Alkemy

Investor Presentation • Nov 14, 2023

9M 2023 RESULTS

14.11.2023

Disclaimer

• This document has been prepared by Alkemy S.p.A. (the "Company") for information purpose only, it contains only summary information and, therefore, it is preliminary in nature. Furthermore it has been drafted without claiming to be exhaustive.
• This presentation ("Presentation") and the information set out herein ("Information") are strictly confidential and, as such, has not been prepared with a view to public disclosure and, except with the prior written consent of the Company, it cannot be used by the recipient for any purpose nor can it be disclosed, copied, recorded, transmitted, further distributed to any other person or published, in whole or in part, by any medium or in any form for any purpose.
• This Presentation may contain financial information and/or operating data and/or market information regarding business and assets of the Company and its subsidiaries. Certain financial information may not have been audited, reviewed or verified by any independent accounting firm.
• Therefore, the recipient undertakes vis-à-vis the Company (i) to keep secret any information of whatever nature relating to the Company and its affiliates including, without limitation, the fact that the information has been provided, (ii) not to disclose any Information to anyone, (iii) not to make or allow any public announcements or communications concerning the Information and (iv) to use reasonable endeavours to ensure that Information are protected against unauthorized access.
• THIS PRESENTATION AND ANY RELATED ORAL DISCUSSION DO NOT CONSTITUTE AN OFFER TO THE PUBLIC OR AN INVITATION TO SUBSCRIBE FOR, PURCHASE OR OTHERWISE ACQUIRE ANY FINANCIAL PRODUCTS, AS DEFINED UNDER ARTICLE 1, PARAGRAPH 1, LETTER (T) OF LEGISLATIVE DECREE NO. 58 OF 24 FEBRUARY 1998, AS AMENDED. Therefore, this document is not an advertisement and in no way constitutes a proposal to execute a contract, an offer or invitation to purchase, subscribe or sell for any securities and neither it or any part of it shall form the basis of or be relied upon in connection with any contract or commitment or investments decision whatsoever. The Company has not prepared and will not prepare any prospectus for the purpose of the initial public offering of securities. Any decision to purchase, subscribe or sell for securities will have to be made independently of this Presentation. Therefore, nothing in this Presentation shall create any binding obligation or liability on the Company and its affiliates and any of their advisors or representatives.
• Likewise, this Presentation is not for distribution in, nor does it constitute an offer of securities for sale in the United States of America, Canada, Australia, Japan or any jurisdiction where such distribution is unlawful, (as such term is defined in Regulation S under the United States Securities Act of 1933, as amended (the "Securities Act"). Neither this Presentation nor any copy of it may be taken or transmitted into the United States of America, its territories or possessions, or distributed, directly or indirectly, in the United States of America, its territories or possessions or to any US person. Any failure to comply with this restriction may constitute a violation of United States securities laws.
• No representation or warranty, express or implied, is or will be given by the Company as to the accuracy, completeness or fairness of any Information provided and, so far as is permitted by law and except in the case of fraud by the party concerned, no responsibility or liability whatsoever is accepted for the accuracy or sufficiency thereof or for errors, omissions or misstatements, negligent or otherwise, relating thereto. In particular, but without limitation, no representation or warranty, express or implied, is or will be given as to the achievement or reasonableness of, and no reliance may be placed for any purpose on the accuracy or completeness of, any estimates, targets, projections or forecasts and nothing in these materials should be relied upon as a promise or representation as to the future.
• The information and opinions contained in this document are provided as at the date hereof and are subject to change without notice. The recipient will be solely responsible for conducting its own assessment of the information set out in the Presentation. Neither the Company and its affiliates, nor any of their advisors or representatives shall be obliged to furnish or to update any information or to notify or to correct any inaccuracies in any information. Neither the Company and its affiliates, nor any of their advisors or representatives shall have any liability to the recipient or to any of its representatives as a result of the use of or reliance upon the information contained in this document.
• Certain Information may contain forward-looking statements which involve risks and uncertainties and are subject to change. In some cases, these forward-looking statements can be identified by the use of words such as "believe", "anticipate", "estimate", "target", "potential", "expect", "intend", "predict", "project", "could", "should", "may", "will", "plan", "aim", "seek" and similar expressions. The forecasts and forward-looking statements included in this document are necessarily based upon a number of assumptions and estimates that are inherently subject to significant business, operational, economic and competitive uncertainties and contingencies as well as assumptions with respect to future business decisions that are subject to change. By their nature, forward-looking statements involve known and unknown risks and uncertainties, because they relate to events, and depend on circumstances, that may or may not occur in the future. Furthermore, actual results may differ materially from those contained in any forward-looking statement due to a number of significant risks and future events which are outside of the Company's control and cannot be estimated in advance, such as the future economic environment and the actions of competitors and others involved on the market. These forward-looking statements speak only as at the date of this Presentation. The Company cautions you that forward looking-statements are not guarantees of future performance and that its actual financial position, business strategy, plans and objectives of management for future operations may differ materially from those made in or suggested by the forward-looking statements contained in this Presentation. In addition, even if the Company's financial position, business strategy, plans and objectives of management for future operations are consistent with the forward-looking statements contained in this Presentation, those results or developments may not be indicative of results or developments in future periods. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
• By receiving this Presentation, you acknowledge and agree to be bound by the foregoing terms, conditions, limitations and restrictions.

