Tinexta S.p.A.

Good afternoon. This is a chorus call conference operator. Welcome and thank you for joining the Tenexa Group Consolidated Results as of the 31st of March, 2026 presentation. As a reminder, all participants are in listen-only mode. 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 Mr. Joseph Mastro Gostino, Chief Investor Relations Officer. Please go ahead, sir.

Thank you, operator. Good afternoon and good morning to the folks connecting from abroad. Thank you for joining Kinexus, the first quarter 2026 results presentation. Here with me today, Odone Polsi, Group Chief Financial Officer. Good afternoon and good morning. As a reminder, all the relevant documentation of the first quarter results can be downloaded from the company website in the Investor Relations section. For the purpose of this call, I will cover some key highlights and updates of the call, although instead we'll go over the first quarter financial results as well as the business units performance, providing us with a deep dive. The last part of the call will be dedicated to Q&A. A recording of this conference call will also be available on the company website, and it will be posted upon completion of this call. Without further ado, let me turn to page five of the presentation, which is available on the website. Let's go directly to the KPIs. Revenues came in in line with prior year at around $106 million. To be adjusted was $15 million. declining 14% versus the prior year. EBITDA on a reported basis was $14 million, and net profit adjusted was $1 million for the quarter. Net financial position came in at $351 million versus the $240 million of the fiscal year 2025, while very strong performance from pre-cash flow on an adjusted basis, going 12% to $35 million for the quarter. Let's turn to page six. Again, let me just deep dive on the non-counted numbers. So we said the net profit on an adjusted basis from continuing operations came in at around $1 million, while net profit on a reported basis was negative $5 million. The change in net financial position, which is important, mainly reflects the estimated value of the exercise of the call option on Bregala Milestone Stake. which is at around $137 million. The free cash flow on an adjusted basis from continuing operation was $35 million compared to $31 million in the prior year, reflecting strong cash generation from net working capital and provisions. NFP over the last 12 months to be adjusted was 3.49 times. In the medium part of the slide, We give you some key highlights of the single divisions, namely digital trust grew 0.4% versus the prior year in terms of top line. EBITDA grew 1.3%, and the EBITDA margin was still very strong at around 29.4%. Cyber had a challenging quarter with revenues declining 16% versus the prior year, and EBITDA plummeted 61% versus the prior year with margins at around 5.4% for the quarter. Business innovation grew on the top line at 7.6%, while EBITDA declined a bit more than 40% with margins in the single-digit range at around 6%. On the bottom section of the slide, you can see some of the recent events and updates. In particular, let us give the markets some updates. This is all public information available on the website. Between February the 23rd and March the 20th, the first window of acceptance period for the mandatory takeover on Tenexa shares promoted by Private Equity Funds, ADVENT and Nextalia was obviously carried out between March the 30th and April the 7th of 2026, the reopening of the terms of EMTO. on 10X shares was again promoted by the offer, even though the results were just shy of the 90% threshold, which were necessary to trigger the mandatory takeover and therefore the listing procedure. In terms of the recent acquisitions, you can see in terms of purchases, actually, between April the 8th and April the 30th, The offer, diligently with all the requirements from Borsa Italiana, purchases various shares on the market, in particular in accordance to MAR, in order to reach the threshold of around 90%, again, which will trigger the listing process. You can find all the official documentation on the website. Turning to page 7, I think most of the comments, the numbers have been commented here. Maybe it's worth noticing, again, that the free cash flow is very strong at around 35%, but Adorno will definitely give you more color on that. In fact, for that matter, I will leave the page, the floor to him.

