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Double-digit organic growth on revenue despite Covid-19, EBITDA margin as a percentage of sales more than doubled passing from 7% to 15%, cash conversion from operating cashflow to EBITDA equal to 117%, debt to equity ratio equal to zero, EPS grown by 559% to EUR 0,145, recurring revenue close to 100%

FINANCIAL HIGHLIGHTS 

IMPORTANT NOTE: THESE ARE THE ORGANIC RESULTS OF DHH. THEY DON’T TAKE INTO ACCOUNT THE DEAL WITH SEEWEB APPROVED ON 30 JUNE 2020 SINCE THE TRANSACTION WILL BE EFFECTIVE STARTING FROM THE END OF OCTOBER 2020. FURTHER DETAILS ABOUT THE CONSOLIDATED RESULTS INCLUDING SEEWEB ARE PUBLISHED IN THE PRESS RELEASE

  • OPERATING REVENUES EQUAL TO EUR 3,7 MILLION VERSUS EUR 3,4 MILLION AS OF 30 JUNE 2019 (+10%)
  • EBITDA EQUAL TO EUR 547 THOUSAND VERSUS EUR 242 THOUSAND AS OF 30 JUNE 2019 (+126%)
  • NET RESULT EQUAL TO EUR 215 THOUSAND VERSUS EUR 31 THOUSAND AS OF 30 JUNE 2019 (+601%)
  • NET FINANCIAL POSITION EQUAL TO EUR 2,41 MILLION, OF WHICH: EUR 2,66 MILLION (CASH EQUIVALENT); EUR 13 THOUSAND (CURRENT FINANCIAL ASSETS); EUR 98 THOUSAND (CURRENT FINANCIAL DEBT) AND EUR 168 THOUSAND (NON-CURRENT FINANCIAL DEBT)
  • OPERATING CASHFLOW EQUAL TO EUR 640 THOUSAND VERSUS EBITDA EQUAL TO EUR 547 THOUSAND – CASH CONVERSION EQUAL TO 117%
  • EPS EQUAL TO EUR 0,145 VS EUR 0,022 AS OF 30 JUNE 2019 (+559%)

Giandomenico Sica, Chairman of the Board of Directors of DHH, commented: “The results of the first half of 2020 are the consequence of the hard work done in these years – day after day – by all the team to improve the performances of DHH. This semester has been particularly meaningful for us, since we completed the transaction with our long term partner Seeweb, which will be effective in one month, bringing our entrepreneurial project into another league. Despite these good results and positive news, this is not a happy semester for DHH. We consider ourself lucky to be in an industry that has been resilient to Covid-19, but our thought goes to the hundreds of thousands of small and medium businesses that nowadays are struggling for surviving. We hope that their entrepreneurs and their collaborators may find the force to not give up during these hard times. 

Milan, 28 September 2020. The Board of Directors of DHH S.p.A. (“DHH”) (DHH.MI | WDHH21.MI) (ISIN shares IT0005203622 | ISIN warrants IT0005203689), the cloud computing provider of Southeast Europe, approved the consolidated financial statements for the first half of 2020.

PERFORMANCE OF THE GROUP

MAIN RESULTS H1-2020
(ALL AMOUNTS ARE IN EURO)
30.06.2020
30.06.2019
DELTA
REVENUE 3.719.855 3.380.922 +10%
EBITDA 547.381 241.903 +126%
NET RESULT 214.884 30.657 +601%

 

CONSOLIDATED KEY INDICATORS
(ALL AMOUNTS ARE IN EURO)
30.06.2020
30.06.2019
Debt to Equity ratio 0% 0% The percentage of debt to equity
Ebitda margin 15% 7% Ebitda as a percentage of sales
Net profit margin 6% 1% Net profit as a percentage of sales

During the 1H2020 the total consolidated revenue of DHH grew by 10%, mostly thanks to the introduction of new products in the portfolio companies and to the increase in the demand of cloud computing services. The relevant increase in margins – EBITDA margin as a percentage of sales more than doubled passing from 7% to 15% – is due to the organic growth coupled with the decrease in labor costs, as a result of the completion of the activities done after the acquisitions executed in these years aimed at increasing the efficiency in the portfolio companies. The cash conversion from operating cashflow to EBITDA is equal to 117%, thanks to the fact that the company sells recurring subscriptions to its cloud computing products, mostly paid in advance or with very good payment terms. The cash generation impacts the Net Financial Position in a positive way. In fact, despite the investments, the Net Financial Position is equal to EUR 2,41M, of which EUR 2,66M of cash.

