Morning everyone, and thank you for joining us for today's H1 2023 results presentation. Before we continue, let me remind that today's webinar is being recorded, and after the call, the podcast will be posted on the Esprinet website in the investor section, together with the presentation. All cameras and microphones are currently disabled. During the Q&A session, we will proceed to reactivate the microphone. Please note again that this presentation contains a forward-looking statement, so I would like to draw your attention to the regulation note on page two, which provides all the details. I'm Giulia Perfetti, Investor Relations and Sustainability Manager of Esprinet, and as always, with me is Alessandro Cattani, CEO of Esprinet. I will now turn the call over to Alessandro to present and comment with you the H1 2023 results. Alessandro? Thanks, Giulia. Hi, everybody, and welcome to this presentation. We are here together for the H1 2023 results. So, let's start with some highlights on the evolution of our strategy. As you probably remember, the group strategy speaks about the progressive shift of our company towards high value-added business lines. So specifically, more specifically, solutions and services and some niche areas in the devices business. And the execution of this strategy once again boosted the gross profit margins, which is the first indicator that we are tracking as a gauge of the performance of this strategy. The solutions and services, which accounted for 23% of our total sales in H1, are now representing roughly 62% of our total profitability. What's more interesting is the sustained gross profit margin evolution. Gross profit grew 19 basis point sequentially against the Q1 2023, and 26 basis point against the 5.27% of H1 2022, up to 5.53%. We have solutions once again as the business line that is generating the biggest amount of EBIT adjusted in absolute value. Worth noting that, with sales equal to roughly 40% of the screens sales, so PC and smartphones, so they provide more than twice the profitability of this category. In terms of customer segments, the commercial area, the business customer segment, is now representing 69% of our total sales, against the 63% in 2022 and 59% in 2021. So we are gradually reducing the weight of the retailers, which represent the channel with the greatest pressure on discounts. Particular focus has been placed recently on our financial structure, and we are pleased to see a strong progress in the inventory level reduction. We have progressed once more in the inventory reduction process that began last year, and our working capital as of end of June 2023 went down in the quarter to 29 days, as cash cycle is not where we historically were and where we wanna go back to well below 20 days, but we're getting closer to our group targets. The actions to contain the level of net invested capital, and specifically working capital, were effective and we were seeing our net financial position down to EUR 207 million against EUR 257 million, roughly, as of last year this time, and EUR 341 million as of March. So more than roughly 140 million euros of working capital, well, of net financial position improvement, in the quarter sequentially. Okay, now, if we move to the sales evolution, we recorded a solid demand for solution and services in the market, driven by well, the acceleration of the infrastructure upgrade acceleration. And unfortunately, it's only partially offset the decline in the overall PC ecosystem, which is seriously down. As you can see by product category, the market in screens and in devices is down 7%-8%, against the growth of 16% in solution and services. We lost a share here as the result of a gradual reduction of the product and customer combination that we believe are structurally with inadequate return on capital employed. We have areas where return on capital employed is not well above the weighted average cost of capital, as we expect, but that is mostly linked to this spike in inventory, which we are gradually reducing. There's, on the other side, a bunch of the combinations of products and customers, where we think that it will be very hard, if not possible at all, to achieve levels of return on capital employed that we consider adequate. Therefore, we have progressively, in this last three quarters, shared the businesses with the lowest margin. Not surprisingly, we have a significant loss of share in the retailer and e-tailer business, which was down in the half by 27% against the market, which was down by 9%. It's mostly in the screens business, which was down 21% as a product category, and partially in the devices business, where we suffered, especially in TVs, especially in Italy, against a very strong 2022, driven by incentives by the Italian government, for the switch off of the digital TVs to new standards. It's mostly the retailer and e-tailer business, where we think that it's harder to achieve the right kind of structural return on capital employed. There are areas where this is possible, not so much because of high profitability, rather because of good working capital. Some of them are not there yet, but we think they can go there. But others, we do believe are not structurally profitable enough, or well, with structural return on capital employed high enough to justify investments in that area. So that's for the sales evolution. If we move to the profitability, well, the gross profit margin growth helped to offset the part of the decline in sales, but not—it was not enough. Gross profit was down 8% compared to