Interpump Group — Investor Presentation 2020

May 13, 2020

First Quarter 2020 Consolidated Results Interpump Group S.p.A.

Table of Contents

Welcome! OurQ1 2020 & FY 2019 Results start on page	2
use an Introduction? See New to the company and could page	7
update on Markets and Diversification Our yearly is on page	15
More information on Growth Strategy Recent M&A and on page	20
Shareholder Information on page You will find	27
in the Appendix Some useful time series are included on page	29

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.

This document may contain forward-looking statements about the Company and/or the Group based on current expectations and opinions developed by the Company, as well as based on current plans, estimates, projections and projects of the Group. These forward-looking statements are subject to significant risks and uncertainties (many of which are outside the control of the Company and/or the Group) which could cause a material difference between forward-looking information and actual future results.

The information set out in this document is provided as of the date indicated herein. Except as required by applicable laws and regulations, the Company assumes no obligation to provide updates of any of the aforesaid forwardlooking statements.

Under no circumstances shall the Group and/or any of the Group Representatives be held liable (for negligence or otherwise) for any loss or damage howsoever arising from any use of this document or its contents or otherwise in connection with the document or the aforesaid forward-looking statements. This document does not constitute an offer to sell or a solicitation to buy or subscribe to Company shares and neither this entire document or a portion of it may constitute a recommendation to effect any transaction or to conclude any legal act of any kind whatsoever.

This document may not be reproduced or distributed, in whole or in part, by any person other than the Company. By viewing and/or accepting a copy of this document, you agree to be bound by the foregoing limitations.

€ mn

	Q1 19	Q120 FY 2018	y/y
Organic growth in sales FX contribution Increase in perimeter			-11.2% +0.3% +11.0%
TOTAL REPORTED SALES	343.6	344.0	+0.1%
EBITDA	78.6	74.3	-5.5%
EBITDA / SALES	22.9%	21.6%
NET INCOME (as reported) Tax rate	45.3 27.9%	33.3 28.0%	-26.4%
NET DEBT	381.6	384.9	+3.3 mn
COMMITMENTS FOR PURCHASE OF SUBSIDIARIES	54.3	61.5	+ 7.2 mn
TREASURY SHARES (as at 31/03)	3,413,489	2,298,506

Quarterly Results by Sector

€ mn

WATER-JETTING	Q120 Q4 18	y/y
Organic growth in sales FX contribution Increase in perimeter		-2.6% +0.8% +0.3%
TOTAL REPORTED SALES	109.0	-1.5%
EBITDA	28.3	-1.5%
EBITDA / SALES	25.8%
HYDRAULICS	Q120 Q4 18	y/y
Organic growth in sales FX contribution Increase in perimeter		-15.3% +0.2% +16.0%
TOTAL REPORTED SALES	234.9	+0.9%
EBITDA	46.1	-7.7%
EBITDA / SALES net of IFRS16 effect, for comparison only	19.6%

€ mn

	FY 18	FY19 FY 2018	y/y
Organic growth in sales FX contribution Increase in perimeter			+1.4% +1.4% +4.2%
TOTAL REPORTED SALES	1,279.2	1,368.6	+7.0%
EBITDA net of IFRS16 effect, for comparison only	288.5	317.9 302.4	n.s. +4.8%
EBITDA / SALES net of IFRS16 effect, for comparison only	22.6%	23.2% 22.1%
EBIT	236.5	247.2	+4.5%
EBIT / SALES	18.5%	18.1%
NET INCOME (as reported) Tax rate NET INCOME (adjusted*) Tax rate	173.9 27.5% 162.5 28.9%	180.6 26.1%	+3.9% +11.2%
* FY18 reported net income included a €11.4 million one-off from recognition	of the GS-Hydro	badwill
NET DEBT net of IFRS16 effect, for comparison only	287.3	370.8 298.4	n.s. +11.0 mn
COMMITMENTS FOR PURCHASE OF SUBSIDIARIES	44.5	54.3	+ 9.8 mn
TREASURY SHARES (as at 31/12)	3,413,489	2,224,739

