Earnings call transcript: Duverio Q4 2024 sees stable revenue, stock reacts positively

Duverio’s earnings call for the fourth quarter of 2024 highlighted stable financial performance with gross revenues of $479 million, matching last year’s figures. Despite a 7.8% decline in EBITDA, the company maintained a strong market position, particularly in Italy and Greece. In the pre-market session, Dover Corporation (NYSE:DOV), a $27 billion market cap industrial company with a "GOOD" InvestingPro financial health score, saw a 0.2% increase, with shares priced at $196.91, reflecting positive investor sentiment.

Key Takeaways

• Duverio’s gross revenue remained stable at $479 million for 2024.
• EBITDA excluding non-recurring items dropped by 7.8% to $165 million.
• Dover Corporation’s stock showed a slight pre-market increase of 0.2%.
• Duverio exceeded its annual gross book value target by 25%.
• The company maintained strong market positions in Italy and Greece.

Company Performance

Duverio’s overall performance in 2024 demonstrated resilience despite a challenging market environment. The company reported stable gross revenues of $479 million, maintaining its position from the previous year. While EBITDA excluding non-recurring items decreased by 7.8% to $165 million, Duverio’s strategic initiatives, such as diversifying revenue streams and expanding into ancillary services, have bolstered its market presence.

Financial Highlights

• Gross revenues: $479 million (stable year-on-year)
• EBITDA excluding non-recurring items: $165 million (down 7.8% from 2023)
• Net income excluding non-recurring items: $7 million
• Pro forma EBITDA for 2024: Approximately $210 million
• Exceeded annual gross book value target by 25%, reaching $9.9 billion

Market Reaction

Dover Corporation’s stock experienced a modest increase in pre-market trading, rising 0.2% to $196.91. This movement aligns with broader market trends and reflects investor confidence in the company’s strategic direction and market positioning.

Outlook & Guidance

Looking ahead, Duverio set ambitious targets for 2025, including a gross book value range of $130 to $135 billion and gross revenues between $510 and $615 million. The company also anticipates an EBITDA range of $210 to $220 million and expects free cash flow of €60 to €70 million. These projections underscore Duverio’s commitment to growth and operational efficiency.

Executive Commentary

Emanuela Francky, Group CEO, emphasized the company’s achievements and future focus: "We are proud to report that we achieved around 10% from new business, surpassing our annual target of 8,000,000,000." She also highlighted the importance of integration and leveraging synergies, stating, "Our focus is we promised investors on integration and the leveraging is of paramount importance."

Risks and Challenges

• Economic volatility in key markets such as Italy and Greece could impact performance.
• Potential challenges in integrating recent acquisitions like Gartan.
• Fluctuating costs, particularly in HR due to recent consolidations.
• Increased competition in the non-performing loan (NPL) servicing sector.
• Regulatory changes in European financial markets.

Q&A

During the earnings call, analysts inquired about Duverio’s potential tax credit servicing opportunities and the impact of bank consolidation on flow contracts. Management confirmed that the Gartan acquisition contributed $15-16 million in revenue and $7 million in EBITDA, highlighting its strategic value.

This comprehensive analysis of Duverio’s Q4 2024 performance and future outlook provides insights into the company’s strategic direction and market positioning, offering a clear picture of its financial health and growth prospects.

Full transcript - Dover Corporation (DOV) Q4 2024:

Conference Operator, Chorus Call: Good morning. This is the Chorus Call Conference operator. Welcome and thank you for joining the Doubelius Preliminary Full Year twenty twenty four Financial Results Conference Call. As a reminder, all participants are in a listen only mode. After the presentation, there will be an opportunity At this time, I would like to turn the conference over to Mr.

Daniel de la Seita, Head of Investor Relations. Please go ahead.

Daniel de la Seita, Head of Investor Relations, Duverio: Good morning. I’m Daniel de la Seita, Head of IR at Duverio. Today, I’m pleased to be joined by Emanuela Francky, our Group CEO and David de Sotifti, our Group CFO. We are very excited to share with you the preliminary results of what has been a truly remarkable and important year for Duverio. Following the successful completion of a landmark M and A transaction and a well received right issue, we are proud to present the outcome of a year full of achievements and progress.

Today’s agenda will be as follows: Manuela will start by providing an overview of our results together with insights into the latest market and business trends. After that, David will give a detailed review of our financial performance for the periods. At the end of our presentation, we will be happy to answer any questions you may have. Thank you for joining us today. I will now hand over to Manuela to begin.

