Thank you, and good morning to everyone. Welcome to our call for first quarter results for 2022.

As usual, I'm here with our CFO, Bernardo Mingrone; and Stefania Mantegazza, who is leading our Investor Relations activities; as well are here with us some colleagues in case there are specific issues that you want to cover that require their support. As usual, for our quarterly Q1 and Q3 calls, I will give you a quick update on volume dynamics, and I'll also spend a few words on key business updates.

Then I will hand over to Bernardo, who will be covering financial results. And I will come back for closing.

And obviously, we will have, as usual, time for your questions. So let me start with the key messages of the day on Page 3 of the document that was made available.

Three messages, as always. First of all, we've seen an accelerated volume growth in the first quarter across all our geographies, and this acceleration has been continuing throughout the quarter into the month of April.

As far as Italy is concerned, we have seen a double-digit year-on-year growth and as well a double-digit versus 2019. In particular, we've been growing 38% versus last year in April.

At the same time, we have seen a double-digit volume growth year-on-year both in the Nordics and in Germany, in the DACH region more broadly, with a further acceleration in April that has been at 29% up for the Nordics and more than 50% up for Germany. The travel sector is continuing to recover nicely.

It is now close to 70 – it has been actually in the quarter close to 75% of what it was in 2019, pre-COVID. And in the month of April, we have seen a further improvement as well.

Like we have observed in the recent past, SMEs have been accelerating in an even stronger way compared to the larger merchants. And last but not least, we continue to see acceleration of the shift from cash to digital payments across all our geographies.

Second key message. In the quarter, we have seen strong financial performance.

In particular, revenues have been growing at a nominal rate of 7% or slightly above 7%. The underlying number is actually more than 9% growth if you exclude some exceptional project work that we had last year in Italy, so it would be more than 9% growth.

And this is actually despite the fact that – the Italian market for us, as you know, accounts more than half of the revenues, has seen in the first quarter of this year a slower pace of reopenings compared to other European geographies. In particular, Merchant Services, we grew it about 13%.

This would be 15% net of those projects that I've mentioned. In the next geographies, we have been growing close to 20%, 19 point something percent.

Last but not least, as far as EBITDA is concerned, EBITDA has grown more than 17%. Actually, if you neutralize the effect of last year projects, this growth would be at around 20%.

And with this 17%, we are actually seeing margin expansion, which is 3.5 to 4 percentage points above last year EBITDA margin. Last but not least, we continue to progress in the creation of, what we call internally, the new Nexi.

We confirm our commitment from the beginning of the year of delivering at least €100 million cash synergies in the year. And at the same time, we continue to shape our portfolio.

We have just announced the full acquisition of Orderbird, a nice software company, a German software company specialized in software for restaurants, and more broadly, for the hospitality sector. This company is a leader in this space and is for us a strategic investment.

At the same time, we continue to focus our portfolio more and more on what is core and presenting stronger growth opportunities, and we have recently communicated also the sale of the non-SEPA clearing business in Italy. And this is something that, by the way, was also connected to the antitrust remedies that we committed to in the context of the combination with SIA.

And over the next weeks and months, we will continue to focus the portfolio, dismissing the businesses that are non-core. All in, we confirm the ambition for the year that, as a reminder, we did set back in February for the revenues growth anywhere between 7% to 9% for the year and for EBITDA growth anywhere between 13% to 16% for the year.

Now let me start with volumes, Page 4. And here, we made a change compared to the past.

We have moved to year-on-year comparison. So the numbers that you see on the lines in the page do compare 2022 with the same period of 2021.

We understand that's the way the market would like to start seeing these dynamics, to help you as much as we can. In the back half of this document, you also find the usual charts that we had in the past that were comparing this with 2019 as well.

Now starting with Italy. You see that Italy has been accelerating throughout the last three, four months and in April was growing actually 38% compared to same period of last year.

This acceleration has been mainly driven by a super strong acceleration in the high-impact sector, including travel, hotels, restaurants and those types of sectors. If you want to compare these numbers, April numbers, in particular, with pre-COVID, growth has been more than – about 24%, well, well supported by a continued very strong growth in basic services at 38%, but also a very strong rebound in the high-impact sector that are actually already 22% above pre-COVID levels.

On the right here, you also see the usual deep dive when we separate the performance of the Italian cards versus the one of the foreign cards, the cards used by the visitors to Italy coming from abroad. And here you see that while the Italian cards versus last year are continuing to grow at 26%, actually 29% versus pre-COVID, the foreign cards are accelerating in a very, very radical way, growing more than 400% in April and basically now being very close to the pre-COVID levels as well.

Bottom left, when it comes to the Nordics, also in the Nordics we are seeing similar dynamics, acceleration over the last few months, volumes up 29% in April compared to last year, again here, well supported by a strong acceleration from our impact sectors at 73%. If we compare ourselves with pre-COVID, also a nice growth year of 17% for the total, strongly supported by the basic consumption sectors at almost 50% growth versus pre-COVID, but also now having the high-impact sectors also in the positive space at plus 8%.

