Earnings call transcript: Tinexta Q4 2024 sees strong growth, stock surges

Tinexta SpA reported robust financial results for Q4 2024, with total revenues reaching €455 million, marking a 15% year-over-year increase. Adjusted EBITDA rose by 8% to €111 million, while net profit stood at €25 million reported and €50 million adjusted. Following the earnings announcement, Tinexta’s stock surged 14.13%, reflecting investor optimism about the company’s performance and future prospects. According to InvestingPro data, the company maintains a strong financial health score of 2.57, rated as "GOOD" by their proprietary analysis system.

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Key Takeaways

• Tinexta’s revenues increased by 15% year-over-year to €455 million.
• Adjusted EBITDA grew by 8% to €111 million.
• Tinexta’s stock price rose by 14.13% post-earnings announcement.
• The company is focusing on integration over mergers and acquisitions in 2025.
• Tinexta is developing new technologies, including a generative AI solution.

Company Performance

Tinexta SpA demonstrated strong financial performance in Q4 2024, driven by growth across its business units. The Digital Trust division led with €207 million in revenue and €65 million in adjusted EBITDA. Cybersecurity and Business Innovation also contributed significantly, with revenues of €106 million and €150 million, respectively. The company’s strategic acquisitions and focus on operational efficiency have bolstered its competitive position in the market.

Financial Highlights

• Revenue: €455 million (+15% YoY)
• Adjusted EBITDA: €111 million (+8% YoY)
• Net Profit: €25 million reported, €50 million adjusted
• Free Cash Flow: €42 million
• Net Financial Position: €322 million (2.79x NFP/Adjusted EBITDA)

Market Reaction

Following the earnings release, Tinexta’s stock price surged by 14.13%, closing at €8.175. This increase reflects positive investor sentiment, likely driven by the company’s robust financial performance and optimistic outlook for 2025. The stock’s movement contrasts with its 52-week low of €7.325 and positions it closer to its high of €19.65, suggesting renewed investor confidence.

Outlook & Guidance

For 2025, Tinexta projects revenue growth of 7-9% and organic EBITDA growth of 15-17%. The company aims to reduce its leverage ratio to 2.2-2.5x. Growth is expected across all business units, with Digital Trust and Cybersecurity forecasting 7-9% and 10-12% revenue growth, respectively. Tinexta is also exploring new business lines within its Business Innovation division, leveraging Industry 5.0 incentives.

Executive Commentary

CEO Pirandrea Chevalar stated, "We are moving from a phase of expansion by M&A towards a phase of integration," highlighting the company’s strategic shift. He emphasized Tinexta’s commitment to addressing the evolving needs of digital companies. Joseph Mastrogostino, Chief Investor Relations Officer, remarked, "Industry 5.0 becomes the enabler," underscoring the importance of technological advancements in driving future growth.

Risks and Challenges

• Integration of recent acquisitions could pose operational challenges.
• Dependence on Industry 5.0 incentives may affect Business Innovation’s growth.
• Regulatory changes in cybersecurity could impact compliance costs.
• Economic uncertainties in Europe might affect overall demand.

Q&A

During the earnings call, analysts inquired about Tinexta’s cautious approach to M&A in 2025. The company plans to focus on integrating recent acquisitions, particularly in the cybersecurity sector. Executives also addressed the expected improvement in the ABF (French subsidized finance) business in the latter half of 2025, emphasizing confidence in Digital Trust’s growth potential and exploring new business opportunities within Business Innovation.

Full transcript - Tinexta SpA (TNXT) Q4 2024:

Conference Moderator: Ladies and gentlemen, thank you for joining Tenexter’s Capital Markets Day in Milan. The presentation is about to begin. Let me hand over to Joseph Mastrogostino, Chief Investor Relations Officer of Tenexta Group.

Joseph Mastrogostino, Chief Investor Relations Officer, Tenexta Group: Good afternoon and good morning to the folks connected from abroad. Thank you for joining Tenexta’s twenty twenty four results and 2025 outlook. Here with me today, we have Pirandrea Chevalar, Chief Executive Officer of Tenexta Odoni Paltse Group’s Chief Financial Officer Danilo Catano, Infochett’s CEO Andrea Vingolo, Visura’s CEO Andrea Monti, T Nexa Cyber Managing Director Emilio Gizon, Defense Tech CEO and Fiorenzo Belelli, Warrntop’s CEO. Thank you for being here, and we’re very pleased to have you here in our brand new state of the art facility here in Milan. For the purpose of this slide, I will go over the agenda.

On Page three, you can see what we will be discussing today starting from an executive summary. Then it will be Pirandrea, who will go over fiscal year twenty twenty four business highlights. Or Dona will give us a deep dive of the financials for 2024. I will give you the BU outlook of all the three business units and then all three of us will take a stab at strategy pillars as well as the 2025 outlook, where Aldona will guide us through the guidance for 2025 and we’ll have some prepared closing remarks. Let me given that this is an official presentation, let me go over the disclaimer.

The company presentation includes forward looking data based on internal management assumptions that are subject to material changes, including changes to external factors beyond the group’s control, management data when presented or identified as such. Business unit data are divisional and include intra BU items, which are instead eliminated at a group level. For detailed information on Tenexxa SPA, it is recommended to refer to the company’s documentation, including the latest interim reports and the company’s financial statements. As you all recall, Tenexa is an industrial group and offers innovative solution, in particular in the digital transformation world. The group is active in strategic sectors of digital trust, cybersecurity and business innovation.

And as you all know, we are listed on the star segment of BOSS ITILIANA. You’re all very familiar with Allstones for in terms of the equity story. Even this year, we registered further growth. But let me deep dive directly on the main numbers for financial data as of 12/31/2024. Revenues came in at $455,000,000 growing 15% versus the prior year.

EBITDA adjusted reached $111,000,000 growing 8% versus the prior year. Net profit was on a reported basis was $25,000,000 while on an adjusted basis it was $50,000,000 Still strong, the free cash flow at $42,000,000 NFP, which reflects the most recent acquisition, came in at $322,000,000 or 2.79 times the NFP over adjusted EBITDA, and that includes the pro form a contribution of Defense Tech as of 01/01/2024. Let’s give a nice glance to the different business unit. Digital Trust, bottom left, outstanding year. We reached $65,000,000 in terms of adjusted EBITDA, $2.00 $7,000,000 was the revenue on a fiscal year 20 I think the I think the numbers speak for themselves.

Cybersecurity, we grew 19% in terms of EBITDA adjusted. This includes also the contribution on a pro form, pro quota basis. That means as of 08/01/2024, in terms of Defense Tech, so we reached $18,000,000 and revenues went over $100,000,000 at $106,000,000 growing 19%. Very strong was obviously the margin, thanks also to the contribution of Defense Tech. Business innovation on the right side of the slide reached $44,000,000 of EBITDA adjusted with revenues that came in at over $150,000,000 and the margin was mostly impacted on the different mix.

