DigiTouch S p A : Corporate Presentation for NEXT GEMs Conference 3-4 November 2020

3-4 November 2020

CORPORATE PRESENTATION

NEXT GEMs Conference 2020

ITALIAN LEADER IN

CLOUD MARKETING

SUPPORTING CLIENTS

IN OMNICHANNEL MARKETING, DIGITAL TECHNOLOGIES AND E-COMMERCE SERVICES

2

GRUPPO DIGITOUCH

A FAST GROWING INDEPENDENT DIGITAL SERVICES PLAYER

• ESTABLISHED IN 2007
• PUBLIC COMPANY, LISTED on AIM ITALIA since 2015
• 300+ HIGHLY SKILLED PEOPLE
• OFFICES in ROME and MILAN
• FULLY GDPR COMPLIANT
• 300+ CLIENTS

39 Million

REVENUES 2019

5.8 Million

EBITDA adj. 2019

7.8% 2015-2019

CAGR

MISSION	Supporting our clients on their Digital Transformation efforts through an integrated offer of
Digital Marketing, Technology and E-commerce services with a market centric approach.

Gruppo DigiTouch is an ISO-9001 Certified Company for:

• business management systems
• design and delivery of training interventions in Digital Transformation area

3

OUR EQUITY STORY

• Experience in M&A
• Capability in People & Process integration
• Focus on mid-term Business Innovation

LAUNCH

of DigiTouchConsulting

DigitalAutomotiveSolutions

	2007		2015	PARTNERSHIP	2017		2019	SALE
		Strategic- commercial		of Open Gate Italia
		AQUISITION		with IPG				AQUISITION
			SALE		AQUISITION
		of Performedia			of Conversion
				of Audiensto Bango		of Purple Ocean	& Nextmove

FOUNDATION		FOUNDATION		AQUISITION		AQUISITION
of Gruppo
DigiTouch	2014	Audiens	2016	Participationof Open Gate Italia	2018	of Meware	2020
	DigitalAutomotiveSolutions	SALE
		AQUISITION		of MediaMobto Mobyt

of TheBlogTvCommunities	AQUISITION
of BackOffice-
ofOptimized Group
Mutuiperlacasa.com
of E3	LAUNCH
STOCK EXCHANGE QUOTATION	of the agencytrading desk
DapCenter
on AIMItalia

4

TARGET MARKET VALUE

ABOUT 4.86 BILLION EUROS

	ITALIAN MARKET (BILLION EURO)	2017	2018	2019
	ADVERTISING ONLINE	2.68	2.98	3.27
OMNICHANNEL
MARKETING
SERVICES	EVENTS & SPONSORSHIP SERVICES	1.2	1.2	1.2
	BIG DATA AND DATA ANALYTICS	1.1	1.3	1.7
SOFTWARE
MARKET

ESTIMATE

DEVELOPMENT

H1-2020

• 17%
• 71%
• 10%

IMMEDIATELY TARGET MARKET
NOTE	(BILLION EURO) FOR DIGITOUCH
About 70% of the online market is	1.00
concentrated on Google, Facebook, Amazon
The B2C component represents approximately	0.72
60% of the total value (the remaining part is
represented by corporate events)
The market includes 16% of infrastructure	0.63
resources, 47% software and 37% of services

		APPLICATION SOFTWARE	0.33	0.34	0.36
		CRM CONTENT APPL.	0.79	0.86	0.94
		SYSTEM INTEGRATION	2.29	2.34	2.39
SYSTEM
INTEGRATION &
HOSTING		HOSTING INFRASTRUCTURE	0.79	0.85	0.914
		CAGR 2020-2023: 10-15%
		IMPACT OF CAGR 2020-2023: neutral/acceleration

- 10%	In this market segment mainly medium-large	0.65
	companies operate for 50%
- 10%	Estimate of system integration activities	0.95
functional to marketing / CRM / content ~ 40%
- 3%		0.91
		4.86

Source: Integrated Communications System (SIC) 2018, Internal Analysis, Big Data Observatories of the Polytechnic of Milan, Assintel Report

5

A FULLY INTEGRATED OFFER

CREATE VALUE FOR CLIENTS BY LEVERAGING ON INTEGRATED APPROACH AND CROSS FERTILIZATION

CORE OFFER

VALUE FOR CLIENTS

TECHNOLOGY	E-COMMERCE	MARKETING
SERVICES	SERVICES	SERVICES
Data analysis & insights	E-commerce solutions	Strategy
Business analytics & predictive	Interfaces development	Omnichannel marketing
models	Experience Design	Content & Creativity
Data science & machine learning	Cloud Solutions	Tracking
Mar-Tech system integration	Cyber Security	SEO & CRO
Marketing Automation		Shopper Marketing
Business Process Automation		Digital event platform

