italian star conference -...

Italian Star Conference

Milan, March 28th 2018

• Forward-looking statements

• Esprinet at a glance

• Financial KPIs

• Q4 2017 Profit % Loss

• FY 2017 Profit & Loss

• FY 2017 Balance Sheet & Cash Flow

• Product Mix

• Customer mix

• Investing in Esprinet

• Governance

• Star requirements / Compliance to Corporate

Governance Code

• Corporate Governance: Board of Directors

• Shareholders

• Code and principles

• Social Responsibility Report: key metrics

• Group Structure & History

• Mission and corporate values

• History

• Operational KPIs

• A multidivisional Sales & Marketing organizational structure

• Increasing weight of distributor

• The IT&CE Business System

• Role of distributors: Support depends on suppliers’

“maturity” in the market

• Undisputed #1 in Italy

• #1 in Spain

• Distributors’ route gaining share vs direct model

• Common industry policies: Stock Protection

• Credit Management Policy

• Factoring and Securitization of Trade Receivables

• Gross Profit Dynamics

Latest update

Latest update

The Company

The industry

Investing in

Esprinet

Forward-looking statements

This presentation may contain forward-looking statements that are subject to risks and uncertainties, including those pertaining to the anticipated benefits

to be realized from the proposals described herein. Forward-looking statements may include, in particular, statements about future events, future financial

performance, plans, strategies, expectations, prospects, competitive environment, regulation, supply and demand.

Esprinet has based these forward-looking statements on its view and assumptions with respect to future events and financial performance. Actual financial

performance could differ materially from that projected in the forward-looking statements due to the inherent uncertainty of estimates, forecasts and

projections, and financial performance may be better or worse than anticipated.

Given these uncertainties, readers should not put undue reliance on any forward-looking statements. The information contained in this presentation is

subject to change without notice and Esprinet does not undertake any duty to update the forward-looking statements, and the estimates and the

assumptions associated with them, except to the extent required by applicable laws and regulations.

Latest update

The Company

The industry

Investing in

Esprinet

Esprinet at a glanceB

usi

ness

Mo

del &

KP

I

1. Tight cost and working capital control

2. Flexibility in responding to vendor and reseller/retailer needs by means of a proprietary ERP and web engine

3. Multidivisional organization to tackle different needs of IT clients/data center/consumer electronics

4. Providers of market intelligence by leveraging the broad reseller portfolio with Big Data Analytics tools

5. Stable management team to provide consistency in execution and relationship with key partners

• 3,2 b€ of revenues (62% in Italy and 38% in Iberia)

• #1 in Italy, #1 in Spain, #4 in Europe among distributors

• Largest IT & CE Wholesaler in Southern Europe

• Among the top 50 Italian industrial groups by revenue

• Among top 100 companies in Italy by market cap

• Customers: 36.000 (23.000 in Italy and 13.000 in Iberia)

• Brands: 700

• Suppliers: 800

3,2 billion euro of salesin 2017

vs 3 billioneuro in 2016

+6%

25,1 millioneuro net profitin 2017

vs 26,9 millioneuro in 2016

-7%

34,3 millioneuro EBIT in 2017


-11%

167,5 milioneuro the gross margin in 2017


+2%

130.000 warehouse sqm

~ 35 million units shipped

~ 6 million box shipped

~ 125,000 #SKU sold

CUSTOMER MIX PRODUCT MIX

37,1% 40%

62,9% 60%

2016 2017

Retailer Reseller

22,3

%

23,5

%

6,0

%

9,0

%

8,8

%

7,3

%

4,4

%

3,8

%

4,1

%

3,4

%

1,7

%

0,8

%

4,9

%

25,2

%

19,4

%

10,6

%

8,1

%

6,8

%

6,6

%

5,0

%

3,8

%

3,6

%

2,9

%

2,1

%

0,8

%

5,0

%

20%

-12%

86%

-5%-19%

-5%

20%7%

-5% -10%

28%

9% 9%

-40%

-20%

0%

20%

40%

60%

80%

100%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

2016

2017

var

1970 20172000 2003 2006 2010

1980

2015

2001 2005 2009 2014 2016

Established under the

name Comprel,

semiconductor distributor

in the Italian market

Merger of Celo, Micromax

and Comprel, under the

brand-new Esprinet.

Italian #2 largest

distributor

Esprinet to reach #1

position in the italian

market

Acquisition of UMD in

Spain.

