Valsoia — Investor Presentation 2020

Jan 29, 2020

Corporate Presentation ISMO Paris January 30, 2020

Agenda

Company Overview

Market

Competitive Landscape

Strategy & Outlook

Financials

Valsoia at a glance

COMPANY	Valsoia is the pioneer for non-dairy, plant-based products in the Italian market.
MISSION		Valsoia's mission is to provide healthy, functional, nutritionally-balanced products that are tasty and enjoyable, drawing on traditional Italian expertise and culinary culture. Valsoia's from-breakfast-to-dinner	range.
BRANDS
FIGURES	+12 k PoS Worldwide	Over 7 million families	9 product categories	€82.3m turnover in FY 2018	R&D for Product innovation

Founded in 1990 by neurologist Lorenzo Sassoli and listed on the Italian stock market since 2006.

Today Valsoia is expanding in the domestic and international markets, through product innovation and acquisitions

Governance

Board of Directors Top Management

Ruggero Ariotti Camilla Chiusoli

Cesare Doria de Zuliani Gregorio Sassoli Honorary Chairman Director

Andrea Panzani Chief Executive Officer

Lorenzo Sassoli Susanna Zucchelli Chairman Independent Director

Furio Burnelli Francesca Postacchini Deputy Chairman Independent Director

Deputy Chairman Independent Director

Chairman Lorenzo Sassoli

CEO Andrea Panzani

CFO Nicola Mastacchi

Shareholder Structure as at May 2018

Business Operation Model

Frozen

Products

Healthy products

• The healthy products segment corresponds to Valsoia Bontà e Salute, Vitasoya and Naturattiva.
• It accounts for about 60% of sales

Food

• Our food segment products include Santa Rosa, Diete.Tic, and Weetabix distribution
• Food products account for 27% of sales

Healthy products

Food Segment & Other

Santa Rosa, purchased in 2011, is a historic brand in the Italian food tradition, offers high quality standard jams, choosing only the highest quality fruit through strict purchasing specifications.

Diete.Tic, purchased in 2017, is a liquid sweetener, sugar substitute, with a unique and patented process. Completely calorie-free, it does not alter the taste of food or drinks and is highly soluble.

Valsoia distributes Weetabix in Italy. A range of whole grains for a wellness breakfast. Produced by the Weetabix Food Company. They are unique, loved and appreciated all over the world.

Valsoia is the brand licensee for BlueNyx. It is a dietary supplement with an exclusive MGTS 3 ACTION formula that promotes the natural and regenerating path of one's sleep. Thanks to the presence of vitamins and mineral salts, it contributes positively to the energy metabolism, to reduce the sense of tiredness and to maintain the functionality of the immune system.

Agenda

Company Overview

Market

Competitive Landscape

Strategy & Outlook

Financials

Non-dairy and plant-based alternatives market trend and number of families

The polarization of preferences: Favorable to the target of plant-based product markets

Purchase habits are changing, customers preferences are polarizing on the higher and lower range of price. It means that Valsoia's target segment is growing through the years.

"Golden consumers" are the most likely to spend on healthy eating habits.

Italy healthy food consumer trends (Sell out value)

	Value € mln	Var %
Market		2014-2017 Yearly average 2018 2019
Bio	1,593	18.3% 5.9% 3.8%
Supplements	1,022	13.5% 5.2% 4.8%
Lactose free	505	17.3% 7.7% 5.4%
Gluten free	222	19.3% 2.3% 8.0%
Vegetable base	477	12.3% -6.5% -5.0%

The trend setters that have characterized growth in recent years are slowing down their dynamism and, in some cases, they are marking the pace

The market is becoming increasingly competitive with a growing number of SKU's on shelves leading to a risk of overcrowding. Starting in 2018 a small dip can be identified with the beginnings of a rationalization process

Agenda

Company Overview

Market

Competitive Landscape

Strategy & Outlook

Financials

Competitive Landscape

Valsoia continues to hold the largest market share in Italy.