Alkemy was founded in 2012 with the aim of supporting the top management of large companies in the process of digitizing their business model.

The market in which Alkemy insists is the digital transformation market which today is worth over 6 billion Euro in Italy and grows at a rate of about 9% per year.

In this market, Alkemy has developed a differentiated positioning that has allowed it to grow with a CAGR of 30% (>3x the market), to move from the 23 starting resources to a team of over 900 people and a turnover of 107M€ in 2022.

Alkemy has successfully used the M&A lever (10 acquisitions) using the IPO proceeds in less than nine months, and the EBITDA growth of the four acquisitions made in Italy from 2013 to 2020 was up to +500%.

With a new organization and a dedicated Go-to-Market team, Alkemy is now focusing on the industrialization and expansion of the business scale, resulting in strong organic growth and higher marginality.

We help companies to evolve their business in the post-digital scenario

FINANCIAL HIGHLIGHTS

€M	9M 2023	9M 2022
Turnover	85.9	74.7	+15% vs. 9M 2022, mainly due to change in Group perimeter, > and to the strong focus on top clients, supported by the Go to-Market strategy.
Adj. EBITDA	9.0	7.9	+14% vs. 9M 2022. EBITDA Adj. margin at 10.5%, broadly in > line with 9M 2022.
EBIT	4.8	5.1	-7% vs. 9M 2022, mainly due to higher amortization costs > linked to investments made in H2 2022. EBIT margin at 5.6%, down from 6.8% in 9M 2022.
EBT	3.3	5.0	-35% vs. 9M 2022, due to higher financial charges following > higher financial debt and increased interest rates.
Group Net Income	2.4	3.6	-35% vs. 9M 2022. >
Net Operating Cash Flow	5.9	3.7	+2.2 €M vs. 9M 2022 mainly due to higher non-cash > adjustments, lower deferred income and NWC dynamics.
NFP	-34.5	FY 2022 -34.1	st -0.4 €M since December 31 , 2022, due to higher IFRS 16 > financial payables and bank loans, partially offset by the decrease in put-options liabilities following the exercise of the purchase option for the remaining 49% of DGI's share capital in Q3.

REVENUES

(1)Revenues 2013-14-15-16 are Management estimates and are not audited, following the introductions of IFRS in 2018.

ALKEMY TURNOVER DEEP DIVE

› 9M 2023 revenues at €M 85.9, +15% vs. 9M 2022 (€M 74.7). The result is due to the change in Group perimeter and to the Group of organic growth.

67.5 74.7 85.9 9M REVENUES(€M) – IAS /IFRS Growth 22-23 +15%

› 9M 2023 Italian turnover at €M 52.4, +5% vs. €M 50.1 in 9M 2022. The growth is

• mainly due to the focus on existing clients.

› International revenues in 9M 2023 at €M 33.5, up by 36% vs. €M 24.6 in 9M 2022, mainly due to change in Group perimeter and supported by organic growth.

› Revenues generated by clients in the Consumer Goods & Retail, TMT and Financial Services in the period generated 56% of the total Group turnover.

ALKEMY GROWTH EVOLUTION (€000) – IAS /IFRS

Adj. EBITDA(1)

9M 2023 CASH FLOW

9M 2023 Cash Flow generation - (€000)

• › 9M 2023 Gross Cash Flow at €M 8.2, +0,4 €M vs. 9M 2022 mainly due to higher non-cash adjustments for the period.
• › FCFO at €M 5.9, equal to 66% of Adj. EBITDA, +62% compared to 9M 2022, mainly due to non-cash adjustments and change in other assets/liabilities due to lower deferred income for the period.
• › Capex -13% compared to 9M 2022 and equal to 2% of Revenues.
• › Change in cash over 9M 2023 is €M +0.1.

