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TXT E-Solutions Interim / Quarterly Report 2024
4061_10-q_2024-09-10_300871ab-0e82-4892-afef-97d4c8092499.pdf
Interim / Quarterly Report
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| Informazione Regolamentata n. 0439-56-2024 |
Data/Ora Inizio Diffusione 10 Settembre 2024 16:45:06 |
Euronext Star Milan | ||
|---|---|---|---|---|
| Societa' | : | TXT e-SOLUTIONS | ||
| Identificativo Informazione Regolamentata |
: | 195398 | ||
| Utenza - Referente | : | TXTN02 - Favini | ||
| Tipologia | : | 1.2 | ||
| Data/Ora Ricezione | : | 10 Settembre 2024 16:45:06 | ||
| Data/Ora Inizio Diffusione | : | 10 Settembre 2024 16:45:05 | ||
| Oggetto | : | TXT: Results H1 2024 | ||
| Testo del comunicato |
Vedi allegato
TXT e-solutions: First Half 2024 Results
Revenue: €138.2 million (+28.8%) Strong organic revenue growth (+21.9%) EBITDA: €17.5 million (+25.7%) Net profit: €8.0 million (+17.2%).
- Revenues €138.2 million (+28.8%), of which €25.6 million from the Smart Solutions division, €19.0 million from the Digital Advisory division, and €93.5 million from the Software Engineering division.
- Organic revenue growth of 21.9%, driven by the expansion of the Digital Advisory offering for public administration (+34.9%) and by the growth of the Software Engineering and Smart Solutions businesses in the Aerospace & Defence market (+28.3%).
- EBITDA €17.5 million (+25.7%) following significant, fully expensed research and development investments (€6.7 million, +49.8%). EBITDA Margin is 12.7% of revenues.
- Net profit €8.0 million (+17.2%) net of amortization and impairments charges (€5.4 million), interest and financial expenses net of financial income (€1.3 million), and taxes (€2.8 million).
- Adjusted Net Financial Debt of €36.9 million as of June 30, 2024.
Milan, 10 September 2024 – 16:45
The Board of Directors of TXT e-solutions, chaired by Enrico Magni, approved today the financial results as of June 30, 2024.
The main economic and financial results for the first half of 2024 were as follows:
Revenues amounted to €138.2 million, an increase of 28.8% compared to €107.3 million in the first six months of 2023. On a like-for-like basis, revenue grew by 21.9%, with acquisitions contributing €7.4 million. Total international revenue reached €39.9 million, representing 28.9% of total revenue for the first half of 2024.
The Smart Solutions division recorded revenue of €25.6 million, an increase of 30.6% compared to the first half of 2023, of which €3.5 million came from organic growth (+17.8%) and €2.5 million from the consolidation of companies acquired in the second half of 2023.
The Digital Advisory division recorded revenue of €19.0 million, an increase of 31.7% compared to the first half of 2023, entirely from organic growth.
The Software Engineering division recorded revenue of €93.5 million, an increase of 27.7% compared to the first half of 2023, of which €15.4 million came from organic growth (+21.1%) and €4.9 million from the consolidation of FastCode, acquired in the fourth quarter of 2023.
L'EBITDA amounted to €17.5 million, an increase of 25.7% compared to the first half of 2023 (€13.9 million), after increasing research and development investments, totaling €6.7 million, fully expensed in the first half of 2024 (+49.8% compared to the first half of 2023), and after increasing commercial and management costs, which totaled €11.5 million in the first half of 2024 (+9.7% compared to the first half of 2023). The EBITDA margin was 12.7%, a slight decrease compared to the 13.0% recorded in the first half of 2023, due to investments supporting growth. The incidence of general and administrative costs on revenue decreased from 7.9% in the first half of 2023 to 6.9% in the first six months of 2024.
EBIT (Operating Profit) amounted to €12.1 million, an increase of 35.6% compared to the first half of 2023 (€8.9 million), after amortization of intangible assets (€2.2 million, of which €1.9 million related to Purchase Price Allocation), depreciation of tangible assets (€3.1 million), and impairments (€0.1 million).
Net Financial (Charges)/Income in the first half of 2024 had a net negative balance of €1.3 million, mainly due to interest expenses, bank charges, and the result of minority interests. In the first half of 2023, the financial result showed a net positive balance of €1.0 million, due to one-off income related to acquisitions.
Net Profit amounted to €8.0 million, an increase of 17.2% compared to €6.8 million in the first half of 2023, net of tax charges of €2.8 million. Net Profit as a percentage of revenue was 5.8% in the first half of 2024, -0.6 p.p. compared to same period of the previous year.