Merge of UMD and

Memory Set. Spain to

create Esprinet Iberica

V-Valley established 100%

Esprinet (datacenter

products)

Esprinet becomes the

largest distributor in

southern Europe

New site b2b Esprinet

Foundation of Celo and

Micromax, business,

Italian IT distributors

In July, listed on the

italian Stock Exchange

Monclick, IT e-tailer

company, established.

Acquisition of Memory

Set in SpainEsprinet Iberica become

#3 distributor in Spain

Sale of Monclick and

Comprel.

Acquisition of Celly

(mobility’s accessories)

Acquisition of EDSLan and Itway

“value-added” companies reinforcing

V-Valley business, in Italia.

Acquisition of Vinzeo. Esprinet Iberica

become #1 distributor in Spain

Over 75,000 #SKU available

His

tory

Esp

rin

et

sale

s

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The Company

The industry

Investing in

Esprinet

Q4 2017 Profit & LossEsp

rin

et

Gro

up (euro/000) Q4 2016 Q4 2017

Sales 1.116.519 100,0% 1.089.573 100,0%

Cost of sales (1.059.251) -94,9% (1.037.457) -95,2%

Gross profit 57.268 5,1% 52.116 4,8%

Gross profit % 5,1% 4,8%

Other income 161 0,0% - 0,0%

SG&A (34.327) -3,1% (32.034) -2,9%

EBIT 23.102 2,1% 20.082 1,8%

EBIT adj. % 2,1% 1,8%

Non recurring costs (1.537) -0,1% (470) 0,0%

EBIT 21.565 1,9% 19.612 1,8%

EBIT % 1,9% 1,8%

Finance costs, net (703) -0,1% 2.145 0,2%

EBT 20.862 1,9% 21.757 2,0%

EBT % 1,9% 2,0%

Net income 15.085 1,4% 16.189 1,5%

Net income % 1,4% 1,5%

Latest update

The Company

The industry

Investing in

Esprinet

FY 2017 Profit & Loss

(euro/000) FY 2016 FY 2017

Sales 3.042.330 100,0% 3.217.172 100,0%

Cost of sales (2.878.435) -94,6% (3.049.409) -94,8%

Gross profit 163.895 5,4% 167.763 5,2%

Gross profit % 5,4% 5,2%

Other income 2.838 0,1% - 0,0%

SG&A (126.328) -4,2% (131.500) -4,1%

EBIT 40.405 1,3% 36.263 1,1%

EBIT adj. % 1,3% 1,1%

Non recurring costs (1.839) -0,1% (1.916) -0,1%

EBIT 38.566 1,3% 34.347 1,1%

EBIT % 1,3% 1,1%

Finance costs, net (2.846) -0,1% (713) 0,0%

EBT 35.720 1,2% 33.634 1,0%

EBT % 1,2% 1,0%

Net income 26.870 0,9% 26.279 0,8%

Net income % 0,9% 0,8%

Esp

rin

et

Gro

up

Latest update

The Company

The industry

Investing in

Esprinet

FY 2017 Balance Sheet & Cash Flow Statement

(euro/000) FY 2016 FY 2017

Cash flow from operations 34.413 25.994

Cash flow from investing activties (105.981) (2.263)Cash flow from financing activties 77.412 (12.695)Cash flow 5.844 11.036

Cash position at the beginning of year 280.089 285.933 Cash position at the end of the year 285.933 296.969

Fixed assets 124.516 122.403

Net operating working capital 102.046 104.175

Other current assets/liabilities 276 2.958

Other non-current assets/liabilities (14.305) (14.406)Net invested capital 212.533 215.130

Net equity 317.957 338.188

Net financial debt (105.424) (123.058)

Sources 212.533 215.130

Esp

rin

et

Gro

up

Latest update

The Company

The industry

Investing in

Esprinet

OutlookEsp

rin

et

Gro

up

• The European distribution market grew by +4% in 2017 compared to 2016, whilst the fourth quarter was +3%compared to the same period of 2016.

• Italy stable year-over-year, whilst the fourth quarter decreased by -1% vs the same period of 2016

• Strong Spain +9% with the fourth quarter’s trend in line with the yearly one

• At the end of February the distribution market posted a +8% growth in Italy and +10% in Spain thanks to smartphones

• The competitive landscape should gradually show a lower pressure compared to the previous year, as demonstratedby the sales trend in the first weeks of the current year.

