Slide 1: Q3 2021 Results and 2022-2024 Strategic Plan
© esprinet’ enabling your tech experience Q3 2021 Results and 2022-2024 Strategic Plan November 11, 2021
Slide 2: Forward-looking statements
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 about future events, futu
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Slide 4: Q3 2021 Results
esprinet’ enabling your tech experience Q3 2021 RESULTS
Slide 5: The ROCE Driven Strategy keeps inspiring operational and financial management
The ROCE Driven Strategy keeps inspiring the operational and financial management • 9M 2021 P&L performance still growing compared to last year, • Cash Cycle at 13 days, +5 days compared to Q3 20 (+4 days despite a slowdown in the third quarter: compared to Q2 21) I. Sales up +9% yoy to 3,211 M€ • N
Slide 6: 9M 2021 sales by geography and product
Esprinet Market(*) Esprinet Market(*) Esprinet Market(*) Retailers & 1,983 M€ Italy 7% 8% 1,719 M€ IT Clients 5% 9% 1,413 M€ -3% 13% E-tailers Consumer 1,126 M€ Spain 7% 10% 1,024 M€ Electronics 2% 14% 1,931 M€ IT Resellers 24% 7% 70 M€ Portugal 80% 12% Advanced 60% 5% 601 M€ Solutions 32 M€ Other (
Slide 7: Q3 2021 sales by geography and product
Esprinet Market(*) Esprinet Market(*) Esprinet Market(*) Retailers & 583 M€ Italy -12% -6% 498 M€ IT Clients -21% -11% 467 M€ -25% -8% E-tailers Consumer 350 M€ Spain -21% -4% 332 M€ -19% -3% 556 M€ IT Resellers 5% -1% Electronics 30 M€ Portugal 85% 6% Advanced 66% 4% 193 M€ Solutions 11 M€ Other (+
Slide 8: 9M 2021 P&L and net invested capital
(M/€) 30/09/2021 30/09/2020 Var. % (M/€) 30/09/2021 30/09/2020 30/06/2021 Sales from contracts with customers 3,210.8 2,959.1 9% Fixed Assets 140.6 118.3 139.3 Gross Profit 165.8 128.7 29% Operating Net Working Capital 344.3 206.6 232.2 Gross Profit % 5.16% 4.35% Other current asset (liabilities) 3.
Slide 9: Working capital metrics: 4-quarter average
80 40 70 34 35 32 32 31 30 29 60 28 28 27 28 30 27 27 26 27 26 26 50 23 25 20 40 20 69 70 68 70 66 66 62 62 12 30 57 56 57 58 58 59 13 15 52 53 52 52 52 53 51 55 54 55 52 50 50 51 49 48 46 46 48 48 47 47 44 44 43 45 45 44 20 43 42 3937 9 4039 10 35 36 37 38 38 36 35 35 35 35 37 38 37 38 38 37 8 36 8
Slide 10: Working capital metrics quarter-end
Working Capital Metrics quarter-end 90 50 43 44 80 42 40 39 40 39 40 37 70 36 33 33 32 32 31 30 29 29 60 25 20 50 15 16 85 14 40 77 10 68 70 6 6 65 66 30 60 60 61 59 60 61 54 56 55 57 54 55 57 54 52 56 58 55 2 0 51 52 52 52 52 51 52 50 51 51 0 49 48 50 48 47 48 49 -2 43 48 45 44 45 45 20 40 41 40 40
Slide 11: ROCE evolution
30.0% 25.0% 25.1% 23.2% 20.0% 19.7% 17.6% 15.7% 15.8% 15.0% 16.2% 14.0% 11.4% 10.9% 13.1% 11.3% 10.9% 10.0% 10.0% 9.8% 9.4% 8.1% 8.4% 8.7% 8.5% 8.2% 8.3% 8.6% 8.6% 7.7% 7.2% 7.6% 8.0% 6.7% 7.0% 7.1% 7.9% 7.6% 7.1% 5.0% 0.0% 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q1 2018
Slide 12: Outlook
@ esprinet’ enabling your tech experience
Slide 13: Orders above budget in October and early November
❑ In October and early November, the Group recorded orders from customers significantly above budget and 2020 levels ❑ We continue to face serious difficulties in goods supply, especially on some "consumer" product categories such as low-end PCs or smartphones ❑ The levels of Gross Profit Margins re
Slide 14: The New Journey to Value
esprinet’ enabling your tech experience THE NEW JOURNEY TO VALUE
Slide 15: Growth and innovation through a sustainable and integrated approach
GROWTH AND INNOVATION DELIVERED THROUGH A SUSTAINABLE AND INTEGRATED APPROACH TO BUSINESS ETHICAL MOTIVATION BUSINESS OPPORTUNITY INCENTIVE FOR ACCESS TO REDUCTION OF INNOVATION A NEW FINANCE RISK PROFILE ESG purposes are consistent There are strong market with the value system of the opportunities
Slide 16: Structural change of the business model
