Earnings call transcript: Nexi’s Q2 2025 revenue grows 3.4%, confirms guidance

Nexi reported a 3.4% revenue growth in the first half of 2025, driven by strong performance in its Merchant Solutions segment and strategic partnerships. The company maintained its full-year guidance for low to mid-single digit revenue growth, despite a challenging market environment. The stock, currently trading at $0.01, has experienced significant pressure with a -99.91% year-to-date return. According to InvestingPro data, the company’s shares are down -99.96% over the past year, reflecting ongoing market concerns.

Key Takeaways

• Revenue grew by 3.4% in the first half of 2025.
• EBITDA increased by 5.2% with margin expansion.
• The company confirmed its full-year guidance.
• Nexi is expanding its e-commerce customer base and partnerships.
• Strong performance noted in Germany and Poland.

Company Performance

Nexi’s performance in Q2 2025 highlights its resilience and strategic focus on growth areas such as integrated payments and e-commerce. The company saw a 3.4% revenue increase, with Merchant Solutions contributing nearly 4% growth. EBITDA rose by 5.2%, indicating effective cost management and operational efficiency. However, InvestingPro’s Financial Health Score indicates a WEAK overall rating of 0.96, suggesting potential underlying challenges. For deeper insights into Nexi’s financial health and competitive position, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

Financial Highlights

• Revenue: Increased by 3.4% in the first half of 2025.
• EBITDA: Grew by 5.2% with an 88 basis point margin expansion.
• Excess cash generation: €407 million in the first half.
• Operating expenses: Grew below 2%.

Outlook & Guidance

Nexi has confirmed its full-year guidance for low to mid-single digit revenue growth. The company anticipates gradual growth acceleration in 2026, with plans to target at least €800 million in excess cash for 2025. Nexi remains committed to maintaining an investment-grade rating and expects a softening impact from bank contract migrations.

Executive Commentary

CEO Paolo Bertrulcu expressed confidence in Nexi’s growth trajectory, stating, "We continue to deliver profitable growth." He emphasized the company’s strategic positioning, saying, "We are building the basis for acceleration in coming years." Bertrulcu also highlighted the importance of issuing as a growth driver, noting, "We see issuing as a GDP plus business."

Risks and Challenges

• Potential market saturation in key regions.
• Macroeconomic pressures affecting consumer spending.
• Challenges in maintaining cost control amid expansion.
• Competitive pressures from other payment solution providers.
• Risks associated with regulatory changes in the financial sector.

Q&A

During the earnings call, analysts focused on Nexi’s potential market share gains from competitor challenges and sought clarification on contract renewal dynamics. The company addressed concerns about volume trends and seasonal variations, as well as the impact of bank contract migrations.

Full transcript - Nexity SA (NEXI) Q2 2025:

Conference Operator: Good morning. This is The CarScope’s conference operator. Welcome and thank you for joining the Nexe First Half twenty twenty five Financial Results Presentation. As a reminder, all participants are in listen only mode. After the presentation, there will be an opportunity to ask questions.

At this time, I would like to turn the conference over to Paolo Bertrulcu, CEO of Nexi. Please go ahead, sir.

Paolo Bertrulcu, CEO, Nexi: Thank you. Good morning. Good morning to everyone, and welcome to our results call for the 2025. As usual, I’m here with Bernardo Migloni, our Deputy GM and CFO Fani Mantegata, who leads our Investor Relations activities and a number of colleagues that may provide help in case we want to deep dive on very specific topics. Today, I will start by providing a short overview of the progress in the first half and the key messages associated to it.

We’ll then hand over to Bernardo for results and come back for conclusions and most importantly, together with Bernardo to answer to your questions. Let me start on Page three of the document with a summary of our key messages. First of all, continue to deliver profitable growth, and I would add, strong cash generation. The first half of the year, revenues were up 3.4%, with Merchant Solutions up close to 4%, but actually growth across all business units and growth across all regions as well. In the first half, EBITDA did grow at 5.2 with an 88 basis point EBITDA margin expansion, thanks to a combination, obviously, of top line growth, continued operating leverage and strong cost control with OpEx growing in the first half below 2%.

And last but not least, and most importantly, I would say, given the focus strong focus we have on it, In the first half of the year, we’ll be generating excess cash for more than EUR 400,000,000, EUR $4.00 7,000,000 more specifically, which is well on track to deliver the committed more EUR800 million across the full year. Second set of messages, we continue to shape Nexive for future profitable growth and reacceleration as we look into the coming years. First of all, we continue to progress on our strategy on integrated payments and software payment integration. As we discussed in the past, strategy is fully focused on partnering with ISB with different partnering model. The first half of the year, we did continue to progress in the development of this partnership.

We have been adding another thirty, forty partnerships across the region. And we have a fairly good coverage of partners across different regions. In particular, I would focus on The Nordics, where we have a very strong coverage. And The Nordics are particularly relevant for this conversation because that’s the region where we see integrated payments having higher relevance versus the rest of our geographies. Second key message, we continue to have a strong performance in the Italian complementary channels for SMEs.

