I N V E S TO R P R E S E N TAT I O N - IDEAMI SPACideamispac.com/Allegati/Operazione_rilevante/IDeaMI...Global market leader One-stop-shop for fastening systems Global footprint High

1

Wednesday, November 7th 2018

Fondazione Cariplo

Milan

I N V E S T O R

P R E S E N TA T I O N

2

Today’s Speakers

Andrea Costantini

Group CFO

Paolo Pozzi

Group CEO

Giandomenico Sbaragli

Group S&M Director

Lorenzo Zaniboni

Group Operations DirectorCesare Agrati

President & CEO

Paolo Ceretti

CEO

Pier Luigi Rossi

Board member

Piero Galli

Board member

3

• Introduction and investment highlights

• Company overview

• Positioning and perspectives

• Key financials

• Transaction overview

• Appendix

AGENDA

4

Our target of choice: Agrati GroupIntroduction and

investment highlights

Nuts AFPAdvanced Formed Parts

BoltsHigh and medium strength

Special

Screws

Interior

Exterior

Safety

Brake & Wheel

Steering

Seating

Chassis

Axle

Seating

Powertrain

Bumpers

Interior Headliner

Structures

Trunk

Airbag

Engine

Founded in the ‘30 in Veduggio, north of Milan, is a market leader in the development, production and

distribution of fastening systems and advanced solutions mainly in the automotive market

Critical components

• World n. 7 manufacturer of automotive

metallic fastening systems

• Italian champion with a strong

entrepreneurial history of continuous

and profitable growth

• Leading company in technology and

innovation

• Mostly primary transaction: up to €175M

devoted to fund Agrati Group future

growth

5

Investment rationaleIntroduction and


Global market leader

One-stop-shop for

fastening systems

Global footprint

High profitability and

cash generation

Strong management

team

Excellent global

platform for growth

• Top ranking on blue-chip OEMs and Tier 1 manufacturers

• State-of-the-art technology

• 90% of revenues outside Italy

• Complete product portfolio (depth and width)

• High quality co-designed solutions

• Full Service Provider (FSP) proven capabilities

• 12 production plants

• 5 logistic centers

• 12 sales and application offices

• “Agrati Production System – APS” based on Lean Production

• High production efficiency (continuous costs control and working capital improvement)

• Strong cash flow generation (€30-40 M per year), notwithstanding capex higher than peers

• Extensive engineering and manufacturing expertise

• Management with long tenure

• Proven M&A track record capabilities

• Opportunities from a fragmented market (customer full potential, entry in adjacencies)

• Dynamic M&A market (avg. 40 transactions/year in the last 3 years)

6

131189

249

327 337376

405 428467

80

113

61

191

09A 10A 11A 12A 13A 14A 15A 16A 17A

Revenues M&A

4,6%5,8%

4,1%

6,7%

9,8%

11,4%

15,3%16,3%

15,5%

EBITDA Adj %

Resilient revenues & EBITDA growthIntroduction and


• Significant organic growth thanks to proven management capabilities of M&A and integration processes

• M&A strategy focused on business development in new strategic markets

Growth not influenced by automotive market fluctuations

Source: Company data YoY organic growth

658

489

269

362

Note: 2009 - 2015 ITA GAAP

12%

8%6%

9%

3%

REVENUE CAGR +22,4%

Acquisition in France Acquisition in US

6 16 15 2233 43

62 80

102

EBITDA Adj

7




• Key financials


• Appendix

AGENDA

8

Agrati: the historyCompany Overview

Consistent development through business model evolution

and organizational changes

9

Key highlightsCompany Overview

A truly global leader in fastening systems with footprint in all key geographiesManagement figures - 2017

658MILLION EURO

Company data

10

Global footprintCompany overview

Global platform with production plants and sales offices close to main automotive OEMs

12 Production Plants 12 Sales & Application Offices

5 Logistic Centers 3 Tech Centers

Source: Company data

74.000 sqm

52.400 Tons/year

211 Equipment

137.000 sqm

99.000 Tons/year

600 Equipment

37.000 sqm

15.000 Tons/year

69 Equipment

USA

EU

ASIA

500 Employees

369 Employees

1.738 Employees

11

Global salesCompany overview

Global player with 90% of revenues outside Italy

Global presence with focus on the most specialized markets with high growth potential

32%AMERICAS

60.5%EMEA

7.5%APAC


12

Clients portfolio

10 CLIENTS ACCOUNTING APPROX. 60% OF TOTAL SALES90% OF SALES FROM AUTOMOTIVE MARKET

Automotive focused and balanced clients portfolio

Company overview


Sales Top 5:

