Acquisition of Intesa Sanpaolos Merchant Acquiring Business 19 th - - PowerPoint PPT Presentation

acquisition of intesa sanpaolo s merchant acquiring
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Acquisition of Intesa Sanpaolos Merchant Acquiring Business 19 th - - PowerPoint PPT Presentation

Acquisition of Intesa Sanpaolos Merchant Acquiring Business 19 th December 2019 1 Le Legal Di Disclaimer This Presentation may contain written and oral forward - looking statements, which includes all statements that do not relate


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Acquisition of Intesa Sanpaolo’s Merchant Acquiring Business

19th December 2019

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Le Legal Di Disclaimer

This Presentation may contain written and oral “forward-looking statements”, which includes all statements that do not relate solely to historical or current facts and which are therefore inherently uncertain. All forward- looking statements rely on a number of assumptions, expectations, projections and provisional data concerning future events and are subject to a number of uncertainties and other factors, many of which are outside the control of Nexi Group (the “Company”). There are a variety of factors that may cause actual results and performance to be materially different from the explicit or implicit contents of any forward-looking statements and thus, such forward-looking statements are not a reliable indicator of future performance. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable law. The information and opinions contained in this Presentation are provided as at the date hereof and are subject to change without

  • notice. Neither this Presentation nor any part of it nor the fact of its distribution may form the basis of, or be relied on or in connection with, any contract or investment decision.

The information, statements and opinions contained in this Presentation are for information purposes only and do not constitute a public offer under any applicable legislation or an offer to sell or solicitation of an offer to purchase or subscribe for securities or financial instruments or any advice or recommendation with respect to such securities or other financial instruments. None of the securities referred to herein have been, or will be, registered under the U.S. Securities Act of 1933, as amended, or the securities laws of any state or other jurisdiction of the United States or in Australia, Canada or Japan or any other jurisdiction where such an offer or solicitation would be unlawful (the “Other Countries”), and there will be no public offer of any such securities in the United States. This Presentation does not constitute or form a part of any offer or solicitation to purchase

  • r subscribe for securities in the United States or the Other Countries.

Neither the Company nor any of its representatives, directors or employees accept any liability whatsoever in connection with this Presentation or any of its contents or in relation to any loss arising from its use or from any reliance placed upon it. This Presentation has been prepared on a voluntary basis since the financial disclosure additional to the half-year and annual ones is no longer compulsory pursuant to law 25/2016 in application of Directive 2013/50/EU. Nexi Group is therefore not bound to prepare similar presentations in the future, unless where provided by law. Neither the Company nor any of its representatives, directors or employees accept any liability whatsoever in connection with this Presentation or any of its contents or in relation to any loss arising from its use or from any reliance placed upon it.

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Key Hig ighlig lights

  • Ac

Acquisi sition of

  • f Intesa

sa San Sanpaolo's 's mer erchant acq acquiring busi business ss for €1.0b 1.0bn cas ash h consi sideration (plus potential earn-out payable in 2025)

  • ~180k merchants(1) and ~€66bn of transaction volumes(2)
  • 2020E EBITDA and earnings of ~€95m and ~€61m(3) respectively
  • Implied multiples: 10.5x EV/EBITDA 2020E, 16.4x P/E 2020E
  • 100% cash consideration, with committed bridge financing already in place
  • De

Deeping of

  • f strategic part

partnership with ith Intesa sa San Sanpaolo in in merchant acq acquiring

  • Acquisition of Intesa Sanpaolo’s merchant acquiring business
  • Marketing and distribution agreement for merchant acquiring, with 25 years duration until 2044
  • Ex

Extensi sion of

  • f rem

emaining exi xisting pr process ssing con

  • ntract in relation to issuing and ATM acquiring services (from original 2026 to 2044, in line with new framework)
  • Mar

arginal al add additional or

  • rdinary Cap

apex; limited extraordinary integration Capex

  • Exp

Expected le leverage ratio pr pro-forma a of

  • f ~3

~3.4x .4x ne net le leverage by year-end 2020 2020, in line with leverage range guidance at IPO

  • ~2.0x-2.5x target leverage confirmed over medium / long-term
  • Rei

eiterating fina financial gui guidance on

  • n a

a lar larger and and mor

  • re resi

esilient bus business ss

  • Transaction expected to be cas

ash EP EPS S acc accretive in in the he hig high teens s fr from 20 2020 20

  • Clo

losi sing of

  • f the transa

saction is is expected be before sum summer 20 2020 20 subject to customary regulatory approvals

  • Separate transaction being agreed by our shareholder Mer

ercury UK K Hol

  • ldCo to sell

sell a a 9.9% 9.9% stake in in Nexi to

  • Intesa

sa San Sanpaolo after closing of the Nexi transaction

  • No
  • ch

changes to Nexi’s governance framework or board composition as result from this separate transaction

Th The e Tran ansactio ion: Ac Acquis isit itio ion by y Ne Nexi of

  • f Intesa Sanpaolo’s Mer

Merchant Ac Acquir irin ing Bus Busin iness Oth Other Co Consid nsideratio ions

(1) As of Sept-2019. Figure already reflected in Nexi’s reported KPIs in light of existing processing activities. (2) As of 9M 2019 LTM. Figure already reflected in Nexi’s reported KPIs in light of existing processing activities. (3) For illustrative purposes, target earnings figure before any potential impacts from financing or any non-recurring items associated with the transaction.

