TXT: Results H1 2022

PRESS RELEASE

TXT e-solutions: results for the 1st half of 2022

Mix of organic growth and M&A brings half-year revenues to

• • 63 million (+43% YoY), EBITDA Margin at 14.7%
• Revenues € 62.5 million (+43.1%), of which international revenues € 18.2 million;
• Organic revenue growth +20.0% (€ 8.6 million);
• EBITDA € 9.2 million (+62.3%), EBITDA margin 14.7% (+1.7 pp) thanks to synergies and after investments in R&D (€ 4.0 million) and commercial (€ 5.7 million);
• EBIT € 6.7 million (+92.2%);
• Net Profit € 3.5 million (+70.1%);
• Adjusted Net Financial Debt of € 2.3 million.

Milan, 3 August 2022 - 16.15

Today the Board of Directors of TXT e-solutions, chaired by Enrico Magni, approved the operational results as of June 30, 2022.

"The outstanding results of the first half of the year and the consolidation of the new acquisitions finalised in July see us heading into the second half of 2022 with ambitious goals," commented Chairman Enrico Magni. "We want to continue in the process of accelerated growth driven by strategic investments and in diversifying our technological offering in order to position ourselves more and more at the center of the digital transformation process of public and private customers, both in Italy and abroad".

TXT e-solutionsS.p.A., Via Milano 150, 20093 Cologno Monzese (Italy), Tel. [phone] Fax. [phone], PEC [e-mail]

C.F./P.IVA/Registro delle Imprese di Milano, Monza Brianza e Lodi n. 09768170152, Capitale Sociale € 6.503.125,00 i.v.

www.txtgroup.com

PRESS RELEASE

In the first half of 2021, the Group's results were as follows:

• Revenueswere € 62.5 million, up 43.1% compared to € 43.7 million in the first half of 2021. On a like-for-like basis, excluding TeraTron GmbH acquired in July 2021, LBA Consulting and Novigo Consulting acquired in November 2021, and Quence acquired in December 2021, revenues grew by 20%. Software revenues in the first half of 2022 were € 4.7 million, up compared to € 4.2 million in the first half of 2021. Service revenues were € 57.9 million, up 46.5% compared the first six months of 2021.

Revenues from Aerospace & Aviation (A&A) Division were € 32.3 million, up +38.4% compared the first six months of 2021, of which € 5.5 million for the consolidation of TeraTron and € 3.4 million (+14.5%) from organic growth. Revenues from Fintech Division were € 30.3 million, up +48.5% compared to the first six months of 2021, of which € 4.7 million for the consolidation of LBA, Novigo and Quence, and € 5.2 million (+25.5%) from organic growth driven by the acquisition of new contracts in the public sector.

• EBITDAwas € 9.2 million, up +62.3% compared the first six months of 2021 (€ 5.7 million), after increasing commercial (€ 6.2 million) and R&D (€ 4.0 million) investments. EBITDA margin was 14.7%, up compared to 13% in the first six months of 2021. Incidence of General & Administrative costs on revenues decreased from 8.9% in the first half of 2022 to 7.6% in the first half of 2022.
• EBIT(Operating profit) was € 6.6 million, up +92.2% compared to the first half of 2021 (€ 3.4 million). Depreciation & Amortization were € 2.5 million, up € 0.5 million compared to the first half of 2021 and the increase consisted mainly of the consolidation of new companies acquired in 2021. In the first half of 2022 were included € 0.1 million of non-recurring reorganization costs, amounting to € 0.3 million in the first half of 2021.
• Net Financial (Charges)/Incomein the first half of 2022 has negative net balance of € 1.4 million compared to the positive net balance of € 0.2 million in the same period of the previous year, mainly due to the negative market performance recorded in the first half of 2022 to the different structure of the Group's net financial debt as of June 30, 2022.

TXT e-solutionsS.p.A., Via Milano 150, 20093 Cologno Monzese (Italy), Tel. [phone] Fax. [phone], PEC [e-mail]

C.F./P.IVA/Registro delle Imprese di Milano, Monza Brianza e Lodi n. 09768170152, Capitale Sociale € 6.503.125,00 i.v.

www.txtgroup.com

PRESS RELEASE

• Net Profitwas € 3.5 million compared to € 2.1 million in the first half of 2021, with an incidence on revenues of 5.6% compared to 4.7% in the first of 2021. In the first half of 2022, tax rate was 32,2%.
• The consolidated Adjusted Net Financial Debtas of 30 June 2022, as shown in the table below in the press release, was € 2.3 million compared to € 6.4 million as of 31 December 2021, with a new decrease of € 4.1 million. The decrease is attributable to cash generation from operating activities partially offset by the purchase of treasury shares for € 3.3 million.
• The consolidated Net Financial Debt as of 30 June 2022 was € 4.2 million, € 1.9 million higher compared to the consolidated Adjusted Net Financial Debt as a result of the recognition of non-monetary liabilities related to the remaining share price to be transferred to the sellers in the context of the M&A deals concluded in December 2021.
• As of 30 June 2022, 1,264,995 treasury shares were held (1,243,372 as of 31 December 2021), accounting for 9.73% of shares outstanding, purchased at an average price of € 3.42 per share.

In the second quarter of 2022 revenues were € 32.0 million, up 44.1% compared to second quarter of 2021 (€ 22.2 million), and revenues from M&A contributed for € 5.1 million. EBITDA was € 4.7 million, up +58.8% compared to second quarter of 2021 (€ 3.0 million). The EBITDA margin was 14.7% compared to 13.3% in Q2 2021. The growth in EBITDA was due for € 1.0 million to the contribution of M&A. Operating Income (EBIT) was € 3.4 million, up 98.4% compared to Q2 2021 (€ 1.7 million). Net Income was € 1.4 million compared to € 0.8 million in Q2 2021.

