tech value 28 july 2016 - ubi banca value 28 july... · 2020. 7. 23. · 28 july 2016 4 company...

Initiation of coverage

28 July 2016 – 5:30PM

IT services

Data

Shares Outstanding (m): 3.09

Market Cap. (EURm): 8.64

Enterprise Value (EURm): 11.31

Free Float (%): 21.3%

Av. Daily Trad. Vol. (m): 0.001

Main Shareholder: Mr. Radice

70.1%

Reuters/Bloomberg: TV.MI TV IM

52-Week Range (EUR) 2.5 3.1

Source: Factset, UbiBanca estimates

Performance

1m 3m 12m

Absolute -3.4% -3.8% -3.1%

Rel. to FTSE IT

-13.3% 6.0% 27.8%

Source: Factset

Graph area Absolute/Relative 12 M

Source: Factset

Marco Cristofori Senior Analyst [email protected] Tel. +39 0277814393

Website: www.ubibanca.com/equity-research

Financials priced on 27 Ju

2015 2016E

Revenues (EURm) 9.53 12.37

EBITDA (EURm) 2.39 3.02

EBITDA margin (%) 25.1% 24.4%

EBIT (EURm) 1.24 1.78

EPS (EUR) 0.23 0.38

CFPS (EUR) 0.38 0.45

DPS (EUR) 0.09 0.12 Source: Company Data, UBI Banca Estimates

TECH-VALUEBuy

MARKET PRICE: EUR2.80 TARGET PRICE:

Solidity and growth

Tech-Value is the only listed company active in the PLM (Product Lifecycle Management) providing IT and consulting servengineering-intensive manufacturing companies. The company has a customer base of some large clients (in transportation, automotive, machinery) that outsource their IT systems in product development to Tech-Value. These clients provide the bulk of revenues (68% in 2015) and EBITDA (almost Value. Form this solid base the company is now expanding into the area of small clients (less than 50 workstations) providing innovative IT solutions to implement industry 4.0 challenges through a partnership with Siemens and the recent acquisition of iSolutionDesign. We believe this new engine of growth will enable Tech-Value to increase its revenues to EUR14.3 million in 2018 (from EUR9.5 million in 2015) with an EBITDA margin >24%, permitting an attractive DPS (with a 4-5% yield based on our estimates) and building a solid financial structure. We fail to understand the current undervaluation of the company, which is trading at 3.7x 2016 EV/EBITDA and 7.discount to peers. We initiate coverage of Techrating and a target price of EUR4.33 per share.

> Founded twenty years ago by Mr. Radice, who still manages the

company, Tech-Value has built a solid business offering IT solutions and IT outsourcing to engineering-intensive companies. The company went public in 2014 (at EUR4.15 per share, raising EUR1.7 million) in order to finance external growth, which was achieved with the recent acquisition of iSolutionDesign. The management continues to target further expansion in complementary technologies and for this reason has announced a new rights issue that will take place by the end of 2016 and should raise up to EUR1.5 million (details are yet to be decided).

> The reference market of Tech-Value is growing rapidly and should accelerate further with Industry 4.0 developments (Big Data, IoT, PLM, Data security, Process reengineering, Cloud).

> We forecast 14% CAGR in the value of production in the next three years and an EBITDA margin that should exceed 24%, giving a bottom line of>EUR1.4 million in 2018. Net debt should fall to EUR1.1 million without taking account of the forthcoming rights issue or any new acquisitions.

> Our EUR4.33 per share target price is based on the average of a DCF valuation (EUR6.24 per share) and a relative valuation (EUR6.share), applying a 30% liquidity discount, and offers

July 2016

2017E 2018E

13.34 14.25

3.20 3.47

24.0% 24.4%

1.92 2.15

0.41 0.47

0.68 0.73

0.14 0.16 Estimates

Ratios priced on

2015 2016E

P/E(x) 12.8

P/CF(x) 5.0

P/BV(x) 1.7

Dividend Yield 3.1% 4.3%

EV/EBITDA(x) 4.2

Debt/Equity (x) 0.0

Debt/EBITDA (x) 0.1 Source: Company Data, UBI Banca

1

VALUE

TARGET PRICE: EUR4.33

Solidity and growth is the only listed company active in the PLM (Product

Lifecycle Management) providing IT and consulting services to intensive manufacturing companies. The company

has a customer base of some large clients (in transportation, automotive, machinery) that outsource their IT systems in product

. These clients provide the bulk of revenues (68% in 2015) and EBITDA (almost 90%) to Tech-

. Form this solid base the company is now expanding into the area of small clients (less than 50 workstations) providing innovative IT solutions to implement industry 4.0 challenges

tnership with Siemens and the recent acquisition of iSolutionDesign. We believe this new engine of growth will enable

to increase its revenues to EUR14.3 million in 2018 (from EUR9.5 million in 2015) with an EBITDA margin >24%,

5% yield based on our estimates) and building a solid financial structure. We fail to understand the current undervaluation of the company, which is

x 2016 EV/EBITDA and 7.3x P/E, or at >50% Tech-Value with a Buy

rating and a target price of EUR4.33 per share.

Founded twenty years ago by Mr. Radice, who still manages the has built a solid business offering IT solutions and

ive companies. The company went public in 2014 (at EUR4.15 per share, raising EUR1.7 million) in order to finance external growth, which was achieved with the recent acquisition of iSolutionDesign. The management continues to target further

mplementary technologies and for this reason has announced a new rights issue that will take place by the end of 2016 and should raise up to EUR1.5 million (details are yet to be decided).

is growing rapidly and should ccelerate further with Industry 4.0 developments (Big Data, IoT, PLM,

We forecast 14% CAGR in the value of production in the next three years and an EBITDA margin that should exceed 24%, giving a bottom line of >EUR1.4 million in 2018. Net debt should fall to EUR1.1 million without taking account of the forthcoming rights issue or any new acquisitions.

per share target price is based on the average of a DCF e valuation (EUR6.13 per

share), applying a 30% liquidity discount, and offers >50% upside.

