Seco S p A : Quarterly financial report as of March 31, 2024

SECO S.p.A.

QUARTERLY FINANCIAL REPORT AT MARCH 31, 2024

SECO S.p.A.

Registered office in Arezzo, via A. Grandi 20

Share capital Euro 1,296,944.48

VAT No. 00325250512

Arezzo Companies' Registration No. 4196

CONTENTS
CONTENTS	2
CORPORATE BOARDS	3
THE GROUP AND ITS OPERATIONS	4
CONSOLIDATED BALANCE SHEET AND CONSOLIDATED INCOME STATEMENT AT MARCH 31, 2024	8
Consolidated Balance Sheet	8
Consolidated Income Statement	9
Consolidated Comprehensive Income Statement	10
Consolidated Cash Flow Statement	11
Consolidated Statement of Changes in Equity	12
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	13
OPERATING PERFORMANCE TO MARCH 31, 2024	15
Sales revenues by region	15
Alternative operating performance measures	16
Alternative financial performance measures	16
SUBSEQUENT EVENTS	18
OUTLOOK	18

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CORPORATE BOARDS

Board of Directors

Office held until the approval of the 2023 annual accounts

Chairperson	Daniele Conti
Chief Executive Officer	Massimo Mauri
Directors	Claudio Catania
	Emanuela Sala
	Luca Tufarelli
	Luciano Lomarini
	Michele Secciani
	Elisa Crotti
	Valentina Montanari1
	Diva Tommei
	Tosja Zywietz
Board of Statutory Auditors
Office held until the approval of the 2023 annual accounts
Statutory Auditors	Pierpaolo Guzzo (Chairperson)
	Gino Faralli
	Fabio Rossi
Alternate Auditors	Marco Badiali
	Maurizio Baldassarini
Executive Officer for Financial Reporting	Lorenzo Mazzini
Independent Audit Firm	Deloitte & Touche S.p.A.

Office held until the approval of the 2029 annual accounts

1 Co-opted by the Board of Directors on December 22, 2022, to replace Ms. Giovanna Mariani, who passed away on November 4, 2022. This director will remain in office until the next meeting of shareholders called to confirm the appointment until the end of the term of the full board.

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THE GROUP AND ITS OPERATIONS

The SECO Group (hereinafter also referred to as the "Group" or "SECO") consists of the parent company SECO S.p.A., hereinafter also referred to as the "Company" or "Parent Company", and its subsidiaries, as presented below:

The Company's registered office is located in Arezzo (AR), via Achille Grandi 20.

SECO is a high-tech Group that develops and delivers cutting-edge solutions for the digitization of industrial products and processes. SECO's hardware and software offerings enable B2B enterprises to introduce edge computing, Internet of Things, data analytics and artificial intelligence into their businesses. Within a quickly and broadly evolving marketplace, SECO's technologies encompass many fields of application, with innovative and customized solutions provided to its more than 450 customers, in sectors such as the Medical, Industrial Automation, Fitness, Vending and Transportation areas, in addition to many others.

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MARKET OVERVIEW

As digital technologies become ubiquitous, we are entering an era of interconnected devices, analytics, and artificial intelligence. The increasing number of intelligent devices - which can process data at the source (edge computing) and are connected to the cloud - is opening the door to new business models, creating major development opportunities, and helping to improve people's overall safety and quality of life.

The evolution of technologies such as the Cloud, Big Data and Analytics, Artificial Intelligence and the Internet of Things has accelerated the digital transformation of business processes worldwide, and the way in which companies approach the creation, provision and use of ICT products and services.

In the current environment, speed of execution and time to market are key aspects not only for competitivity, but also for a business's survival. We are witnessing across the globe a strong drive towards digitalization.

In our post-pandemic climate, this trend has significantly accelerated, with digitalization spreading to many sectors and environments of daily life which historically were far removed from this world. This trend has also advanced significantly in the industrial environment, where businesses across all sectors increasingly require more innovation, digitalization and interconnection among their products.

Climate change and issues surrounding raw material and energy supply have combined to make accelerating the digital transition increasingly crucial. The eco digital revolution is only getting started, with digitalization set to play a driving role. Specifically, by enabling the local execution of increasingly complex computational models, through Edge AI, increasingly advanced tools will be available to support renewable energy, energy efficiency, and the reduced consumption of industrial and personal devices.

The many relaunch and investment incentives programs underway in numerous countries shall contribute to further speeding up these dynamics, ensuring growth of the connected devices and IoT market comfortably in the double-digits, as indicated by all of the most trusted sector studies.

OPERATING OVERVIEW

In 2023, a significant portion of our customer's reduced their inventory levels. This was seen across all sectors in which SECO operates, resulting in - in a number of cases - the postponement of order delivery dates.

The development of new Edge computing products and new features of the Clea software suite continued in the period. CLEA is a key linchpin in the strategy we have undertaken at SECO with the goal of increasing the value created for our customers by offering a growing range of end-to-end,

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integrated, customizable solutions based on micro-computing,human-machine interfaces, software platforms, and artificial intelligence. The range of software was further strengthened with the recent introduction in 2023 of Studio X - a generative AI platform dedicated to OEM's to provide first and second level support to customers.

Along this strategic line of action, we are committed at SECO to further strengthen our presence and position in the IoT and AI market through a number of major agreements to add weight to our commercial offerings and technology.

