Emak

Investor Presentation • Mar 21, 2023

Euronext Star Conference 2023

Agenda

• Emak at a glance
• FY 2022 results
• Appendix

Agenda

• Emak at a glance
• FY 2022 results
• Appendix

EMAK AT A GLANCE

Areas of business

OUR STRATEGY

INNOVATION

• Product and process innovation
• Digital transformation
• New technologies and applications, electrification, safety, comfort, emissions control

DISTRIBUTION

• Strengthen the position in the markets with direct presence
• Expand distribution network in markets with high growth potential
• Omni-channel approach, e-commerce

ACQUISITIONS

• Access new technologies
• Complete product range
• Penetrate new markets

EFFICIENCY

• Lean approach
• Exploit supply chain efficiencies
• Reduction of SG&A
• Optimization of invested capital

OUTDOOR POWER EQUIPMENT

Product range

Brushcutters, Lawnmowers, Chainsaws, Garden Tractors, Rotary tillers, Two wheel tractors, Transporters

Production sites Italy 2; China 2

Distribution channel Specialized dealers, DIY, Online

Customers

Professionals, high demanding privates, farmers, home owners

FY 2022 results

Sales 199€m EBITDA Adj 6.3%

Share of Group sales

PUMPS & HIGH PRESSURE WATER JETTING

Product range

Agricultural pumps, industrial pumps, hydrodinamic units, urban cleaning equipment, consumer and professional high pressure washers, vacuum cleaners, floor scrabbers

Production sites Italy 4; Brazil 2; USA 1; China 1

Distribution channel Specialised dealers, DIY, Online, OEM

Applications

Agriculture (spraying), shipyard, oil & gas, construction

FY 2022 results

Sales 241€m EBITDA Adj 14.3%

Share of Group sales

COMPONENTS & ACCESSORIES

Product range

Cutting systems for trimmers, automatic chainsaw sharpening machinery, accessories & components for high pressure cleaning and car-wash, navigation systems, electronic and digital solutions for precision farming.

Production sites

Italy 1; France 1; USA 1; Chile 1; Brazil 1; South Africa 1; Sweden 1; China 1

Distribution channels Specialised dealers, DIY, Online, OEM

FY 2022 results

Sales 165€m EBITDA Adj 18.4%

Share of Group sales

Agenda

• Emak at a glance
• FY 2022 results
• Appendix

Summary FY 2022

Sales 605.7 €m +3%

• Strong growth in H1 (+10.6%)
• Slowdown in demand starting from Q3:
• o worsening of the scenario

• o particularly adverse weather season

• Operating leverage

• Price policies offset higher production and logistic costs
• Long term investments to support business development

Net debt 177.3 €m

• High working capital mainly due to slow down of sales in H2
• Higher dividends
• Trebol acquisition

• BoD propose 0.065 €per share

Group

Consolidated sales grew by 3%. The improvement is due to the positive effect of foreign exchange translation for 2.5%, the change in the scope of consolidation for 0.8%, while it is penalized by an organic negative variation for 0.3%.

Outdoor Power Equipment

Sales grew in France and Germany, while there was a decline in Russia, Italy and Spain.

In the rest of the world, revenues contracted mainly due to the drop in exports to the Turkish market, while sales in the Middle East and African continent are recovering.

Pumps and High Pressure Water Jetting

The contraction in turnover in Europe derives from the markets of Italy, France and Poland, partly offset by growth in the Netherlands, Russia and Germany. The Americas area was the one that contributed the most to the growth of the group thanks to the positive exchange rate effect, the good performance of the Brazilian, Mexican and US subsidiaries.

Components and Accessories

The increase in turnover in Europe is attributable to the change in the scope of consolidation, which offset the decrease in sales on the Italian market.

Growth in the Americas area is driven by the excellent performance in the South American markets.

The decrease in sales in the Asia, Africa and Oceania area is due to the slowdown in demand on the markets of Turkey, China and Japan.

