Slide 1: Investor presentation AIM Conference 2019
Investor presentation AIM Conference 2019 London, October 21, 2019
Slide 2: Disclaimer
Disclaimer Privacy The document, drafted by the management of Marzocchi Pompe S.p.A., is strictly confidential, therefore none of its contents may be shared with third parties or used for purposes different from those specified in it. Furthermore, this Document shall not be copied or reproduced with
Slide 3: Agenda
Agenda ❑ Company at a Glance ❑ 1H 2019 Results ❑ Achievements ❑ Market & Competitive Positioning ❑ Appendix ▪ Business Overview 3
Slide 4: Company at a Glance
Company at a Glance Marzocchi Pompe is a leading player in the design, production and marketing of high performance external gear pumps and motors, Company which are used in various sectors: industrial (textile machines, machine tools, plastic injection machines, medical equipment, energy, etc.), mo
Slide 5: Top Management & Shareholders
Top Management & Shareholders TOP MANAGEMENT BOARD OF DIRECTORS SHAREHOLDERS Free Float 23,53% Paolo MARZOCCHI Paolo MARZOCCHI Main Shareholder, Executive Chairman Executive Chairman Gabriele BONFIGLIOLI CEO Guido NARDI CFO, Executive Director Abbey Road Crosar Capital SpA S.r.l. (Paolo Valentina CA
Slide 6: 1H 2019 Results
e ie Ge Gp G5 @ ; Lb Ot Came ta a Pa © " ’ | Tis A). We ke he be i] ols ale le lal 24 th ath, Ei tll atON didn l => _|MARZOCCHIPOMPE Sion assure conn runes 1H 2019 Results
Slide 7: 1H 2019 results account for business model effectiveness
1H 2019 results account for business model effectiveness ➢TOTAL REVENUES ADJUSTED* IN LINE WITH 1H 2018 DESPITE TOUGH INDUSTRIAL ENVIRONMENT ➢NET SALES ADJUSTED* AT EURO 21.1 MLN (-5.4% ON 1H 2018) MAINLY DUE TO THE EXPECTED AUTOMOTIVE MARKET SLOWDOWN ➢EBITDA MARGIN ADJUSTED* AT 17% IN LINE WITH THE
Slide 8: Net Sales adj* at € 21.1 mln, EBITDA adj* margin at 17%
Net Sales adj* at € 21.1 mln, EBITDA adj* margin at 17% • Net Sales adj* reached Euro 21.1 million in 1H-19, with a decrease of 5.4% YoY mainly due to the expected slowdown of the Automotive market (-15%) Total Revenues, Net Sales adj* and EBITDA adj* 23.1 22.9 • EBITDA Adj* for non-recurring gains
Slide 9: Core market segments topped 72% of revenues
Core market segments topped 72% of revenues Revenue breakdown • Revenues by core market segments (Industrial and Mobile), representing some two third of total 30.5% 27.9% Revenues, reached Euro 15.2 million, basically flat 10.2% 12.9% YoY in a generally tough industrial environment 21.2% 25.4% Core
Slide 10: EBIT adj* at € 1.3 mln, Net Income adj* at € 0.8 mln
EBIT adj* at € 1.3 mln, Net Income adj* at € 0.8 mln EBIT Adjusted* and Net Income Adjusted* 2.8 2.7 • EBIT Adjusted slowed down to Euro 1.3 million, after Depreciation & Amortization rising to Euro 2.6 million (vs Euro 1.8 million in 1H-18) mainly due to the LBO operation (Euro 0.6 million) 1.3 • N
Slide 11: Net Financial Position Evolution
Net Financial Position Evolution • Net Financial Position slightly worsened in 1H-19 to Euro 20.2 million vs Euro 19.2 million at end- 2018, following Euro 1.5 million Capex (7% of Revenues, in line with Industrial Plan) and Euro 2.7 million increase in Working Capital (higher Receivables and Invent
Slide 12: Achievements
Achievements
Slide 13: ELIKA, the new low noise & high efficiency pump
ELIKA, the new low noise & high efficiency pump ➢ THE LAUNCH OF THE NEW ELIKA DEPARTMENT HAS BEEN COMPLETED ➢ WITH AN INVESTMENT OF MORE THAN 1 MILLION EUROS IN THE PRODUCTION SITE OF CASALECCHIO (BO) ➢ COVERED BY TWO PATENTS, ELIKA IS MARZOCCHI POMPE'S FLAGSHIP PRODUCT ➢ THE TARGET IS TO SATISFY TH
Slide 14: Market & Competitive Positioning
Market & Competitive Positioning
Slide 15: Fluid Power market and growth forecasts
Fluid Power market and growth forecasts The Fluid Power market is made up by the hydraulic segment and the pneumatic segment. In Asia, Europe and USA the Fluid Power home1 market went from Euro 25,7 billions in 2000, to around Euro 43,6 billions in 2017, of which Euro 31,2 billion (72%) stemming fro
Slide 16: Focus on hydraulic pumps’ market
Focus on hydraulic pumps’ market Within the Hydraulic home1 market, the pumps’ segment is estimated by ISC to be around Euro 5,4 billion in 2017 (17%), of which Euro 3,2 billion (10%) coming from the reciprocating pumps’ segment (axial and radial piston pumps) and Euro 2,2 billion (7%) from the rota
Slide 17: Competitive positioning
Competitive positioning Characteristic Quality & Customer Wide range of Wide range of Competitive Quality vs gear pumps Fluid Power Customization price Price Company Performance service Marzocchi Pompe Bosch Rexroth Bucher Casappa Concentric Galtech/Interpump Hema / DB HPI / JTech Parker Roquet Sala
Slide 18: Product Quality & Performance
Leadership in external gear pumps market + Product Quality & Performance Source: Marzocchi Pompe SpA management estimates - - Product Customization/ Customer service + 18
