Fiera Milano

Investor Presentation • May 10, 2022

Informazione Regolamentata n. 0620-15-2022		Data/Ora Ricezione 10 Maggio 2022 15:55:00	Euronext Star Milan
Societa'	:	FIERA MILANO
Identificativo Informazione Regolamentata	:	161927
Nome utilizzatore	:	FIERAMILANON05 - Cecere
Tipologia	:	REGEM
Data/Ora Ricezione	:	10 Maggio 2022 15:55:00
Data/Ora Inizio Diffusione presunta	:	10 Maggio 2022 15:55:02
Oggetto	:		Fiera Milano - Q1 2022 results presentation
Testo del comunicato

Vedi allegato.

Fiera Milano

The European hub for innovative, sustainable and high standing events

Results to 31 March 2022 10 May ²⁰²²

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Today's Presenters

Luca Palermo Chief Executive Officer General Manager

• > 1 year in Fiera Milano
• Prior experience: Emerge Edenred, Nexive, Vodafone, Bosch, Olivetti

Andrea Maldi Chief Financial Officer

• 1 year in Fiera Milano
• Prior experience: Borsa Italiana, General Electric, Kelly Services, Adecco, PwC

Vincenzo Cecere Head of Investor Relations & Sustainability

• Recenly joined Fiera Milano
• Prior experience: Cerved, Mediobanca

1. Executive summary

• 1. Business review
• 1. Financial review

Appendix

• 1. Fiera Miano at a glance and FY 2021 results
• 1. Key investment highlights

Executive summary

2022 EBITDA guidance confirmed

Business overview	▪ With 11 exhibitions held (e.g. HOMI, Promotion Trade Exhibition, Lineapelle, My Plant & Garden, Micam) and 10 congress events in just 2 months, Q1 2022 confirms the relaunch of Fiera Milano activities and a well-established restart with high appreciation both from participant exhibitors and buyers
Q1 2022 Financial Results	▪ Revenues of EUR 23.5m, an increase of EUR 21.9m compared to Q1 2021 ▪ EBITDA of EUR -2.4m, an improvement of EUR 7.5m compared to Q1 2021 ▪ EBIT of EUR -14.2m, an improvement of EUR 6.8m compared to Q1 2021 ▪ Net result of EUR -13.0m, an improvement of EUR 4.8m compared to Q1 2021 ▪ Net Financial Position (before IFRS 16) at 31 March 2022 resulting in Net Cash of EUR 33.2m
Q2 2022 preview and business outlook	▪ Q2 2022 opened with a number of important exhibitions (BIT-Borsa Internazionale del Turismo, Miart, SiSposa) and a packed calendar of high-standing events to be held during the quarter (MIDO, Ipack-IMA, MCE1 , Salone del Mobile) ▪ The strategic choice of rescheduling some events during the year proved to be a winning one, with postponed exhibitions able to fully express their potential, achieving better performances than expected. Looking to the future, however, the unknowns related to international geopolitical scenarios such as the Russian-Ukrainian crisis, remain ▪ Despite this, Fiera Milano continues to consider 2022 as the year in which to consolidate the ascent path by looking with confidence at the execution of the strategic plan CONN.E.C.T. 2025 and confirming the guidance of EBITDA 2022 in the range of 40-50 million euros
AGM 22 April 2022	▪ Financial Statements as of 31 December 2021 and Remuneration Policy approved ▪ Approved the authorization for buybacks programs 1)Mostra Convegno Expocomfort

A rich calendar of events for 2022

Detailed events calendar: https://www.fieramilano.it/calendario.html

International exhibitions

• 1. Executive summary
• 1. Business review
• 1. Financial review

Appendix

• 1. Fiera Miano at a glance and FY 2021 results
• 1. Key investment highlights

Snapshot of quarterly results

Revenues (€m)	Q1 2019	Q1 2020	Q1 2021	Q1 2022
Italian Exhibitions	63,0	42,3	0,9	20,8
Foreign Exhibitions	0,8	1,1	0,1	0,7
Congresses	7,0	4,0	0,5	2,2
Media1	2,7	2,1	0,3	-
Intercompany elisions	(2,2)	(1,9)	(0,3)	(0,2)
Consolidated Revenues	71,0	47,6	1,6	23,5

