[Company Representative] (GPI): The agenda includes an introduction on the performance during this semester from our Chief Executive Officer, Andrea Di Santo. It will be followed by a more in-depth detail comment on the economic and financial results of the group made by our General Manager, Matteo Santoro. We will conclude the event with a Q&A session, and I invite you to make your questions in the frame at the right of the screen. I will now yield the floor to the Chief Executive Officer, Andrea Di Santo, and I wish you a good view.
Andrea Di Santo: Over 60% of the group revenue, and essentially over 91% of the group's EBITDA. That is to say that the margins of the software is significantly higher, and it is in line with our growth for the strategic plan. A second very important plan is a loyal customer base.
Andrea Di Santo: Our customers remain with us over time, and we have a retention rate that is very close to 100%. This allows us to increase the rewards of our customers over time, increasing our profitability. The third element is the international expansion. On the bottom left, you see a significant data, as our General Manager will explain in more detail. We have a stability situation for the revenues, where we have a mix, an Italy and abroad mix, which is in favor of the abroad side, which is next to 30%. This was a choice that we made also in our strategic plan, and we are very happy about it. The last but not least pillar is the expansion of the margins, and there is the potential for further growth due to our growth strategy, especially abroad, that is scalable and has marginality possibilities.
Andrea Di Santo: You can see further data on the slide, and the important thing to say is that the situation regarding revenues is such as stable, but the EBITDA is of about 8% compared to the first semester of last year. So it's comparable to the growth of our revenues. Going on to next slide. We wanted to recall our portfolio products and the solutions we offer our customers. We have three pillars. The first one is called Solutions. These are solutions that are offered customers that need customized solutions. An electronic medical record is based on a product, but is so customized that it is more similar to a product. All these solution products follow this same line. Then we have products that are scalable, and we are scaling them at an international level. They are grouped in three areas. The blood area, which includes substances of human origin.
Andrea Di Santo: We have technologies both on transfusions and on the donor side, the diagnostics side, laboratory information system, imaging, pathology, and so on. A complete suite in the critical care area. This is our software powerhouse, which constitutes about 62% of our revenues. Then we have a strategic diversification area, which is marginal to the software side, because it includes care, which is our particular business, and it includes software to managing doctors' agendas, which is very relevant to managing calls. Going on to the next slide. I would like to say that this is a very important slide, according to me. This talks about our AI strategy. We are a business that has been on the market for over 40 years and offers clinical solutions. Our strategy then is to gradually increase our solutions, making them more functional thanks to the use of AI.
Andrea Di Santo: These functional increases are meant to strengthen and make more powerful the tools we give to the medical customers we have, to give more specialty to the patients. There is a debate in the healthcare world on this issue, and this is related to the time that doctors are dedicated to the administrative side. There is talk of administrative burnout, because if a doctor spends over 10 minutes preparing a report, they need a lot of time, and this is time they cannot dedicate to the patients. Here we have some examples. We have solutions. You can see, for example, the name Eleanor on our medical feature that allows the doctor to talk with the artificial intelligence that prepare a standardized feature, preparing using the language and the abbreviations they use. We made an experiment in an important hospital in Lombardy, and this yielded very satisfying results.
Andrea Di Santo: We also have our predictive model in Apulia for the neurodegenerative diseases. All these applications of the AI in the clinical field need to take into account three fundamental aspects. First of all, the ethical side. I think it is pretty easy to understand, but it is essential. We were maybe the first in Italy in 2025 to receive the certification covering this ethical side. Then we have the side of data sovereignty and governance, because when we apply AI, we also need to be careful about where our data are put into and how they are managed.
Andrea Di Santo: We are very careful about this, and we even thought of offering the market the possibility of putting the data in a specific line, and we were the first in Italy and in the world to do so. The third side is the LLM side. That is the AI agent that is used.
Andrea Di Santo: LLM is a large language model, and usually, LLMs are the application that is used for the empowerment. In short, we will launch an HRM that is specific for our domain, and this will give a quality on a better output. So we have a very clear, precise strategy, taking into account ethical aspects, data sovereignty, and that the LLMs have to be vertical to be more functional for results. Before going on to the results, a last comment on my side concerning our geographical footprint. At the moment, we are present in 18 countries, but we reach about 70 countries overall, and we have a division between public and private. This is pretty relevant. We talk both in healthcare and other clients. About 70% are specialized customers.
Andrea Di Santo: This is just to explain the fundamental aspects of our current positioning, what are the pillars, the software house products and solutions, our AI strategy, and our footprint. Now I will yield the floor to our General Manager. They will talk about what this is yielding in terms of results.
