Quarterly Report • Nov 9, 2022
Quarterly Report
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at 30 September 2022
(TRANSLATION FROM ITALIAN ORIGINAL WHICH REMAINS THE DEFINITIVE VERSION)
| Corporate Bodies | 3 |
|---|---|
| Summary income statement and statement of financial position | 4 |
| Group Structure and Shareholders | 5 |
| Business Model and Operating segments | 6 |
| Presentation criteria | 10 |
| Disclosure on Operating performance | 11 |
| Other disclosures | 21 |
| Events after 30 September 2022 and business outlook |
23 |
| Financial statements | 25 |
| Chairman |
|---|
| Chief Executive Director |
| Director |
| Director |
| Independent Director |
| Independent Director |
| Independent Director |
| Independent Director |
| Independent Director |
The Board of Directors was appointed by the Shareholders' Meeting of 22 April 2020 for 3 years, with term of office expiring on approval of the financial statements at 31 December 2022. On 7 October 2022 the Board of Directors of Be Shaping the Future S.p.A. - unanimously and with thte approval of the Board of Satutory Auditors - resolved to appoint by co-optation, pursuant to Article 2386 of the Italian Civil Code., Mr. Alberto De Antoni and Ms. Nevena Koleva Batchvarova to replace the resigning directors Mr. Carlo Achermann (who held the position of Chairman – executive – of the Board of Directors) and Ms. Lucrezia Reichlin (who held the position of independent non-executive director). Further on, the Board of Directors appointed Mr. Claudio Berretti Chairman of the Board of Directors.
| - Stefano De Angelis |
Chairman |
|---|---|
| - Rosita Natta |
Standing Auditor |
| - Giuseppe Leoni |
Standing Auditor |
| - Roberta Pirola |
Alternate Auditor |
| - Susanna Russo |
Alternate Auditor |
The Board of Statutory Auditors was renewed by the Shareholders' Meeting of 22 April 2021 for 3 years, with term of office expiring on approval of the financial statements at 31 December 2023.
| - Claudio Roberto Calabi |
Independent Chairperson |
|---|---|
| - Gianluca Antonio Ferrari |
Independent Member |
| - Francesca Moretti |
Independent Member |
The Control and Risk Committee was appointed by Board of Directors' resolution on 22 April 2020 for 3 years, expiring on approval of the financial statements at 31 December 2022.
| - Cristina Spagna |
Independent Chairperson |
|---|---|
| - Claudio Berretti |
Member |
| - Anna Maria Tarantola |
Independent Member |
The Remuneration and Appointments Committee was renewed by Board of Directors' resolution on 22 April 2020 for 3 years, expiring on approval of the financial statements at 31 December 2022.
PricewaterhouseCoopers S.p.A.
The independent auditors were appointed by the Shareholders' Meeting of 22 April 2021, for a period of 9 years.
| (amounts in EUR millions) | 9M 2022 | 9M 2021 |
|---|---|---|
| Revenue | 193.1 | 164.0 |
| EBITDA | 10.6 | 26.2 |
| EBIT | 1.2 | 16.5 |
| Profit (loss) before tax | (0.8) | 14.3 |
| Net profit (loss) | (4.0) | 14.3 |
| (amounts in EUR millions) | 30.09.2022 | 31.12.2021 |
|---|---|---|
| Group Shareholders' equity | 62.5 | 68.5 |
| Net Invested Capital | 118.6 | 117.1 |
| Net Operating Working Capital (NOWC) | 42.5 | 30.2 |
| Net Financial Position | 54.3 | (46.5) |
| (amounts in EUR millions) | 9M 2022 | 9M 2021 |
|---|---|---|
| Business Consulting | 139.6 | 116.9 |
| ICT Solutions | 42.2 | 37.0 |
| Digital | 11.3 | 10.1 |
| TOTAL | 193.1 | 164.0 |
| (amounts in EUR millions) | 9M 2022 | 9M 2021 |
|---|---|---|
| Banks | 150.7 | 130.0 |
| Insurance | 18.1 | 12.9 |
| Industry | 7.4 | 7.5 |
| Other | 1.1 | 0.1 |
| Public Administration | 15.8 | 13.5 |
| TOTAL | 193.1 | 164.0 |
| (amounts in EUR millions) | 9M 2022 | 9M 2021 |
|---|---|---|
| Italy | 107.0 | 106.7 |
| DACH Region (Germany, Austria, Switzerland) | 57.6 | 34.5 |
| UK and Spain | 16.8 | 13.1 |
| CEE Region (Poland, Ukraine, Romania) | 11.7 | 9.7 |
| TOTAL | 193.1 | 164.0 |
| (values in units) | 30.09.2022 | 31.12.2021 |
|---|---|---|
| Executives | 168 | 155 |
| Middle managers | 227 | 216 |
| White collar | 1,432 | 1,320 |
| Blue collar | 1 | 89 |
| Apprentices | 56 | 1 |
| TOTAL | 1,884 | 1,781 |
The Be Group (Be for short) is one of the leading Italian players in the IT Consulting sector. The Group provides Business Consulting, Information Technology and Professional Services. A combination of specialist skills, advanced proprietary technologies and a wealth of experience enable the Group to work with leading financial and insurance institutions and Italian industries to improve their competitive capacity and their potential to create value. With nearly 1,900 employees and branches in Italy, Germany, United Kingdom, Switzerland, Austria, Poland, Luxembourg, Czech Republic, Ukraine, Albania, Spain and Romania, at 30 September 2022 the Group recorded total revenue of Euro 193.1 million.
Be Shaping The Future S.p.A. (Be S.p.A. for short), listed in the Segment for High Requirement Shares (STAR) of Euronext Milan, performs management and coordination activities for the Group companies pursuant to art. 2497 et seq. of the Italian Civil Code, through control and coordination of operating, strategic and financial decisions of the subsidiaries and through management and control of reporting flows in readiness for preparation of both annual and interim accounting documents.
At 30 September 2022 the number of shares outstanding totalled 134,897,272, and the shareholding structure - as indicated in disclosures pursuant to art. 120 of the "Consolidated Law on Finance" (TUF) and in relation to notices received in accordance with internal dealing regulations - was as follows:
| Nazionality | No.of Shares | % Ordinary capital | |
|---|---|---|---|
| Overlord BidCo S.p.A. | Italian | 38,152,225 | 51.207 |
| Be Shaping the Future S.p.A | Italian | 7,157,460 | 5.306 |
| Float | 69,452,190 | 43.487 | |
| Total | 134,897,272 | 100.00 |
The following chart shows the Be Group structure at 30 September 20221 .
