Sogefi S p A : April 21, 2020 - Q1 2020 Financial Results

Q1 2020 RESULTS

Milano - April 21th, 2020

Mauro FENZI - Chief Executive Officer

Yann ALBRAND - Chief Financial Officer

Stefano CANU - Investor Relations

Agenda

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2

3

Q1 2020 Results

Covid update

Perspectives

2 I

Q1 2020 Highlights

Revenues at €350,2m

vs. €389.9m in Q1 2019

EBITDA at € 34.9m

vs. €41.3m in Q1 2019

EBIT at € 3.7m

vs. €11.3m in Q1 2019

Net Income at € -5.6

vs. € 1.6m end Q1 2019

FCF1 at -€ 0.4m

vs. €-1.6m in Q1 2019

Net debt1 at € 256.7

vs. € 256.2m end of 2019

1. FCF and Net debt excluding IFRS 16

• Down 10.2% on a reported basis and -8.8% at constant exchange rate (overperforming the market by 1591 bps)
• In YTD February at constant exchange rates +1.0%, thanks to the good performance of all geographic areas except for China, in March at -30%
• 10.0% on sales vs 10.6%in PY.
• In YTD February at 11.4% vs 9.6% thanks to Suspensions improvement, March at 6.2%
• 1.1% on sales in Q1 2020 vs 2.9% on sales in Q1 2019. Q1 2020 affected by € 5.3m of negative exchange rate effect (North and South America).
• March € -4.9m due to the higher % incidence on revenues of fixed costs and despite € 3m of first cost efficiency measures
• After tax charges for € 2.5 million vs €3.6 million in Q1 2019
• Free Cash Flow - € 0.4 million vs €-1.6m in Q1 2019
• Net debt down to € 256.7 vs € 256.2m end of 2019 and € 262.1m end March
  2019

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Revenues by Geographical Area

			reported	constant	reference	performance	weight
	Q1 2019	Q1 2020	exchange	market	vs market	based on
	change
€m			rates	production	(bps)	Q1 2020
Europe	244.3	222.4	-9.0%	-9.0%	-21.3%	1230	63.5%
North America	74.1	72.7	-1.9%	-4.0%	-10.8%	680	20.8%
South America	37.6	29.0	-22.8%	-3.1%	-16.3%	1320	8.3%
Asia	36.1	27.9	-22.7%	-22.8%	-44.7%	2190	8.0%
- of which China	17.2	11.8	-31.2%	-30.9%	-49.5%	1860	3.4%
Intercompany	(2.2)	-1.8
Total	389.9	350.2	-10.2%	-8.8%	-24.4%	1560	100.0%
					Overperforming the market by 1560
					bps due to overperformance in

Europe (new Marocco plant and

Aftermarket) and USA (new SOPs)

Source: Sogefi and IHS data. Passenger cars and Light commercial vehicles only. Europe is Europe 28 and Asia is China + India

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Revenues by Business Unit

			reported	constant	performance
	Q1 2019	Q1 2020	exchange	vs market
	change
			rates change	(bps)
€m
Air&Cooling	108.9	100.0	-8.2%	-8.7%	1570
Filtration	134.8	134.7	0.0%	1.8%	2620
Suspensions	147.0	116.3	-20.9%	-18.5%	590
Intercompany	(0.8)	(0.8)
Total	389.9	350.2	-10.2%	-8.8%	1560

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Sales by client

Q1 2019

Q1 2020

5%10%

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Q1 2020 EBIT performance breakdown - Sogefi Group - €m / % sales

3.5%	2.9%

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Improving profitability up to February

		Jan-February	%		Jan-February	%		March 2019	%		March 2020	%
		2019		2020
	TOTAL NET SALES	254.7			255.6			135.2			94.6
	EBITDA	24.4	9.6%		29.0	11.4%		16.9	12.5%		5.9	6.2%
	EBIT	4.4	1.7%		8.6	3.4%		6.9	5.1%		(4.9)	-5.2%

Profitability improvement up	March affected by Covid, the major drop
to February thanks to good	in volumes affected margin also taking
result in Europe	into account the technical time needed to
	implement cost containment actions

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Suspensions

Sales (€m)		EBIT (%)

• Down 20.9% (-18.5% at constant	• EBITDA margin up from 7.9% to
exchange)	9.4% benefiting lower material
• Nord America sales up	costs
• EBIT margin reflecting higher
• China -38.7%
incidence of depreciation
	Suspensions	9

Suspensions - Indicative steel prices evolutions €/ton

Source: Indexed number. Base is the price of the steel in EURO/tn (actual price paid by SOGEFI for one type of steel)

Suspensions10

Filtration

Sales (€m)		EBIT (%)

• Stable revenues (+1.8% at constant exchange)
• The activity recorded growth in Europe thanks to Morocco and to Aftermarket
• Sales sustainably stable in North and South America

Filtration

• Negative exchange rate effect of - € 3.2m mainly in South America
• Decline in India
• EBIT at 1.3% without Morocco start up costs

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Air & Cooling

Sales (€m)		EBIT (%)

• Down 8.2% (-8.7% at constant exchange)
• Major decline in China but overperforming the market thanks to new SOPs

• Higher EBIT in Europe was more than offset by the lower profitability in the other areas due to volume decline
• Negative exchange rate effect for € 3.3 millions (North America)

Air & Cooling

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Q1 2020 P&L - Sogefi Group - €m / % sales