51%

15%

11%

11%

9%5%

3%

each

2%

each

1%

each

30%

Other

60%

28%

2% 3%

3%4%

Sales 2017

Automotive

OEMs

Automotive

TIER 1

Commercial vehicle Distribution

IndustrialOther

€ 658 M

13

Bolts58%

Nuts10%

Special Screws

9%

AFP15%

Other8%

High tech solutionsCompany overview

Wide and diversified product portfolio: high volume critical parts

Wheel boltWheel nut

Hub bolt

Cam bolt Cilinder

head bolt

Gearbox

screw

Safety belt

screw

Bolts, screws, nuts

77% of revenues


14

Bolts58%

Nuts10%

Special Screws9%

AFP

Other8%

High tech solutionsCompany overview

Wide and diversified product portfolio: high value engineered products

Braking systems

Powertrain

Safety and comfort

APPLICATIONS

AFP

15% of revenues


15

Co-design: a new way to find opportunitiesCompany overview

Acquired Activities Ongoing Activities

16




• Key financials


• Appendix

AGENDA

17

Value creation platformPositioning and

perspectives

Five levers to support business development and market opportunities

Solid & promising

client portfolio

Stable & Attractive

market

Strong market

positioning

Efficient & profitable industrial system

Platform for growth

Value creation

platform

18

Fastener market structureStable and

attractive market

Positioning and perspectives

67,5

% total market

CAGR ‘17-22

40,5% 27,4% 32,1% 100% 27,7% 19,7% 13,7% 9,0% 6,1% 4,0%13,6% 6,1%

4,6% 2,9% 3,2% 3,7% 4,2% 3,6% 3,2% 3,3% 4,8% 3,2%2,7% 4,3%

Global fastener market value is ~€68B in 2017, with automotive as first

industry & APAC as main geography

GLOBAL INDUSTRIAL FASTENER MARKET SPLIT (B€, 2017)

Split by geography Split by industry

Source: Freedonia; GIA Report, Management analysis

27,3

18,5

21,7 18,7

13,3

9,2

9,2

6,1

4,14,1

2,7

APAC Americas EMEA Total Motorvehicles

Machinery Electric &electronicequipment

MRO Metalproducts

Aerospace Construction Other OEM

Standard products

19

Vehicle fastener applicationsStable and

attractive market


Vehicle application Value of total vehicle (%)

Engine & powertrain 27%

Chassis/Suspension 20%

Braking & wheels 10%

Interior/exterior trim 12%

Seating 8%

Safety 7%

Body and White 7%

Other 9%

CAR FASTENING PIECES

KEY NUMBERS

VALUE

Every vehicle is equipped with around 3.000 assembly points

Source: WRC Research; A2MAC1

Average size car presents about 1.000 SKUs for a

total of ~2-3.000 assembly points depending on

car model

Hybrid vehicles have 3-6% more pieces due to

additional engine components

Electric vehicles have ~20-25% less pieces due to

fewer engine components

~ €230 per car

~ €600 per heavy truck vehicle

20

Automotive industry faces relevant challengesStable and

attractive market


Mobility

Shared Mobility

Customers behaviors

Convenience /

loss of status symbol

Regulatory

City-region-govern.

regulation

Urbanization

Electrification

Digitalization &

Connectivity

Changes will impact the whole supply chain and the size/mix of fastener mkt

Sustainability

Autonomous

driving

IMPACT

Impact on

market size

Impact on

ability to win

Vehicles production forecast

Growing fastener reliability

Mega platforms convergence

Attention to safety & comfort

Powertrain mix change

Advanced driver aids

Increased vehicle lifecycle

Raw materials fluctuations

Fastener value increase

TRENDS

21

Source: LMC; Company data

Vehicle production forecastStable and

attractive market


CAGR 18-22

2,4%

2018 – 2022 expectations showcase stable growth rate at ~2,4%

APAC fastest growing region at ~2,8%

NUMBER OF VEHICLES PRODUCED BY GEOGRAPHY 2017-2022 (M)

Note: Graphs include personal vehicles and LCV

Vehicles production

forecast

Growing fastener

reliability

Mega platforms

convergence

Attention to safety &

comfort



Increased vehicle

lifecycle

Raw materials

fluctuations


NAFTA

EMEA

APAC 50,5 52,4 54,1 55,5 57,2

25,526,3 27,1 27,5 28,0

21,120,9

21,4 21,622,2

2018F 2019F 2020F 2021F 2022F

95+ 0,5%

+ 1,6%

+ 2,8%

97 100103 105

107

- 0,4%

+ 4.0%

+ 4,9%

CAGR 15-17

3,5%

49,9

24,8

20,5

2017

22

4%11%

4%8%

99% 99% 99% 99%92%

81%

2017 2018 2019 2020 2025 2030

ICE

HEV

EV

Powertrain mix changeStable and

attractive market


Low before 2025, with positive impact from Hybrid Vehicles

Electric Vehicle is a good opportunity as contributes to enhance the fastener market

% OF HYBRID & ELECTRIC VEHICLES PRODUCED (M)

~

+

-

94,5

0,5

ICE + HEV

EV

Breakdown

108,5 109,5

4,5 13,5

+14 mln (+15%)

ICE = Internal Combustion Eng.

HEV = Hybrid Vehicle

EV = Electric Vehicle

Source: Bloomberg; GIA report

Impact on #

fasteners/car

ICE

HEV

EV

Vehicles production

forecast

Growing fastener

reliability

Mega platforms

convergence


comfort

Powertrain mix

change


Increased vehicle

lifecycle

Raw materials

fluctuations


95 97 100 103 113 123

23

19,6

0,51,0

2,0

23,1

2

1,5

19,6

Fastenersmkt 2018

Americas EMEA APAC Fastenersmkt 2022

Volumedriven

Valuedriven

Fastenersmkt 2018

Fastener value increaseStable and

attractive market


AUTOMOTIVE FASTENER MARKET GROWTH (B€)

Automotive fasteners market is expected to grow more than the automotive market

due to inflation, raw materials mix and production processes, which increase unit price

Source: GIA report

Vehicles production

forecast

Growing fastener

reliability

Mega platforms

convergence


comfort



Increased vehicle

lifecycle

Raw materials

fluctuations

Fastener value

increase

CAGR 18-22

4,2%

VEHICLE MATERIAL MIX SHIFT

48%

12%

20%

40%

10%

12%

6%

13%

2%

4%

13%19%

2017 2030

Conventional Steel High strength Steel

Magnesium Aluminium

Plastics Other

24

Attention to safety and comfortStable and

attractive market


Vehicles production

forecast

Growing fastener

reliability

Mega platforms

convergence


comfort



Increased vehicle

lifecycle

Raw materials

fluctuations



Belts

Brake by wire

Electric parking brake

Electric

adjusting seats

HIGHER

ENGINEERED

PRODUCTS

Lane assist

Electric

parking syst.

