Biesse — Investor Presentation 2017

Mar 21, 2017

Forward-thinking solutions to leverage the fourth industrial revolution

ZBIESSEGROUP STAR Conference

DI

Biesse Group is a global leader in the technology for processing wood, glass, stone, advanced materials and metal. Founded in Pesaro in 1969 by Giancarlo Selci, the company has been listed on the Italian Stock Exchange (Star) since
June 2001. Starting from October 2015 Biesse is included in the Mid-Cap segment.

THINK
FORWARI

THINKFORWARD is all about Biesse Group's ability to innovate and provide integrated solutions that are sophisticated but easy to use, allowing our customers to produce more, better and at a lower cost. It encourages us to look ahead before deciding how acting today.

ZBIESSEGROUP

Biesse Group

Who we are Our values Business Model

Who we are

多BIESSEGROUP

Our purpose Our beliefs $\Gamma$ How Where With We

Biesse Group / Who we are

Our purpose

"...back when we were simply producing machines, I was talking with a dear friend, and realised that the rough, imprecise way he was working was ineffective, and above all, dangerous to his personal safety. At that moment. I recognised a need for change, and immediately understood that we could do something we could introduce innovative new ways of working, automate processes, and above all, create safer working conditions.

A new kind of machine was about to be born".

Generarlo Sele

Founder and CEO

Biesse Group / Who we are Our beliefs

We believe in challenging standards, in thinking forward and in acting differently. Creating advanced technologies and beautifully-designed solutions is the key to transforming our beliefs into real value.

We manufacture machines and components for wood, glass, stone, advanced materials and metal processing through specialised business units and 9 manufacturing sites in Italy and worldwide.

production sites

Growing investments in R&D have enabled us to create software programs that have simplified the management of CNC machines, improving our customers' processes revolutionizing market standards.

More than

200

patents registered

We support our colleagues everywhere in the world, using the most advanced management, sales and support system. Our global network enables us to be always close to our customers.

More than

SZRIES

subsidiaries and representative offices

selected distributors

WITH

Customers in 120 countries: manufacturers of furniture, design items and door/window frames, producers of elements for the building, nautical and aerospace industries.

"Strength lies in differences, not in similarities" (Stephen Covey)

employees throughout the world (temporary workers included) are our Human Capital

Our Values

多BIESSEGROUP

Innovation Reliability Excellence

Biesse Group / Our values

Innovation
is our driving force

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

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

ZBIESSEGROUP

Biesse Group / Our valu

Reliability

Our main principles

$\mathbb Z$ Fairness to all stakeholders $\leq$ Mutual trust and transparency $\nabla$ Unrestricted and clear communications

$\leq$ Sharing of knowledge and experience

ZBIESSE

Biesse Group / Our values

Excellence

ZBIESSEGROUP

A virtuous circle of excellence for a constant growth

Revenue

Profit

$02$

Cash

$03$

Wood

Stone

bSoft (software)

Metal

Plastic & Advanced Materials

Biesse Group / Our values / Excellence

ZBIESSEGROUP

Business Model

Products Footprint Distribution Customers

Biesse Group / Business Model

Systems

We create engineered

solutions, from plant

design to production,

implementation.

installation and

maintenance

Products

02

WOOD

STONE

METAL

We design.

01

04

Machines

manufacture and distribute a comprehensive range of machinery and technologies for processing wood, glass, stone and advanced materials

Tooling

We manufacture custom made blends of diamonds and alloy tools for glass, stone and synthetic materials processing, which have been developed and field tested to meet customer requirements

Mechatronics

We design, manufacture and deliver high-tech mechanical and electronic components for machinery INDUSTRY 4.0 ready.

