Esprinet S.p.A.

Good morning everyone and thank you for joining us for the ESPRIT Group Fiscal Year 2025 result presentation. I'm Giulia Perfetti, Investor Relations and Sustainability Manager of ESPRINET and here with me is Alessandro Cattani, CEO of the Group, who today together with Giovanni Testa, our Chief Operating Officer, will comment on the results. Today's call is being recorded and the podcast will be posted on the ESPRIT website in the investor section together with the presentation. Your lines have been placed on mute, but after the speaker remarks, there will be a Q&A session. Please note again that this presentation contains forward looking statements, so I would like to draw your attention to the regulation note on page 2 regarding the information contained within this document. I will now pass the call over to Alessandro to begin presenting and commenting with you on the fiscal year 2025 results. Alessandro, over to you.

Thank you and welcome everybody. It's quite an important moment for me and to a certain extent for the company and definitely for Giovanni Testa as well. For me, as you know, it's the last investor call as I will be stepping down from my position effective April 23rd. So, Giulia, if you could please move to the slides over to the first slide. We will dig into the, let's say, the reasons of this change, and we will have Giovanni introduce himself more in a couple of slides. But let me first give you an highlight on the industry insight, what happened in 2025, as well as what we did in 2025. So, as you well know, the global economy, despite an initial scenario, which had a lot of tensions, performed better than expected last year. There's been quite a lot of investments, even too much, I would say, in the artificial intelligence segment, and we'll come to this in a moment. And this was reflected in a very robust ICT spending in the EMEA region. Again, the ICT spending exceeded the GDP, And in the regions, in the countries where we operate, the Southern Europe, and now we have an exposure also to Netherlands and to Ireland, but the bulk of our business is performed in Italy, Spain, and Portugal. We have witnessed an ICT spending in these regions with a growth of 6%. and this has confirmed once more the the important role of technology within the changes in the in the overall performance huge investments in artificial intelligence. This activity coupled with the refresh of the devices which happened last year and is still going on in this moment and is the result to a large extent of the huge investments made during the COVID period which happened five years before, this coupled with the growing use of cloud on one side and the growing threats linked to cyber attacks and therefore huge investment in cybersecurity gave and are giving a really, really healthy outlook to our sector. We're coupling this with the energy transition, which probably the latest geopolitical events in the Gulf will, we expect, accelerate furthermore the transition itself. And hence, we're really excited of our move through Zeljetek into this energy business. The overall ICT market grew 6%. We had the distribution channel where we operate, performing again in a very good shape, much, much stronger, the performance in Spain and Portugal than the one in Italy. But Giovanni will dig into the numbers in a second. What's important is that the go-to-market represented by distributors, and S-Print is one of them, grew once more and the weight of this go-to-market is now around 48%. So, healthy performance in this sense. Now, moving to the next slide, we're going into the highlights of what we did last year. First of all, the sales have been pretty solid. We had a 5% year-on-year gross sales growth up to 4.6 billion. I recall that the numbers that we report are net of the IFRS 15 principal agent principal accounting principle. there's more than 300 million euros of gross sales that are not reported at sales and just as a gross profit. So gross dresses were up five percent and we had an extremely uh brilliant performance in the iberian peninsula and italy was substantially flat in line with the performance of of the market we have been focused as you well know in the higher added value markets of Vivaldi, so digital solutions on one side and services, and Zeliatek, so green transition. And we have outperformed the market. I'm happy that our focus on these areas has delivered as expected, and frankly speaking, a little bit more than what we expected. We had a very positive performance on PCs as well. The remaining products, mostly consumer electronics as well as printers and accessories, recorded once more some decline, most of it linked to our decisions to progressively shed those kind of businesses that we deem as not profitable enough or not providing return on capital employed good enough for us. In terms of profitability, we had a range of EBITDA adjusted and we delivered on the upper range of our guidance. We had a good Q4.

But it's slightly less than.