AFTER 20 YEARS FROM THE BIRTH OF ESPRINET, THE GROUP LAUNCHES A STRUCTURAL CHANGE OF THE BUSINESS MODEL WITH THE AIM IN THE NEXT DECADE OF ADDING TO THE DISTRIBUTION BUSINESS A NEW «FULL SERVICE PROVIDER» MODEL WITH SIGNIFICANTLY HIGHER ADDED VALUE THAN THE TRADITIONAL ONE 16
Slide 17: Capital employed optimization and focus on profitability
BEING CAPITAL EMPLOYED OPTIMIZATION A PREREQUISITE, THE FOCUS IS ON PROFITABILITY IMPROVEMENT • Customer satisfaction: more differentiation and margins • Leveraging a global cross-industry macro trend • Product mix: focus on Advanced Solutions and own brands • Getting a bigger portion of the value i
Slide 18: A business model revolution into a higher margin space
• A business model revolution moving into a much higher margin space paving the way, giving the intrinsic structure of the rental program, to CAGR 15% future massive profitability improvements • Target 2024: increase by roughly 50% our Adj. EBITDA to more than 125 M€ (CAGR 15%) • Capital employed op
Slide 19: The Backdrop
esprinet’ enabling your tech experience THE BACKDROP
Slide 20: A favorable moment that should not be wasted
THE COVID-19 OUTBREAK IS AFFECTING AND CHANGING THE DAILY LIVES OF MILLIONS OF PEOPLE AND THE WORLD'S ECONOMIES A SCENARIO WITH A RICH VARIETY OF OPPORTUNITIES OPENS UP FOR THE ICT SECTOR MACROECONOMIC FORECAST ICT INDUSTRY NEXTGenEU, RECOVERY AND AND FOR THE DISTRIBUTOR? RESILIENCE PLANS The improv
Slide 21: Improving health situation setting global economies back in motion
THE IMPROVING HEALTH SITUATION IS SETTING THE GLOBAL ECONOMIES BACK IN MOTION. THE NEAR-TERM OUTLOOK FOR THE EUROPEAN ECONOMY LOOKS BRIGHTER THAN ANYTIME IN THE LAST DECADE(*) Short term headwinds in the supply chain and inflation could affect the economy. Nevertheless, we will soon find ourselves i
Slide 22: Pandemic brought ICT to the forefront
THE PANDEMIC HAS BROUGHT ICT TO THE FOREFRONT AS A CRITICAL ENABLER OF EVERYDAY LIFE AND BUSINESS CONTINUITY. DIGITAL WORKFLOWS, ROBOTS, AUTOMATION ARE NO LONGER GOALS, THEY ARE REQUIREMENTS We are already witnessing the acceleration of digital processes, so years of innovation have been reduced to
Slide 23: Golden opportunity for digital transformation investments
A GOLDEN OPPORTUNITY FOR INVESTMENTS IN DIGITAL TRANSFORMATION: THE IMPLEMENTATION OF THE RECOVERY AND RESILIENCE PLANS IS SET TO BE ONE OF THE LEADING GROWTH DRIVERS IN THE ICT SECTOR The Recovery measures will bring a further and robust stimulus to the European economies. An additional boost to th
Slide 24: Technology wholesaling is the fastest growing go-to-market strategy
Technology wholesaling continues to be the The complexity and acceleration of the The role of distributors in buffering stock will fastest growing go-to-market strategy for tech multicloud solutions adoption means above be increasingly central and crucial as clearly manufacturers looking to increase
Slide 25: Subscription Economy and Green Transition macrotrends
Riding on two global and cross-industry macrotrends: Subscription Economy & Green Transition The Subscription Economy addresses the macro theme of consumption against ownership, converting CAPEX into OPEX The Green Transition advocates for recycling and reuse of end-of-life products, which can be en
Slide 26: Operating in three EU states with highest GDP growth expectations
While paying particular attention to short-term headwinds in the supply chain, we operate in the three EU Member States with the highest growth expectations of GDP in the coming years We operate in the three EU Member States with the lowest ratio of ICT spending on GDP. Digitalization is now a prere
Slide 27: Esprinet 2024
@ esprinet’ enabling your tech experience ESPRINET 2024
Slide 28: Adj. EBITDA evolution: distribution rationale and KPI
