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Prima Industrie Investor Presentation 2018

Oct 23, 2018

4210_rns_2018-10-23_024c3c65-be52-41e7-bfcd-e50e0c7910fb.pdf

Investor Presentation

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Innovation is looking beyond.

STAR Conference - London 2018 - October 23rd

IINFO

DIGITAL
SIGN

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 13,000 machines installedin more than 80 countries
  • • 1,781 employees worldwide(~50% in Italy)
  • • Manufacturingsites in Italy, Finland, USA and China
  • • Broad direct commercial and after-sales presence in EU, NAFTA, BRICand other emerging markets.
  • • 2017 sales were € 449.5 millions (+14%), of which 85% outsideItaly.
  • • Strong commitment to innovation(R&D is 5.2% of turnover) turnover)
  • • Listedon Italian Stock Exchange (STAR segment) since 1999

Prima Group business sectors: Prima Power

LASER MACHINES

SHEET METALMACHINERY

Prima Group business sectors: Prima Electro

ELECTRONICS

LASER SOURCES

Our presence in the world

Prima Industrie at a glance

PHOTONICS LLC Champlin, MN - USA Chicopee, MA - USA

LASERDYNE LLC

PRIMA INDUSTRIE HEADQUARTERS AND TECH CENTER Collegno (TO) - Italy Collegno (TO) - italy Cologna Veneta (VR) -
Italy PRIMA ELECTRO SPA Moncalieri (TO) - Italy

Barone (TO) - Italy

PRIMA POWER SUZHOU CO. LTD Suzhou, China

OTHER 50+ COUNTRIES SERVED WITH AGENTS &DISTRIBUTORS

2015-2019: 5 YEARS OF STRONG INVESTMENTS

Mar 2015 - New Plant in Suzhou (China) – 6.8 M€

The plant, which covers a surface equal to 8.000 square meters, hosts manufacturing, sale and after-sale activities for a wide set of metal sheet processing machines.in addition to manufacturing area and HQ offices, the plant hosts a large show room destined to welcome Chinese and Asian customers.

Oct 2015 – Diode Fab for Fiber Lasers (Torino) – 7.5 M€

The high tech laboratories host research activities focused on the field of high power optoelectronic semiconductors for the latest generation of lasers

May 2016 - New HQ and Technology Center in Torino – 15.0 M€

The HQTC it is structured in 5000 square meters of which 2500 are dedicated to the corporate offices and 2500 dedicated to the Demo Room and to the hospitality of the customers. The Demo Room hosts 10-12 Prima Power machines, including a whole production line.

Jun 2018 – Investment in Lead Laser Cangzhou (China) – 6.7 M€

Prima Industrie, through Prima Power brand, already holds a significant share of the Chinese market of high-end machines (3D laser, systems, panel benders), while it still has a limited presence in the market of 2D laser machines. This investment is aimed at increasing the Group's market share in the Chinese market of 2D laser machines, the largest in the world in terms of size and growth rate.

Jun 2018 – New facility in Munich (Germany) – 4.0 M€

Dec 2018 – R&D + Additive Manufacturing facility in Torino – 6.0 M€

The facility, structured on approx. 3,300 sqm, represents an extension of the HQTC to host the new Prima Additive division in addition to the R&D employees of laser machines development and relevant labs.

Nov 2018 – Finn-Power Oy new Plant in Seinäjoki (Finland) – 21.0 M€

Finn-Power OY is constructing a new, modern and more efficient building (factory & offices) in the City of Seinäjoki Seinäjoki, replacing current location in , Kauhava Kauhava. The new plant is being built . is built- to-suit by a local municipality finance company and will be rented to Finn-Power. Seinajokioffers a more convenient location in terms of infrastructures, accommodations and hosts several schools and a university.

A history of growth

Growth is slowing down

In 2017, the global industrial economy was in its strongest position for at least three years, supported by buoyant global trade. But growth has now peaked, and rising trade tensions come at a time when global industrial activity is already slowing. Despite the global industry slowdown, economic fundamentals remain solid, and will support some growth even amid the intensifying trade frictions.

The weakening of the internal and external growth consensus is confirmed: uncertainties related to the American commercial policy, slowing of growth in various European economies, progressive increase in interest rates, generalized climate of mistrust of companies and families. The slowdown inItalian exports is more pronounced than in other European countries. This can be attributed to the less positive performance in some specific sectors (automotive, agricultural machinery, ..) and performance specific ..) destination markets (China, Japan, Russia).

