ICF : Industrie Chimiche Forestali SpA - Investor Presentation February 2021 ( 982,74 KB )

We are invisible!

But we are everywhere!

Industrie Chimiche Forestali S.p.A.

Investor presentation

February 2021

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Disclaimer

This document has been prepared by Industrie Chimiche Forestali S.p.A. ("ICF").

This document does not constitute or form part of any offer or invitation to sell, or any solicitation to purchase any

shares or any other kind of financial instruments issued or to be issued by ICF.

Not all the information contained and the opinions expressed in this document have been independently verified. In particular, this document contains forward-looking statements and declarations of pre-eminence that are based on current estimates and assumptions made by the management of ICF to the best of their knowledge. Such forward- looking statements and declarations of pre-eminence are subject to risks and uncertainties, the non-occurrence or

occurrence of which could cause the actual results including the financial condition and profitability of ICF to differ

materially from, or be more negative than, those expressed or implied by such forward-looking statements and declarations of pre-eminence. Consequently, ICF can give no assurance regarding the future accuracy of the estimates of future performance set forth in this document or the actual occurrence of the predicted developments.

The data and information contained in this document are subject to variations and integrations. Although ICF reserves the right to make such variations and integrations when it deems necessary or appropriate, ICF assumes

no affirmative disclosure obligation to make such variations and integration and no reliance should be placed on the

accuracy or completeness of the information contained in this document. To the extent permitted by applicable law, no person accepts any liability whatsoever for any loss howsoever arising from the use of this document or of its contents or otherwise arising in connection therewith.

This document has been provided to you solely for your information and may not be reproduced or redistributed, in whole or in part, to any third party.

By accepting this document, you agree to be bound by the foregoing limitations.

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Industrie Chimiche Forestali

ICF is a leading player in the technical adhesive and fabric business with the mission to pursue organic expansion of its operations while acting as an aggregator of companies operating in complementary businesses exploiting the robust Free Cash Flow generation

Why invest in Industrie Chimiche Forestali

Management
Equita;	ICF; 3.6%
1.9%
PEP;	Amundi;
5.6%
4.7%

Shareholder

structure

11. A public company.The market is the dominant shareholder

22. More than 100 years of historyin the chemical industry

33. Leading player in Technical Adhesive nichewith

V.F. Adhesives

(First Capital);

25.0%

Other Floating; 59.3%

expertise in adhesives and technical fabrics for the

Footwear, Leather Goods, Automotive, Packaging and

Upholstery sectors

44. Export oriented

55. Substantial Free Cash Flow generation

66. Strong focus on sustainability and environmental issues

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Industrie Chimiche Forestali: a 100-year History

		The production of
Industrie Chimiche Forestali stops	The production of special	formaldehyde as a derivative
impregnated fabrics for the	of pyroligneous begins
producing basic chemicals and
footwear industry starts
finally focuses on the upstream
segment of the footwear industry		'20s	1918
	'30s

1941

'50s

1983

The production of adhesives begins

Forestali relocates production from the plant in Sesto S. Giovanni to the new plant in Marcallo con Casone in the province of Milan

1984

1987

2005

The Forestali activity is enhanced

with the establishment of the

Società Italiana Resine SIR for the production of phenolic resins in Sesto S. Giovanni

ICF completes the Business Combination with EPS Equita PEP SPAC (then renamed ICF Group), listed on the AIM Italia exchange

Industrie Chimiche

Forestali is founded and starts with the extraction of pyroligneous acid from wood

ICF Group merges into

Industrie Chimiche

Forestali, now listed on the AIM Italia Exchange

Adhesives for Furniture and Boating are
formulated and introduced into the business
network: Durabond brand is born.	ABC (Adhesive Based Chemicals) begins its own
Besides the formulation of high-quality and	activity in 2005, within Forestali, as a company fully
dedicated to the polyurethane adhesives industry for
ease of use adhesives, already existing
industrial applications (Automotive, flexible
brands are purchased
packaging, graphic arts)

May 2018	Aug. 2020

EPS

EQUITA PEP SPAC

The «Invisible Power»

	Adhesives:
	•	Solvent-based
Footwear &	•	Solvent-free
Leather	•	Water-based

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	Counter	The
Toe puff
Upper	«Invisible Power»
	Insole
	Sole Unit

Goods

Technical fabrics:

• Toe-puff, counters

/ stiffeners

• Linings and

reinforcing

Technical fabric is used in the toe puffs and counters of the shoe. Adhesive is used to put together mainly uppers, insoles and sole units

