Landi Renzo

Earnings Release • Nov 14, 2017

9M 2017 FINANCIAL RESULTS

Stefano Landi Chairman

Cristiano Musi CEO

M€	2017 9M	2016 9M	Delta M€	Delta %	• Q3 Revenues in line with first
Revenues	149,5	131,7	17,8	13,5%	half, driven primarily by the
EBITDA Adj.	9,8	2,6	7,2	N/A	Automotive sector (both in the
% on Revenues	6,6%	2,0%			OEM and After-market sales
EBITDA	7,0	-0,8	7,8	N/A	channels)
% on Revenues	4,7%	-0,6%
EBIT Adj.	-1,7	-9,5	7,8	82,1%	turnover increase and from fixed
% on Revenues	-1,1%	-7,2%			costs reduction (delta with EBITDA due to ongoing
EBIT	-6,4	-13,0	6,6	50,8%	restructuring cost)
% on Revenues	-4,3%	-9,9%
Financials	-4,2	-3,5	-0,7	20,0%
EBT	-10,6	-16,5	5,9	35,8%
Taxes	-0,7	-1,3	0,6	N/A
Net Income	-11,3	-17,8	6,6	37,0%
% on Revenues	-7,5%	-13,5%

Highlights

• Q3 Revenues in line with first half, driven primarily by the Automotive sector (both in the OEM and After-market sales channels)
• Adjusted EBITDA benefits from turnover increase and from fixed costs reduction (delta with EBITDA due to ongoing restructuring cost)

Revenues breakdown

AUTOMOTIVE SECTOR

GAS DISTRIBUTION AND COMPRESSED NATURAL GAS SECTOR

Profit & Loss breakdown

M€, %

M€, %
Profit & Loss	Automotive Sector	Gas Distrib. and Compr.Nat.Gas Sector	Sound Sector	2017 9M
Revenues	123,0	17,1	9,5	149,5	123,0
EBITDA Adj.	9,6	-0,7	0,9	9,8
% on Revenues	7,8%	-4,2%	9,9%	6,6%
EBITDA	6,8	-0,7	0,9	7,0
% on Revenues	5,6%	-4,2%	9,9%	4,7%
EBIT Adj.	-0,4	-1,6	0,4	-1,7
% on Revenues	-0,4%	-9,4%	3,8%	-1,1%		-0,7
EBIT	-5,1	-1,6	0,4	-6,4
% on Revenues • Automotive Sector –	-4,2%	-9,4% excluding net of extraordinary costs and loss on labs sales to AVL improves almost to breakeven	3,8%	-4,3%	0,4
• turnover up to 7M€		Gas Distribution and Compressed Natural Gas Sector – with positive EBITDA		in Q3	4,7 -5,1
• Sound Sector -		no significant impact

• loss on labs sales to AVL improves almost to breakeven

Profit & Loss breakdown Actual 9M 2017 vs 9M 2016

M€, %
Profit & Loss	Automotive Sector	Gas Distrib. and Compr.Nat.Gas Sector	Sound Sector	2017 9M	Highlights
Revenues	123,0	17,1	9,5	149,5	• Automotive Sector: market
EBITDA Adj.	9,6	-0,7	0,9	9,8
% on Revenues	7,8%	-4,2%	9,9%	6,6%	growth and market driven
EBITDA	6,8	-0,7	0,9	7,0	approach positively impact on
% on Revenues	5,6%	-4,2%	9,9%	4,7%	the turnover and EBITDA
		Gas Distrib. and			• Gas Distribution and Compressed Natural Gas Sector slight overperformance, with improvement at EBITDA
Profit & Loss	Automotive Sector	Compr.Nat.Gas Sector	Sound Sector	2016 9M	level compared to 2016
Revenues	105,8	16,6	9,4	131,7	• Sound Sector, a non-core
EBITDA Adj.	3,5	-1,5	0,6	2,6	business, revenues and EBITDA
% on Revenues	3,3%	-9,2%	6,4%	2,0%	in line with expectations
EBITDA	0,1	-1,5	0,6	-0,8
% on Revenues	0,1%	-9,2%	6,4%	-0,6%

