Aquafil

Investor Presentation • Sep 5, 2018

AQUAFIL

Corporate Presentation

June 2018

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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• Market Leader in Nylon Fibers and Polymers:
• Flooring solutions;
• Fashion and sportswear textile applications;
• Polymers for engineering plastics solutions;
• Technologies, processes and continuous innovation key to a successful business model
• R&D focus for a uniquely diversified commercial offer;
• Manufacturing and operational excellence;
• Focus on high-end segments for a premium positioning;
• Pioneers of circularity
• A true regeneration Group with 37% of fiber revenue coming from Nylon 6 waste regeneration;
• ECONYL® Regeneration System: high barriers to entry and cost effectiveness (www.econyl.com);
• Substantial opportunities ahead;
• A global company with a dedicated, local supply system
• Manufacturing presence in 8 countries
• 2.828 employees at the 30th June 2018;
• €291,3m of Revenues in H1 – 2018 (528,3m FY17 and 278,8 H1-17);
• €44,5m EBITDA in H1 – 2018 (72,6m EBITDA in FY17 and 40,3 H1 – 17)
• Entrepreneurial talent and strong management team

USA

Cartersville (Georgia) Aquafil USA 1 & 2

Phoenix (Arizona) Aquafil Carpet Recycling #1

Sacramento (California) Aquafil Carpet Recycling #s

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

(1) Aquafil Source

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Source: Advancy analysis. Note: (1) Based on volumes.

A BCF Flooring Solutions		Best-in-class BCF commercial offer
	Product Range	• More than 20,000 SKUs • Approximately 5,000 references renewed each year The only supplier of 100% regenerated ECONYL® fibers and polymers • • Broad proprietary color range • Specialty polymers
	Co-development	• Carpet development centers in each geography • Production of more than 8,000 samples per year
	Service	• Short delivery time: e.g. 2 weeks worldwide for the ECONYL® solution dyed fiber Consistent high quality across all geographies to serve consistent product to • global clients
	Main Competitors

NTF Textile Applications B

Global NTF Market(1) (2016) Aquafil NTF Market Share(1) in Europe (2016)

• Textile mass production is in APAC
• Europe's core focus is on high-end production
• Fast fashion needs lead to growing production out of Turkey, which can be served by European NTF players
• A leading player with limited competition
• One of only 3 suppliers capable of offering products starting from monomer and intermediate handling
• APAC moving slowly towards high-end production

B

NTF Textile Applications

ECONYL® Regenerated Fiber

• 100% regenerated & regenerable nylon fiber
• Fully recognized by a large and growing number of global sportswear and luxury brands (c. 300 contracts in place)
• Unique storyline channeled by brands onto final consumers
• Qualifies and opens doors to the entire Aquafil products offering

Dryarn®: a Successful High-performance Fiber

• Dryarn® is a niche, high-end fiber for sportswear and technical underwear applications
• Dryarn® has significantly superior properties than most common textile fibers (polyester, cotton, wool): better dryness (less moisture absorption), lightness, breathability and insulation capacity
• Established itself as THE brand of microfiber polypropylene high performance garments (military and civil service included)

100% regenerated & regenerable nylon fiber, unique proprietary technology and high barriers to entry

Econyl®

• 20,000 tons of recovered fishing nets from aquaculture and fishing industry

• Any single Plan to treat 16,000 tons of used carpets per year from
• Carpets from densely populated area with existing carpet collection networks (California)
• Securing cost reduction
• Up-side on public subsidies (California) related with carpet recycling

The ACR#1, ARC#2, ARC#.. a new model for business…..

