Company: Landi Renzo
Listings :Milan Exchange & Frankfurt Exchange
Ticker: LR.MI & ARQ.F
Market cap at time of publication: € 116 MEUR
Stock price at time of publication: € 0.54
Business: RNG/Hydrogen mobility & OEM producer


ESGFIRE prospect Landi Renzo has recently conducted a share capital increase which awarded the company €57 MEUR (Subscription price €0,53 EUR). The interview below was conducted by Marcel Goldmann at GBC AG. We are currently looking closer at possibly making Landi Renzo as a new ESGFIRE portfolio company and wanted to share this interview with our readers.


08/08/2022 - GBC Management Interview with Christiano Musi, CEO of the
Landi Renzo Group

'Landi Renzo Group is a global player specialised in energy transition
along the full value chain, aiming to become a global point of reference
for RNG and hydrogen applications for green transportation and clean tech
solutions. By 2025, we expect an increase in revenues with a CAGR of 15%,
and double-digit growth of EBITDA, expected to grow with a CAGR of 25%,
thanks to increasing revenues in segments that have higher margins compared
to our traditional market of light-duty applications.'

Landi Renzo S.p.A. is a technology group that focuses its range of services
on the growth sectors of 'Green Mobility' and 'Clean Technology/
Energy' (through a dedicated company called SAFE&CEC). Through this
positioning, Landi Renzo is very much involved in the ongoing energy
transition, which includes the transformation of the mobility and energy
sectors, with a strong focus on hydrogen and biomethane application along
the full value chain-from biomethane, hydrogen and CNG compression at
generation for grid injection and transportation, to CNG and H2 filling
stations, as well as components and systems for gas and hydrogen mobility.

Landi Renzo Group (Landi Renzo) has recently announced the successful
completion of the subscription period (subscribed volume: EUR 57.1 million;
subscription price: EUR 0.53 per share) of the capital measure launched
with a volume of up to EUR 60.0 million. The Landi family and Itaca Equity
Holding have created a new controlling holding company in the Landi Renzo
Group (Green by Definition), which in turn have subscribed to approximately
EUR 35.2 million (approximately 59.1% of the total volume of the capital
measure), with the current CEO of the company also participating in the
capital increase as a co-investor.

GBC has taken this as an opportunity to conduct an interview with the CEO
of the company, Mr. Cristiano Musi, about the capital measure that has been
started as well as about the current business development and the
perspectives of the company.

GBC: Mr Musi, the sharp rise in oil prices and the further intensification
of the Ukraine conflict (keyword: less dependence on individual energy
sources/suppliers) has given a significant boost to the field of
alternative fuels and energies, such as hydrogen, biogas (RNG, Renewable
Natural Gas) or LNG/CNG. What positive effects do you expect from this for
your two business areas Green Transportation (gas and hydrogen-based
mobility) and Clean Tech Solutions (compression solutions for gas and
hydrogen infrastructures)? How do you assess the market environment for
your company in general? What market trends can be observed?

Mr Musi: As you have pointed out, clean energy sources such as RNG,
hydrogen and CNG are playing an increasingly important role in the energy
transition sector in which we are involved along the full value chain, with
a broad range of products and applications, ranging from RNG compression
solutions and hydrogen-grid injection and transportation to compression
solutions for filling stations and key components and systems for gas and
hydrogen mobility, for light, mid- and heavy-duty.

It is a market with unprecedented growth in both Clean Tech Solutions and
Green Mobility worldwide. Just to give some figures:
- New repower EU expects biomethane production to increase tenfold,
growing from 2021 to 2030 from 3.5 to 35 bcm, which will mean the
building of 4,000 new RNG plants, which will require compressor

- There is momentum building for hydrogen, it being a gas which needs to
be compressed to be used with production expected to grow from 70 to
196 MT, with more than 10,000 filling stations to be built by 2030,
about 3,000 of which are expected to be built by 2025

At the same time, green transportation gas and hydrogen represent a fuel
fundamental to reducing CO2 and other pollutants. In particular, our
traditional business of gas mobility for light-duty for both OEMs and After
Market is stable with some markets growing by double digits such as India,
while the penetration of RNG/CNG and LNG in mid- and heavy-duty is expected
to growth roughly threefold from 2020 to 2025, with hydrogen also starting
to grow. This is the case because, as a matter of fact, gas is today the
only feasible solution to replace diesel for mid- and heavy-duty, with
hydrogen gaining momentum.

