Good afternoon. This is the Chorus Call Conference operator. Welcome, and thank you for joining the WIIT H1 2023 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. Please go ahead, sir. Good afternoon, everybody, and thanks for joining this conference call. With me there are connected, Sales Director, group level, Enrico Rampin and Pasotto, our CFO. The board of directors this morning approved the results of the H1, 2023. You can follow the presentation with the file I sent just this morning. I start with the highlights, and after you can follow with the presentation. Highlights, we are very happy for the results of this H1 because the revenue growth, personal growth 18%, thanks to organic growth, thanks to the contract extensions, and particularly for the running of the customer, of the contract signed the last quarter of last year. We have already the further revenue from the signing the contract when you start to, to provide the services. We have, naturally, a positive contribute from the acquisition we closed last year in October, around Song Group and the last one, Global Access, in January 2023. Mainly this result is, is driven by organic growth, very, very strongly in Italy. You can follow now revenue growth 18% from EUR 54 million to EUR 64 million. The EBITDA growth pro- proportional more than the revenue for the scalable of our model business. EBITDA growth from EUR 19.7 million to EUR 24.3 million, and EBITDA margin, group level, going up to 37.9%. It's totally in line of our expectation because we, we started to obtain the cost synergy of all the company acquired, integrate in Italy, and the more high value of the contract signed in the last year. EBIT adjusted growth 29%, from EUR 10.3 million to EUR 13 million, growth more faster than the EBITDA. EBIT margin, group level, was 20.9%, net profit growth 8.3% from EUR 6.1 million to EUR 6.7 million. The growth a little slower for the more interest rate and then tax rate. The net debt closed by the end of June, EUR 151 million, compared with EUR 140 million last year. We have to consider in this period we have a strongly buyback and payment of dividends and CapEx. You can follow now, you can jump to the page number three, breakdown of revenue and EBITDA. Italy achieved EUR 28.6 million, 44% of the group revenues, and Germany, EUR 35.6 million, 55% of the group revenues. In terms of profitability, EBITDA, Italy was very, very strongly in this H1, EUR 12.3 millions, and with EBITDA margin of 43%. This is we are very happy because that means we complete integration of ERPTech, the company acquired in 1st April last year, and when at the moment of acquisition, the company, ERPTech, was running with roughly 10% EBITDA, and now is in line with the Italy, with the level. We are very, very success in terms of integration of this company. In Germany, we achieved EUR 12 million of EBITDA, 49% of the group level. EBITDA margin was little, little lower, 33.8%, for two reasons: cost energy impact. For these years, we have 2 point more cost in, for the cost energy, we will recover the 2 points next year with the reduction of the cost energy and for the more generalistic business we are at the moment doing in Germany. Recurring revenue, page 4, we increase a lot, this part. Group level, we have at the moment 85% of recurring revenue. In Italy, we have 82%. In Germany, we are just running over 90% of recurring revenue. One-off is 18% in Italy, 15% group level. This is slide number, page 5. We have the specific of our organic growth. In Italy, we growth totally 8.5%, but if we analyze the core revenues, we growth 19.7%, because we are continuing to clean the revenue with low margin, like hardware and software sales and consultancy business. As a result of this strategy, we increase a lot our core business in cloud services. 19% is a very, very good results. In Germany, totally we growth organically 6.4%. In this case, the same, increased the core revenues for 7.6%. Our expectation is for the last, last part of the year, we continue to grow organically because after I hand up to Rampin to give a picture, more color about the sales perspective, but the sales pipeline is very, very strongly, despite the good, very closing in the H1, we have a very, very good pipeline for the second part of the year. Our expectation is to continue to grow organically, strongly in the next, the next quarter. EBITDA adjusted, the concentration of cloud services, optimization of process, and reducing cost about the company acquired, push up the EBITDA margin. In Italy, we close the H1 with 43% EBITDA margin compared with 37.5%. This is actually our strategy. All the company acquired use more intensely our data centers, our facilities, and start to sell high value services. We are transforming the more journalistic, journalistic contract of the company acquired in the premium cloud service with. That means more value and more margin. Germany is roughly stable, little increase, 33.8%. In general, in Germany, I just anticipate we have an impact of the increase, increased cost energy. Mainly, this is the, this is the main issue. The EBIT increase, page number 7, 29%, strong, from EUR 10.3 million to EUR 13.4 million, EBIT margin is 20.9%. Net profit increase 8%, EUR 7.7 million versus EUR 6.1 million. All these results is totally in line with our budget and our expectation. The view we have for the H2 of, of the year, we have very, very good visibility in terms of revenue, thanks to the long-term contract signed and