(Translation from the Italian original which remains the definitive version)

Alkemy S.p.A.

Interim Financial Report at 30 June 2024

Alkemy Group

Parent Alkemy S.p.A. Registered office in Milan, at Via San Gregorio 34 Share Capital Euro 595,534.32 VAT no.: 05619950966 Milan Company Registration no. 1835268

Corporate bodies of Alkemy S.p.A. 3
Highlights 4
The Group and its business 5
Group structure 6
Business units 7
Report on Operations 10
H1 2024 performance 10 Reclassified income statement 11 Reclassified statement of financial position 13 Main financial figures 14 Significant events during the period 15 Evolution of demand and performance of the markets on which the Group operates 16 Competitors 18 Alkemy on the stock market 19 Description of the main risks and uncertainties to which the Group is exposed 23 Financial management 26 Investments 27 Research and development 27 Treasury shares 27 Events after the reporting period 28 Outlook 28
Condensed interim consolidated financial statements at 30 June 2024 29
Income statement 30 Statement of comprehensive income 31 Statement of financial position 32 Statement of cash flows 34 Statement of changes in equity 35 Notes to the condensed interim consolidated financial statements 36 Annex 1 – The Alkemy Group companies at 30 June 2024 71 Annex 2 - Financial schedules with separate indication of related party transactions 72
Attestation on the condensed interim consolidated financial statements 75
Independent auditors' report 76

Corporate bodies of Alkemy S.p.A.

Board of Directors

Alessandro Mattiacci	Chairman
Duccio Vitali	Chief Executive Officer
Massimo Canturi Riccardo Lorenzini	Director Director

Giulia Bianchi Frangipane	Independent Director
Serenella Sala Independent Director
Ada Ester Villa Independent Director

Board of Statutory Auditors

Gabriele Gualeni	Chairman
Mauro Bontempelli	Standing Auditor
Daniela Bruno	Standing Auditor
Marco Garrone	Alternate Auditor
Maria Luisa Sartori	Alternate Auditor

Independent Auditors

KPMG S.p.A.

Highlights¹

Below are the performance data of the Alkemy Group in H1 2024:

	Figures in thousands of euros
	H1 2024	H1 2023
Net revenue (1)	58,237	57,477
Adjusted gross operating profit (EBITDA) (2)	4,759	5,979
Adjusted operating profit (3)	2,126	3,673
Profit for the period	(855)	1,409
Average number of employees	903	934

	Figures in thousands of euros
	H1 2024	H1 2023
Italy net revenue	36,915	35,559
Abroad net revenue	21,322	21,918
Net revenue	58,237	57.477

	Figures in thousands of euros
	30 Jun. 2024	31 Dec. 2023
Net invested capital	78,400	79,489
Net financial debt	(31,093)	(31,773)
Equity	47,307	47.716

⁽¹⁾ Net revenue is defined as the sum of revenue and other income

⁽²⁾ Adjusted gross operating profit is the value determined by deducting the Costs for services, goods and other operating costs and Personnel expense, with the exclusion of non-recurring costs, from revenue.

⁽³⁾ Adjusted operating profit is adjusted gross operating profit less amortisation, depreciation, provisions and impairment losses.

The Group and its business

Alkemy S.p.A. (hereinafter also "Alkemy" or the "Parent") is a leading company in the digital transformation segment in Italy, listed on the STAR segment of the Borsa Italiana EURONEXT MILAN market. Alkemy enables the evolution of enterprises' business defining the relevant strategy through the use of technology, data and creativity. The aim is to improve the operations and services supplied by large and medium-sized enterprises, stimulating the evolution of their business model hand-inhand with technological innovation and consumer habit. Alkemy develops innovative projects throughout the chains of the various segments, such as, for example, telecommunications, media, consumer services, financial services and utilities, combining advanced technologies with innovative design, big data and creative communication.

The Parent's competitive advantage is its capacity to integrate different competences, intervening as a single player in the Customer's processes and operations, supplying multiple services that can impact the whole of the value chain. Indeed, Alkemy manages extensive projects aimed at transforming and evolving its customers' business, assisting them from the definition of the strategy to be pursued through to the relevant implementation and subsequent management.

Alkemy has now entered its eleventh year, boasting an ever more extensive alchemy of integrated competences in the areas of Consulting, Communication, Performance, Technology, Data & Analytics and Design, which form a professional community numbering over 1000 people offering different experiences and abilities but who are very much united in their values and business culture. Alkemy is today an international business operating in Italy, Spain, Mexico, the USA and the Balkans, established on the basis of a partnership model with customers to enable innovation and growth through digital leverage. Alkemy's aim is, in fact, to construct a long-term relationship with customers, acting not as simple suppliers of services, but rather as an integrated partner to be engaged continuously, in support of programmes of change, transformation and acceleration.

In enabling the innovation process of its customers' business model and, accordingly, their competitiveness in the various industrial segments, Alkemy ultimately seeks to contribute towards the evolution and development of the whole country system.

Alkemy currently has 11 offices: in addition to the Milan headquarters, it also operates in Turin, Rome, Naples, Potenza, Cagliari, Rende (Cosenza), Madrid, Belgrade, Mexico City and New York.

December 2017 saw Alkemy début on the Borsa Italiana AIM Italia market to gather the capital necessary to finance the growth and expansion of the corporate competences, leaving control over the business with the managers and consequently guaranteeing independence and the possibility of perpetrating the vision.

From when it was listed, in just two years, Alkemy has managed to almost double its turnover and in December 2019, it finalised the switch to Borsa Italiana's main market, in the STAR segment dedicated to medium-sized enterprises that undertake to meet standards of excellence in terms of transparency, corporate governance and liquidity.

Group structure

In just a few years, Alkemy has successfully gained standing as a leader on the digital transformation market, growing both organically and through external lines with acquisitions.

At 30 June 2024, the Alkemy Group structure is as follows:

Alkemy Play S.r.l.: company established in 2017, operating in digital communication services for SMEs. The company controls a legal entity that operates in the development of IT and technological services in Serbia, Alkemy Play D.o.o..

Alkemy SEE D.o.o.: company based in Belgrade, established in 2016 with 30% of its share capital held by the Chief Executive Officer, a local entrepreneur; it operates in strategic consultancy and digital

advisory services. The company holds a 51% stake in Kreativa D.o.o..

Alkemy Iberia S.L.U.: formerly Ontwice Interactive Service S.L., merged with Alkemy Iberia S.L. in 2022 and taking on its name. The company is based in Madrid and operates in strategic consultancy and digital advisory and is one of Spain's most important digital agencies.

Alkemy South America S.L.: company established in 2021, based in Madrid that wholly owns the two Mexican companies based in Mexico City, Ontwice Interactive Services de Mexico S.A. and OIS Marketing Digital S.A., both operating on local markets in digital services, communication and media.

Experience Cloud Consulting S.r.l. ("XCC"): company acquired in April 2021, specialised in Cloud Computing solutions in CRM, Gold Consulting Partner of SalesForce, qualified to implement and develop integrated, multi-channel digital business solutions, from the CRM Cloud through to Marketing Automation, for B2B, B2C, eCommerce and Retail. The put & call options envisaged by contract, will allow the Parent to acquire the whole of the capital in the first half of 2026.

Design Group Italia ID S.r.l. ("DGI"): company operating in the field of 'innovation & design'. The put & call options envisaged by contract, enabled the Parent to acquire the entire capital in the third quarter of 2023. The Company controls a legal entity operating in the USA: DGI Corp..

Innocv Solution S.L.: , a company acquired in 2022, based in Madrid, and a market leader in Spain in the digital transformation segment, specifically in tech and data analytics.

Business units

As of January 2024, the Group has implemented a new organisation in Italy with a commercial structure divided into 5 Industries, whose managers are assigned the full management of all customers belonging to each business area and who are also accountable for project delivery, to be carried out by the various Competence Centres.

