Q1 2027 Sesa SpA Earnings Call

September 14, 2026

[Analyst]: Yo, VIP. Let's kick it. Ice, ice baby. Ice, ice baby. All right, stop. Collaborate and listen. Ice is back with a brand-new invention. Something grabs a hold of me tightly. Pull like a harpoon daily and nightly. Will it ever stop? Yo, I don't know. Turn off the lights, huh, and I'll glow. To the extreme, I rock a mic like a vandal. Light up a stage and wax a chump like a candle. Dance. Go rush the speaker that booms. I'm killing your brain like a poisonous mushroom. Deadly. When I play a dope melody, anything less than the best is a felony. Love it or leave it. You better gain way. You better hit the bullseye, the kid don't play. If there was a problem, yo, I'll solve it. Check out the hook while my DJ revolves it. Ice, ice baby. Vanilla. Ice, ice baby. Vanilla.

Speaker #3: Yo, VIP. Let's kick it.

Speaker #4: Ice, ice, baby. Ice, ice, baby.

Speaker #3: All right, stop. Collaborate and listen. Ice is back with a brand new invention. Something grabs a hold of me tightly. Flow like a harpoon, daily and nightly.

Speaker #3: Will it ever stop? Yo, I don't know. Turn off the lights, huh, and I'll glow. To the extreme, I rock a mic like a vandal.

Speaker #3: Light up a stage and wax a chump like a candle. Dance, restless figure that booms. I'm killing your brain like a poisonous mushroom. When I play a dope melody, anything less than the best is a felony.

Speaker #3: Love it or leave it, you better gain weight. You better hit the fool's eye, the kid don't play. And if there was a problem, yo, I'll solve it.

Speaker #3: Check out the hook while my DJ revolves it.

Speaker #4: Ice, ice, baby. Ice, ice, baby. Ice, ice, baby. Ice, ice, baby.

[Analyst]: Ice, ice baby. Vanilla. Ice, ice baby. Now that the party is jumping. With the bass kicked in, and the Vegas are pumping. Quick to the point, to the point, no faking. Cooking MCs like a pound of bacon. Burning them. If you're not quick and nimble. I go crazy when I hear a cymbal and a hi-hat. With a souped-up tempo. I'm on a roll, it's time to go solo. Rolling in my 5.0 with the rag top down so my hair can blow. The girlies on standby, waving just to say hi. Did you stop? No, I just drove by. Kept on pushing to the next stop. I bust a left, and I'm heading to the rec stop. The block's dead, yo, so I continued to A1A. Beachfront Avenue. Girls were hot wearing less than bikinis. Rockman lovers driving Lamborghinis. Jealous because I'm out getting mines.

Speaker #3: Now that the party is jumping, with the bass kicked in and the Vegas off pumping. Quick to the point, to the point, no faking.

Speaker #3: Cooking MCs like a pound of bacon. Burning a boogie, not quick and nimble. I go crazy when I hear a cymbal, and a hi-hat with a souped-up tempo.

Speaker #3: I'm on a roll, it's time to go solo. In my 5.0, with the ragtop down so my hair can blow. The girlies on standby, waiting just to say hi.

Speaker #3: No, I just drove by. Kept on, put someone to the next stop. I bust a lesson, I'm heading to the next stop. The block was dead, yo, so I continued to A1A.

Speaker #4: Beachfront Avenue.

Speaker #3: Girls were hot when the less-than-bikinis rocked me, and lovers driving Lamborghinis. 'Cause I'm out getting mine. Shade with the cage and vanilla with the nine.

[Analyst]: Shay with a cage and Vanilla with the nine. Ready for the chumps on the wall. The chump stacked the hill because it's full of eight balls. Gunshots ranged out like a bell. I grabbed my nine, all I heard was shells. Falling on the concrete real fast. Jumped in my car, slammed on the gas. Bumper to bumper, the avenue's packed. I'm trying to get away before the jackers jack. Police on the scene, do you know what I mean? They passed me up, confronted all the dope fiends. If there was a problem, yo, I'll solve it. Check out the hook while my DJ revolves it. Ice, ice baby. Vanilla. Ice, ice baby. Vanilla. Ice, ice baby. Vanilla. Ice, ice baby. Take heed, because I'm a lyrical poet. Miami's on the scene, just in case you didn't know it. My town that created all the bass sounds.

Speaker #3: For the chumps on the wall. The chumps acting ill 'cause it's full of eight ball. Gunshots rang down like a bell. I grab my nine, all I heard was shells.

Speaker #4: Falling.

Speaker #3: On the concrete real fast. Jumped in my car, slammed on the gas. Bumper to bumper, the avenue's packed. I'm trying to get away before the jackers jack.

Speaker #3: Police on the scene, you know what I mean? They passed me up, confronted all the dope fiends. If there was a problem, yo, I'll solve it.

Speaker #3: Check out the hook while my DJ revolves it.

Speaker #4: Ice, ice, baby. Ice, ice, baby. Ice, ice, baby. Ice, ice, baby.

Speaker #3: Take heed, 'cause I'm a lyrical poet. Miami's on the scene just in case you didn't know it. My town, that created all the bass sound.

Speaker #3: Enough to shake and kick holes in the ground. My style's like a chemical spill. These are rhymes you can vision and feel. Conducted and formed, there's a hell of a concept.

[Analyst]: Enough to shake and kick holes in the ground. My style's like a chemical spill. These are rhymes you can vision and feel. Conducted and formed, there's a hell of a concept. We make it hype, and you want to step with this. Shay plays on a page, slides like a ninja, cuts like a razor blade. So fast, other DJs say, "Damn." If rhyme was a drug, I'd sell it by the gram. Keep my composure when it's time to get loose. Magnetized by the mic when I kick my juice. If there was a problem, yo, I'll solve it. Check out the hook while my DJ revolves it. Ice, ice baby. Vanilla. Ice-

Speaker #3: We make it hype, and you want to step with this. Shape plays on the fade, slides like a ninja, cuts like a razor blade so fast, other DJs say, "Damn."