The consolidated Adjusted Net Financial Debt as of 30 June 2024 was € 36.9 million, an increase of 5.5 million compared to € 31.4 million as of 31 December 2023. This increase was mainly due to disbursements during the period related to the repurchase of treasury
shares (€2.7 million), the payment of dividends (€2.9 million), and the cash outflow at closing for the acquisition of I MILLE and Uasabi (€7.1 million, net of earn-outs), partially offset by cash generation from operating activities. The Adjusted Net Financial Debt as of June 30, 2024, includes €10.8 million of debt related to IFRS 16, an increase of €0.7 million compared to €10.1 million as of December 31, 2023, and €9.7 million of debt for earn-outs and Put/Call options for the purchase of minority interests, an increase of €0.9 million compared to €8.9 million as of December 31, 2023.
The consolidated Unadjusted Net Financial Debt as of June 30, 2024, amounted to €56.2 million, an increase of €19.3 million compared to the Adjusted Net Financial Debt, primarily due to the reclassification of TXT's investment in Banca del Fucino among fixed assets, amounting to €17.8 million.
As of June 30, 2024, treasury shares totaled 1,271,406 (compared to 1,300,639 as of December 31, 2023), representing 9.775% of the issued shares, with a total value of €30.8 million, based on the price of TXT shares on June 30, 2024, which was €24.25 per share.
In Q2 2024, Revenue reached €71.1 million, a 29.2% increase compared to €55.0 million in Q2 2023, with €3.7 million contributed by acquisitions. EBITDA was €8.7 million, up 23.4% from the second quarter of 2023 (€7.1 million). The EBITDA margin was 12.3%, down from 12.9% in Q2 2023, reflecting significant growth investments. Operating profit (EBIT) was €6.0 million, an increase of 35.2% compared to the second quarter of 2023 (€4.5 million), while net profit was €3.8 million
"We are pleased to announce the positive results for the first half of 2024, which confirm our strong growth trajectory and the effectiveness of our strategies." says Daniele Misani, CEO of TXT. "Our diversification plan is advancing successfully, supported by strategic acquisitions and the creation of the new MarTech division, dedicated to cross-sector digital innovation in Creative Advisory and Marketing Automation. The acquisition of key skills and international expansion have further strengthened our competitiveness, opening up even more promising growth prospects for the future. We look forward to the coming months with confidence, believing that the solid foundations laid in this first half will allow us to continue generating value for our shareholders and partners, while remaining committed to technological innovation and operational excellence."
On September 11, 2024, at 11:00 (CEST) a conference call will be held during which the CEO Daniele Misani will present, and comment on the results for the first half of 2024. 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 business outlook
On July 1, 2024, TXT announced the acquisition of 100% of the capital of Refine Direct Srl ("Refine"), a company founded in 2016 that boasts proprietary technologies and specialized expertise in digital marketing, with an offering centered on a multi-channel platform based on Artificial Intelligence algorithms for data analysis. In 2023, Refine's sales revenue reached €16.7 million (+11.5% YoY), with an EBITDA of approximately €3.4 million (EBITDA margin of 20.1%) and double-digit growth projected for the 2024-2026 period. The base consideration paid at closing for the 100% acquisition of Refine, net of earn-outs and net financial position to be settled in cash, was agreed at €21.8 million, of which €12.1 million (55.4%) was paid in cash and €9.7 million (44.6%) was paid in TXT e-solutions S.p.A. shares at an agreed price of €23.00 per share.
The acquisition of Refine followed TXT's investment in I MILLE Group, formalized on June 26, 2024, for the acquisition of 100% of the capital of I MILLE Srl, its three foreign subsidiaries Imille Spain SL, Imille Start Spa (Chile), and Imille Brasil Agencia LTDA, and the agency Uasabi Srl, which specializes in communication for new generations. The I MILLE Group, recognized as a Global Creative Consultancy and one of the leading independent entities in the Italian communication and design landscape, had €11.6 million in sales revenue (+12.7% YoY) in 2023, with an EBITDA of approximately €1.6 million (EBITDA margin of 13.6%), with strong growth prospects supported by the synergistic integration of TXT and Refine's technological expertise into the I MILLE Group's Creative Consultancy offerings and extensive cross-selling opportunities within TXT's prestigious client base of blue-chip and global large enterprises.
With the acquisitions of I MILLE, Uasabi, and Refine - whose economic results will be consolidated by TXT starting July 2024 - TXT has launched its MarTech segment, which is expected to generate revenues of approximately €30 million for FY-2024 (pro-forma), with strong growth prospects driven by commercial and technological synergies with other entities in the TXT ecosystem, and a broad offering based on both Digital Advisory and Smart Solutions provided respectively by the I MILLE Group and Refine.