The five Industries are:

1) Entertainment & life style;
2) Energy & utilities;
3) Technology & telco;
4) Financial services & institutions;
5) Healthcare & pharma.

The Competence Centres, which represent and apply the different disciplines practised within the Group, are as follows:

Consulting: it analyses, designs and quantitatively assesses (business case and business plan) innovative solutions aiming to transform the customer's business model thanks to the use of the digital and omnichannel leverages, liaising closely with the CEOs and Executive

Managers to define innovative, alternative strategies to achieve significant results in the longterm;

Marketing & Media: with the aim of speeding up on-line performance, it offers Alkemy customers the know-how and most innovative tools to promote its on-line brands and products. It thus manages all planning and procurement activities for its customers on the main digital media, search engines and social media, determining the investments needed to strengthen and improve consumer perception of the brands and products and speeding up sales on proprietary and third party e-commerce channels, thereby overcoming conventional marketing approaches;
Tech: this is Alkemy's technological soul and it is specialised in the design, development and operation of technologies for the digital evolution of the B2B and B2C channels, front-end solutions, CRM, CMS, Portals, Apps, etc. The business unit consolidates and strengthens Alkemy's mission, reinforcing technological competences and the capacity to oversee one of the areas enjoying greatest growth and development: that of Digital Transformation;
Data & Analytics: it offers concrete support to businesses in order to improve their business performance through the analysis of data available (both that of CRM or of other internal systems, and data coming from all actions on the digital world) and the implementation of analytics models. The techniques used for data analysis range from traditional statistical analysis through to Advanced Analytics & Machine Learning, Real Time Next Best Action, Digital Customer Intelligence, Campaign Plan Optimisation, Data Environment Design, Implementation and Management;
Brand Experience: it plans, designs and realises the enterprises' brand experience, in a fully integrated manner, putting the end consumer right at the heart through digital and physical touchpoints and more "traditional" forms of communication, with the ultimate aim of generating value both for the customer itself and the end consumer. Developing and transforming the touchpoints into a unique experience, which communicates consistently a strong, innovative, distinctive brand, Alkemy offers its services as an essential partner; it assists the customer in preparing and structuring brand strategies and creativity, advertising campaigns, products or services for commercial businesses and, in general, communication with consumers; including through the management of the corporate digitisation process using a BPO (Business Process Outsourcing) model for the digital processes.

The Competence Centre Brand Experience has integrated the disciplines of DGI, a leader in Product, Service & Space Design: on a 'design thinking' basis, the company is dedicated to the design of services, physical and digital products that affect everyday life and physical spaces/environments in which people and brands can interact and share meaningful experiences; it operates in an omni-channel logic, with a focus on value creation through experiential innovation. Analysing customers' businesses, including their processes, culture and resources, it aims to foster additional commercial opportunities and innovate the end customer experience.

This 'client-driven' organisation confirms Alkemy's growing focus on customers' needs, with the aim of further developing the portfolio of companies served with an increase in the average size and duration of projects, through the widespread proposal of the Group's entire commercial offer, further characterised and tailored to the specificities of each Industry. This approach will be applied for the supply of all national companies, with expected improvements in terms of margin growth from 2025 onwards.

Report on Operations

H1 2024 performance

In the first half of 2024, the macroeconomic and geopolitical environment continues to be characterised by great uncertainty, especially as a result of unpredictable developments in geopolitical tensions, and shows generally moderate growth prospects, with unfavourable impacts on business and corporate expectations. It should be noted that in any case, Italian GDP is expected to grow by 1% in the current year and just over 1% in 2025, moderately accelerating from 2023 (source: Istat - The Outlook for the Italian Economy in 2024- 2025 - 6 June 2024). The reduction in interest rates expected in the last quarter of the year, as a result of the reduced inflationary trend, could bring benefits in this respect.

In this complex and low visibility macroeconomic context, the Alkemy Group's overall business performance, as detailed below, was reasonably non-negative.

Indeed, the Alkemy Group reported slightly higher net revenues compared to H1 2023 (+1.3%), due to the expected effect of the combination of a good business performance in Italy, which was partially offset by the expected impact of certain dynamics on specific customers of the subsidiaries Alkemy Iberia and Alkemy Latam. Conversely, there was a significant decrease in margins, resulting in an adjusted consolidated EBITDA of EUR 4,759 thousand (EUR 5,979 thousand in the comparative period, -20.4%), mainly due to the different mix of services sold. Operating cash flow generation in the first half of 2024 was EUR +3.1 million. The Net Financial Position as at 30 June 2024 amounted to EUR -31.1 million (EUR -31.8 million as at 31 December 2023), an improvement of EUR 680 thousand (2.14%).

Finally, it should be noted that at the end of the first half of 2024, the average number of Group employees decreased by 3% (903 compared to 934 at 30 June 2023).

Reclassified income statement

The Group's reclassified income statement for H1 2024, compared with the figures for H1 2023, is as follows2(4):

	Figures in thousands of euros
	H1 2024	H1 2023
Net revenue	58,237	57,477
Services, goods and other operating costs	(26,237)	(24,138)
Personnel expense	(27,241)	(27,360)
Adjusted gross operating profit (EBITDA)	4,759	5,979
Amortisation, depreciation and impairment losses	(2,633)	(2,306)
Adjusted operating profit	2,126	3,673
Net Financial income (expense)	(896)	(915)
Non-recurring expense	(2,108)	(୧୧୫)
Pre-tax profit (loss)	(878)	2,090
Income taxes	23	(681)
Profit (loss) for the period	(855)	1,409
Other comprehensive income recognised in equity	74	195
Comprehensive income for the period	(781)	1,604
Profit for the year attributable to non-controlling interests	2	(18)
Profit for the year attributable to the owners of the parent	(783)	1,622

The Group's consolidated economic situation for the first half of 2024 shows total net revenue of euro 58,237 thousand, compared to euro 57,477 thousand in the comparative period, with an increase of euro 760 thousand (+1.3%), which is the result of the combined effect of the increase in net revenue from the Italian segment of euro 1,356 thousand and the decrease in net revenue from the foreign segment of euro -596 thousand.

Net revenue recorded in Italy, which accounts for 63.4% of consolidated revenue (61.9% in the same period of 2023), totals 36,915 thousand euros (35,559 thousand euros in the corresponding period of the previous year), up 1,356 thousand euros (+3.8%).

Abroad, net revenue comes to 21,322 thousand euros, compared with the 21,918 thousand euros in the same period of 2023 (-2.7%).

The overall decrease of euro 596 thousand in net revenue from foreign companies is mainly the result of the combined effect of (i) the increase in revenue from DGI Corp, Kreativa D.o.o. and Innocv Solution S.L. (compared to the comparative period, respectively + 1,006 thousand euro, + 727 thousand euro and + 669 thousand euro) and (ii) the decrease in revenue of Alkemy Iberia S.L.U and

⁽⁴⁾ Costs for services, goods and other operating costs as well as personnel expense, are stated net of the nonrecurring portion For the definition of Net revenue, Adjusted EBITDA and Adjusted operating profit, please refer to the footnotes in the "Highlights" section.

the Mexican companies (compared to the comparative period, respectively -2,274 thousand euro and -679 thousand euro).

Operating costs (net of non-recurring items) increased from 51,498 thousand euro in H1 2023 to 53,478 thousand euro in H1 2024, an increase of 1,980 thousand euro (+3.8%), more than proportional to the growth in net revenue achieved. Specifically:

Costs for services, goods and other operating costs net of non-recurring items, which amounted to 26,237 thousand euro in the first half of 2024 (24,138 thousand euro in the first half of 2023), increased by 8.7% compared to the same period of the previous year, mainly as a result of the different type of services rendered to customers;
Personnel expense net of non-recurring items, amounting to 27,241 thousand euro in the first half of 2024, were substantially in line with the same period of the previous year (27,360 thousand euro in the first half of 2023).