Last but not least, Germany. Germany, where – as I always want to underline as – in terms of volumes, not in terms of revenues, but in terms of volume high weight of the travel sector.

Volumes have been growing at around 50% throughout the last few months above last year. Again, here, strongly supported by a very fast recovery in high-impact that is above 100% versus last year.

If we compare ourselves with pre-COVID, volumes are still at minus 27%. Net of some businesses in the travel sector that we have decided to discontinue, it would be basically more or less back to pre-COVID levels, strongly supported by the basic sector that is actually up more than 40% versus pre-COVID.

So that's the picture that we see on volumes, and we expect this dynamics and this recovery to continue throughout the rest of the year. Moving to the next page.

Let me just give you a quick update on the key progresses that we've seen – we had over the last few months. In the Merchant Services sector that accounts for more than 50% of our revenues.

And here, we do it by segment. Let me start with SMEs.

SMEs represent more than 50% of our revenues in the Merchant Services space. Volume have been up 36% compared to last year.

So strong acceleration, as we said before, as shops do reopen. Here, we've seen a very good performance across all geographies with a special acceleration in Germany and in Poland.

We have seen a continued success and also acceleration of our more recent digital proposition both in Germany and in Italy, SmartPay and SmartPOS in Italy. Third, we have launched our SoftPOS tap-on-phone proposition in the Nordics and in Hungary.

And now we are preparing for the launches in Italy, in Germany and in other geographies as well during the rest of the year. Again, this is a very important proposition because it is targeting both the new card merchants that start with – want to start with a light proposition, but also it's a great add-on for larger merchants that need to have the ability to collect payments across their stores or across their restaurants and bars.

And last but not least, a specific focus over the last few months and that we continue in the future around partnerships. We continue to progress our partnership portfolio both with cross-market leaders, but also vertical specialists.

I think we named in the past a few of them, and you find on the bottom right some names. In the context of these specific efforts with software companies, that's where you should position our acquisition of Orderbird.

The strategy is not to go out and buy software across the board, not at all. That will vary by verticals.

That will vary by geography as well. But we really believe that this small acquisition is really giving us the possibility to go much deeper in this space.

And by the way, in the sector, that is the most advanced when it comes to software and payments integration that is actually hospitality, restaurants, even more specifically. Second area, e-commerce.

That accounts for about 20% of our revenues in Merchant Services. Here, volume growth has been about 24%, starting from a level last year that was already very, very high in acceleration.

Here, we've seen a continued strong performance of our advanced Easy Collecting PSP proposition in the Nordics, and is now accelerating also in Germany, where we have launched towards the end of last year. We continue to see good traction for our Account-to-Account proposition both in Poland and in Finland.

We also progress on our buy now, pay later offer in Germany through RatePay. RatePay, in particular, signed an exclusive relationship to provide white-label invoice payments with PayPal that we consider very strategic.

And last but not least, we continue the evolution of our proposition in Italy, especially, I would say, for mid SMEs, where we are integrating more and more some capabilities that we have in Nets, such as, for example, one-clean-checkout or Collecting PSP capabilities. Last but not least, larger merchants that do account for about 10% of our revenues.

Here, the volume growth has been also nice and strong, about 19% in the quarter. Here, as you know, our focus is mainly on the large domestic and regional omnichannel channels – our omnichannel merchants.

On the right, you find some of the names of the more recent key wins or renewals with a specific focus in the retail grocery, apparel. At the same time, we continue to progress also on cross-border merchants, where we see a good traction as well.

We are happy to underline the fact that on the back of the combination with SIA, we're actually very pleased to see that the combination of our capabilities and – the former Nexi capabilities and the SIA capabilities is allowing us really to win new business and expand our ability to serve large complex corporates in Italy. And obviously, we will consider what we can export of these in the other geographies as well.

And last but not least, also in this space, partnerships are very, very important. And we are progressing in integrating with ERP and CRM platforms for larger merchants as well.

Here on the right, you see the name of SAP, which is clearly an important partner in this space, but many others will follow as well. Now let me stop there, and I hand over to Bernardo, who will take you through the financials.

Thank you, Paolo, and good afternoon to all. So I'm starting from Slide 7 with an overview of group revenues and EBITDA.

So before we comment on the strong revenue growth we've seen in the quarter, let me just underscore how important it is to understand comp in terms of measuring and benchmarking performance against 2021. This is true for us within Nexi and the various geographies we're in, and it's true for benchmarking our performance against competitors.

It really makes a difference as to what stage of the COVID cycle a country was in last year in terms of degree of openness or closure of shops in terms of how our performance looks compared to last year. So really, it's always important to understand comp; this time around, it's a little more important.

So within this context, I think revenues grew very healthily. We added almost €50 million of revenues year-on-year, and this translated into an almost identical increase in EBITDA.

