Seco — Interim / Quarterly Report 2024

May 15, 2024

SECO S.p.A.

QUARTERLY FINANCIAL REPORT AT MARCH 31, 2024

SECO S.p.A. Registered office in Arezzo, via A. Grandi 20 Share capital Euro 1,296,944.48 VAT No. 00325250512 Arezzo Companies' Registration No. 4196

CONTENTS 2
CORPORATE BOARDS 3
THE GROUP AND ITS OPERATIONS 4
CONSOLIDATED BALANCE SHEET AND CONSOLIDATED INCOME STATEMENT AT MARCH 31, 2024 8
Consolidated Balance Sheet 8
Consolidated Income Statement 9
Consolidated Comprehensive Income Statement 10
Consolidated Cash Flow Statement 11
Consolidated Statement of Changes in Equity 12
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 13
OPERATING PERFORMANCE TO MARCH 31, 2024 15
Sales revenues by region 15
Alternative operating performance measures 16
Alternative financial performance measures 16
SUBSEQUENT EVENTS 18
OUTLOOK 18

CORPORATE BOARDS

Board of Directors

Office held until the approval of the 2023 annual accounts

Chairperson Daniele Conti Chief Executive Officer Massimo Mauri Directors Claudio Catania Emanuela Sala Luca Tufarelli Luciano Lomarini Michele Secciani Elisa Crotti Valentina Montanari1 Diva Tommei Tosja Zywietz Board of Statutory Auditors

Office held until the approval of the 2023 annual accounts

Statutory Auditors	Pierpaolo Guzzo (Chairperson)
	Gino Faralli
	Fabio Rossi
Alternate Auditors	Marco Badiali
	Maurizio Baldassarini
Executive Officer for Financial Reporting	Lorenzo Mazzini
Independent Audit Firm	Deloitte & Touche S.p.A.

Office held until the approval of the 2029 annual accounts

¹ Co-opted by the Board of Directors on December 22, 2022, to replace Ms. Giovanna Mariani, who passed away on November 4, 2022. This director will remain in office until the next meeting of shareholders called to confirm the appointment until the end of the term of the full board.

THE GROUP AND ITS OPERATIONS

The SECO Group (hereinafter also referred to as the "Group" or "SECO") consists of the parent company SECO S.p.A., hereinafter also referred to as the "Company" or "Parent Company", and its subsidiaries, as presented below:

The Company's registered office is located in Arezzo (AR), via Achille Grandi 20.

SECO is a high-tech Group that develops and delivers cutting-edge solutions for the digitization of industrial products and processes. SECO's hardware and software offerings enable B2B enterprises to introduce edge computing, Internet of Things, data analytics and artificial intelligence into their businesses. Within a quickly and broadly evolving marketplace, SECO's technologies encompass many fields of application, with innovative and customized solutions provided to its more than 450 customers, in sectors such as the Medical, Industrial Automation, Fitness, Vending and Transportation areas, in addition to many others.

MARKET OVERVIEW

As digital technologies become ubiquitous, we are entering an era of interconnected devices, analytics, and artificial intelligence. The increasing number of intelligent devices – which can process data at the source (edge computing) and are connected to the cloud – is opening the door to new business models, creating major development opportunities, and helping to improve people's overall safety and quality of life.

The evolution of technologies such as the Cloud, Big Data and Analytics, Artificial Intelligence and the Internet of Things has accelerated the digital transformation of business processes worldwide, and the way in which companies approach the creation, provision and use of ICT products and services.

In the current environment, speed of execution and time to market are key aspects not only for competitivity, but also for a business's survival. We are witnessing across the globe a strong drive towards digitalization.

In our post-pandemic climate, this trend has significantly accelerated, with digitalization spreading to many sectors and environments of daily life which historically were far removed from this world. This trend has also advanced significantly in the industrial environment, where businesses across all sectors increasingly require more innovation, digitalization and interconnection among their products.

Climate change and issues surrounding raw material and energy supply have combined to make accelerating the digital transition increasingly crucial. The eco digital revolution is only getting started, with digitalization set to play a driving role. Specifically, by enabling the local execution of increasingly complex computational models, through Edge AI, increasingly advanced tools will be available to support renewable energy, energy efficiency, and the reduced consumption of industrial and personal devices.

The many relaunch and investment incentives programs underway in numerous countries shall contribute to further speeding up these dynamics, ensuring growth of the connected devices and IoT market comfortably in the double-digits, as indicated by all of the most trusted sector studies.

