Eprice : Press Release ePRICE 9M 18

PRESS RELEASE

ePRICE 9M: RESULTS OF COST CONTROL INITIATIVES CONFIRMED, LARGE

DOMESTIC APPLIANCES AND MARKETPLACE RESUME GROWTH.

REMARKABLE REDUCTION IN CASH CONSUMPTION.

• • Reduction of losses almost halved in first nine months of 2018 vs. first nine months of the previous year, EBITDA at Euro -6.4M vs. Euro -11.1M in 9M 17 (-42%). In Q3 EBITDA at Euro -2.2M vs. Euro -3.4M in Q3 17

• • Net result at Euro -10.2M, an improvement of 35.3% YoY (Euro -15.8M in 9M 17). Q3 at Euro -4.5M vs. Euro -5.5M in Q3 17

• • Significant and progressive reduction in cash absorption (13,3M in Q1, 1,5M in Q2 and 0,8M in Q3) which goes from Euro 40,4M in 9M 17 to Euro 15,6M in 9M 18, with net liquidity at Euro 5.7M.

• • with net liquidity at Euro 5.6M at 30 September 2018 (

• • Revenues at Euro 112.6M (-14.9% vs. 9M 17) and GMV1 at Euro 160M (-10.3% vs. 9M 17), down year over year as expected from the implementation of the Strategic Guidelines, improving on a quarterly basis with Q3 GMV at -6.1% and Q3 revenues at -9.3% compared to Q3 17.

• • Marketplace grew 20.2% YoY in the first 9M to Euro 24.7M vs. Euro 20.6M in 9M 17.

• • Resumption of growth and stability in market share for large domestic appliances, with double-digit YoY growth in Q3.

• • Gross margin stood at 16.3% of revenues vs. 14.8% in the first nine months of 2017, +150 bps YoY 9M. Q3 18 records a growth in margins to 16.1% vs. 15.3%, +80 bps YoY)

• • Positive change in working capital of Euro 0.1 million in Q3 18 compared to a negative change of Euro 5.1 million in Q3 17

• • FY 18 guidance confirmed as a result of the acceleration expected in Q4, with a decrease in revenues on an annual basis due to the considerable shift in volumes of long-tail categories to the Marketplace during the first half of the year.

Milan, 8 November 2018

The Board of Directors of ePRICE, Italy's first national e-Commerce platform, listed on the STAR segment of the Italian Stock Exchange, has approved today the results as of 30 September 2018.

"In the third quarter of 2018, ePRICE confirms the effectiveness of actions taken to achieve balance in the accounts and resume growth. We emphasise several positive figures, such as the improvement in margins in percentage terms, which is confirmed to be 150 bps higher in the first nine months compared to last year, and the EBITDA loss, which was nearly halved," observes Paolo Ainio, Chairman and CEO of ePRICE."In the context of the online Tech & Appliances market, which is showing an encouraging recovery compared to a year ago, but for which there are still several unknown factors related to the country's economic and political scenario, ePRICE has resumed growth in the core segment of Large Domestic Appliances and on the 3P Marketplace, with double-digit growth in the first nine months for both segments. These results were achieved with a marketing investment during the third quarter that was more than optimised, following the painstaking work on SEM costs and the considerable improvement in traffic brought about by SEO activities. The delta between revenues and GMV of a year ago and the current Q3 is significantly reduced, confirming a trend of stabilisation of the top line with a healthy and sustainable cost structure. We are confident that the fourth quarter will further validate these assumptions.

1

Gross Merchandise Volume: includes revenues from the sale of products, deliveries and the volume generated by the 3P Marketplace, net of returns andVAT included. Infocommerce and B2B are not included.

Results as at 30 September 2018

For 9M 18, ePRICE revenues amount to Euro 112.6 million. Therefore, the decrease in revenues over the 9M period is 14.9% compared to 9M 17, and 9.3% for Q3 vs. Q3 17, a figure, however, that shows a marked improvement compared to the previous quarters. The 9M figure is penalised by the comparison with the first half of the previous year, when the strategy of shifting volumes of the long-tail categories to the 3P Marketplace was not in place.

