investor presentation 26 june 2020 · covered). the company has a production capacity of 50,000...

INVESTOR PRESENTATION26 June 2020

This document has been prepared by Neodecortech S.p.A. (“NEODECORTECH”) solely for use in connection with the pres-entation of the Company to potential investors and shareholders and may not be used for any other purposes.The information contained in this document has not been inde-pendently verified and no representation or warranty express or implied is made as to, and no reliance should be placed on the fairness, accuracy, completeness or correctness of the information or opinions contained herein. Certain information contained in this presentation may contain forward - looking statements which involve risks and uncertainties and are subject to change. Actual results may differ materially from those contained in any forward-looking statement due to a number of significant risks and future events which are outside NEODE-CORTECH’s control and cannot be estimated in advance such as the future economic environment and the actions of competitors and others involved on the market. These forward-looking state-ments speak only as at the date of this presentation. NEODECORTECH cautions you that forward looking-statements are not guarantees of future performance and that its actual financial position, business strategy, plans and objectives of management for future operations may differ materially from those made in or suggested by the forward-looking statements contained in this presentation. In addition, even if NEODECORTECH’s financial position, business strategy, plans and objectives of management for future operations are consistent with the forward-looking statements con

DISCLAIMER

tained in this presentation, those results or developments may not be indicative of results or developments in future periods. NEODECORTECH expressly disclaims any obligation or undertak-ing to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in NEODE-CORTECH expectations with regard thereto or any change in events conditions or circumstances on which any such statement is based.The information and opinions contained in this document are provided as at the date of this presentation and are subject to change without notice. The recipient will be solely responsible for conducting its own assessment of the information set out in this presentation and for any underlying business decision. NEODE-CORTECH has not made an independent evaluation or appraisal of its own shares, assets or liabilities (contingent or otherwise). None of NEODECORTECH, its shareholders, or any of their respec-tive affiliates, advisers or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this document.The information contained in this presentation may constitute inside information pursuant to EU Regulation n. 596/2014, therefore the recipient undertakes to comply with the applicable regulations and, in particular, to not disclose them (i.e. by transmitting, circulating or publishing) in any way.By accepting this presentation, you acknowledge and agree to be bound by the foregoing limitations and restrictions.

1. Neodecortech at a glance

TABLE OF CONTENTS

2. Market

The VisionGroup structureConfalonieri, Plana, TexteCartiere di Guarcino S.p.A.Bio Energia Guarcino S.r.l.Plants and OperationsVertical integration benefitsIntercompany flowsProduct linesGroup figures 2019Revenues 2019 breakdown by SBUManagement TeamCompany GovernanceShareholdersNeodecortech: main historical milestones

4. Growth strategyKey investment highlightsInvestment Opportunities

5. Neodecortech’s sustainability approach

StrategyThe stakeholdersESG approachMateriality matrix & SDGsEnvironmentSocialGovernanceCertificationsCertifications historyKey contacts

Total paper and paperboard marketFocus on selected nichesDécor paper marketGlobal supply and demand of décor paperNeodecortech: geographical reachStrategic positioning

3. Financials

Consolidated revenues Revenues breakdownCosts breakdownP&L EBITDA analysisNET INCOME - analysisNWC & cash flow analysisCash flow analysis 2019Net financial positionDebt maturityIncome statementBalance sheet statement

1. NEODECORTECH AT A GLANCE

51. Neodecortech Group at a glance

THE VISION

Neodecortech,

a group 100% Made in Italy.

3 companies sharing the same vision

and a clear industrial strategy:

“Providing the interior design industry with high-end products

enhanced by distinctive Italian flair”


GROUP STRUCTURE

Neodecortech is an industrial holding

100% owned

100% owned

+

+

Cartiere di Guarcino S.p.A.

Bio Energia Guarcino S.r.l.

Neodecortech S.p.A.Printing andimpregnation

Bergamo

Energy plant+

Paper millGuarcino

Casoli di Atri Lamination

LPI

PM

EP


Printing, impregnation, lamination units

Neodecortech, founded in 1947, is the parent company of the Group; under the brand name Confalonieri, it ranks as the

top player in the niche of decorative surfaces design and manufacturing (mostly paper, plus plastic more recently) for

the interior design and flooring industries. Neodecortech is the Italian leader in the production of decorative paper for

laminated panels and flooring used for interior design.

The Group’s business revolves around the production of complete and cutting-edge solutions for interior design projects,

covering every stage of the production process of decorative paper, from raw material management, through surface

finishing and impregnation, to the finished product and management of end-of-line logistics.

Thanks to ongoing creative research, the Group offers almost 900 types of decorations representing different natural

materials such as wood and stone, surfaces such as metal and cement, as well as textures of textile inspiration and

abstracts. The Group provides products divided into 6 categories:

- décor papers;

- decorative printings;

- finish foil;

- melamine film;

- Plastic printed film & Plastic printed laminated film;

- laminates.

