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Sesa S.p.A. (IT:SES)
:SES
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Sesa S.p.A.
(SES)
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Rating:74Outperform
Price Target:
€103.00
▲(9.63% Upside)
The score is driven primarily by steady financial performance and improving leverage, supported by a clear technical uptrend and a generally positive earnings-call outlook (reaffirmed guidance, strong H1/Q2 and backlog). Offsetting factors are only moderate valuation support (P/E 21.52, ~1.08% yield) and margin/cash-conversion pressures highlighted in both the financials and the call.
Positive Factors
Backlog and organic growth visibility
A 25% backlog increase in ICT value‑added services provides durable near‑term revenue visibility and supports the company’s 5–7.5% organic growth guidance. Backlog in recurring VAS businesses reduces demand volatility and underpins predictable service delivery and cash flow over coming quarters.
Improving leverage and financial efficiency
Reduced net debt and lower financing costs enhance balance‑sheet flexibility, lowering refinancing risk and freeing capacity for targeted capex and selective M&A. Sustained leverage improvement strengthens ability to execute strategic investments while maintaining dividend and buyback commitments.
Positive free cash flow growth
Double‑digit free cash flow growth and a high FCF-to-net‑income ratio indicate solid cash generation versus profits, supporting dividends, buybacks and reinvestment. Durable FCF trends increase financial resilience and fund organic initiatives despite operating cash conversion headwinds.
Negative Factors
Weak operating cash conversion
A very low operating cash conversion ratio signals persistent working‑capital or billing timing issues that can strain liquidity. Over time, weak cash conversion limits flexibility to fund capex, M&A or shareholder returns without increasing leverage or relying on one‑off proceeds.
System integration margin pressure
Margins in a core services line have weakened due to reengineering and execution issues. Given system integration’s role in revenue mix, prolonged margin pressure could compress group profitability, requiring pricing improvement, efficiency gains or higher‑margin service mix to restore sustainable margins.
Rising amortization and heavy near‑term investment
Higher amortization from recent deals and elevated capex/M&A levels materially reduce reported EBIT and create execution risk. If acquisitions or integrations underperform, ongoing amortization plus sizeable planned investments can depress returns and constrain cash available for core operations over multiple years.
Sesa S.p.A. (SES) vs. iShares MSCI Italy ETF (EWI)
Market Cap
€1.43B
Dividend Yield1.15%
Average Volume (3M)57.25K
Price to Earnings (P/E)21.5
Beta (1Y)1.08
Revenue Growth9.50%
EPS Growth0.52%
CountryIT
Employees6,367
SectorTechnology
Sector Strength88
IndustryInformation Technology Services
Share Statistics
EPS (TTM)0.57
Shares Outstanding15,494,590
10 Day Avg. Volume27,604
30 Day Avg. Volume57,248
Financial Highlights & Ratios
PEG Ratio-0.80
Price to Book (P/B)2.28
Price to Sales (P/S)0.32
P/FCF Ratio16.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
€117.67Price Target Upside25.25% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Sesa S.p.A. Business Overview & Revenue Model
Company DescriptionSeSa S.p.A., through its subsidiaries, distributes value-added information technology (IT) products and solutions in Italy and internationally. Its Software and System Integration sector provides software, technological innovation, and digital transformation solutions for end user companies in the SME and enterprise segments; IT infrastructure and IoT solutions; artificial intelligence and machine learning solutions; digital and business application services; and HR management solutions, as well as operates solutions on the Microsoft Dynamics platform. This sector also provides cloud services; digital security services; digital manufacturing, processing, and transformation solutions; management, maintenance, technical assistance, and repair services for computers and IT products; and strategic outsourcing services, as well as operates in the cloud computing and systems assistance sectors. In addition, this sector develops and markets ERP software and applications; offers solutions and integrated services on the SAP Business One platform; develops 3cad products for the furniture industry; produces and markets software products, as well as provides IT services for the retail sector; offers project management services; and provides product lifecycle management solutions for manufacturing sector. The company's Business Services sector offers business process outsourcing, security, and digital transformation services for the finance segment. Its Value-Added Distribution sector engages in the value-added distribution of technological, enterprise software and datacenter solutions; management of networking solutions; provision of design services for IT solutions, as well as digital media Adobe solutions; and market of Hitachi data systems solutions. The company's Corporate sector offers logistic services, and marketing and promotion services for the ICT channel. SeSa S.p.A. is headquartered in Empoli, Italy. SeSa S.p.A. operates as a subsidiary of ITH SpA.
