TINEXTA: growth in results at 30 September 2021, with an acceleration of digital transition and innovation activities

PRESS RELEASE

TINEXTA: growth in results at 30 September 2021, with an acceleration of digital

transition and innovation activities

Tinexta's Board of Directors has approved the results at 30 September 2021:

• Revenues: €261.6 million, +38.5%
• Adjusted EBITDA: €63.3 million +11.2%
• EBITDA: €59,6 million, +7.3%
• Net profit: €28,1 million, +7.1%
• Free Cash Flow: €44.3 million (€58.4 million in the last twelve months at 30 September 2021)
• Operating Cash Flow: €70.1 million (€67.9 million at 30 September 2020)
• Net Financial Position: net debt of €191.6 million (€205.2 million at 30 June 2021)
• Guidance 2021 confirmed
• • * * *

10 November 2021. The Board of Directors of Tinexta S.p.A., a leading provider of Digital Trust, Cyber Security, Credit Information & Management, and Innovation & Marketing Services, listed in the Euronext Star Milan segment, organized and managed by Borsa Italiana, today approved the Interim Report on Operations as at 30 September 2021. In the first nine months of 2021, Revenues amounted to Euro 261.6 million (+38.5%), adjusted EBITDA to Euro 63.3 million (+11.2%), EBITDA to Euro 59.6 million (+7.3%) and Net Profit to Euro 28.1 million (+7.1%).

The Chairman, Enrico Salza, commented: "We are satisfied with the excellent results achieved in the first nine months of the year, characterized by a significant growth in all the Group's divisions and by the signing of new agreements that increasingly consolidate Tinexta as a reference operator to support the digital transformation processes of the business system in Italy and gradually in Europe".

The Chief Executive Officer, Pier Andrea Chevallard, commented: "We have approved an extremely positive quarterly report, which confirms, among other things, the soundness of the strategic acquisitions made last year, in particular in the Cybersecurity segment, which proved, as we expected, to be synergistic with the activities and services of the Group's other divisions. We continue to look to the medium and long-termdevelopment of our Group. In recent weeks we have announced new extraordinary operations with the aim1

of further strengthening Tinexta in the world of digital transition in Italy, also thanks to the ForValue network and to the partnership with Intesa. With InfoCert, we are aiming to become a leading Digital Trust operator in Europe. The results of the first nine months of the year allow us to confirm the growth objectives shared with the market and to face the coming months with new challenging objectives".

CONSOLIDATED GROUP FINANCIAL RESULTS AS AT 30 SEPTEMBER 2021

Summary income statement data	30/09/2021	30/09/20201	Change	Change
(€ '000)	%

Revenues	261,558	188,901	72,657	38.5%
Adjusted EBITDA	63,332	56,939	6,393	11.2%
EBITDA	59,616	55,572	4,043	7.3%
Adjusted operating profit	45,724	42,827	2,897	6.8%
Operating profit	38,392	36,980	1,411	3.8%
Adjusted net profit	29,585	28,431	1,154	4.1%
Net profit	28,124	26,251	1,873	7.1%
Free cash flow	44,261	52,556	-8,295	-15.8%

The Group closed the first nine months of 2021 with Revenues of Euro 261.6 million. Adjusted EBITDA amounted to Euro 63.3 million, or 24.2% of revenues. EBITDA amounted to Euro 59.6 million. Operating profit and net profit amounted to Euro 38.4 million and Euro 28.1 million, representing 14.7% and 10.8% of Revenues.

Revenues are up by 38.5% compared to the first nine months of 2020, adjusted EBITDA is up by 11.2%, EBITDA is up by 7.3%, Operating profit is up by 3.8% and Net profit is also up by 7.1%.

The results for the period include contributions from the acquisitions: Corvallis S.r.l., Yoroi S.r.l., Queryo Advance S.r.l. (consolidated from 1 January 2021), Swascan S.r.l. (consolidated from 1 October 2020), Euroquality S.A.S. and Europroject O.O.D. (consolidated from 31 December 2020), Trix S.r.l. (established at the end of December 2020), Tinexta Cyber S.p.A. (established in January 2021) and ForValue S.p.A. (consolidated from 1 July 2021). The contributions from these companies are shown below as a change in the scope of consolidation.

1The comparative data at 30 September 2020 have been restated in relation to the completion, in the fourth quarter of 2020, of the identification2 activities of the fair values of the assets and liabilities of PrivacyLab S.r.l., consolidated on a line-by-line basis from 1 January 2020.

Income Statement in the first nine months of 2021 compared with the same period of the previous year.

