Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Tinexta Group consolidated results at the December 31st, 2025 presentation. As a reminder, all participants are in a 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. Please go ahead, sir.
Thank you, Operator. Good afternoon, everyone, and good morning to the folks connected from overseas. This is Tinexta's fiscal year 2025 results. Here with me today, Oddone Pozzi, Group Chief Financial Officer. As a reminder, all documents related to the 2025 financial results are available for download on the Investor Relations sections of our company website, and you can connect to this call and to all other documents via QR code at the end of this presentation. Let's now turn to page 3. For the purpose of this call, I will kick it off with the executive summary and business highlights. Oddone will review the fiscal year 2025 financial results. We'll follow up with the BU outlook, and Oddone will wrap it up with 2026, 2028 business plan targets. At the end of the call, we will be available for a Q&A session.
Upon completion of this call, an audio recording will be available on our company website. Let us turn to page five of the presentation, which recaps a brief history and timeline of the MTO or mandatory takeover promoted by private equity funds Advent and Nextalia on Tinexta's shares. In August, as you all know, Tecno Holding and the two private equity funds signed binding agreements for the transfer of a controlling stake equal to 38.74% of the share capital, subject to the two conditions precedents, namely antitrust as well as the Golden Power, which respectively came in in October and December of the prior year.
The latter, which was granted on December 24th with the issuance of a prime ministerial decree requiring, among other conditions, for the disposal of the stake in the Tinexta Defence in favor of an entity deemed by the government capable of safeguarding the essential interest of national security and defence with reference to the defence group. From the closing date of December 30th, 2025, all information flows from Tinexta Defence to the parent company have been segregated, and the stake has been transferred to a blind trust established in early January. At the same time of the closing of the transactions triggering the launch of a mandatory takeover at a price of EUR 15 cum dividend per share, as well as the renewal of the board of directors, which was appointed by the shareholders meeting back in December of 2025.
At this point, maybe some of the most important elements, for your information, they're all highlighted on this slide, and they're all available on the website. The offer document has been approved by Consob on February the 19th, with an acceptance period starting on February the 23rd. Just as a reminder, the acceptance period will last for 20 trading days and will end on March the 20th, 2026. Let's turn to page 6. Before I go over fiscal year 2025 figures, I would like to remind you that in accordance with IFRS, the defense group's contribution as of December 31st, 2025, is classified in the income statement and balance sheet under discontinued operations and assets held for sale. This reclassification is also reflected in fiscal year 2024 comparative data.
Oddone will give you more detailed explanation of the deconsolidation process while giving you an in-depth analysis of the financial results for the year. 2025 revenue grew by 4% to EUR 457 million, while EBITDA adjusted landed at EUR 103 million for 3% decrease. Net profit adjusted from continuing operation came in at EUR 36 million with a 3% decrease, actually, while falling to a negative EUR 58 million on a reported basis, mainly due to some non-current impairment, which will be discussed more in that later during the presentation. Free cash flow on an adjusted basis from continuing operation was EUR 70 million, growing 60% versus fiscal year 2024. Cash generation was reflected in the decrease in the net debt, which came in at EUR 240 million versus the EUR 322 million recorded in fiscal year 2024.
Net debt in fiscal year 2025 also includes positive effects of Tinexta Defence debt consolidation around EUR 89 million in accordance IFRS. Leverage ratio sits at 2.33x at the end of the year. It is important to note that results came in line with the preview already issued on January 22, 2026. Turning to page 7. Slide 7 shows the growth trends of Tinexta key indicators over the last decade, with revenues growing on a CAGR base, 12 and 2014-2025 at around 18%. EBITDA adjusted, growing on a CAGR base, again, 2014-2025 at over 20%. Turning to page 8. Results were in line with the preview, as we just said.