Slide 19: Appendix
Appendix
Slide 20: MP core business: manufacturing of external gear pumps and motors
MP core business: manufacturing of external gear pumps and motors • The pumps have the function of transferring the fluid from a tank to an actuator within an oil-hydraulic circuit. (for example a cylinder that drives the shovel of an excavator). This transfer from the suction circuit to the deliver
Slide 21: Overview of pump composition and application examples
Overview of pump composition and application examples • The pumps are composed of the following main parts: body, flange, cover and bushings in aluminium, and gears (driving and driven wheel) in steel. For some types of products, the flange and the cover can be made out of cast iron. Further compone
Slide 22: Product applications
Product applications Medical equipment Gardening machines Actuators for surgical tables, diagnostic equipment, latest- In this type of application it is essential that oil-hydraulic pumps generation stretchers, dental chairs: in general, for small medical and motors guarantee the complete absence of
Slide 23: Technological innovation and quality standards
Technological innovation and quality standards The Group's business model is focused on the design, production and marketing of high performance external gear pumps and motors. The Company manufactures almost all the main components within its own production sites and uses the historical brand “Marz
Slide 24: Target markets
Target markets Core market’s revenues include Industrial and Mobile machines applications and represent 68,7% of total 2018 revenues, including sales to distributors /sales network, which alone contribute to 37,4% of MP’s total sales(*) FLUID POWER Core Automotive Industrial Mobile Machines Possible
Slide 25: Main client composition
Main client composition • The company benefits from a diversified client base for the Industrial and Mobile machine sectors, having their top 3 clients making up only 16,6% of sales and the top 10 representing 31,1%. The Automotive sector, on the other hand, has fewer clients making up for most of i
Slide 26: Global distribution network
Global distribution network Marzocchi Pompe relies on an international distribution network present in over 50 countries. Products are distributed through various channels, such as direct sales, distributors’ sales1, American branch operations and Chinese branch operations Distribution network’s hig
Slide 27: Investment highlights
Investment highlights • The Hydraulic market is large, estimated to be around Euro 8.8 billions in 2016 in Europe (Source: CETOP) Large target market and Euro 2.6 billion in 2017 in Italy (Source: Assofluid) experiencing growth • Evidence of upward trend of Italian hydraulic market in the 2009-2017
Slide 28: Organizational structure and production sites
Organizational structure and production sites • Marzocchi Pompe can count on a team of professionals with consolidated experience. As of 31 December 2018 the workforce consists of 255 resources (of which 237 are permanent employees), with a heterogeneous background of professional skills that streng
Slide 29: History
History Main operative milestones Start-up of large-scale production of the Elika pump, an innovative product with low noise and high Construction of a efficiency standard, even at low production unit in Ostellato rotation speed. (FE) with investments of Signing of a multi-year agreement over € 15m
Slide 30: Financial highlights 2016-2018 (1/2)
Financial highlights 2016-2018 (1/2) Evolution of Revenues and EBITDA margin Market segment distribution of 2016-2018 revenues 100% 100% 100% 17.1% 17.3% 43.4 27,3% 35,2% 31,3% 39.8 34,2% 8.3% 31,2% 37,3% Core 12,3% 31.6 11,1% 10,6% 26,1% 22,5% 20,8% 2016 2017 2018 2016 2017 2018 Total Revenues Adj*
Slide 31: Financial highlights 2016-2018 (2/2)
Financial highlights 2016-2018 (2/2) Net Financial Position Evolution Cash Flow breakdown (4,8) 19,2 (1,3) 1,1 (6,7) 10,8 7,0 8,4 14,4 4,2 13,1 -1,5 -0,9 4,4 2016 2017 2018 4,0 4,3 (6,3) (9,0) (9,4) 11,7 10,6 (0,5) 9,7 (0,6) (5,3) (0,6) (1,7) 2016 2017 2018 (6,5) Long term fin. debt Short term fin.
Slide 32: Focus on LBO
Focus on LBO During 2018 the company underwent a restructuring procedure that modified the shareholding structure. As of today, the company is owned by Paolo Marzocchi. The operation was completed through the creation of a financial debt with Banca di Bologna, which allowed the release of some share
Slide 33: CONTACTS
CONTACTS Marzocchi Pompe S.p.A. ir@marzocchipompe.com EnVent Capital Markets – Nominated Adviser Paolo Verna pverna@enventcapitalmarkets.co.uk CDR Communication - Investor e Media Relations Silvia Di Rosa silvia.dirosa@cdr-communication.it Paola Buratti paola.buratti@cdr-communication.it Martina Zuc