Aquafil

Earnings Release • May 14, 2018

Aquafil Group

Financial Results I Quarter 2018

14° May 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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Index

1. Aquafil Group at Glance

• 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 already 38% 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
• Entrepreneurial talent and strong management team

USA

Cartersville (Georgia) Aquafil USA 1 & 2

Phoenix (Arizona) Aquafil Carpet Recycling #1

CHINA

Jiaxing Aquafil Jiaxing

THAILAND

Rayong Aquafil Asia Pacific

ITALY

Arco (TN) Aquafil (Headquarter)

Cares (TN) Rovereto (TN) Tessilquattro

GERMANY

Leuna Aqualeuna

UK

Kilbirnie Aquafil UK

SLOVENIA

Ljubljana AquafilSLO Ljubljana

Senozece AquafilSLO Senožeče

Store AquafilSLO Štore

Ajdovščina AquafilSLO Ajdovščina

CROATIA

Oroslavje Aquafil CRO

2. Highlights First Quarter 2018

TURNOVER +1,5% Q1 2018 Act 147,4 €/mil Q1 2017 Act 145,2 €/mil		EBITDA +7,7% Q1 2018 Act 22,3 €/mil Q1 2017 Act 20,7 €/mil	Net Result +19,5% Q1 2018 Act 9,8 €/mil Q1 2017 Act 8,2 €/mil		NFP Q1 2018 135,8 €/mil Q1 2017 146,8 €/mil1
	5°	SIGNING «with INVISTA», February 2018	STARTING OF ACR#1 March 2018 and full operation from September 2018.	27°	CLOSING «with INVISTA», April 2018 with impact on Aquafil P&L from May 2018

Project Name	Signing Date	Closing Date	Project Description
BADGER	5° February 2018	27° April 2018	Acquisition of certain tangible and intangible assets business activity in Asia Pacific	related to INVISTA's nylon 6
		Project Details		Cash OUT
Acquisition of some reprocessing	clients portfolio, and laboratory	recipes, products, equipment	contractual relationship, EverSoft® trademark and	9,5 \$/mil
Stock of product				1,8 \$/mil
Final Cash OUT	to INVISTA			11,3 \$/mil
NWC to support	new business and	0perational adjustment	of Aquafil Chinese plant	15,0 to 20,0 \$/mil
TOTAL CASH	IMPACT			26,3 – 31,3 \$/mil

Project contemplates an increase of Aquafil turnover of ca 50 \$/mil/y and after a full integration of the acquired assets a margin in line with Aquafil Group Consolidated EBITDA margin

2. Key Performance Indicators

The Key Performance Indicators of Aquafil Group related with Q1 2018 compared with Q1 2017 are here reported:

KPI	Act Q1	Act Q1	Var
	2018	2017	vs Act
Turnover €/mil	147,38	145,19	1,5%
EBITDA €/mil	22,28	20,75	7,4%
EBITDA Margin %	15,12%	14,29%
EBIT €/mil	14,53	13,49	7,7%
EBIT Margin %	9,86%	9,29%
EBIT Adj €/mil	15,91	14,66	8,5%
EBIT Adj Margin %	10,79%	10,09%
EBT €/mil	12,45	11,35	9,7%
EBT Margin %	8,45%	7,81%
Net Result €/mil	9,85	8,19	20,3%
Margin %	6,68%	5,64%
	Act Q1	Act Q1	Var
	2018	2017	vs Act

• a) Revenues grew by 1.5%, amounting to €147.4 million compared to €145.2 million for Q1 2017, mainly as a result of the increase of product sales volume in the Polymers line
• b) EBITDA went from €20.7 million to €22.3 million, up by 7.4% and EBITDA margin improved by nearly one percentage point, growing from 14.3% to 15.1%, also thanks to the increase in the Group's sales of ECONYL®-branded products, which shifted the sales mix towards higher-margin products.
• c) Net profit for the first quarter of 2018 amounted to €9.8 million, up by 20.3% compared to the same period of the previous year (€8.2 million).
• d) Lastly, Net Financial Position grew to €135.8 million, compared to €112.1 million at December 31, 2017. The increase was mainly attributable to both:
• 1. the investments made during the period, including advance payments to Invista for the acquisition of its assets related to the Polyamide 6 BCF Fiber business in Asia Pacific, and
• 1. the higher level of Working Capital used, as a result of sales growth for Q1 2018 compared to Q4 2017 and the final settlement of listing-related costs recorded in 2017.

	Act Q1	Act Q1	Var	Act FY	Var
	2018	2017	vs Act	2017	vs Act
NFP €/mil	(135,82)	(146,86)	7,5%	(112,07)	-21,2%

2a. Focus on Sales

The following table compares the figures referring to the amount and percentage of sales broken down by line of product for the first quarter of 2018 the same period of 2017 and FY2017.