M 9	Profit & Loss	Automotive Sector	Compr.Nat.Gas Sector	Sound Sector	2017 9M	Highlights
7						• Automotive Sector: market
						growth and market driven
						• Gas Distribution and
			Gas Distrib. and	Sound		Compressed Natural Gas
M	Profit & Loss	Automotive Sector	Compr.Nat.Gas	Sector	2016 9M
			Sector			• Sound Sector, a non-core
Revenues		105,8	16,6	9,4	131,7
EBITDA Adj. % on Revenues		3,5 3,3%	-1,5 -9,2%	0,6 6,4%	2,6 2,0%
9 6 1 0 EBITDA 2		0,1	-1,5	0,6	-0,8

• Automotive Sector: market growth and market driven approach positively impact on the turnover and EBITDA
• Gas Distribution and Compressed Natural Gas Sector slight overperformance, with improvement at EBITDA level compared to 2016 Sector 2016 9M

• Sound Sector, a non-core business, revenues and EBITDA in line with expectations

• Volume effect primarily driven by sales increase in the Automotive Sector

• Price / mix effect primarily due to a different channel distribution mix in the Automotive Sector and an improvement in SAFE Gross Margin
• Overhead and Payroll benefits due to a continuous fixed costs reduction

Balance Sheet Overview

M€, %

Balance Sheet Overview M€, %
Balance Sheet	2017 9M	FY 2016	2016 9M	Highlights
Intangible Assets	55,3	58,9	58,9
Tangible Assets	18,2	30,5	31,8	assets management
Other non-current Assets	11,9	7,6	7,4
Fixed Capital	85,4	97,0	98,1	Capital, despite increasing
% on Revenues	42,3%	48,5%	48,8%	stock due to production
Receivables	37,3	37,6	37,9	footprint implementation
Inventory	53,1	51,2	62,3	("continuity stock" as part of
Paybles	-57,6	-53,1	-48,4	Excellence project)
Net Working Capital	32,8	35,6	51,8
% on Revenues	16,2%	19,4%	25,8%
Other current assets/liabilities	-1,0	0,8	2,5	been impacted by a positive
Working Capital	31,8	36,4	54,3
% on Revenues	15,7%	19,8%	27,0%
TFR and other Funds	-10,2	-12,6	-12,3
Invested Capital	107,0	120,8	140,2
% on Revenues	52,9%	65,6%	69,7%
Shareholder's Equity	41,9	45,1	53,1
Net Financial Position	65,0	75,7	87,1
Total Sources	107,0	120,8	140,2

• assets management
• Disciplined approach to • Improvement in Net Working Capital, despite increasing stock due to production footprint implementation ("continuity stock" as part of Excellence project) • Net Financial Position has
• been impacted by a positive free cash flow

Working Capital evolution

Highlights

• Since July, a «continuity stock» has been prepared to ensure the service level agreed with Clients, even during the restructuring phase • It is about 2,8 M€ in extra-• The working capital • Net of the «continuity stock»
• * inventory off-set by equivalent extra-payable (see "normalized" scenario)
• incidence on revenues has decreased from 28,3% to 15,7% in the last 12 months
• 30.09 effect, indicators continue to improve since the beginning of 2017, expected to slightly decrease by end of 2017

Net financial position evolution

16,5	Cash liquidity (+)	14,0
-75,7	NFP (*)	-65,0

* For recently financial structure optimization operation signed with banks, loans have been reclassified from short to long-term (excluding the first portion expiring on June 30, 2018)

Since January 2017 LRG is undergoing a complete reorganization, to restore profitability and reach a leading position in the market

End of Dec. 2016		The Group appointed Mr. Cristiano Musi as CEO Elect
Jan. 2017		The Group launched a new organization structure for the "Automotive Business"
Feb. 2017		The Group launched a structured and extensive turnaround program with a top tier consulting company to improve the operational efficiency, redefine its production footprint, and streamline R&D activities to recover the marginality on the core business
Mar. 2017		The Group successfully renegotiated the debt with banks and bondholders, and Mr. Landi, the major shareholder, injected 8,9 MEur of new capital in the company to sustain its growth
Apr. 2017		Landi Renzo-AVL signed the agreement for the sales of a company branch and for the cooperation on R&D strategic projects on CNG, LNG and Hydrogen, that will strength innovation
Sep. 2017		The Group defined a new 2018 – 2022 strategic plan, with the main goal to identify the proper competitive positioning and a set of actions to sustain the revenues performance in the Automotive and Gas distribution business
Oct. 2017		The Group appointed Mr. Ferrero, Former FCA Group Executive as VP Strategic Development and Group CTO, with the aim to sustain the long term relaunch of the Group
		The Group signed the agreement to sell 18 Sound to finance the growth and finance new product development in the automotive business
Nov. 2017		3Q results show EBITDA adj at 9,8M€, more than 3 times 2016
		New projects in the automotive business both in AM (new ECU) and OEM (project for HD)
		New organization implemented to start the relaunch phase
		New BP for US development and India OEM market

