Nexi — Investor Presentation 2020

Jul 30, 2020

nexi

1H 2020 Results Presentation

1

July 30th , 2020

• 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, projections and provisional data concerning future events and are subject to a number of uncertainties and other factors, many of which are outside the control of Nexi Group (the "Company"). There are a variety of factors that may cause actual results and performance to be materially different from the explicit or implicit contents of any forward-looking statements and thus, such forward-looking statements are not a reliable indicator of future performance. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable law. The information and opinions contained in this Presentation are provided as at the date hereof and are subject to change without notice. Neither this Presentation nor any part of it nor the fact of its distribution may form the basis of, or be relied on or in connection with, any contract or investment decision.
• The information, statements and opinions contained in this Presentation are for information purposes only and do not constitute a public offer under any applicable legislation or an offer to sell or solicitation of an offer to purchase or subscribe for securities or financial instruments or any advice or recommendation with respect to such securities or other financial instruments. None of the securities referred to herein have been, or will be, registered under the U.S. Securities Act of 1933, as amended, or the securities laws of any state or other jurisdiction of the United States or in Australia, Canada or Japan or any other jurisdiction where such an offer or solicitation would be unlawful (the "Other Countries"), and there will be no public offer of any such securities in the United States. This Presentation does not constitute or form a part of any offer or solicitation to purchase or subscribe for securities in the United States or the Other Countries.
• Pursuant the consolidated law on financial intermediation of 24 February 1998 (article 154-bis, paragraph 2) Enrico Marchini, in his capacity as manager responsible for the preparation of the Company's financial reports declares that the accounting information contained in this Presentation reflects Nexi Group's documented results, financial accounts and accounting records.
• Neither the Company nor any of its representatives, directors or employees accept any liability whatsoever in connection with this Presentation or any of its contents or in relation to any loss arising from its use or from any reliance placed upon it.

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 started in June with gradual return to "normality". International travel recently reopened with some Country-specific restrictions
• 1H20 Transaction volumes (acquiring + issuing) at 186 €B, -16.9% y/y with a gradual recovery across all components from May 2020. Travel/tourism and International travelers contribution still behind last year although gradually recovering
• Acquiring volumes in the last week rolling (13th -19th July) at -9% y/y with a strong recovery across categories¹ . Acquiring volumes on Italian cards now back to pre-Covid levels, while foreign cards still very much behind but recovering
• Progressive reopening of commercial activities with transacting merchants now similar to pre-Covid and 2019 levels
• E-commerce strong acceleration net of high impact consumption sectors (e.g. travel/tourism related sectors and restaurants): +35% y/y in 1H20 and +43% y/y in 2Q20¹ . Overall 1H20 performance less impacted by Covid-19 compared to physical sales (-2.8% y/y transaction value)
• Early signals of acceleration of the structural shift from cash to digital payments

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 organic contribution from ISP merchant acquiring book. On a standalone basis Revenues at 427.7 €M, -8.5% y/y

Key business update

• Merchant Services & Solutions (51% of Revenues): commercial activity going back to pre-Covid levels, new "NexiGo" proposition to support SMEs' sales digitalization across channels, accelerated pipeline of large merchants omnichannel projects and step up on ecommerce gateway activations
• Cards and Digital Payments (38% of Revenues): commercial activities from banks gradually recovering, acceleration of banks interest on International Debit and continued progress on YAP mobile payment app
• Digital Banking Solutions (11% of Revenues): Nexi Open ecosystem proposition fully launched, banks go-to-market progressing; continued roll out of new higher value advanced self banking and digital corporate banking solutions
• Costs -9.1% y/y including organic contribution from ISP merchant acquiring book thanks to the 100+ €M cash cost containment plan well in execution and the continued focus on efficiency
• 1H20 Net financial Debt/EBITDA 4.0x pro-forma for ISP merchant acquiring book, 2.9x on a standalone basis

Financial guidance

• Financial guidance conservatively suspended in April 2020
• Assuming continued path of recovery at current trajectory, possible return to revenue growth by year-end
• Ambition to grow EBITDA vs 2019 including organic ISP book contribution (broadly in line without), with FY2020 EBITDA close to ~600 €M; expected growth in EBITDA – Capex vs 2019 with and without ISP. Strong cash position confirmed

Covid-19 emergency now under control. Phase 3 started in June with gradual return to "normality"

Transaction volumes recovering after the easing of lockdown measures

Covid-19 lockdown in Italy

Acquiring volumes recovery driven by Italian Cards, now back to pre-Covid levels; Foreign Cards still negative but recovering

