Prima Industrie — Investor Presentation 2022

Mar 23, 2022

AMERICAS

26%

of revenues

WHO WE ARE

A leader in laser and sheet metal fabrication machines and systems with manufacturing plants in 3 continents

• BUs are Prima Electro, Convergent and Prima Additive)
• ➢ Listed on Borsa Italiana (Euronext) since 1999
• ➢ Focus on innovation (5%+ yearly investment in R&D)
• ➢ Direct presence in 30 countries
• ➢ Large installed base in 80 countries and significant share (30%) of revenues from after-sale services
• ➢ Commitment to ESG values ("green" machines, sustainable factories diversity, gender equity, business ethics)

OUR	1977-1999FROM FOUNDATIONTO IPO
HISTORY	1977		INCORPORATION OFPRIMA PROGETTI
	1978		INCORPORATION OFPRIMAELECTRONICS
	1979		FIRST 3D LASER WW
			ENGINEERING/MECHATRONICSACTIVITY
	1983		PRIMA INDUSTRIESTART-UP
			DIVERSIFIEDINDUSTRIALDEVELOPMENT
			COOPERATIONWITHAMADA
			FOCUS ON LASERBUSINESS
			SALE OF NON COREASSETS
	1992		ACQUISITIONOFLASERWORK
	1995		RECAPITALIZATION
			FIRSTINTERNATIONALEXPANSION(EU-USA)
	1999		FIRST JV IN CHINA
	1999		IPO ITALIAN STOCKMARKET

LASER MACHINES

PRODUCT RANGE

LASER SOURCES SERVICES SOFTWARE

AUTOMATION AND STORAGE

ELECTRONICS

PRODUCT RANGE

NEW EFFICIENT AND SUSTAINABLE PLANTS

LASERDYNE – Brooklyn Park - MN (USA)

2D, 3D LASERS – ADDITIVE WW HQ – Collegno - TO (ITALY)

MAIN PLANTS

"Two trends in vehicle sales and output are making lightweighting even more important:

• the rise of SUV and light truck sales growth,
• the quickening transition to electric vehicles.

These shifts have made it even more important to use lightweight, high-strength materials, for example in reducing fuel consumption. Electric vehicles batteries and battery enclosures add significant weight to vehicles, with manufacturers looking to materials to offset this weight."

Automotive Manufacturing solutions 27/09/21

ORDER INTAKE TREND 1H17-2H21 3D LASER MACHINES FOR AUTOMOTIVE (units)

AUTOMOTIVE MARKET TREND

• Regional commercial air-traffic is improving
• 75% of the aircraft are back in service – most narrow body regional planes
• Recovery to 2019 levels is expected in late 2023

CIVIL AVIATION &SPACE MARKET TREND

• Defense aerospace and space economy instead appear to be resilient to the crisis.
• Launching satellites driven by demand for data (by autonomous cars, IoT, A.I., VR, video,..)

COSTRUCTION AND BUILDING MARKET TREND

Urbanization remains a major demographic trend across much of the world.

This future growth will provide a continuous and increasing request of public and private infrastructure

Building sub -segment impacted: ELEVATORS LIGHTING STEEL DOORS PANELS HVAC HEATING EQUIPMENT VENTILATION EQUIPMENT COOLING EQUIPMENT

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MECHANICS & MACHINERY

ELECTRONICS, MEDICAL & OTHERS

SELECTION OF MAIN CUSTOMERS

USD/Bln

1992 FIRST GULF WAR

Source: VDW and Oxford Economics.

