Intercos S p A : Earnings Call Q1 2024

May 7th 2024

1Q24 RESULTS

Disclaimer

IMPORTANT NOTICE

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This presentation might contain certain forward-looking statements that reflect the Company's management current views with respect to future events and financial and operational performance of the Company and its subsidiaries.

These forward-looking statements are based on Intercos current expectations and projections about future events. Because these forward-looking statements are subject to risks and uncertainties, actual future results or performance may differ materially from those expressed in or implied by these statements due to any number of different factors, many of which are beyond the ability of Intercos to control or estimate. You are cautioned not to place undue reliance on the forward- looking statements contained herein which are made only as of the date of this presentation. Intercos does not undertake any obligation to publicly release any updates or revisions to any forward-looking statements to reflect events or circumstances after the date of this presentation.

Any reference to past performance or trends or activities of Intercos shall not be taken as a representation or indication that such performance, trends or activities continue in the future.

This presentation does not constitute an offer to sell or the solicitation of an offer to buy the Group's securities, nor shall the document form the basis of or be relied on in connection with any contract or investment decision relating thereto or constitute a recommendation regarding the securities of Intercos.

Intercos securities referred to in this document have not been and will not be registered under the U.S. Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

Pietro Oriani, the Manager in charge of preparing the corporate accounting documents, declares that, pursuant to art. 154-bis, paragraph 2, of the Legislative Decree no.58 of February 24, 1998, the accounting information contained herein correspond to document results, books and accounting records.

Agenda

1Q24 Results	1Q24 Sales	Outlook &
Overview	Performance	Guidance

1Q24 Results overview - All time high order entry evolution

• Apr24 YTD Order Entry: following the record reached by the Group in the months of November and December 2023 (€127m), new records followed in the first four months of 2024, with orders increasing compared to the first four months of 2023 for a total of +€43m. In particular, in the months of January-February the order intake reached €133m (+€21m vs. the previous year), while in the months of March-April orders amounted to €142m (+€23m on the last year). Following the end of the de- stocking phase, prestige clients have gone back to a normal re-ordering pace (especially in Make-up BU). This is expected to benefit profitability in 2H24.
• Apr24 Order Book: the Order Book at the end of Apr24 reached a new all-time high level, despite April strong sales performance. The cumulated Make-up and Skincare orders placed and not yet invoiced were at €356m (+€37m vs. Apr23). Also, the Hair&Body division rolling forecast points to a strong performance in the next months.

Make-up	Skincare		+12%
				+€37m	356
			319
	+19%
	+€43m	275
232					303
			276
196		228
35		47	43		54
Apr23 YTD Order Entry		Apr24 YTD Order Entry	Apr23 Order Book		Apr24 Order Book

1Q24 Results overview - Cyber-attack impact

• 1Q24 Net Sales amounted to €221.1m, slightly down compared

to 1Q23 (-5.8%, or -4.8% at c.FX). The performance was affected

by the Cyber-attack and the consequent slowdown of the

production and invoicing processes. This extraordinary event

mainly affected the make-up production plants based in Italy and

US. Sales lost are expected to be fully recovered already in 2Q24. In

the absence of the Cyber event and considering the order book,

1Q24 net sales would have been once again higher than LY.

• 1Q24 Adjusted EBITDA stood at €20.8m, down by -€9m

compared to 1Q23. The reduction was caused by the decrease in

sales and the extra operations costs incurred following the Cyber-

€m

Revenues

Adj. EBITDA

Adj. EBITDA %

Net Debt

Net Debt/Adj. EBITDA

1Q24

221.1

20.8

9.4%

102.7

0.80x

1Q23

234.6

29.8

12.7%

96.7

0.73x

% vs 1Q23

Rep FX	c FX
(6%)	(5%)
(30%)

attack. The full closure of all the Group's information systems took

place on the 18th of February and after some days the processes

gradually restarted. The issue was solved after approximately a

month and the ordinary activity was then completely restored. This

resulted in (i) higher product transformation costs (manual

interventions needed as systems were totally o partially not

available) and (ii) variable costs that could not decrease

proportionally to the turnover due to the sudden interruption of

the business.

• 31Mar24 Net Debt was equal to €102.7m, in line with the one of

31Dec23 (€100.2m) and slightly higher than the one of 31Mar23

(€96.7m). Despite the cyber-attack, which caused some issues in

both cash inflows and outflows, and the decline in adj. EBITDA,

leverage ratio (Net Debt on LTM EBITDA) remained well below 1x,

at 0.8x.

