Wiit Aktie

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Wiit First Quarter '26 Results Presentation. [Operator Instructions] 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, and thanks for joining this conference call. This morning, the Board of Directors Wiit approved the results of Q1 2026. You can follow the presentation I sent. And at the end of the presentation, there is a Q&A session when you can make questions about figures and general overview of the company.

We can start with Page #3, highlights. Revenue stable growth a little bit was EUR 41.4 million. And the most important for us is the recurring part of the revenue was EUR 34.4 million, plus 1%, and there is 90.9% of the total revenue. That means for us high visibility and predictably in terms of revenue. Thanks to the scalability of the business, the EBITDA growth more proportion of the revenue. EBITDA was EUR 17.2 million, EBITDA plus 9% compared to EUR 15.8 million previous year. EBITDA margin was 41.6% compared to 38%, plus 320 basis points in 1 year without -- in this year, we don't have an M&A effect. It's more organically.

EBIT consequence growth faster, EUR 9.4 million, 21% of the revenue compared to EUR 7.8 million and the margin was 22.7% compared to 18. 9% big incremental in terms of profitability, thanks to the economies of scale and the utilization of our assets. Net profit remained stable, EUR 4.1 million, mainly impacted from more interest expense related to the bond issued last year. Net debt adjusted is EUR 137 million compared to EUR 156 million. In the adjusted EBITDA, there is a market value of the treasury share at the end of March '26 and there is not including the IFRS16 effect for the leases.

Go to the Page 4, breakdown in terms of countries. Italy performing very, very well growth in terms of revenue EUR 15.4 million and in terms of EBITDA, mainly recurring, EUR 14.4 million recurring. And EBITDA was EUR 8.4 million, 54.2% of the revenue compared to 48.9%. EBIT in Italy, very impressive growth, EUR 4.2 million, 27% of the revenue compared to 18.8%.

Germany, we know in Germany, we have one transition year, let me say, for the effect of the churn we noticed in the market last year, but we fully compensate the churn with the new booking. The revenue remained stable. ARR was EUR 16.6 million and 94% of the revenue excluded the Gecko, the consulting company.

EBITDA stable, EUR 8.1 million, 37% of EBITDA margin, a little higher compared to last year, whatever we have -- despite we have the churn during the period. And EBIT was in line with last year, EUR 4.9 million, 2.8% EBIT margin. Switzerland, this is a good news. The turnaround is hand, and we start to see a little more in the green way the performance of the company.

Naturally, we suffer a little bit the size. But despite the size, the performance started to be more profitable. Revenue is stable. Revenue on recurring was EUR 3.4 million, in line with last year, but EBITDA was EUR 700,000, 18% EBITDA margin. I need to remember that when we bought this company was turn around with a negative EBITDA.

The first year, we achieved just a breakeven point in terms of EBITDA. And now we are entering in the second year inside Auto Group and the EBITDA has improved a lot, 80% starting from 0 from our point of view is a very, very good result. EBIT, the same recovery is 7% of the revenue. So that means that total group level, we achieved EUR 41.4 million revenue, EUR 34 million recurring revenue, 90% of the total revenue. EBITDA was EUR 17.2 million, EUR 51.6 million EBITDA margin and EUR 9.4 million EBIT, EUR 22.7 million.

In our view, the EBITDA margin will be improved again in the next following quarters, thanks to the scale and the reduction of amortizing for the less CapEx. I jump now to the breakdown. I can go directly to the EBITDA, Page #6. You can show Italy and Germany and Swiss anticipate Germany was stable in terms of EBITDA profitable, EUR 8.1 million, big improvement in Italy from EUR 7 million to EUR 8.4 million, thanks to the efficiency inside the group, consolidation and utilization of the services and the reduction of the amortizing.

Go to the EBIT margin, the Page #7. EBIT is stable in Germany, EUR 5 million, EUR 4.9 million very, very few difference in terms of EBIT, but strong, strong improvement in Italy from EUR 2.7 million to EUR 4.1 million from 18% to 27%. Our target is in the midterm target to achieve 29% of EBIT margin and Italy is just in the current way.

Now we are working in Germany to recover the EBIT margin, but we are sure in the correct way to achieve this target. CapEx, Page #8. It's knock more sense to analyze the single quarter because we did CapEx depends -- not all the quarters we have the same CapEx. In this case, we have less CapEx than compared to last year, but we spent totally EUR 7.5 million, EUR 4.2 million was cash CapEx, EUR 2.1 million maintenance -- Italian and EUR 2.1 million of growth CapEx. Correct. Okay.

In general, we estimate -- we confirm that we estimate at the end of this year to spend EUR 24 million, EUR 25 million of totally cash CapEx. We remain in line with the guidelines. Bridge on net debt, Page 9, main impact of the treasury share buyback. In the first quarter, we were aggressive in terms of buyback. We bought roughly 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 the own share, and this was our target declared last year. General cash flow was strongly, EBITDA EUR 70 million, CapEx EUR 4 million. Interest a little higher for the interest of a new bond and this is a point. Net debt, Page #10. The leverage remains strategic for Wiit.

In this chart, you can see that net leverage at the end of March was 2.3x and there is properly low if you analyze our covenants currently in our bond. We have 4x this ratio to maintain. And currently, we have paid 2.3x. So we have cash and we have more capacity in terms of leverage to finance M&A. M&A remain -- no remain come back now very, very important.

We are in 2 dossier at the same time in open due diligence. And now we are working to expand our perimeter. The main zone we are looking are naturally back zone, Germany, where we are one target -- sizable target, let me say. And we are starting to talk to open a new country with a small deal.

So currently, the company is very, very committed to find a target to buy in the next quarters. We are ready for the Q&A.

[Operator Instructions] The first question is from Giorgio Tavolini of Intermonte.

Regarding the firepower for M&A, you said in your recent interview that you have EUR 300 million firepower for M&A. So I was wondering if you have a specific timeline given that you have these 2 dossier under due diligence, so one in the dark zone and the other one in a new country.

And the second one is how should the CapEx guidance change in the event of the sale leaseback in Germany for your German non-premium 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, rise EUR 100 million, EUR 150 million from the sales and leaseback of the presenter. The project is going. We send 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 fast. I think one quarter. The 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 in U.S., but mainly in Germany. And that means more time to do the due diligence, technical overview, customer side.

And I think we need 2, 3 months to complete diligence. After that, we can decide if we go or not. At the same time, we have another small opportunity time line is always summer. I think end of summer, we can decide if you go or no is the time. In terms of CapEx for sale leaseback, IFRS15 means we put in the CapEx naturally the whole contract of the lease.

