Piovan — Investor Presentation 2019

Nov 13, 2019

FINANCIAL RESULTS 9M 2019

13 November 2019

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Information to Distributors

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the ordinary shares and the warrants of Piovan S.p.A. (the "Securities") have been subject to a product approval process, which has determined that such Securities are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment").

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Each distributor is responsible for undertaking its own target market assessment in respect of the securities and determining appropriate distribution channels.

The Leading Automation Solutions Provider for Plastic, Food & Other Powders Markets

Source: Company information

¹In 2018. ²As of July 2019. ³In June 2019. ⁴As of June 2019. ⁵ Defined as Adjusted EBITDA – Recurring Capex / Adjusted EBITDA. ⁶ Computed as EBIT / Net Invested Capital excluding Goodwill and Put and Call Options . Net Invested Capital adjusted for the application of IFRS 16. ⁷ Excluding other sales & other income.

…Exploiting Strong Technological Synergies Across Materials

PIOVAN 9M 2019 KEY BUSINESS HIGHLIGHTS

Plastic Systems substantially resilient despite market slowdown

2Q and 3Q 2019 impacted – as expected – by negative order intake recorded between Dec-18 and Mar-19 (time lag effect), positive trends observed over the last 6 months

Finalised acquisition of FEA p.t.p., Italian company active in handling and storage of viscous liquid for the food industry¹

Finalised acquisition of ToBaPNC, South Korean company active in plastic powder automation¹

Completed relocation of the Italian site as planned

Introduction on new technologies to improve the automation of plastic recycling process and circular economy

Awarded order related to the construction of the largest ever recycling plant

NEW TECHNOLOGIES FOR PLASTIC RECYCLING PROCESS AND CIRCULAR ECONOMY

In 2019 Piovan has developed new patented technologies to support converters in the utilisation of recycled material

We estimate that we have contributed to the development of bio-circular economy up to one quarter of our system sales for packaging applications

Piovan targets to strengthen the support to the bio and circular economy through the developments of unique technologies needed throughout the recycling chain from post-consumer recyclers to final product converters

instruments

Focus on 2 Strategic Bolt-Ons

Leading company in South Korea in the automation of industrial processes for plastics and transports of plastic powders

2018 Revenue: c. €5m

Specialized in the automation of systems for handling and storage of viscous liquids for the food industry (confectionary & chocolate)

2018 Revenue: c. €3m

Expand international presence, increasing penetration in Asia

Transaction Overview

Highlights

2

Technological edge in processing complex liquid foods Gain access to world leading companies in electronics and automotive technologies

• Acquired 51% stake
• Purchase price c. USD 1m
  • Call option on minority

Diversify from powder to creams in food adding highly complementary technologies

• Acquired 51% stake
• Purchase price c. € 0.4m
• Call option on minority

7

Resilient Plastic, While Food & Other Powders Suffering From Weaker Market Backdrop

8

Comments

BY APPLICATION

• Revenues from Systems affected by headwinds in Food & Other Powders
  • 2Q and 3Q 2019 impacted as expected by negative order intake recorded between Dec-18 and Mar-19 (time lag effect), positive trends observed over the last 6 months
  • Plastic Systems substantially resilient despite market slowdown (-4% YoY), on the back of Piovan leading market position
  • YTD decrease in food driven by effects of 2018 production planning (anticipating food orders to 2018 and moving plastic orders to 2019). Q3 is accelerating and further growth is expected from Q4 onwards
• Service segment growing in line with company's expectations

BY GEOGRAPHY

• Positive trend in North America driven by momentum in commercial success of product portfolio
• Improvement of performance in Asia on the back of growth in South East Asia compensating Chinese market slowdown due to trade war
• South America weakened by unstable Brazilian market, compensated by ramp up in Food & Other Powders
• EMEA affected by weaker performance in Food & Other Powders

Higher Personnel and Other Costs Offsetting Higher Contribution Margin

• Improvement of contribution margin as a % of Revenues offset by higher relatively personnel and other costs, resulting in lower EBITDA and EBIT margin

resulting in lower net income

% of Revenues as a result of Plastic vs. Food & Other Powders mix effect, but decreasing in absolute amount due to lower volume effect

Higher Personnel and Other Costs Offsetting Higher Contribution Margin

Adjusted EBITDA Bridge from 9M 18 to 9M 19

Net Debt Walk from Sep-18 to Sep-19

Sep-18 to Sep-19 Net Debt bridge (€m)

