Esprinet

Earnings Release • Mar 12, 2024

Informazione Regolamentata n. 0533-5-2024		Data/Ora Inizio Diffusione 12 Marzo 2024 19:00:04	Euronext Star Milan
Societa'	:	ESPRINET
Identificativo Informazione Regolamentata	:	187261
Utenza - Referente	:	ESPRINETN05 - Perfetti
Tipologia	:	1.1; REGEM; 3.1; 2.2
Data/Ora Ricezione	:	12 Marzo 2024 19:00:04
Data/Ora Inizio Diffusione	:	12 Marzo 2024 19:00:04
Oggetto	:	IN AN ADVERSE ENVIRONMENT, THE GROUP HAS IMPROVED ITS GROSS PROFIT MARGIN, ALSO BY FOCUSING ON HIGH MARGIN SEGMENTS SUCH AS SOLUTIONS & SERVICES

Testo del comunicato

Vedi allegato

Press release pursuant to CONSOB Regulation No. 11971/99

IN AN ADVERSE MARKET ENVIRONMENT, THE GROUP HAS BEEN ABLE TO SIGNIFICANTLY IMPROVE ITS GROSS PROFIT MARGIN, ALSO BY FOCUSING ON HIGH MARGIN SEGMENTS SUCH AS SOLUTIONS & SERVICES

PROPOSAL NOT TO DISTRIBUTE THE DIVIDEND ORDINARY SHAREHOLDERS' MEETING CONVENED

• SALES FROM CONTRACTS WITH CUSTOMERS: Euro 3,985.2 million, -15% (2022: Euro 4,684.2 million)
• EBITDA ADJUSTED: Euro 64.1 million, -29% (2022: Euro 90.7 million)
• EBIT ADJUSTED: Euro 44.1 million, -40% (2022: Euro 73.4 million)
• NET INCOME ADJUSTED¹ : Euro 24.2 million, -51% (2022: Euro 49.3 million)

• ROCE: 6.9% (2022: 13.3%)

• CASH CONVERSION CYCLE: 28 days (2022: 26 days)

• NFP: positive by Euro 15.5 million (2022: negative by Euro 83.0 million)

Vimercate (Monza Brianza), 12 March 2024 – The Board of Directors of ESPRINET, a Group leader in Southern Europe in advisory services, sale and rental of technological products and IT security, which met under the chairmanship of Maurizio Rota, approved the Consolidated financial statements and the Draft separate financial statements as at 31 December 2023, drafted in compliance with the international accounting standards (IFRS).

Alessandro Cattani, Chief Executive Officer of ESPRINET: "Although the fiscal year 2023 proved to be particularly challenging for the ICT sector, especially in the Consumer segment, the Group was able to improve the Gross Profit Margin, which rose from 5.22% in 2022 to 5.54% in 2023. This is due to our ability to meet sensitive demand in high-margin segments such as Solutions & Services. The Net Financial Position also improved significantly compared to the 2022 fiscal year and 30 September 2023, closing positive by Euro 15.5 million, thanks to the containment of the level of net invested working capital.

Despite the still uncertain context, sector analysts believe that the market maintains interesting growth prospects in the medium and long term. Precisely for this reason, the Esprinet Group is adjusting its strategy preparing to meet the challenges posed by the new market scenario and from the recovery expected in 2024."

MAIN CONSOLIDATED RESULTS AS AT 31 DECEMBER 2023

In 2023, Sales from contracts with customers amounted to Euro 3,985.2 million, a decrease of 15% compared to the result of the previous year (Euro 4,684.2 million). The last quarter recorded sales of Euro 1,240.2 million, down by 15% compared to the same period of the previous year (Euro 1,466.5 million).

¹ Calculated gross of non-recurring expenses relating to: costs incurred by the parent company Esprinet S.p.A. for the execution of the settlement agreement with the Italian Revenue Agency aimed at reaching an out-of-court settlement of VAT disputes for the tax years 2013-2017 amounting to Euro 33.3 million, an extraordinary provision on a credit position in the amount of Euro 2.6 million and to the program for the reorganization of the management structure launched at the end of 2023 and aimed at structurally reducing the Group's operating costs in the amount of Euro 1.1 million.

(€/million)	2023	2022	% Var.
Italy
Spain
Portugal
Other EU countries
Other non-EU countries
Sales from contracts with customers

(€/million)	Q4 2023	Q4 2022	% Var.
Italy
Spain
Portugal
Other EU countries
Other non-EU countries
Sales from contracts with customers

Italy, with sales of Euro 2,467.8 million, decreased by 10% compared to 2022, in a distribution market which, according to the UK research company Context with a turnover of Euro 9.2 billion fell by 4%. In Spain, the Group sales were Euro 1,367.6 million, -22% compared to 2022, in a market slowing down by 2% to Euro 7.1 billion in sales. Portugal posted Euro 106.9 million, -15% compared to 2022, while the total distribution market of around Euro 1.7 billion marks -5%.

