Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Full Year 2024 First Quarter Consolidated Financial Results Conference Call. 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. Please go ahead.
Good afternoon, and thanks for joining SeSa Group presentation. On behalf of SeSa, are participating, Alessandro Fabbroni, Group CEO, Elisa Gironi, Corporate Governance and M&A Director, and myself as IR and Sustainability Manager. In the morning, we made available our Q1 2024 corporate presentation on SeSa website, that we may follow during the conference call. Today, our board of directors has approved the 1st quarter results, reporting again an outstanding set of economic and financial performance. Alessandro will open the presentation with the overview of our strategic achievements.
Thank you, Jacopo. Good afternoon. Thanks, everybody, for joining our call. Today, we disclose our 3 months results as of July 2023, with, again, strong improvement in digital skills, about 5,200 people, up 20% year-on-year, and a great set of economic and financial results, despite the slowdown of the reference market. During the quarter, once again, we improved double-digit revenues and profitability by extending our 12 years consecutive growth from full year 2012 up- to- date, and our great path of cash flow generation by improving working capital management efficiency and reporting, again, an EBITDA cash conversion, about 60%.
In the quarter one under review, we confirmed the 12 years continuous growth with our great average of 15% CAGR in terms of revenues and profitability, by achieving consolidated quarterly revenues of EUR 776 million, up 16% year-on-year, with a consolidated EBITDA equal to EUR 55.8 million, up 17.2% year-on-year. Thanks to our great organic growth, driven by the successful market positioning on the main areas of digital innovation, as cybersecurity, software and vertical business application, cloud and digital platform, we continue to overperform our long-term track record, and to achieve growth rate significantly higher than the IT reference market trend, that now is expected to increase by 3.5% in the year 2023, and by 6.0% in the year 2024. The quarterly revenues growth was mainly organic.
That means about 70%, with a double-digit contribution from any of our business sectors, each overperforming market trend and gaining market share from the competitors. Software and System Integration revenues were up by 20% in the quarter, thanks to the development of all operating business units, particularly digital security, EFE and vertical applications, digital workspace, and data science. Value-Added Distribution revenues reported a great 13.6% growth, sustained by its business-to-business market position, with over than 80% of revenues deriving from enterprise software, cloud, networking, green technology, and less than 20% coming from physical technology as servers and personal computers for the business segment, without any exposure to consumer technology. Finally, Base Digitale Group reported an outstanding 53% growth year-on-year, targeting full year revenues equal to about EUR 120 million, compared to EUR 84 million the previous year.
Consolidated EBITDA reached EUR 55.8 million, as explained before, up 17.2%, with an EBITDA margin equal to 7.20%, higher than the 7.10% as of July 2022. Value-Added Distribution EBITDA increased by around 10%, achieving EUR 28.4 million, with an EBITDA margin more or less stable to 4.80%. System integration EBITDA was up by 21.4%, achieving EUR 23.2 million, with an EBITDA margin equal to 12.6%, compared to 12.5% of the previous year, while Business Services sector EBITDA reached EUR 3.1 million, increasing around 100%, with an EBITDA margin equal to 10.9%, compared to 8.5% as of July 2022.
Bottom line, group earnings after taxes adjusted, achieved EUR 26.5 million, up by 11% year-on-year, with an EAT margin on revenues equal to 3.40%. Thanks to the group higher focus on recurring revenues, we reported a steady cash flow generation. We achieved an operating cash flow of about EUR 130 million last 12 months, net of investment in CapEx and M&As for EUR 160 million, and dividend distribution buyback plan in the same period by around EUR 25 million. The consolidated net financial position as of July 2023, was active, that means net liquidity, for about EUR 208 million stable year-on-year.
We also continue to enlarge significantly our parameter of operations, with some strategic bolt-on M&As, contributing to group growth by about 30% on total Q1 revenues, and equal to 35% at operating profit level. For the full year 2024, now we expect an external leverage contribution from the M&As we already signed and announced, with additional revenues equal to about EUR 100 million, with an EBITDA margin higher than 16%. Now, I give the floor to Elisa Gironi, who will provide us a general overview about our M&A program.
