Novabase SGPS

Annual / Quarterly Financial Statement • Feb 15, 2024

Relevant information

2023 Results

Lisbon, 15 February 2024

Novabase – Sociedade Gestora de Participações Sociais, S.A., under the terms and for the purposes of article 17 of Regulation (EU) no. 596/2014 of the European Parliament and of the Council and article 29.º- Q of the Portuguese Securities Code, discloses today to the market the results regarding the full year of 2023, whose essential features are included in the presentation attached.

Any questions about the information disclosed herein can be sent to investor.relations@novabase.com.

Privileged Information

NEXT-GEN

IT SERVICES COMPANY

FY23 CONSOLIDATED RESULTS February 15, 2024

Disclaimer

• This presentation contains sector and forward-looking statements concerning the development of Novabase's business. While these statements are based on Novabase's current projections, judgments and future expectations, a number of risks and uncertainties could cause actual data to differ materially from those expressed or implied by such statements. Such risks and uncertainties relate to factors that are beyond Novabase' ability to control or estimate precisely, and include but are not limited to, general economic conditions, macroeconomic factors, regulatory, political or government guidelines and trends, credit markets, among others.
• Statements in this release relate only to this presentation date. Except when required by law or specific regulation, Novabase assumes no obligation to update the information or to notify in the event that any matter stated herein changes or becomes inaccurate. Thus, neither Novabase, nor any of its subsidiaries, its administrators, members of the other corporate bodies or employees, make any declaration or commitment on the accuracy or completeness of the information and do not assume, therefore, any type of obligation or responsibility.
• Financial reporting terms used in this Report are mostly in accordance with International Financial Reporting Standards (IFRS) but will include certain non-IFRS financial measures of our performance (APMs). APMs used by Novabase are intended to provide additional information, more comprehensive and relevant to users, and are applied consistently in all periods reflected in this release. Reconciliation of each of these APMs to its most directly comparable IFRS financial measure can be found in the end of this Report. All amounts in this presentation are expressed in million Euros, except otherwise stated. The financial information here reported is unaudited.
• This presentation is provided for informational purposes only and does not constitute a document for the offer of securities, and its distribution or use by any person or entity is forbidden without prior authorization from Novabase.

FY23 Outlook

Message from Luís Paulo Salvado

"In 2023, Novabase achieved significant progress in the execution of its strategy, as mirrored in the financial outcomes we now disclose.

Turnover increased by 10% and EBITDA by 19%. Net Profit reached 47 M€, surging by 428%, driven by a capital gain of 40 M€ from the divestiture of the Neotalent business.

Net Cash was 68 M€, marking an uplift of 28 M€, inclusive of the disbursement of 17 M€ in the Buyback Offer for its own shares and 11 M€ in shareholder's remuneration.

Total shareholders return was 42%, reflecting a robust strategic and operational performance.

Within the Next-Gen segment, international operations expanded by 13%, accounting for 69% of total Turnover, with the UK and Germany emerging as the main markets. EBITDA escalated by 39%, benefiting from the operational stabilization in the Middle East. The cost per employee rose by 11%, showing a stronger value proposition amidst the current competition for specialized expertise in the tech sector.

These achievements are dedicated to the entire team at Novabase, whose talent and committed efforts made them possible.

The 2023 guidance outlined in the Strategy Update 2019+, as previously forecasted and announced to the market, was not fully achieved. Nonetheless, over the 3-year term now concluding, Next-Gen witnessed an organic growth of 46% in Turnover and 57% in EBITDA, establishing EBITDA margin at 9.5%.

For 2024, despite ongoing uncertainty as the prevailing variable, we trust in our team's capacity to implement the defined strategy.

Given the current Cash position, the Board of Directors will propose at the next General Meeting of Shareholders a distribution of up to 1.79 € per share, subject to potential adjustments based on the final configuration of the balance sheet items, and with a possibility still under review for payment in kind, at the discretion of the beneficiary shareholder, to be announced at the time of the meeting call."

FY23 in Review

Next-Gen: 2019+ Strategy Execution

Strong performance, fully organically

Next-Gen grew at double-digit YoY, with international revenues up 13%. Profitability near the two-digit goal, showing a recovery in ME projects with delivery challenges in 2022.

