Bittnet Systems Hold

IT, Romania 11 May 2021 Bittnet Systems Hold

Transfer of coverage Price: RON 0.73 Price target: RON 0.79 (From RON 0.973) High growth for a high price

We transfer coverage of Bittnet Systems (BNET) and rate it a HOLD, with Expected events our price target (PT) cut to RON 0.79/share (from RON 0.973), implying

9% upside potential. Since our Buy call on BNET in October 2020, its 1Q21 results 14 May market cap has appreciated by 28%; despite this, we still appreciate the 2Q21 results 27 August company’s growth potential (we expect a 61% 2020-23E EBITDA CAGR), 2Q21 earnings call 31 August but we see no room for a short-term, rapid share price appreciation. On 3Q21 results 12 November our estimates, BNET trades at 2021-22E EV/EBITDAs of 12.1-8.2x, at 43- 7% premiums vs. its peers, and P/Es of 22.2-13.0x, at a 42% premium and Key data a 10% discount vs. its peers. We note that, as the company missed our 2020 forecasts (EBITDA 38% below our expectations), we have turned Market Cap RON 180.5m Free float 65% more conservative: now, our 2021E EBITDA and gross profit estimates Shares outstanding 247.2m are 14% and 12% below BNET’s budget. 3M ADTV RON 0.29m Major Shareholder Mihai Logofatu 13.35% 2021-22E EBITDA forecasts cut by 14-12%, to RON 14.2-19.8m. Following Bloomberg Code BNET RO the FY20 results, which came in below our expectations, we have turned more BET Index 11,591 conservative in our forecasts for Bittnet Systems: we have cut our 2021-22E sales forecasts by 12-11%, to RON 148.7-184.2m, EBITDA by 14-12%, to Price performance RON 14.2-19.8m, and net profit by 16-14%, to RON 8.1-13.9m. We note that the miss on the 2020 results was driven largely by delays in two IT segment YTD range RON 0.67-0.75 projects: 1) a project worth RON 5m in sales and a RON 0.8m gross margin, YTD performance 4.9% due to difficulties with hardware production and logistics; and 2) a RON 22m YTD relative performance -13.3% public project, due mainly to the parliamentary elections. Our 2021E forecasts are below BNET’s budget by 5% on sales (BNET: RON 157m), 14% on Bittnet 12M share price performance EBITDA (RON 16.4m) and 12% on gross profit (RON 12.7m). 0.9 BNET BET Index 0.9 Capital structure turns equity financed, mainly. In our forecasts, we reflect 0.8 the process of capital structure transformation through ongoing share issues. 0.8 We expect the number of ordinary shares to increase from 247.2m as of end- 0.7 2020 to 292.4m as of end-2021E, as a result of the February 2021 share issue, 0.7 in which BNET raised RON 10.7m, and the assumed conclusion of the 0.6 Servodata acquisition for EUR 1.4m, settled in shares. Moreover, we expect Jan-21 Feb-21 Mar-21 Apr-21 May-21 the successful issue of 20m preferential shares, which will be used for the early repayment of bonds, in line with the company’s strategy. We assume the new share issues will be concluded at RON 0.7/share, close to the current price.

BNET remains active in M&A. We believe that it is highly likely that the company will continue consolidating the Romanian and CEE IT markets, in order to reach its long-term target of EUR 100m in revenues in the next four years. In 1Q21, BNET announced its first cross-border transaction, as it agreed to purchase a 35% stake in Servodata, a Czech IT company, for EUR 1.4m (transaction EV/EBITDA at 6.4x). The multiple does not seem demanding for an IT company, which (according to its budget) could record 150% yoy growth in EBITDA and 50% yoy in net profit in 2021E.

Peer valuation. BNET trades at our 2021-22E EV/EBITDAs of 12.1-8.2x, at 43-7% premiums vs. its peers, and P/Es of 22.2-13.0x, at a 42% premium and a 10% discount vs. its peers. We believe that the company deserves a premium vs. its peers on the mid-term multiples, considering its growth profile, including a 2020-23E EBITDA CAGR of 61%, vs. the 17% peers’ median.

Year Sales EBITDA Net profit EPS P/E EV/EBITDA EV/sales ROE DPS (RON m) (RON m) (RON m) (RON) (x) (x) (x) (%) (RON) 2019 98.0 0.4 -4.6 -0.04 n.a. n.a. 2.1 -44.8% 0.00 2020 109.2 6.3 0.9 0.00 201.6 31.8 1.8 3.3% 0.00 2021E 148.7 14.2 8.1 0.03 22.2 12.1 1.2 11.9% 0.00 EQUITY 2022E 184.2 19.8 13.9 0.05 13.0 8.2 0.9 16.8% 0.00 2023E 219.5 26.5 18.8 0.06 9.6 5.7 0.7 18.4% 0.03 RESEARCH Analysts: Piotr Raciborski, CFA; Iuliana Ciopraga, CFA Warsaw: +48 222 221 551 E-mail: [email protected], [email protected] Website: www.wood.com

Contents

Company snapshot – HOLD, PT RON 0.79 ...... 3

Valuation ...... 4

Peer multiples ...... 6

Financial forecasts changes ...... 8

Risks ...... 9

Financials ...... 10

Important disclosures ...... 12

Closing Prices as of 07 May 2021

All rights reserved. No part of this report may be reproduced or transmitted in any form or by any means electronic or mechanical without written permission from WOOD & Company Financial Services, a.s. This report may not be lent, resold, hired out or otherwise disposed of by way of trade in any form of binding or cover other than that in which it is published without written permission from WOOD & Company Financial Services, a.s.

Requests for permission to make copies of any part of this report should be mailed to:

WOOD & Company Financial Services a.s. Palladium, Namesti Republiky 1079/1a, 110 00 Prague 1 – Czech Republic tel.: +420 222 096 111 fax: +420 222 096 222 http//:www.wood.cz

Bittnet Systems 2 WOOD & Company

Company snapshot – HOLD, PT RON 0.79

Bittnet Systems HOLD SHARE PRICE PERFORMANCE COMPANY DESCRIPTION Bittnet is the IT training market leader in Romania, and a leading IT integrator in the local Bloomberg ticker BNET RO 0.9 BNET market. Founded in 2007 by brothers Mihai and Cristian Logofatu, who still control 27% of Closing price (RON) 0.73 BET Index 0.9 the company, Bittnet listed on the Bucharest Stock Exchange’s alternative venue (AeRO) in Price Target (RON) 0.79 0.8 2015. In 2020, Bittnet was promoted to the main venue on the local stock exchange. What Upside to PT 9% 0.8 was largely a training company in its early days, it became an IT integrator as a result of Shares outstanding (m) 247.2 acquisitions, such as Gecad NET, Crescendo, Elian and Equatorial. In 2020, Bittnet 0.7 MCAP (RON m) 180.5 generated sales of RON 109.2m and EBITDA of RON 6.3m. 0.7 Free float 65% 0.6 3M ADTV (RONm) 0.29 Jan-21 Feb-21 Mar-21 Apr-21 May-21 YTD Range (RON) 0.67-0.75 RATIOS