Matteo Santoro: Thank you. Hello, everybody. Thank you, Andrea, and thank you to our CEO, because this framework allows us to better understand the data that I will now present. Please show the first slide. Before giving an outlook on the numbers, I would like to express a bit some messages that represent the connotation of our group in these years, that are in line with our strategic plan. First of all, we are a software company.
Matteo Santoro: Even if inside our group there are also business lines that can seem unconnected to software, actually, there is a line between them. We are a software company, and we offer technological solutions. This is the connotation of our group. We are an IT company that is growing, and in Italy, it is the first player. It is about a third of all the networks in the country, and we cover a position in the market that is very interesting. At the same time, we are also working a lot abroad, because, on the other side, the world is growing, especially healthcare is covering a lot of space in Europe, together with our other reality, GP Berea, which is in Austria, and which follows the DACH word.
Matteo Santoro: Another important thing is that when we published the industrial plan, we announced we would have followed our reorganization path, because we have been growing in the last few years, thanks to over EUR 800 million investments and buying a lot of companies. But due to the speed of the market at the moment, we grew by evolution. We said that we had to integrate, and we developed a new operational model that works on more levels on the corporate side, on the job workflow side. We are incorporating businesses that we acquired over the years. We are reducing the sites, industrializing work processes to increase both EBITDA and margin, both in terms of quality and volumes. Because growth has to be generated with synergies, but this path will allow us also to give the company as an organizational structure capable of facing much more important growth already from 2027.
Matteo Santoro: This organizational model is already producing value, even if we are not yet in line with the aims that we put ourselves. We are already looking at 2027 with double-digit growth factor. Now, let's have a look at the financial data that have characterized the first semester. Revenue are at EUR 256.4 million, down 1%. It is not a pathological data. It is linked to a choice, because we had to think clearly about the model that we wanted to adopt to make our growth more scalable, because we have our customer portfolio that covers the whole healthcare world, going from electronic medical records to food safety and security. We have a bunch of reasoning about how we want to integrate these businesses that seem to be different, but they are strongly linked by the fact that they are all linked to the health and awareness of citizens.
Matteo Santoro: We decided to adopt and implement this new organizational model. We concentrated on the cost side. We reduced our cooperation with external providers. We focused our efforts in reorganizing our factories. We worked on corporate costs. In Italy, because abroad we continue to grow, in Italy, we generated economics and improvement in efficiency that allows us to improve our EBITDA. I expect some questions about the P&L, R&P&L, which has no impact on this, because the growth plans for this year were already decided, both in Italy and abroad, to support the healthcare system in a sustainable way, because this is a main system of the economy of our country. In the IT world, resources are growing year over year, and this is very important.
Matteo Santoro: The 3% growth in net income reflects the growth in income, but it is linked to our model that will be applied also to other countries. There is a growth from 18.1% to 19.9% of the EBITDA margin, and this reflects the results of our strategic plan. We had already advanced and we had already explained that we expected an increase in the EBITDA margin, and this is happening. We imagine that 2026 would have seen an impact in the industry of revenues. But we see that instead, we will have an increase in the H2 2026 because our results are better than we expected. Of this revenues quota, 26% is covered by revenues coming from abroad. The rest of the world rose by 27% in line with our plan. The rest of the world should reach about 30% of our overall revenues.
Matteo Santoro: Today, 37% of the revenues on the software side is coming from abroad. So EBITDA is positive, but we have a proper one loss in revenues, but this is not due to pathological reasons. We had to face this to start again with our new plan. Going on to next slide. We can see that the software is driving our results. It has a margin of 28.2% compared to the rest of the group. So the margins of software is growing, even if there is that up to 23% impact. Below, you can see the details of the two main business lines linked to revenues. The core one, software solutions and software products. As you can see, software solutions goes from 69% to 75%, and those are the solutions in the Italian market. Over the years in Italy, we were awarded a lot of important projects.
Matteo Santoro: We realize important projects with a higher volume to make the country more infrastructural. We delivered these projects, but more are coming. Only yesterday, a new tender was published. What we imagine is that the natural path will have a lot of growth in the recurring markets. So delivering large projects allowed us to increase our skills in this domain. Even if this is 75%, is now 69%, over the next years, we foresee recurring revenues and also new contracts. In our projections, there is no estimate about tenders that we may be awarded. Then we have software products that strongly drove the growth that goes by product lines. This allowed us to grow a lot abroad. So it went from 25% to 31%.
