De'Longhi

Earnings Release • Nov 10, 2020

Foreword

Since Oct. 1 st 2019, some contributions to customers (previously included within the financial charges section of the Profit & Loss scheme) were treated as commercial premiums, hence netting revenues.

However, for comparative purposes, in some cases, the figures herein presented may be "normalized", i.e. reported on a comparable basis with those of the previous year, hence excluding the effects deriving from the change of treatment of the financial discounts.

Definitions & assumptions

In this presentation:

• Adjusted stands for "before non recurring items and inputed costs of the stock option plan"
• ForEx or FX stand for Foreign Exchange Rates;
• "M" stands for million and "bn" stands for billion.
• Normalized stands for excluding the change of treatment of the financial discounts;
• Organic stands for net of Foreign Exchange Rates and hedging derivatives effects;
• Q3 stands for third quarter (July 1st September 30th);
• 9M stands for 9 months (January 1st September 30th);
• Reported stands for official data including the application of IFRS-16 accounting standard and the change of treatment of the financial discounts.

CONTENTS

• Update on business evolution

• New products
• 9 months 2020 results

Media spending, consumers engagement and new launch journey

More investments in the digitalization process of the launch events

New activities in the on-line space to enhance the customer engagement

Supplementary efforts to renew the focus on the physical stores

Media spending, consumers engagement and new launch journey

INFLUENCERS

Spending dedicated to enlarge the coffee category and build up the brand awareness in US and China

Distribution channels

During this complex period, people have changed the consumption priorities and shifted their demand patterns, embracing new purchasing styles and choices.

• Consumers seem to buy more on the online channels, even after the end of the lockdown.
• Digital services acceleration, both in the pure on-line and hybrid systems.

OFF-LINE Channel

• Digital transformation: from bricks and mortar to Omnichannel.
• After the lockdown, the physical stores have quickly recovered the footfall by drawing the customers' attention

CONTENTS

• Update on business evolution
• New products
• 9 months 2020 results

Coffee Makers: new products

PRIMADONNA SOUL

Full-auto coffee machine

Bean Adapt Technology,

High precision electronically controlled grinder

La Specialista Maestro

Pump coffee machine

New advanced settings dedicated to the different types of coffee beans

ELETTA Capuccino EVO

Full-auto coffee machine

New LCD display with a more friendly usability; variety of recipes

Cooking & Food Preparation: new products

Comfort & Home Care: new products

HSX DIGITAL

Portable heater

Digital precision thermostat; countdown timer for delayed start/stop; eco function

CARESTYLE 1

Steam Generator Irons

DoubleSteam Technology and FreeGlide 3D

EX130

Portable Air Conditioner

Optimal balance of temperature and humidity; up to 30% energy savings

CONTENTS

• Update on business evolution
• New products
• 9 months 2020 results

Highlights (9 months normalized)

The topline

	reported	normalized	reported	normalized	reported
(Eur million)	9M 2020	9M 2020	9M 2019	Q3 2020	Q3 2019
Revenues	1,473.2	1,484.6	1,303.7	580.9	458.2
change %	13.0%	13.9%		26.8%
organic ch. %		14.8%		29.8%

• In the nine months of 2020 the normalized revenues grew by 13.9%, soaring by 26.8% in the third quarter;
• All the regions accelerated in the latest months, confirming the positive expansion since the beginning of the years except for the MEIA area, which nonetheless was growing in the Q3;
• This year, growth has been boosted by strong recovery of household appliances in the food categories and by the continuation of the long-term trend in the coffee.

Revenues by region

Normalized figures - EUR million	9 months 2020	chg. %	organic chg. %	Q3-2020	chg. %	organic chg. %
South West Europe	614	20.3%	20.0%	240	35.9%	35.6%
North East Europe	407	13.0%	15.2%	169	26.4%	31.6%
EUROPE	1,021	17.3%	18.0%	409	31.8%	33.9%
MEIA (MiddleEast/India/Africa)	7 8	-16.2%	-14.9%	3 4	3.0%	7.7%
APA (Asia/Pacific/Americas)	385	13.4%	14.8%	138	20.0%	25.0%
TOTAL REVENUES	1,485	13 9%	8% 14	581	26 8%	29 8%

Organic performance in the 9 months (at normalized level):

• South-West Europe speeded up the pace of growth in the quarter, confirming a positive trend since the beginning of the year, sustained by the strong expansion of Germany and France; all the main markets have witnessed a positive tendency in Q3;
• North-East Europe was up 15.2%, supported by most of the countries growing at a double digit pace except for the Czech Republic, Slovakia and Hungary;
• APA region grew by a rate in the low teens, sustained by a strong trend in the main countries, namely US & Canada, China & HK, Japan, Australia & New Zealand;
• the MEIA region recorded an organic growth of 7.7% in the quarter, thus marking a turnaround compared to the previous quarters, which were negative and still affecting the results of the 9M.

