Company Profile FY2011 Results Innovation Reliability Success

Transcription

1 Company Profile FY2011 Results Innovation Reliability Success Milan, STAR CONFERENCE Borsa Italiana Management Presentation Michele Cinaglia, Chairman Niccolò Bossi, Head of M&A and IRO

2 Forward looking statement This communication contains statements that constitute forward-looking statements, including, but not limited to, statements relating to the implementation of strategic initiatives and other statements relating to our future business development and economic performance. While these forward-looking statements represent our judgments and future expectations concerning the development of our business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to, (1) general market and macro-economic trends, (2) legislative developments, governmental and regulatory trends, (3) competitive pressures, (4) technological developments, (5) changes in the financial position or creditworthiness of our customers, obligors and counterparties and developments in the markets in which they operate, (6) management changes and changes to our Business Group structure and (7) other key factors that we have indicated could adversely affect our business and financial performance which are contained in other parts of this document and in our past and future filings and reports. Engineering is not under any obligation to (and expressly disclaims any such obligations to) update or alter its forward-looking statements whether as a result of new information, future events, or otherwise. For additional information on such risks, we ask you to consult Engineering s filings with Borsa Italiana and CONSOB and to consult applicable Italian laws. 1

3 Profile, market, results Engineering Highlights CAGR comparison. Data in mln. Market stands for IT Italian Market. Assintel estimates

4 At a glance Welmington (Delaware) Brussels Belo Horizonte São Paulo Curitiba Buenos Aires Beirut 15.3% Engineering is the major Italian Information Technology Group and a leading IT multinational in Italy, Europe and Latin America. It is ranked as the fifth Company in its sector over the Italian Market according to annual revenues. In 2011, revenues reached 775,7 M, of which near 10% came from the international market and EBITDA totalized 92.2 M. The company employs more than 6,400 professionals, approximately 2,800 external resources and boasts a customer portfolio of over 1,500 firms, with operations in 37 sites in Italy and 7 abroad. 10Y CAGR 0.2% Market ENG CAGR comparison. Data in mln. Market stands for IT Italian Market. SourceAssinform

5 Highlights FY % Backlog + 2.7% Revenues Steady profitability Despite a very tough economic scenario, a strong pressure on prices and a negative trend in IT spending and slowdown of payment terms, the Group reported higher revenues and stable margins as compared with FY2010. Backlog reached the best consolidated result ever thanks to the extraordinary performance of our Managed Operation Department. The Net result is affected by extraordinary charges counting for 15.8 M implying a positive economic recurring effect on personnel cost of 8 M on year basis from FY2012 onwards % % * +0.2% % Net Revenues EBITDA EAT Backlog 4 Data in mln. Referring to FY2011 Results

6 FY2011 Segment Reporting Revenues EBITDA 10.5% 11.2% 21.0% 15.7% Projects delivered abroad 32.3% 29.2% PA & HC Industry* Finance TLC % 43.9% From Official FY2011 Company Data; Split by Markets (Revenues and EBITDA value). % on Consolidated Net Revenues. Data in MLN. *Industry aggregates Utilities.

7 FY2011 FY11 FY10 FY11 FY10 Net Revenues % Work in progress % Value of Production % Booking % EBITDA % Net Revenues % Equity % Backlog % NFP Evolution (21.0) (46.7) 0.49x Ebitda (45.1) (10.0) Extraordinary charges Restatement 15.8 retirement plan 7.6 severance indemnity 9.7 acquisitions 2.0 re-organization 45.0 Account receivables from Regione Sicilia referring to 2010 activities still to be paid 35.1 Total extraordinary charges (93.2) 7 Data in mln

8 IT Market Preview Software and Services Market Value 12,081 CAGR +0.2% 12, % 12,442 Y 2000 FY2010 FY2011 CAGR +15.3% % Eng Revenues % 6.4% Market Share 1,5% 8 Data in mln. Source Assinform and Accounts Engineering

9 Assets Our distinctive success key factors CAGR comparison. Data in mln. Market stands for IT Italian Market. Assintel estimates

