Sit — Investor Presentation 2021

May 12, 2021

Q1 2021 – Results presentation

Highlights

• Q1 consolidated revenues are € 92,7m, +26,2% vs Q1 2020 (19,4% at same perimeter)
• Q1 Divisional sales:
  • Heating accounts €70,5m, +25% vs same period of 2020
  • Metering with €21,3m is +30% vs previous year, counting new Water metering business (€4,8m)
• In the Heating business all geographies have increased. America is +40% thanks to recovery in Direct Heating Fireplaces and positive trend in Storage Water Heating. Asia/Pacific is +50% (covid impact in Q1 2020) while Italy and Rest of Europe are +23,4% and +14,0% respectively
• Q1 EBITDA margin of 16,2% and absolute increase of 69,0% accounting €15,1m vs €8,9m thanks to volumes and efficiencies with a better than average contribution of new Water metering business
• One off tax revenue of €1,8m for Patent Box ruling
• Net debt at €110,4m vs €115,8m at end of 2020
• Cash flow from operations for €6,9m vs -€19,4m of same period previous year

Key financial results

, unless otherwise stated €m	Q1 21	%	Q1 20	%	Chg YoY
Revenues	92	0%	73	0%	2%
	7	100	4	100	26
	,	,	,	,	,
EBITDA	15	16	8	12	69
	1	2%	9	1%	0%
	,	,	,	,	,
EBIT	9	10	3	4	180
	2	0%	3	5%	8%
	,	,	,	,	,
EBT	7	8	4	6	57
	7	3%	9	7%	3%
	,	,	,	,	,
Net income	8 0 ,	8 6% ,	4 2 ,	5 7% ,	91 7% ,
Net	7	8	3	5	89
Income	4	0%	9	3%	7%
adjusted	,	,	,	,	,
Cash flow from operations	6 9 ,		(19 4) ,
NTWC	53 4 ,		9 57 ,
financial debt Net	110 4 ,		101 6 ,

• Q1 revenues account 26,2% growth (19,4% at same perimeter)
• Divisional trends:
  • Heating: +25,0%
  • Metering: +30,0%
• EBITDA at €15,1m vs €8,9m improves by 69,0%
• EBIT at 10% of revenues
• Net income of €8,0m includes one off tax revenue for Patent Box ruling of €1,8m
• Net income adjusted at 8,0% of revenues makes significant improvement vs previous year 5,3%
• Cash flow from operations is €6,9m after capex for €3,9m
• NTWC improves vs previous year even after JANZ consolidation
• Net financial debt stands at €110,4m vs 2020-year end of €115,8m

Breakdown by Division

, unless otherwise stated €m	Q1 21	%	Q1 20	%	Chg . YoY
Heating	70 5 ,	76 1% ,	56 4 ,	76 8% ,	25 0% ,
Metering	21 3 ,	17 7% ,	16 4 ,	22 3% ,	30 0% ,
Total business sales	91,8	93,8%	72,7	99,1%	26,1%
Other revenues	0 9 ,	0% 1 ,	0 7 ,	0 9% ,	35 2% ,
Total revenues	92,7	100,0%	73,4	100,0%	26,2%

Breakdown by geography

€m , unless otherwise stated	Q1 21	%	Q1 20	%	Chg . YoY
Italy	28	31	26	35	10
	9	2%	1	6%	8%
	,	,	,	,	,
(excuding	39	42	30	42	27
Italy)	6	7%	9	1%	9%
Europe	,	,	,	,	,
America	18	19	12	16	46
	0	4%	3	7%	9%
	,	,	,	,	,
Asia/Pacific	6	6	4	5	49
	2	6%	1	6%	5%
	,	,	,	,	,
Total revenues	92,7	100,0%	73,4	100,0%	26,2%

Consolidated revenue bridge (€m)

