Prima Industrie — Investor Presentation 2020

May 26, 2020

It's in our nature to evolve

Gianfranco CarbonatoChiara Roncolini

Executive Chairman - Prima Industrie SpA Investor relations Manager - Prima Industrie SpA

AT A GLANCE M€

‣INCORPORATED IN 1977

• ‣LISTED IN 1999 (20 YEARS)
• ‣8 PLANTS IN ITALY, FINLAND, USA, CHINA
• ‣SUBS & BRANCH OFFICES IN ADDITIONAL 25+ COUNTRIES
• ‣ 5%+INVESTMENT IN R&D
• ‣^≈1800 PEOPLE
• ‣13,000+ MACHINES IN 80+ COUNTRIES

2019 RESULTS

428 M€ SALES9 M€ NET PROFIT

3FINANCIALS

2D – 3D Laser Collegno (ITALY)

Laser –Electronic systems – Barone C.se (ITALY)

Electronics –Moncalieri (ITALY)

Panel Benders – Press brakesCologna V.ta (ITALY)

Punching – Combi – Systems – Seinajoki (FINLAND) WW HQ & TECH CENTER – Turin (ITALY)

Sales & service – Munich (GERMANY)

CHINA HQ – Suzhou US HQ – Chicago

Convergent Lasers – Chicopee (USA) Laserdyne – Minneapolis (USA)

OUR BRANDS

LASER AND SHEET METAL FABRICATION MACHINERY

ELECTRONICS AND LASER TECHNOLOGIES

METAL ADDITIVE MANUFACTURING SOLUTIONS

REVENUES BY TECHNOLOGY31/12/2019

31/12/2019

EMEA62%

18.0% ITALY 9.5% EASTERN EU7.3% NORTH & BALTIC7.2% D-A-CH6.9% SPAIN & PORTUGAL11.4% OTHER EMEA1.7%OTHER M.E.& AFRICA

AMER25%

21.7% USA3.3% OTHER AMER

APAC

13%

9.9% CHINA3.1% OTHER APAC

PEOPLE 31/12/2019

TOTAL: 1781 EMPLOYEES

EMEA

ITALYFINLANDD-A-CHSPAINRUSSIAEASTERN EUFRANCEUK

TURKEY

AMERUSA

APACOTHER AMER

CHINAOTHER APAC

CUSTOMER FIRST

• Wide range of services for the whole life cycle of the system
• 500 skilled field service engineers around the world
• Training and Technology Centers with specialists dedicated to consultation, tests, cycle time studies, training
• 24-hour hotline service and delivery of consumables and spare parts for regular maintenance assured in 8 to 24 hours
• Online Industry 4.0 services, e.g. Fleet Management, Teleservice, spare parts online order, AR applications

THE MACHNE TOOL MARKET

FINANCIALS Source: VDW and Oxford Economics; 2019 and 2020 are company's estimates based on public data from associations

13

The coronavirus pandemic has dashed hopes for an MT recovery, making a sharp contraction this year inevitable – though a strong rebound is expected in 2021 as activity returns to normal. However, prior to the outbreak, domestic orders had weakened considerably in H2 2019 suggesting a much deeper contraction in MT demand. We expect global MT consumption to drop by 28.3% in

2020 before rebounding by 33% in 2021.

STRENGHTS

Cutting-edge technology

Brand recognition

Strong reference customers' base and after-sale business

Worldwide presence (sales & service)

Leadership in Niche Markets: among first 3 worldwide

Wide product range: one-stop shop

Listed since 20 years (transparency, reliability)

Fiber Laser know-how and service

OPPORTUNITIES

CF (fiber) laser cost reduction and volume increase AM entry with Prima CF/CS lasers and 3D products Trend to Automation and unmanned mc/systems Recovery of automotive markets driven by electric revolution

New space economy to be exploited

Good positioning to seize opportunities from digital revolution

WEAKNESSES

Complex organization (History of M&A)

Short term profitability (Ebit) impacted by

investments in technology and markets

Cyclical market (Capital Goods)

Still M/T indebtness from past M&A and TWC, even if well under control

THREATS

Commoditization of stand alone mass products

Low price competition from new players from low cost countries

Market trend from Capex to Opex

Size vs. market leaders

Prima products are present on two different market segments, with very different features

AUTOMOTIVE SECTOR IS STRUGGLING

• The automotive industry was facing major challenges around the world: electrification, autonomous drive and new ownership business models.
• The impact of Covid-19 struck very hard, with sales in Europe down 70-80 % in March/April 2020.