The incidence of operating costs on revenue, net of non-recurring costs, therefore increased to 91.8% compared to 89.6% in H1 2023.

The effects of the above resulted in an adjusted EBITDA of EUR 4,759 thousand, down 20.4% from the adjusted EBITDA of the first half of 2023 (EUR 5,979 thousand). The adjusted gross operating profit margin (5)3for H1 2024 came to 8.2% (10.4% in H1 2023).

Note that the favourable euro-Mexican peso exchange rate has resulted in an increase in adjusted EBITDA of 53 thousand euros, calculated at equal rates with respect to the same period in 2023.

Adjusted operating profit, gross of financial income and expense and non-recurring expense, comes to 2,126 thousand euros, down 1,547 thousand euros on H1 2023 (3,673 thousand euros), mainly as a result of higher operating costs (+1,980 thousand euros on the comparative period).

Financial expense, net of related income, amounted to 896 thousand euros, in line with the same period of the previous year (915 thousand euros).

Non-recurring expense comes to 2,108 thousand euros (668 thousand euros in the comparative period) and mostly refers to non-recurring personnel expense (2,062 thousand euros). This amount is mainly related for 1,806 thousand euros to costs for the early implementation of the effects of the 2024-2026 Long-Term Incentive Plan, as a consequence of the presentation of the Tender Offer on the company's shares (better described in the following paragraphs) and in compliance with the Plan regulation.

The pre-tax loss is -878 thousand euros, down 2,968 thousand euros (-142%) on the pre-tax profit of the first half of 2023 (2,090 thousand euros), mainly as a result of the effect of higher operating costs and non-recurring items, compared to the same period of the previous year.

The net loss for the period was euro -855 thousand, compared to a profit of euro 1,409 thousand in

⁽⁵⁾ The adjusted gross operating profit margin is calculated by comparing the adjusted gross operating profit to total net revenue

the first half of 2023.

Reclassified statement of financial position

Below is the Group's reclassified statement of financial position at 30 June 2024, compared with that at 31 December 2023:

	Figures in thousands of euros
	30 Jun. 2024	31 Dec. 2023
Non-current assets	67.579	67,526
Current assets	48,591	50,678
Current liabilities	(30,995)	(32,113)
Net working capital	17,596	18,565
Post-employment benefits	(6,655)	(6,477)
Provision for risks, charges and deferred tax liabilities	(120)	(125)
Net invested capital	78,400	79,489

Equity	47,307	47,716
Non-current financial debt	26,979	25,956
Current financial debt	4.114	5.817
Net financial debt	31,093	31,773
Total sources of finance	78,400	79.489

The reclassified statement of financial position at 30 June 2024 indicates net invested capital of 78,400 thousand euros, compared with 79,489 thousand euros at 31 December 2023, which consists of:

non-current assets of 67,579 thousand euros (67,526 thousand euros at 31 December 2023) of which 54,870 thousand euros for goodwill and 5,511 thousand euros for right-of-use assets (at 31 December 2023 they came to 54,871 thousand euros and 6,274 thousand euros, respectively);
net working capital of 17,596 thousand euros (18,565 thousand euros at 31 December 2023);
post-employment benefits of 6,655 thousand euros (6,477 thousand euros at 31 December 2023);
provisions for risks, charges and deferred tax liabilities of 120 thousand euros (125 thousand euros at 31 December 2023).

Equity of 47,307 thousand euros decreased by 409 thousand euros on 31 December 2023 (-0.9%), mainly due to:

-855 thousand euro as the overall net loss for the period;
+420 thousand euro as the fair value gains on put option liabilities.

The net financial debt is 31,093 thousand euros (debt of 31,773 thousand euros at 31 December 2023) and its change with respect to the previous year end is detailed in the next paragraph.

Main financial figures

The table below details the net financial debt at 30 June 2024 compared with that at 31 December 2023:

	Figures in thousands of euros
	30 Jun. 2024	31 Dec. 2023
Bank deposits	7.382	12,025
Cash on hand	4	4
Cash and cash equivalents	7,386	12,029
Current financial assets	O	86
Bank loans and borrowings	(12,254)	(10,314)
Put option and earn-out liabilities	(9,373)	(9,553)
Loans and borrowings from other financial backers	(1,794)	(1,693)
Lease liabilities - IFRS 16	(3,558)	(4,396)
Non-current financial liabilities	(26,979)	(25,956)
Bank loans and borrowings	(9,216)	(11,532)
Put option and earn-out liabilities	0	(4,202)
Loans and borrowings from other financial backers	(92)	(88)
Lease liabilities - IFRS 16	(2,192)	(2,110)
Current financial liabilities	(11,500)	(17,932)
Net financial debt	(31,093)	(31,773)

The Group's net financial debt at 30 June 2024 is 31,093 thousand euros (31,773 thousand euros at 31 December 2023), with a period improvement of 680 thousand euros. This change, detailed and explained in the Statement of Cash Flows given over the next few pages, is mainly due for:

- 4,382 thousand euro to the decrease in put option and earn-out liabilities, mainly due to the exercise of the put option on 14% of the share capital of XCC S.r.l. (620 thousand euros) and the payment of the first tranche of earn-outs provided for in favour of the former shareholders of Innocv Solutions S.L. (3,595 thousand euros);
+756 thousand euros for the decrease in lease liabilities, mainly due to the effect of the payment of rentals for the period, only partially offset by the signing of new contracts and the extension of existing contracts;
+271 thousand euros for the decrease in bank loans and borrowings and loans and borrowings from other financial backers, mainly due to the combined effect (i) of the repayment of instalments envisaged by the bank loan repayment plans (+3,733 thousand euros), (ii) +1,726 thousand euros for invoice discounting (net of the disbursements made by

the Parent) and (iii) -5,187 thousand euros for new loans;

-4,643 thousand euros for the decrease in cash and cash equivalents.

Significant events during the period

In addition to what has already been indicated in the section "H1 2024 performance", it is deemed useful to provide information on the following events that occurred during the first half of the year.

Alkemy S.p.A.'s separate financial statements at 31 December 2023, which were approved by the Parent's Board of Directors on 28 March this year, were submitted to the Shareholders' Meeting on 29 April 2024. The Shareholders resolved to approve them and to carry forward the profit for the year.

During the aforementioned Board of Directors of 28 March, Mr Paolo Cederle was appointed General Manager of Alkemy S.p.A.; he is a senior manager of high standing, with extensive experience, including international experience, in various large groups, to whom, on 29 April, the appropriate powers were conferred regarding the management of all the national and Spanish companies, to support both the implementation of the new organisation active from the current financial year and the development of the Group's business.

On 3 June of this year, Retex S.p.A. Società Benefit (controlled by Fondo Strategico Italiano SGR) announced, by means of a notice published pursuant to article 102, paragraph 1, of Legislative Decree no. 58 of 24 February 1998, a voluntary public takeover bid (hereinafter the "Takeover Bid") concerning a total number of 5,685,460 shares of Alkemy S.p.A., representing 100% of the Company's share capital, at the price of 12 euro per share. The promotion of the Takeover Bid was completed by Retex S.p.A. on 24 June with the filing of the Offer Document with Consob, which was approved on 24 July. Acceptance of the Bid commenced on 19 August and will end on 20 September next, subject to any extensions. Please refer to (i) Notes 26 and 29 for a description of the potential effects, (ii) Note 4 for a description of the accounting effects of the Takeover Bid on the Alkemy Group's consolidated financial statements, and (iii) Note 39 and the relevant paragraph of this interim Report on Operations for a description of the significant events occurring after the end of the period, relating to the aforementioned takeover bid.

On 14 June, the provisions of the agreement with the previous shareholders of Innocv Solutions S.L. were implemented with the payment of the first earn-out tranche.

On 18 June, the purchase of a further 14% of XCC S.r.l.'s share capital from minority shareholders was formalised, bringing the company's stake to 65%.