Sales & EBITDA Trend

€ mn

FINANCIALS

net of Electric Motors (dismissed in 2011) for consistency with current business

FINANCIALS Financial Ratios

Prudent debt policy and satisfactory return on capital employed

Net Debt / EBITDA (12 M)

Net of treasury stock (at book value) and including commitments for purchase of investments

Return On Capital Employed (12M)

Interpump Group

an Italy-based, international industrial manufacturing group

Two business sectors: and

• World leader in high-pressure plunger piston pumps (historical core business)
• Also included in this sector: flow handling components for food, cosmetic and pharmaceutical industry

WATER-JETTING HYDRAULICS

• Wide range of components for mobile and non-mobile hydraulics: PTOs, cylinders, gear pumps, valves, hoses, fittings…
• Also included in this sector: reduction gears, hoses, fittings and piping systems for nonhydraulic applications

STOCK MARKET

• Public company (~75% free float) listed at the Milan Stock Exchange since 1996 (ticker: IP.MI)
• Unique and successful growth story complementing organic growth with numerous bolt-on acquisitions
• Among the largest market caps in the STAR segment
• Stock is eligible for PIRs (government-sponsored saving investment plans for Italian households with significant tax advantages)

Interpump's distinctive features

WATER JETTING		Business sector overview
		34% of Group sales and 41% of EBITDA in 2019
		HIGH PRESSURE PUMPS, DEVICES AND SYSTEMS	FLOW HANDLING COMPONENTS FOR FOOD, COSMETICS & PHARMA
DESCRIPTION OF PRODUCTS	8888 8888	Piston pumps from 1 to 2,000 hP (0.7 to 1,500 KW) used in high-pressure applications, up to 6,000 bar (87,000 psi) Standard or custom design Pump-based turnkey systems and assemblies	Stainless steel agitators, mixers, manifolds, tanks, cleaning in-place systems, heat treatment, low-pressure pumps (lobe, progressive cavity, centrifugal) high-pressure homogenizers
ADDRESSABLE MARKET (est.)	€	€ 1 bn / yr	€ 9 bn / yr
MARKET FEATURES		High barriers to entry due to limited niche size High fragmentation: smaller companies, often very vertically specialized, or non-strategic products from large pump manufacturers	Extreme geographic & product diversification: size not necessarily an advantage
MARKET GROWTH DRIVERS		New applications for high-pressure technology continuously developed across multiple industries	Development & urbanization: shift towards processed food Nutritional awareness: new demand for enhanced ingredients/processing
ACQUISITION OPPORTUNITIES		Limited	Plentiful
INTERPUMP COMPETITIVE ADVANTAGES		Largest player in its niche Top-of-the-market product performance Premium positioning due to history and reputation After-sales revenues (~1/3 of sector total)	Hygienically sensitive applications require the same skills needed at even higher levels for high-pressure pumps: sophisticated flow design, high-precision metal machining & surface treatments Focus on high-margin components

WATER

JETTING High-pressure application examples

FOOD, COSMETICS, PHARMACEUTICAL in addition to flow handling components High-pressure homogenizers Water-jet food cutting, slicing, meat separation High-pressure sterilization

CONSTRUCTION Hydro-demolition * Surface preparation * Renewal of armored concrete infrastructures*

TRUCKS Lightweight high pressure pumps for sewer trucks Other utility vehicles

INDUSTRY Machine drilling & cutting* Pulp & paper Intertwining of fibers in non-vowen textiles production Overspray removal from painting booth grids

STEEL / ALUMINUM Descaling of steel bars* Cleaning of tanks & vessels used in aluminum processing *

CLEANING Mid- to high-power professional & industrial cleaning* Car washing systems

Airport tarmacs * Fish-farming nets *

AUTOMOTIVE

Deburring of common-rail engine heads* Cutting of bodywork and other materials Cleanup of welded seals

MARINE / SHIPYARDS Water-blasting paint removal* Hull cleaning * Fuel pumps for methanol-converted marine engines

WATER PROCESSING Misting Reverse-osmosis desalination

CONTRACTORS

Service companies who buy or rent general-purpose highpressure systems and offer various industrial cleaning and maintenance services to third parties across different industries (typical of the U.S. market)

