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COMER INDUSTRIES PropertyCOMER INDUSTRIES Property
Mid & Small in Milan Virtual Conference
1st - 2nd December 2020
COMER INDUSTRIES Property
2
DISCLAIMERThis document has been prepared by Comer Industries S.p.A (“Comer Industries”) for use during meetings with investors and
financial analysts and is solely for information purposes. The information set out herein has not been verified by an independent audit
company. Neither the Company nor any of its subsidiaries, affiliates, branches, representative offices (the “Group”), as well as any of
their directors, officers, employees, advisers or agents (the “Group Representatives”) accepts any responsibility for/or makes any
representation or warranty, express or implied, as to the accuracy, timeliness or completeness of the information set out herein or
any other related information regarding the Group, whether written, oral or in visual or electronic form, transmitted or made available.
This document may contain forward-looking statements about the Company and/or the Group based on current expectations and
opinions developed by the Company, as well as based on current plans, estimates, projections and projects of the Group.
These forward-looking statements are subject to significant risks and uncertainties (many of which are outside the control of the
Company and/or the Group) which could cause a material difference between forward-looking information and actual future results.
The information set out in this document is provided as of the date indicated herein. Except as required by applicable laws and
regulations, the Company assumes no obligation to provide updates of any of the aforesaid forward-looking statements. Under no
circumstances shall the Group and/or any of the Group Representatives be held liable (for negligence or otherwise) for any loss or
damage howsoever arising from any use of this document or its contents or otherwise in connection with the document or the
aforesaid forward-looking statements. This document does not constitute an offer to sell or a solicitation to buy or subscribe to
Company shares and neither this entire document or a portion of it may constitute a recommendation to effect any transaction or to
conclude any legal act of any kind whatsoever. This document may not be reproduced or distributed, in whole or in part, by any
person other than the Company. By viewing and/or accepting a copy of this document, you agree to be bound by the foregoing
limitations.
COMER INDUSTRIES SPA
www.comerindustries.com
COMER INDUSTRIES PropertyCOMER INDUSTRIES Property
AG
EN
DA
01 Comer Industries
in a nutshell
02
03 Market and
strategy
05 Shareholders structure
& Corporate Governance
06 Appendix
Business model
Key 1H20 financials04
COMER INDUSTRIES Property
01 COMER INDUSTRIES IN A NUTSHELL
COMER INDUSTRIES Property
5
VISION, MISSION AND VALUES
VISION
MISSION
We run vertical innovative solutions for agriculture and
industrial business.
We boost our strong global leadership position.
Aware of our roots and challenging in depth our identity,
we attract talents and encourage disruptive mindset.
OUR VALUES
✓HONESTY AND TRANSPARENCY
✓COURAGE AND PASSION
✓ PEOPLE AT THE CENTER
✓ TEAMWORK
✓COMMITMENT TO STAKEHOLDERS
Creating an easy world through sustainable food, streets,
houses and energy.
COMER INDUSTRIES Property
6
CORPORATE SOCIAL RESPONSIBILITY
In 2019 Comer Industries has launched a new project:
OUR BRIGHT IMPACT.
An important responsibility towards the environment
and the society.
The courage to take on a strong commitment, starting
from adherence to the Global Goals for the
sustainable development.
The ambition to leave our positive mark and to create
something new, making “bright” the world around us.
The promise we make to ourselves and to the
environment in which we act.
In 2019 has been voluntarily issued the first Sustainably
report, available on the company website.
COMER INDUSTRIES Property
221
192
1H19 1H20
€ i
n m
ilio
ns
NET REVENUES
342
379
405
2017 2018 2019
€ i
n m
ilio
ns
NET REVENUES
30
39
45
2017 2018 2019
€ i
n m
ilio
ns
EBITDA (adjusted)
7
HISTORICAL & 2020 TRADING RESULTS+8,8%CAGR
17-19
+10,8%
YoY
+6,7%
YoY
+22,5%CAGR
17-19
+28,5%
YoY
+16,7%
YoY
8,8%
10,2%11,1%
Note:
EBITDA [adjusted] excludes the impacts from the application of IFRS 2 standard for stock grant plans, listing costs and IFRS 16 standard for lease contracts.
Net cash/(debt) [adjusted] excludes the impacts from the application of IFRS 16 standard for lease contracts.
