Milan, 11 March 2016 – The Board of Directors of SIA, meeting under the chairmanship of Giuliano Asperti, has examined and approved the Draft Financial Statements at 31 December 2015.
The results achieved by SIA Group highlight an improvement over those set out in the Strategic Plan and those of the 2014 financial year – which had even benefited from extraordinary incomes deriving from the migration to SEPA standards – thanks to the growth in electronic payment transactions, the rise in volumes of traffic on the SIAnet network, the acquisition of new customers and cross-selling, as well as the development of new services and products.
The achievement of these results were made possible by the quality of the solutions offered and absolute reliability in the management of “mission-critical” infrastructures, with service availability levels of the highest standards on the market.
“2015 was a year of confirmation and growth for SIA: all the economic and business indicators were up compared to 2014, a year that had already been exceptional due to the migration to SEPA payments, for which SIA manages the pan-European platform on behalf of EBA Clearing. Also for the coming three-year period, the company will continue to pursue excellence as the key success factor in mission-critical business sectors to achieve three principal objectives contained in the 2016-2018 Business Plan: organic growth, maintenance of profitability and growth in size through extraordinary corporate operations,” commented Massimo Arrighetti, Chief Executive Officer of SIA.
MAIN ECONOMIC-FINANCIAL RESULTS OF SIA GROUP
In 2015, Group revenues rose to €449.4 million with a growth of €23.1 million (+5.4%) over 2014. The Cards segment represents 49% of revenues, Institutional Services 26% and the Payments segment 25%.
At geographic level, revenues in Italy are €355.7 million, up €14.2 million (+4.2%), while those from abroad reached €93.7 million, a rise of €8.9 million (+10.5%).
Operating costs amounted to €193.4 million compared to the €178.2 million of 2014 (+8.5%).
Staff costs are €133.4 million against the €131.2 million of the previous year (+1.7%).
On 31 December 2015, the Group had 1,612 employees with an increase of 5% on 2014.
Also on the rise in 2015 was the gross operating margin which reached €123.9 million with an increase of €1.3 million (+1.1%) and the EBIT which was €100.5 million, €2.7 million higher than the year before (+2.7%).
The pre-tax result closed with profits of €100.6 million, up €1.5 million (+1.6%).
Net profit also rose to €69.8 million, growing by €4 million (+6.2%).
Another highlight is the improvement in the net financial position which climbed to €108.7 million with an increase of €33.2 million (+44%).
The investments made in 2015 amounted to €20.7 million in contrast to the €12.2 million of 2014, up by €8.5 million (+69.7%).
% on Revenues
|EBIT (operating result)|
% on Revenues
% on Revenues
% on Revenues
|Net Financial Position||108.7||75.5||33.2||44%|
Turning to the main consolidated economic-equity indices, it should be underlined that ROE and ROI remain at levels higher than the reference market. The reduction – whilst in the presence of development of the company both in terms of revenues and of profitability – is connected to the policy of asset strengthening pursued through the increase in the net worth from €181.1 million in 2014 to €222 million in 2015 (+22.6%).
Net Profit / Net Worth
|Cash and cash equivalents / Current liabilities||1.18||0.88|
MAIN ECONOMIC-FINANCIAL RESULTS OF SIA S.p.A
2015 saw SIA’s revenues rise to €388.8 million with a growth of €51.9 million (+15.4%).
EBITDA also increased to €116.6 million, up by €15 million (+14.7%) and the operating result reached €95.4 million with an improvement of €15.3 million (+19.1%).
Net profit rose to €73 million with an increase of €12.7 million (+21.1%) over 2014.
% on Revenues
|EBIT (operating result)|
% on Revenues
% on Revenues
|Net Financial Position||94.4||58.4||36.0||61.8%|
SIA’s results also include the values deriving from the merger by incorporation of subsidiary RA Computer and of the “Gateway” business branch of TSP, effective on 1st January 2015.
The economic-financial results of SIA Group and of SIA S.p.A. for the 2015 financial year in addition to those of the previous year as a comparison were for the first time drawn up according to the principles of IAS (International Accounting Standards) and IFRS (International Financial Reporting Standards). This permits a clearer comparison of the results with foreign companies, consistent with the process of internationalization underway, as well as paving the way for the company’s listing in a regulated market.
In 2015, the Group handled the overall settlement of 9.9 billion transactions (+7.7% compared to 2014), 3.3 billion card transactions (+11.2%) and 2.8 billion payment transactions (+3.6%) relating to credit transfers and collections.
On the financial markets, the number of trading and post-trading transactions rose to 41.7 billion from the 30.2 billion of 2014, an increase of 38%.