Our Core is Process Automation from Silos to Primary Machines…

Income Statement

€m	9M 18	9M Pre IFRS 16	9M 19	Δ% 9M 2018 vs 9M 2019
Sales	179.5	164.0	164.0	(8.6)%
Other sales & other income	4.9	4.2	4.2	(14.9)%
o/w non-recurring items	1.9	0.7	0.7	n.m.
Revenues	184.5	168.2	168.2	(8.8)%
Raw materials 1	(73.4)	(63.6)	(63.6)	(13.4)%
Cost of services	(37.3)	(37.7)	(37.7)	1.0 %
o/w extraordinary costs	(1.1)	(0.8)	(0.8)	n.m.
Personnel	(41.8)	(43.7)	(43.7)	4.4 %
Other costs	(3.9)	(4.8)	(3.8)	(1.0)%
EBITDA	28.0	18.5	19.4	(30.8)%
Extraordinary income	(1.9)	(0.7)	(0.7)
Extraordinary costs	1.1	0.8	0.8
Adjusted EBITDA	27.3	18.6	19.5	(28.5)%
% Adjusted Margin	14.9%	11.1%	11.6%
D&A and provisions	(2.4)	(2.8)	(3.6)
EBIT	25.7	15.7	15.8	(38.5)%
Finance Income / (Expenses)	(0.2)		0.0
Exchange income (expenses)	0.1		0.5
Income from equity method investments	(0.1)		0.1
Income / loss from change in Fair Value	2.6		(0.1)
EBT	28.1		16.3	(42.0)%
Taxes	(7.6)		(4.6)
% Tax Rate	27.0%		28.3%
Net Income	20.5		11.7	(43.1)%
% Margin	11.1 %		6.9 %
Attributable to Piovan shareholders	18.8		11.7	(37.6)%
Attributable to minority shareholders	1.7		(0.1)	(104.5)%

Balance Sheet

€m	Dec-18	IFRS 16 Adj	Dec-18 Restated	Sep-19
Property Plant & Equipment	34 5	5 9	40 4	46 4
(incl Goodwill) Intangible Assets	6 0		6 0	6 7
Financial Assets	0 3		0 3	1 1
Net Fixed Assets	40 8		46 7	54 2
Trade receivable	50 7		50 7	51 7
Inventory	28 0		28 0	30 6
Trade payables	(39 9)		(39 9)	(28 0)
Advanced from payments customers	(12 6)		(12 6)	(20 5)
Contract assets/(liabilities)	1 0		1 0	3 5
Capital Net Trade	27 1		27 1	37 3
Tax receivables	3 5		3 5	4 3
Other activities current	4 2		4 2	4 4
Tax payables	(6 4)		(6 4)	(5 2)
Other liabilities current	(12 2)		(12 2)	(13 0)
NWC	16 1		16 1	27 9
Other Credits	5 0		5 0	4 5
Other Debts	(6 6)		(6 6)	(6 4)
Pension Fund	(3 9)		(3 9)	(4 5)
Capital before Option Net Invested	51 5		57 3	75 7
Call Option Put &	(3 2)		(3 2)	(4 5)
Capital Net Invested	48 3		54 2	71 2
Shareholders' Total Equity	56 8		56 8	60 0
/ (Cash) Net Debt	(8 5)	5 9	(2 6)	11 1
Total Sources	48 3		54 2	71 2

Cash Flow Statement

€m	Dec-18	IFRS 16 Adj	Dec-18 Restated	Sep-19
Adj EBITDA	38 5			19 5
Recurring Capex	(2 7)			(1 4)
% on Revenues	1 1%			0 8%
Cash generation	35 8			18 1
Cash Conversion %	93 0%			92 9%
Non-Recurring Capex	(9 9)			(8 5)
Disposal	5 2			-
Net Working Capital ∆	(2 1)			(11 8)
Corporate Taxes	(8 0)			(4 6)
Funds ∆	(0 0)			0 6
Non operating Items	(0 6)			(0 2)
Cash from Operation Flow	20 4			(6 3)
Adjusting Items	(4 5)			(0 .8)
Call Option Put and ∆	(4 2)			1.2
Dividend distribution	(6 0)			(7 .7)
Changes in equity	0 6			(0 7)
Other financial charges	(0 2)			0 0
loss/gain Exchange ∆	0 2			0 5
Income from equtiy method investments	(0 1)			0 1
∆ Net Financial Position	6 2			(13 8)
NFP BoP	(2 3)			(2 6)
Net Financial Position ∆	(6 2)			13 8
NFP EoP	(8 5)	9 5	(2 6)	11 1