Alkemy

Earnings Release • Mar 27, 2023

Informazione Regolamentata n. 20116-8-2023		Data/Ora Ricezione 27 Marzo 2023 18:05:08	Euronext Star Milan
Societa'	:	ALKEMY
Identificativo Informazione Regolamentata	:	174111
Nome utilizzatore	:	ALKEMYN03 - Benasso
Tipologia	:	1.1
Data/Ora Ricezione	:	27 Marzo 2023 18:05:08
Data/Ora Inizio Diffusione presunta	:	27 Marzo 2023 18:05:10
Oggetto	:	Alkemy S.p.A. – The Board of Directors approved the draft Statutory Financial Statements and the Consolidated Financial Statements for FY 2022
Testo del comunicato

Vedi allegato.

ALKEMY S.P.A. IN 2022 TURNOVER UP (+12%) AS WELL AS ADJ. EBITDA UP (+12%) NET PROFIT REACHES € 5.6 MILLION (+31%)

In 2022 ("FY 2022"), acquisitions and strong client portfolio drove turnover growth, while the optimization of the sales mix improved Group's EBIT

• 1. The Board of Directors approved today the draft Statutory Financial Statements and the Consolidated Financial Statements for Financial Year 2022, and the proposal for the allocation of the Net Result for the year.
• 2. Ordinary Shareholders' Meeting convened on April 27th, 2023.
• FY 2022 Consolidated Turnover stands at Euro 106.6 million, +12.0% compared to Euro 95.2 million in FY 2021, mainly following the change in Group perimeter and the focus on key accounts.
• FY Adjusted EBITDA¹ at Euro 11.8 million, +12.2% compared to Euro 10.5 million in FY 2021. FY 2022 Adjusted EBITDA margin² at 11.1%, flat vs. FY 2021 due to the proportional increase of operating costs and revenues and the different consolidation scope.
• FY 2022 EBIT at Euro 7.5 million, +13.4% compared to FY 2021 (Euro 6.6 million), mainly due to the change in Group scope.
• FY 2022 EBT at Euro 7.1 million, +23.0% compared to Euro 5.8 million in FY 2021, thanks to the better Group performance, lower non-recurring costs, and lower net financial charges.
• FY 2022 Net Profit at Euro 5.6 million, +31.4% compared to Euro 4.3 million in FY 2021.
• FY 2022 Operating Cash Flow was positive at Euro 5.3 million (Euro 7.4 million in FY 2021), mainly as a consequence of the better performance of the period, total change in net working capital, prepayment releases, paid taxes, and severance payments.
• Group Net Financial Position (NFP) at December 31st , 2022, negative at Euro -34.1 million, Euro -12.9 million compared to Euro -21.2 million at December 31st, 2021. The change is mainly due to the M&A activities carried out in Q3 2022.

Milan, March 27th, 2023 – The Board of Directors of Alkemy S.p.A. ("Alkemy", "the Company" or "the Group"), a leading company in the business model evolution of large and medium-sized companies listed on the Euronext Milan – STAR Segment of Borsa Italiana (ALK), today approved the draft Statutory Financial Statements and the Consolidated Financial Statements for the 2022 financial year, which will be published within the terms provided for by the reference legislation. The Board of Directors also approved the consolidated non-financial disclosure prepared pursuant to Legislative Decree 254/2016.

In FY 2022, despite the macroeconomic complex context and the widespread uncertainty in the market, Alkemy recorded a quite positive general trend, both in terms of Group turnover and Consolidated Adjusted EBITDA growth, that led to a Net Profit for the period at Euro 5.6 million (+31.0% vs. Euro 4.3 million in FY 2021) and in a positive operating cash flow at Euro 5.3 million.

² Adjusted EBITDA Margin is the ratio between Adjusted EBITDA and consolidated turnover.

¹Adjusted EBITDA: Net operating revenues net of operating costs excluding non-recurring expenses and income.

In FY 2022 Alkemy recorded a +12.0% turnover growth vs. FY 2021 mainly thanks to the change in Group perimeter and the focus on key customers.

FY 2022 Adjusted EBITDA grew +12.2% compared to FY 2021, while the Adjusted EBITDA margin was stable at 11.1%, with operating costs increasing proportionally to the Group Revenues in FY 2022, also following the impact of the change in Group perimeter.