1 The Group structure does not include Paystrat Solutions SL (Pyngo), 65.26% of which is held by Payments and Business Advisors S.L. (Paystrat), Firstwaters GmbH, with headquarters in Vienna, 100% of which is held by Firstwaters GmbH, Crispy Bacon Shpk, 90% of which is held by Crispy Bacon S.r.l., as not considered relevant.
"Be" is a group specialising in the IT Consulting segment of the Financial Services sector. The organisation is divided by design into the different specialisations of business consulting, the provision of solutions and platforms and the professional services of the ICT Solutions segment and the new Digital business unit.
The Business Consulting segment focuses on the capacity to support the financial services industry in implementing business strategies and/or creating important plans for change. Its specialist skills are in constant development in the areas of payment systems, planning & control methods, regulatory compliance, information gathering and corporate governance systems for financial processes and asset management.
| No. of employees | 1,140 employees at 30 September 2022. |
|---|---|
| Core business | Banking, Insurance. |
| Segment revenue at 30.09.2022 |
Euro 139.6 million. |
| Operating units | Rome, Milan, Bologna, London, Kiev, Warsaw, Munich, Vienna, Zurich, Frankfurt, Madrid, Bucharest, Prague, Luxembourg. |
The Group operates in the Business Consulting segment through the following subsidiaries:
Be Shaping The Future - Performance, Transformation, Digital GmbH. Based in Munich, this company specialises in ICT consulting services, primarily on the German market, as Be Shaping the Future GmbH (formerly Targit GmbH) based in Vienna and Be TSE Switzerland AG based in Zurich operate in the Austrian and Swiss markets. Be Management Consulting S.p.A. holds in each company 100,00% of the company's share capital. During the second quarter, the company changed its name from Be Shaping the Future GmbH to Be Shaping The Future - Performance, Transformation, Digital GmbH. Moreover, during the second quarter, Fimas GmbH, a company based in Frankfurt, specialised in consulting and IT services for "asset managers", Stock Markets, CSDs, "clearing houses" and custodian banks, and Confinity GmbH, a company operating in the specific sector of supplying Fimas GmbH customers with temporary personnel, both wholly owned by Be Management Consulting S.p.A., were merged into Be Shaping The Future - Performance, Transformation, Digital GmbH.
Be Shaping the Future Financial Industry Solutions AG. With registered office close to Munich, this company is a wholly-owned subsidiary of Be Management Consulting S.p.A., and specialises in consulting and IT solutions in the payments sector, notably, in the SWIFT area. Be Management Consulting S.p.A. holds 100% of the company's share capital..
Il segmento dell'ICT Solutions ha la capacità di coniugare la conoscenza del settore con l'offerta di prodotti, piattaforme e soluzioni tecnologiche capaci di dar vita a linee di business legate ad applicazioni leader di segmento ad elevata specializzazione.
| 534 employees at 30 Septemmber 2022. |
|---|
| Banking, Insurance, Energy and Public Administration. |
| Euro 42.2 million. |
| Rome, Milan, Turin. |
The Be Group operates in the ICT Solutions segment through the following subsidiary:
The Digital Business segment aims to assist customer companies in implementing the digital transformation generated by the new business channels.
In particular, the Group's offer focuses on the development of web, mobile and social media applications, the production and distribution of digital content, vertical digital solutions and support for human mobility.
| No. of employees | 156 employees at 30 settembre 2022 |
|---|---|
| Core Business | Banking, Insurance, Energy and Public Administration. |
| Segment revenue at 30.09.2022 |
Euro 11.3 million. |
| Operating units | Rome, Milan, Trento, Bolzano, Marostica, Tirana |
The Be Group operates in the Digital segment through the following subsidiaries:
April 2022, the company Crispy Bacon S.r.l. underwent a merger by incorporation into Crispy Bacon Holding S.r.l., with statutory effects from April 2021 and retroactive accounting and tax effects from 1 January 2022; The company Crispy Bacon Holding S.r.l. then changed its name to Crispy Bacon S.r.l. During the second quarter of 2022, the equity investment of 51% was sold by the Parent Company to Be the Change S.r.l.
The Interim Management Report at 30 September 2022, is not audited and was prepared in accordance with the provisions of art. 154-ter of Italian Legislative Decree no. 58/1998 (Consolidated Law on Finance). The Interim Management Report has been prepared in accordance with international accounting standards IAS/IFRS, issued by the International Accounting Standards Board (IASB) and endorsed by the European Commission following the entry into force of European Regulation no. 1606/2002 and specifically on the basis of international accounting standard IAS 34 - Interim Financial Reporting, applicable to interim financial reports.
The Interim Management Report includes a concise disclosure on the financial statements, comprised of the income statement, statement of financial position, statement of cash flows and statement of changes in shareholders' equity.
The information provided in the statement of financial position refers to 30 September 2022 and to 31 December 2021; the information provided in the income statement regards the situation before tax at 30 September 2022 and 2021; the reclassified consolidated statement of cash flows indicates cash flows during the period and classified among operating, investing and financing activities.
The data are provided on a consolidated basis and presented in thousands of Euro (the functional currency) unless otherwise indicated. There could be differences in the unit amounts shown in the tables below due to rounding.
Compared to 31 December 2021 the scope of consolidation has been altered by the following events:
during the first quarter of 2022, following the approval of the partial non-proportional and asymmetrical spin-off of subsidiary Doom S.r.l. the company Be World of Wonders S.r.l was established, the share capital of which is held by Be for 75% and by ZDF S.r.l. for 25%. Be holds a minority interest of 25% in Doom S.r.l following the spin-off, which will no longer be fully consolidated.
in April, the Be Group completed the acquisition of 51% of the share capital of Synapsy S.r.l., for a price of Euro 0.8 million.
The Interim Management Report at 30 September 2022 requires discretionary measurements and accounting estimates that have an effect on the value of statement of financial position assets and liabilities and on disclosures. The final results could differ from such estimates.
The estimates are used to measure goodwill, to recognise credit risk provisions, to determine write-downs on investments or assets, and to determine amortisation and depreciation and provisions for risks and charges. The estimates and assumptions are periodically reviewed and the effects of any change are immediately reflected in the income statement.