The liquidity required for both transactions was raised through the signing of a medium- to long-term loan with Unicredit, in the amount of EUR 4.5 million, to be repaid in five years (with 12 months grace period) in quarterly instalments at a variable rate equal to the Euribor reference rate plus a spread of 1.35%. To hedge against the risk of future increases in interest rates, the Company entered into a derivative instrument ("collar") with Unicredit, constructed in a manner consistent with the repayment terms of said loan.

Evolution of demand and performance of the markets on which the Group operates

In Italy, where most of the Group's operations take place, the digital market is less mature than the rest of the continent. If we look at the EU average, the levels of basic digital competence are "very low". In fact, according to DESI, despite the fact that Italy has substantially improved its performance in recent years, in particular thanks to the establishment of a Ministry for Technological Innovation and Digital Transition, it comes in 18th out of the 27 EU Member States, particularly behind France, English-speaking countries and Northern Europe.

According to our own study, which measures the degree of digital maturity in the main companies listed on the Milan stock exchange, only 26% of companies can be said to be "fully digital". Although this is very low, partly due to pandemic-related contingencies, there has in any case been a significant improvement compared to the 2018 study, in which only 11% of companies were fully digital. Again as a result of the recent pandemic, both the awareness by top management of major companies of just how inescapable the digital transformation really is and the attention paid by institutions to the need to adopt measures aimed at narrowing some major gaps in digital competences, have grown significantly. In 2020, Italy launched its very first National Digital Competences Strategy and a correlated Operative Plan that lists more than 100 specific actions and sets ambitious targets for 2025. The Italian recovery and resilience plan is the most extensive of the whole of the EU, for a total value of approximately 191.5 billion euros and 25.1% of that amount (approximately 48 billion euros) is allocated precisely to the digital transition.

While we need to wait until next year to see the first results expected from the public investments, the situation we have been experiencing in recent years is already showing us a significant boost in the behavioural change of all Italians who, with no particular distinction drawn between different ages, income, social classes and geographic areas, rapidly adapted to the new contexts and different working (and other) scenarios as they arose, adopting digital tools with a now irreversible trend. Clear evidence is provided, for example, with: the massive use of the internet in 2023, 86.1% of the population (70% in 2019), the increase in e-commerce (+20% in absolute value compared with 2021), the extensive adoption of working from home schemes (by over 45% of companies in 2022), the common use of communication platforms, both at work and in teaching, the increased use of home banking and the spread of social networks (more than 43.9 million Italians were active on social media every day in 2023 (+24% on 2019).

The growth rate set to characterise Italy over the next few years could be even more significant precisely thanks to the new habits that have been consolidated and the drive on investments in the digital transition. This would allow for both a partial recovery of the gap with respect to other European countries and an extension of the potential business area associated with Alkemy's business, in light, above all, of the evidence that the use of digitisation has become a need (and no longer an option), but also an opportunity encouraged by the PNRR (Italian National Resilience and Recovery Plan) for all companies of any segment. Following the COVID-19 emergency, in fact, all segments of the economy were forced to approach digital instruments and channels, transforming their business models, insofar as very much impacted by the restrictive measures implemented by

the government and the changes in consumer purchasing behaviour, which in some cases, after almost two years, are now irreversible.

Alkemy's national target market, Digital Transformation, was worth more than 6 billion euros already in 2022, with year-on-year growth rates of more than 10% (15% in 2021). The main market drivers include, with an expected double-digit CAGR 2022-2026, the Data and Tech areas (+14% and +11% respectively), which encompass and enable new emerging technologies: in 2012 the digital world, now artificial intelligence. Market data refer to the specific sector in which the Group operates, i.e. that of Digital Transformation services for the Marketing&Sales chain (e.g. the Tech area includes only the market for the development, maintenance and implementation of e-commerce, CRM, websites). With lower expected growth (8%), but significant sizing, we then find the Brand and Design segment, which alone exceeds 65% of the market value.

As regards the export markets covered by the Group, instead, the estimated figures are as follows:

the Balkans (Slovenia, Croatia, Bosnia-Herzegovina, Serbia, Montenegro, Albania, Macedonia): 0.5 billion euros in 2022, with annual growth expected for the 2022-2026 period of 9.0%;
Iberian peninsula: 5.0 billion euros in 2022, with annual growth of 10.5% expected for the 2022- 2026 period. However, growth is expected to be more significant as a result of the consolidation of the offer of the Spanish-based InnoCV, which was acquired in 2022,
Mexico: 3.1 billion euros in 2022, with annual growth expected for the 2022-2026 period of 12.5%.

Supplementing the Italian market with that of foreign countries, the compound annual growth rate of the potential comprehensive market is forecast to exceed 11% over the next three years.

Competitors

In terms of the B2B digital services offer, the Italian market has a limited number of large players in terms of turnover, characterised by supply models that are very much hinged on technological and marketing execution.

Some important foreign consultancy companies have approached the Italian market, operating through the acquisition of certain minor digital agencies and the hiring of specific professionals; they are therefore the operators that are closest to offering the extensive range of services boasted by Alkemy.

The export market is still very fragmented insofar as there are countries with a low level of digital maturity, very similar to the recent past seen in Italy (the Balkans, the Iberian peninsula, Latin America), whilst elsewhere, such as in English-speaking countries, digital is already well consolidated and properly mature.

More specifically, on the more advanced, digitally more evolved markets, the lead players have consolidated their market positions, aggregating small independent players and thereby anticipating the same process implemented by Alkemy.

Indeed, Alkemy is the only player that is 'natively' integrated and that operates by synergistically combining different competences, whereas other players are either focused on only a few ingredients or maintain a strong legacy with respect to a specific competence (e.g. Accenture with Tech). This peculiarity makes Alkemy the ideal partner to accompany companies in their Digital Transformation, a true 'chemical transformation', which cannot be carried out with only one competence (e.g. technology), but which requires the combination of many elements ranging from strategy to technology, from data to creativity which, when combined together, accomplish the alchemy of transformation.

The Parent believes that the competitive scenario in Italy is basically overseen by three types of players: peers (independent mid-size players and cross-competence), large tech or media groups (such as Deloitte, Accenture, Engineering or Publicis, Wpp) and specialists (small-size and vertical players on a specific competence).

At the macro level:

the large Tech/System Integrator Groups are consolidating. These players have a primarily technological background and a large offer portfolio, in addition to significant capacity to implement strategies and operative processes thanks to their size. They are also enriching their creative skills through the acquisition of communication agencies. These operators include, when focusing specifically on the digital segment, Accenture Interactive, Deloitte Digital and the Reply division assigned to this activity. Also falling within this segment are the big Media Centres such as Publicis or WPP, whose size in Italy is currently smaller than that of

the big technology players and whose strength remains their large transactional volumes with specific reference to the Digital Marketing market;

Specialists, on the opposite side of the spectrum, are on average smaller players recognised in the market for their specific competence (e.g: Webranking for digital marketing, Caffeina among communication agencies) though, in a competitive market, they are exposed to the risk of being consolidated by larger groups (this is the case, for instance, of Simple Agency, acquired by Dentsu as early as 2013);
Peers, including Data driven companies, are independent mid-size players mainly oriented towards strategy or execution only (in Europe, they include Jakala, the Spanish Making Science and the French Artefact). Lastly, potential peers include Traditional consulting companies, which have a strong position in traditional strategy and process consultancy services and which are evolving their business model, organically or through acquisitions and partnerships, so as to be able to offer execution services on digital (e.g. BCG Platinon).

On the export markets covered by the Group (the Balkans, the Iberian peninsula and Mexico), the competitive scenario does not differ significantly from that of Italy, except for a lesser maturity of the offer integration process that the main players are developing in the wake of the more evolved markets.

