ITWAY: The BoD of Itway Group approves the Financial Statements for the year ended 31 December 2022

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The Board of Directors of the Itway Group approves the Financial Statements for the year ended 31 December 2022

ITWAY GROUP:

REVENUES UP TO 46.7 MILLION EUROS (+7%)

INCOME MARGINS SLIGHTLY DECREASED DUE TO AN EXTRAORDINARY PROVISION FOR BAD DEBTS AND THE DISPOSAL OF SOME EQUITY INVESTMENTS FOR EURO 1,831 THOUSAND

SALE OF THE SUBSIDIARY BE INNOVA S.r.l.  WITH NET SPOT COLLECTION FOR +2,415 THOUSAND EUROS

GROUP’S NET FINANCIAL POSITION CLEARLY IMPROVED

WHICH GOES FROM 314 THOUSAND EUROS  TO 1,317 THOUSAND EUROS (CASH)

INVESTMENTS IN R&D FOR 1,300 THOUSAND EUROS (937 THOUSAND EUROS IN 2021)

NEW ENTRIES IN THE PARENT COMPANY OF PEOPLE WITH KEY ROLES AT A STRATEGIC LEVEL FUNCTIONAL TO THE ACHIEVEMENT OF THE 2023/26 BUSINESS PLAN

THE COMPANY HAS NO EXPOSURE TO RUSSIAN, BELARUSIAN OR UKRAINIAN MARKETS

Ravenna, 31 March 2023 – The Board of Directors of Itway SpA – the  parent company operating in the IT, Cyber Security, AI and Big Data sector, listed on the Euronext Milan market   – met today under the chairmanship of G. Andrea Farina to approve the Financial Statements at 31 December 2022.  

thousands of Euro	31/12/2022	31/12/2021
Revenues	46,695	43,656
EBITDA	2,195	2,607
EBIT	1,546	1,964
Pre-tax result	(362)	2,010
Net result	(348)	1,303

In 2022, Group revenues increased (Y/Y) in volume terms by approximately 7%, while EBITDA amounted to Euro 2,195 thousand (Euro 2,607 thousand in 2021). The result wasimpacted  by an extraordinary provision to the provision for bad debts of Euro 1,600 thousand  and other operating income of Euro 1,300 thousand relating to the closure of debt positions no longer due.

As a result, the operating result (EBIT) also decreased from Euro 1,964 thousand to Euro 1,546 thousand, while the Net Result fell from Euro 1,303 thousand to Euro -348 thousand. Thelatter is affected for Euro 1,831 thousand by the disposal of three shareholdings: Itway Iberica S. L., Inebula S.r.l.  and BE Innova S.r.l.

In 2022, the Group continued to invest by adding the people with the best skills to the growth objectives set out in the 2023-2026 Business Plan.  In December, two strategic executives joined:Mr. Massimo Fanelli, well known  in the Italian ICT market and with deep knowledge of the Cyber segment,  to cover the role of Deputy General Manager and Dr. Angelo Salice, known as a great expert in the Cyber Security market who went to lead, as Director, the Cyber Security & Infrastructure Business Unit.

In 2022, the activities started in previous years continued, in the development of innovative products in a significant way and this, combined with investments in personnel with high technical skills and the opening of the office in the USA, is allowing the Group to expand its presence on the market through products and services owned by Itway.

ANDAMENTO DEI SETTORI: CYBER SECURITY PRODUCTS (VAD + PS)

Through the Cyber Security Products VAD + PS sector, the Group operates in Greece and Turkey, as Value Added Distributor with Project Services associates, in the sale of specialized Cyber Security products (software and hardware), certification services on distributed software technologies and assistance and technical design services, pre and post sales services.

