Interim / Quarterly Report • Nov 29, 2016
Interim / Quarterly Report
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| SIGNIFICANT GROUP FIGURES AND RESULT INDICATORS 3 |
|---|
| SUMMARY OF THE OPERATIONS IN THE THIRD QUARTER OF 2016 5 |
| CORPORATE BODIES 6 |
| EXPRIVIA: FUTURE. PERFECT. SIMPLE 8 |
| THE EXPRIVIA BUSINESS MODEL 11 |
| MARKETS 12 |
| SKILLS 18 |
| PERFORMANCE OF EXPRIVIA GROUP RESULTS 19 |
| SIGNIFICANT EVENTS IN THE THIRD QUARTER OF 2016 24 |
| EVENTS AFTER 30 SEPTEMBER 2016 24 |
| STAFF AND TURNOVER 25 |
| INTER-COMPANY RELATIONS 27 |
| RELATIONS WITH RELATED PARTIES 28 |
| GROUP RELATIONS WITH PARENT COMPANIES 28 |
| BUSINESS OUTLOOK 30 |
| QUARTERLY CONSOLIDATED FINANCIAL STATEMENTS OF THE EXPRIVIA GROUP 31 |
| EXPLANATORY NOTES TO THE EXPRIVIA GROUP FINANCIAL STATEMENTS 42 |
The table below gives a summary of the main consolidated economic, capital and financial data of the group as reported in the balance sheet, compared to the figures as at 30 September 2016, 30 September 2015 and 31 December 2015.
| 30.09.2016 | 30.09.2015 | 31.12.2015 | |
|---|---|---|---|
| Total production revenues | 101,728,362 | 106,096,532 | 144,812,442 |
| net proceeds and variation to work in progress to order | 98,429,816 | 102,178,694 | 139,360,862 |
| increase to assets for internal work | 1,308,388 | 1,005,048 | 1,358,828 |
| other proceeds and contributions | 1,990,158 | 2,912,790 | 4,092,752 |
| Difference between costs and production proceeds (EBITDA) | 8,312,999 | 10,026,556 | 15,311,239 |
| % on production proceeds | 8.2% | 9.5% | 10.6% |
| Net operating result (EBIT) | 4,903,318 | 5,875,392 | 9,994,017 |
| % on production proceeds | 4.8% | 5.5% | 6.9% |
| Net result | 2,076,739 | 1,898,796 | 4,597,608 |
| Group net equity | 73,829,525 | 70,892,123 | 73,402,218 |
| Total assets | 206,143,808 | 181,517,967 | 178,808,809 |
| Capital stock | 25,252,359 | 25,850,418 | 25,754,016 |
| Net working capital (1) | 33,062,294 | 26,522,637 | 32,798,089 |
| Cash flow (2) | 6,094,500 | 4,286,511 | 7,909,996 |
| Fixed capital (3) | 102,575,693 | 89,474,691 | 91,065,368 |
| Investment | 12,942,698 | 2,011,515 | 2,452,257 |
| Cash resources/bonds (a) | 12,217,525 | 10,390,244 | 10,317,640 |
| Short-term financial debts (b) | (24, 827, 852) | (31,829,715) | (37, 109, 580) |
| Medium-/long-term financial debts (c) | (28, 408, 513) | (9,771,487) | (9,522,335) |
| Net financial position (4) | (41,018,840) | (31, 210, 958) | (36, 314, 275) |
(1) - "Net working capital" is calculated as the sum of total current assets less
cash at bank and on hand and total current liabilities plus current bank debt
(2) - Cash flow is calculated as the sum of net profit (loss) adjusted by amortisation,
changes in employee severance indemnities and write- downs
(3) - "Fixed capital" is equal to total non-current assets
(4) - Net financial position = a - (b + c)
The table below shows the main economic indicators of the Group as at 30 September 2016, compared with the same period of the previous year.
For the calculation of ROE and ROI, it was decided to adopt an annual "rolling" approach using as a reference for net profit and operating income the periods from 1 October 2015 - 30 September 2016 for figures as at 30 September 2016 and 1 October 2014 - 30 September 2015 for figures as at 30 September 2015.
| Exprivia Group | 30/09/2016 | 30/09/2015 |
|---|---|---|
| Index ROE (Net income / Equity Group) | 6.47% | 4.87% |
| Index ROI (EBIT / Net Capital Invested) (5) | 7.58% | 9.59% |
| Index ROS (EBIT / Revenues from sales and services, net of changes in inventories of raw materials and finished products)) |
4.98% | 5.75% |
| Financial charges (6) / Net profit | 0.956 | 1.003 |
(5) Net Capital invested is equal to net working capital plus non-current assets net of total non-current liabilities (excluding bank debt and bond issues)
(6) Financial expenses : calcutaded net o nterest cost IAS 19
The table below shows the main capital and financial indicators of the Group as at 30 September 2016, 30 September 2015 and 31 December 2015.
| Exprivia Group | 30/09/2016 | 30/09/2015 | 31/12/2015 |
|---|---|---|---|
| Net Financial Debt / Equity Capital | 0.56 | 0.44 | 0.49 |
| Debt ratio (Total Liabilities / Equity Capital) | 2.79 | 2.56 | 2.44 |
A summary of the main consolidated economic, capital and financial data of the Group is reported below, prepared in accordance with International Financial Reporting Standards (IAS/IFRS), and particularly with standard IAS 34, as emerging from the situation as at 30 September 2016 and the third quarter of 2016, compared with the same period of the previous year.
| Exprivia Group (value in $K \in \Sigma$ ) | 30.09.2016 | 30.09.2015 | Variations % | Q3 2016 | Q3 2015 | Variations % |
|---|---|---|---|---|---|---|
| Revenues | 101,728 | 106,097 | $-4.12%$ | 34,097 | 32,494 | 4.93% |
| Net revenues | 98,430 | 102,179 | $-3.67%$ | 32,762 | 31,743 | 3.21% |
| EBITDA | 8,313 | 10,027 | $-17.09%$ | 4.265 | 3,130 | 36.26% |
| EBIT | 4,903 | 5,875 | $-16.54%$ | 2,975 | 2,049 | 45.19% |
| Pre-tax result | 2,803 | 4.071 | $-31.15%$ | 2.269 | 1.474 | 53.93% |
| Result | 2,077 | 1,899 | 9.37% | 1,517 | 818 | 85.45% |
The Group closed the first nine months of the year with consolidated revenues of Euro 101.7 million, compared to Euro 106.1 million in the same period of last year. The decrease in volumes was still impacted by phenomena taking place in the first half of the year, in relation to foreign markets and BPO delays.
Overall, third quarter performance was good and showed a trend reversal, with a significant increase in profitability and EBITDA equal to Euro 4.3 million, up 36.2% compared to the third quarter of last year. In the third quarter, the company ACS, which operates in the space technologies sector, was consolidated and contributed Euro 2.5 million in revenues to the group and had an EBITDA of Euro 0.7 million during the same period.
In the third quarter of 2016, consolidated revenues amounted to Euro 34.1 million with a 4.93% increase compared to the revenues in the same period of the previous financial year (Euro 32.5 million).
Consolidated net revenues amounted to Euro 32.8 million in the third quarter of 2016, with a 3.21% increase compared to the same period in the previous financial year (Euro 31.7 million).
Consolidated EBITDA in the third quarter of 2016 amounted to Euro 4.3 million (Euro 3.1 million in 2015) equal to 12.51% of revenues. Consolidated EBIT in the third quarter of 2016 amounted to Euro 3 million (Euro 2 million in 2015) equal to 8.73% of revenues. Pre-tax result in the third quarter of 2016 amounted to Euro 2.3 million, equal to 6.65% of consolidated revenues, compared to Euro 1.5 million in the third quarter of 2015.
The net financial position as at 30 September 2016 was a negative Euro 41 million, compared to Euro -36.3 million as at 31 December 2015. Group Shareholders' equity totalled Euro 73.8 million as at 30 September 2016, compared to Euro 73.4 million as at 31 December 2015.
| Exprivia Group (value in K $\epsilon$ ) | 30.09.2016 | 30.09.2015 | 31.12.2015 |
|---|---|---|---|
| Group Net Worth | 73.830 | 70.892 | 73,402 |
| Net Financial Position | (41.019) | (31.211) | (36, 314) |
As at 30 September 2016 the Board of Directors of Exprivia SpA, whose term of office will expire when the year-end 2016 financial statements are approved, was composed as follows:
| Board Member | Office | Executive/ Non Executive |
Place and Date of Birth | Gender | First Appointment |
|---|---|---|---|---|---|
| Domenico Favuzzi | Chairman and Chief Executive Officer |
Executive | Molfetta (BA) 18.04.62 | M | 29 June 2005 |
| Dante Altomare | Vice Chairman | Executive | Molfetta (BA) 18.09.54 | M | 29 June 2005 |
| Vito Albino | Independent Director (*) |
Non Executive |
Bari 10.09.57 | M | 12 March 2013 |
| Angela Stefania Bergantino |
Independent Director (*) |
Non Executive |
Messina 24.09.70 | F | 23 April 2014 |
| Rosa Daloiso | Director | Non Executive |
Margherita di Savoia (FG) 05.04.66 |
F | 31 March 2008 |
| Mario Ferrario | Director | Non Executive |
Padua 05.02.46 | M | 23 Aprile 2014 |
| Marco Forneris | Director | Non Executive |
Caluso (TO) 19.02.51 | M | 28 Aprile 2011 |
| Alessandro Laterza | Independent Director (*) |
Non Executive |
Bari 09.02.58 | M | 31 March 2008 |
| Valeria Savelli | Director | Non Executive |
Matera 15.10.62 | F | 28 April 2011 |
| Gianfranco Viesti | Independent Director (*) |
Non Executive |
Bari 09.08.58 | M | 23 Aprile 2014 |
(*) Independent Directors under art. 3 of the Corporate Governance Code adopted by Borsa Italiana
For the purpose of their offices, all directors are domiciled at the registered offices of the Company in Molfetta (BA), Via Adriano Olivetti 11.
The Board of Directors is vested with all the broadest powers necessary for ordinary and extraordinary management of the company without any exception and all options are available to pursue the company purpose. Thus, it can undertake any type of obligation and perform any act without limitation as all operations fall within the scope of their competence with the exception of any matters expressly delegated by law to the shareholders' meeting.
As at 30 September 2016 the Board of Statutory Auditors, whose term of office will end when the year-end 2016 financial statements are approved, was composed as follows:
| Board Member | Office | Place and Date of Birth | Gender |
|---|---|---|---|
| Ignazio Pellecchia | Chairman | Bari 28.06.68 | M |
| Anna Lucia Muserra | Regular Auditor | Genoa 21.09.62 | F |
| Gaetano Samarelli | Regular Auditor | Molfetta (BA) 07.12.45 | M |
| Valeria Cervellera | Substitute Auditor | Bari 07.08.69 | F |
| Mauro Ferrante | Substitute Auditor | Bisceglie (BA) 01.11.64 | M |
On 23 April 2014, the shareholders' meeting appointed PricewaterhouseCoopers SpA as independent auditors for the years 2014 – 2022.