DHH is focused on cloud hosting and cloud computing as a core business. Its revenues are approx. 903k EUR in Italy, 1M EUR in Slovenia, 1,1M EUR in Croatia, 314k EUR in Serbia and 306k EUR in Italian Switzerland. The consolidated EBITDA of the period amounts to 547k EUR and the net result to 215k EUR.

Business performance by country

MAIN RESULTS FIRST HALF 2020
(ALL AMOUNTS ARE IN EURO)
30.06.2020 30.06.2019 DELTA
ITALY 902.671 1.072.062 -15,8%
SLOVENIA 1.025.537 833.366 +23,1%
CROATIA 1.118.069 1.073.190 +4,2%
SERBIA 314.227 259.399 +21,1%
SWITZERLAND 306.117 114.448 +167,5%
TOTAL 3.666.621 3.352.465 +9,4%

The consolidated net financial position is equal to EUR 2.411.438, of which: EUR 2.663.693 (cash equivalents); EUR 13.209 (current financial assets); EUR 97.705 (current financial debt) and EUR 167.993 (non-current financial debt).

The net equity is EUR 7.793.756.

THESE ARE THE ORGANIC RESULTS OF DHH.
THEY DON’T TAKE INTO ACCOUNT THE DEAL WITH SEEWEB APPROVED ON  30 JUNE 2020 SINCE THE TRANSACTION WILL BE EFFECTIVE STARTING FROM THE END OF OCTOBER 2020. 

CONSOLIDATED PRO-FORMA RESULTS INCLUDING SEEWEB

The consolidated pro-forma results include Seeweb.
In the first table the current official results of DHH are compared to the pro-forma results including Seeweb in the group. In the second table the pro-forma results as of 30 June 2020 are compared to the pro-forma results as of 30 June 2019, so to show like for like comparison.

MAIN RESULTS 2020
(ALL AMOUNTS ARE IN EURO)
CONSOLIDATED
PRO-FORMA*
30.06.2020
CONSOLIDATED

30.06.2020

DELTA
REVENUE 9.096.004 3.719.855 +144%
EBITDA 3.534.304 547.381 +545%
NET RESULT 1.345.770 214.884 +526%

 

MAIN RESULTS 2020
(ALL AMOUNTS ARE IN EURO)
CONSOLIDATED
PRO-FORMA*
30.06.2020
CONSOLIDATED
PRO-FORMA*
30.06.2019
DELTA
REVENUE 9.096.004 8.401.509 +8%
EBITDA 3.534.304 2.941.573 +20%
NET RESULT 1.345.770 1.097.227 +23%

 * The consolidated pro forma is not audited by the audit firm.

MAIN EVENTS OCCURRED DURING THE FIRST HALF OF 2020 AND SUBSEQUENTLY OCCURRED

CODIV-19 EFFECTS 

Significant government action and intervention began to take place on 30 January 2020 when the World Health Organisation declared COVID-19 to be a global health emergency, which generally triggered the recognition of the broad economic effects of the outbreak in financial statements. The exceptional measures adopted by the governments of many countries to limit the spread of COVID-19 generated effects beginning from the end of March.

With regard to the DHH Group organization, local offices have not stopped its activities, strictly complying with safety measures set by local authorities and, wherever possible, with the smart-working policies being recommended for office-based employees, given that the safety and wellbeing of people is a top priority.
No significant events and transactions have occurred since 31 December 2019 relating to the effects of the global pandemic on Group’s interim consolidated financial statements for the six months ended 30 June 2020.
The following events took place on the dates indicated below:

1ST SEMESTER 2020

DHH announces that the Monthly Average Price was lower than the strike price, pursuant to Article 3 of the warrant DHH S.p.A. 2016 – 2021 Regulation, the Warrants were not exercisable from January 2020 to June 2020.