first half last year, against sales, which were down significantly more. But that's because the percentage, the gross profit margin, as I said, grew from 5.27%-5.53%, but not enough to offset this decline. EBITDA adjusted suffered consequently. Part of it is the result of this decline in the gross profit in absolute terms, driven by the reduction in volume. So, we also experienced more than 6% inflation growth in our SG&A, driven by the investments that we have done to grow, especially in the solution business. Not offset enough by the reduction that we are having in the cost structure related to the screens and devices. Cash conversion cycle, the moving average of the last four quarters is up to the 31 days, one day less compared to Q1 2023, and 14 days compared to last year. But if we look at the Q2 alone numbers, are in clear improvement, 29 days, 12 days less than Q1 this year, and two days less than Q2 last year. Net financial position is -EUR 407 million. Sharp improvement against the March this year, where it was a negative EUR 441 million. A return on capital employed at 8%, compared to 12.9% last year, driven mostly by the average net invested capital. If we look at the following slide, we can see the five pillars. So we have reported since few quarters our business split into five lines of businesses. Screens, devices, and own brands could be dubbed the volume business, traded under the Esprinet brand. Solutions and services are the added value business, trading under the V-Valley brand. The EBITDA margin was down 43 basis points, mostly driven by up because of the growth of the gross profit margin, but down because of the higher incidence of SG&A on sales because of lower volumes. But if we look at the EBITDA margin, we can see that the solutions and services, which represent roughly 20% of our total revenues in H1, with 3.52% EBITDA margin, contributed to roughly 60% of the overall profitability of the group. Whilst the rest of the business ran at 65 basis points of EBITDA margin, not so much because of the reduction of the gross profit, which, as a matter of fact, grew, but But because of the reduction because of the lowest contribution deriving from the lowest lower level of revenues against slightly growing SG&A, which therefore in as a percentage on revenues. But all in all, the strategy is clearer and clearer, even even in a tough half, as this half has been. Solutions are providing a healthy amount of profitability with 3.5% EBITDA margin, which is a number that clearly shows the way of where we want to be in the future with our company, more and more in these higher margin businesses, and less and less in the other area, unless the other area is able to provide really attractive return on capital employed because of lower of lower working capital absorption. So let's have a quick look at the P&L, P&L summary. 5% growth in SG&A, so the weight of this G&A on revenues grew by roughly roughly 70 basis points, and that's explaining the reduction of the EBITDA margin on the other side, partially offsetted by the growth in the gross profit margin. We are experiencing operating costs, which are growing mostly as the result of inflation, and a lot of this is the result of inflation linked to the adjustment of national collective bargaining agreements, both in Italy as well as in Spain, made, say, December last year, and that has driven an increase of personnel costs during the year. There's been also new hiring for people involved in projects into the solution business and the impact of Bludis acquisition. The interest expenses, well, IFRS 16 is stable. We had a better performance than last year in foreign exchange. There's a sharp increase in interest cost. That's the result of the sharp increase in the interest rates by the European Central Bank on one side. Last year, we were running with a Euribor that could be said roughly zero, as long as in most of the cases we had a floor of zero on our debt. This year we are already running well above 3%, so a sharp increase in that range, and on top of that, we have been experiencing a quite significant amount of higher average working capital absorption, hence of average net financial position. Tax rates essentially unchanged. We announced before summer that we had reached a final agreement with Italian tax authorities, settling the VAT claims in relation to tax periods of 2013 to 2017. It's a total of EUR 33.3 million, of which 26.4 in taxes and penalties, and 6.9 in interest. For the sake of clarity, we are reporting them here as a separate line to reconcile with the as-reported net income. I refer to previous calls for all the details of this transaction. I just remember that this EUR 33.3 million will be paid in five years equal installments in five years. So from a financial standpoint, the impact is roughly EUR 6.5 million per year. And that's for the P&L. If we look at our balance sheet, well, worth noting, first of all, the evolution of the operating net working capital. We have here the evolution since June last year till June this year. You can see as we experienced a sharp increase in operating net working capital since Q1 2022. It went up to EUR 540 million in September last year, down to EUR 260 million, average seasonality, and the period of any given year, up again to EUR 500 million and down to EUR 334 million. So, if you look at this chart, you see that we have been doing quite quite a job over there. I point the attention on the evolution of inventory in absolute terms, apart from the stock turns, number of inventory