The Board of Directors of Datrix S.p.A. approves the draft of the financial statements and the consolidated results at 31 December 2023

The Board of Directors of Datrix S.p.A. Approves the Draft of the Financial Statements and the Consolidated Results at December 31, 2023

Key Highlights

• Consolidated revenues of Euro 15.3M
• Significant organic growth of the AdTech segment (+35%) within the Data Monetisation line of business driven mainly by innovative first party data ready solutions
• Important progress of the AI for Industrial & Business Processes business line (+61%) also thanks to the contribution of the solutions offered in the Generative and Large Language Model area and the newly acquired Aramis (Euro 0.5M)
• Revenue generated abroad at 58% of the total, up from FY2022 (39%) thanks, in particular, to progress in the US market
• Average revenue per customer at 48 thousand Euro +15% compared to FY2022 supported by the redefinition of the offering announced in the first half of the year
• Recurring revenues at 68%
• EBITDA at Euro -0.3M, significantly accelerating in the second half of the year to Euro 0.5M
• Margin on revenue essentially at break-even thanks to the focus on higher value-added customers in line with the Group’s long-term strategy (6% in 2H 2023)

Outlook 2024

• Existing contracts and commercial pipeline as well as increased recurring revenues drive core revenue trend also supported by growing demand for AI-based solutions and technology leadership achieved by the Datrix Group
• EBITDA expected to be positive in the year due to continued focus on higher value-added services

Milan, 28 March 2024 — Datrix S.p.A., Datrix or the Company – Ticker DATA, leader in the development of Augmented Analytics solutions and services based on Artificial Intelligence and Machine Learning Models for the data-driven growth of companies, listed on Euronext Growth Milan, ISIN code IT000546837, announces that the Board of Directors, which met today, approved the draft of the financial statements and the consolidated results for the period ended 31 December 2023 (prepared in accordance with Italian accounting standards).

We are particularly pleased to announce the 2023 results, which are not in line with the management’s expectations and above market ones, but which also demonstrate the solid foundation on which the Datrix Group’s business strategy rests. The increase in international sales and average revenue per customer, and especially the achievement of a positive EBITDA in the second half of 2023, are tangible indicators of the success of our strategic initiatives. These results confirm the validity of the decision to focus investments on the two business areas, AI for Data Monetisation and AI for Industrial & Business Processes, and thus on strongly applied AI systems; in this regard, I would like to emphasize how the strategic investments made over the years have strengthened our main AI-based products to a level of robustness that makes them ready for large-scale deployment. The acquisition of new customers, as well as confirming the growing interest of the business functions of companies in AI, will also have a positive impact on the results for 2024, a year in which we expect to generate positive EBITDA. Furthermore, in the current year, we intend to further consolidate our market position, through a strategy of growth also by external lines. This is a key element of the Datrix Group’s development strategy that will allow us to expand the portfolio of vertical and hyper-specialised companies to be accelerated with our AI systems.

Analysis of the Datrix Group’s Economic and Financial Performance as at 31 December 2023

Consolidated Revenues amounting to Euro 15.3M (Euro 16.8M in FY2022); organic growth was +12% also in connection with the new offering definition.

Consistent with the new definition of the MarTech offering in place, characterized by a focus on a higher value-added product and solution offering, the numbers for 2023 were impacted by the decision to completely eliminate the low-margin part of turnover, in particular, in relation to a long-standing customer. In 2022, these revenues amounted to Euro 3.5M.

In terms of performance and breakdown of revenue from the sale of Datrix Group solutions and services at 31 December 2023:

• The AI for Data Monetization line, which accounts for 93% of the total, recorded revenues of Euro 13.6M, -12% compared to 2022 (Euro 15.5M), +13% organic growth on FY2022. The AdTech segment grew by +35% to Euro 7.9M in 2023 (Euro 5.8M in FY2022). Consistent with the new definition of the offering in the MarTech segment, the figures for 2023 were impacted by the decision to completely eliminate the part of turnover characterised by a lower margin; in FY 2022 these revenues amounted to Euro 3.5M.
• The AI for Industrial & Business Processes line, which accounts for 7% of the total, recorded revenues of Euro 1.0M, +61% compared to FY 2022.