"UP-PERIOD" of 7-8 years

SECULAR GROWTH

MACHINE TOOL WORLD MARKET

13 Source: Cecimo/Oxford Economics – October 2021

Source: elaboration by UCIMU on data from Oxford Economics , ITC, Gardner, national associations

MARKET OUTLOOK

Overview table% change
	2020	2021	2022	2023	2024	2025
Apparent consumption
World	$-14.8$	16.3	11.1	5.8	3.8	29
Americas	$-18.1$	23.8	16.0	6.2	22	1.3 1
Asia	$-11.6$	16.3	7.9	5.4	4.6	3.6
Europe	$-20.2$	10.9	15.3	6.5	3.1	23

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1

2

diversified macro trends

3

high number of machines installed

• Innovation leader with strong technological skils and know-how (mechatronics, opto-electronics, automation and software)
• strong geographical distribution worldwide and high diversification
• of industries served, which are impacted by different cyclicality and
• an important share of revenues coming from after sales activities (approx. 30%), which represent a stable source of sales linked to

PRIMA'S MAIN ASSETS

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Main drivers which spark innovation are customers' need for production plants that are always more automated, connected, efficient, and with a low impact on the environment.

Our Group is a leader in Industry 4.0 technologies with IoT and cloud solutions for efficient management of systems and data, augmented reality and predictive models for machine use, maintenance, training, and remote assistance.

We are also investing in new technologies that will shape the future of manufacturing industry such as: artificial intelligence, machine learning, digital twins, 5G. It is our mission to enhance our customer profitability through advanced, reliable, and autonomous production systems.

In the meantime, we are also strongly working in digitalization of all business processes, both internal and on those aimed at relations with customers and other relevant stakeholders.

INNOVATION &DIGITALIZATION

Prima Power offers customers a leading-edge technology for Remote Care service.

In case of unexpected alarms, thanks to Prima Power remote care, alarms can be diagnosed and fixed remotely. When customer's machine is stopped, with remote monitoring tools it is possible to speed up troubleshooting and make sure that customer's machine is again up and running.

Augmented reality: innovative remote assistance The customer's technicians, equipped with smartphones or tablets, can communicate remotely and share video images in real time with our experts.

Mixed reality assistance: virtual view

Technological glasses which allow physical reality to interact with holograms. Thanks to proprietary applications loaded on these glasses, Prima Power applies the enormous potential of mixed reality to remote assisted training and maintenance activities.

CUSTOMER SERVICE AND REMOTE CARE

Net Promoter Score 2022 CUSTOMER SATISFACTION SURVEY (carried out by an independent assessor)

Question: "Would you purchase another Prima Power product again and would you recommend them?"

The Net Promoter Score is an index ranging from -100 to 100 that measures the willingness of customers to recommend a company's products or services to others.

NPS above 70 is considered good irrespective of the industry.

Net Promoter Score for Prima Power in 2022 is

NPS is a key driver for sustainability and excellent results.

NET PROMOTER SCORE

Growing commitment to sustainability and ESG targets

• Machines and plants increasingly environment friendly
• Particular attention to human resources representing a fundamental asset for the future of the Group (smart working, diversity, training, talent retention)

SUSTAINABILITY

• Employees who can work in agility mode
• Employees with high school or university degrees

FINANCIALS HIGHLIGHTS

All 2021 financial performances improving vs 2020

P&L FY2021

* Impairment impact in 2020 equal to 8,5 Mln Euro affecting bottom line

YTD Dec '21	YTD Dec '20	Change '21 vs'20
305,9	243,9	62,0
35,9	32,5	3,4
65,8	56,6	9,2
407,6	333,0	74,6
(319, 1)	(264, 2)	(54, 9)
88,5	68,8	19,7
21,7%	20,6%	115 bps
(22, 6)	(28, 4)	5,8
(26,7)	(23,3)	(3,4)
(25, 0)	(22,3)	(2,7)
14,2	(5,2)	19,4
3,5%	$(1,6%)$	505 bps
10,2	(10, 5)	20,7
(2, 2)	3,1	(5,3)
8,0	(7, 4)	15,4

