Amplifon — Investor Presentation 2019

Mar 5, 2019

FY2018 Results & Strategic Update

Milan, March 5th, 2019

Disclaimer

The information contained herein and other material discussed during the conference call, particularly the ones regarding any possible or assumed future performance of the Amplifon Group, are or may be forward looking statements and in this respect they involve some risks and uncertainties.

Any reference to past performance of Amplifon shall not be taken as an indication of future performance.

This document is being provided to you solely for your information and may not be reproduced or redistributed to any other person.

This presentation does not constitute an offer to sell or the solicitation of an offer to buy the securities discussed herein.

IFRS 15 & IFRS 9

From January Ist, 2018 the Group has adopted the principle IFRS 15 "Revenue from contracts with customers" and IFRS 9 "Financial instruments", which have led to changes in accounting policies and in some cases adjustments to the amounts recognized in the financial statements. The comparative data for 2017 have not been restated, while the data for 2018 is also presented without the application of IFRS 15. Thus the comparative analysis in the Section "FY 2018 Results" of this presentation refers, unless otherwise specified, to 2018 data without the application of IFRS 15, since the impact of IFRS 9 is negligible.

Statement

In compliance with Article 154 bis of the "Uniform Financial Services Act" (Legislative Decree 58/1998), the Financial Reporting Officer, Gabriele Galli, declares that the accounting information reported in this presentation corresponds to the underlying documentary reports, books of account and accounting entries.

Speakers on today's call

Enrico Vita Chief Executive Officer

Gabriele Galli Chief Financial Officer

Alessandro Bonacina Chief Marketing Officer

Lorenzo Fiorani General Manager, Spain

$\overline{2}$

I. FY2018 Results

II. Strategic Update

Update on our key initiatives to reshape the hearing care retail around the customer

Our plan in Spain: GAES integration

Tanzania (h. 1878).
Naskiĝoj

2020 ambitions: continuous delivery of strong growth & returns

amplifon

2018 Key milestones

Beyond financials, a very special year

GAES, largest acquisition ever

A new dimension for the Group

July 2018

■ 29 countries, ~16,000 people, II% global market share

Perfect fit with Amplifon's strategy

• " Absolute leader in Spain, entry in LATAM
• Unique assets: brand, network & highly recognized organization
• " Tremendous synergy & value creation potential

Entry in the FTSE MIB

Italian primary benchmark equity index $-$ 40 most liquid and capitalized stocks

December 2018

May 2018

November 2018

Successful launch of Amplifon Product Line in Italy

Excellent response from customers

• ~90% adoption rate
• $\blacksquare$ >15% APP penetration²

Strong ADV effectiveness & CRM redemption

First JV in Ching

Entry in the attractive and fastgrowing Chinese market Joint Venture with the leading retailer in the Beijing area Sizeable opportunity for the mediumlong term

I. Private and paid-up market 2. On Amplifon product line compatible hearing aids

FY2018: a truly outstanding year

Fourth year in a row of record results

• Outpacing the global hearing care retail market (>2x market growth)
• Leadership consolidation and market share gains in core markets
• Positive market dynamics, growing ~5%¹ $\mathbb{R}^n$
• Record revenues delivering double-digit top-line growth (FY 2018: +10.6% in LC; Q4 2018: +11.2% in LC)
• Very strong organic growth $\mathbf{m}_{\mathrm{eff}}$
• Robust contribution from M&A
• Challenging comparable basis (+II.7% in FY2017 vs FY2016; +10.7% in Q4 2017 vs Q4 2016) $\mathbf{m}_{\perp}$
• Continued profitability improvement with EBITDA recurring margin up ~40 bps, while continuing to invest for longterm sustainable growth
• Strong marketing investments (~+20%)
• All-time high of Net Profit recurring, €II3.4 million, driven by operating leverage, financial expenses optimization and lower tax rate
• Ongoing network expansion: 27I shops & 86 SiS² $\blacksquare$
• Acquisition of 226 shops and 33 SiS² primarily in France, Germany, Canada and China $\mathbf{u}$ .
  • Net cash-out totaled $\sim \epsilon$ 90 million
• Openings of 45 shops & 53 SiS

