Intercos — Investor Presentation 2023

Aug 3, 2023

August 3rd 2023

1H23 RESULTS

Disclaimer

IMPORTANT NOTICE

This presentations is being furnished to you solely for your information and may not be reproduced or redistributed to any other person. This presentation might contain certain forward-looking statements that reflect the Company's management 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 Intercos 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 Intercos to control or estimate. 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. Intercos 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.

Any reference to past performance or trends or activities of Intercos shall not be taken as a representation or indication that such performance, trends or activities continue in the future.

This presentation does not constitute an offer to sell or the solicitation of an offer to buy the Group's securities, nor shall the document form the basis of or be relied on in connection with any contract or investment decision relating thereto, or constitute a recommendation regarding the securities of Intercos.

Intercos securities referred to in this document have not been and will not be registered under the U.S. Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

Pietro Oriani, the Manager in charge of preparing the corporate accounting documents, declares that, pursuant to art. 154-bis, paragraph 2, of the Legislative Decree no.58 of February 24, 1998, the accounting information contained herein correspond to document results, books and accounting records.

Agenda

1H23 Executive Summary

Record quarterly Sales and EBITDA in 2Q23

	1H23 Executive Summary –	1H23 and 2Q23 Results overview
	€m	2Q23	2Q22	% vs 2Q22
				Rep FX	c FX
Q 2	Revenues	253.8	193.3	31% 34%
	Adj. EBITDA	37.5	29.5	27%
	Adj. EBITDA %	14.8%	15.3%
	€m	1H23	1H22	% vs 1H22
				Rep FX	c FX
	Revenues	488.4	367.9	33%	33%
	Adj. EBITDA	67.4	48.7	38%
H 1	Adj. EBITDA %	13.8%	13.2%
	Adj. Net Income	26.9	20.8	30%
	Adj. Net Income %	5.5%	5.6%
	Net Debt	122.7	125.1
	Net Debt/EBITDA	0.87x	1.18x

1H23 and 2Q23 Revenues by BU's

€m	2Q23	2Q22	% vs 2Q22

		15,7% 61,6% Skincare	Make Up	14,8% Skincare	62,3% Make Up
	€m	2Q23	2Q22	% vs 2Q22
	€m	1H23	1H22	% vs 1H22
	Revenues	488.4	367.9	33%
H 1	Make Up	304.2	236.6	29%
	Skincare	72.1	65.3	10%
	Hair & Body	112.1	66.1	70%
					in 2Q (+89%).

• Make-up 1H23 net sales grew significantly at +29%. After a 1Q of strong growth, excellent performance continued in 2Q, with also Retailers performing well. All geographical areas and all types of customers recorded consistent growth: excellent performance in Asia and EMEA, driven by Emerging
• brands and Multinationals. Skincare closed 1H23 up +10%. The good performance was driven, in both quarters, by the good results recorded by US customers. Both Multinationals and Emerging Brands
• performed well. Hair & Body net sales increased by +70% in 1H23. The evolution confirms the excellent growth rates expected following the new agreements signed with some brands, including Dolce&Gabbana. Sales growth further accelerated in 2Q (+89%).

1H23 and 2Q23 Revenues by Region (Commercial Company)

		31,1% Americas	51,7% EMEA	31,0% Americas	52,9% EMEA Americas
	€m	2Q23	2Q22	% vs 2Q22
	€m Revenues	1H23 488.4	1H22 367.9	% vs 1H22 33%
H 1	EMEA Americas Asia	258.2 151.4 78.8	176.7 124.5 66.8	46% 22% 18%
					recorded a double-digit growth.

$\epsilon$ m	1H 23	1H 22	% vs 1H22
Revenues	488.4	367.9	33%
EMEA	258.2	176 7	46%
Americas	1514	124.5	22%
Asia	78.8	66 8	18%

• customer types and market segments (mass/prestige) showed growth. The Hair & Body and Make-up segments performed excellently, together with the performance of Emerging Brands, which further accelerated in 2Q23.
• Americas recorded revenues up by +22% compared to 1H22. Growth was supported by the excellent results reported by all Business Units, achieved thanks to the good performances of both Emerging Brands and
• Multinationals. Asia 1H23 net sales posted a solid performance (+18% vs. 1H22). Both China and Korea contributed positively to this result. Despite a Chinese market which has not yet shown tangible signs of recovery, 2Q23 Group sales in China recorded a double-digit growth.

