncertainties, including those pertaining to the anticipated benefits to be realized from the proposals described herein.

Forward-looking statements may include, in particular, statements about future events, future financial performance, plans, strategies, expectations, prospects, competitive environment, regulation, supply and demand.

Esprinet has based these forward-looking statements on its view and assumptions with respect to future events and financial performance. Actual financial performance could differ materially from that projected in the forward-looking statements due to the inherent uncertainty of estimates, forecasts and projections, and financial performance may be better or worse than anticipated.

Given these uncertainties, readers should not put undue reliance on any forward-looking statements.

The information contained in this presentation is subject to change without notice and Esprinet does not undertake any duty to update the forward-looking statements, and the estimates and the assumptions associated with them, except to the extent required by applicable laws and regulations.

1. THE COMPANY

2. THE INDUSTRY

3. THE STRATEGY

4. GOVERNANCE

5. FINANCIALS

6. INVESTMENT CASE

7. ANNEX

The Leading ICT Distri In Southern Europe

(*) Source: MBRES Mediobanca 2018

History

Key Historical Financials

NOTE: All figures in Million €

Sales Mix

Logistic Capability

#1 & Growing In A Growing Market

Ranking South Europe

		SALES 2018	SHARE	SALES 2017	SHARE	ITALY	SPAIN	PORTUGAL
1	Esprinet	3.571	24,4%	3.218	24,2%	•	•	•
2	Tech Data	2.559	17,5%	2.363	17,8%	•	•	•
3	Ingram Micro	1.910	13,0%	1.828	13,7%	•	•
4	Computer Gross	1.211	8,3%	1.065	8,0%	•
5	Arrow ECS	807	5,5%	716	5,4%	•	•
6	Attiva	361	2,5%	326	2,4%	•
7	MCR	338	2,3%	280	2,1%			•
8	CPC	320	2,2%	294	2,2%		•
9	Datamatic	305	2,1%	302	2,3%	•
10	GTI	194	1,3%	221	1,7%		•
11	Exclusive Networks	179	1,2%	159	1,2%	•	•
12	Brevi	176	1,2%	167	1,3%	•
13	JP Sa Couto	150	1,0%	133	1,0%		•
14	Inforpor	137	0,9%	108	0,8%			•
15	Depau	133	0,9%	108	0,8%			•
16	Globomatik	130	0,9%	118	0,9%			•
17	DMI	115	0,8%	112	0,8%			•
18	Cometa	97	0,7%	94	0,7%	•
	Others	1.967	13,4%	1.697	12,7%	•	•	•
	Totale	14.661	100%	13.307	100%	•	•	•

Sirmi - Channel Partner and company estimates

Human Resources

Consolidated 2018 end-year figures

THE INDUSTRY

Go To Market: Technology

(*) Italy-Spain-Portugal 2018 end-user market data at estimated distributor price – Source: EITO & Euromonitor

Go To Market: Suppliers

The vendors displayed are just a selection aimed at representing the product category

Go To Market: Customers

Size Of Addressable End User Market

7.447 7.215 7.361 7.185 6.982 5.273 5.358 5.425 5.369 5.434 16.912 17.061 16.637 16.435 16.620 9.273 10.063 10.499 10.775 10.987 0 5.000 10.000 15.000 20.000 25.000 30.000 35.000 40.000 45.000 2015A 2016A 2017A 2018A 2019E IT Clients Advanced Solutions Consumer Electronics (ex white goods) White goods 38,9 B€ 39,6 B€ 39,9 B€ 39,8 B€ 40,0 B€ Italy-Spain-Portugal: Total ICT Spending at distri price

EITO figures for IT Clients - Advanced Solutions & Smartphones - EUROMONITOR for other Consumer electronics End-user consumption converted to distri price assuming average 15% margin for resellers/retailers Conversion from Context panel sales to Total distri sales assuming Context Panel represents 95% of total consolidated distri sales 2019 end user market estimates by EITO & Euromonitor as of May 2019 2019 distri sales estimated using a flat growth of 5%

Weight Of Distris On Addressed Market

Italy-Spain-Portugal: Total ICT Spending and share of distributors

EITO figures for IT Clients - Advanced Solutions & Smartphones - EUROMONITOR for other Consumer electronics End-user consumption converted to distri price assuming average 15% margin for resellers/retailers Conversion from Context panel sales to Total distri sales assuming Context Panel represents 95% of total consolidated distri sales 2019 end user market estimates by EITO & Euromonitor as of May 2019 2019 distri sales estimated using a flat growth of 5%