PER SHARE RATIOS 2019 2020 2021E 2022E 2023E VALUATION RATIOS 2019 2020 2021E 2022E 2023E Number of ordinary shares eop (m) 116.2 247.2 292.4 292.4 292.4 P/E n.a. 201.6 22.2 13.0 9.6 EPS -0.04 0.00 0.03 0.05 0.06 P/FCF 23.2 44.6 16.7 20.8 60.9 BVPS 0.09 0.11 0.23 0.28 0.35 P/BV 17.7 6.6 2.6 2.2 1.8 DPS 0.00 0.00 0.00 0.00 0.03 EV/EBITDA n.a. 31.8 12.1 8.2 5.7 EV/Sales 2.1 1.8 1.2 0.9 0.7 FINANCIAL RATIOS 2019 2020 2021E 2022E 2023E EV/EBIT n.a. 46.3 14.5 9.9 6.9 ROE -45% 3% 12% 17% 18% ROA -5% 1% 6% 9% 11% FCFE yield 1.8% -3.8% -0.8% 5.4% 8.0% ROIC -2% 4% 10% 13% 15% Dividend yield 0.0% 0.0% 0.0% 0.0% 4.4% WC/Sales -2% 3% 3% 3% 3% Dividend payout 0% 0% 0% 0% 50% Capex/sales -2% -10% -6% -1% -2%

COMPANY FNIANCIALS

INCOME STATEMENT (RONm) 2019 2020 2021E 2022E 2023E BALANCE SHEET (RONm) 2019 2020 2021E 2022E 2023E Revenues 98.0 109.2 148.7 184.2 219.5 Goodwill 17.7 21.1 21.1 21.1 21.1 Education 11.7 12.8 18.6 21.5 24.3 Other intangibles 6.4 8.8 9.4 10.2 11.1 Technology 86.3 96.4 130.1 162.7 195.2 Tangibles 6.7 5.4 5.4 5.4 5.4 Gross margin 16.4 21.5 37.3 46.7 56.3 Investments 1.2 8.5 17.8 22.3 27.4 Education 6.4 7.8 11.3 13.3 15.3 Other 2.0 0.7 0.7 0.7 0.7 Technology 10.0 13.7 26.0 33.3 41.0 Fixed Assets 34.1 44.5 54.4 59.7 65.7 Other income 0.7 0.5 0.6 0.8 0.9 Inventories 2.6 1.2 1.6 2.0 2.3 Selling expenses -7.3 -7.5 -11.9 -13.8 -15.4 Trade and other receivables 32.2 30.3 41.3 51.2 61.0 G&A expenses -11.3 -10.1 -14.3 -17.2 -20.0 Cash and bank balances 20.8 24.9 35.7 44.3 47.3 EBIT -1.4 4.4 11.8 16.4 21.9 Other 0.0 1.5 1.5 1.5 1.5 Net financial income -3.7 -2.9 -0.7 2.5 3.6 Current Assets 55.6 57.8 80.0 98.9 112.0 Profit before tax -5.1 1.5 11.1 18.9 25.5 Total Assets 89.8 102.4 134.4 158.6 177.7 Profit for equity holders -4.6 0.9 8.1 13.9 18.8 Total equity related to parent company 10.2 27.4 68.4 83.0 102.4 EBITDA 0.4 6.3 14.2 19.8 26.5 Non-controlling interest 0.3 0.3 0.4 0.6 0.8 Equity 10.5 27.6 68.8 83.6 103.2 CASH FLOW STATEMENT (RONm) 2019 2020 2021E 2022E 2023E LT debt 36.8 36.0 17.4 17.4 7.6 Gross profit -5.1 1.5 11.1 18.9 25.5 Other 0.0 0.0 0.0 0.0 0.0 D&A 1.9 2.0 2.4 3.4 4.6 LT Liabilities 36.8 36.0 17.4 17.4 7.6 Working capital change 7.5 1.0 -1.0 -0.9 -0.9 Trade and other payables 36.4 28.7 39.1 48.5 57.8 Income tax paid -0.6 -0.3 -1.8 -3.0 -4.1 ST debt 5.8 9.9 9.0 9.0 9.0 Other adjustments 4.9 4.2 0.7 -2.5 -3.6 Other 0.2 0.1 0.1 0.1 0.1 Operating Cash Flow 8.5 8.4 11.4 15.9 21.5 ST Liabilities 42.4 38.7 48.2 57.6 66.9 Capex -1.6 -10.6 -8.4 -2.3 -3.3 Total Equity and Liabilities 89.8 102.4 134.4 158.6 177.7 Other 0.4 -0.2 0.2 0.4 0.4 Investment Cash Flow -1.2 -10.7 -8.1 -1.9 -2.8 Gross debt 42.6 45.8 26.4 26.4 16.6 Net change in debt 4.6 3.4 -19.5 0.0 -9.8 Net debt 21.8 21.0 -9.3 -18.0 -30.7 Issue of shares 0.0 8.9 31.8 0.0 0.0 ND/EBITDA 48.6 3.3 -0.7 -0.9 -1.2 Other adjustments -4.1 3.0 27.0 -5.3 -5.9 Financing Cash Flow 0.5 6.4 7.5 -5.3 -15.7 Change in Cash balance 7.8 4.0 10.8 8.7 3.0 FCFE 3.2 -6.9 -1.5 9.7 14.5

OPERATIONS Revenues by segment (RONm) 2019 2020 2021E 2022E 2023E Gross margin by segment (RONm) 2019 2020 2021E 2022E 2023E Education 11.7 12.8 18.6 21.5 24.3 Education 6.4 7.8 11.3 13.3 15.3 Technology 86.3 96.4 130.1 162.7 195.2 Technology 10.0 13.7 26.0 33.3 41.0

Growth yoy (%) 2019 2020 2021E 2022E 2023E Gross margin (%) 2019 2020 2021E 2022E 2023E Education 58% 10% 45% 16% 13% Education 55% 61% 61% 62% 63% Technology 113% 12% 35% 25% 20% Technology 12% 14% 20% 21% 21%

Bittnet Systems 3 WOOD & Company

Valuation

We transfer coverage of Bittnet Systems (BNET) and rate it a HOLD, with our price target (PT) cut to RON 0.79/share (from RON 0.973), implying 9% upside potential. Our PT is based on a blend of our DCF (a 50% weight) and comparative (a 50% weight) valuations. BNET: valuation summary Method Valuation Weight Comparative valuation (RON/share) 0.74 50% DCF (RON/share) 0.85 50% Price target (RON/share) 0.79 Current price (RON/share) 0.73 Upside/downside (%) 9% Source: WOOD Research

DCF We base our DCF valuation model on the following assumptions:

 A risk free rate of 5.0%.

 An unlevered beta of 1.4x, based on a blend of Damodaran’s unlevered EM beta for software companies.

 An equity risk premium (ERP) of 5.0%.

 A terminal growth rate of 3.0%.

 A 20/80% debt/equity structure, with the debt considered as the gross debt as of end-2020 and the equity considered as the current market cap.

 A WACC of 12.1%.

 To our DCF valuation, we add the 2020 book value of BNET’s investments in Softbinator (in which BNET holds a 25% stake) and Elearning Company (a 23% stake), the results of which are not included in our FCFF calculation.