2522
1H19 1H20
€ i
n m
ilio
ns
EBITDA (adjusted)
-12,8%
YoY
11,5% 11,6%
-13,2%
YoY
(3)
6
31Dec19 30Jun20
€ i
n m
ilio
ns
ADJUSTED NET CASH/(DEBT)
[…]% represents EBITDA [adjusted] margin
+€9m
Dec19-Jun20
20
17
-20
19
1
H 2
02
0
COMER INDUSTRIES Property
02 BUSINESS MODEL
COMER INDUSTRIES Property
9
BUSINESS OVERVIEW
BUSINESS AREA PRODUCTS LINES TECHNOLOGYREGIONS STRUCTURE
AG
RI
IND
US
TR
IAL
Gearboxes
Planetary drives
Powertrain systems
Wheel drives
Driveshafts
23% NAM
23% APAC
50% EU
4% LATAM
Mechanical
100%
Hydraulic
0%
Electric
0%
Electronic
0%
✓ 10 legal entities;
✓ 6 trading
companies;
✓ 7 production
areas;
✓ C. 1.300 employees.
Note: the […]% represents 1H20 net revenues breakdown.
53% (58% in 1H19)
31% (28% in 1H19)
16% (14% in 1H19)
COMER INDUSTRIES Property
10
PRODUCT LINES AND APPLICATIONSP
RO
DU
CT
LIN
ES
AP
PL
ICA
TIO
NS
GEARBOXES WHEEL DRIVESPLANETARY DRIVES POWERTRAIN SYSTEMS DRIVESHAFTS
TRACTORS
COMBINED HARVESTERS &
SELF PROPELLED MACHINES
AGRICULTURAL MACHINERY &
GARDEN EQUIPMENT
MINING MACHINERY
CRANES
CONSTRUCTION EQUIPMENT
WIND TOWER
GENERATORS
CONSTRUCTION EQUIPMENT
TELEHANDLERS
ROAD CONSTRUCTION MACHINERY
COMBINED
HARVESTERS & SELF PROPELLED
MACHINES
AGRICULTURAL & GARDEN
EQUIPMENT
COMER INDUSTRIES Property
11
EXAMPLES OF AGRI APPLICATIONS
• Land preparation
machines
• Soil tillage machines
• Crop treatment machines
• Forage and hay
machines
• Biogas systems
• Corn and grain headers
• Combines and forage
harvesters
• Forage mixing and
distribution machines
• Tractors
AGRI
COMER INDUSTRIES Property
12
EXAMPLES OF INDUSTRIAL APPLICATIONS
• Construction machines
• Road construction machines
• Forestry machines
• Mining machines
• Material handling Renewable Energy
• Water treatment machines
INDUSTRIAL
COMER INDUSTRIES Property
13
USA
Charlotte, North Carolina
Italy
Gearboxes, Planetary
Drives & Axles
Reggiolo (RE)
Italy
Matera (MT)Assembly capability
Manufacturing plant
India
Bangalore, Karnataka
China
Pinghu, Zhejiang
7Production
areas
R&D
Center
GLOBAL OPERATIONS FOOTPRINT
Italy
Driveshafts
Pegognaga (MN)
COMER INDUSTRIES Property
14
AG
RI
OEM Construction
OEM Energy
Tier 2 raw material
suppliers
Tier 1 supplier
Original Equipment
Manufactures (OEM)
Customers
Farmers
Oil & GasConstruction playersMining
Wind plants owners
WHERE WE ARE IN THE VALUE CHAIN
IND
US
TR
IAL
COMER INDUSTRIES Property
15
OUR MAIN CUSTOMER
OUR CUSTOMERS
Top 10 customers generated approximately 50% of total revenues.
COMER INDUSTRIES Property
03 MARKET AND STRATEGY
COMER INDUSTRIES Property
17
CURRENT ADDRESSABLE MARKET
3+ €b 5+ €b 0.2 €b
STRATEGY PILLARS
✓ Maintain leadership in the Agri
Business
✓ Size growth driving economies of scale
✓ Increase margins
✓ Simplification and digitization
COMER INDUSTRIES Property
18
DRIVERS & MEGATRENDS
Climate Change
Green house
Gas reduction
Healthcare
Emissions
reduction
Demography
Growing population
Aging societies
Urbanisation
Growing number
of mega-project
Sustainability
Congestion
infrastructures
Digitization
Connected world
Consequences
Renewable
Boost
Mkt shifting to
Emerging
economies &
Migration to
Megalopolis
Increased
Efficiency and
Productivity
Increase
Safety &
Comfort
Automation&
robotics
Big Data
Expansion,
Automation,
IoT & AI
MEG
A T
REN
DS
Off
Hig
hw
ay
Tre
nd
In 10 years the world may not be able to feed itself according to World Economic Forum.