• The competitive landscape should gradually show a lower pressure compared to the previous year, as demonstratedby the sales trend in the first weeks of the current year.

• 2018 Group’s sales target to grow ‘low-single digit’ due to the positive effect of the Italian operations and the expectedreduction of sales in Spain, arising from the eroded revenue in the ‘retailers’ fulfillment sector

• EBIT between € 39-41 million, net of non-recurring items.

the market

corporate targets

Latest update

The Company

The industry

Investing in

Esprinet

Product Mix

67

7,5

71

4,8

18

2,1

27

4,5

26

8,7

22

2,8

13

4,4

11

4,9

12

3,8

10

4,9

52

,4

23

,6

14

7,9

811,8

625,7

339,6

261,5

217,6

211,1

161,8

122,8

117,1

94,5

67,1

25,8

160,8

20%

-12%

86%

-5%

-19%

-5%

20%

7%

-5%-10%

28%

9% 9%

-40%

-20%

0%

20%

40%

60%

80%

100%

0,0

100,0

200,0

300,0

400,0

500,0

600,0

700,0

800,0

900,0

2016 Mln € 2017 Mln € var

Latest update

The Company

The industry

Investing in

Esprinet

Customer mix

37,1%

62,9%Reseller

Retailer

40%

60%Reseller

Retailer

36,0%46%

64,0%54%

subgroup

Italysubgroup

Iberia

31,0%69%

48,0%52%

66%

34%

subgroup

Iberiasubgroup

Italy

62%

38%

subgroup

Iberia

subgroup

Italy

Sales 2017

€ 3.217,2 million

Sales 2016

€ 3.042,3 million

+6%

subgroup

Italysubgroup

Iberia

The Company

Latest update

The Company

The industry

Investing in

Esprinet

Group Structure

Last Update: March 2018

Latest update

The Company

The industry

Investing in

Esprinet

Mission and corporate values

Corporate Mission

To be the best technology distributor operating in its

relevant markets, assuring shareholders above-average

return on investment thanks to precise, serious, honest,

fast-footed, reliable, and innovative management of the

customer and vendor relationship, achieved by closely

attentive enhancement and exploitation of its staff’s skills

and innovative capabilities.

Our strengths

• Multidivisional organisation to face different needs for

different customers

• Flexibility to offer to our vendors and customers

• Highly experienced and focused people on tangible

key value drivers

• Web engine and own ERP created

• Focus on creating new services to help dealers to do

business

Latest update

The Company

The industry

Investing in

Esprinet

Corporate Milestones

1970 20172000 2003 2006 2010

1980

2015

2001 2005 2009 2014 2016

Established under the name

Comprel, semiconductor

distributor in the Italian

market

Merger of Celo, Micromax

and Comprel, under the

brand-new Esprinet.

Italian #2 largest distributor

Esprinet to reach #1

position in the italian

market

Acquisition of UMD in

Spain.

Merge of UMD and

Memory Set. Spain to

create Esprinet Iberica

V-Valley established 100%

Esprinet (datacenter

products)

Esprinet becomes the

largest distributor in

southern Europe

New site b2b Esprinet

Foundation of Celo and

Micromax, business, Italian

IT distributors

In July, listed on the italian

Stock Exchange

Monclick, IT e-tailer

company, established.

Acquisition of Memory Set

in SpainEsprinet Iberica become #3

distributor in Spain

Sale of Monclick and

Comprel.

Acquisition of Celly

(mobility’s accessories)

Acquisition of EDSLan and Itway “value-

added” companies reiforcing

V-Valley business, in Italia.

Acquisition of Vinzeo. Esprinet Iberica

become #1 distributor in Spain

Latest update

The Company

The industry

Investing in

Esprinet

Operational KPIs

CORE OFFERING OPTIONAL SERVICES

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The Company

The industry

Investing in

Esprinet

A multidivisional Sales & Marketing organizational structure

CUSTOMER

CLUSTERCORE OFFERAL SELF SERVICE Supported SALE

SME Corporate

Reseller

Large Corporate

Reseller (VAR)

Retailer

Hardware & Software +

Services


Services

(complex solutions)


