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Dominion Hosting Holding (DHH)
Earnings Release • Sep 20, 2024
4193_ir_2024-09-20_0ddfb73b-aa77-49ed-96f0-8fb2f5c14d9f.pdf
Earnings Release
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| Informazione Regolamentata n. 20088-53-2024 |
Data/Ora Inizio Diffusione 20 Settembre 2024 15:30:10 |
Euronext Growth Milan | |
|---|---|---|---|
| Societa' | : | DHH | |
| Identificativo Informazione : 195738 Regolamentata |
|||
| Utenza - Referente | : | DOMINIONN02 - Giandomenico Sica | |
| Tipologia | : | 1.2 | |
| Data/Ora Ricezione | : | 20 Settembre 2024 15:30:10 | |
| Data/Ora Inizio Diffusione | : | 20 Settembre 2024 15:30:10 | |
| Oggetto | : | DHH S.p.A. Half-Year Results – H1 2024 |
Testo del comunicato
FINANCIAL PERFORMANCE OVERVIEW • Net Sales: Reached EUR 18M in H1 2024, compared to EUR 16,5M in H1 2023, representing a growth of 9%. This growth is attributed primarily to increased revenue in the Cloud Computing (+9%), Cloud Hosting (+7%) and Business Connectivity (+9%) segments . • Recurring Revenue: Constitutes approximately 94% of total revenue, highlighting strong customer retention and predictable turnover. • EBITDA : Amounted to EUR 6M, up from EUR 4,3M, reflecting a significant increase of 40%, with an EBITDA margin of 33%. • Earnings Before Tax (EBT): Stood at EUR 3,1M, significantly up from EUR 1,1M, showing a growth of 175%. • Net Profit: Increased to EUR 2M from EUR 313K, marking a substantial rise of 541%, driven by revenue growth and cost optimization. • Net Financial Position: Improved to EUR 3,6M of net debt, a decrease of 44% from EUR 6,5M at the end of 2023, due to operating cash flows and liquidity management.
DHH S.p.A. Half-Year Results – H1 2024
FINANCIAL PERFORMANCE OVERVIEW
- Net Sales: Reached EUR 18M in H1 2024, compared to EUR 16,5M in H1 2023, representing a growth of 9%. This growth is attributed primarily to increased revenue in the Cloud Computing (+9%), Cloud Hosting (+7%) and Business Connectivity (+9%) segments1 .
- Recurring Revenue: Constitutes approximately 94% of total revenue, highlighting strong customer retention and predictable turnover.
- EBITDA2 : Amounted to EUR 6M, up from EUR 4,3M, reflecting a significant increase of 40%, with an EBITDA margin of 33%.
- Earnings Before Tax (EBT): Stood at EUR 3,1M, significantly up from EUR 1,1M, showing a growth of 175%.
- Net Profit: Increased to EUR 2M from EUR 313K, marking a substantial rise of 541%, driven by revenue growth and cost optimization.
- Net Financial Position: Improved to EUR 3,6M of net debt, a decrease of 44% from EUR 6,5M at the end of 2023, due to operating cash flows and liquidity management.
Giandomenico Sica, President of DHH's Board of Directors, comments: "We are pleased with our results for the first half of 2024, which marks the eighteenth straight semester of growth in our revenue, all of which was achieved organically. Our profits are growing even faster than our revenue, showing the strength of our scalable business model. We continue to focus on highquality revenue, with steady, recurring income thanks to our technology as a service proposition, no customer concentration, and strong cash flow. We're also happy with the launch of new products in areas like AI and video streaming, which have been well-received in the market. Looking ahead, we aim to continue this path, supporting our multidimensional approach to growth. While we focus on organic growth, we consider mergers and acquisitions a complementary strategy, which we pursued since the foundation of DHH. We are always exploring new opportunities and are in constant contact with potential targets. This includes companies in our existing industries, within our current markets, and across other EU markets."
Milan, 20 September 2024. DHH S.p.A. (DHH.MI) (ISIN shares IT0005203622) announces that today the Board of Directors approved the consolidated financial statements for the first half of 2024, prepared in compliance to international accounting standards (IAS/IFRS).
1 A different categorization of segments has been introduced starting from January 2024: Cloud computing previously Iaas and SaaS, Cloud Hosting previously Paas, Business Connectivity previously Internet Access. The other category remained the same. The calculation of variation YoY has been made considering the new categorization also for H1 2023.
2 In 2023, the operating expenses included a non-cash charge of Euro 1,1M related to the IFRS 2 accounting for the 2022-2025 Stock Option Plan, which did not impact the Company's cash availability. This represented a decrease from the Euro 1,7M non-cash charge in 2022. Going forward into 2024, the company has not incurred and will not incur any further expenses related to this cost.
