Prima Industrie — Investor Presentation 2019

Apr 11, 2019

Welcome to the forefront of innovation.

Mid & Small in London 11th April 2019 The Tower Hotel - London

• ‣ 40+ YEARS
• ‣ 20 YEARS LISTED
• ‣ 466.9 €M SALES
• ‣ 1800+ PEOPLE
• ‣ 8 PLANTS
• ‣ R&D COMMITMENT (5%-6% on sales)
• ‣ 13,000+ INSTALLATIONS
• ‣ 80+ COUNTRIES

+4% Increase in revenues

+14% Increase in adjusted EBIT

+29% Increase in Net Profit

2018 RECORD YEAR

SHEET METAL PROCESSING MACHINES & SYSTEMS

ELECTRONICS & LASER SOURCES SERVICES ADDITIVE MANUFACTURING

OUR MARKET COVERAGE THROUGH DIRECT PRESENCE AND DISTRIBUTORS & AGENTS

NEXT TO YOU

IN OVER 80 COUNTRIES WORLDWIDE

OUR GROUP | WORKFORCE BY REGION

2015-2019: STRATEGIC ACTIVITIES

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.

The high tech laboratories host research activities focused on the field of high

power optoelectronic semiconductors for the latest generation of lasers

Number of lasers delivered

430.000 kWh/anno*

Risparmio energetico:
300 ton di CO₃ - 100 tep

75.000

Wh/anno

Risparmio energetico
50 ton di CO₃ - 17 tep

◈ 85.000
kWh/anno Risparmio energetico:
60 ton di CO₃ - 20 tep 璺 20.000

Risparmio energetic
20 ton di CO, - 5 tep

kWh/anno

$\widehat{\mathbb{F}}_{\mathbb{Q}}$ 250.000

Risparmio energeti
170 ton di CO₃ - 60

re di risparmio energetico rispetto
stemi tradizionali espressi in kW/ar

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.

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.

most important market in Europe after Italy, with 5% of revenues and an installed base of over 1000 machines.

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.

Revenues

€

Despite a more complex trading environment with some experts seeing a temporary peak in certain countries/markets, the medium-term outlook still looks positive for machine tool producers. Some of the main industry drivers supporting the medium-term prospects are as follows: • the increasing automation in the manufacturing process worldwide and, more in general, from the

• the decline in product lifecycles and consequent increase in the variety of products that require more

• modernization of the production facilities;
• flexible systems;
• production systems and machines;

• the continuous quality improvements also to be obtained through more sophisticated and precise

Based on Oxford Economics' forecasts (autumn 2018), global machine tool consumption is expected to grow at a 3% CAGR in 2018-2022, after reaching around USD 78bn in 2017 (of which USD 14bn generated from laser systems for materials processing).

Within the machine tool industry laser-based systems are increasingly gaining share inside the material processing segment given the greater precision, processing speeds and flexibility enabled by this technology. Moreover, because laser energy can be delivered remotely with greater precision and power, the trends towards automated production and increasing product complexity and flexibility are helping drive adoption of laser technology.

Global AM market

Development of metallic AM market¹⁾ 2000-2022 [EUR bn]²⁾

Source: Expert interviews; Wohlers Associates (2017); Canalys (2016); MarketsAndMarkets (2016); Smithers Pira (2016); Roland Berger

J_K Prima
Additive

Metal Additive manufacturing market

• For 2004 to 2016, the over-all AM market showed an annual growth (CAGR) of ~20%

• $-$ In 2016 growth softened, mainly due to weak performance of polymer players (Stratasys and 3D) Systems)

• The market is expected to multiply by a factor of two to five by 2022

Source: Wohlers Associates, Inc.

COMMON FACTORS HIGHLIGHTED

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

RESILIENCE PHASE THANKS TO DIVERSIFICATION IN:

• Geographic markets
• Industries addressed
• Product portfolio

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

-2018 €/mio

NET RESULT 2009 -2018

€

/mio

NFP

Debt/Equity

M/L term debt refinancing on main operations

Banks involved:

Type	Counterparty	Amount (M€)	Interest rate %	Maturity	Timing for reimbursement	Type	Counterparty	Amount (M€)	Interest rate %	Maturity
BOND	INSTITUTIONAL INVESTOR 1	40	5,875	2022	March 2018	BOND	INSTITUTIONAL INVESTOR 2	25	3,50	2025
TERM LOAN	IT BANKS CLUB DEAL	23	3,03	2021	March 2018	TERM LOAN	BANK 1	25	2,08	2022
TERM LOAN	FINN BANKS CLUB DEAL	20	Euribor +2,50	2020	December 2017	TERM LOAN	BANK 2	20	1,75	2022
TERM LOANS	SEVERAL BANKS INSTALMENTS	25	Euribor +1,75 average	2018/19	2018/2019	TERM LOANS	SEVERAL BANKS	45	1,50	2022/2023
	TOTAL	108	3,70	2018/2022			TOTAL	115	2,10	2022/2025

