Investors presentation Q3 Report September 30, 2014 November 27, - - PowerPoint PPT Presentation

Q3 Report September 30, 2014

Investors presentation

November 27, 2014

Confidentiality

This presentation has been prepared by Marcolin S.p.A. and its affiliates. The information contained herein is confidential and has been prepared solely for the needs of the adressee and is not to be relied upon by any other person or entity. Hence, if you wish to disclose copies of this report to any other person or entity, you must inform they that they may not use these reports for any purpose without Marcolin written consent. No representation, warranty or undertaking, express or implied, is made as to, and no reliance shoud be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. 2

3

At a glance Key consolidated financials: Q3 2014 Viva Integration Project

Agenda

Appendix Key consolidated financials: LTM

At a glance

Key facts 2014

> Joint venture China announcement > Project Fortogna > Portfolio licences (RC)

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5

At a glance Key consolidated financials: Q3 2014 Viva Integration Project

Agenda

Appendix Key consolidated financials: LTM

Key consolidated financials

* EBITDA is affected by a number of extraordinary items. For this reason it has been adjusted to restate the one-off effects deriving from the re-organization as represented in “Consolidated Adjusted EBITDA” page.

Sales

Consolidated Net sales increased +1,6% vs. PY; at constant FX sales increased +3,7%. Upside from TF (+€ 9.5m) and good performance of TB (+€ 2.6m) and DL (+€ 1.4m).

272.2

Million EUR

EBITDA

2014 Q3 EBITDA Reported is € 22.0m (€ 25.0m previous year). 2014 Q3 Adjusted EBITDA* (excluding one-offs) is € 29.5m in line with previous year. LTM Adjusted Run-Rate EBITDA for 2014 is € 46.2m. Negative fluctuation of the exchange rate effect of about -€0,5m

• vs. previous year.

Q3 29.5

10.8%

On Net sales

Net Debt

277.9

2014 Constant FX

6 Consolidated Net Debt as of September 2014 is € 184.4m (€ 166,2m end of December 2013) with a cash absorption of € 4.8m mostly due to Bond issuance expenses and other non recurring outflows. The ratio Net financial position to LTM Adjusted run-rate EBITDA is 3.85; including the Bond interest accruals in the Net Debt, the ratio would be 3.99

Million EUR in 2013

267.9

3.85

NFP / Adj LTM RR Ebitda

LTM 46,2 13.2%

On Net sales

184.4

Million EUR

YTD Q3 Consolidated Sales

272.2

million EUR

2014 YTD Q3

@ const FOREX

+1.6% vs PY Global sales

By market destination

277.9 mill EUR +3.7% vs PY

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North America Europe

Asia

RoW

107.3

• Mill. EUR

98.9

• Mill. EUR

21.1

• Mill. EUR

44.9

• Mill. EUR

39.4% 36.3% 7.8% 16.5%

+2.9% +1.4%* +6.0% * +5,0% costant forex

• 2.5%*

* + 1 % costant forex

• Net Sales were positive: above last year +€4.3m (+1.6%) in particular is growing fast in Italy (+11,8%) and in

export, especially in Far East and Key Accounts channel, driven by TF, TB and BA.

• Net Sales @ constant FX +€10.0m or +3.7% vs. PY.
• GM% in September 2014YTD was 110bps below PY, mainly due to VIVA for worse channel mix and higher close-out
• sales. Negative impact for € 3.1m due to fluctuation on exchange rate vs. same period of last year.
• EBITDA Reported in September 2014YTD is €22.0m vs. €25.0m last year (respectively 8.1% vs. 9.3% of Net sales).
• EBITDA Adjusted, excluding one off items, would be 10.8% (or €29.5m).
• Financial of €8.4m is including €12,7m for Bond interests (of which paid in May €8.5m).

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YTD Q3 P&L Executive Summary

Consolidated Profit & Loss

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2014 Reported and 2013 Pro-Forma: both considering Marcolin, Cristallo and Viva

Key financials: YTD Q3

YTD Sept

(EURm) Actual 14 Reported Actual 14 Reported %NS Actual 13 Pro-Forma Actual 13 Pro-Forma %NS Net sales 272,2 100,0% 267,9 100,0% Cost of sales (108,1)

• 39,7%

(103,4)

• 38,6%
• - Gross Margin

164,0 60,3% 164,4 61,4% Selling and marketing costs (129,1)

• 47,4%

(125,0)

• 46,7%

General and administrative expenses (22,8)

