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Operator: Good morning. This is the Chorus Call conference operator. Welcome, and thank you for joining the Full Year 2026 Consolidated First Half Results Conference Call of Sesa. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Jacopo Laschetti, Stakeholder and Corporate Sustainability Manager of Sesa. Please go ahead, sir.
Jacopo Laschetti: Good morning, and thank you for joining the Sesa Group presentation. Representing the group today are Alessandro Fabbroni, Group CEO; Caterina Gori, Investor Relations and Corporate Finance and M&A Manager; and myself, Stakeholder Relations and Head of Sustainability. Earlier today, the Board of Directors approved the consolidated financial results for the first half of the fiscal year 2026, ended October 31, 2025. The corporate presentation is available on the Sesa website and will serve as a reference throughout today's conference call. Alessandro will begin by providing an overview of the key business developments and achievements.
Alessandro Fabbroni: Good morning, everybody, and thank you for joining our group presentation. In the first half of 2026, Sesa started the implementation of the new '26-'27 industrial plant by evolving our data-driven digital market-oriented and people inspired platform for enabling the sustainable growth of corporates and organizations with a specific focus on organic growth and skills development in a challenging market scenario confirming growing demand for digitalization, Sesa has achieved its goal of consistent organic growth in revenue and profitability by strengthening our position in the key areas, catalyzing digital transformation such as cybersecurity, cloud, AI and automation, vertical and digital platform by enabling the value creation from our stakeholders. The group's transformation from a technology to a leading digital integrator has improved with investment focus on skills development and the adoption of the so-called digital enablers. In the first half of 2026 on a consolidated basis, Sesa achieved revenues and other income for EUR 1.6 billion, up by 12% year-on-year, and EBITDA for EUR 114 million, up 11.4% year-on-year, and the net profit adjusted for around EUR 50 million, up by 17% year-on-year. On an organic basis compared to the half year pro forma, including the first half 2025 data of Greensun, consolidated revenues grew by 5.5% year-on-year, EBITDA by 6.0% year-on-year, and group net profit after taxes adjusted by 7.6% year-on-year. The second quarter '26 alone, show a great acceleration in consolidated revenues, which achieved EUR 755 million, up 16% year-on-year compared to reported years and 9.4% like-for-like compared to pro forma, and an increase of operating EBITDA by 16.6% compared to reported figures and 8.4% compared to pro forma. With a group [ EAT ] adjusted increase by 30% compared to reported figures and 17% compared to pro forma. Consolidated revenues show positive contribution from all group sectors. ICT VAS, recorded EUR 939 million, up 2.1% fully organic with a great recovery compared to the decline in first quarter '25 with a down of 2.7%, driven by the high single-digit growth achieved in the second quarter, up by 8.1%. The positive November backlog trend up by 25%, will support positive trend for next quarters. Digital Green VAS reported EUR 210 million up by 26% compared to the first half '25 pro forma, driven by the extension of the double-digit growth achieved in the first quarter '26 and thanks to a strong performance in the copper market, driven by the increasing energy demand associated with digitalization and AI adoption, system integration and software sector reported EUR 420 million, up by 4% year-on-year, showing resilient performance despite the slowdown of demand in some made in Italy districts and the reengineering process affecting some business units. And finally, Business Services achieved EUR 74 million, up around 7% year-on-year, extending its entirely organic job driven by the development of applications for the financial services industry. Consolidated EBITDA increased by 11.4% year-on-year, up 6% in comparison with the pro forma reaching EUR 114.4 million compared to EUR 102.7 million as of October 2024, with an EBITDA margin of 7.1%, broadly stable year-on-year, thanks to the growth trend in the VAS sectors, both Green and ICT and the Business Services one. ICT VAS reported EUR 42.7 million, up 6.6% with an EBITDA margin equal to 4.5%, up from 4.4% year-on-year. Digital Green VAS recorded EUR 14 million EBITDA, up 30% compared to the first half '25 pro forma with a 6.7% EBITDA margin compared to 6.5% year-on-year. System integration achieved EUR 43.4 million, down 1.9% with an EBITDA margin equal to 10.3%, reflecting the reengineering operations in some business units of the sectors with an expectation of EBITDA margin stabilization FY '26 at similar levels to FY '25. Business Services reported EUR 11.6 million, up 6.6% year-on-year and 15.8% EBITDA margin stable compared to the previous year. In the second quarter 2026 alone, Business Services revenues accelerated with an 11% growth driven by the start of some multiyear contracts not yet translated into a positive impact on profitability. Consolidated EBIT adjusted amount to EUR 86 million, up 9.2% year-on-year, up 2.5% compared to the pro forma after depreciation and amortization for EUR 26 million, up around 14% year-on-year, and provision for EUR 2.7 million. Consolidated EBIT reached EUR 65 million, up 8.8% year-on-year after amortization of intangible assets relating to customer lists and know-how for EUR 17.5 million in line with the 2026, '27 industrial plant, net financial expenses show a significant decrease equaling 11% compared to first half '25 improving by 15.5% in the second quarter 2026 alone compared to the second quarter '25. Thanks to lower interest rates and the actions to enhance the group's financial management efficiency. Consolidated EAT adjusted amounted to EUR 50 million, up 17.1% year-on-year and 7.1% compared to the pro forma, reflecting the growth in operating profitability and the reduction in financial expenses. Group net profit adjusted reached EUR 45 million, up 13% year-on-year from EUR 40 million in the first half '25, up 7.6% year-on-year compared to the pro forma 2025, while consolidated reporting profit to reached EUR 34 million, increasing by 19.4% compared to around EUR 29 million in the first half '25, up by 5.6% year-on-year compared to the pro forma figures. In the period under review, Sesa Group selected its M&A investment and improved its payout ratio in accordance with the new industrial plan. Group reported net financial position as of October '25, including EUR 208 million of IFRS debt was negative. That means net debt for EUR 119 million improving compared to EUR 122 million compared to the pro forma figures. Following last 12 months investment for EUR 140 million, of which EUR 37 million in the first half alone, including EUR 80 million of M&A investments, of which EUR 23 million in the first half. And after last 12 months buyback and dividend distribution of around EUR 35 million, which EUR 30 million in the first half 2026. Now I give the floor to Caterina for presenting our M&A strategy and the main resolution of the last shareholders' meeting and Board of Directors of today.
Caterina Gori: Thank you, Alessandro. After years of significant M&A activities, our new FY 2026, 2027 industrial plan represents a strategic shift with a clear focus on simplifying the group and accelerating organic growth. We will capitalize on the capabilities and business model we have developed over the years to drive sustainable growth, supported by target CapEx in AI, automation and skill development to enhance efficiency, scalability and market penetration. As a result, annual M&A investments are expected to decline to around EUR 30 million, following a selective valid driven strategy, while CapEx is expected to be roughly EUR 50 million per year. In the first half of FY '26, we further strengthened our international presence through 4 strategic acquisitions, all within the SSI sector. Two M&As consolidated in the first half of FY '26 with total investments of approximately EUR 7 million. The first Visicon GmBH in Germany and SAP Consulting Specialists with EUR 5.3 million of revenue. And the second, Delta Tecnologías de Información in Spain, an AI-driven player in digital identity, we used 2 million in revenue. Both companies delivered EBITDA margin above 10% and 2 additional M&As with total investment of approximately EUR 7 million. Albasoft, a EUR 2.2 million software company, specialized in treasury and finance manager solution; and 4IT, a Swiss cloud and managed service company with EUR 9 million of revenue. Both companies will be consolidated from November 2025, delivering EBITDA margin above 10%. The deal structure is designed to ensure the long-term commitment of key people in target companies with an entry valuation of around 5x EBITDA, adjusted for net financial position and consistent with our standard approach. These acquisitions confirm our strategy. a selective approach to high-value M&A in Europe, together with continued strong investments in digital transformation areas such as AI, automation and digital platforms. As outlined in 2026,2027 industrial plan, we are fully commitment to generating strong cash flow and delivering solid returns to our shareholders. As demonstrated at our latest shareholder meeting on August 27, 2025, where we approved a dividend of EUR 1 per share, in line with the previous year with EUR 15.5 million distribution completed last September. A significant increase in the share buyback program from EUR 10 million in FY '25 to EUR 25 million for FY 2026 to further strengthen shareholder value by raising the payout ratio from 30% last year to 40% this year. The shareholder meeting on August 27, 2025, approved a new EUR 25 million buyback program structured in 2 phases. The first EUR 15 million phase completed October 9 and the second EUR 10 million phase beginning on November 6, 2025. Sesa held 142,706 treasury shares of October 1, 2025 and 246,868 as of December 12, 2025. Equal to 1.609% of share capital. Today, the Board of Directors approved the cancellation of an additional 157,522 shares, representing 1.03% on share capital which is part of the 1.609% treasury share mentioned above. And finally, the cancellation of treasury shares up to a maximum of 2% of Sesa share capital over the next 18 months. As of August 27, 2025, approximately 1% of shares has already been canceled. And today, we completed the plan of the cancellation of an additional 157,522 shares. Additionally, last October, we signed a binding agreement for the sales of the controlling stake held by DV Holding in Digital Value SPA subject to the fulfillment of certain conditions precedent, including Golden Power and antitrust approvals. Upon completion of the transaction, Sesa plans to disinvest a 6.6% stake in DV Holding for an expected gross amount of around EUR 11 million compared to an initial investment of around EUR 4 million. This transaction is expected to generate a positive impact of around EUR 7 million on [indiscernible] consolidated net profit. This investment is fully consistent with the 2026, 2027 industrial plan. which focuses on strengthening core activities and provides for the possible disposal of nonstrategic assets, in line with the disciplined and optimized approach to capital allocation while leaving us room to evaluate selected nonstrategic disposals in FY '26. I now invite Jacopo to present our ECG (sic) [ ESG ] results for the first half of FY '26.
