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CY4GATE S.p.A. Investor Presentation 2024
6295_rns_2024-05-15_8e250723-0c1a-40be-bc69-366c26e5f7e5.pdf
Investor Presentation
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Cy4Gate Q1 2024 Financial Results
May 15, 2024
AGENDA
- ➢ Business Update
- ➢ Q1 2024 Financials
- ➢ Strategy & Outlook
360° CYBER VENDOR
Robust technology engine with proprietary solutions
UNIQUE POSITIONING
Unique positioning in the cyber space with presence in all the 3 market segments
TAILORMADE SOLUTIONS
Tailormade proprietary solutions to suit customer needs
GLOBAL PRESENCE Extensive coverage of the domestic and foreign markets
HUGE TARGET ADDRESSABLE MARKET
Governments – Big Corporation & SME in the cyberintelligence and cybersecurity markets
TALENT AND PEOPLE "AT THE CORE" Investments in human capital and talent development
PARTNERSHIP & M&A GROWTH
Expand our business through excellent partnership and M&A activity
LISTED ON THE STAR MARKET
Listed since June 2023 on the STAR Market of the Italian Stock Exchange
Focus on M&A to become an European Cyber Leader Company
RCS is a leading Italian player operating in the forensic intelligence & data analysis market, the best target for Cy4Gate's growth ambition - Cy4Gate acquired 100% of the Company. In 2020, RCS recorded revenues for over € 40 million.
DIATEAM is a French company operating in the cyber security sector for specialises for Government and corporate customers – Cy4Gate acquired 55% of the Company. In 2021, Diateam recorded revenues for over € 2 million.
XTN is an Italian company operating in the IT security sector, with solutions aimed at identifying risk behaviour typical of abuse or fraud – Cy4Gate acquired 97.8% of the Company in partnership with Alfa Group, 77.8% and 20% respectively. In 2022, XTN recorded revenues for over € 3 million.
2024 Partnership
February 2024
Attiva
Signed a strategic agreement which sees ATTIVA as distributor for Cy4Gate solutions on the Italian corporate market both in the CyberSecurity and Decision Intelligence fields.
May 2024
Innovery
Signed a strategic agreement which sees Innovery as distributor for Cy4Gate solutions on the Italian corporate market both in the CyberSecurity and Decision Intelligence fields.
Q1 2024 Key Data
-
Including other operating revenues; comparative 2023 does not include 1Q of XTN
-
Negative result (loss for the period) includes D&A related to Purchase Price Allocation and extraordinary costs
Q1 2024 Revenues Breakdown
By business line By geographical area
Q1 2024 People Investment
Total personnel increased in the first quarter of 2024 by a total of 34 resources:
- Increase of 27 resources related to the XTN acquisition that will strengthen the cybersecurity line
- Increase of 35 resources in engineering and commercial & staff compared to 28 exits
Q1 2024 Profit & Loss
| € mln | 1 Q1 2024 |
Q1 2023 |
|---|---|---|
| Operating Revenues | 14.4 | 14.1 |
| Other Operating Revenues |
0.2 | 0.2 |
| Total Revenues | 14.7 | 14.3 |
| Services, Procurement & other operating costs |
6.6 | 7.2 |
| Personnel Costs | 8.0 | 7.4 |
| Costs | 14.6 | 14.6 |
| EBITDA | 0.04 | (0.3) |
| D&A [including leasing costs] |
(3.3) | (2.8) |
| EBIT Adjusted | (3.3) | (3.1) |
| D&A [related to PPA] | (1.1) | (1.0) |
| EBIT | (4.4) | (4.1) |
| Financial Income (Expenses) |
(0.6) | (0.3) |
| One off costs | (0.1) | (0.7) |
| Income Taxes |
(0.2) | 0.3 |
| Net Result | (5.4) | (4.8) |
| Net Result Adjusted |
(4.5) | (3.3) |
Executive Summary:
- Revenues +2% compared to the first quarter of 2023, with the consolidation of XTN.
- Costs in line with the Group's costs in Q1 2023, despite the inclusion of XTN Cognitive Security in the perimeter. Net of the acquired company, costs decreased by about 3% YoY.
- EBITDA turned positive compared to the same quarter last year, mainly due to the consolidation of XTN.
- Net Result recorded a loss of € 5.4 million affected by higher D&A and interests/charges.
- Net Result Adjusted considers the Net Result as above described, net D&A on Diateam PPA and Extraordinary costs.