Exprivia is an international group which today employs more than 1800 professionals who can enable the digital transformation process by means of solutions that affect the customer's entire value chain. Exprivia stands out due to its reliability in managing complex projects by connecting and integrating vertical and horizontal, internal and external skills and its capacity to create ad hoc solutions which are easy to use as well as to update, as they are based on continuous research and innovation.
Strong from its know-how and experience gained in more than 30 years of constant presence in the market, Exprivia has a team of experts specialised in the various technological areas and domains, from big data to the cloud, from the IoT to Mobile, from the SAP world to IT Security, distributed amongst its various locations in Italy and abroad (Europe, America and Asia). Listed on the stock exchange's MTA STAR segment since 2000, Exprivia works alongside its customers in the banking & finance, utilities, industry, telco & media, aerospace & defence, public administration and healthcare sectors.
Exprivia Projects Srl is 100% owned by Exprivia. It is based in Rome and has share capital of Euro 242,000.00 (fully paid-up). It is specialised in designing and managing services and infrastructure for Call Centres, Contact Centres and Helpdesk services.
Exprivia Healthcare IT Srl is 100% owned by Exprivia. It is based in Trento and has share capital of Euro 1,982,190.00 (fully paid-up). It is a leading ICT company in the healthcare IT sector with a broad and diverse customer base. It develops and manages healthcare IT systems based on proprietary solutions and weboriented technologies, in addition to operating in the field of IT systems and software applications for regional public administration.
Exprivia Enterprise Consulting Srl, wholly-owned by Exprivia, based in Milan and with fully paid-up share capital of Euro 1,500,000.00, represents the ERP / SAP centre of competence for the entire Exprivia Group in Italy and abroad; in addition to directly serving the manufacturing market in Italy, it provides other Group companies with the technical resources needed to develop SAP projects within their relevant product sector.
Exprivia Digital Financial Solution Srl, wholly-owned by Exprivia, based in Milan and with fully paid-up share capital of Euro 1,586,919.00, is a leader in Italy in the outsourcing of IT, legal and administrative services targeted at factoring companies, and supports the various phases of the credit life cycle with proprietary solutions.
Exprivia Telco & Media Srl, formerly Devoteam Ausytem, 100%-owned by Exprivia, based in Milan and share capital of Euro 1,200,000.00, has operated in the Italian market for more than 15 years as a reference company in the Telecommunications and Media sector.
ACS Srl., 100%-owned by Exprivia, has operated in the market for more than twenty years and develops ground stations for the reception and processing of satellite data, a sector in which it has reached a top global position. The company is based in Rome and Matera and also has a branch in Darmstadt, Germany.
Spegea S.C.a r.l. is 60% owned by Exprivia and has fully paid-up share capital of Euro 125,000.00. It is a School of Management based in Bari, organises and manages specialised seminars, training courses for companies and public administration in addition to the "Master in Management and Industrial Development" programme certified by ASFOR. It was founded 28 years ago by Confindustria Bari with the support of banks and institutions.
Consorzio Exprivia Scarl, 70% owned by Exprivia SpA, with the remaining 30% held by other Group companies wholly-owned by the holding company. This consortium's objective is to facilitate the Exprivia Group's participation in public tenders for project development and service provision.
Exprivia SLU, a Spanish company 100%-owned by Exprivia, is the result of the merger by incorporation of the companies previously operating in Spain, Exprivia SL and Profesionales de Sistemas Aplicaciones y Productos SL (ProSap). The company has operated since 2002, also through its subsidiaries in Mexico (ProSAP SA de CV), Guatemala (ProSAP Centroamerica S.A.) and Peru (ProSAP Perù SAC), providing professional services and project development in the SAP environment, WEB portal development, and solutions and information systems for the Healthcare sector in the Spanish market and Latin American countries.
Exprivia do Brasil Serviços de Informatica Ltda, a Brazilian company specialised in IT Security solutions, operates at its headquarters in Sao Paulo. Exprivia SpA controls the company with a 52.22% share while the company Simest SpA holds 47.70%.
Exprivia Asia Ltd, a company operating in Hong Kong to act on behalf of Exprivia SpA, its sole shareholder, in the Far East in all market sectors considered strategic to the Exprivia Group. Exprivia Asia Ltda
incorporated Exprivia IT Solutions (Shanghai) Co. Ltd as sole shareholder. The company is specialised in providing professional services in IT infrastructure and SAP.
Software Engineering Research & Practices S.r.l, 6% held by Exprivia SpA, is spin-off of the University of Bari. Its goal is to implement the results of university research in the field of software engineering and transfer them into business processes.
Società cons. a r.l. Pugliatech was formed to participate in the fulfilment of the programme agreement required by the 2000-2006 POR Puglia notice.
Consorzio Biogene was formed to develop the project known as "Public-private laboratory for the development of integrated bioinformatic tools for Genomics, Transcriptomics, and Proteomics (LAB GTP)".
Società cons. a r.l. "DAISY – NET" was formed to undertake initiatives for the development of an I.C.T. technology centre to be part of a network of regional technology centres.
Distretto Tecnologico Pugliese ("DHITECH"), based in Lecce, intends to develop and integrate an interdisciplinary cluster for nanosciences, bioscience and infoscience according to the guidelines of the seventh framework programme and national research plan.
Distretto Tecnologico Nazionale per l'Energia ("DiTNE"), based in Brindisi, it was formed to provide support for research in production sectors in the field of energy, to encourage technology transfer needed by national and international players in the sector, and to favour connections between the worlds of research, production of goods and services, credit and the territory.
Distretto Agroalimentare Regionale ("D.A.Re."), a consortium company based in Foggia, it acts as the interface for technology transfer from the Puglia research system to the agribusiness system. It provides services to support technological innovation by managing complex projects relating to industrial research and competitive development.
Distretto H-BIO Puglia, a consortium company based in Bari, it is known as the "Puglia technological district for human healthcare and biotechnologies". It will develop its operations in the strategic areas of products for molecular diagnostics and integrated diagnostics, treatment and rehabilitation products and bioinformatics products.
Consorzio SI-LAB: is a consortium for innovation services set up by Daisy-Net as a result of the MIUR funding project for new public and private laboratories. It brings together companies and universities in Puglia and operates in clusters with similar laboratories in Calabria and Sicily. The focus of SI-Lab is the integration of services, which are then experimented in the field of healthcare services.
Italy Care, a consortium of which Exprivia has been a member since 2013 together with Farmalabor Srl, Villa Maria Care & Research Group, and MASMEC Biomed. It was established on 18 March 2014 and represents a consolidated and effective expression of the healthcare services chain with the aim of optimising results and investments in healthcare. Penetration of international markets plays an essential role in the mission of Italy Care. Promoting a winning image in the healthcare chain that crosses borders is the goal of the consortium.
Cefriel is a consortium company in operation since 1988 as a centre of excellence for innovation, research and training in the Information & Communication Technology sector. Its main goal is to strengthen relations between universities and business through a multidisciplinary approach, starting from business needs and integrating the results of research, the best technologies on the market, emerging standards and the reality of industrial processes to innovate or develop new products and services. On 4 July 2014, Exprivia SpA acquired a 5.78% share.
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Today we are one of the main players in the digital transformation of businesses, and we owe this to the wide range of skills and experience we have developed in more than twenty years of working in our various markets.
The Group's business model is distinguished by market segmentation, as follows:
For more than 10 years, Exprivia's knowledge has supported the entire energy sector procurement, distribution and marketing sector. A solid experience in the field of fossil-derived resources has enabled the company to develop process governance systems that are currently applicable to the entire sector, with a particular focus on renewable energy and widespread parcelled sources.
The main process areas covered are:
Thanks to the introduction of innovative processes and services, Exprivia is capable of guaranteeing added value to all utilities that hope to overcome market challenges.
Support for the entire value chain of marketing and sales companies: management of digital channels, metering, billing and credit management, customer care management and sales solutions, relationship with networks, business intelligence, pricing & supply management, public lighting solutions, energy efficiency, smart metering and smart building.
In the distribution sector, Exprivia is specialized in developing solutions for the management of Network Development, Outage Management, Network Maintenance, Cartographic Service and Grid Topology.
In the production sector, Exprivia has gained competence in solutions for the management of plants and health & safety solutions.
Logistics automation, smart ticketing, info-mobility applications, line and vehicle maintenance, workforce management (public transport); public briefing, safety and logistics management, real-time dashboards and monitoring of the main KPIs, crowd management and monitoring, indoor positioning & Port Community System (ports and airports).
Notification of administrative acts, Telematic postman, ERP solutions, electronic billing, corporate KPI monitoring solutions.
The world of credit and finance is a complex one that arouses enthusiasm and fascination; however, it is not without its risks. Therefore, it is vital for every institution working within a rapidly evolving sector to have a partner like Exprivia to rely on for IT support.
From risk governance to data leveraging, from clouding to BYOD, from information security to nearshoring services, digital transformation works alongside the evolution of the credit and financial system.
With our long-term experience, we can support our customers with customised services and solutions designed to always keep pace with the unique needs of this market.
Exprivia's in-depth knowledge of typical market processes, combined with its solid technical skill and experience working with innovative technology suppliers and market leaders make it the ideal partner to promptly meet the evolving needs of customers.
Exprivia's solutions cover the following areas:
Exprivia's services and solutions cover the following areas:
More software, less hardware: the world of telecommunications is looking for innovative solutions that are, at the same time, less costly to manage. Operators in the sector are increasingly oriented towards excellence in customer satisfaction, an objective to be pursued through continual improvements in the quality perceived by users of the services. Exprivia accepts this challenge by offering innovative services and solutions for telecommunications, a market influenced by continual technological evolutions.
In telecommunications, technology is not simply a support but the core of the business. An essential condition at a time when all the operators are trying to minimize their operating costs but, at the same time, to increase customer satisfaction.
Exprivia offers operators and builders in the telecommunications sector extremely high-level technological competencies as it allows them to manage the Digital Transformation, reducing their operating costs with innovative solutions.
Exprivia is the ideal partner for the Service Providers that find the solution for being agile, efficient and customer centric in the virtualization of networks and applications.
Exprivia's great ability to build complex systems results in a reduction of operating costs for companies due to the simplicity of management. The quality of the services provided enables the customer to transfer a better customer experience to its users, enabling the single needs to be satisfied also through customer loyalty policies.
The main services and solutions that Exprivia provides to the telecommunications market are:
Safety on flights, land and sea transport, control of operations areas, vehicles, and digitized environments: all this has become fundamentally important in today's world. Its long experience in military and civil environments enables Exprivia to build defence systems and above all prevention systems in which Information Technology is the best tool for protecting humans and vehicles, whether military or civilian.
There is an even more urgent need for preventive action such as monitoring and controlling scenarios: no longer a posteriori but continuous control of vehicles, operating environments and routes, to take action before a crisis can occur.
An essential condition for IT support for strategic decisions in critical situations is situational awareness, the correct perception of what happens in the operating scenarios in real time. Exprivia has again been a protagonist of the digital transformation, which now offers a real advantage to the sector, making it possible to analyse the complexity of heterogeneous information (images, videos, data, texts, symbols,
voices and sounds) coming from a large number of sensors, worn, fixed and mobile, during flight, navigation, in orbit and on vehicles or drones.
In particular, Exprivia develops systems for command and control, supervision, presentation of maps, processing of geographical maps and rapid prototyping of air, land and sea transport consoles that ensure maximum interaction with scenarios increasingly close to reality, also through augmented reality techniques, the richness of georeferenced information and social collaboration.