The main economic indicators of this sector are presented below, compared with the values of the previous year:

thousands of Euro	31/12/2022	31/12/2021
Revenues	40,792	38,896
EBITDA	2,797	2,218
EBIT	2,700	2,112
Pre-tax result	2,732	2,881
Net result	2,291	2,376

The analysis by country is broken down below:

Itway Turkey is experiencing a particularly complex economic phase due to the strong devaluation in progress, the economic and monetary policies not always effective put in place by the central government and the situation created downstream of the terrible seismic event of recent months. Despite these objective difficulties that have affected the purchasing capacity of both private and public companies, the results for the year indicate a good ability to hold revenues, in a complex context, with an increase in turnover equal to +62% in local currency compared to 2021.

Itway Hellas, the Greek subsidiary, recorded a growth in terms of turnover of 17.5%, increasing its market share. The Company, specialized in Cyber Security, continues to grow in a market, the Greek one, which is progressively emerging from a tense and delicate economic situation and is showing important signs of vitality, especially in the PA and Public Education sector as well as in the banking sector where we count our best customers.

SEGMENT PERFORMANCE: PARENT COMPANY ACTIVITIES AND OTHER SEGMENTS IN SCALE-UP

The parent company Itway S.p.A is  an operating holding company and is divided into two business segments: Corporate and Operating. 

Corporate Sector:

• carries out Group  management activities; he deals with administrative and financial management, organization, strategic planning and operational control, budget process, human resources management, general affairs, corporate information systems, legal and extraordinary finance operations of Group companies. In summary, the Corporate sector deals with the strategic governance and financial management and human capital of the Group.

Operating Sector:

• Sono operative due Business Unit nella holding: Cyber Security e Cyber Safety.
  • Cyber Security: deals with consulting, design, system integration; in short, IT Services in the field of Cyber Security, in particular on Cyber Risk Management and GDPR;
  • Cyber Safety: with the patented and proprietary product ICOY ™ ® operates in the occupational safety market in the so-called EH&S (Envirorment, Health & Safety) segment. This Business Unit, the subject of important investments in an extremely innovative product, is in an advanced stage of Start-up.

Other sectors in Scale-up:

• 4Science S.p.A. : specialized in Data Science and Data Management services and solutions for the digital repository market of scientific research, cultural heritage and Big Data. 4 Science is in the Scale-up phase.

Below is a brief comment on what has been achieved with the companies Itway and 4Science:

In Itway S.p.A., the  activities of the two Business Units, Cyber security and Cyber safety, continued with the ICOY® product. As previously commented, there was the entry of new technical and commercial staff, especially in the last part of the year, and the pipeline of opportunities is growing strongly.

In the Cyber  Security Business Unit,  a new product line called “Itway Security 360 ™” has been created, which responds to the problems of the new defined market of Cyber Risk Management, whose activities are carried out by the parent company taking advantage of the partnership with the company BE Innova. Managed security services (MSPs) h24x365gg have been further expanded. , through greater segmentation, supporting the services offered to medium-large companies with a family of services designed and specialized for SMEs, competitive in price and simple in their sale and installation. Important agreements for the resale of advanced products and services have also been defined. As for the company Be Innova, in February an agreement was reached with the shareholder SEAC for the sale of our 50% stake to the same; in  this way the company Be Innova becomes a 100% subsidiary of SEAC while maintaining a strong technical-commercial partnership agreement with Itway for the resale of NOC / SOC services in white label Itway SOC.

A massive Direct Marketing activity aimed at companies in the metalworking and steel sectors has also begun: the feedback received from the market denotes a growing and concrete interest that we believe will soon materialize in a growing demand for the adoption of the ICOY product by those companies operating in manufacturing, metallurgy, oil & gas, transport & logistics that have significantly increased the sensitivity towards the safety at work of their workers.

4Science S.p.A. is on the market as a reference point in the field of Research & Data Management Systems, a segment that is part of the vast Big Data market, offering its customers Digital Repositories solutions for the management and preservation of digital heritage, whether it is related to the world of universities for the dissemination of scientific research,  be it related to Cultural Heritage and archival heritage, the so-called Digital Libraries. The Value Proposition of 4Science solutions is therefore always modulated, thanks to these solutions, on the increase of the prestige, impact and visibility of the cultural and research heritage from which the adopting institutions benefit.

