TXT E-Solutions — Interim / Quarterly Report 2015

Nov 4, 2015

Informazione Regolamentata n. 0439-69-2015		Data/Ora Ricezione 04 Novembre 2015 16:59:48	MTA - Star
Societa'	:	TXT e-SOLUTIONS
Identificativo Informazione Regolamentata	:	65090
Nome utilizzatore	:	TXTN01 - Matarazzo
Tipologia	:	IRAG 03
Data/Ora Ricezione	:	04 Novembre 2015 16:59:48
Data/Ora Inizio Diffusione presunta	:	04 Novembre 2015 17:14:49
Oggetto	:	TXT: approved nine-months resutls
Testo del comunicato

Vedi allegato.

P R E S S R E L E A S E

TXT e-solutions: 2015 nine-months revenues € 45.4 million (+12.9%) and Net Income € 3.4 million (+25.2%) Strong growth of Revenues and Net Income continues in Q3

• Consolidated Revenues: € 45.4 million (+12.9%), 55% from outside Italy.
• EBITDA: € 5.0 million (+10.6%).
• Net income: € 3.4 million (+25.2%).
• Net Financial Position: positive € 9.4 million at September 30 2015 (€ 8.5 million at 31 December 2014).

Milan – November 4, 2015

The Board of Directors of TXT e-solutions Spa, chaired by Alvise Braga Illa, today approved the financial results for the period ended as of September 30, 2015.

In the first nine month of 2015, TXT recorded good growth of Revenues and Orders in both Divisions. Orders were € 46.9 million, up +18.8% compared to 2014 (€ 39.5 million). TXT Perform division orders grew by +20.2% and TXT Next by +16.6%.

In first nine months of 2015 TXT Retail gained important new customers and extension of licences to existing customers, including DFS (HK), Hanna Anderson (USA), Delta Galil (ISR), Swatch (CH), Sonae (P), Safilo (I), Furla (I), Moncler (I), Marni (I), Carpisa (I), Takko (D), Otto (D), Charles Voegele (D), Adidas (D), White Stuff (UK), Louis Vuitton (F), Longchamp (F), Sephora (F), Monoprix (F), Alinea (F) and Kenzo (F).

In order to compare performance with current year, financial results as of 30 September 2014 have been normalized, excluding non-recurring Revenues and Costs. 2014 results include a non-recurring income of € 1.5 million, earned from acquisition of Maple Lake and non-recurring charges of € 0.4 million.

Revenues were € 45.4 million, compared to € 40.2 million in the first nine month 2014 normalized (+12.9%). Sales of licences and maintenance totalled € 12.1 million (27% as a percentage of revenues), up +29.4% compared to 2014.

TXT Perform, the Planning specialist in End-to-End Retail for the Luxury and Fashion sector (60% of group revenues) grew revenues to € 27.2 million (+11.9% compared to 2014 normalized); TXT Next revenues (40% of group) were € 18.2 million and grew by +14.4% compared to 2014.

EBITDA was € 5.0 million and grew +10.6% compared to 2014 normalized (€ 4.5 million), after strong R&D (+13.3%) and Commercial investments (+13.7%). Profitability on revenues is 11%.

Pre-tax Income grew +20.8% from € 3.4 million (2014 normalized) to € 4.1 million. Profitability on revenues rose from 8.3% to 8.9%.

Net Income was € 3.4 million (7.6% of revenues), up +25.2% compared to 2014 normalized (€ 2.7 million). Income tax charges were € 0.6 million, or 15% of pre-tax income.

Net Financial Position has risen from € 8.5 million positive as of December 31, 2014 to € 9.4 million as of September 30, 2015. Main cash movements in the first nine months 2015 included a block sale of treasury shares to USA funds Kabouter (€ 3.2 million), the payment of dividends (€ 2.7 million), the payment of bonuses to employees (€ 2.5 million) and share buybacks (€ 0.8 million).

Shareholders' Equity as of September 30, 2015 amounted to € 32.5 million, up € 3.5 million compared to € 29.0 million as of December 31, 2014, mainly due to net income of the period (€ 3.4 million).

As of September 30, 2015 TXT holds 1,325,117 treasury shares or 10.19% of issued shares, purchased at an average price of € 2.33.

Third Quarter 2015

In Q3 2015 Revenues were € 14.3 million, up +12.3% compared to Q3 2014, with software revenues (licences and maintenance) growing by 15.4% and services by 11.3%. TXT Perform grew revenues to € 8.4 million (+9.5% compared to Q3 2014) and TXT Next revenues were € 5.9 million and grew by +16.6% compared to Q3 2014.

Net Income was € 1.1 million, up +15.1% compared to Q3 2014. Profitability on revenues rose from 7.5% to 7.7%.

On 18 August 2015 TXT Singapore Pte Ltd has been incorporated in addition to the subsidiary in Hong Kong for the development of Asia Pacific market and for the management of an important customer with over 40 Duty Free and Galleria stores in airport hubs and tourist locations worldwide.

