Aquafil Group

Financial Results I Quarter 2019

14th May 2019

This document has been prepared by Aquafil S.p.A. ("Aquafil" or "Company") solely to introduce the Company and its business.

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Index

1. I Quarter 2019 Highlights

REVENUES1 (€/mil)			NET RESULT (€/mil)	N.F.P. (€/mil)
	Q1		Q1		Q1
Act19	145,3	Act192	19,1	Act19	7,7	Mar192	213,3
Act18	140,8	Act18	22,3	Act18	9,8	Dic18	157,3
% Var 18 to 17	3,2%	% Var 18 to 17	-14,2%	% Var 18 to 17	21,9%
	Revenues Q119 Area Asia Pacific + 46,8% driven by increase of Product Line BCF due to the full consolidation of Invista acquisition			Revenues Q119 Area North America + 38,0% driven by increase of Product Line BCF due to the growth of automotive sector		Revenues Q119 Area EMEA - 10,7% mainly due to market slowdown of BCF product
	Marginality reduction in Q119 vs Q118 mainly due to: planned EU Operation support to North American market + Slowdown EMEA BCF Mkt			ECONYL® branded products + 8,0% vs I Quarter 2018 and equal to 37,5% of fiber turnover		IFRS16 First Time Adoption Q1 2019 EBITDA +1,5 €/mil D&A +1,4 €/mil N.F.P. +28,5 €/mil

¹ The Revenues include IFRS15 effects;

² First time adoption of IFRS16 is included in EBITDA of Q1 2019 (+1,5 €/mil) and in N.F.P. of Q1 2019 (+28,5 €/mil)

2. Key Performance Indicators

The Key Performance Indicators of Aquafil Group of Q12019 compared with same period of 2018 are here reported:

KPI	Q1	Q1	Δ
	2019 - Act	2018 - Act	%
Revenues €/mil	145,3	140,8	3,2%
EBITDA €/mil	19,1	22,3	-14,2%
EBITDA Margin %	13,2%	15,8%
EBIT Adj €/mil	11,0	15,9	-30,6%
EBIT Adj Margin %	7,6%	11,3%
EBIT €/mil	9,1	14,5	-37,5%
EBIT Margin %	6,3%	10,3%
EBT €/mil	9,6	12,4	-23,1%
EBT Margin %	6,6%	8,8%
Net Result €/mil	7,7	9,8	-21,9%
Net Result Margin %	5,3%	7,0%
	31 Mar	31 Dec	Δ
	2019	2018	%
NFP €/mil	(213,3)	(157,3)	35,6%

a) Revenues grow by 3.2%, amounting to €145.3 million compared to €140.9 million of Q118 (after IFRS15), as a result of (a) sale increase of BCF product in Asia and USA, partially compensated by EMEA slowdown and (b) reduction of Polymer sold due to in-house use to produce fiber.
b) EBITDA decreases to 19.1 €/mil (including positive effect of 1.5 €/mil of IFRS16) from €22.3 million of first quarter 2018 mainly due to EU operations support to US market, slowdown of BCF EMEA market and start-up costs of ARC#1 (Phoenix). EBITDA margin decreases to 13,2% (15,8% in first quarter 2018) due to same reasons that affected EBITDA.
c) Net Result of first quarter 2019 amounted to €7,7 million, decreasing by 21,9% compared to first quarter 2018 (€9.8 million). Reduction is related to lower EBITDA, the increase of depreciations and the higher financial incomes and exchange gains of period.
d) Net Financial Position amounted to €213.4 million, compared to €157.3. Variation is mainly attributable to:
1. IFRS16 first time adoption (+28,5 €/mil);
1. the net investments (ca 18,6 €/mil) that include capacity increase in US and China, ECONYL® investment program and ACR#s;
1. an higher level of Net Working Capital (ca 19,2 €/mil), derived from Q1 2019 higher sales compared to Q4 2018.

