Good afternoon. This is the Carsco Conference Operator. Welcome and thank you for joining the Fiera Milano results at the 1st of September 2023. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Vincenzo Cecere, Head of Investment Relations and Sustainability of Fiera Milano. Please go ahead.
Good evening, everyone. Welcome and thank you for joining us today. This is Vincenzo Cecere speaking, Head of Investment Relations and Sustainability, and I'm here with Francesco Conci, CEO, and Massimo De Tullio, CFO of Fiera Milano. The purpose of the call is to provide you with an update on Fiera Milano's consolidated results for the first nine months of 2023. The presentation will be structured in four sections. During the first section, Mr. Francesco Conci will give you an overview of the business, main highlights, and 2023 outlook. Mr. Massimo De Tullio will go through the divisional results and financial figures in greater detail. On a final note, an update on sustainability will also be provided. At the end of the call, you will be invited for a Q&A session with management available for your questions.
At this point, I leave the floor to Francesco Conci for the key messages of nine months' results. Please, Francesco, go ahead.
Okay. Good evening, everyone, and thank you for joining the call today. I'm pleased to welcome you today to discuss Fiera Milano's very positive performance in the first nine months of 2023. In terms of key financial highlights, we have achieved remarkable growth. Revenues have reached EUR 177.8 million, reflecting an increase of EUR 16 million compared to the same period in 2022. EBITDA has experienced a significant boost, reaching EUR 56.2 million, marking an improvement of EUR 6.3 million compared to the first nine months of 2022. EBITDA also shows significant growth, amounting to EUR 17.8 million and an increase of EUR 3.7 million compared to the previous year. Net income standing at EUR 23.7 million has substantially leaped from the EUR 0.9 million recorded to the first nine months of 2022.
In terms of financial stream, our net cash at the end of September 2023 stands at EUR 61.5 million, significantly improving from EUR 29.8 million as of December 31, 2022. The results have exceeded expectations, outperforming our internal budget projection and the consensus of analysts, reaffirming our commitment to growth. We are pleased to report double-digit growth in revenue and EBITDA. Revenue has increased by 10%, while EBITDA has seen a significant 30% improvement when compared to the first nine months of 2022. Revenue for the Italian exhibition business has reached 93% of the 2019 levels, aligning precisely with market forecasts of AMMR, Advanced Market Research, the reference research provider for our industry. Furthermore, the square meters sold in Italy equal 87% of 2019 levels, again aligned to market forecasts. Net results have significantly improved compared to the first nine months of 2022, showing a positive trajectory in our financial performance.
During the period from December 31, 2022, to September 30, 2023, we have generated a substantial cash flow of EUR 31 million, contributing to our robust financial foundation. Looking ahead to the fourth quarter, where we organized the largest open exhibition HOST, the visibility we have reinforced our expectation of results exceeding the earlier projections. In conclusion, our remarkable performance in the past nine months and the visibility on the fourth quarter has given us the confidence to revise the target for the full year 2023. Revenues in the range of EUR 275-EUR 280 million, thus reaching the 2019 pre-pandemic level. EBITDA in the range of EUR 85-EUR 90 million. This is a significant improvement compared to our provision forecast of EUR 17-EUR 18 million. In addition, our financial stream and solid cash generation during this period provide us with the ability to set a higher target for net cash at year-end.
We are now targeting a range of EUR 55 million-EUR 60 million compared to the EUR 30 million recorded as of December 31, 2022. This projection for 2023 aligns with the forecast outlined in 2021 in our Strategic Plan Connect 2025, as evidence of Fiera Milano's ability to effectively navigate the challenging macroeconomic and socioeconomic dynamics occurring from 2021 to the present. Such as the decrease of energy prices will lead us to revise downloaders' EBITDA guidance some months ago. Looking ahead to 2024, in line with the Connect 2025 growth trajectory, we are honored to share that Fiera Milano has been selected to host CPMCHI, the world's largest pharmaceutical event. This exciting event is expected to draw over 50,000 visitors and 2,500 exhibitors from more than 700 countries. In addition to our economic and financial goals, we are still committed to develop a more sustainable business model.