An unique and efficient solution for nylon 6 carpet regeneration, the AQUAFIL CARPET RECYCLING #ACR 1, located in proximity to California with the capacity to collect and treat 16 k tons of carpet per year

Econyl®

	Technology mastering increasing barriers to entry
High Productivity	• High speed spinning technology, with high reliability and unmatched finishing technologies (cabling, heat-setting) developed internally • Development of IT tools (e.g. to optimize color change in spinning) Development of tailor-made machines • to ensure competitive advantage (e.g. one step multicolor yarn spinning and entangling machines)	COST EFFICIENCY
Specific Product Range	• Proprietary color range Various technologies mastered enabling wider product range • • Flooring solutions know-how to improve product range	BROAD PRODUCT RANGE, HIGH VALUE PROPOSAL
Vertical Integration	(masterbatch(1) Integration in value added steps production, caprolactam • polymerization, anti-stain polymers etc.) • Proprietary technologies differentiating Aquafil • Advanced knowledge about raw material composition and influence on product quality and scrap rate	COST EFFICIENCY, VERY SHORT LEAD TIME, ECONYL®
Production Flexibility	• Ability to produce small batches thus limiting inventory level Limited color change time as a result of specific machines • • Wide footprint close to customer and ensuring low cost production (e.g. labour intensive operationsin Croatia)	COST EFFICIENCY, VERY SHORT LEAD TIME, ABILITY TO PRODUCE BROAD PRODUCT RANGE

Capex investment reflects Aquafil's commitment to its technological leadership!!

Giulio BONAZZI Chairman Chief Executive Officer and President of BCF Area Asia Pacific

Fabrizio CALENTI Executive Director – President of NTF & ECONYL® Technology

Adriano VIVALDI Executive Director Chief Financial Officer

Stefano LORO President of BCF Area EMEA

Sergio CALLIARI Senior Vice President of Finance

Franco ROSSI President of BCF Area USA

Giuseppe CRIPPA Senior Vice President of Industrial Operations BCF

Revenues(1) (€m)

Revenues grew 4.5%, amounting to €291.3 million for H118 compared to €278,8 million for H117, of which a 3% as a result of sales increase of both BCF product in Asia Pacific and of Polymers and the remaining 1,5% as effect of selling price increase.

Turnover at 30th June 2018 is composed by 72,2% of BCF product, including Engineering activities, 17,4% of NTF product and 10,4% of Polymers.

Turnover is carried out for 20,8% in Italy, 46,0% EMEA (excluding Italy), 16,6% in Asia and Oceania, 16,5% in North America and remaining portion in the rest of world.

Sales of ECONYL® branded products are growth of 6,3% in first half 2018 compared to same periods of 2017 and represent in the first half 2018 the 37% of fiber sales.

EBITDA (€m), Adj. EBIT(2) (€m) and EBITDA and Adj. EBIT Margin on Revenues (%)

EBITDA grows in H118 of 10,3%, from €40,3m of H117 up to €44,5m reported in H118.

Adj. EBIT also grows of 11% from €28,3m of H117 up to €31,4m reported in H118.

EBITDA Margin growth from 14,7% of H117 to 15,3% of H118

Growth is driven by (a) increase of sold quantity and (b) improvement of production efficiency.

Net Profit (€m) and Margin on Revenues (%)

NET PROFIT grows in H18 of 46,1% from €13,4m up to €19,6m.

Increase follows EBITDA trend and remain effect is mainly related to effect of exchange gains and losses.

Gross Capex(1) (€m) and Capex as % of Revenue(2)

Gross CAPEX of H12018 is reported at a level of €30,6m.

Capital Expenditure amount is mainly related for:

• a) €21,2m with the acquisition of PA6 BCF Invista assets in Asia Pacific, in expansion production of Econyl® caprolactam also by the ACR#1 and ACR#2 in USA and other project related with increase of industrial efficiency;
• b) €1,4m with the bio-caprolactam project;
• c) ordinary capex for the remaining part

Net Financial Debt (€m) and Net Financial Debt / EBITDA(1)

NET FINANCIAL DEBT increase in H117 from €112,7m to €146,9m.