2a. Focus on Sales

The comparison of amount and percentage of Revenues, broken down by Line of Product realized in first quarter 2019 vs the same period of 2018 is here reported:

BCF Product line's sales increase in Q1 2019 (9,7,%) compared to the same period of 2018 due to increase of sold quantity in Asia Pacific area mainly derived from Invista acquisition, in North America due to increase of the automotive application partially limited by EMEA reduction.

NTF Product line's sales increase in Q1 2019 (2,6%) compared to the same period of 2018 as effect of selling price increase.

Polymers line's sales decrease in Q1 2019 (-32,9%) mainly due to the in-house use of polymers to produce fiber for US market.

The comparison of amount and percentage of Revenues, broken down by Geographical Area realized in Full Year and Fourth Quarter 2018 vs the same period of 2017 is here reported:

Fatturato (€/mil)	Q1	Q1	Δ	Δ %
Area Geografica	2019	2018	Val
Italy	29,6	33,8	(4,1)	-12,2%
EMEA(*)	61,6	69,0	(7,4)	-10,7%
North America	30,7	22,3	8,5	38,0%
Asia e Oceania	23,2	15,8	7,4	46,8%
RoW	0,2	0,0	0,2	-
TOTAL	145,3	140,8	4,5	3,2%

Italian revenues decrease (12,2%) in the first quarter 2019 compared with same period of 2018 mainly as effect of reduction of revenues of Polymers Product Line due the in-house use to produce fiber.

EMEA revenues, excluding Italy, decreased in first quarter 2019 (-10,7%) compared with same period of 2018 mainly due to the slowdown of BCF Product Line European market.

North American revenues compared with same period of 2018, grow in first quarter 2019 (+38,0%) driven by the BCF Product Line increase in automotive application due to a competitor disengagement.

Asia and Oceania revenues grow in first quarter 2019 (+46,8%) compared with same period of 2019 for BCF Product Line growth derived from the consolidation of Invista acquisition.

The Group's revenues of ECONYL® branded products are growth of 8,0% in the first quarter 2019 compared to same periods of 2018.

The Group's revenues of ECONYL® branded products in first quarter 2019 has been equal to the 37,5% (38% in first quarter 2018) of total fiber revenues.

3. Aquafil Group at Glance

Pioneers of circularity with ECONYL®:
An unique Regeneration System to produce sustainable fiber and polymers from nylon 6 waste;
High barriers to entry for technology and reverse supply chain;
Turnover of product branded ECONYL® equal to 37,5% of fiber turnover – CAGR 2016/2018 equal to 14,0%
Market Leader in Nylon (PA):
Fiber for Carpet flooring (BCF Product);
Fiber for Fabrics (NTF Product);
Polymers for engineering plastics;

• A successful business model based on

Proprietary technology with continuous innovation;
R&D focus for a uniquely diversified commercial offer;
Manufacturing and operational excellence;
Focus on high-end segments for a premium positioning;
A Global footprint with proximity to Clients
Manufacturing presence in 8 countries
2.813 employees at the end of 2018;
€555,2m of Revenues in FY2018 - 528,3m FY17;
€77,9m EBITDA in FY2018 - 73,8m EBITDA in FY17
Entrepreneurial talent and strong management team

1965

1988

Establishment of Aquafil Engineering in Germany

Aquafil foundation

USA

Cartersville (Georgia) Aquafil USA 1 & 2

Phoenix (Arizona) Aquafil Carpet Recycling #1

Sacramento (California) Aquafil Carpet Recycling #2

ITALY

Arco (TN) Aquafil (Headquarter)

Cares (TN) Rovereto (TN) Tessilquattro

CHINA

Jiaxing Aquafil Jiaxing

THAILAND

Rayong Aquafil Asia Pacific

GERMANY

Leuna Aqualeuna

UK

Kilbirnie Aquafil UK

SLOVENIA

Ljubljana AquafilSLO Ljubljana

Senozece AquafilSLO Senožeče

Store AquafilSLO Štore

Ajdovščina AquafilSLO Ajdovščina

CROATIA

Oroslavje Aquafil CRO

100% regenerated & regenerable nylon
Unique proprietary technology
37% of Aquafil Fiber Turnover 2018