	Consolidated Income Statement	30/09/2021		%	30/09/2020		%		Change	% change
	(€ '000)
	Revenues*	261,558		100.0%	188,827		100.0%		72,731	38.5%
	Total Operating Costs*	198,226	75.8%	131,888	69.8%	66,338	50.3%
	Costs of raw materials	8,469	3.2%	6,602	3.5%	1,867	28.3%
	Service costs	81,697	31.2%	58,116	30.8%	23,581	40.6%
	Personnel costs	101,041	38.6%	60,473	32.0%	40,568	67.1%
Contract costs	5,506		2.1%	5,361		2.8%	145	2.7%
Other operating costs	1,512	0.6%	1,336	0.7%	176	13.2%
	Adjusted EBITDA	63,332		24.2%	56,939		30.2%		6,393	11.2%
	Stock Option cost**	1,954	0.7%	482	0.3%	1,472	305.2%
	Non-recurring components	1,763	0.7%	885	0.5%	878	99.3%
	EBITDA	59,616		22.8%	55,572		29.4%		4,043	7.3%
	Amortisation and depreciation	19,219	7.3%	16,101	8.5%	3,118	19.4%
	Provisions	1,050	0.4%	426	0.2%	624	146.2%
	Impairment	955	0.4%	2,064	1.1%	-1,110	-53.8%
	Operating Profit	38,392		14.7%	36,980		19.6%		1,411	3.8%
	Financial income	124	0.0%	1,340	0.7%	-1,216	-90.7%
	Financial charges	3,001	1.1%	2,101	1.1%	900	42.8%
	Net financial charges	2,877		1.1%	761		0.4%		2,116	278.0%
	Profit of equity-accounted investments	-240	-0.1%	88	0.0%	-329	-371.6%
	Profit before tax	35,275		13.5%	36,307		19.2%		-1,033	-2.8%
	Income taxes	7,151	2.7%	10,057	5.3%	-2,906	-28.9%
	Net profit	28,124		10.8%	26,251		13.9%		1,873	7.1%
	of which minority interests	643		0.2%	280		0.1%		363	129.6%

• Revenues and Operating Costs are stated net of non-recurring components and net of the cost relating to the Stock Option Plans and other long- term incentive plans reserved for the Group's key managers (both recognized under "Personnel costs").
  ** The Stock Option Cost includes the cost of other long-term incentive plans reserved for the Group's key managers.

Revenues increased from Euro 188.8 million in the first nine months of 2020 to Euro 261.6 million in the first nine months of 2021. The increase in revenue attributable to the change in the scope of consolidation was 30.9% (Euro 58.3 million), organic growth was 7.6% (Euro 14.4 million).

Operating costs increased from Euro 131.9 million in the first nine months of 2020 to Euro 198.2 million in the first nine months of 2021. The increase is attributable to the change in the scope of consolidation for 37.9% (Euro 50.0 million), the remaining 12.4% is attributable to organic growth (Euro 16.3 million).

Adjusted EBITDA increased from Euro 56.9 million in the first nine months of 2020 to Euro 63.3 million in the first nine months of 2021, with an increase of Euro 6.4 million or 11.2%. The increase in adjusted EBITDA attributable to the change in the scope of consolidation was 14.5% (Euro 8.3 million), the organic decrease was 3.3% (Euro 1.9 million).

EBITDA increased from Euro 55.6 million in the first nine months of 2020 to Euro 59.6 million in the first nine months of 2021, with an increase of Euro 4.0 million or 7.3%. The increase in EBITDA attributable to the change in the scope of consolidation was 13.2% (Euro 7.3 million), the organic contraction was 5.9% (Euro 3.3 million).

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Amortisation, depreciation and provisions include Euro 3.6 million of amortisation of other intangible assets arising from the allocation of the price paid in the Business Combinations (Euro 4.5 million in the first nine months of 2020), mainly of Warrant Hub, Visura and Innolva.

Net financial costs for the first nine months of 2021 amounted to Euro 2.9 million and compare themselves with Net financial costs in the same period of 2020 of Euro 0.8 million. The increase in Net financial charges is affected by the non-recurring income recognized in the first nine months of 2020 for the renegotiation of loans amounting to Euro 1.1 million. The further increase in financial charges is attributable to the increase in bank debt to support the acquisitions made and to higher costs for adjustment of contingent consideration on acquisitions for Euro 0.4 million.

Taxes, calculated on the basis of the rates set for the year by current legislation, amounted to Euro 7.2 million (compared to Euro 10.1 million in the first nine months of 2020). The tax rate was 20.3% (27.7% in the first nine months of 2020), due to a non-recurring tax income of Euro 3.6 million arising from the redemption of statutory/fiscal value differentials, as well as an income of Euro 0.8 million deriving from the rebate of the first advance payment on IRAP for 2020, recognized as a result of the extension of the cap to the benefit provided by Decree-Law 41/2021, the so-called "Support Decree". Also in the first nine months of 2020 the Group benefited from non-recurring tax income of Euro 1.1 million.

