Double-digit growth in sales, robust cash flow generation and strong net financial position with zero non-current financial debt, growing in cash availability despite the investments. Diversified product portfolio thanks to the addition of cloud computing and managed infrastructure businesses

Giandomenico Sica, Chairman of the Board of Directors of DHH, commented: “We founded DHH in 2015 with the goal of building the internet platform of the emerging markets of Europe. In these years, we executed 10 cross border acquisitions creating in this way the leading player in the Balkans in the web hosting and cloud computing industry. From zero, we built a group with more than 70 people and 100.000 customers spread across Italy, the Italian Switzerland, Slovenia, Croatia, and Serbia. In these 2 years of being a publicly listed company, we passed from a turnover of 3,96M EUR to 6,3M EUR (+59%) and from an EBITDA of  356k EUR to 534k EUR (+50%). In 2018 we focused on consolidation within the group and commencement of new projects within our current geographies. These new projects include the launch of Croatian “Sysbee” (March 2018), an internal start-up focused on managed infrastructure and venturing into the cloud computing business with the acquisition of Serbian “mCloud” (October 2018). In 2019 our goal is to make our position in the cloud computing industry stronger, growing both organically and through M&A activities. We are looking forward to the next future in front of us, developing our group on the strong belief that – as the African proverb goes – “alone we go faster together we go further”. In the framework of this global multicultural and multilanguage experience that we call DHH, we are strongly committed to building the next generation cloud computing player for the South of the world.

■ NET SALES EQUAL TO EUR 6 MILLION VERSUS EUR 5,3 MILLION AS OF 31 DECEMBER 2017
■ EBITDA EQUAL TO EUR 534 THOUSAND VERSUS EUR 531 THOUSAND AS OF 31 DECEMBER 2017
■ NET RESULT EQUAL TO EUR 101 THOUSAND VERSUS EUR 239 THOUSAND AS OF 31 DECEMBER 2017
■ NET FINANCIAL POSITION EQUAL TO EUR 2,6 MILLION (OF WHICH: EUR 2,7 MILLION CASH AND CASH EQUIVALENT AND EUR 95 THOUSAND CURRENT FINANCIAL DEBT AND no NON-CURRENT FINANCIAL DEBT) VERSUS EUR 2,5 MILLION AS OF 31 DECEMBER 2017   

Milan, 28 March 2019. The Board of Directors of DHH S.p.A. (DHH.MI | WDHH21.MI) (ISIN shares IT0005203622 | ISIN warrants IT0005203689), a tech company whose mission is to create the “Internet Platform of the Emerging markets of Europe”, today reviewed and approved the consolidated financial statements and the draft financial statements as at 31 December 2018, which will be resolved by the shareholders’ meeting of 30 April 2019.

PERFORMANCE OF THE GROUP

MAIN RESULTS 2018
(ALL AMOUNTS ARE IN EURO)

31.12.2018

31.12.2017

NET SALES

5.969.739

5.289.151

EBITDA

534.059

530.806

NET RESULT

101.388

238.958

During the financial year ended 31 December 2018 the total consolidated revenues of the Group are equal to 6,31M EUR. The Group is focused on web hosting services as a core business line and its revenues are approx. 2,04M EUR in Italy (Tophost and DHH Italia), 1,41M EUR in Slovenia (DHH.si), 2,06M EUR in Croatia (DHH, InfoNet, HostingIT and System Bee), 216k EUR in Serbia (DHH SRB and mCloud) and 238k EUR in Switzerland (DHH SWZ). In the consolidated profit and loss statement results related to mCloud doo are accounted only pro-quota starting from the date of acquisition (October 2018). The consolidated EBITDA amounts to 534k EUR. Comparing consolidated EBITDA as at 31 December 2018 to consolidated EBITDA as at 31 December 2017, there is a positive difference of 4k EUR.

THE GROUP CONSOLIDATED PRO-FORMA* RESULTS 2018

MAIN RESULTS 2018
(ALL AMOUNTS ARE IN EURO)

PRO-FORMA*

CONSOLIDATED

TURNOVER

6.162.905

5.969.739

EBITDA

840.771

534.059

NET RESULT

499.837

101.388

The consolidated pro forma is not audited by the audit firm but it has been checked for mathematical accuracy.

