ITWAY GROUP: IN THE FIRST HALF OF 2016 REVENUES REACHED 41 MILLION EUROS (+1.4)
Growth in both EBIT (+ 28%) and EBITDA (+21%)
In the first semester revenues rose in terms of volumes and profits also saw a solid growth.
While revenues increased from 40 million Euro in the first half of 2015 to 41 million Euros in 2016 (first half versus first half), EBITDA increased to over 1 million Euros (845 thousand at the end of June 2015) and EBIT totalled 816 thousand Euros (638 thousand Euros in the same year earlier period).
Net financial debt reached 20.4 million Euros from 19.7 million Euros at December 31, 2015 and 22.2 million Euros at June 30, 2015.
Valentino Bravi co-opted to the board as independent director
Ravenna, September 30, 2016 – The Board of Directors of Itway SpA – a company listed on the Star segment of Borsa Italiana (IT0003057624) and parent company of Group that is market leader in the planning, production and distribution of e-business solutions – met today under the chairmanship of G. Andrea Farina approved today the Financial Statements as of June 30, 2016.
This report was drafted conforming to article 154 ter (Financial Statements) of Legislative Decree 58/1998 (T.U.F. Testo Unico della Finanza) as well as Consob communication DEM/8041082 dated April 30, 2008.
Following are the main consolidated results achieved by the Itway Group at a Consolidated level in the first half of 2016, compared with those of the same period to June 30, 2015.
|Thousands of Euro||30/06/2016
|Recurring result before taxes||(115)||(281)||+59%|
|Result before taxes||(505)||(407)||-24%|
As of June 30, 2016, the Itway Group posted:
The first semester of 2016 shows an increase in revenues (+1.4%), but more importantly growth in both EBIT (+ 28%) and EBITDA (+ 21%). The result before taxes (-505 thousand Euro compared with -407 thousand Euros in the same year earlier period) was weighed down by the greater incidence of non recurring financial charges due also to the revaluation of payables and receivables in USD of the Turkish subsidiary the local currency of which in the latest year devalued significantly, by some 14%, both against the Euro and against the US dollar. As of June 30, 2016 this is a non-realized loss.
With banks still not granting funding at sustainable levels and in the amount necessary for companies, the financial charges were also influenced by the need to support clients in a contracted credit situation with payments that are ever more delayed. All this while the main vendors are not inclined to take on the burden of the systemic crisis, especially on the Italian and Iberian markets and in some cases even demand advance payments. In this situation the Group is continuing to take measures to contain payment conditions and to use more nonrecourse factoring transactions and a progressive recourse to medium-term financing transaction.
After having suffered during the Great Crisis (2008), the ICT market seems to have reached a turnaround point and forecasts from experts and research institutes paint a timidly rosier picture. According to Assinform, in 2015 the sector grew 1% (-1.4% the earlier year), with the so-called “traditional ICT component” sector steady while the “additional and innovative ICT component” sector, essentially the sector where the Itway Group operates, was more lively.
These are positive forecasts, therefore, that with the due proportions from Country to Country, are valid also for the other international markets where the Group operates.
In this macroeconomic and market context of a timid improvement, having maintained or increased market share in the recent dark years could now play in the Group’s favour, especially on international markets.
Also in the first half of 2016, the industrial policy of the Group continued to focus on higher value added business lines like the VAR SBU and the VAS SBU.
During 2015 the joint venture constituted with Libanica, Itway MENA, started developing on th markets of the United Arab Emirates, Iran and Nigeria: the first results of these growth activities are expected to be seen from the second half of the current fiscal year.
Performance by Business Segment
In the first half, the VAS SBU, the Value Added Distribution sector, the Group’s core activity, that operates in the distribution of specialized software and hardware products, certification products on the software technologies distributed, and pre- and post-sales technical assistance services, posted revenues of 29.9 million Euros compared with 31.3 million Euros in the same year earlier period. EBITDA went from 404 thousand Euros in the first semester of 2015 to 323 thousand Euros as of June 30, 2016 while EBIT in the first half of this year totalled 145 thousand Euros from 230 thousand Euros in the same period of 2015.
Volumes and profitability in the semester were weighed down by the delay to successive quarters of some orders that are expected to be booked
The first semester of 2016 posted different results depending on the Country where the Itway Group operates.
The Italian market is the most important one for the Group and, is the one where the negative impact from the “Country situation” is still ongoing posted results in line with the budget achieving improvements compared with the same period of the previous fiscal period both in terms of volumes and profitability. In the semester there was a significant increase in the security sectors where our role is ever more recognized by the market and the start-up of new product lines with higher margins.
The Turkish subsidiary Itway Turkiye Ltd. confirmed once again the development prospects of the country posting growth in the first semester. However, results are influenced by movements of the Turkish Lira in the first semester of 2016 that lost some 14% of its value compared with the same period of 2015. This prompted a significant increase in catalogue prices to the public with a resulting pressure on margins of the distribution channel. Results net of foreign exchange movements are largely in line with the previous fiscal period.
The Greek subsidiary Itway Hellas S.A. continues on its path of growth and its performance is in line with budget despite the Country’s situation that is not easy. The structure is efficient and the subsidiary ended the semester with an improvement compared with the same period a year ago both in terms of volumes and profitability.