By 2027 we won’t have enough food to feed the planet. By 2050, the world’s population is expected to reach
9.1b and the United Nation’s Food and Agriculture Organization (FAO) predicts that at that point, the world
would need to produce 70% more food than today.
COMER INDUSTRIES Property
19
MAIN COMPETITORS BY MARKET
BUSINESS AREA MAIN COMPETITORS
AG
RI
IND
US
TR
IAL
(LISTED IN ITALY MTA) (LISTED IN US-NYSE)
AN
D IN
CU
BA
NT
CO
MP
ET
ITO
RS
COMER INDUSTRIES Property
04 KEY 1H20 FINANCIAL
COMER INDUSTRIES Property
Euro in millions 30June18 30June19 30June20 1H19 vs 18 1H20 vs 19
Net revenues 203,6 220,8 191,6 8,4% (13,2%)
EBITDA 21,5 26,9 21,4 24,8% (20,4%)
Margin 10,6% 12,2% 11,2% 1,6p.p. (1,0)p.p.
EBITDA [adjusted] 21,6 25,4 22,2 17,7% (12,8%)
Margin 10,6% 11,5% 11,6% 0,9p.p. 0,1p.p.
EBIT 15,0 17,6 12,3 17,7% (30,1%)
Margin 7,4% 8,0% 6,4% 0,6p.p. (1,6)p.p.
Net income 10,2 11,5 8,8 12,5% (23,1%)
Margin 5,0% 5,2% 4,6% 0,2p.p. (0,6)p.p.
TWC 84,7 93,1 91,3 8,4 (1,7)
TWC % of net revenues 23,3% 23,5% 24,3% 0,2p.p. 0,8p.p.
Net Equity 82,8 118,6 129,6 35,8 11,1
Net Debt / (cash) [adjusted] 40,0 10,1 (6,2) (29,9) (16,4)
Adjusted Net cash flow (0,7) (26,6) (9,1) (25,9) 17,5
Net Debt / EBITDA [adjusted] (*) 1,14x 0,24x n.a. (90,0)p.p. n.a.
Net Debt [adjusted] /Net Equity 0,48x 0,09x n.a. (39,8)p.p. n.a.
Var.% YoY
21
KEY CONSOLIDATED HALF YEAR RESULTS
(*) On EBITDA since 2018.
Source: Consolidated Statutory Financial Statements
To note that:
• EBITDA [adjusted] excludes the impacts from the application of IFRS 2 standard for stock grant plans and listing costs and
IFRS 16 standard for lease contracts.
• Net debt presented aside has been adjusted to exclude the impact of new IFRS 16 (€26.2m at 31Dec19)
MAIN COMMENTS
• 1H20 net revenues decreased by -13,2% vs
1H19, while adjusted EBITDA decline by -
12,8%.
• 1H20 [adjusted] EBITDA amounts to 11,6%
of net revenues, in line with 1H19 (11,5%)
and +50 bps vs FY19.
• At 30Jun2020 the Group presents a positive
[adjusted] net cash position, amounting to
+€6,2m.
• In 1H20 the net cash flow amounts to €9,1m
and reflects an operating cash flow
generation of c. €18,9m in 1H20 and also
the payment of FY19 dividends (€7,1m).
COMER INDUSTRIES Property
KEY COMMENTS
• AGRI sales decrease reflects both the impact of COVID-19 lockdown and downturn of tractors and combines markets.
• Industrial business benefited of growth of the APAC revenues, linked to mass production of the FY19 new products.
22
REVENUES BY BUSINESS AREAA
GR
IIN
DU
ST
RIA
L
Euro in millions 1H18 1H19 1H20 1H19 vs 18 1H20 vs 19
Net revenues 128,8 129,0 101,9 0,1% (21,0%)
As % of tot. Group revenues 63,3% 58,4% 53,2% (4,8)p.p. (5,3)p.p.
