Digitouch — Investor Presentation 2018

Oct 22, 2018

DigiTouch results and investment opportunity

Meeting with the Investors Community

October 2018

THE MAIN INDEPENDENT DIGITAL MARKETING PLAYER IN ITALY

PROFESSIONALS

OFFICES Rome

A ONE-STOP-SHOP FOR DIGITAL MARKETING SOLUTIONS and an Enabling Partner for Brands Digital Communication & Transformation, thanks to an integrated offer of Strategy, Technology, Operations & Marketing Tools.

A MAR-TECH GROUP. Mar-Tech is the blending of marketing and technology. Anyone involved with digital marketing is dealing with Mar-Tech, since digital by its very nature is technologicallybased. The term "Mar-Tech" applies to major initiatives, efforts and tools that harness technology to achieve marketing goals and objectives.

Business model: one-stop-shop

Three strategic and integrated business units

ADVERTISING SERVICES 1

• Social Media solutions
• Consultancy
• Trading Desk
• Design, implementation, management & optimization of digital marketing communication campaigns and communities

Complete Offer

PERFORMANCE MARKETING SERVICES 2 3

• Seo solutions
• Vertical comparables: finance (mortageges and personal finance)
• Design, implementation, management & optimization of direct Performance Campaigns, based on sales results & leads generation metrics

Segmentation Experience Technology

DATA SERVICES

• Business Intelligence
• DMP
• Machine learning data services
• Data Service Provision (DSP) of highly profiled consumer data related to large industries: Telcos, Banking
• Data Management Platform (DMP) Services

Growth via M&A remains a key pillar of DigiTouch strategy.

Partnerships and technology

Client portfolio – Full diversification

Case History: large retailer - DigiTouch Client since 2014 Product development: Cross selling

Thanks to a complete product offer DigiTouch is able to increase customer value rapidly more than in the past

2014	2015	2016	2017	2018
SOCIAL MEDIA	SOCIAL MEDIA	SOCIAL MEDIA	SOCIAL MEDIA	SOCIAL MEDIA
	CREATIVITY	CREATIVITY	CREATIVITY	CREATIVITY
		DIGITAL MEDIA PLANNING	DIGITAL MEDIA PLANNING	DIGITAL MEDIA PLANNING
		PERFORMANCE MARKETING	PERFORMANCE MARKETING	PERFORMANCE MARKETING
			SEO	SEO
			DMP	DMP
				CONSULTANCY

Commitments presented in IPO

Consolidation in Italy

Acquisition of small medium companies to increase market share

Acquisition of 2/3 main market players in 18/24 months in order to acquire critical mass and to be more competitive in Digital Marketing Arena

DONE

Product Offer Development

Internal start-ups with the aim of increasing product capabilities and opportunities

2 • 4 MILLION €

Completing the offer transforming DigiTouch market offer into a complete on top Shop of Digital Marketing Communication

DONE

New Technologies

Internal development in data analytics, mining and monetization

Completing Audiens development and launching the DMP offer as one of the more comprehensive Data Management Solutions on the Market

DONE

Revenues Growth

• CONTINUOUS, STABLE GROWTH WITH REGULAR PROFITABILITY
• ORGANIC GROWTH BY 2017
• 2017 RESULTS:
• 28,9 MILLION EUROS REVENUES
• 4,4 MILLION EUROS EBITDA 9,7

Revenues & MOL progression DigiTouch business plan 2018-2020

PROGRESSIVE DIVERSIFICATION OF REVENUE STREAMS ON SBUs

A new Start: KPIs 2018-2020

With a new, upgraded perimeter, we can count on new potential and set new target goals

		2017	2020	∆%
INCREASE AVERAGE CLIENT VALUE	• Cross & Up Selling of different products & services Increase component of Performance for sales support • Integrate Data Management Technologies •	~ 200K €	~ 260K €	+30%
ACQUIRE NEW CLIENTS	• Developing commercial team and resources • Increase national sales coverage • Leveraging on distribution partners	~ 150	~ 200	+33%
MAXIMIZE CLIENTS RETENTION	• Develop new technology solutions • Increase level of technical integrations Improve Dashboard & Analytics •	7% CHURN	4% CHURN	-40%
MAINTAIN AVERAGE MARGINALITY	• Automatize service delivery • Maintain 30% business operational marginality • Increase revenues from data services	~15,0%	~15,0%	none

Growing primary target market, with potential much larger

POTENTIAL MARKET

50-55% of the turnover is generated by performance advertising activities

INTERNET ADVERTISING MARKET: TRENDS OF GROWTH

Italy digital marketing market is expected to grow additional 1,5 billions in 5 years

Data expressed in billion of Euros

Digital Marketing Competitive Map

LARGE 5 INTERNATIONAL GROUPS

• More than 100 million Euros turnover in Digital
• Complete Product Offer
• Major Large Clients
• Business Development based on tenders

MEDIUM AGENCIES & DIGITAL GROUPS

• Between 25 and 50 million Euros turnover
• Complete Product Offer
• Medium Large Clients
• Business Development partially based on tenders

MORE THAN 1.000 SMALL AGENCIES

• Between 1 and 5 million Euros Turnover
• Partial Product Offer
• Small medium Clients
• Business Development based on relationships

