Chairman's Statement

Dear Shareholders,

2017 marked the beginning of a three-year program at Reditus, that contemplates not only a range of changes in its organizational structure and operational model, with a view to rationalizing operational and structural costs, but also its investment in key areas.

Reditus’ strategy promotes a focus on the Core areas, paying special attention to emerging technologies with high demand in the marketplace and in international geographies, and also aims at reducing business risk through the selection of sustainable, medium to long-term projects, and the increasing value of the services offered.

We experienced in 2017 a significant improvement over the same period of 2016, as evidenced by the positive variation in EBITDA growth, the improvement in Net Results and the growth in international businesses.

In spite of a 6.3% decrease in Operating Income to € 42 million, improvements in the contribution margins of the different Group operations afforded a 76.9% growth in the Group’s consolidated EBITDA, which reached 4.9 million Euros against 2.8 million Euros in the same period of the previous year.

The Net Income remained nevertheless negative at 1,6 million Euros, despite representing a positive variation of 1,3 million Euros relative to the previous year. This result was negatively influenced by non-recurring factors, namely Losses relating to Provisions and Impairments amounting of 0,8 million Euros, and Net Present Value of Customer Receivables amounting to 0,8 million Euros.

Revenue for the International Sector registered a growth of 9.9% YOY, with its weight increasing from 39% to 46% relative to the Group's overall Revenue. Such results were obtained with projects developed in the three geographies where the Group has subsidiaries, namely Angola, Mozambique and Equatorial Guinea.

A more focused analysis of the income sources reveals a strong growth in the activities of the IT Consulting segment, while revenues in the IT Outsourcing segment were stable and the BPO segment suffered a contraction. Such contraction reflects the term of a large contract from the previous year and which the Group has consistently been replacing for others of equivalent value and increased profitability. We were as a result able to obtain several contracts from within our installed customer base, both new and renewals of existing contracts, and also to acquire new clients, all of which will contribute to better results of the BPO segment through the coming periods.

We still have a long road ahead, but the results obtained so far allow us a glimpse of our successful strategy focused on innovation, process optimization and internationalization. We will continue to focus on innovative solutions based on cutting-edge technologies such as, among others, Cloud, Hyper-convergence, Robotization (RPA) and Artificial Intelligence, and IoT (Internet of Things).

To walk this ambitious road, we will definitely continue to count on the remarkable commitment of a team of professionals who give daily their very best at the service of Reditus, and who are the main contributors to the path of success that we want to pursue.


Chairman of the Board