The Board of Directors of Elica S.p.A. Approves 2018 Consolidated Results: Further Profitability and Net Financial Position Improvement

PRESS RELEASE

ELICA S.p.A. BoD APPROVES 2018 CONSOLIDATED RESULTS

AND 2018 SEPARATE FINANCIAL STATEMENTS

FURTHER MARGIN GAINS

AND NET FINANCIAL POSITION SIGNIFICANTLY IMPROVES

2018 consolidated financial highlights:

• • Revenue: Euro 472.4 million (Euro 117.3 million in Q4 2018), +2.2% on same period of previous year (net of currency effect and changes to consolidation scope1 (-1.4% reported);

• • Own brand product sales, mainly the Elica brand, continue to grow (+12% at like-for-like exchange rates), with contribution to cooking revenue up to 51% in Q4 2018;

• • OEM revenue, mainly in EMEA, again impacted by forecast lower market demand in the area and sales numbers of some of the main segment customers;

• • Adjusted EBITDA2: Euro 40.0 million, up 8.5% (80bp) on 2017 (Euro 36.8 million); revenue margin rises to 8.5% from 7.7% in the previous year, further improving in the fourth quarter to 9% on revenue (Euro 10.5 million); this growth stems from a strong product/channel mix and further cost streamlining - particularly in final quarter of the year;

• • Adjusted EBIT2: Euro 19.8 million, up 21.1% on 2017 (Euro 16.3 million), with revenue margin of 4.2% significantly improving on 3.4% in 2017;

• • Adjusted Net Profit attributable to the Group2: Euro 7.3 million, considerably up on Euro 4.7 million in 2017;

• • Net Financial Position: Euro 56.3 million, compared to Euro 69.3 million at December 31, 2017, featuring considerably improved operating cash of Euro 39.5 million - more than offsetting investments and the benefit from the sale of 33% of the Indian subsidiary in the third quarter;

• • Motions on the profit for the year;

• • Motions on the 2016 - 2018 Phantom Stock Plan;

• • Calling of the Shareholders' Meeting and approval of the illustrative reports on matters on the Agenda.

• 1 Net of the contribution of the German subsidiary Exklusiv-Hauben Gutmann, sold on 28 August 2017.

• 2 Net of the extraordinary accrual of Euro 11.3 million in 2018 (of which Euro 10.2 million EBITDA effect and Euro 8.3 million net of the tax effect), considered necessary in view of the settlement stipulating mutual positions on the insolvency declaration of Exklusiv-Hauben Gutmann GmbH, in full and final settlement of all claims.

Milan, March 7, 2019 - The Board of Directors of Elica S.p.A., the parent of a Group that is the leading manufacturer of kitchen range hoods, has today approved the 2018 consolidated results at December 31, 2018 and the statutory financial statements at December 31, 2018, prepared in accordance with IFRS, in addition to the Directors' Report.

***

FY 2018 Consolidated revenue

In 2018, Elica returned Consolidated revenue of Euro 472.4 million, up 2.2% on 2017 (-1.4% reported), net of the currency effect and the changes to the consolidation scope1, with the sale of the German subsidiary Exklusiv-Hauben Gutmann on August 28, 2017.

The market in the fourth quarter saw a turnaround on preceding quarters, with demand up 4.6%, resulting in an upward revision in 2018 forecast demand to 1.4% on the previous year. This was principally driven by the Asian market, particularly India (+8.9% in 2018) and China, which in the final quarter of the year welcomed a return to growth.

In 2018, net of the currency effect and at like-for-like consolidation scope, own brand product sales rose 12% (10% in Q4 2018), with gains particularly in India, Russia and Western Europe (Germany) more than offsetting the 4.5% OEM revenue contraction on the previous year (-10.7% in Q4 2018).

The cooking segment contribution to own brand product sales rose to 49% in 2018 and was 51% in the fourth quarter of the year, confirming the Group's strategy to increasingly focus on this product category.

The Motors business, representing 13% of turnover, reported a 2% revenue contraction in 2018, in line with the general OEM sector in the EMEA region and weaker demand - particularly in Turkey.