The consolidated pro-forma p&l includes the full results of the acquisitions made during the year, while the officially consolidated p&l comprises only the pro-quota results after the acquisition date of the new companies.

Furthermore, all direct and indirect costs related to being a company publicly listed on the Italian Stock Exchange have been deleted in the pro-forma consolidated p&l as at 31.12.2017, together with all direct and indirect costs related to M&A and extraordinary activities.

The consolidated pro-forma is unaudited and has been prepared:
• to have a comparable representation to the consolidated p&l;
• to have a description to compare DHH to its private peers, which are not listed and don’t afford this kind of costs.

MATERIAL EVENTS OCCURRED DURING THE FINANCIAL YEAR ENDED 31 DECEMBER 2018 AND SUBSEQUENTLY OCCURRED

2nd JANUARY 2018
DHH announces the change of the official domain of its corporate website: from www.dominion.it to www.dhh.international.
www.dhh.international is the new reference point for all the official communications with the market. This change is one of the actions that DHH put in place to enhance its brand awareness in the market.

FEBRUARY-DECEMBER 2018
DHH. announces that the Monthly Average Price is lower than the strike price, pursuant to Article 3 of the warrant Dominion Hosting Holding S.p.A. 2016 – 2021 Regulation, the Warrants are not exercisable from February 2018 to December 2018.

5th FEBRUARY 2018
DHH announces that the merger of Hosting IT j.d.o.o./Infonet d.o.o. (two subsidiaries of DHH in Croatia) was completed.

20th MARCH 2018
DHH announces that it has entered a Joint Venture Agreement along with Seeweb, a company that is providing cloud computing and datacenter services globally. The companies have entered the agreement with the joint aim of collaboration on the project entitled “CloudSeed – Startup Turnaround.” The project looks into supporting and investing in the start-up businesses that position themselves in the web hosting, SaaS and cloud computing industry.

30th MARCH 2018
DHH announces the launch of SYSBEE, a start-up focused on managed hosting and led by Zvonimir Gembec, former founder and CEO of Plus Hosting, one of the veterans of the internet field in the Balkans.

17th APRIL 2018
Dominion Hosting Holding S.p.A. announces that the merger of Infonet d.o.o./DHH d.o.o. (two subsidiaries of DHH in Croatia) was completed.

16th MAY 2018
Dominion Hosting Holding S.p.A. announces that the spin-off of DHH d.o.o. to establish a new company System bee d.o.o. was completed.

25th MAY 2018
The new GDPR regulation, the most important change in data privacy regulation in last 20 years comes into force requiring all our businesses to adapt and implement the new compliance procedures.

5th JULY 2018
The Board of Directors of DHH S.p.A. announces that Zvonimir Gembec, current CEO of System Bee D.o.o. (“Sysbee”) became a shareholder of Sysbee, which was previously 100% owned by DHH S.p.A.
Zvonimir Gembec entered into the ownership structure of Sysbee, subscribing (cash contribution) a dedicated capital increase of approx. 116.000 EUR, thus gaining 20% of the ownership of the company.

16th OCTOBER 2018
DHH acquires mCloud and enters in the cloud computing market.
In particular, DHH completed the acquisition of the 62% of the company for a total value of 195.000 EUR, with the option to buy the other 38% in 2 years, after the approval of the financial statements 2020. In parallel, DHH sold its fully owned Serbian company – DHH SRB d.o.o. Novi Sad – to mCloud at book value, with the goal of consolidating its presence in Serbia under a single company. mCloud started its operation in March 2018 and it doesn’t have official historical data. The valuation has been made on the historical data shared by the management team of mCloud and verified by DHH during the due diligence process.

3rd JANUARY 2019
DHH announces a change of shareholders, accordingly to article 17 – Rules for Companies. Seeweb Srl, in the framework of an internal reorganization activity, transferred its 360.000 shares of DHH (equal to the 25,352% of the social capital of DHH) to Seeweb Holding Srl.
The shareholding structure of Seeweb Srl and Seeweb Holding Srl is the same and in both cases, the majority owner is Antonio Domenico Baldassarra.