03

Footprint

Biesse Group / Business Model

Customers Segmentation

Joiners Makers of large furniture items Windows and doors Wood building companies and manufacturers Glass workers Marble workers Windows Furniture Kitchen manufacturers

Machinery producers: Wood Aluminum Plastic Metal Advanced Materials

ZBIESSEGROUP

ZBIESSEGROUP

Where we are: business plan update

Strategy & Results Products Solutions Customer Experience

Strategy & Results

2016 successes Execution on track

Where we are / Strategy & Results

2016 Successes

Net $\sqrt{618,5}$
Sales $\sqrt{\frac{2}{5}}$

$\sqrt[4]{55,1}$

Net 29,5
Result €/mln

EBIT

$(493,2)$ Order
Intake

75,8

$12.3_°$ on Net Sales

EBITDA €/mln

$\phi_c$

$\overline{\text{Net}}$ 44,9 $\n f/mln$ Position

Where we are / Strategy & Results

Where we are / Strategy & Results

ZBIESSEGROUP

Where we are: business plan update

ZBIESSEGROUP

Products

Exceeding targets Wood Housing Glass & Stone Mechatronics Tooling Advanced Materials

Exceeding targets

Best-in-class Alignment

Wood

Technology news

Rover A Smart Rover K Smart Rover M5 Brema Eko 2.2 Selco WN 2 Selco SK3 Viet Opera R Stream AK Stream K Winner W4

Housing

Uniteam joined Biesse Group

Uniteam has specialized in the design and manufacture of multi-axis machines for wood construction materials, machining of advanced materials and a range of other special applications from automotive to prototyping.

Working together to broaden their product range and to push territorial boundaries.

ZBIESSEGROUP

Housing

Technologies for the machining of solid wood beams and panels for any wooden structure used in building wooden frame houses, wooden panel houses, prefabricated buildings and playgrounds.

The Housing technologies include: Rover range WinLine range Uniteam range

Glass & Stone

Technology news

Glass Master series - Glass Genius CT-RED series

Stone Master series - Stone Mastersaw 625 DT

ZBIESSEGROUP

Mechatronics

Technology news

ES505 ES575 ES511 Electrospindles dedicated to metal and composite material processing on CNC machine tools HS610 HS810

Two-Axis-heads dedicated to metal pro CNC machine tools

ES951 e-CORE range extension loT ready Electrospindles dedicated to wood and aluminum processing

Tooling

Technology news

Swave KCX DMV/504 New Flash Tools for technical materials ZBIESSEGROUP

Advanced Materials

Technology news

Materia FC Materia CL Materia LD Materia MR Rover Plast M5 Brema Plast Eko 2.1

ZBIESSEGROUP

Solutions

Exceeding targets Service Systems bSuite achievements

Exceeding targets

One-stop Shopping 2016 service Results systems b_Suite + solutions

Service

ZBIESSEGROUP

• Field engineers in Italy and worldwide + Certified dealer engineers + Training course Technical service and spares on-site and 24/7 on-line.

ZBIESSE

ZBIESSE

Systems

More than

500

Systems installed worldwide, reached in 2016

$\mathbf{r}$

ZBIESSEGROUP

bSuite achievement

A complete platform fully implemented

The single, integrated platform to manage all machine processes has been fully implement on machines.

Where we are: business plan update

Customer Experience

ZBIESSEGROUP

Exceeding targets Close to customers Feeling the products Predicting customer needs IIoT with Accenture & Microsoft

Exceeding target

Revenues in North America in 2016 $+18,4$ mln/ $\epsilon$

$+4$

New Local

Branches

ZBIESSEGROUP

Revenues in ASIA in 2016 $+26,7$ mln/ $\epsilon$

Revenues in Western Europe in 2016 $+72,6$ mln/ $\epsilon$

8.000 Demos in 2016

H

Feeling the products

Discovering our factories

HSD: a 4.0 factory Manufacturing Lab Training Academies

Close to Customers

New Technology Campus April 2016

Charlotte NC, USA

Investing Expanding Customer care ZBIESSEGROUP

Digital

SSEGROUD

War

Z IJESSE

Worldwide shows

Exhibitions

ZBIESSEGROUP

Inside events

one2one events & Tech Tour

ZBIESSEGROUP

Where we are / Customer Experience

Institutional events con il cuore a forma di truciol Biesse Campus

Pesaro, Italy April, 16th 2016

Major Customers International Press Institution al figures, with the special
participation of the Minister Boschi