The NET Financial Debt variation is mainly driven for:

• a) €7,7m of cash flow derived from operation including NWC variation;
• b) (€29,9m) of net capex;
• c) (€12,0m) of dividend distribution;

Cash Flow from Operating Activities (€m) and Cash Return(2) (%)

The CASH FLOW from OPERATION is reported in H118 equal to €7,7m, lower than H117 of ca €13,0m.

Net Working Capital (€m) composition

Net Invested Capital (€m) & Adjusted ROI (1)

Equity (€m) & ROE(2) (%)

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A capital structure with 3 type of Shares (a) Ordinary Share, (b) share B: dedicated to Giulio Bonazzi family with the same economic right of ordinary share but with 3 voting right for any share and (c) share C: no transferable, no economic and voting right but at certain conditions convertible in ordinary share at a ratio of 4,5 ordinary share for 1 Share C. At 31st December 2017:

Main Aquafil's shareholders is Aquafin Holding S.p.A. (holding of Giulio Bonazzi family) and also Top Management is involved::

Board of Statutory Auditors

Stefano Poggi Longostrevi Chairman

Francesco Profumo Independent Director(1) (4) (5)

Simona Heidempergher Independent Director(1) (2) (3) (6)

Board of Directors defines the Group's global strategies by developing actions for growth, launching new activities in various sectors and implementing plans for investment, control and assessment of results.

Fabio Buttignon Statutory Auditor

Bettina Solimando Statutory Auditor

Auditors Firm

27 Note: (1) Director who has declared that he satisfies the independence requirements pursuant to Articles 147-ter, paragraph 4 of the Consolidating Law on Finance, as well as Article 3 of the Code of Self-Governance (2) Lead Independent Director (3) Member and President of Audit and Risk Committee (4) Member of Audit and Risk Committee (5) Member and President of Appointment and Remuneration Committee (6) Member of Appointment and Remuneration Committee

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APPENDIX

RECONCILIATION FROM NET PROFIT TO	Half	Half	Second	Second
EBITDA €/000	Year 2018	Year 2017	Quarter 2018	Quarter 2017
Net Profit (Including Portion Attr. to Minority )	19.614	13.421	9.764	5.236
Income Taxes	4.975	5.888	2.378	2.728
Investment income and charges	-	(50)	-	(50)
Amortisation & Depreciation	12.364	11.807	6.292	5.860
Write-downs & Write-backs of intangible and tangible assets	769	301	469	153
Financial items (*)	4.455	7.524	1.362	4.367
No recurring items (**)	2.312	1.459	1.946	1.305
EBITDA	44.488	40.350	22.210	19.599
Revenue	291.291	278.836	150.484	137.268
EBITDA Margin	15,3%	14,5%	14,8%	14,3%

RECONCILIATION FROM EBITDA TO	Half	Half	Second	Second
EBIT ADJUSTED €/000	Year 2018	Year 2017	Quarter 2018	Quarter 2017
EBITDA	44.488	40.350	22.210	19.599
Amortisation & Depreciation	12.364	11.807	6.292	5.860
Write-downs & Write-backs of intangible and tangible assets	769	301	469	153
EBIT Adjusted	31.356	28.242	15.449	13.586
Revenue	291.291	278.836	150.484	137.268
EBIT Adjusted Margin	10,8%	10,1%	10,3%	9,9%

(*) It includes: (i) financial income amounting to €0,01 million at June 30, 2018 and €0,2 million at June 30, 2017; (ii) interest expenses of €3,0 million at June 30, 2018 and €3,4 million at June 30, 2017 (iii) cash discounts to customers for €2,0 million for the reporting period at June 30, 2018 and €2,0 million at June 30, 2017 and (iv) FX gain amounting to €0,5 million at June 30, 2018 and FX losses amounting to €2,3 million at June 30, 2017;

(**) It includes: (i) non-recurring charges related to expansion of Aquafil Group for €1,6 million at March 31, 2018 and €0,1 million at June 30, 2017; (ii) staff restructuring cost and regularization of expatriates staff amounting to €0,4 millions at June 30, 2018 and €1,3 millions at June 30, 2017; and (ii) other nonrecurring costs and income for €0,3 million at June 30, 2018

A specific details of no recurring items is available in the First Half Notes.

