Nexi S.p.a. · MIL:NEXI
Nexi — Merger or Acquisition (October 2020)
33 slides from Nexi's merger presentation, Oct 5, 2020
Slide 1: Creating a Fully Integrated European PayTech Leader
Creating a Fully Integrated European PayTech Leader Strategic Combination Between Nexi and SIA 5 October 2020 1
Slide 2: A Powerful Strategic Combination
Creating a Fully Integrated European PayTech Leader + A Powerful Strategic Combination In-market consolidation Product, technology and capabilities Scaled platform for capturing in Europe’s most attractive powerhouse across the payments ecosystem, European value-accretive payment market serving a br
Slide 3: Transaction Highlights & Rationale
Transaction Highlights & Rationale 3
Slide 4: Transaction Highlights
Transaction Highlights • National champion in the attractive Italian Payments market with leading scale and positioning in the pan-European landscape • Full portfolio of solutions and capabilities across the payments ecosystem, rails and value chain • Fully integrated end-to-end technology powerhous
Slide 5: Transaction Highlights (Cont'd)
Transaction Highlights (Cont’d) • Signing of a Memorandum of Understanding (“MOU”) between Nexi, SIA, Mercury UK1 and CDP Equity, for the merger of SIA into Nexi. All-share transaction, with 1.5761 newly issued Nexi shares for each SIA existing share • Pro-forma ownership: 70% Nexi shareholders (23%
Slide 6: SIA at a Glance
SIA at a Glance Group Overview Business Mix (by Revenues 2019A) • Italian provider of mission-critical payment technology and infrastructure services serving more than 2,300 clients (including financial institutions, corporates, PAs, central banks and other institutions) in 50+ countries Network & C
Slide 7: SIA at a Glance (Cont'd)
SIA at a Glance (Cont’d) Business Segments Overview Financial Highlights % of ‘19 Highlights KPIs (2019A) Examples €m 2018A4 2019A revenue of Clients Net Revenues 614 728 • Issuing and acquiring processing for credit, debit and Card & prepaid cards (including domestic scheme • #16bn card payments Op
Slide 8: A Powerful Strategic Combination
A Powerful Strategic Combination Product and digital solutions factory, Platform and processing factory merchant services focused Front-end driven digital innovation Back-end technology platform innovation International card rails leader Account-to-account and national card rails leader Value orient
Slide 9: The New Group in Numbers
The New Group in Numbers Leadership1 Scale2 Reach Capabilities #1 Payment Company by #1 Processor of ~€1.8bn ~120m 2,200+ Revenues Cards Product & Tech Acquiring Transaction Volumes in Cross-border Payments3 Development Specialists Continental Europe #1 Payment Company by #1 Payment Company by ~€1.0
Slide 10: Creating a Fully Integrated European PayTech Leader
Creating a Fully Integrated European PayTech Leader National champion in the attractive Italian Payments market 1 with leading scale and positioning in the pan-European landscape Full portfolio of solutions and capabilities 2 across the payments ecosystem, rails and value chain 3 Fully integrated en
Slide 11: National Champion in the Attractive Italian Payment Market
1 National Champion in the Attractive Italian Payment Market Italian Secular Growth Tailwinds Strong Contribution from SIA to Nexi's Platform Long Term Relationships with 3rd Largest Economy €1.1trn 3.7m Major Financial Institutions in Continental Europe 2019 Largest SME Consumer spend1 population i
Slide 12: Leading Scale and Positioning in the Pan-European Landscape
1 Leading Scale and Positioning in the Pan-European Landscape Large Scale and Growing European Footprint Continental Europe3 Financial Highlights1 • Leadership positioning in Continental Europe • Largest payment company by acquiring • €1.8bn Revenue (o/w €0.2bn transaction volumes international) • L
Slide 13: Full Portfolio of Solutions and Capabilities Across the Payments Ecosystem
2 Full Portfolio of Solutions and Capabilities Across the Payments Ecosystem % % of Group Pro-forma 2019 Revenues1 43% 37% 20% Digital Banking and Corporate Merchant Services and Solutions Cards and Digital Payments Solutions Clearing Solutions Instant Payments SME Solutions Large Merchants Consumer
Slide 14: Coverage of All Current and Future Payment Rails
2 Coverage of All Current and Future Payment Rails Nexi Leadership SIA Leadership International Schemes National Schemes Account-to-Account B2B / Corporate Payments Open Banking Credit Cards Debit Cards Clearing Solutions Digital Corporate Banking Open Banking Gateway Debit Cards Payment Apps (Banco
Slide 15: Deep In-house Value Chain Coverage and Control
2 Deep In-house Value Chain Coverage and Control Technological Platform Operations Products / Solutions Sales & Customer Management Data POS Network & Card Fraud Schemes Product Digital Marketing Pricing & Customer Centers & Processing Clearing Operations Terminal Connectivity Mgmt Mgmt Membership D
Slide 16: Fully Integrated End-to-end Technology Powerhouse
3 Fully Integrated End-to-end Technology Powerhouse Next Generation • Data/artificial intelligence dedicated teams • Hybrid cloud advanced analytics Product Development • Omni-channel, e-commerce and instant payments • 20k+ New IT releases over the last 12 months and Digital Innovation dedicated tea