Consolidated Other Revenues, which include the accrued portion of contributions received as part of funded R&D projects and R&D tax credits (L. 160/2019 mod. L. 178/2020), amounted to Euro 0.6M, stable compared with FY 2022.

Consolidated Operating Costs amounting to Euro 17.7M, showed a decrease of Euro 2.6M compared to 2022 (-13%). This change was related on the one hand to the refocusing of the offering in the MarTech segment, which led to a reduction in variable costs, and on the other hand to costs incurred for:

1. The Aramis integration and the definition of the new AI & Business Processes offering and, in particular, in market development, strategic marketing and talent acquisition activities;
2. Business development in the United States.

Consolidated Adjusted EBITDA of Euro -0.3M (Euro -0.6M in FY2022), accelerating in the second half of the year at Euro 0.5M. Margin on revenue significantly improved to -2% in 2023 (-4% in FY2022), 6% in 2H 2023.

Consolidated Net Result amounting to Euro -3.6M (Euro -2.7M in FY2022); it should be noted that in 2023, the Datrix Group did not prudently recognise deferred tax assets in the income statement on the tax losses accrued in the period, for a potential benefit of Euro 0.8M (Euro 0.9M recognised in FY2022); considering this amount the Adjusted Consolidated Net Result would have been Euro -2.8M in line with the previous year.

Consolidated Net Financial Position (available cash) amounting to Euro +2.4M as at 31 December 2023 (Euro 5.3M in FY2022). In line with the plan, the company invested Euro 2.7M in R&D for the development of its products, down significantly from the previous year (Euro 3.1M in FY2022). It should be noted that, although the level of investments remained high, cash absorption in 2023 decreased more than 40% compared to last year.

Cash and cash equivalents (change of Euro +1.9M) were impacted: i) positively by the flow from financing activities of Euro 4.8M (including advances on European projects to be distributed to Better project participants of 3.6M Euro) and a flow from operating activities of Euro 0.4M; ii) negatively from the flow from investment activity of Euro 3.3M (mainly investment in R&D and acquisition of the company Aramis Srl).

Finally, consolidated financial payables amounted to Euro 3.2M, up from Euro 1.9M at 31 December 2022.

Net Working Capital amounted to Euro -1.5M (Euro -0.7M at 31 December 2022).

Strategic Highlights in 2023

In 2023, Datrix invested to further strengthen its technological leadership position, demonstrating its ability to anticipate market trends and respond to market demands through cutting-edge solutions that meet the highest standards of privacy and security. This commitment resulted in a great deal of positive feedback from the market, which lays the foundation for significant growth in FY 2024.

• In a rapidly evolving digital ecosystem, Datrix has stood out internationally through Audience AI and Adapex Refinery, cutting-edge initiatives that integrate the effectiveness of AI with first-party data, fully complying with GDPR regulations. This innovative model, in line with the latest European privacy regulations, has also been able to anticipate crucial trends in the US, where the protection of user data is becoming an increasing priority. The early adoption of these systems based on first-party data has now ensured a distinctive position in the market, allowing them to benefit from increasing customer adoption.
• In an evolving regulatory landscape, marked by the introduction of the European AI Act, Datrix has reinforced its future-oriented vision by developing AI-as-a-Service solutions that accelerate and simplify the integration of AI into business processes, particularly for the banking sector. These solutions allow companies to leverage generative artificial intelligence to automate traditionally burdensome tasks, while ensuring strict compliance, security and privacy parameters are met.
• Datrix SpA’s involvement as coordinator of the prestigious European ‘BETTER’ project for the healthcare sector highlights its ability to process even sensitive data according to the highest security standards. Through the application of a federated learning approach, Datrix proposes a robust infrastructure that enables the secure sharing of health data, complying with GDPR guidelines and promoting research and innovation.

Evolution of the AI Market

The market for artificial intelligence-based applications is largely confirming expectations of progressive and increasing penetration of the industrial and economic environment. The number of cases of the application of new generative and AI-based technologies to business continues to rise; this trend outlines a future landscape in which AI will become a central pillar of global innovation and economic development.

The implementation of AI in industries is accelerating, fitting strategically into the Industry 5.0 vision. McKinsey & Company’s projection that AI could generate $13 trillion worth of value for the global economy by 2030, of which $6.7 trillion from increased productivity and $3.3 trillion from new products and services, testifies to a significant impact far beyond initial expectations.