Speaker #3: Rhyme was a drug, I'd sell it by the gram. Keep my composure when it's time to get loose. If there was a problem, yo, I'll solve it.

Speaker #3: Check out the hook while my DJ revolves it.

Speaker #4: Ice, ice, baby. Ice.

Speaker #1: Good afternoon. This is the Quartz Call conference operator. Welcome, and thank you for joining the SeSa Full Year 2027 Consolidated Three Months Results Conference Call.

Operator 2: Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the SeSa full year 2027 consolidated three-month results conference call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. At this time, I would like to turn the conference over to Mr. Jacopo Laschetti, Head of Stakeholders, Relations, and Sustainability of SeSa. Please go ahead, sir.

Operator: Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the SeSa full year 2027 consolidated three-month results conference call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. At this time, I would like to turn the conference over to Mr. Jacopo Laschetti, Head of Stakeholders, Relations, and Sustainability of SeSa. Please go ahead, sir.

Speaker #1: As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. At this time, I would like to turn the conference over to Mr. Iacopo Laschetti, Head of Stakeholder Relations and Sustainability at SeSa.

Speaker #1: Please go ahead, sir.

Speaker #5: Good afternoon, everyone, and thank you for joining SeSa Group's first quarter results conference call. On today's call, SeSa Group is represented by Alessandro Fabbrone, Group CEO, and myself, Head of Stakeholder Relations and Sustainability.

Jacopo Laschetti: Good afternoon, everyone, and thank you for joining SeSa Group first quarter results conference call. On today's call, SeSa Group is represented by Alessandro Fabbroni, Group CEO, and myself, Head of Stakeholder Relations and Sustainability. This afternoon, the board of directors approved the consolidated financial results for the first quarter of FY27, ending 31 July 2026. The rated corporate presentation is available on SeSa Group's website and will be used as a reference during today's call. Alessandro will begin with an overview of the group's financial performance and key Business highlights. I will then provide an update on sustainability, people, and stakeholder value creation before Alessandro concludes with the FY27 outlook and some remarks of our Industrial Plan. I will now give the floor to Alessandro.

Speaker #5: This afternoon, the Board of Directors approved the Consolidated Financial Results for the first quarter of FY27, ending July 31, 2026. The related corporate presentation is available on SeSa Group's website and will be used as a reference during today's call.

Speaker #5: Alessandro, we'll begin with an overview of the Group's financial performance and key business highlights. I will then provide an update on sustainability, people, and stakeholder value creation, before Alessandro concludes with the FY27 outlook and some remarks on our industrial plan.

Speaker #5: I will now give the floor to Alessandro.

Speaker #6: Thank you, Iacopo. Good afternoon, everyone, and thank you for joining us today. In a digital market sustained by strong demand for data management and data protection, and increasingly driven by AI and automation, we started the full year 2027 with a solid set of industrial and financial results, delivering single-digit organic growth in both revenues and profitability, at twice the market growth rate.

Alessandro Fabbroni: Thank you, Jacopo. Good afternoon, everyone, and thank you for joining us today. In a digital market sustained by strong demand for data management and data protection, and increasingly driven by AI and automation, we started the full year 2027 with a solid set of industrial and financial results, delivering high single-digit organic growth in both revenues and profitability at twice the market growth rate. More specifically, the first quarter confirms the effective execution of the new Industrial Plan 2027-2028, presented last July, as we continue to strengthen our market share and to consolidate our role of digital integrator, combining technology, digital platforms, and vertical applications with the progressive adoption of AI. For the first quarter, ending July 2026, SeSa reported consolidated revenue and other income for EUR 900 million, up 6.5% year-on-year and fully organic.

Speaker #6: More specifically, the first quarter confirms the effective execution of the new industrial plan 2027–2028, presented last July, as we continue to strengthen our market share and to consolidate our role as a digital integrator, combining technology, digital platforms, and vertical applications with a progressive adoption of AI.

Speaker #6: For the first quarter ending July 2026, SeSa reported consolidated revenue and other income of €900 million, up 6.5% year on year, and fully organic consolidated EBITDA amounted to €65 million, up 7.6% year on year, with an EBITDA margin achieving 7.23%, slightly improving compared with the same period last year.

Alessandro Fabbroni: Consolidated EBITDA amounted to EUR 65 million, up 7.6% year-on-year, with an EBITDA margin achieving 7.23%, slightly improving compared with the same period last year. The Group ended the quarter with 6,700 people, up 2.5% year-on-year and flat compared with 30 April 2026, reflecting our continued focus on skill development, AI adoption, and operating efficiency to sustain scalable organic growth. Looking at revenues by business sector, performance was driven by positive contribution from our main growth areas. ICT VAS sector reached EUR 540 million, up 8.1% year-on-year, fully organic and in line with the trend already achieved in FY26, driven by increasing demand for solution dedicated to data management, data sovereignty, and cybersecurity, enabling the adoption of private AI and automation.

Speaker #6: The group ended the quarter with 6,700 people, up 2.5% year on year and flat compared with April 30, 2026, reflecting our continued focus on skill development, AI adoption, and operating efficiency to sustain scalable organic growth.

Speaker #6: Looking at revenues by business sector, performance was driven by positive contribution from our main growth area. The ICTVAS sector reached €540 million, up 8.1% year on year, fully organic and in line with the trend already achieved in FY26, driven by increasing demand for solutions dedicated to data management, data sovereignty, and cybersecurity, enabling the adoption of private AI and automation.

Speaker #6: Green VAS sector achieved Euro 127 million up 14.4% year on year, in line with a great double digit organic growth trend reported in FY26, driven by increasing energy demand linked to digitalization and, in particular, by the development of the data center market.