10 Business Model Partners Human Capital Competence Centers Market Divisions Business Lines Customers Customers The Group is organised around four vertical markets which, over their three-decade history, have gained comprehensive insight into each business and crafted solid relationships with customers. This knowledge, coupled with latest-generation technology, allows the Company to provide its clients with an offer that is both complete and of value. Engineering solutions serve the core of the business operations of the customers and require an essential capability of integration. Universities Suppliers Research Centers Research & Innovation Research Centers Institutions The Research & Innovation department, through 320 skilled staff, transfers innovation to the factory and manages projects in several technological environments. 6 Competence Centres, coordinated by the R&I, guarantee osmosis of expertise, information sharing and provide best-practice services across the entire offering. 10

11 Business Model Software Plant Management Systems Managed Operations Finance ERP System Integration & Consultancy TELCO & Media Research & Innovation Industry & Utilities Outsourcing & AM ECM PA & HC IT Security Broadband & Media 11

12 Workforce 43% North Italy 67% male 33% female 75% clerks 56% Center South 6,442 1% Abroad 47% High School 6,442 Employees 53% University Degree 20% middle management 5% executive 2,800 2,800 Contractors 145 Sales force people 13

13 People Education & Training Improvement Certifications Customer Satisfaction Quality Technical certifications Revenues 93% 93% of employees are directly involved in business activities 104,000 h of courses delivered by our ICT School during the last year 285 people with PMP certification Effectiveness & Efficiency Profitability 14

14 Innovation Portals, service-oriented architectures, Smart Cities, Health and Energy, Future Internet, data management, business intelligence, software engineering, Cloud Computing, Open source, logical security are just a few of the main areas in which Engineering boasts competence and leadership in innovation. 30 M Nearly 2011 Total Investments 18.7 M of which in research and innovation Member of the Industrial Partner Board of the Knowledge Innovation Community EIT ICT Labs Awarded as one of the most advanced innovator representing Italy at Shangai EXPO, Engineering conducts several research projects in Europe with partners worldwide. We are developing new technologies for the audio-visual internet contents research (PHAROS) and the new 3.0 release of the complete open source platform SPAGO which insists on business intelligence applications, software quality certification and services oriented architecture (SOA). We presented a 160 mln project in order to develop the new information system platform that will represent the base of the network infrastructure of the future. 15

15 Solutions 3 Data Centers Customers new names in % Revenues Growth TIER IV Our Managed Operations Department provides clients with a full offering of Outsourcing Services thanks to an highly advanced Technology Center located in Pont Saint Martin. The site responds to TIER IV Uptime Institute requirements and it is certified PCI-DSS and ISO The Engineering technology infrastructure can rely also on Torino Campus and Padua Disaster Recovery Center, realizing the most reliable and powerful Data Center Solution in Italy. After years of research, design and development as pioneers in Europe, the offering is now available in CLOUD mode. Performance, reliability, flexibility are the most common words to define our service. 16

16 Solutions A broad portfolio of more than 200 proprietary solutions spanning from a CRM Suite for Utilities (Net@Suite) to 60% 60% coverage of healthcare market Compliance and Governance software for Banks, from Fiscal Management for Local Authorities (Engineering Tributi) to a complete ERP system for administrative and clinic processes in the healthcare sector (AREAS), from tlc platforms for mobile payments to applications for new smart-phone and tablet devices, from Business Process solutions (EngO) to High grade consultancy (Nexen). More than 800 municipalities served 80% 80% coverage of finance market 40% 40% market share in the Utilities national market 17 Gartner Magic Quadrant 2011 for Utilities Customer Information System.

17 Focus Healthcare and PAL HC and PAL 23.3% Products PAL Nettuno 10 installations Thebit 5 installations GERI 10 installations ACSOR 20 installations Tributi 593 customers E-Grammata 60 Installations E-Praxi 10 Installations MNEMOS 4 Installations CRM-PA 2 Installations Products HC Other Engineering Divisions AREAS Platform 952 installations, of which: Accesses 244 Installations Clinical/Hospital 152 Installations Diagnostics 126 Installations Territorial 158 installations Administration and control 111 Installations Human Resources 161 Installations Main customers All major municipalities, regions, provinces and consortia. 51% of hospitals, 64% of Local healthcare centers, 33% of IRCCS institutes, 40% of University general hospitals. 18 Data from Segment reporting at # of installations, source Company Data