How the Company Makes MoneySesa S.p.A. generates revenue through multiple streams, primarily by offering IT services and solutions to businesses. The company earns money by charging clients for consulting services, software licenses, and ongoing maintenance and support contracts. Additionally, SES benefits from the distribution of third-party technology products, where it receives margins on sales. Significant partnerships with leading technology vendors enhance its offerings and drive sales growth. The company also sees revenue from training and educational services, helping clients optimize their IT investments. Overall, SES's diverse portfolio allows it to capture a wide range of market opportunities, contributing to its financial performance.
Sesa S.p.A. Earnings Call Summary
Earnings Call Date:Dec 18, 2025
(Q2-2026)
| % Change Since: |
Next Earnings Date:Mar 12, 2026
Earnings Call Sentiment Positive
The call presented solid financial progress: double‑digit reported revenue and EBITDA growth, strong Q2 acceleration, sectoral strengths (Digital Green, ICT VAS recovery), improved financial efficiency and active capital returns. Remaining weaknesses are concentrated in system integration margin pressure and near‑term margin timing in Business Services, plus conditional disposals and continued sizable investment levels. Management reaffirmed FY26 guidance and expects to reach or approach the upper end of targets, signaling confidence in organic momentum.Q2-2026 Updates
Positive Updates
Consolidated Revenue Growth (Reported)
Consolidated revenues and other income of EUR 1.6 billion, up 12.0% year‑on‑year (reported).
Profitability Improvements (Reported)
EBITDA of EUR 114.4 million, up 11.4% year‑on‑year (EBITDA margin 7.1% broadly stable); consolidated EAT adjusted of ~EUR 50 million, up 17.1% year‑on‑year; group net profit adjusted EUR 45 million, up 13% year‑on‑year.
Strong Second Quarter Acceleration
Q2 revenues EUR 755 million, up 16% reported and 9.4% like‑for‑like; Q2 operating EBITDA up 16.6% reported and 8.4% pro forma; Q2 group EAT adjusted up ~30% reported and 17% pro forma — management highlights Q2 as major driver of H1 outperformance.
Digital Green VAS Outperformance
Digital Green VAS revenues EUR 210 million, up 26% vs H1 2025 pro forma; EBITDA EUR 14 million, up 30% pro forma (EBITDA margin 6.7%). Management cites strong demand tied to energy needs from digitalization and AI adoption.
ICT VAS Recovery and Backlog Improvement
ICT VAS revenues EUR 939 million, up 2.1% fully organic with a recovery vs prior declines; Q2 ICT VAS revenue growth +8.1% and November backlog +25%, supporting near‑term revenue visibility.
Business Services Momentum
Business Services revenues EUR 74 million, up ~7% year‑on‑year; EBITDA EUR 11.6 million, up 6.6% with a healthy 15.8% margin; Q2 revenue acceleration +11% driven by multiyear contracts.
Improved Financial Efficiency and Net Debt
Net financial expenses decreased ~11% vs H1 2025 (15.5% reduction in Q2 vs Q2 2025) due to lower interest rates and better financial management; net debt improved to EUR 119 million (including EUR 208 million IFRS debt), down from pro forma EUR 122 million.
