De'Longhi

Investor Presentation • Nov 7, 2019

9 months 2019 results

Foreword

The figures of the year 2019 are reported in accordance with the new IFRS 16 accounting standard, introduced since January 1st, 2019. For comparative purposes, in some cases, the figures herein presented are "normalized", i.e. reported on a comparable basis with those of the previous year, hence excluding the effects deriving from the adoption of the aforementioned IFRS 16.

Definitions & assumptions

In this presentation:

• • Adjusted stands for "before non recurring items and inputed costs of the stock option plan"
• • Continuing Operations identify the consolidated perimeter excluding NPE s.r.l.;
• • ForEx or FX stand for Foreign Exchange Rates;
• • "M" stands for million and "bn" stands for billion.
• • Normalized stands for excluding the application of IFRS-16 accounting standard;
• • Organic stands for net of Foreign Exchange Rates and hedging derivatives effects;
• • Q3 stands for third quarter (June 30 – September 30), 9M stands for first nine months (January 1st – September 30), FY stands for full year (January 1st – December 31);
• • Reported stands for official data including the application of IFRS-16 accounting standard.

CONTENTS

• • 9 months 2019 results
• • Appendix

HIGHLIGHTS

In Q3 2019:

• Revenues up 2.8% to € 458.2 M (+ 1.6% organic), driven by the coffee category, especially full-auto and pump espresso machines;
• Adjusted EBITDA up to € 60,1 M (equal to 13.1% of revenues) and to € 54.9 M normalized (equal to 12% of revenues, slightly improving from Q3-2018);
• Net Income up to € 29 M (€ 29.1 M normalized);

In 9M 2019:

• Revenues stable at +0.3%, due to discontinuities occurred in the first half, that have limited the expansion;
• Adjusted EBITDA down to € 157.9 M (€ 143.1 M normalized), drained by the incremental costs arose in the first half year;
• Net Income equal to € 71.8 M (€ 72.4 normalized);
• positive Net Financial Position improving in the six months to € 177.5 M on normalized values; after applying the IFRS-16 standard (bringing in a negative accounting effect of € 76 M), the NFP is reduced to € 101.5 M.

THE TOPLINE

	9 t h m o n s 2 0 1 9	9 t h m o n s 2 0 1 8	3 d t r q u a r e r 2 0 1 9	3 d t r q u a r e r 2 0 1 8
R e e n e s v u	1 3 0 3 7 ,	1 3 0 0 3 ,	4 5 8 2	4 4 6 5
h % c a n g e i h % o r g a n c c	0 3 % 1. 1 % -		2 8 % 1. 6 %

• In the 9 months, revenues exited the negative territory, thanks to the positive growth trend delivered by the last two quarters;
• the 3rd quarter grew +2,8%, driven mainly by the coffee category (including also a double-digit performance of capsule systems) and the home care;
• the currency effect on revenues was equal to € 17.6 M in the 9 months and € 5.5 M in the Q3.

REVENUES BY MARKET & PRODUCT

Q3 MAIN ORGANIC UPS & DOWNS

G R O WI N G D O U BL E D I G IT	FR AN CE PO LA ND CZ EC K R .+ S LO V+ HU NG , , , SW ITZ ER LA ND
G O G S GL G R WI N IN E D I IT	U K, J AP AN RU S S IA C I S, U S A & C AN AD A + ,
D O WN	SA UD I AR AB IA, FIN LA ND +S CA ND INA VIA BE NE LU X, , GR R C EA TE HIN A

Q3 MAIN ORGANIC UPS & DOWNS

G O G O G R WI N D U BL E D I IT	FU LL -A U T O, PU MP NE S PR E S S O, FL O O R- C AR E. ,
G O G S GL G R WI N IN E D I IT	IR O NIN G, P O RT AB LE AI R C O ND
D O WN	S, O O O HE AT ER F D P RE PA RA TI N

REVENUES BY PRODUCT: COFFEE MAKERS

in Q3:

• o Coffee has speeded things up in the last 3 months;
• o full auto and pump machines up double digits;
• o capsule systems up thanks to recovery of Nespresso sales, while still negative figures for Dolce Gusto products.