BNET: beta and WACC calculation

Unlevered beta (x) 1.4 Levered beta (x) 1.7 Risk free rate 5.0% Beta 1.7 Equity risk premium 5.0% Cost of equity 13.3% Risk free rate 5.0% Debt risk premium 4.0% Pre-tax cost of debt 9.0% Tax rate 16% After tax cost of debt 7.6% % D 20% % E 80% WACC 12.1% Source: WOOD Research

Bittnet Systems 4 WOOD & Company

BNET: DCF valuation RON m 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E >2030E Revenues 148.7 184.2 219.5 251.5 283.1 313.1 340.3 357.3 375.2 393.9 393.9 EBITDA 14.2 19.8 26.5 30.0 33.3 36.4 39.2 41.2 43.3 45.4 45.4 EBITDA margin 9.5% 10.8% 12.1% 11.9% 11.8% 11.6% 11.5% 11.5% 11.5% 11.5% 11.5% EBIT 11.8 16.4 21.9 24.1 26.7 29.1 31.3 32.8 34.5 36.2 36.2 EBIT margin 7.9% 8.9% 10.0% 9.6% 9.4% 9.3% 9.2% 9.2% 9.2% 9.2% 9.2% Cash tax on EBIT -1.9 -2.6 -3.5 -3.9 -4.3 -4.7 -5.0 -5.3 -5.5 -5.8 -5.8 NOPAT 9.9 13.8 18.4 20.2 22.4 24.4 26.3 27.6 29.0 30.4 30.4 D&A 2.4 3.4 4.6 5.9 6.6 7.3 8.0 8.4 8.8 9.2 9.2 Change in WC -1.0 -0.9 -0.9 -0.8 -0.8 -0.8 -0.7 -0.4 -0.4 -0.5 Capex&leasing payments* -3.0 -4.1 -5.5 -6.3 -7.1 -7.8 -8.5 -8.9 -9.4 -9.8 -14.9 FCFF 8.3 12.2 16.6 19.0 21.2 23.2 25.1 26.6 27.9 29.3 24.7 Discount factor (%) 89% 80% 71% 63% 56% 50% 45% 40% 36% 32% PV 7.4 9.7 11.8 12.0 12.0 11.7 11.2 10.6 10.0 9.3 PV 2021-2030E 105.6 TV growth rate (%) 3.0% PV TV 85.8 EV 2020 191.4 Minorities 2020 0.3 Net debt 2020 21.0 Investments 2020 8.5 Equity value 2020 (RON m) 178.7 Number of shares as of end-2020 (m) 247.2 Fair value per share as of end-2020 (RON) 0.72 12-month price target (RON) 0.85 Source: WOOD Research; *capex excluding the financial investment in Servodata (35% stake), which we expect to be concluded in 2021E

DCF sensitivity analysis (RON) Unlevered beta 1.1x 1.2x 1.3x 1.4x 1.5x 1.6x 1.7x 4.5% 1.07 1.00 0.93 0.88 0.83 0.78 0.74 4.0% 1.05 0.98 0.92 0.87 0.82 0.78 0.74 3.5% 1.03 0.97 0.91 0.86 0.82 0.78 0.74 Terminal Growth 3.0% 1.02 0.95 0.90 0.85 0.81 0.77 0.74 Rate (%) 2.5% 1.00 0.94 0.89 0.85 0.81 0.77 0.73 2.0% 0.99 0.94 0.89 0.84 0.80 0.76 0.73 1.5% 0.98 0.93 0.88 0.84 0.80 0.76 0.73 Equity risk premium 4.25% 4.50% 4.75% 5.00% 5.25% 5.50% 5.75% 5.75% 0.88 0.85 0.82 0.79 0.76 0.74 0.72 5.50% 0.90 0.87 0.84 0.81 0.78 0.76 0.73 5.25% 0.93 0.89 0.86 0.83 0.80 0.78 0.75 Risk free 5.00% 0.96 0.92 0.89 0.85 0.82 0.80 0.77 rate (%) 4.75% 0.99 0.95 0.91 0.88 0.85 0.82 0.79 4.50% 1.02 0.98 0.94 0.90 0.87 0.84 0.81 4.25% 1.05 1.01 0.97 0.93 0.89 0.86 0.83 Source: WOOD Research

Bittnet Systems 5 WOOD & Company

Peer multiples

We base our BNET comparative valuation approach on our 2021-23E EV/EBITDA and P/E multiples. To set a fair price for BNET, we apply the current 2021-23E peer group multiples median and our forecasts for BNET 2021-23E results. The multiples calculations are based on WOOD’s forecasts for BNET and Sirma and the Bloomberg consensus for the peers. Our comparative valuation implies a PT of RON 0.74/share for BNET, and we assign a 50% weighting to this in our final PT for the company.

On our estimates, BNET trades at 2021-22E EV/EBITDAs of 12.1-8.2x, at 43-7% premiums vs. its peers, and P/Es of 22.2-13.0x, at a 42% premium and a 10% discount vs. its peers. We believe that the company deserves a premium vs. its peers on the mid-term multiples, considering its growth profile, including a 2020-23E EBITDA CAGR of 61%, vs. the 17% peers’ median. BNET: peer multiples* Country Mcap P/E EV/EBITDA EURm 2021E 2022E 2023E 2021E 2022E 2023E Bittnet Systems Romania 37 22.2 13.0 9.6 12.1 8.2 5.7 IT integration peers Sirma Group Bulgaria 17 5.2 4.6 4.2 4.2 3.6 3.2 Asseco Poland Poland 1,288 13.8 13.9 13.5 4.4 4.2 3.7 Asseco South Eastern Europe Poland 449 16.1 14.9 14.2 7.9 7.3 6.7 Asseco Business Solutions Poland 266 15.3 14.6 14.1 9.9 9.3 9.0 Comarch Poland 407 15.7 15.1 14.8 6.3 6.0 5.7 Comp Poland 70 7.7 8.3 11.6 4.5 4.9 4.5 Atos France 6,186 8.2 7.2 6.7 4.0 3.3 2.8 S&T Austria 1,403 19.9 16.0 13.8 9.9 8.7 7.4 Adesso Germany 717 24.2 22.5 19.8 9.7 8.8 8.5 Tietoevry Finland 3,447 12.5 11.6 10.9 8.1 7.6 7.0 Sopra Steria Group France 3,144 14.5 12.5 11.2 6.9 6.0 5.6 Softcat UK 4,283 40.7 39.9 37.6 30.5 29.7 27.7 Cancom Germany 1,949 30.4 25.9 23.2 11.2 9.6 8.5 Datagroup Germany 500 33.5 26.3 22.5 10.3 8.8 7.9 Enea Sweden 508 23.9 20.2 17.4 15.0 12.1 10.6 Panoply Holdings UK 251 42.2 34.2 31.8 33.5 23.5 20.4 Peers median 15.9 15.0 14.1 8.9 8.2 7.2 premium (discount) 39% -14% -32% 36% 1% -21% Education peers Grand Canyon Education USA 3,604 15.3 13.9 12.5 11.4 10.4 12.5 Strategic Education USA 1,568 14.3 12.4 n.a. 7.9 7.3 n.a. Yduqs Participacoes Brazil 1,394 14.8 11.1 8.0 6.9 5.8 5.4 Adtalem Global Education USA 1,501 13.7 10.6 8.7 4.6 4.4 n.a. American Public Education USA 474 17.8 15.6 11.0 3.3 2.2 n.a. Avensia Sweden 49 23.1 17.4 13.6 13.3 9.3 7.6 Peers median 15.1 13.1 11.0 7.4 6.6 7.6 premium (discount) 47% -1% -13% 63% 25% -26% Source: Bloomberg, WOOD Research; *estimates based on WOOD’s forecasts for Bittnet Systems and Sirma, and the Bloomberg consensus for the other peers BNET: peer multiples summary* P/E EV/EBITDA 2021E 2022E 2023E 2021E 2022E 2023E IT integration peers median 15.9 15.0 14.1 8.9 8.2 7.2 Education peers median 15.1 13.1 11.0 7.4 6.6 7.6 IT integration peers weight 70% 71% 73% 70% 71% 73% Education peers weight 30% 29% 27% 30% 29% 27% Weighted valuation multiple 15.7 14.5 13.3 8.4 7.7 7.3 BNET multiple 22.2 13.0 9.6 12.1 8.2 5.7 BNET (discount) 42% -10% -28% 43% 7% -23% Company results 8.1 13.9 18.8 14.2 19.8 26.5 EV implied 120.7 191.5 236.1 126.0 161.8 191.3 Net debt -9.3 -18.0 -30.7 -9.3 -18.0 -30.7 Minorities 0.4 0.6 0.8 0.4 0.6 0.8 Equity value implied 129.6 208.9 266.1 134.9 179.2 221.2 Multiple weight 16.7% 16.7% 16.7% 16.7% 16.7% 16.7% Equity value 190.0 Fair value/share 0.65 12-month price target (RON) 0.74 Source: Bloomberg, WOOD Research; *estimates based on WOOD’s forecasts for Bittnet Systems and Sirma, and the Bloomberg consensus for the other peers