FINANCIAL HIGHLIGHTS
Growth and Market Development:
- Consolidated Net Sales: Increased to EUR 18M in H1 2024 from EUR 16,5M in H1 2023, marking a growth of 9%. This increase is attributed mainly to:
- o A 9% rise in the Cloud Computing segment, contributing EUR 7M to total revenue (38% of total turnover) and supported by the new products' double/triple digit growth (ref. Cloud Server GPU/NPU, video streaming for municipalities).
- o A 7% growth in the Cloud Hosting segment, accounting for EUR 4,3M (23% of total turnover).
- o A 9% increase in the Business Connectivity segment, contributing EUR 3,9M to the revenue (21% of total turnover).
- Geographical Performance: Revenue growth was noted across several markets, with increases of 11% in Croatia and Switzerland, 10% in Italy, 8% in Slovenia, and 4% in Serbia, while performance in Bulgaria remained steady.
Operational and Financial Efficiency:
- Consolidated EBITDA: Increased from EUR 4,3M in H1 2023 to EUR 6M in H1 2024 with an EBITDA margin of 33%. This improvement reflects the scalability of DHH's business model, characterised by revenue quality, high client retention, and a focus on cost management. The improvement in EBITDA is further supported by stable operating costs and the absence of nonrecurring professional services expenses that impacted the previous year's results (ref. stock options plan).
- Consolidated EBT and Net Profit: Both indicators substantially grew in H1 2024. Consolidated EBT rose from EUR 1,1M to EUR 3,1M, while Consolidated Net Profit increased from EUR 313K to EUR 2M. This reflects the positive impact of higher EBITDA and reduced financial expenses. Like-for-like comparison – adj. net profit H1 2024 vs adj. Net profit H1 2023 – excluding the cost of stock options plan for 2023, marks a +41% YoY, from EUR 1,4M in H1 2023 to EUR 2M in H1 2024.
Operating Cash Flow and Liquidity:
- Operating cash flow remains strong, with a cash conversion rate that continues to support debt reduction efforts.
- The Group's net financial position improved significantly, with net debt decreasing from EUR 6,5M at the end of 2023 to EUR 3,6M at the end of H1 2024, underscoring effective liquidity management and the group's ability to generate cash.
Corporate Activity:
• No new acquisitions were made during H1 2024; all growth reported was organic, driven by DHH's ongoing focus on enhancing its existing operations and expanding product offerings.
SIGNIFICANT EVENTS DURING THE SEMESTER
21 MARCH 2024: The Board of Directors of DHH approved the draft statutory and consolidated financial statements for the year ending 31 December 2023. These documents were slated for submission to the Extraordinary and Ordinary Shareholders' Meeting scheduled for 29 April 2024 for approval and acknowledgment, respectively.
16 APRIL 2024: DHH received a notice of substantial shareholding change following the inheritance of DHH shares by Daniele and Marianna Vona, heirs of Enrico Vona. This resulted in each inheritor holding 16,73% of the company's share capital, altering the overall shareholding structure.
29 APRIL 2024: The Shareholders' Meeting, held via audio/video conference, approved amendments to the Company's bylaws, including Articles 21, 22, 26, and 31, to align with regulatory changes. Additionally, the statutory financial statements for 31 December 2023 were approved, and authorization for purchasing and disposing of treasury shares was granted.
30 APRIL 2024: The Board of Directors assessed and confirmed the independence of independent director Andrea Arrigo Panato. This evaluation, in line with Article 6-bis of the Euronext Growth Milan Issuers' Regulation, considered both quantitative and qualitative criteria approved by the Board on 21 March 2024.
3 MAY 2024: DHH sold 100.957 treasury shares to the "PIPE" fund, managed by Alkemia Capital Partners SGR S.p.A., at EUR 14,8 per share. Alongside additional shares acquired from other shareholders, the PIPE fund amassed a 4,73% stake, aiming to support DHH's business development.
13 MAY 2024: DHH received notice of a substantial change in shareholding from Alkemia SGR S.p.A. The "PIPE" fund now holds 245.610 shares, representing 5,02% of the company's share capital, further solidifying its position as a significant shareholder in DHH.
22 MAY 2024: The Board of Directors resolved to initiate the program for the purchase and disposition of treasury shares for a maximum value of EUR 1,5M, in execution of the resolution of the Shareholders' Meeting of April 29, 2024 ("Program"). The Program started on June 3, 2024 and will end by May 7, 2025.