Emanuela Francky, Group CEO, Duverio: Thank you, Daniela. Twenty twenty four has been an important year for Duvalier, marked by strong business growth and strategic progress, including the successful completion of the Garran acquisition and the rights issue. We are proud to report that we achieved around 10 from new business, surpassing our annual target of 8,000,000,000 The start of 2025 has been equally positive with 70% of the annual target already reached in the first two months of the year. This demonstrates our solid market position and continued trust of clients versus Duvalho, reinforcing our leadership in the industry and growing market share. Just two months after the closing, we are already realizing revenue synergies from the Gartan acquisition, driven by the value added services we are providing to Gartan customers.

This highlights the effectiveness of our well executed integration profitability, but also the revenue diversification targeted in our business plan. Our EBITDA, excluding non recurring items, stands at $165,000,000 fully aligned with our guidance. This includes one month of guidance contribution. However, we successfully achieved our guidance even on a standalone basis, considering the guidance provided value and guidance, both in terms of revenue, EBITDA and free cash flow for each one. This demonstrates the strength, resilience and consistency of our core operations.

On the cash flow side, we exceeded expectations for leverage, achieving a ratio of 2.4 times compared to the anticipated 2.6 times on pro form a basis. This was driven by strong cash flow generation from all areas of the consolidated perimeter and underscores our solid financial depth and ability to delever as outlined in the business plan. We also optimized our capital structure by redeeming the 2026 notes and successfully issuing new 2013 notes worth $300,000,000 strategically positioning us for future growth and financial flexibility. In summary, our stronger capital structure, robust cash flow and the ongoing integration of Gardens are driving our solid performance and support our expansion strategy. We are confident that these strategic initiatives will continue to generate value for our shareholders.

Moving now to Page three, we can see that GBV intake from new business in 2024 exceeded our annual target by 25%, reaching $9,900,000,000 This strong performance was mainly driven by excellent results increase, where Duvalier secured over 70% market share on all primary market deals closed in 2024. In Italy, we grew our market share despite strong competition, and we expect to benefit from the ongoing consolidation process supported by the barrel transaction. In Spain, despite being a smaller player, we captured over 20% of all NPL deals so far this year. On forward flow, we recorded $4,300,000,000 which is more than the initial target of 2,000,000,000 Regarding secondary mandates, we retained servicing on 100% of the portfolio after secondary market transaction, with a total of $2,800,000,000 in GBD. This was a strong result, especially considering the competitive landscape and also accelerate for fee generation from our existing GBD, thanks to the safe fees and to the advisory revenue.

Lastly, as part of our strategy to diversify revenue streams, about 55 of new mandates in 2024 were non NPL assets, including UTP and other asset classes. This is important step as these assets typically offer higher margin, supporting a more profitable revenue mix. Moving to Page four, we can see the progress on business intake in ’25. We have already reached 70% of our annual target in the first two months of the year, thanks to the Alphabet (NASDAQ:GOOGL) mandates in Greece and the Tier one outsourcing contract in Italy for a significant portfolio. Looking ahead, we have a solid pipeline of $55,000,000,000 projected over the next eighteen months, with the most important deals expected in Italy and Spain.

In Italy, a particularly important opportunity is linked to the collection of tax receivables, where there could be a new law reforming

Conference Operator, Chorus Call: tax collection

Emanuela Francky, Group CEO, Duverio: activity today carried out primarily by the state. We believe that as a reputable market leader, Duval is well positioned to capture this opportunity, which will not all diversify our portfolio, but also significantly increase GBV. Moving to Page five, we focus on synergies and integration, which are a key part of the value creation strategy for the recently completed acquisition of Guardant. As you may appreciate, Duvalu has extensive experience in managing complex integration processes involving a large number of resources as demonstrated by our track record, especially in Italy. These experiences give us confidence in our ability to effectively integrate the Gardens and achieve the planet synergies.

The Gardens acquisition come with a clear and tangible synergy plan, fully within Duvalier control and not dependent on external or uncertain market conditions. This makes the execution highly predictable with clear and measurable targets over a three year period. Also considering our track record of such integration specifically in the Italian market. We began implementing the plan immediately after the acquisition, and we have already realized part of the synergies in 2024, just a few weeks after closing. This was made possible by careful advanced planning, which allowed us to move quickly and efficiently.

In 2024, we signed contracts for value added services, increasing projected revenues and optimize our workforce, evolving $9,000,000 in redundancy costs by redeploying existing resources. The plan continues in 2025 with a chart synergies, IT migration and legal entity simplification, all of which are already underway. By 2026, we will have achieved consistent chart of of disciplines, completed the SE integration, optimized office space and finalized legal entity simplification. We are well on track with 20% of synergies already executed and an expectation to reach 40% by 2025. Our experienced and proactive approach ensure we are fully prepared to capture the full value of the Guardant acquisition.

Moving now to Page six. We review the progress made during the year on the delivery of our business plan assumption we shared in March. As shown by our results and market developments, our assumptions were reasonably set and conservative in nature and target tangible. Starting with GBV, we targeted 8,000,000,000 business per year and we exceeded this target significantly, reaching 10,000,000,000 of new business in 2024. We expect to maintain this positive momentum with 25 posts to hit the target as well.