WWW.ECONYL.COM

4. Full Year and IV Quarter 2018 Financial Statement

RECONCILIATION FROM NET PROFIT TO EBITDA	First	First
€/000	Quarter 2019	Quarter 2018
Net Profit (Including Portion Attr. to Minority )	7.696	9.850
Income Taxes	1.880	2.598
Amortisation & Depreciation	8.038	6.072
Write-downs & Write-backs of intangible and tangible assets	34	300
Financial items (*)	379	3.093
No recurring items (**)	1.086	366
EBITDA	19.113	22.279
Revenue	145.328	140.807
EBITDA Margin	13,2%	15,8%

First	First
Quarter 2019	Quarter 2018
19.113	22.279
8.038	6.072
34	300
11.041	15.907
145.328	140.807
7,6%	11,3%

(*) The financial items include: (i) financial income of Euro 1.1 million at the end of March 2019 (ii) financial charges of Euro 1.6 million at the end of March 2019, compared to Euro 1.4 million at the end of March 2018, (iii) cash discounts of Euro 0.9 million at the end of March 2019, compared to Euro 1.0 million at the end of March 2018, and (iv) exchange gains of Euro 1.0 million, against losses of Euro 0.7 million.

(**) This includes (i) non-recurring charges related to the expansion of the Aquafil Group and other corporate transactions for Euro 0.5 million and 0.2 million respectively in the periods ending March 31, 2019 and March 31, 2018, (ii) other non-recurring charges of Euro 0.6 million and Euro 0.1 million respectively in the periods ending March 31, 2019 and March 31, 2018.

CONSOLIDATED INCOME STATEMENT	First Quarter	of wich	First Quarter	of wich
€/000	2019	non-current	2018	non-current
Revenue	145.328		140.807
of which related parties	17		141
Other Revenue	601	76	1	1
Total Revenue and Other Revenue	145.929	76	140.808	1
Raw Material	(77.154)	(100)	(73.112)	(2)
Services	(24.781)	(803)	(23.368)	(204)
of which related parties	(103)		(893)
Personel	(26.712)	(139)	(25.589)	(142)
Other Operating Costs	(595)	(119)	(480)	(19)
of which related parties	(18)		(17)
Depreciation and Amorti zation	(8.038)		(6.072)
Provi s ions and Write-downs	(34)		(300)
Capitalization of Internal Construction Costs	471		2.644
EBIT	9.086	(1.086)	14.530	(366)
Other Financial Income	1.091	1.082	16
Interest Expenses	(1.562)		(1.377)
of which related parties	(66)
FX Gains and Losses	961		(722)
Profit Before Taxes	9.576	(4)	12.448	(366)
Income Taxes	(1.880)		(2.598)
Net Profit (Including Portion Attr. to Minority )	7.696	(4)	9.850	(366)
Net Profit Attributable to Minority Interest	0		23
Net Profit Attributable to the Group	7.696		9.827
Basic earnings per share	0,15		0,19
Diluted earnings per share	0,15		0,19

CONSOLIDATED BALANCE SHEET	At March 31,	At December 31,
€/000	2019	2018
Intangible Assets	16.551	15.992
Tangible Assets	203.663	189.661
Right of Use	27.496	-
Financial Assets	401	404
of which related parties	79	79
Other Assets	2.191	2.189
Deferred Tax Assets	6.840	7.841
Total Non-Current Assets	257.143	216.087
Inventories	189.081	189.678
Trade Receivable	43.924	34.046
of which related parties	54	66
Financial Current Assets	2.475	2.878
Current Tax Receivables	725	451
Other Current Assets	15.714	14.297
of which related parties	1.947	1.859
Cash and Cash Equivalents	70.466	103.277
Total Current Assets	322.385	344.627
Total Current Assets	579.528	560.714
Share Capital	49.722	49.722
Reserves	94.073	62.969
Group Net Profit for the year	11.548	31.119
Group Shareholders Equity	155.344	143.810
Net Equity attributable to minority interest	1	1
Net Profit for the year attributable to minority interest	(0)	0
Total Sharholders Equity	155.345	143.811
Employee Benefits	5.627	5.702
Non-Current Financial Liabilities	237.333	224.345
of which related parties	9.521	-
Provisions for Risks and Charges	1.140	1.169
Deferred Tax Liabilities	3.803	3.582
Other Payables	11.174	11.833
Total Non-Current Liabilities	259.077	246.631
Current Financial Liabilities	48.884	39.090
of which related parties	2.529	-
Current Tax Payables	2.223	2.270
Trade Payables	92.466	106.895
of which related parties	425	762
Other Liabilities	21.532	22.017
of which related parties	230	230
Total Current Liabilities	165.105	170.272
Total Equity and Liabilities	579.528	560.714

