Icona Technology SpA: Icona Technology S.p.A. reports the results for the FY 2022

Cinisello Balsamo (MI) (pta016/29.03.2023/10:52 UTC+2)

• Consolidated turnover at 2,3M EUR on more than 2.000 clients in 41 countries
• Recurring revenue amounting to 68% of the total revenue, with international sales equal to 17% of the total sales
• A new product – Service Hub - successfully launched on the market, recording the first sales and corporate customers
• Cash conversion "Operating Cash Flow into EBITDA" exceeds 100%
• Net cash exceeds 2M Euro at group level, ready to support further organic and M&A expansion

Cinisello Balsamo, March 29, 2023. Icona Technology S.p.A. ("Icona Technology") (ISIN IT0005465528 - ticker: CARE), an international scale-up focused on Augmented Reality for Remote Assistance, announces the results for the full year 2022.

Giorgio Nepa, President and CEO of Icona Technology, declares: "2022 has been a pretty complex year for Industry 4.0. The combination of the energy crisis and the management of the post-pandemic, with technicians returning to traveling to clients and providing "in presence" support, slowed down the digital transformation of manufacturers, particularly their investments in remote assistance tools. The whole sector faced a strong step back in the growth trend. Nevertheless, we are happy with our reaction. We managed to keep a balance, with all our three products confirming the same amount of backlog of the previous year, and we faced the slowdown in demand for remote assistance tools by inventing and launching on the market a new product, Service Hub, aimed at reshaping the after sales department of the manufacturing companies. Not only has Service Hub been designed and developed in record time, but it generated the first sales, gained the first corporate clients, and developed an interesting flow of leads that supports us in building the ground for 2023 results".

Main consolidated financial KPIs

(source of data: management account, unaudited)

Concerning the consolidation method, the following is specified: when a company enters the consolidation area of a group, it is necessary to determine the equity value at the date of assumption of control. If no balance sheet is available on the date control is assumed, in practice, groups refer to the opening or closing balance sheet depending on whether the acquisition takes place during the first or second half of the financial year.

In this case, since control was assumed in the second half of the year, on 20 September 2021, it was decided to use the financial statements as at 31 December 2021. It should be noted that therefore, by using year-end figures, the consolidated economic numbers for the year 2021 coincide with the income statement of the parent company Icona Technology Spa.

Comment on the consolidated financial statements

Net sales of € 2.157.055 consist entirely of the revenue of the subsidiary Icona Srl, which participates in the group result following the acquisition on 20 September 2021. The turnover is spread to over 2.000 customers in 41 countries. Recurring revenue is equal to 68% of the total revenue, with international sales (extra Italy) amounting to 17% of the total sales. In 2021, the newly formed Icona Technology had no revenue, and the consolidated figures, considering the consolidation method described above, do not take into account the subsidiary's results.

In the financial year 2022, €143.016 was recognized for increases in fixed assets for internal works related to three development projects of Icona Srl, which involved the Acty and Livecare Support software. The company has always carried out development activities on its products but has adopted a policy of capitalizing costs only in the year 2022 for better consistency with the long-term value of these projects.

Other revenues and income of € 46.530 mainly consisted of the tax credit obtained by Icona Technology Spa for expenses incurred in 2021 for the listing and corporate reorganization transaction. This item was only recognized in 2022, the year in which the company obtained confirmation from the Authority on 6 May, for an amount corresponding to the 2021 and 2022 portions of the total credit.

The costs of raw materials, supplies, and merchandise of € 102.912 consist mainly of the purchase cost of the hardware to be resold by Icona Srl, which amounted to € 78.908; the remaining amount relates to the cost of fuel and consumables. There are no inventories.

Costs for services amounted to € 1.127.588. The increase compared to the € 83.720 in 2021 stems from the doubling of the costs of the listed company, which in 2021 were only present in the months of June to December, and from the presence of costs for consultancy and professional services of the subsidiary.

Personnel costs amounted to € 856.202. Due to the nature of the group's business, personnel costs, together with consulting services, are the cost that has the greatest impact on the company's economic performance, accounting for almost 40% of core revenues. In 2021 there were no employees in Icona Technology Spa; following the conclusion of the infra-group services agreement on 1 September 2022, two employees from the administrative area of the subsidiary were transferred to the holding company.

