Technogym — Investor Presentation 2023

Aug 2, 2023

Technogym Financial Results H1 2023

Cesena, August 2nd 2023

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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. You are 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-looking statements 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.

William Marabini, 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.

Some figures related to previous periods were reclassified for a better representation of balance sheet and the profit and loss statements.

Market sizing & evolution

TECHNOGYM overall potential market account for 4.4 trillion USD

WELLNESS ECONOMY: ~4.400 B\$ (Health, prevention, nutrition, weight loss…)

PHYSICAL ACTIVITY: ~738 B\$

FITNESS EQUIPMENT MARKET: ~14 B\$

Fast recovery across the B2B market space

B2B Segments

Hotels showed a growth acceleration driven by investments from big hotel chains

Wellness Real Estate / Residences

continued to benefit from the growth in residential (especially in the US) and in leisure clubs

Corporates are investing in Wellness programs to attract and retain employees

Health & anti-aging is growing after COVID especially in Europe but with good perspectives from US and APAC

Club sector is still benefitting from higher consumer and investors confidence. New players are entering markets together with big chains development plan on track, all combined by a high focus on digital offer.

Home remaining on the growth path

B2C Segment

General demand for athome training solutions normalized after the pandemic but it still very high for high-end solutions (e.g. entire home gym).

Gradual international expansion is still the key to penetrate new customers leveraging the Technogym unique Luxury & Prestige positioning with a focus on US, UK, Japan and Emirates.

Financial Results H1 2023

Double digit growth of all figures

€ millions

Revenue growth at constant F/X 15,0% YoY

€ millions

Revenue

Strong growth in B2B coupled with B2C growth in Q2

€ millions

Strong growth continue in MEIA and in the European area

Strong growth in Field Sales, Distributors and Retail

* Includes E-Commerce and Teleselling channels

Statutory Profit & Loss H1 2023

(€m)	Jun 2022		Jun 2023		Delta	Jun 2023 vs Jun 2022 Δ %
Total revenue	325,2	% on sales	370,0	% on sales	44,8	13,8%
Cost of raw, ancillary and consumable materials and	(108,2)	(33,3%)	(121,3)	(32,8%)	(13,1)	12,1%
goods for resale of which (cost) not recurrent	(0,0)		(0,0)		0,0
Service, Rentals and leases	(93,2)	(28,7%)	(105,0)	(28,4%)	(11,8)	12,7%
of which (cost) not recurrent	(0,1)		(0,7)		(0,6)
Personnel cost	(70,3)	(21,6%)	(81,9)	(22,1%)	(11,6)	16,5%
of which (cost) not recurrent	(0,8)		(0,5)		0,2
Depreciations, amortisations and write-downs	(18,8)	(5,8%)	(22,5)	(6,1%)	(3,7)	19,7%
of which (cost) not recurrent	(0,0)		(0,0)		(0,0)
Provision for risk and charges	(3,3)	(1,0%)	(3,7)	(1,0%)	(0,4)	12,5%
of which (cost) not recurrent	(0,6)		(1,9)		(1,3)
Other operations cost	(3,1)	(0,9%)	(3,6)	(1,0%)	(0,5)	16,1%
of which (cost) not recurrent	(0,0)		(0,1)		(0,0)
Share of result joint venture and impairment	0,4	0,1%	4,4	1,2%	4,0	h.v.
of which (cost) not recurrent	0,0		4,5		4,5
Net operating income	28,8	8,8%	36,4	9,8%	7,6	26,5%
Financial income and (expenses) and from investments	2,3	0,7%	1,5	0,4%	(0,8)	(35,0%)
Profit (loss) before tax	31,0	9,5%	37,8	10,2%	6,8	22,0%
Taxes	(7,5)	(2,3%)	(8,2)	(2,2%)	(0,7)	9,7%
of which (cost) not recurrent	0,0		(1,0)		(1,0)
Profit (loss)	23,5	7,2%	29,6	8,0%	6,1	25,9%
Profit (loss) for the year of minority interests	(0,1)	(0,0%)	(1,2)	(0,3%)	(1,1)	h.v.
Profit (loss) attributable to owners of the parent	23,5	7,2%	28,5	7,7%	5,0	21,4%

Comments

• Revenue grew 13.8% to 370m€ (15.0% at constant F/X), mainly driven by volumes growth, product mix and 2022 price hikes contribution.
• Among Opex DWI (delivery, warehousing, installation) costs are still affected by inflation carryover from previous years.
• Personnel costs growing due to carryover and new competencies hiring.
• Amortization path is driven by continous investments in digital transformation.
• JV result impacted by TG Emirates investment evaluation (+4.5m€)
• EBITDA adjusted at 16.1% vs 15.9% in 2022.

