BREAKING NEWS – 05.08.2024

In the press release dated July 31st, 2024, Convergenze SpA – a Benefit Corporation active in the 100% green Telecommunications and Energy sectors, present nationwide through the patented EVO (Electric Vehicle Only) network and the proprietary fiber optic network with innovative XGS-PON technology, and listed on the Euronext Growth Milan market – announced its revenues as of June 30th, 2024, along with some of the main corporate KPIs, which have not been audited. Convergenze concluded the first half of 2024 with revenues of approximately €12.00 million, recording a growth of 15.3% compared to €10.40 million in the same period of 2023. In detail, the TLC Business Unit generated revenues of €5.60 million, an increase of 14.3% compared to €4.90 million in the first half of 2023, while the Energy BU recorded revenues of €6.50 million, growing by 18.2% compared to €5.50 million in the same period of 2023. In the first half of 2024, over 63,500 services were contracted, with more than 52,000 for the TLC Business Unit and nearly 11,500 for the Energy Business Unit, growing by 5.5% and 12.4% respectively compared to the same period last year. Thanks to the increase in customer profiles following the acquisition of the customer portfolio from its subsidiary Positivo Srl, the percentage of users on the proprietary FTTH and Wi-Fi network slightly increased, reaching 50.3% compared to 50.0% as of March 31st, 2024. The proprietary fiber optic network further expanded in the first six months of 2024, reaching over 10,600 km, an increase of 15.2% compared to over 9,200 km as of December 31st, 2023. Additionally, in 1H24, the number of PODs increased to over 10,000, compared to over 9,800 at the end of March 2024, and 17.50 million kWh were sold, growing by 15.1% compared to 15.20 million kWh in the first half of 2023. The press release also reports management’s estimates regarding the EBITDA margin of the individual Business Units in the first six months of 2024. For the TLC Business Unit, the estimated EBITDA margin shows growth compared to the figures as of June 30th, 2023, ranging between 30.0% and 31.0% (1H23A figure of 26.8%). For the Energy Business Unit, management also expects growth in margin compared to the negative margin in the first half of 2023, estimating it to range between 8.0% and 9.0%. The continuous growth of the Company’s historically active business lines, along with the progressive expansion of the fiber optic network, the user base on the proprietary FTTH and Wi-Fi network, and the number of PODs, demonstrates the company’s constant progress and the positive evolution of its results, in line with the objectives of its development plan, further strengthening our positive outlook on the stock. Pending a detailed evaluation of the half-year results with management, we confirm our recommendation: target price €4.25, rating BUY, and risk Medium.

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