Aurelia CapitalAurelia Capital

Quarterly Macro & Portfolio Briefing

Q3 2024 update on Eurozone conditions and portfolio performance

ConfidentialQ3 2024

02 Executive SummaryAurelia Capital

Key Takeaways

Maintain defensive posture with selective industrials exposure

01
Eurozone growth remains sluggish at +0.9% y/y, below trend
02
Portfolio EBITDA grew +6.2% y/y, but consumer segment underperformed
03
€480M dry powder available for opportunistic acquisitions
04
Recommend overweight industrials, underweight consumer

Confidential02 / 08

03 Macro DashboardAurelia Capital

Eurozone macro conditions remain challenging

+0.9%

GDP growth y/y
Below trend (1.5%)

2.3%

Inflation (HICP)
Above ECB target (2.0%)

1.75%

ECB policy rate
Peak likely reached

1.14

EUR/USD
Stable but elevated

GDP Growth Trend (% y/y)

Inflation Trend (HICP %)

Source: Eurostat, ECB, Aurelia Capital analysis

Confidential03 / 08

04 Portfolio PerformanceAurelia Capital

Portfolio EBITDA grew +6.2% y/y despite consumer weakness

·11 companies in portfolio
·Aggregate EBITDA +6.2% y/y
·Two consumer companies below plan
·€480M dry powder available

EBITDA Growth by Sector (% y/y)

Source: Aurelia Capital portfolio data

Confidential04 / 08

05 Sector ImplicationsAurelia Capital

Macro conditions favor industrials and software over consumer

High Growth
Low Risk

Industrials

Benefit from capex recovery and energy transition

High Growth
High Risk

Software

Resilient demand but valuation pressure

Low Growth
Low Risk

Healthcare

Stable but regulatory headwinds

Low Growth
High Risk

Consumer

Discretionary spending weakness persists

Growth Potential ↑

Low Risk

High Risk

34%

Industrials

28%

Software

22%

Consumer

16%

Healthcare

Confidential05 / 08

06 Portfolio Heat ViewAurelia Capital

Two consumer companies underperforming against plan

ConsumerCo A

−12% vs Plan

Discretionary spending weakness in Southern Europe
ACTION: Cost optimization program launched

RetailCo B

−8% vs Plan

Inventory write-downs and margin compression
ACTION: Strategic review initiated

IndustrialCo C

+14% vs Plan

Strong execution in energy transition projects
STATUS: On track for exit in 12 months

SoftwareCo D

+9% vs Plan

Enterprise adoption accelerating
STATUS: Potential add-on acquisition target

Confidential06 / 08

07 Watch List & PositioningAurelia Capital

Next two quarters: Monitor risks and prepare for exits

Watch List

Consumer Segment Risks

· Southern Europe discretionary spending
· Inventory valuation adjustments
· Margin compression in retail

Positioning

Next 6 Months

· Overweight industrials (+5%)
· Maintain software exposure
· Underweight consumer (−5%)
· Prepare for two exits in 12 months

Opportunities

Dry Powder

· €480M available for acquisitions
· Target bolt-on software deals
· Select industrials add-ons

Confidential07 / 08

08 RecommendationsAurelia Capital

Next Steps

Maintain defensive posture with selective industrials overweight

Key Actions

·Overweight industrials by 5%
·Underweight consumer by 5%
·Prepare two exits within 12 months
·Deploy €480M dry powder selectively

Rationale

·Eurozone growth remains below trend
·Industrials benefit from capex recovery
·Consumer weakness persists

Confidential08 / 08