Investor Presentation March 29, 2019 12/03/2019 INTRED S.P.A. 1 - - PowerPoint PPT Presentation

12/03/2019 INTRED S.P.A.

Investor Presentation March 29, 2019

1

12/03/2019 INTRED S.P.A. 2

Company Overview

INTRED, The fiber company

3

INTRED is a telecommunication and internet provider with its

• wn

fiber network infrastructure Founded in 1996 by Daniele Peli, INTRED provides: Fixed Broadband and Ultra-Wideband Connectivity, Fixed Telephony Services and Cloud INTRED holds a strong presence in Lombardy, the richest region in Italy INTRED has a fragmented customer base with a very low churn rate (< 3%)

80 qualified resources € 28M capex since the founding 93.6% Customer Satisfaction Index 23 years of expertise in the TLC Industry 1,950 km of optical fiber and 130 POP in Lombardy Over 26k data users in 2018

A History of Profitable Growth

4

DANIELE PELI LEADS THE COMPANY STARTING OWN NETWORK EIR BRAND WAS FOUNDED LISTING ON AIM STOCK EXCHANGE

2012 2010 1997

INTRED SRL WAS FOUNDED

1996 2018

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Customers (000) Revenues (million)

5 #Clients x5

CAGR Revenues ‘15-’18 +23.5%

€ 17.2M

Revenues +83%

Strong growth starts in 2010 with the proprietary network 10x in 10 years

A History of Profitable Growth

26.3K

Governance

6

Daniele Peli

Chairman

Board of Directors Marisa Prati

Director

Adalberto Salvi

Director

Alessandro Triboldi

Indipendent Director

Renzo Torchiani

Director

Daniele Peli Chairman & CEO Filippo Leone CFO Top Management

Daniele Peli; 46.2% Marisa Prati; 23.1% Value First SICAV; 9.9% Employees & Managers; 0.9% Market; 19.9%

A Successfull IPO

7

Shares issued 4,861,000 New issue 4,420,500 Greenshoe 440,500 Price Adjustement Shares 1,714,500 Shares Price 2.27 € Shares Price for Managers&Emploeeys 2.04 € IPO Turnover 11,000,660 € (included shares from Greenshoe option)

• The placement of the shares generated a demand greater than 2.5

times the request

• Negotiations started on 18 July 2018

«The result of the IPO confirms the validity of

• ur growth project that

will allow us to seize new business opportunities.» Daniele Peli

Number of Shares 15,850,500 Free Float 21.40% Market Cap 36M

Stock Performance

8

Market: AIM Italia Price (26/3/19): € 3.73 Ticker: ITD.MI Market Cap (26/3/19): € 59.1M Shares: 15,850,500

• Avg. Volume: 8.3K shares

Since listing:

• 64.2% increase of Intred Share
• Intred outperformed the AIM market by

73.1% and the FTSE MIB by 68.0%

70 90 110 130 150 170 190

17/07/2018 17/08/2018 17/09/2018 17/10/2018 17/11/2018 17/12/2018 17/01/2019 17/02/2019 INTRED FTSE AIM FTSE MIB FTSE Telecom

12/03/2019 INTRED S.P.A. 9

Market Outlook

Market Outlook

10

• The TLC market accounts for 60% of the communications industry, totalling €32.2B of revenues.
• The accesses in FTTH have been growing in 2018 (+50%).
• The increase in FTTC, FTTH and data traffic (+ 30%) is due to the growing demand for online video content on the fixed
• network. FTTC and FTTH have together reached 32% of total accesses.

*Source: report AGCOM

Number of accesses (M)

0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 Sep-14 Sep-15 Sep-16 Sep-17 Sep-18

FTTH Accesses

1 2 3 4 5 6 7 Sep-14 Sep-15 Sep-16 Sep-17 Sep-18

FTTC Accesses

Number of accesses (M)

• 20%
• 10%

0% 10% 20% 30% 40% 50% 60% 70%

• 10.00%

0.00% 10.00% 20.00% 30.00% 40.00% 50.00%

Market Outlook

11

EBITDA margin Revenues 2017 Sales growth

Source: Corporations’ balance sheets

12/03/2019 INTRED S.P.A. 12

Business Model & Strategy

Investment Case

13

Broad range of services addressed to a wide range of clients Strong local presence in a thriving area At the forefront of innovation: the Network A profitable business model based on long term client relationship Proven track record and experienced management team

Broad range of services and wide range of clients

14

▪ More than 95% of INTRED’s revenues are based on recurring fees and traffic ▪ High revenues visibility due to 85% of anticipated invoices paid within 30 days (average payment time < 36,4 days) ▪ Very low churn rate (< 3%) ▪ Long term relationship with the customer (3Y contract with best customer and Public Administration) ▪ Wide range of clients, 26,268 data users at December 2018.