They strengthen our governance and oversight of ESG matters. We are establishing a new sustainability committee within the board of directors working on defining the strategic guidelines for a new sustainability plan. In recognition of our increasing dedication in these issues, we are proud to announce that Fiera Milano has been honored with the Sustainability Awards Top ESG Score by Borsa Italiana. As a closing remark, I would also like to communicate that next week we are launching a share buyback program of 350,000 Treasury shares to serve a stock-based incentive plan for our top manager. At this point, I will leave the floor to Massimo for the business and financial review. Please, Massimo, go ahead.
Thanks, Francesco, and good evening, everybody. As Francesco already mentioned, the first nine months of 2023 delivered a very positive set of results. Let's have a deeper look at divisional level how these results were achieved. Moving to Italian exhibition business, it's important to highlight that compared to the pre-pandemic level, we are scoring a 92% recovery in terms of revenues, and this is in line with what AMR was forecasting for the Italian industry. Also, in terms of square meters, we are recovering almost 87% of the pre-pandemic levels, so 2019 levels, and this is as well in line with AMR forecast. Now, when looking at revenues for Italian exhibition business, we have an increase of almost EUR 15 million.
This increase compared to 2022, so nine months 2023 compared to nine months 2022, are showing this increase of EUR 15 million, which is almost due to increasing square meters and service penetration provided by Fiera Milano. It's important to outline that basically we didn't benefit from any particular material calendar effect in the first nine months of 2023. This increase in revenue is basically an increase in performance that we scored. In terms of details, let's say that the events that were contributing positively to this impact are basically the fashion industry ones and also the, let's say, multi-year pluriannual events like PLUST and ITMA. Now, moving to the foreign exhibition business, we had EUR 3.1 million of revenues compared to the EUR 5.1 million revenues in 2022.
This decrease is not, let's say, due to a reduction or a negative performance of the events that were hosted in 2023 compared to 2022, but is due to a, let's say, calendar impact because we didn't have in 2023 some events that we hosted in 2022, and especially in Brazil, like PESCO, RIATEC, and EBRATS. While if we look at the, let's say, performance of the events that we had this year in 2023 and we had also in 2022, we scored a positive performance of these events. Moving to the EBITDA, the EBITDA is improving by close to EUR 3 million, so EUR 2.9 million compared to the previous year, and this impact is mainly due to the China JV, so the JV we done over with all the legal entities we control in China.
Looking at, let's say, the main events that performed very well this year compared to last year, we have to speak about Domotex. Clearly, we have to, let's say, outline that in China this year we are restarting completely the business compared to what happened last year, in which we were almost stuck during all the year. When looking at the performance of the congresses, again, we are speaking about a positive performance. We see an increase in revenues of almost EUR 4 million compared to the nine months of 2022, and this impact in revenues is also reflecting, is causing, let's say, a positive impact also in terms of EBITDA, which is passing from EUR 9.7 million to EUR 10.5 million. Again, we had very important congresses that we hosted this year, like HIOLA, the Rheumatology One, and the Urology One, the UAE.
We hosted, let's say, despite we didn't have some impact, the positive impact of some congresses that we hosted last year, such as EADV and ESCRS, we posted anyway a positive result in 2023. I want, at global level, to highlight that basically we are very, if we look at the total of the division, we are scoring EUR 178 million in the first nine months of 2023 compared to EUR 184 million in the first nine months of 2019. Basically we are only 3% behind the, let's say, the level of revenues that we had in 2019 here with no impact from clearly the COVID. We are very, let's say, proud of being in this position after nine years.
Let's say, can we move Vincenzo to the I'm going to provide now a deep overview on the economic performance of the first nine months moving to the P&L. Basically, we had revenues for EUR 178 million compared to EUR 162 million in 2022, as already shown in the divisional view. It's a very remarkable increase driven both from performance of events and congresses. In terms of events, we had positive impact from Milano Unica, Linea Pelle, MICAM, and Omni Fashion & Jewels, so all the events, let's say, related to the fashion industry, and also, as already stated, the positive impact of the multi-annual events like ITMA and PLUST. Despite, let's say, the absence in 2023 of Mostra Convegno Expocomfort and Innovation Alliance, basically we were able to score an increase in revenues.
