Tinexta S.p.A.

Ladies and gentlemen, thank you for joining Tenexta's Capital Markets Day in Milan. The presentation is about to begin. Let me hand over to Joseph Mastragostino, Chief Investor Relations Officer of Tenexta Group.

Good afternoon and good morning to the folks connected from abroad. Thank you for joining Tenexta's 2024 results and 2025 outlook. Here with me today, we have Pirandrea Chevalard, Chief Executive Officer of Tenexta, Odone Polsi Group Chief Financial Officer, Danilo Cattagno, Infochats CEO, Andrea Vingolo, Visura CEO, Andrea Monti, Tenexta Cyber Managing Director, Emilio Gisondi, Defense Tech CEO, and Fiorenzo Bellelli, Warrant Hub CEO. Thank you for being here, and we're very pleased to have you here in our brand new state-of-the-art facility here in Milan. For the purpose of this slide, I will go over the agenda. On page three, you can see what we will be discussing today, starting from an executive summary. Then it will be Pier Andrea, who will go over fiscal year 2024 business highlights. Odone will give us a deep dive of the financials for 2024. I will give you the BU outlook of all the three business units and then all three of us will take a stab at strategy pillars as well as the 2025 outlook where Aldona will guide us through the guidance for 2025 and we'll have some prepared closing remarks. Let me, given that this is an official presentation, let me go over the disclaimer. The company presentation includes forward-looking data based on internal management assumptions that are subject to material changes, including changes to external factors beyond the group's control, management data when presented or identified as such. Business unit data are divisional and include intra-BU items, which are instead eliminated at a group level. For detailed information on Tenexa SPA, it is recommended to refer to the company's documentation, including the latest interim reports and the company's financial statements. As you all recall, Tenex is an industrial group and offers innovative solution, in particular in the digital transformation world. The group is active in strategic sectors of digital trust, cybersecurity, and business innovation. And as you all know, we are listed on the star segment of Borsa Italiana. You're all very familiar with all my all stones for in terms of the equity story. Even this year, we registered further growth, but let me deep dive directly on the main numbers for financial data as of December 31st of 24. Revenues came in at 455 million, growing 15% versus the prior year. EBITDA adjusted reached 111 million, growing 8% versus the prior year. Net profit on a reported basis was 25 million, while on an adjusted basis, it was 50 million. Still strong, the free cash flow at 42 million. NFP, which reflects the most recent acquisition, came in at 322 million, or 2.79 times the NFP over adjusted EBITDA, and that includes the pro forma contribution of DefenseTech as of January the 1st of 24. Let's give a nice glance to the different business unit. Digital Trust, bottom left, outstanding year. We reached 65 million in terms of adjusted EBITDA. 207 million was the revenue on a fiscal year 24 basis. growing respectively 19% and 14% versus the prior year. Another historical high in terms of margins, 32% was the EBITDA margin for 2024. I think the numbers speak for themselves. Cybersecurity, we grew 19% in terms of EBITDA adjusted. This includes also the contribution on a pro quota basis. That means as of August the 1st of 2024, in terms of defense tech, so we reached 18 million, and revenues went over 100 million at 106 million, growing 19%. Very strong was obviously the margin, thanks also to the contribution of defense tech. Business innovation on the right side of the slide reached 44 million of EBITDA adjusted with revenues that came in at over 150 million and the margin was mostly impacted on the different mix. Here, I think every year is important to highlight how the growth continues to be very strong. Revenues in terms of CAGR reached 20% from 2014 to 2024. Even more importantly, I think, is the contribution in terms of EBITDA, where the CAGR reached almost 26%. NFP, as you can see here, reflects the recent acquisition. and the leverage ratio came in at 2.79 times, but Odona will give you much more color in terms of also covenants and what else. On slide 11, what you see here is basically the cadence of the EBITDA. Even this year, the latter part of the year, in particular the second half, was very strong and was very, I would say, The overall weight was around 69%, as you can see. We registered almost more than all the first three quarters put together in terms of EBITDA. In fact, the fourth quarter EBITDA had a relative weight of 50%, coming in close at 55 million. Pier Andrea will go over the business highlights, and I'll leave the word to Pier Andrea.