1H23 and 2Q Revenues by Customer Type

€m	2Q23	2Q22	% vs 2Q22

	€m	2Q23	2Q22	% vs 2Q22	- Multinationals sales grew by +22% vs. 1H22, thanks to all
					business units. Performances in US and EMEA were
					excellent in both 1Q and 2Q.
					- Emerging Brands (+62% vs. 1H22) continued to be the
					main driver of growth. Good results were achieved in
	€m	1H23	1H22	% vs 1H22	both mass and prestige segments, and especially in US
	Revenues	488.4	367.9	33%	and EMEA. The positive trend further accelerated in 2Q.
H 1	Multinationals	254.8	209.5	22%	- Retailers positive sales trend (+8% vs. 1H22), was
	Emerging Brands	187.1	115.3	62%	achieved thanks to the strong rebound posted in 2Q23
	Retailers	46.5	43.2	8%	(+15%) mainly driven by EMEA.

• Multinationals sales grew by +22% vs. 1H22, thanks to all business units. Performances in US and EMEA were excellent in both 1Q and 2Q.
• Emerging Brands (+62% vs. 1H22) continued to be the main driver of growth. Good results were achieved in both mass and prestige segments, and especially in US and EMEA. The positive trend further accelerated in 2Q.
• Retailers positive sales trend (+8% vs. 1H22), was achieved thanks to the strong rebound posted in 2Q23 (+15%) mainly driven by EMEA.

8

• 1H23 Financials Results overview - 1H23 Net Sales amounted to €488.4m (+32.7% at reported FX, and +33.3% at constant FX), increasing by €120.4m compared to 1H22. At constant exchange rates, 2Q23 sales growth accelerated even further, to €253.8m (+31.3% at reported FX, and +33.8% at constant FX). YTD sales growth characterized all business units, geographies and type of customers, and it was once again mainly driven by volumes. - 1H23 Adjusted EBITDA was equal to €67.4m (+38.5% vs. 1H22),
• growing by €18.7m vs. LY. All the business units contributed to the growth. 2Q23 Adj. EBITDA, totalling €37.5m, was the highest quarterly EBITDA ever reported by the Group. 1H23 Adj. EBITDA on net sales amounted to 13.8%, increasing by +57Bps vs. 1H22, while on Value added sales (i.e. excluding packaging) the ratio increased even more, reaching 17.2% (+129Bps vs. 1H22). - 1H23 Adjusted Net income stood at €26.9m (+29.6%), growing by - 30Jun23 Net Debt amounted to €122.7m, down by €2.4m vs. LY,
• €6.1m vs. 1H22. The increase was driven by the growth at EBITDA level, partially offset by higher D&A, taxes and financial expenses that last year benefitted from positive currencies fluctuation.
• despite: (i) €14.4m of dividends paid in 2Q23, and (ii) €19.9m of new financial liabilities booked in accordance with the IFRS16 accounting principle, following some rents renewals that took place in 2Q23 only. Leverage ratio (Net Debt on LTM Adj. EBITDA) was equal to 0.87x, down by 0.31x vs. a year ago.

€m	1H23	1H22	Var. vs	% vs
			1H22	1H22
Net Sales	488.4	367.9	120.4	32.7%
Gross Margin	100.9	76.4	24.5	32.1%
Gross Margin %	20.7%	20.8%	(10Bps)
Adj. EBITDA	67.4	48.7	18.7	38.5%
Adj. EBITDA %	13.8%	13.2%	+57Bps
EBITDA (*)	64.8	45.1	19.6	43.4%
EBIT (*)	42.9	24.4	18.5	75.5%
PBT (*)	35.6	26.6	9.0	34.0%
Net Income (*)	25.0	18.2	6.8	37.3%
Adj. Net Income	26.9	20.8	6.1	29.6%
Adj. Net Income %	5.5%	5.6%	(13Bps)
(*) Includes non recurring items
€m	30Jun23	30Jun22	Var. vs
			30Jun22
Net Debt	122.7	125.1	(2.4)
Net Debt/Adj. EBITDA LTM	0.87x	1.18x	(0.31x)

1H23 Group Adj. EBITDA stood at €67.4m, increasing by +38% (or+€18.7m,) vs. 1H22, supported by strong sales performance and higher profitability. increase in the packaging sold for our products, on which the Group does not generate profits, and the higher than expected growth of the Group level. Adj. EBITDA on value added sales (sales net of the cost of packaging), was 17.2%, up by +129Bps vs. 1H22. Hair&Body Adj. EBITDA stood at €12.9m, almost doubling vs. 1H22 (+93%, or +€6.2m). The remarkable growth was achieved thanks to a significant

Make-Up Adj. EBITDA was equal to €45.2m, growing by 36% (or +€11.8m) vs. 1H22. Higher volumes and improved industrial productivity, together 14.8%).