the, the good situation in our sales pipeline. At the moment, we are very, very in line with the expectation of the market for the full year results. Net debt, page number 8, EUR 151 million net of treasury share, compared with EUR 140 end of December. Strong operating cash flow for in the, this period, EUR 22 million. We have a sale of the treasury share in June for EUR 6.7 million, acquisition of Global Access for EUR 7.7 million is the final price of investment in ERPTech, and buyback treasury share for EUR 12 million. Dividend payments from EUR 7.8 million. At the moment, we have very insured the debt because our large part of our debt is our bond. We pay a fixed rate for the next 4 years for 2.37%. We have only one bond with a residual value of EUR 18 million, with a variable cost of interest. The last part of the debt is with a fixed rate. Well, in general, we are very happy for the results, and the organic load, we have a lot of new logo. This is very important because it means for the next quarters, increase the possibility to upselling, because we increase in the number of client. We are expanding a new sector, like GDO, like pharma, and we continue to grow our market share in the professional services. Luxury remain one important segment, but at the moment, we are expanding our business in a new segment, and we find a good space to expand our, our, our business. We are ready for a Q&A session. Actually, we are, with me, we are, there are Stefano and Enrico for sales answers. Thanks. Excuse me, this is the Chorus Call conference operator. We will now begin the question and answer session. Anyone who wishes to ask question may press star and one on the touch-tone 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. The first question is from Giorgio Tavolini of Intermonte. Please go ahead, sir. Hi, good evening, thanks for taking my questions. I was wondering what confidence you have on keeping such a high level of margins in Italy moving forward. I mean, if it's fair to imagine this 45% as an exit speed for this year, or we should speak at 40%, probably, 40% area, for 2024? Assuming, let's say, 2, 3 percentage point recovery, as you were mentioning, recovery of the cost of energy in Germany, we can think about 39. Between the 39 and 40% could be a reasonable level of profitability for next year. The second is on, the second question is on the M&A. You, in the press release, you, you're saying you are scouting for new opportunities in Central Europe. I was wondering what timing should we expect some announcement, or, I mean, what kind of opportunities and in which countries you are looking, the potential target? Thank you. Giorgio, I confirm that about the margin, forecast margin Italy, I think we can forecast to stay this range 44%-45%, because these results is the results of mainly with the cost synergy, that means the lever, this lever costs remain the same for the next year. We think in general, in Italy, we can sure predict that we stay in this 44%-45%. In Germany, the second question about the recovery margin of energy. At the moment, Germany is running 33.8. If you recover 2 points, that means that we stay in the range from 35%-36%, not 38. This is our vision. Naturally, in the midterm, when we start to sell our high value service in Germany, the target will be 40. With the actual model business, we can recover 2 points for the cost energy, and we remain in this level. In the midterm, that means 2, 3 years, we can increase, we want to increase, naturally, the beta margin in Germany. About the third question, about M&A, we are looking in Central Europe, where discussion is ongoing. Is a very, very preliminary phase. I think, by the end of the summer, we can decide if we continue, we start with the diligence or no. At the moment, we are very, very preliminary phase, but target we are looking, we are talking, is very, very interesting because it's medium size, that means EUR 20 million, roughly EUR 20 million in more revenue. Data center provider with a 3, 4 data center. At the moment, it's very, it's too early to discuss. After this summer, we can have a more update if we continue the negotiation or nothing. At the moment, we have 2 target, one in the Swiss, in the German corner of Switzerland, is very interesting, and the other one in Germany. This is the location we are, at the moment, discovering. The next question is from Domenico Ghilotti of Equita. Please go ahead, sir. A few questions. The first is an update on your commercial efforts in Germany to improve your business model and so to be able to upsell. Second question is on working capital. I saw a decline in receivables, up in payables. I wonder if you have been doing more specific actions, such as factoring or if it is really more sustainable? The third is a question on medium to long term. We have seen that SAP is pushing a lot on its cloud platform, and is adding on top artificial intelligence features. What are the implication in y- in your view, on this kind of proposal, if any? Okay. Enrico, do you want to explain about our strategy in terms of sales? Because Enrico is coming back from Germany last Friday. He can shortly update you. Absolutely. Thanks, thanks, everyone. Our activities in Germany are pushing a lot on new different topics. As, as we already shared, that we changed the sales organization, and we open officially the new branch in the north part, will be based in Hamburg. Starting yesterday, the new sales manager coming from a Vodafone Cloud