Additional Opportunities In White Goods

9.273 10.063 10.499 10.775 10.987 39,5% 40,1% 45,2% 50,6% 53,0% 46,0% 48,0% 50,0% 52,0% 54,0% 56,0% 40.000 45.000 Italy-Spain-Portugal: Total ICT Spending and share of distributors (ex-white goods)

EITO figures for IT Clients - Advanced Solutions & Smartphones - EUROMONITOR for other Consumer electronics End-user consumption converted to distri price assuming average 15% margin for resellers/retailers Conversion from Context panel sales to Total distri sales assuming Context Panel represents 95% of total consolidated distri sales 2019 end user market estimates by EITO & Euromonitor as of May 2019 2019 distri sales estimated using a flat growth of 5%

Why A Distributor

ICT Distribution share on total ICT addressable sales grew from 39.5% (2015) to 50.6% (2018) and is forecasted to grow furthermore (53% expected in 2019).

The "Why" for Vendors

• Reduction of distribution fixed cost
• Buffering stock
• Credit lines & Credit collection capabilities
• Marketing capability
• Need of an aggregator of their products into complex multi-vendor solutions

The "Why" for Resellers

• Outsourcing of warehousing and shipping on their behalf
• One-stop-information gathering point
• One-stop-shopping opportunity
• Easiness of doing business against dealing directly with vendors
• No minimum quantity needed to be a valued partner

The "Why" for Retailers and E-Tailer

• "Fulfilment deals" with Vendors on top selling items
• Category management for accessories
• Home delivery capabilities for White Goods and Large TVs
• E-Tailers use Distributors as a one-stop-shopping for the "Long Tail" of products

Future

• A similar trend towards a "Distributor Friendly" environment is now under development White Goods
• «As a Service» models will require further more the capability of integrating in a single easy-to-use interface for resellers the Consumption models of multiple vendors

The Journey From Analog To Digital

• The End-user market is offering unprecedented opportunities of growth
• 5G introduction will be a game changer for multiple industries paving the way to new requests from both companies, governments and people
• The ICT industry will expand into new areas of business creating the need for players which can aggregate in an effective and efficient way multiple technologies and products
• The cost structure of distributors and the inherent flexibility demonstrated in years of adaptation to the changes in the market will offer us a unique opportunity of capitalizing these evolutions of the market

Inventory Risk Mitigants

«Stock Protection Clause»

• A typical contractual clause provided by the vast majority of Vendors in which they assume the risk of inventory devaluation arising from purchase list price reductions planned by the Vendor itself.
• During a contractual period which typically spans from 30 up to 60 days, the Vendor undertakes to reimburse, by issuing so called «Stock Protection Credit Notes», the loss of stock value incurred by the Distributor on the products in stock in the moment the same products are made available for purchase by the Vendor at a new, lower, purchase list price.

«Fulfilment deals stock protection»

• Vendors sometimes ask Distributors to act as providers of invoicing, credit collection and logistic fulfilment capabilities on sales negotiated directly by the Vendor with a Retailer or a Corporate Reseller. In this case, the Vendor might allow the Distributor to purchase products based on a sales forecast agreed upon between the Vendor and the Retailer/Corporate Reseller. When this kind of sales agreement happens, the Vendor might guarantee the Distributor, either contractually or customarily, that those products will be sold with a predefined margin, essentially shielding the Distributor from the inventory risks that might arise from the need of reducing the sales price or disposing of unsold products.

«Stock Rotation Clause»

• On specific product categories, i.e. software or pre-packaged services, Vendors sometimes provide «Stock Rotation Clauses». These are contractual agreements under which the Distributor is periodically allowed to ship back obsolete stock in exchange of new products of similar value.

Factoring & Credit Insurance Policies

Credit insurance

• Large and medium sized distributors routinely apply contracts with top-rated Credit Insurance Companies shielding the risk of default of debtors with deductibles typically between 10% to 15% of the insured value.

Factoring/Securitization programs

• Trade receivables might be sold "without-recourse" to factoring entities or conduits of a trade receivables securitization program, typically major commercial banks but sometimes Vendor financing companies as well. When factoring/securitization happens, being a true-sale, no deductibles are involved and the credit risk is entirely transferred to the factoring company

Risk taking

• Sometimes distributors might takes some credit risk on their books by issuing a Credit Limit that exceeds the value of the Credit Insurance coverage.