Heating sales

Q1 Heating sales by geography

, unless otherwise stated €m	Q1 21	%	Q1 20	%	Chg . YoY
Italy	14	20	11	20	23
	3	3%	6	5%	4%
	,	,	,	,	,
(excuding	32	46	28	51	14
Italy)	8	5%	7	0%	0%
Europe	,	,	,	,	,
America	17	7%	12	4%	3%
	4	24	1	21	44
	,	,	,	,	,
Asia/Pacific	6	8	0	1%	50
	0	5%	4	7	7%
	,	,	,	,	,
Total business sales	70,5	100,0%	56,4	100,0%	25,0%

Q1 Heating sales by application

€m , unless otherwise stated	Q1 21	%	Q1 20	%	Chg . YoY
Central Heating	41 1 ,	58 3% ,	34 4 ,	60 9% ,	19 6% ,
Direct Heating	12 1 ,	17 2% ,	8 2 ,	14 5% ,	48 0% ,
Storage Water Heating	7 8 ,	11 0% ,	5 5 ,	9 8% ,	41 4% ,
Catering	2 1 ,	3 0% ,	2 5 ,	4 3% ,	(14 1%) ,
Other	7 4 ,	10 5% ,	5 9 ,	10 5% ,	25 7% ,
Total business sales	70,5	100,0%	56,4	100,0%	25,0%

• Q1 Divisional sales are up 25% vs previous year, +28,5% at same forex
• Italy. Q1 accounts +23,4% vs previous year; Fans increase €1,5m, +39% thanks to Direct Heating applications (Pellet Stoves); Flues (up €0,4, +60% vs previous year)
• Europe. Q1 up €4,1m, +14,0% of which Turkey is + €2,3m, +38,5% due to OEM demand in Central Heating; UK, +€0,4m, +6,5%
• America, Q1 up €5,3m, +44,3%. Direct Heating up €2,9m, +56% and Storage Water Heating €2,4m, +54%
• Asia/Pacific, Q1 accounts increase for €2,0m, +50,7% vs previous year; China, 5,0% of divisional sales, accounts +63% y/y also because of covid effect in 2020

Metering sales

Q1 Smart Gas Metering sales by application

€m, unless otherwise stated	Q1 21	%	Q1 20	%	Chg. YoY
Residential	15,0	91,1%	15,5	94,5%	(3,1%)
Commercial & Industrial	1,4	8,5%	0,9	5,3%	61,0%
Other	0,1	0,4%	0,0	0,2%	86,8%
Total business sales	16,4	100,0%	16,4	100,0%	0,5%

• Smart Gas Metering sales in line with previous year
• Increase in C&I is deployment of new generation of product family
• Current order portfolio of €31,4m of which €2,1m in foreign markets, mainly Greece, Croatia and UK

Q1 Water Metering sales by product

€m, unless otherwise stated	Q1 21	%	Q1 20	%	Chg. YoY
Water meters, finished	2,5	52,0%	1,6	37,5%	56,9%
Water meter parts	2,0	41,0%	1,9	44,4%	4,5%
Other	0,3	7,0%	0,8	18,0%	(55,7%)
Total business sales	4,8	100,0%	4,3	100,0%	13,3%

2020 only for comparison, consolidated from 2021

EBITDA bridge

Euro millions

From EBITDA to net income

, unless otherwise €m stated	Q1 21	of % sales	Q1 20	of % sales	Chg YoY
EBITDA	15 1 ,	16 2% ,	8 9 ,	12 1% ,	69 0% ,
of D&A impairment assets ,	5 8 ,		5 6 ,
EBIT	9 2 ,	10 0% ,	3 3 ,	4 5% ,	180 8% ,
financial (charges)/income Net	(2 3) ,		(0 6) ,
forex (charges)/income Net	0 8 ,		2 2 ,
EBT	7 7 ,	8 3% ,	4 9 ,	6 7% ,	57 3% ,
Taxes	0 3 ,		(0 7) ,
income Net	8 0 ,	8 6% ,	4 2 ,	5 7% ,	91 7% ,
						for €1,8m, net
financial (charges)/income adjusted Net	(1 2) ,	(1 3%) ,	(0 8) ,	(1 1%) ,	40 9% ,
Net income adjusted	4 7 ,	8 0% ,	3 9 ,	3% 5 ,	89 7% ,	previous year