And you see growth in revenues is 7%, which is within our guidance range. Specifically, the Nexi comp is important because last year we had highlighted how we had some one-off nature revenues coming from a project driven by the integration of UBI into the banks that bought it, Intesa and BPER.

That was booked almost entirely in the month of March. And if we normalize for that one-off revenue, growth in the quarter revenues would actually be north of 9%, so above the high end of our guidance.

As I said, this revenue growth translated in an almost euro-for-euro increase in EBITDA. So EBITDA grew 17.4%.

If we normalize for that one-off in 2021, that growth would actually be 20%. And this fed through into a margin which accreted by 375 basis points in the rounding.

Here, you lose 4 percentage points overall rounded. But a strong, I would say, operating and financial performance in this quarter.

And I think – when I speak of comp, just remember – I mean, it will be true in the second half of the year. We see an acceleration throughout the first half of the year.

So the second quarter which further accelerates compared to the first quarter. And in the second half, a return to normalization given that last year things were much more normal in terms of degree of openness given the success of the vaccination throughout Europe.

Moving on to Slide 8 and Merchant Services & Solutions. Within the overall growth we highlighted earlier, Merchant Services & Solutions grows 13%.

If we normalize for the Italian component of that one-off, it will be 15%. This is driven primarily by volume growth.

You see international schemes growing north of 20% year-on-year. Even if we include domestic schemes, we're north of 20% on acceleration of the value of transactions across the group.

Within this context, I think Nets performed particularly well with a growth of 19% in terms of its Merchant Services division in the first quarter against the first quarter of 2021. Again, as I said, comp helps in that respect, but the performance was very strong at Nets too.

Within the volume growth, I would highlight – and I think you saw it earlier in Paolo's slide on business. We have SMEs, which are accelerating faster than LAKAs, and that's obviously good for us.

But in general, I'd say physical commerce has accelerated faster than e-commerce, which is, I'd say, something we aren't normally used to. But again, a sign of the times in terms of how COVID has impacted the year-on-year dynamics.

So a strong quarter for Merchant Services, which is more than half of our business, and it's 2/3 driven by volume growth. Moving on to Cards and Digital Payments on Slide 9.

You see here, we have a 5% growth in the quarter, 7% adjusted for the one-off, again, driven by the increase in volumes in – both in terms of managed transactions and the volume of transactions. In Italy, we have an ongoing phenomenon which is particularly accretive to us, which is a shift from domestic debit to international debit.

For us, it's like acquiring new clients effectively given the amount of work we do on international debit compared to domestic debit. And we have won interesting clients in the Nordic regions through the Nets platform.

Our focus remains on delivering CVM propositions to our customers outside of Italy, building on our experience in Italy, and trying to extend the licensing relationship we have with many Italian banks also outside of the Italian perimeter, which is also underlying some of our ambitions in terms of synergies. And we will update you on that as time goes by.

Digital Banking & Corporate Solutions, a smaller of our divisions, was most impacted in terms of the year-on-year comparison by the merger of UBI into BPER and to Intesa, twofold. One, we had project revenues last year in DBS, but we also lost an area of business, which is corporate banking for Intesa and the BPER client – Intesa client, which we don't do for them that we used to do for UBI.

If we normalize for this, performance was more or less flat in the year. In general, I would highlight how even €1 million or €2 million of revenues has an impact here given the size of this business compared to us.

Slide 11 shows geographically how our performance was in terms of the top line. So Italy would have been 9% normalizing for the one-off; Nordics, 7.5% – 7.6%; DACH and Poland with a very strong 20% top line growth helped by Poland, but also Germany performed well; and South Eastern Europe at 6%.

Moving on to costs. I think, obviously, to be fair, in the representation we should look at costs grow stop – or actually taking into account the effect of the project-related costs that I was normalizing for in the revenues.

And if you look at it that way, on a like-for-like basis costs grew 2%. And essentially, this is driven by the investment we're making in human capital in areas where we want to grow our business.

And we've spoken about that in the full year results when we said we were going to invest in certain areas and reinvest part of our synergies and you see that here. Part of the growth in HR cost is also to do, again, with comp.

When I mean comp, in terms of the fact that last year COVID had a greater impact on Nets performance compared to its budget than it did for Nexi. And therefore, we had a benefit in the second half of the year in terms of variable comp accruals of Nets.

And you remember the outstanding performance in the second half of Nets' EBITDA growth also helped by these cost reduction initiatives. This year, we're performing well and we're accruing to budget in terms of comp, and that feeds into the HR cost line.

Overall, operating costs would otherwise have been pretty much flat, I'd say 2% up overall, including HR. And this is ultimately together with the fact that the structure of the cost base is 3/4 fixed, and one quarter variable is what feeds into the operating margin accretion that I mentioned earlier.

Again, remember what I said about the phasing in the year. So we have – we gave guidance in terms of margin accretion for 2022.

In the quarter, we're doing better than the guidance. But as I said, in the year we have the benefit early on of synergies as they're coming due.