□ Prima Power

■ Prima Additive

Released March 12, 2019

Released March 11, 2019

		2019			2020
	B. IMI	Mediobanca	B. Akros	Consensus	B. IMI	Mediobanca	B. Akros	Consensus
	29,0	26,0	28,5		29,0	26,0	28,5
	BUY	NEUTRAL	BUY		BUY	NEUTRAL	BUY
REVENUES	480,9	474,4	474	476,4	495,4	476,8	482	484,7
EBITDA	55,8	5 4	5 6	55,3	59,4	54,4	5 9	57,6
EBIT	38,8	36,7	3 8	37,8	42,4	36,9	4 1	40,1
NET RESULT	26,6	25,4	2 5	25,7	29,4	2 5	2 7	27,1
NFP	-63,7	-52,2	-59	-58,3	-50,5	-33,7	-37	-40,4

OUR GROUP | REGIONS WE SERVE

NORTH&BALTIC 10,1%

EASTERN EUROPE 8,6%

D - A -CH 6,4%

SPAIN&PORTUGAL 6,3%

OTHER EMEA 12,2%

EMEA 62%

OUR GROUP | INDUSTRIES WE SERVE

1,4% - Healthcare

and Medical 13,3% - Mechanics & Machinery

13,4% - Steel Furniture & Panels

OSAI Motion Control and CNC's

ELECTRONICS AND

LASER TECHNOLOGIES LASER AND SHEET METAL MACHINERY

THE LASER

2D and 3D laser machines for cutting, welding and drilling

THE COMBI

Integrated systems punch+laser

THE PRESS THE SOFTWARE

Smart solutions to connect your machines and maximize productivity

THE SYSTEM

FMC & FMS to automate your production flow

THE PUNCH THE SHEAR

Servo-electric panel benders and bending centers

Integrated systems punch+shear

Servo-electric turret punch presses

Servo-electric and hydraulic press brakes

CONVERGENT Fiber and CO² Laser sources

PBF

METAL ADDITIVE MANUFACTURING SYSTEMS

LMD

Powder Bed Fusion Systems

Laser Metal Deposition Systems

INDUSTRY 4.0

RIE TECHNOLOGIES ENDI PRIM STRY 4.0

‣ ENERGY SAVING FOR THE CUSTOMER ‣ LOWER EMISSIONS FOR THE ENVIRONMENT

GREEN MEANS COMBINES

64% 82% ~13%

CO² emissions reduction with our servo-electric panel benders

Energy saved by our servo-electric punching with ECOPUNCH® technology

Scrap material reduction with our punchshear technology

Yearly CO² emissions reduction thanks to the shift from CO² laser sources to fiber laser sources 55,219 30,214

OUR GROUP IS

THE LASER TECHNOLOGY

THE BENDING TECHNOLOGY

-45%

THE PUNCHING TECHNOLOGY

Certified by University of Padua

Comparison is made with competitors' traditional hydraulic machines

Highlights

Values in €/thousand	ACT 31.12.18	ACT 31.12.17	Change	Change %
Order Intake	471.245	480.640	(9.395)	-2,0%
Backlog	169.367	169.865	(498)	-0,3%
Revenues	466.932	449.503	17.429	3,9%
EBITDA	45.059	43.178	1.881	4,4%
EBITDA%	9,7%	9,6%	0,1%	-
EBIT	28.041	26.296	1.745	6,6%
EBIT%	6,0%	5,9%	0,1%	-
Net Result	24.058	18.668	5.390	28,9%
FCF	(8.802)	21.878	(30.680)	-140,2%
Net Financial Position	(74.639)	(69.632)	(5.007)	-7,2%
Headcount	1.871	1.781	9 0	5,1%

( % calculated over the revenues)

(headcount in units)

Values in €/thousand	ACT 31.12.18	ACT 31.12.17	Change	Change %
Revenues constant FX	476.553	449.503	27.050	6,0%
EBITDA adj	47.904	45.063	2.841	6,3%
EBITDA adj %	10,3%	10,0%	0,3%	-
EBIT adj	32.212	28.205	4.007	14,2%
EBIT adj %	6,9%	6,3%	0,6%	-

( % calculated over the revenues)

• Revenues up +6,0% at constant exchange rates.
• Prima Electro recovery in revenues and margins.
• EBIT Adj at 6,9% slightly better than Dec 2017.
• expenses.

Change	Change %
(9.395)	$-2,0%$
(498)	$-0,3%$
17.429	3,9%
1.881	4,4%
0,1%
1.745	6,6%
0,1%
5.390	28,9%
(30.680)	$-140,2%$
(5.007)	$-7,2%$
90	5,1%

Net Profit growth thanks to EPS gain but negatively affected by non recurring costs and refinancing

Source: company info + official communications to Consob

LEE Joseph (directly or through World Leader Ltd.) 10,01%

YUNFENG GAO (through Sharp focus International Ltd) 9,98%