I. Refers to Amplifon reference markets and private segment 2. Net of Brazil divesture and of GAES acquisition Commentary refers to FY 2018, if not stated differently For comparability purpose commentary and figures refers to data prepared without the adoption of IFRS I5 ("@'17 IFRS") being the impact of IFRS 9 totally irrelevant, if not stated differently

FY2018 Financial highlights

Another year of excellent top-line growth and profitability expansion

		FY 2018		$\Delta\%$
Data in $\epsilon$ m	@'18 IFRS	@'17 IFRS		$@'17$ IFRS
REVENUES	1.362.2	1,372.7	1,266.0	$+8.4%$
Organic growth				$+7.0%$
Acquisitions				$+3.6%$
FX.				$-2.2%$
EBITDA Rec.	233.9	241.3	217.5	$+11.0%$
Margin %	17.2%	17.6%	17.2%

• Strong top-line growth of +10.6% in LC
• Outstanding organic growth at +7.0%
• Currency headwind for both USD/EUR and AUD/EUR, although reducing throughout the year
• Remarkable comparable basis
• Solid operating leverage
• EBITDA recurring of €241.3 million, up II.0% or EBITDA recurring margin up ~40 bps over FY20I7
  • Marketing: ~+20%
• Net Profit recurring of €II3.4 million, +19.3% vs FY20I7
• Net Profit as reported of €106.7 million
• · Dividend proposal increased by 27.3% to I4 euro cents vs II euro cents of last year
• Strong cash generation with FCF recurring at ~€II8 million
• Net debt at €840.9 million, corresponding to 3.llx Net debt/EBITDA^I, mainly reflecting cash-out for GAES acquisition
• IFRS I5 impact on revenues and EBITDA of respectively, $-\epsilon$ 10.5m and $-\epsilon$ 7.4m; no cash impact

I. Ratio Net Debt/EBITDA calculated as per definition of covenant in the GAES financing facility contract and applying frozen GAAP (as per contract) Commentary refers to FY 2018, if not stated differently

For comparability purpose commentary and figures refers to data prepared without the adoption of IFRS I5 ("@'17 IFRS") being the impact of IFRS 9 totally irrelevant, if not stated differently

Continued delivery on our promises

Key financial targets

Q4 2018 Financial highlights

An outstanding year-end: excellent organic growth and continued strong profitability expansion

	Q4 2018		Q4 2017	$\Delta\%$
Data in $\epsilon$ m	@'18 IFRS	$@'17$ IFRS		@'17 IFRS
REVENUES	399.5	405.1	364.2	$+11.2%$
Organic growth				$+7.4%$
Acquisitions				$+3.8%$
FX.				0.0%
EBITDA Rec.	83.4	87.0	76.7	$+13.4%$
Margin %	20.9%	21.5%	21.1%

• Another quarter of strong double-digit top-line growth in LC $(H.2%)$
• Outstanding organic growth at +7.4%
• Robust M&A contribution
• Remarkable Q4 2017 comparable basis (+10.7% vs. Q4 2016)
• Strong profitability improvement
• EBITDA recurring margin up by $~40$ bps
  • Marketing: ~+10%
• Net Profit recurring of €48.I million, +9.I% vs Q4 2017, which benefited by an exceptionally low tax rate
• Ongoing network expansion with M&A in core countries: Germany, France, Canada and China
• Strong free cash flow generation
• IFRS I5 impact on revenues and EBITDA of respectively, -€5.6m and -€3.6m; no cash impact

Financial results by Region

EMEA: outstanding execution delivering excellent profitable growth

	FY 2018		FY 2017	$\Delta\%$
Data in $\epsilon$ m	@'18 IFRS	$@'17$ IFRS		$@'17$ IFRS
REVENUES	952.3	960.4	855.6	$+12.2%$
Organic growth				$+7.9%$
Acquisitions				$+4.8%$
FX.				$-0.5%$
EBITDA Rec.	179.2	185.9	150.4	$+23.6%$
Margin %	18.8%	19.4%	17.6%