OPERATING OVERVIEW

In 2023, a significant portion of our customer's reduced their inventory levels. This was seen across all sectors in which SECO operates, resulting in - in a number of cases - the postponement of order delivery dates.

The development of new Edge computing products and new features of the Clea software suite continued in the period. CLEA is a key linchpin in the strategy we have undertaken at SECO with the goal of increasing the value created for our customers by offering a growing range of end-to-end,

integrated, customizable solutions based on micro-computing, human-machine interfaces, software platforms, and artificial intelligence. The range of software was further strengthened with the recent introduction in 2023 of Studio X - a generative AI platform dedicated to OEM's to provide first and second level support to customers.

Along this strategic line of action, we are committed at SECO to further strengthen our presence and position in the IoT and AI market through a number of major agreements to add weight to our commercial offerings and technology.

In March, Clea's Astarte module was made available on Google Cloud Marketplace, offering Google Cloud users simplified access to an advanced framework for performing IoT data-driven transactions. Astarte allows IoT data to be orchestrated in the field and the management of devicecloud communication on Google Cloud. This operation allows Google Cloud users to easily launch and scale their IoT applications, leveraging Google's cloud infrastructure and benefiting from Astarte's native integration.

Research and Development and Technological Innovation

In the initial months of 2024, SECO remained strongly committed to ensuring high levels of innovation, integration and added value in the solutions built according to the specific needs of customers operating in multiple verticals.

SECO's main objective is to anticipate the needs of its customers, utilizing frontier technologies and supporting them in the digital transition of their business, while adding value to their solutions.

The constant push for innovation by all the players in a given sector can quickly render a competitive advantage obsolete. For this reason, SECO every year dedicates significant resources to Research and Development. With 10 design centers in 9 countries across the world, approx. one-third of SECO personnel are employed in the design of new products and of off-the-shelf solutions to be sold on the market, in addition to the co-development and co-engineering of customized products, working hand-in-hand with the customer. Specifically, approximately 130 SECO personnel are exclusively focused on developing Artificial Intelligence and software solutions.

The SECO Group R&D departments are responsible for developing and designing technological solutions based on integrated systems, standard and custom modules and IoT and AI software solutions for SECO's customers and target markets. Research and development is a key aspect of SECO's business model and is carried out both in-house and through partnerships with world-class technology enterprises and research institutes and university hubs worldwide.

SECO on the stock exchange

SECO S.p.A. stock is listed on the Euronext Star Milan market organized and managed by Borsa Italiana S.p.A.

At March 31, 2024, the SECO S.p.A. (IOT:MI) stock price was Euro 3.64, with a capitalization therefore of Euro 484.0 million.

CONSOLIDATED BALANCE SHEET AND CONSOLIDATED INCOME STATEMENT AT MARCH 31, 2024

Consolidated Balance Sheet

	Note	31/03/2024	31/12/2023
Property, plants and equipments		16,958	16,726
Intangible assets		104,964	104,019
Right-of-Use		11,423	11,755
Goodwill		165,394	165,216
Non-current financial assets		13,173	13,201
Deferred tax assets		2,321	2,289
Other non-current assets		1,635	1,623
Total non-current assets	(1)	315,867	314,829
Inventories		89,715	85,827
Trade receivables		51,560	49,489
Tax receivables		12,174	9,458
Other receivables		7,304	4,077
Cash and cash equivalents		70,840	74,816
Total current assets	(2)	231,592	223,668
TOTAL ASSETS		547,459	538,497
Share capital		1,296	1,296
Share premium reserve		232,036	232,037
Reserves		58,551	45,425
Group Net Profit		93	11,864
Total Group Equity	(3)	291,976	290,622
Minorities Equity and Reserves		22,021	19,109
Minorities Profit for the period		342	2,766
Total Minorities Equity		22,363	21,875
Total Equity		314,339	312,497
Employee benefits		3,415	3,312
Provisions for risks		1,235	1,235
Deferred tax liabilities		24,058	24,084
Non-current financial payables		105,894	106,928
Non-current lease liabilities		8,367	8,603
Other non-current liabilities		8	8
Total Non-Current Liabilities	(4)	142,978	144,170
Current financial liabilities		13,463	11,031
Current part of N-C financial liabilities		11,303	11,211
Current lease liabilities		1,948	2,126
Trade payables		37,917	36,402
Other current liabilities		10,736	11,728
Tax payables		14,775	9,332
Total Current Liabilities	(5)	90,143	81,830
TOTAL EQUITY AND LIABILITIES		547,459	538,497

