Thank you, and good morning to everyone. Welcome to our call for the first quarter of 2025 results.

As usual, I’m here with Bernardo Mingrone, our Deputy GM and CFO; and Stefania Mantegazza, who leads our Investor Relations operations and a number of other colleagues in case we need their support to answer to your questions. Today, as usual, we start with an overview of the key messages, and then I will hand over to Bernardo who will cover results for the quarter, but we’ll also deep dive on the topic that we have chosen for today, which is actually our progress on debt and more in general capital structure management.

And then we come back for conclusions and most importantly, together with Bernardo for answering to your questions. Now let me start with the summary of the key messages of the day, Page 3 of the document.

First of all, point number one, continued delivery of profitable growth in the quarter. Revenue went up 3.7% in the quarter with Merchant Solutions up 4.5% versus the first quarter of last year, and this is despite some effect from the leap year and the different Easter phasing that is a disadvantage in 2025 versus 2024 for the first quarter.

In this quarter, we also continue to show strong cost efficiency control, cost did grow only 0.8% in the quarter, thanks to continued cost control and operating leverage. As a result of revenue growth and strong cost control, EBITDA went up in the quarter by 7.1% with an EBITDA margin expansion of almost 150 basis points.

Second key point, we continue to focus our attention, the vast majority to be honest, with our expansion into shaping Nexi for future profitable growth. Four points that we want to underline: first of all, we continue to make progress on integrated software payments, strategy execution in the quarter.

By the way, we also signed a strategic partnership with Planet in the vertical of hospitality for the large merchant segment. We will start from there with Planet with focus on the Nordics first, Italy and DACH to come.

And we’ll probably then extend the partnership into additional verticals where they are particularly strong, such as luxury and high-end retail. Second point, we confirm that we continue to see a strong traction from our direct complementary sales channels in Italy, where we are adding a strong firepower to our bank partnerships that are there – we continue to be there.

And these additional channels are now representing about 30% of the total new sales in the quarter. Third point, on top of our very strong focus on SMEs that remain the core and remain the priority for us.

We are increasing, especially in certain geographies where we are already market leader. Our focus on the mid-corporate and national LAKA segment, which is a segment that is particularly interesting for us on the one side because it’s profitable, and on the second – and on the other side, because it’s a segment where we gain a lot of traction with our positioning that is combining scale that allow us to have product strength, technology strength and at the same time, local in-market presence and entrenchment, which is very, very important for these players that require a lot of local support across all possible fronts.

Last but not least, as you’ve seen, we continue to have a strong performance on cost, but we’re already working, as you can imagine, into the next round of efficiency measures looking forward to 2026 and beyond. Third and last point, we are creating value for our shareholders.

As we have announced three months ago, we are returning in 2025 €600 million to our shareholders, which is 20% more than last year, we will pay the €300 million of dividends, our first dividend on the 21st of May. And on the same day, we will also start our share buyback program of another €300 million.

Second point, as you may have seen, we’ve been upgraded to investment grade by Standard & Poor’s in March after the same upgrade from Fitch in – at the end of 2024. And last but not least, we have completed in March a €2.9 billion financing plan.

And we’ve established more recently our EMTN program that will allow us to further optimize the financial structure and Bernardo will deep dive in these topics in a moment. Overall, based on what we have seen in the first quarter of the year, we confirm our guidance that we gave you three months ago.

Now let me go over to Bernardo for results.

Thanks, Paolo. Good morning.

Starting on Slide 5, revenues. We’ve brought the announcement forward in terms of the growth in revenues.

That doesn’t come as a surprise, 3.7% growth year-on-year as Paolo reminded us. Last year was the leap year.

Easter was at the end of March this year. It’s in April, and that has affected these dynamics slightly just like for most other payments companies.

I think the strong point on this slide to highlight is the margin accretion, close to 150 basis points in the quarter, there are timing and phasing effects during the course of the year. We’ll speak of them in a second as we go through.

But I would say strong performance in the quarter with regards to our operating leverage delivering the margin accretion and the EBITDA growth, which you see is just north of 7% at €386.9 million. Moving on to Merchant Solutions.

We have, I would say, continued growth in the segment in the business unit which continues to be supported by volume growth. This is the business unit which most benefits from volume growth, we called out on the slide, the fact that this volume growth is generalized across the group and especially in Italy, Germany and Poland.

Notwithstanding the calendar effects that I spoke of earlier and notwithstanding the fact that we have initial impacts coming from the loss of the time banking client. We have also spoken of in the past, slightly, I’d say the volume growth in the first quarter reaccelerated during the course of April, clearly because also of the calendar effects that I was mentioning earlier.

We highlight and called out the fact that we continue to grow our customer base in the SME segment, the most important one for us. This is particularly true in Germany where we gained market share in Poland and also in e-commerce, and we continue to get contributions – important contributions to our top line growth from the upselling of value-added services to our customer base.

Moving on to Issuing Solutions. We continue to show growth in top line in Issuing, again, driven by international schemes.

Clearly, here, the contribution of volume growth is slightly less on a percentage basis then for Merchant Solutions. We continue to drive most of our revenues from international schemes.

Even here, we have a bit of a calendar effect as we mentioned for Merchant Solutions. But I think it’s important to continue to highlight the contribution to our top line growth of international debit in Italy, which is very strong contributor to the top line in Italy and for the group.