Revenues were EUR 457 million, growing close to 4%. EBITDA adjusted was EUR 103 million or declining around 3% with a margin of 22.6%. The growth shown in Digital Trust was more than offset by slowdowns in Cybersecurity and Business Innovation. EBITDA on a reported basis came in at EUR 90.8 million, with a 19.9% margin. EBIT adjusted came in at EUR 63 million, negative EUR 6 by EUR 68 million on a reported basis due to impairment of goodwill related to acquisition. Again, Oddone will provide much more color on this later. As mentioned a few slides ago, net profit adjusted from continuing operations came in at EUR 35.5 million, negative EUR 57.9 on a reported basis. Net profit attributable to discontinued operations was equal to positive EUR 12.1 million.
The change in net financial debt to around EUR 240 million is mainly attributable to cash flow generation as well as positive impacts from put adjustments and as previously mentioned, the deconsolidation of the Defense Group. Free cash flow adjusted from continuing operation was EUR 70.4 million versus the EUR 43.7 million recorded in the prior year due to lower CapEx and cash taxes paid during the period. On a divisional basis, on the center part of the slide, Digital Trust revenues grew by 7% with EBITDA adjusted coming in at 5.6% and a margin of 31.2%, extremely healthy margin, mostly in line with the prior year. Cybersecurity revenues fell by 3%, with EBITDA adjusted decreasing by 4% and EBITDA margin at 13.9%.
In terms of BI, revenues grew by 3% with a significant decrease both in EBITDA adjusted -15% as well as marginality, which came in at 24%. I would like to provide a brief overview of some of the key updates on the bottom. As we said, maybe it's worthy of mention the fact that the board unanimously approved the issuer statements regarding the MTO and deemed also on a unanimous basis the offered price fair from a financial standpoint. I will now leave the floor to Oddone to provide more details on fiscal year 25 results.
Hello. Good afternoon, everybody. As already mentioned by Joseph, let's move now to page 10 before entering into the analysis of 25 results. As mentioned by Joseph, following the DPCM of December 24th, we went through the different accounting for Tinexta Defence following the FRS term. Basically, the company has been deconsolidated since day one. It also has been restated the financial figures of the year at the end of 24. Basically, at the end of 24, you will see as an asset available for sale, while at the end of 25, these assets available for sale has been accounting at short-term cash.
This means that it's an asset held for sale, but following the prescription of the DPCM that was stating that the company would have put on sale immediately in the short term after, you know, the move out from the control of Tinexta. Basically, the correct accounting is reporting this within the net financial position as a positive asset. When the company will be definitely sold, we will cash in, we will move from credit financial receivable short-term to directly to cash. This is very important. Everything has been restated. All figures are really comparable. The new perimeter, as already shared with the market, is the full perimeter without Defence Tech.
As already mentioned by Joseph, the year ended with the revenue growing around 3%, so below our expectation, but still positive on organic basis, while the EBITDA went down almost 3% and also the adjusted EBITDA and net profit before adjustment has declined compared to previous year. Overall, the EBITDA adjusted close at EUR 103 million, with an adjusted EBITDA margin at 22.6%, reducing compared to previous year. The net profit reported is negative by EUR 45.8 million. I would say EUR 70 of these driven by impairment related adjusted on the put and the amount position. Very positive has been the free cash flow during the year.
The extreme discipline in working capital management, as well as already anticipated to the market of a much more rigorous management of the CapEx, allow the company to deliver more than EUR 70 million from continued operation of adjusted free cash flow in a very important growth compared the EUR 44 million of the previous year. What happens to the PNL? We can walk through at page 12. Basically, as I stated, the revenues went up, mainly I would say in two of the three divisions, with the pace lower than one expected, but still growing, while we recorded a declining revenue in cybersecurity.
In term of costs, overall, the costs of service and labor cost was handled more online, aligned with previous year, also with an improvement in term of costs on the revenue. This occurred mainly in commercial and G&A costs. Why? While the third-party costs related to delivery of the business has increased quite significantly, as well as the increase of cost of salaries and personal costs went up quite significantly at 9%. This was occurred especially in Digital Trust and in business innovation activity. This has been mainly, it has been mainly the driver of the decline in term of EBITDA that impacted the results.
