Interpump Group — Investor Presentation 2017

Feb 14, 2017

Disclaimer

This document has been prepared by Interpump Group S.p.A for use during meetings with investors and financial analysts and is solely for information purposes. The information set out herein has not been verified by an independent audit company. Neither the Company nor any of its subsidiaries, affiliates, branches, representative offices (the "Group"), as well as any of their directors, officers, employees, advisers or agents (the "Group Representatives") accepts any responsibility for/or makes any representation or warranty, express or implied, as to the accuracy, timeliness or completeness of the information set out herein or any other related information regarding the Group, whether written, oral or in visual or electronic form, transmitted or made available.

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Presentation to Analysts and Investors

Table of Contents

FY 2016 Highlights	3
Who We Are	7
International Profile	16
M&A History and 2017 Acquisitions	20
Appendix: History in Numbers	24

€ mn

	FY 2015	FY 2016	Change
SALES	894.9	922.8	+3.1%
EBITDA	180.3	198.5	+10.1%
% on sales	20.1%	21.5%
NPAT (normalized*)	86.3*	94.5	+9.5%
% on sales	9.6%	10.2%
NET DEBT (31/12)
Net Financial Position	255.0	257.3	+2.3 mn
Valuation of Put Options	23.2	42.8	+19.6 mn
TOTAL DEBT	278.2	300.0	+21.8 mn
TREASURY SHARES (31/12)
Number of shares	1,125,912	2,281,752

* Statutory 2015 net income was € 118.3 mn due to a one-off financial income of € 32 mn arising from put options exercised earlier than expected

FY 2016 Highlights by Sector

		SALES		EBITDA
	FY 2015	FY 2016	Change	FY 2015	% on sales	FY 2016	% on sales	Change
HYDRAULICS	560.3	596.8	+6.5%	96.6	17.2%	115.4	19.3%	+19.5%
WATER JETTING	334.7	326.0	-2.6%	83.7	24.9%	83.1	25.4%	-0.7%
TOTAL	895.0	922.8	+3.1%	180.3	20.1%	198.5	21.5%	+10.1%

Sales* in € mn

Acquired business (first 12 months' turnover of acquired companies) Organic business

Financial Ratios

Net Debt / EBITDA (12 M)

Net of treasury stock and including commitmentsfor purchase of investments

Return On Capital Employed (12M)

Operating profit / (consolidated shareholder's equity + net debt)

*without the Cleaning Sector

• •Industrial Cleaning
• •Chemical, Food, Pharma, Cosmetic processing
• •Automotive, Marine, Oil&Gas, Tunneling, Mining, Steel Industry

Main applications are Trucks, Industrial Vehicles, Earth-moving, Agriculture, Construction, Lifting, Machine tools, Tunneling

Diversification by application field

Dealers not included

Competitive Scenario

The Largest Player and Worldwide Leader in the Niche Business of Very High Pressure Plunger Pumps

Competitive Scenario

A fast-growing global player in a huge market with countless opportunities for acquisitions

Main Companies and Brands

February 2017

Main Companies and Brands

February 2017

INTERPUMP HYDRAULICS, Muncie Power Products, PZB, Hydrocar, Takarada

Cylinders

Panni Oleodinamica Contarini Penta, Modenflex

Oil Tanks

American Mobile Power

Distributor for Oceania

Mega Pacific (65%)

WALVOIL Hydrocontrol Galtech M.T.C.

International presence (plants and subsidiaries)

Italy, USA, UK, France, Bulgaria, Brazil, Chile, Peru, China, India, Australia, New Zealand, South Africa, UAE

Italy, USA, Canada, France, India, China, Korea, Australia Italy, France, Germany, Romania, UK, South Africa

Total 2016 sales: € 326 million

Sales by application field

Total 2016 sales: € 597 million

Diversification by sales channel and application field

2016 Total Turnover: Euro 923 Million Dealers not included Final & OEM's 67% Dealers 33% Truck 23% Cleaning 10% Contractors 12% Other Industries 7% Earth Moving 10% Agriculture 6% Construction 8% Lifting 6% Automotive 4% Drilling & Mining 2% Machine Tools 1% Oil & Gas 1% Food & Pharma… Shipyard/Marine… Other 6% Total sales by channel Sales by Application Field

