De'Longhi — Interim / Quarterly Report 2022

Nov 10, 2022

DēLonghi Group

KENWOOD

BRAUN nutribullet. -Ariete

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.

In this presentation:

• "Adjusted" stands for before non recurring items and notional cost of the stock option plans
• "At constant exchange rates" means excluding the effects of exchange rates' variations and of hedging derivatives
• "ForEx" or "FX" stand for Foreign Exchange Rates;
• "M" stands for million and "bn" stands for billion;
• Q3 stands for third quarter (July 1st September 30th);
• 9M stands for 9 months (January 1 st – September 30th);
• "Reported" stands for official data including the consolidation of Eversys since April 1st , 2021 (following the acquisition finalized last year);
• the comparative data as of September 30, 2021 have been restated in accordance with IFRS 3, as a result of the definitive accounting of the business combination relating to Capital Brands and Eversys.

$Q3 - 9M 2022$ RESULTS

$• •$

$CTD$

HEADWINDS AND ACTIONS

EXTERNAL HEADWINDS

ACTIONS PUT IN PLACE

DēLonghi Group

KENWOOD BRAUN nutribullet. - Ariete

HEADWINDS AND ACTIONS /1

COST INFLATION

PRICE INCREASES

A STRATEGY OF SELECTIVE PRICE INCREASES TO MITIGATE THE IMPACT OF COST INFLATION AND PROTECT GROSS MARGIN

TOTAL PRICE EFFECT: 2021 CA. 45M $\in$ 9M-22 CA. $48M \in$

DēLonghi Group

KENWOOD

HEADWINDS AND ACTIONS /2

EXTRA COSTS

INVENTORY REDUCTION

EXTRAORDINARY MEASURES TO REDUCE THE LEVEL OF INVENTORY...

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... AND TO ABATE ADDITIONAL WAREHOUSING COSTS AND RELATED PRODUCTION INEFFICIENCIES

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HEADWINDS AND ACTIONS /3

DEMAND SOFTENING

HIGHER A&P

CONFIRMING THE INVESTMENTS PLANS ON A&P EXPENDITURES

INCREASED EFFORTS ON MEDIA AND COMMUNICATION, SPREADING THE COFFEE GLOBAL CAMPAIGN ACROSS ALL MARKETS

DēLonghi Group

BRAUN nutribullet. -Ariete KENWOOD

• 9M-2022 revenues down by 1%, including a positive currency effect of 4.4%;
• the expansion of extra-European geographies all up in the 9 months (Asia Pacific, North America and Meia) - helped to offset the softening trend of European markets (down high-single-digit);
• all product segments were in positive territory both in Q3 and 9M, with the only exception of Cooking and Food Preparation, which was suffering from weakening demand. B2C Coffee segment was up mid single digit in Q3 and 9M.

EUR million	9M - 2022	var. %	var. % at FX constant	Q3 - 2022	var. %	var. % at FX constant
South-West Europe	761 1	6% -7	-8 4%	226 9	-12 6%	-13 7%
North-East Europe	483 4	-11 6%	-13 5%	171 3	-6 8%	-9 5%
EUROPE	1 244 5 ,	-9 2%	-10 4%	398 2	-10 2%	-11 9%
America	418 5	9 4%	-1 6%	129 3	9% -7	-21 2%
MEIA	154 7	6 6%	-5 4%	48 9	18 2%	1 2%
Asia-Pacific	310 9	23 7%	16 3%	107 4	16 2%	8 9%
TOTAL REVENUES	2 128 7 ,	-1 0%	-5 4%	683 8	-4 7%	-10 3%

In the third quarter:

• South-West Europe in showed similar dynamics to the previous quarter, with a moderate weakness of continental Europe, except for Italy and the Iberian region;
• in North-East Europe the negative trend continued, albeit improving, affected by the direct effects of the Russian-Ukrainian conflict;
• MEIA region saw a positive quarter, mostly driven by the US Dollar appreciation (net of which, however, sales were still in positive territory);
• sales in the North American area were negatively impacted by early sales of portable air conditioners back in the previous quarters, while, on the contrary, there was a double-digit growth in the coffee segment, supported by a strong acceleration of fullauto coffee machines;
• finally, the Asia-Pacific region confirmed the double-digit growth already highlighted in the first half, sustained in particular in Q3 by the significant expansion of Greater China.

