Eurotech S p A : Earnings Call - FY 2023

2023 full year results

INVESTORS LIVE STREAMING PRESENTATION

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FY 2023 financial highlights

Revenues flat YoY but Edge AIoT share growing to 41% +79% at constant exchange rates

InoNet growing YoY on Revenues, GPM and EBITDA Rev +14.9%, GPM +520bps, EBITDA margin from 4.8% to 11.3%

Gross Profit Margin @ 47.4% improving 240bps YoY w/o InoNet GPM @48.9%

EBITDA margin still mid single digit

affected by OPEX grow to support mid-term strategy

Inventory down 3.7M€ at constant exchange rates

but Net Working Capital affected by payables reduction (8M€)

Net Financial Position chasing NWC net debt @ 20.6M€

#3

business

update

#4

normalised revenue tells an organic growth story

-12%+22%

+41%

+15%

2021

2022

2023

REPORTED	EUROTECH CORE	EUROTECH CORE
	W/O INONET CORE	RESTARTED

Restatements:

PPVs

Overstocking / Destocking

Delayed deliveries

InoNet core = revenues as a stand- alone company

InoNet organic growth driven by ETH counted as ETH core

#5

InoNet promises coming true

ebitda growing 4x in 1 year

#FY23 revenues +15% YoY

organic growth

#new wins on ADAS

giving a better mix, to the benefit of GPM

#GPM up ca. 520 bps YoY

thanks to a better mix, plus actions on prices vs customers & suppliers coming to fruition

#EBITDA margin @ 11%

with good prospects to keep it going forward

#6

company strategic pivoting is happening

Edge AIoT surpassing Legacy Embedded in 2024

embedded boards & systems	edge AIoT hw & sw
68.1
55.1	CAGR
49.7	70%

38.6

26.2

13.4

2021

2022

2023

2024

2021

2022

2023

2024

#7

recap of FY23 journey business wise

hardware

software

channels

IEC certified Edge AI HW family

AWS Greengrass + ESF = Everyware GreenEdge Zero-Touch Provisioning (ZTP)

AWS

OT system integrators

#8

focus points FY24

business imperatives

accelerate edge AI (shorter time-to-market) in security, asset monitoring, end-of-line inspection, and automatic optical inspection applications

round 2 of channel play: moving on to the next big

partner, replicating AWS success

keep momentum in ADAS: hot topic in Europe thanks EU regulations imposing assisted driving systems (L2/L3) on board of both cars and trucks

cost control: until visibility grows and uncertainty goes away, tight monitoring of costs is king

bumpy road ahead

Overstocking during component shortage followed by Destocking has accelerated the phase-out of legacy embedded business in US

Japan affected by destocking but not phasing out from legacy embedded business

We have taken the opportunity to cut OPEX linked to the legacy embedded business

We start FY24 with a lower visibility vs FY23 because customers are back to last-minute order releasing

Some IoT projects won are ramping up with a slower pace, especially in H1

Visibility changing on a weekly basis, we saw an acceleration in last 4 weeks

Too early to say how the year will progress, H2 is more

optimistic

#10