GBC: The EU is generally regarded as a pioneer in environmental and climate
protection and is pursuing ambitious climate protection goals. To what
extent can Landi Renzo benefit from the tightening environmental and
climate protection policies of the European community and other countries?
And what role does your technology group generally play in the so-called
energy turnaround so that individual countries and regions can achieve
their environmental and climate protection goals?

Mr Musi: Landi Renzo is reaping benefits from different aspects, regarding
both infrastructure (Clean Tech Solutions) as well as Green Transportation.
In Europe there are important ongoing investments in biomethane and
hydrogen, with natural gas also playing a very important role and the
market for SAFE&CEC growing in terms of revenues and backlog year by year
by more than 15% also thanks to innovative product development carried out
by our group, such as innovative compressor solutions for reverse flow for
GRTGAZ in France. On the mobility front, Europe is still a very important
market for light-duty and is growing on heavy-duty gas application, with
almost all OEMs approaching hydrogen technology. We are partners with many
OEMs that use our components and are our partners in new development. Just
as an example, we have recently worked with IVECO in designing a system
called Hytene, where CNG/RNG/LNG is mixed with hydrogen for their vehicles,
with incredible advantages in terms of CO2 emission as compared to diesel
vehicles. It is a system with high value added for end users. It is a
system which we believe presents the opportunity for a great deal of
further development.

GBC: The Landi Renzo Group generally pursues a growth-oriented corporate
strategy. Please briefly explain the current strategic focus of your
company and, within that, the growth plans (new business plan 2022-2025)
that you are pursuing with Landi Renzo.

Mr Musi: Since its foundation, the group has been growing constantly both
organically and inorganically. Today Landi Renzo Group is a strategic
platform acting in the energy transition, leveraging on its cash flow
businesses to sustain future business growth. Our strategy is focused on:

- being a global leader in gas and hydrogen pressure management and
fueling systems (Green Transportation segment)

- being a global leader in the field of alternative compressor solutions
for CNG, RNG and hydrogen (Clean Tech Solutions segment)

- increasing exposure to growing markets for LNG/CNG and hydrogen for
heavy-duty trucks (Green Transportation segment)

Our advantage is based on the fact that we are already present in all these
segments, with consolidated and innovative technology, also thanks to the
acquisitions we have recently completed, such as the acquisition of
Metatron, a leading provider of components for pressure management and
feeding systems for mid- and heavy-duty mobility for both gas and hydrogen
and Idro Meccanica, a leading supplier of hydrogen compression systems,
with more than 150 hydrogen compressors already working on different
applications, from industrial to filling stations.

We want to make use of our experience and new acquisitions to continue
growing in a very interesting market scenario and, by 2025, we expect an
increase in revenues with a CAGR of 15%, and double-digit growth of EBITDA,
expected to growth with a CAGR of 25%, thanks to increasing revenues in
segments that have higher margins compared to our traditional market of
light-duty applications, which is, incidentally, an important source of
revenue (cash cow business) for us.

Moreover, we want to work on improving our operational model, also
strengthening our organisation and bolstering our top management team, as
well as getting full synergies from the integration of the newly-acquired
companies in our group, with savings of around six to seven millions euros

GBC: In recent years, the Landi Renzo Group has significantly strengthened
its market position in the various growth sectors in which you operate
through targeted acquisitions. How do you currently assess the market
positioning of your two business areas and what potential do you see in
both sectors?

Mr Musi: Actually, we have dominant market share in the segments where we
are active, from light-duty gas mobility application where we estimate we
have a market share of about 30% worldwide, to pressure-regulation
management systems for mid- and heavy-duty gas and hydrogen where we have
an estimated market share of more than 50% as well as alternative
compression solutions, where we have an estimated market share of about
30%. These results have been achieved because of our historical presence
and thanks to the M&A strategy pursued by the group over the last few

But we continue to see interesting opportunities, both for organic and
inorganic growth. Thanks to recent acquisitions we have also completed our
portfolio for hydrogen, and now we will focus on business development, with
high opportunities for organic growth, also thanks to the growth of the
market. At the same time we will be ready to play a role in consolidation
and in reinforcing our presence in high-growth markets, such as North
America, if there is the right opportunity.

