Generalfinance

Investor Presentation • Oct 11, 2023

1

2023 ITALIAN EXCELLENCES Mid Corporate Conference October 11, 2023

October 2023

Disclaimer

This presentation has been prepared by Generalfinance and contains certain information of a forward-looking nature, projections, targets, and estimates that reflect Generalfinance management's current views related to future events. Forward-looking information not represent historical facts. Such information includes financial projections and estimates as well as related assumptions, information referring to plans, objectives, and expectations regarding future operations, products, and services, and information regarding future financial results. By their very nature, forwardlooking information involves a certain amount of risk, uncertainty and assumptions so that actual results could differ significantly from those expressed or implied in forward-looking information. These forward-looking statements have been developed from scenarios based on a set of economic assumptions related to a given competitive and regulatory environment.

There are a variety of factors that may cause actual results and performance to be materially different from the explicit or implicit contents of any forward-looking statements and thus, such forward-looking statements are not a reliable indicator of futures performance. The Company undertakes no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise expect as may be required by applicable law. The information and opinions contained in this Presentation are provided as at the date hereof and are subject to change without notice. Neither this Presentation nor any part of it nor the fact of its distribution may form the basis of, or be relied on or in connection with, any contract or investment decision.

The information, statements and opinions contained in this Presentation are for information purposes only and do not constitute a public offer under any applicable legislation or an offer to sell or solicitation of an offer to purchase or subscribe for securities or financial instruments or any advise or recommendation with respect to such securities or other financial instruments. None of the securities referred to herein have been, or will be, registered under the U.S. Securities Act of 1933, as amended, or the securities laws of any State or other jurisdiction of the United States or in Australia, Canada or Japan or any jurisdiction where such an offer or solicitation would be unlawful (the "Other Countries"), and there will be no public offer of any such securities in the United States. This Presentation does not constitute or form apart of any offer or solicitation to purchase or subscribe for securities in the United States or the Other Countries.

Pursuant the consolidated law on financial intermediation of 24 February 1998 (article 154-bis, paragraph 2) Ugo Colombo, in his capacity as manager responsible for the preparation of the Company's financial reports declares that the accounting information contained in this Presentation reflects the Generalfinance documented results, financial accounts and accounting records. Neither the Company nor any of its or their respective representatives, directors or employees accept any liability whatsoever in connection with this Presentation or any of its contents or in relation to any loss arising from its use or from any reliance placed upon it.

Agenda

• Generalfinance: Overview
• Factoring Market and Distressed Financing
• Digital, Low Risk Player
• Main 1H 2023 Results
• Focus on Asset Quality and Digital Factoring
• 1H 23 Results: Balance Sheet, P&L, Funding and Capital
• Annex

Generalfinance: Overview

Generalfinance: a long and successful history

Long Standing Experience, Specialisation and Unique Positioning

Generalfinance: Overview

• ✓ Leading independent player in the white space of factoring for Distressed Italian SMEs, unserved by traditional banks, with no comparable companies
• ✓ Digital platform enables unique efficiency, knowledge of clients (competitive advantage) and better risk management
• ✓ Competitive advantage with tailor-made services to customers by using a unique in-house Scoring and Rating system and high sector diversification
• ✓ Excellent risk management due to digital platform data management and managerial proven experience
• ✓ Strong growth opportunities supported by sound capital and excellent funding structure
• ✓ Management with a solid experience in financial services to distressed companies, as well as significant skills in business development

Shareholder base

29th June 2022 FIRST DAY OF TRADING € 38.5 M CAPITAL RAISED¹ € 91.0 M MARKET CAPITALIZATION AT IPO € 20.2 M CAPITAL INCREASE € 65.8 M TOTAL DEMAND IPO main results Shareholders' structure Placement of CAI's stake 4 th October 2023 DAY OF THE PLACEMENT € 15.0 M DEAL VALUE

Factoring Market and Distressed Financing

What is Factoring? (1/2)

What is Factoring? (2/2)

