Rai Way approves results of the first quarter 2024

Positive performance in the quarter that marks the start of the new Industrial Plan. Guidance for the full year confirmed

• Key results for the quarter ended 31 March 2024 (vs. 31 March 2023):
  • Core revenues of € 68.9m (+1.5%);
  • Adjusted EBITDA* of € 46.8m (+5.3%);
  • Operating profit (EBIT)* of € 34.9m (+4.4%);
  • Net income of a € 23.8m (+1.4%)

• Capex** of € 5.3m (€ 6.0m in the first quarter 2023)
• Recurring free cash flow*** of € 32.6m (+5.3%)
• Net debt**** of € 90.6m (compared to € 104.9m at 31 December 2023)
• Independence requirements of the members of the Board of Statutory Auditors verified

Rome, 10 May 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 quarter ended 31 March 2024.

The first quarter 2024 registered revenues of € 68.9 million, showing a 1.5% growth which exceeds the contribution of inflation-link clauses provided by most customer contracts. The favourable trend of all cost items brought to a 5.3% increase of Adjusted EBITDAi at €46.8 million, also thanks to a higher level of capitalization of Personnel costs. Net income was up by 1.4% at € 23.8 million, also reflecting higher amortisations and financial charges, while the typically strong cash generation of the first quarter, equal to € 32.6 million, allowed a reduction of Net Debti,iv, that stood at € 90.6 million. In light of reported results, Management confirmed the guidance already in place for the full year.

Roberto Cecatto, Chief Executive Officer of Rai Way, commented: "One month after the approval of the new 2024-27 Industrial Plan, we report a solid quarterly performance, which highlights Rai Way's ability to grow beyond the inflation rate while continuing to invest in the projects on which we are building our future”.

Key Results at 31 March 2024

The Company’s core revenues amount to € 68,9 milioni, up by 1.5% compared to € 67.8 million in the first three months of 2023, thus exceeding the reference inflation rate. Media distribution services, which include revenues from RAI, generated a turnover of € 60.9 million, posting a 1.2% increase driven by the inflation indexing of underlying contracts, as well as by the full effect of regional DTT networks. Digital infrastructure recorded revenues of € 7.9 million, currently fully generated by tower hosting services, which increased by 4.1% also thanks to the positive trend of business with fixed wireless access and radio operators.

Adjusted EBITDA amounts to € 46.8 million, an increase of 5.3% compared to € 44.4 million recorded in the first quarter of 2023. In addition to higher revenues, Adjusted EBITDA benefited from reductions in all cost items, including energy (down € 0.3 million compared to a first quarter 2023 characterized by more expensive tariffs even after the benefit of tax credits) and personnel, as development activities drove to a higher portion of capitalized costs (€ +1.1 million compared to the first quarter of 2023). Adjusted EBITDA margin stood at 68.0% (it was 65.5% in the first three months 2023). Considering the impact of non-recurring costs (€0.1 million in the first quarter 2024 and absent in the corresponding period of 2023), EBITDA was €46.7 million, up 5.2%.

Operating profit (EBIT) amounts to € 34.9 million, an increase of 4.4% over € 33.4 million in the first quarter 2023, impacted by an increase of depreciation and amortization resulting from investment activities.

Net income amounts to € 23.8 million, an increase of 1.4% compared to the figure for the first quarter 2023 when it stood at € 23.5 million, also reflecting the effect of rising interest rates on financial charges.

Capex** typically limited in the first quarter, amount to € 5.3 million, of which € 4.4 million dedicated to development activities, in particular to the 5 edge data centers that will come into service as early as the second half of 2024. In the corresponding period of 2023, investments had amounted to € 6.0 million, including € 4.9 million in development activities.

Net invested capital***** amounts to € 303.1 million, with Net debti,iv closing at € 90.6 million (including the impact from the application of the IFRS-16 accounting standard for € 35.9 million) compared to € 104,9 million at 31 December 2023. The Net Debt reduction was driven by the recurring cash generationiii, equal to € 32.6 million (+5.3% compared to € 31.0 million recorded in the first quarter 2023), which is tipically strong in the first quarter of the year.

Outlook

In light of the results of the first three months, the Company confirms the targets for fiscal year 2024, which were provided during the presentation of the 2023 results in accordance with the evolution of strategic initiatives assumed in the Industrial Plan. In details, Rai Way expects:

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

The Board of Directors has also previously acknowledged the communication from the Board of Statutory Auditors regarding the positive outcome of the verifications and evaluations carried out by the latter on the existence of the independence requirements - provided for by law and by the Corporate Governance Code for Listed Companies° - of the members of the Board of Statutory Auditors, following their appointment by the Shareholders' Meeting held on 29 April, as well as ascertained the existence of the requirements of honorability and professionalism prescribed with regard to these members, as also considered by the Board of Statutory Auditors itself in its evaluations.

Rai Way announces that today, Friday 10 May 2024 at 5:30pm CET, the results of the first quarter 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 €1.4m in the first quarter 2024.

*** 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.

***** Net invested capital is calculated as the sum of fixed capital, working capital and non-current financial assets.
°It should be noted that the criteria of significance adopted for the assessment of independence referred to in Recommendation No. 7 letter c) and d) of the Corporate Governance Code - also applicable for Statutory Auditors by virtue of the provisions of Recommendation No. 9 of the Code itself - are those indicated within the framework of the Report on Corporate Governance and Ownership Structure of Rai Way for the year 2023.

For table see attachment