Nexi S.p.a. · MIL:NEXI

Nexi — Barclays European Payments & Fintech Conference (September 2020)

32 slides from Nexi's conference presentation, Sep 21, 2020

  1. Slide 1: Barclays European Payments & Fintech Conference 1H 2020 Results

    Barclays European Payments & Fintech Conference 1H 2020 Results September 21st, 2020 1

  2. Slide 2: Disclaimer

    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,

  3. Slide 3: Executive Summary: Covid-19 update

    Executive Summary Covid-19 update  Covid-19 health situation in Italy currently under control, with around 200-300 new positives per day and less than 50 people still in intensive care across the Country  After ~2 months of lockdown in Italy, one of the strictest in Western Countries, Phase 3 star

  4. Slide 4: Executive Summary: 1H20 results highlights

    Executive Summary 1H20 results highlights  ISP merchant book deal successfully completed on June 30th  EBITDA at 261.8 €M, -3.9% y/y including organic contribution from ISP merchant acquiring book. On a standalone basis EBITDA at 214.2 €M, -8.0% y/y  Revenues at 478.7 €M, -6.3% y/y including orga

  5. Slide 5: Covid-19 emergency now under control; Phase 3 started in June

    Covid-19 emergency now under control. Phase 3 started in June with gradual return to “normality” Evolution of Active Positives and Intensive Care Cases in Italy “Phase 2 and 3” Key Dates “Cura Italia” “Liquidità” Start of “Rilancio” Start of Government Government “Phase 2” Government “Phase 3” 18-Ma

  6. Slide 6: Transaction volumes recovering after the easing of lockdown measures

    Transaction volumes recovering after the easing of lockdown measures Updated as of Sep 13th 2020 Total Acquiring and Issuing volumes - 7-days rolling % change Y/Y 9.7% 10.0% 7.5% 6.3% 6.6% 6.7% 3.5% 5.4% 0.9% 1.9% -2.2% -2.7% -2.5% 0.0% -2.8% 1.0% -4.4% -4.1% -7.6% -9.2% -9.0% -8.5% -3.5% -10.4% -13

  7. Slide 7: Acquiring volumes recovery driven by Italian Cards

    Acquiring volumes recovery driven by Italian Cards, now back to pre-Covid levels; Foreign Cards still negative but recovering Updated as of Sep 13th 2020 Acquiring volumes – Italian Cards vs Foreign Cards – Y/Y trend Italian Cards Foreign Cards Total 18% 20 15% 11% 10% 7% 6% 6% 6% 5% 10 2% 2% 1% 1%

  8. Slide 8: Volume recovery across categories starting from May

    Volume recovery across categories starting from May after the easing of lockdown measures Updated as of Sep 13th 2020 Acquiring volumes by category1 Product category % change Y/Y Jan + Feb March April May June July August LWR2 44% for 37% for Basic consumption 15% 13% 11% 13% 14% 12% 13% 11% +12% E-

  9. Slide 9: SME volume share back to pre-Covid situation

    SME volume share back to pre-Covid situation, broadly in line with 2019 Acquiring volumes – Large merchants vs SME Large merchants SME Physical volumes 48% 45% 44% 62% 47% 45% 50% 52% 55% 56% 63% 38% Pre-Covid Lockdown Last week Corresponding rolling1 2019 week1 E-commerce volumes 53% 55% 50% 37% 72

  10. Slide 10: Progressive recovery of transacting merchants across all categories

    Progressive recovery of transacting merchants across all categories, now similar to 2019 levels Updated as of Sep 13th 2020 Weekly transacting merchants – Y/Y trend Basic consumption Generic/discretionary consumption High-impact consumption Total 30 23% 17% 20 14% 9% 7% 9% 9% 9% 10% 10% 11% 10% 9% 1

  11. Slide 11: Consumer habits: acceleration of digital payments

    Consumer habits: acceleration of digital payments in less affected categories Updated as of Aug 30th 2020 Acceleration in digital payments volumes: Digital payments volumes for Italian consumer cards specific industries trend (y/y last four weeks rolling)1 net of high impact consumption2 y/y Pre-Cov