Here, I think every year is important to highlight how the growth continues to be very strong. Revenues in terms of CAGR reached 20% from 20% not 14% to 24%. Even more importantly, I think is the contribution in terms of EBITDA, where the CAGR reached almost 26%. NFP, as you can see here, reflects the recent acquisition and the leverage ratio came in at 2.79 times, but Odona will give you much more color in terms of also covenants and what else. On Slide 11, what you see here is basically the cadence of the EBITDA.

Even this year, the latter part of the year, in particular, the second half was very strong and was very I would say the overall weight was around 69 as you can see. We registered almost more than all the first three quarters put together in terms of EBITDA. In fact, the fourth quarter EBITDA had a relative weight of 50% coming in close at $55,000,000. Pirandrea will go over the business highlights, and I’ll leave the word to Pirandrea.

Pirandrea Chevalar, Chief Executive Officer, Tenexta Group: Thank you, Josef, and thanks to everyone who joined us today, both in person and via conference call. First of all, I wish to stress how important it is for us to meet the financial community during this year’s meeting to discuss the main factors that characterized our financial performance, especially in a year when and I wish to underline this for the first time in our group’s history, we were not able to deliver our guidance. Before going over all the elements which influenced our results, let us turn to Slide 13 to illustrate some key events of 2024. At the beginning of the year, we finalized two important deals related to expansion of our Business Innovation division. The first being the acquisition of nearly 74% of our BF Group in January with the aim of to enter the French market for subsidized finance.

And the second one relating to the acquisition of Le Novis. I think it’s mandatory to start from BF and our knowledge that its performance throughout 2024 has not been in line with our expectations. Why? The reasons lie on a variety of external factors, which were outside of our control. In particular, the political turmoil in France was completely unfeasible and unpredictable.

The frequent government changes, I remember that last year we had four different government in France. The frequent government changes led to significant budget cuts and cancellation and approval of public financing tenders. I would and I wish to stress the fact that such phenomenon was unprecedented and never registered in the last decades of France histories. All these things put together in a relatively short period of time made a notable impact on the company’s performance and weighed down the overall group result for the year. Notwithstanding that and to diversify our business innovation portfolio, in February 2024, we acquired the 60% of Le Novis, an Italian company active in strategic consulting and lean management.

And we launched our advisory business line, which we expected to become a very important part of our offering, especially in the mid corporate range where there are plenty of greenfield opportunities. Our cybersecurity business unit also experienced some important changes with the acquisition. In April, we acquired the remaining stakes of Corvall de Siro and Zwoscan and we integrated them in the following months in Tinexo Saib. Furthermore, we decided to exercise the call option on the 40% of defense stake in June, which triggered a mandatory tender offer that was completed in November. Both these transactions aimed at establishing Tinexa as a comprehensive cybersecurity hub in Italy required a significant reorganization effort in order to improve our level of efficiency.

The focus needed on this adjustment and the changes in leadership that followed impacted on the level of delivery for this division. However, 2024 has also set the basis for some key regulatory tailwind, which we expect will drive future growth in these divisions. For instance, the launch of Industry five transition five point zero tax credit plan in Italy, which has been amended and improved at the end of twenty twenty four in order to facilitate its implementation as well the introduction of the door and its two directives on the national and the European Union level. As for Digital Trust, already Josef said, the numbers speak for themselves. In 2024, the division recorded an impressive performance with an EBITDA adjusted margin of 31% and it again its historical high.

Notwithstanding the macroeconomic and geopolitical certainty and the challenges of an ever changing environment. We are confident that our strong brand positioning, opportunity which will arise throughout the regulatory efforts to increase the level of digitalization in European Union, I mean, the European wallet, the invoicing will allow us to maintain interesting level of growth, which this division has experienced in the last decade. 2024 results were still very positive with overall GAAP revenues reaching almost more than EUR $450,000,000 or if you want 11% versus prior year. And EBITDA adjusted, as Jozer mentioned before, posted an 8% growth to EUR 111,000,000 with an healthy margin of 24.4%. Let me add to that by saying how important it is to Fortinixa to maintain a strong identity as a group and create meaningful synergies across our divisions and business lines and nurturing a strong company culture with over 3,000 employees in 12 countries across the world.

To conclude on this slide, I’d like to provide an update on the dividend, which we will propose this year as a general assembly. EUR 0.3 per share for a total value of about EUR 40,000,000 showing that we keep our commitments to provide the shareholders with the satisfying returns. Moving on to slide 14, I would give some more insight on the key items on 2024. Notwithstanding positive growth in results, we decided to react in time limit and we have carried out an in-depth analysis on planning and goal setting model to set the targets for the next years that are first and foremost achievable and that prioritize delivery in the future. Q4 was still a stronger quarter on the overall company results, with an EBITDA adjusted of nearly EUR 55,000,000, boasting a margin of more than 36%.

As mentioned before, one of the main actions of 2024 was the important reorganization of Cybersecurity Business Unit following the incorporation of three subsidiaries under the Tin Exa Cyber umbrella. Furthermore, with the successful acquisition on defense tech holding under Tin Exa Defense, we will be able to expand the scope of our business, create the basis for meaningful synergies and enhance our presence within the very promising public administration of space and defense segments. Turning to Slide 15, I would like to take the time to analyze what went wrong in 2024 and what are the actions we are already taking in 2025 to resolve these issues. We have already reviewed the ABF performance, which was mainly attributable to country specific downturn. Given the unpredictable situation, we took close attention to analyze the company’s order book and customer basis.

And at the same time, we closely scrutinized the process application, cost analysis and resource allocation to identify areas of improvements. Moving on the single business unit, starting with cybersecurity, the main issue determining a slowdown in performance was the strong focus on the incorporation of Eurois, Roscan and Corvallis under the next cycle, as well as the impact of the different revenue mix weighed down by an increase of the resale component and lower operational efficiency in services leading to lower level of performance despite the opportunities we well know driven by growing market. In 2025, our objectives are clear and they focus on integration of all services within the business unit, eliminate redundancies, optimize the mix between

Donato Mercuradino, Chief Financial Officer, Tenexta Group: And

Pirandrea Chevalar, Chief Executive Officer, Tenexta Group: the third party services. And most of all concentrate on and most of all concentrate on the reorganization of the sales and operations departments with the aim to promote and expand the development and knowledge of key employees. The Business Innovation division has also been impacted by significant changes in the Italian subsidized finance landscape. Namely, in 2024, there were known reduction in deductible rates related to industrial four point zero tax credit combined with the delay in the implementation of the transition five point zero program were two of the main drivers of division’s drop in performance versus the past, together with an increasing demand of low margin activities. The main action we are taking in 2025 regarding this division refer to a shift in the business unit to business model toward a comprehensive advisory framework integrating all business lines combined with the simplification of the organizational structure focusing on delivery and higher efficiency, also with regards to employee responsibilities.

Slide 16. I delight Tenexa needed to strengthen its role as parent company, steering away from the mere concept of being an holding and instead taking on a proactive approach to foster unified strategy across business unit subsidiaries to promote a one group identity. T Nexa’s key duty is the head of the group as depicted in the slide is to provide the subsidiaries with the shared services in strategy, M and A, innovation, investor relations, just to name a few, at the group level as well as coordinate a cross functional department such as HR, legal, external communication and administration and finance. To foster the development of a single company culture across the different business units. Here are some key elements of the One Group model which we are putting in place intended to pursue for the future innovation, which has always been one of the key pillars of our value proposition.

