Esprinet S.p.A.

Good morning, this is the Coruscall conference operator. Welcome and thank you for joining the ESPRINET first quarter 2026 results conference call. As a reminder, all participants are in listen-only mode, and after the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Ms. Giulia Perfetti, IR Manager and Sustainability Manager. Please go ahead, Madam.

Thank you, Madam. Good morning, everyone, from me too, and thank you for joining us for the EspritNet Group Q1 2026 results presentation. I'm Giulia Perfetti, Investor Relations and Sustainability Manager of EspritNet, and I Here with me is Giovanni Testa, CEO of the group, who today will comment on the results. Before we start, please note that this presentation contains forward-looking statements, and so I would like to draw your attention to the regulation note on page two regarding the information contained within this document. Today's call is being recorded and the podcast will be posted on the ESPERET website in the investor section together with the presentation. I will now turn the call over to Giovanni to begin presenting and commenting with you on the Q1 2026 results. Giovanni, over to you.

Thank you, Giulia. Welcome to this investor call. We can start now. For sure, the first quarter of 2026 began with a very solid growth, even if the environment remained very complex. The most significant result we think that is the group performance was driven not only by market conditions, but also by a capacity to increase our market share in Italy, Spain, and Portugal as well. We will see some details in the next slides. This confirms the group ability to identify key structural strengths in demand and translate them into concrete results. Speaking about sales dynamics, gross sales reached 1.1 million euros, representing an 11% year-on-year increase. As in the last quarter, the Peninsula Iberica continues to perform very well with an excellent result despite a very challenging comparison with Q1 2026. Also, Italy is showing some signal of growth, but for sure in a market that is a weak market. the topic of the market in this moment remains the PC refresh. We have the long tail of the refresh of Windows 10 that is closing probably, that will be closed probably in the H1 2026. There is a moment of restocking by our customers in anticipation of some potential supply constraint in the second half of 2026. And the main drivers are related to AI demand and overall cybersecurity. Overall, because about cyber threats. There is also a good ongoing development of the green tech market. Speaking about the profitability indicators and the financial structure, the quarter shows a very clear improvement of the profitability of the group. Adjusted EBITDA stands at 15.7 million euro compared to In March of 2025, we have an increase of 44 percent. The margin as a percentage of sales rose to 1.47 percent and is compared to 1.13 in the same period of the previous year. We can say that the result is driven by two key factors, a gross margin that is standard 5.6% and the capability, and we will see also that in the next slide, to keep cost under strict control. The cash conversion cycle, closed at 26 days is stable with the figure that we had in full year 2025 and is down compared to Q1 25. The net financial position is negative of by 350 million euro and is essentially in line with the same period of last year. The difference between Last year is connected to the price paid by the position of Varmat that the group closed in October 25. We are speaking about a deal, an M&A deal related to Zeratec Space. ROSA is at 6.1 against 6.4 of Q1 of the last year. Passing to the sales evolution. What we can say starting this slide is that the group beat the market for in all region in which we are present, you know, by all the product categories for all the cluster that we show in the slide. And this is a very good. result because underperforming all the markets means that we are doing a good job not only in one country for a favorable market, for example Spain, but we are doing a good job in all the countries we are present. There is also a good performance of Morocco and even if we are not able to show the market, but we have increased 34% the sales value also in Morocco. We see a good performance of the screens and is connected to the good performance overall of Notebook for the price increase of the unit selling price in, for Notebook, also for smartphone. And they, for us, there is a good performance of the devices because we are in line reflect with the, for the compared to the 25 Q1 result, despite the market decrease of 5%. And we are happy to show a very good increase of the turnover for solutions and services at Greentech, overall Greentech 40%. That is a good demonstration of the strategy of the group that is focalized on the green transition, the green market. Speaking about retailers and the reseller class of customer, we decreased 1% of the retailers in the retail space, doing better of the market, and we increased over 16% of Italian resellers space within the market that increased about 9%. So I think that overall we can show you a consistent performance of the group. The market will be the market by country, by product category, by customer segment. As we said before, we see an increase of our market share also in Spain, not only in Torino, but also in the market share, and it's a good result because the comparison between 25 and Q1 and 26 to Q1 was not so easy to beat. In the next slide, we see the profit and loss Q1 of 26 by the three dimensions, our three spaces, Aspect, Vivaldi, and Zetatech. As we can see, we increased our turnover of 11 percent, but we did better for the bid margin figure because we increased 44%. It means that the cost related to each space are under control and we see in the last slide as slightly rose because we checked and we put under control the the possible rules and we are trying to introduce better processes also to keep the same profitability or increase the profitability maintaining the same staff needed despite increasing 11% of the turnover. Speaking about the percentage of EBITDA margins, You can see that for all of that, we increased a lot. We would like to underline the performance of the devices, because last year in Q125, we lost 0.4 million euro, and in this quarter, we gained 1.2 million euro. The good performance is connected, for sure, a good performance of the gross margin and gross profit, but also for a reduce of the cost, office cost related to the advertising program for our own brand that in last year was done in the first quarter. We see also good performance on solutions. We see a very good performance because we more than three times increased the bid of Green Tech. Just to anticipate maybe some questions about services. The performance of services and the decrease of sales and EBITDA is fully connected to a one-shot deal in Aspen at Iberica, did in Q1 25, and