SeSa S.p.A.

Good afternoon, and thank you for attending the SeSa Group presentation. Representing the group today are Alessandro Fabbroni, Group CEO; Caterina Gori, Investor Relations and Corporate Finance M&A Manager; and myself, Stakeholder Relations and Head of Sustainability.

This morning, the Board of Directors approved the consolidated financial results as of April 30, 2025, and the new Industrial Plan for the fiscal year 2026 and 2027. The corporate presentation is available on the SeSa website and will serve as a reference throughout today's conference call.

Alessandro will begin by providing an overview of our key strategic achievements.

Good afternoon, and thank you all for joining today's call. Today, we released the Group's full year results as of April 30, '25, and SeSa closed a year of significant transformation and considerable investments, reaffirming our ability to grow even in the challenging market conditions and confirming our role as a strategic partner for the digital transformation, consulting and vertical application for businesses and organizations.

Considering the pro-forma consolidation of GreenSun in the first half, totaling revenues for EUR 83 million, the FY '25 closed with revenues equal to EUR 3.36 billion, up 4.6% year-on-year and an EBITDA of EUR 240.7 million, increasing by 0.5% compared to the previous year. In the Q4 only, revenues increased by 3.1% and EBITDA by 8.2%, confirming the positive trend observed in the second half of the year, which saw revenue growth by 7.6% and an EBITDA increase of 5.2%, reversing the moderate 2% decline experienced in the first half ending October 2024.

The FY '25 performance consolidates Group's solid growth established throughout the 2020-2024 period, during which revenues increased from EUR 1.78 billion to EUR 3.20 billion and EBITDA moved from EUR 94.5 million to EUR 239.5 million. Over the year, we increased investments in key areas driving digital transformation, such as AI, automation, digital platforms and strengthened our capabilities, closing the fiscal year with 6,500 people, up 15% year-on-year.

Growth was mainly concentrated in the high potential sectors as Business Services, Green and Software and System Integration with approximately 66% driven by M&A completed in FY '25. By segment, revenues performance was as follows: ICT Value Added Solutions reported EUR 2.075 billion, down 3.4% year-on-year with a slight recovery in the second half, up 0.3% and a 6.4% decline in the Q4, reflecting ongoing challenging market conditions and entirely organic performance.

Digital Green VAS recorded a great EUR 344 million, up 43% year-on-year, 110% in the Q4 only, driven by the consolidation of GreenSun from the beginning of the fiscal year and by the return to a double-digit organic growth in Q4 only as planned. Software and System Integration sector achieved EUR 876 million, growing 6.4%, driven by 3.5% growth in the second half and a positive 7.2% growth in Q4 only despite unfavorable market conditions with approximately 50% of the growth attributable to external leverage.

Business Services achieved EUR 154 million, up around 35% year-on-year with roughly 55% organic growth, boosted by the expansion in digital application and platforms dedicated to the financial services industry. Consolidated EBITDA reached EUR 240.7 million, up 0.5% year-on-year compared to EUR 239.5 million the previous year, supported by a solid acceleration in the second half, growing 5.2% and in particular, in the Q4 only, growing by 8.2% year-on-year and mainly driven by the strong performance of the Digital Green and Business Services sectors.

In Q4 '25 alone, EBITDA stood at EUR 64 million, up 8.2%, with a margin of 7.6%, reflecting the solid organic recovery of Digital Green and the continued acceleration of Business Services. Let me now walk you through the EBITDA performance by business sector, highlighting key dynamics and drivers across the group.

ICT VAS reported an EBITDA of EUR 90 million in FY '25, down 5.8% year-on-year and 3.5% in the second half. Q4 only show a strong recovery with a 13.9% increase year-on-year.

The EBITDA margins equals 4.3% for the full year compared to 4.4% in the previous year by reaching a positive 4.6% in the Q4 only. Digital Green VAS delivered an EBITDA of EUR 24.5 million, up 13.6% in FY by 80% in the second half and increasing by 186% in the Q4 only.

The FY margin stood at 7.1%, compared to 9% in FY '24, rising to 8.1% in Q4. This performance reflects the full year consolidation of GreenSun pro-forma in the first half and reported in the second half with organic growth of 7% in Q4 only.

