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Cembre Investor Presentation 2020

Oct 2, 2020

4425_ip_2020-10-02_231d9e52-f661-422e-9115-f47c06b7269a.pdf

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CEMBRE. Investor presentation

1st Half 2020 results

CEMBRE AT A GLANCE

  • CEMBRE is Europe's leading manufacturer of electrical crimp type connectors and related installation tools
  • The Group has grown its revenues by a CAGR of 5.5% in the last 20 years (2000-2019), from €50 mn in 2000 to €146.3 mn in 2019. In the last 5 years the Group has grown by a CAGR of 3.8%(2015-2019).
  • It is a dividend-payer with a 20 years average dividend payout ratio of 50.3%, and an average dividend yield of 3.8% (2000-2019). The average dividend yield in the last 5 years has been of 4,4%(2015-2019).
  • In 2019, the Group invested €11.7 mn; the total amount of investments made by the company in the last five years (2015-2019) is €57.7 mn; at December 31, 2018 investments amounted to €18.5 mn

  • The product mix (a total of more than 15k end products sold during 2019) is offered to around 8k single clients around the world, with 10-biggest clients' purchases corresponding to c.15% of the consolidated turnover

  • I.Management Team

  • II.Business overview
  • III.1st Half 2020 results
  • IV.1st Half 2020 Guidance
  • V.Stock data & shareholding structure
  • VI.Contact

MANAGEMENT TEAM

  • Giovanni Rosani Chief Executive Officer (CEO)
  • Aldo Bottini Bongrani Member of the boardM&A and Special Projects manager
  • Claudio Bornati Chief Financial Officer (CFO)

CEMBRE cooperates with the users of its products to find the best technical and economical solutions related to electrical connection applications

GROUP STRUCTURE

Manufacturing and trading unitTrading unit

The Group employs 750 employees worldwide

CEMBRE has extensive know-how in its operating field and its strong R&D team allows it to respond quickly to market demands.

Sharp focus on customer needs and the efficient international sales network (115 salesmen) are significant competitive advantages for CEMBRE.

BUSINESS OVERVIEW

CEMBRE is Europe's leading manufacturer of electrical crimp type connectors and related installation tools

MADE IN BRESCIA

  • CEMBRE has been established in 1969 and manufactures its products in its state-of-art production facility located in Brescia
  • The facility covers an area of 60,000 m2 on a total land area of 121,000 m2
  • In December 2011 CEMBRE purchased a 13,500 m2 industrial area next to its plant, by investing €9.7 mn

Cembre S.p.A. – Headquarter in Brescia (Italy)

… AND MADE IN UK

  • In addition, CEMBRE has a production facility in the UK which operates on a 8,800 m2 land
  • This plant in Birminghammanufactures mainly for the local market
  • The sales generated in the UK are 12% of the consolidated turnover of the 1st Half of 2020

Cembre Ltd. – Factory in Curdworth Birmingham (UK)

VERY STRONG IN EUROPE

  • CEMBRE is present all over the Italian territory through a network of salesmen and representatives who are able to offer fast and constant technical assistance
  • Abroad, it operates through 4 subsidiaries in Europe (UK, France, Spain and Germany) and1 in the USA

Group companiesRegional offices

Main distributors

CEMBRE has a network of importers and agents who provide technical and commercial assistance and rapid delivery worldwide

REVENUES BREAKDOWN* by product family (€'000)

GEOGRAPHICAL REVENUE BREAKDOWN

REVENUE EVOLUTION

A WIDE PRODUCT-MIX

In order to maintain its leading position and increase the penetration of market, CEMBRE had sensibly enlarged the range of products offered through:

Research activities

• Mainly focused on the development of innovative products for the sectors with the highest growth potential (rail transportation, civil and industrial plant engineering)

Improvement and update of existing products

• To get them easier to use and more efficient in their performances

Introduction of complementary products

•e.g. cable markers

ELECTRICAL CONNECTORS: 14.9% DECREASE IN SALES

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The "%" indicated alongside the values represents the weight on the total turnover

Features

  • High and safe performance guaranteed by effective quality control during the production processes
  • High level automation of manufacturing process and consequent costs reduction
  • Quick adaptation of products to clients' needs, thanks to its high flexible productivity

TOOLS: 18.4% DECREASE IN SALES

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Features

  • Quick installation of connectors thanks to tools used for compressing and cutting the conductors
  • Wide products range: mechanical, pneumatic, hydraulic and battery operated tools

Development of new products in last years

  • B15-B54 battery operated "in line" hand-tools
  • Hydraulic battery operated pump already marketed in Italy and Europe
  • The new generation of battery tools is intended to progressively substitute the traditional ones, as they are more appreciated thanks to the elimination of physical endeavour

RAILWAY PRODUCTS: 19.9% DECREASE IN SALES

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Features

  • High quality products
  • Constant R&D activities
  • High potential growth

New product development

  • Nut Runner NR-11P
  • Battery drill

Both products are very competitive on the market since they offer superior flexibility, lightness and velocity against alternative products

