ROADSHOW PRESENTATION - CMVM

R O A D S H O W P R E S E N T A T I O N

N O V E M B E R 2 0 1 8

This presentation has been prepared by VAA – Vista Alegre Atlantis, SGPS, S.A. (the “Company”) and is the responsibility of the Company and comprises the written materials for a presentation concerning the Company, and its proposed offering and listing of its shares (“Offer”), which is composed of an institutional offering (the “ Institutional Offer”) and a public offer in Portugal. This presentation has been prepared solely for use at the investor presentation held in connection with the Institutional Offer.

This presentation does not constitute or form part of any offer to sell or issue or invitation to purchase, or any solicitation of any offer to purchase, any securities of the Company, nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision. This presentation is not a prospectus and any investment decision (to subscribe for or acquire any securities) should be made solely on the basis of the information contained in the prospectus (including any amendment or supplements thereto) approved by the Comissão do Mercado de Valores Mobiliários (the “CMVM”) and published by the Company in relation to the offering, available on its website and on CMVM’s website (www.cmvm.pt). The information and opinions contained in this presentation are provided as at the date of the presentation and are subject to change. Any purchase of securities in the Offer should be made solely on the basis of the information contained in the prospectus published by the Company in connection with the public offer pursuant to European Parliament and Council Directive 2003/71/EC of 4 November 2003 (as amended). A copy of the English translation of prospectus, when published by the Company, will be available on the Company’s website (https://investidores.vistaalegre.com). No reliance may or should be placed by any person not invited to the investor presentation for any purposes whatsoever on the information contained in this presentation or any other material discussed at the investor presentation, or on its completeness, accuracy or fairness. The information in this presentation and any other material discussed at the investor presentation is subject to change without notice.

To the extent available, the industry, market and competitive position data contained in this presentation come from official or third party sources. Third party industry publications, studies and surveys generally state that the data contained therein have been obtained from sources believed to be reliable, but that there is no guarantee of the accuracy or completeness of such data. While the Company reasonably believes that each of these publications, studies and surveys has been prepared by a reputable source, Caixa - Banco de Investimento, S.A., Banco Comercial Português, S.A. and Nau Securities Limited (the “Managers”) and the Company have not independently verified the data contained therein. In addition, certain of the industry, market and competitive position data contained in this presentation come from the Company’s own internal research and estimates based on the knowledge and experience of the Company’s management in the markets in which the Company operates. While the Company reasonably believes that such research and estimates are reasonable and reliable, they, and their underlying methodology and assumptions, have not been verified by any independent source for accuracy or completeness and are subject to change. Accordingly, undue reliance should not be placed on any of the industry, market or competitive position data contained in this presentation.

The information contained in this presentation does not purport to be comprehensive. None of the Company, the Selling Shareholder, the Managers, any of their respective subsidiary undertakings or affiliates, or their respective directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for (whether in contract, tort or otherwise) or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this presentation (or whether any information has been omitted from the presentation) or any other information relating to the Company, its subsidiaries, affiliates or associated companies, whether written, oral or in a visual or electronic form, and howsoever

transmitted or made available or for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection therewith. The Managers disclaim any responsibility for any acts or omissions of the Company, any of the Directors, the Selling Shareholder or any other person in connection with the Institutional Offer.

This presentation has been prepared by the Company solely for use at the investor presentation held in connection with the Institutional Offer. Neither this presentation nor any part or copy of it may be taken or transmitted into the United States (“US”) or distributed, directly or indirectly, in the United States, as that term is defined in the US Securities Act of 1933, as amended (the “US Securities Act”). Neither this presentation nor any part or copy of it may be taken or transmitted into Australia, Canada or Japan or to any other jurisdiction where such distribution may lead to a breach of any law or regulatory requirement. Any failure to comply with this restriction may constitute a violation of US, Australian, Canadian or Japanese securities laws. This presentation does not constitute an offer of securities to the public in the United Kingdom or in any other jurisdiction. Persons into whose possession this presentation comes should observe all relevant restrictions.

The securities of the Company have not been, and will not be, registered under the US Securities Act and may not be offered or sold in the United States except pursuant to an exemption from, or a transaction not subject to, the registration requirements of the US Securities Act or unless registered under the US Securities Act and in compliance with the relevant state securities laws. There will be no public offering of the securities in the United States. All offers and sales of shares in the Institutional Offer will be made in compliance with Regulation S under the Securities Act. The shares may not be offered, sold, pledged or otherwise transferred within the United States or to US Persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable state securities laws.This presentation is only directed at and being communicated to the limited number of invitees who: (A) if in the European Economic Area, are persons who are “qualified investors” within the meaning of Article 2(1)(e) of the Prospectus Directive (which means EU Directive 2003/71/EC and any amendments thereto, including the amending directive, Directive 2010/73/EU to the extent implemented in the member state and any relevant implementing measure in each member state) (“Qualified Investors”); and (B) if in the United Kingdom are persons (i) having professional experience in matters relating to investments so as to qualify them as “investment professionals” under Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); and (ii) falling within Article 49(2)(a) to (d) of the Order; and/or (C) are other persons to whom it may otherwise lawfully be communicated (all such persons referred to in (A), (B) and (C) together being “Relevant Persons”). This presentation must not be acted or relied on by persons who are not Relevant Persons. Any investment activity to which this presentation relates is available only to Relevant Persons and may be engaged in only with Relevant Persons. Nothing in this presentation constitutes investment advice and any recommendations that may be contained herein have not been based upon a consideration of the investment objectives, financial situation or particular needs of any specific recipient. If you have received this presentation and you are not a Relevant Person you must return it immediately to the Company and not copy, reproduce or otherwise disclose this presentation (in whole or in part).