RATIONALE KPI Seize all opportunities in the market and accelerate the evolution of the operating model to value-add Adj. EBITDA evolution distribution CAGR 13% 120 M€ 83 M€ Investments in high margin Improve technology platform, South EU Countries with Provide new information and Superior customer
Slide 29: Sales evolution by geography and product
KPI Sales evolution Geographies CAGR 7% 5.6 B€ 2.8 B€ | 3.3 B€ 1.7 B€ | 2.2 B€ 100 M€ | 144 M€ 4.6 B€ Products IT CLIENTS CONSUMER ELECTRONICS ADVANCED SOLUTIONS 2.4 B€ | 2.7 B€ 1.5 B€ | 1.9 B€ 0.7 B€ | 1.0 B€ Customer satisfaction program: our guiding light, technical and commercial service quality
Slide 30: Renting model rationale and transacted volumes
RATIONALE KPI Our visionary journey, a structural repositioning to grab a further piece of the value embedded in the Transacted volumes overall tech value chain with significantly higher long term earnings profile 200 M€ A new operating leasing The boundaries of A strong ESG-driven initiative: model
Slide 31: Operating lease model: reseller, Esprinet, financial entity
KPI Operating lease agreement signed by Esprinet with the end user, procured by the reseller, and subsequently sold to a financial entity Adj. EBITDA evolution End user private companies (excluding Government entities and consumers) through IT Resellers, VARs and System Integrators IT Clients, Advan
Slide 32: Conclusions
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Slide 33: Plan summary: migration to value-add and entering renting
Historically favourable environment providing significant Next 3-years targets still heavily reliant on distribution: room for organic growth EBITDA Adj. 120 M€ on 125 M€ of total plan ESG focus providing a push for innovation and green Since 2025 kick-in of full value of renting model with massive
Slide 34: Q&A Session
esprinet’ enabling your tech experience Q&A SESSION
Slide 35: Thank you
Thank you GRAZIE + GRACIAS - OBRIGADO« DANKE « MERCI « ZA} « iff! « RR © esprinet’ enabling your tech experience
Slide 36: Appendix
@ esprinet’ enabling your tech experience
Slide 37: The Company & the Industry
@ esprinet’ enabling your tech experience THE COMPANY & THE INDUSTRY
Slide 38: 20+ years in business, 3 geographies: Italy, Spain & Portugal
+20 years in business, A real enabler of the use Strong SMB and Working to provide The most complete 3 geographies: of technology for a mid-market focus the best customer Tech product range Italy, Spain & Portugal sustainable digital society 31k customers satisfaction with 650 brands MTA listed 2020
Slide 39: Company sales and share 2020
SALES 2020 COMPANY SHARE (M/€) Pro-forma Esprinet & GTI (*) 4,658 26.6% • • • Tech Data 3,036 17.3% • • • Ingram Micro 2,346 13.4% • • • Computer Gross 1,559 8.9% • Arrow ECS 942 5.4% • • Attiva 520 3.0% • MCR 520 3.0% • Datamatic 430 2.5% • CPCDI 320 1.8% • Depau 214 1.2% • Brevi 205 1.2% • Inforpo
Slide 40: Total market and distributor weight by channel
Total Market (A+B)(*) 8.4 5.5 15.9 29.8 10.8 40.6 A) Direct Channel & 1st Tier 0.2 1.9 11.0 13.1 10.0 23.1 B) 2nd Tier Distris (a+b+c) 8.2 3.6 4.9 16.7 0.8 17.5 2020 Weight Of Distris 98% 65% 31% 56% 8% 43% On Market(°) 2019 Weight Of Distris On Market 95% 67% 25% 50% 5% 37% a) Professional Reseller
Slide 41: ICT distributor share of end-user market
20.0 70.0% 18.0 60.1% 60.0% 16.0 56.0% 14.0 49.8% 50.0% 47.9% 45.0% 12.0 40.0% 10.0 30.0% 8.0 6.0 20.0% 4.0 10.0% 2.0 0.0 0.0% 2017A 2018A 2019A 2020A 2021E Direct sales of ICT products (ex-white goods) ICT distributor sales Share in ICT products (ex-white goods) EITO figures for IT Clients - Advanc
Slide 42: Value of distribution for vendors and resellers
ICT Distribution share on total ICT addressable sales grew from 40.0% (2016) to 56.0% (2020) and is forecasted to grow furthermore (60.1% expected in 2021). • Reduction of distribution fixed cost • Buffering stock • Credit lines & Credit collection capabilities • Marketing capability • Need of an ag