CABLE MARKERS: 20.5% DECREASE IN SALES

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The "%" indicated alongside the values represents the weight on the total turnover

With the introduction of these newproducts CEMBRE:

  • Further enriched its offer with thousand of new articles (electrical equipment wholesalers prefer supplier with a wide catalogue)
  • Strengthened its competitive position in Italy and created big opportunities to enter the European markets
  • Entered a market, worth of Euro 25 million considering only Italy
  • Improved the production structure

Development and production of thermal printer MG3, in Brescia (Italy)

CABLE GLANDS: 11.5% DECREASE IN SALES

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1st HALF 2020 CONSOLIDATED RESULTS

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1

The parent company CEMBRE S.p.A. in December 2017 signed, with the support of Business Tax and Consulting firm Deloitte, an agreement with the Italian Revenue Office defining the calculation methods and criteria for the economic contribution to business revenue of intangible assets in the context of the «Patent Box» scheme, for tax years 2015-2019.

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1st HALF 2020 GROUP'S COMPANIES TURNOVER*

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* net of intragroup sales

JUNE 30, 2020 CONSOLIDATED BALANCE SHEET

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t
e
n
a
n
c
a
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n		 4
7		 (
6
)
5		 4
8
l
(
h
)
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s
o
r
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u		 1
5
7		 1
5
4
8		 1
5
5

CEMBRE'S REVENUE AND PROFITABILITY TREND (€ '000)

CEMBRE'S REVENUE AND PROFITABILITY TREND (€ '000)

CEMBRE'S REVENUE AND PROFITABILITY TREND (€ '000)

CEMBRE'S REVENUE AND PROFITABILITY TREND(€ '000)

INDEX ANALYSIS

CEMBRE | Investor presentation

INVESTMENTS TREND

Cembre focused on these targets:

  • Business development thanks to:
  • A strengthening of Cembre competitive advantage by developing newproducts and continuous product range renewing by an intense R&D activity
  • Anew product line for plumbing sector
  • An higher penetration in the foreign markets, especially in the US and Germany
  • A commercial commitment focus on high growing potential products
  • Cost management by a better operative efficiency obtained from economies of scale and process innovations;
  • Enforcing the manufacturing structure by investing in high-tech, highly-automated machinery.

2020 AND ONWARDS

  • The automated warehouse, located in a 4,800 m2 industrial building built in 2012, has been operating fromJanuary, 2013
  • This warehouse is 3 time more efficient, and has a 50%increase in end-product capacity warehousing

2020 AND ONWARDS

In 2018, a new 9,600 m2 industrial building (two floors) started to be used, increasing the dimension of the newlogistic center of the company and production areas

STOCK DATA & SHAREHOLDING STRUCTURE

Using consolidated profit

2Using the year-end share price

3Calculated using closing price at September 25, 2020: €16.00

SHARE PRICE EVOLUTION

3
0
28
26
24
22
20
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20
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2		 20
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3		 20
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4		 20
05		 20
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6		 20
07		 20
0
8		 20
0
9		 20
10		 20
11		 20
12		 20
13		 20
14		 20
15		 20
16		 20
17		 20
18		 20
19		 20
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A)
ice
1
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8		 2.9
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2.1		 %
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3
4.1		 %
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.8		 %
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3.
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9
8		 4
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1.5		 1.6
8		 1.8
4		 2.1
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6
2		 4.4
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5.		 6,
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(
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8
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0
2		 10
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6		 16
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2		 25
.22		 24
.67		 29
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2		 22
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Pri
ota
ce
qu		 %
10
0.
0		 %
95
.0		 %
9
3.7		 %
9
2.3		 %
9
3.1		 %
9
2.4		 %
8
9.7		 %
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.1		 %
8
0.
3		 2%
8
3.		 2%
7
8.		 %
7
9.1		 %
8
3.
0		 %
8
2.9		 %
85
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8
2.6		 %
85
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2.1
%		 81
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%		 7
2.0
%
Div
ide
nd
ota
qu		 0.
0
%		 0
%
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3
%		 %
7.7		 6.
9
%		 6
%
7.		 10.
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.9
%		 19.
%
7		 16.
8
%		 21
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%		 20
.9
%		 0
%
17.		 1%
17.		 0
%
15.		 4%
17.		 14.
4%		 %
17
.9		 %
18
.1		 28
.0
%

1at the end of the year 2 at September 25, 2020

Claudio BornatiCFO & IR

Via Serenissima 9 • 25135 Brescia (BS) ITALY ph. +39 030 [email protected]

The manager responsible for preparing the Company's financial reports, Claudio Bornati, declares, pursuant to paragraph 2 of Article 154 bis of the Consolidated Law on Finance, that the accounting information contained in this presentation corresponds to the document results, books and accounting records.

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