Slide 1: FY 2020 Preliminary Results Presentation
nexi FY 2020 Preliminary Results Presentation February 11th, 2021 1
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,
Slide 3: Key messages from today
Key messages from today Strong overall Accelerated Visible signals of possible performance, transformation into digital payments despite Covid, better than European PayTech acceleration anticipated ambition leadership EBITDA at 601.4 €M, +2.5% y/y Visible customer habits ISP merchant book acqu
Slide 4: Executive Summary: Covid-19 update
Executive Summary Covid-19 update Transaction volumes (acquiring + issuing) at 417 €B in FY20, -11.4% y/y, and 113 €B in 4Q20, -8.6% y/y due to Covid-19 second wave Due to Covid-19 second wave restrictions, progressive slowdown on acquiring volumes from late October. Second wave impact (- 20% du
Slide 5: Executive Summary: Results highlights
Executive Summary Results highlights EBITDA at 601.4 €M, +2.5% y/y in FY20. EBITDA at 172.5 €M, +8.3% y/y in 4Q20 EBITDA – Capex at 466.2 €M, +11.2% y/y in FY20 Revenues at 1,043.9 €M, -2.8% y/y in FY20. Revenues at 290.3 €M, -0.7% y/y in 4Q20 Key business update Merchant Services & Solution
Slide 6: Covid-19 second wave impacting volumes less than first wave
Covid-19 second wave impacting volumes less than first wave. Rapid recovery visible from mid-January Total Acquiring and Issuing volumes - 7-days rolling % change Y/Y Total Acquiring and Issuing volumes1 -11.4% in FY20 10 5 6% 2% -1% 0% 5% -2% -2% -3% -4% 0 -4% 2% -6% -5 -9% -8% -8% -7% -10% -3% -2%
Slide 7: Acquiring volume recovery driven by Italian customers spending
Acquiring volume recent recovery driven by Italian customers spending, now back to growth Y/Y. Foreign customers volume trend still negative Acquiring volumes – Italian Cards vs Foreign Cards – Y/Y trend Italian Cards Foreign Cards Total 18% 20 15% 10% 7% 6% 6% 6% 6% 10 2% 1% 3% 6% -2% -1% -1% -2% 0
Slide 8: Double digit growth in Basic consumption, fast recovery in Discretionary
Double digit growth and acceleration in Basic consumption and fast recovery in Discretionary spending. Strong E-Commerce growth net of high impact category Acquiring volumes by category1 Product category % change Y/Y Q120 Q220 Q320 Oct Nov Dec FY20 Jan LWR 2 Basic consumption 15% 12% 13% 21% 18% 25%
Slide 9: Acquiring volumes by product category Y/Y trend
Double digit growth and acceleration in Basic consumption and fast recovery in Discretionary spending, while High impact category still suffering Acquiring volumes by product category – Y/Y trend Total High Impact consumption Basic consumption Discretionary consumption 40 32% 25% 27% 30 23% 17% 19%
Slide 10: Visible signals of acceleration of digital payments penetration
Visible signals of acceleration of digital payments penetration in non-COVID affected sectors and less affected areas in the Country Digital payments Y/Y volumes for Italian cards: Italian cards Y/Y volumes trend by Week 25th – 31st Focus on Grocery category “Covid areas”1 January Net of high impact
Slide 11: Focus on FY20 Preliminary Results
Focus on FY20 Preliminary Results 2019 and 2020 data include ISP merchant book acquisition 11
Slide 12: Strong financial performance with EBITDA growing 2.5% y/y
Strong financial performance with EBITDA growing 2.5% y/y at 601.4 €M. Resilient revenue performance, despite Covid-19 second wave in 4Q Net Revenues (€M) EBITDA (€M) Margin 55% 58% -2.8% +2.5% 1,074.3 1,043.9 586.7 601.4 +8.3% -0.7% 292.4 290.3 159.3 172.5 4Q19 4Q20 FY19 FY20 4Q19 4Q20 FY19 FY20 12
Slide 13: Merchant Services & Solutions: key business update (1/2)
Merchant Services & Solutions: key business update (1/2) Be the payment 2020 Key drivers Key business update services provider of 1 choice for every Further development of Nexi Italian merchant, Strong growth of POS customer base (+4.2% y/y) driven by proposition with effective and in partnership