Alessandro Fabbroni: Digital Green sector achieved EUR 127 million, up 14.4% year-on-year, in line with a great double-digit organic growth trend reported in FY26, driven by increasing energy demand linked to digitalization, and in particular, by the development of the data center market. Software and System Integration sector reported revenues for about EUR 213 million, down 3% year-on-year, reflecting the disposal of selected non-strategic assets completed during FY26 and the ongoing organizational reengineering process. Based on the current trend, we expect Software and System Integration to return to growth starting from Q2 2027, in line with our Industrial Plan. Business Services sector reached EUR 41 million, up 11% year-on-year, confirming the expected return to double-digit organic growth in FY27, driven by the contribution of multi-year contracts acquired during FY26 and by the increasing focus on digital platforms and vertical application.

Speaker #6: Software and system integration sector reported revenues of about €213 million, down 3% year on year, reflecting the disposal of selected non-strategic assets completed during FY26 and the ongoing organizational reengineering process. Based on the current trend, we expect software system integration to return to growth starting from Q2 2027, in line with our industrial plan.

Speaker #6: And finally, the Business Services sector reached €41 million, up 11% year on year, confirming the expected return to double-digit organic growth in FY27, driven by the contribution of multi-year contracts acquired during FY26 and by the increasing focus on digital platforms and vertical applications.

Speaker #6: Consolidated EBITDA increased by 7.6% year on year to €65 million, with EBITDA margin compared with the prior year period. This performance was driven by double-digit profitability growth in the ICT VAS sector, Green VAS sector, and business services, together with the progressive improvement in software system integration operating efficiency.

Alessandro Fabbroni: Consolidated EBITDA increased by 7.6% year-on-year to EUR 65 million, with EBITDA margin at 7.23%, slightly improving compared with the prior year period. This performance was driven by double-digit profitability growth in ICT VAS sector, Digital Green sector, and Business Services, together with the progressive improvement in Software and System Integration operating efficiency. In particular, ICT VAS sector reported EBITDA for EUR 25 million, up 11% year-on-year, with an EBITDA margin increasing to 4.6% compared to 4.5% in Q1 2026. Digital Green sector achieved EBITDA for EUR 7.7 million, up 23% year-on-year, with EBITDA margin improving to 6.0% from 5.6% in the prior year period. Software and System Integration sector recorded EBITDA for EUR 23 million, down 2.5% year-on-year, while flat year-on-year, excluding the impact of FY26 disposal of non-strategic assets and improving in terms of EBITDA margin, which grew to 10.8% from 10.7% year-on-year, thanks to higher operating efficiency.

Speaker #6: In particular, the ICTVAS sector reported EBITDA of €25 million, up 11% year on year, with an EBITDA margin increasing to 4.6% compared to 4.5% in the first quarter of 2026.

Speaker #6: Green VAS sector achieved EBITDA of €7.7 million, up 23% year on year, with EBITDA margin improving to 6.0% from 5.6% in the prior year period.

Speaker #6: Software and system integration sector recorded EBITDA for Euro 23 million down 2.5% year on year, while flat year on year excluding the impact of FY26 disposal of non-strategic assets and improving in terms of EBITDA margin, which grew to 10.8% from 10.7% year on year, thanks to higher operating efficiency.

Speaker #6: The Business Services sector reported EBITDA of €8.6 million, up 18% year on year, with an EBITDA margin reaching 21%, compared with 19.9% in the first quarter of 2026 and 19% as of April 30, 2026, confirming the increasing contribution of higher value-added digital platforms and vertical applications.

Alessandro Fabbroni: Business Services sector reported EBITDA for EUR 8.6 million, up 18% year-on-year, with EBITDA margin reaching 21% compared with 19.9% in Q1 2026 and 19% as of 30 April 2026, confirming the increasing contribution of higher value-added digital platforms and vertical applications. Group adjusted consolidated EBIT reached EUR 50.2 million, up 6.2% year-on-year after depreciation amortization for EUR 14 million and provision of around EUR 1 million. Reported EBIT amounted to EUR 41.4 million, up 7.5% year-on-year after PPE amortization for EUR 8.7 million. Group adjusted EAT achieved EUR 30.1 million, up 7.1% year-on-year, supported by profitability growth in ICT VAS up 12.6%, Digital Green up 20%, and Business Services up 11.4%. Software and System Integration remain substantially stable, down 1% year-on-year on a reported basis, but up 1% excluding the impact of FY26 disposal of non-strategic assets.

Speaker #6: Group adjusted consolidated EBIT reached €50.2 million, up 6.2% year on year, after depreciation and amortization of €14 million and provisions of around €1 million.

Speaker #6: Reported EBIT amounted to €41.4 million, up 7.5% year on year, after PPA amortization for €8.7 million. Group adjusted EAT reached €30.1 million, up 7.1% year on year, supported by profitability growth in ICT VAS, up 12.6%; Green VAS, up 20%; and Business Services, up 11.4%. Meanwhile, Software and System Integration remained substantially stable, down 1% year on year on a reported basis but up 1% excluding the impact of the FY26 disposal of non-strategic assets.

Speaker #6: During the quarter, net financial expenses amounted to around €7.5 million, improving by 11% compared with Q4 2026, and in line with the assumptions of our industrial plan, supporting the quarterly trend in group net profitability.

Alessandro Fabbroni: During the quarter, net financial expenses amounted to around EUR 7.5 million, improving by 11% compared with Q4 2026, and in line with the assumptions of our Industrial Plan, supporting the quarterly trend in group net profitability. In Q1, we also achieved a solid financial position and strong cash generation. Reported net financial position as of 31 July 2026 was equal to EUR 23.4 million of net debt, improving by around EUR 40 million compared with July 2025, after EUR 120 million of investment over the last 12 months, including EUR 20 million in Q1 2027, and after EUR 40 million of dividends and share buybacks over the same period. Excluding IFRS liabilities, group net financial position was equal to EUR 150 million of net cash with a slight improvement year on year.

