Tinexta S.p.A.

Good afternoon. This is the course call conference operator. Welcome, and thank you for joining the Cinexa Group Consolidated Results as of the 31st of March, 2024 conference call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. If anyone needs assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Joseph Mastrogostino, Investor Relator. Please go ahead, sir.

Yes. Good afternoon. Good morning to the folks in the U.S. Thank you for joining us in next year's 2024 First Quarter Results presentation. Here with me today is Don Ebaldi, Group Chief Financial Officer. As a reminder, all the relevant documentation for the First Quarter 2024 results can be downloaded from our company website in the Investor Relations section. For the purpose of this call, I will go over the first quarter 2024 highlights and updates, so Don instead will go over the first quarter 2024 financial results, as well as the business unit's performance, providing us with a deep dive. The last part of the call will be dedicated to Q&A, and the recording of this conference call will also be available on the company website, and it will be posted upon completion of this call. At this point, I will kick it off by turning to page four of the presentation. So starting from page four, you see we have provided you guys with classic key data per quarter. We start with double-digit down growth in terms of revenue, which reached almost $100 million and $98.4 million. Maybe the adjusted came in at $15.4 million, growing around 3%. versus the prior year. EBITDA on a reported basis was close to $9 million and EBIT adjusted was around $8.1 million. I think it's worthy of mention that net profit on an adjusted basis reached $6 million and even more interesting is also the free cash flow adjusted on a continuing operation base which reached a very considerable $27.2 million in the first quarter. That financial position came in at 240, and this is a fully function of the acquisition that you all know, which is related to ABS, which was closed in Jan of this year. At this point, I will be turning to page five of the presentation. Most of the comments of the numbers that you see here have obviously been commented, but I would actually start by talking about the first quarter from a qualitative perspective, right? The first quarter represents a gradual start of the year, and that was mainly driven by the well-known seasonality. We will need to stress the fact of the seasonality during this quarter and also in perspective in terms of what the year will be. And we have dedicated actually a slide on this, and we would like the market to be very accustomed to the seasonality of our quarters going forward. I think it's also important to highlight that, you know, that the adjusted net profit on a continuing operation base is the real, you know, performer in terms of indicator when we look at the various numbers. Obviously, we have to give out if it's out-reported, if it's out-adjusted, but on an adjusted basis, I think it's important to highlight how adjusted net profit is obviously a much better indicator. NSP over LPM is, again, a function of the most recent acquisition. We're up at 2.32 times, which is, again, a function of the recent acquisition. Going to the different divisions, Adone will give you a deep dive, but let's start by saying that the top line on all three business lines grew, starting from digital trust. Digital trust kicked off the year very strongly. It grew 21%. And even more important was EBITDA, which reached 36% with a very excellent EBITDA margin, which was around 31%. Again, another historical high for the division, so kudos to Digital Trust because they have started the year very well. Cybersecurity grew nice and healthy 16% in revenue. EBITDA hit a plus 10% and the margin was around 10%. Even in cybersecurity, we must highlight that there is some seasonality, and it is more pronounced in the latter part of the year. Business innovation posted a single-digit growth, around 4% growth, and obviously in revenue, and EBITDA came a bit over 1 million. We'll extensively discuss about the dynamics about business innovation. In terms of the most recent events, I'm on the bottom part of slide five. We reached 100% consideration of the three cybersecurity companies, namely Yoroi, Swapkin, and Covalent. As a reminder, there is no impact in terms of Net Financial Position because it is already included in the Net Financial Position at the date of the acquisition. We also, during the quarter, launched a new strategic and operational advisory business for small and medium enterprises. We all did, obviously, are aware of the fact that we announced a very large acquisition and completed it in January. It is about 74% of AVF. And the board of directors today approved the start of the share buyback program, which we will execute according to market dynamics. Now, going to page six, I think page six represents more of a, you know, a graphical representation of the numbers that we already highlighted. So, mostly important is to turn to page seven. Now, we, I think this is, we should focus extensively on page seven because it represents, first of all, the history of the group from, you know, an EBITDA perspective in particular because that is what we will be concentrating on. But the most important thing here is the weight. The weight of second age in the last three years has considerably grown. It was 60%, and I'm talking about the EBITDA adjusted, you know, in the second age, so that includes third quarter and fourth quarter of the year, was equal to 60% in the fiscal year 21. It was 61% in the fiscal year 22. And even more important was last year in 23, where the overall weight of the second HUB-TAO was 63%. This year, as you can see, we started the year, as we announced, in the most gradual way. The overall weight of the single quarters can be found on the bottom of each histogram. And you can see that the first quarter for this year represents around 12%. of the data considering the midpoints of the 2024 adjusted EBITDA guidance. So as you can see, the overall relative weight of the second age will be even higher this year. So we want the market to be acquainted with that. And that's also one of the big elements, I think, of our business model. Remember, business innovation has a relative weight, which is obviously very important and much more significant in the second quarter, in the second H. So as you can see, the cadence of the single quarters shows a very light first quarter, a bit more pronounced second quarter, and then the big, obviously, between Q3 and Q4, mostly being around fourth quarter. So we want the market to be accustomed to it. We are preparing the market for it in order to have a much more, I would say, gradual outlook for the market. Let me stop there. Let me leave it to Adonis to do a much more deep dive onto the numbers. We also will go give you a nice outlook on the adjustments so that you have a very clear P&L, and then we'll wrap it up through some Q&A. Adonis?

