Slide 1: H1 2020 Results Presentation
H1 2020 Results Presentation September 9th, 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: Investment Opportunity
Investment Opportunity THE RIGHT INDUSTRY THE RIGHT COMPANY GROWTH • Tech sector is booming thanks to constant innovation and changes in lifestyle and professional habits (smart working, e-learning, e-commerce, …) • Undisputed market leader (25% market share in 2019) with a track record of acquisiti
Slide 4: 2020 Key Facts
2020 Key Facts Market leader in the strategic IT supply chain for Italy and Spain STRONG FINANCIAL PERFORMANCE A «BUSINESS DEVELOPMENT» DEAL H1 2020 Sales of ~1,834,7 M€ (+7% yoy), with a strong growth in Strong boost in Cloud and "As A Service" solutions: binding agreement demand for PCs and Smartp
Slide 5: H1 2020 Financial Highlights
H1 2020 Financial Highlights (M/€) 30/06/2020 30/06/2019 (M/€) 30/06/2020 31/12/2019 Sales from contracts with customers 1.834,7 1.717,5 Fixed Assets 117,6 118,7 Gross Profit 82,8 81,4 RoU Assets 102,7 107,3 Gross Profit % 4,51% 4,74% Operating Net Working Capital 61,5 (121,0) EBITDA adj. 24,0 20,6
Slide 6: 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 1.092 875 914 920 894 900 842 742 781 757 772 691 691 400 247 137 127 143 183 142 184 117 121 25 (100) (11
Slide 7: Sales Evolution
Sales Evolution H1 2020: 1,835 M€ (+7% vs 1,717 M€ in H1 2019) MKT MKT MKT 1,184 M€ Italy 6% 8% 1,013 M€ IT Clients 5% 6% 1,030 M€ IT Reseller 6% 5% 614 M€ Spain 10% 3% 592 M€ Consumer Electronics 15% 7% 835 M€ Retailer/E-tailer 7% 7% 37 M€ Other -19% 260 M€ Advanced Solutions -6% 5% FY 2019: 3,945
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: Working Capital Metrics
Working Capital Metrics 80 40 • Best quarter in last 3 years. 70 34 35 • Continuous reduction in cash cycle 32 32 31 30 days mainly due to strong 29 performance in inventory turnover 60 28 28 27 28 30 27 27 26 27 and suppliers’ payment terms. 26 26 50 23 25 • At June 30th 2020 working capital days s
Slide 10: ROCE Evolution Up To Q1 2020
ROCE Evolution Up To Q1 2020 Seasonal spike in Q4 450.000 11,3% 11,4% 12,0% 10,9% 11,0% 400.000 10,0% 9,8% 9,4% 10,0% 8,7% Relevant y-o-y 350.000 8,5% 8,6% 8,1% 8,4% 8,2% 9,0% improvement mainly due 300.000 7,7% 7,6% 8,0% to capital employed 7,2% 7,1% 6,7% 7,0% 7,0% discipline 250.000 6,0% 200.000 T
Slide 11: 2020 Outlook and Final Remarks
2020 OUTLOOK AND FINAL REMARKS 11
Slide 12: 2020 Outlook and Final Remarks
2020 Outlook and Final Remarks ❑ The 2 months July-August shows a +32% revenue growth ❑ The month of July recorded a 14.7% growth in Southern Europe (Context Panel) ❑ Outlook 2020: Revenue above 4.3 €B, EBITDA adjusted in the range 56-61 M€ ❑ We maintain favourable mid-term expectations due to stron
Slide 13: 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
Slide 14: Annex
01. ACQUISITION OF GTI 02. THE COMPANY ANNEX 03. THE INDUSTRY 04. THE STRATEGY 05. GOVERNANCE
Slide 15: Acquisition of GTI Software & Networking S.A.
