Cy4Gate 1H 2023 Financial Results

September 14, 2023

Our Growth
Strategic pillars
Governance and Shareholders
Portfolio and markets
Financial performance
ESG

Fast growing and attractive group…

Delivery on track on all Strategic pillars

GROUP & SHAREHOLDERS

TEAM

Domitilla Benigni CHAIRMAN

Emanuele Galtieri CEO & General Manager

Marco Latini CFO & Investor Relations Manager

Board of Directors

Strategic and M&A Committee

CY4Gate is present in two main markets:

Cyber Intelligence & Cyber Security

PORTFOLIO OVERVIEW

CYBER INTELLIGENCE

Double digit growth

Source: Markets & Markets; industry reports and expert interviews

CYBER SECURITY

Cyber security solutions protect clients' information systems, enabling the detection of anomalies and generating response actions Global Cybersecurity Services² Market Real time analytics (RTA) is a security information and event management (SIEM), advanced cyber security application that enables the analyst to detect cyber security anomalies and creates conditions to rapidly strike back. Pool of Cyber Security services covering the following topics: ▪ Red Teaming and Penetration Test ▪ Compliance Assessment ▪ Managed Detection & Response ▪ Incident Response & Malware Analysis ▪ Hands-on Cyber Training and Security Awareness ▪ Cyber Resilience Design for Critical Infrastructure 6.9 6.3 7.5 9.0 10.7 12.8 +9% 2019 2020 2021 2023 2025 2027 2020 5.8 2019 2021 2023 2025 2027 5.3 6.3 7.4 8.7 10.3 +9% Cybersecurity Products Cybersecurity Services € bln € bln

Global Cybersecurity Products¹ Market

Enduring growth

Includes Security Operations products such as SIEM, SOAR, UEBA, Threat Intelligence and related products
Includes Penetration testing, Vulnerability management and related services

Source: IDC, industry reports and expert interviews

MARKETS

GEOGRAPHICAL PRESENCE AND MARKETS SERVED

The company mainly operates in Italy, is also active in Spain and is increasing its presence in Germany and France. It also has a global presence, with clients in the Middle East, South East Asia, and Latin America.

	10.7	86%	14.4	85%	41.2	63%
	1.8	14%	2.6	15%	24.2	37%
	12.5	100%	17.0	100%	65.4	100%

Note: Calculated on operating revenues, Cy4Gate 2022 pro-forma full year

4 new Cyber Security solutions

services, through dedicated ecommerce, towards SMEs ▪ Price based on the average man-
days consumed, also factoring the risk of realization
twin)
Wide range of functions and possible applications such as:
- Systems cyber resilence testing in a "secure" environments
- Research and development of attack mitigation solutions
- Education and training for advanced Cybersecurity capabilities
detection (e.g., unknown APT1 and unknown vulnerabilities)
Presence of software elements (e.g., core license), usable through a hardware device ("mobile sweeper") that enables scanning
Multiple revenue models available: purchase, rental and "perpetual", "pay-per-use" use
SIEM), exploitable at tactical level ▪ Integration and correlation of CTI Feeds (commercial and Open Source) in the platform, then presented in specific reports providing a "vertical" view on Cyber threats (e.g., for selected industries)
Possibility to access different levels of customized service (i.e., Silver Gold, Advanced)

Financial performance

1H 2023 Key Data

Including other operating revenues; comparative 2022 does not include 1Q of RCS Group and DIATEAM
Negative result (loss for the period) Includes D&A related to Purchase Price Allocation and extraordinary costs

1H 2023 Revenues Breakdown

1H 2023 People Investment

Total personnel increased in 1H23 by a total of 51 resources:

Increase related to the DIATEAM acquisition, which allowed the Group to acquire specialised resources and technical skills to strengthen the cyber-security business line
Increase of 23 resources preparatory to the achievement of plan objectives (recruitment in the sales and engineering functions).

