Aquafil — Interim / Quarterly Report 2020

May 14, 2020

Aquafil Group

Financial Results First Quarter 2020

14th May 2020

Index

Item		Page
1.	Highlights	4
2.	Revenues by Geographical Area and Product Line	7
3.	Income Statement KPI First Quarter 2020	10
4.	Cash Flow and Net Financial Debt – First Quarter 2020	12
5.	Aquafil Group at Glance	14
6.	First Quarter 2020 Consolidated Financial Statement Report	20

1. Highlights

Highlights

5

REVENUES (€/mil)			EBITDA (€/mil)		NET PROFIT ADJUSTED1 (€/mil)		N.F.P. (€/mil)
	Q120			Q120		Q120
Act192	140,7		Act193	18,2	Act19	5,1		Mar20	250,2
Act18	145,3		Act18	19,1	Act18	7,7		Dec19	249,6
% Var 19 to 18	-3,2%		% Var 19 to 18	-4,7%	% Var 19 to 18	-34,2%
	REVENUES Area EMEA -6,0% due to market slowdown for economic trends			EBITDA -4,7% (-0,9 €/mil) on a like for like basis4	- -	NET PROFIT ADJUSTED 34,2% (-1,6 €/mil) mainly due to EBITDA Decrease			NET FINANCIAL POSITION 250,2 €/mil at Mar 20 249,6 €/mil at Dec 19 Mar20 vs
	Area Asia Pacific -11,8% due to market slowdown for economic trends Area USA +10,4% on a like for like basis4 -12,1% slowdown of automotive sector			-10,8% (-2,1 €/mil) mainly due to Lower Quantities Sold partially compensated by	- - -	Higher Depreciation - 2,8 €/mil Higher Financial Cost - 0,6 €/mil Higher exchange profit +1,7 €/mil		Dec 19 +15,3 €/mil from Op Activities -9,3 €/mil from Investing Activities -4,5 from NWC changes -2,1 from Interest expenses
Revenues of ECONYL® Branded Products -1,9% 37,9% of Fiber Revenues			effects of scheduled saving measures				CASH at 31 Mar 2020 100,4 €/mil

(1) Equal to Net Profit plus no recurring items less related tax effects - (2) Including Aquafil O'Mara revenues of 7,4 €/mil – (3) including Aquafil O'Mara EBITDA of 1,2 €/mil – (4)Without considering O'Mara contribution

2. Revenues by Geographical Area and Product Line

Revenues broken down by Line of Product and Geographical Area on First Quarter 2020 to same period of 2019 are:

	BCF (fiber for carpet)				NTF (fibre for fabrics)		Polymers			TOTAL		% on TOTAL
	Q120	Q119	Δ	Δ%	Q120	Q119	Δ	Δ%	Q120	Q119	Δ	Δ%	Q120	Q119	Δ	Δ%	Q120	Q119
EMEA	52,4	54,8	(2,4)	(4,4)%	24,9	26,2	(1,3)	(5,0)%	8,4	10,2	(1,8)	(17,2)%	85,7	91,2	(5,5)	(6,0)%	60,9%	62,8%
North America	24,9	29,5	(4,6)	(15,6)%	6,9	0,0	6,9	N.A.	2,1	1,3	0,9	70,1 %	33,9	30,7	3,2	10,4 %	24,1%	21,1%
Asia e Oceania	19,5	22,3	(2,8)	(12,4)%	0,9	0,8	0,2	23,6 %	0,0	0,1	(0,1)	N.A.	20,5	23,2	(2,7)	(11,8)%	14,5%	16,0%
RoW	0,1	0,1	0,0	59,1 %	0,5	0,2	0,3	N.A.	0,0	0,0	(0,0)	N.A.	0,6	0,2	0,4	N.A.	0,4%	0,2%
TOTAL	96,9	106,6	(9,7)	(9,1)%	33,3	27,1	6,1	22,5 %	10,5	11,5	(1,0)	(8,7)%	140,7	145,3	(4,6)	(3,2)%	100,0%	100,0%
% on TOTAL	68,9%	73,4%			23,6%	18,7%			7,5%	7,9%			100,0%	100,0%