Our main objective is to monitor the market for new opportunities and promote innovation across the different parts of our group, leveraging on capabilities and synergies across business units advisory. As mentioned above, one of our twenty twenty five goals is to establish an advisory based ecosystem under the Tenexxa brand to satisfy the evolving needs of our corporate customers of all size, leveraging on the increasing demand driven by an evolving regulatory environment. Reach, this integrated innovative framework will allow us to expand our customer base toward segments with high growth potential such as the public administration sector, internationalization. Of course, the expansion includes also new potential market where we can successfully replicate the next business model, especially in the European Union. Integration and synergy.

One of Tenexta’s main strengths as a group is the ability to cross sell and create synergies across the different business units, such as the concept of cybersecurity by design, which implies the potential of implementation of cybersecurity services in the digital trust landscape. The implementation of a single group strategy creates a philosophy across the different business unit, which can be beneficial for collaboration and synergies to create more value. One group. Ultimately, our objective is to establish the T Nex Identities as a unique group, a leader in ICT markets at the pan European level with a strong unified strategy across a variety of strategic business lines. The scope of our presence at an international level is, I think, very clear.

With acquisition we completed in the past with acquisition we completed in past years, we are now present in 12 countries with 38 subsidiaries, reaching an account of 3,000 employees. Italy remains our primary market, representing around 83% of our revenues, but we have a significant development of reach outside of Italy. Growing in ICT industry, a growing market full of a growing ICT industry, a growing market full of potential opportunities. To conclude, before leaving you to the numbers leaving Odone, I would like to provide some colors on 2025, which will be on setting achievable goal. For that matter, the guidance will be an outstanding one.

Revenues are expected to go between 12% to 14% versus 2024, ’7 percent, ’9 percent on an organic basis. EBITDA adjusted to increase by 15% or 17 versus twenty twenty four, 10 percent, 12 percent on organic basis. The leverage ratio is expected to land between 2.2 to 2.5, confirming the strong financial solidity of our group and its continuous growth. I will now leave the stage to Don Quixo Mercuradino, Mario

Donato Mercuradino, Chief Financial Officer, Tenexta Group: Good afternoon, everybody, and thank you to be here. So we went through a preliminary analysis from Pier Andrea and Josef on the figures. But like we said, we had an year where we didn’t achieve the targets that we set at the beginning. But still, as you can see here, we have a company that is overall growing and still growing at quite interesting pace. Revenue came in excess of EUR $450,000,000 with the EBITDA peaking EUR 111,000,000 at 24.5%.

Net profit is down driven by interest that impacted the company after the acquisition as well as the PPA that we applied in term of amortices. Let’s move now to the P and L. I will try to go a little bit more in-depth here. As you can see here, we have a comparison both on organic basis and on non organic basis. Non organic basis in term of revenue was mainly driven by the contribution we had for the full year for ABF for something less than EUR 20,000,000 and around EUR 50,000,000 from Defense Tech that is consolidated since August 2024.

Definitely, the comparison in term of margins between the two areas are very different. And also, I think we have been impacted by the performance. So IBF for the reason that Pierre Andre explained. As you can see on a comparable basis, basically, the company on personnel cost was able to keep the level over the previous year. It has not been easy to do that because on organic basis, we went slightly down, while the revenue mix and the usage of third party was not aligned with our forecast.

This is the main driver of the lack of profitability that we had, but still, we are running at 24.4%. Again, I remind you that the impact of ABF has been struck. The 24.4% still is a very interesting margin and then we work through the different business unit to deeply analyze. One off cost between EBITDA adjusted and EBITDA were pretty big because we invested a lot in term of M and A costs for running these two big acquisitions. And on top of that, we had some actions on the cost cutting through some inactivated layoff.

Depreciation amortization grew mainly as for change of perimeter as we included there the new companies and we increased the level of amortization from the purchase price allocation of the company. Financial charges went up compared to the previous year. On operational basis, the balance of interest is up EUR 6,000,000. If you consider that you invested more than EUR 70,000,000 in ABF and other EUR 60,000,000 in Defense Tech. So we are talking about more than EUR 130,000,000 cash out that brought basically a difference of EUR 6,000,000 more interest.

On taxes, we got the benefit from two things. The first thing is the patent box that we got on digital trust business. So we got a one off benefit of EUR 5,000,000,000 that in term of cash will come in the future years as well as, you know, the what is called in Italy, the Francomento that we have done on warrant out. This led to more than 8,000,000 benefit on taxes. As you can see here, the component related to no recurring items is quite important, like like we said, And let’s say, I mostly address them during the presentation of the P and L.

So we have the cost of non recurring costs for personal costs that we have here, non recurring service costs for the M and A activity. The amortization of the PPA came up to close to $25,000,000 so this is basically a decline in our intangible asset through the depreciation. And then we have also the $9,300,000 benefit from the tax matters that I already explained to you. I will move on to the next page as I try to deep dive on the different business. On digital trust, I call here both for Infoset and Dizura, we have to say that the performance is more than outstanding.

You know, here, both the revenue increase on a pro form a basis, but I would say even more, the revenue of the growth of the EBITDA that on a organic basis went up 14% is a truly outstanding performance. The two companies are able to deliver a strong revenue growth, but also the year at the level of efficiency, a continuous improvement that is definitely making the difference. And it’s very clear that who is following us since Sears, especially Infosys is now is probably 12 quarters that is delivering like this for this result. The company went up in most of the areas of activities at double digit rate. The only area that has the pace a little bit lower than the passport was the online sales and this was a partial and also partially impacted the cash generation because the online sales are bringing cash upfront.

But nevertheless, the online sales went up 1.7%. That’s what we talk when we talk about 25% already some action has been taken. Combined to this was two things, a really strong focus on costs because both Infosert and Danilo and Andrea focused a lot on the cost efficiency of the company with some programs that were put in place and this was helped to reach the result. During 2024, Infosert and both Visura made strong investment in CapEx. Infoset went through a continuous improvement of the product usability integration of its platform and this has been a strong investment.

This nevertheless, the company was able to deliver the result. On top of that, Vizora worked for the last months of the year in a project that will be launched to the market during before the end of the month. It is a new project for its customers on the with the help of the let’s say, it’s a generative AI based solution. Let’s move to the cybersecurity. Here, let’s start from Defence Tech.

Defence Tech has been consolidated only for five months, but still the contribution to the group result has been very positive. The company delivered in the last five months EUR forty million revenue with EUR 4,800,000.0 EBITDA. Definitely, this is not because the company was listed, so it’s very easy for you to understand what is going on. Basically, in the last five months, they deliver almost 50% of the EBITDA of the year. In term of you know the former cybersecurity part, the results was not what we expected.