Margins

	FY 2022	FY 2021	∆
Revenues from sales	605.7	588.3	3.0%
EBITDA Adj	76.6	77.4	-0.8%
% on sales	12.7%	13.2%
EBIT	46.8	52.9	-11.5%
% on sales	7.7%	9.0%
Financial income	4.0	1.0
Financial expenses	(8.6)	(8.6)
Forex	1.9	0.6
Profit befor taxes	44.1	45.9	-3.9%
Net profit	31.2	33.1	-5.9%

• Price increase offset higher production and energy costs.
• Planned increase in expenses related to commercial development.
• Higher personnel expenses mainly due to scope of consolidation and wage dynamics
• Loss of € 2.9 million due to the reduction in the value of goodwill.
• Higher financial income from the valuation of interest rate hedging derivatives offset the higher financial charges.
• Lower impact of P&C options evaluation
• Forex positively affected by the revaluation of the US dollar and the Brazilian real

Consolidated balance sheet

€/000	31.12.2022	31.12.2021
Net non-current assets	206,605	202,117
Net working capital	247,687	198,085
Net capital employed	454,292	400,202
Net financial position	(177,305)	(144,269)
IFRS 16 effect	38,039	38,974
Net financial position (net of IFRS 16)	(139,266)	(105,295)
Total equity	276,987	255,933

Net Working Capital

• The increase in net working capital is mainly linked to the dynamics of purchases and inventories; in the first part of the year, in order to effectively cope with the strong market demand and the difficult logistical conditions, the Group has maintained a procurement policy aimed at increasing its inventories.
• In the second half of 2022, due to the changed market conditions, the slowdown in production volumes led to a reduction in purchases for the benefit of the use of inventories which was however not sufficient to generate a positive impact on working capital.

Bestway AG

• The company is recognized as a key player in the US market for the production and marketing of sprayers, equipment for agricultural applications.
• The transaction will allow the expansion and completion of PWJ product range
• The North American agricultural market can be reached and served in a more capillary way.
• FY 2022 figures: turnover of 32 \$m; EBITDA of 2.5 \$m.
• The interim consideration set forth for the acquisition, subject to adjustment following the establishment of final asset values as of January 31, 2023, is 22.5 \$m.

ELECTRONICS

Raw Power

• On 22 February 2023, the Parent Company ratified the entry into the company Raw Power S.r.l., based in Reggio Emilia, through the subscription of a share capital increase for a 24% stake, for an amount equal to Euro 800 thousand .
• The company deals with all aspects related to power electronic design, aimed at automation and static conversion of energy and the design of electric motors and generators.
• The operation is carried out with the intention of allowing Emak S.p.A. to enhance the fundamental know-how of electric motor technology in order to increase competitiveness in the battery-powered products market, which is constantly and rapidly evolving.

Agenda

• Emak at a glance
• FY 2022 results
• Appendix

Results by business segment

	OUTDOOR POWER EQUIPMENT		PUMPS AND HIGH PRESSURE JETTING	WATER	COMPONENTS AND ACCESSORIES		Other not allocated / Netting		Consolidated
€/000	31.12.2022	31.12.2021	31.12.2022	31.12.2021	31.12.2022	31.12.2021	31.12.2022	31.12.2021	31.12.2022	31.12.2021
Sales to third parties	199,436	202,977	241,283	229,990	165,004	155,332			605,723	588,299
Intersegment sales	357	345	3,308	2,877	9,685	10,524	(13,350)	(13,746)
Revenues from sales	199,793	203,322	244,591	232,867	174,689	165,856	(13,350)	(13,746)	605,723	588,299
Ebitda	12,257	16,221	34,910	33,991	31,937	30,913	(3,025)	(3,829)	76,079	77,296
Ebitda/Total Revenues %	6.1%	8.0%	14.3%	14.6%	18.3%	18.6%			12.6%	13.1%
Ebitda before non ordinary expenses	12,495	16,360	35,082	33,382	32,092	31,523	(3,025)	(3,829)	76,644	77,436
Ebitda before non ordinary expenses/Total Revenues %	6.3%	8.0%	14.3%	14.3%	18.4%	19.0%			12.7%	13.2%
Operating result	1,251	8,089	26,054	26,128	22,475	22,516	(3,025)	(3,829)	46,755	52,904
Operating result/Total Revenues %	0.6%	4.0%	10.7%	11.2%	12.9%	13.6%			7.7%	9.0%
Net financial expenses (1)									(2,658)	(7,019)
Profit befor taxes									44,097	45,885
Income taxes									(12,932)	(12,774)
Net profit									31,165	33,111
Net profit/Total Revenues%									5.1%	5.6%
(1) Net financial expenses includes the amount of Financial income and expenses, Exchange gains and losses and the amount of the						Income from equity investment
STATEMENT OF FINANCIAL POSITION	31.12.2022	31.12.2021	31.12.2022	31.12.2021	31.12.2022	31.12.2021	31.12.2022	31.12.2021	31.12.2022	31.12.2021
Net debt	21,295	6,778	108,992	96,092	47,018	41,399	0	0	177,305	144,269
Shareholders' Equity	184,363	186,501	98,689	83,830	72,228	63,454	(78,293)	(77,852)	276,987	255,933
Total Shareholders' Equity and Net debt	205,658	193,279	207,681	179,922	119,246	104,853	(78,293)	(77,852)	454,292	400,202
Net non-current assets (2)	122,922	128,424	101,679	95,854	57,242	53,233	(75,238)	(75,394)	206,605	202,117
Net working capital	82,736	64,855	106,002	84,068	62,004	51,620	(3,055)	(2,458)	247,687	198,085
Total net capital employed	205,658	193,279	207,681	179,922	119,246	104,853	(78,293)	(77,852)	454,292	400,202
	(2) The net non-current assets of the Outdoor Power Equipment area includes the amount of Equity investments for 76,074 thousand Euro
OTHER STATISTICS	31.12.2022	31.12.2021	31.12.2022	31.12.2021	31.12.2022	31.12.2021	31.12.2022	31.12.2021	31.12.2022	31.12.2021
Number of employees at period end	747	758	873	837	655	622	9	8	2,284	2,225
OTHER INFORMATIONS					31.12.2022	31.12.2021	31.12.2022	31.12.2021	31.12.2022	31.12.2021
Amortization, depreciation and impairment losses	31.12.2022 11,006	31.12.2021 8,132	31.12.2022 8,856	31.12.2021 7,863	9,462	8,397			29,324	24,392