Cybersecurity, digital identity, digital documents and electronic payments: the Digital Agenda for Italy designs the economy 4.0, increasingly based on Big Data and the IoT.
You can call it e-government, e-gov or digital administration: for us, it is just called innovation, simplicity and reliability for the protection of businesses, residents, public employees and the government.
Bureaucratic streamlining through the digitalised management of the PA - along with organisational renewal activities - now allows for the reconciliation of spending optimisation with service quality, as it provides users with multiple rapid and effective communication channels that connect residents with public institutions and provide the latter with a series of worry-free and completely secure tools for completing administrative procedures.
From this perspective, Exprivia has been able to rely on much of its experience in optimising processes for large private enterprises, which it has reconceptualised based on the needs of central and local governments and broken down into a range of areas, including:
Managing health is more than simply controlling healthcare expenditure. The operators in this sector have been saying this for years. Relations between the regional government, the healthcare facilities and the users must be improved by adopting technological innovations.
Exprivia is the ideal partner for a healthcare system oriented towards an excellent future that combines savings with efficacy and efficiency: its technological solutions for the healthcare system ensure absolute, simple and reliable technological coordination between the regional government and the healthcare provided by local health authorities, hospitals, ARNAS and IRCCS research centres, general and specialized hospitals, and domiciliary care systems.
A team of 350 specialists, 30 years of operation in the IT sector, solutions and services at 500 hospitals for 20 million patients confirm the efficacy of the Exprivia solutions in satisfying the needs of the healthcare sector, of fundamental importance for the economy and development of every region.
The Regions with the most efficient health service are those that spend the most but also spend the best, that is, without causing overruns of the regional budgets.
The Exprivia systems connect the entire Regional Healthcare system, from the administrative and management centres to the public and private hospital facilities along the entire supply chain, to the individual professionals and on-line services for users, so as to get the most from every resource.
This is done using the e4Cure suite, expressly designed for the healthcare environment, which coordinates the two main branches of the health system:
creating interface flows that ensure total, structured control.
In addition to its ISO 9001 quality certification, Exprivia has set up an ISO 13485 Medical Device quality system for monitoring clinical risks.
Exprivia rationalizes and reaches excellent levels of performance in the company processes of its customers, by modifying the entire value chain: from analysis to consulting, implementation, the Application and System Management services, also using proprietary, vertical solutions. The strategic relationship between the processes (increasingly simplified, quick and interlinked) and the in-depth knowledge of specific business features enables Exprivia to offer a tool for increasing the company's prospects of success.
The recent research projects foreshadow a radical change in business scenarios: the fourth industrial revolution is in progress and will soon bring fully controlled, interconnected and automated production processes through the evolution of technology.
The expression "Industry 4.0", used for the first time at the Hanover Fair in 2011, defines this change in a panorama that is still evolving but already has precise development guidelines.
The four pillars of this transformation constitute the core of Exprivia's know-how and skills:
The impact of this transformation will be colossal, like that of the previous industrial revolutions brought over the centuries by steam, electricity, oil and computers and will only be quantifiable in the future. In the mean time, however, the clouding technologies are already influencing the work dynamics, which are evolving extremely rapidly. Every business must therefore introduce digital innovation in its industrial processes to gain the benefits of Smart Manufacturing.
Exprivia has taken this extraordinary opportunity by strengthening the entire industrial process with its digital solutions and automating the management of huge quantities of information in a simple, rational and efficient way, thus converting it into a strong presence on the market. This is the natural evolution of the vertical offer that Exprivia develops on the various industrial markets.
Exprivia is currently one of the main Italian companies specialized in the design, development and integration of software solutions and innovative services, with its many corporate skills gained during its twenty years of activity and through a privileged relationship with SAP for over 10 years. Exprivia provides the most innovative SAP solutions, such as SAP Business Suite 4 SAP HANA (High-Performance Analytic Appliance, an architecture designed to manage extremely high rates of complex transactions and queries on the same platform) with a view to ensuring the go-to-market for its customers and giving them the most appropriate support in the development and innovation of their business processes. The main areas of activity are Administration, Finance and Control, Operation & Logistics, Business Analytics, Human Capital Management
500 professionals specialized in ERP and Extended ERP solutions, including over 300 certified resources, distributed across Italy and overseas (Spain, Mexico, Brazil, other Latina American countries and China) make Exprivia one of the leading players in the field of digital transformation.
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Working for the world to come requires not only a lively imagination, but also and especially solid training that keeps us continuously updated on trends and transformations under way to anticipate the needs of the market.
The Group has a team of highly-skilled experts specialised in several different technological areas:
In the third quarter of 2016, revenues by business area amounted to Euro 32.8 million, compared to Euro 31.7 million in the same period of the previous financial year.
Details of the revenues relating to 30 September 2016 and the third quarter of 2016 are shown below, compared with the figures for the same period of the previous year and broken down by business segment (€/1000).
| Business Areas | 30/09/2016 | 30/09/2015 | Variation | Variation% | Q3 2016 | Q3 2015 | Variation | Variation% |
|---|---|---|---|---|---|---|---|---|
| Banking & Finance | 18,485 | 18,077 | 408 | 2.3% | 6,032 | 5,680 | 352 | 6.2% |
| Energia e Utilities | 15,448 | 17,003 | (1,555) | $-9.1%$ | 5,532 | 4,617 | 915 | 19.8% |
| Industry | 9,199 | 8,283 | 916 | 11.1% | 2,817 | 2,690 | 127 | 4.7% |
| Oil e Gas | 9,074 | 11,378 | (2,304) | $-20.2%$ | 2,807 | 3,594 | (787) | $-21.9%$ |
| Telco & Media | 14,651 | 13,829 | 822 | 5.9% | 4,596 | 4,687 | (91) | $-1.9%$ |
| Healthcare | 16,130 | 16,449 | (319) | $-1.9%$ | 4,916 | 5,516 | (600) | $-10.9%$ |
| Public Sector | 5,019 | 5,475 | (456) | $-8.3%$ | 1,544 | 1,549 | (5) | $-0.3%$ |
| Aerospace & Defence | 4,027 | 2,317 | 1,710 | 73.8% | 2,528 | 717 | 1,811 | 252.4% |
| International Business | 5,973 | 8,170 | (2, 197) | $-26.9%$ | 1,884 | 2,395 | (511) | $-21.3%$ |
| Other | 424 | 1,197 | (773) | $-64.6%$ | 106 | 297 | (191) | $-64.4%$ |
| Total | 98,430 | 102,179 | (3, 749) | $-3.7%$ | 32,762 | 31,743 | 1,019 | 3.2% |
Details of the revenues relating to 30 September 2016 and the third quarter of 2016 are shown below, compared with the figures for the same period of the previous year and broken down by type of business (€/1000).
| Exprivia Group (value in k Euro) | 30/09/2016 | 30/09/2015 | Variation | Variation% | Q3 2016 | Q3 2015 | Variation | Variation% |
|---|---|---|---|---|---|---|---|---|
| Projects and Services | 85.576 | 88.909 | (3,333) | $-3.7%$ | 28.659 | 27.569 | 1,090 | 4.0% |
| Maintenance | 9,959 | 9,505 | 454 | 4.8% | 3,437 | 3,228 | 209 | 6.5% |
| HW/ SW third parties | 1.685 | 1.371 | 314 | 22.9% | 331 | 353 | (22) | $-6.2%$ |
| Own licences | 772 | 1.197 | (425) | $-35.5%$ | 215 | 297 | (82) | $-27.6%$ |
| Other | 438 | 1,196 | (758) | $-63.4%$ | 120 | 296 | (176) | $-59.5%$ |
| Total | 98,430 | 102,179 | (3,749) | $-3.7%$ | 32,762 | 31.743 | 1.019 | 3.2% |
Details of the revenues relating to 30 September 2016 and the third quarter of 2016 are shown below, compared with the figures for the same period of the previous year and broken down by private and public sector (€/1000).
| Exprivia Group (value in k Euro) | 30/09/2016 | Effect % 30/09/2015 | Effect % | Q3 2016 | Effect % | Q3 2015 | Effect % | |
|---|---|---|---|---|---|---|---|---|
| PRIVATE | 79.422 | 80.7% | 81.011 | 79.3% | 28.130 | 85.9% | 25.611 | 80.7% |
| PUBLIC | 19,008 | 19.3% | 21,168 | 20.7% | 4,632 | 14.1% | 6,132 | 19.3% |
| Total | 98,430 | 102,179 | 32,762 | 31,743 |
Details of the revenues relating to 30 September 2016 and the third quarter of 2016 are shown below, compared with the figures for the same period of the previous year and broken down by geographical area (€/1000).
| Exprivia Group (value in k Euro) | 30/09/2016 | Effect % 30/09/2015 | Effect % | Q3 2016 | Effect % | Q3 2015 | Effect % | |
|---|---|---|---|---|---|---|---|---|
| ITALY | 89,459 | 90.9% | 92,358 | 90.4% | 29,177 | 89.1% | 28,666 | 90.3% |
| FOREIGN | 8.971 | 9.1% | 9.821 | 9.6% | 3.585 | 10.9% | 3.077 | 9.7% |
| Total | 98,430 | 102,179 | 32,762 | 31,743 |
The Banking, Finance and Insurance Business Unit ended the third quarter of 2016 with a 6.2% increase compared to the same period in 2015. This result is decisive for overall performance in the first 9 months, which recorded an improvement of 2.3%.
Also in this third quarter, the scenario considerations and trends seen in the first 6 months of the year remain valid, which can be summarised on one hand as the national and international uncertainty arising from the overall sector reorganisation (driven by policy) and on the other hand as the focusing of expenses on compliance, with all national and international regulatory obligations, and the different components supporting the digital transformation.
In this general atmosphere, despite the positive result achieved, our business development action did not live up to its full potential, in particular in the middle segment of the market, due to the shift to subsequent quarters of investments relating to the most innovative component of our system offering. Nevertheless, the following was recorded in the third quarter:
In conclusion, the results achieved resulted in a positive quarter. In addition, the effectiveness of our continuously evolving offering is confirmed by the interest demonstrated in the business development action carried out in the first nine months of the year, the benefits of which will be clearer by the end of the year if sector investments are unblocked.
The Utilities Business Unit recorded revenues amounting to Euro 5.5 million in the third quarter of 2016 compared to Euro 4.6 million in 2015, a 19.8% increase. Several contracts began simultaneously in July 2016, justifying the increase during the quarter in question.
The Utilities Business Unit is continuously active in pursuing the operational efficiency and digital transformation goals of its customers by participating in innovative projects with an international scope. Projects are also under way for the development of IT solutions in the area of grid management, IoT, Smart Home and plant maintenance.
BPO (Business Process Outsourcing) is specialised in Customer Care, both front office and back office. As at 30 September 2016, revenues totalled Euro 3.8 million, compared to Euro 6 million in the same period of the previous year; in the third quarter of 2016 revenues equalled Euro 1.7 million compared to Euro 1.3 million in the third quarter of 2015. This change can be attributed to the completion of the contract awarded in 2015 relating to a call centre service contract with a leading Italian multinational in the energy sector, concluded in November 2015. In the first quarter of 2016, Exprivia was awarded two important contracts in the energy segment. Their contractual value amounts to about Euro 60 million with a duration of three years. In the first half of the year, one of the two contracts acquired in the Front Office and multichannel area was successfully launched. The gap in revenues recorded as at 30 September 2016 compared to the same period of the previous year was due to the delay in the start of the second contract. Margins have also clearly improved following the stabilisation of the new service launched and particularly with reference to the last quarter.
