FINANCIAL PRESS RELEASES

comunicato | Rome, 29 March 2018

The Board of Directors of Engineering approves the Draft Financial Statements and the Consolidated Financial Statements

The major milestone of 1 billion in revenues has been exceeded. All the indicators are growing strongly. There are also positive predictions for 2018

  • TOTAL REVENUES are growing and stand at 1,028.8 million euros (+10.1%); (the proforma, fully consolidating the 2017 acquisitions is equal to 1,120 million euros)
  • The adjusted EBITDA is equal to 122.9 million euros + 13.5% (the proforma, fully consolidating the 2017 acquisitions is equal to 136 million euros)
  • The EBIT is equal to 64.8 million euros (+ 15.7%)
  • NET PROFIT amounted to 52.3 million euros (+ 15.3%)

The Board of Directors of Engineering Ingegneria Informatica SpA - a leader in Digital Transformation - approved the 2017 draft Financial Statements and the consolidated Financial Statements.
The year in conclusion saw Engineering operate with an articulated structure, the result of the careful acquisition policy implemented in recent years with the precise objective of defining an increasingly integrated and cutting edge supply, both nationally and internationally.

With 10,300 employees, and 50 offices distributed among Italy, Europe, Serbia, Latin America and the USA, the group leader, Engineering Ingegneria Informatica, directly and through its subsidiaries, plays a major consulting role in defining digitalization strategies for companies, large organizations and in the outsourcing market of services necessary to executing these strategies. Moreover, thanks to its four data centers located in Pont-Saint-Martin (AO), Turin, Vicenza, Milan - whose activities are controlled by the subsidiary Engineering D.HUB SpA - the Group is also at the forefront in supplying Cloud Computing solutions and services that guarantee the best standards of security, reliability and efficiency. Investments in Research & Development, which amounted to 30 million euros in 2017, make a significant contribute to the results. A substantial part of these investments is dedicated to the constant development of the Group's proprietary solutions, which confirm it as the leading producer of software on the Italian market. The renowned quality of its R&D activities also places Engineering at the head of important Italian and international consortia.

Michele Cinaglia, founder and Chairman of Engineering, declared: “The year ended gives credit to the constant investment approach that we have always pursued. Since 2000 we have invested approximately 500 million euros in the company, certain that this would have allowed the creation of an increasingly key reality for the digitization of our country and beyond."

Paolo Pandozy, CEO of Engineering, continued: "2017 has seen us reach and exceed all our preset objectives, but those we have set for 2018 are equally important and ambitious. For the ICT market, analysts predict growth of between 10% and 30% for the segments in which we have invested significantly, such as Big Data and Analytics, Cloud, IoT, Cyber Security, and where the entry into force of the GDPR will generate further demand. We are ready to seize all these opportunities, while at the same time generating new job opportunities. For the first half of 2018 alone, we have launched a recruitment of 500 people and we also expect the workforce to grow in line for the second half of the year".

MARKETS AND RESULTS
Engineering's offering is aimed at medium and large customers, both private (banking, insurance, industry, services and telecommunications) and public (healthcare, local, central and defense public administration).

The Engineering Group ended the year 2017 with double-digit growth in both revenues and profitability. The total revenues reached 1,028.8 million euros, up 10.1%. (The proforma, fully consolidating the 2017 acquisitions is equal to 1,120 million euros) The adjusted EBITDA is equal to 123 million euros, a growth of 13.5% with respect to the previous year (the proforma, fully consolidating the 2017 acquisitions is equal to 136 million euros)
EBIT amounted to €64.8 million, with an increase of 15.7% and a percentage profitability of around 6.5%. Finally, net profit amounted to € 52.3 million, up 15.3% on the same period of the previous year.

