Seco S p A : Six-month financial report as of June 30, 2023

SECO S.p.A.

HALF-YEAR FINANCIAL REPORT AT JUNE 30, 2023

SECO S.p.A.

Registered office in Arezzo, via A. Grandi 20

Share capital Euro 1,296,333.53

VAT No. 00325250512

Arezzo Companies' Registration No. 4196

CONTENTS
CORPORATE BOARDS	3
THE GROUP AND ITS OPERATIONS	4
DIRECTORS' REPORT	5
Market Overview	5
Operational overview	5
Research and Development and Technological Innovation	7
H1 Operating performance	8
Sales revenues by region	8
Alternative operating performance measures	8
Alternative financial performance measures	10
SECO on the stock exchange	11
Subsequent events	11
Outlook	12
CONDENSED CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS AT JUNE 30, 2023	13
Consolidated Balance Sheet	13
Consolidated Income Statement	14
Consolidated Comprehensive Income Statement	15
Consolidated cash flow statement	16
Consolidated Statement of Changes in Equity	17
NOTES TO THE CONDENSED CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS AT JUNE 30, 2023..	19
Accounting standards and basis of preparation	19
Notes to the Balance Sheet	30
Notes to the income statement	40
Related party transactions	43
Remuneration of Directors, Statutory Auditors and independent audit firm	48
Subsequent events	48
DECLARATION OF THE HALF-YEAR FINANCIAL REPORT PURSUANT TO ARTICLE 81-TER OF CONSOB
REGULATION NO. 11971 OF MAY 14, 1999 AND SUBSEQUENT AMENDMENTS AND SUPPLEMENTS	49

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CORPORATE BOARDS

Board of Directors

Office held until the approval of the 2023 annual accounts

Chairperson	Daniele Conti
Chief Executive Officer	Massimo Mauri
Directors	Claudio Catania
	Emanuela Sala
	Luca Tufarelli
	Luciano Lomarini
	Michele Secciani
	Elisa Crotti
	Valentina Montanari1
	Diva Tommei
	Tosja Zywietz

Board of Statutory Auditors

Office held until the approval of the 2023 annual accounts

Statutory Auditors	Pierpaolo Guzzo (Chairperson)
	Gino Faralli
	Fabio Rossi
Alternate Auditors	Marco Badiali
	Maurizio Baldassarini
Executive Officer for Financial Reporting	Lorenzo Mazzini
Independent Audit Firm	Deloitte & Touche S.p.A.

1 Co-opted by the Board of Directors on December 22, 2022, to replace Giovanna Mariani, who passed away on November 4, 2022. This director will remain in office until the next meeting of shareholders called to confirm the appointment until the end of the term of the full board.

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Office held until the approval of the 2029 annual accounts

THE GROUP AND ITS OPERATIONS

The SECO Group (hereinafter also referred to as the "Group" or "SECO") consists of the parent company SECO S.p.A., hereinafter also referred to as the "Company" or "Parent Company", and its subsidiaries, as presented below:

The Company's registered office is located in Arezzo (AR), via Achille Grandi 20.

SECO is a high-tech enterprise that develops and delivers cutting-edge solutions for the digitization of industrial products and processes. SECO's hardware and software offerings enable B2B enterprises to introduce edge computing, Internet of Things, data analytics and artificial intelligence into their businesses. Within a quickly and broadly evolving marketplace, SECO's technologies encompass many fields of application, with innovative and customized solutions provided to its more than 450 customers, in sectors such as the Medical, Industrial Automation, Fitness, Vending and Transportation areas, in addition to many others.

It is indicated that the company Aidilab Inc. is inactive.

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DIRECTORS' REPORT

Market Overview

As digital technologies become ubiquitous, we are entering an era of interconnected devices, analytics, and artificial intelligence. The increasing number of intelligent devices - which can process data at the source (edge computing) and are connected to the cloud - is opening the door to new business models, creating major development opportunities, and helping to improve people's overall safety and quality of life.

The evolution of technologies such as the Cloud, Big Data and Analytics, Artificial Intelligence and the Internet of Things has accelerated the digital transformation of business processes worldwide, and the way in which companies approach the creation, provision and use of ICT products and services.

In the current environment, speed of execution and time to market are key aspects not only for competitivity, but also for a business's survival. We are witnessing across the globe a strong drive towards digitalization.

In our post-pandemic climate, this trend has significantly accelerated, with digitalization spreading to many sectors and environments of daily life which historically were far removed from this world. This trend has also advanced significantly in the industrial environment, where businesses across all sectors increasingly require more innovation, digitalization and interconnection among their products.

Climate change and issues surrounding raw material and energy supply have combined to make accelerating the digital transition increasingly crucial. Against this backdrop, digitalization will play a key role. Through Artificial Intelligence, it will offer advanced tools to support renewable energy, energy efficiency, and reduced consumption of industrial and personal devices.

The many relaunch and investment incentives programs underway in numerous countries shall contribute to further speeding up these trends, ensuring growth of the connected devices and IoT market comfortably in the double-digits, as indicated by all of the most trusted sector studies.

Operational overview

The Group's solid expansion over recent years was again confirmed in H1 2023. The development of new edge computing products and new CLEA (the proprietary IoT software platform) functionalities continued in the first six months of 2023. CLEA is a key linchpin in the strategy we have undertaken at SECO with the goal of increasing the value created for our customers by offering a growing range of end-to-end, integrated, customizable solutions, thanks to the integration of micro-computing,human-machine interfaces, software platforms and digital services based on Artificial Intelligence models.

Along this strategic line of action, we are committed at SECO to further strengthening our presence and position in the IoT and AI market through a number of major agreements to add weight to our commercial offerings.

In January, SECO was selected by Axelera AI B.V. - a Netherlands-based company specializing in the development of technologies for edge-AI - as the sole developer for Europe of edge AI solutions based on the AI MetisTM AI

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