days. We have shared more than EUR 250 million of inventory since September last year with gross profit margins that went up and not down and that's a noteworthy achievement especially in such a complex environment. We have bought less and we have sold less, so less trade receivables and trade payables. Especially trade payables were affected by the fact that we bought significantly less than what we sold because we were using the excess of inventory. We do expect the trade payables dynamics to get back to normality by the end of the year. So, we have good expectations on net working capital evolution. No particular other relevant indications, so we had a growth in our fixed assets, mostly linked to the acquisitions that we made and some a few million EUR of assets acquired for the automation of part of the Italian one of the Italian warehouses. The rest is working capital, and the rate of use of assets is more or less stable. And the net equity is down, both because of the loss linked to the accounting loss linked to the transaction with the tax authorities, as well as the distribution of EUR 27 million of dividend made in May. And that's for the balance sheet. Working capital, we report, as always, the 4-quarter average. And, you see the deep blue column, which stands for the inventory days, that went up and began its journey downwards, as we hope we'll be able to keep it. There will be, as always, probably in terms of working days of inventory days, a potential spike in Q3 because of the combined effect of lower sales, because of August, and the pile-up of inventory in preparation of the stronger Q4 quarter. But the path is clearly marked. And, if we look at the following slide, where we see the quarter by quarter, we see that DPOs have sort of stabilized the north of 70 days. If we go back to 2018, when we were experiencing very high cash cycles, we have grown structurally our DPOs by roughly 20 days. And we achieved that with the sharply increased gross profit margins. Almost 1 percentage point, 100 bps, of increase of our gross profit margin in these last couple of years. A remarkable achievement, I would say. The inventory, you can see the spike in 2022, and we see a progressive decline. We are way way far from the right level, which should be around 40 days, but we are improving in that area. Also, we had a better performance in terms of DSOs. That's for the working capital metric, which is, of course, affecting significantly our return on capital employed evolution. With the return of our working capital back to the teen area in terms of number of days, and not the 20 or 30 days as we are now, we would expect in the next quarters a bounce back of our return on capital employed, hopefully supported also by a good performance and profitability as well, in the next years. That's for the past, for what happened. Let's see what is happening and what most probably will happen from now on. First, a glimpse on the market. Well, the economic backdrop is not particularly positive. The outlook, as you all know, is uncertain, highly volatile environment. There's been a sharp slowdown, which is here probably to stay due to high inflation, rising interest rates, and stable financial conditions. We have seen the forecast of the European Commission and ECB around GDP growth, which remains fragile at best. Business and consumer confidence is weak, and we're witnessing a cautious approach by companies as well, because they could face high costs, inflation, and reduced access to markets. Consumers are really in trouble, but that's not something new. Those have been the... Culprits of most of the suffering in the market in the IT market recently was the companies have been strong supporters and contributors to the good performance of the areas that represent especially the solutions. What should we look closely to is, well, the recessionary risks and the geopolitical tensions, and nothing new, you know this probably better than us. What about our industry? Short term... Well, short term, the challenging macro environment had a direct impact on the IT market. Companies are getting more and more prudent in information technology purchases, deferring everything that is unnecessary in the short term while keeping long-term strategic projects active. The consumer demand is the one that has been impacted and is impacted the most by high inflation and rising interest rates. Opportunities are still there, and probably even more so. The recovery is forecasted. What has been the news of this last couple of weeks, having had long discussions with the analyst, as well as with our biggest customers and vendors, is that this recovery forecasted for the second half is postponed to H1 next year. Q3 is poised to be a tough quarter for the market, and of course, in terms of sales, and of course, we are a strong, big portion of this market. So the short-term market is more challenging than what we expected, even though Q4 is still perceived as probably a better quarter than Q4 last year in terms of market. However, both the analysts and ourselves remain very confident in long-term growth and projections in the IT sector, and in the capability of the distribution to intercept, to grab larger chunks of these opportunities. In the next three years, everybody agrees on the fact that the digital transformation trend will continue to drive strong growth in IT spending. Apparently, artificial intelligence, which we thought would have had an impact mostly on software, will have an impact on hardware as well, because there's a wave of