Relevant information Trading Update 9M20

Lisboa, 5 November 2020

Novabase – Sociedade Gestora de Participações Sociais, S.A., under the terms and for the purposes of article 17 of Regulation (EU) no. 596/2014 of the European Parliament and of the Council and article 248-A of the Portuguese Securities Code, discloses today to the market a Trading Update regarding the nine months 2020, whose essential features are included in the presentation attached.

In addition, it is further informed that a webcast on this Trading Update will be held today, at 5 pm Lisbon time (GMT). More information can be found at www.novabase.pt.

Privileged Information

NEXT-GEN IT SERVICES COMPANY

November 5, 2020

Disclaimer

This presentation includes sector and forward-looking statements involving uncertainties that could cause actual data to differ materially from those indicated.

These statements relate only to this date of presentation, and Novabase assumes no obligation to update the information or to notify in the event that any question changes or is identified as incorrect, except when required by law or specific regulation.
Thus, neither Novabase, nor any of its subsidiaries, its administrators, members of the other corporate bodies or employees, make any declaration or commitment on the accuracy or completeness of the information and do not assume, therefore, any type of obligation or responsibility.
Financial reporting terms used in this Report are mostly in accordance with International Financial Reporting Standards (IFRS) but will include certain non-IFRS financial measures of our performance (APMs). APMs used by Novabase are intended to provide additional information, more comprehensive and relevant to users, and are applied consistently in all periods reflected in this release. Reconciliation of each of these APMs to its most directly comparable IFRS financial measure can be found in the end of this Report. All amounts in this presentation are expressed in million Euros, except otherwise stated.
This presentation is provided for informational purposes only and does not constitute a document for the offer of securities, and its distribution or use by any person or entity is forbidden without prior authorization from Novabase.

9M20 Outlook

CEO

Message from João Nuno Bento

"We are very happy with the 9M20 performance indicators. The company continues to execute smoothly under challenging circumstances.

Overall, KPIs confirm the trends observed in the 6M report:

Turnover increased 12% YoY;
85% of Next-Gen Revenues captured from Top Tier Clients;
Solid Net Cash position of 49.4 M€;
NBA share price increased 31%;
The Value Portfolio slowed its growth to 12%YoY reflecting localized Covid-19 impacts.

The disposals of GTE and Collab, and the strategic focus on Next-Gen created a more homogeneous business model. We are concluding the necessary adjustments to put in place a more efficient support structure.

The Celfocus 45% stake acquisition allowed us to merge our Telco and Financial Services Verticals, unleashing significant cost synergies. We believe commercial synergies will follow.

Although Covid-19 did not impact significantly our performance in the 9M20, we remain cautious in the short-term but optimistic in the medium term.

As the second wave of the Pandemic is now unfolding in Europe, we expect several shortterm impacts:

New clients' acquisition will remain very challenging.
M&A activity will be delayed.
A negative sentiment during the 2021 budgeting season may lead our clients to cut on investments.

For the mid-term, we remain optimistic. In fact, some recent outlooks predict Digital Investments will continue to grow at compounded rates over 15% till 2023*.

On the 28th October, Novabase Shareholders Agreement Subscribers, representing 40.12% of the Company's shares, disclosed the intention to propose Luís Salvado as Chairman and CEO for the next mandate (2021 to 2023).

The Board, Shareholders, and all Stakeholders can count on me to serve the company with full commitment till the last day of my tenure.

Thank You All for your continued support!"

*IDC FutureScape: Worldwide Digital Transformation 2021, October 2020

9M20 in Review

Value

Portfolio:

Strategy

2019+

Execution

Relevant acquisition initiative to grow Next-Gen completed

Next-Gen strengthened with the acquisition of Vodafone Portugal's equity stake in Celfocus for an initial price of 20 M€, subject to adjustments.

Full ownership of Celfocus is key to Novabase's strategy of becoming an "Next-Gen IT Services Company", enabling the Group to allocate resources and explore synergies in a more efficient way.

(1) Accounted in FY19.

Next-Gen: Strategy 2019+ Execution

Generating value to fund Next-Gen strategy

Novabase continues to successfully deliver on its strategy, with the sales of Collab and GTE Business (1), which combined represent a divestment of over 60% of its Value Portfolio segment revenue (2):

Sale of Novabase's equity stake in Collab to the swedish Netadmin System I Sverige AB, for a 2019 Price to Sales multiple of 0.92x, subject to adjustments;
Adjustment to consideration on the sale of GTE Business, raising the 2019 Price to Sales multiple of this transaction to 1.01x.

Novabase on the News

3/11 || Novabase re-entered PSI20 as of March, 23.
4/23 || Luís Salvado met with the President of Portugal, to discuss the impact of the pandemic and prospects on IT sector.
7/6 || Euronext Lisbon CEO congratulated Novabase for its 20 years of stock market, marked by adherence to good practices, resilience and ability to reinvent itself.
7/9 || Novabase was awarded as the most innovative company in people management by the Human Resources Portugal Magazine, for the 2nd year in a row.
10/28 (3) || Novabase Shareholders Agreement Subscribers report intention to propose Luís Salvado as Chairman and

CEO for the next mandate (2021 to 2023). (3) Subsequent event to 9M20. 6

⁽²⁾ Baseline FY18 (previous to Strategic Update 2019+).