"2022 marked for Alkemy the 10th year since its foundation, it was the year in which turnover exceeded 100 million euros and in which the overall workforce exceeded 1,000 people worldwide," commented the Chief Executive Officer, Duccio Vitali. "During the last year we strengthened our customer coverage and backlog thanks to the work of the Go-to-Market function. In the first months of 2023 we are already starting to benefit of our work, signing contracts with primary partners".

The Chairman of the Board of Directors, Alessandro Mattiacci added: "Over the past year we completed two important deals: the acquisition of InnoCV in Spain and the integration of Kreativa Unlimited and Kreativa New Formula in the Balkans. These two operations, which bring the total number of deals closed in the first 10 years from the foundation of Alkemy to 10, have on the one hand strengthened our presence in the two respective countries, and on the other hand, with reference to InnoCV, allowed us to integrate our offering with a new process mining product that we were able to offer to our customers on a global scale from day one post-acquisition."

Financial data analysis

+12.0% FY 2022 Group turnover growth, at Euro 106.6 million (Euro 95.2 million in FY 2021). This result is mainly due to the expansion of the Group perimeter and to the strong dedication to the management of key customers.

Revenues generated in Italy were 65.5% of the total Group turnover and recorded a year-on-year growth of 9.1% vs. FY 2021 at Euro 69.8 million (Euro 64.0 million in FY 2021). The positive result of the Italian companies is due both to the acquisition, in Q2 2021 of the majority stakes of Design Group Italia S.r.l. ("DGI") and eXperience Cloud Consulting S.r.l. ("XCC"), and to the contracts signed with core Italian clients.

Foreign companies in FY 2022, recorded a +18.0% turnover growth, mainly thanks to the inclusion of InnoCV in the Group perimeter and to the positive results recorded by the Mexican subsidiaries that more than offset the turnover decrease of Alkemy Iberia.

FY 2022 Adjusted EBITDA comes at Euro 11.8 million and grew by 12.2% compared to FY 2021 (Euro 10.5 million), mainly thanks to the increase of average turnover generated by key customers.

FY 2022 Adjusted EBITDA margin at 11.1%, flat vs. FY 2021. Service Cost net of non-recurring posts, grew by 5.1% compared to FY 2021 thanks to the process of internationalization of some activities originally managed by external suppliers, while personnel cost, net of non-recurring posts, grew by +20.3% as a consequence of the higher average headcount that was at 655 units in 2021 and 809 in FY 2022, mainly following the change in Group perimeter.

FY 2022 EBIT comes at Euro 7.5 million (+13.4% vs. Euro 6.6 million in FY 2021), mainly as a consequence of the better operating performance.

FY 2022 EBT was Euro 7.1 million, +23.0% vs. FY 2021 (Euro 5.8 million), thanks to the better operating performance and lower non-recurring financial charges for the period.

FY 2022 Group Net Profit was Euro 5.6 million, +31.4% compared to FY 2021 (Euro 4.3 million).

Operating Cash Flow at December 31st , 2022 positive at Euro 5.3 million, declining by Euro -2.21 million compared to Euro 7.4 million in FY 2021, mainly as an effect of the better performance of the period, total change in net working capital, prepayment releases, paid taxes and severance payments.

Group Net Financial Position (NFP) at December 31st , 2022, was negative at Euro -34.1 million, declining compared to Euro -21.2 million at December 31st, 2021. The change (Euro -12.9 million) is mainly due to:

• Euro -1.3 million decline in cash and equivalents;
• Euro +0.7 million increase of financial payables for the IFRS 16 application, mainly due to the payment of fees in the period, partially offset by new subscriptions:
• Euro -5.3 million increase in bank loans, mainly as a result of (i) the subscription of new loans (Euro -6.9 million), (ii) the advance invoice transactions carried out in December (Euro -2.9 million), (iii)the change in Group perimeter, particularly for the acquisition of 100% of Innocv Solutions S.L. (Euro -1.0 million) and (iv) the reimbursement of the installments of the amortization plans for bank loans and advance invoice transactions (Euro +5.7 million);
• Euro -7.2 million increase of put liabilities and earn-out, as a combination of (i) the registration of new put liabilities attributable to Alkemy Play S.r.l. (Euro +0.5 million), (ii) the earn-out booked for Innocv Solutions S.L. (Euro -10.1 million), (iii) interests accrued in the period (Euro +0.4 million), (iv) the exercise of the option on 35% of Alkemy Iberia S.L. (Euro -2.8 million) and (v) fair value adjustment of the options liabilities (Euro -1.1 million).