	€m	Q1 2019	%		Q1 2020	%
	EBITDA	41.3	10.6%		34.9	10.0%
	EBIT	11.3	2.9%		3.7	1.1%
	Financial results	6.3	1.6%		6.8	1.9%
	Income Tax	3.6	0.9%		2.5	0.7%
	Minority Interest	1.2	0.3%		0.0	0.0%
	NET INCOME OF	0.3	0.1%		(5.6)	-1.6%
	OPERATING ACTIVITIES
	Net income from	1.3	0.3%		0.0	0.0%	Fraize plant contribution in 2019
	discontinued operations
	NET INCOME	1.6	0.4%		(5.6)	-1.6%

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Q1 2020 FCF Highlights - Cash Flow generation

• Figures excluding IFRS16

€m	Q1 2019		Q1 2020
FUNDS PROVIDED BY OPERATIONS	32.2		23.2
Working Capital	(10.6)		(2.0)
				of which € 4.3m for new
Tangible Capex	(8.9)		(11.1)
				plants
Intangibles & IFRS15	(17.5)		(14.3)
Others	3.2		3.8
FREE CASH FLOW (NET)	(1.6)		(0.4)
NET DEBT	262.1		256.7

Factoring at € 96.3m end March 2020 vs € 94.2m end 2019 vs € 114.1m end March 2019

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Financial Position

• In November Sogefi completed the issuance of a € 75m non-convertible unsecured bond (coupon 3%, mature in November 2025)
• At March 31, 2020, the Group has financing in excess for € 298 million (of which €
  125 banks lines not utilized) in relation to which all the conditions are met and therefore available for use on simple request
• In Q2 2020 is scheduled the repayment of the Euro PP and a tranche of the US
  PP (both issued in 2013) for a total amount of € 37.5 million

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Covid update

16 I

Covid update - Takeaways

Safety:

Actions taken to protect

workforce

Plants:

Most of plant close within

18 / 30 March

Main actions:

Using all government

incentives + cost

efficiency

Expectation:

Some customers plants are expected to reopen

• China travel ban and travel limitations, "quarantine" for employees coming back from zones at risk
• Reducing visits from customers/suppliers, wide spreads use of smart working
• Implemented all health safety means defined by local authorities
• Closing plants/ offices involving unions all countries (only exception Argentina)
• Worldwide (excluding China) most of plants close within 18 and 30 of March
• As of today Sogefi has closed almost all plants with the exception (partially) of USA and China (closed in February and reopened March 16)
• Of the 6.800 employees ~85% are in «technical unemployment. Local government support is high in western Europe and not-existing in other regions (i.e. South America or India)
• In addition taking all necessary steps to manage the crisis by assessing liquidity, containing cash-out by reducing costs and investments that are not strictly necessary.
• At the moment it is assumed that some plants of Sogefi's main customers may reopen in North America and Europe in May

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Covid update - Plants situation & government's incentives

Europe

(61% of sales)

North America

(19% of sales)

France	↑↑↑						USA	↑↑
Italy	↑↑↑						Canada	↑↑
			Asia
Slovenia	↑↑↑			(10% of sales)		Mexico
							Progressive closing
Others	↑↑↑			China
			within 23 / 26 of March
Progressive closing
		India
within 18 / 27 of March		China reopened March 16,
				India closed March 23
							South America
Plants Status	Government's' Incentives
		(11% of sales)
Closed	↑↑↑ High
			Brazil
Open partially	↑↑	Middle				Argentina
Open	↑	Low					Closing March 19
			Argentina, March 30 Brazil

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Perspectives

19 I

Market production evolution

€m

Europe

North America

South America

Asia

• of which China Total

IHS Forecast (April 2020)

2Q 2020E

FY 2020E

-57.2%-24.0%

-67.7%-25.1%

-73.1%-29.7%

-20.8%-17.1%

-11.7%-15.8%

-44.4%-21.2%

Primary brokers, institutes,

consulting firms estimating within

1. range -20/25% depending on different scenarios

Source: Sogefi and IHS data. Passenger cars and Light commercial vehicles only. Europe is Europe 28 and Asia is China + India

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2020 OUTLOOK

• In an environment with extremely limited visibility, the most recent sector sources are estimating that world car production may fall by between 20% and 25% in 2020 according to different scenarios as to the effects of Covid-19
• Indeed at present all the elements that contribute to the formulation of forecasts for the year remain totally uncertain: the evolution of the pandemic, the decisions to be made by the authorities on the subject of resuming production activity, today in lockdown, and lastly, following the possible startup of activity, the reaction of demand, in a context of the deep recession that could affect various parts of the world. At present the circumstances described above make any forecast that the company could make highly uncertain
• The group is focused on doing all it can to manage the crisis: it has put in place actions to reduce costs and limit as far as possible current costs and investments that are not strictly necessary, it regularly assesses liquidity positions, keeping the Board of Directors informed, liaising with its financial partners, and is preparing to start operating again, introducing higher safety standards for personnel and cost flexibility in relation to volumes that will be affected by circumstances for a certain period of time
• However, both for the period of closure and the first months after business starts up again there will be significant economic losses that will also be reflected in an increase in net debt

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CONTACTS

Yann Albrand, Group CFO Stefano Canu, Investor Relations

SOGEFI

Via Ciovassino, 1/a

20121 Milano - Italia

Tel: [phone]

Fax: [phone]

Mail: [e-mail]

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Any reference to past performance of the SOGEFI Group shall not be taken as an indication of future performance.

DISCLAIMER

o This document has been prepared by SOGEFI S.p.A. for information purposes only and for use in presentations of the Group's results and strategies.

o For further details on the SOGEFI Group. reference should be made to publicly available information. including the Annual Report. the Semi-Annual and Quarterly Reports.

o Statements contained in this document. particularly the ones regarding any SOGEFI Group possible or assumed future performance are or may be forward looking statements and in this respect they involve some risks and uncertainties.

o

o This document does not constitute an offer or invitation to purchase or subscribe for any shares and no part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever.

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