The GMV2 - which represents customers' spending on our e-Commerce sites and on the Marketplace - declined by 10.3% compared to the previous year, amounting to Euro 159.9 million compared to Euro 178.3 million in 9M 17. Volumes increased due to the weight and contribution of the Marketplace, which was launched in Q2 15 and accounting for 19% of GMV in the first nine months of 2018, compared to 14% of GMV1 for 9M 17 and 10% for 9M 16.

Revenues and GMV

(in millions of Euro)	9M 18	9M 17	% Change
Revenues	112.3	132.3	-14.9%
GMV1	159.9	178.4	-10.3%

Revenues and GMV by product type

Revenues (Euro million)

Q3 18

Q3 17

% Change

GMV2 (Euro million)

Q3 18

Q3 17

% Change

38.3

-9.3%

55.3 -6.1%

Revenues

3.4

-8.7%

37.7

41.6

-9.3%

GMV

1.5 -11.7%

53.3

56.8 -6.1%

Revenues (Euro million)

9M 18

9M 17

% Change

GMV2 (Euro million)

9M 18

9M 17

% Change

Electronic goods, domestic appliances and other products

102.5

121.3

-15.5%

Electronic goods, domestic appliances and other products

155.2

173.1 -10.4%

Services/Other revenues3

Revenues

11.0

-8.1%

112.6

132.3

-14.9%

GMV

5.2 -9.2%

159.9

178.3 -10.3%

In 9M 18, ePRICE recorded Euro 132.3 million in revenues and Euro 102.5 million from product sales. As envisaged in the Strategic Guidelines presented on 8 March 2018, the decline in volumes began to slow down in the third quarter due to the shifting of some categories to the 3P Marketplace and a policy aimed at streamlining marketing costs. In Q3 18, the downward trend in revenues and GMV slowed compared to the previous quarters (-9.7% on revenues, -6.1% on GMV), including in relation to Q3 17, when the switching of volumes to the 3P Marketplace began.

Contrary to this general decline in volumes, the GMV for Large Domestic Appliances grew 10.4% in the first nine months of 2018 and 21.5% in the third quarter, whilst revenues for Large Domestic Appliances increased by 9.4% YoY in the first nine months compared to 23.2% in the third quarter.

2 Gross Merchandise Volume: includes revenues from the sale of products, deliveries and the volume generated by the 3P Marketplace, net of returns and VAT included.

3 Service revenues include transport services, warranties, B2B revenues and other revenues. Services GMV does not include B2B, advertising/Infocommerce. Revenues from guarantees were reclassified among service revenues for the entire year.

Revenues from the sale of Services and Other, which also includes warranties, fell in comparison to 2017 (-8.1% vs. 9M 17), with a downturn that was less than that of the volumes of product sales. Home Service posts an NPS4 above 60, and represents an important lever for differentiation and a driver of market share. The total NPS of ePRICE increased in the first nine months of the year compared to the previous year, from 50 to 58, reflecting the initiatives on platform quality and the delivery service during the reference period.

As at 30 June 2018, the Pick&Pay and Lockers network, unique for the Italian market, numbered 130

Pick&Pays and 298 Lockers (134 and 290, respectively, as at 30 September 2018).

The GMV of ePRICE was supported by the 3P Marketplace, which reached 1,753 merchants and achieved growth of 19% in the 9M period compared to 9M 17, driven by the electronics and mobile phones segment. The growth in the Marketplace's GMV corresponds to that of the reference market, though slowed by seasonal factors in the third quarter (many small Italian merchants are closed for holidays in August).