It’s very clear the drop in term of profitability is not something that we were expecting and there are few reasons that drove to this result. First of all, the revenue mix. As you can see here, the revenue in services that is the part that is driving the marginality, especially in the cybersecurity, went down. We compensated the revenue with some sales of products, proprietary products that went very well, help to mitigate the result. But the resale of third party products obviously negatively impacted the results and this is the main reason of the drop of the profitability.

We are to consider that the company already started to cut some costs but was not enough to deliver the expected result. On the business innovation, the situation, as Pier Andrea mentioned, the situation was impacted definitely from some regulatory situation in Italy and from the political environment in France. It’s very clear that, you know, the change of four governments in just one year on ABF is working a lot in trying to file dossier on the France De Miltrand program that definitely has to go through the prime minister office. And you can imagine when you have a change of four prime minister office is basically impossible to achieve the results. As soon as we add some political stability, the company during Q4 delivered slightly better.

But at the end of the day, the company delivered a very low results that accounted for EUR 19,000,000 revenue with just only EUR 3,000,000 EBITDA. There is a part of business that the management consider it that is flowing into ’25 and we are expecting this business to come up during Q1. On the company was affected, as is mentioned here, by acquisition that you have of Sudofiecki, IVF, Le Novis and Warren Funding Projects. So you know the environment changed quite a lot and trying to put together all this company was not easy. Nevertheless, what’s happening on the transition five point zero is most definitely.

So basically, profitability revenues coming from this part of business was zero and this was one of the fundamental pillars of our 2024 plan. We add some other part of business that went well. For example, digital innovation business went well at a pretty double digit rate, but what’s happening on the industry five point zero combined with the declining rates of the four point zero led to this result. Results at year end of the year, so was at €44,000,000 with a decline compared to the previous years. In term of balance sheet, obviously, all the acquisition we have done during the year has reshaped a little bit our balance sheet.

Capital invested went up to not far from EUR 800,000,000, driven mainly by from the acquisition as well as we had some slight impact from the working capital, but this was mainly driven by tax and deferred tax asset that are following what I told you before. Net financial position is now at EUR $320,000,000 that is after all the acquisition well below three times still in a very safe environment compared to the capability of the company to deliver cash flow. Chalot del equity obviously went up because of the results of the year, but we remember that last year, the company delivered almost EUR 30,000,000 dividends during last year. I will go now to Page 28. I think we can skip here.

In term of EBITDA, obviously, the main driver of the growth is linked to the acquisition that counted on the net financial position for EUR $222,000,000. That is the main driver of this growth. In terms of free cash flow, we has been impacted mainly by two things. The first thing is the CapEx. The CapEx called for EUR 39,000,000 compared to the EUR 26,000,000 the previous year, especially the two projects in Digital Trust and especially Infocerci and Visura has impacted these results, but this has been a one peak performance at what we have in the guidance and the budget for the following year, each much lower and back to the traditional rate of investment of the group.

On the net working capital, definitely, we enter also in two businesses like AVF and the Festec that has a very long cycle in term of cash collection.

Joseph Mastrogostino, Chief Investor Relations Officer, Tenexta Group: Let me take a stab to the BUs. We’re going to start with Digital Trust and then go on with cybersecurity as well as the business innovation. On this slide, we’re giving you a snapshot. We already went over the very noticeable results that were registered by the Business Trust division, outstanding numbers, great marginality as we said. I think it’s important to highlight now the positioning of eForShell today at a pan European level, right?

The company grew tremendously in the last five to six years, but now we are very proud also to announce our, placing with very noticeable names such as DocuSign and Adobe. On the bottom left, you can see how a relative part of InfoShare revenues comprising of Digital Trust Management shows our positioning. And I think this is kudos to the entire business unit, which has done a tremendous job. Today, the next through Infosert is the gold standard. It is a gold standard at a pan European level.

We are the only qualified trust provider that you can see at a pan European level ranging from obviously obviously operating in Italy, France, Spain, Germany and also in The UK more recently, we’ll talk about Ashesi because it has done also a very good job in the last year or so. As a reminder, the beauty of this business model is the quality of revenue. So on one side, you have off the shelf revenue, which are by nature recurring, 100% recurring revenue. These are mostly, as you know, mainly subscription based towards private individuals or SMEs. But more interestingly, I think is the growing percentage also of enterprise solutions, which is growing in terms of recurring revenue as well.

Those are more the tailored custom solutions that they are towards the corporations. Some KPIs on the bottom also to give you the sheer depth and size of InfoChat, ten million plus users, 60 plus countries reached and 5,600 corporate customers. On the right side, very promising market, 4,000,000,000 is the value of digital trust management, transformation management market in The U. And about 400,000,000 of those are in Italy alone, growing high single to low double digit in terms of CAGR from ’22 to ’26. Let me move to, I think some areas of digital transaction management that are very interesting, namely digital identity and e voicing.

Digital identity is extremely important. Pierre Andre highlighted the obviously the big news. There’s a

Conference Moderator: lot of fuss about the European digital wallet and

Joseph Mastrogostino, Chief Investor Relations Officer, Tenexta Group: it will be implemented by European digital wallet and it will be implemented by 2027. But today, Infocerat is at the forefront of innovation, moving as one of the only qualified trust providers that is going in that direction together also with the company that we have in France, as you know, Certiorov. Attributes will be an important part of the wallet. That means that qualified trust providers will have a pivotal role in actually authenticating the documents and authenticating the data that will go within the actual wallet. And again, going to the forefront of InfoChet, the opportunity to develop a proprietary wallet that Infoschetta has already launched and we are the first movers in the market.

We’re seeing that also a lot of the competitors are watching with a lot of appreciation with what we’re doing in the market. And this will be extremely important when it comes down to the interoperability of the upcoming European digital identity wallet. Another area, which is I think extremely interesting is e voicing. E voicing, which is mandatory in certain countries, I remind everybody that in Italy it was introduced back in 2018. It is now becoming mandatory at a pan European level.

We’re talking about 1,500,000,000.0 worth of the market. So extremely interesting growth trends. You can see them are all in the double digit league. EU member states such as France, Spain, Poland and Germany are moving towards mandatory adoption. And here, we’re actually utilizing the experience that we have back home in Italy to cross border and utilize this experience abroad and therefore use economies of scale also in other European market.

All these, I would say, parts of digital transaction management are very new markets that where we are by far ahead of the curve. Let me also spend some time talking about the we named this slide from the basics to be spoken. Extremely important because today, Infocerat is the only probably fully integrated international player that we have at a pan European level comparing ourselves with big and large U. S. Corporates.

That means spanning from essentials, certified email, e signature, digital ID, you name it, all the way to bespoke, right? The walk of services and the breadth and the sheer size of them are all tailored depending on the market, depending on the client. And you can see some of the most important blockbusters that we have here. The onboarding platform, Top and Gosign, I think need no presentation. Infochett is a key player, represents also a consolidator at a European level.

Obviously, you can see where the geographies are. We always said that Italy is with Infocyte the number one and largest player that we have out there. But there are other operators out there. There are operators in all those geographies that you see, The Nordics, Spain, Germany. So there’s also another large player in Italy as everybody knows.