		Q4 2018		$\Delta\%$
Data in $\epsilon$ m	$@'18$ IFRS	$@'17$ IFRS		$@'17$ IFRS
REVENUES	290.9	295.5	260.5	$+13.4%$
Organic growth				$+9.4%$
Acquisitions				$+4.1%$
FX.				$-0.1%$
EBITDA Rec.	70.3	74.O	60.2	$+23.0%$
Margin %	24.2%	25.1%	23.1%

• · Performance well-above market reference (2x market growth)
• Outstanding revenue growth of +12.7% in LC
• Excellent organic growth at ~+8%, reaching all-time high of +9.4% in Q4
• · Significant contribution from M&A
• Very challenging comparable basis (+13.5% in FY 2017 vs FY 2016)
• Strong performance in Italy also fostered by the ongoing successful roll-out of Amplifon product line and ecosystem
• Excellent performance in France and Germany fostered by strong organic growth and acquisitions
• Outstanding growth of over 30% for Spain, primarily organic
• Excellent EBITDA margin improvement of I80 bps, after higher marketing investments (~+20% vs. FY 2017)
• · Top-line growth, operational efficiency and scale-reach in core countries

Commentary refers to FY 2018, if not stated differently For comparability purpose commentary and figures refers to data prepared without the adoption of IFRS I5 ("@'I7 IFRS") being the impact of IFRS 9 totally irrelevant, if not stated differently

Financial results by Region

AMERICAS: strong performance & continued profitability improvement, progressively accelerating throughout the year

	FY 2018		FY 2017	$\Delta\%$
Data in $\epsilon$ m	@'18 IFRS	@'17 IFRS		$@'17$ IFRS
REVENUES	231.8	234.4	228.9	$+2.4%$
Organic growth				$+5.7%$
Acquisitions 2				$+1.3%$
FX.				$-4.6%$
EBITDA Rec.	46.2	47.O	45.2	$+4.1%$
Margin %	19.9%	20.1%	19.7%

		Q4 2018	Q4 2017	$\Delta\%$
Data in $\epsilon$ m	@'18 IFRS	$@'17$ IFRS		$@'17$ IFRS
REVENUES	63.8	65.0	57.3	$+13.3%$
Organic growth				$+7.4%$
Acquisitions 2				$+3.4%$
FX.				$+2.5%$
EBITDA Rec.	13.9	13.9	II.6	$+19.2%$
Margin %	21.8%	21.3%	20.3%	$\overline{\phantom{a}}$

• Solid performance in a structurally growing market (~+5%!)
• Strong revenue growth at +7.0% in LC, progressively accelerating throughout the year
• Robust organic growth, consistently improving since beginning of the year and closing with a strong +7.4% in Q4
• Currency headwind, although reversing in H2
• Growth driven by very strong performance of both Miracle-Ear and AHHC
• Solid growth in Canada, fostered by M&A
• EBITDA margin improvement by 40bps, with a strong end-ofyear (+I00bps in Q4)
• Operational efficiency
• Challenging comparison basis (I7Obps EBITDA margin improvement in FY 2017 vs FY 2016)

I. Refers to US private market 2. Net of Brazil divesture Commentary refers to FY 2018, if not stated differently For comparability purpose commentary and figures refers to data prepared without the adoption of IFRS I5 ("@'I7 IFRS") being the impact of IFRS 9 totally irrelevant, if not stated differently

Financial results by Region

APAC: solid sales performance in LC despite market softness in H2; profitability reflecting significant marketing investments and negative FX translative effect

	FY 2018		FY 2017	$\Delta\%$
Data in $\epsilon$ m	@'18 IFRS	@'17 IFRS		$@'$ IFRS
REVENUES	174.5	174.4	179.0	$-2.6%$
Organic growth				$+3.9%$
Acquisitions				$+0.7%$
FX.				$-7.2%$
EBITDA Rec.	43.8	43.6	51.5	$-15.3%$
Margin %	25.1%	25.0%	28.8%

		Q4 2018		$\Delta\%$
Data in $\epsilon$ m	$@'18$ IFRS	$@'17$ IFRS		$@'$ IFRS
REVENUES	42.9	42.9	45.0	$-4.7%$
Organic growth				$-5.0%$
Acquisitions				$+2.8%$
FX.				$-2.5%$
EBITDA Rec.	8.8	8.8	13.2	$-33.4%$
Margin %	20.6%	20.5%	29.3%

