Italiaonline : The BOD approves H1 2019 Results

PRESS RELEASE

THE BOARD OF DIRECTORS APPROVES THE RESULTS

OF THE FIRST HALF OF 2019

DIGITAL REVENUES CONTINUE TO GROW, SUPPORTED BY THE POSITIVE PERFORMANCE OF BOTH THE PRESENCE AND THE DIGITAL ADVERTISING

SEGMENT

• ● Consolidated revenues at 30 June 2019 amounted to € 150.4 million (€ 157.4 million in H1 2018),

  - 4.4% YoY.

• ● Digital revenues at 30 June 2019 were equal to € 124.0 million +3.1% YoY. The Advertising segment is still growing (+3.7% YoY) and also the Presence segment is expanding (+2.5% YoY).

• ● EBITDA1 amounted to € 28.2 million (€ 37.9 million at 30 June 2018) with an EBITDA margin at 18.8% (24.1% in H1 2018).

• ● Normalised EBITDA2 amounted to € 26.3 million (€ 26.4 million at 30 June 2018) with a normalised

  EBITDA margin at 17.5% (normalised EBITDA margin 16.8% in H1 2018).

• ● EBIT was € 7.0 million, up compared to the negative figure of € 10.4 million of H1 2018, which was affected by non-recurring and restructuring charges3, mainly linked to the corporate reorganisation plan.

• ● Net Profit positive by € 4.5 million compared to negative figure of € 7.4 million in H1 2018.

• ● Cash holdings equal to € 117.1 million (€ 101.0 million at 31 December 2018).

• ● Net Financial Position (NFP) positive by € 88.6 million (€ 67.0 million at 31 December 2018).

• ● Audience Figures4: The Italiaonline agency, iOL Advertising, confirms its ability, when combining its own and third-party audience, to reach a total of 8.6 million unique users a day, of which 6.7 million from smartphones.

Assago, 01 August 2019 - The Board of Directors of Italiaonline S.p.A. (hereafter "Italiaonline"), a Company listed in the MTA of Borsa Italiana, leader on the Italian Internet market, has examined and approved the interim financial reports at 30 June 2019.

1EBITDA net of allocations to the allowance for doubtful debts and business risks and other operating income and expense, and gross of non-recurring expenses.

2 Normalised data are net of normalised items (items not deemed representative of the normal elements of the business and not considered for the purposes of a homogeneous comparison) mainly deriving from the release of provisions made in previous years in relation to the reorganisation process (equal to € 11.5

million in H1 2018 and € 2.0 million in H1 2019).

• 3 Non-recurring and net restructuring charges at 30 June 2018 equal to € 27.6 million

• 4 Source: Audiweb 2.0, powered by Nielsen, May 2019 (latest figure available on today's date) | TDA: Total Digital Audience, DAUs: Daily Active Users.

Italiaonline S.p.A. is subject to the management and coordination activities of Libero Acquisition S.à r.l. Registered office: Via del Bosco Rinnovato 8 - Palazzo U4 - 20090 Assago (MI), Milanofiori Nord Secondary office: Corso Mortara 22 - 10149 Turin

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Register of Companies: 03970540963 of Milan Tax Code and VAT no.: 03970540963 R.E.A.of Milan: MI-2070674

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CONSOLIDATED RESULTS REVENUES

At 30 June 2019 revenues were € 150.4 million (€ 157.4 million at 30 June 2018), -4.4% YoY. The evolution of the figure reflects, on the one side, the continuous development of digital revenues (+3.1% YoY), on the other, the continuation of the expected structural decline in traditional products such as telephone directories and telephony (-28.8%).

In the reporting period, digital revenues amounted to € 124.0 million, up +3.1% YoY, accounting for 82.4% of total revenues, increasing by +6.0 percentage points compared to the same period in 2018 (76.4%).

The evolution of digital revenues in the first half reflects: i) both the continuous expansion of the Advertising segment (+3.7% YoY), ii) and the growth (+2.5% YoY) of the Presence segment, which accounts for about 51% of digital revenues.