Based on management accounts

REVENUES BY PRODUCT: FOOD PREPARATION

in Q3:

• o Food Preparation business remains weak, but at a slower pace;
• o the Kitchen Machines were slightly down in organic terms.

Based on management accounts

REVENUES BY PRODUCT: COMFORT & HOME CARE

In Q3:

• o Home care products in positive territory, sustained by floor care up double digit;
• o negative performance for heaters, due to the slow start of the winter season.

Based on management accounts

REVENUES BY REGION

l l E U R i i m o n	h 9 t m o n s 2 0 1 9	h % c g.	i o r g a n c h % c g.	d 3 Q 2 0 1 9 r	h % c g.	i o r g a n c h % c g.
h N E E t t o r a s u r o p e	3 6 0. 0	% 1 0. 0	% 9. 0	1 3 4. 0	% 9. 0	% 6. 9
h S W E t t o u e s u r o p e	5 1 0. 5	% 0. 5 -	% 0. 7 -	1 7 6. 4	% 6. 2	% 6. 0
O E U R P E	8 7 0. 6	% 3. 6	% 3. 1	3 1 0. 4	% 7. 4	% 6. 4
( i i f i i ) A P A A / P / A s a a c c m e r c a s	3 3 9. 5	% 5. 1 -	8 % 7. -	2 1 1 5.	3. 6 % -	8 % 4. -
f ( i d d l d i i ) M E I A M E / I / A t e a s n a r c a	9 3. 6	8. 2 % -	1 2. 4 % -	3 2. 6	1 2. 0 % -	1 5. 9 % -
O S T T A L R E V E N U E	3 0 3. 1, 7	0. 3 %	% 1. 1 -	8. 2 4 5	2. 8 %	6 % 1.

• South-West Europe: in the quarter the region increased evenly by mid-single digit, with an outstanding growth in France and Iberian peninsula;
• North-East Europe: positive progress in the last three months, sustained primarily by the evolution of full-auto coffee makers. Recovery is the UK (+7% !).
• APA: positive expansion in Japan and US + Canada, while the negative development of the capsule machines and the change in the distribution model weighted on Greater China's performance;
• MEIA: the performance of the area is still negative, affected by the weakness of the main markets, namely Saudi Arabia and UAE.

MARGINS: THE 3RD QUARTER

	d 9 h t r 3 m o n s t q u a r e r 2 0 1 9 2 0 1 9		9 m o	h t n s	d 3 t r q u a r e r
			2 0 1 9 l ize d "n " or m a	2 0 1 8	2 0 1 9 l ize d "n " or m a	2 0 1 8
d. i i t n e n m a r g n	6 1 9 5.	2 1 6. 4	6 1 9 5.	6 1 6 7.	2 1 6. 4	2 1 0. 5
f % o r e v e n u e s	2 % 4 7.	2 % 4 7.	2 % 4 7.	% 4 7. 5	2 % 4 7.	2 % 4 7.
d j d b i d E t t a u s e a	1 9 5 7.	6 0. 1	1 4 3. 1	1 6 2. 2	4. 9 5	3. 1 5
f % o r e v e n u e s	2. % 1 1	3. % 1 1	0 % 1 1.	2. % 1 5	2. 0 % 1	9 % 1 1.
b i d E t a	1 5 3. 3	5 7. 9	1 3 8. 5	1 1 5 7.	5 2. 7	2. 1 5
f % o r e v e n u e s	1 1. 8 %	1 2. 6 %	1 0. 6 %	1 2. 1 %	1 1. 5 %	1 1. 7 %
b i E t	9 6. 2	3 8. 2	9 5. 4	1 1 2. 9	3 7. 9	3 5. 0
f % o r e e n e s v u	% 7. 4	% 8. 3	% 7. 3	% 8. 7	% 8. 3	% 7. 9
N I t e n c o m e	7 1. 8	2 9. 0	7 2. 4	8 2. 0	2 9. 1	2 6. 0
f % o r e e n e s v u	% 5. 5	% 6. 3	% 5. 6	% 6. 3	% 6. 4	% 5. 8