Consolidated Income Statement

	Note	Q1 2024	Q1 2023
Net sales		47,217	54,605
Other revenues and income		1,162	1,115
Total revenues and operating income	(6)	48,379	55,720
Costs for services, goods and other operating costs		(29,368)	(35,206)
Personnel costs		(9,855)	(9,187)
Total costs and other operating charges	(7)	(39,223)	(44,392)
Amortization & depreciation	(8)	(5,364)	(4,657)
Provisions and write-downs		0	0
Operating Profit		3,792	6,670
Financial income and charges		(2,017)	(2,004)
Exchange gains/(losses)		336	27
Profit before tax		2,112	4,693
Income taxes		(1,677)	(1,439)
Profit for the period		435	3,254
Non-controlling interests profit		342	690
Group profit		93	2,564
Basic earnings per share		0.00	0.02
Diluted earnings per share		0.00	0.02

Consolidated Comprehensive Income Statement

	Q1 2024	Q1 2023
Profit for the period	435	3,254
Other comprehensive income/(expense) which may be subsequently reclassified to the income statement:	339	(543)
Translation differences	339	(543)
Net gain/(loss) on Cash Flow Hedge	0	0
Other comprehensive income/(expense) which may not be subsequently reclassified to the income statement:	0	0
Discounting of employee benefits	0	0
Tax effect discounting employee benefits	0	0
Total comprehensive income	339	(543)
Non-controlling interests	488	552
Parent company shareholders	285	2,159
Total comprehensive income	774	2,711

Consolidated Cash Flow Statement

	31/03/2024	31/03/2023
Profit for the period	435	3,254
Income taxes	1,677	1,439
Amortization & depreciation	5,364	4,657
Change in employee benefits	104	106
Financial income/(charges)	2,017	2,004
Exchange gains/(losses)	(336)	(27)
Costs for share-based payments	1,070	396
Cash flow before working capital changes	10,330	11,829
Change in trade receivables	(1,786)	(6,213)
Change in inventories	(3,887)	(89)
Change in trade payables	1,270	(990)
Other changes in tax receivables and payables	1,051	(245)
Other changes in current receivables and payables	(4,220)	(2,046)
Other changes in non-current receivables and payables	(69)	(575)
Use of provisions for risks, receivables and inventories	0	0
Interest collected	65	61
Interest paid	(361)	(588)
Exchange gains/(losses) realized	66	268
Income taxes paid	0	0
Cash flow from operating activities (A)	2,458	1,413
(Investments) /Disposals of property, plant and equipment	(1,367)	(1,039)
(Investments) /Disposals of intangible assets	(4,626)	(3,700)
(Investments) /Disposals of financial assets	193	58
Acquisition of business units net of cash and cash equivalents	0	0
Acquisition of subsidiaries net of cash and cash equivalents	0	0
Cash flow from investing activities (B)	(5,799)	(4,682)
New loan drawdowns	0	0
(Repayment) of bank loans	(942)	(33)
Change in current financial liabilities	710	540
Repayment lease liabilities	(629)	(474)
Dividends paid	0	0
Paid-in capital increase	(1)	266
Acquisition of treasury shares	0	0
Acquisition of shares from minorities	0	(140)
Cash flows from financing activities (C)	(860)	159
Increase (decrease) in cash and cash equivalents (A+B+C)	(4,202)	(3,110)
Cash & cash equivalents at beginning of period	74,816	39,586
Conversion differences	226	(427)
Cash & cash equivalents at end of period	70,840	36,049

Consolidated Statement of Changes in Equity

	01/01/2024	Share capital increase	Allocation result	Dividends paid	Other movements	Comprehensive Profit/(Loss)	31/03/2024
Share capital	1,297	0	0	0	0	0	1,297
Legal reserve	289	0	0	0	0	0	289
Share premium reserve	232,036	(1)	0	0	0	0	232,035
Other reserves	45,613	0	11,864	0	1,070	0	58,547
Translation reserve	(216)	0	0	0	0	192	(24)
FTA Reserve	(371)	0	0	0	0	0	(371)
Discounting of employee benefits	109	0	0	0	0	0	109
Group Net Profit	11,864	0	(11,864)	0	0	93	93
Group Equity	290,621	(1)	0	0	1,070	285	291,975
Minorities Equity and Reserves	19,107	0	2,766	0	0	147	22,020
Discounting of employee benefits	0	0	0	0	0	0	0
Non-controlling interests profit	2,767	0	(2,766)	0	0	342	343
Total Minorities Equity	21,875	0	0	0	0	489	22,364
Total Equity	312,496	(1)	0	0	1,070	774	314,339