joined the company. We are expanding our footprint, so we are now starting the onboarding process of Thomas into the organization. In general, we are working with the sales and the solution architect on the new business on the, on the premium premium sales. My last session in Hamburg last week, three days were, was, with a specific focus on two deals that we have open on the table on the premium sales. We, we are working both, in collaboration with the sale, with Italian and German, solution architect. We were three of Italians and six persons there. The commercial effort is, is of course, part of the game that, and the price we have to pay to introduce, this footprint of services. Very good feedback and vibes coming from the south sales manager, the person that is the new sales manager, heading the south of Germany business, that is the managing director of Global Access, the company we acquired. He's a very young and talented person, very focused on sales. I've, I had a very good feeling from him, because he arrived prepared with ideas and with vision on what we have to do. For sure, the commercial effort will be high, for my, for me, for myself, of course, but also for the Italian part, because creating the same mindset will mean in the next 12 months to work a lot together. We have breakout session also in vehicle. This week, we will have two, two other sessions, so the collaboration has already started. As you know, of course, Germany continues the development of the organic growth on the existing footprint of services, so we are not calling off any kind of offering that is currently existing, but we are working a lot on as an extra effort to put this mindset in the premium services onside. The other part we are doing is the creation of the channel in Germany, so Lansol, the company we acquired. We had several meetings in July with the head of the Italian channel, we had several session in Germany, in Dusseldorf and in Mannheim, where is based Lansol. In order to create the same, to align the footprint of services to Germany, to the, the more expanded footprint that we currently do have in Italy. Italy is running, just a bit of color in Italy. Italy is running, very good, the improvement also in terms of brand awareness in Italy, is getting a lot of good feedback. As already shared by Alex, the, the good pipeline and the very good results in terms of booking last year, is still confirmed on the pipeline on the, the H1 results. I'm currently involved in these days an important contract closing, in, expectation is for, for the remaining part to have this very good feedback, also. Okay. May I just follow up on, are you, have you decided on, the marketing campaign in Germany, if it will be this year, and what, what size can be? Yes. We, we started developing the marketing strategy. We do not expect to have fully this year, the marketing campaign on Sky or on advertising. The main reason is that we are changing completely the website because last year, we changed completely the website in Italy. We are creating this and expanding this website, including also the German operation. There is an important part of the effort that will put, will be put on the fact that we are using the web also for inbound. We are expanding the Italian capabilities, including some of the feature that have been asked by the colleagues. That means that we do not want to have marketing expenses without having a high visibility in terms of website with a new overall brand. In general, the marketing activities are already planned for anyway, next year. Okay. The second point, Alex, is, working capital. Yes, I answer instead of Sandro. The working capital is good because we kept the same transfer value of the factor as the last quarter. We collect a late from 2 customers in particular, and amount to the suppliers. We increased a little bit the amount because we have about the new CapEx, and we received the invoice at the end of June. It's not overview, but is just a time, timing of shift of the payment. Okay. If I'm not wrong, the, the last point was the, the potential impact of artificial intelligence on, on the services. As you know, artificial intelligence will be definitely a very interesting trend in general. I don't, I don't believe that this will, will reflect in a, in a, an overall impact on your booking, that directly mean as in a direct impact, because these services are more or less a kind of subscription services from Google or from Microsoft. This doesn't mean that there's no indirect effect, meaning that all the clients are starting and developing new feature, new application, that will be, will include artificial intelligence as part of the processes and the way how they engage the clients. That would mean a new application. That would mean definitely new infrastructure, and new technology, and new managed services. The, the impact that we expect, is that, this new, the new, artificial intelligence included into this application, will benefit the clients and will benefit indirectly with. Just an example to, to, to explain a little bit more what is the effect. Microsoft is planning to include a, a feature, coming from artificial intelligence into PowerPoint. The, the program, the application will have the capability just to tell what you want to expect as in terms of presentation, and then the PowerPoint will present, something that is, a kind of draft proposal. Features like that has not a direct effect on the, on the infrastructure, but are a new