System Integration and Software reporting an EBITDA of EUR 95 million, down 5% year-on-year, 7% in the second half and 6.8% in Q4 only with an EBITDA margin of 10.8% compared to around 12% year-on-year, reflecting the continued investments in skills, technologies and re-engineering process with margin stabilization expected from FY '26. Finally, Business Services recorded an EBITDA of EUR 27.3 million, up 51% year-on-year, 60% in second half, 35% in Q4 with an EBITDA margin of 18%, compared to 16% year-on-year, supported by revenue growth and customer expansion in Digital Platforms and Vertical Applications.

The adjusted consolidated EBIT amounted to EUR 185 million, declining 3.8% year-on-year with a recovery in the Q4 only showing a positive increase by 0.5%. This result include amortization of tangible and intangible assets for EUR 50 million, up 25% year-on-year and provision for EUR 5.1 million, down 21% year-on-year, driven by the high quality of accounts receivable, supported by without recourse factoring and securitization programs for a significant share of the business perimeter.

The adjusted group net results, it was EUR 96 million, down 9.9%, with the second half contributing for EUR 54 million with a 1.9% decrease year-on-year. This performance reflects the combined effect of the stabilization of net financial expenses in the full year increasing a full year basis to EUR 40 million, compared to EUR 37 million, while at the same time showing a 10.2% improving in the Q4 only, with significant improvement expected also in coming quarters.

On the other hand, foreign losses for EUR 1.4 million in Q4 as a result of the sharp appreciation Euro/USD rate in April '25 and the higher impact of minorities. The economic and financial results achieved confirm our solid financial position as of April 30, '25, the group's net cash position, excluding IFRS liabilities, stood at EUR 158 million, down from EUR 211 million as of April 30, '24, reflecting significant investments for around EUR 160 million and dividend and buy-back distribution, totaling approximately EUR 30 million.

Operating Cash Flow in the FY '25 was approximately equal to EUR 120 million, supported by a solid operational performance and effective working capital management. Credit risk mitigation tools such as factoring and securitization within the VAS segment helped maintain high credit quality, including the EUR 233 million of IFRS liabilities related to deferred payments to minority shareholders and lease obligation under IFRS 16, the reported net financial position was negative for around EUR 74 million compared to positive of EUR 2.7 million as of April 30, 2024.

Now I give the floor to Caterina to present the main resolution of the upcoming shareholders' meeting of next August 27.

Thank you, Alessandro. Based on this result, at the next shareholder meeting of August 27, we will propose to approve a dividend of EUR 1 per share, consistent with FY 2024, and in response to investors' feedback, we are significantly increasing the share buy-back program from EUR 10 million to EUR 25 million for the coming year, almost tripling it to further enhance shareholder value and demonstrate our confidence in the group growth prospects.

We believe that the increase in the buy-back plan represent a valuable opportunity for our shareholders, considering both the weak performance of the stock market over the past 12 months and the upcoming 2026, 2027 Industrial Plan, which is mainly focused on organic growth and cash generation.

Good afternoon, again, and thank you, Caterina. In recent years, we have progressively improved our ESG performance, consolidating our strong commitment to value generation in a responsible way, in line with our group purpose to create long-term sustainable value for our stakeholders, promoting innovation of companies and organizations and the well-being of people.

Also in light of the new CSRD regulations and the new ESRS standards, our ESG policies are aligned with international best practice with a strong focus on governance, environmental respect, human resources, welfare management and economic development. In fiscal year 2025, we're reporting again a strong improvement of our environmental performance.

We decreased the waste per capita, down 78% year-on-year. We increased the share of green electricity purchased from third parties, about 95%, including self-produced green energy, and we reduced electricity consumption per capita, down 5% year-on-year.

In terms of sustainability governance, we extended our quality and compliance group certifications, confirming at the same time our ESG ratings as Ecovadis Gold medal, MSCI, BBB, and Carbon Disclosure Project with a B score. In line with our ESG growth path, today, we also approved our sustainability plan for 2026, 2027, a strategic document that defines priorities, targets and specific actions to integrate sustainability in our business model, contributing at the same time to the creation of long-term value for our stakeholders.

The main ESG targets of the plan are focused on increase of the share of the renewable energy with a target of 97% in fiscal year 2027, decrease of scope 1 and 2 emissions per capita and total emissions of revenues with an expected decrease of 5% in the next 2 years and to maintain at least stable the gender mix with a threshold equal to 30%. Now I give the floor again to Alessandro.