As a reminder, SMEs is our highest priority. In general, in the first half of the year, complementary channels were representing 26% of the new sales, up from 20% last year. And the field sales channel, which is the most recent one, we’ve been developing the triple the acquisition volumes in the first half in the period. Third key message, we continue to see strong progress on e commerce with good customer base growth, about 5% customer base growth across the various geographies. This is very important to us as e commerce is one of the key pillar of our growth and future acceleration.

And last but not least, and this is something that is very important, especially given the dynamics that we’ve been observing over the last two or three years. We continue to strengthen the relationship with Italian banks that are incredibly important for the Italian region. Here, we’re mentioning two facts that are really important to give you a clear sense of resilience of our position in Italy. Over the last twelve months, we’ve been renewing 100% on the contracts that were potentially expiring. And on top of it, we have already renewed the major contracts that we that could potentially expire in 2025.

Let me mention one, we normally, as you know, don’t call out specific customer names or contract relationships, but this one was also into a very specific press release. We’ll be renewing our relationship with Credit Agricole in Italy, very successful relationship with Credit Agricole in Italy for both merchant services and issuing solutions from now up until 2029. Third key message, continue to create value for our shareholders. As a reminder, across 2024 and 2025, we’re returning to our shareholders EUR 1,100,000,000.0 as a combination of dividends and buybacks. And we’re doing this while having become investment grade issuer at the same time.

In particular, in 2025, we are returning EUR 600,000,000, up 20% versus the previous year. We have paid our very first dividend of EUR 300,000,000 in May. And again, as a reminder, we’re committed to increase this dividend over time, and we have the share buyback program of a similar size that is ongoing as we speak. Last but not least, the last quarter, we’ve also issued our first issuance actually on as an investment grade player, we’ve issued EUR $750,000,000 of senior unsecured notes, six years with 150 basis point spread, which we believe is quite telling about the outlook of the business. Overall, in this environment, we are confirming our guidance for the full year.

Revenues growing low to mid single digit, EBITDA margin expanding at least 50 basis points and last but not least, excess cash of at least EUR 800,000,000, starting from the EUR $4.00 7 that we have delivered in the first half of the year. Let me now hand over to Bernardo.

Bernardo Migloni, Deputy GM and CFO, Nexi: Thanks, Paulo. Good morning, everyone. So results for the quarter and first half, I’d say, show continued and steady progress towards delivering our full year guidance as Pablo has just finished with his section. If we look at Slide five, we have the breakdown of revenues in the quarter and for the first half. As you see for the first half, we grow 3.4%, I’d say, in the middle of our low to mid single digit top line growth range.

In the quarter, was a slight deceleration 3%, but broadly speaking, in line with pretty steady and in line with the first quarter of the year. EBITDA margin continues to grow 34 basis points in the quarter. We are at 88 basis points in the year. Again, our guidance was to do more than 50 basis points for the full year. So I’d say that we are on track for that as well with EBITDA growing 3.7% in the quarter, and that is just north of 5% for the first half.

So I’d say at a consolidated level for the group, a good second quarter in line with our expectations. Moving on to Merchant Solutions. Here, we highlight as usual, the strong contribution to our top line growth coming from international schemes, which also benefits to some extent from migration across the regions in which we operate from national schemes where they’re present to international schemes. As expected, and we have talked about this a number of times, our underlying volumes and revenues are growing and accelerating more than last year. However, we have the effect that we are working through this year of banks that we had lost a few years ago in terms of distribution capacity.

This weighs approximately two percentage points, I would say, in terms of the value of managed transactions. Notwithstanding that, it’s highlighted the resilience and the strength of our business and its ability to grow in the quarter by 3.4% in Merchant Solutions and close to 4%, if you look at it in the first half. We continue to accelerate our growth in SMEs, our core segment. DAC and Poland, we call out as e commerce as core engines of growth for our business, and we continue to grow our business, thanks to upselling of value added services and products to our customer base. We move on to issuing solutions.

Some of similar themes that we highlighted for merchant solutions apply here as well. We have a continued growth of international scheme volumes outpacing those with national schemes as we move more and more towards those. We have continued success in upselling our international debit product in Italy, which is a key driver for growth in that region and upselling and cross selling of value added services across geographies. Again, in the second quarter, I would say, mimics that of the first quarter broadly in line with the full first half number of 2.9%. Nothing really compared to other years project work, these kind of things are pretty steady phasing throughout the first half of the year.

So nothing really to call out also compared to last year. Digital Banking Solutions, I’d say 2.5% growth in the quarter is quite good given the main infrastructural nature of this business, even though in those areas where we benefit from volume growth, we are taking advantage of it, for instance, on instant payments and our partnership with EBA clearing. We continue in this business unit as well to increase the value of our client base by cross selling and up selling value added services. For instance, here we call out on instant payments front how we have rolled out verification of pay and anti fraud features on the instant payment product. If we look across geographies on Slide nine, I would say pretty homogeneous set of numbers for first and second quarter across geographies.

