Unieuro — Investor Presentation 2021

Jul 14, 2021

STRONGLY REBOUNDING COMPARED TO PANDEMIC PEAK

Q1 2021/22 Results 14 July 2021

Disclaimer

IFRS-16

One year after the first adoption of IFRS 16, the transitional phase during which Unieuro's financial reporting was based on adjusted data and in continuity with the previous accounting standard IAS 17 and the interpretations thereof has ended.

Therefore, in line with practices that were gradually established among retailers listed on international markets, from 1 st March 2020 the Company has been commenting only on the economic figures after the application of the above accounting standard, focusing on Adjusted EBIT and Adjusted Net Profit.

On the other hand, net debt and cash flow do not include the notional component linked to the application of IFRS 16.

Safe Harbour Statement

This documentation has been prepared by Unieuro S.p.A. for information purposes only and for use in presentations of Unieuro's results and strategies.

This presentation is being furnished to you solely for your information and may not be reproduced or redistributed to any other person or legal entity.

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.

Statements contained in this presentation, particularly regarding any possible or assumed future performance of Unieuro S.p.A., are or may be forward-looking statements based on Unieuro S.p.A.'s current expectations and projections about future events, and in this respect may involve some risks and uncertainties. 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 Unieuro 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. Unieuro 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 Unieuro S.p.A. shall not be taken as a representation or indication that such performance, trends or activities will continue in the future.

This presentation has to be accompanied by a verbal explanation. A simple reading of this presentation without the appropriate verbal explanation could give rise to a partial or incorrect understanding.

This presentation is of purely informational and does not constitute an offer to sell or the solicitation of an offer to buy Unieuro'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 Unieuro.

Unieuro'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.

Due to rounding, numbers presented throughout this presentation may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.

Highlights

Record-breaking performance in Q1 2021/22 :

• Vs. Q1 20/21, deeply impacted by the pandemic
• Vs. Q1 19/20, pre-Covid and with no material perimeter changes

Sales at 581.8 €m: +35,7% y/y (+17.5% vs. pre-Covid)

• Phisycal network excellent recovery
• E-commerce normalisation after booming home delivery in Q1 20/21

Despite typical business seasonality affecting Q1:

• Positive Adjusted EBIT of 6.5 €m, compared to -11.1 €m in Q1 20/21
• Positive Adjusted Net Income of 3 €m, compared to -13.8 €m
• Cash absorption limited to 36.5 €m (40 €m in Q1 20/21) leading to a Net Cash Position of 121.4 €m

Guidance confirmed for current FY, as announced on Investor Day

Q1 2021/22 Key Financials

Adj. EBIT margin Adj. EBIT (€m) (2.5) (11.1) 6.5 Q1 19/20 Q1 20/21 Q1 21/22 +158.2% 1.1% (2.6)% (0.5)%

Adj. Free Cash Flow (€m)

Adj. Net Income (€m) Adj. Net margin (5.6) (13.8) 3.0 Q1 19/20 Q1 20/21 Q1 21/22 +121.7% 0.5% (3.2)% (1.1)%

Net Working Capital (€m)

Sales

Strong performance even compared to pre-Covid

• Excellent start of the year, still led by:
  • − effective omnichannel strategy
  • − consumer trends triggered by the pandemic
• Easy comparison base: extraordinarily weak Q1 2020/21 due to the impact of the peaking Covid emergency
• Like-for-like sales: +32.6%
  • − strong rebound of physical stores, impacted by lockdown and voluntary closures Q1 20/21
  • − Online normalization (-27.7%)
• Sales increase also vs. Q1 2019/20 (pre-Covid): +17.5%
• No significant perimeter change over the 2 years