Acquiring volumes – Italian Cards vs Foreign Cards – Y/Y trend -100 -90 -80 -70 -60 -50 -40 -30 -20 -10 0 10 1% 7% 20-26 5% -19% 17-23 24-1 -94% -8% 23-29 -88% 6% -95% -15% 12-18 -36% -1% -40% -38% -1% -49% -54% 2-8 9-15 -24% -77% -89% -49% -30% -22% 7-13 -43% -85% -91% -12% -35% 16-22 2% -43% -56% -2% 6-12 -93% -49% -87% -43% -49% 30-5 2-8 -6% -44% 25-31 -49% 30-6 -95% 13-19 -95% -94% -11% -47% 6% -26% -91% -32% 19-25 2% -83% -17% 8-14 1% -80% -14% 15-21 1% -75% -14% -13% 2% -72% 29-5 -1% -69% -14% 6-12 -63% -9% 22-28 13-19 Italian Cards Foreign Cards Total

FEBRUARY APRIL MAY JUNE JULY 2019 monthly weight Foreign Cards on total volumes MARCH 12% 12% 15% 16% 18% 21% Volume recovery across categories starting from May after the easing of lockdown measures. E-commerce acceleration outside travel and tourism

Acquiring volumes by category1	Product category	% change Y/Y
		Feb Jan +	March	April	May	June	week rolling 2 Last
	Basic consumption	15%	13%	11%	13%	14%	14% +18% on
44% for 37% for E-commerce E-commerce	of which Physical	15%	12%	9%	12%	11%	Italian Cards 11%
	of which E-commerce	27%	31%	42%	29%	55%	45%
31% 35% 36%	Generic/discretionary consumption	6%	-62%	-77%	-33%	-11%	-10% +2% on
in July	of which Physical	5%	-65%	-81%	-37%	-13%	Italian Cards -12%
2019	of which E-commerce	25%	8%	47%	47%	51%	36%
	High -impact consumption	10%	-68%	-89%	-70%	-46%	-28% -6% on
34% 19% for E-commerce	of which Physical	10%	-67%	-89%	-69%	-46%	Italian Cards -29%
	of which E-commerce	10%	-75%	-90%	-81%	-42%	-19%
Basic consumption	Total	11%	-35%	-48%	-27%	-14%	+6% on -9%
Groceries, medical retail, utilities and services	of which Physical	10%	-36%	-50%	-28%	-15%	Italian Cards -10%
(e.g. insurance, bank services)	of which E-commerce	19%	-21%	-17%	-14%	7%	15%
Generic/discretionary consumption Clothing, household, other non-alimentary retail
and other services (e.g. laundries, beauty)	2020 Acquiring volumes: split between Physical and E-commerce						2

Physical

E-commerce

Jan + Feb

93%

7%

March

92%

8%

April

90%

10% May

92%

8%

June

92%

8%

Last week rolling

93%

7%

High-impact consumption Hotels and restaurants, travel and transports, entertainment, etc.

Data include International schemes only for Nexi Payments, International and national schemes for MePS Note: (1) Category weight % (2019) calculated on Italian and Foreign cards Acquiring trx volumes. (2) Week 13th – 19th July

SME volume share back to pre-Covid situation, broadly in line with 2019

Progressive recovery of transacting merchants across all categories, now similar to 2019 levels

Perimeter: Nexi Payments – Licensing, Referral and Direct models

Consumer habits: acceleration of digital payments in less affected categories

Acceleration in digital payments volumes: specific industries trend (y/y last four weeks rolling) 1

y/y Pre-Covid

additional p.p. growth - last four weeks rolling

Digital payments volumes for Italian consumer cards net of high impact consumption¹

