Landi Renzo

Earnings Release • Nov 13, 2018

2018 9M FINANCIAL RESULTS

Main events and market drivers

• New EU legislative proposal for CO2 emissions standard for Heavy-Duty will favour the growth of gas-powered solutions
• Worldwide strong focus on environmental and climate change, with strong investment on infrastructure in different area worldwide and growing attention to Biomethane/RNG. New infrastructures will fasten the adoption of the gas-mobility in many areas
• Growing interest by fleets worldwide to convert to gas enlarge growing opportunities for After Market business; won a significant tender in Bolivia of USD 5 million (more than 31 thousands traditional kits) to be delivered in Q4 2018 and Q1 2019; other opportunities on track LRG invited by a top market player to participate for the the first EU RFQ for Hydrogen
• LRG continue its cooperation with two of the main players in the powertrain Heavy Duty industry for the development of new components
• components
• 2018 Outlook remains confirmed

9M 2018 LRG shows strong performance improvement compared to 2017

Due to the deconsolidation of Gas Distribution and Compressed Natural Gas and Sound sectors, 9M 2018 financial figures are not directly comparable with the same period of previous year

To provide a meaningful explanation of main difference, in the following of this document 9M 2018 results are compared only with 9M 2017 Automotive sector figures

9M 2018 P&L figures show a positive Net Income due to increased revenues and a continuous improvement on EBITDA

revenues and a continuous improvement on EBITDA
							like for like	Highlights
M€	2018 9M	2017 (1) 9M	Delta M€	Delta %	2017 9M	Delta M€	Delta %
					Automotive			• Automotive Adj. EBITDA, 13,9% of
Revenues	138,1	149,5	-11,4	-7,6%	123,0	15,1	12,3%	positively impacted by the
EBITDA Adj.	19,1	9,8	9,3	94,9%	9,6	9,5	98,7%	improvement of the gross margin
% on Revenues	13,9%	6,6%			7,8%			(volumes and direct cost optimization) and leveraging the reduction of fixed
EBITDA	17,5	7,0	10,5	148,6%	6,9	10,7	155,5%	cost. Extraordinary costs consisting in
% on Revenues	12,7%	4,7%			5,6%			the last part of the "excellence project"
EBIT Adj. % on Revenues	11,2 8,1%	-1,7 -1,1%	12,9	N/A	-0,4 -0,3%	11,6	N/A	started in 2017
EBIT	9,6	-6,4	16,0	N/A	-5,1	14,7	N/A	• Adj. EBIT, 8,1% of revenues, in line with best practice in the sector, also
% on Revenues	6,9%	-4,3%			-4,2%			positively impacted by the 2017 AVL
Capital Gain/Loss	-1,2	0,0	-1,2					deal
Financials	-4,1	-4,2	0,1					remains unchanged since H1, thanks
EBT	4,2	-10,6	14,8	N/A				to the first set of actions implemented
Taxes	-1,9	-0,7	-1,2					in the integration phase as well as the
Net Income	2,3	-11,3	13,6	N/A				turnover growth
% on Revenues	1,7%	-7,5%

like for like Highlights

• M€ Delta %
• Automotive sector revenues increased by 15,1M€ (+12,3%), mainly on AM • Automotive Adj. EBITDA, 13,9% of revenues, up to 9,5M€ (+98,7%) positively impacted by the improvement of the gross margin (volumes and direct cost optimization) and leveraging the reduction of fixed cost. Extraordinary costs consisting in the last part of the "excellence project" started in 2017 • Capital Loss from SAFE&CEC
• Adj. EBIT, 8,1% of revenues, in line with best practice in the sector, also positively impacted by the 2017 AVL deal
• remains unchanged since H1, thanks to the first set of actions implemented in the integration phase as well as the turnover growth

2017 9M "Automotive" figures refer to the same perimeter of 2018 9M

Q3 results improve both in revenues (+14,2%) and in profitability, with adj EBITDA

2018 9M Adjusted EBITDA improved by 9,5M€ thanks to volumes and to the effect of the industrial turnaround, both for direct and indirect costs

Increased share of revenue from America and Asia/RoW consolidates LRG international coverage. AM/OEM revenue mix in line with 2017 data