• Performance above market reference a.
• Australian market growth at ~+2%, though softening to flattish in $H2$
• New Zealand market growth at ~+2%, softening in H2 due to anniversary of regulatory change in 2013
• Solid revenue growth of ~+5% in LC, mostly organic
• Very challenging comparison base (+9.9% in FY 2017 vs FY 2016; organic growth in Q4 2017 of +9.9% vs Q4 2016)
• Positive organic growth in Australia, despite softer performance at year-end in a flattish market environment
• Robust organic growth in New Zealand ٠
• Back to solid growth at the beginning of the year (January and ٠ February)
• EBITDA at €43.6 million
• Adverse FX translative effect
• Strong marketing investments, to support NHC new brand image and positioning (~+40% in FY 2018 vs FY 2017)
• Impact of weaker market environment on fixed cost absorption $\mathbf{r}$ . in Australia in H2

Commentary refers to FY 2018, if not stated differently

For comparability purpose commentary and figures refers to data prepared without the adoption of IFRS I5 ("@'I7 IFRS") being the impact of IFRS 9 totally irrelevant, if not stated differently

Q4 2018 Financial results

Delivering excellent results across the whole P&L

Data in $\epsilon$ m	Q4 2018 @'18 IFRS		Q4 2018 @'17 IFRS			Q4 2017
(unless specified)	Recurring	Reported	Recurring	Reported	Recurring	Reported	$\Delta$ % Rec. @'17 IFRS
REVENUES	399.5	399.5	405.1	405.1	364.2	364.2	$+11.2%$
EBITDA	83.4	80.9	87.0	84.5	76.7	75.6	$+13.4%$
Margin %	20.9%	20.3%	21.5%	20.9%	21.1%	20.8%
D&A	(20.4)	(20.4)	(20.4)	(20.4)	(17.1)	(17.3)	$+19.4%$
EBIT 2	63.0	60.5	66.6	64.I	59.6	58.3	$+11.7%$
Margin %	15.8%	15.1%	16.4%	15.8%	16.4%	16.0%
NET FINANCIAL EXPENSES 3	(2.0)	(2.6)	(2.0)	(2.6)	(5.0)	(5.0)	$+59.0%$
PBT 4	60.9	57.9	64.5	61.5	54.6	53.3	$+18.2%$
TAXES	(15.8)	(15.0)	(16.4)	(15.7)	(10.6)	(I.O)	$-54.6%$
% on PBT	25.9%	26.0%	25.4%	25.5%	19.4%	1.8%
MINORITY	O.I	O.I	O.I	O.1	(O.l)	(O.l)
NET PROFIT5	45.1	42.8	48.1	45.8	44.1	52.4	$+9.1%$
Margin %	II.3%	10.7%	II.9%	II.3%	12.1%	14.4%
EPS (Euro)	0.205	0.194	0.218	0.208	0.201	0.239	$+8.6%$

Negative one-off in Q4 20I8 of €2.5 million for GAES acquisition. Negative one-off in Q4 20I7 of €LI million for restructuring charges related to AudioNova and MiniSom acquisitions $\mathbf{L}$

1. Negative one-off in Q4 20I7 of €2.5 million for item in Note I. Negative one-offs in Q4 20I7 of €LI million for item in Note I and €0.2 million write-down following the closing of Audionova stores in Portugal

2. Negative one-off in Q4 20I8 of €0.6 million for financial expenses related to GAES acquisition

3. Negative one-off in Q4 2018 of €3.0 million for items in Notes above. Negative one-off in Q4 2017 of €1.3 million for items in Notes above

4. Negative one-off in Q4 20I8 of €2.3 million related to items in Notes above net of taxes. Positive one-off in Q4 20I7 of €8.3 million (for the impact of items in Notes above net of taxes and for positive one-off of €9.6 million due to change in deferred taxation in the US due to tax reform)

FY 2018 Financial results

Sharp improvement in all profitability lines, leading to an increase of ~+20% in Net Profit recurring