In our business plan, we put particular emphasis on what we call the engine to our growth, a set of initiatives designed to increase our growth profile by venturing into other sectors with opportunities and synergies beyond our core business. After almost one year, we have delivered on most of these initiatives. We established a mortgage broker license business unit in Greece, which is already generating revenues. Our digital platform for self-service capability in Greece is live and operational, enhancing customer experience and operational efficiency. Additionally, our alternative asset management project has been accelerated significantly, thanks to the Gartland acquisition, which brought in an asset management company with $750,000,000 of assets under management, providing a solid foundation for future growth.

Our business plan envisions a refinancing of the previous bond maturing by December of twenty twenty five. We are pleased to report that this target was achieved ahead of schedule. The ’25 was refinanced with a term loan in December 24 and the ’26 bond was refinanced with a new bond issuance in February 25. The successful capital markets operations were well received by investors with significant oversubscription of the new loans, reflecting confidence in our strategic direction and financial strength. As for the 2024 targets, we achieved a pro form a net leverage of approximately 2.4 times, an improvement compared to our initial forecast of 2.6 times.

Our gross book value reached 136,000,000,000 as of December 2024. We recorded $479,000,000 in gross revenues with an EBITDA of $165,000,000 All financial targets were reached also on standalone basis. Finally, moving to Page seven. Before ending the floor to David, let’s recap on the milestone we achieved. We have made a strong start to 2025 across all strategic areas, positioning ourselves well for continued growth and success.

In the Atlantic Region, we secured $3,900,000,000 in new GDP mandates since the beginning of the year. These results underscore the strong market demand and our solid positioning in this region. Italy also delivered robust results with $1,500,000,000 in new mandates since the start of the year. In addition, we secured $400,000,000 for master servicing, reinforcing our leadership in the Italian market. We also made significant progress on the capital Structure side, issuing the $300,000,000 bond with a 7% coupon and twenty thirteen maturity.

The bond was oversubscribed by six times, reflecting strong investor confidence in our strategic direction and financial strength. These successful issues not only strengthened our balance sheet, but also provide us with the financial flexibility needed to pursue further growth opportunities. The integration of Guardant is progressing smoothly. We are already providing value added services to Guardant clients, leveraging our operational expertise and industrial knowledge. Additionally, we are servicing to do better fees, optimizing our workforce and operational efficiency.

This integration is a key milestone in our strategic roadmap and is expected to generate significant synergies and penetration. On the synergies front, we have already realized 20% of the plant synergies as of first Q twenty twenty five. Looking ahead, we expect to reach 40% at the end of the year. These efficiencies are driven by our disciplined approach to the integration and our focus on operational excellence. Overall, our strong start to ’20 ’20 ’5 demonstrates our commitment to delivering sustainable growth and creating value for our stakeholders.

We remain focused on executing our strategic initiatives, enhancing our operational capabilities and driving long term valuation. With this, let me hand over to David to cover the financials in more detail.

David de Sotifti, Group CFO, Duverio: Thank you, Manuela, and good morning to everyone. So, let’s dive into the financials from 2024. Moving to Page nine, we have a summary of the full year financials. Overall, we are pleased to report very positive results, reaching the high end of our guidance for both revenues and EBITDA. It is worthy highlighting that REGADA contributed for just one month to the group results.

And even without this effect, do value delivered results in line with expectations. Gross revenues in 2024 were $479,000,000 stable year on year, thanks to strong ancillary revenues that more than compensated for a lower level of sales in Greece and reduced revenues from real estate. EBITDA excluding nonrecurring items was $165,000,000 at high end of our our guidance, although 7.8% lower than 2023. This decrease is made due to fewer disposal and unfavorable comparison based leakage to the release of provisions for former CEO and BO. Grease continues to be a strong contributor with the structurally and sustainable higher margin driven by above group average fees, thanks to the high level of market consolidation and lower than group average cost base.

EBITDA margin is in line with the guidance we gave during our Capital Market Day. Net income excluding non recurring items was $7,000,000 which is $5,000,000 higher than 2023, mainly thanks to lower D and A and impairment versus 2023. Moving now to Page 10, here is a breakdown of our gross revenues per region. At group level, gross revenues were approximately flat year on year as lower disposals were largely offset by higher ancillary, further increasing diversification of revenue. Indeed, non NPL revenues in 2024 amounted to 35% of gross revenues on track to reach the 40% to 45% target after line and in the business plan by 2026.