The following table illustrates the Be Group income statement at 30 September 2022 compared with the same period of the previous year, both originating from half-year condensed consolidated financial statements prepared according to IAS/IFRS.
In accordance with the ESMA guidelines on alternative performance measures (ESMA/2015/1415), the main alternative performance indicators used to monitor the Group's economic and financial performance are highlighted below.
Gross Operating Margin (EBITDA) - a non-GAAP measurement used by the Group to measure its performance. EBITDA is calculated as the algebraic sum of profit for the period before taxes, earnings (including exchange rate gains and losses), financial expense and non-monetary items, such as amortisation/depreciation, write-downs and allocations to provisions, even if classified under other items of the income statement. Note that EBITDA is not an accounting measure under the IAS/IFRS adopted by the European Union. Therefore, the calculation method applied by the Group may not be uniform with the one adopted by other groups and, consequently, the balance obtained by the Group may not be comparable with the one calculated by other groups either.
Net Financial Indebtedness - represents a valid indicator of the Group's financial structure. It is calculated as sum of current and non-current financial payables minus cash and cash equivalents and current financial assets.
Net invested capital - an asset measure to identify uses of capital (equity and debt) invested in the company.
Total revenue was equal to Euro 193.1 million against Euro 164.0 million at 30 September 2021, for an increase of Euro 29.1 million (+17.7%).
Total revenue recorded by the foreign subsidiaries (which account for 44.6% of the Group's total revenue) was equal to Euro 86.1 million, against Euro 57.3 million at 30 September 2021 (equal to 35.0% of the Group's total revenue).
Operating costs increased by around Euro 44.7 million compared to 30 September 2021 (+32.4%), and in particular:
The Gross Operating Margin (EBITDA) was Euro 10.6 million, down 59.5% compared to 30 September 2021 (Euro 26.2 million). The EBITDA margin was 5.5% against 16.0% at 30 September 2021.
The Gross Operating Margin adjusted for extraordinary/non-recurring items (adjusted EBITDA) amounted to Euro 28.5 million, up 8.5% compared to 30 September 2021 (Euro 26.2 million) with an EBITDA margin of 14.7% compared to 16.0% at 30 September 2021.
The extraordinary/non-recurring items of a total value of Euro 17.8 million are related to a change in the incentive agreements for executive directors and key partners, which led to their acceleration compared to the original plans, and to the estimated risk quantified following discussions with the Inland Revenue Agency - also as a result of recent regulatory changes, in relation to the methods used in the past for the payment of fees to top management.
Amortisation and depreciation totalled Euro 8.0 million, up Euro 0.4 million compared to 30 September 2021 (Euro 7.6 million).
Write-downs and provisions totalled Euro 1.5 million down compared to 30 September 2021 (Euro 2.1 million).
Operating profit (loss) (EBIT) recorded Euro 1.2 million, down 93.0% compared to 30 September 2021 (Euro 16.5 million). The EBIT margin stood at 0.6% against 10.1% at 30 September 2021. The EBIT adjusted recorded Euro 19.0 million, up 14.8% compared to 30 September 2021 (Euro 16.5 million). The EBIT margin stood at 9.8% against 10.1% at 30 September 2021.
Profit (loss) before tax from continuing operations recorded a loss of Euro 0.8 million, compared to a profit of Euro 15.6 million at 30 September 2021. Profit (loss) before tax from continuing operations Adjusted (EBT Adjusted) recorded Euro 17.0 million, up 9.3% compared to 30 September 2021 (Euro 15.6 million).
At 30 September 2022 taxes amounted to Euro 2.1 million againset zero at 30 September 2021.
The Group net profit (loss) recorded a loss of Euro 4.0 million against a profit of Euro 14.3 million at 30 September 2021. The Group net profit (loss) Adjusted recorded a profit of Euro 13.8 millioni against a profit of Euro 14.3 million at 30 September 2021.
At 30 September 2022 discontinued operations had no impact on the income statement; therefore, the costs and revenue recognised in the restated consolidated income statement refer solely to "continuing operations".
| Amounts in EUR thousands | 9M 2022 | 9M 2021 | Δ | Δ (%) |
|---|---|---|---|---|
| Operating revenue | 191,579 | 162,766 | 28,813 | 17.7% |
| Other revenue and income | 1,533 | 1,245 | 288 | 23.1% |
| Total Revenue | 193,112 | 164,011 | 29,101 | 17.7% |
| Raw materials and consumables | (222) | (89) | (133) | n.a. |
| Service costs | (79,410) | (66,327) | (13,083) | 19.7% |
| Personnel costs | (102,647) | (74,464) | (28,183) | 37.8% |
| Other operating costs | (3,976) | (1,155) | (2,821) | n.a. |
| Cost of internal work capitalised | 3,776 | 4,253 | (477) | (11.2%) |
| Gross Operating Margin (EBITDA) | 10,633 | 26,229 | (15,596) | (59.5%) |
| Extraordinary-Non recurring costs | 17,837 | 0 | 0 | n.a. |
| EBITDA Adjusted | 28,470 | 26,229 | 2,241 | 8.5% |
| Amortisation and depreciation | (7,977) | (7,615) | (362) | 4.8% |
| Write-downs and provisions | (1,495) | (2,066) | 571 | (27.6%) |
| Operating Profit (Loss) (EBIT) | 1,161 | 16,548 | (15,387) | (93.0%) |
| EBIT Adjusted | 18,998 | 16,548 | 2,450 | 14.8% |
| Net financial income and expense i | (1,987) | (987) | (1,000) | n.a. |
| Profit (loss) before tax from continuing operations | (826) | 15,561 | (16,387) | n.a. |
| EBT Adjusted | 17,011 | 15,561 | (1,450) | (9.3%) |
| Taxes | (2,127) | 0 | (2,127) | n.a. |
| Net Profit (Loss) from continued operations | (2,953) | 15,561 | (18,514) | n.a. |
| Net Profit (Loss) from discontinued operations | 0 | 0 | 0 | 0 |
| Net Profit (Loss) including minority interests | (2,953) | 15,561 | (18,514) | n.a. |
| Net Profit (Loss) attributable to minority interests | 1,050 | 1,244 | (194) | (15.6%) |
| Group Net Profit (loss) | (4,003) | 14,317 | (18,320) | n.a. |
| Group Net Profit (Loss) Adjusted | 13,834 | 14,317 | (483) | (3.4%) |
The disclosure required by IFRS 8 is provided, taking into account the organisational structure of the Group, which includes the following operating segments:
Business Unit active in the business consulting sector. This business unit operates through Be Management Consulting S.p.A, Be Management Consulting Limited, Be Ukraine Think, Solve, Execute S.A., Be Shaping the Future Sp.zo.o., Be Shaping the Future GmbH (Austria), Be Shaping the Future – Performance,Transformation, Digital GmbH, Be Shaping the Future Switzerland AG, Be Shaping the Future AG, Firstwaters GmbH (Germania), Firstwaters GmbH (Austria), Payments and Business Advisors S.L., Paystrat Solutions SL (Pyngo), Soranus AG, Be Shaping the Future S.a.r.l, Tesla Consulting S.r.l., Be Your Essence S.r.l., Be Think Solve Execute RO S.r.l, Be Shaping the Future Czech republic s.r.o, Quantum Leap S.r.l.