21 MAY 2020

DHH announces that the respective management bodies of DHH and Seeweb Holding S.r.l. (“Seeweb Holding”) approved the proposal of merger by incorporation of Seeweb Holding into DHH (“Merger”).

The exchange ratio of the Merger was established at 31.828,92 DHH ordinary shares with no par value and the same entitlement and rights as the DHH ordinary shares outstanding at the date of the Merger, for every € 1.000,00 of Seeweb Holding’s share capital.

The Merger is a reverse takeover as per Article 14 of the AIM Italia Issuers Regulation and Article 18 of DHH’s by laws and is therefore subject to DHH shareholders’ approval (which approval is in any case required under Article 2502 of the Italian Civil Code, the reverse takeover consisting of a merger). 

18 JUNE 2020

DHH announces that Giandomenico Sica, Executive President of the company, has entered into a voluntary lock-up agreement. In particular, subject to the effectiveness of the merger with Seeweb Holding (ref. press release, 21 May 2020), and for a period of 12 months following the effectiveness of the merger, Giandomenico Sica intends to commit to the DHH not to carry out, directly or indirectly, sales operations or in any case disposals that have for object, directly or indirectly, the shares he owns as of today (ref. 200.000 shares), not to grant options, rights or options for the purchase or exchange of the aforementioned shares.

30 JUNE 2020

DHH announces that the ordinary and extraordinary shareholders’ meeting of DHH has approved, in extraordinary sessions, the merger plan for the incorporation of Seeweb Holding into DHH, and, in ordinary section, “reverse take-over” transaction pursuant to Article 14 of the AIM Italia Issuers Regulation and Article 18 of DHH’s by laws. Also the quotaholders’ meeting of Seeweb Holding has approved the merger plan.

The above resolutions have been passed with the majorities as per Article 49, paragraph 1, g) of the Issuers Regulation approved by CONSOB Resolution No. 11971/99, for the purpose of the ‘whitewash waiver’ of the obligation (for the shareholders of Seeweb Holding, individually) to launch a public tender offer (OPA) on DHH shares.

In addition to the above, the extraordinary shareholders’ meeting of DHH has also approved some amendment to the company’s articles of association in order to align them with AIM Italia best practices.

10 JULY 2020

DHH announces that the minutes of the Shareholders’ Meetings of DHH S.p.A. and of Seeweb Holding S.r.l. that on 30 June 2020 approved the merger by incorporation of Seeweb Holding S.r.l. in DHH S.p.A., have been registered by respectively the Companies’ Register of Milan Monza-Brianza Lodi on 3 July (ref. DHH) and Frosinone on 10 July (ref. Seeweb Holding).

UPDATE ABOUT THE TRANSACTION WITH SEEWEB

On 26 August 2020 Seeweb entered into a financing agreement with Intesa Sanpaolo S.p.A. for an amount equal to Euro 2.500.000,00, aimed at supporting the company’s industrial development project. The financing agreement provides for a repayment in 72 months at a rate in line with market standards and with a hedging Interest Rate Swap starting from 1/09/2021. The loan is secured by a guarantee granted by the Central Guarantee Fund for 90% of the relevant amount.

The transaction with Seeweb is expected to be completed within the end of October 2020.

NEW VERSION OF THE COMPLIANCE PROCEDURES 

The Board of Directors of DHH resolved to approve an updated version of the compliance procedures, with reference to: (i) Procedure for the processing of privileged information and setting up and keeping of the insider register, (ii) the Internal dealing procedure and (iii) the Procedure for managing transactions with related parties, the latter with the favourable opinion of the Independent Director and the Company’s Board of Statutory Auditors, as represented during this meeting. The updated procedures will be made available to the public on the website of DHH.

“PMI INNOVATIVA” QUALIFICATION

DHH S.p.A. has been confirmed “PMI Innovativa” in the related section of the company register in Milan.

FURTHER INFORMATION

BDO S.p.A. as the statutory auditor of the Group, expressed positive opinion without any remarks on the consolidated half-year financial statement as of 30 June 2020.

The consolidated interim financial report will be made available on the company’s website at www.dhh.international.

The financial statements are attached: link

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