Technical fabric goes	Adhesive	is	used
to reinforce the handle,	to glue	different	Adhesives have a
bottom and sides of	components	of the	negligible impact
the bag. Adhesive is	upholstery
		on cost of
used to glue the linings
			production of the

final article…

Automotive

	Adhesives:
	•	Solvent-based
	•	Solvent-free
Packaging	•	Water-based

The layers of the headliner in a vehicle. It can be applied to light vehicles (passenger and commercial)

Adhesives are used to glue

…But a relevant

impact on the

performance. A

low quality

adhesive can lead to serious issues and costs (eg. destroyed shoes or stained car roof)

The	layers	of films	The plastic cover of	The pins used in the
comprising the package	magazines and	staplers and similar
for	various	applications	periodicals	objects
(food and non food)

Product quality,

customized

solutions and

reliability are key

drivers to serve

clients

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Industrie Chimiche Forestali: a Leading Player in the Technical Adhesive World

Core activity	Manufacturing of
adhesives and technical
	fabrics
	Footwear
	Leather Goods
End market	Automotive
	Packaging
	Upholstery
	Adhesives (water-based,
	solvent-free, solvent-
Key products	based)
	Technical Fabrics
	(impregnated, coextruded)

Revenues

2020

€60.5m

129(1)

employees

ICF in numbers(1)

EBITDA		EBITDA Margin		NFP
2020			2020

		11.6%		€3.5m
€7.0m		(2020)
	13.1%		0.5x leverage on
			2020 EBITDA
		(Average '15-'20)

More than	17,600	2.2
million
1,800	Tons
meters of
Adhesive/
products	technical
Year
	fabrics

HQs	Marcallo con Casone,	•	22 R&D
Milan (Italy)		employees
	(2)	•	65,000 sqm. plant

• 3 labs

• More than 800 industrial clients

• 27 new products per month

Note: (1) As of 31/12/2020, based on preliminary results still non audited

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A Balanced Portfolio with a Global Exposure

The company is export-oriented, with a balanced exposure to the Automotive, Footwear and Packaging sectors

Geographic Area

America	Africa
Middle
12%	East
	13%
	East
	Europe
	13%
€60m
Italy
34%	Europe
	CEE
	19%
Far East
	9%

Business Line

ABC Division			Forestali Division
44%			56%
Packaging
	10%	Footwear -
			Adhesives
			22%
Automotive	€60m	Other	-
34%			Adhesives
		12%
		Footwear
			Fabrics
	Other		15%
	7%

		Forestali manufactures both
Export makes up for c. 66% of		adhesives (c. 34%) and fabrics (c.
revenues for 2020		15%), while ABC manufactures
		adhesives only

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From Italy to the rest of the world

From the headquarter of Marcallo con Casone ICF reaches 80 countries all over the world

Albania	Czech Republic	Hungary	Portugal	Sweden
Austria	Denmark	Latvia	Romania	Switzerland
Belarus	Estonia	Lithuania	Russia	Turkey
Benelux	France	Macedonia	Serbia	UK
Bulgaria	Finland	Malta	Slovakia	Ukraine
Croatia	Germany	Norway	Slovenia
Croatia	Greece	Poland	Spain

North

America

USA

South

America

Brazil

Chile

Colombia

Ecuador

Mexico

Europe

Marcallo con

Casone

Africa,

Middle East

Benin

Camerun

Egypt

Gabon

Gambia

Ghana

Guinea

Guinea Bissau

Israel

Ivory Coast

Jordan

Lebanon

Mali

Mauritania

Mauritius

Morocco

Far East

Bangladesh

China

Hong Kong

India

Japan

Pakistan

Philippines

South Korea

Thailand

Vietnam

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Expansion mainly based on Export

Historically, sales have been growing at mid single digit since 2009 with export accounting for c. 66% EBITDA margin in the double-digit area in the last 7 years including 2020 despite the Covid-19 crisis

100 € million

90

Guido Cami and Massimo

80 Rancilio appointed as CEO

Marcello Taglietti

30%

appointed as COO

25%

70

60

and CFO, respectively

20%

50

15%

40

30

20

10

10%

5%

-													0%
2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020
			Domestic		Export	EBITDA margin	Average EBITDA margin (2009-2020)
	Export (% on revenues)

59% 62% 65% 69% 65% 65% 65% 65% 68% 69% 67% 66%

Domestic (% on revenues)

41% 38% 35% 31% 35% 35% 35% 35% 32% 31% 33% 34%

Source: Company financial statements

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Material Free Cash Flow Generation