Mostly linked to. Less than expected performance in additional rebates in the Zelia Tech business, but we'll dig into it in a moment. Gross profit margin is now solidly above 5.5% and by a very challenging start of the year in terms of operating costs, we then during the year had a very, very controlled performance. You have You will see in a moment during the quarter, GNA were up just 1% compared to previous year. So really solid performance in this. Cash conversion cycle closed at 26 days. We're still short of the, let's say, ambition of running at 20, 21 days, which means for us being cash neutral. Net financial position is... including 1643.8 million, way positive if we look at the bank position. Return on capital employed was down at 6.1%, negatively affected by the EBIT performance, which was affected by the fact that we have a higher weight now of depreciation linked to the investments we made in Italy a couple of years ago on a new warehouse. Luckily, we are working hard on reaping the results of having worked on improvement in the levels of working capital. And therefore, we are expecting to be able to close one smaller warehouse during the course of this year in Italy. and hence bringing an improvement in this area as well. We had a higher than expected tax rate to a number of phenomena and one namely a write-off of deferred tax assets on our Portuguese business, not lost, simply from a cautious standpoint, we decided to write off deferred tax assets. And as long as we're seeing a very nice turnaround in our Portuguese business, we expect to recover part of them in the future years. But that impacted our net result because of the tax rate whilst the pre-tax numbers were significantly growing. And we have proposed once more a very healthy dividend of roughly 35 cents per share, which brings the total amount paid since going public to more than 220 million euros out of north of 520 million euros of net profit generated in this 25 years being listed. So pretty solid performance here. And in terms of our value strategy, well, we kept executing on our three strategies, vValley, our key player in digital transformation, cloud, cybersecurity, and we outgrew the market and we consolidated our presence in different segments. The green transition with Zeliatek, phenomenal growth and we are experiencing even higher growth in this moment. So we're really positive about the future outlook of this business. We have VAMAT in Benelux, which we acquired after a very long process. We consolidated it in the last quarter of last year, but we expect a lot of potential contribution out of AMAT. Giovanni might dig a little bit more into this. And lastly, we had positive results, especially driven by the PC replacement cycle. And we kept experiencing good demand from businesses and consumers. Okay, Giulia, if we move to the following slide, I would end over to Giovanni. Giovanni, then we will have more on this. Giovanni has been serving in the company since 2001. When he joined the company, since 2016, has been in the management team of the group and since 2020 has worked as chief operating officer. We have shared the strategy planning and execution and so more and more we are in a position to have the man really in the driving seat of day-to-day operations. with us as it did in November to explain us what happened last year and then we will discuss again on the outlook for the future. Giovanni, over to you.

Thank you, Alex, and good morning to everybody. Here we show you the group of performance in Q4 and in the full year 2025 under the point of view of the country or the product category and the cluster of customers. As you can see for the full year results, For Italy, we are flat for the growth of the sales and also in line of the market because also the market show a performance of zero growth. Yeah, it's been in Q4 and also fully are 25. We grow a lot with more than 10% in the full year and more 12%. In a. For a line that would go to market as Alex said a few minutes ago. the Iberian Peninsula had a very good performance in 2025. In Portugal, we are growing a lot more than the market, both in Q4 and also the four year. The turnover is increasing a lot and also the turnaround that we started in 2024 also with the changes of some management at the point of a new country manager, is giving us a very good result. And we are doubling the growth of the market in Q4 and 4.4, the growth of the full year 24. If we see the product categories, what Alex explained again a few minutes ago is well represented in these slides. Our strategy to have the maximum focus on solution services and the green tech spaces is giving the right success that was expected in our mind, that you can see also in the figures. The devices are losing sales in this moment as related more or less everything to consumer products, TV overall, over the other categories. Chris, we see a very good performance for that product category, fully aligned with the growth of the market, 6% in Q4, 5% full year, and is connected to the change of the release of Windows from Windows 10 to Windows 11, and is a good effect that in the first month of 2026. But I would like to underline more that in solution services, we show you a growth of 12% in Q4, for the green tech, 43%, that combined more than the growth of the market that was 13%. for the Q4 and also for the full year we can say that the bigger results because for our point of view is a big result of the social services and the green tech show you a performance over the market. We are over performing in the market. About customers, Probably you know perfectly that overall in Italy, the retailers and the retailers market is not so wonderful. The market in Q4 was flat and in the full year was 4% growth. We are in the full year flat, as Alex said, also because we decided not to compete in some business that under our point of view are destroying value and we are not decided not to follow the turnover but to follow the bid and the control of the working capital. So we prefer some turnovers. On the contrary, for the IT seller, For Q4, we have a growth of 8%, more or less the same 7% for the full year, aligned to the market growth that was 8%. In the next slide, we see the revenues and the bid at absolute value and the bid at percentage of Q4 and of the full year 2025. What we can underline in this slide, the very good performance, as we said, the social services, the bid margin of the astronaut total the screen plus devices grew in 3.5 million euro of 21 percent and the bid margin percentage passed from 1.56 to 1.90 is mainly related to the performance of the screen About solution and services, the growth of the bid in Q4 is in percentage, sorry, in absolute value is we are decreasing, as we said before, is connected to extra contribution that we In our hope will be the same in the future because it's connected with the M&A deal that we did in October 25 with the M&A of VAMAT, the acquisition of VAMAT. that was in the Zetatec space, the company that is working in Benelux and Ireland. VAMAT has specific skills that we wanted to transfer to the Zetatec space in Italy. And these specific skills can guarantee from our main vendors overall, our main vendor that is Huawei Solar, a stable extra contribution that in 2025 was not. So is one of our target of the, one of our reason is that. About the full year 2025 versus the full year 2024, we see in the total of a growth of 4% of the sales, €150 million, with a stable EBITDA margin. around 69 million euros, 69.7 against 69.5. We are a pleasure to underline that it is fully aligned over the, again, with the guidance that we announced in May 25, we confirmed in September and November 25, and we were consistent with what we said.