Relevant Information

Acquisition of Celfocus equity stake

Novabase buys Vodafone Portugal's equity stake in Celfocus

On April 24, 2020, Novabase has entered into a sale and purchase agreement with Vodafone Portugal, S.A. ("Vodafone") to buy the shares representing Vodafone's equity stake in Celfocus, S.A. (45.001%).
The agreed purchase price for Vodafone's entire shareholding was 20 M€, fully paid on April, 30.
There may be an additional price adjustment of 7.5 M€, to be paid for in services, which could raise the final purchase price to a maximum of 27.5 M€, as a result of possible annual adjustments until 2023 related to service hiring guarantees of 10 M€ per year for three years given by Vodafone.
Due to the importance of this transaction for the execution of the strategy and given Novabase's financial robustness, the Board of Directors approved the acquisition, despite the current context of uncertainty. This transaction does not require any significant guidance reframing regarding the Strategic Update 2019+.
Celfocus employed over 650 employees. In 2019, it had a Turnover of 65 M€, EBITDA of 6.3 M€ and cash holdings of 16.1 M€.
Prior to this transaction, Novabase held a 54.997% stake in Celfocus, S.A..

Relevant Information

Price adjustment on the sale of GTE

Adjustments to consideration on the sale of GTE Business

Following the previous announcements to the market in relation to the celebration and completion of the sale, to VINCI Energies Portugal, S.A., of the "Application and Data Analytics" business for the Government, Transport and Energy sectors ("GTE Business"), the parties confirmed, on May 11, and a net adjustment to the price initially paid by the purchaser and the verification of the earn-out which was dependent upon the final performance of the GTE Business in the financial year of 2019.
As such, the consideration obtained by Novabase after these events is 39.3 M€ corresponding to the sum of the price initially agreed of 33 M€, the earnout of 3 M€ and the net adjustment of the remainder.
Considering the above mentioned, the capital gain reached 14.9 M€ (it is recalled that the capital gain registered in 2019 was 12.0 M€).
Therefore, the 9M20 accounts reflect the adjustment to the final capital gain of 2.9 M€ and the cash inflow of the total consideration on the sale, of 35.4 M€.

Relevant Information

Sale of Novabase's equity stake in Collab

Novabase sells Collab to the swedish Netadmin System I Sverige AB

On March 19, 2020, Novabase and Netadmin System i Sverige AB entered into a sale and purchase agreement for all shares representing COLLAB – Soluções Informáticas de Comunicação e Colaboração, S.A. share capital, subsidiary held in 72.45% by Novabase Business Solutions, S.A. and in 17.75% by Fundo Capital Risco NB Capital. The completion of the sale and purchase also occurred on this date, with the delivery of the shares against payment of part of the price.
The agreed initial purchase price was 6 M€, to which a potential annual earnout may be accreted, up to a maximum of three annual periods, depending on COLLAB's performance, as set out in the agreement.

• Of the agreed initial purchase price, 1.5 M€ was temporarily held by the purchaser, as foreseen in the sale and purchase agreement. The agreed purchase price is also subject to positive or negative price adjustment clauses agreed between the parties.

As a result, Novabase recorded in 9M20 a gain on this transaction amounting to 0.2 M€, which falls within the range of 0.1 M€ to 0.8 M€ of estimated capital gain disclosed, but still subject to adjustments.
To be noted that this subsidiary represented a 6.5 M€ turnover in 2019, and employed around 60 employees.

Covid-19

In compliance with ESMA guidelines

Managing uncertainty • Our solid customer base, robust liquidity

Since the beginning of the health crisis, Novabase has developed and implemented a contingency plan, defining 3 priorities: ensure safety and health for all its employees and stakeholders, preserve the Company's financial strength and plan the future.
Efficient decision-making process allowed Novabase to rapidly adapt processes and action plans in response to the pandemic, namely:
- Remote work conditions were provided overnight for nearly 100% of employees (offices were reopened in 2Q with the Covidout security seal by ISQ, though teleworking continues to be encouraged);
- The initial intention of proposing to the 2020 GMS a 0.85 €/share remuneration was reversed by the Board of Directors, however maintaining the commitment (1) of distributing 1.5 €/share in 2019-2023.
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position, and adequate capital levels, as well as the resilience of our business model and proven agility to adapt the organization, make us believe that we are well prepared to address the challenges and risks of the evolving pandemic. Additionally, we consider that the pandemic may pave the way towards an acceleration of the digital economy, where Novabase will have a relevant role.
No major Covid-19 impacts were observed in 9M20, despite some performance effect on Value Portfolio segment related to lockdowns, yet Novabase remains cautious. The next months are still surrounded by great uncertainty, due to new waves of the pandemic with a duration and extent still difficult to estimate, and new containment measures being taken in Portugal and throughout Europe, our main target market. In terms of future impacts, some delay in M&A is expected and, due to current travel restrictions, commercial access to new clients could be more challenging.