	Sales from contracts with customers				EBITDA Adjusted				EBITDA Adjusted %
(€/million)	2023	2022	Var.	% Var.	2023	2022		Var. % Var.	2023	2022	Var.
Screens	2,128.2	2,722.2	-594.1	-22%	19.2	30.9	-11.7	-38%	0.90%	1.14%	-0.23%
Devices	896.1	1,003.5	-107.4	-11%	13.9	22.9	-9.0	-39%	1.55%	2.28%	-0.73%
Own Brands	40.7	58.4	-17.7	-30%	-3.8	-1.4	-2.4	>100%	-9.34%	-2.40%	-6.94%
Esprinet total	3,065.0	3,784.1	-719.2	-19%	29.3	52.4	-23.1	-44%	0.96%	1.38%	-0.43%
Solutions	907.0	882.8	24.2	3%	29.6	31.9	-2.3	-7%	3.26%	3.61%	-0.35%
Services	13.2	17.3	-4.1	-24%	5.2	6.4	-1.2	-19%	39.39%	36.99%	2.40%
V-Valley total	920.2	900.1	20.1	2%	34.8	38.3	-3.5	-9%	3.78%	4.26%	-0.47%
Total	3,985.2	4,684.2	-699.1	-15%	64.1	90.7	-26.6	-29%	1.61%	1.94%	-0.33%

	Sales from contracts with customers				EBITDA Adjusted				EBITDA Adjusted %
	Q4	Q4		% Var.	Q4	Q4			Q4	Q4
(€/million)	2023	2022	Var.		2023	2022		Var. % Var.	2023	2022	Var.
Screens	648.1	826.6	-178.6	-22%	10.1	14.0	-3.9	-28%	1.56%	1.69%	-0.14%
Devices	278.9	310.5	-31.6	-10%	6.1	6.5	-0.4	-6%	2.19%	2.09%	0.09%
Own Brands	11.1	16.2	-5.2	-32%	-0.8	-0.1	-0.7	>100%	-7.24%	-0.62%	-6.62%
Esprinet total	938.0	1,153.3	-215.3	-19%	15.4	20.4	-5.0	-25%	1.64%	1.77%	-0.13%
Solutions	296.6	306.3	-9.7	-3%	10.9	14.2	-3.3	-23%	3.67%	4.64%	-0.96%
Services	5.6	6.9	-1.3	-19%	1.2	1.7	-0.5	-29%	21.43%	24.64%	-3.21%
V-Valley total	302.2	313.2	-11.0	-4%	12.1	15.9	-3.8	-24%	4.00%	5.08%	-1.07%
Total	1,240.2	1,466.5	-226.3	-15%	27.5	36.3	-8.8	-24%	2.22%	2.48%	-0.26%

A glance at the performance of the business lines in which the Group operates shows that, according to the segmentation into "five pillars", in 2023 Screens (PCs, Tablets and Smartphones) reported a decrease of 22%, while the market according to Context data decreased by 7%.

The Devices segment also showed a slowdown in 2023 (-11%), almost in line with market trend (- 11%).

The Solutions and Services segments together recorded an increase of 2%, in a market, which, again according to the measurement of the UK research company Context, reported an increase of 7%. Sales of Solutions and Servicesrose to Euro 920.2 million compared to Euro 900.1 million in

2022 and, consistently with the Group's strategy of focusing on the high profit margin business lines, their incidence on total sales rose to 23% (19% in 2022 and 16% in 2021). The Solutions are confirmed as the business line that generates the most adjusted EBITDA² in absolute value.

(€/million)	2023	2022	% Var.
Retailer, E-tailer (Consumer Segment)
IT Reseller (Business Segment)
Reconciliation adjustments
Sales from contracts with customers

(€/million)	Q4 2023	Q4 2022	% Var.
Retailer, E-tailer (Consumer Segment)
IT Reseller (Business Segment)
Reconciliation adjustments
Sales from contracts with customers

Lastly, looking at the customer segments, in 2023, the southern European market recorded a growth of 2% in the Business Segment (IT Reseller), and a decline of 12% in the Consumer Segment (Retailer, E-tailer), worsening further with respect to the close of September 2023 (-11%). Group sales showed the following trends compared to the previous year: Business Segment with Euro 2,832.1 million (-7%) and Consumer Segmentwith Euro 1,342.7 million (-27%).

The weight of sales to IT Resellers in 2023 rose to 68% (62% in 2022 and 55% in 2021) in the previous year, gradually reducing the weight of the Consumer Segment, which is subject to greater discount pressures.

Gross Profit amounted to Euro 220.8 million, -10% compared to the first half of 2022 (Euro 244.3 million). The effect of the increase in the percentage margin (5.54% in the 2023 period, compared to 5.22% in the previous year), a result of the greater incidence of high profit-margin product categories that, in line with the Group's strategy, accounted for 47% of sales (42% in 2022), and did not manage to offset the drop in sales. This increase is more significant if we consider the impact of the finance costs associated with the non-recourse receivable assignment programs, more than doubled following the increase in interest rates decided by the European Central Bank.

EBITDA adjusted calculated before non-recurring costs, was Euro 64.1 million, down 29% from Euro 90.7 million in 2022³ . Non-recurring expenses relate to the costs incurred by the parent company Esprinet S.p.A. for the execution of the settlement agreement with the Italian Revenue Agency aimed at reaching an out-of-court settlement of VAT disputes for the tax years 2013-2017⁴ ; they also relate to an extraordinary provision on a credit position and to the program for the reorganization of the management structure launched at the end of 2023 and aimed at structurally reducing the Group's operating costs of Euro 1.1 million.

The incidence on sales was 1.61%, compared to 1.94% in 2022, also due to the increase in the weight of operating expenses (from 3.28% in 2022 to 3.93% in 2023) mainly as a result of the acquisitions of Sifar Group S.r.l. in Italy and Lidera Network S.L. in Spain concluded in August 2023.

² The costs attributed to each pillar are direct sales and marketing costs, and certain categories of general and administrative expenses directly attributable to each business line (e.g. credit insurance costs, inventory costs); the remaining G&A costs are distributed in proportion to the weight of the business line on total sales. The results are not audited.

