Relevant information Trading Update 3M20

Lisbon, 14 May 2020

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 248-A of the Portuguese Securities Code, discloses today to the market a Trading Update regarding the first three months of 2020, whose essential features are included in the presentation attached.

In addition, it is further informed that a webcast on this Trading Update will be held today, at 5 pm Lisbon time (GMT+1). More information about registration can be found at www.novabase.pt.

Privileged Information

NEXT-GEN IT SERVICES COMPANY

May 14, 2020

Disclaimer

This presentation includes sector and forward-looking statements involving uncertainties that could cause actual data to differ materially from those indicated.

These statements relate only to this date of presentation, and Novabase assumes no obligation to update the information or to notify in the event that any question changes or is identified as incorrect, except when required by law or specific regulation.
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.
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.

3M20 Outlook

CEO

Message from João Nuno Bento

"I am very pleased with Novabase's performance in 3M20.

The company maintained a steady pace on the transformation front whilst delivering strong growth in both segments.

The sale of Novabase's stake in Collab at a Price to Sales multiple of 0.92x generates some additional funds and frees up management time to focus on other initiatives.

Subsequent to the end of 3M20, two relevant accomplishments were communicated:

The GTE sale price was adjusted upward to 39.3 M€ with an estimated adjustment to the capital gain of 2.9 M€ to be recognised in 2020;
The acquisition of Vodafone's stake in Celfocus. This event marks a critical milestone in our strategic roadmap and is now behind us.

Regarding Covid-19 we remain confident but cautious. Confident in our financial strength, our people and our strategy. Cautious because of the uncertainty on the time and shape of the recovery.

On the Financials, I would underline the following key achievements:

Turnover increased 13% YoY, with Next-Gen representing 71%;
63% of Next-Gen Turnover is generated outside Portugal, from which Europe & ME accounts for 85%;
85% of Revenues captured from Top Tier Clients;
Highest Net Cash recorded, of 67.3 M€;
Talent Pool of 1756 employees;
Novabase share price increased 3% since the beginning of the year, despite stock markets falls;
No relevant financial impacts due to Covid-19 pandemic observed this quarter.

Thank You All for your support!"

3M20 in Review

Value

Portfolio:

Strategy

Relevant acquisition initiative to grow Next-Gen completed

Next-Gen strengthened with the acquisition of Vodafone Portugal's equity stake in Celfocus (1), for an initial price of 20 M€, subject to adjustments.

Full ownership of Celfocus is key to Novabase's strategy of becoming an "Next-Gen IT Services Company", enabling the Group to allocate resources and explore synergies in a more efficient way.

(2) Accounted in FY19.

(3) Baseline FY2018 (previous to Strategic Update 2019+).

Next-Gen: Strategy 2019+ Execution

Generating value to fund Next-Gen strategy

Novabase continues to successfully deliver on its strategy, with the sale of Collab and the recent divestment of GTE (2):

Sale of Novabase's equity stake in Collab to the swedish Netadmin System I Sverige AB, for a 2019 Price to Sales multiple of 0.92x, subject to adjustments;
Adjustment to consideration on the sale of GTE Business, raising the 2019 Price to Sales multiple of this transaction to 1.01x, with an estimated adjustment to the capital gain of 2.9 M€ to be recognised in 2020 (1).

With these transactions, Novabase has divested over 60% of its Value Portfolio segment revenue (3).

Novabase on the News

March,11 || Novabase re-entered PSI20 Index as of March, 23.

April, 23 (1) || Luís Paulo Salvado, chairman of Novabase's Board of Directors, met with the President of Portugal, to discuss the impact of the current pandemic situation and prospects on our economic sector, and defends bet on digital economy. (1) Subsequent event to 3M20.