16,7	$\vert 6, 5 \vert$	10,2
4,1%	2,0%	215 bps
35,7	28,4	7,3
8,8%	8,5%	23 bps

+75% new machines vs 2020 +15% after sales vs 2020

ORDER ACQUISITION 2021 503 M€ +56% (vs 2020) +23% (vs 2019)

+ 72% Y/Y

+ 73% Y/Y

BACKLOG 1/1/22 215 M€ BACKLOG 28/2/22 249 M€

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ORDER ACQUISITION AND BACKLOG

ANALYSTS' CONSENSUS

	2021						2022				2023
	B. IMI	Mediobanca	Akros	Consensus	Actual	B. IMI	Mediobanca	Akros	Consensus	B. IMI	Mediobanca	Akros	Consen
REVENUES	383,0	404,0	393,0	393,3	407,6	450,0	454,0	458,0	454,0	500,0	488,0	501,0	49
EBITDA	34,5	33,4	30,1	32,7	33,4	47,3	46,0	47,6	47,0	65,0	58,1	59,2	6(
EBITDA %	9,0%	8,3%	7,7%	8,3%	8,2%	10,5%	10,1%	10,4%	10,3%	13,0%	11,9%	11,8%	12,
EBIT	14,0	13,6	9,7	12,4	14,2	28,0	24,8	25,2	26,0	45,7	36,9	36,5	$3^{\circ}$
EBIT %	3,7%	3,4%	2,5%	3,2%	3,5%	6,2%	5,5%	5,5%	5,7%	9,1%	7,6%	7,3%	8,
vet result	7,4	6, 8	3,0	5,7	8,0	18,6	14,8	14,1	15,8	31,2	23,1	22,4	$\mathbf{2}$
NFP
w/IFRS 16)	$-89,3$	$-86,9$	$-95,4$	$-90,5$	$-68,4$	$-48,9$	$-77,8$	$-85,7$	$-70,8$	$-20,4$	$-55,1$	-64	-4

TP 24.3 TP 22.6 TP 26.5 BUY OUTPERFORM BUY 16/03/2022 09/12/2022 20/09/2021

GLOBAL CHALLENGES AND MITIGATION ACTIONS

Due to the relatively small share of exports to Russia (around 3.45% of the CECIMO Total MT exports), it is not expected to have a significant impact on the European TM sector on a global scale. The most significant impact for European manufacturers could be on energy prices (gas, fuel), as well as on the prices of some materials (steel, titanium, aluminium, palladium, vanadium). - Source: CECIMO

RUSSIA-UKRAINE CRISIS

Source: Alix Partners

PRIMA POWER RUSSIA

Commercial subsidiary established in 2010 with total staff of 40 people • Spare parts stock in Moscow and modern showroom opened in 2018 • Good customer base for After sales (+900 machine sold and active) • No significant financial exposure at Group Level • Revenues equal to 3,8% of Group turnover (2021).

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RAW MATERIALS & COMPONENTS EVENT MITIGATION ACTION

2022 New increases:

• due to the war between Russia and Ukraine (particularly on Carbon steel)
  • amplified by speculation (which makes prices extremely volatile)
    • Increases expected in the range 20%-55%

2021 Increase in the cost of raw materials	Increase in price list(mid year and year end)
2022 New increases:due to the war between Russia and Ukraine(particularly on Carbon steel)•amplified by speculation (which makesprices extremely volatile)	Negotiating contracts with suppliersPossible new price list increases
Increases expected in the range20%-55%	Final effect expected on product cost (due tothe incidence of metallic components)2%-10%
EVENT	MITIGATION ACTION
Problem with availability(more than pricing)Caused some delays in delivery in 4Q21 and1Q22	Important engineering activity to modifyprojects in order to replace unavailablecomponents
2022 shortage could turn ….	…into excess of offer in 2023

Problem with availability

Due to the ww significant investments in production capacity for semiconductors

RAW MATERIALS

ELECTRONIC

COMPONENTS

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BUSINESS PLAN '21-'23 MAIN TARGETS

GROWTH IN REVENUES TO 500+ M€

IMPROVEMENT IN MARGINALITY WITH EBITDA 13%

POSITIVE NET FINANCIAL POSITION

(EXCLUDING IMPACT FROM IFRS16 AND EXTRAORDINARY OPERATIONS)

ENHANCEMENT OF PRESENCE IN APAC MARKET

Investments in south-east Asia, China and other APAC Countries to increase market share.

