TXT E-Solutions — Investor Presentation 2017

Oct 10, 2017

TXT e-Solutions

Corporate OverviewOctober 2017

Disclaimer

The material in this presentation has been prepared by TXT e-solutions ("TXT") and is general backgroundinformation about TXT's activities current as at the date of this presentation. This information is given insummary form and does not purport to be complete. Information in this presentation, including forecast financial information, should not be considered as advice or ^a recommendation to investors or potential investors in relation to holding, purchasing or selling securities or other financial products or instruments anddoes not take into account your particular investment objectives, financial situation or needs. Before acting onany information you should consider the appropriateness of the information having regard to these matters, any relevant offer document and in particular, you should seek independent financial advice. All securities andfinancial product or instrument transactions involve risks, which include (among others) the risk of adverse or unanticipated market, financial or political developments and, in international transactions, currency risk.

This presentation may contain forward looking statements including statements regarding our intent, belief or current expectations with respect to TXT's businesses and operations, market conditions, results of operationand financial condition, capital adequacy, specific provisions and risk management practices. Readers arecautioned not to place undue reliance on these forward looking statements. TXT does not undertake any obligation to publicly release the result of any revisions to these forward looking statements to reflect events or circumstances after the date hereof to reflect the occurrence of unanticipated events. While due care has been used in the preparation of forecast information, actual results may vary in ^a materially positive or negative manner. Forecasts and hypothetical examples are subject to uncertainty and contingencies outsideTXT's control. Past performance is not ^a reliable indication of future performance.

Unless otherwise specified all information is for the first semester ended ³⁰ June 2017.

Summer 2017 – A major Change to TXT Group's Business Perimeter

Before July 24th … … On July 24th

Historical Performance of TXT Next Division

+ NOTE: In 2016 TXT acquired PACE Aerospace & Engineering Technology GmbH, consolidated starting on April 1st, 2016, to accelerate international growth

^α NOTE: Net of one-off items ("official" 2016 EBITDA = 3.8 m€)

The New TXT Business Perimeter

Aerospace& Aviation

Aerospace & Aviation: Market Overview

Since 30 years Partner for our Clients to boost their Engineering Capabilities

Products & core Processes are highly complex … … calling for cooperation across an extensivenetwork of Specialised Partners

Customer Base - A Longstanding, Global Customer Base across the Value Chain

1st-Tier

Automotive8%

Other 4%

Airlines7%

• •A diversified Customer Base of Industry Leaders
• •Long-term partnership underpinning highly repeatable revenues streams
• •^Agrowing number of new, high-potential international customers in recent years
• •A significant up-selling opportunity

What We Do - Value Proposition Spanning the Entire Product Life-cycle

• • Breadthand Depth: focus on high-value niches, but understand the whole picture
• • Industryand Technology expertise, backed by Software Assets

How We Do It - Industry and Technology Expertise, backed by Software Assets

Engineering "Solutions": The "People + Software IP" Paradigm

• •A mix of Software Assets and Software / Systems Integration Services
• • The degree of packaging and the extent of commercial leverage of the Software Assets vary across the Value Proposition areas

How We Do It - Engineering Solutions: Software Assets Global Map

How We Do It - Flexible Engagement Models, from Traditional to Innovative

Turn-Keyservice engagements weight ¾ of the total, while Time & Material account for the remaining ¼

30+ Years in the Industry, 350+ Specialised Engineers and Growing Int'l Presence …

^A responsive and agile team: local presence, to provide best-in-class on-site support to key customers, backed by corporate competence centers, capable of delivering & supporting customers across their businessin 30+ Countries world-wide

… that Sustain a Strong Competitive Position, Recognised by Old & New Customers

A unique profile focused on software in specialized high-value niches across the entire Product Life-Cycle, that differentiates us from local and global competitors

	PRODUCT DESIGN & DEVELOPMENT		PRODUCTION & CUSTOMER ENGINEERING		SALES & PROCUREMENT	OPERATIONS
	PRELIMINARY DESIGN	ON-BOARD SOFTWARE	DIGITAL MANUFACTURING	PRODUCT CONFIGURATION	SALES & PROCUREMENT	TRAINING & SIMULATION	FLIGHT OPERATIONS
TXT	$\checkmark$
autran
7.7.77
philotech
AXKA
QUI
$@$ $C = 5$
CRITICAL
[ 40 (15
HCL
$\bullet$ TATA TOTA CONTROLSO HIMILA
Tech Mahindra

• • Small, Local Players:
• Deep in single niches, compete mainly in price and locally
• TXT differentiates and competes with its depth AND breadth, know-howAND IPs, resources to invest in co-innovation, ability to follow customers globally.Small local players are possible acquisition targets