EBITDA [adjusted] 15,6 16,3 12,8 4,9% (21,4%)
Margin 12,1% 12,7% 12,6% 0,6p.p. (0,1)p.p.
EBIT 11,4 11,7 7,6 3,1% (35,6%)
Margin 8,8% 9,1% 7,4% 0,3p.p. (1,7)p.p.
Source: Consolidated Statutory Financial Statements
Var.% YoY
Euro in millions 1H18 1H19 1H20 1H19 vs 18 1H20 vs 19
Net revenues 74,8 91,8 89,7 22,8% (2,2%)
As % of tot. Group revenues 36,7% 41,6% 46,8% 4,8p.p. 5,3p.p.
EBITDA [adjusted] 6,0 9,1 9,3 50,8% 2,7%
Margin 8,1% 9,9% 10,4% 1,8p.p. 0,5p.p.
EBIT 3,6 5,9 4,8 63,8% (19,0%)
Margin 4,8% 6,4% 5,3% 1,6p.p. (1,1)p.p.
Source: Consolidated Statutory Financial Statements
Var.% YoY
COMER INDUSTRIES Property
121,9
50,0
23,58,2
EMEA NORTH AMERICA ASIA PACIFIC LATIN AMERICA
131,6
49,8
28,910,6
95,0
44,2
45,7
6,8
23
REVENUES BY GEOGRAPHY
KEY COMMENTS
• The 1H20 sale performance (-€29m) reflects the opposite trend of the growth in APAC (+€17m or +58% vs 1H19) and the
reduction in the other areas (-€46m or -24%).
• The 1H20 increase in APAC is primarily linked to the Industrial business.
• 1H20 APAC revenues include the mass production of the new products launched in June 2019.
Source: Consolidated Statutory Financial Statements
1H18
€204m
1H19
€221m
1H20
€192m
-28%
YoY
-11%
YoY
+58%
YoY
-36%
YoY
COMER INDUSTRIES Property
24
TWC EVOLUTION
KEY COMMENTS
• TWC % at 30Jun2020 (24%) reflects the impacted of COVID-19, primarily for the 1H20 sales reduction.
• On average DSO are approximately 20-30 days lower than DPO.
• Stock rotation index (on LTM COGS) at 30Jun20 amounts to 3,00x slightly lower than at 30Jun19 (120
3,05x), impacted by the COVID-19.
Source: Consolidated Statutory Financial Statements
69,5 77,4 96,2 77,3 80,5
85,693,0
88,485,5 84,6
(80,6) (86,1) (91,6) (77,7) (73,7)
21,8% 22,3%23,5%
21,0%24,3%
(30,0%)
(20,0%)
(10,0%)
0,0%
10,0%
20,0%
30,0%
(150,0)
(100,0)
(50,0)
-
50,0
100,0
150,0
200,0
31Dec17A 31Dec18A 30Jun19A 31Dec19A 30Jun20A
Eu
ro m
Evolution of TWC
Trade receivables Stock Trade payables TWC as % of net revenues
COMER INDUSTRIES Property
25
NET DEBT/(CASH) EVOLUTION
Source: Consolidated Statutory Financial Statements
KEY COMMENTS
• At 30Jun2020 total credit lines available amount to some €160m, of which €80m refer to short term lines and the
remaining part to long term lines (e.g. the facility agreement signed in Jun19).
• Net debt [adjusted] excludes the impacts traceable to the application IFRS 16 standard in relation to lease contracts.
40,736,7
10,1
2,9
(6,2)
40,736,7 36,8
29,1
18,4
-10
0
10
20
30
40
50
31Dec17A 31Dec18A 30Jun19A 31Dec19A 30Jun20A
Eu
ro m
Evolution of Net Debt / (cash) [adjusted]
Net Debt / (cash) [adjusted] Net Debt / (cash)
COMER INDUSTRIES Property
05 SHAREHOLDERS STRUCTURE & CORPORATE GOVERNANCE
COMER INDUSTRIES Property
Nr. of shares % of share
capital
% of voting
rights
Lock up
shares
Lock up
duration
█ Eagles OAK S.r.l. 14.640.089 71,73% 71,73% 10.408.733 36 months (A)
█ Market (*) 5.769.191 28,27% 28,27% 659.911 36 months (B)
TOTAL ORDINARY SHARES 20.409.280 100,00% 100,00% 54,23%
Latest Update: 30 September 2020
71,7%
28,3%
27
SHAREHOLDERS’ STRUCTURE
WARRANT “COMER INDUSTRIES 2019-2021”
• Comer Industries SpA issued 300.000 warrants during the listing process on March 2019.