Thank you, Joseph, and thanks to everyone who joined us today, both in person and via conference call. First of all, I wish to stress how important it is for us to meet the financial community during this meeting to discuss the main factors that characterized our financial performance, especially in a year when, and I wish to underline this for the first time in our group's history, we were not able to deliver our guidance. Before going over all the elements which influenced our results, let us turn to slide 13 to illustrate some key events of 2024. At the beginning of the year, we finalized two important deals related to expansion of our business innovation division. The first being the acquisition of nearly 74% of ABF Group in January with the aim to enter the French market for subsidized finance. And the second one relating to the acquisition of Lenovis. I think it's mandatory to start from ABF, and our knowledge that its performance throughout 2024 has not been in line with our expectations. Why? The reasons lie on a variety of external factors which were outside of our control. In particular, the political turmoil in France was completely unforeseeable and unpredictable. The frequent government changes. I remember that last year we had four different governments in France. The frequent government changes led to significant budget cuts and cancellation and approval of public financing tenders. I wish to stress the fact that such phenomenon was unprecedented and never registered in the last decades of France's history. All these things put together in a relatively short period of time made a notable impact on the company's performance and weighed down the overall group result for the year. Notwithstanding that, and to diversify our business innovation portfolio, in February 2024 we acquired the 60% of Lenovis, an Italian company active in strategic consulting and lead management. And we launched our advisory business line, which we expected to become a very important part of our offering, especially in the mid-corporate range, where there are plenty of greenfield opportunities. Our cybersecurity business unit also experienced some important changes. With the acquisition in April, we acquired the remaining stakes of Corvalde, Ciro and Swoskan and we integrated them in the following month in Tinexa Cyber. Furthermore, we decided to exercise the call option on the 40% of defense tech in June, which triggered a mandatory tender offer that was completed in November. Both these transactions aimed at establishing Tinexa as a comprehensive cybersecurity hub in Italy required significant reorganization effort in order to improve our level of efficiency. The focus needed on this adjustment and the changes in leadership that followed impacted on the level of delivery for this division. However, 2024 has also set the basis for some key regulatory tailwind which we expect will drive future growth in these divisions. For instance, the launch of industry transition 5.0 tax credit plan in Italy, which has been amended and improved at the end of 2024 in order to facilitate its implementation, as well as the introduction of the DOA and its two directives on a national and European Union level. As for digital trust, already Joseph said, the numbers speak for themselves. In 2024, the division recorded an impressive performance with an adjusted margin of 31% and hitting again its historical high, notwithstanding the microeconomic and geopolitical uncertainty and the challenges of an ever-changing environment. We are confident that our strong brand positioning, our presence in key markets like France and the UK, and the opportunity which will arise throughout the regulatory efforts to increase the level of digitalization in the European Union, the European wallet de-invoicing will allow us to maintain interesting level of growth which this division has experienced in the last decade. 2024 results were still very positive with overall growth revenues reaching almost more than 450 million euros or if you want 11% versus prior year. And EBITDA adjusted, as Jose mentioned before, posted an 8% growth to 111 million euros with an healthy margin of 24.4%. Let me add to that by saying how important it is to Fortinextra to maintain a strong identity as a group and create meaningful synergies across our divisions and business lines and nurturing a strong company culture with over 3,000 employees in 12 countries across the world. To conclude on this slide, I'd like to provide an update on the dividend which we will propose to this year's General Assembly. 30 euro cents per share for a total value of about 40 million euro, showing that we keep our commitments to provide the shareholders with satisfying returns. Moving on to slide 14, I would give some more insight on the key items on 2024. Notwithstanding positive growth in results, we decided to react in a timely manner and we have carried out an in-depth analysis on planning and goal-setting model to set the targets for the next years that are first and foremost achievable and that prioritize delivery in the future. Q4 was still a strong quarter on the overall company results, with an EBITDA adjusted of nearly 55 million euros, boasting a margin of more than 36%. As mentioned before, one of the main actions of 2024 was the important reorganization of cybersecurity business unit, following the incorporation of three subsidiaries under the Tinexa cyber umbrella. Furthermore, with the successful acquisition of Defense Tech Holding under Tinexta Defense, we will be able to expand the scope of our business, create the basis for meaningful synergies, and enhance our presence within the very promising public administration of space and defense segments. Turning to slide 15, I would like to take the time to analyze what went wrong in 2024 and what are the actions we are already taking in 2025 to resolve these issues. We have already reviewed ABF performance, which was mainly attributable to country-specific downturns. Given the unpredictable situation, we took close attention to analyze the company's order book and customer basis. And at the same time, we closely scrutinized the process application, cost analysis, and resource allocation to identify areas of improvement. Moving on the single business unit, starting with cybersecurity, the main issue Determining a slowdown in performance was the strong focus on the incorporation of UROs, Roscan and Corvallis under the next cycle, as well as the impact of the different revenue mix weighed down by an increase of the resale component. A lower operational efficiency in services leading to lower level of performance despite the opportunities we will know driven by growing market. In 2025 our objectives are clear and they focus on improving the integration of all services within the business unit, eliminate redundancies, optimize the mix between and the third-party services, and most of all concentrate on the reorganization of the sales and operations departments with the aim to promote and expand the development and knowledge of key employees. The business innovation division has also been impacted by significant changes in the Italian subsidized finance landscape. Namely, in 2024, the well-known reduction in deductible rates related to industry 4.0 tax credit combined with the delay in the implementation of the Transition 5.0 program were two of the main drivers of divisions' drop in performance versus the past, together with an increase in demand of low-margin activities. The main action we are taking in 2025 regarding this division refer to a shift in the business unit business model toward a comprehensive advisory framework integrating all business line combined with a simplification of the organizational structure focusing on delivery and higher efficiency, also with regards to employee responsibilities. Slide 16. Let me highlight the next need to strengthen its role as parent company, staying away from the mere concept of being and holding, and instead taking on a proactive approach to foster unified strategy across business unit subsidiaries to promote a one group identity. The next key duty as the head of the group, as depicted in the slide, is to provide the subsidiaries with the shared services in strategy, M&A, innovation, investor relation, just to name a few, at the group level, as well as coordinate the cross-functional departments such as HR, legal, external communication, and administration and finance. foster the development of a single company culture across the different businesses here are some some key elements of the one group model which we are putting in place intended to pursue for the future innovation which has always been one of the key pillar of our value proposition Our main objective is to monitor the market for new opportunities and promote innovation across the different parts of our group, leveraging on capabilities and synergies across business units. Advisory. As mentioned above, one of our 2025 goals is to establish an advisory-based ecosystem under the T-NEXA brand to satisfy the ever-evolving needs of our corporate customers of all sizes, leveraging on the increase in demand driven by an evolving regulatory environment. This integrated innovative framework will allow us to expand our customer base toward segments with high growth potential, such as the public administration sector. Internationalization, of course. The expansion includes also new potential market where we can successfully replicate the Tinexta business model, especially in the European Union. Integration and synergy. One of Tinexta's main strengths as a group is the ability to cross-sell and create synergies across the different business units. such as the concept of cybersecurity by design, which implies the potential of implementation of cybersecurity services in the digital trust landscape. The implementation of a single group strategy creates a fil rouge across the different business units, which can be beneficial for collaboration and synergies to create more value. One group. Ultimately, our objective is to establish the next identity as a unique group, leader in ICT markets at the pan-European level, with a strong unified strategy across a variety of strategic business lines. The scope of our presence at an international level is, I think, very clear. With acquisition, we completed in the past years, we are now present in 12 countries with... 38 subsidiaries, reaching an account of over 3,000 employees. Italy remains our primary market, representing around 83% of our revenues, but we have a significant development of reach outside of Italy, as we can see in the graph below. This growth in international revenues is the result of our effort toward becoming a pan-European player in the ICT industry, a growing market full of potential opportunities. To conclude, before leaving you to the numbers and leaving Ordone, I would like to provide some colors on 2025, which will be which will be on setting achievable goal. For that matter, the guidance will be an outstanding one. Revenues are expected to go between 12% and 14% versus 2024, 7%, 9% on an organic basis. EBITDA adjusted to increase by 15%, 17% versus 2024, 10%, 12% on organic basis. The leverage ratio is expected to land between 2.2 and 2.5, confirming the strong financial solidity of our group and its continuous growth. I will now leave the stage to .. Good afternoon, everybody.

