Esprinet S.p.a. · MIL:PRT

Esprinet — XII Banca IMI Italian Stock Market Opportunities Conference (October 2019)

33 slides from Esprinet's conference presentation, Oct 2, 2019

  1. Slide 1: Group Presentation

    Group Presentation XII Banca IMI Italian Stock Market Opportunities Conference Milan - October 2, 2019

  2. Slide 2: Forward looking statement

    Forward looking statement This presentation may contain forward-looking statements that are subject to risks and uncertainties, including those pertaining to the anticipated benefits to be realized from the proposals described herein. Forward-looking statements may include, in particular, statements

  3. Slide 3: Agenda

    BUSINESS UPDATE AGENDA FINANCIALS Q&A SESSION

  4. Slide 4: Business Update

    © esprinet’ BUSINESS UPDATE

  5. Slide 5: Q2 in a nutshell

    Q2 in a nutshell Sales ICONA 842 M€ +11% on Q2 2018 EBIT ICONA 7.2 M€(1) +30% on Q2 2018 Net profit ICONA 4.6 M€ +67% on Q2 2018 Net financial debt ICONA 183.1 M€ 90.0 M€ excluding IFRS 16 NOTES (1) 6.2 M€ (+12%) excluding effects of IFRS 16 «Leases». 5

  6. Slide 6: Key Updates for Q3

    Key Updates for Q3 Profit & Loss Balance Sheet Key projects • Working Capital • Sales in Q3 up strongly. • Debt refinanced. optimization gaining traction. • Gross Profit as of August • WACC down to 8%. still under pressure. • Key strategic projects • Positive outlook into Q4. • Buy back in progress.

  7. Slide 7: Working Capital Dynamics

    Working Capital Dynamics Inventory Payables Receivables Average levels of inventory progressively declining. First changes in vendor payment First changes in one key retailer terms achieved on one relevant payment terms achieved. Spain has been burdened by low-ROCE business above average levels of s

  8. Slide 8: Outlook / Delivery

    Outlook / Delivery 2019 2020 Moderate top-line growth in future years as focus keeps being ROCE performance. We reiterate the target for a FY 2019E EBIT in the range 38-42 M€, with a strong Improvements in GP % as result of mix growth compared to FY 2018. and efforts on customer satisfaction. Progre

  9. Slide 9: Investment Highlights

    Investment Highlights A new attractiveness of the market Strong positioning • A sizable and growing 14.6 B€ addressable market(1). • Strong leadership in southern Europe: 24.4% share against 17.5% of #2. 2 1 • IT distribution gaining share on total IT spending [from 39.5% to 53.0%(1)]. • Growing sha

  10. Slide 10: Final remarks

    Final remarks Q3 took off in line with budgeted EBIT targets mainly due to very solid top-line performance Working capital optimization negotiations gaining traction Key strategic projects fully operational Debt refinanced FY 2019 operating profitability targets confirmed 10

  11. Slide 11: Upcoming events

    Upcoming events Date Event Venue October 23, 2019 Star Conference London London (UK) Board of Directors: November 13, 2019 Vimercate (IT) Q3 2019 Results November 13, 2019 Press release Q3 2019 Earnings Call & November 14, 2019 Webcast 11

  12. Slide 12: Financials

    © esprinet 12s

  13. Slide 13: Profit & Loss

    Profit & Loss (euro/mln) H1 2019 (1) H1 2018 Var. % FY 2018 adj. (2) H1 2019 • Reported net sales at 1,717.5 M€ Sales 1.717,5 100,00% 1.538,2 100,00% 12% 3.571,2 100,00% increased +12% compared to the prior- Cost of sales (1.636,4) -95,28% (1.461,2) -95,00% 12% (3.400,5) -95,22% year half (+179.3 M€

  14. Slide 14: Balance Sheet Highlights

    Balance Sheet Highlights IAS 17 post IFRS16 BS at June 30, 2019 • At June 30, 2019 the Group’s net equity (euro/mln) 30.06.19 31.12.18 30.06.19 was 346,2 M€. Net operating working capital 338,8 10,4 339,8 • At the same date the Group had 91.0 M€ of Goodwill 91,0 90,6 91,0 goodwill resulting in a Net

  15. Slide 15: Working Capital Metrics

    Working Capital Metrics 70 Cash Conversion Cycle 40 34 35 60 32 32 31 30 • Cash conversion cycle sequentially 29 stable at 28 days: 28 28 27 28 30 Idays = 48 50 27 27 26 27 26 DSO = 38 25 DPO = (58) 40 Tot = 28 20 • Compared to Q2 2018 metrics Idays 30 decreased -4 days, DSO increased +3 57 56 57 58

  16. Slide 16: Return on Capital Employed

    Return on Capital Employed (euro/mln) TTM ended March 31 TTM ended June 30 TTM ended December 31 (1) TTM Net Operating Profit After Tax (NOPAT) 2018 2019 2018 2019 2017 2018 EBIT 37,3 41,9 37,3 42,5 36,7 41,0 (2) Income taxes on EBIT -9,5 -10,7 -9,5 -10,9 -9,4 -10,5 NOPAT 27,8 31,2 27,8 31,7 27,3 30