• New Global Organization ("thinkglobal.servelocal") oriented towards Customer Satisfaction.
• Growth through a more efficient employment of human resources and new digital technologies (Remote

Troubleshooting, Augmented Reality, Predictive Maintenance).

EVOLUTION OF THE PRODUCT RANGE FURTHER GROWTH IN AFTER-SALE REVENUES

Through major investments in software and automation and introduction of a new family of "volume booster" products.

MAIN ACTIONS FOR TOP LINE IMPROVEMENT

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Reduction of installation times and costs, also thanks to the use of new digital technologies. Centralization of Procurement function

EFFICIENCIES IN INSTALLATION AND PROCUREMENT

Updating and integration of ERP and PLM systems, rollout of PST system for the After-Sale management

GREATER DIGITALIZATION OF BUSINESS PROCESSES

With the completion of the new factory in Collegno (Torino), after the actions already concluded in the recent years in Suzhou (China) Seinäjoki (Finland) and Minneapolis (USA)

RATIONALIZATION OF THE PRODUCTION FOOTPRINT

Launch of a new streaming platform called "Prima@Home" to create digital events and open houses and arrange virtual

demonstrations for customers without the need for them to move and travel to the Group's showrooms.

REDUCTION OF TRAVEL AND EXHIBITIONS COST

MAIN ACTIONS FOR MARGIN IMPROVEMENT

PRIMA ADDITIVE BUSINESS UNIT TRANSFORMATIONAL GROWTH PLAN IN PROGRESS

• After slow down in 2020/2021 (Covid) market is recovering and strong growth is expected/confirmed in

• mid-term, but substantial business model evolution will be necessary

• Significant investments will be required:

  • In R&D to improve product performance (productivity)
  • In S&M to improve distribution network and model ("servitization")

• Due to its small size, PA is not adding value to PI market cap while a multiple of sales is current evaluation method in AM sector

• Merge PA with start-up 3D-NT – PI will remain controlling shareholder of the newco

• Signing of 10 years strategic agreement with a non-competing world leader in AM

• Private equity investment in PA for a minority stake – Evaluation as per market standards

• After dilution, PI to remain the main investor and PA to be "free-to-fly"

PARTNERSHIP FROM CONCEPT TO FINAL PRODUCT

• Good 2021 in spite of component shortage/costs - REVENUES +15%
  • - EBITDA 11%
• Enhanced cooperation with main customers with new innovative projects
• E-mobility market prospects: LoI in place for proprietary converters for superfast charging applications

HI-TECH SOLUTIONS FOR NEW APPLICATIONS

PRIMA ELECTRO & CONVERGENT BUSINESS UNITS

• In 2021 significant step forward for BU turnaround foreseen in 2021/2023 Business Plan - REVENUES +21%
  • - EBITDA positive in 2H21
• Strong growth of revenues in medical segment
• Development of hi-tech products for new applications
• Progressive diversification from commoditized high power industrial market

MERGERS AND ACQUISITIONS

M&A

Looking at the market for catching opportunities in order to improve our presence in specific areas, for extending product range or increasing profitability

LEAD LASER

Renewed agreement for increasing stake up to 60% Time to exercise Call/Put option: before March 31st, 2024 Reinforcing cooperation for new joint product developement

GEOGRAPHICAL EXPANSION

After Covid restrictions, restarted the plan to extend presence in countries with significant potential growth

BUSINESS PLAN '21-'23 TARGETS CONFIRMED

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THANK YOU