In Italy, gross revenues were up by 11.6% year on year. Gross revenue dynamics were positive even on a $10 basis, driven by positive ancillary revenues and the pickup in NPL collection in Q4, which offset the seasonal weakness in the previous months. In the light region, gross revenues slightly declined by minus 3% year on year, mainly due to lower disposal increase. Lower NPL to TP revenues were partly offset by positive dynamics in value added services. In Spain, the decline was mainly driven by Rio segment to delays in the debt recovery proceedings in an overall challenging middle estate market leading to declining gross revenues by 20%.

Moving to Page 11, we are pleased to show that we continue to effectively manage our cost base, leveraging our ongoing efficiency measures across the group, both in personnel costs as well as IT and SG and A expenses. Total (EPA:TTEF) operating expenses were $268,200,000 in 2024, showing only a minimal increase. This is remarkable considering the initial consolidation of Agardent, a significant $5,900,000 1 off effect with the user HR cost in 2023, and wage inflation in Italy for the renewal of national collective banking agreement. Despite these challenges, we have maintained strong cost discipline across the group, particularly in Spain where we achieved a minus 19% reduction in operating costs, preserving profitability even with the subunit revenues. HR costs were up 4.9% versus 2023, mainly due to the guidance consolidation.

On a stand alone basis, we successfully decreased the HR cost in Spain and in Italy despite the one off positive element in 2023 impacting the base as significant wage inflation in Italy in 2024. The The Lennox region was impacted by the expected increase in HR costs due to the onboarding of new portfolios. Worth reminding you that HR cost increase in Greece was Markets Day back in March. When it comes to AT real estate and SG and A expenses, we report a 3.1% decline year on year, thanks to effective cost discipline practices implemented at group level. Pay has been the most notable driver with the minus 29% decrease in operating costs.

In summary, we remain confident on our ability to improve margins, thanks to our cost saving initiatives and the synergies from Redarda integration. Moving to Page 12, EBITDA excluding and regarding items for the group was 155,000,000 at the high end of our guidance range. Although this marks a decline of 7.8% versus 2023, it is important to highlight that this was due to the postponement of sales and disposal increase and an affordable comparison based linked to the aforementioned release of provision for Formal CEO and BO. The EBITDA for the LENIX region was impacted by higher HR costs and by lower met revenue driven by lower disposals. Marginality improved in Q4, in line with the seasonality pattern of collection driving higher rents.

EBITDA margin in the region was 53.7%, approximately 20 percentage points higher than the group level, driven by the higher pay in collection fees in the highly consolidated market and lower workforce costs versus other counties. In Italy, EBITDA remained stable as positive gross rent dynamics from an acceleration in collection in fourth quarter, which were previously expected in Q1 twenty twenty five, were offset by the increase in outsourcing and HR costs from Gartner (NYSE:IT). Nevertheless, effective cost discipline measures mitigated the significant wage inflation and the one off effect from the former CEO of Saint Leo. In Spain, EBITDA is once again in positive territory as continued efforts in cost distribution measures followed to full offset the decline in Rios. Moving to basic field, we highlight that EBITDA is translating into a positive reported net income of $1,900,000 or $6,700,000 net income excluding and regarding the items.

This is positive outcome showing our ability to maintain profitability even with the lower EBITDA excluding and regarding guidance. Breaking down the number, we faced higher non recurring items due to the costs related to the Garden transaction. We had lower write down on property and plant equipment, intangible loans and investments in line with the collection course also supported by the lower impairment partially compensated by negative impact from the disposal of the Duvalu portfolio. Financial interest and commission increased driven by the new term loan funding the Gatabu transaction partially offset by a $2,700,000 positive effect from the interest component of the tax claims paid. Income tax for the period was positively impacted by favorable comparison base due to DTE write offs in 2023 in Italy and Spain.

The positive impact on net income by the Spanish tax rate is worth $22,700,000 Finally, minorities were mainly related to the value increase. Moving to Page 14, let’s have a look at the cash flow dynamics. Cash flow from operation in 2024 came in 6% higher than 2023 at $83,700,000 Cash conversion achieved a remarkable increase in 2024 at 54% versus 44% in 2023. This positive result was achieved thanks to a notable reduction in net working capital, thanks to continued control of the invoicing cycle and post need dynamics in advance payments. CapEx was slightly higher than 2023, in line with investments in the digital platform outlined in our business plan.

These payments slightly increased the previous year, while a shout for redundancies was lower than expected, thanks to the deployment of two Velios employees to service Gardeners assets under management. Other change in other asset liabilities decreased by 55%, seventeen point seven million dollars lower in line with the trajectory of normalization we envisage for the coming years. Free cash flow was in line with the previous year at 28,200,000 implying a significantly higher conversion given the $20,000,000 lower EBITDA in 2024. Feeble free cash flow was a notable result especially given the increase in charge related to the new term loan and the additional charge linked to the redemption of the 2025 senior secured notes in December. Investment in equity and financial assets remain stable since the nine months result at $3,400,000 of dollars of which $400,000 referred to the acquisition of TIMFOR in Spain in 2023.