PRICE ADJUSTMENT ON DHH SWITZERLAND SA

In the framework of the agreement signed with Mr. Sergio Ravera on 12th May 2017 (ref. press release 5/12/17), DHH activated the procedure for the price adjustment on DHH Switzerland SA.

As a result of the activation of this procedure and of the subsequent dialogue with Mr. Ravera, DHH and Mr. Ravera agreed on a price adjustment of 190.000 EUR to be paid by Mr. Ravera with shares of DHH Switzerland SA. For the effect of this adjustment, as soon as it is executed, DHH will own 80% and Mr. Ravera will own 20% of DHH Switzerland SA (today DHH owns 60% of the company while Mr. Ravera owns 40% of the company). The adjustment will be executed by the end of April 2019.

DHH and Mr. Ravera signed also an agreement through which they have the option to buy (DHH) and to sell (Mr. Ravera) the remaining stake of Mr. Ravera in DHH Switzerland SA as soon as certain conditions mutually agreed by the parties are met.

RESULTS OF MCLOUD D.O.O.

As per the agreement signed with the shareholders of mCloud d.o.o. Beograd on 16th October 2018 (ref. press release 10/16/18), mCloud has reached the goals agreed by the parties related to the bookings of the company in 2018.

APPOINTMENT OF THE NEW MEMBERS OF THE BOARD OF DIRECTORS IN THE PORTFOLIO COMPANIES

DHH announces that the group has to renew the Board of Directors in its portfolio companies. DHH will analyse the candidatures and appoint the new directors accordingly to the by-laws of the different companies.

MERGER BETWEEN MCLOUD AND DHH SRB

In order to simplify the group organization and operations, following what already done in Slovenia and in Croatia, DHH resolved to merge the two portfolio companies mCloud d.o.o. and DHH SRB d.o.o. so to result in a single entity, more relevant and stronger in the market.

PMI INNOVATIVA

During 2018 DHH S.p.A. has been confirmed “PMI Innovativa” in the related section of the company register in Milan. The company has incurred costs relating to research, development and innovation, over 3% of the higher value between total costs and value of manufacturing.

DHH S.P.A. PROFIT/LOSS ALLOCATION

DHH S.p.A. as a single entity reported a profit of EUR 33.863,67. The Board of Directors proposes to the shareholders to allocate EUR 26.662,26 to the legal reserve and EUR 7.201,41 to the extraordinary reserve.

NOTICE OF SHAREHOLDERS’ MEETING

The Board of Directors delegated the President to convene an Ordinary Shareholders’ Meeting on 30 April 2019.
The Notice of Shareholders’ Meeting and the supporting documents concerning the items on the Agenda will be available within the statutory deadline at the Company’s registered office and on the DHH website: www.dhh.international.
Shareholders may view these documents and request copies of them.

***

CONSOLIDATED INCOME STATEMENT
(ALL AMOUNTS ARE IN EURO)

CONSOLIDATED
31.12.2018

CONSOLIDATED
31.12.2017

Net Sales

5.969.739

5.289.151

Other Revenues

337.202

68.809

Internal project

318.076

OPERATING REVENUES

6.306.941

5.676.036

Material costs

(33.891)

(26.412)

Services costs and use of third party assets

(3.593.747)

(3.197.962)

GROSS MARGIN

2.679.303

2.451.662

Personnel costs

(1.816.287)

(1.732.443)
Other expenses

(328.957)

(188.413)

EBITDA

534.059

530.806

Amortization and impairment

(361.420)

(180.618)

EBIT

172.639

350.188

Financial income (expenses)

(20.781)

(29.451)

Other non-operating income/expense

1.337

(1.346)

EARNINGS BEFORE TAXES

153.195

319.391

Income taxes

(51.807)

(80.433)

NET RESULT

101.388

238.958

relating to the shareholders of the Group

102.796

245.472

relating to the third party shareholders

(1.408)

(6.514)

 

CONSOLIDATED PRO-FORMA  INCOME STATEMENT

PRO-FORMA *
31.12.2018

CONSOLIDATED
31.12.2018

(All amounts are in Euro)
Net Sales

6.162.905

5.969.739

Other Revenues

49.191

337.202

Internal project

OPERATING REVENUES

6.212.095

6.306.941

Material costs

(33.891)

