Chairman's Statement

Dear Shareholders,

We have been implementing a series of measures over the past few years, in order to adapt our organizational structure and fine-tune the Reditus operational model, focusing on the business areas with the greatest potential and market attractiveness.

The successeful strategy implementation, namely in what concerns the internal reorganization and the focus on core activities has, together with the recovery of the economy, the implementation of digital transformation projects by companies and the Brexit effect, opened up opportunities throughout the year for various areas of Reditus’ business activities.

The operational indicators for the Reditus Group registered a positive evolution compared to the previous period, as may be seen from the positive variation recorded in the EBITDA margin and in the Net Income. Despite an EBITDA reduction of 0,5 million Euros in 2019, compared to the same period of the previous year, to 4,0 million euros, we have been able to increase the EBITDA margin, which reached 16.3%. This represents an improvement of 2.4 p.p. and 4.7 p.p., compared respectively to 2018 and 2017.

Net Income reached a positive 49 thousand Euros, which means a positive variation of 3.01 million Euros over to the same period last year. Such result was achieved through the implementation of a policy of expenditure rationalization, namely concerning personnel costs, supply and external services and financial charges.

Operating Income decreased by 24.8% to 24.4 million Euros, vs. 32.4 million Euros in the previous year. This income reduction results from decreases in all the company's 3 business segments and results from the defined strategy of focusing in the development of projects with increased added value.

The ITO segment has seen a reduction of 20.3%, slightly above the remaining areas, and is mainly a reflection of a decrease in international projects and of a focus on higher added value projects. Such strategy led to a drop in the segment's revenues, but on the other hand influenced positively its EBTIDA and EBITDA margin.

The IT Consulting segment also suffered a 13% reduction in revenues. Its EBITDA and EBITDA margin, despite decreasing, remained positive at respectively 1.04 M€ and 6.4%.

The BPO segment has also seen a 13.0% revenue reduction, with its EBITDA and EBITDA margin remaining positive at respectively 542 K€ and 5.2%.

Revenue for the International sector in 2019 decreased by 34.8% compared to 2018, with a reduction from 41% to 35% of its weight in relation to the Group's overall revenue. With a turnover exceeding 8,5 million Euros, this sector continues to reflect Reditus’ commitment to its businesses in international geographies and the sustainability of its long-term projects in the ITC and ITO segments.

Despite the economic recovery and the Group's good operating results, the final period of the year revealed new challenges. The pandemic outbreak of COVID 19 at the end of the year came however to curb the high expectations this Board had for the 2020 fiscal year.

On the basis of the forecasted GDP reduction for the various European countries, Reditus’ business objectives must necessarily be re-framed in the light of such new reality. While aware of the consequences of the new business and social realities, Reditus will nevertheless continue to focus on the profitability and sustainability of its operations and in the search for new customers through the development of new product offerings and inroads into new market segments.

The economic and operational difficulties of corporations, marked by the limitations on circulation and on the opening of commercial spaces in a traditional model of offer, do nevertheless reveal a range of opportunities for Information Technology suppliers, also in client service segments, namely in the areas of customer support and retention.

In terms of Information Technologies, Reditus believes that corporations will review their plans and redefine their business processes, forcing an acceleration of digital transformation processes, which will leverage the business opportunities for IT companies in general.

Aware of this new reality, Reditus will commit to propositions that should reinforce its presence in the installed and cross-selling customer base, while fostering synergies between the different teams, enhancing existing skills and optimizing operational processes, as well as significantly increase the number of new customers as a result from the commercial alignment across the business segments.

With a major reduction in face-to-face contact points with their Customers, large organizations depend increasingly on their BPO and Contact Centers for interaction. For this reason, Reditus will greatly focus on its BPO and Contact Center services, combining the Group's technological capabilities with its widely recognized expertise in the management and transformation of our Customers' business processes.

Reditus will maintain its efforts in innovation and technological development, in order to keep moving up in the sector's value chain and to deliver new solutions to current and future Customers, while maintaining high quality levels with costs that are globally adjusted to the business and the market.

We would also like to thank our Shareholders for all the support we have received, and our employees for the commitment and dedication that have allowed us to keep providing the market with services and solutions of excellence.


Chairman of the Board of Directors