• Flattish performance of the adjusted Ebitda margins (normalized) in the Q3, thanks to a positive price-mix effect (5.6 M€) and volume effect (5.7 M€), which together offset the additional costs;
• The A&P spending was increased by 4 M€ to sustain the sales in the short term and to improve the brand awareness in the long run;
• Net income (normalized) increased by 11.9%, with a tax rate of 19.5% in the Q3.

Q3 ADJUSTED EBITDA BRIDGE (NORMALIZED)

PRICE-MIX EFFECT BY QUARTER

PRICE – MIX EFFECT 2019 (EUR million)

NET FINANCIAL POSITION AND WORKING CAPITAL

	d t r e p o r e S t. 3 0, e p 2 0 1 9	l iz d n o r m a e S t. 3 0, e p 2 0 1 9	S t. 3 0, e p 2 0 1 8	l iz d n o r m a e C h 1 2 a n g e h t m o n s	D 3 1, e c. 2 0 1 8	l iz d n o r m a e C h 9 a n g e h t m o n s
k l i C i N W t t e o r n g a p a	3 8 8 7.	3 8 6 7.	3 8 6 6	1. 0	3 2 2 5	6 5. 1
i N E t t e q u y	1, 1 0 3. 5	1, 1 0 4 1	9 5 8 5	1 4 5. 7	1, 0 6 5 9	3 8. 2
d b ( h ) / N N t t t a e e e c s	1 0 1. 5 -	1 7 7. 5 -	4 5 5 -	1 2 3. 0 -	2 2 8 1 -	5 0. 6
N W C / R e v e n u e s	% 1 8. 6	% 1 8. 6	% 1 9 0	0. 4 % -	% 1 5 5	3. 1 0 %

• Positive cash flow generation (normalized) that stood at 123 M€ over the last 12 months, sustained by the operating cash flow (normalized) at 173.3 M€.
• The net financial position as at Sept. 30th was positive by 101.5 million €, including a negative effect of €76 million from adopting the new IFRS 16 accounting standard;
• Net working capital (normalized) in line versus last year in value terms, thanks to stabilization of the inventory level, and even improving as a percentage of revenues (from 19% to 18.6%).