Trade Working Capital

€ millions

Inventories

• Increase of 14.2 m€ compared to Dec '22 driven by stock reserve after the decrease due to year-end sales

Trade receivables

• Increase of 2.6 m€ vs Dec '22, due to the higher sales volumes in Q2 '23
• Improving collection timing with June DSO decreasing by 6 days compared to Dec '22

Trade payables

• Decrease of 20.9 m€ vs Dec '22 due to the seasonal payment of purchases finalized in last month of 2022

IT: Calculated as the ratio of Turnover for products, spare parts, hardware and software / Inventory w/o deval. DSO: Calculated as Account receivables net of VAT (~ 11%) / Total turnover

Capex at 4.2% on revenue: investing in Digital and IT

€ millions			Comments
% on Revenue	4.7%	4.2%	Tangibles Capex
PPE	15,2	15,7	− Tools and molds for new products − Production lines and manufacturing
Intangibles	6,9	7,3	equipment − TG Village maintenance and new offices/boutique
			Intangibles Capex − Digital and contents development
	8,3	8,4	− IT − New products development
	H1 2022	H1 2023

Net Financial Position at 72.2 m€

• * Payment rental IFRS16 -3,7 m€ ; Lease DLL -4.2 m€;

• Impact of converting liquidity in currency and others -2.8€

Net Financial Position

€ millions

Net Financial Position

Cash and cash equivalent and deposits

• Bank debt
• Othe financial debt

Cash, cash equivalent and deposit at 175 m€ vs 225 m€ as of Dec.'22

Bank debt at 7.2 €, 4.6 m€ decrease vs Dec.'22

Other financial debts at 96 m€ of which:

• Leasing at 58.3 m€ vs 54.1 m€ as of Dec.'22
• IFRS 16 impact at 38 €m, 37.8 at Dec.'22

Free cash flow

€ millions

Note: Cash conversion calculated as Free Cash Flow before Tax / EBITDA (1) Cash flow from operating activities calculated as : EBITDA – risultato JV

Strictly private & confidential 18

Balance Sheet June 2023

€ m	Dec 2022	% LTM on Revenues	Jun 2023	% LTM on Revenues	Dec 2022 Jun 2023 vs Δ %
Inventories	100 7 ,	14 0% ,	114 8 ,	15 0% ,	14 1% ,
Trade receivables	110 8 ,	15 4% ,	113 4 ,	14 8% ,	2 3% ,
Trade payables	(173 6) ,	(24 1%) ,	(152 7) ,	(19 9%) ,	(12 0%) ,
Trade Working Capital	37 9 ,	5 3% ,	75 5 ,	9 9% ,	99 0% ,
Other assets/(liabilities) current	(61 4) ,	(8 5%) ,	(62 1) ,	(8 1%) ,	1 2% ,
Current liabilities tax	(9 2) ,	(1 3%) ,	(11 6) ,	(1 5%) ,	27 0% ,
Provisions	(14 2) ,	(2 0%) ,	(15 2) ,	(2 0%) ,	1% 7 ,
Capital Net Working	(46 8) ,	(6 5%) ,	(13 5) ,	(1 8%) ,	(71 1%) ,
Property , plant and equipment	164 1 ,	22 7% ,	164 4 ,	44 4% ,	0 2% ,
Intangible assets	55 7 ,	7 7% ,	55 3 ,	14 9% ,	(0 7%) ,
Goodwill	0 0 ,	0 0% ,	1 0 ,	0 3% ,	h .v.
Investments in joint ventures	4 1 ,	0 6% ,	1 2 ,	0 3% ,	(71 1%) ,
Employee benefit obligations	(2 6) ,	(0 4%) ,	(2 6) ,	(0 7%) ,	0 3% ,
Other and (liabilities) current asset non	49 6 ,	6 9% ,	44 4 ,	12 0% ,	(10 5%) ,
Net Fixed Capital	270 9 ,	37 5% ,	263 7 ,	34 4% ,	(2 7%) ,
Net Invested Capital	224 1 ,	31 1% ,	250 2 ,	32 6% ,	11 6% ,
Shareholders' Equity	345 9 ,	47 9% ,	322 6 ,	87 2% ,	(6 8%) ,
Net financial position adj for Trade due > 12m * pay	(121 9) ,	(16 9%) ,	(72 4) ,	(9 5%) ,	(40 6%) ,
Source Total of Funding	224 1 ,	31 1% ,	250 2 ,	32 6% ,	11 6% ,
NFP (Cash) (159 m€) excluding IFRS16		NFP (Cash) (110 m€) excluding IFRS16