In March, Clea's Astarte module was made available on Google Cloud Marketplace, offering Google Cloud users simplified access to an advanced framework for performing IoT data-driven transactions. Astarte allows IoT data to be orchestrated in the field and the management of device- cloud communication on Google Cloud. This operation allows Google Cloud users to easily launch and scale their IoT applications, leveraging Google's cloud infrastructure and benefiting from Astarte's native integration.

Research and Development and Technological Innovation

In the initial months of 2024, SECO remained strongly committed to ensuring high levels of innovation, integration and added value in the solutions built according to the specific needs of customers operating in multiple verticals.

SECO's main objective is to anticipate the needs of its customers, utilizing frontier technologies and supporting them in the digital transition of their business, while adding value to their solutions.

The constant push for innovation by all the players in a given sector can quickly render a competitive advantage obsolete. For this reason, SECO every year dedicates significant resources to Research and Development. With 10 design centers in 9 countries across the world, approx. one-third of SECO personnel are employed in the design of new products and of off-the-shelf solutions to be sold on the market, in addition to the co-development and co-engineering of customized products, working hand-in-hand with the customer. Specifically, approximately 130 SECO personnel are exclusively focused on developing Artificial Intelligence and software solutions.

The SECO Group R&D departments are responsible for developing and designing technological solutions based on integrated systems, standard and custom modules and IoT and AI software solutions for SECO's customers and target markets. Research and development is a key aspect of SECO's business model and is carried out both in-house and through partnerships with world-class technology enterprises and research institutes and university hubs worldwide.

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SECO on the stock exchange

SECO S.p.A. stock is listed on the Euronext Star Milan market organized and managed by Borsa Italiana S.p.A.

At March 31, 2024, the SECO S.p.A. (IOT:MI) stock price was Euro 3.64, with a capitalization therefore of Euro 484.0 million.

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CONSOLIDATED BALANCE SHEET AND CONSOLIDATED INCOME STATEMENT AT MARCH 31, 2024

Consolidated Balance Sheet

		Note			31/03/2024			31/12/2023
Property, plants and equipments				16,958		16,726
Intangible assets				104,964		104,019
Right-of-Use				11,423		11,755
Goodwill				165,394		165,216
Non-current financial assets				13,173		13,201
Deferred tax assets				2,321		2,289
Other non-current assets				1,635		1,623
Total non-current assets	(1)		315,867		314,829
Inventories				89,715		85,827
Trade receivables				51,560		49,489
Tax receivables				12,174		9,458
Other receivables				7,304		4,077
Cash and cash equivalents				70,840		74,816
Total current assets	(2)		231,592		223,668
TOTAL ASSETS				547,459		538,497
Share capital				1,296		1,296
Share premium reserve				232,036		232,037
Reserves				58,551		45,425
Group Net Profit				93		11,864
Total Group Equity	(3)		291,976		290,622
Minorities Equity and Reserves				22,021		19,109
Minorities Profit for the period				342		2,766
Total Minorities Equity				22,363		21,875
Total Equity				314,339		312,497
Employee benefits				3,415		3,312
Provisions for risks				1,235		1,235
Deferred tax liabilities				24,058		24,084
Non-current financial payables				105,894		106,928
Non-current lease liabilities				8,367		8,603
Other non-current liabilities				8		8
Total Non-Current Liabilities	(4)		142,978		144,170
Current financial liabilities				13,463		11,031
Current part of N-C financial liabilities				11,303		11,211
Current lease liabilities				1,948		2,126
Trade payables				37,917		36,402
Other current liabilities				10,736		11,728
Tax payables				14,775		9,332
Total Current Liabilities	(5)		90,143		81,830
TOTAL EQUITY AND LIABILITIES				547,459		538,497

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Consolidated Income Statement

		Note			Q1 2024			Q1 2023
Net sales				47,217		54,605
Other revenues and income				1,162		1,115
Total revenues and operating income	(6)		48,379		55,720
Costs for services, goods and other operating costs				(29,368)		(35,206)
Personnel costs				(9,855)		(9,187)
Total costs and other operating charges	(7)		(39,223)		(44,392)
Amortization & depreciation	(8)		(5,364)		(4,657)
Provisions and write-downs				0		0
Operating Profit				3,792		6,670
Financial income and charges				(2,017)		(2,004)
Exchange gains/(losses)				336		27
Profit before tax				2,112		4,693
Income taxes				(1,677)		(1,439)
Profit for the period				435		3,254
Non-controlling interests profit				342		690
Group profit				93		2,564
Basic earnings per share				0.00		0.02
Diluted earnings per share				0.00		0.02

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Consolidated Comprehensive Income Statement

			Q1 2024			Q1 2023
Profit for the period		435		3,254
Other comprehensive income/(expense) which may be subsequently	339		(543)
reclassified to the income statement:
Translation differences		339		(543)
Net gain/(loss) on Cash Flow Hedge		0		0
Other comprehensive income/(expense) which may not	be	0		0
subsequently reclassified to the income statement:
Discounting of employee benefits		0		0
Tax effect discounting employee benefits		0		0
Total comprehensive income		339		(543)
Non-controlling interests		488		552
Parent company shareholders		285		2,159
Total comprehensive income		774		2,711

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