€m

29,8

6,2

1,90,920,8

€8.1m of lower EBITDA vs. LY fully attributable to the one-month disruption caused by the Cyber-Attack. In normal conditions and considering the business on hand, sales forecasted for 1Q24 would have been higher than 1Q23.

1Q23	Lower volumes	Production	Opex &	1Q24
Adj. EBITDA	vs. LY	inefficiency	Others	Adj. EBITDA

1Q24 Sales Performance - Revenues by BU

1Q24		FY23			1Q23
Hair & Body		Hair & Body		Hair & Body
24,3%		23,4%			23,3%
57,8%	Make Up	15,9%	60,7%	Make Up Skincare	13,7%	63,0%
17,9%		Skincare			Make Up
Skincare

1Q24, which already had high 1Q23 comps to beat, was heavily marked by the Cyber-attack impacts. As a matter of fact, sales trend varied according to the different magnitude of the Cyber impact, which has not been homogeneous in all Group's production plants. In this regard, Make-up production sites located in Italy and US have been the ones affected the most.

• Make-upreported revenues of €127.9m (-13.5% compared to 1Q23). As anticipated the BU was the most affected one, due to the high complexity that characterizes the production process. However, the good trends reported in Asia allowed to offset part of the impact, with the mass segment benefitting from the high volumes of orders collected in 2023.
• Skincare closed 1Q24 with revenues of €39.5m, up by +22.8% compared to last year. Unlike the plants dedicated to make-up, the Swiss and Korean ones were less affected by the cyber-attack, being able to recover normal operations much more quickly. The excellent performance of the business unit was mainly achieved thanks to the good performances of Asian and North American customers.
• Hair & Body recorded revenues of €53.7m, substantially in line with those of 1Q23 (€54.7m), despite the Polish and Italian plants reported performances below expectations due to the cyber- attack. Fragrance business continued to report excellent performances.

€m

Revenues

Make Up

Skincare

Hair & Body

1Q24		1Q23		% vs 1Q23
221.1		234.6		(6%)
127.9		147.8		(13%)
39.5	32.1	23%
53.7	54.7	(2%)

1Q24 Sales Performance - Revenues by Region

1Q24	FY23	1Q23
Asia	Asia	Asia
19,6%	17,3%	14,9%
53,0% EMEA	51,3% EMEA	Americas 30,9%	54,2%	EMEA
27,4%	31,4%
Americas	Americas

The different degrees of the Cyber-attack impact on plants efficiency, also marked sales trends by region, with Americas and EMEA suffering the most.

• EMEA reported revenues of €117.1m, down -7.9% compared to 1Q23. The decline was entirely due to the reduced operations of the make-up plants in Italy, in the absence of which, sales would have been growing. The plants dedicated to Skincare and Hair&Body limited the drop in turnover.
• Americas recorded revenues of €60.6m, down by -16.3% compared to the previous year for the same reasons already reported for EMEA, as the market is mainly served through the plants located in Italy and US. The performance of the skincare Business Unit was good, in continuity with the performances recorded in previous quarters.
• Asia is the only region which, having been less impacted by the Cyber Attack, closed the 1Q24 with strong growth in sales (+23.7%), amounting to €43.4m. Both Korea and China have contributed to this result, with local brands continuing to record excellent performances, both in make-up and skincare.

Revenues

EMEA

Americas

Asia

221.1		234.6		(6%)
117.1	127.1	(8%)
60.6	72.4	(16%)
43.4	35.1	24%

1Q24 Sales Performance - Revenues by Customer Type

1Q24		FY23		1Q23
Retailers		Retailers		Retailers
7,2%		9,8%		8,6%
47,3%	Multinationals		49,1% Multinationals	37,2%	54,2% Multinationals
Emerging Brands 45,5%		41,1%	Emerging Brands
Emerging Brands

The different degrees of the Cyber-attack impact on plants efficiency, also marked sales trends by Customer Type. Also in this case, the clients mostly served out Americas and EMEA suffered the most.

• Multinational customers are those who are more served by the make-up plants located in US and Italy. For this reason, the performance of this cluster of clients was the one most affected by the cyber- attack. Revenues thus closed the quarter at €104.6m, down by -17.8%.
• Emerging Brands were able to benefit from the local Asian brands and the performance of Hair&Body, closing the first quarter with revenues of €100.6m (+15.3%).
• Retailers recorded revenues of €15.8m, reporting a decline in sales (-21.4%) following the performance of the make-up business unit and the softer trend of this customer segment of the past couple of years.

