Interpump S p A : IP - Trascrizione conference call risultati finanziari 3Q2022 (versione solo in inglese)

Interpump Group

"Third Quarter, 2022 Results Conference Call"

November 10, 2022; 05:30 PM CET

MODERATORS: FABIO MARASI, BOARD MEMBER AND EXECUTIVE DIRECTOR

ELISABETTA CUGNASCA, HEAD OF INVESTOR RELATIONS

OPERATOR: Good afternoon. This is the Chorus Call Conference operator. Welcome and thank you for joining the Interpump Group Third Quarter 2022 Results Conference Call. As a reminder, all participants are in listen-only mode. After the presentation there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing "*" and "0" on their telephone.

At this time, I would like to turn the conference over to Elisabetta Cugnasca, Head of Investor Relations. Please go ahead, madam.

ELISABETTA CUGNASCA: Thank you very much. Good afternoon or good morning according to your time zone and welcome to Interpump third quarter 2022 financial results conference call. I am Elisabetta Cugnasca, Head of Investor Relations of Interpump Group. Before leaving the stage to Mr. Marasi, Board Member and Executive Director of the Group, I'm obliged to draw your attention to the disclaimer slide inserted in the annex part of the presentation. I hope you were able to download it from the website.

FABIO MARASI: Thanks, Ms. Cugnasca, and thanks to all of you for the attendance. For the presentation of this evening, I would like to start from the very end of the previous one, the second quarter '22 financial results. And to be more precise from some of the questions you made related to the year 2022 and to the outlook for 2023. This is because I believe that the financial results that we are going to comment related to the third quarter '22 are from one side the evidence of the ongoing delivery of '22 commitments and from the other our comfortingsupport of what we envisaged last August for 2023.

To what did we commit ourselves and for 2022. We committed ourselves first to exceed€2 billion in sales through a double-digit organic growth and acquisitions. Second, to confirm and protect the profitability excellence. Why the third quarter 2022 results are the evidence of this on-going delivery, because we delivered an organic growth of 15.7% and a 16.6% growth impact is coming from acquisitions. Please look at these numbers as we are looking at them, organic growth and external growth are almost the same. And despite

1. comparison base that is getting more difficult quarter-after-quarter, our performance is continuously accelerating. It was 12.6% organic growth in the first half of this year and now it's 15.7% in the third quarter.

Second point, the EBITDA margin for the quarter was even better compared to the third quarter 2021, 23.9% versus 23.7% of the same period of last year. As for the first time this year, it is higher in comparison with 2021, and therefore, the 9-mouthsbasis,Group is closing the gap with only 20 basis points of dilution.

And third point is because White Drive integration is on-going. What do we envisage for 2023? We envisage a positive organic growth based on the record high level for the backlog for the Group. And why now, the third quarter '22 results are support of what we envisage? It's because autumn started in line with previous months, it's because we are delivering our growth mission without distraction even in this difficult environment. We are delivering the production capability enhancement program we launched this year with around €75 million of CAPEX in the 9months, and because we are also delivering our Group acquisition strategy after Draintech in May this year. Two weeks ago, we closed the acquisition of Euro fluid that we'll comment later on.

Fourth point is because from a broader point of view, they reflect the benefit of our never ending diversification strategy. In terms of division, Hydraulics supported growth and Water Jetting supported profitability. Therefore, before entering in the third quarter '22 details, I would like to anticipate my conclusion. These spectacular set of results is supporting both the delivery of 2022 commitments and as far as we are seeing, our first assumptions for another year of organic growth in 2023.

Moving now to the third quarter details, sales are up by almost 34% on total basis and moreover by almost 16% on organic base with double- digit organic growth in both divisions. For many reasons, I would like to briefly underline you this [indiscernible]. The first is that these results comes after the almost 18% registered in the third quarter '21,but this 18% was driven by COVID comparison effect, while now the comparison effectis absolutely against.

Second, the growth is more than double the historical 2011 and in 2021 data that is…that was something around 6% in terms of organic growth. Third, it is driven by double-digit results in both divisions. In second quarter '22 Water Jetting division registered only a 5.5% organic growth and we explained that in spring we had to face some raw material and components shortage and that we will recover incoming months,delivered.

Finally, and above all, it shows that there is…what there is behind? There is the capability of sales departments to receive orders from customers in an environment characterized by increasing prices and promptly adjust the prices without hampering relationship with customer. And second, there is the capability of the operation departments to transform ordersand invoices in an environment of logistic and supply chain issues and keep production going because of

the raw material and spare parts that we have in our inventory, and within a longer horizon because we are able to increase the industrial capability whenever it is needed.

Taking briefly into account the other growth driver,perimeter change and FX, I would like to mention that perimeter change of the quarter were mainly White Drive and Draintech. White Drive we will discuss later on the details and regarding the progresses that we are achieving. Draintech was the small but perfect acquisition that we did last May in the power transmission business. These 2 acquisitions explains something close to 17% growth.

FOREX in the quarter had a positive impact of around 7%. And speaking about FOREX, of course, please always keep in mind that that it's mostly a translation effect because Interpump Group mostly produce and mostly sell in the same currency.

Closing the loop on salessome details on our performance in terms of application sector and geographies. In terms of application sector, I will focus on the most important ones that represent more than 5% of our turnover in the quarter.Industrial vehicles were up by more than 17%, agriculture and forestry up by almost 50%, lifting up by 30%, cleaning up by around 13%, construction 10%, earth moving 30%, and so on.

In terms of geographies, always keep a materiality approach.Italy was up by almost 15%, US up almost 30%, Germany around 10%, last but not least, China to be mentioned to keep you posted and not for its importance, because it represents less than 5% of our sales, finally recorded something more than a positive sign, recording a plus 30% result after lockdown and in some important regions.