But, you know, eForget has a couple of, I think, peculiar aspects that none of them have, such as the depth and size of the product offering, the adaptability and also the, I would say, the flexibility of the technology and the reliability of the technology, it can count on a very stable shareholding structure, and that, as you know, is obviously in the hands of T Nexstar. And together with the Vizzura have done a tremendous job and for that matter, Odone already had pointed it out, I think it’s worthwhile talking about some of the strategic directives that Vizzura has had, in particular with the introduction and the investment that we’re making in generative NII. Together with Andrea from Wizzura, we discussed what we can say today and this project is very interesting. It’s named the Lexel AI. It talks about utilizing and leveraging legal databases to help legal firms, legal offices or legal councils in the research of data using artificial intelligence that can be very helpful in terms of efficiency, in terms of also of time.

No. Pressure and delivery. The project has three phases, presentation that we’re actually doing as we speak and has been very busy in doing that, presenting to different National Council of Lawyers. There’s a second phase, which is usually early adopters, 150, two hundred customers as a pivot plan. And then obviously, there will be the go to market and all the advertising that we will do.

So great job, and we hope that there will be a strong opening of a new market, which is great revenues and great margins. Going forward, let me wrap up Digital Trust with this last slide, taking integrated leadership to the next level, four major pillars, build on new revenue streams, fight digital trust commoditization, which is I think the pivotal aspect of going to the next level, expanding the market and gaining efficiency. I will just touch upon the most important ones here. We’re obviously, concentrating on the digital identity wallet. I mean, that is the big game changer and it is a great opportunity for infrastructure and for all of the Digital Trust business division.

Utilizing generative AI also on existing product offering is another element that can help in building up new revenues and obviously working on at a European level to leverage as we said our experience that we have back home in other European countries. Five commodity commoditization means also utilizing e signature in the document lifestyle management cycle, utilizing also certified messaging within international markets. So the so called go notice, very important. That means expanding what is our bread and butter in Italy also in other jurisdictions, expand the market, right? That it’s all about that.

It means increased geographical coverage. I think I need not say more on that. There’s always time and there’s always the opportunity to gain efficiency. As you all recall, we entered into a very important deal with Asshertia and I think that the use of the so called software factories offshore back both in Pakistan and in Tunisia will help on reducing costs in terms of program development, but also creating economies of scale. Moving forward, cybersecurity.

In terms of cybersecurity, there’s a lot of news there. We complemented the offer with the acquisition of Defense Tech, which everybody knows is a strategic asset. It is part of the national perimeter on cybersecurity. It is a handful of companies, so a very exquisite asset. Today, we are able to complement the offer.

That means the traditional Kineticsa cyber offer, which stems on four major pillars advisory, product implementation services, managed security services, mostly geared towards the commercial and private sectors. While on the other side, we have a defense tech, which is operating mostly and entirely into the public administration and those areas that you see on the bottom. A lot of fuss is all about defense, space, transport and finance. Market is still very strong growing with the numbers that you see there, high single, low double digit. I think as Pirandrian mentioned today, there is a very important element that we need to highlight, which are regulatory tailwinds, right?

The introduction of NIS2, NIS2, is a very great opportunity. On the bottom part of this slide, we’re showing you who the top spenders are. At a corporate level, you have large corporates ranging from finance or financial institutions to telcos, manufacturing, retail and the mid corporate. Aside from that, we were pairing defense tech concentration on the public administration sector. Going forward, we said that there is a complete value proposition now more than before.

So our potential is that of going and expanding into mid corporate and industrial and public administration. But I would like to concentrate on the bottom side of the slide. I mean, the market is asking us what are the synergies, right? What are the synergies between DefenseTech and Tinexta? We highlighted four major areas of corporate product, data intelligence, access to the PA and synergies with the digital trust.

You can see, who’s doing what, what the contributions are coming from. And I think that there will be a lot to come our way and there are a lot of tables to conjunctually put together between DefenseTech and Tinexta, and we’re working very actively in creating moving forward these synergies. As I said, regulatory tailwinds are an opportunity. I know this is a very busy slide. I’ll concentrate on only on some key aspects.

The key aspects are that as of January of twenty twenty five, NIS2 requires companies, to adopt and implement cybersecurity strategy. That’s the news. The critical areas are the ones that you see at the center of the slide. Cyber attacks are increasing every day. The market is very fragmented.

There is low level of awareness and there are inconsistent level of resiliency. The areas are on the far left. You can see that they range from energy transport space all over, but the critical focus areas that NIS2 will need to cover are the ones on the right. So you’re looking at governance, risk management, incident management, business continuity, third parties, vulnerability and technical measures. So all these are covered today by Tenexus Cyber and we are actively reaching out as well as being reactive with our clients that are coming to us to ask what kind of services can we bring them, what can we actually offer them.

And some of them are coming to us and we’re actually proactively reaching out to others. So there will be definitely a very strong tailwind from regulation. Let me conclude the cybersecurity with the strategic outlook offering and operations as well as people and governance. We are very aware that this year was a transition year, as we said. So we are focusing on improvement of the integration of the cyber services.

Now the companies have been entirely integrated, but it’s all about optimizing also the costs, both internal and third party related ones. In terms of people, they continue to be the number one asset of all business units here more than before. And we are focusing extremely hard on sales and operations department where we need to improve the efficiency there, but we are continuing on talent management as well as the training programs, which become essential for growth in terms of people. Last but not least, business innovation. So I think we have extensively talked about business innovation.

I’ll concentrate on the key takeaway. The key takeaway has a name. The name is Industry five point zero. We talked about how the Italian consultancy market is still a very strong market, at least in specific areas, for example, strategy, for example, IT. But the key element I think is the switch between Industry four point zero, which has come due and Industry five point zero.

On the bottom right, I think that’s the main focus of this slide. You can see how the deductible rates have been going down for four point zero and are instead very interesting for five point zero where they are reaching over 45% and there is a great incentive in actually moving towards those incentives. From a strategic standpoint, business innovation has acquired a lot of companies throughout the years. We have the left side of the slide shows how polarized the services have been with specialty with special subsidized finance and automatic subsidized finance taking the center stage, as you can see with the large bubbles on the left, we are moving towards an advisory centric one stop shop business model where every customer being at a private, a mid corporate or even a large client can find the service that they need. Five point zero, to go back to it, is the enabler.

Industry five point zero becomes the enabler. I think the market wants to hear some numbers here and the numbers are very exciting. We talked about the deductible rates, which are an incentive by far, 45% historical high. The second most important is the limit of the smaller investments, which has been raised from 2,500,000.0 now to 10,000,000. So all the investments up to 10,000,000 fall into deduct deductible rate of 45%.

That’s a great accomplishment. The extension of the deadline, another important element, given the delay that we witnessed in ’twenty four is now the deadline is April of twenty twenty six. And then the allocated amounts are very attractive, 6,300,000,000.0 of which only 300 have been serviced. So there is a huge opportunity. And on the bottom, as you can see, the enabling factors are the four major areas production efficiency, investments in renewable energy, upgrading skills, as well as fiscal investments.