Q1 2024 Asset & Liabilities
| € mln | Q1 2024 | FY 2023 |
|---|---|---|
| Fixed assets | 96.2 | 87.9 |
| Inventory | 0.7 | 0.8 |
| Contract assets (liabilities) | 3.6 | 3.1 |
| Trade receivables | 52.8 | 53.7 |
| Trade payables | (12.1) | (14.4) |
| Trade Working Capital | 45.0 | 43.1 |
| Other assets (liabilities) |
(13.3) | (6.3) |
| Net Working Capital | 31.7 | 36.8 |
| Net Capital Invested | 127.9 | 124.8 |
| Cash and cash equivalents | 26.9 | 17.6 |
| Financial assets | 1.5 | 1.4 |
| Financial Liabilities | (47.8) | (28.8) |
| Lease liabilities | (3.6) | (3.8) |
| Net Financial Position | (23.0) | (13.6) |
| Diateam put option liability |
(5.7) | (5.7) |
| Net Financial Position Adjusted | (17.3) | (7.9) |
| Shareholders' Equity | (104.8) | (111.1) |
| Sources | (127.9) | (124.8) |
Executive Summary:
- Fixed Assets increase due to the goodwill of the acquisition of 77.8% of the share capital of XTN.
- Net Working Capital decreased thanks to other liabilities mainly for the consolidation of XTN.
- Net Financial Position is negative affected by the absorption of capital to finance Capex and working capital, M&A and buyback programme.
- Shareholders' Equity stood at 104.8 million compared to 111.1 million at December 31, 2023.
Our growth Strategy: Market
Cy4Gate Group portfolio – cyber intelligence & cyber security products - perfectly fits with the following 3 fast growing markets, both in Italy and abroad:
Defence
Security & Law Enforcement
Corporate
- Increasing internal and external security threats and undergoing military network-centric modernization;
- Market CAGR 8% predicted to grow to 1350B\$ in 2030 from 750B\$ (2022).
- Digital crime via digital/electronic devices is LEAs biggest challenge; AI is a key enabler;
- Market is globally growing at 9% CAGR up to 2028;
- Need for cases management, track evidences, data gathering and correlation, creation of reports.
- Double digit growth for digital transformation market (around 20% CAGR to 2027);
- Cyber security market is underpenetrated in terms of for SMEs, targets of massive attacks.
Products involved
- Decision Intelligence & AI (Quipo) for C2 platforms
- ▪Cyber security products and services bundle (RTA, Diateam, CTI, customization services)
- Decision Intelligence & AI (Quipo & Mito) for data gathering and correlation ▪Forensic Intelligence suite
- Decision Intelligence & AI (Quipo)
▪Cyber security products and services bundle (RTA, Diateam, CTI, Pronto Cyber, Services) for a 360° capabilities coverage
Our growth Strategy: Actions
2024 2025-2026
Defence
Security & Law Enforcement
Corporate
- Strengthen industrial partneships with Tier-1 Italian and European Defence Contractors
- Penetrate new geographies through Cyber Academy and Cyber Labs
- Increase direct domestic and international market penetration leveraging mother company network
- Consolidate the Italian market, focusing on more relevant P.P.O. districts whilst decreasing exposure on less profitable Offices
- Maintain commercial advantage while mitigating need for relevant investments through selected partnership with specialized boutique firms
- Increase market penetration of newly developed tactical devices in Italy and abroad
- Shift from products to capabilities offering to improve competitiveness (cyber security platform)
- Complement sales force efforts through new effective channel partnerships (Attiva, Innovery)
- Enlarge domestic market penetration in big/medium size corporation through a reinforced and well seasoned sales team
- Pursue up-selling and cross-selling opportunities in new corporate segments (banking, automotive, luxury, travel) thanks to XTN acquisition
- Capture EU funds (NATO, EDA, ESA) for R&D in the cyber also through industrial partnership
- Take part to international consortia or JVs for pluriannual defence programs
- Progressively gain relevant shares and presence in the more stable European region
- Ensure consistent growth in the Spanish market leveraging on our pluriannual presence in the Country (Dars), to create Cy4 second domestic market for revenues after Italy.
- Expand business to new geographies in E.U. partnering with foreign channels and fostering development of an international sales team
- Push on inorganic growth via M&A
Opportunities
- The strategy will be a key enabler to:
- ✓ intercept growing Defence market needs, characterized by global relevant investments, huge size and pluri-annual contracts, enabling quick creation of backlog, thus supporting Corporate sales in seasonality risks reduction
- ✓ further consolidate leadership position in Italy (notwithstanding sector justice reform) and boost growth primarily in E.U.
- ✓ expand Corporate market presence to support creation of recurring stream of regular revenues throughout the year, accelerating the process of seasonality mitigation
Expected Revenues 2024
| PIPELINE | CONVERSION RATE | TOTAL | |
|---|---|---|---|
| TOTAL | ~210 €M | ~16% | ~32-35 €M |
| BACKLOG | RECURRING | TOTAL | |
| TOTAL | ~21 €M | ~31-34 €M | ~52-55 €M |
Headquarter
Via Coponia, 8 00131 Rome - Italy
CFO & Investor Relations Manager Marco Latini
Investor Relations Advisor
CDR Communication [email protected] [email protected]