Gvs — Investor Presentation 2020

Sep 9, 2020

Informazione Regolamentata n. 2251-13-2020		Data/Ora Ricezione 09 Settembre 2020 16:17:41	MTA
Societa'	:	GVS S.P.A.
Identificativo Informazione Regolamentata	:	136748
Nome utilizzatore	:	GVSN02 - Mario Saccone
Tipologia	:	1.2
Data/Ora Ricezione	:	09 Settembre 2020 16:17:41
Data/Ora Inizio Diffusione presunta	:	09 Settembre 2020 16:17:42
Oggetto	:	GVS S.p.A. - Presentazione risultati 1H 2020
Testo del comunicato

GVS S.p.A. - Presentazione risultati 1H 2020

GVS SPA

SEPTEMBER 2020

STRICTLY PRIVATE & CONFIDENTIAL

DISCLAIMER

The information contained in this presentation does not purport to be comprehensive and has not been independently verified by any independent third party.

This presentation does not constitute a recommendation regarding the securities of the Company.

This presentation does not contain an offer to sell or a solicitation of any offer to buy any securities issued by GVS S.p.A. or any of its subsidiaries.

This presentation contains certain forward-looking statements that reflect the Company's management's current views with respect to future events and financial and operational performance of the Company and its subsidiaries. These forward-looking statements are based on GVS S.p.A.'s current expectations and projections about future events. Because these forward-looking statements are subject to risks and uncertainties, actual future results or performance may differ materially from those expressed in or implied by these statements due to any number of different factors, many of which are beyond the ability of GVS S.p.A. to control or estimate precisely, including changes in the regulatory environment, future market developments, fluctuations in the price, and other risks. You are cautioned not to place undue reliance on the forward-looking statements contained herein, which are made only as of the date of this presentation. GVS S.p.A. does not undertake any obligation to publicly release any updates or revisions to any forward-looking statements to reflect events or circumstances after the date of this presentation.

Pursuant to art. 154-bis, paragraph 2, of the Italian Unified Financial Act of February 24, 1998, the executive in charge of preparing the corporate accounting documents at GVS S.p.A. declares that the accounting information contained herein correspond to document results, books and accounting records.

Agenda

1	H1 and FY 2020 Outlook
2	Company Presentation

Appendix: Additional Materials

UPDATE ON GVS AND BUSINESS ENVIRONMENT

	 H1 presented exceptional business opportunities for GVS, but also several operational challenges
Actions Put In Place by GVS in The First Half	 Workforce safety measures implemented globally since February, ahead of Government imposed requirements
	 All manufacturing facilities have continued to be fully operational globally, except for a c.10-day period shutdown in the Suzhou factory in China
	411 1.0001  new production lines and about new hires (70% temporary) to meet surge in demand for PPE and Healthcare Air filters
	 Supply chain secured thanks to local presence in each market with well-planned sourcing of key raw materials
	 Closed two M&A deals, the first in Life Sciences in January and the second in Healthcare in June
	 Supported local communities through donations and collaborations with hospitals and local governments
	 Exceptional demand in 2020 for PPE and Healthcare Air Filtration (for ICUs ventilators and assisted breathing devices), but increased level of awareness and demand here to stay in the future
Business Environment	 Structural increase in spending in healthcare and research by governments expected in the future
	 Industrial end market performed in line with expectations given the challenging context, with recovery signals

H1 2020 GVS Performance Highlights

Sales: 25% of growth on the previous year

• Q2 reflected the impact of the actions put in place to face the business acceleration due to the Covid 19.
• Trend FY2020 in line with guidance given in May.

EBITDA: 37% of Adjusted EBITDA Margin on Sales

• 31,5% of EBITDA margin in Q1 and 42,0% of EBITDA margin in Q2.

NFP: 9 M€ of H1 NFP: 26,5M€ improving without IPO e M&A vs the YE 2019

• 78 M€ of net cash in from the IPO capital increase.
• 10,5 M€ of cash out for two M&A operations: Graphic Control 3,5 M€, Haemonetics PR 7 m€
• Right of Use about 10 M€, so we are actually cash positive.

Leverage KPI: Debt/Equity 0 and NFP/EBITDA 0,1

• The two key financial KPI are coherent with expectations.

2020 EVOLUTION OF SALES

TOTAL SALES H1 2020: 146,3 M€

In H1 2020, two of three GVS Divisions performed in line (even better) with the guidance. Health & Safety is growing in terms of relative wheight on the total business as well as the Healthcare & Lifesciences.