FINANCE
During the year, Engineering saw growth strengthened in the Finance market both in terms of business volumes and profitability, registering + 10.2% in terms of production value and + 23% EBITDA respectively. Results deriving from a policy that is attentive to market dynamics and the quality of the solutions and operating models proposed. Central to growth were the proprietary solutions, especially those based on the most advanced Big Data and Analytics technologies, which are enabling factors for new business processes, and solutions related to evolutionary regulatory developments, including IFRS9 and Anacredit.
In December 2017, the acquisition of the Infogroup Company, formerly part of the Intesa SanPaolo Group, was completed, which enriches the Group product offer for the finance market with solutions for Corporate Banking, Payment Systems and the Bank/ insurance. For 2018, the strategy aims to move forward along the road-map of its products' growth, with particular focus on consulting in the areas of Compliance, Governance, Risk, Customer, Credit, Payments, Insurance and Advisor and the transfer of innovative solutions in the Analytics, Robotic Process Automation, CyberSecurity and Cloud sectors.

PUBLIC ADMINISTRATION
The Group operates in the Public Administration market, both central, local, and Healthcare with a wide range of solutions that, over time, have generated added efficiency and value.
The Healthcare segment deserves particular attention and 2017 saw Engineering also consolidate its position through the renewal of multi-year contracts and the acquisition of important new customers. During the year, important investments were made in proprietary solutions in the clinical sector with the widespread use of machine learning techniques for the analysis of patient data.
Overall, the area recorded a growth of about 6% in terms of production value, while in terms of EBITDA it recorded a decrease of 6.8% compared to the previous year. This single indicator of negative performance reflects extraordinary conditions whose effect is counterbalanced by the awarding of important contracts that will produce their effects between 2018 and 2019, reaffirming Engineering's leadership in the Public Administration market.

INDUSTRY & SERVICES
The decisive recovery in company investments, also driven by the national plan for the digitalization of manufacturing companies, is reflected in the performance of Engineering, which in the segment in question recorded a growth in terms of production value of 8.8% and an EBITDA increase of 36.8%.
Through the renewal of D.HUB's offer, Engineering has seized the opportunity by bringing to market a proposal of innovative digital services ranging from RPA (Robotic Process Automation) to projects for cloud transformation of services to the new suite of products (DIVE) based on machine learning technologies for predictive maintenance and optimization of production processes. Thanks to the important acquisitions that the Group has made in Italy, Germany and the United States, Engineering is one of the few companies able to support companies in their production cycle, from the product design phase to production automation, as well as after-sales phases, where the predictive maintenance logics ensure the customer, in turn the ability to also offer value-added services.
It should also be emphasized that the new solutions based on the application of augmented reality techniques (GeoCall) are establishing themselves internationally as reference solutions in the area of the Work Force Management, completing, together with consolidated expertise in ERP and CRM, a unique offering for covering processes and geographical diffusion.

TELCO & UTILITIES
Finally, in the market with the highest rate of competition, such as that of TELCO, Engineering gathers the harvest of the offer's important diversification process and expansion of the customer portfolio that today includes, among the most significant activities , in addition to consulting, Revenue Sharing services with telephone operators (Mobile Payments, Centro Stella, Premium Services), participation in Vendor re-engineering processes, IT outsourcing, planning and reconstruction of ERP platforms and services for Billing and Assurance.
Thanks to the efficiency of the Net@suite and Geocall (OverIT) proprietary solutions - for which the Cloud versions based on the Group's Hybrid Cloud platform have been released - Engineering consolidated its position in the specific Utilities segment in 2017, confirming itself as one of the major players in this market. In particular, this year saw the Group enter the Spanish market with its first major customers, and start partnerships for the distribution of the aforementioned proprietary solutions. All this earned the most significant increase in terms of production value for the segment in question, which recorded a growth in terms of production value of 15.6% and 18.7% in margins.
Finally, confirming the constant ability to design new scenarios, 2018 saw the start of experimentation with certain leading customers of NILM (Non Intrusive Load Management) solutions for the analysis of consumption data, from which significant results are expected. This solution, unique on the market, takes advantage of the Group's expertise in the IoT and Machine Learning for the reading and interpretation of consumption data in order to attribute it to the apparatus/ appliance that generated it; a genuine revolution in the field of energy consumption control.