Prima Industrie — Investor Presentation 2017

Oct 10, 2017

London Stock Exchange - October 10th , 2017

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
• Over 12,000 machines installed in more than 80 countries
• ~1,700 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.
• 2016 sales were €394 millions, of which 84% outside Italy
• Strong commitment to innovation (R&D is ~6% 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: 1 plant=1 mission

Sales & service footprint

Direct presence in 25+ countries

• CANADA
• U.S.A.
• MEXICO
• BRAZIL
• CHILE
• ARGENTINA

• COLUMBIA

• ITALY

• FRANCE
• GERMANY
• UK
• SPAIN
• PORTUGAL
• SWITZERLAND
• AUSTRIA
• BELGIUM/ HOLLAND
• POLAND
• CZECH REP.

• HUNGARY

• RUSSIA

• LITHUANIA
• TURKEY
• U.A.E.
• FINLAND
• SWEDEN
• NORWAY
• DENMARK
• ISRAEL
• EGYPT

• S. AFRICA

• INDIA

• CHINA
• S. KOREA
• MALAYSIA
• AUSTRALIA
• NEW ZEALAND
• IRAN
• THAILAND
• VIETNAM
• INDONESIA
• JAPAN

subsidiaries or branch offices

Distributors/agents

Market trends: machine tool market – by Oxford Economics (update Spring 2017)

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

Global market and forecast for high power laser systems

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

Market trends: recent updates

• US Association for manufacturing technology (ATM) released the monthly update on manufacturing orders for the month of July: US manufacturing technology orders totaled USD319.7m reporting a +23% yoy increase. YTD, US market is up in the low double digit area (+10.1% yoy). By segment, metal cutting was the driver of the growth (+23.8% yoy), while metal forming & fabricating closed flattish yoy (+0.4%).
• In Italy, according to the ISTAT monthly industrial production survey, machinery production was up 8% yoy in July. YTD data remains positive in the low single digit (+2% yoy).
• According to Oxford economics, Italian market is expected to post strong growth (+10.6%) this year, outperforming the rest of Europe (+3.6%), China (+3.9%), US (+0.5%) and Japan (+0.9%).The second part of the year is expected to confirm the positive trend. The outlook remains supportive also for FY18, if government will confirm the tax incentive plan on capex.
• In Italy for the month of September global PMI remains close to peak level posting 53.2 in September, unchanged from August's 75-month high. September survey data signaled a further improvement in operating conditions across the US manufacturing sector. The overall upturn was supported by further growth in output and new orders. As far the Euro zone is concerned, conditions in manufacturing sector strengthened.

REVENUE DRIVERS

• Machine Tool market expected growth (Oxford Economics) – cagr 2016-2020: 3%
• Laser market expected growth (Optech Consulting) – cagr 2016- 2020: 7.6%
• Success of newly released products
• Strengthening of market coverage in China

• New HQTC (Headquarters &Tech Center) boosting order intake

• Higher volumes = Operational leverage

• Progressive increase in fiber laser in sourcing
• Diode Fab success in diodes development

Economic trends

* = according to Company's business plan

Net financial position trend

0,76

2008 2009 2010 2011 2012 2013 2014 2015 2016 2019*

0,61

0,00

0,50

Quarterly order intake since 2011

Last 13 months backlog

	2017			2018			2019
	B. IMI		B. Akros Mediobanca	Consensus	B. IMI		B. Akros Mediobanca	Consensus	B. IMI		B. Akros Mediobanca	Consensus
T P	34,5	30,9	40,8		34,5	30,9	40,8		34,5	30,9	40,8
REVENUES	432,0	445	444,7	440,6	470	477	482,9	476,6	500	510,5	514,1	508,2
EBITDA	43,0	49,0	45,3	45,8	53,1	57	52,2	54,1	60	65,4	61,1	62,2
EBIT	27,5	32	28,5	29,3	37,1	42	34,3	37,8	44	49,9	42,1	45,3
NET RESULT	16,6	20	18,7	18,4	23,68	27	24	24,9	29,1	33,9	29,5	30,8
NFP	-78,7	-77	-76,3	-77,3	-60,2	-62	-66,3	-62,8	-37,8	-40,4	-42,6	-40,3

CAGR 2016 (A) -2019 consensus: ~ 9%

Released September 11, 2017

Machine revenues by application

Revenues by geography

Revenues by technology

Always at the cutting edge of technology

Always at the cutting edge of technology

A selection from our 2,000 customers ww

A selection from our 2,000 customers ww

• ‣ ~6% OF REVENUES INVESTED IN R&D
• ‣RANKED BY EU IN THE TOP 500 KNOWLEDGE-BASED COMPANIES IN THE CONTINENT
• ‣LONG HISTORY OF INNOVATION, 1ST LASER MACHINE FOR AUTOMOTIVE APPLICATION IN 1979
• ‣PIONEERS IN SERVO-ELECTRIC PUNCHING AND BENDING SYSTEMS- EFFICIENCY AND SUSTAINABILITY
• ‣ABOUT 15% OF GROUP STAFF EMPLOYED IN R&D
• ‣PRODUCT RANGE ALWAYS AT THE CUTTING EDGE OF TECHNOLOGY

Prima Power Solutions for Industry 4.0 and Smart Manufacturing

Ready for today's production needs… and for tomorrow

Intelligent machines and automated factories collecting real-time and historical data through sensors and cameras

Prima Power software comprehensive portfolio of modular software-based systems

INTELLIGENT MACHINES & FACTORIES SMART SOFTWARE REMOTE DIAGNOSTICS & MAINTENANCE

Data-driven machine diagnostics and predictive maintenance services. Production performance analysis, monitoring of machines status and condition.