Bittnet Systems 6 WOOD & Company

BNET: peers’ key indicators* CAGR 2020-23E ND/EBITDA FCF yield Dividend yield EBITDA margin NI margin NI EBITDA 2021E 2021E 2022E 2021E 2022E 2021E 2022E 2021E 2022E Bittnet Systems 175.9% 61.0% -0.7 -1% 5% 0.0% 4.4% 11% 12% 8% 9% IT integration peers Sirma Group 8.4% 7.0% 0.7 14% 13% 0.0% 0.0% 20% 19% 9% 9% Asseco Poland -1% 3.6% 0.0 n.a. n.a. 4% 4% 15% 15% 3% 3% Asseco South Eastern Europe n.a. n.a. -0.7 n.a. n.a. 3% 3% 22% 21% 12% 12% Asseco Business Solutions 5% 4.4% 0.0 n.a. n.a. 6% 6% 41% 41% 27% 27% Comarch 2% -0.6% -1.0 n.a. n.a. 1% 2% 16% 15% 7% 7% Comp 20% n.a. 1.4 n.a. n.a. 8% 7% 13% 12% 7% 4% Atos 13% 7.6% 0.2 16% 18% 2% 2% 14% 15% 7% 7% S&T 20% 13.8% 0.3 4% 7% 1% 1% 10% 11% 5% 6% Adesso 15% 11.6% -0.2 3% 5% 1% 1% 12% 12% 5% 5% Tietoevry 8% 20.6% 1.3 n.a. n.a. 5% 5% 18% 18% 9% 10% Sopra Steria Group 19% 14.2% 0.7 7% 9% 2% 2% 11% 12% 5% 5% Softcat 10% 9.9% -0.8 n.a. n.a. 2% 2% 10% 9% 7% 7% Cancom 4% 13.6% -2.2 4% 4% 2% 2% 8% 8% 3% 4% Datagroup 30% 19.8% 1.8 3% 6% 1% 1% 14% 15% 4% 4% Enea 20% 18.5% 0.3 5% 5% 2% 1% 36% 38% 22% 23% Panoply Holdings n.a. n.a. 1.2 n.a. n.a. 0% 0% 14% 15% 10% 11% Peers median 12% 12% 0.2 4% 6% 2% 2% 14% 15% 7% 7%

Education peers Grand Canyon Education 9% 9.8% -1.4 6% 7% n.a. n.a. 37% 38% 30% 30% Strategic Education n.a. n.a. 0.5 3% 5% 3% 3% 22% 24% 10% 12% Yduqs Participacoes 37% 29.8% 0.8 9% 9% 2% 3% 36% 34% 14% 16% Adtalem Global Education 14% 0.0% -2.4 1% 3% n.a. n.a. 24% 21% 13% 11% American Public Education 33% 41.9% -5.6 6% 6% n.a. n.a. 16% 15% 8% 7% Avensia 66% 53.5% -0.2 n.a. n.a. 3% 3% 10% 12% 6% 7% Peers median 33% 30% -0.8 6% 6% 3% 3% 23% 23% 12% 12% Source: Bloomberg, WOOD Research; *estimates based on WOOD’s forecasts for Bittnet Systems and Sirma, and the Bloomberg consensus for the other peers

BNET: peers’ key indicators summary* CAGR ND/EBITDA FCF yield(%) DY(%) Margin(%) NI EBITDA EBITDA NI 20-23E 20-23E 21E 21E 22E 21E 22E 21E 22E 21E 22E IT integration peers 12% 12% 0.2 4.3% 6.2% 1.6% 1.8% 14% 15% 7% 7% Education peers 33% 30% -0.8 5.5% 5.8% 2.9% 2.9% 23% 23% 12% 12% IT integration peers weight 71% 71% 70% 70% 71% 70% 71% 70% 71% 70% 71% Education peers weight 29% 29% 30% 30% 29% 30% 29% 30% 29% 30% 29% Weighted indicator 18% 17% -0.1 4.6% 6.1% 2.0% 2.1% 17% 17% 8% 8% BNET 176% 61% -0.7 -0.8% 5.4% 0.0% 4.4% 11% 12% 8% 9% Source: Bloomberg, WOOD Research; *estimates based on WOOD’s forecasts for Bittnet Systems and Sirma, and the Bloomberg consensus for the other peers

Bittnet Systems 7 WOOD & Company

Financial forecasts changes

Bittnet Systems: forecasts changes 2020 2021E 2022E 2023E New New New Actual Old New Chg. Old New Chg. Old New Chg. yoy yoy yoy Revenues 109.2 168.6 148.7 -12% 36% 207.7 184.2 -11% 24% 251.6 219.5 -13% 19% EBITDA 6.3 16.6 14.2 -14% 123% 22.4 19.8 -12% 40% 29.2 26.5 -9% 34% EBIT 4.4 13.5 11.8 -13% 171% 19.1 16.4 -14% 39% 25.9 21.9 -15% 33% Net income 0.9 9.7 8.1 -16% 810% 16.1 13.9 -14% 71% 23.6 18.8 -20% 35% FCF -6.9 3.3 -1.5 n.a. n.a. 13.7 9.7 n.a. n.a. 20.2 14.5 n.a. n.a. Capex 10.6 5.1 8.4 66% -21% 4.2 2.3 -45% -73% 5.0 3.3 -35% 43% DPS (paid out) 0.0 0.0 0.0 n.a. n.a. 0.0 0.0 n.a. n.a. 0.0 0.0 n.a. n.a. ND/EBITDA 3.3 1.0 -0.7 n.a. n.a. 0.1 -0.9 n.a. 38% -0.6 -1.2 n.a. 28% Source: Company data, WOOD Research

Bittnet Systems: 2021E company budget vs. WOOD’s forecasts BNET budget WOOD est. Diff.