LPI


Paper mill

Cartiere di Guarcino S.p.A. is located in Italy, in the town of Guarcino (FR), and occupies an area of 144,000 m2 (of which

21,000 m2 covered). The Company has a production capacity of 50,000 tons/year. It manufactures decorative papers

for high and low pressure lamination as well as for flooring. Cartiere di Guarcino is a continuously developing company

of world renown. Over the past few years, it has gained a solid foothold on the European, American, Asian and East

European markets.

The Company offers its customers a wide range of “decor papers”: print base papers, backer papers, underlay papers,

edge banding papers and unicolour papers.

An innovative and trendy catalogue has been dedicated to the latter, named “Let’s colour”.

Cartiere di Guarcino has always been innovation oriented, paying the utmost attention to environmental protection. For

this reason, through its stake in B.E.G. S.r.l., it has built an electrical and thermal energy cogeneration plant powered by

vegetable oils (biomass).

The Company strives for customer satisfaction through skilled assistance and consulting. Cartiere di Guarcino offers 3

product categories:

- base paper;

- unicolor paper;

- backer paper (+Underlay + Kraft).

CARTIERE DI GUARCINO

PM


Energy plant

Bio Energia Guarcino is totally owned by Cartiere di Guarcino; the Company is the

owner of the cogeneration plant that produces electrical and thermal energy through

three endotherm diesel engines powered by tallow oil with low CO2 emissions.

It has a production capacity of 9 steam tons and 20 MWh.

BIO ENERGIA GUARCINO

EP


PRINTING AND IMPREGNATION

ENERGY PLANT PAPER MILL

Total Area 96.978 sqmCovered Area 37.732 sqmReconstruction Value* ¤ 108 mlnFixed Assets (Net Book Value) ¤ 24,6 mlnNumber of Employees 181Number of shifts 3-5/24Impregnation SBU 2.947 tonPrinting SBU 6.456 ton

Total Area 9.000 sqmCovered Area 1.000 sqmReconstruction Value ¤ 22 mlnFixed Assets (Net Book Value) ¤ 13,3 mlnNumber of Employees 2Number of shifts 3-7/24

Total Area 144.000 sqmCovered Area 21.000 sqmReconstruction Value* ¤ 97 mlnFixed Assets (Net Book Value) ¤ 36 mlnNumber of Employees 166Number of shifts 3-7/24Production SBU Cartiere di Guarcino 36.546 ton

FILAGO (BG)

GUARCINO (FR)

All plants and machines are fully owned by the group

Total reconstruction value of plants ≈ €249mln* vs a NBV of €78,9mln**

*As per Insurance appraisal report** Source: Company informationOTA Srl 2018 data

CASOLI DI ATRI (TE)

LAMINATION

Total Area 18.000 sqmCovered Area 6.037 sqmReconstruction Value ¤ 22 mlnFixed Assets (Net Book Value) ¤ 3,6 mlnNumber of Employees 29Number of shifts 3-5/24Production 1.400 ton

PLANTS AND OPERATIONS

EP PM

PI L


KNOW HOW – R&D(Centralized R&D, co-development with the paper mill) Vertical integration brings competitive advantages in terms of:- flexibility;- competitive purchase prices;- maintaining control over R&D.

Cost savingVertical integration with the energy plant offers competitive advantages, producing significant economies of scale on energy costs (electricity and steam), and generating savings of approximately €4.85m p.a.

Operating efficiency via the energy plant- business continuity in case of grid outages;- virtually full coverage (90%) of power needs;- production efficiency;

VERTICAL INTEGRATION BENEFITS


INTERCOMPANY FLOWS

Source: Internal average standardised data 2019

% Revenues

% Costs

Bio-energy producer

(steam and electricity)

Paper mill

base, unicolorand black papermanifacturer

Electricity Market

Panel producer

Flooring producer

Impregnators

Printers

Decor layer printing

Impregnation

Plastic film printing

Paper & plastic film lamination

26% Electricity100% Steam

22%

43%100% Electricity11% Steam

74% Electricity

78% 97%

Market


Finish FoilsOur Finish foils meet the need for surfacing materials offering an authentic look, texture reali- sm and affordable manufactu-ring costs.

Decorative printed papersProduced in woodgrain, stone and fancy designs, our décor papers become the surfaces used in the furniture and floo-ring industries.

Décor PapersSemi-finished products used for High and Low Pressure Laminates and flooring divided into three main product types

- base papers;- unicolours;- backing papers.

PRODUCT LINES

Ongoing creative and stylistic research with over 900 designsdivided into 7 families


Melamine FilmsMelamine films are decorative papers impregnated with thermoplastic resins that convert into strong and durable surfaces for the furniture and flooring industries.

PPF & PPLF for luxury vinyl tilesOur printed plastic films offer the same high resemblance to natural materials as our Decorative papers, despite being produced on a plastic substrate. They are employedin the production of high performance flooring materials (LVT) and vertical surfaces.