VISIBILITY ON 2020 PERFORMANCE

FY 2020 expected sales are already covered by actual sales plus a current strong order book value. Expectations are to reach the high side of the guidance.

Note: Division and sub-division figures rounded to first decimal point

Key Financial Highlights — EBITDA and EBIT

Adjusted EBITDA:

• Adjusted EBITDA increased 90% in Q2 compared with Q1.
• In H1 2020 adjusted EBITDA increased 71% vs. H1 2019.
• Trend is in line with the Guidance 2020.

Adjusted EBIT:

• Adjusted EBIT has been adjusted for PPA related amortization and other non-recurring income and costs for comparability purposes
• Adjusted EBIT increased 109% in Q2 compared with Q1.
• In H1 2020 adjusted EBIT increased 84% vs. H1 2019.

Note: margins calculated on revenues from contracts with customers excluding other income. Please refer to Appendix for further details on adjustments

1. Adjusted for non recurring costs / income;

2. Adjusted for non recurring costs / income and PPA related amortization.

Key Financial Highlights — Net Income, Fin. Exp. & Taxes

Note: margins calculated on revenues from contracts with customers excluding other income. Please refer to Appendix for further details on adjustments 1. Adjusted for non-recurring costs / income and relative fiscal impact, PPA related amortization and related fiscal impact and alignment of tax rates due to fiscal reforms.

Key Financial Highlights — CapEx, TWC and R&D

Note: Capex and R&D % of revenues calculated on revenues from contracts with customers excluding other income 1. Exclude investments in financial assets; 2 Includes R&D expenses included in income statement and capitalized costs

Key Financial Highlights — Net Financial Position

KEY COMMENTS

NFP has decreased in the first half of 2020 down to 9,2 M€, 94M€ less than year end 2019:

• M&A and IPO generated a net cash in about 67,5 M€ as net cash in from extraordinary activities.
• Operative Cash flow less Capex generated 26,5 M€ in the first half 2020.

Cash Conversion will improve in the second half as usual, due to the traditional concentration of CapEx cash out in the first half.

1. Cash conversion calculates as (Adjusted EBITDA-Capex)/Adjusted EBITDA). Capex exclude M&A investments.

Operations

• Factories suffered no shutdown (except for a c.10 days period in the Suzhou factory in China)
• GVS ramped up production in existing factories and added 41 new production lines
• About 1.000 new hires (70% temporary) and reallocation of people from E&M lines with lower demand

Sales

• Q1 in line with expectations and previous year, while Q2 start to show the impact of the installed new line to support the growing demand of the market due to the Covid-19 pandemia.

New Activities

• Research of new acquisition target is ongoing.
• New GVS Office in India

Guidance

• GVS Confirms the guidance presented for 2020 excluding the HC PR acquisition.
• In relation to the actual consensus GVS believes to be on a prudent side.

Agenda

1	H1 and FY 2020 Outlook
2	Company Presentation
Appendix: Additional Materials

Key People

Estate

GVS provides advanced filtration solution for critical application in Highly-regulated end markets

1979 1984 1989 1994 1999 2004 2009 2012 2015 2018 2019

GVS has 13 production facilities, in several worldwide locations.

GVS evolved from a small healthcare components supplier into a global diversified filtration group

14 M&A TRANSACTIONS SINCE 2009

Adding capabilities and strengthening presence across China, the UK and North America

Strong M&A team with track-record of execution and successful integration

Divisions and Products Line

Diversified blue-chip client base

Over 4,600 customers, long-tenured relationship with top clients

1. Excluding €3.2m other income not attributable to single categories; 2. Most of them are GVS clients.

GVS's divisions differentiate for an integrated and highly synergistic business model