In the third quarter of 2016, the results of the Industry BU showed a clear sign of growth in revenues compared to the same period of 2015, confirming the positive trend that began this year. In the third quarter of 2016, revenues amounted to Euro 2.8 million with a 4.7% increase compared to Euro 2.7 million in the same period of the previous financial year.
The industry segment is interpreting the signs of an economic recovery with confidence, by including investments in IT projects in the budget and beginning important technological innovation initiatives.
The customer base was provided with design services, application management services and in-cloud services, as part of mature offers such as those relating to ERP, HCM and extended ERP processes, rather than relating to highly innovative issues, like CRM solutions applied to after sales processes.
Good results were obtained in international rollouts in Europe and the Far East for customers with head offices in Italy.
The experience gained with the SAP Hana platform is of extreme interest for growth prospects, technological innovations brought to the market by the software vendor are adopted with interest by companies, and other projects for technological migration to Hana, including with cloud computing methods, are under way.
Again in terms of the offer, positive results were achieved in the development of web solutions and portals, bringing the efforts capitalised on in our Research and Development laboratories to the market.
The Oil & Gas Business Unit recorded revenues amounting to Euro 2.8 million in the third quarter of 2016 compared to Euro 3.6 million in 2015, a 21.9% decrease compared to the same period of the previous financial year.
The scenario of profound transformation in global energy demand and oil commodity price trends are forcing companies operating in the Oil & Gas market to review their long-term investment priorities. Most oil companies are continuing with their exploration programmes, but they are launching drastic operation optimisation programmes, for risk management and to bring systems and procedures into line with the regulatory environment.
The quantitative and qualitative transformation of the ICT spending structure in the Oil & Gas sector is therefore continuing, pushing Exprivia and the main ICT operators in that market to review their offering systems and pricing structures. With its vertical offering and delivery of projects based on the nearshoring model, Exprivia is supporting one of the primary ICT Transformation initiatives of Oil & Gas companies.
In this phase of transition, the third quarter of 2016 closed with revenues down by 14% compared to the previous year, but without Exprivia losing competitive positioning with its customers; indeed, it actually expanded its customer base in the Oil & Gas sector, as is confirmed by the acquisition of several important long-term contracts in 2016. In the third quarter, Exprivia was therefore committed to the delicate phase of transitioning to new contracts, incurring the relative handover costs, in order to initiate new contracts between the last quarter of 2016 and the first quarter of 2017. The increase in costs due to the transition to new contracts and the relative impacts on operating margins were concentrated in the third quarter and strictly linked to the increase in revenues beginning in the last quarter of 2016.
In the Telco & Media business unit, Exprivia achieved good growth as at 30 September 2016 compared to the same period of last year, amounting to a 5.9% increase in revenues (Euro 14.7 million as at 30 September 2016 compared to Euro 13.8 million as at 30 September 2015), also by enhancing the company's know-how and as a result boosting the number of specialised employees. Revenues in the third quarter of 2016 amounted to Euro 4.6 million, compared to Euro 4.7 million in the third quarter of 2015.
The increase recorded as at 30 September 2016 went against the trend of the telecommunications and media market, which continues to decline, particularly in Italy, demonstrating the significant difficulties which are reflected primarily in the progressive reduction in revenues for each voice/data line, which is being experienced by the majority of operators. However, in this market Exprivia has worked on specialising in the most innovative and relevant aspects for its customers' businesses, primarily by offering services in the areas of "Network Optimization & Transformation", "Next generation OSS Solutions & Services", "Voice & Media Application" and "Carrier grade solution development" as well as for the encrypted VoIP products "Extravox" and "Cryptovox".
The Healthcare Business Unit recorded revenues amounting to Euro 4.9 million in the third quarter of 2016 compared to Euro 5.5 million in 2015, a 10.9% decrease compared to the same period of the previous financial year, while as at 30 September 2016 revenues totalled Euro 16.1 million compared to Euro 16.5 million in the same period of 2015, a decline of 1.9%.
Despite the slowdown in certain projects, during the quarter a significant contract was concluded for the provision of a voice-enabled medical reporting solution for the pathological anatomy services of several diagnostics centres in several European countries.
The Public Sector Business Unit closed the third quarter of 2016 with revenues of Euro 1.5 million, in line with the figure recorded in the same period in the previous year.
In Local Public Administration, the third quarter of 2016, which basically remained stable compared to the third quarter of 2015, did not make up for the significant decrease seen in the first half of 2016. The decline was due to the completion of some important projects. In the course of the third quarter of 2016, several contract renewals were awarded by important Local Entities, which will come into effect in the upcoming quarters. The expected investments linked to Smart Cities, which could represent an occasion for the relaunch of this market, have not yet been seen.
For the Central Public Administration, we are witnessing a continuation in the slowdown in activities for important contracts in the portfolio, trends linked to Spending Review policies and the redefinition of organisational structures in important entities which are customers of the BU.
In the third quarter, this BU was also committed to working on important tenders for leading market players that should be awarded by the end of 2016.
During the third quarter, Exprivia was awarded a new ERP contract by an important research institute.
The Defence & Aerospace Business Unit closed the third quarter of 2016 with revenues amounting to Euro 2.5 million compared to Euro 0.7 million in the same period of 2015. The change was primarily related to the contribution made by the acquisition of the new equity investment in ACS Srl.
Specifically, Exprivia's Defence sector confirmed performance in line with the contraction seen in a market that is still being held back by reorganisations in the main industrial companies and large entities. In the first part of the year, the first contracts were launched in relation to new domestic and foreign programmes that will be rolled out in the coming months.
The innovative company ACS, which has operated in the market for more than twenty years and develops ground stations for the reception and processing of satellite data, a sector in which it has reached a top global position, joined the Aerospace & Defence Business Unit in the third quarter of 2016. Over the years, ACS has expanded its offering by taking advantage of the opportunities provided by the wide availability of Earth Observation data and the development of new technologies for studying the Earth.
International business development focused on consolidating the group's presence in markets where companies in the Exprivia Group operate.
In Spain, where the Exprivia Group was present through two subsidiaries, Profesionales de Sistemas Aplicaciones y Productos S.L. (ProSap) and Exprivia S.L., their merger was completed by combining the commercial and technical structures to strengthen the offer of ERP applications and SAP services for industry and distribution, Business Intelligence solutions for the Healthcare sector, and web services (marketing and on-line sales) for Banks and large distribution chains.
In Mexico, where the Exprivia Group operates directly through Prosap Mexico, sales and delivery actions continued with major private and public companies operating in the infrastructure construction sector in Latin America.
The sales and development activities of Prosap Centroamerica, which works in the ERP and SAP services sector in Guatemala and in various Central American countries, are expanding; the branch in Ecuador is participating in a temporary association of companies in several important public and private tenders in the Healthcare segment. Concerning Prosap Peru, sales actions are continuing in the healthcare and telecommunications field to give this company fresh impetus.
In Brazil, business growth continued for Exprivia do Brasil Serviços de Informatica Ltda in the IT Security segment and in the development of telecommunications projects, although the country's economic crisis resulted in GDP falling by 3.8% in 2015 compared to the previous year and a decline in the local currency (BRL) with respect to the euro and the US dollar.
In China, "Exprivia IT Solutions (Shanghai) Co. Ltd", whose sole shareholder is "Exprivia Asia Ltda" in Hong Kong, developed its business in providing professional services in IT infrastructure and SAP. Their customers are currently the Italian companies and institutions operating in China and European manufacturers.
There were no significant events worth noting.
On 5 July 2016 Exprivia SpA acquired de facto control over ACS SpA (an innovative company operating in the field of space sector software applications and systems) following the appointment by the sole shareholder of the administration and control bodies. On the same date, the company's legal status was changed from SpA to Srl.
There were no significant events worth noting.
On 28 October 2016, Exprivia completed the share capital increase of Euro 1.8 million of ACS Srl, an innovative company operating in the field of software applications and systems for the space sector.
The tables show the company workforces as at 30 September 2016, compared with those at 30 September 2015. In particular, the first table (Table 1) shows the number of resources, around 15.40% of whom are part-time. The part-time percentage information relates to the Italian companies, excluding ACS Srl and Spegea Scarl; part-time schedules can take on various configurations depending on the contract. The second table shows the number of full-time equivalent workers (on an annual basis) (Table 2):
| Employees | Temporary workers | ||||||
|---|---|---|---|---|---|---|---|
| Company | 30/09/2015 | 31/12/2015 | 30/09/2016 | 30/09/2015 | 31/12/2015 | 30/09/2016 | |
| Exprivia SpA | 669 | 673 | 669 | 5 | 2 | 2 | |
| Exprivia Healthcare IT Srl | 335 | 334 | 328 | - | - | - | |
| Exprivia Enterprise Consulting Srl |
165 | 156 | 132 | 1 | 1 | 1 | |
| Exprivia Digital Financial Solutions Srl |
193 | 194 | 195 | - | - | - | |
| Exprivia Projects Srl | 239 | 219 | 224 | - | - | - | |
| ACS Srl | - | - | 62 | - | - | - | |
| Exprivia Telco & Media Srl | 323 | 358 | 369 | 3 | 1 | - | |
| Exprivia IT Solutions Shanghai | 18 | 17 | 19 | 1 | 1 | 1 | |
| Exprivia SL (Spain) | 17 | 15 | - | - | |||
| Exprivia SLU, ProSap SA de CV (Mexico) and ProSap Centro America SA (Guatemala) |
84 | 73 | 96 | - | 1 | 1 | |
| Exprivia do Brasil Servicos de Informatica Ltda |
28 | 28 | 24 | 1 | 1 | 7 | |
| Spegea S.c.a r.l. | 7 | 8 | 7 | 1 | 1 | 1 | |
| Total | 2078 | 2075 | 2125 | 12 | 8 | 13 | |
| Executives | 39 | 39 | 44 | ||||
| Middle Managers | 186 | 187 | 192 |
Table 2.
| Employees | Temporary workers | ||||||
|---|---|---|---|---|---|---|---|
| Company | 30/09/2015 | 31/12/2015 | 30/09/2016 | 30/09/2015 | 31/12/2015 | 30/09/2016 | |
| Exprivia SpA | 649 | 649 | 638 | 5 | 2 | 2 | |
| Exprivia Healthcare IT Srl | 318 | 316 | 311 | - | - | - | |
| Exprivia Enterprise Consulting Srl | 156 | 144 | 107 | 1 | 1 | 1 | |
| Exprivia Digital Financial Solutions Srl |
189 | 187 | 189 | - | - | - | |
| Exprivia Projects Srl | 152 | 38 | 146 | - | - | - | |
| ACS Srl | - | - | 59 | - | - | - | |
| Exprivia Telco & Media Srl | 309 | 357 | 368 | 3 | 1 | - | |
| Exprivia Shanghai | 17 | 16 | 18 | 1 | 1 | 1 | |
| Exprivia SL (Spain) | 15 | 15 | - | - | |||
| Exprivia SLU, ProSap SA de CV (Mexico)/ProSap Centroamerica SA (Guatemala) |
84 | 73 | 96 | - | 1 | 1 | |
| Exprivia do Brasil Servicos de Informatica Ltda |
28 | 28 | 24 | 1 | 1 | 7 | |
| Spegea S.c. a r. l. | 7 | 7 | 6 | 1 | 1 | 1 | |
| Total | 1924 | 1830 | 1962 | 12 | 8 | 13 | |
| Executives | 39 | 39 | 44 | ||||
| Middle Managers | 185 | 185 | 187 |
Please note that Exprivia SLU, (formerly ProSap SL), a Spanish company that is 100% owned by Exprivia SpA, merged by incorporation in 2016 with the Spanish company Exprivia SL, also 100% owned by Exprivia SpA. The company also operates through its subsidiaries in Mexico (ProSAP SA de CV) and Guatemala (ProSAP Centroamerica S.A.).