Thank you, Alessandro. The external leverage continued to contribute in significant way to our growth, with a pace of 30% in the Q1, in line with our historical track record. Since January 2023, we closed 9 new M&As with about EUR 100 million revenues, contribution expected in fiscal year 2024, and an aggressive margin, about 15% EBITDA margin, onboarding 500 skilled human resources. We selected the target companies in the group strategic areas as security, cloud, digital platform, data science, digital workspace, representing some of the main digital trends of innovation technology.
In BDA sector, on May 2023, following the antitrust authorization, we executed the acquisition of 55% stake of Altinia Distribuzione, reference player in managed printing solution, with annual revenues equal to EUR 50 million, with the start of consolidation from the beginning of the new fiscal year. In software integrator, last May, we closed the acquisition of Visualitics, consultancy company focused on data management and analytics with 30 skilled human resources, annual revenues of EUR 4 million, and an EBITDA margin of about 20%. On June 2023, we acquired the majority stake of Informetica, company with EUR 6 million revenues, EBITDA over 10%, and 40 human resources, focused on SAP consultancy.
On June 2023, we enlarged our new digital workspace with the acquisition of Sangalli Tecnologie, company with 30 skilled human resources and revenues of about EUR 7 million, with an EBITDA margin equal to 12%. On July 2023, we acquired the majority stake of Wise Security Global, company leader of cybersecurity Spanish market, with expected annual revenues over EUR 10 million, an EBITDA margin equal to 20%, and 120 human resources. The build-up of new Business Services sector, focused on financial service industry, was driven by a new strategic significant acquisition.
Following the Bank of Italy authorization, we executed the acquisition of 51% stake of 130 Servicing, reference player in Italy, in the master services for the securitization industry, based in Milan, with a team of about 130 human resources, annual revenues of EUR 50 million, and an EBITDA margin of 20%. Thanks to its organic growth, the long-term agreements with some strategic partners and customers, as Crédit Agricole Italia and the Banca Sella Group, and the integration of last M&As, our Business Services sector targets in the fiscal year 2024, revenues for around EUR 120 million, 800 human resources, and over 12% EBITDA margin.
We will continue to work on a wide pipeline of M&As, in order to attract, on industrial basis, small mid companies with skilled human resources under a sustainable 5x EBITDA multiple evaluation, with earn-out mechanism and progressive residual stakes acquisition, to commit, in the long term, the key people of the target companies. Thanks to the 9 M&As already closed since January 2023, and the pipeline of new targets, we intend to replicate the result of the last year with about 15 M&As, and a combined parameter of over EUR 100 million revenues and 500 new people, considering not only Italian targets, but also some opportunities across Europe. Now, I give the floor to Jacopo to provide an updated overview about our sustainability path.
Thank you, Elisa. After a great improvement of our ESG performance in fiscal year 2023, we confirm our strong commitment to value generation for our stakeholders, and we continue to invest in sustainability and environmental protection, supporting intensively our customers to be responsible on the management of natural resources, enabling also companies and organizations, thanks to digital technologies, to maximize efficiency and to develop the production for renewable resources. On the 1st quarter, fiscal year 2024, we continue our long-term development on human resources achieving 5,188 employees, with over 450 hires in the last seven months, targeting, again, the line of 5,300 people at the end of year 2024. To enhance our loyalty rate, we continue to consolidate the welfare programs.
On June 2023, we launched the new annual welfare program to support parenting, diversity, wellbeing, and work-life balance of human resources, and we enlarged our programs in favor of diversity and inclusion. Our commitment is still focused on key priority areas, including equal opportunities, ensuring fair gender representation, reduction of our environmental impact, emission and waste generation, contribution to economic growth with long-term value generation for our stakeholders, and support for local communities and responsible relationship.