Thank you, Joseph. Good afternoon, everybody. Thank you for joining us for this conference call. You know, I will start from page nine, where we have the The income statement, Joseph already explained how different business units, and then I will further dive, but you see the revenue is going up by almost 5%, mainly driven by all the business units. In terms of ABTDA adjusted, definitely we overperformed the previous year with a different perimeter. And as you can see here, we have a mix that I'm going to explain that is the explanation for the drop of the ABTDA margin. You know, basically as a revenue mix during Q1, we had more businesses more business from the business unit with a lower ABTDA margin. And also in the cybersecurity, we deliver a revenue mix with more weight from the product that are carrying definitely a lower ABTDA margin. Overall, the EBGDA landed at 15.4 with 15.6% EBGDA. Definitely, as Joseph clearly stated, overall we deliver the best ever EBGDA margin from digital trust, the EBITDA margin from cybersecurity was definitely aligned to the previous year, again, driven by a worse revenue mix with more product. And if we look at business innovation, definitely there we have a lack of profitability driven by the by two things. First of all, the first quarter of ABF is negative in terms of TDA, something that we already accepted very clearly. Revenue for the first quarter accounts for 5% of the total revenue, so you have a lower absorption or fixed cost during Q1. Second, as revenue leaks from warrants, again, expected with lower weight from the subsidized finance has driven a lower EBITDA margin. We do see this as a temporary situation. Also, because the industry 5.0 that we expected to start in Q1 has been, I would say, approved, but definitely delayed at the end of May. So from that on, I think we could compensate the lower revenue that we are generating in subsidized finance. In terms of non-recurring costs, this has been a quite heavy quarter. Obviously, we completed the deal with ADF, clearly the largest deal ever of Tinexa Groups, and this brought quite a important cost of a transaction. Basically, in our view, it's an additional cost of the enterprise value, but accounting-wise, we have to book there. In terms of depreciation amortization, the incident is slightly above previous year. Here, the continuous level of investment to improve our products and solutions is there. And but, you know, we do see these honestly as we expected. Net financial charges improved compared to previous year. Part of this is driven by a favorable adjustment of an amount of for 1.1 million. For the rest, we are not yet being impacted from the new financing that will start from early May. Definitely, our level of indebtedness was very low at that time, with very low interest rates. thanks to the IRS that we put on that. And in the meantime, we were able to monetize the cash available with some time deposit. Let's move now to page 10 in terms of net capital invested. So if we see our balance sheet, basically, We have a net capital invested of not far from 700 million euro. One-third is financed by the net financial position, and two-thirds are total shareholder equity. The increase of net invested capital is totally, I would say, driven by the acquisition of ADF. that I may recall is about 155 million euros. And on top of that, we have to consider that this includes also the net working capital that is positive by almost 20 million euros. So the net financial position landed at 240 million euros. as we clearly expected. And I have to underline that the free cash flow, as Joseph stated, especially the adjusted free cash flow was very positive with a strong growth compared to the previous. Shareholder liquidity is 451 million euro. and obviously includes the results of the period as well as the put adjustment that we have in our share today. If we move to page 11, I will keep your attention to the adjusted trick and show the continuing operation. We deliver a very strong growth in terms of 20%. So it means that obviously what we voiced and how our revenue of Q4 has been cashed, actually obviously during Q1, improving the performance compared to the beginning. And this is a very important indicator to us. If we look at the last 12 months, no, the Q1 brief, sorry, again, as I mentioned, is here with a strong adjusted free cash flow and the significant investment in ADS. If we look at the last 12 months, first of all, I think we need to highlight that the adjusted free cash flow is 61 million euro. This is a very solid a strong figure that supports you know our capability of converting cash converting our mtga into cash so this is a very important feature so we were on top of this net financial charges over the last year was basically close to nil and again this is the result of the very disciplined approach to the net working capital. Dividends accounted for $32 million, including also the minority. Obviously, the largest change is within the acquisitions. So basically, we have