LaminatesDecorative Laminates are surfacing materials produced in continuity with our décor papers, which cover a broad spectrum of applications thanks to their resistance, flexibility and superb appearance.

PRODUCT LINES


EOSTPThe product consists of a thin unicolor or printed plastic film of PVC or PET subsequently lacquered. It is a material with good mechanical properties and resistance to abrasion, aging, chemical agents and attack of funguses and bacteria. It is water repellent and particularly resist- ant to fire, thanks to its high ignition temperatures and low flame propagation. The special lacquering gives the surface a special soft-touch and anti-finger-print effect.

EOSLAMINATOThanks to a specific technology, the acrylic surface of Thin Top EOS LAMINATO acquires extraordinary properties such as: anti fingerprint, high scratch resistance, light fastness, no bacterial proliferation, high resistance to solvents and chemical reagents.EOS LAMINATO is a Phenol Free product, an additional choice for environment protections and consumers health confirming Neodecortech spa commitment toward the green chemistry.

PRODUCT LINES


Laminate

EOSLAMINATO

Finish Foil

Décor Paper

Melamine Film

EOSTP

Luxury Vinyl Tiles

PRODUCT LINES


GROUP FIGURES 2019

Revenues ( ¤ M)

135,9 M 4/5 1/5

51%378

Not energy

revenues

Energy Plant

adjusted revenues

EBITDA Adjusted

Margin

EBITDA Adjusted (€ M)

*Excluded Energy post turnover

Export* Employees

Women: 52

Men: 326

= +

13,2 %17,9 M


REVENUES 2019 BREAKDOWN BY SBU

Consolidated data

Source: Company information 2019

Bio Energia Guarcino S.r.l.22,1%

Neodecortech S.p.A. 42,5%

Cartiere di Guarcino S.p.A. 35,4%

EP

PM

PI L


LUIGI COLOGNI - CEO

- 56, Degree in Business Administration, MBA from Bocconi University;- Previous banking experience;- 1990s, started his experience in the furniture industry, working for multinational companies;- 2005, joined Confalonieri S.p.A. (now NEODECORTECH Italia), where he is currently CEO.

FABIO ZANOBINI - CFO

- 50, Degree in Business Administration, Certified Public Accountant and Auditor;- 1997, first 7 years experience in Law & Tax firm, principally the EY Law & Tax firm;- 2004, 4 years experience in multinational companies in the Pharma and Energy business, as Finance Director;- 2008, joined Sorgenia Spa Group, covering several roles, Head of Tax, Internal Audit Director and Head of Administration and Tax; - 2018, joined BT Italia Spa, as Head of Administration & Tax.

MASSIMO GIORGILLI - Executive Director

- 51, Degree in Law, MBA from LUISS University;- After a short stint with law firms, set up an advisory company;- 2002, started his experience in the paper mill industry, holding roles in the management control division;- 2003, joined Cartiere di Guarcino as CFO;- Following his position as CFO, appointed Executive Director in 2005;- 2015, appointed CEO of Cartiere di Guarcino and Sole Director in Bio Energia Guarcino.

MANAGEMENT TEAM


COMPANY GOVERNANCE

BOARDS OF DIRECTORS

Chairman: Riccardo Bruno

CEO: Luigi Cologni

Executive Director on CDG and Sole Director in BEG: Massimo Giorgilli

1 Non executive Directors: Cristina Valentini

4 Independent Directors: Riccardo Bruno (Chairman),

Paolo Pietrogrande, Paola Carrara, Laura Calini.

MenWomen

Set up of a Committee for:- Risk Control- Remuneration and Appointments- Related Party Transactions- Sustainability

Respect for gender equalityin the Board of Directors

Adoption of a Codeof Conduct – comply or explain

Evaluationof the members of the Boardof Directorsand of the Board of Statutory Auditors


SHAREHOLDERS

Valentini Family

Market, includingtreasury shares

AZ Fund 1

61,60%

32,92%

5,48 %


NEODECORTECH: MAIN HISTORICAL MILESTONESNEODECORTECH: MAIN HISTORICAL MILESTONES

1947Establishment of

2003Acquisition of CONFALONIERI and CARTIERE DI GUARCINOby Finanziaria Valentini

2017Group reorganizationand IPO on AIM Italia

Oct 2019Accelerated BookBuilding

Disposal of thefinancial investment in CDG International Corp.