priced on 27 July 2016 2016E 2017E 2018E

7.3 6.8 6.0

3.7 3.5 3.2

1.4 1.2 1.1

4.3% 5.0% 5.7%

3.7 3.5 3.1

0.3 0.2 0.1

0.6 0.5 0.3 UBI Banca Estimates

Tech-Value 28 July 2016

2

Key Financials

(EURm) 2015 2016E 2017E 2018E

Revenues 9.53 12.37 13.34 14.25

EBITDA 2.39 3.02 3.20 3.47

EBIT 1.24 1.78 1.92 2.15

NOPAT 0.83 1.20 1.29 1.44

Free Cash Flow 0.00 -1.39 0.54 0.99

Net Capital Employed 5.31 7.89 8.62 9.07

Shareholders’ Equity 5.15 6.06 6.97 7.97

Net Financial Position 0.16 1.83 1.66 1.10

Source: Company data, UBI Banca estimates

Key Profitability Drivers

2015 2016E 2017E 2018E

Net Debt/Ebitda (x) 0.1 0.6 0.5 0.3

Net Debt/Equity (x) 0.0 0.3 0.2 0.1

Interest Coverage (%) 29.5 42.5 45.7 51.3

Free Cash Flow Yield (%) 0.0% nm 6.3% 11.4%

ROE (%) 13.6% 19.6% 18.3% 18.0%

ROI (%) 13.3% 15.3% 13.5% 14.3%

ROCE (%) 16.2% 18.1% 15.6% 16.3%


Key Valuation Ratios

2015 2016E 2017E 2018E

P/E (x) 12.8 7.3 6.8 6.0

P/BV (x) 1.7 1.4 1.2 1.1

P/CF (x) 5.0 3.7 3.5 3.2

Dividend Yield (%) 3.1% 4.3% 5.0% 5.7%

EV/Sales (x) 1.0 0.9 0.8 0.7

EV/EBITDA (x) 4.2 3.7 3.5 3.1

EV/EBIT (x) 8.0 6.3 5.8 4.9

EV/CE (x) 1.9 1.4 1.3 1.2


Key Value Drivers

(%) 2015 2016E 2017E 2018E

Payout 39.1% 31.2% 33.9% 34.4%

NWC/Sales 31.5% 32.2% 32.7% 33.6%

Capex/Sales 12.1% 22.4% 11.6% 8.9%



3

Investment Case Tech-Value is a provider of IT and consulting services to the engineering areas of manufacturing firms. It is focused on Italy but also operates worldwide (around 8% of revenues are from outside Italy) currently providing remote service support in more than 60 locations to a total of 6.000 CAD workstations. The customer base is wide (more than 400 active clients, even if their identity is undisclosed) but concentrated in the Transportation (37% of sales), Machinery (38%) and Automotive (12%) sectors. The company has 85 resources and typically invests around 5% of sales in R&D (fully charged to the P&L). It has had sound fundamentals in the past five years (2010-15 CAGR in sales of 6.1%, average EBITDA margin of >22%, a positive bottom line every year, a dividend distribution offering attractive yields, minimal net debt with 3.2% gearing at Dec-15). In the past few months, the company has entered an expansion phase: firstly, through a partnership with Prime Team (a consulting PLM, or Product Lifecycle Management, company) it became a partner of Siemens Technology and distributes Siemens products to SMB clients (with an increase of >58% of revenues in the SMB business unit in 2015); secondly, it acquired iSolutionDesign (currently it has an 80% stake that is expected to rise to 100% in Mar-17), a company specialised in PLM applications based on Siemens technology (mostly augmented reality), which should give further significant growth in the SMB business unit (we estimate additional sales of around EUR2 million or 21% of 2015 revenues). Moreover, Tech-Value is the main shareholder (with a 22% stake) in Solve.it, a company with >EUR8 million sales, 120 employees and >10% EBITDA margin, specialised in help-desks and technical workstation services. As a result, we believe Tech-Value should continue to grow significantly in the next three years; we forecast a CAGR in sales of >14% up to 2018 with an EBITDA margin of around 24-25% (slightly below the level of 2015 due to the lower margin of iSolutionDesign) that should lead to a bottom line of EUR1.4 million in 2018. It should maintain its sound financial structure despite the recent acquisition (EUR1.9 million total investment). Growth could accelerate further as a result of money raised in the recently announced share capital increase (for EUR1.5 million to be held by the end of the year; the issue price is still to be announced) that could be invested in further M&A deals (according to the management, Tech-Value could finalise two or three acquisitions reaching turnover of EUR25-30 million and EBITDA of EUR4-5 million in the next two years). Our investment case is based on what we perceive to be the current undervaluation of the shares. Based on our estimates, Tech-Value is trading at 3.7x 2016 EV/EBITDA and 7.3x P/E, multiples well below those of other IT service companies (our peer sample is trading at an average of 8.1x EV/EBITDA and 16.8x P/E) that do not reflect the solid performance of the company, even applying a 30% discount to reflect its small market capitalisation and low liquidity. In addition, the successful development of Tech-Value (through expanding its client base) in a fast growing IT niche makes the company an attractive target for large IT service companies (such as Siemens). Our EUR4.33 per share target price, which offers >50% upside, is based on the average of a DCF valuation (EUR6.24 per share) and a relative valuation (EUR6.13 per share) applying a 30% liquidity discount. Based on our conservative 2016-18 estimates, at our target price the share would trade at 5.0x 2017 EV/EBITDA and 10.5x P/E. In our view, the main risk to the investment case is an unsuccessful right issue that could jeopardize M&A potential and reducing long term prospects.


4

Company profile Tech-Value was founded in 1996 as an IT service company for the outsourcing of IT systems by Mr. Radice, an engineer with a long experience in the IT sector having worked for several IT companies. He still manages the company. Tech-Value is one of the leading companies in IT and consulting services in the engineering area for manufacturing firms that wish to outsource their IT management. In particular, Tech-Value supplies four main services:

� TWS or management of technical workstations, which includes software and hardware procurement (generally through a rental contract), software and hardware installation and configuration, incident management and the support of a multi-language help desk. Tech-Value installs >1,000 workstations per annum and offers remote support to >6.000 workstations;

� HPC, or management of high performance computer servers and clusters, which includes consulting and support services for setting up an efficient and secure operating system and middleware. It currently runs >550 servers;

� AMS, or application management services, which are an extension of TWS integrating and optimising CAD and PDM software in the client’s operating system;

� Provider of PLM software, or Product Lifecycle Management, distributing Siemens products.

Although restricted to product development space, the services provided by Tech-Value are supplied to a wide customer base (370 in 2015) ranging from machinery producers (38% of revenues), transportation (37%), automotive (12%), aerospace & defence (4%) and other industrial manufacturers. Tech-Value is concentrated in Italy (92% of revenues in 2015) but is also present abroad, supplying remote services to more than 60 locations all over the world. The company has 85 employees distributed in four offices (in Genoa, Milan, Turin and Fara Vicentino).

