Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Tinexta Group consolidated results at 30th September 2021 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. At this time, I would like to turn the conference over to Mr. Josef Mastragostino, Chief Investor Relations Officer of Tinexta. Please go ahead, sir.
Good afternoon and good morning to the folks in the U.S. Thank you for joining Tinexta's first nine months 2021 results presentation. Here with me today, Pier Andrea Chevallard, the Chief Executive Officer of Tinexta, Oddone Pozzi, Chief Financial Officer. As a reminder, all the relevant documentation of the first nine months 2021 results can be downloaded from our company website in the investor relations section. For the purpose of this call, I will go over the first nine months 2021 highlights and updates, as well as provide all the relevant information relating to the recently announced news. Oddone, instead, will go over the first nine months 2021 financial results, as well as the business unit's performance, providing us with a deep dive. The last part of the call will be dedicated to Q&A.
A recording of this conference call will also be available on our company website, and it will be posted upon completion of this call. At this point, I will kick it off by turning to page three of the presentation. The first nine months 2021 results registered another leap forward for delivery, showing relentless progress. Please note that in order to allow as complete analysis as possible, nine months 2021 results are compared both at constant 2020 perimeter as well as on a 2021 perimeter, which includes all of Tinexta's companies with the addition of the newly acquired ones. Revenues came in at EUR 261.6 million in the nine months 2021, growing 38.5% versus prior year and 7.6% on a 2020 base.
EBITDA adjusted was EUR 63.3 million in nine months 2021, growing 11.2% versus prior year. EBITDA reported was EUR 69.6 million in the nine months 2021, growing 7.3% versus the prior year. EBITDA adjusted margin was 24%. EBITDA margin was around 23%. EBIT came in at EUR 38.4 million, with EBIT margin at around 15%. Net income grew 7% versus prior year at EUR 28 million. Cash flow was strong. It came in at EUR 44.3 million in the nine months 2021, growing on an LTM base to EUR 58.4 million. Net financial position improves versus 1H 2021 and stands at EUR 191.6 million or at 2.2x in terms of leverage. Operating cash flow was extremely strong at EUR 70 million in the nine months of 2021.
All business lines continued to grow in the nine months of 2021, with Digital Trust growing 12.3% in revenues and EBITDA growing 10%. EBITDA margin in terms of Digital Trust was 26%. Cybersecurity reached EUR 51.5 million in revenue, and EBITDA margin was 11.3%. Credit information and management increased 2% in revenues with a slight increase in EBITDA of around 7%. EBITDA margin was 29%. Innovation and marketing services posted a very healthy +21% in revenues, with EBITDA rising 6% and margin standing healthy at 41%. In terms of the most recent information, Bregal Milestone was selected as a strategic partner to accelerate the international development. On October 27th , Bregal Milestone invested EUR 100 million for 16% of InfoCert Group.
The agreed consideration corresponds to an InfoCert valuation equal to pre-money enterprise value of EUR 501 million, calculated on a multiple of 20x adjusted EBITDA LTM of InfoCert and its subsidiaries + adjusted NFP as accounted for in June 2021. The aim here is to establish a leading operator in the Digital Trust space at a European level. We also completed the acquisition of the 60% share capital of CertEurope. Signing was completed on October 26th. Closing was successful and completed on November 3rd. Turning to page four, let me give you some additional info on the partnership with Bregal. First and foremost, let us be very clear that from a strategic standpoint, the transaction will enable InfoCert to accelerate the internationalization process and seize the opportunities arising from the consolidation of the Digital Trust space.
Bregal Milestone, which boosts specific know-how in the tech sector, also offers an extensive network which will support InfoCert expansion. The transaction provides for an investment by Bregal Milestone of EUR 100 million, of which EUR 70 million at closing and EUR 30 million within the following 12 months for the subscription of a dedicated capital increase of up to a total of 16.09% of InfoCert share capital. The agreement also foresees the possibility for Bregal Milestone to further increase its participation, always in the 12 months following the closing, to up to 19.95% of InfoCert capital, with a total investment of EUR 130 million. We already discussed the valuation, so I will skip over on that.