They were front loaded thanks to the work we did last year. And in the second half of the year, we have a normalization, which includes also the fact that we are investing, as I said, part of these synergies to grow businesses which are core to us.

Slide 13 gives you leverage. We are at 3x if you include synergies.

We'll speak to guidance in a second. We refinanced the SIA debt – completed the refinancing of the SIA debts.

So you see the gross indebtedness is coming down for the reimbursement of that component. Our mix is still three quarters, one quarter fixed to floating.

I would hand the floor back to Paolo for guidance and concluding remarks.

Thank you, Bernardo. As I've anticipated at the beginning of the call, we are just confirming our ambition for 2022.

Let me go through the key elements of it. Net revenue is expected to grow 7% to 9% in the year with a double-digit growth in Merchant Services & Solutions; by the way, you've seen very, very visible in the first quarter already.

EBITDA growing 13% to 16% with at least a 2 percentage point EBITDA margin expansion. Ordinary CapEx in the 8% to 10% range.

Non-recurring items: with transformation, integration costs actually decreasing very, very rapidly to basically half the level of what they were in 2021. And an overall investment of CapEx in transformation, integration of about €300 million in the period 2024 – up to 2024, 2025 on top of the ordinary CapEx.

And as Bernardo just underlined, continued organic deleveraging with a target net debt of about 2.5x EBITDA, including run-rate synergies with the current perimeter. So let me just close, again, reiterating the three key messages of the day.

We are seeing very strong volume recovery across all geographies with now very visible recovery also in the travel sector as well, more broadly, in the high-impact sectors. Number two, strong performance in the quarter on the top line, but most importantly, I would say, on the EBITDA line despite a not easy comparison with – for Italy, in particular, with last year.

And last but not least, continued progress in delivering our – the integration of our new company as a combination of delivery of synergies, and a continuous optimization of our portfolio. And on the back of this, we are confirming our guidance.

Let me just conclude before opening for Q&A that we currently plan to have our Capital Markets Day in September 2022. We've been looking through your schedules and many, many conferences that you are supposed to attend in the summer.

We felt that probably the second half of September this year is a good and maybe quieter moment for having our Capital Markets Day. So you will be soon receiving a more specific invitation for that.

Let me stop there, and let us open for Q&A as usual.

Great. Thanks very much.

Thanks for taking my questions. Just a couple for me.

The first would be just a little bit more detail, if you could provide it, on the exceptional projects you mentioned in relation to some M&A last year. Is that specifically just in the first quarter?

Or does that overlap into the second quarter at all? The second question would just be around the acceleration that you're expecting in the second quarter.

What – I guess, what's informing that? Obviously, you've got strong volume recovery.

But there is a, from what I can see, a 15-point tougher comp in the second quarter. So just kind of keen to see what's underpinning the confidence on the acceleration there?

And then just finally, on pricing trends in Merchant Services. Can you comment on the volume versus revenue and what that means in terms of take rates?

And essentially, what are the moving parts within that, would be really helpful? Thank you.

Hi, Alastair. Let me take the second and third, and will then hand over to Bernardo for the first and any further comment he may have.

On second quarter acceleration, I really want to underline again what Bernardo said. I think the best way to look at our plans is always to compare them with a normal year.

Unfortunately, the last normal year was 2019. Compared to that, we expect to see a continued acceleration throughout the year, which is consistent with the continued volume growth plus the effect of our initiatives.

While when you compare yourself with 2021, it's always a bit complicated; also because growth rates of 2021 compared to growth rates of 2020, that was also not a normal year. So it's really, really tricky to look at it that way.

If you compare it with 2019, now you should see – a continued acceleration is actually what we have in our own internal plans. As far as price is concerned, we don't observe – we're not observing any particular new news.

Obviously, take rates in this phase will technically decrease, because by definition – given the fact that we have a portion of our revenues – a bit less than half of our revenues, but we have a big portion of our revenues that are fixed and driven by the installed base, obviously, when then volume recover – volume grow as fast as they are growing right now, by definition the take rate calculated as total revenues divided volume by definition goes down. On the exceptional projects, Bernardo, from…

Yes. Just a bit of a background for Alistair maybe.

In last year – or two years ago, actually, our Italian bank called UBI was bought by Intesa, and then it was carved up and part of it was sold to BPER. All three banks were our clients, different service models that we did for the three banks.

So we did a bit of everything for UBI. And the work necessary to migrate clients activities, volumes from UBI effectively to Intesa and BPER generated project-related fees for us just north of €10 million, €12 million or so, something like that, which was spread across our three divisions.

As I said, we generated those revenues primarily in March. And it might happen again if another bank is bought and their clients, and they get merged into others.

We typically have kind of recurring project works. But given the size of that one and the one-off nature of it, we thought it was sensible to highlight it last year and do the same this time.

By the way, the impact on EBITDA is obviously much lower because it was primarily, I'd say, cost-plus kind of work we do for them.