Other non-recurring costs were aligned with previous year, while in the depreciation, amortization, and impairment, you had here a significant increase. As during the year, already in June and September, some impairment has been recorded following the weak development of activities in basically three companies that are all foreign companies like ADF primarily, and then also CertEurope and Ascertia in Digital Trust.
During Q4, we had a shortfall in success rate of activity, ABS, that led us, at the end of the day, to the decision to develop a much more prudent plan compared to the previous one as the continuous decline of the success rate driven by the very difficult financial situation in France, where the contribution to innovation to the companies has been significantly reduced, has driven to, like I said, to deliver a much more prudent plan. This obviously has impacted the fair value of the company. This is the reason why we had to run a full impairment of around EUR 70 million in ADF.
Further, let's say, impairment occurred in Ascertia, also here driven by a weak Q4 that again led us to produce a much more prudent plan. We're also a minor adjustment also on fair value. The company is still increasing the performance compared to previous year. Again, also here, the level of the plan that has been developed drove to a minor adjustment of EUR 6 million.
On the other side, we had EUR 23 million of positive impact in financial charges, between financial charges and financial income, because basically, while we were reducing the level of the fair value of the company, also the level of the puts, the put and the now has been reduced by EUR 23 million. Overall, we can say that all the adjustment to the balance sheet of the group has recorded, has driven an impact of EUR 70 million, and this is exactly different from the positive of EUR 30, of EUR 35 million, compared to the negative of EUR 40 million. These are the main drivers of the results.
You may see also that the net profit of discontinued operation of Defense Tech has been recorded here. This is the combination of two different things as stated in our relazione. Basically EUR 3.6 is the results of the current 25 year of Defense Tech, while the remaining portion is a recovery of the previous devaluation that we ran when we were doing the public offer. This is the results of the company. In the following page, at page 13, you have here basically the adjusted figures taking out all the non-recurring operation. I would say that the level of EBITDA has been already explained.
The level of amortization of other intangible assets from consolidation, means from PPA, has been aligned with the previous year. I also went through the commentary of the EUR 93 million of impairment as well as the EUR 2.1 combined to the EUR 21.4, that is the benefit that we get on puts and. If we move to page 14, you may see here in one single page, basically the trends that I already anticipated to you before working into much more detail. Digital Trust has a grow in the range of 7% in term of revenue, only 6% in term of margin.
Cybersecurity went down 2% in the revenue, being able to keep the decline of the EBITDA at 4%, while Business Innovation had a very, very weak year, mainly driven by cost management, cost and personal cost management. Digital Trust overall, as we move to page 15, Digital Trust mainly deliver a revenue of 7% growth. That is, you know, slightly below our original expectation. Overall, we may say that this has been mainly driven by the performance, the not positive performance from Ascertia.
If we take out Ascertia, we may say that overall the company was able to grow in terms of revenue, in profitability compared to the previous year, not at all far from the expectation. Very important is also looking in our business to the third bullet, in line with our expectation as previously announced, the business unit dropped materially the CapEx that were extraordinarily higher in 2024, to less than EUR 14 million. Like I said, we have more or less the same marginality. EBITDA went up around 6%, mainly driven by the performance of Ascertia, and that we delivered year to date.
In Cybersecurity, the performance has been not aligned at all with the expectations. The company was not able to keep the level of revenue of the previous year. Especially we were facing insecurity solution area, a lack of capability to penetrate the customer and the market. Also we have some lack of profitability in some area of the activity. We were able more or less to keep the level of revenue in the digital, in the digital portion, mainly helped by some sales in proprietary product, basically the email, that is, you know, one of the most specific part of this business.
At the end, you know, in combination of the two, the company was not able to achieve the revenue targets and still not even achieve the same level of revenue of the previous year. The company worked quite a lot on costs, especially on labor costs that went down compared to the previous year, couple of million EUR. We are talking about around EUR 45 million of personal costs, so they went down. Where they were also able to recover the natural cost growing of the inflation related to the personal cost.