Let me close the BUs with the last strategic outlook slide. Three major priorities here in business innovation, unified group strategy, product offer innovation, people in sales. We’re working very strongly on the full integration and a unique value proposition. We want to leverage our European cross border presence to work all around Europe and utilize study centers in specific areas. And then I’ll obviously concentrate also on the products that can be concentrated on mid corporate, but also expanded on the large corps.

Let me leave the word now to, to Pirandrea, which we’ll go over very shortly on the last strategy pillars.

Pirandrea Chevalar, Chief Executive Officer, Tenexta Group: Yes, just a few words. Thank you, Josef, for your analysis of our business unit was, I think, very, very interesting. I would like to take the stage again to discuss some pillars of our strategy going forward at the qualitative level, reiterate what our priorities will be in this phase of our group history. Just really a few words. First of all, I would say that we are moving from a phase of expansion by M and A, which attracts the AIs the past few years, especially at an international level towards a phase of integration.

Our focus in this year, in the current year will be on solidifying a unified value proposition and strategy under the direction of the parent company across all the three business units, consolidating our positioning as a leader both in Italy and in foreign markets with the ambition to become an aggregator in the SCT space. Our goal is to address the needs of a wide range of companies and different business sectors in the ever evolving digital space, shifting toward an advisory centric business framework, leveraging on synergies across companies, division and business verticals. Lastly, but not for importance, our strategy will always be motivated by a strong focus on employee welfare and the positive impact on the environment and the communities we operate in. Josef?

Joseph Mastrogostino, Chief Investor Relations Officer, Tenexta Group: Last slide on the updates on ESG ’20 ’20 ’4 was a busy year. I think it’s nice to say that in all the three different divisions, we completed 100% of the activities, very strong with Digital Trust with 24 initiatives completed, Cyber with seven and Business Innovation with 19. Now I’ll wrap it up too and leave the word to Adona to give us the color on the guidance.

Donato Mercuradino, Chief Financial Officer, Tenexta Group: Okay. Thank you, Joseph. So let’s before entering into details of these figures, definitely, we put together this plan with, let’s say, a realistic approach in terms of revenue, you know, and I will walk through the different business lines in order to let you understand. This plan will be also paved with some action on costs. Definitely, trying to achieve the results only on revenue, I think, is going to be very difficult and so we put together in all the divisions, in Verdi business unit with different level of attention as here Andre and Joseph several times recalled operational efficiency.

Operational efficiency is something that is key to achieve the profitability that is into this plan. Let’s start business unit by business unit. Digital Trust, we expect the revenue growing in the range 7%, nine %. You have seen that the profitability the revenue growth of 24% or 23% on organic basis was 8.3%. So we are perfectly in line with that.

In term of EBITDA adjusted, we are not going to not continue to grow in term of profitability or EBITDA margin, but these figures includes one off, let’s say, the first year impact of the project that was mentioned before by myself and Joseph on the generative AI in this one. So this is the reason why for the first time EBITDA is not growing faster than revenue. We do believe that this outlook on this area is very solid, it’s very strong. The business unit was always able to deliver even better results. Cybersecurity here, if we look at the numbers like the YAR is a little bit astonishing, but I will walk through to let you understand what is going on here.

Obviously, these figures are incorporating the fact that defense tech has been consolidated in our books only for five months and next year will be for twelve months. Any case, as is in the bottom line, but you cannot read, so I will try to explain. So we do expect a very strong growth in term of revenue from Defense Tech is part of the plan is part of the plan for that it was supporting our acquisition. And the revenue in excess of 20% for Defense Tech is also driven by the change of mix. So the change of mix that we are expecting that already happened in the first part of the year, that there’s a higher component of products.

The lower component of services is driving higher revenue growth, but still very enjoyable 15% growth in term of profitability. So this is the first part. The second part is on cybersecurity, the former cybersecurity business. We all know that our business is a combination of more traditional, let’s say, IT and systems tech digital solution, like put in this way, where we put together a plan in term of revenue to be mainly flat, but trying to recover in term of profitability and efficiency. This is the first part.

On the pure cybersecurity business, we plan to grow in the range of 10%, twelve %. This is absolutely coherent with the expectation of the market of the pure cybersecurity. But also here, we have to put together also a little bit of more efficient operations to achieve the results we have here. The company already started before the end of twenty twenty four to put together this efficiency. And just to give you an idea, we are entering the new year with the lower recurring cost base.

So this definitely will help to achieve the results. Let’s move now to the business innovation. The business innovation for us is, you know, we have now is the part where we have several businesses here. But as I put here together, the difference is going to be made and the plan is on top of the regular growth of some businesses. I talk about digital innovation.

I talk about other businesses we have here, the internal rationalization, the activity we have in Spain. The real key driver of the results is the five point zero. If we are able we have been very clear here to the financial community. If we are able to deliver that margin, we will achieve the plan. If we are not able to achieve this, it’s not.

We know exactly how many orders we have to get it. As of today, the backlog is 50% of what we should deliver. And on a weekly basis, we are updating this backlog and we are confident to achieve this at the current status. So this is the main driver for the rest. I think if we do operate aligned what we have done in other businesses than the five point zero, we do believe that this plan is going to be achieved.

ABF is a key point of our plan where we discussed a lot with Geir Andreea on this subject. It’s very clear, we have volatility here. It’s a volatility driven by the environment, by the political environment. Definitely, now there is a stable government since a few weeks or more months or weeks, but still the, the level of success rate of the dossier filed. And I would add also the timing to get the answer is still not at the state of the art.

In our plan, we incorporated a difficult situation till June, July and a normalization of the situation after the potential election that could occur in France. The election could not occur one year before the last ones. So expecting that we are going towards a little bit more normal situation, we incorporated in our numbers these results. The result calls for, let’s say, quite important recovery in term of revenue. We do expect to recover $8,000,000, 9 million dollars revenue compared to the previous year.

40 of them should come for what we have not able to deliver by the end of the year and then the profitability should come because costs are there and then if the dossier comes with the SSS rate, this is the result. So it’s very clear what we have to do. As Pierre Andreea said, you know, the lesson was learned from the previous year. It’s very clear to us. We have to be able to combine revenue growth and cost efficiency.

If not, you know, it’s going to be difficult to achieve the results. But we have the position on the marketing, we have the assets, we have the capabilities and so we strongly believe that the guidance we are sharing with you today is going to be delivered under the circumstances that we have shared. To complete the big mix of what I explained before. This is the guidance. So it’s a guidance that still on revenue is expecting a quite interesting organic growth in the range of 7%, nine % with a little bit of acceleration.

Definitely, what we have missed in 2024 on the five point zero and the huge impact on profitability of the results. What should come is impacting in a favorable way the result. Net financial position on EBITDA is expected to go down to in the range of 2.2, two point four. Billion. It’s very easy to calculate this if you add that we are going to have more EUR 10,000,000 in reduction of CapEx and EUR 10,000,000 or lower tax paid.

