Rai Way approves results for the nine months 2024

Solid growth continued; guidance for 2024 confirmed

• Key results for the quarter ended 30 September 2024 (vs. 30 September 2023):
  • Core revenues of € 206.5m (+1.1%);
  • Adjusted EBITDA* of € 142.2m (+2.7%);
  • Operating profit (EBIT)* of € 103.9m (+3.4%);
  • Net income of a € 70.5m (+1.0%)

• Capex** of € 25.1m (€ 27.5m in the first nine months 2023)
• Recurring free cash flow*** of € 96.2m (+5.1%)
• Net debt**** of € 148.2m (compared to € 104.9m at 31 December 2023)

Rome, 13th November 2024 - The Board of Directors of Rai Way S.p.A. (Rai Way), met today under the chairmanship of Giuseppe Pasciucco, examined and unanimously approved the Company’s Interim Financial Report for the nine months ended 30 September 2024.

Consistently with the first half of the year, in the first nine months Rai Way recorded core revenue growth of +1.1% to € 206.5 million, higher than the contribution alone of inflation indexation clauses included in most customer contracts. Adjusted EBITDAi stood at € 142.2 million, an improvement of 2.7% also thanks to the strict cost control, with net income growing to € 70.5 million (+1.0%) reflecting higher depreciation and amortization and financial expenses related to the progression of investments. Net debti,iv stood at € 148.2 million, and - although impacted by investments and dividend distribution - remained below Adjusted EBITDAi calculated over the last 12 months.

Given the results achieved, the Company confirms the guidance for the current year, as most recently reformulated at the time of the publication of the half-year figures.

From an operational standpoint, the completion of the first 5 edge data centers and the launch of the new organizational structure made it possible to define an ad hoc commercialization strategy for the new assets, including CDN, for which trials are continuing in parallel, in collaboration with leading content providers. As part of the improvement in operational efficiency envisaged in the 2024-27 Industrial Plan, Rai Way has also identified a new corporate headquarters in Rome, where it will move its central functions as early as the second quarter of 2025, consistent with the objectives of strengthening corporate identity and reducing costs.

Roberto Cecatto, Chief Executive Officer of Rai Way, commented: "The solid results achieved by Rai Way in the first nine months of 2024, consistent with our expectations, allow us to look forward to the last quarter of the year with confidence and to continue to focus on the execution of the strategy. The strong fundamentals of the traditional business ensures we can confidently plan and pursue our diversification path”.

Key Results for the first nine months 2024

The Company’s core revenues amount to € 137.6 million, up by 1.2% compared to € 136.0 million in the first six months of 2023, thus exceeding the reference inflation rate. Media distribution services, which include revenues from RAI, generated a turnover of € 121.8 million, posting a 1.2% increase driven by the inflation indexing of underlying contracts, as well as by the full effect of new regional DTT networks. Digital infrastructure recorded revenues of € 15.7 million, currently fully generated by tower hosting services, which increased by 1.1% also thanks to the positive trend of business with fixed-wireless-access and radio operators.

Adjusted EBITDA* amounted to € 142.2 million, an increase of 2.7% compared to € 138.4 million recorded in the first nine months of 2023. The improvement was driven by the increase in core revenues, careful cost control and certain non-core benefits (higher level of capitalization of personnel costs and other income), which more than offset the lack of the incentives on energy tariffs recorded in 2023 and the rising start-up costs of new initiatives. Adjusted EBITDAi margin stood at 68.9% (it was 67.8 % in the first nine months of 2023). Considering the impact of nonrecurring charges (€0.2 million in the first nine months of 2024 and €3.6 million in the corresponding period of 2023), EBITDAi was €141.9 million, up 5.3 percent.

Operating profit (EBIT)* amounted to € 103.9 million, an increase of 3.4% over € 100.5 million in the first nine months 2023, impacted by an acceleration of depreciation and amortization resulting from investment activities.