Sales Breakdown

• Sales per channel – Q1 2021/22 Retail growing sharply, thanks to gradual lifting of restrictions, internalisation of Unieuro by Iper shop-in-shops, opening of further Spazio Conad shops as well as important new openings over the last 12 months
  • Online channel dropping compared to the extraordinary results of the previous Financial Year. Normalisation under way
  • Indirect channel growing steadily despite the transition of Unieuro by Iper shopin-shops to the retail channel
  • B2B confirming itself as an opportunistic and volatile business segment
  • Travel benefiting from the gradual resumption of traffic in train stations and airports, which had been partly or totally closed down during the pandemic. Still down vs. pre-Covid context
• Sales per category (1) – Q1 2021/22 Grey still driven by undergoing consumer trends linked to communication, smart working and e- learning
  • White recording significant growth thanks to consumer trends linked to home care and the contribution of the "Passione Casa" promotional campaign (not carried out last year)
  • Brown strong performance boosted by TV-sets, which benefit from the upcoming switch-off, to start on 1 September 2021
  • Other products up, driven by electric mobility
  • Services growing significantly mainly thanks to an increase in extended warranties sales

Notes: Consolidated results. Unieuro Q1 ends on 31 May. Data in millions of Euro, unless otherwise stated. (1) The segmentation of sales by product category takes place on the basis of the classification adopted by the main sector experts. Note therefore that the classification of revenues by category is revised periodically in order to guarantee the comparability of Unieuro data with market data.

67.8%

Profitability

• Gross Margin at 22.4%: profitability increased compared to the Q1 20/21 (22.4% vs 18.7%) mainly due to a more favourable mix of channels
• Personnel Costs +18.7 €m; incidence up from 7.1% to 8.4% due to extraordinary savings in Q1 20/21 (i.e. social safety nets) and the internalisation of Unieuro by Iper shop-in-shops
• Marketing costs +2.1 €m, with the restart of promotional campaigns that were suspended Q1 20/21. Incidence on revenue slightly down from 1.9% to 1.8%
• Logistics costs +2.0 €m driven by the rise in volumes. Incidence on revenue dropped from 3.9% to 3.2% following the normalisation of channel mix
• Other costs +9.5 €m, with an incidence on revenue from 3.1% to 3.9%. Lower discounts on rents, higher variable rents and increase in operating costs, mainly relating to utilities and maintenance fees as a consequence of increased stores activity
• Amortisations and depreciations of fixed assets basically in line with Q1 20/21

Financial Overview

Net Financial Debt (Cash) Capex

Adj. Free Cash Flow Net Working Capital

Others Working Capital

• Cash absorbtion in line with Unieuro seasonality (Free Cash Flow Adj. -36.5 €m, -40.1 €m in Q1 20/21)
• Net Cash standing at 121,4 €m vs. 11.2 €m at 31 May 2020 (when Balance Sheet protection measures where put in place)
• Main drivers:
  • − Strong operating profitability
  • − Normalisation of Capex
  • − Net Working Capital contraction mainly due to calendar effects on accruals and temporary phenomena penalising Trade Working Capital
• Total Capex at 8.4 €m :
  • − 1.3 €m connected to M&A activities (mainly 2C S.r.l./Expert in the Turin area)
  • − Investments on the store network restarted at a regular pace
  • − Digital trasformation projects

Q1 2021/22 Key Operational Data

Unieuro's Retail Network

	31 May 2021	Openings	Closings	28 Feb. 2021	o/w Click & Collect
DOS:	276	+3		273	267
- Malls and free standing stores	239	+3		236
- Shop-in-shops	26			26
- Travel stores	11			11
Affiliated stores:	258	+8	-4	254	138
- Traditional	258	+8	-4	254
- Shop-in-shops	0			0
TOTAL STORES:	534	+11	-4	527	405

Total Retail Area (sqm, DOS only)

Sales density (€/sqm, LTM)

Net Promoter Score(1) (direct channel only)

Active Loyalty Cards(3) (thousands)

Workforce (FTEs)

Notes: Consolidated results. Unieuro Q1 ends on 31 May. Data in millions of Euro, unless otherwise stated. (1) Net Promoter Score (NPS) measures customer experience and predicts business growth. It can range from -100 (if every customer is a Detractor) to 100 (if every customer is a Promoter). (2) Because of lockdown, 86% of survey respondents in Q1 2020/21 were Online customers (3) Active loyalty cards defined as customers who made at least a transaction within the last 12 months.