The transaction is subject to the usual closing conditions, including the payment of Bregal Milestone's golden power authorization, and the adoption of the resolution for the reserve capital increase, and the approval of the new articles of association. The entry of Bregal in InfoCert is also subject to the closing of CertEurope, which, as I remind you, has been completed on November 3rd. Turning to page five, most of these numbers have already been commented, so I will leave it to Oddone to go over the nine months' 2021 financial results. Oddone?
Okay. Thank you, Josef, and good afternoon, everybody. As already anticipated by Josef here, you may see at page five, you know, the consolidated results of the first nine months. You know, as expected, the revenue is growing quite significantly, close to EUR 260 million, and with the growth in the range of 40%. On a same perimeter basis, still the growth was solid, in line with our expectation, and very close to 8%. You know, we will see then during the presentation, but we continue to have a solid growth both in Digital Trust and IMS. The growth or the change of the perimeter definitely helped with the growth, with the contribution, the most significant contribution from cybersecurity above EUR 50 million with Querio and Euroquality.
EBITDA margin, EBITDA adjusted growth, compared to previous years at 11%. On a same perimeter basis, it's slightly below, but we have to clearly remind that last year was here very different in terms of calendarization compared to the usual year. Just to remind everybody, Q3 2020 was up more than 50%, compared to Q3 2019, while Q4 2020 was below Q4 2019. I think this is a very key point to keep in mind going through the figures that we will see. In any case, EBITDA adjusted was up more than 10%, and also net profit is up 7%. If we go through the P&L, as anticipated by Josef here, we may see that we have the comparison also on the same perimeter basis.
As you may see here, the revenues, as commented before, was up 7%, while the EBITDA adjusted is slightly below. We have to say that here, we were affected partially by the different revenue mix that we have compared to the previous year. For example, Digital Trust is keeping a solid growth both in term of revenue and in term of EBITDA, with the margin slightly below. Credit information kept a very high profitability in the range of 29%, while IMS has been impacted, as already anticipated, during the previous call, by the different revenue mix that is facing this year. We will go to comment later on.
The total EBITDA adjusted margin is in the range of 24%, and this is definitely affected, but as already expected by the new revenue mix, including the cybersecurity, as of today, is accounting for 11% EBITDA margin. Stock option and non-recurring items are up compared to previous year as the stock option plan last year started since basically July, and so it was accounting only for three months. Now it's accounting here for nine months. In addition, you know, the cost for running all the activities of M&A that we put in place during the first nine months of the year accounted for almost EUR 2 million. Depreciation, amortization provision are growing also because of the change of perimeter.
We accounted less loss on accounts receivable driven by the very good cash collection that continues during the nine months. Overall, net financial income and charges are slightly higher than previous year. As you know, our net financial position was increased by the acquisition that we ran during the year. At the end, the profit before taxes is at EUR 35 million at 13.5%, while the income taxes dropped compared to previous year by the fact that we enter into the affrancamento delle imposte. It's basically tax relief that we obtain, having some goodwill to be put in tax depreciation.
This provides us a benefit in the range of EUR 3.5 million. Net profit is at EUR 28 million growing compared to EUR 26.3 million of previous year. In terms of if we go to the balance sheet, we work through the balance sheet, obviously our net invested capital grew quite significantly. This is the result of basically three major acquisition we ran during the period. The acquisition of Corvallis, Euroquality. That we used to complete our business unit in the cybersecurity that accounts for almost EUR 90 million. Then we performed the acquisition of Querio for another EUR 50 million in the area of digital marketing, and then the acquisition of Forvalue for EUR 55 million. This led basically the increase of the net invested capital.