And even here, the upselling and cross-selling value-added services and the focus on advanced digital Issuing Solutions and the rollout across Europe. Digital Banking Solutions, the division which is most infrastructure like in terms of its characteristics, grows in the quarter, close to 1%.

We have from the volume-driven businesses within Digital Banking Solutions, I’d say good development from instant payments and its adoption across Europe with volumes growing very handsomely in that segment and other areas like the Italian public sector. Pay bill payments campaign, which is contributing again to the top line growth in the bank payments hub, payments-as-a-service proposition contributing to this.

Moving on to the regional distribution of growth within the group. I’d say that most geographies – you can see most geographies contribute to the top line – all geographies contribute to top line growth.

We have some specific impacts in certain geographies, the net of which obviously is – contributes to the top line growth of 3.7%. In Italy, we had, as I was saying earlier, strong support from international scheme growth notwithstanding the leap year and Easter phasing.

However, we also had some project phasing contributing to this. And as I was mentioning, importantly, the initial contribution of – or negative impact of the exit of some clients, which started – the end of last year started to pick up in terms of volumes in the first quarter of this year, and we will have for the remainder of the year.

In the Nordics, the weaker macro, I’d say, is what I would call out in terms of the impact on the Nordics. And notwithstanding this, we have top line growth, low single-digit range.

I’d say Easter is probably less relevant here, but the leap year obviously contributes to this as well. DACH, we have continued strong year-on-year growth in Merchant Solutions in Germany, which is very high single digit in terms of growth we had like here 9% growth.

And then we have an issuing client impacting our top line in Germany, obviously. For Germany, it is more relevant than it is for the group.

However, the exit of this client started a number of years ago is impacting the top line growth there. In CSEE, I’d say that the negative number, which might stand out is more to do with phasing of last year’s first quarter impacts, one-off impacts, which were positive last year, less rather than this year in Poland that swing the balance.

In terms of just – while we’re on this page, just to clarify the fact that we have now – as we continue working on what next year is probably was suggesting, one of the things we’re doing is aligning our accounting and reporting systems, and we’re now reporting Poland in CSEE, no longer together with Germany, the database will be aligned in the future. And this aligns our – this obviously allows us to align the reporting with the way we manage the business within Nexi.

Page 10 on cost performance, we have – as you know, we have a natural aversion to cost growth and we focus a lot on managing our cost base to deliver the most out of our operating efficiency. Costs were growing less than 1%, notwithstanding the fact inflation is higher, notwithstanding the fact that volumes are driving about 20% of our cost base.

The number of transactions growth is driving our cost base 20% of our cost base. Notwithstanding this, we have managed to limit the cost growth to 0.8%, which is, I think, a very good result.

It is fair to say that in the first quarter this year, we benefit from a year-on-year comp in HR costs. You know that last year we had a large transformation initiative, which led to about 1,000 people exiting the group.

Most of this happened in the second half of last year. So the first quarter is the one where we have the biggest year-on-year effect, and you see that in the minus 5.4%, this will come down during the course of 2025.

However, we manage our cost base as one, and these phasing effects are all known and planned for when we give our guidance. So there is absolutely no surprises in this.

Moving on to Slide 11, before we go into a deep dive on our capital structure. You can see leverage is now at 2.5x.

This is coming down every quarter as you see in the bar chart here, if you take a step further back, if you go back to 2021, we started this journey after the mergers of Nets and SIA at 3.6x. If I go further back when I joined the Nexi, we’re 6.5x leverage.

All this is to say that our business is one which thanks to its – the growth and the EBITDA, thanks to the strong cash generation. This is a business which can deleverage pretty quickly.

And more importantly, predictably, which is what we bank on in managing our cash allocation, our capital allocation strategy, which probably reminded us of, includes a €300 million dividend, which will be paid later on in the month in a buyback program, which will start once the dividend is being paid. We also do this whilst at the same time reimbursing maturities as they come due, we reimbursed €0.75 billion last year, another €0.5 billion is in the process of being reimbursed.

We have spread and we’ll look at this in a second, about €3 billion of maturities, which came during 2026, a large renegotiation with partner banks. And we’re now ready to approach the market with senior unsecured bonds as an investment grade issuer, and thanks to the establishment of the EMTN program.

Moving on to the final chapter before I hand the floor back to Paolo, we thought it would be helpful to just take a moment to review our capital structure now that we are investment grade by at least two rating agencies, which make our issuance – makes our issuance, future issuance eligible for all kind of indices and gives us access to a different pool of investors and market for our debt. Slide 13 just summarizes what we said back at the beginning of March with our full year results presentation.

Our commitment is that of remaining investment grade going forward, and we target leverage of between [Audio Dip] and were there at this point in 2025 in the quarter, given the phasing of buybacks, et cetera, this will change in the course of the year. But that is our primary commitment we make.

We are returning capital to shareholders. We spoke of that, and we will focus only on very selective and value-accretive M&A acquisitions as frankly speaking, we’ve done so in the past.

This is both on the buy side and on selling as we always review our portfolio to identify assets, which are not core to us or have better owners than Nexi to dispose of them and even in the course of [Audio Dip] sold a small capital markets business. We also sold a 50% stake in the business in the Nordics.