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A Str Strategic Tra ransaction Str Strengthening Ne Nexi i Ro Role as as th the Le Leadin ing Ital Italia ian Pay ayTech

Greater coverage of

  • f th

the acq cquiring value ch chain and en enhanced abil ility to

  • dri

rive fu further in innovation and value for merchants

2

De Deepening of

  • f part

rtnership ip acr cross busin inesses es with ith th the e la largest bank in in It Italy

5 1

Enhanced pla latform and pos

  • sitioning in

in th the e acq cquiring seg egment

3

In Increased scale wit ith div iversification of

  • f revenue str

treams Valu lue en enhancing tr transaction wit ith cash EPS acc ccretion in in th the e hig igh tee eens fr from 2020E

4

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Tra ransaction Overvie iew

Key Items 2020E Net Revenues ~106 EBITDA ~95 Net Income ~61(3)

  • Ac

Acquisi sition of

  • f mer

erchant acq acquiring busi business ss of

  • f Intesa

sa San Sanpaolo

  • ~180k merchants(1)
  • €66bn of transaction volumes(2)
  • Mar

arketing and and dis distribution agr agreement for

  • r mer

erchant acq acquiring act activities

  • 25 years duration until 2044
  • Comprehensive commercial, marketing and distribution framework
  • Alignment of interests through rebate mechanism to Intesa Sanpaolo and

jointly agreed performance targets

  • Downside protection for Nexi in relation to potential business losses from

merchants

Ac Acquis isit itio ion of

  • f Intesa Sanpaolo’s Me

Merchant Ac Acquirin ing for

  • r €1.0bn

(P (Plu lus Potentia ial Earn-Out Payable le in n 2025)

  • Extension of remaining existing processing contract in relation to issuing and ATM

acquiring services

  • Duration extended until 2044, in line with new partnership framework

Key P& P&L L Fi Figures s of

  • f

In Intesa Sanpaolo’s Mer erchant Acq cquirin ing Key Com Components of

  • f the Transaction

Ext Extension of

  • f Remainin

ing Ex Exis isting Co Contract wit with Me Mercury Payment Serv Services Incremental l Economics for

  • r Ne

Nexi i (€m) m)

(1) As of Sept-2019. Figure already reflected in Nexi’s reported KPIs in light of existing processing activities. (2) As of 9M 2019 LTM. Figure already reflected in Nexi’s reported KPIs in light of existing processing activities. (3) For illustrative purposes, target earnings figure before any potential impacts from financing or any non-recurring items associated with the transaction.

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Tra ransaction Im Impact on

  • n th

the Merchant Acq cquir irin ing Valu alue Chai ain

Process ssing Cle learing & Se Settlement Ope perations Product Desi Design and and Mar arketing Sch Scheme Mem embership POS S Mgm gmt / / Fr Front-End Pric icing and and Sale Sales Cus ustomer Mgm gmt Tec echnologi gical al Pla latform Ope perations Products s / Sol Solutions Sal Sales s & Cus ustomer Mgm gmt

Status Quo Post Transaction

ILLUSTRATIVE MERCHANT ACQUIRING VALUE CHAIN

Marketing and Distribution Agreement Until 2044

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7 ~26% ~49% Nexi Nexi Pro Forma

Key Fin Financial l an and Busi siness Mix ix Im Impacts

EBIT EBITDA 2020E

1,048 1,154 106 Nexi Consensus Incremental Contribution

  • f ISP Acquiring (after rebates)

Nexi Pro Forma +10% 568 663 95 Nexi Consensus Incremental Contribution

  • f ISP Acquiring

Nexi Pro Forma

Ne Nexi i Ne Net Revenues Mi Mix 2020E

Merchant Services & Solutions

Mer Merchant Ser Servic ices & & So Solutions Ne Net Revenues Mix Mix 2020E

Referral / Direct Acquiring Other

Ne Net Revenues 2020E

Source: Company information and Nexi consensus estimates as of December 2019.

Other ~49% ~54% Nexi Nexi Pro Forma +17%

Cash Cash EP EPS S Ac Accretio ion

Transa saction exp xpected to

  • be

be cas ash EP EPS S acc accretive in in the he hig high teens s fr from 2020E 2020E

+5p.p. +23p.p.

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Update on

  • n Le

Leverage

Ne Net Fi Fina nancia ial De Debt / L / LTM TM EBIT EBITDA

~3-3.5x ~3.0x ~2-2.5x IPO Guidance FY 2019 Expected Medium to Long-Term

Nexi Standalone

~3.4x ~2-2.5x 2020E Medium to Long-Term

Nexi Pro Forma for the Transaction (Assuming Issuance of €1.0bn New Debt)

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Re Reiteratin ing Fin Financia ial Gu Guid idance on

  • n a

a Lar Larger an and More Re Resil ilie ient Busi siness

Cu Current Guid uidance Upd pdate on

  • n Guid

uidance Aft After the the Tran ansaction

Net Revenues 5 - 7% annual net revenues growth over medium-term  Rei eiterated Increased scale and resilience, with further diversification EBI EBITDA 13 - 16% annual EBITDA growth over medium-term  Rei eiterated Marginal fixed cost impact Cap apex 8-10% ordinary Capex as % of net revenues over long term Transformation Capex on top of ordinary Capex of ~€180m cumulative (2H19 –c.2023)  Improved Marginal incremental ordinary Capex on larger revenue base Limited extraordinary integration Capex Increased cash conversion Cap apital St Structure Target Net Debt of ~2.0-2.5x EBITDA over medium to long-term  Rei eiterated Strong organic deleveraging Improved cas ash EP EPS S and and cas ash flo flow con

  • nversi

sion

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