Matteo Santoro: In this reorganization process, the focus is on the efficiency that we are already acquiring, but also on the perspective of conquering a market that will be mainly made of recurring revenues. Now, let's see how the two business lines are going, and they seem distant from software, but in fact, they are linked. The first one is automation and ICT. ICT includes desktop management services, and these are the IT solutions that we offer customers and automation. They are about 18.6% of the margins, with about 1.5%, and 0.9% margin in the care side. So this is very linked to the clinical side, to the therapy side, and the logistics side. So, at the moment in our country, there is a concept tender that has not been awarded yet.
Matteo Santoro: That includes more people, more companies that will be awarded, and we are one of the main companies in Italy. This creates our expectations due to strong automatization sector that is growing. Here we have a connection, even if these businesses are not strictly linked, but the world of software, including therapies and quantitative measurement of targets, is simply linked with the software world. The other stream is a care stream. For us I always say that the software drives, and also in this kind of business, the software is driving the market. Because in the future, there is talk of a healthcare system that is more local, that takes care of the citizen, offers them care and therapies. For us, this is the main channel. It is software allows us to invest in the healthcare offer that is growing.
Matteo Santoro: The demand of services that is growing exponentially needs technologies to manage this curve so that the healthcare offer is also capable of satisfying the demand. Care is growing because today we are choosing where we want to expand our skills. Where the customer doesn't want to use new technologies, we also have certified solutions of AI on voice in call centers may make the difference to create more inclusivity and more productivity. But many customers don't have this sensitivity, so at the moment, we left our region. The decreasing care does not impact our EBITDA. The region had an impact that was almost next to zero. We are not running any risks because we have a close so that the new company that is replacing us takes care of everything we left.
Matteo Santoro: We were also awarded a very important tender that will be worth EUR 400 million. This will allow us to reach double digits in the next years. It's in an area where we are not very present at the moment, and this will allow us to have a positioning very important because when we talk about access to care, we are in an excellent position to deliver technological solutions that allows the entities to generate more values for everybody. So the care is decreasing due to our own choices because we closed some contracts that don't want to follow the innovation trend that is required from the market today. Going on to the next slide. This is the outlook of our financial situation. Fixed assets are reduced by EUR 30 million, in line with our plan because we reduced the assets by the amortization was higher.
Matteo Santoro: This is due to the fact that we chose to optimize. Net working capital is growing by EUR 42.5 million, and we see also this financial that is increasing. The next slide allows us to understand the situation even better. Here we see a bridge. We closed last year with a financial position of EUR 386 million, and we had an improvement in EBITDA of EUR 50.9 million. There is the impact of the NWC, which is due to the contract assets. in 2025, we reduced the old contract assets of about EUR 110 million, and we generated new revenue. This is due specifically to the Italian situation. In 2026, we have the same dynamic.
Matteo Santoro: In the first semester, we closed almost EUR 50 million of old FTA, but we generated almost the same because essentially aggregation of the demand, because in Italy, the procurement was once managed by the hospital, the entity that had some necessity. Now there are buying centers that publish new tenders that are worth EUR 500 million to EUR 1 billion, and they are awarded in a way that they are not in line with the needs of our customers. So, when a customer has a need and needs someone, a provider, this can generate delays. When there are new projects activated with a customer, there is a rigid and complex formula that is a double burden for us because these entities have some requirements to fulfill that are very rigid. This slows the times for receiving our payments. The invoices are generated late.
Matteo Santoro: Even if the payment times are respected and they remain six years, the times to receive the payments of the invoices are delayed. There are new. Now the procurement is divided to two components, who wins the tenders and who distributes the resources, and the final users. Something is not functioning, and there is also some activities in the works at a political level. But we believe that in the future, this situation will be improved because we see that very large projects with a lot of CapEx with closing timers of two to three years will be covered with recurrent revenues or other systems because we have been working on this side. We will overcome this problem. But the increase of the net working capital also is impacted by this factor.
Matteo Santoro: Also in the chain from EUR 396 million to EUR 428 million NFP, it is also due to higher cost of the providers because since sustainability is very important in this environment. In some cases, we have to pay in advance some providers that have financial difficulties. Then we see that the debt is increasing due to the payment of taxes. We also have CapEx that this year remained constant compared to last year, even if the EBITDA is growing. We have CapEx that are tangible, linked to the creation of our headquarters and investments made in Italy. We have an automation component related to the creation of robots that manage medicines destined to oncological treatments. This is a market that is in high expansion. Then we have a net interest of EUR 11 million. So, our net financial position is of EUR 425 million.
