Generalfinance

Investor Presentation • Mar 23, 2023

STAR Conference 2023

1

GENERALFINANCE

March 23, 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.

Generalfinance: a long and successful history

Long Standing Experience, Specialisation and Unique Positioning

Agenda

• Generalfinance Overview and Main 2022 Results
• Focus on Asset Quality, Organization and Digital Factoring
• 2022 Results: Balance Sheet, P&L, Funding and Capital
• Closing Remarks
• 2022-2024 Business Plan: executive summary

Generalfinance: 2022 Overview and Main results

Turnover witnessing a strong growth story

2022 annual growth rate (43%) significantly above the market average (14,5%)

Net Income Adjusted: high profitability from the operations

2022 annual growth rate (27%) on adjusted basis

A low risk model with a best in class asset quality

Generalfinance has a lower cost of risk and a non-performing exposure compared to the market thanks to its unique and effective business model enabling a constant mitigation of credit risk

* Assifact NPE Ratio (%) as at 30.09.2022 and 31.12.2021 1) Cost of Risk has been computed as Credit Risk Adjustments / Annual Disbursed Loans; Cost of Risk Adj calculated net of Insurance indemnities 2) Gross NPE («Non-Performing Exposure») Ratio has been computed as Gross NPE / Gross Loans to Customers

Focus on Asset Quality, Organization and Digital Factoring

Default Rate and NPE Ratio constantly improving

DEFAULT RATE AND GROSS NPE RATIO (%)

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

A business model with low duration for a conservative risk profile

CREDIT RESIDUAL LIFE AND DSO

Collection performance: a strategic delivery to our Customers

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

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 (investment grade) S&P Fitch

Notes: 1) Generalfinance data refers to 2022; Assifact data refers to 3Q 2022; 2) Assifact data net of household debtors.

A new organization oriented to risk control and business

Organizational chart as at 31th december 2022 New / changed department

A strategic asset: the proprietary digital platform

Factoring Operations: comprehensive evaluation of Sellers

A robust and complete Scoring Model to evaluate Debtors

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	Paydex	▪ Score on the counterparty's payment performance
score	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

2022 Results: Balance Sheet, P&L, Funding and Capital

Income statement 2022 – adjustements

Statement (€m) Income	2022A	Adj	Adj 2022
Interest income and similar income	14 0 ,	0 0 ,	14 0 ,
similar Interest expense and charges	(6 7) ,	0 0 ,	(6 7) ,
INTEREST MARGIN	7 3 ,	0 0 ,	7 3 ,
and commission income Fee	27 4 ,	0 0 ,	27 4 ,
Fee and commission expense	(3 8) ,	0 0 ,	(3 8) ,
COMMISSION INCOME NET FEE AND	23 6 ,	0 0 ,	23 6 ,
Dividends and similar income	0 0 ,	0 0 ,	0 0 ,
profi (loss) from trading Net	(0 0) ,	0 0 ,	(0 0) ,
Net results of other financial assets and liabilities measured at fair value through profit or loss	0 0 ,	0 0 ,	0 0 ,
INTEREST OTHER BANKING INCOME NET AND	30 9 ,	0 0 ,	30 9 ,
adjustments write-backs for credit risk Net value /	(1 2) ,	0 0 ,	(1 2) ,
a) Financial assets measured at amortised cost	(1 2) ,	0 0 ,	(1 2) ,
(LOSS) NET PROFIT FROM FINANCIAL MANAGEMENT	29 7 ,	0 0 ,	29 7 ,
Administrative expenses	(13 0) ,	6 1 ,	(11 5) ,
a) Personnel expenses	(6 7) ,	0 2 ,	(6 5) ,
b) Other administrative expenses	(6 3) ,	1 3 ,	(5 0) ,
provision for risks Net and charges	(0 0) ,	0 0 ,	(0 0) ,
b) Other net provisions	(0 0) ,	0 0 ,	(0 0) ,
value adjustments / write-backs , plan and equipment Net on property	(0 7) ,	0 0 ,	(0 7) ,
Net value adjustments / write-backs on intangible assets	(0 3) ,	0 0 ,	(0 3) ,
Other operating income and expenses	0 1 ,	0 0 ,	0 1 ,
OPERATING COSTS	(13 2) ,	(1 6) ,	(11 6) ,
PROFIT (LOSS) FROM CURRENT OPERATIONS PRE-TAX	16 5 ,	(1 6) ,	18 0 ,
for operations Income tax the year on current	(5 6) ,	0 4 ,	(6 0) ,
PROFIT (LOSS) FOR THE YEAR	10 9 ,	(1 2) ,	12 1 ,

Extraordinary costs booked in 2022, related to the IPO Process, ~ 1,6 € M

Adjusted Net income 12,1 € M, +27% YoY

Note: the normalized tax rate used for the purposes of the adjustment excludes the effects related to non-deductible extraordinary expenses

