Elica S p A : H1 2021 Consolidated Results

PRESS RELEASE

ELICA S.p.A. BoD APPROVES H1 2021 RESULTS:

REVENUE OF EURO 269.5 MILLION (+46% ∼ VS H1 2020; +50% AT LIKE-FOR-LIKE

EXCHANGE RATES)

POSITIVE PERFORMANCE IN BOTH SEGMENTS - COOKING AND MOTORS -

DRIVEN BY A GROWING MARKET DEMAND

AND BY THE DEVELOPMENT OF "NIKOLATESLA" ASPIRATION HOBS RANGE

RAW MATERIAL COSTS RISE MITIGATED

BY AN IMPROVEMENT IN OVERALL EFFICIENCY

ADJUSTED EBIT OF EURO 16.7 MILLION (6.2% MARGIN)

WITH AN IMPROVEMENT ON H1 2020

H1 2021 key consolidated results:

• The H1 2021 results are mainly driven by the post Covid market demand rebound, which has already positively affected the second half of 2020, and by the optimization strategy necessary to ensure the future sustainability of the Group in an increasingly competitive scenario in terms of prices and products.
• Revenue: Euro 269.5 million, +46.3% on the same period of the previous year (+50.0% net of the currency effect), thanks to improved volumes and positive price-mix effect. Double-digit growth at like-for-like exchange rates (+16%) even against H1 2019 (pre- Covid).
• Cooking segment overall up 47.4%, making significant progress both for own brand sales and for OEM segment (+45.9% and +49.2% respectively). This improvement is mainly due to growth of the NikolaTesla aspiration hobs range, also thanks to the introduction of the NikolaTesla Fit model, and to the substantial boost of OEM volumes on Q2 2020, which was impacted by the two-months closure of the Mexican facility.

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• Motors segment growth also continued in the first half of the year (+40.1% on H1 2020), driven particularly by the "heating" segment.
• Adjusted EBITDA1: Euro 28.6 million, significantly up on Euro 12.2 million in H1 2020, due to higher revenue driven by volumes, a positive price mix and the control of SG&A costs, that allowed to mitigate the rise in raw material costs. EBITDA margin of 10.6% (6.6% in H1 2020).
• Adjusted EBIT2 of Euro 16.7 million (Euro 0.1 million in H1 2020). EBIT margin of 6.2%.
• The Adjusted Net Profit was Euro 10.4 million compared to a loss of Euro 2.2 million in H1 2020. The Adjusted Group Net Profit was Euro 7.6 million compared to a loss of Euro 4.1 million in the same period of 2020. The Minorities profit of Euro 2.8 million increased on Euro 1.8 million in H1 2020 and reflects the strong Elica performance in India, despite Q2 2021 featuring a fresh wave of Covid-19 infections. The performances of Ariafina (Japan) and Airforce (Italy) were substantially in line with H1 2020.
• Net Financial Position3: Euro -46.5 million (excluding the IFRS 16 effect for Euro -9.7 million), decreasing on Euro -51.4 million at December 31, 2020 (Euro -74.7 million at June 30, 2020), thanks in particular to higher EBITDA, the improved working capital and the investments containment, despite the payment of the initial tranche for the acquisition of the companies E.M.C. S.r.l. and CPS S.r.l. for Euro 4.0 million.
• On July 2, 2021, FIME, the Elica Group's motors business unit, completed the acquisition of the 100% of the share capital of Electric Motors Company S.r.l. ("E.M.C.") and CPS S.r.l. ("CPS"), strengthening the Group's presence on the electric motors market. E.M.C. and CPS are European leaders in the design and production of electric motors, domestic range hood systems, fans for pellet stoves and motors for medical applications.

Fabriano, July 30, 2021 - The Board of Directors of Elica S.p.A., the parent of a Group that is the leading manufacturer of kitchen range hoods, met today in a virtual meeting and approved the H1 2021 consolidated results, prepared in accordance with IFRS.

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• The H1 2021 figure was adjusted in view of the extraordinary effect of the non-competition agreement signed with the previous Chief Executive Officer and extraordinary restructuring charges totalling Euro 1.4 million. The H1 2020 figure was adjusted considering the extraordinary effect related to Brazil for Euro 0.7 million, related to the settlement of the dispute with Esperança Real S/A (Brazil) and other restructuring charges of Euro 0.2 million.
  2 The H1 2021 figure was adjusted in view of the extraordinary effect of the non-competition agreement signed with the previous Chief Executive Officer and extraordinary restructuring charges totalling Euro 1.4 million. The adjustment includes also the effects from the reorganisation of the business model in China for Euro 1.6 million. The H1 2020 figure was adjusted considering the extraordinary effect related to Brazil for Euro 0.7 million, related to the settlement of the dispute with Esperança Real S/A (Brazil) and other restructuring charges of Euro 0.2 million.
  3The amount indicated is net of the IFRS 16 effect, as outlined in the reconciliation tables.

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"The team is working well and the results for the first six months of the year confirm the progress made across all business segments. The higher volumes, the price-mix effect, the SG&A costs monitoring and the great hedging strategy carried out in 2020 have mitigated the impact from higher raw material costs; in fact, we expect that the real challenge in the coming months will be their cost containment and procurement". Giulio Cocci, Chief Executive Officer of Elica stated. "We are very pleased to have completed on July 2 the acquisition of the E.M.C. and CPS, European leaders in the Motors segment with a product portfolio that is perfectly complementary to that of FIME, allowing us to tap into significant international expansion and new business development opportunities and a perfect fit with Elica's Motor business growth trajectory".