"The excellent first half of the year confirms the consistency of our accelerated growth plan." Comments Daniele Misani, CEO of TXT Group. "The high specialization and increased offer of the TXT Group companies place us in an ever more remarkable position in the digital innovation market. Organic growth is driven by the synergies between the excellencies of our ecosystem. Profitability benefits from the contributions of software platform revenues and economies of scale on general services. The year-end forecast on a comparable basis confirms the current positive trends. Further benefits will come from consolidation and synergies with Ennova, DM and new acquisitions that we will complete."

TXT e-solutionsS.p.A., Via Milano 150, 20093 Cologno Monzese (Italy), Tel. [phone] Fax. [phone], PEC [e-mail]

C.F./P.IVA/Registro delle Imprese di Milano, Monza Brianza e Lodi n. 09768170152, Capitale Sociale € 6.503.125,00 i.v.

www.txtgroup.com

PRESS RELEASE

On August 4, 2022 at 11:00 (CEST) a conference call will be held during which CEO Daniele Misani will present and comment on the results for the first half of 2022. The registration form for the conference call is available on the Company's website www.txtgroup.comunder the page "Financial news & calendar".

Subsequent events and business outlook

During the second half of 2022 TXT is successfully proceeding with the accelerated growth process recorded in the first half of the year thanks to a mix of organic growth and the contribution of the new acquisitions already closed and communicated in July 2022.

In the Aerospace Aviation & Automotive Division, which includes the digital offering for industrial sector, after a first half of the year that recorded organic growth of 15% and an M&A contribution of € 5.5 million, for the second half of the year the management of TXT expects a similar positive trend; in the civil aviation segment, on July 6, 2022, TXT Group through its subsidiary PACE America Inc. signed, with a leading North American cargo operator, a recurring subscription-based contract with an initial term of three years for the supply of the proprietary platform for real time flight routes optimization, with revenues expected at $0.5 million for 2022 and a ramp-up of software installations that will lead to expected recurring revenues forecasted of approximately $2.5 million at full capacity. In the Defense segment, the positive trend recorded over the past three years is confirmed by the constant acquisition of major new contracts with customers, both domestically and in the rest of Europe. In the Industrial segment, double-digit revenue growth is expected favored by the consolidation of the newly acquired DM Management & Consulting Srl (annual revenue € 1.5 million) and the growth of the smart devices business and value-added engineering and digital services business offered by the German subsidiary TeraTron GmbH and TXT, respectively. During the third quarter, the TXT Group has been awarded with prestigious funded research projects that will contribute to the development of competencies and proprietary platforms.

TXT e-solutionsS.p.A., Via Milano 150, 20093 Cologno Monzese (Italy), Tel. [phone] Fax. [phone], PEC [e-mail]

C.F./P.IVA/Registro delle Imprese di Milano, Monza Brianza e Lodi n. 09768170152, Capitale Sociale € 6.503.125,00 i.v.

www.txtgroup.com

PRESS RELEASE

For the Fintech Division, which includes the digital offering for the public sector, after a first half year period of consolidation and integration of the companies acquired in the fourth quarter of 2021, the management of TXT expects a second half of sustained revenue growth with positive effects on the division's margins thanks to technological and commercial synergies and thanks to the increased efficiency of the organizational structure. Contributing to the division's growth are the awarding of multi-year CONSIP (i.e., purchasing center of the Italian public administration) public tenders secured by the subsidiary HSPI for a significant value, the signing of new recurring subscription-based contracts for the supply of proprietary AML platform FARADAY worth € 0.3 million recurrent per year, and the consolidation of the domestic leadership position in the Quality Assurance field for the financial market.

On July 19, 2022, TXT signed the agreement for the acquisition of 100% of the share capital of the company DM Management & Consulting Srl ("DM"), an Italian small enterprise specialising in the consultancy and sale of proprietary MES/MOM software for factory management, which will complement the TXT Group's IoT offering; TXT will consolidate its results from 20 July 2022. DM was founded in Parma (Italy) in 2011 by the company's current directors and in 2013 it launched the first version of its proprietary MES/MOM DMP platform on the market, then sustained a constant process of investment in R&D that led to new software releases and continuous business growth fostered by the acquisition of many important customers, both domestic and international. In 2021, DM reported ARR of about € 0.5 million (on Adj Sales Revenues of € 1.2 million) and EBITDA margin of 25% with an expected annual revenue growth rate (CAGR) of 30% in the three-year period 2022-2024, also due to group synergies. The amount for the purchase of 100% of DM ("Enterprise Value") was agreed between the parties at € 1.7 million paid at the closing, of which

• 1.4 million (82%) was paid in cash and € 0.3 million (18%) was paid in TXT's treasury shares transferred at a price corresponding to the average price of TXT's shares for the 30 business days prior to the date of the closing.

On July 19, 2022, TXT finalised the acquisition of 78.56% of Ennova S.p.A., an Italian specialist in the digitisation of processes and products of large customers and SMEs; TXT will consolidate Ennova's results upon completion of its new governance structure, expected by the end of the third quarter of 2022. Ennova was founded in 2010 in the Innovative Companies Incubator of the Polytechnic of

TXT e-solutionsS.p.A., Via Milano 150, 20093 Cologno Monzese (Italy), Tel. [phone] Fax. [phone], PEC [e-mail]

C.F./P.IVA/Registro delle Imprese di Milano, Monza Brianza e Lodi n. 09768170152, Capitale Sociale € 6.503.125,00 i.v.

www.txtgroup.com