If only we had this extra contribution.

Yes, also without the extra contribution on the country, we could have an extra performance also about EBITDA. In the next slide, we show the Q4 and the full year 2025 profit and loss summary. A lot is already said. comments the slide before. If we see the Q4, the growth of the sales was 3%. The percentage, the gross profit was flat absolute value. You will see a growth of the SG&A of only 1% against the, again, If you remind the performance of Q1 in which we had a lot of millionaire of cost with a percentage very high after that. also because of was inserted some cost related to many uh acquisition of amateur after that our philosophy our strategy of cost under control will uh will apply there in a very well uh more than the end of quarter four uh before it was a decrease of sgna was only one percent that is less of the inflation rate About EBITDA, as we said, is flat in the full year and in Q4, the decrease is another time connected to the extra contribution of ZELA ticket that we said before. About the net financial expenses, In the full year, you see a flat result, €10.8 million of other financial expenses against, again, versus €10.7 million of 2024. The result of Q4 is related to a higher average working capital. Next slide. The financial expenses literally increased from €2.6 million to €2.7 million. About the net income, Alex already displayed that the difference is related to the rate of deferred taxes in Portugal. I think we cannot add more of what Alex said. About the balance sheet summary of 2025, here we wanted to underline to main effort. Despite the increase of the sales of 4%, our operating networking capital is flat versus the year-end 2024. So you can see that the inventory traders are who are showing us exactly a flat net operating capital of 4 million more. In the total, the amount is a very low number. And under the point of view of the net financial debt, we increase the national debt from 36 to 44, around 44, so 8 million euros more, respect to the results of the 24 year end. And I think that it's slightly higher than year-end closing and is fully under control in this moment. Here we show you the four-quarter average of the working capital. As we see, we are continuing decreasing in 2025, 29, 28, 26 days. And the decrease from September to December is due to a decrease of one day of the inventory Nothing changed about DSO and one day of the purchase. The part related to the payment of the vendors. The year end result is fully flat at the end of 25 to compare the end of 24, four days of working capital. Cash cycle. Due to everything that we said before, the gross return of capital employed evolution is before the first 60.1 and post 2016 4.9%. Slightly reducing from the quarter before. Please, Giulia, the stage is yours.