Also, as part of its growth strategy through M&A, on July 8, 2024, TXT announced a further investment in ProSim Training Solutions (ProSim-TS) through the exercise of an option to purchase 20% of the company's capital, bringing TXT's total stake to 60%. ProSim-TS is recognized as an emerging tech player in the Aerospace & Defence training market, with a high growth rate that has led to over 300 simulator installations worldwide based on innovative technologies. For 2024, ProSim-TS's revenue is expected to exceed €3.5 million, representing over 30% growth from 2023, driven by proprietary software sales, with expected profitability at 15% despite significant investments in product innovation exceeding €1.5 million to be fully expensed in the year. For the 2025-2026 period, ProSim-TS's industrial plan anticipates sustained business growth, supported by synergies within the PACE Group and commercialization of new proprietary solutions, with a projected revenue CAGR exceeding 30%. The investment contract includes additional Put/Call options expiring upon approval of the financial statements for the year ending December 31, 2025, under which TXT will acquire the remaining 40% of ProSim-TS, with additional earn-outs for the selling shareholders.
Regarding organic business growth, after a first half of the year with sustained growth across all operational divisions, TXT's management expects further business development in the second half of the year, with revenue growth stabilizing at double-digit levels driven by commercial and technological synergies and improved business margins due to increased volumes and greater efficiency in general and administrative costs, as well as TXT's historical margin trend.
In terms of markets, after a positive trend in all segments in the first half, further organic growth is expected in the Public Sector (+34.9% in 1H-2024 compared to the first half of 2023) and Aerospace & Defence (+28.3% in 1H-2024 compared to the first half of 2023), driven respectively by the growth of Digital Advisory activities on multi-year public contracts already acquired and the positive trend expected for the civil aviation and defense markets, where TXT is strategically positioned with its digital Software Engineering and Smart Solutions offerings. In the Telco & Gaming market, the Software Engineering offering continues to grow in the third quarter of the year, though with potential slowdowns in top-line growth due to sector developments in the domestic market, while in Fintech, the volume growth remains constant in line with market trends.
Regarding the 2024 M&A plan, following the investments already made for the MarTech offering, TXT is committed to continuing its acquisition strategy aimed at integrating new
TXT e-solutions S.p.A., Via Milano, 150 - 20093 Cologno Monzese (MI) - 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
technologies, specialized digital skills, and excellence in markets already owned or adjacent to current ones.
In the current global geopolitical climate, which has worsened since 2022 due to the Russian military aggression in Ukraine, the escalation of the trade war between China and the US, and the more recent military and political conflict between Israel and Hamas, leading to significant macroeconomic uncertainty and inflationary pressures followed by an immediate rise in interest rates, TXT's Board of Directors currently perceives manageable short-term risks due to TXT's minimal and non-strategic exposure to conflict-affected areas and sustainable financial exposure.
Declaration of the Manager responsible for preparing corporate accounting documents
The Manager responsible for preparing corporate accounting documents, Eugenio Forcinito, declares, pursuant to art. 154-bis, paragraph 2 of Legislative Decree no. 58 of 24 February 1998, that the accounting information provided in this press release matches the information reported in the company's documents, books and accounting records.
From 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, the United States of America, Canada and Singapore. 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] Andrea Favini – IR Tel. +39 02 257711 [email protected]
