Company Presentation
Last update – 2015 FY Results
Company Presentation CERVED INFORMATION SOLUTIONS S.p.A. Last update - - PowerPoint PPT Presentation
Company Presentation CERVED INFORMATION SOLUTIONS S.p.A. Last update 2015 FY Results Disclaimer This presentation and any materials distributed in connection herewith (together, the Presentation) do not constitute or form a part of, and
Last update – 2015 FY Results
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This presentation and any materials distributed in connection herewith (together, the “Presentation”) do not constitute or form a part of, and should not be construed as, an offer for sale or subscription of or solicitation of any offer to purchase
relied upon in connection with, or act as an inducement to enter into, any contract or commitment whatsoever. The information contained in this Presentation has not been independently verified and no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness, reasonableness or correctness of the information or opinions contained herein. None of Cerved Information Solutions S.p.A., its subsidiaries or any of their respective employees, advisers, representatives or affiliates shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or
date of this Presentation and is subject to change without notice. Statements made in this Presentation may include forward-looking statements. These statements may be identified by the fact that they use words such as “anticipate”, “estimate”, “should”, “expect”, “guidance”, “project”, “intend”, “plan”, “believe”, and/or other words and terms of similar meaning in connection with, among other things, any discussion of results of operations, financial condition, liquidity, prospects, growth, strategies or developments in the industry in which we operate. Such statements are based on management’s current intentions, expectations or beliefs and involve inherent risks, assumptions and uncertainties, including factors that could delay, divert or change any of
taken as a representation that such trends or activities will continue in the future. Actual outcomes, results and other future events may differ materially from those expressed or implied by the statements contained herein. Such differences may adversely affect the outcome and financial effects of the plans and events described herein and may result from, among other things, changes in economic, business, competitive, technological, strategic or regulatory factors and
amend any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on any such forward-looking statements, which speak only as of the date of this Presentation. It should be noted that past performance is not a guide to future performance. Please also note that interim results are not necessarily indicative of full-year results.
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Full Year 2015 Business Review
Overview
Investment Case
Full Year 2015 Results
Appendices
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2% 42%
290 (+3.6%) Business Information 627 (+3.9%) 721 (+8.5%)
Cerved Position and
Market Share in 2013 359 (-4.3%)
4.2% 42.7% 7.3%1)
Consumer 321 Corporates 305 €13.8m 4% of Group (11.7% CAGR) €142.6m 40% of Group (+6.3% CAGR) €75.0m 21% of Group (+57.7% CAGR) €124.5m 35% of Group (-2.0% CAGR)
No.1
No.1
Market
2013 Data (€m) (CAGR11-13)
Cerved
2015 Revenues1) (CAGR11-15) NPLs 502 Corporate receivables 219 Business Information 120
Rating & Analytics 39
Real Estate 97 Consumer Information 103
Credit Information Credit Management Marketing Solutions
Source: PwC 1) Preliminary figures 2) No. 1 player In the non-captive market, considering pro-forma revenues in 2013 which include Recus and Tarida
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Consistent Growth EBITDA Growth High Cash Flows
Revenue (€m) EBITDA (€m) EBITDA – Capex (€m)
Consistent Revenue, EBITDA and Cash Flow growth
Note: 2011 and 2012 EBITDA adjusted for shareholder’s fees and 2011 adjusted to review accounting policy related to the database acquisition costs
113 119 125 132 139 2011 2012 2013 2014 2015 138 145 152 160 171 2011 2012 2013 2014 2015 267 291 313 331 353 2011 2012 2013 2014 2015