The information in this presentation may include forward-looking statements, which are based on current expectations and projections about future events. These forward-looking statements, as well as those included in any other material discussed at the investor presentation, are subject to risks, uncertainties and assumptions about the Company and its subsidiaries and investments, including, among other things, the development of its business, trends in its operating industry, and future capital expenditures and acquisitions. In light of these risks, uncertainties and assumptions,

the events in the forward-looking statements may not occur. No representation or warranty is made that any forward-looking statement will come to pass. No one undertakes to publicly update or revise any such forward-looking statement. This presentation includes historical information resulting from the financial statements approved and disclosed by VAA (you are advised to consult such financial information available in VAA website), as well as unaudited proforma figures prepared to reflect an hypothetical situation (considering the acquisitions of Cerutil and Bordalo Pinheiro described herein and not intended to represent, and not representing, VAA’s consolidated results, nor constituting any indication of the future operational results or financial condition of VAA).

The Managers are acting for the Company and the Selling Shareholder in connection with the Institutional Offer and no one else and will not be responsible to anyone other than the Company and the Selling Shareholder for providing the protections afforded to their respective clients or for providing advice in relation to the Institutional Offer or any transaction or arrangement referred to in this presentation.

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended (“MiFID II”); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the “MiFID II Product Governance Requirements”), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any “manufacturer” (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the securities described in this Presentation have been subject to a product approval process, which has determined that such securities are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the “Target Market Assessment”). Notwithstanding the Target Market Assessment, distributors should note that: the price of the securities may decline and investors could lose all or part of their investment; the shares offer no guaranteed income and no capital protection; and an investment in the securities is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Transaction. Furthermore, it is noted that, notwithstanding the Target Market Assessment, the Managers will only approach investors who meet the criteria of professional clients and eligible counterparties in Member States of the EEA other than Portugal.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the securities. Each distributor is responsible for under taking its own target market assessment in respect of the securities and determining appropriate distribution channels. By attending the presentation you will be taken to have represented, warranted and undertaken that: (i) you are a Relevant Person (as defined above); and (ii) you have read and agree to comply with the contents of this notice.

Certain figures contained in this presentation, including financial information, have been subject to rounding adjustments. Accordingly, in certain instances, the sum or percentage change of the numbers contained in this presentation may not conform exactly to the total figure given.

R OA DS H OW P R E S E N TAT I O N | V I STA A L EG R E AT L A N T I S

Disclaimer


inDex 1. Overview of the Offering 4

2. Company Overview 6

3. Investment Case 11

4. Products and Markets 18

5. Industry 21

6. Strategy 24

7. Financial Performance 28

8. Final Remarks 32

ANNEX 34

4

1.Overview of the offering

5


1 . O V E R V I E W O F T H E O F F E R I N G

Offering structure

Issuer • VAA – Vista Alegre Atlantis SGPS, S.A.

Selling Shareholder • Visabeira Indústria SGPS, S.A.

Offer Structure• Public offering in Portugal + institutional offer to national and international investors• Capital increase without pre-emptive rights + secondary offering

Size

• Up to 25% of VAA’s share capital (after capital increase) corresponding to 43,545,470 shares:• Capital Increase of 21,772,735 new shares (12.5%) - Primary Offering • Sale of 8,709,094 existing shares by Visabeira Indústria (5%) - Secondary Offering• Upsize option for up to 13,063,641 shares to be sold within the institutional offer by Visabeira Indústria (7.5%) - Secondary Offering

Use of Proceeds• Issuer: implementation of some measures of its strategic plan, especially on the operational and commercial vectors

+ partially reducing debt to strengthen balance sheet and optimize capital structure

Price Range • Between €1.00 and €1.30 per share

Bookbuilding/ Offer Period • From November 29th until December 12th

Pricing and allocation • December 13th

Selling Restrictions • International private placement to investors outside the US pursuant to Reg-S

Lock-up • 180 days for the Issuer and the Selling Shareholder

Listing • Euronext Lisbon

Syndicate• Joint Global Coordinators: CaixaBI, Millennium BCP• Co-Lead Managers: Nau Securities

