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TXT E-Solutions — Earnings Release 2021
Aug 5, 2021
4061_ir_2021-08-05_cad271bc-cffa-4ba3-82a7-14dcfee9ae45.pdf
Earnings Release
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| Informazione Regolamentata n. 0439-60-2021 |
Data/Ora Ricezione 05 Agosto 2021 15:02:41 |
MTA - Star | |
|---|---|---|---|
| Societa' | : | TXT e-SOLUTIONS | |
| Identificativo Informazione Regolamentata |
: | 150912 | |
| Nome utilizzatore | : | TXTN02 - Favini | |
| Tipologia | : | REGEM; 3.1; 1.2 | |
| Data/Ora Ricezione | : | 05 Agosto 2021 15:02:41 | |
| Data/Ora Inizio Diffusione presunta |
: | 05 Agosto 2021 15:02:43 | |
| Oggetto | : | TXT: Results H1 2021 | |
| Testo del comunicato |
Vedi allegato.
TXT e-solutions: the results for the first half of 2021 confirm, in both volumes and margins, the sustainability of the accelerated growth and diversification plan underway
- Revenues of €43.7 million (+36.1%), international revenues €10.9 million
- EBITDA €5.7 million (+40.1%), EBITDA margin 13.0% (+0.6 p.p.) after full expenditure on R&D investments.
- EBIT €3.4 million (+62.7%), net profit €2.1 million.
- Positive NFP (Net Financial Position) by €11,1 million.
Milan, 5 August 2021- 15:00
Today the Board of Directors of TXT e-solutions, chaired by Enrico Magni, approved the operational results as of June 30, 2021.
"The results of the first half confirm the efficiency of the implementation of our strategic plan", commented President Enrico Magni, "the constant and continuing growth of TXT's performance derives from the excellent team work that involves over one thousand employees within the Group, financial strength and continuous investment in technology and innovation are the other key elements to continue our successful growth plan".
In the first half of 2021, the Group's results were as follows:
• Revenues were €43.7 million, up 36.1% from €32.1 million in the first half of 2020. On a likefor-like basis, revenues increased by 4.7%. Software revenues in the first half of 2021 were €4.2 million, down 4.0% compared to the first half of 2020. Service revenues were €39.5 million, up +42.4% compared to the first half of 2020.
• EBITDA was €5.7 million, up 40.1% compared to the first half of 2020 (€4.0 million). Sales expenses reduced their impact on revenue from 10.1% to 8.6% in the first half of 2021. The EBITDA growth of €1.6 million is due to organic growth of € 0.7 million (+17.1%) and the contribution of M&A (€0.9 million). The margin on revenues was 13%, compared with 12.6% in the first half of 2020.
• EBIT (operating profit) was € 3.4 million, up 62.7% compared to the first half of 2020 (€ 2.1 million).
• Net profit was €2.1 million compared to €2.7 million in the first half of 2020, with a revenue ratio of 4.7% compared to 8.5% last year. In the first half of 2021 the tax rate was 44%. In 2020, the effective tax rate was particularly low, mainly due to the standing difference linked to the €0.8 million capital gain on the Pace put-call exercised in June 2020 and the deferred tax assets linked to revenues from the application of the international accounting standard IFRS 15.
• The consolidated NFP (Net Financial Position) as of 30 June 2021, as illustrated in the table below was a positive €11.1 million, compared to €22.1 million at 31 December 2020, a net decrease of approximately €11.0 million. The decrease is mainly attributable to the acquisition of Banca del Fucino for €14.3 million and the acquisition of the minority shareholding in AssioPay Srl (€1.0 million) offset by the positive effect of cash generation from operating activities.
"Our operational excellence and strategic positioning in the value chain of our customers allow us to achieve significant volumes and margins that are sustainable over the long term," continues Daniele Misani, CEO of TXT Group. "The outlook for the future is positive, we continue with great determination in the strategic plan of efficiency and diversification favoured by increasing Group synergies and investments in new acquisitions that strengthen the Group's offer and internationalisation."
On 6 August 2021 at 11:00a.m. (CEST) a conference call will be held during which CEO Daniele Misani will present and comment on the results for the first half of 2021. The registration form for the conference call is available on the Company's website www.txtgroup.com under the page "financial news & calendar".