+6.7%/ 1.6% +7.4% / +3.9% % / % Total Growth % / Organic Growth % +5.1% / +3.8% +5.5% +6.7%/ +5.2% +5.2%
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Mission-critical products and services through the cycle Undisputed market leadership Significant competitive advantages High revenue visibility Fundamental sector growth Untapped potential within the Italian market Cerved specific organic growth initiatives M&A Best-in-class EBITDA margins Cash conversion Attractive dividend payout
Growth
Cash flow
Resiliency
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Credit Management - Grow AUM and keep focused on collection Credit Information and Marketing Services - Continue to exploit the underpenetrated corporate market Exploit opportunities in adjacent markets Credit Information - Consolidate position in financial institutions Continue to invest in new product development and innovation Add-on opportunities focused on the Italian market
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Full Year 2015 Results
Investment Case
Appendices
Overview
Full Year 2015 Business Review
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Revenue Bridge (FY’2014 – FY’2015) – (€m) Revenues (€m) and Revenue growth (%) 290.6 313.5 331.3 353.5
2012 2013 2014 2015
331.3 353.5 2.5 (0.1) 21.7 (0.9) (1.0)
Revenues 2014 CI - Financial Institutions CI - Corporates Credit Management Marketing Solutions Other & Conso clearing Revenues 2015
Credit Information
+7.9% / +5.7% +5.7% / +3.8% % / % Total Growth % / Organic Growth % +6.7% / 1.6%
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EBITDA Bridge (FY’2014 – FY’2015) – (€m) EBITDA (1) (€m) and EBITDA margin (%) 160.1 170.8 3.3 8.3 (0.9)
EBITDA 2014 Credit Information Credit Management Marketing Solutions EBITDA 2015
144.7 151.5 160.1 170.8
2012 2013 2014 2015 48.3% 49.8% 48.3%
(1) FY 2012 EBITDA is adjusted for Shareholder Fees;
+4.7% / +4.6% +5.6/ +4.5% % / % Total Growth % / Organic Growth % +6.7% / +5.2%
48.3%
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Credit Information Credit Management Marketing Solutions
127.4 126.3 122.0 124.5 128.8 138.2 142.7 142.6 256.232 264.5 264.7 267.1 2012 2013 2014 2015
Revenue EBITDA
136.8 139.3 142.1 145.4 2012 2013 2014 2015 25.0 36.6 53.3 75.0 2012 2013 2014 2015 4.4 7.6 11.2 19.5 2012 2013 2014 2015 9.9 12.8 14.7 13.8 2012 2013 2014 2015 3.5 4.7 6.8 5.9 2012 2013 2014 2015
35.6% 36.5% 45.9% 20.7% 21.0% 53.4% 52.7% 53.7% (6.2%)
Corp.
% YoY Growth %
11.8%
40.8%
44.2% 1.4%
0.9%
2.0%
17.6% (12.6%)
18.8%
74.5%
64.2%
% EBITDA margin % % CAGR
42.7% 26.0% 54.4% % 2.3%
€m 2012 2013 2014 2015 Revenues 290.6 313.5 331.3 353.5 % growth (YoY) 8.8% 7.9% 5.7% 6.7% EBITDA 144.7 151.5 160.1 170.8 % Revenues 49.8% 48.3% 48.3% 48.3% Depreciation & Amortization (16.5) (23.3) (25.1) (28.5) EBITA 128.3 128.2 135.0 142.3 PPA Amortization (53.1) (39.4) (42.9) (45.8) Non recurring income and expenses 2.5 (7.4) (4.5) (3.8) EBIT 75.5 81.4 87.6 92.8 Financial income 0.9 0.8 1.1 1.1 Financial expenses - non recurring
(52.4) Financial expenses (29.1) (59.6) (54.6) (43.2) PBT 20.5 22.6 24.0 (1.7) Income tax expenses (15.4) (14.7) (12.0) 5.3 Reported Net Income 5.1 8.0 12.0 3.6 Adjusted Net Income 62.6 43.0 55.0 68.5
0.8 1.1 1.4 2.5
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Summary Profit and Loss (€m)
119.5 151.5 145.3 139.8 (25.4) (30.1) (32.4) (30.0) (82.5) (81.9) (73.3) (74.0) 11.7 40.8 40.4 37.8 2012 2013 2014 2015
Inventories Trade receivables Trade payables Deferred revenues Net Working Capital
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Net Working Capital (€m)
4.0% 13.0% 11.7% 10.7% NWC as % of Revenues %
€m 2012 2013 2014 2015 EBITDA 144.7 151.5 160.1 170.8 Net Capex (25.7) (26.6) (28.2) (31.6) EBITDA-Capex 119.0 125.0 131.9 139.1 as % of EBITDA 82% 82% 82% 81% Cash change in Net Working Capital(1) (6.1) (24.7) 8.2 3.0 Change in other assets / liabilities / provisions (1.9) 7.3 (13.9) (6.0) Operating Cash Flow 111.1 107.5 126.2 136.1 as % of EBITDA 77% 71% 79% 80% Operating Cash Flow (€m)
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(1) Cash change in Net Working Capital exludes non recurring items