Data in $\epsilon$ m	FY 2018 @'18 IFRS		FY 2018 @'17 IFRS			FY 2017
(unless specified)	Recurring	Reported	Recurring	Reported	Recurring	Reported	$\Delta$ % Rec. @'17 IFRS
REVENUES	1,362.2	1,362.2	1,372.7	1,372.7	1,266.0	1,266.0	$+8.4%$
EBITDAI	233.9	225.5	241.3	232.9	217.5	212.5	$+11.0%$
Margin %	17.2%	16.6%	17.6%	17.0%	17.2%	16.8%
D&A	(72.2)	(72.2)	(72.2)	(72.2)	(62.6)	(62.8)	$+15.3%$
EBIT 2	161.8	153.3	169.2	160.7	154.9	149.7	$+9.2%$
Margin %	II.9%	II.3%	12.3%	II.7%	12.2%	II.8%
NET FINANCIAL EXPENSES 3	(14.1)	(14.7)	(14.1)	(14.7)	(19.3)	(19.3)	$+27.1%$
PBT 4	147.7	138.6	155.1	146.0	135.6	130.3	$+14.4%$
TAXES	(40.6)	(38.2)	(41.8)	(39.3)	(40.6)	(29.9)	$-2.8%$
% on PBT	27.5%	27.5%	26.9%	26.9%	30.0%	22.9%
MINORITY	(0.0)	(0.0)	(0.0)	(O.O)	(O.l)	(O.l)
NET PROFIT5	107.1	100.4	$II$ 3.4	106.7	95.0	100.6	$+19.3%$
Margin %	7.9%	7.4%	8.3%	7.8%	7.5%	7.9%
EPS (Euro)	0.487	0.457	0.516	0.485	0.434	0.459	$+18.9%$

Negative one-off in FY 20I8 of €8.5 million for GAES acquisition. Negative one-off in FY 20I7 of €5.0 million for restructuring charges related to AudioNova and MiniSom acquisitions $\mathsf{L}$

1. Negative one-off in FY 2017 of €8.5 million for item in Note I. Negative one-offs in FY 2017 of €5.0 million for item in Note I and €0.2 million write-down following the closing of Audionova stores in Portugal

2. Negative one-off in FY 2018 of €0.6 million for financial expenses related to GAES acquisition

3. Negative one-off in FY 20I8 of €9.I million for items in Notes above. Negative one-off in FY 20I7 of €5.2 million for items in Notes above

4. Negative one-off in FY 20I8 of €6.7 million related to items in Notes above net of taxes. Positive one-off in FY 20I7 of €5.6 million (for the impact of items in Notes above net of taxes and for positive one-off of €9.6 million due to change in deferred taxation in the US due to tax reform)

FY 2018 Financial results

Strong cash flow generation supporting Capex and M&A to foster Company's growth

Data in $\epsilon$ m	FY 2018	FY 2017 2	Δ
Operating cash flow (a)	186.5	168.6	17.8
Capex (net) (b)	(76.1)	(70.7)	(5.5)
Free cash flow (a+b)	IIO.3	98.O	12.3
Acquisitions (net) (c)	(620.2)	(III.5)	(508.7)
Cash provided by (used in) operating and investing activities	(509.9)	(13.5)	(496.4)
Cash flow provided by (used in) investing activities (b+c)	(696.3)	(182.2)	(514.2)
Cash provided by (used) financing activities	(35.6)	(52.8)	17.2
Net cash flow for the period	(545.5)	(66.3)	(479.2)
Net financial position (opening date)	(296.3)	(224.4)	(71.8)
Change in net financial position	(545.5)	(66.3)	(479.2)
Effect of FX & discontinued operation on financial position	0.9	(5.5)	6.4
Net financial position (closing date)	(840.9)	(296.3)	(544.6)

I. Non recurring cash-out of €7.7 million in FY 2018 (of which €6.7 million for GAES acquisition and €1.0 million for payout related to AudioNova France and MiniSom Portugal acquisitions completed in 2017)

1. Non recurring cash-out of €2.0 million in FY 20I7 for restructuring charges related to AudioNova France and MiniSom Portugal acquisitions

