Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the WIIT first half 2022 results conference call. As a reminder, all participants are in listen only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Alessandro Cozzi, CEO of WIIT. Please go ahead, sir. Good afternoon, and thanks everybody to join in this conference call. This morning the board of directors approved the results of the first half year of 2022. You can follow the presentation with the document I sent, and by the end of the presentation, we are here available to answer all the questions. With me there are Francesco Baroncelli, Head of M&A, and Stefano Pasotto, our CFO, and naturally, Francesca Cocco, our Investor Relations. I start with the highlights from the presentation. You can see page number 1. Revenue growth in sales of 54%, mainly from consolidation of the acquired company last year. I remember that the last quarter of 2021, we acquired in Germany, Boreus and Gecko Group, the name was Release 42, and this is we have a full consolidation of the figures. Very important is the results of the organic growth. With the results, we are naturally very happy for these results because the contribution of WIIT is very, very high. 40% was the organic growth of WIIT itself. The pipeline, the sales pipeline is very, very high. I think it's the better pipeline we have in the last 3 years. We increase a lot of new customer, and the new customer will be increase the opportunity to upselling in the next 2 years. General contribution was high. After I have a specific slide with a breakdown of revenue and EBITDA. The profitability is very, very good. Roughly EUR 20 million EBITDA, EUR 19.7 million, compared with EUR 14 million, + 13%. Thanks to the concentration of our core business, high value core services, and starting the economies of scale achieved in general for the cost cutting of the data center cost of the acquired company. I remember, Mivitec business acquired in Germany with the defined last year EUR 1 million synergy is just in the, it is ongoing. Now we are working hard to obtain all this cost synergy about the ERPTech. ERPTech is the last acquisition in Italy. We closed the acquisition by the end of March, and just in second quarter, we started to obtain the cost synergy. Mainly the result will be the next year, but just in the second half, our expectation is to increase the margin of ERPTech for the cost cutting. EBITDA adjusted was EUR 10 million compared with EUR 7.8 million, +43%. You have to consider that we have more amortization for EUR 2.7 million. So we increase the margin with more amortizing cost related to the CapEx of the last year. Net profit increased a lot, 41%, EUR 9.1 million, despite high cost of interest rate, because in the first half we accounted for all the interest rate about the bond issued last October last year. In the net debt position, we have closed with EUR 159 million, including the EUR 10 million of interest, IFRS 16 part of the rent. We have EUR 4 million of the full acquisition cost of LANSOL and roughly EUR 70 million of CapEx. Dividend payments for EUR 8.1 million and treasury buy back for roughly EUR 5 million. The value of the treasury share in portfolio is approximately EUR 24.5 million if you consider the market value by the end of June. I will jump to page number 3, and you can see the breakdown of revenue and EBITDA. The revenue is higher in Germany than in Italy. This is very good results because our strategy is to increase a lot the foreign revenue. In these figures, naturally, we don't have the positive impact of the last acquisition. We closed by the end of August, early September, the LANSOL Group, because the signing, the closing was last week. We're sure for the last half of the year, more revenue in Germany than the first half. The same result was in terms of EBITDA profitability, is roughly 50/50. Our expectation in Germany is to have better in the second half of the year than the first half, because all the contracts signed in the first half, we started to invoice for the customers the second half of the year. Very important, the recurring revenue, the page number 4. You can see recurring revenue itself is roughly 89.7% of the total revenue, but in general, group level was 76%. This percentage we want to increase in the future because the strategy will be to reduce the revenue with low margin, low value. I give you an example, out of a software sale or consultancy, we have naturally inside the current company a residual part of this business. We want to reduce progressively in the next year and increase the recurring revenue group level at the same level of the WIIT itself. Breakdown of the EBITDA on page 6, I jump. You can see in the slide the breakdown of the single entity. You have to consider that the. In August, we merged all the Italian company, and by the end of the next quarter, we disclose naturally figures which include the merger company. This is the last quarter when we have the single breakdown for Italian market. With margins stable, it's 42%, compared with 41.8%. The second quarter just increased to 44%. Matika margin increased a lot from 30% to 41%. Italian margin increased from 25% to 28% in first half. Adelante decreased because it's different the mix of the revenue. We have a lot of hardware sales in the first half of the year. We want to recover a little bit in the second half. myLoc margin decreased mainly for the cost of energy from 48% to 47%. I want to remember that we have just signed with the local Italian energy a future price of energy