Okay. Thank you, Giovanni, and good morning again to the audience. It's a pleasure for me to be here with you, the 2025 results of our sustainability past. actually thanks our effort on a journey that for sure requires determination and consistency. In the challenge of climate change last year, CDP again awarded us a B rating for both climate change and water security. This recognition confirms, let me say, the quality of our environmental policies and the solution We reduced our scope one and two emission moving closer to the target to 2027 target of a 12.6% reduction compared to the same baseline. For scope three emission, we continue to carefully monitor our suppliers. actively involved in the SBTI goals because we are convinced that the fight against climate change requires a shared responsibility along the entire value chain. 2025, as mentioned earlier by Giovanni and Alessandro, was also a year of strong growth for Zelia Tech and with the acquisition of VAMAT, our group consolidated the role as enabler of the green transition. At the same time, we took another concrete step toward an increasing economy by launching a certified survey for collection and disposal of technology and office waste. designed to support our supplier and our customer in the responsible management of product end of life. But for us, as you know, sustainability also means, and above all, means people. In December last year, we obtained a national certification for gender Equality, according to the UNPDR 125, that is a milestone that demonstrates our daily commitment to building a fair, inclusive, and respectful work environment. We also renewed our Great Place to Work certification in all the countries where we operate. And this award confirms once again our desire to continue improving by listening to all of our colleagues. We also worked to make the entire value chain more sustainable, defining a policy for sustainable value chain management that fixes principal requirements and processes for assessing ESG issues for our strategic partners. On the governance side, 2025 marked another crucial step. That is the publication of our first fully CSRD compliant report that pushed us further towards greater transparency and to integrate even more sustainability into our business model. In the second year of reporting, we have intensified dialogue with external stakeholders, and we have set our financial materiality in line with the enterprise risk management system. A further source of pride, let me say, is our positioning among the top five small caps in the EEG index, which measures the governance excellence of companies listed on the Italian Stock Exchange, confirming the solidity and the credibility of our approach. With these results, our group shows not only that it is consistently advancing its sustainability journey, but also that we intend to continue improving with responsibility and job. So that's all on my side. Now I'll turn the call over to Alessandro for the final remarks.

Okay, thank you. So what to expect in terms of technology and landscape? One of the geopolitical scenario, let's say that is for everybody probably difficult to understand what the impacts on the economy as a whole will stem out of this major conflict in the Middle East. What we could say is that we are not directly affected, our industry is not directly affected by the conflict, meaning that the supply chain is not passing by the Ormuz channel, it's not challenged. We might suffer indirectly or profit indirectly if and when, as we hope, the crisis will be over. of the overall performance of the economy, clearly. If the GDP or the interest rates will change for the worse, at least the short term, that might change the attitude of households and companies, and that might have some impact. We are not experiencing it so far. But still, it's what we can say so far of the geopolitical scenario impact. What we see on the other side is that the structural fundamentals of the company and of the industry are very solid. There's a lot of momentum in innovation and modernization, and companies more and more are in need, strong need of improve and strengthen their competitiveness, their resilience, and they do it through a lot of digitalization. That is driving a major, major growth in AI investments. This is a big opportunity, albeit sort of an indirect opportunity for us, meaning that we are not directly providing products to the large hyperscalers Google, Microsoft, OpenAI, and the others. But on the other side, companies that are implementing AI projects are accelerating their digitalization processes and journey. And directly, they will require more and more products. And we're seeing it, we're witnessing it through our extremely brilliant performance in the V-Valley, so the digital solution space now if we look at the role of distribution and channel opportunities there's been a further consolidation during 2025 and on the other side the vendors we mentioned it before distribution grew up to 48 percent of the overall route to market of vendors. Distributors are more and more central in vendors' go-to-market strategies. We are extremely well positioned to turn what is on a worldwide basis an lead mostly to the enormous investments of the hyperscalers in GenAI data center. We are turning it into an opportunity for us. This product, this consumption is driving product prices up especially on PC smartphones and service across the board I would say but especially on PC smartphones and other devices and especially services I said because of the higher RAM prices for us is is an opportunity because we we see our inventory getting more and more valuable day after day. We are now having on a routine basis price increases every couple of weeks. There are vendors that are even pushing for once a week increase. So after decades living in a deflationary industry. We're now profiting from an inflationary industry. So that is something unexpected and it's good for Giovanni and the rest of the team. It could turn into a nice tailwind. And as long as IT partners and users need to manage cost volatility, relying on the capabilities proven on ground in decades of distributors and aspirin more specifically is particularly important. And so there are opportunities here. Last but not least, consider that most of our variable costs are linked to quantities moved, not the price of the objects moved. And the fact that PCs and smartphones are having unitary prices that keep on growing turns into an opportunity for us because the costs are are linked to percentage-wise, the costs are on a smaller, sorry, on a higher amount of revenues. So another opportunity. Overall, the analysts expect mid single digit growth for the distribution market in Europe in 2026. And we're seeing it in the first couple of months. The market is performing pretty well.

Also, we are happy of our performance in the last two months.