Management Income Statement as of 30 June 2024
| € thousand | 1H 2024 | % | 1H 2023 | % | Var % |
|---|---|---|---|---|---|
| REVENUES | 138,194 | 100 | 107,299 | 100 | 28.8 |
| Direct costs | 92,896 | 67.2 | 69,949 | 65.2 | 32.8 |
| GROSS MARGIN | 45,298 | 32.8 | 37,350 | 34.8 | 21.3 |
| Research and Development costs | 6,737 | 4.9 | 4,499 | 4.2 | 49.8 |
| Commercial costs | 11,499 | 8.3 | 10,486 | 9.8 | 9.7 |
| General and Administrative costs | 9,564 | 6.9 | 8,444 | 7.9 | 13.3 |
| EBITDA | 17,498 | 12.7 | 13,921 | 13.0 | 25.7 |
| Amortization, Depreciation & Write-offs | 5,368 | 3.9 | 4,977 | 4.6 | 7.9 |
| OPERATING PROFIT (EBIT) | 12,130 | 8.8 | 8,944 | 8.3 | 35.6 |
| Net Financial/Extraordinary income (charges) | (1,346) | (1.0) | 976 | 0.9 | n.a. |
| EARNINGS BEFORE TAXES (EBT) | 10,784 | 7.8 | 9,920 | 9.2 | 8.7 |
| Taxes | (2,831) | (2.0) | (3,135) | (2.9) | (9.7) |
| NET PROFIT | 7,953 | 5.8 | 6,785 | 6.3 | 17.2 |
Management Income Statement – Second Quarter of 2024
| € thousand | Q2 2024 | % | Q2 2023 | % | Var % |
|---|---|---|---|---|---|
| REVENUES | 71,067 | 100 | 54,987 | 100 | 29.2 |
| Direct costs | 47,570 | 66.9 | 35,433 | 64.4 | 34.3 |
| GROSS MARGIN | 23,497 | 33.1 | 19,554 | 35.6 | 20.2 |
| Research and Development costs | 3,396 | 4.8 | 2,268 | 4.1 | 49.7 |
| Commercial costs | 6,663 | 9.4 | 5,244 | 9.5 | 27.1 |
| General and Administrative costs | 4,694 | 6.6 | 4,957 | 9.0 | (5.3) |
| EBITDA | 8,744 | 12.3 | 7,085 | 12.9 | 23.4 |
| Amortization, Depreciation & Write-offs | 2,699 | 3.8 | 2,615 | 4.8 | 3.2 |
| OPERATING PROFIT (EBIT) | 6,044 | 8.5 | 4,470 | 8.1 | 35.2 |
| Net Financial/Extraordinary income (charges) |
(957) | (4.1) | 1,415 | 7.2 | n.a. |
| EARNINGS BEFORE TAXES (EBT) | 5,087 | 7.2 | 5,885 | 10.7 | (13.6) |
| Taxes | (1,241) | (1.7) | (2,010) | (3.7) | (38.3) |
| NET PROFIT | 3,846 | 5.4 | 3,875 | 7.0 | (0.7) |
Consolidated Net Financial Debt as of 30 June 2024
| .000 Euro | 30.06.2024 | 31.12.2023 | Var |
|---|---|---|---|
| Cash | (47,503) | (37,927) | (9,576) |
| Trading securities at fair value | (27,428) | (24,058) | (3,370) |
| Other Short Term Financial Assets | (400) | (810) | 410 |
| Short term Financial Debts | 58,175 | 57,654 | 521 |
| Short term Financial Debts | (17,156 ) |
(5,141 ) |
(12,015) |
| Non current Financial Debts - Lessors IFRS 16 | 6,953 | 6,423 | 530 |
| Other Long Term Financial Assets | (532) | (700) | 168 |
| Other Non current Financial Debts | 66,979 | 51,140 | 15,839 |
| Non current Financial Debts | 73,400 | 56,863 | 16,537 |
| Net Financial Debt | 56,244 | 51,722 | 4,522 |
| Non-monetary debts for adjustment of the price | (1,559) | (2,500) | 941 |
| of the acquisitions to be paid in TXT shares | |||
| Financial Investment - Banca Del Fucino | (17,778) | (17,778) | - |
| Adjusted Net Financial Debt | 36,906 | 31,444 | 5,463 |
Consolidated balance sheet as of 30 June 2024
| € thousand | 30.06.2024 | 31.12.2023 | Change |
|---|---|---|---|
| Intangible assets | 91,783 | 85,900 | 5,883 |
| Tangible assets | 22,078 | 20,430 | 1,648 |
| Other fixed assets | 24,049 | 24,462 | (413 ) |
| Fixed Assets | 137,911 | 130,792 | 7,119 |
| Inventories | 24,700 | 18,733 | 5,967 |
| Trade receivables | 71,193 | 74,346 | (3,153 ) |
| Other short term assets | 16,162 | 14,876 | 1,287 |
| Trade payables | (21,882 ) |
(21,585 ) |
(297 ) |
| Tax payables | (9,762 ) |
(11,208 ) |
1,446 |
| Other payables and short term liabilities | (37,336 ) |
(34,761 ) |
(2,575 ) |
| Net working capital | 43,075 | 40,402 | 2,674 |
| Severance and other non current liabilities | (6,410 ) |
(5,603 ) |
(807 ) |
| Capital employed - Continuing Operations | 174,576 | 165,590 | 8,986 |
| Shareholders' equity | 118,271 | 113,852 | 4,419 |
| Shareholders' equity - minority interest | 64 | 17 | 47 |
| Net financial debt | 56,242 | 51,721 | 4,521 |
| Financing of capital employed | 174,576 | 165,590 | 8,986 |
TXT e-solutions S.p.A., Via Milano, 150 - 20093 Cologno Monzese (MI) - 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
| Fine Comunicato n.0439-56-2024 | Numero di Pagine: 12 |
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