EBITDA (€m) Divisional results

EBITDA (€m)	Q1 2019	Q1 2020	Q1 2021	Q1 2022
Italian Exhibitions	24,6	15,1	(8,6)	(0,9)
Foreign Exhibitions	2,3	(0,1)	0,1	(0,5)
Congresses	1,8	0,4	(0,9)	(1,0)
Media1	0,3	(0,3)	(0,6)	-
Consolidated EBITDA	29,0	15,0	(9,9)	(2,4)

Q1 2022 Revenue split Q1 2022 Revenue split

Italian Exhibitions Foreign Exhibitions Congresses

1) In 2022, following the disposal of the "publishing headings" business unit, the activities relating to the Media sector were integrated into the Italian Exhibition sector.

Italian exhibition business (1/2)

Net square meters (k units)

• 10 exhibitions held in Q1 2022 with 144.705 net sqm occupied and more than 3.5k participating exhibitors
• 6 relevant exhibitions postponed for strategic purposes: BIT (Feb to Apr), Transpotec Logitec (Jan to May), HOMI (Jan to Mar), Salone del Mobile (Apr to Jun), Mido (Feb to May) and Mostra Convegno Expocomfort (Mar to June)
• Strategic choice of rescheduling some events during the year proved to be a winning one: first rescheduled event BIT-Borsa Internazionale del Turismo in April able to fully express its potential with better than expected performances
• Strong comeback of international buyers and visitors, especially in the Q1 2022 home décor and fashion exhibitions (e.g. HOMI with 40% of foreign brands participating, Si Sposaitalia with > 20% of international buyers, in line with pre-pandemic levels, HOMI Fashion&Jewels with 34% of foreign brands participating)
• Better incidence of rebooking of the most relevant owned biennial exhibitions (Host, Tuttofood, Sicurezza) compared to expectations

• Positive signals from the business of stand fittings following the relaunch of the trade fair activities in Q1 2022

• YoY comparison not meaningful due to Italian activities suspension in Q1 2021

• Revenues of €20.8m in Q1 2022 (+ €19.9m vs Q1 2021 despite the lack of 6 relevant exhibitions postponed from Q1 2022 to next quarters). Revenue contribution mainly coming from HOMI, Linea Pelle, Micam, Milano Unica
• Faster recovery of the business vs industry trend expectations
• EBITDA of €-0.9m (+ €7.7m vs Q1 2021)
• EBITDA aligned with Revenues trend, partially offset by the presence in Q1 2021 of the cost benefit coming from the Salary Integration Fund activation