Capital Allocation Discipline and Shareholder Returns
New industrial plan shifts toward organic growth and lower M&A; FY26 payout ratio raised to 40% with EUR 1/share dividend (EUR 15.5m) and an expanded EUR 25m buyback program (phase 1 EUR 15m completed); additional share cancellations executed (157,522 shares).
Selective M&A and Integration
Four strategic acquisitions in H1 (Germany, Spain, Italy, Switzerland) consolidated or to be consolidated with entry valuations ~5x EBITDA; targets generally deliver >10% EBITDA margins, confirming selective, value‑oriented M&A strategy.
ESG Recognition and HR Progress
Retained EcoVadis Platinum rating (highest level); headcount increased 1.7% vs April 30, 2025 and continued focus on training, inclusion and welfare programs.
Negative Updates
System Integration Margin Pressure
System integration revenues EUR 420 million (up 4% yoy) but EBITDA down 1.9% to EUR 43.4 million and EBITDA margin at 10.3%, reflecting reengineering in some business units and a guidance to stabilize margins at FY'25 levels.
Business Services Short‑term Margin Impact
Although Business Services revenues accelerated (+11% in Q2), management noted a decrease in marginality in Q2 due to the start of several multiyear contracts that have not yet translated into profitability.
Software/System Integration Slight Underperformance
Management acknowledged being slightly below guidance in the first half for software system integration, requiring recovery in H2 despite Q2 improvement and positive backlog.
Significant Amortization and D&A Increase
Depreciation and amortization rose ~14% year‑on‑year to EUR 26 million; amortization of customer lists/know‑how of EUR 17.5 million reduced consolidated EBIT (reported EBIT EUR 65 million after intangibles).
Pending Disposal and Conditional Transaction
Binding agreement to sell a 6.6% stake in DV Holding is subject to Golden Power and antitrust approvals; transaction expected to generate ~EUR 7 million positive impact on consolidated net profit but remains conditional.
Heavy Near‑term Investment Level and Execution Risk
Last 12 months investments totaled ~EUR 140 million (EUR 37 million in H1), with substantial M&A and buyback/dividend payouts (~EUR 35 million); full‑year investment guidance (~EUR 80 million including M&A and CapEx) implies continued capital deployment and execution risk versus the new focus on reduced annual M&A.
Company Guidance
Management confirmed FY26 guidance of organic revenue growth of 5–7.5%, organic EBITDA growth of 5–10% and roughly a 10% organic increase in net consolidated profit (vs. an earlier 10–12% range), saying the upper end is achievable given strong H1 and Q2 momentum: H1 revenues EUR 1.6bn (+12% y/y), H1 EBITDA EUR 114.4m (+11.4%), adjusted EAT EUR 50m (+17.1%) and group net profit adjusted EUR 45m (+13%); Q2 revenues EUR 755m (+16% reported / +9.4% pro‑forma), Q2 EBITDA +16.6% reported / +8.4% pro‑forma and Q2 adjusted EAT +30% reported / +17% pro‑forma, together with a November backlog up 25%. They reiterated investment guidance of ~EUR 80m for the year (including ~EUR 35m M&A and EUR 52–55m CapEx), longer‑term annual M&A ~EUR 30m and CapEx ~EUR 50m, a 40% payout policy with a EUR 25m buyback and EUR 1/share dividend (EUR 15.5m paid), noted net debt of ~EUR 119m and a reduction in net financial expenses (~11–15.5%).Sesa S.p.A. Financial Statement Overview
Summary
Sesa S.p.A. demonstrates steady financial performance with consistent revenue growth and profitability. The company has improved its leverage position, enhancing financial stability. While cash flow metrics show positive trends, there is a need to strengthen operating cash flow. Overall, the company is on a stable trajectory, but should focus on improving margins and cash flow efficiency to support long-term growth.Income Statement