Market Shares

Reputation Institute Analysis (1/3)

The Reputation Institute analysis is based on:

• An annual study since 2006
• A sample of 30,000 subjects in Italy
• The perimeter studied regards 388 companies operating in Italy

Reputation Institute Analysis (2/3)

Rank	Industries	Reputation
1	Luxury Products	74,63
aT	Electrical & Electronics	72,67
3	EMCG - Food	72,65
41	Automotive	72,56
5	Streetwear	72,39
6	Industrial	71,53
7	FMCG - Home & Personal Care	71,50
8	FMCG - Beverage	71,31
9	Financial - Diversified	70,96
10	Entertainment - Media	70,43
11	Retail	69,38
12	Logistic	68.66
13	Pharmaceutical	67,91
14	Tourism	64,11
15	Financial - Insurance	63,96
16	Telco	61,70
17	Energy & Utilities	60,51
18	Financial - Bank	59,14
19	Entertainment - Gambling	58,08

Reputation Institute Analysis (3/3)

Within the FMCG – Food Category Valsoia ranks 17th

Rank	Industries	Reputation
1	Luxury Products	74,63
ର୍ଷ	Electrical & Electronics	72,67
3	EMCG - Food	72,65
41	Automotive	72,50
5	Streetwear	72,39
6	Industrial	71,53
7	FMCG - Home & Personal Care	71,50
3	FMCG - Beverage	71,31
a)	Financial - Diversified	70,96
10	Entertainment - Media	70,43
11	Retail	60,38
12	Logistic	68,66
13	Pharmaceutical	67,91
ग्री	Tourism	64,11
15	Financial - Insurance	63,96
16	Telco	61,70
17	Energy & Utilities	60,51
18	Financial - Bank	59,14
19	Entertainment - Gambling	58,08

1	FERRERO	81,4	10	Galbusera	75,3	19	Barilla	69,6
2	DE LECCO	77,9	11	CrowCHIG	73,9	20	HERSHEY	69,4
3	MUTTI	77,6	12		73,8	21	Amadori	69,3
4	CARLO	76,4	13	ு GRANAROLO	73,5	22	KraftHeinz	67,8
5	Kellogigs	76,3	14	FISBRI	73,5	23	Campbells	66,5
6	dille	76,2	15	ಗ BOLTON . R. 0 11	71,1	24	Mondelez,	65,3
7		75,8	16	MARS	70,9	25	C GRUPPO CREMONINI	62,9
8	Spoorti	75,7	17	VALSOIV	70,8	26	Nestle Good Food, Good Life	60,7
9	Findus /	75,3	18		70,8

Vegetable Alternatives

THE WORLD IS BECOMING VEGETARIAN AND SUSTAINABLE

Valsoia is at the center of some of the most heavily discussed issues of the 21st century.

Entro quarant'anni la popolazione mondiale aumenterà di due miliardi e le risorse idriche scarseggeranno. Secondo un team di studiosi svedesi, per evitare carestie dovremo mangiare frutta e verdura anziché bistecche

Agenda

Company Overview

Market

Competitive Landscape

Strategy & Outlook

Financials

Head	Valsoia top-level brand image
Mouth	Leadership in perceived quality (80% of products have been successfully tested, and are successful compared to competitors)
Innovation	Highly focused on innovation through R&D: 75% of new products are still on the shelves after 3 years
Execution	A strengthened and highly qualified sales force, improve collaboration with retailers
International Expansion	In progress, largely successful
M&A	Targeting companies in Italy and abroad

Focus on Advertising

• Valsoia is market leader with consolidated strong brand image and brand awareness due to high investments in advertising and consumer marketing
• 2019 has seen several new marketing campaigns focusing on contests promoting the consumption of healthy products

Key Messages:

• 100% vegetable, tasty, natural, non-dairy
• Respect for animals and the environment
• A healthy diet for the whole family
• A brand you can trust

Key Messages:

• Through the "Lezioni di Etichetta" campaign Valsoia teaches the general public how to identify products with greater ease

2020 Kick off

February: SANREMO

"The Italian Super Bowl"

Summer

Valsoia Gelato and the upcoming novelties

Valsoia leader, with a share of voice of over 45%

NATIVE 1.0	2.0	3.0
Lactose Intolerance	Flexitarians	Lactose Intolerance
Vegetarians	Vegetarians	Vegetarians
Vegans	Vegans	Flexitarians / Vegans
	No Soy	No Soy
Looking for:		Looking for:
	Looking for:
Solutions / benefits (health		- Solutions / benefits (health
driven purchase)	- Good Taste	driven purchase)
No Cholesterol	- Not looking for a conventional	- Proteins
Proteins	protein alternative	- No cholesterol
		- Good Taste

Focus on 3.0

New Valsoia line:

From Valsoia's own research facilities:

A complete line of exclusive products to offer consumers the maximum benefits in terms of Goodness and Health.