THE NET CASH FLOW IN THE 9 MONTHS

THE NET CASH FLOW IN THE 12 MONTHS

CONTENTS

• • 9 months 2019 results
• • Appendix

"CO ING OP ION S" NT INU ER AT							"CO ING OP ION S" NT INU ER AT					NO RM AL IZE D D AT A
( illio n) Eur o m	2 0 1 7						2 0 1 8						2 0 1 9
	Q 1- 1 7	Q 2- 1 7	H 1	Q 3- 1 7	Q 4- 1 7	L Y F U L E A R	Q 1- 1 8	Q 2- 1 8	H 1	Q 3- 1 8	Q 4- 1 8	L Y F U L E A R	Q 1- 1 9	Q 2- 1 9	H 1	Q 3- 1 9
Re ve nu es	3 8 1 5.	4 3 1. 6	8 1 6. 7	4 2 1. 7	3 4. 4 7	1, 9 2. 8 7	4 0 2. 6	4 2. 1 5	8 4. 5 7	4 4 6 5.	8. 1 7 7	2, 0 8. 4 7	3 6. 4 7	4 6 9. 1	8 4 5. 5	4 8. 2 5
ha % c ng e y -o- y	6. 3 %	4. 2 %	5. 1 %	8. 7 %	7.7 %	6. 8 %	4.5 %	4.7 %	4. 6 %	5. 7 %	5. 9 %	5. 4 %	-6. 5 %	3. 8 %	-1. 1 %	2. 8 %
t in du tr ia l m in ne s arg	1 9 2. 3	2 0 8. 8	4 0 1. 1	2 0 6. 6	3 5 9. 6	9 6 7. 3	1 9 8. 0	2 0 9. 0	4 0 7. 1	2 1 0. 5	3 7 3. 1	9 9 0. 7	1 8 1. 7	2 1 7. 7	3 9 9. 5	2 1 6. 4
%	4 9. 9 %	4 8. 4 %	4 9. 1 %	4 9. 0 %	4 9. 0 %	4 9. 0 %	4 9. 2 %	4 6. 2 %	47 6 %	47 2 %	4 8. 0 %	47 .7 %	4 8. 3 %	4 6. 4 %	47 2 %	47 2 %
d j te d E B I T D A a us	5 2. 5	5 4. 0	1 0 6. 5	5 3. 0	1 5 0. 0	3 0 9. 5	5 3. 4	5 5. 7	1 0 9. 1	5 3. 1	1 5 0. 7	3 1 2. 8	3 1. 8	5 6. 4	8 8. 2	5 4. 9
%	1 3. 6 %	1 2.5 %	1 3. 0 %	1 2. 6 %	2 0. 4 %	15 .7 %	1 3. 3 %	1 2. 3 %	1 2. 8 %	1 1. 9 %	1 9. 4 %	15 1 %	8. 4 %	1 2. 0 %	1 0. 4 %	1 2. 0 %
E B I T D A	1. 6 5	3. 0 5	1 0 4. 7	0. 5 5	1 4 8. 5	3 0 3. 7	2. 4 5	2. 6 5	1 0 0 5.	2. 1 5	1 4 4 7.	3 0 4. 5	3 0. 4	4 5 5.	8 8 5.	2. 5 7
%	1 3. 4 %	1 2. 3 %	1 2. 8 %	1 2. 0 %	2 0. 2 %	15 4 %	1 3. 0 %	1 1. 6 %	1 2. 3 %	1 1.7 %	1 8. 9 %	1 4.7 %	8. 1 %	1 1. 8 %	1 0. 1 %	1 1.5 %
E B I T	3 8. 9	3 8. 9	7 7. 9	3 5. 3	1 3 2. 2	2 4 5. 4	3 9. 3	3 8. 6	7 7. 9	3 5. 0	1 3 0. 0	2 4 2. 9	1 6. 4	4 1. 1	5 7. 5	3 7. 9
%	1 0. 1 %	9. 0 %	9. 5 %	8. 4 %	1 8. 0 %	1 2. 4 %	9. 7 %	8. 5 %	9. 1 %	7. 9 %	1 6. 7 %	1 1.7 %	4. 3 %	8. 8 %	6. 8 %	8. 3 %
Pro f i t be for Ta e xe s	3 2. 9	4 3. 7	7 6. 6	3 2. 9	1 1 9. 8	2 2 9. 2	3 2. 2	3 6. 6	6 8. 8	3 0. 0	1 2 5. 0	2 2 3. 9	1 1. 9	3 8. 3	5 0. 3	3 6. 2
Ta xe s	( 7. 4 )	( 1 1. 7 )	( 1 9. 1 )	0. 4	( 3 0. 8 )	( 4 9. 5 )	( 5. 8 )	( 7. 1 )	( 1 2. 9 )	( 4. 0 )	( 2 3. 1 )	( 4 0. 0 )	( 0. 2 )	( 6. 7 )	( 7. 0 )	( 7. 1 )
f / ( ) G. Pro i t Lo ta in ing to t he ss p er	2 5. 5	3 2. 0	5 7. 5	3 3. 3	8 9. 0	1 7 9. 8	2 6. 4	2 9. 5	5 5. 9	2 6. 0	1 0 1. 9	1 8 3. 9	1 1. 7	3 1. 6	4 3. 3	2 9. 1
%	6. 6 %	4 % 7.	0 % 7.	9 % 7.	1 2. 1 %	9. 1 %	6. 6 %	6. % 5	6. % 5	8 % 5.	1 3. 1 %	8. 8 %	3. 1 %	6. % 7	1 % 5.	6. 4 %

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