Slide 43: Price protection, credit insurance and vendor programs
Provided by the vast majority of Vendors in which they Large and medium sized distributors routinely apply contracts assume the risk of inventory devaluation arising from with top-rated Credit Insurance Companies shielding the risk Vendors routinely operate with commercial programs that purchase lis
Slide 44: Margin, working capital and cost to serve by segment
Gross Profit Margin Low Mid Mid-High Mid-High High Low Mid-High Mid-High Mid Working Capital Low Mid Mid Mid Low Low Mid Mid Mid Cost to Serve Low Mid Mid Mid High Low Mid Mid Mid IFRS15 and other adjustment (75) M€ 44
Slide 45: Corporate Identity
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Slide 46: Vision
Vision @ esprinet’ enabling your tech experience MAKE LIFE EASIER We believe that technology enriches FOR PEOPLE AND everyone's everyday life, which is why we strive to expand and facilitate its distribution FOR ORGANISATIONS — anduse. 46
Slide 47: Mission
Mission BE THE KEY POINT OF CONTACT BETWEEN MANUFACTURERS, RESELLERS AND TECHNOLOGY USERS We want to create value for these key stakeholders, for shareholders and for those who work with us through a strategy of constant, shared growth: based on an innovative.distribution model.
Slide 48: Our Values
Our Values re) esprinet’ enabling your tech experience BE INCLUSIVE BE EMPOWERED CLUS EINAEIING cue OUER CREATIVITY RESPONSIBILITY YOUR TECH SE NESBANERE BE SURPRISING BEreRSING EXPERIENCE BRAVERY QUEST FOR oe BE DARING EXCELLENCE RELIABILITY BE ACCOUNTABLE TEAMWORK BE TOGETHER 48
Slide 49: Founders and management biographies
Maurizio Rota, was born in Alessandro Cattani, was Milan on 22 December 1957. born in Milan on 15 After early professional August 1963. After experience as Sales Supervisor completing his degree in for companies operating in the electronic engineering at Information Technology field, he Politecnico
Slide 50: Board of Directors and committees
INDIPENDENT REMUNERATION COMPETITIVENESS CONTROL AND RISK RELATED PARTY NAME POSITION EXECUTIVE INDEPENDENT AND NOMINATION AND SUSTAINABILITY COMM. TRANSACTIONS COMM. COMM. (*) COMM. Maurizio Rota Chairman Marco Monti Deputy Chairman Alessandro Cattani CEO • • 4 Men Angelo Miglietta Director • • • •
Slide 51: Code of Ethics and Organisation Model
The Code of Ethics applies to all The Esprinet Group wishes to This document, entitled “Organisation and Management Model activities carried out by or in the establish trade relations with its pursuant to “Legislative Decree 231/2001” (hereinafter called “the name and on the behalf of Esprinet vendo
Slide 52: STAR segment listing requirements
• High transparency, disclosure requirements and liquidity (free float of minimum 35%) Esprinet Spa listed in the STAR • Corporate Governance in line with international standards Segment* voluntarily adhere to and comply with strict requirements *The market segment of Borsa Italiana’s equity market
Slide 53: Shareholders and analyst coverage
DECLARANT & DIRECT SHAREHOLDER % ON ORDINARY CAPITAL % ON VOTING CAPITAL ANALYST Francesco Monti 16.16% 16.16% COVERAGE Giuseppe Calì 11.26% 11.26% Axopa S.r.l. (Maurizio Rota and Alessandro Cattani) 9.79% 9.79% JP Morgan 4.62% 4.62% Own shares 3.00% 3.00% Free float 55.17% 55.17% Italian Stock Exch
Slide 54: Corporate overview: sustainability and social performance
Presence of the CORPORATE OVERVIEW 4.5 bn euros of revenues N°1 First distributor in A new Corporate Competitiveness and Sustainability Italy, Spain & Portugal Identity Committee (+14% vs 2019) Integrated management system ENVIRONMENTAL Certified inventory of Commitment to Quality, Environment, LEED
Slide 55: Thank you
Thank you GRAZIE + GRACIAS - OBRIGADO« DANKE « MERCI « ZA} « iff! « RR © esprinet’ enabling your tech experience