Equity Partnership in Celfocus, aiming at aligning shareholder value, completed by the end of 2023.

Next-Gen focused on international expansion, particularly in the areas of Cognitive and Analytics, while successfully developing its talent engine.

Sale of IT Staffing Business

Novabase continued to successfully deliver on its strategy, with the sale of the IT Staffing Business to Conclusion Group B.V., for a Price to Sales 2022 multiple of 1.31x, subject to adjustments.

This transaction enables additional Novabase shareholders' remuneration while focusing all its resources on Next-Gen Business.

Successful transformation

Fully delivered on the shareholder remuneration target, while, as anticipated, slower on its operating ambition for 2019-2023, conditioned by delays in inorganic growth and the complexity of the period (COVID-19 and geopolitical conflicts).

Novabase in the News¹

• Partnership with MATRIXX Software | Celfocus and MATRIXX have joined forces to launch an AI solution for 5G monetization.
• Award at the Glotel Awards Ceremony | Celfocus and Vodafone won at the 2023 World Communication Awards hosted by Telecoms.com.
• Sponsorship of Banking Transformation Summit, FutureNet World, Total Telecom Congress and Network Now | Celfocus continues to support international reference events focused on topics impacting digital economy and next-gen technology innovation.
• Building up an employer branding | Novabase is invested in attracting the best talent, engaging in multiple initiatives at universities and job fairs, e.g. FISTA23² , SINFO 30, JEEC 2023³ and Jobshop 2023, to name a few.
• Equity Partnership in Celfocus | Within the scope of Celfocus's business development plan, a process will be initiated that will culminate in the acquisition of a minority percentage of the share capital of Celfocus by a group of employees of Novabase Group with operational leadership responsibilities.
• Sale of IT Staffing Business | Novabase sold its IT Staffing business to Conclusion Group for 51.1 million euros, subject to adjustments.
• Novabase launched a Public Offer for the acquisition of own shares | As a result, Novabase acquired 3,558,550 shares (11.33% of its share capital) and reduced its share capital by cancelation of the shares acquired in the context of the Offer.
• Novabase paid 0.42 €/share | The commitment to pay a total of 1.50 €/share to shareholders in 2019-2023 horizon, under 2019+ Strategy, was fulfilled.
• New qualified shareholder | Isatis Investment Classic Blue fund reported holding a qualified 5% stake in the share capital of Novabase.

Press Zone

Value Portfolio: 2019+ Strategy Execution

2019+ Strategy Execution

¹ Until this presentation date.

² Forum of ISCTE School of Technology and Architecture.

Relevant

Information Completion of IT Staffing Business sale

• On October 12, 2023, Novabase entered into a Sale and Purchase Agreement with Conclusion Group B.V. for its IT Staffing Business through the disposal of all the shares held in Novabase Neotalent S.A., corresponding to 95.003% of the shares representing the respective share capital, which holds the entire share capital of Novabase Neotalent España, S.A.U..
• The agreed initial purchase price was 49.4 M€, subject to certain adjustments as foreseen in the SPA, to which a potential earn-out of up to 0.95 M€ may be accreted, depending on full compliance with the Transitional Services Agreement ("TSA") also entered into on the same date.
• The sale was substantially completed by the end of November, after verification of the relevant conditions precedent under the Agreement.
• On December 18, it was paid by the buyer 51.1 M€, comprising certain adjustments to the initial price. The final price is still subject to positive and negative adjustments, resulting from the final calculation of price mechanisms clauses in the Agreement.
• As a result, Novabase recorded, with reference to November 30, 2023, a gain on the sale of IT Staffing Business in the amount of 39.8 M€, above the range of 26 M€ to 33 M€ of estimated capital gain disclosed, but still subject to adjustments.

Financial Highlights

FY23 Performance

Strong results in a year marked by the sale of IT Staffing

Turnover and EBITDA do not include the IT Staffing Business (Value Portfolio), discontinued in 4Q23, for all periods in this presentation.