new software technologies that will need stronger capabilities in terms of processing power. And this will most probably turn into the launch of not only servers and storage, but the clients as well, PCs, printers, smartphones, that will have a higher compute power, therefore driving the need, especially in corporations, but to a certain extent, probably in consumer as well, for an accelerated refresh process of existing technology. So good vibes about the next three years. More muted perception definitely of Q3, and to a certain extent, Q4 as well. That's the reason why we have revised our guidance in the range between EUR 70 million-EUR 80 million. We do expect the second half of this year to be around the numbers of last year in terms of profitability. It potentially a little bit less, depending on the performance of the fourth quarter. So the thing worth noting is that we also expect the first signs of a slowdown in the growth rate of solutions. Solutions grew at a torrid rate for the last two years. It's harder to sustain such a high double-digit growth rate. Analysts are forecasting, and we are witnessing, a reduction in this growth. The performance of the client market, so PCs, smartphones, TVs, consumer electronics, printing, has been especially in the consumer segment, particularly bad recently. We expect that to stay muted, especially in the consumer segment, and probably it could turn into a driver of growth, instead next year. That's the focus. Price increase of the products, which has been here for quite some time and probably will stay a little bit longer, will not compensate for the reduction in unit sales of PCs which have been one of the biggest culprits of the reduction in the volumes in the market. So all in all, this is the summary of what happened and what we see. As a final remarks, we wanna highlight once more our four priorities. Value-added distribution. We are pushing hard on our definitive transformation of our model into a value-added distribution model, focusing more and more on combinations of product customers with higher margins, and on the progressive improvements of the gross profit margins overall of the company. Second point, optimal management working capital. Not only we have to bring back the working capital to the, let's say, steady-state conditions, cash cycle below 20 days, which we deem as the normality. But we are looking at opportunities in lower profitability lines, such as smartphones or PCs only, and I stress once more, only when optimal management working capital levels is structurally achievable. Whenever this will not be achievable, we will trim our presence in that market, and we will trim the cost structure accordingly. New growth opportunities through M&A. We have been particularly active in niche, very high margin M&A deals recently. I just recall the acquisition of Bludis last year, of Lidera, and of Sifar this year. We will keep on looking at the new growth opportunities mostly in the solution and services segments. But whenever there's a good opportunity also in devices, we might give a keen eye on them as well. No longer in Southern Europe only, but the Western European countries as well. We have a number of targets that we have looked into, that we are looking into, and we hope sooner or later to be able to expand our reach, lifting up our capabilities in the especially solution and services segments. And last but not least, the activity aimed at reducing the level of working net capital absorption will be a key driver to bring back our return on capital employed to higher levels. So that's the strategy, and that's what's happening in the market. I thank you, everybody, for the attention. And as always, we are available for our Q&A session. I turn the word back to Giulia. Let me remind that, to ask questions, you should kindly book, your speech. So, the first question comes from Mr. Storer. Please remember to activate your microphone. Okay. Thank you. Good afternoon. My question was about the expected revenues evolution for the second part of the year. You mentioned the EBITDA is stable, but what about revenues? And this taking into account, on the one end, market expectations, which are for flattish or slightly negative market, but also company-specific issues, such as your strategy, which is currently shedding unprofitable business. Which probably already started to show significant signs in the last part of last year, but maybe Q3, not so much yet. And also considering your strong outperformance on solution business in Q4, which could represent another big hurdle to overcome. Thank you. Yeah. Okay, thank you. Well, it's part of the different scenarios that drive profitability between EUR 70 million to EUR 80 million. We are witnessing still a bit of increase in our cost structure, probably in the second half, but not such a big one, because we are stabilizing the cost base, and we are getting closer to have a more comparable year-on-year numbers. And we are expecting a better gross profit margin. So it all boils down in terms of profitability to what will happen on the top line. We do expect a tough Q3 in terms of revenues, not as tough as Q1 or Q2, hopefully. It will really depend a lot on a number of external factors in the volume area, so in, especially in screens. What will be the performance of Apple, for instance, with the launch that they announced today? What's gonna happen with certain retailers on their capability of selling PCs? On Q4, we are more positive. Hopefully Q4, especially because last year, Q4 was particularly