€m 2013 2014 H1'15 2015 Bonds 780.0 530.0 530.0 530.0 Other financial Debt 1) 0.6 4.0 25.9 41.8 Accrued Interests 20.6 17.3 17.3 17.3 Gross Debt 801.1 551.3 573.2 589.1 Cash (50.3) (46.1) (14.3) (50.7) Capitalized financing fees 2) (28.6) (17.6) (16.2) (1.5) IFRS Net Debt 722.2 487.6 542.7 536.8 Net Debt/ LTM EBITDA 3) 4.8x 3.0x 3.3x 3.1x Non-recurring impact of "Forward Start" transaction
Adjusted Net Debt 722.2 487.6 542.7 499.6 Adjusted Net Debt/ LTM EBITDA 4.8x 3.0x 3.3x 2.9x
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Net Financial Indebtedness (€m)
(1) FY’15 includes 1m of Revolving Credit Facility,16m of Vendor Loan, and 24m of breakage costs related to the refinancing transaction; H1’15 includes 5m of Revolving Credit Facility and 16m of Vendor Loan (2) Extraordinary write-off of €13.3m in FY’15 and €5.3m in 9M’15 related to the refinancing transaction (3) LTM EBITDA pro-forma including Recus, RL Value and the Creval transaction for the last 12 months
FY 2015
including Creval Partnership for 3 quarters
Leverage
Dividends
Organic Growth
FY 2014 Reported
FY 2014 Proforma
Including Recus & RLValue
Maximize distribution of available cash, to the extent permitted by our financial condition and future investment opportunities, as per board’s programmatic resolution
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EBITDA Leverage & Dividends
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Revenue Growth Corporate and Mktg Solutions behind target EBITDA Growth In line with guidance Net Profit In line with targets Cash Flow In line with targets Leverage Reduce to c. 3.0x by year-end Refinancing New committed facilities in place M&A Unlikely to close another deal in 2015 Guidance for 2015 EBITDA confirmed in range of €170-174m Cerved’s performance YTD in line with most key objectives for 2015
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Source: Bank of Italy 11.3% 12.4% 12.8% 11.7% 10.8% 8.6% 8.1% 6.6%
Key Economic Indicators Cerved Proprietary Data Italian unemployment Italian GDP New lending
% of companies paying over 60 days late versus contractual terms Number of proceedings (seasonally adjusted) and growth rates versus same quarter of previous year
2015 GDP grew +0.8%
versus 2014, first yearly GDP growth since 2011
Strong
decline in unemployment, and healthy increase in new bank lending
Despite being positive,
all macroeconomic indicators remain well below pre-crisis levels
Cerved
proprietary data also reflecting an improved macro
Fewer
late paying companies and bankruptcies reflect the improved health of SMEs in Italy
NPLs
confirm lower growth vs prior years
Growth rate compared to the previous quarter New lending volumes in € billions (quarterly)
Key highlights Late paying companies Bankruptcies NPLs Key highlights
Unemployment as % of total working population Default rate on outstanding loans; Cerved estimates on Bank of Italy data
Source: Osservatorio Cerved
50 100 150 200 2008 2009 2010 2011 2012 2013 2014 2015 5.8% 12.8% 8.6%
Source: Osservatorio Cerved 3.0% 3.5% 3.7%
3.9%
Source: Osservatorio Cerved, Bank of Italy
Q4
Q4 0,0% Q4 0,0%
Q4 0,1% Source: ISTAT, OECD
2012
Q1 Q2 Q3 Q4
YoY
YoY
YoY
Source: ISTAT
Q1 Q2 Q3 Q4
2012 2013
Q1 Q2 Q3 Q4
2014
Q1 Q2 Q3 Q4
2015
Q1 Q2 Q3 Q1 Q2 Q3 Q4
2012 2013
Q1 Q2 Q3 Q4
2014
Q1 Q2 Q3 Q4
2015
Q1 Q2 Q3 Q1 Q2 Q3 Q4
2012 2013
Q1 Q2 Q3 Q4
2014
Q1 Q2 Q3 Q4
2015
Q1 Q2 Q3
2013
Q1 Q2 Q3 Q4
2014
Q1 Q2 Q3 Q4
2015
Q1 Q2 Q3 Q4
YoY +0.8%
2012
Q1 Q2 Q3 Q4
2013
Q1 Q2 Q3 Q4
2014
Q1 Q2 Q3 Q4
2015
Q1 Q2 Q3 Q4
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Full Year 2015 Results
Full Year 2015 Business Review
Investment Case
Appendices
Overview
Operational and Strategic Update for 2015 and Key Actions for 2016
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Business Corporate Credit Information – Corporate Credit Information – Financial Institutions Credit Management Marketing Solutions Governance Mergers & Acquisitions Investor Relations
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2015 represents a year of discontinuity, with a significant investment in the revamp of the sales network
Business Corporate
