Amplifon Spa · MIL:AMP
Amplifon Spa — Investor Presentation (November 2019)
41 slides from Amplifon Spa's investor presentation, November 2019
Slide 1: Presentation to Investors November 2019
Presentation to Investors November, 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: Contents
Contents JHU Amplifon today a= An attractive industry with long-term growth ahead Strategic Update eee §(Uodate on our key initiatives to reshape the hearing care retail around the customer Our plan in Spain: GAES integration eee China: our first Joint Venture aes § 2020 ambitions: continuous delive
Slide 4: Amplifon today
Amplifon today ~I1% global market share {' €1.37bn revenues in 2018; €1,225m in 9M 2019 LA #1 GLOBAL LEADER IN HEARING CARE RETAIL 29 countries, 5 continents #1 or #2 in most markets ~l,000 points of sale > Al COE & ~16,000 people Note: all data includes GAES (acquisition completed in December 2018)
Slide 5: Contents
Contents Amplifon today mms An attractive industry with long-term growth ahead Strategic Update eee §(Uodate on our key initiatives to reshape the hearing care retail around the customer Our plan in Spain: GAES integration China: our first Joint Venture 2020 ambitions: continuous delivery of strong
Slide 6: Long-term sustained growth driven by secular trends
Long-term sustained growth driven by secular trends New mega-trends supporting secular drivers 4 Demographics = Ageing population " Increasing exposure to noise pollution Do Penetration * Increasing awareness * Improving technology * Growing wellness relevance <3) 4 Consumer behavior * Active ageing
Slide 7: Fragmented global retail market
Fragmented global retail market Global retail share by segment INDEPENDENTS SPECIALTY RETAILERS! NON-SPECIALTY RETAILERS ONLINE PLAYERS m Ae | © Amplifon S.p.A. Presentation to Investors ~50% ~35% ~10% Players with <IO PoS, under gradual consolidation Very few international retail players (~25% of t
Slide 8: Contents
Contents Amplifon today An attractive industry with long-term growth ahead JJ, Strategic Update eee §(Uodate on our key initiatives to reshape the hearing care retail around the customer Our plan in Spain: GAES integration eee China: our first Joint Venture aes § 2020 ambitions: continuous delivery
Slide 9: Strategic Pillars to 2020
Strategic Pillars to 2020 Re-affirming our strategic direction We will focus V7 on core Markets We will lead \Z in Customer Experience innovation We will build \7 an effective & talented Organization Strategic pillars unchanged, growth potential further accelerated by GAES 4) © Amplifon S.p.A. (uf P
Slide 10: Contents
Contents Amplifon today An attractive industry with long-term growth ahead Strategic Update | Update on our key initiatives to reshape the hearing care retail around the customer Our plan in Spain: GAES integration China: our first Joint Venture 2020 ambitions: continuous delivery of strong growth &
Slide 11: 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 12: Amplifon Product Line to reinvent the way hearing aids are perceived
Amplifon Product Line to reinvent the way hearing aids are perceived We have reimagined our world placing customers first (ts AMPLI-EASY The easiest hearing Further strengthen our solution with no-frills brand equity amplifon Q AMPLEMINI No one will see you are wearing one. But everyone will notice
Slide 13: 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 in May ‘I8 Outstanding response from customers and HCP Continuous features release of Amplifon APP Multic
Slide 14: 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 Strong results from 2019 roll-outs v a Q2: Netherlands & Germany Q3: France, Australia and the US (Miracle-Ear APP) 4) © Amplifon S.p.A. 13 (uf Presentation to Investors
Slide 15: Amplifon multichannel ecosystem: keep on innovating
Amplifon multichannel ecosystem: keep on innovating Launch of Amplifon Remote Care & Ecosystem Control Center to enhance experience, usage & repurchase Remote care Enhance customers life, providing services via: = Chat bot = Tutorials = Call center = Store Data from | Va Amplifon APP uff} a Data fro
Slide 16: Contents
Contents as AMplifon today a= An attractive industry with long-term growth ahead ees § Strategic Update eee §(Uodate on our key initiatives to reshape the hearing care retail around the customer ££ Our plan in Soain: GAES integration China: our first Joint Venture 2020 ambitions: continuous delivery
Slide 17: 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 18: 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 NM © A
Slide 19: 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 |OO Rebased |OO Opportunity to create another superb Amplifon stronghold mM | Cost per Gross Rating Point 4) © Amplifon S.p.A. i" (uf Presentation to Inves
Slide 20: 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 21: Contents
Contents Amplifon today a= An attractive industry with long-term growth ahead ees § Strategic Update eee §(Uodate on our key initiatives to reshape the hearing care retail around the customer Our plan in Spain: GAES integration es Ching: our first Joint Venture 2020 ambitions: continuous delivery of
Slide 22: ▪ ▪ ▪ ▪ 12% 14% ▪ ~ % ▪ ▪ 88% 86% ▪