Impact of Factoring/securitization on the financial statements

• Trade receivables that are sold to a factoring company or to the conduit of the Securitization Program are deconsolidated from the Balance Sheet and the cost of the factoring or securitization is normally charged by distributors above the EBIT line
• When a true-sale of receivables happens under the Factoring or Securitization programs, the DSO of these programs is typically 10 to 15 days, the average time to sell the receivables and cash the proceedings from the factoring companies.
• Recipients of factoring or securitization schemes are typically Retailers or Corporate Resellers with good credit ratings which typically would imply a higher DSO, still this converts into a lower DSO because of the reduced amount of receivables in the balance sheet.

Gross Profit Drivers

Product categories

• Commoditized product categories, such as Notebooks or Smartphone, typically allow for lower Gross Profits Margins as compared to more complex products such as many "Advanced Solutions" products

Vendor relative strength

• Highly known vendors with a strong brand recognition or with a big market share within a distributor tend to provide less Gross Profit Margins
• Vendors typically provide cash discounts for shorter payments so Gross Profit Margins are normally higher in case of shorter DPOs

Customer relative strength

• Customers with a strong position in the market, such as the largest retailers or Corporate Resellers, typically get better pricing and therefore allow for lower Gross Profit Margins
• Receivables with these customers are typically subject to factoring/securitization programs whose costs impacts the Gross Profit margin

Market Development Funds or Co-Marketing funds

• Most Vendors allocate at Country level marketing funds that are available for those distributors that develop the most effective marketing programs. Size matters and market coverage as well, and that is one of the key reasons for achieving scale in each geography, so that a larger proportion of these marketing funds is achieved and lower marketing costs incurred.

High levels of stock

• Even if Distributors are broadly shielded by Vendors in case of excess or obsolete stock, if the levels are exceedingly high or the Vendor enters a major crisis the costs of the allowance for obsolete stock might go on the Distributors books impacting the Gross Profit

Credit Notes

The Industry operates with a significant amount of Credit Notes accruals at any given end-period

• Vendors routinely operate with commercial programs that envisage significant amounts of price adjustments for multiple reasons such as:
• End-period accruals for target achievements
• Stock protection
• Pass through
• Customers as well are entitled to price adjustments such as:
• End-period accruals for target achievements
• Pass through
• Co-marketing funds

Accounting treatment

• At any given quarter-end accruals are made to account for the credit notes pending reception from Vendors and credit notes pending issuing to customers
• According to the Group accounting policies periodically, typically at year end, a revision of the old accruals is done and the adjustments booked to the Gross Profit of the period
• Historically, given the accounting policies in place, this effect is positive and contributes to a spike in Gross Profit margins at year end.

THE STRATEGY

The Key Trends In Our Industry

Gross Profit Opportunities

The emergence of the «XaaS» (Everything as a Service) business model 1

The industry is undergoing a transformation with the growth of "As a Service" or "Consumption" based utilization models against traditional "Transactional" model

Typical "As a service" models include

• Cloud Computing, both in the form of Infrastructure as a Service (IaaS) as well as Software as a Service (SaaS)
• Managed Print Services, in which customers buy the right to print a certain number of "pages" through printers which are at their premises but not under their ownership
• "Device as a Service", a broader concept in which a "seat" typically comprising a notebook and/or a smartphone is leased on a monthly or multi-period base

More and more ICT Distributors are acting as aggregators of such contracts from multiple providers, effectively switching from moving boxes in a warehouse to moving data & contracts in an IT system.

Selling "As a service" contracts will reduce the impact of working capital needs, because no physical goods must be purchased and stocked, and will add predictability to the ICT Distributor revenues

Some ICT Distributors might became providers as well, buying devices which will stay in their balance sheet as fixed assets and leasing them under these «consumption» model agreements to resellers which can sub-lease them, packaged with some services provided by them, to end-users

Gross Profit Opportunities

Vendors focusing on winning the IP war and outsourcing everything else 2

There is a growing number of examples of Vendors focusing on key technologies:

