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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
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Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the WIIT Full Year 2021 Results Conference Call. [Operator Instructions] I would like to turn the conference over to Mr. Alessandro Cozzi, CEO. Please go ahead, sir.
Good afternoon, and thanks, everybody, for joining in the conference call. As Q4 delay to the disclosure the presentation where we have some problem with the English translator. And I sent to you the presentation, and you can follow the presentation I sent. So this morning, Board of Directors of WIIT approved the full results of 2021. I start with the highlights, you can saw follow-up the presentation, we can start from the Slide #3.
Positive growth in sales. We grew 46.8%, thanks to strong organic growth, 12% higher than the previous year. Extension of the existing contract and signed contract with myLoc. Very, very good performance comes from German companies and the margin -- total margin of level group growing up to 38%. Total revenue was EUR 770 million compared with EUR 52.5 million in 2020, plus 46%. And in this consolidated revenue is included only 2 months of the last acquisition of Gecko and Boreus and only 5 months of Mivitec business. Later, we can see pro forma results when we include all the figures about the all acquired company.
Consolidated EBITDA was EUR 29.6 million, exactly in line with our expectations compared with EUR 18.3 million in 2020, plus 61%. Thanks to the current scale of our business in terms of services and the high level of optimization about the organization of process. Cost synergy because we start to achieve the cost synergy of the company in Italy, and we start to improve the synergy from the first -- the second position of Germany, Mivitec during the first year. The margin of revenue was 38.3%, up from 34.8% last year. Consolidate adjusted EBIT was EUR 15.5 million. All the high line, the top end was totally in line with our budget. And this is probably not on this presentation, [ 69% ] is not okay. We can -- sorry the presentation is [ misleading ] information about 2020, plus 71% compared 2020 and the margin revenue was 20.1% with an improvement compared with the previous year and this is despite higher increase of depreciation and amortizing of the new acquiring company and the CapEx we do last year. Adjusted net profit of EUR 9.2 million, plus 50% compared to the 2020. Adjusted net financial position included the IFRS 16 impact of the rent of the space for approximately EUR 10 million. The debt was (sic) [ EUR 139.9 million ] compared with EUR 95 million. In this number, we don't include the value of the treasury share. If we take the value at -- the market value by the end of the 2020 was EUR 45.9 million. So EUR 140 million is the gross debt. If you deduct EUR 45 million, the really net debt of the company was below EUR 100 million -- below EUR 95 million. In this debt, it's issue for new bond for EUR 150 million. We issued the bond in October last year. And there is a total -- the top acquisition value of the acquisition of the Mivitec, Boreus, and Gecko for a total EUR 77 million.
Okay. You can follow now the important -- the chart #5, then you can see the pro forma result. In this chart, in these figures, these numbers, we include the business of Mivitec, Gecko and Boreus since first January 2021. In this case, the full year pro forma result was -- the revenue was EUR 102.9 million and EBITDA adjusted was EUR 36.7 million. EBITDA margin was 35.4%. Slide -- after follow -- you can see the revenue -- reported revenue was EUR 77 million constantly growing the market. The market goes faster still, 10%, but with proforma a little better of the market, 12%. This means -- and we increased a little bit the CapEx to support our organic growth. And the organic growth continued to be strongly in the first quarter. For this reason, our assumption, our old assumption to -- about our organic growth was high single digits from 7% to 9%. At the moment, our expectation is to increase our organic growth in the range from 10% to 12%, the same of the last year.
Cross selling on acquired company and acquisition new customer in all the area, we continue to cross sell our high-value services on the customer base of the acquiring company. And the contribute of myLoc was EUR 19.1 million full year and the Mivitec only 5 months, EUR 1.6 million, Gecko and Boreus only EUR 5.3 million because the consolidation started January 1 -- November 1.