▪ ▪ ▪ ▪ 12% 14% ▪ ~ % ▪ ▪ 88% 86% ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪
Slide 23: Contents
Contents Amplifon today a= An attractive industry with long-term growth ahead ees § Strategic Update eee §(Uodate on our key initiatives to reshape the hearing care retail around the customer Our plan in Spain: GAES integration aes § China: our first Joint Venture ees 2020 ambitions: continuous deli
Slide 24: 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 Presentation to Investors 2020! 1,800-1,860 330-345 ~260 IFRS {5 application 2020! withiersis ~(I5) 1,785-1,845 -(10) 320-335 ~260 |. Excl
Slide 25: 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 26: 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 27: 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 28: Contents
Contents Amplifon today An attractive industry with long-term growth ahead Strategic Update Our plan in Spain: GAES integration eee §(Uodate on our key initiatives to reshape the hearing care retail around the customer eee China: our first Joint Venture 2020 ambitions: continuous delivery of strong
Slide 29: 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 30: 2018: fourth year in a row of record results
2018: fourth year in a row of record results Sustained double-digit revenue growth and profitability expansion Outstanding revenue growth Continued profitability expansion Robust cash flow generation Solid capital structure 4) © Amplifon S.p.A. (uf Presentation to Investors €1.37 billion, +10.6% in
Slide 31: Q3 & 9M 2019 Key takeaways
Q3 & 9M 2019 Key takeaways Continued outstanding profitable growth, also fostered by Spain’s unrelenting excellent performance = Continued outstanding top-line growth (Q3 2019: +28.5% in LC; 9M 2019: +26.1% in LC) = Excellent organic growth, well above market and reaching all-time high in Q3 (+9.2%)
Slide 32: Q3 2019 Financial highlights
Q3 2019 Financial highlights A truly outstanding quarter: all-time high organic growth and profitability expansion, supported by continued excellent performance of Spain = Another quarter of excellent top-line growth of +28.5% in LC Q3 2019 Q3 2018 A% Data in €m W/IFRSI6 w/o IFRSI6 w/o IFRSI6 * Outs
Slide 33: 9M 2019 Financial highlights
9M 2019 Financial highlights Strong momentum continues 9M 2019 9M 2018 A% Data in €m W/IFRSI6 ~— w/o IFRSI6 w/o IFRSI6 REVENUES 1,224.7 1,224.7 962.8 427.2% Organic growth +6.2% Acquisitions 419.9% FX +11% EBITDA Rec. 262.6 194.6 150.6 +29.3% Margin % 21.4% 15.9% 15.6% Outstanding top-line growth of
Slide 34: Financial results by Region
Financial results by Region EMEA: outstanding performance boosted by double-digit organic growth in Q3 and by the excellent results of Spain = Outstanding revenue growth of over +32% in LC 9M 2019 9M 2018 A% « Excellent organic growth at +7.3% (excluding GAES), _—_ 27088 ; 7 Data in €m W/IFRSI6 w/o
Slide 35: Financial results by Region
Financial results by Region AMERICAS: robust top-line growth and strong profitability expansion 9M 2019 9M 2018 A% Data in €m w/IFRSI6 — w/o IFRSI6 w/o IFRSI6 REVENUES 203.4 203.4 168.0 +21.0% Organic growth +2.9% Acquisitions +12.0% FX +6.1% EBITDA Rec. 44.8 Al6 sis +28.8% Margin % 22.0% 20.4% 19.2
Slide 36: Financial results by Region
Financial results by Region APAC: solid and improving performance since beginning of the year 9M 2019 9M 2018 A% Data in €m w/IFRSI6 — w/o IFRSI6 w/o IFRSI6 REVENUES 140.2 140.2 131.6 46.6% Organic growth +4.0% Acquisitions 43.5% FX -0.9% EBITDA Rec. ALT SAO 34.9 -2.9% Margin % 29.7% 24.2% 26.6% Q3
Slide 37: Q3 2019 Financial results
Q3 2019 Financial results Very strong improvement in all recurring P&L lines, with Net Profit and EPS Adjusted up, respectively, ~+18% and ~+28%. As reported figures reflect one-off costs, anticipated vs. initial expectations, thanks to a faster integration process bata iném Q3 2019 w/IFRSI6 Q3 2019
Slide 38: 9M 2019 Financial results
9M 2019 Financial results Delivering excellent results in all P&L items; Net Profit ~+29% and EPS Adjusted ~+35% bata iném 9M 2019 w/IFRSI6 9M 2019 w/o IFRSI6 9M 2018 w/o IFRSI6 A% Rec. w/o (unless specified) Recurring Reported Recurring Reported Recurring Reported IFRSI6 REVENUES 1,224.7 1,224.7 1,
Slide 39: 9M 2019 Financial results
9M 2019 Financial results Strong cash flow generation: Operating Cash Flow recurring and Free Cash Flow recurring up, respectively, +47% and +52% vs 9M 2018 Data in €m 9M 2019! 9M 2018? A Operating cash flow before repayment of lease liabilities 187.0 93.0 94.0 Repayment of lease liabilities (59.6)
Slide 40: 9M 2019 Financial results
9M 2019 Financial results Net Debt/EBITDA further reducing to 2.20x Data in €m 30/09/2019 31/12/2018! Cash (125.2) (89.9) Short-term debt 178.3 53.1 Medium/long-term debt 803.7 877.7 Net financial debt 856.8 840.9 Lease liabilities 433.5 - Total financial debt & lease liabilities 1,290.2 840.9 Total
Slide 41: Investor Relations Contacts
Investor Relations Contacts FRANCESCA RAMBAUDI Director Tel: +39 02 5747 2261 francesca.rambaudi@amplifon.com amplifon AMANDA HART GIRALDI Specialist Tel: +39 02 5747 2317 amanda.giraldi@amplifon.com PAOLA BEZZI OLGA LEPECHKINA Junior specialist Assistant Tel: +39 02 5747 2310 Tel: +39 02 5747 2542