There are two main market sectors to which 4Science is addressed: the CRIS (Current Research Information Systems) market  composed of universities and higher education institutions, international organizations and IRCCS, and that of GLAM solutions (Galleries Libraries Archive Museums) composed of Libraries, Conservatories, Archives and Museums.

As far as the GLAM market is concerned, the company has acquired new customers, including the  University of the S tudi della Campania Vanvitelli, the University of Macerata, Salerno and Foggia, all universities with prestigious and ancient libraries that have thus been able to enhance the management, conservation and dematerialized exploration of their artistic heritage.

On 5 July 2022, the shareholders’ meeting of 4Science S.p.A. resolved to transform the company from S.r.l. into S.p.A. at the same time deliberating a free capital increase to 50 thousand euros with the allocation of 40 thousand euros forming part of the ‘Future capital increase reserves’.

Also on July 5, 2022, the certificate of incorporation (incorporation) of the company 4Science USA Corporation in the state of Delaware, 100% controlled by 4Science S.p.A., was filed, as established by the ordinary shareholders’ meeting of the sole shareholder Itway S.p.A. held on June 30, 2022.

The subscription of a capital increase of 4Science S.p.A. was also completed on 8 August.  reserved for professional and institutional investors with the collection of 2.8 million euros. The resources will be allocated to finance the 2022-2026 business plan, to meet both working capital needs and internal and external growth. Following the completion of the aforementioned equity transaction, Itway S.p.A. holds a stake in 4Science S.p.A. equal to 71.43% of the share capital.  The conclusion of this capital market operation was the listing on the MTF Direct Market at Wiener Borsa at a value of 4 euros per share and a capitalization of 28 million euros.

CONSOLIDATED NET FINANCIAL POSITION (NFP)

Below is a breakdown of the Group’s Net Financial Position:

thousands of Euro	31/12/2022	31/12/2021
Cash and equivalents	2,345	951
Financial receivables	2,110	2,250
Current financial assets	1,152	1,125
Current financial liabilities	(697)	(2,064)
Convertible bonds	(284)	(475)
Current net financial position	4,626	1,787
Non-current financial assets	–	1,598
Non-current financial liabilities	(3,309)	(3,071)
Non-current net financial position	(3,309)	(1,473)
Total net financial position	1,317	314

The Group’s net financial position at 31 December 2022 improved as a result of the capital increase of the subsidiary 4Science and following  the income during the year deriving from the issue of convertible bonds. The net financial position of the Parent Company includes a loan received from 4Science of Euro 1,807 thousand at the end of the year.

OUTLOOK FOR OPERATIONS

Itway S.p.A.

In the months that follow, the Group will continue its development activities in its reference markets, Cyber security, Data Science and Cyber Safety.  The entry of top management elements of proven value, as commented above, brings an acceleration in growth. In February 2023, another well-known professional in the ICT sector,  the ing.  Roberto Castelli, cloud and infrastructure expert and founder of Bcloud S.r.l. and three new senior account managers.

BU Cyber security & Infrastructure

To achieve these objectives we will focus on the growth of the Cyber Security Business Unit, in particular by pushing the new “Itway Security 360 ™” product line, going to propose to the market the NOC / SOC services further expanded managed security services (MSP) h24x365gg. which today represent a true excellence, promoting them also in the SME market. A first example in this direction is the definition of a resale agreement with the company Digital Pharm, specialized in the pharmacy market, and also the agreement signed with the company Publikimage, specialized in web marketing.

Important agreements for the resale of advanced products and services have also been defined, in particular it is worth mentioning the important exclusivity agreement signed with the MasterCard company that has developed innovative Cyber Risk Assessment services (RiskRecon and CyberQuant) and exclusively also with the company Zerofox (social engineering products and brand / web reputation).

The theme of Cyber security and infrastructures therefore remains the central pivot of the Itway Group’s service offer with the aim of increasingly strengthening our market shares through the expansion of the customer base and the creation of new partnerships with technology vendors that represent the state of the art in the field of Cyber Security and infrastructures.