Matteo Santoro: What we can say is that compared to the end of the last year, we foresee positive situation because economic results are there, but our customers need to close their balance sheets. So, we mainly invoice in the last two, three months of the year, so we will have an important impact at the end of the year. So we will reconcile and generate more cash in the last part of the year. The situation is generally positive, and we expect important improvements in the second semester, also linked to the release of the evolution of platforms that is foreseen in the second semester.
Matteo Santoro: We are working on the 2027 budget. On the other side, we expect a double-digit return on our growth because the operative model was implemented, cannot but improve. It will be expanded and scaled also in other countries and in the rest of the world that are already focused on the growth of products that generate more growth. The markets abroad pay with other timeframes completely different from the Italian market. I think I have concluded the financial side.
[Company Representative] (GPI): Thank you, Matteo. Thank you, Andrea. Now I will ask you the questions that we received. Matteo, you cannot relax because the first question is for you. You have in part already replied, but I ask the same. Concerning Care4Us, is it possible to give more details on the strategic area? Is the decreasing revenues due to the timeframe of the contracts? Another question to this is, will the level of revenues and the margins somehow normalize once the transition of the new contracts will be completed? Can you answer, Matteo?
Matteo Santoro: Yes. As I have anticipated, concerning Care4Us, we are moving on to another actor. The first one is this investor where customers are not sensitive to the use of technology because technology today allows us to improve productivity. So, the decrease you have seen is due to a choice not to go on. We were talking about a contract that we awarded 5 years ago. We stopped with that contract because we saw that the customer had no will to understand how the market is evolving. We have also won an important tender with a EUR 400 million contract with a double-digit growth.
Matteo Santoro: This is a great occasion for us because on the one side, software allows us to create an infrastructure and offer solutions on the offer side. We understand that the real issue is the demand because we do not need more doctors, but we need systems where software is really helping. The system can be resolved only when the citizen is taken care by operative centers where we are already organized. So this will allow us to understand if it is possible to follow this path. Otherwise, we will follow other choices. Care4Us is a strategic system to look at the medium to long term, how the management of the chronical patients can be managed to avoid that everybody addresses the hospitals. There is another question on other Care4Us. Consider the relativity is lower than the average of the group. The positioning of GPI is always targeted abroad.
Andrea Di Santo: Do you believe it is possible to leverage the software? There are two sides to consider. The first also has a strategic value, as Matteo said lately. The other one is that assets must be valued. At the moment, we have margins that are not excellent. These are typical pieces, but we confide that the tenders that we are being awarded and the better selection, the choice of getting out of some contracts that had lower margins and enter into new contracts, will allow us to have a better relativity. Then we will be able to think about, even if at the moment it is not the order of the day, but we are thinking about this at the moment.
[Company Representative] (GPI): Thank you. Andrea, for you also the next question. This concerns software. Can you comment on the trend of growth in the revenues in H1 2026 and delineate the expected drivers for H2 of the year?
Andrea Di Santo: 2026 was the year the implementation of the operating model. Clearly growing as we are changing, and then changing the performance of Care4Us, just to give an example, while you are changing the engine is pretty complicated. In fact, we concentrated more on the margins. The expectation, as Matteo said before, is that this will change. It will change more abroad than Italy, because abroad will continue to grow double digits, and we count on continuing to grow also in Italy. The second part of the question is related to the drivers, exactly, the drivers for acceleration. When we implement a new operating model, it is made with a certain strategy and not just to do so.
Andrea Di Santo: In this case, we have an expectation that the operational change that we made in Italy will have a synergic effect that will increase revenues at the same cost. So we will see an effect, and this is a fundamental leverage. Different positioning and different presence on the area that will yield us better results, especially in 2027.
[Company Representative] (GPI): Thank you. Matteo, the next question is for you. Concerning net working capital, do we have a higher visibility on the evolution of contract assets that you also talked about in the presentation, and the high level for the business? When you foresee the values to slow down?
Matteo Santoro: I was muted. The issue of contract assets is being faced by many points of view. A strategic theme is that large projects were delivered, and in those projects, the quota of recurring revenues was pretty irrelevant.
Matteo Santoro: Now that the projects are in place, and we need to deliver further assistance, data privacy and so on, this will increase the recurring revenues that generate immediate cash for us. So, already in 2027, we foresee an important growth of these recurring revenues that will allow us to be less dependent on the FTA phenomenon. On the other side, at least in our country, we have a structural issue of a customer that usually pays in times that are very slow for us. There is already a target national level because companies all over Italy are suffering from this, and large companies usually survive, but smaller companies usually suffer and maybe too close. So, the possibility is to have tenders in the future to be paid with the SaaS modality.