almost $250 million, so all the debt is driven by this. And with the acquisition of ADF for $155 million, the acquisition of the 20% of the minority of defense tech at $25 million, and Asherzia, including obviously both ADF and Asherzia, including the put and call that we have there. We don't have other major changes over the last year, and you can see here also the profit of 3.4 million related to the OCI data. So let's move to a deep dive to the business unit. As I mentioned here, you know, very quickly, We have seen Digital Trust, let's say, overperforming. Cybersecurity, considering the Q1 is, you know, the weakest quarter of the year, still delivered what we were expecting. And we have, you know, business innovation driven by the key factor that I already mentioned, but I will deduce. So let's move to Digital Trust. As we say now, probably we are talking about the last 10 quarters, you know, the performance of digital trust has been extremely positive. You know, we have seen over the last 10 quarters the revenue going up in the range of 8% to 10% with the EBITDA constantly better for percentage point more. and also in this quarter on, I would say, on a life-for-life basis was up almost by 12% on organic basis. If we add the performance of Ascetia, that is obviously in Q1 speaking day results, the performance being 21% with 36% growth. I would say that all the different components of the business went very well. Also, the activity in France were positive. Also, the activity we have in Visura growth the range of 10% in the revenue, 15% on FPTTA. You know, I would say everything is moving accordingly to what's expected, continue to deliver results with very nice operating leverage. and all the product lines moving very strong accordingly to our plans. We have no significant comment here. It's not reiterating the capability to deliver strong results. We continue to invest significantly to support future products, future development, and support the customer's solution, but this is not impacting our capability to a stronger cash conversion driven by the fact that the working capital here is negative. So Q1 continues very strong, aligned with the last 10 quarters, I would say, very well. Let's move to cybersecurity. Also, we are, again, although, you know, Q1 is not the most important quarter, we continue strong in terms of growth, with a range of 60% with the WTGA going up 10.1%. Obviously, we are not having uh worst margins if we look at business by business uh obviously during q1 we deliver a mix between services and products that is uh more weighted on the product than the services and this is the reason why the EBITDA margin is dropping from 10.2 to 9.7. This is not absolutely a trend. It's an occasional situation, and we do expect, you know, the EBITDA margin move accordingly to our expectation and delivering an improvement compared to results as 20, 23 as a percentage of rent. We continue to develop our business in the pure cybersecurity solutions with positive indicators from the customer, from the customers, and obviously also in the digital transformation side of business, we are continuing very strong and positive. Our pipeline is increasing compared to previous year. And we do expect also in this segment a better delivery than this. So overall, I would say positive results and, you know, good pipeline, you know, to address Q2 problems. Let's move over on business innovation, obviously, from From the external standpoint, you know, it's quite tricky to understand the figures. I try to be very clear, or at least as clear as possible here. First of all, I think it's worth to recall to everybody that last year we delivered in Q1 5 million euro EBITDA, and then we ended up the year with 51 million euro. So Q1 is not at all you know the the main part of the business and so this is to be Everybody must to be very aware of this Second as a revenue mix We do expect it at this from at the start of the year the Q1 has been weaker as as definitely subsidized finance as a lower rates that was clearly expected. And potentially, we could have expected a better start of the new industry 5.0. This is going to be delayed by two, three months from our initial expectation, but we are very confident this year is just a matter of of to implement the new regulation. For the rest, I think that as I explained it before, the ADF result is negative in the first quarter, but again, you know, the seasonality of ADF is basically a mirror of the seasonality So therefore, obviously, we will expect a very strong Q4 and Q3 as Joseph anticipated during his part of the presentation. So, obviously, not the best start, but no other indicators that, you know, this is a threat to the delivery of full ER results. I think, you know, this is all. I would say very positive is the cash flow of this part of business during Q1. This means that we are collecting properly the first part, the last part of 2023. Now I will revert back to Joseph, and then we will be ready for the Q&A part. Thank you, everybody.