Business Unit active in the provision of integrated solutions and systems for the financial services, insurance and utilities sectors. This business unit covers the activities performed by Be DigiTech Solutions S.p.A.
• Digital:
Business Unit active in assisting customer companies, and in particular the European Financial Industry, in implementing the digital transformation generated by the new business channels. The new business unit set up during the first half of 2020 covers the activities carried out by Iquii S.r.l., Be the Change S.r.l. il Gruppo Crispy Bacon e Synapsy S.r.l, Be World of Wonders S.r.l. the latter entered the Be Group during the first half of 2022.
This structure of the disclosure reflects that of the reports periodically analysed by management and by the Board of Directors to manage the business and is the subject of regular management reporting and planning.
The Parent Company's activities and those of residual businesses are indicated separately.
The economic position of the Group for the first nine months of 2022 compared with that of the first nine months of 2021, are reported below for continuous operations. The values provided for the operating segments are gross of intercompany transactions carried out with other Group companies from different segments, while the value of revenue by business and customer type indicated in the Management Report is net of all intercompany transactions between Group companies..
| E-MARKET SDIR |
|---|
| CERTIFIED |
| Consulting | ICT Solutions |
Digital | Corporate and other |
Infra-segment consolidation adjustments |
Minority interests |
Total | |
|---|---|---|---|---|---|---|---|
| Operating revenue | 140,116 | 46,715 | 12,031 | 4,265 | (11,548) | 0 | 191,579 |
| Other revenue | 2,315 | 208 | 169 | 569 | (1,728) | 0 | 1,533 |
| Total Revenue | 142,431 | 46,923 | 12,200 | 4,834 | (13,276) | 0 | 193,112 |
| Operating profit (loss) (EBIT) |
18,557 | 4,320 | 58 | (21,780) | 6 | 0 | 1,161 |
| Net financial expense | (1,510) | (250) | (230) | 11 | (6) | 0 | (1,987) |
| Net profit (loss) | 17,047 | 4,069 | (172) | (21,769) | (2,127) | (1,051) | (4,003) |
| Consulting | ICT Solutions |
Digital | Corporate and other |
Infra-segment consolidation adjustments |
Minority interestsi |
Total | |
|---|---|---|---|---|---|---|---|
| Operating revenue | 117,627 | 40,112 | 10,677 | 4,005 | (9,654) | 0 | 162,766 |
| Other revenue | 1,611 | 588 | 141 | 668 | (1,764) | 0 | 1,245 |
| Total Revenue | 119,238 | 40,700 | 10,818 | 4,673 | (11,418) | 0 | 164,011 |
| Operating profit (loss) (EBIT) |
17,915 | 4,301 | 315 | (5,875) | (112) | 0 | 16,548 |
| Net financial expense | (714) | (242) | (125) | 12,089 | (11,996) | 0 | (987) |
| Net profit (loss) | 16,233 | 4,060 | (84) | 6,214 | (10,864) | (1,244) | 14,317 |
The breakdown of the value of production by operating segment is provided below:
| Amounts in EUR millions | 9M 2022 | % | 9M 2021 | % | (%) |
|---|---|---|---|---|---|
| Business Consulting | 139.6 | 72.3% | 116.9 | 71.3% | 19.4% |
| ICT Solutions | 42.2 | 21.9% | 37.0 | 22.6% | 14.1% |
| Digital | 11.3 | 5.9% | 10.1 | 6.2% | 11.9% |
| TOTAL | 193.1 | 100.0% | 164.0 | 100.0% | 17.7% |
An analysis of the breakdown of total revenue by operating segment shows the following:
The breakdown of revenue by customer type is also provided below.
| Amounts in EUR million | 9M 2022 | % | 9M 2021 | % | (%) |
|---|---|---|---|---|---|
| Banks | 150.7 | 78.0% | 130.0 | 79.3% | 15.9% |
| Insurance | 18.1 | 9.4% | 12.9 | 7.9% | 40.3% |
| Industry | 7.4 | 3.8% | 7.5 | 4.6% | (1.3%) |
| Public Administration | 1.1 | 0.6% | 0.1 | 0.1% | n.a. |
| Other | 15.8 | 8.2% | 13.5 | 8.2% | 17.0% |
| TOTAL | 193.1 | 100.0% | 164.0 | 100.0% | 17.7% |
The breakdown of revenue by geographical area is also provided below:
| Amounts in EUR millions | 9M 2022 | % | 9M 2021 | % | (%) |
|---|---|---|---|---|---|
| Italy | 107.0 | 55.4% | 106.7 | 65.0% | 0.3% |
| DACH Region (Germany, Austria,Switzerland) |
57.6 | 29.8% | 34.5 | 21.1% | 66.8% |
| U.K.e Spain | 16.8 | 8.7% | 13.1 | 8.0% | 28.4% |
| Cee Region (Polonia, Ukraine, Romania) |
11.7 | 6.1% | 9.7 | 5.9% | 20.1% |
| TOTAL | 193.1 | 100.0% | 164.0 | 100.0% | 17.7% |
Lastly, it should be noted that in the first nine months of 2022 55.4% of revenue was generated by the domestic market and the remaining 44.6% by the foreign market.