Other per million include the cash in liquid rehabilitation in Iberia offset by the payment for Renault (EPA:RENA) in Spain and the disposal of Portugal. These were partially offset by $2,800,000 in flow from financial assets. Finally, the impact related to the Guardian transaction amounted to a net outflow of the $63,600,000 including the cash consideration paid for the acquisition, the cash inflow from the right issue and the related transaction costs. On Page 15, we show our net debt and leverage position for 2024. At the end of the period, net debt stood at $515,000,000 up from $494,000,000 recorded at the September 2024 before the Gardas acquisition.

During the fourth quarter, we successfully rated four forty six term load and $8,000,000 revolving trades facility as part of the GaTAN transaction for which cash consideration paid amounted to $180,600,000 net of the GaTAN’s net debt. Additionally, we redeemed the $265,000,000 5 percent senior secured notes due 2025. We closed the year with a solid cash position of $134,000,000 up to $30,000,000 since September and a joint liquidity buffer of $264,000,000 including on growth revolving fleet facility line. Net leverage at the December was at the level of 2.4 times on a pro form a basis with twelve months of Guardant EBITDA. Better than the 2.6 level, we have guided and better than the 3.1 times level as September 2024 before the the Gatot acquisition.

Leverage was also supported by the acceleration of our collection in Italy, previously expected in 2025, which supported EBITDA. Today on Slide 16, we are pleased to present our newly streamlined capital structure following the extension of all our maturities. This is a significant achievement that strengthened our financial position and reduced refinancing risk. As I mentioned earlier, in November, we secured a 05/26 financing package including $446,000,000 term loan and $80,000,000 dollars revolving credit facility as part of the Gartan transaction. Part of the term loan, which is amortizing and new to Gartan twenty nine, was used in late December to redeem the 2025 secondured notes, significantly extending the duration of our debt.

Additionally, at the February, we successfully issued a new $300,000,000,000 bond due in 2013, which was met by very strong demand achieving over 6x over subscription. We used the proceeds to refinance the 2026 senior secured notes, radically eliminating short term debonancy risk until for the next four years. We remind that Duverio continues to have one of the lowest leverage ratios in the industry and was confirmed in the last net issuance its stable corporate rating, double b stable outlook despite wave of downgrades downgrades among peer group. Turning our attention now to Page 17, we give the guidance for two value in 2025 and confirm our 2026 business plan targets. In 2025, we expect a gross book value between $130,000,000,000 and $135,000,000,000 leading to gross revenues in the hundred million dollars to $615,000,000 range and EBITDA in the range of $210,000,000 to $220,000,000 synergies from the integration of Agata are expected to contribute in line with expectations.

Free cash flow to self dividend and principal repayment can be expected in the €60,000,000 70 million euros range as financial leverage should land at at two times EBITDA. Thank you all for your attention. We will now take your questions.

Conference Operator, Chorus Call: Thank you. This is the Chorus Call conference. Operator, we will now begin the question and answer session. The first question is from Tommaso Nieto of Kepler Cheuvreux.

Tommaso Nieto, Analyst, Kepler Cheuvreux: Hello. Thank you very much for taking my questions. I have two. One is on the numbers. Certainly, they were quite positive, but I’m struggling to understand the dynamics below EBITDA.

So maybe you can give us more color on that and perhaps you can extend that also for the next years, just to understand where we should land in terms of bottom line? And the second question is also on the strong results from ancillaries, which I would say managed to offset the NPL servicing. So what kind of growth we should expect from it in the next years? And how much of this we can consider somehow recurring? And then just a quick one on M and A.

Recently, there have been some rumors on a potential acquisition in Spain. I mean, I do understand it was just a speculation, but I would like to know your thoughts on other M and A activities despite obviously being focused on the leveraging and the integration of Garland. Thank you.

David de Sotifti, Group CFO, Duverio: Okay. I will take the first question. Below the EBITDA, we have mainly the last 3,000,000 net breakdowns on property, plant, equipment and intangibles. This is $73,000,000 we expect in 2025, a higher number because we are including also the amortization from the Gatan acquisition. For 2024, we just have included one month of amortization for the Gatan acquisition that was roughly $2,000,000 So next year will be higher more including the full impact of the guidance.

Then we have the provision for risk and charge. We have included in 2024 is $18,000,000 and we have the impact as I was mentioned before on the $3,000,000 average of the selling of the Portugal branch. Then we need to consider the financial charge that were net $29,500,000 and the results of the financial asset deferred value that are $3,000,000 Top, we need to add the tax impact. It’s been a positive impact by 20,000,000 coming from the tax claim in Spain and we have a tax of roughly 32,000,000. So the net impact is 12,000,000.

And then we need to consider also the minority that is $12,000,000 that are mainly related to the Greece minorities. So, next year, we’ll have also the government minorities.