reduced 70% by January 2024. We have fixed the price for this year and the next 2 to 3 years. In 2 years we want to reduce the cost and we are to recover to the old margin. Mivitec increased from 21.8% to 28%. Boreus and Gecko is roughly stable. EBITDA margin in the first quarter we entered the group is low, is below what we expected because when we bought this company we paid low price for the company because the profitability was poor. We are just starting to obtain cost synergy. We are very happy in general for this acquisition because it reinforce our skill sets. At the moment all the clients remain in wait. We don't have quits of the clients. We have just activate roughly EUR 1.2 million in the value of cost cutting. In the next year, we have the full results of these synergies. Okay. Net debt, a short figure on page 8, increase mainly for the strong CapEx. I will just remind that for this fiscal year, 2022, we have EUR 12 million of extraordinary CapEx related to the building of the new two data centers, one in Düsseldorf and the second one in Milan. For 2023, we expectation to return to our historical trend in terms of CapEx in the range of EUR 20 million-EUR 22 million total year. With the same like for like revenue, naturally, if you have additional M&A, could be little change. You know, like for like, our expectation is to reduce and return to our historical values. The net debt is impacted for treasury share, my bad, for roughly EUR 5 million. The payment of the last part residual of Matika for EUR 3.5 million, that just merged in August. I remember the value of treasury share that we can use for paying a future M&A is roughly EUR 34.5 million. Okay. I think this is all. We are ready to conclude this session. This is the Chorus Call operator. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. We will pause for a moment as callers join the queue. The first question is from Giorgio Tavolini of Intermonte. Please go ahead. Hi. Good evening. Thanks for taking my questions. I was wondering if you can double-check the organic growth for the parent company in the second quarter. Since in the first half it was 14%, I was wondering if it's correct 19% in the second quarter. That is a double-digit growth quite impressive. The second point is on the phase out of revenues related to low margin businesses. Should we expect EUR 5 million- EUR 10 million revenues out from let's say the EUR 120 million turnover expectations for this year, but still keeping let's say EUR 42 million for this year in terms of EBITDA? The very last question is on the profitability, if you can elaborate more on why the profitability for all the German subsidiaries is declining. I guess it's mainly due to the fact that is the energy cost and inflation, but if you have additional color, that would be great. Thank you. Thanks, Giorgio. About organic growth, it's correct, your assumption. It's 19% in the second quarter, but you have to consider that in the second quarter we are counting the inflation clause because we charge the customer, we have inflation clause unfortunately in our contract, and we are a little impact in the second quarter because we are counting the full half year in terms of inflation. The real organic growth is roughly 18% in the second quarter. 19% includes the revenue about the inflation clause. The assumption about reduce the low value services is our strategy, but it is not a one-shot activity. We need 2 or 3 years to reduce totally this part of revenue. You have to consider we can cut EUR 3 million or EUR 4 million yearly, every years. For the 2023, we want to reduce EUR 3 million and another EUR 4 million in 2024 because we can't force the client in a very, very fast change the model. These customers are used to the old model, by the hardware and by the service remotely. We want to convince the customer to join the cloud model, but is in software. We can push very hard the customer. We need 2 or 3 years. Okay. Yes. EBITDA margin is absolutely confirmed in terms of consensus for the full year. Yes. We can keep roughly the EUR 42 million expectations we have for the current year. Yes. We can fine-tune the revenues, maybe EUR 3 million lower this year and EUR 4 million next year. Okay. Yes. It's correct. Okay, thank you. About the first question about the energy. In general, the profitability in Germany is only impacted by the increase of the cost of energy. We increase the revenue and increase the cost, and the profitability decrease mainly for the cost of energy. We don't have, at the moment, fortunately, other issue about inflation, about the cost of employees. We have a little requested increase, but is just included in our forecasted budget. We don't have, fortunately, unexpected costs related to inflation, only the energy. Okay. Thank you, Alessandro. The next question is from Michele Baldelli of BNP Paribas. Please go ahead. Hi, good afternoon to everybody. I have a couple of questions. The first one to an item that is linked also to the last question. I saw that the personnel costs jumped to the level of roughly 26% in H1 of sales in H1 2022. That is well above the historical range. I was wondering, because we are speaking a lot about the electricity cost that as you have pointed out, also they are increasing in terms of contribution on sales. Just to give an as an update, if there is any kind of, let's say, efficiency to be done after the integration of this company in terms of personal costs to sustain profitability. The other question relates to a curiosity about EUR 10 million