Italian exhibition business (2/2)
				Net sqm		N. Participanting exhibitors
	Event	Industry	Trend	Q1 2021	Q1 2022	Q1 2021	Q1 2022
d e g a n a m y ctl e Dir		▪ Home décor, tableware, textiles, essences	▪ Another great edition for HOMI 2022, hosting 352 brands, 40% of which came from 27 foreign countries	▪ Postponed	▪ 10.955	▪ Postponed	▪ 225
		▪ Bijoux, trendy jewellery and fashion accessories	▪ HOMI F&J 2022 proved to be an essential showcase of trends: 400 brands hosted, 34% of which are from foreign countries	▪ Not taking place	▪ 9.400	▪ Not taking place	▪ 365
		▪ Promotional products, business gifts/equipment	▪ The special edition of PTE 2022 hosted 60 brands with a wide offer, demonstrating the restart of the industry	▪ Postponed	▪ 3.520	▪ Postponed	▪ 85
		▪ Leather goods, garments and furniture	▪ Over 960 exhibitors from 31 countries welcomed more than 13,000 visitors, offering a reassuring sign to the industry	▪ Not taking place	▪ 38.635	▪ Not taking place	▪ 950
		▪ High-end textiles and accessories	▪ The trust of exhibitors (2,850 Italian and 750 foreign companies) was rewarded by the buyer's presence (+16% compared to 2021)	▪ Not taking place	▪ 18.850	▪ Not taking place	▪ 385
d e st o H		▪ Leather, accessories, fabrics and synthetic	▪ Mipel, as a sign of encouragement for the leather goods business, doubled its exhibition spaces and hosted over 100 selected brands	▪ Not taking place	▪ 3.200	▪ Not taking place	▪ 110
		▪ Garden care, decoration and machinery	▪ 650 exhibitors and almost 19,000 visitors confirmed that Myplant is the driving force of all the green supply chains in Italy and beyond	▪ Not taking place	▪ 23.640	▪ Not taking place	▪ 565
		▪ Footwear and leather goods	▪ Micam was an opportunity to relaunch the sector once again, in a moment of a restart of the market despite the conflict in Ukraine.	▪ Not taking place	▪ 30.160	▪ Not taking place	▪ 630
	*	▪ Yarns and fibres for clothing and furnishing	▪ Filo 2022 and its exhibitors, who continued to believe even in times when uncertainty prevailed, obtained a positive result	▪ First time event	▪ 1.810	▪ First time event	▪ 90
		▪ Top-end clothing and accessories	▪ There was a success for The One Milano 2022, hosting 90 brands, 11 of which came from foreign countries	▪ Not taking place	▪ 3.715	▪ Not taking place	▪ 65

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Foreign Exhibitions Business

N. Exhibitions

Net square meters (k units)

• Due to the recent Covid breakthrough in Shanghai combined with the "zero Covid" strategy of the Chinese government and relates restrictions, the events in H1 2022 are expected to shift to the second half of the year
• 8 events postponed from 2020/2021 to 2022 confirmed. Will take place in June (2), September (2 ) and October (4)

• In 2021 signed 2 partnerships with dmg events for the launch of FIND (Furniture, Interiors e Design), the landmark Asian design industry event to be held in Singapore in 2022, 2023 and 2024 and the hosting in Rho venue of Gastech (Sep-2022), the world's largest international energy industry event

• Revenues of €0.7m in Q1 2022 (+ €0.7m vs Q1 2021) driven by the Investec Cape Town Art Fair exhibition

• EBITDA of €-0,5m in Q1 2022 (-€0.6m VS Q1 2021), mainly attributable to the negative result of the JV with Deutsche MESSE AG, which in Q1 2022 had not scheduled any event in China

Congresses

• 10 congress events held in Q1 2022 at the MiCo venue Milano Congressi, one of the largest and most modern conference centre in Europe, with space for approx.18k people
• Main events held:
  • 23rd AICCER National Congress, congress of the Italian association of Cataract and Refractive Surgery;
  • Convention held by Banca Generali;
  • Ferrari fashion show;
  • Palinsesto Publitalia;
  • Azimut convention.
• Fiera Milano Congressi will manage the new Turin Congress Centre (5,000 seats), to be built on the site of the former Westinghouse factory. Construction is scheduled to begin in 2022, with completion expected in 2024/25
• Revenues expected to be back to pre-pandemic level by the end of 2023

Revenues (€m) EBITDA (€m)

▪ Revenues of €2.2m in Q1 2022 (+ €1.6m vs Q1 2021)

▪ The decrease in EBITDA is mainly attributable to the absence in Q1 2021 of overhead costs associated with the management of the congress area, following the suspension of congress activities due to the Covid-19 pandemic