Slide 14 reminds us the journey in terms of the leverage, which I was speaking of earlier, 3.6x at the time of the mergers with Nets and SIA, 2.5x now. This has actually been 2.3x leverage if we pro forma for the share buyback, and we probably end the year – and this is not guidance, but we’d probably end the year below 2x if we hadn’t decided to allocate €600 million to buybacks and dividends.

So what this slide is aimed at showing is just the point that I made of the fact that our business, given its characteristics, it’s one which deleverages organically pretty quickly over time. Slide 15 summarizes our approach to debt management, which I believe to be sound, disciplined and the key recent events.

First and foremost, our journey towards investment grade started off from B+. A number of years ago we’ve had eight rating upgrades since January 2022.

We’re now investment grade by S&P and Fitch and Moody’s has upgraded us in terms of its outlook to positive, which is all good news for us. The debt repayment and refinancing over time, we have discussed why we are carrying cash on our balance sheet, why we’re managing the debt we were managing.

The overall cost of debt has always been pretty low as a function of the time in which we issued the bonds, the convertible bonds, got the bank loans, et cetera. And we are having a positive carry effect on our interest margin, thanks to the fact that the cash balances were being deployed and invested at a higher rate.

Nonetheless, last year, we started to pay down this debt given where we were in our journey of transformation of Nexi, and we started to pay back some of the cash generated to our investors with the buyback, which was completed in the second and third quarter last year. During the course of this year, as you know, we will continue to pay down maturities, those in June in addition to the €0.75 billion reimbursed last year.

And during the course of the first quarter, we renegotiated €2.9 billion of financing for us. These were maturities, bank loans, which are maturing 2026 and 2027, as well as increasing the size of our RCF to €1 billion, which gives us increased flexibility to manage the remaining maturities in the shorter-term.

We’ve also filed registration for established €4 billion EMTN program, which makes us basically ready to tap the investment-grade market with new issuances at some point in the future. Slide 16 is the final one on the debt structure.

So the first chart shows where we are. I believe a well-diversified and balanced debt profile, diversified in terms of the investors we can access to lend us money, well balanced in terms of the various mixes of debt that we have.

And if you look at the pro forma schedule on the bottom of the page, well spread out in terms of maturities at the maturity profile, which has been increased to 3.3 years from 2.4 years and a cost of debt that fortunately for us didn’t spike during the period of rate hikes given the predominantly fixed nature of the debt, and the maturity profile we had set up before the rate hike cycle. And now we’re able to refinance at rates, which bring this 2.35% down from where it was before, it was 2.7%.

With no maturity walls ahead of us and with our ability to further optimize the spread of these maturities over time as time goes by, thanks to the fact that we now have a truly EMTN program, which is extremely flexible and helpful in that sense. That said, let me hand the floor back to Paolo for his final remarks and guidance for 2025.

Thanks.

Thank you, Bernardo. Before I move to guidance, let me just make one comment on what Bernardo has just been covering.

I think some time ago, we told you that our – basically landing spot, optimal landing spot for leverage would have been 2x to 2.5x. Let me underline the fact that at the end of this quarter, we are at 2.5x.

That would be at 2.3x if we were not doing the buyback of €0.5 billion last year. And without returning a further €600 million to our shareholders over the next few weeks, by the end of the year, we will be actually closer to 2x.

So I guess you never say mission accomplished on these things because there are always open topics for us. And we continue to focus a lot on this.

But clearly, we are landing the company in the situation that we did commit to you some time ago. Now let me close by, first of all, confirming our guidance for 2025 based on what we have seen in the first quarter of the year and our results and the market dynamics that we observe.

We confirm our guidance for the year that, as a reminder, says that we’ll grow net revenues around low to mid-single digit and EBITDA margin by at least 50 basis points. As you know, this performance will be affected, is being affected by a number of exceptions in the year that are actually larger than usual.

Underlying, we see a growth acceleration, which is also what we have seen to a certain extent in the first quarter of the year. As a combination of all of this, we expect to generate an excess cash of at least €800 million, up at least €100 million versus the €700 million of last year.

Let me just close by summarizing again the key messages on Page 19. Again, we started the year with continued delivery of profitable growth.

Revenues up almost 4%, EBITDA margin expansion, very strong in the first quarter. We continue to focus on future growth of the company, future profitable growth of the company.

And last but not least, strong focus on value creation for our shareholders with the dividend and the buyback starting in a few days. Let me stop here, and let’s open to your questions.

Great. Thank you.

Good morning, Paolo. Good morning, Bernardo.

A couple from me. First of all, Paolo, could you comment a bit on the visibility you have?

I mean, you talked about the underlying dynamic being still pretty good. I know we have the headwinds coming up over the next few quarters, starting in sort of Merchant Services this year and then kind of more on the Issuing side next year.

So how do you think of that sort of visibility on some of those headwinds? But more importantly, you talked about April – slight acceleration in April.

So when you think of that underlying growth trajectory, which is closer to the sort of mid-single digit, how do you expect that to evolve? And what sort of assumptions do you sort of make for any potential macro headwinds in terms of slowing consumer impact?

And then secondly, obviously, on the leverage, obviously, you’re starting to return cash to shareholders, and you said you would be kind of close to 2x. Is the target over the medium-term to hold this 2x and then just return all excess cash back to shareholders?

Or would you be inclined to kind of lever down further? Or are there any kind of interesting M&A opportunities that you see in the marketplace?

Thank you.