The significant weight of the DACH Region (DE, AUT and SUI) on revenue is confirmed, contributing Euro 57.6 million, up 66.8% compared to 30 September 2021; the Cee Region (Poland, Ukraine, Romania) records a considerable increase of 20.1% compared to the same period of the previous year (Euro 11.7 million compared to Euro 9.7 million at 30 September 2021), while the UK and Spanish markets generated Euro 16.8 million at 30 September 2022 compared to Euro 13.1 million at 30 September 2021 (+28.4%).
The total number of Be Group employees at 30 September 2022 was 1,.884; the following table shows Be Group employees by operating segment:
| 30.09.2022 | |
|---|---|
| Consulting | 1,140 |
| I.C.T.Solutions | 534 |
| Digital | 156 |
| Corporate and Other | 54 |
| TOTAL | 1,884 |
A summary of the consolidated statement of financial position at 30 September 2022, is shown below, compared to the same statement at 31 December 2021.
| Amounts in EUR thousands | 30.09.2022 | 31.12.2021 | | (%) |
|---|---|---|---|---|
| Non-current assets | 134,697 | 131,582 | 3,115 | 2.4% |
| Current assets | 72,488 | 37,142 | 35,346 | 95.2% |
| Non-current liabilities | (10,140) | (16,320) | 6,180 | (37.9%) |
| Current liabilities | (78,435) | (77,205) | (1,230) | 1.6% |
| Discontinued operations | 0 | 2,706 | (2,706) | (100.0%) |
| Net Invested Capital | 118,610 | 77,905 | 40,705 | 52.3% |
| Shareholders' Equity | 64,344 | 67,917 | (3,573) | (5.3%) |
| Indebtedness from discontinued operations | 0 | 2,434 | 0 | n.a. |
| Financial indebtedness | 54,266 | 7,554 | 0 | 0.0% |
| Net Financial Indebtedness | 54,266 | 9,988 | 44,278 | n.a. |
Non-current assets mostly consist of goodwill equal to Euro 101.7 million, recognised at the time of business combinations, intangible assets equal to Euro 17.5 million, mostly relating to software, rights of use equal to Euro 8.9 million, deferred tax assets equal to Euro 2.7 million, deferred tax assets equal to Euro 0.5 million receivables and other non-current assets, and equity investments, for a total of Euro 3.5 million.
Current assets recorded a rise of Euro 35.3 million compared to 31 December 2021 mainly due to the change in Assets deriving from contracts with customers and trade receivables.
Non-current liabilities mostly refer to payables for post-employment benefits (TFR) of Euro 7.1 million, deferred tax liabilities of Euro 2.6 million and provisions for risks and charges of Euro 0.4 million.
Current liabilities are mostly comprised of trade payables of Euro 22.7 million, provisions for risks and charges of Euro 9.4 million, other liabilities of Euro 41.3 million and tax payables totalling Euro 5.1 million. The item records an overall increase of Euro 1.2 million, mainly due to the change in other liabilities and payables and provisions for current risks.
Consolidated shareholders' equity was Euro 64.3 million, against Euro 67.9 million at 31 December 2021.
The breakdown of Net working capital is provided below.
| Amounts in EUR thousands | 30.09.2022 | 31.12.2021 | | (%) |
|---|---|---|---|---|
| Inventories | 157 | 157 | 0 | 0.0% |
| Receivables from assets with customers | 40,513 | 9,589 | 30,924 | n.a. |
| Trade receivables | 24,484 | 23,556 | 928 | 3.9% |
| Trade payables | (22,691) | (27,356) | 4,665 | (17.1%) |
| Discontinued operations | 0 | (527) | 527 | 0.0% |
| Net Operating Working Capital (NOWC) | 42,463 | 5,419 | 37,044 | n.a. |
| Other short-term receivables | 7,334 | 3,840 | 3,494 | 91.0% |
| Other short-term liabilities | (55,744) | (49,850) | (5,894) | 11.8% |
| Discontinued operations | 0 | (20) | 20 | (100.0%) |
| Net Working Capital (NWC) | (5,947) | (40,611) | 34,664 | (85.4%) |
The total net financial position was negative for Euro 54.3 million (Euro 45.5 million at 30 September 2021 proforma). Net financial indebtedness, less the components arising from payables from rights of use and from payables for Put&Call option on minority interests amounted to Euro 25.8 million (Euro 18.8 million at 30 September 2021).
Net financial indebtedness from operations amounted to Euro 20.3 million (Euro 1.8 million at 30 September 2021) with a decrease of Euro 19 million compared to 30 September 2021.
| Amounts in EUR thousands | 30.09.2022 | 30.09.2021 | |
|---|---|---|---|
| Net Financial Position | (54,266) | (46,532) | (7,734) |
| Expiry value of Put&Call on minority interests | (18,704) | (17,060) | (1,644) |
| Payables for right of use | (9,715) | (10,631) | 916 |
| Net Financial Indebtedness | (25,847) | (18,841) | (7,006) |
| - of which new M&A | (1,694) | (12,825) | 11,131 |
| - of which Dividends | (3,832) | (3,831) | (1) |
| - of which purchase of own shares | 0 | (432) | 432 |
| Net financial indebtedness from operations | (20,321) | (1,753) | (18,658) |
A detailed breakdown is provided below, calculated (in absolute value) pursuant to Consob Communication DEM/6064293 of 28 July 2006 and in accordance with the updated ESMA recommendation no. 32-382-1138 of 04 March 2021 for the first nine months of 2022 and for 2021.
| Cash | 30.09.2022 | 31.12.2021 | | |
|---|---|---|---|---|
| A Cash equivalents | 17,292 | 80,167 | (62,875) | (78.4%) |
| B Other current financial assets | 0 | 0 | 0 | n.a. |
| C Cash | 516 | 177 | 339 | n.a. |
| D Cash and cash equivalents (A+B+C) | 17,808 | 80,344 | (62,536) | (77.8%) |
| E Current financial payables | 7,135 | 456 | 6,679 | n.a. |
| F Current portion of non-current financial payables | 20,394 | 30,089 | (9,695) | (32.2%) |
| G Current financial indebtedness (E+F) | 27,529 | 30,545 | (3,016) | (9.9%) |
| H Net current financial indebtedness (G-D) | (9,721) | (49,799) | 59,520 | n.a. |
| I Non-current financial payables |
25,841 | 39,507 | (13,666) | (34.6%) |
| J Debt instruments |
0 | 0 | 0 | n.a. |
| K Trade payables and other non-current payables | 18,704 | 20,280 | (1,576) | (7.8%) |
| L Net non-current financial indebtedness (I+J+K) | 44,545 | 59,787 | (15,242) | (25.5%) |
| M Total financial indebtedness (H+L) | 54,266 | 9,988 | 44,278 | n.a. |
With regard to items in the table, in addition to cash and cash equivalents of Euro 17.3 million (Euro 80.2 million at 31 December 2021):
On 12 March 2010, the Company's Board of Directors adopted the Procedure for Related-Party Transactions, subsequently amended on 23 January 2014, 13 February 2014, 15 May 2014, 1 July 2014, 11 May 2017 and 6 May 2021. For further details, this document is published on the Company web site (www.be-tse.it).