The Polymers line's sales increased compared to the same period of 2017, following the decision to decrease the sales of low-margin commodity products of the BCF line, which thus shrank due both to the resultant impact and the effect of the exchange rate difference for sales in the dollar area.

Sales (€/mil)	Q1 - 2018	%	Q1 - 2017	%	FY2017	%
by Product Line
BCF	97,16	65,9%	102,42	70,5%	381,85	69,5%
NTF	26,45	17,9%	27,68	19,1%	94,67	17,2%
Polymers	23,77	16,1%	15,09	10,4%	72,80	13,3%
TOTAL	147,38	100,0%	145,19	100,0%	549,33	100,0%

The following table compares the figures referring to the value and percentage of sales broken down by geographical area for the first quarters of 2018 the same period of 2017 and FY2017.

Sales on the Italian market increased mainly thanks to the Polymers line, whereas North America's decrease was essentially attributable to the exchange rate difference for the two reporting periods. The breakdown of sales by geographical area reported no significant changes compared to March 31, 2017.

Sales (€/mil)	Q1 - 2018	%	Q1 - 2017	%	FY2017	%
Geographical Area
Italy	36,28	24,6%	32,08	22,1%	117,40	21,4%
EMEA(*)	73,03	49,5%	72,58	50,0%	279,33	50,8%
North America	22,26	15,1%	24,46	16,8%	90,52	16,5%
Asia e Oceania	15,79	10,7%	15,95	11,0%	61,19	11,1%
RoW	0,03	0,0%	0,12	0,1%	0,89	0,2%
TOTAL	147,38	100,0%	145,19	100,0%	549,33	100,0%

(*) EMEA excluding Italy

The Group's revenues from sales of ECONYL®-branded products amounted to approximately 38% of fiber sales, up by about 2 percentage points compared to the first quarter of 2017.

6. The First Quarter 2018 Financial Statement

CONSOLIDATED INCOME STATEMENT	Q1 2018	of which	Q1 2017	of which
$\epsilon$ /000		NO recurrent		no recurrent
Revenue	147.382		145.188	12
of which related parties	141		300
Other Revenue		1
Total Revenue and Other Revenue	147.383	$\mathbf{1}$	145.188	12
Raw Material	(79.687)	(2)	(75.527)
of which related parties			(9)
Services	(23.368)	(204)	(24.010)
of which related parties	(893)		(837)
Personel	(25.589)	(142)	(25.466)	(93)
of which related parties			(274)
Other Operating Costs	(480)	(19)	(592)	(73)
of which related parties	(17)		(17)
Depreciation and Amorti zation	(6.072)		(5.947)
Provi s ions and Write-downs	(300)		(148)
Capitalization of Internal Construction Costs	2.644		(4)
EBIT	14.531	(366)	13.494	(154)
Income (loss) from Investments			134
Other Financial Income	16		108
of which related parties
Interest Expenses	(1.377)		(1.641)
of which related parties
FX Gains and Losses	722)		(642)
Profit Before Taxes	12.448	(366)	11.345	(154)
Income Taxes	(2.598)		(3.160)
Net Profit (Including Portion Attr. to Minority)	9.850	(366)	8.185	(154)
Net Profit Attributable to Minority Interest	23		24
Net Profit Attributable to the Group	9.827		8.161
$D$ and $D$ and $D$

EBITDA and EBIT Adjusted	Q118	Q1 17
€/000
Net Profit (Including Portion Attr. to Minority)	9.850	8.185
Income Taxes	2.598	3.160
Income (loss) from Investments	$\mathbf 0$	0
Amortisation & Depreciation	6.072	5.947
Write-downs & Write-backs of intangible and tangible assets	300	148
Financial items (*)	3.093	3.157
No recurring items (**)	(366)	(154)
EBITDA	22.279	20.751
Amortisation & Depreciation	6.072	5.947
Write-downs & Write-backs of intangible and tangible assets	300	148
EBIT Adjusted	15.907	14.656
Revenue	147.382	145.188
EBITDA Margin	15,12%	14,29%
EBIT Adjusted Margin	10,79%	10,09%

(*) It includes: (i) financial income amounting to €16 thousand at March 31, 2018 and €134 thousand at March 31, 2017; (ii) interest expenses of €1,377 thousand at March 31, 2018 and €1,641 thousand at March 31, 2017; (iii) FX losses amounting to €722 thousand at March 31, 2018 and €642 thousand at March 31, 2017; (iv) cash discounts to customers for €1,011 thousand for the reporting period at March 31, 2018 and €1,008 thousand at March 31, 2017.

