TXT E-Solutions — Investor Presentation 2015

Oct 5, 2015

TXT e-Solutions

Corporate Overview September 2015

FY 2014 & H1 2015 Results

		FY 2014 (Actual)	H1 2015
	Revenues:	55.9 m€ (+6.3%)	31.1 m€ (+13.2%)
	EBIT	5.5 m€ (+10%)	2.8 m€ (+22.8%)
	Free Cash Flow	9.3% of Rev.	10.2% of Rev.
	NFP:	8.5 m€	9.5 m€

R&D Investments: strengthen leadership:

• 2010: 2.5 m€
• 2014: 4.7 m€

Commercial Investments: foster Int'l growth:

• 2010: 7.4 m€
• 2014: 11.1 m€

TXT Group: Major Growth Opportunities & Emerging Opportunities

International Software Vendor

Major Growth & Profit Opportunity, through direct investments & acquisitions: Retail

• Integrated Planning & Product Lifecycle Management Software …
• … for Fashion, Luxury & Specialty Retailers

Emerging Opportunity: CPG & Manufacturing

• Sales & Operation Planning and Supply Chain Collaboration Software …
• … for CPG & Manufacturing Industries

Advanced System Integration

Mature Business, Int'l growth possible through acquisitions: Aerospace & High-Tech

• Embedded Software & Simulation-based Training solutions …
• … for Aerospace, Automotive & Transport

Emerging Opportunity: Banking & Finance

• Independent Testing of Software …
• … for Banking & Finance organisations

TXT Retail – Major Growth & Profit opportunity for TXT Group

Expertise across categories & channels: Unique, Growing Customer Base of 300+

• 15 New Major Customers in last 12 months; 50+ Go-Lives of Major Projects …
• … across all Segments & Geographies

Omnichannel End-to-End Planning, Collection Development & Collaboration

PLM	Sales & Buy Planning	Assortment & Purchasing	In-Season Planning
Trend Research & Design	Strategic Plan	Assortment Strategy / Range Plan	Category and Item OTB
Line Planning	Merchandise Plan	Assortment Plan	Store Replenishment and Allocation
Concept/Design	Multichannel Sales Plan	Initial-Allocation	Store Transfers / Return to DC
Samples Management	Preseason OTB	Purchase Orders	Price, Promotion & Markdown Planning
Industrialization/ Sourcing	Forecasting	Category Forecasting Item Forecasting	Store Forecasting
Mobile Catalogue	Supply Chain	Production and DC Replenishment Distribution Planning	Supply Chain Visibility and Collaboration

Workflow Management, Performance Management, Monitoring, and Reporting

TXT Retail - Competitive Position: Leadership in the Target Markets

9

Recognised Leader in Fashion, Luxury & Specialty Retail

Gartner Assessment across ALL types of merchandise

AgileFit: from SW Product to Business Best Practices Ready to Go

Committment to Innovate: 4,7 m€ invested in Product & Business Innovation

• Total Cost of ownership: TXT On-Cloud

• Assortments based on Consumer Analytics

TXT Retail 2015 & Beyond - Growth Strategy & Drivers: Expand Geography

Baseline organic growth, accelerated through targeted acquisitions, sustained by continuous investments in product & business process innovation, self-financed through Profit & Cash generated by the business & growing Stock value

TXT Retail 2015 & Beyond - Growth Strategy & Drivers: Add Market Segments

Baseline organic growth, accelerated through targeted acquisitions, sustained by continuous investments in product & business process innovation, self-financed through Profit & Cash generated by the business & growing Stock value

TXT Retail 2015 & Beyond - Growth Strategy & Drivers: Add Products & Services

Baseline organic growth, accelerated through targeted acquisitions, sustained by continuous investments in product & business process innovation, self-financed through Profit & Cash generated by the business & growing Stock value

Delivery & Support

CPG & Manufacturing: Setting the Stage for Future Profitable Growth

15

In-depth Industry Know-how:

Since 30 years Partner for our clients to boost their engineering capabilities

TXT Next – Aerospace & High-Tech: Strategy & Drivers

Healthy & profitable growth around the «as-is» perimeter, building on a baseline revenues stream from long-lasting relationships with core clients, and targeting International opportunities, both organically & through Acquisitions.