(Key Performance Indicators)

Key Performance indicators5	Q3 18	Q3 17	% Change	Key Performance Indicators5	9M 18	9M 17	% Change
Orders (thousands)	162	200	-19.1%	Orders (thousands)	522	627	-16.7%
AOV (Euro)6	268	231	15.9%	AOV (Euro)6	249	231	7.6%
Buyers (thousands)7	130	152	-14.4%	Buyers (thousands)7	357	409	-12.7%

In the first nine months, 522 thousand orders were managed with an average value (AOV5) of Euro 249, up 7.6%, mainly driven by the mix towards high-ticket categories for large domestic appliances and the switch of long-tail categories to the Marketplace. Lastly, the number of buyers came to 357 thousand, down by 12.7% as compared to the previous period, due to lower marketing investments.

Gross Profit was Euro 18.4 million, down Euro 1.2 million or 6.2% compared with the corresponding period of the previous year, presenting a much lower drop than that of revenues. In percentage terms, the Gross Profit to Revenues ratio came to 16.3%, a marked improvement from 14.8% recorded in the first nine months of 2017. In the third quarter, the Gross Profit to Revenues ratio was 16.1%, an additional improvement compared to 15.3% recorded in the third quarter of 2017. This confirms the strategy announced during the presentation of the Business Plan aimed at recovering margins by developing the Marketplace and obtaining greater profits from core categories, especially household appliances, on which revenues and the reviewed pricing policy are focused.

Adjusted EBITDA stood at Euro -7.8 million, a substantial improvement from Euro -10.0 million in the first nine months of 2017. Adjusted EBITDA was negatively affected by the impact of the consolidation of the equity investment in Installo for approximately Euro 247 thousand.

The improvement in adjusted EBITDA was particularly significant beginning in the second quarter of 2018, with an increase of Euro 3.2 million, which more than offsets the negative difference recorded in the first quarter. The considerable positive variation is due to the reduction in all cost items as a result of the efficiency measures undertaken during the first nine months. In particular, personnel costs fell by more than 15% in the first nine months of 2018 and 17% in the third quarter alone.

Sales and marketing costs dropped by 6.3% compared to the first nine months of 2017, proportionally less than the reduction in revenues. This corresponds to the higher costs incurred by TV advertising campaigns and sponsorships of the Radio Italia concert and F.C. Internazionale Milano.

Marketing costs to acquire customers decreased by 11% in absolute terms in the first nine months of 2018 compared to the same period of 2017. This downward trend increased significantly during the third quarter of 2018, amounting to a 29% reduction compared to the third quarter of 2017.

4 The Net Promoter Score is an index between -100 and 100 that measures the willingness of customers to recommend products or services of a company to others. It is used as a proxy to measure overall customer satisfaction with a company's product or service and customer loyalty to the brand.

• 5 Including the 3P marketplace.

• 6 Average order value (excluding VAT).

• 7 Customers with at least 1 order in the period.

Logistics costs decreased by 0.4% as compared to the first nine months of 2017, while the reduction excluding the consolidation of Installo was 2.3%. This cost item is closely linked to the performance of sale and revenue volumes in household appliance categories, which posted growth over the first nine months of 2018 compared to the previous period; therefore, this reduction in costs is due to the efficiency measures relating to some implementing processes over the year. Note that, beginning in the third quarter, logistics activities carried out for Saldiprivati were concluded due to the early termination of the contract by SRP Group. This resulted in higher warehouse charges in the quarter for around Euro 250 thousand.

IT costs fell by 25% compared to the first nine months of last year due to the process of optimising costs and renegotiating certain contracts. The decrease in IT costs is especially evident during the third quarter (-52.5% compared to the third quarter of 2017).

General and administration expenses decreased by 41.0% (-43.3% excluding the impact of the Installo consolidation), a particularly significant drop compared to the first nine months of last year, due to the decline in corporate costs and renegotiation and optimisation of some general costs. In the course of the second quarter, this cost item benefited from the contribution recorded for research & development activities for the parent company Eprice S.p.A. in 2017 for Euro 860 thousand and, in the third quarter, from the contribution from research and development activities for the subsidiary Eprice Operations Srl for Euro 852 thousand.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) for the first nine months of 2018 came to Euro -6.2 million compared to Euro -11.1 million in 2017, an increase of Euro 4.9 million. Stated as a percentage of revenues, it went from -8.4% for the first nine months of last year to -5.5% for the first nine months of 2018, an improvement of 290 bps.

