Seco — Earnings Release 2021

Nov 11, 2021

Endless ways to the future

9M and Q3 2021Results

S E C O ® - S t r i c t l y p r i v a t e a n d c o n f i d e n t i a l Endless ways to the future

November 11, 2021

DISCLAIMER

This document has been prepared by SECO S.p.A. ("SECO" or the "Company"), for information purposes only, exclusively with the aim of assisting you to understand and assess the activities of SECO. The information contained in this presentation does not purport to be comprehensive and may not have been independently verified by any independent third party.

Statements contained in this presentation, particularly regarding any possible or assumed future performance of the SECO Group, are or may be forward-looking statements based on SECO's current expectations and projections about future events.

Such forward-looking statements are subject to risks and uncertainties, the non-occurrence or occurrence of which could cause the actual results, including the financial condition and profitability of SECO to differ materially from, or be more negative than, those expressed or implied by such forward-looking statements, due to any number of several factors, many of which are beyond the ability of SECO to control or estimate precisely. Consequently, SECO and its management can give no assurance regarding the future accuracy of the estimates of future performance set forth in this document or the actual occurrence of the predicted developments.

The data and information contained in this document are subject to variations and integrations. Although SECO reserves the right to make such variations and integrations when it deems necessary or appropriate, SECO assumes no affirmative disclosure obligation to make such variations and integration, except to the extent required by law.

SECO does not undertake any obligation to publicly release any updates or revisions to any forward-looking statements to reflect events or circumstances after the date of this presentation.

Any reference to past performance of the SECO Group shall not be taken as an indication of future performance.

In addition, this presentation includes certain ''Adjusted'' financial and operating indicators and other measures, which have been adjusted to reflect extraordinary events, non-recurring transactions and activities which are not directly related to the Group's ordinary business.

Such "Adjusted" information has been included to allow a better comparison of financial information across the periods; however, it should be noted that such information is not recognized as measures of financial performance or liquidity under IFRS and/or do not constitute an indication of the historical performance of the Company or the Group. Therefore, investors should not place undue reliance on such data and information.

This presentation does not constitute a recommendation regarding the securities of the Company.

This document does not constitute or form part of any offer or invitation to purchase or subscribe any shares issued by the Company and no part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever.

By attending this presentation, you agree to be bound by the foregoing terms.

Massimo Mauri CEO

Lorenzo Mazzini CFO

Marco Parisi Head of Investor Relations

KEY TAKEAWAYS FROM 2021 YTD

Above-market performance in Q3 2021, thanks to an accelerating organic growth and profitability improvement vs. Q3 2020
Gross profit margin incidence growing despite components' shortage on the market
9M 2021: Net sales +22%, Adj. EBITDA +39% vs. 9M 2020 Q3 2021: Net sales +51%, Adj. EBITDA +79% vs. Q3 2020
CLEA business at €1.3m in Q3 2021 (>+240% growth vs. Q2 2021)
Garz & Fricke acquisition completed in October 2021, integration continuing at full pace
Strong order backlog growth (+121% Oct21 vs. Oct20), significantly increased visibility on Q4 2021 and beyond

Q3 AND 9M 2021 FINANCIAL HIGHLIGHTS

• Solid growth trend continuing in Q3 2021, making SECO an industry best performer despite components shortage affecting global markets
• 2021 FY guidance raised to Euro 114 million in light of record order intake levels

€68.7m in 9M 2021 (vs. €57.3m in 9M 2020)

• Strong net sales acceleration in Q3 2021 (+51% vs. Q3 2020, +22% in 9M 2021 vs. 9M 2020)
• CLEA generating ~€1.3m software revenue in Q3 2021 (>+240% growth vs. Q2 2021)
• Growth mainly distributed across EMEA and APAC, with USA substantially stable

€31.5m in 9M 2021 (vs. €25.4m in 9M 2020)

• 47.1% of net sales in 9M 2021, vs. 46.3% in 9M 2020
• Strongly improved profitability vs. 9M 2020, despite components shortage affecting all the market
• Temporary price increase actions adopted and expected to display full effect from Q4 on

FY 2021 outlook

€114m (+43% vs. FY 2020) FY 2021 Total revenues guidance

€114.5m Order backlog as of October 31, 2021 +121%

Order backlog growth rate (October 2021 vs October 2020)

Q3 AND 9M 2021 FINANCIAL HIGHLIGHTS

• Strong operating leverage driven by continued business growth and OPEX control
• Adj. EBITDA and Adj. Net Income growing at ~40%+ in 9M 2021 vs. 9M 2020