MAJOR CONSULTANCY COMPANIES

Business priorities

INNOVATE AND UPGRADE THE OFFER!		AGGREGATE!
	Omnichannel approach		Increase customer base
	Data-driven marketing & analytics		Empower SW development capabilities
	Technology services		International expansion

Data expressed in thousand Euro

Track Record M&A

Last deal: Purple Ocean

VALUE OF ECOMMERCE PURCHASE B2C BY ITALIAN CONSUMERS

E-commerce in 2018 in Italy € 27 billions +15% YoY

With the acquisition of Purple Ocean, Italian company that offers innovative solutions of managed services and software development for e-commerce, Gruppo DigiTouch enriches its products/services portfolio with three new micro-services and strengthen its offer to e-commerce brands:

• Purple Commerce: realization of e-commerce solutions highly tailored-made;
• PurpleX: tool specialized in automatized controls on all websites, identification of technical-functional and publishing anomalies, simulation of users' behavior during the visit on a website;
• Purple Platform: platform specialized in services of critical business on owned infrastructures, distributed in three data centers in Italy, with specific certifications (Tier III, Tier IV Plus) and geographically located in a strategic way in order to guarantee the compliance to disaster recovery criteria.

PROFIT & LOSS H1-2018

Data expressed in thousand Euro		H1 2018		H1 2017	Change
	%	[A]	%	[B]	[A]-[B]	%
Operating revenues	91,8	14.278	91,6	12.399	1.880	15
Other revenues	5,2	815	5,0	683	132	19
Internally generated fixed assets	2,9	453	3,3	451	1	0
Total Revenues	100	15.546	100	13.533	2.013	15
Operating Expense	73,3	11.395	69,7	9.428	1.967	21
Personnel expense	13,2	2.047	15,5	2.098	(51)	(2)
EBITDA Adjusted	13,5	2.104	14,8	2.007	97	5
Non-recurring expense	1,3	195	0,9	127	69	54
EBITDA	12,3	1.908	13,9	1.880	28	1
Amortization/depreciation/
Provisions and write-downs	8,4	1.308	13,9	1.879	(571)
EBIT	3,9	600	0,0	1	599
Financial income (charges)	(1,0)	(161)	(1,2)	(166)	6
Adjustmentto the carrying value of financial
assets	0,0	-	0,0	-	-
EBT	2,8	440	(1,2)	(165)	604
Current and deferred income taxes	(1,0)	(155)	(1,0)	(141)	(13)
Consolidated Net Income	1,8	285	(2,3)	(306)	592

BALANCE SHEET H1-2018

Data expressed in thousand Euro	30 June 2018	31 December 2017	Change
	[A]	[B]	[A]-[B]	%
Non-current assets	13.916	14.547	(630)	(4,3)
Goodwill	9.514	10.212	(698)	(6,8)
Development costs	256	226	30	13,3
Other intangible fixed asset	3.550	3.500	50	1,4
Tangible fixed assets	290	300	(11)	(3,5)
Financial fixed assets	307	309	(2)	(0,6)
Current assets	885	(2.126)	3.012	(141,6)
Receivables form customers	9.566	10.108	(543)	(5,4)
Payables to suppliers	(8.567)	(9.890)	1.323	(13,4)
Accruals and prepayments (deferrals)	121	(107)	228	(212,5)
Other current asset and liabilities	(234)	(2.237)	2.003	(89,5)
Employees' termination benefits provision	(521)	(473)	(49)	10,3
NET INVESTED CAPITAL	14.280	11.947	2.333	19,5
Gruppo DigiTouch's Net equity	13.811	14.083	(272)	(1,9)
Third parties net equity	-	-	-	-
Shareholders' equity	13.811	14.083	(272)	(1,9)
Non-current and current payable Debts
- short term	2.030	2.390	(360)	(15,1)
- long term	5.150	5.832	(682)	(11,7)
Cash and cash equivalents	(3.913)	(6.219)	2.306	(37,1)
Securities held for trading	(1.809)	(1.809)	-	-
Currentloans	(989)	(2.330)	1.342	(57,6)
Net financial position	469	(2.136)	2.605	122,0

NFP at 30 June 2018

During the first semester:

• 1 NFP is decreased of about 2.5 millions;
• 2 The Group managed the cash out of:
• Dividends about 430 thousands of Euro;
• Reduction of the commercial and other liabilities about 3.3 million of Euros.

NFP (Debt Maturity)

Winning competitive advantages developed all over the years Investment highlights

SIGNIFICANT INTERNAL INVESTMENT IN TECHNOLOGY AND BIG DATA

1,0 million on yearly base to 2020

AGGREGATION ROLE

Continuous effort on aggregating marketing potential and market share

PROGRESSIVE BUSINESS GROWTH

A clients portfolio made of relevant medium and big size clients, with long term relationship ~ 200 clients expected in 2020

MARKET GROWTH, RELEVANCE & POTENTIAL

Expected 3 billions industry only in Italy

SENIOR TEAM

Top management with outstanding track records in digital marketing, tech services, M&A

MARKET UNDER FAST CONSOLIDATION

Around 70 acquisitions done in Western Europe in H1-2018

THANK YOU

Simone Ranucci Brandimarte, President, Gruppo DigiTouch simone.ranucci@gruppodigitouch.it

Viale Vittorio Veneto 22 Entrance Via Zarotto 2A 20124 Milan, Italy

T 02 89295100 W GRUPPODIGITOUCH.IT S