Landi Renzo

Earnings Release • Mar 28, 2017

FY 2016 FINANCIAL RESULTS

Stefano Landi Chairman & CEO

Cristiano Musi General Manager & CEO Elect

M€	FY 2016	FY 2015	Delta M€	Delta %	• Revenues decrease primarily driven by the
Revenues	184.2	205.5	-21.3	-10.4%
EBITDA Adj.	2.7	5.8	-3.1	-52.5%
% on Revenues	1.5%	2.8%
EBITDA	-2.9	-1.3	-1.6	n.a.	slowdown of the turnover
% on Revenues	-1.6%	-0.6%
EBIT	-18.9	-26.9	8.0	29.7%
% on Revenues	-10.3%	-13.1%
Financials	-4.2	-5.8	1.6	-27.1%	off
	-23.1	-32.7	9.6	29.2%
EBT
Taxes	-2.9	-2.9	0.0	n.a.

• Revenues decrease primarily driven by the After Market segment (Automotive) in America • Ebitda adj has been impacted by the
• slowdown of the turnover
• EBIT loss has been contained thanks to lower depreciation, extraordinary expenses and write off • Financial charges have decreased primarily
• due to favorable currency exchange rates, reducing the impact on 2016 loss

Revenues breakdown

• After Market segment (Automotive): underperformance in America, only partially offset by Brazil
• OEM segment (Automotive): temporary slowdown in Italy and Europe, driven by the switch from Euro V to Euro VI engines
• Gas Distribution (SAFE): +3% growth compared to FY15

• Other Businesses: slight decrease attributable to Oil&Gas

• Distribution (SAFE)

• the After Market segment, was not homogeneous, characterized by Countries performing above (e.g. Brazil) and below (e.g. US, Colombia, Bolivia) expectations

Balance Sheet Overview

M€, %
	Balance Sheet	FY 2016	FY 2015
	Intangible Assets	58,9	61,2
	Tangible Assets	30,5	35,4
	Other non-current Assets	7,6	8,3
	Fixed Capital	97,0	104,9
	Receivables	37,6	33,8
	Inventory	51,2	60,4
	Paybles	-53,1	-58,4
	Other current assets/liabilities	0,8	2,5
	Working Capital	36,4	38,3
	% on Revenues	19,8%	18,6%
	TFR and other Funds	-12,6	-11,9
	Invested Capital	120,8	131,3
	Shareholder's Equity	45,1	71,8
	Net Financial Position	75,7	59,5
	Total Sources	120,8	131,3

Net Working Capital

* Transferred receivables in 2016 lower than in 2015 by 13,3 M€

Net financial position evolution

38,3	Cash liquidity (+)	16,5
-59,5	NFP	-75,7

Financial structure optimization consistent with the Group's new strategy

• 1. Commitment of the controlling shareholders on an advance payment for a future capital increase 8.9€ M effective in March (subject to pending conditions). Extraordinary shareholders' meeting to be called within December 2018 to increase the share capital by total amount of 15 M€ including the advance payment of the controlling shareholders for 8.9€ M
• 1. Short-term credit lines: confirmation of a relevant portion of the existing credit commitment on shortterm credit lines
• 1. Mid/long-term credit lines: reshaping of the amortization plans of the mid/long-term credit lines and Bond loan with instalments of increasing amount up to 2022
• 1. Revision of the financial parameters set by some mid/long-term credit lines and Bond loan

Banks have already subscribed the new financial structure with the exeption of one bank which should sign within March 2017 Bondholders will be asked to underwrite it on March 30th, 2017

Landi Renzo Group has launched a structured program to recover the marginality and sustain the Group performance

Dec. 2016		The Group has appointed Mr. Cristiano Musi as GM and CEO Elect. Mr. Stefano Landi remains as Executive Chairman
Jan. 2017		The Group has launched a new organization structure for the "Automotive Business", aimed at exploiting the full potential of different segments: OEM, AM and Electronic Equipment
Feb. 2017		The Group has launched a structured and extensive program of initiatives, involving the "automotive business", to improve the operational efficiency and recover the marginality on the core business. The Group is supported in this process by a first-tier consulting firm. Concrete benefits on the P&L are expected from the Q4 2017, with full benefits from 2018
Mar. 2017		The Group has renegotiated the debt with banks, with a new debt maturity that allows the Group to implement its new strategy
Jun. 2017		The Group will define a new strategic plan, with the main goal to identify the proper competitive positioning and a set of actions to sustain the revenues performance in the Automotive and Gas distribution businesses