Good morning, Mo, and thank you for your two questions. Let me take the first one and then I will hand over to Bernardo for the second.

Listen, I think let me start from the second part of it, actually. As we said, the volumes in the first quarter have been – to be honest with you, not completely easy to be understood because of this number of discontinuities versus last year leap year, Easter phasing, a number of bank holidays here and there.

And honestly, we’re really talking about only a few days or a few weeks. In April, we’ve seen a recreation especially from March.

And again, that’s supported by a better phasing of Easter in April this year versus last year. So it’s not a surprise per se.

It’s nothing that we were expecting. But in general, we remain cautious on macro for the rest of the year.

As I think we were already three months ago, I guess, the uncertainties that we all have around the world for now are not particularly impacting or at least not very visibly the volume trends, if you really want to look for something very specific, you see a little bit of softness on the discretionary spending on, for example, on hospitality, restaurants, these type of things, while you have a very strong resilience more into the Grocery segment, the non-discretionary spending segments. But again, this is not very material and most importantly, now doesn’t have any major mix effects on our numbers.

In terms of how we expect the rest of the year to unwind after the first quarter results, let me basically confirm what we discussed when we announced guidance three months ago. We were expecting and we also shared it with you that the first quarter would have been the strongest quarter of the year.

During the rest of the year, we will have basically three effects coming in that, in any case, we expect to lend us to guidance. I want to be very, very clear on this because they were absolutely expected.

On the top line, we will have the gradual more visible effect of some of the bank situations that we had in Italy last year and a couple of years ago that will show some more impact in Italy and in Merchant Services in particular. While again, as we go through the year, we will have some of the other more price discounts or discontinuities hitting mainly the other regions in Issuing.

And these things will come in throughout the year, and we’ll comment them together. But for now, we don’t see any major difference from what we were expecting, and this is what will soften the top line during the coming quarters versus a strong performance in the first quarter.

And this has very little to do with macro, honestly. This is really our own phasing of effect.

And then on the cost side, again, the underlying performance will continue to be strong. But as I think Bernardo also reminded everyone, the strong performance in the first quarter of this year, and by the way, also the latter part of last year was also supported by the rightsizing that we had on the personnel cost in the second quarter last year.

And therefore, you will have a little bit of the unwinding of that in the second quarter and then almost a full unwinding of that in the second half of the year. And therefore, you will see the cost side coming up a bit.

But again, all of this is planned and under control and is within the guidance expectations that we had. On leverage, Bernardo, you want to comment?

Yes. Thanks Mo for the question.

I think the purpose of having this section in the document is to kind of highlight the optionality and, let’s say, the alternatives that becoming investment grade offers us and the work we’ve done to reshape the profile, the maturity profile of our debt helps to kind of prove the point. I mean if you believe our guidance, we obviously do, otherwise, we wouldn’t be giving it to you, we’ll be making more than €800 million of excess cash this year.

And if you assume any growth in this, it won’t be too long before we’re making enough free cash every year to reimburse the maturities, as you saw and we’ve seen them described on Page 16. And therefore, deleverage will go very – it will be very quick if we use all of that cash to pay down the gross debt and go to zero and become cash positive in the not-too-distant future.

Does that make sense? Probably not.

That means that we have options available to us to decide what to do with this excess cash. The fact that we’re investment grade doesn’t really impact me too much in terms of the cost of the debt.

We are already priced almost as an investment-grade issuer when we are sub-investment grade. But what it does do is give me huge flexibility in terms of accessing the market when I want as quickly as I want to capture opportunities and optimize the cost of this debt.

It gives me the ability to become a very frequent issuer in terms of shaping the curve going forward, which means that I can basically not play around, but optimize the leverage profile, which becomes, I think, less relevant given the dynamics, it gives us the ability to capture opportunities in terms of returning capital to shareholders even more than the cash generated in the period. We will – we’ve already made a commitment in that respect.

But does that mean that we can only distribute the excess cash? No, we could bring leverage if we are below 2x to 2.5x to continue to go down below 2x, if the cost of the debt is high because of rates.

I think the main point I want to make is that we believe that leverage is now offers us an opportunity rather than being a constraint. So, frankly speaking, that I think it’s superpose to continue to report the chart we normally put at the end of the first – the quarterly presentation in terms of the evolution of the debt, and we’ll probably move to a half yearly kind of reporting of that as we become a repeat issuer in the investment-grade market and manage our debt to optimize the curve pricing and the capital structure.

Bernardo. Maybe let me just add...

Great.

Mo?

No, no, go ahead. Go ahead.

No, I just wanted to reiterate a couple of points that we made in the past. The first one is that considering everything that Bernardo said that we made a clear commitment to investors last time when we presented our capital allocation strategy that we would have been basically giving back to the market at least 50%, given the majority of our excess cash that, as you know, is growing and is growing very materially.

And this is in the context of everything that Bernardo has said. And that’s after a continuous deleveraging to the levels that we have mentioned.

And also after the M&A opportunities that we see around that and we continue to explore that as we speak, are not that material. We continue to have a very strong focus on our organic growth and on organic development.

Got it. Thank you.

That’s super helpful.

Thank you.

Thank you very much. Good morning, Paolo, Bernardo.

A couple here from me as well. So I wanted to talk a little bit about the decommissioning of old platforms, I think one of the challenges can be migrating merchants off of one platform onto another, which can cause service disruption, dissatisfaction and possibly churn.

