Good afternoon. This is the Chorus Call conference operator. Welcome and thank you for joining the Wiit First Quarter 2026 Results Presentation. 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 0 on their telephone. At this time, I would like to turn the conference over to Mr. Alessandro Cozzi, CEO of Wiit. Please go ahead, sir.
Thanks. Good afternoon, everybody, thanks to join this conference call. The music Okay, sorry. Good afternoon, thanks for joining this conference call. This morning, the board of director Wiit approves the results of Q1 2026. You can follow with the presentation I sent. At the end of the presentation, there is a Q&A session where you can.
[Hello, this is the operator. Can you hear me? Hello, sir, madam, can you hear me?]
EUR 4 million, the most important for us is the recurring part of the revenue was EUR 34.4 million, plus 1%. There is 90.9% of the total revenue. That means for us, high visibility and predictably in term of revenue.
Thanks to the scalability of the business, the EBITDA growth more proportion of the revenue. EBITDA was EUR 17.2 million, EBITDA +9% compared EUR 15.8 million previous year. EBITDA margin was 41.6% compared 38%, plus 320 basis points in one year. In this year, we don't have M&A effect. It's pure organically. EBIT consequently growth faster, EUR 9.4 million, 21% of the revenue compared EUR 7.8 million, and the margin was 22.7% compared 18.9%. Big incremental in terms of profitability, thanks to the economies of scale and the utilization of our assets. The profit remain stable, EUR 4.1 million, mainly impacted for more interest expense related to the bond issued last year.
Net debt is EUR 137 million compared to EUR 156 million in the adjusted net debt. There is a market value of the treasury share at the end of March 26, there is not including the IFRS 16 effect for the leases. Go to the page 4. Breakdown in term of countries. Italy performing very well. Growth in term of revenue, EUR 15.4 million. In term of EBITDA, mainly recurrent, EUR 14.4 million recurrent. The EBITDA was EUR 8.4 million, 54.2% of the revenue compared 48.9%. EBIT in Italy, very impressively growth, EUR 4.2 million, 27% of the revenue compared 18.8%.
Germany, we know in Germany we have 1 transition year, let me say, for the effect of the churn we noticed in the market last year. We fully compensate the churn with the new booking. The revenue remains stable. RR was EUR 16.6 million and 94% of the revenue ex-excluded the Gecko, the consulting company. EBITDA stable, EUR 8.1 million, 37% of the margin. Little higher compared last year. Whatever we have, despite we have the churn during the period. EBIT was in line with last year, EUR 4.9 million, 22.8% of EBIT margin. Switzerland, this is good news.
They turn around this trend and we start to see a little more in the green way the performance of the company. Not only we suffer a little bit the size, but despite the size, the performance started to be more profitable. Revenue is stable. Revenue recurrent was EUR 3.4 million, in line with last year. EBITDA was EUR 700,000, 18% EBITDA margin. I need to remember that when we bought this company, it was to turn around with the negative EBITDA. The first year, we achieved just a break-even point in term of EBITDA. Now entering in the second year inside our group, and the EBITDA is improved a lot.
50% starting from zero, from my point of view, is a very, very good result. EBIT, the same recovery, is 7% of the revenue. That means that totally group level, we achieved EUR 41.4 million revenue, EUR 34 million recurring revenue, 90% of the total revenue. EBITDA was EUR 17.2, 51.6% EBITDA margin, and EUR 9.4 million EBIT, 22.7%. In our view, the EBIT margin will be improved again in the next following quarters, thanks to the economies of scale and the reduction of the amortizing. For the last CapEx, I jump now to the breakdown. I can go directly to the EBITDA, page 6. If you can show Italy and Germany and Swiss.
What I anticipate, Germany was stable in term of the EBITDA profitable, EUR 81 million. Big improve in Italy from EUR 7 million to EUR 8.4 million, thanks to the efficiency inside the group, consolidation, centralization of the services, and the reduction of the amortizing. Go to the EBIT margin, the page number 7. EBITDA is stable in Germany, EUR 5 million, EUR 4.9 million is very few difference term of EBIT. Strong improvement in Italy, from EUR 2.7 million- EUR 4.1 million, from 18%- 27%. Our target is in the midterm target to achieve 29% of EBITDA or EBIT margin, Italy is just in the correct way.
Now we are working in Germany to recover the EBIT margin. We are still in the correct way to achieve this target. CapEx, page number 8, is not more sense to analyze the single quarter because we did CapEx depend, not all the quarters, we have the same CapEx. In this case, we have less CapEx than compared to last year. We spend totally EUR 7.5 million . EUR 4.2 was cash CapEx, EUR 2.1 maintenance. No, scuse, sorry, is Italian.
No, maintenance is yours.
