Technogym — Investor Presentation 2016

Mar 6, 2017

Financial ResultsFull Year 2016

March 2017

Disclaimer

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This presentation might contain certain forward-looking statements that reflect the Company's management's current views with respect to future events and financial and operational performance of the Company and its subsidiaries. These forward-looking statements are based on Technogym S.p.A.'s current expectations and projections about future events. Because these forward-looking statements are subject to risks and uncertainties, actual future results or performance may differ materially from those expressed in or implied by these statements due to any number of different factors, many of which are beyond the ability of Technogym S.p.A. to control or estimate. Youare cautioned not to place undue reliance on the forward-looking statements contained herein, which are made only as of the date of this presentation. Technogym S.p.A. does not undertake any obligation to publicly release any updates or revisions to any forward-lookingstatements to reflect events or circumstances after the date of this presentation.

Any reference to past performance or trends or activities of the Technogym Group shall not be taken as ^a representation or indication that such performance, trends or activities will continue in the future.

This presentation does not constitute an offer to sell or the solicitation of an offer to buy Technogym's securities, nor shall the document form the basis of or be relied on in connection with any contract or investment decision relating thereto, or constitute ^a recommendation regarding the securities of Technogym.

Technogym's securities referred to in this document have not been and will not be registered under the U.S. Securities Act of ¹⁹³³ and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Stefano Zanelli, the Manager in charge of preparing the corporate accounting documents, declares that, pursuant to art. 154-bis, paragraph 2, of the Legislative Decree no. ⁵⁸ of February 24, 1998, the accounting information contained herein correspond to document results ,books and accounting records.

Financial Results FY2016

Revenues_Overview of key performance indicator

Revenues _breakdown by geography

Revenues _breakdown by channel

Cost base view

Key comments

D&A / Impairments

• Increase in absolute terms mainly due toTG Village acquisition

Personnel cost

• 2 p.p. decrease thanks to productionprocesses' optimization and internal staff reorganization

Services cost

• • Increase in marketing, sale commissionsand IT consultancy costs.
• • Rent cost reduction as consequence of TGVillage acquisition

Raw Material, WIP & Finished Goods

• 0,3 p.p. decrease thanks to optimization of purchase and product re-engineeringprocesses.

EBITDA

EBITDA evolution (€m)

Key comments

EBITDA growing at ^∼15% vs Y-1 withpositive impact on profitability (18,0% vs16,9% of Y-1)

EBITDA margin increase thanks to

• • operational leverage from the increase insales volume
• • optimization of production processes withpositive impact on manufacturing direct costs
• •reduction in rent costs following the

Trade Working Capital

Working Capital (€m)

€m	De 2 0 1 5 c	De 2 0 1 6 c
Inv ies to en r	6 0. 4	7 2. 2
Tr de iva b les a re ce	8 4. 1	9 4. 1
Tr de b le a p ay a	( 9 3. 9 )	( 1 2 6 ) 5.
Tr de W k ing Ca i l ta a or p	5 0. 6	4 0. 7
% L T M f l r to ta o ev en ue	9. 9 %	7. 3 %
O he / ( l ia b i l i ies ) t t a ts t r c ur re n ss e	( 1 8. 2 )	( 4 6 ) 7.
Cu l ia b i l i ies t tax t rre n	( 1 4. 0 )	( 3. ) 7
Pr is ion ov s	( ) 1 8. 5	( ) 1 7. 2
Ne W k ing Ca i l t ta or p	( 0. 1 )	( 2 8 ) 7.
% L T M f l r to ta o ev en ue	0. 0 %	-5 0 %
In Tu 1 tor ve n y rn ov er	6. 3	9 5.
Da Sa les Ou d ing ( D S O ) 2 ts tan y s	1. 5 7	1. 5 5
Ou ( O ) Da Pa b les d ing D P 3 ts tan y s y a	1 0 1. 7	1 2 5. 3

Key comments

Reduction in Trade Working Capital at 7.3% onrevenues from 9.9% of Y-1

Inventories

• •Inventories growing at 11.8m vs Y-1
• •Finished products at €58m
• •Product raw material at €13,8m

Trade receivables

• • Incidence on revenues in line with previous year(16,9% vs16,5% of Y-1)
• •Increase driven by higher sales
• •DSO in line with Y-1

Trade payables

• Increase vs Y-1 (+31,7m) from suppliers for ITAplant.

Other assets and liabilities (2016)

• Include mainly net VAT debt of €4.7m, advancepayment from customers of € 15.6m and debt fordeferred taxes of € 20.6m.