  12. Slide 12: 1H Business update: commercial activities back to more normal levels

    1H Business update: commercial activities back to more normal levels with Covid-19 related accelerations Merchant Services & Solutions Cards & Digital Payments Digital Banking Solutions  Commercial activity going back to “normal” pre-  Commercial activities from banks gradually  Progress on advan

  13. Slide 13: Closing of ISP Merchant Book deal successfully executed

    Closing of ISP Merchant Book deal successfully executed at the end of 2Q, despite Covid-19 emergency Key components of the transaction Key 2020 P&L Figures1: Incremental economics for Nexi  Transaction completed on June 30th, 2020 with clean EU Antitrust approval €M Revenues: EBITDA: Net Income: 

  14. Slide 14: Focus on 1H20 Results

    Focus on 1H20 Results od N VAL

  15. Slide 15: Resilient business model with 50+% revenues not impacted by volumes

    Resilient business model with 50+% revenues not impacted by volumes and 38% variable and semi-variable costs Revenues breakdown1 Operating costs breakdown1 Volume driven revenues Installed-base driven revenues Variable costs Fixed costs 9% 20% external processing 41% 64% 48% 52% 91% 38% 59% 62% 36%

  16. Slide 16: Net Revenues affected by Covid-19 lockdown; strong organic ISP contribution

    Net Revenues affected by Covid-19 lockdown measures in 2Q. Strong organic ISP deal contribution and cash cost containment plan support to EBITDA margin Net Revenues (€M) EBITDA (€M) Nexi standalone Nexi standalone Margin – incl. ISP contribution ISP contribution ISP contribution 53% 55% -6.3% -3.9%

  17. Slide 17: Merchant Services & Solutions: ~40% of revenues not impacted

    Merchant Services & Solutions: ~40% of revenues not impacted by Covid-19 Net Revenues (€M) Managed Transactions (#M) Key Highlights Nexi standalone 51%1 ISP contribution International Schemes -17.2%  Managed transactions and Value of managed transactions affected by -8.7% -18.9% extensive lockdown

  18. Slide 18: Cards & Digital Payments: ~60% of revenues not impacted

    Cards & Digital Payments: ~60% of revenues not impacted by Covid-19 Net Revenues (€M) Managed Transactions (#M) Key Highlights International 38%1 Schemes -5.3%  Managed transactions and Value of managed transactions affected by -9.2% 1,260 extensive lockdown measures. 1,144 Progressive recovery sta

  19. Slide 19: Digital Banking Solutions: marginally impacted by Covid-19 lockdown

    Digital Banking Solutions: marginally impacted by Covid-19 lockdown Net Revenues (€M) Key Highlights 11%1  2Q performance mainly affected by phasing of certain low margin banks-related projects. Expected -2.3% return to growth in 2H 55.9 54.6 Digital  Continued roll out of new higher value advance

  20. Slide 20: Strong costs reduction in the quarter to mitigate Covid-19 impact

    Strong costs reduction in the quarter to mitigate the financial impact of Covid-19 Total Costs (€M) Key Highlights -8.9% Y/Y Personnel Costs on a standalone Decrease in total costs (-21.7 €M) mainly driven by: Operating Costs -9.1% basis  well progression on the announced 100+ €M 238.5 cash cost co

  21. Slide 21: Well progressing on 100+ €M cash cost containment plan

    Well progressing on 100+ €M cash cost containment plan to mitigate EBITDA and cash flow impact. 27% already delivered in 1H % % realized in 1H20 27% 100+ Cost containment plan €M Volume-base costs Discretionary spending 55% Operating Expenses Transformation Costs 46% Capex In 2H20  Personnel expens