Maintenance and 2.1 was growth CapEx. Correct. Okay. In general, we estimate, we confirm that we estimate at the end of this year to spend EUR 24-25 million of totally cash CapEx. We remain in line with the guidelines. Bridge of net debt, page 9, main impact of the treasury share buyback. In the first quarter, we were aggressive in term of buyback. We bought roughly EUR 19 million of shares because the price was low and was a good deal for the company to make this buyback during the first quarter. Currently, the company own roughly 12% of their own share, and this was our target declared last year.
General cash flow was strongly, with EUR 17 million, cash CapEx EUR 4 million. Interest pays a little higher for the interest of a new bond. This is the point. Net debt, page number 10. The leverage remain strategic for Wiit. In this chart, you can see that net leverage at the end of March was 2.3x , and there is a properly low, if you analyze our covenants character in our bond. We have 4x this ratio to maintain, and currently we have stayed 2.3. We have cash, and we have more capacity at the moment leverage to finance M&A. M&A come back in our very, very important.
We are in two dossier in the same time doing open due diligence. Now we are working to expand our perimeter. The main zone we are looking are naturally DACH zone in Germany, where we are one target, sizable target, let me say. We are starting to talk to open a new country with a small deal. Currently, the company is very committed to find a target to buy in the next quarters. That's it. We are ready for the Q&A. Thanks.
This is the Chorus Call conference operator. We will now begin the question-answer section. 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 Giorgio Tavolini of Intermonte. Please go ahead.
Hi, good afternoon, and thanks for taking my question. It's regarding the firepower for M&A. You said in your recent interview that you have EUR 300 million firepower for M&A. I was wondering if you have a specific timeline, given that you have these two dossier under due diligence, one in the DACH zone and the other one in a new country. The second one is how should the CapEx guidance change in the event of this leaseback in Germany for your German non-Premium Cloud data center? If you have any potential impact on your let's say free cash flow and P&L, and also your CapEx guidance.
Okay. In my interview, I said EUR 300 million because in this value we include, I suppose, to rise EUR 100 million-EUR 150 million from the sale and leaseback of data center. The project is going. We are sending the teaser, preliminary teaser, the potential bidder. We completed due diligence end of May, and we expect to receive formally the first offering in June, and we will decide in June if we go or not to this deal. Timing for M&A, probably the German one is more faster, I think, 1 quarter. Due diligence is not so easy because the company is not small. It's not only in Germany. They have a branch in U.S. Very small branch for the U.S., but made in Germany.
That means more time to do the due diligence, technical overview, customer side. I think we need 2, 3 months to complete due diligence. After that, we can decide if we go or no. At the same time, we have another small opportunity. Time and timeline is always summer. I think end of summer, we can decide if we go or no. This is the time. In term of CapEx for sales back, IFRS 16 means we put in the CapEx naturally the full, the full contract of the lease. In case of sales and lease back. For example, I assume EUR 150 million, we put in our CapEx EUR 150 million, and we receive the same amount of cash. It's natural on the leverage of the company, naturally in our balance sheet is a CapEx. Because we put the 10 years contract lease in our debt and like assets.
Okay. Thank you, Alessandro.
The next question is from Giovanni Selvetti of Berenberg. Please go ahead.
Hello. Can you hear me?
Yes, yes.
Yeah. I was wondering if you can give like a bit more flavor on what meaningful means for the acquisition in terms of revenues. What kind of revenues should we be talking about? Whether, you know, the profitability of the target company is more or less in line with that of Wiit. If you can possibly maybe explain greater details how come the EBIT of Italy grew so fast in over 1 year. If there's a specific thing that or, you know, it's like you said, the target remains 29% despite the jump in only 1 year. Thank you.
Alessandro.
Okay. I started to give you more flavor about the M&A. The target we are analyzing is in the range of revenue, EUR 23 million-EUR 25 million term revenue and EUR 12 million term EBITDA. This is the size. Okay? It's mainly data center business with infrastructure. They have very, very I can't disclose on naturally a lot of things, but in general, they have two data center in Europe. One is, naturally, part of the synergy. It's in Frankfurt, we want to, in case, migrate in our campus Dusseldorf. The other one is in a very, very interesting city, with very, very cheap cost of energy. I can't say other. Okay. It is interesting for the cost of energy.
Italy, I think Italy can achieve this a bit more because the facility, the asset we have in Italy is 50%. The completion rate is 50%. That means the organic growth is accelerating because thanks to the Broadcom effect, we have a commercial pipeline very, very high at the moment in Italy, and I expect in Germany in the future the same. Currently in Italy, the pipeline is very, very important because a lot of ex-partners Broadcom are forced to migrate. That means we can increase the utilization rate of data center without do expansion CapEx, and the EBIT margin could easily achieve 29%, from 27%-29% in Italy. In Germany, it's different, naturally.