6

2.COMPANY OVERVIEW

7


2 . C O M P A N Y O V E R V I E W

experienceD management team

nunO marques

CHAIRMAN 18 years of experience

• Degree in Electrotechnical Engineering

• Master in Business Administration

• Specialization in Management Control & Performance Evaluation

• Previously CEO of Visabeira Global and Managing Director at Constructel France and Constructel Belgique

paulO pires

CEO 23 years of experience

• Responsibility: Operations manager

• Works for VAA since 1997

• Previously General Ceramic Production Manager for Ria Stone

• Previously worked at General Electric - Continuous Improvement Manager

• Degree in Manufacturing Engineering

• Advanced Management Program for Executives

paulO sOares

EXECUTIVE BOARD MEMBER 21 years of experience

• Responsibility: Head Of International Sales & Expansion

• Previously VAA Commercial Director responsible for the Retail, Horeca and B2B channels

• Previously Commercial Director at Cristal de Sèvres

• Previously Export Sales Director at Crisal

• Degree in Business, Specialization in Marketing

nunO Barra


• Responsibility: Marketing & Design management

• Previously CMO at Visabeira Group

• Prior to that, worked as consultant at KPMG and PwC

• Degree in Economics, MBA with Marketing and international business specialization

alexanDra lOpes


• Responsibility: Financial, Accounting, Tax, Legal and HR management


• Works for Visabeira Group since 1999

• Previously Manager for Operational Efficiency and Cost Reduction

• Degree in Economics

• Post-graduation in Management

alDa cOsta


• Responsibility: Internal audit, Process improvement


• Previously Financial Manager

• Degree in Business Organisation and Management, MBA

8



Vaa grOup BefOre reOrganizatiOn• Vista Alegre Atlantis Group (“VAA”) produces, distributes and sells a variety

of products within the sector of ceramic and crystal, both retail and hotel segments, operating in four different productions areas

• The essential values of the company are: quality of excellence, innovation, design, universality, the connection to art and culture, and always combining tradition and modernity

Porcelain and other products is the segment for fine and high-end tableware. Porcelain is a non-porous, extremely resistant and durable material that allows the production of thin and translucent products

Such business area, under which VAA is acknowledged as one of the most prestigious brands, constitutes around 51% of VAA’s revenues (FY2017)

Stoneware Tableware is a product with good mechanical resistance, allowing good performance in daily use. It is thicker than porcelain and allows for a great variety of colors and textures. Because it is single fired, it is very eco-friendly.

This business area has allowed the company to sell to large retailers, most notably IKEA, which subsequently has helped propel VAA’s products internationally across Europe and Asian countries

By 2017, VAA’s revenues were 22% provided by this business area.

Stoneware Oven-to-Tableware include products resistant to oven, freezer and microwave, the material of which has an opaque and darker body.

VAA Group produces for this business area, which accounts for 14% of VAA’s revenues (FY2017)

Crystal and Glass comprise products of high and prestigious quality that result from the incandescent finest raw minerals that are luminous, resonating and very transparent. Includes tableware, barware, giftware, decorative products, limited editions and luxury bottles to prestigious beverage producers

Member of the strict group of brands who produce the best crystal in the world

The company positions itself in the high-end segment of the market, which accounted for 14% of VAA’s sales in 2017

9



Vaa grOup reOrganizatiOn• In 2017, VAA executed a capital increase of €51.5M that included the conversion of shareholders’ loans into equity, strengthening VAA’s capital structure,

following which the company expressed the interest to increase its free float under terms and conditions to be disclosed to the market in due time

• In 2018, the VAA continued the group reorganization with the acquisition of Cerutil and Bordalo Pinheiro and the sale of VA Grupo - Vista Alegre Participações

R E A S O N S F O R G R O U P R E O R G A N I Z AT I O N

• Concentrate all participations in the ceramics sector in VAA, SGPS

• Provide Vista Alegre Group with greater financial and economic strength

• Strengthen Vista Alegre’s position in the sector

• Cerutil is a modern factory specializing in the design and production of stoneware oven-to-tableware. It can offer tailor-made solutions for the specific needs of each market

• Bordallo Pinheiro began producing ceramics in 1884 at Fábrica de Faianças in Caldas, with pieces of great technical, artistic and creative quality, including “azulejos” (blue tiles), tile panels, vases, table centrepieces, fountain basins, jugs, plates, perfume bottles and gigantic animals. Thanks to a modern entrepreneurial approach, Bordallo Pinheiro plays a fundamental role in the revival of Portuguese ceramics, both at a national and international level

T R A N S AC T I O N F I N A N C I A L S

• Cerutil and Bordallo Pinheiro were transferred to VAA and “VA Grupo Vista Alegre Participações, SA” – the company that holds the non-operating real estate assets - was transferred to Grupo Visabeira. This transaction involves a net payable of €26.8M to Grupo Visabeira, with no additional debt to VAA

B R I E F OV E R V I E W O F T H E C O M PA N I E S I N VO LV E D I N T H E T R A N S AC T I O N

10



Vaa grOup reOrganizatiOn (recent transactiOns)• Grupo VAA has concluded a restructuring process involving the acquisition of Cerutil and

