Technoprobe — Investor Presentation 2023

Aug 9, 2023

1H 2023 Results Presentation

August 9, 2023

Disclaimer

This proprietary presentation (including any accompanying oral presentation, question and answer session and any other document or materials distributed with or in connection with this presentation) (collectively, the "Presentation") has been prepared by Technoprobe S.p.A. (the "Company" and together with its subsidiaries, the "Technoprobe Group") for information purposes only. This Presentation should not be used for any other purpose. The Presentation is not intended to form the basis of any investment activity or decision and does not, and is not intended to, constitute or form part of, and should not be construed as, an offer to sell, a solicitation to buy, an invitation or a solicitation of an offer, to buy, sell or subscribe for or otherwise acquire, any securities of any kind in any jurisdiction where such an offer, solicitation or sale should require registration, qualification, notice, disclosure or application in the United States or in any other jurisdiction, nor shall it or any part of it form the basis of or be relied upon in connection with or act as any inducement or recommendation to enter into any contract or commitment or investment decision whatsoever.

This Presentation may not be distributed, reproduced, or used in whole or in part without the express consent of the Company or for any purpose other than those for which it has been prepared by the person to whom this document has been delivered.

Mr.Stefano Beretta, the officer in charge of preparing the corporate accounting documents of Technoprobe S.p.A. declares that, pursuant to paragraph 2, Art. 154 bis of the Consolidated Law on Finance, to the best of his knowledge, the accounting information contained in the Presentation corresponds to the documental results, accounting books and records.

The financial information set forth herein has been derived by the information set out in the Company's interim condensed consolidated financial statements as of and for the period ended on June 30, 2023, prepared in accordance with the International Financial Reporting Standards issued by the International Accounting Standards Board and endorsed by the European Union ("IFRS") had been subject to review. The Presentation has been independently verified and contains summary information only and does not purport to be comprehensive and is not intended to be (and should not be used as) the sole basis of any analysis or other evaluation. No representation or warranty (express or implied) is made as to, and no reliance should be placed on, the accuracy, completeness, quality, relevance, sufficiency or fairness for any purpose whatsoever of any of the information contained in the Presentation, including projections, estimates, targets and opinions, contained herein, and no liability whatsoever is accepted as to any errors, omissions or misstatements contained herein relating to, or resulting from, the Presentation, its inaccuracy or incompleteness, or the use of, or reliance upon, the Presentation. To the extent applicable, the industry, market and competitive position data contained in the Presentation has come from official or third party sources. Third-party industry publications, studies and surveys generally state that the data contained therein have been obtained from sources believed to be reliable, but that there is no guarantee of the fairness, quality, accuracy, relevance, completeness or sufficiency of such data. While the Technoprobe Group believes that each of these publications, studies and surveys has been prepared by a reputable source, the Technoprobe Group has not independently verified the data contained therein. In light of the foregoing, no reliance may be or should be placed on any of the industry, market or competitive position data contained in the Presentation.

The information in the Presentation may include statements that are, or may be deemed to be, forward-looking statements regarding future events and the future results of the Technoprobe Group that are based on current expectations, estimates, forecasts and projections about the industry in which the Technoprobe Group operates and the beliefs, assumptions and predictions about future events of the management of the Technoprobe Group. In particular, among other statements, certain statements with regard to management objectives, trends in results of operations, margins, costs, return on equity, risk management are forward-looking in nature. Forward-looking information and forward-looking statements (collectively, the "forward-looking statements") are based on the Technoprobe Group's internal expectations, estimates, projections assumptions and beliefs as at the date of such statements or information including management's assessment of the Technoprobe Group's future financial performance, plans, capital expenditures, potential acquisitions and operations concerning, among other things, future operating results from targeted business and development plans and various components thereof or the Technoprobe Group's future economic performance. The projections, estimates and beliefs contained in such forward-looking statements necessarily involve known and unknown risks, assumptions, uncertainties and other factors which may cause the Technoprobe Group's actual performance and financial results in future periods to differ materially from any estimates or projections contained herein. When used in the Presentation, the words "expects," "believes," "anticipate," "plans," "may," "will," "should", "scheduled", "targeted", "estimated" and similar expressions, and the negatives thereof, whether used in connection with financial performance forecasts, expectation for development funding or otherwise, are intended to identify forward-looking statements. Such statements are not promises or guarantees, and are subject to risks and uncertainties that could cause actual outcomes to differ materially from those suggested by any such statements and the risk that the future benefits and operating activity by the Technoprobe Group may be adversely impacted. These forward-looking statements speak only as of the date of the Presentation and are subject to change without notice and do not purport to contain all information that may be required to evaluate the Technoprobe Group. In the view of the Technoprobe Group's management, the Presentation was prepared by management on a reasonable basis, reflects the best currently available estimates and judgements, and presents, to the best of management's knowledge and belief, the expected course of action and the expected future performance and results of the Technoprobe Group. However, such forward-looking statements are not fact and should not be relied upon as being necessarily indicative of future results. The Technoprobe Group expressly disclaims any obligation or undertaking to release publicly any updates or revisions of the information, opinions or any forward-looking statement contained herein to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statement is based except as required by applicable securities laws.

