Rai Way

Investor Presentation • Mar 17, 2022

2021FY Results Presentation

17 March 2022

Disclaimer

FORWARD LOOKING STATEMENTS

This presentation contains forward-looking statements regarding future events and the future results of Rai Way that are based on current expectations, estimates, forecasts, and projections about the industries in which Rai Way operates, as well as the beliefs and assumptions of Rai Way's management. In particular, certain statements with regard to management objectives, trends in results, margins, costs, rate of return and competition tend to be forward-looking in nature. Words such as "expects", "anticipates", "targets", "goals", "projects", "intends", "plans", "believes", "seeks" and "estimates", variations of such words and similar expressions, are intended to identify such forward-looking statements. These forward-looking statements are only predictions and are subject to risks, uncertainties, and assumptions that are difficult to predict because they relate to events and depend on circumstances that will occur in the future. Therefore, Rai Way's actual results may differ materially and adversely from those expressed or implied in any forward-looking statements. They are neither statements of historical fact nor guarantees of future performance. Rai Way therefore cautions against relying on any of these forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, economic conditions globally, the impact of competition, political, economic and regulatory developments in Italy. Any forward-looking statements made by or on behalf of Rai Way speak only as of the date they are made. Rai Way undertakes no obligation to update any forward-looking statements to reflect any changes in Rai Way's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based.

Rai Way participants

• Aldo Mancino, Chief Executive Officer
• Adalberto Pellegrino, Chief Financial Officer
• Giancarlo Benucci, Chief Corporate Development Officer

Delivering steady organic growth

Mln Eur; %

1) Leases impact estimated as sum of leasing right of use depreciation (excl. dismantling) + financial charges on leasing contracts

2) Recurring FCFE = Adj. EBITDA – Leases – Net Financial Charges – P&L Taxes – Recurring Maintenance Capex

Key messages on 2021

• Effects of development activities becoming visible:
• o Excluding non-core items, top-line growth of ca. +3%
• o Adjusted EBITDA up +5% (+160 bps margin) despite lower temporary savings from pandemic safety measures
• o Development capex exceeding €70m, mainly driven by network upgrade for refarming
• o Further improvement in recurring cash generation, above € 90m
• 24,36 €/cent dividend proposed to the AGM, equal to 100% pay-out and 4,5% dividend yield(1)
• National refarming: € 103m invested since 2019, activities fully on-track with progressive release of frequencies and switch to MPEG4 completed;
• Regional refarming: 7 regions awarded to Rai Way, network roll-out underway and expected full capacity occupation
• New infra & services: ongoing set-up of new infra & services
• Implementation of Sustainability Plan delivering results, with substantial upgrades from main rating agencies

● Growth to continue in 2022

FINANCIAL RESULTS

ESG

OUTLOOK

Resilience of TV broadcasting

• Excluding the 2020 spike driven by pandemic, DTT audience stable at ca. 10 mln per avg day since 2016 despite the growth in OTT usage
• Polarization type of contents - fruition mode confirmed: non-deferrable live contents directed to a wide audience (such as news, sports and entertainment) remains linear, with broadcasting representing the most efficient solution in terms of costs and network utilization/reliability

1) Target: Individuals aged 4+ Time: 02:00-02:00, Mln avg day 2) TTS = total time spent

Update on refarming for RAI

	Description	Progress as of 2021
A National MUXes coverage extension	Extension from ca. 400 to ca. 1.000 sites, DVB-T2 ready Active equipment to be partially • reallocated to the new macro regionalized UHF MUX	✓ Completed
B New macro regionalized UHF "DVB-T2" MUX	Deployment of a macro-regionalized MUX in UHF and 'DVB-T2' technology • Equipment upgrade to DVB-T2 • Distribution network and head-end upgrade	• Ca. 80% sites upgraded to T2 • Head End systems upgraded to MPEG4/HEVC ✓ • Distribution Network: o Terrestrial Network in radio link reconfigured ✓ Satellite transponders reconfigured ✓ o
C National MUXes upgrade to DVB-T2	National MUXes upgrade to DVB-T2 Equipment upgrade to DVB-T2 on the first 400 sites of the national MUXes (extension from 400 to 1.000 sites already in T2)	Ca. 70% sites upgraded to T2 • Head End systems upgraded to • MPEG4/HEVC ✓ Distribution Network: • o Terrestrial Network in radio link reconfigured ✓ Satellite transponders reconfigured ✓ o

