DHH S.p.A. Half-Year Results – H1 2024

Financial Performance Overview

• Net Sales: Reached EUR 18M in H1 2024, compared to EUR 16,5M in H1 2023, representing a growth of 9%. This growth is attributed primarily to increased revenue in the Cloud Computing (+9%), Cloud Hosting (+7%) and Business Connectivity (+9%) segments¹.
• Recurring Revenue: Constitutes approximately 94% of total revenue, highlighting strong customer retention and predictable turnover.
• EBITDA²: Amounted to EUR 6M, up from EUR 4,3M, reflecting a significant increase of 40%, with an EBITDA margin of 33%.
• Earnings Before Tax (EBT): Stood at EUR 3,1M, significantly up from EUR 1,1M, showing a growth of 175%.
• Net Profit: Increased to EUR 2M from EUR 313K, marking a substantial rise of 541%, driven by revenue growth and cost optimization.
• Net Financial Position: Improved to EUR 3,6M of net debt, a decrease of 44% from EUR 6,5M at the end of 2023, due to operating cash flows and liquidity management.

Giandomenico Sica, President of DHH’s Board of Directors, comments: “We are pleased with our results for the first half of 2024, which marks the eighteenth straight semester of growth in our revenue, all of which was achieved organically. Our profits are growing even faster than our revenue, showing the strength of our scalable business model. We continue to focus on high-quality revenue, with steady, recurring income thanks to our technology as a service proposition, no customer concentration, and strong cash flow. We’re also happy with the launch of new products in areas like AI and video streaming, which have been well-received in the market. Looking ahead, we aim to continue this path, supporting our multidimensional approach to growth. While we focus on organic growth, we consider mergers and acquisitions a complementary strategy, which we pursued since the foundation of DHH. We are always exploring new opportunities and are in constant contact with potential targets. This includes companies in our existing industries, within our current markets, and across other EU markets.”

Milan, 20 September 2024. DHH S.p.A. (DHH.MI) (ISIN shares IT0005203622) announces that today the Board of Directors approved the consolidated financial statements for the first half of 2024, prepared in compliance to international accounting standards (IAS/IFRS).

FINANCIAL HIGHLIGHTS

Growth and Market Development:

• Consolidated Net Sales: Increased to EUR 18M in H1 2024 from EUR 16,5M in H1 2023, marking a growth of 9%. This increase is attributed mainly to:
  • A 9% rise in the Cloud Computing segment, contributing EUR 7M to total revenue (38% of total turnover) and supported by the new products’ double/triple digit growth (ref. Cloud Server GPU/NPU, video streaming for municipalities).
  • A 7% growth in the Cloud Hosting segment, accounting for EUR 4,3M (23% of total turnover).
  • A 9% increase in the Business Connectivity segment, contributing EUR 3,9M to the revenue (21% of total turnover).
• Geographical Performance: Revenue growth was noted across several markets, with increases of 11% in Croatia and Switzerland, 10% in Italy, 8% in Slovenia, and 4% in Serbia, while performance in Bulgaria remained steady.

Operational and Financial Efficiency:

• Consolidated EBITDA: Increased from EUR 4,3M in H1 2023 to EUR 6M in H1 2024 with an EBITDA margin of 33%. This improvement reflects the scalability of DHH’s business model, characterised by revenue quality, high client retention, and a focus on cost management. The improvement in EBITDA is further supported by stable operating costs and the absence of non-recurring professional services expenses that impacted the previous year’s results (ref. stock options plan).
• Consolidated EBT and Net Profit: Both indicators substantially grew in H1 2024. Consolidated EBT rose from EUR 1,1M to EUR 3,1M, while Consolidated Net Profit increased from EUR 313K to EUR 2M. This reflects the positive impact of higher EBITDA and reduced financial expenses. Like-for-like comparison – adj. net profit H1 2024 vs adj. Net profit H1 2023 – excluding the cost of stock options plan for 2023, marks a +41% YoY, from EUR 1,4M in H1 2023 to EUR 2M in H1 2024.

Operating Cash Flow and Liquidity:

• Operating cash flow remains strong, with a cash conversion rate that continues to support debt reduction efforts.
• The Group’s net financial position improved significantly, with net debt decreasing from EUR 6,5M at the end of 2023 to EUR 3,6M at the end of H1 2024, underscoring effective liquidity management and the group’s ability to generate cash.

Corporate Activity:

• No new acquisitions were made during H1 2024; all growth reported was organic, driven by DHH’s ongoing focus on enhancing its existing operations and expanding product offerings.