Bordallo Pinheiro (formerly held by Visabeira Indústria), thereby concentrating the ceramics and crystal/glass product lines under VAA and strengthening its position in the market, and the sale of the company that holds the Group´s Real Estate assets (VA Grupo)

* Cerutil owns 100% of Bordalgest which in turn owns 83.99% of Bordallo Pinheiro

P R E -T R A N S A C T I O N G R O U P S T R U C T U R E P O S T-T R A N S A C T I O N G R O U P S T R U C T U R E

84%*

Grupo Visabeira

VisabeiraIndústria

Vista Alegre Atlantis

Cerutil

Bordallo Pinheiro

3.64%

90.50%

100%

100%

VA GrupoVista Alegre

Participações, SA

99.3%

84%*

VisabeiraIndústria

Vista Alegre Atlantis

Cerutil

Bordallo Pinheiro

3.64%

90.50%

100%

100%

Grupo Visabeira

VA GrupoVista Alegre

Participações, SA

100%

11

3.Investment Case

12


3 . I N V E S T M E N T C A S E

strengths

T O P P R O D U C T P O R T F O L I O

• Manufacturing across various distinct products and business areas

• Constant focus on differentiating products through design and quality

B R O A D I N T E R N AT I O N A L P R E S E N C E

• Geographical footprint across 82 countries

• Business model that allows VAA for further distribution expansion in international markets

M A R K E T L E A D E R S H I P

• Solid brand awareness and prestigious company

• Market leading position in Portugal in the utilitarian and decorative ceramics and crystal sector in Portugal 1

S T R O N G F I N A N C I A L P E R F O R M A N C E

• Revenues experiencing consecutive positive growth rates

• Growing turnover not tracked by expenses, with EBITDA* increasing 41% CAGR since 2015

I N N O VAT I O N

• Investment plan to expand capacity in the different production facilities

• Introduction of new technologies and methodologies in the production process

1 2 3 4 5

1 - Sources: On the basis of the analysis by VAA of the annual sales indicated in the 2017 reports of the following companies in the utilitarian and decorative ceramics and crystal sector (as no players are active in crystal sector in Portugal): Ceragês, Cerãmiupe, Costa Verde, Favicri, Grestel, Matcerâmica, Porcel, Primagera and Spal.

* Adjusted EBITDA, is a Alternate Company Performance Indicator (unaudited) calculated as the sum of operating results, amortizations / impairments / provisions for the year and impairment of non-depreciable assets and deducting fair value increase / reduction.

13



strengthsTOP PRODUCT PORTFOLIO

• In line with ever-changing preferences and consumers’ shift towards more sophisticated purchases that value more design and quality, VAA has remained faithful to its core values and principles to deliver high quality products, combining tradition and modernity

• Awarded numerous international prizes. In 2017 alone, it has been awarded 19 prizes

• Limited editions pieces for museums and VAA’s Collectors’ Club. Pieces/ exhibitions are displayed in various venues (NY MoMA, London’s Victoria and Albert Museum, amongst others)

• Pieces often showcased in lifestyle media publications such as AD, Architectural Design, Elle Décor and many prestigious others globally

• Ever more frequent partnerships with contemporary artists have gained international recognition, such as: Christian Lacroix, Marcel Wanders, Oscar de La Renta, Pineda Covalin, Sam Baron and others

VAA’s product portfolio spans across several different offerings, namely;

• Tableware

• Bar and wine items

• Decoration

• Giftware

• Cookware

• Lighting

• Cutlery

• Artistic and design pieces

High potential for a brand extension to lifestyle complementary products

DESIGN

• The Quality Management System of the company is certified by an independent entity - Certification ISO 9001

• Quality control examines products across the various production stages, with tests in laboratories, control of product’s characteristics and audit to products’ shipments

• VAA is certified by some of its major clients as a requisite for the continuity of the contracts, spanning environmental, social, hygienic and safety concerns

• Recognized by customers as a Superbrand

QUALITY DIVERSIFICATION

14



strengthsBROAD INTERNATIONAL PRESENCE

• VAA’s exports in 3Q 2018 correspond to around 67% of total revenue and cover 82 countries – a clear reflection of VAA’s internationally-driven business plan

VAA plans to further increase its international presence by:

• Consolidating its position in markets where it is already established

• Opening new flagship stores in main cities

• Enhancing local commercial teams

• Creating great consumer experiences and social network activity

• Increasing product portfolio and entering new segments

• Developing the online sales channel

• Partnering with luxury restaurants and hotel chains

• Reinforcing commercial efforts in South Korea, China, Russia and the Middle East

FUTURE

ANGOLA | 1 store

BYELORUSSIA | 1 store

BRAZIL | 1 store, 20 corners, 250 premium retail sales

CHINA | 3 corners

SOUTH KOREA | 2 corners

DUBAI | 2 corners

SPAIN | 2 stores, 44 corners ECI

U.S.A. | 1 showroom (New York)

FRANCE | 3 corners

ITALY | 1 corner

KUWAIT | 1 store

MACAU | 1 store

MEXICO | 2 corners

MOZAMBIQUE | 2 stores

NAMIBIA | 1 store

PORTUGAL | 28 stores

TURKEY | 1 corner

Most notably, VAA sells and has operations in USA, Brazil, Mexico, India, Spain and France, but also across other European countries, South America, Middle East, Asia Pacific and CIS.