Consolidated income statement

€/000	Year 2022	Year 2021
Revenues from sales	605,723	588,299
Other operating incomes	4,753	5,110
Change in inventories	12,790	48,764
Raw materials, consumables and goods	(331,528)	(354,737)
Personnel expenses	(99,519)	(98,231)
Other operating costs and provisions	(116,140)	(111,909)
Amortization, depreciation and impairment losses	(29,324)	(24,392)
Operating result	46,755	52,904
Financial income	4,007	1,003
Financial expenses	(8,560)	(8,611)
Exchange gains and losses	1,895	589
Profit befor taxes	44,097	45,885
Income taxes	(12,932)	(12,774)
Net profit	31,165	33,111
(Profit)/loss attributable to non controlling interests	(897)	(603)
Net profit attributable to the Group	30,268	32,508
Basic earnings per share	0.185	0.199
Diluted earnings per share	0.185	0.199

Consolidated balance sheet - Assets

€/000	31.12.2022	31.12.2021
Property, plant and equipment	82,524	78,558
Intangible assets	24,482	24,853
Rights of use	36,461	37,665
Goodwill	71,216	70,634
Equity investments in other companies	8	8
Deferred tax assets	10,395	10,012
Other financial assets	1,151	984
Other assets	60	59
Total non-current assets	226,297	222,773
Inventories	233,970	217,316
Trade and other receivables	119,661	127,984
Current tax receivables	9,967	10,076
Other financial assets	38	72
Derivative financial instruments	2,707	286
Cash and cash equivalents	86,477	79,645
Total current assets	452,820	435,379
TOTAL ASSETS	679,117	658,152

Consolidated balance sheet - Liabilities

€/000	31.12.2022	31.12.2021
Shareholders' Equity of the Group	273,003	253,183
Non-controlling interests	3,984	2,750
Total Shareholders' Equity	276,987	255,933
Loans and borrowings due to banks and other lenders	152,346	115,994
Liabilities for leasing	31,682	33,111
Deferred tax liabilities	7,962	7,386
Employee benefits	6,291	7,500
Provisions for risks and charges	2,778	2,590
Other non-current liabilities	1,510	2,197
Total non-current liabilities	202,569	168,778
Trade and other payables	109,344	149,222
Current tax liabilities	4,984	6,182
Loans and borrowings due to banks and other lenders	76,594	69,707
Liabilities for leasing	6,357	5,863
Derivative financial instruments	699	581
Provisions for risks and charges	1,583	1,886
Total current liabilities	199,561	233,441
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES	679,117	658,152

Shareholders and Governance

Emak has been listed on the Italian Stock Exchange since 1998 and since 2001 on STAR segment (dedicated to mid-size companies that adhere to strict requirements appreciated by global investors in terms of governance, liquidity, transparency).

Yama is an industrial holding whose shareholders are the families that founded the Group in late 60's.

