MARR S p A : Analysts' Presentation - First Half 2021 Results (speech transcription and summary of Q&A)

CONFERENCE CALL 3 August 2021

The following is a free translation in English of the speech and a summary of the Q&A topics session relating to the release of MARR's 1H 2021 Results. The speech, being held in Italian, will prevail in case of discrepancy with the written free English translation.

Antonio Tiso - Investor Relator

Good afternoon and thank you for attending the MARR conference on the figures relating to the 1H 2021, reserved for investors, analysts and banks.

Before giving way to the CEO Francesco Ospitali for the presentation of the figures, I would point out that:

• as usual, we will follow the order of the slides sent to you and available in the Investor Relations section of the company website;
• we will try to be brief and leave more time for your questions;
• Pierpaolo Rossi, Director of Administration, Finance and Control is in attendance;
• lastly, I would remind you that on Wednesday 4 August, the English version of the speech and a Q&A summary will be published on the MARR website and will be available for consultation for one week.

I will now give way to the CEO Francesco Ospitali to begin presenting the figures.

Francesco Ospitali - CEO

3)

Good afternoon.

We will begin with slide 3 and some highlights of today's presentation.

• Driven by a 2nd quarter in which there was a significant recovery and which closed with a positive net result, the Company has achieved a significant growth compared to last year in the first six months, thereby confirming MARR's capacity to out-perform the market even during the recovery of consumption.
• The first two summer months (June and July) show sales already comparable with the historical ones of the pre-pandemic period. The positive trend in these two months and the strong commitment of the entire organization enable us to express a justified optimism also for the near future.
• A Senior Unsecured Notes transaction for 100 million Euros has just been finalised in the United States.
• The Board of Directors has called the shareholders' meeting for 6 September to resolve on the distribution of a gross dividend of 0.35 Euros per share.

4) We will now pass on to slide 4 and some financial highlights of this first half-year.

The graphs illustrate the growth in revenues and profitability in the first half of 2021 compared to the same period in 2020, through the changes in the first and second quarters, with the latter driving the recovery compared to last year.

In particular:

• The total Revenues increased from 447 million Euros in the first half of 2020 to 542 million in the first half of 2021, thanks to an increase of 168 million in the second quarter;
• The EBITDA, which had been 0.5 million Euros in the first half of 2020, reached 23.2 million in the first six months of 2021, with an increase in the second quarter of 2021 of 26 million compared to the same period last year;
• The pre-tax result, which at the end of the first six months of last year had been a negative 19 million Euros, increased by 26.4 million during the course of the second quarter, bringing the pre-tax result for the first half of 2021 to 1.6 million, after approximately 2.9 million in non- recurring costs regarding the second quarter of this year and linked to the bond of 2013.

The improvement concerns not only the economic components but also the balance sheet components.

As at 30 June 2021, the net trade working capital amounted to 188.9 million Euros, compared to 278 at the end of the first half of 2020, and thanks to this reduction, the net financial position as at 30 June 2021 amounted to 186.5 million compared to 262.6 million as at 30 June 2020.

Also, the net debt as at 30 June 2021 and before the effects of the application of accounting standard IFRS 16 amounted to 125.2 million Euros, all covenants having been fully respected for the period.

5)

In slide 5, we will analyse the sales in the first half of 2021, which amounted to 534.9 million Euros, a firm increase compared to 441.1 million in the first half of 2020.

This increase involved all three of the client segments and was driven in particular by the reference Street Market segment, i.e. clients in the segment of restaurants and hotels not belonging to Groups or Chains.

The recovery in the National Account segment (clients in Canteens and Groups and Chains of hotels and restaurants) was affected however by the delays involving clients in Chains and Groups. The Wholesale segment, involving the sale of seafood products to wholesalers and retailers, is still in progress.

The growth in the first six months was driven by that in the second quarter, which closed with sales of 348.7 million Euros compared to 181.4 million in the same period of 2020, and that includes a contribution of approximately 16 million Euros from the activities of Verrini, consolidated as of 1 April 2021.