It should be noted that the amendments resolved on 6 May 2021 were necessary in light of the changes made to regulation no. 17221 of 12 March 2010 by Consob, with resolution no. 21624 of 10 December 2020, which came into effect on 1 July 2021. With regard to related-party transactions, including intercompany transactions, it should be noted that these cannot be classified as atypical or unusual, being part of the normal course of operations of Group companies. These transactions are settled at arm's length, based on the goods and services provided.
The Be Group's related party with which economic and equity transactions was recognised at 30 September 2022 TIP Tamburi Investment Partners S.p.A.
With regard to Messrs Stefano Achermann and Carlo Achermann and the companies controlled by them respectively - Innishboffin S.r.l. and Carma Consulting S.r.l. - the economic transactions that took place in the period substantially refer to fees paid for the positions of Executive and Company Director of Group companies and, like remuneration for other members of the Board of Directors and Board of Statutory Auditors, are not included in the following tables.
No significant transactions were performed at 30 September 2022.
The following tables illustrate the Group's costs and revenue, payables and receivables due to/from related parties:
| Receivables | Payables | |||||
|---|---|---|---|---|---|---|
| Trade receivables and other receivables |
Other receivables |
Financial receivables |
Trade and other payables |
Other payabl es |
Financial payables |
|
| Related parties | ||||||
| T.I.P. S.p.A | 0 | 0 | 0 | 18 | 0 | 0 |
| Total related parties |
0 | 0 | 0 | 18 | 0 | 0 |
| Revenue | Costs | |||||||
|---|---|---|---|---|---|---|---|---|
| Revenue | Other revenue |
Financial income |
Services | Other costs |
Financial expense |
|||
| Related parties | ||||||||
| T.I.P. S.p.A | 0 | 0 | 0 | 45 | 0 | 0 | ||
| C. Achermann | 0 | 0 | 0 | 26 | 0 | 0 | ||
| Total related parties | 0 | 0 | 0 | 71 | 0 | 0 |
Detailed below are the main risks and uncertainties that could affect the business activities, financial conditions and prospects of the Be Group.
In order to further improve operating performance, the Company believes it is important to achieve the strategic objectives of the 2022-2024 Business Plan. This Plan was prepared by the Directors on the basis of forecasts and assumptions inherent to future trends in operations and the reference market. The forecasts represent the best estimate of future events that are expected to occur and the projection of results from the actions that management intends to undertake. These were estimated on the basis of final figures, orders already received or sales to be made to established customers, and therefore have a higher probability of actually occurring. Vice versa, the assumptions relate to future events and actions, fully or partly independent from management action. Consequently, the Directors acknowledge that the strategic objectives identified in the Business Plan, though reasonable, present profiles of uncertainty due to the chance nature of future events occurring and the characteristics of the reference market, and also as regards the occurrence of events represented in the plan and their extent and timing.
The Be Group is exposed to financial risks associated with its operations, particularly interest rate risk, liquidity risk, credit risk and the risk of cash flow fluctuations. In addition, essential upkeep of the bank credit facilities held is important to the Group in order to meet its overall current funding needs and to achieve the objectives of the 2022- 2024 Plan.
The Be Group could have a negative impact on the value of its shareholders' equity if there should be any impairment to goodwill recognised in the financial statements at 31 March 2022, which may be necessary if insufficient cash flows are generated to satisfy those forecast and envisaged in the 2022-2024 Plan.
The Be Group is involved in legal proceedings, in terms of litigation cases as defendant i.e. where the Company has been summoned by third parties - as well as in cases as plaintiff where the Company has summoned third parties.
In recent years, the Be Group began a restructuring of its area of business, implementing, when possible, reduction of personnel, also through transfers. There is a risk of appeals against such actions and the proceedings have given rise to prudential allocation of provisions in the Consolidated financial statements. Uncertainty remains in any event regarding the decisions of the authorities involved.
The ICT consulting market is highly competitive. A number of competitors could be able to expand their product mix to our detriment. In addition, an intensification of the level of competition could affect Group business and the option of consolidating or widening its competitive position in the reference sectors, with subsequent repercussions on business and on the income, equity and financial positions.
The Group operates in a market characterised by profound and continuous technological changes that call for the capacity to adapt quickly and successfully to such developments and to the changing needs of its customers. Any inability of the Group in adapting to new technologies and therefore to the needs of its customers could have a negative impact on operating performance.
The Group's success depends largely on certain key personnel that have been a determining factor in its development, in particular the executive directors of the Parent Company. The Group companies also have an executive team with many years of experience in the field, playing a crucial role in managing its activities. The loss of any of these key figures without a suitable replacement, and the inability to attract and retain new, qualified resources, could have a negative impact on the Group's prospects, business activities, operating performance and financial position. Management considers in any event that the Company has an operational and executive structure capable of ensuring management of corporate affairs as a going concern.
As part of its internationalisation strategy, the Group could be exposed to risks typical of international operations, including those relating to changes in the political, macroeconomic, tax and/or regulatory frameworks and to fluctuating exchange rates.
With regard to the main factors of uncertainty existing at the time of submission of this Report, those relating to the ongoing medical emergency relating to the Covid-19 (Coronavirus) pandemic should be noted.
The Be Group continued to operate during the Covid-19 health emergency, safeguarding the health of its employees and partners and expanding the use of remote working methods where possible. At the operational level, business continuity has been guaranteed everywhere.