	€m		1Q24		1Q23		% vs 1Q23
	Revenues	221.1	234.6	(6%)
	Multinationals		104.6		127.2		(18%)
	Emerging Brands	100.6	87.3	15%
	Retailers	15.8	20.1	(21%)

Regarding the breakdown of sales by customer type, please note that, as last year, starting from the first quarter of 2024, the classification of some customers has been slightly revised in order to reflect some changes in the databases (e.g. some Emerging Brands subject to acquisition by multinationals reclassified in the respective cluster to which now they belong).

Outlook & Guidance

	We continue to expect c.+5% of growth for the Global Beauty market. Europe is continuing to perform very well driven by strong consumer demand,
Update on	also in the prestige segment, where innovation plays a big role. Moreover, the market growth continues to be well balanced between prices and
volumes. Regarding US, as already anticipated, we were expecting a possible slowdown in 1H24, mainly due to a deceleration of the mass segment.
the Beauty	Such slowdown is materializing. In any case, we continue to remain positive for the development of the market for the rest of the year, especially in
market	2H24. Regarding Asia, we are bullish for 2024: Korean market remains strong and the Korean innovation capabilities (where we have the second biggest
R&D centre) are taking ground also abroad, especially in US. Chinese local brands, both emerging and well established, are gaining market shares from
	the Western ones, also leveraging on the new online platforms.
	Innovation continues to be the main distinguishing factor of our business model and it is the main reason why our Group continues to be a protagonist
	in the Beauty sector worldwide. During Cosmoprof (the biggest international fair dedicated to Beauty) we met more than 400 customers coming from all
Where we	over the world, from multinationals to emerging brands, interested in discovering new trends and new formulations proposed by Intercos for the years
to come. We continue to develop new formulations and new patents, recognized by all players in the sector, as also demonstrated by the constant
stand	increase in orders. In this regard, we have recently made new collaborations with players of the food sector, which allow us to offer to the market new
and cleaner formulations with unique performances.
	Our presence throughout the world and our know-how in the various markets, together with the proven ability to innovate, are progressively allowing
	us to take full advantage of the evident outsourcing trend in Beauty, which is constantly growing, not only thanks to the excellent performances of
	emerging brands, including the Asian ones, but also thanks to the increase of partnerships with multinational players. An example is the recent
	agreement signed with The Estee Lauder Companies, which decided to outsource the production of US cosmetic powders and whose collaboration will
	have positive financial impacts mainly starting from 2025.
	The latest developments make us even more confident in our capacity to outperform the market once again in FY24. Therefore, despite the 1Q24
FY24	impact due to the Cyber A ack, which caused a contraction in revenues of 4.8% at constant rates, the Group confirms its guidance for the full 2024
year, which foresee growth in net sales, at constant rates, in a range between +6% and +8%. This means projecting a sales increase for the next nine
Guidance	months in a range between c.+10% and c.+12% (more than twice the market growth forecasted).
	Moreover, the announced re-orders from prestige brands, especially in make-up, are coming back. This trend is confirming that the de-stocking phase is
	coming to an end, and this is expected to positively contribute to the overall Group profitability in 2H24.

Outlook & Guidance - Order entry and Order in-take

Total firm order-in-take

by business unit

excluding contract manufacturing (e.g.

Hair & Body).

Third record in a row reached in Mar-Apr24

Order Entry

€m								Make-up		Skincare
																			133	142
												123						127
							117	120					120	118
		116
		109			111	106	111	109		112	111	108
				103
			98
83	84																			119
		86										102						106	109
						97	97					98	96
		90	80	85	94	89	93	93	99	92	88
63	67
20	16	30	19	18	17	17	20	23	17	18	16	21	13	22	22	18	21	21	24	23
Nov- Jan- Mar- May- Jul-	Sep- Nov- Jan- Mar- May- Jul-	Sep- Nov- Jan- Mar- May-	Jul-	Sep- Nov- Jan- Mar-
Dec Feb Apr Jun Aug	Oct Dec Feb Apr Jun Aug	Oct Dec Feb Apr Jun	Aug Oct Dec Feb Apr
'20	'21	'21	'21	'21	'21	'21	'22	'22	'22	'22	'22	'22	'23	'23	'23	'23	'23	'23	'24	'24

Total firm order book

evolution by business unit

excluding contract

manufacturing business units (e.g. Hair & Body)

New record reached at the end of April despite strong April sales

Order Book

€m

235

186

49

Apr '20

	345	319	357
232
	293	276	303
182
50	52	43	54
Apr '21	Apr '22	Apr '23	Apr '24