• 1. Executive summary
• 1. Business review
• 1. Financial review

Appendix

• 1. Fiera Miano at a glance and FY 2021 results
• 1. Key investment highlights

Income Statement

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Income Statement (€m)	FY2020	FY2021	Q1 2021	Q1 2022		REVENUES: €23.5m, an increase of €21.9m compared to Q1 2021
Revenues	73.6	129.8	1.5	23.5	1	▪ 11 exhibitions and 10 congress events held in just 2 months
Cost of materials	1.6	1.7	0.1	0.5		▪ 147.245 sqm occupied in Q1 2022 compared to 51.070 sqm sold in Q1 2021 ▪ 3,6k total participating exhibitors
Cost of services	45.5	74.3	5.8	14.1	2	▪ Positive results despite postponing relevant exhibitions to the next quarter
Costs for use of third party assets	0.5	0.5	0.1	0.2		▪ Comparison with Q1 2021 not meaningful since Italian operations were interrupted
Personnel costs	31.9	41.5	7.6	10.8	3	▪ \ Cost of services: €14.1m (c.60% of Q1 2022 Revenues), representing an increase of €8.3m compared to
Other operating expenses	2.5	2.9	0.5	0.5		Q1 2021 due to increased volume of activity related to the resumption of exhibition activities in presence
Total operating costs	81.9	121.0	13.9	25.9
Other income	16.9	73.1	2.6	0.7		Personnel costs: €10.8m (c.46% of Q1 2022 Revenues), an increase of €3.1m compared to Q1 2021 ▪ Wages, salaries and related social security contributions increasing if compared to the Q1 2021 cost
Results of equity-accounted companies	0.5	1.2	0.1	(0.7)		benefit related to the Salary Integration Fund (FIS) activation
Impairment of receivables and other accruals	(1.3)	5.9	0.2	(0.1)		EBITDA: €-2.4m, an improvement of €7.5m compared to Q1 2021
EBITDA	10.4	77.2	(9.9)	(2.4)	4	▪ Italian Exhibitions: EBITDA mainly affected by higher personnel costs if compared to Q1 2021
Depreciation and amortisation	44.8	45.2	11.2	11.8		Foreign Exhibitions: EBITDA mainly affected from the negative result of the joint venture with Deutsche MESSE AG which in Q1 2022 did not schedule any events in China due to Covid-19
Adjustments to asset values	0.0	0.0	0.0	-		restrictions
EBIT	(34.3)	31.9	(21.1)	(14.2)	5	▪ Congresses: EBITDA impacted by higher overhead costs associated with the management of the
Financial income/(expenses)	(12.7)	(13.4)	(3.0)	(3.1)		congress venues which fully offset the increase in revenues. It should be noted that in Q1 2021,
Valuation of financial assets	0.0	0.0	0.0	0.0		following the suspension of congress activity due to the Covid-19 pandemic, these costs were not present
Profit/(loss) before income tax	(47.0)	18.5	(24.1)	(17.4)
Income tax	(12.9)	(24.4)	(5.4)	(4.4)		EBIT: €-14.2m, an improvement of €6.8m compared to Q1 2021 following the positive EBITDA trend,
Net Income	(34.2)	44.1	(17.8)	(13.0)	6	counterbalanced by major D&A related to Q4 2021 investments
o/w attributable to the shareholders of the controlling entity	(33.9)	44.4	(17.7)	(12.9)		Net Income: €-13.0m, an improvement of €4.8m compared to Q1 2021