Predicting Customer needs

A new step towards the Factory of the Future "For us 4.0 is not simply a number representing the so-called new industrial revolution, but a real commitment toward our customers to allow them, to achieve the highest level of efficiency" Federico Broccoli (Wood Division Director / Sales)

Desian

$\overline{\phantom{0}}$

$\bigcap$ Materials

成

03 Production

[ Shape & Installation Software

Materials Innovation

Digital Manufacturing Machines

Industry 4.0

IIoT with Accenture & Microsoft

Biesse is collaborating with Accenture & Microsoft on an Industrial Internet of Things (IIoT) project to deliver new services to its customers and augment the aftermarket business.

The flexible range of services serves to improve machine productivity and customer satisfaction by minimizing machine outages through predictive maintenance and in-depth analytics.

Based on the pilot's success, the company plans to roll out services encompassing 10,000 machines. Biesse's advanced IIoT capabilities delivers more control over its machines and overall competitive differentiation.

ZBIESSEGROUP

Where we want to go: 2019 new targets

Continuous Growth More products More solutions More Customer Experience

ZBIESSEGROUP

()%

Wood Division Estimated CAGR 2017-2019

$12_%$

G&S Division Estimated CAGR 2017-2019

$11_%$

Mechatronics Division Estimated CAGR 2017-2019

$12.$

Tooling Division Estimated CAGR 2017-2019

$92$

A.M. Division Estimated CAGR 2017-2019

$\frac{1}{6}$

$\mathcal{L}_{\%}$

Market Estimated CAGR 2017-2019

Market Estimated

CAGR 2017-2019

$5_%$ Market Estimated CAGR 2017-2019

To evolve to Service 2.0: from a "break" and fix" approach to a proactive service

To increase our market share in the system solutions market.

To improve our software to keep offering to our Customers endless possibilities.

Where we want to go / Continuous Growth BCx New targets

$\leq$ Continue to increase our capillarity through Subsidiaries and Distributors

• $\leq$ Invest in the excellence of Chinese and Indian manufacturing plants
• $\leq$ Develop a unique Worldwide Biesse Customer Experience
• Inprove our Customer Care
• $\mathbb Z$ Implement the IIoT

More Products

Markets & Targets Wood Housing Glass & Stone Mechatronics Advanced Materials

ZBIESSEGROUP

Where we want to go / More Products

Wood

Wood - Market

2016

Estimated

worldwide market share 2016

$5_bn$

m

Mhole market

Market Size

Bread market share

Current Retter

Looking forward, we expect the market to continue grow at about 3.9 times the reference sector average growth rate.

Competitors

The competition in the current market is consolidated. We are the second leading company in the sector. Main competitors are located in Germany and in Italy. The most important of these are HOMAG in Germany (29.5% estimated market share) and SCM in Italy (7% estimated market share*).

*automatic machines

SCA Indústria de Móveis (Brasil)

ZBIESSEGROUP

La La Latatatatata

Where we want to go / More Products

Wood - Targets

G&S Division Estimated CAGR 2017-2019

Market Estimated CAGR 2017-2019

product range

Improve product reliability, renew existing

Renovation and completion of the range of machines

Enhance R&D for innovative solutions (technologies and new materials)

Expand the product range of woodworking machines for the housing market

Where we want to go / More Products Housing - Market

Housing

2016

Estimated worldwide market share 2016

Market Size

Whole mar

Diesse market share

· ^t market poten-

Outlook

Looking forward, we expect the market to continue grow more than the 3.9 times the reference sector average growth rate.

Competitors

The competition in the market is consolidated. Main competitors are located in Germany and in Italy. The most important of these are Hundegger (the Market Leader), HOMAG and Weinmann in Germany and SCM, Essetre in Italy.

