Landi Renzo

Earnings Release • May 11, 2017

Q1 2017 FINANCIAL RESULTS

0

Stefano Landi Chairman

Cristiano Musi CEO

Q1 2017 Profit & Loss Highlights

M€	Q1 2017	Q1 2016	Delta M€	Delta %	• Revenues have increased
Revenues	46,8	41,4	5,4	12,9%	primarily driven by the
EBITDA Adj.	2,2	0,4	1,8	N/A
% on Revenues	4,7%	0,9%			and After-market segments)
EBITDA	1,7	0,4	1,4	N/A	• The EBITDA adj. has benefited
% on Revenues	3,7%	0,9%			from the Revenues increase
EBIT	-2,3	-3,8	1,5	39,8%	(delta with EBITDA due to ongoing restructuring cost)
% on Revenues	-4,8%	-9,1%
Financials	-1,0	-1,5	0,5	-34,8%
	-3,2	-5,2	2,0	38,4%	activities on significant costs
		0,9	-0,6	-72,2%	optimization
EBT Taxes	0,3		1,3	31,4%

Highlights

• Revenues have increased primarily driven by the Automotive business (both OEM and After-market segments)
• The EBITDA adj. has benefited from the Revenues increase (delta with EBITDA due to ongoing restructuring cost)
• EBITDA result does not benefit yet from the planned and ongoing activities on significant costs optimization
• Financial charges have decreased primarily due to lower bank debts

Revenues breakdown

• OEM segment (Automotive): revenues increase in rest of Europe driven by Euro VI engines
• After Market segment (Automotive): business growth driven by Italy and Rest of the World

Profit & Loss	breakdown
M€, %
Profit & Loss	Gas Sector Auto	Gas Sector Distribution	Other Business	LR GROUP Q1 2017	40,4
Revenues	40,4	2,5	3,8	46,8
EBITDA Adj.	3,0	-0,9	0,0	2,2
% on Revenues	7,4%	-36,0%	N/A	4,7%
EBITDA % on Revenues	2,6 6,4%	-0,9 -36,0%	0,0 N/A	1,7 3,7%
EBIT	-0,9	-1,2	-0,1	-2,3	3,0
% on Revenues	-2,2%	-48,0%	-2,6%	-4,8%
• Gas Sector -		Auto EBIT net of LABS sales to AVL improves almost
to breakeven (EBIT excluding Labs to -0,2 M€)
• Gas Sector -		Distribution negatively impacted by turnover reduction
• Other business do not impact significantly
					-0,9

• to breakeven (EBIT excluding Labs to -0,2 M€)

Profit & Loss breakdown Actual Q1 2017 vs Q1 2016

M€, %
Profit & Loss	Gas Sector Auto	Gas Sector Distribution	Other Business	LR GROUP Q1 2017	Highlights
Revenues EBITDA Adj. % on Revenues	40,4 3,0 7,4%	2,5 -0,9 -36,0%	3,8 0,0 N/A	46,8 2,2 4,7%	improvement of the performance and benefits from the different actions already implemented by the new
EBITDA % on Revenues	2,6 6,4%	-0,9 -36,0%	0,0 N/A	1,7 3,7%	Management team. Strong market driven approach positively impacts on turnover, with additional real benefits from cost optimizations expected by the Q4 2017
Profit & Loss	Gas Sector Auto	Gas Sector Distribution	Other Business	LR GROUP Q1 2016	addressed by the Management team
Revenues EBITDA Adj. % on Revenues	33,9 0,9 2,7%	3,7 -0,7 -18,9%	3,8 0,2 5,3%	41,4 0,4 0,9%	since Q2. Already appointed in SAFE a new Managing Director (Luciano
EBITDA % on Revenues	0,9 2,7%	-0,7 -18,9%	0,2 5,3%	0,4 0,9%	Dell'Omo) with more than 25 years experience with top players in Gas Distribution (both compressors and Oil&Gas)

	Auto	Gas Sector Distribution	Other Business	LR GROUP Q1 2017
Profit & Loss	Gas Sector	Gas Sector	Other	LR GROUP
	Auto	Distribution	Business	Q1 2016
Revenues	33,9	3,7	3,8	41,4
EBITDA Adj.	0,9	-0,7	0,2	0,4
% on Revenues	2,7%	-18,9%	5,3%	0,9%
EBITDA	0,9	-0,7	0,2	0,4
% on Revenues	2,7%	-18,9%	5,3%	0,9%

• Gas Sector Auto drives the improvement of the performance and benefits from the different actions already implemented by the new Management team. Strong market driven approach positively impacts on turnover, with additional real benefits from cost optimizations expected by the Q4 2017 • Gas Sector - Distribution has been Q1 2017
• addressed by the Management team since Q2. Already appointed in SAFE a new Managing Director (Luciano Dell'Omo) with more than 25 years experience with top players in Gas Distribution (both compressors and Oil&Gas) Q1 2016

EBITDA Bridge

Balance Sheet Overview

M€, %

Balance Sheet Overview M€, %
Balance Sheet	Q1 2017	FY 2016	Q1 2016
				Highlights
Intangible Assets	58,1	58,9	60,6
Tangible Assets	29,3	30,5	34,0	in the management of
Other non-current Assets Fixed Capital	7,8 95,2	7,6 97,0	8,7 103,3	Working Capital with significant improvement of
Receivables	35,0	37,6	35,7
Inventory	50,4	51,2	63,4
Paybles	-46,5	-53,1	-52,6	positively improve on Invested Capital
Other current assets/liabilities	-0,4	0,8	6,3
Working Capital	38,4	36,4	52,7	all the Capital
% on Revenues	20,2%	19,8%	26,2%	Expenditures
Defined Benefits plans and other provisions	-12,6	-12,6	-10,8
Invested Capital	121,0	120,8	145,2	been impacted by an advance payment for a
				future capital increase
Shareholder's Equity	51,1	45,1	66,8
Net Financial Position	69,9	75,7	78,4
Total Sources	121,0	120,8	145,2