• At the end of first two exercise periods, 59.280 warrants have been exercised, leading in July 2019 to the issue of
59.280 shares and the capital increase of c. €0,6m (fixed conversion rate: €10 per warrant).
• 240.720 warrants are currently outstanding on the AIM Italia market.
• As at today, there is a potential cash-in / maximum capital increase in 2021 of c. €2,4m deriving from the
outstanding warrants (fixed conversion rate: €10 per warrant).
SHARES AND RIGHTS
(A) From the business combination effective date. (B) From the approval date of 2019 statutory financial
statements. (*) Including Finregg (8,3% of share capital).
COMER INDUSTRIES Property
28
2020-2021 SHARE BUYBACK PLAN
APPROVAL
• On 22nd April 2020, Comer Industries’ Shareholders’ meeting authorized the purchase and disposal of own shares.
PURCHASE THRESHOLD
• 10 % of the share capital;
• Amount of distributable results of prior years and available reserves indicated in the latest available approved financial
statement at the time of each single purchase.
DURATION
• 18 months from the 22nd April 2020 (i.e. due date 22nd October 2021).
AIMS OF THE PLAN
• Retention for subsequent uses (e.g. extraordinary transactions, etc.);
• Regularization of negotiations and support to the shares’ liquidity (in compliance with the provisions in force);
• Support for future compensation and incentive plans dedicated to directors and employees;
• Base for free share assignment programs to shareholders.
PRICES AND DAILY LIMIT
• The purchase price must be between €1,00 and €20,00 per share.
• The limit of daily purchases is the 25% of the daily average volume of shares where the purchase is made.
CURRENT NUMBER OF OWN SHARES
• At the time of this document neither Comer Industries S.p.A. nor its subsidiaries have treasury shares.
For further details please refer to the Company web-site and the minutes of the 22nd April 2020 shareholders' meeting.
COMER INDUSTRIES Property
06 APPENDIX
COMER INDUSTRIES Property
30
50 YEARS OF HISTORY: MAIN MILESTONES
1970: The Storchi family founds CO.ME.R. (Costruzioni Meccaniche Riduttori) specialized in the manufacture of mechanical transmissions for agricultural machinery.
1985: Subsidiaries are set up in France, Germany, Great Britain and the United States.
1985-1980: Comer grows both organically and through acquisitions.
1996: Opening of the Mechatronics Research Centre, a state-of-the-art laboratory dedicated to the company’s R&D activities.
1998: Opening of the representative office in Beijing for the industrial partnership with local suppliers.
2007: The Comer Industries Components Operating Unit is officially inaugurated in Matera. Comer (Shanghai) Trading Co. Ltd., the new sales Subsidiary and the Operating Unit Comer Industries (Shaoxing) Co. Ltd are also opened in China.
2013: Opening of a new sales subsidiary “Comer Industries do Brazil”, in the state of São Paulo.
2015: Re-building Reggiolo Plant and start up Comer Industries India Pvt. Ltd. in Bangalore for axles production.
2017: New governance due to succession plan.
2018: Start up Comer Industries (Jiaxing) Co. Ltd.
2019: Listing on the Milan Stock Exchange (in the AIM Italia Market trading platform).
COMER INDUSTRIES Property
31
GROUP STRUCTURE
Comer Industries SpA
Reggiolo (RE) (Italy)
(Head Quarter)
Comer Industries
(Shaoxing) Co Ltd
Shaoxing (China)
Comer Industries
Components Srl
Matera (MT) (Italy)
Comer Industries
(Jiaxing) Co Ltd
Jiaxing (China)
Comer Industries India
Pvt Ltd
Bangalore (India)
Comer Industries UK
Ltd
Leicester (UK)
Comer Industries
Inc
Charlotte NC (US)
Comer
GmbH
Schermbeck (Germany)
(Sales Office)
Comer Industries Sarl
Serris (France)
(Sales Office)
Comer Industries
do Brasil EIRELI
Limeira SP, Brazil
100% 100%
95%34,2%
65,8%
100% 100%
99,9%100%
100%
Sales office legal entity
Trading company
Production company
COMER INDUSTRIES Property
Thanks for your attention