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(1) Total non-current assets

Non-current assets increased from Euro 314,829 thousand at December 31, 2023 to Euro 315,867 thousand at period-end, increasing Euro 1,038 thousand. This movement mainly followed:

• increase in Property, Plant and Equipment of Euro 231 thousand as a result of the Group's investments in production machinery and equipment and R&D;
• increase in Intangible assets for Euro 945 thousand, following the capitalization of costs for Research and Development projects incurred in the period;

(2) Total current assets

Current Assets increased from Euro 223,668 thousand to Euro 231,592 thousand (+Euro 7,924 thousand). This movement mainly followed:

• Increase in Inventories of Euro 3,887 thousand, mainly due to the increase in inventories of semi-finished products related to orders that will be executed during the second quarter;
• Increase in Trade Receivables for Euro 2,071 thousand. This increase is mainly due to the timing of the invoicing of certain goods and services in the second half of the quarter. Therefore, based on the average payment terms agreed by the Group with its counterparties, payment for these services had not yet been received by period-end;
• Increase in Tax receivables of Euro 2,715 thousand, mainly attributable to the higher VAT receivable accrued by SECO Northern Europe during the period;
• Increase in Other receivables for Euro 3,227 thousand;
• Decrease in cash and cash equivalents for Euro 3,977 thousand. This movement is mainly due to changes in the current asset and liability items, in addition to capex in the period. For further details, reference should be made to the cash flow statement.

(3) Total Group Equity

Equity of Euro 291,976 thousand at March 31, 2024 increased Euro 1,354 thousand, due to the combined effect of the increase in Other reserves for Euro 13,126 thousand, mainly due to the allocation to the prior year profit reserve, and the decrease in the Group net profit for Euro 11,771 thousand, which amounted to Euro 93 thousand in Q1 2024.

(4) Total non-current liabilities

Total Non-current liabilities decreased from Euro 144,170 thousand at December 31, 2023 to Euro 142,978 thousand at March 31, 2024, a reduction of Euro 1,192 thousand. This decrease mainly

stemmed from the reduction of Non-current financial liabilities of Euro 1,034 thousand, principally due to the repayment of loan instalments in the period;

(5) Total Current Liabilities

Total Current liabilities increased from Euro 81,830 thousand at December 31, 2023 to Euro 90,143 thousand at March 31, 2024, an increase of Euro 8,312 thousand - mainly due to:

• the increase in Current financial liabilities of Euro 2,431 thousand. The account includes credit lines, current account overdrafts, credit card payables, payables for advances on invoices and short-term loans falling due within one year for operational purposes existing at March 31, 2024;
• the increase in Trade Payables of Euro 1,516 thousand;
• increase in tax payables of Euro 5,443 thousand, mainly at SECO Northern Europe.

(6) Revenues and operating income

Net sales decreased from Euro 54,605 thousand in 2023 to Euro 47,217 thousand in 2024, a reduction of 13.53% on the same period of the previous year. Reference should be made to the "Sales revenues by region" paragraph for further details.

Other revenues and income totaled Euro 1,162 thousand in Q1 2024, mainly concerning the parent company Seco S.p.A., which specifically reports income for:

• The operating grant tax credit for the purchase by SECO S.p.A. of capital goods under "Industry 4.0" amounting to Euro 380 thousand;
• Pro-rata contribution relating to the participation of the Group in the European EUPEX Tender and the PNRR (National Recover and Resilience Plan) tender for Euro 373 thousand;
• The operating grant tax credit for research and development amounting to Euro 167 thousand;

(7) Costs and other operating charges

Costs for services, goods and other operating costs totaled Euro 29,368 thousand, decreasing Euro 5,838 thousand on the same period of the previous year. This is due to the combined effect of:

• decrease in the cost of raw materials, ancillaries, consumable and goods, net of the change in inventories of Euro 7,866 thousand, deriving from the reduced purchase volumes due to the decrease in revenues in the period;
• increase in service costs of Euro 1,718 thousand on the same period of the previous year;
• increase in other operating costs of Euro 310 thousand compared to the same period of the previous year;

Personnel costs rose Euro 669 thousand on the same period of the previous year. The movement in the period mainly concerns the expansion of the Group workforce in view of the new hires necessary to execute the R&D, production and sales development plans.

(8) Amortization and depreciation

Amortization and depreciation in the period of Euro 5,364 thousand rose Euro 706 thousand on the same period of the previous year, due to new capitalizations which are accrued period-by-period.