Jacopo Laschetti: Good morning again, and thank you, Caterina. During the first half of the fiscal year 2026, we continue to focus on integrating sustainability in our strategy. monitoring at the same time, key ESG KPIs to measure progress and the achievement of the target set out in our sustainability plan. This approach allows us to keep a constant view on our environmental, social and government performance. and to guide our operational and strategic choices. Our sustainability plan for '26, '27 approved by Sesa Board of Director on last July, defines priorities targets and specific actions to integrate sustainability in our business model, contributing to the creation of long-term value for our stakeholders. The generation, long-term valuation, sustainability and digitalization continues to be the core pillars of our strategy, defining the group's purpose. In this context, we are also delighted to announce that we have retained the EcoVadis Platinum rating, the highest level in the assessment model, which recognizes the group's commitment and achievements in the ESG field. This milestone further confirms the strength of our approach and reinforces Sesa's position as a reliable and responsible partner for customers, investors and stakeholders. In terms of HR management, we are facing a phase of consolidation with an increased focus on work and collaboration, and the progressive integration of digital enablers in our organization and the way we work. After a great improvement of our human capital over the last 4 years in the first half of fiscal year 2026, we increased the headcount by 1.7% compared to April 30, 2025 in line with our strategic industrial plan. We continue to work to further improve our loyalty rate, reinforcing at the same time, our education, hiring and welfare programs. We provided specific measures to support parenting, diversity well-being and work-life balance, thanks to dedicated programs in favor of diversity and inclusion. Now I give the floor again to Alessandro for the final conclusions.
Alessandro Fabbroni: Many thanks, Caterina and Jacopo, I will now share the final remarks and conclude our session. Six months ago, we presented our new industrial plan aiming at group transformation by focusing on organic growth of core businesses, organizations streamlined, growing operating efficiency and market penetration by reinforcing our role as leading digital integrator and partner of the customers' digital transformation. In the first half of 2026, we worked strongly to deliver the main strategic targets of the industrial plan, driving organic growth across the group sectors, streamlining legal entities and in particular, adopting AI automation and digital enablers to boost operating efficiency, and group transformation both internally and towards our customers. Thanks to our strategy, we strengthened our position as a leading digital integrator with a strong focus on cybersecurity, AI, automation, vertical application and digital platforms for the business segment. In particular, in the first half of 2026, we achieved a mid-single-digit growth in revenues and profitability, driven by the great acceleration of the second quarter 2026 with revenues improving by 9.4% year-on-year, EBITDA by 8.4% and group EAT by 17% like-for-like. A 20% organic growth in both revenues and profit of Digital Green VAS fueled by strong business demand, rising energy needs resulting from digitalization and AI adoption. The back to growth of ICT VAS up by 2.1%, revenue, 6.6% in EBITDA and by 15% in group EAT, of which in the second quarter only, a growth by 8.1% revenue, 16% in EBITDA, and around 13% at group EAT level, and 6.8% organic growth in revenues and 15% growth in profitability of the Business Services sector, with a decrease in marginality during the second quarter only due to the start of several multiyear new orders with major customers. A significant reduction in net financial expenses has been achieved [indiscernible] down by 11.6% in first quarter 2026 and by 15.5% in the second quarter 2026, reflecting the ongoing recovery trend driven by lower market interest rates, and the efficiency measures implemented in full year '25. In light of our second quarter 2026 strategic achievements, and a disciplined way we have been executing in the new industrial plan, today, we confirm our commitment to deliver all growth targets we have outlined last July for the new fiscal year '2. That means 5% to 7.5% regarding of revenues, a 5% to 10% organic increase in EBITDA and around organic 10% increase in net consolidated profit confirming that we are on track to achieve our key value generation targets for our stakeholders. Considering the positive trend of our net financial position and cash flow generation, we have been delivering the planned 40% payout ratio by executing the new EUR 25 million buyback program approved by the last shareholders meeting and a 2% share capital cancellation. The goal for the remainder of the fiscal year is to execute with great commitment, the new 2026 and '27 industrial plan, in line with the targets and guidance we already communicated by focusing on organic growth, operating efficiency, the adoption of digital enablers and in particular, inspired by a corporate vision oriented towards sustainable growth and digital innovation. Thank you very much for your attention. Now we open as usual, the Q&A session.
