Nexi Q1 2019 Result lts Presentation ay 10 th th , 2019 May 1 Di - - PowerPoint PPT Presentation

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Nexi Q1 2019 Result lts Presentation ay 10 th th , 2019 May 1 Di - - PowerPoint PPT Presentation

Nexi Q1 2019 Result lts Presentation ay 10 th th , 2019 May 1 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


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Nexi

May ay 10th

th, 2019

Q1 2019 Result lts Presentation

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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

  • therwise, 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
  • ffer 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 or subscribe for securities in the United States or the Other Countries.

  • Pursuant the consolidated law on financial intermediation of 24 February 1998 (article 154-bis, paragraph 2) Enrico Marchini, in his capacity as manager responsible for the preparation
  • f the Company’s financial reports declares that the accounting information contained in this Presentation reflects Nexi Group’s documented results, financial accounts and accounting

records.

  • 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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Executive Su Summary

Q1 results highlights

St Strong foc

  • cus on
  • n fin

financial de deli livery ry

  • EBIT

EBITDA +21 21.0% YoY

  • Y gr

growt wth, at 110.6 €M in Q1’2019

  • Revenues +5.1% YoY reported growth at 226.5 €M in Q1’2019,

+6.8% YoY

  • Y und

underly lyin ing gr growt wth excluding run-off of zero-margin hardware reselling contracts from acquisitions

Co Continued pr progress on

  • n key bu

busin iness initiatives

  • Merchant Servic

ices and Solu lutions (47% of Revenues): good progress on SME Smart POS proposition, large merchants omni-channel and E-commerce

  • Cards and Dig

igit ital Payments (41% of Revenues): continuous progress on international debit, acceleration on YAP millennials payments app and CVM up/cross selling activities

  • Dig

igit ital Bankin ing Solu lutio ions (12% of Revenues): new propositions rollout (Digital Corporate Banking, ATM, Open Banking) supporting underlying growth from H2

  • Co

Cost initiatives and integration synergies contributing to -6.5% YoY reported costs reduction,

  • 4.0% YoY
  • Y excluding run-off of zero-margin hardware reselling contracts, despite continued investments
  • Non-recurring costs below EBITDA ~-60

60% YoY

  • Y
  • IT strategy delivery progressing according to plan

Ov Overall Q1 res esults well ell on

  • n track to

to de deliv liver Fin Financia ial Gu Guid idance

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Ne Nexi: i: The le lead adin ing Pay ayTech with ith fu full ll co coverage of

  • f th

the pay ayments eco cosystem

Source: Company information. (1) 2018 data. (2) Merchant Acquiring and Card Issuing data refer to International Schemes only 2018; Digital Banking solutions shares are based on 2018 data (excl. Clearing based on 2017).

Mer erchant Ser Services s & Sol Solutio ions Mer erchant Ser Services s & Solu Solutio ions Mer erchant Ser Services s & Solu Solutio ions Mer erchant Ser Services s & Solu Solutio ions 41m 41m

Payment Cards Managed

€197 197bn

Value of Transactions

Con

  • nsumer Cards

Commerci cial Cards Mo Mobile Pa Payments Pa Payment Ap Apps

Lead Leading the he evolu

  • lution towards

ds com

  • mpl

plete e dig digital alisa sation

  • n of
  • f pa

paym yments

Car Cards an and Dig Digital Payments 2.4 2.4bn

Number of Transactions Bus usines iness s Act Activ ivitie ies Sc Scale ale 1 Clien lients s Ser Served ved

Di Digital l Ban Banking Solu Solutions s 936m 936m

Number of Clearing Transactions

13.4 13.4k

ATMs managed

Ins nstant Pa Payments ts AT ATMs PS PSD2 (Gateway) & Ope pen Banking Dig Digita tal Cor

  • rporate

Banking

Dri Driving adop

  • ption
  • n of
  • f advan

vanced ed banking so solut lutions ns an and d de devel veloping ng Open pen Ban anking

Mer erchant Ser Services s & Solu Solutions a ~89 ~890k

Merchants served

€249 249bn

Value of Transactions

e-Co Commerce ce & Inv nvisible Pa Payments Dat Data-enabled pr prod

  • ducts

Large mer merch chants

  • m
  • mni-ch

channel SME solu

  • lutions

One-stop

  • p solu
  • lution provider

for

  • r mer

erchants s of

  • f all

all cat ategories s an and d siz size

3.2 3.2bn

Number of Transactions Com

  • mprehensive port
  • rtfolio, lea

leading towards com

  • mplete dig

digit italisa sation of

  • f pa

paym yments

~42 ~420k

Corporate Banking Workstations

~70 ~70% ~60 ~60% 16 16-70% 70%

Sh Share are of

  • f

Ser Served ved Market 2 ~4 ~40% ~1 ~10% ~50% 50%

% of Group Revenues

~30m Cardholders >8 >800 00k SM SMEs Es 150 Ban Banks Key y Figures Figures 20 2018 18 PF