Today, our Board of Directors has also approved the Group?' s Industrial Plan for the fiscal years ending April 30, '26 and '27.

Building on the pro-forma base of '25, the plan was developed between April and June '25 with the active involvement of all operating divisions and key people across the group by incorporating also some indications raised by our institutional shareholders. Our plan is focused on targeting strong organic growth, adopting a more selective M&A strategy by improving cash flow generation, supported by higher operating efficiency and market penetration driven by the progressive adoption of the so-called digital enablers such as AI and Automation, Digital and Vertical Platforms.

This approach will strengthen our position as a leading digital integrator and digital transformation partner of the business segment, focusing on cybersecurity, AI, automation, vertical application and digital platforms. Meanwhile, our Business Services sector will continue to expand its presence in the growing financial services market, boosted by rising demand for vertical platforms and applications.

Thanks to these initiatives, we expect around 5% revenue growth and 10% profitability increase over 2026 and 2027 full year, driven by organic expansions across all group sectors, particularly Digital Green and Business Services and a return to growth in ICT Value Added Solutions after a year of moderate decline. Our strategy also includes the simplification and re-engineering of some Group's operations and the possible disinvestment of noncore assets to streamline the Group and enhance the focus on our core business.

I give the floor to Caterina for providing some more details about the main assumptions and targets of our Industrial Plan 2026, 2027.

As Alessandro mentioned, the Industrial Plan will primarily focus on organic growth and business transformation with the following main growth targets. Following our significant investment made over the past 5-year period, we will focus on group simplification and organic growth.

With targeted M&A investments in digital enablers, re-engineering process and digital platform to boost our growth in foreign countries. A positive market outlook for digital industry with an expected average annual growth rate higher than 3% and a mid- to high single-digit growth forecast in the green photovoltaic market for corporates and organization, driven by rising energy requirements.

Revenue are expected to grow in the range of 5% to 7.5%, both in FY 2026 and 2027, targeting EUR 3.7 billion to EUR 3.9 billion in FY 2027. EBITDA is expected to grow between 5% and 10% both in FY 2026 and 2027, targeting EUR 265 million to EUR 291 million in FY 2027 with an EBITDA margin increasing from 7.2% in FY 2025 to 7.5% in FY 2027.

Group EAT adjusted is expected to increase in the range of 10% to 12.5%, both in FY 2026 and 2027, targeting EUR 116 million to EUR 121 million in FY 2027. We also expect to benefit from lower financial charges from approximately EUR 5 million to EUR 10 million per year, both in 2026 and 2027, driven by lower interest rates and cash flow generation.

We expect a moderate growth in headcount, reaching around 7,000 coworkers in 2027. By segment, we expect to see annual revenue and profitability growth between 10% and 15% in Business Services, high single-digit growth in SSI and Digital Green VAS and the recovery with low single-digit increase in ICT VAS.

We are targeting an annual operating cash flow of approximately EUR 150 million and plan to invest around EUR 80 million per year, mainly to support organic growth and the development of digital enablers such as AI, Automation and Digital Platforms. The adoption of AI and automation technologies, combined with the creation of internal competence center will be a crucial strategic driver to transform our operation and increase market penetration.

To give you a clearer picture of the opportunity, the Italian Data and AI market is currently valued at EUR 935 million in 2024 and is projected to experience substantial growth, reaching EUR 1.25 billion in 2025, up 34% year-on-year and EUR 1.7 billion in 2026, up 33% year-on-year. As a result of the action of our Industrial Plan and our strong focus on organic growth, we plan to increase our pay-out ratio, including the buy-back program to 40% for FY 2026 and 2027, up from 30% in FY 2025.

As part of this approach, we have proposed to raise our share buy-back program to EUR 25 million compared to EUR 10 million last year as detailed in the resolution submitted to the shareholder meeting. Now I give the floor back to Alessandro for the closing remarks.

So the FY '25 has been a year of deep transformation and successful completion of a phase of significant investments for our group. Looking ahead, our 2026 and '27 plan sets a clear path toward renewed profitability driven by targeted strategic actions, disciplined execution and strong focus on growing operating efficiency.