Cameras

Airbag

25


perspectives


Solid & promising

client portfolio

Stable & Attractive

market

Strong market

positioning


Platform for growth

Value creation

platform

26

Product portfolio positioningStrong market

positioning


Note:

Port. Width assessed from 1 to 4 (Bolts, Nuts,

Screws & others);

Port. Depth from 1 to 20 (from 1 to 5 per

each product segment)

PRODUCT PORTFOLIO WIDTH AND DEPTH – COMPETITIVE LANDSCAPE

Within automotive market, Agrati is recognized as a “one-stop-shop” thanks to

its product portfolio width and depthP

rod

uc

t p

ort

foli

o w

idth

+

-

Product portfolio depth- +

4

3

2

1

2015105

Sundram

Total Part numbers*

15.000

New Part # a year

1.000

Innovation ratio: 7%

Full range totally

renewed every 15

years

*Includes only manufactured products

27

609

92

1.086

506385

8701.745

638

1.138

1.084

1.644

1.469

870 833752 750 713

658

520447

389296 291

216 213 211 186 182126

ITW Arconic Stanley B&D LISI SFS McLeanFogg

GruppoFontana

Kamax Aoyama Nedschroef Agrati Jinhap SundramFast.

Ejot QST Bulten ColdHeading

Trifast San Shing Ribe MNP Brugola

Auto Fasteners Non Auto Fasteners Non Fasteners

Competitor overviewStrong market

positioning


EBITDA % - - - 14,5% 19,8% - 9,8% 12,1% - 10,2% 15,5% - 18,4% 15,4% 17,2% 10,3% 15,0% 11,3% 22,2% 9,4% - 8,9%

EBIT % - - - 9,1% 12,1% - 3,8% 5,3% - - 9,4% - 15,4% 14,4% 10,9% 7,5% - 9,6% 18,7% 5,7% - 3,7%

Source: annual reports; websites; Aida; Onesource/Hoovers DB; company data

FASTENER MARKET KEY PLAYERS REVENUES (M€), EBITDA % AND EBIT % - 2017

The first 10 players represent 18% of the market, all the rest being highly fragmented

Agrati is n. 7 world player for automotive fastener market in terms of revenues

Note: Competitors (rev.> 100M€)

9.570

11.2949.64210.696

12.175

11.479

The One-stop-Shop

positioning qualifies Agrati

as one of the best

performers in terms of

profitability

PMC

28

Product portfolio drives profitabilityStrong market

positioning


Bolts have the largest share of product sales, with high resistance growing in

absolute terms and AFP products gaining significant share

44%44%

38%

21%

20%

20%12%

11%

15%

7%

7%

10%

10%

10%

9%

7%

8%

8%

2015 2016 2017

High res. Bolts Medium res. Bolts

AFP Nuts

Special Screws Other

405

489

658

SALES BREAKDOWN BY PRODUCTS ‘15-’17 (M€)


AGRATI EBITDA % Vs. PEERS

Industry avg

~13%

Direct peers

~10%

Top performers

~20%

Low performers

~8%5,8%

4,4%

6,3%

9,4%11,0%

14,6%

16,3%15,5%

2010 2011 2012 2013 2014 2015 2016 2017

29


perspectives


Solid & promising

client portfolio

Stable & Attractive

market

Strong market

positioning


Platform for growth

Value creation

platform

30

Top 5 5%

#3 2%

Top 10 3%

Top 10 2%

#3 3%

#1 11%

Outstanding customer loyaltyStrong and promising

client portfolio


Agrati customers show very high levels of loyalty

There has been a continuous build-up track record for the last 20 years and Agrati

never lost a single customer, thus converting into a top ranking vs competitors


+20 years

8 - 18 years

Last 5 years

#1 15%

#3 11%

#2 9%

#1 2%

Revenues

share

Ranking

among suppliers

31

Total Market 2018

Automotive fastener marketStrong and promising

client portfolio


Agrati OEM client portfolio represents approx. 65% of global vehicle

production, sizeable opportunity both on OEM and Tier 1

19,6 B€

OEM

Market

2,1

OEM Market

9,4

10,2

Source: Company data; LMC; GIA report 2017

4,4

3,7

10,2 B€

Tier

componentsNon

clients

Other Agrati

OEM clients

TOP 7 OEM

Clients

Focus on Japanese

Customers(Nissan, Mitsubishi, Honda,

Toyota in US and EU)

Geographical

Synergiesthrough the localization

process of European OEMs

in APAC and NA

Tier1 approachOEM approach

Geographical

Synergies

Focus on AFP development, often

in co-design

Product Synergies on M&A customers

0,2

0,37

0,03

Agrati sales 0,6 B€

32

4 Sales pillarsStrong and promising

client portfolio


Full Service Provider

Co-design

TechnicalLeadership

Globalization

INNOVATION

33

Strong and promisingclient portfolio


Co-designInnovation and new clients’ applications are pursued through an integrated

co-design and R&D team

Full new

automotive

platforms

development

Solution of

customer

technical

problems

Support on

industrial

development of

complex parts

Full platform

joint definition

Design & FEM

Simulation

Prototyping

LAB & on FIELD

Testing & Validation

34

Technical leadershipStrong and promising

client portfolio


R&D and co-design activities are the enablers of “engineered products”