• IBM: sold Printers, PCs & Servers and focused on Services, Cloud and A.I.
• HP: Split into HP Inc (PCs & Printers) and HPE (Advanced Solutions)
• HPE: spun off its Software and Services division focusing only on Hardware
• Samsung: Divestiture of PCs & sale of printer division to HP Inc
• Microsoft: Divestiture of smartphones
• Xerox: Split into two entities, one active in services and one in printing
• Acer: Divestiture of smartphones and focus on PCs

Patents are a growing barrier to entry in specific markets so Vendors focus on few technologies where they pile up IP to defend themselves from competitors

This drives a growing need of positioning their products within complex solutions while facing growing pressure for SG&A reduction from their investors

As a consequence there is a growing request of outsourcing of non-core support activities

Distribution, after-sales support, logistics and even sales promotion is more and more outsourced to distribution partners or service companies

Gross Profit Threats

The migration from «pure» brick&mortar or «pure» onliners to «omnichannel» retailers 3

Retailers are struggling to cope with the pure on-liners competition and are in the middle of journey to provide a comprehensive «omnichannel experience» to their customers

During the transition many traditional retailers are putting extraordinary pressure on suppliers to fund the journey to a new business model

The transition is putting pressure on their top-line as well as on their profitability and is driving a round of consolidation in this segment of the industry

The survivors will be forced to develop a new set of logistic capabilities in order to deliver products to the homes of the consumer, offering an opportunity for distributors which typically have extensive know-how in this activity

The new "omnichannel" retailer will handle a longer-tail of products where distributors can get better margins against the existing low-margin mix of few high-rotation items

The in-store experience will change and distributors will be offered opportunities to be part of the eco-system providing added value services such as category management and merchandising at shop floor level

Gross Profit Threats

PCs and smartphones, the two ICT product lines with higher sales volumes, have witnessed modest innovation in the last years and therefore margins for the manufacturers decreased

Gross profit opportunities could arise from a disruptive round of innovation at the moment not yet foreseeable.

The printing eco-system (printers+supplies) is undergoing a structural volume reduction but new print technologies as well as business models (Managed Print Services) are somehow stabilizing margins

The market of these traditional product lines is overdistributed and this is putting short term further pressure on gross profit margins whilst offering opportunities mid-term

Economy of scale are needed to cope with high volumes-low margin sales in these categories, favouring a further round of consolidation in the distribution industry

Distributors are also implementing more efficient working capital management in order to seek value creation opportunities in the balance sheet rather than in the P&L

Advanced Solutions are less prone to commoditization because of the intrinsic higher content of IP and differentiation, effectively shielding these categories from an excessive pressure on gross profit margin reduction

The fast commoditization of key product categories

4

Operational Trends

5 The growing «consumerization» of professional customers service-level expectations

The employees of Resellers and Retailers are exposed everyday to the interaction with companies such as Amazon, Starbucks, Apple that are using amazing levels of customer experience as a competitive advantage

More and more they expect the same level of excellence in the quality of service when interacting with suppliers during their work hours

Customer experience is no longer a «bonus» but a «must» to compete

Same day delivery is now a "given" and no longer a bonus

The full integration of social communication tools with traditional office solutions such as email or ERP is expected

Real time response to enquiries is the «de-facto» standard required to compete effectively

On-line solutions must be designed to match web experiences on top-rated consumer sites

Mobile access to data is now a given

Summary Of Key Market Assumptions

Esprinet Current Positioning

		Italy	Spain	Portugal
	IT Clients
PORTFOLIO	Advanced Solutions
	Consumer Electronics
	Resellers
MARKET COVERAGE	Specialized Channel
	Retailers & E-tailers
	IT Clients
MARKET	Advanced Solutions
SHARE	Consumer Electronics

The Strategy

Aim at being the best distributor in the region for all stakeholders by:

• Getting recognized as provider of the best Customer Satisfaction in the region
• Leveraging the size in Italy and Spain to improve ROCE on IT Clients & Consumer Electronics
• Pushing for an higher weight of Advanced Solutions sales
• Achieving size in Portugal

Riding the mid-term evolution of the market by:

• Developing a state-of-the-art «XaaS» strategy
• Developing further Outsourcing initiatives for Vendors and Customers
• Pushing on Distri adoption by the White goods manufacturers
• Be ready to enter potential new markets such as Robotics, A.I., Electrical Mobility, 3D Printing

Actions: Be The Best

Getting recognized as provider of the best Customer Satisfaction in the region

A redesign of procedures and incentive schemes aimed at measuring and sharply improving the level of Customer Satisfaction raising the «cost of switch» for customers therefore positively impacting Gross profits and revenues