Within these figures, we have to recall the fact that also in the first nine months, the group, after a very brilliant 2020, was able to again to deliver cash from working capital through the reduction of working capital, especially focusing on our capability to improve our trade receivable collection. This accounted for almost EUR 8 million. Net financial position obviously increased compared to previous year because of the above mentioned acquisition. We generated a very solid free cash flow in the nine months for almost EUR 45 million. The company went through obviously the dividend of EUR 12 million during the Q2.
In addition, we had also an adjustment of the put as a result of the fact that the plan that we had at the time of the acquisition was improved by the real plans that then were approved by the board of directors of the single company. We continue our buyback program that now is in the range of EUR 6 billion. In terms of shareholder equity, the increase partially, part of this increase is the transfer of Forvalue to Innolva of the Intesa Sanpaolo for EUR 55 million. The rest obviously is the net profit of the period minus dividends, the buyback program, and the put adjustment. If we move to the net financial position, as I explained before, you may look at it at page nine.
I explained how you know the debt increased compared to the end of the year. If you move to the free cash flow, we have mainly two components that are affecting. It still is a very interesting strong free cash flow, as this you know includes an interesting generation of cash from working capital for EUR 8 million, while last year was slightly above. You know still is something that sooner or later will stop because you know you can improve the working capital once, and you cannot continue down the road. On top of this, we have to consider that we paid off EUR 50 million euros taxes driven by the increase of results in 2020, and taxes then paid in 2021, while last year we paid only EUR 6 million.
The LTM free cash flow continues to be very solid. It continues growing for basically now eight quarters in a row. I just want to comment a bit more on the net financial position bridge. I will move to page 11 to see basically what the group has done in the last 12 months. You know, the free cash flow has been very solid and strong of EUR 58 million, out of them 13 from working capital. Financial charge is still very limited. We continue to improve our dividend policy that accounted for more than EUR 12.6 million. While the net balance between acquisition and disposal was above EUR 130 million.
You can see here in the slide all details of all our the acquisition that we perform during the period. I will move now to go deeper into the business unit. We already commented group level the results here. You may see that basically Digital Trust is going up both in terms of revenue and profitability. Still the Credit Information is up in terms of revenue slightly below in terms of profitability. The same for IMS that is going down both in revenue and in terms of profitability. Let's walk through the different business unit. Let's start from Digital Trust. We are very glad with the performance of Digital Trust. Very positive results. The revenue is going up more than 10%, is in excess of 12.3%.
This is, you know, InfoCert delivered very good results, both in terms of off-the-shelf product as well as of digital transformation management project. In several cases, we do see InfoCert being the global and the main contractor of transformational projects, and sometimes also including third-party products to be resold as requested by our clients. In terms of EBITDA margin, still very strong at 26%, slightly below, but compared to prior year, but is only driven by the different revenue mix that we are counting into one. So overall, the company, the view is on track. It is growing faster, and I would say even slightly faster than we expect in our projection at beginning of the year. Let's move to cybersecurity.
Here we do not have comparison with the previous year as the three companies were not within the group. We can tell you that definitely both revenue and profitability are growing perfectly aligned to our expectation. Definitely as of today, Corvallis is still the major contributor, both in term of revenue and EBITDA. You know, Euroquality and Swascan are also starting their path of growth, and they are contributing to the results here. The EBITDA landed at very close to EUR 6 million, basically aligned to our expectation, and we are now ready for a strong Q4 as generally expected in this business unit. If we move to credit information and management, I think that here it's very important to look at comparison over the three years.
You know, last year, we do see a very strong performance in credit information management, partially, you know, not fully expected in this size and definitely much better than our competitors in this segment. Innolva and its business unit was able basically to over-perform in the area of business process outsourcing, especially in relation with the handling of central fund of guarantee activity. This activity was very strong. You know, sometimes, you know, we look at it as a great opportunity, but also as a potential issue for the future.