• 8,4%

(25,0)

• 9,3%

Other operating income and expenses 2,0 0,7% 3,3 1,2% Effects of accounting for associates 0,2 0,1% 0,3 0,1%

• - OPERATING PROFIT (EBIT)

14,3 5,3% 18,1 6,8% Net finance costs (8,4)

• 3,1%

(10,7)

• 4,0%
• - Profit before taxes

5,9 2,2% 7,4 2,8% Income tax expense (2,8)

• 1,0%

(5,1)

• 1,9%
• - Net Result

3,1 1,1% 2,3 0,9%

• - EBITDA

22,0 8,1% 25,0 9,3%

• - EBITDA ADJUSTED

29,5 10,8% 29,7 11,1%

• Inventory: compared to December 2013 has risen for €16.1m (which is mostly due to turnover increase and

service level improvement)

• Net Trade Receivables: +€5.3m increase compared to Dec 13 due to seasonality and turnover increase
• Other Current Financials (Cash and Cash liquidity): are decreasing -€4.8m strongly affected by the following

items

• 2014 Bond Expenses non recurring payments (€ 3,3m)
• Non recurring payment to HVHC (price adjustment of € 3,4m)
• One-offs Viva integration project (€ 5,7m)
• Interests on the Bond notes paid in May for € 8.5m
• Intangible assets: include renewal fees for SK and DL licenses, partially paid in 2014; in addition include € 1.8m

Viva’s ERP new software

• Payables: the increase of €11.9m is in primarily attributable to the turnover increase.
• Net Financial Position: versus same period of previous year is affected by Bond issuance; September 2014

increased from €166.2m (Dec. 13) to €184.4m, with a change of €18.2m as detailed in the consolidated cash flow statement

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B/S Executive Summary

Consolidated Balance Sheet

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• Sept. 2014 and Dec 2013 Reported: both considering Marcolin, Cristallo and Viva

Key financials: Q3

Balance Sheet (EURm) Sept-14 Dec-13 Change vs Dec Net trade receivables 67,5 62,2 5,3 Inventory 89,0 72,9 16,1 Payables to suppliers (76,6) (64,7) (11,9) TRADE WORKING CAPITAL 79,9 70,4 9,5 Other receivables 18,0 14,0 4,0 Other payables (26,0) (23,1) (2,9) NET WORKING CAPITAL 71,9 61,3 10,6 Other receivables - medium/long term 24,4 25,2 (0,8) Equity investments 2,1 2,0 0,1 Net tangible assets 24,5 23,5 1,0 Net intangible assets 41,5 34,7 6,8 Goodwill 263,4 256,9 6,5 FIXED ASSETS 355,9 342,3 13,6 Funds and reserves (20,2) (22,4) 2,2 NET INVESTED CAPITAL 407,6 381,1 26,5 Financial debts - short term 28,6 17,7 10,9 Financial debts - medium/long term 196,9 195,9 1,0 FINANCIAL POSITION 225,5 213,6 11,9 Other current financial (35,6) (40,3) 4,7 Other non current financial (5,4) (7,1) 1,7 NET FINANCIAL POSITION 184,4 166,2 18,2 NET EQUITY 223,2 215,0 8,2 COVERAGE OF NIC 407,6 381,1 26,5

Net Financial Position

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Key financials: Q3

1 2

(EURm) September 2014 December 2013 Short Term borrowings 28,6 17,7 Medium Long Term borrowings 205,0 205,2 Gross borrowings 233,6 222,9 Cash and cash equivalents 33,7 38,5 Financial receivables current 1,8 1,8 Financial receivables non current 5,5 7,1 Reported Net indebtedness befor Amortized Fees 192,6 175,5 Bond issue amortized fees (8,2) (9,3) Reported Net indebtedness after Amortized Fees 184,4 166,2 Revolving Credit Facility €25mn 12,0 0,0 Short term borrowings from Banks 7,7 8,6 Receivable Factoring 0,0 1,1 Vendor Loan (HVHC) - Short Term 1,5 4,6 Bond accrued interests 6,5 2,3 Ministry of productive activities 0,1 0,1 Financial leasing VIVA 0,8 0,7 Other 0,0 0,3 Short Term gross borrowing 28,6 17,7 Senior Secured bonds €200mn 200,0 200,0 Vendor Loan (HVHC) - Long Term 3,4 3,0 Financial leasing VIVA 1,5 2,0 Ministry of productive activities 0,1 0,2 Other 0,1 0,0 Medium Long Term gross borrowing 205,0 205,2

