MARR S p A : Analysts' Presentation - First Quarter 2023 Results (speech translation and Q&A summary)

CONFERENCE CALL 12 May 2023

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 1Q 2023 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 first quarter 2023, reserved for investors, analysts and banks.

Before giving way to the CEO Francesco Ospitali and Pierpaolo Rossi responsible for Finance, Administration and Control 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;
• the presentation is expected to last about half an hour. We will try to be brief and leave more time for your questions.
• lastly, I would remind you that on Monday 15 May, 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)

Thank you Antonio and good afternoon to you all

We will begin with slide 3 and a summary of the main consolidated economic and financial figures for the first quarter of 2023.

Regarding the total consolidated revenues, the first quarter which we remind is of low seasonality and therefore of lesser relevance on the results for the entire year, closed with 426.6 million Euros, an increase compared to 325.8 million in the same period in 2022, the latter figure having been affected by the trend in the contagions during the first part of the quarter.

The total consolidated revenues in the first quarter of 2019 (pre-pandemic) had been 333.4 million Euros.

The trend in revenues in the first quarter of 2023 was affected by the ongoing inflationary trends in the foodservice sector, which have been more accentuated since the second quarter of 2022.

It must be noted that the total consolidated revenues in the last 12 months, from 1 April 2022 to 31 March 2023, and thus without the impact of the pandemic, have exceeded the threshold of 2 billion Euros, reaching 2,031.3 million Euros.

The operating profitability improved, with the consolidated EBITDA in the first quarter of 2023 amounting to 14.8 million Euros compared to 5.1 million in 2022; the EBITDA had been 17.3 million Euros in the first quarter of 2019.

The EBIT for the period amounted to 6.2 million Euros compared to -2.5 million in the first quarter of 2022; it had been 10.7 million Euros in the first quarter of 2019.

At the end of the first three months of 2023, the Net Result, which is affected by the increased net financial charges as a result of the increase in the cost of borrowing in the second half of 2022, amounted to 1.5 million Euros, compared to losses of 2.9 million in the first quarter of 2022.

The Net Trade Working Capital as at 31 March 2023 amounted to 233.5 million Euros, and the increase compared to 216.4 million at the end of the first quarter of 2022 is correlated to the increase in revenues.

4) We will now pass on to slide 4) and the revenues from sales.

With total revenues of 426.6 million Euros, the revenues from sales, and thus excluding the contribution of the other revenues, in the first quarter of 2023 amounted to 420.0 million Euros compared to 321.7 million in the same period of 2022 and 329.3 million in the pre-pandemic period in 2019.

Sales to clients in the Street Market and National Account segments in the first quarter of 2023 amounted to 373.0 million Euros, and in comparison with 268.1 million in 2022 (+39.1%), benefit from the contribution of approximately 2.4 million of the company Frigor Carni S.r.l., consolidated on 1 April 2022; the comparison with 272.8 million Euros in the first quarter of 2019 must take into account that the sales in 2023 also include 11.6 million Euros from Verrini, consolidated on 1 April 2021.

The increase in sales to the Street Market and National Accounts compared to the first quarter of 2022 represents a further over-performance compared to the reference market trends.

On the basis of the findings of the Confcommercio Studies Office (Survey no. 4, April 2023), consumption by quantity, excluding the inflationary component, in "Hotels, meals and out-of-home consumption" in Italy in the first three months of 2023 increased by +9.7% compared to the same period in 2022.

Sales to clients in the Wholesale segment (almost entirely frozen seafood to wholesalers) in the first quarter of 2023 amounted to 47.0 million Euros and, compared to 53.6 million in the same period of 2022, were affected by the temporary unavailability of caught seafood products which characterised the second half of 2022 and also the first months of 2023.

We will now pass on to slide 5) and the analysis of the Gross Margin.

5)

The already mentioned inflationary dynamics affecting the foodservice sector and most of the categories of products sold by MARR became even more evident starting in the second quarter of 2022, with different effects, in terms of the pass-through of the price increases, on the single client segments.

The line graphs in the slide regarding the trend of the gross margin in terms of Euros/kg with respect to the pre-pandemic 2019 status for the main Street Market segment and for all of the sales highlight a further increase in the first quarter of 2023, confirming the sequential improvement from the last quarter.

The process of adjusting the sale prices to the increase in the purchase costs of the products shows that the best progress was again made in the Street Market segment in the first quarter of 2023. However, the comparison with the fourth quarter of 2022 shows a reduction of the gap in terms of the gross margin in Euros/kg - again measured in comparison to 2019 - between the contribution of the sales of the Street Market segment and the total sales. This has occurred despite the reduced incidence of sales in the Street Market segment in the first quarter of 2023 compared to the fourth quarter of 2022. This result confirms that the recovery trend is also ongoing in the other segments, including the National Account segment that has been managed more selectively.

I will now leave the floor to Pierpaolo for the analysis of the financial figures.

Pierpaolo Rossi - Responsible for Finance, Administration and Control

6)

Thank you and good afternoon to you all.

We are now on slide 6) and the analysis of the income statement for the first quarter of 2023 compared to the same period in 2022.

As regards the increase in total revenues and the improvement in the gross margin compared to the first quarter of 2022, these are influenced respectively by the inflation in food prices and the pass- through process, as commented previously.

With regard to the operating costs, it can be seen that the reduction of the incidence of service costs compared to 2022 is also due to the greater operating leverage linked to the increase in revenues and a reduction in energy tariff costs.

As a result of the increase in revenues, of the improvement of the initial margin and of the reduction of the incidence of service costs, the EBITDA at the end of the first three months of 2023 amounted to 14.8 million Euros, an improvement compared to 5.1 million in the same period of 2022. The EBITDA had been 17.3 million Euros in the first quarter of 2019.

