Elica — Investor Presentation 2021

Oct 27, 2021

9M 2021 ANALYSTS PRESENTATION

WEDNESDAY OCT 27TH, 2021

AGENDA

INDUSTRY TREND

4 6 M&A FOLLOW-UP: 5 INDIA & EMC MOTORS

EXECUTIVE SUMMARY & Q3 2021 HIGHLIGHTS

3

EXECUTIVE SUMMARY & Q3 2021 HIGHLIGHTS

▪

• (*) ▪ Industry : Market slightly positive vs Q3 2020
• Revenues: Growing above Market with +10,2% vs Q3 2020 (+5,2% Organic), +17% vs 2019 (+12% Organic)
• Margins: Delivering a robust Operating Margin despite persisting Negative Raw Materials Scenario:
  • 14,7 M€ Adj. EBITDA (10,7% on NS; +50bps vs Q3 '20)
  • 8,2 M€ Adj. EBIT (6,0% on NS; +50bps vs Q3 '20)
• Successful Closing of Elica India transaction with Whirlpool
• NFP@32M€ (67M€ Q3 2020), delivering a leverage of 0.6

INDUSTRY TREND

INDUSTRY TREND & MKT SHARE EVOLUTION

5

9M 2021 – COOKER HOODS INDUSTRY UNIT SHIPMENTS

Volume Data _ Change% vs . Y-1

	Q1'21	Q2'21 H1 '20	Q3'21 H1 '20	9M'21 H1 '20	Key evidence
Western Europe	3.9%	42.2%	(3.8%)	11.9%	GENERAL REMARKS
Eastern Europe (incl. CIS)	8.7%	20.5%	4.2%	11.3%	constraints and rising inflation could limit the pace of recovery.
Europe	6.0%	31.8%	(0.7%)	11.7%	EMEA
EMEA	5.3%	28.6%	(0.6%)	10.6%	pandemic levels after a strong rebound in 1st Half.
North America	2.0%	50,0%	10.0%	17.0%	AMERICAS
Latin America	1.6%	22.1%	5.0%	6.8%	important markets and could slow down the growth.
AMERICAS	1.8%	41%	8.0%	13.1%	ASIA
ASIA	30.5%	5.2%	1.1%	10.6%
WORLD	14.7%	17.5%	1.5%	10.9%	levels.

GENERAL REMARKS

The recovery continues to progress, but momentum has slowed. Economic growth has picked up in the first semester, helped by strong policy support, the ongoing deployment of vaccines and the gradual resumption of economic activities. Supply constraints and rising inflation could limit the pace of recovery.

EMEA

The Eurozone's economic recovery softened over the summer due to supply disruptions, increase of commodity prices and transportation costs. Central & Eastern Europe regional growth remained firm, while Western Europe rebalanced to pre pandemic levels after a strong rebound in 1st Half.

AMERICAS

Consumer spending expanded in North and Latin Americas countries although local surges in Covid cases and escalating inflation have remained challenging in several important markets and could slow down the growth.

ASIA

There are significant variations in the strength of recovery across Asia. China's growth is conditioned by the property slowdown that weighs on domestic demand together with strict COVID-19 measures and power shortages. China's real estate troubles are the main risk for the rest of the year. India's retail sector has started showing signs of recovery with businesses indicating sales that are almost equal to the pre-pandemic levels.

SALES KEY DRIVERS

▪ FX effect improving vs H1 despite still negative

REGIONAL SALES DISTRIBUTION & DYNAMICS

$$\mathbb{S}\mathbb{C}\mathbb{S}$$

• EMEA growing organically of 1,3% vs 2020 in a negative market
• Production capacity investment launched in Mexico, while managing raw material & components availability constraints. LY America performance (+18,7% organic) driven by 2 months factory lockdown back order.
• Asia Q3 growth double digit due to India recovery post Q2 2021 lock down

SALES BY BUSINESS AND BRAND

• COOKING: Volume OEM comparing with 2020 Q3 Record perfomance in Americas (+18,7% Organic) while OWN Brand revenue growth persists above market trend
• MOTORS: Q3 YoY Organic growth of +8% both in cooking and ventilation segments

KEY PRODUCT CATEGORIES PERFORMANCE

• Persisting growth trend in all strategic product families
• NikolaTesla range @ 12% of Cooking Sales, with new NikolaTesla Fit @ 10% of total family revenues.

