Icona Technology SpA: Icona Technology S.p.A. Reports First Half 2024 Financial Results

Cinisello Balsamo (MI) (pta018/26.09.2024/12:32 UTC+2)

Financial Performance Overview – Icona Technology H1 2024

• Net Sales: Reached €1.760.000 in H1 2024, compared to €1.070.000 in H1 2023, representing a growth of 65%. The significant increase in revenue is largely driven by the consolidation of Explan Consulting Srl's financial results. Explan's contribution, coupled with strong recurring revenue and organic growth (7%) of the historical business, has boosted overall performance.
• Recurring Revenue: Approximately 56% of total revenue comes from recurring services, reflecting strong customer retention and ongoing contracts. This base of predictable revenue provides stability and ensures a steady income flow, mitigating the impact of market volatility.
• EBITDA: The company posted a loss of €21.000 in H1 2024, compared to a positive EBITDA of €110.000 in the same period of 2023. The negative EBITDA is attributed to reduced sales for certain products, notably Acty and Deskoala, and the strategic investment in the new Service Qube platform. The latter is expected to generate future returns as the market adoption phase progresses.
• Net Loss: The net loss widened to €117.000, compared to €26.000 in H1 2023. This reflects the combined effect of increased operating costs, personnel expenses, and external service fees, especially linked to the development of Service Qube.
• Net Financial Position: The group's net financial position stood at €-631.000 (Net cash) as of June 30, 2024, impacted primarily by the acquisition of Explan Consulting in 2023. Despite the increase in debt levels, the company maintains a strong cash position of €920.000, more than double its financial liabilities, reflecting prudent liquidity management.

Giorgio Nepa, President of Icona Technology, comments: "The first half of 2024 has presented several challenges for Icona Technology, particularly in market demand for some of our established products such as Acty and Deskoala. The decline in sales for these solutions, combined with the initial phase of market adoption for our new Service Qube platform, has put pressure on our financial performance, resulting in a negative EBITDA for the period. However, it is important to note that these challenges are part of a broader shift in our strategic focus. The investments we are making in Service Qube, while having a short-term impact on our costs, represent a key opportunity for future growth. We are confident that as the market recognizes the value of this platform, we will see a positive response that will contribute to strengthening our revenue base in the coming quarters. Additionally, the consolidation of Explan has provided a solid contribution to our revenue growth, and we are continuing to explore synergies across the group to optimize operational efficiency. We have already adjusted our cost structure for the second half of the year, ensuring that we maintain a balanced approach to growth and profitability. While the financial results for this period highlight the need for careful management, we remain focused on leveraging the opportunities created by our ongoing investments in innovation and customer-centric solutions. We believe our commitment to technological advancement and operational flexibility positions Icona for sustained growth and long-term value creation."

Cinisello Balsamo, September 26, 2024. Icona Technology S.p.A. ("Icona Technology") (ISIN IT0005465528 – ticker: CARE), an international scale-up dedicated to advancing the digital transformation of after-sales services, today released its financial results for the first half of 2024.

Economic and Financial Performance

Revenues for H1 2024 amounted to €1.759.778, an increase of €690.264 compared to 2023. This revenue comprises 65% from Icona Srl and 35% from its subsidiary, Explan Consulting Srl, with the growth mainly driven by the consolidation of Explan's results, plus single high-digit (7%) organic growth of the historical business. Notably, 56% of the group's total turnover came from recurring services.

The cost of raw materials and goods rose by €178.983, primarily due to Explan's business activities focused on hardware and software resale.

Service costs and personnel expenses represented more than 50% of the group's revenues, with a €334.654 increase (+60%) over the previous year. This growth was driven by the consolidation of Explan's results, higher external software development services and sales-related activities.

Since 2023, the group has incurred external service resale costs related to developing its new Service Qube platform. These transactional costs are closely monitored to maintain adequate margins. Although the investment in Service Qube development has significantly impacted costs, market interest is expected to drive revenue growth in the short term.

Personnel costs increased by €308.259, reflecting the contributions from Explan, compensation adjustments, and contractual changes implemented under the national labor agreement (CCNL Commercio) in April 2024. The number of employees at Icona remained stable. The group increasingly uses external consultants instead of direct hires to enhance cost flexibility, allowing for easier cost adjustments throughout the year while maintaining competitive compensation to attract and retain talent.

The group reported a negative EBITDA of €-21.225 for H1 2024, compared to €110.275 in the same period of 2023. This decline was due to a slowdown in the sales of the Acty and Deskoala products and the initial market uptake phase of the Service Qube platform. The company expects the platform to generate positive results in the coming months as market adoption grows.