2020Translisting on MTA



1960Confalonieri focuses on decorative papers for laminates and finished panels

1999Set up of asecond machineat Cartiere di Guarcino

2010Confalonieri’sshowroom renewal

End 2015Confalonieri starts printing PPF and inaugurates its new internal Studio for décor implementation (LAB)

Source: Company information

Sept 2018Acquisition ofCORBETTA FIAbusiness unit

2. MARKET

242. Market

TOTAL PAPER AND PAPERBOARD MARKET

Source: Decor Paper Market Research 2019 - Pöyry

0,2%Decor paper market

8%Other paperand board

6%Newsprint

310 mt (2018)

24%Total printing and writing

9%Tissue

1%Sack Kraft

40%Corrugatingmaterial

12%Cartonboards

252. Market

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

563

655

631 625

662690

710 745

505

560 540530

545 565 586

265285

290270 285 275 274

87 90 85 9095 100 100

Americas

Asia

Europa

Décor Paper (Tons/1000)

Laminate flooring market

+1.3% CAGR

+1.7% CAGR

Market Trend

Market

% Growth 2017/16+ 18,1%

Neodecortech

% LVT Growth 2015/14+29%

% LVT Growth 2016/15+202%

Source: Decor Paper Market Research 2018 - Munksjo

% LVT Growth 2017/16+26%

% LVT Growth 2018/17+60,6%

765 765

100 100 99

280 285 281

630 605635

FOCUS ON SELECTED NICHES

Total paper andpaperboard market400mt (Ex China)

262. Market

122

DÉCOR PAPER MARKET

Printers

340

Impregnators

144

L HPL/CLP, LPL/DPLLamination on

wood substrates

NDT - Confalonieri 2.2%

NDT - Texte

229

53

690

86

340

339

58

Furniture, Laminate Flooring,

Interior Applications, Etc.

22


World market in 2017:1.515 m Metric Tons

- 765k ex China - 800k China

Decor paper producers

765

NDT - Cartiera 5.3%

272. Market

GLOBAL SUPPLY AND DEMAND OF DÉCOR PAPER

West Europe is the greater exporting area in the world

EAST EUROPE

CHINA

ASIA / PACIFIC

32

22

131

12

0

493

875

15

31

32

80

17

100

75

47

53

163

92

17

393

800

PRODUCTION

PRODUCTION

PRODUCTION

PRODUCTION

PRODUCTION

PRODUCTION

PRODUCTIONDEMAND

DEMAND

DEMAND

DEMAND

DEMAND

DEMAND

DEMANDNET

NET

NET

NET

NET

NET

NET

WEST EUROPE

NORTH AMERICA

SOUTH AMERICA

MIDDLE EAST / OTHERS


282. Market

NEODECORTECH: GEOGRAPHICAL REACH

AMERICAS

AFRICA

ASIA

EUROPE

ITALY

2,6%

1,5%

33,1%

58,3%

4.4%

Sales organisation: sales activities are mainly carried out by 4 internal area managers, together with 14 agentsin certain areas (Belgium, Turkey, Brasil, Russia, Far East, North America) requiring on-site direct presence.

on-site agents

Revenues by geographical area: export 51%Note: revenues by geography excluding energy plant revenues

DecorImpreg LVT

Backer Base Unicolor

292. Market

STRATEGIC POSITIONING

Low

Integration/Diversification

(Print – Pre-impregnated – Melamine Impregnation – PPF – PPLF) HighLow

Product range

High

high

low

turn

over

EU

R m

- 2

018

Paper ProducersDécor Paper Producers(printers - impregnators)*Only Décor Paper ** Plastic business included

450

700

350

50

10

Munksjo Group (GER)*

Kingdecor (CN)

Qifeng (CN)Schattdecor (GER)

Interprint (GER)**

Impress (GER)

Decotec (SPA) Decorin

Coveright(SPA)

Likora(GER)

DDL(GER)

Surfactor (GER)

Neodecortech**

419

283

467 562

Surteco (GER)**

690

354

255BMK + DKB

(GER)Toppan (JAP)

118 183

452

219

114

Khoeler (GER)

65

Neodecortech Paper Mill

48Panigada (ITA)

7

Giacosa (ITA)

Technocell (GER)

Malta Décor (POL)

Hans Schmid (GER)

6969

Lamigraf (SPA)

Dilong(CN)

80 106100

181815 1315

87

51

11Hoffsummer (GER)

Chiyoda (B+JAP)**

302. Market

STRATEGIC POSITIONING

Low price – retail market

Limited product range Wide product range

High price – design products

Small nicheproducers

Big diversifiedgroups

Neodecortech

Chinese producers

3. FINANCIALS

323. Financials

Consolidates revenuesincludes revenuesand other revenues

110

100

100

90

80

70

60

50

- -

120

130

140 110

2016 2017 2018 2019 2019

115.6

133.5

135.9 115.6 127.7 133.5 135.9

127.7

Consolidated (€/M)

2016 20182017

By category (€/M)

Not EnergyEnergy

CONSOLIDATED REVENUES

104.0 11.6 104.7 23.0 104.0 29.5 105.5 30.4

333. Financials

REVENUES BREAKDOWN

Revenues by products* (€/M)

*- Analysis excluding energy plant

- Aggregated data

Revenues 2019

5.0

-

10.0

15.0

20.0

25.0

30.0CDG NDT

Backer paper

10.1 9.0 25.9 29.2 24.2 25.8 16.3 5.115.7 5.226.7 8.427.3 2.6

Unicolor paper Base paper Impregnated Paper

Decorative printing PPF Laminates

Revenues 2018

343. Financials

Costs and cost incidence by category (€/M)