Source: Management

Leader in the high-growth distressed market segment

In the overall fast growing factoring market (turnover in Italy is expected to grow from € 287bn in 2022 up to €294-€303bn in 2023) Generalfinance focuses on distressed sellers (UTP, forborne and past due) with a portfolio of performing debtors (in bonis)

Large Corporate (250€M+)

Notes: (1) range of values estimated in the last Assifact report «ForeFact» 23 n.1

Source: Assifact, Banca d'Italia, Banca IFIS Market Watch, report PWC, company balance sheets and website

Vulnerable companies and new non-bankruptcy procedures

CERVED GROUP SCORE (CGS) NON-BANKRUPTCY PROCEDURES

More than 28% of SMEs are in vulnerability or risk condition An annual average (2017-2021) of 1,389 companies entered nonbankruptcy procedures

Negotiated Business Crisis Settlement

Potential market

The trend of total UTP/Past Due/Forborne, which is the best indicator for estimating Generalfinance's market niche, is estimated with an expected growth-from 101 billion in 2023 to 105 billion in 2025 of the stock

EVOLUTION OF NON-PERFORMING EXPOSURES IN ITALY (€bn)

Notes: 1) Excluding Repo and Current Accounts Source: Assifact, Prometeia, Banca d'Italia, Banca IFIS Market Watch, report PWC, company balance sheets and website

Digital, Low Risk Player

A strategic asset: the proprietary digital platform

An organization oriented to risk control and business

A unique business model, leveraging the factoring features

The peculiarity of Generalfinance's business model is the choice of Seller–Debtor, where clients (Sellers) typically have a low credit rating (turnaround situation) while the Debtors underlying customer loans refer to a high credit rating (normally investment grade)

Notes: 1) Generalfinance data refers to 1H 2023 (LTM); Assifact data refers to March 31,2023; 2) Assifact data net of household debtors.

Value proposition, distinctive features and value chain

Value proposition 1 Distinctive skills

Generalfinance offers its customers (mostly companies under financial stress) rapid and customized interventions for the financing of the working capital and trade receivables, covering the entire supply chain finance

"Revolving" relationship (LIR¹ at 24 months) in a predominantly "notification" mode and, where applicable, "acceptance" of the debt

• o Consolidated expertise throughout the entire process
• o End-to-end in-house valuation process, tailored to customer specifications
• o Strong risk reduction and diversification mechanisms
• o In-house-developed proprietary factoring platform to support business specifications
• o Fast operational processes and capability to provide bridge financing within turnaround processes

3

Generalfinance masters all the crossroads of the value chain

2

• o All operational steps and core activities are carried out internally by Generalfinance's dedicated structures
• o Generalfinance does not relies on external consultants to assess the creditworthiness of sellers and debtors but owns all the skills
• o The process is reinforced by credit insurance policies provided by Allianz Trade insurance company which, during the risk acquisition phase, performs an independent assessment of the assigned debtors, providing Generalfinance a feedback on the results of their assessment

Valuation Framework

Debtor Scoring

Macro score	Indicator	Assessment details
1	BRI	▪ Counterparty summary assessment considering the economic and financial aspects, the history of the company, the shareholders structure, etc.
	CGS	Counterparty summary assessment considering the economic ▪ and financial aspects, the history of the company, the shareholders structure, etc.
Commercial score	Rating Score	▪ Counterparty summary assessment considering the economic and financial aspects, the history of the company, the shareholders structure, etc.
	Delinquency Score	▪ Probability of late payments over the next 12 months
	Failure Score	▪ Company probability of default over the next 12 months
2 Payments score	Paydex	▪ Score on the counterparty's payment performance
	Payline	▪ Score on the counterparty's payment performance
3 Credit	Grade Allianz Trade	▪ Degree of credit insurability
insurability score	DRA	Degree of credit insurability ▪ Coface – in progress ▪
4 Credit insurance	Insurance	▪ Insurance partnership with Allianz Trade to insure up to 100% of the credit cross, starting from amounts above 30k

