D'Ieteren Group

Earnings Release • Apr 28, 2022

D'Ieteren Group sets new 2025 Ambitions during its Investor Day and gives a sales trading update for Q1-22

Investor Day

D'Ieteren Group is hosting today its 2022 Investor Day in Brussels, starting at 8.30am CET.

Management teams of portfolio companies will address the evolutions in their respective markets and give their strategic directions and financial and non-financial ambitions towards 2025.

D'Ieteren Group's Management Team will also present the Group's perspectives, strategy and capital allocation policy.

Presentations will be webcast live here and replays will be available shortly after the event. Presentation slides are available on www.dieterengroup.com simultaneously to the publication of this press release.

2025 ambitions in a nutshell\*

All portfolio companies have strong ambitions for the coming years thanks to the positive trends observed and the leadership positions they hold in their respective industries.

	D'leteren Automotive	Belron	TWH Parts	Moleskine
Sales growth (CAGR 2021-2025)	>10%	High single digit	~8%	Low double-digit
Adjusted operating margin (by 2025)	>4%	>23%	>14%	>25%
Annual Adjusted free cash-flow6 (by 2025)	>€165m	>€850m	>€170m	>€30m

• D'Ieteren Automotive ambition is to increase sales by more than 10% CAGR over the period 2021-25. This should be driven by better volumes, continued price / mix increase and acceleration in other mobility services. Adjusted¹ operating profit margin is expected to reach minimum 4% by 2025 (vs. 3.2% in 2021) thanks to topline drivers, focus on margin and continued cost discipline. This, together with further focus on working capital management, should enable D'Ieteren Automotive to generate minimum €165m of free cash-flow6 by 2025.
• At Belron, top-line growth and margin improvement will continue to be driven by market share gains, VGRR value growth, and by an increased contribution from ADAS recalibration fees and VAPS attachment rates. As a result, Belron expects its sales to grow by a high single digit percentage on average over the 2021-25 period.

^* The 2025 ambitions reflect the current views of management regarding the future performance of the portfolio companies, and is based on a number of assumptions, estimates and expectations. If any of these assumptions, estimates or expectations would turn out to be incorrect, the actual performance could be materially different.

Sales growth, as well as cost efficiency namely coming from the Transformation Programme, will also enable margin expansion, with an ambition of an adjusted 1 operating margin exceeding 23% by 2025. This should lead to an adjusted free cash-flow generation6 of minimum €850m by 2025. The strong ambition in operational performance should allow for significant dividend distribution to shareholders in the years to come while reaching the 2025 leverage target of 3.0x NFD3/EBITDA4.

• Moleskine will pursue its 'Fewer, Bigger, Better' strategy, which should drive a low double digit top-line 2021- 2025 CAGR and help to reach EBIT margins of at least 25% by 2025, which in turn, together with strict working capital management, should lead to a free cash-flow6 generation of minimum €30m by 2025.
• For TVH, sales are expected to grow organically5 by c.8% on average per year between 2021 and 2025, driven by continued strong demand in existing regions / market segments and market share gains, while EBIT margin should remain above 14% and free cash-flow6 should reach at least €170m by 2025.

At the Group level, excluding PHE's contribution (for which closing is expected by the end of Q3-22), these ambitions should translate into more than €950m for the Group's KPI (adjusted1PBT, Group's share).

The significant adjusted free cash-flow6 generation at portfolio companies of close to €2bn cumulative to 2025 (Group's share) should allow to deleverage and distribute significant dividends to D'Ieteren Group and enable it to pursue its strategic ambitions, which are the following:

• Support current portfolio companies for the long-term
• Invest in several additional growth pillars
• Remunerate shareholders.

On the ESG front, D'Ieteren Group is pleased to announce that it has committed to the Science Based Target initiative (SBTi), with the goal of having 100% of its current portfolio covered by a validated SBT by the end of 2025.

Francis Deprez, D'Ieteren Group's CEO, comments : « Our activities have built and shown strong resilience in the turbulent recent years and are expected to continue to overdeliver in the coming years, setting ambitious financial and non-financial objectives for 2025. At the Group level, we support them actively in their development and pursue our investment strategy systematically and with discipline, as we have done in the recent past with the additions of TVH, presenting today, and PHE, for which the deal is expected to close in the third quarter. We look at the coming years with confidence and determination, and believe that the leadership position of our businesses combined with their customercentric approaches will allow us to face future uncertainties."