4.0% 2.4% 5.9% 4.3%
Lost Clients Existing Clients New Clients Y-o-Y Consumption
2015 negatively impacted by decline in lost points, despite positive trends regarding the sale and consumption of prepaid points and services (+7.9% and +4.3%, respectively) Revamp of sales force network well underway: completion expected by June 2016, with full impacts expected by year-end 2016 2016 also expected to benefit from product innovation: recent launch of Cerved Credibility, as well as a new platform for Corporate products and services
Consumption of Credit Information Points & Services: 2015 vs 2014 1) Status Quo Sales Force Revamp
1) Consumption of points and services in 2015 compared to 2014 for credit information products by c. 20k corporate clients covered by the field sales network
Key Initiatives
New Go-to-Market Teleselling for Small Clients Salesforce Reinforcement New CRM Churn Reduction Initiatives
finalised
advanced advanced
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Business Corporate
2015 characterised by positive conditions with limited renewals and no impact from consolidation Bank New Lending from 2008 (€bn) 1) CI Financial Institutions – Revenue Breakdown 2015
1) Source: Bank of Italy
682 572 517 488 463 401 395 451
(20%) (15%) (10%) (5%) 0% 5% 10% 15% 20% 25%
2008 2009 2010 2011 2012 2013 2014 2015 Real Estate Rating & Analytics Business Information
2015 Revenue growth of +2.0% exceeded initial guidance of -1.0% to +1.0% Better than expected results due to a combination of few bank renewals, no impact yet from bank consolidation, new bank lending returning to growth, and most importantly strong results from the real estate appraisals segment Popolari banks currently preparing themselves for consolidation, which is expected to start to materialise in the latter part of 2016
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Business Corporate
Another record year for the Credit Management division with Sales and EBITDA up 40.8% and 74.5%, respectively Revenues Breakdown 2015 Credit Management AuMs
Significant opportunities in 2016 offered by government reforms regarding bankruptcy and foreclosure procedures, together with specific initiatives to reduce bank NPLs Strong focus also on optimising the “small tickets” segment, integrating the operations of Recus (utility and finance company clients) with Finservice (corporate clients) Assets Under Management at EUR 12.5bn at YE 2015, reflecting an outflow of EUR 1.6bn
NPLs and Problematic Credits 1.8 7.8 10.3 14.1 1.6 12.5 2012 2013 2014 FY'15 (ex.
Outflows FY'15 Banks & Investors Utilities & Financials Corporates Legal Services Re- marketing
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Business Corporate
8.9 9.9 12.8 14.7 13.8 3.1 3.5 4.7 6.8 5.9
2011 2012 2013 2014 2015
Revenues Breakdown 2015 Revenues and EBITDA (€m) 2015 was a lacklustre year for the Marketing Solutions division, despite continuing product innovation
Despite the positive launch of the Marketing+ platform, 2015 Revenues and EBITDA declined vs the prior year, due to commercial issues and revenue recognition phasing 2015 saw a solid increase in marketing platforms (eg. Marketing+) and database- derived products, at the expense of projects on industry and competitor analysis 2016 to continue this trend, and also to focus on improving the commercial synergies between the corporate and marketing solutions field sales forces
Database & Marketing Platforms Ad-Hoc Projects Industrial and Competitor Analysis
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Corporate Business
Continue to complement organic growth with acquisitions in core and adjacent markets in Italy
2015 deals were the Creval transaction (valued €21.7m) and a further stake in SpazioDati (€1m capital increase to reach 43%) 2016 has already seen the acquisition of a further 11% stake (reaching 91%) in the holding company of the Credit Management activities Currently working on a rich pipeline of small, bolt-on transactions in all key business areas in Italy A few deals at a very advanced stage, with Closing expected in the short term