Italy growing 4%, which is supported again as we mentioned in both issuing and acquiring by international scheme volume growth. We have obviously in Italy most of that drag I was referring to in terms of customers which we lost a few years ago and are now starting to move away from us. Nordics, I’d say, good revenue performance with 3% top line growth, which is supported in particular, I’d say, by e commerce growth and the upselling of value added products and services. In the DACH region, we have strong growth in revenues in Merchant Solutions in Germany. We call that out at 8% top line.

And then we have one issuing processing client, which has been migrating away from us for the last three years or so, which is hitting the top line, which otherwise would be showing the strong growth as we’re experiencing in Germany and Merchant Solutions. On the CSE front, we will be lapping say, the kicking in or the discount, which was embedded in a contract we acquired a number of years ago in Greece. Other than that, I’d say, there’s solid performance in particular in Poland, is one together with Germany, one of the key engines of growth for the group. We look at the costs and the cost evolution, another, I’d say, good quarter of cost control and commitment to contain growth in costs, 2.3%, 1.6% in the first half. If you look at the nature or if you split the costs by nature between HR costs and non HR costs, we have the year on year comp effect, let’s say, on personnel costs last year.

Most of the people that left, left roundabout this time. So we have a year on year comparison benefit in the first half in absolute terms also, obviously. This will unwind in the second quarter sorry, in the second half. And at the same time, we have some front loading of project work in the non HR costs, which actually, again, will unwind in the second half. So broadly speaking, I guess, the key takeaway for me is we manage our cost base as we do with our guidance on a full year basis, and we’re highly confident that with regards to our overall targets, these are highly achievable and we remain committed to second half cost growth, which is pretty much in line with what we saw in the first half.

So strong reduction compared to last year. On the CapEx front, again, we need to speak about seasonality. 180,000,000 is just around 10% of revenues in terms of CapEx intensity. We have a sharp reduction compared to first half of last year. In the second half of last year, we had approximately €250,000,000 if I remember correctly of CapEx.

So there is seasonality as you would expect in the second half of the year. We will expect to have something similar this year, although we remain committed to reducing our CapEx intensity and in absolute terms year on year as we have discussed in the past. So there is some phasing effect. And I’d say that CapEx intensity will also come down as well as the absolute value of CapEx compared to 2024. Slide 12 about reduction of transformation integration costs.

On the far left, you see how we continue to reduce the integration transformation associated with two very large mergers we completed at the 2021 or during 2021. These come down to just under €35,000,000 The overall absolute number is also coming down year on year. Clearly, last year, we had a large one off coming from the downsizing plan from the severance cost, which was €165,000,000 But even if you normalize for that, we expect a full year reduction in this line item, also helping to compound the EBITDA growth and generate incremental cash year on year, which we see on Slide 13. On Slide 13, we have the excess cash generation, so our measure of free cash flow essentially. We have a target of at least EUR 800,000,000 for the year.

We are at EUR $4.00 7,000,000. There are seasonality effects here. However, I would expect I mean, we feel Paulo and I feel very comfortable with regards to our target of exceeding EUR 800,000,000 at this stage of the year and given where we are in the first half. Finally, before I hand the floor back to Paolo, we look at our indebtedness. We I think it’s important to say that we are 2.7 times EBITDA having already returned €1,000,000,000 This is at the June 30.

Today, we’re closer to €1,100,000,000 to investors in the form of share buybacks and our first dividend as a listed company, which was paid in May. Had we not done this, clearly, deleveraging profit would be much deeper. We’d be at 2.2 times. We’re investment grade, continue absolutely committed to maintaining this rating, hopefully improving it. And this helps us manage this debt stack very proactively.

We issued $750,000,000 note last May, which was successfully priced as Paul was suggesting, the very low end of the pricing range consistent with a higher rating than ours. And we managed to contain our cost of debt to 2.4%, which is clearly also something which helps us manage this cash flow generation. So that said, let me hand the floor back to Pablo for his closing remarks.

Paolo Bertrulcu, CEO, Nexi: Thank you, Bernardo. So you’ve seen a fairly, I would say, straightforward set of results. On the back of all of that, we are confirming our guidance for the year. We expect revenue to grow low to mid single digit for the full year. As a reminder, we would be including into this guidance two aspects, an underlying growth acceleration versus last year that was about 5%.

However, not undermined by a combination of some merchant services effect in Italy on the back of banks M and A and other contract effects coming from two, three years ago. And at the same time, instead of smaller contract negotiations or terminations across the other geographies for IS. At the same time, we continue to expand margin by at least 50 basis points, thanks to a strong cost control a continuous strong cost control that Bernardo has just mentioned again. And overall, for the year, we expect to grow cash by at least least €800,000,000 for the full year. Let me just recap the three very key messages: continued delivery of profitable growth.

Again, let me stress the exascale generation continues acceleration. Second point, shaping Nexi for future profitable growth and reacceleration. Let me stress again the strengthening of the relationships with the Italian banks with a very successful season of renewals and extensions, including the key contracts that were potentially expiring into 2025. And last but not least, returning value back to shareholders with EUR 1,100,000,000.0 returned across 2025 and 2026. Let me pause there and open to your questions.

