CONSOLIDATED FINANCIAL STATEMENTS AS AT …...2017/10/09 · Page 3 | MailUp Group Consolidated Financial Statements as at 30/06/2017 MailUp SpA Leader in the sending of e-mail and

CONSOLIDATED FINANCIAL STATEMENTS AS AT 30/06/2017

ContentsCorporatebodies ................................................................................................................................................................. 2MailUpSpALeaderinthesendingofe-mailandtextmessages ........................................................................................ 3Summarydata ...................................................................................................................................................................... 5Summaryreport ................................................................................................................................................................... 7Reportonoperationsaccompanyingtheannualandconsolidatedfinancialstatementsasat30/06/2017 ..................... 9Groupconsolidatedfinancialstatementsasat30/06/2017 ............................................................................................. 30Explanatorynotestotheconsolidatedfinancialstatementsasat30/06/2017 ............................................................... 34IndependentAuditors’Reportontheconsolidatedfinancialstatementsasat30/06/2017 ........................................... 57

Page2|MailUpGroupConsolidatedFinancialStatementsasat30/06/2017

Corporatebodies BoardofDirectors(Expiryoftermsforapprovaloftheannualfinancialstatementsasat31December2019)Nameandsurname OfficeMatteoMonfredini ChairmanoftheBoDwithproxiesNazzarenoGorni DeputyChairmanoftheBoDwithproxiesGianDomenicoSica DirectorwithproxiesMicaelaCristinaCapelli IndependentdirectorwithoutproxiesArmandoBiondi Independentdirectorwithoutproxies

BoardofStatutoryAuditors(Expiryoftermsforapprovaloftheannualfinancialstatementsasat31December2019)Nameandsurname OfficeMicheleManfredini ChairmanoftheBoardofAuditorsFabrizioFerrari RegularAuditorGiovanniRosaschinoPiergiorgioRuggeriAndreaTirindelli

RegularAuditorAlternateAuditorAlternateAuditor

Independentauditingcompany(Expiryoftermsforapprovaloftheannualfinancialstatementsasat31December2019)BDOItaliaSpA


MailUpSpALeaderinthesendingofe-mailandtextmessages

TheparentcompanyMailUpisalegalentityorganisedaccordingtothelawoftheItalianRepublic,whichoperatesinthe sector of marketing technology on the cloud (newsletters/e-mails, text messages, social networks). It is atechnologicalcompanythathasdevelopedaSaaS(software-as-a-service)cloudcomputingplatformchosenbySMEsand large enterprises to create, send and monitor newsletters, e-mails and text messages. MailUp is the leadingsolution in Italy intheESPsectorwithnearly11,000customersdistributedacrossmorethan50countries,ofwhich1,150managedby the retailernetwork.Onaconsolidated level, theGroupoperateswithnearly17,500directandindirect customers. Founded in 2002 in Cremona, MailUp is also based in Milan and San Francisco. After beingadmitted to trading in2014on theAIM Italiamarketoperatedby the ItalianStockExchange,MailUpadded to theorganicgrowthanewbusinessline,consistingoftheBEEeditorinitsvariousversions(beefree.io),whichalreadyhasthousands of customers worldwide and implemented a growth path by external lines, acquiring established andemergingbusinessesinthesamemarketsegmentorwithcomplementarybusiness:Acumbamail(SpanishmarketandLATAM),Globase(Nordicsmarket)andAgileTelecom(SMSwholesalemarket).

MailUpGroupstructureBelowistheorganisationalstructureoftheGroupasat30June2017:

MailUp Inc,established inSanFranciscoby theparentcompany inNovember2011, itoperateduntil31December2016,aimingtomarketandlocalisetheMailUp®platformintheUnitedStatesofAmericaand,moregenerally,ontheAmericancontinent. InDecember2016,theparentcompanyconferredthe intangibleassetsrelatingtotheproductBEEPluginandBEEPro.Thesubsidiarythereforeresolved,inserviceoftheconferralmadeduringFY2016,toincreaseitscapital reserves inaccordancewith local regulations.Since2017,MailUp InchasbeendealingwiththeexclusivecommercializationoftheBEEeditor,whichitowns,initsvariousversions,havingconsiderableinterestinthepublicofspecializedoperatorsasevidencedbythebrilliantmonth-on-monthgrowthrates.

Acumbamail SL, a start-up founded in 2012with registered office in Ciudad Real, Spain, has developed an e-mailmarketingplatformthatiswidespreadontheSpanish-speakingmarkets(SpainandLATAM)andfeaturesconsiderabledevelopment potential, with a freemium sales model targeting a lower profile customer base, which thereforecomplementsMailUp,whichisinsteadincreasinglytakingapositiononthemedium/highbracketofthemarket.Thefreemiummodel, in fact, envisages an initial level of free use of the platform,which thereafter requires paymentwhere a certain threshold of use is surpassed, thereby favouring customers with limited volumes and a reducednumberofaddressees.

MailUp Nordics A/S controls 100% of the capital of the company Globase International ApS, a Danish companyoperating in the e-mail marketing sector on the Scandinavian markets (Denmark, Norway, Sweden, Finland andIceland) with a focus on medium/large customers. The acquisition of the Danish companies aims to position theMailUp® platformon theNorthern Europeanmarket, exploiting the recognition of theGlobase trademark and the


favourablepositioningonamarketwithhighentrybarriersandahighlevelofspendingone-mailmarketing,bothbyofferingtheMailUp®platformtonewcustomersandbyprogressivelymigratingGlobaseplatformuserstoMailUp.

Agile Telecom SpA, with registered office in Carpi (MO), is an operator authorised by the Ministry of EconomicDevelopmentandCommunicationtoofferapubliccommunicationserviceandisalsoregisteredwiththeRegisterofOperatorsinCommunication(ROC)heldbytheItalianAuthorityforTelecommunicationsGuarantees(AGCOM).AgileTelecom has been operating since 1999 as an independent international operator specialised in SMS services,particularlyonthewholesaleSMSmarket.DozensofdirectconnectionswithcarriersandoperatorsacrosstheglobeallowAgileTelecomtooptimisedeliveryofmessages inall countries,guaranteeing itsbusinesscustomers thebestpossiblesendingqualityatthelowestpossibleprice.Itisalsotheparentcompany’sproviderofreferencefortheSMSdelivery services provided by the MailUp platform, thus making it possible to exploit profitable economic andtechnologicalsynergies.


Summarydata

MaineventsofHY12017

Thankstotheaccesstosixnewgeographicareas, includingcountriesandterritoriesoverseas,MailUphasachievedglobalcoverforitsSMSmessagingservice,enablingitscustomersinallsectorstosendSMSmessagestoallcountriesworldwide.Acapillarypresencein226networksthatguaranteestheMailUp®platformdeliveryoftextmessagesonanymobile carrier. Achieving global coverage comes as part of the aim of strengthening and developing the SMSchannel,aGroupassetthatgrowsconstantly,asconfirmedbytheorganicgrowthandacquisitionofAgileTelecom.

On1February2017,MailUp9waslaunched,theall-newdesignversionoftheplatform,enrichedwithnewfunctionsforautomationande-mailandSMSmarketing.MailUp9 isoneofthemost importantreleasesoftheplatform,theresult of a major intervention on the user experience. MailUp 9 comes with an all-new interface, thanks to thegraphical redesign and reorganisation according to functional areas, with the aim of offering businesses an evensimpler, more user-friendly browsing. Research continues on Marketing Automation technology, with MailUp 9introducingnewfunctionsforthecreationofworkflows:asfromtoday,userscannowcreateautomaticprocessestodelivermulti-channel campaigns in a timely, customised fashion. In the area dedicated to the creation of e-mails,MailUp 9 then introduces Collaboration, an innovative tool by which to share pre-launch stages of the campaign,allowingcolleaguesorcustomerstocollaborateonallaspectsofthemessage,throughtofinalapproval.

On 27 February 2017 was the completion of the path of organizational rethinking of theMailUp Group structurethroughthemergerby incorporationofNetworkSrl intoMailUp,undertakentooptimize intercompanyprocesses.TheanalysisoftheroleofNetwork,atechnologypartnerthathashistoricallyandexclusivelyhandledallthetechnicalfunctionsandtechnologyservicesrelatedtotheMailUpplatform,hasledtothemergerbyincorporationofthelatterdue to the simplification of the corporate and production structure of MailUp and of administrative processes,eliminatingduplicationandoverlapping.Theeffectsofthemergerwerefinalizedon20March2017withcompletionof registrationat thecompanyregister,while theaccountingandtaxeffectswereeffective from1 January2017 inaccordancewiththeprovisionsofthespecificlegislation.

On16March2017,theMailUpGrouplaunchedthenewcompanywebsitewww.mailupgroup.com,ameetingpointbetweenthecorporatedimensionandthecommunityofinvestors,analystsandmedia.Thenewwebsiteoffersallthenews, financial data and documents released by the Group. The website also represents the communication andmeetingspacebetweentheparentcompanyanditssubsidiaries -Acumbamail,Globase,AgileTelecomandtheBEEbusinessunit,todescribethecorporateevolutionoftheGroup,intherecentpastandindevelopmentstocome.

On27April2017,theOrdinaryShareholders’Meetingoftheparentcompany,followingexpiryofthemandateoftheBoard of Directors, appointed the new Board of Directors. In this respect, the Shareholders’Meeting resolved toreduce themembersof theBoardofDirectors from7 to5,2ofwhichwith the independencerequirementsof thearticlesofassociation.Thepurposeofthismodificationistoadjustthenumberofdirectorstothesizeandcomplexityof the company’s organizational structure, in compliance with the best corporate governance principles. TheShareholders’ Meeting also decided to confer a further three-year assignment, hence, up to the approval of thefinancialstatementsasat31December2019.AtthesamemeetingwastheapprovalofthetotalemolumentsthatwillberedistributedwithintheadministrativebodyasdeemedmostappropriateeveninviewoftheretentionobjectivesofMailUpkeypersonnelandpay-per-performanceobjectives;thisisnotonlyinlinewithbestpracticesbutalsowiththeobjectiveofimprovingcompanyvalueforshareholders.

The Board of Directors of MailUp that met on 5May 2017 conferredmanagement powers to the Directors andproceeded with consequent redistribution of the emoluments internally, as well as with the verification of theexistenceof independence requirementsofcertainDirectorsand the recruitmentof twonew“keymanagers”withqualificationasexecutives.Inparticular,theBoardappointedtheChairmanandtheChiefExecutiveOfficer,whowasassigned the role of Vice-Chairman, conferring to the same general powers of management of the companyattributingtothem-withinthedefinitionofnewcorporategovernanceinlinewithbestpractice-limitedpowersintermsofmatterorvaluetoasnotexplicitlyattributedtotheBoardofDirectorsincollegialfunction.Lastly,alsoasaresultoftheGroup’snewgovernancestructure,theBoardofDirectorshiredforthecompanyasexecutivethegeneralmanagerof theMailUpbusinessunit, intendedas theoverall sectorrelatedtotheDigital&E-mailMarketingarea,andtheheadoftheDeliverability&ComplianceandDataProtectionarea,bothformerMailUpBoardDirectorsandcurrently shareholders of the same. This assumption led to the qualification of keymanagers as “executives withstrategicresponsibilities”withconsequentapplicationtotheresolutionofthecompany’s“procedurefortransactionswithrelatedparties”andthereforefollowingtheopinion-unanimouslyfavourable,oftheIndependentDirectorsof


MailUp.Finally,theBoardattributedcertainspecialpowers(alsotothekeymanagersabove)forbettermanagementofthecompany. On30May2017,theBoardofDirectorsofMailUpapprovedthetransferoftheCremonaoperationaloffice tothenewofficesinviadell’InnovazioneDigitale3(formerlyviadelMacello),alsoinCremona,atthenewtechnologycentercalled“CRIT–DigitalInnovationCenter”.Thetransaction-withtheaimofbeingabletohavemorefunctionalofficesevenintermsoflong-termmanagementcosts(duetoabuildingwithlowenvironmentalimpactbuiltwiththelatesttechnologiesinthisregard)andatthesametimetobenefitfromtheintangibleassetsconstitutedbythepresenceinthe“technologycenter”ofothersectoroperatorswithconsequentpossiblesynergies-istoberealizedthroughthesigning of a lease agreement with the real estate company Floor Srl. In accordance with the provisions of theProcedureforTransactionswithRelatedParties,thetransactionwassubjecttopriorexaminationbytheCommitteeforTransactionswithRelatedParties,composedexclusivelyofIndependentDirectors.TheCommittee,havingnotedthe appropriateness of the agreed fees and compliance of the contractual provisions with applicable regulations,expressed a favourable opinion on the corporate interest, the economic viability and the correctness, evensubstantial,ofsaidtransaction. On 20 June 2017was the definition, in agreementwith the sellers, of the supplementary fee due as earn-out toZoidbergSrlfortheacquisitionof100%ofthesharecapitalofAgileTelecomSpA,finalizedinFebruary2016.Followingagreementbetweentheparties,theaforementionedsupplementaryfeewascalculatedtakingintoaccountthevalueof the average EBITDA of Agile Telecom for the two-year period 2015-2016 (this in line with the contents of thepurchaseandsaleagreement)andwasdefinedastotallingEuro2.8milliontobepaidasfollows:Euro2.4million,incashandinthreeseparatetranchesrespectivelyofEuro1millionby30June2017,alreadypaid,Euro800thousandby30June2018andEuro600thousandby30June2019,andtheremainderofEuro400thousandbymeansofpaymentin newly-issued shares assigned to the sellers by 30 June 2017. The 125,000 ordinary shares of MailUp, with noindicationofnominalvalueexpressed, for theearn-outportion inkind,are issuedataunitpriceofEuro3.20each(therefore with a premium of 45.5% on the price of the session of the stock exchange prior to the date of theresolution,of60%ontheaveragepriceofthelast3monthsatthereferencedatestipulatedinthecontractasat31May2017)andderive fromaspecificcapital increasetotallingEuro400,000.00(includingpremium)ofwhich0.025Euros for each share upon capital increase decided by the administrative body in execution of the delegationconferredoniton23December2015. On 22 June 2017, the Group completed the acqui-hire of MailCult, one of the international competitors of BEE(http://beefree.io/),aproductdevelopedandcommercializedbyMailUpInc.,anAmericanstart-upcompanybasedinSiliconValley100%controlledbyMailUpandorganizedaccordingtothemodelofthedualcompany(businessteamintheUSA,technologicalteaminItaly),whichhasdevelopedaninnovativeeditorforthecreationofemailsandlandingpages.Launchedasanexperimentalprojectinautumn2014,withthepublicationofthegratuitousBEEFreeproduct,BEEhasattractedmorethan1.5Mvisitorsandexceeded1,400payingcustomers in114countries,withanaveragerevenuegrowthof10%monthonmonth.Theacqui-hireofMailCultallowsBEEtoaccelerateitsgrowththroughtheinjection of highly-specific talent and expertise in themarket of tools for the creation of “responsive” emails andlanding pages. The 3 founders of MailCult were hired by the company, which also acquired its assets (contracts,technology platform, domains, websites). This transaction, of significant strategic importance, did not have asignificantfinancialimpactonthecompany.TheaimofthistransactionistostrengthentheinvestmentinBEE,whichemergedas anexperimentalproduct aspartof researchanddevelopmentactivities andhasbecomea trueglobalstart-upwithintheGroupwith8peoplededicatedfull-timeandinternationalbusinessgrowingsharply,particularlyintheUSmarket.


Summaryreport

Consolidatedmanagerialincomestatementasat30/06/2017

Description 30/06/2017 % 30/06/2016 % Delta Delta%

E-mailrevenues 4,702,584 35.94% 4,349,050 42.91% 353,534 8%

SMSrevenues 7,512,506 57.41% 5,256,382 51.86% 2,256,124 43%

BEErevenues 183,624 1.40% 49,065 0.48% 134,559 274%

Professionalservicesrevenues 218,413 1.67% 172,707 1.70% 45,706 26%

Otherrevenues 467,524 3.57% 309,131 3.05% 158,393 51%

Totalrevenues 13,084,651 100.00% 10,136,335 100.00% 2,948,316 29%

COGS 7,358,342 56.24% 5,354,882 52.83% 2,003,460 37%

Grossprofit 5,726,309 43.76% 4,781,453 47.17% 944,855 20%

S&Mcosts 1,542,898 11.79% 1,385,615 13.67% 157,283 11%

R&Dcosts 454,058 3.47% 181,194 1.79% 272,864 151%

-CapitalisedR&Dpayrollcost (444,063) -3.39% (645,525) -6.37% 201,461 -31%

-R&Dcosts 898,121 6.86% 826,719 8.16% 71,402 9%

Generalcosts 2,531,451 19.35% 2,106,108 20.78% 425,343 20%

Totalcosts 4,528,406 34.61% 3,672,917 36.24% 855,490 23%

EBITDA 1,197,902 9.16% 1,108,536 10.94% 89,366 8%

Amortisation,depreciationandprovisions 711,990 5.44% 574,419 5.67% 137,571 24%

EBIT 485,913 3.71% 534,118 5.27% (48,205) -9%

Financialoperations (42,928) -0.33% (27,258) -0.27% (15,670) 57%

EBT 442,985 3.39% 506,860 5.00% (63,875) -13%

Incometax 313,487 2.40% 226,807 2.24% 86,680 38%

Prepaidtax (44,279) -0.34% 147,530 1.46% (191,809) -130%

Deferredtax 16,046 0.12% (1,996) -0.02% 18,042 -904%

Periodprofit/(loss) 157,731 1.21% 134,519 1.33% 23,212 17%


ConsolidatedbalancesheetwithdeterminationofNWCasat30/06/2017

Description 30/06/2017 31/12/2016 Delta Delta%

Intangiblefixedassets 3,780,003 3,835,490 (55,487) -1%

Consolidationdifferences 9,829,834 10,308,159 (478,324) -5%

Tangiblefixedassets 930,269 709,130 221,140 31%

Financialfixedassets 189,083 171,653 17,430 10%

Fixedassets 14,729,189 15,024,431 (295,242) -2%

Tradereceivables 2,964,111 3,396,264 (432,153) -13%

Tradepayables (3,820,831) (2,947,547) (873,283) 30%

Commercialworkingcapital (856,720) 448,717 (1,305,436) -291%

Taxreceivablesandpayables 394,382 416,106 (21,725) -5%

Accrualsanddeferrals (5,513,426) (5,120,696) (392,729) 8%

Otherreceivablesandpayables (2,092,830) (3,679,200) 1,586,370 -43%

Networkingcapital (8,068,593) (7,935,073) (133,520) 2%

Provisionsforrisksandcharges (71,072) (57,739) (13,333) 23%

Stafffunds (978,994) (933,526) (45,468) 5%

Deferredtaxliabilities (18,796) (31,287) 12,492 -40%

Netinvestedcapital 5,591,734 6,066,806 (475,072) -8%

Sharecapital 286,391 283,266 3,125 1%

Reserves 7,052,258 5,896,510 1,155,748 20%

Periodprofit/(loss) 130,831 780,519 (649,688) -83%

Shareholders’equityofminorityinterests 85,893 59,959 25,935 43%

Shareholders’equity 7,555,373 7,020,253 535,120 8%

Short-termpayables/(cash) (4,559,524) (3,199,592) (1,359,932) 43%

Medium/long-termpayables 2,595,885 2,246,145 349,740 16%

Netfinancialposition (1,963,639) (953,447) (1,010,192) 106%

Totalsources 5,591,734 6,066,806 (475,072) -8%


Reportonoperationsaccompanyingtheannualandconsolidatedfinancialstatementsasat30/06/2017

Dearshareholders,Theyearendedon30/06/2017recordsapositiveconsolidatedresultofEuro157,731,ofwhichEuro26,900pertaintominorities,afteramortisation,depreciationandimpairmentappliedforatotalofEuro711,990andprovisionsmadeforcurrentanddeferredtax in theamountofEuro285,254.TheEBITDAof theGroup in theHYamountedtoEuro1,197,902.Belowistheanalysisofthecompany’spositionandthetrendofoperationsrelativetotheHYjustended.1.IntroductionThisreport ispresentedforthepurposesoftheconsolidatedfinancialstatementsoftheMailUpGroup(hereinafter“MailUpGroup”or“Group”)preparedinaccordancewithInternationalAccountingStandards(IAS/IFRS).AlthoughnothavingmettherequirementslaiddownbyArt.27ofLegislativeDecreeno.127/1991,theadministrativebody of MailUp resolved to draft the consolidated and annual financial statements of the parent company on avoluntarybasis,inaccordancewithinternationalaccountingstandards(IAS/IFRS)insofarasMailUp(andtheGroupitheads)hasexercisedthefacultyenvisagedbyArt.2-3ofLegislativeDecreeno.38/2005.In this document,weprovide information regarding theGroup’s consolidatedposition. This report, drawnupwithbalancesexpressedinEuro, ispresentedsoastoaccompanytheconsolidatedhalf-yearfinancialstatementsforthepurpose of providing income-related, equity, financial and operating information on the company accompanied,wherepossible,byhistoricelementsandforecastsvaluations.For comparativepurposes, providedbeloware the consolidatedbalance sheet as at 31/12/2016 in addition to theconsolidatedincomestatementasat30/06/2016,thelatterre-elaboratedinapplicationofInternationalAccountingStandards(IAS/IFRS).Asregardstheconsolidatedfinancialstatements,whichstrivetoensurestandardisedmeasurementcriteriaandhavebeenpreparedonthebasisof fullconsolidation,pleasenotethat theconsolidationscope isasshownbelow(asat30/06/2017):

Company name Registered office

Share capital as at 30/06/2017

%

MAILUPS.P.A. Milan Euro286,391 parentcompanyMAILUPINC. UnitedStatesof

AmericaEuro41,183* 100%

MAILUPNORDICSAS Denmark Euro67,001* 100%GLOBASEINTERNATIONALAPS Denmark Euro16,750* 100%controlledbyMailUpNordicsAGILETELECOMSPA Carpi(Mo) Euro500,000 100%ACUMBAMAILSL Spain Euro4,500 70%

(*historicexchangerateappliedasatthedateoffirstconsolidation) 2.EconomicFrameworkHY12017Q22017confirmedtherecoveryoftheItalianeconomy.Grossdomesticproduct(GDP)increasedby0.4%comparedwiththepreviousquarterandby1.5%comparedtoQ22016,althoughwithfewerworkingdays.Thechangeacquiredfor HY1 2017 was +1.2%. GDP benefited from favourable performance in the services sector and the recovery ofindustry’saddedvalue.AllmajoraggregatesofdomesticdemandalsoroseinQ2,withgrowthof0.2%ofnationalfinalconsumptionand0.7%ofgrossfixedinvestments.Importsandexportsgrewby0.7%and0.6%,respectively.Positiveeconomic trendswere recorded for theaddedvalueof the industry (+0.6%)and services (+0.4%),while theaddedvalueofagriculturedecreasedby2.2%.

