Another semester of double-digit growth (+26%) in revenue, with EBITDA margin above 30% despite the macroeconomic situation and the increase in energy and related costs. Stable cash generation, thanks to the business model grounded on recurring revenue and automatic payments
FINANCIAL HIGHLIGHTS
- REVENUE EQUAL TO EUR 12,1 MILLION VERSUS EUR 9,6 MILLION AS OF 30 JUNE 2021 (+26%)
- RECURRING REVENUE EQUAL TO 96% OF THE TOTAL REVENUE
- EBITDA EQUAL TO EUR 3,7 MILLION VERSUS EUR 3,5 MILLION AS OF 30 JUNE 2021
- OPERATING CASH FLOW EQUAL TO EUR 2,8 MILLION VERSUS EBITDA EQUAL TO EUR 3,7 MILLION – CASH CONVERSION EQUAL TO 76%
- EARNING BEFORE TAXES EQUAL TO EUR 1,7 MILLION VERSUS EUR 1,8 MILLION AS OF 30 JUNE 2021
- NET CASH EQUAL TO EUR 0,9 MILLION, IMPROVED BY CA. EUR 1,9 MILLION DURING THE FIRST SEMESTER OF 2022
Giandomenico Sica, Chairman of the Board of Directors of DHH, commented: “During the first half of 2022 we recorded a double-digit – 11,50% – organic growth that, coupled with the consolidation of the M&A deals done in 2021, led to a 26% growth. Connesi, the B2B Internet Service Provider that we acquired a few months ago, has been consolidated since the beginning of July. It didn’t contribute to the results of H1-2022, while it will contribute to the results of H2-2022, thus further accelerating the growth rate of our group in the next semester. Worth of notice are 1) the very low level of CAPEX and 2) the focus on “revenue quality”, which means that 96% of our revenue is recurrent, with high visibility on the future. Despite the difficult macroeconomic conditions, and the consequent increase of energy and other costs, in the first semester of the year we managed to keep a healthy 31% EBITDA margin, growing margins by 7% YoY, with a cash conversion equal to 76% and an improvement of the Net Cash by ca. 1,9M EUR. In the second half of the year, on one hand we are working as usual to grow the business and to invest in new interesting companies, while on the other we are particularly focused on controlling the margins as we did during the pandemic peak, adopting a “wait and see” approach.”
Milan, 28 September 2022. The Board of Directors of DHH S.p.A. (“DHH” or the “Company”) (DHH.MI | WDHH21.MI) (ISIN shares IT0005203622), approved today the consolidated financial statements for the first half of 2022, prepared in compliance to international accounting standards (IAS/IFRS).
PERFORMANCE OF THE GROUP
| MAIN RESULTS H1-2022 (ALL AMOUNTS ARE IN EURO) | 30.06.2022 | 30.06.2021 |
| REVENUES | 12,1M | 9,6M |
| EBITDA | 3,7M | 3,5M |
| EBT | 1,7M | 1,8M |
REVENUE BY COUNTRY*
| MAIN RESULTS H1-2022 (ALL AMOUNTS ARE IN EURO) | 30.06.2022 | 30.06.2021 | DELTA |
| ITALY | 7.158.036 | 6.469.164 | +11% |
| SLOVENIA | 1.253.898 | 1.139.794 | +10% |
| CROATIA | 1.386.862 | 1.212.882 | +14% |
| SERBIA | 340.707 | 315.830 | +8% |
| SWITZERLAND | 408.448 | 437.250 | -7% |
| BULGARIA | 1.513.387 | – | n/a |
| TOTAL | 12.061.338 | 9.574.920 | +26% |
REVENUE BY SEGMENT*
| MAIN RESULTS H1-2022 (ALL AMOUNTS ARE IN EURO) | 30.06.2022 | 30.06.2021 | DELTA |
| IaaS | 5.175.830 | 4.567.168 | +13% |
| PaaS | 4.039.424 | 3.530.398 | +14% |
| SaaS | 211.757 | 141.076 | +50% |
| Datacenter & Networking | 2.208.452 | 854.337 | +158% |
| Managed Services | 336.713 | 416.432 | -19% |
| Other | 89.162 | 65.509 | +36% |
| TOTAL | 12.061.338 | 9.574.920 | +26% |
During the financial semester ended 30 June 2022 the total operating revenues is equal to 12,35M EUR, with an increase of 2,73M EUR; the increase referred to the variation of the consolidation area is about 1,62M EUR due to Evolink A.d., the total increase is +28,33% and +11,49% from organic growth without Evolink.
