Cy4Gate 1H 2024 Financial Results

September 13, 2024

AGENDA

➢ 1H 2024 Financials
➢ Strategy & Outlook

EMANUELE GALTIERI MARCO LATINI

CEO & General Manager CFO & Investor Relations Manager

The results of the first half of 2024 confirm the solidity of the CY4Gate group in governmental sales; seasonality of turnover - historically concentrated in the second half of the year - is still relevant partially offset by XTN and RCS sales;

The Value of Production compared to 30 June 2023 slightly suffered the lack of revenues related to foreign orders in the Forensic Intelligence sector, affected by the uncertainty of the international geopolitical scenario. Sales growth in Italy in the defence and justice sector partially filled the revenues gap.

The acquisition of XTN early this January, in the frame of the Group's M&A operations strategy, confirms the objective of CY4Gate management to ensure the implementation of the path undertaken to create a European cyber intelligence and cyber security champion

1H 2024 Key Data

Negative result (loss for the period) includes D&A related to Purchase Price Allocation and extraordinary costs

1H 2024 Revenues Breakdown

By business line By geographical area

1H 2024 People Investment

Total personnel increased in the first half of 2024 by a total of 36 resources:

Increase of 25 resources related to the XTN acquisition that will strengthen the cybersecurity line
Increase of 40 resources in engineering and commercial & staff compared to 29 exits

1H 2024 Profit & Loss

€ mln	1 1H 2024	1H 2023
Operating Revenues	29.8	33.1
Other Operating Revenues	1.3	1.0
Total Revenues	31.1	34.1
Services, Procurement & other operating costs	12.8	13.2
Personnel Costs	15.9	15.4
Costs	28.8	28.6
EBITDA Adjusted	2.4	5.5
D&A [including leasing costs]	(7.6)	(6.4)
EBIT Adjusted	(5.2)	(0.9)
D&A [related to PPA]	(2.3)	(2.0)
EBIT	(7.4)	(2.9)
Financial Income (Expenses)	(1.5)	(0.9)
One off costs	(0.2)	(2.4)
Income Taxes	(0.06)	3.3
Net Result	(9.2)	(3.0)
Net Result Adjusted	(7.4)	1.1

1H 2024 Asset & Liabilities

€ mln	1H 2024	FY 2023
Fixed assets	97.5	87.9
Inventory	0.9	0.8
Contract assets (liabilities)	3.5	3.1
Trade receivables	50.8	53.7
Trade payables	(13.4)	(14.4)
Trade Working Capital	41.9	43.1
Other assets (liabilities)	(13.6)	(6.3)
Net Working Capital	28.2	36.8
Net Capital Invested	125.7	124.8
Cash and cash equivalents	22.6	17.6
Financial assets	1.4	1.4
Financial Liabilities	(45.3)	(28.8)
Lease liabilities	(4.1)	(3.8)
Net Financial Position	(25.4)	(13.6)
Put option liability	(6.3)	(5.7)
Book value of treasury shares in portfolio	(3.2)	(1.6)
Net Financial Position Adjusted	(15.9)	(6.3)
Shareholders' Equity	(100.3)	(111.1)
Sources	(125.7)	(124.8)

Our growth Strategy: Market

Cy4Gate Group portfolio – cyber intelligence & cyber security products - perfectly fits with the following 3 fast growing markets, both in Italy and abroad:

Defence

Security & Law Enforcement

Corporate

Increasing internal and external security threats and undergoing military network-centric modernization;
Market CAGR 8% predicted to grow to 1350B\$ in 2030 from 750B\$ (2022).
Digital crime via digital/electronic devices is LEAs biggest challenge; AI is a key enabler;
Market is globally growing at 9% CAGR up to 2028;
Need for cases management, track evidences, data gathering and correlation, creation of reports.
Double digit growth for digital transformation market (around 20% CAGR to 2027);
Cyber security market is underpenetrated in terms of for SMEs, targets of massive attacks.

Products involved

Decision Intelligence & AI (Quipo) for C2 platforms
▪Cyber security products and services bundle (RTA, Diateam, CTI, customization services)
Decision Intelligence & AI (Quipo & Mito) for data gathering and correlation ▪Forensic Intelligence suite
Decision Intelligence & AI (Quipo)

▪Cyber security products and services bundle (RTA, Diateam, CTI, Pronto Cyber, Services) for a 360° capabilities coverage

Our growth Strategy: Actions

2024 2025-2026

Defence

Security & Law Enforcement

Corporate

European Defence Contractors ▪ Penetrate new geographies through Cyber Academy and Cyber Labs

▪ Strengthen industrial partneships with Tier-1 Italian and

Increase direct domestic and international market penetration leveraging mother company network
Consolidate the Italian market, focusing on more relevant P.P.O. districts whilst decreasing exposure on less profitable Offices
Maintain commercial advantage while mitigating need for relevant investments through selected partnership with specialized boutique firms
Increase market penetration of newly developed tactical devices in Italy and abroad
Shift from products to capabilities offering to improve competitiveness (cyber security platform)
Complement sales force efforts through new effective channel partnerships (Attiva, Innovery)
Enlarge domestic market penetration in big/medium size corporation through a reinforced and well seasoned sales team
Pursue up-selling and cross-selling opportunities in new corporate segments (banking, automotive, luxury, travel) thanks to XTN acquisition
Capture EU funds (NATO, EDA, ESA) for R&D in the cyber also through industrial partnership
Take part to international consortia or JVs for pluriannual defence programs
Progressively gain relevant shares and presence in the more stable European region
Ensure consistent growth in the Spanish market leveraging on our pluriannual presence in the Country (Dars), to create Cy4 second domestic market for revenues after Italy.
Expand business to new geographies in E.U. partnering with foreign channels and fostering development of an international sales team
Push on inorganic growth via M&A

Opportunities

The strategy will be a key enabler to:
✓ intercept growing Defence market needs, characterized by global relevant investments, huge size and pluri-annual contracts, enabling quick creation of backlog, thus supporting Corporate sales in seasonality risks reduction
✓ further consolidate leadership position in Italy (notwithstanding sector justice reform) and boost growth primarily in E.U.
✓ expand Corporate market presence to support creation of recurring stream of regular revenues throughout the year, accelerating the process of seasonality mitigation