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 Covid levels	 Commercial activities from banks gradually recovering, also supported by Nexi specific campaigns	 Progress on advanced ATMs (+4.2% 2Q20 vs 2Q19). Continued New ATM front-end rollout, with new customer wins
 Growth of POS installations after the slowdown experienced during lockdown (+23% y/y in June)  Strong mPOS demand for small/micro merchants	 Renewed bank interest on International Debit as a mass market ecommerce-enabled product	 Continued growth of Digital Corporate Banking installed workstations (+6.8% 2Q20 vs 2Q19)
 Launch of new "NexiGo" proposition to support SMEs' sales digitalization, packaging omnichannel acceptance, Pay-by-link and e-/social commerce	 Continued evolution on National Debit digital capabilities; Next generation platform tender ongoing	 Instant Payments progress continuing despite lockdown, with new relevant players adopting Nexi platform
capabilities  Accelerated pipeline of large merchants omnichannel projects	 Strong demand for commercial cards and corporate payments products  Continued 'natural organic growth' on YAP	 Nexi Open ecosystem proposition fully launched, banks go-to-market progressing. CBI Globe open banking gateway activity-based
 Step up on E-commerce with gateway activations (x2 2Q20 vs 2Q19, x9 including Pay-by-link)  Nexi Business app reaching almost 50% penetration on enabled merchants (+60% y/y active users in June 2020)	mobile payment app (no marketing push in the quarter), now at ca. 850k enrolled clients 	accelerated  Robust commercial pipeline for innovative corporate payments solutions (insurance, utilities,)
	Acceleration of digital onboarding/digital issuing projects for banks  Extension of no-PIN contactless limits from 25€
	to 50€ - live from 2021
		12

Closing of ISP Merchant Book deal successfully executed at the end of 2Q, despite Covid-19 emergency

Key components of the transaction Revenues: ~106 Key 2020 P&L Figures¹ : Incremental economics for Nexi €M A strategic transaction Merchant Services & Solutions Other ~49% ~54% Nexi Nexi Pro Forma +5p.p. Nexi Net Revenues Mix 2020³ ~26% ~49% Nexi Nexi Pro Forma Referral / Direct Acquiring Other +23p.p. Merchant Services & Solutions Net Revenues Mix 2020³ EBITDA: ~95 Net Income: ~61 ² Deepening of partnership across businesses with the largest bank in Italy Enhanced platform and positioning in the acquiring segment Greater coverage of the acquiring value chain and enhanced ability to drive further innovation and value for merchants Increased scale with diversification of revenue streams Value enhancing transaction with cash EPS accretion in the high teens from 2020E Transaction completed on June 30th , 2020 with clean EU Antitrust approval ~180k merchants and ~€68bn of transaction volumes in 2019 Marketing and distribution agreement for merchant acquiring. Extension of remaining existing processing contract related to issuing and ATM acquiring services until 2044 1 €B cash consideration (plus potential earn-out payable in 2025) Implied multiples: 10.5x EV/EBITDA 2020E, 16.4x P/E 2020E 60+ €M cash flows generated by the acquiring book in 1H20 and transferred to

Nexi

Focus on 1H20 Results

14

Resilient business model with 50+% revenues not impacted by volumes and 38% variable and semi-variable costs

• Installed Base Driven revenues are subscription-like and linked to n. of POS terminals, n. of merchants, managed cards, n. of ATMs, etc.
• No material expected impacts in the short term.
• Closely monitoring the evolution to confirm the expected limited medium/long term impact due to POS installation slowdown and SMEs potential distress
• Possible rephasing of certain projects
• Volume Driven revenues driven by n. of transactions and value of transactions
  • Direct impact from volume contraction due to Covid-19
• Variable costs linked to:
  • Volumes of transactions (e.g. external and internal processing)
  • Level of activities (e.g. variable compensation, external contact center, POS and ATM management, operations,..);

Fixed costs

(e.g. personnel, running IT costs, g&a,..)

Net Revenues affected by Covid-19 lockdown measures in 2Q. Strong organic ISP deal contribution and cash cost containment plan support to EBITDA margin

Merchant Services & Solutions: ~40% of revenues not impacted by Covid-19

Cards & Digital Payments: ~60% of revenues not impacted by Covid-19

• Managed transactions and Value of managed transactions affected by extensive lockdown measures. Progressive recovery starting from
• Managed transactions on international schemes back to growth in June 2020
• Continued push on international debit, with increasing cards stock and Value of managed transactions (+10% y/y in June)
• Net Revenues affected by lower domestic travellers spending extra EU and lower commercial cards volumes

Digital Banking Solutions: marginally impacted by Covid-19 lockdown

• 2Q performance mainly affected by phasing of certain low margin banks-related projects. Expected return to growth in 2H
• Continued roll out of new higher value advanced self banking products/solutions and continued growth of advanced ATMs
• Completed the first wave of the new advanced Digital Corporate Banking platform with partner banks. Live with mobile app
• Nexi Open ecosystem proposition fully launched, banks go-to-market progressing

Strong costs reduction in the quarter to mitigate the financial impact of Covid-19

Decrease in total costs (-21.7 €M) mainly driven by:

• well progression on the announced 100+ €M cash cost containment plan
• continued focus on efficiency
• early impacts from implementation of IT strategy