10.0

-

20.0

30.0

40.0

50.0

60.0

70.0

80.0

Costs 2019

Costs 2018

Cost of rental

64%

4%

13%

17%

1%0,3%

66%

4%

13%15%

1%0,4%

Cost of RawMaterials

Energy Services* Personel Other

COSTS BREAKDOWN

Tot. Operative Costs€ 121.3

Variable Costs: € 93.1

Fixed Costs: € 28.3

2019

Tot. Operative Costs€ 116.1

Variable Costs: € 91.6

Fixed Costs: € 24.5

2018

77.2 4.5 14.6 18.0 0.41.4

77.5 4.8 16.2 20.7 0.31.8

*Services cost increase due to:

• Technical consultancy

• Transport costs

• Maintenance costs

353. Financials

P&L EBITDA - ANALYSIS

EBITDA (€/M)

2.0

-

4.0

6.0

8.0

10.0

12.0

14.0

16.0

17.0

18.0

19.0

16.3

13,5%*

2016 2018 2019

17.7 15.9

13,5%*

12,0%*

2017

14.3

12,1%*

EBITDA adjusted (€/M)

2.0

-

4.0

6.0

8.0

10.0

12.0

14.0

16.0

17.0

18.0

19.0

2016

12.5

10,8%*

2018 2019

19.0 17.9

14,5%*

13,5%*

2017

15.2

12,9%*

* % EBITDA on Revenue from sales and services * % EBITDA ADJ on Revenue from sales and services

EBITDA decrease explanationCost increase of:

• Personnel• SOA-Raw material

363. Financials

NET INCOME - ANALYSIS

2.0

4.0

6.0

7.0

-4.4

2016

3,9%*

4.1

2017

3,5%*

6.0 4.0

4,6%*

3,0%*

2018 2019

Net income (€/M) Net Income adjusted (€/M)

2.0

4.0

6.0

7.0

-1.3

2016

1,2%*

7.3 5.7

5,6%*

4,3%*

2018 2019

4.8

4,1%*

2017

* % NET INCOME on Revenue from sales and services * % NET INCOME ADJ on Revenue from sales and services

373. Financials

NWC & CASH FLOW ANALYSIS

Net Working Capital (€/M)

20.0

40.0

60.0

-20.0

-40.0

payables

receivables

inventory

28.0

26.3

29.8

2016

Tot: 28.1

24.1

36.0

33.2

2018

Tot: 26.8

19.2

39.1

31,3

2019

Tot: 27.0

26.3

32.1

33.6

2017

Tot: 24.9

• Inventory increases due to pre-buying

• Receivables decrease -> Factoring

383. Financials

-

Cash

31/12/2018

+6.5

+16.4

Operational

Cash Flow

NWC

Changes

-7.7

-1.9

Capex

-9.1 +2.4

Banks

Debts and

Leasing

Financial

Activities

(CDG Int)

Dividends

Payment

-2.0

Treasury

shares

-0.2

-0.9

Other

Changes Cash

31/12/2019

+3.5

25.0

20.0

15.0

10.0

5.0

CASH FLOW ANALYSIS 2019 (€/M)

393. Financials

NET FINANCIAL POSITION

Net financial position (€/M)

VARIATION (10.1) (2.7) (3.8)

20.0

10.0

30.0

50.0

70.0

-

40.0

60.0

Current Debt

Non Current Debt

2016

33.3

23.8

Tot: 57.1

2018

28.1

16.2

Tot: 44.3

2019

23.1

17.4

Tot: 40.5

2017

31.8

15.1

Tot: 47.0

403. Financials

DEBT MATURITY

Debt Repayment plan (€/M)

1.0

-

2.0

3.0

5.0

4.0

4.8

2020

4.7

2021

3.4

2022

2.5

2023

2.4

2024

2.1

2025

1.6

2026

0,7

2027

413. Financials

INCOME STATEMENT

Consolidated Figuresin € Thousands

31 Dec.2019

% 31 Dec.2018

% Change Change %

Revenue from sales and services 133,0 100 130,9 100 2,0 2

Changes in work in progress, semi-finished and finished products

1,4 1 0,3 0 1,1 394

Other revenue 2,9 2 2,6 2 0,3 11

Value of Production 137,2 103 133,8 102 3,4 3

Consumption of raw, ancillary and consumable materials (77,5) 58 (77,2) 59 (0,3) 0

Other operating expense (23,1) 17 (20,9) 16 (2,2) 11

Value Added before non-recurring events 36,6 28 35,7 27 0,9 3

Cost of personnel* (20,7) 16 (18,0) 14 (2,7) 15

EBITDA 15,9 12 17,7 14 (1,8) (10)

Amortization, depreciation (8,7) 7 (7,2) 6 (1,5) 21

Allocations (0,1) 0 0,0 0 (0,1) 0

EBIT 7,1 5 10,6 8 (3,5) (33)

Financial components (1,9) 1 (2,9) 2 1,0 (35)

Exchange gains and losses (0,0) 0 (0,1) 0 0,0 (51)

Result before tax 5,2 4 7,6 6 (2,4) (32)

Income tax (1,2) 1 (1,6) 1 0,4 (22)

Result for the year 4,0 3 6,0 5 (2,0) (34)

*Cost of personnel includes, as at 31 December 2019, € 975 thousand attributable to the Stock Grant Program; as at 31 December 2018, the Program amounted to € 704 thousand.