Speaker #6: In the first quarter, we also achieved a solid financial position and strong cash generation, reporting net financial position as of July 2026 was equal to €23.4 million of net debt, improving by around €40 million compared with July 2025, after €120 million of investment over the last 12 months, including €20 million in the first quarter 2027, and after €40 million of dividends and share buybacks over the same period.

Speaker #6: Excluding IFRS liabilities, group net financial position was equal to €150 million of net cash, with a slight improvement year on year. Overall, the first quarter 2027 confirms our ability to combine organic growth, increased operating efficiency, industrial transformation, and strong cash flow generation.

Alessandro Fabbroni: Overall, Q1 2027 confirms our ability to combine organic growth, increase of operating efficiency, industrial transformation, and strong cash flow generation. With this positive Q1 performance, I will now hand over to Jacopo for an overview of our sustainability and stakeholder value creation priority.

Speaker #6: But with this positive first quarter performance, I will now hand over to Jacopo for an overview of our sustainability and stakeholder value creation priorities.

Speaker #1: Thank you, Alessandro. In line with our purpose of creating long-term, sustainable value for our stakeholders by promoting innovation, including digital innovation, across businesses and organizations, as well as people well-being, sustainability remains fully embedded in the execution of our business strategy and the new Industrial Plan 2027-2028.

Jacopo Laschetti: Thank you, Alessandro. In line with our purpose of creating long-term sustainable value for our stakeholders by promoting innovation, including digital innovation across businesses and organization, as well as people wellbeing, sustainability remains fully embedded in the execution of our business strategy in the new Industrial Plan 2027-2028. Q1 confirms the close link between digital transformation, sustainability, and business growth. Our Digital Green VAS sector continued to deliver double-digit growth driven by increasing energy demand connected with digitalization, and in particular, by the development of the data center market. At the same time, our activities in data governance, cybersecurity, digital platforms, and AI continue to support customers in improving efficiency, resilience, and control over their digital processes. On the environmental and governance side, we continue to develop our sustainability programs and strengthen transparency towards investors and all stakeholders.

Speaker #1: The first quarter confirms the close link between digital transformation, sustainability, and business growth. Our Green VAS sector continued to deliver double-digit growth, driven by increasing energy demand connected with digitalization and, in particular, by the development of the data center market.

Speaker #1: At the same time, our activities in data governance, cybersecurity, digital platforms, and AI continue to support customers in improving efficiency, resilience, and control over their digital processes.

Speaker #1: On the environmental and governance side, we continue to develop our sustainability programs and strengthen transparency towards investors and all stakeholders. We confirm our main ESG ratings, including Ecovadis Platinum, MSCI BBB, and CDP Level B.

Jacopo Laschetti: We confirm our main ESG ratings, including EcoVadis Platinum, MSCI BBB, and CDP level B. In FY26, we completed the ISO/IEC 27001 certification process across all main group companies, further strengthening our information security and governance framework. At the same time, we continue to extend group certifications and progressively increase the adoption of renewable energy. People remain a key enabler of our transformation and the execution of the Industrial Plan. As of 31 July 2026, the group counted 6,717 people, up 2.7% year on year and stable compared with April 2026. This stability reflects the first tangible benefits of the initiative launch to develop skills, accelerate knowledge sharing, progressively adopt AI and automation across the organization, and increase operating efficiency.

Speaker #1: In FY 2026, we completed the ISO 27001 certification process across all main group companies, further strengthening our information security and governance framework. At the same time, we continue to extend group certifications and progressively increase the adoption of renewable energy.

Speaker #1: People remain a key enabler of our transformation and execution of the industrial plan. As of July 31, 2026, the Group counted 6,770 people, up 2.7% year on year, and stable compared with April 2026.

Speaker #1: The stability reflects the first tangible benefits of the initiative launched to develop skills, accelerate knowledge sharing, progressively adopt AI and automation across the organization, and increase operating efficiency.

Speaker #1: We continue to invest in education, welfare, inclusion, and work-life balance, with a growing focus on the skills required in the areas of highest market demand, including AI, data management, cybersecurity, digital platforms, and vertical applications.

Jacopo Laschetti: We continue to invest in education, welfare, inclusion, and work-life balance, with a growing focus on the skills required in the areas of highest market demand, including AI, data management, cybersecurity, digital platforms, and vertical applications. These investments support scalable organic growth, improved productivity, and ensure that our people remain central to the group's long-term value creation model. Finally, our value creation model continues to combine sustainable growth with shareholder remuneration. The new Industrial Plan confirms a payout ratio of approximately 40%. In line with this policy, the dividend to be distributed on 23 September will increase from EUR 1 to EUR 1.33 per share, with the perspective of reaching up to EUR 2 per share over the next 2 years, subject to the achievement of the Industrial Plan targets.

Speaker #1: This investment supports scalable organic growth, improved productivity, and ensures that our people remain central to the Group's long-term value creation model. Finally, our value creation model continues to combine sustainable growth with shareholder remuneration.

Speaker #1: The new industrial plan confirms a payout ratio of approximately 40%. In line with this policy, the dividend to be distributed on the 20th of September will increase from €1 to €1.33 per share, with the perspective of reaching up to €2 per share over the next two years.

Speaker #1: Subject to the achievement of the industrial plan targets, and consistent with our shareholder value creation policy, we have already launched a €5 million buyback program, and today the board approved a further program of the same amount.

Jacopo Laschetti: Consistent with our shareholder value creation policy, we have already launched a EUR 5 million buyback program, and today the board approved a further program of the same amount. Additional purchases will be evaluated within the overall authorization of up to EUR 20 million. In this scenario, we will continue to focus on sustainable value creation for our stakeholders, combining innovation, financial discipline, people development, and responsible growth. I will now hand the floor back to Alessandro for the final remarks.