IPG Photonics announced that it expects revenue for the 3Q18 to be approximately USD355-356m vs old estimates of USD360-390m. In addition, the company added that it expects FY revenue growth to be below the 7-9% range provided on July 31, 2018. Management mentioned that the tariff and trade-related headwinds were the primary driver of weaker than expected performance for business in China and Europe.

Customers in China were more cautious due to heightened political and macroeconomic uncertainties, while order intake in the Americas continued to grow.

We are monitoring the global economy's development very closely. There are increasing signs that this long phase of recovery could soon be over. We want to be prepared for that. In the current fiscal year, despite the general slowdown of the global economy, TRUMPF expects to generate business with a similar level of profitability.

COMMON FACTORS HIGHLIGHTED

  • •Slow-down of investments in China / Trade war effects
  • •Uncertainty scenario in Italy
  • •Slow-down of investments of automotive sector

RESILIENCE PHASE THANKS TO DIVERSIFICATION IN:

  • •Geographic markets
  • • Industriesaddressed
  • •Product portfolio

Overcomethe slow down with growth

INTERNAL GROWTH ENGINES

  • •Fiber laser & Diodes investments: boost in profitability expected
  • •Lead Laser investment: fully exploit the relationship
  • •Additive Manufacturing: add on to turnover and profitability

Market trends: machine tool & laser machines market

Global Machine Tool Consumption in 2017: ~\$78B Global Laser Systems for Materials Processing in 2017: ~\$14B Laser Systems 18% of Worldwide Machine Tools and Growing

Source: Oxford Economics, Optech Consulting and IPG Photonics Corporation

Source: Optech Consulting and IPG Photonics Corporation

$$3B$ $$2B$ Other Laser Sources $$1B$ Fiber Lasers $$OB$ 2015 2016 2017 2018 2019 2020 2021 2022 2023

Fiber Lasers a Growing Percentage of Annual Demand for High-Power Industrial Laser Sources

Economic trends

OUR GROUP - KEY INDICATORS

VALUE IN EURO MILLION

R&D EXPENSES

GROUP NET RESULT

$21$

Net financial position trend

* = according to Company's business plan

M/L termdebt refinancing on main operations

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Banks involved:

Quarterly order intake since 2011

Analysts' consensus

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Released August 3, 2018

Released August 3, 2018

Released August 29, 2018

Machine revenues by application(2017)

Regional Highlights (2017)

Revenues by technology (2017)

Group Employees

OUR GROUP - EMPLOYEES

VALUE EXPRESSED IN UNITS PRIMA GROUP EMPLOYEES, 2012 - 2017 1.781 1800 1.664 1.643 1.579 1600 1.530 1.521 1400 1200 $1000 -$ 2012 2013 2014 2015 2016 2017 $+ 117 (7%)$ in 2017

Collaboration with Politecnico di Torino for Master in:

  • Industrial Automation
  • Additive Manufacturing
  • Industry 4.0

AVERAGE EMPLOYEE AGE: 39 INVESTMENTS IN YOUNG TALENTS: +140 (8%) HEADCOUNT IN 2018 (of which 50 in Italy)

Competitive & Comprehensive product range

State-of-the-art laser and electronic technologies

Focus on CF fiber laser family

ELECTRICAL & VENDING EQUIP. - OTHERSA selection fromour 2,000 customers ww

Prima Power Solutions for Industry 4.0 and Smart Manufacturing

Ready for today's production needs…and for tomorrow

INTELLIGENT MACHINES & FACTORIES

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

SMART SOFTWARE REMOTE DIAGNOSTICS & MAINTENANCE

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

New Additive Manufacturing division

Highlights from financial statements as at Jun. 30, 2018

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  • Revenues up +11,0% at constant exchange rates
  • Prima Electrorecovery in revenues and margins
  • EBIT(adjusted) improvement (+8.1%)
  • Sustained Net Profit growth thanks to EPS gain but negatively affected by non recurring costs and refinancing expenses.
  • Improvement of Net Debt: +19.9 M€ (vs Jun'17).

Shareholding structure

Source: company info + official communications to Consob

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