Better gross profit margin on existing customers

Leveraging the size in Italy and Spain to improve ROCE on IT Clients & Consumer Electronics

New procedures, tools and incentive schemes aimed at focusing teams on better Working Capital management

Leveraging achieved size and push for better opportunities with vendors/customers in a consolidating market

Better working capital on existing combinations of Vendor/Customer

Pushing for an higher weight of Advanced Solutions sales

V-Valley Europe concept: move from two local Distri to a perceived multinational Advanced Solution distri to get new contracts and grow in this higher margin market

Better mix driving sales of higher gross profit margin products

Achieving size in Portugal

Invest in people and in warehousing capabilities to capture organic-growth opportunities offered by selected Vendors

Grow in the region also by acquisitions in order to complete the coverage of the market

Top line growth driver and consolidation of leadership in the Iberian region

Actions: Riding The Mid-Term Trends

Developing a state-of-the-art «XaaS» strategy

Invest further more in the programs already existing leveraging our web-portal to provide not only a onestop-shopping opportunity for physical goods but an aggregator for IaaS, SaaS, MPS and Device as a Service contracts as well

Better gross profit margin and better predictability of revenue streams

Developing further Outsourcing initiatives for Vendors and Customers

Grow the high margin logistic outsourcing activities already in place as well as the tools to enable mid-size retailers as well as professional resellers to establish an «omnichannel» strategy

Higher EBIT margin activities driving better grip on Vendors/ Customers

Pushing on Distri adoption by the White goods manufacturers

A 10B€ market opportunity mostly direct where we are piloting with some vendors new distribution models similar to the ICT ones

Opportunity of Top line growth on higher gross margin products

Be ready for potential new markets: Robotics, A.I. Electrical Mobility, 3D Print

Long term developments offer potential opportunities in these markets

Begin assessing potential distribution scenarios

Begin testing distribution of 3D printing and Electrical mobility

Potential future developments for Top line and EBIT margin growth

GOVERNANCE

Mission & Corporate Values

Corporate Mission

To be the best technology distributor operating in its relevant markets, assuring shareholders above-average return on investment thanks to precise, serious, honest, fast-footed, reliable, and innovative management of the customer and vendor relationship, achieved by closely attentive enhancement and exploitation of its staff's skills and innovative capabilities.

Our Strengths

• Multidivisional organization to face different needs for different clients
• Flexibility to offer to our vendors and customers
• Highly experienced and focused people on tangible key value drivers
• Web engine and own ERP created
• Focus on creating new services to help dealers to do business

Management

Maurizio Rota, was born in Milan on 22 December 1957. After early professional experience as Sales Supervisor for companies operating in the Information Technology field, he founded Micromax in 1986, serving as the Company Chairman. He developed and consolidated the company up to 1999, focusing in particular on relations with major manufacturers, and making a decisive contribution to the implementation of the company's business strategies. Following the formation of Esprinet in the year 2000, as a result of the merger of the companies Celo, Micromax and Comprel, he served as Managing Director and later as Vice Chairman and Chief Executive Officer. Mr. Rota is the Chairman of the Esprinet Group.

Maurizio Rota Alessandro Cattani

Alessandro Cattani, was born in Milan on 15 August 1963. After completing his degree in electronic engineering at Politecnico in Milan, he earned a MBA ("CEGA" at the Bocconi University in Milan). He began his professional career in the holding company of an Italian industrial group where, until 1990, he served as Executive Director of the company which had the task of managing the group's information technology. From 1990 to 2000 Mr. Cattani worked in a consulting company. Since November 2000 he has been serving Esprinet as Chief Executive Officer of the Group.

Board Of Directors

NAME	POSITION	EXECUTIVE	INDEPENDENT	STRATEGY COMMITTEE	CONTROL AND RISK COMM.	REMUNERATION AND APPOINTMENT COMM.	COMPETITIVENESS AND SUSTAINABILITY COMM.
Maurizio Rota	Chairman	•		•			•
Alessandro Cattani	CEO	•		•			•
Valerio Casari	Director & CFO	•		•			•
Marco Monti	Director			•
Matteo Stefanelli	Director			•			•
Tommaso Stefanelli	Director			•			•
Mario Massari	Director		•		•	•
Chiara Mauri	Director		•			•
Cristina Galbusera	Director		•		•	•
Emanuela Prandelli	Director		•
Ariela Caglio	Director		•
Renata Maria Ricotti	Director		•		•

Code & Principles

Code of Etics

The Code of Ethics applies to all activities carried out by or in the name and on the behalf of Esprinet S.p.A. and its subsidiaries.