423. Financials

BALANCE SHEET STATEMENT

Reclassified Consolidated Statement of Financial Position(Euro thousand)

31 dec 2019 31 dec 2018 Change Change %

Trade receivables 19,2 24,1 (4,9) (20)

Inventories 39,1 35,9 3,2 9

Trade payables (31,3) (33,2) 1,8 (6)

Operating Working Capital 27,0 26,8 0,2 1

Other current receivables 1,9 3,5 (1,7) (47)

Other current payables (4,7) (4,2) (0,5) 11

Tax 2,1 0,4 1,7 462

Net Working Capital 26,3 26,5 (0,2) (1)

Property, plant and equipment 78,9 76,7 2,2 3

Intangible assets 2,9 3,5 (0,5) (16)

Available for sale financial assets 0,0 0,0 0,0 0

Non-current financial assets not included in the NFP 1,9 3,9 (2,0) (52)

Other non-current assets 0,1 0,0 0,1 194

Fixed assets 83,7 84,0 (0,3) (0)

Post-employment benefit provisions (2,9) (2,9) (0,0) 1

Provisions for risks and costs (0,9) (0,7) (0,2) 27

Deferred tax assets and liabilities (4,4) (4,3) (0,2) 4

Net Invested Capital 101,8 102,7 (0,9) (1)

Equity (61,3) (58,6) (2,7) 5

Cash and cash equivalents 3,5 6,5 (3,0) (46)

Other current financial receivables 0,1 0,0 0,1 0

Current financial liabilities (21,0) (22,7) 1,7 (7)

Non-current financial liabilities (23,1) (27,9) 4,8 (17)

Net Financial Debt (40,5) (44,1) 3,6 (8)

Net Equity and Net Debt (101,8) (102,7) 0,9 (1)

4. GROWTH STRATEGY

444. Growth strategy

KEY INVESTMENT HIGHLIGHTS

Neodecortech boasts a high level of differentiation

and custom-tailoring in the Interior Design industry

Superior

market offering

First-class integrated range of products

Effective

business model

Focused on the reduction of risks (vertical integration) and time to market

Experienced

management team

With proven trackrecord

Stable

dividend policy

Strong and well balanced

customer base Customer loyalty

Strong integration with clients

High growth potential

and high margins

Strong cash flow

generation

454. Growth strategy

INVESTMENT OPPORTUNITIES

New technologies

Machine improvement

Market expansion

Area

- Further investments in film laminations- Digital printing

- Increase process efficiency- Increase product quality- Adopt Industry 4.0 technology (as per previous years)

- Increase market share- Acquire new markets

Investment rationale

5. NEODECORTECH’S SUSTAINABILITY APPROACH

475. Neodecortech’s Sustainability Approach

Neodecortech believes that sustainability is a responsibility for any successful enterprise. Therefore, the Group commitments go beyond compliance and reduction of negative impacts as they actively promote a company culture based on value creation for all stakeholders.

Sustainability is a key driver for Neodecortech’s long term strategy, which is based on excellence, efficient use of resources and continuous improvement of the Group’s performance.

Neodecortech’s approach towards sustainability is deeply rooted in its values and principles, which are defined in the Neodecortech’s Ethical Code. Moreover, the Group actions and goals are inspired by the most relevant international initiatives, such as the Global Compact and the United Nation’s Sustainable Development Goals (SDGs).

STRATEGY


Neodecortech strives to maintain and develop a trustworthy relationship with its stakeholders, i.e. the individuals, groups or institutions whose contribution is needed to fulfil the Group’s mission, or those that in any case share an interest in its fulfillment.For every stakeholder, the Neodecortech Code of Ethics offers the ethical principles on which all its activities are based.

NEODECORTECH

Environment Clients and prospects

Financial market Suppliers

Competitors

Human resources

Public administrationand institutions

Local communityand territory

THE STAKEHOLDERS


ESG performance The integration of ESG aspects in the Group strategy and management approach is the direct responsibility of Neodecortech’s CEO, who is supported by the Group’s QHSE manager.