Note: Cy4gate Group results as of 30.06.2022 include 6 months of Cy4Gate + 3 months of RCS

Note: Cy4gate Group results as of 30.06.2023 include the consolidation of DIATEAM for the entire semester Note: Calculated on operating revenues

1H 2023 Profit & Loss

€ mln	1 1H 2023	1H 2022 2 Restated
Operating Revenues	33.1	16.0
Other Operating Revenues	1.0	0.7
Total Revenues	34.1	16.7
Services, Procurement & other operating costs	14.4	6.8
Personnel Costs	16.8	8.7
R&D Investments	(2.7)	(1.1)
Costs	28.5	14.4
EBITDA	5.5	2.3
EBITDA Margin	16%	14%
D&A [including leasing costs]	6.2	3.6
EBIT Adjusted	(0.6)	(1.3)
One off costs	2.4	2.4
D&A [related to PPA]	2.0	1.0
EBIT	(5.1)	(4.7)
Financial Income (Expenses)	(0.9)	(0.3)
Income Taxes	3.2	0.7
Net result	(2.8)	(4.3)

Executive summary:

Revenues +104% compared to 1H 2022, thanks to the the consolidation of the subsidiaries. The seasonality of the business is confirmed, concentrated in the second half of the year.

Costs are in line with the Group's growth objectives and distributed linearly over the year.

EBITDA increase compared to 1H 2022, with significant investments, especially in qualified personnel, but it always suffers from the combined effect of seasonality of revenues and linearity of costs.

Net result recorded a loss of € 2.8 million, mainly due to extraordinary costs (translisting and integration costs) and D&A costs (PPA and amortization), but a clear improvement compared to the same period of the last year (a loss of €4.3 million)

Including the consolidation of DIATEAM from 1st January 2023
Comparative 1H 2022 includes the redetermination of the effects of the purchase price allocation

1H 2023 Asset & Liabilities

€/000	1H 2023	FY 2022
Fixed assets	82.6	70.1
Inventory	0.5	0.8
Contract assets (liabilities)	2.7	(1.0)
Trade receivables	63.9	64.5
Trade payables	(13.3)	(10.6)
Trade Working Capital	53.7	53.7
Other assets (liabilities)	(0.4)	(4.4)
Net Working Capital	53.3	49.4
Net Capital Invested	135.9	119.5
Cash and cash equivalents	10.8	19.9
Financial assets	1.7	1.8
Financial Liabilities	(19.5)	(15.4)
Lease liabilities	(3.9)	(3.3)
Net Financial Position Adjusted	(10.8)	3.1
Adjustments for non rec. events		-
and/or extraordinary transactions	(5.4)
Shareholders' Equity	(119.7)	(122.5)
Sources	(135.9)	(119.5)

Executive Summary:

Fixed Asset increase mainly due to the effects of goodwill linked to DIATEAM acquisition

Net Working Capital increase mainly to contract assets and the decrease of other liabilities compared to the same period of the last year. The increase in Working Capital is typical of the seasonality that characterizes 1H.

Net Financial Position is negative impacted by DIATEAM acquisition agreement, the impact of IFRS16 and the typical cash absorption in the first half of the year related to the seasonality of the business

Shareholders' Equity stood at 119.7 million compared to 122.5 million at December 31, 2022

19 ESG SUSTAINABILITY REPORT Learn more

Our comittment for a greater sustainability

EthiFinance issued the first ESG Rating with a score of 64/100 Cy4Gate is placed above the average of the 154 companies subject to the rating belonging to the IT Sector

UN Global Compact & SDGs

By joining the United Nations Global Compact, CY4GATE shares, supports and applies the fundamental Ten Principles of the Global Compact in its sphere of influence and actively contributes to the achievement of the United Nations Sustainable Development Goals.

CY4GATE has included in 2023- 2025 business plan investments to adopt its Social Report structured on the indications contained in the GRI (GRI 200, 300, 400) and GBS standards.

And, we will contribute to the achievement of the following 6 of the 17 goals of the 2030 Agenda for Sustainable Development.

Goal 12 Goal 16 Goal 5

To ensure sustainable production and consumption patterns

To promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all

Relating to Peace, justice and strong institutions. Defence is a crucial component of security, and security constitutes the prerequisite for peace, prosperity, international

economic and social

To build resilient infrastructure, and to promote inclusive and sustainable industrialization and foster innovation

To achieve gender equality and empower all women and girls, for operational efficiency and social inclusiveness, actively promoting the implementation of the Women Empowerment Principles.