Hello tomorrow

The new RetelitA unique ICT partner supporting every business from infrastructure to data

People and platforms together to develop innovative projects for a complete Digital Transformation

People and systems to integrate, orchestrate,

develop and drive digitaltransformation solutions

DIGITAL HUMAN CORE

FIBER

CONNECTIVITYNETWORK

SDW

AN5G

IOT

DATACENTER

HO

USIN

G

INFRASTRUCTURE

MULTICLOUD

APPLICATIONS

AGILEERP

SAPBUSINESS INTELLIGENCEDE

VOPS

BPO

WO

RKFL

OW

MES

THE NEW VALUE PROPOSITION

Business

Process

Growth

Data

3

MICROSOFT

CYBERSECURITY

Value chain of Digital TransformationSTARTING POINT

5G

Legacy System

SaaS

Fiber Optic

FWA ConnectivityInternet

SD-WANData Center

IaaS PaaSBig Data

Artificial IntelligenceMulticloud

Public Cloud

Data Management

OSS&BSSManagement

IT Management

ERP CRM

DevOpsCustom Applications

Business Intelligence

User Experience Enhancement

Industry 4.0 Applications Digital Marketing

IoT

Cyber Security

Managed Network

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RETELIT & PA GROUP

INFRASTRUCTURE

Together to provide a complete ICT services value chain

MANAGED SERVICES

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Over 600 professionals all over Italy

A leading Italian provider of services, innovative solutions and platforms targeting large and medium corporates, government and key financial institutions

Core competencesCRM, ERP, MES and Business Process Automation

Main business• Managed Services, with PA ABS, PA Expertise and PA Evolution• Infrastructure, mainly with the controlled Inasset and Spin

8,000 clientsacross 6 different industries: automotive, fashion & textile, finance, consumer goods, manufacturing and services

56 60

8 10

14% 16%

2017A 2018A

Revenues EBITDA Adjusted % EBITDA Adjusted Margin

Note: Financials reported pre IFRS 16 for all years.

(€m)

PA GROUP OVERVIEW

6

80% 20%

PA GROUP – BUSINESS HIGHLIGHTS

Projects related to SAP products

Technological and organizationalconsultancy services in the security field

Specialized services on thirdparties products in the financialsector

PA ABS

Infrastructure services provider includingConnectivity, Housing, Data Back-up and DisasterRecovery

Management, maintenance and post-sales assistance of applications and software basedon Microsoft platforms

Consultancy services and solutions related to business analytics

PA EXPERTISE

System integrator and Consultancy services in the fields of Cybersecurity, Networking, Telco

Solutions for the Public Administration

Software production, HW and SW installation, maintenanceand post-sales assistance

PA EVOLUTION

PA Group generated c. €60M of revenues in 2018

EBITDA Margin 2018

KEYcustomers

~10% WEIGHTED AVERAGE MARGIN ~35%

Key banking and consumer companies

Major consumer and media companies Leading global car manufacturer Leading telecom and

infrastructure companies

Revenues 2018

7

COMPELLING STRATEGIC RATIONALE BASED ON THE OFFER INTEGRATION

ACCELERATED PATH TOWARDS A MORE BALANCED PORTFOLIO BETWEEN INFRASTRUCTURE AND SERVICES 4 YEARS IN ADVANCE WITH RESPECT TO 2023BP TARGETS

OPPORTUNITY TO UNLOCK SYNERGIES THROUGH THE OFFERING OF RETELIT’S SERVICES TO PA GROUP CLIENTS

ENLARGED PLATFORM AND ENHANCED CASH GENERATION PROFILE OF THE COMBINED BUSINESS IDEALLY POSITIONING RETELIT TO PLAY A PIVOTAL ROLE IN THE ONGOING SECTOR CONSOLIDATION

PA Group is ideally placed to complement Retelit’s existing offering creating a one-stop shop for Enterprises with a 360 degrees portfolio covering every business needs in the ICT and digital field.

RETELIT + PA GROUP

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COMPETITIVE LANDSCAPE

YesNoThird Parties

Retelit/Gruppo PA

SYSTEM INTEGRATORItalian entities focused on Network

an Core Application integrations(E.g. SAP, ERP, CRM)

OTT CLOUDInternational public cloud

companies focused on providing IaaS and PaaS

services

TELCO OPERATORMain infrastructure providers

offering connectivity, Data Center and Cloud services

CLOUD & SERVICE PROVIDER

Large Service Provider focused on selling

connectivity and Data Center Solutions

NETWORK

DATA CENTER

CLOUD

CORE APPLICATIONS

DIGITAL SERVICES

INTEGRATION,ORCHESTRATION & DEVELOPMENT

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Infrastructure 84%Services 16%