Sales in the first quarter had amounted to 186.2 million Euros, thus a reduction compared to 259.7 million in the same period of 2020, which had only been impacted by the lockdown restrictions only from 10 March, while the zonal restrictions were in force for the entire first quarter of 2021.

The trend of MARR sales in the first and second quarters is in excess of that of the market performance, which on the basis of the latest Confcommercio findings (Survey no. 7 of July 2021) recorded trend variations compared to the previous year in terms of consumption (by quantity) for the item "Hotels, meals and out-of-home food consumption" of -49.8% in the first quarter and +88.5% in the second quarter. The latter value, which still keeps consumption levels significantly below those of 2019 (according to Company elaboration around -42%) is in any case extremely comforting, given that it is an obvious and significant change in trend.

MARR has thus made the most out of the opportunities that have arisen and during all phases, reinforcing its market leadership status.

This has been made possible because the Company has never altered its focus on Clients and the Market, through a clear and schematic approach and the full implementation of the pre-established guidelines by the entire organization.

The increase in sales was only partly affected by a positive price component, and only during the last few weeks of the last half year.

In this regard, it can be seen that the improvement in market conditions has led to a progressive improvement between the first and second quarters of the Euro/kg sold for clients in the Street Market and National Account segments. The Euro/kg in the second part of the half year reached levels similar to pre-pandemic ones.

As briefly mentioned, the increase in Euro/kg was more marked towards the end of the half year, and regarding June only, in which the June 2020 value was exceeded, the purely inflationary component was minimal, that of the price/mix being more marked.

6)

We will now pass on to slide 6) and the analysis of the income statement for the first half year. With sales of 534.9 million Euros, the total revenues amounted to 542 million, a significant increase compared to 447 million in the first half of 2020.

The increase in sales led also to an improvement in the first margin, which went from 17% in 2020 to 21% in 2021.

The increase in sales has enabled a greater dilution of the service costs, with a consequent reduction in their incidence on the total revenues.

The increase in the cost of labour is linked to the lesser use of the available legal tools and less leave being taken as a result of the recovery in operations.

At the end of the first six months, the EBITDA amounted to 23.2 million Euros compared to 0.5 million in the same period of 2020, and as already seen previously thanks to the contribution of the second quarter, which recorded an EBITDA of 23.1 million Euros.

The EBIT in the first half year amounted to 7.1 million Euros compared to -16.4 million in the first six months of 2020, and includes a prudential allocation to the provision for bad debts of approximately 7 million, of which 4.3 million in the second quarter.

The financial costs remain stable.

The result of the recurrent activities thus amounted to 4.5 million Euros compared to -19 million in the first half of 2020.

The pre-tax result amounted to 1.6 million Euros, and was affected by non-recurring costs of 2.9 million Euros included in the accounts for the second quarter and concerning the early termination on 23 July of the USPP bond loan in US dollars subscribed in July 2013 and with an expected expiry date in July 2023.

The repayment for a net counter-value of approximately 25 million Euros was made using the available liquidity.

The half year thus closed with net profits of 1.1 million Euros compared to the losses of 14 million in the first six months of 2020.

7) In the next slide 7), we will analyse the trade working capital and the net financial debt.

As a result of the increase in sales at the end of the first six months, all components of the trade working capital have increased compared to 30 June 2020, but as a result of the progressive normalisation of the working capital management as at 30 June 2021, the balance of the trade net working capital amounted to 188.9 million Euros, a reduction compared to both 232.4 million at the end of the previous quarter and 278 million as at 30 June 2020.

The decrease in trade net working capital has led to a reduction in the net financial position, which amounted to 186.5 million Euros after the effects of IFRS 16, compared to 235.8 million as at 31 March 2021 and 262.6 million as at 30 June 2020.

It can be seen that the increase in the sort-term portion of the debt is due to the reclassification from long to short-term of the debt concerning the early termination of the USPP loan, as previously commented on.

8)

We will now pass on to slide 8, in which we provide an update on the summary of the conditions which affected the foodservice sector in Italy from the beginning of 2020 and the related market performance compared to the pre-pandemic conditions in 2019. This update is based on the Confcommercio figures concerning the trend variations of the consumption indicator (by quantity) for "Hotels, meals and out-of-home food consumption".