Relevant Information

Subsequent Event to 3M20

Adjustments to consideration on the sale of GTE Business

Following the previous announcements to the market in relation to the celebration and completion of the sale, to VINCI Energies Portugal, S.A., of the "Application and Data Analytics" business for the Government, Transport and Energy sectors ("GTE Business"), the parties confirmed, on May 11, and a net adjustment to the price initially paid by the purchaser and the verification of the earn-out which was dependent upon the final performance of the GTE Business in the financial year of 2019.
As such, the consideration obtained by Novabase after these events is 39.3 M€ corresponding to the sum of the price initially agreed of 33 M€, the earnout of 3 M€ and the net adjustment of the remainder.
Considering the above mentioned, the estimated capital gain is now 14.9 M€.
Under the terms of the Agreement, some additional adjustments to the purchase price may still occur until the ninth month after the date of completion of the sale.
It is recalled that the capital gain registered in 2019 was 12.0 M€, therefore any difference to the final capital gain will be recognised in the financial statements of 2020.

Relevant Information

Subsequent Event to 3M20

Novabase buys Vodafone Portugal's equity stake in Celfocus

On April 24, 2020, Novabase has entered into a sale and purchase agreement with Vodafone Portugal, S.A. ("Vodafone") to buy the shares representing Vodafone's equity stake in Celfocus, S.A. (45.001%).
The agreed purchase price for Vodafone's entire shareholding was 20 M€, payable within five business days from April, 24.
There may be an additional price adjustment of 7.5 M€, to be paid for in services, which could raise the final purchase price to a maximum of 27.5 M€, as a result of possible annual adjustments until 2023 related to service hiring guarantees of 10 M€ per year for three years given by Vodafone.
Due to the importance of this transaction for the execution of the strategy and given Novabase's financial robustness, the Board of Directors approved the acquisition, despite the current context of uncertainty. This transaction does not require any significant guidance reframing regarding the Strategic Update 2019+.
Celfocus employed over 650 employees. In 2019, it had a Turnover of 65 M€, EBITDA of 6.3 M€ and cash holdings of 16.1 M€.
Prior to this transaction, Novabase held a 54.997% stake in Celfocus, S.A..

Covid-19

In compliance with ESMA71-99-1290

Covid-19: Confident but cautious

Novabase is carefully and permanently monitoring all developments related to the Covid-19 pandemic, and a Contingency Coordinating Group was created, at a very early stage, to manage this crisis.
In that sense, Novabase has put in place all measures aiming to minimise the risks to its employees' health (the main "asset") and to ensure its clients business operations continuity. Additionally, the Board of Directors decided to revert its initial intention of proposing to the 2020 GMS a 0.85 €/share remuneration, maintaining the commitment assumed towards the shareholders upon disclosure of Strategic Update 2019+, of distributing 1.5 €/share in 2019-2023.
No relevant impacts were observed due to Covid-19 in 3M20 figures.
Novabase has a solid customer base, the ability to work digitally / remotely and a proven track record of use of Agile delivery models in project implementations, as well as a strengthened liquidity position. Moreover, Novabase believes that difficulties also present opportunities and defends a bet on digital economy.
As far as we are able to anticipate at the date of issue of this report, no relevant impacts have been observed and this allows Novabase to face the pandemic with some degree of confidence. However, the current context remains of great uncertainty and we assume that some sort of future impact is probable.

Financial Highlights Turnover increased 13% YoY, with Next-Gen

3M20 performance: On the right track of Strategy 2019+!

Turnover do not include GTE Business and Collab, qualified as discontinued operations according to IFRS 5, for all periods in this presentation.

representing 71%
63% of Next-Gen Turnover is generated outside Portugal, from which Europe & ME accounts for 85%
85% of Revenues captured from Top Tier Clients
Highest Net Cash recorded, of 67.3 M€
Talent Pool of 1756 employees
Novabase share price increased 3% since the beginning of the year, despite stock markets falls
No relevant impacts due to Covid-19 pandemic observed this quarter

Turnover

Turnover increased 13% YoY, with Next-Gen representing 71%

No relevant impacts were observed this quarter due to the Covid-19 pandemic, both in Next-Gen and in Value Portfolio segments.

(1) Turnover by Geography is computed based on the executed project geography. 11

Next-Gen Segment

Next-Gen grows by double-digit in Turnover, +10% YoY

International Turnover grows 11% YoY.

63% of Next-Gen Turnover generated outside Portugal.