Income Statement

CONSOLIDATED INCOME STATEMENT	Half	of uich	Half	of uich	Second	of uich	Second	of uich
$\epsilon/000$		Year 2018 non-current		Year 2017 non-current	Quarter 2018 non-current		Quarter 2017 non-current
Revenue	291.291		278.836	12	150.484		137.268
of uhich related parties	188		152		47		80
Other Revenue	145	143	3	3	144	143	3
Total Revenue and Other Revenue	291.436	143	278.839	15	150.628	143	137.271	3
Raw Material	(151.485)	(101)	(141.405)		(78.373)	(99)	(69.498)
of uhich related parties	$\left( 0\right)$				$\left( 0 \right)$		9
Services	(49.420)	(1.584)	(47.278)	(139)	(26.052)	(1.381)	(23.268)	(139)
of uhich related parties	(1.790)		(1.797)		(897)		(960)
Personel	(52.847)	(658)	(52.474)	(1.305)	(27.258)	(516)	(27.008)	(1.212)
of uhich related parties			(476)				(202)
Other Operating Costs	(1.047)	(111)	(1.125)	(30)	(566)	(92)	(533)	43
of uhich related parties	(35)				(17)		17
Depredation and Amorti zation	(12.364)		(11.807)		(6.292)		(5.860)
Provi s ions and Write-downs	(769)		(301)		(469)		(153)
Capitalization of Intemal Construction Costs	3.571		319		927		323
EBIT	27.075	(2.312)	24.767	(1.459)	12.545	(1.946)	11.273	(1.305)
Income (loss) from Investments			50				50
Other Financial Income	17		180				46
of uhich related parties	(0)		144		$\left( 0 \right)$		36
Interest Expenses	(3.027)		(3.359)		(1.651)		(1.718)
of uhich related parties
FX Gains and Losses	525		(2.329)		1.247		(1.687)
Profit Before Taxes	24.589	(2.312)	19.309	(1.459)	12.142	(1.946)	7.965	(1.305)
Income Taxes	(4.975)		(5.888)		(2.378)		(2.728)
Net Profit (Including Portion Attr. to Minority)	19.614	(2.312)	13.421	(1.459)	9.764	(1.946)	5.237	(1.305)
Net Profit Attributable to Minority Interest			26		(23)		$\overline{2}$
Net Profit Attributable to the Group	19.614		13.395		9.787		5.235
Basic earnings per share	0,39		0,30		0,19		0,12
Diluted earnings per share	0,39		0,30		0,19		0,12

CONSOLIDATED BALANCE SHEET	At June 30,	At December 31,
€/000	2018	2017
Intangible Assets	14.962	7.782
Tangible Assets	165.388	153.927
Financial Assets	574	408
of which related parties	79	79
Other Assets	2.189
Deferred Tax Assets	8.357	11.356
Total Non-Current Assets	191.471	173.472
Inventories	162.418	153.499
Trade Receivable	53.564	34.870
of which related parties	54	116
Financial Current Assets	1.657	988
of which related parties	(0)	(0)
Current Tax Receivables	2.359	524
Other Current Assets	14.325	12.517
of which related parties	403	1.688
Cash and Cash Equivalents	92.003	99.024
Total Current Assets	326.325	301.422
Total Current Assets	517.796	474.895
Share Capital	49.714	49.673
Reserves	63.110	54.772
Group Net Profit for the year	20.553	20.569
Group Shareholders Equity	133.377	125.014
Net Equity attributable to minority interest	1	386
Net Profit for the year attributable to minority interest	0	99
Total Sharholders Equity	133.378	125.499
Employee Benefits	5.780	5.876
Non-Current Financial Liabilities	180.767	159.973
Provisions for Risks and Charges	1.934	1.516
Deferred Tax Liabilities	3.334	3.533
Other Payables	9.662	7.858
Total Non-Current Liabilities	201.477	178.755
Current Financial Liabilities	59.854	52.111
Current Tax Payables	5.884	5.134
Trade Payables	92.915	94.477
of which related parties	716	716
Other Liabilities	24.288	18.919
of which related parties	457	457
Total Current Liabilities	182.941	170.641
Total Equity and Liabilities	517.796	474.895

