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ENGINEERING, 30 YEARS OF SUCCESS IN INFORMATION TECHNOLOGY
A case of true Italian excellence. The Engineering group is Italy’s leading consulting and services business, with 13 companies, 37 branches in Italy and abroad, 6,600 IT professionals, and one of Europe's largest Data Centres for outsourcing at Pont Saint Martin (Aosta). The group has been listed on the Italian stock exchange since 2000. It will be 30 years old next year and its founder and president, Michele Cinaglia, together with the vice president, Rosario Amodeo, are ready to celebrate. Because 30 years in the IT sector is truly an era.
How did the Engineering group begin?
Cinaglia: The company was set up thanks to a management buyout operation by
Cerved, the IT company of the Italian Chamber of Commerce network, now called Infocamere. We started with limited capital, but with a wealth of professional experience and know-how, which was what we wanted to sell on the market.
A few years later, in 1984, Rosario Amodeo, now the executive vice-president, became a share holder.
Amodeo: What led me to join the company was the relationship of close collaboration between myself and Cinaglia: we always worked together. After I became the principle stock holder, in 1984 I took an executive role in the company as managing director. Today 67% of the company is in the hands of the founding shareholders and 33% is on the market.
What is Engineering’s market position today?
Cinaglia: We have a market share of 7%, we expect to record earnings in 2009 of 750 million Euros, with an EBIDTA of between 13% and 14%. The important factor, especially in this moment, is our low level of debt. We operate as a system integrator on all the markets, from finance to central and local public administration, and from healthcare to industry. Our customers are medium to large in scale. As a result, we have a very solid financial position. These are the results of 29 years of work. We have ongoing investments in research and innovation amounting to 50 million Euro already planned for the three-year period 2008-2011. We have around 7 thousand employees; 92% - 93% of these are in Italy, and 7%-8% abroad, in around thirty countries.
And in 2000 you entered the Italian stock exchange.
Cinaglia: We are listed on the ALL STAR index of the Italian Stock Exchange. All the money from Ipo was used for the expansion of the company. I It was used in order to grow and make acquisitions, and this enabled us to become a special case in the field of system integrators. Our business model integrates our own solutions, as well as those of third parties.
We have our own complete and technologically advanced solutions, built in-house and completely paid for within the same year. Our strong point is our expertise: we have a very advanced research centre, with 100 researchers in 4 or 5 locations in Italy and Brussels, who collaborate intensely with the top Italian universities. Our researches are an important asset for us, and indispensible for a serious market presence. The excellent margins we make are mainly due to our high level of expertise.
What does internationalisation mean for you?
Cinaglia: Internationalisation took off for Engineering with the acquisition of Atos Origin Italia, at the beginning of 2008. In general, we go abroad when our client companies go abroad. For example, in the finance sector we went all over Europe with Banca Intesa and Unicredit; with industry, we follow clients such as Fiat, Piaggio and Ansaldo, all of whom have business in the international markets.
Amodeo: We also have our own companies that do business abroad, as is the case in Brussels, where we are buying a small company and where the management of our institutional affairs is located. The same for San Paolo in Brazil, where we arrived with our client Telecom Italia and where we later established Engineering Do Brasil.
What are your strategies for the foreign markets?
Amodeo: Our basic idea is not to be bound by rigid or preconceived strategies, but to carefully follow market developments and bit by bit take advantage of the opportunities that present themselves.
How are you managing in this time of economic crisis?Cinaglia: In terms of results, we are growing. We have significant results and a low level of debt. With our clients, we notice a certain degree of uncertainly in their strategies, for example with internationalisation. But nevertheless, we feel our clients appreciate our qualities in this difficult moment. A final matter concerns the risk of tensions regarding payments from our clients, who in some cases are feeling the effects of this economic situation and have greater difficulty in obtaining financing.