Okay. The breakdown of the EBITDA in the chart #7. EBITDA grew strongly, 61% more than the revenue because the reason we called it weak remain concentrated on our core business, we reduced little low-value service of product revenue, and we optimized the process and leverage more of our operationing services organization, marginally down. With self, margin remain stable, 42.9% to 42.6%. Matika margin increased from 27.2% to 30%.
Etaeria is our under channel in Italy increased from 19.5% to 25.4%. Adelante is our company operating center in Italy from 21% to 22.9%, 23%. myLoc, our first acquisition in Germany increased from 43.9% to 47.2%. Mivitec margin is the new acquisition is 21% and of course, naturally in this EBITDA margin don't include any type of synergy, but we have adjusted refi EUR 1.5 million, and we have just achieved EUR 1 million for the current year. Our expectation to Mivitec is increased margin over 35% for the current year.
Boreus margin was very, very, very great, well numbers. 37% is an excellent starting point and Gecko margin was 30%. The adjustment items of the cost is (sic) [ EUR 0.7 million ] cost related to the integration of purchase price of 20% of the share capital of Matika EUR 1.2 million about the last option. And we have something costs about the stock option and stock grant plans and EUR 3 million in large part is related to M&A transaction to business costs at advisory cost.
Net debt, the #8, the chart #8, the debt -- the gross net debt was EUR 139.9 million exactly in line with our expectation. Increase, of course, from EUR 95 million of the previous year, but had to consider that we have a capital increase in June 2021 from basically EUR 25 million, a strong operational cash flow. We have -- I will just anticipate a IFRS impact -- IFRS 16 for roughly EUR 10.7 million. CapEx expenditure approximately EUR 21 million, a little higher than the -- than the estimation for 2 -- mainly 2 reasons: the change in the perimeter of the company because we closed a new acquisition in November; and more organic growth means more CapEx when we start the new relation with new customer. We have always said the CapEx, the first year when we signed a contract and we signed 2 important contracts, one in October with the Gecko and the second one in end of December would import our international retail company, and we had to do CapEx upfront and before we signed the contract.
Another topic worth today to share, the buyback for EUR 6.4 million and paying a dividend for EUR 3.2 million and I just anticipate EUR 77 million is the large part of the increase of the debt is related to M&A activity and [ EUR 77 million ] is the total cost of the acquisition for the 3 companies. The total share value was EUR 45.9 million is just included in the net debt.
Okay. We are ready for Q&A session. With me here is Enrico Rampin for the sales perspective and in the case, Pasotto for financial aspect. Thanks, sir, and...
[Operator Instructions] The first question is from Giorgio Tavolini of Intermonte.
I was wondering if you can share with us some indication on the backlog at the beginning of the year. And the second question is on the growth rate. You were mentioning that you may achieve mid- to high single-digit growth for 2022. Is that correct? And in particular, if you can split between Germany and Italy. If there are, I mean, some differences in the growth profile for the top line. And the third one is on the cost inflation, if you see any challenge on the electricity costs you were mentioning before. You have quite a safe situation, but I was wondering if you see any particular risk or not?
Okay. About the backlog, we disclosed the market the value is EUR 135 million. You see the data inside of release. [indiscernible] is increased compared with last year for 2 main reasons: weak outcomes from the highest level of booking over the last 5 years. And then of course, we have the record of the booking increased the backlog. But in general, the German company contribute as well in terms of our backlog.
I confirm the second question about organic growth. I confirm our expectation for 2022 organic growth will be in the range from 10% to 12% in Italy. In Germany, we have 2 different situations. The first acquisition of myLoc and Mivitec will be growth in the same organic growth of [ 10% ]. The last company we acquired, at the moment is not growing stable about the revenue. So our estimation in the Germany, the Germany consider that German revenue is roughly EUR 55 million [indiscernible]. The half of them grew 10% and the half remains stable.