No impact on Cash Flow from IFRS 15

FY 2018 Financial results

Increase in Net Debt reflecting GAES acquisition

	31/12/2018	31/12/2017
Data in $\epsilon$ m	@'18 IFRS	@'17 IFRS
Cash	(89.9)	(89.9)	(124.1)
Short-term debt	53.1	53.1	301.1
Medium/long-term debt	877.7	877.7	II9.2
Net debt	840.9	840.9	296.3
Equity	596.1	679.0	588.4
Net debt/EBITDA	$\qquad \qquad -$	$3.11x^2$	$1.35x^3$
Net debt/total equity	1.41x	1.24x	0.50x

I. Change in Equity as at 3I/I2/2018 @'18 IFRS vs as at 3I/I2/2017 also includes IFRS impact (€6I.2m) and FX (€II.5m) 2. Ratio Net Debt/EBITDA calculated as per definition of covenant in the GAES financing facility contract and applying frozen GAAP (as per contract) According to the definition of covenant contracts for other facilities the ratio Net Debt/EBITDA is equal to 3.37x 3. Ratio NFP/EBITDA calculated as per definition of covenant contract for existing financing facilities as of 3I/I2/20I7

I. FY2018 Results

II. Strategic Update

Update on our key initiatives to reshape the hearing care retail around the customer

Our plan in Spain: GAES integration

and the control of the control of

2020 ambitions: continuous delivery of strong growth & returns

amplifon

Strategic Pillars to 2020

Re-affirming our strategic direction

Strategic pillars unchanged, growth potential further accelerated by GAES

2020 key financial targets

Accelerating on our ambitions

$|8$

. FY2018 Results

II. Strategic Update

Update on our key initiatives to reshape the hearing care retail around the customer

Our plan in Spain: GAES integration

2020 ambitions: continuous delivery of strong growth & returns

amplifon

Reshaping the hearing care retail around the customer

Accelerating on our pillars to deliver our growth ambitions

INNOVATION

Innovation in product and customer experience

Accelerate innovation, rolling-out Amplifon product line and multichannel ecosystem

Amplifon "Top of mind" brand to increase penetration & share

Increasing media investment, with improved effectiveness & efficiency thanks to global scale & unique capabilities

		2018 Achievements	2019-2020 Initiatives
$\mathrm{H}$	Effective media scale-up	Increased investments in media Effectiveness and efficiencies leveraging regional media agency partnerships Launch of Amplifon global brand visual identity	Amplifon global brand expansion ш Roll-out of Amplifon product line ш leveraging on innovation as point of difference
تيم	Content revolution	Highly successful first EU regional campaign Global efficiencies in digital content production	Launch of new wave of EU regional ш campaign and extension to US Continue step-change in content quantity ш and quality
$\boldsymbol{\mathcal{E}}$	Digital acceleration	• New websites in 4 countries, more than doubling conversion rates SEO strategy leading to organic traffic leadership Strong contribution to revenues	Increase investment and boost a. productivity leveraging global buying approach New websites in 70% of countries ш

Amplifon "Top of mind" brand to increase penetration & share

Enlarging the footprint of the strongest global brand in retail hearing care

Global brand expansion Awareness leadership via effective investment Consideration leadership via innovative points of difference

Unique personalized relationship with customers through
data & technology

New customer lifecycle reducing repurchase cycle and increasing organic growth

		2018 Achievements	2019-2020 Initiatives
$\mathbf{\ddot{q}}$	Unique lifecycle management	New customer lifecycle management, leveraging new systems, big data and customer insights Roll-out to all key EU countries π.	Scale globally new customer lifecycle ш
帰	Advanced statistical modeling	First models more than doubling redemption	Apply to all lifecycle and develop new models
	Global customer operations	Sized opportunity and piloted new approaches leveraging scale and expertise	Roll-out of new customer call center a. operations

