Slide 1: 2020 Q1 Results Conference Call
2020 Q1 RESULTS CONFERENCE CALL May 13th, 2020
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
Slide 3: Today Speakers
Today Speakers ALESSANDRO CATTANI VALERIO CASARI Chief Executive Officer Chief Financial Officer 3
Slide 4: Esprinet Investment Case
Esprinet Investment Case Market leader (>25% mkt share) in the strategic IT supply chain for Italy and Spain SOLID FOUNDATION 2020 CHALLENGE MID TERM STRATEGIC PILLARS Facing Full business Covid-19 continuity effects throughout the Q1 2020 lockdown period • Focus on Customer Satisfaction • Sales: +4
Slide 5: Solid Foundation
© esprinet Solid Foundation
Slide 6: Sales evolution
Sales evolution Q1 2020: 914 M€ (+4% vs 875 M€ in Q1 2019) 596 M€ Italy 3% 492 M€ IT Clients -1% 522 M€ IT Reseller 5% 298 M€ Spain 6% 294 M€ Consumer Electronics 21% 384 M€ Retailer/E-tailer 6% 20 M€ Other 25% 127 M€ Advanced Solutions -7% FY 2019: 3,945 M€ (+10% vs 3,571 M€ in FY 2018) MKT MKT MKT
Slide 7: Q1 2020 results
Q1 2020 results 14th consecutive quarter of y-o-y sales growth Strong EBIT performance (+24%) M€ Q1 2020 Q1 2019 FY 2019 FY 2018 Sales 913.8 875.5 3,945.4 3,571.2 EBIT 8.3 (0.91%) 6.7 (0.77%) 41.1 (1.06%) 23.7 (0.66%) 6th consecutive quarter of ROCE sequentially above corporate WACC M€ 31/03/20 31/0
Slide 8: Historical stable flow of profitability since 2001 even in market downturns
Historical stable flow of profitability since 2001 even in market downturns Strong Investor focus and financial discipline to enable a 25% pay-out dividend policy 440 M€ of cumulated Net Profit since 2001 / 108 M€ of cumulated Dividends paid 5,0 3,95 4,0 3,57 3,04 3,22 2,69 3,0 2,23 2,43 2,37 2,29 2
Slide 9: ROCE above WACC since Q4 2018; WC cash cycle best ever
ROCE above WACC since Q4 2018 WC cash cycle: 20 days, best performance ever 2,0% 11,4% 10,9% 1,0% 10,1% 9,8% 0,0% 9,4% 8,8% 8,7% 9,0% 8,5% 8,4% 8,4% 8,1% 8,0% 7,7% 7,6% 7,2% WACC 7,0% 6,9% 8% 7,0% 6,7% 36 ROCE 6,0% 34 16Q1 16Q2 16Q3 16Q4 17Q1 17Q2 17Q3 17Q4 18Q1 18Q2 18Q3 18Q4 19Q1 19Q2 19Q3 19Q4 20
Slide 10: 2020 Challenge
2020 Challenge Facing Covid-19 effects
Slide 11: Containing Covid-19 impact
Containing Covid-19 impact A series of actions were planned and #1 activated since late March Technological and operational controls developed over time to deal with different emergency situations ✓ to furtherly control costs from the second quarter onwards, whilst ✓ Full business continuity through
Slide 12: Q 2017-20: Sales & Net Financial Debt (Cash)
Q 2017-20 : Sales & Net Financial Debt (Cash) Seasonality of business entails sales concentration in Q4 Q4 end-period WC and NFP tipically stand at the lowest level of the year 1.400 1.341 1.261 1.092 875 914 894 900 842 742 781 757 772 691 691 400 247 137 127 143 183 142 184 117 121 25 (100) (123)
Slide 13: Current trading conditions
Current trading conditions ✓ The escalation of the pandemic and the progression of restrictions on mobility and industrial activities caused a general shock on demand ✓ Trading started to be impacted by Covid emergence from late March, initially in Italy and then in Spain and Portugal ✓ Sales in Apr
Slide 14: Market trend in April 2020
