Franchetti — Investor Presentation 2023

Sep 13, 2023

13th September 2023

FCH | 1H 2023 Financial Results

1

Franchetti Spa

1H 2023 Results

Disclaimer

"This presentation and the information contained herein (unless otherwise indicated), are provided by Franchetti S.p.A. ("Franchetti") solely for informational purposes. By attending this presentation or otherwise viewing this presentation, or having access to the corresponding information, you are agreeing to be bound by the following. This presentation and its contents are strictly confidential and may not be distributed or passed on to any other person or published or reproduced, in whole or in part, by any medium or in any form for any purpose.

The content of this document has a merely informative and provisional nature and is not to be construed as providing investment advice. This document does not constitute a prospectus, offering circular or offering memorandum or an offer of securities for sale, or a solicitation of an offer to purchase, subscribe for or otherwise acquire, any securities of Franchetti, in any jurisdiction, including but not limited to the United States, Australia, Canada or Japan or any other jurisdiction where such an offer or solicitation would require the approval of local authorities or otherwise be unlawful. Neither this document nor any part of it nor the fact of its distribution may form the basis of, or be relied on in connection with, any contract or investment decision in relation thereto. The shares of Franchetti S.p.A. (the "shares"), as referred to in this document, have not been registered and will not be registered pursuant to the USA Securities Act of 1933, as amended (the Securities Act) or pursuant to the corresponding regulations in force in the other countries, and they may not be offered or sold in the United States or to US citizens unless these securities are registered in compliance with the Securities Act, or if an exemption from the requirements of Registration by the Securities Act is set forth.

The information herein does not intend to be comprehensive or to include all the information that a potential or existing investor may wish to have. In all cases, the interested parties must carry out their own investigations and analyses of Franchetti which may include an analysis of the data of this document, but they must also include an analysis of other documents, including the financial statements for the period. This presentation contains forward-looking statements. Forward looking statements include, but are not limited to, all statements other than statements of historical facts contained in this presentation, including, without limitation, those regarding Franchetti results of operations, strategy, plans, objectives, goals and targets.

The information contained in this presentation is provided as of the date of this presentation and is subject to change without notice. The information contained in this document may be updated, completed, revised and amended and such information may change materially in the future. Franchetti is under no obligation to update or keep current the information contained in this presentation. The information contained in this presentation has not been independently verified. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. Neither Franchetti, its shareholders, nor any of its affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with the presentation. Any proposed terms in this presentation are indicative only. The distribution of this document and any related presentation in other jurisdictions than Italy may be restricted by law and persons into whose possession this document or any related presentation comes should inform themselves about, and observe, any such restriction. Any failure to comply with these restrictions may constitute a violation of the laws of any such other jurisdiction."

Index

• 1. Company Overview
• 1. Business Model
• 1. Reference Market
• 1. Strategies
• 1. Key Financials 1H 2023
• Annex

1. Company Overview

Company at a glance

Franchetti Spa is an international group specialized in the planning, diagnosis and interventions aimed at safety and predictive scheduling of maintenance activities on infrastructural networks

Pioneers in the predictive maintainance

Charting a history of success

Sustainable management of existing infrastructure

Franchetti core business is monitoring, diagnostic and intervention planning over whole life-cycle of critical infrastructure with a predictive approach

Areas of intervention

Facilities and Infrastructures

Analysis and evaluation of existing structures using innovative techniques

Mobility and Transport

Reliable solutions for transportation engineering

Services

Analysis of the existing infrastructure: inspection, monitoring and maintenance

• Assessment of the safety and degradation of existing structures
• Monitoring of large-scale infrastructure assets monuments, bridges and viaducts
• Analysis of the impact of maritime and vehicular traffic

2

• Dynamic and vibration tests using innovative techniques

1

Interventions on existing structures

• Consolidation and structural reinforcement
• Seismic improvement and adaptation
• Extraordinary maintenance, restoration and conservative restoration
• Widening, upgrading and lifting of bridges and viaducts

Design of new buildings

• Residential, educational, commercial and industrial buildings
• Bridges, viaducts and infrastructure

Software

Argan

Argan is the artificial intelligence software, in-house designed by Franchetti Spa, to carry out the predictive maintenance of infrastructures

Pathwork

Pathwork is an original software designed and built by Franchetti Spa which aims to achieve optimal planning of the construction site of a stretch of road work.