The Presentation contains non-International Financial Reporting Standards ("IFRS") industry benchmarks and terms, such as EBITDA, EBITDA Margin, Gross Operating Margin, Gross operating margin percentage, Research and development expense ratio, Capital expenditures, Net Financial Position. The non-IFRS financial measures do not have any standardized meaning and therefore are unlikely to be comparable to similar measures presented by other companies. The Technoprobe Group uses the foregoing measures to help evaluate its performance. As an indicator of the Technoprobe Group's performance, these measures should not be considered as an alternative to, or more meaningful than, measures of performance as determined in accordance with IFRS. The Technoprobe Group believes these measures to be key measures as they demonstrate the Technoprobe Group's underlying ability to generate the cash necessary to fund operations and support activities related to its major assets. By reading or accessing the Presentation you acknowledge that you will be solely responsible for your own assessment of the market and the market position of the Technoprobe Group and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the Technoprobe Group's business. Recipients should not construe the contents of the Presentation as legal, tax, regulatory, financial or accounting advice and are urged to consult with their own advisers in relation to such matters. Unless as otherwise stated herein, the Presentation speaks only as of June 30, 2023 and the information and opinions contained in the Presentation are subject to change without notice and do not purport to contain all information that may be required to evaluate the Technoprobe Group. The information included in the Presentation may be subject to updating, completion, revision and amendment and such information may change materially. No person is under any obligation to update or keep current the information contained in the Presentation and any opinions expressed relating thereto are subject to change without notice. To the fullest extent permissible by law, the Technoprobe Group disclaims all and any responsibility or liability, whether arising in tort, contract or otherwise, which it might otherwise have in respect of the Presentation.

1996 Year of Foundation 18 Offices Worldwide €4,9bn +600

Proprietary

patents

Technoprobe at a glance (1)

Employees Worldwide

2,750

Market Cap

H1 2023 market drivers

up 14.9% QoQ

Revenues at 196.3€m

down 21.6% YoY Weak demand in the consumer market

Slower than expected correction in the inventories

Consistent growth in AI & Datacenter

Financial Highlights

Q2 2023 results

Revenues were 105.0€m down 18.6% YoY, up 14.9% QoQ

Gross Profit was 55.7€m down 25.3% YoY, with a margin of 53.1%

Ebitda was 37.8€m

down 31.7% YoY, with a margin of 36.0%

Revenues were 196.3€m down 21.6% YoY

Gross Profit was 101.8€m down 31.7% YoY, with a margin of 51.9%

Ebitda was 64.7€m

down 39.4% YoY, with a margin of 33.0%

H1 2023 results

H1 2023 Results

€m	H1 2022	H1 2023	YoY Variance	Comments
Revenues	250.3	196.3	-21.6%	• Revenues affected by volume shrinkage in the consumer market
Gross profit % margin	149.1 59.6%	101.8 51.9%	-31.7%	• Gross profit impacted by: o decrease in revenues o Improvement of the production structure and workforce o Reserve for inventory slow moving
EBITDA % margin	106.7 42.6%	64.7 33.0%	-39.4%	• Ebitda also affected by consistent investments in R&D (€23m) despite of revenue decrease
Net Financial Position	31.12.2022 403.4	30.06.2023 360.3		• Net financial position: cash flow from operating activities (+31€m) and financials & Forex (+1€m) more than offset by capex (-32€m) and tax (-39€m)

Harbor Electronics acquisition

2 Plants (US)

• 3 Design Centers (UK/Malaysia/Philippines)

• 180 Employees Worldwide

Company in a nutshell

• Founded in the 1980's and headquartered in Santa Clara (California), joined Shenzhen Fastprint Circuit Tech in 2015
• Focused on highly specialized printed circuit boards (PCB) for the semiconductor industry
• Reliable leading edge solutions covering end to end services from layout and design through product validation
• Wide market coverage in USA & Europe serving the top 20 semiconductor companies and top 10 probe card players

Harbor Electronics acquisition

Integration of PCB design & manufacturing in our manufacturing process

• Processes & Costs optimization
• Deep knowledge of the product
• R&D competitive edge