Services

WEB site b2b

ESPRIVILLAGE

WEB site b2b

ESPRIVILLAGE

WEB site b2b

TELESALES

KEY ACCOUNT

KEY ACCOUNT

OKRETAIL

Vert

ical SA

LES &

MA

RK

ETIN

G f

orc

e

The industry

Latest update

The Company

The industry

Investing in

Esprinet

Increasing weight of distributor

Candy ‘go-to-market’ strategy leverages distribution channel to reach higher share of

addressable market in EuropeIncrease market

penetration

• Smartphone vendors switching towards distribution mainly due to expansion in the market of

new comers Chinese players, with no access to end market (eg. Spain) and by carriers not

focusing on hardware

• in the short term, some carrier partner with vendors to provide attractive offer to customers

and increase volumes (eg. Vodafone and Apple)

Smartphone

vendors switch go

to market strategies

Cisco & HP created new cloud partner programs with the following features:

• new access to distributor network, increased access to MDF, technical support, dedicated

financing & flexible licensing/loans

Expanding partner

program to include

cloud partners

Citrix increased the standards and rewards for tiered partners

Increasing

thresholds for top

tiered partners and

providing greater

rewards

~50% of sales through the channel reached in 2017, through:

• increased the customer revenue cutoff between enterprise (direct) and general business

(indirect)

• re-oriented its inside sales org to exclusively support channel partners by generating leads,

helping cross-sell & up-sell etc.

Increasing indirect

channel’s share of

total sales

Source: lit search, vendor websites

Major Themes Examples of Recent Vendor Announcement

Increasing weight of distributor in line with worldwide trend and ICT & CE major vendors channel strategy

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The industry

Investing in

Esprinet

The IT&CE Business System

DIRECT CHANNEL + 1ST TIER :

~ 55-50% of total addressable market

2ND TIER:

~ 45-50% of total addressable market

In the last 20 years, Vendors of IT progressively moved

from a “Direct Only” to a “Hybrid” or even “Indirect

Only” business model

Vendors use Distributors for multiple reasons:

• Reduction of distribution fixed cost

• Buffering stock

• Credit lines

• Marketing capability

Resellers and Retailers use Distributors for multiple

reasons:

• Most of the resellers no longer manages a physical

warehouse

• Retailers use Distributors as a one-stop-shopping

opportunity on certain accessories or minor product

categories

• Retailers use Distributors, in conjunction with

Vendors, in “Fulfilment deals”

• E-Tailers use Distributors as a one-stop-shopping

for the “Long Tail” of products

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The Company

The industry

Investing in

Esprinet

Role of distributors: Support dependson suppliers’ “maturity” in the market

PROMOTING EMERGING TECHNOLOGIES

• Distributors need to quickly identify resellers interested in

new technologies. A broad market coverage and a deep

understanding of customer business model is key to

success

PROMOTING A VENDOR NOT PRESENT

IN CLIENT PORTFOLIO

• Vendors need the distributors to enlarge customer base in

which vendor is present

ROLE OF DISTRIBUTORS EXPECTED

FROM VENDORS

FULFILL PARTNERSHIP AGREED BETWEEN VENDORS AND

RETAILERS

• Sometimes big and consolidated vendors negotiate

directly with retailers. In this case, distributors need to

manage stock and credit risk and are rewarded with extra-

discounts or granted a privileged position on other bids

CONSOLIDATED VENDORS• Direct salesforce present in the market

• Well-known brand: certified and loyal customer base

• Large amount of business

EMERGING VENDORS• Limited presence in the mkt: mkt

coverage is delegated to distributors

• Limited brand awareness

• Small amount of business

Big Retailers (i.e. MediaMarket, Amazon, Unieuro, Euronics)

Small Retailers (small chains with no direct contact with vendors)

Retailers specialized in Mobility (Telco shops/indipendent chains)

Retailers specialized in CE (i.e. Apple/Videogame specialists)

Resellers specialized in Consumables (i.e. office supplies)

"Datacenter volume" reseller (server, storage and networking)

"Datacenter value" reseller (software and niche products)

IT reseller (traditional IT reseller supplying SME with IT Clients)