So following, you know, the deep dive that Rodone obviously gave us, which I think is always of high value added, We confirm our guidance in terms of 2024 versus prior year. Revenues, as a reminder, are expected to come anywhere between 21% and 23%, of which 7% organic. More interesting is EBITDA adjusted, which is expected to come in a range of 28% or 32% growth versus prior year, of which 10% organic, and then Obviously, the leverage ratio net financial position over EBITDA adjusted is expected between 1.7 and 1.9 times.

This, just to be crystal clear, does not include the notice for which we announced the closing at the end of last month, as well as no effect from the potential call we have on the testing.

Just to make it very clear. So it is with all the announced, you know, acquisitions that we did already. At this point, I will leave it to the operator to open the Q&A for us, please.

Thank you, sir. Excuse me. This is the chorus call conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. The first question comes from Isacco Brambilla of Mediobanca.

Hi, good afternoon, everybody. Three questions on my side, one for each business unit, starting from Digital Trust, more specifically Assertia, doing some research. Some rough calculation on the perimeter effect on EBDA and revenues looks like Assert has been a great contributor to EBDA of Digital Trust. Could you just confirm the company was accretive to the EBDA margin? Because I was thinking about a dilution in the first month of consolidation. Also, if you can share any target for Assert in terms of revenues and EBDA for the full year. Second question on business innovation, considering all the elements that you mentioned and the fact that first quarter is very light, seasonally speaking, is it reasonable to expect the division to fill the gap at current perimeter in terms of revenues and EBITDA by the end of the year? Last question is on cybersecurity. You mentioned in the press release orders at 29 million euros is of the end of of the first quarter, how should we read this data, which is the time horizon to attach to these orders? Are all of these to be delivered by the end of this year, or some of them are of a multi-annual extension?

Let's start. Good afternoon, Giuseppe. Thank you for your question. Yes, you are right. uh accounted for in the first uh in the first quarter for you know around the six million euro revenue and 2.5 million uh obviously uh driven to decisionality i think this is a creative definitely into one but you know on a yearly basis, this percentage of profitability will be diluted because we have historically a concentration in Q1 of our profitability. So this is the first part. On the GI, filling the gap is our goal, definitely. as of today we do not have information for which we will be not in the position to achieve the result. Obviously next quarter orders will be very important but we have seen also that last year we entered Q3 with not extra we need portfolio holders but then we were able in any case to deliver the result as i mentioned before the five points industry 5.0 is a key key element no doubt about this we are suffering a little bit of delay in this in issuing you know who's and putting you know this this opportunity on the market. I think that by June we will be in a position to sell the solution and the opportunity to our customers. We are already working with our customers, trying to explain to them exactly how it works and potentially how they could benefit in order to stimulate their interest. They are interested. There is interest on the market, but everybody was waiting for the final definition of the final rules of how this will be applicable. So the level of investment is a little bit, you know, from our customers, a bit on order as soon as everything will be clear. But we are already ready to work with the client and we already are working with them in order to identify clearly the opportunity there. So we do expect it. So far, the component of the digital path, let's talk about the acquisition of an alternate planet, started the Q1 very well. with more than a double digit growth with the proper profitability. So this is another part of the business that started well. So obviously challenging year as usual, but you know, we have opportunity there to fill the gap and to achieve what's expected. Sorry, the question on cyber in terms of backlog, definitely we have to, deliver more than 100 million euro revenue in this area, as you know. So, you know, backlog, I would say, is, you know, mostly related to the current year. Again, here, we do not see, you know, major risk, and this is why we confirm the The third is, again, we developed our self-challenging plan with an important role on cybersecurity. We are in the process of completing the merger between the four entities. Last week, we launched a new organization. and the new business model that is in place now. And, you know, we do expect a better capability to address, to manage internally and to address customer needs.