And thank you to be here. So we went through a preliminary analysis Pier Andrea and Joseph on the figures, but like we said, you know, we had an year where we didn't achieve the target that we set at the beginning, but still, as you can see, we have a company that is overall growing and still growing a quite interesting base. Revenue came in excess of $450 million with the ABTDA picking 111 million euro at 24.5%. Net profit is down, driven by interest that impacted the company after the acquisition, as well as the PPA that we applied in terms of amortization. Let's move now to the P&L. I will try to go a little bit more in depth here. As you can see here, we have a comparison both on organic basis and on non-organic basis. Non-organic basis in terms of revenue was mainly driven by the contribution we had for the full year for ABF. for something less than 20 million euro and around 50 million euro from defense tech that is consolidated since August 24. Definitely the comparison in terms of margins between the two areas are very different. And also I think we have been impacted by the performance of RBF for the reason that Pierre-Andrea explained. As you can see on a comparable basis, basically the company on personal cost was able to keep the level of the previous year. It has not been easy to do that because on organic basis we went slightly down. while the revenue mix and the usage of third party was not aligned with our forecast. This is the main driver of the lack of profitability that we had, but still we are running at 24.4%. Again, I remind you that the impact of ABF has been strong. The 24.4% still is a very interesting margin, and then we work through the different business units to deeply analyze. One-off costs between EBITDA Adjusted and EBITDA were pretty big because we invested a lot in terms of M&A cost for running these two big acquisitions and on top of that we had some actions on the cost cutting through some incentivated layoff. The precession amortization grew mainly as for change of perimeter as we included there the new companies and we increased the level of amortization from the purchase price allocation of the company. Financial charges went up compared to the previous year. On operational basis, the balance of interest is up 6 million. If you consider that you invested more than 70 million in ABF and other 60 million in defense tech, so we are talking about... more than €130 million cash out that brought basically a difference of €6 million more interest. On taxes, we got the benefit from two things. The first thing is the patent box that we got on digital trust business. So we got a one-off benefit of €5 million. that in terms of cash will come in the future years, as well as, you know, what is called in Italy the affrancamento that we have done on guarantor. This led to more than 8 million benefit on taxes. As you can see here, the component related to No recurring items is quite important, like we said. And let's say I mostly address them during the presentation of the P&L. So we have the cost of no recurring costs for personal costs that we have here, no recurring service costs for the M&A activity. The amortization of the PPA came up to close to $25 million. So this is basically declining our intangible asset through the depreciation. And then we have also the $9.3 million benefit from the tax matters that I already explained to you. I will move on to the next page, and I'll try to deep dive on the different businesses. On digital trust, I call here both for Infosat and Isura, we have to say that the performance is more than outstanding. You know, here both the revenue increase on a pro forma basis, but I would say even more. the revenue of the growth of the ABTDA that on an organic basis went up 14% is a truly outstanding performance. The two companies are able to deliver a strong revenue grow, but also they are at the level of efficiency and continuous improvement that is definitely making the difference. And it's very clear that who is following us since years, especially now is probably 12 quarters that is delivering like this for this result. The company went up in most of the areas of activities at double digit rate. The only area that has the pace a little bit lower than the past was the online sales. And this was a partial, and also partially impacted the cash generation because the online sales are bringing cash up front. But nevertheless, you know, the online sales went up 1.7%. That's when we talk about 25 already, some action has been taken. Combined to this was two things, a really strong focus on costs, because both InfoCert and both Danilo and Andrea focus a lot on the cost efficiency of the company with some programs that were put in place and this what was helped to reach the design. During 2014 InfoCert and both Visura made strong investment in Caltex. Infocert went through a continuous improvement of the product usability integration of its platform and this has been a strong investment. This nevertheless the company was able to deliver the result. On top of that Visora worked for the last months of the year in a project that will be launched to the market before the end of the month. It is a new project for its customers that with the help of the, let's say it's a generative AI-based solution. Let's move to the cybersecurity. Here, let's start from defense tech. Defense tech has been consolidated only for five months. But still, the contribution to the group result has been very positive. The company delivered in the last five months a 40 million euro revenue with 4.8 million ABTDA. Definitely, this is not because the company was listed, so it's very easy for you to understand what what is going on basically in the last five months, they deliver almost 50% of the NBDA of the year. In terms of the former cybersecurity part, Yeah, the result was not what we expected. It's very clear the drop in term of profitability is not something that we were expecting. And there are a few reasons that draw to this result. First of all, the revenue mix. As you can see here, the revenue in services, that is the part that is driving the marginality, especially in the cybersecurity right now. We compensated the revenue with some sales of products, of proprietary products that went very well, helped to mitigate the result. But the resale of third-party products obviously negatively impacted the results, and this is the main reason of the drop of the profitability. We have to consider that the company already started to cut some costs, but was not enough to deliver results. The expected result. On the business innovation, the situation, as Pier Andrea mentioned, the situation was impacted definitely from some regulatory situation in Italy and from the political environment in France. It's very clear that the change of four governments in just one year ABF is working a lot in trying to file dossier on the France, the program that definitely has to go through the prime minister office. And you can imagine when you have a change of four prime minister office, it is basically impossible to achieve the results. As soon as we add some political stability, the company during Q4 delivers slightly better. But at the end of the day, the company delivered very low results that accounted for €90 million revenue with just only €3 million EBITDA. There is a part of business that the management is considering that is flowing into 2025 and we are expecting this business to come up during Q1. On the company was affected, as is mentioned here, you know, by acquisition that we have of Studio Fieschi, ABF, Lenovis, and Warren Funding Project. So, you know, the environment changed quite a lot and trying to put together all this company was not easy. Nevertheless, what's happening on the... transition 5.0 was definitely, so basically profitability and revenues coming from this part of business was zero, and this was one of the fundamental pillars of our 2024 plan. We had some other part of business that went well. For example, digital innovation business went well at the pretty double digit rate, but what's happening on the industry 5.0 combined with the declining rates of the 4.0 led to this result. Results at the end of the year, so was at 44 million euro with a decline compared to the previous year. In term of Balance sheet, obviously all the acquisition we have done during the year has reshaped a little bit our balance sheet. Capital invested went up to not far from 800 million euro, driven mainly from the acquisition, as well as we had some slight impact from the working capital. But this was mainly driven by tax and the fair tax asset that are following what I told you before. Net financial position. is now at 320 million euro, that is after all the acquisition well below three times, still in a very safe environment compared to the capability of the company to deliver cash flow. Shell order equity obviously went up because of the results of the year, but But the last year the company delivered almost 30 million euro dividends during last year. I will go now to page 28. I think we can skip here. In terms of ABTDA, obviously the main driver of the growth is linked to the acquisition that accounted on the net financial position for 222 million euro. It is the main driver of this growth. In terms of free cash flow, We have been impacted mainly by two things. The first thing is the CAPEX. The CAPEX called for 39 million euros compared to the 26 million euros the previous year. Especially the two projects in digital trust... And especially InfoChart in Missouri has impacted this result, but this has been one big performance at what we have in the guidance and the budget for the following year. It's much lower and back to the traditional rate of investment of it. On the networking capital, definitely we enter also into businesses like AVF and FastTech that has a very long cycle in terms of cash collection. Please, Joseph.