Diversification of our business is the key to our resilience and low overall cyclicality

Geographical breakdown of sales by sector

Geographical breakdown of sales and production (2016: € 923 mn)

Worldwide Direct Presence (2016)

Water Jetting Hydraulics

AREA	PLANTS	EMPLOYEES
ITALY	3	492
REST OF EUROPE	1	353
NORTH AMERICA	2	304
REST OF THE WORLD	2	45
TOTAL	8	1,194

AREA	PLANTS	EMPLOYEES
ITALY	11	2,265
REST OF EUROPE	4	346
NORTH AMERICA	5	481
REST OF THE WORLD	10	844
TOTAL	30	3,936

Focus on emerging markets: a well-balanced presence

Acquisition & Diversification Timeline

WATER JETTING

Applications: from cleaning to countless

Acquisition & Diversification Timeline

HYDRAULICS

Products: from PTOs only to integrated hydraulic kits, systems and services

2017 Acquisitions: Bristol Hose HYDRAULICS

Bristol Hose Ltd. is a supplier of goods and services in the hydraulic hoses and fittings market, headquartered in Bristol, UK.

They operate through 2 sales counters and 9 mobile workshops for on-site 24/7 repair services.

Main Figures	2016 (GBP mn)
SALES	2.25
EBITDA	13%
NET FINANCIAL POSITION	0.42

Total acquisition price, for 100%

GBP 550,000 (in cash)

Part of a micro-acquisition program, aimed at reinforcing direct presence in various markets, while increasing the service component which can now include on-site delivery and repairs

2017 Acquisitions: Inoxpa

Main Figures	2016 (€ mn)
SALES	59.4
EBITDA	11.5 19.3%
NET CASH	14.0
EMPLOYEES	676
Total acquisition price, for 100%

€ 90 million (in cash)

The second and largest step into these fast-growing and highly anti-cyclical markets, Inoxpa brings to Interpump's Water-Jetting sector:

• a major product diversification
• a new, additional growth driver: cross-selling
• further expansion of the international footprint

Inoxpa, headquartered near Girona (Spain), is a wellknown manufacturer of process equipment and flow handling systems for the food, cosmetics and pharmaceutical industries.

The group has a direct presence in 17 countries, with 3 major production centers (Spain, India, Portugal) and 6 engineering centers in Europe and India.

Governance and Stock Performance

Management Team

Fulvio Montipò	Chairman & CEO
Paolo Marinsek	Deputy Chairman & CEO
Carlo Banci	CFO

Shareholders Structure

Interpump Stock Performance

Total return to shareholders since the IPO: 13.15% per year (assuming dividend reinvestment and participation to the '09 capital increase)

February 9, 2016
Share price	18.54
Market Capitalization	€ 2,018 mn
Performance 3 M:	+32.39%
Performance 1 Y:	+76.84%
Performance 2 Y:	+47.26%
Average daily Volume (2017)	245,666

Procurement Costs

IPG has an excellent track record in keeping procurement costs well under control.

Free Cash Flow

Free Cash Flow 12 Months
(euro/million)	2009	2010	2011	2012	2013	2014	2015	2016
Cash Flow from Operations	25.2	54.6	60.8	65.6	65.3	95.8	120.2	138.6
Working Capital	44.4	10.1	(21.8)	(12.3)	(1.7)	(23.7)	(6.6)	(12.8)
Capex	(9.2)	(8.7)	(11.8)	(15.8)	(29.8)	(34.1)	(28.9)	(36.5)
Other	2.7	1.0	3.7	3.6	0.5	0.3	0.5	0.7
Free Cash Flow	63.1	57.0	30.9	38.6	34.3	38.3	85.2	89.9

Return to Shareholders – 1997-2016

From 1st Jan '97 to 31 Dec '16

	Euro/million
Operating cash flow		1,096
Capital expenditures		(346)
Net cash flow before acquisitions and dividends		750
Dividends	(338)
Buy back	(77)	(305)*
Share capital increase	110
Sub-total		445
Acquisitions		(885)
Disposal of investments		226
Change in net financial position		(214)

