Seco — Investor Presentation 2024

Nov 13, 2024

9M 2024 Results & Business update presentation

November 13, 2024

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 or may include 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 reading this presentation, you agree to be bound by the terms set out.

Presenting today

Massimo Mauri

Chief Executive Officer

Lorenzo Mazzini

Chief Financial Officer

Clarence Nahan

Head of Corp. Dev. & IR

Key takeaways from the first 9 months of 2024

Continued resilience in a complex market

• 9M24: Net sales at €139.4m, down 14.0% vs. 9M23
• Solid and diversified client base in the Edge computing business
• Clea revenues at €17.0m in 9M24 (12.2% of sales), up 214 bps vs. 9M23

Best in class Gross Profit Margins • GPM incidence at 52.1% in 9M24, up 261 bps vs. 9M23

• Improving YoY and QoQ thanks to a unique business model, offering and Clea contribution
• 3Q24 GPM favored by a slightly better client / product mix

Focus on production costs optimization

• Adj. EBITDA at €20.4m in 9M24 (14.7% of sales), down 45.2% vs. 9M23

• Better operating leverage in 3Q24 thanks to control on Opex, despite softness in Sales
• Adj. Net Income at €1.6m in 9M24

Significant Net Working Capital improvement

• Positive Cash generation in 3Q24 (€4.0M), thanks to effective NWC management
• Stable Net Debt level, supporting SECO's future expansion plans

9M 2024 financial highlights

• Continuing destocking trend by key customers led to decreased sales volumes
• Clea revenue at €17.0m in 9M24 vs. €16.3m in 9M23 (+4%)
• +261 bps 9M24 vs. 9M23 margin increase driven by a better Edge product mix, coupled with more favorable conditions in the components market
• Gross margin reduction due to contraction in business volume
• Better operating leverage, mainly thanks to control of production costs, offset by the impact of Sales contraction
• -45% in 9M24 vs. 9M23
• D&A: +€1.6m vs. 9M23
• Financial expenses under control: -€3.2m vs. 9M23
• -90% in 9M24 vs. 9M23
• Taxes calculated with theoretical tax rate

Net sales €17.0m 9M 2024 Clea revenue 12% of Net sales Net sales breakdown (9M 2024) €139.4m 9M 2024 Net Sales by Area by End Market Industrial 30% Fitness 12% Medical 6% Vending 37% Transport 3% Aerospace & Defense 1% PKE 5% Others 6% EMEA 83% USA 10% APAC 6% RoW 1%

• 9M24 Net sales decreasing by 14.0% vs. 9M23
• Sales volume contraction distributed across geographical areas and verticals due to customers' final stages of destocking
• Positive signals from Vending, Defense & Aerospace and Fitness
• Clea business at 12% of revenue in 9M24, +214 bps vs. 9M23
• +4.3% vs. 9M23
• Software business continues to deliver positive YoY growth

Note: percentages may not sum to 100% due to rounding; all numbers in €m are rounded to the closest first decimal place, so there may be deltas for up to ±€0.1m when variation figures are displayed

Adj. EBITDA bridge (€m)

Adjusted EBITDA

• Improved operating leverage thanks to control actions on production costs, offset by reduced sales volume

2 Adjustments

Adjusted Net financial position

Note: percentages may not sum to 100% due to rounding; all numbers in €m are rounded to the closest first decimal place, so there may be deltas for up to ±€0.1m when variation figures are displayed

Business update

Leading player in one of the fastest-growing end-market in tech

End-to-end stack to deliver customer value

We have built a unique value proposition to fully benefit from the IoT implementation trend and edge AI development

To address every industrial Needs	Providing extensive sets of Data	Relevant to all Stakeholders
Compute	Monetizable	Business
Connect	Actionable	IT
Collect	Raw	Operations

is increasingly relevant to all key Silicon Vendors

Geopolitical & secular trends are affecting core business lines

Mature software suite, not just a component, integrating SVs SW into a complete solution

Already built value chain for delivery (System Integrators, Cloud Vendors, …)

SECO can act as a reseller for SVs SW for an active incentive for joint go-to-market

Despite having a significant market footprint, SVs require a different value chain to exploit their SW business

access

Continuously expanding our Ecosystem

Strengthening our group of industry-leading partners with a clear strategy to fuel creativity & boost growth amongst 3 rd party users through joint go-to-market strategies

New strategic partnership to make Clea available across all NXP silicon

New strategic partnership to expand our industrial IoT offerings

Together to accelerate the development of new IIoT solutions for OEM customers

roadmap overview

Clea AI Marketplace One-stop shop to download reusable components, Apps, LLMs, and features for Clea Portal, Clea AI Studio and Clea OS Clea AI Studio No code environment to transform use case into apps Availability SOM-SMARC-Genio700 C72 Amstom/Alder QEMU Raspberry Pi Clea platform Unified interface for all Clea products Price list Single price list for all the Clea Products available (consumption or device based) Vertical use cases List of potential use cases for adopting Clea across the most relevant vertical industries for SECO Clea OS on Edgehog Clea OS will be available for deployment directly from Edgehog Clea AI Studio apps on Clea OS Deploy AI applications built on Clea Studio on Clea OS 2024 2025

Edge AI roadmap: from entry-level to high-performance

On track to meet Full-Year guidance provided to the market

With business fundamentals gradually bottoming out, we expect revenue growth to be back to positive in the first half of 2025

Why invest in SECO ?

Top 5 player globally in one of the fastest growing end-market in technology Profitable business model focused on high margin custom solutions End-to-end technological partner with unrivalled R&D excellence Fully integrated IoT offering, from edge computing to software stack Highly diversified client base, consistently growing through new project wins Experienced management team with a clear roadmap to deliver long term growth Strong balance sheet allowing for pro-active M&A strategy Uniquely positioned product range to fully benefit from Edge AI tailwind

Q&A

Thank you

www.seco.com