2. Business Model

Business Model: a deep specialized expertise

Thanks to a deep know-how and expertise in the engineering field the Group is able to access the structural damage in a wide range of existing structures and define the best intervention strategies during their lifetime

The Group's commercial structure

• Tender office (selects the public tenders to participate in and draws up the necessary documentation)
• Area managers (carry out commercial activities for direct assignments and manage the relationship with customers in the area)
• Branches (they ensure the presence of the markets of interest in the territories)

3. Reference Market

Reference Market

Franchetti's reference market is related to infrastructure maintenance services, a strategic sector for economic and environmental sustainability

Market components and trends

• 1. Technological Advancements
• 2. Condition Monitoring
• 3. Predictive Maintenance
• 4. Data Analytics and AI
• 5. Remote Monitoring
• 6. Government Initiatives

• Infrastructure maintenance services: related engineering services is estimated at more than € 20.00 billion*, since most of the infrastructure in the world was built after the Second World War and received an insufficient level of maintenance.
• The infrastructure market includes railways, ports, highways, airports, water, sanitation and waste, with business opportunities in design and construction.
• Strategic and fast-growing sector with high potential for the predictive maintenance of infrastructure due insufficient level of maintenance through continuous monitoring and real time monitoring

*Source: Integrae SIM Equity Research, 2022

Competitors arena

Company		Activities
	Infrastructure design	Facility and hospital design	Structural instrumental monitoring	SW and AI development for asset management	Maintenance planning support

Franchetti is present in all areas of activity, being the most integrated player particularly in the areas of infrastructure design, facility and hospital design, structural instrumental monitoring, development of Software and Artificial Intelligence for asset management, contracting

station support

F●

Additional success factors and an element of competitive advantage for Franchetti is. innovation and use of technology and software.

for maintenance planning.

4. Strategies

Strategies

The Group intends to pursue the development and growth strategy internally and externally

• 1. Strengthening of the presence in the markets where the Group already operates
• 2. Acquisitions of companies that carry out activities consistent with the Group's core business
• 3. Expansion of the offer of ICT services on predictive maintenance
• 4. Expansion into new sectors contiguous to that of infrastructures
• 5. Expansion into relevant international markets
• 6. Benefitting from the Brasilian Growth Acceleration Program (PAC), Italian National Recovery and Resilience Plan (PNRR), the Jobs Plan in the USA, the Canada Plan and the National Infrastructure Pipeline (NIP) in India

5. Key Financials 1H 2023

Highlights 1H 2023

In H1 2023 Franchetti recorded strong growth in all economic and financial indicators and a steady increase in Group backlog with revenue visibility up to 2025.

Revenues (in € '000)	Value of production (in € '000)	Ebitda (in € '000)
2.282 +55.2% vs 1.471 1H 2022	2.885 +65.7% vs 1.741 1H 2022	0.475 +156.3% vs 0.185 1H 2022
Net income (in € '000)	NFP in (€ '000)	Backlog as 2025 (€M)
0.171	0.316	24.2

Revenues, Ebitda and Net Result

• In the first half of 2023, the Italian, as well as European and global markets in general, related to the maintenance of large-scale road infrastructure worked on increasingly higher levels of business than in previous years allowing Franchetti to reach a strong growth for 55.2% vs 1H 2022.
• Franchetti's specific expertise allowed it to benefit from positive effects of the italian PNRR which has generated considerable leverage in the area of large infrastructure maintenance.
• Production costs amount to Euro 1,269,114, while EBITDA, equal to Euro 475,043, records an increase of 156.3% (compared to Euro 185,368 in the first half of 2022).
• The net result is equal to Euro 171,268, compared to Euro 148,690 in the first half of 2022 (+15.2%).

Key Financials 1H 2023 - Balance Sheet

NFP

Net Financial Position 1H 2023 (in € '000)

• Net Financial Debt is equal to Euro 315,492 (debt) compared to Euro -155,690 (cash) at 31 December 2022. This increase is due in particular to the growth in net current financial debt, which records a change of Euro 677,799 (from Euro -559,309 on 31 December 2022 to Euro 118,490).

Shareholding and share capital

RANCHETI
BRIDGE DIAGNOSTICS AND PREDICTIVE MAINTENANCE

Admission Price	€ 3,00
Stock Ticker	FCH
Stock ISIN	IT0005508574
Warrant Ticker	WFCH25
Warrant ISIN	IT0005508558
Market	Euronext Growth Milan

% on Ordinary Shares

Board of Directors
Paolo Franchetti	Chairman and CEO
Michele Frizzarin	Director
Rony Hamaui	Director
Stefano Granati	Independent director
Remy Cohen	Independent director

The BoD will remain in office until the approval of the financial statements of Franchetti S.p.A. as of December 31, 2024

Board of Statutory Auditors
Federico Caprin	Chairman
Luigi Solinas	Auditor
Sonia Poletto	Auditor
Alberto Signorini	Alternate Auditor
Alessandro Prandin	Alternate Auditor

The Board of Statutory Auditors will remain in office until the approval of the financial statements of Franchetti S.p.A. as of December 31, 2024

