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TRILUX GROUP MANAGEMENT GMBH

FORECASTING: PROBLEM SOLVED EUROFINANCE CONFERENCE, BUDAPEST, OCTOBER 15-17, 2014

OLIVER THISSEN

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• Founded: 1912

• Headquarters: Arnsberg (GER)

• Group revenue 2013: c. € 470m

• Employees worldwide / Arnsberg: 5,000/1,500

• C. 50 partners and subsidiaries

• Service centers in more than 50 countries

• Leading European provider of lighting solutions

• #1 in Germany and #3 in Europe

TRILUX GROUP – KEY FACTS

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TRILUX is well positioned along the lighting value chain with an integrated electronic division

Lamp / Components / LED Electronics Luminaires LMS

• Sourcing of sheets, plates, plastics and other raw materials

• Limited sourcing of conventional lamps

• Sourcing of LED modules

• Development of own platforms

• Development and manufacturing of inductive components (drivers, ballasts)

• Design and production of components for LED lighting, control gear for FL and HID lamps

• Design / production of luminaires for technical applications (indoor and outdoor)

• Sales / marketing of products under different brands in various market segments

• Services e.g. installation and maintenance

• Increased offering of light management systems

• Current offering in cooperation with Philips

• TRILUX is just developing its own Light Management System (LMS) “IRIS”, which will be launched in 2015

Covered by TRILUX

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TRILUX GROUP – STRUCTURE

Technical & decorative luminaires Indoor/Outdoor

Waterproof luminaires (OEM) Medical Lighting for OT/ Hot Floor areas

Retail/Shop-Lighting Electronic ballasts (OEM)

Inductive components & electronic parts (OEM)

Org

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el Customized solutions/

architectural lighting Online Shop

Centralized Platform Development for

LED Modules & Light Engines

Electronics Luminaires

TRILUX Group

ITZ TRILUX – Innovation und technology Center

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Our Portfolio covers a broad range of applications

Office Industry Health & Care Education

Shop & Retail Outdoor Architectural

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Key locations in Europe and Asia TRILUX Group – worldwide footprint (Dec. 2013)

• Production sites for luminaires solely in Europe

• 13 TRILUX sales organizations in Europe and Asia

• Production sites for Electronics solely in Asia

• Sales of Electronics mostly in Europe. Besides that local sales in India, China and Asean region.

Comments: Europe: Asia / Pacific:

Production site „TRILUX" Sales „TRILUX“

Production site „Affiliate" Sales „Affiliate"

Production site "Electronics" Sales "Electronics"

Zaragoza

Boreham Amersfoort

Mechelen

Entzheim Spreitenbach

Bergamo

Warsaw

Prague

Vienna Bratislava

Budapest

Arnsberg

Cologne

Pune

Delhi

Manila

Hong Kong ZhuHai

Guangzhou

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Strong history of profitability

Change of control – from

Owners to Management

(In €m)

260 271 285 289

267 283 287

314

376

406

375

408

445 440

470

15,2 6,0 3,8 16,2 15,8 17,5 13,5 18,0 19,5 21,0 11,2

24,2 17,5

(9,7)

9,0 0,3 14,3

5,8%

2,2% 1,3%

5,6% 5,9% 6,2% 4,7%

5,7% 5,2% 5,2%

3,0%

5,9% 3,9%

0,1%

3,0%

(2,2%)

1,9%

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Sales Reported EBIT Normalized EBIT Normalized EBIT Margin (% sales) Reported EBIT Margin (% sales)

Stock clearance from old technology

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Lighting market was heavily influenced by LED as new standard…

8

Long life and durable

Life time up to 100k h; resistant to shock, vibrations, external impacts

Energy efficiency Energy efficiency of 80%-90%

Ecologically friendly Free of toxic chemicals

Zero UV emissions Suitable for heat sensitive and UV- sensitive applications

Design flexibility Can be combined in any shape; dynamic control of light, color and distribution

Light dispersement

Higher application efficiency than conventional lighting

Instant light / switching

Light up immediately Switching does not affect lifetime

Decrease in LED costs

+ Increased LED penetration

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…leading to a delay in demand and producers had to adjust their capabilities and organizations which resulted in one-time adoption costs throughout the industry!

9

Selected challenges for producers…

Structure of LED-lighting solutions significantly different (e.g. LED module includes lamp -> increased complexity)

Shorter product life-cycles

Competitive products need the latest technology

…and what needed to be done

Accumulate relevant know-how and adjust capacities

Transform product portfolio and increase production flexibility

Reduce time-to-market

Higher consulting need for customers Adjust sales organization / approach

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TRILUX is now well positioned to benefit from the ongoing LED transformation

New LED products / improved sales

approach

Intensified service offering and LMS

Platform technology in production

Working capital optimization

• Higher LED quota than the competition and volume products will lead to a significant participation in future lighting market growth

• ITZ for centralized LED competence

• TRILUX Akademie • Simplify your light • LMS

• Lower costs and faster production • Simplifies sourcing • Faster development of new products

• Decreased working capital intensity • Reduced pass-through time • Consignment warehouses at LED-module suppliers

1

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COVENANTS (Syndicated Loan 2011; Covenant Holiday 2013)