benefit included into application. This will be included into ERP systems, into e-commerce platform, into help desk system, into CRM functions. The adoption of the platform will have an impact on the new features, and into our revenues. Okay. Very clear. Thanks. The next question is a follow-up, of Giorgio Tavolini of Intermonte. Please go ahead. Hi, sorry, just a follow-up on the German market. I was wondering if you are witnessing any slowdown in from your clients, from your pipeline of clients? I mean, as recorded by Reply in this space, or if it's just a temporary slowdown, what else? Thank you. No, at the moment, the fears about sales in Germany is in line with our budget. We had a little delay in the first quarter, but just in the second quarter, the closing was good. I think at the moment, the target we have in Germany is achievable for, in term of full year results of new booking. We have naturally very, very high percentage of recurrent revenue. In Germany, we have more recurrent revenue than Italy, it's over 90%, so we don't have, we don't see decline in term of revenue or in term of request from the client. Probably the consultative business is more unstable in this moment of recession, but in the cloud in Germany, continue to grow the double digit. We, in the second quarter, we recovery the, the, the booking value from the first quarter. At the moment is over 50% of the, of the, the target we have is just signed strongly. We are, we are in the July, and usually the H2 of the, of the year is more strongly than is strongly than the, the, the H1, no, Enrico? Usually the, the, the, H2 is better than the H1. Yes, but I, I fully agree. I didn't have any, any feedback or feeling, also talking with the clients these days, that there is a potential slowdown. Yes, potentially there could be a kind of delay, but it's depending more on specific situation of each client, not on a general feeling. It's the same in Italy, anyway. Mm-hmm. Fair enough. Thank you. The next question is from Michele Baldelli of BNP Paribas. Please go ahead. Yes, good afternoon to everybody. I have just a quick question about the Tier IV data center in Germany. Can you update on the status, if it is already operational or not? What kind of, let's say, strategy do you have, comparing to the, 10+ data center that you have in Germany? Is it useful to shut down some of the others or just increase the, metric, the business overall? Thank you. Okay. We just obtained the first certification last week. The design certification. There are two different step. The first is the design, we obtained last week, but the facility is just complete, that we are working to obtain the second one, the construction certification by end of September. The data center is just end. We won't use this data center only for the critical apps and not for the traditional business. That it means we don't want to switch off other data center to migrate in our data center. We will use this premium data center to propose the client infrastructure with a high resilience, and when the request of the level of service is very, very high. Because there's no sense to use this high-end data center for the normal or traditional business, no, the cost, operating cost of this data center is 2 times compared to 1 normal data center. We prefer to use this facility in a compound with high rate of services. We just use, for example, we sign in Italy, now the 2 contract that, that just, in this contract is defined that the all the data will be replicate in our Tier IV in Germany. The very, very multinational company appreciate a lot, the possibility to have the data in 2 different countries. We use not only for the German business, but we use this data center to increase the residence, the security for the Italian client. We just signed a free client in Italy, that we, they want to use, our facility in Düsseldorf to have, the, the data replicate in the, in the disaster disaster recovery site in another, in another country. Thank you very much. Next question is from Hugo Mas of Sycomore. Please go ahead. Yes, hello. I would ask a few question, please. The first one is regarding the organic growth, which is difficult to assess because the numbers are quite volatile this recent quarter. Do you confirm to have some seasonality effect on, on the organic growth and in H2, compared to H1, in Italy and in Germany? If you could remind us, what is the sustainable level of organic growth for both geography over the medium term, please? In terms of organic growth, we, we think the market is growing 10% in Italy. We have a very, very good second quarter, 19, probably is higher than what we expect for the next quarter. Generally, we expect organic growth, high single digit, from 8%-10% for the next two, three years. This is very, very prudential approach, but I think we can continue to growth in this, in this, in this range. It is true also for Germany, this 8%-10%, or is it a little bit lower? At the moment, it's 7%, I think in general, we can, we can obtain from 8-10, because consider that at the moment, the, the request anticipate, we are at the moment, we are hiring the new sales, and we need 6 months, 12 months to have all the person total total in a comfort zone to obtain your goal. When we hire a new person, we need 6 months to train or to, to teach him how is the business. It's not so fast. If you, if you see a mid-term, that means 12 months, 18 months, I, we can increase our organic growth from 7% to 8-10% in