Figure 1 – Short history of the company

1996 Starting IT services for the outsourcing of corporate IT systems

1997 Hiring of 15 people from Italcad

1999 “Tech-Value” adopted as company’s name

2004-07 Expansion outside Italy in France, Germany and the Czech Republic

2007-09 Development of small and medium business clients

2012 Acquisition of the business unit supporting Microsoft Exchange technology

2013 Acquisition of 20% of Solve.it for EUR0.3 million

Aug-2014 Listing on the Italian Stock Exchange AIM market at EUR4.15 (EUR1.7 million cash-in)

Apr-2015 Entrance in Naval sector and accelerated growth of SMB BU

Jan-2016 “Top Partner” of Siemens for Italy

Apr-2016 Approval of capital increase for up to EUR1.5 million by the end of 2016

July-2016 Acquisition of 80% of iSolutionDesign (PLM applications) for EUR1.6 million from Desys

July-2016 Desys becomes a Tech-Value shareholder with a 1.6% stake acquired at EUR4 per share

Source: Company data


5

The company is dived into two business units:

� Large Accounts: these are clients with more than 50 workstations. Tech-

Value supplies an integrated solution to these clients that includes TWS, HPC and AMS services. Large accounts are typically large companies with a long lasting relationship. This business unit currently has around 20 customers with >EUR0.3 million of average sales per client. These represented nearly 68% of 2015 revenues and generated attractive profitability (we estimate >30% EBITDA margin);

� SMB Clients: this business unit offers IT services to clients with less than 50 workstations. Tech-Value acts as a system integrator selling PLM and CAD/CAM software, mostly coming from its partnership with Siemens. The approximately 350 SMB clients represented 32% of consolidated sales in 2015 (providing less than EUR10k of average sales per client) with low profitability due to the lack of critical mass. This situation should change through the recent acquisition of iSolutionDesign, a company specialized in PLM applications based on Siemens technology, which should add around EUR2 million in sales and help Tech-Value reach the critical mass necessary to generate a significant improvement in profitability in this business unit.

Figure 2 – Business Units and services provided

Source: Company Data

Tech-Value also controls 22% of Solve.it, a company with >EUR8 million sales (not consolidated), 120 employees, >10% EBITDA margin, and net profit of EUR0.4 million. It specialises in help-desks and technical workstation services for large companies (mostly manufacturing and finance). The investment of Tech-Value in Solve.it (EUR0.3 million at Dec-15) was aimed at creating commercial synergies and we do not rule out a possible merger between the two companies. In 2015, Tech-Value sold its stake in Zeropiu (with a capital loss of EUR0.1 million), a company providing IT security services. It no longer has any business relations with Zeropiu.


6

Shareholder structure Tech-Value was listed on the Milan Stock Exchange, in the AIM segment, in

August 2014 at EUR4.15 per share raising EUR1.7 million of fresh financial resources. The company is controlled and managed by the founder Mr. Elio Radice, who controls 70.06% of Tech-Value. After the founder, the second largest shareholder is Mr. Marco Mortali who is the technical director of the company. The third largest shareholder is Desys (the company that sold iSolutionDesign to Tech-Value), which entered as a shareholder in Jul-16 with a 1.62% stake acquired at EUR4.0 per share (43% above the current market price) through a reserved rights issue that increased the number of outstanding shares to 3.09 million. Tech-Value owns 0.05 million treasury shares, equal to 1.52% of the share capital.

The board of directors is composed of five members of which one is independent (Mr. Ivano Traina, who is employed in UBI Banca); the total remuneration of the board is EUR0.15 million p.a.

In April, the company approved a rights issue, which should take place by the end of 2016, and should rise up to EUR1.5 million, of which EUR1.3 million could be subscribed by anchor investors, according to the management. The issue price is still to be decided and we cannot exclude that the issue price could be above the current market price.

Figure 3 – Shareholder structure

Source: UBI Banca estimates

At the time of the IPO, Tech-Value issued 3.04 million 2014-17 warrants expiring

on 30 June 2017. These warrants have can be exchanged for shares on a 3:1 basis and have a strike price of EUR4.77 per share; they are currently strongly out of the money. Therefore, we do not expect any warrants to be converted (there was no conversion in the first and the second conversion periods in June 2015 and 2016).

Elio Radice;

70,06%

Marco Mortali;

7,42%

Deasys; 1,62%

Treasury

shares; 1,52%

Free Float;

19,39%


7

Strategy Tech-Value has already reached critical mass for large accounts (companies with

more than 50 technical workstations) and we believe it could prove difficult to increase significantly revenues coming from big clients without broadening the range of IT services provided. In addition, the progressive penetration of the Industry 4.0 concept, a megatrend that should completely change manufacturing industry in coming years, offers an unique opportunity to Tech-Value to expand rapidly in the segment of small-medium companies (6,000 firms in Italy and 30,000 firms in Europe, according to Tech-Value’s management).

For these reasons, the company’s strategy may be summarised as follows:

� Potential acquisitions: Tech-Value already acquired iSolutionDesign in order

to exploit Siemens technology on a wider client base (200 new clients, all small-medium size) but we believe this was just an initial step. The company is targeting two to three further acquisitions in the next 18-24 months, leveraging on the upcoming right issue (EUR1.5 million) and aims to reach EUR25-30 million of revenues, thus tripling its size. The EBITDA margin could be diluted: the official target for EBITDA is EUR4-5 million in the long-term with a margin of around 17% compared to the 25.1% reported in 2015. Following the capital increase, we estimate the company will have fire power of around EUR5.7 million that could be invested in M&A deals while maintaining gearing at 50%. In addition, the company could use a share swap (or a mix of cash and shares) that could significantly increase the number and size of potential acquisitions;

� Product range expansion: Tech-Value aims to complete its service offer and enter new niches offer high profitability while increasing complementary applications, in particular, those related to Industry 4.0 (PLM implementation, Big Data and Internet of Things, Reengineering of manufacturing process, Virtual Desktop Infrastructure and augmented reality, Cloud services for manufacturing companies, Data security). In addition, Tech-Value aims to extend its geographical coverage (it currently has approximately 8% of revenues outside Italy) with the current product/service portfolio in Italy (mostly in Emilia Romagna where it has a limited presence) and abroad (in Spain, Germany and the UK);

� New clients: Tech-Value will continue to bid for new contracts and/or to expand existing ones. In particular, the management aims to increase the number of contracts with small-medium size companies, providing remote services that should, in our view, provide higher profitability once critical mass has been reached. A wider client base would also help reduce the volatility of revenues. The most ambitious target is to expand in the aerospace & defence segment, which now accounts for around 4% of revenues. Once a foothold has been gained in this sector, the revenue flow is continuous and profitability is usually assured for many years.