27
The organisational structure of the Exprivia Group functionally integrates all staff services of the Group subsidiaries within the consolidation area, thereby optimising the operational structures of each company to ensure effectiveness and efficiency in supporting the business of the Group.
The Administration, Finance and Control Department unites the Group Finance function with the Administration, Finance and Control functions.
The Human Resource Department reports directly to the Chairman of the Exprivia Group, who is the head of the department ad interim.
The Internal Audit, Merger & Acquisition, Corporate Affairs and International Business Departments also report to the Chairman.
The Group companies constantly collaborate with each other for commercial, technological and application development. In particular the following should be pointed out:
A cash pooling relationship is in place between the Italian Group companies, and all companies adhere to tax consolidation based on a specific regulation.
In compliance with applicable legislative and regulatory provisions, and in particular with:
(i) the "Regulations on transactions with affiliated parties – CONSOB resolution no. 17221 of 12 March 2010" as amended by resolution no. 17389 of 23 June 2010; (ii) the outcome of the subsequent "consultation" published by CONSOB on 24 September 2010; (iii) the CONSOB notice on guidelines for applying the regulations published on 24 September 2010; (iv) CONSOB notice no. 10094530 of 15 November 2010 with additional clarifications.
On 27 November 2010 the Board of Directors of the Company adopted a "Procedure for Transactions with Related Parties", setting forth provisions concerning transactions with related parties in order to ensure the transparency and substantive and procedural correctness of operations with related parties carried out directly or through companies that are directly and/or indirectly controlled by Exprivia ("Exprivia Group").
This procedure replaced the one previously in force, which had been introduced on 26 March 2007.
Transactions with related parties are part of normal business management and are carried out on an arm's length basis. No atypical or unusual transactions were carried out with related parties.
The tables below show relations between the Exprivia Group and the parent company Abaco Innovazione SpA as at 30 September 2016, compared with 31 December 2015 for the equity data and with the same period of the previous year for economic data.
| Description | 30/09/2016 | 31/12/2015 | Variation |
|---|---|---|---|
| Exprivia S.p.A. | 3,037,715 | 1,305,338 | 1,732,377 |
| TOTAL | 3,037,715 | 1,305,338 | 1,732,377 |
The balance as at 30 September 2016 included Euro 2,985,338 relating to the receivable for an unsecured loan with no guarantees taken out in 2016 by the parent company Abaco Innovazione SpA, with Euro 1,680,000 disbursed in cash and Euro 1,305,338 as a reclassification of payables outstanding as at 31 December 2015. It also included Euro 52,378 for interest receivable accrued on the same loan.
| Description | 30/09/2016 | 30/09/2015 | Variation |
|---|---|---|---|
| Exprivia SpA | 179,968 | 73,299 | 106,669 |
| TOTAL | 179,968 | 73,299 | 106,669 |
Costs to parent companies related to the remuneration recognised by Exprivia SpA to Abaco Innovazione SpA for the guarantee granted by the latter on the loan of Euro 25 million granted by major banks. This
amount is the share of costs on the guarantee attributable to the period, while there are costs of Euro 201,941 attributable to future periods pending under other assets.
| Description $\begin{tabular}{lcccccc} \multicolumn{2}{c }{\textbf{1} & \textbf{2} & \textbf{3} & \textbf{4} & \textbf{5} & \textbf{5} & \textbf{6} & \textbf{6} & \textbf{7} & \textbf{8} & \textbf{8} & \textbf{9} & \textbf{10} & \textbf{10} & \textbf{10} & \textbf{10} & \textbf{10} & \textbf{10} & \textbf{10} & \textbf{10} & \textbf{10} & \textbf{10} & \textbf{10} & \textbf{10} & \textbf{10} & \textbf{10} & \textbf{$ |
30/09/2016 | 30/09/2015 | Variation |
|---|---|---|---|
| Exprivia S.p.A. | 52,378 | 21,950 | 30,428 |
| TOTAL | 52,378 | 21,950 | 30,428 |
The company confirms its confidence that the increasingly pervasive spread of digital technologies, the availability of new applications based on big data and mobility and the convergence between telecommunications and cloud computing technologies will enable businesses and the public administration to resume investments despite this environment of weak overall recovery. Indeed, the digital transformation represents an unquestionable necessity in any development plan that organisations may conceive of.
Interim Report on Operations at 30 September 2016
31
| Amount in Euro | |||
|---|---|---|---|
| Note | 30.09.2016 | 31.12.2015 | |
| Land and buildings | 14,003,168 | 10,981,543 | |
| Other assets | 2,344,590 | 2,815,269 | |
| Property, plant and machinery | 16,347,758 | 13,796,812 | |
| Goodwill | 67,465,155 | 67,118,492 | |
| Goodwill and other assets with an indefinite useful life | 67,465,155 | 67,118,492 | |
| Intangible assets | 3,243,244 | 820,552 | |
| Research and development costs | 8,428,306 | 3,370,013 | |
| Other Intangible Assets | 11,671,550 | 4,190,565 | |
| Investments in other companies | 169,561 | 896,195 | |
| Equity investments | 169,561 | 896,195 | |
| Receivables to parent companies | 2,596,910 | 1,305,338 | |
| Other receivables | 311,836 | 201,199 | |
| Other financial assets | 2,908,746 | 1,506,537 | |
| Other receivables | 1,705,007 | 1,716,806 | |
| Other financial assets | 1,705,007 | 1,716,806 | |
| Tax advances/deferred taxes | 2,307,916 | 1,839,961 | |
| Deferred tax assets | 2,307,916 | 1,839,961 | |
| NON-CURRENT ASSETS | 102,575,693 | 91,065,368 |
| Note | 30.09.2016 | 31.12.2015 | |
|---|---|---|---|
| Trade receivables | 59,196,404 | 58,097,533 | |
| Receivables from parent companies | 52,377 | ||
| Other receivables | 11,924,719 | 7,947,205 | |
| Tax receivables | 2,876,941 | 2,655,240 | |
| Trade receivables and other | 74,050,441 | 68,699,978 | |
| Inventories | 994,338 | 269,325 | |
| Inventories | 994,338 | 269,325 | |
| Work in progress contracts | 18,733,618 | 11,228,568 | |
| Work in progress contracts | 18,733,618 | 11,228,568 | |
| Receivables from parent | 388,428 | ||
| Other Financial Assets | 388,428 | ||
| Held at bank | 8,857,010 | 7,005,422 | |
| Cheques and cash in hand | 35,558 | 38,588 | |
| Cash at bank and on hand | 8,892,568 | 7,044,010 | |
| Cheques and cash in hand | 508,721 | 501,561 | |
| Cash at bank and on hand | 508,721 | 501,561 | |
| CURRENT ASSETS | 103,568,114 | 87,743,442 | |
| ASSETS | 206,143,807 | 178,808,809 |
| Note | 30.09.2016 | 31.12.2015 | |
|---|---|---|---|
| Share Capital | 1 | 25,252,359 | 25,754,016 |
| Share capital | 1 | 25,252,359 | 25,754,016 |
| Share premium | 18,081,738 | 18,081,738 | |
| Share Premium Reserve | 1 | 18,081,738 | 18,081,738 |
| Revaluation reserve | 2,907,138 | 2,907,138 | |
| Revaluation reserve | 1 | 2,907,138 | 2,907,138 |
| Legal reserve | 3,931,382 | 3,709,496 | |
| Revaluation reserve | 1 | 3,931,382 | 3,709,496 |
| Other reserves | 20,249,329 | 17,201,619 | |
| Other reserves | 1 | 20,249,329 | 17,201,619 |
| Retained earning/loss | 2,253,718 | 1,945,640 | |
| Profits/Losses for previous periods | 1 | 2,253,718 | 1,945,640 |
| Profit/Loss for the period | 2,076,739 | 4,597,608 | |
| SHAREHOLDERS' EQUITY | 74,752,403 | 74,197,255 | |
| Minority interest | 922,878 | 795,038 | |
| GROUP SHAREHOLDERS' EQUITY | 73,829,525 | 73,402,218 |
| Amount in Euro | 30.09.2016 | 31.12.2015 |
|---|---|---|
| NON-CURRENT LIABILITIES | ||
| Non-current bond | 2,589,297 | 3,311,748 |
| Non-current bond | 2,589,297 | 3,311,748 |
| Non-current bank debt | 27,619,690 | 6,111,015 |
| Non-current bank debt | 27,619,690 | 6,111,015 |
| Trade payables after the financial year | 741,639 | 109,273 |
| Payables to other lenders | 10,000 | |
| Derivative financial instruments | 44,797 | |
| Other financial liabilities | 796,436 | 109,273 |
| Payables for equity investments | 359,999 | |
| Other financial liabilities | 359,999 | |
| Tax liabilities and amounts for social security payable after the financial year |
3,632,180 | 408,762 |
| Other financial liabilities | 3,632,180 | 408,762 |
| Other provisions | 658,382 | 622,311 |
| Provision for risks and charges | 658,382 | 622,311 |
| Employee severance indemnities | 9,955,828 | 9,228,805 |
| Employee provisions | 9,955,828 | 9,228,805 |
| Provisions for deferred taxes | 1,150,072 | 1,038,852 |
| Deferred tax liabilities | 1,150,072 | 1,038,852 |
| NON CURRENT LIABILITIES | 46,761,884 | 20,830,766 |
| Amount in Euro | |||
|---|---|---|---|
| Note | 30.09.2016 | 31.12.2015 | |
| Current bond | 1,304,330 | 1,007,399 | |
| Current bond | 1,304,330 | 1,007,399 | |
| Current bank debt | 23,016,268 | 35,879,446 | |
| Current bank debt | 23,016,268 | 35,879,446 | |
| Trade payables | 18,889,904 | 17,087,806 | |
| Trade payables | 18,889,904 | 17,087,806 | |
| Advances | 3,086,664 | 2,774,376 | |
| Advances payment on work in progress contracts | 3,086,664 | 2,774,376 | |
| Other payables | 411,673 | 384,214 | |
| Other financial liabilities | 411,673 | 384,214 | |
| Tax liabilities | 10,715,053 | 7,583,444 | |
| Tax liabilities | 10,715,053 | 7,583,444 | |