1. Calculated as revenues for products, spares parts, hardware ^e software divided by gross inventory;

^3. Computed as Trade payables net of VAT (~7%) / (Raw materials, work in progress and finished goods ⁺ Cost of services)

CAPEX

Low capital intensive business model excludingone-off property and TG Village investments

Excluding the one-off investment of TG Villagethe capex are mainly referred to

Tangibles

• Investments in industrial tools, molds andproduction lines

Intangibles

• Investments for innovation activities andresearch and development of new products

i i ( ) N F l D b € t t e n a n c a e m
€m	De 2 0 1 5 c	De 2 0 1 6 c
C h & h iv le t a s c a s e q a n s u	( ) 6 8. 0	( 5 ) 3. 1
Cu f in ia l r iv b le t rre n a nc e c e a s	( ) 0. 3	( ) 0. 7
Cu Ba k d b t t rre n n e	3 5. 0	2 0. 0
Cu f n io d b t p t t t rre n o r n o o n- cu rre n e	1 7. 9	2 0. 8
O he f ina ia l d b t t t r c rre n nc e u	0 5.	7. 5
Ne f in ia l d b t t t cu rre n a nc e	5 7. 9	4 8. 3
f in ia No l d b t t n cu rre n a nc e	4 8. 5	8 3. 6
F in ia l Ne De b ( "F N D ") t t a nc	3 8. 1	7 8. 0
F N D / E B I T D A ( ) x	0. 4x	0, 7 8x

Key comments

Cash & cash equivalents increase of ^∼€-15mdespite of cash out for

• •€42m cash out for TGB Srl acquisition
• • €46m cash out for the reimbursement of theloan undertook by TGB Srl
• • €21m cash out for Exerp acquisitionPositive effect of €25m from reimbursement of Slovakia VAT

Current bank debt

• • Mainly composed credit lines stand-by andshort-term financing. As of 31/12/2016
• − Lines of credit and overdrafts uncommitted for~€77m of which €10m drawn (revocable / floatingrate: EURIBOR ⁺ spread)
• − Committed credit line (medium-long term) for~€45m o/w €41m drawn (floating: EURIBOR ⁺spread)

Current portion of non-current debt / Noncurrent financial debt

• Flexible financial structure based on bankamortizing loans with ~2,4y duration (floating: EURIBOR ⁺ spread)

Free cash flow

1Pre income taxes paid

2Excluding non recurring tax payment and reimbursement (Slovakia VAT)

3Excluding the one-off acquisition of two industrial facilities (€9.4m) occurred in 2015

4Excluding the Technogym Village acquisition ( €42m)

Executive SummaryFY 2016

Revenues: €555,3m, +8,5% vs 2015 (+10,3% at constant FX) thanks to positive volume effect coming primarily coming from

• •Volume effect
• •Positive price effect primarily
• •Incremental sales of services and accessories

Excluding FX impact, revenue growth would have been 10,3%.Major negative impact from GBP, BRLand RUB.

EBITDA: €99,9m, +15,5% vs 2015 (+21,7% at constant FX) thanks to

• •Operational leverage from the increase in sales volume
• •Optimization of production processes with positive impact on manufacturing direct costs
• •Reduction in rent costs following the acquisition of the TG Village

Free Cash Flow1: equal to €88m (+8,6% vs 2015, €81m) excluding non-recurrent Capex.

