Slide 1: FY2018 Results & Strategic Update
FY2018 Results & Strategic Update Milan, March 5t, 2019 amplifon
Slide 2: Disclaimer
Disclaimer The information contained herein and other material discussed during the conference call, particularly the ones regarding any possible or assumed future performance of the Amplifon Group, are or may be forward looking statements and in this respect they involve some risks and uncertaintie
Slide 3: Speakers on today's call
Speakers on today’s call Enrico Vita Gabriele Galli Alessandro Bonacina Lorenzo Fiorani Chief Executive Officer Chief Financial Officer Chief Marketing Officer General Manager, Spain 4) © Amplifon S.p.A. (uf 5th March 2019
Slide 4: Contents
Contents es | EY 2018 Results a= ||. Strategic Update Update on our key initiatives to reshape the hearing care retail around the customer Our plan in Spain: GAES integration 2020 ambitions: continuous delivery of strong growth & returns amplifon
Slide 5: 2018 Key milestones
2018 Key milestones Beyond financials, a very special year GAES, largest acquisition ever A new dimension for the Group = 29 countries, ~16,000 people, II% global market share Perfect fit with Amplifon's strategy Entry in the FTSE * Absolute leader in Spain, entry in LATAM MIB = Unique assets: brand
Slide 6: FY2018: a truly outstanding year
FY2018: a truly outstanding year Fourth year in a row of record results * Outpacing the global hearing care retail market (»2x market growth) * Leadership consolidation and market share gains in core markets = Positive market dynamics, growing ~5%! = Record revenues delivering double-digit top-line
Slide 7: FY 2018 Financial highlights
FY 2018 Financial highlights Another year of excellent top-line growth and profitability expansion FY 2018 FY 2017 A% Data in €m @'18 IFRS @'I7 IFRS @'I7 IFRS REVENUES 1,362.2 1,372.7 1,266.0 +8.4% Organic growth +7.0% Acquisitions +3.6% FX 2.2% EBITDA Rec. 233.9 241.3 217.5 +11.0% Margin % 17.2% 17
Slide 8: Continued delivery on our promises
Continued delivery on our promises Key financial targets SALES GROWTH in local currency EBITDA Margin recurring? CUMULATED OPERATING CASH FLOW 2020 Targets High-single digit CAGR' 2017-2020 ~18.5% in 2020 ~€600 million 2018 - 2020 FY2018 Actual +10.6% S 17.6% S €186 million S |. Compound Annual Grow
Slide 9: Q4 2018 Financial highlights
Q4 2018 Financial highlights An outstanding year-end: excellent organic growth and continued strong profitability expansion * Another quarter of strong double-digit top-line growth in LC Q4 2018 Q4 2017 A% —___ (+11.2%) Data in €m @'18 IFRS @'7 IFRS @'17 IFRS * Outstanding organic growth at +7.4% RE
Slide 10: Financial results by Region (EMEA)
Financial results by Region EMEA: outstanding execution delivering excellent profitable growth FY 2018 FY 2017 A% Data in €m @'18 IFRS @'I7 IFRS @'I7 IFRS REVENUES 952.3 960.4 855.6 +12.2% Organic growth +7.9% Acquisitions +4.8% FX -0.5% EBITDA Rec. 179.2 185.9 150.4 +23.6% Margin % 18.8% 19.4% 17.6
Slide 11: Financial results by Region (Americas)
Financial results by Region AMERICAS: strong performance & continued profitability improvement, progressively accelerating throughout the year FY 2018 FY201I7 A% * Solid performance in a structurally growing market (~+5%') Data in €m @'18 IFRS @'17 IFRS @'17 IFRS = Strong revenue growth at +7.0% in
Slide 12: Financial results by Region (APAC)
Financial results by Region APAC: solid sales performance in LC despite market softness in H2; profitability reflecting significant marketing investments and negative FX translative effect Performance above market reference FY 2018 FY 2017 A% — * Australian market growth at ~+2%, though softening to
Slide 13: Q4 2018 Financial results
Q4 2018 Financial results Delivering excellent results across the whole P&L Data iném Q4 2018 @'18 IFRS Q4 2018 @'17 IFRS Q4 2017 (unless specified) . 9 9 A% Rec. @'I7 IFRS Recurring Reported Recurring Reported Recurring Reported REVENUES 399.5 399.5 405.1 405.1 364.2 364.2 411.2% EBITDA! 83.4 80.9
Slide 14: FY 2018 Financial results
FY 2018 Financial results Sharp improvement in all profitability lines, leading to an increase of ~+20% in Net Profit recurring Data iném FY 2018 @'18 IFRS FY 2018 @'I7 IFRS FY 2017 (unless specified) . 9 9 A% Rec. @'17 IFRS Recurring Reported Recurring Reported Recurring Reported REVENUES 1,362.2 1
Slide 15: FY 2018 Financial results: cash flow
FY 2018 Financial results Strong cash flow generation supporting Capex and M&A to foster Company’s growth Data in €m FY 2018! FY 20177 A Operating cash flow (a) 186.5 168.6 17.8 Capex (net) (b) (76.l) (70.7) (5.5) Free cash flow (a+b) 10.3 98.0 12.3 Acquisitions (net) (c) (620.2) (IN.5) (508.7) Cash
Slide 16: Increase in Net Debt reflecting GAES acquisition
FY 2018 Financial results Increase in Net Debt reflecting GAES acquisition 31/12/2018 31/12/2017 Data in €m @’'18 IFRS @’'I7 IFRS Cash (89.9) (89.9) (124.1) Short-term debt 53.1 53.1 301.1 Medium/long-term debt 877.7 877.7 119.2 Net debt 840.9 840.9 296.3 Equity! 596.1 679.0 588.4 Net debt/EBITDA -