(Source: internal study)

Alkemy on the stock market

Alkemy S.p.A.'s shares were listed on the AIM Italia (Alternative Investment Market) from 5 December 2017 to 16 December 2019. As from 17 December 2019, Alkemy's shares have been listed in the STAR segment of the Borsa Italiana Euronext Milan.

The STAR segment of Borsa Italiana is dedicated to medium-sized enterprises with capitalisation of between 40 million and 1 billion euros, which undertake to respect requirements of excellence in terms of:

considerable transparency and solid communicative vocation;
high levels of liquidity (at least 35% float);
Corporate Governance (the set of rules governing company management) in line with international standards.

The Parent's share capital is represented by 5,685,460 ordinary shares, conferring, at 30 June 2024, a total of 6,832,660 voting rights and, specifically:

(i) 4,538,692 ordinary shares, without loyalty shares, conferring 4,538,692 voting rights (ii) 1,146,768 ordinary shares, with loyalty shares, conferring 2,293,536 voting rights.

Ownership structure (significant shareholdings) at 30.06.2024

(1) Lappentrop S.r.l. is related to Alessandro Mattiacci, Chairman of Alkemy S.p.A.

Alkemy share

Alphanumerical code: ALK ISIN stock market code: IT0005314635

REUTERS ALK.MI code BLOOMBERG ALK.IM code

Specialist: Intermonte Securities SIM

Admission price: €11.75 Price at 30.06.2024: €12.10 Capitalisation at the date of admission: €63,489,127.50 Capitalisation at 30.06.2024: €68,794,066

Alkemy share performance

During H1 2024, the Alkemy share performed positively compared to 30 December 2023.

In particular, during the first quarter, the share price rose steadily, reaching its half-year peak on 20 March, with a price per share of Euro 12.70 (+38% compared to the closing price at 31.12.2023). Despite the fact that the results for the financial year ending 31.12.2023, which were released on 28 March, were in line with market expectations, the share price has been on a downward trend since the announcement. The trend is only partially justified by the announcements of the impact of certain customer dynamics on the expected 2024 results, which accompanied the release of the first quarter results on 15 May. On 21 May, the share reached its lowest closing price for the quarter, at EUR 8.90 per share (-3.16% compared to the closing price on 31.12.2023).

With the announcement on 3 June by Retex S.p.A. - Società Benefit of its intention to promote a voluntary total takeover bid on Alkemy S.p.A. shares, with a proposed price of Euro 12.00 per share, the Alkemy share price reached Euro 12.00 per share as early as 7 June, and then remained steadily above the offered price until the end of the half-year period. The share then ended the semester with a price per share of Euro 12.10.

The Alkemy share thus closed the six-month period with +31.7% growth compared to the end of the previous year, performing better than the STAR segment in the same period (+0.39%).

The graph below compares the performance of the Alkemy share with the Euronext Small Cap and the Euronext STAR index from the date of admission to trading to 30 June 2023.

The Alkemy shares traded during the first half of 2024 amounted to 1.657 million, up 95% from the 847,905 shares traded during the same period in 2023. The value of trades in the first half of 2024 was EUR 18.833 million, up 78% compared to the value for the same period in 2023 of EUR 10.584 million.

The graph below shows the performance of the Alkemy share and the turnover of trades from the date of admission to trading to 30 June 2024 and the daily turnover of trades.

Analyst Coverage

Intermonte, IPO Report November 2017 (Joint Global Coordinator & Specialist) Research Analyst: Gianluca Bertuzzo INITIAL COVERAGE: 01 February 2018
Intesa Sanpaolo, IPO Report November 2017 (Joint Global Coordinator) Research Analyst: Gabriele Berti INITIAL COVERAGE: 06 February 2018
Mediobanca Research Analyst: Isacco Brambilla INITIAL COVERAGE: 25 June 2020

Valuation and consensus

Intermonte: bases the valuation of the Alkemy share on the DCF model and peer analysis. As of 30 June 2024, the valuation expressed on the Alkemy share is suspended as Intermonte acts as advisor to Retex S.p.A. - Benefit Company (previously Target Price of EUR 11.40 with OUTPERFORM recommendation).
Intesa Sanpaolo: bases the valuation of the Alkemy share on the DCF model and peer analysis. The target price is 12.00 euros with a HOLD recommendation dating back to June 2024 (previous target price of Euro 14.50 with a BUY recommendation).
Mediobanca: bases the valuation of the Alkemy share on the DCF model and peer analysis. As of 30 June 2024, the valuation expressed on the Alkemy share is suspended as Mediobanca acts as advisor to Retex S.p.A. - Benefit Company (previously Target Price of EUR 11.00 with Neutral recommendation).

Description of the main risks and uncertainties to which the Group is exposed

In a context characterised by market instability and the rapid evolution of business and regulatory dynamics, a careful and effective management of risks and opportunities is essential in order to support an informed decision-making process that is consistent with the strategic objectives and guarantee business sustainability and the creation of value in the medium/long-term.

In going about its business, the Group is exposed to risks and uncertainties deriving from exogenous factors connected with the general or specific macroeconomic context of the operating segments in which it operates, as well as risks deriving from strategic choices and internal operating risks.

Such risks have been systematically identified and mitigated through the monitoring and timely oversight of risks as they arose.

Risk management is centralised in the Group, although individual managers are responsible for the identification, monitoring and mitigation of such, also in order to better measure the impact of each risk on business operations, reducing the onset and/or limiting the effects depending on the trigger.

Under the scope of business risks, below are the principles governing the Group in application of Art. 2428 of the Italian Civil Code.

Risk connected with competitiveness

Reference is made to the information given in the paragraph "Competitors".

Risks connected with demand/the macroeconomic cycle

The performance of the segment in which the Group operates is correlated with the performance of the general economic framework and, therefore, any negative outlook, inflation or recession periods may consequently reduce demand for the products and services supplied.

Risk of customer dependency

The Group offers its services mainly to medium and large-sized companies operating in diversified sectors and in different geographical areas. A limited part of the Group's revenue is concentrated on a relatively small number of customers, any losses of which might thus affect the Group's business and financial position. Moreover, South American customers account for over 80% of the Mexican subsidiary's revenue.

Climate risks

In relation to climate risks, in particular connected with climate change, the Group conducted a preliminary internal assessment in order to identify their extent and pervasiveness at both actual and forecast level. Possible impacts on estimates, changes in the useful life of assets, and potential impairment of trade receivables and other assets were analysed. It is noted that in view of the business model and the analyses performed, the Group has no significant exposure to environmental risks in particular connected with climate change.

Russia-Ukraine military conflict

The Group does not operate directly in the countries involved in the Russia-Ukraine conflict. However, in this context, various types of risk become important, in particular those connected with:

the development of the business of the Group's direct customers in these countries;
macroeconomic and financial factors, such as the volatility of the price of energy commodities, volatility of the prices of raw materials, volatility envisaged on the global financial markets, in exchange rates and in interest rates;
cyber crime, e.g. direct attacks against the assets of companies operating in situ or in neighbouring countries, or the intensification of such with a potential impact on the interruption of service and critical infrastructures.

The Group has equipped itself with processes and procedures that support the identification, management and monitoring of events with potential significant impacts on resources and the business. These processes seek to maximise a timely and effective response.

Risk connected with financial operations

Under the scope of its operations, the Group is exposed to financial risks connected with:

credit risk;
liquidity risk;
market risk and, specifically, interest rate and currency risks.

Credit risk

With reference to the risk of potential losses deriving from failure by the various counterparties with which it operates to fulfil the commitments made, the Group has established a suitable loss allowance based on the type of its customers and statistical assessments. The particular concentration of the business on high credit standing customers, the number of such and the segment diversification guarantee another substantial lowering of the credit risk.

Liquidity risk

The Group's financial management is characterised by procedures aimed at regulating the collection and payment duties, controlling and avoiding any critical liquidity positions.

During the year, the Group met its financial requirements using own funds and bank overdrafts and loans.