Consolidated Cash Flow Statement

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Dec 2013 Reported: Marcolin, Cristallo and Viva (Viva for the month from the acquisition date to the annual closing date)

Key financials: Q3

(EURm) September 2014 Dec 2013 Reported Operating activities Profit before income tax expense 5,9 (11,8) Depreciation, amortization and impairments 7,0 5,4 Accruals to provisions/ other non cash items 0,3 18,1 CF from operating activities before changes in WC, tax and int. 13,2 11,7 Movements in working capital (10,7) (14,8) Income taxes paid (3,1) (1,9) Interest paid (9,0) (17,5) Net cash flows provided by operating activities (9,6) (22,5) Investing activities (Purchase) of property, plant and equipment (4,0) (2,6) Proceeds from the sale of property, plant and equipment 0,4 (0,0) (Purchase) of intangible assets (5,3) (1,5) (Acquisition) of investment - Marcolin e Viva 0,0 (127,7) Net cash (used in) investing activities (8,8) (131,9) Adjustments to other non-cash items 2,9 5,5 Financing activities Net proceeds from/(repayments of) borrowings 8,0 91,6 Other cash flows from financing activities 0,0 51,3 Net cash from/(used in) financing activities 8,0 142,9 Net increase/(decrease) in cash and cash equivalents (7,5) (6,0) Effect of foreign exchange rate changes 2,7 (0,7) Cash and cash equivalents at beginning of period 38,5 45,2 Cash and cash equivalents at end of period 33,7 38,5

Cash Flow Focus

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Key financials: Q3

(EURm) September 2014 Net increase/(decrease) in cash and cash equivalents (4,8) Bond interests paid in May 8,5 Bond Expenses paid in Jan/Feb 3,3 Vendor Loan - Price adjustment due to HVHC 3,4 Renewal Fees 2,9 One-offs Viva integration project 5,7

• Adj. Net increase/(decrease) in cash and cash equivalents

18,9

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At a glance Key consolidated financials: Q3 2014 Viva Integration Project

Agenda

Appendix Key consolidated financials: LTM

Revenues Analisys by market destination

Europe

million eur

Row ASIA North america

million eur million eur million eur

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1,3549 1,3171

Ex rate EUR/USD

+2.9% +2.2% +1.4% or 5,0% constant forex 1.12% +6.0% +4.4%

• 2.0%

Key financials: LTM

• 2.5% or +1% constant forex

As of September, 30st Full Year 2014 Q3 % 2013 Q3 % 2014 LTM % 2013 % Europe 98,9 36,3% 96,1 35,9% 126,8 36,3% 124,1 36,0% North America 107,3 39,4% 105,8 39,5% 138,1 39,5% 136,6 39,6% Asia 21,1 7,8% 19,9 7,4% 28,4 8,1% 27,2 7,9% Rest of World 44,9 16,5% 46,0 17,2% 55,9 16,0% 57,0 16,5% Total 272,2 100,0% 267,9 100,0% 349,2 100,0% 344,9 100,0%

Total @ constant FX (€ Mln)

277,9

change vs. PY

3,7% in € Mln, except percentages in € Mln, except percentages

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EBITDA REPORTED EBITDA ADJUSTED *

6.8%

ADJ RUN-RATE EBITDA **

% 2014 LTM on net sales

10.8%

% 2014 LTM on net sales 7,8% in 2013

13.2%

% 2014 LTM on net sales 11,4% in 2013 13,9% in 2013

* excluding one-offs * including synergies

LTM Ebitda performance (million eur)

Key financials: LTM

2014 LTM FY 2013 2014 LTM FY 2013 2014 LTM FY 2013 2013 JUNE LTM NET SALES

218,2 204,2 130,9 140,7 349,2 344,9 348,2

% vs. PY 6,9%

• 6,9%

1,3%

EBITDA

16,3 16,6 7,4 10,2 23,7 26,8 18,0

Adjustment 9,5 10,4 3,7 0,0 13,2 10,4 16,8

25,8 26,9 11,1 10,2 36,9 37,1 34,8

Management Fees 0,3 1,8 0,3 1,8 1,8 Germany J/V 0,4 0,4 0,4 0,4 0,8 EBITDA ADJUSTED

