Servizi Italia

Earnings Release • Jun 6, 2024

SERVIZI ITALIA S.P.A.

CO MPANY PRO FILE FO R INVESTO RS MAY 2024

BUSINESS OVERVIEW

WASH-HIRE SERVICES: we provide the bed linen and we provide the workwear

Laundry business: supply, rental and washing of textile material in healthcare industry, including homecare and health residences.

Minor current presence in other industries (i.e. specific, high-quality service for national and international hotels, restaurants and catering).

STERILIZATION OF TEXTILES: by sanitizing the textiles we protect people

Sterilization of textile (mainly Reusable Technical Textile) for O.T. coverings and beds and surgical gowns. Supply of procedural kits and surgical drapes. Supply of accessory parts made of disposable material.

STERILIZATION OF MEDICAL DEVICES: by sterilizing surgical equipment we reduce infection risks

Sterilization of surgical instruments and procedural kits and related activities. Full management of CSSDs for reprocessing and sterilization services for medical devices in O.T. Validation and systematic control of sterilization processes, equipment calibration and validation.

BUSINESS OVERVIEW

of SI share capital.

NEW PERSPECTIVES

Start of sterilization activities. 2007: IPO at Milan Stock Exchange. Presentation to the international financial community.

INTERNATIONAL DEVELOPMENT

2012: During the three-year period, laundry activities started in Brazil, Turkey and India. At the same time, sterilization activities also started in Albania and Turkey.

CONSOLIDATION AND DIVERSIFICATION

Consolidation of presence in foreign markets with extension of sterilization activities in Brazil and Morocco. Diversification of business: mainly clinical engineering, homecare and nursing homes laundry services and Hotel&Restaurants laundry services.

HEALTHCARE STRATEGY

Focus on historic business: consolidating the leadership in public and private healthcare sector.

Diversification of services in Brazil: starting of sterilization activities in the State of Sao Paulo

GROUP EVOLUTION

DEVELOPMENT PATH

Brazil

Morocco

Italy

Albania

Wash-hire Textile sterilization MD sterilization

GLOBAL PRESENCE

*2023 Consolidated Revenues

EQUITY CONSOLIDATED

FULLY CONSOLIDATED Italy (85.6%), Brazil (10.5%), Turkey (3.9%)

6 countries

Over 20 laundry plants

Over 3,600 employees

Over 50 CSSDs

1

Essential services

• Our services offered are essential, of first necessity and of public utility.
• A sustainable, crucial service which guarantees continuity even in emergency contexts, focusing on end users.

² Solutions provider

• Multi-service approach with a wide range of customized services and a wide production network.

3

Value creation

• Optimization of costs and services for specific commercial synergies.
• Future focus on high added-value services.

⁴ Customer satisfaction

• Rationalization and control of costs, as well social sustainability.

5

Investment capacity

• High barriers on entry due to know-how and investments needed.
• Possibility and interest in establishing long-term relationships and projects.

STRENGHTS

6

• 4-year average for wash-hire contracts (volume based or fixed monthly fee)
• 6-year average for MD sterilization (volume based or fixed monthly fee)

BUSINESS GROWTH STRATEGY

Consolidation of leadership in Italy on historic business

Strenghtening of presence on foreign markets

Service diversification and cross-selling

Focused international development

Management optimization

VALUE FOR STAKEHOLDERS SUSTAINABLE SUCCESS

Guaranteeing business continuity, through continuous optimization and efficiency in production operations and in the service supply chain, in order to improve margins and business profitability.

Identification of countries having specific characteristics of potential growth.

Diversification and cross-selling opportunities within the healthcare sector, while strengthening specific business areas.

Optimization and development in the areas where we already are, offering an integrated mix of services

Consolidate the privileged partner position of public/private healthcare sector, offering customers a technological, high quality and sustainable service. Enhance the quality of services to face aggressive competition which lowers the quality standards.

• Reduction of energy consumption and emissions
• Increase of production and purchase of energy from renewable sources
• Solutions for reducing water withdrawals
• Transition to a circular economy

• Focus on work-life balance for employees
• Employees training and skills enhancement
• Gender equality
• New Diversity, Equity, Inclusion activities

• Italian Wash-hire Healthcare market turnover: Euro 761 mln (2024P)

Market

overview**

• LEADERSHIP CONSOLIDATION • SUSTAINABLE GROWTH • COSTS AND CAPEX OPTIMIZATION • MARGINS INCREASE • SERVICE DIVERSIFICATION