* Balance sheet net financial position adj for Trade pay due > 12m excludes all the trade payables that will be due after 12 months from the date of reporting, according to ESMA guidelines on 4th March 2021

Cash Flow statement June 2023

			Jun 2022
(€m)	Jun 2023	Jun 2022	vs Jun	Jun 2022 vs
			2023 Δ	Jun 2023 Δ %
			ass.
Consolidated profit for the year	29,6	23,5	6,1	25,9%
Depreciation, amortization and impairment losses	22,5	18,8
Provisions	0,1	3,3
Share of net result from joint ventures	(4,4)	(0,4)
Net financial expenses	(0,9)	(2,0)
Income/(expenses) from investments	(0,5)	(0,3)
Income tax expenses	8,2	7,5
Other non-monetary changes	0,4	0,0
Cash flows from operating activities before changes in working capital	55,0	50,5	4,5	8,9%
Change in inventory	(2,6)	(3,3)
Change in trade receivables	11,2	(5,9)
Change in trade payables	(23,0)	(25,5)
Change in other operating assets and liabilities	(7,2)	0,8
Income taxes paid	(11,3)	(9,7)
Net cash inflow from operating activities (A)	22,1	7,0	15,2	217,1%
Investments in property, plant and equipment	(9,8)	(7,7)
Disposals of property, plant and equipment	2,5	0,8
Investments in intangible assets	(9,4)	(8,3)
Disposals of intangible assets	1,0	0,0
Dividends received from other entities	0,1	0,3
Disposal/(Investments) of subsidiaries, associates and other entities	4,2	0,0
(Netted from opening cash & cash equivalent)
Net cash inflow (outflow) from investing activities (B)	(11,4)	(14,9)	3,5	(23,5)%
Repayment of IFRS 16	(6,2)	(4,3)
Proceeds from new borrowings	0,0	4,0
Repayment of borrowings	(4,5)	(37,8)
Net increase (decrease) of current financial assets and liabilities	20,6	(32,4)
Dividends paid	(48,8)	(31,6)
Payments of net financial expenses	1,5	0,7
Net cash inflow (outflow) from financing activities (C)	(37,4)	(101,3)	64,0	h.v.
Net increase (decrease) in cash and cash equivalents (D)=(A)+(B)+(C)	(26,6)	(109,2)	82,6	h.v.
Free Cash Flow	2,9	(9,0)	12,0	h.v.
Cash and cash equivalents at the beginning of the year	205,4	174,3
Net increase (decrease) in cash and cash equivalents from January 1 to December 31	(26,6)	(109,2)
Effects of exchange rate differences on cash and cash equivalents	(4,9)	2,5
Cash and cash equivalents at the end of the year	173,9	67,6

Ebitda adjusted reconciliation H1 2023

(€m)	Jun 2022	Jun 2023	Jun 2023 vs Jun 2022 Δ %
Total Revenues	325,2	370,0	13,8%
Ebitda	50,9	62,6	23,0%
Margin %	15,6%	16,9%
Ebit	28,8	36,4	26,5%
Margin %	8,8%	9,8%
Other operations cost	0,0	0,1
Personnel cost	0,8	0,5
Service, Rentals and leases	0,1	0,7
Cost of raw, ancillary and consumable materials and goods for resale	0,0	0,0
Share of result joint venture and impairment	0,0	(4,5)
Total not recurring on Ebitda	0,9	(3,2)	h.v.
EBITDA Adjusted	51,8	59,4	14,6%
Margin %	15,9%	16,1%
Provision for risk and charges	0,6	1,9
Depreciations, amortisations and write-downs	0,0	0,0
Total not recurring on Ebit	1,5	(1,3)	h.v.
Ebit Adjusted	30,3	35,1	15,7%
Margin %	9,3%	9,5%