Initial Cash	9.1 €M
Delta Cash	+0.1 €M
Final Cash	9.2 €M

NET FINANCIAL POSITION BRIDGE AND DETAILS

Net Financial Position Bridge 9M 2023 (€M)

9

NET TRADE WORKING CAPITAL DYNAMICS

Net Trade Working Capital over Last 12 Months' Revenues (%)

• 9M 2023 Net Trade Working capital is 14% higher than 9M 2022, and its incidence over last 12 months' revenues was broadly in stable.

• 9M 2023 cash generation from Net Trade Working Capital decrease (€M -0.3 million compared to €M 1.7 in 9M 2022), due to payables and receivables dynamics.

• 9M 2023 DSO at 105, -5% vs. 9M 2022; 9M 2023 DPO at 83, - 11% vs. 9M 2022.

Net Trade Working Capital (€M)

Cash Conversion Cycle Details (days)

› 9M 2023 Revenues at €M 85.9, up by 15% compared to €M 74.7 of 9M 2022. The increase is mostly related to the change in the Group perimeter. Italian revenues up by 5% YoY, mainly related to the focus on the existing client base. Foreign turnover up by 36%, thanks to the inclusion of InnoCV in the Group perimeter and to the performance of foreign subsidiaries.

› Adj. Operative costs increased (impact on revenues at 90% in line with 9M 2022). Services costs increased by 8% YoY but reduced the impact on revenues by 3.1 pps. Personnel costs increased incidence on revenues by 3.6 pps compared to 9M 2022, due to the higher average FTE for the period (from 783 in 9M 2022 to 940 in 9M 2023), mainly due to the change

› 9M 2023 Adj. EBITDA at €M 9.0, +14% compared to €M 7.9 in 9M 2022, with Adj. EBITDA margin at 10.5%, broadly in line with 9M 2022 (10.6%).

› 9M 2023 EBIT is equal to €M 4.8, -7% compared to €M 5.1 in 9M 2022, mostly due to higher D&A linked to investments made in 2022, and to higher nonrecurrent costs mainly driven by personnel one-offs.

• in Group perimeter.
• higher interest rates.
• declined due to lower net profit.

› 9M 2023 EBT at €M 3.3, -35% compared to €M 5.0 in 9M 2022, mainly because of higher financial charges due to higher financial debts and

› Group Net Profit is €M 2.4 -35% vs €M 3.6 in 9M 2022. Taxes for the period

9M 2023 P&L – IAS/IFRS

Consolidated Profit & Loss

Profit and Loss (€000) - IAS/IFRS	9M 2022	9M 2023
Revenues	74,660	85,874
Service costs, consum. & goods	(34,449)	(36,938)
- of which non-recurrent	(169)	(22)
Personnel	(32,732)	(40,754)
- of which non-recurrent	(256)	(772)
Adj. EBITDA	7,904	8,976
% Revenues	10.6%	10.5%
EBITDA	7,479	8,182
% Revenues	10.0%	9.5%
D&A	(2,160)	(3,050)
Bad debts/ claims/ provisions	(210)	(356)
EBIT	5,109	4,776
% Revenues	6.8%	5.6%
Financial charges	(123)	(1,511)
EBT	4,986	3,265
Taxes	(1,351)	(912)
% Tax rate	27.1%	27.9%
Net Profit (Loss)	3,635	2,353
% Revenues	4.9%	2.7%
o/w Minorities	(5)	(23)
o/w Group Net Profit (Loss)	3,640	2,376

9M 2023 BALANCE SHEET – IAS/ IFRS

› Net Invested Capital at €M 80.6 (€M 77.5 in FY 2022) consisted of approx. € 25.4 million of Net Trade Working Capital (€M 25.3 in FY 2022), €M 68.5 of fixed assets (€M 66.7 FY 2022) of which €M 54.9 of Goodwill (in line with FY 2022) and €M 6.6 of IFRS 16 rights of use (€M

› Shareholders' equity increased in the period by €M 2.7 since 31 Dec. 2022 (+6%), mainly due to the positive result of the period (€M +2.4).

- 4.6 in FY 2022).

• options and earn out (€M +2,7).

› Net Financial Position at September 30 th, 2023, negative by €M -34.5 (ante-IFRS 16 at €M -27.7) declining by €M -0.4 compared to FY 2022. The variation is mainly due to: (i) increase in bank loans, as a net impact of additional debt linked to the perfectioning of the acquisition of the remaining 49% of DGI, and instalments repaid in the period (€M -0.9); (ii) IFRS 16 impact (€M -2.0); (iii) decrease in put