Yes, exactly. The market in Italy was flat-ish pretty much as last year and the Spanish and Portuguese market was running double digit and we are happy. We are happy. We are happy in what we are doing. So with this, I close my my presentation and then I hand over for what to come to Giovanni. First and foremost, Giovanni, I already said it before, Mr. Testa joined our group back in 2001 in the back office department. Group controlling. Group controlling. um and then in 2020 in 2016 meanwhile grew took a a bold challenge that i put on his on his desk and say why don't you turn a salesperson in a sense a commercial So he took responsibility, joined the management team, the leadership team, and as business operation manager, ran five commercial departments. And he showed an expertise in sales and marketing, which you normally don't see in people that come from back office. Chief Operating Officer back in July 2020 and together we have shaped and driven this last five years of strategy and implementation. Giovanni is a serious and committed person and he has the energy and now I come to my position I will step down effective April 23 during the AGM which will appoint Giovanni as a board member and in the subsequent board meeting it will be given the the powers as a CEO. I will step down from all my roles in the company effective April 30th. And I will stay as a shareholder of Axopa. Now, why am I leaving? It's, well, I'm turning, of course, it's always a little bit difficult to say this. This is a sort of my third baby aspirant, but I'm turning 63. I'm turning down for personal reasons. You need a special degree of energy to do this business. And for a number of reasons, I realized that I no longer had the right energy to do it. Unfortunate as it is and it was, I had to take this decision. I decided to step down earlier than expected. I would have probably continued for some time. And we have managed to smooth the transition as much as possible. We have a very solid management team. There's a lot of continuity, as you see, in the people that are running the business and in the strategy itself. Giovanni will comment in a second on his expectations for now on. As a shareholder, I joined our... our chairman, Maurizio Rotta, contributing our shares back in 2020 to Axapra Investment Vehicle. We then both further shares and we have now close to 7 million shares, so around 14%, slightly more than 14%. I also have less than 100,000 shares on my personal account out of past stock option plans. I speak in the name of Maurizio as well. We are strong believers in the industry, especially now we see tons of opportunities and in the company itself. If only It's always life sometimes takes you to other journeys. We believe in it, in the company, in the industry. And so we are together. The company is a single entity and we invested all. always with unity, which is the rule of the laws of HACCPA. So count also on a stable shareholdership from HACCPA in the foreseeable future. And that's it. Basically, let me now turn the stage for the future to giovanni who will be your host in the future and let me thank everybody before the q a session for the trust and support you gave us in the time i'm proud of leaving a strong company with a sound balance sheet, an excellent management team, incredibly good prospects, and I hope as a shareholder to keep on reaping the rewards of what we have built in time, and I'm pretty sure Giovanni and the rest of the management team will keep on nurturing in the future. Thank you, everybody. Giovanni, up to you for the looking forward.

Yes, few sorry few words before to speak about the 2026 because it's also a special moment for me and I would like to say thanks to Alex for all he was able to transfer to me in 25 years of working together and it was a pleasure to work with him and I hope to To be a good good guy from for Alex also in the next years. As Alex said, the strategy, the group strategy will not change in this moment. We are since 2024 in the moment in which we divided the group in three brands and three different go to market as per Vivaldi and Zelotek. The result that We have reached in 24 and 25 demonstrate a good strategy, a good vision that we had and we wanted to continue to For sure, we'll continue to invest and to add all the energies and also the resources that we had in the Vivaldi and Zeletek space because we think that solution services and green technology are the right markets in which we have to move and we have to grow. For sure, we will try not to lose every opportunity that investment space in the market will offer us. We want to continue to invest in people, in culture. And to grow with an organic growth, but also through M&A because our history, our DNA is a history of also M&A operation and ideas, which we have created in 25 years of the testbed group that we are today. We will manage everything connected to the service model because also about services we want to add another speed respect to what we did till today. We have some ideas and probably in the next month we will announce something. and we will want to be the right partner for our vendors and our customers managing the digital transformation and also managing all will be related to AI. overall have a generative artificial intelligence because we think that is another aspect, another opportunity that the market is giving us and we want to be a main actor and not the ground actor in this aspect. So we hope to to have a very well 2026 and we will announce the guidance for the next of this year in May 2013, if I remember well, when we will announce also the Q1 result. So thank you.

