Q2 2026 Esprinet SPA Earnings Call
Speaker #1: So as a reminder, all participants are in listen-only mode, and after the presentation there will be an opportunity to ask questions. At this time, I would like to turn the conference over to Ms. Julia Perfetti, IR manager and sustainability manager.
Speaker #1: Please go ahead, madam.
Speaker #2: Thank you, madam. Good morning, everyone, from me too, and thank you for joining us for the Esprint Group H1 2026 results presentation. I'm Julia Perfetti, investor relations and sustainability manager of Esprinet, and with me here is Giovanni Testa, CEO of the group, who today will comment on the results.
Speaker #2: Before we start, please note that this presentation contains forum-looking statements so I would like to draw your attention to the regulation note on page 2 regarding the information contained within this document.
Speaker #2: Today's call is being recorded and the podcast will be posted on the Esprint website in the investor section together with the presentation. I will now turn the call over to Giovanni to begin presenting and commenting with you on the H1 2026 results.
Speaker #2: Giovanni, over to you.
Speaker #3: Thank you, Julia. Welcome also from me, and I think that we can start with the H1 2026 result of the Esprint Group. The overall picture of the first half of '26 confirms our strategy and solid results reinforce the momentum that we built from the starting of the year.
Speaker #3: The second quarter have matched the strong performance of the first, and this allows us, and this is the first news that I would like to underline with you, with the solid outlook for the second half, and let us to raise our 2026 guidance to adjust the bid of between 77 million euro and 82 million euros.
Speaker #3: So the maximum of the last, or the previous guidance that we announced in May, now is the minimum of the guidance for the minimum of the fork.
Speaker #3: Passing on the sales side, gross sales grew of 80% year-on-year, exceeding 2.0 billion euro in the half. Also in the second quarter, the Iberian Peninsula remained our engine, is the market that is more growing in our in the region in which we are present, and once again delivering a double-digit growth.
Speaker #3: On the counter in Italy, the market is growing, but low single-digit and the trend of the market in the second quarter in Italy is more or less the same of the first quarter.
Speaker #3: So in we are in a market that restart to grow, but not as we would like to see, and what not like is we are seeing in Peninsula Iberica space.
Speaker #3: Demand is driven primarily by the infrastructure, artificial intelligence, memory, and storage. And this is a trend that started in the last month of last year, and is continuing also today.
Speaker #3: We see a little shortage of components, but we see also a very important increase of the unit average selling price, overall speaking about smartphone, notebook, tablet, and servers.
Speaker #3: The first three product categories are related to the Esprint space and server are related in our of the business that we manage under our brand Vivaldi.
Speaker #3: In PCs, overall, what we have to underline is that the decline in unit shipment was more than offset by rising the average price. But for sure, we see a number of units sold that is import that is less and is important number, important respect to what is the business of PC notebook in this moment.
Speaker #3: Green tech sustain the remarkable growth that we had in the first quarter, and what is the main the main aspect for us is that our strategy to grow to push a lot in these product categories and in your renewal energy is a win strategy in this moment.
Speaker #3: Passing to turning to profitability, and about the financial structure, the bid adjust for the first six months of the year was at 31.9 million euro.
Speaker #3: And with the increase of 27% compared with the same period of 2025. And also the incidence on the sales rising to 1.53 from 1.30.
Speaker #3: This result is supported also by a gross profit margin of 5.79, and also from our capability to keep all the fixed and variable cost under control.
Speaker #3: And this is another aspect that is important in our strategy because we are trying to grow in sales and in gross margin, gross profit, keeping the under control the cost and reducing the impact of the overall of the fixed cost on the turnover.
Speaker #3: The cash conversion cycles is closed at 25 years. 25 days, sorry. One day better than the first quarter, and four days better than Q2 2025.
Speaker #3: The net financial position is negative of 325 million euro, and is flat if you see the compare period of June 2025. And is better or more or less 25, 30 million euro of March 2026.
Speaker #3: Rose stood at 6.3%. So at the end of the day, what we can we can see is that we are growing we are growing bid margin, that for sure is the aspect most important, more important, and we have we have maintained a solid financial structure.
Speaker #3: So all is the reason why we decided to increase the guidance 77 to 82 million euro. If now we look thanks, Julia, to the H1 and Q2 26 sales evolution, the message are the messages are more or less the same that we discussed and we shared in the first quarter.