• Proteins
• Omega 6
• Low sugar
• No cholesterol

In line with the current world trends, Valsoia is the first player in Italy to present a Sugar-free rice-based and oat-based milk.

Bringing innovation to the Food segment through Santa Rosa:

• Only fruit sugars
• Only natural ingredients
• Less sugar than the Jams market average: - 50%
• Less kcal than the Jams market average (from - 49% to -54% depending on the reference)
• Made 65% of fruit

Expanding R&D beyond the Food and Healthy segments through BlueNyx:

• New supplement that promotes the natural and regenerating path of sleep.
• Born from Valsoia research, tested in Italy, Germany, UK and USA for an International launch that will take place at the beginning of 2019.

New ice-cream flavors, for a wide audience as well Flexitarian

the large cup of ice-cream, drowned with exotic fruit cream

the ice-cream cone, based on cashew-nuts with black cherry flavor

The Irresistible Super Burger:

A new 100% Vegetable Burger characterized by few and simple ingredients and does not compromise taste or health.

2019 Launches & 2020 Pipeline

Execution

Development and improvement of Trade Marketing (sales policies and marketing at POS) by structure, tools and working methods

Subdivision of the sales force focused on healthy food and regular food

|--|

Restructuring of sales force in 2018 with the entry of sales key account with experience in multinational companies

The execution capacity includes POS management through a dedicated Team monitored with KPIs

Execution example

Shelves in Italy Our Benchmark Abroad

Coming soon to Italy

Focus on export

• Currently present in 19 countries (Europe and United States) with an eye on China and Russia
• Turnover from exports, excluding Germany, continue to grow
• Ice cream is the main export product:

Dairy-free ice cream

• Company's main expansion drive currently focused on:
  • USA
  • Germany
  • Spain

More than 25% of Gelato and Chocolate Spread Revenues come from Exports

Pioneers in health-food market

Established strong brands

Leader in quality and taste in a high-growth worldwide market

Proven and highly skilled management team

Excellent track record for innovation

Strong cash generation and positive NFP

Dividend Distribution with a payout ratio of ~40%

Agenda

Company Overview

Market

Competitive Landscape

Strategy & Outlook

Financials

36

Profit & Loss

€ 000	H1 2019	H1 2018 (*)
Sales Revenues (Like for like)	37,074	39,709
Sales Revenues (Pomodorissimo Santa Rosa) (**)	(3)	2,918
Total Sales Revenues	37,071	42,627
Changes in inventories of finished products	998	(236)
Other Revenue and income	582	195
TOTAL VALUE OF PRODUCTION	38,651	42,586
Purchases	(19,466)	(21,899)
Services	(8,652)	(9,489)
Other Operating Costs	(5,178)	(5,291)
EBITDA	5,355	5,908
EBITDA margin	14.4%	13.9%
Amortisation and depreciation	(1,172)	(1,040)
EBIT	4,183	4,867
EBIT margin	11.3%	11.4%
Net financial income/(charges)	(80)	(94)
EBT	4,103	4,773
Taxes	(1,101)	(1,298)
NET PROFIT/(LOSS)	3,002	3,475
Net Profit margin	8.1%	8.2%

▪ Like for like sales revenues decreased 6.6% vs. the same period of 2018 due to a negative performance in the vegetable alternatives market

▪ Despite the negative scenario "Valsoia Bontà e Salute" continues to gain market share with a sustained growth in the number of families.

▪ Positive Food Division sales performance. Consumption remains stable

• Exports, excluding Germany, continue to increase
• EBITDA margin increased from 13.9% to 14.4%

(*) The Company adopted IFRS 16 on 1 January 2019 using the modified retroactive application method, the comparative information has not been restated.