What we can tell you now, as anticipated at the beginning of the year when we share our projection, definitely, we can confirm that we are keeping the position because still at 29% margin is a very important margin, and definitely is a significant improvement compared to 2019. We are slightly, you know, above last year, but we still believe that in Q4 we can continue to deliver in a positive way, trying to keep the very important marginality that we are delivering here. Overall, the number of manager request of the central guarantee fund are still strong, and we do expect also a very positive Q4. If we move to innovation and marketing services, here is a mixed situation.
Revenues are up in terms of absolute value and still also on the same base and perimeter compared to previous year. Basically, we do see within this number a very strong recovery from Co.Mark. Co.Mark is the company of the group that is providing temporary export management services to SMEs in Italy. Last year, during the pandemic period, it was heavily affected by this situation. In 2021, the company started to recover in a very strong way and is delivering results, I would say, accordingly or slightly better than our expectation. If we move to Warrant, we knew that during 2021, we were facing...
We were going to face a quite unique situation, where basically, driven by the budget law, basically benefit for customer in term of finanza agevolata were expected to be much lower. Warrant delivered a very good nine months on this area, being able to deliver a little bit more of revenue in order to compensate the lower marginality driven by the above-mentioned situation. Also being able to offset a slight decrease also in the area of central fund guarantee that is offering to its customers. Overall, the business unit is delivering more EBITDA, thanks also to the positive acquisition of Querio. Querio is performing very well, both in term of revenue and in term of margin, and we do see a continuous improvement of the digital marketing activity.
Let's move to the guidance. Well, now I am at page 19. As you may see here, we are in a position to confirm our guidance for the year-end. Basically, the revenue is expected in the range of EUR 370 million, as well as EBITDA adjusted is expected in the range of EUR 96 million, with an expected net financial position to EBITDA adjusted at 2x. Obviously, this is on the same perimeter we have at the end of Q3.
We will have a different net financial position at the end of the year as we completed the acquisition of CertEurope that will account for EUR 72 million of net financial position, but we will be in the position to deliver only two months of EBITDA out of the full net financial position. Still, we do expect a Q4 that is going to be definitely stronger than Q4 2020 and even stronger than Q4 2019. I'm talking at the same perimeter basis. It means as anticipated, as I told before in this conference, you know, the Q4 2020 has been lower than Q4 2019. Still we are facing a challenging Q4, but we feel very confident to achieve the result.
As you may see here, also by half year, you see that Q2, first half 2020 has been slightly lower than first half 2019, while Q2 2020 was much higher than the second half of 2019. The second half of 2021 is expected to be slightly above the second half of 2020. This is to provide you a full range of information here. Definitely the full second half of 2021 will be higher with the addition of cybersecurity, Querio and Euroquality that we completed during the first part of the year. Thank you, Donna. I would ask the operator to open the Q&A, please.
Excuse me. 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 touchtone 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 Renato Gargiulo, with Stifel. Please go ahead.
Yes, good afternoon. Well, my first question is on cybersecurity. I was wondering, is the integration of the acquired activities proceeding in line with your expectation? Are you already experiencing some cross-selling synergies with the other divisions? Related to this, if you have any update on the partnership with Leonardo? Second question, looking at the full year, you confirmed the full-year guidance, but in terms of segment mix, compared to your previous indications by segment, do you see any business particularly outperforming or underperforming versus your previous assumptions? I can understand that probably Digital Trust is performing slightly better than you expected at the beginning of the year.
Very last question, very quick on the investment by Bregal Milestone following the closing of the CertEurope acquisition, which was also one of the conditions. Do you expect the closing of the investment of this transaction by year-end? Thank you.
Thank you very much for your question. Let's start from the first question about the cybersecurity. Definitely, I would say that, you know, the integration of three different companies and three different cultures is not an easy job. We are progressing as expected. We organized very well, as we already shared during previous conference call, this activity. You know, the business unit headed by Mr. Mastragostino is very focused trying to put together integrated offer and put it together integrating organization. This is performing very well. I would say quarter by quarter things are improving, although, you know, it's not easy. About the integration, we are on, I would say we are on track.