Outlook

The 2023 outlook will mainly depend on external factors unrelated with the pandemic emergency, now effectively resolved, but linked to the evolution of the war in Ukraine. The economic effects resulting from such event are helping to fuel the cost inflation caused above all by the widespread increase in the prices of energy products: there are therefore significant negative impacts on almost all economic sectors and, in general, on the expectations of companies, not always positive as a result of the widespread general uncertainty of the markets. At present, limited significant evidence has been found on the customers of the Alkemy Group, except that some are having greater direct impacts resulting from inflation, with therefore possible repercussions on the purchase of services offered by the Group.

Taking into account the results achieved in 2022 and the current state of progress of the orders in the portfolio and the new contracts activated, barring the occurrence of further aggravating events, currently unforeseeable, it is confirmed that the Group's expectations are positive and aimed at continuation of organic growth, both in revenues and in margins.

Allocation of the Net Profit of the Year

The Board of Directors of the Company resolved to propose to the Shareholders' Meeting the approval of the 2022 Financial Statements and to carry forward the profit for the year 2022 achieved by Alkemy S.p.A. equals to Euro 2,423,612.

The Ordinary Shareholders' meeting is called to approve the 2022 Financial Statements

The Company reminds that those entitled to attend and exercise the right to vote are called to the Ordinary Shareholders' Meeting of Alkemy S.p.A., on April 27th, 2023 on a single call, at the office of

the Notary Chiara Clerici, in Milan, at Via Mario Pagano n. 65, to discuss and resolve on the approval of the financial statements for 2022 and the allocation of the profit for the year. The Consolidated Financial Statements as of December 31st, 2022, will be presented to the Shareholders' Meeting.

The Assembly will also be called to:

• 1. Take a binding resolution on the first section of the Remuneration Report pursuant to article 123-ter, paragraphs 3-bis and 3-ter, of the Consolidated Law on Finance, as well as a nonbinding resolution on the second section of the Remuneration Report pursuant to art. 123-ter, paragraph 6, of the Consolidated Law on Finance;
• 1. Resolve on the adoption of the Long-Term Incentive Plan 2024/2026;
• 1. Authorize the purchase and disposal of own shares pursuant to art. 2357 and subsequent of the Italian Civil Code, following revocation of the authorization granted by the Shareholders' Meeting held on April 26th, 2022, for the unexecuted portion.

The Manager in charge of preparing the corporate accounting documents, Claudio Benasso, pursuant to paragraph 2 of article 154-bis of the Consolidated Law on Finance, declares that the accounting information contained in this press release corresponds to the documentary results, books and records accounting.

***

With reference to the accounting data shown in this press release, it should be noted that these are data for which the statutory audit activity by the Independent Auditors has not been completed. For more information, see the attachments to this press release.

***

The documentation relating to the FY 2022 results will be made available to the public, within the terms of the law, at the registered office in via San Gregorio 34 in Milan (MI), in the "Investor relations" section of the Company's website (www. alkemy.com) and on the storage mechanism eMarket Storage ().

***

FY 2022 results will be presented to the financial community in a dedicated conference call that will be hosted on Tuesday March 28th, 2023, at 9:30 a.m. CEST.

To connect to the conference call, you may use the most appropriate among the following dial-in numbers: IT: +39 02 36213011

UK: +44 1212 818003 Switzerland: +41 225954727 France: +33 170918703 Spain: +34 917699497 US: +1 718 7058794

The supporting slides will be made available on the Company website (www.alkemy.com) in the Investor Relations section prior to the call.