Skincare Adj. EBITDA amounted to €9.3m, increasing by 8% (or +€0.7m) vs. 1H22. In the absence of a tangible recovery of the Asian market, the growth of the business unit was mainly achieved thanks to the good performance of some US customers served by our subsidiary Cosmint SpA.

improvement in industrial productivity, which allowed to increase the profitability of the business unit by +140Bps. Moreover, as a reminder, last year the business unit was the one most exposed to low production efficiency caused by the supply chain disruption and to energy price fluctuations.

1H23 Financials – Cash Flow & Net Debt 1H23 Operating Cash Flow amounted to €7.4m, up by €6.3m vs. 1H22, thanks to the increase in EBITDA and improved working capital management. Looking at the main components, 1H23 Trade working capital cash absorption was mainly due to the increase of trade receivables experienced, following the increase in sales, while 1H23 higher capex vs. 1H22 includes €23.5m of IFRS16 accounting impact due to the renewal of some lease agreements. 1H23 Net cash flow before dividends was instead negative and equal to - €17.6m, mainly due to an exceptional cash out regarding a dispute previously accrued (equal to €5m), higher taxes, and less favourable exchange rates impact compared to the previous year.

Despite the IFRS16 impact and the dividends paid in 2Q23, 30Jun23 Net Debt amounted to €122.7m, improving by €2.4m compared to that of 30Jun22. Leverage ratio now stands at 0.87x, down by 0.31x vs. a year ago.

€m	1H23	1H22	Var. vs 1H22
Adjusted EBITDA	67.4	48.7	18.7
Adjustments (*)	(0.7)	(1.7)	1.0
Change in TWC	(24.7)	(39.3)	14.6
Other Chg, in WC	14.7	14.5	0.2
Capex (**)	(49.3)	(21.0)	(28.2)
Operating Cash Flow	7.4	1.1	6.3
Changes L/T Assets & Liab.	(4.1)	(3.1)	(1.1)
Fin. Expenses	(7.2)	2.2	(9.4)
Taxes	(10.6)	(8.4)	(2.3)
Chg in Equity & Others	(3.0)	9.7	(12.7)
Cash Flow before dividends (**)	(17.6)	1.5	(19.1)
Dividends paid	(14.4)	0.0	(14.4)
Cash Flow Net	(32.0)	1.5	(33.5)
Net Debt Closing	122.7	125.1
(*) Refer to the cash impact only of the adjustments at EBITDA level (€0.7m out of €2.6m of total 1H23
Adjustments). (**) Investments also consider the portion of capex deriving from the impact of IFRS16, which following the
	Net Debt Opening	90.7	126.6

Outlook and Guidance

Outlook and Guidance Topic Update (i) The Beauty market continues to demonstrate strong resilience, especially in Europe, but also in the United States. Current (ii) Inflation appears to be more predictable, and Western Central Banks might soon consider a more accommodating environment monetary policy than the one implemented up to now. (iii) Chinese consumption is struggling to recover at the expected pace and visibility on the Asian market for the second half of the year remains limited. (i) The excellent results achieved in 1H23 confirmed our previous expectations for a FY23 growth concentrated in the first six months of the current year. (ii) Jun23 Order Book closed once again above €300m, which is a further element that allows us to approach the 2H23 with confidence. If deflation comes, our pricing policy over the last two years has been characterized by an increase in prices of less Intercos than a half compared to the one applied by brands to the end Beauty Market. This will allow our Group to avoid to revise & prices downwards in the future. Updated FY23 Guidance (iii) Looking at the current Order Book composition, compared to last year, we see a different customer and product mix, more concentrated in the mass segment. Also for this reason, we expect an increase of sales in full service in 2H23, with a greater weight of the packaging component. (iv) Having said that, and in consideration of the strong growth recorded over the last twelve months, we expect a second semester of consolidation, with performances in line with last year: in particular, 2H23 net sales are expected to slightly increase compared to 2H22, while 2H23 Adjusted Ebitda to be aligned with the one of 2H22, as a consequence of a different mix of products sold and an higher than previously expected growth of the Hair&Body Business Unit.

