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Initiation of Coverage – 07.06.2021

Marzocchi Pompe Spa i s a world leader i n the design, production and marketing of high-performance gear pumps and motors, used in the following sectors: industrial (textile machinery, medical equipment, alternative energies), mobile (agricultural machinery, earth-moving machinery, forklift trucks), and automotive (transmissions, power steering, and active suspension).
The pumps carry out the function of bringing a fluid from one lowpressure tank to another high-pressure tank i n a hydraulic circuit. The
transfer takes place thanks to the rotation of two gear wheels inserted in the pump body.

The fluid power market, which includes all products that use pressurized fluids to generate, control and transmit power, which, according to estimates, generated revenues of € 7 billion, can be divided into two main categories: hydraulic and pneumatic. The
hydraulic segment, which also includes the products sold by Marzocchi Pompe, generated a share of about 66% of the total revenues of the fluid power market (equal to approx. € 4.6 billion) during the year. The pneumatic segment generated a share of about 34% of total fluid power revenues during the year (around € 2.4 billion).

W e have conducted the valuation of Marzocchi Pompe equity value based on the DCF methodology and market multiples of a comparable companies sample. The DCF method (which i n the calculation of the WACC includes for prudential purposes also a specific risk of 2.5%) provides a n equity value of € 50.5 million. The equity value of Marzocchi Pompe using market multiples i s € 38.4 million (including a discount of 25%). The result i s a n average equity value of approx. €44.4 million. The target price is € 6.80, rating BUY and MEDIUM risk

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