Piovan — Investor Presentation 2019

Mar 15, 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").

Notwithstanding the Target Market Assessment, Distributors should note that: the price of the Securities may decline and investors could lose all or part of their investment; the Securities offer no guaranteed income and no capital protection; and an investment in the Securities is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Offer. Furthermore, it is noted that, notwithstanding the Target Market Assessment, the Manufacturers will only procure investors who meet the criteria of professional clients and eligible counterparties.

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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 Markets

Source: Company information

¹In 2018. ²In 2018. ³Average 2018 figure. ⁴ Defined as Adjusted EBITDA – Recurring Capex / Adjusted EBITDA. ⁵ 2018 figure. Computed as EBIT / Net Invested Capital excluding Goodwill and Put and Call Options. ⁶ Excluding other sales & other income.

Our Core is Process Automation from Silos to Primary Machines

PIOVAN 2018 KEY BUSINESS HIGHLIGHTS

Further Consolidation of Our Global Leadership in Plastic with High Single-Digit Growth (+8% YoY)

Strong Results in Food (+€19m YoY) Supported by Ongoing Expansion of International Salesforce

Strategy to Enlarge End-Markets Served in Plastic Driving Great Momentum in Asia

Continued Footprint Expansion with New Branch Opened in Morocco & Ongoing Screening for Additional Openings by YE

Completed US Facilities Relocation, Expansion of the Italian Site Ongoing as Planned

Disposal of US Plant and Non-Core Assets Completed, Fully Financing Extraordinary Capex Needs

Acquisition of a Further Stake in Penta, Now Owned at 90%

Successfully Completed Listing on Italian Stock Exchange

KEY FINANCIAL HIGHLIGHTS

FY18

Source: Company Information

¹Includes other revenue and income. YoY growth excludes capital gains on asset disposals (€1.9m in 2018).²Adj. EBITDA - Recurring Capex. ³ Computed as Cash Generation as % of Adj. EBITDA. ⁴ Computed as EBIT / Net Invested Capital excluding Goodwill and Put and Call Options.

Strong Top-Line Acceleration Driven by Food and Asia

Comments

BY APPLICATION

• Strong increase in Revenues from Systems across both markets:
• Plastic: further consolidation of the leadership position, with strong growth in EMEA and Asia
• Food: strong acceleration, executing our strategy to gain market share
• Service: flattish top line as a result of
  • Lower activity in North America due to the production shift to the new facility (now concluded)
  • Food spare parts and service additional business not yet visible in the performance

BY GEOGRAPHY

• Strong momentum in:
• EMEA, reflecting mainly acceleration in Food (alongside with strong double digit performance in plastics)
• Asia, as a result of recent organizational changes and broadening of the end-markets served
• Slowdown in in North America partially impacted by relocation to new plant (now completed) impacting profitability in ramp-up phase
• South America performance affected by adverse FX movements

Profitable Growth Path Continuing in Line with Expectations…

• Plastic vs. Food mix effect driving Contribution Margin down (structurally lower in Food due to higher incidence of raw materials)

• Dilution of Contribution Margin more than offset by structurally lower fixed costs in Food, resulting in overall margins expansion (~20bps at Adj. EBITDA level, ~40bps at Adj. EBIT level)

• Increased Net Income despite negative effect of IPO / other oneoff costs (c. €5.4m)

Source: Company Information

¹Adjusted for extraordinary capital gains on asset disposals (€1.9m in 2018) and IPO / other one-off costs (c. €5.4m); margin calculated on Revenues net of extraordinary capital gains on assets disposals

² Computed on Revenues excluding capital gains on asset disposal (€1.9m in 2018)

…Driven by Strong Operating Leverage

Source: Company Information ¹Excluding IPO / other one-off costs (c. €5.4m)

²Excluding extraordinary capital gain on asset disposal (€1.9m in 2018)

Adjusted EBITDA Bridge from FY-17 to FY-18

Net Debt Walk from Dec-17 to Dec-18

Net Cash/ (Debt) Dec-17 Adj. EBITDA Recurring Capex Change in contract assets / (liabilities) Change in tax receivables / (payables) / VAT Other change in WC Taxes Other Net Cash/ (Debt) Dec-18 pre extraordinary Net cash impact of IPO / other one-off costs Non Recurring Capex Disposal Dividends paid Penta minority acquisition Net Cash/ (Debt) Dec-18