Net profit for the first nine months of 2021 is equal to Euro 28.1 million (of which Euro 0.6 million attributable to minority interests), compared to Euro 26.3 million in the first nine months of 2020.

Free Cash Flow in the first nine months of 2021 amounted to Euro 44.3 million. Free Cash Flow decreased by 15.8% compared to the first nine months of 2020 (Euro 52.6 million) mainly due to higher taxes paid (Euro 15.2 million at 30 September 2021 compared to Euro 6.5 million at 30 September 2020).

The Free Cash Flow generated in the last twelve months at 30 September 2021 is equal to Euro 58.4 million.

Adjusted Group Results

The adjusted income statement results are calculated gross of non-recurring components, of the cost relating to Stock Option Plans and other long-term incentive plans reserved for the Group's key managers, of the amortisation of other intangible assets arised at the time of allocation of the price paid in the business combinations and of the adjustment of liabilities for contingent consideration linked to acquisitions, net of the related tax effects. These indicators reflect the Group's economic performance, net of non-recurring factors not strictly related to the activities and management of the "core business".

	Adjusted Income Statement		30/09/2021		%		30/09/2020		%		Change		% change
	(€ '000)
	Adjusted revenues	261,558	100.0%	188,827	100.0%	72,731	38.5%
	Adjusted EBITDA		63,332		24.2%		56,939		30.2%		6,393		11.2%
	Adjusted operating profit	45,724	17.5%	42,827	22.7%	2,897	6.8%
	Adjusted net profit		29,585		11.3%		28,431		15.1%		1,154		4.1%

Adjusted results, compared to the first nine months of 2020, show an increase in revenues of 38.5%, in EBITDA of 11.2%, in Operating profit of 6.8% and in Net profit of 4.1%.

Non-recurring components

Over the course of the first nine months of 2021, Non-recurring operating costs of Euro 1.8 million were recognized for acquisitions of target companies.

Non-recurring taxes include non-recurring income totalling Euro 4.6 million, mainly related to the redeeming
of statutory/fiscal value differentials and to IRAP benefits provided by the so-called "Support Decree".	4

In the first nine months of 2020, non-recurring revenues of Euro 0.1 million, non-recurring operating costs of Euro 1.0 million, non-recurring financial income of Euro 1.1 million and non-recurring tax income of Euro 1.0 million were recognized.

Stock Option cost

The costs, amounting to Euro 1.9 million, refer to the 2020-2022 Stock Option Plan, to the 2021-2023 Stock Option Plan and to other long-term incentive plans reserved for the Group's Key managers.

Amortisation of Other intangible assets from Business Combinations

The amortisation of Other intangible assets arised at the time of allocation of the price paid in Business Combinations is equal to Euro 3.6 million (Euro 4.5 million in the same period of the previous year).

Adjustment of the contingent considerations connected to acquisitions

Adjustments of potential consideration related to acquisitions resulted in the recognition of net financial expenses of Euro 0.2 million (in the same period of the previous year financial income amounted to Euro 0.2 million).

RESULTS BY BUSINESS SEGMENT

Adjusted income statement results by business segment.

	Adjusted condensed Income Statement			30/09/2021			% EBITDA			30/09/2020			% EBITDA			Change						% change
	by business segment					30/09/2021					30/09/2020					Total		Organic		Scope of consolidation
	Revenues
	Digital Trust	93,224				83,050					10,174		12.3%		12.3%		0.0%
	Cybersecurity	51,473				0					51,473			n.a.	0.0%			n.a.
	Credit Information & Management	56,954				55,848					1,106		2.0%		-0.6%		2.5%
	Innovation & Marketing Services	61,262				50,758					10,503		20.7%		8.7%		12.0%
	Other Segments (Parent Company)	1,836				1,599					237		14.8%		14.8%		0.0%
	Intra-segment	-3,191				-2,429					-763		31.4%		3.3%		28.1%
	Total adjusted revenues			261,558						188,827						72,731			38.5%			7.6%			30.9%
	EBITDA
	Digital Trust	24,223	26.0%		21,992		26.5%		2,230		10.1%		10.1%		0.0%
	Cybersecurity	5,818	11.3%		0			n.a.	5,818			n.a.	0.0%			n.a.
	Credit Information & Management	16,338	28.7%		17,585		31.5%		-1,247		-7.1%		-8.1%		1.0%
	Innovation & Marketing Services	24,986	40.8%		23,592		46.5%		1,394		5.9%		-3.6%		9.6%
	Other Segments (Parent Company)	-8,033		n.a.	-6,230			n.a.	-1,802		-		-28.9%		0.0%
					28.9%
	Total adjusted EBITDA			63,332			24.2%			56,939			30.2%			6,393			11.2%			-3.3%			14.5%

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