ANNEX

CONSOLIDATED PROFIT & LOSS FOR ALKEMY GROUP

		Values in Euro/000
	Dec. 31st , 2022	Dec. 31st , 2021
Revenues from sales and services	104,852	93,955
Other Revenues	1,722	1,230
Total operating revenues	106,574	95,185
Cost for services, goods, and other operating costs	(49,440)	(46,825)
- of which non recurrent	(293)	(76)
Personnel expenses	(46,065)	(38,845)
- of which non recurrent	(459)	(944)
Total operating costs	(95,505)	(85,670)
EBITDA	11,069	9,515
Adjusted EBITDA	11,821	10,535
D&A	(3,226)	(2,408)
Provisions and write-downs	(337)	(487)
Operating Result (EBIT)	7,506	6,620
Income (charges) from equity investments	-	(308)
Financial income	1,308	455
Financial Charges	(1,716)	(998)
Profit (Loss) before taxes	7,098	5,769
Income taxes	(1,484)	(1,498)
Profit (Loss) for the period	5,614	4,271
Attributable to:
- Group	5,583	4,263
- Minorities	31	8

Assets Dec. 31st , 2022 Dec. 31st , 2021 Non-current assets Tangible assets 2,209 1,809 Rights of use 4,633 5,332 Goodwill 54,868 41,249 Defined-life intangible assets 1,934 863 Minorities 5 5 Non-current financial assets 588 1,789 Deferred tax assets 2,206 1,789 Other non-current assets 267 241 Total non-current assets 66,710 53,077 Current assets Trade receivables 41,541 36,040 Current financial assets 291 84 Tax credits 2,065 1,274 Other current assets 2,011 2,885 Cash and cash equivalents 9,115 10,458 Total current assets 55,023 50,741 Total assets 121,733 103,818 Liabilities and Group Equity Group Equity Equity 596 596 Reserves 36,828 31,517 Net Income (Loss) 5,583 4,263 Group Equity 43,007 36,376 Minorities 399 323 Total Equity 43,406 36,699 Non-current liabilities Financial debts 13,081 11,269 Rights of use liabilities 3,425 4,009 Put option debts and earn-out 13,436 6,575 Employee's leaving entitlement 5,543 6,361 Provisions 100 222 Deferred tax liabilities 128 18 Total non-current liabilities 35,713 28,454 Current liabilities Financial debts 9,023 5,502 Rights of use liabilities 1,345 1,473 Put option debts and earn-out 3,225 2,906 Trade payables 16,217 14,184 Tax liabilities 1,622 2,281 Other liabilities 11,182 12,319 Total current liabilities 42,614 38,665 Total liabilities 78,327 67,119 Total liabilities and Equity 121,733 103,818		Values in Euro/000

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		Values in Euro/000
	Dec. 31st	, 2022 Dec. 31st , 2021
Operating activities
Net Income (Loss)	5,614	4,271
Financial Income	(1,308)	(455)
Loss (income) from equity investments	-	308
Financial Charges	1,716	998
Income Taxes	1,484	1,498
D&A	3,226	2,408
Provisions and write-downs	337	487
Share-based compensation	518	769
Change in trade receivables	(3,642)	(2,008)
Change in trade payables	2,046	(678)
Change in other current assets	522	(3)
Change in other current liabilities	(3,215)	1,402
Paid financial charges	(407)	(250)
Paid Income taxes	(1,623)	(1,331)
Net cash flow generated (absorbed) by operating activities	5,268	7,416
Investing activities
Capex	(2,542)	(1,940)
Change in financial assets	1,737	303
Change in acquisitions	(4,361)	(1,949)
Net cash flow generated (absorbed) by investment activity	(5,166)	(3,586)
Financing activities
Change in financial debt	4,050	(259)
Change in IFRS 16 financial liabilities	(1,714)	(1,347)
Change in treasury shares	(435)	(759)
Other change in financing activities	-	(55)
Dividends paid	(613)	(1,031)
Other changes in Equity	-	884
Capital increase	-	8
Exercise of put options	(2,733)	(9,653)
Net cash flow generated (absorbed) by financing activities	(1,445)	(12,212)
Increase (decrease) of net cash position for the period	(1,343)	(8,382)
Cash at the beginning of period	10,458	18,840
Cash at period end	9,115	10,458

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Alkemy S.p.A. works to improve the market positioning and competitiveness of large and mediumsized companies by stimulating the evolution of their business models in line with technological innovation and consumer behavior. Alkemy integrates skills and expertise in the areas of Strategy, Communication, Design, Performance, Technology and Insights & Analytics, with an offering designed for our post-digital environment and covering the entire chain of value from strategy to implementation.

Contacts

Investor Relations Emanuela Salvini | emanuela.salvini@alkemy.com | +39 320 1796890