Revenues: 931 931 €M (+ (+ 6% % YoY

  • Y)

EB EBITDA: 424 424 €M (+ (+ 15% 15% YoY

  • Y)
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Fin Financial l guid idance

Source: Management information Notes: (1) Run-off of zero margin HW reselling contracts of acquired businesses (2) Non-recurring items affecting reported EBITDA in 2019, excluding extraordinary IPO/refinancing expenses

Ne Net Revenues EBIT EBITDA

  • 5-7%

7% ann annual ne net revenue gr growth over medium term

  • 2019 growth at lower end of range due to one-time effect of selected contracts run-offs1; growth after 2019 at higher end of the range

Cap Capex Cap Capit ital l Str Structure & Cap Capit ital l Al Allocation

  • 13

13-16 16% ann annual EBI EBITDA gr growth over medium term

  • 2019

2019 EBI EBITDA of

  • f ~€49

490 0 mill illion, implying YoY growth at the up upper en end of

  • f ran

ange

  • Continued strong op
  • perating le

leverage

  • 8-10

10% or

  • rdinary cap

apex as as % of

  • f ne

net revenues over long term

  • Total capex in 2019 (including ordinary and transformation capex) at 16-17% of net revenues
  • Tot
  • tal cap

apex to

  • trend towards or
  • rdinary cap

apex as as % of

  • f ne

net revenues s over medium to long term

  • Organic de

de-leverag aging with tar arget ne net de debt of

  • f ~2

~2.0 .0-2.5x 5x EBI EBITDA over med edium to lo long term erm

  • Invest in

in or

  • rganic gr

growth; potentially consider accretive and strategically compelling M&A

  • Progress

ssive moderate di dividend pol policy, targeting pay-out ratio of 20-30% of distributable profits in medium to long term

Non Non-recurrin ing g Items

  • >6

>60% 0% red eduction in in no non-recurring g it items s in in 2019 20192

  • Rapid further decrease of non-recurring items affecting reported EBITDA thereafter
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Q1 2019 Key-Financials

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Healt lthy re revenue growth an and str strong EBIT ITDA performance

Net Revenues (€M) EBITDA (€M) Margin %

42% 49%

Q1 ’19 Q1 ’181

215.4 .4 22 226.5 6.5

Q1 ’181

11 110.6 0.6

Q1 ’19

91 91.4 .4 21.0% .0% 6.8% 6.8%

Underlying growth (excl. run-off of zero-margin HW reselling contracts from acquisitions) 5.1%

Source: Company information Note: (1) Proforma for Group reorganization and OASI / Bassilichi not core disposal

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Merchant Se Services & So Solu lutions: con contin inued growth with ith ke key in initi itiatives on

  • n tra

track

Merchant Services & Solutions

Source: Company information Note: Including other services such as Helpline. (1) 2018 pro-forma figures. (2) BU contribution to total Q1 Group’s revenues.

47% 47%2 Q1 ’18 Q1 ’19 57 57.7 .7 55 55.0 .0 4.8% 4.8% 78 789.8 9.8 Q1 ’18 Q1 ’19 71 711.4 1.4 11 11.0% .0% 10 100.1 0.1 Q1 ’18 1 Q1 ’19 10 106.1 6.1 YoY growth negatively affected by fewer working days in the quarter Value of managed transactions sustained by international schemes (+12% YoY)

Value of Managed Transactions (€B) Net Revenues (€M) Managed Transactions (#M) Key Highlights

E-commerce growth accelerating (+17.5% YoY transactions value) Smart POS/SME proposition progressing well; 4 new banks enrolled and launch

  • f Smart POS mini

Growing pipeline for Large Merchant innovative solutions (omni-channel, invisible payments, Smart POS) 8.1% 8.1%

Underlying growth (excl. run-off

  • f zero-margin HW

reselling contracts from acquisitions)

6.0%

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Card ards & Di Digital l Pay ayments: con contin inued growth with ith ke key in initi itiatives on

  • n tra

track

Cards & Digital Payments

Source: Company information Note: (1) 2018 pro-forma figures. (2) BU contribution to total Q1 Group’s revenues.

