Tinexta S p A : 03 Aug 2021 Tinexta - The BoD approved the 1H 2021 Results

PRESS RELEASE

TINEXTA: THE GROWTH CONTINUES IN THE FIRST HALF OF 2021

The Board of Directors of Tinexta approved the results as at 30 June 2021:

• Revenues: €177.8 million, +43.6%
• EBITDA: €40.3 million, +17.0%.
• Adjusted EBITDA: €42.3 million, +21.2%.
• Net profit: €20.6 million, +29.5%.
• Adjusted net profit: €20.4 million, +22.6%.
• Free Cash Flow: €29.7 million (€67.5 million in the last twelve months to 30 June 2021)
• Net Financial Position: €205.2 million
• Guidance for 2021 confirmed
• • * * *

3 August 2021. The Board of Directors of Tinexta S.p.A., leading company in Digital Trust, Cyber Security, Credit Information & Management and Innovation & Marketing services, listed on the STAR segment of the Italian Stock Exchange, today approved the Half-Yearly Financial Report as at 30 June 2021. In the first half of 2021, Revenues amounted to Euro 177.8 million (+43.6%), EBITDA to Euro 40.3 million (+17.0%),

Adjusted EBITDA to Euro 42.3 million (21.2%) and Net profit stood at Euro 20.6 million (+29.5%).

Chairman Enrico Salza commented: "The Group today presents the results of a positive half-year, with an uninterrupted growth trend that confirms the validity of the development strategies and the solidity of the project. The desire to grow, supporting businesses and accompanying the implementation and perfection of the digital pact, necessary for the Country and its economic recovery, remains Tinexta's main horizon".

Chief Executive Officer Pier Andrea Chevallard added: "The first half of 2021 confirms the distinctive characteristics of the Tinexta Group, which position it at the heart of the economy's new growth phase, focused on digital. The results just approved highlight the growth of all Business Units with significant cash generation, thus enabling us to confirm the guidance shared with the market.

The first half of the year has also confirmed the effectiveness of the Group's M&A strategy, which concluded acquisition transactions, in Italy and abroad, that strengthen its competitive position, allowing it to seize the opportunities of a recovering economy, with a new, significant, international projection".

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CONSOLIDATED GROUP FINANCIAL RESULTS AS AT 30 JUNE 2021

Summary economic data	1st Half	1st Half		Change		Change
(€'000s)	2021		20201
Revenues	177,813		123,817		53,996		43.6%
EBITDA	40,270		34,412	5,858	17.0%
Adjusted EBITDA	42,287		34,903		7,385		21.2%
Operating Profit	26,403		21,576	4,827	22.4%
Adjusted operating profit	31,071		25,053		6,018		24.0%
Net Profit	20,641		15,936	4,706	29.5%
Adjusted Net Profit	20,426		16,667		3,759		22.6%
Free cash flow	29,663		28,919	744	2.6%

The Group closed the first half of 2021 with Revenues of Euro 177.8 million. EBITDA amounted to Euro 40.3 million, equal to 22.6% of Revenues. Operating profit and Net profit amounted to Euro 26.4 million and Euro 20.6 million respectively, representing 14.8% and 11.6% of Revenues.

Revenues are up 43.6% compared to the first half of 2020, EBITDA is up 17.0%, EBIT up 22.4%, and Net Profit up 29.5%.

The results for the period include the contribution of 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 as of 1 October 2020), Euroquality S.A.S. and Europroject O.O.D. (consolidated as of 31 December 2020), Trix S.r.l. (incorporated at the end of December 2020) and Tinexta Cyber S.p.A. (incorporated in January 2021). The contributions from these companies are reported below as a change in the scope of consolidation.

Income statement for the first half of 2021, compared with the same period of the previous year.

	Consolidated Income Statement		1st half 2021	%		1st Half 2020	%			Change	Change %
	(€'000s)
	Revenues		177,813	100.0%		123,817	100.0%			53,996	43.6%
Total Operating Costs*	136,640	76.8%	89,366	72.2%	47,274	52.9%
	Costs of raw materials	5,970	3.4%	4,515	3.6%	1,456	32.2%
	Service costs	56,111	31.6%	39,905	32.2%	16,207	40.6%
	Personnel costs*	69,550	39.1%	40,201	32.5%	29,349	73.0%
	Contract costs	4,050	2.3%	3,831	3.1%	219	5.7%
	Other operating costs	958	0.5%	915	0.7%	44	4.8%
	EBITDA before Stock Options		41,173	23.2%		34,451	27.8%			6,722	19.5%
Stock Option cost	903	0.5%	39	0.0%	864	2240,1%
	EBITDA		40,270	22.6%		34,412	27.8%			5,858	17.0%
	Adjusted EBITDA		42,287	23.8%		34,903	28.2%			7,385	21.2%
	Amortisation and depreciation	12,754	7.2%	10,598	8.6%	2,155	20.3%
	Provisions	444	0.2%	360	0.3%	84	23.2%
	Impairment	670	0.4%	1,878	1.5%	-1,207	-64.3%
	Operating Profit		26,403	14.8%		21,576	17.4%			4,827	22.4%
	Financial income	83	0.0%	951	0.8%	-868	-91.3%
	Financial charges	1,877	1.1%	1,370	1.1%	506	37.0%
	Net Financial Charges		1,794	1.0%		419	0.3%			1,374	327.7%
	Profit of equity-accounted investments	-180	-0.1%	91	0.1%	-271	-297.5%