Revenues 157.1 148.7 -5% Education 19.7 18.6 -6% Technology 137.4 130.1 -5% Gross margin 43.7 37.3 -15% Education 12.8 11.3 -12% Technology 30.9 26.0 -16% EBITDA 16.4 14.2 -14% D&A 1.1 2.4 108% EBIT 15.3 11.8 -23% Gross profit 12.7 11.1 -12% Source: Company data, WOOD Research

Bittnet Systems 8 WOOD & Company

Risks

M&A integration. Bittnet is an active acquirer and, using its 2018 acquisition of Crescendo as an example, sometimes its targets are larger than the company itself. In the past, the group has proven successful at turning around loss-making acquisitions (GECAD Net) and integrating large acquisitions (Crescendo). In the future, as the company grows bigger and more diverse, with management’s focus more dispersed, integration could prove more challenging and any expected synergies might not be achieved, in our view.

Employee retention. One of the core differentiators for technology companies in general and Bittnet in particular are employees, and the ability to attract and retain top talent. Bittnet, as one of the few listed IT companies in Romania, has an extensive stock options programme for its employees, aligning interests and providing access to upside. However, the IT sector in Romania is becoming more and more competitive, putting pressure on salaries, and making it more difficult to recruit and keep staff.

Competition and distinguishable competitive advantages. In the verticals, where Bittnet is most active, IT education and integration, we believe that employees are the key competitive advantage, while the focus is not proprietary products. As detailed above, the increasing competition for IT talent could result in Bittnet’s competitive advantages being reduced, weakening the company’s pricing power and ability to consolidate the market further. This is amplified further by the company operating in industries with low barriers to entry, high fragmentation and high competition.

Dilution. Bittnet has an aggressive growth agenda and this is funded partly by capital raisings. As detailed above, the company’s option plan is a critical component of attracting and retaining its employees and key personnel. With M&A at its core, we believe that new investors are likely to be faced with dilution down the line: annually, through its option plans; and, opportunistically, due to the company’s pursuit of acquisitions and deleveraging.

Bittnet Systems 9 WOOD & Company

Financials

P&L forecasts (RON m) 2019 2020 2021E 2022E 2023E 2024E 2025E CAGR 2020-23E Revenues 98.0 109.2 148.7 184.2 219.5 251.5 283.1 26% Education 11.7 12.8 18.6 21.5 24.3 27.0 29.4 24% Technology 86.3 96.4 130.1 162.7 195.2 224.5 253.7 27% COGS -81.6 -87.7 -111.3 -137.5 -163.2 -187.3 -211.3 23% Education -5.3 -5.0 -7.2 -8.2 -9.0 -10.0 -10.9 21% Technology -76.3 -82.7 -104.1 -129.3 -154.2 -177.3 -200.4 23% Gross margin 16.4 21.5 37.3 46.7 56.3 64.1 71.8 38% Education 6.4 7.8 11.3 13.3 15.3 17.0 18.5 25% Technology 10.0 13.7 26.0 33.3 41.0 47.1 53.3 44% OPEX -17.9 -17.1 -25.5 -30.3 -34.4 -40.1 -45.1 26% Other income 0.7 0.5 0.6 0.8 0.9 1.0 1.2 26% Selling expenses -7.3 -7.5 -11.9 -13.8 -15.4 -17.6 -19.8 27% G&A expenses -11.3 -10.1 -14.3 -17.2 -20.0 -23.5 -26.5 26% EBIT -1.4 4.4 11.8 16.4 21.9 24.1 26.7 71% Net financial income -3.7 -2.9 -0.7 2.5 3.6 4.8 5.7 n.a. Investment gains 0.1 -0.2 2.4 4.5 5.1 5.7 6.2 n.a. Net interest expense -3.8 -2.7 -3.0 -2.0 -1.5 -0.8 -0.4 -18% Gross profit -5.1 1.5 11.1 18.9 25.5 28.9 32.4 158% Income tax 0.7 -0.5 -1.8 -3.0 -4.1 -4.6 -5.2 107% Net profit -4.5 1.0 9.4 15.9 21.4 24.3 27.2 175% Net profit for shareholders -4.6 0.9 8.1 13.9 18.8 21.3 23.9 176% EBIT -1.4 4.4 11.8 16.4 21.9 24.1 26.7 71% D&A 1.9 2.0 2.4 3.4 4.6 5.9 6.6 32% EBITDA 0.4 6.3 14.2 19.8 26.5 30.0 33.3 61% Source: Company data, WOOD Research

Balance sheet forecasts (RON m) 2019 2020E 2021E 2022E 2023E 2024E 2025E Goodwill 17.7 21.1 21.1 21.1 21.1 21.1 21.1 Other intangibles 6.4 8.8 9.4 10.2 11.1 11.4 11.9 Tangibles 6.7 5.4 5.4 5.4 5.4 5.4 5.4 Investments 1.2 8.5 17.8 22.3 27.4 33.1 39.2 Other fixed assets 2.0 0.7 0.7 0.7 0.7 0.7 0.7 Total Fixed Assets 34.1 44.5 54.4 59.7 65.7 71.7 78.3 Inventory 2.6 1.2 1.6 2.0 2.3 2.7 3.0 Receivables 32.2 30.3 41.3 51.2 61.0 69.9 78.6 Cash and equivalents 20.8 24.9 35.7 44.3 47.3 48.3 51.0 Other financial assets 0.0 1.5 1.5 1.5 1.5 1.5 1.5 Total Current Assets 55.6 57.8 80.0 98.9 112.0 122.3 134.1 Total Assets 89.8 102.4 134.4 158.6 177.7 194.0 212.4 Total equity related to parent company 10.2 27.4 68.4 83.0 102.4 114.7 128.3 Non-controlling interests 0.3 0.3 0.4 0.6 0.8 1.0 1.2 Total shareholder equity 10.5 27.6 68.8 83.6 103.2 115.7 129.5 Bonds 28.2 28.4 9.8 9.8 0.0 0.0 0.0 Bank loans 4.8 4.6 4.6 4.6 4.6 0.0 0.0 Other long-term debt 3.8 3.0 3.0 3.0 3.0 3.0 3.0 Total Long-term debt 36.8 36.0 17.4 17.4 7.6 3.0 3.0 Bonds 0.9 0.9 0.0 0.0 0.0 0.0 0.0 Bank loans 3.6 7.6 7.6 7.6 7.6 7.6 3.8 Payables 36.4 28.7 39.1 48.5 57.8 66.2 74.5 Other short-term debt 1.6 1.5 1.5 1.5 1.5 1.5 1.5 Total Short-term liabilities 42.4 38.7 48.2 57.6 66.9 75.3 79.8 Total Liabilities 79.2 74.7 65.6 75.0 74.5 78.3 82.9 Total Equity and Liabilities 89.8 102.4 134.4 158.6 177.7 194.0 212.4 Gross debt 42.6 45.8 26.4 26.4 16.6 12.0 8.2 Net debt 21.8 21.0 -9.3 -18.0 -30.7 -36.3 -42.7 Net debt/EBITDA 48.6 3.3 -0.7 -0.9 -1.2 -1.2 -1.3 Source: Company data, WOOD Research