Conference Operator: Excuse me, this is the Chorus Call conference operator. We will now begin the question and answer session. The first question is from Justin Faucette from UBS. Please go ahead, sir.

Justin Faucette, Analyst, UBS: Thank you very much and good morning, Paolo, Bernardo. Thank you for having me. So a few here, if I may. First, a couple of questions on Italy. So if I look at retail sales, it looks like for the quarter, it hit maybe about 1% year over year in Italy per hour math, suggesting there’s still a degree of cash to card conversion on that.

And excluding M and A, it seems like maybe you were close to in line with industry growth. But maybe you could just parse through a few of those impacts and tie in the Italy growth and maybe size a bit the M and A impact as we can see the volume, the overall transaction volume growing, I mean, around flattish for the quarter. Secondarily, you mentioned a little bit about new sales channels in Italy. How material is this getting the direct go to market, with SMEs? And maybe you could talk about the margin associated with those, meaning clearly you have an incremental cost associated with paying salespeople.

Should we still expect this to be EBITDA margin neutral as it becomes more material? Lastly, I wanted to ask, there’s been some news around the Dankort scheme, which you operate in Denmark and the share of transactions going down quite meaningfully. I think from 80 to 40 was one article that I saw. Maybe we could just highlight a little bit around what drove that and maybe remind us how you monetize that scheme ownership and understand that functionality is supposed to be improving. It sounds like fees are increasing as well.

Should we expect that to hit P and L directly in a positive fashion going forward? Thank you.

Paolo Bertrulcu, CEO, Nexi: Morning, Justin. Let me try to take the three of them. Retail sales, in Italy, if you strip out the effect of the couple of, if you like, banks that we’ve lost two years back and are now migrating actually the market. We are growing we’ll be growing nicely on volumes and pretty much in line with the market. So I think that the cash to card conversion in Italy remains fairly healthy.

And we see it even more when you look at ecom, where the reality is that the vast majority of the customers remains with us, even if another bank would like to migrate them and they remain with us for obvious reasons of stronger products, stronger support and all of that. So I would say the net of these capital banks affects the underlying volume trends remain pretty robust. Clearly, they may be affected by macro, but the reality is that cash to card conversion is the main driver here and remains pretty strong. On SME direct sales and so on and so forth, again, as a reminder, we did start adding complementary channels to our bank channels. They remain the most strategic and the most relevant for us back four years ago, five years ago, with a strong focus on digital channels and retail channels.

And more recently, we have started to add obviously the ISV channel as well, so the software partners, although that remains very, very low as a relevance in Italy, not just for us, for the entire market. And the real new news is when one years point ago, more or less, we did add a more direct sales on the ground as a combination of our own salespeople and sales agents, which is a normal practice in Italy to reach out to SMEs. This is the one that is driving the acceleration of our performance. They normally target larger SMEs, but also midsized SMEs that we normally go with our own people on the mid segment on the larger and more variable ones. We go with third party agents on the smaller ones here.

As far as the economics are sorry, and overall, what is nice is that this has been more than rebalancing the potential lack of distribution from the couple of banks that have been changing a couple of years ago. In terms of margins, it’s always a little bit difficult to say, but never forget that, yes, it’s true that we need to either have OpEx associated to our people to pay a new channel. But never forget the fact that as the vast majority of these customers are coming from customers that we had with banks, we were not, in any case, fully retaining the full revenues, full price as we had to leave to the banks a good share of that because it was more of a wholesale relationship with the bank. So for the moment, these are kind of a more neutral effect. Last but not least, as Danforth is concerned, as you know, the local institutions were obliged to go on the topic of Dunkirk in opening Dunkirk to multi acquiring approach because that to make it consistent with European regulation There’s been a very constructive and longer conversation across the ecosystem with merchants involved, banks involved, ourselves and other players involved.

We believe that the outcome is ultimately a balanced outcome, where on the one side, there will be over time more acquirers into the market. Over time means that I think this is going to be applicable towards end of next year, I think, two years from now. So I think two years from now. So there is a lot of time before it happens. But the reality is that we’re also gaining much more flexibility and economic support on the running of these teams, which is considered locally a pretty relevant national asset and a key asset from the merchants that support it heavily.

I think that all in is this can be a positive evolution. As far as the volume dynamics that you observe with national schemes, not just anchor, losing value to international schemes. I’ll just remind the fact that a little bit across all geographies, including Denmark, despite the fact that we are owners of the scheme, the migration is normally net positive for us. So in general, we are obviously now working on this evolution in Denmark, but we see it as neutral to positive.

Justin Faucette, Analyst, UBS: Great. Thank you so much.

Conference Operator: The next question is from Josh Levine, Autonomous Research. Please go ahead, sir.

Josh Levine, Analyst, Autonomous Research: Good morning. Two questions for me. One of your largest competitors has been in the news, not in a good way and is struggling to turn around the company. Has that created any opportunities or might it create any opportunities for Nexe? And then, Pablo, you had mentioned the acceleration in growth.

You’ve mentioned that before. Could you maybe give us a sense of how much roughly we might be talking about and over what time frame? Thank you.