Limited credit risk exposure (1H20 LLPs: 2.1 €M acquiring and 2.4 €M issuing, not Covid-19 related)

Merchant Services & Solutions:

Diversified exposure across sectors and no direct exposure to riskier sectors (e.g. airlines)

Cards & Digital Payments:

Credit risk limited to direct issuing model (~48k cards, equal to ~0.1% of Group total cards) and corporate cards

Well progressing on 100+ €M cash cost containment plan to mitigate EBITDA and cash flow impact. 27% already delivered in 1H

Cost containment plan

Volume-base costs

• Personnel expenses (variable compensation, other related costs)
• Processing: reduction in line with volume trends
• External contact center calls

Discretionary spending

Operating Expenses 55% Transformation Costs

• Hiring
• Consulting expenses
• Internal and external events, travels, etc..
• Voluntary waiver by Top management of their 2020 short term variable compensation

Postponement of few activities:

• YAP development
• Other transformation projects

Capex

46% In 2H20

• Postponement of non strategic project spending (e.g. IT systems optimization)
• Limited re-phasing of IT strategy
• Postponement of real-estate investments

Confirmed continued focus and investments on key initiatives to drive future growth and efficiency

Continued investments to support quality, innovation and IT transformation

IT strategy progress now above 60%. ~120 €M expected to completion

Capital Expenditure (€M)

% Capex in % of net revenues

Transformation Costs down by 59% Y/Y in 1H20

Normalized Net Profit at 101.2 €M including ISP merchant acquiring book contribution, down by 14% Y/Y

Cash Flow conversion at 77% including ISP merchant acquiring book contribution

Strong cash position. Net Financial Debt / EBITDA temporarily affected by Covid-19

Net Financial Debt (€M)
June 20 20 June incl June 19 Dec 19 Mar 20 ISP Standalone contribution
Financial Debt Gross	1 845 ,	1 840 ,	1 843 ,	1 838 ,	2 741 ,
Cash	(231)	(248)	(307)	(297)	(316)
1 Cash Equivalents	(92)	(123)	(116)	(118)	(118)
Financial Debt Net	1 523 ,	1 470 ,	1 420 ,	1 423 ,	2 307 ,

Net Financial Debt / EBITDA (€M)

Key Highlights

Acquisition of the merchant acquiring business of ISP successfully financed by:

• 500 €M equity-linked bond placed in April 2020 (maturity April 2027) and 466.5 €M term loan, granted on June 30th 2020 by a pool of banks (maturity June 2025), which replaced the original 1 €B bridge loan
• Nexi's own cash for the difference

Current Debt structure also includes:

• 1 €B Term Loan due 2024
• 825 €M Fixed-Rate Note due 2024
• Other residual debt (mainly IFRS 16)

Nexi benefits of an undrawn 350 €M Revolving Credit Facility, committed to 2024, that further supports its liquidity profile

Weighted average pre-tax cash coupon per annum stable at 1.9%, still well below 3.8% post reorganization in July 2018 and 3.1% post IPO

2020 Guidance suspended. Ambition to grow EBITDA and EBITDA - Capex vs 2019, including ISP book organic contribution

Guidance1 Previous : suspended
Net Revenues	5-7% annual net revenue growth over medium term, targeting higher end of the range
EBITDA	 13-16% annual EBITDA growth over medium term  Continued strong operating leverage
Non-recurring Items	Rapid further decrease of non-recurring items affecting reported EBITDA
Capex	 8-10% ordinary capex as % of net revenues over long term  Transformation capex on top of ordinary capex of 142 €M cumulative (2020 – c.2023)
Capital Structure & Capital Allocation	Organic de-leveraging with target net debt of ~2.0-2.5x EBITDA over medium to long term  Progressive moderate dividend policy, targeting pay-out ratio of 20-30% of distributable profits in medium to long term

2020 Ambition

2020 volume-driven revenues depending on speed of recovery and dynamics by sector

• Possible return to revenue growth by year-end assuming continued path of recovery at current trajectory
• 100+ €M cash cost (Opex/Capex) containment plan to mitigate the impact on EBITDA and cash flow targeting:
  • EBITDA growth vs 2019 including organic ISP book contribution, broadly in line without. FY2020 EBITDA close to ~600 €M.
  • Material growth in EBITDA – Capex with and without ISP contribution
• Strong cash position

