Alkemy

Earnings Release • May 15, 2023

Informazione Regolamentata n. 20116-17-2023		Data/Ora Ricezione 15 Maggio 2023 17:42:35	Euronext Star Milan
Societa'	:	ALKEMY
Identificativo Informazione Regolamentata	:	177019
Nome utilizzatore	:	ALKEMYN03 - Benasso
Tipologia	:	REGEM
Data/Ora Ricezione	:	15 Maggio 2023 17:42:35
Data/Ora Inizio Diffusione presunta	:	15 Maggio 2023 17:42:36
Oggetto	:	Interim Financial Report at March 31st, 2023	Alkemy S.p.A. – The BoD approved the
Testo del comunicato

Vedi allegato.

ALKEMY S.P.A. IN THE FIRST QUARTER 2023 TURNOVER (+20%) AND ADJ. EBITDA (+10%) GROWTH OPERATING CASH FLOW AT €2.6 MILLION

In Q1 2023 the relevant turnover increase was driven by change in Group perimeter and organic growth. Adjusted EBITDA with a double-digit growth and ongoing focus on strengthening strategic competence centers and Go-to-Market. Amendment to the corporate financial calendar.

The Board of Directors of Alkemy S.p.A. today approved the Interim Financial Report at March 31st, 2023.

• Q1 2023 consolidated turnover at Euro 28.0 million, +19.7% if compared to Euro 23.4 million in Q1 2022, mainly thanks to the change in Group perimeter and to the partial recovery of organic growth.
• Q1 2023 Adjusted EBITDA¹ at Euro 2.5 million, +10.1% if compared to Q1 2022 (Euro 2.3 million). Q1 2023 Adjusted EBITDA margin² at 9.0%, -0.8 percentage points if compared to Q1 2022 (9.8%), mostly due to higher operating costs.
• Q1 2023 EBIT at Euro 1.3 million, -20.3% compared to Euro 1.6 million in Q1 2022, mostly due to higher amortization costs linked to investments made starting from Q2 2022.
• Q1 2023 EBT at Euro 0.8 million (Euro 1.6 million in Q1 2022), mainly as a result of higher financial charges in the period due to the higher financial debts compared to the same period of 2022 and to the increase in market interest rates.
• Group Net Financial Position (NFP) at March 31st, 2023 was negative at Euro -34.8 million, slightly decreasing compared to the December 31st, 2022, NFP (Euro -34.1 million), mostly as a consequence of the recognition of new leasing payables.

Milan, May 15th, 2023 – The Board of Directors of Alkemy S.p.A. ("Alkemy", "the Company" or "the Group"), a leading company in the business model evolution of large and medium-sized companies listed on Euronext STAR Milan of Borsa Italiana, today approved the Interim Financial Report at March 31st, 2023.

Despite the persistence of widespread uncertainty on the national and European economic markets, in Q1 2023 Alkemy recorded significant growth in terms of turnover +19.7% compared to Q1 2022. The focus on the project portfolio optimization led to an Adjusted EBITDA growth of

² Adjusted EBITDA margin is the ratio between Adjusted EBITDA and consolidated turnover.

¹ Adjusted EBITDA: Net operating revenues minus operating costs excluding non-recurring expenses and income.

+10.1% compared to the Q1 2022 figure and an EBITDA margin of 9.0%, down by 0.8 percentage points compared to the Q1 2022 figure (9.8%).

"In the first quarter of 2023, Alkemy recorded a significant growth in turnover, the result of both recovery of organic growth and positive contribution of Innocv, which joined the Group in the third quarter of last year. This is an important first step in a year in which, despite signs of uncertainty persist on the market, we have already signed agreements with primary customers," commented the CEO, Duccio Vitali.

"In these first three months, Alkemy has once again demonstrated its ability to integrate new companies within the Group, managing to accelerate their growth path already from the first months after the acquisition. With this awareness, we therefore continue the search for target companies with the aim of strengthening our positioning in reference geographies, further expanding our offer of 360° solutions for our customers with a view to digital transformation," added Alessandro Mattiacci, Chairman of the Board of Directors.

Financial Data Analysis

+19.7% Group Turnover Growth in Q1 2023, at Euro 28.0 million, compared to Euro 23.4 million in Q1 2022. This result is mostly due to a combination of Group perimeter expansion and organic growth.

Revenues in Italy, representing the 61.7% of total turnover, grew +5.8% YoY at Euro 17.3 million (Euro 16.3 million in Q1 2022). The positive result of the Italian companies was due to organic growth resulting from the continuous monitoring of key customers in the country.

In Q1 2023, Group foreign companies recorded an overall turnover growth of +51.6%, as a result of the inclusion of Innocv, a Madrid-based company acquired in Q3 2022, in the Group perimeter and of the contribution of the positive performance of all other foreign entities.