Thank you, Giovanni, and thank you, Alessandro. We can start with a Q&A session. The first question comes from Mr. Storetz. Mr. Storetz, please go ahead. Remind to unmute your microphone, please.

Yes, can you hear me now?

Yes, everyone.

Okay, thanks. I have two questions. The first one is about 2025 gross margin, which was flat-ish year-on-year. You had some benefit from lower, let's say, factory cost. and I would have expected probably some improvement in light of the mix which apparently was supportive so if you can elaborate a bit on that second question is about 2026 OPEX is it fair to say that in 2026 the OPEX increase should be nowhere near what we saw in in 2025. And that's pretty much it, Alessandro. What can I say? Good luck with your new life then. Well, thanks.

Thanks, Nicolò. I think the 2025 question and i leave the 2026 to giovanni and um so on on gross margin giovanni to to a certain extent uh implicitly answered yes we had a good performance in terms of product mix but especially in q4 we had in 2024, the solar business that benefited from a particularly high level of rebates. These are linked to the level of value add that you provide to vendors. This year we were not able to reach the same level of contribution we sort of expected it to a certain extent and not to that extent and it's part of the strategic rationale behind the acquisition of VAMAT which I think we mentioned in the past course VAMAT is a sort of value-add distributor they have a capability of providing certain certifications And one of the investment rationale behind VAMET is the capability of bringing debt capabilities to Italy. And that would sort of structurally give us the access to higher rebates. Aside from having an additional source of revenues, margins and profitability out of the different new geographical regions where we are operating by means of being in WAMAT. But that was the concept. Essentially, that was the main issue. The second one, to a lesser extent, was a little bit of overperformance in the retail space that we had against our expectations, mostly because the PC refresh cycle was particularly strong and some of the additional sales came out of that area. And you have seen it in the mix of screens that were growing particularly well. And that was the second effect, I would say. For the OPEX, I turn it to Giovanni and I want to thank you, Nicolò, for the kind words. I hope my future will be good and longer. So thank you.

OK, about the OPEX, as we mentioned before, the DNA of the group is to have always under control the sgna cost. And we will continue to do that. We have some plans also for reducing some costs related to the logistic rents. In fact, using also the value and the volume of the inventories that we have, we are working, we can anticipate that we are working on the The possibility and we will think to reach the target to close the warehouse for the end of half one. So in order to reduce the is the cost related for logistic point of view, but for sure we will add a very hard control of the cost and we are trying to maintain the level of cost that we had in 2025, having a growth of all the other figures in our profit and loss embellishment.

Next question is from Mr. Berti. Berti, I give you the floor, please. Remember to unmute.

Remember to please remember to unmute your microphone.

Yes, sorry sorry I had now the possibility to unmute because it was not clickable. Sorry I Alessandro and I Giovanni. Thank you for taking my question. I have few first one in all about memory is a shortage. Could you give us an idea on how much pieces prices are increasing due to this matter? and always on this topic but demand wise I was wondering what are your expectations in terms of impacts I mean do you see any reduction in volumes due to these price increases or you are seeing signs of customers anticipating purchases or changing ordering because potential concern about future products availability or price increases. And lastly, I was wondering for how long do you see PC refresh cycles supportive for the market?

OK, I will try to answer both Alexei and myself. About the last question, probably the need, the number of months that we will see in the market to change, to close the refresh cycle of PCI notebooks are around six, eight months, no more. About the The idea that we have on shortage and on the increase of the of the ramps, the price of the ramps, we see in the market that in this moment that there is no a very shortage moment because the availability of the products for about all the vendors that we managed is close to zero. For sure we are selling a number of items less than last year, but the increase of the price is more and more in percentage higher than the reducing of the number of pieces that we are sold. So again, we see an opportunity in order to manage less inventory with a higher average price and not changing a lot the percentage of the margin for sure the absolute value of the margin will be a good news for our profit and loss. And about the increase of the prices, we see in this moment, as Alex said, a change of the list price more or less every 14 days from the vendors, from the main vendors. And the increase, the percentage of the increase is double digit. And for some few items, also triple digit, comparing the price that was present in the press list in September, October 2025.

Yeah, if you want to buy a PC, don't wait. Buy it now because we're seeing something absolutely unprecedented. It's unprecedented. It's something vendors are appealed by what's happening in the market and it will last. It will last for many, many months.