Seven families hold 97% of Yama's share capital, with shareholdings from 6% to 23%.

Board of Statutory Auditors

Montanari Stefano Chairman Labanti Roberta Pasquetti Livio

Independent Auditors

Deloitte & Touche S.p.A.

ESG indicators

Environmental	2022	2021
Scope 1 GHG emissions Tons C02eq	4,302	4,974
Scope 2 GHG emissions - market based Tons C02eq	8,047	9,069
Scope 2 GHG emissions - location based Tons C02eq	7,274	8,141
Scope 1 + Scope 2 (market based) Tons C02eq	12,349	14,043
Scope 1 + Scope 2 (location based) Tons C02eq	11,576	13,115
Total waste generated Tons	2,564	2,861
% of recovered waste	69%	63%
% of hazardous waste	4%	4%
Social	2022	2021
# employees	2,284	2,225
% men	65%	64%
% women	35%	36%
Governance	2022	2021
Board gender diversity	46%	38%
Female	6	5
Male	7	8
Total board members	13	13
Average age	58	63
Independent directors	3	3
Executive directors	2	3
Non executives directors	8	7
Separate chairman and CEO	Yes	No
Code of ethics	Yes	Yes

Synthesis of results

€m	2014	2015	2016	2017	2017 PF	2018	2019	2020	2021	2022
Sales	354.8	381.6	391.9	422.2	461.8	452.8	434.0	469.8	588.3	605.7
EBITDA adj	33.1	37.5	40.5	45.6	52.5	50.8	46.9	56.3	77.4	76.7
margin	9.3%	9.8%	10.3%	10.8%	11.4%	11.2%	10.8%	12.0%	13.2%	12.7%
EBITDA	31.5	35.8	39.5	43.9	50.1	49.4	46.1	55.6	77.3	76.1
margin	8.9%	9.4%	10.1%	10.4%	10.8%	10.9%	10.6%	11.8%	13.1%	12.6%
EBIT	20.0	23.3	21.9	30.0	35.8	34.0	22.0	32.9	52.9	46.8
margin	5.6%	6.1%	5.6%	7.1%	7.8%	7.5%	5.1%	7.0%	9.0%	7.7%
Net profit	10.2	9.0	17.7	16.4	20.6	25.6	13.1	19.6	33.1	31.2
margin	2.9%	2.4%	4.5%	3.9%	4.5%	5.7%	3.0%	4.2%	5.6%	5.1%
FCF from operations *	21.7	21.5	35.3	30.4	34.9	41.1	31.8	36.7	51.4	53.8
Net Equity	160.1	168.5	181.7	187.5	187.5	205.8	211.5	222.3	255.9	277.0
Net fin. debt	79.0	99.4	80.1	125.3	125.3	117.4	146.9	126.6	144.3	177.3
Debt/Equity	0.5 * Calculated by adding the items "Net profit" + "Amortization, depreciation and impairment losses" –	0.6	0.4	0.7	0.7	0.6 IFRS 16 effect (starting from 2019)	0.7	0.6	0.6	0.6
Debt/EBITDA adj	2.4	2.7	2.0	2.7	2.4	2.3	3.1	2.2	1.9	2.3

* Calculated by adding the items "Net profit" + "Amortization, depreciation and impairment losses" – IFRS 16 effect (starting from 2019)

2014: Acquisition of Speed Industrie Sarl (Marocco), S.I.Agro Mexico, Geoline Electronic (Italy), Master Fluid (Italy), Speed South America (Chile) 2015: Acquisition of Lemasa (Brazil) 2016: Acquisition of 30% of Cifarelli S.p.A. 2017: Acquisition of Lavorwash Group 2018: Sale of Raico; acquisition of Spraycom (Brazil) 2019: acquisition of 30% of Agres (Brazil) 2020: acquisition of 51% of Markusson (Sweden); increase in Agres to 91% 2021: Acquisition of 80% of Poli (Italy) 2022: Acquisition of 83.33% of Trebol (Spain)

Roberto Bertuzzi, manager responsible for the preparation of the corporate accounting documents, declares and certifies in accordance with article 154 bis, paragraph 2, of the Consolidated Finance Act, that the financial statements contained in this presentation correspond to the underlying accounting documents, records and accounting entries.

Speakers

Mr. Luigi Bartoli– CEO Mr. Cristian Becchi – CFO Mr. Andrea La Fata – Investor Relator andrea.lafata@emak.it - 0039-0522.956.332