Annual Report

2021

Our Mission

Renewing the pleasure of your Daily-Break

Chairman's letter

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Annual Report 2021 · Profile

2021 was one of the most significant years in our group first 50 years of operation.

Firstly, the global and market scenario in which we operated was still heavily impacted by the Covid-19 pandemic, the health and economic effects of which, despite gradual improvement, continued to affect our industry, target markets and entire business operations. Although there were no rigid – and at times general – lockdowns, which many sectors were subjected to during the most challenging periods of 2020, 2021 also witnessed, especially in the first quarter, phases where the conditions in which the company could operate were highly uncertain and volatile.

Consumption and turnover gradually recovered, but remained far from pre-pandemic levels. In this context of an equal or greater number of customers, for whom it was imperative to ensure continuity and high-quality services, but with lower consumption, IVS had to continuously adapt its organisation and logistics; a very considerable commitment involving the whole company, which demonstrated remarkable flexibility at every level.

From an economic and financial standpoint, the lower volume of products sold compared to the past made it necessary to continue paying the utmost attention to all cost categories, an effort that nevertheless made it possible to maintain relatively satisfactory margins, proof of IVS’s resilience in the face of an objectively complex market situation. On the financial front, the robust development policies introduced during the years preceding the Covid crisis enabled investment to be reduced, while maintaining the group technical excellence and improving cash flow.

These measures strengthened the financial position, and, even more importantly, the Group demonstrated that it could still deliver good results with fewer

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Annual Report 2021 · Profile

resources and less investment: this experience certainly reinforced the skills of all the staff and thereby increased the potential for future development.

The knowledge that we can successfully conduct our business even in challenging circumstances made it possible, in late 2021, to take a further leap towards the necessary and inevitable process of consolidating our sector, in line with the strategy IVS has been pursuing for years. The relative strength with which we managed to emerge from the worst crisis in the vending sector laid the foundations – in terms of management and financial credibility – for us to carry out highly strategic mergers with two other historic and outstanding operators in our sector – the Liomatic group and Ge.S.A.. – with which IVS shares a very similar history, corporate culture and core values.

These operations will be concretely implemented in the course of 2022 and will be reported for the first time in next year’s budget, but accrued during 2021.

This large-scale merger will result in the formation of

a new group, which will not only be more substantial in numerical terms, but will also boast even greater operational capacity, and will act as a benchmark for the entire vending sector and the whole chain of commercial and strategic partners connected to vending for many years to come. The new group will also be able to expand the positive impact of its work to benefit people, environments and social contexts in which it operates by combining the expertise and skills of each partner.

A year ago, at the height of the Covid emergency, we foresaw that the evolution of the market would involve new and major changes, but we were confident that IVS Group had all the technical skills, as well as human and financial resources, needed to successfully meet this demanding challenge. Today, we are witnessing the soundness of our group vision and strategy. There is still a lot of hard work to be done, but our core values, human resources and expertise allow us to look to the future with renewed confidence.

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Annual Report 2021 · Profile

SHARE

Trend

Volume

Trend

Volume

SENIOR UNSECURED NOTES 20

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Annual Report 2021 ·Profile

Vending Machines

Automatic Vending Machines (AVMs)

*Of which n. 26.1 thousand (11.3%) arising from Italian business leased in Sicilia region

~232.1K*

46.6%(108.1K*)

53.4%(124.0K)

Office Coffee

Service (OCS)

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Annual Report 2021 ·Profile

Income in 2021 P/L due to application of the amendments to IFRS 16 for Covid-19:

Variation of cost adj. (€/thousands)

Redevances

+4.6%

(-36.6%)

Personnel costs

+7.6%

(-17.9%)

Other costs

+12.5%

+3.5%

Leases

Number of branches

66

in Italy

2

in Switzerland

15

in Spain

4

in France

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Annual Report 2021 · Profile

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Annual Report 2021 · Profile

Wide geographical footprint with significant opportunities to enhance local density

IVS is the market leader in the Italian vending machine operator's sector, with a nationwide operations

A significant presence in foreign European markets (second player in Europe and in Spain)

Profitable operations in each market

IVS is the only public listed vending company

The Group’s strategy will be focused on strengthening local density in a number of regional markets, enabling IVS to better leverage its fixed cost base by building local concentration in strategic towns and areas