³ Non-recurring expenses of Euro 2.8 million in 2022 relate to costs incurred by the parent company Esprinet S.p.A. in relation to the voluntary Public Tender Offer for all of the ordinary shares of the Italian company Cellularline S.p.A..

⁴ For a value of Euro 26.4 million, in addition to Euro 6.9 million reported under financial charges as better detailed in the half-yearly report.

EBIT adjusted, gross of non-recurring charges of Euro 30.1 million as mentioned above, was Euro 44.1 million, down 40% from € 73.4 million in 2022. As a percentage of sales, it increased from 1.57% in 2022 to 1.11% in 2023.

EBIT was Euro 14.0 million, down 80% from Euro 70.7 million in 2022.

Profit before income taxes adjusted amounted to Euro 31.9 million, compared to Euro 65.6 million in 2022 (-51%). This result is affected by the higher financial costs due to the increase in interest rates ordered by the European Central Bank, although partially offset by a more favorable dynamics of the Euro/US Dollar exchange rate.

Net income adjusted was Euro 24.2 million, compared to Euro 49.3 million in 2022.

Net income was Euro -11.9 million, compared to Euro 47.3 million in 2022.

Net earnings per ordinary share amounted to Euro -0.24, compared to Euro 0.96 in 2022 and takes into account the overall impact of Euro 36.1 million of non-recurring expenses, including in particular Euro 33.3 million supported by the parent company Esprinet S.p.A. in relation to the blanket agreement reached with the Revenue Agency aimed at settling out of court the disputes raised regarding VAT for the 2013-2017 tax periods.

The Cash Conversion Cycle⁵ closed at 28 days (+2 days compared to Q4 2022 and -2 days compared to Q3 of 2023). In particular, the following trends were recorded:

• days sales of inventory (DSI): -6 days vs Q4 22 (-1 day vs Q3 23),
• days sales outstanding (DSO): +11 days vs Q4 22 (+2 days vs Q3 23),
• days payable outstanding (DPO): +3 days vs Q4 22 (+3 days vs Q3 23).

The Net Financial Position was positive by Euro 15.5 million, an improvement over both 30 September 2023 (negative by Euro 260.6 million) and 31 December 2022 (negative by Euro 83.0 million). The change compared to 30 September 2023 is attributable to the measures adopted to contain the level of net working capital and the usual lower absorption of net working capital at the peak of the business seasonality.

The value of the exact net financial position as at 31 December is influenced by technical factors like the seasonality of the business, the trend in 'non-recourse' factoring of trade receivables (factoring, confirming and securitization) and the trend in the behavioral models of customers and suppliers in the different periods of the year. Therefore, it is not representative of the average levels of net financial indebtedness noted during the period. The aforementioned programs for the factoring and securitization of trade receivables, which result in complete transfer of risks and benefits to assignees and therefore allow their derecognition from statement of financial position assets, determine an overall effect on the level of consolidated net financial debt as at 31 December 2023 amounting to Euro 393.1 million (Euro 540.2 million as at 31 December 2022 and Euro 244.0 million as at 30 September 2023)

Net equity totaled Euro 367.4 million compared to Euro 409.2 million as at 31 December 2022.

ROCE was 6.9%, compared to 13.3% in 2022. The main changes related to this trend can be summarized as follows:

• the "NOPAT - Net Operating Profit Less Adjusted Taxes" decreased when compared to 2022;

⁵ Equal to the average number of days of turnover of Operating Net Working Capital of the last 4 quarters, calculated as the sum of trade receivables, inventories and trade payables.

• the Average Net Invested Capital, measured before the effects of the introduction of IFRS 16, increased (+11%) due to the increase in the Average Net Working Capital.

(€/million)	2023	2022
6 Operating profit (EBIT Adj.)
NOPAT7
Average Net Invested Capital8
ROCE9

MAIN RESULTS OF ESPRINET SPA AS AT 31 DECEMBER 2023

Sales from contracts with customers amounted to Euro 2,423.8 million, down by 11% from Euro 2,719.2 million in 2022.

Gross Profit stood at Euro 131.4 million and shows a decrease of 7% compared to 2022 (Euro 141.3 million). The effect of the increase in the percentage margin (5.42% in 2023 versus 5.20% in the previous year) is unable to offset the reduction in sales and the more than tripled amount of financial charges linked to non-recourse factoring programs.

EBITDA adjusted, calculated gross of one-off costs¹⁰ for Euro 29.2 million, was Euro 31.4 million, - 25% compared to Euro 42.1 million in 2022, calculated before one-off costs¹¹ of Euro 2.8 million.

EBIT adjusted, gross of Euro 29.2 million in non-recurring costs cited above, amounted to Euro 17.9 million, -41% compared to Euro 30.4 million in 2022, calculated gross of non-recurring costs of Euro 2.8 million cited above.

EBIT was Euro -11.4 million, compared to Euro 27.6 million in 2022.

Profit before income taxes was Euro -27.4 million, compared to Euro 22.4 million in 2022.

Net income was Euro -29.0 million, compared to Euro 16.0 million in 2022.

The Net Financial Position was negative by Euro 70.6 million and compares with the position as at 31 December 2022 that was negative by Euro 16.9 million. The value of the exact net financial position as at 31 December is influenced by technical factors like the seasonality of the business, the trend in 'non-recourse' factoring of trade receivables (factoring, confirming and securitization) and the trend in the behavioral models of customers and suppliers in the different periods of the year. Therefore, it is not representative of the average levels of net financial indebtedness noted during the period. The aforementioned programs for the factoring and securitization of trade receivables, which result in complete transfer of risks and benefits to assignees and therefore allow their derecognition from statement of financial position assets, determine an overall effect on the level

⁶ Equal to the sum of EBITs – excluding the effects of IFRS 16 – in the last 4 quarters.