So in case of sales leaseback, for example, I assume EUR 150 million, we put in our CapEx, EUR 150 million, and we will save the same amount of cash. It's natural on the leverage of the company, but not in our balance sheet is a CapEx because we put the 10 years contract lease in our debt and like assets.

The next question is from Giovanni Selvetti of Berenberg.

I was wondering if you can give a bit more flavor on what meaningful means for the acquisition in terms of revenues? What kind of revenues should we be talking about and whether the profitability of the target company is more or less in line with that of Wiit.

And if you can possibly maybe explain in greater details how come the EBIT of Italy grew so fast in over 1 year, if there is a specific thing that -- or it is like you said the target remains 29% despite the jump in only 1 year.

Okay. I start to give you more about the M&A. The target we are analyzing is in the range of revenue of EUR 23 million, EUR 25 million in terms of revenue and EUR 12 million in terms of EBITDA is the size, okay? It's mainly data center business with infrastructure, and we have very, very -- I can disclose only naturally a lot of things, but in general, they have 2 represent in Europe.

One is naturally part of the synergy. It's in Frankfurt, and we want to, in case migrating our account with Düsseldorf. The other one is in a very, very interesting city with very, very cheap cost of energy. I can say other, okay? But this is 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 the presenter without the expansion CapEx and the EBITDA margin could easily achieve 29% from 27% to 29% in Italy.

In Germany, it's different. We started from 22% and the increase on 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 we need time. It's not one quarter effect. We need 18 months to change the mix of the revenue. But our target is to achieve the same level of EBIT in Germany, changing the mix of the revenue. In Italy, it's just in place.

The next question is from Domenico Ghilotti of Equita.

Well, first, I would like to thank you for the presentation because it's becoming richer and clear quarter after quarter, so much easier to follow your trajectory. I have a follow-up on the commercial pipeline that you were commenting. So 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?

And 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 -- let me say, the normal pipeline is in line with last year in terms of value. But on the top, we have an important amount. But what I anticipate, I need 2, 3 months to sign the first contract to understand how it is really signable or not.

It's mainly in the indirect channel because it's related to provider Broadcom, it's not direct sales. It's carrier, small providers. It's more business for the indirect channel. But it's an important amount consider that if I analyze the total pipeline, the effect is 70% more of the normal pipeline on top of our normal pipeline.

It's 3x now currently the pipeline. The effect of the churn, [ Laura, ] the normal churn, if you exclude the extraordinary churn last year was lower than last year in Germany too, the same. We have low churn in Q1, normal. We have not the full effect this year of the churn last year. The impact in Germany is EUR 3.8 million -- EUR 3.8 million full year. That means EUR 900,000 per quarter.

In 2026, you mean?

Yes, yes. But if you see the Q1, the revenue was stable. That means we compensate -- fully compensate the effect of the churn with the new booking.

Okay. And they will last until the end of the year. So we have to assume something like almost EUR 1 million per quarter.

Exactly. It's roughly EUR 1 million revenue per quarter. But we don't have -- the good news is this effect was only for 2 clients effect of 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 group level is very, very low. Consider EUR 140 million of revenue, EUR 2 million is 1.2%, very, very low churn.

Okay. Just a clarification. So the pipe -- excluding Broadcom that is a particular booster today. So you are saying that Italy, even excluding Broadcom is running similar to last year. So you have seen a resilient performance on the pipeline -- commercial pipeline.

Yes, it's correct. If you see the organic growth in Italy was 7.8% in Q1, and we expect to grow 10%, 11% yearly excluding the effect.

Yes. Okay. That will probably affect for 2027.

Yes. We have more visibility in July and we update our model when we have the first contract from Broadcom effect in July, we can update the '27. But in any case, it's not -- this is a Broadcom effect not impacted the figure '26 type of migration...

The next question is from Gabriele Berti Lee of Intesa Sanpaolo.

Just a follow-up on Broadcom from my side. I was wondering for how long do you expect the Broadcom boost should last? And 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 contracts on the Broadcom expired by June '27. That means in the next 3, 4 quarters, the partner need to decide where migrate infrastructure. The effect is in the next -- for the next 12 to 18 months. Generation in terms of booking and revenue always postponed 6 months. That means '27 to '28 mainly for a positive effect we see.

And pricing probably is one probably sure is little lower than the premium because the partner need to have a little margin. But 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.

But from an infrastructure perspective, we have a good leverage on storage, backup, software, data center. This is a very, very high economy of scale. I expect a little lower compared to our premium cloud, but also lower, 40.2%.

[Operator Instructions] Mr. Cozzi There are no more questions registered at this time.

Thank you, everybody, for the conference, for the joining and see you soon for the next presentation. Thanks. Good afternoon.

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Wiit Full Year 2025 Results Presentation. [Operator Instructions]

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, and thanks for joining the call. This morning, the Board of Directors of Wiit approves the results of full year 2025. You can follow with the presentation I sent. I will start with the highlights. At the end of the presentation, there is a possibility to make a Q&A.

So I can jump start to the Page #3, the financial highlights. Revenue growth to EUR 167 million, plus 5.9% compared to EUR 158 million of the previous year. But the most important figures is the ARR, the recurring part of our revenue was EUR 136 million compared with EUR 126 million of the 2024. 88% of the revenue now is recurring. This is very important to have high visibility in the figures for the current year and for the next following years.

EBITDA growth more proportional than the revenue for the scalable of the business was EUR 66.9 million, totally in line with our expectation and our budget compared to EUR 58 million of the 2024, a big jump. Consider that we don't have and the effect is fully organic and thanks to the synergy obtained in the last year.

Margin was 39.8% compared to 36% 2024, like-for-like 40%. We increased over 3% of EBITDA margin in the last year. EBIT, very, very good, EUR 34 million compared to EUR 29 million, plus 17%. EBIT margin was 20% compared to 18%, over 2 points more. But after you can show the Q4 effect because the EBIT is growing very fast in the last part of the year, thanks to the stabilization of the CapEx and the scalability of our [indiscernible]. I can show after in another separate slide.

Net profit was EUR 16.5%, plus 11%. We have here a strong effect of tax rate because for the last year, we have a little more tax compared to 2024. In 2024, we had specific one-time effect of the Patent Box of one company acquired, and for the current -- from the last year, we don't have this specific one-off. In a previous approach, we don't account anything about the Patent Box in Italy. Currently, we are talking with the tax office to discuss the renewal of the Patent Box. But in these fields, we don't consider nothing about tax effects.