The decline in revenues of the traditional segment (traditional & others) continues. In H1 2019 this segment recorded an overall drop of 28.8%, accounting for 17.6% on consolidated revenues (23.6% in H1 2018).

OPERATING RESULTS AND NET PROFIT

It should be recalled that, starting from the approval of the results at 31 December 2018, Italiaonline deemed it appropriate to also highlight a normalised vision of EBITDA, EBIT and Net Profit

(hereafter "normalised" data) in order to isolate the accounting effects of certain normalised items and provide evidence of the actual profitability of the Business5.

***

EBITDA at 30 June 2019 amounted to € 28.2 million (EBITDA margin 18.8%), compared to 30 June 2018 when it was € 37.9 million (EBITDA margin of 24.1%). The decrease mainly reflects the lower normalised items recorded in the reporting period compared to H1 2018.

Normalised EBITDA at 30 June 2019 amounted to € 26.3 million (normalised EBITDA margin 17.5%),

substantially in line compared with 30 June 2018, when it was € 26.4 million (normalised EBITDA margin of 16.8%). Please note that in H1 2019 the decrease in personnel expense, mainly attributable to the effects of the restructuring process carried out in 2018, the lower provisions for risks and charges and the decrease in industrial costs, completely offset the lower revenues and the increase in commercial costs. With reference to the latter, the evolution compared to 30 June 2018 is attributable to a different timing relating to the distribution of the bonuses to the sales network during the year.

At 30 June 2019 EBIT was € 7.0 million compared to the negative figure of € 10.4 million of H1 2018, which was affected by non-recurring and restructuring charges (€ 27.6 million), mainly linked to the corporate reorganisation plan.

Normalised EBIT was € 7.2 million, compared to € 5.7 million at 30 June 2018. The evolution of the figure mainly reflects a reduction in amortization.

5 In particular, EBITDA H1 2019 and H1 2018 normalised data are net of normalised items (items not deemed representative of the normal elements of the business and not considered for the purposes of a homogeneous comparison) mainly deriving from the release of provisions made in previous years in relation to the reorganisation process (equal to € 11.5 million in H1 2018 and € 2.0 million in H1 2019). The normalised data relating to EBIT were calculated starting from the normalised EBITDA and do not include the non-recurring charges (equal to € 27.6 million in H1 2018 and € 2.2 million in H1 2019). The data relating to the Net Profit were calculated starting from the normalised EBIT, leaving the items included in the EBIT and Net Profit unchanged.

Italiaonline S.p.A. is subject to the management and coordination activities of Libero Acquisition S.à r.l. Registered office: Via del Bosco Rinnovato 8 - Palazzo U4 - 20090 Assago (MI), Milanofiori Nord Secondary office: Corso Mortara 22 - 10149 Turin

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Register of Companies: 03970540963 of Milan Tax Code and VAT no.: 03970540963 R.E.A.of Milan: MI-2070674

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At 30 June 2019, Net Profit was positive by € 4.5 million compared to 30 June 2018, when it was negative by € 7.4 million. Please note that the figure for H1 2018 incorporated: i) the negative effects relating to non-recurring and restructuring charges equal to € 27.6 million and ii) the positive effects of the capital gain deriving from the disposal of the investment in 11.880 Solution Ag (for € 1.3 million)

and the payment of the dividend deriving from the investment in Emittente Titoli S.p.A. (for about € 2 million).

Normalised Net Profit was positive by € 4.7 million compared to H1 2018, when it was positive by € 8.7 million.

FINANCIAL RESULTS

Capex in H1 2019 amounted to € 14.1 million (9.4% of revenues), up compared to € 9.5 million (6.1% of revenues) in H1 2018. As already stated for the results at 31 March 2019, the increase mainly reflects higher one-off investments in IT infrastructure and the periodic renewal of software licenses for internal use.

The unlevered Free Cash Flow6 generated during H1 2019 was positive by € 49.0 million, (€ 24.1 million in H1 2018). The year on year evolution also includes the extraordinary collection of a tax receivable equal to € 18 million.