⁷ Operating profit (EBIT Adj.), as defined above, net of taxes calculated at the actual tax rate of the reference annual consolidated financial statements adjusted, for the 2023 financial year only, of the non-recurring costs relating to the closure of VAT dispute.

⁸ Equal to the average of "Loans" at the closing date of the period and at the four previous quarterly closing dates (excluding the equity effects of IFRS 16).

⁹ Equal to the ratio between (a) NOPAT, as defined above, and (b) the average net invested capital as defined above.

¹⁰ The one-off costs were incurred by the parent company Esprinet S.p.A. mainly in connection with the signing of the settlement agreement reached with the Italian Revenue Agency aimed at the out-of-court settlement of the disputes regarding VAT for the tax periods 2013-2017.

¹¹One-off costs were incurred by the parent company Esprinet S.p.A. in relation to the voluntary Public Tender Offer for all of the ordinary shares of the Italian company Cellularline S.p.A.

of consolidated net financial payables as at 31 December 2023 quantifiable in Euro 228.0 million (Euro 226.4 million as at 31 December 2022).

Net equity totaled Euro 211.8 million (Euro 269.3 million as at 31 December 2022).

DIVIDEND PROPOSAL

The Board of Directors, in light of the recorded accounting loss and despite a positive adjusted net income, resolved with a view to prudential to propose to the Shareholders' Meeting not to distribute a dividend for the year just ended.

BUSINESS OUTLOOK

The year 2023 was characterized by a strong geopolitical and macroeconomic instability. The continuous inflationary pressure and the increase in interest rates, as well as the uncertainty of the context have weighed on consumer spending and have made companies' investment decisions more prudent. Based on this scenario, the ICT sector recorded a successive worsening in the drop in volumes that began at the end of 2022 in the three geographical areas in which the Group operates and in Europe in general.

Although the obstacles that the environment still presents to the outlook for 2024 are certainly not negligible, assuming that inflation continues to gradually decline, reducing the likelihood of further interest rate hikes, industry analysts believe that the market is now poised to return to growth, more likely more strongly in the second half of the year and at low single-digit rates, but returning to outpace GDP.

Growth in the Infrastructure Hardware area, indispensable in the digital transformation process of both the public administration and the private sector also strengthened by the massive multi-year government investment plans of the Recovery and Resilience program, is expected to continue with lower ratios than in the recent past. The demand for Software is likely to be stronger.

Product innovation, linked above all to artificial intelligence, will be another important driver. Not only are higher investments in data centers and software estimated, but also PCs equipped with artificial intelligence will be presented to the market later this year, which will provide a further boost during the current upgrade cycle. In this direction there are signs coming from the new AI smartphones, for example.

Nevertheless, there are other emerging areas characterized by a strong rate of innovation and a significant push towards outsourcing: cybersecurity, which, although experiencing significant growth since the pandemic period, continues to maintain a decisive role in relation to the multiplying context-related challenges and threats; and "everything as a service", which will intensify and increasingly integrate new functionalities at lower costs; and sustainability, as much in the adoption of software that will enable companies to optimize their increasingly complex ESG management (from data collection to analysis, from reporting to the identification of risks and opportunities) and improve performance, as in the adoption of technologies that will help reduce their impact on the environment. The ICT sector is also gaining ground in other areas, seizing opportunities deriving from the convergence of some sectors towards technology: energy efficiency and renewable energies, and electric mobility are an example of this.

ESPRINET remains confident, as do the industry analysts, in the projections of long-term growth of the ICT sector and in the ability of distribution to direct it. In the coming years, the digital transformation trend will continue to drive a sharp increase in technology spending, and the distribution channel, which has also been resilient in 2023, will remain strong in the choice of the go-to-market strategy of producers.

Therefore, the Esprinet Group is quickly adapting its strategy, preparing to meet the challenges deriving from the recovery expected for 2024 and from the new market scenario.

SUBSEQUENT EVENTS

Among the different facilities available to the Esprinet Group there is an unsecured short-term Revolving Credit Facility (RCF), partially used as of today as a backup line and which was not drawn at 31 December 2023. On the basis of the consolidated financial statements approved today, one of the financial covenants by which this RCF is supported has been violated and the Company is already working with the financing banks for the usual remediation.

CALL OF SHAREHOLDERS' MEETING

The Ordinary Shareholders' Meeting of Esprinet S.p.A. will be held, in a single call, on 24 April 2024 at 2:00 p.m. to discuss the following agenda:

• 1. Financial Statements as at 31 December 2023
  2. 1.1 Approval of the Financial Statements as at 31 December 2023, Directors' Report on Operations, Statutory Auditors' Report and Independent Auditors' Report. Presentation of the Consolidated Financial Statements as at 31 December 2023 and the Consolidated Non-Financial Statements pursuant to Legislative Decree No. 254 of 30/12/2016 - Sustainability Report.
  3. 1.2 Allocation of the result for the year.
• 1. Appointment of the Board of Directors for the period 2024/2026.
  2. 2.1 Determination of number of members.
  3. 2.2 Determination of duration of term in office.
  4. 2.3 Appointment of Directors.
  5. 2.4 Appointment of the Chairman of the Board of Directors.
  6. 2.5 Determination of relative compensation.
• 1. Appointment of members of the Board of Statutory Auditors for the period 2024/2026
  2. 3.1 Appointment of members.
  3. 3.2 Appointment of the Chairman.
  4. 3.3 Determination of the compensation.
• 1. Report on the remuneration policy and Related Compensation:
  2. 4.1 Binding resolution on the first section pursuant to Article 123-ter, paragraph 3 of the TUF.
  3. 4.2 Non-binding resolution on the second section pursuant to art. 123-ter, paragraph 4 of the TUF.
• 1. Motion for approval, in accordance with remuneration policies and pursuant to Article 114 bis of Legislative Decree 58/1998, of a Compensation plan ("Long-Term Incentive Plan") for members of the Board of Directors and managers of the group, valid for the three-year period 2024/2025/2026 and concerning the allocation of stock grant rights ("Performance Stock Grant") to beneficiaries, to be identified by the Board of Directors.
• 1. Proposal to authorize the purchase and disposal of own shares, within the maximum number permitted and with a term of 18 months; contextual revocation, for any unused portion, of the authorization resolved by the Shareholders' Meeting of 20 April 2023.

