De'Longhi — Investor Presentation 2021

Mar 11, 2021

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 plans"
• 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;
• Q4 stands for forth quarter (September 30th December 31st);
• FY stands for 12 months (January 1st December 31st);
• Reported stands for official data including the application of IFRS-16 accounting standard and the change of treatment of the financial discounts; moreover, at year end the balance sheet includes the consolidation of Capital Brands Holdings Inc. and its subsidiaries, following the acquisition finalized on December 29th, 2020.

• Full year 2020 results

HIGHLIGHTS (12 months normalized)

THE TOPLINE FY 2020 RESULTS

	reported	normalized		normalized
(Eur million)	FY 2020	FY 2020	FY 2019	Q4 2020	Q4 2019
Revenues	2,351.3	2,368.1	2,106.1	883.4	802.4
change %	11.9%	12.4%		10.1%
organic ch. %	13.8%	14.3%		13.6%

• In the twelve months of 2020 the normalized revenues grew by 12.4%, expanding by 10.1% in the fourth quarter;
• All the regions were in positive territory in organic terms in the last quarter, confirming the positive developments seen in 2020 in the main geographies;
• The expansion was supported by the continuity in the trends already highlighted in the first months of the year, by the increased attention to the theme of the "home experience" and by the investments in communication and innovation planned over the past quarters.

REVENUES BY REGION

Normalized figures - EUR million	2020 FY	chg %	organic % chg	Q4-2020	chg %	organic % chg
South West Europe	967	4% 17	2% 17	353	7% 12	5% 12
North East Europe	677	12 6%	16 7%	271	12 0%	19 0%
EUROPE	1 644 ,	15 4%	17 0%	623	12 4%	15 3%
(MiddleEast/India/Africa) MEIA	123	-12 0%	-9 4%	44	-3 6%	2 0%
(Asia/Pacific/Americas) APA	601	0% 11	5% 13	216	6 9%	3% 11
TOTAL REVENUES	368 2 ,	4% 12	3% 14	883	1% 10	6% 13

• South-West Europe grew in the 12 months driven by a double digit performance of Germany, France, Switzerland and Spain and Portugal;
• The North-East Europe area witnessed a solid trend at a double digit pace both in the quarter and in the twelve months, supported by the important development in both periods of UK, Russia-Ukraine-CIS, Scandinavia-Finland;
• the APA area (Asia-Pacific-Americas) posted a double-digit expansion in organic terms in both periods analyzed; in the twelve months it is worth noting a growth in the twenties for China and Hong Kong, Australia and New Zealand, while Japan and North America recorded a high single digits performance in the same period;
• the MEIA area was in negative territory in the year, although in the last two quarters it showed a partial recovery in organic terms.

REVENUES BY MARKET (normalized)

REVENUES BY PRODUCT (normalized)

REVENUES BY PRODUCT: COFFEE MAKERS (normalized)

The coffee sector (52% of revenues) achieved doubledigit growth in organic terms both in the 12 months and in the 4th quarter:

• o full-auto machines, growing in the twenties;
• o manual machines growing in the high-teens;
• o the capsule systems also growing, but at lower pace.

REVENUES BY PRODUCT: FOOD PREPARATION (normalized)

The cooking and food preparation segment delivered normalized high single digit growth in both periods analyzed:

• o outstanding performance of the Kitchen machines, growing in the twenties;
• o positive contribution from Food processors and Toasters, accelerating in the last months.

REVENUES BY PRODUCT: COMFORT & HOME CARE (normalized)

The segments closed the 12 months in positive territory:

• o the comfort segment achieved double digit growth rate, thanks to the brilliant performance of air conditioning and products related to air treatment;
• o the home care business unit achieved high single digit growth in the year, boosted by the rebound of vacuum cleaner products in the 4 th quarter.

MARGINS

	reported	normalized		normalized
(Eur	FY	FY	FY	Q4	Q4
million)	2020	2020	2019	2020	2019
ind . margin net	1 157 1 ,	1 173 9 ,	995 2	440 8	379 3
of	49	49	47	49	47
%	2%	6%	3%	9%	3%
revenues
adjusted Ebitda	366 5	383 3	300 3	163 3	142 4
%	15	16	14	18	17
of	6%	2%	3%	5%	7%
revenues
Ebit	262	278	215	124	119
	0	8	9	9	8
%	11	11	10	14	14
of	1%	8%	3%	1%	9%
revenues
adjusted	218	218	165	107	90
Net	0	0	7	7	2
Income
%	9	9	7	12	11
of	3%	2%	9%	2%	3%
revenues

• In 2020 the margins were boosted by a strong expansion of volumes and by a positive price-mix, leading to the expansion of the adjusted Ebitda in each quarter of the year.
• the robust improvement in the margins was achieved despite higher investments in marketing and communication, which reached an incidence of 12.4% of sales (compared to 11.7% in 2019).

FY 2020 ADJUSTED EBITDA BRIDGE (normalized)

BALANCE SHEET

EUR million	reported Dec 31 2020 ,	reported Dec 31 2019 ,	Change	before CB acquisition Dec 31 2020 ,	Change
Net Working Capital	96 2	318 8	-222 6	91 3	-227 5
Net Equity	1 267 4 ,	1 190 5 ,	76 9	1 267 4 ,	76 9
/ Net debt (Net cash)	232 0	277 8	-45 8	561 3	283 5
/ C N W Revenues	4 1%	15 2%	-11 1 pp	3 9%	-11 3 pp

• The reported net financial position stood at € 232 M or € 561.3 M before the acquisition of Capital Brands (amounting to € 329.3 M). Cash generation, excluding the acquisition and the payment of dividends of € 80.8 M, amounted to € 364.3 M.
• investments of the year amounted to € 89.5 M, of which € 8.8 M related to investments in leased assets.
• net working capital was significantly improved, thanks to a positive performance of the aggregate of trade receivables and payables and inventories developing under control, in line with the strong trend of the business.

THE NET CASH FLOW OF THE YEAR (reported)

2021 OUTLOOK AND GUIDANCE

Massimo Garavaglia, Group C.E.O.:

"From the point of view of sales, the start of the year was extraordinarily strong, at a rate of growth, on a likefor-like basis, foreseen for the first quarter at around 50%. This evidence leads us to estimate the organic growth of revenues for 2021, also including the acquired Capital Brands, in the range 22% - 26% (i.e. in the area 12% - 15% on a like-for-like basis).This important growth will allow us to continue to reinvest a portion of the operating margin in our support plans for product innovation, brand communication and strenghtening of the digital strategy aimed at a sustainable growth, while allowing us to achieve an adjusted Ebitda for the new perimeter substantially in line with 2020 as a percentage of revenues "

FY 2021 guidance

Organic revenues growing between 22% and 26% (including Capital Brands) Adjusted Ebitda substantially in line with 2020 as a percentage of revenues (including Capital Brands)

APPENDIX FY 2020 RESULTS

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.