ThegrowthoftheItalianeconomyisalsoattributabletothepositivedynamicsofexportsandinvestments,aswellasthe contributionof the still expansive fiscalmeasuresadoptedby theGovernment, including tax incentives for thepurchaseofmachineryandplant.Householdconsumptionhasgrown,ashasindustrialproduction,drivenmainlybydomesticdemand.Employmentfigureshaveimproved,totheextentthatthelabourmarketisstillfarfromanoptimalsituation.Thecreditmarkethasalso improved,wherethegeneraltighteningof funding isover,althoughthecreditofferisstillveryselectivetoday,especiallywithrespecttosomespecificsectors.


Consumptioninflationremainsmodest:theBankofItalyforecastsaninflationrateof1.4%thisyearand1.1%inthenext;in2019,itisexpectedtoriseto1.6%,asaresultofamoderateaccelerationinsalaries.

In the Bank of Italy surveys, companies are more optimistic about the general economic situation; opinions onconditionstoinvesthaveimprovedinallsegments.Companiesalsonotethatcapitalaccumulation,weakenedinQ1,wasexpectedtoresumeinthespringandanticipateanaccelerationinHY22017.Economictrendsarealsoconsistentwithcontinuedgrowthinhouseholdspendingrecordedinrecentmonths.

Even in the Eurozone, growth appears widespread and balanced with reference to the internal and externalcomponentsofdemand.TheGroupTheparentcompanyMailUpisalegalentityorganisedaccordingtothelawoftheItalianRepublic,whichoperatesinthe sector of marketing technology on the cloud (newsletters/e-mails, text messages, social networks). It is atechnologicalcompanythathasdevelopedaSaaS(software-as-a-service)cloudcomputingplatformchosenbySMEsand large enterprises to create, send and monitor newsletters, e-mails and text messages. MailUp is the leadingsolution in Italy intheESPsectorwithnearly11,000customersdistributedacrossmorethan50countries,ofwhich1,150managedby the retailernetwork.Onaconsolidated level, theGroupoperateswithnearly17,500directandindirect customers. Founded in 2002 in Cremona, MailUp is also based in Milan and San Francisco. After beingadmitted to trading in2014on theAIM Italiamarketoperatedby the ItalianStockExchange,MailUpadded to theorganicgrowthanewbusinessline,consistingoftheBEEeditorinitsvariousversions(beefree.io),whichalreadyhasthousands of customers worldwide and implemented a growth path by external lines, acquiring established andemergingbusinessesinthesamemarketsegmentorwithcomplementarybusiness:Acumbamail(SpanishmarketandLATAM),Globase(Nordicsmarket)andAgileTelecom(SMSwholesalemarket).InaccordancewithArt.2428CivilCode,wewouldpointoutthatbusinessoftheparentcompanywascarriedoutinHY12017,intheregisteredofficeofMilan,atVialeRestelli1,andintheadministrativeofficeofCremona,atViaDeiComiziAgrari,10.AsofJuly2017,asfurtherspecifiedbelow,theadministrativeofficeofCremonawastransferredtoviadell’InnovazioneTecnologica3,atthetechnologycentercalled“CRIT–DigitalInnovationCenter”.

InHY12017, froma legalviewpoint,MailUpplayed the roleofparentcompanyof the followingcompanies,whichcarryoutcomplementaryand/orfunctionalactivitiestotheGroup’scorebusiness:

• MailUpInc• AcumbamailSL• MailUpNordicsAS• GlobaseInternationalApS• AgileTelecomSpA

On27February2017wasthemergerbyincorporationofthe100%controlledcompanyNetworkSrlintoMailUp.Theeffects of the merger were finalized on 20March 2017 following registration at the company register, while theaccounting and tax effects were effective from 1 January 2017 in accordance with the provisions of the specificlegislation. Themergerwas justified by the need to simplify the company and production structure of theMailUpGroupandalsoallowforthesimplificationofadministrativeprocessesthankstotheeliminationofduplicationsandoverlapping.

BelowistheGroup’sparticipationstructureupdatedasat30June2017.


MaineventsInHY12017,theactivitiesoftheMailUpGroupwerecharacterisedbytheeventsindicatedbelow:MaineventsintheHY Thankstotheaccesstosixnewgeographicareas, includingcountriesandterritoriesoverseas,MailUphasachievedglobalcoverforitsSMSmessagingservice,enablingitscustomersinallsectorstosendSMSmessagestoallcountriesworldwide.Acapillarypresencein226networksthatguaranteestheMailUp®platformdeliveryoftextmessagesonanymobile carrier. Achieving global coverage comes as part of the aim of strengthening and developing the SMSchannel,aGroupassetthatgrowsconstantly,asconfirmedbytheorganicgrowthandacquisitionofAgileTelecom. On1February2017,MailUp9waslaunched,theall-newdesignversionoftheplatform,enrichedwithnewfunctionsforautomationande-mailandSMSmarketing.MailUp9 isoneofthemost importantreleasesoftheplatform,theresult of a major intervention on the user experience. MailUp 9 comes with an all-new interface, thanks to thegraphical redesign and reorganisation according to functional areas, with the aim of offering businesses an evensimpler, more user-friendly browsing. Research continues on Marketing Automation technology, with MailUp 9introducingnewfunctionsforthecreationofworkflows:asfromtoday,userscannowcreateautomaticprocessestodelivermulti-channel campaigns in a timely, customised fashion. In the area dedicated to the creation of e-mails,MailUp 9 then introduces Collaboration, an innovative tool by which to share pre-launch stages of the campaign,allowingcolleaguesorcustomerstocollaborateonallaspectsofthemessage,throughtofinalapproval. On 27 February 2017 was the completion of the path of organizational rethinking of theMailUp Group structurethroughthemergerby incorporationofNetworkSrl intoMailUp,undertakentooptimize intercompanyprocesses.TheanalysisoftheroleofNetwork,atechnologypartnerthathashistoricallyandexclusivelyhandledallthetechnicalfunctionsandtechnologyservicesrelatedtotheMailUpplatform,hasledtothemergerbyincorporationofthelatterdue to the simplification of the corporate and production structure of MailUp and of administrative processes,eliminatingduplicationandoverlapping.Theeffectsofthemergerwerefinalizedon20March2017withcompletionof registrationat thecompanyregister,while theaccountingandtaxeffectswereeffective from1 January2017 inaccordancewiththeprovisionsofthespecificlegislation. On16March2017,theMailUpGrouplaunchedthenewcompanywebsitewww.mailupgroup.com,ameetingpointbetweenthecorporatedimensionandthecommunityofinvestors,analystsandmedia.Thenewwebsiteoffersallthenews, financial data and documents released by the Group. The website also represents the communication andmeetingspacebetweentheparentcompanyanditssubsidiaries-Acumbamail,Globase,AgileTelecomandtheBEEbusinessunit,todescribethecorporateevolutionoftheGroup,intherecentpastandindevelopmentstocome. On27April2017,theOrdinaryShareholders’Meetingoftheparentcompany,followingexpiryofthemandateoftheBoard of Directors, appointed the new Board of Directors. In this respect, the Shareholders’Meeting resolved toreduce themembersof theBoardofDirectors from7 to5,2ofwhichwith the independencerequirementsof thearticlesofassociation.Thepurposeofthismodificationistoadjustthenumberofdirectorstothesizeandcomplexityof the company’s organizational structure, in compliance with the best corporate governance principles. TheShareholders’ Meeting also decided to confer a further three-year assignment, hence, up to the approval of thefinancialstatementsasat31December2019.Atthesamemeetingwastheapprovalofthetotalemolumentsthatwill


beredistributedwithintheadministrativebodyasdeemedmostappropriateeveninviewoftheretentionobjectivesofMailUpkeypersonnelandpay-per-performanceobjectives;thisisnotonlyinlinewithbestpracticesbutalsowiththeobjectiveofimprovingcompanyvalueforshareholders. The Board of Directors of MailUp that met on 5May 2017 conferredmanagement powers to the Directors andproceeded with consequent redistribution of the emoluments internally, as well as with the verification of theexistenceof independence requirementsofcertainDirectorsand the recruitmentof twonew“keymanagers”withqualificationasexecutives.Inparticular,theBoardappointedtheChairmanandtheChiefExecutiveOfficer,whowasassigned the role of Vice-Chairman, conferring to the same general powers of management of the companyattributingtothem-withinthedefinitionofnewcorporategovernanceinlinewithbestpractice-limitedpowersintermsofmatterorvaluetoasnotexplicitlyattributedtotheBoardofDirectorsincollegialfunction.Lastly,alsoasaresultoftheGroup’snewgovernancestructure,theBoardofDirectorshiredforthecompanyasexecutivethegeneralmanagerof theMailUpbusinessunit, intendedas theoverall sectorrelatedtotheDigital&E-mailMarketingarea,andtheheadoftheDeliverability&ComplianceandDataProtectionarea,bothformerMailUpBoardDirectorsandcurrently shareholders of the same. This assumption led to the qualification of keymanagers as “executives withstrategicresponsibilities”withconsequentapplicationtotheresolutionofthecompany’s“procedurefortransactionswithrelatedparties”andthereforefollowingtheopinion-unanimouslyfavourable,oftheIndependentDirectorsofMailUp.Finally,theBoardattributedcertainspecialpowers(alsotothekeymanagersabove)forbettermanagementofthecompany. On30May2017,theBoardofDirectorsofMailUpapprovedthetransferoftheCremonaoperationaloffice tothenewofficesinviadell’InnovazioneDigitale3(formerlyviadelMacello),alsoinCremona,atthenewtechnologycentercalled“CRIT–DigitalInnovationCenter”.Thetransaction-withtheaimofbeingabletohavemorefunctionalofficesevenintermsoflong-termmanagementcosts(duetoabuildingwithlowenvironmentalimpactbuiltwiththelatesttechnologiesinthisregard)andatthesametimetobenefitfromtheintangibleassetsconstitutedbythepresenceinthe“technologycenter”ofothersectoroperatorswithconsequentpossiblesynergies-istoberealizedthroughthesigning of a lease agreement with the real estate company Floor Srl. In accordance with the provisions of theProcedureforTransactionswithRelatedParties,thetransactionwassubjecttopriorexaminationbytheCommitteeforTransactionswithRelatedParties,composedexclusivelyofIndependentDirectors.TheCommittee,havingnotedthe appropriateness of the agreed fees and compliance of the contractual provisions with applicable regulations,expressed a favourable opinion on the corporate interest, the economic viability and the correctness, evensubstantial,ofsaidtransaction. On 20 June 2017was the definition, in agreementwith the sellers, of the supplementary fee due as earn-out toZoidbergSrlfortheacquisitionof100%ofthesharecapitalofAgileTelecomSpA,finalizedinFebruary2016.Followingagreementbetweentheparties,theaforementionedsupplementaryfeewascalculatedtakingintoaccountthevalueof the average EBITDA of Agile Telecom for the two-year period 2015-2016 (this in line with the contents of thepurchaseandsaleagreement)andwasdefinedastotallingEuro2.8milliontobepaidasfollows:Euro2.4million,incashandinthreeseparatetranchesrespectivelyofEuro1millionby30June2017,alreadypaid,Euro800thousandby30June2018andEuro600thousandby30June2019,andtheremainderofEuro400thousandbymeansofpaymentin newly-issued shares assigned to the sellers by 30 June 2017. The 125,000 ordinary shares of MailUp, with noindicationofnominalvalueexpressed, for theearn-outportion inkind,are issuedataunitpriceofEuro3.20each(therefore with a premium of 45.5% on the price of the session of the stock exchange prior to the date of theresolution,of60%ontheaveragepriceofthelast3monthsatthereferencedatestipulatedinthecontractasat31May2017)andderive fromaspecificcapital increasetotallingEuro400,000.00(includingpremium)ofwhich0.025Euros for each share upon capital increase decided by the administrative body in execution of the delegationconferredoniton23December2015. On 22 June 2017, the Group completed the acqui-hire of MailCult, one of the international competitors of BEE(http://beefree.io/),aproductdevelopedandcommercializedbyMailUpInc.,anAmericanstart-upcompanybasedinSiliconValley100%controlledbyMailUpandorganizedaccordingtothemodelofthedualcompany(businessteamintheUSA,technologicalteaminItaly),whichhasdevelopedaninnovativeeditorforthecreationofemailsandlandingpages.Launchedasanexperimentalprojectinautumn2014,withthepublicationofthegratuitousBEEFreeproduct,BEEhasattractedmorethan1.5Mvisitorsandexceeded1,400payingcustomers in114countries,withanaveragerevenuegrowthof10%monthonmonth.Theacqui-hireofMailCultallowsBEEtoaccelerateitsgrowththroughtheinjection of highly-specific talent and expertise in themarket of tools for the creation of “responsive” emails andlanding pages. The 3 founders of MailCult were hired by the company, which also acquired its assets (contracts,technology platform, domains, websites). This transaction, of significant strategic importance, did not have asignificantfinancialimpactonthecompany.TheaimofthistransactionistostrengthentheinvestmentinBEE,which


emergedas anexperimentalproduct aspartof researchanddevelopmentactivities andhasbecomea trueglobalstart-upwithintheGroupwith8peoplededicatedfull-timeandinternationalbusinessgrowingsharply,particularlyintheUSmarket.BelowissomedataonthepricesandvolumesoftheMailUpsecurityinHY12017.

Placingprice Euro1.9230*

29/07/2014

MaximumpriceHY1 Euro2.8980

30/06/2017

MinimumpriceHY1 Euro1.6150

24/02/2017

*priceadjustedasaresultofthefreecapitalincreaseof11April2016.

Theaveragepriceof theMailUpshare inHY12017amountedtoEuro1.9780,withanevidentgrowthtrend inQ2,meanQ2Euro2.13comparedwiththesamefigureofQ1Euro1.84(+15.76%),andparticularlybrilliantperformanceinJune2017,whichhadanaveragelistingofEuro2.29.On3July2017,thestockreachedthemaximumpriceof2017untilthedateofpreparationofthesefinancialstatements,equaltoEuro2.9840pershare.TheincreaseinthepriceoftheMailUpshareasat30Junecomparedtothebeginningoftheyear,was65.6%,Euro+1.15.

PerformanceoftheMailUpsecurityinHY12017,pricesandvolumes-Source:www.borsaitaliana.it


PerformanceoftheMailUpsecurityfromthebeginningof2017todate,pricesandvolumes-Source:www.borsaitaliana.itVolumes traded in HY1 2017 recorded a daily average of around 22,872 pieces (Source: Google Finance) with amaximumof370,500piecesrecordedon29March2017.ThisfigureshowsasignificantincreaseintheinterestofthemarkettowardsMailUp,asevidencedbythecomparisonwiththesamefigureof2016,equalto2,083units(SourceEnVentEquityResearch-18/10/2016).Evenintermsofaveragevolumes,thegrowthtrendisparticularlyevidentinQ22017,recordingafiguresubstantiallydoubledcomparedtoQ1tomorethan30thousandpiecesaday.Growthindemandandtrendsofthemarketsonwhichthecompanyoperates

TheMarketingTechnologyMarket(MarTech)

MailUpGroupispartoftheMarketingTechnologymarket(MarTech),acloud-basedecosystemofmarketingsolutionsand technological tools aimedatenablingbusinesses to rollout theirdigitalmarketing strategies. Thisecosystem isgrowing very fast and is populated by both small-sized players focused on specific segments and large enterprisesoftwarefirmscoveringthewholerangeofMarTechcustomers’needs.

MarTechLandscape:wide,complex,fragmentedandsegmented

Technologyononesideandtraditionaloff-linemarketingontheotheronehavemergedoverthelastdecadecreatingacloudbasedecosystemofmarketingstrategies,solutionsandtoolsknownasMarketingTechnologyor,alternatively,“MarTech”. This ecosystemhasexperiencedahuge20x growthover the last fewyears, accounting in2016 for ca.3,500solutions(i.e.synergicproductsandservicesthatcustomersareprovidedwith)comparedtoca.150asof2011.

Suchacrowdedspaceiscomplexandfragmentedwithsixmainsub-industries:

• Advertising&Promotion(mobilemarketing,socialandvideoadvertising);• Content&Experience(mobileapps,emailmarketing,SEO,marketingautomationandleadmanagement,CMS);• Social&Relationship(events,meetings&webinars,socialmediamarketing,influencers,CRM);• Commerce&Sales(retail&proximitymarketing,salesautomation,ecommerceplatformsandmarketing);• Data(marketing,mobile&webanalytics,customerdataplatforms,predictiveanalytics);• Management(productmanagement,budgeting&finance,agileandleanmanagement);

AmongthemaintrendsthataredrivingMarTechevolutionwebelievethatthemostrelevantarethosebasedonBigData collection and analysis through Artificial Intelligence, on the market structure side we expect M&A drivenconsolidationtorapidlytakeoff.

Asmassiveamountofdatacannotbeeasilymanaged,itisbecomingincreasinglyimportanttorelyonAutomation/Automatedworkflowsand,inperspective,onArtificialIntelligencetools.Indeed,Artificialintelligenceshouldleveragethe decision-making and execution abilities of machine learning thus extracting more meaningful key findings,optimizingpersonalizedmarketingactivitiesandprovidingscalablesolutions.

MailUpGroupreferencesegments:Emailmarketing,Mobilemarketing,MarketingAutomation

Withinsuchacomplex,segmentedandevolvingframework,thesegmentsthataremoreappropriatetoconsider inrelationtoMailUpGroup’sactivityareforsure:

1. Emailmarketing segment:emails represent one of themost commonmean throughwhich digitalmarketingcommunication campaigns are promoted and customer acquisition activity is boosted. Despite intensecompetitionfromothercommunicationtools(instantmessagingplatforms,chat,socialnetworks),emailsusersand usage are expected to keep growing. Indeed, an email address is required for nearly all other forms ofcommunication and for all e-commerce transactions and registrations. As an effect, industry experts forecastthatby theendof2020 thenumberofemailusersworldwidewill top3.0bn i.e.nearlyhalfof theworldwidepopulation, up from the current over 2.6bn level (CAGR > 3.0%). Growth should be even higher in terms ofnumberofbusinessandconsumeremailssentandreceivedperday,ca.4.6%CAGRoverthenextfouryearsuptoatotalofover257bnmessages.Intermsofmarketplayers,overallthissegmentaccountsforca.300solutionscurrentlyavailabletocustomers,rangingfromcheapandstandardizedtomorecustomizedonessoldathigherfees.