OIL & GAS

An asterisk (* ) indicates applications where Interpump also supplies complete turnkey systems

WATER

JETTING Main products, companies, brands & websites

Total employees as at 31 March: 1,895

Business sector overview

66% of Group sales and 59% of EBITDA in 2019

HYDRAULICS

DESCRIPTION OF PRODUCTS 8888 8888	Power Take-Offs, Cylinders, Hydraulic motors and gear pumps, Valves (including Directional Control Valves). Rubber hoses, flexible metal hoses, rigid pipes, pipe system design and connection flanges (also for non-hydraulics applications) Linear, Orthogonal and Planetary Reduction Gears for lightweight to very large-scale applications
€ ADDRESSABLE MARKET (est.)	> € 50 bn / yr
 MARKET FEATURES	Large and efficient, no room for premium pricing Large share of smaller and/or very specialized players
 MARKET GROWTH DRIVERS	Long-term growth proportional to world GDP, with strong YoY volatility. Very few examples of new or obsolete applications
ACQUISITION OPPORTUNITIES	Countless one-country or one-product companies that could immediately benefit from becoming part of a larger, international group
INTERPUMP COMPETITIVE ADVANTAGES	Product range and geographical production footprint allow Interpump to supply the largest OEMs in earth-moving, trucks, agriculture, lifting and handling machinery Diversification reduces YoY volatility; flexibility helps making the most from every market phase. Enlargement of product range through M&A increases visibility and creates cross-selling opportunities Manufacturing of key components such as Directional Control Valves ensures sticky and long-lasting business relationships

HYDRAULICS Application examples

EARTH-MOVING Excavators and mini-excavators Backhoe loaders Skid-steer loaders

TRUCK OUTFITTERS

Tipping trucks Trash collection - Sewer cleaning Firefighting - Snow plowing Towing - Car Carriers Crane trucks

TRUCK MANUFACTURERS Factory-fitted PTOs

AGRICULTURE Farm tractors Front loaders Harvesting machines

CONSTRUCTION Concrete mixing Telescopic handlers Conditioning/refrigeration/ventilation

INDUSTRIAL Machine tools Hydraulic power packs Automated assembly lines

LIFTING Mobile and fixed cranes Elevators Forklifts Conveyor belts

DRILLING / TUNNELING Tunnel-boring machines

HYDRAULICS Main products, companies, brands & websites

March 2020 – Total employees: 5,546

International presence (plants and subsidiaries)

Italy, USA, UK, France, Spain, Bulgaria, Slovakia, Mexico, 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, Sweden, Denmark, Austria, Poland, Spain, Netherlands, USA, China, Korea, Singapore, Brazil

Diversified across every dimension

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

Both divisions have moved from the initial 100% concentration in one sector to a wide range of applications across different industries Hydraulics: ongoing enlargement of product range through acquisitions. Water-Jetting: expansion from the historical niche of high-pressure pumps into the wider world of fluid handling Optimal customer diversification. Largest account represents 1.4% of sales We sell our products all over the world, either through our increasing direct presence, or through distributors Most goods sold are produced locally or at least in the same currency. Our FX impact is mostly relative to the translation of financial statements. No currency hedging is necessary Stainless steel, aluminum, brass, cast iron, copper, and countless other alloys. Smart, forwardlooking buying policy keeps us safe from price volatility All classes of customers are serviced directly, through a local subsidiary, or through a distributor according to their size and importance: from the world's largest OEMs to small retail customers

Diversification by application field

2019 Total Turnover: Euro 1,369 million

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

Diversification is a never-ending journey

Significant reduction of cyclicality and correlation achieved over the past decade

International Profile

Geographical breakdown of sales and costs (2019)

International Profile

Focus on emerging markets: a well-balanced presence

Water-Jetting Hydraulics

40+ companies acquired since the IPO in 1996 representing roughly 2/3 of each year's growth

Different purposes for acquisitions: completing the product range, reinforcing competitive positioning, enhancing distribution

Bolt-on acquisitions: no disruption in activity, immediate synergies

Soft integration policy: existing management, brands, IT systems are preserved

Reasonable multiples paid, based on EV/EBITDA ratio

Remarkable increase in EBITDA margins of acquired companies

Frequent acquisition of a control stake with agreements for acquiring the minority interest in a few years

Use of Interpump treasury shares as full or partial payment for some acquisitions

Thanks to Interpump's approach to M&A, the cost of acquisitions in terms of capital employed is comparable to the one of organic growth...