The Chairman Alvise Braga Illa commented as follows: "Final Q3 results exceed our initial expectations. The complex international economic environment did not prevent our customers to achieve very good results both in Fashion & Luxury and in TXT Next's markets. The ongoing market trends lead the most dynamic companies to invest in the solution space covered by TXT products."

Outlook and Subsequent Events

The acceleration in new orders in the first 9 months 2015 allows to forecast a positive business development in the current quarter.

Declaration of the designated officer in charge of drafting the company's accounting documents

The Designated Officer in charge of drafting the company's accounting documents, Paolo Matarazzo, herein 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 documentary records, books and accounting entries.

As from today, this press release is available also on the company's website www.txtgroup.com

TXT e-solutions is an international specialist in high-value, strategic software and solutions for large enterprises. The main business areas are: Integrated & Collaborative Planning Solutions, with the TXT Perform Division, especially for Luxury, Fashion, Retail and Consumer Goods; Software for Complex Operations & Manufacturing, with the TXT Next Division, for Aerospace, Defence, High-Tech and Finance. Listed in the Star Segment of Borsa Italiana (TXT.MI), TXT is based in Milan and has offices in Australia, Canada, France, Germany, Hong Kong, Italy, Singapore, Spain, United Kingdom and United States.

For information:

TXT e-solutions SpA Paolo Matarazzo CFO Tel. +39 02 25771.355 paolo.matarazzo@txtgroup.com

Management Income Statement as of 30.09.2015

€ thousand	9m 2015	%	9m 2014 (1)	2014 non recurring	9m 2014 Normalized (2)	%	Var % vs 2014	Var % vs 2014 Normalized
REVENUES	45.403	100,0	41.682	(1.468)	40.214	100,0	8,9	12,9
Direct costs	21.659	47,7	19.451	(407)	19.044	47,4	11,4	13,7
GROSS MARGIN	23.744	52,3	22.231	(1.061)	21.170	52,6	6,8	12,2
Research and Development costs	3.838	8,5	3.388		3.388	8,4	13,3	13,3
Commercial costs	9.319	20,5	8.193		8.193	20,4	13,7	13,7
General and Administrative costs	5.583	12,3	5.063		5.063	12,6	10,3	10,3
EBITDA	5.004	11,0	5.587	(1.061)	4.526	11,3	(10,4)	10,6
Amortization, depreciation	826	1,8	980		980	2,4	(15,7)	(15,7)
OPERATING PROFIT (EBIT)	4.178	9,2	4.607	(1.061)	3.546	8,8	(9,3)	17,8
Financial income (charges)	(128)	(0,3)	(192)		(192)	(0,5)	(33,3)	(33,3)
EARNINGS BEFORE TAXES (EBT)	4.050	8,9	4.415	(1.061)	3.354	8,3	(8,3)	20,8
Taxes	(615)	(1,4)	(807)	197	(610)	(1,5)	(23,8)	0,8
NET PROFIT	3.435	7,6	3.608	(864)	2.744	6,8	(4,8)	25,2

(1) Official Financial Reporting.

(2) Income Statement 9m 2014 includes non-recurring income of 1.468k€ and non-recurring costs of 407k€. In order to compare performance w ith current year, financial results as of 30.9.2014 have been "Normalized" excluding non-recurring Revenues and Costs. Taxes have been calculated pro-rata.

Income Statement as of 30.09.2015

Amounts in Euro	30.09.2015	30.09.2014
TOTAL REVENUES AND INCOME	45.403.225	41.682.069
Purchases of materials and services	(8.669.911)	(9.425.021)
Personnel costs	(30.277.215)	(25.086.476)
Other operating costs	(1.452.102)	(1.583.144)
Amortizations, depreciation and write downs	(826.000)	(980.241)
OPERATING RESULT	4.177.997	4.607.187
Financial income/charges	(128.117)	(192.494)
PRE-TAX RESULT	4.049.880	4.414.693
Income Taxes	(615.275)	(806.353)
NET RESULT CURRENT ACTIVITIES	3.434.605	3.608.340
PROFIT PER SHARE (Euro)	0,29	0,35

Net Financial Position as of 30.09.2015

€ thousand	30.9.2015	31.12.2014	Var	30.9.2014
Cash	11.862	12.304	(442)	11.862
Short term debt	(2.467)	(2.154)	(313)	(2.757)
Short term Financial Resources	9.395	10.150	(755)	9.105
Long term debt	-	(1.685)	1.685	(2.034)
Net Available Financial Resources	9.395	8.465	930	7.071