2018 Revenues breakdown per service

Ultra Wideband

46.93%.

Voice

11.60%

Wireless(RDSL)

11.72% 4.33%

Broadband

22.15%

Housing & Cloud

2.43%

Ancillary services Other

0.84%

At the Forefront of Innovation: the Network

2014 420km 2015 850km

2016 1,120km 2017 1,500km 2018 1,950km INTRED has a network structure with 1,950 km of optical fiber and 130 active POP

• Coverage of Lombardy region
• CISCO SISTEMS MPLS Technology
• Network capability: up to 80k user
• Now: 28K data connections and 8k voice connections

15

Investments Strategy focused on Network

16

€ 20-25

planned investments in the next two years

Agreement with OpenFiber for the use of the fiber

• ptic network

switched off GPON . Agreement with Telecom Italia S.p.A. for the acquisition of about 500 km of optical fiber switched off (IRU, for 15 years).

€ 3M

IN 5 YEARS

€ 2M

IN 1 YEARS

IPO Proceeds net

• f

listing costs equal to 9.52M

Goals

• Becoming leader in the optical fiber connection market of periferic areas where the major competitors are not present
• Development of Ultra Wideband connectivity, disinvesting from broadband connectivity by using the proprietary network
• Development of the fiber network through IRU contracts with major TLC operators

12/03/2019 INTRED S.P.A. 17

FY 2018 Financials

After a sound 2017, profitable growth continues in 2018

18

Network

• The

infrastructure network increased by 30% in 1 year to 1,950 km

• 26,268 Data Users (+19.7% in

1 year)

• Sales FTTC and FTTH +65%
• 138,043 invoices issued
• €6.5M

invested in strengthening the proprietary network

Company

Corporate

• Successful IPO on the Italian

Stock Exchange, AIM segment.

• Agreements with TIM to

purchase 500 km of network infrastructure

• Agreement with Open Fiber to

purchase dark fiber in order to reach a higher number of real estate units with FTTH connections

* Normalised EBITDA doesn’t take into account revenues/costs of listing

Financial

• 2018

Revenues at €17.2M (+19.4% YoY ‘17-’18)

• 2018 EBITDA at € 6.8M ;

EBITDA margin at 38.1%, Normalised EBITDA* margin at 41.7%

• 2018

Net profit at €3.2M, +26.4%

• 2018 NFP positive at € 6.6M
• 2018 Net Equity at €22.6M

Financial Highlights, Strong Growth

19

* Adjusted EBITDA doesn’t take into account revenues/costs of listing

EBIT (M€)

1.4 2.4 3.5 4.2 4.7 15% 21% 23.9% 23.4% 26.7%

• 0. 5
• 1. 0
• 1. 5
• 2. 0
• 2. 5
• 3. 0
• 3. 5
• 4. 0
• 4. 5
• 5. 0

2015 2016 2017 2018 2018 Adj EBIT margin

CAGR '15 - '18: 45.8%

Net Financial Position (€M)

(5.3) (2.5) (4.1) 6.6

2015 2016 2017 2018

Net Profit (€M)

0.9 1.6 2.5 3.2

2015 2016 2017 2018

+26% CAGR '15 -'18: 54.7% +86% +55%

*

2.5 4.0 5.7 6.8 7.3 26% 35% 38.5% 38.1% 41.7%

• 1. 0
• 2. 0
• 3. 0
• 4. 0
• 5. 0
• 6. 0
• 7. 0
• 8. 0

2015 2016 2017 2018 2018 Adj EBITDA margin

CAGR '15 -'18: 39.9%

EBITDA (M€) Revenues(€M)

9.1 11.5 14.4 17.2

2015 2016 2017 2018

+25% +19% CAGR '15 -'18: 23.5% +26%

Datalines costantly improved

20

▪ In 2018 the number of users with datalines increased significantly: +19.7% YoY ▪ Continuous shift from broadband to ultrabroadband ▪ Very low churn rate (< 3%)

• 5,000

10,000 15,000 20,000 25,000 Dec Nov Oct Sep Aug Jul Jun May Apr Mar Feb Jan 2017 2018