€14.1m in 9M 2021 (vs. €10.1m in 9M 2020)

• 21.0% of net sales in 9M 2021 vs. 18.4% in 9M 2020

+41% Adj. Net Income growth

€7.2m in 9M 2021 (vs. €5.1m in 9M 2020)

• 10.7% of net sales in 9M 2021 vs. 9.3% in 9M 2020

TOTAL REVENUES F U R T H E R G R O W T H A C C E L E R AT I O N I N Q 3 2 0 2 1

• 9M 2021 Net sales growing by +22% vs. 9M 2020, further accelerated by a strong performance in Q3 2021 (+51% vs. Q3 2020)
• 9M sales 2021 not including Oro Networks figures for the first six months of the year (~€1.6M)
• Net sales hitting all-time record at €25.1m in Q3 2021
• CLEA continuting its positive growth trend, hitting ~€1.3m revenue in Q3 2021 (>+240% growth vs. Q2 2021)
• Business diversification allows to benefit from the recovery observed in Industrial, Fitness, Transportation, Vending industries
• EMEA, APAC markets showing strong growth rates, with the USA substantially stable

ADJUSTED EBITDA EVOLUTION

• Good operating leverage driven by continued business growth and OPEX control
• Payroll cost (accounting for ~65% of total OPEX) increasing mainly due to: i) the inclusion of companies now merged into SECO Mind and SECO Mind US in the consolidation perimeter and ii) the actuarial value of management's stock option plan and shares granted to employees
• Non-recurring items mainly related to: i) the value of shares attributed to employees at the IPO, ii) the present value of the stock option plan 2020 assigned to some managers and iii) non-recurring M&A transaction costs

NET DEBT POSITION

	0.8x Adj. NFP / LTM Adj. EBITDA1 in Q3 2021 (excl. Net IPO proceeds)		-0.1x vs. June 2021
	Adjusted net financial position (€m) 15,7	1,4	1,0	2,9	0,9	-	(0,3)	(5,7)	16,0
(74,7)	90,4
Adj. Net cash H1 2021	Net IPO proceeds + Adj. Net debt H1 Oro Networks M&A 2021 effect (excl. M&A and net IPO proceeds)	Δ Cash and equivalents	Δ Short-term debt	Δ Medium/Long term debt	Δ VAT receivables	Δ Put & Call option debt adjustment	Δ Leasing effect	Δ Net IPO proceeds + Oro Networks M&A effect	Adj. Net debt Q3 2021 (excl. M&A and net IPO proceeds)

• Strong cash position thanks to ~€90m net IPO proceeds
• Net debt and Leverage excluding IPO proceeds substantially unchanged vs. H1 2020

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What's next?

Business update and closing remarks

• S t r i c t l y p r i v a t e a n d c o n f i d e n t i a l Endless ways to the future

STRONG DELIVERY OF OUR IPO STRATEGIC PRIORITIES

G&F ACQUISITION: A FURTHER STEP TO BECOME A GLOBAL LEADER

WE ARE LIVING THE AGE OF A DIGITAL REVOLUTION…

10.4bn

Endpoints connected by 2024 2020-24 CAGR +15%

95%

of connected devices will perform actions based on AI

€500bn+

IoT endpoints market value by 2024

S E C O ® - S t r i c t l y p r i v a t e a n d c o n f i d e n t i a l Endless ways to the future

…WHERE IoT AND AI WILL PERVADE EVERY ASPECT OF OUR LIVES

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OCTOBER '21 BACKLOG O R G A N I C G R O W T H A N D G & F C O N T R I B U T I O N P R O V I D I N G S T R O N G V I S I B I L I T Y O N 2 0 2 1 Q 4 A N D 2 0 2 2

SECO TODAY: BEST-IN-CLASS PLAYER BY GROWTH AND PROFITABILITY, READY FOR FURTHER ACCELERATION

Strong visibility on 2021 Q4 and 2022 thanks to a highly increasing order intake

G&F acquisition enthusiastically received from customers, with integration roadmap running at full pace

Successful transition to SaaS business model - Fast-growing CLEA adoption and pipeline