Musée du Vin et du Négoce (Bordeaux)

ZBIESSEGROUP

Where we want to go / More Products Housing - Target

$T \in \mathbb{R}^n$

2019 Target in wood construction materials machines market

Biesse Group will further extend its product range, increasing penetration in the "niche" yet highly-strategic industry of timber carpentry (beams and structural facades)

Expand our offering in other timber carpentry seaments (minor complexity and higher volumes)

Leverage on Biesse capillarity to boost sales and after-sales worldwide

Where we want to go / More Products Glass - Market

Outlook

In the near future. we anticipate that the glass processing market will grow at about 3.9 times the reference sector average growth rate.

Competitors

We are currently the industry leader in the glass processing market in which we operate. Main competitors are located in Italy and they are CMS. Bottero. and Hegla.

Ciudad de las Artes y las Ciencias, Cerviglas (Valencia)

ZBIESSEGROUP

Where we want to go / More Products Stone - Market

2016

Stone

Estimated worldwide market

share 2016

Market Size

Whole market potential $f$ 600mln

Stone

CONSTRUCTION

$\mathcal{F}$ $-60$

$c_{\text{Ur}r_{\text{en}}}$

$m_{\theta r k_{\theta r}}$

$P_{O}$ _tential

Outlook

Looking to the future. as the in the wood sector. we expect the market to continue to grow at about 3.9 times the reference sector average growth rate.

Competitors

The competition in the current market is consolidated. We are among the leading companies in the sector and we intend to reinforce our positioning. Main competitors are located in France and in Italy and they are CMS. Breton and Thibaut.

I marble Marmi Fontanel

Where we want to go / More Products Glass & Stone Target

G&S Division Estimated CAGR 2017-2019

$7\%$

Market Estimated CAGR 2017-2019

ZBIESSEGROUP

Maintain and reinforce our leading position in the glass sector

Expand our offering in new product segments

Increase our market share in the stone segment, reinforcing our leadership in this area

Where we want to go / More Products Mechatronics - Market

Vech.

2016

Estimated worldwide market share 2016

Market Size

In the near future, we anticipate that the spindles market will grow in line with the reference markets of WAP and metal working machines.

Competitors

Our mechatronics division is currently the leader in the WAP (Wood Advanced Materials*. Plastic) spindles sector. We entered the metal spindles sector. Our main competitors are from Germany. They are KESSLER, IBAG, GMN. WEISS (Siemens). FISHER and STEPTEC.

*Advanced materials Carbon Fiber

Hop markey $\frac{6}{6}$

Foam Composite Alluminium Titanium

Where we want to go / More Products Mechatronics Targets

$11%$

Mechatronics Unit Fstimated CAGR 2017-2019

Market Estimated CAGR 2017-2019

2019 target in metal sector

多BIESSEGROUP

$\overline{0}$

$\Omega$

03

Substantial market share improvement into the metal sector by replicating our WAP standards of excellence in new sectors

Maintain and reinforce our leading positioning in the Wood-Aluminum-Plastic (WAP) sector

Reinforce the partnership with our current

customers

Where we want to go / More Products Advanced Materials*

Outlook

In the near future, we expect that the market of Advanced Materials Processing where we insist will double around the GDP grow rate.

Competitors

The advanced material processing machinery market is highly fragmented worldwide, main competitors are Geiss, HG Grimme, Belotti CMS Industrie, Breton, Mecanumeric, Multicam and Flow Corporation.

Care Model 1:1 Clay block

Where we want to go / More Products Advanced Materials*

*Advanced materials

• Carbon Fiber
• Foam
• Plastics
• Composite
• Alluminium
• Titanium

ZBIESSEGROUP

Expand our plastic working machineries in order to meet the needs of the entire market.

Extend our product range drawing on the expertise of Uniteam to enhance its range of products and applications for machining advanced composite materials for several industries

$101$

OPEN

application

Renewable Energy

æ

Defense and Ballistics

Solutions

2019 new targets Service Systems bSuite

ZBIESSEGROUP

Where we want to go / More Solutions

Service

ZBIESSEGROUP

Our network supports our customers worldwide. Through Biesse service and Biesse parts. we offer technical services and machine/component spares to businesses anywhere in the world on-site. as well as on-line - 24/7.