The amortizations are stable, while the "Provisions" amounted to 3.7 million Euros, and its increase compared to 2.7 million in the first quarter of 2022 is mainly due to the portion regarding the allocation to the provision for bad debts, the increase of which is correlated to the increase in sales. In any event, the incidence of the provision for bad debts on the revenues remains substantially stable and prudent.

The EBIT for the period thus amounted to 6.2 million Euros compared to -2.5 million in the first quarter of 2022 (10.7 million Euros in the first quarter of 2019).

It must also be highlighted that in the first three months of 2023, the operating profitability showed a recovery in terms of absolute value compared to pre-pandemic 2019 levels.

At the end of the first three months of 2023, the Net Result, which is affected by the increased net financial charges as a result of the increase in the funding cost in the second half of 2022, amounted to 1.5 million Euros, compared to losses of 2.9 million in the first quarter of 2022.

7)

We will now pass on to slide 7) and some comments on the Net Trade Working Capital as at 31 March 2023.

The Net Trade Working Capital as at 31 March 2023 amounted to 233.5 million Euros, and the increase compared to 216.4 million at the end of the first quarter of 2022 is correlated to the increase in revenues.

However, it can be seen that the number of days of the cash conversion cycle has improved compared to both 31 March 2022 and the pre-pandemic figure as at 31 March 2019, thanks especially to the reduction in number of DSO compared to both 2022 and 2019.

As regards the increase in inventory as at 31 March 2023 compared to 2022, this is also affected by the inflationary dynamics, and in any event, the number of days of inventory has improved compared to 31 March 2022.

8)

The next slide, number 8, contains some details on the financial debt.

Net of the effects of the application of accounting standard IFRS 16, the Net Financial Position (NFP) at the end of the first quarter of 2023 amounted to 192.3 million Euros, with a difference of 65 million compared to 127.3 million as at 31 March 2022. The NFP as at 31 December 2022 was

138.3 million, with a delta of 71.7 million compared to the previous reporting period, when the net debt pre- IFRS 16 was 66.6 million. The NFP net of the effects of IFRS 16 as at 31 March 2019 had been 169.4 million Euros.

The net financial debt as at 31 March 2023 including the effects of IFRS 16 amounted to 270.6 million Euros compared to 199.7 million at the end of the first quarter of 2022 and 217.6 million as at 31 December 2022 (141.4 million as at 31 December 2021). The net financial debt as at 31 March 2019 had been 227.0 million Euros.

As regards the composition of the gross debt, net of the IFRS 16 component, split by maturity and between fixed and variable rate portions, it can be seen that the fixed rate portion amounted to 137.5 million Euros and represents about 38% of the total gross debt.

I will now give the floor to Antonio.

9)

Thank you Pierpaolo.

We are now on slide 9), which summarises the main events after the end of the first quarter of 2023.

The Shareholders' Meeting of 28 April 2023 approved the distribution of a gross dividend of 0.38 Euros per share with "ex-coupon" (no. 18) on 22 May 2023, record date on 23 May and payment on 24 May. The profits not distributed, the entity of which will be determined on the basis of the treasury shares in the portfolio when the coupons are distributed, will be allocated to the Extraordinary Reserve.

MARR as of today holds in its portfolio 557,210 treasury shares, amounting to approximately 0.84% of the share capital.

The Shareholders' Meeting on 28 April 2023 resolved, with regard to the end of the term of office of the corporate bodies, to appoint the Board of Directors (with the number of members remaining 7, with 4 independent directors, Andrea Foschi as Chairman and Francesco Ospitali confirmed as Chief Executive Officer) and the Board of Statutory Auditors, that will remain in office for three business years until the Shareholders' Meeting for the approval of the financial statements for 2025.

The Shareholders' Meeting also revoked, for the unexecuted part, the authorization for the purchase, sale and disposal of treasury shares of the Company granted by resolution of the Shareholders' Meeting on 28 April 2022 and at the same time approved a new authorization for the purchase, sale and disposal of treasury shares of the Company according to the terms and conditions set out in the resolution proposal approved by the Board of Directors on 14 March 2023 and illustrated in the report available on the Company's website at www.marr.it in the governance/AGM section.

I will now give way again to the Chief Executive Officer Francesco Ospitali.

10)

Thank you Antonio.

Lastly, we are on slide 10) and some comments on current trading.

The trend of sales to Street Market and National Account clients in April is consistent with the growth objectives for 2023 and confirms the progressive recovery of margins that had already been highlighted in the first quarter of 2023. In this respect, it must be reminded that the first quarter is characterized by a low seasonality and therefore is less representative in relation to the second and third quarters. The results for April have been achieved in a context of out-of-home food consumption that benefitted from the positive trend in both overseas and domestic tourism during the Easter festivities and the end of month extended weekends.

As regards the sales of frozen seafood products to Wholesale clients, in the light of the recent fishing campaigns, it is expected that there will be a recovery in the coming months after the unavailability of seafood products that characterised the second half of 2022 and the first months of 2023.

As regards the procurement markets, it is expected that the prices of food products may stabilise over the coming months, with possible trading down phenomena for out-of-home food consumption differing by client segment.

Besides, the market is still rewarding the proposal of innovative products and services, in which MARR continues to invest its energies, also with targeted initiatives (e.g. the revamping of the product line dedicated to the specific moment of consumption of the "Pizza").

The entire organization is also involved in policies aimed at recovering operating profitability, along a path which, in terms of market context, management of the gross margin and cost control, is expected on the basis of the trend in the first four months to allow to approach the pre-pandemic EBITDA level in terms of absolute value already during the current year.

The organization is also focusing significantly on containing the levels of absorption of working capital in order to attenuate the cost of its financing.

We have now finished our presentation and will take any questions you may have.