• Revenues: 251.6 mln euro (286.9 mln in 2018)
• EBITDA: 10.4 mln euro (*) (8.0 mln in 2018)
• EBIT: -3.4 mln euro (*) (-1.5 mln in 2018)
• Result before tax: -9.5 mln euro (*) (-13.0 mln in 2018)
• Net Financial Position: -249.0 mln euro (*) (-214.6 mln at 31 December 2018)
(*) Results reflect the application of the new IFRS 16.
Exprivia approved today the half-year financial statements at 30 June 2019, prepared in accordance with International Accounting Standards (IAS / IFRS).
As already known, starting from 2019 the new IFRS 16, Leases, has been introduced. It describes the accounting treatment of leasing contracts for companies that adopt international accounting standards.
The following paragraphs show the main differences caused by the adoption of the new principle.
The group closed the first half of the year with a reduction in total revenues, particularly due to the controlled company Italtel, which suffered the consequence of a significant decrease of investments by the TLC operators, mainly because of the continuing erosion of margins in the sector, resulting from a growing level of competition and the absorption of resources required for the acquisition of frequencies for the development of the fifth generation mobile network in Italy.
The TLC operating segment, within the perimeter of the Italtel subsidiary, closed the half year with revenues of 174.6 mln compared to 210.4 mln in 2018. EBITDA stands at 4.5 mln, compared to 1.9 mln in 2018 (with a positive effect from the application of the new IFRS 16 for 2.7 mln). EBIT is equal to -6.4 mln compared to - 5.5 mln in 2018 (with a positive effect from the application of the new IFRS 16 for 0.3 mln) and a result before tax of -10.5 mln compared to -14.9 mln in 2018 (with no significant effect from the application of the new IFRS 16). The Net Financial Position is equal to -192.1 mln (-174.6 mln net of the effect of the new IFRS 16) compared to -168.9 mln at 31 December 2018 and -152.3 mln at 30 June 2018.
The reduction in revenues is attributable to the domestic market of the TLC operators, while the performance in the Private Sector (Enterprise, Banking, Industry) and in the Public Sector is slightly improving, with revenues doubling compared to the previous year. The International market, in particular thanks to the good results of Peru, Brazil and Spain, is growing compared to last year.
The IT operating segment has grown, in the group perimeter net of the subsidiary Italtel, which closed the first half of the year with revenues of 79.5 mln, compared to 78.9 mln in 2018, EBITDA at 6.2 mln (with a positive effect from the application of the new IFRS 16 for 1.2 mln), compared to 6.1 in 2018. EBIT is equal to 3.0 mln (with a positive effect from the application of the new IFRS 16 for 0.2 mln) compared to 4.0 mln in 2018 and result before tax at 1.1 mln (with no significant effect from the application of the new IFRS 16), a decrease compared to 1.9 mln in 2018. The Net Financial Position is equal to -57.6 mln (-50.7 net of the effect of the new IFRS 16) compared to -45.8 mln at 31 December 2018 and -59.0 mln at 30 June 2018.
The performance in the IT markets has been stable, particularly in the Banking & Finance, Industry, Aerospace & Defense sectors, the Energy & Utilities sectors are growing, the Healthcare and Public Sector reported a good performance.
Based on an analysis of the results of the TLC sector, as of June 30, and on the projection of the backlog at the end of the year, the company considers that this situation will persist in the second part of the ear, as no sign of a fast recovery can be forecasted. As a result, the company estimates that the year-end revenues and EBITDA may be down compared to the Strategic Plan 2018-2023 issued to the market the 12nd July 2018.
The Board of Directors has deemed it necessary to carry out an in-depth analysis of the main assumptions of the Strategic Plan 2018-2023, which could lead to its review in the coming months, also with the aim of reviewing and strengthening the IT (Exprivia) and TLC (Italtel) integration project, as a consequence of the market context thus established.
"We recognize and carefully evaluate the results achieved in the first half of the year, being convicted of the goodness of the integration project between the two components of our group, IT, represented by Exprivia, and TLC, represented by Italtel - declares Domenico Favuzzi, president and CEO of Exprivia.- The TLC market, especially in Italy, is experimenting, in a context of increased attention to the importance of digital infrastructures, the effect of the investments concentration on the purchase of new generation networks frequencies (5G). Our group reacts with a strong focus on the main technologies enabling digital transformation, in the reference sectors, to better exploiting these technologies as drivers of its own development, and, at the same time, with a review of the Strategic Plan, particularly with a view on focus and integration that will have to reflect the new market context."
Holding Company Results
The revenues of Exprivia S.p.A., as at 30 June 2019, are equal to 69.3 mln, up 1.2% compared to the same half of 2018 equal to 68.6 mln (*), EBITDA to 6.2 mln (with a positive effect from the application of the new IFRS 16 for 1.1 mln) compared to 5.6 mln (*) in 2018. EBIT at 3.2 mln (with a positive effect from the application of the new IFRS 16 for 0.2 mln) compared to 3.6 mln (*) of the previous year. The pre-tax result stands at 1.6 mln (with no effect from the application of the new IFRS 16), compared to 2.3 mln (*) in the same period of 2018. The Net Financial Position is negative for 56.4 mln (-50.2 net of the effect of the new IFRS 16) compared to -45.4 mln at 31 December 2018 and -54.8 mln (*) at 30 June 2018.
(*) The Parent Company's results for the year 2018 are reported in a pro-forma manner as they reflect from the 1st January 2018 the merger by incorporation of the subsidiaries Advanced Computer Systems Srl and Exprivia Enterprise Consulting Srl, which took place in December 2018.
Pursuant to Article 154- bis of Testo Unico della Finanza, the executive manager responsible for preparing the corporate accounts, Mr. Valerio Stea, states that the financial report in this press release contains and matches the documentary records, books and accounting records.