Bittnet Systems 10 WOOD & Company

Cash flow forecasts (RON m) 2019 2020E 2021E 2022E 2023E 2024E 2025E Gross Profit -5.1 1.5 11.1 18.9 25.5 28.9 32.4 D&A 1.9 2.0 2.4 3.4 4.6 5.9 6.6 Net financial income 3.8 3.7 3.0 2.0 1.5 0.8 0.4 Profit/loss of equity method securities 0.0 0.4 -2.4 -4.5 -5.1 -5.7 -6.2 Other adjustments 1.1 0.1 0.0 0.0 0.0 0.0 0.0 Operational Profit before WC 1.6 7.7 14.2 19.8 26.5 30.0 33.3 Changes in WC 7.5 1.0 -1.0 -0.9 -0.9 -0.8 -0.8 Operational cash flow 9.1 8.7 13.2 18.9 25.6 29.2 32.6 Income tax paid -0.6 -0.3 -1.8 -3.0 -4.1 -4.6 -5.2 Net cash flow from operations 8.5 8.4 11.4 15.9 21.5 24.6 27.4 Capex -1.6 -10.6 -8.4 -2.3 -3.3 -3.8 -4.2 Interest income 0.4 0.1 0.2 0.4 0.4 0.5 0.5 Other 0.0 -0.3 0.0 0.0 0.0 0.0 0.0 Net cash flow from investments -1.2 -10.7 -8.1 -1.9 -2.8 -3.3 -3.8 Issue of shares 0.0 8.9 31.8 0.0 0.0 0.0 0.0 Net change in bank loans -0.8 3.4 0.0 0.0 0.0 -4.6 -3.8 Net change in bonds 5.4 0.0 -19.5 0.0 -9.8 0.0 0.0 Interest costs -2.6 -3.2 -3.3 -2.4 -2.0 -1.3 -0.9 Leasing payments -1.5 -1.6 -1.5 -1.8 -2.2 -2.5 -2.8 Dividends paid 0.0 0.0 0.0 0.0 0.0 -9.4 -10.7 Preferential dividends÷nds paid to minorities 0.0 -0.1 0.0 -1.1 -1.8 -2.4 -2.7 Other financing adjustments 0.0 -0.9 0.0 0.0 0.0 0.0 0.0 Net cash flow from financing 0.5 6.4 7.5 -5.3 -15.7 -20.2 -21.0 Cash at the beginning of the year 13.0 20.8 24.9 35.7 44.3 47.3 48.3 Cash increase 7.8 4.0 10.8 8.7 3.0 1.0 2.6 Cash at the end of the year 20.8 24.9 35.7 44.3 47.3 48.3 51.0 Net cash flow from operations 8.5 8.4 11.4 15.9 21.5 24.6 27.4 Capex -1.6 -10.6 -8.4 -2.3 -3.3 -3.8 -4.2 Leasing payments -1.5 -1.6 -1.5 -1.8 -2.2 -2.5 -2.8 Net finance costs -2.2 -3.1 -3.0 -2.0 -1.5 -0.8 -0.4 FCFE 3.2 -6.9 -1.5 9.7 14.5 17.4 19.8 Source: WOOD Research, company data

Bittnet Systems 11 WOOD & Company

Important disclosures

This investment research is published by WOOD & Company Financial Services, a.s. (“WOOD&Co”) and/or one of its branches who are authorised and regulated by the Czech National Bank (CNB) as Home State regulator and in Poland by the Polish Financial Supervision Authority (KNF), in Slovakia by the National Bank of Slovakia (NBS), in Italy by the Companies and Stock Exchange Commission (CONSOB) and in the UK by the Financial Conduct Authority (FCA) as Host State regulators.

This investment research was prepared by WOOD&Co with financial assistance from Taipei China through the TaiwanBusiness EBRD Technical Cooperation Fund managed by the European Bank for Reconstruction and Development (“EBRD”). Neither EBRD nor Taipei China has had any editorial rights or other influence on the content of this investment research. Neither EBRD nor Taipei China makes any representation or warranty or assumes any responsibility or liability in relation to the contents of this investment research or reliance thereon. The views expressed in this investment research are those of WOOD&Co and can in no way be taken to reflect the official opinion of EBRD or of Taipei China. EBRD may, as of the date hereof or in the future, have an investment in, provide other advice or services to, or otherwise have a financial interest in, certain of the companies and parties contained or named in this investment research or in their affiliates.

This investment research was completed on 10/05/2021 at 18:00 CET and disseminated on 11/05/2021 at 07:35 CET.

WOOD&Co’s rating and price target history for Bittnet Systems in the preceding 12-month period: Date Rating Date PT 30/10/2020 BUY – initiation of coverage 30/10/2020 RON 0.973 11/05/2021 HOLD – transfer of coverage 11/05/2021 RON 0.79

A history of all WOOD&Co’s investment research disseminated during the preceeding 12-month period can be accessed via our website at https://research.wood.com.

The meanings of recommendations made in WOOD&Co’s investment research are as follows: BUY: The stock is expected to generate total returns of over 15% during the next 12 months as measured by the price target. HOLD: The stock is expected to generate total returns of 0-15% during the next 12 months as measured by the price target. SELL: The stock is expected to generate a negative total return during the next 12 months as measured by the price target. RESTRICTED: Financial forecasts, and/or a rating and/or a price target is restricted from disclosure owing to Compliance or other regulatory/legal considerations such as a blackout period or a conflict of interest. NOT RATED: Suspension of rating after 30 consecutive weekdays where the current price vis-à-vis the price target has been out of the range dictated by the current BUY/HOLD/SELL rating. COVERAGE IN TRANSITION: Due to changes in the Research team, the disclosure of a stock’s rating and/or price target and/or financial information are temporarily suspended.

As of the end of the last calendar quarter, the proportion of all WOOD&Co’s investment research vis-à-vis the proportion of subject companies that were investment banking clients over the previous 12 months is as follows:

BUY HOLD SELL Restricted NOT RATED Coverage in transition Equity Research Coverage 55% 37% 8% 1% n.a. 1% IB Clients 1% 1% n.a. 1% n.a. n.a.