• Turnover grew 10% YoY
• 69% of Turnover is generated outside Portugal, with Next-Gen growing internationally at double-digit, +13% YoY
• Europe & ME target markets account for 95% of NG's International Ops.
• Top Tier clients Revenues grew 9% YoY
• EBITDA increased 19% YoY
• Net Profit of 47.1 M€
• Record high Net Cash position of 67.8 M€
• Talent Pool of 1317 employees
• Total Shareholder Return of 42%

Turnover

Turnover grew 10% YoY

Driven by Next-Gen's international business, with revenues up 13% YoY.

(1) Turnover by Geography is computed based on the location of the client where the project is delivered.

EBITDA increased 19% YoY

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

Next-Gen Segment

Next-Gen Turnover grew 10% YoY…

Fully organic growth.

… with EBITDA up 39% YoY

Profitability positively impacted by the recovery of Middle East margins, despite scale-up costs, wage inflation and investments in key offerings.

11

Next-Gen Segment

Double-digit growth in international Ops.

Multi-industry approach results emerging, but still Telco dominance.

International Turnover showed a remarkable 13% growth YoY and stands for 69% of Next-Gen's Turnover.

Target markets of Europe & ME totalled 95% of the segment's international Revenues, +15% YoY.

Next-Gen Segment

Top Tier clients Revenues grew 9% YoY

Growth of the customer base and ongoing investments to increase brand awareness and toptier client share of wallet.

% of Revenues from Top Tier clients (1)

Total number of clients in FY23 increased to 117 (111 in FY22).

(1) Top Tier clients (>1 M€) considers the Trailing 12 Months.

Value Portfolio Segment

Value Portfolio Turnover of 0.1 M€

EBITDA down to -1.7 M€

Segment reflects only VC ops. and central structure, as a result of the IT Staffing Business disposal, and its consequent presentation under Discontinued operations. Impacted by central structure costs.

-1.7 -2

EBITDA to Net Profit

Net Profit of 47.1 M€

Financial results declined 0.7 M€ YoY due to higher interests and a lower level of reevaluations in the VC Funds portfolio.

Change in income tax of -1.1 M€ YoY shows a drop in SIFIDE R&D tax incentives recognised.

Discontinued operations increased 38.4 M€ YoY, fundamentally due to the capital gain of IT Staffing Business disposal, amounting to 39.8 M€.

Total EPS increased to 1.76 € (0.29 € in FY22).

EBITDA to Net Profit

Record high Net Cash position of 67.8 M€

To support Next-Gen growth and shareholder remuneration.

Cash generation of 5.3 M€ in 2023, excluding the cash inflow of 51.1 M€ from IT Staffing Business disposal, and the cash outflows of 10.8 M€ from shareholder remuneration and 17.3 M€ related to the acquisition of own shares in the context of the Public Offer.

Net Cash

3.3 M€ of Net Cash refers to Non-Controlling Interests (Vs. 3.2 M€ in FY22).

Given the cash inflow from the sale of IT Staffing Business and the strong performance in FY23, the Board will propose to the next GMS a remuneration of up to 1.79 €/share.

Talent

Talent Pool of 1317 employees

Average number of Employees

Next-Gen Value Portfolio (1) Value Portfolio (1)

(1) Excluding IT Staffing representing 811 employees in FY22.

(2) Determined by the formula: number of leaves at the employee's initiative ÷ average number of employees, for the Trailing 12 Months.

Talent pool increased 1% YoY (1301 in FY22).

TTM attrition rate (2) of Next-Gen dropped to 11.2% (18.2% in FY22), confirming the downward trend we have been observing, as a result of proactive management of our pool and evolving market context.

Stock Market

TSR of 42%

NBA stock price increased 33% in 2023 (or 42% adjusting the shareholder remuneration), whilst EuroStoxx Technology Index increased 32% and PSI All-Share Index increased 4%.

In 2023 Novabase paid 0.42 €/share to shareholders, thus fulfilling the intention to pay a total of 1.50 €/share in 2019-2023 (1) .

(1) Expressed by the Board of Directors under the terms of Strategy Update 2019+.