41% 41%2 44.7 .7 Q1 ’19 Q1 ’18 46 46.8 .8 4.7% 4.7%

Value of Managed Transactions (€B)

537.7 .7 Q1 ’18 Q1 ’19 58 587.7 7.7 9.3% 9.3%

Net Revenues (€M)

YoY growth negatively affected by fewer working days in the quarter Sustained growth of volumes on international schemes (+10% YoY) 86.0 .0 Q1 ’18 1 Q1 ’19 93 93.0 .0 8.1% 8.1%

Managed Transactions (#M) Key Highlights

Strong acceleration on YAP, with 430K enrolled clients YTD Contribution to growth from cross- selling, engagement and usage stimulation initiatives (e.g. easy shopping)

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Di Digital l Ban ankin ing So Solu lutions: s: cor core busi siness su substantia ially ly flat flat, ke key in initia itiatives on

  • n tra

track

Digital Banking Solutions

12% 12%2

Source: Company information Note: (1) 2018 pro-forma figures. (2) BU contribution to total Q1 Group’s revenues. (3) Net of Venete banks migration

Q1 ’18 1 Q1 ’19 29.3 .3 27 27.4 .4

Net Revenues (€M)

New Digital Corporate Banking proposition launched, with two major banks starting roll-out New ATM proposition starting roll-out. Accelerating shift from traditional to advanced ATMs Nexi Open Banking Gateway in pilot phase. 200+ banks / financial institutions signed (over 75% of market)

Key Highlights

  • 1.7%

1.7%

  • 6.6%

Underlying performance (excl. run-off

  • f zero-margin HW

reselling contracts from acquisitions)

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Cos

  • sts: str

strong re reduction su supported by y co cost in initi itiatives an and in inte tegration sy synergie ies

Q1 ’19

38.7 (31%) 41.7 (36%) 85.3 (69%)

Q1 ’181

74.2 (64%) 12 124.0 4.0 11 115.9 5.9

Personnel Costs Operating Costs

Continuous investment in development initiatives and people capabilities

Source: Company information Note: (1) 2018 pro-forma figures.

+7.7%

  • 13.0%

Strong decrease in operating costs driven by cost initiatives and integration of acquired businesses (IFRS 16 impact ~2.5 €M) Non-recurring items below EBITDA in the quarter ca. 9 €M (~-60% YoY)

Total Costs (€M) Key Highlights

Early results of IT strategy implementation

  • 4.0%

.0%

  • 6.5%

Underlying performance (excl. run-off

  • f zero-margin HW

reselling contracts from acquisitions)

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Update on

  • n cap

apit ital l str tructure an and le leverage

Source: Company information Note: (1) 84€M in Visa preferred shares held by the Company (net of the related hedging costs), 18€M related to VISA Europe deferred compensation and 9€M in earn-out linked to the sale of Oasi Spa

Net Financial Debt (€M) Key Highlights

LTM 1Q 1Q 20 2019 19

  • Pos
  • st IPO

3.5x

LTM 1Q 1Q 20 2019 19

  • Rep

eported 20 2018 18 YE YE 20 2019 19 YE YE

  • Exp

Expected

5.8x 4.9x <3.2x 424 424 443 443 443 443 EBITDA (€M) Net Financial Debt / EBITDA (€M)

Senior Secured Credit Facilities and proceeds from the IPO to refinance: i. Outstanding Senior Secured FRNs (1,375€M) ii. Private Notes (400€M)

490 490

YE YE 20 2018 18 Q1 Q1 20 2019 19 Q1 Q1 2019 – Pos

  • st

IPO/ Refi financing Gross s Fin Financial Deb Debt 2,60 2,605 2,65 2,656 1,84 1,847 Cas ash & Cas ash Equ quival alents1 (15 (151) 1) (47 (471) 1) (30 (308) 8) Net Fin Financial Deb Debt 2,45 2,454 2,18 2,185 1,53 1,538 Rating update: i. S&P’s upgraded to BB- with Positive outlook ii. Moody’s upgraded to Ba3 with Positive

  • utlook

Refinancing agreement includes: i. 1,000 €M senior secured Term Loan facility ii. New 350 €M multi-currency RCF 5 year tenor and weighted average cost of debt reduction of ca. 70 bps p.a. (from ~3.8% to ~ 3.1%)

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Appendix: P&L

(in €M) PF 2018 PF Q1 2018

  • Act. Q1 2019

Δ% PF Q1’18-'191 Δ% PF Q1’18-

  • Act. Q1'19

Merchant Services & Solutions 448.2 100.1 106.1 8.1% 6.0% Cards & Digital Payments 360.6 86.0 93.0 8.1% 8.1% Digital Banking Solutions 121.7 29.3 27.4

  • 1.7%
  • 6.6%

Operating Revenue 930.6 215.4 226.5 6.8% 5.1% Personnel Costs

  • 149.9
  • 38.7
  • 41.7

7.7% 7.7% Operating Costs

  • 356.5
  • 85.3
  • 74.2
  • 9.5%
  • 13.0%

Total Costs

  • 506.4
  • 124.0
  • 115.9
  • 4.0%
  • 6.5%

EBITDA 424.1 91.4 110.6 21.0% 21.0%

Note: (1) Underlying growth excluding run-off of zero-margin HW reselling contracts from acquisitions

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Thank You for Your Attention

Investor Relations

investor.relations@nexi.it

Stefania Mantegazza

stefania.mantegazza@nexi.it