Speaker #3: We have outperformed the market in all the region in South Europe, in which we are present. Overall, in the Peninsula Iberica, that is the country that is the leading the way.
Speaker #3: Spain grew 18% in the second quarter and 21 in the half. And the market grew less, as you can see in the picture. So we beat the market.
Speaker #3: Portugal is continuing increasing is market share, and we are doing more than the market up to 62% in the quarter and 37 in the half.
Speaker #3: For Morocco, we didn't have data of the market, but what we can say is that is still small in absolute term on the total of our turnover.
Speaker #3: But increase of 20%, the sales year on year. Italy, rebounded in the second quarter with a gross sales up to 8%, and in the H1, we are exactly increasing exactly the same percentage for the market.
Speaker #3: The group grew for 4%, broadly in line with the market over the last. Passing to the product categories, the double-digit market growth in the quarter was driven by the performance of the infrastructure sales.
Speaker #3: And also a strong perform often the personal system, what we see in the product category screens. Solution and services grew of 15% in the quarter 13 in the half.
Speaker #3: And the screen of 4% and 9% respectively. Device, that is a product category that last year was in crisis in this year, are growing of 8% in the second quarter and 4% in the half one 2026.
Speaker #3: I add of a market that was down in both the period. We close about speak about product categories with the green tech. That remain our fastest growing area.
Speaker #3: With up to more or less 40% in the quarter and 40% in the half. That confirm our strategy, that confirm our capacity to grow all in all the month of the year is not a spike in one moment and then with result not in line in other month.
Speaker #3: And confirm also our strategic role on the renewable energy and energy efficiency technologies for sure in the green tech there is the part of the result of Vamat, the last our last acquisition in October 2025.
Speaker #3: Passing to customer, ITRS selling I think reseller were the main engine of our cluster of customer. And are growing by 8% in the quarter 13% in H1.
Speaker #3: Retailer, retailers were down 9% in the quarter. Here we want to really maybe answer to some question that could arrive later. We decide not to take some business that under the profitability or and working capital point of view were not in our vision good to take.
Speaker #3: We want to create a value not to destroy the value and we are not following the turnover just to have a better figure in the top line if the result is not reflected in the bid margin.
Speaker #3: And so we decide not to take some business in the retailer and retailers space. Passing to the next one, here we see the profit and loss of H1 and Q2 of by the three-dimension that represent our go-to-market screens and devices for the experience.
Speaker #3: Solution service for Vivale green tech for genetic. As you can see, all the figures are positive. Some comments that we have already done a few minutes ago.
Speaker #3: What I have the pleasure to underline is the performance of the services. If you remember in Q1, we had a services figures that decrease of more or less half a billion half a million euro for a spot deal that we had in the previous year and not in 2026.
Speaker #3: But you can see the performance of the services in Q2. So after the announcement of our new division in Novexia, that we announced at the end of March 2026.
Speaker #3: We are very focalized on services. We are pushing a lot and in Q2 we increased of 41% on the turnover and 56% in a bid margin.
Speaker #3: It's clear that our small numbers of turnover, in our global turnover. But with a gross individual margin of more than 50% also a small increase of turnover represent a good impact in our total bid margin.
Speaker #3: Other aspect that we are the pleasure to underline as we have told before, the green tech with increase of 40% of the turnover and 56 57, sorry, percent of the bid margin.
Speaker #3: With the bid margin that are that get to grew of more than 20 business points. Other aspects that we want to underline is the increase of the turnover of the screens in which for sure there is the impact of the increase of the average selling price of a notebook and smartphone.
Speaker #3: But also the good performance respect to the previous year of the devices. If you see the H1 result of the bid margin 3.1 million euro against 0.3 million euro with a delta of 2.8 million euro more than 100% of the increase.
Speaker #3: Also in this product categories as we have said in the last investor call, we have changed the profile of our business. We have decided not to go on some categories of its product and we are pushing a lot on the market in which we can see in the bid margin higher than in the past.
Speaker #3: In the profit and loss summary, we see the good momentum of the bid adjusted and the bid adjusted. For turnover and for gross profit, we have already commented what happened.