Cash holdings at 30 June 2019 were € 117.1 million, compared to € 101 million at 31 December

2018. The positive development, despite the expenditure connected to the finalisation of the personnel reorganisation plan, includes the collection of the tax receivable described above, in addition to the cash flow generated by the operating activities of the period.

Net Financial Position (NFP) was positive by € 88.6 million (€ 67 million at 31 December 2018). The

NFP at 30 June 2019 includes about € 29 million in Financial Liabilities due to the adoption of IFRS 16.

Audience Figures7: The Italiaonline agency, iOL Advertising, confirms its ability, when combining its own and third-party audience, to reach a total of 8.6 million unique users a day, of which 6.7 million from smartphones.

• 6 Unl. FCF: Operating FCF (EBITDA-Capex+ ∆NWC) adjusted for the amount of income taxes paid.

• 7 Source: Audiweb 2.0, powered by Nielsen, May 2019 (latest figure available on today's date) | TDA: Total Digital Audience, DAUs: Daily Active Users.

Italiaonline S.p.A. is subject to the management and coordination activities of Libero Acquisition S.à r.l. Registered office: Via del Bosco Rinnovato 8 - Palazzo U4 - 20090 Assago (MI), Milanofiori Nord Secondary office: Corso Mortara 22 - 10149 Turin

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Register of Companies: 03970540963 of Milan Tax Code and VAT no.: 03970540963 R.E.A.of Milan: MI-2070674

Share capital Euro 20,000,409.64 subscribed and fully paid-up

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MAIN CONSOLIDATED RESULTS AS AT 30 JUNE 2019

€m	H1 2018	H1 2019	YoY % Change
Revenues	157.4	150.4	(4.4)%
o/w Digital revenues	120.3	124.0	3.1%
EBITDA	37.9	28.2	(25.5)%
Ebitda margin	24.1%	18.8%	(5.3) p.p.
EBITDA normalised	26.4	26.3	(0.6)%
Ebitda normalised margin	16.8%	17.5%	+0.7 p.p.
Net Result	(7.4)	4.5	n.m
Net Result normalised	8.7	4.7	(46.3)%
Unlevered FCF	24.1	49.0	103.2%
EBITDA normalised cash conversion*	91.2%	186.4%	+95 p.p.

* FCF Unlevered / Ebitda Normalised

€m
Cash Holdings	101.0	117.1	16%
Net Financial Position	67.0	88.6	32%

OUTLOOK FOR THE CURRENT YEAR

In the second part of 2019 Italiaonline's management will be involved, as already occurred in the first half of the year, in initiatives aimed at supporting the top line and, in particular, the growth of revenues in the digital segment, based on the development drivers specified at the time of the approval of the Business Plan 2020 - 2022.

In particular these drivers imply:

• - for the business segment dedicated to SMEs: i) enrichment of the digital offering dedicated to SMEs with a view to a partnership aimed at supporting them in the development and growth of their business; ii) renewal of Italiaonline Digital Directories through the development of vertical marketplaces with transactional features where SMEs and professionals can interact and deal directly with end consumers; iii) strengthening multi-channel market coverage; iv) improvement of the Customer Experience through a Customer-centric operating model;

• - for the Consumer business segment: i) acceleration of the growth of the audience and traffic for properties managed by IOL to support leadership in the digital media area, through the development of new verticals and the improvement of content, to also attract younger generations; ii) to leverage unique IOL users in order to grow transactional services through the development of new businesses;

• - for the large account segment: i) to expand the Digital Inventory managed in order to consolidate the leadership of IOL as a digital agency on the Italian market, through new partnerships and the development of new display network advertising services; ii) to maximise the effectiveness of the monetisation of IOL properties by strengthening direct channel coverage.