At the same time, the Generative AI sector is experiencing exponential growth, evidenced by a global market projection that is expected to reach $1,143 billion by 2030, with a CAGR of 43.4% according to Grand View Research.

Significant Facts at 31 December 2023

On 1 February 2023, Datrix S.p.A. completed the acquisition of 60% of the share capital of Aramis, a company specialising in the development of algorithms and models for analysing the performance of industrial systems and components in terms of risk, reliability, maintenance and resilience, based on the most innovative statistical and artificial intelligence techniques.

On 28 March 2023, Datrix S.p.A. entered into a partnership with Seed Group, a company active in the United Arab Emirates belonging to the private office of Sheik Saeed bin Ahmed Al Maktoum, intending to strengthen its international presence, leveraging the growing demand for advanced AI solutions from the Middle Eastern market.

On 8 May 2023, Adapex, an AdTech company of the Datrix Group, announced a partnership with PremiumMedia360 (PM360), a leading US advertising data automation company, to improve efficiency and ad management in the innovative Connected TV (CTV) market.

On 17 May 2023, the Datrix Group won the L’Oréal Italia tender for Digital Intelligence & Marketing Science activities. For the 5th consecutive year, the cosmetics leader has entrusted ByTek with digital and search intelligence on 16 brands and 4 divisions.

On 8 June 2023, ByTek, a MarTech company of the Datrix Group, extended its collaboration with Crédit Agricole Italia and was entrusted with the bank’s digital activities until 2024.

On 20 July 2023, FinScience, a fintech company of the Datrix Group, announced the availability of its thematic data on the Nasdaq Data Link platform.

On 13 September 2023, Datrix S.p.A. announced the consensual termination with MIT SIM S.p.A. of the Specialist contract.

On 29 September 2023, Datrix S.p.A. announced the signing of the specialist contract with Mediobanca S.p.a., starting 03 December 2023.

On 23 October 2023, ByTek continued its multi-year collaboration with Lancôme, one of the world’s most prestigious luxury beauty brands, part of the L’Oréal Group.

On 7 November 2023, ByTek was awarded the tender to manage Performance Strategy and Marketing Science for the Finiper Canova Group, including management of campaigns for Iper La grande i hypermarkets and IperDrive.it.

On 16 November 2023, the Datrix Group won a Euro 10 million tender for a European project on AI for Healthcare, coordinating an international medical-scientific consortium. The research project is called ‘BETTER’ (Better Real-World Health-Data Distributed Analytics Research Platform, Grant agreement 101136262), using a ‘Federated Learning’ and ‘Distributed AI’ approach.

In November 2023, the plan was approved to merge the subsidiaries Finscience Srl (100% owned by Datrix Spa) and Aramis Srl (60% owned by Datrix Spa) into the subsidiary 3rdPlace Srl (100% owned by Datrix Spa). The legal effect of the merger is dated 27 December 2023, while the economic, accounting and tax effect has been backdated to 01 January 2023. As a result, the group’s shareholding in 3rdPlace Srl changed from 100% to 96.73%.

At 31 December 2023, Datrix held a total of 51,500 treasury shares, for a total of 0.307% of the share capital.

Subsequent Events and Business Outlook

On 30 January 2024, the Company’s Board of Directors resolved on an incentive plan for two employees, providing for the potential award of a maximum of 35 thousand shares by April 2024 against the achievement of predetermined strategic goals.

On 5 February 2024, Datrix S.p.A. announced that the conversion period of the participating financial instruments denominated “Datrix SFP 2019” was closed. A total of 18,080 2019 Datrix SFP have been converted, resulting in 18,080 ordinary shares issued for a total consideration of Euro 2,712.00.

Outlook

In FY 2024, further growth in market adoption of AI-based solutions is expected. The Datrix Group is expected to benefit from: i) reliability in solving complex problems; ii) long-lasting relationships with leading client companies; iii) the ability to work on the frontier of innovation certified by the regular receipt of public research grants (European and national).

Consistent with its strategic plan, the Datrix Group is constantly engaged in:

• Consolidating its international presence, particularly in Europe, the United States and the United Arab Emirates;
• The search for M&A opportunities in line with external growth targets.

In financial terms, the Group confirms its objectives of growing revenues, improving margins at the consolidated level and reducing the absorption of financial resources.