2018 2017 Jan 22,306 18,548 Feb 22,716 18,862 Mar 23,206 19,275 Apr 23,598 19,634 May 23,934 20,007 Jun 24,217 20,335 Jul 24,367 20,556 Aug 24,544 20,756 Sep 24,980 21,123 Oct 25,451 21,455 Nov 25,858 21,727 Dec 26,268 21,937

21

2018 Revenues driven by Fiber Connections

Turnover Breakdown

54% 13% 29% 4%

Business Customers Wholesale Household Customers Public Administration

Revenues Breakdown

2000 4000 6000 8000 10000 Other Ancillary Services Hosting e Housing Voice RDSL Connectivity Ultrabroadband Broadband 2017 2018

• 7.5%

+64.7%

• 5.1%

+14.4%

• 0.2%

+1.1%

• 59.7%

22

Listing impact on profitability

EBITDA: Actual VS Last Year

€/000

The growth is almost entirely due to the increase of clients

*Tax Credit

5,696 2,800 (110) (263) (154) (41) (1,039) 391 416 (888) EBITDA 2017 Increase in Revenues Other Revenues Personnel Costs Adv. Costs Maintenance Costs of Access Other Costs EBITDA 2018 Listing Revenues* Listing Costs EBITDA Reported

7,281 6,808

23

€m

Net Debt & Cash Flow Analysis : Dec’17 – Dec’18

(4.1) 6.8 (6.5) 1.1 10.0 (0.1) (0.9) 0.3 6.6 NFP 2017 EBITDA CAPEX ∆ NWC IPO Proceeds Interest Expenses Taxes Other NFP 2018

2018: Investments continue

Investments since INTRED’s founding

• 2018 investments at € 6.5M over 35% of revenues focused on

FTTC and FTTH networks development in Brescia, Bergamo and Mantua.

• Most of infrastructure network investments are in tangible fixed

assets (73.4%), related to the development of the network, and in intangible fixed assets, represented by IRU (26.6%)

2018

• Total €28M
• Reached 1,950km of optical fiber and over 26,000 data

users

24

Network Development Capex €/M

2.5 0.5 1.1 1.7 5.2 2.5 4.2 4.8

• 1.0

2.0 3.0 4.0 5.0 6.0 2015 2016 2017 2018 IRU Proprietary Network

Appendix

25

Income Statement

26

• 2018 Revenues increased by 21% to €17.9M
• ROS 24.4% at the end of 2018
• Other Operating Costs include:
• €4.4 costs of access
• €2.6M of Personnel Costs
• EBITDA at €6.8M, Normalised EBITDA at

€7.3M

• EBITDA margin from 38.5% at the end of

2017 to 38.1% in 2018; normalized EBITDA at 41.7%

• EBIT at €4.2M. EBIT margin from 23.9% to

23.4%

• Net Results at €3.2M, after a 26.4% tax rate

€ 000 2018 Normalized 2018 2017 YoY% ('18-’17) Value of Production 17,883 17,467 14,777 21.0% Raw materials (122) (122) (311)

• 60.6%

Services (3,357) (2,469) (2,253) 49.0% Other operating costs (7,597) (7,597) (6,517) 16.6% Total Operating Costs (11,077) (10,188) (9,080) 22.0% EBITDA 6,807 7,279 5,696 19.5% EBITDA margin 38.1% 41.7% 38.5% Depreciation (2,617) (2,617) (2,172) 20.5% EBIT 4,190 4,662 3,524 18.9% EBIT margin 23.4% 26.7% 23.9%

• Net Financial Income (Charges)

(32) (32) (54)

• 41.6%

EBT 4,158 4,631 3,470 19.8% EBT margin 23.3% 26.5% 23.5% Taxes (950) (932) 1.9% Net Income 3,209 2,538 26.4% Net Income margin 17.9% 17.2%

27

Balance Sheet

• Virtuos Net Working Capital trend:

average cash in and payments confirmed.

• NPF turned positive due to a high cash

generation and capital increase.

• €6.5M invested in strengthening the

proprietary network that reached almost 2000 km

BALANCE SHEET (€000) 2018 % 2017 %

• Abs. val.