•European-based Large Players:

• Grown via acquisitions and massive time & material contracts, are challenged on responsiveness, flexibility and margins. Forced to focus onhigh-volume low-value activities to bill large teams and spread across ^a wide spectrum of industries/domains (not only SW-related services!)
• TXT differentiates and competes with its people AND IP approach, focus on SW-related activities, and its ³⁰ years track record in managing resultsbased engagements and profitable turn-key contracts

•Large Off-shore Players:

• Mainly from India, historically rooted in technology-based; largely leveraging on off-shore delivery models, they lack the proximity andcustomer intimacy needed to deepen business understanding. Forced tofocus on high-volume low-value execution activities to bill massive teams.
• TXT differentiates and competes with its technology AND industry expertise, the depth of its know-how, ^a balanced compromise betweenproximity (local teams) and "near-shoring" (corporate competence center), that turns into an attractive value proposition for customers, especially in high-value, results-based engagements

Growth Strategy & Plans - Placing the Growth Strategy in the Context

Growth Strategy & Plans – Market Opportunity

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• 1. ^Aconsolidated Industry: global groups, with large investment budgets
• 1. High speed of innovation fuels sustained R&D / Engineering spending

5. Europe accounts for a large share of the Market

• 1. ^Alarge & healthy Industry, with historical and projected longterm growthpatterns
• 1. Engineering Solutions & Service Market worth 130 bn€; Aerospace & Automotive accounts for 20% each; Business Modelsevolving
• 1. ^Acompelling Value Proposition, and an outstanding track-record around high-value specialised SW niches, differentiating from bothglobal & local competitors
• 1. Not only large R&D and Engineering service providers: a fragmented competitive landscape, that offers space for both organic and inorganic growth, around software niches of high specialisationacross the product life-cycle

Growth Strategy & Plans – Summary

•

•

•

Solid Foundations

• • 30+ yearsin the Industry
• 50+ Customers, industry leaders
• • Breadth AND depth across the Product Lifecycle, with focus on software
• • 330+ specialised engineers, withglobal delivery & supportcapability
• «People»'s Technology ANDIndustry expertise, backed by a portfolio of software assets
• • Track record in risk-sharing & results-basedengagements
• Solid Management Team with a track record in self-sustainable organic growth ANDacquisitions

Identified Growth Initiatives

Our Vision: to become an Int'l, specialized, multi-niche, mid-sized (100 m€) provider of Engineering "Solutions" serving the global Aerospace & Aviation Industry

1. i I g n o r a n c h G t r o w	l f h B i t t t g g g e a p a o r m o a r e a e n c e • i i f l i i d t t g g e n n e e r n s o w a r e s o u o n p r o v e r s l l d- d S i i i i i i t t t t g e e c v e y a r e m s z e a c q u s o n s •
2. O i g r a n c i l I t t n e r n a o n a i E p a n s o n x	h h f l l G i t t t r o w e s a r e o w a e n c u r r e n • f h i h l i i i t t t g c u s o m e r s : o c u s o n e r- v a u e a c v e s d k- h d l i i t g g g a n r s s a r n e n a e m e n m o e s C 'l l i I t t t a p r e n e n c s o m e r s, e e r a g n g o n u w u v • h b i i f f d t t t t e c o m n a o n o s o w a r e a s s e s a n i l i d i b i l i i t s p e c a e s e r c e c a p a e s z v
3. O f f i g e r n I i t n n o v a o n	P d i i d h b i l i i t t t t t r o u c n n o v a o n : e x e n e c a p a e s • d h f h f f i f S A t t t a n e r a n g e o e o e r n g o s s e s w S i i i d h f f i i h t t t g e r v c e n n o v a o n : e x p a n e o e r n w • d M S i g a n a e e r v c e s
4. A i t t o m o e u v	D i i f i i & i d h i t t t t g v e r s c a o n u p s e- r o w o p p o r u n y •

Banking & Finance

What We Do & Key Customers

• • Since 15 years focused on Software Quality and on Independent Testing, Verification & Validation of software, to ensure the functioning, functional fit, and compliance of IT systems
• •It has adapted best practices, tools and methodologies from Aerospace to the needs of the Banking Industry
• •It targets the 40-50 top Italian Banking institutions
• • With 100%of revenues from SW Services and from Italian Customers, it is regular contributor to cash-flow
• •It is experiencing a good market momentum

How We Do It – Domain Expertise, Mastering of Methods & Tools and Proprietary "Testing Bricks"

