Tinexta — Investor Presentation 2018

Aug 3, 2018

Tecnoinvestimenti Group

1H 2018 Results

3 August 2018

Disclaimer

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Agenda

I.	1H 2018 Results	4
II.	Looking Forward	14
III.	Appendix	16

Premise

From 1st January 2018 the Group has adopted the IFRS 15 Accounting Principle "Revenue from Contracts with Customers" and the Accounting Principle IFRS 9 "Financial Instruments", which required modifications of the accounting policies and changes to the amounts reported. The comparative 2017 data have not been restated. As a result the Income Statement variations evidenced on the following page are prejudiced, even if not in a material manner, as a result of the different accounting treatment bases.

The analysis of the Business Units which follows utilized, instead, 2018 data that does not reflect the application of IFRS 15 and IFRS 9. The analysis therefore compares 2018 1H data and 2017 1H data on a "2017 IFRS" basis, and therefore they have been compiled on a comparable basis.

1H 2018 Results Highlights

	1H 2018	1 1 1H 2018	2 2 1H 2017	3 3 Change	Δ%
€ mn	IFRS 2018	IFRS 2017	IFRS 2017	IFRS 2017	IFRS 2017
Revenues	114.5	114.3	85.4	28.9	33.9%
EBITDA	28.9	28.5	18.4	10.1	55.1%
Operating Profit	21.8	21.5	12.4	9.1	73.2%
Net Profit	14.6	14.4	8.6	5.8	67.5%
Adjusted Net Profit	16.3	16.1	10.3	5.8	56.4%

€ mn	30-06-18 IFRS 2018	31-12-17	Change	Δ%
Net Financial Indebtedness	96.3	104.6	-8.2	-7.9%

¹ 2018 data without the application of accounting principles IFRS15 and IFRS 9, which were adopted from 1 January 2018. By utilizing the same accounting standards in force in First Quarter 2017 these data are provided in order to allow comparability with 2017 data.

² The comparative data of 1H 2017 have been restated as a consequence of the completion in Second Half 2017 of the activities to identify the fair value of the assets and liabilities of the Sixtema S.p.A., which was fully consolidated starting from 1 April 2017

3 It is noted that with the objective of providing a basis for a meaningful comparison, the variations of the economic results, except where otherwise indicated, refer to 1H 2018 data that were prepared without the application of the accounting principles IFRS 9 and IFRS 15 ("IFRS 2017"), compared to the data for 1H 2017, also prepared without the application of these principles.

Results by Business Segment Net of Non-recurring items

Summary Income Statement by	1H 2018	EBITDA% 1H 2018	1H 2018	EBITDA% 1H 2018	1H 2017	EBITDA% 1H 2017	Change		Change IFRS 2017%
Business Segment (€ '000)	IFRS 2018	IFRS 2018	IFRS 2017	IFRS 2017	IFRS 2017	IFRS 2017	IFRS 2017	Total	Organic	Perimeter
Revenues
Digital Trust	45,503		45,341		39,184		6,157	15.7%	5.5%	10.2%
Credit Information & Management	37,170		37,170		36,813		358	1.0%	1.1%	-0.2%
Innovation & Marketing Services	31,656		31,656		9,407		22,250	236.5%	3.5%	233.1%
Other (Holding Co. costs)	-		-		1		(1)	-60.1%	-60.1%	0.0%
Total Revenues	114,330		114,168		85,404		28,764	33.7%	3.4%	30.3%
EBITDA
Digital Trust	11,505	25.3%	11,183	24.7%	10,039	25.6%	1,144	11.4%	6.5%	4.9%
Credit Information & Management	7,814	21.0%	7,814	21.0%	7,992	21.7%	(178)	-2.2%	-2.4%	0.1%
Innovation & Marketing Services	13,012	41.1%	12,986	41.0%	3,677	39.1%	9,309	253.2%	-0.4%	253.6%
Other (Holding Co. costs)	(3,102)	n.a.	(3,102)	n.a.	(2,186)	n.a.	(917)	-41.9%	-41.9%	0.0%
Total EBITDA	29,229	25.6%	28,881	25.3%	19,523	22.9%	9,358	47.9%	-2.4%	50.3%

This table exhibits the economic results of the Business Units excluding non-recurring components. During 1H 2018 the Group realized €179,000 from the sale of a building. Non-recurring costs totaled € 535,000, of which €401,000 relate primarily to legal and consultancy costs for M&A operations and € 134,000 relating to personnel reorganization costs.

Highlights – Digital Trust Net of Non-recurring items

€ mn	1H 2018	1H 2018	1H 2017	Change	Δ%
	IFRS 2018	IFRS 2017	IFRS 2017	IFRS 2017	IFRS 2017
Revenues	45.5	45.3	39.2	6.2	15.7%
EBITDA	11.5	11.2	10.0	1.1	11.4%
EBITDA Margin	25.3%	24.7%	25.6%	-1.0 pp

Revenues from the Digital Trust Business Unit amounted to €45,341 thousand, up 6,157 thousand euros compared to First Half 2017 (+15.7%), consisting of organic growth of 5.5% and an increase in the scope change of 10.2%.