About cost inflation, the third question, we are a little fortunate because the weekly before the war in Germany, when we have the maximum exposure in terms of cost of energy, we fixed the price for 4 years of 2022 to '23, '24 and '25. And we have the reference to have the same price -- fixed price for 4 years. And this is a very, very [ fortunate ] because in Germany, the cost of energy is the material because we consider that we have EUR 9 million over all yearly of cost energy, EUR 8 million is in Germany. In Italy, it's only EUR 1 million, with this contract -- semi-contract with [indiscernible] carrier. We have the guarantee to have impact in terms of peak of cost energy for the next 4 years.
The next question is from Domenico Ghilotti of Equita. Mr. Ghilotti of Equita.
The next question is from Michele Baldelli of BNP Paribas.
I have a question on the CapEx for 2022. Basically, what kind of level should we assume? And how much of this is related to the later enforcement with the Tier 4 data center in Germany. And then just first check to understand well the contribution of the companies acquired in the last couple of years to the total turnover in 2021. If I'm not wrong, we should assume 1/4 of myLoc and then this EUR 5.3 million of Gecko and Boreus and Mivitec, EUR 1.6 million. Basically, this is the additional turnover for 2021 compared to 2020. Can you confirm or amend my statement?
Sorry, but the quality of audio is very, very poor. I understand the first question about the CapEx, but the second one.
Maybe the line was very bad.
No, I'm sorry. Yes. Shifting from the...
Now is much better.
That's better. [indiscernible]
The other is not at the same level of yours. So basically, the contribution in 2021 from the acquisitions that you have made in the last 2 years, so meaning myLoc should have contributed an additional quarter if I'm not wrong in 2021. Mivitec issued have contributed by this EUR 1.6 million and Gecko and Boreus by just EUR 5.3 million. Is this correct? [indiscernible] from M&A?
The myLoc contribution is the full year because we acquired myLoc.
But in 2020, it was consolidated for 9 months or not?
No, we consider only 1 quarter because the closing date was, first of all [indiscernible] 2020, for the one quarter. Gecko and Boreus contribution in 2021 only 2 months, okay? Mivitec from August, 5 months.
Consider, Michele, consider that in the press release, we gave the indication of the pro forma 2021 numbers for Mivitec and Gecko and Boreus just to give you an idea of the starting point in terms of revenues and EBITDA.
Yes. Okay. That's useful. Sorry, I received it [indiscernible]
Everything was a little late today. So probably you didn't have the occasion to read the press release before the conference. So this is the reason of those questions.
So the first question, CapEx '22. At the moment, we estimate to increase our CapEx in the range of EUR 30 million to EUR 32 million for 2 main reasons. The first, I anticipate our expectation is to increase the organic growth, right? And the second, we include, of course, the acquisition of Mivitec. We signed demanding contract in February. Our expectation is to have closing in the next 2, 3 weeks. So for this, we have a different parameter in terms of company, Mivitec in more CapEx, and we had to increase this in the CapEx for the strong organic growth.
Okay. It's useful. Thank you very much.
About the Q4, the second question, the total cost of the [indiscernible] the German one and -- the building of the new Tier 4 in Italy will be EUR 12 million. So we have EUR 30 million, EUR 32 million total CapEx, EUR 12 million are extraordinary CapEx to build the new building and new center. EUR 20 million is the normal CapEx in to [indiscernible] extraordinary.
The next question is from Domenico Ghilotti of Equita.
Can you hear me?
Yes. Yes.
Okay. Sorry about the problem in the previous question. Well, I'm starting with the energy -- a follow-up on the energy prices. So I understand that you are fixing the energy prices for the next 4 -- basically 4 years, including 2022. But what is the ramp-up compared to 2021? And do you think that you can manage your profitability despite this increase that I would expect compared to 2021 in energy prices?
The second question is on the Release 42 integration. Stability for sure, in the top line for this year. When do you expect to see to be able to restart to revamp growth in Release 42? And there is any comment that we should be aware about the integration process. Third question is on the situation. Well, if you have seen a situation on a -- geopolitical situation, if you have seen any impact on the business confidence on the operations that is affecting your business? And what probably just on the WIIT S.p.A. So on the holding company, so the stable profitability despite, I presume, a good organic growth. What has been the reason behind that?