Financial Highlights

9M20 performance: Positive despite the pandemic context

Turnover increased 12% YoY, with Next-Gen representing 72%
62% of Next-Gen Turnover is generated outside Portugal, from which Europe & ME accounts for 89%
85% of Next-Gen Revenues captured from Top Tier Clients
Solid Net Cash position of 49.4 M€
Talent Pool of 1739 employees
Novabase share price increased 31% in 9M20, up to 3.37 € in the last tradable day
No relevant impacts due to Covid-19 pandemic observed in 9M20

Turnover and EBITDA do not include GTE Business nor Collab, qualified as discontinued operations according to IFRS 5, for all periods in this presentation.

Turnover

Turnover increased 12% YoY, with Next-Gen representing 72%

100

No major impacts were observed in 9M20 due to the Covid-19 pandemic, both in Next-Gen and in Value Portfolio segments.

Next-Gen Segment

Next-Gen grows by double-digit in Turnover, +11% YoY...

International Turnover grows 13% YoY.

62% of Next-Gen Turnover generated outside Portugal.

Europe & ME accounts for 89% of international operations, registering an increase of 10% YoY.

Next-Gen Segment

Next-Gen working on Multi Industry approach…

Targeting clients with ambition to transform, with 9M20 still focused on Telco.

… and building long term partnerships

Large accounts increased, both in number and in Revenues (+5% YoY).

% of Revenues from Top Tier clients (1)

Total number of clients in 9M20 increased to 109 (104 in 9M19).

(1) Top Tier clients (>1 M€) considers the Trailing 12 months. 14

Telco Financial Services

Value Portfolio Segment

Value Portfolio Turnover grows 12% YoY

Mainly fostered by a double-digit domestic growth (24% YoY).

In terms of geographic mix, 40% of Value Portfolio Turnover is generated outside Portugal.

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Net Cash

Solid Net Cash position of 49.4 M€

Comfortable liquidity situation to pursue the Strategy 2019+ objectives and win the Covid-19 pandemic context.

Cash generation of 15.2 M€ in 9M20, highlighting:

Cash inflow of 35.4 M€ from GTE Business disposal (including the price adjustment);
Proceeds from the Sale of Collab net of cash disposed of in the amount of 1.4 M€;
Cash outflow of 20.0 M€ from the acquisition of Vodafone's equity stake in Celfocus.

From the 49.4 M€, 4.1 M€ refers to Noncontrolling Interests.

Talent

Talent Pool of 1739 employees in 9M20

Average number of Employees (1)

Next-Gen Value Portfolio (2)

(1) Excluding GTE Business and Collab.

(2) Including holding / shared services representing 83 employees in 9M20 (88 in 9M19).

Talent pool decreased 2% YoY in line with the expected synergies and management overhaul (1769 in 9M19).

Next-Gen Turnover per employee increased 13% YoY.

Attrition rate of Next-Gen was 8.6% in 9M20 (16.2% in 9M19).

Stock Market

Novabase share price increased 31% in 9M20…

... up to 3.37 € in the last tradable day of the 3Q20.

PSI20 Index decreased 22% and EuroStoxx Technology Index increased 7%.

Novabase and the Market

Novabase re-entered to the main index of the Lisbon stock exchange, the PSI20, as of March, 23.

Due to the current context of great uncertainty of the Covid-19 pandemic, the Board decided to revert its initial intention of proposing to the 2020 GMS a remuneration of 0.85 €/share.

Novabase acquired 285,579 shares in the 9M20 (under the buy-back programme), holding as at September, 30, a total of 662,190 own shares (2.11% of the Company's share capital).

The average price target disclosed by the research that covers Novabase is 4.63 €, and the average upside is 37%.

Market Capitalization at the end of 9M20 is 105.8 M€, implying a ttm Price to Sales of 0.97x.

Free Float Velocity in 9M20 represented 38% (25% in 9M19) with a free float of 40%(1) in both periods

APMs

Alternative Performance Measures

Net Cash

Net Cash provides information on the level of cash and other bank deposits and marketable securities, after discounting the debts to financial institutions, assisting in the analysis of the company's liquidity and ability to meet its non-bank commitments.

The caption "Cash and cash equivalents" is simultaneously the item of the consolidated statement of financial position more directly reconcilable and more relevant to this APM.

The detail and breakdown of Net Cash, as well as the reconciliation in 9M20 and prior period, is analysed in the table on the right.

This APM and all its components contain no estimates or judgments made by Management.

	FY19	9M20
Cash and cash equivalents	48,755	71,768
Debt securities - Non-Current	403	-
Debt securities - Current	2,793	-
Treasury shares held by the Company (1)	972	2,232
Bank borrowings - Non-Current	(13,600) (18,250)
Bank borrowings - Current	(5,194) (6,400)
Net Cash (Euro thousands)	34,129	49,350

	FY19	9M20
Treasury shares held by the Company	376,611	662,190
Closing price @ last tradable day (€)	2.580	3.370
Treasury shares held by the Company (Euro thousands)	972	2,232

(1) Is determined by multiplying the number of treasury shares held by the Company at the end of the period by the share price on the last tradable day. 19

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