On the opposite China, which was impacted earlier by both the automotive crisis and the pandemic, is showing the first signs of a recovery.

OUTLOOK

• The car industry is expected to recover in the medium term.
• The pandemic could have eventually a positive impact towards a shift from public transportation to private vehicles.
• 3D laser cutting of hot stamped parts is the main application of Prima 3D laser machines and can apply to both fuel and electric vehicles
• Forecast growth of the hot stamping market was 11% (source: Roland Berger).

AERO & SPACE MARKET TRENDS

• • Before the Covid-19 pandemic, the aerospace industry was expected to continue its growth trajectory with commercial aircraft production and strong defense spending.
• • The pandemic hit hard on the civil aerospace: global air traffic has been brought to an almost complete standstill by the COVID-19 outbreak.
• • Experts remain optimistic about the sector's longer-term prospects, saying the industry will recover and that the downturn may spark innovation and revenue diversification
• •Defense aerospace and space economy instead appear to be resilient to the crisis.

PROPRIETARY FIBER LASER TECHNOLOGY

• According to external research (Strategies Unlimited) this sector is expected to grow with an overall CAGR of 5.3% and this includes not only industrial applications but also many other markets that represent an opportunity for Prima (e.g: medical applications).
• Convergent product aligned to the performances of market leader product.
• Vertical company: all the laser components are produced in home with very few elements purchased externally (active fiber and low-tech components), with a strong control of the technologies used. This also made it possible to obtain competitive costs even with volumes significantly lower than competitors, allowing us to look optimistically at the competitiveness that is expected to improve in the future thanks to the growth in production volumes.
• High efficiency diodes state of the art: this sector could represent an additional stand alone market (expected growth rate: doubling volumes between 2017 and 2023).

We are 1 of the 10 companies only controlling this technology worldwide

ADDITIVE MANUFACTURING

• Since several years Prima Industrie is investing in Additive Manufacturing (AM) technologies, leveraging on internal know-how on fiber laser.
• Prima Industrie is one of the few competitors investing in this technology which is expected to further boom in the next years.
• In 2019 AM contribution to Prima Group revenues is still marginal (approx. 2% ) but expected to substantially grow in the next years.
• Prima Additive division (PA) has been established in 2018 and a new dedicated building has been completed in 2019.
• PA is active on both main AM technologies (Powder Bed Fusion and Direct Energy Deposition).
• PA exhibited for the first time at Formnext 2019 in November in Frankfurt (main AM world exhibition).
• A set of new products is currently being introduced to the market.

INNOVATIVE TECHNOLOGY FOR INNOVATIVE APPLICATIONS

22FINANCIALS

Circular Economy

The Prima Additive approach is inspired by the Circular Economy vision as the strategic mean to fully exploit the value of Additive.

Less material usedcompared to traditional manufacturing methods

Design strategies for extending product lifecycle

Possibility to repair parts to return a used product to its original performance

Possibility to add custom parts to existing pieces to add further value without producing new parts

Recycling

of powders to close the material loop

In a circular economy, the value of products and materials is maintained for as long as possible. Waste and resource use are minimized, and when a product reaches the end of its life, it is used again to create further value. This can bring major economic benefits.