Okay. Starting from energy issue. But at the moment, we increased the total cost of energy but we have a pass-through from large part of the increased cost of energy. We compensate a large part of the cost with the [indiscernible] of the customer and for the strong organic growth. We don't have the impact in myLoc for 2022, but we have the in the pocket, EUR 1 million in case of auditors accept the averaging of the cost of the energy portfolios. At the moment, in our business plan, we have only the real cost fixed for the 2022, for example, but we have just fixed a low price for the 4 years. In case of auditors, the question is not only from WIIT, you can imagine for all the companies with a large consumption of energy asked by auditors to averaging the cost for 4 years.
In the next 2 or 3 months, we have a response if all the companies used to averaging because -- in case it's in positive -- in case of positive use of this accounting, we have roughly EUR 1 million or more in our pocket. At the moment, what is our approach is the conservative but without impact in terms of EBITDA.
[indiscernible], we have canceled [indiscernible] brands because we -- last week, we was in Germany to disclose the market WIIT [indiscernible] is the new logo we want to use in Germany to sell our critical services. All the margin team are involved to promote our brand WIIT with German level, [indiscernible] start to share with all the sales in Germany, the same offering and the same model of business of WIIT. And the good news is in the first 3 months of the year, we just signed a first contract in Germany for Cloud critical application, means [indiscernible] application and...
In general, the situation is that as you -- as we have already shared in previous calls, we onboarded a new system dedicated to premium sales. At least 42 joined the company just in the last quarter of the last year. But in the kickoff, we had -- last week in Germany, we are creating a cross-company team to achieve new better results. Release 42 was not previously used to have sales team dedicated to the growth. This is the reason why the -- one of the main reasons why they were stable.
While on the other side, we expect in general, not only the upselling, cross-selling that is starting as shared with Alessandro. But personally, I strongly believe in the new logos. So one of the main focus I gave to the team is, guys, we want to reach new logos in Germany.
In general, just a bit of color on the organic growth that we already shared. In Italy, the organic growth was strong for a different reason. Of course, as you know, in the Hybrid Cloud model plus the cybersecurity are very hot topics on the desk of the CEO. So the growth was very strong. Upsell in general, new logos in Italy with itself was close to 60% into the total booking. So very, very strong, but also at the group level, the new logos are pretty good consider in a way that we are investing more into the market in marketing activities. So the visibility of the brand in Italy is becoming higher and higher.
And the acquisition of ERPTech in that sense will increase the visibility of the company in Italy. We will attend in the next week at CloudFest. That is the most important event in Europe. I've seen just in this list a few minutes ago, we expected more than 5,000 people. So this is another important opportunity for the brand awareness of WIIT into the German market.
In general, our expectation is the last acquisition companies and Boreus and Gecko will be -- we started organic growth like myLoc by end of this year. So at the moment, we are higher -- new sales. We are hiring. We started marketing activity. In general, we need 6 to 8 months to start impact on the revenues is expected for 2023 -- starting from 2023.
About the first question about geopolitical aspects in Ukraine. We don't have impact because we don't have customers in these areas. We don't have operation -- supply in this area. The only single aspect is related to [indiscernible] Russia [indiscernible], but we are switching with another provider [indiscernible]. We don't see a material impact.
About the question of the EBITDA, WIIT remain stable, yes. But the reason is that we decided to increase a lot the marketing cost. We -- 2 times compared to last year. We increased a lot of the marketing to reinforce the brand awareness. I imagine you see our spot in Sky television ad to premium Cloud, but not only broadcasting in general, something more -- events -- in general, for the 2022 budgets, we increased the marketing margins from -- it was below EUR 1 million to near to EUR 2 million this year. And all these costs are accountable in the WIIT self-margin. This is the main reason why the margin remain stable. We will increase the market.
