Cembre — Investor Presentation 2021

Sep 14, 2021

Investor presentation

Results of the first half 2021

CEMBRE at a glance

Group management team Main product lines & applications Results of the first half 2021

CONTENTS

CEMBRE | Investor relations 2

• First half 2021 guidance
• Stock data & shareholding structure
• Contact

• 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 4.8% in the last 20 years (2001-2020), from 56 M€ in 2001 to 137.1 M€ in 2020. In the last 5 years the Group has grown by a CAGR of 2.8% (2016-2020).
• It is a dividend payer with a 20 years average dividend payout ratio of 45.2%, and an average dividend yield of 3.7% (2000-2020). The average dividend yield in the last 5 years has been of 4.3% (2016-2020).
• In 2020, the Group invested 8.0 M€; the total amount of investments made by the company in the last five years (2016-2020) is 58.6 M€; at December 31, 2019 investments amounted to 11.7 M€.
• The product mix (a total of more than 18K end products sold during 2020) is offered to around 7K single clients around the world, with 10-biggest clients' purchases corresponding to c.18% of the consolidated turnover.

MISSION

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

2021/02 CEMBRE | Investor relations 4

• Giovanni Rosani Chief Executive Officer (CEO)
• Aldo Bottini Bongrani Member of the board M&A and Special Projects
• Claudio Bornati Chief Financial Officer (CFO)
• Felice Albertazzi Member of the board Chief Sales & Marketing Officer (CSMO)

Franco Celli

Member of the board Chief Operating Officer (COO)

Spain

100%

GROUP STRUCTURE

Employees: 107 Employees: 39 Employees: 45 Employees: 56 Employees: 30

USA

100%

Manufacturing and trading unit Trading unit

100%

France

100%

CEMBRE Ltd UK

The Group employs 789 employees worldwide (at June 30, 2021)

100%

GmbH Germany

•87

CEMBRE has extensive knowhow 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 (124 salesmen) are significant competitive advantages for CEMBRE.

MAIN PRODUCT LINES

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

APPLICATIONS: RAILWAY

18,000 product types sold every year

4.5 Millions electrical connectors sold by CEMBRE Group each working day

22,800 product types for immediate delivery

NUMBERS

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 M€.

CEMBRE S.p.A. – Headqquarter in Brescia (Italy)

In addition, CEMBRE has a production facility in the UK which operates on a 8,800 m2 land.

This plant in Birmingham manufactures mainly for the local market.

The sales generated in the UK are 13% of the consolidated turnover of the first half 2021

CEMBRE Ltd. – Factory in Curdworth Birmingham (UK)

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) and 1 in the USA.

Group companies

Regional offices

Main importers

… PRESENT ALL OVER THE WORD

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

1st Half 2021

Marking Systems Cable Glands Others

REVENUES BREAKDOWN

before commercial rebates by product family (€'000)

1st Half 2020

Electrical connectors	Tools	Railway Products
Marking Systems	Cable Glands	Others

	Electr. connectors	Tools	Railway products	Marking systems	Cable glands	Others	Total
1st Half	37,787	13,239	13,055	17,109	7,704	3,159	92,053
2021	41.05%	14.38%	14.18%	18.59%	8.37%	3.43%	100%
1st Half	27,523	10,272	11,154	12,249	5,653	2,718	69,569
2020	39.56%	14.77%	16.03%	17.61%	8.13%	3.91%	100%
Change	37.29%	28.88%	17.04%	39.68%	36.28%	16.23%	32.32%

GEOGRAPHICAL REVENUES BREAKDOWN

			Italy	1st Half 2021	1st Half 2020	Δ
			Sales		25.4M	43.2%
			% on total		39.3%
Europe (Italy excluded)	1st Half 2021	1st Half 2020	Δ
Sales	39.6 M	30.4 M	30.2%
% on total	46.8%	47.0%
			Rest of the World	1st Half 2021	1st Half 2020	Δ
			Sales	8.6 M	8.9 M	-3.1%
			% on total	10.2%	13.7%

€ Millions

CONSOLIDATED RESULTS OF THE FIRST HALF 2021

€ Millions	1st Half 2021	1st Half 2020	Change % 2021-2020	1st Half 2019	Change % 2021-2019
Sales	84.5	64.7	30.8%	76.9	10.0%
EBITDA % of sales	25.2 29.8%	15.6 24.1%	61.9%	20.9 27.2%	20.6%
EBIT % of sales	19.6 23.2%	10.2 15.8%	92.1%	16.2 21.0%	21.2%
EBT % of sales	19.7 23.3%	10.2 15.8%	92.9%	16.0 20.9%	22.7%
Net profit % of sales	14.7 17.3%	7.6 11.8%	92.8%	12.4 16.1%	18.4%
Tax rate %	25.5%	25.5%		22.8%

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. The renewal of the agreement for tax years 2020-2024 is under evaluation, but, at the time of present document, the closing date and the result of this process is not foreseeable.