Vista Alegre operates in three main areas – retail, Horeca and private label –, covering own stores, corners, independent stores, online, corporate business, decorators, hotels, restaurants, airlines, yacht and cruise ships.

GLOBAL BRAND

15



strengthsMARKET LEADERSHIP

• The brand has received domestic and international recognition awarded for its build quality and design, being acknowledged as one of the most prestigious brands within its business areas*. This has proven highly crucial to position VAA as a top global player in the ceramics and glass markets

• Across all business areas and offerings, VAA’s main competitors are both local and international players, with an increasing presence from Asian producers.

• VAA has maintained a long-standing market leading position in Portugal 1. As for the international market, revenue growth has propelled the company, now placed among the largest international players both in revenue and EBITDA. Specifically, VAA ranks eighth worldwide in turnover against its listed comparables2.

• Vista Alegre operates in three main areas – retail, Horeca and private label –, covering own stores, corners, independent stores, online, corporate business, decorators, hotels, restaurants, airlines, yacht and cruise ships.

MARKET POSITIONINGMAIN COMPETITORS

Sources: Bloomberg, Companies Reports and websites.

*The prestige and recognition resulting from awards and distinctions obtained (19 international distinctions attributed in 2017 only and the recognition as a trusted brand by the Portuguese consumers by Superbrands 2017), associated with the international expansion of VAA support the global scale and visibility of Vista Alegre brand.

1 - Please refer to page 12 2 - Please refer to page 22

16



strengthsSTRONG FINANCIAL PERFORMANCE

• VAA’s efforts to deliver an increasingly more diverse offering of high quality products1, increase its brand awareness, intensify its international presence, expand its partnerships and invest in innovation and efficiency have allowed the company to enjoy a strong financial performance over the last few years.

2015 2016 2017

M€

2018

71.8 75.4

60.9

85.0

63.9

ANNUAL 3QOperating Cash flow Capex

2015 2016 2017

M€

3Q 2018

4.7

8.8 9.0

5.6

11.0

5.7

9.7

17.5

T U R N O V E R

2015 2016 2017

M€

2018

9.36.8

9.5

13.6

11.4

10%13%

16% 18%

EBITDA** MarginANNUAL 3Q

E B I T D A* O P E R AT I N G C F

Values before the reorganization process

*Adjusted EBITDA, is a Alternate Company Performance Indicator (unaudited) calculated as the sum of operating results, amortizations / impairments / provisions for the year and impairment of non-depreciable assets and deducting fair value increase / reduction.

**Adjusted EBITDA Margin is an alternate Company Performance Indicator (unaudited) calculated as Adjusted EBITDA / Sales and provision of services.

1 - Such quality is evidenced in the segments of porcelain and crystal by design awards obtained by VAA collections between 2016 and September 2018. Generally, such quality also arises from the control process and of the obtained certifications. Furthermore, VAA has strongly invested in innovation in order to update the production processes and sustain a high standard of quality and design (as evidenced the investment projects in the last 3 years and currently in course.

17



strengthsINNOVATION

• Under an increasingly competitive environment, VAA has been continuously investing with a specific focus on innovation in order to improve its production processes and sustain a standard of quality and design that seeks to one up other market participants

• VAA emphasizes a great commitment on merging artisanal methods with state-of-the-art production technology, for which it invests in Research and Development and Innovative projects, as exemplified below

• Kaizen culture in all organization (Continuous Improvement mindset)

2015

• Automation of Ria Stone factory

• R&D project Decorglass that focuses on the limitations of glass decoration techniques and development of a new glass range of products

2016• Modernization of VAA factory to allow for better storage, management and logistics (customers services)

• New technologies implemented in the porcelain production that resulted in quality, productivity and energy efficiency

• New R&D projects M2G2 and Casa, in order to develop new Stoneware products with higher added-value

2018

Introduction of a series of new technologies,namely regarding:

• Improved processes by reducing cycle time, control and flexibility

• Optimized layout and pull flow production system

• Improved processes by merging different stages into one

• Creation of unique product shapes

• Process automation and energy efficiency

2020

• Digital decoration evolution (Porcelain in raw glaze, fired glaze and decal)

• Energy Efficiency: • State-of-art equipment’s (green generation) • Efficient Kilns: Ultra light structures (Fibers), hot air recuperation for burners • Renewable Energies - photovoltaic panels (20% reduction)• Circular economy, raw-materials optimization and waste reduction (reduce, reuse, recycle)

2019• Digital decoration in single firing process in Ria Stone (Stoneware tableware)

• Integrated & automated internal logistic (AIV – Automotive Intelligence Vehicle)