Acquisition of GTI Software & Networking S.A. A «BUSINESS DEVELOPMENT» DEAL 15
Slide 16: Disclaimer
Disclaimer This presentation and any related slides, verbal explanations, questions and answer session as well as any material distributed in connection with it (the “Presentation”) have been prepared by Esprinet S.p.A. (“Esprinet” or the “Company”) for the sole purpose of the presentation of the tr
Slide 17: GTI Transaction Highlights
GTI Transaction Highlights A true “Business Development” Deal • Esprinet Iberica S.l.u. (100% Esprinet S.p.A.) signed a definitive agreement for the acquisition of GTI Software y Networking from Emotion S.l.u. (Mr Juan Pablo Rossi) Deal Structure • The equity value to be paid in cash at Closing amou
Slide 18: Transaction Rationale
Transaction Rationale A perfect fit with Strategic guide-lines Consolidating leadership in Customer Satisfaction Increase Profitability Address new markets the Iberian Region White Goods opportunity as Providing the best Customer Pushing for a higher weight of far as “tier-2 model” spread Satisfacti
Slide 19: 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 20: European Cloud Computing Market
European Cloud Computing Market European cloud computing market value (€ billions, 2014 –2023F) Key comments ► 2018 total industry value amounted to €30.5 billions ► The industry showed a significant CAGR 109,4 during 2014-18 period (32.2%) 29.1% 84,7 ► Industry growth has been led by western Europe
Slide 21: Key strengths of GTI
Key strenghts of GTI A cloud leader A new business model Platform for growth • Leader in the fast growing market • Recurrent revenues due to its • Leader in the AUTO-ID market, of cloud, expected to have a high subscription model schemes with potential synergies with our double digit CAGR in the com
Slide 22: GTI in a nutshell
GTI in a nutshell Business overview Key vendors per Business Unit Enterprise Equipment • GTI Software y Networking, S.A. is the parent company of a group operating in the ICT distribution mainly in Spain and Portugal, at the forefront of the distribution of Cloud solutions (“As a Service” solutions)
Slide 23: Business Model
Business Model • IT distribution models are evolving from selling physical devices to selling technology “As-a-Service”. • In this business milieu, GTI is ahead of the Spanish market because it has already transformed itself as a truly IT distributor of Cloud Solutions. • GTI Group does no longer sa
Slide 24: Enterprise Equipment & Software Business description
Business description REVENUES 2019 (SHARE %) PRODUCTS AND CHANNELS TOP VENDORS BY 2019 REVENUES • Storage Appliances € 75 m • Unified Communications and Professional Wifi Equipment Enterprise • Graphic Tablets 42% • Automatic Identification Data Capture (AIDC / IA) products • Communication devices (
Slide 25: Best Cloud Distributor in Spain
Best Cloud Distributor in Spain ✓ GTI is the 6th - the 2nd independent - wholesaler of ICT technology in Spain: the combination of Esprinet and GTI drives the Market Share to 25% (2). ✓ GTI is the only Spanish distributor with a pervasive Cloud strategy, leading the “As a Service” solutions market.
Slide 26: Cloud Provisioning Platform
Cloud Provisioning Platform ✓ Provisioning Platform enables GTI ISVs PLATFORM DISTRIBUTOR / RESELLER RESELLER END CUSTOMERS customers to automate, aggregate and sell their own cloud and digital services as well as those from third parties. ✓ It also enables ISVs to take their PLAYERS 1.653 14.431 of
Slide 27: V-Valley Europe: Post-deal 2019 pro-forma Sales
V-Valley Europe: Post-deal 2019 pro-forma Sales 741.0 M€ 561.0 M€ 555.5 M€ 2019 495.6 M€ 2018 409.0 M€ 2017 323.9 M€ 2016 285.3 M€ 2015 2014 Server, Storage & Networking 148.7 181.3 220.5 215.8 287.7 317.8 Software 79.8 80.1 83.7 130.9 104.0 138.3 Cybersecurity 19.6 21.9 32.3 29.7 63.3 81.2 Cloud -
Slide 28: Opportunity to grow in Advanced Solutions; Consolidation in Southern Europe