Sesa S.p.A. shows a stable revenue growth with a TTM increase of 1.89%, although this is a slowdown compared to previous years. The gross profit margin has decreased to 6.56% in the TTM, indicating pressure on cost management. The net profit margin remains modest at 1.90%, reflecting consistent profitability. EBIT and EBITDA margins are stable, suggesting operational efficiency, but there's room for improvement in profitability.Balance Sheet
The company's debt-to-equity ratio has improved to 0.90 in the TTM, indicating better leverage management compared to previous periods. Return on equity is healthy at 14.06%, showcasing effective use of equity to generate profits. The equity ratio is stable, reflecting a balanced capital structure, but the company should continue to monitor its debt levels to maintain financial stability.Cash Flow
Free cash flow growth is positive at 12.35% in the TTM, a significant improvement from previous declines. The operating cash flow to net income ratio is low at 0.10, suggesting potential cash flow constraints. The free cash flow to net income ratio is strong at 0.67, indicating good cash generation relative to profits, but the company should focus on enhancing operating cash flow.| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.29B | 3.21B | 3.16B | 2.87B | 2.02B | 1.76B |
| Gross Profit | 215.87M | 389.57M | 263.91M | 235.29M | 151.59M | 83.72M |
| EBITDA | 225.04M | 235.04M | 233.45M | 201.26M | 159.32M | 119.64M |
| Net Income | 62.54M | 62.20M | 78.27M | 84.45M | 52.27M | 37.91M |
Balance Sheet | ||||||
| Total Assets | 2.23B | 2.24B | 2.12B | 1.92B | 1.22B | 1.10B |
| Cash, Cash Equivalents and Short-Term Investments | 498.95M | 576.88M | 585.76M | 545.50M | 426.90M | 368.94M |
| Total Debt | 419.72M | 475.67M | 422.88M | 356.08M | 332.22M | 314.24M |
| Total Liabilities | 1.71B | 1.74B | 1.64B | 1.50B | 920.18M | 844.61M |
| Stockholders Equity | 463.79M | 445.92M | 429.58M | 374.93M | 278.63M | 236.39M |
Cash Flow | ||||||
| Free Cash Flow | 80.07M | 60.14M | 98.57M | 78.96M | 120.89M | 78.64M |
| Operating Cash Flow | 119.14M | 117.23M | 137.62M | 115.45M | 147.89M | 95.24M |
| Investing Cash Flow | -104.86M | -114.91M | -103.75M | -85.19M | -37.76M | -21.10M |
| Financing Cash Flow | -47.73M | -17.83M | 6.10M | 10.94M | -51.93M | 45.25M |
Sesa S.p.A. Technical Analysis
Positive
93.95
Price Trends
84.33
Positive
83.08
Positive
78.76
Positive
Market Momentum
2.26
Negative
70.04
Negative
94.64
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IT:SES, the sentiment is Positive. The current price of 93.95 is above the 20-day moving average (MA) of 86.98, above the 50-day MA of 84.33, and above the 200-day MA of 78.76, indicating a bullish trend. The MACD of 2.26 indicates Negative momentum. The RSI at 70.04 is Negative, neither overbought nor oversold. The STOCH value of 94.64 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IT:SES.
Sesa S.p.A. Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | €1.43B | 21.51 | 15.29% | 1.15% | 9.50% | 0.52% | |
71 Outperform | €292.72M | 15.53 | ― | 2.82% | -24.28% | -57.55% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
61 Neutral | €692.97M | -156.05 | -1.19% | 2.02% | 14.90% | -123.79% |
* Technology Sector Average
IT:SES
Sesa S.p.A.
93.95
35.58
60.94%
IT:TNXT
Tinexta SpA
15.23
7.43
95.36%
IT:DGV
Digital Value SpA
28.75
6.31
28.12%
IT:SPN
Spindox S.P.A
12.95
2.70
26.34%
IT:VNT
Vantea Smart S.p.A.
1.02
-0.12
-10.53%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.