Source:Chiefmartec,ValueTrackAnalysis

2. Mobile marketing / messaging segment:mobile marketing includes SMS communication campaigns which,

despite the fact that new technologies daily landon smartphones, remainoneof themost preferred tools insalesandcustomeracquisitionactivities.Inadditiontomarketingpurposes,SMSarealsousedfortransactionalpurposes, thusgeneratinganalternative sourceof revenues to serviceproviders.TransactionalSMSare thosesent after, for instance, online purchases have been completed or for 2-Factor authentication (2FA). Thissegment as well is highly fragmented as competition may include also pure Telecommunicationcompanies.Overall,itaccountsforca.500solutionscurrentlyavailabletocustomers.



3. MarketingAutomationsegment:werefertoMarketingAutomationwhendealingwithsoftwaresolutionsthatallowfor“workflowmanagement” insophisticatedmarketingcampaigns.Theworkflowrepresentsasequenceof actions that are automatically triggered once that a certain event occurs. Basic workflows include, forinstance,welcomeemailssentonceasubscriptionformhasbeenfilledonline.Additionally,SMScanbetriggeredsoastoreachthepotentialcustomeronitsmobiledeviceaswell.Aprimarybenefitofmarketingautomationisthatitsavestimetocompanieswhileimplementingtheircustomeracquisitionstrategies,thusallowingthemtoimprove their cost structureeffectiveness.MarketingAutomation isoneof themost crowded segment in themarketingtechnologiesspacewithca.160solutionscurrentlyofferedtoprospectcustomers.


MarTechcompetitivestructure:fromnichefocusedplayerstolargeintegratedones

In such a large, complex, and interconnected market, companies need either to position themselves in a specificsegment or to diversify their business activity and aggregate / include asmany services as possible under one bigframework. That’s whywe find both small-sized players and large enterprise software firms, such as Adobe, IBM,Oracle,Salesforce,andSAP.

Whiletheformerarepreciselydesignedbytheirfounderstoaddressaspecificmarketniche,thelatterareshapedtoaddressmultiple segmentswithcoexistencebeingpossiblebecausemarketing technology ismainlybasedoncloudplatforms,asMailUp,thatcanbeaccessedbothonastandalonebasisorembeddedinbiggerandmorecomplexones.

Most vendors have invested significant resources to let their platforms easily access the marketing technologyecosystem.Indeed,nowadaysmostmarketingtechnologyproductscomewithaplugand-playsupport,thusallowingforintegrationwith,forinstance,majorCRMandmarketingautomationplatforms.iPaaS(integration-Platform-as-a-Service)productshavealsogrownsignificantly,henceincreasingtheoverall levelofconnectionframeworkamongstmarketingtechnologies.


The immediateeffectof thesedynamicshasbeen toallowmarketers to select thebestproduct available,withoutbeinglockedtoasinglevendor.

Marketconsolidationtheverylikelyoutcomeinthenextfuture

Beinga relativelyyoungmarket, it’squiteobvious thatMarTechhasnot foundadefinitivestructureyetandthis istrue also for the number of active vendors. Still there aremore incoming companies than outgoing ones and thismeansmoreprospectedgrowthaheadbutalsogreaterchallengestobefacedbyexistingincumbents.

This said, we expect this expansion to come to an end sooner or later and consolidation through mergers andacquisitionstobethemostlikelystepahead.ThestartofsuchatrendisalreadyvisibleifwelookatthewholeCloudmarketevolution.Indeed,M&AdealsinthissectorhaveaddeduptoUS$120bntotalvaluei.e.ca.40%oftotalmarketcapitalisationofcloudcompanies.

The timing andmagnitudeof such a consolidation trendwill be the result of the combinedeffect of the followingforces fighting each other. Growth forces, depending on several financial, techical and economic sub-factors; firmsustainability,players in this industryhaveanon-trivialability topersist, switchingcosts representoneof themostimportantreasonwhymarketerstendtobestuckwithasingleprovider,whichhappensnotonlybecauseofthedatainvolved,butalsobecausedependenciesariseonceatoolhasbeenusedforalongtime.Limitstofirmgrowth,evenlarge-sized corporations and software giants are not able to completely dominate themarket and there is enoughroomforsmall-sizedfirmstogrowandtospecializeinparticularniches,andexitforces,headwindsfromcompetitionare very strong, including disruption events that completely change the technological environment and not allcompaniesareabletostand,couldstoptheriseofnewplayersorforcesomeofthemaretoabandonthemarket.

Competitors’behaviour

Inthemarketcontextthatwehaveoutlinedabove,therearefewoperatorswithanofferrelatedtotheprovisionofservicesexclusivelyinSoftware-as-a-ServicemodeasfortheMailUpplatform:moreoften,thetechnologicalofferofcompetitorsisflankedbyawiderangeofcomplementaryservices(graphicdesign,developmentofcontests,landingpages,listbuilding,businessintelligence,systemintegration,hosting/housing,CRM,and/orprovisionofothersoftwareapplications).

TheMailUpGroup is one of the top three Italian cloudmarketing technology providers and among the top ten inEurope,althoughitisdifficulttopreciselyidentifythesizeofparticipantsforthevarietyanddifferenttypesofplayersmentionedabove.

MailUp is Italian leader (in terms of the volumes of emails sent and number of customers) in the Email ServiceProvider(ESP)industry.

Onexportmarkets,eachcountryhasvariousoperatorswiththeabove-describedarticulatedoffercharacteristics,butfarmorerarely,purelytechnologicalplayers.Theselatteraremainlyconcentratedonthemoreevolvedmarkets,likeintheEnglish-speakingmarketsaswellasFrance,GermanyandPoland.


OnAnglo-Saxonmarkets,competitionnumbershundredsofoperators,someofwhicharealreadylistedorhavebeenrecentlyacquired.Someofthesehaveachievedacustomerbaseofdozensofthousandsofunitsandinsomecasesevenmillionsofusers(onlypartlypaying).

MailUp remainsoneof the fewsolutionsworldwide toassociate the typical functionsofESPwith thepossibilityofsending transaction emails, plus the possibility of having the platform in whitelabel (i.e. resellable to third partybrand),multi-lingualandintegratedwiththeSMS/Socialchannels.

Social,politicalandunionclimateThe internal social climate, both inMilan and in the office of Cremona, aswell as at the offices of subsidiaries, ispositiveandfocusedonfullcollaboration.OperatingperformanceinGroupsectorsInHY12017,theMailUpGrouprecordedpositiveresults.TotalconsolidatedrevenueswentfromEuro10.1milliontoEuro13.1million,anincreaseofalmostEuro3millionand30%inpercentageterms.Movingontothemainbusinesslines, the SMS segment recorded the most striking growth with nearly Euro 2.3 million of higher consolidatedrevenues(+43%)overthesameperiodof2016,thanksinparticulartothebrilliantresultsofAgileTelecom.BEEalsohad a very significant growth in theHY fromEuro 50 thousand in revenues to nearly Euro 185 thousand (+274%),demonstratinghow theproduct, a sortof start-upwithin theGroup, is rapidlyappealing toUSmarketers, andnotonly.Themailsegment,byitsverynaturethemoststableandconsolidatedwithintheGroup,recordedanincreaseof8%, amounting to more than Euro 4.7 million in revenues. In fact, it mainly refers to annual charges subject toautomatic renewal save for termination, the churn rate of which is more than offset by the acquisition of newcustomers and up-selling to existing customers, who are extremely loyal and sensitive to quality of service.Moredynamicandvolatile,aswellashighlyprice-oriented,theSMSbusiness,asisderivedfromthedynamicsmentionedabove.ThetrendoftheProfessionalServicesofPSEwasalsopositivewithanincreaseofaboutEuro45thousand.Consolidated EBITDA reached nearly Euro 1.2 million, up 8% from HY1 of the previous year, while pre-tax profit,althoughremainingpositiveatnearlyEuro450thousand, isslightlylowerthanthe2016figure(Euro-64thousand),mainly as a result of the increase in amortization (Euro +140 thousand) deriving from the large investment in theplatform,preparatorytothe launchofMailUp9andtheBigDataAnalyticsproject, largely incurred in thepreviousyear,butthathavebecomefullyunderregimesincethebeginningof2017.NetprofitintheHY,aftertheestimateofcurrentanddeferredtaxes,amountedtoEuro158thousandcomparedtoEuro135thousandinthepreviousperiod,up17%,correspondingtoEuro23thousandinabsolutevalue.It is recalled that, by virtue of the adoption, from the consolidated financial statements as at 31/12/2016, of theIAS/IFRS international accounting standards, the economic comparison values as at 30 June 2016 reported below,have been revised according to these international standards for a greater homogeneity of comparison andsignificanceofreadingofthefiguresreported,withchangeshoweverofnotsignificantamount.Forfurtherdetailsinregard,referencemaybemadetoAppendix1tothenotestotheHYfinancialstatements.MaineconomicfiguresoftheMailUpGroupThetablebelowsummarisestheresultsconsolidatedintheHYcomparedwiththepreviousperiodintermsoftotalrevenues,EBITDAandpre-taxresult(EBT).

30/06/2017 30/06/2016Totalrevenues 13,084,651 10,136,335EBITDA 1,197,902 1,106,845Pre-taxresult(EBT) 442,985 506,860

The consolidated reclassified income statement has undergone the following changes with respect to that of thepreviousperiod(amountsarestatedinEuro):


Description 30/06/2017 % 30/06/2016 % Delta Delta%

E-mailrevenues 4,702,584 35.94% 4,349,050 42.91% 353,534 8%

SMSrevenues 7,512,506 57.41% 5,256,382 51.86% 2,256,124 43%

BEErevenues 183,624 1.40% 49,065 0.48% 134,559 274%

Professionalservicesrevenues 218,413 1.67% 172,707 1.70% 45,706 26%

Otherrevenues 467,524 3.57% 309,131 3.05% 158,393 51%

Totalrevenues 13,084,651 100.00% 10,136,335 100.00% 2,948,316 29%

COGS 7,358,342 56.24% 5,354,882 52.83% 2,003,460 37%

Grossprofit 5,726,309 43.76% 4,781,453 47.17% 944,855 20%

S&Mcosts 1,542,898 11.79% 1,385,615 13.67% 157,283 11%

R&Dcosts 454,058 3.47% 181,194 1.79% 272,864 151%

-CapitalisedR&Dpayrollcost (444,063) -3.39% (645,525) -6.37% 201,461 -31%

-R&Dcosts 898,121 6.86% 826,719 8.16% 71,402 9%

Generalcosts 2,531,451 19.35% 2,106,108 20.78% 425,343 20%

Totalcosts 4,528,406 34.61% 3,672,917 36.24% 855,490 23%

EBITDA 1,197,902 9.16% 1,108,536 10.94% 89,366 8%

Amortisation,depreciationandprovisions 711,990 5.44% 574,419 5.67% 137,571 24%

EBIT 485,913 3.71% 534,118 5.27% (48,205) -9%

Financialoperations (42,928) -0.33% (27,258) -0.27% (15,670) 57%

EBT 442,985 3.39% 506,860 5.00% (63,875) -13%

Incometax 313,487 2.40% 226,807 2.24% 86,680 38%

Prepaidtax (44,279) -0.34% 147,530 1.46% (191,809) -130%

Deferredtax 16,046 0.12% (1,996) -0.02% 18,042 -904%

Periodprofit/(loss) 157,731 1.21% 134,519 1.33% 23,212 17%ThefollowingtableshowingsomeGroupprofitabilityindexes,comparedwiththesameindexesrelatingtothepreviousHY,providesabetterillustrationoftheincomesituation.

30/06/2017 30/06/2016NetROE(Netresult/Netcapital) 0.02 0.02GrossROE(EBT/Netcapital) 0.06 0.07ROI(EBITDA/Netcapital) 0.05 0.05ROS(EBITDA/Incomefromsales) 0.09 0.11

Consolidatedincomeindexesaresubstantiallyalignedwiththevaluesofthepreviousperiod.AslightdecreaseinROSisdueto thedecrease in themarginsof theSMSsegmentdueto thetipical temporary fluctuationsof thismarket,whichisexpectedtoberecoveredinthesecondhalfoftheyear,whilemaintainingtheexcellentresultsintermsofgrowthinthevolumesachieved.


MainequityfiguresoftheMailUpGroupTheGroup’s reclassified balance sheet, as comparedwith that of the previous financial statements year-end, is asfollows(figuresareexpressedinEuro):

Description 30/06/2017 31/12/2016 Delta Delta%

Intangiblefixedassets 3,780,003 3,835,490 (55,487) -1%

Consolidationdifferences 9,829,834 10,308,159 (478,324) -5%

Tangiblefixedassets 930,269 709,130 221,140 31%

Financialfixedassets 189,083 171,653 17,430 10%

Fixedassets 14,729,189 15,024,431 (295,242) -2%

Tradereceivables 2,964,111 3,396,264 (432,153) -13%

Tradepayables (3,820,831) (2,947,547) (873,283) 30%

Commercialworkingcapital (856,720) 448,717 (1,305,436) -291%

Taxreceivablesandpayables 394,382 416,106 (21,725) -5%

Accrualsanddeferrals (5,513,426) (5,120,696) (392,729) 8%

Otherreceivablesandpayables (2,092,830) (3,679,200) 1,586,370 -43%

Networkingcapital (8,068,593) (7,935,073) (133,520) 2%

Provisionsforrisksandcharges (71,072) (57,739) (13,333) 23%

Stafffunds (978,994) (933,526) (45,468) 5%

Deferredtaxliabilities (18,796) (31,287) 12,492 -40%

Netinvestedcapital 5,591,734 6,066,806 (475,072) -8%

Sharecapital 286,391 283,266 3,125 1%

Reserves 7,052,258 5,896,510 1,155,748 20%

Periodprofit/(loss) 130,831 780,519 (649,688) -83%

Shareholders’equityofminorityinterests 85,893 59,959 25,935 43%

Shareholders’equity 7,555,373 7,020,253 535,120 8%

Short-termpayables/(cash) (4,559,524) (3,199,592) (1,359,932) 43%

Medium/long-termpayables 2,595,885 2,246,145 349,740 16%

Netfinancialposition (1,963,639) (953,447) (1,010,192) 106%

Totalsources 5,591,734 6,066,806 (475,072) -8%In order to provide a better descriptionof theGroup’s equity solidity, the table below shows a fewbalance sheetindexesrelatingtoboth(i) themethodof financingmedium/long-termcommitmentsand(ii) thebreakdownofthesourcesoffinance,comparedwiththesamebalancesheetindicatorsforthepreviousyear.

30/06/2017 30/06/2016Primarystructuremargin(Ownfunds-Fixedassets) (7,921,347) (8,897,379)Primarystructureratio(Ownfunds/Fixedassets) 0.49 0.44Secondarystructuremargin((Ownfunds+Consolidatedliabilities)-Fixedassets) (4,256,600) (5,528,681)Secondarystructureratio((Ownfunds+Consolidatedliabilities)/Fixedassets) 0.72 0.65


Therehasalsobeenanimprovementinthecoverageofinvestmentsfromequity,abletooffsetmoreeffectivelythantherecentpast,thesignificantfinancialeffortassociatedwithgrowthbyexternallines.Thetargeteduseofmedium-term bank debt, favoured by the favourable economic situation of deposit rates and the creditworthiness widelygrantedby thebanking system to theGroup,has allowed increasing the shareof theaforementioned investmentsfinancedfromsourcesofequaltimehorizon,resultinginpositiveeffectonstructureratios.MainfinancialfiguresfortheMailUpGroupTheconsolidatednetfinancialpositionasat30/06/2017wasasfollows(inEuro):NETFINANCIALPOSITION 30/06/2017 31/12/2016 var var%

A.Cash (6,240,975) (4,461,219) (1,779,757) 40%B.Othercashequivalents - - - C.Securitiesheldfortrading - - - D.Liquidity(A)+(B)+(C) (6,240,975) (4,461,219) (1,779,757) 40%E.Currentfinancialreceivables - - F.Currentbankpayables 38,006 23,762 14,243 60%G.Currentportionofnon-currentdebt 1,635,061 1,221,115 413,945 34%H.Othercurrentfinancepayables 8,385 16,750 (8,365) -50%I.Currentfinancialdebt(F)+(G)+(H) 1,681,451 1,261,627 419,824 33%J.Netcurrentfinancialdebt(I)+(E)+(D) (4,559,524) (3,199,592) (1,359,932) 43%K.Non-currentbankpayables 2,595,885 2,246,145 349,740 16%L.Bondsissued - - -

M.Othernon-currentpayables - - - N.Non-currentfinancialdebt(K)+(L)+(M) 2,595,885 2,246,145 349,740 16%O.Netfinancialdebt(J)+(N) (1,963,639) (953,447) (1,010,192) 106%

RecommendationCESR54/B2005

The following table showing some balance sheet indicators, compared with the same indicators relating to thepreviousyear,providesabetterillustrationoftheconsolidatedfinancialposition.

30/06/2017 30/06/2016Primaryliquidity(Immediateanddeferredliq./Currentliabilities)

0.66 0.61

Secondaryliquidity(Currentassets/Currentliabilities)

0.69 0.63

Debt(Netdebt/Shareholders’equity) -0.26 -0.13Fixedassethedgingrate(Owncapital+Consolidatedliabilities)/Fixedassets

0.76 0.64

Thesignificant improvement intheNFP isclearlyreflected inthedebt index,substantiallydoubledcomparedto31December 2016. All liquidity indicators show signs of greater balance in the time structure of financing of currentassets. The allocation is seen of part of the sources of finance deriving from the core business in support ofacquisitionsofsubsidiaries,flankedinafocussedmannerbyrecoursetofinancialleveragebymeansofbankdebt.Asinthepast,theGroupdoesnotuseexternaldebttofinancethecorebusiness.InformationpertainingtotheenvironmentandworkforceConsideringthesocialroleplayedbythebusiness,webelieveitappropriatetoprovidethefollowinginformationontheenvironmentandstaff.WorkforceDuringtheyear,no incidentstookplacenorany injuriesatwork involvingstaffonthepayrollnor indeedwereanychargesrecordedwithregardstooccupationaldiseasesonemployeesorformeremployeesandmobbingcases.Asat30June2017,theGroup’sworkforcenumbers137employees,ofwhom4managers,6middlemanagers,126white-collarworkersand1labourer.Asat31December2016,theGroup’sworkforcenumbered142employees,ofwhom2managers,7middlemanagers,


132white-collarworkersand1labourer.AttheendoftheHY,theMailUpworkforcetotalled103employees,ofwhom2executives,5middlemanagersand96white-collar workers. As a result of the merger by incorporation of the subsidiary Network, already mentionedherewith, the MailUp workforce increased significantly and is equal to the sum of the employees of the twocompaniespre-merger.The Group has always been committed to safeguarding relations with employees; at present, there are noemploymentlawdisputesinprogress.EnvironmentPleasenotethatthetypeofbusinesscarriedoutbythecompanydoesnotentailrisksnoranyonsetofsituationsthatmaydamagetheenvironment.InvestmentsIntheHY,consolidatedinvestmentsweremadeinthefollowingareas:

Fixedassets PeriodacquisitionsPlatformdevelopmentcosts 503,753Third-partysoftwareandtrademarksITinfrastructure,electronicofficemachinesandsystemsOfficefurnitureandfurnishings

10,710251,150115,196

ofwhichinvestmentspertainingtotheparentcompanyalone,asspecifiedbelow:

Fixedassets PeriodacquisitionsPlatformdevelopmentcosts 512,939Third-partysoftwareandtrademarksITinfrastructure,electronicofficemachinesandsystemsOfficefurnitureandfurnishings

10,710243,551115,196

Giventhenatureof itsbusiness,the investmentsmadebyMailUparehistoricallyconcentratedon intangibleassetsand, inparticular,on the incrementaldevelopmentof theproprietarydigitalmarketingplatform,ofwhich, forHY12017,specificdetailsaregiveninthenextparagraph.The material investments of MailUp, mainly represented by servers, electronic equipment and furnishings, moreconsistentthantherecentpast,relatetothecostsofsettingupnewofficesinCremonaatthenew“DigitalInnovationCenter”,asfromJuly,newoperationalandadministrativeofficeoftheparentcompany.ResearchanddevelopmentIn accordance with Civil Code, Art. 2428, paragraph 2, number 1, it is specified that in the HY, MailUp entereddevelopmentcostsintheamountofEuro512,939.Asat30June2017,netofamortisation/depreciation,thesewereEuro 3,475,214. Theparent companymainly pursues the incremental developmentof theMailUpplatform for themanagement and professional sending of marketing campaigns (emails, text messages, Social) in Software-As-A-Service mode. The costs incurred for this development were capitalised by virtue of the future economic use,certifyingthepotentialeconomicandfinancialrecoveryoftheinvestment.WithintheGroup,MailUpalonecarriesoutresearchanddevelopment.ItisalsonotedthatBEEsoftwaredevelopmentcostsamountedtoU$D162,000inHY12017.TheBEEeditor,originallydevelopedbyMailUp,wastransferredattheendof2016,initstwocurrentversions,BEEPluginandBEEPro,totheAmerican subsidiary MailUp Inc, which deals exclusively with its commercialization. This development activity,contracted by the subsidiary to the parent company under specific contractual arrangements, was finalized by adedicatedteamofprogrammersofMailUp.Here isa summaryof thenewfeaturesand improvements tooursoftware released in the first sixmonthsof2017connectedtoourResearch&Developmentactivities.MailUpPlatform:


• inFebruaryof2017theR&DteamreleasedMailUp9,acompleteredesignoftheMailUpservicethathadbeeninthemaking for severalmonthsandwas the resultofextensiveuser research.MailUp9didn’t just introduceanentirelynewuser interface,butalsobrought to lifeanarrayofnewfeaturesaimedatmaking the jobofdigitalmarketerseasierandmoreeffective.Virtuallyeveryelementoftheplatformwasredesignedtooptimizetheuserexperience,fromthenavigationtothedashboardthatwelcomesauserwhentheylogin,evenwhentheyuseasmartphone.Abrand-newcollaborationtoolwasaddedtomakeiteasyandfastforteamstoreviewandapprovea campaignbefore it’s sent.Message statisticswerealso redesigned,both for theemail and theSMSchannels.Substantial workwas done “under the hood”, providing better scalability and performance. All in all, 850 newfeaturesandimprovementswereintroducedwithMailUp9,oneofthelargestreleasesinMailUphistory.