Our Service will evolve to Service 2.0

• Proactivity: leave "break-and -fix" service logics in the past and ⋉ move onto proactive services. On-site assistance
• $\leq$ Spare Parts: encourage a 24/7 assistance / no down-time approach with maintenance contracts / replacement parts warehouse with over 8,000 items
• Continuous Training: training dedicated to Biesse Field engineers, subsidiary and dealer personnel

Where we want to go / More Solutions

Systems

We increased our market share becoming a leading company in the engineering solutions sector.

The guiding strategy of the Biesse Systems team is based on clear key concepts:

• $\leq$ Definite lead times
• $\nabla$ Automation
• $\leq$ Stock Management
• $\mathbb Z$ Modularity
• $\leq$ Total Quality

Where we want to go / More Solutions

bSuite

Potential Software Fees contribution to Net Sales

Consolidation. reliability and rationalization. Superior technology for creating synergies in machine automation.

$\bigcap$

Technological superiority and sustainability. Ensuring advanced. sustainable know-how in order to develop intelligent machines.

Simple. smart software. Meeting growing technological needs through application software and smart apps.

Business software. Business-oriented software to enhance collaboration with our customers' businesses.

Biesse Customer Experience

ZBIESSEGROUP

$BCx$ Close to customers Feeling the products Customer Services IIoT: predicting your needs

Close to customers: Subsidiaries

To expand our global presence to be close to our customers.

ZBIESSEGROUP

Continue to promote the "Roadmap to success" for our subsidiaries: moving from reactive to proactive, fostering entrepreneurship at all levels, defining market and customer-oriented strategies

Invest in new and innovative technological complexes, "Biesse Campus", to better contain our expansion in selected areas:

• ☑ DACH (Germany-Austria-Switzerland)
• $\nabla$ Middle East
• $\vee$ Oceania

Invest in human resources and capabilities as arowth drivers

Close to customers: Trade Distribution 2.0

To strengthen our dealer network

Continue the Trade Markets Investments towards the "Roadmap to success".

We began the sales growth process by our Headquarters and Subsidiaries, and we are now ready to support our dealers.

We will support them investing in strategic assets providing them with tools and a dedicated team of people: specialists in CRM, Sales Intelligence, Road Mapping, Marketing & Communication, trade fairs, events and showrooms.

Close to customers: India & China

In addition to the Italian sites, we boost manufacturing sites in India and China, to better satisfy Customer worldwide.

The two sites, Bangalore and Dongguan manufacture a portfolio Local4Global, distributing their products worldwide.

Product Quality Made in Biesse

Local suppliers certified by Biesse Quality

ZBIESSEGROUP

Ongoing integration and training

2019 Target production abroad quote

Feeling the products

Live the Experience at the Biesse Group booth during exhibitions:

• $\vee$ Virtual Reality
• $\leq 4.0$ Industry
• $\overline{\mathcal{C}}$ Symposium

Continue to improve our Showroom, increase the number of the Inside and one-to-one events and measure their impact on the local market.

Continue to invest in exhibitions taking part in shows for all sectors including composites.

Biesse Group Collection

A merchandising project with an online shop to sell high quality branded products in order to:

Increase the brand awareness Strength the brand identity Increase the Dealer and Customer loyalty Renforce the communication consistency Increase the individual sense of belonging

Available for Biesse Group employees as well.

Customer Services

Promoting, nurturing and developing close and constructive relationships with customers in order to better understand their needs and improve Biesse products and after-sales service.

• $\mathbb Z$ Zero Downtime objective
• Worldwide local expertise $\overline{\mathsf{v}}'$
• Connectivity and training master

Predict your needs: Ilot Hannover Messe 2017

A solid example of Biesse's ability to innovate

Biesse will participate in the Hannover Messe 2017, the most important trade fair for innovation anywhere in the world.

In collaboration with Accenture and Microsoft Biesse Group will present an icon for cutting edge Biesse technology, a Rover Machining Centre with its 5-axis electrospindle connected to the cloud.