(AFP), resulting in higher value per piece positioning

€ 14 M

7% of sales

€ 100 M

15% of sales

AFP

2008

AFP

2017

PLASTIC

HOUSINGVALVE-TRAIN GEARBOX

Powertrain

DISK

BRAKESDRUM

BRAKESBOOSTER

Braking

ADJUSTER

MECHANISM

SEAT

FRAMESADJUSTER

MECHANISM

Seats&Mechanism

FLAG

NUTS

CAGE

NUTS

PIPE NUTS

&SLEEVE

Others

35

E-Mobility

Batteries

New mobility trendAFP to lead automotive megatrends

Autonomous driving

Comfort Safety Mobility

Strong and promisingclient portfolio


Braking systems

36

Full Service Provider (FSP)Strong and promising

client portfolioFull complement of customized logistic services on global level

FSP

2 dedicated

units

€ 53 M

global revenues

in 2017

Automotive

and Industrial

customers

• Commercial vehicle

OEM

• Customer globalization

support

• Product out of Agrati

range

Strategy

• Full supplier panel

management



37


perspectives


Solid & promising

client portfolio

Stable & Attractive

market

Strong market

positioning


Platform for growth

Value creation

platform

38

Agrati Production SystemEfficient and profitable

industrial system

In a complex industrial environment, our unique production standard makes us sound and resilient to

market needs and flexibility requirements

APS is the platform to address integration processes of newly acquired companies

Annual

production

160.000 tons

produced

8 billion

shipped

parts

Raw

material

preparation

Cold

forging

Threading Machining

Heat

treatmentSurface

treatment

Automatic

sortingDelivery

Vertically integrated manufacturing process Proprietary standard production system


39

Agrati University and Agrati Care

Company Welfare

Efficient and profitable industrial system


Enablers of competencies, quality, retention and efficiency

Corporate Academy Model

• 38 catalogue courses

• 25 certified trainers

• +140 courses done in ’16 - ’17

• +1.800 people trained in ’16 - ’17

Cooperation with Schools and UniversitiesActive collaboration with 17

institutes

People Empowerment

• +120 people

• 15 teams

• 48 projects

Talent Management

• Avg Tenure of Top Mgmt > 13 years

• Young potentials

Retention

• Company attractiveness

• Average turnover rotation

below 5% per year

• ~80% of employees

satisfied or very satisfied*

*Employees survey 2016

• 12 Agrati Care initiatives in ’17

• 34 scholarships granted in ’16 - ’17

40

Operational excellenceEfficient and profitable

industrial system


270340 330 340 370 410

490

658

25,8%

23,5%

25,1%24,6%

23,6%

22,5%21,8%

20,8%

2010 2011 2012 2013 2014 2015 2016 2017

Revenues Labour cost %

LABOUR COST TREND 2010-2017REVENUES / EMPLOYEES TREND 2010-2017

>1.000

equipment

>25.000

part numbers*>2.600

employees

KEY

FIGURES


142160

177 178192

211227

252

1.908

2.123

1.866 1.907 1.925 1.941

2.157

2.607

2010 2011 2012 2013 2014 2015 2016 2017

Rev / employees [k€] Employees

Operating KPIs at the highest industry standards, sustainable over time

*Includes make and buy products

41

Quality managementEfficient and profitable

industrial system


APS Quality Management is aimed to design a sound process from the

beginning in order to ensure consistent results in delivery

IPB TREND(Incidents Per Billion)


119

99

114

8276

46

2012 2013 2014 2015 2016 2017

160.000

control plans250.000

batch checking

> 9 mln

checks

KEY

FIGURES

> 30.000

instruments

PPM TREND(Defective Parts Per Million)

2012 2013 2014 2015 2016 2017

<1

QUALITY

CERTIFICATION

<1 <1 <1 <1 <1

42

Supply chainEfficient and profitable

industrial system


• APS Supply Chain Excellence is aimed to drive superior performance through vendors management and

manufacturing plants management

• We are focused to serve our customers with the best service level reducing total logistics costs

• APS Lean is a planning concept to streamline operations and improve efficiency throughout the value chain

OTD TREND(On Time Delivery)

INVENTORY LEVEL TREND

350

heavy trucks

700

tons shipped

>430

delivery points

>150

suppliers

Daily

volumes


91%

94%95%

93%

96%

98%

2012 2013 2014 2015 2016 2017

75,2

92,8 87,4 87,1 86,9 81,6

109,1 112,6

28%27%

26%26%

23%

20%

18% 17%

2010 2011 2012 2013 2014 2015 2016 2017

Inventory value [M€] Inventory on revenues

43


perspectives


Solid & promising

client portfolio

Stable & Attractive

market

Strong market

positioning


Platform for growth

Value creation

platform

44

Agrati business development capabilitiesPlatform for growth


• Acquisition of CVB

• Creation of a specialized centre for engineered products development (AFP)

Italian small

company

development

• Foundation of YAF, Agrati plant in China

• APAC commercial development and customer proximity

Greenfield

investment

• Acquisition of a French company with 3 plants and foundation of Agrati France

• Restructuring of a non performing company, creation of a profitable condition

Distressed

company and

turnaround

• Acquisition of CMG, one of the main players of American automotive fastener market

• Dedicated centre for engineered products (AFP)

Profitable

company

integration

Strong

management teamKey

enablers

Technical

leadership

Agrati history shows an effective capability to address integration

processes in different scenarios

Organizational

model

2003

2005

2010

2016

45

Solid and profitable growthPositioning and

perspectives

Agrati shows above average revenue growth & EBITDA margin vs peers

Source: annual reports; websites; Aida; Onesource/Hoovers DB

Revenue CAGR

(‘14 – ‘17)