Revenues by market (normalized )

Revenues by product (normalized )

Others 5.3%

Based on management accounts

Margins

	reported	normalized	reported	normalized	reported
(Eur million)	9M 2020	9M 2020	9M 2019	Q3 2020	Q3 2019
net ind. margin	721.6	733.0	615.9	289.7	216.4
% of revenues	49.0%	49.4%	47.2%	49.9%	47.2%
adjusted Ebitda	208.7	220.0	157.9	101.2	60.1
% of revenues	14.2%	14.8%	12.1%	17.4%	13.1%
Ebit	142.5	153.9	96.2	79.9	38.2
% of revenues	9.7%	10.4%	7.4%	13.8%	8.3%
adjusted Net Income	110.4	110.4	75.5	62.7	30.8
% of revenues	7.5%	7.4%	5.8%	10.8%	6.7%

• In the first nine months, the margins have been boosted by a strong expansion of volumes and by a positive price-mix; in addition, during this part of the year, margins benefitted from lower industrial costs;
• In the same period, the Group has further increased the A&P spending, to support the brands in the main markets; moreover, margins were partially impacted by higher duties due to the full impact of the past US tariff increases.

Nine months adjusted Ebitda bridge (normalized )

Balance sheet (reported)

	reported	reported		reported
EUR million	Sept. 30, 2020	Sept. 30, 2019	Change	Dec. 31, 2019	Change
Net Working Capital	222.1	387.8	-165.7	318.8	-96.7
Net Equity	1,265.3	1,103.5	161.8	1,190.5	74.9
Net debt / (Net cash)	451.5	101.5	350.0	277.8	173.7
N.W.C. / Revenues	9.8%	18.6%	-8 8 pp	15.2%	-5 4 pp

• The net financial position as at September 30 stood at 451.5 M€ (net bank position at 516.7 M€), a marked improvement over the last 9 months. The Group realized a strong cash generation, equal to 350 M€ in the 12 months, and 173.7 M€ in the first nine months of this year, despite slightly higher investments (58.7 M€ against 55.5 M€ in the nine months of 2019).
• As to the net working capital, the value decreased by 165.7 M€ in the 12 months, mainly due to a lower level of inventory and the increase in payables to suppliers.

The net cash flow in the nine months 2020 (reported )

A&P by quarters

Over the last quarters, the Group has increased the level of A&P in order to sustain the future growth, to take advantage of the positive momentum and to retain the leadership across the main markets.

2020 outlook

Massimo Garavaglia, Group C.E.O.:

"We have always been convinced of the strength of our brands and the potential of our products: beyond the contingent conditions of the market, we believe in the superiority of iconic products supported by investment campaigns that accompany their development in the medium term. Therefore we will continue to invest in innovation, marketing and communication and the current results confirm the correctness of our strategy. Looking at the shorter term, we still recognize many elements of uncertainty, which make reading the social and economic context still very difficult. With these results behind us, we revise our end-of-year guidance upwards and we are confident that we will be able to close 2020 with organic growth in revenues at a high single digit rate and an adjusted Ebitda increasing both in value and as a percentage of revenues. In the longer term, we remain focused on the execution of our strategy, according to the value creation model that has guided us so far.".

Organic revenues growing at high single-digit rate

Adjusted Ebitda improving in value and as a percentage of revenues

Disclaimer

This presentation might contain certain forward-looking statements that reflect the company's current views with respect to future events and financial and operational performance of the company and its subsidiaries.

Forward looking statements are based on De' Longhi's current expectations and projections about future events. The forward looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those contained in the forward looking statements. Potential risks and uncertainties include such factors as general economic conditions, foreign exchange fluctuations, competitive product and pricing pressures and regulatory developments, many of which are beyond the ability of De' Longhi to control or estimate. Consequently, De' Longhi S.p.A. cannot be held liable for potential material variance in any looking forward in this document.

Any forward-looking statement contained in this presentation speaks only as of the date of the document. Any reference to past performance or trends or activities of De' Longhi S.p.A. shall not be taken as a representation or indication that such performance, trends or activities will continue in the future. De' Longhi S.p.A. disclaims any obligation to provide any additional or updated information, whether as a result of a new information, future events or results or otherwise.

This presentation does not constitute a public offer under any applicable legislation or an offer to sell or solicitation of an offer to purchase or subscribe for securities or financial instruments or any advice or recommendation with respect to such securities or other financial instruments.

The manager responsible for preparing the company's financial reports declares, pursuant to paragraph 2 of Article 154-bis of Legislative Decree no. 58 of February 24 1988, that the accounting information contained in this presentation corresponds to the results documented in the books, accounting and other records of the company.

THANK YOU.

Contacts:

Investor Relations: Fabrizio Micheli / Samuele Chiodetto T: +39 0422 4131 investor.relations@delonghigroup.com