Q1-22Trading Update

D'Ieteren Group confirms the FY-22 outlook provided at the beginning of the year and provides the Q1-22 sales evolution of its businesses.

Belron

Belron's total sales (at 100%) increased by 18.4% to €1,255.5m in Q1-22. While volumes increased by 9.9% YoY, sales growth was further driven by a continuing positive price / mix, ADAS recalibration fees and VAPS in all regions.

Sales from continuing operations increased by 21.1%, comprised of:

• Organic5 growth of 15.8%;
• Growth from acquisitions of 1.2%;
• and a positive currency translation effect of 4.0% which is primarily due to the appreciation of the US dollar.

North America (58% of total) sales from continuing operations increased by 28.2%. Organic5 and external growth were respectively 20.9% and 0.5%. This was boosted by a positive currency effect of 6.7%.

Eurozone (28% of total) saw a 11.2% growth in sales from continuing operations, comprising of 8.4% organic5 growth, acquisitional growth of 2.7% and a marginally positive 0.1% currency impact.

Rest of World (14% of total) sales from continuing operations increased by 14.2%, of which 11.3% organic5, acquisitional growth of 0.9% and 2.0% favourable currency translation.

D'Ieteren Automotive

Market

The Belgian new car market was strongly impacted by the supply issues due to the shortage of components (semiconductors and cabling subcontracting in Ukraine) in the first quarter. The number of Belgian new car gross registrations decreased by 13.5% YoY to 103,146 units in the quarter, of which -10.0% in January, -11.9% in February, and -17.7% in March.

The private segment declined significantly by 25.8% while the business segment (61.6% of total new car registrations) was more resilient at -3.5% compared to last year. New energy share in the market mix continued to increase to 32.1% versus 19.2% in the first quarter of last year.

D'Ieteren Automotive

Despite lower volumes year-over-year, D'Ieteren Automotive's sales increased by 6.7% to €969.3m in Q1-22, essentially driven by a positive price / mix due to an increased focus on electric vehicles as well as a continued premiumization of the park.

D'Ieteren Automotive's market share increased by 10bps to 21.7% in terms of gross registrations, with a strong Audi and Porsche performance compensating lower VW, Skoda and Seat performance. D'Ieteren Automotive remains the leader in full electric vehicles with a market share of 25.4%.

Registrations of new light commercial vehicles (0 to 3.5 tonnes) are also affected by supply chain issues and consequently decreased by 32.4% to 15,118 units and D'Ieteren Automotive's market share increased to 7.6% of net registrations2.

The total number of new vehicles, including commercial vehicles, delivered by D'Ieteren Automotive in Q1-22 reached 24,563 units (-14.0%), also impacted by factory supply issues due to a shortage of components. The order book stood at a record level of more than 94k units at the end of March.

TVH

TVH continued to experience a strong sales momentum in Q1-22, with sales of €384.1m, a 24.0% YoY increase, of which 16.4% organic5 at constant FX, 4.0% related to FX movements and 3.6% from acquisitions. The growth in the first quarter is driven by a healthy mix of volumes and price increases across regions and markets.

• Americas region is performing very well at +29.5% (+20% in USD) across all segments.
• EMEA region grew by 13% YoY, with particularly strong growth in CPA market. CIS countries still posted growth vs 2021 for Q1 but we see a drop in March (and for sure in April), due to Russia-Ukraine war and imposed sanctions.
• APAC region sales increased by 14% YoY, even if Covid still had an impact in certain countries.

Moleskine

Q1-22 sales improved from €21.5m in Q1-21 to €27.6m in Q1-22 (+28.5%, or +23.5% excluding positive FX impact). Paper continued to lead sales performance, while retail recovered from levels still impacted by Covid last year.

By region, Americas grew by 42%, EME by 33% and APAC, impacted by Covid, was down by 11%.

PRESS RELEASE: 2025 AMBITIONS AND Q1-22 TRADING UPDATE

Thursday 28 April 2022 – 7:00am CET

Notes

1 In order to better reflect its underlying performance and assist investors in gaining a better understanding of its financial performance, D'Ieteren Group uses Alternative Performance Measures ("APMs"). These APMs are non-GAAP measures, i.e. their definitions are not addressed by IFRS. D'Ieteren Group does not present APMs as an alternative to financial measures determined in accordance with IFRS and does not give to APMs greater prominence than defined IFRS measures.

2 In order to provide an accurate picture of the car market, Febiac publishes market figures excluding registrations that have been cancelled within 30 days. Most of them relate to vehicles that are unlikely to have been put into circulation in Belgium by the end customer.