Net income amounts to € 70.5 million, an increase of 1.0% compared to the figure for the first nine months 2023 when it stood at € 69.8 million, also impacted by higher financial charges, reflecting rising interest rates as well as a higher amount of financial debt.

In the period, Capex** amount to € 25.1 million, of which € 19.9 million dedicated to development activities, in particular to the 5 edge data centers that went into operation in July. In the corresponding period of 2023, investments had amounted to € 27.5 million, including € 19.7 million in development activities.

Net invested capital****** amounts to € 321.5 million, with Net debt**** closing at € 148.2 million (including the impact from the application of the IFRS-16 accounting standard for € 30.9 million) compared to € 104.9 million at 31 December 2023, confirming - net of dividend payments and development investments - the positive dynamics of the recurring cash generation***, equal to € 96.2 million (+5.1% compared to €91.5 million recorded in the first nine months 2023).

Outlook

In light of the results of the first nine months of the fiscal year, Rai Way confirms the already announced targets for fiscal year 2024. Specifically, the Company plans :

• growth of the Adjusted EBITDA* compared to 2023, despite the start-up costs of diversification initiatives and the lack of incentives on energy tariffs;
• maintenance and development investments substantially in line with 2023.

Rai Way announces that today, Wednesday 13 November 2024 at 5:30pm CET, the results of the first nine months 2024 will be presented to the financial community via conference call.

The presentation supporting the conference call will be made available in advance on the Company’s website www.raiway.it, in the Investor Relations section.

To attend the conference call:

Italy: +39 02 8020911 - UK: +44 1 212818004 - USA: +1 718 7058796

Alternatively, please register here to receive the weblink to the event directly in your inbox and Outlook Calendar.

The replay of the conference call will be available after the end of the event in the Investor Relations – Presentations and Events section of the website www.raiway.it.

The manager in charge of preparing the corporate accounting documents, Adalberto Pellegrino, declares, pursuant to article 154-bis of the Consolidated Finance Law (TUF), that the accounting information in this release corresponds to the underlying accounting documents, books and entries.

Disclaimer

This release contains forward-looking statements on the future events and results of Rai Way that are based on current expectations, estimates and forecasts about the sector in which Rai Way operates and on management’s current opinions. By their nature these items contain an element of risk and uncertainty as they depend on the occurrence of future events. The actual results could differ, even materially, from those stated for a variety of reasons such as: global economic conditions, the effect of competition and political, economic and regulatory developments in Italy.

* The Company assesses performance also on the basis of certain measures not considered by IFRS. Set out below is a description of the components of the indicators that are important for the Company:

• EBITDA (earnings before interest, taxes, depreciation and amortization): this is calculated as profit before income taxes, depreciation, amortization, write-downs and financial income and expenses.
• Adjusted EBITDA: this is calculated as profit before income taxes, depreciation, amortization, write-downs, financial income and expenses and non-recurring expenses/income.
• Operating profit or EBIT (earnings before interest and taxes): this is calculated as profit before income taxes and before financial income and expenses.
• Net Debt: the format for the calculation of Net Debt is the one provided in paragraph 127 of CESR Recommendation 05-054b, which implements Regulation (EC) no. 809/2004.

** Excluding investments related to the application of new IFRS 16 Accounting Standard, equal to €4.1m as of 30 September 2024; investments for the first 9 months include € 0.6m related to the CDN project represented as IFRS-16 financial liabilities in the statement of cash flows.

*** Cash generation (Recurring FCFE) defined as Adj. EBITDA net of Leases, Net Financial Charges, P&L Taxes and Recurring Maintenance Capex. Leases are estimated as sum of leasing right of use depreciation (excl. dismantling) + financial charges on leasing contracts.

**** Net Debt including the effect of the application of the IFRS-16 accounting standard.

***** Normalized growth excluding certain residual, non-recurring, impacts related to the refarming process.
****** Net invested capital is calculated as the sum of fixed capital, working capital and non-current financial assets.

For table see attachment