Subsequent events and outlook
In a global context of high uncertainty, the resilience of the TXT model, based on a strategy of diversification, a solid portfolio of orders and the ability to react to the new scenario, allowed the Group to compensate for the slowdown in activities related to sectors particularly affected by the pandemic, such as the civil aviation sector.
In the Aerospace & Aviation division, growth continued in the defense segment where our customers continue to reward us with significant new contracts, while in the civil aviation sector, TXT Group signed an important contract with Aerospace Technology Institute's (ATI) for the TXT Pacelab suite tool, to support the UK government's major strategic initiative to reduce carbon emissions (Flyzero initiative). Investments in diversification continue, with the signing of a new strategic partnership with Politecnico di Milano and ANT-X to develop and test innovative
solutions and services based on the use of drones, cooperating with helicopters for use during search and rescue missions.
In the Fintech division, the development and marketing of proprietary software solutions continues. TXT Working Capital Solutions, a company active in the specific segment of Supply Chain Finance, owner of the innovative platform "Polaris" for the Fintech sector, announced that Banca UBAE has joined the platform as a financial partner. HSPI won the tender called by INAIL last June for the management of editorial web publishing services and support to media relations activities. Winning the prestigious tender is a source of pride for HSPI, which sees the company's leadership in the Italian public administration sector strengthened, a sector in which the company has been working for over ten years thanks to its specialist knowledge in the ICT field and its distinctive skills in management consulting. Cheleo has been selected by doValue, the leading operator in Southern Europe for credit management and real estate services, which has decided to take advantage of Cheleo's specialised products and skills, giving rise to an effective collaboration that has already successfully completed the sale and subsequent IT management of an important portfolio of NPLs.
Details of subsequent events after 30 June 2021
On 5 July 2021, the rebranding operation was launched to communicate the profound changes the company has undergone in recent years and to create a new visual identity capable of reflecting the change of pace following the acquisitions undertaken, the synergic work of all the companies in the group and the recent repositioning on the market.
On 29 July 2021, the final contract for the acquisition of 100% of the capital of the German company TeraTron GmbH was signed. TXT will consolidate its results as of 1 August 2021. TeraTron is a German company that has been on the market for more than 20 years, a leader in offering innovative IoT solutions for digitalisation, automation and security mainly in the Automotive, Industrial (Industry 4.0), Healthcare markets, and a growing presence in other sectors with strong innovative and technological content. TeraTron's customer base is international, with longstanding relationships with numerous companies including Audi, BMW, HILTI, John Deere, Porsche, Volkswagen and Volvo.
Business outlook for the second half of 2021
The company aims to continue to grow internally and externally, by diversifying its offerings and geographies, continuing the virtuous path taken in recent years with investments in sectors with a high intensity of innovative software and a business model of integrated services with high added value. The business plan envisages investing the liquidity, along with the treasury shares held, in new acquisitions that enhance TXT's innovative technologies and managerial skills.
CALL OF SHAREHOLDERS' MEETING
The Board of Directors resolved to call the Ordinary Shareholders' Meeting for September 13, 2021 at 10:00a.m. in a single call, to be held at the registered office of TXT e-solutions S.p.A. in Via Frigia 27 - 20126 Milan (MI)
Pursuant to Decree-Law No. 18 of 17 March 2020 known as "Cura Italia" (the "Decree"), as subsequently extended and supplemented, in order to reduce the risks associated with the Covid-19 health emergency, the Company has decided to avail itself of the option introduced by Article 106 of the Decree, to provide that the intervention of shareholders at the Shareholders' Meeting takes place exclusively through the representative appointed pursuant to Article 135-undecies of Legislative Decree No. 58/1998.
Declaration of the Manager responsible for preparing corporate accounting documents
The Manager responsible for preparing the company's financial reports, Eugenio Forcinito, declares, pursuant to Article 154-bis, paragraph 2 of Legislative Decree no. 58 of 24 February 1998, that the accounting information contained in this press release corresponds to the document results, books and accounting records.
As of today, this press release is also available on the Company's website www.txtgroup.com.
TXT is an international IT Group, end-to-end provider of consultancy, software services and solutions, supporting the digital transformation of customers' products and core processes. With a proprietary software portfolio and deep expertise in vertical domains, TXT operates across different markets, with a growing footprint in Aerospace, Aviation, Defense, Industrial, Government and Fintech. TXT is headquartered in Milan and has subsidiaries in Italy, Germany, the United Kingdom, France, Switzerland and the United States of America. The holding company TXT e-solutions S.p.A, has been listed on the Italian Stock Exchange, STAR segment (TXT.MI), since July 2000.