Net debt was EUR 156 million. The leverage compared to last year and total in line with our expectation. Consider that we have the stronger effect of the treasury share because the company bought a lot of treasury share during the last quarter. And thanks to that, the net debt decreased a lot. In this slide, you can go to the slide on Page #4, the breakdown of the figures. Italy was closed with EUR 58.6 million revenue. RR was very, very high, 91%, [ 55% ] of revenue was totally recurrent. Big jump in terms of EBITDA to EUR 51.8 million, 54% of the revenue. Big jump compared to last year, thanks to the scalable of the assets and the end of the realization of the operation happened during the full year.

The same result is very, very good in terms of EBIT. Italy growth strongly to 33%, EUR 13.8 million. And very, very growing way in the last part of the year. Germany, EUR 89 million revenue, 68 total, 93% of the Business Cloud is recurrent. EBITDA stable little growth, but growth, EUR 32 million in terms of EBITDA and 19.6% in terms of EBIT. EBIT margin was 32%. Swiss show complete end of the turnaround. We complete the clean of the low-value revenue of EUR 20 million and the RR was roughly EUR 13 million, and the EBITDA was positive for EUR 2.5 million, and EBIT positive starting from a negative level in the previous year to EUR 600,000 positive EBIT at the end of the year.

Totally group level EUR 156 million RR, roughly 67 million EBITDA and EUR 34 million of EBIT margin. Update in part number 5, the concentration of the customer base is important for the company, continue monitoring how is the dependence we have of the single client. We confirm that we don't have dependence of the first client. The top 20 client value is 29% of total revenue and the top 50 is only 43%. But important, the increase of the average of the deal of the win. The top 200 client top account, the average yearly average of the contract now is over EUR 0.5 million, 521,000 average for client. And the top 10 is increasing from EUR 200 million to 3.3 million yearly revenue. That means we are selling more premium services in a more large customer base. That means then more residence of the business and a very, very high barrier at the exit. More bigger is the deal, more low is the risk to the migration when the contract is to maturity. So we are in a way in terms of sales. High visibility of the business, the slide on Page #6, backlog is increasing from EUR 247 million to EUR 260 million. Naturally depend a lot the single year when you have the renew of the contract. Not all the years are the same in terms of expire maturity of the contract.

[indiscernible] is growing. Starting from this quarter, we would like to show to disclose not only the full year result, but a single quarter effect to understand how is the business going in a single quarter. But totally, what we anticipate Italy growth grew organically 7.8%. Germany is more stable because I just anticipate we have part of the effect of the one big churn we had during the summer, the effect revenue is partially in 2025 and mainly in 2026. It's one client, it's not a churn related to risk or competition is M&A, one bank in Germany bought other banks and start to migrate the data center in their own facilities. It's an M&A effect. Is extraordinary and the churn effect is mainly in 2026.

Chart Page 8, EBITDA growth in Italy very, very strongly from EUR 27.7 million to EUR 32 million, EUR 31.8 million. And in Germany, whatever we have -- despite we have partially effect of churn, we grew a lot from EUR 29.2 million to EUR 32.6 million. And if you see Q4, in Q4, Italy is growing EUR 1.2 million more in terms of EBITDA and Germany is stable because the activation of the new contract signed during the year fully compensate the effect of the churn in terms of revenue and cost.

EBIT, Page #9. This effect is more important in terms of EBIT margin because we will see later, we have a fantastic effect in terms of CapEx. Cash CapEx are reducing compared to last year. And this effect, we will see naturally in the EBIT margin. In Italy, we grew from EUR 2.6 million quarterly to EUR 4 million and in Germany is a little stable. That means Italy, the EBIT growth from EUR 11.5 million to EUR 13.8 million in Germany from EUR 18 million to EUR 19.6 million. The effect of this CapEx reduction we see more strongly during the 2026 because we expect to have less amortizing for roughly EUR 1.5 million for the current year 2026.

It's partially inside 2025, the main advantage we have -- the main benefit we have inside our balance sheet 2026. CapEx, what I anticipate, Page #10. In this chart, we have the breakdown because a lot of investors ask us how is the breakdown of our CapEx, we decided to give more color about the CapEx. You can see here the cash CapEx coming from EUR 26.7 million to EUR 24 million because the utilization rate of our data center is very, very low. In Italy, we have 51% of occupation rate in Germany for the premium part, 53%. Other part, IFRS is EUR 7.6 million is the effect of the sign of the lease contract for the space of the offices. The IFRS depends the single year expire the single contract, we need to renew, and we have the CapEx effect, but it's not cash. The cash CapEx was only EUR 24 million. EUR 13 million are maintenance and EUR 10.7 million was growth CapEx. EUR 13.3 million maintenance CapEx means all the CapEx we did to maintain, update all the customer base, all the active contract. If you don't have organic growth, we spend only EUR 13 million to maintain updated technology.

Going down the slide, I go now on Page #11, the bridge on net debt starting from EUR 212 million end of '24, we closed gross with EUR 224.8 million, mainly driven, you can see here by buybacks for roughly EUR 60 million. If you don't consider the buyback, we closed with EUR 208 million net debt. But we decided to buy strongly our share because the price was very, very competitive. And at the end was probably a good decision. And in any case, we can use this treasury share to finance part of M&A. But in general, you can see here, EBITDA EUR 66, CapEx EUR 34 million, income and tax EUR 5 million, interest paid EUR 9.8 million includes partially the new bond issued in October '25. Organization means the cost to have cost reduction in Italy and Germany during the first and second quarter. The new bond cost, amortizing cost of the new bond, EUR 200 million, M&A and mainly dividend and the buyback. If you deduct the debt IFRS 16 for the rent of the offices for EUR 12 million and the value of the share at the end of December for EUR 56 million, the net debt was EUR 156 million. The leverage was very, very strong.

As you can see in the next chart on Page 12. Here, we want to show how was the figures of the company in the last 5 years, naturally includes a lot of cash out for acquisition because we spent EUR 180...

EUR 160 million in Germany.

