Biesse — Investor Presentation 2015

Oct 5, 2015

Company presentation - London 5-6 October Star Conference 2015

ESSEGROUP

Biesse Group

Biesse Group is a global leader in the technology for processing wood, glass, stone, plastic, advanced materials and metal.

Founded in Pesaro in 1969 by Giancarlo Selei, the company has been listed on the Stock Exchange (STAR segment) since June 2001.

Innovation is our driving force

Innovation is the driving force in the way we do business,
continuously striving for excellence to support our customers competitiveness.

We innovate to produce the most widely-sold processing centres in the world.

We innovate to introduce new technology standards to the market We innovate to design production lines and systems for large enterprises.

We innovate to develop solutions and software programs to
facilitate our customers' day-to-day activities.

Innovation is hard-wired in our DNA. Past, present and future.

1 industrial group, 4 divisions and 8 production sites

more than 200 patents registered

Where

With

33 branches and representative offices 300 agents/certified dealers

customers in 120 countries

almost 3,100 employees
(temporary workers included) throughout the world

Worldwide distribution

Italy Brianza Triveneto

$U.K.$ Daventry

Switzerland Luzern

Sweden Jönköping

Russia Moscow

Germany Elchingen I öhne Gingen

France Lyon

Spain Barcellona

Portugal Lisbona

$U.A.E.$ Dubai

North America Charlotte Montreal Toronto Los Angeles Forth Lauderdale

Brazil San Paolo India Bangalore Mumbai Noida

China Shanghai Dongguan Guangzhou

Asia Singapore Kuala Lumpur Jakarta Seoul

Oceania Sydney Brisbane Melbourne Perth Auckland

5

Biesse

Since 1969

Specialised in the woodworking segment. Solutions for joiners and large furniture, windows, doors and wood building components manufacturers.

Intermac

Since 1987

Specialised in the glass and stone processing sector. Solutions for the flat glass and stone processing industry and for the furniture, construction and automotive industry.

Today

Is one of the most prestigious brands in this sector.

Technological independence

Mechatronics

Biesse Group directly designs and manufactures all high-tech components for its machines.

Thanks to a dedicated business unit specialised in Mechatronics, it manufactures key components to guarantee high performance and competitive advantage to its customers.

Cutting-edge

Diamut creates customised diamond and binder mixes tools developed and field-tested on the basis of customers requirements.

Using high-tech tools, it is possible to process any material, from stone through to concrete, ceramic, glass and manmade materials.

Wide customer base in more than 120 countries

The Sagrada Familia

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Moda Life, Turkey

VKDP*Russia

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回口

ZBIESSEGROUP

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16

SCA-Indústria de Móveis, Brazil

Main world competitors

Orders intake & backlog

Group order intake & backlog

$\cdot$ IH 2015: Group orders intake $+13\%$ (vs the same period 2014)

$\cdot$ IH 2015:Group backlog June $2015$ +29.5% (vs the same period 2014)

.August update: orders intake +15.6% (vs the same period 2014)

ZBIESSEGROUP Breakdown

ZBIESSEGROUP orders backlog breakdown by type & destination (company evaluation)

Sales breakdown by country

IH 2015

$\%$

IH 2014

IH 2015 B R LC 118%

IH 2014 B.R.I.C. 14.5%

$\blacksquare$ Italy Western F Eastern E. U.S.A. - Canada Asia Pacific Rest of the W.

ZBIESSEGROUP

	June 2015	2014	2013	2012	2011	2010
manufacturing	1,222	1,201	1.175	1,265	1,250	965
%	41%	42%	44%	45%	46%	41%
service & after-sales	655	628	613	574	577	568
%	22%	22%	23%	21%	21%	24%
R&D	366	361	321	338	316	293
$\%$	12%	13%	12%	12%	12%	12%
sales & marketing	453	439	351	364	361	340
$\%$	15.4%	15%	13%	13%	13%	14%
g&a	251	252	235	242	233	202
%	9%	9%	9%	9%	9%	9%
Italy	1,638	1,605	1,547	1,646	1,656	1660
$\%$	56%	56%	57%	59%	61%	70%
outside Italy	1,309	1,276	1,148	1,136	1,081	708
%	44%	44%	43%	41%	39%	30%
TOTAL	$2,947*$	2,881	2,695	2,782	2,737	2,368

Shareholders breakdown

IH 2015: consolidated financial

$\bigcap$

€/mln	IH 2014	IH 2015	Delta %
Net sales	201.1	245.5	$+22.1%$
Value added	79.8 39.7%	101.9 41.5%	$+27.7%$
Labour cost	62.9 31.3%	72.9 29.7%	$+16.1%$
EBITDA	16.9 8.4%	28.9 11.8%	$+70.7$
EBIT	9.7 4.8%	20.2 8.2%	$+108.1%$
Net result	3.9 2.0%	10.5 4.3%	$+115,3%$
tax rate	53.7%	43.0%

€/m	IH 2014	IH 2015	Delta €
inventory % over IH net sales	98.7 49.1%	124.3 50.6%	25.6
trade receivables % over IH net sales	78.5 39.0%	99.6 40.6%	21.1
trade payables % over IH net sales	118.8 59.1%	157.2 64.0%	38.4
operating net working capital	58.4	66.8	8.4
% over IH net sales	29.0%	27.2%

E/mln	IH 2014	IH 2015	Delta $\epsilon$
OPERATIVE cashflow	9.0	9.7	$+0.7$
Investments	$-8.8$	$-11.4$	$+2.6$
FREE cashflow	0.1	$-1.7$	$-1.8$
dividends paid	$-4.8$	$-9.8$