For further information:
Eugenio Forcinito - CFO Tel. +39 02 257711 [email protected]
Management statement of income as of 30 June 2021
| (€ thousand) | H1 2021 | % | H1 2020 | % | Var % |
|---|---|---|---|---|---|
| REVENUES | 43,699 | 100.0% | 32,108 | 100.0% | 36.1% |
| Direct costs | 27,085 | 62.0% | 18,087 | 56.3% | 49.7% |
| GROSS MARGIN | 16,614 | 38.0% | 14,021 | 43.7% | 18.5% |
| Research and Development costs | 3,313 | 7.6% | 3,714 | 11.6% | (10.8%) |
| Commercial costs | 3,757 | 8.6% | 3,258 | 10.1% | 15.3% |
| General and Administrative costs | 3,882 | 8.9% | 3,007 | 9.4% | 29.1% |
| EBITDA | 5,663 | 13.0% | 4,042 | 12.6% | 40.1% |
| Amortization, depreciation and write downs | 1,927 | 4.4% | 1,591 | 5.0% | 21.1% |
| Reorganization and non-recurring costs | 316 | 0.7% | 350 | 1.1% | (9.6%) |
| OPERATING PROFIT (EBIT) | 3,419 | 7.8% | 2,101 | 6.5% | 62.7% |
| Financial income (charges) | 271 | 0.6% | 892 | 2.8% | (69.7%) |
| EARNINGS BEFORE TAXES (EBT) | 3,689 | 8.4% | 2,993 | 9.3% | 23.3% |
| Taxes | (1,619) | (3.7%) | (263) | (0.8%) | 515.6% |
| NET PROFIT | 2,071 | 4.7% | 2,730 | 8.5% | (24.2%) |
Income Statement as of 30 June 2021
| income Statement as at June 30, 2021 | H1 2021 | H1 2020 |
|---|---|---|
| TOTAL REVENUES AND INCOME (Euro) | 43,699,251 | 32,108,628 |
| Purchases of materials and services | (9,510,366) | (6,649,747) |
| Personnel costs | (28,584,762) | (21,575,823) |
| Other operating costs | (217,494) | (191,496) |
| Amortizations, depreciation and write downs | (1,967,316) | (1,589,919) |
| OPERATING RESULT | 3,419,313 | 2,101,643 |
| Financial income/charges | 270,509 | 891,747 |
| Share of profit (loss) of associates | - | - |
| PRE-TAX RESULT | 3,689,822 | 2,993,390 |
| Income Taxes | (1,618,931) | (263,439) |
| NET INCOME CONTINUING OPERATIONS | 2,070,891 | 2,729,951 |
| Net Income Discontinued Operations (sale of TXT Retail) | - | - |
| NET INCOME | 2,070,891 | 2,729,951 |
| Parent company's shareholders | 2,087,886 | 2,652,820 |
| Minority interests | (16,995) | 77,131 |
| PROFIT PER SHARE (Euro) | 0.18 | 0.23 |
| DILUTED PROFIT PER SHARE (Euro) | 0.18 | 0.23 |
| Number of shares | 11,694,811 | 11,660,285 |
Net Financial Position as of 30 June 2021
| € thousand | 30.06.2021 | 31.12.2020 | Var |
|---|---|---|---|
| Cash & Cash equivalents | 12,942 | 11,933 | 1,009 |
| Trading securities at fair value | 53,638 | 68,161 | (14,523) |
| Current financial assets | - | - | - |
| Current bank loans | (32,350) | (30,636) | (1,714) |
| Short term Financial Resources | 34,229 | 49,458 | (15,229) |
| Non current financial debts - Lessors IFRS 16 | (3,976) | (3,580) | (396) |
| Options referred to M&A (Put/Call - Earn Out) | (19,114) | (23,818) | 4,704 |
| Non current Financial Debts | (23,090) | (27,398) | 4,308 |
| Net Available Financial Resources | 11,139 | 22,060 | (10,921) |
TXT e-solutions S.p.A., Via Frigia 27 - 20126 Milano (Italy), Tel. +39 02 257711 Fax. +39 02 2578994, PEC [email protected] C.F./P.IVA/Registro delle Imprese di Milano, Monza Brianza e Lodi n. 09768170152, Capitale Sociale € 6.503.125,00 i.v. www.txtgroup.com
Consolidated Balance Sheet as of 30 June 2021
| ASSETS (Euro) | 30.06.2021 | 31.12.2020 |
|---|---|---|
| NON-CURRENT ASSETS | ||