Specifically, as mentioned above, given the particular type of Be Group's reference market - mainly large Financial Institutions - the Covid-19 pandemic had almost no impact on the company's business. During the preparation of the consolidated financial statements at 30 June 2022, as part of the main measurement and estimation processes, and in line with what was carried out for the consolidated accounts at 31 December 2021, sensitivity analyses were conducted to identify the value of the key parameters for which the recoverable amounts would coincide with book values.
Although conducted at a time of general uncertainty, these analyses did not indicate any clear risk of future impairment of the amounts recognised in the financial statements at 30 June 2022, considering the macro-economic scenario consequent to the aforementioned pandemic.
In relation to the uncertainties arising from the ongoing conflict between Russia and Ukraine, it should be noted that the Be Group has its own presence in Kiev through its
subsidiary Be Ukraine. At present, ordinary activities continue uninterrupted and there are no interruptions in payment flows. It is impossible to define reliable development scenarios; however, due to the insignificant size (less than 1%) of the company's contribution to the Group's consolidation, no significant economic impact is foreseen even if the current situation worsens.
The Be Group's development activities have always aimed to consolidate customer relations, develop new forms of business for them and acquire new customers. The main development projects regard the technological platforms owned by the Be Group. In particular, during the first half of 2022, investments were made for the development and upgrade of the technological platforms "Universo Sirius" - relating to the management of Life and Non-life insurance portfolios - by Be Digitech Solutions, of the company's internal ICT system by Be Digitech Solutions and Be Management Consulting, of the digital applications by Iquii and Tesla, and of the IT platforms of Be Ukraina and Be Shaping The Future - Performance, Transformation, Digital GmbH, specialised in various areas of the banking industry. The Be Group will continue to invest in development, planning additional project opportunities. The objective of the latter will be to expand the offer through the realisation of technological platforms to provide services to customers.
Pursuant to art. 2428 paragraph 4 of the Italian Civil Code, we note that the Parent Company holds 7,157,460 own shares with a face value of Euro 1, equal to 5.306% of the share capital.
On September 26, 2022, following the satisfaction of all the outstanding conditions precedent, the acquisition took place by Engineering – Ingegneria Informatica S.p.A. ("Engineering") through a wholly owned corporate vehicle, namely Overlord BidCo S.p.A., (the "Purchaser") of Be shares, held by of the former cvontrolling shareholders (TIP, Stefano Achermann and his controlled company Innishboffin S.r.l., Carlo Achermann and his controlled company Carma Consulting S.r.l)., at a price per share of Euro 3.45 (the "Unitary Share Price") as well of shares held by a group of key managers. The Purchaser acquired therefore a controlling stake in the share capital of Be equal to 51.207%. As a consequence, the Purchaser will launch a mandatory tender offer on the residual ordinary shares of Be pursuant to Articles 102 and 106 of TUF for a per share consideration equal to the Unitary Share Price, aimed at the de-listing of Be from the Euronext STAR Milan segment (the "MTO").
On October 7, 2022 the Board of Directors resolved - unanimously and with the approval of the Board of Statutory Auditors - to appoint by co-optation, pursuant to Article 2386 of the Italian Civil Code, Mr. Alberto De Antoni and Ms. Nevena Koleva Batchvarova, to replace the resigning directors Mr. Carlo Achermann (who held the position of Executive Chairman of the Board of
Directors) and Ms. Lucrezia Reichlin (who held the position of independent non-executive director). Furthermore, the Board of Directors today appointed Mr. Claudio Berretti as Chairman of the Company's Board of Directors.
In light of Group's period results, the Company believes at the moment it can achieve Be S.p.A. Investor Relations | Claudio Cornini | +39 06 54 24 86 24 | [email protected] be-tse.it | follow us on INVESTORS INFORMATION its yearly objectives as well as the 2020-2022 Business Plan targets.
With regard to the uncertainties arising from the ongoing conflict between Russia and Ukraine, it is recalled that the Be has its own presence in Kiev through its subsidiary Be Ukraine. The company operates with branches of leading International banks, with 40 direct employees and about 0.7 ml/€ of turnover. At present, ordinary activities continue without interruption and there have been no interruptions in payment flows. It is not possible to define reliable scenarios of evolution. However there are no significant economic impacts even in the event of a worsening of the current situation, given the small size (less than 1%) of the company's contribution to the Group's consolidated figures.
Milan, 24 October 2022
/signed/ Stefano Achermann For the Board of Directors Chief Executive Officer
| Amounts in EUR thousands | 30.09.2022 | 31.12.2021 |
|---|---|---|
| NON-CURRENT ASSETS | ||
| Property, plant and equipment | 2,693 | 2,714 |
| Rights of use | 8,855 | 10,303 |
| Goodwill | 101,675 | 96,740 |
| Intangible assets | 17,512 | 18,733 |
| Equity investments in associates | 1,094 | 0 |
| Equity investments in other companies | 1,893 | 1,919 |
| Derivative instruments | 982 | 0 |
| Loans and other non-current assets | 487 | 673 |
| Deferred tax assets | 488 | 500 |
| Total non-current assets | 135,679 | 131,582 |
| CURRENT ASSETS | ||
| Inventories | 157 | 157 |
| Assets deriving from contracts with customers | 40,513 | 9,589 |