Directors’ Independence Evaluation Criteria

The Company’s Board of Directors approved the quantitative and qualitative criteria of significance of potentially relevant relationships for the purpose of assessing the independence of directors, in accordance with Article 6-bis of the Euronext Growth Milan Issuers’ Regulations.

Calling of the Ordinary Shareholders’ Meeting

The Board of Directors has resolved to convene the Ordinary Shareholders’ Meeting for the approval of the financial statements for the year ended December 31, 2023, in a single call for May 8, 2024. The Shareholders’ Meeting will also resolve on the appointment of the Board of Directors, the renewal of the Board of Statutory Auditors, and the authorization to purchase and dispose of treasury shares.

Reclassified Consolidated Financial Statements

Profit & Loss

Item	31/12/2023	31/12/2022
Revenues from sales and services	14,645,012	16,163,706
R&D Grants	643,705	655,491
Total operating revenues	15,288,717	16,819,197
Increases in fixed assets	2,100,583	2,881,024
Other revenues	53,803	—
Total value of production	17,443,103	19,700,221
Cost of raw materials, consumables and merchandise	-20,290	-33,813
Cost of services	-10,942,300	-13,054,908
Cost of rents and leases	-370,211	-421,020
Personnel costs	-6,244,728	-6,673,143
Other operating expenses	-134,861	-165,717
Total operating costs	-17,712,390	-20,348,600
EBITDA Adjusted	-269,287	-648,379
% on revenues	-2%	-4%
Extraordinary items	366,737	110,425
EBITDA	97,450	-537,954
% on revenues	4.6%	-18.7%
Amortizations and depreciations	-3,580,744	-3,021,028
Difference between production value and costs	-3,483,294	-3,558,982
% on revenues	-22.8%	-21.2%
Financial Income (Expenses)	-83,128	54,553
Adjustments to the value of current financial assets	-91,028	-43,483
Pre-tax profit (loss)	-3,657,450	-3,547,912
% on revenues	-23.9%	-21.1%
Income taxes, current, deferred and prepaid	40,192	855,047
Profit (loss) for the year	-3,617,258	-2,692,865
% on revenues	-23.7%	-16.0%
Minorities result	5,757	—
Consolidated profit (loss)	-3,611,501	-2,692,865

Balance Sheet

Item	31/12/2023	31/12/2022
Intangible Assets	11,963,156	11,918,971
Tangible Assets	103,651	132,367
Financial Assets	235,549	247,061
Total Fixed Assets	12,302,356	12,298,399
Trade Receivables	8,209,502	8,140,328
Tax Receivables	912,675	1,107,070
Deferred and prepaid Taxes	3,049,622	3,023,789
Other receivables	189,500	51,395
Total Receivables	12,361,299	12,322,582
Current financial assets	982,014	2,555,196
Deposit accounts	8,969,657	5,486,190
Cash on hand	496	430
Total cash and cash equivalent	9,952,167	8,041,816
Total Current Assets	22,313,466	20,364,398
Accruals and Prepayments	196,727	336,923
TOTAL ASSETS	34,812,549	32,999,720
Share Capital	167,378	165,780
Reserves	24,133,440	23,849,420
Retained earnings (losses)	-6,754,181	-4,051,394
Current earnings (losses)	-3,611,501	-2,692,865
Minorities	57,216	—
Total consolidated net equity	13,992,352	17,270,941
Provision for taxes, even deferred	265,775	335,432
Financial derivative liabilities	—	—
Other provisions	180,995	562,535
Total provisions	446,770	897,967
Employees’ termination benefit provision	756,593	700,289
Shareholders’ financing	3,575,835	—
Financial liabilities	3,222,368	1,944,828
Trade Payables	6,585,672	6,438,827
Tax Payables	485,783	464,004
Payables to social security and welfare institutions	355,152	324,410
Other payables	4,059,152	3,907,189
Total Payables	18,283,962	13,079,258
Accruals and Deferrals	1,332,872	1,051,265
TOTAL LIABILITIES	34,812,549	32,999,720

Cash Flow Statement

Item	31/12/2023	31/12/2022
Profit (Loss)	-2,834,137	-2,088,965
Non cash items	672,365	425,751
Change in working capital	81,623	-1,386,829
Other changes	-159,506	-694,344
Cash flow from operating activities	-2,239,655	-3,744,387
Cash flow from investing activities	-1,681,643	-1,852,614
Capital increases	10,429	609,631
Change in financial liabilities *	4,989,846	-554,708
Equity investments	—	-136,280
Cash flow from financial activities	5,000,275	-81,357
Cash flow of the year	1,078,977	-5,678,358
Initial available cash	5,884,051	11,562,409
Year end available cash	6,963,028	5,884,051

* With reference to 2023, the item includes 3,575,835 Euros related to advances received for the funded project “Better”, which Datrix S.p.A., as the lead partner, will distribute to the other research project partners.