Okay. Many thanks, Oddone.

Thank you. The next question, sir, is from Alexandra Arksova of Equica.

Hi, good afternoon. Thank you for taking my questions. A couple of my hand. The first one is on digital trust. So we saw, again, a very solid growth profile in this quarter, plus 8% in revenues organically. I just wanted to understand how much of this 8% is volumes and how much is prices effect. And then a little bit of trading update on how it's performing, the digital trust division in this first part of the second quarter. Then a second one on business innovation, just a follow-up on what you were explaining before. You were mentioning that you expect to see already some effects of the industry 5.0 in June. Should we expect a sequentially better second quarter in growth rate terms vis-à-vis the first quarter, which has a double-digit decline. And sorry, the last one. So you already mentioned that your figures do not include the guidance, does not include Lenovis and DefenseTech. So do you have any maybe timing of when you will start maybe consolidate Lenovis and maybe an update on DefenseTech?

Thank you. Yes, no, here I am.

So digital trust, no, it's not driven by volume and price. You know, we are continuing absolutely as expected. We continue, you know, you have to consider that one part of the business is OK, and here prices and volume have, you know, is an important matter. But on the other side, we have DTM where you have a complete solution that is different customer by customer. In any case, there is no key element that is driving the growth. The growth is driven by the capability of to stay in the market, to stay in the market in a profitable way, and being able to manage fixed cost delivering an average. So here you may see that since many quarters, you know, there is no specific time. Definitely during early 23, we did some activity on pricing. because, you know, inflation was there, and so we adapted the pricing in order to compensate the impact on salary and third-party services of the cost, and this perfectly was applied. So you have seen from 22 to 23, no change in the margins, and Q4 even improved. So this is the picture. Q2 started well as ended up Q1. So, you know, I'm not able to predict now it will be 9 or 8.5 or 8% growth, but still we will have a growth not far from 10% and ABTDA is growing more, obviously. This is a normal way. Then, if you cast a bigger project with a low margin, probably in a quarter, we may have a slightly difference. But this is a very stable and a . On business innovation, what was mentioned is that we may start from June to sell So the revenue will come down the road over the next month. So I think this is basically the situation. Again, we have several lines of business. We explained how they are moving. And this is the industry 5.0 will be a key driver of the final . will be reported during Q2. by April or by May, but it's not changing the picture in these few months. In the first decade, I would say the board will analyze the next week's dossier. You know, results 2023 of the first decade will be released 40 days ago, we are doing the relevant and proper analysis of that. When we complete them, you know, the dossier will be brought to the board for investigation.

Okay, thank you. The next question is from Chandra Sriraman of Stifo.

Yeah, hi. Thanks for taking my question. Good afternoon, Rene. Good afternoon, Joseph. Just a couple from my side. So I noticed a big step up in terms of the inorganic contribution in Q1. And this is also goes hand in hand with this big jump in international growth. So can you just talk a bit about this? What drove this acceleration? And my second question, I'm just trying to understand the impact of the PNRR. You mentioned that it's not in the guidance, but you're highlighting that it was one of the reasons, the delay was one of the reasons for the weakness. So can you square the difference and also quantify how big this could be, the PNRR impact for this year? Thanks.