Our recent strategic investments, particularly in Digital Green and Business Services are delivering good double-digit growth, while our historical core businesses are expected to recover organic growth, both in revenues and profitability. The new M&A approach will be selective and value-driven, targeting high-impact opportunities that will improve our capabilities, generate tangible synergies and reinforce our leadership in key markets.

At the same time, we are accelerating investment in AI and Automation, digital enablers to achieve greater efficiency, scalability and market penetration. Our strategy will include following the group simplification, targeting disinvestment of noncore assets to streamline the organization and enhance focus on our core businesses.

In summary, we are entering a new phase of evolution, more focused supported by rationalized structure and better position to deliver sustainable and profitable growth, thanks to strengthened execution capabilities and clear strategic vision. With the new Industrial Plan, we are laying the foundation for a solid organic growth in 2026, 2027, targeting 5% to 7.5% annual growth in revenues, high single-digit growth in operating profit and double-digit annual increase of net profit by reinforcing our market leadership and sustainable value generation.

The positive trend of EBITDA in Q4 '25, growing by 8.2%, driven particularly by Business Services and Digital Green with a good start of Q1 2026 confirm the achievability of our plan. Considering the economic and financial progressive improvement driven by our new Industrial Plan, we will decide to improve the pay-out for our shareholders from 30% to 45% by increasing in a significant way our buy-back plan.

Above all, in face of a so great acceleration of digital evolution, and sharp adoption of AI and automation, people will remain crucial at the core of our vision, driving sustainable growth and long-term value creation. Thank you for your kind attention.

Now we open the Q&A session.

I have 2 questions. I mean, in this quarter, SeSa posted growing numbers compared to 1 year ago, but still reported numbers were a bit lower than previous indications.

Can you help us in understanding what were the business areas performing slightly below expectations and what driven the gap in the quarterly cash flow? This is the first.

The second question is forward-looking, so what are current market conditions? And how was your performance in May and June so far?

Are you on track with full year guidance?

Good afternoon, Andrea. Thank you for your call.

So first of all, we performed under the expectation in Software and System Integration because we -- in particular, in terms of EBITDA because we have a good recovery in revenues because revenues increased by around 7% in the Q4 only, but we continue to work with a low EBITDA margin compared to the previous year, and so that is one area. The other area in VAS IT, ICT because we performed well in terms of EBITDA, but not so well in terms of revenues because we have down by 5%.

In comparison with the previous quarter, Q3, when we increased higher than 10%. So the combined effect generate penalty, so a shortfall in comparison with the previous expectation.

In any case, we performed really well in the other two sectors. So Green because in the Green as planned, we recover an organic growth and also Business Services that continue to improve its marginality.

And so entering in the new fiscal year, we have a good performance in Green and good performance also in the Business Services, an expectation to perform growing low single digit in IT, ICT VAS, and to perform with a mid- to high single-digit growing revenues in System Integration. So the plan that we disclosed today don't plan any increase now in the EBITDA marginality, any significant increase in EBITDA marginality of Software and System Integration.

So just to maintain the level of marginality that we, at the end, performed in the full year 2025. So positive outlook for Q1.

A question on my end on M&A strategy and also on past M&A. So how is going on the integration of past M&A, which was one of the, let's say, main issues you were trying to, let's say, to improve over the past quarters?

And then on the future, so what do you expect in terms of M&A strategy for the coming, let's say, 12 months and over the plan period?

Thank you, Aleksandra. So it's clear that the new Industrial Plan represents a new phase for our evolution because first of all, for the first time, we are providing figures that don't include the effect of the M&A.

So we are considering just the M&A already announced as of today. And as a result, we reduced the amount of investment we plan from EUR 150 million, so that is the average of the previous 5-year period every year to around EUR 80 million.

So the reason is, first of all, our great perimeter that we developed, thanks to the strategy of M&A in the last 5-year period. So now the plan is going to focus group operation on our 4 core businesses and to target organic growth, thanks to the digital enablers adoption in each of our organic growth, organic perimeter.

And as for the integration of the previous M&A, thanks to the re-engineering process that we are performing, in particular, in the area of Software and System Integration, we will address, that's for sure, growing operating efficiency that is not included in our forecast of the business plan, in particular in the first year. And so there's an opportunity to take profit from this job that we are going to make, so we started in the previous 2, 3 quarters during FY '25.