11 JUNE 2024: Launch of a groundbreaking Serverless GPU product designed for AI applications through the subsidiary Seeweb. This innovative product, accessible at k8sgpu.seewebcloud.com, leverages Kubernetes to provide scalable, on-demand access to thousands of remote GPUs, addressing the growing computational needs in AI model training and inference.
SIGNIFICANT EVENTS BETWEEN THE END OF SEMESTER AND THE RELEASE OF THE SIX-MONTHLY RESULTS
2 JULY 2024: Launch of the AI Accelerator product through the subsidiary Seeweb. This new offering is designed to enhance AI inference workloads by utilizing Tenstorrent cards, providing significant computational power and efficiency for AI applications.
16 JULY 2024: Launch of a new video streaming product for municipal councils through the subsidiary Evolink. This innovative technology is designed to enhance transparency and public engagement by offering high-quality live streaming of council meetings and other municipal events.
BUSINESS OUTLOOK
The Group remains committed to sustaining its growth trajectory, primarily driven by a focus on organic growth while maintaining controlled margins. DHH continues to explore external growth opportunities within both its existing markets and new markets across the EU, though the Group is not in a rush to pursue acquisitions, given the satisfaction with the current organic performance. Additionally, DHH is experimenting with new product offerings, particularly in the area of AI infrastructure, as part of its ongoing innovation efforts. There are no significant concerns regarding insolvency or revenue concentration within the Group.
EARNINGS CALL
The Chairman and CEO of DHH will comment on H1 2024 results in a conference call to be held on 27 September 2024 at 3.00 pm CET at this link: https://whereby.com/dhhspa.
People interested in participating are invited to send any questions or topics of interest to the following email address: [email protected].
FURTHER INFORMATION
The approved data has been submitted to BDO Italia S.p.A., the appointed audit firm, for review. The consolidated interim financial report will be made available to the public as per EGM regulations and on the Group's website at www.dhh.international.
About DHH S.p.A.
DHH S.p.A. (DHH.MI) (ISIN shares IT0005203622) is dedicated to reshaping internet infrastructure through the integration of next-generation technology and artificial intelligence. Based in Europe, the company leverages open-source technologies to enhance digital connectivity across various industries and regions. With a commitment to continuous research and open innovation, DHH aligns technological progress with stringent data privacy standards. This approach promotes technological excellence while
safeguarding individual privacy, aiming to position the company as a relevant player in the evolution of global internet infrastructure. www.dhh.international
Contact DHH S.p.A.
Via Caldera 21, 20153 Milano +39 02 87365100 [email protected] www.dhh.international
Euronext Growth Advisor Luca Perconti EnVent Italia SIM S.p.A. Via degli Omenoni 2, 20121 Milano +39 02 22175979 [email protected]
| CONSOLIDATED INCOME STATEMENT | CONSOLIDATED | CONSOLIDATED | DELTA |
|---|---|---|---|
| (All amounts are in EURO) | 30.06.2024 | 30.06.2023 | |
| Net Sales | 17.956.008 | 16.520.449 | 9% |
| Other Revenues | 446.594 | 556.778 | -20% |
| TOTAL REVENUES | 18.402.602 | 17.077.227 | 8% |
| Material costs | (1.412.017) | (1.074.663) | 31% |
| Service costs and use of third party assets | (7.072.719) | (7.981.529) | -11% |
| Personnel costs | (3.438.465) | (3.305.555) | 4% |
| Other expenses | (476.983) | (431.152) | 11% |
| TOTAL OPERATING COSTS | (12.400.184) | (12.792.899) | -3% |
| EBITDA | 6.002.418 | 4.284.328 | 40% |