Europe & ME accounts for 85% of international operations, registering an increase of 1% YoY.

Europe & Middle East

11.9

8.4 12.0

Portugal

2.1

RoW

Talent engine/nearshore capability

Client relationship & front delivery

3M19

3M20

Next-Gen Segment

Next-Gen working on Multi Industry approach…

Targeting clients with ambition to transform, with 3M20 still focused on Telco.

% of Revenue by Industry

82% 18% 80% 20% 3M19 3M20

Telco Financial Services

… and building long term partnerships

Large accounts registered a growth, both in number and in Revenues (+12% YoY).

% of Revenues from Top Tier clients (1)

Total number of clients in 3M20 increased to 109 (106 in 3M19).

(1) Top Tier clients (>1 M€) considers the Trailing 12 months. 13

Value Portfolio Segment

Value Portfolio Turnover grows 23% YoY

Evenly, double-digit, growth in both domestic (23% YoY) and international markets (22% YoY).

In terms of geographic mix, 41% of Value Portfolio Turnover is generated outside Portugal.

Net Cash

Highest Net Cash recorded, of 67.3 M€

Comfortable liquidity situation to pursue the Strategy 2019+ objectives and tackle the Covid-19 pandemic potential impacts.

Net Cash

Cash generation of 33.2 M€ in 3M20, highlighting:

Cash inflow of 32.9 M€ from GTE Business disposal;
Cash inflow of 3.2 M€ from the Sale of Collab.

From the 67.3 M€, 12.5 M€ refers to Noncontrolling Interests.

Net Cash in 3M20 does not yet reflect the cash outflow from the acquisition of Vodafone's equity stake in Celfocus nor the cash inflow related to the price adjustment of the GTE Business disposal, both materialised on the second quarter.

Talent

Talent Pool of 1756 employees in 3M20

Average number of Employees (1)

3M19 3M20

Next-Gen Value Portfolio (2)

(1) Excluding GTE Business and Collab.

(2) Including holding / shared services representing 85 employees in 3M20 (88 in 3M19).

Talent pool increased 1% YoY (1734 in 3M19).

Next-Gen Turnover per employee increased 13% YoY.

Attrition rate of Next-Gen was 3.9% in 3M20 (4.9% in 3M19).

Stock Market

Novabase share price increased 3% in 3M20…

… while stock markets are falling, probably reflecting the beginning of the global recession caused by the Novel Coronavirus and oil price crisis.

PSI20 Index decreased 22% and EuroStoxx Technology Index, 17%.

Novabase and the Market

Novabase re-entered to the main index of the Lisbon stock exchange, the PSI20, as of March, 23.

Due to the current context of great uncertainty of the Covid-19 pandemic, the Board decided to revert its initial intention of proposing to the 2020 GMS a remuneration of 0.85 €/share.

In this period, Novabase acquired 139,188 shares (under the buy-back programme), holding as at March, 31, a total of 515,799 own shares (1.64% of the Company's share capital).

The average price target disclosed by the research that covers Novabase is 4.63 €, and the average upside is 73%.

Market Capitalization at the end of 3M20 is 83.8 M€, implying a ttm Price to Sales of 0.57x.

Free Float Velocity in 3M20 represented 33% (21% in 3M19) with a free float of 40%(1) in both periods.

APMs

Alternative Performance Measures

Net Cash

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 ability to meet its non-bank commitments.

The caption "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 3M20 and prior period, is analysed in the table on the right.

This APM and all its components contain no estimates or judgments made by Management.

	FY19	3M20
Cash and cash equivalents	48,755	81,308
Debt securities - Non-Current	403	-
Debt securities - Current	2,793	2,316
Treasury shares held by the Company (1)	972	1,354
Bank borrowings - Non-Current	(13,600) (12,450)
Bank borrowings - Current	(5,194) (5,225)
Net Cash (Euro thousands)	34,129	67,303

	FY19	3M20
Treasury shares held by the Company	376,611	507,293
Closing price @ last tradable day (€)	2.580	2.670
Treasury shares held by the Company (Euro thousands)	972	1,354

(1) Is 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. 18

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