As regards trade payables and other liabilities, the cash flows expected from the related contracts are within 12 months.

Market risk

The market risk to which the Group is exposed consists of the risk of changes to interest rates and the currency risk.

Interest rate risk

The Group is exposed to the risk of changes in interest rates in connection with the variable rate indexed medium- and long-term loans.

It should be noted that there are cap options (at a fixed price, already paid) and two collar options in place, in relation to certain medium-term loans contracted starting in 2020, to hedge the risk of future increases in interest rates.

Currency risk

The Group's operations in currencies other than the euro, as well as the development strategies on the international markets, expose the Group to the currency risk.

The monitoring and management of this risk is left to the administrative management of Alkemy S.p.A..

The Group is therefore exposed to the currency risk, i.e. the risk that changes in the exchange rates of certain currencies with respect to the consolidation currency impact both the Alkemy Group profit (loss) and its net financial debt and equity.

The Group is also exposed to a limited currency risk generated by commercial and financial transactions implemented by the individual companies in currencies other than the functional currency of the company performing the transaction.

This exposure is monitored, but the Alkemy Group policy is not to hedge said currency risk insofar as there are no significant transactions implemented in currencies other than the euro between Group companies, except for the annual payment of dividends resolved by the Mexican companies. A significant fluctuation of Mexican pesos or the other currencies in which the Group operates may in any case negatively impact the Group's financial position and financial performance, proportionally to the impact of the business carried out by said companies, with respect to the general business pursued by the Group as a whole.

Financial management

The Alkemy Group's financial management is characterised by procedures aimed at regulating the collection and payment duties, controlling and avoiding any critical liquidity positions.

During the first half of 2024, the Group met its current financial needs and partly those tied to extraordinary transactions by means of use of Own Funds and loans, as well as through the use of short-term bank facilities. In any case, the Group has suitable bank facilities, aimed at managing any short-term financial needs.

As regards extraordinary operations, the Group's policy adopted to date was to make priority use of Own Funds, if such should be surplus to current requirements and, only secondarily, of medium-term bank debt (with 6-12 months of grace period) for the remainder. The reasoning behind this choice is, on the one hand, the desire not to have non-recurring operations interfere with the Group's ordinary operations, and, on the other, to maintain a suitable period of time for the growth, integration and consolidation of investments made and, therefore, to be able to repay the liability mainly with future income and cash flows the latter generated.

In accordance with Art. 2428, point 6-bis of the Italian Civil Code, it is acknowledged that the Group does not use financial instruments (derivatives and others) except for the mentioned put options over the minority shares in subsidiaries and 6 cap options and 2 collar options to hedge the risk of a rise in interest rates for the majority of the medium-term loans agreed starting 2020.

The Group is also marginally exposed to the currency risk on assets expressed in a currency other than the euro, mainly relating to the companies in Serbia and Mexico.

Finally, the very nature of the services provided means that the Group is subject to moderate credit risk, insofar as debtors are mainly large, highly-solvent private companies.

Investments

In H1 2024, the Group invested in property, plant and equipment and intangible assets for a total amount of 1,437 thousand euros (1,103 thousand euros in H1 2023), as follows:

o property, plant and equipment for 370 thousand euros (380 thousand euros in H1 2023), mainly relating to hardware purchases for internal use;
o intangible assets for 1,067 thousand euros (723 thousand euros in H1 2023), mainly relating to the purchase of software and internal implementation of platforms relevant to the conduct of the commercial business of the Group's companies.

Research and development

During the period, the Group did not carry out any research and development (R&D) activities.

Treasury shares

The meeting of the Shareholders of Alkemy S.p.A. held on 29 April 2024 resolved to repurchase and dispose of ordinary shares in the Parent for up to eighteen months, in order to: (i) use the treasury shares as an investment, for an efficient use of the cash and cash equivalents generated by the Parent's core business and (ii) be able to use the treasury shares to assign to the beneficiaries of potential incentive plans resolved by the competent corporate bodies in the favour of Parent employees and directors; and (iii) allow for the use of the treasury shares under the scope of transactions linked to the core business, i.e. projects consistent with the growth and expansion lines the Parent intends to pursue in connection with which the share exchange opportunities shall take concrete form with the main aim of perfecting the corporate integration with potential strategic partners.

During the period, the Parent therefore acquired a total of 3,500 treasury shares (0.1% of the Company's share capital), for a total outlay of 43 thousand euros.

These repurchases were made in compliance with current legislation, in particular with the provisions of Art. 132 of Legislative Decree no. 58 of 24 February 1998 and Art. 144-bis of the Regulation approved by Consob Resolution no. 11971 of 14 May 1999, as subsequently amended and supplemented, with the operating procedures established by the Regulation of markets organised and managed by Borsa Italiana S.p.A.

The Parent also assigned and transferred 152,757 shares, valued at € 1,818 thousand euros, to the Chairman, the Chief Executive Officer, a Director of the Parent and certain executives, in execution of the 'Long-Term Incentive Plan', in relation to the shares accrued by them on the 2020-2023 results and not yet paid.

As at 30 June 2024, the Parent held 58 treasury shares, equal to 0.001% of the share capital (149,315

as at 31 December 2023, or 2.63% of the share capital), for a countervalue of EUR 1 thousand.

The Parent's equity includes a specific undistributable reserve of an equal amount.

Events after the reporting period

It is considered useful to report on the following event that occurred after the end of the period.

On 8 August this year, the Board of Directors of Alkemy S.p.A. approved the 'Issuer's Statement', drafted pursuant to Article 103, paragraphs 3 and 3-bis, of Legislative Decree No. 58 of 24 February 1998 (the 'TUF') and Article 39 of CONSOB Regulation No. 11971 of 14 May 1999 (the 'Issuers' Regulation'). This press release reported the Board of Directors' reasoned assessment of the Takeover Bid and the inadequacy, from a financial point of view, of the proposed consideration for each share included in the Bid (Euro 12.00).

On 9 September of this year, the Board of Directors of Alkemy S.p.A. supplemented the abovementioned "Issuer's Statement", prepared at the request of Consob, which had been received on 4 September.

Outlook

As at the date of approval of this interim financial report as at and for the period ended 30 June 2024, it is believed that the Alkemy Group's business development in the second half of the current year will be consistent with what has been seen in the first part of 2024. Indeed, based on the current status of orders in the portfolio, new contracts activated and bids/tenders being confirmed, expectations are to continue both the slight growth in revenue compared to 2023, mainly in the domestic market, and the trend in overall profitability, still mainly attributable to the different mix of services to be rendered, generally characterised by lower marginality. The positive effects of the new organisation, the ongoing operational measures and the induction of some new sales managers with high seniority expected during the second half of the year, will only be reasonably noticeable from 2025 onwards.

Milan, 13 September 2024

On behalf of the Board of Directors the Chief Executive Officer Duccio Vitali

Alkemy S.p.A.

Condensed interim consolidated financial statements at 30 June 2024

Financial statements

Income statement

		Figures in thousands of euros
	Notes	H1 2024	H1 2023

Revenue	1	57,125	56,309
Other income	2	1,112	1,168
Total revenue and other income		58,237	57,477
Services, goods and other operating costs	3	(26,283)	(24,151)
- of which non-recurring		(46)	(13)
Personnel expense	4	(29,303)	(28,015)
- of which non-recurring		(2,062)	(655)
Total costs and other operating costs		(55,586)	(52,166)

Gross operating profit		2,651	5,311
Amortisation/depreciation	5	(2,207)	(1,979)
Provisions and impairment losses	6	(426)	(327)
Operating profit		18	3,005
Other financial income	7	522	521
Other financial expense	8	(1,418)	(1,436)
Pre-tax profit (loss)		(878)	2,090
Income taxes	9	23
			(681)
Profit/(loss) for the period		(855)	1,409
- Owners of the parent		(857)	1,427
Non-controlling investors		2	(18)
Earnings (loss) per share	10
Basic		(0.15)	0.26
Diluted		(0.15)	0.26

The notes given below are an integral part of these condensed interim consolidated financial statements.