This increase in revenues, which is also due to the congresses, as already stated, could and impacted positively clearly also the EBITDA, which was passing from EUR 49.9 million to EUR 56.2 million. An increase of EUR 6.3 million in EBITDA, basically due to an increase in performance. Clearly, in this increase in EBITDA, there was a positive, let's say, role played by our JV in Hanover because, as already stated, the complete restart of the China's exhibition has brought a positive impact of almost EUR 3 million. In terms of financial management, we have improved, let's say, we had a good result in terms of cash generation. We generated, let's say, almost EUR 30 million, and clearly this was, let's say, invested in some, let's say, tactical activities like time deposit, impacted positively also on the, let's say, on the financial management and on the financial income and expenses.
Basically then, looking at the bottom lines of the net result, we are registering a EUR 23.7 million positive result. Clearly, there is the impact in that net income of the Tutto Foods operation, and so the, let's say, for acquisition of the participation in Fiera di Parma and the, let's say, so the impact of the operation. If we look at the net result without considering, let's say, the discontinued operation, anyway, we scored EUR 7.2 million net result in the first nine months of 2023, which compared to the EUR 0.9 million of 2022 represents a very huge increase in terms of net income. Now, if we move to the balance sheet, I would like just to focus on three main aspects.
In terms of non-current assets, we had an increase from EUR 560 million to EUR 571 million, and this increase is basically due to the stake in Fiera di Parma that we acquired as a consequence of the operation on Tutto Foods. The networking capital is passing from EUR 72.4 million to EUR 95 million, and this increase in the networking capital is mainly attributable to, sorry, is mainly due to, let's say, the cash generated by the HOST event that we will have in Q4, so in October that we already hosted, to be honest, in October 2023. Basically, EUR 22.6 million are really related to the advances payment related to HOST. Last comment is about, let's say, the net financial position pre-IFRS 16.
Clearly, we are moving from, as I was mentioning before, from almost EUR 30 million in December 2022 to EUR 61.5 million, so a cash generation of more than 35, 31 million, close to 32 million. If we go to the way we, let's say, generated this cash, clearly there was the impact, the positive impact of the EUR 56.2 million EBITDA generated in the first nine months, partially offset by the cash out related to the rental, which accounts for EUR 41.3 million. We have to account for CapEx expenditure of EUR 3.5 million and other, let's say, smaller impacts that led basically to a free cash flow of almost EUR 32 million, so EUR 31.7 million. Finally, we can highlight also that Fiera Milano achieved an excellent financial stability, transforming the COVID-19 emergency into an opportunity to reorganize its financial structure.
We are now both on, let's say, the current asset over current liabilities and equity on fixed assets. We have reached a very good, let's say, ratio. Now we are scoring at 0.79 ratio at September 2023 if we consider the ratio between the current asset and the current liabilities. When we look at the ratio between equity and non-current liabilities over fixed assets, we are scoring almost a 1 ratio, so basically in line and almost stable compared to what we scored in December 2022. I will leave now the floor to Vincenzo to speak about sustainability and what's new about this topic. Yeah.
Thank you, Massimo. Just three closing remarks on sustainability.
As maybe you may recall, we already appointed some months ago a new sustainability committee that is an internal board of the directors committee, and we are already working on a new sustainability plan in order to accelerate our sustainability targets. In addition, we also increased the power of our photovoltaic systems. We are talking about 26,000 panels installed in the roof of Fiera Milano venues. It is one of the largest Europe photovoltaic plants outside. The target is to increase the percentage of renewable sources thanks to which Fiera Milano could purchase electricity and energy needs. Finally, we are proud to share with you that we have been recognized by ELITE, both Italian and foreign, with the award Sustainability Award Top ESG Score. We are recognized as one of the highest ESG scores among all the mid-cap, Italian mid-caps.
I think we have concluded, and we can start with the Q&A session. Thank you.
Excuse me, this is the Carsco Conference Operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch-tone telephone. 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. The first question is from Emanuele Gallazzi of Equita. Please go ahead.
Good evening, everybody. Thank you for taking my questions. We'll start with the first two questions. The first one is on the Italian exhibition business. You mentioned the strong performance of HOST. Can you just give a sense on how the events of the fourth quarter are performing?
Any comment on the bookings of the first half of 2024 exhibition would be useful. My second one is more broadly on 2024. I know it might be, let's say, too early, but can you just share with us your view on the coming year? Thank you.