This was not enough to keep the profitability that was missed compared to previous year of around 4%, keeping the same level of EBITDA margin around 14%, but still not achieving what committed at the beginning of the year. In Business Innovation, we talk several times during the year, even last time when we issued the guidance, the management of the group knew from few days that a new issued rules for Industry 5.0 could have been could have hit significantly the profitability of the company.
At that time, we were only in a position to estimate a potential impact up to 3% of the profitability of the group in term of EBITDA. Unfortunately, this occurred. Basically, here, definitely compared to the last projections, we have been hit by the Industry 5.0, last minute changes, changing of the rule, but it has been clear that overall, the company was able to deliver a slight increase in term of revenue. In term of cost management, the company again, already missed EUR 3, 4 million of revenue profitability in last part of the year, without any opportunity to react in in such a short term. Obviously, this is the result.
In terms of the French market, the situation is difficult. At the end of Q3, the level of the success rate of the business was around 36%. Last year, the Q4, that was extremely positive, with 50% of success rate, drove the results up to 42% of success rate, enabling the company to deliver more than EUR 3 million EBITDA. Q4 this year has been dramatically low in terms of responses, answers from the public bodies entitled to issue the contribution to the investors, the success rate dropped to 31% in the Q4, affecting significantly the results of the year.
What we are observing there is that basically the positive, the files that has been accepted by the public bodies, went out last year with a 36% fee for us, that is linked to the level of investment in innovation. This year, with EUR 21K per project. It means that basically the government, the public bodies are approving only small contracts. You can imagine that small contracts have, by definition, a much lower profitability, while the largest contract has been refused during this period.
Overall, this combined, we lost EUR 3 million from ABS and the other EUR 4 million from the other part of the business compared to previous year, where Industry 5.0 has definitely impacted the result. In terms of balance sheet, I already explained how it has been dropped, the net financial position, and how much is accounted for the Tinexta Defence Group. Basically, this is already in the positive cash. Nevertheless, you know, the net financial position has been favorably impacted by more than EUR 70 million free cash flow. That is a very important achievement of the company. The company has already distributed EUR 20 million dividends overall during the year.
The net investing capital obviously has been declined, half of this relating to the write-downs of the goodwill of some companies and the consolidation of the Defence Group, that brought the net investing capital below EUR 600 million, while the goodwill now is EUR 370 million. Obviously, we had also an impact into the shareholder equity.
We have a decline of EUR 34 million in the shareholder equity that is driven by the exercise of the call, the put, let's put it this way, of our minority shareholder, Intesa Sanpaolo in Tinexta Innovation Hub S.p.A., that led us to record a loss, the equity of EUR 34 million, but as in the end, in the single balance sheet of Tinexta Innovation Hub S.p.A. by EUR 22 million. This has been driven, again, the low performance of Tinexta Innovation Hub S.p.A. has driven a lower valuation of the group, and therefore, we recorded a loss while we accounted for the put of Intesa Sanpaolo that is already in the net financial position as at the end of the year.
If we move to page 19, I think I already comment on the net financial position. If I go to the free cash flow, I may repeat here that, you know, we were able to increase significantly the cash generation of the group. Very strong discipline in networking capital management, where we improved significantly also in business innovation on top of other businesses. We reduced invoice to be issued compared to the previous year, and also we reduce the CapEx by EUR 11 million. Overall, this led us to this result. I think that's all. Is already I more or less explained what's happened at page 20, I leave the floor again. Thank you.
Thank you, Oddone . I will now go over some key elements regarding the current state of our BU's core market, as well as providing some color on the drivers for the future. Slide 22. Let's start with Digital Trust. Digital Trust division is operating in the ever-evolving digital transaction management market with established presence, as you all know, in primary EU countries. Currently, changes in the DTM segments are mainly driven by developing regulations both at a EU level and national level. Just to mention some examples, EU wallet, e-invoicing requirements, as well as the acceleration of new technologies such as artificial intelligence, which also highlights the need for stricter security measures.