• inAprilanadditional functionalitywas released tohelpmarketerscreateandschedule their campaigns.Amongthem,afeaturethatprovidesacalendarviewofupcomingmailings,afaster“Linkcheck”tooltoensurethatanemailmessages does not contain broken or blacklisted links, additional improvements to campaign statistics, anewmessageimporttoolthatsupportsZIPfiles,andanewintegrationcatalogthatimprovesthewayconnectorswithotherapplicationsareshowntoMailUpusers,sothattheyareeasiertotakeadvantageof;

• in the June release, MailUp developers focused on marketing automation and message personalization. Newmessage level and workflow-level statistics were added to automation workflows, making it much easier forMailUpusers to dig into theperformanceof an automated campaign so that it canbe further optimized.Withregardtopersonalization,acompletelynewsetoffeatureswasaddedtoourproprietarycampaignsendingengineso that external, recipient-specific data (e.g. product recommendations) can be dynamically retrieved from anexternalsourceandmergedintoamessageatthetimethemessageissent,usingthepopularLiquidsyntax;

• throughout the first 6months of 2017 substantial improvementswere alsomade to theMailUpAPIs, both foremailandSMSmessaging.AmongthenewandimprovedAPIs:verifyasender,sendtomultiplegroups,managelists,checkSMScreditbalance, improvementstoemail&phonenumber import,andmore.Wealso launchedanewsletterdedicatedtothemanydevelopersthatusetheMailUpAPIs: it isnowregularlysenttoaround1,500developersaroundtheworld.

BEEEditor:• BEE,ourdrag-and-dropeditorforemailandlandingpages,isseeingfastadoptionbothasatoolthatisembedded

intoothersoftwareapplications(BEEPlugin)andasahostedemaildesignsuiteforfreelancers,marketingteams,andagencies(BEEPro).Therefore,manyimprovementswereintroducedforbothproductlineasfollows:

• forBEEPro,we introducedanew“Team”edition,whichallowsdesigners toorganizemessages inprojectsandcollaborateonthemforreviewandapproval.Manynewprofessionally-designedemailtemplateswerealsoaddedtothesystem,togetherwithadditionalsettingsandUIimprovements;

• forBEEPlugin,welaunchedanewversionoftheenginethattranslatesthefilecreatedbytheeditorintoHTML,substantially reducing theHTML footprint forbetterperformanceandemail clientcompatibility.Wealsoaddedsupport for dynamic images, enabling marketers to use images that are loaded dynamically at the time themessage isopenedorthepage isrendered.Thisallowsfortheuseofpersonalized images,dynamiccountdowntimers,andmore;

• notethatBEEProistechnicallya“client”ofBEEPlugin.Thatis:itisinitselfasoftwareapplicationthat“embeds”theBEEeditor.SoimprovementstoBEEPluginalsobenefitBEEPro.Likewise,theMailUpplatformisalsoamajor“client” of BEE Plugin (i.e. the BEE editor is embedded in the MailUp system), itself benefiting from allimprovementsmadetotheeditor.Additionally,MailUp’slargeuserbasegeneratescontinuousproductfeedbackthat leads to further enhancements to the editor. This is worth mentioning because it’s fueling an extremelybeneficial feedback loop between the two business units, with the MailUp platform pushing for and thenbenefitingfromcontinuousproductinnovationintheBEEproject.

Again under the scope of research and development, a significant amount of the work carried out regarded thedevelopmentofthe“InnovativeBigDataAnalyticsSystem”project.ItisaprojectwithamajorimpactonthefuturebusinessofMailUpinthemediumtolongterm,havingamarketpotentialalsoatinternationallevel,inparticularin


theEnglish-speakingworld,whereBigDataAnalyticstoolsareusedtodayonlyby largemultinationalplayersofthesector,dueto thecomplexityof the technologiesandhighspecializationof resources thatneedtobeput inplace.MailUp will receive from Lombardy Region up to a maximum of Euro 860,122 non-repayable in 24 months withrespecttoatotalinvestmentofEuro2,045,648intheperiod.Thefundingwillcovercostsforpersonnel,training,toolsandequipmentandconsultancy servicesneeded for the realizationof the investments,whichwillbe implementedoverthe2yearsofdurationoftheprojectthatwillgoonuntilFebruary2018.Transactionswithsubsidiaries,associates,parentsandotherrelatedcompaniesIn the HY, transactions were implemented with subsidiaries included in the Group scope and with other relatedparties, as part of the Group’s core business. Interventions all aimed to promote the development in a synergiccontextthatenablespositiveintegrationsintheGroupenvironment.Noatypicalorunusualoperationswerecarriedout with respect to normal business management. Operations essentially regard the exchange of assets, theprovisionsofservices,thesupplyanduseoffinancialmeans.Saidrelationscomeunderthescopeofordinarybusinessmanagement and are stipulated at arm’s length, or at the conditions that would have been established betweenindependentparties.

Company FixedreceivablesTrade

receivables TradepayablesOther

receivablesOtherpayablesDividends Sales Purchases

MailUpIncMailUpNordicsGlobaseInternationalApsAgileTelecomSpA

131,441202,448

285,241

90,839.8758,555

71,394

686,600

881,934

814,372

881,934

158,927

88,348130,167

66,728-

764,623Subsidiaries 333,888 434,637 757,994 881,934 814,372 881,934 377,442 831,350ConsorzioCRITScarl 14,641 8,450 Associates 14,641 8,450 - - - - - -GrafoVenturesdiGiandomenicoSicaFloorSrlZoidbergSrl

10,631

1,900,000

70,47112,228

Otherrelatedcompanies - - 10,631 - 1,900,000 - - 82,699

Withregardstothetableabove,pleasenotethatotherpayablesduetoAgileTelecom(Euro814,372vstheoriginalEuro1,206,512)are representedby the residualassumptionofdebtby thesellerwith regards toAgile,which tookplacewhenthecontrollingsharewasacquiredbytheparentcompany.ThepayabletoZoidbergforEuro1,900,000represents,forEuro1,400,000,thesecondandthirdtrancheoftheearn-outdefinedbytheparties,whichwillbepaidon 30 June 2018 and 2019, to the seller of Agile Telecom,while for the remaining Euro 500,000, itwas a securitydepositprovidedbythevendorsin lieuofthesuretyguaranteeprovidedfor inthepurchaseandsalecontract.ThissecuritywasrepaidtoZoidbergon18July2017followingthepresentationofasuitablebanksuretyofequalamountinfavourofMailUp.Inadditiontothe2016loangrantedbyDanishsubsidiaryMailUpNordicstoits100%subsidiaryGlobaseInternationalApSforEuro203,693,on26June,MailUpgrantedaloan,alsointerestbearing,tothesameNordicsforEuro202,448,whichsubsequentlytransferredthisfacilitytoGlobasetosupportitsoperations.Treasurystockandshares/holdingsinparentcompaniesMailUpowns52,260treasurysharesforatotalofEuro115,219,purchasedinpartin2015,atapriceofEuro57,502,in2016,atapriceofEuro54,964and in January2017, forEuro2,753,corresponding to1,560pieces.Theaveragepurchasepricewas globally equal to Euro2.20per share,while in the current year, this valuewas Euro1,765pershare.Acquisitionsin2017wererealizedaspartoftheprogramauthorisedbytheShareholders’Meetingon28April2016,whichhadauthorisedpurchasesanddisposalsofownsharesasfromthesamedateofthemeetingandfor18monthsofthatdate,inanamountthatcanbefreelydecidedbytheBoard,uptoamaximumnumberofsharesthatshallnotexceed10%ofthesharecapital.Thepurchasepriceofeachsharehadtobenolessandnomorethan15%ofthe reference price recorded by the share during the stock market session of the day prior to each individualtransaction.TheShareholders’Meetingof26April2017thenresolvedtheauthorizationtopurchaseandselltreasurysharesandinparticularthefollowing:• to revoke theprevious resolutionof theauthorization topurchaseand sell treasury sharesof 28April 2016witheffectfromthedateofthesameShareholders’Meeting;toauthorizetheAdministrativeBodytopurchaseandselltreasurysharesto:(i)useitstreasurysharesasinvestmentforefficientuseofliquidity;


(ii)purchasetreasurysharesfromthebeneficiariesofanystockoptionplansapprovedorhoweverimplementnewplansor in any caseproceedwith freeassignments to shareholdersor fulfil obligationsderiving fromwarrants,convertible financial instruments, with mandatory or conversion or exchangeable with shares (based ontransactionsinprogressortobeapproved/implemented);(iii)allowtheuseoftreasurysharesintransactionsrelatedtooperationsorprojectsconsistentwiththecompany’sstrategiclinesalsothroughequityexchanges,withthemainobjectiveoffinalizingcorporateintegrationoperationswithpotentialstrategicpartners;aswellas(iv) to intervene, in accordance with current regulations, also through intermediaries, to contain anomalouschangesinlistingsandtoregularizethetrendoftradingandprices;

• todeterminethearrangementsforthepurchaseandsaleofsharesforaperiodof18monthsfromthedateoftheresolution,uptoamaximumamountoftreasurysharesthetotalofwhich,alsotakingintoaccountthesharesheldbythecompanyanditssubsidiariesintheportfoliofromtimetotime,doesnotexceedthe10%limitofthesharecapital.

Todate,thelatterresolutionhasnotyetbeensubjecttopracticalimplementation.DisclosurerelativetorisksanduncertaintiespursuanttoArt.2428,subsection2,point6-bisoftheCivilCodeRiskanalysisAspartof itsbusiness, theGroup isexposed to risksanduncertainties,deriving fromexogenous factorsconnectedwiththegeneralmacroeconomiccontextorthespecificcontexttotheoperatingsegmentsinwhichitgoesaboutitsbusiness,aswellastorisksderivingfromstrategicchoicesorinternaloperatingrisks.The identificationandmitigationof such riskshasbeen carriedout systematically, allowing for themonitoringandtimelyoverseeingoftherisklevelsdetected.Under the scope of the business risks, themain risks identified, monitored andmanaged by the company are asfollows:-riskconnectedwiththegeneraleconomictrend;-market-relatedrisks;-risksconnectedwithfinancialoperations.RiskconnectedwiththegeneraleconomictrendTheeconomic-financialpositionofthecompaniesbelongingtotheGroup,isinfluencedbyallfactorscomprisingtheItalianand internationalmacroeconomiccontext. Inthereferenceperiod,althoughthere isagrowthperiodfortheItalianeconomyandtheEurozone,therearestillgeneraleconomicuncertaintiesandregarding internationalpolicy,theeffectsofwhichareunpredictableandcannotbeeasilymeasured.Thecurrentpositivephaseisfollowingalongperiodofrecessionthathasresultedinasignificantdeteriorationoftheeconomy.InItaly,likeinotherEUcountries,widespread austeritymeasures have been adopted,which have negatively influenced consumer trust, their buyingpowerandspendingcapacity.TheMailUpGrouphasbeenabletogrowandachieveimportantobjectives.However,thepossiblere-emergenceofthenationalandinternationalcrisisandtheunpredictableeffectsofthesame,canstillhavenegativeeffectsontheGroup’sbusiness.Marketrisks

ThesectorsinwhichMailUpandtheGroupoperatearecharacterisedbyrapidtechnologicaldevelopmentandsufferthe competitive pressure deriving from the past pace of development of technology. The Group and company’ssuccess depends, amongst other aspects, on the capacity to innovate and strengthen its technologies, in order torespond to the technological progress in the sector in which it operates. The Groupmay consequently find itselfhaving to cope with a more acute competition by virtue of the emerging technologies and services that may beintroducedorimplementedinthefuture.Thenewtechnologies,infact,maylimitorreducethecompany’sbusinessand/orencouragethedevelopmentandgrowthofnewoperators.Inparticular,theSMSsystemmaybesurpassedbyother network-based systems (such asMessenger,WhatsApp,WeChat, Push Notifications), with the consequencethattheGroupmaynotbeabletosuccessfullyand/orquicklymanageanytransitiontotheuseofthesetechnologicalplatforms,althoughR&DactivitiesarealreadyunderwayinordertoallowMailUptobeintegratedwithsuchsystems.

IfthesolutionsofferedbytheGroupshouldbeunabletosatisfytheneedsofclientsand/orrespondtotechnologicalprogress,improvementswillneedtobemadequicklytoitstechnologyplatformandabilitytodevelopandintroducenew services, new applications and new solutions on the market quickly and at competitive prices. The Group’sincapacity to improve, develop, introduce and supply services quickly that are able to satisfy market demands,includingintechnologicalterms,mayhaveanegativeimpactonoperatingresultsormaymaketheservicesofferedby


theGroupobsolete.Inordertomaintainitscompetitivenessonthemarket,theGroupwillthereforeneedtoinvestinresearchanddevelopment,withahighcapacitytoadjusttocontinuerespondingtotherapidtechnologicalchangesandconstantlydevelopthecharacteristicsofitsservicessoastorespondtothechangingmarketdemands.

If theGroup should be unable to adjust promptly to the technological evolution and/or the introduction of a newtechnology,negativeeffectsmaybeseenontheconsolidatedeconomic,equityandfinancialposition.RisksconnectedwithfinancialoperationsCreditriskThecreditrisk isdeterminedbytheexposuretopotential lossesderivingfromfailurebycounterpartiestofulfil theobligations they have assumed. Credit management is entrusted to the finance and administration department,which,onthebasisofformalisedassessmentandappointmentproceduresofcommercialpartners,seekstominimisetherisk.Followingtheeconomy’sdifficulties,stricterprocedureshavebeenadoptedtoquantifyandcontrolclientrisklevels. In order to reduce the risk of insolvency deriving from trade receivables, a series of measures has beenintroduced aiming to encourage the use of electronic payment systems (credit cards, PayPal) by customers, forexample strengtheningand innovating thee-commerce sale system.This choice resulted in theconstantgrowthofcollectionsmadebyelectronicpaymentsystems,improvingthequalityoftradereceivablesandreducingtheimpactofthecostsofdebtcollection.ItmustbeconsideredthatthefinancialassetsoftheGrouphaveagoodcreditstanding.LiquidityriskTheliquidityriskconsistsoftheimpossibilityofrespectingpaymentcommitmentsduetodifficultiesinobtainingfundsor liquidating assetson themarket. The consequence is a negative impacton theeconomic results if theGroup isforcedtoincuradditionalcoststofulfilitscommitmentsor,asanextremeconsequence,asituationofinsolvencythatrisks the company as a going concern. At present, also thanks to its listing on the AIMmarket and the excellentrelations with the banking system, the MailUp Group enjoys a good level of liquidity and reduced debt, aimedexclusivelyatgrowthbyexternallines,implementedthroughacquisitionsandthefinancingofinvestmentsinresearchanddevelopment.In order to optimise the management of financial resources, reducing the liquidity risk, the Group has adoptedprocessesforthesystematicmonitoringofprospectiveliquidityconditions,inconnectionwiththebusinessplanningprocess. The foreseeable cash flow for FY 2017 includes, in addition to the dynamics of working capital andinvestments,alsotheeffectsofthematurityofcurrentliabilities.TheGroupexpectstocopewithitsfinancialneedsthroughtheflowsderivingfromoperationsandcashonhand.Consideringthepositivetrendofsalesvolumes,whichis expected to bemaintained in the forthcoming years, it is expected that in FY 2017, financial resources can begenerated that, together with current funds, will be able to guarantee suitable support for the ordinary andextraordinaryinvestmentsplannedtoo.Itisconsideredthattheliquidityriskisnotsignificant.WithreferencetotherequirementslaiddownbyArt.2428,paragraph3,point6-bisoftheCivilCodeinconnectionwiththecompany’suseof financial instruments, it isspecifiedthatnocontractshavebeenstipulated inrelationtofinancialinstruments.

InterestrateriskTheparentcompanyhasprudentlyresorted,fromtheendof2015,tothefinancialleveragethroughthemediumandlong-termbankingchannel,alsowithrespecttothefavourabletrendofdebtcosts,tosupportextraordinarygrowthoperations by external lines and investments related to software development activities. As at 30/06/2017,consolidatedbankdebtisEuro4,277,336,ofwhichEuro1,681,451intheshort-term,ascomparedwithliquidfundsofEuro6,240,975.Theunderlyingloancontractsenvisagetermsandconditionsthatareinlinewithmarketpractice.Theloansareconnectedwiththeriskofinterestratechanges,astheyarenegotiatedatvariablerates.Itcannotbeexcluded that growth of interest rates may result in an increase in related financial expenses with consequentnegativeeffectsonthecompany’seconomic-financialposition.