€M	1H19	1H20	Δ% vs. 1H19	2Q19	2Q20	Δ% vs. 2Q19	€M
Merchant Solutions Services &	267.2	243.9	-8.7%	140.9	115.1	-18.3%
Cards & Digital Payments	187.9	180.1	-4.1%	94.8	87.5	-7.7%
Digital Banking Solutions	55.9	54.6	-2.3%	28.5	27.0	-5.2%
Operating revenue	510.9	478.7	-6.3%	264.3	229.7	-13.1%
Personnel & related expenses	(85 .4)	(79 .5)	-6.9%	(43 .0)	(38 .9)	-9.6%
Operating Costs	(153 .1)	(137 .3)	-10.3%	(77 .5)	(66 .0)	-14.9%
Total Costs	(238 .5)	(216 .8)	-9.1%	(120 .6)	(104 .9)	-13.0%
EBITDA	272.5	261.8	-3.9%	143.7	124.8	-13.2%
D&A	(52 .8)	(66 .1)	+25.1%
financing Interests & costs	(38 .4)	(38 .4)	+0.0%
Normalized Profit Pre-tax	181.2	157.3	-13.2%
Income taxes	(63 .3)	(55 .4)	-12.5%
Minorities	(0 .3)	(0 .8)	n.m.
Normalized Profit Net	117.6	101.2	-14.0%

Including organic contribution from ISP Nexi standalone

€M	1H19	1H20	Δ% vs. 1H19	2Q19	2Q20	Δ% vs. 2Q19
Merchant Services & Solutions	223.6	192.9	-13.7%	117.5	87.8	-25.3%
Cards & Digital Payments	187.9	180.1	-4.1%	94.8	87.5	-7.7%
Digital Banking Solutions	55.9	54.6	-2.3%	28.5	27.0	-5.2%
Operating revenue	467.3	427.7	-8.5%	240.8	202.4	-16.0%
Personnel & related expenses	(84.1)	(78.3)	-7.0%	(42.4)	(38.3)	-9.8%
Operating Costs	(150.3)	(135.2)	-10.1%	(76.1)	(64.9)	-14.8%
Total Costs	(234.5)	(213.5)	-8.9%	(118.6)	(103.1)	-13.0%
EBITDA	232.9	214.2	-8.0%	122.3	99.2	-18.9%
D&A	(52.8)	(66.1)	+25.1%
Interests & financing costs	(32.8)	(20.8)	-36.7%
Normalized Pre-tax Profit	147.3	127.3	-13.5%
Income taxes	(51.5)	(43.9)	-14.9%
Minorities	(0.0)	(0.4)	n.m.
Normalized Net Profit	95.7	83.0	-13.3%

Methodological note

• Including organic contribution from ISP: reported P&L excluding one-offs and including ISP merchant acquiring book and assuming the current debt structure since January 1 st, 2020. Delta y/y: organic delta, i.e. including ISP contribution also in 2019
• Nexi standalone: reported P&L excluding one-offs

Reported P&L vs Normalized P&L

€M	Reported 1H20	Delta	Normalized 1H20	merchant ISP book contribution	Normalized 1H20 incl ISP
Merchant Solutions Services &	192 9		192 9	0 51	243 9
Cards & Digital Payments	180 1		180 1		180 1
Digital Banking Solutions	54 6		54 6		54 6
Revenues	427 7		427 7	51 0	478 7
Personnel & related expenses	(78 3)		(78 3)	(1 3)	(79 5)
Operating Costs	(135 2)		(135 2)	(2 1)	(137 3)
Total Costs	(213 5)		(213 5)	(3 3)	(216 8)
EBITDA	214 2		214 2	47 7	261 8
D&A	(84 3)	18 3	(66 1)		(66 1)
& financing Interests costs	(27 7)	0 7	(20 8)	(17 7)	(38 4)
recurring items Non	(42 5)	42 5	-		-
Profit Pre-tax	59 6	67 7	127 3	30 0	157 3
Income taxes	(26 5)	(17 4)	(43 9)	(11 5)	(55 4)
Minorities	(0 4)		(0 4)	(0 3)	(0 8)
Profit Net	32 6	50 4	83 0	18 2	101 2

Delta Reported vs Normalized

D&A: D&A customer contracts

Interests & financing costs: ~3 €M interest expenses on ISP convertible bond (April-June) and ~4 €M bridge facility

Non recurring items: detailed bridge on slide 24

Transformation costs ¹

(10.6) (10.6) (10.6)

Investor Relations

investor.relations@nexi.it

Stefania Mantegazza

33

stefania.mantegazza@nexi.it