Emanuela Francky, Group CEO, Duverio: Regarding your second question on ancillary, this is pretty much one of the main driver of our business plan to grow significantly other businesses. So we wanted to perform obviously well on our core business, but all the doctors made an effort to grow the other products, which are data products, master servicing, legal services, real estate services. This has been a particularly important, especially in Italy and in Greece. So definitely there will be recurring for certain of them given that there is a trend in growing this product line. For some others, it depends on the project you make.

For example, on the data quality side, we provide services to banks sometimes or to investors to clean up their portfolios and they are more one off. But all in all, clearly, we are focusing on growing all the ancillary across the various items we have indicated in the presentation. More on that will be 2025 given that the advisory division and the mortgage broking division have been set up and are operating. If you remember, the advisory division was set up in April and recorded already in $2,024,000,000 dollars of EBITDA. So you can we go better from there.

The mortgage broker, we received the approval from the regulatory in October and is already secured in the first two months of the year, significant leads from the main banks increase. In Italy, we have a lot of ancillary which we used to add in the past and push even forward in 2024. Moreover, we other clients, which were outsourcing them from the market. And this is the rising part of the revenue synergies in our integration plan. On the last point on M and A, clearly, the market is in consolidation mode as we have anticipated.

So given that we are the largest operator in the market, we are often associated to some of these transaction in the market. And we look to the transaction in the market. Our focus is we promised investors on integration and the leveraging is of paramount importance. And I think the results of 2024 are showing already very good direction in that front because as the colleagues have mentioned, oddly in the first month of the year, we already recorded 20% of the revenues of the synergies from the integration. We have done four of this integration already in the Italian market.

So it’s one more we know what to do basically. And on the deleveraging part, I think the fact that we exceeded the expectation is a good sign. We obviously want to do better in 2025. Take into account then in the pro form a 2.4 times leverage, we also include some costs that we paid actually in January related to fees for the transaction. So otherwise the leverage would have been even lower.

But given that the transaction was closing end of last year, we wanted to include them as higher debt lower cash in the numbers that we provided to you.

Tommaso Nieto, Analyst, Kepler Cheuvreux: Thank you.

Conference Operator, Chorus Call: The next question is from Simonetta Quirioti of Mediobanca (OTC:MDIBY).

Simonetta Quirioti, Analyst, Mediobanca: Good morning. Thank you for taking my question. I have three. The first is, if you can provide a pro form a number for 2024, including guidance since the beginning of the year. And second question, looking at 2025 targets, if you can walk us through like the bridge between the EUR210 million to EUR120 million EBITDA and the EUR60 million, EUR 70 million free cash flow?

And finally, on Spain, if you could tell us if there have been progression there in your market position and how do you see that market in 2025? And also, you have mentioned some advanced payments that had a positive impact in 2024. I mean, do you expect this to have a negative impact in 2025, if I’ve understood correctly this dynamic? Thank you.

Emanuela Francky, Group CEO, Duverio: Thank you, Simon, for your attention. The pro form a EBITDA was around $210,000,000 for 2024 with over performance vis a vis the standalone guidance of both guidance and du value and both our revenues and EBITDA. On the 2025 targets, David will drive you to the conversion to free cash flow. I would move to the other two questions before I leave the space to David. The Spain has been we have closed obviously last year the restructuring, the clean up of the perimeter with the sale of Portugal was part of the Iberia perimeter and also the closing of the business related to real estate development.

So we have a stabilized and efficient more efficient cost structure. As you have seen, the business has progressed in terms of new intake very well last year compared to the market share. In Spain, we have 6% market share of GBV, but we gained 20% of the mandates in the market. One of the positive points of this business has been the acquisition at the end of twenty twenty three of the latest company called Team Fora, which has helped one, to internalize the outsourcing costs on the small ticket and secured and second, to gain relevant contracts, not only from new banks like BBVA (BME:BBVA). You remember we had started to work with Sabadella, which has given us during the course of last year around billion dollars of after two minutes starting from end of twenty twenty three where they were around $300,000,000 Obviously with the cash as well where we have started towards the previous year.

But PIM4 is also very active in the non banking receivables. So works with the like of Amazon (NASDAQ:AMZN), PayPal (NASDAQ:PYPL) and Utilities. And this is an area of growth that we want to capture through our digital platform and that’s what we have launched already in Greece and we’ll be launching in Italy and in Spain in the first half of this year. This drive us automatic and digital collection, especially in certain segments where traditionally we go with the market growth with the call center type of approach. And open data to all the non Spain on that front has already the platform, so is able to capture it earlier on.

In terms of advance payments, probably there was a misunderstanding. The advance payments were in the years before in 2024, so in 2023. So in 2024, it was normalized the progress. So we had anticipated the cash in 2023. So this ’24.