Development of new Probe Cards	In-house designed	In-house manufacturing	Outsourced manufacturing
O PCB: Printed Circuit Board		$\checkmark$ Partially	(Partially) $\checkmark$
2 MLO: Multi-Layer Organic		Potential (Partially)	(Partially)
8 Ceramic Plates			x
O Contact Probes			x

Q3 2023 Guidance

Revenues: 111€m

(+/-3%)

Gross Margin: 49%

(+/-2%)

Ebitda Margin: 32%

(+/-2%)

Q&A

Appendix

Consolidated Income Statement

Rounded figures

(In Euro mil.)	30/06/2023	30/06/2022
Revenue	196.3	250.3
Cost of revenue	(94.4)	(101.2)
Gross profit	101.8	149.1
Operating expenses
Research and development	(27.0)	(25.6)
Selling, general and administrative	(29.8)	(34.5)
Net impairment losses/reversals on financial assets	0.0	-
Total operating expenses	(56.8)	(60.1)
Operating profit	45.1	89.0
Other income, net	0.6	(2.2)
Financial income	3.5	0.1
Financial expenses	(0.1)	(0.2)
Foreign exchange gains (losses)	(3.2)	4.6
Profit before tax	45.8	91.3
Income tax expense	(14.6)	(24.7)
Net profit	31.1	66.6

Consolidated Balance Sheet

Rounded figures

(In Euro mil.)	30/06/2023	31/12/2022
ASSETS
Non-current assets
Property, plant and equipment	228.1	209.7
Intangible assets	9.5	10.7
Goodwill	10.2	10.4
Deferred tax assets	17.6	16.6
Non-current financial assets	1.0	1.0
Other non-current assets	0.6	2.0
Total non-current assets	266.9	250.4
Current assets
Inventories	117.2	110.4
Trade receivables	78.5	75.4
Cash and cash equivalents	371.8	411.0
Current tax receivables	14.4	0.4
Current financial assets	1.8	2.3
Other current assets	21.8	16.9
Total current assets	605.5	616.4
Total Assets	872.5	866.8
EQUITY AND LIABILITIES
Equity
Share capital	6.0	6.0
Reserves	727.0	582.0
Net profit attributable to the owners of the Parent	30.2	147.9
Equity attributable to the owners of the Parent	763.2	735.9
Equity attributable to non-controlling interests	2.0	1.0
Total equity	765.2	737.0
Non-current liabilities
Non-current lease liabilities	10.2	5.8
Deferred tax liabilities	0.2	0.3
Employee benefits obligations	0.3	0.3
Provision for risks and charges	20.1	20.1
Other non-current liabilities	0.0	0.0
Total non-current liabilities	30.8	26.6
Current liabilities
Trade payables	38.2	40.9
Current lease liabilities	2.7	2.4
Current tax payables	7.7	21.8
Other current liabilities	27.8	38.3
Total current liabilities	76.5	103.3
Total liabilities	107.2	129.8
Total equity and liabilities	872.5	866.8

Consolidated Cash Flow Statement

Rounded figures

(In Euro mil.)	30/06/2023	30/06/2022
Profit before tax	45.8	91.3
Adjustments for:
Amortization, depreciation and impairment	19.7	17.8
Gains (losses) on disposals	(0.1)	(0.0)
Net Finance (income) expenses	(3.3)	0.1
Other non-cash adjustments	6.6	9.1
Cash flow generated by operating activities before changes in net working capital	68.6	118.2
Change in inventories	(12.0)	(27.6)
Change in trade receivables	(3.1)	(6.9)
Change in trade payables	(2.8)	10.4
Changes in other assets/ liabilities	(18.1)	(1.1)
Uses of provisions for risks and charges and employee benefits obligations	(1.7)	(1.2)
Income taxes paid	(39.3)	(15.6)
Net cash flow generated by (used in) operating activities	(8.4)	76.3
Purchase of property, plant and equipment (excluding right of use assets)	(32.6)	(36.8)
Purchase of intangible assets	(0.1)	(1.2)
Disposal of property, plant and equipment	0.4	0.2
Net investments in financial assets	1.3	(0.1)
Finance income received	2.1	0.1
Net cash flow used in investing activities	(28.9)	(37.8)
Financial liabilities reimbursement	-	(4.4)
Repayment of lease liabilities	(1.5)	(0.9)
Finance expenses paid	(0.1)	(0.2)
Capital increase	-	139.4
Net cash flow generated by (used in) financing activities	(1.6)	133.9
Total cash flow generated (used) during the period	(38.9)	172.4
Cash and cash equivalents at the beginning of the period	411.0	146.8
Total changes in cash and cash equivalents	(38.9)	172.4
Exchange differences from translation of cash and
cash equivalents	(0.3)	4.4
Cash and cash equivalents at the end of the period	371.8	323.5