WATER JETTING

Acquisition & Diversification Timeline

Applications: from cleaning to countless

HYDRAULICS Acquisition & Diversification Timeline

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

2020	Transtecno reduction gears
2019	Hydra Dyne Tech rotary swivels and cylinders Reggiana Riduttori planetary reduction gears
2018	GS-Hydro World leader in non-welded piping systems
2017	Bristol Hose retail & on-site quick service Fluid System 80 hydraulic power packs
2016	Endeavour crimping machines - Tubiflex flexible metal hoses Tekno Tubi shaped rigid pipes - Mega Pacific distribution
2015	Walvoil Valves & DCVs Osper PTOs and cylinders
2013- 2014	Hydrocontrol directional Control Valves (DCV) IMM: flexible rubber hoses and fittings
2011- 2012	Galtech, MTC valves - Takarada PTOs American Mobile Power hydraulic tanks
2008- 2009	Contarini, Modenflex, Cover, Panni, Penta hydraulic cylinders
1999- 2001	Muncie: PTOs Hydroven hydraulic power packs
1997-1998	PZB & Hydrocar, Italian manufacturers of power take-offs (PTO).

HYDRAULICS 2019 Acquisitions: Hydra Dyne Tech

Acquired March 2019

• Headquartered in Ontario, Canada
• Manufacturer of best-in-class rotary manifolds, valves and hydraulic cylinders, using the proprietary patented LocSealTM technology. Rotary manifolds represent an addition to Interpump's product range.
• Products designed and customized according to the needs of some of the largest OEMs in the agricultural machinery, earth moving, and forestry sectors.
• Significant expansion of Interpump's Canadian and North-American business
• New application sector: forestry machinery

FY2018 Data (year ending August 31)
SALES	CAD 36 mn
EBITDA	CAD 6.1 mn
NET DEBT	CAD 7.2 mn
PRICE PAID (for a 75% stake)	EUR 15.2 mn

HYDRAULICS 2019 Acquisitions: Reggiana Riduttori

Acquired October 2019

A world leader in design and manufacturing of reduction gears with the most versatile, lightweight and high-performance technology

• Headquartered in Reggio Emilia, Italy; subsidiaries in Australia, Brasil, Canada, China, France, India, the Netherlands, Slovakia, USA
• Countless applications in heavy industry, lifting, marine, agriculture, forestry, mining, wind energy
• Extends and complements Interpump's activity in power transmission systems (previously focused on truck PTOs)
• Excellent overlap of international presence and sector mix allow for strong technical and sales synergies with all other subsidiaries of Interpump

FY2018 Data
SALES	EUR 88 mn
EBITDA	EUR 17.2 mn (20% of sales)
ENTERPRISE VALUE PAID (100% stake)	EUR 125 mn o/w EUR 109 mn in treasury shares
Plus net cash acquired at cost (~EUR 15 mn)

Acquired January 2020

Designer and manufacturer of reduction gears and gear motors for light to midpower applications with top-class margins

One step further towards our goal of creating an industrial hub of international relevance in reduction gears

• Headquartered in Bologna, Italy; subsidiaries in China, Netherlands, Spain, USA, Mexico
• Broad range of applications including specific product lines for poultry farming, car wash, and renewable energies
• Unique modular approach to design and distribution reduce the needs for large inventories simplifying the activity of dealers

CALL	0

FY2018 Data
SALES	EUR 45 mn
EBITDA	EUR 8.7 mn (19% of sales)
NET CASH	> EUR 2 mn
TOTAL PRICE PAID (for a 60% stake)	EUR 22 mn + 488,533 Interpump treasury shares

Shareholders, Stock Performance, Analyst Coverage

Updated 11/05/2020

Analyst Coverage

Alantra	Simone Pozzi
Banca Akros	Paola Saglietti
Equita SIM	Domenico Ghilotti
Exane BNP Paribas	Michele Baldelli
Intermonte	Carlo Maritano
Intesa Sanpaolo	Bruno Permutti
Kepler Cheuvreux	Matteo Bonizzoni
Mediobanca	Alessandro Tortora

