Another semester of double-digit growth (+38%) in revenues, with profitability increased by 44%. Strong cash generation, thanks to the business model grounded on recurring revenues and automatic payments. Industrial focus on the development of cloud GPU products for AI, Machine Learning and Deep Learning applications
CONSOLIDATED FINANCIAL HIGHLIGHTS – 30 JUNE 2023 VS 30 JUNE 2022
NET SALES EQUAL TO EURO 16,5M VS EURO 12,1M +37%
RECURRING REVENUES EQUAL TO 94% OF THE TOTAL REVENUES
EBITDA ADJ EQUAL TO EURO 5,4M VS EURO 3,7M +44%
EBIT ADJ EQUAL TO EURO 2,6M VS EURO 1,8M +40%
NET PROFIT ADJ EQUAL TO EURO 1,4M VS EURO 1,2M +16%
OPERATING CASH FLOW EQUAL TO EURO 5,6M VS EBITDA ADJ EQUAL TO EURO 5,4M – CASH CONVERSION EQUAL TO 104%
NET FINANCIAL POSITION EQUAL TO EURO 5,6M (DEBT), INCLUDING CASH AVAILABILITIES EQUAL TO EURO 10,9M
Giandomenico Sica, Chairman of the Board of Directors of DHH, commented: “During this semester, we have experienced a 38% growth in revenues. This achievement was driven by organic growth of 10% and the significant contribution of the acquisition of Connesi, which was completed in July of last year. It is worth noting that, over the course of this semester, Connesi has seen a 14% increase in revenues, improving its profitability by 24%. Furthermore, our Group’s overall profitability has increased by 44%, with an adjusted EBITDA margin exceeding 30%. This results from our ongoing commitment to improving the operational efficiency of the various companies within the Group and stabilising energy costs. We have upheld our commitment to pursuing revenues quality, meaning that a significant percentage of 94% of our revenues is recurrent and predictable over time. This provides us with strong visibility into the future. Additionally, our cash conversion, which measures the efficiency of converting operational cash flow into EBITDA, remains consistently above 100%. This achievement results from our business model centered around the sale of subscriptions and “as a service” technologies. From an industrial perspective, in addition to continuing to refine our existing activities and adopting incremental process improvements, we have successfully launched a new commercial offering based on the sale of GPU cloud services. These services are designed to support Artificial Intelligence, Machine Learning, and Deep Learning projects and are fully GDPR-compliant. We see tremendous potential in this market, with several pilot projects underway and plans to expand this line of business both in Italy and abroad. Regarding growth through acquisitions, in the first half of this year, we completed a significant consolidation operation with the acquisition of Misterdomain. We are actively evaluating new acquisition opportunities to further support the expansion of our Group, both nationally and internationally.”
Milan, 21 September 2023. DHH S.p.A. (“DHH” or the “Company”) (DHH.MI | WDHH21.MI) (ISIN shares IT0005203622), announces that today the Board of Directors approved the consolidated financial statements for the first half of 2023, prepared in compliance to international accounting standards (IAS/IFRS).
COMMENT ON THE RESULTS
The Profit and Loss Statement as of June 30th, 2023, reflects the variation in the consolidation area due to the acquisition of control of Connesi S.p.A. (along with its subsidiary, Aticon Srl) starting from July 1st, 2022.
The strong performance observed within the Group throughout 2022 has continued into the first half of 2023. This performance becomes even more noteworthy when examining the adjusted figures, which have been recalibrated to ensure a more accurate comparison of results.
The Group has reported significant revenues growth, both in terms of organic expansion, amounting to 10%, and through mergers and acquisitions, which contributed a 38% increase.
During the first half of the fiscal year ending on June 30th, 2023, the Group’s consolidated revenues totaled 17,1 million EUR, marking a substantial increase of 4,7 million EUR. Notably, a significant portion of this increase, approximately 3,5 million EUR, is attributed to the impact of the Connesi S.p.A. acquisition (including Aticon Srl).