BU Cyber safety

A separate discussion deserves the Business Unit Cyber Safety, based on our ICOY product, which suffered strong slowdowns in 2020 and 2021 mainly due to Covid-19. During 2022 we have  seen important signals from customers with whom we have concluded POCs and this gives us hope for the realization of orders.

The specialized sales team on ICOY has been extended, and a senior professional who assumes the role of Key Account Manager (KAM) is coming as operational from April 5, 2023.

BU Data Science

4Science S.p.A. opens 2023 with an important order book (+52% compared to the previous year)  and with interesting growth prospects linked above all to the international market and in particular to the US one, hoping however that, as regards the national market, there will be the overcoming of those difficulties mentioned above related to the general economic / social situation and the PNRR effect.

It is reasonable to think that in the following months the situation can improve and allow a more fluid dialogue with our PA interlocutors, whether they are universities, libraries or research institutions.

In addition, the growth in orders received during 2022, 58% higher than last year, well positions the company in this beginning of a new fiscal year.

BU Cyber security Products VAD + PS

Itway Turkey Ltd. and Itway Hellas S.A. There are no significant factors that could in any way slow down growth in 2023.

The objective remains to maintain good growth rates, among other things very important in Turkey, both in terms of revenues and profitability, in line with the Business Plan, and to confirm the strategic leadership positioning in Cyber security of Greece and Turkey.

Furthermore, with regard to the risks linked to the well-known conflict between Russia and Ukraine, it should be noted that there are no significant connections with Russia and Ukraine, and their markets; there are no cash flows directly involving the Group’s operations that are expressed or regulated by Russian and Ukrainian foreign currencies; the Group assessed the impacts linked to the potential increase in energy costs; The Group does not currently have direct relations with these countries.

RISK MANAGEMENT

The Group is exposed to financial risks arising from the global economic situation.  The Company has no exposure to the Russian, Belarusian or Ukrainian markets and does not deal in technologies and services from these markets. The Group mainly uses the Euro as its money of account and for its buying and selling activities, and to a residual extent the US Dollar and the Turkish Lira.

RESEARCH AND DEVELOPMENT ACTIVITIES

During the year, investments were made in the development of new products and services, particularly in the business units described above, totalling Euro 1.3 million (compared to Euro 937 thousand in the previous year), capitalised in intangible assets.

SIGNIFICANT EVENTS OCCURRING AFTER THE END OF THE FINANCIAL YEAR

215,135 new shares were issued in January 2023 following the request for conversion into shares for Euro 300 thousand of convertible bonds that increased the share capital to Euro 5,306,933.50.

InFebruary 2023, an agreement was signed with SEAC S.p.A. aimed at the sale of 50% of the shares held by Itway in BE Innova and the collection of a part of the receivables claimed against the latter by Itway itself. The financial statements as at 31 December 2022 shall take into account the effects of this operation.

As of the present date, 250 thousand euros were collected on 21 February 2023 and 1,860 thousand euros on 31 March 2023.

SHARES

At 31 December 2022, the Parent Company owns 203,043 treasury shares (equal to 1.9% of the share capital), for a nominal value of Euro 101,522 and a total purchase cost of the shares held in portfolio of Euro 320 thousand (equal to the amount reflected in the “Reserve for treasury shares” deducted from the shareholders’ equity for the year and consolidated). Of these, 136,400 treasury shares (equal to 1.3% of share capital) were loaned to Nice & Green SA to service the financial transaction for the issue of convertible bonds.