A Model Difficult-to-Replicate

Generalfinance boasts a portfolio quality, both in terms of Payment Conditions and Payment Delays, better than the rest of the market

Risk reduction in Distressed Factoring

Given that the majority of Generalfinance's turnover is realized towards distressed Sellers, the Company can benefit from a reduction in risk, because of 3 main factors

Lower Credit Risk

• o Effects of insolvency proceedings on financial position (ex. credit write-offs)
• o Recovery and relaunch plan
• o Possible change in the Governance
• o Possible capital injection or new financing
• o Predeductibility (i.e., superpriority) of receivables arising from loans disbursed in execution of the plan and loans disbursed prior to the submission of the composition with creditors plan, respectively, if the conditions provided by the regulations are met

Lower Operating Risk

• o Court approval (arrangement with creditors, restructuring agreement)
• o Supervision by the court commissioner (arrangement with creditors)
• o Presence of high standing Financial Advisors and Legal Counsels
• o Management change

Lower Risk of Clawback Action

• o Financial assistance for the implementation of the agreement / plan / arrangement with creditors with exemptions from clawback actions
• o Authorization for bridge financing (in these cases, the risk of clawback actions is excluded on a de facto basis)
• o Factoring law and related protections (clawback actions regarding collections from assigned debtors)

Main 1H 2023 Results

Turnover witnessing a strong growth story

2023 annual growth rate (22%) above the market average (+3%)

Net Income: high profitability from the operations

Profitability level in line with 2023 Budget

Focus on Asset Quality and Digital Factoring

A low risk model with a best in class asset quality

Assifact NPE Ratio (%) as at June, 30 2023 Cost of Risk has been computed as Credit Risk Adjustments / Annual Disbursed Loans; Gross NPE («Non-Performing Exposure») Ratio has been computed as Gross NPE / Gross Loans to Customers

Default Rate and NPE Ratio constantly improving

Default rate: NPE infow of the year / loans disbursement flow of the year

Company's DSO expressing a very low duration of the portfolio

1H 23 Results: Balance Sheet, P&L, Funding and Capital

Main KPIs behind our business

Income Statement (€m)	2020A	2021A	2022A	CAGR '20-'22	1H22	1H23	YoY%
Margin Interest	4 1	6 2	7 3	2% 33	3 8	3 8	1% 2
Net Commission	13 1	17 7	23 6	34 1%	10 8	12 5	15 0%
Banking Net Income	2 17	23 9	30 9	33 9%	14 6	16 3	7% 11
Net value adjustments / write-backs for credit risk	(0 7)	(0 2)	(1 2)	30 0%	(0 2)	(0 3)	31 4%
Operating Costs	(8 4)	(9 8)	(13 2)	25 4%	(7 0)	(6 4)	(8 6%)
Net Profit	5 3	9 5	10 9	42 9%	4 9	6 7	35 4%
(€m)	2020A	2021A	2022A	CAGR '20-'22	1H22	1H23	YoY%
Turnover	760 7	402 9 1 ,	2 009 4 ,	62 5%	932 6	140 1 1 ,	22 2%
Allocated Amount	562 0	1 118 5 ,	1 674 0 ,	6% 72	776 8	931 7	9% 19
LTV	73 9%	79 7%	83 3%	6 2%	83 3%	81 7%	9% -1
Net Banking / (%) Income Average Loan	2% 11	9 6%	8 7%	(11 5%)	8 6%	8 2%	(4 0%)
Margin Banking (%) Interest / Net Income	8% 23	0% 26	5% 23	(0 5%)	8% 25	6% 23	(8 6%)
Cost Income Ratio	48 7%	40 9%	42 7%	(6 4%)	47 7%	39 1%	(18 2%)
(%) ROE	9% 30	0% 42	7% 23	(12 4%)	6% 21	1% 26	6% 20
Balance Sheet (€m)	2020A	2021A	2022A	CAGR '20-'22	1H22	1H23	YoY%
Cash Cash Equivalents &	24 2	33 5	43 7	34 3%	32 3	48 0	48 7%
Financial Assets	176 5	321 0	385 4	47 8%	361 7	408 7	13 0%
Other Assets	9 5	10 8	14 7	24 8%	13 2	13 3	0 3%
Total Assets	210 2	365 3	443 8	45 3%	407 2	470 0	4% 15
Financial Liabilities	175 4	314 6	368 4	9% 44	332 5	387 7	6% 16
Other Liabilities	12 2	18 7	18 6	23 1%	24 0	24 2	0 7%
Liabilities Total	187 6	333 3	387 0	6% 43	356 5	411 9	5% 15
Shareholder's Equity	22 6	32 0	56 8	58 6%	50 7	58 1	14 5%