Q1 2023 Adjusted EBITDA at Euro 2.5 million, +10.1% if compared to Q1 2022 (Euro 2.3 million), mostly thanks to the higher Group turnover.

Q1 2023 Adjusted EBITDA margin was 9.0%, down by 0.8 pps compared to Q1 2022 (9.8%). In particular, net of non-recurring costs, we note that personnel costs increased by +26.1%, mostly as a consequence of the growth in the average number of employees in the quarter (926 units in Q1 2023, compared to 750 units in Q1 2022), partly offset by a less-than-proportional increase in costs for services (+14.9%) compared to revenues.

Q1 2023 EBIT at Euro 1.3 million, was down by -20.3% compared to Euro 1.6 million in Q1 2022, due to higher depreciation and amortization in the quarter, following investments made starting from Q2 2022. Q1 2023 EBT at Euro 0.8 million was down by -49.4% compared to Euro

1.6 million in Q1 2022. Such trend was mostly due to higher financial debts compared to Q1 2022 and the increase in interest rates.

Q1 2023 Net Result for the Period at Euro 0.7 million, down -40.1% compared to Euro 1.1 million in Q1 2022.

Operating cash flow at March 31st , 2023, was positive at Euro 2.6 million, down by Euro 2.8 million compared to Euro 5.4 million in Q1 2022, mostly as a consequence of the Net Working Capital dynamics.

Group Net Financial Position (NFP) on March 31st, 2023, was negative at Euro -34.8 million, slightly declining compared to December 31st, 2022, NFP at Euro -34.1 million. The change (Euro -0.7 million) is mostly due to:

• Euro +1.7 million decline in outstanding bank loans, mainly as a result of the combined provisions (i) of the advance invoice transactions for the period, with a total of € +0.8 million repaid, (ii) of the repayment of the envisaged installments of the amortization plans for +1.0 million Euros and (iii) the obtaining of a new medium/long-term subsidized loan for -0.1 million Euro;
• Euro -1.5 million, linked to the increase in financial payables for leasing (IFRS 16), mainly due to the signing of new leasing contracts;
• Euro -0.7 million, related to the decrease of cash and cash equivalents;
• Euro -0.2 million, following the increase in put option and earn-out payables, due to interests accrued in the period.

Outlook

At the date of approval of the Consolidated Interim Report at March 31st , 2023, it is believed that the evolution of operations in the current year will still depend mainly on external factors largely related to the evolution of the war in Ukraine, to inflation and to the consequent monetary policy of increasing interest rates. In fact, the economic effects deriving from the Ukrainian war are helping to fuel cost inflation, mostly driven by the widespread increase in the prices of energy products: there are therefore significant negative impacts on almost all economic sectors and, in general, on company expectations, which are not always positive as a result of the general uncertainty of the markets. At present, limited significant evidence has been found on the customers of the Alkemy Group, except that some are experiencing greater direct impacts from cost inflation, with therefore possible repercussions on the purchase of services offered by the Group.

Taking into account the results achieved in the first months of 2023 and the current state of progress of the orders in the portfolio and the new contracts activated, barring the occurrence

of further aggravating events, currently unforeseeable, it is confirmed that the Group's expectations are positive and confirm the expected organic growth, both in revenues and in margins.

Amendment to the Calendar of Corporate Events

The Board of Directors of Alkemy S.p.A., today also approved the following integration to the 2023 Calendar of Corporate Events:

• August 4th, 2023: Board of Directors' Meeting. Disclosure of certain operating economic results as of June 30th, 2023 (Consolidated Revenues and Adjusted EBITDA), not subject to auditing.

The Manager in charge of preparing the corporate accounting documents, Claudio Benasso, pursuant paragraph 2 of art. 154-bis of the Consolidated Law of Finance (TUF), declares that the accounting information contained in this press release corresponds to the documentary results, books, and records accounting.

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The financial schemes in annex are in line with the contents of the Interim Financial Report at March 31 st, 2023, approved today by the Board of Directors.

The Interim Financial Report at March 31st , 2023, will be made available to the public, in accordance with the law, at the registered office, located in Via San Gregorio 34, Milan (MI), in the "Investor Relations" section of the Company's website (www.alkemy.com) and on the eMarket Storage mechanism ().

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Q1 2023 results will be presented to the financial community in a dedicated conference call that will be hosted on Tuesday May 16th, 2023, at 9:30 AM (CEST)

To connect to the conference call, you may use the most appropriate among the following dial-in numbers: IT: +39 02 36213011

UK: +44 1212 818003 Switzerland: +41 225954727 France: +33 170918703 Spain: +34 917699497 US: +1 718 7058794

Supporting slides will be made available on the Company website (www.alkemy.com) in the Investor Relations section prior to the call.