The main risk we see in this strategy is the difficulty of matching rapid growth with the current management structure. In our view, this is a critical issue that the company has still to face.


8

Reference market The information technology industry (IT), encompassing hardware, software, and

services is estimated to be worth nearly USD1,600 billion worldwide in 2015 and is expected to grow by 4.9% this year (source: UBI Banca using CompTIA data, Dec-15) with Italy, by far the most important market for Tech-Value, at around EUR16.2 billion, of which EUR5.9 billion related to IT services (source: UBI Banca using Cerved data, Oct-15). In this scenario, outsourcing of IT services is estimated to be worth around EUR2.2 billion globally while, according to the management of Tech-Value, around EUR400 million for engineering-intensive manufacturing companies and with low penetration in Italy compared to other European countries. However, the scenario is changing thanks to progressive adoption of the Industry 4.0 model or Smart manufacturing. This business model is based on the use of cyber-physical systems and is the new frontier in manufacturing, driven by new technologies such as Big Data (a market that has grown at a CAGR of 40% in 2012-15 according to Wikibon), cloud computing, Internet of Things, autonomous robots, augmented reality, system integration, Cyber-security, and 3D printing applications. Within the modular structured Smart Factories of Industry 4.0, cyber-physical systems monitor physical processes, create a virtual copy of the physical world and make decentralized decisions. Over the Internet of Things, cyber-physical systems communicate and cooperate with each other and with humans in real time and, via the Internet of Services, both internal and cross-organizational services are offered and utilized by participants of the value chain. The basis is the availability of all relevant information in real time by networking all instances involved in creating added value, as well as the ability to derive an optimal added-value stream from the data at any time.

Figure 4 – Industry 4.0

Source: Wikipedia

Clearly, the “enabling element” for this new industrial revolution is Information

Technology, particularly for engineering-intensive companies that will face a strong increase in the degree of complexity and a large number of new challenges such as IT security issues, the need to avoid any IT snags that would cause expensive production outages, the need to protect industrial knowhow, the threat of redundancy of the corporate IT department and the lack of adequate skill-sets to expedite the march towards the fourth industrial revolution. Leading companies in the manufacturing industry have expanded their PLM methods and systems in recent years to ensure increased coverage of the product lifecycle and stronger integration of processes along the entire value-added chain, but small size companies are still in an early stage.


9

For these reasons we believe that more and more companies, particularly of small and medium size, will require specialized IT services such as those provide by Tech-Value. Therefore, the potential Italian market of 6,000 companies identified by Tech-Value management could be conservative.

SWOT Analysis

Figure 5 - SWOT Analysis

Strengths Weaknesses

Strong knowledge in Product Lifecycle Management with focus on engineering area

Unrecognized brand and tiny size

Fast growing addressable market Low visibility on existing and future contracts and short average duration (around one year). However, this weakness is mitigated by a high degree of loyalty

Solid partnership with Siemens

Increasing net operating working capital (from 20.7% of VoP in 2012 to 31.5% in 2015) absorbs higher financial resources

Wide customer base No structured management

Opportunities Threats

Further expansion abroad Upcoming capital increase could jeopardize share performance

Tech-Value could be an attractive target for large IT service companies

Macroeconomic factors could reduce IT investments

IT security and cloud. Potential benefits from the Patent Box

Increasing competition

M&A deals and potential merger with Solve.it



10

2015 results

2015 was a positive year for Tech-Value: value of production increased by 17%, with a sharp growth in the SMB clients business unti (+58%), which represented 32.3% of consolidated VoP compared to 23.9% in 2014. Profitability strongly increased even if we highlight that 2014 was negatively impacted by listing costs of EUR0.58 million. Stripping out these costs, the 2014 EBITDA margin would have been 26% compared with the margin of 25.2% in 2015, which was impacted by the higher weight of the SMB clients business unit, which generates a lower margin than that of the Large accounts division.

Figure 6 - 2015 consolidated results

(EURm) 2014A 2015A % Chg.

Large accounts 6.18 6.45 4.4%

SMB clients 1.95 3.08 58.1%

Sales total 8.15 9.53 17.0%

EBITDA 1.54 2.39 55.3%

% margin 18.9% 25.1%

EBIT 0.62 1.24 101.6%

Pre tax 0.29 1.01 254.0%

Net result 0.16 0.70 325.6%

Net debt/(cash) 0.46 0.17 -64.1%


After D&A of EUR1.2 million, EBIT exceeded EUR1.2 million, which gave a pre-tax result of EUR1.0 million. The net profit was EUR0.7 million, which allowed a DPS of EUR0.09 (vs. EUR0.02 distributed in 2014) offering an attractive yield >3%.

Figure 7 – 1H and 2H consolidated results

While 2H14 was somewhat weak, mostly due to listing costs, there was a strong recovery in profitability in 2H15 despite the slowdown in the Large accounts division.

(EURm) 1H14A 1H15A % Chg. 2H14A 2H15A % Chg.

Large accounts 2.75 3.25 18.4% 3.43 3.31 -3.3%

SMB clients 0.87 1.75 101.8% 1.08 1.67 54.7%

Sales total 3.62 5.00 38.4% 4.53 4.99 10.1%

EBITDA 0.82 1.30 57.9% 0.72 1.25 74.5%

% margin 22.8% 26.0% 15.8% 25.0%

EBIT 0.31 0.63 102.8% 0.30 0.71 134.9%

Pre tax 0.30 0.61 105.6% -0.01 0.58 Nm

Net result 0.17 0.40 140.6% 0.00 0.43 Nm

Net debt/(cash) 1.49 0.09 -94.0% 0.46 0.17 -64.1%


Net debt decreased to EUR0.2 million (vs. EUR0.5 million at Dec-14) thanks to

sound cash generation and lower capex. Operating NWC reached EUR3.0 million (or 31.5% of value of production), with trade receivables at 184 days, trade payables at 48 days and no inventories. Fixed assets totalled over EUR3.5 million, broadly in line with 2014 Total net invested capital was EUR6.5 million (compared with EUR6.0 million in 2014), giving a ROI of 13.3%, well above the 7.7% reported in 2014. Capital turnover improved to 1.46x vs. 1.35x in 2014.