• (a) revenues generated in EMEA declined by 6.0% (€5.5 million) at March 31, 2020, in detail (a) the BCF Product Line (fiber for carpets) fell by 4.4% (€2.4 million) chiefly due to lower volumes sold as a result of the slowdown of the final market, as well as a sales price declined attributable to lower raw material cost; (b) the NTF Product Line (fiber for fabrics) dropped by 5.0% (€1.3 million) fully due to the downtrend in the market of reference occurred late in March; (c) the Polymers Product Line decreased by 17.2% (€1.8 million), chiefly due to sales price decline attributable to lower raw material cost, as well as lower volumes sold as a result of the slowdown of the end market;
• (b) revenues generated in North America grew by 10.4% (€3.2 million) at March 31, 2020. On a like-for-like consolidation basis, revenues would have decreased by 12.1% (€3.7 million), in detail: (a) the BCF Product Line (fiber for carpets) declined by 15.6% (€4.6 million) chiefly due to lower volumes sold as a result of the difficult comparison with January 2019, the slowdown of the automotive market in late March, and a decline in sales prices attributable to lower raw material cost; (b) the Polymers Product Line grew by 70.1% (€0.9 million) thanks to higher volumes sold;
• (c) revenues generated in Asia and Oceania decreased by 11.8% (€2.7 million), entirely attributable to the BCF Product Line (fiber for carpets) as a result of the slowdown of the end market of reference, chiefly due to lower volumes sold as a result of the slowdown of the end market of reference, as well as a sales price declined attributable to lower raw material cost.

ECONYL® Revenues

The Group's revenues of ECONYL® branded products decrease of 1,9% in Q1 2020 compared to Q1 2019.

The Group's revenues of ECONYL® branded products in Full Year 2019 are equal to the 37,9% of total fiber revenues.

3. Income Statement KPI First Quarter 2020

The Income Statement Key Performance Indicators related to first quarter 2020 compared with same period of 2019 are:

Income Statement KPI (€/mil)
	Q1 20	Q1 19	Δ%
REVENUES	140,7	145,3	(3,2)%
EBITDA	18,2	19,1	(4,7)%
Margin %	12,9%	13,2%
EBIT Adjusted	7,4	11,0	(33,3)%
Margin %	5,2%	7,6%
EBIT	5,2	9,1	(42,9)%
Margin %	3,7%	6,3%
EBT	5,6	9,6	(41,0)%
Margin %	4,0%	6,6%
Net Result	4,1	7,7	(47,0)%
Margin %	2,9%	5,3%
Net Result Adj	5,1	7,7	(34,2)%
Margin %	3,6%	5,3%

• a) Revenues: trend has been described in Revenues by Geographical Area and Product Line section of report;
• b) EBITDA: decreases notwithstanding positive effects of O'Mara EBITDA for 1,1 €/mil. Without considering this effect EBITDA would have been of 17,1 €/mil. EBITDA. Changes in EBITDA are attributable to lower volumes sold, partially offset by the effects arising from the planning and implementation of savings measures.
• c) EBIT Adjusted: decrease as a result of EBITDA reduction and higher D&A of period.
• d) EBIT: decrease as a result of EBIT Adjusted reduction;
• e) EBT: decrease as a result of EBIT reduction, increase of financial cost and higher exchange profit of period;
• f) Net Result: decrease as a result of EBT reduction partially mitigated by a lower income taxes.
• g) Net Result Adjusted: is determined as Net Profit plus no recurring items corrected by related tax effect.

4. Cash Flow and Net Financial Debt – First Quarter 2020

The Cash Flow and Net Financial Debt of first quarter 2020:

• a) Cash Flow from Operating Activities Before Changes in NWC: are equal to 15,3 €/mil and are calculated as Net Profit ± Income Tax ± Interest Expenses ± FX Gains or Losses ± Amortisation, depreciation & write-downs ± the no-monetary IFRS16 increase;
• b) Cash Flow used in Investing Activities: are equal to (9,3) €/mil and and chiefly referred to projects aimed at maintaining and improving the production efficiency of the existing plants;
• c) Change in Net Working Capital: are equal to (4,5) €/mil mainly as a result of the increased turnover reported in Q1 2020 compared to Q1 2019;
• d) Cash at 31 Mar 2020 equal to 100,4 €/mil.

5. Aquafil Group at Glance

• Pioneers of circularity with ECONYL®:

• An unique Regeneration System to produce sustainable fiber and polymers from nylon 6 waste;
• High barriers to entry for technology and reverse supply chain;
• Turnover of product branded ECONYL® equal to 37,5% of fiber turnover
• Market Leader in Nylon (PA):
• Fiber for Carpet flooring (BCF Product);
• Fiber for Fabrics (NTF Product);
• Polymers for engineering plastics;

• A successful business model based on

• Proprietary technology with continuous innovation;
• R&D focus for a uniquely diversified commercial offer;
• Manufacturing and operational excellence;
• Focus on high-end segments for a premium positioning;
• A Global footprint with proximity to Clients
• 16 plants in 3 continents and 7 countries
• almost 3.000 employees at December 2019;
• €549,0m of Revenues in FY2019
• €69,4m EBITDA in FY2019