Leading consolidator

in the domestic market

Significant competitive advantage in identifying, executing and integrating acquisitions relative to its peers, demonstrated by a proven track record

More than 195 companies or business units have been acquired by IVS since 2007

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Annual Report 2021 · Profile

'72

'06-'08

'12-'14

'15-'16

'09-'11

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Annual Report 2021 · Profile

'21

'17-'18

'19-'20

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Annual Report 2021 · Profile

Business Model

Key figures by product (%) - (2021)

Vending Machines

Vends

Sales

Vending Machines

Vends

Sales

46.6

11.3

9.1

Vending Machines

Vends

Sales

27.4

29.1

29.1

39.1

38.1

26.0

27.2

59.6

61.4

51.8

53.8

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Annual Report 2021 · Profile

Simple, lean and highly cash generating business model

IVS Group purchases the machines from manufacturers, installs them at the clients’ sites and maintains them

Revenues are generated from purchases made by the end consumers in the location where the machines are installed

IVS, although not being a manufacturer, has a very strong technical expertise in vending machines production. This skill is used in the internal departments where the revamping of the VMs is carried put, and allows also IVS to co-work with the VMs manufacturers, investing in the possible innovations and developing the state of the art applications for the industry. Such a capacity represents a real competitive advantage, giving in some cases the right to use first and / or on exclusive basis, for certain periods, new models of vending machines, new IT and other digital applications, as in the telemetry or payments systems.

Vending Machines

Vends

Sales

Key figures by location (%) - (Auto VMs, 2021)

Vending Machines

Vends

Sales

TRAVEL

Average sales

(000)/VM

ASP

(EUR cent)

3.0

3.8

3.1

8.9

6.7

71.2

69.4

63.7

72.7

70.8

66.1

Vending Machines

Vends

Sales

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Annual Report 2021 · Profile

Company Officers

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Annual Report 2021 · Profile

Boards of Directors

Paolo Covre

Chairman

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Annual Report 2021 · Profile

Group Structure

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Annual Report 2021 · Profile

The IVS Group presents the following structure as of December 31th, 2021:

100 %

IVS GROUP S.A.

IVS Italia S.p.A.

100 %

CSH S.r.l.

100 %

S. Italia S.p.A.

100 %

Demomatic S.A.

92.5 %

20 %

Breakcotto S.r.l.

impresa sociale

99 %

87 %

IVS Group

Swiss S.A.

in liquidation

90 %

13 %

IVS France S.a.S.

80 %

1 %

S.C.I. +39

MB Web S.a.S.

Commerciale Distributori S.r.l.

100 %

Universo Vending S.p.A.

Ciesse Caffè S.r.l.

Ge.O.S. Group S.p.A.

Time Vending S.r.l.

(Joint Ventures

with Cremonini)

50 %

33.3 %

5 %

5.4 %

Distribuzione 2003 S.r.l.

100 %

A.G. Consulting S.r.l.

100 %

Olympo

S.r.l.

50 %

SDA-DDS S.p.A.

Eurovending S.r.l.

IVS Sicilia S.p.A.

Wefor S.r.l.

100 %

70 %

100 %

100 %

Valor Vending

S.L.U.

100 %

25 %

75 %

D.A.V.

S.L.

Man24 S.r.l.

100 %

65 %

IVS H24

S.r.l.

IVS Holland B.V.

in liquidation

28 %

Moneynet S.p.A.

76 %

Aora Vending Sp. z o.o.

60 %

Venpay S.p.A.

60 %

2.1 %

2.2 %

Coinmat S.r.l.

Coin Service Nord S.p.A.

53.3 %

Centy S.r.l.

Coin Service S.p.A.

92.7 %

44.4 %

15 %

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Annual Report 2021 · Profile

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Annual Report 2021 · Profile

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Annual Report 2021 · Profile

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Annual Report 2021 · Profile

Management Report

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Annual Report 2021 · Management Report

Management Report

Dear Shareholders,

The IVS Group’s Consolidated Financial Statements as at December 31st, 2021 (the “Consolidated Financial Statement”), drawn up under the International Financial Reporting Standards approved by European Union (IFRS), show a profit for the year of EUR 5,855 thousand, after a tax benefit of EUR 9,914 thousand, amortization and depreciation of EUR 59,619 thousand and financial expenses of EUR 14,816 thousand.