So I see there is time for another question. I'd like to ask you about the Business Services and also the Software and System Integration, I mean, in these two segments, usually, you have a quite good visibility.

So if you can comment on what are the main projects that you are, I mean, expecting for this year. And so something that can support the guidance you have just provided more in, I mean, qualitative terms about clients and sectors, products, or something like that.

Thank you for the question. So first of all, in the Business Services, we are improving our perimeter of operation.

We are adding new major customers, not only in banking area, but also in the insurance one, and that is positive because there is an opportunity to extend our digital platform adoption and so to continue to grow. So the expectation that we included in our Group Industrial Plan is to grow around 15% in revenues and EBITDA and so to maintain the 18% EBITDA margin.

We developed a full set of digital and vertical applications for banking from treasury to wealth management up to so-called tech, so regulation application for compliance. That is an area of rising growth in that phase of evolution.

We are dealing with some of major Italian banks for improving our offering through our penetration. And so there are a full visibility of the expectation and the trend for FY '26.

In terms of Software and System Integration, two, three main areas for us will be, first of all, cybersecurity because we develop a team that is operating across Europe with a growing market penetration. There's a tremendous opportunity coming from the new framework regulation name in Italy NIS2 [indiscernible] Italian language with additional investment that will be necessary for any company and organization to be compliant and in particular, to be able to be safe in front of potential cyber risk.

Inside the cybersecurity business unit, we adopted -- we already adopted the AI technology. And as a result of this adoption, we improved a lot the quality of the work life of our people.

And also, we increased a lot our operating efficiency through a project that we call [indiscernible]. That means to adopt detecting AI and Automation capability inside our security operations center.

Other area of development, obviously, will consist of data science, AI and automation. So the mantra will be to put AI and automation everywhere.

So in any of our delivery and any of our offering towards customers, in particular, not only inside some of the most relevant vertical and digital platforms that in the Software System Integration we develop towards the main Italian district.

May I ask you to give us a detail -- we have seen a decrease in the net financial position of about EUR 50 million to EUR 70 million depends on IFRS or not. I've not understood exactly the different voices that has impacted the net financial position.

The CapEx, what has been spent for M&A, the impact of the working capital. May I ask you to give a breakdown of the different voices?

So first of all, the difference between the two relevation depends on IFRS debt, in particular, some debt towards minorities that we reported, we accounted for referring to, in particular, Business Services sector that is improving and growing really well. And so we underline the expectation of growing in terms of EBITDA of this specific sector.

So the fiscal year was a fiscal year with investment higher than expected because we closed with EUR 160 million of investment compared to around EUR 130 million of the previous year and a new target of EUR 80 million for the new fiscal year 2026. Another driver was the dividend distribution plus the buy-back that we increased, and so we reached about EUR 30 million so that combined with EUR 162 million of investment reached the amount of EUR 190 million.

We generated around EUR 120 million, EUR 125 million of cash in terms of cash from operations. And so we have a worsening of EUR 60 million to EUR 70 million in terms of net financial position reported and around EUR 50 million in terms of net financial position.

In terms of working capital manager, we had a decline because we moved from around net working capital equal to 0 to net working capital for about EUR 25 million. So we recover in comparison with the situation of October because as of October, the gap in comparison to the previous year was a gap of about EUR 100 million, more than EUR 100 million.

Now it is about EUR 50 million. So now we have clear targets to improve net financial position in the coming year and to increase our cash flow generation from EUR 120 million to EUR 150 million.

Obviously, we will benefit in the new fiscal year also from the reduction in net financial charges that improved by 10% in Q4 only, and we expect to improve in a significant way in the coming quarters.

I would just like to clarify on the EUR 80 million of investments that you are planning down from EUR 150 million, I think, in the past. How does this split into CapEx and sort of investments into M&A?

Yes. Most of this investment will be CapEx and also internal development of digital platform and vertical application with the adoption of AI, automation and so the so-called digital enablers.

We identified just EUR 30 million from M&A. And in any case, we don't reflect the potential increase from M&A in our figure in terms of 2026, 2027.

So we thank you very much for all participants. And as usual, we stay available with our team for additional information.

Thank you very much, and good afternoon.