LRG is entering the market of CNG Systems for Heavy Duty EU VI Application • Greenhouse gas reduction and air quality improvement around urban centers / on motorways are becoming • Consequently, the new legislations for emissions and for CO2 for Passenger Cars but also for Medium and Heavy Duty applications; for example, by 2020 the current Eu VI • CNG turns to be a very attractive solution for trucks and buses. All primary vehicle manufacturers are

more and more relevant

• reduction are becoming more stringent not only Heavy-Duty legislation will be introduced also in countries like China and India Market context
• developing specifically designed propulsion systems for CNG
• LRG aims to support main OEMs delivering a CNG complete system for Medium and Heavy Duty vehicles, also leveraging on internal competences on single components such as Tanks, CNG valves, Pressure Reducers, ECU and injectors LRG
• A new line of components will be studied to match different Customers' requirements HD
• First project addresses Heavy Duty Engine (displacement more than 12.0 liters, Diesel derived), with an SOP planned by mid 2020 Project
• 3 Customers have already expressed their interest in the system and/or single components

LRG 2018 – 2022 Strategic Plan has identified three Centre of Excellence in the Group global manufacturing footprint …

… included in 2022 Strategic

the LRG 2018 – • LRG 2018 – 2022 Strategic Plan _ presented in September _ has disclosed long term view for all the Group identifying Reggio Emilia, with the next shut down of Lovato production plant, the Centre of Excellence for LRG core products as injectors, rails and ECUs ¹ Reggio Emilia – CoE for Injector, ECU, Rail ² Poland – CoE for LPG Mech Components and OEM products ³ Asia (India and Iran) – CoE for CNG Mech Components

Plan

… with Reggio implementation to start from now on inspired to

• World class manufacturing is a mindset based on the continuous improvement approach
• Emilia CoE in cost • LRG Manufacturing CoE strategy is mainly focused on
• tolerance towards defects
• WCM principles mechanical failure

LRG Manufacturing Implementation Strategy

• • o people as fundamental asset
• CoE o exploitation of the contribution of teamwork and of each manufacturing person
• o experience and way of working sharing
• o essential rigorousness of continuous principles adoption and related respect

… starting from piloting Reggio Emilia CoE design & implementation that will transform manufacturing execution and governance at global level

People	• Develop People Training o Coaching o Empowering people for proactivity and self learn o Establish a manufacturing environment where the o	New LRG's CoEs are definitely based on: • Structured processes
Processes	people find the right conditions to express his own talents • Develop new Manufacturing Processes Standardize and align methods and tools across all o LRG plants Transfer knowledge sharing best practices o	that leverage consolidated manufacturing excellence approaches setting daily way of working towards the continuous improvement
Organization	Transparent performance evaluation o • Develop new Manufacturing Organization and Governance Promote people integration o Keep "world class" community alive at global level o Design the profiles and responsibilities to make real o	• Leveraging of LRG people that want to through its competencies and its willingness make LRG manufacturing a reference point for the market

14

Landi Renzo - Company profile (13/11/2017)

BOARD OF DIRECTORS

Stefano Landi – Chairman Giovannina Domenichini – Honorary Chairman Cristiano Musi - CEO Angelo Iori – Director Silvia Landi - Director Anton Karl – Independent Director

TOP MANAGERS INVESTOR RELATIONS

Investor Relations Contacts: Pierpaolo Marziali Tel: +39 0522 9433 E-mail: ir@landi.it www.landirenzogroup.com