Plan, implement and manage	Display and sell clients'	Promote market and services
clients' digital offers	goods and services digitally	and recruit clients online and
		offline

We are a Cloud Marketing

Company. We focus on integrating Technology, Marketing, Resources and Skills. Flexibility, market centricity, consultancy and assets integration are the keys. This is a winning approach that allows the achievements of our clients' challenging goals.

6

MULTIPLE OWNED TECHNOLOGIES, PARTNERS AND TECH

SKILLS WITHIN THREE CORE DIVISIONS

OWNED TECH ASSTES

SKILLS IN TECHNOLOGY OTHER TECH PARTNERS ASSETS

TECHNOLOGY SERVICES		E-COMMERCE SERVICES		MARKETING SERVICES
Cognitive Platform	Sales Agent	Purple X	Digital Human		Gamification	Store Locator
Experience		Platform iEGP®
Dealer Tab	Gamification				Social CMS	Voice CMS
Platform iEGP®
	Social CMS				Chatbot	Digital Human
Store Locator				Experience
						Custom CMS
Chatbot	Custom CMS
Voice CMS
Test Automation	BPA	UX/UI			Pac	Analytics
development

Risk Management

7

SERVICES STRUCTURE: WE CREATE VALUE FOR CLIENTS ALL

OVER THEIR VALUE CHAIN

= Services supplied by the recently acquired companies Conversion - Nextmove

8

A MARKET CENTRIC ORGANIZATION

MATRIX STRUCTURE WITH KEY ROLE PLAYED BY CLIENT PARTNERS

• The Group has adopted an organizational model with a matrix structure based on two dimensions: skills and market and in which the figures of the Client Partner (CP) play a key role. The matrix model will further evolve with the introduction of "Industries" skills.
• This model encourages the development of revenues, a collaborative attitude and a deeper awareness of customer needs.
• Full market centric approach

MARKET

				SKILLS
SOCIAL	CREATIVITY	OMNICHANNEL	SEO & CRO	CLOUD	BI &	E-COMMERCE	APP	TRAINING
	OMNICHANNEL	MEDIA		SERVICES	MACHINE			SOLUTIONS
	EXPERIENCE	STRATEGY			LEARNING
	DESIGN

CLIENT A	CP
	CP
CLIENT B
	CP
CLIENT C
	CP
CLIENT …

9

COMPETITIVE ARENA

TECHNOLOGY

MARKETING

Gruppo DigiTouch competes with big

E-COMMERCE consultancy groups that have consolidated their market offer with a

mix of consulting, marketing and tech competences.

Gruppo DigiTouch's advantage in comparison with this big players stands on the superior agility and ability in delivering customized projects.

There is an overall market convergency in the area of "Integrated Offer": this will generate additional market consolidation.

INTEGRATED

OFFER

10

KEY DIFFERENTIATING POINTS

MARKET CENTRIC APPROACH

We can support our clients not only in a logic as a service but with a full

outsourcing approach,

sharing results & objectives.

		R&D OF INNOVATIVE
MULTI		TECHNOLOGICAL
DISCIPLINARY	SIZE & AGILITY	SOLUTIONS
TALENTED
TEAM

STRONG

MANAGEMENT

STRATEGIC

PARTNERSHIPS

FOCUS ON DATA-

DRIVEN CUSTOMER

EXPERIENCE

INTEGRATED OFFER

AND CONSULTANCY

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HIGHLY DIVERSIFIED PORTFOLIO

HANDS ON EXPERIENCE IN SEVERAL VERTICALS. HERE FOLLOWING THE MAIN CLIENTS

RETAIL&	FOOD&BEVERAGE,	PUBLIC	FASHION&	FINANCE&	TELCO,UTILITIES,	EDUCATION,	PHARMA&
E-COMMERCE	CONSUMERGOODS	ADMINISTRATION	LUXURY	INSURANCE	TECH &SERVICES	ENTERTAINMENT,	HEALTHCARE
						TRAVEL&
						AUTOMOTIVE

12

PARTNER OF AN INTERNATIONAL NETWORK OF PLAYERS

Gruppo DigiTouch has tightened collaborations with independent international players to help the brands expand and advertise their activity abroad.