ExchangerateriskThere are trade receivables and payables held in foreign currencies by MailUp, for limited amounts, mainly withregardstoforeignsubsidiaries,aswellasmarginalamountsfortradepayablesinforeigncurrencieswiththird-partysuppliersandcustomers.ThecompaniesrelatingtothesubsidiaryMailUpNordics,inparticularGlobase,operateontheDanishandNorthernEuropeanmarketand theconsolidatedassetsand liabilitieson these financial statementsare originally held inDanish Krone. Also forMailUp Inc, the consolidated financial statements are denominated inforeigncurrency,particularlyinUSDollars.TheDanishKrone/Euroexchangerateisextremelystableandhistorically


oscillatesonlyminimally.Exposuretorisksconnectedwithexchangeratefluctuationisthereforeverylimited.Underthisscope,wealsonotethepresenceofafinancialreceivableheldinUSdollarsduetoMailUpInc.,intheamountofEuro131,441asat30/06/2017,fora loandisbursedbytheparentcompanyinaccordancewithspecificcontractualprovisions.Asalreadynotedearlier,MailUpNordics isalsobenefiting froma loangrantedby theparent company,denominated inDKKandequal to Euro202,448 at thedateof theseHY financial statements. For completenessofinformation, it is recalled that intra-group receivables and payables, also in foreign currency, are not visible in theconsolidated financial statements as they are subject to accounting elimination, but only in the pre-consolidationseparate financial statements.Theconsolidated financial statementsmayalso reportanyeconomiceffectsderivingfromtheirconversiontothecurrencyofpreparationoftheconsolidatedfinancialstatements.Riskofrecovery/impairmentassetsTheriskofrecoveringthevalueoftheassetsheldbytheGrouptakesconcreteforminconnectionwiththeeconomicperformanceofthecompaniesconsolidatedandthecapacitytoproducesufficientcashflowtoguaranteerecoveryoftheinvestmentvalue.This risk ismonitoredby themanagement throughtheregularverificationofeconomicresults, includingunder thescopeofspecificvaluationprocedures,suchas,forexample,bycarryingoutimpairmenttestsatleastonceayear.SignificanteventsafterHYendThecommitmentofMailUptofightingspamandphishinghasbeenstrengthened.Theemailecosystemisconstantlythreatened by sending unauthorized messages, whether they are unwanted promotional emails or more elaborateactual fraudulent attempts, such as phishing. With nearly 2 billion messages sent per month from clients and torecipientsaroundtheworld,MailUp isat the forefront incombatingbadpracticesand improving theworldofemailmarketing. MailUp has always invested in the development and improvement of Machine Learning proprietaryalgorithmsandpredictivemodelsto identifythosewhodonotrespecttherulesofexcellenceand in2017,hasmorethandoubled the specific investmentover theprevious year. It is very important that all theplayers involved in theemailsendingandreceivingprocessareresponsibleanddotheirutmosttomaintainusers’confidenceinthetool.Forthisreason,MailUpisamemberofseveralorganizationsandworkgroupsfocusedondefiningandrespectingthebestpracticesforsendingemailcommunications(andnotonly),including:M3AAWG(Messaging,MalwareandMobileAnti-AbuseWorking Group), APWG (Anti PhishingWorking Group), ESPC (Email Service Provider Coalition), Signal-Spam(France)andCSA(CertifiedSendersAlliance).Thankstothesepartnerships,MailUpoffersthecommunitytheresultsofitsresearchandinvestment,comparingitselfonalike-for-likebasiswithindustrygloballeaders,fromESP(emailserviceproviders),toISP(suchasGmail,Outlook,Yahoo!)andactivelycollaboratingwiththemtoeffectivelyaddressthefightagainstallformsofabuserelatedtoemailand,moregenerally,allelectronicmessagingactivities.On25July2017,theBoardofDirectorsofMailUpresolvedtogivepartialexecutiontothedelegationunderArt.2443CivilCode,conferredbytheExtraordinaryShareholders’Meetingof23December2015,byincreasingthesharecapital,paid and indivisible, for a maximum amount of Euro 6,264,000 (including premium), by issuing a maximum of2,610,000 ordinary shares with no indication of nominal value expressed. Newly-issued shares were offered forsubscriptionunderprivateplacement throughanacceleratedbookbuildingprocedureand theywere issuedwith theexclusion of the option right under art. 2441, paragraph 5, Civil Code, as to be reserved exclusively to “qualifiedinvestors”and“institutional investors”.The transactionaims tohelp strengthen theequityand financial structureofMailUp-alsocontributingtotheexpansionofthestockmarketcapitalizationforfutureobjectivesofexpansionofthecompany - and to support the relatedgrowthanddevelopment, also throughexternal linesor throughmergersandacquisitions(fallingwithinthecompany’sbusinessplan),aswellastoincreasethefloatwiththeconsequentexpansionanddiversificationoftheequitybasefacilitatingtheexchangeofsecurities.On 26 July 2017 was the successful completion of the capital increase subscription implemented by means ofaccelerated bookbuilding procedure for 2,610,000 new ordinary shares with no indication of the nominal valueexpressed,correspondingtoapproximately23%ofthepre-moneysharecapital,foratotalofEuro6,003,000(includingpremium).Demandwas40%higherthantheamountoffered.Newly-issuedshareswereplacedatapricepershareofEuro2.30each.Thetransactionwasregulatedbymeansofdeliveryofsecuritiesandpaymentofthefee(“settlement”)on28July2017.Followingthefullsubscriptionofnewly-issuedshares,thesharecapitalofMailUpafterthe increasereachedEuro351,640.68,divided into14,065,267ordinaryshareswithno indicationofthenominalvalueexpressed,with a float of approximately 33%. In the context of the transaction, MailUp has undertaken 90-day lock-upcommitmentsinlinewithmarketpracticesforsimilartransactions,subjecttoissuesofsharereservedforstockoptionplansand/orstockgrants.FidentiisEquitiesS.V.,S.A.operatedasSoleBookrunneroftheacceleratedbookbuilding.


Outlook

TheGroup intends to continue todevelop itsbusiness and services throughaprofitable growthprocess already inplace,inordertosuccessfullygainstandingandreinforceitspositioninthereferencesector.Tothisend,inparticular,theaimistoproceedwiththefollowing:

• the incremental improvementof theMailUpplatform, inparticularwith the introductionofnew featuresandthe simplification of existing ones; in particular, the evolution will concern mobile marketing with theintroductionofnewchannels,improvedautomationfunctionalities,1:1customizationofmessagesanddynamiccontentmanagement;

• investmentsinmarketing&salesasnecessarytoincreasethecustomerbase,bothinItalyandabroad,throughinternationalmarketingcampaignsandbusinessdevelopmentinselectcontexts;

• the incremental improvement of the Acumbamail platform, with the introduction of new “autoresponder”featuresandthenewpremiumversion“AcumbamailPro”;

• theincrementalimprovementoftheAgileTelecomplatform,withtheintroductionofnewSMSpricecalculationautomationsystemsofthevarioussuppliersandthestipulationofnewinterconnectionagreements;

• theprogressivemigrationofGlobasecustomerstotheMailUp®platform;

• focussedbusinessdevelopmentaimed,amongstothers,atdevelopingnewcontactswithpartners(suppliersofSaaS cloud systems, software and digital services) and retailers (such as, for example, hosting andtelecommunicationsproviders),whichcanspeedupmarketpenetration;

• focussedinvestmentsonimprovingperformanceinordertoreducetherateofclientslostandimprovetheuseof its services, the on-boarding (i.e. service activation) process, the functions and integrations with externalsystems in order to improve the client conversion rate (intended as the ratio of potential clients and clientsacquired);

• theintroductionofnewservices,whichshouldallowforanincreaseinclientrevenues,despitethefactthatitisalreadydriventoupgradetheservicefollowingtheincreaseinthelistofaddresseesandconsequentincreaseofsendingtime.ThesealsoincludestrengtheningtheSMSservices;

• investmentsaimingtodevelopintegrationsbetweentheservicessuppliedandothere-commercesystems,CRMandCMS;

• acquisitionof systems, softwareand technologiesunder the scopeofmarketing technologieson cloud,whichenablea rapidexpansionof theserviceportfolioor theattackofmarketbrackets thathavethus farnotbeenoverlytargeted;

• corporateacquisitionsinforeigncountriesinordertospeeduptheentryintonewmarkets.

TheGroupdoesnot,moreover,excludepotentiallyincreasingitsmarketshareinthemedium-termbyexternallinesbyacquiringorcollaboratingonacommerciallevelwithothercompaniesoperatingonthereferencemarketorotherrelatedmarkets,assessingtherelevantvalueofsuchbothinstrategicandfinancialterms.

OrganisationandmanagementmodelsofLegislativeDecreeno.231/2001

In compliancewith said regulation of LegislativeDecree no. 231 of 8 June 2001 on the “Discipline of administrativeliabilityof legalpersons,companiesandassociationsalsowithout legalpersonality”-which introduced inoursystemtheadministrative responsibilityofentities (legalpersons, companiesandassociationsalsowithout legalpersonality)forcertaintypesofoffencecommittedintheinterestorbenefitoftheentitybypersonswhoarewiththeentityitselfin


particularmanagementrelationsorcollaboration-in2015,MailUpadopteditsownorganizationalmodelandcodeofethics thatmeet the requirements of the Decree. In 2016, this was followed by specific training of employees andimplementationofthemainoperationalprocedures,developedincollaborationwiththeappointedSupervisoryBody.

The constant regulatory amendments and company reorganizations that have affected the Group have, however,promptedMailUp to initiate in 2017 a review of its internal documents and procedures. In collaborationwithwell-established professionals, a complex audit and internal audit processwas initiated, whichwill be completed in HY12018.

Personaldataprocessing

In compliance with Legislative Decree no. 196 of 30 June 2003 (the “Privacy Code”), MailUp has always andstrategicallygiventheutmostattentiontotheproperapplicationofthePrivacyCode.Infact,theinternalprocedureson thesemattersareconstantly formalised,monitoredandupdated,as is specific trainingofpersonnel.TheGrouphas also for years been assisted by legal advisors of proven competence and experience, on both national andinternationallevel,onthesematters.Thepreventionandcontrastofpotentialabusesbycustomers(spam)isalsohighlyoverseen,thankstothepresenceofatechnicaldepartmentexclusivelydedicatedtothisfunction,asdemonstratedbytheparticipationofMailUp,asalreadymentioned, in several organizations and internationalworking groups at the forefront in combating unfairpracticesandengagedinthedisseminationofindustrybestpracticesalsoinregardingpersonaldataprocessing.The regulatory amendments introduced by the new EU 2016/679 Data Protection Regulation (the “Regulations”),whichwill enter into force in all European countries on 25May 2018 andwhichwill also extend to non-Europeanorganizations, have however pushed MailUp to start the activities necessary to make its infrastructure fully“compliant”with thenewregulations.Although theMailUpplatformhasalwaysoperated in theutmost respectofItalian and Europeanprivacy regulations,with provisions that are evenmore stringent than those of law, the newRegulationis,infact,astrategicfactorinsupportoftheinternationalgrowthpathundertakenstartingfromthelistingonthestockexchangeinJuly2014.As part of the adaptation processmentioned above, in accordancewith the provisions of the new European-levelregulation, theBoardofDirectorsapproving theHY financial statementswill propose theappointmentof theDataProtection Officer (DPO) for theMailUp Business Unit, having identified for this role AlbertoMiscia, Executive ofMailUp and Head of Deliverability and Compliance, with a proven knowledge of data protection legislation andpractices as well as the necessary expertise in technology and information technology, previously attributed thepowersofDataProtection.AsdemonstrationonceagainoftheGroup’sgreatinterestinthisarea,therewastherecentpublication,curatedbytheMailUpmarketingteamandbytheLawyerMarcoMaglio,expertandwell-establishedcollaboratorofMailUponDataProtection,DigitalWhitePaper“GDPRandPersonalData”,availableforfreeatwww.mailup.it,inadditiontotheorganizationof thewebinar, also free, on11October 2017, duringwhich the same LawyerMagliowill discuss themainaspectsofthisturningpointinpersonaldataprocessing.Wethankyouforyourconfidenceandwerequestthatyouapprovethefinancialstatementspresentedhere.

Milan,27September2017TheChairmanoftheBoardofDirectorsMatteoMonfredini


Groupconsolidatedfinancialstatementsasat30/06/2017 BalanceSheetNotes 30/06/2017 31/12/2016Non-currentassets Tangibleassets 1 930,269 709,130Intangibleassets 2 3,700,849 3,756,336Goodwill 3 9,908,988 10,387,313Equityinvestmentsinassociatesandjointventures 4 102,000 102,000Othernon-currentassets 5 87,083 69,653Prepaidtaxassets 6 747,531 785,139

Totalnon-currentassets 15,476,720 15,809,570 Currentassets Tradeandotherreceivables 7 2,964,111 3,396,264Othercurrentassets 8 1,607,164 1,742,954Liquidfundsandequivalent 9 6,240,975 4,461,219 Totalcurrentassets 10,812,251 9,600,437 Totalassets 26,288,971 25,410,007 Balancesheet-Liabilities 30/06/2017 31/12/2016 Groupshareholders’equity Sharecapital 10 286,391 283,266Reserves 11 7,052,258 5,896,510Periodresult 130,831 780,519Shareholders’equityofminorityinterests 12 85,893 59,959

Totalshareholders’equity 7,555,373 7,020,253 Non-currentliabilities Amountsduetobanksandotherlenders 13 2,595,885 2,246,145Othernon-currentliabilities - -Provisionsforrisksandcharges 14 71,072 57,739Stafffunds 15 978,994 933,526Deferredtaxliabilities 16 18,796 31,287

Totalnon-currentliabilities 3,664,747 3,268,697 Currentliabilities

Tradeandotherpayables 17 3,820,831 2,947,547Amountsduetobanksandotherlenders 18 1,681,451 1,261,627Othercurrentliabilities 19 9,566,569 10,911,883 Totalcurrentliabilities 15,068,851 15,121,057Totalliabilities 26,288,971 25,410,007


IncomeStatementNotes 30/06/2017 30/06/2016 Revenues 20 12,728,603 9,869,906Otherincome 21 356,049 266,428

Totalrevenues

13,084,652 10,136,334

Costsforservices 22 (8,616,902) (6,301,936)Payrollcosts 23 (3,504,275) (3,282,671)Capitalisationofpayrollcostsfordevelopmentactivities 24 444,063 645,525Otheroperatingexpenses 25 (209,637) (88,715)

EBITDA

1,197,902 1,108,536

Amortisation,depreciationandimpairment

26 (711,990) (574,419)

EBIT

485,912 534,118

Financialexpense 27 (58,892) (29,402)Financialincome 28 15,964 2,144Portionofresultpertainingtoassociatesandjointventures Impairmentofnon-currentassets

Pre-taxprofit

442,985 506,860

Incometax

29 (285,254) (372,341)

Netperiodresult

157,731 134,519ofwhichnetresultpertainingtominorities

26,900 9,015NetGroupresult

130,831 125,504 Otheritemsofthestatementofcomprehensiveincome Profit/(loss)thatwillnotbesubsequentlyreclassifiedtotheperiodresult

Actuarialprofit/(loss)netofthetaxeffect 15,119 (24,962)

Profit/(loss)thatwillbesubsequentlyreclassifiedtotheperiodresult

Profit/(loss)derivingfromtheconversionofthefinancialstatementsofconsolidatedcompaniescarriedincurrenciesotherthantheEuro

9,952 3,348

Comprehensiveperiodprofit/(loss) 182,802 112,906Periodprofittobeassignedto:

Shareholdersoftheparentcompany 155,902 103,891Minorityshareholders 26,900 9,015 Earningspershare:

basic 300.014 0.010diluted 300.013 0.010


Consolidated statement of changes in equity

FiguresinEuro 31/12/2016AllocationofMailUpresult

Sharecapitalincrease(*)

Changesrelatedtothemergerwiththesubsidiary

Network

Purchaseofownshares

ComprehensiveISresult

StockoptionplanOtherchangesrelatedtoIASstandards

FYresult 30/06/2017

Sharecapital 283,266 3,125 286,391Sharepremiumreserve 4,607,721 396,875 (90,000) 4,914,596Legalreserve 60,000 60,000Extraordinaryreserve 295,624 1,224,912 1,520,535Reservefortreasurystock (112,466) (2,753) (115,219)Reserveforexchangerategains 25,289 25,289Profit/(loss)carriedforward 1,473,972 780,519 (1,379,659) 874,831Stockoptionreserve 243,316 90,848 334,165OCIreserveandtranslation (106,628) 25,071 (81,557)FTAreserve (590,317) (23,132) (613,449)Mergersurplusreserve 133,068 133,068FYresult 780,519 (780,519) 130,831 130,831Shareholders’equity 6,960,294 1,224,912 400,000 109,936 (2,753) 25,071 90,848 (1,469,659) 130,831 7,469,480

(*)AsresolvedbytheBoardofDirectorson20/06/2017


Consolidated statement of cash flows

Description 30/06/2017 30/06/2016(restatedIAS)

Periodprofit/(loss) 157,731 134,519 Incometax 316,597 226,807Deferred/(prepaid)tax (31,344) 145,534 Interestexpense/(interestincome) 14,655 27,258 Exchange(gains)/losses 28,272

1Periodprofit/(loss)beforeincometax,interest,dividendsandcapitalgains/lossesondisposals

485,912 534,118

Valueadjustmentsfornon-monetaryelementsthathavenoequivalentiteminnetworkingcapital ProvisionsforTFR 144,374 157,571Otherprovisions 13,333 20,000Amortisationanddepreciationoffixedassets 697,647 569,102 Impairment Otheradjustmentsfornon-monetaryitems 25,071 (21,614)

2CashflowbeforechangesinNWC 1,366,337 1,259,177

Changestonetworkingcapital Decrease/(increase)intradereceivables 391,050 (67,037) Increase/(decrease)intradepayables 883,529 183,087Decrease/(increase)inaccruedincomeandprepaidexpenses (131,245) (64,484) Increase/(decrease)inaccruedliabilitiesanddeferredincome 523,975 510,683Otherchangesinnetworkingcapital (1,029,533) (614,647)

3CashflowafterchangesinNWC 2,004,111 1,206,779

Otheradjustments Interestcollected/(paid) (14,655) (27,258) (Incometaxpaid) (Capitalgains)/capitallossesderivingfromthedisposalofassets Dividendscollected (Useofprovisions) (98,906) (77,607)

4Cashflowafterotheradjustments 1,890,550 1,101,915

ACashflowfromoperations 1,890,550 1,101,915

Tangiblefixedassets (365,285) (192,824) (Investments) (365,285) (192,824)Divestmentrealisationprice Intangiblefixedassets (498,014) (923,546) (Investments) (498,014) (923,546)Divestmentrealisationprice Financialfixedassets (17,430) (120,636) (Investments) (17,430) (120,636)Divestmentrealisationprice

BCashflowfrominvestments (880,729) (1,237,006)

Minorityinterestfunds 769,564 1,716,226 Increase(decrease)inshort-termpayablestobanks 14,243 1,443Stipulationofloans 1,400,000 2,000,000Repaymentofloans (644,679) (285,217)

Ownfunds 372 (175,392)Sharecapitalincrease 3,125 -Sale(purchase)oftreasuryshares (2,753) (38,464)Otherchangesinequity - (136,928)

CCashflowfromloans 769,936 1,540,834

Increase(decrease)inliquidfunds(A±B±C) 1,779,757 1,405,743

Liquidfundsasat1January 4,461,219 3,265,717 Liquidfundsasat30June 6,240,975 4,671,460 1,779,757 1,405,743


Explanatorynotestotheconsolidatedfinancialstatementsasat30/06/2017

GeneralinformationThe MailUp Group (hereinafter the “Group” or “MailUp Group”) is an established business in the marketingtechnologysectoronthecloudorMarTech(newsletters/e-mails,textmessages,socialnetworks).ItleadsItalyintheESPsectorintermsofthenumberofe-mailssentandnumberofclients.TheparentcompanyMailUpSpA(hereinafter“MailUp”)wasadmittedtotradinginJuly2014ontheBorsaItalianaAIMItaliamarket.

AccountingstandardsCriteriaforthepreparationoftheGroupconsolidatedfinancialstatementsIn accordancewithArt. 4of LegislativeDecreeno. 38of 28 February2005,which regulates theexerciseofoptionsenvisagedbyArt.5ofRegulation(EC)no.1606/2002oftheEuropeanParliamentandCouncilof19July2002relativetotheapplicationofinternationalaccountingstandards,theparentcompanyhasexercisedthefacultytovoluntarilyadopt the international financial reporting standards (hereinafter also referred to as the “IFRS”), issued by theInternationalAccountingStandardsBoard(the“IASB”)andapprovedbytheEuropeanCommissionforthepreparationoftheconsolidatedfinancialstatementsandseparatefinancialstatementsoftheparentcompanystartingfromtheyearended31December2016.Theterm“IFRS”isusedtorefertotheInternationalFinancialReportingStandards,therevised international accounting standards (“IAS”), all interpretations of the International Financial ReportingInterpretationsCommittee(“IFRIC”),previouslyknownastheStandingInterpretationsCommittee(“SIC”).Thedateoftransitiontothe IFRS,asdefinedby IFRS1no.1“Firsttimeadoptionof IFRS”was1January2015,andthese2017consolidatedhalf-year financial statementspresentacomparison, for thebalancesheet,with thesamevalues as at 31December 2016,while for the income statement,with values corresponding to 30 June 2016, alsopreparedinaccordancewithIAS/IFRSstandards.ReferenceismadetoAppendix1,attheendofthesenotes,forthesummarytableofthe IAS/IFRSreclassificationsofthecomparisoncolumnoftheconsolidated incomestatement. Inthisrespect,itisspecifiedthattheIFRSaccountingstandardsappliedinthepreparationofthefinancialstatementsasat30June2017arethoseinforceatthatdate.Forthepurposeofpreparingtheaccountingschedules,prevalenceisgiventotheeconomicsubstanceoftransactionsratherthantotheirlegalform.With reference to IAS1, paragraphs25 and26, thedirectors confirm that, in viewof theeconomicprospects, thecapitalisationandfinancialpositionofthecompany,thereisnouncertaintyasthefactthattheGroupandMailUpcanoperateasagoingconcernandthat,consequently,inpreparingthefinancialstatementsasat30June2017,itshouldadoptaccountingstandardspreciselyundertheseterms.The consolidated financial statements closed as at 30/06/2017havebeen submitted to limited audit byBDO ItaliaSpA, under the appointment conferredupon it for theperiod 2017-2019, even if theGroup respects the cases forexonerationfromtheobligationtodrawupconsolidatedfinancialstatementspursuanttoArt.27ofLegislativeDecreeno.127/1991.Please note that despite it holds controlling investments in MailUp Inc., Agile Telecom SpA, Acumbamail SL and,MailUp Nordics A/S,MailUp is not required to prepare consolidated financial statements. However, as the parentcompanyofsubsidiaries,strictlylinkedintermsofthecreationofvaluewithintheGroupbusinessandinconnectionwith the AIM Italia issuers’ regulation,MailUp has prepared the consolidated annual financial statements alreadysince2014.ConsolidationstandardsappliedinpreparingtheconsolidatedfinancialstatementsThe consolidated financial statements have been prepared consolidating the financial statements of the parentcompany on a line-by-line basis, and those of all companies inwhich the company directly or indirectly holds themajorityofvotingrightsasat30June2017(line-by-lineconsolidation).Companies are defined as subsidiarieswhen the parent company has the power, directly or indirectly, tomanagethem so as to obtain benefits from the exercise of said activities. The financial statements of subsidiaries areconsolidatedasfromthedateonwhichtheGroupacquirescontrolofsuchanddeconsolidatedasfromthedateonwhichsaidcontroleases.Acquisitionofsubsidiariesisbookedaccordingtothepurchasemethod(purchaseaccount).Thecostofacquisitioncorrespondstothecurrentvalueoftheassetsacquired,sharesissuedorliabilitiesassumedasatthedateofacquisition.