11

Financial projections It is difficult to give reliable estimates for Tech-Value as the company does not

provide a breakdown of product revenues and its contracts have a short duration (around one year). The last available data refer to 2013, pre-IPO, when services revenues reached 57% of total revenues, renting sales 19%, maintenance 12%, revenues from software reselling 11% and other revenues 1%. In addition, the PLM and IT services market is growing rapidly but remains volatile and somewhat unpredictable. In making our estimates we considered different trends for the Tech-Value business units: Large accounts: we estimate moderate sales growth (2.2% CAGR up to 2018) due to an increase in the number of customers (from 19 to 22) while average sales per client should decrease slightly but remain above EUR300k per client. The weight of Large accounts on total sales is expected to decline from 68% in 2015 to 48% in 2018; SMB Clients: assuming consolidation of iSolutionDesign for the full year in 2016, we expect strong sales growth (+47%) driven by new clients so that total clients should reach 525 (from around 350 in 2015) and also by an increase in average sales per client. In 2017-18, we except additional new customers that will bring the total to over 575 in 2018, leading to EUR7.4 million of revenues, or 52% of total sales (vs. 32% in 2015). Overall, we expect organic growth of around 12% in 2016 (+30% including iSolutionDesign). For 2017-18, we have assumed organic growth of >7%, which should allow the company to exceed EUR15 million of revenues in 2018.

Figure 8 – Sales trend and forecast by business unit

(EURm, EUR000) 2013A 2014A 2015A 2016E 2017E 2018E

Large accounts

Sales 5.44 6.18 6.45 6.60 6.75 6.88

% growth -1.7% 13.5% 4.4% 2.4% 2.2% 2.0%

% weight 75.8% 75.8% 67.7% 53.4% 50.6% 48.3%

Avg. Client number 18 18 19 20 21 22

Sales per client (000) 302 343 339 330 321 313

% growth 13.5% -1.1% -2.7% -2.7% -2.6%

SMB clients

Sales 1.72 1.95 3.08 5.77 6.59 7.37

% growth -12.5% 13.5% 58.1% 87.2% 14.2% 11.8%

% weight 23.9% 23.9% 32.3% 46.6% 49.4% 51.7%

Avg. Client number 320 330 350 525 550 575

Sales per client (000) 5 6 9 11 12 13

% growth 10.1% 49.0% 24.8% 9.0% 7.0%

Consolidated revenues

Total Sales 7.16 8.13 9.53 12.37 13.34 14.25

% growth -4.2% 13.5% 17.0% 29.8% 7.8% 6.9%

Total client number 338 348 369 545 571 597

Sales per client (000) 21.24 23.41 25.82 22.70 23.36 23.87

% growth 10.2% 10.3% -12.1% 2.9% 2.2%



12

The EBITDA margin is expected to decline slightly this year due to the different sales mix (the SMB clients business unit has lower profitability on average compared to the Large accounts division) and the consolidation of iSolutionDesign, remaining broadly stable in 2017-18 at around 24%, a number not far from the historical average of Tech-Value and well above the average of the Italian IT industry. Clearly, the lower profitability of the SMB clients division would improve with greater critical mass as higher revenues would be spread over a stable fixed cost base.

Figure 9 – Revenues, EBIT and EBITDA margin trend


After D&A costs of around EUR1.3 million in 2016-18, operating profit should reach EUR1.8 million this year and EUR2.1 million in 2018.

Below the operating line, Tech-Value is expected to report low financial charges given its modest financial debt. The tax rate should decline to around 32% due to the changes in IRAP that makes labour costs deductable for permanent employees (previously equal to 3.9% of the pre-tax profit plus the labour costs). As a result, the bottom line is expected to reach EUR1.2 million in 2016, EUR1.3 million in 2017 and be close to EUR1.5 million in 2018. Assuming a pay out ratio of slightly above 30%, we estimate a DPS of EUR0.12 in 2016, EUR0.14 in 2017 and EUR0.16 in 2018, with a dividend yield of over 4% in 2016 growing to 5.7% in 2018 at the current market price.

Thanks to a sound operating cash flow generation, Tech-Value reduced its net

debt to EUR0.2 million at Dec-15, but we expect it to increase to EUR1.8 million this year due to the acquisition of iSolutionDesign (EUR1.58 million in 2016 out of a total investment of maximum EUR1.9 million). In coming years, operating cash flow generation should improve further while capex should remain at around EUR1.5 million p.a. leading to a progressive reduction in net debt (expected at EUR1.1 million at Dec-18) without including the proceeds from the announced rights issue (EUR1.5 million) or any potential acquisitions.

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13

Figure 10 – Financial structure (EURm) Net debt should grow this year due to the acquisition of iSolutionDesign and decline in 2017-18.


Figure 11 – Net fixed assets and operating NWC NWC is expected to remain above 30% of sales while net fixed assets should be above EUR5 million due to the acquisition of iSolutionDesign.


Tech-Value’s operating net working capital has grown significantly in the past two years due to higher trade receivables days (that exceeded 190 days in 2014) and we expect it to increase slightly in coming years (to 34% of sales in 2018) due to favourable payment terms for new clients. Net fixed assets, including the acquisition of iSolutionDesign in 2016, will increase to over 40% of the value of production. This should result in average capital turnover (sales / invested capital) of 1.46x expected for 2016 (vs. 1.46x in 2015), a figure that should remain broadly stable in 2017-18. In 2015, ROCE was 12.9% (7% in 2014 when it was negatively impacted by listing costs) and we believe it should increase slightly in 2016-18 to reach 14.2%. Clearly, ROCE would remain well above the WACC (estimated at 5.04%) making the company a strong value creator.

Figure 12 – NOPAT margin, Capital Turnover and ROCE trend The reduction in the capital turnover, caused by the acquisition of iSolutionDesign, should be more than offset by an increase in the NOPAT margin leading to an improvement in ROCE.


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Net Equity Net Debt Gearing Net debt /EBITDA

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2011 2012 2013 2014 2015 2016E 2017E 2018E

Nopat margin (LH) ROCE (LH) Capital turnover (RH)


14

Valuation

Our target price of EUR4.33 per share is based on the average of a DCF analysis (50% weight) and a relative valuation (50% weight), after having applied a 30% liquidity discount. At the target price, Tech-Value shares would trade at 5.0x 2017 EV/EBITDA and 10.5x P/E, multiples that are well below the average multiples of our peer sample (7.1x and 14.7x respectively). Our valuation does not include the 22% stake in Solve.it, which is not consolidated but has a book value of EUR0.3 million or EUR0.10 per share.