EUR 160 million in Germany to MA&A and roughly EUR 40 million in Italy. Whatever we have EUR 200 million cash out to finance M&A, we deleverage a lot the company from -- if you consider the gross debt from 5.2 to 3.4. If you consider the value of the treasury share from 4.2 to currently 2.6. We consider below 3x a very, very safe trigger to stay. We want to maintain our company in this range below 3x, and we are just in line with our target. The fifth, I think, the Board of Directors this morning approved an additional issue about cancellation of the treasury share. We consider that currently, the company own 12.5% of the share capital. The current market value is roughly EUR 95 million, and we decided to cancel 6% of treasury share. We propose naturally to give the opportunity of our shareholder assembly to cancel 6% share in our next meeting in end of April when we approve the figures. And obviously, we show last year a lot of transaction about sales of the asset. We have in Germany a full set of data center, 17 data center. And we start evaluation with adviser to analyze the possibility to sell part of our data center, not the premium part, the traditional data center to raise cash to finance M&A. M&A is currently a priority for Wiit, consider that after the decision of Broadcom to cancel a large part of the provider in Europe, we received a weekly opportunity to analyze to do an M&A in Germany, France and Italy too. And what do you think in the next 2, 3 quarters, we will start materially to do M&A. So analyze to sell part of the asset with the sales process to raise money on top of the cash we have on hand from the bond and part of the share to finance an external growth of the group.

That's it. We are ready for the Q&A.

[Operator Instructions] First question is from Giorgio Tavolini, Intermonte.

The first one is on the sale leaseback opportunity of your German data center. I was wondering if you have any idea of potential cash in and in terms of, let's say, impact on your leverage -- adjusted leverage, including the lower IFRS in that sense or higher IFRS, sorry. The second question is on your recent admission to the Broadcom Advantage program you were mentioning. We should expect an acceleration of the M&A activity, as you were mentioning, but also, I guess, some commercial traction from 2027 onwards. So I was wondering if you expect an additional growth of the top line from this event? And the third one is on the price increase. I saw OVH that raised the pricing on their offers given the rising cost for electronic equipment. So I was wondering if you are wondering -- if you are planning to replicate a similar price increase?

Okay. I'll start to answer the first question about the transaction data center, depends on the perimeter. We assume that it's roughly 7 megawatt perimeter to data center to the sale leaseback. Depend -- the levels depend if you consider the debt IFRS for the rent or not, naturally, because naturally, we want to have for 10 years the right to use all the asset sale. That means we put in our debt naturally all the contract of 10 years, the contract of the leasing. But it's sure over EUR 100 million of cash. You consider the transaction in the last year, the multiply was from 18 to 22x EBITDA subject of the carve-out. This is for this reason, it's material for it. That means the debt, if you don't consider the debt, the rest is, of course, go to zero with the carve-out. If you consider naturally the debt of current is different. You have cash on the hand, you have debt to pay in 10 years. But the cash you can use immediately and the debt in the other end, you are paying in 10 years, okay?

About the power, consider that we have currently EUR 50 million cash of the excess of the bond we raised in October. We have additional EUR 40 million of treasury share considering canceled half of the treasury share, additional EUR 40 million of finance. So we have currently EUR 140 million current view plus the cash arriving from the carve-out. That means we don't need capital increase to finance M&A. This is the message. EUR 140 million plus the carve-out that means EUR 240 million for power. Okay. Second question about Broadcom M&A. Naturally, Broadcom generate the consolidation in Europe. Naturally, it's not a short-term feedback on the market. But at the end, the other partner with Broadcom have a maturity expire the contract with -- by the end -- by June of 2027. That means by end of this year, need to take a decision which partner they want to join in the next 3 years to guarantee the continuity of the relation of the client because otherwise, they will decide to leave this business, for sell the data center M&A or find a new partnership with one of the residual certified partner.

And it is difficult to migrate.

It is very difficult to migrate. In terms of Organic growth, we have just now an increase in the pipeline for the next year because Broadcom comes not only the provider partner, but the white label program that means a lot of software house, now it's not more enable to sell product inside the services. They need to find another partner. So we have an increasing pipeline for the big software house. And otherwise, we have opportunity to find a new partner for our indirect channel. Enrico, do you want to add more color about the...

Yes. So...

It is mainly related to indirect channel.

Yes. As already introduced by Giorgio, there is a commercial traction related to this effect. For sure, into the indirect channel, several players are looking not only to the Broadcom topics, is a kind of acceleration on the -- looking for a new strategy. So the part of having the benefit on having a new partner is not belonging only to the Broadcom effect, but also to the fact that, for example, all the cloud-native platform that we deployed over the last 3 years is a potential new acceleration for other players. So we already have seen an incremental pipeline coming from this relevant because we are talking about a relevant amount of core technology that accounts for several millions. So we are very happy for that, doesn't mean that we already signed all the contracts. So it's a little bit early.

Forecast I think end of June, we have more clear July about the 2027 figure because consider that this brought on policy impact our balance sheet in 2027, not 6 because we have the time with the migration contract. We have more visibility in the middle of the summer to understand how the real impact of 2027.

And of course, this means that under this -- we have the umbrella to operate in all the countries that we are operating currently. That means Switzerland, Italy and Germany and also the new country potentially because M&A is not finished. This is important. The fact in all the countries has been very, very huge. Italy, we -- the result is we remain only 4 Italian provider to operate in Germany and in Switzerland, 4 or 5. So quite relevant impact. We will see the effect in the following months, but we had an increasing weekly amount of meetings with C levels of partners and clients as well.

The first question about price increase, we naturally is most exposed on the technology layer. We not so much, but we naturally update our price list with a new cost of service stage. But for what it is not so material because all the infrastructure part is 25% of the value of our contract. Naturally, we increased the price, but all the providers are increasing price. This is not an issue on the table because for all the providers, we have more cost for memory and more cost of servers and probably we have in the storage in warehouse more servers have a big advantage for the single quarter. But if you see full year effect is not material.

Next question is from Domenico Ghilotti, Equita.

Well, first question is a follow-up on the sale and leaseback. So I want to better understand the rationale why, for example, you are considering Germany, but not Italy, and why are you referring to the less premium part of the data center? And if you can explain if there is any negative from, say, from the managerial point of view of having leased back the asset, and if you have, let's say, the option to regain the control at the end of the leaseback.

The first part question is why not only the data center because we want to maintain internally the full premium data center. In Italy, we have only premium data center and the new one in Germany. The occupation rate I told you before was related to the premium part. The other part are full utilizate data center with all the small part of colocation, the old business we had in the first company acquired in Germany is only to understand EUR 12 million revenue in terms of colocation.

30?

EUR 12 million. In Germany, 70 is 20% of the total revenue in Germany. But we don't want to transfer the customer base. We want to maintain all the contract with the client only to transfer the asset and sale and leaseback. We guarantee a lease for 10 years. We want to guarantee for 10 years the fees for leasing and the free cash flow naturally, and we want to maintain the customer base. But for the more traditional business, colocation, infrastructure without managed services because just now, all the premium part has migrated in our premium center. All the premium part, the value part is hosted by our premium center in Germany. Under 7 megawatt is roughly 8% not with a premium service in site, Colocation, more [indiscernible] business, not exactly in our core now. Energy impact, we don't have an impact because we have fixed rate in Italy for 7 years and Germany for 3 years. We fixed the price for [indiscernible] for 7 years in Italy and for 3 years in Germany. So we don't have impact of fluctuation of the energy price.