The Group’s core business lines are centered around cloud hosting, cloud computing, and datacenter services. In Italy, the Group’s revenues reached approximately 11,7 million EUR, encompassing Tophost and Misterdomain, Seeweb, Connesi, and Aticon brands. In Slovenia, the Group generated 1,5 million EUR in revenues through Webtasy, Domenca, Domovanje, Si.Shell, and Hosterdam. Croatia contributed 1,5 million EUR through Plus Hosting Grupa, Studio4web, Plus Hosting, Infonet, Optima Hosting, and System Bee. MCloud and Plus Hosting brought in 0,4 million EUR in Serbia, Switzerland’s Artera brand contributed another 0,4 million EUR, and Bulgaria’s Evolink generated 1,6 million EUR.
The Group’s operating costs include all ongoing expenses related to the business’s day-to-day operations, encompassing selling, general, and administrative expenses. Notably, energy costs remained stable during this period.
Furthermore, the Group’s operating costs reflect a negative impact of 1,1 million EUR due to the IFRS 2 non cash effect of the Stock Option Plan 2022–2025, which received approval from the Board of Directors and was based on a valuation by an expert firm. The cost in question is regarded as a non-recurring expense; therefore, its influence is omitted from the calculation of the ADJ figures.
The consolidated EBITDA has reached 4,3 million EUR, showing a notable increase of 0,6 million EUR. This increase is attributed to both the changes in the consolidation area and the enhanced performance of the Group’s companies.
SIGNIFICANT EVENTS IN THE SEMESTER
26th January 2023: Tophost Srl’s Acquisition of Misterdomain
On January 26, 2023, DHH S.p.A. announced the acquisition of Misterdomain (https://misterdomain.eu) by its subsidiary, Tophost Srl. Misterdomain, a significant player in Italy’s web hosting market, with 31.000 domains, and around 500.000 EUR in turnover, will be fully integrated into Tophost. The transaction’s value is 700.000 EUR, paid in cash at closing.
15th March 2023: Webtasy d.o.o. Acquires Hosterdam
On March 15, 2023, DHH’s subsidiary, Webtasy d.o.o., completed the acquisition of Hosterdam, a Slovenian shared hosting and domain registration provider, for 25.000 EUR. This move aligns with the Group’s strategy to strengthen its presence in the Slovenian market. Hosterdam manages around 450 shared hosting packages and 1.360 registered domains.
BUSINESS OUTLOOK
The current strategic plan focuses on two primary areas for DHH: expanding DHH’s geographic reach and bolstering DHH’s market position. This encompasses web hosting, cloud computing, data center services, internet access industries, and supporting digital innovation and entrepreneurship within DHH’s current markets. DHH remains committed to its growth objectives for the upcoming year, driven by both organic expansion and the inclusion of Misterdomain and Hosterdam into DHH’s portfolio starting January 2023. Regarding DHH’s exposure to the Russian market, it’s important to note that DHH does not maintain direct customer or supplier relationships in these regions. DHH’s interactions are limited to general price fluctuations and increasing energy costs. Electricity prices have stabilized, yet the potential for further significant increases remains due to its inherent volatility.
While current energy market conditions have improved compared to the past, predicting the near future remains challenging for DHH. Nevertheless, DHH’s Group companies with substantial energy demands actively work towards specific agreements to mitigate these risks. The delivery times for electronic equipment continue to average around 180-210 days for DHH. To address this challenge, DHH has adjusted its usual technological update cycle, reserving new equipment solely for expanding DHH’s production capacity. Consequently, DHH anticipates no significant adverse effects on its ability to provide industrial services. Lastly, it’s worth noting that none of DHH’s customers currently face insolvency issues.
FURTHER INFORMATION
The approved data has been submitted to BDO Italia S.p.A., appointed audit firm, for their review.
The consolidated interim financial report will be made available to the public as per EGM regulations as well as on the company’s website at www.dhh.international.
INVESTOR RELATIONS
The Chairman and CEO of DHH will comment on H1 2023 results in a conference call to be held on 22 September 2023 at 3.30 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