A very simple balance sheet with a strong capital position…

…coupled with a robust funding and liquidity position

Net interest Income, «hedged» against interest rate rises

▪ Around 99% of the factoring contracts have been renegotiated, changing the calculated interest rate from fixed to variable (based on Euribor 3M)

Notes: (1) Calculated as interest expense / average financial liabilities (current and previous year); (2) Spread: average interest rate on seller – average cost of funding (3) Interest income + Delayed payment Interest / average loans (current and previous year); (4) Calculated as Net Interest income/ average loans (current and previous year)

Net commission income, the primary source of profitability

▪ Net Commission Income ~76% of the Net Banking Income

• Commission Income/Turnover substantially stable YoY, even with the different mix of the portfolio (Corporate Sellers vs Retail Sellers)
• Stable commission expense rate thank to optimization of insurance costs and banking fees

Cost / Income reflecting the efficiency of the operating machine

Note: (1) other net revenues and risk charges; (2) Operating Costs / Net Banking Income.

Operating costs 1H22 Adjusted (net of costs related to IPO): 5.8 €mln

Cost income ratio 1H2022 Adjusted (net of costs related to IPO): 39.7%

Annex

Income Statement

Income Statement (€m)	1H22	1H23	YoY%
Interest income and similar income	6.4	12.1	90.4%
Interest expense and similar charges	(2.6)	(8.3)	218.3%
INTEREST MARGIN	3.8	3.8	2.1%
Fee and commission income	12.8	14.6	13.2%
Fee and commission expense	(2.0)	(2.1)	4.0%
NET FEE AND COMMISSION INCOME	10.8	12.5	15.0%
Dividends and similar income	0.0	0.0	(100.0%)
Net profi (loss) from trading	(0.0)	0.0	(294.1%)
Net results of other financial a/l measured at fv	0.0	0.0	(100.0%)
NET INTEREST AND OTHER BANKING INCOME	14.6	16.3	11.7%
Net value adjustments / write-backs for credit risk	(0.2)	(0.3)	31.4%
a) Financial assets measured at amortised cost	(0.2)	(0.3)	31.4%
NET PROFIT (LOSS) FROM FINANCIAL MANAGEMENT	14.4	16.0	11.4%
Administrative expenses	(6.4)	(6.9)	7.4%
a) Personnel expenses	(3.0)	(3.7)	23.7%
b) Other administrative expenses	(3.4)	(3.2)	(7.2%)
Net provision for risks and charges	(0.0)	(0.0)	(13.1%)
b) Other net provisions	(0.0)	(0.0)	(13.1%)
Net value adjustments / write-backs on pppe	(0.4)	(0.4)	9.5%
Net value adjustments / write-backs on int. Ass.	(0.1)	(0.2)	28.1%
Other operating income and expenses	(0.1)	1.1	(2246.0%)
OPERATING COSTS	(7.0)	(6.4)	(8.6%)
PRE-TAX PROFIT (LOSS) FROM CURRENT OPERATIONS	7.4	9.7	30.2%
Income tax for the year on current operations	(2.5)	(3.0)	19.7%
PROFIT (LOSS) FOR THE YEAR	4.9	6.7	35.4%