(**) The company has stopped sales of the "Pomodorissimo Santa Rosa" Line starting from November 2018 following the Licensing concession to third parties of the relevant Brand

Revenues breakdown

€ 000	H1 2019	H1 2018
Health Division	21,867	24,273
Food Division	10,448	10,483
Other	2,301	2,213
Total Revenues Italy	34,616	36,969
Exports	2,458	2,740
Total Revenues *	37,074	39,709
Pomodorissimo Santa Rosa	(3)	2,918
Total Revenues	37,071	42,627
€ 000	9M 2019	9M 2018
Health Division	34,396	37,039
Food Division	15,578	15,354
Other Total Revenues Italy	3,507 53,481	3,395 55,788
Exports Total Revenues *	3,983 57,464	4,044 59,832
Pomodorissimo Santa Rosa	(3)	4,434

€ 000	30-06-19	31-12-18
Current Non-financial Assets	24,562	18,840
Current Non-financial Liabilities	(21,299)	(15,032)
Net Working Capital	3,263	3,808
Other Net Operating Assets/(Liabilities)	(222)	(94)
Total Non-current Assets	42,963	42,067
Total Investments	46,004	45,781
Shareholders' Equity	66,437	67,355
Current Net Financial Position (cash)	(28,357)	(30,319)
Non-current loans and borrowing	7,924	8,745
Net Financial Position (Cash)	(20,433)	(21,574)
Total Sources	46,004	45,781

• Valsoia boasts a strong cash generation and positive NFP
• At June 30, 2019, taking into account the € 956 thousand resulting from the application of IFRS 16, the NFP was in line with December 31, 2018
• Shareholders' Equity amounted to €66.4M
• At September 30, 2019 the NFP was €24.8M, a continuous improvement compared to 30 June 2019.

Dividend Payment

0%

10%

20%

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40%

50%

60%

Dividends have consistently been distributed every year

Note: DPS refer to the fiscal year and not the year they were paid in.

€ 000	H1 2019	H1 2018
Opening Short-term Net Cash	30,319	15,837
Cash Flow from Operating Activities	5,044	4,489
Taxes Paid	0	0
Cash Flow from Investment Activities	(1,115)	(817)
Cash Flow from Financial Activities	(5,356)	5,771
Cash Flow for the Period	(1,427)	9,442
Closing Short-term Net Cash	28,892	25,279

▪ The primary operating cash flow in H1 2019 was €5.3M.

Disclaimer

This document has been prepared by Valsoia S.p.A. (the 'Company') solely for the purposes of this presentation. This document may not be reproduced or distributed in whole or in part by any other person with any way than the Company. The Company takes no responsibility for the use of this document by any person and for any purposes. The information contained in this document has not been subject to independent verification and no representation, warranty or undertaking, express or implied, is made as to the accuracy, completeness or correctness of the information or opinions contained herein. This presentation may contain forward-looking information and statements about the Company.

Forward-looking statements are statements that are not historical facts. These statements include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, products and services, and statements regarding plans, performance. In any case, investors and holders of the Company are cautioned that forward-looking information and statements are subject to various risk and uncertainties many of which are difficult to predict and subject to an independent evaluation by the Company; that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking statements. No representation, warranty or undertaking is made by the Company in order to the implementation of these forward – looking statements. These risks and uncertainties include, but are not limited to, those contained in this presentation. Except as required by applicable law, the Company does not undertake any obligation to update any forward-looking information or statements.

Neither the Company, its shareholders, its advisors or representatives nor any other person shall have any liability whatsoever for any loss arising from any use of this document or its contents or otherwise arising in connection with this document. This document does not constitute an offer to sell or an invitation or solicitation of an offer to subscribe for or purchase any securities, and this shall not form the basis for or be used for any such offer or invitation or other contract or engagement in any jurisdiction. Under all circumstances the user of this document shall solely remain responsible for his/her own assumptions, analyses and conclusions.

Contacts

Chief Financial Officer & IR IR Consultant

Nicola Mastacchi

Tel: +39 051-6086800 Fax: +39 051-248220 nicola.mastacchi@valsoia.it

Valsoia S.p.A. Via Ilio Barontini, 16/5 40138 Bologna (BO) Italy

www valsoiaspa com

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Silvia di Rosa

CDR Communication S.r.l. Tel: +39 335-7864209 silvia.dirosa@cdr-communication.it

Andrés Olivieri

CDR Communication S.r.l. Tel: +39 338-9191746 andres.olivieri@cdr-communication.it