I haven't asked yet, but actually it was my next question. So on the energy, we have already answered. And last, you were mentioning the churn affecting more 2026 than 2025. But if I look at Q4, should I assume that Q4 has already, let's say, seen the full effect of the churn in Germany, or it's not yet a run rate, a stable run rate?

We are in the middle of the river. It's partially inside, yes, but the full effect we have in the 2020. It's one client, mainly one client. The value of contract is roughly EUR 5 million. We have EUR 2 million effect economically in '25 and EUR 3 million in '26. Partially in Q4 is done, but it's no full effect. We have a residual part. The good news is the gross booking in Germany was higher than '24, and we have a full compensation in terms of revenue. For this reason, the budget '26, we expect lower single-digit growth in Germany, whatever we have this big churn because the gross booking fully compensate the churn. Naturally, we have...

Single digit is on ARR including the churn?

In Italy, we expect to grow high single digit and good churn in Germany. But in Italy, we expect to grow faster because in Italy, we don't have this. But the sales in Germany are accelerating. This is very important. And accelerating in the current way, let me say, we are accelerating in terms of gross sales with more high-value contract compared to last year. Last year, we closed roughly 25% of the booking high value. The target of our sales group in Germany this year is to sign 50% of the gross booking on premium sales. And the MBO and all the budget and the bonus for the current year is related -- is targeting on the premium part.

There are accelerators specifically designed last year first, and that's been the signal and this year is also accelerating.

Next question is from Giovanni Salvetti, Berenberg.

Can you hear me?

Yes, yes, yes.

Okay. Well, I mean, I think part of the question has been answered before. Just to have maybe the confirmation of that. If I look at the end of the first half results, you said that the utilization rate was around 40% in Italy and 70% in Germany. Should I assume that this 70% was like the overall utilization, including all data centers, or is it just the premium one? How should we think about this?

No, it's only related to Premium Cloud. We changed the communication because it's very important to be aligned with the market. In this chart, when we declare 51% Italy is the premium part. The other part is 85% is probably part of the perimeter we are evaluating to the carve-out, the premium part.

Next question is from Michele Mombelli, TPICAP Paris.

I just wanted to ask you something as a follow-up on the question of my colleagues that already asked very brilliant question. So maybe it's a little bit more general on the industry. I'm curious to know how you're dealing, what do you think about the sovereign cloud solution coming from the hyperscalers because it's something I've been reading a lot. And I know there is the Cloud Act playing in it. But I would like to know if it's a real substitute of your offering because basically starting from the last year after the Trump tariffs, your -- the equity story around Wiit has been reached with the narrative of the data sovereign cloud. So I would like to know what do you think about that and if that could have any kind of legal barriers and compared to the European solution that you offer?

I will answer on behalf of Alessandro. So it's a very relevant topic. I'm facing really a boost in the last 2, 3 months in all the regions, not only in Italy on this data sovereignty. One of this effect that was totally unexpected that we are opening discussion with Italian banks.

This is a new industry for us.

Yes, it's absolutely new in Italy because we have, of course, in Switzerland, minor in Germany, but absolutely new in Italy. So it's becoming a rising concern. In Germany, it's already a concern. In Italy, it's becoming this rise, not only for the data sovereignty itself. It is only so belonging to the fact that the clients in general are starting moving heavily on digital transformation also using AI. And this topic is totally absolutely linked to the intellectual property of the data, not only where digital hosted who is maintaining, but the fact that into this data, there are the foundation of the Agentic AI and AI itself. So they are all linked together. And this is more or less the blueprint of every single discussion I'm having with the client. I closed one call with a CEO a few minutes ago talking as are we around this topic on an Italian corporate and industrial corporate spread across the globe and the discussion we are opening signing a new contract with this client. And the discussion is we have to open other tasks that are AI related. We want the total data sovereignty because it is a mandatory topic for us to operate. So absolutely, it's becoming a rising topic. There will be also another effect in the next months belonging to the fact that one in particular analyst is starting mapping as one of the player into the sovereignty cloud. This is becoming another interesting effect that also they are all linked. AI sovereignty Broadcom cloud native because all the clients are start looking for alternatives to the hyperscaler. So renting means also getting out of on-premise stuff like that, but also rebalancing the power of the hyperscaler that means having alternatives on the cloud-native platforms that unless the last 2 years, they were not really a present store in Europe.

Just because I saw some kind of major telecommunication player from Italy, I wouldn't talk about Telecom Italia, for example, that closed a partnership with Microsoft, and they were mentioning a lot of cloud sovereignty. I think maybe I don't know if they could steal some kind of market share from the narrative of Wiit of being indeed a European player for European companies. I was just -- of course, this is a big topic for you, a good selling point for your architecture. But I would like just to know a little bit better if and how American hyperscaler have been encountering some kind of maybe major forces from European legislator in order not to operate and not to steal that kind of market share that otherwise we would have been involved in. I don't know if you have any kind of comments on this side. It's more on the American side rather than your selling point. And that's the last question.

Yes. So in general, what we are seeing, and we're meeting also some other telco providers, several of them did an agreement with Microsoft or Google or whoever. The real result in terms of, let me say, sales has been very, very poor. The other game is, from my point of view, it doesn't make any sense to have a super big announcement with Microsoft or other players. The topic is the clients are already into the hyperscaler. They're looking for other options.

Hybrid?

Yes, for a more hybrid -- they are more concerned on finding players with the capability to host large infrastructure and relevant footprint in terms of micro services. From my point of view, out of the telecom Microsoft, the topic is you need to have a reliable and real-world references cloud-native platform. There's no reason to move into the hyperscaler to find a solution to the service that you don't have in your footprint. At least for Wiit is a priority to have a full set of services in every single direction. That means AI platform, cybersecurity, cloud native, Broadcom, non-Broadcom, so to give a real chance to the clients to move outside and to rebalance their existing super power of the hyperscaler. Hyperscaler are currently more than 70% of the European market. That means that there's no reason to empower that part as well. Clients are looking for options for different options, not for enlarging this kind of power.

Next question is from Marco Vitale, Mediobanca.