Aquafil Group at Glance

AQUAFIL WORLDWIDE

USA

Cartersville (Georgia) Aquafil USA 1 & 2

Phoenix (Arizona) Aquafil Carpet Recycling ACR#1

Sacramento (California) Aquafil Carpet Recycling ACR#2

Rutherford College (North Carolina) Aquafil O'Mara

UK Kilbirnie Aquafil UK

ITALY

Arco (TN) Aquafil (Headquarter)

Cares (TN) Rovereto (TN) Tessilquattro

CROATIA Oroslavje

Aquafil CRO

SLOVENIA

Ljubljana AquafilSLO

Senožeče AquafilSLO Senožeče

Štore AquafilSLO Štore

Ajdovščina AquafilSLO Ajdovščina

CHINA

Jiaxing Aquafil Jiaxing

THAILAND

Rayong Aquafil Asia Pacific

Aquafil Group at Glance

• 100% regenerated & regenerable nylon
• Unique proprietary technology
• 37,5 % of Aquafil Fiber Turnover 2018

WWW.ECONYL.COM

6. First Quarter 2020 Consolidated Financial Statement Report

RECONCILIATION FROM NET PROFIT TO EBITDA	First Quarter	First Quarter
€/000	2020	2019
Net Profit (Including Portion Attr. to Minority )	4.076	7.696
Income Taxes	1.572	1.880
Amortisation & Depreciation	10.833	8.038
Write-downs & Write-backs of intangible and tangible assets	14	34
Financial items (*)	347	379
No recurring items (**)	1.373	1.086
EBITDA	18.216	19.113
Revenue	140.714	145.328
EBITDA Margin	12,9%	13,2%

RECONCILIATION FROM EBITDA TO EBIT ADJUSTED €/000	First Quarter 2020	First Quarter 2019
EBITDA	18.216	19.113
Amortisation & Depreciation	10.833	8.038
Write-downs & Write-backs of intangible and tangible assets	14	34
EBIT Adjusted	7.369	11.041
Revenue	140.714	145.328
EBIT Adjusted Margin	5,2%	7,6%

(*) The financial items include: (i) financial income of Euro 1.1 million at the end of March 2019 (ii) financial charges of Euro 2.2 million at the end of March 2020, compared to Euro 1.6 million at the end of March 2019, (iii) cash discounts of Euro 0.8 million at the end of March 2020, compared to Euro 0.9 million at the end of March 2019, and (iv) exchange gains of Euro 2.6 million at the end of March 2020, compared to Euro 1.0 million at the end of March 2019.

(**) This includes (i) non-recurring charges related to the expansion of the Aquafil Group and other corporate transactions for Euro 1.1 million and 0.5 million respectively in the periods ending March 31, 2020 and March 31, 2019, (ii) other non-recurring charges of Euro 0.3 million and Euro 0.6 million respectively in the periods ending March 31, 2020 and March 31, 2019.

CONSOLIDATED INCOME STATEMENT	First Quarter	of wich	First Quarter	of wich
€/000	2020	non-current	2019	non-current
Revenue	140.714	-	145.328
of which related parties	305	-	17
Other Revenue	481	17	601	76
Total Revenue and Other Revenue	141.195	17	145.929	76
Raw Material	(72.732)	(12)	(77.154)	(100)
Services	(25.102)	(626)	(24.781)	(803)
of which related parties	(108)	-	(103)	-
Personel	(27.818)	(624)	(26.712)	(139)
Other Operating Costs	(1.146)	(129)	(595)	(119)
of which related parties	(17)	-	(18)	-
Depreciation and Amorti zation	(10.833)	-	(8.038)	-
Doubtful debt prevision	(14)	-	(14)	-
Provisions for risks and charges	0	-	(20)	-
Capitalization of Internal Construction Costs	1.638	-	471	-
EBIT	5.188	(1.373)	9.086	(1.086)
Other Financial Income	46	-	1.091	1.082
Interest Expenses	(2.206)	-	(1.562)	-
of which related parties	(29)	-	(66)	-
FX Gains and Losses	2.619	-	961	-
Profit Before Taxes	5.649	(1.373)	9.576	(4)
Income Taxes	(1.572)	-	(1.880)
Net Profit (Including Portion Attr. to Minority )	4.076	(1.373)	7.696	(4)
Net Profit Attributable to Minority Interest	0		0
Net Profit Attributable to the Group	4.076		7.696