| Goodwill | 30,431,313 | 30,431,313 |
| Definite life intangible assets | 6,603,218 | 7,221,447 |
| Intangible Assets | 37,034,531 | 37,652,760 |
| Buildings, plants and machinery | 7,657,476 | 7,460,326 |
| Tangible Assets | 7,657,476 | 7,460,326 |
| Investments in associates | - | |
| Other non-current assets | 14,518,914 | 227,066 |
| Deferred tax assets | 1,749,762 | 2,072,381 |
| Other non-current assets | 16,268,676 | 2,299,447 |
| TOTAL NON-CURRENT ASSETS | 60,960,683 | 47,412,533 |
| CURRENT ASSETS (Euro) | ||
| Contractual Assets | 5,862,459 | 4,749,088 |
| Trade receivables | 32,605,351 | 35,410,803 |
| Other current assets | 6,402,343 | 5,782,068 |
| Trading securities at fair value | 53,637,502 | 68,160,917 |
| Cash and other liquid equivalents | 12,941,598 | 11,932,508 |
| TOTAL CURRENT ASSETS | 111,449,253 | 126,035,384 |
| TOTAL ASSETS | 172,409,937 | 173,447,917 |
| EQUITY AND LIABILITIES (Euro) | 30.06.2021 | 31.12.2020 |
| SHAREHOLDERS' EQUITY | ||
| Share capital | 6,503,125 | 6,503,125 |
| Reserves | 14,695,109 | 13,858,858 |
| Retained earnings | 62,764,354 | 60,617,969 |
| Profit (Loss) for the period | 2,087,886 | 4,474,067 |
| Total Shareholders' Equity (Group) | 86,050,474 | 85,454,019 |
| Shareholder's equity attributable to minority | 233,032 | 409,158 |
| TOTAL SHAREHOLDERS' EQUITY | 86,283,506 | 85,863,177 |
| NON-CURRENT LIABILITIES | ||
| Non-current fiancial liabilities | 23,089,769 | 27,398,339 |
| Severance and other personnel liabilities | 2,707,362 | 2,757,450 |
| Deferred tax liabilities | 1,651,335 | 1,864,250 |
| Provisions for future risks and charges | 118,905 | 118,905 |
| TOTAL NON-CURRENT LIABILITIES | 27,567,371 | 32,138,944 |
| CURRENT LIABILITIES | ||
| Current financial liabilities | 32,349,999 | 30,634,968 |
| Trade payables | 3,782,769 | 4,176,210 |
| Tax payables | 3,971,886 | 3,282,649 |
| Other current liabilities | 18,454,408 | 17,351,969 |
| TOTAL CURRENT LIABILITIES | 58,559,061 | 55,445,796 |
| TOTAL LIABILITIES | 86,126,431 | 87,584,740 |
TXT e-solutions S.p.A., Via Frigia 27 - 20126 Milano (Italy), Tel. +39 02 257711 Fax. +39 02 2578994, PEC [email protected] C.F./P.IVA/Registro delle Imprese di Milano, Monza Brianza e Lodi n. 09768170152, Capitale Sociale € 6.503.125,00 i.v. www.txtgroup.com
TOTAL EQUITY AND LIABILITIES 172,409,937 173,447,917
Consolidated cash flow statement as of 30 June 2021
| H1 2021 | H1 2020 | |
|---|---|---|
| Net Income (Euro) | 2,070,891 | 2,729,950 |
| Non cash costs for Stock Options | 5,436 | 16,314 |
| Financial interest paid | 64,310 | 49,185 |
| Variance Fair Value Financial Assets | (432,394) | (1,134,122) |
| Current income taxes | 1,618,931 | 463,481 |
| Variance in deferred taxes | 4,241 | (301,439) |
| Amortization, depreciation and write-downs | 1,927,140 | 1,569,802 |
| Other non cash costs | - | - |
| Other changes | 155 | 16,614 |
| Cash flows generated by operations before working capital | 5,258,710 | 3,409,785 |
| (Increase) / Decrease in trade receivables | 2,805,452 | (824,854) |
| (Increase) / Decrease in inventories | (1,113,371) | (2,352,624) |
| Increase / (Decrease) in trade payables | (393,441) | 152,751 |
| Increase / (Decrease) in other current assets/liabilities | (333,917) | 1,755,342 |