Leveraging big data to provide a distinctive customer experience

The biggest database in hearing care industry supported by top-notch technology

2018 Achievements

2019-2020 Initiatives

	Big data collection	Unmatched data asset of 10 million customers Data optimization and enrichment in EU Collection of hearing aids usage data	Data optimization and enrichment roll- out globally
Eg	Best-in-class infrastructure & capabilities	New CRM platform in Italy, the Netherlands and the US, fully automated and real-time capable Data scientist team in place	Roll-out of new CRM platforms in all core countries
Ellen	Big data usage	CRM personalization: Amplifon One CRM Store experience personalization	Amplifon 360 personalization ш

Successful launch of Amplifon Product Experience in Italy

Exciting response from customers and hearing care professionals

The launch in a nutshell

Launch of the Amplifon product line & ecosystem last May Outstanding response from customers and HCP Continuous features release of Amplifon APP Multichannel advertising campaign

Outstanding results

Accelerating APE global roll-out: 5 countries in 2019

Targeting a customer base of more than one million branded units by 2021

Strategic objectives

Further strengthen brand awareness Differentiate from competition through a unique value proposition Deepen long-term customer relationship via the innovative Amplifon ecosystem

Amplifon multichannel ecosystem: keep on innovating

New services to offer a unique customer experience everywhere and every time

The Multichannel Ecosystem Pillars

Engage the client & hearing care professionals

Create seamless experience

Personalize the service

Launch of Amplifon Remote Care & Ecosystem Control Center

Two distinctive innovations for customers & HCP to enhance experience, usage & repurchase

Remote care

Enhance customers' life, providing services via:

• Chat bot $\mathbf{m}$ .
• Tutorials
• Call center
• Store

Ecosystem control center

Provide hearing care professionals with a single tool to:

• access useful customers' insights $\blacksquare$
• receive alerts on clients usage anytime and anywhere
• activate different services
• message/chat/video-chat with customers

Data from Hearing Aid

Data from Amplifon APP

Data from Ecosystem & Amplifon Platforms

しか

Amplifon 2020: fast forward in the age of the customer

Industry innovation leader

Solid and proven plans to deliver our 2020 ambitions Successful step-change in innovation and R&D to support the next wave of growth

I. FY2018 Results

II. Strategic Update

Update on our key initiatives to reshape the hearing care retail around the customer

Our plan in Spain: GAES integration

2020 ambitions: continuous delivery of strong growth & returns

amplifon

Our vision in Spain

Creating the undisputed leader in the highly attractive Spanish market

Two leading organizations

combining strong complementary structures to achieve even greater success in the high-potential Spanish market

Spain: an attractive and high-potential market

Italy vs. Spain: market data

Opportunity to create another superb Amplifon stronghold

I Cost per Gross Rating Point

GAES unique assets

The hardest to build

Employees

~1,300 people in Spain

of which ~930 HCP

Highly trained & motivated team with strong customer orientation

Brand

Highest brand value & recognition 96% brand awareness >90% brand consideration

~70 years of leadership

Reputation with ENTs

«One-stop shop» for hearing solutions

Wholesale distribution of hearing aids, implants & medical devices

GAES Research & Study

a specialized partner for the medical & academic communities

Network

Largest footprint in the country > 500 shops

Well located and well invested PoS

GAES & Amplifon together in Spain

Absolute leadership in a highly promising market

96% Brand awareness

700+ PoS Largest footprint

$-1,810$ people ~I,I60 hearing care
professionals

Tremendous opportunity

leveraging GAES unique assets & Amplifon Group's best practices

GAES integration: Key value creation levers

One Brand, One Organization, One Network, One Customer Experience

• Early and thorough integration planning, supported by rigorous execution and continuous monitoring
• Dedicated integration team accountable for project management, delivery of synergies, identification of all future growth and productivity opportunities
• Direct involvement and sponsorship of the Executive Leadership Team

Value Creation Levers

Marketing effectiveness

One Brand Integrated CRM

Media investment optimization

Amplifon Product Experience

Commercial excellence

One Customer experience

Global customer operations

Retail excellence

Scale economies

One Network, by far the largest footprint in the country

Procurement cost optimization

Organization

One effective, lean & aligned organization

Culture and capabilities integration

Integrated systems and processes

I. FY2018 Results

II. Strategic Update

Update on our key initiatives to reshape the hearing care retail around the customer