Main KPIs behind our business – adjusted figures

Income Statement (€m)	2020A	2021A	2022A	YoY	CAGR '20-'22
Interest Margin	4,1	6,2	7,3	17,7%	33,4%
Net Commission	13,1	17,7	23,6	33,3%	34,2%
Net Banking Income	17,2	23,9	30,9	29,3%	34,0%
Operating Costs	(8,4)	(9,8)	(11,6)	18,4%	17,5%
Net Profit	5,3	9,5	12,1	27,4%	51,1%
(€m)	2020A	2021A	2022A	YoY	CAGR '20-'22
Turnover	761	1.403	2.009	43,2%	62,5%
Allocated Amount	562	1.118	1.674	49,7%	72,6%
LTV	74%	80%	83%	4,5%	6,2%
Net Banking Income / Average Loan (%)	11,2%	9,6%	8,7%	(9,0%)	(11,7%)
Interest Margin / Net Banking Income (%)	23,8%	26,0%	23,5%	(9,4%)	(0,5%)
Cost Income Ratio	48,7%	40,9%	37,7%	(7,9%)	(12,1%)
ROE (%)	30,9%	42,0%	26,3%	(37,5%)	(7,8%)
Balance Sheet (€m)	2020A	2021A	2022A	YoY	CAGR '20-'22
Cash & Cash Equivalents	24	34	44	30,4%	34,4%
Financial Assets	177	321	385	20,1%	47,8%
Other Assets	10	11	15	35,2%	24,0%
Total Assets	210	365	444	21,5%	45,3%
Financial Liabilities	175	315	368	17,1%	44,9%
Other Liabilities	12	19	19	(1,1%)	23,1%
Total Liabilities	188	333	387	16,1%	43,6%
Shareholder's Equity	23	32	57	77,5%	58,5%

A very simple balance sheet with a strong capital position…

2022A LIABILITIES BREAKDOWN

⁵⁷⁴⁴⁴

Total Liabilities and Equity

Equity

* RWA Density: RWA / Total Asset

Note: CET1 Ratio and Total Capital Ratio calculated taking into account total dividends to be distributed in 2023 (payout 50% of net profit)

…coupled with a robust funding and liquidity position

Note: «Securitization» includes only senior financing and exlcuding around 53 €M of Mezzanine Notes

Net interest Income, «hedged» against interest rate rises

Notes: (1) Interest income + Delayed payment Interest over average loans (current and previous year); (2) Calculated as interest expense / average financial liabilities (current and previous year); (3) Calculated as Net Interest income/ average loans (current and previous year)

Net commission income, the primary source of profitability

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 on Adjusted basis

2022 FY Results: Closing Remarks

Dividend Policy

SHARE PERFORMANCE

Distribution of Profit (Euro) Net	2022A
Net profit	10 885 387
Number of shares	12 635 066
Dividend share per	0 43 ,
dividends Total	5 433 078
Retained earnings	452 309 5
Payout ratio	50%
Dividend Yield	6 0% ,

Closing Remarks

▪ 2022: a year of great achievements:

• ✓ IPO of the Company
• ✓ Reinforcement of the financial profile (Total Capital Ratio up to 17.6%)
• ✓ Strong growth of the business (turnover +43% YoY)
• ✓ Very good asset quality (NPE Ratio 0.35%)
• ✓ Stable and robust funding (Counterbalancing > 500 €M)
• 2023 Outlook supporting Generalfinance's business:
• ✓ Geopolitical and macroeconomic tensions affecting financial position of Italian SMEs
• ✓ Tightening of credit standards from Italian banks
• ✓ Exit from state aid supports for SMEs financing via MCC and SACE
• ✓ Solid pipeline of new Sellers in the first part of the year
• ✓ 2023 Net Income guidance: 16-17 €m
• Potential add-on coming from the expansion of the Company abroad (Greece and Spain), depending on the analysis already started to be finalized in the coming quarters

2022-2024 Business Plan: executive summary

An attractive market with key growth drivers

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)

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

A potential wide market for Generalfinance

▪ The 2022 recession has affected the trend of the UTP/Past Due/Forborne stock, which is the best proxy to estimate the Generalfinance's niche market, with an expected growth from € 107bn in 2022 to € 124bn in 2024E

Notes: 1) Excluding Repo and Current Accounts; (2) UTP transferred and not transferred Source: Assifact, Prometeia, Banca d'Italia, Banca IFIS Market Watch, report PWC, company balance sheets and website

Potential outstanding – Pre Money Potential turnover – Pre Money

32

Business Plan - main targets

Business Plan 2022-2024 KPIs

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

P&L (€ mn)	2021A	2022A ADJ	2024E	CAGR '21-'24
Margin Interest	6 2 ,	3 7 ,	13 7 ,	30%
Commision Net	17 7 ,	23 6 ,	35 7 ,	26%
Net Banking Income	23 9 ,	30 9 ,	49 3 ,	27%
Operating costs	(9 8) ,	(11 6) ,	(14 7) ,	14%
Profit Net	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%
Liabilities Total	365 3 ,	443 8 ,	766 5 ,	28%

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

What is Factoring? (1/2)

What is Factoring? (2/2)

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			180.000,00
			Unpaid debts 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.

Turnover breakdown vs system average 1/2

Turnover breakdown vs system average 2/2

IPO and updated shareholder base

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	1.500,00	l = a x i x (h/30)	Prepayment
Total revenues	2.289,04	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

Capital Stack – A capital light lending business

Overall capital requirements: EU average vs Generalfinance

STAR Conference 2023

45

GENERALFINANCE

March 23, 2023