The push for harmonization on a regulatory level as well as the fragmented competitive environment fosters a growing consolidation trend in the market, leading bigger qualified players such as Tinexta to acquire potentially small local players. The EU Digital Trust market is expected to grow on a CAGR-based 2024-2028 expected of 13.7%, with introduction of new EU regulation fostering a growing interest in identity management and Identity Wallet, which respectively will grow 15% and 57%, again, CAGR 2024-2028 expected, shifting from a previous focus of e-signatures. In this context, e-invoicing remains a complementary market. Given the push from EU regulation towards mandatory adoption, we all remind the market that the deadline is by 2028, and the CAGR is again very interesting, 2024-2028 expected of around 16%.
One of the main challenges for players in the space is represented by the asymmetry in the digitalization among EU countries, which all have different levels of digitalization. The matrix on the right-hand side of the slide clearly encapsulates this concept, highlighting the potential for penetration in markets that showcase low digital maturity and higher potential market size, such as Germany and the U.K., just to mention a few. In the next few years, DTM market expansion is well, is gonna be led by the aforementioned technology and regulatory standardization, as well as by stronger operational requirements and evolving regulation, unlocking new markets, with big players still needing a decree of customization at a local level, in terms of geographies.
The next, the InfoCert expertise and presence in high potential markets with varying levels of maturity could be instrumental in creating an optimization product offering, actually represent a strong advantage in the fast-developing DT environment. For cybersecurity, let's, you know, turn to page 23. In that case, the division mainly operates in the domestic market, in this case, providing both security solutions and system integration. The Italian cyber market is expected to grow strongly from the EUR 2.2 billion registered in 2024 to around EUR 4+ billion in 2030, with CAGRs of around 11%, 2024-2030 expected CAGRs that is, supported by more stringent regulatory requirements, in particular, NIS 2 and growing risk awareness, leading companies to increase their security budgets in a context where global cyber attacks are on the rise.
I mean, the news of these last few days makes this a very strong point. In this scenario, connects the cyber acts as a very specialized player, mainly focusing on finance segments, navigating a fragmented yet competitive market environment. On the other hand, the system integration market instead is worth approximately EUR 6.4 billion, and that instead is expected to remain stable in the same course of time between 2024 and 2030. The market is characterized again by a very fragmented and competitive landscape, and this will represent obviously some opportunities in the near future. Let's now turn to page 24 and go over some key elements of business innovation. I've only provided a very, I would say, thorough analysis of what the year represented, but let's give some context here.
Tinexta Innovation Hub is positioned regardless of the performance of this year as the leading Italian player in subsidized finance, for example. That is based on revenue. In particular, aside from subsidized finance, the company provides also advisory on European financing, sustainability and energy, corporate finance, innovation, internationalization, and digital marketing. Looking at the finance and grants or F&G segments in Tinexta Innovation Hub market, we can see the normalization of tax incentives and an overall reduction in the number of subsidized finance programs at a EU level in the next couple of years. That is for sure.
In Italy, the reduction in available funds, which we witnessed this year, combined with a decrease in deductible rates from the 40%-50% in 2022 to the 10%-20% in 2025, and the procedural complexity lowered the attractiveness of subsidized finance programs such as Industry 4.0 and 5.0. The evolving form of the 5.0 or the iperammortamento could be, though, a driver for revenue in the next couple of years, already starting in 2026. Definitely, an eye to look at that. At an EU level, France continues to be unfortunately very penalized by political and economic instability, hindering public budgets and introducing stringent requirements for approval. Spain, on the other side, sees the expected reduction in RPP for the next few years.
In 2024, we decided also to introduce the advisory business line to expand the offering to a complementary product portfolio by diversifying revenues sources, implementing cross-selling and leveraging twins transition. The advisory serviceable addressable market, also known as SAM in Italy, is expected to grow 9%, and that includes ESG export, temporary expert services and digital marketing. Let me now turn it to Oddone for the 2026 guidance and 2026-2028 business plan targets. Oddone?