OPPORTUNITY TO GROW IN ADVANCED SOLUTIONS CONSOLIDATION IN SOUTHERN EUROPE The Group is the undisputed leader in the IT Client and Consumer Electronics Spain and Portugal represent key growth markets where our business is market segments in Italy and Spain. It operates in the higher margin Advanced
Slide 29: Potential synergies
Potential synergies Multiple sources of synergies in business development • High complementary businesses, with low overlapping in customer COMMERCIAL portfolios to enable cross-selling/up-selling CROSS-FERTILIZATION • Sharing selling systems and practices to increase productivity Accelerate the per
Slide 30: The Company
THE COMPANY
Slide 31: The Leading ICT Distributor In Southern Europe
The Leading ICT Distri In Southern Europe Nr 45 – MBRES Mediobanca 2019 31
Slide 32: History
History (1) 32 (1) Received the authorization of the spanish Antitrust, pending the authorization of the Morocco Antitrust
Slide 33: Group Structure
Group Structure Esprinet S.p.A. IT & CE Distributor (Italy) 5% 100% 100% 85% 100% 51% 95% Esprinet Portugal Lda Esprinet Iberica S.L.U. V-Valley S.r.l Celly S.p.A. Nilox Deutschland GmbH* 4Side S.r.l. IT & CE Distributor IT & CE Distributor Value-Added Distributor Accessories Company Private Label S
Slide 34: Key Historical Financials
Key Historical Financials NOTE: All figures in Million € SALES EBIT EBIT adjusted for non-recurring items 3.945 84 4.500 90 3.571 3.217 4.000 80 3.042 67 2.664 3.500 70 2.430 2.373 56 56 2.225 2.291 2.205 53 2.096 3.000 60 2.043 2.119 48 1.932 47 44 42 2.500 50 1.628 40 41 41 41 1.499 38 37 36 1.315
Slide 35: Sales Mix
35 Sales Mix 100% 35% 11% 6% 28% 1% 1% 5% 10% 4% IBERIA 3.9bn 1372.8M 418.3M 244.9M 1103.2M 43.4M 55.7M 191M 4074M 153.6M 1.4bn | ae | LJ 9 51% RESELLER 2.0bn 2019 Pc PRINTING OTHER IT SMARTPHONES: GAMING WHITE OTHER NETWORKING, SOFTWARE, SALES PRODUCTS HARDWARE oops CONSUMER STORAGE, SERVER SERVICE
Slide 36: Logistic Capability
Logistic Capability MORE THAN MORE THAN #SKU on stock #SKU Shipped 128K 65K (on average) 100.000 sqm 40.500 sqm 140.500 sqm Warehousing in Italy in Spain area 5.8 milion Shipped boxes 39.8 million Shipped Items • Customized delivery • Lab service installations HW e SW • Customized boxes • Boxes, pal
Slide 37: #1 And Growing In A Growing Market
#1 And Growing In A Growing Market ESPRINET SHARE ON TOTAL DISTRI SALES IN ITALY-SPAIN-PORTUGAL 18.000 27,0% 16.000 25,6% 26,0% 25,1% 14.000 Other Distri 24,4% 25,0% 24,2% 12.000 15.7 B€ 24,0% 10.000 14.6 B€ 13.3 B€ 11.751 11.9 B€ 11.071 23,0% Esprinet 8.000 10.084 8.824 22,0% 6.000 21,0% Share 4.00
Slide 38: Ranking South Europe
Ranking South Europe SALES 2 0 19 SHARE SALES 2 0 18 SHARE ITALY SPAIN PORTUGAL Esprinet 3.945,3 25,1% 3.571,2 24,4% • • • Tech Data 2.763,0 17,6% 2.610,0 17,8% • • • Ingram Micro 1.890,0 12,0% 1.865,0 12,7% • • Computer Gross 1.393,0 8,9% 1.211,0 8,3% • Arrow ECS 880,0 5,6% 793,1 5,4% • • Attiva 42
Slide 39: Human Resources
Human Resources 1.263 2019 employees 1.317 819 498 ITALY IBERIA 2018 employees 742 Sales & Marketing 575 Back Office Average years of seniority in the company: 10.0 8.8 ITALY IBERIA 598 Male headcount 719 Female headcount (45%) (55%) 39 Consolidated 2018 end-year figures
Slide 40: The Industry
THE INDUSTRY
Slide 41: Go To Market: Technology
Go To Market: Technology • Personal computers • Home networking IT CLIENTS • IT Accessories • IT Clients sw • Monitors • Printing & office solutions 7.2bn* • Other peripherals • Supplies • Home storage • Stationary products • Servers • Cloud solutions ADVANCED SOLUTIONS • Storage • Tech services • N
Slide 42: Go To Market: Suppliers
Go To Market: Suppliers IT CLIENTS ADVANCED SOLUTIONS CONSUMER ELECTRONICS 42 The vendors displayed are just a selection aimed at representing the product category
Slide 43: Go To Market: Customers
Go To Market: Customers PROFESSIONAL IT RESELLERS • Dealers • System Integrators • Printing specialists • ISV 8.7bn* • VARs • Telcos SPECIALIZED VERTICAL • Telco specialists • Electrical contractors CHANNELS • Photo shops • Videogame specialists 0.9bn* • Furniture specialists • Stationary shops RETA