| Amortization and impairment | (2.516.464) | (2.806.925) | -10% |
| EBIT | 3.485.954 | 1.477.402 | 136% |
| Financial income (expenses) | (400.652) | (355.454) | 13% |
| Other non-operating income/expense | - | - | |
| EARNINGS BEFORE TAXES | 3.085.301 | 1.121.948 | 175% |
| Total current and deferred income taxes | (1.076.881) | (808.436) | 33% |
| NET INCOME (LOSS) FOR THE YEAR | 2.008.420 | 313.512 | 541% |
| relating to the shareholders of the Group | 1.981.181 | 297.542 | 566% |
| relating to the third party shareholders | 27.240 | 15.971 | 71% |
| EBITDA Adjusted* | 6.002.418 | 5.390.195 | 11% |
| EBIT Adjusted* | 3.485.954 | 2.583.269 | 35% |
| NET PROFIT Adjusted *(attributable to the shareholders of the group) |
1.981.181 | 1.403.409 | 41% |
| * Impact of non recurring revenues and costs | ||||
|---|---|---|---|---|
| CONSOLIDATED NET FINANCIAL POSITION | CONSOLIDATED | CONSOLIDATED | DELTA |
|---|---|---|---|
| (All amounts are in EURO) | 30.06.2024 | 31.12.2023 | |
| A. Cash | (13.175.442) | (10.193.810) | 29% |
| B. Cash equivalents | - | - | |
| C. Other current financial assets | (459.532) | (204.353) | 125% |
| D. LIQUIDITY (A) + (B) + (C) | (13.634.974) | (10.398.163) | 31% |
| E. Current financial liabilities | 126.569 | 79.492 | 59% |
| F. Current part of non-current borrowing | 5.015.544 | 4.439.317 | 13% |
| G. CURRENT FINANCIAL DEBT (E) + (F) | 5.142.113 | 4.518.809 | 14% |
| H. NET CURRENT FINANCIAL DEBT (G) - (D) | (8.492.862) | (5.879.354) | 44% |
| I. Non-current financial liabilities | 12.140.061 | 12.407.329 | -2% |
| J. Bonds issued | - | ||
| K. Trade payables and Other non-current liabilities | - | ||
| L. NON-CURRENT FINANCIAL DEBT (I) + (J) + (K) | 12.140.061 | 12.407.329 | -2% |
| M. NET FINANCIAL DEBT (H) + (L) | 3.647.199 | 6.527.975 | -44% |
| ASSETS | CONSOLIDATED | CONSOLIDATED | DELTA |
|---|---|---|---|
| (All amounts are in EURO) | 30.06.2024 | 31.12.2023 | |
| Trademark | 3.087.307 | 3.087.307 | 0% |
| Goodwill | 10.383.499 | 10.403.354 | 0% |
| Tangible fixed assets | 12.115.577 | 11.681.942 | 4% |
| Right of use Assets | 5.744.132 | 4.833.450 | 19% |
| Intangible assets | 2.397.894 | 2.498.474 | -4% |
| Investments | 1.398.701 | 1.398.701 | 0% |
| Non current financial assets | 310.634 | 319.775 | -3% |
| Other non current assets | 280.039 | 280.039 | 0% |
| Prepaid Tax assets | 1.259.199 | 1.219.464 | 3% |
| NON CURRENT ASSETS | 36.976.981 | 35.722.505 | 4% |
| Inventories | 491.126 | 482.393 | 2% |
| Trade receivables | 5.126.570 | 4.696.261 | 9% |
| Current financial assets | 459.532 | 204.353 | 125% |
| Other current assets | 125.237 | 83.118 | 51% |
| Tax receivables | 332.902 | 425.005 | -22% |
| Cash and cash equivalents | 13.175.442 | 10.193.810 | 29% |
| Prepaid expenses and accrued income | 1.593.360 | 1.202.179 | 33% |
| CURRENT ASSETS | 21.304.170 | 17.287.120 | 23% |
| TOTAL ASSETS | 58.281.151 | 53.009.624 | 10% |
| LIABILITIES | CONSOLIDATED | CONSOLIDATED | DELTA |
| (All amounts are in EURO) | 30.06.2024 | 31.12.2023 | |
| Share Capital | 489.277 | 489.277 | 0% |
| Reserves | 23.393.347 | 20.784.121 | 13% |
| Retained Profit (Loss) | 365.579 | -392.122 | -193% |
| Year's profit (loss) relating to the shareholders of the Group | 1.981.181 | 2.210.961 | -10% |
| NET EQUITY PARENT COMPANY | 26.229.384 | 23.092.237 | 14% |
| Capital and Reserves relating to the third party shareholders | 595.745 | 612.488 | -3% |
| Year's Profit/loss relating to the third party shareholders | 27.240 | 16.739 | 63% |
| NET EQUITY TO THE THIRD PARTY | 622.985 | 629.227 | -1% |
| SHAREHOLDERS | |||
| NET EQUITY | 26.852.369 | 23.721.464 | 13% |
| Non current financial payables Severance reserves |
12.140.061 859.305 |
12.407.329 824.266 |
-2% 4% |
| Provisions for risks and future liabilities | 69.104 | - | |