EBITDA % 2017

MARKET MAP KEY PLAYERS

Specialized

Differentiated

Other

LISISFS

Fontana

Kamax

Agrati

Sundram

Gem-year

Bulten

Trifast

Bollhoff

EJOT

QST

San ShingFastech

Ribe

Brugola

Agratiorganic

0%

5%

10%

15%

20%

25%

0% 5% 10% 15% 20% 25% 30%

Revenues

‘17

Platform for growth

46

M&A activity in the fastener industryPositioning and

perspectives

Low market concentration shows further opportunities for M&A

The market is undergoing a strong consolidation momentum with a

relevant number of M&A deals

TOP 10 players18%

Others82%

FASTENER MARKET CONCENTRATION

24

14

30 29

35

29

41

4749 49

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

# OF FASTENER MKT M&A DEALS PER YEAR 2008 - 2017

Source: annual reports; websites; Aida; Onesource/Hoovers DB; fastenernewsdesk.com

Platform for growth

47

Five value creation paths for future growthPositioning and

perspectives

GEOGRAPHIC

EXPANSION

INDUSTRY

EXPANSION

PRODUCT

DIVERSIFICATION

VERTICAL

INTEGRATION

MARKET

PENETRATION

• Top-line boost

• Bottom-line boost

GROWTH TYPE RATIONALE/DRIVERS ORGANIC FIT M&A FIT FOCUS AGRATI

Riding market trends

Expansion: Innovation & know-how

New leadership in market niches

Share of wallet growth

New customers acquisition

Increase margins (up/downstream)

Value added processes insourcing

Balancing APAC presence

New customers acquisition

Production costs efficiencies

Develop industry portfolio

Management capabilities exploitation

Risk balancing

Low Medium High

Aerospace Medicals

Engineered

products

Electric

components

Light material

& plastic

Special screws

& rivets

Distributors

China

KoreaJapanChina

Coatings & heat

treatments

Platform for growth

48




• Key financials


• Appendix

AGENDA

49

337 376405

427 467

62

191

13A 14A 15A 16A 17A

8%

18%

Organic

Total

CAGR 13-17

489

658

2,0x

Net Revenues evolution

H1 Net Revenues Bridge – M€

• Resilient organic and M&A growth over the past

5 years, doubling revenues

• 8% CAGR organic growth

• H1 2018 revenues negatively impacted by €12M

of FX impact (mainly US Dollar) with H1 2018

net of FX impact of €360M (+5% vs H1 2017)

Net Revenues evolution (2013 – 2017) – M€


344 34811,9 360

H1 2017 H1 2018 FXImpact

H1 2018ex FX Impact

5%

Growth

IFRS Agrati Inc.ITA GAAP

Key financials

50

558,0 -7,6

-4,751 1,6 52 1,7 54

H1 2017 ∆ Mix/Price ∆ Raw Materials

∆ Other H1 2018 Manag.Adj

H1 EBITDAw/ Man. Adj

FXImpact

H1 2018ex FXImpact

16,0% 14,5% 14,9%(3)15,0%

3343

62

80

102

13A 14A 15A 16A 17A

3,1x

EBITDA evolution

H1 EBITDA Bridge – M€

EBITDA

Margin

EBITDA evolution (2013 – 2017) – M€

Indexed contracts (% on revenues)

• Solid EBITDA growth (3,1x in the last 5 years)

driven by operating costs optimization,

improved product mix and M&A

• H1 2018 EBITDA net of FX impact consistent

with H1 2017 EBITDA, with 14,9% margin

• Strong growth of indexed sale contracts: +31

pp. (’16 vs. ’17) and +6 pp. (’17 vs. ’H1 18)

- €3,2M variab.

prod. costs

(1)(1)

(1) Adjusted EBITDA

(2) Including management adjustments due to extraordinary logistic costs

(3) Based on Net FX Impact revenues

(2)

IFRSITA GAAP

3,7%

34,7%40,8%

16A 17A H1 18

37,1 pp

Key financials

51

7 8 8 915

916

23 19

30

13A 14A 15A 16A 17A H1 2018

77 77 73

117 108125

13A 14A 15A 16A 17A H1 2018

23,0% 20,6% 18,1% 23,9% 16,5% Avg: 19,5%

TWC & capex evolution

• TWC over revenues

decreases over years,

due to the adoption of

a lean inventory

management

strategy…

• …unlocking capital for

significant investments

Capex evolution (2013 – H1 2018) – M€

TWC evolution (2013 – H1 2018) – M€

TWC /

Revenues

USA

M&A

Mkt Benchmark(1)

(1) Bloomberg data on a benchmark

of 7 listed competitors

(2) Affected by Sept. 2016 M&A

(3) Not considering 2016 data

(2) (3)

5,0%

5,6%

16A 17A

Mkt Benchmark(1)

34,5%35,9%

16A 17A

Agrati:

19,5%

Agrati:

6,4%

IFRSITA GAAP

16

24

3128

45

15

Capex /

Revenues4,6% 6,5% 7,7% 5,7% 6,8% Avg: 6,4%

(3)(2)

Capacity & efficiency Maintenance

n.a.