ENVIRONMENT

GROUP REORGANIZATION & REFOCUSING

FINANCIALS & BACK UP INFORMATION

-15

R & D 2009-2019

30FINANCIALS

Highlights - FY 2019

Va lue in € / ho d t s us an	A C T 3 1. 1 2. 1 9	A C T 3 1. 1 2. 1 8	D '1 9 v '1 8 s	D '1 9 v '1 8 % s
Or de In ke ta r	4 1 0. 4 1 7	4 7 1. 2 4 5	( ) 6 0. 8 2 8	% -1 2, 9
Ba k log c	1 4 2. 3 3 2	1 6 9. 3 6 7	( ) 2 7. 0 3 5	% -1 6, 0
Re ve nu es	4 2 7. 5 8 2	4 6 6. 9 3 2	( ) 3 9. 3 5 0	-8, 4 %
E B I T D A	3 8. 4 3 2	4 5. 0 5 9	( ) 6. 6 2 7	-1 4, 7 %
E B I T D A %	9, 0 %	9, 7 %	-0, 7 %	/ N A
E B I T	1 4. 3 9 1	2 8. 0 4 1	( ) 1 3. 6 5 0	-4 8, 7 %
E B I T %	3, 4 %	6, 0 %	-2, 6 %	N / A
Ne Re l t t su	8. 8 8 1	2 8 4. 0 5	( ) 2 1 5. 4 0	3, 3 % -6
F C F	( ) 4. 1 9 7	( ) 8. 8 0 2	4. 6 0 5	% 5 2, 3
Ne F in ia l Po i io t t an c s n	( ) 1 0 7. 3 4 3	( ) 7 4. 6 3 9	( ) 3 2. 7 0 4	% -4 3, 8
dc He t a ou n	1. 7 8 1	1. 8 7 1	( ) 9 0	-4, 8 %
( % c alc ula ted the ov er re ve nu es	)
( ) he adc nt in its ou un

NFP	(107.343)	(74.639)	(32.704)	$-43,89$
Leasing Liabilities (IFRS16)	(31.235)	$\sim$
Leasing Liabilities (IAS17)	(7.637)	(8.709)
NFP Adi	(68.471)	(65.930)	(2.541)	3.99

Highlights - 1Q2020

Values in €/thousand		ACT 31.03.20 ACT 31.03.19	Change	Change %
Order Intake	72.825	97.251	(24.426)	$-25,1%$
Backlog	141.289	166.754	(25.465)	$-15,3%$
Revenues	75.051	98.444	(23.393)	$-23,8%$
EBITDA	3.100	7.386	(4.286)	$-58,0%$
EBITDA%	4.1%	7,5%	$-3,4%$	N/A
EBIT	(2.544)	2.051	(4.595)	$-224,0%$
EBIT%	$-3,4%$	2,1%	$-5,5%$	N/A
Net Result	(3.524)	408	(3.932)	$-963,7%$
FCF	(26.491)	(17.461)	(9.030)	$-51,7%$
Net Financial Position	(133.452)	(117.632)	(15.820)	$-13,4%$
Headcount	1.770	1.861	(91)	$-4,9%$

g g
lue ho d Va in € / t	A C T 3 1. 0 3. 2 0	A C T 3 1. 0 3. 1 9	ha C	ha C %
s us an Or de In ke ta r	2. 8 2 7 5	9 2 7. 5 1	ng e ( ) 2 2 4. 4 6	ng e -2 % 5, 1
Ba k log c	1 4 1. 2 8 9	1 6 6. 7 5 4	( ) 2 5. 4 6 5	% -1 5, 3
Re ve nu es	7 5. 0 5 1	9 8. 4 4 4	( ) 2 3. 3 9 3	-2 3, 8 %
E B I T D A	3. 1 0 0	7. 3 8 6	( ) 4. 2 8 6	-5 8, 0 %
E B I T D A %	4, 1 %	7, 5 %	-3, 4 %	N / A
E B I T	( ) 2. 5 4 4	2. 0 5 1	( ) 9 4. 5 5	-2 2 0 % 4,
E B I T %	% -3, 4	% 2, 1	% -5, 5	/ N A
l Ne Re t t su	( ) 3. 5 2 4	4 0 8	( ) 3. 9 3 2	-9 6 3, 7 %
F C F	( ) 2 6. 4 9 1	( ) 1 7. 4 6 1	( ) 9. 0 3 0	-5 1, 7 %
l Ne F in ia Po i io t t an c s n	( ) 1 3 3. 4 5 2	( ) 1 1 7. 6 3 2	( ) 1 5. 8 2 0	-1 3, 4 %
He dc t a ou n	1. 7 7 0	8 1. 6 1	( ) 9 1	% -4, 9
( % c alc ula ted the ov er re ve nu es	)
) he adc in its nt ou un