Recus SpA 81% 19.0m RLValue Srl 100% 1.4m Creval Partnership 100% 21.7m SpazioDati Srl 43% 2.3m M&A Since IPO in June 2014 Illustrative Targets
Company Stake % Investment CI BI CM Adj. MS Advanced Preliminary Status
More Less Effort
M&A Effort and Status
2015 was a very busy year also considering CVC’s full exit via 3 ABBs, increasing Cerved’s free float from 44% to 100% and significantly widening its institutional shareholder base IR activity for 2016 focussed on further increasing analyst coverage (currently 11) and attracting new investors, with the objective of increasing average daily volumes In line with 2015 we have planned a rich schedule of conferences and roadshows, together with the Investor Day on May 10th in London
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Corporate Business
Marked effort to increase liquidity and share price, in line with Cerved’s status as public company Tentative Agenda for 2016 Cerved Share Price evolution in 2015
Mar 23 Equity Conference (HSBC) Paris May 10 Investor Day London May 11 Business Services Conference (JPM) London May 18 Italy Conference (DB) London Jun 8 Italian Equity Conference (Kepler) Milan Jun 22 CEO Conference (Mediobanca) Milan Jun 28 European Business Services (GS) London Sep 8 Equity Conference (HSBC) Frankfurt Dec 6 Mid Cap Conference (Berenberg) Pennyhill
0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 80% 90% 100% 110% 120% 130% 140% 150% 160% AVG NOSH (monthly, k) CERVED FTSE Mid-Cap
AGM/EGM on 14 December 2015 aligned Cerved to international best practice in key areas
Corporate Business
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Appointment of the new Board of Directors
A new Board of Directors will be voted at the AGM to be held on 29 April 2016 Total board members to remain at 11, of which a maximum of 2 from minority slates The incumbent board will propose its own slate, to be published 30 days pre-AGM
Authorisation to issue shares for acquisitions
Enabling resolution for the BoD to issue shares for a maximum of 10% of existing shares, without pre-emption rights, in order to maintain leverage and dividend targets
Long-term Incentive Plan (LTIP)
Performance share plan, 3 year vesting, maximum dilution of 1.5% dilution up to 2021:
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Full Year 2015 Results
Investment Case
Appendices
Overview
Full Year 2015 Business Review
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Mission-critical for the majority of corporates At the core of the Italian economy supporting c.€1.5trn credit positions
700 1,455 390 365
Stock of monitored lending New lending Commercial credit Total credit supported by Cerved Credit positions supported by Cerved Information (€bn)
Monitoring
Covering the full spectrum of the credit value chain
Recovery Underwriting Origination
c.700 c.31.200 Credit Information client base
Financial insitutions Corporates
Credit management Credit Information Marketing solutions Credit management Decision analytics and Monitoring Credit limit sizing
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2% 42%
290 (+3.6%) Business Information 627 (+3.9%) 721 (+8.5%)
Cerved Position and
Market Share in 2013 359 (-4.3%)
4.2% 42.7% 7.3%1)
Consumer 321 Corporates 305 €13.8m 4% of Group (11.7% CAGR) €142.6m 40% of Group (+6.3% CAGR) €75.0m 21% of Group (+57.7% CAGR) €124.5m 35% of Group (-2.0% CAGR)
No.1
No.1
Market
2013 Data (€m) (CAGR11-13)
Cerved
2015 Revenues1) (CAGR11-15) NPLs 502 Corporate receivables 219 Business Information 120
Rating & Analytics 39
Real Estate 97 Consumer Information 103
Credit Information Credit Management Marketing Solutions
Source: PwC 1) Preliminary figures 2) No. 1 player In the non-captive market, considering pro-forma revenues in 2013 which include Recus and Tarida
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Data sourcing Data processing Products Sales
Investment of c.€40m
p.a.
16mm companies
and 20mm company- related individuals for >40 years
Mix of proprietary,
unofficial and official information making it difficult to replicate
More than 450 FTEs
who process, analyse and check the data
More than 200 FTEs in
the IT department: almost all of the products are online