Our success is based on strong focus on innovation and customer satisfaction

Quality Certification

GVS has obtained several Quality Certification, from several Certifiation Body

An ESG-compliant organization

Agenda

1	H1 and FY 2020 Outlook
2	Company Overview
	Appendix: Additional Materials

Key Financial Highlights — Income Statement

YTD 30/06 (€m)	H1 2019A	H1 2020A	Var. %
Healthcare & Life Sciences	58,4	68,0	16%
Growth %
Energy & Mobility	45,6	30,9	-32%
Growth %
Health & Safety	12,7	47,4	274%
Growth %
Revenues from contracts with customers	116,7	146,3	25%
Other Income	1,2	0,7
Total Revenues	117,9	147,0	25%
Raw Materials	(34,4)	(35,3)
Personnel	(38,0)	(44,0)
Cost of Services	(11,7)	(16,8)
Other Costs	(2,0)	(1,3)
EBITDA	31,8	49,7	56%
Margin (%)	27%	34%
Non recurring costs (income)	0,4	5,5
Adjusted EBITDA	32,2	55,1	71%
Margin (%)	27,6%	37,7%
D&A and write-offs	(8,1)	(9,2)
o/w PPA related amortization	(1,9)	(2,0)
EBIT	23,7	40,5	71%
Margin (%)	20%	28%
Adjusted EBIT	26,0	47,9	84%
Margin (%)	22,3%	32,8%
Net Financial Expenses net of FX gains/(losses)	(2,3)	(1,9)
FX gains/(losses)	0,6	(2,7)
EBT	22,0	35,9	63%
Margin (%)	18,8%	24,5%
Taxes	(5,8)	(10,6)
o/w Non recurring inc./cost tax effect	(0,2)	(1,7)
Net Income	16,4	27,0	64%
Margin (%)	14,1%	18,5%
Adjusted Net Income	18,5	32,8	77%
Margin (%)	15,8%	22,4%

Note: margins calculated on revenues from contracts with customers excluding other income

Key Financial Highlights — Adjustments Overview

YTD 30/06 (€m) H1 2019A H1 2020A

Non recurring costs (income)

EBITDA	31,8	49,7
Start-up costs	0,1	-
Write-off of tax receivables	0,1	-
Personnel reorganization costs	0,1	0,2
Transaction costs	-	0,3
IPO costs	-	5,0
Adjusted EBITDA	32,2	55,1
Margin (%)	27,6%	37,7%

EBIT	23,7	40,5
Non recurring costs (income)	0,4	5,5
PPA related amortization	1,9	2,0
Adjusted EBIT	26,0	47,9
Margin (%)	22,3%	32,8%

Group Net Income	16,4	27,0
Non recurring costs (income)	0,4	5,5
PPA related amortization	1,9	2,0
Fiscal impact of amortization of intangible assets recorded under the PPA method & non recurring	(0,2)	(1,7)
Adjusted Group Net Income	18,5	32,8
Margin (%)	15,8%	22,4%

Key Financial Highlights — Balance Sheet

YTD 30/06 (€m)	H1 2019A	H1 2020A
Property Plant & Equipment	51,0	62,5
Intangible Assets	100,2	98,8
Right of use	6,4	9,4
Financial Fixed Assets	0,3	0,4
Net Fixed Assets	157,9	171,2
Inventories	36,4	44,0
Trade Receivables	42,5	47,8
Trade Payables	(17,1)	(33,4)
Trade Working Capital	61,8	58,4
Other Current Assets / (Liabilities)	(5,8)	(19,4)
Net Working Capital	56,0	39,0
Other Assets / (Liabilities)	2,0	0,4
Funds and Provisions	(4,0)	(4,2)
Net Invested Capital	212,0	206,4
Shareholders' Equity	82,6	197,2
Financial Debt	136,4	99,8
Lease Liabilities	3,1	3,6
equivalents1 (Cash & cash )	(10,1)	(94,2)
Net Financial Indebtedness	129,4	9,2
Net Financial Indebtedness / Adjusted LTM	n/a	0.1x
EBITDA
Total Sources	212,0	206,4

1 Includes also the item Current Financial Assets.

YTD 30/06 (€m)	H1 2020A
Adjusted EBITDA	55,1
Taxes	(8,9)
Δ Net Working Capital	4,6
Net Capex (incl. Financial assets)	(25,3)
Operating Cash Flow	25,5
Net financial results	(4,6)
Extraordinary items	(5,5)
Δ Funds and provisions	-
Δ Equity	78,4
Change in net debt	93,9
BoP	103,1
EoP	9,2

• Financial Overview slides present consolidated and division financial information of GVS S.p.A. and its reporting units
• The financial information has been prepared in accordance to IFRS
• Due to rounding, numbers expressed in millions throughout this section may differ from those expressed precisely to the totals
• EBITDA is defined as the sum of net income, taxes, net financial expenses, depreciation and amortization and net impairment losses on financial assets