Value of production increased to € 8M – Revenues from sales increased by 20% – Annual Recurring Revenue at € 5M International turnover at 87% – Approved the merger plan by incorporation of the 100% subsidiary Creactives S.p.A. – Change in financial calendar
Consolidated financial highlights – 30 June 2024 vs. 30 June 2023
VALUE OF PRODUCTION: EUR 8M COMPARED TO EUR 7,0M +15%
REVENUE FROM SALES*: EUR 6,6M COMPARED TO EUR 5,5M +20%: OF WHICH:
– DIRECT REVENUES INCLUDING WIP: EUR 5,6M COMPARED TO EUR 4,8M
– INDIRECT REVENUES INCLUDING WIP: EUR 1,0M COMPARED TO EUR 680K
“ANNUAL RECURRING REVENUE” (ARR)**: EUR 5,2M COMPARED TO EUR 4,8M
EBITDA: EUR 282K COMPARED TO EUR 390K -28%
LOSS: EUR -1,1M, COMPARED TO EUR -1,1M
NET FINANCIAL POSITION (NFP): NET DEBT OF EUR 1,5M COMPARED TO EUR 532K AS OF 30 JUNE 2023 (EUR 1,3M AS OF 31 DECEMBER 2023)
SHAREHOLDERS’ EQUITY: EUR 1,0M COMPARED TO EUR 2,1M
* Including Work in Progress (WIP).
** “Annual Recurring Revenue” (ARR) is the total anticipated revenue a business expects to earn from its subscription-based customers in a year, reflecting the recurring nature of subscription contracts.
Paolo Gamberoni, Chairman of the Board of Creactives Group, comments: “We are very pleased with the results we have achieved and the growth in our revenues and turnover. In the past year we have signed new partnerships with important global companies such as Accenture and Bain & Company, and we are currently engaged in numerous negotiations. We are confident that the benefits of these agreements will materialize in the near future. We continue to maintain our focus on recurring revenues and our multinational positioning, with 87% of our sales generated outside Italy. Our revenues are entirely concentrated in the artificial intelligence sector, Creactives being a specialized player in building and selling AI technologies applied to multilingual data management for procurement and supply chain.”
Verona, September 25, 2024. Creactives Group S.p.A. (“Creactives Group” or the “Company”) (ISIN IT0005408593 – ticker: CREG), an international company and Innovative SME, listed on Euronext Growth Milan – Professional Segment (“Euronext Growth Milan Pro”), that develops Artificial Intelligence technologies to address real-life business problems in the Supply Chain, examined and approved the Company’s draft annual financial statements as well as the consolidated group financial statements as of June 30, 2024. Please note that the Company closes its annual financial year in June.
Comment on consolidated results
Value of production reached approximately 8,0 million euros, marking a 15% increase over the previous year.
In FY23-24, consolidated revenues, including WIP of -2,7 thousand euros, amounted to 6,6 million euros, an increase of 20% over the previous year.
This was driven by an increase in recurring revenues, which rose to 3,9 million euros (+23%) (3,1 million euros as of June 30, 2023), while the project component remained stable at 2,7 million euros.
ARR (“Annual Recurring Revenue”) of 5,2 million euros increased by 7% from the previous year (4,8 million euros as of June 30, 2023).
In detail, direct revenues (including WIP) of 5,6 million euros (4,8 million euros as of June 30, 2023) remain predominant, while revenues from projects acquired with partners of 1,0 million euros (680 thousand euros as of June 30, 2023) are growing due to new contracts with major international companies.
The share of international turnover represents 87% for the Group as a whole.
Internal capitalizations stand at 1,2 million euros (1,2 million euros as of June 30, 2023). Also of note is a significant increase in revenues from projects with third-party products and services, in which Creactives acts as an integrator.
| Revenues from sales and services* | 30.06.2024 | % | 30.06.2023 | % | Var . % |
| (Data in Euro/000) | |||||
| Subscription Revenues (Saas/Recurrent) | 3.668 | 55,19% | 2.868 | 53,92% | 27,89% |
| Professional Services Revenues | 2.728 | 41,05% | 2.149 | 40,40% | 26,94% |
| Revenues from maintenance | 250 | 3,76% | 302 | 5,68% | -17,22% |
| Revenues from licensing | – | – | – | – | – |
| Total | 6.646 | 100,00% | 5.319 | 100,00% | 23,56% |
*Numbers refer to sales revenue excluding WIP.
EBITDA stood at 282 thousand euros (Ebitda margin of 3,5%) compared to 390 thousand euros as of June 30, 2023 (Ebitda margin of 5,6%).
Total costs increased by 17% from 6,6 million euros to 7,7 million euros, with an even distribution between personnel and other operating costs. The increase in personnel costs of 3,7 million euros (3,2 million euros as of June 30, 2023) is related to both salary increases dictated by the CCNL to meet inflation and investments in new resources (8 new hires) and skills by the company. Other costs include significant increases in hosting, cyber security, compliance and third-party costs.
Consolidated net income reported a negative 1,1 million euros, broadly in line with the previous year (1,1 million euros).