Cumulative Free Cash Flow Generation above €41.6m over the last 9 years

Cash Flow

3.4

6.5

2.0

2.9

Adjusted Free generation

8.9

6.3

5.4

3.4

2.7

41.6

2012

2013

2014

2015

2016

2017

2018

2019

2020

Total

Comment

Over the last 9 years, ICF generated a cumulated Free Cash Flow of €41.6m, which were used also to sustain an

extraordinary capex of €13m in 2013, a €21m re-leverage in 2016, €2.6m of buy-back from May 2019 and €1.0m of

extraordinary capex in 2020

2020 financial highlights ICF

	€m	2019	2020*
1	Revenues	71.7	60.5
2	EBITDA	9.1	7.0
3	Margin (%)	12.6%	11.6%
	Adj. EBIT	4.5	4.4
	Margin (%)	6.3%	7.3%
4	Net Debt	4.4	3.5
	Net Debt/EBITDA	0.3x	0.5x

1. In 2020, ICF recorded around €60.5m in revenues. Volumes decreased by -20% in the automotive business, -12% in the manufacturing (mainly footwear and leather goods) and -10% in the packaging

2. EBITDA decreased to around €7.0m. The decline in results was almost entirely attributable to Q2 and more specifically to the collapse in sales in the two months of April and Maywhen most of the global clients were closed because of the lockdown. The remaining part of the year had a quite regular level of sales and margins despite the global tough scenario

3. EBITDA margin confirmed at double digit level(11.6%) also thanks to management actions for efficiency enhancement while tackling Covid-19 emergency

4. Net debt decreased by almost €1.0m but the actual FCF was around €3.5m once considering around €1.4m of buy-back of shares and an extra investment in an industrial building (c. €1.0m) once rented

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Revenues

20

10

0

Q1

Q2

Q3

Q4

EBITDA

3

2

1

0

Q1

Q2

Q3

Q4

EBITDA margin

20% 15% 10% 5% 0%

Q1

Q2

Q3

Q4

2020 2019

Note: (*) Based on preliminary results still non audited

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Recent events: COVID-19 crisis and new product lines

Guido Cami, CEO and Chairman of Industrie Chimiche Forestali S.p.A., commented:

"2020 was a year full of obstacles that put a strain on companies globally. Thanks to the contribution of all our colleagues, we tackled the difficulties that emerged, consolidating a good overall result both for the economic- financial aspects and for the social and entrepreneurial ones. We have never stopped production and customer service, we have not made use of temporary layoff, we have paid all suppliers, services and salaries. We have invested in machinery, plants and buildings, developed new product lines for the "common safety" and vigorously promoted activities aimed at environmental, ethical and economic sustainability. As usual for us

since 1918"

During the pandemic, ICF has confirmed its innovative spirit and its R&D capacities by developing, in record time, new product lines including hand sanitizers (VIP & TOP)as well as surface sanitizers (GULP and WOW)

and SMS fabrics (Freedom M1) for the production of protective masks

in collaboration with the Finnish multinational corporation Ahlstrom Munksjö.

Lastly, the Company launched its e-commerceplatform and managed to

obtain several product certifications, including FSC®, GRS, OK-

Biobased and OEKO TEX Std 100

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Sustainability at ICF -www.investors.forestali.it/sostenibilità

Sustainability and social and environmental issues have been part of ICF's culture ever since 1998, when we joined the "Responsible Care" program, promoting the Sustainable Development of the Chemical Industry worldwide according to values and behavior oriented towards health, safety and the environment

ICF's commitment to ESG aspects

Products: we offer to our clients increasingly eco-friendlyproducts by replacing hazardous substances present in their

formulation and developing eco-friendly and low Volatile Organic Compound adhesives

People: we strongly believe in the value of our people to whom we guarantee the opportunity of a qualified job and on which we invest to enhance their talents

Safety: we operate with respect for the safety not only of our employees but also of our customers and the surrounding

population. Properly trained personnel and the development of processes and plants with high standards of quality and safety are the prerequisite that we put before any other consideration of economic opportunity

Quality: together with the preservation of the environment and safety, quality is an inseparable aspect of our

entrepreneurial activity, which is also reflected in the maintenance and continuous improvement of Management System

certifications, some of which were obtained more than twenty years ago and have therefore become a common working

method for all our employees

At Industrie Chimiche Forestali, the integration of economic, environmental and social sustainability into our business has been for years among our core priorities and thanks to that we have been able to build a competitive advantage, recognized by the market in our competitiveness as well as our dynamicity and flexibility