Balance Sheet

Balance Sheet (€m)	2022A	1H23	Var% YTD
Cash and cash equivalents	43.7	48.0	9.7%
Financial assets measured at fair value through p/l	0.0	0.0	14.7%
Financial assets measured at amortised cost	385.4	408.7	6.0%
Equity investments	0.0	0.0	-
Property, Plan and Equipment (PPE)	4.9	5.2	6.2%
Intangible assets	2.0	2.3	10.6%
Tax assets	4.6	3.2	(30.6%)
a) current	4.1	2.7	(35.3%)
b) deferred	0.5	0.5	15.1%
Other assets	3.2	2.6	(16.2%)
TOTAL ASSETS	443.8	470.0	5.9%
Financial liabilities measured at amortised cost	368.4	387.7	5.2%
a) payables	331.2	345.2	4.2%
b) outstanding securities	37.2	42.5	14.3%
Tax liabilities	4.9	3.1	(37.0%)
Other liabilities	11.6	18.6	59.9%
Severance pay	1.3	1.4	2.6%
Provision for risk and charges	0.8	1.2	42.1%
Share capital	4.2	4.2	0.0%
Share premium reserve	25.4	25.4	0.0%
Reserves	16.2	21.6	33.7%
Valuation reserves	0.1	0.1	47.1%
Profit (loss) for the year	10.9	6.7	(38.5%)
TOTAL LIABILITIES AND SHAREHOLDERS'S EQUITY	443.8	470.0	5.9%

Business Plan 2022-2024 KPIs

Line (€ bn) Top	2021A	2022A ADJ	2024E	CAGR '21-'24
Turnover	1 4 ,	2 0 ,	3 4 ,	34%
Allocated Amount	1 1 ,	1 7 ,	2 8 ,	36%
(2) LTV	80%	83%	83%	n.a.

(€ mn) P&L	2021A	2022A ADJ	2024E	CAGR '21-'24
Interest Margin	6 2 ,	7 3 ,	13 7 ,	30%
Net Commision	17 7 ,	23 6 ,	35 7 ,	26%
Banking Net Income	23 9 ,	30 9 ,	49 3 ,	27%
Operating costs	(9 8) ,	(11 6) ,	(14 7) ,	14%
Net Profit	9 5 ,	12 1 ,	21 5 ,	31%

BS (€ mn)	2021A	2022A ADJ	2024E	CAGR '21-'24
Cash Cash Equivalents &	33 5 ,	43 7 ,	54 7 ,	18%
Financial Assets	321 0 ,	385 4 ,	697 9 ,	30%
Other Assets	10 8 ,	14 6 ,	13 8 ,	9%
Total Assets	365 3 ,	443 8 ,	766 5 ,	28%
Financial Liabilities	314 6 ,	368 4 ,	648 5 ,	27%
Other Liabilities	18 7 ,	17 4 ,	36 7 ,	25%
Shareholder's Equity	32 0 ,	58 0 ,	81 3 ,	36%
Total Liabilities	365 3 ,	443 8 ,	766 5 ,	28%

(%) KPI	2021A	2022A ADJ	2024E	CAGR '21-'24
Net Banking Income / Average Loans	9 6% ,	8 7% ,	8 0% ,	n.a.
Interest Margin / Net Banking Income	26 0% ,	23 5% ,	27 8% ,	n.a.
Ratio Cost Income	9% 40 ,	7% 37 ,	7% 29 ,	n.a.
ROE	42 0% ,	26 3% ,	36 0% ,	n.a.
CET1 Ratio	9 4% ,	14 6% ,	2% 11 ,	n.a.
Total Capital Ratio	13 7% ,	6% 17 ,	13 3% ,	n.a.