	9M	9M	Q3	Q3
	2022	2021	2022	2021
	-	-	-	-
ind . margin net	1 015 5 ,	1 079 7 ,	319 4	358 3
%	47	50	46	49
of	7%	2%	7%	9%
revenues
adjusted Ebitda	212 0	357 0	62 9	105 6
of	10	16	9	14
%	0%	6%	2%	7%
revenues
Ebitda	217	344	67	103
	8	9	2	9
%	10	16	9	14
of	2%	0%	8%	5%
revenues
Ebit	141	277	40	79
	2	2	9	7
%	6	12	6	11
of	6%	9%	0%	1%
revenues
Net Income (pertaining to the Group)	99 4	232 3	27 7	60 5
%	4	10	4	8
of	7%	8%	1%	4%
revenues

• The net industrial margin percentage to sales was down due to production inefficiencies and to the increase in product costs (raw materials, logistics, transformation costs) not fully offset by the price increases (equal to 48M€ ytd);
• the adjusted Ebitda drop to 10% of revenues (from 16.6% in 2021) witnesses the impact of COGS inflation, lower volumes and extra costs deriving from handling the surplus stock.

EUR million	30 9 2022	30 9 2021	change (12 months)	31 12 2021	change (9 months)
operating NWC	472 7	308 1	164 7	199 7	273 0
Net Equity	1 648 0 ,	1 462 8 ,	185 2	1 570 6 ,	77 4
Financial Position Net	28 8	216 1	-187 3	425 1	-396 3
/ NWC op. revenues	14 8%	10 2%	4 6%	6 2%	8 6%

• Net financial position as at 30.9.2022 amounted to 29 M€, decreasing from 2021 year end, due to higher investments and negative working capital contribution;
• the Free Cash Flow before dividends and acquisitions was negative by 272 M€ in the 9M, due to:
• a high level of Capex (126 M€), i.e. 33 M€ higher than the previous year;
• negative working capital contribution (-366 M€), i.e. ca. 279 M€ worse than 9m of last year, mostly due to increased inventories (-80 M€) and a negative flow from the trade receivablespayables balance (-175) M€, resulting mainly from a reduced procurement activity.

Q3-9M 2022 RESULTS FY 2022 GUIDANCE

In the words of Fabio de' Longhi, CEO:

"The third quarter was in line with our guidance and with market expectations for the full year."

In a context of great uncertainty of the macroeconomic scenario, we have seen a demand slowdown and a consequent inventory excess that we are successfully committed to gradually bring back to normal levels, thus relieving next year from the related costs and inefficiencies. Furthermore, we have largely offset the production cost inflation with a campaign of price increases made possible by the strength of our brands and the trust granted us by consumers. Finally, from a long-term perspective, we have given continuity to the communication and marketing investments foreseen by the three-year plan and which are a solid basis for the growth in the coming years.

The indications for our core segments remain unchanged: on one hand, the secular trend in coffee, which is confirmed year after year, with potential growth still largely unexpressed; on the other hand, a deep-rooted presence in leadership positions in the nutrition and cooking world, supported by the growing role of a sustainable and healthy diet.

For the current year, we confirm our current guidance of revenues down mid-single-digit and an adjusted Ebitda in the range of $\epsilon$ 320-340 million".

Contacts:

Investor Relations:

Fabrizio Micheli, Samuele Chiodetto $T: +3904224131$ e-mail: investor.relations@delonghigroup.com

Media relations:

Mattia Rosati $T: +3904224131$ e-mail: media.relations@delonghigroup.com

On the web:

www.delonghigroup.com

DēLonghi Group