RELATIONSHIPS WITH RELATED PARTIES 

During 2022, the Group maintained commercial and financial relationships with related companies. These are relationships established as part of normal management activities, regulated under conditions contractually established by the parties, in line with ordinary market practices and summarized below:

thousands of Euro	Credits	Debts	Costs	Revenues
Itway S.p.A. vs Giovanni Andrea Farina & Co. S.r.l.	–	–	198	1
Itway S.p.A. vs Be Innova S.r.l.	2,360	36	130	100
Itway S.p.A. vs Fartech S.r.l.	115	166	54	107
Total	2,475	202	382	208

CORPORATE GOVERNANCE

At the same meeting, the Board of Directors approved the Annual Report on corporate governance and ownership structure pursuant to Articles. 123-bis of the TUF and 89-bis of the Issuers’ Regulations which will be made available to the public, in the manner and within the terms of the law, at the registered office, at Borsa Italiana S.p.A., on the Company’s website at www.itway.com, as well as on the authorized storage mechanism “Emarket Storage” at www.emarketstorage.com.

ORDINARY SHAREHOLDERS’ MEETING

The Ordinary Shareholders’ Meeting has been convened on first call for 15  May and on  second call for 16 May 2023 and will be called to resolve on the following agenda:

1. Presentation of the Consolidated Financial Statements of the Itway Group as at 31 December 2022 and examination and approval of the separate Financial Statements at 31 December 2022. Related and consequent resolutions.

             1.1Approval of the financial statements at 31 December 2022 and the report of the Board of Directors on operations;

             1.2Allocation of operating profit.

• Report on the remuneration and remuneration policy paid pursuant to articles 123-ter TUF and 84-quarter RE:

             2.1Binding vote on the remuneration policy for the financial year 2023 presented in the first section of the report;

             2.2Advisory vote on the second section of the report on the compensation paid in or relating to the financial year 2022.

• Appointment of the Board of Directors for the financial years 2023-2025; inherent and consequent resolutions.

3.1Determination of the number of members of the Board of Directors;

3.2Appointment of the members of the Board of Directors;

3.3Appointment of the Chairman of the Board of Directors;

             3.4Determination of the remuneration due to the members of the Board of Directors.

• Appointment of the Board of Statutory Auditors for the financial years 2023-2025; inherent and consequent resolutions.

             4.1Appointment of the three Standing Auditors and two Alternate Auditors;

             4.2Appointment of the Chairman of the Board of Statutory Auditors;

             4.3Determination of the remuneration due to the members of the Board of Statutory Auditors.

The notice of call and the documentation relating to the shareholders’ meeting will be published within the time limits and in the manner provided for by current regulations through the authorized storage mechanism eMarket-Storage accessible from the www.emarketstorage.com website, on the website of Borsa Italiana S.p.A. and on the Company’s website www. Itway.com. Pursuant to art. 106  of Legislative Decree 18/2020 last extended by Decree-Law no. 198 of 29 December 2022 converted with amendments into Law no. 14 of 24 February 2023, participation in the Shareholders’ Meeting by those entitled to vote will be permitted exclusively by granting a specific proxy to  a person designated by the Company as common representative pursuant to Article 135-undecies of Legislative Decree no. 58/1998,  withoutparticipation in physical action by the members.

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As required by paragraph 2 art. 154-bis of the T.U.F., the manager responsible for preparing the corporate accounting documents of the Itway Group, Sonia Passatempi, declares that the accounting-corporate information contained in this press release corresponds to the documentary results, books and accounting records. The data presented in this press release has not been audited.

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This press release is available at the Company’s registered office and website at www.itway.com, at the Italian Stock Exchange and at the centralized authorized storage mechanism called “Emarket Storage” managed by Spafid Connect S.p.A., and can be consulted at www.emarketstorage.com

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Founded in Ravenna on 4 July 1996 by G. Andrea Farina, Itway SpA is the head of a Group that operates in the IT sector for the design, production and distribution of technologies and solutions in the cybersecurity sector , artificial intelligence (AI) cloud computing and big data. For over 25 years, the group has been the benchmark in the field of Digital Transformation solutions and services. Since 2001 Itway has been listed on the Mercato Telematico Azionario (MTA) of the Italian Stock Exchange.

CONTACTS:

ITWAY Spa                                                             Mirella Villa Communication

Tel. 0544 288710                                                   Mirella Villa 335 7592701

investor.relation@itway.com                            mirella.villa@villacomunicazione.it

Financial statements attached