• R&D + Innovation projects in Products and Processes

• Industry 4.0 - Online and reliable process control

• Smart warehouse management (Reliability and Efficiency)

18

4.Products and markets

19


4 . P R O D U C T S A N D M A R K E T S

Business areas after reOrganizatiOnWith Bordallo Pinheiro, a new business area was added – EARTHENWARE

PORCELAIN & OTHER PRODUCTS

TablewareHome Decor / Giftware / Special Editions

HotelwareCutlery

TablewareGiftware

Special Editions

TablewareHotelware

Tableware

CRYSTAL & GLASS

CrystalwareHome Decor

Glassware

STONEWARE / TABLEWARE STONEWARE / OVEN-TO-TABLEWARE EARTHENWARE

SALES 3Q 2018: €28.8 M SALES 3Q 2018: €8.6 M SALES 3Q 2018: €13.4 M SALES 3Q 2018: €15.1 M SALES 3Q 2018: €4.6 M

Unaudited pro forma figures prepared by reference to 3Q 2018 and including Cerutil and Bordalo Pinheiro.

20


4 . P R O D U C T S A N D M A R K E T S

markets (3q 2018 tOtal turnOVer By market anD prODuct)• VAA is strongly export-oriented with a focus on European markets but with sales in such diverse countries

as Brazil, USA, India and Mozambique, among others. External markets account for 70% of VAA’s total sales

• The Porcelain segment is the greatest contributor to VAA’s total turnover (41%), followed by Stoneware Oven-to-Tableware (21%) and Stoneware Tableware (19%)

PortugalSpainGermanyFranceItalyBrazilRest of EuropeRest of World

30%

16%11%

8%

8%

4%

14%

9% Porcelain and other productsStoneware TablewareStoneware Oven-to-TablewareCrystal and GlassEarthenware41%

19%

21%

12%

7%

T U R N O V E R B Y M A R K E T T U R N O V E R B Y P R O D U C T


21

5.THE INDUSTRY

22


5 . T H E I N D U S T R Y

market pOsitiOn• VAA’s strong international presence makes it a relevant player worldwide within the segments

in which it operates, and its EBITDA margin is one of the highest amongst its main listed peers

VAA

Tableware

Glassware

Cutlery

Home Decor

Giftware

Horeca

Home accessorie

s

Cookware

Textiles

Lighting

Libbey

Fiskars

Villeroy & Boch

Baccarat

BHS Tabletop

Portmeirion

Noritake

Churchill China

Degrenne

B R A N D S

On the basis of the analysis by VAA of the information related to 2017 annual turnover, EBITDA and EBITDA margin of the following companies in the utilitarian and decorative ceramics and crystal sector (information included in the respective annual reports, websites and Bloomberg): Baccarat, BHS Tabletop, Churchill China, Degrenne, Fiskars, Libbey, Noritake, Portmeirion and Villeroy & Boch.

*Adjusted EBITDA, is a Alternate Company Performance Indicator (unaudited) calculated as the sum of operating results, amortizations / impairments / provisions for the year and impairment of non-depreciable assets and deducting fair value increase / reduction.

N.B.: Figures exclude, where possible, business segments that are not comparable to VAA

(1) Includes a Tools and Technology segment(2) Values include Cerutil and Bordalo Pinheiro, considering Adjusted EBITDA and Adjusted EBITDA Margin

(3) FY Mar17-Mar18

Turnover FY2017 EBITDA EBITDA MARGIN

653

9% 12% 5% 9% 9% 18% 12% n.a. 17% n.a.

M€

Libbey

Fiskars

Villero

y & Boch

Baccarat

BHS Tabletop (1

)

Noritake (3

)

Churchill

China

Degrenne (3

)

Portmeiri

on

VAA (2)*

59

574

71

278

13

147

13121

1193

1780

1060

1068

n.a. 43 n.a.

23Source: Global Ceramics Market: 2017-2021 (Technavio)


5 . T H E I N D U S T R Y

market trenDs• Expected high growth in ceramics market of around 6,6% CAGR until 2021

is accompanied by more complex and demanding customer preferences

Demand:

• Increasing demand most noticeable for home decoration and giftware products

• Growing disposition from consumers to follow recent and ever-changing trends for interior design and to purchase unique pieces

• Increasing demand in the hotelware tableware goods

Preferences:

• Consumer preferences shifting towards more sophisticated products, namely in terms of design

• Top Design is a “must have” to compete against the price focused companies /countries and products/brands must tell a consistent story

• The global market is expected to grow at a 6.6% CAGR until 2021, whereas production in Europe is expected to grow at approximately 1.4% per year until 2020

• The USA (amongst the countries in which VAA operates) is the main importer of such products with 45% of global imports (2016), while China takes the lead in exports with 58%

• Portugal has been increasing its exports at around 12% per year from 2012 to 2016