Figure 13 – Valuation summary

We applied a 30% discount to our fair value to reflect the low liquidity of the shares and the modest size of the company compared to peers

(EUR) Weight

DCF Valuation 6.24 50.0%

Relative Valuation 6.13 50.0%

Fair value 6.18

Liquidity discount 30% (1.86)

Target price 4.33

Current price 2.80

Potential upside 54.6%


DCF To calculate the company’s WACC, we used the following assumptions:

� a risk-free rate of 2.0%, which is our long-term assumption for the interest rate

on Italian bonds (2% inflation target of ECB);

� a market risk premium of 4.5%;

� a levered beta of 0.91 (0.73 unlevered), based on the average beta of Computer Services as calculated by Damodaran (source: damodaran.com Jan-16);

� a terminal growth rate of 1% and an operating margin of 13% at terminal value, which is in line with 2015;

� A debt/equity ratio of 29/71, which was the figure at December 2015 plus EUR1.9 million related to the cost for acquiring iSolutionDesign.

Figure 14 - WACC and embedded DCF assumptions

WACC assumptions Embedded DCF assumptions

Risk-free rate 2.0% Revenue CAGR 2016-2024 (%) 3.6%

Debt spread (%) 1.5% Target EBIT margin 2024 (%) 13.0%

Cost of debt [net] (%) 2.3% D&A. on sales (avg. 2016-2024) (%) 9.7%

Market risk premium (%) 4.5% Capex on sales (avg. 2016-2024) (%) 11.3%

Beta (x) 0.91

Cost of equity (%) 6.1%

Weight of Debt 29%

Weight of Equity 71%

WACC 5.04%



15

We estimate a WACC of 5.04%, obtaining a theoretical value of EUR6.24 per share.

Figure 15 – DCF Valuation

Our DCF valuation implies an EV/EBITDA of 5.8x at terminal value

Valuation (EUR m) % Weight Per share (EUR)

Sum of PV 2016-24 FCF 4.6 21% 1.49

Terminal value 17.6 79% 5.69

Total Enterprise value 22.1 100% 7.18

- minorities 0.0 0.00

- Pension Provision (0.8) (0.27)

- Net cash (debt) (2.1) (0.67)

Total Equity value 19.3 6.24

Number of shares outstanding (m) 3.1

Fair value per share (EUR) 6.24


Our valuation shows limited sensitivity to the terminal growth rate and WACC although a lower beta and/or stronger growth would increase our DCF fair value.

Figure 16 – Sensitivity analysis

g / WACC 0.00% 0.50% 1.00% 1.50% 2.00%

6.50% 3.92 4.23 4.60 5.04 5.58

6.00% 4.26 4.62 5.06 5.59 6.26

5.50% 4.64 5.08 5.61 6.28 7.14

5.04% 5.07 5.59 6.24 7.08 8.19

4.50% 5.65 6.31 7.16 8.29 9.88

4.00% 6.34 7.18 8.31 9.88 12.25

3.50% 7.20 8.32 9.89 12.24 16.16


Relative valuation Tech-Value has no pure comparable peers that are listed, although there are

several companies listed on the Italian stock market and abroad that supply IT services and applications for engineering departments. Our sample is composed of: 1) Altran Technology, a leading provider of technological innovation consulting and engineering services worldwide and listed in France, 2) Addnode Group, a Swedish provider of PLM applications, 3) Atos SE, an international information technology service company providing managed services, system integration, consulting cloud and enterprise software, with global headquarter in France, 4) Cap Gemini, which is the largest company in our sample with nearly EUR12 billion of sales in consulting outsourcing and professional services, 5) CENIT, a German company which develops PLM software, 6) Mensch und Maschine Software, a specialist in the CAD/CAM world, and, 7) Syntel, a leading US provider of IT and knowledge process outsourcing services. We also included five Italian companies: TXT e-solutions, Reply, SESA and Esprinet, all active in the Italian IT market.


16

Based on a relative 2016-17 P/E, Tech-Value would be valued at EUR6.26 per share while on EV/EBITDA it would be EUR7.14 per share and on EV/EBIT EUR4.97. The average of these three valuations gives EUR6.13 per share.

Figure 17 – Peer comparison and valuation based on multiples priced on 27 July 2016 Based on a simple average of diversified peers, Tech-Value has a valuation of EUR6.13 per share. We highlight that the company is currently trading at an average >50% discount to the EV/EBITDA and P/E of our peer sample.

Company Market Cap P/E EV/EBITDA EV/Sales

(EURm) 2016E 2017E 2016E 2017E 2016E 2017E

Altran Technologies 2.252 16.3 x 14.5 x 10.1 x 8.7 x 11.3 x 9.7 x

Addnode Group 185 20.0 x 17.1 x 9.8 x 8.5 x 15.3 x 13.3 x

Atos SE 8.999 12.3 x 11.4 x 5.9 x 5.1 x 7.9 x 6.9 x

Cap Gemini 14.231 16.0 x 14.6 x 9.2 x 8.2 x 11.1 x 9.7 x

CENIT 163 20.9 x 18.7 x 9.7 x 9.0 x 11.5 x 10.6 x

Mensch und Maschine Software 233 30.0 x 21.8 x

Syntel 3.477 17.2 x 16.3 x 10.0 x 8.6 x 10.7 x 9.2 x

TXT e-solutions 98 17.1 x 14.6 x 12.8 x 10.7 x 14.5 x 11.8 x

Reply 1.192 18.3 x 16.3 x 10.4 x 8.9 x 11.5 x 9.9 x

SESA 232 8.3 x 7.7 x 3.2 x 2.8 x 3.9 x 3.3 x

Esprinet 293 9.5 x 8.2 x 2.8 x 2.2 x 2.9 x 2.2 x

Engineering

15.8 x 15.1 x 5.7 x 5.0 x 7.8 x 6.9 x

Average

16.8 x 14.7 x 8.1 x 7.1 x 9.9 x 8.5 x

Median

16.7 x 14.8 x 9.7 x 8.5 x 11.1 x 9.7 x

Tech-Value market multiples 9 7.3 x 6.8 x 3.7 x 3.5 x 6.3 x 5.8 x

Premium (discount) to Average -56.6% -53.9% -54.1% -50.5% -35.7% -31.7%

Tech-Value valuation based on multiples

6.45 6.08 7.51 6.77 5.19 4.76

Source: Factset, UBI Banca estimates

At our EUR4.33 per share target price, Tech-Value would trade at 11.3x 2016 P/E,

which is still below the average multiple of our peer sample (16.8x) and at 5.3x EV/EBITDA (vs. an average of 8.1x).

