Nexi — Earnings Release 2024

Jul 31, 2024

Informazione Regolamentata n. 2170-67-2024	Data/Ora Inizio Diffusione 31 Luglio 2024 18:16:50		Euronext Milan
	:
Societa'		NEXI
Identificativo Informazione Regolamentata	:	194098
Utenza - Referente	:	NEXIN03 - MANTEGAZZA
Tipologia	:	1.2
Data/Ora Ricezione	:	31 Luglio 2024 18:16:50
Data/Ora Inizio Diffusione	:	31 Luglio 2024 18:16:50
Oggetto	:	1H2024 Financial Results
Testo del comunicato

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GROUP FINANCIAL RESULTS AS OF JUNE 30 th 2024 APPROVED CONTINUED DELIVERY OF GROWTH AND MARGIN EXPANSION

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• Revenues at € 1,660.5 million in 1H24, +5.9% Y/Y
• EBITDA at € 827.1 million in 1H24, +8.0% Y/Y, with c. +97 bps EBITDA margin expansion
• Strong acceleration of excess cash generation at € 383.4 million in 1H24, +42% Y/Y
• € 500 million share buy back 18-months program launched in May 2024. Decision to accelerate the program to complete in 2024
• Continued progress on de-leveraging, with net debt/EBITDA at 2.8x as of June 2024, 2.7x pre-share buy-back effect
• 2024 guidance confirmed

Milan, July 31 st 2024 – The Board of Directors of Nexi S.p.A. approved today the Group's consolidated financial results as of June 30 th 2024.

"In an evolving competitive context, we have continued our journey of revenue and margin growth, significantly increasing the cash generation, even net of growth investments in the business. This accelerated cash generation allows us to further reduce debt and leverage and, at the same time, to accelerate the return of capital to our shareholders, anticipating the conclusion of the 18 months share buy-back program, launched in May, by the end of 2024 – commented Paolo Bertoluzzo, CEO of Nexi Group – "In the first half of the year, we further strengthened the company's growth potential. We accelerated the development of direct sales channels in Italy and partnerships with major software players across all geographies, while further strengthening our offerings for merchants with increasingly advanced digital solutions, such as the launch of Apple Tap to Pay in Italy and Germany, the enhancement of our e-commerce offerings with Computop in Germany, and the acceptance of Bancomat Pay for Amazon in Italy. At the same time, we also accelerated our efficiency initiatives and the delivery of synergies, creating additional opportunities to improve margins and invest in the future of our company."

Key consolidated financial managerial results¹

€M	1H23	1H24	Δ% vs. 1H23	2Q23	2Q24	Δ% vs. 2Q23
Merchant Solutions	881.1	942.8	+7.0%	471.1	505.0	+7.2%
Issuing Solutions	513.2	539.4	+5.1%	268.4	281.8	+5.0%
Digital Banking Solutions	174.2	178.3	+2.4%	91.4	92.0	+0.7%
Operating revenue	1,568.5	1,660.5	+5.9%	830.9	878.9	+5.8%
Personnel Costs	-372.7	-394.6	+5.9%	(179.3)	(189.1)	+5.4%
Operating Costs	-429.7	-438.9	+2.1%	(218.6)	(224.5)	+2.7%
Total Costs	-802.4	-833.4	+3.9%	(397.9)	(413.5)	+3.9%
EBITDA	766.1	827.1	+8.0%	432.9	465.4	+7.5%
Ordinary D&A	-213.1	-231.3	+8.5%
Normalised Interests & financing costs	-120.5	-124.7	+3.5%
Normalised Pre-tax profit	432.4	471.1	+8.9%
Income taxes	-145.2	-156.2	+7.6%
Profit (loss) after tax from assets held for sale	4.2	-14.5	-445.8%
Minorities	-0.9	0.2	-119.2%
Normalised Net profit	290.6	300.6	+3.4%

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In 1H24 the Group delivered revenues at € 1,660.5 million, +5.9% versus 1H23, and EBITDA at € 827.1 million, +8.0% versus 1H23. The EBITDA margin was at 50%, up by 97 basis points compared to 1H23, also thanks to the acceleration of efficiencies and synergies delivery on the back of Group integration.