breakdown

maintenance

vs capacity

Key financials

52

82 83 80

38

236 223

227

13A 14A 15A 16A 17A H1 2018

2,5x 1,9x 1,3x

1,6x

2,3x

264

3,3x

1,3x0,6x0,7x0,7x 1,1x

NFP & operating cash flow evolution

NFP evolution (2013 – H1 2018) – M€

NFP / EBITDA

• Healthy NFP despite continuous

investments and M&A activities

carried out over the years

• A yearly strong cash generation

between €30M - €40M, allows the

company to pursue organic growth

and M&A activity

25 2839

58

73

31

13A 14A 15A 16A 17A H1 2018

Operating cash flow evolution (2013 – H1 2018) – M€

USA

M&A

NFP / EQUITY

(1) Affected by Sept. 2016 M&A

(1)

(1)

IFRSITA GAAP

Key financials

53




• Key financials


• Appendix

AGENDA

54

Transaction overview

Business Combination will be in the form of a merger of Agrati into IDEAMI

Mostly primary transaction: up to €175M(1) (70% of IDEAMI Proceeds) devoted to fund Agrati Group future growth

Listing of Agrati on the AIM market of the Italian Stock Exchange

Key Transaction

Objectives Enhance Agrati financial flexibility to continue its growth strategy

Future admission to STAR segment of MTA markets is targeted

The transaction represents one of the largest Italian listing in 2018

(1) That can be reduced up to €115M depending on the exercise of the withdrawal right


55

Valuation

• Approach: Net Asset Value

Valuation Approach

Transaction Data

Valuation Approach

• Approach: DCF and Multiples

• Reference valuation date: 30.06.2018

• IDEAMI Equity value: €258,75M(4)

• IDEAMI NAV per share €10 at Business

Combination

• Withdrawal right price has been set at €10 per

share

Transaction Data

• Equity Value: €506M(1)

• Enterprise Value: €713M(2)

• Implied Multiples on 2017 financials:

− EV/EBITDA adj(3): 7,0x

− EV/EBIT adj(3): 11,0x

Exchange ratio set at 2,53 IDEAMI ordinary shares each Agrati share

(1) Considering surplus asset of €7,8M related to minority shareholding in ABF

(2) Based on €215,1M net financial position as of August 2018

(3) 2017 IFRS adjusted for non recurring items

(4) Assuming no withdrawal


56

Key transaction steps

2 steps occurring simultaneously upon merger completion

• Merger of Agrati into IDEAMI with the resulting company assuming the name of Agrati

• Exchange ratio set at 2,53 IDEAMI ordinary shares each Agrati share

• Agrati Holding receives up to 5,05M(1) assignment rights, to subscribe up to 1,63M(2) of

ordinary shares, within 5 years, with the following conditions:

- Strike price, mandatory exercise conditions in line with IDEAMI outstanding warrants

- Knock-in barrier price set @ €13/share(3)

• IDEAMI acquires 14,8% stake in Agrati for €75M, which could be reduced accordingly

by the first €15M of withdrawals

• Agrati Holding acquires 27,5% Sponsors’ shares from IDEAMI Sponsors

Acquisition

Business

Combination

(1) Assuming no withdrawal

(2) Assuming no withdrawal and max dilution

(3) Calculated as the weighted average daily price of the calendar month before the exercise


57

Shareholders structure evolution

(1) Excluding Sponsors’ shares, assuming the conversion of the first Tranche of Sponsors’ shares

(2) Market shares + Banca IMI’s ordinary shares without lock up

At Business Combination(1) At €15,5 (Fully diluted)

No

Withdrawal

30%-1

Withdrawal

Agrati Holding62,7%

DeA Capital3,5%

Banca IMI3,5%

Market30,2%

Free float

33,2%(2)

Free float

24,4%(2)

Agrati Holding58,4%

DeA Capital5,4%

Banca IMI5,4%

Market30,7%

Agrati Holding71,1%

DeA Capital3,9%

Banca IMI3,9%

Market21,2% Agrati

Holding65,6%

DeA Capital6,0%

Banca IMI6,0%

Market22,4%


58

Corporate governance & lock-up

Lock-up

commitments

Corporate

Governance

• 24 months lock-up for Agrati Holding and its controlling shareholder

• Lock-up on ordinary shares from conversion of Sponsors’ shares:

− 18 months for DeA Capital and Banca IMI

− 24 months for Agrati Holding

• Shareholders' agreement between DeA Capital and Agrati Holding

• Board members selected in line with STAR market segment best practices in terms of

independency and gender

• Board of Directors will consist of 7 members:

− 5 appointed by Agrati Holding

− 2 appointed by DeA Capital

• Chairman of the Statutory Auditors appointed by DeA Capital

• Cesare Agrati as President & CEO and Paolo Pozzi as CEO


59

End of the withdrawal

right exercise period by

IDEAMI shareholders

Transaction timeline

October November December February

IDeaMI and Agrati BoD

approvals of the

transaction

28 07

Today Investor

Presentation

30

IDEAMI ordinary and

extraordinary

Shareholders’ meeting to

approve the transaction

End of creditors

opposition period

January

2018 2019

20-25 days

60 days

Merge of Agrati in IDEAMI

to be effective


60




• Key financials


• Appendix

AGENDA

61

Organization chart

President & CEO

C. Agrati

Vice President

A. CostantiniSince 2016

CEO

P. PozziSince 1995

CFO

A. CostantiniSince 2016

Quality

W. MauriSince 2007

HR

G. BellaSince 2011

Purchasing

M. BellatiSince 2014

IT

A. CaprioliSince 2015

Sales & Marketing

G. SbaragliSince 2009

Operations

L. ZaniboniSince 2007

R&D

G. BizzozzeroSince 2011

Product development

M. TestaSince 1999

Agrati S.p.A.

P. PozziSince 1995

Agrati CVB

A. SalaSince 2011

Agrati FSP

I. MoroniSince 2002

YAF

L. Cancian

Since 2015

Agrati Inc.