AUTHORISATION TO PURCHASE AND SELL OWN SHARES

The Board of Directors of Esprinet S.p.A. resolved to submit to the Ordinary Shareholders' Meeting the proposal to authorize the purchase and disposal of own shares.

The reasons behind the proposal of the authorization of the Shareholders' Meeting to purchase and sell own shares are as follows:

• i) reduction in share capital, in value or number of shares;
• ii) fulfilment of obligations arising from share option programs or other assignments of shares to employees or members of the board of directors of the Company or its subsidiaries or affiliates; and
• iii) in order to buy own shares held by employees of the Company or its subsidiaries and allotted or subscribed pursuant to articles 2349 and 2441, paragraph 8 of the Italian Civil Code, or arising from compensation plans approved under art. 114-bis of the TUF;

as specified in more detail in the Report of the Board of Directors prepared pursuant to art. 125-ter of the TUF, to which reference is made, and which will be made available to the public within the terms of the law at the registered office, on the Company's website at www.esprinet.com, and on the authorized "eMarket Storage" storage mechanism at .

The proposal envisages that: the maximum number of shares that can be purchased for a period of 18 months is equal to 5% of the share capital of the Company, without calculating the number of treasury shares in the portfolio at the date of approval of the authorization resolution; purchases must be made in compliance with the provisions of art. 132 of the TUF, of art. 144-bis of the Issuers' Regulation and any other applicable legislation, as well as the market practices permitted by Consob, where applicable (so as to benefit, where appropriate, from the protection ensured by the safe harbour envisaged pursuant to art. 5 of EU Reg. no. 596/2014 or by permitted market practices in force from time to time, where applicable), ensuring equal treatment among Shareholders, at a price between the minimum and maximum price established in the Report.

The Company currently owns 1,011,318 own shares, equal to 2.01% of the share capital. Esprinet's subsidiaries do not hold any shares in the Company.

The executive charged with the drawing up of the Company's accounting documents, Stefano Mattioli, declares that, in compliance with the provisions of paragraph 2 of art. 154-bis of Legislative Decree No. 58/1998 (T.U.F. - Consolidated Law on Finance), the financial data shown in this press release correspond to the findings resulting from accounting documents, books and accounting records.

With regard to the financial statement formats required by law, it should be specified that the statutory audit of the data has not been completed and, in the case of reclassified financial statements, that the data are not subject to statutory audit.

Esprinet is an enabler of the technological ecosystem, promoting tech democracy with a strong vocation for environmental and social sustainability. With a comprehensive offering of advisory services, IT security, services and products for sale or rental through an extensive network of professional resellers, Esprinet is the leading Group in Southern Europe (Italy, Spain and Portugal), the fourth in Europe and in the top ten at the global level.

Boasting more than 1,800 employees and € 4.7 billion in turnover in 2022, Esprinet (PRT:IM – ISIN IT0003850929) is listed on Borsa Italiana, the Italian stock exchange.

Press release available on www.esprinet.com and on

For more information:

INVESTOR RELATIONS CORPORATE COMMUNICATION

ESPRINET S.p.A. ESPRINET S.p.A. Tel. +39 02 404961 Tel. +39 02 404961 Giulia Perfetti Paola Bramati giulia.perfetti@esprinet.com paola.bramati@esprinet.com

CORPORATE COMMUNICATION CONSULTANTS

BARABINO & PARTNERS

Tel: +39 02 72023535

Federico Vercellino Linda Battini E-mail: f.vercellino@barabino.it E-mail: l.battini@barabino.it Mob: +39 331 5745171 Mob: +39 347 4314536

RECLASSIFIED CONSOLIDATED INCOME STATEMENT

(€/000)	2023	2022	% Var.
Sales from contracts with customers Cost of goods sold excl. factoring/securitisation	3,985,162 3,748,590	4,684,164 4,433,031	-15% -15%
Financial cost of factoring/securisation(1) Gross Profit(2) Gross Profit %	15,751 220,821 5.54%	6,826 244,307 5.22%	>100% -10%
Personnel costs Other operating costs EBITDA adjusted(3) EBITDA adjusted %	89,134 67,546 64,141 1.61%	87,056 66,579 90,672 1.94%	2 % 1% -29%
Depreciation and amortisation IFRS 16 Right of Use depreciation Goodwill impairment EBIT adjusted(3) EBIT adjusted %	7,430 12,635 - 44,076 1.11%	5,728 11,532 - 73,412 1.57%	30% 10% n/s -40%
Non recurring costs(4) EBIT EBIT %	30,064 14,012 0.35%	2,754 70,658 1.51%	>100% -80%
IFRS 16 interest expenses on leases Other financial (income) expenses Foreign exchange (gains) losses Result before income taxes Income taxes Net result - of which attributable to non-controlling interests - of which attributable to the Group	3,382 16,584 (848) (5,106) 6,769 (11,875) - (11,875)	3,260 3,439 1,064 62,895 15,549 47,346 - 47,346	4% >100% <100% <100% -56% <100% n/s <100%

NOTE

(1) Cash discounts for 'non-recourse' advances of trade receivables as part of revolving factoring and securitization programs.

