Prima Industrie — Investor Presentation 2016

Oct 6, 2016

S T A R C O N F E R E N C E 2 0 1 6 , L O N D O N

O C T O B E R 6 T H 2016

Prima Group at a glance

• Founded in 1977, Prima Industrie is a global leader in high technology laser and sheet metal processing systems and electronic components for industrial applications
• About 12,000 machines installed in more than 80 countries
• Over 1,600 employees worldwide
• Manufacturing sites in Italy, Finland, USA and China
• Broad direct commercial and after-sales presence in EU, NAFTA, BRIC and other emerging markets.
• 2015 sales were at € 365 millions, of which more than 85% outside Italy
• Strong commitment to innovation (R&D is 6.5% of turnover)
• Listed on Italian Stock Exchange (STAR segment) since 1999

Prima Group business sectors: Prima Power

LASER MACHINES

SHEET METAL MACHINERY

Prima Group business sectors: Prima Electro

ELECTRONICS

LASER SOURCES

Industrial footprint

Sales & service footprint

Order intake last 12 months

Economic trends

Net financial position trend

2016			2017		2018		2019
	B. IMI	B. Akros	Consensus	B. IMI	B. Akros	Consensus	B. IMI		B. Akros Consensus	B. IMI		B. Akros Consensus
tp	19,0	16,4		19,0	16,4		19,0	16,4		19,0	16,4
REVENUES	400,0	395	397,5	435	428	431,5	470	454	462,0	500	479	489,5
EBITDA	38	36	37,0	45,7	43,2	44,5	53,1	51,1	52,1	60	56,6	58,3
EBIT	23,59	20,7	22,1	30,2	28,3	29,3	37,1	36,6	36,9	44	42,3	43,2
NET RESULT	10,6	9,9	10,3	13,9	14,6	14,3	18,1	20,1	19,1	22,2	23,9	23,1
NFP	-101,1	-103	-102,1	-92,7	-95	-93,9	-80,2	-87	-83,6	-64,5	n/a	-64,5

CAGR 2016-201 consensus: 7.2%

INVESTMENTS RELATING TO THE PERIOD 2014-2018

• CHINA SUZHOU PLANT & NEW SALES/SERVICE ORGANIZATION IN CHINA •NEW HQTC (headquarters + tech centre) • FIBER LASER
• DIODE FAB FOR FIBER LASER COMPETITIVENESS

CHINA INVESTMENT 4.3 M€ NEW HQTC IN TORINO 8.5 ^M€ TOTAL INVESTMENT 12.8 ^M€

Reference markets: machinery

A selection from our 2,000 customers ww

Revenues by technology

Market trends: machine tool market – by Oxford Economics (update Spring 2016)

Market trends: laser systems market – by Optech Consulting (last available January 2014)

Global market and forecast for high power laser systems

	Global market (€/mio)	CAGR (%)
2013	2016		2013-2016	2016-2020
3,707	4,682	6,282	8.1	7.6

The geographic diversification

Revenues by geographic area

"Economic turbulence does not hit the same market at the same time: our strength is the global presence, allowed by a competitive range of products ".

Prima Power strategy for the Chinese machine tool market

New commercial strategy in China

R&D: Always at the cutting edge of technology

Bce Smart

Laser Genius Combi Genius

R&D represents 6.5% of turnover

Laserdyne 606D

Laser Next

eP 2040

• 40 years of laser and mechatronics know-how.
• Leaders in photonics technology, considered as a key enabling technology at EU level.
• Participation to EU Additive Manufacturing projects, leading the Borealis project.

Financial statements as at Jun. 30, 2016: Balance sheet

Values in Euro	30/06/2016	31/12/2015	Values in Euro	30/06/2016	31/12/2015
Property, plant and equipment	34.654.519	28.465.557	Capital stock Property, plant and equipment	26.208.185 34.654.519	26.208.185 28.465.557
Intangible assets	157.721.121	157.770.974	Legal reserve Intangible assets	4.565.082 157.721.121	4.494.745 157.770.974
Investments accounted for using the equity method	1.163.429	1.223.555	Other reserves Investments accounted for using the equity method	70.959.273 1.163.429	72.243.694 1.223.555
Other investments	121.358	121.358	Currency translation reserve Other investments	4.794.001 121.358	5.965.409 121.358
Non current financial assets	585.000	35.000	Retained earnings Non current financial assets	19.396.357 585.000	14.786.376 35.000
Deferred tax assets	11.118.035	9.845.765	Net result Deferred tax assets	2.928.934 11.118.035	6.016.715 9.845.765
Other non current assets	-	19.703	Stockholders' equity of the Group Other non current assets	128.851.832 -	129.715.124 19.703
NON CURRENT ASSETS	205.363.462	197.481.912	Minority interest NON CURRENT ASSETS	1.146.616 205.363.462	1.196.407 197.481.912
Inventories	107.260.549	93.992.707	STOCKHOLDERS' EQUITY	129.998.448	130.911.531
Trade receivables	82.174.945	86.413.895	Inventories Interest-bearing loans and borrowings	107.260.549 119.046.036	93.992.707 117.805.350
Other receivables	10.066.704	8.019.131	Trade receivables Employee benefit liabilities	82.174.945 7.772.535	86.413.895 7.912.782
Current tax receivables	7.029.793	7.029.222	Other receivables Deferred tax liabilities	10.066.704 10.371.777	8.019.131 10.518.305
Derivatives	137.665	47.225	Current tax receivables Provisions	7.029.793 146.655	7.029.222 150.551
Financial assets	241.509	791.509	Derivatives Derivatives	137.665 276.578	47.225 414.635
Cash and cash equivalents	40.592.723	41.365.408	Financial assets	241.509	791.509
CURRENT ASSETS	247.503.888	237.659.097	NON CURRENT LIABILITIES Cash and cash equivalents	137.613.581 40.592.723	136.801.623 41.365.408
Assets held for sale	284.000	284.000	Trade payables CURRENT ASSETS	92.337.889 247.503.888	78.323.460 237.659.097
TOTAL ASSETS	453.151.350	435.425.009	Advance payments Assets held for sale	20.556.368 284.000	21.385.159 284.000
			Other payables TOTAL ASSETS	22.039.809 453.151.350	19.218.309 435.425.009
			Interest-bearing loans and borrowings	25.791.434	25.700.281
			Current tax payables	6.933.600	7.257.725
			Provisions	17.880.221	15.796.491