•

4,8 9,8 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Three years business plan extract to remind (February 2015)

Strategy 2015-2017 main driver

From tri-band offer to dual strategy

ZBIESSEGROUP

From tri-band offer to dual strategy

More product

• plastic
• metal (HSD)
• bSuite (software)
• Systems / cells (batch one lines-winstore range)

845651

125685

85221

84651

new glass and stone range

$28227$ DESA

3416545

64898

4564

123

More network

• subsidiaries & trade channel development, increased headcount for foreign subsidiaries (salespeople & engineers), enhanced training and expertise
• development of Latin America sales network / manufacturing (Brazil) and of Asia sales network
• development of overseas manufacturing (India and China)
• group marketing & communications

subsidiaries - trade channel

subsidiaries: guidelines

• invest in human resources and capabilities as growth drivers (network & technology)
• transform the management approach from EBIT-driven to $\bullet$ EBIT-consciuos >>> focus on market share and growth
• improve after-sales service quality to gain customers' trust
• enhance sales and marketing integration

trade channel: quidelines

• consolidate market share for cutting, edgebanding and drilling for the top of the market range
• hire specialised astaff and dedicated (resident) key account managers to develop line and cell sales in particular
• focus on "growth" customers target group in the medium-high range segment, with a focus on "productiong upgrade"
• strenghten the dealer network for the "stand-alone machine range" (salespeople, engineers, service engineers) to increase the integration with "made in Biesse" products manufactured in China and India
• monitor discount policies to safeguard sales margin, increasing the perception of the "business offer system" and preventing price conflicts

2015 ongoing highlights

2015 ongoing highlights

orders intake & backlog

• orders intake : worldwide growth driven by technological and reliable products despite markets difficulties
• $\cdot$ backlog (machines to be invoiced): constantly exceeding $\epsilon$ 100 mln. with a turnover visibility (average) of 4-5 months
• . market shares: perception of an increase in all the business divisions

from Hannover through Las Vegas to... Pesaro

• LIGNA Hannover May 11-15 : Biesse exhibition area had 96,000, partecipants with a record increase (+63%) for orders intake (vs 2013 edition)
• AWFS Las Vegas: July 22-25 : record orders intake with more than 1,000. partecipants
• InsideBiesse- Pesaro October 15-17 : in-house event (5,000 sm. Wood showroom) to demonstrate software & automation evolutions

cashflow generation

·higher operative cashflow: allowed an increase in investments and dividends paid •net debt reduction: enlarged the capability to use the exceeding cash-facilities

three years business plan figures to remind (February 2015)

€/mln	2013	2014	2015e	2016e	2017e
Net sales	378,4	427,1	478,2	514,1	540,1
Cost of goods sold	156,5	171,2	187,1	201,5	210,5
Labour cost	112,7	128,2	142,0	151,0	158,6
overhead	81,4	89,7	97,8	99,4	101,9
EBITDA	30,9	$\overline{40.9}^{\star}$	52,8	63,7	70,7
EBIT	15,1	$26.5***$	36,0	47,0	54,0

€/m	2013	2014	2015°	2016°	2017e
inventory % over net sales	86.3 22.8%	98.1 23.0%	107.5 22.5%	113.6 22.1%	117.7 21.8%
trade receivables % over net sales	76.2 20.1%	80,7 18.9%	90.0 18.8%	95.0 18.5%	100.0 18.5%
trade payables % over net sales	111.1 29.4%	123.2 28.8%	135.0 28.2%	140.0 27.2%	145.0 26.8%
operating net	51.4	55.6	62.5	68.6	72.7
working capital % over net sales	13.6%	13.0%	13.1%	13.3%	13.5%

€/mln	2013	2014	2015e	2016e	2017e
gross cashflow % over net sales	52.1 13.8%	38.3 9.0%	32.3 6.8%	41.4 8.1%	48.5 9.0%
investments % over net sales	$-19.9$ 5.2%	$-20.8$ 4.9%	$-22.7$ 4.7%	$-15.4$ 3.0%	$-15.4$ 2.9%
free cashflow % over net sales	32.3 8.5%	17.5 4.1%	9.6 2.0%	26.0 5.1%	33.1 6.1%
dividends		$-4.8$	$-9.8$ 0.36 per share	$-9.8$ 0.36 per share	$-9.8$ 0.36 per share
delta net debt		12.7	$-0.2$	16.2	23.3
net debt (net financial position)	$-23.9$	$-11.2$	$-11.4$	$+4.9$	$+28.2$

ebit

labour cost

61

capex + capitalized R&S

64

65

disclaimer

• $\rightarrow$ This presentation has been prepared by Biesse S.p.A. for information purposes only and for use in presentations of the Group's results and strategies.

• For further details on the Biesse S.p.A.. reference should be made to publicly available information. including the Quarterly Reports, the Half Annual Report, the Annual Reports and the Three Years Business Plan.

• $\rightarrow$ Statements contained in this presentation, particularly the ones regarding any Biesse S.p.A. possible or assumed future performance, (business plan) are or may be forward looking statements and in this respect they involve some risks and uncertainties.
• Any reference to past performance of the Biesse S.p.A. shall not be taken as an indication of future performance.
• This document does not constitute an offer or invitation to purchase or subscribe for any shares and no part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever.
• $\rightarrow$ By attending the presentation you agree to be bound by the foregoing terms

Alberto Amurri

Group Financial Manager
Investor Relator

direct +39 0721 439107 mobile +39 335 1219556

alberto.amurri@biesse.com

biessegroup.com