Figure 18 – Implicit multiples based on our EUR4.33 target price

(x) 2016 2017 2018

P/E 11.3 x 10.5 x 9.3 x

EV/EBITDA 5.3 x 5.0 x 4.4 x

EV/EBIT 9.0 x 8.3 x 7.1 x

EV/Sales 1.3 x 1.2 x 1.1 x

P/BV 2.2 x 1.9 x 1.7 x

P/CF 9.7 x 6.4 x 5.9 x

EV/ Capital employed 2.0 x 1.8 x 1.7 x



17

Income Statement

(EURm) 2015 2016E 2017E 2018E

Net Revenues 9.53 12.37 13.34 14.25

EBITDA 2.39 3.02 3.20 3.47

EBITDA margin 25.1% 24.4% 24.0% 24.4%

EBIT 1.24 1.78 1.92 2.15

EBIT margin 13.0% 14.4% 14.4% 15.1%

Net financial income /expense -0.04 -0.04 -0.04 -0.04

Associates & Others -0.19 0.00 0.00 0.00

Profit before taxes 1.01 1.74 1.88 2.11

Taxes -0.31 -0.56 -0.60 -0.68

Minorities & discontinuing ops 0.00 0.00 0.00 0.00

Net Income 0.70 1.18 1.28 1.44


Balance Sheet

(EURm) 2015 2016E 2017E 2018E

Net working capital 3.00 3.98 4.36 4.78

Net Fixed assets 3.52 5.14 5.50 5.55

M/L term funds -1.21 -1.23 -1.24 -1.26

Capital employed 5.31 7.89 8.62 9.07

Shareholders' equity 5.15 6.06 6.97 7.97

Minorities 0.00 0.00 0.00 0.00

Shareholders' funds 5.15 6.06 6.97 7.97

Net financial debt/(cash) 0.16 1.83 1.66 1.10


Cash Flow Statement

(EURm) 2015 2016E 2017E 2018E

NFP Beginning of Period 0.46 0.16 1.83 1.66

Group Net Profit 0.70 1.18 1.28 1.44

Minorities 0.00 0.00 0.00 0.00

D&A 1.08 1.17 1.20 1.24

Change in Funds & TFR 0.00 0.00 0.00 0.00

Gross Cash Flow 1.78 2.35 2.48 2.68

Change In Working Capital -0.62 -0.98 -0.38 -0.42

Other 0.00 0.00 0.00 0.00

Operating Cash Flow 1.16 1.37 2.09 2.26

Net Capex -1.16 -2.77 -1.55 -1.27

Other Investments 0.00 0.00 0.00 0.00

Free Cash Flow 0.00 -1.39 0.54 0.99

Dividends Paid -0.06 -0.27 -0.37 -0.43

Other & Chg in Consolid. Area 0.35 0.00 0.00 0.00

Chg in Net Worth & Capital Incr. 0.00 0.00 0.00 0.00

Change in NFP 0.29 -1.67 0.17 0.56

NFP End of Period 0.17 1.83 1.66 1.10



18

Financial Ratios

(%) 2015 2016E 2017E 2018E

ROE 13.6% 19.6% 18.3% 18.0%

ROI 13.3% 15.3% 13.5% 14.3%

Net Fin. Debt/Equity (x) 0.0 0.3 0.2 0.1

Net Fin. Debt/EBITDA (x) 0.1 0.6 0.5 0.3

Interest Coverage 29.5 42.5 45.7 51.3

NWC/Sales 31.5% 32.2% 32.7% 33.6%

Capex/Sales 12.1% 22.4% 11.6% 8.9%

Pay Out Ratio 39.1% 31.2% 33.9% 34.4%


Per Share Data

(EUR) 2015 2016E 2017E 2018E

EPS 0.23 0.38 0.41 0.47

DPS 0.09 0.12 0.14 0.16

Op. CFPS 0.38 0.45 0.68 0.73

Free CFPS 0.00 -0.45 0.18 0.32

BVPS 1.70 1.96 2.26 2.58 Source: Company data, UBI Banca estimates

Stock Market Ratios

(x) 2015 2016E 2017E 2018E

P/E 12.8 7.3 6.8 6.0

P/OpCFPS 7.7 6.3 4.1 3.8

P/BV 1.7 1.4 1.2 1.1

Dividend Yield (%) 3.1% 4.3% 5.0% 5.7%

Free Cash Flow Yield (%) 0.0% nm 6.3% 11.4%

EV (EURm) 9.93 11.31 11.15 10.61

EV/Sales 1.0 0.9 0.8 0.7

EV/EBITDA 4.2 3.7 3.5 3.1

EV/EBIT 8.0 6.3 5.8 4.9

EV/Capital Employed 1.9 1.4 1.3 1.2


Growth Rates

(%) 2015 2016E 2017E 2018E

Growth Group Net Sales 17.0% 29.8% 7.8% 6.9%

Growth EBITDA 55.3% 26.5% 5.7% 8.7%

Growth EBIT 101.63% 43.92% 7.48% 12.35%

Growth Net Profit 325.61% 69.76% 7.66% 12.63% Source: Company data, UBI Banca estimates


19

Disclaimer Analyst Declaration

This research report (the “Report”) has been prepared by Marco Cristofori on behalf of UBI

Banca S.p.A. (“UBI Banca”). UBI Banca is an Italian bank supervised by the European

Central Bank and is duly authorised to provide investment services pursuant to Article 1,

Paragraph 5, letter a), b), c), c-bis), e) and f) of the Legislative Decree 24 February 1998, n°

58 under the supervision of Consob. UBI Banca has its head office at Piazza Vittorio Veneto

8, 24122 Bergamo.