Balance sheet

	Balance Sheet (€m)	FY2020	FY2021	Q1 2022
	Goodwill	95.0	95.0	95.0
	Intangible assets with a defined useful life	17.0	18.5	17.8
	Right-of-use assets	431.7	392.5	396.5
	Tangible fixed assets	7.0	5.8	5.4
	Other non-current assets	43.0	61.8	65.8
A	Non-current assets	593.8	573.7	580.5
	Inventories	5.6	3.4	5.1
	Trade receivables	26.7	31.1	28.9
B	Current assets	32.2	34.5	34.0
	Trade payables	19.9	50.6	28.5
	Advances	30.6	36.0	51.1
	Tax liabilities	3.9	5.0	2.1
	Provisions for risks and charges and other current
	liabilities	13.4	29.2	31.6
C	Current liabilities	67.7	120.7	113.3
D	Net working capital (B - C)	(35.4)	(86.3)	(79.3)
E	Gross capital employed (A + D)	558.4	487.4	501.2
	Employee benefit provisions	10.1	9.5	9.2
	Provisions for risks and charges and other non-current
	liabilities	11.7	4.4	4.4
F	Non-current liabilities	21.7	13.9	13.6
G	NET CAPITAL EMPLOYED cont. operations (E - F)	536.7	473.5	487.6
H	NET CAPITAL EMPLOYED assets held for sale	0	0	0
	TOTAL NET CAPITAL EMPLOYED (G + H)	536.7	473.5	487.7
	covered by:
	Equity attributable to the Group	62.9	108.3	96.5
	Non-controlling interests	0.3	0.7	0.6
I	Total equity	63.2	109.0	97.1
	Cash & cash equivalents	(20.4)	(148.3)	(123.7)
	Current financial (assets)/liabilities	93.1	49.9	50.2
	Non-current financial (assets)/liabilities	400.8	463.0	464.1
L	Net Financial Debt/(Cash) post IFRS 16	473.4	364.5	390.5
	Net Financial Debt/(Cash) pre IFRS16	23.9	(47.4)	(33.2) 2
	EQUITY AND NET FINANCIAL DEBT (I + L)	536.7	473.5	487.6

Net Working Capital

• Structurally negative Net Working Capital equal to €-79.3m in Q1 2022 compared to €-86.3m in 2021
• Main Net Working Capital contribution in Q1 2022 coming from :
• Trade Payables:
  • From €50.6m in Q4 2021 to €28.5m in Q1 2022, resulting in a decrease of €22.1m related to the payment of expiring items to suppliers and organizers of events held in the last quarter of 2021
• Advances:
  • From €36.0m to €51.1m, resulting in an increase of €15.1m mainly related to the advances invoiced to customers for exhibitions in Q2 2022 (in particular Ipack-Ima, Host, Print4All and Miart)

Net Financial Debt/ (Cash) pre IFRS 16

• Net cash of €33.2m compared to a net cash of €47.4m as of 31 December 2021
• The negative change of €14.3m in net cash is mainly referred to Net Working Capital dynamics with the increase in Advances more than offset by the occasional decrease in Trade Payables

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Cash flow

Cash Flow (€m)	As of 31 Dec 2021	As of 31 Mar 2022
EBITDA	77.1	(2.4)
IFRS16 cash out	(47.8)	(6.4)
Δ Net Working Capital	50.8	(6.9)
Capex	(5.9)	(0.2)
Operating Cash Flow	74.2	(15.9)	1
Cash Interests & Income	(0.8)	(0.2)
Cash Taxes	(1.6)	(1.2)
Other	(0.5)	3.0
Free Cash Flow	71.3	(14.2)

Net debt/ (Cash) evolution

Operating Cash flow of €-15.9m in Q1 2022, mainly driven by:

• Quarterly EBITDA of €-2.4m
• IFRS16 cash out of €6.4m in Q1 2022 referred to the financial impact of the 4° rent installment of 2021. As previously communicated to the market, in Dec 2021 Fiera Milano reached and agreement with Fondazione Fiera Milano for the reduction of rent related to the Rho and Milan exhibition sites for a total value of €5.5m. The economic impact of the rent reduction has already been booked in 2021 income statement. The financial impact of €5.5 plus VAT has occurred in Q1 2022, resulting in a total cash out of €6.4m
• €6.9m of cash absorption coming from negative variation of Net Working Capital in Q1 2022 due to occasional decrease in Trade Payables not compensated by an increase of Advances referred to the upcoming exhibitions
• €3.0m of other variations referred to employees leaving indemnity, provisions and equity reserves variations (reserve for hedging operations and stock option reserve)