  17. Slide 17: Return on Capital Employed

    Return on Capital Employed 450.000 11,4% 12,0% 10,9% 11,0% 400.000 10,1% 9,4% 10,0% 350.000 8,8% 8,5% 9,0% 8,1% 8,3% Corporate Cost of capital 7,7% 300.000 7,6% 8,0% 7,2% 7,0% 6,7% 6,9% 7,0% 250.000 6,0% 200.000 5,0% 150.000 4,0% 3,0% 100.000 2,0% 50.000 1,0% 0 0,0% 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2

  18. Slide 18: Debt Structure

    Debt Structure • The parent company Esprinet S.p.A. signed on September 30, 2019 a new 3-year RCF-Revolving Credit Facility of up to 152.5 million euro with a pool of domestic and international banks. • The facility is unsecured and is subject to certain financial covenants that are common for this

  19. Slide 19: Total funding sources

    Total funding sources pro-forma (1) (euro/mln) 30.09.19 Syndicated RCF 152,5 • Participating banks within the pool are the following: Current portion of long-term financial debt 15,4 Long-term financial debt 56,0 Global Coordinator and Arranger: Banca T/R Securitisation program (2) 100,0 IMI S.p.A.,

  20. Slide 20: Term Loan Facilities

    Term Loan Facilities (euro/mln) 30.09.19 Oustanding Initial Short-term Long-term Lender Borrower Nominal Maturity amount portion portion amount Bank 1 Esprinet SpA 10,0 2,5 3,8 6,3 dec-21 • The majority of the term loans are Bank 2 Esprinet SpA 10,0 2,5 3,8 6,3 mar-22 not subject to any financial BP

  21. Slide 21: Share repurchase activity

    Share repurchase activity Timetable Share repurchases(1) • Number of shares repurchased: • Start: July 12, 2019 832,508 (1.59% of total) • End: March 31, 2020 • Amount repurchased: 2.537 M€ • Average price per share: 3.05 € • No. 1,150,000 own shares already in portfolio at Remainder of the program

  22. Slide 22: © esprinet

    © esprinet

  23. Slide 23: Thank you

    Thank you GRAZIE +» GRACIAS * DANKE + MERCI « 7A} « dita » iat © esprinet

  24. Slide 24: Annexes

    © esprinet

  25. Slide 25: Market trend

    Market trend Overall Market performance Esprinet Group performance Both the Italian and Spanish operations of the Group grew more than the Q1 2019 Q2 2019 H1 2019 market and achieved a market share growth of 1.5% and 1.2% Region vs. vs. vs. respectively in Italy and Spain. Q1 2018 Q2 2018 H1 2018 It

  26. Slide 26: Gross Profit Trend

    Gross Profit Trend PCs & Phones ICONA PCs and Smartphones collectively grew in terms of Gross Profit during both H1 and Q2 2019. Advanced Advanced Solutions Gross Profit % in Q2 2019 was substantially stable sequentially compared to Q1 ICONA 2019 and was down compared to Q2 2018 mostly on mix and pr

  27. Slide 27: Sales Breakdown: H1 2019 vs H1 2018

    Sales Breakdown: H1 2019 vs H1 2018 27

  28. Slide 28: Size Of Addressable End User Market

    Size Of Addressable End User Market EITO figures for IT Clients - Advanced Solutions & Smartphones - EUROMONITOR for other Consumer electronics End-user consumption converted to distri price assuming average 15% margin for resellers/retailers Conversion from Context panel sales to Total distri sales

  29. Slide 29: Weight Of Distris On Addressed Market

    Weight Of Distris On Addressed Market EITO figures for IT Clients - Advanced Solutions & Smartphones - EUROMONITOR for other Consumer electronics End-user consumption converted to distri price assuming average 15% margin for resellers/retailers Conversion from Context panel sales to Total distri sal

  30. Slide 30: Profit & Loss - IFRS 16 Reconciliation

    Profit & Loss - IFRS 16 Reconciliation Q2 2019 IFRS 16: P&L impact post IFRS 16 «as reported» • The adoption of IFRS 16, the (euro/mln) Q2 2019 adj. Q2 2019 new lease standard, determined an increase of EBIT of 1.0 M€ Sales 842,0 100,00% 842,0 100,00% and a more significant increase Cost of sales (8

  31. Slide 31: Profit & Loss

    Profit & Loss (euro/mln) Q2 2019 (1) Q2 2018 Var. % Q2 2019 • Reported net sales at 842.0 M€ Sales 842,0 100,00% 756,9 100,00% 11% increased +11% compared to the prior- Cost of sales (801,8) -93,22% (718,9) -94,98% 12% year Q2 (+85.1 M€). Gross Profit 40,3 4,78% 38,0 5,02% 6% • Gross profit up +6% a

  32. Slide 32: Profit & Loss - IFRS 16 Reconciliation

    Profit & Loss - IFRS 16 Reconciliation H1 2019 IFRS 16: P&L impact post IFRS 16 «as reported» (euro/mln) H1 2019 adj. H1 2019 Sales 1.717,5 100,00% 1.717,5 100,00% Cost of sales (1.636,4) -95,28% (1.636,4) -95,28% • The adoption of IFRS 16 Lease Gross Profit 81,1 4,72% - 81,1 4,72% determined an inc

  33. Slide 33: Cash Flow Generation

    Cash Flow Generation (euro/mln) H1 2019 H1 2018 • Cash flow generated from operations was 21.2 M€ (+59%). Cash flow generated from operations 21,2 13,3 • Dividend distribution during Q2 of Cash flow provided by (used in) changes in working capital (338,2) (152,4) 6.9 M€. Other cash flow provided by

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