we're gonna start with digital trust and then go on with cybersecurity as well as the business innovation. On this slide where we're giving you a snapshot, we already went over the very noticeable results that were registered by the business trust division, outstanding numbers, great marginality, as we said. I think it's important to highlight now the positioning of InfoShare today at a pan-European level, right? The company grew tremendously in the last five to six years, but now we are very proud also to announce our placing with very noticeable names such as DocuSign and Adobe. On the bottom left, you can see how a relative part of InfoShare REVENUES COMPRISING OF DIGITAL TRUST MANAGEMENT SHOWS OUR POSITIONING AND I THINK THIS IS YOU KNOW KUDOS TO THE ENTIRE BUSINESS UNIT WHICH HAS DONE A TREMENDOUS JOB UH TODAY THE NEXT THROUGH INFOCHART IS THE GOLD STANDARD IT IS A GOLD STANDARD AT A PAN-EUROPEAN LEVEL WE ARE the only qualified trust provider that you can see at a pan-European level, ranging from obviously operating in Italy, France, Spain, Germany, and also in the UK more recently. We'll talk about Acercia because it has done also a very good job in the last year or so. As a reminder... the beauty of this business model is the quality of revenues. On one side, you have off-the-shelf revenue, which are by nature recurring, 100% recurring revenue. These are mostly, as you know, mainly subscription-based towards private individuals or SMEs. But more interestingly, I think, is the growing percentage also of enterprise solutions which is growing in terms of recurring revenue as well. Those are more the tailored custom solutions that they are towards the corporations. Some KPIs on the bottom, also to give you the sheer depth and size of InfoChat, 10 million plus users, 60 plus countries reached, and 5,600 corporate customers. On the right side, very promising market, 4 billion is the value of digital trust management, transformation management market in the EU. And about 400 million of those are in Italy alone, growing high single to low double digit in terms of CAGR from 2026. Let me move to, I think, some areas of digital transaction management that are very interesting, namely digital identity and e-voicing. Digital identity is extremely important. Pierre-André highlighted, obviously, the big news. There's a lot of fuss about the European digital wallet, and it will be implemented by 2027. But today, Infochart is at the forefront of innovation, moving as one of the only qualified trust providers that is going in that direction, together also with the company that we have in France, as you know, Certurov. Attributes will be an important part of the wallet. That means that qualified trust providers will have a pivotal role in Infochart. actually authenticating the documents and authenticating the data that will go within the actual wallet. And again, going to the forefront of InfoChert, the opportunity to develop a proprietary wallet that InfoChert has already launched. And we are the first movers in the market. We're seeing that also a lot of the competitors are watching with a lot of appreciation with what we're doing in the market. and this will be extremely important when it comes down to the interoperability of the upcoming European Digital Identity Wallet. Another area which I think is really interesting is e-voicing. E-voicing, which is mandatory in certain countries, I remind everybody that in Italy it was introduced back in 2018, It is now becoming mandatory at a pan-European level. We're talking about a billion and a half worth of the market, so extremely interesting growth trends. You can see them are all in the double-digit league. EU member states such as France, Spain, Poland, and Germany moving towards mandatory adoption and here we're actually utilizing the experience that we have back home in Italy to cross-border and utilize this experience abroad and therefore use economies of scale also in other European market. All these I would say parts of where we are by far, you know, ahead of the curve. Let me also spend some time talking about, you know, we named this slide from the basics to be spoken. Extremely important because today Infojet is the only probably fully integrated international player that we have at a pan-European level, comparing ourselves with big and large U.S. corporates. That means spanning from essentials, certified email, e-signature, digital ID, you name it, all the way to bespoke, right? The walk of services and the breadth and the sheer size of them are all tailored depending on the market, depending on the client. And you can see some of the most important blockbusters that we have here. The onboarding platform, top and go sign, I think need no presentation. Infochet is a key player, represents also a consolidator at a European level. Obviously, you can see where the geographies are. We always said that Italy is with Infochet the number one and largest player that we have out there. But there are other operators out there. There are operators in all those geographies that you see, the Nordics, Spain, Germany. So there's also another large player in Italy, as everybody knows. But InfoShare has a couple of, I think, peculiar aspects that none of them have, such as the depth and size of the product offering, the adaptability, and also the, I would say, the flexibility of the technology and the reliability of the technology. It can count on a very stable shareholding structure that, as you know, is obviously enhanced with INEXTA. And together with Vizura have done a tremendous job. And for that matter, Odone already had pointed it out. I think it's worthwhile talking about some of the strategic directives that Vizura has had, in particular with the introduction and the investment that we're making in generative AI. Together with Andrea from Visura, we discussed what we can say today, and this project is very interesting. It's named LexTel AI. It talks about utilizing and leveraging legal databases to help legal firms, legal offices, or legal councils in the research of data using artificial intelligence that can be very helpful in terms of efficiency, in terms also of time. No. Pressure and delivery. The project has three phases. Presentation that we're actually doing as we speak and has been very busy doing that. Presenting to the different national council of lawyers. There's a second phase which is usually early adopters, 150, 200 customers as a pivot plan. And then obviously there will be the go-to market and all the advertising that we will do. Great job, and we hope that there will be a strong opening of a new market, which is great revenues and great margins. Going forward, let me wrap up Digital Trust with this last slide. Taking integrated leadership to the next level, four major pillars, build on new revenue streams, fight digital trust commodization, which is I think the pivotal aspect of going to the next level, expanding the market and gaining efficiency, I will just touch upon the most important ones here. We're obviously concentrating on the digital identity wallet. I mean, that is the big game changer, and it is a great opportunity for InfoCheck and for all of the digital trust business division. Utilizing generative AI also on existing product offering is another element that can help in building up new revenues, and obviously working on, at a European level, to leverage, as we said, our experience that we have back home in other European countries. Fight commoditization means also utilizing e-signature in the document lifestyle management cycle, utilizing also certified messaging