Notes and Glossary

All data contained in this press release are consolidated data. The scope of consolidation includes the Parent Company Unieuro S.p.A., the wholly-owned subsidiary Monclick S.r.l. (consolidated from 1 June 2017) and the wholly-owned subsidiary Carini Retail S.r.l. (consolidated from 1 March 2019 and finally merged into Unieuro S.p.A., effective as from 1 September 2020).

Economic and financial figures reflect the adoption of IFRS 16 accounting principle, unless otherwise indicated.

Growth of like-for-like Revenues is calculated by including: (i) Retail and Travel stores in operation for at least one full Fiscal Year at the end of the reference period, after taking into account stores affected by discontinued operations in a significant manner (e.g. temporary closures and major refurbishments) and (ii) the entire online channel.

Adjusted EBIT is EBIT adjusted for: (i) non-recurring expenses/(income), (ii) non-recurring depreciation, amortisation and write-downs, and (iii) the impact from the adjustment of revenues for extended warranty services net of related estimated future costs to provide the assistance service, as a result of the change in the business model for directly managed assistance services.

Adjusted Net Income is calculated as Net Income adjusted for (i) the adjustments incorporated in the Adjusted EBIT, (ii) the adjustments of the non-recurring financial expenses/(income) and (iii) the theoretical tax impact of these adjustments.

Adjusted Free Cash Flow is defined as cash flow generated/absorbed by operating activities net of investment activities inclusive of financial expenses and lease flows and adjusted for non-recurring investments and other non-recurring operating flows and including adjustments for non-recurring expenses (income) and their non-cash component and the related tax impact.

Net debt (cash), or Net financial position, is financial debt – not including Lease liabilities (IFRS 16) – net of cash and cash equivalents.

Net Promoter Score (NPS) measures customer experience and predicts business growth. It can range from -100 (if every customer is a Detractor) to 100 (if every customer is a Promoter.

	Q1 21/22			Q1 20/21			% change
	Adjusted	%	Reported	%	Adjusted	%	Reported	%	(Adjusted)
Sales	581,8	100,0%	581,8	100,0%	428,9	100,0%	428,9	100,0%	35,7%
Purchase of goods - Change in Inventory	(451 ,5)	(77 ,6%)	(452 ,4)	(77 ,8%)	(348 ,6)	(81 ,3%)	(349 ,1)	(81 ,4%)	29,5%
Gross profit	130,4	22,4%	129,5	22,2%	80,3	18,7%	79,8	18,6%	62,4%
Personnel costs	(49 ,0)	(8 ,4%)	(49 ,2)	(8 ,5%)	(30 ,3)	(7 ,1%)	(30 ,4)	(7 ,1%)	61,6%
Logistic costs	(18 ,8)	(3 ,2%)	(18 ,9)	(3 ,3%)	(16 ,8)	(3 ,9%)	(16 ,9)	(3 ,9%)	11,8%
Marketing costs	(10 ,2)	(1 ,8%)	(10 ,4)	(1 ,8%)	(8 ,1)	(1 ,9%)	(8 ,2)	(1 ,9%)	26,2%
Other costs	(21 ,1)	(3 ,6%)	(21 ,3)	(3 ,7%)	(12 ,1)	(2 ,8%)	(12 ,1)	(2 ,8%)	74,3%
Other operating and income costs	(1 ,9)	(0 ,3%)	(1 ,9)	(0 ,3%)	(1 ,3)	(0 ,3%)	(1 ,3)	(0 ,3%)	39,0%
EBITDA	29,4	5,0%	27,8	4,8%	11,6	2,7%	10,9	2,5%	153,5%
D&A	(22 ,9)	(3 ,9%)	(23 ,0)	(4 ,0%)	(22 ,7)	(5 ,3%)	(22 ,7)	(5 ,3%)	0,9%
EBIT	6,5	1,1%	4,7	0,8%	(11,1)	(2,6%)	(11,8)	(2,7%)	158,2%
Financial Income - Expenses	(3 ,2)	(0 ,5%)	(3 ,2)	(0 ,5%)	(3 ,6)	(0 ,8%)	(3 ,6)	(0 ,8%)	(10 ,7%)
Adjusted Profit before Tax	3,3	0,6%	1,5	0,3%	(14,7)	(3,4%)	(15,3)	(3,6%)	122,4%
Taxes	(0 ,3)	(0 ,0%)	(0 ,1)	(0 ,0%)	0,9	0,2%	0,9	0,2%	(133 ,5%)
Net Income	3,0	0,5%	1,4	0,2%	(13,8)	(3,2%)	(14,4)	(3,4%)	121,7%