18 Focus Finance Finance 22.7% Products Compliance & Governance 465 installations Customer Relationship 54 Installations Payments & Settlements 12 Installations Centralized back-office & Asset Management 10 Installations Insurance 26 Installations Credit Management 3 Installations Other Engineering Divisions Main customers MPS, Banca Intesa SanPaolo, Unicredit, Banco Popolare, Deutsche Bank, Gruppo Generali, UBI Banca, Banca Mediolanum, BNL-BNP Paribas, Mediobanca, Banca Popolare di Milano, Banca delle Marche 19 Data from Segment reporting at # of installations, source Company Data

19 Focus Utilities, Oil, Gas Utilities Oil Gas 13.1% Products Platform 301 Installations of which: Personnel 5 Installations Net@SIL, Logistic 65 Installations Net@SIA, Administrative ERP 94 Installations Net@SIUOM, Human workload 15 Installations Net@SIU, Users 122 Installations GEOCALL 85 Installations Other Engineering Divisions Main customers ACEA, ENI, ENEL, E.ON, Hera, Iride, Italgas, AGSM, GdF, Terna, Edison, Snam 20 Data from Segment reporting at # of installations, source Company Data

20 Customer base A customer portfolio of over 1,700 customers in Italy and abroad. Engineering has partnership with the largest Industrial and Credit Group which have globalized their production and activities as well as a strong overall relationship with the Public Sector. 94% 94% of our customers state their satisfaction is from good to excellent lent Top % Top % 21 Engineering 2011 data on overall turnover. Customer satisfaction data derives from a survey conducted by our auditing department

21 The Group The way we ve built a success story CAGR comparison. Data in mln. Market stands for IT Italian Market. Assintel estimates

22 Structure Group Engiweb Security Engineering II SPA 100% 100% Engineering Tributi Since the IPO, the Group has completed several extraordinary deals. Thanks to an accurate scouting approach and attentive deal execution, Engineering has constantly integrated assets and people in order to broaden the spectrum of owned solutions and reach a wider potential customers portfolio. OverIT Engineering Sardegna Nexen 95% 100% 70% 100% 75% Engineering International INC. Engineering International Belgium 25% 25% Engineering do Brasil 14.0% Total CAGR Acquisitions Disposals 9.0% Organic CAGR 2000 > 2011 organic Organic 60% 100% 75% Engo Engineering.IT 100% 100% 65% 182,7 SITEL Servizi Telematici Siciliani Sicilia e Servizi Ventures From Enginnering Official Accounts , Data in mln

23 Structure - Ownership Founders Cinaglia Amodeo 67.36% Free float 32.64% 35.15% Bestinver Gestion SGIIC ca. 10% 32.21% ING ca 4.5% Treasury shares ca 2.4% Others ca 15.7% Engineering, listed since December 2000 on Milan Stock Exchange FTSE STAR Segment, maintains a simple ownership structure with 67% held by the two founders (Mr Cinaglia and Mr Amodeo), and 33% free float. Major financial institutions focused on long-term investments continue to bet on the stock, aware of the strength of the Group Business Model and the reliability of the Management. Tommaso Amodeo; 16,01% Rosario Amodeo; 0,27% Michele Cinaglia; 23,18% Bestinver Gestion; 30,64% Marilena Menicucci; 11,97% Others; 48,22% Costanza Amodeo; 15,93% Mercato; 32,64% Treasury; 7,35% ING; 13,79% Shareholders structure at

24 SWOT Strengths Wide portfolio of reference customers Well implemented vertical offering Business model with high entry barriers and broad proposition Experienced management team Sound M&A track record and good ability to integrate acquired companies Best practices in delivery process (CMMI3, TIERIV and PMP) International R&D references Opportunities Further expansion through acquisitions and partnerships (a consolidator in the Italian IT market) Growing part of revenues comes from outsourcing (multi-year contracts, strict time-frame payment) New European contract awards Strengthening in Brazil Recent Government moves which should stimulate the digitalization of the public sector and accelerate the payment of their debts (by acknowledging the European directive 2011/7/UE) Changes in fiscal policy is going to make tax-rate lower by the end of 2012 (IRAP) International leadership in Open Source platform development Weaknesses Strong dependence on the Italian IT market Working capital dynamic affected by Public sector exposure (should be partially addressed see opportunities) Tax rate (partially addressed see opportunities) Threats Customers could reduce their 2012 IT budget due to the deterioration of the macroeconomic context Increasing competition from worldwide players 25