The Group is able to assist national and international clients in strategies of digitalisation and marketing at a global level.

58%

ofourclients

havean

international

distribution

12%

ofourtotal

marketingcampaigns

revenuesare

generatedfromoutof

Italyactivities

HIGH GROWTH POTENTIAL

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MANAGEMENT FOCUS

.O6 ORGANIC AND NOT ORGANIC GROWTH

INNOVATION	O1.		CLIENT DRIVEN
.O5 INTEGRATED OFFER

SAS

O2. .O4TRAINING

TALENT NURTURING &

.O3 DATA-DRIVEN APPROACH

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LAST M&A OPERATION

ACQUISITION OF CONVERSION - NEXTMOVE

Omnichannel Marketing Leader with strong	Digital Transformation Agency.
Strategic & Creative Approach.

MAIN SKILLS	MAIN SKILLS
App Development
ADV&Content	Web Development: Website&E-commerce
Social Media Creativity	Cloud System Integration
Shopper Marketing	IoT and Industry 4.0
Brand Activation	Cloud Infrastructure Management
Events	(Amazon Web Services)

PEOPLE	PEOPLE
22 People Creative Team	8 People Development Team
10 People Omnichannel Delivery Team	5 People Design Team
10 People Omnichannel Client Service Team	3 People Client Service Team

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GROWTH STRATEGY

O1. INCREASE THE NUMBER OF

CUSTOMERS

O2. INCREASE THE RELEVANCE ON THE CUSTOMER

O3. INTERNATIONALIZE THE BUSINESS

O4. INCREASE VISIBILITY AND APPEAL OF OUR BRAND

• Attendance at public and private tenders
• Attendance at marketing, tech and digital transformation events
• Offer integrated projects with strong integration of technology between our systems and the client's ones
• Moving on with international M&A
• Speech opportunities at marketing, tech and digital transformation events
• Press opportunities

16

ITALIAN ADVERTISING MARKET

Total ADV	TV	Radio	Digital	Print	OOH
Market

- 15.8

- 22.3

- 26.8

H1-'20 VS H1-'19 (∆ %)

- 37.4

- 33.1

- 59.8

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CLOSING H1 2020 - PROFIT & LOSS

GRUPPO DIGITOUCH - RECLASSIFIED CONSOLIDATED INCOME STATEMENT

(million euros)		H1 2020		H1 2019		Change
		[A]	%	[B]	%	[A]-[B]	%
Operating revenues	13,78	92	15,36	92	-1,59	-10
Other revenues	0,83	5,5	0,83	5	0,00	0
Capitalized Costs	0,34	2,3	0,43	2,6	-0,09	-21
Total revenues		14,95	100	16,62	100	-1,67	-10
Operating costs	7,98	53	10,95	66	-2,97	-27
Labour costs	4,36	29	3,11	19	1,25	40
EBITDA Adjusted		2,61	18	2,56	15	0,05	2
Non-recurring costs	0,14	1	0,17	1	-0,02	-14
EBITDA	2,47	17	2,40	14	0,07	3
Depreciation, write-downs,
Other provisions and charges	1,73	12	1,58	9,5	0,15	10
EBIT		0,74	5	0,82	4,9	-0,08	-10
Financial income/(expense)	-0,16	-1	-0,21	-1	0,05	24
Adjustments on financial assets	-0,01	0	0,00	0	-0,01	-3.976
Profit before tax		0,57	3,8	0,61	3,7	-0,04	-6
Taxes of the year	-0,18	-1	-0,21	-1	0,03	13
Consolidated Net Profit	0,39	2,6	0,40	2,4	-0,01	-3
Of competence:
Group		0,39	2,6	0,40	2,4	-0,01	-3
Third-party equity interest	0,31	2	0,24	1,4	0,07	29

n.a. not applicable

Total revenues in the first half of 2020 amounted to approximately 15.0 million euros, down by 10% compared to the same period of 1919.

At the cost structure level: operating costs recorded a positive change of 27% but personnel costs (mainly due to the Meware aggregation) increased by 40%.

In terms of margins, EBITDA adjusted of 2.6 million

euros is in line with the figure for the first half of 2019.

The amortization, depreciation and write-downs component is up compared to last year. In particular, investments entered into the production cycle that were completed in the previous year and in compliance with ITA GAAP, the goodwill from equity investments is amortized.

Pre-tax profit and net profit are in line with the 2019 figure.