| Amounts payable to pension and social security institutions | 5,688,897 | 5,480,960 | |
| Other payables | 21,516,731 | 13,583,144 | |
| Other current liabilities | 27,205,628 | 19,064,104 | |
| CURRENT LIABILITIES | 84,629,520 | 83,780,789 | |
| LIABILITIES | 206,143,807 | 178,808,809 |
| Amount in Euro | |||||
|---|---|---|---|---|---|
| Note | Q3 2016 | Q3 2015 | 30.09.2016 | 30.09.2015 | |
| Revenue from sales and services | 32,851,133 | 31,738,096 | 98,601,907 | 102,186,354 | |
| Revenues | 2 | 32,851,133 | 31,738,096 | 98,601,907 | 102,186,354 |
| Other revenues and income | 433,391 | 120,021 | 739,142 | 387,301 | |
| Grants related to income | 338,181 | 358,365 | 1,251,016 | 2,525,489 | |
| Increase in capitalised expenses for intenal projects | 563,030 | 272,584 | 1,308,388 | 1,005,048 | |
| Other income | 3 | 1,334,602 | 750,970 | 3,298,546 | 3,917,838 |
| Changes in inventories of work in progress | (88, 819) | 4,671 | (172,091) | (7,660) | |
| Changes in inventories of finished goods and work in progress | 4 | (88, 819) | 4,671 | (172,091) | (7,660) |
| PRODUCTION REVENUES | 34,096,916 | 32,493,737 | 101,728,362 | 106,096,532 | |
| Costs of raw, subsid. & consumable mat. and goods | 5 | 2,347,520 | 2,314,147 | 7,712,321 | 7,587,947 |
| Salaries | 6 | 21,197,639 | 20,765,054 | 67,196,800 | 67,784,606 |
| Costs for services | 7 | 4,931,602 | 5,147,931 | 14,644,612 | 16,797,903 |
| Costs for leased assets | 8 | 1,085,971 | 1,137,817 | 3,165,408 | 3,137,665 |
| Sundry operating expenses | 9 | 192,773 | 145,020 | 494,405 | 670,660 |
| Provisions | 10 | 76,732 | (146, 271) | 201,817 | 91,195 |
| TOTAL PRODUCTION COSTS | 29,832,237 | 29,363,697 | 93,415,363 | 96,069,976 | |
| DIFFERENCE BETWEEN PRODUCTION COSTS AND REVENUES | 4,264,679 | 3,130,041 | 8,312,999 | 10,026,556 |
| Amount in Euro | |||||
|---|---|---|---|---|---|
| Note | Q3 2016 | Q3 2015 | 30.09.2016 | 30.09.2015 | |
| Ordinary amortisement of intangible assets | 879,705 | 601,809 | 1,942,096 | 1,780,299 | |
| Ordinary depreciation of tangible assets | 381,427 | 474,241 | 1,348,642 | 1,436,856 | |
| Othe write-downs | 28,082 | 4,717 | 118,943 | 934,009 | |
| Amortisation, depreciation and write-downs | 11 | 1,289,214 | 1,080,767 | 3,409,681 | 4,151,164 |
| OPERATIVE RESULT | 2,975,465 | 2,049,274 | 4,903,318 | 5,875,392 | |
| Financial income and charges | 12 | 706,178 | 575,810 | 2,100,112 | 1,804,621 |
| PRE-TAX RESULT | 2,269,287 | 1,473,463 | 2,803,206 | 4,070,771 | |
| Income tax | 13 | 752,106 | 655,964 | 726,467 | 2,171,975 |
| PROFIT OR LOSS FOR THE PERIOD | 14 | 1,517,181 | 817,500 | 2,076,739 | 1,898,796 |
| Attributable to: | |||||
| Shareholders of holding company | 1,527,544 | 593,820 | 2,083,829 | 1,883,824 | |
| Minority interest | (10, 362) | 223,680 | (7,090) | 14,972 | |
| Earnings per share losses | 15 | ||||
| Basic earnings per share | (0.0251) | (0.0138) | 0.0426 | 0.0119 | |
| Basic earnings diluted | (0.0251) | (0.0138) | 0.0426 | 0.0119 |
| Amount in Euro | Note | ||
|---|---|---|---|
| Description | 30/09/2016 | 30/09/2015 | |
| Profit for the year | 2,076,739 | 1,898,796 | |
| Other gains (losses) total will not subsequently be reclassified in profit (loss) | |||
| Profit (loss) Actuarial effect of IAS 19 | 164,203 | ||
| Tax effect of changes | (45, 156) | ||
| Total other comprehensive income (loss) will not subsequently be reclassified in profit (loss) |
1 | 0 | 119,047 |
| Other gains (losses) total that will be subsequently reclassified to profit (loss) for the period we |
|||
| Change in translation reserve | 155,669 | (665, 132) | |
| (44, 797) | |||
| Total other comprehensive income (loss) that will subsequently be reclassified in profit (loss) |
1 | 110,872 | (665, 132) |
| NET COMPREHENSIVE INCOME FOR THE PERIOD | 2,187,611 | 1,352,711 | |
| attributable to: | |||
| Group | 2,059,771 | 1,602,878 | |
| Minority interest | 127,840 | (250, 167) |
| Amount in Euro | Company Capital |
Own shares Share Premium Fund |
Reval. Reserve |
Legal Reserve |
Other Reserves |
Profits (Losses) brought forward |
the period | Profit (Loss) for Total Net Worth | Minority Interests |
Total Group Net Worth |
|
|---|---|---|---|---|---|---|---|---|---|---|---|
| Balance at 01/01/2015 | 26,979,658 | (569, 389) | 18,081,738 2,907,138 | 3,561,670 | 16,712,971 | 2,014,991 | 3,037,163 | 72,725,940 | 959,836 | 71,766,104 | |
| Reclassification previous year's profit to previous year's profit |
147,826 | 1,355,940 | 1,533,397 | (3,037,163) | $\mathbf 0$ | ||||||
| Dividend | (1,452,751) | (1,452,751) | (1,452,751) | ||||||||
| Acquiring equity attributable third | (150,000) | (150,000) | (150,000) | ||||||||
| Prosap Group | $\circ$ | $\circ$ | |||||||||
| Purchase of own shares Components of comprehensive income |
(559, 851) | (314, 259) | (874, 110) | (874, 110) | |||||||
| Profit (loss for the period) | 1,898,796 | 1,898,796 | 14,972 | 1,883,824 | |||||||
| Effects of applying IAS 19 | 119,047 | 119,047 | 4,849 | 114,198 | |||||||
| Translation reserve | (665, 132) | (665, 132) | (269,988) | (395, 144) | |||||||
| Total income (loss) for the year Overall |
1,352,711 | (250, 166) | 1,602,877 | ||||||||
| Balance at 30/09/2015 | 26,979,658 (1,129,240) | 18,081,738 2,907,138 3,709,496 17,208,567 | 1,945,639 | 1,898,796 | 71,601,793 | 709,670 | 70,892,124 | ||||
| Balance at 31/12/2015 | 26,979,658 (1,225,642) | 18,081,738 2,907,138 3,709,496 17,201,619 | 1,945,640 | 4,597,608 | 74,197,255 | 795,038 | 73,402,218 | ||||
| Reclassification previous year's profit to previous year's profit |
221,886 | 3,110,712 | 1,265,010 | (4,597,608) | (0) | (0) | |||||
| Dividend | (1,049,935) | (1,049,935) | (1,049,935) | ||||||||
| Change in consolidation scope | 93,003 | 93,003 | 93,003 | ||||||||
| Purchase of own shares | (501, 657) | (173, 873) | (675, 530) | (675, 530) | |||||||
| Components of comprehensive income |
|||||||||||
| Profit (loss for the period) | 2,076,739 | 2,076,739 | (7,090) | 2,083,829 | |||||||
| Effects of applying IAS 19 | (44, 797) | (44, 797) | (44, 797) | ||||||||
| Translation reserve | 155,669 | 155,669 | 134,930 | 20,739 | |||||||
| Total income (loss) for the year Overall |
2,187,611 | 127,840 | 2,059,771 | ||||||||
| Balance at 30/09/2016 | 26,979,658 (1,727,299) | 18,081,738 2,907,138 3,931,382 20,249,330 | 2,253,718 | 2,076,739 | 74,752,403 | 922,878 | 73,829,525 |
| Amount in Euro | ||
|---|---|---|
| 30.09.2016 | 30.09.2015 | |
| Operating activities: | (1) | |
| Profit (loss) | 2,076,739 | 1,898,796 |
| Amortisation and depreciation | 3,290,738 | 3,217,155 |
| Provision for Severance Pay Fund | 3,042,059 | 2,714,400 |
| Advances/Payments Severance Pay | (2,315,036) | (3,543,840) |
| Cash flow arising from operating activities | 6,094,500 | 4,286,511 |
| Increase/Decrease in net working capital: | ||
| Variation in stock and payments on account | (7, 917, 775) | (2, 185, 103) |
| Variation in receivables to customers | (1,098,871) | 6,271,312 |
| Variation in receivables to parent/subsidiary/associated company | (52, 377) | 229,745 |
| Variation in other accounts receivable | (4, 199, 215) | (82, 171) |
| Variation in payables to suppliers | 1,806,987 | (3,705,808) |
| Variation in payables to parent/subsidiary/associated company | (63, 344) | |
| Variation in tax and social security liabilities | 3,339,546 | (7,851,079) |
| Variation in other accounts payable | 7,671,638 | 5,179,429 |
| Cash flow arising (used) from current assets and liabilities | (450,067) | (2,207,019) |
| Cash flow arising (used) from current activities | 5,644,433 | 2,079,492 |
| Investment activities: | ||
| Variation in tangible assets | (3,899,588) | (517, 691) |
| Variation in intangible assets | (9,769,744) | (1,042,256) |
| Variation in financial assets | 445,388 | 534,734 |
| Cash flow arising (used) from investment activities | (13, 223, 944) | (1,025,213) |
| Financial activities: | ||
| Changes in financial assets other than fixed assets | (370, 581) | |
| Changes in financial assets not held as fixed assets | 3,765,804 | |
| Changes in fair value of derivatives | (44, 797) | |
| Capital increase | (675, 531) | |
| Dividend paid | (1,044,775) | (1,402,336) |
| Variation shareholdres' equity | 198,709 | (758, 621) |
| Cash flow arising (used) from financial activities | 2,199,410 | (2,531,538) |
| Increase (decrease) in cash | (5,380,100) | (1,477,261) |
| Banks and cash profits at start of year | 8,565,365 | 14,224,271 |
| Banks and cash losses at start of year | (46,631,913) | (43,957,966) |
| Banks and cash profits at end of period | 12,386,627 | 10,390,244 |
| Banks and cash losses at end of period | (55,833,275) | (41,601,200) |
| Increase (decrease) in liquidity | (5,380,100) | (1,477,261) |
| (1) including taxes and interest paid in the period | 3,022,946 | 1,186,577 |
The quarterly report as at 30 September 2016 of the Exprivia Group was prepared in accordance with International Financial Reporting Standards approved by the European Commission (hereafter IAS/IFRS individually or IFRS as a whole).
The consolidated financial statements as at 30 September 2016 include the equity, economic and financial situations of the Holding Company Exprivia S.p.A. and subsidiaries, and changed with respect to 31 December 2015 due to the cancellation of the companies ProSap Holding Inc and ProSap Consulting LLC as well as the acquisition of ACS Srl.