So 2024 was real cash generation that is progressing obviously in the first month of this year with the targets we have given now for the full year.

Daniel de la Seita, Head of Investor Relations, Duverio: Can explain

David de Sotifti, Group CFO, Duverio: Just starting for the guidance, yes, due to the market for 2025, assuming to be in the middle of the $215,000,000 EBITDA, we need to consider the CapEx and would be roughly $30,000,000 because we are including also the integration costs we have already announced for the acquisition of Garnet. Then we need to consider the IFRS 16 that is $17,000,000 to $18,000,000 We have also redundancy costs always early mainly to the Garnet acquisition plus such redundancy we are doing in Greece and Spain after the investment innovation we have done. We are going to do and also doing 2025, it is roughly 15,000,000 On top of this, we need to reduce the credit cash flow from financial charge and tax that is expected to be roughly $75,000,000 And then we also to consider the reduction of the payment over there now that was due at the end which year to due now in the first quarter of twenty twenty five that is 12,500,000.0. And we also expect some positive outcome in terms of working capital dynamics. Thanks to these are our control over the working capital would be $5,000,000 So to this we should get to the $70,000,000 of free cash flow we have guided the

Emanuela Francky, Group CEO, Duverio: market. Thank you.

Conference Operator, Chorus Call: The next question is from David De Giuliano of Equita.

David De Giuliano, Analyst, Equita: Hi, good morning and thank you for taking my question. The first one is on the ongoing bank consolidation. Is there any impact from bank consolidation of your on your flow contracts with Banco BPM and Beeper? And is there a possibility to potentially lose or automatically acquire new NPE flows following the ongoing consolidation? The second one is on tax credits.

We saw an acquisition by AMCO in credit collection for the public administration over recent days. Are you interested in this type of business, particularly in servicing tax credits? And do you have any potential expansion in pipeline in this regard in Italy? And the third one, sorry, maybe if I missed it, can you please provide us the revenue and the EBITDA from Guardant that was consolidated in the quarter? Thank you.

Emanuela Francky, Group CEO, Duverio: Yes. So, Bagrile, thanks for your question. On the bank consolidation, usually how this contract works, I’m talking in general clearly, but it’s pretty much applicable to flood limits in the sector. Clearly, the companies which work for banks were the targets tend to have closes where if the acquirer wants to exit this contract side of time, we’d have to pay large indemnity that repays the residual value of the contract plus usually the people like to go back to the bank. So you have double cost to grow this contract ahead of time.

Obviously, if you are on the side of the buyer, you have usually the optionality to enlarge your flows if they don’t have already a company working with the target to include the flows of the target. So in case you are a positive, you are protected from exploitation of the contract, in case you are an acquirer and the target doesn’t have a contract, you have the possibility to expand. So all in all, it’s positive it’s neutral to positive. Clearly, in this type of transaction, banks tend to clean up their balance sheet in a combination, so this should produce additional flows. On the second point, it helps the very relevant market trend in the Italian arena, but it’s not all in Italy because we are seeing Clearly, as we have seen also from several articles in the Brexit and Italian markets, the state is looking to see if there is a better more efficient way to recover our tax credits.

The pilot tax credit is huge, is around €1,200,000,000,000, let’s say even if a small portion of it, which is something that has been written, €100,000,000,000 was served by this industry would be very attractive opportunity. So obviously, we are keeping ourselves to manage this type of credits. They have acquired a little company that does specialize in it. These are companies which have less than 1,000,000 EBITDA, all of them. So we are talking about something marginal, it’s more like a license.

But we have already managed the value and guidance in the largest pension credit and tax credit securitization done by the Italian state in the past. A remarkable one was with the INPS tax credit in 1999. So clearly, we would like to have a role into this process. As you have seen vis a vis AMPO, we have reached a very relevant piece of the outsourcing that’s allocated to the market. So we are very happy about the collaboration with them.

On the revenue and EBITDA, the government has contributed around $7,000,000 of EBITDA. And one second. Okay. And around $15,000,000 16 million dollars of revenue.

David De Giuliano, Analyst, Equita: Thank you.

Conference Operator, Chorus Call: The next question is from Davide Rimini of Intesa San Pablo.

Davide Rimini, Analyst, Intesa San Pablo: Good morning. Thank you for the presentation and thank you for taking my questions. I have three questions for you. The first is on the guidance that

David de Sotifti, Group CFO, Duverio: you’ve

Davide Rimini, Analyst, Intesa San Pablo: given and the usual seasonality that your business seems to have during the year. I was just wondering, may you also commented a strong commercial activity? And I just wondered whether you would expect the same seasonality as happened last year? The second question is whether you might provide additional more color on the performance you have collected in Greece and more specifically on the factoring on the lower secondary sales that you have registered and whether you would expect in 2025 to reverse? And the last point and the last question, sorry, was on Slide, I think, on the guidance on Slide 17, actually, it’s ’16.

