BREAKING NEWS – 21.09.2023

In the press release dated September 14 2023, Softec announced the approval of the interim financial statements by the Board of Directors as at June 30 2023, a transaction of greater relevance with a related party and the updating of the procedure for transactions with related parties.  During the first part of the 2023 financial year, the Company generated: Net Revenues of € 2,61 million, compared to € 2,60 million in 1H22A (+0,2%); EBITDA equal to € – 5.000, compared to € – 0,20 million in 1H22A (+97,4%); EBIT equal to € – 0,16 million, compared to € – 0,52 million in 1H22A (+69,0%); Net Income equal to approximately € – 0,12 million, compared to € – 0,51 million in 1H22A 2021 (+77,5%); In the context of the balance sheet, NFP goes from € 3.23 million in FY22A to € 3.11 million in 1H23A. The economic results of 1H23A are all in clear improvement compared to 1H22A and so is the NFP compared to FY22A. The 1H23A results demonstrate the positive effects of the management transition project concluded last year. The latter allowed the Company to present a new value proposition to the market and a more effective organization, and therefore improved the income situation, bringing the EBITDA close to breakeven. Concerning NFP, it is possible to see how net current financial indebtedness has increased, while medium/long-term debt has reduced. It should be noted that the medium/long-term component of the debt deriving from the application of IFRS 16 “Leases” refers to the accounting of operating leases for the secondary office in Prato and for long-term rentals. It is highlighted that the Company’s Board of Directors has approved a related transaction of greater importance. In particular, this concerns a loan disbursement by the company Orizzonti Holding SpA in favor of Softec. The former is the majority shareholder of Beewize, which holds control of the company with 89.99% of the share capital. The overall amount of the transaction exceeds the significance threshold of 2.5%, therefore it appears as a transaction of “greater significance” according to the OPC EGM provisions, and was approved with the favorable opinion of the Independent Director as required by the Consob Regulation and the RPT Procedure. The company management also communicates its intention to continue to reinforce its technological products, with a strong focus on the Internet of Things, Blockchain, and Artificial Intelligence developments. Furthermore, there is great attention to the cost-effectiveness of management and the evaluation of growth across external lines also through the aggregation of synergistic industrial entities. On 14 September 2023, the Company’s management prepared an update to the 2023 – 2026 Business Plan. In particular, through the development of commercial activities and new initiatives undertaken, and of the new opportunities approved in the PNRR regarding investments in the digital economy, revenues are expected to reach the levels historically achieved by the Company and to return to profit in the 2024 financial year and then continue with positive and progressively growing results in 2025 and 2026. Furthermore, the management has also developed the financial planning for the period September 2023 – September 2024, approved by the Board of Directors, which provides for a cash requirement, deriving from operational and financial management, which is sustainable from the current forecast management. However, uncertainties remain due to the possible effects of the war between Russia and Ukraine and the realization of the hypotheses of the industrial plan, the realization of which also depends on events external to the Company. The parent company Orizzonti Holding Spa has communicated to the Board of Directors that it will continue to grant financial support to Softec, making the necessary resources available for a period of at least 12 months from the date of approval of the interim financial statements to June 30 2023. Based on what has been communicated, it should be noted that the Company is continuing its path of consolidation and development of the new strategic positioning. Waiting to know the future evolution of the Company and its growth prospects, we confirm our estimates: U/R recommendation, U/R Target Price, and Medium risk.

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