The table below shows the companies under consolidation; the investments shown below are all held directly by the holding company Exprivia apart from the companies ProSap SA de CV, ProSap Centroamerica SA and ProSap Perù Sac, which are held indirectly:
| Company | Area |
|---|---|
| Consorzio Exprivia S.c.ar.l. | Other |
| Exprivia Asia Ltd | International Business |
| Exprivia IT Solutions (Shanghai) Co Ltd | International Business |
| Exprivia Projects Srl | Utilities |
| Exprivia do Brasil Serviços de Informatica Ltda | International Business |
| Exprivia SLU | International Business |
| ACS Srl | Defence & Aerospace |
| Exprivia Healthcare IT Srl | Healthcare/Public Sector |
| Exprivia Telco & Media Srl | Telco & Media |
| ProSap SA de CV (Messico) | International Business |
| ProSAP Perù SAC | International Business |
| ProSAP Centroamerica S.A (Guatemala) | International Business |
| Sucursal Ecuador de Exprivia SLU | International Business |
| Exprivia Enterprise Consulting Srl | Oil & Gas/Industry/Utilities |
| Exprivia Digital Financial Solutions Srl | Banking & Finance |
| Spegea Scarl | Other |
The table below provides the main data on the aforementioned subsidiaries consolidated using the line-byline method.
| Company | H.O. | Company | Results for | Net worth Total revenues Total Assets | % of holding | ||
|---|---|---|---|---|---|---|---|
| capital | period | ||||||
| Consorzio Exprivia S.c.a.r.l | Milano | 20,000 | (2,052) | 14,111 | 16,057 | 100.00% | |
| Gruppo Exprivia Asia | Hong Kong | 56,076 | (271, 230) | (508, 276) | 1,135,883 | 609,497 | 100.00% |
| Exprivia Enterprise Consulting Srl | Milano | 1,500,000 | (465, 351) | 1,014,899 | 5,302,469 | 6,517,588 | 100.00% |
| Exprivia Healthcare IT Srl | Trento | 1,982,190 | 857,831 | 11,319,648 | 17.657.464 | 28,837,936 | 100.00% |
| Exprivia Do Brasil Servicos Ltda | Rio de Janeiro (Brasile) | 1,626,806 | 38,890 | 1,781,985 | 900,963 | 2,009,491 | 52.22% |
| Exprivia Projects Srl | Roma | 242,000 | 305,593 | 595,993 | 3,905,108 | 2,426,718 | 100.00% |
| Exprivia Telco & Media Srl | Milano | 1,200,000 | 265,871 | 1,465,871 | 15,412,509 | 13,940,287 | 100.00% |
| Gruppo Exprivia Slu | Madrid (Spagna)/Città del Messico/Città del Guatemala/ Perù/Delaware/New York |
197,904 | (1, 115, 157) | (236, 388) | 4,121,486 | 9,773,162 | 100.00% |
| Exprivia Digital Financial Solution Srl | Milano | 1,586,919 | 2,160,110 | 12,516,280 | 19,011,369 | 21,977,781 | 100.00% |
| Spegea Sc a rl | Bari | 125,000 | (64, 178) | 178,613 | 534,553 | 1,034,666 | 60.00% |
| ACS Srl | Roma | 1,001,307 | 212,843 | 868,326 | 2,541,058 | 22,910,788 | 100.00% |
Details are provided below on the items in the Balance Sheet, drawn up in accordance with international accounting standards (IAS/IFRS).
All the figures reported in the tables below are in Euro.
"Share Capital", fully paid up, amounted to Euro 25,252,359 and was represented by 51,883,958 ordinary shares at Euro 0.52 nominal value each, including 3,321,730 own shares amounting to Euro 1,727,300 held as at 30 September 2016.
As at 30 September 2016 the "share premium reserve" amounted to Euro 18,081,738 and was the same as at 31 December 2015.
As at 30 September 2016 the "revaluation reserve" amounted to Euro 2,907,138 and was the same as at 31 December 2015.
The "legal reserve" amounted to Euro 3,931,382 as at 30 September 2016, rising by Euro 221,886 compared to 31 December 2015 due to the allocation of the Exprivia SpA profit from the previous year, as resolved by the shareholders' meeting of 20 April 2016.
The balance of the item "other reserves" amounted to Euro 20,249,329 as at 30 September 2016 compared to Euro 17,201,619 as at 31 December 2015 and pertains to:
to the effect of the premium paid to purchase treasury shares amounting to Euro -173,873;
to the negative effect on shareholders' equity of the change in fair value of the derivative for Euro 47,797;
Profit from previous periods as at 30 September 2016 stood at Euro 2,253,718 compared to Euro 1,945,640 as at 31 December 2015. The change was attributable primarily to the allocation of the Group profit for 2015.
Details are provided below on the items in the Income Statement, drawn up in accordance with international accounting standards (IAS/IFRS).
All the figures reported in the tables below are in Euro, unless expressly indicated.
Revenue from sales and services in the third quarter of 2016 amounted to Euro 32,851,133 compared to Euro 31,738,096 in the same period in 2015.
The table below shows details of revenues, including changes in inventories of raw materials and finished products (Euro -88,819 in the third quarter of 2016 compared to Euro 4,671 in the third quarter of 2015), broken down by business segment relating to the third quarter of 2016 and compared with the figures for the same period of the previous year (€/1000).
| Business Areas | Q3 2016 | Q3 2015 | Variation | Variation% |
|---|---|---|---|---|
| Banking & Finance | 6,032 | 5,680 | 352 | 6.2% |
| Energia e Utilities | 5,532 | 4,617 | 915 | 19.8% |
| Industry | 2,817 | 2,690 | 127 | 4.7% |
| Oil e Gas | 2,807 | 3,594 | (787) | $-21.9%$ |
| Telco & Media | 4,596 | 4,687 | (91) | $-1.9%$ |
| Healthcare | 4,916 | 5,516 | (600) | $-10.9%$ |
| Public Sector | 1,544 | 1,549 | (5) | $-0.3%$ |
| Aerospace & Defence | 2,528 | 717 | 1,811 | 252.4% |
| International Business | 1,884 | 2,395 | (511) | $-21.3%$ |
| Other | 106 | 297 | (191) | -64.4% |
| Total | 32,762 | 31,743 | 1,019 | 3.2% |
Details of the revenues relating to the third quarter of 2016 are shown below, compared with the figures for the same period of the previous year and broken down by type of business (€/1000).
| Exprivia Group (value in k Euro) | Q3 2016 | Q3 2015 | Variation | Variation% |
|---|---|---|---|---|
| Projects and Services | 28,659 | 27,569 | 1,090 | 4.0% |
| Maintenance | 3,437 | 3,228 | 209 | 6.5% |
| HW/ SW third parties | 331 | 353 | (22) | $-6.2%$ |
| Own licences | 215 | 297 | (82) | $-27.6%$ |
| Other | 120 | 296 | (176) | $-59.5%$ |
| Total | 32,762 | 31,743 | 1,019 | 3.2% |
Details of the revenues relating to the third quarter of 2016 are shown below, compared with the figures for the third quarter of 2015 and broken down by private and public sector (€/1000).
| Exprivia Group (value in k Euro) | Q3 2016 | Effect % | Q3 2015 | Effect % |
|---|---|---|---|---|
| PRIVATE | 28,130 | 85.9% | 25,611 | 80.7% |
| PUBLIC | 4,632 | 14.1% | 6,132 | 19.3% |
| Total | 32,762 | 31,743 |
Details of the revenues relating to the third quarter of 2016 are shown below, compared with the figures for the third quarter of 2015 and broken down by geographical area (€/1000).
| Exprivia Group (value in k Euro) | Q3 2016 | Effect % | Q3 2015 | Effect % |
|---|---|---|---|---|
| ITALY | 29,177 | 89.1% | 28,666 | 90.3% |
| FOREIGN | 3,585 | 10.9% | 3,077 | 9.7% |
| Total | 32,762 | 31,743 |
In the third quarter of 2016, "other revenue and income" amounted to Euro 1,334,602 compared to Euro 750,970 in the same period of the previous year. The table below provides details on the items:
| Description | Q3 2016 | Q3 2015 | Variation |
|---|---|---|---|
| Other revenue and income | 433,391 | 120,021 | 313,370 |
| Grants related to income | 338,181 | 358,365 | (20, 184) |
| Increase in capitalised expenses for intenal | 563.030 | 272.584 | 290,446 |
| TOTAL | 1,334,602 | 750,970 | 583,632 |
In the third quarter of 2016, "other revenue and income" amounted to Euro 433,391 compared to Euro 120,021 in the same period of the previous year. The table below provides details on the items.
| Description | Q3 2016 | Q3 2015 | Variation |
|---|---|---|---|
| Contingency assets | 138,571 | 35,653 | 102,918 |
| Rental income | 1,546 | (1,201) | 2,747 |
| Other revenue | 216,515 | 28,556 | 187,959 |
| Pay in lieu of notice | 9,810 | 14,859 | (5,049) |
| Income from assignment of vehicles to staff | 37,104 | 42,154 | (5,050) |
| Capital gains | 29,843 | $\sim$ | 29,843 |
| TOTAL | 433,391 | 120,021 | 313,369 |
In the third quarter of 2016 "grants for operating expenses" amounted to Euro 338,181 compared to Euro 358,365 in the same period in 2015 and referred to grants and tax breaks pertaining to the period or authorised in the period for funded research and development projects.
In the third quarter of 2016 "costs for capitalised internal projects" amounted to Euro 563,030 compared with Euro 272,584 in the same period in 2015 and mainly referred to expenses incurred in the quarter to develop products for the banking, healthcare and aerospace segments.
In the third quarter of 2016 the balance of the item "change in inventories of raw materials and finished products" amounted to Euro -88,819 compared to Euro 4,671 in the same period of the previous year. It referred to changes in finished products in the healthcare segment.
In the third quarter of 2016 the item "raw materials, consumables and goods" amounted to Euro 2,347,520 compared to Euro 2,314,147 in the same period of the previous year. The table below provides details on the items.
| Description | Q3 2016 | Q3 2015 | Variation |
|---|---|---|---|
| Purchase of HW-SW products | 445,816 | 420,936 | 24,879 |
| Purchase of HW-SW maintenance | 1,795,304 | 1,765,170 | 30,134 |
| Stationery and consumables | 14,970 | 33,346 | (18, 376) |
| Fuel and oil | 52,378 | 44,090 | 8,288 |
| Other costs | 618 | 14,402 | (13, 785) |
| Purchase of sundries | 33,783 | 33,848 | (65) |
| Warranty services on our customers activities | 4,652 | 2.354 | 2.298 |
| TOTAL | 2,347,520 | 2,314,147 | 33,374 |
The item "staff costs" amounted to Euro 21,197,639 in the third quarter of 2016 compared to Euro 20,765,054 in the same period of 2015. The table below provides details on the item:
| Description | Q3 2016 | Q3 2015 | Variation |
|---|---|---|---|
| Salaries and wages | 15,358,565 | 15,328,898 | 29,667 |
| Social charges | 3,929,811 | 3,968,341 | (38, 530) |
| Severance Pay | 1,110,863 | 1,001,372 | 109,491 |
| Other staff costs | 798.399 | 466,443 | 331,957 |
| TOTAL | 21,197,639 | 20,765,054 | 432,584 |
The number of group employees as at 30 September 2016 amounted to 2,138 workers, 2,125 of which employees and 13 temporary workers, compared to 2,083 (2,076 employees and 7 temporary workers) as at 31 December 2015 and 2,090 (2,078 employees and 12 temporary workers) as at 30 September 2015.