Derivatives - 30.430 CURRENT LIABILITIES 185.539.321 167.711.855 TOTAL STOCKHOLDERS' EQUITY AND LIABILITIES 453.151.350 435.425.009

Financial statements as at Jun. 30, 2016: P & L

Values in Euro	30/06/2016	30/06/2015 (*)
Net revenues	183.290.613	175.939.693
Other income	1.842.476	2.520.943
Change in inventories of finished goods and WIP	14.014.363	14.720.254
Increases in fixed assets for internal work	5.684.654	6.209.363
Use of raw materials, consumables, supplies and goods	(94.377.053)	(88.852.470)
Personnel cost	(51.849.846)	(51.861.623)
Depreciation	(7.571.376)	(6.466.200)
Impairment - Write-off	(127.443)	-
Other operating expenses	(43.823.647)	(43.990.624)
OPERATING PROFIT	7.082.741	8.219.336
of which: non recurring items	(957.797)	455.371
Financial income	538.316	262.305
Financial expenses	(3.609.964)	(5.023.080)
Net exchange differences	(542.028)	(285.137)
Net result of investments accounted for using the equity method	332.287	(105.000)
Net result of other investments	-	5.700
RESULT BEFORE TAXES	3.801.352	3.074.124
of which: non recurring items	(625.510)	(1.667.256)
Taxes	(871.146)	(1.817.014)
NET RESULT	2.930.206	1.257.110
- Attributable to Group shareholders	2.928.934	1.505.813
- Attributable to minority shareholders	1.272	(248.703)
RESULT PER SHARE - BASIC (in euro)	0,28	0,14
RESULT PER SHARE - DILUTED (in euro)	0,28	0,14

(*) for a better comprehension, the 2015 figures related to non recurring items have been re-exposed compared to the figures published in the half year Financial Report 2015

Market size 2015* : approx. 8.2 bn€

Laser & Sheet metal processing market

ASSUMPTIONS

•Source for figures are: market public figures, company available info and company assumptions. •In some cases market size may include also different products not fitting current Prima's product range such as plasma, water jet, tube cutting and bending applications, other machine tools. • Where possible, in order to make market as homogeneous as possible, we have made the following assumptions:

• Amada: revenues considered include only Sheet Metal Processing Machines Division;

• BLM and Huagong Tech: we have included only 50% of revenues, considering the rest addressable to a different market;
• Han's Laser: revenues considered include only High Power laser equipment segment;
• El .En.: only Industrial revenues are included

•Turkish Manufacturers include: Durma, Ermaksan and Baykal (2015 figures are extrapolated from 2013 figures with an average growth rate).

•Other Japanese Manufacturers include: Mitsubishi, Mazak, Murata and Komatsu NTC

• Other 20 minor European manufacturers include: CY laser, Galdabini, Euromac, TTM laser, Warcom, Danobat Goiti, Adira, Kimla, Dimeco, Pivatic, Wemo, Ursviken, Messer, Balliu, Dener, Ras, Safan.

• Other 20 China + R.o.W. include: Nisshinbo, Komatsu Sanki, Tanaka, Newton, Sorg, Gasparini, Tailift, Sahjanand, Koike, Favor Laser, Sup/Smart Prima, Lead Laser, Jang Li, Golden Laser, AOL, Zhejiang Ares, Raycham, Viccam, Accurmax, Wisdom, etc.

Competitors' recent results

		six months at 30/06/2016	six months at 30/06/2015	change
PI	EURO/mil	183,3	175,9	4,2%
Bystronic	CHF/mil	256,8	265,7	-3,3%
AMADA	Yen/mil	53.443	57.005	-6,2%
		twelve months at 30/6/16	twelve months at 30/6/15
Trumpf	EURO/bil	2,8	2,7	3,7%

"Sales decreased in Europe and Americas but increased in Asia"

"Double digit growth in Spain and France, but difficulties due to economic slowdown in China and Brazil and sanctions against Russia".