Consolidated P&L

P&L*

	30/06/2023	30/06/2022
Revenues from sales and services	2,282,242	1,470,534
+ Change in inventories of work in progress, semi-finished and finished goods	539,543	266,992
+ Other revenues and income	62,738	3,753
Value of Production	2,884,523	1,741,279
- Raw materials and Changes in Inventories costs	-44,484	-238,401
- Services costs	-1,622,809	-938,838
- Costs for use of third party assets	-128,741	-91,875
- Personnel costs	-548,191	-260,972
-Other operating costs	-65,256	-25,825
Total production costs	-2,409,481	-1,555,911
EBITDA	475,043	185,368
EBITDA Margin	16%	11%
- Intangibles D&A	-89,263	-4,135
- Tangibles D&A	-52,421	-12,472
EBIT	333,358	168,761
- Financial charges	-51,457	-32,576
+ Forex gains and losses	-56,387	31,941
Earnings before taxes	225,515	168,126
- Income taxes	-54,247	-19,436
Net Income	171,268	148,690

* Limited audited data

Consolidated Balance Sheet

BALANCE SHEET*

	30/06/2023*	31/12/2022
+ Inventory	699,608	154,488
+ Trade receivables	3,885,515	3,673,083
- Trade payables	-906,171	-846,272
Trade net working capital	3,678,952	2,981,299
+ Other assets	1,289,356	1,240,557
- Other Liabilities	-1,407,191	-1,399,913
Net Working Capital	3,561,117	2,821,943
+ Intangible fixed assets	1,563,465	1,580,631
+ Tangible fixed assets	81,094	89,486
Gross Invested Capital	5,205,676	4,492,060
- Severance pay	-55,288	-41,218
Net invested capital	5,150,388	4,450,842
+ Short-term payables to banks	2,486,117	1,675,020
+ Medium- to long-term payables to banks	179,896	403,619
+ Payables to other lenders	17,106	293,564
Total financial debts	2,683,119	2,078,639
- Cash and Cash equivalents	-2,367,627	-2,234,329
Net Financial Position	315,492	-155,690
+ Share capital	350,634	347,039
+ Reserves	4,312,994	3,059,156
+ Net result	171,268	1,200,337
Shareholders' equity Total funds and Shareholders' equity	4,834,896 5,150,388	4,606,532 4,450,842

* Limited audited data

Consolidated Cash flow statement

CASH FLOW STATEMENT, INDIRECT METHOD*

	30/06/2023*	31/12/2022
A) Cash	2,367,627	2,234,329
B) Cash equivalents		-
C) Other current financial assets
D) Cash and cash equivalents (A+B+C)	2,367,627	2,234,329
E) Current financial debt	2,486,117	1,675,020
F) Current part of non-current financial debt	-	-
Other current liabilities	-	-
G) Current financial debt (E+F)	2,486,117	1,675,020
H) Net current financial debt (G-D)	118,490	-559,309
I) Non-current financial debt	197,002	403,619
J) Debt instruments	-	-
K) Trade and other non-current payables	-	-
L) Non-current financial debt (I+J+K)	197,002	403,619
(M) TOTAL FINANCIAL DEBT (H+L)	315,492	-155,690
OVERDUE TAX ADJUSTED	634,289	206,818
TOTAL ADJUSTED NET FINANCIAL DEBT	949,781	51,128

* Limited audited data

Management Team

Paolo Franchetti - CEO & Partner

• Civil engineer specialized in the dynamics of existing and monumental structures
• He is a member of the Study Commission for the Port of Venice and of the Maritime Traffic Evaluation Commission of the Giudecca Canal and carries out a regular activity as an Associate Professor at the University of Padua

Gianluca Del Fabbro – General Manager

• Management engineer, manager with 25 years of experience in globally active industrial realities, Del Fabbro will be in charge of continuing and accelerating the process of continuous growth and managerialization of the company both in the national and international market, also through the start-up and/or or the acquisition of new companies
• Previously he held various managerial positions in Italy and abroad both in multinationals and in SMEs

Omar Emiliano Salustri – CFO Franchetti Italia

• Doctor in Economics and Commerce, enrolled in the Register of Statutory Auditors at the MEF
• He deals with the administrative, accounting and financial management and personnel management of small and medium-sized companies, up to multinationals
• He carries out auditing and control activities as a member of Boards of Statutory Auditors

Michele Frizzarin - Partner & R&D Director

• Structural engineer specialized in the field of analysis and verification of existing structures, he deals with inspection and structural analysis of concrete, steel and masonry infrastructures and historic and monumental buildings
• He has deepened his training in the study of the dynamic and seismic behavior of structures

Certification

Contacts

Investor Relations Manager Paolo Franchetti ir@franchetti.it

IR Advisor T.W.I.N. Srl franchetti@twin.services