1The comparable figures for the first half of 2020 have been restated in relation to the conclusion in the fourth quarter of 2020 of the activities to identify the fair values of the assets and liabilities of PrivacyLab S.r.l., which is consolidated on a line-by-line basis from 1 January 2020.

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Profit before tax	24,429	13.7%	21,248	17.2%	3,181	15.0%
Income taxes	3,787	2.1%	5,312	4.3%	-1,525	-28.7%
Net Profit	20,641	11.6%	15,936	12.9%	4,706	29.5%
of which minority interests	281	0.2%	201	0.2%	80	39.9%

• Personnel costs are recognised net of the Stock Option cost, shown below, in order to better understand the composition of EBITDA before the Stock Options.

Revenues increased from Euro 123.8 million in the first half of 2020 to Euro 177.8 million in the first half of 2021. The increase in Revenues attributable to the change in the scope of consolidation was 31.0% (Euro 38.4 million), organic growth was 12.6% (Euro 15.6 million).

Operating costs increased from Euro 89.4 million in the first half of 2020 to Euro 136.6 million in the first half of 2021. The increase is attributable to the change in the scope of consolidation for 37.3% (Euro 33.4 million), the remaining 15.6% is attributable to organic growth (Euro 13.9 million).

EBITDA before stock options increased from Euro 34.5 million in the first half of 2020 to Euro 41.2 million in the first half of 2021, an increase of Euro 6.7 million or 19.5%.

At 30 June 2021, costs of Euro 0.9 million relating to the 2020-2022 Stock Option Plan and costs of Euro 0.01 million relating to the 2021-2023 Stock Option Plan were accrued.

Adjusted EBITDA increased by Euro 7.4 million, or 21.2%, attributable to the change in the scope of consolidation for 15.0% (Euro 5.2 million) and organic growth for 6.1% (Euro 2.1 million).

The item Amortisation, depreciation, impairment and provisions includes Euro 2.7 million of amortisation of Other intangible assets arising from the allocation of the price paid in the Business Combinations (Euro 3.0 million in the first half of 2020), mainly of Warrant Hub, Visura and Innolva.

Net financial costs in the first half of 2021 amounted to Euro 1.8 million and compared with Net Financial Expenses in the same period of 2020 of Euro 0.4 million. The increase in Net financial costs was affected by the non-recurring income recognised in the first half of 2020 for the renegotiation of loans amounting to Euro 0.7 million. The further increase in Financial expenses is attributable to the increase in bank debt in support of the acquisitions carried out.

Taxes, calculated on the basis of the rates set out for the year by current legislation, amounted to Euro 3.8 million (compared to Euro 5.3 million in the first half of 2020). The tax rate is 15.5% (25.0% in the first half of 2020), due to non-recurring tax income of Euro 3.4 million resulting from the redemption of statutory/taxable value differentials, as well as income of Euro 0.8 million from the rebate of the first advance payment of IRAP 2020, recognised as a result of the extension of the ceiling to the benefit provided by Law Decree 41/2021, the so-called 'Support Decree'. The first half of 2020 had also benefited from non-recurring tax income of Euro 1.1 million.

Net profit in the first half of 2021 amounted to Euro 20.6 million (of which Euro 0.3 million attributable to minority interests), compared with Euro 15.9 million in the first half of 2020.

Free Cash Flow in the first half of 2021 amounted to Euro 29.7 million (Euro 28.9 million in the same period of 2020). The Free Cash Flow generated in the last twelve months as of 30 June 2021 amounted to Euro 67.5 million.

Adjusted Group Results

The adjusted income statement results are calculated gross of non-recurring items, of the cost related to stock option plans, of the amortisation of Other intangible assets arising from the allocation of the price paid in the Business Combinations and of the adjustment of contingent consideration liabilities related to acquisitions, net of related tax effects. These indicators reflect the Group's economic performance, adjusted for non-recurring factors that are not strictly related to the activity and management of the "core business".

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Adjusted Income Statement	1st half	%		1st half	%			Change		Change %
(€'000s)	2021		2020
Adjusted revenues	177,813	100.0%		123,743	100.0%		54,070	43.7%
Adjusted EBITDA	42,287	23.8%		34,903	28.2%			7,385		21.2%
Adjusted operating profit	31,071	17.5%		25,053	20.2%		6,018	24.0%
Adjusted net profit	20,426	11.5%		16,667	13.5%			3,759		22.6%

Adjusted results show an increase in revenue compared to the first half of 2020 of 43.7%, EBITDA of 21.2%, operating profit of 24.0% and net profit of 22.6%.