The three companies are performing, as a rule, in line with our expectation. Maybe there is something that is performing slightly well and something that is performing slightly better, but I would not say this is a big issue. This is something that, you know, could be, to some extent, expected. Overall, the company is delivering the revenue we expected as well as the EBITDA. Definitely Q4 is going to be challenging, but, you know, we are talking about IT industry, where generally the Q4 is the strongest quarter everywhere. We are ready, we are on track, we are pushing to achieve and to deliver the results that we committed.
In terms of fiscal year 2021, I would say that definitely we do expect, looking by business unit, we do expect InfoCert to keep being very strong. You know, InfoCert has delivered good results as of today, and we do believe this will continue in Q4. Looking at cybersecurity, I already mentioned the Q4 will be very strong, but we are ready to deliver and to try to basically achieve the results. If we look at credit information. This is an area where we should deliver slightly better than what we have done as of today. It is challenging, but we do believe that results will come. Q4 for IMS is expected to be a strong quarter.
While last year was a little bit lower than our expectation, we do expect the Q4 being very, very important and Warrant basically as the most important load of this delivery. Querio is, as I said, performing well, and we do expect also in Q4 to be able to deliver outstanding results. If you look, the third question was about Bregal. You know, already Josef basically provide you all the information about the deal. Definitely the closing of CertEurope was one of the condition, and this has been achieved. Now there are other conditions that has been mentioned before, and you know, we do expect that potentially the deal could be closed before the year end.
You know, this is in the hands of a third party, is in the hands of an authority, so it's not basically in our hands. The deal is there, and obviously, you know, this is the path that we have to go even more and more internationally in Digital Trust. We did already a good step with the acquisition of CertEurope, and we are looking for other targets around Europe.
Thank you. Thank you.
You're welcome.
The next question is from Russell Pointon with Edison Group. Please go ahead.
Good afternoon all. I have three questions, please. First one on going back to the cybersecurity. Just checking the actual quarter-on-quarter revenue Q3 was a bit lower than Q2. Is that really just we all went on summer holiday and probably more so than in previous years, so you obviously indicating a strong Q4, but just some feel of what happened in the third quarter. Also, I mean, going back to the question on cross-selling, could you just talk about. Are you actually winning new customers and, you know, are you actually staffing up appropriately? Next question is on Digital Trust, and could you just give some comments on how the business in Germany is doing? Aligned to that, on Bregal, you will have a lot of financial firepower once it completes.
Do you think they have a strong pipeline of deals which will come to you pretty quickly? My final question is on Co.Mark. Could you just give some indication of where that is versus 2019 at the moment? Thanks.
Well, the first question was about the cybersecurity. Here, you know, overall, at the end of Q3, we are perfectly on track with our plans. We had some difference between the different quarters, but you have to consider in some cases we have sales of products. You know, it's not only a 100% business of people, so sometimes is a matter of product. When you have more product, probably the revenue is likely higher than the other quarter. This is the main driver and the main difference of this.
In terms of cross-selling, you know, there are several activities underway with Digital Trust, of course, and they are also working to provide a bundle product between cybersecurity and Digital Trust, as well as bringing the cybersecurity solution to their customer. This is an activity that is improving. Teams are working very closely, and we do expect this to continue both within the cybersecurity itself, but also with the other business unit. We are happy of what we are delivering right now. It is aligned with our expectation, and we expect this to continue down the road. In terms of results of Authada, still Authada is in negative territory in terms of results, but is aligned with the plans that we have. Still, activities are small.
We do expect to look at it by 2023, and as of today, we have no different indicators or KPI from what we do expect when we run the acquisition. In terms of the Bregal and the pipeline of deals, definitely, InfoCert started when we shared it during the presentation of our three-year plan. The plan to go international by InfoCert is something that we were starting to look at it, then we enter into discussions with Bregal. Obviously. You know, as we reach an agreement between the two parties, we do believe, first, that both parties are thinking that opportunities are on the market international level. Second, we enter into the agreement with CertEurope , and this is, you know, let's say the first step.