This item includes income of Euro 2.0 million for the agreement entered into with the SRP Group (Showroomprivè) in relation to early termination of logistics activities carried out for Bnk4-Saldiprivati.

EBIT totalled Euro -12.8 million, compared with Euro -16.2 million in the first nine months of 2017. This improvement was due to the increase in EBITDA, as described above, partly offset by greater amortisation and depreciation, which increased by 29% as a result of significant investments made over 2017, particularly for the implementation of the new corporate ERP system and the new logistics centre in Truccazzano.

EBT from operating activities was Euro -13.5 million, compared with Euro -16.5 million in the first nine months of 2017.

Net earnings before tax (EBT) in the first nine months of 2018 totalled Euro -10.2 million, as compared to Euro -15.8 million for the first nine months of 2017; this was also due to earn-outs accrued following the sale of Banzai Media and Saldiprivati.

As at 30 September 2018, the Group reported net liquidity of Euro 5.7 million. The difference between this amount and that of 31 December 2017 is mainly due to funds used for operations amounting to Euro 14.4 million, of which the change in working capital absorbed Euro 8.7 million. The change in working capital was primarily due to a reduction in trade payables and derives from those seasonal fluctuations typically associated with the fourth quarter, which led to higher purchasing. Note that in the third quarter, the change in working capital was positive for Euro 0.1 million compared to a negative change of Euro 5.1 million in the third quarter of 2017, primarily due to optimisation of warehouse inventories. During the third quarter of 2018, a receivable was collected for Euro 2 million from Showroomprivè following the early termination of the logistics contract for Saldiprivati. The investing activities involved the use of funds equal to Euro 0.2 million, benefiting from the sale of the Sitonline business for Euro 1.2 million, as well as from the earn-out for the sale of Banzai Media for Euro 0.8 million. During the period, the Group obtained a short-term loan of Euro 5 million, with repayment expected within 12 months.

Other Events

• • Agreement to sell Large Domestic Appliances on Amazon

On 1 August 2018, the Group announced that it had launched sales of Large Domestic Appliances on the Amazon Italia platform. With the Amazon store, ePRICE enriches the offer of Large Domestic Appliances of the leading Italian e-Commerce site, with thousands of products chosen from among the best in the category, whilst the entire catalogue and the wide range of related services will continue to be available on ePRICE.it. The offer of ePRICE on Amazon will be gradually developed: it is already possible to buy the first products with street-level delivery, and after the summer, Amazon customers will benefit from the complete catalogue and delivery to upper floors and professional installation services provided by ePRICE.

• • Three-year partnership with F.C. Internazionale Milano

On 30 July 2018, ePRICE and F.C. Internazionale Milano announced that they had reached a partnership agreement that entails considerable visibility of ePRICE brands on all digital and physical properties of Inter, and special events at key points during the year, with targeted initiatives aimed at Inter football supporters. The agreement signed by ePRICE and FC Internazionale Milano provides for the association of ePRICE with the Inter brand on the Italian market.

Significant Events After the Close of the Period

• • The Group continued to diversify its sources of financing and, in particular, obtained a medium-term unsecured loan of Euro 1 million, an overdraft credit line of Euro 650 thousand, and advances for the sale of a VAT receivable for Euro 587 thousand.

• • Agreement to sell the equity investment in DOING

Following the sale of DOING to CAP Gemini Group, ePRICE announced on 31 October 2018 that it had sold its minority share, equal to 16% of the company, for a value of approximately Euro 2.5 million.

The Executive Officer in charge of preparing the corporate accounting documents, Emanuele Romussi, declares, pursuant to Article 154-bis, paragraph 2 of the Consolidated Finance Act, that the accounting information contained in this press release is in keeping with the underlying accounting documents, records and accounting entries.

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The press release is available on the websites corporate.eprice.it andwww.1info.it.

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