within international markets, the so-called go notice, very important. That means expanding what is our bread and butter in Italy, also in other jurisdictions. Expand the market, right? It's all about that. It means increased geographical coverage. I think I need not say more on that. There's always time, and there's always the opportunity to gain efficiency. As you all recall, we entered into a very important deal with Asherzia, and I think that the use of the so-called software factories offshore, both in Pakistan and in Tunisia, will help on reducing costs in terms of program development, but also creating economies of scale. Moving forward, cybersecurity. In terms of cybersecurity, there's a lot of news there. We complemented the offer with the acquisition of Defense Tech, which everybody knows is a strategic asset. It is part of the national perimeter on cybersecurity. It is a handful of companies, so it's a very explicit asset. Today, we are able to complement the offer. That means the traditional Tinexa Cyber Offer, which stems on four major pillars, advisory, product, implementation services, and managed security services, mostly geared towards the commercial and private sectors, while on the other side we have Defense Tech, which is operating mostly and entirely into the public administration and those areas that you see on the bottom. A lot of fuss is all about defense. space, transport, and finance. Market is still very strong, growing, you know, with the numbers that you see there, high single, low double-digit. I think, as Pierre-André mentioned today, there is a very important element that we need to highlight, which are regulatory tailwinds, right? The introduction of NIS 2, NIS 2, is a very great opportunity. On the bottom part of this slide, we're showing you who the top spenders are. At a corporate level, you have large corporates ranging from finance or financial institutions to telcos, manufacturing, retail, and corporate. Aside from that, we're pairing defense tech concentration on the public administration sector. Going forward, we said that there is a complete value proposition now more than before. So our potential is that of going and expanding in the mid-corporate and industrial and public administration. But I would like to concentrate on the bottom side of the slide. I mean, the market is asking us, what are the synergies, right? What are the synergies between defense tech and TNA? We highlighted four major areas. corporate product, data intelligence, access to the PA, and synergies with the digital trust. You can see who's doing what, what the contributions are coming from, and I think that there will be a lot to come our way, and there are a lot of tables to be conjunctually put together between DefenseTech and T-NEXT, and we're working very actively in creating, moving forward, these synergies. As I said, regulatory tailwinds are an opportunity. I know this is a very busy slide. I'll concentrate only on some key aspects. The key aspects are that as of January 25, NIS2 requires companies to adopt and implement cybersecurity strategy. That's the news. The critical areas are the ones that you see at the center of the slide. Cyber attacks are increasing every day. The market is very fragmented. There is low level of awareness and there are inconsistent level of resiliency. The areas are on the far left. You can see that they range from energy transport space all over. But the critical focus areas that NIS2 will need to cover are the ones on the right. So you're looking at governance, risk management, incident management, business continuity, third parties, vulnerability, and technical measures. So all these are covered today by Tenexa Cyber. we are actively reaching out as well as being reactive with our clients that are coming to us to ask what kind of services can we bring them? What can we actually offer them? And some of them are coming to us and we're actually proactively reaching out to others. So there will be definitely a very strong tailwind from regulation. Let me conclude the cybersecurity with the strategic outlook offering and operations, as well as people in governance. We are very aware that this year was a transition year, as we said. So we are focusing on improvement of the integration of the cyber services. Now the companies have been entirely integrated, but it's all about optimizing also the costs, both internal and third party related ones. In terms of people, they continue to be the number one asset of all business units here more than before. And we are focusing extremely hard on sales and operations department where we need to improve the efficiency there. But we are continuing on talent management as well as training programs, which become essential for growth in terms of people. Last but not least, business innovation. So I think we have extensively talked about business innovation. I'll concentrate on the key takeaway. The key takeaway has a name. The name is Industry 5.0. We talked about how the Italian consultancy market is still a very strong market, at least in specific areas. for example, strategy, for example, IT. But the key element, I think, is the switch between industry 4.0, which has come due, and industry 5.0. On the bottom right, I think that's the main focus of this slide, you can see how the deductible rates have been going down for 4.0, and are instead very interesting for 5.0, where they are reaching over 45%, and there is a great incentive in actually moving towards those incentives. From a strategic standpoint, business innovation has acquired a lot of companies throughout the years. The left side of the slide shows how polarized the services have been. With special subsidized finance and automatic subsidized finance taking the center stage, as you can see with the large bubbles on the left, we are moving towards an advisory-centric, one-stop shop business model where every customer, being it a private, a mid-corporate, or even a large client, can find the service that they need. 5.0, to go back to it, is the enabler. 5.0, industry 5.0 becomes the enabler. I think the market wants to hear some numbers here, and the numbers are very exciting. We talked about the deductible rates, which are an incentive by far, 45% historical high. The second most important is the limit of the smaller investments, which has been raised from 2.5 million now to 10 million. So all the investments up to 10 million fall into the deductible rate of 45%. That's a great accomplishment. The extension of the deadline, another important element, given the delay that we witnessed in 24, is now the deadline is April of 2026. And then the allocated amounts are very attractive, 6.3 billion. of which only 300 have been serviced. So there is a huge opportunity. And on the bottom, as you can see, the enabling factors are the four major areas, production efficiency, investments in renewable energy, upgrading skills, as well as fiscal investments. Let me close the BU's with the last strategic outlook slide. Three major priorities here in business innovation, unified room strategy, product offer innovation, people in sales. We're working very strongly on the full integration and a unique value proposition. We want to leverage our European cross-border presence to work all around Europe and utilize study centers in specific areas. And then I'll obviously concentrate also on the products that can be concentrated on the main corporate, but also expanded on the large corps. Let me leave the word now to Pier Andrea, which will go over very shortly on the last strategy pillars. Yes, just a few words.