SIA handled a volume of traffic of 358 terabytes of data on the 180,000 km of the SIAnet network, a rise of around 10% on 2014, with total infrastructure availability and service levels of 100%.
|Card transactions||3.3 billion||3.0 billion||11.2%|
|Payment transactions||2.8 billion||2.7 billion||3.6%|
|Settlement of transactions||9.9 billion||9.2 billion||7.7%|
|Trading and post-trading transactions||41.7 billion||30.2 billion||38%|
|Data carried on the network||358.2 terabytes||326 terabytes||9.9%|
(1 terabyte = 1,000 billion bytes)
2015 saw consolidation of the trend of change in the payment habits of consumers, with the increasingly frequent use of card and electronic payment instruments in place of cash.
Following this evolution, despite the low growth in consumption and economic activity, last year SIA handled around 3.9 billion issuing and acquiring transactions in the e-money sector, up by 10.2% on 2014, mainly due to the growth in transactions in the international debit networks Maestro and Visa Electron/Vpay (+24%).
Also on the increase (+9.5%) are ATM withdrawals and POS purchases made with debit cards in the domestic Bancomat and PagoBancomat circuits and operations by credit card (+4.3%). SIA managed a portfolio of over 65 million payment cards (+0.9%).
Over the course of 2015 there was further interest from the banks in solutions for digitalization of physical payments, driven by the launch by the big web players of new mobile proximity payment services, based on virtualization of payment cards.
In this field, SIA has continued developing and creating innovative mobile payment solutions with a special focus on Host Card Emulation (HCE) technology which allows data identifying the payment card to be stored on a cloud in total security. This new service represents an important contribution to the SIA offering aimed at supporting banks in the pathway of innovation, above all with regard to the payment experience of the end customer.
Mention should also be made, in the acquiring area, of the agreement for the handling of the payment transactions of Italian JCB merchants via the SIA technology platform.
In the foreign market, also in 2015 business initiatives were focused on the European financial institutions. Business development initiatives were launched in the countries in Western Europe with the highest potential, namely Germany, France and the United Kingdom, while in Central-Eastern Europe, efforts were concentrated on Poland (where a representative office was opened), Hungary, Czech Republic, Slovakia and Romania.
An agreement was signed with German company INFORM aimed at offering a new fraud prevention and risk management service on the acquiring side.
In line with the developments included in the Strategic Plan, the SIA EasyShop initiative was launched with the aim of providing innovative, ad hoc solutions to merchants, through integrated tools of telephone land lines and mobile phones, and access to internet and WiFi, equipped with value added functions to support the business.
In the area of payments, the trend of migration from cash to electronic payments was confirmed. In 2015, SIA recorded an increase in electronic payments which reached 2.8 billion, mainly due to the strong development of secure messaging (+30%) and payment factory (+15%) services, addressed above all to the Corporate and Public Administration clientele, which have offset the slowdown in volumes on non-SEPA payment instruments (-6%).
Over the past year, companies have shown a strong orientation towards international collection and payment systems and service solutions capable of improving the control of treasury processes. The introduction of SEPA has contributed to simplifying procedures of dialogue with the banking system, promoting the startup of projects with an international scale. To meet these requirements, the Multinetwork service was developed further, permitting the centralized management of inter-bank relations at domestic and cross-border level and now allowing financial counterparts to be reached in 13 countries in the Euro zone.
The growing interest in B2B electronic billing is confirmed, in the wake of the regulatory evolutions in the B2G area. Also in constant development are services aimed at Payment Institutions, both at customer portfolio level and in terms of the offering, further bolstered by new solutions for the management of collections and payments made with debit and credit cards.
Multichannel gateway services were also particularly well appreciated, both by utilities and by the large-scale retail sector: thanks to SIA, the latter has increased its transaction volumes, especially regarding bill payments and the management of lunch vouchers.
In terms of innovation, the marketing got under way for “Jiffy”, the “Person to Person” (P2P) payments service which via an app permits users to send and receive money in real time from a smartphone by selecting a beneficiary from their telephone contacts list: 19 Italian bank groups have joined (representing over 80% of all current accounts) and of these, 5 launched the service in the second half of 2015. At the end of December, the number of registered users surpassed the 250,000 mark.
As of last year, it is also possible to make donations to charity organizations with Jiffy. Among the forthcoming developments of the service will be payments to participating merchants (P2B) and Public Administration bodies (P2G): in the latter case, Jiffy will allow users to receive notice of payment expiry directly, in accordance with the guidelines of the Agency for Digital Italy (AgID).
Activities in the Public Administration market, through a specially set-up Division, were focused on expansion of the customer and services portfolio and on the launch of the “SIA EasyCity” platform for the digitalization of the collection and payment processes of local PA bodies.
In particular, 2015 saw the successful launch of the electronic billing service and the creation, in collaboration with major domestic bank groups, of a solution to simplify payments by citizens to Public Administration bodies, through the use of AgID’s "PagoPa" Payments Hub. This solution enables PA bodies to simplify all the processes of integration with PagoPa and to manage efficiently all the phases of accounting and reconciliation, thereby having at their disposal constant, real-time monitoring of financial flows.
Institutional Services Sector
2015 also saw confirmation of the trend of growth in transactions in the Institutional Services sector which reached 9.9 billion (+7.7%).