| Increase / (Decrease) in severance and other personnel liabilities | (50,088) | (1,196,224) |
| Changes in working capital | 914,635 | (2,465,609) |
| Paid income taxes | - | (172,000) |
| CASH FLOW GENERATED BY OPERATIONS | 6,173,345 | 772,176 |
| di cui verso parti correlate | 81,858 | (1,491,183) |
| Increase in tangible assets | (274,297) | (454,830) |
| Increase in intangible assets | (10,977) | (6,386) |
| Capitalization of development costs | (175,493) | - |
| Decrease in tangible & intangible assets | 18,052 | 17,051 |
| Net Cash flow from acquisition | (982,716) | 198,657 |
| (Increase) / Decrease in trading securities | (14,314,468) | 10,000,000 |
| (increase) / Decrease in other financial credits | 15,000,000 | - |
| CASH FLOW GENERATED BY INVESTING ACTIVITIES | (739,899) | 9,754,491 |
| Proceeds from borrowings | 2,539,178 | 10,000,000 |
| (Repayment) of borrowings | (5,148,783) | (6,525,724) |
| (Repayment) of Leasing liabilities | (900,450) | (716,049) |
| Increase / (Decrease) in other financial credits | - | - |
| Increase / (Decrease) in other financial liabilites | - | - |
| Net change in financial liabilities | (183,147) | (5,852,038) |
| Dividends paid | (521,381) | - |
| Financial interests paid | (57,871) | (86,107) |
| Other changes in shareholders' equity | 140,222 | - |
| (Purchase)/Sale of Treasury Shares | (242,913) | (1,789,577) |
| CASH FLOW GENERATED BY FINANCIAL ACTIVITIES | (4,375,145) | (4,969,495) |
| INCREASE / (DECREASE) IN CASH | 1,058,300 | 5,557,172 |
| Difference in Currency Translation | (49,210) | (2,052) |
| CASH AT THE BEGINNING OF THE PERIOD | 11,932,508 | 11,426,082 |
| CASH AT THE END OF THE PERIOD | 12,941,598 | 16,981,202 |
| Assets acquired with no effect on cash flow (first adoption IFRS 16) | (2,494,153) | (227,873) |
| Liabilities acquired with no effect on cash flow (first adoption IFRS 16) | 2,494,153 | 227,873 |
TXT e-solutions S.p.A., Via Frigia 27 - 20126 Milano (Italy), Tel. +39 02 257711 Fax. +39 02 2578994, PEC [email protected] C.F./P.IVA/Registro delle Imprese di Milano, Monza Brianza e Lodi n. 09768170152, Capitale Sociale € 6.503.125,00 i.v. www.txtgroup.com
Management statement of income of Second Quarter of 2021
| (€ thousand) | Q2 2021 | % | Q2 2020 | % | Var % |
|---|---|---|---|---|---|
| REVENUES | 22,218 | 100.0% | 15,853 | 100.0% | 40.2% |
| Direct costs | 13,875 | 62.4% | 9,106 | 57.4% | 52.4% |
| GROSS MARGIN | 8,343 | 37.6% | 6,747 | 42.6% | 23.7% |
| Research and Development costs | 1,663 | 7.5% | 1,911 | 12.1% | (13.0%) |
| Commercial costs | 1,245 | 5.6% | 1,386 | 8.7% | (10.2%) |
| General and Administrative costs | 2,476 | 11.1% | 1,373 | 8.7% | 80.3% |
| EBITDA | 2,960 | 13.3% | 2,077 | 13.1% | 42.5% |
| Amortization, depreciation and write downs | 952 | 4.3% | 798 | 5.0% | 19.3% |
| Reorganization and non-recurring costs | 316 | 1.4% | 350 | 2.2% | (9.6%) |
| OPERATING PROFIT (EBIT) | 1,691 | 7.6% | 929 | 5.9% | 82.0% |
| Financial income (charges) | 15 | 0.1% | 1,564 | 9.9% | n.s. |
| EARNINGS BEFORE TAXES (EBT) | 1,705 | 7.7% | 2,493 | 15.7% | n.s. |
| Taxes | (873) | (3.9%) | (15) | (0.1%) | n.s. |
| NET PROFIT | 832 | 3.7% | 2,478 | 15.6% | (66.4%) |