Thank you, Joseph, for your analysis of our business unit. It was, I think, very, very interesting. I would like to take the stage again to discuss some pillars of our strategy, going forward at a qualitative level, reiterate what our priorities will be in this phase of our group's history. Just a few words. First of all, I would say that we are moving from a phase of expansion by M&A, which characterized the past few years, especially at the international level, towards a phase of integration. Our focus in this year and current year will be on solidifying a unified value proposition and strategy under the direction of the parent company across all the three business units, consolidating our positioning as a leader both in Italy and in foreign markets with the ambition to become an aggregator in ICT space. Our goal is to address the needs of a wide range of companies and different business sectors in the ever-evolving digital space, shifting toward an advisory-centric business framework, leveraging on synergies across companies, divisions, and business verticals. Lastly, but not for importance, our strategy will always be motivated by a strong focus on employee welfare and the positive impact on the environment and the communities we operate in. Joseph.

Last slide on the updates on ESG 2024 was a busy year. I think it's nice to say that in all the three different divisions, we completed 100% of the activities. Very strong with digital trust with 24 initiatives completed, cyber with seven, and business innovation with 19. Now I'll wrap it up too and leave the word to Adonit to give us the color on the guidance.

OK. Thank you, Joseph. Let's, before entering into details of these figures, definitely we put together this plan with, let's say, a realistic approach in terms of revenue. And I will work through the different business line in order to let you understand. This plan will be also paid with some action on cost. Definitely trying to achieve the results only on revenue, I think, is going to be very difficult. And so we put together in all the divisions, in all the business units, with different level of attention, as Andrea and Joseph several times recalled, operational efficiency. Operational efficiency is something that is key to achieve the profitability that is into this plan. Let's start business unit by business unit. Digital Trust, we expect the revenue growing in the range of 7-9%. You have seen that the profitability, the revenue grow of 24 on 23 on organic basis was 8.3%, so we are perfectly in line with that. In terms of ABTDA adjusted, we are not going to not continue to grow in term of profitability or MTDA margin, but these figures includes one of, let's say, the first year impact of the project that was mentioned before by myself and Joseph on the generative AI in this world. So this is the reason why for the first time MTDA is not growing faster than RM. We do believe that this outlook on this area is very solid, is very strong. The business unit was always able to deliver even better results. Cyber security here, if we look at the numbers like they are, is a little bit astonishing. But I will work through to let you understand what is going on here. Obviously, these figures are incorporating a huge amount The fact that defense tech has been consolidated in our books only for five months and next year will be for 12 months. Any case, as is in the bottom line, but you cannot read so I will try to explain. So we do expect a very strong growth in term of revenue from defense tech. It's part of the plan. It's part of the plan that was supporting our acquisition. And the revenue in excess of 20% for defense tech is also driven by the change of mix. So the change of mix that we are expecting that was already happening in the first part of the year, there's a higher component of products. The lower component of services is driving higher revenue growth, but still a very enjoyable 15% growth in terms of profitability. So this is the first part. The second part is on cybersecurity, the former cybersecurity business. We all know that our business is a combination of more traditional, let's say, IT and digital solution, let's put it this way, where we put together a plan in terms of revenue to be mainly flat, but trying to recover in terms of profitability and efficiency. This is the first part. On the pure cybersecurity business, we plan to grow in the range of 10, 12%. This is absolutely coherent with the expectation of the market of the pure cybersecurity, but also here, we have to put together also a little bit of more efficient operations to achieve the results we have here. The company already started before the end of 24 to put together this efficiency. And just to give you an idea, we are entering the new year with the lower recurring cost base. So this definitely will help to achieve the results. Let's move now to the business innovation. The business innovation for us now is the part where we have several businesses here. But as I put here together, the difference is going to be made and the plan is on top of the regular growth of some businesses. I talk about digital innovation, I talk about other businesses we have here, the internalization, the activity we have in Spain. The real key driver of the results is the 5.0. If we are able, we have been very clear to the financial community, if you are able to deliver that margin, we will achieve the plan. If we are not able to achieve, this is not. We know exactly. How many orders we have to get it. As of today, the backlog is 50% of what we should deliver. And on a weekly basis, we are updating this backlog. And we are confident to achieve this and the current status. So this is the main driver. For the rest, I think if we do operate aligned with what we have done in other businesses, then the 5.0 we do believe that this plan is gonna be achieved. ABF is a key point of our plan, where we discuss a lot with Pier Andrea on this subject. It's very clear, we have volatility here. It's a volatility driven by the environment, by the political environment. definitely now there is a stable government since a few weeks or months or weeks but still the level of success rate of the dossier filed and I would add also the timing to get the answer is still not at this stage. In our plan, we incorporated a difficult situation till June, July, and a normalization of the situation after the potential election that could occur in France. The election could not occur one year before the last ones. So expecting that we are going towards a little bit more normal situation, we incorporated in our numbers these results. The result calls for, let's say, quite important recovery in terms of revenue. We do expect to recover 8, 9 million revenue compared to the previous year. 20 of them should come for what we are not able to deliver by the end of the year and then the profitability should come because costs are there and then if the dossier comes with the SSS rate, this is the result. So it's very clear what we have to do. As Pier Andrea said, you know, The lesson was learned from the previous year. It's very clear to us. We have to be able to combine revenue growth and cost efficiency. If not, it's going to be difficult to achieve the results. But we have a position on the marketing. We have the assets. We have the capabilities. And so we strongly believe that the guidance... we are sharing with you today is gonna be delivered under the circumstances that we have shared. To complete the big mix of what I explained before, this is the guidance. So it's a guidance that still on revenue is expecting quite interesting organic growth in the range of seven, 9%, little bit of acceleration you know definitely what we have missed in 2024 on the 5.0 and the huge impact on profitability of the results what should come is impacting in a favorable way the result. Net financial position on ABTDA is expected to go down to in the range of 2.2 to 2.4 very easy to calculate this if you add that we are going to have more than 10 million in the reduction of capex and 10 million or lower tax paid. So 20 million are coming from there and then the increase of the EBITDA at this level is helping, will help us deliver this target, including the distribution of around 40 million euros of dividends. That means a 55% payout ratio that is a quite significant increase compared to the previous year.