Net Financial Debt: €78m vs €38m as of December'15

•Non-recurring investments in TG Village and Exerp

Profit and Loss statement

€ m	D 2 0 1 5 e c	D 2 0 1 6 e c	D 5 2 0 1 e c s v D 2 0 1 6 ∆ % e c
T l t	5 1 1. 8	5 5 5. 3	8. 5 %
o a r e v e nu e
C i l la d b le ia ls d t t o s o r r aw . a nc ry a n c o ns m a m a e r a n u
d fo le g o o s r r e s a	( ) 1 8 2. 6	( ) 1 9 6. 4	7. 6 %
S ic Re ls d le t e rv e. n a a n a s e s	( ) 1 2 7. 2	( ) 1 3 9. 8	9. 9 %
( ) f w h ic h t t r t o co s no ec ur re n	( ) 2. 6	( ) 2. 3
Pe l c t rs o nn e o s	( ) 1 1 7. 0	( ) 1 1 6. 9	( ) 0. 0 %
f w h ic h ( ) t t r t o co s no ec ur re n	( 3. 1 )	( 0. 6 )
De ia io is io d i d t t t t p re c ns . a m o r a ns a n w r e- ow ns	( ) 2 0. 0	( ) 2 3. 2	1 5. 7 %
fo Pr is io is k a d ha ov n r r n c rg e s	( ) 2. 6	( ) 2. 5	( ) 1. 5 %
O he io t t t r o p e ra ns c o s	( ) 4. 9	( ) 8. 2	6 8. 4 %
f w h ic h ( ) t t r t o co s no ec ur re n	( 0. 0 )	( 2. 9 )
S ha f r l j in t t v tu re o e su o e n re	1. 0	0. 1	( 8 1 % ) 7.
i i N t t e o p e r a n g n c o m e	5 8. 4	6 8. 4	1 7. 0 %
Ma in ( ) % rg	1 1. 4 %	1 2. 3 %
( ) F in ia l in d a nc c o m e a n ex p e ns e s	( ) 3. 5	( ) 2. 7	( ) 2 3. 3 %
P f i ( l ) b f t t r o o s s e o r e a x	5 5. 0	6 5. 7	1 9. 6 %
Ta xe s	( ) 2 6. 6	( ) 2 2. 5	( ) 1 5. 4 %
P f i ( l ) b f i i i t ty t t r o o s s e o r e m n o r n e r e s	2 8. 4	4 3. 2	5 2. 4 %
( ) Ma in % rg	5. 5 %	7. 8 %
Pr f i ( lo ) fo he f m in i in t t ty t t o s s r e a r o o r e re s s y	( 0. 2 )	( 0. 1 )	( 2 8. 0 % )
f f P i h t t r o o r e y e a r	2 8. 2	4 3. 1	5 3. 0 %

EBITDA Reconciliation

€ m	D 2 0 1 5 e c	D 2 0 1 6 e c	D 2 0 1 5 e c s v D ∆ 2 0 1 6 % e c
N i i t t e o p e r a n g n c o m e	5 8. 4	6 8. 4	1 7. 0 %
L T M I P ( i ) t c o s p r e v o u s y e a r s	2 5
C l t t o n s u a n c y c o s	1. 5
R i t t t e s r u c u r n g c o s	0. 9
O I P t c o s	0. 7	3. 0
( ) B i l i t r a s a p r e o s e a r x v u y		2 2
C h i l i i i t t n a g a o n s		0. 6
T l i i t t o a n o n r e c u r r n g e m s	5. 6	5. 8	3. 4 %
A d j d i i t t t u s e n e o p e r a n g n c o m e	6 4. 1	7 4. 2	1 5. 8 %
P i i r o v s o n s	2 6	2 5	1 5. 7 %
D i i i i d i d t t t t e p r e c a o n s, a m o r s a o n s a n w r e- o w n s	2 0. 0	2 3. 2	( ) 1. 5 %
E B I T D A	8 6. 7	9 9. 9	1 5. 3 %
M i ( ) % a r g n	1 6. 9 %	1 8. 0 %