Profitability - FY 2018

Adjusted EBITDA2 of Euro 40.0 million was up 8.5% on 2017 (Euro 36.8 million), with a revenue margin of 8.5% significantly improving on 7.7% in the previous year and rising to 9% in the fourth quarter. The improving operating margin benefited from higher prices and the improved product/channel mix (growth of own brand sales), which more than offset increasing raw material prices and brand and new product promotion costs and reduced OEM sales, in addition to further cost streamlining in the final quarter of the year.

The Group made an extraordinary accrual of Euro 11.3 million in 2018, of which Euro 4 million in the first half of the year (Euro 8.3 million net of the tax effect), considered necessary in view of the opening of preliminary voluntary insolvency proceedings at the German ex-subsidiary Exklusiv Hauben Gutmann GmbH, against whom Elica S.p.A. has a non-current commercial receivable, arising before the disposal on August 28, 2017. This transaction definitively concludes all disputes between the two companies, excluding further impacts on future accounts.

1

Net of the contribution of the German subsidiary Exklusiv-Hauben Gutmann, sold on August 28, 2017.

2 Net of the extraordinary accrual of Euro 11.3 million in 2018 (of which Euro 10.2 million EBITDA effect and Euro 8.3 million net of the tax effect), considered necessary in view of the settlement stipulating mutual positions on the insolvency declaration of Exklusiv-Hauben Gutmann GmbH, in full and final settlement of all claims.

The Adjusted EBIT2 of Euro 19.8 million grew 21.1% on Euro 16.3 million in 2017. This result reflects the business dynamics outlined above.

Financial charges of Euro 4.1 million were significantly down on Euro 5.2 million in 2017, thanks to lower interest on the improved net financial position, the renegotiation of the medium-term debt and reduced coverage costs and currency losses.

The Adjusted Net Profit attributable to the Parent 2of Euro 7.3 million was up on Euro 4.7 million for 2017, thanks principally to the developments outlined above. The value of Minorities was Euro 3.3 million, compared to Euro 1.2 million in 2017. This increase mainly relates to revenue and EBITDA growth in India and the deconsolidation of 30% of the losses of the Chinese subsidiary, present in the first 8 months of 2017.

2018	% revenue	2017	%	18 Vs 17%
In Euro thousands	revenue
Revenue	472,387	479,305	(1.4%)
Adjusted EBITDA*	39,973	8.5%	36,840	7.7%	8.5%
EBITDA	29,818	6.3%	34,521	7.2%	(13.6%)
Adjusted EBIT*	19,771	4.2%	16,324	3.4%	21.1%
EBIT	8,539	1.8%	14,005	2.9%	(39.0%)
Net financial charges	(4,053)	(0.9%)	(5,242)	(1.1%)	22.7%
Subsidiary disposal charges	-	0.0%	(3,908)	(0.8%)	100.0%
Income taxes	(2,172)	(0.5%)	(3,463)	(0.7%)	37.3%
Profit from continuing operations	2,314	0.5%	1,392	0.3%	66.2%
Adjusted Profit for the year *	10,593	2.2%	5,919	1.2%	79.0%
Profit for the year	2,314	0.5%	1,392	0.3%	66.2%
Profit attribut. to the Parent - Adjusted*	7,318	1.6%	4,693	1.0%	56.0%
Profit/(loss) attributable to owners of the Parent	(961)	(0.2%)	166	0.0%	(678.9%)
Basic earnings per share on continuing operations and
discontinued operations (Euro/cents)	(1.55)	0.27	(674.1%)
Diluted earnings per share on continuing operations and
discontinued operations (Euro/cents)	(1.55)	0.27	(674.1%)
(*) See Definitions and Reconciliations

2 Net of the extraordinary accrual of Euro 11.3 million in 2018 (of which Euro 10.2 million EBITDA effect and Euro 8.3 million net of the tax effect), considered necessary in view of the settlement stipulating mutual positions on the insolvency declaration of Exklusiv-Hauben Gutmann GmbH, in full and final settlement of all claims.

Statement of Financial Position

The Net Financial Position at December 31, 2018 was Euro 56.3 million, improving on Euro 69.3 million at December 31, 2017, thanks to the sale of 33% of the Indian subsidiary and a generation of operating cash which offset the major investments in support of development.