In this period, Novabase launched a Public Offer over own shares, creating an additional remuneration opportunity for shareholders. As a result, Novabase acquired 3,558,550 shares at 4.85 €/share.

Excluding shares acquired in the context of the Offer (cancelled afterwards to reduce share capital), Novabase acquired 18k shares during 2023. At 31 December 2023, Novabase holds 658,461 own shares (2.48% of its share capital).

Average price target disclosed by Novabase's analysts is 6.40 €. Average upside is 19%.

Market Cap at the end of 2023 is 142.2 M€, with a ttm Price to Sales of 0.79x.

The Board will propose to the GMS to be held on May 22, a remuneration of up to 1.79 €/share.

APMs

In compliance with ESMA guidelines

Alternative Performance Measures

APMs used by Novabase in this presentation are: EBITDA and Net Cash.

EBITDA allows to evaluate the profitability of the business and the company's capacity to generate resources through its operating activities. EBITDA is defined as operating profit excluding depreciation and amortisation and (if any) non-operating costs (e.g. restructuring costs). "Operating Profit" is simultaneously the item of the consolidated income statement, which is an integral part of this Report, more directly reconcilable and more relevant to this APM.

Net Cash provides information on the level of cash and other bank deposits and marketable securities, after discounting the debts to financial institutions, assisting in the analysis of the company's liquidity and its ability to meet non-bank commitments. "Cash and cash equivalents" is simultaneously the item of the consolidated statement of financial position more directly reconcilable and more relevant to this APM.

The detail and breakdown of Net Cash, as well as the reconciliation in FY23 and prior period, is analysed in the table below.

FY23
80 314 ,
3 529 ,
(8 587) ,
(7 475) ,
67 781 ,

	FY22	FY23
shares held by the Treasury Company	2 047 413 , ,	658 461 ,
Closing last tradable day price (€) @	4 040	5 360
shares held by the Treasury Company thousands) (Euro	8 272 ,	3 529 ,

(1) Determined by multiplying the number of treasury shares held by the Company at the end of the period by the share price on the last tradable day.

NEXT-GEN IT SERVICES COMPANY

Novabase SGPS, S.A. Euronext code: PTNBA0AM0006 Registered in TRO of Lisbon and Corporate Tax Payer no. 502.280.182 Share Capital: 795,829.11 € Head Office: Av. D. João II, 34, 1998-031 Lisbon - PORTUGAL

María Gil Marín Chief Investors Officer Tel. +351 213 836 300 Fax: +351 213 836 301 investor.relations@novabase.com

Report available on website: www.novabase.com

Next Events

General Meeting of Shareholders May 22 (3 pm GMT+1)

Results 1H24 July 31 (after market closure)

Consolidated Statement of Financial Position Consolidated Income Statement as at 31 December 2023 for the year ended 31 December 2023

	31.12.23 (Thousands of Euros)	31.12.22		31.12.23 (Thousands of Euros)	31.12.22 (*)	Var. %
ASSETS			CONTINUING OPERATIONS
Tangible assets	1,391	1,918	Operating income
Intangible assets	9,264	11,935	Services rendered	132,556	120,399
Right-of-use assets	11,390	3,253	Supplementary income and subsidies	144	124
Financial investments	13,879	13,961	Other operating income	321	219
Deferred income tax assets	6,945	8,826
Other non-current assets	1,466	1,706		133,021	120,742
Total Non-Current Assets	44,335	41,599	Operating expenses
			External supplies and services	(46,760)	(45,141)
Inventories	-	-	Employee benefit expense	(73,945)	(66,668)
Trade debtors and accrued income	40,073	55,528	(Provisions) / Provisions reversal	(827)	267
Other debtors and prepaid expenses	10,326	10,866	Net impairm. losses on financ. assets	(156)	193
Derivative financial instruments	246	763	Other operating expenses	(404)	(205)
Cash and cash equivalents	80,314	40,617
Total Current Assets	130,959	107,774		(122,092)	(111,554)
Assets for continuing operations	175,294	149,373	Gross Net Profit (EBITDA)	10,929	9,188	18.9 %
			Depreciation and amortisation	(3,468)	(3,224)
Assets for discontinued operations	1,373	268
Total Assets	176,667	149,641	Operating Profit (EBIT) Financial results	7,461 (1,215)	5,964 (491)	25.1 %
EQUITY			Net Profit before taxes (EBT)	6,246	5,473	14.1 %
Share capital	796	32,971	Income tax expense	(2,822)	(1,727)
Treasury shares	(20)	(2,150)
Share premium	226	226	Net Profit from continuing operations	3,424	3,746	-8.6 %
Reserves and retained earnings	27,449	16,436
Net profit	47,058	8,917	DISCONTINUED OPERATIONS
Total Shareholders' Equity	75,509	56,400	Net Profit from discont. operations	44,031	5,609	685.0 %
Non-controlling interests	11,587	10,827
Total Equity	87,096	67,227	Non-controlling interests	(397)	(438)
LIABILITIES			Attributable Net Profit	47,058	8,917	427.7 %
Bank borrowings	8,587	5,200
Lease liabilities	9,796	1,114
Provisions	3,269	3,047
Other non-current liabilities	2,749	363
Total Non-Current Liabilities	24,401	9,724
Bank borrowings	7,475	4,200
Lease liabilities	1,961	2,737
Trade payables	4,628	7,015
Other creditors and accruals	28,240	36,503
Derivative financial instruments	112	260