challenging. So hopefully, sales could be flattish or even providing some growth. So most probably, second half of this year, we might have either flattish or slightly declining revenues compared to the roughly EUR 2.5 billion sales that we posted in H2 2022. That's In terms of what will come from the market and what will come from us, well, the market will be the market. We commented before. In terms of what's our performance, you are right, we have already dumped quite a significant chunk of the worst sales that we had on board. Well, and again, worst sales in the new vision, we are trying to change a culture in a company that grew up as a, let me say, high volume, low margin business, and we are building a culture of lower volumes with significantly higher margins. To do so, we have to probably change some people, and change the mindset of those that remain. In order to change the mindset of those that remain, we have to convey strong messages, and sometimes we are sort of overshooting, so that some of our people truly understand that they have to fight in changing the terms and conditions in the market, because we will no longer accept something that is not structurally providing good Return on Capital Employed. A lot of this cultural change has happened. A lot of our people have truly understood that we're serious in this journey towards a company that will have, in time, significantly higher EBITDA margins, driven also by a better mix, of course. So I hope we will not need to be so aggressive in dumping certain portions of the business in the future. So all in all, let's say that, I would be pleased to see something around last year, second half sales. That would help us provide numbers, probably on the higher side of the 70-80 range. If the market will be particularly challenging, or if the product mix will not be good enough, if there will be a slow, higher than expected slowdown of the solution market, we might be more towards the center or even below the center of the range, that 70-80, that we have provided. Sorry for the long comment, but just to explain what we have in mind. Another question from Mr. Lucchesi? Please remember to reactivate your microphone. Mr. Lucchesi, I give you the floor. Apparently No. Okay. No. Next question. So a question from Mr. Riboldi. Please reactivate the microphone. Okay. Hello? Mr. Riboldi, please, activate Can you hear me? Okay, now we can hear you. Yes. Okay, because it is probably, it's a little bit complicated, the reactivation of the microphone. For those who didn't check, you have to do Control plus Caps Lock plus M. Usually, I just click on microphone, so it's been a little bit longer than usual. Ciao, Alessandro. Ciao, Luke. Hope to find you well. Good results on working capital, no doubt. The only things which has been a little bit surprise has been the weak performance of the sales, especially on screens. You have done -21%, versus, I think, -7% or -9% of the market. I don't know if you already told something, because I was five to seven minutes later, so I'm going to understand what's the reason of your lower market share in this quarter overall, but especially on screen and a little bit on devices also. Thank you. Yep. Well, yes, we, as I was mentioning before, we are embarking this journey in which we wanna convert midterm the company into a value-added distributor. To do so, we have to change the culture of our company and our people, and so we are really forcing our team to understand that either they convince customers and vendors to let us have either better margins or better working capital, or we will not accept those sales, so we will shed those sales, and we will reduce the cost structure in that area. That's the message that we are aggressively pushing into our team. All that said, we have had a particularly, let's say, challenging performance in Italy on smartphones. Because last year we quit selling Apple to a major customer, and there's been a particularly strong growth in a couple of Chinese brands that we have not been dealing with, which are now under pressure, by the way, and that was one reason in Italy. In Spain, the performance in smartphones was not that bad. The performance was very bad in Spain and to a certain extent in Italy as well on notebooks, mostly in the consumer segment. We are reducing our level of inventory without losing margin, and we have been very clear with a number of our vendors. We will reduce the cost structure of our company, but we are no longer available to play a pure volume game with the risk of having excess of inventory without vendor protection. Some vendors are now giving us a different kind of support with longer payment terms and with better margins, and the message passed by also because some of our competitors followed suit and didn't accept to swallow bad business. Smaller players took over some of those businesses, and that was the main reason. Probably in the second half of this year, the situation in terms of market share should not be that tough, also because there has been quite a big part of the inventory reduction, more than EUR 250 million from the peak have been reduced. So some of these activities have been solved, and a lot of vendors have understood our position, and some of our competitors have taken the opportunity to sort of copy what the market leader was doing and to improve their standards as well. There's always somebody not taking an opportunity and trying to use this as a market share gain, but we think it will not be sustainable long term. But those were the