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ESG - Environment

ICF's commitment towards environmental issues goes beyond system certificationsand includes its daily operations, its supply chain and its overall impact on the environment. The Company is in fact compliant with system certifications such as the ISO 9001, the ISO 14001, the OHSAS 18001, the EMAS, the IATF 16949 and the Modello 231

Environmental

• Compliance with the European REACH regulation(1)
• Increase in the production of water-basedand solvent-freeadhesives (50% of total production) and reduction of solvent-based
• Carbon Foot Print reduction on CO2 emissions to optimize energy consumption
• Recycling of the process wash water
• Product specific certifications:
• • Global Recycle Standard, which guarantees that products are manufactured using at least 20% recycled materials and in compliance with Social and Environmental criteria
  • Forest Stewardship Council®, which certifies that raw materials come from a responsibly managed forest and supply chain
  • OK biobased, which guarantees that renewable raw materials are being used in the production process

2019 vs. 2017

142.4 Kg

CO, NOx and VOC

-68% emissions

44.3 Kg

Consumption of	43,249 GJ
natual gas,	-18%
electricity and fuel	35,319 GJ

• Standard 100 By Oeko-tex, which assessed the absence of hazardous materials in ICF's fabrics
• Lyfe Cicle Assessment on the Fabrics product line in order to assess the environmental impacts and the emissions related to the production process

3,203 t

-18%	CO2 emissions

2,757 t

Note: (1) Registration, Evaluation, Authorization and Restriction of Chemicals (18 December 2006)

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ESG - Social and Governance - www.investors.forestali.it

Governance

ICF governance model is investor friendly and quite unique among companies of similar size listed on the AIM segment of Borsa

Italiana:

• ICF is a public company with the market being the dominant shareholder
• The BoD is composed of 7 members, of which 2 qualify as

ICF Board of Directors

Guido Cami

Giuliano Tomassi Marinangeli

independent directors (Mrs. Balzano and Mr. Rettani)	Giovanni Campolo	Marina Balzano
	Independent
• The interests of ICF top management are aligned with	Stefano Lustig	Roberto Rettani
those of the shareholders: 12 ICF managers, including the	Vincenzo Polidoro	43% of AIM listed companies featured 2 or more
	independent directors in 2019

CEO Guido Cami, hold 3.6% of the Company's share capital

Social impact

ICF supports the community by sponsoring local organizations:

• Bambini delle Fate
• Marcallo con Casone local sport team
• Mesero oratory
• Valcaselle tamburello team
• Alatha
• Magenta's hospital

Best practices

• Enviromental Report (every 3 years)
• Sustainability report in line with Global Reporting
  Initiative standards

Awards

Winner of:

AIM ESG

AIM Investor

Day 2018

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Organizational Structure and Key Management

Organizational structure with 129(1) people coordinated

by…

…an experienced management

Guido Cami Chief Executive Officer

Sales

Guido Cami

COO

Marcello

Taglietti

CFO

Massimo

Rancilio

HR

Monica

Moiraghi

CEO

Guido Cami

General Manager

Forestali de

Mexico

Teresa Navarro

• Graduated in Management Engineering at Politecnico di Milano
• Vice-Chairmanof AVISA - Federchimica (Confindustria)
• Chairman of the Adhesive and Sealant division of AVISA
• Vice-Chairmanin FEICA (European Adhesives and Sealant Association)
• 30+ years of experience in industrial companies (Pirelli, Manifattura di Legnano, Vibram, Pechiney, Crespi, Forestali)
• Expertise: Production, Logistics, Operations, R&D, Commercial, Managing Direction
• 12 years in Forestali as CEO

Marcello Taglietti Chief Operating Officer

• 30 years of experience in the Operations function (Ashland Chemicals, Air Products and Chemicals, KMG Chemicals)
• 4 years in Forestali

Massimo Rancilio Chief Financial Officer

• 21 years of experience in the Finance function (Oracle, Accenture, Hexon Specialty Chemicals, MPG Plast)
• 12 years in Forestali

Monica Moiraghi Human Resources

• 30 years of experience in the HR function
• 20+ years in Forestali

Teresa Navarro General Manager

Note: (1) As of 31/12/2020

• General Manager at Forestali de Mexico
• 21+ years in Forestali de Mexico

Industrie Chimiche Forestali S.p.A.

www.forestali.it

Headquarter in Marcallo con Casone

Via Fratelli Kennedy, n. 75

Investor relations:

Massimo Rancilio, CFO & Investor Relations Manager

[e-mail]

Please visit www.forestali.it/#ambienteto download your

copy of ICF Environmental or Sustainability Report!