EBITDA as at 31.12.2022 amounted to € 158.355, which was significantly improved over the previous year due to the incorporation of Icona Srl's turnover values.

Total depreciation and amortization as of 31.12.2022 amounted to € 156.209.
Amortization of intangible assets of € 142.142 consisted of:

• € 76.000 referring to the three software products produced by Icona srl that the latter has revalued in the financial statements as of 31.12.2021 for a total of € 760.000 whose amortization period starts in the current year.
• € 37.539 regarding the amortization of start-up and expansion costs incurred by Icona Technology Spa in the initial phase of its activity in the middle of last year, which remained unchanged.
• € 28.603 regarding development costs capitalized by Icona Srl in 2022.

Depreciation of tangible fixed assets of € 14.067, unchanged from the previous year, refers exclusively to Icona Srl's hardware purchases functional to its core business.

EBIT amounted to € 2.146. The group result is affected by the loss of the company Icona Technology Spa which, in its second financial year from the date of incorporation, is still in the start-up and development phase of its business project.

Operating cash flow is equal to €237k, thus exceeding the EBITDA.

The net financial position shows an overall balance of € 2.198.206 of Net Cash. Cash and cash equivalents consist of almost 80% of Icona Technology Spa's liquidity from the SPF issue transaction in June 2021 with the related share capital increase.

Business outlook

Through the listing of 2021, the Company has created the conditions to obtain greater visibility concerning a broader and more diversified audience of investors, with advantages not only in terms of valuation but also in terms of positioning the Company with respect to its competitors and strategic partners.

The Company is currently strengthening its presence on the stock market and is planning to expand the scope of its corporate group, which will lead to the optimization of processes and an increase in margins.

As far as the subsidiary Icona Srl is concerned, in the first half of 2022, it continued to strengthen its brand, synonymous with quality and reliability, on the Italian territory and also acquired new prestigious customers in the foreign market. In the second half of the year, by virtue of the introduction of the Service Hub value proposition together with the business opportunity related to the Tax Credit for Intangible Assets, it generated a total of 11 new projects for an average of some € 28.000, which contributed, despite the unfavorable socio-economic conditions in the industry, to complete the year with an order result slightly above 2022.

For 2023, management analyzed a range of information from various sources, indicating that most B2B companies expect an economic recession in 2023. This means that it will be more challenging to attract the attention of decision-makers and successfully pass the contracting process as, if conditions do not improve, products and services deemed non-essential will potentially be cut.

The focus in the new year will therefore be to support companies by helping them understand how, through leadership, knowledge, technology and strong data support, they can offer high-quality solutions that can make a difference to their business. More specifically, the development of solutions based on Service Hub, which help to improve the service revenues of manufacturing companies through recurring services and at the same time enable the provision of 24x7 support, facilitates the digitization decision-making process in the industry.

Management is therefore focused on revenue growth that will lead to economies of scale and the absorption of fixed costs, as well as the achievement of policies to reduce churn and, therefore the abandonment of customers using subscription software licenses.

The Company is also committed to developing new services, characterized by the possibility of upselling policies and thus obtaining higher margins for each customer.

Profit / loss allocation of Icona Technology S.p.A.

Icona Technology as a single holding company recorded a loss of € 159.161 in 2022. It is proposed to carry forward the loss for the year.

Shareholders' meeting

The Shareholders' meeting of Icona Technology will be held on 28 April, 2023, as per the financial calendar. The related call, including the details of the agenda, will be circulated in the next weeks, according to the terms of the law.

(end)

Emitter:	Icona Technology SpA Viale Brianza 20 20092 Cinisello Balsamo (MI) Italy
Contact Person:	Giorgio Nepa
Phone:	+39 02 6111981
E-Mail:	investor.relations@iconatech.com
Website:	www.iconatech.com
ISIN(s):	IT0005465528 (Share)
Stock Exchange(s):	Vienna Stock Exchange (Vienna MTF)