Change % Trade receivables 3,096.7 19.3% 3,581.5 26.5% (484.8)

• 13.5%

Other assets 1,015.9 6.3% 1,127.9 8.3% (112.0)

• 9.9%

Accruals and deferrals 343.7 2.1% 497.1 3.7% (153.4)

• 30.9%

CURRENT ASSETS 4,456.3 27.7% 5,206.6 38.5% (750.2)

• 14.4%

Trade-related payables (5,061.6)

• 31.5% (4,486.9)
• 33% (574.6)

12.8% Payments on account (3.5) 0.0% (1.6) 0.0% (1.9) 115.4% Tax position 269.5 1.7% (362.2)

• 2.7% 631.7
• 174.4%

Accruals and deferrals (4,477.6)

• 27.9% (4,124.3)
• 30.5% (353.3)

8.6% Other liabilities (507.1)

• 3.2% (426.4)
• 3.2% (80.7)

18.9% CURRENT LIABILITIES (9,780.3)

• 60.9% (9,401.5)
• 69.6% (378.8)

4.0% NET WORKING CAPITAL (5,324.0)

• 33.1% (4,194.9)
• 31.0%

(1,129.0) 26.9% Intangible fixed assets 4,856.9 30.2% 3,735.2 27.6% 1,121.7 30.0% Tangible fixed assets 16,991.0 105.8% 14,379.1 106.4% 2,611.8 18.2% Financial fixed assets 114.4 0.7% 99.8 0.7% 14.6 14.7% TOTAL FIXED ASSETS 21,962.3 136.7% 18,214.2 134.8% 3,748.1 20.6% Employee severance indemnity (552.7)

• 3.4% (477.4)
• 3.5% (75.3)

15.8% Provisions for risks and charges (22.2)

• 0.1% (25.9)
• 0.2% 3.7
• 14.3%

NET INVESTED CAPITAL 16,063.4 100.0% 13,516.0 100.0% 2,547.5 18.8% Share capital (10,000.0)

• 62.3% (3,810.0)
• 28.2% (6,190.0)

162.5% Reserves (9,441.6)

• 58.8% (3,091.5)
• 22.9% (6,350.1)

205.4% Result for the year (3,208.7)

• 20.0% (2,537.7)
• 18.8% (671.0)

26.4% SHAREHOLDERS’ EQUITY (22,650.3)

• 141.0% (9,439.2)
• 69.8%

(13,211.1) 140.0% Immediate liquidity 9,651.1 60.1% 1,087.8 8.0% 8,563.3 787.2% Payables due to banks - within 12 months (1,252.3)

• 7.8% (1,906.0)
• 14.1%

653.7

• 34.3%

Payables due to banks - after 12 months (1,811.9)

• 11.3% (3,258.6)
• 24.1%

1,446.7

• 44.4%

NET FINANCIAL POSITION 6,586.9 41.0% (4,076.8)

• 30.2%

10,663.7 261.6%

28

Cash Flow

€000 FY2018 FY2017 A) Cash flows from operating activities (indirect method) 1) Profit (loss) for the year before income taxes, interest, dividends and capital gains/losses from disposal 4,190.0 3,523.4 Total adjustments for non-monetary elements that do not have a contra-entry in net working capital 2,735.7 2,271.6 2) Cash flow before changes in net working capital 6,925.6 5,795.0 Changes in net working capital 1,128.5 (852.06) 3) Cash flow after changes in net working capital 8,054.1 4,943.0 Total other adjustments (1,025.2) (1,038.5) Cash from operating activities (A) 7,028.9 3,904.5 B) Cash flows from investment activities Cash from investment activities (B) (6,366.0) (5,502.3) C) Cash flows from financing activities Cash from financing activities (C) 7900.3 779.7 Increase (decrease) in cash and cash equivalents (A ± B ± C) 8563.3 (0.8) Opening cash and cash equivalents Bank and postal deposits 1,086.8 1,905.4 Cash at hand 1.00 0.52 Total opening cash and cash equivalents 1,087.8 1,906.0 Closing cash and cash equivalents Bank and postal deposits 9,650.3 1,086.8 Cash at hand 0.79 1.00 Total closing cash and cash equivalents 9,651.1 1,087.8

12/03/2019 INTRED S.P.A. 29

NEXT EVENTS

SHAREHOLDERS’ AGM to review the statutory financial statements April 19, 2019 AIM CONFERENCE May 27, 2019 Milan BOARD OF DIRECTORS 2019 H1 financial report. September 26, 2019

HEADQUARTER INVESTOR RELATIONS INTRED S.p.A Via PietroTamburini 1, 25136 Brescia (BS)

INTRED CFO & Investor Relations Officer Filippo Leone

CDR Communication IR Advisor Vincenza Colucci Tel: +39 030.72.80.200 www.intred.it

• Tel. +39 391 4143050

ir@intred.it

• Tel. +39 335 6909547

vincenza.colucci@cdr- communication.it

12/03/2019 INTRED S.P.A.

Thank you

30