Any prices of financial instruments quoted in this investment research are taken as of the previous day’s market close on the home market unless otherwise stated. Details of the methodologies used to determine WOOD&Co’s price targets and risk assessment related to the achievement of the targets are outlined throughout the most recent substantive report/note on the subject company. It should be assumed that the risks and valuation methodology presented in daily news or flash notes, and not changing WOOD&Co’s estimates or ratings, are as set out in the most recent substantive research report/note on the subject company and can be found on our website at https://research.wood.com. WOOD&Co’s policy is to update investment research as it deems appropriate, based on developments in the subject company, sector or market that may have a material impact on the views or opinions stated in the investment research.

WOOD Research Disclosures (as of 11 May 2021) Company Disclosures Alior Bank 5 AmRest 5 ANY Security Printing Company PLC 5 Banca Transilvania 5 Bank of Cyprus 4 BRD 5 Bucharest Stock Exchange 5 Santander Bank Polska 5 CCC 5 CD Projekt 5 Ceska zbrojovka Group 1, 2, 3 CEZ 5 CME 5 Dino 5 DO&CO 5 Electrica 5 Erste Group Bank 5 Eurobank 4 Eurocash 4, 5 Fortuna 5 Fondul Proprietatea 1, 2, 3, 4, 5 Graphisoft Park 5 ING BSK 5 Kazatomprom 5 Kernel 5 Kety 5 KGHM 5 Kofola CS 5 Komercni 4, 5 Kruk 5 Lotos 5 MedLife 4 MONETA Money Bank 5 O2 Czech Republic 1, 4, 5 OMV Petrom 3, 5 Orange PL 5 Piraeus Financial Holdings S.A. 1, 2, 3 Pekao 4, 5

Bittnet Systems 12 WOOD & Company

PGE 5 PGNiG 5 Philip Morris CR 5 PKN Orlen 5 PKO BP 4, 5 PZU 4, 5 Romgaz 5 Santander Bank Polska 5 Siauliu Bankas 1, 2, 4 Tauron 5 TBC Bank 3 Ten Square Games 3 Transelectrica 5 Transgaz 5 Warsaw Stock Exchange 5

# Description 1 The company currently is, or in the past 12 months was, a client of WOOD&Co or any of its affiliates for the provision of corporate finance/investment banking services. 2 In the past 12 months, WOOD&Co or any of its affiliates have received compensation for corporate finance/investment banking services from the company. 3 In the past 12 months, WOOD&Co or any of its affiliates have been lead manager or co-lead manager of a publicly disclosed offer of the company’s financial instruments. 4 In the past 12 months, WOOD&Co or any of its affilates have acted as broker to the company 5 WOOD&Co or any of its affiliates are market maker(s) or liquidity provider(s) in relation to financial instruments of the company. 6 In the past 12 months, WOOD&Co or any of its affiliates have provided to the company any services set out in Sections A and B or Annex I to the Directive 2014/65/EU of the European Parliament and of the Council, other than services listed under points 1, 3, 4 or 5 above, or received compensation for such services from the company. 7 The authoring analyst or any individual involved in the preparation of this investment research have purchased/received shares in the company prior to a public offering of those shares; and the price at which they were acquired along with the date of acquisition are disclosed above. 8 The authoring analyst or any individual involved in the preparation of this investment research has a direct ownership position in securities issued by the company. 9 A partner, director, officer, employee or agent of WOOD&Co and its affiliates, or a member of his/her household, is an officer, or director, or serves as an advisor or board member of the company. 10 WOOD&Co or its affiliates hold a net long or short position exceeding the threshold of 0,5% of the total issued share capital of the company, calculated in accordance with Artcle3 of Regulation (EU) No 236/2012 and with Chapters III and IV of Commission Delegated Regulation (EU) No 918/2012. 11 The company owns more than 5% of the total issued share capital in WOOD&Co or any of its affiliates.

The authoring analysts who are responsible for the preparation of this investment research have received (or will receive) compensation based upon (among other factors) the overall profits of WOOD&Co, which includes corporate finance/investment banking, sales and trading and principal trading revenues. However, such authoring analysts have not received, and will not receive, compensation that is directly based upon or linked to one or more specific activities, or to recommendations contained in the investment research. One factor in equity research analyst compensation is arranging corporate access events/meetings between institutional clients and the management teams of covered companies (with the company management being more likely to participate when the analyst has a positive view of the company). WOOD&Co and its affiliates may have a corporate finance/investment banking or other relationship with the company that is the subject of this investment research and may trade in any of the designated investments mentioned herein either for their own account or the accounts of their clients, in good faith or in the normal course of market making. Accordingly, WOOD&Co or their affiliates, principals or employees (other than the authoring analyst(s) who prepared this investment research) may at any time have a long or short position in any such designated investments, related designated investments or in options, futures or other derivative instruments based thereon. WOOD&Co manages conflicts of interest arising as a result of preparation and publication of research through its use of internal databases, notifications by the relevant employees and Chinese Walls as monitored by Compliance. For further details, please see our website at https://www.wood.cz/mifid- information/. The information contained in this investment research has been compiled by WOOD&Co from sources believed to be reliable, but (with the exception of the information about WOOD&Co) no representation or warranty, express or implied, is made by WOOD&Co, its affiliates or any other person as to its fairness, accuracy, completeness or correctness. WOOD&Co has not independently verified the facts, assumptions, and estimates contained herein. All estimates, opinions and other information contained in this investment research constitute WOOD&Co’ judgement as of the date of this investment research, are subject to change without notice and are provided in good faith but without legal responsibility or liability. WOOD&Co salespeople, traders, and other professionals may provide oral or written market commentary or trading strategies to our clients and our proprietary trading desk that reflect opinions that are contrary to the opinions expressed in this investment research. WOOD&Co’s affiliates, proprietary trading desk and investing businesses may make investment decisions that are inconsistent with the recommendations or views expressed in this investment research. This investment research is provided for information purposes only and does not constitute or form part of an offer or invitation or solicitation to engage in investment activity or to buy or sell any designated investments discussed herein in any jurisdiction. As a result, the designated investments discussed in this investment research may not be eligible for offer or sale in some jurisdictions. This investment research is not, and under no circumstances should be construed as, a solicitation to act as a securities broker or dealer in any jurisdiction by any person or company that is not legally permitted to carry on the business of a securities broker or dealer in that jurisdiction. This investment research does not have regard to the investment objectives, financial situation or particular needs of any particular person. Investors should consider this report as only a single factor in making their investment decision and obtain advice based on their own individual circumstances before making an investment decision. To the fullest extent permitted by law, none of WOOD&Co, its affiliates or any other person accepts any liability whatsoever for any direct or consequential loss arising from or in connection with the use of this investment research. For United Kingdom or EU Residents: This investment research is for persons who are eligible counterparties or professional clients within the meaning of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU and is exempt from the general restrictions in section 21 of the Financial Services and Markets Act 2000 (or any analogous legislation) on the communication of invitations or inducements to engage in investment activity on the grounds that it is being distributed in the United Kingdom only to persons of a kind described in Article 19(5) (Investment Professionals) and 49(2) (High Net Worth companies, unincorporated associations etc) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended). For United States Residents: This investment research distributed in the United States by WOOD&Co, and in certain instances by Brasil Plural Securities LLC (“Brasil Plural”), a U.S. registered broker dealer, only to “major U.S. institutional investors”, as defined under Rule 15a-6 promulgated under the U.S. Securities Exchange Act of 1934, as amended, and as interpreted by the staff of the U.S. Securities and Exchange Commission (“SEC”). This investment research is not intended for use by any person or entity that is not a major U.S. institutional investor. If you have received a copy of this research and are not a major U.S. institutional investor, you are instructed not to read, rely on or reproduce the contents hereof, and to destroy this research or return it to WOOD&Co or to Brasil Plural. Analyst(s) preparing this report are employees of WOOD&Co who are resident outside the United States and are not associated persons or employees of any U.S. registered broker-dealer. Therefore the analyst(s) are not be subject to Rule 2711 of the Financial Industry Regulatory Authority (“FINRA”) or to Regulation AC adopted by SEC which, among other things, restrict communications with a subject company, public appearances and personal trading in