All right, I'll take those, Chandra. So a couple of things. Let's start with the first part, right? You were asking about the step up in inorganic versus the Q1 and therefore the international. As you all might recall during the Capital Markets Day, we heavily stressed the fact that international revenues are growing, right? The company has now reached a considerable size and therefore is the revenues from a overall group perspective are expected to grow up to 25, 26% by the end of the plan, which is 2026, right? So obviously, this is a function of what is all of our foreign subsidiaries and also the acquired companies. So we are growing specifically if I look at For example, Digital Trust. Digital Trust has done a considerable job in terms of foreign revenues, reaching a very considerable percentage point. Q1 obviously does not represent one-fourth of the entire year, but I think at least for Digital Trust, it represents a good proxy of where we are going in a directional phase. So, stay tuned to see what the overall percentage will be on a yearly base, but we have not given a specific foreign revenue percentage guidance for the year. We know that by the end of 2056, we should reach at least 25-26% of overall group revenue coming from abroad. The second question, I want this to be very clear. We mentioned PNRR from a BI perspective. Let me walk you through it so you get a better understanding. It has nothing to do from the potential impact that the plan could have had when we started discussing about the PNRR. What we are referring in BI is transition 5.0. Let me walk you through with greater detail. All of BI's business in the past three years, when we refer to subsidized finance, is referred to the so-called industry 4.0 or digitalization. So that means that you get, to make it simple, tax breaks, subsidized finance, if you, being an entrepreneur, are applying for any sort of tax breaks in that realm or in that category of investment. Now, as you all know, and this is the reason why you've seen a contraction in margins in the BI, the 4.0 margins and deductible rates have been lower year over year, and that's why we actually saw a reduction of margins in BI in the first quarter of this year. What will come later this year, and what O'Donoghue was referring to, is the refacing of margins. that part of the plan of the PNRR referring to Transition 5.0. Remember, Transition 5.0 dealt with everything that's related to investments referring to environment, improvement of energy, and so and so and so. So what we are witnessing from a BI standpoint is basically a second-age increased weight in terms of margins coming from that type of investment. So the entrepreneur right now is coming out of a 2023 that has been obviously a very busy quarter, specifically the fourth quarter for BI. The first quarter is usually very light and now obviously all the efforts are being concentrated on both the 4.0 that is residual and the 5.0, which will kick in no later than the second part of the year, so after June. So it is obviously the first two quarters will follow the same type of logic, and then the Q3 and Q4 will follow a more, I would say, you know, 5.0 type of logic when it comes to BI. I hope this is clear because we need to make it very clear to the market.

Perfect. Thanks. Maybe a quick follow-up. Can you give us a sense of the seasonality of ABF in Q2 and Q3?

Yes. Still, you know, still we are not expecting, you know, significant, you know, change. You know, it's a trend. It's what we have learned from the diligence. It's a trend where, you know, Q2 should be better than Q1 and Q3 even better. Definitely Q4 is the key element. You have to consider how these businesses are working here. Basically, we are talking about investment from our customers that are subsidized and so basically a customer is a budget for doing investment so the budget the budget of a client is over the year you know if you look at italy with subsidized finance they are running to complete the investment just before the year, so in the next tax filing they can deduct the amount earned from this investment. From subsidized finance related to ADF, basically there you have to file to a public body, and when you get uh the the positive answers then you have still timing for uh getting the cash from them so here again also here the most important part of the year is expected to be late q3 and thank you for great thank you very much and all the rest for the rest of the year you're welcome you're welcome

The next question is from Carlo Maritano of Interamonte.

Hi, good afternoon everyone. I just have a quick question. You mentioned during the presentation that Cert Europe is performing well. So I was wondering if you could provide us some more color on this company and how it's progressing after the change in CO if you're seeing an improvement in the trajectory compared to the past?

Yes, the Q1 sector was positive, both in terms of revenue and EBITDA, growing in the range of 10%, so this is absolutely positive. Definitely, it's not the most important quarter, but still, it's important to start very well compared to previously. Second, we improved our capability to put in the market offers on the new InfoSafe solution. So, as you may recall, we appointed later last year a new CEO. after the exit of the minority shareholder. And then, you know, we have just on board a new sales director. So we, you know, the company is very well organized, is already putting in the market in process solution, and we do expect, you know, the growth of the revenue coming, you know, to be, you know, pushed by the sale of new infrastructure. In any case, this is the challenge we have when we go abroad, and I think we are working in the right direction.

Carlo, do you have another question?

No, there's not. I think there's another last question, operator.

Yes, sir. Sorry, I apologize. The next question is from Russell Pointon of Edison.