Okay. Thank you, Joseph. You know, after the view from Joseph on markets and activities, let's try to look at the overall picture of how we are shaping our plan for the group and from the different business unit for the next years. If you look at 26, I will go first by business unit. Overall, I may say that this year we have taken a much more prudent approach in terms of revenue, but mainly this also in terms of cost. We are putting together a plan with much more adherence to the previous performance in terms of revenue.
We need to stay aligned with the performance that the group has been able to deliver over the last couple of year in term of revenue. We decided, therefore, to adjust our cost basis in order to allow an EBITDA growth, compared to the fact that this year, the like-for-like result has been lower than previous year. For Digital Trust, the growth expected in 2026 is in the range in term of revenue 4% or 6%. We do expect to leverage on this, trying to have much more focus and discipline on the cost basis. Therefore, we do expect to grow around 7%.
That is higher than the performance we deliver during internal growth compared to what we deliver in 2025. In terms of cybersecurity, we do not expect significant recovery of revenues. Definitely, we do expect to recover some revenue in the area of cybersecurity because the market is there, the opportunity are there. We were not able to catch them as expected during 2024. Still, we are working to achieve a growth in that area that could lead us to deliver a growth revenue, you know, more or less in the range of 2%-4%. Obviously, further discipline is expected, and we will continue to reduce costs in this area that especially on third party, as well as a much more disciplined management of personal cost.
This could lead us to increase 15%-17%, but again, we are talking about a significant percentage, but on a significant cost basis because we are talking about EUR 80 million. If we recover to recover EUR 2 million, it needs to grow 15%. We are not talking about a strong increase in term of absolute value. It's more a management of costs here. In term of business innovation, the growth is still interesting. We do expect to grow internal revenue 6%-7%.
We do believe that, especially, being able to grow also in 25, despite of the negative impact of Industry 5.0, is driving us to think that we could be in the position to grow more than the 6% during the year. This revenue growth will be fueled mainly by the new regulation on what we call iperammortamento, that could allow the finance and grant business to recover revenue, but especially margins. As you know, the rate, the aliquota here is around 40%, despite the fact that this is an iperammortamento, an accelerated depreciation that is taking quite a long period. Here there is an opportunity.
Also, there is the opportunity on our Finanza Agevolata Valutativa, where the positive performance of the subsidiary Warrant funding project has already achieved the fixed part of some project. As soon as the project will be completed, we will achieve, and this is expected during 2026, significant term of revenue and profitability. I would say that half of this growth should be reasonably secured. Obviously is projected a partial recovery of 20 in 2026 of ADF. If we combine this with a much more disciplined cost management should allow us to recover the profitability, not at the level of 2024, but much closer to 2024 results than to 2025 results.
We do expect still capability of cash generation in the range of 25%, if not even better. This should lead us to a net financial position, a ratio between net financial position and EBITDA as a group in the range of 3.1-3.3. At combined level, obviously, the revenues are expected to grow 3%-4%, while the EBITDA adjusted 7%-8%. This is the projections for 2026.
If we move to the three years plan, again, we do believe to be able to continue our path of grow profitability at quite interesting pace because we are talking about 7%-9% on a compound average growth rate, driven obviously with the help of revenues growing in the range of 3%-5%, but fueled by the very extensive capability to handle third party costs and personal costs. Cash generation is expected to continue very solid over the three years. It capable to land in the range of 2x the EBITDA. Finally, at view level, as you can see, there is no much more movement in the next two years, 2027, 2028 compared to the previous one.
Again, this is overall. Basically, we do see Digital Trust capable to start to grow again at a very interesting path, especially in profitability, cybersecurity to recover and to improve three points of profitability. Basically to land in the range of 16%-17% EBITDA. To bring, like I said, not yet back in absolute value to the results of 2024, but still very close to 2024 results for the business enough. This is all. I completed my part two, I leave to Josef. I think now we have the Q&A part.
Yep, and correct. If we can, operator open the Q&A line for any questions, please.
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Thank you.
Thank you very much, and have a good evening.
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