The beginning of 2020 saw operations under normal conditions until the implementation of the lockdown from 10 March to 18 May, and which thus conditioned the end of the first quarter and, even more so, the second quarter.

Then, after the re-opening of foodservice activities, the tourism sector (but only the domestic component) was able to start again after 3 June, when movements between regions were allowed. The summer of 2020, although it started late, saw operations under more normal conditions, leading to a continuous and progressive recovery in out-of-home food consumption.

The worsening of the health conditions in the second half of October led to the adoption on 3 November of a dynamic system of colour-based restrictions applied on a regional basis and a nationwide curfew from 10 pm to 5 am. Specifically, in the red and orange zones, foodservice activities were limited to takeaway and home delivery only.

With the new worsening of the pandemic and the majority of Italian regions in orange or red zones, out-of-home food consumption reduced drastically.

Apart from a brief window in early February, the first quarter of 2021 was mainly under conditions imposing restrictions, in other words with most regions still orange or red zones. The first quarter was thus heavily impacted and penalised by the third wave of the pandemic and the conditions were decidedly different to those in the same period of 2020, when the effects of the pandemic were only felt from 10 March, when the first lockdown was imposed.

The situation then began to improve, with most of Italy having returned to the yellow zone by 26 April, and foodservice activities began again with table service outside until 10 pm. Since 1 June, it has once again been possible to consume food at tables indoors, and Italy reverted to the white zone (no restrictions) on 28 June.

The country as of today is still in the white zone thanks to the progress being made in the vaccination campaign, despite the spread of the so-called Delta variant.

In recent months, the market has confirmed the recovery trends, which have brought consumption figures to levels in excess of those for the same period last year, both measured with respect to pre- pandemic levels in 2019.

9)

We are now on slide 9 and some considerations on current trading.

The positive trend in the latter part of the first half year was confirmed by the sales in July, which led to the first two months of the summer season (June and July) closing with sales of 338 million Euros, a significant increase compared to the same period of 2020 and at levels approaching those of 2019, when they amounted to 344 million.

The positive trend at the beginning of the summer season does however show some differences at a territorial level. The recovery in tourist locations is currently more significant than that in the art cities and in many areas, restaurants are recording consumption (by value) that are higher than the historical for 2019.

The trend in June and July thus make the hope of a recovery in out-of-home food consumption due to holidays and tourism more realistic, which, thanks to the major efforts and professionalism of the entire organization allow to look forward to the next few months with justified optimism.

In these coming months, we can expect a greater impact of inflation, which barely affected the latter part of the first half year. However, this is a trend with regard to which MARR has taken prompt action, according to the usual approach of involving and informing clients in order to transfer it to the market. There may be some delays in this process of transferring inflation.

A brief mention must be made of the recent acquisition of Verrini, consolidated as of 1 April, which has given a positive contribution to the growth in the second quarter. This confirms MARR's capacity to quickly and efficiently integrate the assets acquired, which in the case of Verrini are part of a Market segment (especially the part concerning fresh caught seafood products) which is significantly expanding and capable of ensuring a high level of supplier/customer loyalty.

This operation will therefore contribute towards enhancing and further increasing the MARR Group's market share.

Looking forward to the coming months, we are pleased to inform you that during the autumn, MARR will publish its first Sustainability Report, a further and important step towards improving the ESG approach of the Company.

I now give the floor to Antonio Tiso, Investor Relator for the last two slides relating respectively to the recent Private Placement operation and the calling of the Shareholders' Meeting to resolve on the dividend proposal.

10)

Thank you Francesco.

In slide 10), we bring to your attention to the recent closing (on 29 July 2021) of the issuing of the Senior Unsecured Notes for 100 million Euros with Pricoa Private Capital (a US institutional investor part of the Prudential Insurance Company of America).

The maturity of the loan is 10 years and it will be paid back in 5 annual instalments starting in the sixth year after closing.

The fixed rate of the loan is 1.65% per annum and a step-up mechanism is provided for, with an increase of up to 50 basis points of the rate should the Leverage Ratio be in excess of 3.25 times as at 31 December.