GBC: You recently announced the successful completion of the subscription
period (subscribed volume: EUR 57.1 million) for your initiated capital
measure with a volume of up to EUR 60.0 million. What was the background
for this step and for what specific purposes are these financial resources
to be used?

Mr Musi: This capital increase has different objectives. First of all, we
completed the strategic acquisitions of Metatron in 2021 and of Idro
Meccanica at the beginning of 2022 financing with debt. So, with part of
the proceeds, we are going to refinance these acquisitions at equity.
Furthermore, we have decided to bolster our capital structure to be able to
sustain further development.

On top of the capital increase, there is the entry of a new minority but
strategic shareholder, Itaca, which will support the majority shareholder,
the Landi family, in sustaining the development of the group over the long

GBC: As part of your capital measure, you also added a new well-known
investor, Itaca / Tamburi, to your shareholder group. How should this new
investor be classified in general (investment horizon, investment focus,
etc.) and will it also support the long-term growth ambitions of your

Mr Musi: Last March, the main shareholder, Girefin S.r.l., together with
Gireimm S.p.A., announced an agreement for a strategic deal with Itaca
Equity Holding, a leading Italian private equity company, backed by Tamburi
Investment Partners and by major Italian family offices. The Landi family
and Itaca have established a new controlling holding of Landi Renzo Group
(Green by Definition), which in turn had entered into a subscription
commitment of up to EUR 50 million.

The majority will be maintained by the Landi family, but Itaca is an
important and strategic shareholder that will support group transformation,
bringing their know-how from both the financial and industrial sectors.

They are strategic investors, looking at mid- to long-term value creation,
such as is evinced by the history of Tamburi Investment Partners, who have
a uniquely successful track record in working together with mid-sized
companies and helping them to accelerate growth and value creation for all

GBC: Based on your consolidated business figures, the Landi Renzo Group
achieved an increase in consolidated turnover and EBITDA to EUR 241.99
million (PY: EUR 142.50 million) and EUR 12.62 million (EUR 6.65 million)
respectively in the past business year. How would you sum up the past
financial year? Which particularly important goals were achieved?

Mr Musi: These figures take only partially into consideration the SAFE&CEC
consolidation and the Metatron acquisition. Moreover, they do not take into
account our Indian figures with KLR. I'd say that as a group in 2021 we
achieved about EUR 300 million in revenues and about EUR 23 million
adjusted EBITDA. Nonetheless, 2021 was still impacted by the long wave of
COVID, even if we had recovered from 2020, but it was mainly a strategic
year for us because of the transformation we had started thanks to the
acquisition of Metatron and Idro Meccanica. Thanks to these acquisitions we
now have a full presence in the mid- and heavy-duty transportation segment,
with a full range of gas and hydrogen components and, thanks to Idro
Meccanica, we have a full range of hydrogen compressor solutions, with an
installed base of about 150 hydrogen compressors already working on the
market, which is on top of the installed base of 6,000 RNG and CNG
compressors from SAFE&CEC.

GBC: What can investors expect from the Landi Renzo Group in the current
financial year 2022? What goals or targets have you set for yourself
(corporate guidance)?

Mr Musi: Considering the general situation, we have not released corporate
guidance. By the way, we expected improving performance compared to 2021 in
both the Green Transportation and Clean Tech Solution segments.

GBC: Where do you see the Landi Renzo Group in the next three to five
years, especially in terms of business regions, product range and business
volume? What is your overall vision for your technology group?

Mr Musi: Energy transition will be at the centre of international interest
in the coming years, with a huge investment focus on decarbonisation. CNG,
RNG and H2 will play an increasingly important role, as is becoming clearer
day by day.

Landi Renzo Group is a global player specialised in energy transition along
the full value chain, aiming to become a global point of reference for RNG
and hydrogen applications for green transportation and clean tech
solutions. We expect a significant growth in volume, especially in mid- and
heavy-duty and off-road applications as well as in the compressor markets
for CNG, RNG and H2 and our goal is to strengthen our competitive
positioning and market share, leveraging our innovative product portfolio
and technical know-how as well as the strength of our brands and our global
presence. We will also work on operational efficiency, keeping our capex
stable thanks to the investments already made, with a focus on cash

I strongly believe Landi Renzo has a unique opportunity to be a strategic
platform in energy transition, leveraging its cash-flow businesses to
sustain future business growth, with strong opportunities for value
creation for all our stakeholders.

GBC: Mr Musi, thank you very much for the interview.

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