Speaker #3: We see about the SG&A cost that are growing of 4% in H1 and 7% in Q2. The main reason are all related to personal cost because I remember you that in the perimeter of the group was not present in Q1 and Q2 Vamat.
Speaker #3: For example, and there are also the two renewals of the collective bargains agreement that there is both in Italy and Spain with a percentage that are important.
Speaker #3: For the other cost are under control, are in line with our expectation and also with the 2025 result. And the percentage of the incidence of SG&A on the turnover H1 26 decrease from H1 25 from 4.44% to 4.26%.
Speaker #3: About bid and EBIT, what we have to underline in Q2 is that for the first time there is a difference between EBIT and EBIT adjusted, but also at a level bid adjusted.
Speaker #3: Because in Q2, entered the we have included the some cost, some non-recurring cost that is related to the termination of the relationship with the our former CEO, Sandro Cattani.
Speaker #3: And three managers of the group, one in Italy, one in Spain, and one in Portugal, that left the company during the Q2 2026. About financial aspects also the cost of the net financial expenses there is the impact as we have already seen in Q1 of the not favorable dynamic of the euro dollar exchange.
Speaker #3: On the contrary, the other financial cost are in line with the last year we are speaking about 6.2 million euro in H1 2026 against 6 million euro in H1 2025.
Speaker #3: At the end of the day, all in all, net income increased over 40% in the half and you see the decrease of the income in Q2, but it's all related to the not-recurring cost that I have explained a few minutes ago.
Speaker #1: Thank you. About the balance sheet summary, there are two aspects that are the main focus of the group since a lot of quarters. The first one that you can see in the right side of the slide is related to the operating networking capital.
Speaker #1: You can see that in the total operating networking capital, is in line with the result at the end of June is in line with the result of 25.
Speaker #1: Because we are speaking about 428 million euro against 417 million euro. You see an increase of the inventory and also an increase related of trade receivable.
Speaker #1: That is connected to some deal that we have decided to do because connected to the continuing increase of the prices we have decided to have the product already in our warehouse for the H2 for all the back to school in August and also the campaign September to December that I remember I remind you that are the four months in which we have to create the majority part of our EBITDA margin of the year.
Speaker #1: And so we have decided to prevent the increase of the products to have some products available with the better price of the maybe of the competition of our competitor for our customer.
Speaker #1: We have decided to anticipate some deals. Speaking about the net financial debt that you can see in the left part of the side, even if we have done this deal and we have anticipate the some purchasing deals with the vendors, the net financial debt is fully stable because we are speaking about 325 million euro of debt in 2026 against 328 million euro in 2025.
Speaker #1: That is also connected once in their life to a group of more than 8% of the turnover. So in this moment, we are confident that also our hard work speaking about the inventory management is offering us a good result and a good demonstration that our strategy is in this moment a win strategy.
Speaker #1: Here we see the working capital matrix for the average of four quarter. More or less the figure that we see in the slide are the same of the next one.
Speaker #1: Seeing the average of first quarter, we are passing from 29 of Q2 at the end of Q2 25 to 25. So we are increasing the result.
Speaker #1: We have a better result of four days. And of one day respect the Q1 2026. If we see the in the next slide, if we see the year quarter metric, also here we see four days of better result of for the Q2.
Speaker #1: So June 25, June 26. And a decrease of three days so more than over the one day of the average of the last quarter.
Speaker #1: From Q1 26 to Q2 26. Process is stable. 6.3% fully in line with the result and a little increase of respect to the result of Q1 26 and a little decrease of Q2 25 that was 6.6%.
Speaker #1: So final remarks. The geopolitical scenario is changing every day as you can read in the newspaper and the websites. Every day we have a news that could be a good news or a bad news and the two in the bracket big wars big crisis we're speaking about Iran and Ukraine one every day offer us a different scenario that can change the visibility of the next month.
Speaker #1: For sure all that these aspects are creating issues on supply chains the cost pressure the price pressure and the price increase of the products the cost pressure overall related to transport and to energy aspects you see perfectly the increase of the cost of the oil so is a issue that can have some aspect related to the control of the fixed cost and the variable one overall in this case the variable one of the company.
Speaker #1: There are also the some issue about the project timelines because some companies we are speaking about private company are looking for started a new project and they want to see which would be the future.