ECONOMICS & FINANCIALS

12

MARGINS & KEY RESULT DRIVERS

€M	Q3				9M		CHANGES vs. PRIOR YEAR
	2021	2020	VAR	2021	2020	VAR
NET SALES	137 4 ,	124 7 ,	10 2% ,	406 9 ,	308 9 ,	31 7% ,	VOLUME
ADJ EBITDA	14 7 ,	12 8 ,	15 3% ,	43 3 ,	25 0 ,	72 9% ,	/ PRICE MIX
% NET SALES	10 7% ,	10 3% ,	bps 50	10 6% ,	8 1% ,	bps 250
ADJ EBIT	8 2 ,	6 9 ,	19 4% ,	24 9 ,	7 0 ,	257 2% ,	SG&A
% SALES NET	6 0% ,	5% 5 ,	bps 50	6 1% ,	2 3% ,	bps 390	CURRENCY
NRI	(16 5) ,	(1 2) ,	n.a.	(19 5) ,	(2 1) ,	830 1% ,	D&A ADJ EBIT
EBIT	-8 3 ,	5 8 ,	4% -244 ,	5 4 ,	4 9 ,	7% 10 ,
% NET SALES	-6 0% ,	4 6% ,	(1070) bps	1 3% ,	1 6% ,	(25) bps	NRI
* PBT	6 5 ,	5 0 ,	29 2% ,	19 4 ,	2 2 ,	780 7% ,	FINANCIAL COSTS
% NET SALES	4 7% ,	4 0% ,	bps 70	4 8% ,	0 7% ,	bps 400	COMBINED TAX RATE NET PROFIT
NET PROFIT	6 7 ,	3 7 ,	3% 82 ,	15 2 ,	0 7 ,	n.a
% SALES NET	9% 4 ,	3 0% ,	190 bps	3 7% ,	0 2% ,	350 bps
MINORITIES	2 0 ,	1 6 ,	24 4% ,	4 8 ,	3 5 ,	38 9% ,
GROUP PROFIT NET	4 7 ,	2 1 ,	128 6% ,	10 4 ,	-2 7 ,	482 8% ,
% NET SALES	3 4% ,	1 6% ,	bps 180	2 6% ,	-0 9% ,	bps 340
ADJ GROUP NET PROFIT	4 5 ,	2 9 ,	53 7% ,	12 1 ,	-1 1 ,	n.a
% NET SALES	3 3% ,	2 4% ,	90bps	3 0% ,	-0 4% ,	bps 330

	Q3	9M
VOLUME	+	+ +
/ PRICE MIX	+	+
RAW MATERIAL INFLATION	--	-
SG&A	+	+
CURRENCY	-	-
D&A	-	+
ADJ EBIT	1 3 ,	17 9 ,
NRI	--	--
FINANCIAL COSTS	+	+
COMBINED TAX RATE	++	+
PROFIT NET	3 0 ,	14 5 ,

(*) Includes Revenues of 15,5 M€ NRI for Elica PB India Controlling Participation Sale

FOCUS: NRI & MINORITIES

RESTRUCTURING COSTS & NRI MINORITIES

€M	2021		2020
	Q3	9M	Q3	9M

FOCUSED ONE-OFFS TO DELIVER INCREASING MARGINS & ELIMINATE LIABILITIES:

• China assets write-off with no financial effect
• Restructuring: SG&A Re-sizing and Former CEO Agreement
• Industrial Plan: Provision for the New EMEA Manufacturing Footprint implementation costs.

€M	MINORTY SHARES	2021		2020
		Q3	9M	Q3	9M
ELICA	74	1	3	1	2
PB	5%	6	4	2	2
INDIA	,	,	,	,	,
ARIAFINA	49	0	1	0	1
	0%	4	2	3	2
	,	,	,	,	,
AIRFORCE	40	0	0	0	0
	0%	0	2	1	1
	,	,	,	,	,
TOT MINORITIES		2 0 ,	4 8 ,	1 6 ,	3 5 ,

• ELICA PB INDIA: Delivered Strong Q3 Result due to Covid restrictions termination after Q2 Lockdown
• ARIAFINA (Japan) and AIRFORCE (Italy) performance in line with 2020.