P. JohnsonSince 2015

EC Executive Committee member

Note: Please note that the Management Committee also includes Mr. Fabrizio Perini, the Group CAO

Agrati France

P. DejeanSince 1989

Experienced & Loyal Management team with strong engineering and manufacturing expertise

Appendix

EC Company Management

62

Income statement

2016A 2017A H1 17 H1 18

Net Revenues 488.506 658.077 343.523 348.222

Cost of Revenues (376.475) (520.340) (268.818) (278.613)

Gross Profit 112.031 137.737 74.705 69.609

Other operating income 5.935 3.712 1.082 1.522

Other operating expenses (4.248) (2.436) (781) (1.241)

Selling expenses (27.876) (33.622) (17.172) (17.524)

General and Administrative expenses (31.620) (40.315) (21.530) (20.767)

Other non-recurring income 136 4.772 134 -

Other non-recurring expenses (4.519) (674) (290) -

Operating Profit / (Loss) 49.839 69.173 36.148 31.599

Financial income 1.271 1.306 569 467

Financial expenses (5.401) (10.104) (5.351) (5.052)

Net financial income / (expenses) (4.130) (8.797) (4.782) (4.585)

Profit / (Loss) from investments in related entities (122) (1.657) (1.657) (6)

Profit / (Loss) before taxes 45.586 58.719 29.710 27.008

Income taxes (12.609) (6.989) (10.277) (8.088)

Net Profit/(Loss) 32.978 51.730 19.432 18.921

Net Profit/(Loss) attributable to the Group 30.689 51.730 17.934 18.921

Net Profit/(Loss) attributable to non-cont. Int. 2.289 - 1.498 -

Appendix

Data in k€

63

Balance sheetASSETS 2016A 2017A 2017 Restated H1 18

Property, plant and equipment 205.978 208.569 200.980 201.661

Goodwill & int. assets with indef. useful lives 61.198 53.789 53.789 55.324

Intangible assets 113.648 94.591 94.591 93.701

Investments in related entities 10.054 8.397 2.189 2.186

Other non-current financial assets 2.742 2.560 2.280 2.996

Deferred tax assets 9.309 7.732 7.732 7.233

Other non-current assets 3.412 4.119 4.119 1.903

Total Non-current assets 406.341 379.757 365.681 365.004

Inventories 109.099 112.737 112.737 121.236

Trade receivables 106.941 108.168 108.168 121.612

Current tax assets 3.808 2.320 2.320 3.796

Other current receivables 11.391 12.053 12.053 9.548

Assets held for sale - - 1.531 156

Current financial assets 777 1.531 - -

Cash and cash equivalents 45.665 35.230 35.230 39.935

Total Current assets 277.682 272.039 272.039 296.282

Assets held for distribution 14.077 13.961

TOTAL ASSETS 684.023 651.796 651.796 675.247

EQUITY AND LIABILITIES 2016A 2017A 2017 Restated H1 18

EQUITY

Share capital 20.000 20.000 20.000 20.000

Reserves 101.845 93.219 93.219 130.025

Profit / (Loss) brought forward 5.988 17.835 17.835 36.131

Net result for the year attributable to the Group 30.689 51.730 51.730 18.921

Group Equity 158.521 182.784 182.784 205.076

Non-controlling interests 7.668 - - -

Total Equity 166.189 182.784 182.784 205.076

LIABILITIES

Non-current financial debt 217.968 179.061 179.061 181.771

Other non-current financial liabilities 15.750 22.995 22.995 15.750

Employee benefits 12.602 11.695 11.695 11.123

Deferred tax liabilities 44.981 29.420 29.420 29.931

Long-term provisions 2.824 2.636 2.636 1.318

Other non-current liabilities 256 646 646 1.231

Total Non-current liabilities 294.381 246.454 246.454 241.124

Current financial debt 51.127 39.977 39.977 32.968

Current portion of non-current financial debt 26.043 31.133 31.133 32.243

Trade payables 99.243 112.471 112.471 117.677

Current tax liabilities 4.067 4.000 4.000 4.582

Short-term provisions 5.837 1.727 1.727 1.670

Other current liabilities 37.136 33.251 33.252 39.908

Total Current liabilities 223.453 222.558 222.559 229.047

TOTAL EQUITY AND LIABILITIES 684.023 651.796 651.796 675.247

(1)

(1) Restated to reflect the assets held for sale classification

(1)

Appendix

Data in k€

64

Cash flow statement2016A 2017A H1 17 H1 18

Cash and cash equivalents at the beginning of period 46.928 45.665 45.665 35.230

Net Profit / (Loss) 30.689 51.730 19.432 18.921

Depreciation, Amortization 25.724 36.866 18.629 18.921

Net gains/losses on disposal of PPE and intangible assets (393) (1.623) 290 -

Change in provisions 1.481 (5.205) 4.255 (1.946)

Change in tax assets/liabilities 2.892 1.421 - (895)

Change in inventories 7.112 (3.638) (2.502) (8.498)

Change in trade receivables (4.499) (1.227) (24.752) (13.445)

Change in trade payables 1.546 13.228 9.225 5.206

Change in other payables and receivables (6.876) (18.920) 3.952 12.997

Cash flow from operating activities 57.674 72.633 28.530 31.260

Acquisition of PPE and intangible assets (27.789) (44.926) (20.875) (14.941)

Proceeds from the sale of PPE and intangible assets 11.008 7.523 764 210

Net cash used in investing activities (16.781) (37.403) (20.111) (14.731)

Acquisition of subsidiaries, net of cash acquired (230.598) (17.727)