(**) It includes: (i) non-recurring charges related to the expansion of the Aquafil Group for €220 thousand at March 31, 2018; (ii) mobility and incentive charges for €93 thousand at March 31, 2017; and (ii) other nonrecurring costs and income for €146 thousand at March 31, 2018 and €61 thousand at March 31, 2017

CONSOLIDATED BALANCE SHEET	Q1 2018	FY17
€/000
Intangible Assets	11.754	7.782
Tangible Assets	159.632	153.927
Financial Assets	502	408
of which related parties	79	79
Investments Measured at Equity
Deferred Tax Assets	9.719	11.356
Total Non-Current Assets	181.608	173.472
Inventories	154.027	153.499
Trade Receivable	46.372	34.870
of which related parties	155	116
Financial Current Assets	989	988
of which related parties	÷	٠
Current Tax Receivables	2.276	524
Other Current Assets	13.388	12.517
of which related parties	1.944	1.688
Cash and Cash Equivalents	83.705	99.024
Total Current Assets	300.756	301.422
Total Current Assets	482.364	474.895
Share Capital	49.709	49.673
Reserves	75.344	54.772
Group Net Profit for the year	9.818	20.570
Group Shareholders Equity	134.871	125.014
Net Equity attributable to minority interest	485	386
Net Profit for the year attributable to minority interest	23	99
Total Sharholders Equity	135.379	125,499
Employee Benefits	5.855	5.876
Non-Current Financial Liabilities	171.808	159.973
of which related parties
Provisions for Risks and Charges	1.672	1.516
Deferred Tax Liabilities	3.030	3.533
Other Pavables	8.739	7.858
Total Non-Current Liabilities	191.104	178,755
Current Financial Liabilities	48.709	52.111
Current Tax Payables	4.983	5.134
Trade Payables	80.780	94.477
of which related parties	397	716
Other Liabilities	21.410	18.919
of which related parties	457	457
Total Current Liabilities	155.882	170.641
. $\sim$ $\sim$	.

CASH FLOW STATEMENT	Q1 18	Q1 17
$\epsilon/000$
Operation Activities
Net Profit (Including Portion Attr. to Minority)	9.850	8.185
of which related parties	(769)	(829)
Income Taxes	2.598	3.160
Income (loss) from Investments	0	$\mathbf 0$
Other Financial Income	(16)	(134)
of which related parties	0	(108)
Interest Expenses	1.377	1.641
FX Gains and Losses	722	642
Gain/Loss on non - current asset Disposals	(92)	$\mathbf 0$
Amortisation & Depreciation	300	12
Write-downs & Write-backs of intangible and tangible assets	6.072	5.947
Cash Flow from Operating Activities Before Changes in NWC	20.810	19.453
Change in Inventories	(528)	7.439
Change in Trade and Other Receivables	(13.697)	(7.707)
of which related parties	(319)	603
Change in Trade and Other Payables	(12.225)	(41.904)
of which related parties	39	415
Change in Other Assets/Liabilities	(854)	1.809
of which related parties	658	(1.725)
Net Interest Expenses paid	(666)	(1.431)
Income Taxes paid	0	0
Change in Provisions for Risks and Charges	(165)	0
Cash Flow from Operating Activities (A)	(7.326)	(22.341)
Attività di investimento
Investment in Tangible Assets	(12.277)	(5.373)
Divestment in Tangible Assets	924
Investment in Intangible Assets	(4.474)	(2.954)
Divestment in Intangible Assets	0
Investment in Financial Assets	0	0
Divestment in Financial Assets	٥	1.100
Cash Flow used in Investing Activities (B)	(15.826)	(7.227)
Financing Activities
Increase in no current Loan and borrowing	30.000	3.000
Decrease in no current Loan and borrowing	(21.576)	(13.643)
Net variation in current fiancial Assets and Liability	(591)	(910)
Cash Flow from Financing Activities (C)	7.833	(11.553)
Net Cash Flow of the Year $(A)+(B)+(C)$	(15.319)	(41.121)

NET FINANCIAL DEBT	Q1 2018	FY17
$\epsilon/000$
A. Cash	83.705	99.024
B. Other cash equivalents
C. Securities held-for-trading
D. Liquidity $(A + B + C)$	83.705	99.024
E. Current financial receivables	989	988
F. Current bank loans and borrowing	(41)	(72)
G. Current portion of non-current loans and borrowing	(46.818)	(50.199)
H. Other current loans and borrowing	(1.850)	1.840
I. Current financial debt $(F + G + H)$	(48.709)	52.111)
J. Net current financial debt $(I + E + D)$	35.985	47.901
K. Non-current bank loans and borrowing	(104.245)	(91.597)
L. Bonds issued	(53.489)	(53.820)
M. Other non-current loans and borrowing	(14.074)	14.556
N. Non-current financial debt $(K + L + M)$	(171.808)	159.973)
O. Net financial debt $(J+N)$	(135.823)	(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