Interpump Stock Performance

Total return to shareholders since the IPO: 13.2% per year (assuming dividend reinvestment and participation to the '09 capital increase)

Share price	27.42
Market Capitalization	€ 3.0 bn
Performance 3 M:	-1.9%
Performance 1 Y:	-10.2%
Performance 2 Y:	-6.4%

Corporate Offices

as of 30 April 2020

Board of Directors	= independent
Fulvio Montipò	Chairman and CEO
Giovanni Tamburi	Deputy Chairman
Marcello Margotto	Lead Independent Director
Angelo Busani	Minority Director
Antonia Di Bella
Victor Gottardi
Fabio Marasi
Federica Menichetti
Stefania Petruccioli
Paola Tagliavini

Board of Statutory Auditors

Anna Maria Allievi Chair

Roberta De Simone

Mario Tagliaferri

Chief Financial Officer

Carlo Banci

Independent Auditors

EY S.p.A.

Head of Investor Relations

Luca Mirabelli

Synthesis of results

Euro/million	2008	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2019 ex-IFRS16
Net Sales	424.5	342.9	424.9	472.3	527.2	556.5	672.0	894.9	922.8	1,086.6	1,279.2	1,368.6
EBITDA	87.0	46.9	74.1	94.7	105.8	105.2	136,1	180.3	198.5	248.6	288.5	317.9 302.4
Margin	20.5%	13.7%	17.4%	20.0%	20.1%	18.9%	20.3%	20.1%	21.5%	22.9%	22.6%	23.2%	22.1%
EBIT	75.7	29.2	54.7	75.7	84.1	79.2	104.4	136.9	153.5	198.9	236.5	247.2
Margin	17.8%	8.5%	12.9%	16.0%	15.9%	14.3%	15.5%	15.3%	16.6%	18.3%	18.5%	18.1%
Net Profit	40.2	14.0	27.4	42.6	53.2	44.1	57.7	118.3	94.5	135.7	173.2	180.6
Margin	9.5%	4.1%	6.4%	9.0%	10.1%	7.9%	8.6%	13.1%	10.2%	12.5%	13.5%	13.2%
Free Cash flow	22.1	63.1	57.0	30.9	38.6	34.3	38.3	85.2	89.9	93.6	82.2	124.8
Net Fin. Debt	200.5	186.5	134.9	121.6	66.1	100.3	178.8	265.1	271.5	304.3	260.1	370.7	298.3
(net of treasury stock and including commitments for purchase of investments)
Shareholder's Equity	178.0	242.8	291.5	315.2	396.9	432.9	466.6	622.6	677.5	764.7	868.2	1,055.2
Debt/Equity	1.13	0.77	0.46	0.39	0.16	0.23	0.38	0.42	0.40	0.40	0.30	0.35	0.28

Continuing operations only

Appendix

Free Cash Flow (12 Months)
(euro/million)	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019
Cash Flow from Operations	25.2	54.6	60.8	65.6	65.3	95.8	120.2	138.0	172.4	209.8	233.4
Adjustment for leases paid (IFRS16)
Change in Trade Working Capital	44.4	10.1	(21.8)	(12.3)	(1.7)	(23.7)	(6.6)	(12.2)	(30.8)	(60.9)	(20.9)
Capex	(9.2)	(8.7)	(11.8)	(15.8)	(29.8)	(34.1)	(28.9)	(36.5)	(47.8)	(68.2)	(73.7)
Other	2.7	1.0	3.7	3.6	0.5	0.3	0.5	0.7	(0.3)	1.5	1.3
Free Cash Flow	63.1	57.0	30.9	38.6	34.3	38.3	85.2	89.9	93.6	82.2	124.8

Procurement costs are well under control and do not reflect increases in raw material prices Long-term trend of purchases on sales reflects increases in efficiency and acquisition of more / less material-intensive businesses

The Manager in charge of preparing the company's financial reports 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, May 13, 2020

Carlo Banci

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