So $20,000,000 are coming from there and then the increase of EBITDA at this level is helping will help us to deliver this target, including the distribution of around EUR 40,000,000 of dividends. That means a 55% payout ratio that is a quite significant increase compared to the previous year.

Joseph Mastrogostino, Chief Investor Relations Officer, Tenexta Group: Great. Closing remarks, very quickly focused on recovery. We said that extensively. Integrating recently acquired companies, come pan European ICT leader and nurturing a one group identity. I’ll close it there and leave the floor to Q and A.

We also have our business unit heads as you can see from the pictures, so you know who’s speaking, who’s who. And I’ll leave it to you guys for some questions.

Chandra Sridhar Mann, Analyst, Stifel: Hi. Thanks for the presentations. This is Chandra Sridhar Mann from Stifel. Maybe a couple of questions. To start with, your 2025 guidance looks for a significant jump in organic growth.

Just wanted to pick your brains in terms of your conservatism there. You mentioned a 50% coverage in terms of backlog already. Maybe, how was it last year? How was it a couple of years ago? Giving a sense of that would be helpful.

And related to that, on the cybersecurity side of things, there was a significant slowdown in summer and things have not really picked up. What are we missing here? The macro seems to be okay, at least on the cyber side of things. Maybe some more color on that. What are the key catalysts you’re looking for recovery?

That would be very helpful. 25 results.

Donato Mercuradino, Chief Financial Officer, Tenexta Group: In terms of revenue, of organic growth, Like we said, it’s really solid on digital trust. On the cybersecurity, I explained the nature of the two areas, what is going on the former activity we had and then with the addition of Defense Tech that it expected. And now I’m sharing with what I shared today with Emilio that the backlog is in excess of 40% growth at the beginning of the year compared to the previous year. So the plan on the area of the first tech is very solid, was already expected at the moment. So it was already predicted at the moment of the acquisition, but we entered the new year with 40% more backlog than the past.

So this is the situation. On the area of business innovation is very clear. If you are able to deliver the margin that was built up by Infochare management, the revenue is good. So basically, we had the lack of important business in 2024 and we have the business in 2025. So this is the driver of the jump that we are doing.

Obviously, like I said, there is the expectation of a jump of €10,000,000 revenue on ABF that is the area where we have some volatility there, but not driven by us. But this is the expectation of, like I said, an environment where for six months, it’s going to be tough and for six months, we do expect to improve.

Pirandrea Chevalar, Chief Executive Officer, Tenexta Group: Alberto Domingo, any other question?

Alexandra Sova, Analyst, Equita: Hi, Alexandra Sova from Equita. Thank you for taking my questions. Three on my end. The first one, maybe a follow-up on the guidance. So maybe a little bit of color of, so we will already see this acceleration in the first quarter is a question also considering the fact that the transition of five point zero, of course, was amended with the budget law.

But since a lot of incentives were, I mean, foregone incentives coming from last year, so if they will already, let’s say, have an effect on your first quarter? The second one is maybe more on the midterm on the Business Innovation division. Since as you mentioned, the transition five point zero will end up in April 2026 and is based on European funds, so the recovery fund. And the transition four point zero, the other pillar is declining in terms of total volume. So what next?

What do you why do you believe this business unit could grow in Italy and also, of course, outside Italy? And the third one is maybe a curiosity since defense tech is also partially exposed to the defense sector. So if you already see or do expect some acceleration also from the defense part apart from the pure cybersecurity business? Thank you.

Donato Mercuradino, Chief Financial Officer, Tenexta Group: I pick up the first one. Like I said, like you know, you know that what is coming from the five point zero is related to investments. So investments in the period of the year. So as most of the business of business innovation is expected to be. The orders, we already collected 50% of the order we need to.

We will continue to collect, but the revenue expected to come later in a year, this for sure.

Defense Tech Representative, Defense Tech: Okay. Hello, Alexander. The defense market grow because the the strategy of defense tech is combine the market. The market grow because tour. The market grow because the Italian government decided to upgrade our budget in Italy.

The the response of this budget, the the most important program is the GCAP. The GCAP is Italian and USA and The UK and the Japanese fighter. This legacy market for defense tech, in the past, do you remember, this market is flat. But in the future, this market have a lot of question. How many budget in the Europe, European countries want to upgrade this year, the next year?

In our plan, we would like increase our plan in 10% of revenues. It’s a prudential, yes, but I believe that in the future, when the European budgeting is clear, it’s possible to upgrade our budget. Today is 10%. Another discussion is the space. The space have a different market.

The Italian space economy have the PNRR for the future, and our growth is about 20%. But this increase is only for European growth or European market because the Italian market of the space is only the space economy. It’s different. It’s not space for government. And for space economy, the minute have the governance.

Our minister have have the governance. I think this is the the question. Thank you.

Donato Mercuradino, Chief Financial Officer, Tenexta Group: Yes. Thank you for your question. It’s a very good question, and we had a lot of discussion during the preparation of the plan. There is a slide that was showed before that when we were talking about business innovation, we talked about acquisition of Studio Fieski, a war on funding project. Well, what we are doing here is try to exploit other businesses very close to the traditional finance and grant businesses that may help us to continue to grow even though this part of business as of the current regulation is expected to be.

We invested three years ago in the digital innovation and this part is going up from 17,000,000. Next year is going to be 23,000,000, 20 4 million, and we expect it to grow at a very interesting pace. We have internally a division that is working on, let’s say, ESG, sustainability, energy and education that is expected we reinforce also with management that is expected to grow also here even at a faster pace. Obviously, we acquired basically, we put together a new company that is a World RAM funding project that is working on LaFinance Avelutativa that is going to help a lot to grow also here. On top, we do expect the ABF continue to grow.

So it’s clear that it’s going to be if the rules are going to stay like it is, it’s going to be reshuffle in term of weight of the different parts of business, but still we are working sincere to address the point that sooner or later we expect very late, but sooner or later we can. Also on this, we are already working now in order to recover efficiency as much as is possible in order to be able to lend, to have a soft landing in case this is going to happen. So we got the point. We know we are on the subject, but it’s something that when it comes, we will be very ready on this.

Joseph Mastrogostino, Chief Investor Relations Officer, Tenexta Group: I think we have a question from the audience. If you can open up the line from just a second. No, no. Question is coming from I’m talking to the La Regias et Popri Real Audio. Hi.

Russell?

Russell, Analyst: Hello, Joseph. Can you hear me?

Joseph Mastrogostino, Chief Investor Relations Officer, Tenexta Group: Yes. We can hear you. Go ahead.

Russell, Analyst: Great. Thank you. I have three questions. First of all, on it’s not with respect to ABF. On Slide 15, you talk about the 2025 action plan.

Just to be clear, is that something you are actually in the process of doing or that’s actually happened in terms of the looking at the order book customer base? And I guess my question is, you’re guiding to revenue on that business now of about 29,000,000 versus the 30 in twenty twenty three. So what is actually happening? Are you effectively looking at the proposals, the applications there and actually just trimming them down to say some are likely to be more successful and others are not. Is it effectively trying to have a greater success rate of fewer fewer applications?