COVENANTS 2011; figures of Dec. 31st, 2013

Capital Resources 76,7

Equity Ratio 31,7% Total Assets 241,7

≥ 30% 1) Equity Ratio Group

Debt 72,3

Debt Ratio 2,73x EBITDA 26,5

< 3,0x ( < 3,5x per June 30th) 2) Debt Ratio

EBITDA 26,5

Interest Cover Ratio 8,66x Net Interest Income 3,1

≥ 5,5x 3) Interest Cover Ratio

COVENANT reset 2014; figures of June 30th, 2014

Capital Resources 78,0

Equity Ratio 30,3% Total Assets 257,8

≥ 25% 1) Equity Ratio Group

Debt 79,0

Debt Ratio 2,63x EBITDA 30,0

< 4,0x (< 4,35x per June 30th) 2) Debt Ratio

EBITDA 30,0

Interest Cover Ratio 9,16x Net Interest Income 3,3

≥ 5,5x 3) Interest Cover Ratio

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CONSOLIDATED BALANCE SHEET 31. DEC. 2013 - EQUITY / LIABILITIES 31.12.2013 31.12.2012

EUR EUR

A. Equity

I. Capital shares of limited partners 9.388.140,12 16.489.650,42II. Balancing items, currency translation 3.505.827,04 5.005.669,02III. Balance sheet profit 36.327.648,52 32.047.206,39IV. Balancing items of other shareholders 183.119,78 229.501,19V. Participatory capital 4.825.000,00 4.725.000,00

54.229.735,46 58.497.027,02B. Provisions

1. Provisions for pensions andsimilar obligations 23.866.582,36 22.024.413,72

2. Provisions for taxes 521.227,65 563.282,763. Other provisions 21.183.196,64 21.589.348,89

45.571.006,65 44.177.045,37C. Liabilities

1. Liabilities to banks 70.821.096,21 77.581.910,632. Trade accounts payable 43.812.474,34 38.837.780,113. Notes payable 1.609.197,44 1.077.169,674. Other liabilities 46.200.524,73 44.385.658,58

162.443.292,72 161.882.518,99D. Deferred income 226.529,41 294.936,56

262.470.564,24 264.851.527,94

incl. shareholder loans 25,4 Mio.

Syndicated loan: - redeemable loan - Bullet - RCV (~40 Mio. EUR)

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LIQUIDITY PLAN/ACTUAL 2013 AND PLAN 2014

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TRILUX GROUP – BUDGET AND LIQUIDITY 2014 Liquidity planning 2014 per month [Mio. EUR]

-15

-20

-25

-30

-35

-40

-45

0

-5

-10

Dez Nov Okt Sep Aug Jul Jun Mai Apr Mar Feb Jan Dez Chancen/Risiken Szenario inkl. Swing Chancen/Risiken Szenario Budget 2013 IST (vorl.)

Free line1) 34 23 17 12 11 10 19 16 16 23 31 9 15

Liquidity sufficient in 2014 – free line after risks of 9 Mio. EUR in July 2014

COMMENTS

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METHOD OF (DIRECT) LIQUIDITY FORECASTING

5y integrated plan – P&L / BS / CF (annual basis)

Budget plan year n + 1 (monthly basis)

Liquidity planning year n + 1 (monthly basis)

Cash forecast / Cash Management (daily basis )

Account statements target/actual comparison

(monthly basis )

Rolling liquidity forecast for the next four month

(weekly basis)

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LIQUIDITY PLANNING INPUT / OUTPUT

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LIQUIDITY PLANNING ALLOCATION TO LIQUIDITY GROUPS

Spreadsheet G_01

Overview liquidity allocation (budget liquidity)

Enter the percentage of internal and external payments in the blue highlighted field

> Material External and Materials TX-Group > External and internal financial expenses > External and internal financial income

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LIQUIDITY PLANNING VAT / PERSONAL EXPENSES

Spreadsheet G_02

Considering VAT and tax rates for each liquidity group > External Sales divided in domestic and

international sales

Details concerning personnel expenses > Enter vacation/Christmas payments > Distribution of personnel expenses in social

security expenses and tax on wages

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LIQUIDITY PLANNING PAYMENT TERMS / FINANCIAL STATUS

Spreadsheet G_03

Considering payment terms > Enter for each liquidity group the shifting of

payments (measured in months) > E.g. posting of sales revenue vs. date of

customers payment

Estimation of the financial status (internal/external loans/deposits)

> September RFC helps to estimate the financial status as per 31.12.2014

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LIQUIDITY PLANNING OPENING BALANCE / MANUAL ADJUSTMENTS

Spreadsheet G_04

Fill in the opening balance as per 01.01.2015

Opportunity to enter manual adjustments for each liquidity group

Financing part is calculated automatically (reduction/increase to a fixed closing balance at the end of the month)

Do not forget to comment your manual adjustment!

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LIQUIDITY PLANNING OUTPUT (SINGLE COMPANIES CONSOLIDATION)

Spreadsheet G_05

Output: Liquidity Plan (Cash Budget) 2015

Individual credit facilities (TRILUX Finance BV) are based on the individual Cash Budget

Check all liquidity positions

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STRUCTURE OF THE LIQUIDITY PLAN (CASH BUDGET)

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ADDITIONAL INFORMATION FOR THE ROLLING FORECAST (WEEKLY BASIS)

QLIKVIEW

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ROLLING FORECAST PER AUGUST-NOVEMBER 2014 ON A WEEKLY BASIS

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PLAN/ACTUAL COMPARISON (WEEKLY BASIS)

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USE OF RCF PER JULY AND AUGUST STILL BETTER COMPARED WITH BUDGET

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THANKS FOR YOUR KIND ATTENTION!