Okay. And my follow-up, just on the hiring process. So how do you see the market? So the -- say, you are struggling to keep your talent, both in Italy and Germany? Or is it improving? So what is the situation there?
Distribution is more easier to be honest. In Germany, in particular, the churn rate average is up to 10%. Fortunately, we are basically in the very north side Germany, when there is -- we are very close to [indiscernible]. And in this area, the churn is lower of the average in Germany. In Dusseldorf, it's not enough [indiscernible]. The company is attractive, but it's not either. It's a general problem in our industry. It's not only...
Yes. But in general, I consider the unemployment is below 3%.
So okay. In Italy, especially it goes better because retail at the moment is very, very attractive for the employees. And the merge of all the Italian companies, we have approval last day help us to create most competence center and reinforce the skills in the [indiscernible] because we had a lot of same skills in different locations and the merge of the company, sure, create efficiency and we have created a lot of a new competence centers and the competence center help us to be more attractive for the new employees.
And in general, the integration across the group from an operational level means that the efficiency is impacting with lower hiring needed. And there is anyway, as you already shared this topic, we have an internal academy, WIIT Academy to train people and to let people grow in order to grant them on one side a career and the journey and path within the company that means to be attractive. On the other side is a way to build company awareness and growth in terms of skill and capability. That means on the other side, the reduction in terms of external competencies needed to be higher.
That situation, you would say, is similar to 2021 in terms of attractiveness of WIIT as an employer or...
But in general, the company is more and more attractive because the visibility is higher. The problem in Germany is the market that the shortage of the skill.
The company is more attractive over the time. I mean, to be honest, I mean, they help us a lot. ERPTech increased our full set of skills for other 45 employees. And so we need a lot of part of the ERPTech employees. M&A, I pass it to [indiscernible].
[Operator Instructions] The next question is from Paolo Cipriani of CP Capital.
Just a quick clarification regarding the organic growth. In the 9 months presentation, you were talking about 6%, 7% to 9% revenue growth, so single-digit, now it seems to be low double digit. From the business point of view, what is the change? Can you elaborate a bit further?
Okay. In our 9 month presentation, when we speak about 6% to 9% is related to the 2022, okay? The organic growth in the first 9 months was 11% and our expectation for the 2022 was 6%, 9%. At the moment, thanks to the high strongly booking of the 2021, we are more confident that 2022 will grow organic growth and we increased this range from 6% to 9% to 10% to 12%. The reason is a very strong booking comes from the last booking. And the first quarter continue remains strong, the booking...
Okay. And this 10%, you referred to WIIT only or the...
It's WIIT only and the same in the myLoc business. myLoc growth is the same, 12%. And this figures is about WIIT only. The last acquisition of Boreus and Gecko was stable.
The next question is a follow-up from Domenico Ghilotti of Equita.
Yes. Just you partially answered. So the fact that there is a concern or low visibility on what's going on is not really affecting the pipeline and the negotiations, if I understand from your new guidance in terms of organic growth for 2022. So you still say, good bookings and good negotiations. And you don't see clients that are postponing the decision or postponing the project.
At the moment, no. Fortunately, and we have a very, very quality in terms of pipeline at the moment. And in the next quarter, we have a success in terms of signing contract. We can -- in case to scale up a little bit in the guidance but not reduced. At the moment, we confirm our expectation for 2022. We can increase in case we sign a contract in the next first quarter. We have always a 6-month delay from the signing [indiscernible], depend a lot in which month we closed the contract. If we close in the first half of the year, we have just a material revenue in the 2022. If you close the contract in October, no, depends...
[indiscernible] handling the clients and also with the cost with the potential clients, there's no major concerns regarding the war impact. So it seems that clients still are committed on the projects and the projects they had on their priority agenda.
Mr. Cozzi, there are no more questions registered at this time.
Okay. Well, thanks, everybody, for joining, and see you soon, probably at the next [indiscernible] conference in Milan physically for [indiscernible]. And thanks, and...
Thank you. Bye.