The Code of Ethics:

• establishes the guidelines of conduct and regulates the set of rights, duties and responsibilities that the Group expressly assumes with its stakeholders;
• defines the ethical criteria adopted for a correct balance between expectations and stakeholder interests;
• contains principles and guidelines for conduct in areas of potential ethical risk.

Code of Conduct

The Esprinet Group wishes to establish trade relations with its vendors and business partners based on transparency, correctness and business ethics. The development of transparent and lasting relationships with vendors, attention to quality, safety and respect for the environment and compliance with existing regulations are objectives to be pursued with a view to consolidating the value created in favour of stakeholders.

Therefore, in connection with the Code of Ethics adopted by Esprinet S.p.A. and its subsidiaries, the Group has defined a Code of Conduct designed to guide relations throughout its supply chain.

"231" Organisation Model

This document, entitled "Organisation and Management Model pursuant to "Legislative Decree 231/2001" (hereinafter called "the Model"), has been drawn up to implement the terms of ss. 6.1.a and 6.1.b, 6.2, 7.2 and 7.3 of Legislative Decree no. 231 of 08.06.2001 (hereinafter called "the Decree").

The Model is the management reference document which institutes a corporate prevention and control system designed to prevent the offences specified in the Decree from being committed.

The Ethical Code enclosed summarizes the values, correctness and loyalty by which the Esprinet Group is inspired and constitutes the base of our Organizational, Administrative and Control Models. The Code has been adopted by the company in order to prevent any occupational hazards or risks in view of the D. Lgs. 231/2001 law.

On September 11th 2018 the companies Board of Directors accepted a new and updated version of the Organizational, Administrative and Control Models which substitutes the previous version approved on June 1st, 2017.

Star Requirements

Esprinet Spa listed in the STAR Segment* voluntarily adhere to and comply with strict requirements

Major requirements for shares to qualify as STAR status

Esprinet is fully compliant(1) with the Code of self-discipline (Corporate Governance Code).

(1)With minor exceptions which are explained as permitted by the Code in the "Corporate Governance" section of the society

• High transparency, disclosure requirements and liquidity (free float of minimum 35%)
• Corporate Governance in line with international standards
• *The market segment of Borsa Italiana's equity market (MTA-Mercato Telematico Azionario). Dedicated to mid-size companies with a capitalization less than 1.0 euro/bln
• Interim financial statements available to the public within 45 days from the end of first, third and fourth quarter
• Make the half-yearly report available to the public within 75 days of the end of the first half of the financial year
• Favourable auditor's report on their latest individual and consolidated annual financial statements
• Consolidated annual financial statements not challenged by Consob
• Bi-lingual publication on the websites
• Mandatory presence of a qualified investor relator and a "specialist"
• Adoption of the models provided for in art. 6 of Leg Decree 231/2001
• Application of Corporate Governance Code
• Additional requirements in the article 2.2.3 of Borsa Italiana guidelines

Shareholders

Significant Investments in Share Capital

DECLARANT	DIRECT SHAREHOLDER	% ON ORDINARY CAPITAL	% ON VOTING CAPITAL
Francesco Monti	Francesco Monti	15.709%	15.70%
Giuseppe Cali	Giuseppe Cali	11.253%	11.25%
Albemarle Asset Management Limited	Albemarle Funds PLC Albemarle Alternative White Rhino Funds PLC	5,961%	5,96%
Paolo Stefanelli	Paolo Stefanelli	5.069%	5.06%
Maurizio Rota	Maurizio Rota	5.231%	5.23%
Stefanelli Tommaso	Stefanelli Tommaso	1.69%	1.69%
Stefanelli Matteo	Stefanelli Matteo	1.59%	1.59%
Cattani Alessandro	Cattani Alessandro	1.29%	1.29%

Italian Stock Exchange (PRT) Number of shares: 52.4 million Average volume of 225.875 shares per day Number of shares owned by the Company: 2,19%