Deferred income tax assets	6,945	8,826
Cash and cash equivalents	80,314	40,617
Assets for discontinued operations	1,373	268
Treasury shares	(20)	(2,150)
Reserves and retained earnings	27,449	16,436
Non-controlling interests	11,587	10,827
Bank borrowings	8,587	5,200
Lease liabilities	9,796	1,114
Provisions	3,269	3,047
Other non-current liabilities	2,749	363
Total Non-Current Liabilities	24,401	9,724
Bank borrowings	7,475	4,200
Lease liabilities	1,961	2,737
Trade payables	4,628	7,015
Other creditors and accruals	28,240	36,503
Derivative financial instruments	112	260
Deferred income	20,972	20,007

Total Current Liabilities 63,388 70,722

Total Liabilities for cont. operations	87,789	80,446
Total Liabilities for discont. operations	1,782	1,968
Total Liabilities	89,571	82,414	Other information :
			Turnover	132,556	120,399	10.1 %
Total Equity and Liabilities	176,667	149,641	EBITDA margin	8.2 %	7.6 %
Net Cash	67,781	39,489	EBT % on Turnover Net profit % on Turnover	4.7 % 35.5 %	4.5 % 7.4 %

* Restated - The IT Staffing business was considered in discontinued operations.

Novabase S.G.P.S., S.A. Euronext code: PTNBA0AM0006 Share Capital 795,829.11 Euros - Corporate Registration CRCL N.º 1495 Head-office: Av. D. João II, 34, Parque das Nações, 1998-031 Lisbon, Portugal Corporate Tax Payer N.º 502 280 182

Results Information by SEGMENTS for the year ended 31 December 2023

(Thousands of Euros)
	Value Portfolio	Next-Gen	NOVABASE
CONTINUING OPERATIONS
Turnover	56	132,500	132,556
Gross Net Profit (EBITDA)	- (1,711)	- 12,640	- 10,929
Depreciation and amortisation	- (9)	- (3,459)	- (3,468)
Operating Profit (EBIT)	(1,720)	9,181	7,461
Financial results	- (564)	- (651)	- (1,215)
Net Profit / (Loss) before Taxes (EBT)	(2,284)	8,530	6,246
Income tax expense	- 569	- (3,391)	- (2,822)
Net Profit / (Loss) from cont. operations	(1,715) -	5,139	3,424
DISCONTINUED OPERATIONS
Net Profit from discontinued operations	44,031	-	44,031
Non-controlling interests	(288)	(109)	(397)
Attributable Net Profit / (Loss)	42,028 -	5,030 -	47,058 -
Other information :
EBITDA % on Turnover	n/a	9.5%	8.2%
EBT % on Turnover	n/a	6.4%	4.7%
Net profit % on Turnover	n/a	3.8%	35.5%