DISTRIBUTORS

CUSTOMERS

VENDORS

Latest update

The Company

The industry

Investing in

Esprinet

Undisputed #1 in Italy

Revenue Var. % Share %

WHOLESALERS 2014 2015 2016 2017E 17/16 2014 2015 2016 2017E

1 ESPRINET 1.689,8 1.997,8 1.995,6 2.046,3 2,5% 25,9% 27,9% 27,3% 26,8%

2 COMPUTER GROSS ITALIA 910,0 1.005,0 1.135,0 1.230,0 8,4% 13,9% 14,1% 15,5% 16,1%

3 TECH DATA 812,8 1.006,8 992,6 995,0 0,2% 12,4% 14,1% 13,6% 13,1%

4 INGRAM MICRO ITALIA 661,2 731,4 815,3 890,0 9,2% 10,1% 10,2% 11,2% 11,7%

5 DATAMATIC 329,6 323,6 301,9 290,0 -3,9% 5,0% 4,5% 4,1% 3,8%

6 ATTIVA 237,0 275,0 301,4 320,0 6,2% 3,6% 3,8% 4,1% 4,2%

7 BREVI 164,1 158,6 157,5 158,0 0,3% 2,5% 2,2% 2,2% 2,1%

8 ARROW ECS 71,1 86,9 106,5 127,0 19,2% 1,1% 1,2% 1,5% 1,7%

9 EXECUTIVE 96,9 89,9 94,9 99,0 4,3% 1,5% 1,3% 1,3% 1,3%

10 COMETA 65,9 65,7 92,4 111,0 20,1% 1,0% 0,9% 1,3% 1,5%

11 ADVEO ITALIA 86,9 86,3 79,7 75,0 -5,9% 1,3% 1,2% 1,1% 1,0%

12 IL TRIANGOLO 61,7 66,6 77,5 86,0 11,0% 0,9% 0,9% 1,1% 1,1%

13 EXCLUSIVE NETWORKS 10,9 56,5 75,5 87,0 15,2% 0,2% 0,8% 1,0% 1,1%

14 FOCELDA 46,8 50,3 58,8 64,0 8,8% 0,7% 0,7% 0,8% 0,8%

15 ADL AMERICAN DATALINE 49,8 51,4 52,1 52,5 0,7% 0,8% 0,7% 0,7% 0,7%

16 ICOS 49,0 38,7 51,4 58,0 12,9% 0,7% 0,5% 0,7% 0,8%

17 RUNNER 43,0 43,3 40,2 39,0 -3,0% 0,7% 0,6% 0,6% 0,5%

18 ALTINIA DISTRIBUZIONE 27,6 32,1 36,3 40,0 10,2% 0,4% 0,4% 0,5% 0,5%

19 DACOM 23,9 26,6 33,7 39,0 15,7% 0,4% 0,4% 0,5% 0,5%

20 AVNET TS ITALY 34,0 32,0 31,0 30,5 -1,6% 0,5% 0,4% 0,4% 0,4%

Revenue of the first 20 Wholesalers 5.471,9 6.224,4 6.529,3 6.837,3 4,7% 83,7% 87,1% 89,4% 89,7%

Revenue of the other Wholesalers 1.065,0 925,2 778,2 786,7 1,1% 16,3% 12,9% 10,6% 10,3%

Total revenue 6.536,8 7.149,6 7.307,5 7.624,0 4,3% 100,0% 100,0% 100,0% 100,0%

Revenue intra company 376,8 339,6 317,5 297,7 -6,2%

Total revenue consolidated 6.160,0 6.810,0 6.990,0 7.326,3 4,8%

Source: Context, November 2017

Latest update

The Company

The industry

Investing in

Esprinet

#1 in Spain

Revenue Var. % Share %

WHOLESALERS 2014 2015 2016 2016 2017 17/16 2015 2016 2017

1ESPRINET IBERICA

902,0 1.280,5 1.275,7 1.019,9 1.197,4 17% 25,9% 24,9% 18,8%

2TECH DATA (1) 866,0 947,6 954,3 898,0 1.145,0 28% 19,2% 18,6% 18,0%

3INGRAM MICRO (1) 660,0 645,4 671,2 730,0 930,0 27% 13,1% 13,1% 14,6%

4ARROW ECS 340,0 420,1 500,0 500,0 575,0 15% 8,5% 9,7% 9,0%

5MCR 200,0 235,0 241,5 241,0 280,0 16% 4,8% 4,7% 4,4%

6GTI (1) 168,0 203,2 215,5 215,0 230,0 7% 4,1% 4,2% 3,6%

7BRIGHSTAR (2) 433,0 124,4 109,4 109,4 120,3 10% 2,5% 2,1% 1,9%

8GLOBOMATIK 69,5 93,0 92,0 118,0 28% 1,4% 1,8% 1,9%

9DMI 63,0 86,0 90,0 90,2 112,0 24% 1,7% 1,8% 1,8%

10DEPAU 75,2 95,5 95,5 108,1 13% 1,5% 1,9% 1,7%

Revenue of the first 10 Distributors 3.632,0 4.086,9 4.246,1 - 3.991,0 4.815,9 98,4% 97,8%