Great. Closing remarks. Very quickly, focus on recovery. We said that extensively. Integrating recently acquired companies, come pan-European ICT leader, and nurturing a one-group identity. I'll close it there and leave the floor to Q&A. We also have our business unit heads, as you can see from the pictures, so you know who's speaking, who's in who's who. And I'll leave it to you guys for some questions.

Hi, thanks for the presentation. This is Chandra Sriraman from Stifel. Maybe a couple of questions. To start with, your 2025 guidance looks for a significant jump in organic growth. Just wanted to pick your brains in terms of your conservatism there. You mentioned a 50% coverage in terms of backlog already. Maybe how was it last year? How was it a couple of years ago? Giving a sense of that would be helpful. And related to that, on the cybersecurity side of things, there was a significant slowdown in summer and things have not really picked up. What are we missing here? The macro seems to be okay, at least on the cyber side of things. Maybe some more color on that. What are the key catalysts you're looking for recovery?

That would be very helpful. In terms of revenue of organic growth, like we said, it's really solid on digital trust. On the cybersecurity, I explain the nature of the two areas, what is going on. on the former activity we had and then with the addition of defense tech that is expected. And now I'm sharing with what I shared today with Emilio that the backlog is in excess of 40% growth at the beginning of the year compared to the previous year. So the plan on the area of defense tech is very solid, was already expected at the moment. So it was already predicted at the moment of the acquisition. But we entered the new year with 40% more backlog than the past. So this is the situation. On the area of business innovation is very clear. If you are able to deliver the margin that was built up by info chair management you know the revenue is good so basically we had the lack of important business in 24 and we have the business 25 so this is the driver of the jump that we are doing obviously like i said there is the expectation of a jump of 10 million euro revenue on abf that is the area where we have some volatility there but not driven by by us, but this is the expectation of, like I said, an environment where for six months it's gonna be tough, and for six months we do expect to improve.

Any other question?

Hi, Alexandra Sova from Equita. Thank you for taking my questions. Three on my end. The first one, maybe a follow-up on the guidance. So maybe a little bit of color of, so we will already see this acceleration in the first quarter. It's a question also considering the fact that the transition 5.0, of course, was amended with the budget law But since a lot of incentives, I mean, foregone incentives coming from last year, they will already, let's say, have an effect on your first quarter. The second one is maybe more on the midterm, on the business innovation division. Since, as you mentioned, the transition 5.0 will end up in April 2026, and is based on European funds, so the recovery fund, and the transition 4.0, the other pillar is declining in terms of total volume. So what next? Why do you believe this business unit could grow in Italy and also, of course, outside Italy? And the third one is maybe a curiosity since, Defense tech is also partially exposed to the defense sector. So if you already see or do expect some acceleration also from the defense part, apart from the pure cyber security business. Thank you.

I pick up the first one. Like I said, like you know, what is coming from the 5.0 is related to investments. So investments in the period of the year. So as most of the business or business innovation is expected to be. The orders, you know, we already collected 50% of the order we need to. We will continue to collect, but the revenue is expected to come later in the year. This for sure. Okay.

Hello, Alexander. The defense market grew because the strategy of defense tech is combined market the market grow because tour market grow because the Italian government decided to upgrade our budget in Italy the the response of this budget the most important program is the G cap The G-CAP is Italian and the USA and the UK and the Japanese fighter. This legacy market for defense tech, in the past, do you remember, this market is flat. But in the future, this market have a lot of question. how many budget in the europe european countries want to upgrade this year the next year in our plan uh we would like increase our plan in 10 percent of revenues is a prudential yes but i believe that in the future when the european budgeting is clear it's possible to upgrade our budget today's 10 another discussion is the space the space have a different market the italian space economy i have the pnr for the future And our growth is about 20%. But this increase is only for European growth or European market. Because the Italian market of the space is only the space economy. It's different. It's not space for government. And for space economy, The have the governance. Our have the governance. I think this is the question. Thank you.

Thank you for your question. It's a very good question. And we had a lot of discussion during the preparation of the plan. There is a slide that was showed before that when we were talking about business innovation, we talked about acquisitions to the Fieschi Warren Funding Project. Well, what we are doing here is trying to exploit other businesses very close to the traditional finance and grant businesses that may help us to continue to grow, even though this part of business, as of the current regulation, is expected to be. We invested three years ago in the digital innovation. And this part is going up from 17 million. Next year is going to be 23, 24 million. And we expect to grow at a very interesting pace. We have internally a division that is working on, let's say, ESG, sustainability, energy, and energy education that is expected we reinforce also with management it is expected to grow also we are even at a faster pace obviously the we put we acquire basically we put together a new company that is what I'm funding project that is working on on that is going to help a lot to grow also here. And on top, we do expect the ABF to continue to grow. So it's clear that it's going to be, if the rules are going to stay like this, it's going to be a reshuffle in terms of weight on the different parts of business. But still, we are working sincere to address the point that sooner or later, we expect very late, but sooner or later, we can. Also on this, we are already working now in order to recover efficiency as much as is possible in order to be able to lend, to have a softer lending in case this is going to happen. So we got the point. We know we are on the subject, but it's something that when it comes, we will be very ready on this.

I think we have a question from the audience. If you can open up the line from... Just a second. No, no. Question is coming from... I'm talking to the... Russell?