Slide 44: Size Of Addressable End User Market
Size Of Addressable End User Market ITALY-SPAIN-PORTUGAL: TOTAL ICT SPENDING AT DISTRI PRICE 43,8 B€ 45.000 42,5 B€ 40,0 B€ 40,8 B€ 39,7 B€ 40.000 11.651 11.017 35.000 10.522 10.063 10.499 30.000 25.000 18.505 19.103 17.063 16.661 17.566 20.000 15.000 10.000 5.357 5.496 5.692 5.841 5.901 5.000 7.229
Slide 45: Weight Of Distris On Addressed Market
Weight Of Distris On Addressed Market ITALY-SPAIN-PORTUGAL: TOTAL ICT SPENDING AND SHARE OF DISTRIBUTORS (EX-WHITE GOODS) 35.000 54,0% 52,0% 51,2% 49,8% 50,0% 48,3% 48,0% 30.000 46,0% 45,0% 44,0% 42,0% 40,0% 40,0% 25.000 38,0% 15.681 15.826 36,0% 15.670 34,0% 16.243 17.783 32,0% 20.000 30,0% 28,0% 2
Slide 46: Additional Opportunities In White Goods
Additional Opportunities In White Goods ITALY-SPAIN-PORTUGAL: TOTAL ICT SPENDING AND SHARE OF DISTRIBUTORS (EX-WHITE GOODS) 50.000 54,0% 52,0% 51,2% 49,8% 50,0% 45.000 48,3% 48,0% 46,0% 45,0% 40.000 44,0% 42,0% 11.651 40,0% 11.017 40,0% 35.000 10.522 38,0% 10.499 10.063 36,0% 34,0% 30.000 32,0% 30,0
Slide 47: Why A Distributor
Why A Distributor ICT Distribution share on total ICT addressable sales grew from 40,0% (2016) to 49.8% (2019) and is forecasted to grow furthermore (51.2% expected in 2020). The “Why” for Vendors • Reduction of distribution fixed cost • Buffering stock • Credit lines & Credit collection capabilitie
Slide 48: The Journey From Analog To Digital
The Journey From Analog To Digital • The End-user market is offering unprecedented opportunities of growth • 5G introduction will be a game changer for multiple industries paving the way to new requests from both companies, governments and people • The ICT industry will expand into new areas of busi
Slide 49: Inventory Risk Mitigants
Inventory Risk Mitigants «Stock Protection Clause» • A typical contractual clause provided by the vast majority of Vendors in which they assume the risk of inventory devaluation arising from purchase list price reductions planned by the Vendor itself. • During a contractual period which typically sp
Slide 50: Factoring & Credit Insurance Policies
Factoring & Credit Insurance Policies Credit insurance • Large and medium sized distributors routinely apply contracts with top-rated Credit Insurance Companies shielding the risk of default of debtors with deductibles typically between 10% to 15% of the insured value. Factoring/Securitization progr
Slide 51: Gross Profit Drivers
Gross Profit Drivers Product categories • Commoditized product categories, such as Notebooks or Smartphone, typically allow for lower Gross Profits Margins as compared to more complex products such as many “Advanced Solutions” products Vendor relative strength • Highly known vendors with a strong br
Slide 52: Credit Notes
Credit Notes The Industry operates with a significant amount of Credit Notes accruals at any given end-period • Vendors routinely operate with commercial programs that envisage significant amounts of price adjustments for multiple reasons such as: • End-period accruals for target achievements • Stoc
Slide 53: The Strategy
THE STRATEGY
Slide 54: The Key Trends In Our Industry
The Key Trends In Our Industry 1 3 The emergence of the «XaaS» The migration from «pure» (Everything as a Service) 5 brick&mortar or «pure» onliners business model to «omnichannel» retailers The growing «consumerization» of professional customers service-level expectations GROSS PROFIT GROSS PROFIT
Slide 55: Gross Profit Opportunities
Gross Profit Opportunities 1 The industry is undergoing a transformation with the growth of “As a Service” or “Consumption” based utilization models against traditional “Transactional” model 1 Typical “As a service” models include The emergence of the «XaaS» • Cloud Computing, both in the form of In
Slide 56: Gross Profit Opportunities