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Elica Group Operating Performance

In H1 2021, Elica returned Consolidated revenue of Euro 269.5 million, +46.3% on H1 2020

(+50.0% at like-for-like exchange rates). The growth in sales was driven both by higher volumes and a positive price-mix effect.

The global economic situation in the second quarter of 2021 confirmed the recovery emerging in Q1, thanks particularly to the vaccination campaigns, the economic-support measures, higher savings levels and rebounding demand. The significant growth rates on the previous year were also due to the considerable impact of the Covid-19 pandemic in Q2 2020. In particular, in H1 2021 global range hood demand growth was estimated at 16.1%4, with divergent situations emerging across the various regions.

A gradual recovery was seen in Europe, also thanks to the high vaccination levels, which resulted in Q2 2021 to a return to pre-pandemic levels.

The US also saw further recovery, thanks to progressing vaccination campaigns and major economic stimuli. In Latin America however, the healthcare situation remains highly challenging in many countries (in particular in Brazil and Argentina), resulting in alternating phases of upswings and stagnancy - partially dampening the recovery.

The Asian countries present significant differences. In India, for example, sharply rising infection numbers in spring 2021 resulted in an economic contraction in Q2. Asia in addition features uneven growth whereby - against still solid increases in (for example) electronic components exports - consumer demand has declined.

• Source: Elica Group, internal estimates

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Own brand sales were up 45.9% (+50.0% at like-for-like exchange rates) compared to H1 2020. The NikolaTesla range, with the new NikolaTesla Fit product, drove sales in the high-end segment and accounted for 12.0% of Cooking revenue. Own brand sales in the Cooking segment accounted for 54% in H1 2021.

OEM revenue also saw significant growth, up 49.2% (+53.7% at like-for-like exchange rates) on the same period of the previous year, thanks in particular to accelerating volumes which in H1 2020 were impacted by the closure of the Mexican facility for two months.

The Motors segment, accounting for 14.0% of total revenue, reported 40.1% growth (+40.4% at like-for-like exchange rates), driven in particular by "heating" segment growth.

Adjusted EBITDA was Euro 28.6 million, significantly up on H1 2020 (Euro 12.2 million), with a margin of 10.6%, compared to 6.6% in 2020, thanks to revenue growth driven by volumes and a positive price mix and the control of SG&A costs which mitigated higher raw material costs.

Adjusted EBIT was Euro 16.7 million (Euro 0.1 million in H1 2020), with an increase also in margins.

Net financial expense was Euro 0.7 million, reducing on Euro 1.9 million in H1 2020.

The Adjusted Net Profit was Euro 10.4 million (compared to a loss of Euro 2.2 million in the same period of 2020). The Adjusted Group Net Profit was Euro 7.6 million, compared to a loss of Euro

4.1 million in H1 2020. The Minorities profit of Euro 2.8 million increased on Euro 1.8 million in

H1 2020 and mainly reflects Elica's strong performance in India, despite a decline in the second quarter of 2021 due to the uptick in Covid-19 infections and the performances of Ariafina and Airforce, which were substantially in line with 2020.

The Group Net Profit was Euro 5.8 million compared to a loss of Euro 4.8 million in H1 2020.

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	H1 2021	% revenue	H1 2020	%	21 Vs 20%
				revenue
In Euro thousands
Revenue	269,459		184,197		46.3%
Adjusted EBITDA	28,550	10.6%	12,244	6.6%	133.2%
EBITDA	27,184	10.1%	11,300	6.1%	140.6%
Adjusted EBIT	16,693	6.2%	70	0.0%	23,747.1%
EBIT	13,717	5.1%	(874)	(0.5%)	1,669.5%
Net financial expenses	(751)	(0.3%)	(1,921)	(1.0%)	60.9%
Income taxes	(4,389)	(1.6%)	(163)	(0.1%)	(2,592.6%)
Profit/(loss) from continuing operations	8,577	3.2%	(2,958)	(1.6%)	390.0%
Adjusted profit/(loss) for the period	10,436	3.9%	(2,241)	(1.2%)	565.8%
Profit/(loss) for the period	8,577	3.2%	(2,958)	(1.6%)	390.0%
Adjusted profit/(loss) attributable to the owners of the
Parent	7,612	2.8%	(4,062)	(2.2%)	287.4%
Profit/(loss) attributable to the owners of the Parent	5,760	2.1%	(4,779)	(2.6%)	220.5%
Basic earnings/(loss) per share on continuing operations and
discontinued operations (Euro/cents)	9.10		(7.55)		220.5%
Diluted earnings/(loss) per share on continuing operations and
discontinued operations (Euro/cents)	9.10		(7.55)		220.5%

Elica Group Equity and Financial Performance

The Net Financial Position at June 30, 2021, net of the IFRS 16 effect of Euro 9.7 million, was Euro -46.5 million, compared to Euro -74.7 million at June 30, 2020 (Euro -51.4 million at December 31, 2020). The reduction in the net financial position compared to H1 2020 was mainly due to: the positive effect of higher EBITDA and the change in working capital on operating cash generation, the containment of CAPEX, a decrease on 2020 of the net cash out on dividends (Ariafina) and to a cash-in of approx. Euro 2.0 million from the sale of a non-strategic asset, following the reorganisation of Elica's business model on the Chinese market. These positive effects were partially offset by the impact (in June 2021) of the payment of the initial tranche for the acquisition of the companies E.M.C. S.r.l. and CPS S.r.l., with closing on July 2, and the cash out for the non-competition agreement signed with the preceding Chief Executive Officer.

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