The net financial position amounted to 1,5 million euros as of June 30, 2024 (532 thousand euros as of June 30, 2023). The recorded change in net financial position compared to the previous period is due to a decrease in liquidity and a less than proportional increase in short-term financial debt. In addition, the net financial debt of 1,5 million (0,53 million as of June 30, 2023) is also strongly influenced by the turnover related to new projects, which developed more in the second half of the year, with a postponement of receipts in the following year. Specifically, the variance of 1 million NFP from the previous year is mainly attributable to negative operating income after capitalization of 893 thousand euros and financial expenses of 134 thousand euros. The change in working capital was not significant, in December the company had to deal with the payment of tax credit reversal (91 thousand euros), tax on brand revaluation (51 thousand euros). In liquidity management, greater use was made of invoice advances for customers not sold to factors. These advances produced useful liquidity to pay current costs but increased short-term debts with banks, which amounted to 893 thousand euros compared to 342 thousand euros as of June 30, 2023. On the other hand, as of June 30, 2024, the utilization of the factor is 1.049 thousand euros, while it was 884 thousand euros as of June 30, 2023.
Main results of the parent holding company Creactives Group
VALUE OF PRODUCTION: EUR 343K COMPARED TO EUR 256K +34%
EBITDA: EUR -310K COMPARED TO EUR -287K
LOSS: EUR -455K COMPARED TO EUR -436K
SHAREHOLDERS’ EQUITY: EUR 2,5M COMPARED TO EUR 2,9M
Coverage of Creactives Group’s loss
The Board of Directors decided to propose to the Shareholders’ Meeting to carry forward the loss of -455 thousand euros of Creactives Group.
Significant events that occurred during the fiscal year and thereafter and significant events that occurred between the end of the fiscal year and the publication of this press release
September 21, 2023
Creactives S.p.A., subsidiary operating company, signed a strategic agreement with Accenture (NYSE: ACN) to leverage Creactives’ AI, accelerating value generation from data.
September 29, 2023
Creactives S.p.A. obtained new international certifications through the British Standards Institute (BSI) audit, including:
- ISO 27017: Information security management in the cloud.
- ISO 27018: Secure management of personal data in public cloud.
- ISO 27001: System renewal for secure information management.
- ISO 9001: Renewal of the quality management system.
October 25, 2023
The Shareholders’ Meeting approved the financial statements for the year ended June 30, 2023, resolved to carry forward the loss for the year of 435.736 euros, and approved the application for delisting from the Vienna Stock Exchange. A new Board of Statutory Auditors was also appointed.
November 23, 2023
Creactives was included in the “ProcureTech 100” list and Spend Matters’ “50 to Watch” list as a leader in AI applied to procurement.
November 29, 2023
Creactives Group completed the delisting process from the Vienna Stock Exchange; last trading day was December 22, 2023.
May 31, 2024
Creactives S.p.A. signed a strategic agreement with Bain & Company to support clients in transforming operational processes through AI.
July 19, 2024
The Board of Directors approved the issuance of a non-convertible bond “CREG – 7% 2024-2026” up to 1 million euros.
July 31, 2024
At the first bond issue of “CREG – 7% 2024-2026”, 13 bonds totaling 325 thousand euros were subscribed and issued by four Italian investors.
Business outlook
In FY24-25, the Company’s priority is to develop go-to-market strategy together with partners to consolidate business internationally with new contracts from which the Company expects a major contribution to growth in terms of revenues and margins. The Company’s focus will expand to new use cases that, both partners and international customers, are increasingly requesting. For example, integration with the SAP world, particularly to facilitate migration to SAP4Hana, which is becoming a priority for large international groups. The Company will also continue to invest in its AI (Artificial Intelligence) technology, both on the Vanessa platform and applications, thanks in part to collaboration with a technology partner. The Company’s medium-term goal remains to grow recurring revenues so that with these it can ensure that operating costs are covered despite the uncertainties that remain at the level of the international geopolitical and financial situation.
Merger by incorporation of the wholly owned subsidiary Creactives S.p.A. into Creactives Group
The Board of Directors has approved the plan for the merger by incorporation drawn up pursuant to Articles 2501-ter and 2505 of the Italian Civil Code of the wholly owned subsidiary Creactives S.p.A. (“Merged Company”) into the parent company Creactives Group (hereinafter also “Merging Company”), (“Merger”). The same project was also approved today by the administrative body of the Merged Company.
The Merger is part of a process of rationalization of corporate structures and simplification of the Company’s business and financial relations aimed at achieving a significant reduction in management costs.
Given that the Company owns the entire share capital of the Merged Company, it has availed itself of the provisions of Article 2505 of the Italian Civil Code.
In the Merger transaction, there is no exchange ratio of the shares of the Merging Company with the shares of the Merged Company, resulting from the fact that it is automatic due to the Merged Company’s total control. For the same reasons, no method of allotment of the Merging Company’s shares should be determined, nor should any effective date of profit sharing of the shares be determined.
