SIA's Board of Directors, meeting under the chairmanship of Federico Lovadina, approved the preliminary consolidated financial results at 31 December 2020, confirming the positive trend of 2019 and growing in the fourth quarter of 2020, despite the economic contraction caused by the Covid-19 pandemic.
PRELIMINARY CONSOLIDATED FINANCIAL RESULTS AT 31 DECEMBER 2020
In 2020, SIA Group recorded consolidated revenues of €748 million, an increase of 2% YoY, entirely on an organic basis of which approximately 50% is generated by recurring activities. Revenues maintain a geographical diversification in line with 2019 with 68% in Italy and 32% abroad.
At the level of the market segments in which SIA Group operates, the following results were obtained to 31 December 2020:
Card & Merchant Solutions, representing 67% of the total revenues generated by the Group - approximately divided between 64% for activities related to issuing services and 36% for acquiring services - recorded revenues of €499 million, up 2% compared with 2019, benefiting from a growth in transactions volumes;
Digital Payment Solutions, representing 21% of the Group's total revenues, recorded proceeds of €155 million, up 4% compared to 2019. The segment was boosted by the trend in volumes processed, which were not impacted by the economic contraction due to Covid-19, and were especially related to PagoPA (+76% YoY) and corporates (Telcos, Utilities, Retailers) using Gateway services for the collection of payments from their customers (+8% YoY);
Capital Market & Network Solutions, representing 12% of the Group's total revenues, recorded proceeds of €94 million, up 1% on 2019, due to the growth in Network services volumes processed.
Despite the complexity of the current context, SIA Group can count on a diversified and resilient business model, thanks to 32% of revenues generated abroad and about 50% of total revenues associated with the installed base (number of POS terminals, number of cards managed, etc.), fee-based services and development activities, therefore not directly impacted by the dynamics of volumes in the short term.
EBITDA reached €285 million, up 3% compared to the previous year with a 38% EBITDA margin.
In 2020, costs amounted to €463 million, with an increase of 2% YoY due to higher personnel costs incurred for organic growth and operating costs (+1% YoY) related to regulatory compliance, the development of new technology platforms and, in general, increased processing capacity.
Investments amounted to €93 million, substantially in line with 2019.
At 31 December 2020, Net Financial Debt was €688 million (2.4x EBITDA) compared to €812 million at the end of 2019 (2.9x EBITDA), a significant improvement thanks to cash generation during the period in question.
PRELIMINARY CONSOLIDATED FINANCIAL RESULTS - FOURTH QUARTER 2020
In the fourth quarter of 2020, SIA Group recorded revenues of €222 million, up 7% q/q, while EBITDA amounted to €89 million, with a 13% increase q/q.
At the level of the market segments in which SIA Group operates, the following results were obtained in the fourth quarter:
Card & Merchant Solutions, recorded revenues of €143 million, up 9% compared to the same period in 2019, benefiting from the addition of new customers in Italy and abroad, as well as from an increase in the number of transactions processed over the same quarter of the previous year and the development of anti-fraud services;
Digital Payment Solutions, recorded revenues of €50 million, with a 3% increase compared to the same period in 2019. This segment continues to be positively affected by the trend in volumes managed, which were not impacted by the economic downturn generated by Covid-19, and benefited from the start-up of a number of new corporate clients;
Capital Market & Network Solutions, recorded revenues of €29 million, up 4% compared to the same period in 2019, due to the growth of volumes managed.
In the fourth quarter of 2020, costs amounted to €132 million, up 3% q/q due to personnel and operating costs.
MAIN EVENTS AND BUSINESS INITIATIVES STARTED UP IN THE FOURTH QUARTER OF 2020
On 4 October, SIA and Nexi signed a memorandum of understanding regarding the integration of the two groups through the merger by incorporation of SIA into Nexi. The transaction is conditional upon the satisfactory outcome of a reciprocal confirmatory due diligence process on Nexi and SIA, the required approvals by the corporate bodies of the entities involved in the transaction in relation to the execution of binding agreements, the absence of an obligation to launch a mandatory takeover offer on the New Group, as well as upon the obtainment of required consents and authorizations, of both a contractual and regulatory nature (including the authorization by the relevant Antitrust authorities and, where applicable, the Bank of Italy). The Parties aim to complete the transaction by the summer of 2021.
On November 15, Nexi and Nets announced the signing of a binding framework agreement for the integration of the two groups through merger that will be entirely carried out in shares. The transaction is subject to a vote through the so-called whitewash mechanism in the context of the Extraordinary Shareholders' Meeting called to approve the merger in the first quarter of 2021.
Upon completion of the aforementioned transactions, the new group born from the combination of Nexi, Nets and SIA will be one of Europe's leading PayTechs with unique scale, geographical presence and expertise capable of promoting the transition to a cashless and digital economy in Europe.
Card & Merchant Solutions
SIA launched with INFORM a new digital service for banks, payment service providers and other financial institutions across Europe to allow their customers to speed-up the authentication process for online payments.
On 5 October, UniCredit and SIA confirmed that they had entered into exclusive negotiations on the current outsourcing agreement for the provision of a number of processing services in Italy, Austria and Germany relating to payment card transactions and the management of POS and ATM terminals and its renewal until 2036.
Digital Payment Solutions
Enel X Financial Services signed a strategic partnership with SIA for the design and realization of new mobile banking solutions.
SIA will enable banks, corporates, public administration bodies and FinTechs for the new “Request to Pay” (R2P) service on EBA Clearing’s technology infrastructure, compliant with the European Payments Council (EPC) scheme.
The Central Bank of Iceland (CBI) and SIA went live with the new real-time gross settlement system (RTGS) and the new instant payment platform.
Capital Market & Network Solutions
The European Central Bank (ECB) chose SIA for its connection to the Eurosystem market infrastructures through a single access interface (Eurosystem Single Market Infrastructure Gateway - ESMIG).
With around 100 Italian banks connected, Spunta Banca DLT, a project promoted by Abi and coordinated by Abi Lab, which uses the blockchain network provided by SIA for the reconciliation of reciprocal accounts, is now fully operational.
SIA signed a partnership agreement with Hex Trust to provide innovative digital asset services to European financial institutions enabling their customers to access new investment opportunities based on blockchain technology.
SIGNIFICANT EVENTS OCCURRING AFTER THE CLOSE OF THE FINANCIAL YEAR 2020
On todays’ date, following the approval of the Boards of Directors of Cassa Depositi e Prestiti, CDP Equity, Mercury UK, SIA and Nexi, the final agreement relating to the merger by incorporation of SIA into Nexi (the “Merger” and the “Framework Agreement” respectively), was signed in line with the memorandum of understanding signed and announced on 5 October 2020. The completion of the Merger is subject to the fulfilment of certain standard conditions precedent for transactions of this type, among which the obtainment of the appropriate authorizations including that of the relevant Antitrust Authority. The transaction is also subject to a vote with the so-called whitewash mechanism[1] in the context of the Extraordinary Shareholders' Meeting of Nexi called upon to approve the Merger.
The Framework Agreement provides that if, as expected, the completion of the planned merger by incorporation of Nets into Nexi (the "Nets Transaction") occurs prior to the completion of the transaction with SIA, CDP Equity will be entitled to call for a capital increase of SIA, for the purpose of offsetting the dilutive effect on its prospective equity stake in the capital of Nexi as a result of the completion of the Nets Transaction.
Still in the anticipated event that the Merger occurs subsequent to the completion of the Nets Transaction, a shareholders' agreement will be signed by Mercury UK, CDP Equity and FSIA together with the current Nets shareholders.