25,8 26,9 11,9 12,4 37,7 39,3 37,4

Synergies 8,5 8,5 8,5 ADJ RUN-RATE EBITDA

46,2 47,8 45,9

EBITDA ADJ % on Net sales

11,83% 13,20% 9,06% 8,80% 10,79% 11,41% 10,75%

EBITDA ADJ RR % on Net sales

13,23% 13,87% 13,20%

in € Mln, except percentages in € Mln, except percentages in € Mln, except percentages

CONSOLIDATED

MARCOLIN VIVA

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At a glance Key consolidated financials: Q3 2014 Viva Integration Project

Agenda

Appendix Key consolidated financials: LTM

Integration Plan

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19

Viva Integration

TOTAL

(*)

18 months 6 months 3 m 3 m

2014 2015

3 m 6 months 18 months 3 m

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

US UK France Hong Kong Brazil Canada Germany

Integration Updates

20

20

Viva Integration

TOTAL

(*)

15 months 3 m

2014 2015

3 m 4 months 15months

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

US UK France Hong Kong Brazil Canada Germany

Integrated in MspA & MUK Integrated in M HK Keep JV

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At a glance Key consolidated financials: Q3 2014 Viva Integration Project

Agenda

Appendix Key consolidated financials: LTM

22

CONSOLIDATED

22

Introductory note on Consolidated Financial Reports

> Year 2013 is affected by a number of non recurring events

• Cristallo mandatory tender offer (OPA) on Marcolin shares (Feb. 2013)
• reverse merger of Marcolin Parent Company Cristallo (Oct. 2013)
• refinancing on existing indebtedness through HY Bond on Nov. 2013
• VIVA acquisition on Dec. 2013

Due to the scale of the non recurring events, comparison with the previous period in not always immediate, particularly as regards to the Group cash

• flows. To enhance period-on-period comparability and whereas possible, financial information has been represented as “Pro-Forma” (including

Cristallo and Viva results).

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> Financial information presentation

In a departure from the previous financial report issued, this report focuses on the consolidated result for the Group. The results of operations of the Group, which includes Marcolin, Cristallo and Viva are discussed as one entity (whereas previously the result of Marcolin and Viva were discussed separately). This is consistent with the strategy to fully integrate Viva, its operations and its brands into the Marcolin Group.

Reasons for restatements

24 Marcolin is still involved in new projects, in consolidation and in development activities, which in fact brought about a global reorganization at all levels:

• Reorganization process with changes in top and middle management
• Reposition of collections, expanding the “vision” segment and integrating new lines or new models and relaunch of domestic

brand WEB

• Rationalization of the distribution networks both internationally and at domestic level
• In-depth review of the brand portfolio with the addition of new prestigious licensing agreements that will start in January

2015, and discontinuation of non performing licences For the above reasons the EBITDA is also reported net of the impact of the one-off effects in order to provide comparability.

• Integration process of Viva Group

Consolidated Adjusted Ebitda

25

Key financials: Q3

in € Mln, except percentages YTD Q3 2014 YTD Q3 2013 EBITDA pre-adjustment 22,0 25,0 Cost related to Cristallo impact 0,0 1,2 EBITDA Reported 22,0 26,2 Exceptional termination of licenses 0,0 1,2 Cost related to PAI Acquisition 0,0 0,3 Cost related to VIVA Acquisition 0,0 0,0 Senior management changes 1,2 1,7 Restructuring of sales force 0,0 0,0 Cost related to VIVA Integration 5,6 0,0 Other 0,7 0,2 Total adlustments 7,5 3,5 EBITDA ADJUSTED 29,5 29,7 Net Sales 272,2 267,9 %

• n Net Sales

10,84% 11,07% in € Mln, except percentages LTM 2014 FY 2013 EBITDA pre-adjustment 23,7 26,8 Cost related to Cristallo impact 0,2 1,4 EBITDA Reported 23,9 28,1 Exceptional termination of licenses 1,1 2,3 Cost related to PAI Acquisition 0,3 0,5 Cost related to VIVA Acquisition 1,0 1,0 Senior management changes 2,3 2,8 Restructuring of sales force 1,4 1,4 Cost related to VIVA Integration 5,6 0,0 Other 1,4 0,9 Total adlustments 13,1 9,0 EBITDA ADJUSTED 36,9 37,1 Net Sales 349,2 344,9 %

• n Net Sales

10,58% 10,76%

Investor relation

Marcolin Contacts:

Massimo Stefanello CFO and COO +39 0437 777111 mstefanello@marcolin.com Alessandra Sartor +39 0437 777204 asartor@marcolin.com Francesca Pellegrini +39 0437 777152 fpellegrini@marcolin.com

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