In accordance with CONSOB Resolution no. 15519 of 27 July 2006, the effects of related party transactions on the Income Statement are highlighted in the specific table of the Income Statement given in annex 2 and are also described in the paragraph on "Related party transactions" in the notes to the condensed interim consolidated financial statements.

Statement of comprehensive income

		Figures in thousands of euros
	Note	H1 2024	H1 2023
Profit/(loss) for the period		(855)	1,409
Items that will be reclassified to profit or loss:
Translation differences on foreign operations		3	104
Total items that will be reclassified to profit or loss	24	3	104
ltems that will not be reclassified to profit or loss
Actuarial gains (losses)		વેરૂ	120
Related tax		(22)	(29)
Total	24	71	91
Other comprehensive income (expense) net of tax		74	195
Comprehensive income for the period		(781)	1,604
Attributable to:
- Owners of the parent		(783)	1,622
- Non-controlling investors		2	(18)

The notes given below are an integral part of these condensed interim consolidated financial statements.

Statement of financial position

		Figures in thousands of euros
Assets	Notes	30 Jun. 2024	31 Dec. 2023

Property, plant and equipment	11	1,934	1,939
Right-of-use assets	12	5,511	6,274
Goodwill	13	54,870	54,871
Intangible assets	14	2,461	2,079
Equity investments	15	5	5
Other financial assets	16	189	245
Deferred tax assets	17	2,267	1,818
Other assets	18	342	295
Non-current assets		67,579	67,526
Trade receivables	19	42,082	45,929
Other financial assets	20		107
Tax assets	21	2,731	2,258
Other assets	22	3,778	2,470
Cash and cash equivalents	23	7,386	12,029
Current assets		55,977	62,793
Total assets		123,556	130,319

The notes given below are an integral part of these condensed interim consolidated financial statements.

In accordance with CONSOB Resolution no. 15519 of 27 July 2006, the effects of related party transactions on the Statement of Financial Position are highlighted in the specific table of the Statement of Financial Position given in annex 2 and are also described in the paragraph on "Related party transactions" in the notes to the condensed interim consolidated financial statements.

		Figures in thousands of euros
Liabilities and Equity	Note	30 Jun. 2024	31 Dec. 2023

Equity	24
Share capital		596	596
Reserves		47,094	43,184
Profit/(loss) for the period		(857)	3,463
Equity attributable to owners of the parent		46,833	47,243
Equity attributable to non-controlling investors	25	474	473
Total equity		47,307	47,716

Financial liabilities	26	14,048	12,007
Lease liabilities	28	3,558	4,396
Put option and earn-out liabilities	29	9,373	9,553
Employee benefits	30	6.655	6.477
Provisions	31	97	107
Deferred tax liabilities	32	23	18
Non-current liabilities		33,754	32,558

Financial liabilities	26	9,308	11,620
Lease liabilities	28	2.192	2,110
Put option and earn-out liabilities	29		4,202
Trade payables	33	15,745	16,196
Tax liabilities	34	4,111	3,174
Other liabilities	35	11,139	12,743
Current liabilities		42,495	50,045

Total liabilities		76,249	82,603
Total liabilities and equity		123 556	130 319

The notes given below are an integral part of these condensed interim consolidated financial statements.

Statement of cash flows

	Notes	। H1 2024	H1 2023

Cash flow from operating activities
Profit/(loss) for the period		(855)	1,409
Financial income	7	(522)	(521)
Financial expense	8	1,418	1,436
Income taxes	9	(23)	681
Amortisation/depreciation	5	2,207	1,979
Provisions and impairment losses	6	426	327
Cost for share-based payments	4	1,841	વેરૂ
Other non monetary elements	24		(162)
Decrease (increase) in trade receivables	19	3,446	1,757
Increase (decrease) in trade payables	33	(448)	(1,895)
Decrease (increase) in other assets	21, 22	(1,790)	(770)
Increase (decrease) in other liabilities	34, 35	(2,632)	34
Cash flows from operating activities		3,068	4,368
Net interest paid	7,8	(534)	(270)
Income tax paid	9	(205)	(539)
Net cash flows from operating activities		2,329	3,559
Cash flows from investing activities
Acquisition of property, plant and equipment and intangible assets	11, 14	(1,433)	(1,103)
Decrease (increase) in financial assets	16, 20	84	2
Net cash flows used in investing activities		(1,349)	(1,101)
Cash flows from financing activities
Change in financial liabilities	26	(222)	(3,665)
Change in lease liabilities - IFRS 16	28	(1,143)	(987)
Change in treasury shares	24	(43)	(120)
Dividends paid to non-controlling investors	35		(749)
Payment of put options	29	(4,215)	(40)
Net cash flows from (used in) financing activities		(5,623)	(5,561)
Net increase/(decrease) in cash and cash equivalents		(4,643)	(3,103)
Opening balance		12,029	9,115
Closing balance		7,386	6,012

The statement of cash flows was prepared in accordance with the indirect method.

The notes given below are an integral part of these condensed interim consolidated financial statements.

Statement of changes in equity

									Figures in thousands of euros
	Notes	Share capital	Treasury shares	Legal reserve	Other riserves	Retained earnings	Profit/(loss) for the year	Equity attributable to owners of the parent	Equity attributable to non- controlling	Total equity
Balance at 31 Dec. 2022		596	(1,793)	202	33,284	5,135	5,583	43,007	399	43,406
Allocation of profit for the year						5,583	(5,583)
Repurchase of treasury shares	24	-	(120)					(120)		(120)
Assignment of treasury shares	24	-	137			(47)		90		90
Change in put option liabilities	29					416		416		416
Long Terms Incentive Plan	4				(163)			(163)		(163)
Other movements					4	-		র্ব	1	5
Other comprehensive income (expense)					195			195		195
Profit/(loss) for the period						-	1,427	1,427	(18)	1,409
Balance at 30 Jun. 2023		596	(1,776)	202	33,320	11,087	1,427	44,856	382	45,238

	Notes	Share capital	Treasury shares	Legal reserve	Other riserves	earnings	Retained Profit/(loss) for the year	Equity attributable to owners of the parent	Equity attributable to non- controlling	Total equity
Balance at 31 Dec. 2023		596	(1,776)	202	33,426	11,332	3,463	47,243	473	47,716
Allocation of profit for the year						3,463	(3,463)
Repurchase of treasury shares	24	-	(43)					(43)	-	(43)
Assignment of treasury shares	24	-	1,818			(652)		1,166	-	1,166
Change in put option liabilities	29					420		420	-	420
Long Terms Incentive Plan					(1,166)			(1,166)	-	(1,166)
Other movements					(5)	1		(4)	(1)	(5)
Other comprehensive income (expense)					74			74		74
Profit/(loss) for the period							(857)	(857)	2	(855)
Balance at 30 Jun. 2024		596	(1)	202	32,329	14,564	(857)	46,833	474	47,307

The notes given below are an integral part of these condensed interim consolidated financial statements.

Notes to the condensed interim consolidated financial statements

General information

The Alkemy Group (hereinafter the "Group") works to improve the market position and competitiveness of large and medium-sized enterprises, innovating and transforming the business model to keep pace with the evolution of technology and new consumer habit. The Group integrates into its offer, competences in the areas of strategy, e-commerce, communication, performance, technology and data management, developing complete digital transformation projects that cover the whole of the value chain, from strategy to implementation.

The parent, Alkemy S.p.A. has its registered and administrative office at Via San Gregorio 34, Milan, Italy and it is registered with the Milan Company Register under Economic and Administrative Index (REA) no. 1835268.

The shares of Alkemy S.p.A. (hereinafter the "Company", "Alkemy" or the "Parent") have been listed on the STAR segment of the EURONEXT MILAN market organised and managed by Borsa Italiana since 17 December 2019.