of cash-in from the sale of certain assets, if you can provide detail of what did you sell? Thank you. Okay, I started to answer the second question. The EUR 10 million cash-in is the release of an investment in liquid assets to increase liquidity, right? This EUR 10 million was invested in the liquidity fund for 2 years, and we released to use these funds to finance the LANSOL acquisition. It was just already part of the net debt? Yes. Yes. Yes. Yes. Okay. Okay. Yes. Thank you. Okay, thank you. Okay, thank you. The request about the cost of employees increase mainly for M&A. The last part of increase of the cost of the salary of the employees is related to the different perimeter because consider that in November last year, we closed the acquisition of Gecko and Boreus, we increased 140 people. In March, we increased 45 people more for ERPTech. It's mainly related to the change of the perimeter of the company. Naturally, we have a little increase there in inflation. In general, we increase the salary organically, but it's not material. It's roughly 4%-5% yearly increase of the cost of the salary. The last part is related to the different perimeter. Okay, thank you. Consider that the first year when we close acquisition, we don't have immediately the synergy. We need one year to obtain the synergy. The percentage of the salary increase the first year, but the second year, we can reduce a little bit with efficiency the people. I give you an example. When we bought Mivitec is working 20 person, and now it's just 15. Okay, we return to the same efficiency of the myLoc. The first year when we aggregate a new company, naturally increases a bit the average of the cost of the people. Clear. Thank you. The next question is from Domenico Ghilotti of Equita. Please go ahead. Hello. My first question is on the M&A and organic contribution. You give a precise contribution from Mivitec, from Release 42, the two companies, and ERPTech. The total amount is something like EUR 18.9 million in the first half, and the total growth is 19.2%. To come out with your organic growth, it means that you are already, say, accounting for some phasing, for some declining low margin sales. Is it correct? How can they come up with the organic contribution and the M&A? The second is on the synergies. Can you remind us the relevant synergies that you are expecting? I mean, as a matter of bridge on 2023. There are several investments that you are doing, and if you can give us an update on the current development on the CapEx side, and then on the expected contribution in terms of synergies. Last question is on the pipeline of potential new contracts. You are very excited about the level of negotiations. Do you see any risk of postponement or reluctance to close the negotiation or maybe just to take some time because of the uncertainty in going to second half? Or how do you see the clients saying relaxed about this? Okay. I'll start with answering the last question about pipeline. I don't see at the moment a postponement of the deal. You have to consider always we have 6 months from the signing the contract to start the billing, because we have the project of migration, test and other. All the pipeline, so I told you, is impact the revenue by the first or the second quarter next year. We don't have. Yeah. Unfortunately, impact in this year. No. In general, we are. That's why I was asking, because maybe in the meantime there is a long process that can take a bit longer if the client is concerned about the situation. That's why I was trying to understand if there is any sense of this kind of possible postponement. Well, the results of the second half of 2022 are related to the booking of the last year and the booking of the first quarter of this year. Mm-hmm. Okay? At the moment, the visibility we have for the second half is very, very high. Mm-hmm. Naturally, in case of close from the pipeline, we have at the moment two big fish with a name, and so the big fish is material for it. In case of positive end of the deal, naturally, we have a good visibility for 2023. At the moment we have a very close to obtain the number 2022, and we're working to have a good visibility in the 2022. We are with the. This year we have more consistency. I don't see, to be honest, at the moment a delay in the negotiation. September, I see a very good interest for the customer to analyze our offering. I hope in the next 1 month or 2 months we can understand if we win or no the deal. The second request about synergy. Allora, I need to chop a little bit the situation. Allora, we forecasted EUR 3 million of synergy about ERPTech. EUR 3 million is the yearly value of the cost synergy. At the moment we just obtain EUR 1.2 million-EUR 1.3 million yearly value, and we want to achieve by the end of this year the full EUR 3 million of cost synergy. This means next year we can improve margin for EUR 3 million. At the moment we are in the half of the river, okay? The Mivitec synergy was 1.5 million EUR. We have just EUR 1 million obtained in this fiscal year, and we have residual EUR 500,000 million to achieve for the next year. In sum, we identify EUR 1 million synergy, but in this case the strategy will be to migrate the data center Frankfurt to Düsseldorf by the end of January 2024, because we have at the moment in Frankfurt lower cost of energy than in Düsseldorf. But we want to take the benefit for the next year to stay in Frankfurt a full year. We project to plan the migration after the summer. Beginning 2024, we start to provide services from our