Speaker #1: Additional purchases will be evaluated within the overall authorization of up to €20 million. In this scenario, we will continue to focus on sustainable value creation for our stakeholders, combining innovation, financial discipline, people development, and responsible growth.

Speaker #1: I will now hand the floor back to Alessandro for the final remarks.

Speaker #2: Thank you, Jacopo. Two months after presenting our new industrial plan for 2027-2028, we are pleased to report to our stakeholders a solid start to FY 2027, consistent with our strategic priorities: organic growth, operating efficiency, market penetration, and a progressive adoption of AI and automation.

Alessandro Fabbroni: Thank you, Jacopo. 2 months after presenting our new Industrial Plan 2027-2028, we are pleased to report to our stakeholders a solid start of FY27, consistent with our strategic priorities: organic growth, operating efficiency, market penetration, and the progressive adoption of AI and automation. The market environment remains supportive. The Italian digital market is expected to grow by around 3.5% per year through 2029, driven by AI, cloud, cybersecurity, and data management. In that scenario, SeSa continues to grow at around twice the expected market rate. In Q1 2027, we deliver a solid high single-digit organic growth. We improve our profitability and cash flow generation, and we continue to invest in our industrial transformation. Q1 confirms 5 key messages for our stakeholders. First of all, revenues increased by 6.5% and EBITDA by 7.6%, fully organically.

Speaker #2: The market environment remains supportive. The Italian digital market is expected to grow by around 3.5% per year through 2029, driven by AI, cloud, cybersecurity, and data management.

Speaker #2: In that scenario, SeSa continues to grow at around twice the expected market rate. In the first quarter of 2027, we delivered solid single-digit organic growth, improved our profitability and cash flow generation, and continued to invest in our industrial transformation.

Speaker #2: The first quarter confirms five key messages for our stakeholders. First of all, revenues increased by 6.5% and EBITDA by 7.6%, fully organically. The ICT VAS sector confirms strong momentum, supported by demand for data management, cybersecurity, and data protection, and driven by private AI and automation.

Alessandro Fabbroni: ICT VAS sector confirm strong momentum, supported by data management, cybersecurity, and data protection demand, and driven by private AI and automation. Digital Green and Business Services sectors continue to deliver a strong double-digit revenue and EBITDA growth. Software and System Integration show improving operating efficiency with EBITDA margin increasing to 10.8% of revenues and a return to revenue growth expected from Q2 2027. Group cash flow generation remains solid with reported net financial position that improved by around EUR 41 million year on year after EUR 40 million of distribution share buyback last 12 months. We are also progressing towards model increasingly focused on organic development, integration, and group transformation with continued investment in higher value-added capabilities and digital platform.

Speaker #2: Green VAS and business services sectors continue to deliver strong double-digit revenue and EBITDA growth. Software and system integration show improving operating efficiency, with EBITDA margin increasing to 10.8% of revenues, and a return to revenue growth expected from the second quarter of 2027.

Speaker #2: Group cash flow generation remains solid, with a reported net financial position that improved by around €41 million year on year, after €40 million of distribution and share buyback in the last 12 months.

Speaker #2: We are also progressing towards a model increasingly focused on organic development, integration, and group transformation, with continued investment in higher value-added capabilities and digital platforms.

Speaker #2: Based on this positive start and the current order trend, we confirm the full-year 2027 guidance of our industrial plan: revenue growth in the range of 5% to 7.5%, targeting €3.8 to €3.9 billion.

Alessandro Fabbroni: Based on this positive start and the current order trend, we confirm the FY27 guidance of our Industrial Plan: revenue growth in the range of 5% to 7.5%, targeting EUR 3.8 to 3.9 billion, EBITDA growth in the range between 5% to 10%, targeting EUR 274 to 287 million, and adjusted the group EAT growth in the range of 7.5% to 12.5%, targeting EUR 115 to EUR 119 million. Looking ahead, we will continue to execute the plan with strong commitment, focusing on organic growth, operating efficiency, cash flow generation, and the capability to promote innovation across businesses and organization. Our strategic priorities remain clear: to grow at around twice the market rate, to improve our skills and capabilities, and continue to extend our track record of consistent revenue and profitability growth while creating sustainable long-term value for all our stakeholders.

Speaker #2: EBITDA growth in the range between 5% to 10%, targeting €274 million to €287 million, and adjusted group EAT growth in the range of 7.5% to 12.5%, targeting €115 million to €119 million.

Speaker #2: Looking ahead, we will continue to execute the plan with strong commitment, focusing on organic growth, operating efficiency, cash flow generation, and the capability to promote innovation across businesses and organizations.

Speaker #2: Our strategic priorities remain clear: to grow at around twice the market rate, to improve our skills and capabilities, and to continue to extend our track record of consistent revenue and profitability growth, while creating sustainable, long-term value for all our stakeholders.

Speaker #2: Thank you for your attention and for your continued interest in SeSa Group. We are now pleased to open the Q&A session.

Alessandro Fabbroni: Thank you for your attention and for your continued interest in Sesa Group. We are now pleased to open the Q&A session.

Speaker #3: This is the Carrasco 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 touch-tone telephone.

Operator 2: This is the Chorus Call conference operator. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press Star and 1 on their touchtone telephone. To remove yourself from the question queue, please press Star and 2. Please pick up the receiver when asking questions. Anyone who has a question may press Star and 1 at this time. The first question comes from Aleksandra Arsova with Equita. Please go ahead.

Operator: This is the Chorus Call conference operator. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press Star and 1 on their touchtone telephone. To remove yourself from the question queue, please press Star and 2. Please pick up the receiver when asking questions. Anyone who has a question may press Star and 1 at this time. The first question comes from Aleksandra Arsova with Equita. Please go ahead.

Speaker #3: To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time.

Speaker #3: The first question comes from Alexandra Arsova with Equita. Please go ahead.