Slide 14: Merchant Services & Solutions: key business update (2/2)
Merchant Services & Solutions: key business update (2/2) Be the payment 2020 Key drivers Key business update services provider of 1 Good volumes’ resilience during Covid-19 thanks to leading choice for every Further development of Nexi position on large-scale food retailers Italian merchant, propo
Slide 15: Merchant Services & Solutions: customer base growth supports performance
Merchant Services & Solutions: customer base growth and more advanced solutions support performance Net Revenues (€M) Managed Transactions (#M) Key Highlights International -13.5% Managed transactions and Value of 53%1 Schemes -10.4% managed transactions reflects the in 4Q20 impacts of Covid-19 fi
Slide 16: Cards & Digital Payments: key business update
Cards & Digital Payments: key business update 2020 Key drivers Key business update Be the Italian Sustained growth of cards customer base, in particular debit and banks’ partner of 1 prepaid cards, more oriented to everyday spending and e-commerce choice, offering a Continuous improvement of full
Slide 17: Cards & Digital Payments: back to growth in 4Q
Cards & Digital Payments: back to growth in 4Q, supported by customer base growth and more valuable products Net Revenues (€M) Managed Transactions (#M) Key Highlights International -2.3% 36%1 Schemes -2.4% in 4Q20 Managed transactions and Value of managed transactions affected by -4.0% 2,675 Covi
Slide 18: Digital Banking Solutions: key business update
Digital Banking Solutions: key business update 2020 Key drivers Key business update Provide state-of- 1 Roll-out of the new front-end platform completed at 95% on ATMs installed base the-art innovative Further improvements Self-banking Continued growth of advanced ATM (+5% y/y). Slight decrease
Slide 19: Digital Banking Solutions: partial slow-down due to Covid-19
Digital Banking Solutions: partial slow-down of ordinary activities and delayed Banks’ projects/initiatives due to Covid-19 Net Revenues (€M) Key Highlights 11%1 Slowdown of some business activities (e.g. DCB small evolutions, -3.1% ATMs maintenance) and delayed 117.7 banks’ projects/iniziatives (
Slide 20: Material cost reduction delivered in the quarter and the year
Material cost reduction delivered both in the quarter and in the year Total Costs (€M) Key Highlights Personnel Costs Operating Costs Decrease in total costs (-45.1 €M) mainly driven by: -9.2% 487.6 100+ €M cash cost containment plan execution 442.5 continued focus on efficiency Y/Y impacts fr
Slide 21: 100+ €M cash cost containment plan over delivered
100+ €M cash cost containment plan to mitigate Covid-19 impacts over delivered despite higher volumes % % realized 105% 100+ Cost containment plan €M Volume-base costs Discretionary spending 92% Operating Expenses 109% 113% Transformation Costs Capex Personnel expenses (variable Hiring Postponem
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 (FY 2020): key examples Transformation Capex Transformation Capex 35 Ordinary capex Extraordinary Innovation: Open Banking Gateway & Corporate Banking % of FY19 net revenues % of
Slide 23: IT strategy progress at 65%
IT strategy progress at 65%. ~40 €M of savings from M&A synergies reducing the remaining transformation capex to ~63 €M Capital Expenditure (€M) Transformation Capex for Extraordinary Innovation and Next Generation Platform deployment Transformation Capex progress 53% 65% ~65% program spend comple
Slide 24: Transformation Costs down by 54% Y/Y in FY20
Transformation Costs down by 54% Y/Y in FY20 Transformation Costs (€M) Bridge from FY 2020 Transformation Costs to Managerial Non recurring items (€M) -54% 51.9 -24.0 21.9 15.7 24.0 23.4 -85.0 17.4 FY19 FY20 -102.3 FY20 ISP SIA and Nets LTI, Covid-19 FY20 Nexi IPO costs FY20 Transformation transacti
Slide 25: Normalized Net Profit at 245.8 €M, down by 3% Y/Y