I have heard others in the industry simply forcing clients off of old platforms. Can you clarify your approach?

Can you talk about the process for decommissioning platforms and a little bit more specificity, how you think about sunsetting old platforms and specifically the work that goes into us. And can you remind us the time frame you expect to be completed?

Second question is just around the DBS business. Just want to clarify again, I know you don’t comment specifically on press reports, but why you might be contemplating moving some of those assets?

I would have thought that operating many of the bank payment schemes and some of the things that you were just talking about, such as the bill payment offering that you have, provide a little bit of synergy across your financial institution clients. Understanding it’s not the fastest grower, but also it’s a steady cash generator.

Maybe you could just talk a little bit about the different assets you have within that business and your priorities going forward? Thank you.

Good morning, Justin. Thank you for your two questions.

Let me start from the first one, the commissioning of platforms. Listen, this is clearly an open topic, something on which we work on a daily basis, I would say.

Just to give you an example, we have just migrated our DACH merchant services operations from Fiserv old legacy platform into our next-generation platforms. And so we know very well where the challenges are and also where the solutions to these challenges are.

So we are – we have our own plan, and we are committed to continue these migrations. To be honest with you, we are not obsessed with it.

And I think it’s – you also have to be very, very careful in being obsessed with it because there is always some kind of a cost and complexity when these migrations happen. This is clearly much higher when you talk about Issuing than when you talk about Merchant Services.

But nevertheless, also in Merchant Services, there are certain complexities. And the reality is that there are ways when you operate more somehow local platforms, you also have certain advantages because you can serve the needs of local merchants much more effectively than what you could do with a standardized non-global or multi-market platform.

And at the same time, there are different ways where you – that allow you to capture synergies and develop innovation also on top of different platforms. If you basically create orchestration layers and API layers that allow you to roll out innovation on the front end of the business for merchants on top of processing platforms that can be different.

And let me give you a super simple example. We are enjoying a very strong position in e-commerce in both Finland and in Poland.

And this position is basically driven by a lot of efforts that have been done over the last 10 years, not the last year to make them incredibly fitting to the local environment, the local payment methods to the local requirements from merchants, from banks, from these local institutions. And we make no sense to try to migrate these very successful solutions that are, by the way, incredibly efficient to be run on our target platforms where, for example, we are migrating most of the rest of the business.

So yes, we are focused in progressing these migrations. We know how to run them.

There are complexities, then we know how to manage these complexities, but we are really not obsessed with it given our strategy, our positioning and also the way we handle innovation on top of different platforms. On DBS, DBS is a very nice business that, as you see, is more or less low single-digit growth, it’s cash generative and it’s a business that we like.

We said actually two years ago, almost three years ago at Capital Market Day that we have been rationalizing the portfolio of these businesses, which is something that we are progressing, again, we go higher because we really don’t need to sell part of this business. But the reality is that we believe is healthy when you have opportunities to focus the business on the more core and strategic future development and you have someone that you believe is able, maybe sometimes in partnership with you to give more focus, more investment and therefore, being a better owner also to consider potential dismissals there.

Depending on which part of the business you look at, you have higher synergies or lower synergies. In some cases, no synergies at all.

But this is something that obviously we are considering when we assess our own options. So for now, we are happy owners of the business, and we continue to develop it.

Got it. That’s perfect.

Thank you very much.

Hello, it’s Hannes actually from Jefferies. I got a couple of questions.

The first one, with the people reduction, you called out last year that you reduced 1,000 people. Maybe you can tell us how much of inefficiency you still see in terms of the personnel cost structure?

On the other hand, the other operating expenses were non-personnel grew ahead of revenues. So maybe you can talk there a little bit about the cost focus.

And then maybe just give an update on your partner infrastructure or partnership, especially around the ISVs. Thank you.

Hi, Hannes, this is Paolo. Sorry, can you just repeat the third question because I’m not sure I got it.

There was just the second question around partnerships, in particular, with ISVs are progressing, who do you compete there? Do you gain share within them?

Thank you.

Sure. Sure, sure.

So well, again, good morning, Hannes. Let me take the one on people and efficiency, then I will hand over to Bernardo and then I can comment on the broader cost comment and then I’ll jump back on the ISVs.

Listen, on people, and the reason why I want to take this is also because it’s a very important topic. It’s also a very delicate topic.

Last year, we took the opportunity that was presented by honestly, the combination of three companies that happened by now three years ago. And as we got the company under one roof, under one organization, we call it One Nexi, then the opportunity to basically capture the synergies of being one larger organization became more visible.

And most importantly, we could go for them with a high level of control, which is what we have done basically last year around, as we said, second quarter last year – midyear. Now going forward, I personally believe that there is always room to generate more efficiency.

I think it’s the rule of the game, and we work on efficiency every single day regardless what the starting point is. To be honest with you, difficult to see anything similar to that.

However, at the same time, we continue, for example, to rationalize and create efficiency in our back-end system as for example, you roll out a single finance operations, single HR operation systems and so on and so forth. But at the same time, we also see the opportunity and in some cases, the need to invest on the front end of the business, for example, salespeople on the ground or actually innovation.

So do we see something similar happening in the near future? Honestly, no.

Do we continue to work on this and we will continue to reshuffle and optimize? Yes, every single day.