Slide 17: Contents
Contents |. FY2018 Results es ||. Strategic Update Update on our key initiatives to reshape the hearing care retail around the customer Our plan in Spain: GAES integration 2020 ambitions: continuous delivery of strong growth & returns amplifon
Slide 18: Strategic Pillars to 2020
Strategic Pillars to 2020 Re-affirming our strategic direction We will We will We will focus lead build V7 V4 V4 on core in Customer an effective & Markets Experience attractive innovation Organization Strategic pillars unchanged, growth potential further accelerated by GAES 4) © Amplifon S.p.A. (uf
Slide 19: 2020 key financial targets
2020 key financial targets Accelerating on our ambitions Data in € million 2018 2020! SALES 1,373 1800-1860 in local currency EBITDA 240 330-345 recurring? OPERATING - CASH FLOW “186 260 |. Excludes IFRS 15 & I6 impact 2. Main FX assumptions used for 2012-2020: €/USD at 118; €/AUD at 1.58 2020 targe
Slide 20: Contents
Contents |. FY2018 Results a= ||. Strategic Update Update on our key initiatives to reshape the Ts hearing care retail around the customer Our plan in Spain: GAES integration 2020 ambitions: continuous delivery of strong growth & returns amplifon
Slide 21: Reshaping the hearing care retail around the customer
Reshaping the hearing care retail around the customer Accelerating on our pillars to deliver our growth ambitions BRAND CUSTOMER DATA \Z \7 \7 Effective branding Long lasting Superior customer & advertising customer loyalty ‘Top of mind’ brand Offer personalized Leverage unmatched in all key markets
Slide 22: Amplifon "Top of mind" brand to increase penetration & share
Amplifon “Top of mind” brand to increase penetration & share Increasing media investment, with improved effectiveness & efficiency thanks to global scale & unique capabilities 2018 Achievements a Effective media = Increased investments in media ce * Effectiveness and efficiencies leveraging scale-up
Slide 23: Amplifon "Top of mind" brand to increase penetration & share
Amplifon “Top of mind” brand to increase penetration & share Enlarging the footprint of the strongest global brand in retail hearing care Hl Ampiifon on Amplifon brand’ HB local brands Global brand expansion Awareness leadership via effective investment Consideration leadership via innovative points
Slide 24: Unique personalized relationship with customers through data & technology
Unique personalized relationship with customers through data & technology New customer lifecycle reducing repurchase cycle and increasing organic growth 9 Unique lifecycle © management =) Advanced ae statistical modeling ce Global customer operations 4) © Amplifon S.p.A. (uf 5th March 2019 2018 Achi
Slide 25: Leveraging big data to provide a distinctive customer experience
Leveraging big data to provide a distinctive customer experience The biggest database in hearing care industry supported by top-notch technology Big data collection Ee) Best-in-class infrastructure & capabilities Big data usage 4) © Amplifon S.p.A. (uf 5th March 2019 2018 Achievements = Unmatched da
Slide 26: Successful launch of Amplifon Product Experience in Italy
Successful launch of Amplifon Product Experience in Italy Exciting response from customers and hearing care professionals The launch in a nutshell Launch of the Amplifon product line & ecosystem last May Outstanding response from customers and HCP Continuous features release of Amplifon APP Multicha
Slide 27: Accelerating APE global roll-out: countries in 2019
Accelerating APE global roll-out: 5 countries in 2019 Targeting a customer base of more than one million branded units by 202I Strategic objectives Further strengthen brand awareness Differentiate from competition through a unique value proposition Deepen long-term customer relationship via the inno
Slide 28: Amplifon multichannel ecosystem: keep on innovating
Amplifon multichannel ecosystem: keep on innovating The Multichannel Ecosystem Pillars Engage the client & hearing care professionals @) Create seamless experience (@) Personalize the service 4) © Amplifon S.p.A. “af 5th March 2019 27
Slide 29: Launch of Amplifon Remote Care & Ecosystem Control Center
Launch of Amplifon Remote Care & Ecosystem Control Center Two distinctive innovations for customers & HCP to enhance experience, usage & repurchase Remote care Ecosystem control center Enhance customers life, providing services via: Provide hearing care professionals with a single tool to: = Chat bo
Slide 30: Amplifon 2020: fast forward in the age of the customer
Amplifon 2020: fast forward in the age of the customer y"' = f | & g “Top of mind” Long lasting Own & leverage global brand customer loyalty big data Industry innovation leader Solid and proven plans to deliver our 2020 ambitions Successful step-change in innovation and R&D to support the next wave
Slide 31: Contents
