Tinexta — Investor Presentation 2017

Nov 15, 2017

9 Month Results at 30 September 2017

Conference Call with the Market 15 November 2017

Agenda

9 Month Results at 30 September Highlights

• 1. Consolidated Income Statement Highlights
• 1. Business Unit Revenues (excluding non-recurring items)
• 1. Business Unit EBITDA (excluding non-recurring items)
• 1. Balance Sheet Highlights
• 1. Cash Flow analysis (effects on NFP)

The Acquisition of Warrant Group

• 1. Services Offered
• 1. Warrant Group Key Financials
• 1. Clients type
• 1. The Strategic Rationale for the Transaction
• 1. Main contractual elements
• 1. Focus: the declination of Industry 4.0

Highlights: 9 Month Resultsat 30 September 2017

Results driven primarily by the impact of the acquisitions made in 2016 and 2017

The results also were impacted favourably by the extraordinary income encashed by Ribes in October, which a won a suit against the Italian Revenue Agency

The results of Sixtema s.p.A., acquired in April 2017, have been included from 1 April 2017, date in which it was consolidated in the Group accounts

Business Segment Revenues net of non-recurring items

	30/09/2017	30/09/2016	Variation	Variation %
				Total	Organic	Perimeter
Business Unit
Digital Trust	56,569	39,280	17,289	44.0%	5.7%	38.3%
Credit Information & Management	51,613	55,145	-3,531	-6.4%	-6.2%	-0.2%
Sales & Marketing Solutions	12,685	8,495	4,189	49.3%	-5.6%	54.9%
Other (Holding Co. costs)	1	137	-136	-99.1%	-99.1%	0.0%
Total Revenues	120,868	103,057	17,811	17.3%	-1.7%	19.0%

Business Segment EBITDA net of non-recurring items

	30/09/2017		30/09/2016
	EBITDA	Margin	EBITDA	Margin	Δ	Δ%
						Total	Organic	Perimeter
Digital Trust	13,290	23.5%	9,490	24.2%	3,800	40.0%	1.6%	38.4%
Credit Information & Management	10,251	19.9%	10,318	18.7%	-67	-0.6%	-0.6%	0.0%
Sales & Marketing Solutions	4,742	37.4%	3,434	40.4%	1,308	38.1%	-13.6%	51.7%
Other (Holding Co. costs)	-3,237	n.a.	-2,342	n.a.	-895	-38.2%	-38.2%	0.0%
EBITDA	25,046	20.7%	20,899	20.3%	4,147	19.8%	-6.1%	25.9%

• Digital Trust: The reduction compared to the EBITDA margin for the first nine months of 2016 is due to the consolidation of Sixtema, which has a lower margin than the rest of the segment.
• Credit Info & Mgmt: Despite the decline in revenues, thanks to careful cost control policy and industrial synergies the Business Unit managed to increase its EBITDA margin from 18.7% in 2016 to 19.9% in the current period.
• S&MS: Revenues declined by 5.6% and EBITDA by 13.6% due to the delay in the trend of subscribing new contracts caused by the delay by the Ministry of Economic Development to publish the Decree for "Voucher for Internationalization" grants, which occurred at end of September.

Balance Sheet Highlights (1/2)

129.9 133.9 Sep-16 Sep-17 Net Invested Capital €195.6 mn 201.2 195.6 Sep-16 Sep-17 -2.8% At 30 September 2017: Total Equity €133.9 mn 3.1% Net Financial Position €61.6 mn -13.5% 71.2 61.6 Sep-16 Sep-17

Balance Sheet Highlights (2/2)

Net Financial Position €61.6

(€ m)	30-Sep 17	31-Dec 16
Net Financial Debt	61.6	71.2
Gross Financial Debt	100.2	138.0
Bank debt	30.8	33.0
Debt vs. TecnoHolding S.p.A	25.1	25.2
Debt for acquisitions	39.9	76.9
PUT & CALL	30.2	65.7
Earn Out	4.1	4.1
Co.Mark Vendor Loan	5.7	7.1
Other ST & LT Debt	4.3	3.0
Cash & Other ST Assets	-38.6	66.8
Cash	-33.2	60.4
Other ST Financial Assets	-5.4	6.4