Consolidated Balance Sheet

Balance Sheet (€000) - IAS/IFRS	FY 2022	9M 2023
Tangible assets	2,209	2,066
Intangible assets	6,567	8,644
-Of which rights of use (IFRS16)	4,633	6,622
Goodwill	54,868	54,867
Financial assets	3,066	2,927
Fixed Assets	66,710	68,504
Inventories	-	-
Trade Receivables	41,541	39,036
Trade Payables	(16,217)	(13,661)
Net Trade Working Capital	25,324	25,375
Other Current Assets	4,076	5,740
Other Current Liabilities	(13,032)	(12,719)
Employees' leaving entitlement	(5,543)	(6,306)
Total Capital Invested	77,535	80,594
Total Equity	43,406	46,128
o/w Group Equity	43,007	45,752
o/w Minorities	399	376
Cash & current financial assets	(9,406)	(9,323)
Bank Debts	22,104	23,008
Put Option Liabilities	16,661	14,010
Net Financial Position ex-IFRS 16	29,359	27,695
Other Financial Debts (IFRS16)	4,770	6,771
Net Debt (Cash)	34,129	34,466
Total Funds	77,535	80,594

9M 2023 CASH FLOW GENERATION – IAS/IFRS

› 9M 2023 Gross Cash Flow at €M 8.2, €M +0.4 vs. €M 7.8 in 9M 2022.

› 9M 2023 Net operating cash flow at €M 5.9 compared to €M 3.7 of 9M 2022. The increase of €M 2.2 is mainly related to higher non-cash adjustments, lower deferred income and Net Working Capital dynamics.

› 9M 2023 Ordinary Capex of the period is €M 1.5 compared to €M 1.7 of 9M 2022, and stable at 2% of Revenues. 9M 2023 Free Cash Flow is equal

-

• to €M 4.7, compared to €M -0.7 in 9M 2022.
• 9M 2022.

› Total change in cash for the period was €M +0.1 compared to -€M 0.9 in

Consolidated Cash Flow

Cash Flow Statement (€000) - IAS/IFRS	9M 2022	9M 2023
Net Profit (Loss)	3,635	2,353
Adjustments (cash tax, interest and other)	1,474	2,423
Non-cash items	2,645	3,382
Gross Cash Flow	7,754	8,158
Change in trade receivables	1,507	2,188
Change in trade payables	183	(2,457)
Total change in NTWC	1,690	(269)
Total change in other asset/liabilities	(5,791)	(1,988)
Operating Cash Flow	3,653	5,901
Capex	(1,690)	(1,470)
Other non-current assets	1,735	207
Free Cash Flow before Acquisition	3,698	4,638
Acquisitions	(4,361)	-
Free Cash Flow	(663)	4,638
Change in treasury shares	(435)	(120)
Dividends to minorities	(542)	(1,016)
Change in bank & fin. Debts	4,644	819
IFRS 16 effect	(1,244)	(1,513)
Changes in Equity	-	-
Changes on other financial assets	-	-
Change in put/options	(2,672)	(2,686)
Change in Cash	(912)	122
Initial Cash	10,458	9,115
Final Cash	9,546	9,237

OUTLOOK

• The war in Ukraine, the beginning of the conflict in Israel, the inflation trends and the following monetary policy are having a direct impact on many economic sectors and on the expectations of companies. Such expectations are affected by the uncertainty that is troubling the markets.

• At present, limited impact has been recorded on Alkemy Group clients, except that some may be more indirectly influenced by the difficulties generated by the cost and interest rates inflation, with possible repercussions on the purchase of the services offered by the Group.

• Considering the results achieved in 9M 2023, barring the occurrence of further aggravating events, currently not foreseeable, it is confirmed that the Group's expectation is to continue growing organically and increasing margins.

ALKEMY SHAREHOLDING STRUCTURE

A PUBLIC COMPANY LISTED ON EURONEXT STAR MILAN

A SOLID CORPORATE GOVERNANCE

BOARD OF DIRECTORS BOARD OF STATUTORY AUDITORS

Chairman	Alessandro Mattiacci	Chairman	Gabriele Gualeni
Chief Executive Officer	Duccio Vitali	Standing Auditor	Mauro Dario Bontempelli
Director	Riccardo Lorenzini	Standing Auditor	Daniela Bruno
Director	Massimo Canturi	Alternate Auditor	Marco Garrone Mara Sartori
Independent Director	Giulia Bianchi Frangipane	Alternate Auditor
Independent Director	Ada Villa
Independent Director	Serenella Sala

• The Board of Directors, the Board of Statutory Auditors and the Independent Audit Firm were appointed by the Shareholders' Meeting on April 26, 2022.

Alkemy innovation_enabler Via San Gregorio 34 20124 Milano, Italy Tel: +39 02 92894 1 - Fax: +39 02 92894 500 info@alkemy.com Alkemy enabling evolution

INVESTOR RELATIONS ir@alkemy.com