So whether sort of on the dividend distributions there is no reference on 2025. And given the free cash flow guidance that you provided today, at which point in time of the year you would be probably more inclined to give more light on that front? Thank you.

Emanuela Francky, Group CEO, Duverio: Thanks for your question. On the seasonality factor, we are in a stage in the back given that we are often asked these questions. So we wanted to give a reminder of the seasonality on Page 19. So clearly the business also gardens at similar trends. So clearly we see as a fourth quarter that is stronger than the others as it has historically happened.

Last year, we had promised in November when we announced the nine months that 4Q would have been a stronger quarter and this is also evident from the numbers from the following page of Page 20, probably even stronger cleaned of the guidance effect. On the other side, the possibility to anticipate a lot of the new business at the beginning of the year and this links to your second question about the commercial activity. Last year, we were around November of billion dollars and we went to $10,000,000,000 at the end of the year. So many of these portfolio were onboarded in the second half of the year. Today, we are at $5,400,000,000 at beginning of the year and all of them have been onboarded or will be onboarded by the month of March.

So you are anticipating this effect. And because of the activity we’re seeing in the market, we expect to reach the target of 8,000,000,000 already in the first half of this year. So obviously trying to surpass that target in the second part of the year. So we will not wait October or November. In terms of performance of Greed, you know, secondary sales are not under our control in the sense that it’s not a question of if the investor buy or not buy this portfolio, it’s more about the seller, or when he wants to sell the portfolio.

So we are planning at the beginning of the year about the sales we will do, anticipating the behavior of our clients. Sometimes they want to sell right to that. And based on the what’s the app structure already considered, sometimes they want to sell right away at the beginning of the year, sometimes more at the end. So these states not done this year will be recovered in the first part of twenty twenty five because they are in the pipeline. They just the seller is activating them a little bit later and they take the normal time to be to do the due diligence from the buyers to put the bids on and so forth.

About the dividend distribution, this was the last question. We had indicated 50% to 70% of reported ex NRI net income, which is around this year around $25,000,000 of dividends, pretty much based on our estimates than with plus and minuses. Obviously, more of the year progresses like by the third quarter, probably we could have more visibility on confirming the precise amount.

Davide Rimini, Analyst, Intesa San Pablo: Thank you.

Conference Operator, Chorus Call: The next question is a follow-up from Simonetta Quirioti of Mediobanca.

Simonetta Quirioti, Analyst, Mediobanca: Thank you. On this tax credit opportunity,

Emanuela Francky, Group CEO, Duverio: I would like to understand the

Simonetta Quirioti, Analyst, Mediobanca: better this type of market. So do you expect to receive mandates directly from the state or from buyers of these tax credits? And second question is on guaranteed loans, so NPLs coming from that type of loans. This was considered an opportunity. Can you update us on what’s happening on that front?

Thank you.

Emanuela Francky, Group CEO, Duverio: Yes. On the first point, I think the Minister of Economy is assessing if they would like to do a securitization structure where they sell notes to investors and through a master servicing structure where they appoint a master servicer which distributes the mandates or it’s just acceleration of water today is collected by Agencia de la Terre, which is a bit delayed in the process of collection. So that’s why the state is anticipating it. There are a different auditions at parliament. We had ours just two days ago, where we propose several structures to them and clearly they will define which is the final structure.

But the assignment given that both in the case of a securitization structure or a direct assignment will always be driven by the state given that it’s a very sensitive area. On the guaranteed loans, this has been a quite topic last year. So we have managed several portfolio with NTT guaranteed. We are structuring also a contribution fund for MCC guarantees. Clearly, the amount of the defaults on this asset class is below.

So the state has had the urgency to not had the urgency to accelerate recoveries given that the amount of default has not been very high. But of the amount transacted in the market last year on NPL in the Italian market, Alphabet overall was with these guarantees. So it’s been obviously a clear trend in the market. Thank you.

Conference Operator, Chorus Call: The next question is from Mario Coppola of Stifel. Hello? Mr. Coppola, your audio is open. Is your telephone on mute?

Daniel de la Seita, Head of Investor Relations, Duverio: Hello. Can you hear me?

Conference Operator, Chorus Call: Yes.

Daniel de la Seita, Head of Investor Relations, Duverio: Hello? Okay, sorry, apologies. Good morning and thank you for taking my question. I have only one left actually. I think you mentioned million of impact on cash flow from financial charges and tax.

Does this figure reflect also the impact on the

David de Sotifti, Group CFO, Duverio: P and L? Yes, P and L is slightly higher because to also to amortize the cost of the bond and the term loan. So this is the full cash outflow.

Daniel de la Seita, Head of Investor Relations, Duverio: Okay. Thank

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