Operating activities in 2018 generated cash of Euro 39.5 million, compared to Euro 34.6 million in 2017 (+14.1%) - generating in fact stronger cash than investing activities.

In Euro thousands

Cash and cash equivalents

Finance leases and other lenders Bank loans and borrowings Current loans and borrowings

Finance leases and other lenders Bank loans and borrowings Non-current loans and borrowings

Net financial position

Assets for derivatives

Liabilities for derivatives (current)

Liabilities for derivatives (non-current)

Net Financial Position - Including Derivatives Effect

Dec 31, 18	Dec 31, 17
35,612 0 (37,792)	34,873 0 (57,040)
(37,792)	(57,040)
0 (54,102)	(33) (47,121)
(54,102)	(47,154)
(56,282)	(69,321)
513 (1,737) (120)	1,014 (749) (75)
(57,626)	(69,132)

Managerial Working Capital on annualised revenue of 3.7% reduced on 6.0% in 2017.

In Euro thousands	Dec 31, 18	Dec 31, 17
Trade receivables	51,192	75,923
Inventories	76,196	73,298
Trade payables	(109,916)	(120,541)
Managerial Working Capital	17,472	28,680
% annualised revenue	3.7%	6.0%
Other net receivables/payables	(10,801)	(14,682)
Net Working Capital	6,671	13,998
% annualised revenue	1.4%	2.9%
4

2018 Separate Financial Statements of Elica S.p.A.

In 2018, company revenue decreased 1.10% on 2017. The decrease mainly follows a drop in B2B channel demand, particularly in the fourth quarter of 2018 and partly offset by own brand product sales growth.

Adjusted EBITDA of Euro 13.9 million rose 6.5% on Euro 13.0 million in 2017, despite the drop in revenue, owing to the own brand sales growth strategy and the improved margin on the new products distributed in 2018.

EBITDA in 2018 of Euro 3.7 million was down 65.9% on 2017, impacted by the extraordinary accrual of Euro 10.2 million for the settlement with the German former subsidiary Exklusiv Hauben Gutmann GmbH, from whom Elica S.p.A. had a non-current commercial receivable.

Net interest expense decreased on 2017 by 26.52%, following the improvement in the net financial position and the renegotiation of the medium-term debt.

The 2018 Profit was Euro 0.5 million, compared to a loss of Euro 22.1 million in 2017 and was impacted by three main factors: the higher margin on new products distributed in 2018, the gain of Euro 8.4 million thanks to the sale of 33% of the Indian subsidiary to Whirlpool of India Ltd in September 2018 and the impact from the settlement with the German former subsidiary Exklusiv Hauben Gutmann GmbH.

Managerial Working Capital of 0.84% significantly reduced on December 2017, mainly due to the decrease in Trade receivables from third parties.

The Net Financial Position improved from a net debt of Euro 69.6 million at December 31, 2017 to Euro 58.9 million at December 31, 2018, mainly due to the sale of 33% of the Indian subsidiary to Whirlpool of India Ltd in September 2018.

Income Statement

In Euro thousands	2018	2017	18 Vs 17%
Revenue Adjusted EBITDA revenue margin EBITDA revenue margin EBIT revenue margin Net interest expense revenue margin Dividends from subsidiaries revenue margin Write-downs of investments in subsidiaries revenue margin Exchange rate gains/losses revenue margin Income/(Charges) from subsidiary disposal revenue margin Profit/(loss) for the year revenue margin	359,074 13,876 3.86% 3,721 1.04% (9,059) -2.52% (989) -0.28% 5,395 1.50% (5,000) -1.39% 399 0.11% 8,432 2.35% 529 0.15%	363,084 13,025 3.59% 10,905 3.00% (296) -0.08% (1,346) -0.37% 3,021 0.83% (1,980) -0.55% (2,241) -0.62% (21,793) -6.00% (22,112) -6.09%	-1.10% 6.53% -65.88% -2960.32% 26.52% 78.57% -152.53% 117.82% 138.69% 102.39%

18 Vs 17%