Paolo Bertrulcu, CEO, Nexi: Good morning, Josh. Thank you for your questions. On the first one, in general, we try to capture all possible opportunities offered by the markets, including ones offered by competitors as well. In general, we see good traction in conversations with, let’s say, counterparts that are longer term focused and really focused on resilience, stability and again, term outlook of growth. And this normally has to do with banking partners, ISV partners, I would say, very large corporates, but also people and talent.

So this is clearly an area of focus for us. As far as while actually when you talk about smaller SMEs or individual customers, they’re really not focused on these type of things that are very much distracted by their own business as it is normal. Talking about acceleration here, I really want to be very, very clear and consistent with everything we’ve said in the past. As you can easily understand from our first half performance being ahead materially ahead of our full year guidance, in the second half of the year, we expect to see a softer top line growth and as a consequence also EBITDA margin expansion. So we’re just confirming our guidance.

And this has to do with the fact that while we continue to see underlying growth and a little bit of acceleration as well in the second half of the year, we will see also a more material impact of these bank migrations that combine themselves or if you like contract renegotiations. And this is absolutely in line with what we said in the past. As we look forward, we have been starting, obviously, our work on the budget for next year and also a refresh in our longer term plan. And for now, what we see is a gradual acceleration into 2026 and most importantly, the coming years is a combination of continued underlying growth acceleration driven by mostly, I would say, our growth engine and the resilience of our very large cash engines starting from Italy. But at the same time, a softening of the impact of these bank contract renegotiations or in a couple of cases, losses.

So that’s the dynamic that we expect to see.

Josh Levine, Analyst, Autonomous Research: Very helpful. Thank you.

Conference Operator: The next question is from Gaguar Hermann of Barclays. Please go ahead.

Gaguar Hermann, Analyst, Barclays: Good morning, everyone. A few questions for me, please. The first one, given that we are now more than halfway into 2025, can you comment on 2026? And based on the contracts that you have renewed and what you still have in the pipeline, how confident are you that we are going to see the growth acceleration that consensus expects? And then maybe just trying to understand the phasing for the rest of the year.

I think you guided initially as a relatively strong Q1 and then Q2 to Q4 being slightly lower than Q1 and especially due to this Italy M and A impact that you called out. But I think you already mentioned some M and A impact in Italy in Q4 last year. So why shouldn’t we expect sort of a pickup in Q4 as this effect should be partly over? And then last question, on your growth and especially in Italy, can you please impact what’s the growth attributable to integrated software payments offering versus point of sales terminal, please? Thank you.

Paolo Bertrulcu, CEO, Nexi: Good morning, Gerguer. So 2026, we’ll talk about it, obviously, in March when we talk about guidance for the New Year. But we see potential for reacceleration, I think, we’ve commented in the past and we confirm it. Again, the work is ongoing. We just started giving to the rest of the team on the targets for next year.

But the dynamic that we expect to see is the one that I just mentioned in my previous answer, which is on the one side, further acceleration of the our ultimately growth engines, namely, I would say, the DACH region, Germany, in particular, and e commerce. At the same time, a continued resilient performance of Italy. And in parallel, a softening of the impact of these bank contracts that were lost or renegotiated with discounts over the last, I would say, ultimately in 2023 and 2024. So that’s the dynamic that we see. So at the moment, that’s what we expect.

In the 2025, I don’t remember exactly what was the effect of last quarter last year, last quarter, but I think it was a pretty small. The fact that instead that will be impacting the second half is actually the peaking, I would say, of the effects of basically the known banks losses, I would say, in Italy and the kicking in of some of the discounts that we have to give in the renegotiation on IS contracts from the past. So it’s more of a phasing effect of the different dynamics rather than anything else. And at the moment, we don’t see any new news from where we were when we provided the guidance for the year back in March. Last question was, if I understand it properly, Greguara, on the impact of the SV channel in Italy.

To be honest with you, as we’ve said many, many times, ISVs are very marginal in Italy at the moment in terms of dynamics here. Nevertheless, we’ve been rushing to cover as many as possible and we have a nice set of pretty strong and strategic partnership. And here, we are preparing for the future more than really in terms of proposition integration, in terms of support, in terms of business model definition, while at the moment, there is still limited commercial activity because there is still limited demand from the market. At the same time, we work a lot with all possible type of partners that are more, if you like, distributors rather than real software providers that are integrating software and payments. And we have another a number of examples of local situations being very nice and quite effective, but can’t really define them as true ISVs.

But again, we’re really focused on this also in Italy because over time this will become more relevant and we want to be fully ready for it. Thanks very much.

Conference Operator: The next question is from Sebastien Stavovitz of Kepler Cheuvreux. Please go ahead, sir.

Sebastien Stavovitz, Analyst, Kepler Cheuvreux: Yes. Hello, everyone, and thanks for taking my question. Could you please provide some colors on volume trends since the start of the quarter? Have you seen any specific change in market dynamics over the past few weeks given the uncertain macro conditions? Your European peers’ board line was blaming some tougher market condition in June.

Just curious about the dynamics since the start of the quarter. And the second one, you have renewed a lot of contracts recently. I just wanted to know, do you have any big contract renewals that is coming for 2026? Just to understand a little bit the downside risk for 2026. Thank you.