(33.891)

Service costs and use of third party assets

(3.244.419)

(3.593.747)

Personnel costs

(1.866.060)

(1.816.287)

Other expenses

(226.955)

(328.957)

TOTAL OPERATING COSTS

(5.371.325)

(5.772.883)

OPERATING INCOME  – EBITDA

840.771

534.059

Amortization and impairment

(193.749)

(361.420)

EBIT

647.021

172.639

Financial income (expenses)

(25.979)

(20.781)

Other non-operating income/expense

1.337

EARNINGS BEFORE TAXES

621.043

153.195

Total current and deferred income taxes

(121.206)

(51.807)

NET INCOME (LOSS) FOR THE YEAR

499.837

101.388

OF WHICH:

102.796

relating to the shareholders of the Group

473.276

102.796

relating to the third party shareholders

26.561

(1.408)

* The consolidated pro forma is not audited by the audit firm but it has been checked only the mathematic accuracy.

CONSOLIDATED NET FINANCIAL POSITION

CONSOLIDATED
31.12.2018

CONSOLIDATED
31.12.2017

(All amounts are in Euro)
A. Cash

(234)

(1.319)

B.Cash equivalents

(2.699.306)

(2.613.192)

C. Securities held for trading

D. Liquidity (A)+(B)+(C)

(2.699.540)

(2.614.511)

E. Current financial Receivables

F. Short-term bank liabilities

95.066

124.234

G. Current part of non-current borrowing

H. Other current financial liabilities

I. Current financial debt  (F)+(G)+(H)

95.066

124.234

J. Net current financial debt (I)-(E)-(D)

(2.604.474)

(2.490.277)

K. Non-current bank liabilities

8.930

L. Bonds issued

M. Other non-current liabilities

N. Non-current financial debt  (K)+(L)+(M)

8.930

O. Net Financial Debt  (J)+(N)

(2.604.474)

(2.481.347)

 

ASSETS
(ALL AMOUNTS ARE IN EURO)

CONSOLIDATED
31.12.2018

CONSOLIDATED
31.12.2017

Goodwill

5.468.645

5.462.952

Tangible fixed assets

304.061

350.722

Intangible assets

375.879

436.128

Non current financial assets

6.409

6.166

Other non current assets

1.364

2.457

Prepaid Tax assets

15.086

8.161

NON CURRENT ASSETS

6.171.445

6.266.585

Trade receivables

552.581

440.747

Current financial assets

0

0
Other current assets

72.365

72.079

Tax receivables

166.758

173.075

Cash and cash equivalents

2.699.540

2.614.511

Prepaid expenses and accrued income

465.721

424.515

CURRENT ASSETS

3.956.966

3.724.927

TOTAL ASSETS

10.128.411

9.991.512

LIABILITIES
(all amounts are in Euro)

CONSOLIDATED
31.12.2018

CONSOLIDATED
31.12.2017

Share Capital

142.000

142.000

Reserves

6.696.962

6.687.687

Retained Profit (Loss)

583.458

249.696

Year’s profit (loss)  relating to the shareholders of the Group

102.796

245.472

NET EQUITY PARENT COMPANY

7.525.216

7.324.855

Capital and Reserves relating to the third party shareholders

47.397

14.981

Year’s  Profit/loss relating to the third party shareholders

-1.408

-6.514

NET EQUITY TO THE THIRD PARTY SHAREHOLDERS

45.989

8.467

NET EQUITY

7.571.206

7.333.322

Non current financial payables

0

8.930

Severance reserves

15.233

11.792

Provisions for risks and future liabilities

10254,66

Other non current liabilities

Liabilities for deferred taxes

17.396

24.013

NON CURRENT LIABILITIES

32.629

54.989

Trade payables

379.345

440.610

Other current liabilities

201.305

319.444

Current financial liabilities

95.066

124.234

Tax payables

92.318

121.724

Accrued liabilities and deferred income

1.756.541

1.597.189

CURRENT LIABILITIES

2.524.576

2.603.200

TOTAL LIABILITIES

2.557.205

2.658.190

TOTAL LIABILITIES AND NET EQUITY

10.128.410

9.991.512

 