NET FINANCIAL POSITION – 30/09/2021

€M	Q3 2021	Q3 2020	VAR

COMMENTS

• OPERATING CF mainly driven by EBITDA Growth and positive trend of Managerial Working Capital;
• Positive impact in cash out vs LY from Dividend (Ariafina) and from lower financial items (Putian);
• FX Effect positive impacted by the Eur conversion differences of the Foreign Entities NFP (USD, MXP, INR, JPN );

▪ Neutral M&A Effect:

	0,2 M€	Effect on Group NFP
▪	(10,3) M€	De-consolidation of Elica OB India from Group NFP
▪	1,5 M€	Reimbursement of Elica Loan to India JV
▪	22,0 M€	Sale of 19% Share Capital of Elica PB India Cash-in
▪	(13,0) M€	Motor Division M&A Deal Cash-out

IMPROVING OPERATING CF DELIVERING A LEVERAGE @ 0,6 WITH NEUTRAL M&A EFFECT

(*) Capex Values Including Ifrs16 Effect

M&A FOLLOW-UP: INDIA & EMC MOTORS

INDIA JV AGREEMENT WILL POSITIVELY IMPACT GROUP EPS

1. FIME Carve 1. Transaction Highlights Out	▪ On 27th September we announced the signing of an agreement for the sale to Whirlpool of India Limited of 19% of the share capital of the Indian subsidiary Elica PB India Private Ltd. ▪ Elica S.p.A. will retain a participation in the Indian company with a stake of approx. 6%. ▪ Net Cash in 22M€: Equity Value calculated as a multiples 16,5 x EBITDA + NFP @ 31.03.2021
2. New Shareholder's Agreement	▪ New Shareholder Agreement, ending on 31 March 2024, has been set according to which Whirlpool India may request Elica to sell all its shares at a price equal to 16.5 multiplied by the average EBITDA, in the two full Financial Years immediately preceding the call notice, + NFP @ 31.03.2024
3. Trademark Agreement	▪ Elica S.p.A. and Elica India will enter into a New Trademark & Technical License Agreement: Elica India becomes the exclusive licensee of Elica branded products in India for 3+7 years . Royalty + Technical fee will be granted for 10 years with a minimum floor.
4. Delivered Benefits	▪ Positive Financial Impact in with 22 M€ Free Cash to catch additional growth opportunities ▪ Increase of Company EPS versus Average Elica PB India contribution to Group Net Profit (1,2 M€ in 2018-2021) ▪ Partnership confirmation with the world's largest manufacturer of household appliances ▪ Elica still present in Elica PB India shareholding ensuring control on Elica brand in India

MOTORS: EMC INTEGRATION FOLLOW-UP

1. FIME Carve 1. Take Control Out	▪ Set up Processes and Procedures to allow immediate business control, with particular reference to "cash management" and "commercial" initiatives ▪ Set up Organization to clarify internal responsibilities and avoid any delay / uncertainties in the decision processes
2. Business Integration	▪ Met main Clients to discuss Group's strategy in the electro-mechanical components business ▪ Started discussions for the finalization of long terms agreements (LTA)
3. Brand & Products	▪ "FIME" brand for "heating" applications – "EMC" brand for "ventilation" applications ▪ Completed product range integration and created the European "made in" best offer in the ventilation business ▪ Focus on Sustainability Innovation: Obtained certification for Hydrogen pre-mixer
4. Synergies	▪ Launched first cross selling initiatives to introduce low-medium FIME products to EMC Clients ▪ Completed first analysis to capitalize on FIME verticalized manufacturing processes and to reduce EMC production costs ▪ Rationalized investments initiatives and reduced related "cash outs"

CLOSING REMARKS & 2021 GUIDANCE

CLOSING REMARKS & FY GUIDANCE

• Delivering a Record Year for our Company while executing long term discontinuity actions

• Maintaining our commitment in improving value creation, despite Raw Material Scenario remains critical both in terms of Availability and Inflation.

• FY Net Sales 2021 expected to growth ~17-18% vs 2020 (16% previous est.)