data center, and we will obtain EUR 1 million of cost synergy by the start of 2024. The total synergy was EUR 4.5 million to obtain the next 18 months. The first question, we don't understand correctly the question. Yeah. Possibly, if you repeat the first question about the organic growth and the. No, I mean, you are very precise in detailing the contribution of M&A. If I sum the contribution of Mivitec, the Germans of Boreus and Gecko and ERPTech, I reach EUR 18.9 million contribution from M&A. Now, the increase in sales in the first half compared to last year is the reporting number of EUR 19.2 million, so it's very, very close to the M&A contribution. I'm trying to understand if you are already experiencing the phase out of low value sales, or there is any other element that I should take into account. Because the M&A contribution is very, very close to the total increase in sales. I want to check the figures, but because you have to consider that last year we have just including our figures in. We consolidate Mivitec i n September. From the second half. Yes, it was not in the first half. If I compare half, we can check and discuss later. Okay. I was comparing first half with first half of last year and the M&A contribution should be EUR 18.9 million. Probably we have a little reduced the revenue of low value services. Because I confirm that with its own growth, yes, 14% in the first half. Probably there are. I didn't address that page. Gecko and Boreus, how is it? EUR 15 million. Growth. The last year, there wasn't in the half-year report. Not included. Okay. We have to check the figures and we can send you and we will issue the data. Okay. We don't have here the figures about the first half of Gecko and Boreus. Because the. We can discuss later. Maybe just a follow-up on the personnel. The EUR 7.5 million, that was quite up compared to the first quarter due to ERPTech. You were mentioning that this is. Yes. This is the potential of, say, run rate before any synergies, restructuring costs, which you can try to. Correct. It's mainly ERPTech. Consider that when we bought the company, it had EUR 4.5 million of cost of employees. Okay. Very high, if you compare the recurring revenue of ERPTech is EUR 6 million. ERPTech was a company not efficient because the problem is the size. Now, in this business, when you start the business, you need to have the availability of the people 24 hours, and you have high cost to guarantee your services. When the size, like we, is bigger, you can reduce the percentage of the cost of salary. The problem is when you are smaller, you are less efficient than a big player. For this reason, ERPTech increased a little bit. In our case, we are very happy because it's not easy to find these certified skills, particularly in SAP environment, and we enhanced a lot our skills. The customer ERPTech, and not only, the customer with the tools often say that we can use these skills to help our customers in the digital transformation project. Mm-hmm. Okay, thank you. In general, it is the size. Now, in this business, when you are smaller, you need to have more costly employees to guarantee 7 days weekly and 24 hours. Of course, the operations are not used inefficiently like a bigger organization. Mm-hmm. Thanks. The next question is from Davide Longo of TP ICAP. Please go ahead. Mr. Longo, your line is open. Hello. Do you hear me? Okay. We know that a contract has been signed to keep energy costs down, but still they have doubled in Germany. How will your contract manage to keep energy costs down? If you could give us some detail about the contract in general. The second one is about personnel costs that have risen a lot. I see an incidence that is almost doubled, and my question is, how do you expect them to fall in relation to sales at the end of 2022? Because I found the publication very positive if I apply the same marginality of cost of personnel. Okay, about personnel cost, we increase the personnel cost because changes the perimeter of the group. Okay? We acquire a provider with skills with the size smaller than WIIT. For this reason, the personnel cost is increased. About the cost of energy, in Germany, we have 2x the cost compared with Austria. For Q80 we have a fixed price, which we don't have peak or in general risk about additional increase of the energy. Our competitor in Germany, to be honest, have this problem. We are happy for this because at the moment we are trying to steal some customer of our competitor. They don't have the fixed price, and at the moment the competitor asks the customer to increase the monthly fees to cover the higher cost of the energy. The moment is roughly at EUR 0.20 per kWh, and we have just agreed with the local provider to return to EUR 0.12 per kWh starting from 2024. As a reminder, if you wish to register for a question, please press star and one on your telephone. For any further questions, please press star and one on your telephone. Mr. Cozzi, there are no more questions registered at this time. Okay, thanks a lot. Only to close, I want to reinforce the message that we are working a lot about M&A remain our focus. DACH region is the location where we want to continue to scouting and to analyze some opportunity in the M&A. We hope if it possible to have additional targets acquired in the next 3-4 months. We are working hard. At the moment the pipeline, not only SaaS, but again M&A too is a good opportunity for our group. Thanks a lot, everybody, and see you soon for the next results in November for the first quarter results.