My second question then is just generally in the outlook you talked about limited M and A and obviously the balance sheet is a bit higher, the net debt to EBITDA is higher than it was. Just your general feelings on that and valuations in the market. Is it a bad year to be able to do much M and A given lots that seems to be also great opportunities out there? And my third question on digital trust is, if you go back to this time last year, I think you were forecasting 10% to 12% growth for the next three years. You’ve done 8% in 2024 and now you’re guiding to 7% to 9% for 2026.

So it looks there’s just a bit more caution there. I’d be interested in your views on that, please. Thank you.

Donato Mercuradino, Chief Financial Officer, Tenexta Group: I start from the ABF question. The company in 2024 and in 2023 had a success rate of in excess of seventy percent. Driven by the situation, the success rate was forty four percent. We put together a plan where, like I said, expecting a better political situation in the second part of the year that is the most important. Overall, we are expecting a SaaS rate to grow, but not to exceed 50%.

So basically, we expect based on some actions that the management had put in place to enlarge the coverage of the market and the client and to increase the number of dossier to be filed. Also, we are expecting to grow in some other part of business that are, let’s say, as of today, less relevant. And talking to some other businesses that are within ABF, so this is part of the drivers of the growth. Like I said before, there are at least couple of million in the range of $2,000,000, 3 million dollars EBITDA that shifted from 24,000,000 to 25,000,000. So on a comparable basis, the growth is a little bit lower.

Definitely, here, we try to have a much more prudent approach. The plan of the management has been, I would say, even more aggressive, the plan that we are sharing today with you, and we are following me on a daily basis, calling what is the revenue today, yesterday, tomorrow, and something like that. And this is the situation. Like I said, the basics of the achievement of the plan are there, the volatility is higher, and the other businesses. In term of digital trust, I would say there have not been too much cautious, and Danilo can explain much better than me that they continue to deliver 10% growth is difficult, but we have this one off cost that is coming from the launch of Genetrio AI.

I leave to Danilo to explain a little bit on the growth of the business.

Danilo, Digital Trust Representative, Tenexta Group: Good afternoon and thanks for the questions. We are in a likely segment of the market. And to be honest, we are, if you want, taking advantage of some investment we made five or even eight year ago. In this moment, just to mention one number, we are serving over 200 banks in Europe and growing. We have more than 20 international patents and growing.

So, as we have seen in the slides presented by Joseph, size matters. In this moment, finger crossed, we are really shortly saw some significant tender all over Europe. And our brand to date is, let’s say, quite well associated with the digital transformation. So definitely for ’25, but I’m really optimistic even for the future. This double digit growth that we have seen has been more or less always been achieved is our reach.

Joseph Mastrogostino, Chief Investor Relations Officer, Tenexta Group: Thank you, Danilo. I think there was another question from Russell regarding M and A. As Pirandrea was mentioning, this year was mostly about integration. So we are concentrating on that. We have done a lot of deals.

We did Defense Tech deal. We did the ABF deal during 2024. So I think it’s then August as well. So we did a lot. So this would be a year where we’re going to concentrate on making the money work at this point.

And obviously, if there’s any opportunities out there, we’re constantly looking at the market and we’ll decide on a basis by basis basis. Any questions further from, yes, from the audience? Chandra?

Chandra Sridhar Mann, Analyst, Stifel: Sorry, maybe just a follow-up on margins. You’re trying to re question your BI’s business away from subsidized financing towards advisory. So should we assume that the margins of last few years is very much behind us and there’s a new reset of margin expectations going forward. And on a related note, Digital Trust, I understand that you’re investing on Genenti this year. What are the medium term margin expectations for Digital Trust?

Donato Mercuradino, Chief Financial Officer, Tenexta Group: Margin expectation for Digital Trust in 2025 are expected to be aligned with the peak, historical peak. I’m trying to say what Josef is saying. So we are going to keep the historical peak, but I know that Danilo is working very hard on the subject. So on this, to be honest, we do. I think that trying to keep that level of margin also because it’s combined with a very high level of cash conversion is very important to us.

If we are talking about the margin on business innovation, for sure, what’s happened in terms of margin in the past driven by the mix, it’s difficult to keep in term of EBITDA margin. In term of absolute value, we are enlarging our offer adding some other businesses. So we do expect in absolute term, at least for 2026, not to be impacted. And in 2027, let’s say, we do expect that the continued growth of other businesses will help us to continue to grow. But again, driven by the volatility of this market and what is going on, This is the strategy.

It’s very clear. We enlarge our offer. We will continue to enlarge the offer, and the feedback from the market are definitely positive.

Joseph Mastrogostino, Chief Investor Relations Officer, Tenexta Group: Do you have any other questions? Yes, Andrea. So, Pirandera stepped away because he had another meeting. So, we’ll see Pirandera later. Thank you, Pirandera.

Andrea, Analyst: Okay. Very quickly, overall on the group, in particular on business innovation, we know that you are now very back end in term of profitability in the last quarter. Will this year be more or less the same or even be less, a little bit more? And as far as business innovation is concerned, the comparison basis in this year, first quarter, second quarter will be very favorable. Should we see some sign of recovery, although these are not important quarters?

Donato Mercuradino, Chief Financial Officer, Tenexta Group: But what you see last year it has been a week.

Andrea, Analyst: So we are you got advantage of having a yearly comparable basis. You already anticipated first half is not going to be exciting, but we will see anyway some improvement compared to last year.

Donato Mercuradino, Chief Financial Officer, Tenexta Group: In Italy, the five point zero is not changing the picture in Q1. That’s for sure. In ABF, it should be better, should be better. But again, like Joseph showed to you, is a business where we have solid foundation for achieving the plan, but still, you know, the most part of the profit is coming from the second half of the year. And again, Andrea, as we are talking about small man numbers, if I am going to deliver 4,000,000 or 5,000,000, I can tell you I’m growing 25%.

But at the end of the day, it’s still 1,000,000, maybe eight, out of 60 that I have to deliver. So obviously, it’s very important to start well. They know frequently we are speaking every week on the results of the company, but, again, we have our plan. We have our action. I’m more focused on the action.

If we are delivering the action on costs that we are going to do, the revenue that we put in the plan, excluding the ABF, should be very strong. That that that’s the point. And you know us since many years, definitely the growth rate here, despite of the additional Defentech, it is boosting significantly is definitely the most prudent that you have seen since ever. And I feel that it’s not most prudent, most realistic, I would say.

Joseph Mastrogostino, Chief Investor Relations Officer, Tenexta Group: Maybe to add one comment on five point zero since you asked. Five point zero is a great opportunity, but it takes time to put it on to actually carry forward the activities. So we’re very busy already in proactively reaching out to clients, reaching and clients reaching out to us, identifying the need and then bringing the filing on board, But it will take time. So it’s not something that will be on off, but it’s more spread out during the year. Any other questions from the audience?

Well, there are no more. Thank you very much. There are refreshments, so you can use the refreshment part. And thank you for coming.

Donato Mercuradino, Chief Financial Officer, Tenexta Group: Thank you. Bye.

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