Gross Profit Opportunities 1 There is a growing number of examples of Vendors focusing on key technologies: • IBM: sold Printers, PCs & Servers and focused on Services, Cloud and A.I. • HP: Split into HP Inc (PCs & Printers) and HPE (Advanced Solutions) 2 • HPE: spun off its Software and Services di
Slide 57: Gross Profit Threats
Gross Profit Threats 1 Retailers are struggling to cope with the pure on-liners competition and are in the middle of journey to provide a comprehensive «omnichannel experience» to their customers 3 During the transition many traditional retailers are putting extraordinary pressure on suppliers to fu
Slide 58: Gross Profit Threats
Gross Profit Threats 1 PCs and smartphones, the two ICT product lines with higher sales volumes, have witnessed modest innovation in the last years and therefore margins for the manufacturers decreased 4 Gross profit opportunities could arise from a disruptive round of innovation at the moment not y
Slide 59: Operational Trends
Operational Trends 1 The employees of Resellers and Retailers are exposed everyday to the interaction with companies such as Amazon, Starbucks, Apple that are using amazing levels of customer experience as a competitive 5 advantage The growing «consumerization» More and more they expect the same lev
Slide 60: The Strategy
The Strategy Aim at being the best distributor in the region for all stakeholders by: • Getting recognized as provider of the best Customer Satisfaction in the region • Leveraging the size in Italy and Spain to improve ROCE on IT Clients & Consumer Electronics • Pushing for an higher weight of Advan
Slide 61: Actions: Be The Best
Actions: Be The Best Getting recognized as provider Leveraging the size in Italy and Pushing for an higher weight of of the best Customer Achieving size Spain to improve ROCE on IT Advanced Solutions sales Satisfaction in the region in Portugal Clients & Consumer Electronics New procedures, tools an
Slide 62: Actions: Riding The Mid-Term Trends
Actions: Riding The Mid-Term Trends Developing further Be ready for potential new Developing a state-of-the-art Pushing on Distri adoption by the Outsourcing initiatives for markets: Robotics, A.I. Electrical «XaaS» strategy White goods manufacturers Vendors and Customers Mobility, 3D Print Long ter
Slide 63: Governance
GOVERNANCE
Slide 64: Mission & Corporate Values
Mission & Corporate Values Corporate Mission To be the best technology distributor operating in its relevant markets, assuring shareholders above-average return on investment thanks to precise, serious, honest, fast-footed, reliable, and innovative management of the customer and vendor relationship,
Slide 65: Management
Management Maurizio Rota Alessandro Cattani 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 I
Slide 66: Board Of Directors
Board Of Directors STRATEGY CONTROL AND REMUNERATION AND COMPETITIVENESS AND NAME POSITION EXECUTIVE INDEPENDENT APPOINTMENT COMM. SUSTAINABILITY COMM. COMMITTEE RISK COMM. Maurizio Rota Chairman • • • Alessandro Cattani CEO • • • Marco Monti Director • Matteo Stefanelli Director • • Tommaso Stefane
Slide 67: Code & Principles
Code & Principles Code of Etics Code of Conduct “231” 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 23
Slide 68: Star Requirements
Star 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 Italian
Slide 69: Shareholders & Analyst Coverage
Shareholders & Analyst Coverage DECLARANT & DIRECT SHAREHOLDER % ON ORDINARY CAPITAL % ON VOTING CAPITAL Francesco Monti 16.16% 16.16% Giuseppe Calì 11.26% 11.26% Axopa S.r.l. (Maurizio Rota and Alessandro Cattani) 9.07% 9.07% Paolo Stefanelli (*) 5.22% 5.22% Tommaso Stefanelli 1.74% 1.74% Matteo St
Slide 70: Social Responsibility Report
Social Responsibility Report Presence of the CORPORATE OVERVIEW 3.9 bn euros of revenues N°1 First distributor in Identification of a Sustainability Competitiveness and Sustainability Italy and Spain Strategy Committee (+10% vs 2018) Green Project ENVIRONMENTAL to increase the visibility of the most
Slide 71: Thank you
Thank you GRAZIE + GRACIAS - OBRIGADO+ DANKE - MERCI + ZA} « aif ait » Rist @ esprinet’