main reasons. Again, we are and this is an important message for me, we are embarking in a journey and transitioning from one kind of company to another one. We are sacrificing short-term market opportunities to change the company into something different that hopefully will be able to deliver better profitability and better margins and therefore, hopefully, better multiples to our investors. That's what we're doing. Thank you, Alessandro. One final question, if I may, a quick one. In the current quarter, the third quarter, even in a negative market environment, do you expect inventory days to be reduced further or not? Probably I would say probably not, this quarter, because we had to bring products on board for the Q4 sales, but the trajectory towards the end of the year is very good. We are pretty positive on that. In absolute terms, in terms of euros, probably more stability than reduction, and then a sharp reduction by the end of the year. We're seeing the stars aligning in the sky and marking the direction. So, that's the priority by the end of the year, and we have done a lot of the work that had to be done, has been done so far. A lot of the discussions with vendors and customers has already been done. A lot of the harsh discussions has been done. A lot of the damage in the short-term relationship has been already taken, and now we are hopefully reaping the results. In Q4, things should really sta bilize eventually. Thank you, Alessandro. Thanks. Thanks to you. Okay, another question comes from Mr. Nagy. Mr. Nagy, I give you the floor. Please, activate your microphone. Okay. Hello, everyone, and good afternoon. Hello. I have just two questions. The first one is on cash conversion cycle. We have seen a slight improvement in the second quarter with cash conversion cycle better in terms of cash conversion days. That was one day better quarter-over-quarter. Just to have an idea on what are your expectation on the indicator across the year, so by the end of the year. The second question is looking ahead of full year 2023, what are your feelings about the start of the next year? So what analysts are forecasting, what industry analysts are forecasting for the beginning of the next year? Thanks. Okay, thanks, Mr. Nagy. We have not given a specific cash conversion cycle target for 2023, just a range of profitability. Nevertheless, we have always, in this last year and half, said that we aim at the cash neutrality, which is achieved between 18-20 days of cash conversion cycle in the quarter, in the single quarter. So that's where we wanna land as an average on the four quarters, and that's the target we're aiming for. In principle, if you look at c ould you please go to slide 11? If you look at this slide, the average DPO, DPOs are now around 72 to 73 days. Hopefully, that could even improve a little bit, because we should kick in the purchases of products more in line with the sales of products, because so far we have had a lot of purchases that have not been done because we were using what we had already in stock. So perhaps there's a little bit of opportunity here. At the end of the quarter, of Q4 especially, we typically have a little bit more of retail sales, which we sell to factoring, so probably the 48 days of DSOs could be a little bit better. But what's more important, on a steady state condition, these 54 days of inventory should be something around the 40, 40+. If you take around 10 days of inventory days saving, and two or three days between better DSOs and better DPOs, you should have those 13-14 days of cash cycle improvement that eventually will drive something between, let's say, 19 to 14-15 days of average cash cycle. That's what we aim for, so no specific target for Q4, but generally speaking, that's where we are looking at. If you look at 2019 up to 2022 first quarter, you see that, with the exception of Q1 2020 and 2021, on average, we were in that range of 14, 15, 16 days, and that's where we have to be. When you have inventory days around 40 days, that's where you stand, so that's where we aim for. Then end year figures normally are negative, and I hope they will be negative cash cycle in 2023 as well, because of the reduction of inventory days, but that's not a significant metric for the whole of the year. That's for the cash conversion cycle. 2024, well, analysts do expect a flattish Q4 2023. The previous forecast were of growth in Q4, so perhaps there might be some growth in Q4. We don't know, but they have revised the view to flattish, and they and us expect a Q1 for multiple reasons. And one of them is the fact that Q1 this year was very, very weak to be back on a growth trajectory. Then within this, probably screens and devices should be back into positive territory. Infrastructures or solutions might go down to high, sorry, low single-digit growth, or perhaps even flattish or slight decline because because of the strong growth that we had for more than two years in this area. So lots of the acceleration has been has been done. But again, then we we have as I said before, artificial intelligence and the constant transformation of the business models of companies weighted on on on services and digitalization that will reignite growth in this segment as well. So that's where we see the market. Very clear. Thanks. You're welcome. Other questions? Thank you. Okay. There are no more questions, so we can end the call. Thank you for participating, and of course, we remain at your disposal. Thanks, everybody, and have a nice day. Thanks again, and see you next time. Bye-bye.