* Since listing (Dec. 1996), IPG has returned to shareholders about 126% of the IPO capitalization

Appendix

Synthesis of results (Twelve months*)

Euro/million	1996	1997	1998	1999	2000	2001	2002	2003	2004	2005 a	2006 b	2007 c	2008 d	2009 e	2010	2011 f	2012	2013 g	2014	2015	2016
Net Sales	199.6	221.3	283.4	319.3	411.7	426.1	492.9	501.7	531.7	331.6	364.9	432.2	424.5	342.9	424.9	472.3	527.2	556.5	672.0	894.9	922.8
EBITDA	40.7	46.8	61.1	64.9	79.8	81.4	84.5	75.2	77.3	68.0	79.1	94.3	87.0	46.9	74.1	94.7	105.8	105.2	136,1	180.3	198.5
Margin	20.4%	21.2%	21.6%	20.3%	19.4%	19.1%	17.1%	15.0%	14.5%	20.5%	21.7%	21.8%	20.5%	13.7%	17.4%	20.0%	20.1%	18.9%	20.3%	20.1%	21.5%
EBIT	35.5	40.5	52.4	55.1	67.2	67.6	69.2	59.2	60.5	57.4	69.7	82.2	75.7	29.2	54.7	75.7	84.1	79.2	104.4	136.9	153.5
Margin	17.8%	18.3%	18.5%	17.2%	16.3%	15.9%	14.0%	11.8%	11.4%	17.3%	19.1%	19.0%	17.8%	8.5%	12.9%	16.0%	15.9%	14.3%	15.5%	15.3%	16.6%
Net Profit	7.6	13.8	16.6	22.2	19.0	21.4	21.1	14.3	19.7	27.1	41.6	42.9	40.2	14.0	27.4	42.6	53.2	44.1	57.7	118.3	94.5
Margin	3.8%	6.2%	5.9%	6.9%	4.6%	5.0%	4.3%	2.8%	3.7%	8.2%	11.4%	9.9%	9.5%	4.1%	6.4%	9.0%	10.1%	7.9%	8.6%	13.1%	10.2%
Free Cash flow	8.4	9.2	32.1	26.5	42.1	19.4	17.2	15.9	1.0	52.1	37.9	32.0	22.1	63.1	57.0	30.9	38.6	34.3	38.3	85.2	89.9
Net Fin. Debt	43.0	38.8	67.9	139.3	153.2	150.7	145.4	172.3	178.4	115.8	99.9	139.6	200.5	186.5	134.9	121.6	66.1	100.3	178.8	265.1	271.5
(net of treasury stock and including commitments for purchase of investments)
Shareholder's Equity	133.1	143.7	157.1	177.1	162.0	182.8	193.4	173.8	179.9	156.7	155.9	147.1	178.0	242.8	291.5	315.2	396.9	432.9	466.6	622.6	677.5
Debt/Equity	0.32	0.27	0.43	0.79	0.95	0.82	0.75	0.99	0.99	0.74	0.64	0.95	1.13	0.77	0.46	0.39	0.16	0.23	0.38	0.42	0.40

* From 2004 to 2015 figures are prepared in accordance with International Financial Reporting Standards (IFRS). From 1996 to 2003 figures are prepared in accordance with Italian Accounting Standards

• a) With Hammelmann 9 months, without Cleaning Sector.
• b) With Hammelmann 12 months, without Cleaning Sector.
• c) With NLB 11 months.
• d) With Modenflex 5 months, Contarini 2 months, IKO 1 month.
• e) With H.S. Penta 6 months.

f) Without Unielectric and with American Mobile Power 9 Months.

g) With Hydrocontrol Group 8 months.

The Manager in charge of preparing the company's financial reports, Carlo Banci, declares, pursuant to paragraph 2 of Article 154-bis of the Consolidated Law on Finance, that the accounting information contained in this presentation corresponds to the document results, books and accounting records.

S.Ilario d'Enza, February 14, 2016 The Manager in charge of preparing the company's financial reports Carlo Banci