TXTNext - Banking & Finance: Setting the Stage for Future Profitable Growth

• Approx. 6 m€ in 2014; market focus: Italy
• A growing customer base of mid-large Banks

• Long-lasting relationships with healthy clients

• Core Offering: Italian leadership in

• Independent Testing of Software: from functional & performance testing to mobile & security testing, under the push of Italian & EU regulatory requirements

– Intranet Portal & Smart Working Solutions

• TXT Retail

• A dynamic, large & growing Global Market, a sustainable leadership position (Products, Team & Customer Base), multiple drivers of growth
• 2014: further consolidated Europe, significantly strengthened North America (Brand recognition, Team & Customer Base) and major Product evolution (performance & scalability, usability, AgileFit)
• 2015 (and beyond) the next step in our Global leadership journey: start-up APAC market, Cloud services, Customer Analytics, continue searching for further targeted acquisitions
• TXT Next Aerospace & High-Tech
• Highly fidelised customer base, partner of choice of all key Italian players, solid team and specialised know-how
• 2014: refined Value Proposition, grown Customer Base in Italy and consolidated operations in UK & D, started seraching for acquisition targets in Europe
• 2015: continue developing organically and searching for targeted acquisition opportunities to accelerate international growth
• TXT Group: 2 opportunities to drive, from a solid starting point, upside longer-term growth
• TXT Perform: S&OP and Supply Chain Collaboration software for CPG & Manfacturing Industries
• TXT Next Banking & Finance: Independent Testing of Software for Banking & Finance organisations

APPENDIX – FINANCIAL DETAILS

H1 2015 Financial highlights

• Revenues: € 31.1 million (+ 13.2% compared to normalized H1 2014)
• TXT Perform grew +13.0%; TXT Next +13.4%,
• Software revenues +36.6%: Service revenues +6.4%.
• 56% of revenues from outside Italy.
• EBITDA: € 3.4 million (+13.7% compared to normalized H1 2014).
• R&D investments (+14.1%)
• Commercial investments (+12.8%)
• EBIT: € 2.9 million (+22.8%).
• Net income: € 2.3 million, or 7.5% of revenues
• Net Financial Position at 30.6.2015: € 9.5 million

H1 2015 – Growth of Revenues and R&D Investments

€ thousand	I SEM. 2015	%	I SEM. 2014 (1)	2014 non recurring	I SEM. 2014 "Normalized"(2)	%	Var % vs 2014	Var % vs 2014 "Normalized"
REVENUES	31.126	100,0	28.972	(1.468)	27.504	100,0	7,4	13,2
Direct costs	14.878	47,8	13.464	(407)	13.057	47,5	10,5	13,9
GROSS MARGIN	16.248	52,2	15.508	(1.061)	14.447	52,5	4,8	12,5
Research and Development costs	2.716	8,7	2.380		2.380	8,7	14,1	14,1
Commercial costs	6.392	20,5	5.666		5.666	20,6	12,8	12,8
General and Administrative costs	3.764	12,1	3.431		3.431	12,5	9,7	9,7
EBITDA	3.376	10,8	4.031	(1.061)	2.970	10,8	(16,2)	13,7
Amortization, depreciation	519	1,7	643		643	2,3	(19,3)	(19,3)
OPERATING PROFIT (EBIT)	2.857	9,2	3.388	(1.061)	2.327	8,5	(15,7)	22,8
Financial income (charges)	(112)	(0,4)	(124)		(124)	(0,5)	(9,7)	(9,7)
EARNINGS BEFORE TAXES (EBT)	2.745	8,8	3.264	(1.061)	2.203	8,0	(15,9)	24,6
Taxes	(405)	(1,3)	(607)	197	(410)	(1,5)	(33,3)	(1,1)
NET PROFIT	2.340	7,5	2.657	(864)	1.793	6,5	(11,9)	30,5

current year, financial results as of 30.6.2014 have been "Normalized" excluding non-recurring Revenues and Costs. Taxes have been calculated

Strong Balance Structure

€ thousand	30.6.2015	31.12.2014	Var
Intangible assets	15.414	15.079	335
Tangible assets	1.377	1.249	128
Other fixed assets	1.766	1.692	7 4
Fixed Assets	18.557	18.020	537
Inventories	2.461	1.821	640
Trade receivables	21.008	18.571	2.437
Other short term assets	2.265	2.197	6 8
Trade payables	(1.687)	(1.540)	(147)
Tax payables	(1.337)	(1.117)	(220)
Other payables and short term liabilities	(14.959)	(13.606)	(1.353)
Net working capital	7.751	6.326	1.425
Severance and other non current liabilities	(3.799)	(3.841)	4 2
Capital employed	22.509	20.505	2.004
Shareholders' equity	31.972	28.970	3.002
Net financial debt	(9.463)	(8.465)	(998)
Financing of capital employed	22.509	20.505	2.004

Dividends & Shareholder's Return in the last 4 Years

•Share Price	for free share distribution) •17.9.2015: 7.64€	•31.12.2010: 1.51€/share (rebased /share		•	Dividends •2011: 1 € /share (extraordinary, rebased) •2012: Free Share Distribution 1:1 •2013: 0.20 € /share (rebased)
					•2014: Free Share Distribution 1:1
					•2014: 0.25 € / share •2015: Free Share Distribution
					1:10
					•2015: 0.25 € / share

TXT Market Capitalization (m€)