EBITDA for the segment amounted to €11,183 thousand in First Half 2018 (+ 11.4% compared to 2017). Organic growth amounted to 6.5% while the aforementioned perimeter change accounted for an increase of 4.9%. The EBITDA margin of 24.7% is slightly down compared to First Half 2017. The decrease is attributable to the consolidation of Sixtema which has lower margins relative to other companies in the segment.

Highlights – Credit Information & Management Net of Non-recurring items

€ mn	1H 2018	1H 2018	1H 2017	Change	Δ%
	IFRS 2018	IFRS 2017	IFRS 2017	IFRS 2017	IFRS 2017
Revenues	37.2	37.2	36.8	0.4	1.0%
EBITDA	7.8	7.8	8.0	-0.2	-2.2%
EBITDA Margin	21.0%	21.0%	21.7%	-0.7 pp

In the Credit Information & Management segment revenues amounted to €37,170 thousand. Compared to First Half 2017 there was a slight increase of 1.0%, consisting of organic growth of 1.1% and a decrease of -0.2% for effect of the deconsolidation from June 2018 of Creditreform Assicom Ticino SA.

EBITDA decreased slightly (-2.2%) compared to the same period of the previous year. The EBITDA margin is equal to 21.0% compared to 21.7% in First Half 2017.

These results partly reflect the process of integration of the two companies Assicom and Ribes not yet fully completed, which resulted in Innolva SpA.

Highlights – Innovation & Marketing Services Net of Non-recurring items

€ mn	1H 2018	1H 2018	1H 2017	Change	Δ%
	IFRS 2018	IFRS 2017	IFRS 2017	IFRS 2017	IFRS 2017
Revenues	31.7	31.7	9.4	22.2	236.5%
EBITDA	13.0	13.0	3.7	9.3	253.2%
EBITDA Margin	41.1%	41.0%	39.1%	+1.9 pp

233.1% 236.5% Δ Scope Organic Total

In First Half 2018, segment revenues amounted to €31,656 thousand, +236.5% compared to First Half 2017. Of this latter, organic growth registered an increase of 3.5% while the change in scope accounted for 233.1%.

EBITDA amounted to €12,986 thousand, up €9,309 thousand compared to First Half 2017 (+253.2%) due entirely to the change in scope. The EBITDA margin for the period stands at 41.0% versus 39.1% as at 30 June 2017.

Balance sheet highlights

NFI decreased 7.9% principally as a result of solid free cash flow (€22.7 mn) which offset the investment in PPE (€7.1 mn)

Net Financial Indebtedness

€ mn	31/12/2017	30/06/2018
Net Financial Indebtedness	104.6	96.3
Gross Financial Indebtedness	145.9	143.8
Bank Debt	51.7	46.8
Loan from Tecno Holding S.p.A.	25.3	25.2
Debt associated w/acquisitions	65.7	66.4
PUT & CALL	50.6	53.1
Earn Out	4.0	3.7
Vendor loans (Co.Mark/Warrant)	11.1	9.5
Other Debt	3.2	5.4
Cash & Other ST Assets	(41.3)	(47.5)
Cash	(37.0)	(43.4)
Other financial assets	(4.3)	(4.1)

Net Financial Indebtedness («NFI») at 30 June 2018 equaled €96.3 million, a reduction of 7.9% versus the YE 2017 figure of €104.6 million. The decline was principally caused by the strong cash generation recorded during the period. Net Free Cash Flow generated in the six month period equaled €22.7 million, that reflects €29.9 million of cash from operations and €7.1 million absorbed by investments in fixed assets (property, plant and machinery) and intangible assets.

NFI at 30 June 2018 includes €66.4 million of debt associated with acqusitions. Of this, €53.1 million related to Put/Call options on the outstanding minority shares, €3.7 million of Earn Out and €9.5 million of vendor loans (i.e. the financial impact of delayed payments).

Free Cash Flow Effect on NFI

€ mn Cash in Cash out 104.6 22.7 12.1 2.6 0.7 0.5 1.0 0.04 96.3 NFI 31/12/2017 Free Cash Flow Dividends PUT adjustment IFRS 9 NFP Camerfirma Net Financial Other NFI 30/06/2018

adjustment

(30-04-2018)

Income/Costs

Agenda

I.	1H 2018 Results	4
II.	Looking Forward	14
III.	Appendix	16

Looking foward

2018 Full Year Results

Tecnoinvestimenti will continue its strategy to integrate the Group companies to maximize internal growth opportunities and synergies as well as to pursue inorganic opportunities, which remains a central element in the Group's development.