CASH FLOW STATEMENT €/000	At March 31, 2019	At March 31, 2018
Operation Activities
Net Profit (Including Portion Attr. to Minority )	7.696	9.850
of which related parties	-170	-769
Income Taxes	1.880	2.598
Other Financial Income	-1.091	-16
Interest Expenses	1.562	1.377
of which related parties	66	0
FX (Gains) and Losses	-961	722
(Gain)/Loss on non - current asset Disposals	-249	-92
Provisions & write-downs	34	300
Amortisation, depreciation & write-downs	8.038	6.072
Cash Flow from Operating Activities Before Changes in NWC	16.909	20.810
Change in Inventories	597	-528
Change in Trade and Other Receivables	-14.429	-13.697
of which related parties	-337	-319
Change in Trade and Other Payables	-9.898	-12.225
of which related parties	12	39
Change in Other Assets/Liabilities	-1.193	-854
of which related parties	26	658
Net Interest Expenses paid	-703	-666
Income Taxes paid	-31	0
Change in Provisions for Risks and Charges	-212	-165
Cash Flow from Operating Activities (A)	-8.960	-7.326
Investing activities
Investment in Tangible Assets	-17.350	-12.277
Disposal of Tangible Assets	280	924
Investment in Intangible Assets	-997	-4.474
Investment in Right of Use	-28.802	0
Cash Flow used in Investing Activities (B)	-46.869	-15.826
Financing Activities
Increase in no current Loan and borrowing	0	30.000
Decrease in no current Loan and borrowing	-4.413	-21.576
Net variation in current fiancial Assets and Liability	27.432	-591
of which related parties	12.049	0
Cash Flow from Financing Activities ( C)	23.019	7.833
Net Cash Flow of the Year (A)+(B)+(C)	-32.810	-15.319

NET FINANCIAL DEBT	At March 31, At December 31,
€/000	2019	2018
A. Cash	70.466	103.277
B. Other cash equivalents	-	-
C. Securities held-for-trading	-	-
D. Liquidity ( A + B + C)	70.466	103.277
Current financial receivables E	2.475	2.878
F. Current bank loans and borrowing	(653)	(96)
G. Current portion of non-current loans and borrowing	(39.268)	(35.496)
H. Other current loans and borrowing	(8.963)	(3.498)
I Current financial debt ( F G H ) + +	(48.884)	(39.090)
J. Net current financial debt (I + E+ D)	24.057	67.066
K. Non-current bank loans and borrowing	(151.528)	(159.492)
L. Bonds issued	(53.172)	(53.578)
M. Other non-current loans and borrowing	(32.630)	(11.274)
N. Non-current financial debt ( K + L + M )	(237.330)	(224.344)
O. Net financial debt (J+N)	(213.274)	(157.279)

AQUAFIL INVESTORS CONTACT

Karim Tonelli Investor Relations and Performance Management Director [email protected] - mob: +39 348 6022.950

Barabino & Partners IR T: +39 02 72.02.35.35 Stefania Bassi - [email protected] - mob: +39 335 6282.667 Agota Dozsa - [email protected] - mob: +39 338 7424.061

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