Proceeds from non-controlling interests 15.750 - 1.974 -

Acquisition of other non-current financial assets 3.062 (572) 233 659

Change in investments in related entities 141 1.657 - 3

(Payments) / Proceeds from loans and borrowings 178.611 (37.723) (25.215) (10.433)

Dividends paid (10.500) -

Net cash from financing activities (43.535) (54.365) (23.008) (9.771)

Translation exchange differences and other changes 1.379 8.700 (6.184) (2.053)

Total change in cash and cash equivalents (1.263) (10.435) (20.773) 4.705

Cash and cash equivalents at the end of period 45.665 35.230 24.893 39.935

Appendix

Data in k€

65

Agrati performance

2009 = 100%, indexed

VEHICLE PRODUCTION VS AGRATI PERFORMANCE

Global vehicle production*

Agrati organic

Agrati inorganic

Product portfolio positioning allowed the company to organically outgrow the

vehicles mkt by ~2x organically and ~3x considering the acquisitions

~2X

~3X

2009 2010 2011 2012 2013 2014 2015 2016 2017

Source: Company data; ANFIA report

163

331

459

*Not included heavy commercial vehicles and trucks

100 100

Appendix

66

Current shareholding structure

• Ordinary Shares: 25.000.000

• Promote Shares: 875.000

− Not listed, no entitlement to ordinary dividends and no

voting rights

− 6:1 conversion to Ordinary Shares at certain triggers

• Market Warrants: 5.000.000 (issued) + 7.500.000 (@BC)

− Strike Price: €10,5

− 2 warrants every 10 ordinary shares at IPO

− 3 warrants every 10 ordinary shares at BC

DeA Capital8,25%

Banca IMI8,25%

Market83,50%

Cesare Agrati

(2)

Carlos Agrati M. Giulia Fumagalli

Agrati Holding

Agrati S.p.A.

2,5%(1)

100%

0,1%(1)97,4%(1)

(2)

(2)

(1) Net of 19,67% of treasury shares

(2) Based on Ordinary shares

Appendix

67

Disclaimer

For the purposes of this disclaimer, this presentation (the “Presentation”) comprises the attached slides, the speeches made by the presenter(s), the questionand answer session and any materials distributed at, or in connection with, the Presentation. THIS PRESENTATION IS STRICTLY CONFIDENTIAL AND ISBEING PROVIDED TO YOU SOLELY FOR YOUR INFORMATION. This Presentation is being made available to a limited number of recipients solely for thepurpose of introducing the Company. This Presentation is strictly confidential. It is furnished to you solely for your information, should not be treated as aninvestment advice and may not be copied, reproduced, distributed or otherwise made available (in whole or in part) to any other person by any recipient. Inparticular, neither this document nor any copy thereof may be taken or transmitted or distributed, directly or indirectly, into Canada, Japan or Australia or to anyresident thereof or into the United States, its territories or possessions. The distribution of this Presentation in other jurisdictions may be restricted by law andpersons into whose possession this document comes should inform themselves about, and observe, any such restrictions. Any failure to comply with theserestrictions may constitute a violation of the laws of the United States, Canada, Japan, or Australia or any such other jurisdiction. By accepting this report youagree to be bound by the foregoing limitations. This Presentation is not an offer of securities in the United States or any other jurisdiction. Securities may not besold in the United States without registration or without any case of exemption from registration under the U.S. Securities Act of 1933, as amended. IDeaMIS.p.A. (“IDeaMI”) and A. Agrati S.p.A. (“Agrati”) have not registered and do not intend to register any offering of securities in the United States or to make anypublic offering in any jurisdiction. This Presentation does not constitute or form part of, and should not be construed as, an offer or invitation to subscribe for orpurchase any securities, and neither this document nor anything contained herein shall form the basis of or be relied on in connection with or act as anyinducement to enter into any contract or commitment whatsoever. This document has not been published and has only been made available to institutionalinvestors. This Presentation contains summaries of many matters regarding this potential transaction that should be covered in greater detail in the IDeaMI andAgrati’s mandatory documentation as well as in the proxy statement IDeaMI will prepare relating to the proposed transaction (the “Proposed Transaction”). Thispresentation should be read together with, and is qualified in its entirety by, the mandatory documentation above as well as the proxy statement, and you shouldread all the abovementioned documentation, including the risk factors set forth therein. Certain statements made in this presentation are forward-lookingstatements. These forward looking statements are based on management’s current expectations and estimates. They are subject to a number of assumptionsand involve known and unknown risks, uncertainties and other factors that may cause actual results and developments to differ materially from any future resultsand developments expressed or implied by such forward looking statements including but not limited to the factors described under “Risk Factors” in IDeaMI’spublic filings. IDeaMI and Agrati have no obligation to periodically update or release any revisions to the forward-looking statements contained in thispresentation or reflect events or circumstances after the date of this document. This Presentation contains industry statistical data and growth forecasts forindustry segments prepared by third parties. IDeaMI and Agrati did not prepare such data and forecasts and assume no liability for the same. By acceptingreceipt of this document and/or attending any presentation of the same, each recipient acknowledges the confidential nature of the information it contains andundertakes not to disclose it in any way either in Italy and/or abroad, and not to use the information for purposes unrelated to the Proposed Transaction, inaccordance with the Confidentiality Agreement signed by each recipient. By attending this Presentation you will be taken to have represented, warranted andundertaken that: (i) you have read and understood and agree to be bound by and comply with the contents of this notice; and (ii) you will treat and safeguard asstrictly private and confidential all such information and take all reasonable steps to preserve such confidentiality.

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