Speaker #4: Hi, good afternoon. Thank you for taking my questions. So, a couple of questions on my end. The first one is maybe some clarifications on the software and system integration business.

Aleksandra Arsova: Hi. Good afternoon. Thank you for taking my questions. A couple of questions on my end. The first one is maybe some clarifications on the Software and System Integration business. If I'm correct, you mentioned that you saw an organic net of disposals growth, basically flat growth over the Q1, and you expect to return to growth already as soon as in the Q2 of the fiscal year 27. My question is, what has changed between the first and the second quarter that makes you believe there will be a significant, or let's say, material improvement already in the Q2? The second one is maybe, again, a little bit of color on trading update and visibility on the full-year guidance.

Speaker #4: If I'm correct, you mentioned that you saw an organic net of disposals growth basically flat growth over the first quarter, and you expect to return to growth already as soon as in the second quarter of the fiscal year 2027.

Speaker #4: So, my question is: What has changed between the first and the second quarter that makes you believe there will be a significant—or, let's say, material—improvement already in the second quarter?

Speaker #4: And the second one, if maybe, again, a little bit of color on the trading update and visibility on the full-year guidance. So, if I remember correctly, during the July call, with the fiscal year 2026 results, you mentioned that, as usual, you are maybe a little bit conservative with the guidance and that there could be some room for ending up at the upper end of the guidance.

Aleksandra Arsova: So if I remember correctly, during the July call, with the FY26 results, you mentioned that, as usual, you are a little bit maybe conservative with the guidance and that there could be some room for ending up in the upper end of the guidance. Do you still see room for ending up in the upper end? Which are the main moving parts you see in the coming quarters? Thank you.

Speaker #4: So, do you still see room for ending up in the upper end, and which are the main moving parts you see in the coming quarters?

Speaker #4: Thank you.

Speaker #2: Good afternoon. Thank you for the call, Alexandra. So first of all, our view of software system integration is very positive due to the backlog order and the strong job we did in the first quarter.

Alessandro Fabbroni: Good afternoon. Thank you for the call, Aleksandra. First of all, our view of Software and System Integration is a very positive view due to the backlog order and the strong job we did in the first quarter. First of all, we highlight that the first quarter results are fully in line with our Industrial Plan that provide an estimate of low single-digit growth both in revenues and profitability. It is true that in comparison with the last quarter, Q1 2026, we reported a negative trend. So revenue declining 3%, EBITDA 2%, but net profit just 1%. I remember that in Q1 2026, we started with a down in net profitability of 26%. That means we improve in a strong way the skills, the competencies, and also bottom line, we are working with the perspective to grow year-on-year.

Speaker #2: So first of all, we highlight that the first quarter results are fully in line with our industrial plan, which provides an estimate of low single-digit growth both in revenues and profitability.

Speaker #2: It's true that, in comparison with the last quarter, Q1 2026, we reported a negative trend—revenue declining 3%, EBITDA 2%, but net profit just 1%.

Speaker #2: And I remember that in Q1 2026, we started with a decline in net profitability of 26%. So that means we improved in a strong way the skills, the competencies, and also the bottom line.

Speaker #2: We are working with the perspective to grow year on year. So, in the second quarter, we expect to recover, in particular in areas like technology and integration services.

Alessandro Fabbroni: In the second quarter, we expect to recover, in particular, in area like technology and integration services. That represent an opportunity to recover overall, and grow low single digit quarter by quarter and year-on-year starting from the Q2. We started the first quarter overall with the path that is in the mid of our guidance. The trend, the strong momentum we continue to have in ICT VAS, and the positive performance of Business Services, the expectation of recovery in Software and System Integration are positive sign for the future potential upgrade of our guidance. That, in any case, is confirmed today. Thank you for the question.

Speaker #2: And so that represents an opportunity to recover overall, growing low single digits quarter by quarter and year on year, starting from Q2. We started the first quarter overall.

Speaker #2: With the path that is in the middle of our guidance, the trend, the strong momentum we continue to have in ICT, VAS, and the positive performance of business services, the expectation of recovery in software system integration are positive signs for the future potential upgrade of our guidance.

Speaker #2: That, in any case, is confirmed today. Thank you for the question.

Speaker #3: The next question comes from Tommaso Niedu with Kepler Chevreux. Please go ahead.

Operator 2: The next question comes from Tommaso Nieddu with Kepler Cheuvreux. Please go ahead.

Operator: The next question comes from Tommaso Nieddu with Kepler Cheuvreux. Please go ahead.

Speaker #2: Hello, and thank you very much for taking my questions. Both of my questions are about margin, as I think they are the main highlight of these results.

Tommaso Nieddu: Hello, and thank you a lot for taking my questions. Both my questions are on margin, as I think they are the main highlight of these results. The first one is on Business Services. We are seeing continuous margin gains in that segment. At what point do you think the segment's margin should normalize versus continuing to expand structurally? That is the first one. The second one is on Digital Green VAS, as we expect continuous margin expansion as well as you are integrating Greensun. The comparison with last year is to an expansion of 40 basis points. Is 40 basis points the run rate we should expect throughout the year, so 2027 versus 2026? Thank you.

Speaker #2: So the first one is on business services. I mean, we are seeing continuous margin gains in that segment. So at what point do you think the segment's margin should normalize versus continuing to expand structurally?

Speaker #2: That is the first one. And the second one is on Digital Green VAS, as we expect continuous margin expansion as well as you are integrating Green Sun, and the comparison with last year is an expansion of 40 basis points.

Speaker #2: Is 40 basis points the run rate we should expect throughout the year—so 2027 versus 2026? Thank you. Thank you for the question. In effect, we performed really well in business services and Green VAS, not only in terms of volume, but also in particular in terms of profitability.