Operator: [Operator Instructions] The first question comes from Aleksandra Arsova of Equita.
Aleksandra Arsova: One question on my end. Maybe some color on the guidance. So you seem confident to confirm the guidance, but maybe can you clarify which could be the elements that could potentially drive the guidance and the actual numbers, let's say, in the upper end or in the lower end? And then maybe, again, on the guidance in terms of EPS or net income adjusted that you said approximately plus 10% organic. If I remember correctly, in the original guidance, it was between 10% and 12%. So maybe just to clarify, where do you see this slightly lower expectation coming from?
Alessandro Fabbroni: Thank you, Aleksandra. So the full set of results that we achieved in the first half and in particular in the second quarter, show that we are absolutely on track to achieve the guidance. So that means considering the second quarter trends and the positive outlook on the backlog at the beginning of the Q3, we may consider the upper end of the guidance, the right target today. So that means not only for revenues and EBITDA, but also for net profitability. In terms of outlook, in comparison with the start of our fiscal year, we are absolutely overperforming in the ICT distribution on one hand and in the Digital Green. We are more or less in line with the Business Services. So that means that for 60% to 70% of our group perimeter, we are overperforming. We are slightly lower in the guidance in the first half for software system integration, but the improvement that we achieved in the second quarter and the outlook on the trend of the backlog seems positive. So that means we are on track to recover a positive trend in the second half of the year. So that means we may consider the average to upper end of the guidance, the reliable target for our fiscal year 2026.
Operator: The next question is from Andrea Randone from Intermonte.
Andrea Randone: I wonder if you can comment on the ICT VAS trend in the current quarter that is seasonally important. You mentioned the backlog up 25% in November. If you can comment on the trends you see if they are sustainable, consistent also for the remainder of the year. This is the first question. The second question is about CapEx. If you can confirm about EUR 80 million guidance, including M&A for the full year?
Alessandro Fabbroni: Thank you, Andrea. So first of all, about the trend of ICT VAS, we may confirm we entered very well in the Q3. We closed a very positive Q2 with growing revenues by 8.1%, an increase of EBITDA by 16% and around 15% in net profitability. We enter with a 25% growth in the backlog for Q3. So that means the beginning of December and in particular the month of November. So that is very positive indication to be able to work with a guidance of mid-single-digit growth for the full year. In terms of CapEx, we confirm our guidance of EUR 80 million investment overall, including EUR 35 million of M&A and EUR 52 million to EUR 55 million CapEx. In the first half of 2026, we invested around EUR 40 million of which more or less EUR 20 million in M&A. So that means we are on track for this kind of trend.
Andrea Randone: If I may, just a quick follow-up on SSI. Can you -- it's a normal question, but can you comment once again the implications from AI on this business line?
Alessandro Fabbroni: So yes, the AI automation represents a driver that we are embedding in each of our delivering and also inside software system integration that is sector mainly focused on technology, digital business integration with the mix of consulting, software and digital services. So what we are doing is to increase our efficiency to introduce AI in some delivering. For example, the cyber security services and to, as a result, increase our efficiency to make available this efficiency for our customers. Obviously, our exposure to AI erosion is not high, considering that we operating with proprietary software and technology and consulting services. And from our point of view, that is an opportunity more than risk to increase our EBITDA margin. And some of our investments will be focused on skill development and digital enabled adoption in that direction.
Operator: [Operator Instructions] Mr. Laschetti, at this time, sir, there are no questions registered.
Jacopo Laschetti: Thank you very much, everybody, for participating in this conference call and we wish you Merry Christmas, and we stay available as usual for any additional information about our results. Thank you very much.
Operator: Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.