SHAREHOLDING SHARE INFORMATION

N. of shares outstanding: 112.500.000 FTSE Italia STAR

CONSOLIDATED P&L

CONSOLIDATED P&L
(thousands of Euro)
INCOME STATEMENT	30/09/2017	30/09/2016
Revenues from sales and services	149,118	131,539
Revenues from sales and services - related parties	391	196
Other revenue and income	490	792
Cost of raw materials, consumables and goods and change in inventories	-71,446	-63,459
Costs for services and use of third party assets	-37,496	-35,905
Costs for services and use of third party assets - related parties	-2,301	-2,407
Personnel cost	-29,544	-27,456
Provision, provision for bad debts and other operating expenses	-2,165	-4,148
Gross Operating Profit	7,047	-848
Amortization, depreciation and impairment losses	-11,512	-12,137
Loss from equity investments	-1,919	0
Net Operating Profit	-6,384	-12,985
Financial income	67	81
Financial expenses	-3,295	-3,914
Exchange gains (losses)	-989	400
Gains (losses) on equity investments valued using the equity method	37	-75
Profit (Loss) before tax	-10,564	-16,493
Current and deferred taxes	-712	-1,334
Net Profit (loss) for the Group and minority interests, including:	-11,276	-17,827
Minority interests	-223	-293
Net Profit (Loss) for the Group	-11,053	-17,534
Basic earnings (loss) per share (calculated on 112,500,000 shares)	-0.0982	-0.1559
Diluted earnings (loss) per share	-0.0982	-0.1559

CONSOLIDATED BALANCE SHEET

CONSOLIDATED BALANCE SHEET
(thousands of Euro)
ASSETS	30/09/2017	31/12/2016	30/09/2016
Non-current assets
Land, property, plant and equipment	18,236	30,500	31,788
Development expenditure	6,580	8,420	7,871
Goodw ill	30,094	30,094	30,094
Other intangible assets w ith finite useful lives	18,623	20,359	20,922
Equity investments consolidated using the equity method	80	43	34
Other non-current financial assets	461	664	720
Other non-current assets	4,560	0	0
Deferred tax assets	6,754	6,887	6,693
Total non-current assets	85,388	96,967	98,122
Current assets Trade receivables	35,680	35,553	35,522
Trade receivables - related parties	1,652	1,998	2,389
Inventories	51,953	49,872	59,283
Contract w orks in progress	1,163	1,281	2,979
Other receivables and current assets	10,724	10,082	12,708
Cash and cash equivalents	14,005	16,484	12,616
Total current assets	115,177	115,270	125,497
TOTAL ASSETS	200,565	212,237	223,619

CONSOLIDATED BALANCE SHEET

Profit (loss) of the period Total equity attributable to the Group Minority interests	-11,053 42,407 -496	-25,245 45,405 -323	-17,534 52,930
TOTAL EQUITY	41,911	45,082	157 53,087
Non-current liabilities
Non-current bank loans	31,284	18,687	21,579
Other non-current financial liabilities	31,128	22,812	26,363
Provisions for risks and charges	6,861	8,973	8,565
Employee defined benefit plans	2,895	3,124	3,313
Deferred tax liabilities	451	514	375
Total non-current liabilities	72,619	54,110	60,195
Current liabilities
Bank overdrafts and short-term loans	15,029	40,662	45,119
Other current financial liabilities	1,604	10,039	6,620
Trade payables	52,902	48,919	44,695
Trade payables - related parties	4,740	4,171	3,705
Tax liabilities	1,986	2,604	1,737
Other current liabilities	9,774	6,650	8,461
Total current liabilities	86,035	113,045	110,337
TOTAL EQUITY AND LIABILITIES	200,565	212,237	223,619

Disclaimer

This presentation has been prepared by Landi Renzo S.p.A. for information purposes only and for use in presentations of the Group's results and strategies. For further details on the Landi Renzo Group, reference should be made to publicly available information, including the Quarterly Reports and the Annual Reports. Statements contained in this presentation, particularly the ones regarding any Landi Renzo possible or assumed future performance, are or may be forward looking statements and in this respect they involve some risks and uncertainties. Any reference to past performance of the Landi Renzo shall not be taken as an indication of future performance.

This document does not constitute an offer or invitation to purchase or subscribe for any shares, for any other financial instruments and no part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. By attending the presentation you agree to be bound by the foregoing terms.