• Highest International quality standards
• SI's customers are main Public hospitals and Healthcare Institutions
• Outsourcing rate is high in laundry market but still low in sterilization of surgical instruments
• Undisputed market leader in all the segments
• Well positioned in the areas of the Country
• Servizi Italia manages more than 80,000 hospitalizations/day and about 580,000 interventions/year
• Full range of services and customizations
• Constant search and identification of growing and diversification strategies in order to keep and to improve margins

** For more details: Cerved DATABANK, Lavanderie Industriali, Ed. 2023 *2023 consolidated revenues

ITALY

Market

overview

-

-

• MARKET CONSOLIDATION IN SÃO PAOLO • START OF STERILIZATION BUSINESS • ORGANIZATION AND MANAGEMENT EFFICIENCIES • IDENTIFY FURTHER M&A DEVELOPMENT

• Wash-hire potential marketis estimated in Reais 840 mln
  • Over 700,000 Kg/day of potential linen only in Sao Paulo
  • ~1,000 healthcare facilities totaling over 92,500 beds
• New potential outsourcing: only 45% of wash-hire is currently outsourced and no sterilization service provider is present with an external central of sterilization
• Significant player: second player in Sao Paulo and second in Brazil
• Recognized in the market as high quality provider
• Well positioned in both private and public areas
• Leader in identifying new solutions for the clients
• Deep market knowledge acquired trough the years
• Rental model improved successfully

*2023 consolidated revenues equal to 163.8 mln BRL.

3 laundry plants

Revenues of Euro 32.3 mln*

1 CSSD

Fully consolidated

BRAZIL

Laundry

business

Market

overview

• ACHIEVEMENT OF NEW PPPs
• About 6,000,000 surgical intervention/year
  • Construction of new PPP hospitals, increasing the nr of beds up to about 290,000 over the nextfew years
  • ~1,455 healthcare facilities totaling over 245,000 beds
• Low outsourcing rate in both laundry and sterilization businesses
• Main player of both laundry (Ankateks/Ergulteks) and sterilization (SAS) markets
• Recognized by the market as high quality provider
• Achieved multiple high-complexity PPP contracts, requiring International standards and with long term duration
• Good margins and volumes market

5 laundry plants

Revenues of Euro 11.0 mln*

8 CSSDs

Laundry Fully consolidated

Sterilization Equity consolidated

*Sum of (i) 2023 consolidated revenues of Ankateks (laundry) equal to 7.0 mln EUR or 229.6 mln TRY (included in SI consolidated revenues) and (ii) 100% of 2023 revenues of SAS (sterilization) equal to 4.0 mln EUR or 129.6 mln TRY (not included in consolidated revenues of SI group).

TURKEY

• The Indian market has started to outsource wash-hire activities • About 90,000 beds only in Delhi NCR, totaling about kg 200,000,000 of linen • Over 195,000 healthcare facilities throughoutIndia

-

• Low outsourcing rate

Market

overview

• FULLY USE EXISTING PLANT CAPACITY • INCREASE LOCAL QUALITY STANDARDS • INCREASE OF AVERAGE PRICES • CONTRACTS WITH FLAGSHIP HOSPITALS

*100% of 2023 revenues of Shubhram (not included in consolidated revenues of SI group). Revenues equal to 362.2 mln INR.

• Business developed greenfield and first volumes started in Oct-2015
• Main player in healthcare laundry business in India
• Technologically advanced laundry plant (Delhi area)
• Recognized by the market as high quality provider
• Volumes steadily increasing
• High capacity plant (45 tons/day, not fully reached)

1 laundry plant

Revenues of Euro 4.0 mln*

Equity consolidated

INDIA

Revenues of Euro 13.6 mln*

• Total value of contract awarded include all public and private hospitals of

Albania

Market

overview

• COMPLETE THE DEVELOPMENT OF STERILIZATION

• IMPROVEMENT OF THE STANDARDS

*Sum of 100% 2023 SaniService revenues (not included in consolidated revenues of SI group). Equal to 1,485 mln ALL.

• More than 60,000 surgical intervention/year
• Unique player in healthcare sterilization business
• Recognized by the market as high quality provider
• Good margins and volumes market
• Laundry market still fragmented

Equity consolidated Goals

ALBANIA

ECONOMIC AND FINANCIAL HIGHLIGHTS:

Turkey it's been impacted during 2022 by a huge increase of the inflation (Hyperinflated economy). We suffered the not aligned recovery of revenues trough the period compared to the fast increase of the costs of raw material and energy.

Surgical instruments sterilization registered a significant increase for 9,6% YoY mainly due to higher operating activities recorded in the period in the Italy area and to the inflation adjustments accrued and subscribed in the course of 2022 and in

• 2023.

EBITDA margin (24.8%) and EBIT margin (5.2%) record great performance in FY2023 and in Q1 2024 respectively 25,8% and 6,8%.