The Management is also involved in the implementation of the operating model described at the time

Italiaonline S.p.A. is subject to the management and coordination activities of Libero Acquisition S.à r.l. Registered office: Via del Bosco Rinnovato 8 - Palazzo U4 - 20090 Assago (MI), Milanofiori Nord Secondary office: Corso Mortara 22 - 10149 Turin

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Register of Companies: 03970540963 of Milan Tax Code and VAT no.: 03970540963 R.E.A.of Milan: MI-2070674

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of the approval of the Business Plan 2020 - 2022, that provides for:

• o the establishment of an organisation of Customer-centric activities to improve Customer Experience by merging services into a single centre of expertise;

• o the simplification and digitalisation of processes by implementing new CRM, ERP and resource management systems;

• o the continuation of the process of cost regulation and productivity efficiency;

• o the ongoing growth of Italiaonline's brand awareness;

• o the training of staff and development of digital skills.

On the basis of the information available to date, for 2019 Italiaonline confirms the guidance already described at the time of the approval of the results at 31 December 2018. For the current year, in particular, it forecasts a slightly declining top line (low single digit) on a year on year basis, which reflects a mid-single digit growth in digital revenues that is able to almost completely offset the decline in the traditional business. Normalised EBITDA 2019 is expected to be substantially stable compared to the normalised figure of 2018. Finally, cash holdings at the end of the year are expected to increase by single-digits compared to the amount at 31 December 2018, net of the extraordinary collection of € 18 million linked to the successful conclusion of a pending issue with the Tax Authorities.

MAIN EVENTS OF THE FIRST HALF OF 2019

Ordinary Shareholders' Meeting of 30 April 2019 The Ordinary Shareholders' Meetings was held on 30 April 2019. The Shareholders' Meeting resolved:

•  to appoint Roberto Giacchi as member of the Board of Directors of Italiaonline S.p.A. pursuant to Article 2386 of the Italian Civil Code. He will remain in office until the expiration of the current

  Board of Directors, that is to say until the Shareholders' Meeting called to approve the financial statements at 31 December 2020;

•  to pay Mr. Roberto Giacchi, pro rata temporis, the same remuneration determined in favour of all the members of the Board of Directors by the Shareholders' Meeting of 27 April 2018, notwithstanding any additional remuneration determined by the Board of Directors - in the meeting held on 8 May 2019 - pursuant to Article 2389, paragraph 3, of the Italian Civil Code, for the directors holding special positions.

•  to approve the Annual financial report of the Company at 31 December 2018, which highlights a loss of € 10.09 million;

•  to entirely cover the loss by using the Share premium reserve for the same amount;

•  to approve Section I of the Remuneration Report pursuant to Article 123-ter of Legislative Decree No. 58, dated 24 February 1998;

•  to revoke the previous authorisation for the purchase of treasury shares granted by the resolution of the shareholders' meeting of 27 April 2018, for the part that was not completed;

•  to authorize (i) pursuant to and in accordance with Article 2357 et seq. of the Italian Civil Code and Article 132 of Italian Legislative Decree no. 58 of 24 February 1998, the purchase of the Company's treasury shares on one or more tranches, for a period not exceeding 18 months from the date of this resolution and (i) the Board of Directors, pursuant to Article 2357-ter of the Italian Civil Code, to dispose in whole or in part, without time limits, of the treasury shares purchased even before the purchases have been completed and (iii) to grant the Board of Directors and the Chief Executive Officer on its behalf, the widest possible powers that are needed or appropriate to make purchases of treasury shares, including through buy-back programmes, as well as to execute deeds of transfer, disposal and/or use of all or part of the treasury shares purchased and, in any case, to implement the above resolutions, including

Italiaonline S.p.A. is subject to the management and coordination activities of Libero Acquisition S.à r.l. Registered office: Via del Bosco Rinnovato 8 - Palazzo U4 - 20090 Assago (MI), Milanofiori Nord Secondary office: Corso Mortara 22 - 10149 Turin

Certified E-mail:[e-mail]

Register of Companies: 03970540963 of Milan Tax Code and VAT no.: 03970540963 R.E.A.of Milan: MI-2070674

Share capital Euro 20,000,409.64 subscribed and fully paid-up

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