• Base case scenario with management of 3 MUXes confirmed, resulting in € 15,8m step-up in Fixed Consideration (on a yearly basis effective from 1st of July 2021)
• So far, cumulated investments for ca. € 103m out of € 150m planned for the 2019-2022 period

Update on regional refarming

Areas awarded to Rai Way

• 7 areas awarded to Rai Way, with 100% success rate where the company competed
• Network roll-out completed in the regions of Northern Italy while progressing in line with roadmap in other areas
• Strong rationalization of networks (from several to 1 or 2 networks per area), improving spectrum efficiency and reducing distribution costs for broadcasters
• Commercial activity currently underway, with high level of MUX occupancy in all the regions

Progress on new infra & services

Update on ESG

2021FY Financial highlights

Mln Eur; % % YoY growth

136,1 142,9

+5,1%

Adjusted EBITDA margin

2021FY Results Presentation ¹¹ 1) Maintenance capex excluding component related to IFRS-16 leasing 2) Cash conversion = (Adj. EBITDA - Leases – Maintenance Capex) / (Adj. EBITDA – Leases). Leases estimated as sum of leasing right of use depreciation (excl. dismantling) + financial charges on leasing contracts

Core Revenues

• Refarming-related step-up in revenues from RAI
• (€ 15,8m + € 0,6m from reclassified new services on an annual basis)

Restatement of Revenues from RAI from 1st July 2021

• Excluding one-off items, third-party revenues down 4,7% driven by MNOs and expiration of certain lower-margin no-hospitality services
• upcoming contribution from regional refarming and supportive FWA dynamic to reverse the trend

Opex (excluding non-recurring)

Mln Eur; % % YoY growth

• Excluding capitalizations, non-core items and lower temporary covidrelated savings (on variable components), relatively stable underlying personnel cost
• Underlying Other Opex down by approx. 1% mainly driven by lower energy prices partially offset by higher maintenance; similar temporary savings from covid-related safety measures vs. 2020

Eur Mln, %	4Q 2020	4Q 2021	% YoY	2020FY	2021FY	% YoY
Core Revenues	56,4	58,2	3,1%	224,5	229,9	2,4%
Other Revenues & income	0,5	0,0		0,5	0,6
Adj. EBITDA % margin	31,5 55,9%	33,0 56,6%	4,5%	136,1 60,6%	142,9 62,2%	5,1%
Non recurring costs	0,1	-0,4		-1,0	-0,4
EBITDA % margin	31,6 56,0%	32,6 56,0%	3,1%	135,1 60,2%	142,6 62,0%	5,6%
D&A(1)	-12,9	-14,8	14,7%	-45,7	-51,5	12,7%
Operating Profit (EBIT)	18,7	17,8	-5,0%	89,4	91,1	1,9%
Net financial income (expenses)	-0,4	-0,1	-78,1%	-1,1	-1,2	10,6%
Profit before Income taxes	18,3	17,7	-3,3%	88,3	89,9	1,8%
Income Taxes % tax rate	-5,1 28,0%	-5,1 28,7%	-0,9%	-24,3 27,5%	-24,5 27,3%	0,9%
Net Income	13,2	12,6	-4,2%	64,0	65,4	2,1%

2020FY	2021FY	% YoY
224,5	229,9	2,4%
0,5	0,6
136,1	142,9	5,1%
60,6%	62,2%
$-1.0$	$-0,4$
135,1	142,6	$5.6\%$
60,2%	62,0%
$-45,7$	$-51,5$	12,7%
89.4	91,1	1,9%
$-1.1$	$-1,2$	10.6%
88,3	89,9	1,8%
$-24.3$	-24,5	$0.9\%$
27,5%	27,3%
64,0	65,4	$2.1\%$

• 2021FY Net Income up by 2,1% at € 65,4m as a result of:
• o Higher top line
• o +160bps profitability, with margin above 62%
• o Higher D&A following investment activity
• o Tax rate at 27,3%, benefitting from the € 1m one-off Covid-related tax relief accrued in 1Q

2021FY recurring FCFE(6) at ca. € 93m

1) Excluding component related to IFRS-16 leasing; 2) P&L taxes; 3) P&L financial charges excluding interests on employee benefit liability and interests on leasing contracts; 4) including renewal of leasing contracts and interests on leasing contracts; 5) Including current financial assets

Net Debt bridge

Mln Eur Net Debt/ 1y rolling Adj. EBITDA

6) Recurring FCFE = Adj. EBITDA – Leases – Net Financial Charges – P&L Taxes – Recurring Maintenance Capex. Leases estimated as sum of leasing right of use depreciation (excl. dismantling) + financial charges on leasing contracts