Outlook and Guidance - Good order-in-take continues boosted by new projects

Outlook and Guidance – Supply chain recovery allowed to start to reduce order book, progressively decreasing long lead times Total firm order book evolution by business unit (€m) — excluding contract manufacturing business units (e.g. Hair & Body)

Skincare Make Up

P&L and related adjustments

€/mln	1H23	1H22	Delta	Var.%
Net Sales	488.4	367.9	120.4	32.7%
COGS	(387.5)	(291.6)	(95.9)	32.9%
Industrial gross profit	100.9	76.4	24.5	32.1%
% on net sales	20.7%	20.8%
Research & Development and innovation costs	(20.0)	(18.4)	(1.6)	8.7%
Selling expenses	(15.3)	(13.8)	(1.5)	10.5%
General and administrative expenses	(24.4)	(22.1)	(2.3)	10.4%
Other operating income (expenses)	1.7	2.4	(0.7)	(29.5%)
Operating Profit (EBIT)	42.9	24.4	18.5	75.5%
% on net sales	8.8%	6.6%
D&A	(21.9)	(20.7)	(1.2)	5.6%
EBITDA	64.8	45.1	19.6	43.4%
Adjustements (*)	(2.6)	(3.5)	0.9
Adjusted EBITDA	67.4	48.7	18.7	38.5%
% on net sales	13.8%	13.2%
Financial income (expenses)	(7.2)	2.2	(9.4)	n.a.
Profit before taxes (EBT)	35.6	26.6	9.0	34.0%
Income taxes	(10.6)	(8.4)	(2.3)	26.9%
Net income	25.0	18.2	6.8	37.3%
Adjustments (*)	(1.9)	(2.5)	0.7
Adjusted Net income	26.9	20.8	6.1	29.6%

€/mln	1H23	1H22
IPO costs	0.0	(0.6)
Management Long Term Incentive Plan	(1.8)	(1.6)
One-off costs related to re-organizations (mainly personal costs)	(0.5)	(1.0)
Contrubution to the Ukrainan population	0.0	(0.2)
Other minor one-off costs	(0.3)	(0.1)
Adjustments (*) at EBITDA level	(2.6)	(3.5)
Tax impact mainly arising from above adjustments	0.7	1.0
Adjustments (*) at Net Income level	(1.9)	(2.5)

Balance Sheet and Cash Flow

		Delta
		22.3
48.3	46.7	1.6
132.9	132.9	0.0
1.5	1.4	0.1
19.0	17.7	1.3
		2.8
		28.1
196.1	193.7	2.4
156.2	141.1	15.1
(177.9)	(185.1)	7.2
(54.2)	(39.6)	(14.7)
120.2	110.1	10.0
546.7	508.7	38.1
122.7	90.7	32.0
424.1	418.0	6.1
		Delta
		27.0
		(7.2)
		4.2
		(14.4)
		9.6
183.2	207.0	(23.7)
2.6 140.6	(2.6) 159.8	5.2 (19.3)
	30Jun23 236.6 (11.8) 426.6 1H23 40.4 (24.8) (41.4) (14.4) (40.1)	31Dec22 214.3 (14.6) 398.5 1H22 13.4 (17.6) (45.6) 0.0 (49.7)

Definitions

For the purpose of providing information in line with the performance analysis and control parameters of the Group, non-IFRS alternative performance measures are used by management to provide information for a better assessment of the results of operations and the financial position of the Group as described below. Such performance measures should not be interpreted as a substitute for the conventional performance measures established by IFRS. The details of the content of the alternative performance measures not arrived at directly from the financial statements are defined as follows: • EBITDA: is defined as the sum of profit for the year plus income taxes, financial income and expenses and the effects of the valuation of

• investments using the equity method net of equity investments held for financial investment purposes and amortization, depreciation and writedowns.
• Adjusted EBITDA: is given by EBITDA less items of a non-recurring nature, that is, by particularly significant events that are not in the ordinary course of business or that have no effect on cash flows and/or changes in equity.
• Adjusted Net income: is given by Net income less items of a non-recurring nature, that is, by particularly significant events that are not in the ordinary course of business or that have no effect on cash flows and/or changes in equity net of the related tax impacts.
• Net indebtedness (cash) or net financial position/net debt: is given by the sum of current and non-current financial payables net of current and non-current financial receivables, including cash and cash equivalents.
• Order-in-take: indicates the aggregate of legally placed and processed orders by a company during the reporting period.
• Order Book: is the order backlog opened at any one given date.