(2) Gross of amortization/depreciation that, by destination, would be included in the cost of sales.

(3) Adjusted as gross of non-recurring items.

(4) Of which Euro 29.4 million otherwise included in "Other operating costs", Euro 0.6 million otherwise included in "Personnel costs" and, with reference to 2022, of which Euro 2.8 million otherwise included in "Other operating costs".

(€/000)	2023	2022	Var. %
Sales from contracts with customers	3,985,162	4,684,164	-15%
Gross Profit	220,821	244,307	-10%
Gross Profit %	5.54%	5.22%
SG&A	156,680	153,635	2 %
SG&A %	3.93%	3.28%
EBITDA adj.	64,141	90,672	-29%
EBITDA adj. %	1.61%	1.94%
EBIT adj.	44,076	73,412	-40%
EBIT adj. %	1.11%	1.57%
IFRS 16 interest expenses on leases	3,382	3,260	4%
Other financial (income) expenses	9,638	3,439	>100%
Foreign exchange (gains) losses	(848)	1,064	<100%
Profit before income taxes adj.	31,904	65,649	-51%
Profit before income taxes adj. %	0.80%	1.40%
Income taxes	7,658	16,317
Net Income adj.	24,246	49,332	-51%
Net Income adj. %	0.61%	1.05%
Non-recurring costs	36,121	1,986	>100%
Net Income as reported	(11,875)	47,346	<100%
Net income as reported %	-0.30%	1.01%

CONSOLIDATED INCOME STATEMENT

(€/000)	2023	non - recurring	2022	non - recurring
Sales from contracts with customers	3,985,162	-	4,684,164	-
Cost of sales	(3,766,721)	-	(4,441,195)	-
Gross profit	218,441	-	242,969	-
Sales and marketing costs	(74,122)	-	(71,333)	-
Overheads and administrative costs	(102,317)	(2,892)	(100,510)	(2,754)
Impairment loss/reversal of financial assets	(27,990)	(27,172)	(468)	-
Operating result (EBIT)	14,012	(30,064)	70,658	(2,754)
Finance costs - net	(19,118)	(6,946)	(7,763)	-
Result before income taxes	(5,106)	(37,010)	62,895	(2,754)
Income tax expenses	(6,769)	889	(15,549)	768
Net result	(11,875)	(36,121)	47,346	(1,986)
- of which attributable to non-controlling interests	-		-
- of which attributable to Group	(11,875)	(36,121)	47,346	(1,986)
Earnings per share - basic (euro)	(0.24)		0.96
Earnings per share - diluted (euro)	(0.24)		0.95

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(€/000)	2023	2022
Net result (A)	(11,875)	47,346
Other comprehensive income:
- Changes in translation adjustment reserve	(1)	(8)
Other comprehensive income not be reclassified in the separate income statement:
- Changes in 'TFR' equity reserve	(79)	428
- Taxes on changes in 'TFR' equity reserve	19	(103)
Other comprehensive income (B):	(61)	317
Total comprehensive income (C=A+B)	(11,936)	47,663
- of which attributable to Group	(11,936)	47,663
- of which attributable to non-controlling interests	-	-

RECLASSIFIED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

(€/000)	31/12/2023	31/12/2022
Fixed assets	273,868	258,453
Operating net working capital	104,112	261,593
Other current assets/liabilities	22,263	(3,222)
Other non-current assets/liabilities	(48,354)	(24,574)
Total uses	351,889	492,250
Short-term financial liabilities	72,246	82,163
Lease liabilities	11,896	10,740
Current financial (assets)/liabilities for derivatives	18	24
Financial assets held for trading	(113)	-
Financial receivables from factoring companies	(249)	(3,207)
Current debts for investments in subsidiaries	5,764	2,455
Other financial receivables	(9,656)	(10,336)
Cash and cash equivalents	(260,883)	(172,185)
Net current financial debt	(180,977)	(90,346)
Borrowings	65,702	71,118
Lease liabilities	99,154	101,661
Non-current debts for investments in subsidiaries	600	600
Net Financial debt	(15,521)	83,033
Net equity	367,410	409,217
Total sources of funds	351,889	492,250

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

ASSETS Non - current assets Property, plant and equipment 28,098 20,199 Right of use assets 104,624 106,860 Goodwill 116,510 110,303 Intangibles assets 11,053 9,652 Deferred income tax assets 11,243 9,091 Receivables and other non - current assets 2,340 2,348 273,868 258,453 Current assets Inventory 514,770 672,688 Trade receivables 698,602 701,071 Income tax assets 4,684 1,113 Other assets 82,530 68,908 Financial assets held for trading 113 - Cash and cash equivalents 260,883 172,185 1,561,582 1,615,965 Total assets 1,835,450 1,874,418 EQUITY Share capital 7,861 7,861 Reserves 371,424 354,010 Group net income (11,875) 47,346 Group net equity 367,410 409,217 Non - controlling interest - - Total equity 367,410 409,217 LIABILITIES Non - current liabilities Borrowings 65,702 71,118 Lease liabilities 99,154 101,661 Deferred income tax liabilities 18,923 16,646 Retirement benefit obligations 5,340 5,354 Debts for investments in subsidiaries 600 600 Provisions and other liabilities 24,091 2,574 213,810 197,953 Current liabilities Trade payables 1,109,260 1,112,166 Short-term financial liabilities 72,246 82,163 Lease liabilities 11,896 10,740 Income tax liabilities 931 1,058 Derivative financial liabilities 18 24 Debts for investments in subsidiaries 5,764 2,455 Provisions and other liabilities 54,115 58,642 1,254,230 1,267,248 Total liabilities 1,468,040 1,465,201 Total equity and liabilities 1,835,450 1,874,418	(€/000)	31/12/2023	31/12/2022