In 2Q24 revenues reached € 878.9 million, +5.8% versus 2Q23, and EBITDA was at € 465.4 million, +7.5% versus 2Q23, with EBITDA margin at 53%, up by 84 basis points compared to 2Q23.

Nexi Group's operating businesses delivered the following results in 1H24:

• Merchant Solutions, representing approximately 57% of Group's total revenues, reported revenues of € 942.8 million, +7.0% Y/Y, with eCommerce growing doubledigit. In 1H24, 9,537 million transactions were processed, +8.7% Y/Y, with value of processed transactions at € 407.2 billion, +3.8% Y/Y. In 1H24 international schemes sales volume growth has continued, especially in Italy, DACH region and Poland, while total volume growth was impacted by lower margin national schemes volumes. Furthermore, during the semester, SMEs acquiring volumes continued to grow driven by customer base expansion² , particularly in Italy, DACH region and Poland.

In 2Q24, Merchant Solutions revenues reached € 505.0 million, +7.2% Y/Y.

• Issuing Solutions, representing approximately 32% of Group's total revenues, reported revenues of € 539.4 million in 1H24, +5.1% Y/Y. The growth was supported by international schemes volume growth and also by the anticipation of specific projects and initiatives, although less than last year. In 1H24, 9,940 million

¹ 2023 and 2024 pro-forma normalised managerial data at constant scope and FX (average 2024 budget FX)

² # of POS terminals

transactions were processed, +8.3% Y/Y, with value of processed transactions at € 437.5 billion, +4.6% Y/Y. In 2Q24, Issuing Solutions revenues reached € 281.8 million, +5.0% Y/Y.

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• Digital Banking Solutions, representing approximately 11% of Group's total revenues, in 1H24 reported revenues of € 178.3 million, +2.4% Y/Y. In 2Q24, Digital Banking Solutions reached € 92.0 million of revenues, +0.7% Y/Y, supported by volumes despite lower projects than last year during the same period.

In 1H24, Total Costs were at € 833.4 million, up by 3.9% Y/Y while in the quarter were at € 413.5 million, +3.9% versus 2Q23. The operating leverage, the ongoing cost actions and the delivery of synergies have limited the cost growth, notwithstanding volume, business growth and inflationary pressure.

Total Capex³ were at € 196 million in 1H24, equal to 12% of net revenues, strongly decreasing from € 230 million in 1H23, down 15.0%. Y/Y.

Continued strong reduction of transformation and integration costs at € 36.8 million in 1H24, down 32% versus 1H23; non-recurring items below EBITDA at € 188.7 million in 1H24, including non-recurring costs related to the severance announced this year (€ 134.8 million, of which ~€ 31 million represents the cash-out in the period).

Normalised net profit⁴ in 1H24 was € 300.6 million, up by 3.4% Y/Y.

During the first semester of 2024, the excess cash generation⁵ increased to € 383.4 million, +42% Y/Y.

The accelerating cash generation resulting from the compound of growth, operating leverage and cash leverage allows to allocate capital to reduce debt and materially return capital to shareholders at the same time.

In particular, regarding debt and leverage reduction, the Group has a well-balanced debt profile in terms of maturities and mix and € ~1.3 billion of 2024-25 debt maturities are going to be fully paid down with existing cash. Furthermore, the Group target leverage is expected at ~2.0x-2.5x EBITDA by 2026 after further capital return to shareholders. In the first semester, € ~220 million of debt maturities have already been reimbursed.

The strong accelerated cash generation enables structural return of capital to shareholders and the Group expects to allocate a material share of excess cash to shareholders on an ongoing basis, either via share buy-backs or dividends, depending on market conditions. A € 500 million share buy-back 18-months program has been launched in May 2024 and has now been accelerated to complete the program in 2024. In the semester, € ~118 million of share buy-back has been executed.

On M&A, the Group confirms a selective approach in identifying value accretive acquisitions of merchant books and/or strategic product/tech capabilities, while focusing on the disposal of non-core DBS businesses. In the first semester, Sparkasse merchant

³ Managerial figure.