Bittnet Systems 13 WOOD & Company

securities by a research analyst. Any major U.S. Institutional investor wishing to effect transactions in any securities referred to herein or options thereon should do so by contacting a representative of Brasil Plural. Brasil Plural is a broker-dealer registered with the SEC and a member of FINRA and the Securities Investor Protection Corporation. Its address is 545 Madison Avenue, 8th Floor, New York, NY 10022 and its telephone number is 212-388-5613. WOOD&Co is not affiliated with Brasil Plural or any other U.S. registered broker-dealer.

The views and sentiments expressed in this investment research and any findings thereof accurately reflect the analyst’s truthful views about the subject securities and or issuers discussed herein.

Bittnet Systems 14 WOOD & Company

This page has been left blank intentionally

Bittnet Systems 15 WOOD & Company

CONTACTS Czech Republic Poland UK Italy Kristen Andrasko namesti Republiky 1079/1a Skylight Zlote Tarasy City Point, 11th Floor Via Luigi Settembrini, 35 Head of Equities Palladium Zlota 59 1 Ropemaker Street 20124 Milan +420 222 096 253 110 00 Praha 1 00 120 Warszawa London EC2Y 9HT Italy [email protected] Czech Republic Poland Tel +420 222 096 111 Tel +48 22 222 1530 Tel +44 20 3530 0691 Tel +39 02 36692 500 Fax +420 222 096 222 Fax +48 22 222 1531 Bloomberg page WUCO

Romania www.wood.com Metropolis Center 89-97 Grigore Alexandrescu St. 010624 Bucharest 1 Tel.: +40 316 30 11 81 Research Co-Head of Research/ Head of Research Co-Head of Research/Head of Greek Head of Consumer/Industrials Macroeconomics Poland Research Lukasz Wachelko Raffaella Tenconi Marta Jezewska-Wasilewska Alex Boulougouris +48 22 222 1560 +44 20 3530 0685 +48 22 222 1548 +30 211 106 9447 [email protected] [email protected] [email protected] [email protected]

Head of Turkey Research Head of Russia Research Head of Romania Research Macroeconomics Atinc Ozkan Ildar Davletshin Iuliana Ciopraga Alessio Chiesa +90 542 202 3632 +44 203 530 0631 +40 316 30 1185 +44 75177 06102 [email protected] [email protected] [email protected] [email protected]

Head of Financials Head of TMT Energy Utilities/Mining/Pharma Can Demir Piotr Raciborski Jonathan Lamb Bram Buring +44 20 3530 0623 +48 22 222 1551 +44 20 3530 0621 +420 222 096 250 [email protected] [email protected] [email protected] [email protected]

Consumer/Real Estate Energy/Utilities Poland Consumer Jakub Caithaml Ondrej Slama Pawel Wieprzowski Jakub Mician +420 222 096 481 +420 222 096 484 +48 22 222 1549 +420 222 096 320 jakub.caithaml @wood.com [email protected] [email protected] [email protected]

Financials Greece Russia Gaming/Mid-caps David Lojkasek Fani Tzioukalia Dmitry Vlasov Maria Mickiewicz +420 222 096 256 +30 211 106 9449 +44 750 714 6702 +48 602 450 718 [email protected] [email protected] [email protected] [email protected]

Sales Head of Sales Kristen Andrasko Jan Koch Piotr Kopec Ioana Pop +420 222 096 253 +48 22 222 1616 +48 22 222 1615 +44 20 3530 0693 [email protected] [email protected] [email protected] [email protected] Grzegorz Skowronski Jarek Tomczynski Kostas Tsigkourakos Tatiana Sarandinaki +48 22 222 1559 +44 203 530 0688 +30 694 082 5810 Brasil Plural in association with WOOD&Co. [email protected] [email protected] [email protected] 1 212 388 5613 [email protected]

Sales Trading and Execution Services

Zuzana Mora Ermir Shkurti Vladimir Vavra +420 222 096 283 +420 222 096 847 +420 222 096 397 [email protected] [email protected] [email protected]

RECENTLY PUBLISHED REPORTS Date Company/Sector Title Analyst 10/05/21 Astarta Holding Sweet rebirth at the peak of the cycle Pawel Wieprzowski, Maria Mickiewicz 07/05/21 Kety Strong stuff (40%+)… but we want more Pawel Wieprzowski, Maria Mickiewicz 05/05/21 EME Macro/Strategy: Greece The state of play Raffaella Tenconi, Alessio Chiesa 05/05/21 Greece A fresh comeback Alex Boulougouris, Raffaella Tenconi 04/05/21 EME Macro/Strategy: Turkey Modest growth prospects, with worrying inflation Raffaella Tenconi, Alessio Chiesa 04/05/21 The Rear-View Mirror – EME markets Greece performs well again, but volumes down Research Team 04/05/21 North Macedonian Banks Growth story to continue after COVID-19 David Lojkasek, Alex Boulougouris 30/04/21 EME Macro/Strategy: Czech Republic Improving and prudent, deep labour market divide Raffaella Tenconi, Alessio Chiesa 30/04/21 EME Macro/Strategy: Euro area Economic recovery shifts gear in April Raffaella Tenconi, Alessio Chiesa 30/04/21 EME Macro/Strategy: Romania Economic recovery healthier than rest of CE4 Raffaella Tenconi, Alessio Chiesa 30/04/21 EME Macro/Strategy: Hungary Economic recovery broadened in April Raffaella Tenconi, Alessio Chiesa 30/04/21 EMEA Refining A great or Greta future? Jonathan Lamb, Ondrej Slama 29/04/21 Enerjisa Enerji Bigger, better, faster, stronger Ondrej Slama, Bram Buring, Atinc Ozkan 27/04/21 Turkish Non-Financials Estimates revisions ahead of 1Q21E results Atinc Ozkan, Jakub Mician 26/04/21 EME Macro/Strategy: Poland March data surprise to the upside Raffaella Tenconi, Alessio Chiesa 23/04/21 GEK Terna Concessions, with a greener twist Fani Tzioukalia, Alex Boulougouris Although the information contained in this report comes from sources WOOD & Company believes to be reliable, we do not guarantee its accuracy, and such information may be incomplete or condensed. All opinions and estimates included in this report constitute our judgment as of this date and are subject to change without notice. This report is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security.