Recurring revenue (referring to the IaaS, PaaS, SaaS e Datacenter & Networking segments) is equal to 96% of the total revenue.
The group is focused on cloud hosting, cloud computing, internet access and datacenter services as core business lines, and its revenues are approx. 7,30M EUR in Italy (Tophost and Seeweb), 1,27M EUR in Slovenia (Webtasy with the brands Domenca, Domovanje, Si.Shell), 1,41M EUR in Croatia (Plus Hosting Grupa with the brands Studio4web, Plus Hosting, Infonet, Optima Hosting and System Bee), 341K EUR in Serbia (mCloud with the brands mCloud, Plus hosting), 413K EUR in Switzerland (DHH SWZ with the brand Artera and Seeweb Swiss) and 1,62M EUR in Bulgaria (Evolink).
Operating costs are the ongoing expenses incurred from the normal running of the business and include selling, general and administrative expenses. Nevertheless, in the first six months of 2022, the first few effects of the war in Ukraine were reflected in the interim financial statements, particularly in energy costs. Specifically, the costs related to the datacenter management went from 1M EUR to 2M EUR, partly due to the effect of the consolidation of Evolink and partly due to the increase in energy costs and related expenses.
As a result, EBITDA came to 3,73M EUR in the first six months of 2022, slightly higher than the figure of 3,48M reported for the first six months of 2021: with an increase of +7,19% and +3,46% from organic growth without Evolink.
EBT equals to 1,7M EUR in the first six months of 2022, with a decrease of 2,58% and +2,25% organic growth without Evolink.
As of June 30, 2022, the group employed 152 people (June 30, 2021: 94). The increase is mainly due to the consolidation of Evolink, which has a staff of 49 employees.
Net income is 1,2M EUR, with a decrease of approximately 900k EUR compared to the previous period. The net income of the previous period had however been positively influenced by the extraordinary impact of 837k EUR due to the deferred tax assets originating from temporary differences between the carrying amount of assets (Trademarks) in the financial statements and the corresponding values recognized for the consolidated financial statements.
The net financial position is equal to 0,93M EUR of liquidity, including 4,1M EUR of leasing payables relating to IFRS 16, while at 31.12.2021 the leasing payables relating to IFRS 16 were equal to 5,2M EUR. It includes group liquidity of 10,02M EUR and financial payables of 9,09M EUR. In addition, there is the impact of the advance payment of 942k EUR relating to M&A transactions.
The group’s liquidity increased by 6%. The group’s financial payables decreased by 13%, mainly due to the reduction in leasing payables.
The net financial position includes the impact of investments for the purchase of infrastructure, as well as non-recurring costs for the M&A activity and for the purchase of treasury shares.
BUSINESS OUTLOOK
The group confirms the plan for 2022 to focus the activities in two main areas: further geographic expansion and strengthening market position including both web hosting, cloud computing, datacenter services and internet access on one side and, supporting digital innovation and entrepreneurship alongside tech-communities in our current geographies on the other side.
As generally, the group confirms the growth for second half of the year, due to organic growth and both for expansion of the perimeter due to the entry into the group of the company Connesi S.p.A. from 1st July 2022.
The group is not directly exposed to the Russian market and does not have direct relationships with customers and suppliers in these geographical areas, except for general price increase and for increase in energy cost.
The group is constantly monitoring the general increase in electricity price started from second half of the 2021, and will take all measures to limit the risk of a possible reduction in marginality.
There are no particular situations of insolvency by parts of the group’s customers, there are no effects on accounting items of a valuation nature due to Covid-19.
FURTHER INFORMATION
The Board of Directors of DHH S.p.A. became aware of the precautionary renounce from beneficiaries of the assignment of the options of the “Piano Stock Option DHH 2022 – 2025” approved by the BoD on 23th May 2022. The waiver implies the unrecord of the Stock Option Plan cost under IFRS 2 in the half year report 2022.
BDO S.p.A. as the statutory auditor of the group, expressed positive opinion on the limited review on the consolidated half-year financial statement as of 30 June 2022.
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 1H 2022 results in a conference call to be held on 30 September 2022 at 3.30 pm CET.
Registration at this link: https://qo.mywebinar.com/kvsl-jdhr-spfg-nhjf
People interested in participating are invited to send any questions or topics of interest to the following email address: investor.relations@dhh.international