TheequityinvestmentintheassociatethatisscarcelysignificantwithintheGrouphasbeenaccountedforusingtheequitymethod,ifthefinancialstatementsrelatedtothesamedateareavailable.In preparing these consolidated financial statements, the items of the assets and liabilities, aswell as income andexpensesofthebusinessesincludedintheconsolidationarea,havebeenstatedonaline-by-linebasis.Thefollowinghavethenbeeneliminated:• thebookvalueoftheinvestmentsheldbytheparentcompanyinsubsidiariesincludedintheconsolidation

areaandthecorrespondingportionsofthecompanies’equity;• intra-groupfinancialandtradereceivablesandpayables;• incomeandexpensesrelatingtotransactionsimplementedbetweenconsolidatedcompanies;• dividendsdistributedbetweenGroupcompanies;• intra-groupguarantees;• the surplusacquisition costwith respect to the current valueof the sharespertaining to theGroupof the

equityinvestments,isbookedamongsttheassetsasgoodwill.Anynegativegoodwillisbookedontheincomestatement;

• portions of shareholders’ equity and the period result pertaining tominority shareholders are highlightedseparately,respectivelyinaspecificitemoftheconsolidatedbalancesheetandincomestatement.

The tax effects deriving from the consolidation adjustments made to the financial statements of the companiesconsolidatedarebooked,wherenecessary,totheprovisionfordeferredtaxorprepaidtaxassets.Fullsubsidiariesconsolidatedonaline-by-linebasisThe line-by-line consolidation concerned the shareholdings of the companies listed below, for which the parentcompanydirectlyholdscontrol:

Companyname Cityorforeigncountry

Sharecapital(€)

Shareholders’

equity

Profit/(Loss)

%held Bookvalue

MAILUPINC UNITEDSTATESOFAMERICA

41,183* 304,472 (202,733) 100 499,514

ACUMBAMAILSL SPAIN 4,500 286,312 89,667 70 499,177MAILUPNORDICSA/S DENMARK 67,001* 1,020,579 (2,901) 100 800,000AGILETELECOMSpA CARPI(MO) 500,000 1,135,526 543,051 100 8,800,000Total 10,598,691

(*historicexchangerateappliedasatthedateoffirstconsolidation)MailUp Inc,established inSanFranciscoby theparentcompany inNovember2011, itoperateduntil31December2016,aimingtomarketandlocalisetheMailUp®platformintheUnitedStatesofAmericaand,moregenerally,ontheAmericancontinent. InDecember2016,theparentcompanyconferredthe intangibleassetsrelatingtotheproductBEEPluginandBEEPro.Thesubsidiarythereforeresolved,inserviceoftheconferralmadeduringFY2016,toincreaseitscapital reserves inaccordancewith local regulations.Since2017,MailUp InchasbeendealingwiththeexclusivecommercializationoftheBEEeditor,whichitowns,initsvariousversions,havingconsiderableinterestinthepublicofspecializedoperatorsasevidencedbythebrilliantmonth-on-monthgrowthrates.Acumbamail SL, a start-up founded in 2012with registered office in Ciudad Real, Spain, has developed an e-mailmarketingplatformthatiswidespreadontheSpanish-speakingmarkets(SpainandLATAM)andfeaturesconsiderabledevelopment potential, with a freemium sales model targeting a lower profile customer base, which thereforecomplementsMailUp,whichisinsteadincreasinglytakingapositiononthemedium/highbracketofthemarket.Thefreemiummodel, in fact, envisages an initial level of free use of the platform,which thereafter requires paymentwhere a certain threshold of use is surpassed, thereby favouring customers with limited volumes and a reducednumberofaddressees.MailUp Nordics A/S controls 100% of the capital of the company Globase International ApS, a Danish companyoperating in the e-mail marketing sector on the Scandinavian markets (Denmark, Norway, Sweden, Finland andIceland) with a focus on medium/large customers. The acquisition of the Danish companies aims to position theMailUp® platformon theNorthern Europeanmarket, exploiting the recognition of theGlobase trademark and thefavourablepositioningonamarketwithhighentrybarriersandahighlevelofspendingone-mailmarketing,bothbyofferingtheMailUp®platformtonewcustomersandbyprogressivelymigratingGlobaseplatformuserstoMailUp.


Agile Telecom SpA, with registered office in Carpi (MO), is an operator authorised by the Ministry of EconomicDevelopmentandCommunicationtoofferapubliccommunicationserviceandisalsoregisteredwiththeRegisterofOperatorsinCommunication(ROC)heldbytheItalianAuthorityforTelecommunicationsGuarantees(AGCOM).AgileTelecom has been operating since 1999 as an independent international operator specialised in SMS services,particularlyonthewholesaleSMSmarket.DozensofdirectconnectionswithcarriersandoperatorsacrosstheglobeallowAgileTelecomtooptimisedeliveryofmessages inall countries,guaranteeing itsbusinesscustomers thebestpossiblesendingqualityatthelowestpossibleprice.Itisalsotheparentcompany’sproviderofreferencefortheSMSdelivery services provided by the MailUp platform, thus making it possible to exploit profitable economic andtechnologicalsynergies.On 27 February 2017 was the completion of the path of organizational rethinking of theMailUp Group structurethroughthemergerby incorporationofNetworkSrl intoMailUp,undertakentooptimize intercompanyprocesses.TheanalysisoftheroleofNetwork,atechnologypartnerthathashistoricallyandexclusivelyhandledallthetechnicalfunctionsandtechnologyservicesrelatedtotheMailUpplatform,hasledtothemergerbyincorporationofthelatterdue to the simplification of the corporate and production structure of MailUp and of administrative processes,eliminatingduplicationandoverlapping.Theeffectsofthemergerwerefinalizedon20March2017withcompletionof registrationat thecompanyregister,while theaccountingandtaxeffectswereeffective from1 January2017 inaccordancewiththeprovisionsofthespecificlegislation.Theconsolidatedfinancialstatementsrefertothesameclosingdateoftheparentcompany.CriteriaforconvertingfinancialstatementsnotpreparedineurosTheconversionoffinancialstatementsofsubsidiariesdenominatedincurrenciesotherthantheEuro,MailUpInc.andMailUpNordics, including theDanish sub-subsidiaryGlobase International, is carriedoutby adopting the followingprocedures:* theassetsandliabilitieshavebeenconvertedatexchangeratescurrentasat30/06/2017;* theitemsoftheincomestatementhavebeenconvertedataverageexchangeratesforHY12017;* the emerging exchange differences have been debited or credited to a specific reserve of consolidated equity

named“Reservefromconversiondifferences”;* Equityitemsareconvertedathistoricalexchangeratesonthedateofthefirstconsolidation;* wheresuchexists,goodwillandadjustmentstofairvalueconnectedwiththeacquisitionofaforeignentityare

treatedasassetsandliabilitiesoftheforeignentityandconvertedattheexchangerate inforceonthedateoffirstconsolidation.

Thefollowingaretheexchangeratesused.

Exchangerateasat

30/06/2017

Averageexchangerate

HY12017

Exchangerateasat31/12/2016

AverageexchangerateHY12016

USADollar Euro1.1412 Euro1.0825 Euro1.0541 Euro1.1155DanishCorona Euro7.4366 Euro7.4368 Euro7.4344 Euro7.4500

Sourcehttp://cambi.bancaditalia.it/

TablesofthefinancialstatementsThetablesofthefinancialstatementsusedhavethefollowingcharacteristics:a)on thebalance sheet - statementof financial position, theassets and liabilities are stated in increasingorderofliquidity;anasset/liabilityisclassifiedascurrentwhenitmeetsoneofthefollowingcriteria:-itisexpectedtoberealised/extinguishedorexpectedtobesoldorusedinthenormaloperativecycle;-itismainlyheldfortrading;-itisexpectedtoberealised/extinguishedwithin12monthsofyearend.Ifnoneofthesethreeconditionsaremet,theassets/liabilitiesareclassifiedasnotcurrent;b)ontheincomestatement,thepositiveandnegativeitemsofincomearestatedaccordingtonature;c)Other comprehensive incomehighlightsall changes toOther comprehensiveprofits/(losses)occurringduring theyear,generatedbytransactionsotherthanthoseimplementedwithshareholdersandinaccordancewiththespecific


IAS/IFRSaccountingstandards.Thecompanyhaschosentoshowsaidchangesinaseparatestatementwithrespecttothe income statement. Changes to Other comprehensive profits/(losses) are stated net of the related tax effects,separately identifying, in accordancewith IAS1R in force as from1 January 2013, the components intended tobereversedontheincomestatementinsubsequentyearsandthoseforwhichthereisnoprovisionforanyreversalontheincomestatement;d) the Statement of changes to shareholders’ equity, as required by international accounting standards, providesseparate evidence of the period result and all other changes not carried on the income statement, but insteadallocateddirectlytoOthercomprehensiveprofits/(losses)onthebasisofspecificIAS/IFRSaccountingstandardsandtransactionswithshareholdersintheircapacityasshareholders;e)theStatementofCashFlowsispreparedapplyingtheindirectmethod.MeasurementcriteriaWith reference to the measurement criteria applied in these consolidated half-year financial statements, for adetailedanalysis,referenceismadetothenotestotheconsolidatedfinancialstatementsasat31December2016inthe consolidated and separate financial statements, available here https://www.mailupgroup.com/wp-content/uploads/2017/04/20170419-Fascicolo-di-bilancio-consolidato-e-separato-31.12.2016.pdf for consultation, asthesamecriteria,inspiredbytheIAS/IFRSAccountingStandards,hasremainedunchanged.AccountingstandardsTheaccounting standardsadoptedby theGrouphavenotbeenmodified compared to thoseapplied in theannualfinancialreportasat31December2016,towhichreferenceismade,asabove,foranyfurtherdetails.Thishalf-yearreporthasbeenpreparedinaccordancewithStandardIAS34,concerninginterimfinancialreporting.ProvidedbelowaretheaccountingstandardsandamendmentsthatarenotyetapplicablebytheGroup.a.Accounting standards, amendmentsand interpretationsapproved,butnotyetapplicable/notappliedearlybytheGroupIFRS9-Financialinstruments(applicableasfrom1January2018)Thenewdocumentrepresentsthefirstpartofaprocessinstages,whichaimstofullyreplaceIAS39.IFRS9introducesnew criteria for the classification andmeasurement of financial assets and liabilities and for the derecognition offinancialassets.Morespecifically,thecriteriafortherecognitionandmeasurementoffinancialassetsandtherelatedclassificationinthefinancialreport,havebeenamended.Thenewprovisionsestablishamodelfortheclassificationandvaluationof financial assetsbasedexclusivelyon the following categories: assets valuedatamortisedcostandassets valued at fair value. The new provisions also establish that equity investments other than those held insubsidiaries, jointoperationsorassociates, shallbemeasuredat fair valuewith theallocationof theeffects to theincomestatement. Ifsaidequity investmentsarenotheldfortrading,thechanges infairvaluecanbenoted inthestatementofcomprehensiveincome,maintainingonlytheeffectsconnectedwiththedistributionofdividendsontheincomestatement.Upondisposingoftheequityinvestment,theamountsnotedinthestatementofcomprehensiveincomeshallnotbebookedtotheincomestatement.On28October2010,theIASBsupplementedtheprovisionsofIFRS9, including thecriteria for the recognitionandmeasurementof financial liabilities.Morespecifically, thenewprovisions require that, if measuring a financial liability at fair value with allocation of the effects on the incomestatement,thechangesinfairvalueconnectedwithchangestothecreditriskoftheissuer(the“owncreditrisk”)shallbenotedonthestatementofcomprehensive income;this itemshallbeallocatedtotheincomestatementsoastoensure the symmetrical representation with other items connected with the liability, avoiding any accountingmismatch.Finally,asregardsfinancialliabilities,nosignificantimpactsontheGroup’sequity,financialandeconomicaccountsareexpected.IFRS15-RevenuefromContractswithCustomers(applicableasfrom1January2018)ThenewstandardaimstoimprovethequalityandstandardisationintherecordingofrevenuesandcomparabilityoffinancialstatementspreparedinaccordancewiththeIFRSandtheAmericanaccountingstandards.Accordingtothenewstandard, themodel forrecognisingrevenuescanno longerbebasedontheearningmethod,butrathermustusetheasset-liabilitymethodthatdrawsattentiontothetimeoftransferofcontrolovertheassetsold.TheGroupisfinalizingtheanalysisofthevaluationmodelofitsrevenuesinlightoftheprovisionsofthenewstandard.b.Accountingstandards,amendmentsandinterpretationsnotyetapproved


IFRS16-Leasing(applicableasfrom1January2019,withthepossibilityofearlyapplication)On13January2016,theIASBpublishedthenewaccountingstandardIFRS16Leasing.ThenewstandardreplacesIAS17andprovidesaccounting representationmethods thataremoresuitable in termsof reflecting thenatureof theleaseinthefinancialstatements.ThenewIFRS16isapplicableasfrom1January2019;however,earlyapplicationispermitted for companies that also apply IFRS 15 - Revenues from contractswith Customers. In particular, IFRS 16introducesasingleaccountingmodelforleasesinthefinancialstatementsofthelesseeaccordingtowhichthelesseeacquiresanassetthatrepresentstherighttousetheunderlyingassetandaliabilitythatreflectstheobligationtopaytheleasefees.Inaddition,thenatureofthecostsassociatedwiththeseleaseswillchangeasIFRS16willreplacetheaccountingonastraight-linebasisofoperatingleasecostswithamortizationoftheuserightandfinancialexpenseson lease liabilities. Finally, as regards financial liabilities,no significant impactson theGroup’sequity, financial andeconomicaccountsareexpected.IFRS17-Insurancecontract(applicableasfrom1January2021)Standard aimed at regulating the accounting of insurance contracts (formerly known as IFRS 4 Phase II). Theaccountingmodelenvisaged is the ‘BuildingBlocksApproach’ (BBA),basedonthediscountingoftheexpectedcashflows, which includes the explanation of a ‘risk adjustment’ and a ‘contractual service margin’ issued throughamortizationofthesame.Thenewaccountingstandarddoesnotapplytotheconsolidatedfinancialreport.IAS12Amendment-Incometax(applicableasfrom1January2017,notyetapprovedbytheEuropeanUnion)On19January2016, the IASBpublishedsomeamendmentsto IAS12.Theamendmentaimstoclarifyhowtobookdeferredtaxassetsrelativetodebt instrumentsmeasuredatfairvalue.TheGroupbelievesthatthe introductionofthenewamendmentwillnothaveanysignificantimpactonitsfinancialpositionandprofitability.IAS7Amendment-StatementofCashFlows(applicableasfrom1January2017,notyetapprovedbytheEuropeanUnion)On 29 January 2016, the IASB issued amendments to IAS 7 “Statement of Cash Flows”. The change requires thefinancial statements to provide information on the changes to financial liabilities with the aim of improving thedisclosuregiventoinvestorstohelpthembetterunderstandthechangesaffectingthesepayables.Thisamendment,actingonlyonthepresentation,willhavenoimpactonthefinancialpositionandGroupprofitability.IFRS14-RegulatoryDeferralAccounts(applicableasfrom1January2016)The new standard allows only those adopting IFRS for the first time to continue to book amounts relating to rateregulation according to the previous accounting standards adopted. In order to improve the comparability withentitiesapplying IFRSand thatdonotbooksaidamounts, thestandard requires theeffectof rate regulation tobepresentedseparatelyfromtheotheritems.TheEuropeanCommissionhasdecidednottostarttheapprovalprocessof this standard ad interim, and instead to await the final standard. The new standard does not apply to theconsolidatedfinancialreport.IFRS10 - IAS28Amendment -Saleorcontributionofassetsbetweenan investorand itsassociateor jointventure(applicableasfrom1January2016)Theamendment,whichwaspublishedinSeptember2014,aimstosolveaconflictbetweentheprovisionsofIFRS10andIAS28 ifan investorsellsorcontributesabusinessorassociateor jointventure.Themainchangemadetotheamendmentisthefactthatthecapitalgainorlossconsequenttothelossofcontrolmustberecordedinfullatthetimeofthesaleorcontributionofthebusiness.Apartialcapitalgainorlosswillberecordedonlyintheeventofasaleorcontributioninvolvingindividualassetsonly.TheIASBhassuspendedpublicationandapprovalofsaidamendmenttoadatetobedefined.IFRS2Amendment-Classificationandmeasurementofshare-basedpayments(applicableasfrom1January2018)Itincludesclarificationsontheaccountingofstockoptionssubjecttovestingconditionsconnectedwithperformance.TheGroupbelievesthattheadoptionofthenewstandardwillnothaveanysignificantimpactonitsfinancialpositionandprofitability.IFRS4Amendment -Applicationof IFRS9Financial instruments to IFRS4 Insurancecontracts (applicableas from1January2018)The amendment introduces different methods of booking for insurance contracts coming under the scope ofapplicationofIFRS4.Theamendmentdoesnotapplytotheconsolidatedfinancialreport.SpecificationsonIFRS15-RevenuefromContractswithCustomers(applicableasfrom1January2018)


The IASB has provided practical indications on certain subjects covered by IFRS 15 (identification of performanceobligations,mainconsiderationsversusagentandlicensing).TheanalysisofthepotentialimpactofthisamendmentwillbeconsideredatthesametimeastheapplicationofIFRS15,describedabove.AnnualImprovementstoIFRSs2014-2016Cycle:thedocument“AnnualImprovementstoIFRSs2014-2016Cycle”,notyet approved, containing amendments, which are mainly technical and editorial, to some international financialreportingstandards.Themainclarificationsregard IFRS1, IAS28and IFRS12.Webelievethatthese improvementswillnotimpacttheGroup’sfinancialposition.IFRIC22Interpretation-ForeignCurrencyTransactionsandAdvanceConsideration(issuedon8December2016)IFRIC22aimstoclarifythebookingofoperationsinvolvingthereceiptorpaymentofadvancesinforeigncurrency,inparticularwhenanentityrecordsanon-monetaryassetorliabilitybeforebookingtherelatedasset,revenueorcost.IFRIC22isapplicableasfrom1January2018;earlyapplicationispermitted.IAS40Amendment-TransfersofInvestmentProperty(issuedon8December2016)Themainchangesintroducedbytheamendmentincludethechangeinintendedpurposeofaninvestmentpropertyonlybeingabletotakeplacewhenthereisevidenceofachangeinuse.IFRIC23Interpretation-UncertaintyoverIncomeTaxTreatments(issuedon7June2017)IFRIC 23 aims to clarify how to calculate current and deferred taxes when there are uncertainties about the taxtreatment adopted by the entity preparing the financial statements and that may not be accepted by the taxauthority.DisclosureonthebookvalueoffinancialinstrumentsBelowisthedisclosureonthebookvalueofthefinancialinstrumentsforHY12017:

30June2017MailUpGroup (inunitsofeuros) Fairvalue

instrumentsmeasuredthroughprofitorloss(FVTPL)

Receivables,payablesandloans Fairvalue

Fairvaluehierarchy

Otherfinancialassets Othernon-currentfinancialassets 87,083 87,083 Level3Tradereceivables Tradereceivables 2,955,661 2,955,661 Level3Liquidfundsandequivalent Cashatbankandpostoffice 6,240,975 6,240,975 Level1 Non-currentfinancialliabilitiesandpayables Amountsduetobanks 2,595,885 2,595,885 Level1Currentliabilities Amountsduetobanksandotherlenders 1,681,451 1,681,451 Level1Tradepayables 3,820,831 3,820,831 Level3 PotentialliabilitiesInadditiontothatindicatedintheparagraphonProvisionsforrisks,nolegalortaxdisputesarecurrentlyunderwayinvolvingtheGroupcompanies.