Thank you very much. Good work to you. And a special thanks to you, Alessandro. See you. Thanks, Gabriele. See you.

Another question from Mr. Paladino.

Good morning, everyone. Thank you. Thank you for the presentation. I have just one last question because everything has already been answered. It's on the factoring side. So we saw that your off-balance sheet factoring increased. So can you help us maybe understand whether this reflects deliberate choice in the balance sheet management or whether it's partially linked to the evolution of your working capital dynamics?

Yeah, thanks. Well, it's pretty simple. It's sort of seasonal effect. By having an overall strategy of progressive reduction of our exposure to the consumer market, consumer in the sense of retailers, because of the PC cycle replacement we had a spike in sales and that happened mostly in Q4 and some of it went through retailers more than expected and that was the main driver of factoring increase meaning that we normally sell retailers receivables to factoring So in time, as the sales to this market segment declines, you might expect a decline on the factoring amounts. If they spike, you might expect a growth in that area. So that's mostly a technical issue. There's no specific decision of managing the balance sheet by means of factoring. We have some frame agreements with factoring companies as well as with retailers. And whenever we sell to them, we sell the receivables. Full stop. Nothing more. There's little room for playing with more or less sales of receivables there.

It's linked to the topology of customers. Thank you. You're welcome.

And a question from Mr. Contos.

Please go ahead. Yeah, hi. Yeah, Alessandro, congratulations for this new stage and Giovanni, congratulations for this opportunity. Just one comment on Spain. Can you explain a bit the performance relative to the market? How that is explained? Is it something that should worry us? Is it linked to devices, screens, or what's the... Why Esplanade underperforms the market, basically, in Spain?

No, in Spain... Hi, Konstantinos. Thanks. No, no, it's a deliberate performance over there. Spain is on fire as a market, really growing and we're eating on all cylinders. But our strategy, you might remember what we did in Portugal a few years ago, is to walk away from unprofitable or excessively working capital demanding portions of the business. And that's mostly what happened in Spain. We outgrew the market in the solution segment. We did really well. And we pulled on the brakes on certain PC and consumer related, consumer products related sales to retailers for this reason. So we lost a portion of market share. Mostly it's linked to smartphones, where we walked away from certain Chinese brands, smartphone Chinese brands, which were driving ridiculous amounts of working capital and they are performing well in the market. So from a market share, that's what's happening. But Spain, if you look at the segment information in our press release, you will see that we have had a phenomenal year.

Thanks to you.

Next question from Mr. Margi. I'll give you the floor. Please go ahead.

Hello, everyone. Thanks for the presentation. Just a quick question. The first one is on the device segment. So we have seen a decrease in trend over the year. And also in Q4, you explain it is mainly due to your choice to avoid lower profitable revenues and with a lower return on capital employed. I was wondering if going forward, so in 2026, this trend may continue or we may assume a similar weight on sales compared to what we have seen in 2025. The second question is on the tax rate. So we have seen this increase in tax rate mainly due to the write-off of the federal tax assets. so going forward might we expect a tax rate to come back to go back to let's say reasonable rate and finally thanks to alessandro for all thanks for sharing your expertise on on the industry and have a nice second life thank you again thank you thank you pietro

And Giovanni is as experienced as me and so even more so now because it's so much more in day to day. So I leave as long as it's mostly 2026. It's it's up to you.

OK, from the first question about the devices. We can see that that in this moment we don't see any difference between 25 and 26. way to approach that type of market from our group and we also we don't see any difference in the go-to market of the vendors that are managing that product categories. Nothing changed, nothing will change in our approach. If the working capital is not good from our point of view and if also the gross margin and gross profit are not in line with what we are expecting, we will decide not to manage some deals. About the tax rate, we think that With the exception of the spike that we had in 2025 due to the Portuguese write-off that we mentioned before, we will return, we will come back to the average percentage of taxes that we had in the last three, four years.

Unless the law changes, of course.

For sure, unless the law changes. On the contrary, we will have to be so straight to the new rules.

Okay, thank you. Thank you.

Okay, there are no more questions, so I think we can end the call. Thanks to Giovanni, a special thanks to Alessandro. Thank you for participating and we remain at your disposal. See you next time.

Thanks, everybody. Bye.