Cash Flow statement

€m	De 2 0 1 5 c	De 2 0 1 6 c	De 2 0 1 5 c De 2 0 1 6 vs c ∆ as s.	De 2 0 1 5 c De 2 0 1 6 vs c ∆ %
f i fo Pr t t he o r y ea r	2 8. 4	4 3. 2	1 4. 9	5 2 %
De ia ion iza ion d im irm los t t t t p rec am or a n p a en se s ,	2 0. 0	2 3. 2
Pr is ion ov s	2. 6	2. 5
S f n fro ha l j in t r t t v tu re o e es m o en res u	( ) 1. 0	( 0. 1 )
Ne f ina ia l e t nc xp en se s	2. 6	2. 5
/ Inc ( ) fro inv tm ts om e ex p en se s m es en	0. 9	0. 1
Inc tax om e ex p en se s	2 6. 6	2 2. 5
Ca h f lo fro in iv i ie be fo ha in k in i l t t t ta s ws m op er a g ac s re c ng es wo r g ca p	8 0. 0	9 4. 0	1 3. 9	1 7 %
Inc ( de ) in inv ies to rea se cre as e en r	2. 1	( 1 2. 3 )
( ) Inc de in de iva b les tra rea se cre as e re ce	( ) 4. 2	( 8 ) 5.
( ) Inc de in de b les tra rea se cre as e p ay a	( ) 0. 2	3 3. 2
Inc ( de ) in he ing d l ia b i l i ies t t ts t rea se cre as e o r o p era a ss e an	1 9. 2	0. 9
No f isc l p t t n-r ec urr en a ay me n	( 2 2. 8 )	2 2. 8
Inc i d tax om e es p a	( ) 1 9. 3	( ) 3 4. 8
Ne h f lo fro in iv i ie ( A ) t c t t t as w m op er a g ac s	5 4. 8	9 7. 9	4 3. 1	7 9 %
Inv in lan d e ip tm ts ty t a t es en er n me n u	( ) 1 8. 2	( 6. 1 ) 5
p rop p q , D isp ls f p lan d e ip ty t a t os a o er n u me n	0. 2	0. 5
rop p q , Inv in in i b le tm ts ta ts es en as se	( 6. 9 )	( ) 8. 7
ng D isp ls f in i b le ta ts os a o as se	0. 0	0.
ng fro D iv i de ds ive d he i ies t t t n re ce m o r e n	0. 4	0 -0 1
D iv i de ds ive d fro j in d a ia t v tu tes n re ce m o en res a n ss oc	0. 0	0. 7
D iv i de ds i d n p a	-	0. 0
Inv in bs i d iar ies ia d o he i ies tm ts tes t t t es en su as so c a n r e n	0. 5	( ) 1 8. 1
, D isp l o f s bs i d iar ies ia d o he i ies tes t t t os a u as so c a n r e n ,	0. 3	0. 0
Ne h in f low ( f low ) fro in in iv i ie ( B ) t c t t t t as ou m ve s g ac s	( 2 3. 7 )	( ) 8 1. 9	( 5 ) 8. 2	2 4 6 %
fro Pr ds bo ing oc ee m ne rro s w w	7 0. 0	6 5. 0
Re f bo ing t o p ay me n rro s w	( ) 1 9. 9	( 3 0. 9 )
Ne inc ( de ) f c f ina ia l a d l ia b i l i ies t t ts t rea se cre as e o urr en nc ss e an	( 4. 4 ) 5	( ) 6 1. 0
Pa f n f ina ia l e ts t y me n o e nc xp en se s	( 0. 9 )	( ) 5. 4
C Ne h in f low ( f low ) fro f in in iv i ie ( ) t c t t t as ou m an c g ac s	( 5. 2 )	( ) 3 2. 3	( ) 2 7. 0	5 1 9 %
Ne in ( de ) in h d h iva le ( D ) ( A ) ( B ) ( C ) t ts cr ea se cr ea se ca s an ca s eq u n + + =	2 6. 0	( 1 6. 2 )	( 4 2. 2 )	( 1 6 2 % )

Balance Sheet

	D 2 0 1 5 e c	% o n	D 2 0 1 6 e c	% o n
€ m		R e e n e s v u		R e e n e s v u
I i t n v e n o r e s	6 0. 4	1 1. 8 %	2. 2 7	1 3. 0 %
T d i b l r a e r e c e v a e s	8 4. 1	1 6. 4 %	9 4. 1	1 6. 9 %
T d b l r a e p a y a e s	( 9 3. 9 )	1 8. 4 % -	( 1 2 6 ) 5.	2 2. 6 % -
C T d W k i i l t r a e o r n g a p a	5 0. 6	9. 9 %	4 0. 7	3 % 7.
O h / ( l i b i l i i ) t t t t e r c u r r e n a s s e s a e s	( 1 8. 2 )	3. 6 % -	( 4 6 ) 7.	8. 6 % -
C l i b i l i i t t t u r r e n a x a e s	( ) 1 4. 0	2. % 7 -	( ) 3. 7	0. % 7 -
P i i r o v s o n s	( 1 8. ) 5	3. 6 % -	( 1 2 ) 7.	3. 1 % -
N W k i C i l t t e o r n g a p a	( ) 0. 1	0. 0 %	( ) 2 7. 8	5. 0 % -
P l d i t t t r o p e r y. p a n a n e q u p m e n	5 6. 9	1 1. 1 %	1 4 3. 9	2 5. 9 %
I i b l t t n a n g e a s s e s	2 1. 5	4. 2 %	2 4. 0	4. 3 %
I i j i t t t t n e s m e n s n o n e n r e s v v u	3. 8	0. 7 %	2 1. 3	3. 8 %
E l b f i b l i i t t m p o y e e e n e o g a o n s	( 3. 1 )	0. 6 % -	( 3. 2 )	0. 6 % -
O h d ( l i b i l i i ) t t t t e r n o n c u r r e n a s s e a n a e s	2. 5	0. 5 %	7. 4	1. 3 %
i C i N F d l t t e e a p a x	8 1. 6	1 9 % 5.	1 9 3. 5	3 4. 8 %
N I d C i l t t t e n v e s e a p a	8 1. 5	1 5. 9 %	1 6 5. 7	2 9. 8 %
S h h l d ' E i t a r e o e r s q u y	4 3. 4		8 7. 6
F i i l N D b t t n a n c a e e	3 8. 1	7. 4 %	7 8. 0	1 4. 0 %
T l S f F d i t o a o u r c e o u n n g	8 1. 5	1 5. 9 %	1 6 5. 7	2 9. 8 %