Contents |. FY2018 Results a= ||. Strategic Update Update on our key initiatives to reshape the hearing care retail around the customer es OU lan in Spain: GAES integration 2020 ambitions: continuous delivery of strong growth & returns amplifon
Slide 32: Our vision in Spain
Our vision in Spain Creating the undisputed leader in the highly attractive Spanish market GAES — “Over 65 years of leadership leveraging unique assets: brand, network and reputation" amplifon "The fastest growing player in Spain, leveraging Group's scale, best-practices and distinctive competences”
Slide 33: Spain: an attractive and high-potential market
Spain: an attractive and high-potential market Italy vs. Spain: market data Market size 2018, Penetration, ASP, Media cost, “O00 units % Rebased |0O Rebased!0O Opportunity to create another superb Amplifon stronghold | Cost per Gross Rating Point 4) © Amplifon S.p.A. “af 5th March 2019 32
Slide 34: GAES unique assets
GAES unique assets The hardest to build Employees ~1,300 people in Spain! of which ~930 HCP Highly trained & motivated team with strong customer orientation Reputation with ENTs «One-stop shop» for hearing solutions Wholesale distribution of hearing aids, implants & medical devices GAES Research & S
Slide 35: GAES & Amplifon together in Spain
GAES & Amplifon together in Spain Absolute leadership in a highly promising market #I player ~6x larger than #2 96% Brand awareness 700+ PoS Largest footprint ~1,810 people ~,160 hearing care professionals Tremendous opportunity leveraging GAES unique assets & Amplifon Group’s best practices 4 © Amp
Slide 36: GAES integration: Key value creation levers
GAES integration: Key value creation levers One Brand, One Organization, One Network, One Customer Experience = Early and thorough integration planning, supported by rigorous execution and continuous monitoring " Dedicated integration team accountable for project management, delivery of synergies, i
Slide 37: Contents
Contents |. FY2018 Results Il. Strategic Update Update on our key initiatives to reshape the hearing care retail around the customer Our plan in Spain: GAES integration 2020 ambitions: continuous delivery of strong es growth & returns amplifon
Slide 38: 2020 key financial targets
2020 key financial targets Accelerating on our ambitions Data in € million SALES in local currency EBITDA recurring? OPERATING CASH FLOW 4) © Amplifon S.p.A. (uf 5th March 2019 2020! 1,800-1,860 330-345 ~260 IFRS {5 application 2020! withiersis ~(I5) 1,785-1,845 -(10) 320-335 ~260 |. Excludes IFRS 1
Slide 39: 2020 Sales growth target
2020 Sales growth target Steady organic growth, piecemeal M&A and GAES contribution to boost top-line Sales!, € million GAES mid single- digit CAGR 1,785-1,845 High single- 2018 Amplifon base business GAES contribution 2020 growth |. Sales at constant exchange rates, all data with application of IFR
Slide 40: 2021 Synergies target increased
2021 Synergies target increased Synergies further expanding to €20-25 million run-rate per year by 202I Synergies', € million 2019 2020 2021 One-off costs, € million ~(5) 2019 2020 2021 |. Synergies at EBITDA level 4) © Amplifon S.p.A. “af 5th March 2019 39
Slide 41: Continued steady EPS growth, despite accounting impact coming from PPA
Continued steady EPS growth, despite accounting impact coming from PPA Purchase Price Allocation (PPA) for GAES acquisition = The provisional allocation of the purchase price will arise indicative ~€15 million yearly D&A for GAES mainly related to customer file & brand value = The final analysis of
Slide 42: Strong cash flow generation sustains clear deleverage path
Strong cash flow generation sustains clear deleverage path also after Capex & piecemeal M&A Operating Cash Flow High Cash Flow Conversion! = >80% in 2018 Improvement of NWC via ad-hoc initiatives ~€480 million Cumulated 2019 & 2020 Capex Network expansion and upgrade (including GAES rebranding and r
Slide 43: Changes in IFRS — IFRS 16 in a snapshot
Changes in IFRS — IFRS [6 in a snapshot IFRS 16! - Main Changes IFRS 16 establishes that operating leases >12 months (if fall under IFRS I6 definition) should be recognized on Balance Sheet Main changes: = Recognition on Balance Sheet of Assets (Right of Use) and Liabilities arising from a lease = R
Slide 44: A long way to grow
A long way to grow Unique growth opportunities ahead, further accelerated by 2018 key milestones Successful track record of strong profitable growth rg GAES unique opportunity to boost growth and profitability tal (fX2] Continuous focus on innovation in the customer experience a eye ° . [ut Ambitiou
Slide 45: Investor Relations Contacts
Investor Relations Contacts FRANCESCA RAMBAUDI AMANDA HART GIRALDI PAOLA BEZZI OLGA LEPECHKINA Director Specialist Junior specialist Assistant Tel: +39 02 5747 2261 Tel: +39 02 5747 2317 Tel: +39 02 5747 2310 Tel: +39 02 5747 2542 francesca.rambaudi@amplifon.com amanda.giraldi@amplifon.com paola.bez