CONSOLIDATED BALANCE SHEET

€/000 2020 2019 Intangible Assets 21.832 21.101 Goodwill 13.360 13.029 Tangible Assets 252.295 251.492 Financial Assets 722 765 of which related parties 313 313 Other Assets 2.189 2.189 Deferred Tax Assets 12.828 13.636 Total Non-Current Assets 303.226 302.212 Inventories 169.733 184.931 Trade Receivable 32.285 24.960 of which related parties 84 69 Financial Current Assets 1.947 1.637 Current Tax Receivables 1.767 1.639 Other Current Assets 12.783 12.126 of which related parties 2.203 2.231 Cash and Cash Equivalents 100.423 90.400 Asset held for sales - 428 Total Current Assets 318.938 316.120 Total Current Assets 622.164 618.332 Share Capital 49.722 49.722 Reserves 92.612 81.813 Group Net Profit for the year 4.033 10.799 Group Shareholders Equity 146.367 142.335 Net Equity attributable to minority interest 1 1 Net Profit for the year attributable to minority interest 0 - Total Sharholders Equity 146.368 142.336 Employee Benefits 5.637 5.721 Non-Current Financial Liabilities 308.182 286.970 of which related parties 8.319 9.624 Provisions for Risks and Charges 1.512 1.508 Deferred Tax Liabilities 11.155 10.915 Other Payables 14.746 15.383 Total Non-Current Liabilities 341.232 320.497 Current Financial Liabilities 44.433 54.733 of which related parties 3.446 3.572 Current Tax Payables 1.228 1.127 Trade Payables 66.702 76.089 of which related parties 301 127 Other Liabilities 22.201 23.551 of which related parties 230 236 Total Current Liabilities 134.564 155.499 Total Equity and Liabilities 622.164 618.332	At March 31,	At December 31,

CASH FLOW STATEMENT	At March 31,	At March 31,
€/000	2020	2019
Operation Activities
Net Profit (Including Portion Attr. to Minority )	4.076	7.696
of which related parties	151	(170)
Income Taxes	1.572	1.880
Other Financial Income	(46)	(1.091)
Interest Expenses	2.206	1.562
of which related parties	29	66
FX (Gains) and Losses	(2.619)	(961)
(Gain)/Loss on non - current asset Disposals	(15)	(249)
Provisions & write-downs	14	34
Amortisation, depreciation & write-downs	10.836	8.038
Non-monetary increase IFRS16	(712)	(28.802)
Cash Flow from Operating Activities Before Changes in NWC	15.312	(11.893)
Change in Inventories	15.198	597
Change in Trade and Other Receivables	(9.386)	(14.429)
of which related parties	174	(337)
Change in Trade and Other Payables	(7.325)	(9.898)
of which related parties	(15)	12
Change in Other Assets/Liabilities	(2.848)	(1.193)
of which related parties	28	26
Net Interest Expenses paid	(2.159)	(703)
Income Taxes paid	-	(31)
Change in Provisions for Risks and Charges	(111)	(212)
Cash Flow from Operating Activities (A)	8.680	(37.762)
Investing activities
Investment in Tangible Assets	(8.124)	(17.350)
Disposal of Tangible Assets	310	280
Investment in Intangible Assets	(1.498)	(997)
Disposal of Intangible Assets	11	-
Cash Flow used in Investing Activities (B)	(9.300)	(18.067)
Financing Activities
Increase in no current Loan and borrowing	20.000	-
Decrease in no current Loan and borrowing	(7.966)	(4.413)
Net variation in current fiancial Assets and Liability	(1.391)	27.432
of which related parties	(1.431)	12.049
Cash Flow from Financing Activities ( C)	10.643	23.019
Net Cash Flow of the Year (A)+(B)+(C)	10.023	(32.810)

NET FINANCIAL DEBT	At March 31, At December 31,
€/000	2020	2019
A. Cash	100.423	90.400
B. Other cash equivalents	-	-
C. Securities held-for-trading	-	-
D. Liquidity ( A + B + C)	100.423	90.400
Current financial E receivables	1.947	1.637
F. Current bank loans and borrowing	(117)	(129)
G. Current portion of non-current loans and borrowing	(36.081)	(46.056)
H. Other current loans and borrowing	(8.235)	(8.547)
I Current financial debt ( F G H ) + +	(44.433)	(54.733)
J. Net current financial debt (I + E+ D)	57.936	37.304
K. Non-current bank loans and borrowing	(191.858)	(169.796)
L. Bonds issued	(90.406)	(90.458)
M. Other non-current loans and borrowing	(25.876)	(26.619)
N. Non-current financial debt ( K + L + M )	(308.140)	(286.874)
O. Net financial debt (J+N)	(250.204)	(249.570)

Investors Contact:

Karim Tonelli Investor Relations & Performance Management Director karim.tonelli@aquafil.com Mob: +39 348 60 22 950