Brazil suffered for the increase of energy and wood prices. Start-up phase of new clients in wash-hire and start-up costs for the new sterilizations business

interest rates. +

A significant growth in terms of revenues in 2023 (+8,1% organic compared to FY2022) supported both by robust growth in wash-hire in Italy (+4.9%) and by a rapid recovery deriving from the price adjustment in the Turkey area (+67.7% at constant exchange rates). The Italy area as well benefits from the excellent performance in terms of revenues for the growth related to the inflation adjustments accrued and subscribed in the course of 2022 and in 2023. +

+

–

–

CONSOLIDATED ECONOMIC RESULTS

Servizi Italia P&L Consolidated ('000 Euro)	FY 2022	FY 2023	1Q 2023	1Q 2024
Revenues Var. %	270.313	287.915 6,5%	72.555	73.408 1,2%
EBITDA	59.687	71.400	18.015	18.972
%	22,1%	24,8%	24,8%	25,8%
EBIT	2.928	15.000	3.605	5.012
%	1,1%	5,2%	5,0%	6,8%
Net income	3.429	5.331	2.311	2.412
%	1,3%	1,9%	3,2%	3,3%

In emerging markets, laundry is still a growing business, with very interesting margins

Surgical instr. sterilization was growing faster than laundry. Good signs from SterilC

Higher margins of sterilization businesses vs Laundry

Future results are expected to be supported by abroad laundry businesses and service diversification and develop of sterilization in Italy

SALES BREAKDOWN PER BUSINESS LINE

Laundry

• Sterilization Textile
• Sterilization Instruments

2023 shows a growth in profitabilty due to decrease of energetic prices and a good performance in the opeartation.

ECONOMIC RESULTS – Sector breakdown

Brazilian area is in a changing phase while Turkish market is recovering from the Hyperinflaction context.

Servizi Italia aims at increasing market share in the country manned

Equity consolidated businesses are not included in these results

Expect to continue the margins increase in Turkey and the recovery in Brazil due through the diversification

SALES BREAKDOWN PER AREA

ECONOMIC RESULTS – Geographic breakdown

EBITDA 2022% EBITDA 2023% EBIT 2022% EBIT 2023%

NET DEBT HISTORICAL TREND PROFORMA*

* Net debt proforma withouth IFRS16 effect (started from 01.01.2019

CONSOLIDATED FINANCIAL RESULTS

Balance Sheet ('000 Euro)*	31.12.2019	31.12.2020	31.12.2021	31.12.2022	31.12.2023
Operating Net Working Capital	6.644	-5.964	-2.138	-9.006	-3.246
Other net current assets (liabilities)	-18.852	-11.446	-12.247	-7.264	-11.195
Net Working Capital	-12.208	-17.410	-14.385	-16.269	-14.441
Fixed assets - Medium/long term provis.	277.873	265.603	261.201	268.743	269.683
'- of which IFRS16	35.783	31.717	28.759	28.210	28.246
Invested Capital	265.665	248.193	246.816	252.474	255.243
Shareholders' Equity (B)	138.257	118.586	121.119	133.474	138.542
Net financial debt (A)	127.408	129.607	125.697	118.999	116.700
'- of which IFRS16	36.258	32.943	30.572	30.582	31.370
Invested Capital	265.665	248.193	246.816	252.474	255.243
Gearing (A/A+B)	0,48x	0,52x	0,51x	0,47x	0,46x
Gearing (A/A+B) - Excl. IFRS16	0,40x	0,45x	0,44x	0,40x	0,38x
D/E (A/B)	0,92x	1,09x	1,04x	0,89x	0,84x
Debt/E (A/B) - Excl. IFRS16	0,66x	0,82x	0,79x	0,66x	0,62x

*Starting from 1.1.2019, IFRS16 accounting principle was adopted.

SHAREHOLDING STRUCTURE AS AT 17 MAY 2024

STOCK EXCHANGE – Main details

	Reccomend.	TP (Euro)	Date
SIM	Outperform	2.45	17/05/2024
Partners	Buy	2.10	16/05/2024

ANALYST COVERAGE

Fully paid-up share capital: Euro 31,809,451 Founded: 1986 Tax ID Number and Parma Business Registry Code: 08531760158 Market: Euronext STAR Milan | Sector: Industrial ISIN code for ordinary shares: IT 0003814537 Reuters: SRI.MI --- Bloomberg: SRI IM Specialist: Intermonte SIM

Investor Relations Manager: Pietro Giliotti Email: investor@si-servizitalia.com www.servizitaliagroup.com | ir.servizitaliagroup.com

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