Paolo Bertrulcu, CEO, Nexi: Good morning, Sebastian. Listen, on volume trends, we have nothing remarkable to be mentioned at this stage. July is just finishing, and we still need to fully understand the numbers. Never forget that for our region, for our geographical footprint, August is the real month that basically shapes somehow the summer because that’s really the holiday month. We continue to see pretty resilient strong trends on the typical, if you like, grocery channels and in general, non discretionary.

I think on discretionary spending, it really depends a little bit on the various geographies, maybe a bit softer than nondiscretionary spending. However, never forget that the trends are affected by a number of things, weekends, the weather. For now, we feel comfortable with the guidance we have given. And we there is nothing really major to be pointed out in terms of dynamics. Again, forget that instead, you will continue to see, for next year at least, some volume slowdown in Italy that is driven by the bank contracts that we’ve been discussing few times already in this call that were known and budgeted and embedded already into the guidance.

As far as big contracts into next year, we do not have major ones, but this does not mean that we don’t decide together with customers to anticipate certain renewals simply to make sure that we’re standing in advance the future contracts as well. It really, really depends. But for now, no, we don’t see anything major. Never forget that when you have hundreds of bank relationships. Some of them are more material, some of them are less material and therefore you renegotiate that basically every day.

But at the moment, we don’t see in the coming months and quarters anything major coming.

Bernardo Migloni, Deputy GM and CFO, Nexi: If I may jump in Sebastien, I think, Paolo, you mentioned in your remarks and I was just thinking back to Josh’s question about the Worldline situation or our named competitor, I think it was, has it helped us or not. I think we one of our key partners in Italy, French Bank announced recently that we had renewed and extended our partnership with them here. Maybe we were helped by the situation, but probably it’s got to do with our the value relationship with them, the long standing and the quality of the relationship there. But in general, I mean, I think that would be the one that we discussed in the past is one of the renewals that we were interested in and that’s happened.

Sebastien Stavovitz, Analyst, Kepler Cheuvreux: Okay. Thank you.

Conference Operator: The next question is from Mohammed Moala from Goldman Sachs. Please go ahead.

Mohammed Moala, Analyst, Goldman Sachs: Great. Thank you. Good morning, Pawel. Good morning, Bernardo. Two from me.

Firstly, just on that last point, you talked about sort of credit agriquel. When you look at sort of some of your competitors like Worldline, as you look outside of your kind of key home markets, and I’m talking now specifically kind of France, maybe Benelux, what’s the kind of opportunities you see across both the merchant portfolio and the sort of issuing side to sort of potentially kind of take on more volume and come more contracts over the medium term? And secondly, just as we think of the issuing business of cards and digital payments, I know you’ve got some headwinds right now, but sort of over the medium term, is this sort of a GDP business, net of sort of price concessions? Or do you believe you can sort of outperform that? And if that is the case, what would be needed to kind of grow above GDP there?

Thank you.

Paolo Bertrulcu, CEO, Nexi: Good morning, Mo. Listen, on your first point, honestly, stick to our strategy and our focus a little bit also independently from the shorter term dynamics that competitors may have and hopefully, will also recover from. Specifically and therefore, we stay focused on our geographies and we stay focused on our also priorities within those geographies. From this point of view, Benelux and France have never been priorities for us given the portfolio we currently have with a number of chances to enter Benelux. We never decided to capture them for a number of reasons.

And similarly, is a market where it is not obvious know how to have value creating entrance. Never forget that if you’re talking about merchant services, it’s very difficult to roll out greenfield in a very profitable way at scale, okay? I think given our scale and the many very important priorities for growth that we have, we really try to stay focused here. So at the moment, we are not putting a new or specific focus in those two geographies. Obviously, if relevant, highly value creating opportunities will come, We will consider them, but we’ve not changed our strategy because of the current situation with competition.

On the issuing business, we have a bit more of a more optimistic view than just GDP. And obviously, it depends on phasing, depends on a number of things. But we see this business, as you correctly mentioned, on the one side being affected by contract renegotiations and all of that. But at the same time, we see it also as resilient business because banks tend to be quite loyal here. Migrations are not an obvious thing in this space.

And actually, we see volumes growth affecting also this space, positive volume growth affecting also this space. And most importantly, we see the opportunity in the coming years to export more and more Italian new model that is the licensing model, I would call it, where it’s a Nexi product being more distributed by banks rather than Nexi being a technology provider to banks only and that’s a much richer product with a lot of higher upside. Therefore, we see these more as a GDP plus type of business, Not as I think with the same potential of merchant services for a number of reasons, but not necessarily a low single digit only business. And again, sorry, as a reminder, you also have some effects from one specific bank loss back two years ago that will touch us over the next couple of years. But that’s again, underlying net of this very specific effect, we see this as a GDP plus business.

Mohammed Moala, Analyst, Goldman Sachs: That’s great. Thank you.

Conference Operator: The next question is from Alexander Foehr from BNP Paribas Xaine. Please go ahead.