The annual accounts (the “Annual Accounts”) of IVS Group S.A. (the “Company” or the “Parent”), which are prepared under the Luxembourg national accounting standards, show a loss of EUR 676 thousand after a tax benefit of EUR 471 thousand.

We have our registered office at 18 Rue de l’Eau, L-1449 Luxembourg, the Company is registered with the Luxembourg Register of commerce and companies (the “RCSL”) under number B 155.294, and our operational headquarter is in Seriate, Italy and our Shares (as defined in section “Shares issued”) are listed on the Italian Stock Exchange.

The Parent has prepared a single directors’ report, following enactment of EC directive no. 2013/34/EU, as amended, on the accounting harmonization between Member States.

In this document, we present certain measures, including EBITDA, EBITDA Adjusted, EBIT, EBIT Adjusted, Net Financial Indebtedness and Net Financial Position, Net fixed assets, Net working capital, Total Net Revenues, Net profit/(loss) for the year Adjusted and Gross Margin that are or may be considered Alternative Performance Measures (“APMs”) as defined by ESMA Guidelines on APMs. These financial measures are better described and reconciliated with line items of the Consolidated Financial Statements, which are prepared in accordance with International Financial Reporting Standards as adopted by EU (IFRS), in section “Alternative Performance Measures”.

In addition, 2020 consolidated figures have been restated in order to reflect the finalization of purchase price allocation provisionally accounted in previous Consolidated Financial Statements. Further details on the restated figures are provided in paragraph “Basis of preparation of the financial statements” in the Explanatory notes to the Consolidated Financial Statements.

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Annual Report 2021 · Management Report

COMPANY OVERVIEW1

The IVS Group is the second largest vending machine operator in Europe (a highly fragmented market) and the only public listed vending company, as reflected in the figures published by the EVA (European Vending Association). According to the latest report of CONFIDA, the Italian association of vending sector companies (based on 2020 figures), IVS is the most important operator in Italy.

Italy represents IVS Group principal market (75.7% of Group’s total revenues, 77.3% in the year ended December 31st, 2020); nevertheless, IVS Group also operates in the French, Spanish and Swiss markets, where sales for the year ended December 31st, 2021 represented, respectively, approximately 8.8%, 8.1% and 0.7% of the total revenues, (6.6%, 8.7% and 0.7% in the year ended December 31st, 2020). The Coin Division (the “Coin Division”), active in Italy, represents 6.7% of the total revenues (6.7% in the year December 31st, 2020).

With around 50 years of experience in the vending industry, IVS Group is the first Italian player with a nationwide presence.

BUSINESS OVERVIEW

IVS Group manages its activity by two business divisions: the Vending division, with operations in Italy, Spain, France and Switzerland, and the Coin Division, related to coin management, e-money and payment services businesses with operations based only in Italy.

Vending division is vertically integrated to operate in the preparation and testing of new vending machines and in the revamping of the vending machine uninstalled from clients’ sites.

At December 31st, 2021, IVS manages a network of approximately 232,117 vending machines (224,937 at December 31st, 2020), of which 123,971 full automatic vending machines and 108,146 office coffee service

1. Cautionary Statement Concerning Forward-looking statements

This annual report and any other oral or written statements made by us to the public may contain “forward-looking statements”. Forward looking statements are based on management’s current views and assumptions and involve known and unknown risks that could cause actual results, performance or events to differ materially from those expressed or implied by those statements.

We use words such as “aim”, “will likely result”, “will continue”, “contemplate”, “seek to”, “future”, “objective”, “goal”, “should”, “will pursue”, “anticipate”, “estimate”, “expect”, “project”, “intend”, “plan”, “believe” and words and terms of similar substance to identify forward-looking statements, but they are not the only way we identify such statements. All forward-looking statements are management’s present expectations of future events and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These factors include the risks related to our business discussed under “Principal Risks and Uncertainties”, among them, the following:

- our ability to implement our business strategy or to grow through acquisitions, joint ventures and other investments;

- the competitive environment in our business and our industry;

- our ability to price our products and services in accordance with our strategy;

- general macroeconomic and political conditions and developments in the countries in which we operate;

- fluctuations in costs related to fuel and transportation inputs, food, coffee and other commodity prices;

- impact of seasonal variation and abnormal weather;

- loss of major customers and/or inability to establish new customer relationships;

By their nature, certain disclosures relating to these and other risks are only estimates and could be materially different from what actually occurs in the future. As a result, actual future gains or losses that may affect our financial condition and results of operations could differ materially from those that have been estimated. You should not place undue reliance on the forward-looking statements, which speak only as of the date of this annual report.

