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.

Thank you. This is the Coruscall conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. First question is from Nicolo Storer-Kepler.

Good morning, can you hear me?

Yes.

Okay, perfect. Thanks for the presentation and thanks for taking my questions. The first one is about your guidance, in particular on ABDA first. I was wondering under which scenario you would end, let's say, towards the lower bound of your range, 71 million, if I'm not wrong. And secondly, on working capital, you said you plan to improve it. You talk about DPOs and inventories. Do you have a specific target set on working capital? Second question is about weakness that we have seen in Q1 in retail. Do you have any explanation because of this weakness retail versus strength in the other channel? And third question and last question is about Celia Tech. Very strong performance. I was curious understanding which product category drove the 40% increase in Green Tech. Thank you.

Thank you to you. So speaking about the guidance, the calculation, we can say that we have done is that we have seen an increase of the EBITDA adjusted in Q1 compared to the Q1 25. And we think that we have the possibility in a pessimistic scenario to repeat the results of Q2, Q3, and Q4 of last year, and we have added simply the increase of the data margin done in Q1 compared to Q1-25. We want also to say that We have an answer, a guidance, but for sure we are working very strong to have at the end of the year a result that could show to the market a target, a result very, very close to our higher up target of 77 million euros. About working capital, we prefer not to say a specific target. For sure we are working about reducing inventory. Reducing inventory is in this moment meaning not only reducing the value but also the quantity, because maintaining the same quantity for some product categories, server, notebook, smartphone, we have seen an increase of 20, 30, 40 percent. So to maintain the same quantities available for our customers in the warehouses, the inventory, it means an increase of the value of the product. of the turnover of the inventory, of the total turnover, of the total inventory. The second question was related to Zeratec, and it's easy to answer, is all connected to photovoltaic products, overall battery and inverters. We have done a very strong work And we, from Italy, we are starting, continuing to increase the sales abroad, and we are starting to work also in other countries that in Q1 was not present, for example, Holland, Belgium, and Ireland. So a part of the result is also connected to have included in the perimeter of the sales the result of the acquisition of Walmart. About the second question that was related to retailers, customers, and maybe also the consumer market, the decrease that we have shown is fully connected to the Italian market, because in the Spanish one, that type of customers are growing. And on the contrary, in Italy, there are some issues for some retailers, and probably also the demand of end users is decreasing due to some problems. some situation also geopolitical that is not so clear.

Thank you, thank you. Maybe as a follow-up of this last answer, have you seen throughout the quarter an improvement in the retail picture, meaning week January, maybe some recovery in February or March, or the performance has remained, let's say, week and constant throughout the three months.

Moral rates remain the same. We have seen just a little improvement in March compared to January, February. It's very, very low. We cannot say a big difference between January, February, and March.

Perfect. Thank you very much.

Thank you to you.

As a reminder, if you wish to register for a question, please press star N1 on your telephone. Next question is from Gabriele Berti in Tesa San Paolo.

Hi, good morning, everyone. Thank you for the presentation. First question, do you expect the PC refresh demand related to Windows 11 and the pull forward effect linked to memory shortages to to remain supportive also in the second quarter or in the second half. Then, looking at the supply chain, you already said something regarding product availability. I was wondering if you can also provide an update on how the prices are evolving. And last question, I remember that in a previous meeting you mentioned a standstill situation in the public administration market, mainly related to negotiations, price negotiations. Could you provide an update on how the situation is evolving? Thank you.

Okay, let me start from the last question that is the public administration situation. I have spent some days in Rome last week. I have a lot of meetings with some public administration starting from Consip. For sure there are a lot of projects that are on hold at this moment because after a lot of years in which We have worked in a deflation market, and now we are working in an inflation market. And all the actors of our market are not available in this moment, available in the market to change their position. And so in this moment, the issue is to change the set of the contractual agreements between all the channel vendors, distributors, and system integrator with the public administration. And I think that after having spoken with them in a short, very short period, the situation will be solved because it's not possible for the public administration to freeze to the older project. And so all the projects that in this moment are on hold, we think that we will start in a few months. Maybe for some product categories in a few weeks. Because for example, for the cybersecurity tender, they have the need to start immediately in order to protect the system of the public administration. About the shortage of the product and the price increase, as I have already said, we have a vision of the next month, more or less after the summer, we think that, I'm sorry, the moment in which we will arrive in the summer, the situation will be the same of today. We are seeing an increase of the unit selling price overall notebook, but in the same time, in this moment, we see the availability of the products that will continue until August or September. In the last quarter, obviously, We have asked a lot to the other times to the vendors, but they are not available to share with us their plans and their forecasts. There are some vendors that are more prepared to this shortage of product. Others have some difficulties, but all in all, we see and we think that the market will be sustained by the increase of the PC notebook layer, and we will continue to see a growth of the market for that product category. About the refresh of Windows 10 to Windows 11, probably with the end of Q2, we'll finish.

Thank you very much.

Next question is from Pietro Nargi, Intermontesim.

Hello, good morning, and thanks for taking my questions. The first one is on the The recent acquisition, so on VAMAT, could you please provide us an indication about the contribution of VAMAT on the top line and also on the EBDA, if possible? The second question is on the OPEX level, we have seen a good result year on year, also thanks to, let's say, and EC comps in Q125, there was some consultancy costs related to the acquisition. I would like to understand if this level is something sustainable also over the next quarter. And finally, the last question. is on the, let's say, current update on the first weeks of Q2. So just to understand what are the trends you are facing and if might we expect, again, a solid trend in terms of growth. Thank you.

Thank you to you. Okay. About VAMAT, VAMAT is a, as we have presented when we announced the deal, is a small company with a turnover about 50, around 50 million euro. So the contribution in Q1 of VAMAT to the turnover is in the order of some million euros. About the bid, we have seen that the VAMAT contribution is in line to the contribution of Zelotec for the other countries. So we are in line with the expectation that we had when we bought VAMAT and probably we hope to see a better result of VAMAT in the specific, in the next month, in a specific region of Ireland because in Holland and Belgium we are seeing the increase of the market that is present in more or less in all the countries in Europe, in Western Europe. But Ireland is a country that is starting now to introducing photovoltaic products, and so is the region in which we have more to obtain a good result. About cost, fixed or variable cost, I think there is no difference in our vision. We have already said that we maintain a stronger control, a very high control over the fixed cost. Maybe in the next quarters we will invest in some project also in AI space. that will insert some cost. But we think that the percentage of incidence on the turnover will remain more or less the same. We have no idea in this moment of an increase of the incidence of the fixed variable cost. And about Q2, what we can say is that the strong increase the turnover in Q1 is also represented in the first month of Q2.

I hope to have answered your question. Okay. Thank you. Very helpful.

For any further questions, please press star N1 on your telephone. Perfect.

There are no more questions registered at this time.

Okay. Thanks, Madam. So we can end. I think we can end the call. Thank you for participating. And, of course, we remain at your disposal. So thanks again and see you next time.

Thank you.