Just a follow-up on the Q4 performance. From my estimate, the profitability in the, say, the German market was a little bit softer compared to the performance recorded in the prior quarter in Q3. While this was in part offset by very strong and ongoing profitability for your domestic market that should have reached around 55% in Q4. I was wondering if you could add a few comments on that and whether you see the current profitability level in Italy is sustainable also going forward?

Yes. I think profitability in Italy is really sustainable. And at the end, we expect to increase the EBITDA margin for the current year because the effect of the reduction of the CapEx will be more visible in the next 2 years. I expect to have less amortizing from EUR 1.5 million yearly and more 2027. In Germany is a stable Q4, consider that single quarter is not single quarter, but we have effect of one credit notes issued at the end of this year because one client have discount of the network traffic. And for this reason, Q4 in Germany is stable, stable, but it's only effect of one account effect of discount account only in Q4 and not in the full year. In general, what we anticipate, Germany compensate fully the churn and the effect -- the net booking was positive. That means we expect slower growth in Germany for the 2026 and more consistency growth in Italy. The pipeline now in Italy is recovering -- is fully recovered because consider that last year, we also higher value pipeline. Now, in fact, plus what Enrico anticipate in terms of data sovereignty and new clients are probably coming in the next quarters. That means it's very, very sustainable. We need more EBIT because the capacity we have, we can double our revenue without expansion CapEx. We need only to invest in servers, storage and software on the deal -- the single deal, and we have capacity.

Next question is from Giorgio Tavolini, Intermonte.

Just a follow-up on your 2026 expectation. So excluding the German sale leaseback, I mean, on the current perimeter, consensus expectation are south of EUR 180 million. Should we expect EUR 3 million less related to the German remaining the impact on the churn? And then the adjusted EBITDA is around 40% margin. And I see cash CapEx in the region of EUR 25 million. But now I don't know if it's better to assume something lower or flattish compared to 2025, so EUR 24 million or even less.

Currently, we confirm the market expectation about EUR 182 million and EUR 73 million EBIT. We don't have now the visibility to understand the CapEx. We need to do for the Broadcom consolidation. If you don't consider the Broadcom consolidation, EUR 34 million cash CapEx is totally in line with our budget. But naturally, if you have an opportunity to consolidate with more partnership, probably we increase a little bit the CapEx because we have more revenue next year. But based on the current business plan, EUR 34 million cash CapEx is in line and EUR 73 million EBITDA is the consensus is from our point of view is achievable, starting from EUR 67 million of the last year, consider that we have the full effect of the contract activated in the last quarter plus the organic growth. It's conservative, but achievable.

Next question is from Domenico Ghilotti, Equita.

A follow-up, still a very small market, but I was interested in having your comments on Switzerland.

Switzerland is a huge opportunity because it's small in terms of number of people live there, but it's also small in terms of size of the cloud market. It's roughly similar to Spain. It's a big market because there is very, very restricted, very, very regulated. The problem we have in Switzerland now, we need to increase the size of the company. We need to achieve EUR 30 million of ARR. And for this reason, M&A could be probably the main option we have on the table to accelerate our growth. Organically, we are growing. Last year, we closed EUR 1 million gross sales. We expect to do this year EUR 2 million, but it's too slow. EUR 2 million yearly, we need 10 years to achieve the current size. With the M&A, we want to accelerate.

We have fortunately target because in Switzerland, Broadcom the same effect. We remain five companies in Switzerland and a lot of small providers are out of the program and need to find a solution. So we are discussing not only Germany, France, Italy and Switzerland, we have a current discussion. And M&A probably is the best option we have to accelerate our growth. We need EUR 30 million of ARR to be consistent in the market.

And also for the sovereignty point of view, in the last 3 months, because considering in 2025, Switzerland, there has been a rising topic on having hyperscaler with resident data there. And so it seems that also for the banking, the collaboration tools, for example, could have been shifted to the hyperscaler. In the last 3 months, there has been a really high level of critics coming from different players. And the Swiss government changed the direction and then there has been a very hard slowdown into the potential shift to the hyperscaler. That brings back again into the sovereignty topic for Switzerland as a major concern.

Okay. In terms of, let's say, ability to upsell and also consolidation of your customer base, should we assume that now your customer base is -- so we should not expect churn, but just maybe a cleanup of the noncore non-RR revenues?

Correct, correct, correct. We have additional EUR 6 million, EUR 7 million of noncore hardware sales and project that we will clean up this part of revenue. We want to grow from EUR 12 million is our RR to, I hope, EUR 20 million shortly, and the target will be EUR 30 million in the midterm. The cost of the salary is very, very high. Considering in Swiss we have [ EUR ] 8 million cost of salary with [ EUR ] 12 million revenue. It's double compared to the German. So we need to have more size. We have capacity because the company acquired was around with EUR 20 million revenue when -- before the acquisition. They have a lot of churn. Now the situation is very, very stable. The clients are still on board. We don't have a churn in the last 6 months. It will start to grow, but the company need EUR 8 million or EUR 9 million more revenue to return back profitable, seriously profitable. Now it's 12% is very low for our point of view. 30% to 35% is the target.

Next question is from Giovanni Selvetti, Berenberg.

A follow-up on my side, too. The first one is more like, did you say strategic, and I was wondering if you were considering also selling Gecko to finance future M&A. And in terms of maybe multiples that you would pay, if these providers that are excluded from the Broadcom program are in a way for seller, what kind of multiples should we think in terms of M&A?

Gecko is not on the table. It's a profitable company, running 23% EBIT margin and with good customer base, and we share something client in the cloud business. So it's not on the table to sell Gecko, it's profitable. And in any case, the current market price, the consulting company is trading at 5, 6x EBITDA is not the timing. It's not on the table. In any case price. About M&A, it's correct, you mentioned that multiply are decreasing. We are now starting to discuss multiply from 6x to 8x EBITDA before synergy. The trend, I think, is decreasing in the following quarters because when you arrive close to the end of the contract, you are forced to sell the company. Currently, the request arrive now is 6x, 8x, the bigger one, but compared last year when the request was 10x, 12x. Now the point is from 5 to 8. What I suppose is in the next quarters could be option to additional decreasing for the request for the seller. 5x, 6x before synergy is a good deal because consider we have a lot of synergy in terms of percent, operation.

Yes. But my point was more about if you're forced to sell in a way, it's maybe too brutal to say that, but you can squeeze as much as you want, right, in terms of the multiples you pay. Anyway, it's very clear.

It depends, every single target is a different story, because I told you with bigger part with [ EUR 1 billion revenue, ] this part is very residual. Other are only this business, every single target -- day by day. There is not one single story. Depends.