3 The net financial debt is not an IFRS indicator. D'Ieteren Group uses this Alternative Performance Measure to reflect its indebtedness. This non-GAAP indicator is defined as the sum of the borrowings minus cash, cash equivalents and investments in non-current and current financial assets.

4 EBITDA is not an IFRS indicator. This APM (non-GAAP indicator) is defined as earnings before interest, taxes, depreciation and amortization. Since the method for calculating the EBITDA is not governed by IFRS, the method applied by the Group may not be the same as that adopted by others and therefore may not be comparable.

5 "Organic growth" is an Alternative Performance Measure used by the Group to measure the evolution of revenue between two consecutive periods, at constant currency and excluding the impact of change in perimeter of consolidation or business acquisitions.

6 Adjusted free cash-flow is not an IFRS indicator. This APM measure is defined as [Adjusted EBITDA - other non-cash items – change in working capital – capital expenditures – capital paid on lease liabilities – taxes paid – interest paid – acquisitions + disposals – employee share plans – cash-flow from adjusting items + other cash items]

Forward looking statements

This document contains forward-looking information that involves risks and uncertainties, including statements about D'Ieteren Group's plans, objectives, expectations and intentions. Readers are cautioned that forward-looking statements include known and unknown risks and are subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the control of D'Ieteren Group. Should one or more of these risks, uncertainties or contingencies materialise, or should any underlying assumptions prove incorrect, actual results could vary materially from those anticipated, expected, estimated or projected. As a result, D'Ieteren Group does not assume any responsibility for the accuracy of these forward-looking statements.

End of press release

D'Ieteren Group profile

In existence since 1805, and across family generations, D'Ieteren Group seeks growth and value creation by pursuing a strategy on the long term for its businesses and actively encouraging and supporting them to develop their position in their industry and geographies. The Group currently owns the following businesses:

• Belron (50.01% of economic rights, fully diluted) has a clear purpose: "making a difference by solving people's problems with real care". It is the worldwide leader in vehicle glass repair and replacement and operates in 37 countries, through wholly owned businesses and franchises, with market leading brands – including Carglass®, Safelite® and Autoglass®. In addition, Belron manages vehicle glass and other insurance claims on behalf of insurance customers. Sales and adjusted operating result reached respectively €4,647m and €815m in FY-21.
• D'Ieteren Automotive (100% owned) distributes Volkswagen, Audi, SEAT, Škoda, Bentley, Lamborghini, Bugatti, Cupra, Rimac and Porsche vehicles in Belgium. It has a market share of more than 23% and 1.2 million vehicles on the road. Its business model is evolving towards "improving the lives of citizens with fluid, accessible and sustainable mobility". Sales and adjusted operating result reached respectively €3,239m and €103m in FY-21.
• TVH Parts (40% owned), is a leading global independent distributor for aftermarket parts for material handling, construction & industrial, and agricultural equipment. It operates in 26 countries worldwide. It has a unique operating model and has a clear purpose of "keeping customers going and growing".
• Moleskine (100% owned) is a premium and aspirational lifestyle brand which develops and sells iconic branded notebooks and writing, travel and reading accessories through a global multichannel platform. Its purpose is to "unleash the human genius through hands on paper to empower creativity and knowledge in each individual and the entire world". Sales and adjusted operating result reached respectively €122m and €12m in FY-21.
• D'Ieteren Immo (100% owned) groups together the Belgian real estate interests of D'Ieteren Group. It owns and manages 37 sites which generated €21.7m net rental income in FY-21. It also pursues investment projects and carries out studies into possible site renovations.

Financial Calendar

Last five press releases (with the exception of press releases related to the repurchase or sale of own shares)		Next events
27 April 2022	Publication of the Annual Report 2021	2 June 2022	General Assembly
14 March 2022	Signing of a definitive agreement regarding the acquisition of PHE	5 September 2022	2022 Half-Year Results
8 March 2022	D'Ieteren Group to resume its share buyback programme
8 March 2022	2021 Full-Year Results
14 February 2022	D'Ieteren Group in exclusive discussion to acquire Parts Holding Europe (PHE)

Contacts

Francis Deprez, Chief Executive Officer Arnaud Laviolette, Chief Financial Officer

Stéphanie Voisin, Investor Relations - Tel: + 32 (0)2 536.54.39 E-mail: financial.communication@dieterengroup.com – Website: www.dieterengroup.com