not repeated in Q1 26. You know perfectly that we launched in March 25 InnoVEXIA, that is the new division that will serve the SPA group across country, across company, to deliver and to service services for all the SPA group. We are very focused on services, but we know perfectly that services space is in a market in which we have to work not in a run rate of business, but in a project business. And so sometimes it could happen a deal can pass from a quarter to another. In the next slide, we will see the Q1 profit and loss summary. We have already commented the increase of sales and then of gross profit. About SG&A, we have a high decrease of the percentage of sales of the SG&A that is passed from 4.23% to 4.12%. We can see that the only cost that rose is the per site cost that increased by 5%. The increase of the cost is related to two events. The collective bargain agreement, both in Italy and Spain, that started in the Q2 and Q3 25, that is not represented so in Q1 25. And the inclusion of the perimeter of the personal cost of VAMAT that, remember, we acquired in October 25. All the other operating costs decreased with a reduction of more or less 6% compared to the peak of Q1-25, in which I would like to remind you that we insert also some consultant costs related to the M&A of VAMAT that the process started in the early Q25 and closed and finished in October 25. About EBIT, we have more than double the result of Q1 25. Speaking about the next financial expenses, we have two different situations. We decreased over 7% or over 6% the other financial expenses. But we have an increase of the foreign exchange losses that in Q1-25 was a gain of 0.7 million euro, and in Q1-26 it represents a loss of 1.1 million euro. say that net income is more than five times the net income of Q125. So we can say only that we are happy for the result. Speaking about the balance sheet, this slide is representing our balance sheet, and we want to to have your attention on two metrics, the net financial debt and the operating net working capital. The net working capital follows the usual interim partner because every Q1 shows a greater cash absorption that is different from the other quarter of the year. Speaking about the net financial debt, We have an increase of 14 million euro compared Q1 25 to Q1 26 and is fully connected to the price that we paid for the acquisition of VAMAT in October and in October 25. We are speaking about 15 million euro. that is stable despite an increase of 11% of the turnover. Passing to operating net, sorry, passing to operating, previous slide, please. Sorry. Passing to the operating net working capital, we have, we are in line with the value of Q125. increase of the inventory and is connected to some approaches that we have done to anticipate some issues about shortage of products. I remind you that we're speaking about overall notebook, smartphone, and the server. Trade payables and trade receivables are in line with the same momentum of of the Q125, and what we are trying to do is to remain focused on reducing inventory on one hand, and on the other hand is we are trying to obtain a longer DPO from the vendors. We are not working in this moment on DSO because we think that in this moment for the particular scenario for the financial situation overall in Italy but also in Spain it's not useful and we can say also very difficult but overall not useful to ask to our customer to reduce the time of payment because we think that a role of distributors is also to sustain the channel to sustain our customer sometimes in these moments in that the geopolitical scenario put some doubts on some aspects, for example, the capacity to deliver the product by the vendor from the next month. About this aspect, we want to transmit to you that we are checking continuously with the vendors the capacity to deliver respect the delivery time and the delivery, to deliver the products not only in the right time, but also in the right quantity. And at the moment, we don't see any issue of shortage until more or less August or September. After that, we have no clear visibility of what can happen. But there is, from our point of view, a positive situation, better than expected when we started to speak about the shortage of RAMs in Q4-25 and also in Q1-26. Passing to the next slide. This is a slide in which we show you the working capital metrics for quarter average. The result of Q1 is fully in line with the final, the full year 25, result of 26 days, and the increase of only one day by Q1 25. Speaking about the quarter end, we reduced three days the quarter end working capital matrix and cash cycle of from 37 to 34 percent. And the increase from the Q4 and Q1 is exactly the same of every year, as you can see in the graphic, because it is a normal run of our market during the year. is 6.1, exactly the same of the full year, the result, 25 result. All in all, what do we expect? The geopolitical scenario is a factor that we have to consider because not only the crime war, but also the the area issue in the Ormuz province can put some problems on the table, we can say. We will have some supply chains because there is a longer period of delivery of the product. We see a pricing cost pressure because our suppliers are shaping with a higher cost than in the past. But we, after having seen that, we think that we have to remain positive because the distribution is the way in which the IT market passes the most part of the business. We remember that every year we have seen an increase of the percentage of the business that is passing through the distributor. I remain the main growth engine, very, very close to the cybersecurity opportunities because cybersecurity spending is rising every quarter. due to also a lot of attacks that are doing to some companies. The AI infrastructure investment are very high. It's a supporting demand and is one of the reasons why we have a little shortage of servers because of the ramps that we need to prepare a server to have a one tier of our capacity, that is the capacity that we need to run an AI infrastructure is consuming a lot of . Customers, we have seen in Q1, are anticipating the potential shortage as we have done, accelerating purchases. This effect is supporting the short-term growth. I would like to repeat the distribution channel have a strategic role in this moment. More than in the past, all is connected to the geopolitical scenario and the shortage, possible shortage of the products. We want to announce the Group 2036 Guidance, in which we announce the bid adjusted guidance of between 71 to 77 million euro, with also a target of improving working capital. For sure, and we are assuming no further external shocks will be in the next month. And we hope also that the crisis in the Middle East can have a stabilization and helping us to reach a light positive result. So I have finished my presentation and I pass the and open the Q&A session to you.