Got it. Thanks very much.

Yes. Good afternoon.

Thank you. I wonder if I could follow up on the outlook for the rest of the year, and just push you to convert a little bit further the increasing volume trajectory versus 2019 that you anticipate through the rest of the year into year-on-year phasing of growth in the Merchant Services business at a revenue level.

I mean, specifically, I'm looking ahead to the Q3 comparative, where, on my calculations, I think you were about 16% above 2019 levels on net revenue already. So if you're about 12% or so ahead now, it would look like you'd need a very significant acceleration in Q3.

So I wondered if you could just give us a little bit more specific commentary on the phasing of the revenue growth. And secondly, just digging into the Italian performance in Merchant Services in the quarter in a little bit more detail.

I mean, you flagged a very strong net performance, which does imply a softer performance even excluding the contract effect in Italy. You had some volume data at a recent conference that was showing a sort of a higher volume growth rate than you ended up with for the month of March.

I think it was 22% in Italy, the same as it was in February. So why are we not seeing more of a sequential acceleration there in Italy in March and even into April, where you're looking at 24%?

So those are the two questions. And just a quick clarification, finally, on the project comparative effects, Bernardo.

Last year, when I look at that, it was seemingly in the Cards & Digital Payments business and in the Digital Banking Solutions business. And this year, you're calling it out in the Merchant Services business.

So I just wondered, has it sort of moved around? Or am I misremembering that?

Thank you.

Sorry, I had you mute there. So – sorry, it was in all three divisions.

I can't remember what – I think we put a bullet point in all 3. Possibly – I don't think we quantified the impact last time around, but I think we highlighted it.

But it's in all three divisions. And if there is any confusion there, I apologize.

So there's nothing moving around given that it's a historic number obviously. With regards to the first two questions.

So what I said earlier, I go back to that. I think what we'll have in terms of comp against last year is acceleration in the first two quarters, greater in the second quarter than in the first.

And it's essentially due to the lockdown dynamics we experienced in Italy, which is still half of our business or just more than half of our business. So last year, we had an early Easter and we had lockdowns just before and just after Easter in Italy and at the beginning of January.

So we had this effect in the first quarter and in the beginning of the second quarter. But the difference in – the degree of openness in – so it would sound like the comp would have been easier in Italy than other countries in Europe, where maybe there's less closing down.

But the truth is that in Italy we still had throughout the first part of the year – and today we're still wearing masks in Italy compared to many other Italian – many other European countries. The degree of openness of the economy is lower than what has been experienced in other European countries, right?

So we have less of a tailwind in terms of the comp in the Italian market, which, as I said, is half of the overall business. In the second half of the year and from the second half, I would say, of the second quarter onwards, everything goes back to normal.

So in the second quarter – we expect the second quarter to be, blunt, to be the best quarter in the year in terms of overall growth. And then this returns to a more normal level in Q3 and Q4 as the terms of comparison are more homogeneous.

I hope you follow that and that makes sense.

Yes. Maybe if I can add, James, a comment on your volume question.

And here, let me refer to the page with comparison against 2019 that is in the annex of the document. It's actually Page 20 – 22.

You see that actually besides the individual week here, if you look at it on a monthly basis, actually we continued to see progression here towards 14% growth; in January 22%, in February 22%, in March 24%, in April – and we see it continuing by the week. And when you look at the graph, you see that actually it is supported by a continued strong performance in the basic sector, that is not accelerating, but it's actually as high as 40% or more already.

A faster recovery of the high-impact sector: January, minus 2%; February, 12%; March, 15%; April, 22%. And a gradual, even a slower, recovery of the discretionary consumption sector: minus 4%, plus 7%, plus 2%, plus 7%, where the one sector that is struggling.

By the way, we show this a little bit across geographies. So that it is clearly an industry-specific topic, is actually the closest thing.

So that's the dynamics: if you look at it on a monthly basis more than a weekly basis. Again, if you translate it into revenues and if you, again, net this effect from last year, extraordinary projects, and you look at the underlying trends, also Italy in the quarter as, in fact, being – would have been double-digit when it comes to Merchant Services.

The Merchant Services, yes.

Okay. Thank you guys.

I appreciate it.

Hi. Good afternoon.

I have two questions. Both Nexi and Worldline have topped up the opportunity in Germany.

To what extent does that mean Nexi and Worldline will compete against each other in Germany as opposed to competing against other players there or just competing against cash? And then the second question.

With your final purchase of Orderbird, how are you thinking about other software purchases? And if you are thinking about them, which verticals strike you as the most full of opportunity?

Thank you.

Hi, Josh. Thank you for both questions, actually, pretty core to us.

Listen, for us, Germany is a great opportunity, is a very, very large market that is still underpenetrated when it comes not only to penetration of digital payments, but also to sophistication of solutions that are available in the market. Honestly, there, we are very much of a challenger.