These condensed interim consolidated financial statements are prepared in euros, which is the currency of the economy in which the Parent operates. The Income Statement, Statement of Comprehensive Income, Statement of Financial Position, Statement of Cash Flows, Statement of Changes in Equity and figures given in the Notes, are all expressed in thousands of euros.

The publication of this interim financial report at 30 June 2024, reviewed by KPMG S.p.A., was authorised by resolution passed by the Board of Directors on 13 September 2024.

Reporting standards

Basis of preparation

These condensed interim consolidated financial statements at 30 June 2024 have been prepared in compliance with the International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Board ("IASB") and endorsed by the European Union. The term "IFRS" is used to also refer to all the revised International Accounting Standards ("IAS") and all the interpretations of the International Financial Reporting Interpretations Committee ("IFRIC"), previously known as the Standing Interpretations Committee ("SIC").

More specifically, the condensed interim consolidated financial statements have been prepared in accordance with IAS 34 relative to interim financial statements and do not include all the information and notes required in the annual consolidated financial statements; as such, they must be read together with the consolidated financial statements at 31 December 2023.

In the preparation of the condensed interim consolidated financial statements at 30 June 2024, the same accounting policies have been applied, as those adopted in the preparation of the consolidated financial statements at 31 December 2023, to which reference is made, with the

exception of that specified in the paragraph on "New standards, amendments and interpretations applied starting 1 January 2024".

The condensed interim consolidated financial statements were also prepared in compliance with the provisions adopted by CONSOB for financial statements in application of article 9 of Legislative Decree 38/2005 and other rules and provisions issued by CONSOB regarding financial statements.

They are prepared on a going concern and historical cost basis, with the exception of certain financial instruments, which are measured at fair value.

The preparation of the condensed interim consolidated financial statements and notes thereto in accordance with the IFRS requires the Directors to make estimates and assumptions that impact the revenue, costs, assets and liabilities of the interim financial report and the disclosure of contingent assets and liabilities at 30 June 2024. If, in the future, these estimates and assumptions, which are based on the best assessments by the Directors, should differ from the effective circumstances, they will be altered appropriately in the period in which such circumstances change. The estimates and assumptions are reviewed periodically, and any changes are immediately reflected in the income statement and equity.

Certain assessment processes, in particular the more complex ones, such as the determination of any impairment losses on non-current assets, are generally performed completely only when preparing the annual financial statements, save for cases where there are impairment indicators requiring an immediate assessment of any impairment losses. The results obtained as at 30 June 2024, which were lower than both those of the same date in 2023 and those of the annual financial statements, and the forecasts for the second half of this year, were interpreted as indicators of possible impairment of the goodwill recognised and therefore an impairment test was performed, as detailed in Note 13.

In relation to the aforementioned takeover bid promoted by Retex S.p.A., please refer to (i) Notes 26 and 29 for a description of the potential effects, (ii) Note 4 for a description of the accounting effects of the takeover bid on the Alkemy Group's consolidated financial statements, and (iii) Note 39 for a description of the significant events occurring after the end of the period.

Format and contents of the financial statements

The financial statements have the following characteristics:

the income statement classifies revenue and costs by nature;
the statement of financial position is prepared and separately presents both current and noncurrent assets and current and non-current liabilities.
the statement of cash flows is drawn up in accordance with the indirect method.

The format used, as described above, is that considered best able to represent the elements that determined the Group's financial position, financial performance and cash flows.

In order to fulfil the requirements set out in CONSOB Resolution 15519 of 27 July 2006 on the financial statements, specific income statement and statement of financial position tables have been

prepared to show any significant related party transactions, and any transactions that can be classified as non-recurring, atypical and/or unusual, are indicated on the tables and then highlighted in the notes.

Basis of consolidation

The condensed interim consolidated financial statements have been prepared consolidating the financial statements of the Parent and those of all companies in which the Parent directly or indirectly holds the majority of voting rights on a line-by-line basis.

These financial statements have the same reporting date as the Parent.

The profit (loss) of the subsidiaries acquired or sold during the period are included in the income statement as from the date of acquisition and until the effective date of disposal. Where necessary, adjustments are made to the financial statements of subsidiaries in order to bring the accounting policies used into line with those adopted by the Group.

On 18 June, the purchase of a further 14% of XCC S.r.l.'s share capital from non-controlling investors was formalised, bringing the Parent's share to 65%.

Company name	% held	Registered office
Direct subsidiaries:
Alkemy Play S.r.l.		75% Milan
Alkemy SEE D.o.o.		70% Serbia – Belgrade
Alkemy Iberia S.L.U.		100% Spain - Madrid
Design Group Italia ID S.r.l.		100% Milan
eXperience Cloud Consulting S.r.l.		65% Rome
Alkemy South America S.L.		100% Spain - Madrid
Innocv Solutions S.L.		100% Spain - Madrid
Indirect subsidiaries:
Alkemy Play D.o.o.		75% Serbia – Belgrade
Kreativa D.o.o.		36% Serbia – Belgrade
Ontwice Interactive Service S.A. Mexico City		100% Mexico - Mexico City
Ontwice Interactive Service Digital S.A. Mexico City		100% Mexico - Mexico City
Design Group Italia Corp.		100% USA - New York

At 30 June 2024, the consolidation scope was as follows:

New standards, amendments and interpretations applicable starting 1 January 2024

Below is a list of the standards, amendments, interpretations and improvements in force starting 1 January 2024, for which there has been no significant impact on the Group's interim financial report at 30 June 2024:

Lease Liabilities in a Sale and leaseback transaction (Amendments to IFRS 16) (issued in September 2022);

Classification of Liabilities as Current or Non-Current (Amendments to IAS 1) (issued in January 2020);

Non-current Liabilities with Covenants (Amendments to IAS 1) (issued in October 2022);

Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7) in (issued May 2023);

IFRS and IFRIC standards, amendments and interpretations endorsed by the European Union, not yet mandatory and not adopted early by the Parent? as at 30 June 2024

Below are the standards, amendments, interpretations and improvements not yet into force:

Lack of Exchangeability (Amendments to IAS 21) (published in August 2023). The amendments apply to reporting periods starting on or after 1 January 2025;

Amendments to the classification and measurement of financial instruments (Amendments to IFRS 9 and IFRS 7) (published in May 2024). The amendments apply to reporting periods starting on or after 1 January 2026;

Annual improvements to IFRS® Accounting Standards - Volume 11(Amendments to IAS 7 and IFRS 1, 7, 9, 10) (published in July 2024). The amendments apply to reporting periods starting on or after 1 January 2026;

IFRS 18 Presentation and disclosures in financial statements (published in April 2024). The amendments apply to reporting periods starting on or after 1 January 2027;

IFRS 19 Subsidiaries without public accountability: disclosures (published in May 2024). The amendments apply to reporting periods starting on or after 1 January 2027.

The adoption of the above standards and amendments is not expected to have a significant impact on the Group.

At the date of this report, the competent bodies of the European Union have not yet completed the endorsement process necessary for the adoption of the amendments and standards described below.

IFRS 14 Regulatory deferral accounts (published in January 2014). Endorsement process suspended pending the new standard on rate-regulated activities;

Sales or contributions of assets between an investor and its associate/joint venture (Amendments to IFRS 10 and IAS 28) (published in September 2014). Endorsement process suspended pending conclusion of the IASB project on the equity method.

At present, the directors are weighing up the possible effects of the introduction of these amendments on the Group's consolidated financial statements.

Financial risk management

Under the scope of its operations, the Group is exposed to financial risks connected with:

credit risk;
liquidity risk;
market risk and, specifically, interest rate and currency risks.

Below is information about the Group's exposure to each of the above risks; reference is made to the more extensive description given in the Report on Operations for a description of how financial risks are monitored in order to prevent any potential negative effects thereof, and, consequently, take corrective action.