⁴ Net profit to which non-recurring items and D&A customer contracts are added back net of taxes.

⁵Operating cash flow generation after cash interest expenses and other cash items (cash taxes, IFRS 16 and other)

book acquisition has been closed and the sale of Nordic eID business is expected to be closed during the summer of 2024.

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In the first semester the Net Financial Debt was down to € 5,001 million, while the Net Financial Debt / EBITDA ratio was down to 2.8x, 2.7x pre share buy-back effect. The weighted average debt maturity is ~2.7 years with an average pre-tax cash cost of debt, slightly reduced at ~2.80%.

2024 Guidance

For 2024, considering the persistent complex macro outlook, Nexi confirms the following targets:

• Net revenues: Mid-single digit Y/Y growth;
• EBITDA: Mid-to-high single digit Y/Y growth, with margin expansion of 100 bps+;
• Excess cash generation: More than € 700 million;
• Net leverage: decreasing to below 2.9x including announced M&A and share buyback effects, (~2.6x on organic basis).

Significant subsequent events

Nexi informs that the Ordinary and Extraordinary shareholders' meeting will be called for September 12th, 2024 to resolve upon the confirmation of Mr. Luca Velussi as Director and an amendment to the company by-laws.

* * *

Pursuant to paragraph 2 of article 154 bis of the Consolidated Finance Act, the undersigned, Enrico Marchini, in his capacity as the manager in charge of preparing Nexi's financial reports, declares that the accounting information contained in this press release corresponds to the accounting documents, books and records of Nexi S.p.A..

Reported results under review by PricewaterhouseCoopers that will release limited revision.

* * *

Disclaimer: This is the English translation of the original Italian press release "Approvati i risultati finanziari di Gruppo al 30 giugno 2024". In any case of discrepancy between the English and the Italian versions, the original Italian document is to be given priority of interpretation for legal purposes.

Nexi

Nexi is Europe's PayTech company operating in high-growth, attractive European markets and technologically advanced countries. Listed on Euronext Milan, Nexi has the scale, geographic reach and abilities to drive the transition to a cashless Europe. With its portfolio of innovative products, e-commerce expertise and industry-specific solutions, Nexi provides flexible support for the digital economy and the entire payment ecosystem globally, across a broad range of different payment channels and methods. Nexi's technological platform and the best-in-class professional skills in the sector enable the company to operate at its best in three market segments: Merchant Solutions, Issuing Solutions and Digital Banking Solutions. Nexi constantly invests in technology and innovation, focusing on two fundamental principles: meeting, together with its partner banks, customer needs and creating new business opportunities for them. Nexi is committed to supporting people and businesses of all sizes, transforming the way people pay and businesses accept payments. It offers companies the most innovative and reliable solutions to better serve their customers and expand. By simplifying payments and enabling people and businesses to build closer relationships and grow together, Nexi promotes progress to benefit everyone. www.nexi.it/en www.nexigroup.com

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Nexi - External Communication & Media Relations

Daniele de Sanctis Matteo Abbondanza Mobile: +39 346/015.1000 Mobile: +39.348/406.8858

Søren Winge Danja Giacomin Mobile: +45 29 48 26 35 Mobile: +39.334/225.6777

Nexi - Investor Relations

Stefania Mantegazza stefania.mantegazza@nexigroup.com Mobile: +39.335.5805703

daniele.desanctis@nexigroup.com matteo.abbondanza@nexigroup.com

soeren.winge@nexigroup.com danja.giacomin@nexigroup.com

1H 2024 P&L – Reported vs Normalised

€M	1H24 Reported	Delta	1H24 Normalised
Merchant Solutions	943	0	943
Issuing Solutions	539	0	539
Digital Banking Solutions	178	-	178
Revenues	1,660	0	1,660
Personnel & related expenses	-394	0	-395
Operating Costs	-439	0	-439
Total Costs	-833	0	-833
EBITDA	827	0	827
D&A	-446	215	-231
Interests & financing costs	-125	0	-125
Non recurring items	-203	203	-
Pre-tax Profit	53	418	471
Income taxes	-86	-70	-156
Profit (loss) after tax from assets held for sale	0	-15	-15
Minorities	0	0	0
Net Profit	-33	333	301

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Reported data at current FX. Normalised data at constant FX and excluding non‐ recurring items and other one-offs (e.g. D&A of customer contracts).