Depending on how you want to measure our own market share, we are anywhere – 10% to 20% with an opportunity to grow from our customer base on national debit, on terminals and then obviously potentially win more market share as well, and not only in physical, but also, most importantly, in e-commerce. Honestly, we don't measure ourselves in competition with Worldline.

That is a much larger position there. We're just going for capturing the growth of the market that we believe will be very, very important, and then gradually winning more space in the market with our customers and with new customers as well with a specific focus again on e-commerce and SME, the mid SME space.

When it comes to software, I said it before, but I'm happy to clarify it further. We consider this – well, first of all, if you look at software and payment convergence around the world, not in Europe, but also in the most advanced markets from this point of view, most of it is actually happening in the hospitality sector and is actually happening – as far as the SME space is concerned, at least that is the most relevant for us – in restaurants and bars.

And this is the reason why we did capture this opportunity of basically acquiring full ownership of Orderbird in Germany on the back of – by the way, the fact that we were already owners from the Nets combination, of a share of that capital. Because we really believe that this vertical is the one vertical that by far is the one where we see most of this dynamic over the next few years.

And we wanted to test more directly ourselves how it works and the dynamics and see how much this can work in the market. This is focused on Germany.

And clearly, we will work to penetrate the market faster and deeper in the SME segment in Germany and probably export it to a few other geographies. We have our own priority issues, but that is not necessarily the core strategy going forward.

So at the moment, we don't have immediate plans to go beyond this. While actually our core and main strategy is to continue to develop partnerships across our geographies, starting from Italy and the Nordics with software companies that share our view for the market.

And they are very keen to work with us to develop this space.

Okay, thank you.

Yes. Thanks for letting me on.

I got also a couple of questions. The first one, maybe on the guidance.

You confirmed the guidance. But then with all those adjustments, is it fair to say that you based the guidance on excluding those project revenues?

Or is that purely on underlying and including them? And then the second question is around Merchant Services and the related revenues.

The volume has been over 20%. Revenues has been lower in that division.

Can you maybe talk about that relation? I know it's maybe related to installed base.

You don't call the project-related cost as part of the installed base revenues. And the last bit on travel.

I think you mentioned something around winding down some business, if I heard correctly. Maybe you can drill there a little bit deeper.

And where do you expect travel then to come in compared to 2019? Some airlines, they even speak about better bookings now than 2019 levels.

Maybe also in terms of travel and bookings. Thank you.

Hi, Hannes and thank you for the questions. So on guidance, now I want to be very clear.

The guidance is consistent with nominal. So what will account for our guidance calculation at the end of the day is the 7% for this quarter.

The reason why we have underlined also the 9-plus net of the effect of last year is also – was actually to give you a better view of the underlying dynamics of the business without being distorted. But we clearly knew from the very beginning of the year that we have this element that's coming from last year.

And therefore, our declared ambition takes it into full account already. As far as Merchant Services revenues are concerned.

As I said, if you net this element, actually, our Merchant Services revenue are going up a bit more, I think, than 15%. That is very much consistent with the 20% plus growth of volumes given the mix, where basically we have – two thirds of the revenues are associated with volumes and a third that is more associated with the installed base, that is also slowly growing, but clearly at a different pace compared to revenues.

On these travel-related contracts that we have been discontinuing over the last few quarters. Bernardo, if you want to give a comment…

Yes. It's primarily related to airlines in Germany, large German airlines, if you want, where the risk-return profile in our view wasn't meeting the criteria we've set ourselves.

So we chose to give away – a big impact – had some volumes. Very little, I would say, in terms of the revenues.

Absolutely. I really want to underline this because we never mentioned this when we talk revenues because the impact on revenue is totally marginal.

Volume-wise, these are large merchants with large volumes at very, very low take rates.

Okay. Thank you.

And just quickly if I can squeeze in a follow-up on Italy. Maybe you can disaggregate the parts of Nexi underlying.

If you adjust for that €12 million or €11 million revenue, you grew around 9%. That's also definitely slower than your historic trends in Italy.

So maybe you can disaggregate it between Nexi and SIA contribution?

No, we're not going to give that level of detail. I mean, it's – we've merged the two companies and we're now monitoring them that way.

So I wouldn't be able to – I mean it would take a lot of effort to try and carve out again the data. But I mean, Merchant Services, as Paolo was saying, is growing 10.5%, 11%, if you want – if you normalize for that in Italy.

If you normalize for that project-related work, somewhere in that region. It is slow growth, 19% in Nets.

But again, think of comp and the fact that in Italy, I think, we are – we were slower into COVID, slower out, slower throughout. And therefore, the benefit we have – and you can – we monitor internally with an index called Stringency Index, which shows how the improvement year-on-year and the quarter – 2022 compared to 2021 is lower in Italy than it is in many of the other geographies.

And that simply explains the pace of exits, the pace of growth year-on-year. It really is as simple as that.