Good afternoon, Adone and Joseph. Three questions from me, if that's okay. The first one, on business innovation, can I just be clear? So I understand that 5.0 has been delayed coming into the end of the year. And when you set your guidance at the start of the year, we knew that the deductibility rates were lower than what you anticipated. So was it just a reflection, therefore, that in the first quarter that actually the underlying volume growth decline was probably worse than anticipated because of those lower rates? Or was it just the delay of 5.0, which is as a particular one? My second question on cybersecurity, in one of the documents, you quote market growth rates for 2024 to 26 of 6%. When I look back at the Capital Markets Day presentation from the start of the year, I think when you combine the two numbers quoted for digital and cybersecurity, you were looking for, I think it was about 5% compound growth, 23 to 25%. So could you just talk about why it's slightly higher? Is it a different base or is it an acceleration in market growth rates versus what you had anticipated at the start of the year? And my final question, just a small detail. A searcher's revenue of, it was 5.6 million revenue in Q1. That's way more than double of what you reported in Q4, which was the first full quarter, I think, of its results. You did mention earlier there is some seasonality here, but I just wanted to get some feel for is that Q1 representative of the normal seasonality or has it just done a lot better than you anticipated in the first quarter? Thank you.

Okay. So, Russell, let me walk you through a couple of things. Let's explain again, Yai, so we get, you know, there's a couple of moving parts to explain the quarter, right? and they are the following. First item, we talked about transition 4.0, and as you correctly mentioned, the deductible rates are lower on a year-over-year basis. First point. Then we have an overall, and Otona was very clear on this, an overall different mix from the other revenue streams. So we're talking about what we've been investing in the last two years to diversify the top line. We're talking about energy transition. We're talking about training. We're talking about green. We're talking about ESG, okay? So that has an overall lower volume because, and this is the fact that we want to stress, we're going to touch upon it. Let me stress it again. When an entrepreneur falls into the new year, they have an overall budget that they need to deal with, right? So what happens then? What they do is they allocate their priorities. Their priorities will play out throughout the year. So if you look at the overall seasonality of BI on a like-for-like basis, it's always back-ended. It's usually Q3, end of Q3 and Q4. We've mentioned this for the last three years in a row. And this year, it will be even more pronounced because we also have another business that came on board, which is ABS, which, let's be very clear, will follow the same type of logics. Another moving part is transition 5.0. So the plan, the PNRR, states that 5.0 was supposed to come in, and it has come in, but it will show defects only in the latter part of the year. And what will those defects be? They will be the investment. Again, we go back to the budget of the entrepreneur that will have to play out what their priorities are and check that the overall investments will have to fall under the umbrella of energy transition, improving in terms of energy consumption and all that, and they always have to deal with their personal budgets, okay? Now, will it be obviously to the advantage of the entrepreneur to invest? Obviously, because they will get back the money that they will invest. Remember, we also were very clear on the overall deductible rate. The deductible rate on 5.0 can reach up to 40%. So in this type of situation, we expect the second half to be definitely an area where EBITDA Generation will be significant. Full stop. Now, you talked about CS growth rate. I think it's customary for specifically on the overall interim report that we give out a bit of color on what the market situation is. We have a guidance out there. We stick to our guidance. The market is probably higher or lower. It doesn't really matter. What we really want to be is grow with the numbers that we gave out to the market and we have confirmed that guidance. Lastly, you were asking about the shares. A share has its own seasonality. Q1, yes, it's a very strong quarter without any doubt. And in fact, if you look at Q1 versus the prior quarters that we had in the prior year, you see that Q1 is the best quarter ever, right? So what we expect is the overall delivery to happen as we are seeing. In this case, for Chef, 51 was a strong report, full stop. I don't know if, Odonna, you want to add anything.

This is important to keep in mind. So they delivered very well according to our expectations, and so we are happy because this is what we were expecting, and we will continue. like this. We are working to improve the pipeline to achieve new customers, but very important from the pure financial standpoint, they deliver a very, very strong Q1 that is what was in our calendarized plan.

Thank you for the answers. You're welcome.

Gentlemen, at this time, there are no more questions registered.

Thank you very much for sending the call, and we'll talk to you soon for Q2 results.

Thank you.

Thanks, everybody.

Bye.

Bye. Bye.