The French subsidiary, which was restructured in the previous fiscal period, significantly reduced losses. All business lines have been closed and to date the subsidiary has a series of non-recurring costs related to the significant restructuring carried out in the past fiscal periods
The Iberian subsidiary posted a non positive performance both in terms of volumes and profitability due to various factors: a first semester that is generally weak in Spain after the growth of the previous year, the delay of some negotiations to the subsequent quarter and lastly the only partial replacement of turnover/profits of discontinued product lines starting from 2016.
The VAR strategic unit that offers services and consultancy to train and support companies in the areas of e-business, e-security, Central Access Management, Interworking and Wireless, saw revenues rise from 9.1 million Euros in the first half of 2015 to 11.1 million as of June 30, 2016 while Ebitda increased to 700 thousand Euros from 441 thousand a year ago and Ebit increased to 671 thousand Euros from 408 thousand as of June 30, 2015.
During the period, Business-e, the unit of the group responsible for the VAR SBU, started producing Cyber Security Services: a suite of software products that allows to supply to its Clients Managed Security Services (MSS).
Also, Business-e won its first three multi-year orders (3 years) from important Italian clients, two of which are companies listed on the Milan Stock Exchange. The offer pipeline is increasing and the current semester is expected to show growth and is in line with the approved budget.
In 2013, the Itway Group entered into other business areas which are related to but do not coincide with the historical ones (VAD and VAR). These sectors still do not make a relevant contribution to the consolidated results and therefore are not reported in the reporting by sector, but they are important in terms of strategy to strengthen the business segments.
The new managed sectors are:
Net Financial Position
The net financial indebtness as of June 30, 2016 totals 20.4 million Euros compared with 19.7 million as of December 31, 2015 and down from 22.2 million Euros as of June 30, 2015.
The level of indebtedness is impacted both by factors that do not directly depend on the Company (like the timing of payments) and by the degree of non recourse factoring.
On August 3, 2016 the CERVED Rating Agency S.p.a. affirmed the Company a B1.2 (solvent) rating, equivalent to BBB- from S&P and Baa3 from Moody’s. Other than what has been previously indicated, to date, there are no further significant events that took place following the end of the period.
Foreseeable evolution of operations
In a sector context that shows timid positive signs, the Itway Group aims to strengthen and increase its market share in every Country where the Group operates also thanks to the introduction of new products and a recovery in margins. Thanks to the industrial policies carried out over the years the Itway Group is today a player that has been for some time well positioned in value added markets like Security of information systems, Virtualization (VAD SBU, VAR SBU) and the new emerging Cloud Computing (VAS SBU), aiming to operate in these sectors in a role of leading player in Southern Europe
Some markets like that of Cloud Computing, show constant and interesting growth rates and the Group plans to increase its presence as a start-up player and focus on initiatives underway through the growing VAS SBU (which boasts an important offer pipeline that should translate into orders)
In the VAD SBU, negotiations are underway with a possible Partner for a partnership that would give the division significant growth prospects and the Partner a material presence in the interesting and consolidated Value market.
The VAR SBU has a Pipeline of Offers that is undergoing significant growth compared with the same period of the previous year. The new Cyber Security Services product will reap important results already from 2016.
The development of new markets of the Middle East and Africa is continuing where there is a great opportunity for the VAR SBU and the VAS SBU. The MoU signed in April with Patsa Holding after the Company took part of the Renzi Government’s Mission to Teheran, will start producing the first supply contracts in that Country.
The parent company at June 30, 2016 owned No. 962,159 own shares (equal to 12.17% of share capital) for a nominal value of 481,080 Euro and a cost of purchase booked to the financial statements of some 178 thousand Euro; During the period 123,645 own shares were purchased (equal to 1.56% of share capital) for a nominal value of 61,823 Euro, as authorized by the Shareholders meeting of Itway S.p.A.
To the date of the approval of the Half Year Financial Statements to June 30, 2016 the Parent Company had n 968,001 own shares (equal to 12.24% of share capital) for a nominal value of 484,000 Euros.
Independent board member co-opted
The Board of Directors today acknowledged the resignation of independent director Giuseppe Parrello. The Board would like to thank Mr. Parello for his prestigious contribution over these years. At today’s board meeting, the board deliberated to co-opt pursuant to article 2386 Valentino Bravi, currently CEO of the TAS Group S.p.A., until the next shareholders’ meeting.
Valentino Bravi declared to have the requisites of independence and honorability foreseen by the applicable law and by the Self Conduct Code for listed companies. On the basis of these statements and the information available to the company, the board of directors ascertained that he meets the above mentioned criteria.
The curriculum vitae of Mr. Bravi can be consulted on the company’s web site at the following link:
As foreseen by paragraph 2, art. 154-bis of the T.U.F., the Administrative manager of the Group, Sonia Passatempi, declares that the corporate accounting information in this press release corresponds to the documental evidence, financial books and accounting record
Founded in Ravenna on July 4, 1996, listed on Borsa Italiana since July 4, 2001 (AllStar segment), Itway SpA today heads a Group that operates in the Information Technology sector by planning, producing and distributing of e-business solutions. The Itway Group operates as Value Added Distributor (VAD) of software technologies for e-business in Italy, France, Greece, Spain, Portugal and Turkey and is, in these business areas, a market leader. The clients of Itway VAD are “system integrators” and “value added reseller”, who sell products to end users. The major products distributed by Itway VAD in Italy include: Acronis, Alcatel, Array Networks, Arcsight, Bluecoat, Check Point, Extreme, F5, HP Security, Ipswitch, Lenovo, Kaspersky, Kemp, Mcafee, Microfocus/Novell, Red Hat, SonicWALL, Vidyo, VMware.
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