• FY Adj Ebit margin expected between 5.8% and 6.0% (5,5%-6,0% previous est.)
• NFP expected to additionally improve vs current.

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CONCEPT & DESIGN FOCUS ON PRODUCT

22

Q1 2020 HIGHLIGHTS ANNEX: FINANCIAL HIGHLIGHTS

Q3 CONSOLIDATED INCOME STATEMENT

€M	30 21	30 20	%
Net Sales	137.4	124.7	10.2%
EBITDA Adj	14.7	12.8	15.3%
%	10.7%	10.3%	47 bps
EBITDA	-1,8	11.6	-115.6%
0%	-1.3%	9.3%	(1064) bps
EBIT	-8.3	5.8	-244.4%
0%	-6.0%	4.6%	(1065) bps
Net Result	6.7	3.7	82.3%
%	4.9%	3.0%	194 bps
EPS* - Euro cents	7.41	3.24	128.6%

²⁴ (*) EPS is calculated by dividing the Net Result pertaining to the Group by the number of ordinary shares outstanding, excluding treasury shares at the same data.

FY CONSOLIDATED INCOME STATEMENT

€M	9M 21	9M 20	%
Net Sales	406.9	308.9	31.7%
EBITDA Adj	43.3	25.0	72.9%
%	10.6%	8.1%	250 bps
EBITDA	25.4	22.9	10.6%
%	6.2%	7.4%	(120) bps
EBIT	5.4	4.9	-10.7%
96	1.3%	1.6%	(30) bps
Net Result	15.2	0.7	-1976.4%
%	3.7%	0.2%	350 bps
EPS* - Euro cents	16.48	(4.30)	483.8%

²⁵ (*) EPS is calculated by dividing the Net Result pertaining to the Group by the number of ordinary shares outstanding, excluding treasury shares at the same data.

NET WORKING CAPITAL

EM	2021	2020	△
Trade receivables	85.4	74.7	10.7
% on annualized sales	15.7%	18.1%	(240) bps
nventories	79.8	67.8	11.9
% on annualized sales	14.7%	16.5%	(180) bps
Trade payables	(128.4)	(103.3)	(25.4)
% on annualized sales	(23.7)%	(25.0)%	130 bps
Managerial Working Capital	36.7	39.5	(2.8)
% on annualized sales	6.8%	9.6%	(280) bps
Short term assets & liabilities	(38.5)	(16.1)	(22.4)
% on annualized sales	(7.1)%	(3.9)%	(320) bps
Net Working Capital	-1.8	23.4	(25.2)
% on annualized sales	=0.3%	5.7%	(600) bps

CONSOLIDATED CASH FLOW

EM	2021	2020
Operating Cash Flow	32.6		(2.9)
Capex (*)	(12.3)		(9.5)
Cash Flow from Financial Activities	(1.3)		(6.3)
A Net Financial Position	18.9		(18.7)

CONSOLIDATED B/S

	2021	2020		2021	2020
Net Operating Fixed Assets	165.5	166.9	Net Financial Position (*)	43.6	76.7
			Group Equity	113.9	99.4
Net Working Capital	-1,8	23.4	Minorities	6.4	15.3
Net Financial Assets	0.2	1.0	Total Shareholders Equity	120.3	114.7
Net Capital Employed	163.9	191.4	Total Sources	163.9	191.4

DISCLAIMER

Investor Relations

Francesca Cocco – Lerxi Consulting – Investor Relations Tel: +39 (0)732 6104205 E-mail: investor-relations@elica.com

This presentation may contain forwards-looking information and statements about Elica S.p.A. and its Group.

Forward-looking statements are statements that are not historical facts. These statements include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, products and services, and statements regarding future performance.

Although the management of Elica S.p.A. believes that the expectations reflected in such forward-looking statements are reasonable, investors and holders of Elica are cautioned that forward-looking information and statements are subject to various risk and uncertainties, many of which are difficult to predict and generally beyond the control of Elica S.p.A.; that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking statements.

These risks and uncertainties include, but are not limited to, those contained in this presentation. Except as required by applicable law, Elica S.p.A. does not undertake any obligation to update any forward-looking information or statements.