Thank you, Joseph. Good afternoon again, everybody. You know, as anticipated here by Joseph, you have seen that, The quarter was, you know, almost basically aligned with the prior year results, while the group suffered a little bit on the margin side. Entering to different business units at page 9, you're seeing that Digital Trust went up both in revenues and ABTDA, while definitely was less expected to have revenue falling down in cybersecurity by 60%, you know, driving obviously an impact on the profitability. On business innovation, we had some good news in terms of revenue, especially on the completion of the 5.0 longer walk through three different years. But on the other side, we suffered a bit. We suffered in France on ADF. If we move to page 10 to the P&L, You know, you have seen that the revenue is basically flat, and also that the personal cost has been kept basically flat compared to previous year, you know, in some way anticipated, you know, the situation. The revenue mix, and especially also the financial, 0.0 acceleration brought a higher utilization of third-party services that moved up from 38% incidence to close to 40% incidence that is driving basically the erosion of a couple of points of the ABTDA. We have to consider, as usual, that the Q1 represents a portion well below one-fourth of the total ABTDA, we're talking basically below 15%, so this is something that can be managed through the year where the group has already put in place some actions in order to confirm and achieve the year-end projections. In terms of depreciation, basically flat compared to previous year. Financial income and charges, the only difference is related to last year. We got a profit on the cancellation of the put on Asherzia that drew growth to $7 million. profit that did not occur this year. For the rest, as anticipated by Joseph, the net profit was basically negative by $5 million compared to $4 million of the previous year. Also, this year, we had some non-recurring especially costs. Definitely, this has been driven mostly, you know, by all the activities we incurred, both on some and many activities, but also on all the, you know, the listing activities that the company has carried out during the process. If we go to the balance sheet at page 12, The net invested capital went down quite significantly, definitely as expected. You know, we had an organic decrease in terms of working capital of almost 30 million euro. You know, the higher level of billing that occurs in Q4 has been cashed during the Q1, as usual, and we were able, as we will see during the presentation, to deliver very strong, again, cash generation. The invested capital went down, while the net financial position went up as the group decided to exercise a call on the 60% percentage of the stake in InfoShare by 2020. the private equity Regal and this brought basically to MOOC this, you know, that like item basically in the net financial position that is at 331. I would say that almost 50% of this debt is related to future put and calls to be executed. It's not all financial debt bearing interest and cost. As a reverse of this, we have seen the shareholder equity going down to 200 million euro. I think on the STM basis, obviously, the net investment capital went down to almost 200 million euro. Obviously, half of this has been driven by the impairment that has been implemented at Q4. And the shareholder equity is both as part of the previous mentioned put, as well as, obviously, the loss of the previous year. On the, if we move to page 14, on the net, on the, basically, the free cash flow from continued operation, obviously, there's been extremely positive, you know, basically, the free cash flow from continued operation went up significantly. from 31 to almost 35 million euro in the first quarter, significantly a double digit. And if we look at on the LPM basis, basically we are talking about more than 74 million euro. That again is a confirmation of the stricter financial policy and financial discipline, I would say that we are able to put in place, especially on net working capital, improving year-on-year the capability of collect our receivable and the revenue we produce and the very strict control in the CAPEX to confirm, you know, the financial discipline we have in place. Also, if we, again, if we move to page 15, again, you have seen that we do not have a major issue around the Q1, excluding basically the booking and estimate of potential cash out coming from the exercise of the putter. on the stake of Bregal as well as small addition to our portfolio of activity that we believe during Q1 we acquired a couple of small companies who complete our offer in basically in digital trust and business solution as well as we disposed a in the Sistema business that is part of DigitalTrash, cashing in, booking 1.6 million cash. On the LTM basis, we're seeing here, you know, the picture is more wide. I would say, you know, we have an important part of cash generation of the last 12 months. and obviously last year we distributed dividends for almost 17 million euro and and obviously the the the net the net between acquisition and disposal has been 110 million debt because late last year, basically, we deconsolidated, put as a financial credit the consolidation of defense. I think it's very important to go and to deep dive into the business unit. I would say if we deep dive in... In digital trust, we have to say that, you know, the division overall went well if we exclude the performance of Ascensia. Asherzia had not positive Q1, especially in terms of revenue and obviously also in terms of ADTDA. So basically, we had a quarter with no one-time sale of licenses that are generally fueling the growth on top of the traditional 1 million euro recurring revenue that we have each month. Apart of Asherzia, we may say that the online sales grew almost 20%, and this is a very important and encouraging achievement we delivered, as well as we were able to confirm the positive trend in other parts of the business, still confirming the importance of the growth and the results of this area. Oh. CAPEX has been aligned with confirming our capability to manage them. And, you know, again, the ABTDA is growing just 1.3%, but if we exclude Ascensia, you know, I would say the revenue and profitability would have been much more positive. On cybersecurity, I have to say this here is, you know, the level of drop of the revenue was definitely quite significant because we are talking about more than 15%. Security solution services especially were down 24%, especially in lower sales areas. in advisor as well as in managed security services. So we were definitely in this area weak, especially on sales. On technology solution, obviously we are suffering about, you know, all the portion of the business mostly related to, you know, project and system integration suffering. This is a situation of the segment, especially we are suffering on activities in a primary client in the banking sector that is also putting under pressure our profitability. We will continue in this area to recover profitability through cost-cutting, rebalancing of the cost with the revenue. At the same time, we are pumping up our, you know, portfolio, trying to accelerate the recovery Business innovation, I would say business innovation, the situation to some extent could be also analyzed as the digital trust. So basically here we suffer quite significantly because we deliver 2 million Euro less EBITDA in RDF than previous year, and this has been the major impact that we have. The situation in the market of subsidized financing in France is really tough. and difficult. Basically, the level of the success rate went down quite significantly, basically has been half than previous year. And this is not related to our capability to provide service to corporates. Definitely, the level of project upset by the relevant public bodies has been severally reduced, and this is driving, obviously, from one side some issues in getting, you know, orders from the clients because in front of a potential lower probability of getting the project accepted by the relevant public bodies sometimes difficult to get orders. On the other side, we may say that the level of positive responses for the relevant bodies are dropped. If you take out ADF and this situation, you have to say that At the end we got a positive, finally a positive impact. So basically what has been missed in Q4 last year on 5.0 has been recovered in Q1. In Q1, we booked, you know, better results compared to previous year. So, basically, the company was finally able to get the revenue of all the activity performed on the 5.0. We are now waiting, starting from Q2, you know, an acceleration on the new measure that we have, that is the hyper-ammortamento, for which, you know, sales have already started, and we do expect that some major clarification that should occur over the next weeks will put our sales force in the position to collect all the orders that are expected by, from this new measure. So overall, This is the situation. The revenues went up 7%. There's been some pressure on the mix of the revenue we deliver, also because the 5.0 has been requested to deliver in a very small amount of time, and this required additional effort from external resources being able to perform all the activities until the expiring of the measure. Basically, this is the session. Then I leave to Joseph that will complete talking about the guidance.