NOTESONTHEEQUITY,FINANCIALANDECONOMICSTATEMENTS

AssetsNon-currentassetsTangibleassets(1)

Balanceasat30/06/2017 Balanceasat31/12/2016 Changes930,269 709,130 221,140

Description 30/06/2017 31/12/2016 ChangesPlantsandmachinery 31,961 3,669 28,292Otherassets 898,308 705,461 192,848Total 930,269 709,130 221,140

“Otherassets” relates to thecost for thepurchaseofoffice furnitureand fittings, thepurchaseofelectronicofficemachines,miscellaneous equipment, signs and costs for the purchase ofmobile telephones, booked net of periodamortisation/depreciationandconsolidationadjustments.Theincreaseintheitem“Otherassets”,mainlyrelatedtoMailUp,representedbyservers,electronicequipmentandfurnishings,isrelatedtothecostsofsettingupnewofficesinCremonaatthe“Digital InnovationCenter”,asfromJuly,newoperationalandadministrativeofficeoftheparentcompany.Noimpairmentorwrite-backswereappliedthisyearorduringpreviousyears.Intangibleassets(2)

Balanceasat30/06/2017 Balanceasat31/12/2016 Changes3,700,849 3,756,336 (55,487)

Description 30/06/2017 31/12/2016 ChangesPlatformdevelopment 3,493,429 3,502,145 (8,716)Thirdpartysoftware 143,764 165,900 (22,136)Trademarks 18,649 22,566 (3,917)Other 45,007 65,725 (20,718)total 3,700,849 3,756,336 (55,487)

The item “Platform Development” includes costs for the development of theMailUp platform, net of the relatedamortizationanddetailsoftheactivitiescarriedoutareprovidedbelow.“Thirdpartysoftware”includescostsrelativetosoftwareownedbythirdparties.“Trademarks”includestheexpensesincurredforthedepositandprotectionoftheMailUptrademarkinItalyandinothercountriesconsideredasstrategicincommercialterms.“Other”fixedassetsconsistofthecostsfortranslatingplatformcomponentsofmultiple-yearuse,incurredintoorderto allow for its use on export markets (e.g. English, Spanish, Japanese, Bahasa) under the scope of the generalstrategicinternationalgrowthprojectpursuedbytheGroup.Theyalsoinclude,forresidualamounts,improvementstoleasedpropertiesownedbythirdparties.Regardingtherecoverabilityofthevalueofintangibleassets, it isnotedthat,untilthedateofthisdocument,therehave been no indicators showing impairment of the same with respect to the book value recorded. The parentcompany’s directorswill therefore carry out the necessary verifications, bymeans of impairment test in the 2017consolidatedannualfinancialstatements,monitoringtherecoverablevalue,consistingofthediscountedcashflowsof


MailUp and comparing it with the net book value of intangible assets. The value of the intangible assets held byMailUpisbyfarthegreatestofthetotaloftheconsolidatedfinancialstatements,hencethetestofpotentialrecoverywillbelimitedtotheparentcompanyonly.Here isa summaryof thenewfeaturesand improvements tooursoftware released in the first sixmonthsof2017connectedtoourResearch&Developmentactivities.MailUpPlatform:• inFebruaryof2017theR&DteamreleasedMailUp9,acompleteredesignoftheMailUpservicethathadbeenin

themaking for severalmonthsandwas the resultofextensiveuser research.MailUp9didn’t just introduceanentirelynewuser interface,butalsobrought to lifeanarrayofnewfeaturesaimedatmaking the jobofdigitalmarketerseasierandmoreeffective.Virtuallyeveryelementoftheplatformwasredesignedtooptimizetheuserexperience,fromthenavigationtothedashboardthatwelcomesauserwhentheylogin,evenwhentheyuseasmartphone.Abrand-newcollaborationtoolwasaddedtomakeiteasyandfastforteamstoreviewandapprovea campaignbefore it’s sent.Message statisticswerealso redesigned,both for theemail and theSMSchannels.Substantial workwas done “under the hood”, providing better scalability and performance. All in all, 850 newfeaturesandimprovementswereintroducedwithMailUp9,oneofthelargestreleasesinMailUphistory.

• inAprilanadditional functionalitywas released tohelpmarketerscreateandschedule their campaigns.Among

them,afeaturethatprovidesacalendarviewofupcomingmailings,afaster“Linkcheck”tooltoensurethatanemailmessages does not contain broken or blacklisted links, additional improvements to campaign statistics, anewmessageimporttoolthatsupportsZIPfiles,andanewintegrationcatalogthatimprovesthewayconnectorswithotherapplicationsareshowntoMailUpusers,sothattheyareeasiertotakeadvantageof;

• in the June release, MailUp developers focused on marketing automation and message personalization. Newmessage level and workflow-level statistics were added to automation workflows, making it much easier forMailUpusers to dig into theperformanceof an automated campaign so that it canbe further optimized.Withregardtopersonalization,acompletelynewsetoffeatureswasaddedtoourproprietarycampaignsendingengineso that external, recipient-specific data (e.g. product recommendations) can be dynamically retrieved from anexternalsourceandmergedintoamessageatthetimethemessageissent,usingthepopularLiquidsyntax;

• throughout the first 6months of 2017 substantial improvementswere alsomade to theMailUpAPIs, both foremailandSMSmessaging.AmongthenewandimprovedAPIs:verifyasender,sendtomultiplegroups,managelists,checkSMScreditbalance, improvementstoemail&phonenumber import,andmore.Wealso launchedanewsletterdedicatedtothemanydevelopersthatusetheMailUpAPIs: it isnowregularlysenttoaround1,500developersaroundtheworld.

Again under the scope of research and development, a significant amount of the work carried out regarded thedevelopmentofthe“InnovativeBigDataAnalyticsSystem”project.ItisaprojectwithamajorimpactonthefuturebusinessofMailUpinthemediumtolongterm,havingamarketpotentialalsoatinternationallevel,inparticularintheEnglish-speakingworld,whereBigDataAnalyticstoolsareusedtodayonlyby largemultinationalplayersofthesector,dueto thecomplexityof thetechnologiesandhighspecializationof resources thatneedtobeput inplace.MailUp will receive from Lombardy Region up to a maximum of Euro 860,122 non-repayable in 24 months withrespecttoatotalinvestmentofEuro2,045,648intheperiod.Thefundingwillcovercostsforpersonnel,training,toolsandequipmentandconsultancy servicesneeded for the realizationof the investments,whichwillbe implementedoverthe2yearsofdurationoftheprojectthatwillgoonuntilFebruary2018.Goodwill(3)


Thechangeisdeterminedbythedefinition,on20June2017,inagreementwiththesellers,ofthesupplementaryfeedue as earn-out to Zoidberg Srl for the acquisition of 100% of the share capital of Agile Telecom SpA, finalized inFebruary 2016. Following agreement between the parties, the aforementioned supplementary fee was calculated


takingintoaccountthevalueoftheaverageEBITDAofAgileTelecomforthetwo-yearperiod2015-2016(thisinlinewiththecontentsofthepurchaseandsaleagreement)andwasEuro2.8milliontobepaidasfollows:Euro2.4million,incashandinthreeseparatetranchesrespectivelyofEuro1millionby30June2017,alreadypaid,Euro800thousandby 30 June 2018 and Euro 600 thousand by 30 June 2019, and the remainder of Euro 400 thousand bymeans ofpayment in newly-issued shares already assigned to the sellers. The 125,000 ordinary shares of MailUp, with noindicationofnominalvalueexpressed,fortheearn-outportioninkind,areissuedataunitpriceofEuro3.20eachandderive froma specific capital increase totallingEuro400,000.00 (includingpremium)ofwhich0.025Euros foreachshareuponcapital increasedecidedbytheadministrativebodyinexecutionofthedelegationconferredoniton23December2015.GoodwillrelatingtoAgileTelecom,calculatedonthebasisofanestimatedearn-outofEuro3million278thousand,wasthereforeadjustedtotakeaccountofthereductionnegotiatedbythepartiesintheamountofthesupplementaryfeeofEuro478thousand.Goodwillderivingfromtheacquisitionofcompaniesisdetailedasfollows:

Description 30/06/2017MailUpInc 162,418AcumbamailSL 464,923MailUpNordicsA/S 485,636MailupNordics/Globase 460,137AgileTelecomSpA 8,256,720total 9,829,834

GoodwillisalsobookedrelativetothebusinesslineFaxator,managedbyAgileTelecom,forEuro79,155.ImpairmenttestingofgoodwillThe directors verify, at least once a year, the potential recovery of goodwill recorded in the consolidated financialstatements, using specific assessments (impairment tests) on each cash generating unit (or “CGU”). Goodwill iscalculatedasthedifferenceinpurchasevalueoftheequityinsubsidiariesandshareholders’equityofthesubsidiaryat the timeof firstconsolidation. In thespecificcase, theCGUsare representedby thespecific subsidiary towhichgoodwillrefers.Thepotentialrecoveryoftheinvestmentisdeterminedwithreferencetoforecastcashflow.Since therewas no evidence and/or indicators of impairment of goodwill recordedwith respect to the accountingdata, in2017andup to thedateofpreparing thisdocument,comparedwith theassumptionsalreadymade in theimpairment test in theprevious consolidatedannual financial statements, it is consideredappropriate topostponethisverificationtothe2017annualfinancialstatements.Equityinvestmentsinassociates(4)

Companyname Country 31/12/2016 RevaluationsWrite-downs Purchases 30/06/2017

CRITCremonainformationTechnology Italy 102,000 102,000Total 102,000 102,000

TheamountbookedamongsttheassetsofthebalancesheetreferstotheequityinvestmentofMailUpinConsorzioCRIT(CRemonaInformationTechnology).Sinceinterimfinancialstatementsasat30June2017oftheassociatearenotavailable,thevalueasat31December2016wasretained.TheCRIThasallowed,asfundamentalstimulusfactorandmeetingplacefortheplayersinvolved,notonlyconsortiummembers but also the institutions, the creation of the “Digital Innovation Center” in Cremona, the new buildingcomplexofficially inauguratedon10 June2017,where theconsortiummembersareestablished, includingMailUp,which transferred its operational and administrative office from Cremona in July 2017. Also the co-working spacecalledCobox,managedbytheCRITconsortium,hasrecentlybeentransferredtotheCenter.All these initiatives refer to the strategic objectives of the CRIT, i.e. to enable synergies to be achieved betweenconsortium members, develop services of mutual interest, both managerial and operative in nature (start-up


incubator, common training structures, canteen, meeting rooms) and construct a centre of excellence that cangenerate new businesses and transfer economic opportunities and better quality of life to the local world ofbusinessesandcommunities,derivingfromtheuseofnewcommunicationandinformationtechnologies.Othernon-currentassets(5)


Description

31/12/2016 Increase Decrease 30/06/2017

Receivablesfromassociatedcompanies

14,641 14,641

Receivablesfromothers 55,012 17,430 72,442Total 69,653 17,430 87,083

“Receivables from associated companies” refer to the receivable from the CRIT Consortium, which became anassociatedcompanyin2016.Theitem“Receivablesfromothers”referstosecuritydepositsduebeyondtheyear,ofwhichthemainover,overEuro51thousand,isrelatedtotheleasecontractoftheDanishsubsidiaryGlobaseInternational.Receivablesallhaveamaturityinexcessof12months.Prepaidtaxassets(6)

Balanceasat30/06/2017 Balanceasat31/12/2016 Changes747,531 785,139 (37,608)

Prepaidtaxassetsrefertotemporarydifferencesrecognizedintheindividualfinancialstatements.DetailsinconnectionwitheachGroupcompanycanbesummarisedasfollows:

Description 30/06/2017

MailUpSpA 494,031MailUpInc 148,574AcumbamailSL 0MailUpNordicsA/S 82,051MailupNordics/Globase 21,516AgileTelecomSpA 1,359Total 747,531

CurrentassetsTradeandotherreceivables(7)



Belowisthebreakdownofreceivablesbygeographicarea:

ReceivablesdividedbyGeographicArea

Tradeaccounts Associatedcompanies

Total

Italy 1,852,801 8,450 1,861,251EU 698,810 698,810NonEU 404,050 404,050Total 2,955,661 8,450 2,964,111

Othercurrentassets(8)


Description 30/06/2017 31/12/2016 ChangesInventories 17,217 4,847 12,370Taxreceivables 260,383 355,784 (95,401)Otherreceivables 933,672 1,077,272 (143,600)Financialassetsnotheldasfixedassets 0 40,404 (40,404)Accrualsanddeferrals 395,892 264,647 131,245 1,607,164 1,742,954 (135,790)

Liquidfunds(9)

Balanceasat30/06/2017 Balanceasat31/12/2016 Changes6,240,975 4,461,219 1,779,757

Description 30/06/2017 31/12/2016Cashatbankandpostoffice 6,237,581 4,460,497Cashandcashequivalents 3,394 722 6,240,975 4,461,219

Thebalancerepresentsliquidfundsandcashaswellasvaluablesheldontheclosingdateoftheyear.LiabilitiesGroupshareholders’equitySharecapital(10)

Description 30/06/2017 31/12/2016 ChangesTradereceivables 2,955,661 3,346,710 (391,049)Associatedcompanies 8,450 49,554 (41,104) 2,964,111 3,396,264 (432,153)


Balanceasat30/06/2017 Balanceasat31/12/2016 Changes

286,391 283,266 3,125The share capital of the parent company MailUp is entirely paid in and is represented as at 30 June 2017 by11,455,627ordinaryshareswithnoparvalue,whoseaccountingparitycomestoEuro0.025each.Thesharecapitalchangedfollowingthe:- execution during themeeting of the Board of Directors held on 20/06/2017 of the delegation conferred by theExtraordinaryShareholders’Meetingheldon23December2015,toincreasethesharecapitalinadivisiblemanner,inexchangeforpayment,withexclusionofoptionrights.ThecapitalincreasewasmadeforanominalamountofEuro3,125throughtheissueof125,000shares,issuedatapriceofEuro3.20pershare,assignedtoZoidbergSrlassellerofAgileTelecomSpAfortheportionoftheearn-outinkindagreedbythepartiesinexecutionofthepurchaseandsalecontractsignedon29December2015.ThedifferenceofEuro396,875wasrecognizedundersharepremiumreserve;FollowingtheendoftheHY,therewerealsothefollowingchangesinthesharecapitalofMailUp:- execution during themeeting of the Board of Directors held on 25/07/2017 of the delegation conferred by theExtraordinaryShareholders’Meetingheldon23December2015,toincreasethesharecapitalinadivisiblemanner,inexchangeforpayment,foratotalofEuro6,264,000(includingpremium)aspartofaprivateplacementtoberealizedby means of an accelerated bookbuilding procedure with exclusion of option rights. On 26 July 2017 was thesuccessfulconclusionofthecapitalincreasesubscriptionimplementedthroughABBconcerning2,610,000newsharesplacedatapricepershareofEuro2.30each.Thetransactionwasregulatedbymeansofdeliveryofsecuritiesandpaymentofthefee(“settlement”)on28July2017.Followingthefullsubscriptionofnewly-issuedshares,thesharecapital of MailUp after the increase reached Euro 351,640.68, divided into 14,065,627 ordinary shares with noindicationofthenominalvalueexpressed,withafloatofapproximately33%.TheactualvalueofthecapitalincreaseattheendofthetransactionwasequaltoEuro6,003,000,ofwhichEuro5,937,750aspremium;-on2August2017-followingthesharecapitalincreaseforthestockoptionplanreferredtoas“2016Plan”,approvedby theBoardofDirectorsof the companyon29March2016 - 73,840 shares thatwill havea lock-upperiodof 12months were actually assigned, following the exercise of the related stock options by the recipients of the Plan.Followingthecapital increase,thesubscribedandpaid-upsharecapitalofthecompanyreached353,486.68dividedinto14,139,467ordinaryshareswithoutnominalvalue.Reserves(11)


Description 31/12/2016 Increases Decreases 30/06/2017Sharepremiumreserve 4,607,721 396,875 (90,000) 4,914,596Stockoptionreserve 243,316 90,849 334,165Legalreserve 60,000 60,000Extraordinaryoroptionalreserve 295,624 1,224,911 1,520,535Reserveforexchangerategains 25,289 25,289FTAreserve (590,317) (23,132) (613,449)OCIreserve (90,196) 15,119 (75,077)Negativereservefortreasurystock (112,466) (2,753) (115,219)Mergersurplusreserve 0 133,068 133,068Translationreserve (16,432) 9,952 (6,480)Roundingoff (1) (1)Profit/(loss)carriedforward 1,473,972 (599,140) 874,831Total 5,896,510 1,870,773 (715,026) 7,052,258The FTA reserve was generated during the transition to the IFRS of the individual and consolidated financialstatements.TheOCIreserverepresentstheeffectsderivingfromtheremeasuringofthedefinedbenefitsplan,asrepresentedinthestatementofcomprehensiveincome.Thestockoptionsreserveoriginatesfromtheincentiveplantothebenefitofseniormanagement.


Amongstotheraspects,themainaimoftheIncentivePlanistohelpstrengthentheinvolvementofthepeopleholdingkeypositionsinthepursuitofthecompanyandGroup’soperativeobjectives.Thenegativereservefortreasurystockcorrespondstothepurchasepriceofownsharesintheparentcompanyheldasat30June2017.Themergersurplusreserveexpressestheaccountingeffectsofthemergerby incorporationofthe100%subsidiaryNetworkSrl,alreadymentionedatthebeginningofthesenotes.The translation reserve expresses the net effect of the conversion in the consolidated financial statements of thefinancial statements of foreign subsidiaries held in currencies other than the Euro (MailUp Inc and MailUpNordics/Globase).PeriodresultThenetyearresultispositiveandamountstoEuro157,731,includingtheminorityshareofEuro26,900.OthercomprehensiveincomeThesectionoftheaccountingschedulesincludestheStatementofComprehensiveIncome,whichhighlightstheothercomponentsofthecomprehensiveeconomicresults,netofthetaxeffect.Shareholders’equityofminorityinterests(12)

Description 30/06/2017 31/12/2016 ChangesMinorityinterestsincapitalandreserves 58,993 28,110 30,883Thirdpartyincome 26,900 31,849 (4,949)Shareholders’equityofminorityinterests 85,893 59,959 25,934

Non-currentliabilitiesAmountsduetobanksandotherlenders(13)

Description 30/06/2017 31/12/2016 ChangesAmountsduetobanks 2,595,885 2,246,145 349,740 2,595,885 2,246,145 349,740

“Amountsduetobanks”canbebrokenupasfollowsamongsttheGroupcompanies: Please note that the Group debt as at 30 June 2017 is expressed entirely at variable rates and is represented byunsecuredloans. Provisionsforrisksandcharges(14)


Description 31/12/2016 Increases DecreasesReclassifications 30/06/2017Provisionforlegaldisputes 57,739 57,739Provisionforpensions 0 13,333 13,333 57,739 13,333 71,072

Description 30/06/2017 31/12/2016 ChangesMailUpSpA 2,564,635 2,183,645 380,990AgileTelecomSpA 31,250 62,500 (31,250)total 2,595,885 2,246,145 349,740


A provisionhasbeenestablished for current legal disputes. Theparent company currently has a lawsuit underwaywith theFinancialAdministration in connectionwith the companies’ income tax, regionalproduction taxandvalueaddedtaxfor2004.Theofficehasissuedanoticeofassessmentonthebasisoftheuseoftheresultsofthesectorstudies’calculation;thereconstruction of revenues prepared by theAuthority entailed greater tax, totalling Euro 58,468 and sanctions forEuro49,344,alreadypaidinfull.The petition proposed by the company has been rejected on a first and second instance and the company hassubmitted an appeal in cassation. The company’s lawyers believe that they are likely to be successful in the lastinstanceofproceedings.Anamounthasbeenallocatedonthefinancialstatementsconsideringthereduction,bythetax courts, of the office claims. In the petitions submitted, it has, amongst other aspects, been shown that therecalculationofthesectorstudywithamoreevolvedstudy,bringsaboutamorefavourableresultforthecompany.Therefore,aprovisionforriskshasbeenallocated,inaccordancewithArt.2423-bisoftheCivilCodeandaccountingstandardOIC19,foranamountequaltothegreatertaxderivingfromtheapplicationofsaidstudy.Theprovisionforpensionandsimilarcommitmentsreferstotheindemnityduetodirectorsuponcessationofoffice.Stafffunds(15)


Thechangeisasfollows.