Broadest product
range for corporates and financial institutions: c.30 families and c.180 individual products
More than 30 FTEs in
the marketing department
National sales network
− More than 300 FTEs for corporates − Around 45 FTEs for financial institutions
Cerved revenue Breakdown 2014
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RMS 2013 (1) Cerved CAGR 11-14 Cerved CAGR 11-13 Market CAGR 11-13
Source: Company information, PwC (1) Relative Market Share: Cerved’s revenue divided by revenue of No. 2 market player
Credit Information
1.6x 2.4% 3.6% (1.0%)
€649m
Credit Information 80%
Market size and Cerved’s market share in Credit Information 2014
41% market share
Crif Infocamere Ribes Assicom Visura REAG 4 Prometeia Wise 0% 10% 20% 30% 40% 50% 60% 0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 2.00 EBITDA Margin % Relative Market Share in Credit Information (RMS)(1)
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Sources: Company information, AIDA, PwC Estimates (1) RMS = Competitor revenue / Cerved’s revenue; except for Cerved’s RMS which is defined as Cerved’s revenue divided by the revenue of the No. 2 market player
Scale vs. profitability – Cerved vs. competitors 2013A
A bubble of this size represents €30 million in revenue
29.7% 34.6% 35.1% 48.3%
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EBITDA margin 2014A Operating cash flow margin 2014A(1)
Source: Company information for Cerved and comparables (1) Defined as (adj. EBITDA – Capex)/Revenue (2) LTM as of September 2014
26.5% 31.0% 27.0% 39.9%
(2) (2)
255 265 270 275 290 123 126 123 119 120 123 134 118 98 97 41 44 41 40 39 123 115 110 102 103
665 684 662 634 649
2009 2010 2011 2012 2013
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Credit Information Market (€m)
(6,1)% (1,0)% (7,4)% (1,0)% 2,6%
(0.6)%
Source: IMF, AIFI (Associazione Italiana Private Equity e Venture Capital), AIDA, Financial Reports, PwC Estimates
Consumer Information Banks Rating & Scoring Banks Real Estate Banks Business Information Banks Business Information Corporate
152 164 180 192 219 256 276 311 323 359 100 107 121 133 142
508 547 612 648 721
2009 2010 2011 2012 2013
+9.1%
10.1% 8.0% 8.1%
Bank NPLs Consumer Finance NPLs Corporate NPLs CAGR ‘09-’13 CAGR ‘09-’13
Credit Management Market (€m)
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Increasing need for credit checks Increasing receivable volumes Increasing new lending and stock of loans Increasing economic activity Higher scrutiny and monitoring Increasing need for more frequent checks and credit information
Increasing counterparty risk Corporates Financial institutions Corporates Financial institutions
Resiliency Cash flow Growth
Increasing SME Credit Information penetration expected to continue
1,185 510 437 395 394
Large SME market
Thousands of SMEs (10-250 FTEs) 2013A
Long enforcement times
Average days to enforce a contract 2014A
34% 34% 35% 35% 37% 38% 40% 41% 43% 44% 08A 09A 10A 11A 12A 13E 14E 15E 16E 17E
(1) For companies with more than €1mm in revenue (2) For Italy, penetration represents the weighted average of: 25/35% penetration for ~170k small companies (10-49 FTEs); 60/70% penetration for ~20k medium companies (50-200 FTEs); 70/80% penetration for ~4k large companies (>200 FTEs)
Credit Information penetration 2012A (%) Credit Information penetration 2008A-17E(%)
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Italian SMEs usage of Credit Information underpenetrated vs. UK
Resiliency Cash flow Growth
78%(1) 37%(2)
Source: World Bank Source: Annual Report of European SMEs 2014 – European Commission (data on 2013)
191 186 158 123 392
Source: Eurostat, Cerved Group, Interviews to industry experts Source: Eurostat, Cerved Group, Interviews to industry experts
50,000 100,000 150,000 200,000 250,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
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12.5 10.3 7.8 1.8 1.3 0.5 2015 2014 2013 2012 2011 2010
Cerved NPLs
Captive portfolio purchased prior to 2009 €0.8bn SPV corporate /SME €4.3bn on 3 SPVs €1.9bn consumer finance €0.9bn SPV consumer loan
Market Growth
Resiliency Cash flow Growth