Alessandro Fabbroni: Thank you for the question. In effect, we perform really well in Business Services and Digital Green VAS, not only in terms of volume, but also and in particular in terms of profitability. The good news is that in the Business Services, first of all, we grew double digit in terms of revenue. That is a pure and organic internal growth. That is the first time in that sector we grow double digit organically. That is the reason we managed to improve the marginality close to 20%. In particular, we improved to 21% the EBITDA marginality and around 10% the adjusting the profitability of revenue.

Speaker #2: So, the good news is that in the Business Services, first of all, we grew double-digit in terms of revenue. That is a pure and organic internal growth.

Speaker #2: That is the first time in that sector we have grown double digits organically. And so that is the reason we managed to improve the marginality to close to 20%.

Speaker #2: In particular, we improved EBITDA marginality to 21% and achieved around a 10% increase in adjusted profitability of revenue. We believe that it is crucial in this area to continue performing so well in terms of revenues.

Alessandro Fabbroni: We believe that it is crucial in that area to continue to perform so well in terms of revenues, because the possibility to develop revenues on the same platforms and applications is a potential driver of additional development of marginality. Now what we expect is to be able to confirm the good marginality ratio in terms of EBITDA achieved in Q1, and maybe to be able to increase quarter by quarter, thanks to so good path in terms of revenue. I remember that the so positive trend in revenues was driven by several multi-year agreements that we signed in FY26. We started benefiting from these new long-term agreements. It is difficult to be able to develop synergies and scale economies quarter by quarter because we are working on new multi-year agreements. Our expectation to continue to improve in that area.

Speaker #2: Because the possibility to develop revenues on the same platforms and applications is a potential driver of additional development of marginality. So now, what we expect is to be able to confirm the good marginality ratio in terms of EBITDA achieved in Q1, and maybe to be able to increase quarter by quarter thanks to such a good path in terms of revenue.

Speaker #2: I remember that the positive trend in revenues was driven by several multi-year agreements that we signed in FY2026, and so we started benefiting from these new long-term agreements.

Speaker #2: So, it is typical to be able to develop synergies and scale economies quarter by quarter because we are working on new multi-year agreements.

Speaker #2: So it is also our expectation to continue to improve in that area. As for the VAS Green, we increased 40 basis points thanks to the synergy coming from the merger between PMS Service and Green Sun.

Alessandro Fabbroni: As for the Digital Green VAS, we increase 40 basis points, thanks to the synergy coming from the merger between PM Service and Greensun. We believe that 6% may be a good EBITDA margin, combined with 3.5% of net profitability of revenues. We have a good leadership and market position thanks to this merger, and we will continue to work in that direction. But again, we may reassure that this marginality is sustainable also in the incoming quarter.

Speaker #2: We believe that a 6% EBITDA margin may be a good target, combined with a 3.5% net profitability of revenues. We have good leadership and market position thanks to this merger.

Speaker #2: And so we will continue to work in this direction. But again, we may reassure that this marginality is sustainable also in the coming quarter.

Tommaso Nieddu: Okay. Thank you.

Speaker #1: Okay. Thank you.

Speaker #2: Thank you.

Alessandro Fabbroni: Thank you.

Speaker #3: The next question comes from Pierandrea Randone with Intermonte. Please go ahead.

Operator 2: The next question comes from Andrea Randone with Intermonte. Please go ahead.

Operator: The next question comes from Andrea Randone with Intermonte. Please go ahead.

Speaker #4: Thank you, and good evening. My first question is about the impact of a rising cost of capital on your business model. I’ll try to be clear.

Andrea Randone: Thank you, and good evening. My first question is about the impact of a rising cost of capital on your business model. I try to be clear. In the past, when the cost of capital suddenly raised, you were impacted by some unexpected costs that were affecting, in part, your cash generation. Then you worked on this problem, you implemented the cash pooling, you rationalized the structure, but you also benefited by the fact that the cost of capital was going down. Now that the cost of capital is trending up again, how is the new corporate structure? We expect that you will face, in case this trend will continue, in a better mood with a stronger approach, this possible headwind. This is my expectation, so I wonder if you can elaborate on this factor.

Speaker #4: In the past, when the cost of capital suddenly rose, you were impacted by some unexpected costs that were affecting, in part, your cash generation.

Speaker #4: Then you worked on this problem. You implemented the cash pooling. You rationalized the structure. But you also benefited from the fact that the cost of capital was going down.

Speaker #4: Now that the cost of capital is trending up again, how is the new corporate structure we expect you will face—if this trend continues—in a better mood with a stronger approach to this possible headwind?

Speaker #4: But I mean, this is my expectation, so I wonder if you can elaborate on this factor. And the second question is, in general—I mean, you are mentioning again, and this is a positive—the good expectations for the ICTVAS.

Andrea Randone: The second question is, in general, you are mentioning again, and this is a positive, the good expectations for the ICT VAS. If you can go back to what are the main drivers suggesting this kind of confidence for the coming quarters. Thank you.

Speaker #4: If you can, go back to what are the main drivers suggesting this kind of confidence for the coming quarters. Thank you.

Speaker #2: Thank you for the questions, Andrea. So first of all, the point of our cost of capital. I remember that today we are in a situation that is completely different from the situation we were in three years ago.

Alessandro Fabbroni: Thank you for the questions, Andrea. First of all, the point of our cost of capital. I remember that today we are in a situation that is completely different of the situation we was 3 years ago, in particular in terms of cash flow generation. It is the 4 consecutive quarter that we confirm a last 12 months operating cash flow of around EUR 200 million. In the last 12 months, we generated around EUR 80 million of free cash flow. We improve our net financial position constantly, and we distributed last 12 months around EUR 40 million, including buyback and dividend distribution. There's a different situation because our group is generating cash flow in significant way.

Speaker #2: In particular, in terms of cash flow generation, this is the fourth consecutive quarter that we confirm a last 12 months operating cash flow of around €200 million.