AUTOMOTIVE SECTOR

• in Poland

2018 Balance Sheet shows a balanced working capital (14,0% of revenues) and a reduction of funds and severance packages

M€, %

reduction of funds and severance packages						2018 Balance Sheet shows a balanced working capital (14,0% of revenues) and a
M€, %
Balance Sheet	2018 at 30.09	2018 at 30.06	2018 at 31.03	FY 2017	delta	Highlights
Intangible Assets	49,4	49,7	50,4	51,3	-1,9
Tangible Assets	12,5	13,4	13,5	14,6	-2,1	• Working Capital in line with Strategic Plan target at 14,0% of
Other non-current Assets	34,7	35,5	36,1	37,3	-2,6	revenues
Fixed Capital	96,5	98,5	99,9	103,2	-6,7
Receivables	33,8	36,4	30,4	29,1	4,7	• Inventory at 30.09 was impacted
Inventory	45,4	39,0	38,8	36,6	8,8	by purchase orders in advance to
Payables	-54,6	-53,5	-49,2	-47,8	-6,8	satisfy Q4 needs
Other current assets/liabilities	0,9	-0,9	0,3	-0,6	1,5
Working Capital	25,5	21,0	20,3	17,3	8,2	• Net Financial Position increased
% on Revenues (*)	14,0%	11,8%	12,1%	10,3%		by 7,6M€ mainly due to working capital, extraordinary payment for
TFR and other Funds	-8,3	-10,9	-11,5	-14,8	6,5	TFR and other funds
Invested Capital	113,7	108,6	108,7	105,7	8,0
Shareholder's Equity	57,1	57,0	54,9	56,7	0,4
Net Financial Position	56,6	51,6	53,8	49,0	7,6
		108,6	108,7	105,7	8,0

Highlights

• Working Capital in line with Strategic Plan target at 14,0% of revenues
• Inventory at 30.09 was impacted by purchase orders in advance to satisfy Q4 needs
• Net Financial Position increased capital, extraordinary payment for TFR and other funds

2018 9M working capital in line with Strategic Plan target: 14,0% of revenues (9M 2018) vs 15,7% (9M 2017)

M€, % on rolling revenues 12M

	FY 2016	FY 2017	31.03.2018	30.06.2018	30.09.2018	30.09.2017
DSO	70	64	66	75	68
DPO	136	138	138	134	137	135
DIOH	101	80	85	80	91	94

Note: DSO, DPO, DIOH are calculated considering only Automotive sector

Q3 2018 NFP increases mainly because of working capital to be ready for an escalation of sales in Q4 and extraordinary activities

(**) accrued interests included 9

SAFE&CEC total 9M 2018 consolidated revenues of 40,3M€ and Adj. EBITDA positive by 1,5M€, vs 9M 2017 SAFE Ebitda negative by 0,7M€

SAFE & CEC Economics	positive by 1,5M€, vs 9M 2017 SAFE Ebitda negative by 0,7M€ M€ Revenues EBITDA Adj. % on Revenues EBITDA % on Revenues EBIT % on Revenues Net Income % on Revenues	2018 Q1 9,9 -1,0 -10,4% -1,5 -14,9% -1,8 -18,3% -1,9 -19,0%	2018 Q2 16,4 1,5 9,4% 0,3 1,8% -0,1 -0,6% -0,7 -4,3%	2018 Q3 14,1 1,0 6,8% 0,9 6,3% 0,7 5,3% -0,1 -0,8%	2018 9M 40,3 1,5 3,6% -0,3 -0,7% -1,2 -2,9% -2,7 -6,7%	• 9M sales in line with expectations • Key markets: US and Latam: ~ 43% o Europe: ~ 37% o MEA: ~ 20% o • Over the first 3 quarters of 2018, EBITDA has a growing trend, moving from Q1 negative (1,5M€) to Q2 positive (0,3M€) and Q3 positive (0,9M€) • Extraordinary one-off costs due to integration activities
SAFE & CEC Financials	M€ Working Capital Net Financial Position		2018 at 31.03 6,8 -1,9	2018 at 30.06 6,8 2018 -1,6	2018 at 30.09 9,0 -4,0	• Working capital in line with budget. % on revenues is close to 15% • Net Financial Position negative for 3,9M€ with 7,3M€ debt and 3,4M€ cash available