• D&A is in line with planned capex deployment, going from 7,8% to 6,3% of revenues
• EBIT of €9,2m at 10,0% of revenues
• Increase in Net financial charges accounts change in FV of Warrants (net charge of €1,4m YoY)
• Net forex charges of €0,8m vs €2,2m
• Q1 21 taxes include one off revenue for Patent Box ruling for €1,8m, net
• Net income of €8,0m at 8,6% of revenues vs 5,7% of previous year
• Net financial charges adjusted are net of FV accounting effects of equity instruments
• Net income adjusted accounts a ≈90% increase vs previous year

Net trade working capital €m, unless otherwise stated 2021.03 2020.12 change 2020.03 2019.12 Inventory 62,0 56,5 5,5 51,9 51,1 0,8 10,1

E-MARKET SDIR
CERTIFIED

payables Accounts €m , unless Trade Working otherwise Capital stated Net	(68 6) , 2021 53 4 03 ,	(72 2) , 2020 49 8 12 ,	3 6 , YTD 3 6 , change	(56 5) , 2020 57 9 03 ,	(73 3) , 2019 35 0 12 ,	16 8 , YTD 22 9 , change	(12 0) , YoY -4 4 , change
NTWC/Revenues Inventory	14 2% 62 0 , ,	15 5% 56 , 5 ,	-1 4% , 5 5 ,	19 7% 9 51 , ,	9 9% 51 , 1 ,	9 7% 0 8 , ,	-5 5% 10 , 1 ,
Accounts receivables	60 0 ,	65 5 ,	(5 5) ,	62 5 ,	2 57 ,	3 5 ,	(2 5) ,
recourse factoring Non payables Accounts	11 9 , (68 6) ,	9 6 , (72 2) ,	2 3 , 3 6 ,	0 7 , (56 5) ,	10 7 , (73 3) ,	(10 0) , 16 8 ,	11 2 , (12 0) ,
payables Capex account Trade Working Capital Net	(2 0) , 53 4 ,	(3 0) , 49 8 ,	1 1 , 3 6 ,	(1 9) , 9 57 ,	(5 1) , 35 0 ,	3 2 , 22 9 ,	(0 1) , -4 4 ,
Trade Working Capital adjusted Net NTWC/Revenues adjusted/Revenues NTWC	67 3 , 2% 14 , 9% 17 ,	62 4 , 5% 15 , 19 5% ,	9 4 , 4% -1 , 6% -1 ,	60 5 , 19 7% , 20 5% ,	50 8 , 9 9% , 4% 14 ,	9 7 , 9 7% , 6 1% ,	6 8 , 5% -5 , -2 7% ,
recourse factoring Non adjusted/Revenues AR	11 9 1% , 19 ,	9 6 4% , 23 ,	2 3 3% , -4 ,	0 7 5% , 21 ,	10 7 3% , 19 ,	(10 0) 2% , 2 ,	11 2 4% , -2 ,

Accounts receivables 60,0 65,5 (5,5) 62,5 57,2 5,3 (2,5)

YTD

YTD change

YoY change

Capex account payables (2,0) (3,0) 1,1 (1,9) (5,1) 3,2 (0,1) Net Trade Working Capital adjusted 67,3 62,4 4,9 60,5 50,8 9,7 6,8 NTWC adjusted/Revenues 17,9% 19,5% -1,6% 20,5% 14,4% 6,1% -2,7%

AR adjusted/Revenues 19,1% 23,4% -4,3% 21,5% 19,3% 2,2% -2,4%

• YoY change includes increase of NTWC for JANZ of €6,0m

• Reported 2021 NTWC YTD increase of €3,6m reflects Inventory trend to support higher sales outlook
• Reported 2020 NTWC YTD reflected covid Q1 contingency support provided to extended supply chain