Speaker #1: And we have we still have as in the Q1 some problems related to the public tender we're speaking about concept of tender and so on because even if the vendors are trying to enlarge the time in which the can grant the price to concept there is still is a issue because in the past we were in a market in which the prices decreases the crisis and the visibility for the tender with the public administration was free us for the price.
Speaker #1: Now it's not possible to have the same situation. Density distribution market is growing. It's growing with a different percentages country by country but all in all is growing and the was driven mainly by the as we have already said the demand for infrastructure and artificial intelligence software cloud cyber security and for the for sure for the PC segment that as we have already said see lower units volume offset by the average price that is increasing more.
Speaker #1: So we can confirm we can at that point at the moment that our strong performance of each one is a demonstration that we think the good strategy that we started some years ago with the three division SPV Valenzia Tech with the decision to enter in a renewal energies with the decision to have a push more than the past on services and data center solution is in this moment because we can comment the result since today.
Speaker #1: But also in our forecasted in our forecast the reason why we increased our guidance we are positive and we think that we can have a long-term grow also in the next quarters because our market and our strategy as well will permit us to grow.
Speaker #1: So if the guidance decided to increase the guidance the new one is a bit adjusted between Euro 77 to 82 million euro. And we will work as in the past to arrive in the high part of the fork as we have done last year.
Speaker #1: I think that I have finished from my side and Julia or the team for the Q&A session.
Speaker #2: Thank you. This is the conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone.
Speaker #2: To remove yourself from the question queue, please press star and two. First question is from Pietro Nargi, Intermonte.
Speaker #3: Hello. Good morning. Thanks for taking my questions. Two question on my side. The first one is on the device segment. As you already said before, there was an improvement in both revenue and profitability.
Speaker #3: I was wondering if this trend could be let's say sustainable also in the second part of the year. The second question is on the Vivale we have seen again a solid growth on these segment.
Speaker #3: If you could provide us more color on your let's say expectation for the mid-term so if let's say the high single-digit target year-on-year it's sustainable trajectory for the next few years.
Speaker #3: Thank you.
Speaker #1: Okay. Thank you. So about the device segment we think that in our strategy the results of Q1 will be possible to reach also in H1 we will be possible to reach also in H2 and also in the next year.
Speaker #1: Is the result is related as I have mentioned before to a decision not to manage anymore some of that some categories that enter in devices and also a there is an aspect that I'm happy to comment with you that the our own brands performed better than in the past and all brands in our division or the turnover entered in device segment.
Speaker #1: So the answer is yes we see the more or less the same trend also for H2 and we are forecasting also for the next year.
Speaker #1: About Vivale Vivale is one of the main pillar that is present in our strategy. Also in the Vivale space there are a lot of product categories that all together created the result of Vivale.
Speaker #1: Some product categories are growing a lot and also in the future are for our point of view the trend set of the market. We are speaking about overall software and cloud that are mixed because there's no difference between boxed and cloud in this moment.
Speaker #1: So on-premise on cloud. And overall cyber security. There is also an apport of artificial intelligence agents that is starting not showing 100% in the results of each one but is starting and we are we have signed some contracts with vendors of agents as we have as I told you in a lot of interviews told you to the financial community in a lot of interviews in the last month about artificial intelligence and about the agent we are developing some agents internally and also we are signing some contract with our vendors to distribute agents that are done in by other companies.
Speaker #1: What is the common point by for the two strategies is that we are testing the agents internally. Before to put in the market. To offer to our customer because we want to be sure that are working well because artificial intelligence is a space in which a lot of people are speaking and I'm not sure that all are knowing perfectly what they are saying.
Speaker #1: We can say in this way because I wanted to be polite. And so we wanted to test to be sure to offer to our customer agents that are working in a right way.
Speaker #1: Speaking about always again about Vivale there is also another aspect that are important for us is the market that is related to server. With the also with the connected to the artificial intelligence the needs and the performance of the servers necessary to manage the AI artificial intelligence are growing a lot.
Speaker #1: So we have to offer to the market servers with the capability with the power higher but higher in a very important percentage of increase of the power of the servers.
Speaker #1: So there is a market in which we will see in the future some needs of change of the first that are present now in the data center.
Speaker #1: And so is another opportunity for us. I hope to have a well answered you if you need some other comments please tell me.