AGENDA

• 1. Executive summary
• 1. Business review
• 1. Financial review

Appendix

• 1. Fiera Miano at a glance and FY 2021 results
• 1. Key investment highlights

Fiera Milano at a glance

The Italian market leader and one of the main integrated operators worldwide in the management and organization of exhibitions and congresses

Key investment highlights

Strong commitment to ESG

• ESG themes moving to the top of the agenda with new framework and strategy integrated in the CONN.E.C.T. 2025 plan
• Top management remuneration linked to ESG targets reflecting selected SDGs
• FM leading the Italian fair trade industry association to Net Zero targets

Sound financials with low credit risk

• Sound financials driven by high visibility of results (multiyear events to be booked in advance)
• Favourable payment cycle due to advances payments contracts leading to a structurally negative NWC
• Strong operating cash generation combined with low capex requirements resulting in a positive net position and financial flexibility leaving room for M&A

Integrated business model with focus on tier 1 events

• Covering the entire value chain of the trade fare from renting exhibition areas to provide ancillary services
• Well diversified exhibition portfolio with concentration of high standing events which enjoy less volatility in terms of revenues and rented sqm and diversified industry mix
• Mainly B2B events with high exposure to attractive sectors

Institutional role with strong heritage culture

• Mission critical business for the Italian entrepreneurial fabric
• Strategic partner for Italian SMEs in their innovation, growth and internationalization paths supporting the Italian economy recovery and promoting the made in Italy in the world
• Strong heritage culture with the first exhibition held in 1922 and a track record of growth lasting for >100 years

Undisputed market leadership in Italy

6 1

5 2

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• High entry barriers due to limited venue capacity of other Italian players
• Largest trade-fair site in Italy with exhibition capacity more than double that of the n.2 player and ranking among the top one players at international level
• Highly fragmented market with room for consolidation

State of the art premises and strategic logistics

• Best-in-class premises with strategic locations close to airports, undergrounds, train stations and urban centers
• Predominant exposure to one of the richest EU region
• Fieramilano (Rho): 6° trade fair center in the world with its 345k sqm

Disclaimer

This presentation and any materials distributed in connection herewith (together, the "Presentation") do not constitute or form a part of, and should not be construed as, an offer for sale or subscription of or solicitation of any offer to purchase or subscribe for any securities, and neither this Presentation nor anything contained herein shall form the basis of, or be relied upon in connection with, or act as an inducement to enter into, any contract or commitment whatsoever.

The information contained in this Presentation has not been independently verified and no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness, reasonableness or correctness of the information or opinions contained herein. None of Fiera Milano S.p.A., its subsidiaries or any of their respective employees, advisers, representatives or affiliates shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this Presentation. The information contained in this Presentation is provided as at the date of this Presentation and is subject to change without notice.

Statements made in this Presentation may include forward-looking statements. These statements may be identified by the fact that they use words such as "anticipate", "estimate", "should", "expect", "guidance", "project", "intend", "plan", "believe", and/or other words and terms of similar meaning in connection with, among other things, any discussion of results of operations, financial condition, liquidity, prospects, growth, strategies or developments in the industry in which we operate. Such statements are based on management's current intentions, expectations or beliefs and involve inherent risks, assumptions and uncertainties, including factors that could delay, divert or change any of them. Forward-looking statements contained in this Presentation regarding trends or current activities should not be taken as a representation that such trends or activities will continue in the future. Actual outcomes, results and other future events may differ materially from those expressed or implied by the statements contained herein. Such differences may adversely affect the outcome and financial effects of the plans and events described herein and may result from, among other things, changes in economic, business, competitive, technological, strategic or regulatory factors and other factors affecting the business and operations of the company. Neither Fiera Milano S.p.A. nor any of its affiliates is under any obligation, and each such entity expressly disclaims any such obligation, to update, revise or amend any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on any such forward-looking statements, which speak only as of the date of this Presentation.

It should be noted that past performance is not a guide to future performance. Please also note that interim results are not necessarily indicative of full-year results.

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