Change in net debt

, unless otherwise stated €m	Q1 21	Q1 20
cash flow Current	15 9 ,	9 9 ,
Change in NTWC	(3 5) ,	(23 5) ,
Inventory	(5 3) ,	(2 7) ,
Receivables Accounts	5 6 ,	(6 7) ,
Payables Accounts	(3 8) ,	(14 0) ,
Other working capital	(1 6) ,	(5 2) ,
Capex , net	(3 9) ,	(0 6) ,
Cash flow from operations	6 9 ,	(19 4) ,
Financial charges	(0 7) ,	(0 5) ,
Dividends paid	-	-
Other	(0 8) ,	(3 3) ,
Change debt in net	5 4 ,	(23 2) ,
debt Net - BoP	115 8 ,	78 4 ,
debt Net - EoP	110 4 ,	101 6 ,

• Current cash flow reflects significant improvement due to EBITDA
• NTWC absorbs €3,5m vs €23,5m of previous year when covid contingency plan was put in place
• Capex of €3,9m in line with forecasted project pipeline
• 2020 Other items included €3,0m change in translation reserve

Net financial position

unless otherwise stated €m,	31/03/2021	31/12/2020	31/03/2020
(Cash & cash equivalents)	(42 3) ,	(42 3) ,	(15 0) ,
Current debt , net	41 1 ,	46 3 ,	24 ,7
Non debt current	92 0 ,	91 9 ,	85 2 ,
derivatives debt MTM & M&A	4,6	4,4	1 ,4
IFRS 16 - Leases	14 9 ,	15 ,5	5,3
debt Net - EoP	110,4	115,8	101,6

• Net Debt/EBITDA: 2,1x vs 2,6x vs 2,3x of previous year

Outlook

• FY2021 consolidated sales outlook improved and is in the low double digit growth range vs previous year
• Gas metering: domestic market first roll-out is in final stage; new replacement will include different communication technologies; 2021FY: ≈10% of revenues are expected from foreign markets
• Water metering: 2021FY outlook in line with expectations
• Consolidated EBITDA expected to grow vs previous year, margin to correct slightly taking into account the currently foreseeable increase in raw materials

Risk factors

• Commodities and components: materially higher price increase and possible shortage in electronics components in next months

Sustainability

• SIT Green Paper was released and SDGs linked to short and long term SIT management system

ANNEXES

Regulatory statement

The manager responsible for the preparation of the company's accounts, Paul Fogolin, hereby declares, as per article 154 bis, paragraph 2, of the "Testo Unico della Finanza", that all information related to the company's accounts contained in this presentation are fairly representing the accounts and the books of the company.

Paul Fogolin Chief Financial Officer paul.fogolin@sitgroup.it

Investor Relations Mara Di Giorgio +39 335 773 7417 investorrelations@sitgroup.it

Disclaimer

This presentation has been prepared by SIT S.p.A. only for information purposes and for the presentation of the Group's results and strategies.

For further details on the SIT Group, reference should be made to publicly available information.

Since at the moment there is no existing reliable market research which provide the required level of detail, nor any official data, the statements of key information, the assessments concerning the positioning of SIT Group and the assessments regarding the market and the market segments of the reference market are based exclusively on assessments carried out by SIT's management, in accordance to its own knowledge of the market and its analysis of the data gathered. For such reason, these statements and assessments may not be updated and/or may also be quite approximate. Due to the lack of reliable and standardized data and of market data provided by third parties, these assessments are necessarily subjective and are provided, unless otherwise specified, by SIT on the basis of the analysis of the data it, as a company, has gathered. These evaluations and the performance of the industries in which SIT operates could prove to be different from those assumed due to the known and unknown risks, the uncertainties and other causes.

Statements contained in this presentation, particularly those regarding any SIT Group possible or assumed future performance, are or may be forward looking statements and in this respect they involve some risks and uncertainties.

Any reference to past performance of the SIT Group shall not be taken as an indication of future performance.

This document does not constitute an offer or invitation to purchase or subscribe for any shares and no part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever.

By attending or reading this presentation you agree to be bound by the foregoing terms.