De'Longhi — Investor Presentation 2023

Jul 28, 2023

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. Finally, it should be noted that the audit on Consolidated Half Year Financial Statements is still in progress.

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;
• Q2 stands for second quarter (April 1st June 30th);
• H1 stands for first half year (January 1 st – June 30th);
• "NWC" stands for Net Working Capital;
• "Capex" stands for capital expenditures, i.e. investments in fixed assets.

THE 6 MONTHS HIGHLIGHTS

• H1-23 revenues were down by 10.6%, but the Q2 was up excluding the impact from the discontinuity in the US market.
• The start of the year was impacted by some already anticipated factors:
  • a challenging comparison with the extraordinary growth in the first months of the previous 2 years;
  • a partial de-stocking effect from retailers;
  • the Group's strategic decision to exit the portable air conditioning market in the US, which caused a gap of € 56 million in H1.

EUR million	H1 - 2023	var. %	var. % at FX constant	Q2 - 2023	var. %	var. % at FX constant
South	462	-13	-13	246	-1	-1
-West	6	4%	9%	8	2%	7%
Europe
North	321	3	4	164	15	19
-East	6	0%	7%	3	5%	3%
Europe
EUROPE	784	-7	-7	411	4	6
	2	3%	1%	1	9%	0%
America	225	9%	5%	129	-16	-15
	9	-21	-22	9	9%	4%
MEIA	85	-18	-19	41	-10	3%
	8	9%	0%	6	5%	-7
Asia-Pacific	195	-4	0	106	-7	-2
	2	1%	3%	3	4%	0%
TOTAL REVENUES	1 291 2 ,	-10 6%	-10 0%	688 8	-2 9%	-0 9%

In the quarter:

• South-West Europe showed a turnover almost unchanged in Q2 vs last year, thanks to a strong recovery of the market in France and Austria, while Italy and Germany are still in negative territory;
• sales of North-East Europe were up double digit, benefitting from an almost homogeneous recovery in the area, characterized by a significant acceleration of coffee combined with a substantial stabilization of the cooking and food preparation sector;
• MEIA region saw its turnover fall mainly due to the macroeconomic context and the weakness of food preparation;
• in America, sales were affected by the discontinuity relating to the exit from mobile air conditioning business, which caused a gap of € 33 million in the Q2, but improving the overall mix; net of this effect, sales were up 5.5% in the quarter;
• finally, the Asia Pacific region suffered from the negative performance of Australia and New Zealand, down against an excellent 2022, but showing a strong growth of other major markets of Greater China, Japan and South Korea.

REVENUES BY MARKET (6 MONTHS)

Main Ups & Downs (at constant FX)

REVENUES BY PRODUCT LINE (6 MONTHS)

Main Ups & Downs (at constant FX)

(Eur million)	H1-23	H1-22	Change %	Q2-23	Q2-2022	Change %
ind . margin net	640 2	696 2	-8 0%	335 8	320 6	4 7%
of % revenues	49 6%	48 2%		48 8%	45 2%
adjusted Ebitda	160 1	149 1	7 4%	85 8	49 0	75 0%
% of revenues	12 4%	10 3%		12 5%	6 9%
Ebitda	159 0	150 5	5 7%	83 5	57 1	46 4%
% of revenues	12 3%	10 4%		12 1%	8 0%
Ebit	108 1	100 3	8% 7	58 0	31 2	85 8%
% of revenues	8 4%	6 9%		8 4%	4 4%
Net Income (pertaining to the Group)	82 7	71 7	15 3%	44 0	0 21	108 8%
of % revenues	6 4%	5 0%		6 4%	3 0%

In the quarter:

• net industrial margin was up to 48.8% of sales from 45.2% in 2022; positive contributions from the price-mix (20 M€ ) and logistic costs;
• adjusted Ebitda strongly improving to 12.5% of sales from 6.9% in 2022, in line with pre-pandemic years. Positive contributions from savings on A&P (-8.8 M€ in Q2 and -24.5 M€ in the 6 months) and from partial recovery of some factory inefficiencies of last year (when production levels were decreased in order to reduce inventories).

BRIDGE TO ADJUSTED EBITDA (Q2 2023)

EUR million	30 6 2023	30 6 2022	change (12 months)	31 12 2022	change (6 months)
operating NWC	206 6	414 6	-208 1	288 8	82 2 -
Equity Net	1 639 2 ,	1 591 5 ,	47 7	1 663 4 ,	-24 2
Net Financial Position	311 7	55 4	256 3	298 8	12 9
Bank Position Net	403 8	132 7	271 1	389 5	14 4
/ NWC Revenues oper.	6 9%	12 8%	-5 9%	9 1%	-2 3%

• The Group closed the first half of 2023 with a positive Net Financial Position at € 311.7 million, strongly improving vs. 2022 (€ 55.4 million);
• Free Cash Flow before dividends and M&A was equal to 66.5 M€ in the quarter and € 328,3 M€ in the 12 months;
• In details, In terms of operating working capital (6.9% of 12-month rolling revenues), the negative change in inventories was more than counterbalanced by the positive cash generation of trade receivables and payables' management. It should also be noted that level of inventories in June 2023 (€ 660.5 million) was much lower than the peak reached in June last year (€ 941.5 million).

NET CASH FLOW (12 MONTHS)

DēLonghi Group

(DeLonghi) KENWOOD BRAUN nutribullet. Ariete

KEY TAKEAWAYS

	The H1-23 was characterized by an unfavourable and complex
	geopolitical and macroeconomic backdrop, in continuity with
the scenario encountered in the second half of '22.

The Group closed the H1-23 with a positive Net Financial Position improved to € 311,7 M, thanks to an efficient working capital management and a robust cash generation from operations, both in the Q2 and 12 months.

The Group was able to achieve a profitability almost aligned with the first quarters of the pre-pandemic years ('19 and '18). Moreover, in Q2 production costs turned to be a tailwind.

The start of the year was impacted by : 1) a challenging comparison with the two previous years, 2) a more cautious approach from some distributors, 3) the Group's strategic decision to exit the portable air conditioning market in the USA (impacting by ca. 56 M€ in the 6 months).

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DeLonghi Group (DeLonghi) KENWOOD BRAUN nutribullet. Hriete

In the words of the C.E.O., Fabio de' Longhi:

Contacts:

Investor Relations:

Fabrizio Micheli, Samuele Chiodetto T: +39 0422 4131 e-mail: investor.relations@delonghigroup.com

Media relations:

T: +39 0422 4131 e-mail: media.relations@delonghigroup.com

On the web: www.delonghigroup.com