Let me hand over to the broader point Bernardo.

I think, Hannes, for starters, I go back to our guidance for the year and some comments we made in the past. I mean, we believe cost this year as a whole, and we guide costs as a whole will be well below last year in terms of cost growth.

Obviously, we have inflationary impacts on our cost base, and they hit the non-HR costs more directly. We obviously have wage drift, but we absorbed a lot of that with the renegotiations, which usually are once every three years, for instance, in Italy and not as direct as the inflationary hit we have on non-HR costs, which are most immediate for – in certain cases.

We also have the direct impact of volume growth, which I was mentioning earlier, which hits the non-HR cost component. And as a number of transaction increases by 10% plus every day year-on-year, we have that impact on our non-HR cost, which is direct.

And then we have a number of measures which are more, I would say, let’s say they need – they’re phased over time, which are those aimed at reducing the impact of this upward pressure on costs, which includes, for instance, the synergies coming from closing data centers. I think we referred in the past to the question we had from Justin on sunsetting platforms, et cetera, which allows us to mitigate this cost growth.

So what I expect to see for the year is that year-on-year effect that you see in the first quarter in terms of HR costs to be materially different and lower. And the same goes for the non-HR costs, which are increasing 6% or so in the quarter.

For the year, they’re not going to be increasing 6%. It’s just phasing.

Overall, we manage our cost base as one, and that cost base will grow year-on-year much less than it did last year.

Let me just come back to your last question on integrated payments and partnerships with ISVs. We continue to march ahead as I mentioned in the beginning, with our partnership approach.

You remember that there are two sides of our strategy. On the one side, we partner with as many ISVs as possible, obviously, focusing on the best local ones across the different verticals.

And basically, every quarter, we add new partners. And we do this recognizing the fact that the market is in different phases in different geographies.

In general, as we discussed very many, many times, the European market is well behind the U.S. market and is also moving much slower than the U.S.

market and remains incredibly fragmented differently from the U.S. market.

But nevertheless, in the Nordics, you have a more developed situation, and that’s actually where we also have the highest number of partnerships. Italy and in general, Southern Europe are instead in the early stages of development with DACH being somewhere in the middle.

Nevertheless, we progress our partnerships across the board. I think today, we are above 500 partners that you can somehow categorize into the ISV space, which is a very broad space because this is evolving very rapidly.

You have traditional ECR providers that are becoming ECR providers and then they’re trying to move into software providers and so on and so forth. And we obviously try to capture these relationships as they develop.

Then there is a second part of our strategy is actually bundling our proposition, our payment proposition with their software proposition. And here, we just select two, maybe three partners per market, per geography.

And we go to market through our salesforce with these partners under our Nexi commerce solution that you normally try to focus on retail and hospitality, restaurants actually in a more focused way. And here, we’re already out in several markets with these bundles.

We are learning and is a process here. But I think that by the end of the year, we’ll be out with our Nexi integrated proposition across most of our geographies, and I’m sure we’ll continue to talk about it in the coming calls.

Thank you.

Yes. Hello.

Thanks for taking my question. One on the take rates on MS, Merchant Solutions, they have improved nicely in the first quarter.

What was the driver behind the improvement in the net take rates in Q1? And how do you see take rates trending in the coming quarters and in the coming years?

And the second one is linked to your disposal strategy. Have you made any specific progress with respect to the disposals of noncore assets and to what is happening at Ratepay today?

Thank you.

Sébastien, thank you for your questions. I will let Bernardo cover the second one.

We made some progress on smaller things, but he will tell you better. On the first one, on take rate, you know very well.

I think we commented in the past that the measure of take rate is clearly a very easy KPI because total revenues divided by total volumes, and therefore, everybody gets it and understands it. But however, it’s very, very much affected by a number of very different things, including phasings, including special projects, including initiatives that are very specific.

So yes, this is going up in the first part of the year, but it’s also supported by a number of specific situations that, by the way, Bernardo also mentioned. And by the way, never forget that if you have less days and therefore, less volumes compared to the previous year with the same customer base, you have installed revenues that are more or less fixed while volume revenues go down and therefore, you have a mathematical increase of take rate.

So normally, if you talk about business, what we see in the business, we basically have no new major effects. As always, competition is evolving.

And therefore, in a business that grows volumes depending on the market dynamics, in some places, we have to reduce price to remain competitive. In other case, actually, we take the opportunity to increase prices on the front book as we have done recently in a couple of different markets.

And most importantly, we continue to work on our customer base, basically in two directions. On one side, – on the one side, we optimize pricing, including repricing up where we see situations that are unprofitable or wherever we see the opportunity to do it or also the necessity to do it because schemes and international schemes in particular, but in some cases, also national schemes every once in a while are increasing their prices.

And therefore, we have to transfer those downstream to the rest of the market, and this is something that we do quite actively. And then there is a second element, which is our continuous effort in upselling, cross-selling our products and services that then support take rate, as we discussed, I think, in the past.

I think there are two lines through it. The first line is DCC that is becoming more and more visible in our revenues, but also more sophisticated stuff such as merchant financing or actually software that we discussed in the past.

So yes, they’re going up. I think there are some special effects in the quarter, probably in the coming quarters, they will you will not have those, but actually, the business dynamics will continue.

Bernardo, on the...