Alexander Foehr, Analyst, BNP Paribas: Good morning. Thanks for letting me on. A couple of questions. One, maybe more for Bernardo, just going through the free cash flow bridge. I think Bernardo, called out CapEx phasing as we think of the second half.

I thought in H1 working cap outflows were a bit on the high side, the other item as well. So just wondering how we should think of those in H2 and also severances were probably quite a bit lower than what we expected. So is it the sort of run rate we should expect for the second half and for 2026? And then my other question is something you mentioned in the press release around the Klarna partnership having good traction in The Nordics and Germany. I was hoping you could elaborate on this a little bit.

Is it mostly volume led? Is it unit economics that could be a bit richer in the venue partnership? Just any color you could share would be super helpful. Thank you.

Bernardo Migloni, Deputy GM and CFO, Nexi: Alex, so on cash flow, as we saw even last year, there is some seasonality effect in cash flow coming from, firstly, clearly EBITDA, which is expected to the second half of the year tends to be heavier than the first half, then we have how taxes play out in this, how interest payments play out in this, and lastly, the phasing of CapEx and non recurring items. So all of these together, I think, if you look at the first half, the CapEx number, as I mentioned, is going to be heavier in the second half, but not all P and L CapEx is cash flow, right? So if you get an invoice, you book it in December, but maybe the cash goes out last year. And hence, the impact of CapEx might be counterbalanced by net working capital. And believe me, we do our best to make sure that it’s managed as effectively and efficiently as possible.

Same goes with nonrecurring items. Specifically, with severance, you’re right. I mean, we guided to more or less half of the cash cost of severance last year and the other half being spread over 25, 26. Now this isn’t an exact science, but that would mean that we would have more than the annualization of the 7,500,000.0 we had in the first half and the second half. I mean, we confirm broadly speaking this phasing, but can I say it’s going to be exactly a quarter of the total that we booked in the P and L last year on a cash basis expense in second half or in the full year 2025, might be a few million better or worse, but broadly speaking, that’s right?

I mean, what I want to just underline is that being at where we are $4.00 $7,000,000 this time of year, considering all these phasing effects and the levers we have to pull in the second half in terms of working capital, in terms of how we manage CapEx, how we manage non recurring items, how we manage all the P and L including interest expense is a position where we feel very comfortable in terms of managing the full the delivery of the at least 800,000,000 cash flow for the year.

Paolo Bertrulcu, CEO, Nexi: Far as Alex. As far as instead Klarna is concerned, general, we have signed a broader partnership agreement with them, which basically entails geographical expansion also beyond The Nordics is a group wide deal. The rollout of new functionalities and capabilities from Klarna and also new economics that in the context of all of these are somehow more favorable than the previous ones for Nexi. We’re pretty happy. As we mentioned several times in the past, we see buy now, pay later a product that we don’t own is not our business, but we are very keen to distribute an offer to our merchants because it is a valuable product for them, and we’re very happy to partner with Clarna in this space.

Today, we will be calling out The Nordics in particular because this is by now, Palladium is particularly developed in those geographies, and we have a strong position as customer base in those geographies. But over time, this will become more relevant also as well.

Aditha Budhabarapu, Analyst, Bank of America: Got it. Thank you.

Conference Operator: The next question is from Najin Najatib of Deutsche Bank. Please go ahead.

Paolo Bertrulcu, CEO, Nexi0: Hi, good morning. Thanks for taking my question. Maybe one for Bernardo. You mentioned approximately two percentage point pressure on the value of managed transactions, MS, for the loss of bank contracts. I was wondering what you expect for the next quarter here and if you can quantify this in terms of net revenues?

Thank you.

Bernardo Migloni, Deputy GM and CFO, Nexi: I can tell you, I’m not going to comment on the impact on net revenues. We don’t want to give this kind of information in terms of profitability, individual clients, etcetera. Mean, more or less 2% in the quarter. Would say this it is probably going to accelerate a bit. Obviously, we’ll do our best to make sure it’s as mitigated as possible.

I mean, the flip side of this is it will have if we mitigate it, so there’s a slower, let’s say, outflow of these clients, it’s better for us from a cash perspective, from NPV perspective, but it makes these kind of calls we kind of repeat it over and over. But I would expect that 2% to be broadly the same, maybe accelerating in the coming quarters.

Paolo Bertrulcu, CEO, Nexi0: So what measures do you take to mitigate actually?

Bernardo Migloni, Deputy GM and CFO, Nexi: We do our best to try and retain clients, win them back. I mean, Pavel, if you want to comment, we had the call on we had the question on our sales business.

Paolo Bertrulcu, CEO, Nexi: Yes. Morning, Rajeem. The dynamic here, we really have two dynamics. You have certain and this is typical of our industry, it’s not just Nex. There are situations where you are just a technical provider, therefore, at some point, you have to migrate them.

And this is the case, for example, for some issuing contracts. While in merchant services, in this specific case, these customers have also relationship with Nexe. The product is technically Nexe product as well, and therefore, we fight on the market, also thanks to our new sales channels to retain as many customers as possible. And that’s the reason why while the bank tries to migrate the customers back to them. So it’s a competitive dynamic that is happening.