Services across the end-to-end Software Quality and Independent Testing, Verification & ValidationLifecycle

Te t s	Te t s	Te t s	fe De t c	Te t s	Te M t t s a na g e m e n
S t t ra e g y	lo De t ve p m e n	io Ex t e cu n	& M t a na g e m e n	iro En t v nm e n s	i Su t e
			Re in t p o r g	d A in is io t t m ra n	d in is io A t t m ra n

• • Domain Expertise in core Banking domains (Accounts, Lending, Mortgage, Internet Banking; Card and Digital Payments; Branch & Departmental applications): Functional Testing accounts for the largest share
• • Deep knowledge of Methodologies andTools, spanning across the entire QA & Testing process
• • Testing Services both "on-site" and "off-site", with an approach based on "Test Factory"
• •People expertise, and a growing library of Testing "Bricks": our reusable Software IPs

Growth Strategy & Plans – Market Opportunity

• • Stratified, complex, highly heterogeneous & rapidly evolving IT landscape, coupled with increasingly stricter regulatory frameworks, makes Software Quality a mandatory, yet challenging task
• •Emerging "Fintech" software & services increase complexity of the Banking software systems
• • SW Quality is a key pillar of Banks' IT strategy and it captures a growing Portion of Banks' IT Budgets
• •Growing Software Quality costs demand for new approaches to drive higher efficiency in QA processes
• •TXT estimates that the Italian Market potential for QA & Testing Services in the Banking sector is 100+ M€

Keepgrowing organically in the Sw Quality & Testing domain, with a primary focus on the Italian Market

Strengthen the Foundations of Software Quality & Testing Services

• • Domain Expertise & IP assets: continue differentiating by deepening domain knowledge in specific Banking processes & challenges, capturing it into standardised"Testing Bricks"

• • Standard Tools, but TXT Methods: Innovate in Testing methodology, approach and best practices, mastering a wide range of market leading Tools: HP Enterprise ALM Suite, Fortify, IBM Rational, opensource, …

• Expand the portfolio of Testing capabilities & Prectices to Security, Mobile and Fintech-related testing services and to Test Automation approaches, and integrate them into the Test Factory

Summary& Financial Details

TXT e-solutions Global Targets

•Organic Growth

• –Aerospace & Aviation: 8-10% per annum, with focus on International Growth
• Banking & Finance: 5+% per annum, 100% Italy
• – Self-financedR&D and Marketing & Sales
• Constant equilibrium across growth & profit
• –EBITDA Margin: 12% Global Target

•Inorganic Growth – Aerospace & Aviation

• Mid-sized(5-20 m€ revenues) and profitable
• –International Profile
• Solid customer base, strong team, committed management and long history in the industry
• –Highly specialized knowledge sustained by innovation capability and differentiating software assets
• Complementary, to broaden one/more of: the offering, the geographical presence, the customer base, the penetration within existing accounts and/or domains
• Fairly valued

TXT e-solutions – Top Management Team

Alvise Braga Illa – Chairman

After graduating at the Polytechnic Institute in Milan, Mr Braga Illa was for ¹⁰ years in research and teaching at the Lincoln Laboratory and Massachusetts Institute of Technology, innovating in satellite technology, optical communication and network systems. He directed the R&D Labs at Italtel, founded Zeltron S.p.A. andmanaged the restructuring of Ducati Energia as General Manager. Mr. Braga Illa founded TXT AutomationSystems, later sold to ABB (1997), and TXT e-solutions (1989).

Marco Guida – CEO

Graduated in Electronic Engineering, Marco Guida managed innovative IT projects in various areas of the manufacturing operations of Pirelli Group until 1994, when he joined TXT e-solutions. Initially responsible for Advanced Information Systems, in January ²⁰⁰⁰ promoted to Vice President. As Director of International Operations he successfully led the transformation of TXT e-solutions from an Italian to an International Group. Since ²⁰⁰⁹ he is Chief Executive Officer of TXT.

Paolo Matarazzo – CFO

After graduating from Milan's Bocconi University and majoring in business administration at the University of San Diego (California), has had significant experience in the financial world. He was initially an analyst inLondon for three years and then worked for the Recordati Group for seven years, with responsibility for treasury management. In the following seven years he was Head of Finance, Administration & Control inEurope for Eurand, ^a company listed on NASDAQ. He joined TXT in November ²⁰⁰⁷ as Group CFO.