Non-recurring components

During the first half of 2021, non-recurring operating costs of Euro 1.1 million were recognised in connection with acquisitions of target companies.

Non-recurring taxes include non-recurring income totalling Euro 4.3 million, mainly related to the redeeming of statutory/fiscal value differentials and to IRAP benefits provided by the so-called "Support Decree".

In the first half of 2020, non-recurring revenues of Euro 0.1 million, non-recurring operating expenses of Euro

0.5 million, non-recurring financial income of Euro 0.7 million and non-recurring tax income of Euro 1.0 million were recognised.

Stock Option costs

The costs, amounting to Euro 0.9 million, relate to the 2020-2022 Stock Option Plan and to a minor extent to the 2021-2023 Stock Option Plan.

Amortisation of Other intangible assets from Business Combinations

Amortisation of other intangible assets arising from the allocation of the price paid in the Business Combinations amounted to Euro 2.7 million (Euro 3.0 million in the same period 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 0.02 million (in the same period of the previous year financial income amounted to Euro 0.16 million).

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RESULTS BY BUSINESS SEGMENT

Adjusted economic results by business segment.

	Adjusted condensed Income						EBITDA						EBITDA									Change %
			1st half			%			1st half			% 1st				Change
	Statement by business segment			2021			1st half			2020			half 2020						Total		Organic		Scope of consolidation
							2021
Revenues
Digital Trust	63,618					55,359					8,259		14.9%	14.9%	0.0%
Cyber Security	34,623					0						34,623			n.a.	0.0%		n.a.
Credit Information & Management	38,706					35,273					3,433		9.7%	9.7%	0.0%
Innovation & Marketing Services	41,664					33,700					7,964		23.6%	11.7%	12.0%
Other Segments (Parent Company)	1,178					1,060					118		11.2%	11.2%	0.0%
Intra-segment	-1,975					-1,648					-327		19.8%	4.3%	15.5%
	Total adjusted revenues			177,813						123,743							54,070			43.7%		12.7%		31.0%
EBITDA
Digital Trust	15,604		24.5%		13,962	25.2%		1,642		11.8%	11.8%	0.0%
Cyber Security	3,487		10.1%		0			n.a.		3,487			n.a.	0.0%		n.a.
Credit Information & Management	11,424		29.5%		10,155	28.8%		1,269		12.5%	12.5%	0.0%
Innovation & Marketing Services	17,133		41.1%		14,952	44.4%		2,181		14.6%	2.8%	11.8%
Other Segments (Parent Company)	-5,360			n.a.	-4,167		n.a.		-1,194		-28.6%	-28.6%	0.0%
	Total adjusted EBITDA			42,287			23.8%			34,903			28.2%				7,385			21.2%		6.1%		15.0%
							EBITDA						EBITDA									Change %
	Adjusted condensed Income			2nd			%			2nd			%				Change
			quarter			2nd			Quarter			2nd
	Statement by business segment														Total		Organic		Scope of consolidation
			2021			quarter			2020			quarter
							2021						2020
Revenues
Digital Trust	32,438				29,248					3,190		10.9%	10.9%	0.0%
Cyber Security	17,837				0					17,837			n.a.	0.0%		n.a.
Credit Information & Management	19,837				18,221					1,616		8.9%	8.9%	0.0%
Innovation & Marketing Services	25,519				21,706					3,813		17.6%	5.2%	12.4%
Other Segments (Parent Company)	609				535					74		13.9%	13.9%	0.0%
Intra-segment	-1,093				-878					-215		24.5%	-2.8%	27.3%
	Total adjusted revenues			95,147						68,832						26,315		38.2%		8.8%		29.5%
EBITDA
Digital Trust	8,439	26.0%	8,043		27.5%		396		4.9%	4.9%	0.0%
Cyber Security	1,553	8.7%	0			n.a.	1,553			n.a.	0.0%		n.a.
Credit Information & Management	6,144	31.0%	6,572		36.1%		-427		-6.5%	-6.5%	0.0%
Innovation & Marketing Services	12,139	47.6%	11,556		53.2%		583		5.0%	-6.9%	12.0%
Other Segments (Parent Company)	-2,982		n.a.	-2,267			n.a.	-715		-31.5%	-31.5%	0.0%
	Total adjusted EBITDA			25,293			26.6%			23,904			34.7%			1,389		5.8%		-6.5%		12.3%

Digital Trust

Adjusted revenues of the Digital Trust segment amounted to Euro 63.6 million. The increase compared to the first half of 2020 is 14.9% (Euro 8.3 million). During the first half of 2021, the growth in demand for digital and dematerialisation services continued, supporting both growth in standard products such as Certified Electronic Mail (Legalmail) and Digital Signature (LegalCert), and an increase in Off the Shelf revenues (Telematic Trust Solutions). The growth of the product linked to SPID (Sistema Pubblico di Identità Digitale -

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