Okay. Thanks, Emanuele, for the question. I will reply on your question. Basically about HOST, I can, clearly we are closing now the month result, but we have evidence that basically HOST reported in terms of contribution margin a higher result compared to the pre-pandemic situation. Basically HOST in 2023 brought to the company higher contribution margin compared to 2019. This is a quite remarkable achievement, even considering that in terms of square meters, we are basically almost 10% lower compared to 2019.
What we did in terms of price positioning and also increasing the service penetration led us to achieve a result of this level. In terms of Q4 overall performance, again, I think in addition to HOST, we see good performances also from EICMA, the exhibition that is taking place in these days. We see also improvements on the other annual events and also in our other biannual events like Sicurezza, Made, and so the MIBA, so the new alliance, let's say, on the exhibition, on the building exhibition. Q4, I think, is what is letting us to increase basically on top of what we scored in the first nine months, the guidance, as already stated. Regarding 2024, clearly we are now working on the budget and also on the new plan for the company.
We do not have, let's say, already some figures to be shown or messages to be shared in terms of update of the guidance. We are confident at least to confirm the previous guidance of 2024, despite, let's say, all the increases that we are facing in energy cost and also all the inflation impact on the other costs. For us, in this moment, we are confident at least to say to confirm in this moment the guidance. In the next month, we will have the result of our budget and plan exercise, and we will give you clearly an update.
Just a clarification, when you say confirmation of the 2024 guidance, I think related to the Connect Business Plan, you are referring to the EUR 70 million-EUR 80 million of EBITDA for 2024?
Yeah. Sorry, 65 and 75. Yeah.
Exactly. I was wrong. Yeah. Yeah. Okay.
Other two questions from my side. One is still on the Italian exhibition business. Basically, during the presentation, you pointed out the strong performance of the ancillary services. Again, any, let's say, further details or comment on the performance of the ancillary services would be useful. My last question is on the capital allocation. As you expect to end 2023 with a strong net cash position, what should we expect in terms of capital allocation? I'm referring to, I don't know, dividends or M&A. Thank you.
Yes. Thanks, Emanuele. Again, about services, I have to confirm more or less what we already stated in the last conference about the semester result. We are increasing basically in all the services lines, so stand fittings, restoration, and services to the exhibitor, let's say the technical services to the exhibitor.
Currently, we reached in the first nine months a weight of services in terms of revenue compared to the revenues provided, let's say, generated on the Italian exhibition industry, a weight of 43%. We expect this weight to decrease a little bit when we will look at the full year-end result, so the full forecast, also because of the seasonality, also because of the, let's say, different weight of services in the different exhibitions. Let's say this is anyway a very huge increase if we consider that in 2019, the weight of services or revenue from services was close to 30%. I think this was the message you needed or, let's say, the kind of reply you needed. In terms of capital allocation, let's say next year we will be for sure impacted from some investments.
We have already communicated because we have already communicated investment in the media center that will happen in the MICO Alliance Center. We are now evaluating other opportunities clearly also in terms of potential M&A operation. We are also evaluating the possibility of disaggregating dividends. These are all things that we have to discuss in our board in the next month.
Okay. Very clear. Thank you very much.
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. Gentlemen, there are no more questions registered at this time.
If there are no any other questions, we thank all the participants.
Yes. Sorry. There was another question. The next question is from Mario Cupello Castagna of Vespucci Holding. Go ahead, please.
Thank you for taking my call and congratulations on the results. I would like to receive a little bit more information regarding the services if you can help us understand what you're aiming to achieve in terms of revenue and margin contributions in terms of the overall business. Thank you.
Okay. I can provide you, let's say, which is our goal for 2023 in terms of private revenue for, let's say, for the year from services. I can tell you that we are looking at probably something in the region of EUR 55 million-EUR 60 million from services in terms of revenues. I cannot provide you with information about the contribution margin because clearly it depends also on the mix on the services that we will provide.
For sure, services has a lower, let's say, contribution margin in terms of percentage compared to the contribution margin coming from the sold square meters. But it's also the, let's say, the line of business that is allowing us to, let's say, compensate what we are still missing, let's say, from the pre-pandemic level. This is our goal in this moment.
Thank you.