Basic Net SpA — Earnings Release 2017

Mar 19, 2018

Group

CONFERENCE CALL – 19th March 2018

• Aggregated sales € 747 million, up 1.1%
• Consolidated revenues € 184 million, up 1%
• EBITDA € 23 million or 16.9% of sales, up 7.2%
• Operating income (EBIT) € 17 million or 12.3% of sales, up 9.2%
• EBT € 15 million or 11.1% of sales, up 1%
• Net Result € 10.6 million or 7.9% of sales, up 3.3%
• Net Financial Position € 61,5 million, an increase of € 12 million as compared to year-end 2016

• SE BAGO ACQUISITION

In July 2017 BasicNet has signed the agreement for the acquisition of Brand for a price of 14.2 USD million.

• BRIKO ACQUISITION

The acquisition has been formalized in August, with an advance payment of Euro 1 million out of an estimated final price of Euro 1.7 million, that will be settled in June 2019, based on target sales reached in the preceding 12 months.

Gain of Euro 200 thousand from the sale of the Lanzera® brand in June 2017.

Total Aggregated Sales

Aggregated sales of licensees (ASL) – geographic area -

Aggregated sales of licensees (ASL) – brand -

6

	31/12/2017	31/12/2016	Variances	%
Total consolidated revenues	183.507	181.607	1.900	1,0%
Consolidated direct sales	135.583	135.183	400	0,3%
Royalties from ASL	36.085	34.968	1.117	3,1%
Royalties from ASSC	11.838	11.456	383	3,2%

Income Statement

	31/12/2017		31/12/2016		Variances
Consolidated direct sales	135.583	100%	135.183	100%	400	0,3%
Cost of sales	(81.065)	-59,8%	(80.923)	-59,9%	(142)	-0,2%
GROSS MARGIN	54.518	40,2%	54.261	40,1%	258	0,5%
Royalties and sourcing commissions	47.924	35,3%	46.424	34,3%	1.500	3,2%
Other income	3.639	2,7%	2.226	1,6%	1.413	63,5%
Sponsorship and media costs	(24.627)	-18,2%	(24.285)	-18,0%	(341)	-1,4%
Personnel costs	(21.084)	-15,6%	(19.681)	-14,6%	(1.403)	-7,1%
Selling, general and administrative costs, royalties expenses and amortization	(43.729)	-32,3%	(43.703)	-32,3%	(26)	-0,1%
EBIT	16.642	12,3%	15.241	11,3%	1.400	9,2%
Net financial income (charges)	(1.578)	-1,2%	(302)	-0,2%	(1.276)	-422,8%
EBT	15.063	11,1%	14.940	11,1%	124	0,8%
Income taxes	(4.418)	-3,3%	(4.635)	-3,4%	217	4,7%
Net Result	10.646	7,9%	10.305	7,6%	341	3,3%

Cash Flow Statement

	31/12/2017	31/12/2016
Net Financial Position, beg. of the period	(49.459)	(45.362)
Net result	10.646	10.305
Depreciation and amortization	6.419	6.261
Change in Operating Working Capital	(5.667)	(4.209)
Change in Employee and Director Benefits	672	(164)
Change in other Current Assets, net	(405)	231
Operating Cash Flow	11.665	12.425
#RIF! Capital expenditures	(18.581)	(8.086)
Disposals	825	252
Capital expenditures,net	(17.756)	(7.833)
Acquisition of treasury shares	(2.605)	(3.067)
Dividends	(3.324)	(5.622)
Change in Net Financial Position	(12.020)	(4.097)

Euro /000	2017	2016	Variances	%
Dividend	0,06	0,06	-	0,0%
Total dividends	3.660	3.660	-	0,0%
Dividends (cash outflow)	3.283	3.324	(41)	-1,2%
Net result	10.646	10.305	341	3,3%
Pay-out ratio	30,8%	32,3%	-1,5%

As of today's date, the company owns:

• ➫ N. 6.280.079 equal to 10,29% of the share capital
• ➫ Average price Euro 2,39
• ➫ Current exchange price Euro 3,675
• ➫ Investment of Euro 15 million
• ➫ Implicit capital gain of Euro 8 million

➫ % share price change in the period January 1st and December 31st 2017: +6,4% ➫ % share price change from January 1st 2018 until Today: -1,1%

	Shareholders' AGM authorisation of April 28th 2016.	Shareholders' AGM authorisation of April 27th 2017.
	Apr 2016 - Apr 2017	Apr 2017 - Today
Maximum financial commitment	€ 3.500.000	€ 3.500.000
Total investment of the period	€ 2.538.208	€ 2.641.324
Number of acquired trasury shares	802.297	717.282
Average price	3,17	3,69
% of the share capital	1,31%	1,17%

PROPOSAL TO THE SHAREHOLDERS' AGM FOR THE ALLOCATION OF THE NET PROFIT FOR THE YEAR

Proposal for the allocation of the net profit for the year of BasicNet S.p.A. Equal to Euro : 4.507.885

225.394 Euro to the Legal Reserve;

3.282.811 Euro a dividend of 0,06 Euro per share (excluding the 6.280.079 treasury shares held at March,19 2018); 999.680 Euro to retained earnings the residual amount Dividend yield (value per share at 31.12.2017) : 1,63% Dividend yield (current value per share) : 1,628%

The dividend will be paid from May 23, 2018, with coupon at May 21, 2018 and record date of May 22, 2018.

CONFERENCE CALL – 19th March 2018