Given the set of launched actions, the Group expects moderate business growth and marginality recovery at EBITDA Adj. level already in 2017

Landi Renzo - Company profile

BOARD OF DIRECTORS

Stefano Landi – Chairman & CEO Giovannina Domenichini – Honorary Chairman Claudio Carnevale - Director Angelo Iori – Director Silvia Landi - Director Anton Karl - Director Sara Fornasiero - Indip. Director Ivano Accorsi – Indip. Director

Stefano Landi President & CEO Cristiano Musi CEO Elect/General Manager

TOP MANAGERS INVESTOR RELATIONS

Investor Relations Contacts: Pierpaolo Marziali Tel: +39 0522 9433 E-mail: ir@landi.it www.landi.it

N. of shares outstanding: 112.500.000

CONSOLIDATED PROFIT & LOSS

CONSOLIDATED PROFIT & LOSS
(thousands of Euro)
INCOME STATEMENT	31/12/2016	31/12/2015
Revenues (goods and services)	184,242	205,522
Other revenue and income	1,217	1,883
Cost of raw materials, consumables and goods and change in inventories	-94,236	-100,439
of which non-recurring	-1,000	0
Costs for services and use of third party assets	-51,601	-58,483
of which non-recurring	-2,345	-1,296
Personnel expenses	-36,364	-43,854
of which non-recurring	0	-3,058
Accruals, impairment losses and other operating expenses	-6,160	-5,913
of which non-recurring	-2,300	-2,700
Gross Operating Profit	-2,902	-1,284
Amortization, depreciation and impairment losses of which non-recurring	-16,018 0	-25,617 -10,178
Net Operating Profit	-18,920	-26,901
Financial income	117	412
Financial expenses	-5,161	-4,966
Gains (losses) on exchange rate	904	-930
Gains (losses) on equity investments consolidated using the equity method	-66	-288
Profit (Loss) before tax	-23,126	-32,673
Current and deferred taxes	-2,878	-2,914
Profit (loss) of the period for the Group and minority interests, including:	-26,004	-35,587
Minority interests	-759	-299
Profit (Loss) of the period for the Group	-25,245	-35,288
Basic earnings (loss) per share (calculated on 112,500,000 shares)	-0.2244	-0.3137
Diluted earnings (loss) per share	-0.2244	-0.3137

CONSOLIDATED BALANCE SHEET

CONSOLIDATED BALANCE SHEET
(thousands of Euro)
ASSETS	31/12/2016	31/12/2015
Non-current assets
Property, plant and equipment	30,500	35,364
Development expenditure	8,420	8,404
Goodwill	30,094	30,094
Other intangible assets with finite useful lives	20,359	22,696
Equity investments consolidated using the equity method	43	109
Other non-current financial assets	664	574
Deferred tax assets	6,887	7,615
Total non-current assets	96,967	104,856
Current assets
Trade receivables	37,551	33,764
Inventories	49,872	57,528
Contract works in progress	1,281	2,904
Other receivables and current assets	10,082	16,347
	16,484	38,264
Cash and cash equivalents		148,807
Total current assets	115,270
TOTAL ASSETS	212,237	253,663

CONSOLIDATED BALANCE SHEET

CONSOLIDATED BALANCE SHEET (thousands of Euro) EQUITY AND LIABILITIES Group shareholders' equity Share capital Other reserves Profit (loss) of the period Total equity attributable to the shareholders of the parent Minority interests TOTAL EQUITY Non-current liabilities Non-current bank loans	31/12/2016 11,250 59,400 -25,245 45,405 -323 45,082	31/12/2015
		11,250 95,428 -35,288 71,390 425
		71,815
	18,687	11,935
Other non-current financial liabilities	22,812	1,468
Provisions for risks and charges	8,973	8,059
Defined benefit plans	3,124	3,313
Deferred tax liabilities	514	527
Total non-current liabilities	54,110	25,302
Current liabilities
Bank overdrafts and short-term loans	40,662	50,797
Other current financial liabilities	10,039	33,523
Trade payables	53,090	58,351
Tax liabilities	2,604	4,990
Other current liabilities	6,650	8,885
Total current liabilities	113,045	156,546
TOTAL EQUITY AND LIABILITIES	212,237	253,663