ZBIESSEGROUP

ZBIESSEGROUP

Our present in figures - the 2016

of Holde

$\bullet$

$F + 30$

R.O.E. tree

Orders

Revenue

Profit

Cash

Group orders intake & backlog

$\leq 2016$ : Group orders intake* +11% (vs. the same period 2015)

2016: Group backlog* +16% (vs. the same period 2015)

2016 by quarters

Extract of the P&L

€/mln	2013	2014	2015	2016
Net sales year-1	378.4 $-1.2%$	427.1 $+12.9%$	519.1 $+21.5%$	618.5 $+19.1%$
Cost of good sold	155.9 41.2%	177.6 41.6%	206.1 39.8%	245.1 39.7%
Value added $\%$	147.0 38.8%	167.8 39.3%	212.4 40.9%	252.4 40.8%
Labour cost	112.7 29.8%	128.2 30.0%	148.2 28.6%	176.6 28.6%
overhead	81.8 21.6%	91.0 21.3%	104.7 20.2%	124.5 20.1%
EBITDA	34.3	39.6	64.1	75.8
%	9.1%	9.3%	12.4%	12.3%
EBIT	18.1	24.8	43.7	$55.1*$
%	4.8%	5.8%	8.4%	8.9%
Net result	6.4	13.8	21.1	29.5	87

Operating Net Working Capital

Payables	29.4%	28.8%	29.5%	31.1%
% net sales
% net sales
Receivables	20.1%	18.9%	20.3%	20.8%
% net sales
	22.8%	23.0%	21.5%	21.1%
Inventories
€/mln	2013	2014	2015	2016

Cashflow - Net Debt

€/mln	2013	2014	2015	2016
Gross Cashflow % net sales	52.0 13.8%	38.3 9.0%	46.3 8.9%	46.6 7.5%
Investments % net sales	$-19.8$ 5.2%	$-20.8$ 4.9%	$-25.2$ 4.9%	$-32.0$ 5.2%
Net Cashflow % net sales	32.2 8.5%	17.5 4.1%	21.1 4.1%	14.6 2.4%
dividends		$-4.8$ 0.18 per share	$-9.8$ 0.36 per share	$-9.8$ 0.36 per share
$\triangle$ Net Debt		12.7	11.3	4.8
N.F.P.	$-23.9$	$-11.2$	0.1	4.9	89

People distribution (without interim people)

$*$ including Uniteam people (nr. 57)

	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016
Production	965	1.250	1.265	1.175	1.201	1.335	1.482
% of total people	41%	46%	45%	44%	42%	42%	41%
Service & After sale	568	577	574	613	628	690	803
% of total people	24%	21%	21%	22%	22%	22%	22%
R&D	293	316	338	321	361	383	436
% of total people	12%	12%	12%	12%	13%	13%	12%
Sales & Marketing	340	361	364	351	439	495	587
% of total people	13%	13%	13%	13%	15%	15%	16%
G & A	202	233	242	235	252	273	310
% of total people	9%	9%	9%	9%	9%	9%	8.5%
ITALY	1.660	1.656	1.646	1.547	1.605	1.780	2.009
% of total people	70%	61%	59%	57%	56%	56%	56%
OUTSIDE ITALY**	708	1.081	1.136	1.148	1.276	1.396	1.609
% of total people	30%	39%	41%	43%	44%	44%	44%
TOTAL	2.368	2.737	2.782	2.695	2.881	3.176	$3.618*$

People distribution

	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016
ITALY % of total people	1.660 70%	1.656 61%	1.646 59%	1.547 57%	1.605 56%	1.780 56%	2.009 56%
OUTSIDE ITALY** % of total people	708 30%	1.081 39%	1.136 41%	1.148 43%	1.276 44%	1.396 44%	1.609 44%
TOTAL	2.368	2.737	2.782	2.695	2.881	3.176	3.618
vs Dec 2015: +442 (13.9%) vs Dec 2014: +737 (25.6%) vs Jun 2016: +159 (4.6%)
interim people at the end of Dec 2016: 181 (112 at the end of 2015)