| Other non current liabilities | - | - | |
| Liabilities for deferred taxes | 1.535.649 | 1.581.331 | -3% |
| NON CURRENT LIABILITIES | 14.604.120 | 14.812.926 | -1% |
| Trade payables | 4.480.201 | 4.087.986 | 10% |
| Other current liabilities | 1.086.470 | 972.716 | 12% |
| Current financial liabilities | 5.142.113 | 4.518.809 | 14% |
| Tax payables | 1.792.396 | 811.454 | 121% |
| Accrued liabilities and deferred income | 4.323.482 | 4.084.270 | 6% |
| CURRENT LIABILITIES | 16.824.662 | 14.475.234 | 16% |
| TOTAL LIABILITIES | 31.428.782 | 29.288.160 | 7% |
| CASH FLOW STATEMENT | CONSOLIDATED | CONSOLIDATED | DELTA |
|---|---|---|---|
| (All amounts are in EURO) | 30.06.2024 | 30.06.2023 | |
| A. CASH FLOW FROM OPERATING ACTIVITIES | |||
| Profit for period | 2.008.420 | 313.512 | 541% |
| Income taxes | 1.076.881 | 808.436 | 33% |
| Interest payables/(receivables) | 400.652 | 355.454 | 13% |
| (Capital losses)/gains from sales of assets | |||
| (Capital losses)/gains from Business Combinations | |||
| 1. EARNINGS BEFORE INCOME TAX, INTEREST, DIVIDENDS AND CAPITAL GAIN/LOSSES |
3.485.954 | 1.477.402 | 136% |
| Adjustments for non-cash items that are | |||
| not accounted for in net working capital change: | 2.624.231 | 3.972.037 | -34% |
| - Allocation to reserves | 110.403 | 63.644 | 73% |
| - Amortization and depreciation of assets | 2.450.103 | 2.743.981 | -11% |
| - Permanent loss write-down | 66.361 | 62.945 | 5% |
| - Other adjustments on non-monetary items | (2.636) | 1.101.468 | -100% |
| 2. CASH FLOW BEFORE NWC CHANGES | 6.110.185 | 5.449.440 | 12% |
| Changes in NWC: | 827.050 | 1.377.722 | -40% |
| - Decrease (increase) in inventories | (8.734) | (39.996) | -78% |
| - Decrease (increase) in customer receivables | (496.670) | 835.523 | -159% |
| - Increase (decrease) in supplier payables | 392.216 | (292.062) | -234% |
| - Decrease (increase) in prepaid expenses and accrued income | (391.180) | (207.377) | 89% |
| - Increase (decrease) in accrued expenses and deferred income | 239.212 | 371.689 | -36% |
| - Other changes to the NWC | 1.092.206 | 709.946 | 54% |
| 3. CASH FLOW AFTER NWC CHANGES | 6.937.234 | 6.827.162 | 2% |
| Other changes: | (1.529.475) | (1.224.898) | 25% |
| - Interests collected/(paid) | (400.652) | (355.454) | 13% |
| - (income taxes paid) | (1.095.208) | (808.955) | 35% |
| - Dividends received | - | - | |
| - (Use of reserves) | (33.614) | (60.489) | -44% |
| CASH FLOW FROM OPERATING ACTIVITIES [A] | 5.407.760 | 5.602.264 | -3% |
| B. CASH FLOW FROM INVESTING ACTIVITIES | |||
| (Investments) disinvestment in tangible assets | (1.327.198) | (1.047.369) | 27% |
| (Investments) disinvestment in right of use assets | (2.107.808) | (2.544.395) | -17% |
| (Investments) disinvestment in intangible assets | (238.979) | (920.197) | -74% |
| (Investments) disinvestment in financial assets | (358.302) | (639.950) | -44% |
| (Investments) disinvestment in non-capitalized financial assets | - | ||
| CASH FLOW FROM INVESTING ACTIVITIES [B] | (4.032.288) | (5.151.911) | -22% |
| C. CASH FLOW FROM FINANCING ACTIVITIES | |||
| Increase (decrease) current payables to banks | 306.978 | 16.437 | 1768% |
| New loans (Loan repayments) | 49.058 | (468.958) | -110% |
| Paid capital increase | (0) | - | |
| Treasury share sale (purchase) | 1.250.124 | - | |
| (Dividends paid) | - | - | |
| CASH FLOW FROM FINANCING ACTIVITIES [C] | 1.606.160 | (452.521) | -455% |
| INCREASE (DECREASE) IN LIQUIDITY [A]+[B]+[C] | 2.981.632 | (2.169) | -137585% |
| LIQUID FUNDS AT THE BEGINNING OF THE PERIOD | 10.193.810 | 10.643.629 | -4% |
| Consolidated variation area | |||
| LIQUID FUNDS AT THE END OF THE PERIOD | 13.175.442 | 10.641.460 | 24% |
| Fine Comunicato n.20088-53-2024 | Numero di Pagine: 10 |
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