Social Responsibility Report

FINANCIALS

Profit & Loss

(euro/mln)		Q1 2019 (1)		Q1 2018 (1)	Var. %		FY 2018 adj. (2)
Sales	875,5	100,00%	781,3	100,00%	12%	3.571,2	100,00%
Cost of sales	(834,7)	-95,34%	(742,3)	-95,01%	12%	(3.398,7)	-95,17%
Gross Profit	40,8	4,66%	39,0	4,99%	5%	172,5	4,83%
Operating costs	(34,5)	-3,95%	(33,6)	-4,30%	3%	(131,5)	-3,68%
EBIT	6,3	0,72%	5,4	0,68%	17%	41,0	1,15%
D&A	1,2	0,14%	1,2	0,16%	-1%	3,3	0,09%
EBITDA	7,5	0,85%	6,6	0,84%	14%	44,3	1,24%
Finance costs - net	(1,5)	-0,17%	(0,7)	-0,09%	114%	(4,5)	-0,13%
Profit before income taxes	4,8	0,54%	4,6	0,59%	2%	36,4	1,02%
Income taxes	(1,4)	-0,16%	(1,2)	-0,16%	12%	(9,3)	-0,26%
Net income	3,4	0,39%	3,4	0,44%	-1%	27,1	0,76%
Tax rate	29%		26%			26%

NOTES

(1) Excluding effects of newly introduced IFRS 16 leases standard.

(2) Net of non-recurring items.

Q1 2019

• Reported net sales at 875.5 M€ increased +12% compared to the prior-year quarter (94.2 M€).
• Gross profit up +5% at 40.8 M€.
• Operating costs growing at a lower growth rate than sales.
• EBIT at 6.6 M€ increased +17% compared to the prior-year quarter.
• EBIT % improved 1bps from prioryear quarter.
• PBT burneded by exchange losses of 0.7 M€ whereas interest espenses were rahter stable.
• Net income of 3,4 M€ (-1%).

Balance sheet highlights

	excl. IFRS 16	post IFRS16
(euro/mln)	31.03.19	31.12.18	31.03.19
Net operating working capital	409,3	10,4	409,3
Goodwill	91,0	90,6	91,0
Other fixed assets	29,9	27,9	108,3
Other current assets/liabilities	1,6	(12,7)	1,6
Other non-current assets/liabilities	(15,7)	(14,4)	(15,7)
Net invested capital	516,0	101,9	594,5
Long-term financial liabilities	44,5	12,8	44,5
Short-term financial liabilities (1)	200,1	138,3	200,1
Lease liabilities	-	-	78,4
Debts for investments in subsidiaries	1,5	1,1	1,5
Cash and cash equivalents	(56,5)	(381,3)	(56,5)
Other	(20,5)	(11,9)	(20,5)
Net financial debt	169,1	(241,0)	247,5
Net equity	347,0	342,9	347,0
Total sources	516,0	101,9	594,5

BS at March 31, 2019

• At March 31, 2019 the Group's net equity was 347.0 M€.
• At the same date the Group had 91.0 M€ of goodwill resulting in a Net tangible equity of 256.0 M€.
• Net financial debt evolution from December 31, 2018 not significant due to working capital strong volatility.
• The first adoption of the new IFRS 16 Leases led to the accounting of Lease liabilities for 78.4 M€.

NOTES

(1) Includes 72,1 eu/mln as at 31.12.18 and 57,6 eu/mln as at 31.03.19 reclassified from long-term debt due to covenant breach on Syndicated Senior Term Loan.

Working capital metrics

Idays (Inventory Days): 4-qtr average of (quarter-end Inventory / quarterly Sales * 90)

DSO (Days of Sales Outstanding): 4-qtr average of (quarter-end Trade Receivables / quarterly Sales * 90)

DPO (Days of Purchases Outstanding): 4-qtr average of (quarter-end Trade Payables / quarterly Cost of Sales * 90)

Profit & Loss – IFRS 16 reconciliation

				post IFRS16
(euro/mln)	Q1 2019 (1)		adj.	Q1 2019 (2)
Sales	875,5	100,00%		875,5	100,00%
Cost of sales	(834,7)	-95,34%		(834,7)	-95,34%
Gross Profit	40,8	4,66%	-	40,8	4,66%
Operating costs	(34,5)	-3,95%	0,5	(34,1)	-3,89%
EBIT	6,3	0,72%	0,5	6,7	0,77%
D&A	1,2	0,13%	2,4	3,6	0,41%
EBITDA	7,4	0,85%	2,9	10,3	1,18%
Finance costs - net	(1,5)	-0,17%	(1,0)	(2,6)	-0,29%
Profit before income taxes	4,8	0,54%	(0,6)	4,2	0,48%
Income taxes	(1,4)	-0,16%	0,1	(1,3)	-0,14%
Net income	3,4	0,39%	(0,4)	2,9	0,33%