Patent Box & IRES reduction can impact totally for approx 6.5% the tax rate D.T.A. (China) can't be used

Our future in figures

Net Sales - Anticipating plan execution

$\varepsilon/m$ ln 16-'18 three years Plan 17-19 three years Plan 826 752 676 633 619 572 519 427 383 378 389 2011 2012 2013 2014 2015 2016 2017e 2018e 2019e

Confirming the growth growth path to consolidate our leadership

• $\leq$ In 2016 we went beyond our targets, anticipating plan execution
• $\leq$ We yearn to achieve higher targets in 2019 leveraging on our strategy: more products, more solutions, more customers

Our future in figures

Stabilize Profitability

多BIESSEGROUP

$10.1%$ Net sales CAGR 2017-2019

$39%$

Target COGS incidence on Net Sales

$<$ 30%

Target Labor Cost incidence on Net Sales

$<$ 20%

Target Overhead Cost on Incidence on Net Sales

Continue our growth path

Optimize our production cost

Invest in human resources and capabilities as growth driver, controlling incidence on net sales

Optimize Overhead cost

Continuing to pursue an organic growth.

• Increasing our sales force. $\overline{\vee}$ subsidiaries. agents and distributors worldwide
• Growing not only in the $\overline{\vee}$ woodworking machine sector. but also in the areas of glass. stone, mechatronics and advanced materials especially considering the after-sales services
• Continuing to diversify into new $\overline{\vee}$ sectors: advanced materials and metal working

Ebitda

ZBIESSEGROUP

Generation of value

• Decreasing incidence of $\overrightarrow{v}$ COGS on Net Sales through world production optimization and efficiency
• Maintaining Labour Cost $\triangledown$ incidence on Net Sales below 30%
• $\mathbb Z$ Maintaining Overhead incidence on Net Sales well below 20%

Our future in figures / Cash

Net Financial Position

Positive cash flow

• $\leq$ Starting point: positive Net Financial Position at the end of 2016
• $\leq$ Continuing to invest in R&D around 2% of Net Sales
• Cash Flow finances the $\overline{\vee}$ projected increasing CAPEX to support our growth forecast
• $\leq$ Paid yearly dividends (since 2014 for tree years) for a total amount of $> \epsilon$ 24 mln

Our future in figures

Operating Net Working Capital

Control our Operating Net Working Capital.

• $\triangledown$ Maintaining Operating Net Working Capital incidence on Net Sales well below 12%
• Maintaining our Group $\overrightarrow{v}$ inventories below 21% incidence on Net Sales
• Maintaining our Group DSO $\overline{\vee}$ around 60 -65 days
• Maintaining our Group DPO ั⊮ around 100-110 days

Capex^*

*Potential growth strategy through M&A not included

Continue our growth path through investments

2017e

tangible: € 24.4 mln intangible: € 17.2 mln

main investments drivers:

• Indian Manufacturing Site ⊻
• Chinese durable goods investments $\overline{\vee}$ (KOREX)
• Mechatronics Italian plant (HSD S.p.A.) $\triangledown$ components production machines
• Metal Working (internal phase): $\triangledown$ improvement of the components production
• I.T.: digital factory PLM & CRM -Oracle implementation
• R&D constant investment around 2% $\overline{\vee}$ on net sales every year

Capex: tangibles

Indian Manufacturing Site widening to $\overrightarrow{v}$ meet the projected productive expansion

Chinese Production Site upgrade and $\overrightarrow{\vee}$ durable goods investments (KOREX) CNC lathe, vertical and horizontal working center machines

TANGIBLE ASSETS

ZBIESSEGROUP

Continue our growth path through investments

Mechatronics Italian plant (HSD S.p.A.) components production machines (rotary tables) + american subsidiary new site (HSD U.S.A. subsidiary)

Metal working (internal phase): improvement of the components production - durable goods investments.