CASH FLOW STATEMENT

CONSOLIDATED 31.12.2018

CONSOLIDATED 31.12.2017

(All amounts are in Euro)    
A. CASH FLOW FROM OPERATING ACTIVITIES
Profit for period

101.388

238.958

Income taxes

51.807

80.433

Interest payables/(receivables)

23.453

(19.986)

(Capital losses)/gains from sales of assets

1. EARNINGS BEFORE INCOME TAX, INTEREST, DIVIDENDS AND CAPITAL GAIN/LOSSES

176.648

299.406

Adjustments for non-cash items that are
not accounted for in net working capital change:

361.489

200.439

– Allocation to reserves

4.600

20.455

– Amortization and depreciation of assets

247.279

178.927

– Permanent loss write-down

116.622

1.691

– Other adjustments on non-monetary items

(7.012)

(634)

2. Cash Flow before NWC changes

538.137

499.844

Changes in NWC:

(142.275)

394.115

– Decrease (increase) in inventories

– Decrease (increase) in customer receivables

(71.195)

72.988

– Increase (decrease) in supplier payables

(87.097)

78.130

– Decrease (increase) in prepaid expenses and accrued income

125.779

(3.451)

– Increase (decrease) in accrued expenses and deferred income

81.719

211.661

– Other changes to the NWC

(191.481)

34.787

3. Cash flow after NWC changes

395.861

893.959

Other changes:

(93.143)

(37.711)

– Interests collected/(paid)

(23.453)

19.986

– (income taxes paid)

(59.436)

(57.697)

– Dividends received

– (Use of reserves)

(10.255)

Cash flow from operating activities  [A]

302.718

856.248

 
B. Cash flow from investing activities
(Investments) disinvestment in tangible assets

(66.800)

(126.864)

(Investments) disinvestment in intangible assets

(24.931)

(796.683)

(Investments) disinvestment in financial assets

(202.758)

(556.255)
(Investments) disinvestment in non-capitalized financial assets

1

Cash flow from investing activities  [B]

(294.489)

(1.471.543)

     
C. Cash flow from financing activities [C]

Increase (decrease) current payables to banks

(29.168)

(69.504)

New loans (Loan repayments)

(8.930)

(627.068)

Paid capital increase

114.898

Treasury share sale (purchase)

(Dividends paid)

Cash flow from financing activities  [C]

76.800

(696.572)

Increase (decrease) in liquidity  [A]+[B]+[C]

85.029

(1.311.867)

Liquid funds at the beginning of the period

2.614.511

3.926.378

Liquid funds at the end of the period

2.699.540

2.614.511

 

INCOME STATEMENT
PARENT COMPANY DHH SPA

31.12.2018

31.12.2017

(All amounts are in Euro)
Net Sales

442.185

333.318

Other Revenues

288.012

TOTAL REVENUES

730.197

333.318

Service costs and use of third party assets

(409.966)

(322.259)

Personnel costs

Other expenses

(101.610)

(2.566)

TOTAL OPERATING COSTS

511.576

324.825

OPERATING INCOME  – EBITDA

218.621

8.492

Amortization and impairment

(168.326)

(823)

EBIT

50.295

7.669

Financial income (expenses)

4.918

4.784

EARNINGS BEFORE TAXES

55.212

12.453

Total current and deferred income taxes

(13.205)

2.572

NET INCOME (LOSS) FOR THE YEAR

42.008

9.881

 

NET FINANCIAL POSITION
PARENT COMPANY DHH SPA

31.12.2018

31.12.2017

(All amounts are in Euro)
A. Cash

B.Cash equivalents

(877.624)

(1.439.021)

C. Securities held for trading

D. Liquidity (A)+(B)+(C)

(877.624)

(1.439.021)

E. Current financial Receivables

(8.475)

(11.721)

F. Short-term bank liabilities

G. Current part of non-current borrowing

256.825

H. Other current financial liabilities

I. Current financial debt  (F)+(G)+(H)

256.825

J. Net current financial debt (I)-(E)-(D)

(886.099)

(1.193.917)