Q1 Adjustments to P&L

	Q1 21/22	Q1 20/21	change %
M&A Costs	0,5	0,0	na
Stores opening , relocations and closing costs	0,3	0,2	39,8%
Other non recurring costs	0,0	(0 ,0)	(100 ,0%)
Accidental events	0,0	0,0	0,0%
Non-recurring items	0,8	0,2	311,6%
Change in business model (extended warranties adjustments)	0,9	0,5	100,0%
Total adjustments EBIT to	1,7	0,7	161,8%
Other adjustments	0,0	0,0	na
Fiscal effect of above-listed adjustments	(0 ,2)	(0 ,1)	162,1%
(Loss) Total adjustments to Net Income	1,6	0,6	164,5%

Balance Sheet

	31 May 2021	28 Feb. 2021
Trade Receivables	86,6	65,3
Inventory	493,5	372,1
Trade Payables	(639 ,3)	(505 ,1)
Capital Trade Working	(59,3)	(67,7)
Current Tax Assets and Liabilities	(3 ,3)	(3 ,8)
(1) Current Assets	35,6	18,0
Liabilities (2) Current	(246 ,4)	(261 ,2)
Short Term Provisions	(3 ,1)	(0 ,8)
Net Working Capital	(276,4)	(315,4)
Tangible and Intangible Assets	105,2	104,5
Right of Use	440,5	451,6
Net Deferred Tax Assets and Liabilities	36,6	37,1
Goodwill	196,1	195,2
(3) Other Long Term Assets and Liabilities	(30 ,1)	(30 ,9)
TOTAL INVESTED CAPITAL	471,9	442,1
Net financial Debt	121,4	154,8
Lease liabilities	(434 ,8)	(443 ,7)
(IFRS 16) Net Financial Debt	(313,4)	(288,8)
Equity	(158,4)	(153,3)
TOTAL SOURCES	(471,9)	(442,1)

Capital Net Working	(276,4)	(315,4)		31 May 2021	28 Feb. 2021
			expenses (mainly Warranties) Accrued Extended	(167,7)	(179,9)
Tangible and Intangible Assets	105,2	104,5	Personnel debt	(47,6)	(42,9)
Right of Use	440,5	451,6	VAT debt	(6,7)	(17,5)
Deferred Net Tax Assets and Liabilities	36,6	37,1	Other	(22,7)	(19,1)
Goodwill	196,1	195,2	LTIP Personnel debt	(1,7)	(1,7)
(3) Other Long Term Assets and Liabilities	(30 ,1)	(30 ,9)	Current Liabilities	(246,4)	(261,2)

(3) Other Long Term Assets and Liabilities

financial Net Debt	121,4	154,8		31 May 2021	28 Feb. 2021
Lease liabilities	(434 ,8)	(443 ,7)	assets (deposits, leases) Financial	2,9	2,9
Net Financial Debt (IFRS 16)	(313,4)	(288,8)	Deferred Benefit Obligation (TFR)	(13,6)	(13,0)
			Long Term Provision for Risks	(16,2)	(17,6)
Equity	(158,4)	(153,3)	Other Provisions	(3,1)	(3,1)
			LTIP Personnel debt	-	-
TOTAL SOURCES	(471,9)	(442,1)	Other Long Term Assets and Liabilities	(30,1)	(30,9)