Consolidated Balance Sheet as of 30.09.2015

ASSETS (Amounts in Euro)	30.09.2015	31.12.2014
NON-CURRENT ASSETS
Goodwill	13.133.536	12.993.445
Definite life intangible assets	1.677.298	2.085.369
Intangible Assets	14.810.834	15.078.814
Buildings, plants and machinery owned	1.408.442	1.248.845
Tangible Assets	1.408.442	1.248.845
Other non-current assets	141.572	136.068
Deferred tax assets	1.779.106	1.556.303
Other non-current assets	1.920.678	1.692.371
TOTAL NON-CURRENT ASSETS	18.139.954	18.020.030
CURRENT ASSETS
Inventories	2.767.053	1.820.672
Trade receivables	20.043.309	18.570.928
Other current assets	2.441.893	2.196.824
Cash and other liquid equivalents	11.862.391	12.304.130
TOTAL CURRENT ASSETS	37.114.646	34.892.554
TOTAL ASSETS	55.254.600	52.912.584
EQUITY AND LIABILITIES (Amounts in Euro)	30.09.2015	31.12.2014
SHAREHOLDERS' EQUITY
Share capital	6.503.125	5.911.932
Reserves	15.151.014	12.867.534
Retained earnings	7.412.155	6.018.431
Profit (Loss) for the year	3.434.605	4.172.380
TOTAL SHAREHOLDERS' EQUITY	32.500.899	28.970.277
NON-CURRENT LIABILITIES
Non-current fiancial liabilities	-	1684734
Severance and other personnel liabilities	3.784.078	3.841.200
Deferred tax liabilities	1.163.013	965.428
TOTAL NON-CURRENT LIABILITIES	4.947.091	6.491.362
CURRENT LIABILITIES
Current financial liabilities	2.467.446	2.153.926
Trade payables	1.254.205	1.540.108
Tax payables	225.620	150.971
Other current liabilities	13.859.339	13.605.940
TOTAL CURRENT LIABILITIES	17.806.610	17.450.945
TOTAL LIABILITIES	22.753.701	23.942.307
TOTAL EQUITY AND LIABILITIES	55.254.600	52.912.584

TXT e-solutions S.p.A. Via Frigia, 27 - 20126 Milano (Italy) Tel. +39 02 25771.1 Fax +39 02 2578994 www.txtgroup.com

Consolidated Statement of Cash Flows as of 30.09.2015

Amounts in Euro	30.09.2015	30.09.2014
Net Income	3.434.605	3.608.340
Paid taxes	(78.666)	106.645
Variance in deferred taxes	(25.218)	146.336
Amortization, depreciation and write-downs	826.000	980.242
Cash flows generated by operations before working capital	4.156.721	4.841.563
(Increase) / Decrease in trade receivables	(1.508.365)	(2.062.967)
(Increase) / Decrease in inventories	(946.381)	(155.476)
(Increase) / Decrease in trade payables	(285.902)	(335.945)
(Increase) / Decrease in severance and other personnel liabilities	12.190	84.970
(Increase) / Decrease in other current assets/liabilities	156.140	(272.577)
Changes in working capital	(2.572.318)	(2.741.995)
CASH FLOW GENERATED BY OPERATIONS	1.584.403	2.099.568
Increase in tangible assets	(512.495)	(441.432)
Increase in intangible assets	(29.047)	(25.792)
CASH FLOW GENERATED BY INVESTING ACTIVITIES	(541.542)	(467.224)
Repayment of borrowings	(1.371.214)	(1.457.327)
Distribution of dividends	(2.678.079)	(2.614.596)
(Purchase) / Sale of treasury shares	2.378.634	(463.543)
CASH FLOW GENERETED BY FINANCIAL ACTIVITIES	(1.670.659)	(4.535.466)
INCREASE / (DECREASE) IN CASH	(627.798)	(2.903.122)
Difference in Currency Translation	186.059	(58.770)
Cash at beginning of the period	12.304.130	14.821.027
Cash at the end of the period	11.862.391	11.859.135

Income Statement - Management Reporting Third Quarter as at 30.09.2015

€ thousand	Q3 2015	%	Q3 2014	%	Var % vs 2014
REVENUES	14.277	100,0	12.710	100,0	12,3
Direct costs	6.781	47,5	5.987	47,1	13,3
GROSS MARGIN	7.496	52,5	6.723	52,9	11,5
Research and Development costs	1.122	7,9	1.008	7,9	11,3
Commercial costs	2.927	20,5	2.527	19,9	15,8
General and Administrative costs	1.819	12,7	1.632	12,8	11,5
EBITDA	1.628	11,4	1.556	12,2	4,6
Amortization, depreciation	307	2,2	337	2,7	(8,9)
OPERATING PROFIT (EBIT)	1.321	9,3	1.219	9,6	8,4
Financial income (charges)	(16)	(0,1)	(68)	(0,5)	(76,5)
EARNINGS BEFORE TAXES (EBT)	1.305	9,1	1.151	9,1	13,4
Taxes	(210)	(1,5)	(200)	(1,6)	5,0
NET PROFIT	1.095	7,7	951	7,5	15,1