Tax rate 29% 30%

IFRS 16: P&L impact

• The first application of IFRS 16 Lease determined an increase of EBIT of 0.5 M€ and a more significant increase of EBITDA from 7.4 M€ to 10.3 M€.
• The effect on EBITDA was due to the total amount of operating lease (2.9 M€) shifting from operating costs to below EBITDA.
• Negative effect at PBT level (-0.6 M€) was due to the negative difference between operating leases and the repayment of principal plus interests on lease liabilities.

Cash flow generationn

	(euro/mln)	Q1 2019	Q1 2018
	Cash flow generated from operations	10,7	6,6
	Cash flow provided by (used in) changes in working capital	(417,3)	(268,9)
	Other cash flow provided by (used in) operating activities	(2,0)	(0,1)
	Cash flow provided by (used in) operating activities	(408,6)	(262,4)
(+)	Cash flow provided by (used in) investing activities	1,3	2,0
(+)	Cash flow provided by (used in) financing activities	(3,2)	0,0
(=)	Net (increase)/decrease in net financial debt	(410,5)	(260,4)
	Net financial debt (cash) at beginning of period	(241,0)	(123,1)

Net financial debt (cash) at end of period 169,4 137,4

• Cash flow generated from operations was 10.7 M€.
• «Apparent» working capital absorption, due to huge swing between year-end and first quarterend, is not suggestive of real change in average capital employed.

Return on Capital Employed

(euro/mln)	TTM ended March 31		TTM ended December 31
TTM (1) Net Operating Profit After Tax (NOPAT)	2018	2019	2017	2018
EBIT (2)	37,3	41,9	36,7	41,0
Income taxes on EBIT (3)	-9,5	-10,7	-9,4	-10,5
NOPAT	27,8	31,2	27,3	30,5
Net operating working capital (5-qtr end average)	307,1	288,3	250,1	227,0
Net fixed assets (5-qtr end average)	104,3	94,7	108,0	96,2
Total average Invested Capital	411,3	383,0	358,0	323,2
ROCE	6,7%	8,1%	7,6%	9,4%

NOTES

(1) Trailing Twelve Months is abbreviated as TTM.

(2) Net of non-recurring items; excluding effects of newly introduced IFRS 16 leases standard.

(3) Income taxes on EBIT are calculated using FY 2018 effective tax rate of ~26%.

INVESTMENT CASE

Investment highlights

• A sizable and growing 14.6 B€ addressable market (*)
• IT distribution gaining share on total IT spending (from 39.5% to 53.0% (*))
• Strong asset protection mechanisms and very low SG&A on sales for distributors

Value creation driven

• Customer satisfaction to drive profitability growth
• Leveraging size on existing low ROCE businesses
• Solid track record of growth in the higher profitability segment of Advanced Solutions

Strong positioning

• Strong leadership in southern Europe: 24.4% share against 17.5% of #2 (*) 1 2
• Growing share from 23% to 24.4% (*)
• 20+ years of profitability

Strong investor focus

• Historical stable flow of profitability even in market downturns
• Strong working capital discipline to enable a 25% pay-out dividend policy 3 4
• ROCE as the guiding "mantra" to create value

Financial Targets

• FY 2019E EBIT expected in the range 38-42 M€, with a strong growth against "as reported" FY 2018
• Progressive improvements in working capital management

2019 2020 on

• Moderate top-line growth in future years as focus keeps being ROCE performance
• Improvements in Gross Profit % as result of mix and customer satisfaction initiatives
• Further improvements in working capital management
• 2020 ROCE steadily above Weighted Average Cost of Capital (approx. 8.5%)

Share buy-back program

Key Facts

• Share buy-back program in application of the authorization granted by the AGM on May 8th, 2019
• Proposal for reduction of total number of outstanding shares to be brought to 2020 AGM

Timetable

• Start: 1st week of July 2019
• End: March 31st, 2020

Repurchasable amounts

• Max purchasable total amount: 1.47 million of shares on total 52.40 million (2.81%)
• Max daily amount of purchases: up to 25% of total daily trading