And the proof of the pudding, for instance, speaking of the needing, if you look at similar geographies to the former Nets Group and other competitors who have disclosed their results, you can see that they are very similar. Maybe Nets a little better.

But it's really got to do with where we were last year and where we are this year in terms of people's ability to access shop, spend, travel, all these things here.

Great. Thank you.

Good luck.

Hi, good afternoon. Thanks for letting me on.

I had two questions, if I may. One is a bit technical, just a clarification.

I think in Digital Banking & Corporate Solutions, you touched on those IT project revenues last year. I think in the slides, you also mentioned an eID project, where basically you're migrating platform.

Is this going to be a bit more of a lasting effect over the next few quarters there? Do we need to lap Q1 before those effects go away?

And how should we think of growth in Digital Banking in that context? And my second question is kind of wondering if you could remind us of revenue model in Cards & Digital Payments?

And in particular, how we should think of the impact of inflation on your transaction-related revenues and on your installed base-related revenues in this particular division? Thank you very much.

Hi, Alexandre, Paolo here. And jump in, Bernardo, if you want to add anything here.

Sure.

On Digital Banking Solutions, there are basically three effects in the quarter. The first one is the project work from last year that Bernardo has mentioned.

Is a second one that is – in particular, on one or two products, we have the effect of the banking consolidation from last year that – where banks – the acquiring bank is actually – is in-sourced on the service that we are offering to the acquired bank. And therefore, we have a step here that will continue going forward of revenues that we had in the past and we'll be missing.

And when it comes to eID, this is something that we did highlight also, I think, last quarter, because it's something that we were very much – were off. And this has to do with the fact that in – in Denmark we are serving basically the country on the e-identity service, and there is ongoing an evolution of migration to a next-generation platform that we have developed for the government, for the country itself.

And in this migration, actually, the pricing of the new one, it is a next-generation technology type of thing, is actually lower than the previous one. And that's something, therefore, that over time you will see actually continuing.

So the real one-off effect is the comparison on the first element. Again, here, we are talking about low single-digit million euros of impact.

But clearly, on the business unit, they are visible when you look at growth rates for the quarter. On the revenue model for Cards & Digital Payments.

Here, I think the – and its exposure to inflation. It is clearly less exposed to inflation and – I would say, in the positive, it's more better.

In Merchant Services & Solutions, we have a large part of our revenues where – that are exposed to end customer pricing. And therefore, if prices go up for the same volumes, actually, our revenues go up.

In Cards & Digital Payments, the volume-related revenues are actually a smaller portion of the total, about a third. So it's the other way around compared to Merchant Services.

And that third is a bit less exposed to inflation because some of it is actually number of transactions related. As well as when you look at the rest of it, with Cards & Digital base, that is also contractualizing long-term contracts normally with the banks, and that is also less exposed to inflation.

Understood. Thank you very much.

Yes. Hello everyone and thanks for taking the questions.

It seems you have not seen any specific impact from tougher macro environment so far in your volumes. What kind of correlation to GDP was on your business at Nexi on a general, I would say, 10 points?

And the second one. You confirm double-digit growth on Merchant Services & Solutions for this year.

What are you expecting for the two divisions, the other – CDP and Digital Banking? And last thing, if I may.

Starting with Italy on a rather slow growth. Looking at your main geography for 2022.

Which geography are you expecting to outperform the group average, grow in line with the group average and maybe underperform the group average in 2022? Thank you.

Hi, Sébastien. It's Bernardo...

This one is a bit sophisticated, and he's looking for the back up to make sure we give you a more precise answer, obviously. We have a good feeling for that, but we want to try and help.

Let me just take the first one. Listen, the – historically, the correlation in between – I mean, the GDP and our top line growth has been fairly light, and for a strong reason, which is the fact that at the end of the day when your volumes grow 10%, 12%, 16%, GDP growing 0.5 percentage point more or less is really difficult to be perceived.

So historically, we've been quite resilient to these effects. By the way, this time – this is also kind of with inflation that may also have instead some positive unitary price component as we just discussed.

So to give you, if you like, a very, very, very clear and simple example for that. We have, obviously, before closing the numbers for Q1 also reviewed our projections for the rest of the year, and they are actually in line with what they were when – at the beginning of the year.

So despite the fact that unfortunately today we also have a war in Ukraine and there are macro tensions around, more than what it was at that point in time, internally we're not changing our financial plans for the year, and as a consequence, we're also not changing our guidance either. On the geographies, Bernardo?

Yes, in general, I mean – I think, as you said, double-digit growth in the low teens for Merchant Services. Whereas, Cards & Digital Payments is something which will grow in the mid-single-digit range.

Whereas, DBS, we are expecting to be, broadly speaking, flat. And then frankly speaking, no one is €1 million smart at this stage of the year in terms of where we'll end up, but probably you'd say flat.

Within this – I'd say that in terms of the geographies that we expect to perform best, I'd say – I'd highlights DACH in general. I think DACH and Poland are the two geographies that will best perform in terms of – and I'm talking about acquiring.