Speaker #2: So, in the last 12 months, we generated around €80 million of free cash flow. We improved our net financial position constantly, and we distributed, in the last 12 months, around €40 million, including buyback and dividend distribution.

Speaker #2: So, there's a different situation because our group is generating cash flow in a significant way. The second point is that, finally, this is also changing our group structure.

Alessandro Fabbroni: The second point is that, finally, is changing also our group structure because we are reducing a lot the number of legal entities, and so we are in different conditions in terms of balancing a potential additional increase of cost of capital. Obviously, we was working in the last quarter in that condition because the cost of capital has been already increased in the beginning of last quarter. In the Q1 2027, in any case, we had EUR 7.5 million of net financial charges with a decline of EUR 1 million in comparison with the Q4 2026, and with a very slight increase, EUR 300,000 in comparison with EUR 7.2 million of Q1 2026. It's clear that we are not completely out of the effect of an increase of interest rate, but we have in conditions completely different of the condition we was 3 years ago.

Speaker #2: Because we are reducing a lot the number of legal entities, we are in different conditions in terms of balancing potential additional increases in cost of capital, obviously.

Speaker #2: We were working in the last quarter in that condition because the cost of capital had already increased at the beginning of the last quarter.

Speaker #2: And in Q1 2027, in any case, we had €7.5 million of net financial charges, with a decline of €1 million in comparison with Q4 2026, and with a very slight increase of €300,000 in comparison with €7.2 million in Q1 2026.

Speaker #2: So it's clear that we are not completely out of the effect of an increase of interest rates, but we are in conditions completely different from the conditions we were in three years ago.

Speaker #2: Another point: the positive trend of our ICTVAS. We are performing really well in terms of growth, and also in terms of gaining profitability and marginality.

Alessandro Fabbroni: Another point, the positive trend of our ICT VAS. We are performing really well in terms of growth, in terms also of gaining profitability and marginality. There's a new market scenario with a great demand of data management and also data protection. The progressive adoption of AI is generating structural demand for data strategy. In particular, there's a more and more clear the necessity for any company and organization to develop data strategy, and private data management. The so-called digital sovereignty does not mean to be independent in the management of technology and infrastructure. That means, in particular, to be able to orchestrate and to be able to integrate different layer of technology. The role of the distributor is more and more strategic because distributor is the ideal partner in order to aggregate, to enable this particular phase of the market.

Speaker #2: So, there's a new market scenario with a great demand for data management and also data protection. And so, the progressive adoption of AI is generating structural demand for data strategy.

Speaker #2: In particular, it’s becoming increasingly clear that any company or organization needs to develop a data strategy and manage private data. So, so-called digital sovereignty does not mean being independent in the management of technology and infrastructure.

Speaker #2: So, that means, in particular, being able to orchestrate and to integrate different layers of technology. So, the role of the distributor is becoming more and more strategic, because the distributor is the ideal partner to aggregate and enable this particular phase of the market.

Alessandro Fabbroni: The expectation of the market is to grow around 2%, 3%, and we are gaining market share because we are growing 8%, and we started really well also the new quarter, Q2 2027. We are really positive in that view for coming quarters.

Speaker #2: The expectation of the market is to grow around 2–3%. And we are gaining market share because we are growing by 8%. And we also started the new quarter really well.

Speaker #2: So, the second quarter of 2027. We are really positive in that view for the coming quarters.

Speaker #4: Many thanks, Alessandro. I just have a very quick additional question. I saw that there was a merger between the two holding companies into the new holding, which is now SeSa Holding.

Andrea Randone: Many thanks, Alessandro. I just have a very quick additional question. I saw that there was a merger between the two holding companies into the new holding, now is the Sesa Holding. Do you have any particular comment on this kind of transaction, or it is just a simplification?

Speaker #4: Do you have any particular comment on this kind of transaction, or is it just a simplification?

Speaker #2: There's a simplification, but also a strategic reason to be identified as SeSa Holding, as a long-term, strategic, long-term owner of SeSa. And at the same time, I would like to underline that we have continued to increase our share as SeSa Holding in SeSa. Starting from 52.8% about 18 months ago, we have achieved around 57.1%.

Alessandro Fabbroni: There is a simplification, but also a strategic reason to be identified as Sesa Holding, as long-term owner of Sesa. At the same time, I would like to underline that we have continued to increase our share as Sesa Holding in Sesa, starting from the 52.8% of 18 months ago, we achieved around 57.1%, and we will continue to increase our stake.

Speaker #2: We will continue to increase our stake.

Speaker #4: Thank you. Thank you again.

Andrea Randone: Thank you. Thank you again.

Speaker #2: Thank you.

Alessandro Fabbroni: Thank you.

Speaker #1: As a reminder, if you wish to register for a question, please press star one on your telephone. For any further questions, please press star one on your telephone.

Operator 2: As a reminder, if you wish to register for a question, please press Star and One on your telephone. For any further questions, please press Star and One on your telephone. Mr. Fabbroni, there are no more questions registered at this time.

Operator: As a reminder, if you wish to register for a question, please press Star and One on your telephone. For any further questions, please press Star and One on your telephone. Mr. Fabbroni, there are no more questions registered at this time.

Speaker #1: Mr. Fabroni, there are no more questions registered at this time.

Alessandro Fabbroni: We would like to thank again all participants, and we will stay available, obviously, for any additional request for information. Tonight and also tomorrow, we are organizing several calls with our stakeholders. We are available together with Jacopo for organizing them. Thank you again, and good evening, everybody. Thank you very much.

Speaker #2: So, we would like to thank again all participants, and we will stay available, obviously, for any additional requests for information. Tonight, and also tomorrow, we are organizing several calls with our stakeholders.

Speaker #2: We are available, together with Iacopo, for organizing them. Thank you again, and good evening, everybody.

Speaker #4: Thank you very much.

Operator 2: Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you.

Operator: Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you.