H1 2017

€ ho d t us an	S I E M 2 0 1 7 %		S I E M 2 0 1 6	%	Va % r
R E V E N U E S	3 6. 1 3 2	1 0 0, 0	3 3. 1 8 3	1 0 0, 0	8, 9
D ire t c ts c os	1 6. 9 6 7	4 0 7,	1 8 4 5. 7	4 8 7,	1 7,
S S G R O M A R G I N	1 9. 1 6 5	5 3, 0	1 7. 3 3 6	5 2, 2	1 0, 6
Re h a d De lop t c ts se ar c n ve me n os	3. 6 3 4	1 0, 1	3. 1 4 4	9, 5	1 5, 6
Co ia l c ts mm er c os	7. 7 0 0	2 1, 3	6. 5 3 2	1 9, 7	1 7, 9
Ge l a d A dm in is ive tra t ts ne ra n c os	4. 4 1 4	1 2, 2	4. 3 4 6	1 3, 1	1, 6
E B I T D A be fo S k Op io to t re c ns	3. 4 1 7	5 9,	3. 3 1 4	1 0, 0	3, 1
S k Op ion to t c s	1 6 2	0, 4	-	-	n.s
E B I T D A	3. 2 5 5	9, 0	3. 3 1 4	1 0, 0	( ) 1, 8
Am iza ion de ia ion t t t or p re c ,	6 8 4	1, 9	5 3 2	1, 6	2 8, 6
O P E R A T I N G P R O F I T ( E B I T )	2. 5 7 1	7, 1	2. 7 8 2	8, 4	( 7, 6 )
F ina ia l inc ( ha ) nc om e c rg es	( 3 0 8 )	( 0, 9 )	( 1 8 ) 5	( 0, ) 5	n.s
E A R N I N G S B E F O R E T A X E S ( E B T )	2. 2 6 3	6, 3	2. 6 2 4	9 7,	( 1 3, 8 )
Ta xe s	( 6 9 6 )	( 1, 9 )	( 6 0 9 )	( 1, 8 )	1 4, 3
N E T P R O F I T	1. 5 6 7	4, 3	2. 0 1 5	6, 1	( 2 2, 2 )

Acquisition & consolidation of PACE GmbH from April 1st, 2016

Strong Balance Structure

€ h d t o u s a n	3 0. 6. 2 0 1 7	3 1. 1 2. 2 0 1 6	V a r
I i b l t t n a n g e a s s e s	2 0. 7 9 1	2 1. 2 9 6	( ) 5 0 5
T i b l t a n g e a s s e s	1. 6 2 6	1. 5 9 8	2 8
O h f i d t t e r x e a s s e s	2. 8 4 4	2. 5 3 4	3 1 0
F i d A t e s s e s x	2 5. 2 6 1	2 5. 4 2 8	( 1 6 ) 7
I i t n v e n o r e s	3. 9 3 2	3. 1 4 6	7 8 6
T d i b l r a e r e c e v a e s	1 9. 6 2 3	2 3. 7 4 0	( ) 4. 1 1 7
O h h t t t t e r s o r e r m a s s e s	3. 2 4 1	2. 6 2 9	6 1 2
T d b l r a e p a y a e s	( ) 1. 2 7 9	( ) 1. 6 2 6	3 4 7
T b l a x p a y a e s	( ) 2. 4 8 7	( ) 2. 5 3 2	4 5
O h b l d h l i b i l i i t t t t e r p a y a e s a n s o r e r m a e s	( ) 1 7. 5 6 0	( ) 1 7. 9 2 8	3 6 8
N k i i l t t e w o r n g c a p a	5. 4 7 0	7. 4 2 9	( 5 ) 1. 9 9
S i i i i d h l b l t t t e v e r a n c e a n o e r n o n c u r r e n a e s	( ) 3. 9 1 4	( ) 3. 9 4 5	3 1
C i l l d t a p a e m p o y e	2 6. 8 1 7	2 8. 9 1 2	( ) 2. 0 9 5
S h h l d ' i t a r e o e r s e q u y	3 2. 2 8 6	3 4. 2 8 3	( 1. 9 9 ) 7
N f i i l d b t t e n a n c a e	( 4 6 9 ) 5.	( 3 1 ) 5. 7	( 9 8 )
F i i f i l l d t n a n c n g o c a p a e m p o e y	2 6. 8 1 7	2 8. 9 1 2	( 2. 0 9 5 )

Dividends & Shareholder's Return 2011-2017

• • Share Price
• • 31.12.2010: 1.51€/share (rebased for free share distribution)

• •21.9.2017: 10.88€ /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
• •2016: 0.25 € / share
• •2017: 0.30 € / share

TXT Market Capitalization (m€)

Shareholding Structure – June ²⁰¹⁷