101

Capex: intangibles

continue our growth path through investments

ZBIESSEGROUP

Extract of the P&L

€/m n	2013	2014	2015	2016		2019e	Targets
Net sales $year -1$	378.4 $-1.2%$	427.1 $+12.9%$	519.1 $+21.5%$	618.5 $+19.1%$	CAGR 10.1	825.7
Cost of good sold	155.9 41.2%	177.6 41.6%	206.1 39.8%	245.1 39.6%		322 39.0%
Value added	147.0	167.8	212.4	252.4		347.3
%	38.8%	39.3%	40.9%	40.8%	CAGR 11.2	42.1%
Labour cost	112.7 29.8%	128.2 30.0%	148.2 28.6%	176.69 28.6%		241.9 29.3%	$< 30\%$ incidence
overhead	81.8 21.6%	91.0 21.3%	104.7 20.2%	124.5 20.1%		159.4 19.3%	< 20% incidence
EBITDA	34.3	39.6	64.1	75.8		105.4
%	9.1%	9.3%	12.4%	12.3%	CAGR 11.6	12.8%
EBIT	18.1	24.8	43.7	$55.1*$		78.7
$\%$	4.8%	5.8%	8.4%	8.9%	CAGR 12.6	9.5%	103

*after non recurring items

Operating Net Working Capital

€/m n	2013	2014	2015	2016	2019e	Targets
Inventories % net sales	22.8%	23.0%	21.5%	21.1%	20.2%	<21%
Receivables % net sales	20.1%	18.9%	20.3%	20.8%	20.6%	DSO 60-65 days
Payables % net sales	29.4%	28.8%	29.5%	31.1%	29.7%	DPO 100-110 days
Operating Net Working Capital % net sales	51.4 13.6%	55.6 13.0%	63.4 12.2%	66.9 10.8%	92.0 11.1%

Cashflow - Net Debt

$\epsilon$ /mln	2013	2014	2015	2016	2019e
Gross Cashflow % net sales	52.0 13.8%	38.3 9.0%	46.3 8.9%	46.6 7.5%	69.3 8.4%
Investments % net sales	$-19.8$ 5.2%	$-20.8$ 4.9%	$-25.2$ 4.9%	$-32.0$ 5.9%	$-32.0$ 3.9%
Net Cashflow % net sales	32.2 8.5%	17.5 4.1%	21.1 4.1%	14.6 2.4%	37.3 4.5%
dividends		$-4.8$ 0.18 per share	$-9.8$ 0.36 per share	$-9.8$ 0.36 per share	$-9.8$ 0.36 per share
$\triangle$ Net Debt		12.7	11.3	4.8
Net Debt	$-23.9$	$-11.2$	0.1	4.9	$\begin{array}{c} \hline \end{array}$ 44.7

Value added

People evolution

	FY 2016	FY 2017e	%
Production	1.482	1,574	$+6.2$
Service & After sale	803	934	$+16.3$
R&D	436	495	$+13.5$
Sales & Marketing	587	676	$+15.2$
G&A	310	324	$+4.5$
ITALY	2.009	2,166	$+7.8$
OUTSIDE ITALY	1.609	1,837	$+14.2$
TOTAL	3.618	4,003	$+10.6$

ZBIESSEGROUP

the labour cost increase is EURO 25.1 mln vs 2016 (29.7% 2017 incidence against net sale vs 28.5% in 2016) Increase by countries India China Italy Oceania Asia Canada

France Spain

Germany

U.S.A

UK

People distribution by main countries - 2016

People distribution by main countries - 2017e

ZBIESSEGROUP

ZBIESSEGROUP
Annex

Our future in figures / Annex Machines Market Value

Our future in figures / annex

Historical correlation index (since 2004)

Our future in figures / Annex

Housing & Furniture - Beta

world furniture & housing average 2017-2019: +2.9% historical correlation index (2004-2016): 3.9 THEORETICAL BIESSE GROW RATE: 11.3%

多BIESSEGROUP

Disclaimer

• $\le$ 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.
• $\le$ 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.
• $\le$ 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.
• $\le$ Any reference to past performance of the Biesse S.p.A. shall not be taken as an indication of future performance.
• $\le$ 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
• $\leq$ By attending the presentation you agree to be bound by the foregoing terms.

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