nexi, the group that deals with payment systems, listed on Euronext Milan, plans for the 2021-25 period an average annual growth of revenues of about 9% and a gross operating margin up 14%. L'ebitda margin it is therefore expected to increase by around 900 basis points by 2025 compared to 48% at the end of 2021.
Nexi raises its targets, here's the news
On the occasion of the Capital Markets Day of 27 September, the group has forecast for the period 2023-25 to generate a excess capital of approximately 2,8 billion euros. Nexi “will evaluate how to use them by analyzing a series of opportunities 'value accretive' for all shareholders, whose positive impact is not reflected in the financial outlook presented today” reads the note released by the company. Based on the opportunities and the market environment, the group will consider whether to use the good data to “reduce debt, pursue opportunities to M&A strategic or return the capital to shareholders through transactions buybacks or dividends“. The goal is to bring the ratio between net financial debt and Ebitda in the range of 2025-1 times by 1,5. The growth ofnormalized net profit is estimated at 20% on average per year.
And CEO Paolo Bertoluzzo indicates the M&A strategies
“We will be very rational in growth,” he said Paul Bertoluzzo, group managing director, through M&A, consolidation in merchant services and European expansion as well as enhancing capacity in e-commerce and software as key segments in which to capture external opportunities. “We aim at new geographies in addition to those in which we are present, we want to enter new markets. We want to acquire new customers in geographies where we are less present”, added Bertoluzzo. From the listing to today, the group has extended its operations to over 25 countries.
Stock market: Nexi becomes the case of the day, shares leap
Business Square is positively evaluating the results beyond expectations. The title at the opening it rises by 7% returning above 9 euros, the IPO price of 2019. in the middle of the session it is at 8,71, up by 3,54% in an overall suffering market: the Ftse Mib is down by 0,54 %. The Nexi stock remains far from the highs reached in June of a year ago above 18 euros with a minimum of 7,41 euros reached last June.
Nexi's new growth strategy is divided into three lines: differentiation, accelerated and targeted growth in the SME, e-Commerce and advanced digital issuing sectors, aiming at the creation of strong synergies and continuous operational leverage and also an increase in synergies deriving from the integration of Nets and Sia.
“Nexi occupies a privileged position in the European markets in which it operates” Bertoluzzo continued. “Our strong local expertise and customer proximity, combined with market-leading scale and efficiency, are key competitive advantages for us. I believe these benefits have positioned us well to continue to support future growth, profitability and shareholder value. The skills and best-in-class talent of our people represent a further strategic lever for growth through a differentiated and innovative offer of products and services. We will continue to invest in technology and innovation, strongly trusting in the future evolution of our sector".
By 2025 Ebitda margin expected to grow by 900 basis points
For the period 2021-2025, the data on an organic basis, which were approved by the Board chaired by Michaela Castelli, forecast an average compound annual increase in net revenues of 9%, beyond the consensus forecast of +7%, Ebitda +14% beyond forecasts of +12%, Ebitda margin expected to grow by 900 basis points by 2025. Earnings per share normalized should show an average compound annual increase of 20% in the period 2021-2025, higher than the +14% consensus.
The new plan: revenues expected to increase by 2023% in 7
For 2023 “We expect revenue growth of at least 7% and expect it to increase of the ebitda double digits,” he said Bernardo Mingrone, cfo of Nexi, during the Investor Day, specifying that the guidance will still be provided next February. Furthermore, of the €2,8 billion of excess capital envisaged in the plan for the period 2023-25, approximately €600 million will already be created by next year”.
Nexi has raised its forecasts cash synergies achievable by integration with Nets and Sia. If an amount of 2022 million was confirmed for 105, the synergies to be achieved by 2025 amount to 365 million and 405 million in the longer term, more than 25% more than those announced. “We have worked in all spaces trying to increase our synergies” says Bertoluzzo.
And card transactions are also growing
In addition, Nexi expects a 10% increase in card payment transaction volumes in Europe in the period 2022-27 against growth of around 2016% in the pre-Covid years (19-7) and 4% in the Covid two-year period. In terms of card penetration, the forecast is for an average annual increase of 2 percentage points (1,2% pre-Covid and 2% in the two-year Covid period). This estimate of market growth "does not depend on the macroeconomic tensions that we see in the short term, because our business has shown itself to be very resilient", explained Bertoluzzo.
As regards Environmental, social, and corporate governance, Nexi undertakes in its plan to 2025 to support “the digitization of micro-enterprises, SMEs and the Public Administration; the fight against climate change through its Net Zero goal in 2040, already becoming Climate Neutral starting from 2022, and for an acceleration in more environmentally friendly consumer behavior also along the entire supply chain; will make a further investment in the involvement of people and in the continuous updating of their skills, ensuring adequate representation of gender and minorities and promoting an inclusive culture with governance of absolute excellence".
Partial buyback of two bonds, 2024 and 2026, up to 400 million
Nexi also announced today a partial buyback of two bonds with maturities 2024 and 2026 up to a maximum of 400 million euros. The goals of the operation is mainly to reduce repayments on the occasion of the company's next maturities, proactively manage its financial liabilities and extend the average life of its financial debt, says a note from the company which will proceed with the possible repurchase of the securities using the liquidity available, including the funds deriving from the disbursement of committed bank lines already available.
The partial purchase offer is addressed to the holders of the securities representing the bond loan denominated "€825,000,000 1.75% Senior Notes due 2024" (ISIN Code XS2066703989) and to the holders of the securities representing the bond loan denominated "€1,050,000,000 1.625% Senior Notes due 2026” (ISIN Code XS2332589972). The securities, issued in October 2019 and April 2021 respectively, are admitted to trading on the "Euro MTF" multilateral trading system operated by the Luxembourg Stock Exchange.
The membership period, which begins today, will have deadline October 4, 2022, subject to revocation, early closure, modification or extension by the company. The settlement date of the tender offer is expected to be October 7, 2022.
Bank of America, BNP Paribas, and Crédit Agricole act as Lead Dealer Managers and Barclays, Intesa Sanpaolo, Mediobanca and Société Générale act as Dealer Managers in the context of the Tender Offer. Kroll Issuer Services acts as tender agent.
Nexi is among the five companies selected by the ECB for the prototypes of payment systems with the digital euro. In June Bper and Nexi have reached agreement for a strategic partnership on payment cards.
