Eurotech S p A : Earnings Call - Q1 2024

2024 first quarter results

INVESTORS LIVE STREAMING PRESENTATION

disclaimer

This presentation has been prepared by Eurotech S.p.A. (or "Eurotech") and has to be read in conjunction with its oral presentation.

The information contained in this presentation does nor purport to be comprehensive. Neither Eurotech nor any of its officers, employees, advisers or agents accepts any responsibility for/or makes any representation or warranty, express or implied, as to the truth, fullness, accuracy or completeness of the information in this presentation (or whether any information has been omitted from the presentation) or any other information relating to Eurotech, its subsidiaries or associated companies, whether written, oral or in a visual or electric form, transmitted or made available.

This document is confidential and is being provided to you solely for your information and may not be reproduced, further distributed to any other person or published, in whole or in part, for any purpose.

The distribution of this document in other jurisdictions may be restricted by law, and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions.

This document is directed only at relevant persons. Other persons should not act or rely on this document or any of its contents.

No reliance may be placed for any purposes whatsoever on the information contained in this document or any other material discussed during this presentation, or on its completeness, accuracy or fairness.

The information in this document and any other material discussed at this presentation is subject to verification, completion and change.

The information and opinions contained in this document are provided as at the date of the presentation and are subject to change without notice. Some of the information is still in draft form and will only be finalized.

By attending the presentation you agree to be bound by the foregoing terms. Trademarks or Registered Trademarks are the property of their respective owners.

Q1 2024 financial highlights

Revenues @11.9M€ largely affected by phase-out of main customer on legacy embedded business in U.S. and destocking in Japan

-50% YoY at constant exchange rates

Gross Profit Margin @ 48.7% improving 180bps YoY and better than 47.4% in FY23

Opex down 0.3M€ i.e. 3% YoY net of forex effects

but weak top line drove EBITDA into negative performance

Net Working Capital down 5.9M€ vs year end 2023

Net Financial Position improving 1.4M€ vs year end 2023 chasing good performance of NWC

#3

business

update

#4

2024 still a year of transition

full steam on tasks we can control

As our peers,

suffering the global destocking phenomena still ongoing, especially in Industrial

coping with longer ramp-up time of design-wins in Europe

but

facing mainly the phase-out of main customer on legacy embedded business in U.S.

Ongoing transformation includes:

1M€ cost saving from US reorganization kicking in

Further opex costs adjustment in progress: additional 3M€ savings over next 9 months

New products enabling new channels to amplify go-to-market bandwidth

Revamping US via M&A

Renewed commitment from Emera

#5

company strategic pivoting is happening

Edge AIoT surpassing Legacy Embedded in 2024

embedded boards & systemsedge AIoT hw & sw

	68.1
49.7	55.1	CAGR
	70%
		38.6
		26.2
		13.4

2021

2022

2023

2024

2021

2022

2023

2024

#6

our HW&SW value proposition again confirmed to be state

#7

global PRs announcing 3 new products enabling go-to-market channels

First Cybersecure	Edge AI game-changers
Ignition-ready IPC

@Automate Show

ReliaCOR 40-13	ReliaCOR 31-11 & ReliaCOR 33-11
	powered by NVIDIA Jetson Orin

#8

going forward…

Low visibility beyond the short term: customers still

releasing orders "last-minute", but…

… early signs of a more promising second half of the year

Overall we expect growth in Edge AIoT revenues this

year

Net reduction in total operating costs, with a year- on-year benefit at the EBITDA level of about €1

million

Q2 improving significantly vs Q1

revenues >> Q1

GPM in line with Q1

OPEX decreasing further vs Q1

#9

finding the right balance

Opex Reduction Plan

Goal: lowering the run-rate of total opex by ca. 3M€

incremental to the net saving of 1M€ already coming to fruition

FY2025 opex down ca. 4M€ or 10% vs FY2023 opex

Timing: during next 9 months in sequential steps

How: 2 main initiatives

#1. Doubling down on run-for-cash of embedded business in US and Europe

#2. Strong rationalization of Edge AIoT business line with targeted interventions to redesign the organization after 2.5 year of intense transformation.

#10