20.7 22.0 23.4 25.0 26.7 28.5

€bn

2016 2017 2018 2019 2020 2021

Global tableware and ornamental ceramic market

M A I N T R E N D S

G L O B A L O U T L O O K

24

6.Strategy

25


6 . S T R A T E G Y

strategic plan

C O M M E R C I A L

Consolidate presence in Spain, Brazil and the USA, while simultaneously focusing on recently-entered areas such as Mexico, India, Italy and France

• Open flagship stores in main cities: Paris, New York, Milan, London, Dubai, Hong Kong and Toquio

• Enhance local commercial teams to better manage/understand the markets and expand commercial and sales relationships

• Improve communication and brand awareness by hiring local PR firms and increasing social network activity

Develop the HORECA sector

• Partnerships with luxury restaurants and hotel chains, such as the recent contract with Club Med

Other actions

• Increase product portfolio and enter new market segments, namely high-end lighting

• Develop the online sales channel

O P E R AT I O N A L

Product innovation

• R&D projects with suppliers, knowledge centers and designers to deliver innovative products (Design, Image, elegance, functionality and sustainability)

Process innovation

• Development and introduction state of art equipment in efficient layouts in order to improve: Quality, Productivity, Energy Efficiency, Safety and Environmental Sustainability

Management innovation

• Develop the principle of Continuous Improvement mindset – Kaizen (Everybody, Everyday, Everywhere), an inside culture that covers industrial, commercial and supported areas

• HR Management: HR global programs to create, strong team building, well trained, skilled and committed workers.

•

P A R T N E R S H I P S / D E S I G N

Maintain and expand relevant partnerships with:

• Luxury brands in fashion, watches, decoration and furniture, such as Oscar de la Renta, Lacroix, Pineda Covalin, amongst others

• Renowned designers such as Ross Lovegrove, Marcel Wanders, Jaime Hayon and others, as well as visual artists, architects, writers and others

• Clients such as IKEA, Henessy and Rémy Martin

1 2 3

Industry 4.0 Program:

• Continuous monitoring of equipment and processes in order to have on-line and reliable information

• Monitoring the main KPIs and targets through interactive dashboards, as - Quality, Productivity, Output and Energy Efficiency

• This information in real-time, support the management to take fast decision in order to improve operational performance and create predictive models to avoid potential issues

26


6 . S T R A T E G Y

strategic plan• Together with its plan that is transversal to all segments,

VAA has defined individual strategic plans product-wise

P O R C E L A I N & O T H E R P R O D U C T S

• Rebranding with a focus on the luxury segment

• Segregation of top-end product array to evoke brand awareness, and build accessibility via mid-end portfolio

• Partnerships with contemporary design artists within the painting, sculpture, architecture, and literature areas as well as other art forms, to differentiate its products when entering new markets

• Focus on Home accessories, by selling all table products including textiles, glasses, candles, cutlery and limited edition furniture

• Brand extension to Lifestyle products

S T O N E WA R E O V E N -T O -TA B L E WA R E

• Bet on impulsive shopping by opening small-sized stores in high customer influx areas, specialized in selling pieces with larger added-value

• Develop lines of Kitchen accessories

E A R T H E N WA R E

• Increase the portfolio of Bordallo’s products to hotelware

S T O N E WA R E TA B L E WA R E

• Preserve the partnership with IKEA via the Ria Stone subsidiary with the recently extended contract until 2026

C R Y S TA L & G L A S S

• Diversify luxury segment by introducing new elements, namely illumination and mixtures with silver, gold and porcelain

• Develop the segment of corporate business

• Develop the B2B partnerships with global luxury brands

27


6 . S T R A T E G Y

inVestment prOjects• VAA’s strategic plan and investments intend to increase the company’s competitiveness and brand

awareness by producing increased value-added products that shall lead to greater sales at lower costs

• Increase brand awareness

• New stores (porcelain and Earthenware)

• New contracts/partnerships (IKEA, Henessy, Rémy Martin, Martell)

• New kilns for production (Earthenware, Oven stoneware and crystal/glass segments)

• New technologies and methodologies

• Automation of production process

• Higher product differentiation

• Improve product quality and resistance

• Increase capacity

• Increase efficiency

• Waste reduction and recycling, circular economy

• Economies of scale

• Lower production cycle time

• Increase competitiveness

• Increase added-value

• IKEA: extended until 2026, worth €250m. Increase in units supplied from 31.5m to 48.5m pieces a year, increasing related sales by approximately more 57%

• Henessy: new pluriannual contract worth €16m to supply luxury crystal cognac bottles

• Remy Martin: new proposed pluriannual deal under negotiation and worth up to €12m to supply luxury crystal cognac bottles

• Club Med: tableware supply across 73 resorts, 22 countries and 3 years

Relevant contracts:Relevant investments: Relevant outputs:

28

7.Financial performance

29


7 . F I N A N C I A L P E R F O R M A N C E

financial perfOrmance• With the acquisition of VAA by Grupo Visabeira in 2009, the company’s

financial performance recorded a significant improvement

• Despite adverse market conditions, the company showed strong sustained turnover growth, particularly since 2014