Total Revenue of the firts 100 Distributors 4.713,0 4.934,5 5.132,8 4.877,7 6.369,0 115,6% 115,0%

Source:

Channel Partner, March 2018

For Esprinet and Tech Data billings in Portugal are not included

(1) Forecast Channel Partner for 2018

(2) Forecast Channel Partner based on GFK/Context for 2018

Latest update

The Company

The industry

Investing in

Esprinet

Distributors’ route gaining share vs direct model R

ole

of

dis

trib

uto

rs is

exp

ect

ed

to

in

crease

sin

ce…

IC

T m

ark

et:

sh

are

in

term

ed

iate

d b

y d

istr

ibu

tors

(% /

2011-2

016)

+15,6%

35,0% 35,5%

39,9%

43,5%46,9%

50,6%

2011 2012 2013 2014 2015 2016

30,7%32,0%

35,9%

41,0%43,5%

46,2%

2011 2012 2013 2014 2015 2016

+15,5%

• … deflation in the hardware market is making direct sales less attractive

• … IT offering is experiencing increasing complexity and heterogeneity

• … small-medium enterprises using distributors as main route to market are growing share

• … increasing channel usage by Vendors previously oriented to the direct sale

• … new pure play vendors, focused on new technologies/ niche applications with value distributors as road

to mass market

Source: Sirmi; Company internal data; Expert interviews; Bain analysis April 2017; DB Context

Latest update

The Company

The industry

Investing in

Esprinet

Common industry policies: Stock Protection

«Stock Protection Clause»

A contractual agreement, in which the Vendor assumes the

risk of inventory devaluation arising from purchase list price

reductions planned by the Vendor itself.

This scheme is important given the intrinsic historical

deflationary trend in the IT & Consumer Electronics industry.

This clause typically provides a contractual protection for 30

up to 60 days from receipt of the goods in the warehouse of

the Distributor

During such contractual period, the Vendor undertakes to

reimburse, by issuing so called «Stock Protection Credit

Notes», the loss of stock value incurred by the Distributor on

the products in stock in the moment the same products are

made available for purchase by the Vendor at a new, lower,

purchase list price.

This mechanism is normally available for official distributors

only.

Vendors routinely offer to Distributors different contractual schemes to shield the economic risks of their inventories.

Latest update

The Company

The industry

Investing in

Esprinet

Credit Management Policy

A strict credit management policy provides mitigation to risks associated to Trade Receivables:

All customers undergo strict credit checks based on:

• number of factors including their historical financial performance

• their history

• management quality as well as payment performance with the market and with our Group.

CREDIT SCORING

INDEX for EACH

CUSTOMER

Sales team request credit lines based on:

• expected volumes

• payment terms

• seasonality

Smartphone

vendors switch go

to market strategies

The Credit Department grants credit lines depending on the credit scoring as well as the level of risk mitigation available.

The Group utilizes multiple top-rated Credit Insurance Companies shielding the risk of default of debtors with deductibles typically

between 10% to 15% of the insured value.

Credit limits are exceeded then customers are placed in credit hold and no further sales are allowed.

As an alternative, trade receivables might be sold “without-recourse” to factoring entities. When factoring happens, being a true-sale,

no deductibles are involved and the credit risk is entirely transferred to the factoring company.

Sometimes the Group takes some risk on its books by issuing a Credit Limit that exceeds the value of the Credit Insurance coverage.

All trade receivables that are not insured or sold to factoring companies are netted by specific bad-debts provisions which are set aside

in case of delinquency over specific number of days or in case of realized or expected default of the debtor

Latest update

The Company

The industry

Investing in

Esprinet

Factoring and Securitization of Trade Receivables

Trade receivables that are sold to a factoring company or to the conduit of the Securitization Program are deconsolidated

from the Balance Sheet. The cost of the factoring or securitization is split into the financing cost, which is deducted from the

Gross Profit and the credit insurance cost, which is charged to the SG&A The Factoring program is typically a recurring

program on selected top-rated Retailers and Corporate Resellers

The Securitization of Trade Receivables is a recurring program typically aimed at small and mid-sized reseller with medium

to high average credit standing

When a true-sale of receivables happens under the Factoring or Securitization programs, the DSO of these programs is

typically 10 to 15 days, the average time to sell the receivables and cash the proceedings from the factoring companies. This

means that a higher level of sales to Retailers or Corporate Resellers, that typically would imply a higher DSO, effectively

converts into proportionally lower Gross Profit Margins and higher SG&A because of the commissions paid to factoring or

securitization, and in a lower DSO because of the reduced amount of receivables in the balance sheet.