In response to the first-half results, the group has revised specific projects planned for this year and implemented cost-saving measures for the second half to protect year-end margins.

The net financial position stood at €-630.645 (Net cash) as of June 30, 2024, with short-term debt of €148.368 and long-term debt of €189.759, which nearly doubled compared to the previous year due to the consolidation of Explan's financials. These liabilities were covered by €919.578 in cash and €49.194 in financial receivables. Despite a cash decrease of €1.693.889 following the acquisition of Explan in July 2023, the group's cash position remains more than double its financial liabilities, reflecting prudent financial management and ongoing monitoring of cash flows.

Significant Events

Explan Consulting Srl Capital Increase
On April 26, 2024, during the approval of Explan's 2023 financial statements, shareholders resolved to recapitalize the company due to previous losses that had eroded its equity. Icona Technology's Board of Directors ratified this decision on May 13, 2024. On May 30, 2024, the group contributed €158.400 to Explan's capital increase.

Appointment of New Board of Statutory Auditors and Auditing Firm
On April 29, 2024, during the approval of Icona Technology's 2023 financial statements, a new Board of Statutory Auditors and an auditing firm were appointed, with a three-year mandate.

Strategic Project for Service Qube
During the reporting period, Icona Srl launched a strategic project for the development of the Service Qube platform, forming a multidisciplinary team involving the Boards of Icona, Explan, and Xplo. The project is focused on demo management, evolutionary developments, and infrastructure upgrades. The first meeting took place on January 19, 2024, where a shared technical-architectural strategy and action plan were defined.

Organizational Structure Project
Icona Srl also initiated a project to streamline its organizational structure, focusing on optimizing roles and responsibilities. Supported by expert consultants, this initiative includes mapping current processes and defining a new organizational chart, which is expected to be finalized by the end of the year.

OneCall 247 Project
In the first half of 2024, Icona Srl developed OneCall 247, an innovative global technical support solution following a "Follow the Sun" approach. Integrated with Deskoala, Salesforce, and Dynamics, OneCall 247 centralizes call management and improves traceability, with multilingual Text-to-Speech features enhancing user experience. This solution is positioned to improve operational efficiency and deliver significant value to clients.

Explan Consulting Srl Initiatives
In a growing market for maintenance and facility services driven by outsourcing trends, Explan Consulting Srl has focused on technological innovation. Explan has invested in PLANGEI, a solution integrated with Microsoft Dynamics Business Central, recognized by Forbes as the most innovative ERP platform in 2024. During H1 2024, PLANGEI continued to expand its market presence in maintenance services, with the PLANCOM Dynamics application further strengthening PLANGEI's ERP positioning. Three new client rollouts are expected by the end of 2024.

Business Outlook

Service Qube, with its capabilities for remote support, spare parts management, and maintenance scheduling, remains the centerpiece of Icona's offering, helping businesses optimize operations, reduce downtime, and improve efficiency. Acty, with its real-time translation features and AI assistant Sophia, positions itself as the future of remote assistance, breaking down language barriers and enhancing global communication between technicians and customers.

Deskoala, a key component of Icona's ecosystem, provides ticketing management that supports post-sales interactions and integrates deeply with other group solutions, increasing transparency and enhancing customer care effectiveness. The Livecare Support platform, delivered through a SaaS model, continues to evolve to ensure reliable and scalable remote support, while OneCall 247 addresses the growing demand for global on-call services with a "Follow the Sun" approach, ensuring continuous support.

Icona Technology's exclusive focus on after-sales services allows it to deeply understand the challenges and opportunities in this sector. The group's solutions are not merely technology tools but modular, configurable platforms that reduce implementation time and cost, allowing clients to focus on growth and operational efficiency.

In a market crowded with standardized solutions, Icona stands out for its ability to quickly adapt to customer needs, offering flexible solutions that enhance operational efficiency and scalability. The group's ongoing investment in research and development ensures it remains at the forefront of innovation, delivering distinctive value to both customers and investors.

Icona Technology remains a resilient and dynamic organization, capable of not only responding to market challenges but also anticipating them. With a clear value proposition and a consistent commitment to excellence and innovation, Icona is well-positioned as a leader in the digitalization of after-sales services, ready to guide its clients toward sustainable growth and success.

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Emitter:	Icona Technology SpA Viale Brianza 20 20092 Cinisello Balsamo (MI) Italy
Contact Person:	Giorgio Nepa
Phone:	+39 02 6111981
E-Mail:	investor.relations@iconatech.com
Website:	www.iconatech.com
ISIN(s):	IT0005465528 (Share)
Stock Exchange(s):	Vienna Stock Exchange (Vienna MTF)