Normalized Net Profit at 245.8 €M, down by 3% Y/Y €M 601.4 177.0 17.4 €M sustained by Financial Sponsors1 Y/Y organic 24.0 €M Transformation Costs performance 65.3 78.3 €M Others -3% 102.3 36.8 245.8 102.3 97.2 159.5 32.2 11.5 FY20 EBITDA D&A Interest Non recurring Cash Taxes Managerial D&A Δ Intere
Slide 26: Cash Flow conversion at 80%
Cash Flow conversion at 80% €M Cash Flow Conversion 1 80% 601.4 Vs 77% in 2019 100.3 19.7 62.5 132.8 481.4 286.1 FY20 EBITDA Ordinary Capex Change in WC Normalized Normalized Cash Normalized Normalized Operating Cash Flow Interest Expenses Cash Taxes2 Free Cash Flow Note: (1) Cash Flow Conversion de
Slide 27: Strong cash position. Net Financial Debt / EBITDA at 3.5x
Strong cash position. Net Financial Debt / EBITDA at 3.5x at year-end Net Financial Debt (€M) Key Highlights Dec 19 June 20 Sept 20 Dec 20 Current Debt structure includes: 1 €B Term Loan due 2024 825 €M Fixed-Rate Note due 2024 Gross Financial Debt 1,840 2,741 2,747 2,781 500 €M equity-linked
Slide 28: Guidance suspended. 2020 Ambition over achieved
Guidance suspended. 2020 Ambition over achieved 2020 Ambition 2020 Results 2020 volume-driven revenues depending on speed of recovery and dynamics by sector Revenue growth positive in 3Q, ahead of plan Net Revenues Q4 Revenues at -0.7% y/y despite Covid-19 second wave Possible return to reve
Slide 29: Guidance suspended. Ambition to go back to material growth in 2021
Guidance suspended. Ambition to go back to material growth in 2021 Previous Guidance1: suspended 2021 Ambition Net 5-7% annual net revenue growth over medium term, Revenues targeting higher end of the range Assuming gradual recovery from Covid-19 in 1H21 broadly in line with the current trajectory:
Slide 30: Key messages from today
Key messages from today Strong overall Accelerated Visible signals of possible performance, transformation into digital payments despite Covid, better than European PayTech acceleration anticipated ambition leadership EBITDA at 601.4 €M, +2.5% y/y Visible customer habits ISP merchant book acqu
Slide 31: Q&A
Q&A 31
Slide 32: Annex
Annex 32
Slide 33: P&L
P&L Δ% vs. Δ% vs. FY19 FY20 4Q19 4Q20 €M FY19 4Q19 Merchant Services & Solutions 569.2 549.9 -3.4% 158.2 156.4 -1.1% Cards & Digital Payments 387.4 380.0 -1.9% 101.4 103.8 +2.4% Digital Banking Solutions 117.7 114.0 -3.1% 32.9 30.2 -8.4% Operating revenue 1074.3 1043.9 -2.8% 292.4 290.3 -0.7% Person
Slide 34: Managerial P&L vs Normalized P&L
Managerial P&L vs Normalized P&L Normalized Delta Managerial vs Normalized FY20 Delta €M FY20 D&A: D&A customer contracts Merchant Services & Solutions 549.9 549.9 Interests & financing costs: higher interest expenses due to the Cards & Digital Payments 380.0 380.0 full year effect of the ISP transa
Slide 35: SIA performance
SIA performance Revenues (€M) Cards & Merchant Solutions 67%1 Key Highlights Revenues, €M +2% Transaction Progress +2% 748 +9% 488 499 Merger Agreement signed 730 131 143 Closing expected in 3Q21 4Q19 4Q20 FY19 FY20 +7% 208 222 Resilient and diversified business Digital Payment Solutions 21%1
Slide 36: Nets performance
Nets performance Underlying Revenues (€M)1 Merchant Services 67%2 Key Highlights Revenues, €M -2.1% Transaction Progress -1.2% 988 976 664 649 Filing of the cross-border merger plan to European Antitrust completed Nexi EGM to approve the merger to -2.4% be held in March 3rd, 2021 -1.9% 259 254 1
Slide 37: Update on Government 'cashless promotion' initiatives
Update on Government ‘cashless promotion’ initiatives Cash-back bonus for consumers Other initiatives 10% cashback of in-store transactions Prize draw for consumers on electronic payments. 45 Lottery on €M per year. Every week 15 draws of 25 €k, every Entry gate: 50 transactions every 6 months.
Slide 38: Investor Relations
Investor Relations investor.relations@nexi.it Stefania Mantegazza stefania.mantegazza@nexi.it 38