25 Financial Community Why the market will award the Group CAGR comparison. Data in mln. Market stands for IT Italian Market. Assintel estimates

26 Analysts & Consensus Specialist since January 2011 Coverage since 2007 Former Specialist and Coverage since 2008 Coverage since 2007, as Banca Leonardo Coverage since 2009 Coverage since 2012 Consensus Value of Production EBITDA EBIT Net Income Data in mln.

27 Annexes From IPO up to now 28

28 11Y Growth CAGR ,0% Organic CAGR ,0% Total 2000 > 2011 organic 182, IPO 12th December MLN shares (20% offered as free float) 40 / share 100 M raised Acquisitions Disposals Organic Data in mln. Source: Company data

29 11Y Growth > 2011 organic 182, Acquisition of Famula Online and Olivetti Sanità 40% Capital acquired 886 K paid Revenues came in at 4.5M ( ) 100% Capital acquired 38.6 M paid Revenues camein at 20.2 M ( ) Data in mln. Source: Company data

30 11Y Growth > 2011 organic 182, Acquisition of Neta and constitution of BIP 100% Capital acquired 18.3 M paid REVENUES came in at 19.9 M ( ) % Capital owned 60% on 2007 Revenues camein at 5.1 M ( ) Data in mln. Source: Company data

31 11Y Growth > 2011 organic 182, Acquisition of Overit and Caridata 100% Capital acquired 1.4 M paid Revenues camein at 3.7 M ( ) % Capital acquired 9.2 M paid Revenues camein at 22.6 M ( ) Data in mln. Source: Company data

32 11Y Growth > 2011 organic 182, Acquisition of Trend and costitution of Nexen 100% Capital acquired 50 M paid Revenues came in at 10.8 M (2H 2005) % Capital owned 1.5 M paid Revenues camein at 4.0 M ( ) Data in mln. Source: Company data

33 11Y Growth > 2011 organic 182, Acquisition of ProValue and disposal of BIP* 100% Capital acquired 4 M paid Revenues came in at 3.1 M ( ) % Capital owned and sold 14 M gained Revenues came in at 35.7 M ( ) Data in mln. Source: Company data

34 11Y Growth > 2011 organic 182, Acquisition of Atos Origin Italia and Xaltia % Capital acquired 45 M paid Revenues came in at 266 M ( ) 100% Capital acquired 15 M paid Revenues came in at 12.3 M ( ) Data in mln. Source: Company data

35 11Y Growth > 2011 organic 182, Acquisition of A&B and disposal of Softlab and Famula Asset deal Revenues camein at 4.3 M ( ) 100% Capital owned and sold Revenues camein at 34.1 M ( ) Data in mln. Source: Company data

36 11Y Growth > 2011 organic 182, Acquisition of Dynpro Sistemas % Capital acquired 7 M paid Revenues came in at 8.4 M ( ) Data in mln. Source: Company data

37 11Y Growth Value of Production CAGR ,0% Orders CAGR % ,7 215,8 256,5 276,1 322,3 388,3 425, Engineering Group % 12.5% 12.2% Atos Backlog CAGR % % EU IT S&S Companies IAS EBITDA % 7.1% Data in mln. Source: Company data, EITO, JCF

38 11Y Growth Equity Assets 923 CAGR % 310 CAGR % Capital Employed CAGR % NFP NFP Cash Debt (17.1) (20.3) (30) (38) (45.1) Data in mln. Source: Company data

39 Company Profile FY2011 Results Thanks for your attention! Engineering Ingegneria Informatica SPA Via San Martino della Battaglia ROMA Italy Tel Niccolò Bossi M&A Director and Investor Relator Strada 1, Palazzo F/ Assago Milanofiori, MI Italy Tel [email protected] 40