We will continue to work intensively to develop our ESG programs by focusing on energy and natural resources efficiency, and energy production for renewable sources, to further improve our scores of main sustainability ratings. Finally, I remember that last shareholders meetings, as of August 28th, approved a dividend distribution equal to EUR 1 per share, compared to EUR 0.9 for the previous year, said will be paid on September 20th, 2023. The shareholder meeting also approved a buyback plan to serve the new stock grant plans for the group key people. Now, I give the floor again to Alessandro for his conclusions.
Thank you, Jacopo. So after an outstanding full year, 2023, with industrial achievements and record growth rates in revenues, up 22%, and profitability, up by 25%, we achieved a great start on new fiscal year, in line with our expectation, and despite the worsening market scenario, unpredictable six months ago. By capitalizing our competitive advantages and financial solidity, and our great capability to gain market share from competitors in the phases of market deceleration. We continue to improve our main industrial KPIs, as customer set, achieving 40,000 enterprises, revenues with a growth pace of over 15% higher than expected. Human resources that achieved a line of 5,200 people as of July 2023, with record 800 internal hires over last 12 months.
We really did a great job, evolving our organization by integrating last bolt-on M&As and developing new strategic business lines, with EBITDA margin over 10%, from cybersecurity to data science and digital platform, while we continue to evaluate the wide pipeline of new potential targets with accretive EBITDA margin and perimeter of operation, both in Italy and across Europe. Corporate and enterprises demand on digitalization is confirmed solid, with higher focus on the most innovative areas of IT, as cloud security, data management, data science, and also AI, in growing way. These digital enablers are polarizing most innovative investment and representing SeSa Group core strategy and core focus of investments, by creating a unique business model across Italy and continental Europe.
Considering our great start of the year, the contribution expected for the pipeline of M&As, as well as our resilience and capability to outperform the market, today, we confirm the positive outlook for the full year 2024. The targets already announced last July, that means consolidated revenues for the full year, expected in the range of EUR 3.2-EUR 3.3 billion, and EBITDA increase between 15% and 20% year-on-year, in the range between EUR 240 million and EUR 250 million, with a renewed commitment to achieve, and if possible, to outperform them, as we often did in the past, by accelerating the business, in particular, in the 2nd half of the fiscal year. Thank you for your attention. Now, as usual, we stay available for the Q&A final session.
This is the Chorus Call conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their 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 Andrea Randone from Intermonte. Please go ahead.
Good evening, and, thanks for taking my questions. First of all, congratulations for the results. The questions are four. The first one is a comment on, I mean, August and September. You confirmed the guidance. I expect the trend is positive, but if you can give us some color. The second question is about a well-debated topic in your business model. So if you can remind us the recurring part of your business, if you can describe this feature. The third question is about M&A, if you can provide some comments about the pipeline you are seeing at the moment, and if you have any specific segment of particular interest? The fourth question, the last one, is if you can provide a comment on what you expect in terms of net financial position evolution in the remaining quarters of the year. Thank you.
Good evening. So, thanks for the question, Andrea. So first of all, we experienced a very positive trend of orders in the month of August and September, so we are very positive also to be able to face an acceleration of the market in positive way, I mean, for the rest of the calendar year. That will be in line with the market forecast that now estimate an acceleration for the full year for the calendar year 2024, with an expected growth higher the line of 5% compared to an expected growth of IT in Italy equal to 3.5% for 2023 year.
Our business model is recurring in a way due to the great job we did, in particular, inside the software and System Integration and Business Services. Both sectors that are more or less 100% recurring with 3-year, 2-3 years up to 4-5 years services model. As for Value-Added Distribution, most revenues are not recurring even if a relevant share of enterprise software is becoming recurring. So that means as of today, we have a range between 20% and 30% revenues recurring also inside Value-Added Distribution that is improving quarter- by- quarter. Our M&A pipeline continues to be really strong, due also to some trouble, some financial troubles of the market.