Highlights

• More disciplined approach in the management of Working Capital with significant improvement of KPIs compared to 2016 • Deal with AVL will • Strong control to optimize • Shareholder's Equity has
• positively improve on Invested Capital
• all the Capital Expenditures
• been impacted by an advance payment for a future capital increase (totalling 8,9 M€)

16,5	Cash liquidity (+)	21,0
-75,7	NFP (*)	-69,9

Landi Renzo Group is strongly committed to continuing the relaunch phase undertaken

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 program to improve the operational efficiency and recover the marginality on the core business
Mar. 2017		The Group successfully renegotiated the debt with banks and bondholders
Apr. 2017		Mr. Cristiano Musi appointed as Director and Group CEO
Apr. 2017		Landi Renzo-AVL signed the preliminary agreement for the sales of a company branch including part of LR Technical Center and for the cooperation on R&D strategic projects on CNG, LNG and Hydrogen, that will strength innovation
May. 2017		Reinforced the Management Team both in automotive business and SAFE with experienced managers joining the Group in key positions
Q2 2017		Strong focus of the automotive business on international growth in Asia and review of business model in US
Jun. 2017		The Group will define a new 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

Given the set of launched actions, the Group confirms the targets

11

Landi Renzo - Company profile (11/05/2017)

BOARD OF DIRECTORS

Stefano Landi – Chairman Giovannina Domenichini – Honorary Chairman Cristiano Musi - CEO Claudio Carnevale - Director Angelo Iori – Director Silvia Landi - Director Anton Karl – Independent Director Sara Fornasiero - Independent Director Ivano Accorsi – 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

CONSOLIDATED P&L

(thousands of Euro)
INCOME STATEMENT	31/03/2017	31/03/2016
Revenues (goods and services)	46,570	41,416
Revenues (goods and services) - related parties	204	4
Other revenue and income	250	195
Cost of raw materials, consumables and goods and change in inventories	-22,550	-19,105
Costs for services and use of third party assets	-11,479	-11,312
Costs for services and use of third party assets - related parties	-804	-775
Personnel expenses	-9,736	-9,466
Accruals, impairment losses and other operating expenses	-708	-594
Gross Operating Profit	1,747	363
Amortization, depreciation and impairment losses	-4,007	-4,118
Net Operating Profit	-2,260	-3,775
Financial income	18	39
Financial expenses	-1,059	-1,301
Gains (losses) on exchange rate	12	-159
Gains (losses) on equity investments consolidated using the equity method	78	-38
Profit (Loss) before tax	-3,211	-5,214
Current and deferred taxes	250	898
Profit (loss) of the period for the Group and minority interests, including:	-2,961	-4,316
Minority interests	24	-126
Profit (Loss) of the period for the Group	-2,985	-4,190

CONSOLIDATED BALANCE SHEET

CONSOLIDATED BALANCE SHEET
(thousands of Euro)
ASSETS	31/03/2017	31/12/2016	31/03/2016
Non-current assets
Property, plant and equipment	29,262	30,500	33,998
Development expenditure	8,210	8,420	8,464
Goodw ill	30,094	30,094	30,094
Other intangible assets w ith finite useful lives	19,763	20,359	22,017
Equity investments consolidated using the equity method	121	43	71
Other non-current financial assets	447	664	453
Deferred tax assets	7,268	6,887	8,174
Total non-current assets	95,165	96,967	103,271
Current assets
Trade receivables	33,213	35,553	33,279
Trade receivables - related parties	1,738	1,998	2,371
Inventories	49,719	49,872	60,955
Contract w orks in progress	714	1,281	2,457
Other receivables and current assets	11,092	10,082	15,582
Cash and cash equivalents	20,997	16,484	20,263
Total current assets	117,473	115,270	134,907
TOTAL ASSETS	212,638	212,237	238,178

CONSOLIDATED BALANCE SHEET

CONSOLIDATED BALANCE SHEET
(thousands of Euro)
EQUITY AND LIABILITIES	31/03/2017	31/12/2016	31/03/2016
Group shareholders' equity
Share capital	11,250	11,250	11,250
Other reserves	43,145	59,400	59,349
Profit (loss) of the period	-2,985	-25,245	-4,190
Total equity attributable to the shareholders of the parent	51,410	45,405	66,409
Minority interests	-287	-323	359
TOTAL EQUITY	51,123	45,082	66,768
Non-current liabilities
Non-current bank loans	32,836	18,687	26,899
Other non-current financial liabilities	32,426	22,812	29,850
Provisions for risks and charges	9,126	8,973	7,498
Defined benefit plans	2,940	3,124	3,277
Deferred tax liabilities	504	514	0
Total non-current liabilities	77,832	54,110	67,524
Current liabilities
Bank overdrafts and short-term loans	25,187	40,662	36,725
Other current financial liabilities	425	10,039	5,223
Trade payables	41,809	48,919	50,248
Trade payables - related parties	4,739	4,171	2,364
Tax liabilities	2,494	2,604	1,683
Other current liabilities	9,029	6,650	7,643
Total current liabilities	83,683	113,045	103,886
	212,638	212,237	238,178