Environment & Circular Economy:BEG is powered by sustainable bioliquids, a short supply chain obtained exclusively from by-productsCDG uses scrap paper from the NDT production process as secondary raw materialResponsible procurement of wood based raw materialsFocus on PVC recovery

Social Human Resources: focus on health and safety and trainingLocal communities: training programs and donations

GovernancePublication of Sustainability Reports since 2015QHSE management systemsOrganisational Model Pursuant to Legislative Decree 231/2001

The 2030 Agenda for Sustainable Development set by the United Nations in 2015 expresses the global plan of action for sustainable development, by tackling issues of universal concern such as poverty, hunger, lack of education, climate change, gender inequality, lack of access to clean water and energy.

17 Sustainable Development Goals (SDGs) spread over 169 targets to achieve by 2030: Neodecortech has identified which of these targets it can tangibly contribute to through its own businesses and production environment, identifying for each one commitments and performance indicators.

ESG APPROACH


MATERIALITY MATRIX & SDGs

Importance for Neodecortech

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9,5

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MATERIAL TOPICS

1. Diversity and equal opportunities2. Training 3. Governance4. Relations with the local community5. Circular economy6. Employee management7. Responsible supply chain management8. Waste9. Non-renewable raw materials10. Compliance11. R&D12. Emissions13. Renewable raw materials14. Occupational safety15. Product quality16. Economic performance


Circular Economy Neodecortech Group adopts an approach based on the responsible and sustainable use of resources, voluntary certifications, compliance with international and national initiatives on the use of secondary raw materials, fostering the protection of natural resources and adopting the principles of the circular economy.

1. Some 98% of fuel used by the BEG power plant was derived from certified tallow and other by-products of animal origin (ABPs) in 2019.

2. CDG uses only FSC (Forest Stewardship Council) pulp FSC for a total consumption of 21k tons. FSC pulp comes from sustainable certifed forests.

3. In 2019, BEG produced more than 151,000 MWhs of electricity, over 29% of which was used to cover the whole of CDG’s electricity needs, thus making CDG one of the few paper producers in the world to be entirely run on renewable electricity.

4. Neodecortech: all residual paper is carefully separated from possible pollutants and then reused in CDG’s production processes. In 2019, about 800 tons of waste paper were collected and delivered for recovery to CDG. Some were directly reused by the paper mill (42%), some were processed by an intermediary before being delivered to CDG as secondary raw material (58%).

5. Neodecortech: pvc waste is delivered to disposers who adehere to the European Recovinyl initiative (under the VinylPlus voluntary commitment): 98 tons of PVC recovered in 2019.

ENVIRONMENT


ENVIRONMENT

EMISSION PRODUCTION 2019TOTAL: 29,494 t CO2 eqPer kg of product:CDG: 0.38 kg CO2 eqNDT: 0.74 kg CO2 eq

Per kWh produced by BEG: 0.03 kg CO2 eq**CO2 emissions allowance regarding diesel use alone.

CDG: 51%

NDT: 34%

BEG: 15%

SUSTAINABLE USE OF RESOURCES, WASTE AND EMISSION (1/4)


BEG

The power plant processes (O&M and Waste management policies) are certified underISO 14000:2015 scheme.

The power plant environmental procedures (jointly with CdG) are certified under ISO 50001:2018 scheme.

The Power Plant is classified IAFR (Renewable sources fuelled power plant) under Italian legislation(GSE State issuing body).

Main Goals:

Purchase electricity from the external grid that is 100% certified to come from renewable sources by 2020

Reduce the consumption of fresh water for cleaning and maintenance by 5% by recovering condensed water and steam, by the end of 2020

Provide 100% of the spent catalytic material as secondary raw material by 2020

Define a system for measuring direct CO2 equivalent emissions that includes the combustion of animal by-products and vegetable oils


ENVIRONMENT


CDG

Since 2018, the factory environmental procedures (jointly with BEG) have been certified underthe ISO 50001:2018 certification scheme.

In 2018 CDG, thanks to important changes in its production process, achieved a 9.6% energy reduction, compared to year 2017 (TEP/kg_paper).

In 2018, CDG replaced previous steam generators with high efficiency generators, allowing a 9.1% primary energy reduction compared to 2017 (TEP/kg_paper).

From 2017 to 2019 CDG increased the use of heat from cogeneration by 12.5% (TEP/kg_paper).

Fresh water consumption per unit of product from 2018 to 2019 decreased 8.7%

Main Goals

To reduce the overall energy consumption 8% by 2022, increasing energy from renewable sourcesof 3% by 2020.

To reduce the fresh water consumption per ton of paper 4% by the end of 2020, by increasing the useof treated water in production processes.

To reduce pulper waste 4% by 2020.

ENVIRONMENT



Neodecortech

Since 2007 Neodecortech, the Filago site (printing and impregnation), has been ISO 14001 certified. In 2019, the environmental certification was extended to the Casoli di Atri site (lamination).

Monitoring of the emissions of each production line, as required by AIA.

Since 2000, the Filago plant has operated a formaldehyde and VOC (volatile organic compounds) abatement system that allows compliance with both national and regional limits: 50% below the VOC emission limit.