The analyst who prepared the Report, and whose name and role appear on the front page,

certifies that:

a. the views expressed on the company mentioned herein (the “Company”)

accurately reflects his personal views. It does not represent the views or opinions

of UBI Banca, its management or any other company which is part of or

affiliated to the UBI Banca group (the “UBI Banca Group”). It may possible that

some UBI Banca Group’s employees may disagree with the views expressed in

this Report;

b. he has not received and will not receive any direct or indirect compensation in

exchange for any views expressed in this Report;

c. the analyst does not own any securities and/or any other financial instrument

issued by the Company or any financial instrument whose price depends on or is

linked to any securities and/or any financial instrument issued by the Company;

d. neither the analyst nor any member of the analyst’s household serves as an

officer, director or advisory board member of the Company;

e. the remuneration of the analyst is not directly tied to transactions in services of

investment firms or other type of transactions it or any legal person part of the

same group performs, or to trading fees it or any legal person that is part of the

same group receives;

f. the analyst named in the document is member of AIAF.

General disclosure

This Report is for information purposes only. This Report (i) is not, nor may it be construed,

to constitute, an offer for sale or subscription of or a solicitation of any offer to buy or

subscribe for any securities issued or to be issued by the Company, (ii) should not be

regarded as a substitute for the exercise of the recipient’s own judgement. In addition, the

information included in this Report may not be suitable for all recipients. Therefore the

recipient should conduct his own investigations and analysis of the Company and securities

referred to in this document and make his own investment decisions without undue

reliance on its contents. Neither UBI Banca, nor any other company of the UBI Banca

Group, nor any of its directors, managers, officers or employees, accepts any direct or

indirect liability whatsoever (in negligence or otherwise), and accordingly no direct or

indirect liability whatsoever shall be assumed by, or shall be placed on, UBI Banca, or any

other company of the UBI Banca Group, or any of its directors, managers, officers or

employees, for any loss, damage, cost, expense, lower earnings howsoever arising from

any use of this Report or its contents or otherwise arising in connection with this Report.

The information provided and the opinions expressed in this Report are based upon

information and data provided to the public by the Company or news otherwise public and

refers to the date of publication of the Report. The sources (press publications, financial

statements, current and periodic releases, as well as meetings and telephone

conversations with the Company’s representatives) are believed to be reliable and in good

faith, but no representation or warranty, express or implied, is made by UBI Banca as to


20

their accuracy, completeness or correctness. Past performance is not a guarantee of future

results. Any opinions, forecasts or estimates contained herein constitute a judgement as at

the date of this Report, and there can be no assurance that the future results of the

Company and/or any future events involving directly or indirectly the Company will be

consistent with any such opinions, forecasts or estimates. Any information herein is subject

to change, update or amendment without notice by UBI Banca subsequent to the date of

this Report, with no undertaking by UBI Banca to notify the recipient of this Report of such

change, update or amendment.

Organizational and administrative arrangements to prevent conflicts of interests

UBI Banca maintains procedures and organizational mechanism (physical and non physical

barriers designed to restrict the flow of information between the unit which performs

investment research activity and other units of UBI Banca) to prevent and professionally

manage conflicts of interest in relation to investment research.

For further information please see UBI Banca’s website (www.ubibanca.com/equity-

research) “Informativa sintetica sull’attività di ricerca”.

Disclosure of potential conflicts of interest

In relation to the Company the following potential conflict of interest have been found:

> UBI Banca acts as Specialist for Tech-Value

> UBI Banca may have long or short positions with the issuer

> One of the board member of Tech-Value in employed in UBU Banca

On the basis of the checks carried out no other conflict of interest arose.

Frequency of updates

UBI Banca aims to provide continuous coverage of the companies in conjunction with the

timing of periodical accounting reports and any exceptional event that occurs affecting the

issuer’s sphere of operations and in any case at least twice per year. The companies for

which UBI Banca acts as Sponsor or Specialist are covered in compliance with regulations

of the market authorities.

For further information please refer to www.ubibanca.com/equity-research

Valuation methodology

UBI Banca’s analysts value the Company subject to their recommendations using several

methods among which the most prevalent are: the Discounted Cash Flow method (DCF),

the Economic Value Added method (EVA), the Multiple comparison method, the SOP

method and the NAV method.

The analysts use the above valuation methods alternatively and/or jointly at their

discretion. The assigned target price may differ from the fair value, as it also takes into

account overall market/sector conditions, corporate/market events, and corporate

specifics (i.e. holding discounts) reasonably considered to be possible drivers of the

company’s share price performance. These factors may also be assessed using the

methodologies indicated above.

For further information please refer to www.ubibanca.com/equity-research.

Ranking system

UBI Banca’s analysts use an “absolute” rating system, not related to market performance.

The explanation of the rating system is listed below:


21

Buy: if the target price is 10% higher than the market price, over the next 12 months.

Hold: if the target price is 10% below or 10% above the market price, over the next 12

months.

Sell: if the target price is 10% lower than the market price, over the next 12 months.

No Rating: the investment rating and target price have been suspended as there is not

sufficient fundamental basis for determining an investment rating or target. The previous

investment rating and target price, if any, are no longer in effect. Alternatively, No Rating

is assigned in certain circumstances when UBI Banca is acting in any advisory capacity in a

strategic transaction involving the Company.

Target price: the market price that the analyst believes that the share may reach within a

one-year time horizon.

Market price: closing price on the day before the issue date of the report, appearing on the

first page.

Distribution

Italy: This document is intended for distribution in electronic form to “Professional Clients”

and “Qualified Counterparties” as defined by Legislative Decree 24 February 1998, n. 58

and by Consob Regulation n. 16190 dated 29.10.2007, as further amended and

supplemented.

This Report has been released within 30 minutes from the timing reported on the front

page.

Copyright

This Report is being supplied solely for the recipient’s information and may not be

reproduced, redistributed or passed on, directly or indirectly to any other person or

published, in whole or in part, for any purpose without prior written consent of UBI Banca.

The copyright and intellectual property rights on the data are owned by UBI Banca Group,

unless otherwise indicated. The data, information, opinions and valuations contained in

this Report may not be subject to further distribution or reproduction, in any form or via

any means, even in part, unless expressly consented by UBI Banca.

By accepting this Report the recipient agrees to be bound by all of the forgoing provisions.

Distribution of ratings

Equity rating dispersion in the past 12 months

Buy Hold Sell No Rating

89.5% 10.5% 0.0% 0.0%

Proportion on issuers to which UBI Banca has supplied investment banking services

relating to the last 12 months

Buy Hold Sell No Rating

100% 100% - -

For further information regarding yearly and quarterly rating statistics and descriptions,

please refer to www.ubibanca.com/equity-research.

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