Market trend in April 2020 TOTAL MARKET TREND MARKET TREND BY CLIENT IT RESELLER RETAILER / E-TAILER 1.200 1.115 800 450 425 690 959 700 400 1.000 631 350 328 600 800 300 500 250 600 400 -14% -8% 200 -23% 300 400 150 200 100 200 100 50 0 0 0 April 2019 April 2020 April 2019 April 2020 April 2019 Apr
Slide 15: Strategy
Strategy 15
Slide 16: Mid-term Strategic Pillars
Mid-term Strategic Pillars Consolidating leadership in Customer Satisfaction Increase Profitability Address new markets the Iberian Region Providing the best Customer Achieving size in Portugal both Pushing for a higher weight of White Goods oppurtunity as far Satisfaction: sharply improving through
Slide 17: XaaS & Cloud Strategy
XaaS & Cloud Strategy ✓ The Cloud market is quickly becoming one of the hottest growth opportunity in the Advanced Solutions market segment. ✓ The pressure on delivering Smartworking solutions is impacting not only the IT Client space, with a surge in notebooks and tablets demand, but the IT infrast
Slide 18: Financials
Financials
Slide 19: 2020 Q1 Results
2020 Q1 Results ✓ Strong quarterly results still non affected by Covid-19 outbreak and sustained by operational continuity throughout all geographies thanks to business continuity and contingency plan put in place since the very beginning. ✓ Sales up +4% mainly due to positive performance in Spain (
Slide 20: Q1 2020 Financial Highlights
Q1 2020 Financial Highlights ✓ Net Invested Capital at 31st March 2020 stands at 489.0 M€ and is covered by: - Shareholders’ equity, including non-controlling interests, for 361.8 M€ (359.0 M€ at 31st December 2019) - Net financial debt for 127.1 M€ (compared with a cash positive position of 272.3 M
Slide 21: Working Capital Metrics
Working Capital Metrics ✓ Best quarter in last 3 years ✓ Continuous reduction in cash cycle days mainly due to strong performance in inventory turnover and suppliers’ payment terms ✓ At March 31st 2020 working capital days stands at 20 days improving both sequentially (-4) and year-on- year (-7) ✓ C
Slide 22: ROCE evolution up to Q1 2020
ROCE evolution up to Q1 2020 450.000 12,0% 11.3% Seasonal spike in Q4 10.9% 400.000 10.0% 11,0% 9.8% 8.5% 9.4% 8.7% 10,0% 350.000 Relevant y-o-y 8.4% 8.4% 9,0% improvement mainly due 8.7% 7.7% 7.6% to capital employed 300.000 7.2% 8.1% 8,0% 7.0% discipline 7,0% 250.000 6.7% 6.8% 6,0% 200.000 5,0% 15
Slide 23: ROCE-Return on Capital Employed
ROCE-Return on Capital Employed ✓ On March 31st, 2020 TTM EBIT down -3% and Net Average Invested Capital improved -9% driving a ROCE of 8.7% (8.1% in Q1 2019) ✓ ROCE steadily above company WACC-Weighted Average Cost of Capital of 8%. NOTES (1) Trailing Twelve Months is abbreviated as TTM. (2) Net of
Slide 24: Final Remarks
Final Remarks 24
Slide 25: Final remarks
Final remarks ✓ Due to persistent lack of visibility on the lenght and depth of the emergency, it is not still possible to reasonably assess any short-term impact of Covid-19 crisis. ✓ Trading conditions started to be difficult from April: Q2 presumably is shaping-up as the toughest quarter of the y
Slide 26: Q&A
© esprinet Q&A
Slide 27: IR Team
IR Team ESPRINET S.p.A. T +39 02 40496.1 - investor@esprinet.com IR Top Consulting IR Advisor T +39 02 45473884 Maria Antonietta Pireddu - m.pireddu@irtop.com Federico Nasta - f.nasta@irtop.com