Our capability to attract is improving, not only in terms of human resources, but also in terms of M&As. We close, since January 2023, several strategic M&A. Among them, I remember the acquisition of Wise Security Global in Spanish market that is a leading cybersecurity player in that area, but also the great acquisition in the consulting services inside Business Services sector of 130 Servicing after the Bank of Italy authorization that we closed at the beginning of the quarter. As for the trend on our net financial position, if we consider net financial position before IFRS debt, net financial position is stable, with cash and liquidity over the line of EUR 200 million. We expect to achieve, about 250 at year-end in terms of net liquidity.
If we consider net financial position after IFRS debt, we have about EUR 190 million-EUR 200 million of IFRS debt, consisting in particular of IFRS debt for earn out and put options. So that means for our future acquisition of minority stake towards minority shareholders. So these are not interest being better, and so net of IFRS debt, we may expect net financial position more or less in breakeven during next year and at year-end.
Thank you very much.
Thank you. Thank you, Andrea.
As a reminder, if you wish to register for a question, please press star and one on your telephone. The next question is from Guy Sheridan from Quilter Cheviot. Please go ahead.
Hi, good afternoon, Alessandro, and congratulations on the results. When you say the Italian market or your market is slowing a bit, could you give us a bit more color on that? And is it? Do you think it's gonna last another three months, four months, or six months? And secondly, are you? You've obviously got a good pipeline of acquisitions. Are you finding it a bit harder to buy companies at the price you set, or are you seeing some inflation coming in to having to sort of buy the right companies in your M&A program?
So good evening, Guy, and thanks for your question. So first of all, the view that we have on the trend of the Italian market is positive. The market became, in the last 6-9 months, more selective. So that means more oriented to software, digital transformation, more, let me say, most innovative areas of IT, so data science or cybersecurity, and less oriented to physical technology. That is not our core focus. What we expect is a general recovery of the market in coming quarters, also considering the physical technology that is not our core focus.
As for the question about M&A, what we are observing is that in a situation, a condition of higher interest rates, we are working in a market with low competitive pressure. So up to 6-12 months ago, we faced a lot of players under private equity or financial partners that try to create aggregation pools also across Italy. What we are observing is that now our capability to attract is higher, and by maintaining the same approach in terms of pricing, because I remember to all participants to our call, that we continue to work under an EV to EBITDA multiple price equal to 5.5x. That is much lower than the current market fair value.
That is the result of our capability to plan on industrial basis the acquisition, to plan together with the key people of the target company the future 5-7 year period of the target company, the plan of integration, and to be able also to share the future value creation. We bought in the last 6-7 year period more than 60 companies with a combined perimeter of revenues at the acquisition time equal to EUR 600 million revenues, and that combined perimeter will represent revenues for more than EUR 1 billion. So our great capability to develop after the acquisition thanks to the group synergies is one of the main catalyst of M&A under very equilibrated and moderated pricing.
We confirm that the pipeline is stronger than six months ago, and with a sustainable price for our organization. We are optimistic to be able to maintain the same pace we have since the start of the year.
Thank you very much, Alessandro.
Thank you. Bye-bye, guys.
For any further questions, please press star and one on your telephone. The next question is from Federico Belluati from Kepler Cheuvreux. Please go ahead.
Good afternoon, and thank you for taking my question. My question is regarding management services, market, because it seems the key driver of the Italian market. So I'm wondering what your exposure in terms of revenues to this segment? Thank you.
So thanks for the call. We offer managed services integrated with several lines of business. So that means security or cloud in the way of hybrid cloud. And so that business unit represent around 5%-10% of our business unit, of our business sector, Software and System Integration. So it is not so high in terms of exposure, but we are observing a good trend in terms of orders and backlog.
Okay. Thank you.
Thank you.
Once again, if you wish to ask a question, please press star and one on your telephone. Gentlemen, there are no more questions registered at this time. Do you have any closing comments?
Oh, yes. We thank every participant of our call, and we stay available, obviously, with our IR team, for additional information. Thank you very much.
Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.