It should be noted that all and indistinctly the items making up the Merged Company’s Shareholders’ Equity, following the merger, will be transferred in full to the Merging Company’s Shareholders’ Equity once the value of the equity investment held by the Merging Company has been eliminated, without any changes for the latter in its share capital.
It should be noted that the Merger makes it appropriate to make some marginal changes to the corporate purpose of the Company, in order to properly reflect the evolution of the Company’s business. In the opinion of the Board of Directors, the approval by the Shareholders’ Meeting of the proposed expansion of the corporate purpose does not, however, result in a significant change in the activities exercisable by the Company pursuant to its bylaws (Article 3) (“Bylaws”) and, therefore, the shareholders of the Company who should not concur in the relevant resolution will not be entitled to exercise the right of withdrawal pursuant to Article 2437, paragraph 1, letter a), of the Italian Civil Code.
The Board of Directors has resolved to reserve the decision on the Merger to the Shareholders’ Meeting convened in extraordinary session, which will also be called upon to approve, in consideration of the Merger, the proposal to expand the Company’s corporate purpose and, in ordinary session, to supplement the compensation already awarded to the Board of Statutory Auditors and the Creactives Group’s Auditing Firm for the performance of the additional activities that, as a result of the Merger, will be reserved for them.
The Merger will result, on its completion date, in the total extinction of the Merged Company which will, therefore, be incorporated into the parent company Creactives Group.
As required by law, the Merger will be effective in civil law following the last of the registrations prescribed by Article 2504 of the Italian Civil Code. With reference to the provisions of Article 2501-ter, paragraph 1, number 6, of the Italian Civil Code, the transactions of the Merged Company will be charged to the financial statements of the Merging Company as of the first day of the current fiscal year in which the effective date occurs. The same date will be considered the effective date for tax purposes as per Article 172, paragraph 9, of Presidential Decree No. 917 of December 22, 1986.
The Merger does not entail the application of the procedure for related party transactions adopted by the Company (“Procedure”) because it is a subsidiary transaction with respect to which there are no interests qualified as significant by other related parties of the Company (see Article 3(h) of the Procedure).
The documentation relating to the Merger, required by the applicable provisions of law, is deposited today with the competent Company Register.
Change to the financial calendar
The Board of Directors, in consideration of the Merger and to enable compliance with the terms set forth in Article 2501-septies of the Italian Civil Code, also approved the following change to the financial calendar: the Shareholders’ Meeting will be held on first call for October 28, 2024 and, if necessary, on second call for October 31, 2024.
The Company’s financial calendar, as amended, is shown below:
| September 25, 2024 | Board of Directors meeting approving the draft Financial Statements and Consolidated Financial Statements as of June 30, 2024 |
| October 28, 2024 and if necessary, on second call, October 31, 2024 | Ordinary Shareholders’ Meeting approving the annual Financial Statements and presenting the Consolidated Financial Statements as of June 30, 2024 |
| March 26, 2025 | Board of Directors meeting approving the Consolidated half-year Financial Report as of December 31, 2024; voluntarily subjected to a limited audit |
The financial calendar is available on the Company’s website www.creactivesgroup.com in the “Investor Relations/ Financial Calendar” section.
Calling of ordinary and extraordinary shareholders’ meeting and deposit of documents
The Board of Directors resolved to convene the Ordinary and Extraordinary Shareholders’ Meeting on first call for October 28, 2024, and, if necessary, on second call for October 31, 2024, for:
- in ordinary part: approval of the financial statements for the year ended June 30, 2024; allocation of the result for the year; in consideration of the Merger and, therefore, of the additional activities that will be reserved for the Board of Statutory Auditors and the Auditing Firm, integration of the compensation already attributed to them;
- in the extraordinary part: presentation and approval of the plan for the merger of the wholly owned subsidiary Creactives S.p.A. into Creactives Group and consequent proposal for the expansion of the corporate purpose (Article 3 of the Bylaws); amendments to Articles 13, 14 and 19 of the Bylaws, aimed at incorporating into the Bylaws the amendments made to Art. 6 – bis of the Euronext Growth Milan Issuers’ Regulations (effective as of December 4, 2023), as well as the power to provide that participation in the Shareholders’ Meeting and the exercise of voting rights shall take place exclusively through the representative designated by the Company pursuant to Article 135 – undecies of the TUF and by means of telecommunication.
The Company will notify, in accordance with the timeframes provided for by the regulations in force, the terms and procedures for attending the Shareholders’ Meeting, which will be held in compliance with the provisions of the regulations pro tempore in force. Within the timeframe provided for by applicable regulations, the notice of the Shareholders’ Meeting will be published and the notice will be made available to the public at the Company’s registered office, as well as made available on the Company’s website www.creactivesgroup.com (Investor relations section) and in any further manner provided for by applicable laws and regulations, the financial statements for the year ended June 30, 2024 and the 2024 consolidated financial statements, the Merger plan, as well as the directors’ explanatory report to the Shareholders’ Meeting on the proposals concerning the items on the agenda.
The financial statements are attached.
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