Our plan in Spain: GAES integration

2020 ambitions: continuous delivery of strong growth & returns

2020 key financial targets

Accelerating on our ambitions

2020 Sales growth target

Steady organic growth, piecemeal M&A and GAES contribution to boost top-line

2021 Synergies target increased

Synergies further expanding to €20-25 million run-rate per year by 2021

Continued steady EPS growth, despite accounting impact coming from PPA

Purchase Price Allocation (PPA) for GAES acquisition

• The provisional allocation of the purchase price will arise indicative ~€15 million yearly D&A for GAES mainly related to customer file & brand value
• The final analysis of the PPA at the fair values of the net assets acquired will be carried out within 12 months from the closing date

Net Financial Expenses

Existing facilities pre-GAES acquisition

• Successful refinancing of Bond in July 2018
• Average cost of debt: ~2%

New €530 million 5-year facility for GAES acquisition

• Successful closing and syndication
• Average cost of debt: < 2%

< €20 million annual financial expenses

Tax Rate

Utilization of non-accrued tax assets following improved financial performance in selected markets

Tax benefit related to Patent Box in Italy for Amplifon trademark until 2019

Positive impact from tax reforms in the US, France and Belgium

Expected tax rate < 30% in 2019-2020

Strong cash flow generation sustains clear deleverage path also after Capex & piecemeal M&A

Operating Cash Flow

High Cash Flow Conversion¹

■ >80% in 2018

Improvement of NWC via ad-hoc initiatives

Capex

Network expansion and upgrade (including GAES rebranding and refurbishments)

Investments for customer experience innovation and customer data infrastructure

Backbone transformation

$\sim \epsilon$ 170 million Cumulated 2019 & 2020

Cash-Out for M&A

Continued sustained pace of piecemeal acquisitions in selected core countries

• $=$ France
• Germany
• $\blacksquare$ Canada

300 corporate stores in 2019-20

$\sim \epsilon$ 160 million Cumulated 2019 & 2020

Deleverage from 3.1x² Net Debt/EBITDA ratio at year-end 2018 to $\sim 2.2x^2$ at year-end 2020

I. Calculated as Operating Cash Flow/EBITDA as reported at IFRS 2018 (with application of IFRSI5) 2. Ratio Net Debt/EBITDA calculated as per definition of covenant in the GAES financing facility contract and applying frozen GAAP (as per contract). Ratio at 2020 excludes IFRS 16

Changes in IFRS - IFRS 16 in a snapshot

IFRS 16¹ - Main Changes

IFRS I6 establishes that operating leases >12 months (if fall under IFRS 16 definition) should be recognized on Balance Sheet

Main changes:

• Recognition on Balance Sheet of Assets (Right of Use) and Liabilities arising from a lease
• Replacement in the P&L of rents with Depreciation (Right of Use) and Interest (Lease Liability)

Impact on Key Metrics

For Amplifon the change will imply

• Estimated increase in EBITDA as the portion of the lease expense that falls under IFRS 16 is eliminated from EBITDA: ~€IOOm²
• Increase in EBIT as the depreciation added is lower than the lease expense eliminated from operating income
• In a growing contest, Profit before Tax will be slightly lower due to the interest higher in early years than in later years as the interest expense decreases in the Balance Sheet
• Estimated increase in financial liabilities: $\leq 460 500$ m³

No change at all in total cash flow

I Effective from January Ist 2019

1. Indicative estimate at 2020, This estimate will be a function of different factors, including, inter alia: acquisitions, new openings, length of contracts, rents adjustment for inflation indices and potential early contract terminations 3. Indicative estimate at 2020 is also based on the opening Balance Sheet figure as at I/I/2019 of <430 million. The estimate at 2020 will be a function of different factors, including all factors indicated in Note 2 and interest rates impacting the NPV of future payments

A long way to grow

Unique growth opportunities ahead, further accelerated by 2018 key milestones

Investor Relations Contacts

FRANCESCA RAMBAUDI Director Tel: +39 02 5747 2261

AMANDA HART GIRALDI Specialist Tel: +39 02 5747 2317

PAOLA BEZZI Junior specialist Tel: +39 02 5747 2310

OLGA LEPECHKINA Assistant Tel: +39 02 5747 2542