Income Statement

(€'000)	1H24	1H23 Restated
Fees for services rendered and commission income	2,932,369	2,735,185
Fees for services received and commission expense	(1,180,514)	(1,110,002)
Net fee and commission income	1,751,855	1,625,183
Interest and similar income	93,723	55,071
Interest and similar expense	(236,334)	(171,940)
Net interest income	(142,611)	(116,869)
Profit (loss) on hedging/ financial assets and liabilities at Fair Value through profit or loss / derecognition of assets and liabilities at amortised cost	(6)	2,034
Dividends and profit (loss) from sale of assets at Fair Value through other comprehensive income	(40,299)	(35,687)
Financial and operating income	1,568,939	1,474,661
Administrative expenses	(1,064,363)	(915,312)
Personnel-related costs	(556,531)	(405,967)
Other administrative costs	(507,832)	(509,345)
Other operating income/expenses, net	2,183	3,086
Net value adjustments on assets measured at amortised cost	(2,213)	(1,403)
Net accruals to provisions for risks and charges	(5,742)	(879)
Net value adjustments/write-backs on tangible and intangible assets	(444,775)	(440,344)
Operating margin	54,029	119,809
Profit (loss) from equity investments and disposals of investments	2,060	595
Profit (loss) before taxes from continuing operations	56,089	120,404
Income taxes	(86,186)	(103,071)
Income (loss) after tax from discontinued operations	(2,670)	14,492
Profit (loss) for the period	(32,767)	31,825
Profit (loss) for the period attributable to the parent company	(32,600)	30,961
Profit (loss) for the period attributable to non-controlling interests	(167)	864

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Balance Sheet

ASSETS (€'000)	30/06/2024	31/12/2023
Cash and cash equivalents	475,489	800,172
Financial assets at Fair Value	132,426	129,189
Financial assets measured at amortised cost:	6,844,482	5,708,585
a) loans and receivables with banks	2,184,654	2,225,657
b) loans and receivables with financial entities and customers	4,659,828	3,482,928
Hedging derivatives	2,542	1,571
Equity investments	72,777	71,960
Tangible assets	527,406	549,053
Intangible assets	16,378,860	16,584,054
of which: Goodwill	12,013,549	11,999,223
Tax assets	253,055	248,922
a) current	13,975	15,837
b) deferred	239,080	233,085
Non-current assets held for sale and discontinued operations	143,351	105,139
Other assets	2,433,888	2,151,143
Total assets	27,264,276	26,349,788

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LIABILITIES (€'000)	30/06/2024	31/12/2023
Financial liabilities measured at amortised cost	11,643,384	11,095,636
a) due to banks	4,348,273	4,130,544
b) due to financial entities and customers	3,451,890	2,919,348
c) securities issued	3,843,221	4,045,744
Financial liabilities at Fair Value through profit or loss	250,810	246,313
Hedging derivatives	7,739	24,419
Tax liabilities	1,157,558	1,089,958
a) current	154,098	37,777
b) deferred	1,003,460	1,052,181
Liabilities associated with non-current assets held for sale and discontinued operations	51,341	14,774
Other liabilities	2,785,767	2,373,133
Post-employment benefits	30,830	32,000
Provisions for risks and charges	174,973	176,409
Share capital	118,719	118,647
Treasury shares (-)	(123,740)	(7,013)
Share premium	-	11,587,260
Reserves	11,303,378	713,900
Valuation reserves	(123,447)	(132,390)
Profit (loss) for the period	(32,600)	(1,005,989)
Equity attributable to non-controlling interests (+/-)	19,564	22,731
Total liabilities and equity	27,264,276	26,349,788

Fine Comunicato n.2170-67-2024	Numero di Pagine: 10
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