CONSOLIDATED STATEMENT OF CASH FLOWS

(euro/000)	2023	2022
Cash flow provided by (used in) operating activities (D=A+B+C)	168,036	(251,407)
Cash flow generated from operations (A)	52,587	89,907
Operating income (EBIT) Depreciation, amortisation and other fixed assets write-downs	14,012 20,065	70,658 17,260
Net changes in provisions for risks and charges Provision for taxes in instalment	658 21,574	37 -
Net changes in retirement benefit obligations Stock option/grant costs	(562) (3,160)	(163) 2,115
Cash flow provided by (used in) changes in working capital (B)	134,451	(319,329)
Inventory Trade receivables Other current assets Trade payables Other current liabilities	162,959 12,383 (19,612) (7,447) (13,832)	(143,171) (113,199) 1,186 (79,614) 15,469
Other cash flow provided by (used in) operating activities (C)	(19,002)	(21,985)
Interests paid Received interests Foreign exchange (losses)/gains Income taxes paid	(11,586) 1,122 328 (8,866)	(5,249) 156 (1,532) (15,360)
Cash flow provided by (used in) investing activities (E)	(19,948)	(19,059)
Net investments in property, plant and equipment Net investments in intangible assets Net investments in other non current assets Subsidiaries business combination	(13,393) (89) 17 (6,483)	(10,927) (1,503) 106 (6,735)
Cash flow provided by (used in) financing activities (F)	(59,390)	(48,820)
Medium/long term borrowing Repayment/renegotiation of medium/long-term borrowings Leasing liabilities remboursement Net change in financial liabilities Net change in financial assets and derivative instruments Deferred price acquisitions	38,000 (45,275) (12,024) (14,474) 4,580 (2,401)	13,000 (36,691) (10,841) 13,964 (536) (2,154)
Dividend payments	(27,796)	(25,562)
Net increase/(decrease) in cash and cash equivalents (G=D+E+F) Cash and cash equivalents at year-beginning Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at year-end	88,698 172,185 88,698 260,883	(319,286) 491,471 (319,286) 172,185

ESPRINET SPA RECLASSIFIED INCOME STATEMENT

(€/000)	2023	2022	% Var.
Sales from contracts with customers	2,423,750	2,719,248	-11%
Cost of goods sold excl. factoring/securitisation	2,282,264	2,574,723	-11%
Financial cost of factoring/securisation(1)	10,053	3,210	>100%
Gross Profit(2)	131,433	141,315	-7%
Gross Profit %	5.42%	5.20%
Personnel costs	50,993	50,180	2
Other operating costs	49,008	49,055	%
EBITDA adjusted(3)	31,432	42,080	0%
EBITDA adjusted %	1.30%	1.55%	-25%
Depreciation, amortisation, impairment IFRS 16 Right of Use depreciation Goodwill impairment EBIT adjusted(3) EBIT adjusted %	4,722 8,860 - 17,850 0.74%	3,554 8,160 - 30,366 1.12%	33% 9% n/s -41%
Non recurring costs(4) EBIT EBIT %	29,224 (11,374) -0.47%	2,754 27,612 1.02%	>100% <100%
IFRS 16 interest expenses on leases	2,695	2,619	3%
Other financial (income) expenses	14,088	1,795	>100%
Foreign exchange (gains) losses	(801)	817	<100%
Result before income taxes	(27,356)	22,381	<100%
Income taxes	1,683	6,321	-73%
Net result	(29,039)	16,060	<100%

NOTE

(1) Cash discounts for 'non-recourse' advances of trade receivables as part of revolving factoring and securitization programs.

• (2) Gross of amortization/depreciation that, by destination, would be included in the cost of sales.
• (3) Adjusted as gross of non-recurring items.
• (4) Of which Euro 29.0 million otherwise included in "Other operating costs", Euro 0.2 million otherwise included in "Personnel costs" and, with reference to 2022, of which Euro 2.8 million otherwise included in "Other operating costs".

ESPRINET SPA SEPARATE INCOME STATEMENT

(€/000)	2023	non - recurring	2022	non - recurring
Sales from contracts with customers	2,423,750	-	2,719,248	-
Cost of sales	(2,294,694)	-	(2,579,271)	-
Gross profit	129,056	-	139,977	-
Sales and marketing costs	(50,391)	-	(47,914)	-
Overheads and administrative costs	(62,733)	(2,052)	(64,369)	(2,754)
Impairment loss/reversal of financial assets	(27,306)	(27,172)	(82)	-
Operating result (EBIT)	(11,374)	(29,224)	27,612	(2,754)
Finance costs - net	(15,982)	(6,946)	(5,231)	-
Result before income taxes	(27,356)	(36,170)	22,381	(2,754)
Income tax expenses	(1,683)	685	(6,321)	768
Net result	(29,039)	(35,485)	16,060	(1,986)
- of which attributable to non-controlling interests	-		-
- of which attributable to Group	(29,039)	(35,485)	16,060	(1,986)