We started from 22, and the increase of the EBIT in Germany will be directly impacted on the more high value services we will sell on the customer base. In Germany, 30% of the business is premium, 70% is more traditional. We are changing the mix, but they need time. It's not the one quarter effect. We need 18 months to change the mix of the revenue. Our target is to achieve the same level with the EBIT in Germany, changing the mix of the revenue. Italy is just in place.
Okay. Thank you.
The next question is from Domenico Ghilotti of Equita. Please go ahead.
Good afternoon. Well, first, I would like to thank you for the presentation because it's becoming so richer and clearer quarter after quarter, so much easier to follow your trajectory. I have a follow-up on the commercial pipeline that you were commenting. I'm trying to understand how much is driven by the Broadcom opportunity and how much is, let's say, the underlying, so the existing performance? If you can remind me the churn impact in Germany in Q1, and how much do you expect for the rest of the year? Just to try to extrapolate the underlying organic performance net of the churn that you were mentioning in the previous calls.
In Italy, currently the pipeline is increasing faster for the Broadcom effect. The normal pipeline is in line with last year in terms of value. On the top we have important amounts. What I anticipate, I need 2, 3 months to sign the first contract to understand how is really signable or not. It's mainly in the indirect channel because it's related to ex-provider Broadcom. It is not direct sales. It's ex, carrier, small providers. It's more business for the indirect channel. Is important amount. Is consider that if analyze the total pipeline, the Broadcom effect is 70% more of the normal pipeline, on top of our normal pipeline. It's 3x now currently the pipeline. Okay.
The effect of the churn. The normal churn, if you exclude the extraordinary churn of last year, was lower than the last year. In Germany too, the same. We have low churn in Q1, normal. We haven't had the full effect this year of the churn of the last year. The impact in Germany is EUR 3.8 million.
How much, sorry?
EUR 3.8 million full year. That means, EUR 900,000 per quarter.
In 2026, you mean?
Yes. Yes, yes. Yes.
Okay.
If you see the Q1, the revenue was stable. That means, we full compensate the effect of the churn with the new booking.
Okay. It will last until the end of the year, so we have to assume something.
Yes.
like, almost EUR 1 million per quarter. Okay.
Exactly. It's roughly EUR 1 million revenue per quarter. Exactly. The good news is that this effect was only for 2 clients, effect M&A. We don't see additional churn. The churn, the residual is totally in line with the historical value of the company. We have, for example, for the full year, group level, EUR 200 million yearly churn, and we are inside this value. Italy, Germany and Switzerland for the group level is very, very low. Consider EUR 140 million of revenue, EUR 2 million is 1.2%. It's very, very low, the churn.
Okay. It's just a clarification. The pipe, excluding Broadcom, that is, okay, a particular booster today.
Yes.
You are saying that Italy, even excluding Broadcom, is running similar to last year.
Yes.
Performance on the pipeline, commercial pipeline.
Yes, it's correct. If you see the organic growth in Italy was 7.8% Q1.
We expect to grow 10%, 11% yearly. Exactly.
Okay.
Excluding the effect of Broadcom.
Yeah, okay. That will probably affect more 2027.
Yes. We have more visibility July, and we can update our model when we, when arrive the first contract from Broadcom effect in July, we can update the 2027. In any case it's not, this Broadcom effect is not impacted the figures for 2026. The type of migration process.
Okay. Thank you.
As a reminder, if you wish to register for a question, please press star and one on your telephone. The next question is from Gabriele Berti of Intesa Sanpaolo. Please go ahead.
Hi, Alessandro. Thanks for the presentation. Just a follow-up on Broadcom from my side. I was wondering for how long do you expect the Broadcom boost should last? Should we expect these contracts to carry margins in line with the group average, or could they initially require higher onboarding costs?
The effect will be in the next 18 months because all the contract on the ex-partner Broadcom expired by June 2027. That means in the next 3, 4 quarters, the partner need to decide where migrate infrastructure. The effect is in the next or as the next 12- 18 months. In terms of booking and revenue, always postponed 6 months. That means 2027 to 2028 mainly for our positive effect we see. Pricing probably is little Not only, not probably, sure, is little lower than the Premium because the partner need to have a little margin. In any case, it's not below 40%. We expect to maintain a profitability around 40% for this business, but not less. Because the economic scale is higher.
There is less services because the partner manage, sell the client, use the services. From infrastructure perspective, we have good leverage on storage, backups, software, data center. This is a very, very high economical scale. I expect a little lower compared to our Premium Cloud, but not so lower. 40%-42%.
Thank you, Alessandro.
Once again, if you wish to ask a question, please press star and one on your telephone. For any further question, please press star and one on your telephone. Mr. Cozzi, there are more questions registered at this time.
Thank you, everybody, for the confidence, for the joining, and see you soon for the next presentation. Thanks. Good afternoon. Good afternoon. Bye-bye.
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