2021FY Results Presentation 15

2021 Recurring cash generation and dividend proposal

1) Recurring FCFE = Adj. EBITDA – Leases – Net Financial Charges – P&L Taxes – Recurring Maintenance Capex. Leases estimated as sum of leasing right of use depreciation (excl. dismantling) + financial charges on leasing contracts

• 2) P&L financial charges excluding interests on employee benefit liability and interests on leasing contracts
• 3) Dividend yield based on market closing price on 16/03/2022 (5,36 €/share)
• 4) Dividend proposal

Guidance 2022

REVENUES

● Mid-single-digit revenue growth driven by CPI, refarming for RAI and refarming for third parties

ADJUSTED EBITDA

• Growth of Adjusted EBITDA, assuming a progressive normalization of electricity prices
• ❖ In the event of sustained high level of prices:
  • CPI-link on revenues provides protection over time
  • the new upgraded network ensures a sensible reduction in consumption
  • possibility for mitigation actions on other costs

CAPEX

• Maintenance Capex in line with Industrial Plan figure for 2022
• Development capex up vs 2021 to reflect completion of refarming activities and deployment of new services

Commitment to growth

2021FY Results Presentation 18

Q&A session

Contacts

Appendix

Balance sheet

Mln Eur

2) Net funds include employee termination indemnities, provision for risks and deferred taxes

Detailed summary of Income Statement

(€m; %)	4Q20	4Q21	FY20	FY21
Core revenues	56,4	58,2	224,5	229,9
Other revenues and income	0,5	0,0	0,5	0,6
Purchase of consumables	(0,4)	(0,5)	(0,9)	(1,5)
Cost of services	(11,3)	1) (10,6)	(39,8)	1) (38,2)
Personnel costs	(12,7)	1) (13,7)	(46,3)	1) (45,4)
Other costs	(1,0)	(0,8)	(2,9)	(2,8)
Opex	(25,3)	(25,6)	(89,9)	(87,9)
Depreciation, amortization and write-downs	(12,6)	(13,8)	(45,4)	(50,5)
Provisions	(0,3)	(1,0)	(0,3)	(1,0)
Operating profit (EBIT)	18,7	17,8	89,4	91,1
Net financial income (expenses)	(0,4)	(0,1)	(1,1)	(1,2)
Profit before income taxes	18,3	17,7	88,3	89,9
Income taxes	(5,1)	(5,1)	(24,3)	(24,5)
Net Income	13,2	12,6	64,0	65,4
EBITDA	31,6	32,6	135,1	142,6
EBITDA margin	56,0%	56,0%	60,2%	62,0%

Non recurring costs 0,1 (0,4) (1,0) (0,4)

Adjusted EBITDA 31,5 33,0 136,1 142,9

Adjusted EBITDA margin 55,9% 56,6% 60,6% 62,2%

1) As of 4Q2021, some expenses reclassified from personnel costs to service costs (€127k in 2021FY, €35k in 4Q2021)

Summary of Balance Sheet

(€m)	2020FY	2021FY
Non current assets
Tangible assets	200,9	244,5
Rights of use for leasing	32,5	31,5
Intangible assets	15,9	17,2
Financial assets, holdings and other non-current assets	2,1	1,4
Deferred tax assets	2,8	3,0
Total non-current assets	254,2	297,7
Current assets
Inventories	0,9	0,8
Trade receivables	62,6	67,8
Other current receivables and assets	4,2	3,9
Current financial assets	0,7	0,5
Cash and cash equivalents	4,1	17,2
Current tax receivables	0,1	0,1
Total current assets	72,4	90,4
TOTAL ASSETS	326,6	388,0

(€m)	2020FY	2021FY
Shareholders' Equity
Share capital	70,2	70,2
Legal reserves	14,0	14,0
Other reserves	37,1	37,3
Retained earnings	63,5	64,4
Treasury shares	(20,0)	(20,0)
Total shareholders' equity	164,8	165,9
Non-current liabilities
Non-current financial liabilities	15,1	69,0
Non-current leasing liabilities	23,9	21,4
Employee benefits	13,2	12,3
Provisions for risks and charges	16,3	17,2
Total non-current liabilities	68,5	119,9
Current liabilities
Trade payables	45,5	51,7
Other debt and current liabilities	36,0	35,2
Current financial liabilities	0,3	0,2
Current leasing liabilities	11,5	15,1
Current tax payables	0,0	0,1
Total current liabilities	93,3	102,2
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES	326,6	388,0

Summary of Cash Flow Statement

2021FY Results Presentation 25