On the disposals. Yes, as we say, we constantly review our portfolio, identify assets which are not core and we sell and they tend to be – there’s nothing huge, which is a game changer, but I think it’s good housekeeping.

And for good order, we have proceeded to close, I think, three transactions in the last – signed or closed three transactions in the last six months or so or since the fall of last year where we sold eID for about – eID, is the Danish digital identity business, which we sold to IN Groupe for about €90 million. We then – this year, I think we sold a very small software business for about €5 million, another one we just recently signed in Denmark tied to the eID business called E-Box, which is sold for about €30 million.

We had a 50% stake of that. So I think – and in general, we have a bunch of other smaller assets like this, which we keep on disposing just to – as housekeeping and optimizing our business portfolio.

Ratepay is a bigger asset than these in terms of its balance sheet. And as we had done – as we had said in 2022, we believe we don’t necessarily need to be the owners of this BNPL business.

And to the extent we find a better owner than Nexi for Ratepay, we would have done so. That came at a time when increasing rates, which obviously impacts the business, which has a lot of similarities to consumer finance and it’s hard – possible to find this buyer.

So what we focused on at Ratepay is to restructure the business, had a new management team put in place and the new management team has very successfully restructured the cost base. It took out about 20% of staff, reduced costs, has now successfully also renegotiated or put set up an SPV vehicle to fund Ratepay.

And I’m confident we’ll be able to off-balance sheet the funding that Nexi currently provides to Ratepay in the not-too-distant future. So that Ratepay is a better business today than it was two years ago.

We’re not a forced seller, and we’re not in the market trying to sell it today. But at some point in the future, if conditions are right, we would obviously revisit this.

Okay. Thank you.

Yes. I wanted to ask, as you already showed EBITDA margin an increase in this quarter of around 150 basis points.

Don’t you think that your guidance of poise for the year is a little bit conservative? Thank you.

Good morning, Gabriele. I would love to tell you, yes, that’s going to be a big reality is that’s not the case.

And that’s not the case for the dynamics that I explained before in the sense that in the coming quarters, we will have the effect of some volume and revenue erosions from the bank situations that we have in Italy and Merchant Services and some repricing and similar situations that we have outside of Italy in issuing. And both of these elements actually are coming with a material impact on margin and therefore, put some pressure on margin.

And on top of it, we also have this unwinding of last year rightsizing of our personnel cost. And therefore, during the rest of the year, you will have the impact of this that will put some pressure on EBITDA margin that, however, as we said, we continue to see growing at least 50 basis points during the year.

So we confirm our direction of travel. The dynamics that we are observing are the ones that we were expecting at the beginning of the year.

Thank you.

Yes, good morning, everyone. It’s Antonella Frongillo from Intesa.

I have three questions, all on the financial structure. The first one is on the timing.

When should we expect some news on the refinancing of the bond expiring next April? The second one is on the cost of debt.

I have seen that they have delivered a very good reduction and congratulations for that. How should we reason going forward considering the upgrade, the investment grade, but also for the different interest rate environment compared to when you placed the outstanding bonds?

And lastly, could you remind us the change of control clauses of your outstanding bonds and help us to assess what is the maximum deleveraging level they allow at this stage?

Good morning, Antonella. Let me hand over to Bernardo to cover the three questions.

Yes. Thank you.

I mean the first one is going to be easy, not giving you – when we’re doing the refinance, we announced today. We continue to monitor the market.

I think the point that I was trying to make was that we could if we wanted to today. Now there are no longer, I’d say, the kind of constraints we had as a sub-investment-grade issuer in terms of the drafting of the prospectus and so on and so forth, and therefore, a limited number of windows that we can access.

Now we have a lot more flexibility, and we could go as early as next week or wait for the week after or wait for later in the second quarter or even the latter part of the year. We will go when the market conditions are best for us to optimize our capital structure.

So it’s an opportunistic approach to funding. It’s not something we need to do.

We have until midpoint next year, April, if I remember correctly, for the bond to be reimbursed. And at some point between now and then we’ll try and pick the best time to do so.

We won’t wait for the last moment, I guess that’s the only thing that I would say. With regards to the cost of debt now, as you correctly noted, we are now benefiting from better kind of credit spread than we used to, given our investment-grade status.

But at the same time, rates are now higher than they used to be. I think we will work to mitigate the impact on our cost of debt going forward.

But inevitably, given where rates are today compared to where they were in the past, there is a challenge to keep the cost of debt where it is today. However, I don’t believe that it’s going to be materially different in the context of a group which generates approximately or close to €2 billion of EBITDA, spending a few million euros more or less on the cost of debt is not going to make a material difference to us.

That said, I never say never, maybe rates will come further down, and we’ll be successful in keeping the debt cost where it is today. As I said, today, it’s lower than it was in previous quarters.

So, so far, we have succeeded. On the change of control clauses, there is no commitments.

There’s no covenants. Our bonds are already basically investment grade like in terms of covenants.

So there’s no covenants tied to leverage in that respect. And in terms of change of control clauses, there is a double change of control clause trigger in the sense that in order for the bond to be repayable, not only should there be a change of control defined as someone different from the permitted holders, which are current shareholders that own more than 50% of Nexi.

So if someone else other than the sponsors today, shareholders or CDP gains 50% plus one share. And there is a rating downgrade as a consequence of the change of control, that is what triggers the reimbursement of the bond.