• Improvements in VAA’s operational efficiency and management resulted in outstanding growth in both EBITDA* and EBITDA** margins

54.450.8

53.9 54.2 54.2

65.2

71.875.4

85.0

2009 2010 2011 2012 2013 2014 2015 2016 2017

M€

CAGR5.7%

-6.5

0.3

2.51.6 2.3

6.8

9.5

13.6

1.0

2009 2010 2011 2012 2013 2014 2015 2016 2017

-12%

1% 2%5% 3% 3%

10%13%

16%

EBITDA* EBITDA** margin

T U R N O V E R E B I T D A*

*Adjusted EBITDA is a Alternate Company Performance Indicator (unaudited) calculated as the sum of operating results, amortizations / impairments / provisions for the year and impairment of non-depreciable assets and deducting fair value increase / reduction.

**Adjusted EBITDA Margin is an alternate Company Performance Indicator (unaudited) calculated as Adjusted EBITDA / Sales and provision of services.M

€

30



financial perfOrmance• VAA’s significant growth in sales and improved

operational efficiency led to enhanced operating cash flows

• The company’s constant effort to enhance productivity and product quality, as well as to expand to new markets, implied significant investments over this period

• In 2017, VAA issued 367,743,189 shares for a total amount of €51.5M, of which €50M were converted from shareholders’ loans into equity

-5.5

1.2

4.7

8.8 9.0

5.6

11.0

5.7

1.8

-2.7

2.7

-4.4

4.4

-3.9

15.3

-1.4

12.4

-0.2

2009 2010 2011 2012 2013 2014 2015 2016 2017

M€

Operating Cash flow Capex

103.9

131.4 130.9 130.4146.1

166.1 172.8 175.8 177.8

41.230.132.833.2

22.89.418.3

-9.7 -0.7

2009 2010 2011 2012 2013 2014 2015 2016 2017

M€

Assets Net Debt from financial institutions Equity/Assets ratio

-45%

24% 25% 23% 19% 17% 16% 18%

46%

C A S H F L O W C A P I TA L S T R U C T U R E

31



prO fOrma financials

92.770.4

2017 3Q 2018

M€

16.8 13.4

2017 3Q 2018M

€

18.1% 19.0%

EBITDA** Margin Assets

Equity/ Assets Ratio

Net Financial Debt

195

85.9

3Q 2018

M€

24.3%

T U R N O V E R E B I T D A* C A P I TA L S T R U C T U R E

Unaudited pro forma figures prepared by reference to 2017 and including Cerutil and Bordalo Pinheiro. The 2017 values of VAA do not represent any consolidation of accounts and are for illustration purposes only.

*Adjusted EBITDA is a Alternate Company Performance Indicator (unaudited) calculated as the sum of operating results, amortizations / impairments / provisions for the year and impairment of non-depreciable assets and deducting fair value increase / reduction.


32

8.Final remarks

33


8 . F I N A L R E M A R K S

final remarks

• Vista Alegre produces a wide range of products that are differentiated by their unique design and build quality

• The company’s internationally-driven business plan has been propelling the brand abroad, which now is selling in 82 countries

• VAA enjoys strong brand awareness in Portugal and increasing prestige internationally, making it a market leader in its home country* and a major player globally

• VAA’s financial performance has been greatly improving, with revenue growing at a fast pace and EBITDA** margin jumping 6 percentage points over the last three periods

• The company is committed to its expansion and enhancement, focusing on innovation to consistently expand capacity and introduce more efficient and pioneering production processes

• VAA’s strategic plan moving forward is threefold, focusing on commercial, operational and partnerships/design areas

• Current and upcoming investments ultimately aim to strengthen market position and making VAA a brand of reference, by increasing competitiveness, product added-value, growing sales and achieving cost efficiencies

* Sources: Please refer to page 12.


34

ANNEX

35


A N N E X

markets (3q 2018 turnOVer By prODuct)• While Portugal is VAA’s main market in the Porcelain, Earthenware and Crystal & Glass segments, stoneware production is essentially

directed towards external markets. Spain (16%), Germany (11%), France (8%) and Italy (8%) are VAA’s main external markets

GermanySpainFranceItalyRest of WorldNetherlands Rest of Europe

26%

25%21%

14%

2%4%

7%

S T O N E WA R E / TA B L E WA R E

PortugalSpainFranceUKRest of WorldBelgium Rest of Europe

38%

37%

7%

5%

6%4% 3%

C R Y S TA L & G L A S S

PortugalSpainRest of WorldBélgicaBrasilRest of Europe Italy

48%

14%

12%

6%

5%

10%5%

P O R C E L A I N & O T H E R P R O D U C T S

GermanyNetherlandsItalyFranceBelgiumRest of Europe Rest of World

27%

16%

12%

7%

10%

16%

12%

S T O N E WA R E / O V E N T O TA B L E WA R E

PortugalRest of EuropeRest of WorldUSANetherlandsUKItaly

67%

16%

5%3%

3%3%

2%

E A R T H E N WA R E


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