Keep looking at quality M&A targets to continue buy-and-build strategy

Strong basis to continue our growth path in revenue and profitability terms

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Annex

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FINANCIALS OVERVIEW

Income Statement

€mln	9M 2020	9M 2021
Net Sales	54,9	66,9
Consumption Costs	(29,4)	(35,4)
Gross Margin	25,4	31,5
% on Net Sales	46,3%	47,1%
Other revenues	2,5	1,8
Personnel costs	(11,5)	(14,1)
Other Opex	(7,4)	(7,6)
Exchange gains/losses	(0,1)	0,4
EBITDA	8,9	12,1
% on Net Sales	16,2%	18,0%
EBITDA ADJ	10,1	14,1
% on Net Sales	18,4%	21,0%
Depreciation	(3,1)	(4,5)
EBIT	6,0	7,1
% on Net Sales	10,9%	10,6%
Financial expenses	(0,1)	(0,4)
Tax	(1,4)	(1,8)
Net Income	4,3	5,3
% on Net Sales	7,8%	8,0%

Balance Sheet

€mln	Q4 2020	9M 2021
Net Working Capital	35,9	40,3
Total Fixed Assets	35,5	49,7
Other non-current assets	1,1	1,2
Provisions and other non-current liabilities	(3,7)	(3,7)
Net Invested Capital	68,8	87,5
Net Financial Position	17,8	(65,7)
Net Financial Position ADJ.	11,4	(68,7)
Total Equity	51,0	153,2
Total Funds	68,8	87,5

REVENUE AND COST MODEL

BUSINESS MODEL

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About SECO

S E C O ® - S t r i c t l y p r i v a t e a n d c o n f i d e n t i a l Endless ways to the future

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Mission We bring together technologies and skills to answer new needs and opportunities Vision We exist to open up the world to innovation Values Passion Dynamism Respect

HISTORICAL MILESTONES

ESTABLISHMENT

• Leader in embedded products
• First mover & cutting-edge technology adopter
• Scale-up of manufacturing capabilities

DEVELOPMENT

• Implementation of customized embedded systems
• Internationalization
• Further expansion in multiple verticals

SECO 3.0

• Leader in custom Edge Computing & IoT products & solutions
• Flexible and scalable business model
• Strengthen Management and M&A campaign

OPTIMIZED SCALE FOR A GLOBAL CUSTOMER BASE

~800 People

9 R&D centers 5 production plants

Global Commercial Presence

Direct Presence in 9 countries

Worldwide Distribution

WHAT WE DO R & D C O M P E T E N C E S

E x p e r i e n c e i n d e v e l o p i n g p r o d u c t s l e v e r a g i n g t h e m o s t i n n o v a t i v e p l a t f o r m s f r o m l e a d i n g Te c h n o l o g y P r o v i d e r s

SECO cooperates in a co-design approach with the most important technology players, adopting new technologies for edge computing

E A R L Y A C C E S S P R O G R A M S

Chip vendor uncovers new technology to selected Partners, calling for product proposals

Partners are selected for EAP based on capability to manage state of the art technology

Solutions from partners are the primary go to market strategy being available at mass market launch

FROM EDGE TO AI

WHAT WE DO TODAY IN EDGE COMPUTING

CLEA K E Y S T R E N G T H P O I N T S

Flexible & Open-Source System

Clea is part of a larger Open-Source ecosystem and does not force its users into any kind of technological lock-ins. It is also deployable and exploitable on non-SECO hardware, and entirely based on Open Standards.

Fast Time-To-Market, Lower Costs and Reduced Operational Risk

Clea is a one-stop shop for all the AI and IoT needs of your company. Relying on Clea and SECO as your main supplier means not only reducing project costs and risks but also one single, dedicated, support infrastructure

Highest security and Privacy Standards

Clea is highly focused on privacy and security. It guarantees data integrity and protection and privacy, allowing customers to retain full data ownership

VENDING Applications

FITNESS Applications

MEDICAL Applications

CLEA F R O M E D G E T O A I C O M B I N I N G H A R D W A R E A N D A I S U I T E

Clea is a full-fledged AI/IoT platform designed to turn field data into actionable and measurable insights. It is provided as a single, one-stop solution that comes natively integrated with all SECO hardware.

• On-demand application deployment
• Bi-directional interaction between devices and the cloud

Edge Device Management Data Management from the Field Data Intelligence in the Cloud

• First-tier data analytics at the edge

• Automated data modelling in the cloud

• Assisted model training within the platform

• Integrated AIOps within data flows from the fields

KEY COMPETENCES IN MULTIPLE APPLICATION DOMAINS

30

SUSTAINED COMMITMENT TO CORPORATE SOCIAL RESPONSIBILITY

HOW WE DO IT E N A B L I N G O U R C U S T O M E R S T O C U T D E V E L O P M E N T C O S T S A N D T I M E T O M A R K E T

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Thank you www.seco.com

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