Yeah. As you all know, the Board of Directors convened today, and they obviously confirmed As you have read on the official documents, press releases and presentation, the guidance, which includes revenues growing 3 to 4% versus the prior year in terms of top line EBITDA adjusted growing 6 to 7% versus the prior year. and a leverage ratio to end around that is NFP over adjusted EBITDA to end around 3.1 to 3.3 times. Obviously, there are key initiatives being already put in place in terms of implementation of action plans aimed at containing operating call styles although not extensively underlined. At this point, I would open the call for questions.

Okay, sir. Sorry, your last word just cut out just to let you know, but we have the first question from Alexandra Arsova of Equit.

Hi, good afternoon. Thank you for taking my questions and for your presentation. A couple of questions on my side. The first one is just a follow-up on what you said at the very beginning on the delay of the postponing of the reverse merger process. since they're aiming to reach the 90% squeeze-out threshold, which is the new threshold according to the updated tooth regulation. But since this new regulation came into effect after the end of the original tender offer period, so I was wondering if you have received a sort of formal confirmation by CONSOB that you can apply this new rule also retroactively to this deal, to this tender offer. And the second one is on the call you recorded for InfoChart. So for the 16% stake, if I read it correctly, you booked 137 million for the 16%. So I was wondering if you can share with us what is the implied valuation in terms of multiples in this 137 million. Thank you.

Hi, Sandra, I'll take the first one, and Aldona will take the second one. So in terms of the information that you're asking, first of all, obviously it's the offeror who is acting in terms of the mandatory takeover. We know about the new TOOF, but that I think will be approved in June or something like that. In terms of the information that you see on the public press release, what has been mentioned is basically that the reverse merger has already been put in place, or at least the initial works have been put in place, and that accordingly, basically the offer has almost reached the 90% threshold. I think that pretty much is the information that you guys need. In terms of retroactively, I cannot confirm if that is the case. We know that the TOOF was obviously amended and will make the processes easier. But let's keep it factual. Let's keep and stick to what is on the press release. So I will just say that, you know, we confirm what the press release is actually saying and we also confirm all the already and public information in terms of the purchases made by the offer to reach the 90% threshold.

Just give us a second for the second question. Okay, yes, going to the second question.

So basically, we applied, you know, our view on the calculation of the value of the acquisition of the 16%. So basically this has been internally calculated based on the information and on our view how this is going to be calculated. So the process is currently ongoing as a normal M&A. and, you know, we are dialoguing with the counterpart and the process is following. There is no, definitely, it is a complete calculation based on the agreement between the two parties.

Okay, thank you very much.

As a reminder, if you wish to register for a question, please press star and one on your touch-tone telephone. Once again, to wish to ask a question, please press star and one on your telephone. Gentlemen, at this time, there are no questions registered.

All right. Thank you very much, Operator, and thank you.

Thank you. Bye. Bye.