The solid results achieved in the first six months of the year, the positive trend of the business and the consolidation of the companies recently acquired permit the confirmation that the growth targets for the current year communicated to the market with the 2018-2020 Business Plan presentation will be amply achieved.

Agenda

I.	1H 2018 Results	4
II.	Looking Forward	14
III.	Appendix	16

Adjusted Net Profit

Summary Income Statement (€ '000)	1H 2018 1H 2018 IFRS 2018 IFRS 2017		1H 2017 IFRS 2017	Change IFRS 2017	Δ% IFRS 2017
Net Profit	14,603	14,434	8,617	5,818	67.5%
Non-recurring Revenues	(179)	(179)		(179)
Non-recurring Service Costs	401	401	757	(356)
Non-recurring Personnel Costs	134	134	380	(246)
Amortisation of Intangibles recognised upon cost allocation (PPA)	1,984	1,984	2,227	(242)
Non-recurring Financial Income			(747)	747
Tax Effect	(674)	(674)	(937)	263
Adjusted Net Profit	16,269	16,100	10,296	5,804	56.4%

Results by Business Segment Including non-recurring items

1H 2018	EBITDA%	1H 2018	EBITDA%	1H 2017	EBITDA%	Change
IFRS 2018	IFRS 2018	IFRS 2017	IFRS 2017	IFRS 2017	IFRS 2017	IFRS 2017	Total	Organic	Perimeter
45,682		45,520		39,184		6,336	16.2%	5.9%	10.2%
37,170		37,170		36,813		358	1.0%	1.1%	-0.2%
31,656		31,656		9,407		22,250	236.5%	3.5%	233.1%
-		-		1		(1)	-60.1%	-60.1%	0.0%
114,510		114,347		85,404		28,943	33.9%	3.6%	30.3%
11,642	25.5%	11.319	24.9%	10,039	25.6%	1.280	12.7%	7.9%	4.9%
7,554	20.3%	7,554	20.3%	7,462	20.3%	92	1.1%	1.1%	0.1%
13,012	41.1%	12,986	41.0%	3,677	39.1%	9,309	253.2%	-0.4%	253.6%
(3,335)	n.a.	(3,335)	n.a.	(2,793)	n.a.	(542)	-19.4%	-19.4%	0.0%
28,873	25.2%	28,525	24.9%	18,386	21.5%	10,139	55.1%	1.7%	53.4%
		1H 2018		1H 2018		1H 2017			Change IFRS 2017%

Tecnoinvestimenti Group Business Plan 2018-2020 approved by the BoD

Note: 2017 data reflect definitive results.

SBU Digital Trust (2/2) 2018-2020 Business Plan

III. Appendix

• Revenues will grow at almost double figures stability, compared to 2017

• The EBITDA will increase more rapidly

• The InfoCert Group targets significant growth in revenues (almost double-digit), in line with the trend of recent years. Enterprise Solutions (DTS) aims for double-digit growth.

• Sixtema, revenues are expected to grow moderately, on average
• Visura 2018-2020 Plan characterized by a substantial

*Note: 2017 data reflect definitive results.

Star Conference - Milan Borsa 27-28 March 2018

SBU Credit Information & Management (2/2) 2018-2020 Business Plan

• Revenues: recurring business revenues will be almost stable in 2018 and subsequently will grow slightly

• EBITDA: slight growth in the EBITDA margin

• The 2018-2020 Plan for the AssicomRibes Group is based on the following assumptions:

• ‐ Modest growth in revenues is assumed after 2018.
• ‐ assume a decrease in the incidence on revenues for data acquisition and legal advisory
• ‐ Labor costs, marketing costs and costs related to the IT structure are assumed to increase.
• ‐ Governance costs decrease significantly.
• REValuta's 2018-2020 Plan is characterized by:
• ‐ sustained growth in revenues in 2018 due to a successful marketing campaign in 2017
• ‐ By 2020, a more modest growth in revenues is assumed
• ‐ No change in margins

*Note: 2017 data reflect definitive results.

Star Conference - Milan Borsa 27-28 March 2018

SBU Innovation & Marketing Services (2/2) 2018-2020 Business Plan

• Revenues: 2018 revenues will grow with the scope of consolidation and the consolidation of the 12 month results of Warrant Group, as well as due to sustained growth of Co.Mark's business
• EBITDA will follow the trend of revenues

*Note: 2017 data reflect definitive results.

Co.Mark Group:

• revenue growth of 10+%, w/growth concentrated in 2018 and 2019 driven by an increase in the number of orders managed on average during the year. ~46% contracts refer to non-MISE (Ministry of Economic Development) projects, <10% from incentive policies of the MISE;
• Circa 30% of the 2018 and 2019 revenues refer to backlog
• Operating costs remain stable or proportional to revenues, with the exception of personnel costs (up in 2018)

Warrant Group:

• 2017 Revenues pro-forma demonstrated an increase 50+%
• Relative to Pro forma 2017 moderate growth expected in 2018-2020