[Company Representative] (GPI): Thank you, Matteo. The next question is for Andrea, concerning artificial intelligence. Do we foresee a significant square on costs due to the implementation of artificial intelligence? Are there impact on labor costs?
Andrea Di Santo: It is a trick question. If you wanted to ask if we have these mission plans, somehow the answer is no. I can explain why. Concerning if this will have an impact on the future, certainly so, because when we implement both on our customers, but also on our internal processes, AI algorithms to improve productivity, this could mean less hiring processes in the area overall, because the old process meant that the more the revenues increase, the cost of labor increases, and also the number of employees. This is a particular that the AI is challenging, because when we want to hire someone, we have to ask ourselves how much we can make it more efficient, so that an employee, instead of doing 100, can do 110.
Andrea Di Santo: Over time, adding all these 10s will mean hiring a person less. I think I will have answered. On the current basis, no, because we have such a backlog of work to do. We do not foresee any impact. Thank you, Andrea. Sorry, Lance, I wanted to add something on the AI theme, because this is a very important issue. A few months ago, the foreign markets gave a signal on technological companies, talking about AI yes, AI no. Shortly, we will publish our position on the AI theme, because it has to be addressed as an industrial positioning and not just as cutting costs. We will shortly communicate that we want to move. At the basis, there has to be a domain competence, because there are more and more companies appearing on the market that are making AI, but they do not have domain competence, domain skills.
Andrea Di Santo: We are moving with a logic of presenting an industrial project where the same industry will be our own competence and the domain companies. With the AI, not just as a tool to decrease costs, but also to acquire more market shares. They are considering possible M&As. They are asking if we are focusing mainly on the internal strengthening or we are open to M&As. They ask if we are focused on software and on what niches, and if we can give some more details. I will say that the answer is yes on both sides. We are open to M&As in an opportunistic way. This is not the moment for us. We are following a plan that foresees a centering to improvement through organic lines.
Andrea Di Santo: Country by country, and market by market, we are assessing very carefully, because obviously an investment may be useful to increase our growth. They also ask the guidance, so how we believe to close 2026, and related to this, if industrial growth is proceeding in line above or below expectations of the industrial plan. Actually, you already said something, but please go on. Yes, both 2026 and national growth are going on in line with our plan. This is the line we mean to follow. We usually try to do better than what we planned, but certainly we are in line with our plan.
[Company Representative] (GPI): Matteo, question for you. You already partially answered during the presentation on how the cash is going, if we have some data to offer.
Matteo Santoro: We cannot share any data about this, but we foresee at the end of the year, according to our estimates, that we will recover over the first semester. So, our revenues will be higher than our revenues.
[Company Representative] (GPI): Andrea, question for you. Do you have any news on a possible extraordinary event by the FM control company?
Andrea Di Santo: If there is no possibility, the short answer is no. In 2025, we had a communication, and then we did not have any more communication, so we cannot share anything else as a GPI. The next question is on the software. We work well on the margins, so they ask if the efficiency measure had an impact, where we are regarding standardization of software, and if we have KPIs that we use to measure this process. It is a pretty broad question. Concerning efficiency improvement, we are basing our job on two lines.
Andrea Di Santo: The portfolio mix, Italy versus the world, is going more in favor of the rest of the world, offering products that are standardized and less customizable, and this will allow us higher margins. Selling more with the rest of the world is going to help us and increase our revenues. We are paying more and more attention to the costs. We want to uniform the costs of the various companies that are part of our group. Concerning software standardization, we are equipping ourselves. We have internal KPIs, but we cannot share them at the moment. I can say that we use AI also in this sector because it has, so-called, vibe coding.
Andrea Di Santo: It is used both on the external side, following the strategy that we explained before, but it could also be used in the software development and in the software coding, which is very important because we have to update our systems. The standardization is going on, and it is going on pretty fast.
[Company Representative] (GPI): This is the last question for you, Andrea, and then we will close the Q&A. Do we have any idea of the contribution to the margin expansions due to the standardization of the group?
Andrea Di Santo: I would return to the plan. We are reasoning in terms of percentage. I could say 2%, 3%, but it is something that we are implementing day by day, and it is certainly contributing to what we do. At the moment, I cannot give a precise number of the contribution on the semester or on the year.
[Company Representative] (GPI): Thank you, Andrea. Thank you, Matteo.
[Company Representative] (GPI): Thank you to all of you for attending this presentation. I remind you that the company is always available through our email address for any kind of questions related to the financial side. Thank you for your attention, and have a good day.