Speaker #2: Yes. Thank you. Very helpful. Bye.
Speaker #4: Next question is from Matthias. Paladino. Keep it up.
Speaker #5: Yes. Can you hear me? Okay. Thank you. I have two question maybe more maybe related to one on the working capital. So the cash conversion cycle improved to 25 days.
Speaker #5: But we remain above your 21-day if I remember well ambition. And while factoring and securitization programs increased to 402 million euros. And what concrete progress can be made on working capital in H2?
Speaker #5: And should investors expect that by ABDA guidance to translate into stronger cash generation this year? And maybe the second question is on Vivale on the margin.
Speaker #5: So if we compare it to the last year we were at 4.75 and now we are 4.35. And so what drove this small let's say dilution and should we view it as a temporary mix effect or as maybe the appropriate margin level for the current growth environment?
Speaker #5: Thank you very much for the answer and the presentation.
Speaker #1: Okay. Let me start from the second one. About the EBITDA margin of Vivale. In the reality the gross margin the gross profit of is division is growing.
Speaker #1: What is the reason why we see you see a decrease on the EBITDA margin is related to the fact that we are inserting in our structure in our organization some profiles that in the past we didn't have.
Speaker #1: And are profiling that in our vision can support and apport a lot in the future next future. And so this is why we are speaking about personal cost that make the EBITDA margin with a little decrease.
Speaker #1: But we are quite confident that there is a good opportunity to improve in the future. Now another part of the EBITDA margin rose by the personal cost is related to the new structure of the new sales structure of Innovexia.
Speaker #1: As we announced we mentioned the big difference in the managing of services in the group respect to what we have done in the past is that we are selling we are trying to sell services and solution related to the services not only with the general sales structure of each company as that Vivale and Zeletech but we have created a specific sales division sales group that help our customer to go together to the end user to explain the services and the solution.
Speaker #1: And we are speaking about overall cyber security and artificial intelligence solution. And so obviously this top this group have a cost that in this moment have an incidence more than the growing that we are seeing in the service turnover services.
Speaker #1: But as we see we saw in the figures before of Q2 already there is a good result of 40% of the increase of the turnover in Q2.
Speaker #1: It's not only related to the new group new sales group but is also related to the news group. Speaking about the working capital and for sure we are we see little slides improve the working capital.
Speaker #1: There is a seasonality that this year is changed respect to the previous years. And the needs of vendors and customers as I commented before created a need a new need to anticipate some purchasing deals.
Speaker #1: And so this is why we are not we are we have produced a better result of some days as you told us. We are not so far but we have not already reached our target that is as you right mentioned 21 days that in our calculation permit us to be cash neutral.
Speaker #1: The main focus to arrive to that target will be to reduce another time the level of stock. We are confident to do that in Q4 overall in Q4.
Speaker #1: Also in Q3 we will you will see some opportunities for us. We can define the bracket in this way. But overall in Q4 in that is the moment in which there is the big worries about the possible shortage of smartphone and PC notebook.
Speaker #1: About to sorry there was also an aspect of securitization and factoring we are trying to not to do a lot more securitization but to sell more invoices to factoring because we are also trying to have the double advantages not only on the net finance position but also because we are always in not a recurring programs so we are matching also the aspect of the insurance the credit insurance aspect.
Speaker #1: Because it's true that in this moment there are some possible issue about credit with very small specific clusters I don't want to mention in now but there are one two clusters very small as number of customers but very important in some specific market I'm speaking about smartphone one that are some issues probably you have already read something in the newspaper and website.
Speaker #2: Very clear. Thank you very much.
Speaker #3: Next question is from Gabriele Berti. Intesa Sanpaolo.
Speaker #1: Morning everyone. First of all congrats for the result and thanks for the presentation. First one is on Spain which is still very strong. How sustainable do you see this growth pace and can you provide some color on how much of the performance was linked to public incentives in comparison to the underlying private sector demand?
Speaker #1: Then you mentioned memory shortages and higher component prices as a relevant market factors. Could this dynamics become a potential Edwin for demand or working capital management in the coming cow quarters although they are currently supporting current selling prices.
Speaker #1: And very lastly if you can provide an update on the execution of the Innovexia project.
Speaker #5: Okay. The first question is about the for example for Spain digital the digital kit and so all the funds the PNR programs in Italy Spain and Portugal.