  22. Slide 22: Continued investments to support quality, innovation and IT transformation

    Continued investments to support quality, innovation and IT transformation Capital Expenditure (€M) Ongoing investments (1H 2020): key examples FY19 Total Capex: 167€M FY20 Current Plan Transformation Capex 22 Total Capex: 125-135 €M Extraordinary Innovation:  Open Banking Gateway & Corporate Banki

  23. Slide 23: IT strategy progress now above 60%

    IT strategy progress now above 60%. ~120 €M expected to completion Capital Expenditure (€M) Transformation Capex progress 53% 62% Transformation Capex for Extraordinary Innovation and Next Generation Platform deployment June 2020  ~62% program spend completed to date  ~120 €M expected to complete

  24. Slide 24: Transformation Costs down by 59% Y/Y in 1H20

    Transformation Costs down by 59% Y/Y in 1H20 Transformation Costs (€M) Bridge from 1H 2020 Transformation Costs to Reported non recurring items (€M) -59% 25.8 -10.6 17.2 10.6 8.8 -36.7 5.9 1H19 1H20 -42.5 1H20 ISP transaction Others incl. 1H20 Nexi non IPO costs 1H20 Reported Transformation related

  25. Slide 25: Normalized Net Profit at 101.2 €M including ISP contribution

    Normalized Net Profit at 101.2 €M including ISP merchant acquiring book contribution, down by 14% Y/Y €M 261.8 84.3 10.6 €M Transformation Costs Y/Y organic 27.7 31.9 €M Others performance 42.5 -14% 13.1 101.2 42.5 43.0 64.2 18.3 10.7 1H20 EBITDA D&A Interest Non recurring Cash Taxes Reported Net D&

  26. Slide 26: Cash Flow conversion at 77% including ISP contribution

    Cash Flow conversion at 77% including ISP merchant acquiring book contribution €M Cash Flow Conversion 1 77% 261.8 39.9 20.1 31.3 56.0 201.8 114.5 1H20 EBITDA incl. Ordinary Capex Change in WC Normalized Normalized Cash Normalized Normalized Free ISP contribution Operating Cash Flow Interest Expense

  27. Slide 27: Strong cash position; Net Financial Debt / EBITDA temporarily affected

    Strong cash position. Net Financial Debt / EBITDA temporarily affected by Covid-19 Net Financial Debt (€M) Key Highlights June 20 Acquisition of the merchant acquiring business of ISP June 20 successfully financed by: June 19 Dec 19 Mar 20 incl. ISP Standalone  500 €M equity-linked bond placed in A

  28. Slide 28: 2020 Guidance suspended; ambition to grow EBITDA

    2020 Guidance suspended. Ambition to grow EBITDA and EBITDA - Capex vs 2019, including ISP book organic contribution Previous Guidance1: suspended 2020 Ambition  2020 volume-driven revenues depending on speed of 5-7% annual net revenue growth over medium term, targeting recovery and dynamics by sec

  29. Slide 29: Annex

    Annex 29

  30. Slide 30: P&L including ISP contribution and Nexi standalone

    P&L Including organic contribution from ISP Nexi standalone Δ% vs. Δ% vs. 1H19 1H20 Δ% vs. 1H19 2Q19 2Q20 1H19 1H20 Δ% vs. 1H19 2Q19 2Q20 €M 2Q19 €M 2Q19 Merchant Services & Solutions 267.2 243.9 -8.7% 140.9 115.1 -18.3% Merchant Services & Solutions 223.6 192.9 -13.7% 117.5 87.8 -25.3% Cards & Digi

  31. Slide 31: Reported P&L vs Normalized P&L

    Reported P&L vs Normalized P&L ISP merchant Normalized Reported Normalized Delta Reported vs Normalized Delta book 1H20 1H20 1H20 €M contribution incl. ISP D&A: D&A customer contracts Merchant Services & Solutions 192.9 192.9 51.0 243.9 Interests & financing costs: ~3 €M interest expenses on ISP Car

  32. Slide 32: Investor Relations

    Investor Relations investor.relations@nexi.it Stefania Mantegazza stefania.mantegazza@nexi.it 32

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