Income Statement

€m	2017	2018	Δ% 18 vs. 17
Sales	209.4	241.7	15.4 %
Other sales & other income	3.9	6.2	59.2 %
o/w capital gain on asset disposal	-	1.9	n.m.
Revenues 1	213.3	247.8	1 16.2 %
Raw materials	(82.2)	(97.5)	18.6 %
Cost of services	(40.6)	(53.3)	31.3 %
o/w extraordinary IPO costs	-	(5.4)	n.m.
Personnel	(52.9)	(57.1)	7.9 %
Other costs	(4.6)	(5.0)	8.0 %
EBITDA	33.0	35.017	6.2 %
Capital gain on asset disposal	-	(1.9)	n.m.
Extraordinary / IPO costs	-	5.4	n.m.
Adjusted EBITDA	33.0	38.5	16.7 %
% Adjusted Margin	15.5%	15.7%
D&A and provisions	(3.5)	(3.7)	5.4 %
EBIT	29.5	31.3	6.3 %
Finance Income / (Expenses)	(0.3)	(0.2)	(40.1)%
Exchange income (expenses)	(2.1)	0.2	(111.2)%
Income from equity method investments	-	(0.1)	n.m.
Income / loss from change in fair value	2.1	2.3	n.m.
EBT	29.1	33.5	15.0 %
Taxes	(8.9)	(8.0)	(10.2)%
% Tax Rate	30.5%	23.8%
Net Income	20.2	25.5	26.1 %
Attributable to Piovan shareholders	19.6	23.9	22.1 %
Attributable to minority shareholders	0.7	1.6	141.9 %

Balance Sheet

€m	Dec-17	Dec-18
Property Plant & Equipment	27.9	34.5
Intangible Assets (incl. Goodwill)	5.7	6.0
Financial Assets	0.6	0.3
Net Fixed Assets	34.2	40.8
Trade receivable	61.4	50.7
Inventory	23.0	28.0
Trade payables	(34.5)	(39.9)
Advanced payments from customers	(14.1)	(12.6)
Contract assets/(liabilities)	(8.5)	1.0
Net Trade Capital	27.4	27.1
Tax receivables	1.6	3.5
Other current activities	3.5	4.2
Tax payables	(7.4)	(6.4)
Other current liabilities	(11.0)	(12.2)
NWC	14.0	16.1
Other Credits	4.0	5.0
Other Debts	(4.3)	(6.6)
Pension Fund	(3.9)	(3.9)
Net Invested Capital before Option	44.1	51.5
Put & Call Option	(9.7)	(3.2)
Net Invested Capital	34.4	48.3
Total Shareholders' Equity	36.7	56.8
Net Debt / (Cash)	(2.3)	(8.5)
Total Sources	34.4	48.3

Cash Flow Statement

€m	2017	2018
Adj. EBITDA	33.0	33.0 38.5
Recurring Capex	(1.8)	(1.8) (2.7)
% on Revenues	0.8%	0.8% 1.1%
Cash generation	31.2	31.2 35.8
Cash Conversion %	94.6%	94.6% 93.0%
Non-Recurring Capex	(6.2)	(6.2) (9.9)
Disposal	1.1	1.1 5.2
∆ Net Working Capital	3.2	3.2 (2.1)
Corporate Taxes	(8.9)	(8.9) (8.0)
∆ Funds	(0.2)	(0.2) (0.0)
Non operating Items	0.6	0.6 (0.6)
Cash Flow from Operation	20.8	20.8 20.4
Net Cash Impact of Extraordinary / IPO costs	-	- (4.5)
∆ Put and Call Option	0.0	(0.0) (4.2)
Dividend distribution	(12.2)	(12.2) (6.0)
Changes in equity	(2.0)	(2.0) 0.6
Other financial charges	(0.3)	(0.3) (0.2)
∆ Exchange loss/gain	(2.1)	(2.1) 0.2
Income from equtiy method investments	-	- (0.1)
∆ Net Financial Position	4.1	4.1 6.2
NFP BoP	1.8	1.8 (2.3)
∆ Net Financial Position	(4.1)	(4.1) (6.2)
NFP EoP	(2.3)	(2.3) (8.5)