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CLOSING H1 2020 - GOODWILL COVERAGE INDEX

	FY-2017	FY-2018	FY-2019	H1-2020
(million euros)
Revenues	28,887	32,233	38,947	14,948
Residual Goodwill	11,363	10,014	8,585	7,856
Net Assets	14,083	14,066	14,500	14,650
Residual Net Assets after startup coverage	2,720	4,052	5,915	6,794
Goodwill depreciation	1,245	1,348	1,489	729
Net Results	0,416	0,268	0,233	390
Adjusted Net Results	1,661	1,616	1,722	1,119
% Net results on revenues	6%	5%	4%	7%

Adjusted Net Result: heavily impacted by the effects of the amortization of goodwill accounted for in accordance with the application of the OIC.

Residual Net Equity: highlights the ability to cover the residual value of goodwill.

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CLOSING H1 2020 - BALANCE SHEET

GRUPPO DIGITOUCH - RECLASSIFIED CONSOLIDATED BALANCE SHEET

(million euros)	30-June-2020	31-Dec-2019	Change
	[A]	[B]	[A]-[B]	%
Fixed Assets	14,87	14,99	-0,12	-0,8
Goodwill	7,86	8,58	-0,73	-8,5
Development Costs	0,34	0,34	0,00	0,1
Other intangible assets	5,56	5,57	-0,01	-0,1
Tangible Fixed assets	1,10	0,30	0,80	266,3
Financial fixed asstes	0,01	0,20	-0,19	-93,7

Fixed capital: the change that tooks place in the

reference half year is attributable to: (i) amortization of goodwill for Euro 729 thousand; (ii) accounting for the property redeemed in May where the Rome office is located for Euro 759 thousand; (iii) disposal of the investment held in Open Gate Italia for Euro 186 thousand.

Working capital	1,65	3,22	-1,56	-48,6
Commercial credits	10,53	14,39	-3,87	-26,9
Commercial debts	-8,09	-10,72	2,63	24,6
Accrued and deferred income and charges	-0,22	-0,23	0,01	2,9
Other assets and liabilities	-0,57	-0,23	-0,34	146,8
Severance pay	-1,21	-1,16	-0,05	4
Net Invested Capital	15,32	17,05	-1,73	-10,2
Group Equity	13,63	13,73	-0,10	-0,7
Third-party Equity	1,02	0,77	0,25	32,8
Net Assets	14,65	14,50	0,15	1
Financial and bond debts
- short term	2,85	7,24	-4,39	-60,6
- long term	7,14	4,31	2,82	65,4
Cash and cash equivalents	-7,77	-7,21	-0,56	7,8
Security non instrumental to the operational activity	-1,25	-1,49	0,24	16,2
Financial receivables	-0,30	-0,30	0,00	0
Net financial position	0,67	2,55	-1,89	-73,9
COVERS	15,32	17,05	-1,73	-10,2
LEVERAGE	0,05	0,18

The working capital is reduced from Euro 3.2 million in 2019 to Euro 1.7 million due to the reduction in receivables more than proportional to that of payables.

Net financial position ammounts to Euro 0.7 million in

comparison with Euro 2,6 million at 31 December 2019.

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CLOSING H1 2020 - NET FINANCIAL POSITIONS

- 3.7

1.5	9.9
9.3
8.4

STRONG

IMPROVEMENT

IN COMPARISON TO

FY'19 AND H1'19

-0.6

- 2.5

FY 2019

H1 2019

In March 2020, DigiTouch repaid Euro 3 million for the maturity of the 2015- 2020 Convertible Bond. The bonds earned interests at a rate of 6%.

CASH EQUIVALENT, FINANCIAL CREDITS	FINANCIAL DEBTS FOR	SELF-LIQUIDATING	GROSS DEBTS AT
AND STOCKS AT 30 JUNE 2020	LOAN AT 30 JUNE 2020	AT 30 JUNE 2020	30 JUNE 2020	NFP AT 30 JUNE
				2020

Data are expressed in million Euro

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SECOND SEMESTER 2020 MAIN FOCUS AREA

STRATEGIC PRIORITIES

• Focus on the sector of public tenders and tenders
• Acceleration of ecommerce / Development of digital enabler e- commerce positioning
• Growing volume of competitions with on / off-line media planning
• Strategic partnerships development

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THANK YOU

Via Zarotto 2A - 20124 Milan - Italy

T [phone]

WGRUPPODIGITOUCH.IT

S