[Operator Instructions] Mr. Cozzi, there are no more questions registered at this time.

Okay. Well, thanks all for joining the conference, and see you soon in the next conference for the Q1 results in April. Okay. Thank you. Bye.

Good afternoon. This is a Chorus Call conference operator. Welcome, and thank you for joining the Wiit S.p.A. 9 Months 2025 Results Presentation. [Operator Instructions] At this time, I would like to turn the conference over to Alessandro Cozzi, CEO of Wiit. Please go ahead, sir.

Good afternoon, everybody, and thanks for joining the call. This morning, the Board of Directors of Wiit approved the results for the first 9 months. We have a presentation to send. With me, there is Stefano Pasotto, our CFO. After the presentation, there is a possibility to make questions in the Q&A session.

I will start with the highlights of the presentation, the Page #3. The company reported revenue plus 9% compared with last year, EUR 125 million revenue. But the most important is recurring revenue growth 11.6%, EUR 102 million compared to EUR 91.7 million previous year.

EBITDA in consequence growth more faster, 19.5% to EUR 50.9 million compared EUR 42.6 million in the first 9 months 2024. EBITDA margin adjusted was 40.5%, but the like-for-like margin without the contribution of the acquisition -- of acquiring company was 43.2%.

EBIT adjusted growth 17.1%, EUR 26.4 million compared to EUR 22.5 million in the first 9, 2024. EBIT margin was 21%, very, very good. Like-for-like, 21.8%.

Net profit in consequence, growth 15.9%, EUR 14.1 million compared to EUR 12.2 million.

Net debt, we closed with EUR 163.9 million adjusted. In our adjustment, we're excluding the IFRS 16 effect of lease and including the market value of the treasury share at the end of September. Last year, we closed with the same value, EUR 163 million.

We can jump to the Slide #4. We have the breakdown of the results. Naturally, Germany remained the main market for the Wiit group. Italy is performing well. It's 34% of group revenue. Germany continued to stay over the half of the group level, 53% and Switzerland is stable 12%.

If you assume the -- if you analyze EBITDA margin, we are very happy for Italian results. We continue to perform well, 54% and 55% of the group EBITDA level. German remains solid, 37.7% of EBITDA margin. And Switzerland, I need to consider that -- I need to remember that the acquisition of Switzerland was a turnaround situation that we are happy for the results because after 1 year, we just achieved a positive EBITDA margin and most important, positive EBIT margin for the Switzerland company.

EBIT level, Italy performed very, very well, 22%; German, 24%. In these figures, we had to consider the positive effect of the not pay off -- no payment of the earnout accounted in the Q2. And Switzerland arrived to achieve a turnaround of EBITDA margin 3%.

Okay, go -- directly we can go to the Page 5. Revenue, particularly important to consider to analyze the recurring revenue is EUR 102 million. It's plus 11% compared to last year. Organic was 4.9%, but was 10% excluding a churn.

Italy was EUR 40 million recurring and is 91% of the total revenue compared 83% last year. Organic growth was 7.5%, 12.8% excluding the churn.

Germany, 51.6%, 94% of the total revenue ex Gecko, naturally registering a growth of 9.1% and the organic was 2.7% compared to last year, 9% excluding a churn. In the German figures, we just had the first impact of this extraordinary churn that we said during the conference of the Q2. And for this year is very, very good result because in terms of sales in Germany, we record highest value of booking compared to last year. Consider that the gross book in Germany at the end of the September is 30% higher than the whole year 2024. The Germany is very accelerating in terms of gross sales.

Switzerland is stable, is in the 64% of the total revenue, we don't have growth in terms of revenue.

We can go directly to analyze the profitability, with the chart, Page #6, EBITDA, EUR 50.9 million with a margin of 40%, 43% like-for-like compared 37%, 9 months and 36% before. So very, very acceleration in terms of profitability. It’s driven, thanks for the synergy. We obtained synergy in terms of cost in Germany and Italy, and increasing high-value services sold in Germany and continue performance well in premium services in Italy. The breakdown of this EBITDA is from what is impressive because Italy performed at 54% compared to 46% increasing 800 bps compared to last year. Germany, the same, 37% EBITDA margin compared to 35%.

But like-for-like, excluding the consultant company was 42.9% compared to 37.3%. That means 560 bps higher than the previous year. Thanks to cost synergy and focusing -- to focus the company on the high-value added services. In Germany, it's another important part that we record a record of gross sales, but it is the quality of the sales. We are turning from more traditional cloud services to high-value services. And this is in terms of the quality of the earnings is the consequence of this change of the sales.

Page 7, EBIT that is growth 17%, EUR 26 million. In this case, we have a very good effect, particularly in Italy, when we growth from 20% to 22.6%, mainly for the increasing of the occupation rate of our data center. I want to remember that in Italy, the occupation rate is roughly 40%. In general, we are roughly 80%. That means the increase in revenue in Italy, we don't need to do CapEx to expansion of data center. In the next 2 years, what we forecast is a strong increase of EBIT margin for the increase of the occupation rate of our assets. In Germany, 24% is just a very high level, and compared to 23% last year. Net profit in consequence, we go up to EUR 14 million and this level we are totally in line with the market expectation for the next -- for the last -- for the end of this year.

Net debt, Page 8. The gross debt was EUR 218 million. But in this value, we now consider EUR 39.8 million of market value of treasury share and IFRS 16 effect for lease of the office in data center for EUR 40 million. Operating cash flow was very strong. Cash generated was EUR 31 million. After we have EUR 2 million of purchase of treasury share, CapEx was 25 million. This is what is important. I want to make more color about that. The cash CapEx are going down compared to last year because at end of September was EUR 17 million the cash CapEx, and we forecast to close the whole year below -- in the area of EUR 24 million, EUR 25 million below the value of last year. EUR 8.2 million is related to the rental fees, colocation and vehicles cars. Dividend paid in May, EUR 7.8 million, secured deposits for the new building, new headquarter we opened in April in Milan, EUR 1 million and EUR 1.1 million was a one-time and one-shot for the reorganization of the people mainly in Germany.

Okay. That's it. We are ready to do a Q&A session.

[Operator Instructions] The first question is from Giorgio Tavolini of Intermonte.

So the first one is on the impact on financing costs from the recent bond issuance. If you can provide more color on next year financial expenses. The second one is on the German market. If I remember correctly, next year, there should be EUR 4 million to EUR 6 million CapEx for the new data center with AI -- powered with AI. So I was wondering if the depreciation and amortization in the German market are expected to rise on top of that?