Obviously, we have in the pipeline other potential targets. In terms of M&A, you are never sure when it is going to happen, but for sure, we have targets that we are looking at and we are working. In terms of Co.Mark, we may see that. Okay. In terms of Co.Mark, you know, Co.Mark is recovering in terms of revenue and an EBITDA compared to the previous year. I will tell you later on which are the figures. Okay.
Russell, we'll get back to you with an exact number on the EBITDA. Overall, Co.Mark is obviously rebounding versus the prior year by definition. You know, there is more and more activity in terms of you know temporary export services, and therefore, the request for such services are obviously in a much better economy than they were prior year.
Okay.
We'll come back with you.
Co.Mark is going up, you know, almost in terms of revenue compared to previous year is going up 20%. I will tell you now in terms of revenue, and is going up more than 30% in terms of EBITDA, 2021 - 2020. I will come back to you quickly about 2019.
Okay, thanks. Can I just follow up on Germany? I mean, your commentary was on the profitability, but could you just talk about how the business is doing operationally in terms of, you know, winning new clients, that kind of thing? Is the market proving to be good? Is it one of those markets that really does need, you know, the contribution from other businesses, you know, perhaps that may come from Bregal?
I mean, you know, operations are running smoothly. We don't see any particular changes. You know, the demand for those such services is up. We don't believe that there is any idea or any potential of any downturn. What exactly would you like to know more, Russell, on Germany?
It's just that, you know, is the business progressing in terms of clients, that kind of thing, how the market is doing, and is it of a size that it's big enough to really compete, or does it need, you know, other businesses to join with it, maybe from Bregal in order to boost its size and their competitiveness?
Give me a second.
We collected some information. In terms of the German outlook, there is a strong demand for our top services in terms of product base. Obviously, we expect that from now all the way to spring of next year, there's gonna be a stronger demand, in particular, for these types of services. We're very happy with the demand of the product, but at the same time, we're happy with how the clientele is actually progressing in terms of we bringing them services that they're asking for.
Okay, that's great. Thank you.
Yeah, you're welcome.
As a reminder, if you wish to register for a question, please press star and one on your telephone. Once again, if you wish to register for a question, please press star and one on your telephone.The next question is a follow-up from Renato Gargiulo with Stifel. Please go ahead.
Yes, very quick one. On your innovation and marketing services segment, you were pointing out that in terms of business mix, you would probably experience an improvement next year, also based probably on the new Italian budget law. Can you confirm this indication?
Yes. I'm talking especially about the business of Finanza Agevolata Automatica. Basically, our revenue model is, you know, we are delivering basically consultancy there. Our revenue model is based on a small retainer fee, then a success fee linked to the benefits that the customer are getting in terms of tax relief. The budget law of 2021 provides lower percentage of tax relief on the amount invested, and this was significantly lower compared to 2020. The management of Warrant was able to fully mitigate this, and we do expect by the end of the year to deliver results totally aligned with results of 2020, that is going to be a significant achievement.
As the budget law for 2022 is expected to increase, back not to the level of 20, but in the middle between 2021 - 2020, the benefits for our customer, we do expect that our average revenue per customer will goes up. This will allow us to improve our profitability.
Perfect. Thank you. Thank you very much.
Thank you, Renato.
For any further questions, please press star and one on your telephone.
In order to complete the answer of Co.Mark, Co.Mark nine months basically was able in 2021 to over-perform the results nine months of 2019, slightly above, as well as in terms of EBITDA. You have to consider still that the pandemic in the first three, four months of the year was there, so there was still lockdown, people that was not able to go into the customer building and so on. We feel that the results are extremely positive, being already above the 2019 results.
Do we have any further questions?
Mr. Mastragostino, and we do not have any questions registered at this time.
Thank you. We would like to thank you again for connecting to Tinexta's conference call. If you need any additional information, please don't hesitate to contact us. Good afternoon.
Good afternoon. Thank you, everybody.
Bye.