Description 31/12/2016 Increases Decreases Actuarialgains/losses

30/06/2017

Stafffunds 933,526 117,546 (52,184) (19,894) 978,994 933,526 117,546 (52,184) (19,894) 978,994Theincreasesrelatetoyearprovisions.Thedecreasesrelatetoyearuses.Deferredtaxliabilities(16)

Description 31/12/2016 Increases Decreases 30/06/2017Deferredtaxprovision 31,287 16,046 (28,537) 18,796 31,287 16,046 (28,537) 18,796

Thedeferredtaxprovisionrelatesto:

- contributionsoncapitalaccount,taxationofwhichhasbeendeferredtofutureyears;- consolidationdifferencesderivingfromtheelisionofinfra-groupamortisation/depreciation.

CurrentliabilitiesTradeandotherpayables(17)

Description 30/06/2017 31/12/2016 ChangesTradepayables 3,820,831 2,942,626 878,204Amountsduetoassociates 0 4,921 (4,921) 3,820,831 2,947,547 873,284


“Tradepayables”arestatednetofcommercialdiscounts.Belowisabreakdownoftradepayablesaccordingtogeographicarea

ReceivablesdividedbyGeographicArea

Tradeaccounts Associatedcompanies

Total

Italy 2,858,941 2,858,941EU 632,209 632,209NonEU 329,679 329,679Total 3,820,829 3,820,829

Amountsduetobanksandotherlenders(18)

Balanceasat30/06/2017 Balanceasat31/12/2016 Changes1,681,451 1,261,627 419,824

Description 30/06/2017 31/12/2016 ChangesAmountsduetobanks 1,673,066 1,244,877 428,189Amountsduetootherprovidersoffinance

8,385 16,750 (8,365)

1,681,451 1,261,627 419,824“Amountsduetobanks”relatestotheresidualshort-termportionsofunsecuredvariable-rateloansstipulatedbytheparentcompanywithBancoPopolareBPM,CreditoValtellineseandCredemandbythesubsidiaryAgileTelecomwithDeutscheBank.“Amountsduetootherprovidersoffinance”relatestotheresidualamountofabeneficial-rateloanobtainedbytheparent company MailUp and disbursed by Finlombarda, following participation in the tender “Development ofinnovation of Lombardy businesses in the tertiary sector” aimed at presenting and developing projects seeking toinnovatetheLombardyproductionsystem.Othercurrentliabilities(19)

Balanceasat30/06/2017 Balanceasat31/12/2016 Changes9,566,569 10,911,883 (1,345,314)

Belowisthebreakdownofcurrentliabilities:“Taxpayables”mainlyreferstowithholdingsappliedtoincomefromemploymentandautonomousworktobepaidduringthefollowingyear,andthebalance,fordirecttaxdueandVAT.

Description 30/06/2017Advances 12,451Taxpayables 361,960Amountpayabletosocialsecurityinstitutions 251,571Amountsduetodirectorsforemoluments 27,075Amountsduetoemployeesforsalaries,holidays,permitsandadditionalmonths’salaries

1,099,178

AmountsduetoZoidbergSrl 1,900,000Accruedliabilities 768,032Deferredincome 5,141,286Sundry 5,016Total 9,566,569


“Amountpayabletosocialsecurityinstitutions”mainlyrelatestovarioustypesofsocialchargestobepaidduringthefollowingHYwith reference to the remuneration of themonth of June, the thirteenthmonth’s salary and holidayaccruedandnottaken.AmountsduetoemployeesrefertoremunerationforthemonthofJuneliquidatedinJuly,holidayaccruedandnottakenandtheaccrued13thmonth.Theamountdue toZoidbergSrl relates to theacquisitionof thecompanyAgileTelecomon29December2015. Inparticular, Euro 1 million 400 thousand consists of the second and third tranches of the earn-out agreed by theparties,asfurtherdetailedabove,whiletheremainingEuro500thousandrepresentedasecuritydeposit,reimbursedon18July2017,followingthepresentationbyZoidberg,ofthesuretyguaranteecontractuallyprovided.Deferred income: approximately 75%of the revenues ofMailUp come from recurring charges.MailUp collects therecurringchargesderivingfromthee-mailservice,but,onanaccrualsbasis,onlypartofthechargesisusedtoformtheyear’sincome,whilstthepartoffuturecompetenceisusedasabasisforthefollowingyear’sincome.IncomestatementRevenues(20)


Description 30/06/2017 30/06/2016 ChangesRevenuesfromsalesofmail 4,511,644 4,349,050 162,595RevenuesfromsalesofSMS 7,512,506 5,256,382 2,256,124RevenuesfromsalesofBEE 374,564 49,065 325,498Revenuesfromsalesofprofessionalservices

218,413 172,707 45,706

Other 111,476 42,702 68,774Total 12,728,603 9,869,906 2,858,697

Otherincome(21)


Theitemincludes:-rentalincomefromleasedproperties,Euro19,820;-contributionsrelativetotaxcreditforresearchanddevelopment,Euro86,334;- contribution disbursed by the Region of Lombardy as part of the “competitiveness agreements” tender, Euro144,393;-contingentassets,Euro93,123;-otherresidualrevenues,Euro12,379.Costsforservices(22)


Theitemincludes:-costsrelativetothepurchaseofSMS,Euro5,019,538;


-costsrelativetodirectors’emolumentsandseveranceindemnityuponterminationofoffice,Euro507,525;-costsforconsultancy,Euro626,121;-costsfortheuseofthirdpartyassets,Euro457,455;-ITinfrastructureandotherindustrialserviceexpenses,Euro494,722;-marketingandadvertisingservicesexpenses,Euro292,367;-softwarelicences,Euro160,715;-housingandhostingservicesexpenses,Euro95,167;-expensesfortakingpartineventandtradefairs,Euro80,115;-bankexpenses,Euro93,859;-expensesfortransfers,expenseandKmreimbursements,Euro139,591;-costsrelatingtotheAIMItalymarket,Euro56,300;-costsforutilitiesandofficefacilities,Euro87,054;-Internetandtelephonecosts,Euro42,864;-insurance,Euro40,177;-costsforstaffsearchesandtraining,Euro31,659;-costsforhardwarematerialthatcannotbecapitalised,Euro132,280;-emolumentstotheBoardofAuditors,Euro21,750;-employeebenefits,Euro14,999;-financialcommunicationcosts,Euro10,032;-miscellaneousadministrativeservicesexpenses,Euro19,114;-entertainmentexpenses,Euro7,969;-maintenanceofownorthird-partyproperty,Euro121,963;-Supervisorybodyfees,Euro3,750;-costsfortranslationservices,Euro13,764;-retailerfees,Euro40,807;-otherresidualcosts,Euro5,245.Payrollcosts(23)Thisitemincludesallexpensesforemployees,includingperformancepromotions,categorypromotions,costoflivingbonuses,costsforunpaidholidaysandallocationsrequiredbylawandcollectiveemploymentcontracts.Thecostforemployeesisshowninthetablebelow:

Description 30/06/2017 30/06/2016 ChangesWagesandsalaries 2,716,858 2,566,315 150,543Stockoptions 90,521 90,521Welfareandsocialsecurity 552,522 558,785 (6,263)Employeeterminationindemnities 144,374 157,571 (13,197) 3,504,275 3,282,671 221,604ThetablebelowshowstheGroupworkforce,brokendownaccordingtogeographicarea:

Levelofclassification

NumberTotal

% Italy UnitedStatesofAmerica

Spain Denmark

Labourers 1 1% 1 Officeworkers 126 92% 107 1 7 11Middlemanagers 6 4% 6 Managers 4 3% 2 1 1Total 137 100% 116 2 7 12


Capitalisationofpayrollcostsfordevelopmentactivities(24)


These are the costs of staff involved in development activities capitalised inHY1 2017. The expenses span severalyearsandtherelatedbenefitsarealsoseeninseveralyears.The capitalisation of the costs of staff involved in development is subject to the requirements already specifiedamongst the measurement criteria. For an in-depth analysis of the development projects, please refer to theinformationgivenontheparagraphonintangibleassets.Otheroperatingexpenses(25)


Costsforservices 30/06/2017 30/06/2016 Changes

Changeininventoriesoffinishedproductsandgoods (12,370) (19,396) 7,026Sundryoperatingexpenses 222,007 108,111 113,896Total 209,637 88,715 120,933

Thebalancebookedforsundryoperatingexpensesisdetailedbelow:-lossesonreceivables,Euro8,916;-contingentliabilitiesandothernon-deductiblecosts,Euro155,691;-miscellaneoustaxandduties(registration,waste,signs,governmentconcessionrate,etc.),Euro32,235;-associationfees,Euro12,521;-othermiscellaneousexpenses,Euro12,644.Amortisation,depreciationandimpairment(26)Belowaredetails:

Provisionsandimpairment 30/06/2017 30/06/2016 ChangesAmortisationofintangiblefixedassets 553,501 430,866 122,635Depreciationoftangiblefixedassets 144,146 138,236 5,910Provisionsfordoubtfuldebt 14,343 5,317 9,026Totalamortisation,depreciationandprovisions

711,990 574,419 137,571

Financialexpense(27)


Theamountconsistsofinterestexpenseonbankloansandexchangelosses.ItalsoincludestheinterestcostderivingfromtheactuarialvaluationaccordingtoIAS19R.


Financialincome(28)


Theamountconsistsofinterestincomeonbankcurrentaccountsandexchangegains.FYincometax(29)


Currentandprepaidtax 30/06/2017 30/06/2016 ChangesCurrenttax 316,597 226,807 89,790Deferred/prepaidtax (31,343) 145,534 (176,877)Total 285,254 372,341 (87,087)

TheGroupcompanieshavesetupyeartaxesonthebasisoftheapplicationofcurrenttaxregulationsinforceintherelevantcountry.Theyear’staxesaremadeupofcurrenttax,deferredtaxandprepaidtax,relatingtopositiveandnegativeitemsofincomerespectivelysubjecttoimpositionordeductionsinyearsotherthanthoseduringwhichtheyarebooked.Prepaid/deferredtaxconnectedwiththeconsolidationentriesderivingfromtheelisionsof intra-groupmarginsandtherelatedeffectontheconsolidationamortisation/depreciationshares,havealsobeencalculated.RelatedpartytransactionsTransactions implementedbytheGroupwithrelatedparties, identifiedaccordingtothecriteriadefinedby IAS24-Relatedpartydisclosure-arecarriedoutatarm’slength.BelowaretheequityandeconomicbalancesrelativetoGrouptransactionswithrelatedpartiesfortheperiodendedon30June2017.

Company Fixedreceivables Tradereceivables

Tradepayables

Otherreceivables

OtherPayables Dividends Sales Purchases

ConsorzioCRITScarl 14,641 8,450 Associates 14,641 8,450 - - - - - -GrafoVenturesdiGiandomenicoSica

10,631

70,471

FloorSrl 12,228ZoidbergSrl 1,900,000 Otherrelatedcompanies - - 10,631 - 1,900,000 - - 82,699The most significant amount relates to the extraordinary purchase of the controlling stake in Agile Telecom. Thecurrentbalanceofthisitem,asalreadyspecifiedabove,equaltoEuro1,400thousand,isgivenbytheresidualearn-outthatwillbepaidbyMailUpatthefuturematuritiesagreedwiththeseller.TheadditionalamountsrelatetocommercialandfinancingrelationshipswiththeassociatedCRITconsortium,supplycontractswithGrafoVenturesandtheleasefeeofthenewadministrativeandoperationalofficeinCremonaoftheparentcompanyattheDigitalInnovationCenter.PotentialassetsandliabilitiesThecompanyhasnopotentialassetsandliabilitiesasat30/06/2017.Feestodirectorsandauditors


Directors’feescametoEuro507,525,includingtheseveranceindemnityuponcessionofoffice,whilstthefeestotheBoardsofAuditors,wherepresent,cametoEuro21,750.FeetotheindependentauditingfirmPleasenotethat-inaccordancewithletter16-bisofArt.2427oftheCivilCode-thetotalamountoffeesduetotheindependentauditingfirminHY12017wasEuro29,728,includingcostsandexpenses.DisclosureregardingcoordinationandmanagementactivitiesInaccordancewithArt.2497-bisoftheCivilCode,wewouldspecifythattheparentcompanyisnotsubjecttothird-partycoordinationandmanagement.SubsequenteventsThecommitmentofMailUptofightingspamandphishinghasbeenstrengthened.Theemailecosystemisconstantlythreatenedby sendingunauthorizedmessages,whether they areunwantedpromotional emails ormore elaborateactual fraudulent attempts, such as phishing. With nearly 2 billion messages sent per month from clients and torecipientsaroundtheworld,MailUpisattheforefrontincombatingbadpracticesandimprovingtheworldofemailmarketing. MailUp has always invested in the development and improvement of Machine Learning proprietaryalgorithmsandpredictivemodelstoidentifythosewhodonotrespecttherulesofexcellenceandin2017,hasmorethandoubledthespecific investmentoverthepreviousyear. It isvery importantthatalltheplayers involvedintheemailsendingandreceivingprocessareresponsibleanddotheirutmosttomaintainusers’confidenceinthetool.Forthisreason,MailUpisamemberofseveralorganizationsandworkgroupsfocusedondefiningandrespectingthebestpractices for sending email communications (and not only), including:M3AAWG (Messaging,Malware andMobileAnti-AbuseWorking Group), APWG (Anti PhishingWorking Group), ESPC (Email Service Provider Coalition), Signal-Spam(France)andCSA(CertifiedSendersAlliance).Thankstothesepartnerships,MailUpoffersthecommunitytheresultsofitsresearchandinvestment,comparingitselfonalike-for-likebasiswithindustrygloballeaders,fromESP(emailserviceproviders), to ISP(suchasGmail,Outlook,Yahoo!)andactivelycollaboratingwiththemtoeffectivelyaddressthefightagainstallformsofabuserelatedtoemailand,moregenerally,allelectronicmessagingactivities.On25July2017,theBoardofDirectorsofMailUpresolvedtogivepartialexecutiontothedelegationunderArt.2443Civil Code, conferred by the Extraordinary Shareholders’ Meeting of 23 December 2015, by increasing the sharecapital,paidandindivisible,foramaximumamountofEuro6,264,000(includingpremium),byissuingamaximumof2,610,000 ordinary shares with no indication of nominal value expressed. Newly-issued shares were offered forsubscriptionunderprivateplacementthroughanacceleratedbookbuildingprocedureandtheywereissuedwiththeexclusion of the option right under art. 2441, paragraph 5, Civil Code, as to be reserved exclusively to “qualifiedinvestors”and“institutionalinvestors”.ThetransactionaimstohelpstrengthentheequityandfinancialstructureofMailUp-alsocontributingtotheexpansionofthestockmarketcapitalizationforfutureobjectivesofexpansionofthecompany-andtosupporttherelatedgrowthanddevelopment,alsothroughexternal linesorthroughmergersandacquisitions (falling within the company’s business plan), as well as to increase the float with the consequentexpansionanddiversificationoftheequitybasefacilitatingtheexchangeofsecurities.On 26 July 2017 was the successful completion of the capital increase subscription implemented by means ofaccelerated bookbuilding procedure for 2,610,000 new ordinary shares with no indication of the nominal valueexpressed, corresponding to approximately 23% of the pre-money share capital, for a total of Euro 6,003,000(includingpremium).Demandwas40%higherthantheamountoffered.Newly-issuedshareswereplacedatapricepershareofEuro2.30each.Thetransactionwasregulatedbymeansofdeliveryofsecuritiesandpaymentofthefee(“settlement”) on 28 July 2017. Following the full subscription of newly-issued shares, the share capital ofMailUpaftertheincreasereachedEuro351,640.68,dividedinto14,065,267ordinaryshareswithnoindicationofthenominalvalueexpressed,withafloatofapproximately33%.Inthecontextofthetransaction,MailUphasundertaken90-daylock-up commitments in linewithmarket practices for similar transactions, subject to issues of share reserved forstockoptionplans and/or stock grants. Fidentiis Equities S.V., S.A. operatedas SoleBookrunnerof theacceleratedbookbuilding.Netfinancialposition


Belowisabreakdownoftheconsolidatednetfinancialpositionthatensuesfromacomparisonofliquidfundsasat30June with financial debt contracted with regards to banks and other institutional lenders, in the specific caseFinlombarda,fortheresidualportionofaspecial-rateloan.


NETFINANCIALPOSITION 30/06/2017 31/12/2016 change change% A.Cash (6,240,975) (4,461,219) (1,779,757) 40%B.Othercashequivalents - - -

C.Securitiesheldfortrading - - -D.Liquidity(A)+(B)+(C) (6,240,975) (4,461,219) (1,779,757) 40%

E.Currentfinancialreceivables - - -F.Currentbankpayables 38,006 23,762 14,243 60%

G.Currentportionofnon-currentdebt 1,635,061 1,221,115 413,945 34%H.Othercurrentfinancepayables 8,385 16,750 (8,365) -50%I.Currentfinancialdebt(F)+(G)+(H) 1,681,451 1,261,627 419,824 33%J.Netcurrentfinancialdebt(I)+(E)+(D) (4,559,524) (3,199,592) (1,359,932) 43%K.Non-currentbankpayables 2,595,885 2,246,145 349,740 16%L.Bondsissued - - -

M.Othernon-currentpayables - - -N.Non-currentfinancialdebt(K)+(L)+(M) 2,595,885 2,246,145 349,740 16%

O.Netfinancialdebt(J)+(N) (1,963,639) (953,447) (1,010,192) 106%RecommendationCESR54/B2005

Reference ismade to thesection“OtherCurrentLiabilities”aboveand transactionswith relatedparties for furtherinformationregardingotherpayablesnot includedintheNFPand, inparticular,thenon-costlydebtwithrespecttothesellerofthecontrollingstakeinAgileTelecom,ZoidbergSrl.Milan,27September2017TheChairmanoftheBoardofDirectorsMatteoMonfredini


Appendix1EffectsoftheadoptionoftheIAS/IFRSaccountingstandardsontheConsolidatedIncomeStatementof

comparisonasat30/06/2016

The following is a brief summary of the effects in terms of the consolidated income statement in relation to thecomparisoncolumnasat30June2016followingtheadoptionoftheIAS/IFRSaccountingstandards.MAILUPGROUPCONSOLIDATEDINCOMESTATEMENT Asat30/06/2016

(figuresinEurothousands) Notes ItalianAccountingStandards(*)

FTAadjustments/reclassifications

IAS/IFRSaccountingstandards

Revenues (1) 9,867,857 2,049 9,869,906Otherincome (2) 252,818 13,610 266,428Costsforservices (3) (6,298,465) (3,472) (6,301,936)Payrollcosts (4) (3,297,693) 15,022 (3,282,671)Capitalisationofpayrollcostsfordevelopmentactivities 645,525 645,525Otheroperatingexpenses (88,715) (88,715)EBITDA 1,081,327 27,209 1,108,536Amortisation,depreciationandimpairment (5) (1,077,919) 503,500 (574,419)EBIT 3,408 530,710 534,118Financialincome/(expense) (2) (6,894) (20,364) (27,258)Pre-taxprofit (3,486) 510,345 506,860Incometax (6) (149,837) (222,504) (372,341)Netperiodresult (153,323) 287,841 134,519ofwhichnetresultpertainingtominorities 9,015 9,015NetGroupresult (162,338) 287,841 125,504

Notes:(1)deferredincomeadjustmentontextmessaging;(2)reclassificationformerextraordinaryincome;(3)zeroingdeferredexpensesPayPerClickandM&Acostscapitalised;(4)zeroingdeferredexpensescommissionsandTFRseveranceadjustment(IAS19);(5)adjustmentdepreciationofassetsandconsolidationdifference;(6)allocationprepaidtaxesias.Milan,27/09/2017TheChairmanoftheBoDMatteoMonfredini


IndependentAuditors’Reportontheconsolidatedfinancialstatementsasat30/06/2017

Pagina135|Bilancioconsolidatoeseparatoal31/12/2016

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CONSOLIDATED FINANCIAL STATEMENTS AS AT …...2017/10/09 · Page 3 | MailUp Group Consolidated Financial Statements as at 30/06/2017 MailUp SpA Leader in the sending of e-mail and