11

Landi Renzo - Company profile (09/11/2018)

BOARD OF DIRECTORS

TOP MANAGERS INVESTOR RELATIONS

Investor Relations Contacts:

Paolo Cilloni 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

CONSOLIDATED P&L
(thousands of Euro)
INCOME STATEMENT	30/09/2018	30/09/2017 (*)
Revenues from sales and services	138,083	149,509
Other revenue and income	249	490
Costs of raw materials, consumables and goods and change in inventories	-65,433	-71,446
Costs for services and use of third party assets	-32,259	-39,797
Personnel cost	-21,115	-29,544
Provisions, provision for bad debts and other operating expenses	-2,008	-2,165
Gross Operating Profit	17,517	7,047
Amortization, depreciation and impairment	-7,945	-11,512
Loss on assets disposal	0	-1,919
Net Operating Profit	9,572	-6,384
Financial income	106	67
Financial expenses	-2,839	-3,295
Exchange gains (losses)	-1,376	-989
Gain (loss) on equity investments valued using the equity method	-1,242	37
Profit (Loss) before tax	4,221	-10,564
Current and deferred taxes	-1,917	-712
Net profit (loss) for the Group and minority interests, including:	2,304	-11,276
Minority interests	-107	-223
Net profit (loss) for the Group	2,411	-11,053
Basic earnings (loss) per share (calculated on 112,500,000 shares)	0.0214	-0.0982
Diluted earnings (loss) per share	0.0214	-0.0982
(*) The comparative figure w as re-presented in accordance w ith the classification adopted on 30 Sept 2018

CONSOLIDATED BALANCE SHEET

CONSOLIDATED BALANCE SHEET
(thousands of Euro)
ASSETS	30/09/2018	31/12/2017	30/09/2017
Non-current assets
Land, property, plant, machinery and equipment	12,501	14,583	18,236
Development expenditure	4,776	5,401	6,580
Goodw ill	30,094	30,094	30,094
Other intangible assets w ith finite useful lives	14,487	15,769	18,623
Equity investments valued using the equity method	23,059	24,301	80
Other non-current financial assets	373	428	461
Other non-current assets	3,990	4,560	4,560
Deferred tax assets	7,262	8,016	6,754
Total non-current assets	96,542	103,152	85,388
Current assets
Trade receivables	33,793	29,118	37,332
Inventories	45,424	36,562	51,953
Contract w orks in progress	0	0	1,163
Other receivables and current assets	7,956	7,529	10,724
Cash and cash equivalents	17,224	17,779	14,005
Total current assets	104,397	90,988	115,177
		194,140	200,565
TOTAL ASSETS	200,939

CONSOLIDATED BALANCE SHEET

CONSOLIDATED BALANCE SHEET
(thousands of Euro)
EQUITY AND LIABILITIES	30/09/2018	31/12/2017	30/09/2017
		(*)	(*)
Equity
Share capital	11.250	11.250	11.250
Other reserves	44.192	41.983	42.210
Profit (loss) for the period Total Shareholders' Equity attributable to the Group	2.411 57.853	4.139 57.372	-11.053 42.407
Minority interests	-742	-669	-496
TOTAL SHAREHOLDERS' EQUITY	57.111	56.703	41.911
Non-current liabilities
Non-current bank loans	24.614	26.906	31.284
Other non-current financial liabilities	26.560	29.308	31.128
Provisions for risks and charges	6.162	11.891	6.861
Defined benefit plans for employees	1.753	2.446	2.895
Deferred tax liabilities	405	423	451
Total non-current liabilities	59.494	70.974	72.619
Current liabilities
Bank financing and short-term loans	18.699	7.741	15.029
Other current financial liabilities	3.984	2.792	1.604
Trade payables	54.562	47.829	57.642
Tax liabilities	1.807	3.003	1.986
Other current liabilities	5.282	5.098	9.774
Total current liabilities	84.334	66.463	86.035
			200.565
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES	200.939	194.140

Disclaimer

This document has been prepared by Landi Renzo 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 forward looking 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

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