€ Millions	2019	2018	2017
Fiscal benefit	1.7	1.8	1.7
Fiscal benefit for years 2015-2016	-	-	2.3
Tax rate %	19.5%	19.8%	14.5%
Normalised tax rate %	26.0%	26.2%	29.2%

GROUP'S COMPANIES TURNOVER* OF THE FIRST HALF 2021

Company (Euro thousands)	1st Half 2021	1st Half 2020	Changes %	1st Half 2019
CEMBRE S.p.A. (Italy)	46,948	33,279	41.1%	40,361
CEMBRE Ltd. (UK)	10,983	7,642	43.7%	10,401
CEMBRE S.a.r.l. (France)	5,956	4,309	38.2%	5,633
CEMBRE España S.L.U. (Spain)	6,548	5,495	19.2%	6,045
CEMBRE GmbH (Germany)**	9,335	7,956	17.3%	7,689
CEMBRE Inc. (USA)	4,777	5,975	-20.1%	6,749
CEMBRE Group	84,547	64,656	5.0%	76,878

* net of intragroup sales

** 2019 datum includes IKUMA turnover

	€ Millions	Jun. 30, 2021	Dec. 31, 2020	Jun. 30, 2020
a	Net operating working capital % of sales	63.2 40.8%	56.2 41.0%	59.2 45.8%
b	Net fixed assets	105.4	104.3	103.8
c	Assets available for sales	-	-	-
d	Employees' severance indemnities	2.1	2.2	2.2
e	Provisions for risks and charges	0.3	0.2	1.0
f	Deferred taxes	3.1	2.9	2.8
	Net invested capital (a+b+c-d-e-f)	163.1	155.2	157.0
g	Equity	164.4	163.6	152.3
h	Net financial position	(1.3)	(8.4)	4.7
	Total sources (g+h)	163.1	155.2	157.0

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

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

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

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

INDEX ANALYSIS

INVESTMENTS TREND

€ '000	2005	2006	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020
Investments in tangible assets	1,910	5,353	6,404	4,064	4,815	3,863	16,183	12,591	6,802	8,759	6,534	7,064	11,732	17,775	10,609	7,181
Investments in intangible assets	142	87	500	544	182	169	418	597	573	477	601	569	1.101	691	1.057	793
Total investments	2,052	5,440	6,904	4,608	4,997	4,032	16,601	13,188	7,375	9,236	7,135	7,633	12,833	18,466	11,666	7,974

Implications of COVID-19 pandemic

In 2020 Cembre Group incurred the following additional costs:

Amount	Description
196,000 €	Implementation of COVID-19 prevention measures (purchase of personal protective equipment and of hygiene products, sanitisation of environments, antibody tests and flu vaccination for employees)
18,000 €	equipment (thermal scanners)
410,800 €	salary compensation(to partially compensate the reduction in wages that occurred during the furlough, used during activities lock-down period) and an attendance bonus for those who worked "in presence" during the 2020 lock-down period from March 23 to April 17
98,000 €	donations to institutions committed on the front line of the fight against the virus
722,800 €	TOTAL COSTS
Cembre Group used for the first time in his history Government wages

guarantee fund (Cassa Integrazione), but product deliveries have never been interrupted because the Group supplies railway and electrical companies

CEMBRE focused on these targets:

Business development thanks to:

• A strengthening of CEMBRE competitive advantage by developing new products and continuous product range renewing by an intense R&D activity
• Improvement of the distributor channel in foreign countries
• 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, highlyautomated machinery.

2021 AND ONWARDS

The automated warehouse, located in a 4,800 m2 industrial building built in 2012, has been operating from January, 2013.

This automated warehouse is 3 time more efficient, and has a 50% increase in end-product capacity warehousing compared to the previous automated warehouse that has been converted to stock raw material.

2021 AND ONWARDS

In 2018, a new 9,600 m2 industrial building (two floors) started to be used, increasing the dimension of the production and parking area.

2021 AND ONWARDS

Future structures

In January 2021 CEMBRE signed the convention for additional 15,000 m2 area dedicated to future expansion on the manufacturing plant.

Automated warehouse

STOCK DATA & SHAREHOLDING STRUCTURE

¹ Using consolidated profit ² Using the year-end share price

SHARE PRICE EVOLUTION

0

	2001	2002	2003	2004	2005	2006	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021
A) Share price1	2,42	1,90	2,68	2,99	4,75	6,12	6,25	3,30	4,66	6,25	5,45	6,34	8,99	10,21	13,90	13,90	21,60	20,25	24,00	18.85	26.902
Change in share price		-21.5%	41.1%	11.6%	58.9%	28.8%	2.1%	-47.2%	41.2%	34.1%	-12.8%	16.3%	41.8%	13.6%	36.1%	0.0%	55.4%	-6.3%	18.5%	-21.5%	42.7%
Received dividend		0,10	0,08	0,07	0,10	0,15	0,22	0,26	0,16	0,12	0,26	0,16	0,16	0,26	0,36	0,46	0,70	0,80	0,90	0.90	0.90
B) Accrued received dividends		0,10	0,18	0,25	0,35	0,50	0,72	0,98	1,14	1,26	1,52	1,68	1,84	2,10	2,46	2,92	3,62	4,42	5,32	6.22	7.12
Share return (A+B)	2,42	2,00	2,86	3,24	5,10	6,62	6,97	4,28	5,80	7,51	6,97	8,02	10,83	12,31	16,36	16,82	25,22	24,67	29,32	25.07	34.02
Price quota	100.0%	95.0%	93.7%	92.3%	93.1%	92.4%	89.7%	77.1%	80.3%	83.2%	78.2%	79.1%	83.0%	82.9%	85.0%	82.6%	85.6%	82.1%	81.9%	75.2%	79.1%
Dividend quota	0.0%	5.0%	6.3%	7.7%	6.9%	7.6%	10.3%	22.9%	19.7%	16.8%	21.8%	20.9%	17.0%	17.1%	15.0%	17.4%	14.4%	17.9%	18.1%	24.8%	20.9%

1 at the end of the year ² at September 8, 2021

Thank you

Claudio Bornati CFO & IR

Via Serenissima 9 • 25135 Brescia (BS) ITALY ph. +39 030 36921 claudio.bornati@cembre.com cembre.com

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.