Germany, too. Okay. When the same, when the same team is just, more, is more mature. Yeah, yeah. I understand. Okay, very good. It's not, it's not, it's not a problem with market, the market is growing 11. The problem is with the starting point, we are in Germany, we are a company working, working in a more traditional cloud business, we need to teach the sales team and increase the staff with a, with more competence, more skill, to have more mature, confidence to propose the customer. There's a more complexity of the sales, you know? There's more, we need more, more, more seniority in terms of sales. This is the. Okay. Very clear. On H2, do you expect to have an acceleration in terms of organic growth, or it will be more or less the same than Q2? We are very, very optimistic, to be honest, because the pipeline is very, very good. Consider that we have always 6 months deferred, the revenue from the, from the signing. From signing perspective, I think we, we, I think sure we close, we, we, we will close the, this year with a record of the sales. Because the, the, the, the figures are end of June, July, is in Italy, particularly, is very, very strong. That means strong acceleration. Sure, for the H1 of next year. H2 is a, is a result of the signing of the H1, you know? Mm-hmm. We have only 6 months. We have, we have good visibility for, for the H2 because we have, we had a very, very good closing in terms of booking the H1. We are very optimist for the H1 of next year, because if we, if we close the contract we have at the moment in the final phase, and on the stations, sure we can, 20 to 24, we, we constantly grow organically very, very good. In general, the visibility we have is very, very high at the moment. It's very, very high. Okay, very good. Then in terms of cost, do you see your cost base stabilizing in H2, or do you expect any moving parts on the salaries or on energy that could differ from H1 to H2? No, we see the same. To be honest, we have a little bit reduction in Italy, but there's no material energy cost in Italy. A little bit reduction, that means EUR 30,000 less per quarter. In Germany, we have a cost reduction, because we receive for the H2 a contribute from the government, and we are sure something else to, to, to reduce the cost. Next year, we reduce the energy cost 20% in Germany. We, we just have defined the new price energy for the next year. In terms of salary, usually we increase the salary 1 time yearly. At the moment, we see little stable the situation in Italy. In Germany, persist the problem to, to hire. In Germany is not easy to attract new talents. We are working a lot with academy, university to reduce the gap. At the moment, we had good results in Rostock with the university agreement. We hire, for example, 10 technician last quarter. Now we are working with another university in Strasbourg and in Hamburg to increase our capacity to hiring. In Italy, the new HR, we changed the HR the first quarter. At the moment, we see little the improvement of the capacity of hiring. Again, Italy, it's not easy, but is, it will work on going. Okay, good to know. Then two remaining question, please. It's about CapEx. It was EUR 50 million in H1. Should we expect this more or less the same number in H2? No, I think less. I think our budget is EUR 24 million-25 million, this range, including the IFRS impact of Global Access. Consider that the H1, we have more CapEx about the data center in Germany, because we end the site building in June. Our expectation is we have, depend, naturally. If we have very, very good booking in term of organic growth Okay, this is happy CapEx. That means. Extra. If you, if you have a, a normal booking organic growth, our expectation is, to close the year from-... EUR 24 million-EUR 35 million. Okay, okay. Very good. My final question is regarding the seasonality of the ERPTech revenue. It was EUR 3 million in Q2. Is it a good run rate for the rest of the year or, or not? No, I understand. About ERPTech, sorry, Can you repeat the question? No, do you have any seasonality in the revenue of ERPTech? It was EUR 3 million in Q2, if I'm- Yes ... I'm not mistaken. Is it a good run rate for the rest of the year, this EUR 3 million for each quarter? No, this value is a full year cost synergy, EUR 2 million. We obtain EUR 2 million of cost synergy ERPTech. The good news is in term of revenue, ERPTech, all the client remain in with. We don't have a churn, 0. At the opposite, we increase the revenue because we close 1 contract with the 1 retail of cellular, cellular, cellular devices in April, and now in the luxury segment. The revenue is increasing little bit, but the cost synergy we had obtained in the H1 is a full result. For this reason, the EBITDA margin, the second quarter in Italy, was 45%, because ERPTech is just online in term of cost and revenue. It's just, it's total achieved, the synergy. Okay. Very good. You go on, Francesca. Just to be very clear, when we talk about the EUR 3 million of ERPTech and the revenues of the other acquired company that are not included in the organic growth, we are talking about H1 numbers, it's not the Q2 number. EUR 3 million for ERPTech is for the 6 months in terms of revenues? Yes, correctly. Okay. Mr. Cozzi, there are no more questions registered at this time. Okay. Thanks all for, for, for joining this conference call, great vacation for all. I think in August, vacation period, see you soon for the next call and for the third quarter results. Thank you, bye-bye. Bye-bye.