In the third quarter of 2016 the consolidated balance of the item "costs for services" amounted to Euro 4,931,602 compared to Euro 5,147,931 in the same period of the previous year. The table below provides details on the items:
| Description | Q3 2016 | Q3 2015 | Variation |
|---|---|---|---|
| Technical and commercial consultancy | 2,083,958 | 2,727,758 | (643,800) |
| Administrative/company/legal consultancy | 460,534 | 304,803 | 155,731 |
| Consultancy to subsidiary companies | 0 | 17,626 | (17, 626) |
| Data processing service | 135,118 | 94,487 | 40,631 |
| Auditors' fees | 40,415 | 56,809 | (16, 394) |
| Travel and transfer expenses | 522,954 | 558,695 | (35, 741) |
| Other staff costs | 19,971 | 57,542 | (37, 572) |
| Utilities | 259,969 | 312,564 | (52, 595) |
| Advertising and agency expenses | 130,270 | 113,038 | 17,232 |
| Bank charges | 126,658 | 165,555 | (38, 897) |
| HW and SW maintenance | 81,403 | 121,839 | (40, 435) |
| Insurance | 233,323 | 188,454 | 44,869 |
| Costs of temporary staff | 299,510 | 53,913 | 245,597 |
| Other costs | 491,316 | 279,870 | 211,445 |
| Mail services | 46,203 | 94,976 | (48, 773) |
| TOTAL | 4,931,602 | 5,147,931 | (216, 328) |
The most significant change was due to the reduction in consultancy costs, corresponding to the decrease in revenues, especially in the Oil & Gas area and International Business.
In the third quarter of 2016 the item "costs for leased assets" amounted to Euro 1,085,971 compared to Euro 1,137,817 in the same period of the previous year. The table below provides details on the items:
| Description | Q3 2016 | Q3 2015 | Variation |
|---|---|---|---|
| Rental expenses | 454,924 | 488,065 | (33, 141) |
| Car rental/leasing | 262,909 | 252,530 | 10,379 |
| Rental of other assets | 193,176 | (40, 577) | 233,753 |
| Royalties | 27,986 | 23,393 | 4,593 |
| Leasing payments | 138,135 | 414,406 | (276, 271) |
| Property maintenance | 8.841 | $\overline{\phantom{a}}$ | 8,841 |
| TOTAL | 1,085,971 | 1,137,817 | (51, 846) |
In the third quarter of 2016 the item "sundry operating expenses" amounted to Euro 192,773 compared to Euro 145,020 in the same period of the previous financial year. The table below provides details on the items:
| Description | Q3 2016 | Q3 2015 | Variation |
|---|---|---|---|
| Annual subscriptions | 40,819 | 36,890 | 3,929 |
| Books and magazines | 3,601 | 616 | 2,986 |
| Taxes | 37,681 | 70,589 | (32,908) |
| Stamp duty | 17,778 | 3,932 | 13,846 |
| Penalties and fines | 71,194 | 1,705 | 69,489 |
| Charitable donations | 4,034 | 6,680 | (2,646) |
| Contingency liabilities | 325 | 25,743 | (25, 418) |
| Write-offs | 0 | (716) | 717 |
| Sundry expenses | 15,888 | (15, 416) | 31,304 |
| Capital losses on disposals | 1,452 | (3) | 1,455 |
| TOTAL | 192,773 | 145,020 | 47,754 |
In the third quarter of 2016, the consolidated balance of the item "provisions" amounted to Euro 76,732 compared with Euro -146,271 in the same period of 2015.
The table below shows movements in the third quarter of 2016 compared with those in the third quarter of 2015.
| Description | Q3 2016 | Q3 2015 | Variation |
|---|---|---|---|
| Provision for risks of litigation | (131,016) | 131,016 | |
| Provision for legal disputes with employees | 62.795 | (82, 187) | 144,982 |
| Other provisions | 13.937 | 66.932 | (52, 995) |
| TOTAL | 76,732 | (146, 271) | 223,003 |
In the third quarter of 2016 the item "amortisation, depreciation and write-downs" amounted to Euro 1,289,214 compared to Euro 1,080,767 in the same period of 2015.
"Amortisation and depreciation" amounted to Euro 1,261,132 compared with Euro 1,076,050 in the third quarter of 2015 and referred to Euro 879,705 for intangible assets and Euro 381,427 for tangible assets.
The balance of "write-downs" in the third quarter of 2016 amounted to Euro 28,082 compared to Euro 4,717 in the third quarter of 2015 and referred to doubtful receivables unlikely to be collected.
In the third quarter of 2016 "financial (income) charges and other investments" amounted to Euro 706,178 compared with Euro 575,810 in the third quarter of 2015. The table below provides details on the items.
| Description | Q3 2016 | Q3 2015 | Variation |
|---|---|---|---|
| Proceeds from shareholdings from parents | (22, 923) | (7, 314) | (15,609) |
| Income from other investments | (219) | (219) | |
| Other income other than the above | (172, 158) | (33,058) | (139, 100) |
| Interest and other financial charges | 683,639 | 591.594 | 92,045 |
| From parent charges | 95,216 | 95,216 | |
| Profit and loss on currency exchange | 122,623 | 24,588 | 98,035 |
| TOTAL | 706,178 | 575,810 | 130,368 |
In the third quarter of 2016 "income from parent companies" amounted to Euro 22,923 compared with Euro 7,314 in the third quarter of 2015 and referred to interest charged to the parent company Abaco Innovazione S.p.A. for a loan granted by Exprivia SpA.
The balance of the item "income from other investments" totalled Euro 219 in the third quarter of 2016 and referred to dividends received from minority interests.
In the third quarter of 2016 the item "other financial income" amounted to Euro 172,158 compared to Euro 33,058 in the same period of 2015. The table below provides details on the item.
| Description | Q3 2016 | Q3 2015 | Variation |
|---|---|---|---|
| Bank interest receivable | 1,131 | 1,376 | (245) |
| Interest income from securities | 169 | 169 | |
| Other interest income | 170,823 | 30,940 | 139,884 |
| Rounding up of assets | 34 | 742 | (707) |
| TOTAL | 172,158 | 33,058 | 139,100 |
The item "other interest receivable" included Euro 141,110 in legal interest accrued on compensation due in relation to a legal case concluded in the third quarter of 2016.
In the third quarter of 2016 the item "interest and other financial charges" amounted to Euro 683,639 compared to Euro 591,594 in the same period of the previous year. The table below provides details on the items.
| Description | Q3 2016 | Q3 2015 | Variation |
|---|---|---|---|
| Bank interest payable | 126,349 | 75,566 | 50,784 |
| Interest on loans and mortgages | 293,989 | 333,154 | (39, 165) |
| Sundry interest | 244,396 | 140,591 | 103,805 |
| Charges on financial products and sundry items | 18,968 | 49,590 | (30, 622) |
| Rounding up/down | (61) | (632) | 571 |
| Interest cost IAS 19 | (0) | (6,675) | 6,674 |
| TOTAL | 683,639 | 591,594 | 92,046 |
In the third quarter of 2016 "losses on currency exchange" amounted to Euro 122,623 compared to Euro 24,588 in the third quarter of 2015 and mainly referred to the fluctuations in exchange rates due to commercial transactions carried out in a different currency to the national currency of the foreign companies of the Exprivia Group.
In the third quarter of 2016 "taxes" amounted to Euro 752,106 compared to Euro 655,964 in the third quarter of 2015. The table below provides details on the changes compared to the previous period.
| Description | Q3 2016 | Q3 2015 | Variation |
|---|---|---|---|
| IRES | 530,985 | 208,069 | 322,916 |
| IRAP | 142,795 | 88,944 | 53,851 |
| Foreing tax | (2,960) | 7,430 | (10, 390) |
| Taxes from prior years | 43,117 | (95, 869) | 138,986 |
| Defered tax | (18, 597) | $(8,089) -$ | 10,508 |
| Deferred tax assets | 56,766 | 455,478 | (398, 712) |
| TOTAL | 752,106 | 655,964 | 96,142 |
The Holding Company Exprivia SpA acts as the consolidating company and determines a single taxable result for the companies under National Tax Consolidation in accordance with art. 117 of T.U.I.R.
Each company under Tax Consolidation contributes taxable income or tax loss to Exprivia SpA as a payable/receivable for the consolidating company, depending on their IRES.
The income statement for the third quarter of 2016 closed with a consolidated profit (after taxes) of Euro 1,517,181 compared to Euro 817,500 in the third quarter of 2015.
Information on figures used to calculate earnings per share and diluted earnings is provided below in accordance with IAS 33.
Earnings (loss) per share is calculated by dividing net profit for the period as reported in the consolidated financial statements drawn up in accordance with IAS/IFRS, attributable to ordinary shareholders of the Holding Company, excluding the treasury shares, by the average number of ordinary shares in circulation during the period.
For the purpose of calculating basic earnings per share, the economic result for the period minus the amount attributable to minority interests was used in the numerator. In addition, there are no privileged dividends, conversion of privileged shares and other similar effects which could adjust the economic result attributable to holders of ordinary capital instruments.
At 30 September 2016 the basic and diluted earnings per share amounted to Euro 0.0426.
| Profits (Euro) | 30/09/2016 |
|---|---|
| Profits for determining basic earnings per share (Net profit due to shareholders of parent | |
| company) | 2,083,829 |
| Profit for determining the earnings per basic share | 2,083,829 |
| Number of shares | 30/09/2016 |
| Number of ordinary shares at 1 January 2014 | 51,883,958 |
| Purchase of own shares at 31 december 2014 | 3,321,730 |
| Average weighted number ordinary shares for calculation of basic profit | 48,971,508 |
| Earnings per share (Euro) | 30/09/2016 |
| Profit (loss) per basic share | 0.0426 |
| Diluted earnings (loss) per share | 0.0426 |
The consolidated Net Financial Position as at 30 September 2016 was Euro -41 million, a deterioration compared to 31 December 2015 of Euro 4.7 million, when it was Euro -36.3 million.
The Group increased its financial debt due to the slight absorption of net working capital for Euro 0.5 million, the maintenance of a good level of investments, equal to Euro 9.5 million, which was impacted by the effect of the accounting consolidation of ACS (Euro 8.5 million), the distribution in the first half of 2016 of the 2015 dividend (Euro 0.1 million) and the acquisition of treasury shares (Euro 0.7 million), despite positive cash flows deriving from income management for Euro 6.2 million.
The undersigned, Gianni Sebastiano, financial reporting officer responsible for preparing the corporate accounts, in accordance with Art. 154-bis(2) of Italian Legislative Decree no. 58 of 24 February 1998, introduced by Italian Law no. 262 of 28 December 2005, hereby states that the information and data on the economic, capital and financial standing contained in this Interim Report on Operations as at 30 September 2016 referring to the Consolidated Financial Statements correspond to the accounting documents, books and records.
Molfetta, 11 November 2016.
Financial Reporting Officer Responsible for Preparing Corporate Accounting Documents
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