SIGNIFICANT EVENTS DURING THE SEMESTER

21 MARCH 2024: The Board of Directors of DHH approved the draft statutory and consolidated financial statements for the year ending 31 December 2023. These documents were slated for submission to the Extraordinary and Ordinary Shareholders’ Meeting scheduled for 29 April 2024 for approval and acknowledgment, respectively.

16 APRIL 2024: DHH received a notice of substantial shareholding change following the inheritance of DHH shares by Daniele and Marianna Vona, heirs of Enrico Vona. This resulted in each inheritor holding 16,73% of the company’s share capital, altering the overall shareholding structure.

29 APRIL 2024: The Shareholders’ Meeting, held via audio/video conference, approved amendments to the Company’s bylaws, including Articles 21, 22, 26, and 31, to align with regulatory changes. Additionally, the statutory financial statements for 31 December 2023 were approved, and authorization for purchasing and disposing of treasury shares was granted.

30 APRIL 2024: The Board of Directors assessed and confirmed the independence of independent director Andrea Arrigo Panato. This evaluation, in line with Article 6-bis of the Euronext Growth Milan Issuers’ Regulation, considered both quantitative and qualitative criteria approved by the Board on 21 March 2024.

3 MAY 2024: DHH sold 100.957 treasury shares to the “PIPE” fund, managed by Alkemia Capital Partners SGR S.p.A., at EUR 14,8 per share. Alongside additional shares acquired from other shareholders, the PIPE fund amassed a 4,73% stake, aiming to support DHH’s business development.

13 MAY 2024: DHH received notice of a substantial change in shareholding from Alkemia SGR S.p.A. The “PIPE” fund now holds 245.610 shares, representing 5,02% of the company’s share capital, further solidifying its position as a significant shareholder in DHH.

22 MAY 2024: The Board of Directors resolved to initiate the program for the purchase and disposition of treasury shares for a maximum value of EUR 1,5M, in execution of the resolution of the Shareholders’ Meeting of April 29, 2024 (“Program”). The Program started on June 3, 2024 and will end by May 7, 2025.

11 JUNE 2024: Launch of a groundbreaking Serverless GPU product designed for AI applications through the subsidiary Seeweb. This innovative product, accessible at k8sgpu.seewebcloud.com, leverages Kubernetes to provide scalable, on-demand access to thousands of remote GPUs, addressing the growing computational needs in AI model training and inference.

SIGNIFICANT EVENTS BETWEEN THE END OF SEMESTER AND THE RELEASE OF THE SIX-MONTHLY RESULTS

2 JULY 2024: Launch of the AI Accelerator product through the subsidiary Seeweb. This new offering is designed to enhance AI inference workloads by utilizing Tenstorrent cards, providing significant computational power and efficiency for AI applications.

16 JULY 2024: Launch of a new video streaming product for municipal councils through the subsidiary Evolink. This innovative technology is designed to enhance transparency and public engagement by offering high-quality live streaming of council meetings and other municipal events.

BUSINESS OUTLOOK

The Group remains committed to sustaining its growth trajectory, primarily driven by a focus on organic growth while maintaining controlled margins. DHH continues to explore external growth opportunities within both its existing markets and new markets across the EU, though the Group is not in a rush to pursue acquisitions, given the satisfaction with the current organic performance. Additionally, DHH is experimenting with new product offerings, particularly in the area of AI infrastructure, as part of its ongoing innovation efforts. There are no significant concerns regarding insolvency or revenue concentration within the Group.

EARNINGS CALL

The Chairman and CEO of DHH will comment on H1 2024 results in a conference call to be held on 27 September 2024 at 3.00 pm CET at this link: https://whereby.com/dhhspa.   

People interested in participating are invited to send any questions or topics of interest to the following email address: investor.relations@dhh.international.  

FURTHER INFORMATION

The approved data has been submitted to BDO Italia S.p.A., the appointed audit firm, for review. The consolidated interim financial report will be made available to the public as per EGM regulations and on the Group’s website at www.dhh.international.

The financial statements are attached:
EN
IT

1. A different categorization of segments has been introduced starting from January 2024: Cloud computing previously Iaas and SaaS, Cloud Hosting previously Paas, Business Connectivity previously Internet Access. The other category remained the same. The calculation of variation YoY has been made considering the new categorization also for H1 2023. ↩︎
2. In 2023, the operating expenses included a non-cash charge of Euro 1,1M related to the IFRS 2 accounting for the 2022-2025 Stock Option Plan, which did not impact the Company’s cash availability. This represented a decrease from the Euro 1,7M non-cash charge in 2022. Going forward into 2024, the company has not incurred and will not incur any further expenses related to this cost. ↩︎