Innovation

Competence Center on Laser Based Manufacturing

Industry 4.0 European machine tool builder

• Showroom with training rooms, conference rooms and hospitality area for customers
• Permanent expo of entire product range

• Built with green technologies: photovoltaic and solar panels, geothermal wells, home automation systems

• Training and awareness on Industry 4.0

• Live demo on new technologies and best practices for Industry 4.0
• Accelerator of new innovative projects

Financial statements as at June 30, 2017: Balance sheet Other receivables 7.959.065 6.425.617 Current tax receivables 9.457.746 5.053.888 Derivatives 978.781 -

Values in Euro	30/06/2017	31/12/2016
Property, plant and equipment	34.624.043	35.281.369
Intangible assets	152.764.868	155.713.399
Investments accounted for using the equity method	-	1.009.341
Other investments	359.551	139.051
Non current financial assets	9.578	9.578
Deferred tax assets	12.541.507	11.555.324
NON CURRENT ASSETS	200.299.547	203.708.062
Inventories	119.344.851	98.561.165
Trade receivables	95.231.969	88.376.748
Other receivables	7.959.065	6.425.617
Current tax receivables	9.457.746	5.053.888
Derivatives	978.781	-
Financial assets	791.509	791.509
Cash and cash equivalents	44.740.938	62.679.901
CURRENT ASSETS	278.504.860	261.888.828
Assets held for sale	1.243.165	318.812
TOTAL ASSETS	480.047.572	465.915.702

Assets held for sale Values in Euro TOTAL ASSETS	1.243.165 30/06/2017 480.047.572	318.812 31/12/2016 465.915.702
Capital stock	26.208.185	26.208.185
Legal reserve	4.652.958	4.565.082
Other reserves	69.324.182	70.738.752
Currency translation reserve	3.288.546	6.848.598
Retained earnings	27.621.702	19.276.926
Net result	7.448.537	10.102.304
Stockholders' equity of the Group	138.544.110	137.739.847
Minority interest	1.200.545	1.212.065
STOCKHOLDERS' EQUITY	139.744.655	138.951.912
Interest-bearing loans and borrowings	105.729.629	111.675.762
Employee benefit liabilities	8.001.721	8.100.353
Deferred tax liabilities	7.887.459	8.340.653
Provisions	160.545	162.684
Derivatives	5.793	220.866
NON CURRENT LIABILITIES	121.785.147	128.500.318
Trade payables	98.910.899	88.448.383
Advance payments	33.692.845	26.029.170
Other payables	23.724.186	22.076.067
Interest-bearing loans and borrowings	36.265.707	34.894.444
Current tax payables	5.000.919	7.695.264
Provisions	20.923.213	18.424.370
Derivatives	-	895.774
CURRENT LIABILITIES	218.517.770	198.463.472
TOTAL STOCKHOLDERS' EQUITY AND LIABILITIES	480.047.572	465.915.702

CURRENT ASSETS 278.504.860 261.888.828

Financial statements as at June 30, 2017: P & L

Values in Euro	30/06/2017	30/06/2016
Net revenues	202.415.105	183.290.613
Cost of goods sold	(150.706.781)	(138.249.017)
GROSS MARGIN	51.708.324	45.041.596
Research and Development costs	(6.336.947)	(5.595.548)
Sales and marketing expenses	(14.424.138)	(13.464.305)
General and administrative expenses	(11.736.050)	(11.200.183)
OPERATING GROSS MARGIN (EBITDA)	19.211.189	14.781.560
of which: non recurring items	(822.812) -	(830.354)
Impairment - Write-off	(23.299)	(127.443)
Depreciation	(8.543.764)	(7.571.376)
OPERATING PROFIT (EBIT)	10.644.125	7.082.741
of which: non recurring items	(846.111) -	(957.797)
Financial income	2.279.142	538.316
Financial expenses	(3.381.808)	(3.609.964)
Net exchange differences	(1.704.590)	(542.028)
Net result of investments accounted for using the equity method	-	332.287
Net result of other investments	903.676	-
RESULT BEFORE TAXES (EBT)	8.740.546	3.801.352
of which: non recurring items	57.565 -	(625.510)
Taxes	(1.235.858)	(871.146)
NET RESULT	7.504.687	2.930.206
- Attributable to Group shareholders	7.448.536	2.928.934
- Attributable to minority shareholders	56.151	1.272
RESULT PER SHARE - BASIC (in euro)	0,71	0,28
RESULT PER SHARE - DILUTED (in euro)	0,71	0,28

Shareholding structure

Source: latest dividend payment (May 2017)