I'd expect them to perform better than the rest, and then followed by Italy and Nordics. On issuing, actually, it's slightly different in issuing.

We expect Italy to perform pretty well compared to the Nordics, again, within the overall group. But I would say sticking to acquiring, which I think is where the question is leading to.

That is the – those are the areas where we'd expect outperformance in terms of top line growth.

And so Italy is likely to go in line with the group?

In terms of Merchant Services, I'd say Italy is pretty much given that it's half of the business, roughly, I mean, you'd expect it to be very close to what the average for the group is. And then we'll have DACH and Poland more and the Nordic less.

Less Baltic, thank you.

You’re welcome.

Hi, good afternoon everyone and thanks for taking my questions. I wanted to come back about inflation, on the impact of inflation picking up on consumer behavior.

I wanted to know if you – if inflation changes what the consumers purchase? And if the shift of the – what they are buying has an impact on your take rate?

I will have a second question on the ability you have to pass some price increase on this inflationary environment whether it is on your transaction-based revenues or on your installed base? And my third question is about your performance in e-commerce.

If you can split with RatePay performance, if you could exclude the RatePay or highlight what RatePay recorded in Q1, it would be useful to have the underlying growth of your e-commerce business? Thank you very much.

Thanks, Antonin. So inflation – for starters, I think just to – and actually Paolo and I have contrasting views on this.

I think we're already seeing the impact of inflation in our numbers, because the average ticket size per card – and if I just leave the analysis to Italy, which I think is a good proxy for the whole group on this. The average ticket per card per transaction, sorry, has historically always decreased between 5% and 10% every year.

So if you start the year as now at €80 per card, you will end up just north of €70 and so on and so forth. This year, we're actually flat, right?

I mean the average ticket is not decreasing. Now this can be due to a number of factors, one of which increasing prices of the things people are buying.

Now where as we've observed that, I haven't observed in the data we are looking at – even though it requires further mining and analysis, doesn't suggest there's a shift in consumption from one good to the other. So we're not seeing more coffee being consumed and less of other stuff.

I think the only relevant shift in consumer behavior that is worth highlighting, Paolo mentioned earlier, which is on closing, right? And this is true throughout the group.

We've seen closing volumes and that may not be due to the inflation...

Yes. Honestly, this was the case also in the past.

I think we discussed it several times with some of you and many investors. This is something that started with, unfortunately, COVID.

And obviously, also did recover a lot as we were exiting COVID, but still remains probably the most depressed sector. And therefore, I will not really connect it to inflation.

In terms of our ability to pass the effects of inflation on to customers. I think different customers – the pricing power with customers is always to do with the size of that customer, and it would be, I would say – I think more relevant on the installed base part of our revenues both in Merchant Services and in Cards & Digital Payments.

But we haven't been there yet. Obviously, we have had some supply chain led kind of a pricing impact on certain things, but not something which we have today worked proactively on passing on to customers.

So Paolo, you want to...

No. But I want to intertwine something, Antonin, here.

The biggest effect is actually coming by itself. We don't need to pass anything.

Because the majority of our revenues, especially in Merchant Services, as we said before, are actually expressed in terms of basis points of net merchant fees. And therefore as the price of the good increases, we take the same percentage, and therefore, a higher absolute number.

So that's the reason why we are not – honestly, at this stage, we don't plan to increase prices on ourselves, taking into account that the rest of the business is very much into contracted relationships as well. Obviously, we continue to consider and observe.

But we are in a business where the mechanic is already by itself healthy.

Yes. In terms of the question on e-commerce.

So we have – we have to break it down within the group. I mean, we have countries like Italy where e-commerce, which is not huge, but growing really – you saw the volumes, right?

26%, I think, it was in the quarter, highlighted in the slide Paolo talked to – 24, sorry, percent in terms of volumes. And in terms of revenues, we have growth, which is in the 20s or thereabout in Poland, Finland; north of 30% in Italy.

Slower in DACH due to the derisking I was mentioning earlier. So in general, I'd say, e-commerce is – on a like-for-like basis, as usual, is growing handsomely in terms of the volumes.

You have the data. I would just – and I think – I thought – we thought it was interesting to highlight how strangely enough with the reopening or normally given that the shops were shut and now they're open again, the growth in the physical channel outstripped or was in line with the growth in e-commerce in the quarter, which is a new, I'd say, a new trend that we thought were kind of.

Thank you.

You're welcome.

Thank you, Liz, and thank you for attending this call. Looking forward to the next one.

Again, we will meet and chat with many of you one-to-one in the coming days and weeks and I think we also see around in the several conferences before our half year results call that will happen at the very end of July. Again, we are basically progressing the plan, the year to our plan.

The financing in the first quarter was slightly ahead of our plan. We expect compared to last year a strong second quarter, and we remain quite optimistic about the outlook for the rest of the year.

Have a good afternoon, and see you soon. Thank you very much.

Bye-bye.