(1)1) Excludes Finservice which operates on the collection of NPLs for corporates. (2)2) As of December 31st, 2015
€0.5bn various banks contracts €2.1bn from Creval agreement
Cerved Growth
Pre-crisis level of €40-50bn Current level
€197bn, expected to decrease to €107bn by 2020, thanks to positive impact of reforms and GACS #1 Independent Player Growth from i) NPL growth and ii) increased outsourcing/NPLs disposals acted by banks
Source: Company information
NPLs Evolution in Italy Cerved NPLs
Forecasts
Shorter lenghts
Inertial scenario (7.3 years) Shorter lenghts of procedure + full effectiveness of GACS system
€216 bn €175 bn €107 bn
Bad debt stock (€m)
Increasing NPL volumes Low liquidity, low collections, higher
fees
Decreasing NPL prices, outsourcing
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Negative economic cycle Opportunistically intake massive portfolios Maximize collections Positive economic cycle
Increasing liquidity Refinancing options for debt holders Increasing collections
Resiliency Cash flow Growth
Illustrative impact of economic cycle
NPL stock Collection rates Time
Consolidation of core markets
Deal Revenue
€28mm Dec 2003 €6mm Dec 2007 €67mm Dec 2008 €16mm Dec 2011 €10mm Mar 2013 n.m. Start-up €1mm Dec 2010
Data Services
Cerved M&A track record 2004-2015
2004 2005 2008
€14mm Mar 2012
Information Services
2012 2011 2013 2014
Illustrative M&A pipeline for 2016
Resiliency Cash flow Growth
Entry into adjacent markets
€0.5 Dec 2013 €15.7mm Dec 2014 €8-9m in FY2015 39
CI BI CM Adj. MS
Advanced Preliminary Status
More Less Effort
M&A Effort and Status
2015
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Resiliency Cash flow Growth
Illustrative Free Cash Flow Bridge excluding non-recurring items 178 83 32 16 5 43 Consensus 2016 EBITDA Consensus 2016 Capex Interest Expenses NWC and Other Cash Taxes @ 34%* Free Cash Flow
* Estimated value for the long term using an overall 34% tax rate; cash taxes in 2016 expected to be lower due to non-recurring timing effects
Previously €39m
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Full Year 2015 Results
Appendices
Investment Case
Overview
Full Year 2015 Business Review
42
Please note that Cerved Information Solutions SpA (“CIS SpA”) was incorporated on 14 March 2014 and holds a 100% stake in Cerved Group SpA (“CG SpA”) since 28 March 2014 In order to provide complete financial information to reflect CIS SpA consolidated business operations, the financial data referred to FY2014 and FY2013 are represented via the following accounts’ aggregation respectively: (i.) CG SpA from 1 January to 31 March 2014 and CIS SpA from 14 March to 31 December 2014, and (ii.) Cerved Holding SpA from 1 January to 27 February 2013 and CG SpA from 9 January to 31 December 2013 On a consolidated basis, there are minor differences between the accounts of CIS SpA and CG SpA, mainly related to costs connected to CIS SpA’s status as listed company, and costs incurred to carry out the IPO of CIS SpA (in 2014 results)
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Quarterly Analysis - Revenues (€m) Quarterly Analysis - EBITDA(€m) 160.1 170.8 FY
2014 2015
38.1 41.3 33.1 47.6 39.4 45.0 35.7 50.7 Q1 Q2 Q3 Q4
+6.7% / +5.2% +9.1%/ 7.4% +3.6% / +1.1% +7.7% / +5.9% +6.4% / +6.0%
331.3 353.5 FY
2014 2015
79.3 84.7 71.5 95.8 83.0 94.6 78.3 97.6 Q1 Q2 Q3 Q4
Total Growth % / Organic Growth % +11.6% / +4.6% % / % +6.7% / +1.6% +4.7% / (0.7)% +9.5% / +2.3% +1.9% / +0.2%
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66.4 69.2 57.9 71.3 264.7 66.3 69.7 59.1 72.1 267.2 Rev CI - Q1 Rev CI - Q2 Rev CI - Q3 Rev CI - Q4 Rev CI - FY
2014 2015
Credit Information – Financial Institutions – Rev (€m) Credit Information – Corporate – Rev (€m) 35.2 37.4 30.4 39.1 142.1 36.0 37.4 30.6 41.5 145.4 EBITDA - Q1 EBITDA - Q2 EBITDA - Q3 EBITDA - Q4 EBITDA - FY
2014 2015
Credit Information – Revenues (€m)
(0.1)% 2.1%
Credit Information – EBITDA (€m)
2.2% (0.2)% 0.8% 0.9% 2.3% 0.4% 6.2% 1.0%
30.3 31.5 28.6 31.6 122.0 31.1 31.6 29.5 32.3 124.5
Rev- Q1 Rev - Q2 Rev - Q3 Rev - Q4 Rev - FY
3.1% 2.0% 1.3% (2.4%) 0.2% 2.6% 1.2% 2.3% (0.1)% (0.1)%
36.1 37.7 29.2 39.8 142.7 35.2 38.1 29.6 39.7 142.6
