axélero S.p.A.

04/05/2018 | Press release | Distributed by Public on 04/05/2018 10:45

April 5, 2018 – axélero: approval of preliminary data at 31 december 2017 and guidelines of new business plan 2018-2021

PRESS RELEASE

axélero:

APPROVAL OF PRELIMINARY DATA AT 31 DECEMBER 2017 AND GUIDELINES OF

NEW BUSINESS PLAN 2018-2021

PREPARED WITH THE SUPPORT OF EY AND OF THE PROFESSIONAL FIRM

SEBASTIANO BONANNO

  • Preliminary sales revenues at 31 December 2017amounted to €28.7 million (€46.0 million at 31 December 2016). This result reflects the thorough reorganization of the sales network in the second half of 2017, which led to considerable delays in the achievement of the targets set for thenew products being launched;

  • Net Financial Positionequal to a loss of €31.2 million (loss of €19.0 million at 31 December 2016), among other things, due to investments for the purpose of strengthening the supply and increasing funding sources in support of working capital.

Milan, 5 April 2018- The Board of Directors ofaxélero S.p.A., Internet Company listed on the AIM Italia market (ticker symbol: AXEL), which met today, examined and approved the preliminary data for fiscal year 2017 concerning revenues and net financial position, in regard of which the audit firm's annual auditing activities are currently in progress for the purpose of the relevant Certification. At the same meeting, the Board approved the Guidelines of the New Business Plan for the period 2018-2021.

In this regard, please be informed that, also in light of the situation that developed in the second half of 2017, as a result of which the Company underwent a thorough reorganization and review of business processes, the Company decided to entrust two separate assignments to EY and to the Professional Firm Sebastiano Bonanno for the purpose of providing assistance to the Company in the drafting of the New Business Plan 2018-2021.

Leonardo Cucchiarini, Chairman and CEO of axélero,observed:

"The year 2017 was characterized by a complicated second half, which was affected by the thorough reorganization of our sales network, impacted by the unexpected exit of various top executives, all of whom working in the commercial, marketing and operations areas, which led to a substantial delay in the results of the new products being launched. Therefore, we faced a thorough reorganization and review of business processes necessary to develop the Guidelines underpinning the New Business Plan,which aims to achieve positive EBITDA and cash levels in 2018. The Guidelines for the New Business Plan focus on a further drive towards the development of our leading products,mysuiteandRistoranti.it,together with measures to improve the efficiency of the cost structure of the sales network, the effects of which will already be seen in the second half of this financial year. The Guidelines of the New Business Plan provide for an increase in revenues, thanks to our product range, with the aim of a gradual return to positive operating margins and a reduction in the net financial position. The development of sales operations in the Italian market - integrated with the use of operational and financial instruments - will allow axélero to change its self-financing business model, with a resulting reduction in working capital".

GUIDELINES OF THE NEW BUSINESS PLAN 2018-2021

Today, the Board of Directors approved the Guidelines of the New Business Plan 2018-2021, drawn up with the support of a team of professionals from EY and from the Professional Firm Sebastiano Bonanno.

The Guidelines of the New Business Plan include the following main objectives:

  • Evolution of the Company's "value proposition" from "pure website developer" to consulting company supporting its customers' entire CRM cycle through the integration of web solutions with targeted consultancy activities and the increase in cross-selling and up-selling opportunities;

  • Growth of Customer Base by focusing on SME segments not yet (or only partially) evolved in digital terms through the expansion of the Company's agents' network, greater telemarketing efficiency and optimization of the inbound flow;

  • Evolution of the sales structure by focusing on sole agents, review of the commission structure and new incentive models;

  • Streamlining of the organizational structure through a staff reorganization process and simplification of operating processes;

  • Use of financial instruments and credit assignment agreements on a non-recourse basis.

In light of the above Guidelines, the New Business Plan 2018-2021 aims to achieve:

  • A growth in revenues of 29.8% from 2018 to 2021;

  • An EBITDA margin of 18% at 2021, thanks to the expected growth in sales volumes, improved primary margin and greater efficiency of fixed overhead costs;

  • An NFP / EBITDA leverage ratio lower than 3 by 2021, thanks to operations aimed at optimizing working capital.

SIGNIFICANT EVENTS AT 31 DECEMBER 2017

  • On 29 December 2017, the extraordinary General Meeting of Shareholders approved the issue of a convertible bond loan cum-warrant, pursuant to Article 2420-bis, paragraph 1, of the Italian Civil Code, reserved for Atlas Special Opportunities LLC or any of its affiliates, with the exclusion of option rights pursuant to Article 2441, paragraph 5, of the Italian Civil Code, for a total maximum amount of up to €16,000,000 divided into eight tranches, which axélero may use in the next 36 months (as announced by the Company on 29 December 2017).

SIGNIFICANT EVENTS AFTER 31 DECEMBER 2017

  • On 15 March 2018, the ordinary and extraordinary General Meeting of Shareholders approved the investment agreement with GEM Global Yield Fund Limited LCS SCS and GEM Investments America LLC, signed on the same date, with a 3-year duration, which will require GEM to subscribe for a reserved capital increase, in several tranches and only as a result of specific subscription requests formulated by axélero, with the exclusion of option rights, using the Share Subscription Facility mode, for a maximum amount of €15,000,000. Under the agreement, axélero will also issue 1,800,000 warrants, exercisable within 3 years from issuance and assigned to GEM free of charge (as announced by the Company on 15 March 2018).

***

axélero S.p.A.,a company established in 2008 and listed on the AIM Italia market since December 2014, is a leading provider of digital marketing solutions for SMEs. The Company's mission is in fact to accelerate the business of small and medium enterprises by providing them with access to digital solutions and services such as those used by big companies in order to unleash their competitive potential.Customersthat choose axélero gain visibility, useful contacts and concrete results for their business. Market-maker approach,innovation and local roots are the characteristics of the Company, which operates through four business units:Smart & Business,offering digital solutions for SMEs and SOHOs with a network ofdigital consultantsdistributed across the country;Executive,specializing in custom projects for large companies and the Public Administration;Next,focused on developing artificial intelligence-based products that have won the Innovation Award of SMAU and Best Use of Artificial Intelligence in Customer Service;Lab,a corporate venture capital vehicle accelerating start-ups that develop products and services with high potential for SMEs.

Ticker symbol: AXEL, ISIN Code: IT0005069809http://www.axelero.it/

axélero contacts

Image Building

Maria Grazia Andali

Simona Raffaelli, Vanessa Corallino

Chief Communication Officer

Barbara Pianese

[email protected]

[email protected]

Tel. +39 02 84259800

Tel +39 02 89011300

IR Contacts

NOMAD Contacts

Francesca Cocco

Banca Finnat Euramerica S.p.A.

[email protected]

[email protected]

[email protected]

Tel +39 06 69933219

Tel +39 02 84259800

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