CASH FLOW STATEMENT	At June 30,	At June 30,
€/000	2018	2017
Operation Activities
Net Profit (Including Portion Attr. to Minority )	19.614	13.421
of which related parties	-1.637	-1.977
Income Taxes	4.975	5.888
Income (loss) from Investments		-50
Other Financial Income	-17	-180
of which related parties		-144
Interest Expenses	3.027	3.359
FX Gains and Losses	-525	2.329
Gain/Loss on non - current asset Disposals	-133	132
Provisions & write-downs	769	301
	12.364	11.807
Amortisation, depreciation & write-downs Cash Flow from Operating Activities Before Changes in NWC	40.075	37.007
Change in Inventories	-8.919	2.620
Change in Trade and Other Receivables	-1.562	4.395
of which related parties		-17
Change in Trade and Other Payables	-19.038	-14.048
of which related parties	-62	3
Change in Other Assets/Liabilities	1.828	-5.277
of which related parties	1.282	-1.680
Net Interest Expenses paid	-2.586	-3.035
Income Taxes paid	-1.769	0
Change in Provisions for Risks and Charges	-308	-868
Cash Flow from Operating Activities (A)	7.721	20.794
Investing activities
Investment in Tangible Assets	-22.295	-16.709
Disposal of Tangible Assets	860	1.006
Investment in Intangible Assets	-8.334	-1.196
Disposal of Intangible Assets	13
Investment in Financial Assets	-166
Disposal of Financial Assets		1.100
Cash Flow used in Investing Activities (B)	-29.923	-15.799
Financing Activities
Increase in no current Loan and borrowing	55.000	47.000
Decrease in no current Loan and borrowing	-28.364	-35.293
Net variation in current fiancial Assets and Liability	744	-2.514
Dividends Distribution	-12.241	-12.144
of which related parties	-7.369
Increase (decrease) Share Capital	42
Cash Flow from Financing Activities ( C) Net Cash Flow of the Year (A)+(B)+(C)	15.181 -7.021	-2.951 2.044

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NET FINANCIAL DEBT	At June 30,	At December 31,
€/000	2018	2018
A. Cash	92.003	99.024
B. Other cash equivalents	-	-
C. Securities held-for-trading	-	-
D. Liquidity ( A + B + C)	92.003	99.024
E. Current financial receivables	1.657	988
F. Current bank loans and borrowing	(2.067)	(72)
G. Current portion of non-current loans and borrowing	(55.895)	(50.199)
H. Other current loans and borrowing	(1.892)	(1.840)
I. Current financial debt ( F + G + H )	(59.854)	(52.111)
J. Net current financial debt (I + E+ D)	33.806	47.901
K. Non-current bank loans and borrowing	(120.454)	(91.597)
L. Bonds issued	(46.382)	(53.820)
M. Other non-current loans and borrowing	(13.931)	(14.556)
N. Non-current financial debt ( K + L + M )	(180.767)	(159.973)
O. Net financial debt (J+N)	(146.961)	(112.071)

AQUAFIL INVESTORS CONTACT

Karim Tonelli Investor Relations and Performance Management Director investor.relations@aquafil.com - mob: +39 348 6022.950

Barabino & Partners IR T: +39 02 72.02.35.35 Stefania Bassi - s.bassi@barabino.it - mob: +39 335 6282.667 Agota Dozsa - a.dozsa@barabino.it - mob: +39 338 7424.061

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