Datrix S.p.A. Financial Statement

Profit & Loss

Item	31/12/2023	31/12/2022
Total operating revenues	1,500,394	2,063,090
Increases in fixed assets	288,797	297,230
Other revenues	131,010	204,887
Total value of production	1,920,201	2,565,207
Cost of raw materials, consumables and merchandise	-4,657	-10,366
Cost of services	-2,010,546	-2,618,111
Cost of rents and leases	-136,938	-172,953
Personnel costs	-1,950,284	-2,030,373
Other operating expenses	-72,602	-42,067
Total operating costs	-4,175,027	-4,873,870
EBITDA	-2,254,826	-2,308,663
% on revenues	-780.8%	-776.7%
Amortizations and depreciations	-589,622	-483,070
Difference between production value and costs	-2,844,448	-2,791,733
% on revenues	-189.6%	-135.3%
Financial Income (Expenses)	-17,691	36,429
Adjustments to the value of current financial assets	-2,535	-28,005
Pre-tax profit (loss)	-2,864,674	-2,783,309
% on revenues	-190.9%	-134.9%
Income taxes, current, deferred and prepaid	30,537	694,344
Profit (loss) for the year	-2,834,137	-2,088,965
% on revenues	-188.9%	-101.3%

Balance Sheet — Datrix S.p.A.

Item	31/12/2023	31/12/2022
Intangible Assets	1,623,263	1,436,716
Tangible Assets	44,811	55,606
Financial Assets	10,304,792	9,378,333
Total Fixed Assets	11,972,866	10,870,655
Trade Receivables	4,353,409	2,971,610
Tax Receivables	196,276	111,196
Deferred and prepaid Taxes	2,400,366	2,369,829
Other receivables	12,579	11,289
Total Receivables	6,962,630	5,463,924
Current financial assets	982,014	2,554,987
Deposit accounts	5,980,790	3,328,994
Cash on hand	224	70
Total cash and cash equivalent	6,963,028	5,884,051
Total Current Assets	13,925,658	11,347,975
Accruals and Prepayments	113,945	232,190
TOTAL ASSETS	26,012,469	22,450,820
Share Capital	167,378	165,780
Reserves	23,956,152	23,576,950
Retained earnings (losses)	-4,579,744	-2,490,779
Current earnings (losses)	-2,834,137	-2,088,965
Minorities	—	—
Total consolidated net equity	16,709,649	19,162,986
Employees’ termination benefit provision	224,426	260,526
Other financial liabilities	3,575,835	—
Bank liabilities	2,343,950	929,940
Trade Payables	465,448	486,578
Tax Payables	1,018,236	994,649
Payables to social security and welfare institutions	113,447	121,442
Other payables	1,187,620	190,259
Total Payables	8,704,536	2,722,868
Accruals and Deferrals	373,858	304,440
TOTAL LIABILITIES	26,012,469	22,450,820

About Datrix

Datrix is an international group, listed on Euronext Growth Milan, that develops Artificial Intelligence solutions and applications to accelerate data-driven business growth through highly specialised technology companies in vertical markets.

The Group operates with AI-based solutions in 2 business areas: AI for Data Monetisation (to maximise growth opportunities in the Martech, AdTech and FinTech sectors by transforming data into tangible value) and AI for Industrial/Business Processes (to optimise the efficiency of industrial and business processes, including energy plants, transport infrastructures, production processes and logistics).

Since 2019, Datrix has accelerated its growth path through acquisitions in Italy and abroad. Today the Datrix Group includes the following brands: Aramix, FinScience, ByTek and Adapex. Datrix operates in Italy (Milan, Rome, Cagliari, Viterbo), the United States and UAE.