ANNEX

CONSOLIDATED PROFIT & LOSS OF ALKEMY GROUP

	Values in Euro/000
	Q1 2023	Q1 2022
Revenues	27,353	23,222
Other Proceeds	681	206
Total operating revenues	28,034	23,428
Costs for services, goods, and other operating costs	(11,792)	(10,256)
- of which non recurrent	(4)	-
Personnel costs	(14,002)	(10,887)
- of which non recurrent	(272)	-
Total operating costs	(25,794)	(21,143)
EBITDA	2,240	2,285
Adjusted EBITDA	2,516	2,285
D&A	(923)	(648)
Provisions and write-downs	(13)	-
Operating result	1,304	1,637
Income (charges) from equity investments	-	-
Other financial income	178	204
Other financial charges	(698)	(291)
Profit (Loss) before taxes	784	1,550
Income taxes	(134)	(465)
Profit (Loss) for the period	650	1,085
Attributable to:
- Group	645	1,084
- Minorities	5	1

CONSOLIDATED BALANCE SHEET OF ALKEMY GROUP

	Values in Euro/000
Assets	Mar. 31st , 2023	Dec. 31st , 2022
Non-current assets
Property, plant, and equipment	2,207	2,209
Rights of Use assets	6,117	4,633
Goodwill	54,870	54,868
Intangible assets	1,983	1,934
Minorities	5	5
Other financial assets	550	588
Deferred tax assets	2,248	2,206
Other non-current receivables and assets	267	267
Total non-current assets	68,247	66,710
Current assets
Trade receivables	39,143	41,541
Other financial assets	291	291
Tax credits	2,558	2,065
Other current assets	2,169	2,011
Cash and Cash equivalents	8,379	9,115
Total current assets	52,540	55,023
Total assets	120,787	121,733

CONSOLIDATED BALANCE SHEET OF ALKEMY GROUP

	Values in Euro/000
Liabilities and Group Equity	Mar. 31st , 2023	Dec. 31st , 2022
Equity
Share Capital	596	596
Reserves	42,533	36,828
Net income (Loss) for the period	645	5,583
Group Equity	43,774	43,007
Minorities	406	399
Total Equity	44,180	43,406
Non-current liabilities
Financial liabilities	12,125	13,081
Rights of Use liabilities	4,563	3,425
Put option and earn-out liabilities	13,627	13,436
Employees' leaving entitlement	5,779	5,543
Provisions	99	100
Deferred Tax liabilities	128	128
Total non-current liabilities	36,321	35,713
Current liabilities
Financial liabilities	8,249	9,023
Rights of use liabilities	1,693	1,345
Put option and earn-out liabilities	3,260	3,225
Trade payables	14,159	16,217
Tax liabilities	2,046	1,622
Other liabilities	10,879	11,182
Total Current liabilities	40,286	42,614
Total liabilities	76,607	78,327
Total liabilities and Group Equity	120,787	121,733

CONSOLIDATED CASH FLOW STATEMENT OF ALKEMY GROUP

	Values in Euro/000
	Mar. 31st , 2023	Mar. 31st , 2022
Operating activities
Net profit (loss) for the period	650	1,085
Financial income	(178)	(204)
Financial charges	698	291
Income taxes	134	465
D&A	923	648
Provisions and write-downs	13	-
Share-based compensation	40	111
Change in trade receivables	2,384	4,989
Change in trade payables	(2,235)	(664)
Decrease (increase) in other assets	24	(385)
Increase (decrease) in other liabilities	123	(947)
Cash flow generated (absorbed) by operating activities	2,576	5,389
Paid financial charges	(184)	(54)
Paid income taxes	(133)	(247)
Net Cash flow generated (absorbed) by operating activities	2,259	5,088
Investment activities
(Investment) disinvestment of tangible and intangible assets	(492)	(646)
Decrease (increase) of financial assets	-	(45)
Net Cash flow generated (absorbed) by investment activities	(492)	(691)
Financing activities
Change in financial debt	(1,773)	(206)
Change in IFRS 16 financial liabilities	(476)	(394)
Dividends to minorities	(214)	(101)
Put options repayment	(40)	(1,730)
Net Cash Flow generated (absorbed) by financial activities	(2,503)	(2,431)
Increase (decrease) of net cash position for the period	(736)	1,966
Cash at the beginning of the period	9,115	10,458
Cash at the end of period	8,379	12,424

Alkemy S.p.A. works to improve the market positioning and competitiveness of large and mediumsized companies by stimulating the evolution of their business models in line with technological innovation and consumer behavior. Alkemy integrates skills and expertise in the areas of Consulting, Data & Analytics, Digital Marketing, Brand and Product Design and Technology, with an offering designed for our post-digital environment and covering the entire chain of value, from strategy to implementation.

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Contacts

Investor Relations

Emanuela Salvini | emanuela.salvini@alkemy.com | +39 320 1796 890