And the second -- the third question is on the Italian performance. I saw there is a difference between organic growth, excluding the churn and organic growth. So I was wondering if you are experiencing some churn as in Germany, what is behind this churn?

Okay. I start to answer about the first question about the interest we pay for the new bond. Consider that naturally the coupon of the new bond is increased compared to the last one, but we have a positive impact of carry because we know that we don't anticipate in most of the old bond, we have 0.5 point of carry in EUR 150 million of bond for 1 year. That means we expect to close -- we forecast to have next year roughly from EUR 10 million to EUR 11 million of interest. This is naturally low because we closed the end of September with EUR 6.5 million interest. And for the Q4, naturally, we forced to have a little more interest for new bond, but it's not material. And probably close, in any case below EUR 5 million more or less EUR 9 million total expense. Next year, we forecast EUR 11 million and go down to EUR 10 million for 2027.

About the second question on AI, in our budget, it is correct. We forecast of roughly EUR 5 million from the AI. But we are waiting to understand indeed how is strong the contribute from the government in Germany because end of December, probably there is formal, the law in Germany. We have a detail about how much is the contribute from the state. In case is high, is strongly, we want to increase this CapEx. This CapEx and amortizing is just included in our amortizing because the excess is covered with a contribute from the government in case.

In matter of churn, the churn is totally in line with the last 3 years, consider that it's very low because it's EUR 2 million in Italy and the same in Germany. Only in Germany, we have one specific big churn coming for M&A because one big bank acquired a bank, our client. And this churn is at the moment fully recovered with the new booking. Fortunately, in Germany, we have had a very, very strong new booking. And other more currently, we cover totally the value of the churn. For this reason, we expect to stay stable for next year in terms of revenue despite this big extraordinary churn. But it is a churn related to M&A. It's not churn for client to leave the company for quality or competition. It's only specific M&A. In Italy, it's very, very low, the churn rate and 50% of the churn coming from the indirect channel when we have a lot of small clients below our partner. And usually, in this channel, the churn rate is a bit higher. But in the core business, we remain very, very, very low level churn.

[Operator Instructions] The next question is from Marco Vitale of Mediobanca.

A very quick follow-up on the successful debt refinancing. We noted that you have increased the amount to be borrowed. If you could comment what is the rationale here? I believe the higher cash proceeds to finance M&A, but if you could spend a few words on this?

Consider the reason naturally is refinance the old bond. The maturity of old bond was October 2026. We go on the market in advance naturally to avoid to be close to the maturity of the bond. EUR 150 million is naturally to refinance to repay the bond at maturity date. The excess EUR 65 million is -- the basket we have treasury share is roughly EUR 100 million, is [high] power we have to finance M&A and investment in term of data center we need in the future, mainly M&A, we are naturally very, very active in Germany, and we are looking for regional provider, and we want to continue the consolidation of the market in that zone. But mainly is to refinance naturally the old bond outstanding.

Clear. I was referring to the excess -- refinancing excess of the old bond, but very clear.

The next question is from Michele Mombelli of TPICAP.

Congratulations on the results and also for your advertise, your commercial on "Sky European Do It Better," I liked it. I wanted to ask something regarding the pipeline in the Italian market because over there, you have capacity, right? So you have more capacity there than in Germany. So I want to know how is going your backlog there, your pipeline there so that maybe we're going to see other new revenues with fixed costs. So that's the first question.

And the second one maybe is how much is influencing the domain and the theme of data sovereignty with your new contracts in Germany because you mentioned Germany is accelerating a lot. And I would like to know what's the driver behind that? We saw the partnership between Deutsche Telekom and NVIDIA. Maybe any kind of read across from companies over there?

Okay. It's correct. Probably the assumption, Italy is a growing market for us. The organic growth in Italy is at the moment double digit. We forecast to remain at the same level next year. Consider that in Germany, our feel is the client is more in advance to change something infrastructure from the hyperscale to the private for data sovereign and not only for this, but to have more predictable cost. In Italy, to be honest, we are a little slow in the feedback from the client. And there is sure sentiment, growing sentiment about sovereign but in Germany, we see more activity, client side. And the deal we closed in June in Germany is EUR 10 million deal specifically with this client is exactly this direction.

The client decided to leave Amazon, it's a big client that we have in Germany and decided to move from the public hyperscale to the private environment for the -- mainly for the data sovereign. We are seeing a changement in the market, to be honest, not so fast in Italy, more in Germany. But in Germany and in Italy, we are growing fast because the brand that we have -- the brand awareness in Italy is very, very strong. And we continue to sign new logo coming from exactly events like marketing. And we see last year 3 or 4 new logo coming directly from marketing activity events we did in Italy in the last 18 months, like Luna Rossa Sport. So in Italy, the brand is more -- the brand awareness is high. Now we are working to reinforce the brand awareness in Germany. For this reason, the sport you saw in Italy, a new sport in Sky, we want to replicate the same sport in Germany. In the next quarters, we are now -- [indiscernible] in German language, and we want to start to push -- increase the brand awareness in Germany.

Can I follow up? I just wanted to follow up. So basically, you're going to foresee maybe a little bit more of higher marketing expenses or let's put it this way, expensive investments in Germany in the next months. And that's the first question as a follow-up. And the second is related a little bit more of clarity regarding the AI-powered data center. Do you think that if you're not going to enter in that space, you're going to lag behind any kind of competitor in that space?

No, we are entering the space. Part of our investment in Germany next year will be exactly data center with specific characteristics, high density for GPUs. Probably 70% of our new data center we are building in Germany is projected exactly for GPUs, okay? Because if we see the demand of GPUs, we just have the first client, but the normal data center characteristics is not able to host the high consumption of GPUs. For this reason, we want to build one data center specific for GPUs. Naturally, it is not EUR 1 billion investment by Google or Q-SYS. We start with probably the investment based on our capacity, but we are entering in this segment, sure.

We see value to be a provider, premium provider with local data, partly through AI. The problem AI is where your information go. If you use the upper scale AI, your information is -- you can control what is data, with your privacy. For this reason, we see a very, very strong opportunity to be in this segment. Cost market is increasing sure, currently 2%. Probably in next 2 years, we force to go to 3% and 3.5% of the revenue. Currently -- sorry, from the recurring revenue. Currently, we are roughly in the area 2% of the recurring revenue. We go to 3% in the next 2 years to increase the marketing activity in Germany.

[Operator Instructions] Management, there are no more questions registered at this time.

Okay. There is no additional questions. So thanks all to join this conference, and see you soon for the next conference for the full year results. Thank you.