Except as required by law, we are not under any obligation, and expressly disclaim any obligation, to update or alter any forward-looking statements, whether as a result of new information, future events or else.

machines, located at corporate offices, institutions and public places, through which IVS sells a broad range of products, including hot and cold beverages, in-between meals, snacks and confectionary (the “Vending Business”).

IVS Vending Business has been disrupted by the COVID-19 pandemic and the following temporary blanket travel restrictions, ban on public events, increase in smart working, closures of schools, university and public spaces such as movie theaters, and reduced customer traffic. For further details please refer to section “Significant events of 2021 – COVID-19”.

The total number of vends during 2021 was equal to 652,505 thousand, (+7.4%) from 607,348 thousand of the previous year, but they are still far from pre-pandemic (-24.8% in comparison to the year ended December 31st, 2019). The vending revenues increased from EUR 284,841 thousand for the year ended December 31st, 2020 to EUR 313,490 thousand for the year ended December 31st, 2021 (+10.1%), this is mainly due to the gradual easing of restrictions due to Covid-19 pandemic since the second quarter in all market served by the Group (Italy, France, Spain and Switzerland). The increase in vending revenues is due to volumes effect for EUR 11.4 million in Italy and 4.3 million in France, and to increase in average selling price per vend from 46.90 Euro cents to 48.04 Euro cents for total EUR 8.3 million (net of the effects of acquisitions of business units). We recorded a partial recovery in the volumes of sectors such as travel and public, that usually enjoy higher average selling prices and value added.

In addition to Vending Business, IVS also operate a coin service business (“Coin Service Business”), through subsidiaries acquired in March 2011 (with reference to coin management) and in July 2019 (with reference to e-money and payment services) in conjunction with minority partners.

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Annual Report 2021 · Management Report

Coin Service Business operates management of “metallic money” (coins), including their collection, packaging and delivery for approximately EUR 2,000,000 thousand equivalents in coins, for a variety of customers, including our Vending Business and other customers, such as banks, mass-retailers, third party vending operators, parking operators, train stations and highway toll stations. In the year ended December 31st, 2021, our Coin Service Business generated approximately 6.7% of total revenue, and 4.9% of our EBITDA Adjusted.

The Coin Division turnover increased such as in Vending business, due to the gradual easing of restrictions

due to Covid-19 pandemic event, both in the core management (counting of coins for third parties, cash-in-transit services, collection and distribution of coins) and in the digital money business (Venpay S.p.A.) approximately by 9.2% and 28.9% respectively.

The Coin Division started in 2018 the development of new digital applications, telemetry and payment systems for the vending industry and since July 2019, through the acquisition of Moneynet S.p.A. (a payment institution authorized by Italy’s Central Bank), this division has expanded its business, that now includes payment services and technical assistance of electronic and card-based payment devices (POS).

SIGNIFICANT EVENTS OF 2021

Acquisition of business units and shares

During the year 2021, IVS Group finalized the acquisition of the following business units and shares of company operating in Vending Business:

With effect from January 1st2021, the Italian subsidiary Fast Service Italia S.p.A. and Til Caff S.r.l. have been merged into the subsidiary IVS Italia S.p.A.

On April 1st, 2021, IVS Italia S.p.A. acquired the 70% of Italian company IVS H24 S.r.l. (incorporated by DAI24 S.r.L.), active in Liguria region, for a provisional consideration transferred of EUR 2,135 thousand and in the contest of this transaction, IVS Italia S.p.A. sold to a director of the company the 1% of IVS H24 S.r.l..

On May 31st, 2021, and on July 27th, 2021 the Group, through its Italian subsidiaries acquired two vending business units: Dorando Service S.r.l., active in Emilia Romagna region and Fine Food S.r.l. active in Toscana region, for a consideration transferred respectively of EUR 717 thousand and EUR 104 thousand.