Infrastructure 53%Services 47%

2019 REVENUES

RETELIT STANDALONE RETELIT + PA GROUP

SUPPORTING COMPANIES WITH A SMART OFFER BASED ON A COMBINATION OF INFRASTRUCTURE AND SERVICES

BUSINESS MIX EVOLUTION

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Extending Retelit’s clouds services to PA Group clients along with connectivity upgrade and housing services (bundle offer)

Extending PA Group’s services to Retelit’s clients, thus enlarging the spectrum of solutions offered

OPTIMIZATION OPPORTUNITIES

25%

Network and maintenance efficiencies as a result of increased scale and platform combination

Savings from organizational streamlining (e.g. in terms of audit and other central expenses)

Increase the utilization of Retelit’s infrastructure by substituing PA Group third party providers

Additional value can be extracted leveraging on the combined Retelit + PA Group platform post transaction.Margin synergies at runrate to be expected more than 20% of the combined EBITDA

KEY AREAS VALUE CREATION

CROSS-SELLING OPPORTUNITIES

75%

11

Expected a significant contribution from synergies, which allow a further EBITDA growth, exceeding morethan 20% compared to the sum of the two companies’ indicesSynergies expected to be fully realized over the next four years, primarily deriving from cross-sellingproducts and solutions to respective Retelit and PA Group client base, providing clients with platform costsoptimization measures

VALUE CREATION FROM TRANSACTION

20%

EBITDA 2019 Retelit Standalone

PA Group 2019 Contribution EBITDA with Synergies Run-rate

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607414

Equity Value Consideration PA Group Net Debt Position (Est.) EV Purchase Price

Strong value creation – purchase price of €74M EV would imply a multiple on EBITDA 2019E of 7.4x pre-synergies

EV / EBITDA 2019E

(€m)

TRANSACTION EV CONSIDERATIONS

7.4x

13

77%

23%

Earn-out for a total of €13M will be paid to key PA Managers/Shareholders in 2020, 2021

and 2022 linked to performance indicators

~ €46M* financed by cash

Up to maximum €14M funded with Retelit shares split in the following way: • Max €6M Retelit Shares (countervalue)• The difference is in cash dedicated to buy Retelit shares on the market in the next 12 months with a

lock up period of 18 months

~€60M* EQUITY CONSIDERATION

Closing by 10th January 2020Acquisition the

100% of PA Group

*Note: estimated Equity Value considering a value of NFP 2019E ~ € 14M

PA GROUP TRANSACTION

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OPTIMIZED FINANCIAL STRUCTURE FOR THE TRANSACTION

FINANCIAL KPI

€103M

Combined Leverage NFP/EBITDA 2019E

at Closing:2.0x

• Efficient capital structure for the transaction envisaging a new bank debt, refinancing existing debt at both companies level and allowing Retelit to optimize its financial position from previous debt-free structure which gave room to strategic transactions

• Debt cost in line with market average• Retelit will keep on paying out a dividend to its shareholders in line with historical levels

TOTAL FINANCINGPA ACQUISITION

AVAILABLE RESOURCES FOR FURTHER M&A

ADDITIONAL FINANCIAL RESOURCES FORESEEN IN THE FINANCIAL AGREEMENT SIGNED WITH BANKS

Debt/(cash) Equity Debt/(cash) Equity

NFP/Equity 0,4x

Retelit standalone2019e

Retelit + Gruppo PA 2019e

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SELECTED PRECEDENT TRANSACTIONIn the Italian market point to a deal value in the region of 9.0x EV/EBITDA, although comparability is affected by size and business model

Source: Elaborations on Factset, Bloomberg and Mergermarket data, company information, Nomura estimate

Completed Date Target Company Bidder Company EV (M) Currency EV/EBITDAJun-18 Linkem Go Internet 62 EUR 8.3xJan-18 Eolo Searchlight Capital 376 EUR 10.2xAug-18 Entanet City Fibre 33 EUR 15.3xJul-17 Mc-Link F2i 74 EUR 8.1xJul-17 Infracom F2i 132 EUR 6.0x

Dec-16 Metroweb Enel Open Fiber 714 EUR 13.6xDec-17 Cedacri FSI 308 EUR 7.3xOct-17 Infinity Technology solution Engineering 4.8 EUR 5.6xJul-17 Infrogroup Engineering 69 EUR 13.6x

Dec-16 AliasLab TeamSystem 50 EUR 5.1xapr-16 Euresys TeamSystem 3 EUR 11.3xfeb-16 Engineering Apax/NB 744 EUR 7.1xapr-14 24 Ore Software TeamSystem 117 EUR 9.9xDec-12 Objectway Futurimpresa 39 EUR 6.8xnov-12 H-umus TeamSystem 4.0 EUR 7.3x

Median 9.0x

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Thanks

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