Cash Flow Statement

	Q1 21/22	Q1 20/21	% change
Reported EBITDA	27,8	10,9	154,3%
Taxes Paid	-	-	na
Interests Paid	(2 ,7)	(2 ,8)	(2 ,3%)
Change in NWC	(34 ,8)	(25 ,0)	39,2%
Change Other in Assets and Liabilities	0,4	0,1	177,6%
Reported Operating Cash Flow	(9,4)	(16,7)	(43,8%)
Purchase of Tangible Assets	(5 ,5)	(1 ,5)	259,6%
of Purchase Intangible Assets	(2 ,9)	(1 ,4)	108,5%
Change in capex payables	(4 ,9)	(6 ,7)	(26 ,1%)
Acquisitions	(7 ,1)	(6 ,0)	17,6%
Free Cash Flow	(29 ,8)	(32 ,3)	(8 ,0%)
Cash effect of adjustments	0,7	0,2	313,5%
Non recurring investments	8,3	6,0	39,0%
Other non recurring cash flows	(2 ,6)	(0 ,1)	1811,8%
Cash (IFRS Adjusted Free Flow 16)	(23,3)	(26,3)	(11,4%)
Lease Repayment	(13 ,2)	(13 ,8)	(4 ,7%)
Adjusted Free Cash Flow	(36,5)	(40,1)	(9,1%)
Cash effect of adjustments	1,9	(0 ,0)	(4754 ,2%)
Acquisition Debt	(2 ,0)	-	(100 ,0%)
Dividends	-	-	na
Log Term Incentive Plan	3,7	-	100,0%
Other Changes	(0 ,6)	(0 ,7)	(6 ,2%)
Δ Net Financial Position	(33,5)	(40,8)	(18,1%)

Net Financial Debt

	(0 ,1)
	(48 ,7)
(49,5)	(48,7)
(6 ,4)	(6 ,8)
(3 ,0)	(9 ,0)
(9,4)	(15,8)
180,3	219,4
121,4	154,8
(434,8)	(443,7)
(313,4)	(288,8)
	(0 ,7) (48 ,8)

IFRS 16 Impact

Main Effects on Unieuro's Q1 2021/22 Results (management data, non-audited)

		31 May 2021 (IAS 17)		31 May 2021 (IFRS 16)
• ADJ. EBITDA	reduction of operating costs (rental fees paid on stores, headquarters, warehouses and vehicles), net of income from store sub-lease agreements	12.4	+16.9	29.4
• ADJ. EBIT •	effects on Adj. EBITDA increase in D&A due to amortisation of rights of use	4.9	+1.6	6.5
• effects on Adj. EBIT ADJ. PROFIT BEFORE TAXES •	increase in Financial expenses for interests connected with rights of use	4.1	-0.8	3.3
NET • FINANCIAL DEBT (CASH)	recognition of liabilities for rights of use (other current and non-current financial payables), net of non-current financial receivables concerning sub-lease agreements	(121.4)	+434.8	(313.4)

NEXT CORPORATE AND IR EVENTS

ITALIAN EQUITY WEEK | CONSUMER DAY (virtual) by Borsa Italiana 7 September 2021

NEW MILAN OFFICES OPENING CEREMONY Milano, via Marghera, Autumn 2021

H1 2021/22 RESULTS 11 November 2020

9M 2020/21 RESULTS 13 January 2022

IR CONTACTS

Andrea Moretti Investor Relations Director

+39 335 5301205

amoretti@unieuro.com investor.relations@unieuro.com

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Unieuro S.p.A.

Palazzo Hercolani – via Piero Maroncelli, 10 47121 – Forlì (FC) – Italy

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