OPERATING PERFORMANCE TO MARCH 31, 2024

The current challenging general economic and market environment led to a gradual reduction in inventories from the latter quarters of 2023 by the majority of market players. This was apparent across all areas and sectors in which the Group operates, and is reflected in the contraction in revenues in the period.

Sales revenues decreased 13.53% on Q1 2023.

Sales revenues by region

As required by IFRS 8, information on the geographical distribution of revenues is provided below. Specifically, four regions have been identified: EMEA, USA, APAC and ROW. The breakdown of revenues by region is provided below:

	31/03/2024	31/03/2023	Changes	%
EMEA	40,897	42,661	(1,764)	-4.14%
of which Italy	16,643	21,043	(4,400)	-20.91%
USA	4,161	6,925	(2,764)	-39.91%
APAC	2,143	4,508	(2,365)	-52.46%
Rest of the world	16	510	(495)	-96.88%
Revenues by region	47,217	54,605	(7,388)	-13.53%

Net sales decreased from Euro 54,605 thousand in 2023 to Euro 47,217 thousand in 2024, a contraction of 13.53% on the same period of the previous year. This follows the decline across all regions in which the Group operates compared to the previous year at like-for-like consolidation scope. This contraction was particularly stark in view of the fact that the comparative period was within a diametrically opposing marketplace. While Q1 of the previous year saw heightened demand among market players as a result of post-pandemic developments and shortages, this phenomenon resulted in overstocking and led to the current drop in demand. This overstocking of inventory among customers was also due to a market environment featuring high interest rates which resulted in an increased focus on investment and inventory levels.

Alternative operating performance measures

EBITDA - This measure is used by the Group as a financial target and is useful for assessing operating performance. EBITDA is calculated as profit or loss for the year before income taxes, financial income and charges, and amortization and depreciation.

	31/03/2024	31/03/2023	Change	Change %
Total revenues and operating income	48,379	55,720	(7,341)	-13.17%
Costs for services, goods and other operating costs (*)	(29,032)	(35,179)	6,147	-17.47%
Personnel costs	(9,855)	(9,187)	(668)	7.27%
EBITDA	9,492	11,354	(1,862)	-16.40%

(*) Costs for services, goods and other operating costs include the following income statement items: costs of raw, ancillary, consumable materials and goods; changes to inventory; service costs; the doubtful debt provision and provisions for risks; other operating costs; exchange gains and losses.

The decrease between the two periods (-Euro 1,862 thousand, -16.40%) is mainly due to the reduction in sales revenues.

Adjusted EBITDA - Adjusted EBITDA is a measure to assess the Group's operating performance. It is calculated as the profit before income taxes, financial charges and income, amortization and depreciation, exchange gains or losses, extraordinary and/or non-recurring revenue items.

The Group considers that the extraordinary and/or non-recurring items subject to adjustment have been identified in a manner that presents the Group's true operating performance.

	31/03/2024	31/03/2023	Change	Change %
EBITDA	9,492	11,354	(1,862)	-16.40%
Exchange gains/(losses)	(336)	(27)	(309)	1144.44%
Income/charges from non-core business activities	1,251	646	605	93.65%
Non-recurring income/charges from core business activities	0	21	(21)	-100.00%
Adjusted EBITDA	10,407	11,994	(1,587)	-13.23%

The Group reports Q1 2024 Adjusted EBITDA of Euro 10,407 thousand, decreasing 13.23% on the same period of the previous year.

Income/charges from non-core business activities of Euro 1,251 thousand mainly refer to the allocation of stock options to managers and Directors of Euro 1,070 thousand.

Alternative financial performance measures

Net financial debt - This measure indicates the Group's financial debt, net of cash and cash equivalents.

The breakdown of the net financial debt at March 31, 2024 compared with December 31, 2023 is presented below, determined in accordance with "Reminder No. 5/21" dated April 29, 2021 issued by Consob, which refers to ESMA Guideline 32-382-1138 dated March 4, 2021.

At March 31, 2024, the Group net financial debt was Euro 70,135 thousand, compared to Euro 65,083 thousand at December 31, 2023.