K. Non-current bank liabilities

L. Bonds issued

M. Other non-current liabilities

505.114

505.114

N. Non-current financial debt  (K)+(L)+(M)

505.114

505.114

O. Net Financial Debt  (J)+(N)

(380.985)

(688.803)

 

ASSETS
PARENT COMPANY DHH SPA
(ALL AMOUNTS ARE IN EURO)

31.12.2018

31.12.2017

Investments

5.351.224

5.313.720

Intangible assets

12.580

6.376

Non current financial assets

571.402

566.390

Prepaid Tax assets

5.822

6.580

NON CURRENT ASSETS

5.941.028

5.893.067

Trade receivables

529.157

195.608

Current financial assets

8.475

11.721

Tax receivables

150.977

134.650

Cash and cash equivalents

877.624

1.439.021

Prepaid expenses and accrued income

14.253

18.162

CURRENT ASSETS

1.580.486

1.799.163

TOTAL ASSETS

7.521.514

7.692.230

LIABILITIES
(all amounts are in Euro)
   
Share Capital

142.000

142.000

   Reserves

6.697.926

6.688.044

Year’s profit (loss)

42.008

9.881

NET EQUITY

6.881.933

6.839.925

Non current financial payables

Severance reserves

Other non current liabilities

505.114

505.114

Liabilities for deferred taxes

NON CURRENT LIABILITIES

505.114

505.114

Trade payables

88.870

59.837

Other current liabilities

28.342

22.920

Current financial liabilities

256.825

Tax payables

17.149

7.543

Accrued liabilities and deferred income

106

65

CURRENT LIABILITIES

134.083

347.191

TOTAL LIABILITIES

639.581

852.305

TOTAL LIABILITIES AND NET EQUITY

7.521.514

7.692.230

 

CASH FLOW STATEMENT
PARENT COMPANY DHH SPA

 31.12.2018

31.12.2017

(All amounts are in Euro)    
A. CASH FLOW FROM OPERATING ACTIVITIES
Profit for period

42.008

9.881

Income taxes

13.205

2.572

Interest payables/(receivables)

(4.918)

(4.784)

(Capital losses)/gains from sales of assets

1. EARNINGS BEFORE INCOME TAX, INTEREST, DIVIDENDS AND CAPITAL GAIN/LOSSES

50.295

7.669

Adjustments for non-cash items that are

2.222

823

not accounted for in net working capital change:
– Allocation to reserves

– Amortization and depreciation of assets

2.222

823

– Permanent loss write-down

– Other adjustments on non-monetary items

2. Cash Flow before NWC changes

52.517

8.492

Changes in NWC:

(301.866)

(23.239)

– Decrease (increase) in inventories

– Decrease (increase) in customer receivables

(333.549)

(51.906)

– Increase (decrease) in supplier payables

29.033

38.425

– Decrease (increase) in prepaid expenses and accrued income

3.909

(1.146)

– Increase (decrease) in accrued expenses and deferred income

41

65

– Other changes to the NWC

(1.299)

(8.676)

3. Cash flow after NWC changes

(249.349)

(14.746)

Other changes:

(7.529)

4.784

– Interests collected/(paid)

4.918

4.784

– (income taxes paid)

(12.447)

– Dividends received

– (Use of reserves)

Cash flow from operating activities  [A]

(256.878)

(9.962)

 
B. Cash flow from investing activities
(Investments) disinvestment in tangible assets

               –

               –

(Investments) disinvestment in intangible assets

(8.426)

(5.962)

(Investments) disinvestment in financial assets

(42.515)

(2.194.277)

(Investments) disinvestment in non-capitalized financial assets

3.246

(9.231)

Cash flow from investing activities  [B]

(47.695)

(2.209.470)

     
C. Cash flow from financing activities [C]
Increase (decrease) current payables to banks

(256.825)

New loans (Loan repayments)

508.721

Paid capital increase

Treasury share sale (purchase)

Paid capital increase

Cash flow from financing activities  [C]

(256.825)

508.721

Increase (decrease) in liquidity  [A]+[B]+[C]

(561.398)

(1.710.711)

Liquid funds at the beginning of the period

1.439.021

3.149.732

Liquid funds at the end of the period

877.624

1.439.021

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