Rev- Q1 Rev - Q2 Rev - Q3 Rev - Q4 Rev - FY
45
1.0 1.2 0.9 3.6 6.8 1.0 1.4 0.9 2.6 5.9 EBITDA - Q1 EBITDA - Q2 EBITDA - Q3 EBITDA - Q4 EBITDA - FY
2014 2015
1.8 2.6 1.8 5.0 11.2 2.4 6.3 4.2 6.6 19.5 EBITDA - Q1 EBITDA - Q2 EBITDA - Q3 EBITDA - Q4 EBITDA - FY
2014 2015
Marketing Solutions – Revenues and EBITDA (€m) 10.3 12.7 11.2 19.2 53.3 14.1 21.9 17.2 21.7 75.0 Rev - Q1 Rev - Q2 Rev - Q3 Rev - Q4 Rev - FY Credit Management – Revenues and EBITDA (€m) 2.8 3.2 2.8 6.0 14.7 2.9 3.4 2.8 4.7 13.8 Rev - Q1 Rev - Q2 Rev - Q3 Rev - Q4 Rev - FY
37.3% 73.3% 54.5% 34.2% 4.8% 6.0% 3.4% 142.0% 74.5% 12.2% 4.2% 131.7% 40.8% (22.2%) (6.2%) (28.0%) (12.6%) (2.2%) 13.1% 33.1%
46
Source: Company Information, 2013 as “Added data”, 2014 as “Aggregated data”; for further details refer to CIS S.p.A. Quarterly and Annual Reports
€m 2012 2013 2014 2015 Total Revenues (including other income) 290,6 313,7 331,6 353,7 Cost of raw material and other materials (0,7) (2,8) (7,0) (8,3) Cost of Services (76,3) (77,6) (76,3) (78,9) Personnel costs (67,2) (67,2) (73,7) (81,5) Other operating costs (7,4) (8,1) (8,2) (8,5) Impairment of receivables and other provisions (7,1) (6,4) (6,3) (5,7) EBITDA 144,7 151,5 160,1 170,8 Depreciation & amortization (16,4) (23,3) (25,1) (28,5) EBITA 128,2 128,2 135,0 142,3 PPA Amortization (53,1) (39,4) (42,9) (45,8) Non-recurring income and expenses (7,4) (4,5) (3,8) EBIT 75,5 81,4 87,6 92,8 PBT 20,5 22,6 24,0 (1,7) Income tax expenses (15,4) (14,7) (12,0) 5,3 Reported Net Income 5,1 8,0 12,0 3,6 Adjusted Net Income 62,6 43,0 55,0 68,5
0,8 1,1 1,4 2,5
47
Source: Company Information, 2013 as “Added data”, 2014 as “Aggregated data”; for further details refer to CIS S.p.A. Quarterly and Annual Reports (1) Non cash item (2) Net of capitalized financing fees
€m 2012 2013 2014 2015 Intangible assets 248,7 501,1 472,4 459,7 Goodwill 275,8 708,6 718,8 718,8 Tangible assets 16,5 16,6 17,3 16,4 Financial assets 15,0 14,9 14,9 8,3 Fixed assets 556,1 1.241,3 1.223,4 1.203,1 Inventories 0,1 1,3 0,7 2,0 Trade receivables 119,5 151,5 145,3 139,8 Trade payables (25,4) (30,1) (32,4) (30,0) Deferred revenues (82,5) (83,1) (73,3) (74,0) Net working capital 11,6 39,6 40,4 37,8 Other receivables 15,4 5,8 7,1 7,6 Other payables (53,8) (20,4) (26,1) (32,2) Net corporate income tax items (3,0) (27,2) (18,8) (1,0) Employees Leaving Indemnity (9,6) (10,9) (13,1) (12,5) Provisions (10,6) (15,0) (11,1) (8,5) Deferred taxes (1) (60,4) (119,8) (109,1) (88,7) Net Invested Capital 445,7 1.093,3 1.092,7 1.105,6 IFRS Net Debt (2) 280,6 722,2 487,6 536,8 Group Equity 165,1 371,1 605,1 568,8 Total Sources 445,7 1.093,3 1.092,7 1.105,6
48
Source: Company Information, 2013 as “Added data”, 2014 as “Aggregated data”; for further details refer to CIS S.p.A. Quarterly and Annual Reports
€m 2012 2013 2014 2015 EBITDA 144,7 151,5 160,1 170,8 Net Capex (25,7) (26,6) (28,2) (31,6) EBITDA-Capex 119,0 125,0 131,9 139,1 as % of EBITDA 82% 82% 82% 81% Cash change in Net Working Capital (6,1) (24,7) 8,2 3,0 Change in other assets / liabilities (1,9) 7,3 (13,9) (6,0) Operating Cash Flow 111,1 107,5 126,2 136,1 Interests paid (6,9) (29,1) (51,7) (40,3) Cash taxes (21,3) (18,4) (24,1) (40,2) Non recurring items (3,9) 0,1 (3,4) (3,2) Cash Flow (before debt and equity movements) 76,8 60,1 46,9 52,3 Net Dividends (13,1) (0,1) 1,0 (40,1) Acquisitions / deferred payments / earnout (3,4) (509,4) (20,9) (23,5) IPO Capital Increase (net of IPO costs)
(1,1) Debt drawdown / (repayment) (48,0) 482,8 (254,5)
12,3 33,5 (7,5) (12,3)
49
Source: Company Information, 2013 as “Added data”, 2014 as “Aggregated data”; for further details refer to CIS S.p.A. Quarterly and Annual Reports Note: PPA Amortization refers to business aggregation processes
€m 2012 2013 2014 2015 Reported Net Income 5,1 8,0 12,0 3,6 Non recurring income and expenses (2,5) 7,4 4,5 3,8 Shareholders Fee 2,2
3,2 4,1 3,4 2,9 Earn-out 26,8
53,1 39,4 42,9 45,8 Financial charges non-recurring
52,4 IRS termination
(25,3) (15,8) (18,9) (28,4) Adjustments 57,5 35,1 43,0 76,4 Impact of IRES change treatment
Adjusted Net Income 62,6 43,0 55,0 68,5
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