There was a progressive increase in volumes handled by STEP2, EBA Clearing’s pan-European technology platform for the settlement of SEPA payments to which over 4,800 financial institutions in 34 countries are connected: compared to 2014, SEPA Credit Transfers grew by 6.4%, while SEPA Direct Debits saw an increase of +1.7%. SIA guaranteed excellent service levels, offering EBA Clearing and subscribing banks 100% availability for the third straight year.
Over the course of the year, interest intensified amongst a wide number of players in solutions that guarantee real time settlement of retail payments (so-called “Instant Payments”), which represent an important support to the increasingly widespread use of payment instruments on mobile platforms and to the development of e-commerce. The European Central Bank set up a working group to draw up guidelines which Instant Payments solutions will need to comply with, considering the significant growth in volumes forecast for the coming years. As far as Instant Payments in particular are concerned, SIA recently signed a letter of intent with EBA Clearing regarding the development of a pan-European infrastructure for real time payments by the fourth quarter of 2017.
To meet the emerging needs of the Central Banks which are already SIA customers, there has been considerable development in the portfolio of offers concerning Real Time Gross Settlement (RTGS) systems and the management of low value payments (Automated Clearing House - ACH).
In 2015, SIA also consolidated its relations with the European Central Bank becoming supplier of its connectivity service for access to Target2-Securities, the new single European platform for settlement of domestic and cross-border securities transactions. The success of the SIA solution has paved the way for the development of collateral services alongside the base network service, further proof of the financial market’s interest in multi-provider solutions.
SIA has confirmed its role as leading technology partner to London Stock Exchange Group, due to the excellence of the technological services supplied for the fixed income trading (MTS) and post-trading (Monte Titoli) service platforms, alongside the development of new functions.
In addition, SIA supported the startup of operations of Monte Titoli, leader amongst the major European central depositories, on the new European platform Target2-Securities.
2015 also saw the strengthening of SIA’s “Financial Ring”, which enables financial intermediaries to access, via a single high speed, low latency network infrastructure, the main international stock markets using hubs in Milan, London, Frankfurt, Budapest and New York. At the end of 2015, 29 trading venues operating in Europe and the United States were connected compared to the 23 of the previous year.
A further point to highlight is that in 2015 the SIAnet network managed a total of 818 million messages (+20.8% on 2014) with a daily average of 3.3 million. The total number of active nodes grew from 561 to 579 (of which 415 are in Italy and 164 in the rest of Europe).
For the sixth year in a row, the service level of network services was 100%, thereby ensuring the full availability of the infrastructure 24 hours a day, 365 days a year, supporting the supply of SIA’s services.
In addition, the evolution of the SIA-EAGLE proprietary technology continued with the goal of consolidating the positioning on the foreign market and addressing the emerging needs of the new European regulations (for example, Market Abuse Directive II, Market Abuse Regulation, MiFID II) as well as the international ones, with special attention to the IOSCO guidelines. At present there are over 100 financial intermediaries located in 18 countries that use SIA’s compliance and surveillance systems.
In June 2015, the Bank of Italy granted SIA a further three-year license at the same conditions for the Central Interbank Alarm (CAI) service.
PROPOSED DIVIDEND AND CONVOCATION OF THE SHAREHOLDERS’ MEETING
Thanks to the results achieved in 2015 with a net profit of €73 million and in the light of the objectives of growth - through possible extraordinary corporate operations – and of stabilization of profitability in the timescale set out in the three-year plan, the Board of Directors will propose to the Shareholders’ Meeting – called on 15 April at 12.00 noon at the SIA headquarters in via Gonin 36, Milan - the distribution of an ordinary dividend for the financial year 2015 of €49.69 million corresponding to €0.29 (+38% compared to 2014) for each of the 171,343,227 shares. Once approved by the Shareholders’ Meeting, the abovementioned dividend will be paid as of 21 April 2016.
Last year, the shareholders received an ordinary dividend of €35.68 million corresponding to €0.21 for each of the 169,932,974 shares.
PLAN FOR STOCK MARKET LISTING
In addition, SIA set in motion the plan for a listing in the Mercato Telematico Azionario (“MTA”), organized and managed by Borsa Italiana S.p.A., which it is expected could take place by the close of 2016.
The details of the structure of the offering, the means, the terms and the conditions of the listing will be evaluated and decided in subsequent meetings in accordance with the wishes expressed by the shareholders of the company.
THE POSITIONING OF SIA GROUP
In 2015, SIA Group confirmed its role as a leading player in the processing of electronic transactions and in the management of European service infrastructures, in card processing, payment services and systems, and institutional services for financial intermediaries.
The geographic coverage of the services supplied to customers now extends to more than 40 countries in Europe, the Middle East and Africa.
SIA increasingly intends to position itself as a high quality player, at domestic and international level, leveraging its distinguishing factors of reliability, security, solidity and innovation. The pursuit of excellence continues to represent for SIA the key factor in its success in ever more competitive markets.
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