Factoring and Securitization of Trade Receivables are both used to reduce the level of credit risk, when Credit Insurance is not

available, as well as a way to manage credit collection

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Gross Profit Dynamics

Commoditized product categories, such as Notebooks, typically allow for lower Gross Profits Margins as compared to product where

a lot of sales efforts are needed to convince customers on selling or using them, or products that need a lot of technical expertise to

be sold such as the case of many datacentre products;

Gross Profit is a key metric of the industry and typically are a function of a number of factors:

Product categories

Highly known vendors with a strong brand recognition tend to provide less Gross Profit Margins than vendors that are in a less

developed stage of their journey towards brand recognition

Vendors that have a strong market share within a Distributor or a generic strong impact on its overall performance typically provide

less Gross Profit margins than Vendors that have no major impact on the Distributor;

Vendor relative strength

Customer

Payment termsCustomer strength

Market

Development

Funds or

Co-Marketing

funds

Vendor Payment

terms

Most Vendors

allocate at Country

level marketing

funds

Investing in Esprinet

Governance

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Star requirements / Compliance to Corporate Governance Code

Esprinet Spa

listed in the STAR Segment

voluntarily adhere to and comply with strict requirements

High transparency,

disclosure requirements

and liquidity (free float of

minimum 35%)

Corporate Governance in line with international standards

Major requirements to mantain the STAR ‘status’ are the following

Interim financial

statements available to the

public within 45 days from

the end of first, third and

fourth quarter

Favourable auditor’s

report on their latest

individual and

consolidated annual

financial statements

Consolidated annual

financial statements not

challenged by Consob

Bi-lingual publication on

the websites

Mandatory presence of a

qualified investor relator

and a “specialist”

Adoption of the models

provided for in art. 6 of

Leg Decree 231/2001

Application of Corporate

Governance Code

Esprinet is fully compliant(1) with the Code of self-discipline (Corporate Governance Code).(1) With two minor exceptions which are explained as permitted by the Code

The market segment of

Borsa Italiana’s equity

market (MTA-Mercato

Telematico Azionairo)

Dedicated to mid-size

companies with a

capitalization less than 1.0

euro/bln

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Corporate Governance: Board of Directors

Francesco Monti, was born in Bovisio Masciago on 1st

April 1946. With a diploma in industrial electronics, he

began his professional career as sales supervisor for

companies operating in the components industry. He

was among the founding members of Comprel where he

served as the Sole Executive. He served as Chairman of

Comprel beginning in 1983 and, following the merger

with Celomax, he has served as Chairman of Esprinet.

Maurizio Rota, was born in Milan on 22 December 1957.

After his early professional experiences as sales

supervisor for companies operating in the information

technology industry, in 1986 he founded Micromax,

serving as the company's Chairman. Until 1999, he

developed and consolidated the company, focusing in

particular on relations with the major manufacturers,

making the decisive contribution to the implementation

of the company's business strategies. Following the

formation of Celomax, for which Mr. Rota was one of the

main sponsors, he served as Managing Director and later

as Vice Chairman. Today Mr. Rota is the Vice Chairman

and Chief Executive Officer of Esprinet.

Alessandro Cattani, was born in Milan on 15 August

1963. After completing his first degree in electronic

engineering, he earned a management Master ("CEGA")

at the Bocconi University in Milan. He began his

professional career at Scriba S.p.A. where, until 1990, he

served as Management Assistant, but also as Executive

Director of the company which had the task of managing

the group's information technology. From 1990 to 2000

Mr. Cattani worked on the development of management

consulting projects and he currently serves Esprinet as

Chief Executive Officer.

Name Position Executive Ind.Strategy

Committee

Control

and risks

Comm.

Remuneration

and

Appointment

Comm.

Competitiveness

and sustainability

Comm.