Note: 2022A ADJ means that the values are neutralized from IPO costs € 1,6 mn (2) LTV: Loan to Value

Turnover breakdown vs system average 1/2

81.2%

Pro solvendo Pro soluto

Italy RoW

79.8%

Italy RoW

Pro solvendo Pro soluto

Turnover breakdown vs system average 2/2

Generalfinance's Turnover data refers to June 30, 2023 Assifact's Turnover data refers to March 31, 2023 1) Household debtors have not been included

Top line components

SIMPLE AND TRANSPARENT P&L PAIRED WITH ALMOST NO VOLATILITY OF FAIR VALUE / CREDIT ADJUSTMENT

Revenues' generation – example

PRO SOLVENDO TRANSACTION		Formula	P&L Accounting
Invoice's nominal value	100,000	a
Advance rate	80.00%	b
Gross disbursed amount	80,000	c = a x b
Maturity of disbursed amount (days)	88	e
Contractual interest rate	4.00%	f
Interest revenues	789.04	g = ( c x f x (e+2) ) / 365	Prepayment
DSO	90	h
Monthly commission rate	0.50%	i
Commission revenues	1500.00	l = a x i x (h/30)	Prepayment
Total revenues	2289.04	m = g + l	Prepayment
Net disbursed amount	77,710.96	n = c - m
Delay in payment (days)	5	o
Delay in payment interest rate	5.00%	p
Delay in payment commission rate	0.50%	q
Delay in payment interest revenues	54.79	r = ( c x p x o) / 365	Cash basis
Delay in payment commission revenues	83.33	s = a x q x (o/30)	Cash basis
Delay in payment total revenues	138.13	t = r + s	Cash basis
Non-advance amount	20,000	u = a - c
Net settlement	19,861.87	v = u - t

Benefits of pro-solvendo lending contract

The offsetting mechanism is a specific technicality of the Factoring Agreement, which is elaborated consistently with the Assifact standard

ARTICLE 28 OF GENERALFINANCE FACTORING AGREEMENT

"The Factor will be entitled to retain sums and set off the debts (of every kind) due by the Factor to the Seller against the Receivables (of every kind) due from the Seller to the Factor, including the Receivables due from the Seller to third parties and assigned to/guaranteed by the Factor.

Should the Seller default on any of its payment obligations, the Factor will be able to treat its Receivables as liquid and payable, even if not already fallen due. Offsets by the Seller require the prior written consent of the Factor".

A PRACTICAL EXAMPLE:

Seller A

ID Borrower	Nominal Value (A)	LTV (B)	Disbursement (C) = (A x B)	Unpaid	Amount Collected (D)	Amounts not advanced to be settled (D - C)
1	100.000,00	80%	80.000,00	Yes	-	-
2	100.000,00	80%	80.000,00	No	100.000,00	20.000,00
3	100.000,00	80%	80.000,00	No	100.000,00	20.000,00
4	100.000,00	80%	80.000,00	No	100.000,00	20.000,00
5	100.000,00	80%	80.000,00	No	100.000,00	20.000,00
6	100.000,00	80%	80.000,00	No	100.000,00	20.000,00
7	100.000,00	80%	80.000,00	No	100.000,00	20.000,00
8	100.000,00	80%	80.000,00	No	100.000,00	20.000,00
9	100.000,00	80%	80.000,00	No	100.000,00	20.000,00
10	100.000,00	80%	80.000,00	No	100.000,00	20.000,00
	1.000.000,00		800.000,00		900.000,00	180.000,00
			Debts of the Factor Unpaid debts			180.000,00
			compensated			80.000,00
			Netting to be liquidated			100.000,00

In FY 2021, Generalfinance paid an average advance equal to 80% of Turnover. With regard to the prosolvendo factoring, Generalfinance is entitled to set off amounts owed by the Sellers to it against amounts owed by Generalfinance to the Sellers based on specific clauses included in the factoring agreement.

The Company has a high Debtor/Seller ratio equal to 58, growing steadily over the last 3 financial years, against an average of the Italian factoring market calculated excluding private assigned Debtors - equal to 10¹ , which expands the possibilities of offsetting between receivables and debit items against the Sellers as part of pro-solvendo transactions.

Capital Stack – A capital light lending business