Slide 17: Long Standing Relationships with a Broad Universe of Loyal Customers
4 Long Standing Relationships with a Broad Universe of Loyal Customers • Trusted partner delivering mission critical services • Long term partner for Banks and Financial institutions Large Italian Central Banks Banks International • Long lasting consolidated and Institutions Banks relationships with
Slide 18: Significant Value Creation from Highly Visible Synergies with Low Execution Risk
5 Significant Value Creation from Highly Visible Synergies with Low Execution Risk Synergy Areas Brief Overview 1 ~€150m • Tech platforms optimisation Total Recurring Cash Cost Synergies1 • Insourcing and operational excellence Synergies and Additional ~€65m One-off • Procurement and other costs Cap
Slide 19: Superior Operating Margin and Cash Generation at Scale
6 Superior Operating Margin and Cash Generation at Scale Combined Financials2 + (2019 Pro-forma, including run-rate synergies) Revenue €1.8bn EBITDA €1.0bn EBITDA Margin 55% Operating Cash Flow1 €0.8bn3 Operating Cash Flow Conversion Rate4 81% • Increased operating leverage and margin expansion pote
Slide 20: Best Positioned to Capture Multiple Growth Avenues, Organic and Inorganic
7 Best Positioned to Capture Multiple Growth Avenues, Organic and Inorganic 6 International 5 M&A Opportunities Local 4 M&A Opportunities • Bolt-ons in countries of Further Margin presence 3 Expansion • Bank-owned payment • Further merchant books Capture Future assets • Product / tech Strategic Grow
Slide 21: Value Creation & Financial Benefits
Value Creation & Financial Benefits 21
Slide 22: Value Creation and Financial Benefits
Value Creation and Financial Benefits Key Considerations Selected Highlights 1 • Highly visible synergies with low execution risk 15% - 20% Significant Value ~€150m Cash EPS2 Accretive • Total recurring cash synergies of ~€150m stemming form cost optimization, Creation from Recurring Cash at Anticip
Slide 23: Highly Visible Synergies with Low Execution Risk
Highly Visible Synergies with Low Execution Risk Recurring Synergies (€m) Key Highlights Total recurring cash synergies of ~€150m by 2025 Tech Platforms Optimisation ~50 o ~€135m EBITDA synergies by 2025, ~40%-50% achieved Insourcing and by 2022 and ~70% by 2023 ~35 Operational Excellence • ~€100m
Slide 24: Attractive Financial Profile
Attractive Financial Profile Based on 2019 Figures 1 Recurring Combined (€bn - unless otherwise stated) + + Synergies = (2019PF, including run-rate synergies) Net Revenues 1.08 0.73 0.05 1.812 EBITDA 0.59 0.28 0.13 1.00 EBITDA Margin 55% 38% 55% Operating Cash Flow 4 0.47 0.18 0.153 0.80 Operating C
Slide 25: Resilient and Diversified Business Model
Resilient and Diversified Business Model Revenue Mix (2019 Pro-forma)1,2 By Business By Type By Geography By Partners / Clients Digital Banking Merchant o/w ~9% Licence-related & Corporate Services & Installed Base, and ~5% Projects-related Other, 6% Solutions, 20% Solutions, 43% 45% CSEE3, 7% 52% 5
Slide 26: Superior Margin with Proven Operating Leverage
Superior Margin with Proven Operating Leverage Operating Expenses Mix by Type 2 1 + (Including Run-rate Synergies) Fixed Costs, Variable Costs, Fixed Costs, Variable Costs, ~60% <30% >70% ~40% Cost Base: €0.5bn Cost Base: €0.8bn EBITDA Margin: 55% EBITDA Margin: 55% • Improvement in operating levera
Slide 27: Strong Cash Generation Profile
Strong Cash Generation Profile Best-in-Class Cash €0.8bn 81% Generation Pro-forma Operating Cash Flow Operating Cash Flow Conversion Rate Generation1 (incl. run-rate synergies) (incl. run-rate synergies) Unlocking Disciplined Powerful Significant Capital Deleveraging Synergies Allocation Profile Pro
Slide 28: Closing Remarks
Closing Remarks nexi
Slide 29: Nexi + SIA: A New Powerful Step Forward in Our Value Creation Journey
Nexi + SIA: A New Powerful Step Forward in Our Value Creation Journey Nexi EBITDA Evolution1 ~5.0x EBITDA Increase €1.0bn2 Synergies CAGR: 16.6% €0.5bn €0.3bn €0.2bn Acquiring Acquiring Book Book 2016 2016 2019 Including Synergies Corporate First Wave of Second Wave of Separation Organic Growth Accr
Slide 30: Creating a Fully Integrated European PayTech Leader
Creating a Fully Integrated European PayTech Leader National champion in the attractive Italian Payments market 1 with leading scale and positioning in the pan-European landscape Full portfolio of solutions and capabilities 2 across the payments ecosystem, rails and value chain 3 Fully integrated en
Slide 31: Best Positioned to Capture Multiple Growth Avenues, Organic and Inorganic
Best Positioned to Capture Multiple Growth Avenues, Organic and Inorganic 6 International 5 M&A Opportunities Local 4 M&A Opportunities • Bolt-ons in countries of Further Margin presence 3 Expansion • Bank-owned payment • Further merchant books Capture Future assets • Product / tech Strategic Growth
Slide 32: Q&A
Q&A nexi 32
Slide 33: Legal Disclaimer
Legal 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, expectat