Francesco MontiChairman

Maurizio RotaDeputy

Chairman and CEO

Alessandro Cattani

CEO

Valerio CasariDirector &

CFO

Matteo Stefanelli Director

Tommaso Stefanelli

Director

Marco Monti Director

Mario Massari Director

Chiara Mauri Director

Cristina Galbusera

Director

EmanuelaPrandelli

Director

Ariela Caglio Director

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Shareholders

Banca IMI (Intesa Sanpaolo) Gabriele Berti

Intermonte Edoardo Girelli

Twice SIM Lucia Saluzzi

ShareholderN° ordinary shares

locked-up

% on total

issued shares

% on total

locked-up shares

TOTAL 16,819.135 32.095% 100,000%

Francesco

Monti8.232.070 15,709% 48.945%

Paolo

Stefanelli3,900,000 7.442% 23.188%

Tommaso

Stefanelli750,000 1.431% 4.459%

Matteo

Stefanelli750,000 1.431% 4.459%

Maurizio Rota 2.652.458 5.010% 15.610%

Alessandro

Cattani561.607 1.072% 3.339%

On February 24 2016, the here below mentioned people entered into

a shareholders’ agreement with effectiveness and validity until

February 22nd 2019.

The Agreement indicates no. 16,819.135 Esprinet S.p.A. ordinary

shares out of 52,404,340 totaling ~32% of share capital.

The following table shows the parties to the Agreement and gives a

separate indication of no. of ordinary shares which are transferred to

the Agreement.

Italian Stock Exchange (PRT)

Number of shares: 52.4 million

Shares trading 30d avg vol: 113K

Sh

are

ho

lders

’ b

ase

an

d a

ctiv

e b

rokers Shareholders'

agreement

32,1%

Own shares

1,2%

Others

66,7%

Shareholders' agreement Own shares Others

Sh

are

ho

lders

’ ag

reem

en

t en

sure

s lo

ng

-term

sta

bilit

y

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Code and principles

The Code of Ethics applies to allactivities performed by or in thename and on behalf of Esprinet S.p.A.and its subsidiaries (hereafter alsothe "Group or the " GroupCompany").

The Code of Ethics:

i. lays down conduct guidelines and

regulates the body of rights,

duties and responsibilities the

Group expressly assumes vis-à-vis

its own stakeholders

ii. defines the ethical criteria

adopted for achieving a proper

balance between the expectation

and interests of the various

stakeholders

iii.incorporates principles of conduct

and guidelines on potentially

sensitives areas.

The Esprinet Group wishes toestablish commercial relations withits own suppliers and businesspartners that are characterised bytransparency, fairness and ethicaltrading practices.The development of transparentlong-term relationships withsuppliers, attention to quality, safetyand respect of the environment andcompliance with applicable lawsrepresent objectives that must bepursued with a view to consolidatingthe added value created forstakeholders.Therefore, in conjunction with theCode of Ethics adopted by EsprinetS.p.A. and its subsidiaries,the Group has defined a Code ofConduct to serve as a guide to long-term supply chain relations.

This document, entitled “Organisationand Management Model pursuant to“Legislative Decree 231/2001” (hereinaftercalled “the Model”), has been drawn up toimplement the terms of ss. 6.1.a and 6.1.b,6.2, 7.2 and 7.3 of Legislative Decree no.231 of 08.06.2001 (hereinafter called "theDecree").The Model is the management referencedocument which institutes a corporateprevention and control system designedto prevent the offences specified in theDecree from being committed.The Ethical Code enclosed summarizesthe values, correctness and loyalty bywhich the Esprinet Group is inspired andconstitutes the base of ourOrganizational, Administrative andControl Models. The Code has beenadopted by the company in order toprevent any occupational hazards or risksin view of the D. Lgs. 231/2001 law.On October 30th 2013 the companiesBoard of Directors accepted a new andupdated version of the Organizational,Administrative and Control Models whichsubstitutes the previous version approvedon March 14th, 2012.

Code of Etics Code of Conduct «231» Organisation Model

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Social Responsibility Report: key metrics

Source: Esprinet S.p.A. 2017 Corporate Social Responsibility Report

Group Headquarter:Esprinet S.p.A.Via Energy Park 20 Vimercate (Italy) www.esprinet.com

Investor Contacts:http://investor.esprinet.com

[email protected]

Chief Investor Relations Officer:Michele Bertacco

[email protected]

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