| Trade receivables | 24,484 | 23,556 |
| Other assets and receivables | 5,673 | 3,570 |
| Direct tax receivables | 1,661 | 270 |
| Financial receivables and other current financial assets | 516 | 177 |
| Cash and cash equivalents | 17,292 | 78,447 |
| Total current assets | 90,296 | 115,766 |
| Discontinued operations | 0 | 6,963 |
| Total discontinued operations | 0 | 6,963 |
| TOTAL ASSETS | 225,975 | 254,311 |
| SHAREHOLDERS' EQUITY | ||
| Share capital | 27,109 | 27,109 |
| Reserves | 39,379 | 27,702 |
| Net profit (loss) attributable to owners of the Parent Company | (4,003) | 11,645 |
| Group Shareholders' equity | 62,485 | 66,456 |
| Minority interests: | ||
| Capital and reserves | 809 | 553 |
| Net profit (loss) attributable to minority interests | 1,050 | 908 |
| Minority interests | 1,859 | 1,461 |
| TOTAL SHAREHOLDERS' EQUITY | 64,344 | 67,917 |
| NON-CURRENT LIABILITIES | ||
| Financial payables and other non-current financial liabilities | 20,552 | 31,729 |
| Financial liabilities for non-current rights of use | 6,271 | 7,615 |
| Derivative instruments | 0 | 31 |
| Provision for non-current risks | 403 | 3,613 |
| Post-employment benefits (TFR) | 7,098 | 8,027 |
| Deferred tax liabilities | 2,639 | 4,679 |
| Other non-current liabilities | 18,704 | 16,303 |
| Total Non-current liabilities | 55,667 | 71,997 |
| CURRENT LIABILITIES | ||
| Financial payables and other current financial liabilities | 24,085 | 26,933 |
| Financial liabilities for current rights of use | 3,444 | 3,567 |
| Trade payables | 22,691 | 27,356 |
| Provision for current risks | 9,368 | 3,903 |
| Tax payables | 5,085 | 4,877 |
| Other liabilities and payables | 41,291 | 41,070 |
| Total Current liabilities | 105,964 | 107,706 |
| Discontinued operations | 0 | 6,691 |
| Total discontinued operations | 0 | 6,691 |
| TOTAL LIABILITIES | 161,631 | 186,394 |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 225,975 | 254,311 |
| Valori in migliaia di Euro | 9M 2022 | 9M 2021 | Δ | Δ (%) |
|---|---|---|---|---|
| Revenue | 191,579 | 162,766 | 28,813 | 17.7% |
| Other revenue and income | 1,533 | 1,245 | 288 | 23.1% |
| Total Revenue | 193,112 | 164,011 | 29,101 | 17.7% |
| Raw materials and consumables | (222) | (89) | (133) | n.a. |
| Service costs | (79,410) | (66,327) | (13,083) | 19.7% |
| Personnel costs | (102,647) | (74,464) | (28,183) | 37.8% |
| Other operating costs | (3,976) | (1,155) | (2,821) | n.a. |
| Cost of internal work capitalized | 3,776 | 4,253 | (477) | (11.2%) |
| Gross Operating Margin (EBITDA) | 10,633 | 26,229 | (15,596) | (59.5%) |
| Extraordinary-Non recurring costs | 17,837 | 0 | 0 | n.a. |
| EBITDA Adjusted | 28,470 | 26,229 | 2,241 | 8.5% |
| Amortisation and depreciation | (7,977) | (7,615) | (362) | 4.8% |
| Write-downs and provisions * | (1,495) | (2,066) | 571 | (27.6%) |
| Operating Profit (Loss) (EBIT) | 1,161 | 16,548 | (15,387) | (93.0%) |
| EBIT Adjusted | 18,998 | 16,548 | 2,450 | 14.8% |
| Net financial income and expense | (1,987) | (987) | (1,000) | 101.3% |
| Profit before tax from continuing operations (EBT) | (826) | 15,561 | (16,387) | n.a |
| EBT Adjusted | 17,011 | 15,561 | (1,450) | n.a |
| Taxes | (2,127) | 0 | (2,127) | n.a. |
| Net profit (loss) from continued operations | (2,953) | 15,561 | (18,514) | n.a. |
| Net profit (loss) from discontinuing operations | 0 | 0 | 0 | 0 |
| Net profit (loss) including minority interests | (2,953) | 15,561 | (18,514) | n.a. |
| Net result - Minority Interest | 1,050 | 1,244 | (194) | (15.6%) |
| Group Net profit (loss) | (4,003) | 14,317 | (18,320) | n.a. |
| Group Net profit (loss) Adjusted | 13,834 | 14,317 | (483) | (3.4%) |
| Amounts in EUR thousands | 30.09.2022 | 30.09.2021 |
|---|---|---|
| Operating activities: | ||
| Profit (loss) for the period | (2,953) | 15,561 |
| Adjustments of items that do not affect liquidity | 27,499 | 11,800 |
| a) Cash flow from operating activities | 24,546 | 27,361 |
| b) Change in net working capital | (56,509) | (34,405) |
| Operating cash flow (a+b) | (31,963) | (6,684) |
| c) Cash flow generated (absorbed) by investing activities | (5,210) | (14,059) |
| d) Cash flow generated (absorbed) by financing activities | (23,982) | 8,171 |
| e) Cash flow generated (absorbed) by discontinued operations | 0 | 0 |
| Total cash flow (a+b+c+d+e) | (61,155) | (12,572) |
| Net cash and cash equivalents - opening balance | 78,447 | 60,580 |
| Net cash and cash equivalents - closing balance | 17,292 | (48,008) |
| Change in net cash and cash equivalents | (61,155) | (12,572) |
| Amounts in EUR thousands | Share Capital |
Reserves and retained earnings |
Profit (loss) for the period/year |
Group Shareholders ' equity |
Minority interests |
Total |
|---|---|---|---|---|---|---|
| SHAREHOLDERS' EQUITY AT 31.12.2020 |
27,109 | 20,935 | 7,973 | 56,017 | 2,876 | 58,893 |
| Net profit (loss) | 11,645 | 11,645 | 908 | 12,553 | ||
| Other items of comprehensive income | 749 | 749 | 0 | 749 | ||
| Net comprehensive profit (loss) | 749 | 11,645 | 12,394 | 908 | 13,302 | |
| Allocation of prior year profit (loss) | 7,973 | (7,973) | 0 | 0 | 0 | |
| Purchase of own shares | (368) | (368) | 0 | (368) | ||
| Dividend distribution | (3,832) | (3,832) | (78) | (3,910) | ||
| Other | 2,245 | 2,245 | (2,245) | 0 | ||
| SHAREHOLDERS' EQUITY AT 31.12.2021 |
27,109 | 27,702 | 11,645 | 66,456 | 1,461 | 67,917 |
| Net profit (loss) | (4,003) | (4,003) | 1,050 | (2,953) | ||
| Other items of comprehensive income | 2,506 | 0 | 2,506 | 0 | 2,506 | |
| Net comprehensive profit (loss) | 2,506 | (4,003) | (1,497) | 1,050 | (447) | |
| Allocation of prior year profit (loss) | 11,645 | (11,645) | 0 | 0 | 0 | |
| Dividend distribution | (3,832) | (3,832) | (107) | (3,939) | ||
| Other | 1,358 | 1,358 | (545) | 813 | ||
| SHAREHOLDERS' EQUITY AT 30.09.2022 |
27,109 | 39,379 | (4,003) | 62,485 | 1,859 | 64,344 |
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