	31/03/2024	31/12/2023	Change	Change %
A. Cash	20	23	(4)	-15.65%
B. Cash equivalents	70,820	74,793	(3,973)	-5.31%
C. Other current financial assets	0	0	0	0.00%
D. Cash and cash equivalents (A) + (B) + (C)	70,840	74,816	(3,977)	-5.32%
E. Current financial debt	(15,411)	(13,157)	(2,254)	17.13%
F. Current portion of the non-current debt	(11,303)	(11,211)	(92)	0.82%
G. Current financial debt (E)+(F)	(26,714)	(24,368)	(2,346)	9.63%
H. Net current financial debt (G) + (D)	44,126	50,448	(6,322)	-12.53%
I. Non-current financial debt	(114,261)	(115,531)	1,270	-1.10%
J. Debt instruments	0	0	0	0.00%
K. Trade payables and other non-current payables	0	0	0	0.00%
L. Non-current financial debt (I) + (J) + (K)	(114,261)	(115,531)	1,270	-1.10%
M. Total financial debt (H) + (L)	(70,135)	(65,083)	(5,052)	7.76%

The overall net financial debt increased Euro 5,052 thousand, mainly due to the reduction in cash equivalents and the increased current financial debt.

Adjusted Net financial debt – The Adjusted net financial debt indicates the Group's capacity to meet its financial obligations.

The Adjusted net financial debt is obtained by adjusting the Net financial debt calculated according to the "Reminder No. 5/21" dated April 29, 2021 issued by Consob, which refers to ESMA Guideline 32- 382-1138 dated March 4, 2021, with the VAT receivable, the current and non-current financial receivables deriving from leases and recognized under IFRS 16 and the effect of the recognition of the MTM of the derivatives where liabilities.

The Adjusted net financial debt was Euro 57,347 thousand at March 31, 2024, compared to Euro 51,993 thousand at December 31, 2023. The increase is due mainly to the effects analyzed in the previous paragraph and a combined effect of: i) the higher VAT receivable at March 31, 2024 compared to the previous year; ii) the increased current and non-current lease liabilities.

	31/03/2024	31/12/2023	Change	Change %
Net financial debt	(70,135)	(65,083)	(5,052)	7.76%
(+) VAT receivables	2,473	2,362	112	4.72%
(-) Current lease liabilities	(1,948)	(2,126)	177	-8.33%
(-) Non-current lease liabilities	(8,367)	(8,603)	236	-2.74%
(-) Derivative financial instruments	0	0	0	0.00%
Adjusted net financial debt	(57,347)	(51,993)	(5,354)	10.30%

SUBSEQUENT EVENTS

At the beginning of April, SECO launched a strategic collaboration with NXP Semiconductors to expand the distribution of the Clea software suite for applications in the industrial and IoT sectors. Clea will be the framework of choice for Yocto and Zephyr environments on a wide range of NXP products, enabling customers to easily activate the platform on demand. In addition, SECO and NXP will work together to develop dedicated tools (reference implementations, documentations and code examples) to accelerate Clea adoption among NXP users in various vertical sectors.

On April 29, 2024, the Shareholders' Meeting called to renew the corporate boards appointed the Board of Directors and the Board of Statutory Auditors, who shall remain in office for three financial years and therefore until the Shareholders' Meeting called to approve the financial statements at December 31, 2026.

OUTLOOK

The results for the first three months reflect the destocking operations among customers, which we expect to conclude in the second quarter. Demand is forecast to recover from the second half of the year.

With a comprehensive and integrated Edge computing, IoT-data analytics and AI solutions proposal, we continue to acquire new design wins and customers, strengthening the foundation for our future development. Recent partnerships with technology leaders such as NXP and Google Cloud open up new opportunities, and SECO's strategic positioning will enable it to take full advantage of the multiple growth trajectories offered by digitization.

The market is at the beginning of an eco-digital revolution, where digitization and the use of Artificial Intelligence algorithms "at the Edge" assume a key role for the future technological development of enterprises. The growing demand for smart solutions increasingly concerns the introduction of Artificial Intelligence, directly on the device locally, to enable the launch of new high value-added services, leveraging field data and introducing new business models. SECO's unique, comprehensive

and integrated technology proposition focused on Edge computing, IoT-data analysis and Artificial Intelligence is designed to meet these needs and tap into the digitization opportunities emerging across all sectors.

In this volatile general economic environment, SECO will continue to work as always in meeting commitments and targets, maintaining a consistent focus on the efficient management of its financial structure to respond in an agile and prompt manner to the challenges and uncertainties of 2024.

The Executive Officer for Financial Reporting, Lorenzo Mazzini, declares in accordance with Article 154 bis, paragraph 2, of the Consolidated Finance Act, that the accounting information contained in this document corresponds to the underlying accounting documents, records and accounting entries.