ESPRINET SPA STATEMENT OF COMPREHENSIVE INCOME

(€/000)	2023	2022
Net result (A)	(29,039)	16,060
Other comprehensive income not be reclassified in the separate income statement:
- Changes in 'TFR' equity reserve	(17)	315
- Taxes on changes in 'TFR' equity reserve	4	(76)
Other comprehensive income (B):	(13)	239
Total comprehensive income (C=A+B)	(29,052)	16,299
- of which attributable to Group	(29,052)	16,299
- of which attributable to non-controlling interests	-	-

ESPRINET SPA RECLASSIFIED STATEMENT OF FINANCIAL POSITION

(€/000)	31/12/2023	31/12/2022
Fixed assets	247,898	225,623
Operating net working capital	(54,288)	(10,841)
Other current assets/liabilities	118,717	81,319
Other non-current assets/liabilities	(29,936)	(9,903)
Total uses	282,391	286,198
Short-term financial liabilities	48,006	52,131
Lease liabilities	8,124	7,307
Financial receivables from factoring companies	(249)	(3,207)
Current debts for investments in subsidiaries	5,764	2,455
Financial (assets)/liab. From/to Group companies	12,882	(25,922)
Other financial receivables	(9,656)	(10,336)
Cash and cash equivalents	(113,122)	(121,130)
Net current financial debt	(48,251)	(98,702)
Borrowings	39,480	34,568
Lease liabilities	78,792	80,442
Non-current debts for investments in subsidiaries	600	600
Net Financial debt	70,621	16,908
Net equity	211,770	269,290
Total sources of funds	282,391	286,198

ESPRINET SPA STATEMENT OF FINANCIAL POSITION

(€/000)	31/12/2023	31/12/2022
ASSETS
Non - current assets
Property, plant and equipment	24,376	16,741
Right of use assets	81,813	83,450
Goodwill	18,403	18,282
Intangibles assets	1,327	1,789
Investments	115,225	101,326
Deferred income tax assets	4,999	2,262
Receivables and other non - current assets	1,755	1,773
	247,898	225,623
Current assets
Inventory	345,242	373,486
Trade receivables	330,419	348,798
Income tax assets	3,626	745
Other assets	156,222	172,986
Cash and cash equivalents	113,122	121,130
	948,631	1,017,145
Total assets	1,196,529	1,242,768
EQUITY
Share capital Reserves	7,861 232,948	7,861 245,369
Net result for the period	(29,039)	16,060
Total equity	211,770	269,290
LIABILITIES
Non - current liabilities
Borrowings	39,480	34,568
Lease liabilities	78,792	80,442
Deferred income tax liabilities	3,390	3,315
Retirement benefit obligations	3,628	3,547
Debts for investments in subsidiaries	600	600
Provisions and other liabilities	22,918	3,041
	148,808	125,513
Current liabilities
Trade payables	729,949	733,125
Short-term financial liabilities	69,388	74,709
Lease liabilities	8,124	7,307
Debts for investments in subsidiaries	5,764	2,455
Provisions and other liabilities	22,726	30,369
	835,951	847,965
Total liabilities	984,759	973,478
Total equity and liabilities	1,196,529	1,242,768

ESPRINET SPA STATEMENT OF CASH FLOWS

(euro/000)	2023	2022
Cash flow provided by (used in) operating activities (D=A+B+C)	11,684	(89,337)
Cash flow generated from operations (A)	19,559	40,878
Operating income (EBIT)	(11,374)	27,612
Depreciation, amortisation and other fixed assets write-downs	13,581	11,714
Net changes in provisions for risks and charges	(931)	(173)
Provision for taxes in instalment	21,574	-
Net changes in retirement benefit obligations	(313)	(258)
Stock option/grant costs	(2,978)	1,983
Cash flow provided by (used in) changes in working capital (B)	3,233	(115,944)
Inventory	30,072	(47,555)
Trade receivables	23,763	(64,706)
Other current assets	(29,542)	(6,792)
Trade payables	(8,818)	(11,478)
Other current liabilities	(12,242)	14,587
Other cash flow provided by (used in) operating activities (C)	(11,108)	(14,271)
Interests paid	(8,899)	(3,378)
Received interests	1,182	208
Foreign exchange (losses)/gains	422	(1,213)
Income taxes paid	(3,813)	(9,888)
Cash flow provided by (used in) investing activities (E)	(20,289)	(18,030)
Net investments in property, plant and equipment	(11,897)	(9,617)
Net investments in intangible assets	20	(1,299)
Net investments in other non current assets	20	(29)
Subsidiaries establishment	(100)	-
Subsidiaries business combination	(11,219)	(7,085)
4Side merger	2,887	-
Cash flow provided by (used in) financing activities (F)	597	(14,287)
Medium/long term borrowing	30,000	13,000
Repayment/renegotiation of medium/long-term borrowings	(22,527)	(18,073)
Leasing liabilities remboursement	(8,291)	(7,547)
Net change in financial liabilities	(12,026)	16,107
Short-term borrowing received/(granted)	40,000	10,500
Net change in financial assets and derivative instruments	3,638	(558)
Deferred price acquisitions	(2,401)	(2,154)
Dividend payments	(27,796)	(25,562)
Net increase/(decrease) in cash and cash equivalents (G=D+E+F)	(8,008)	(121,654)
Cash and cash equivalents at year-beginning	121,130	242,784
Net increase/(decrease) in cash and cash equivalents	(8,008)	(121,654)
Cash and cash equivalents at year-end	113,122	121,130

Numero di Pagine: 22