• NFP (Net Debt) fell to €61.6 mn: a reduction with respect to YE 2016 of €9.6 mn
• Of Gross Financial Debt of €100.2 mn, the debt for acquisitions equals €39.9 mn, of which €30.2 mn of Put/Call Options and €4.1mn of Earn Out (neither of which is interest bearing)
• o The significant reduction in Debt for minorities acquisitions relates to the purchase of the minorities of Assicom, Ribes announced in March and to the 10% of Co.Mark purchased on July 6 as contractually foreseen

NFP Analysis

The Warrant Group Acquisition

The Warrant Group: services offered

1. Automatic subsidized finance consultancy: assistance to companies to obtain contributions which are paid in the form of tax credits (see appendix for details).

2. Finance from regional, national and European tenders: supporting businesses in participating in regional, national and European tenders, finance is available for both drafting and reporting.

3. Patent Box: support for companies in assessing access to the instrument, preparing documentation and approval process with the Revenue Agency for the determination of income from the use of works of art, industrial patents, drawings, processes, formulas, etc.

4. Corporate Finance: management of outsourcing with some banks to prepare dossiers to obtain guarantees from the Central Guarantee Fund.

5. Internationalization: support companies in obtaining voucher promotional tools promoted by the Regions and the Ministry of Foreign Affairs.

Warrant Group key financials¹

For 2017: Revenues over €30 mn (+ 50% vs. 2016) EBITDA: will increase even more

Clients type: over 50% are PMI

16% 12% 17% Sales by customers(2016)

Strategic rationale of the operation

• Extend the range of services offered by Tecnoinvestimenti Group to companies (mainly SMEs)
• Take advantage of the dimension of and complementary aspects of the customer base with other Group companies, in particular with Co.Mark and Assicom-Ribes, where cross-selling strategies will be implemented
• Enter a market characterized by good visibility and positive growth rates over the next few years. The incentive measures contained in the 2016-2017 Budget Law are pluriannual
• Acquire a solid and growing business by following the set policy in terms of price paid and balance sheet/financial impact.

Main contractual elements

The total compensation for 70% of the capital of WG, which will have a Net Financial Position equal (or close) to zero upon closing, foreseen by the end of the year, has been set at a maximum of €33.9 million, which will be paid as follows:

• €25.7 million at closing;
• A maximum €2.9 million within 30 days of the approval of the 2017 financial results of WG, if these meet the forecast;
• €5.3 million paid in instalments in 5 years.

The other 30% of capital will be subject to put & call options and will be paid upon the approval of the 2018 and 2019 financial results, respectively. Such amounts will be subject to the achievement of agreed upon objectives relating to WG's EBITDA.

Tecnoinvestimenti intends to finance the acquisition through the use of a MT banking facility of between € 15 and €20 mn; the attainment of such financing is considered a condition precedent to the closing.

Focus: the declination of Industry 4.0

The National Plan for Industry 4.0 foresees various fiscal incentives, the most important of which are the following:

1. Tax credit R&D

• Finances the activities of basic research, industrial research and experimental development
• 50% of incremental additional spend, vs. the average, is eligible
• In vigor until 2020

2. Hyper and Super amortization

• Finances the investments of the companies for new instrumental assets, material assets and nontangible assets functional to technological and digital transformation of production processes.
• Super-valutation of between 140% and 250% of the assets that meet Industry 4.0 standards
• In vigor until al 2018

3. Patent Box:

• Exclusion of taxes on income arising from the use of copyrighted software, industrial patents, trademarks e designs, etc.
• 30% of taxes due for 2015 and 40% for 2016 will be eligible. From the fiscal year 2017, the percentage of tax credit excluded will be 50%
• Patent Box benefits are part of the fiscal structure and will be in place for the for the foreseeable future