Speaker #5: There are also here there are two different speed in the countries. In Italy the impact of the funds is not so important from our point of view.
Speaker #5: In our vision because a lot of funds are already not yet spent and not yet used because sometimes the our customers our end user are not knowing perfectly how can do that and so there is probably some also problem of communication when we spoke when I've spoken with our customer we have the feeling that not all is clear not all the opportunities that this aspect can offer to the market are catching 100%.
Speaker #5: On the contrary in Spain I have to say exactly the contrary. In Spain all the funds were used and were well used for permit to the end user to start new projects in some different markets and we see that in the newer energy and all these and also in the project that are connected to the data center as I told you before related overall to the change of the servers in order to manage better the agents were well used and we think that can support the business till the next two three quarters as well.
Speaker #5: And then we will see what will be the decision of the governments and of Europe for sure. The second one was the shortage of the memories and the impact on the prices.
Speaker #5: In this case we have two divided the impact into main group. The first one is we are sure because we are seeing also the projection of with vendors and so on that the price the unit price of a notebook and smartphone will increase I think till September the end of Q3 of 2026.
Speaker #5: 20 sorry 2027 because also the possibility to create new factories for chips need more than one year and in China and not only in China in Far East started to build a new factories a lot of vendors do that did that but there is a time needed of one year to have the to be sure that the product is in line with the expectation and to arrive to the market with a new with more product available.
Speaker #5: So about the price will we will see an increase of the price for sure. About the unit sold in the future there is also here they need to divide public and private market and end user market.
Speaker #5: Private and public market so we are speaking about public administration central local is no difference and the private companies will continue to buy because they need to have a notebook that can perform with a new tool with also the ChatGPT Claude Anthropic and so on because if you want to have a good performance you need to have a notebook performance.
Speaker #5: That can perform with a microprocessor RAM and so on better that the what they have in this moment in the companies who have to I would like to remind you and we have to remember well that the last big change of the devices was after what it was during and after COVID.
Speaker #5: Then there was another wave related to the change of Windows 11 but was lower than respect to what happened with the COVID change. And now the for our point of view will be the is already we have we are already in the third wave.
Speaker #5: I'm speaking about for the companies. Speaking about for the users we really the vendor which we are speaking about this aspect are really not all in aligned of what we can happened.
Speaker #5: In the next month. We see a demand of consumer demand so demand of the end user we are speaking about the retailers and retailers market that are stable or in this moment or is decreasing a little and this is also reflected to the unit sold in the H1 that were less that H1 2025.
Speaker #5: But to forecast now what will happen will happen in the next three four months because we are speaking about Black Friday and Christmas campaign it's quite difficult to forecast.
Speaker #5: And average of the vendors are saying as that they reduce or they units sold will be less but less in important percentage respect of the increase of the price.
Speaker #5: So the to know and the bid margin related to that part will increase. And the last one was about Innovexia. We launched Innovexia in March 26.
Speaker #5: Is in the division that is working fully working since some week because we have created the structure. We have done all the so we have hire all the people that we needed in the sales department that mentioned before and so we have seen for Q2 that the result was 40% of increase of the turnover.
Speaker #5: But overall we have as we can define our activity we are in this moment in a phase in which we are explaining what Innovexia can do for our customers and for the end user.
Speaker #5: And what the services and solution that we have sold we are can sell sometimes in exclusivity for example we have signed a contract in exclusivity on June 22 23 I don't remember there's a date with that for a cybersecurity and artificial intelligence solution that is called Axia.
Speaker #5: That we are offering we are started to we are started to offer overall in the public administration local and central with good results. So we are in a phase in which we are explaining and we are quite confident that in the Q3 and Q4 and that's for sure in the 2027 we will take the result from the market of what we are we are doing now.
Speaker #5: We are happy because the result is good so we can not be different that we are happy for the turnover for the bid margin results.
Speaker #5: But we think there is a big space in which we can grow in the last in the next quarters.
Speaker #1: Thank you very much.
Speaker #2: Yes. Perfetti. Gentlemen, there are no more questions. Registered at this time.
Speaker #3: Okay. Thank you. So we can end our today's conference call. Thank you for participating and of course we remain at your disposal. Thanks again and see you next time.