Main Goals:

Reduce electricity and gas consumption by 2.5% by 2020Reduce plastic packaging use by 2,5% by 2020Increase the amount of waste water treated and not disposed of by 6% by the end of 2020

ENVIRONMENT



Employees 378 Employees (+3% versus 2018)

Gender: 86% men 14% womenEmployee age: 21 employees < 30 years 216 employees = 30-50 years 141 employees > 50 years

Contract: 95% full time and permanent

Employee tenure: 71% more than 10 years

Training

2,860 hours of training delivered in 2019

7.6 hours of training delivered per capita in 2019

For over twenty years now, the Group companies have been organizing internships for high-school students and cooperating with universities, providing traineeships or assistance in preparing dissertations.

Goals Continuing the scholarship program for employees’ children.

Outline a three-year plan to involve the local communities in training programs.

SOCIAL

HUMAN RESOURCES - 2019 (1/2)


Health and Safety The Group’s commitment is also shown through the certifications obtained, such as OH SAS 18001 for the Filago offices of Neodecortech S.p.A., and the new ISO 45001:2018 edition for BEG and CDG.Training on occupational health and safety: 46% of total training delivered + 70% versus 2018

Goals Neodecortech S.p.A.: improve safety conditions at work for its employees by reducing the number of minor injuries (<30 days) by 20% and eliminating serious injuries by the end of 2020.Cartiere di Guarcino and BEG: keep the injury frequency rate, injury severity rate and incidence rate below INAIL statistics.

WelfareIn 2020 Neodecortech Group has set up a company welfare plan for a maximum amount of € 650,000 intended for its employees, excluding executives

SOCIAL

HUMAN RESOURCES (2/2)


Corporate donations are used to actively contribute to local community life and sustain local initiatives aimed at supporting cultural and charitable associations active in areas where the Group sites are located:

Social:

Scholarships for the worthiest students in the Municipality of Filago, Support to local firefighting forces,Contribution for a car dedicated to carrying disabled people in the Alta Ciociaria area,Donation of sports equipment for a youth recreational centre,Donation to Associazione Diakonia Onlus, linked to the Bergamo Caritas, for the building ofa well in Africa.Donation to the Papa Giovanni XXIII Hospital in Bergamo in March 2020 to contrastSars-Covid 19 virus.

Cultural:

Contribution to Fondazione Donizetti of Bergamo.

SOCIAL

LOCAL COMMUNITIES


Organizational model in place pursuant to Legislative Decree 231/2001 adopted in all companies

Code of Ethics adopted in all companies

Code of Conduct of Borsa Italiana: comply or explain

Board of Directors: 7 members

Gender balance: 3 women, 4 men Independency: 4 independent Directors

Internal Committees on:

Risk Control, Remuneration and Appointments, Transactions with related parties, Sustainability

All Sustainability Reports since 2015 are available on the Company website https://www.neodecortech.itin the Sustainability section.

Transition to the STAR segment of the Italian Equity Market (MTA), as soon as market capitalizationconditions are met

GOVERNANCE


The Group certifications are the tangible proof of its focus toward sustainable production.

All Group companies have the following in place:

Code of Ethics

Organisational Model Pursuant to Legislative Decree 231/2001

QHSE Policy (Quality, Health, Safety and Environmental)

100% MADE IN ITALY*

FSC® (Forest Stewardship Council) - CHAIN OF CUSTODY

PEFC** (Programme for the Endorsement of Forest Certification)

UNI EN ISO 9001:2015 Quality management systems

UNI EN ISO 14001:2015 Environmental management systems

UNI ISO 45001:2018 Occupational health and safety management systems

UNI EN ISO 50001:2018 Energy management systems

CERTIFICATIONS

*Neodecortech S.p.A. only**Cartiere di Guarcino S.p.A. only


CERTIFICATIONS HISTORY

Source: Company information

2018

ISO50001

2018

ISO50001

2019

UNI ISO 45001

2019

UNI ISO 45001

2007

UNI EN ISO14001

2009

UNI EN ISO9001

2011

OHSAS18001

2020

UNI ISO45001

2017

UNI EN ISO9001

2017

UNI EN ISO9001

2017

ISO50001

UNI ISO14001

2015

PEFC

2015

UNI ISO14001

2015

100%MADE IN ITALY

2016

SUSTAINABILTY REPORT

FSC®-CHAINOF CUSTODY

FSC® RECYCLED WOOD

2010

2010

FSC®-CHAINOF CUSTODY


KEY CONTACTS

Luigi CologniEmail: [email protected]

Fabio ZanobiniEmail: [email protected]

ISSUER SPONSOR, SPECIALISTAND CORPORATE BROKING

Massimo SgabussiEmail: [email protected]

Benjamin John AtterE-mail: [email protected]

investor presentation 26 june 2020 · covered). the company has a production capacity of 50,000...

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