- Revenues of €525.8 million (+0.5% YoY) of which about 50% related to the installed base, fee-based services and development activities, not impacted by the contraction in volumes related to the pandemic
- EBITDA of €194.9 million (-0.7% YoY) in line with the performance of the previous year thanks to the activities undertaken to increase the efficiency of operating costs
- In the third quarter of 2020, revenues of €189.9 million (+2.3% q/q) linked to higher volumes processed and EBITDA of €81.1 million (+8.3% q/q)
- Confirmation of the resilience of the business model and the ability to begin and complete new partnerships with banks and large corporates
- Guarantee of operational continuity and support in important development projects of Italian and international clients despite the limitations related to Covid-19
Milan, 9 November 2020 – SIA's Board of Directors, meeting under the chairmanship of Federico Lovadina, approved the consolidated financial results as at 30 September 2020, substantially in line with those of the first nine months of 2019 and growing in the third quarter of 2020, despite the economic contraction caused by Covid-19.
CONSOLIDATED FINANCIAL RESULTS AT 30 SEPTEMBER 2020
In the first nine months of 2020, SIA Group recorded consolidated revenues of €525.8 million, an increase of 0.5% YoY, entirely on an organic basis. Revenues maintain a geographical diversification in line with 2019 - about 70% in Italy and 30% abroad.
EBITDA is equal to €194.9 million, down 0.7% compared to the same period in the previous year with a 37% EBITDA margin.
At the level of the market segments in which SIA Group operates, the following results were obtained as of 30 September 2020:
- Card & Merchant Solutions, representing 68% of the total revenues generated by the Group - approximately divided between 63% for activities related to issuing services and 37% for acquiring services - recorded revenues of €355.9 million, in line with the same period in 2019. In the third quarter, the segment benefited from significant growth in volumes and revenues (+2.1% YoY);
- Digital Payment Solutions, representing 20% of the Group's total revenues, recorded proceeds of €104.9 million, up 4.5% compared to the same period in 2019. The segment was positively impacted by the trend in volumes processed, which were not impacted by the economic contraction linked to Covid-19, in addition to Gateway services (+12% YoY) and Instant Payments (+9% YoY) and the acquisition of new customers both in Italy and abroad;
- Capital Market & Network Solutions, representing 12% of the Group's total revenues, recorded proceeds of €65 million, down 0.8% compared to the same period in 2019, due to the drop in Network services volumes processed (-3% YoY).
In the first nine months of 2020, costs amounted to €330.3 million, with an increase of 1.4% YoY due to higher personnel costs (+1.3% YoY) incurred for organic growth, the strengthening of the management team and higher operating costs (+1.5% YoY) related to regulatory compliance, the development of new technology platforms and, in general, increased processing capacity.
At 30 September 2020, Net Financial Debt was €716 million compared to €812.4 million at the end of 2019, a significant improvement thanks to cash generation during the period in question.
Despite the complexity of the current context, SIA Group can count on a diversified and resilient business model, thanks to 30% of revenues generated abroad and about 50% of total revenues associated with the installed base (number of POS terminals, number of managed cards etc.), fee-based services and development activities, therefore not directly impacted by the dynamics of volumes in the short term.
The Group's objective is to maintain the same level of revenues generated in 2019 through the realization of the strategic development and growth initiatives included in the Industrial Plan approved in February 2020. At the same time, the Group pursues the objective of mitigating the impact of Covid-19 on EBITDA and cash-flow through actions to contain all types of costs and the re-planning of less strategic projects and investments.
CONSOLIDATED FINANCIAL RESULTS - THIRD QUARTER 2020
In the third quarter of 2020, SIA Group recorded revenues of €189.9 million, up 2.3% q/q, while EBITDA amounted to €81.1 million, with a 8.3% increase q/q.
At the level of the market segments in which SIA Group operates, the following results were obtained in the third quarter:
- Card & Merchant Solutions, recorded revenues of €133 million, up 2.1% compared to the same period in 2019, due to increased use of digital payment services;
- Digital Payment Solutions, recorded revenues of €34.8 million, with a 5% increase compared to the same period in 2019. This segment benefitted from the trend of the volumes processed, not impacted by the economic downturn caused by Covid-19;
- Capital Market & Network Solutions, recorded revenues of €22.2 million, down 0.7% compared to the same period in 2019, due to the drop in network services volumes managed.
In the third quarter of 2020, costs amounted to €108.5 million, down 2.2% q/q thanks to the continued efficiency measures put in place by the Group.
MAIN BUSINESS INITIATIVES LAUNCHED IN THE FIRST NINE MONTHS OF 2020
Card & Merchant Solutions
SIA was chosen by LBB Landesbank Berlin, the largest co-branded credit card issuer in Germany, to create a management platform for cards issued in collaboration with leading national business partners.
In Italy, SIA is also a partner of Flowe (Mediolanum Banking Group) for the development of digital banking services in the areas of e-money, payments, current accounts, loans and savings management, while in the area of smart mobility solutions, SIA has created the digital platform that allows passengers to pay for their travel tickets using contactless cards on Turin and Bari public transport services.
Digital Payment Solutions
In early 2020, SIA signed a partnership with Swedbank, the leading bank in Sweden, Estonia, Latvia and Lithuania, to enable instant payments by connecting with EBA Clearing's pan-European RT1 system.
The Reserve Bank of New Zealand (RBNZ), New Zealand’s central bank, and SIA launched the new real-time settlement systems for large-value payments and securities transactions.
Capital Market & Network Solutions
SIA has launched the blockchain infrastructure enabling the "Spunta Banca DLT" application, the initiative promoted by ABI and coordinated by ABI Lab, which allows for the management of mutual accounts among Italian banks through the use of Distributed Ledger Technology.
SIGNIFICANT EVENTS AFTER THE END OF THE THIRD QUARTER
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 subject to the satisfactory outcome of the mutual confirmatory due diligence on Nexi and SIA, to the necessary approvals of the corporate bodies of the parties involved in the transaction for the signing of binding agreements, to the absence of obligations to call a public tender offer on the shares of the new Group, as well as to the obtainment of the necessary consents and authorizations, both contractual and regulatory (including authorization by the relevant Antitrust Authorities and, where applicable, by the Bank of Italy). The completion of the transaction is expected by summer 2021.
SIA and Enel X Financial Services announced the signing of a strategic partnership for the design and implementation of new mobile banking solutions.
GLOSSARY OF THE PERFORMANCE INDICATORS
In order to allow for better evaluation of the performance of its economic management and financial situation, SIA Group uses the following performance indicators:
- EBITDA, obtained by adjusting the profit for the period for income taxes, financial income and expense, income and expense on equity investments, the result of the management and trading of financial assets and liabilities, depreciation and amortization and non-recurring incomes and charges;
- Revenues include revenues and other income and are calculated net of commissions expense in connection with payment services;
- costs are calculated net of commissions expense for payment services, reclassified as a reduction of related revenues;
- Net Financial Debt represents an indicator of the financial structure and is calculated as financial debt net of cash and cash equivalents, as well as financial assets and short-term financial receivables.