Otherwise, there is no change of control. So it’s rather, I’d say, good protection in terms of change of control for Nexi as an issuer.

Thank you. Am I right in calculating the [indiscernible] at this stage, you could deleverage up to 5x or even more?

I don’t believe that’s a scenario that we are currently looking at, Antonella, if I may. Maybe someone else may, but not it’s not our – it’s not one of the areas we are considering.

I was wondering in relation to the allowed by the change of control clauses. I understand your point, as managers, but I was....

I guess, technically. No.

I guess, technically under the conditions that Bernardo explained there, yes. Thank you.

Thank you very much.

Thank you, Antonella.

Hey good morning, Paolo, Bernardo. Just two questions from my side, both on the DACH region.

Germany, you mentioned that Merchant Solutions grew 9% year-on-year. So clearly, you’re gaining some market share there.

Could you just talk about the dynamics you’re seeing in Germany? What’s driving that market share gain and maybe where you’re taking that share from?

And second question also on Germany on the Issuing Solutions. You mentioned that the contract is continuity.

Could you just give some color on the size of that contract and how long that impact should continue?

Good morning, Aditya. So let me take both of them.

Well, in Germany, we continue to see the dynamics that we had in the previous quarters, and we continue to make progress along the same line. First of all, we are more and more focused on the SME segment.

And if you like, as I said before, the mid-corporate, smaller LAKA segment, especially in some specific sectors such as grocery and retail. And this strategy is paying off in terms of market share gains and revenue growth.

Interestingly enough, we see a better performance on revenue than what we may see sometimes on volumes also because we are – we’ve been exiting certain high-volume segments like airlines, for example, that went to competitors, but we did decide to exit them because they were basically not profitable at all and with high risk associated with them. So we are giving up low profitability or no profitability volumes and gaining actually highly profitable volumes in the SME segment.

Where are we taking this from? In practice, I would say, from the local incumbents, from the local players, and you know the names, so I don’t need to mention them, but that’s actually normal.

We are a challenger in Germany. We behave like a challenger.

We go to market very directly. We don’t have specific material bank partnerships there.

And therefore, we also have a lot of flexibility in the way we behave in the market, and we are capturing all those opportunities, and we will continue to do so. By the way, we also have two specific "assets" or further bullets that we are utilizing here that are our presence in software in the restaurant vertical with Hardenberg that is a nice operation that is market leader or co-leader in that vertical.

And therefore, we are also doing a lot in terms of payment software convergence. And we are gradually gaining control of Computop that is the leader in e-commerce and e-commerce gateway solutions in the market that is allowing us also to accelerate in e-commerce.

So it’s a 360-degree strategy, but it’s really, really focused on the most valuable part of the market, and we are taking value from basically the incumbents. On Issuing Solutions seen in DACH, we’re actually highlighting this to help you understand the different dynamics because on the one side, we have Germany Merchant Service is growing high single digit, and we have the total of the region that is more instead at around mid-single digit.

And this is basically a bank that was a historical partner of specifically SIA in the case where we’re processors. not necessarily for the bank directly, but actually for corporate customers that have corporate branded cards and the customer they decided to exit from that business, lost the contracts from that business.

So not per se direct customer loss, but a business that the customer was doing that went somewhere else, has gone somewhere else. And therefore, we have been doing some projects were actually last year that has been supporting us last year.

But this year, now we have, I think, from end of last year, beginning of this year, the volumes have been migrating out. And therefore, we are highlighting it in the quarter because this negative effect will continue during the rest of the year.

But again, let’s be careful because we’re talking about low single-digit millions that in the big scheme of things are irrelevant. But if you look at the quarter for DACH clearly can affect year-on-year growth.

Understood. Thank you, Paolo.

Thank you.

Hi. Good morning.

It’s Craig McDowell from JPMorgan. Thanks for taking my question.

Just one for me, please. And it’s on the recent Worldpay-Global Payments deal.

I’m wondering if you can comment if there is any opportunity, either organic or inorganic to you from the closing and integration of this deal? Thank you.

Good morning, Craig. To be honest with you, the simple answer is no, not directly.

Reality is that in our geographies, we don’t see a lot of Worldpay. And Worldpay, as far as we know them, has basically two major areas of focus.

One is UK, where they’re present also with SME and direct channels and so on and so forth. And then more broadly, global e-com on what some focus, but I think more broadly, global e-com.

And a, we are not present in the UK. We don’t intend to be present in the UK.

We’ve been offering opportunities in the UK, but we didn’t even really consider deeply. And second, global e-com is not really our focus.

We focused on e-com, a lot, but it’s more on local mid-market SME and mid-market plus national as going omni-channel. And these are places where we don’t see them a lot.

Did I answer to your question? Is that the question that you were trying to ask me?

Yes, that’s very clear. Thank you.

Okay. Okay.

Thank you.

Thank you. So thank you very much.

Let’s close it here. Thank you for attending this call.

I guess the messages are quite clear. I think good start of the year in line with our own plans and company very, very focused on driving organically profitable growth and obviously, continuously optimizing everything we can from cost base to capital structure to be able to create more and more value for our shareholders.

We’ll be around in the coming weeks quite a bit. We have next week, I think in Paris, we meet a number of investors and really looking forward to that.

And please come back to us any time for your questions, comments, suggestions. We’re always here.

Thank you so much. Bye-bye.