Hello, Joseph. Can you hear me? Yeah, we can hear you. Go ahead. Great. Thank you. I have three questions, I think. First of all, with respect to ABF, on slide 15, you talk about the... 25 action 2025 action plan and just be clear is that something you are actually in the process of doing or that's actually happened in terms of you know the looking at the order book customer base and i guess my question is you're guiding to revenue on that business now about 29 million versus the 30 in 2023 so what is actually happening are you Effectively looking at the proposals, the applications there and actually just trimming them down to say some are likely to be more successful and others are not. Is it effectively trying to have a greater success rate of fewer applications? My second question then is just generally in the outlook, you talked about limited M&A and obviously the balance sheet is a bit higher, the net debt to EBITDA is higher than it was. Just your general feelings on that and valuations in the market, is it a bad year to be not to be able to do much M&A given there seems to be lots of growth opportunities out there? And my third question on digital trust is, if you go back to this time last year, I think you were forecasting 10% to 12% growth for the next three years. You've done eight in 2024, and now you're guiding to 7% to 9% for 2026. So it looks like there's just a bit more caution there. I'd be interested in your views on that, please. Thank you.

I start from the AB Life question. You know, the company in 2024, in 2023 had a success rate of in excess of 70%. Driven by the situation, the success rate was 44%. We put together a plan where, like I said, expecting a better political situation in the second part of the year that is the most important. Overall, we are expecting a success rate to grow, but not to exceed 50%. So basically, we expect based on some actions that the management had put in place to enlarge the coverage of the market and the client and to increase the number of dossier to be filed. Also, we are expecting to grow in some other part of business that are, let's say, as of today, less relevant. and talking to some other businesses that are within ABF. So this is part of the drivers of the growth. Like I said before, there are at least a couple of million, in the range of 20 million EBITDA, that shifted from 24 to 25. So on a comparable basis, the growth Definitely here, we try to have a much more prudent approach. The plan of the management has been, I would say, even more aggressive than the plan that we are sharing today with you. And we are following me on a daily basis, calling what is the revenue today, yesterday, tomorrow, and something like that. And this is the situation. Like I said, the basics of the achievement of the plan are there. The volatility is higher than the other businesses. In terms of digital trust, I would say there have not been much cautious and Danilo can explain my much better than me that they continue to deliver 10% growth that is difficult but you know we have this one-off cost that is coming from the launch of Genentech AI. I leave to Danilo to explain a little bit on the growth of the business.

Good afternoon and thanks for the questions. We are in a likely segment of the market and I, to be honest, we are, if you want, taking advantage of some investment we made five or even eight years ago. In this moment, just to mention one number, we are serving over 200 banks in Europe and growing. We have more than 20 international patents and growing. So as you have seen in the slides presented by Joseph, size matters. In this moment, finger crossed, we are really shortly saw some significant tender all over Europe. And our brand to date is, let's say, quite well associated with the digital transformation. So definitely for 2025, but I'm really optimistic even for the future, this double digit growth that we have seen has been more or less always been achieved is in our reach.

Thank you, Danilo. I think there was another question from Russell regarding M&A. As Pirandre was mentioning, this year was mostly about integration. So we are concentrating on that. We have done a lot of deals. We did a defense tech deal. We did the ABF deal during 2024. So I think it's... and then August as well. So we did a lot. So this would be a year where we're gonna concentrate on making the money work at this point. And obviously if there's any opportunities out there, we're constantly looking at the market and we'll decide on a basis by basis basis. Any questions further from, yes, from the audience, Chandra.

Sorry, maybe just a follow up on margins. You're trying to re-vision your BI's business away from subsidized financing towards advisory. So should we assume that the margins of the last few years is very much behind us and there's a new reset of margin expectations going forward? And on a related note, Digital Trust, I understand that you're investing on GNI this year, what are the medium term margin expectations for digital trust?

Margin expectation for digital trust in 2025, I expect it to be aligned with the peak, historical peak, I'm trying to say. Joseph is saying, so we are going to keep the historical peak, but I know that Danilo is working very hard on the subject. So on this, to be honest with you, I think that trying to keep that level of margin also because it's combined with a very high level of cash conversion is very important to us. If we are talking about the margin on business innovation, for sure what's happening in terms of margin in the past driven by the mix is difficult to keep in term of ebtda margin in term of absolute value we are enlarging our offer adding some other businesses so we do expect in absolute term at least for 26 not to be impacted And in 27, let's say, we expect that the continued growth of other businesses will help us to continue to grow. But again, driven by the volatility of this market and what is going on, this is the strategy. It's very clear. We enlarge our offer. We will continue to enlarge the offer. And, you know, the feedback from the market are definitely positive.

You have any other questions? Yes, Andrea. So Pirandera stepped away because he had another meeting, so we'll see Pirandera later. Thank you, Pirandera.

Okay. Very quickly, on the role of the group, in particular on business innovation, we know that you are now very back-ended in terms of profitability in the last quarter. Will this year be more or less the same, or even be less, a little bit more? And as far as business innovation is concerned, the comparison basis is in this year's first quarter, second quarter, would be very favorable. Should we see some sign of recovery, although these are not important quarters?

Last year, it has been a week

You already anticipated first half. It's not going to be exciting, but we will see anyway some improvement compared to last year.

In Italy, the 5.0 is not changing the picture in Q1. That's for sure. In ABF, it should be better, but again, like Joseph showed to you, is a business where we have solid foundation for achieving the plan, but still the most part of the profit is coming from the second half of the year. And again, Andrea, As we are talking about small numbers, if I am going to deliver 4 million or 5 million, I can tell you I'm growing 25%. But at the end of the day, it's still 1.8 million out of 16 that I have to deliver. So obviously, it's very important to start well. They know how frequently we are speaking every week on the results of the company. But again, we have our plan. We have an action. I'm more focused on the action. If we are delivering the action on costs that we are going to do, the revenue that we put in the plan, exclude the EBF, should be very solid. That's the point. And you know us since many years, definitely the growth rate here, despite of the additional that is boosting significantly is definitely the most prudent that you have seen since ever. And I feel that not most prudent, most realistic, I would say.

Maybe to add one comment on 5.0, since you asked, 5.0 is a great opportunity, but it takes time to actually carry forward the activities. So we're very busy already in proactively reaching out to clients, and clients reaching out to us, identifying the need, and then bringing the filing on board. But it will take time. So it's not something that will be on-off, but it's more spread out during the year. Any other questions from the audience? Well, there are no more. Thank you very much. There are refreshments, so you can use the refreshment part and thank you for coming. Thank you. Bye. Bye.