Nexi — M&A Activity 2019

Dec 19, 2019

Acquisition of Intesa Sanpaolo's Merchant Acquiring Business

1

19th December 2019

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 forwardlooking 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.

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.

This Presentation has been prepared on a voluntary basis since the financial disclosure additional to the half-year and annual ones is no longer compulsory pursuant to law 25/2016 in application of Directive 2013/50/EU. Nexi Group is therefore not bound to prepare similar presentations in the future, unless where provided by law. 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.

Key Highlights

The Transaction: Acquisition by Nexi of Intesa Sanpaolo's Merchant Acquiring Business

• Acquisition of Intesa Sanpaolo's merchant acquiring business for €1.0bn cash consideration (plus potential earn-out payable in 2025)
  • o ~180k merchants(1) and ~€66bn of transaction volumes(2)
  • o 2020E EBITDA and earnings of ~€95m and ~€61m(3) respectively
    • Implied multiples: 10.5x EV/EBITDA 2020E, 16.4x P/E 2020E
  • o 100% cash consideration, with committed bridge financing already in place

Deeping of strategic partnership with Intesa Sanpaolo in merchant acquiring

• o Acquisition of Intesa Sanpaolo's merchant acquiring business
• o Marketing and distribution agreement for merchant acquiring, with 25 years duration until 2044
• Extension of remaining existing processing contract in relation to issuing and ATM acquiring services (from original 2026 to 2044, in line with new framework)
• Marginal additional ordinary Capex; limited extraordinary integration Capex
• Expected leverage ratio pro-forma of ~3.4x net leverage by year-end 2020, in line with leverage range guidance at IPO
  • o ~2.0x-2.5x target leverage confirmed over medium / long-term
• Reiterating financial guidance on a larger and more resilient business
• Transaction expected to be cash EPS accretive in the high teens from 2020
• Closing of the transaction is expected before summer 2020 subject to customary regulatory approvals

Other Considerations

• Separate transaction being agreed by our shareholder Mercury UK HoldCo to sell a 9.9% stake in Nexi to Intesa Sanpaolo after closing of the Nexi transaction
• No changes to Nexi's governance framework or board composition as result from this separate transaction

A Strategic Transaction Strengthening Nexi Role as the Leading Italian PayTech

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

Deepening of partnership across businesses with the largest bank in Italy

Transaction Overview

Acquisition of Intesa Sanpaolo's Merchant Acquiring for €1.0bn (Plus Potential Earn-Out Payable in 2025)

• Acquisition of merchant acquiring business of Intesa Sanpaolo
  • o ~180k merchants(1)
  • o €66bn of transaction volumes(2)
• Marketing and distribution agreement for merchant acquiring activities
  • o 25 years duration until 2044
  • o Comprehensive commercial, marketing and distribution framework
  • o Alignment of interests through rebate mechanism to Intesa Sanpaolo and jointly agreed performance targets
  • o Downside protection for Nexi in relation to potential business losses from merchants

Extension of Remaining Existing Contract with Mercury Payment Services

• Extension of remaining existing processing contract in relation to issuing and ATM acquiring services
• Duration extended until 2044, in line with new partnership framework

Key P&L Figures of Intesa Sanpaolo's Merchant Acquiring Key Components of the Transaction

Incremental Economics for Nexi (€m)

Key Items	2020E
Net Revenues	~106
EBITDA	~95
Net Income	~61(3)

Transaction Impact on the Merchant Acquiring Value Chain

Key Financial and Business Mix Impacts

~26% ~49% Nexi Nexi Pro Forma Merchant Services & Solutions Net Revenues Mix 2020E Referral / Direct Acquiring Other +23p.p.

Net Financial Debt / LTM EBITDA
	Nexi Pro Forma for the Transaction
Nexi Standalone	(Assuming Issuance of €1.0bn New Debt)

Reiterating Financial Guidance on a Larger and More Resilient Business

	Current Guidance	Update on Guidance After the Transaction
Net Revenues	5 - 7% annual net revenues growth over medium-term	 Reiterated Increased scale and resilience, with further diversification
EBITDA	13 - 16% annual EBITDA growth over medium-term	 Reiterated Marginal fixed cost impact
Capex	8-10% ordinary Capex as % of net revenues over long term Transformation Capex on top of ordinary Capex of ~€180m cumulative (2H19 –c.2023)	 Improved Marginal incremental ordinary Capex on larger revenue base Limited extraordinary integration Capex Increased cash conversion
Capital Structure	Target Net Debt of ~2.0-2.5x EBITDA over medium to long-term	 Reiterated Strong organic deleveraging
	Improved cash EPS and cash flow conversion