And therefore, it is not a one off migration happening on a certain day of every customer. It’s something that is happening on a day by day basis. And therefore, as Fernando was suggesting, the final impact will depend on how this dynamic unfold over the next several months actually because this is not just at the end of this year.

Paolo Bertrulcu, CEO, Nexi0: Thank you.

Conference Operator: The next question is from Aditha Budhabarapu from Bank of America. Please go ahead.

Aditha Budhabarapu, Analyst, Bank of America: Hi, good morning, Paolo, Bernardo. Thanks for taking my question. So a couple for me. So firstly, just on the OpEx growth for H2, Bernardo, maybe could you just comment on some of the any moving parts there? Of course, last year, you had the benefit of the all the personnel costs, but if you could offer any color on each of this year?

Second question, you became an acquirer for the Vero wallet earlier this year and I think the plan was to roll that out in Germany from the middle of the year. So if you could give any update on how that rollout is going, that would be quite useful. And the final one, Merchant Services, again, saw a small improvement in the take rate in Q2. Any comment there on maybe what’s driving that?

Bernardo Migloni, Deputy GM and CFO, Nexi: Just take the first and the last one maybe. Last one first, I I think when we’re trying to measure the hundredth of a basis point improvement in take rate, I think it’s false precision, Adir. I like to say that there is a strategy behind it, etcetera. But the truth is, it has take rate as we measure it is too coarse to measure to be that accurate. I think in general, we try and make the point that we through value added services and products, we upsell and cross sell to our customer base.

We try to offset margin pressure coming from competition, renegotiation of clients, etcetera. And historically, we’ve been, I’d say, successful in doing so and defending the take rate, maybe slightly increasing it, but it’s impossible to comment on a quarterly basis at this level of detail. I think the good news is that it’s stable or slightly improving most of the time. On personnel costs, again, we have clearly, we had about 1,000 people gross of new hires, etcetera, leave during the course of 2024. Mostly, I’d say, the weighted average is most of this happening around about this time of last year and hence the year on year comp effect that was speaking of in the first half, which reverses in the second half where we have returned to normal kind of impacts coming from wage drift, new hires, etcetera, on the personnel costs, which are budgeted for expected and embedded in our expectation that overall for the year we have that reduction I spoke of from compared to that just under 3% growth last year, we expect it to be materially lower this year.

And the inversion of the second half of the trend we’ve seen in personnel costs is offset by an inversion in the trend that we’ve seen in the non HR costs. And I would say there’s a bunch of things that we’re doing. There’s no individual one item that causes this, but as was mentioning, there’s some timing effects. So we had some more intense project work in the first half. This corresponds project work tends to be a bit more revenues, bit more costs and a bit of less of that in the second half.

So that impacts non HR costs. But also for instance, we’re closing the second largest data center in the second half of this year, one in Italy here. No, last year we closed the biggest one. This is the second biggest one. And this will help us in the second half of this year.

So all of this we embed into our guidance at the beginning of the year and we guide to a yearly performance on revenues and margins and therefore on costs and EBITDA. And as I said, we are highly confident with regards to the full year performance and the second half being in line with the first. Paolo, on WIRO?

Paolo Bertrulcu, CEO, Nexi: On WIRO, good morning. The on WIRO, again, as we have seen discussed in the past, we are happy to support any alternative payment method that becomes relevant for our markets and most importantly for our customers, for the merchants. We are, if you like, now a special one because we are also one of the founding shareholders WIRO together with a number of European banks. As we speak, we are working to enable WIRO in the one geography that is relevant to us for now, which is Germany, because so far, the geographies that are affected to these are more Benelux and France and now Germany is coming on top of them. For now, the proposition has been more on a person to person, person to professional somehow, basically an app to app type of thing.

It will land instead on merchants more towards the end of the year on e commerce, and that’s where our focus is. So we are working to enable e commerce acceptance for WIRO on larger merchants, the ones that are at this stage more interested into this. And then we see how it evolves. But again, as we go forward, we’ll support the majority of these alternative payment methods as they become important. And actually, we believe that over time, we will become important.

Aditha Budhabarapu, Analyst, Bank of America: Understood. Thank you.

Conference Operator: The next question is from Gabriele Venturi of Bank Acros. Please go ahead.

Paolo Bertrulcu, CEO, Nexi1: Good morning. Thanks for taking my question. I have two questions. First one, if you think that the current work line situation would imply a market share gain for you? Second one, if you can give us color on renewal of partnership if quarantine works are done at conditions that are better or worse than in the past for you?

Thank you.

Paolo Bertrulcu, CEO, Nexi: Good morning, Gabriel. Listen, I think on our French competitive situation, we’ve been already commenting. I think first of all, to be honest with you, it may be some strange, but we hope and perhaps that we’ll recover very fast from few topics that are affecting them, because I think it’s good for the industry and ultimately also for us. Said that, we already commented that we see more interest in Nexi, let me put it that way, from if you like the counterparts that are more long term oriented and where ultimately the resilience and the long term credibility and growth future growth is relevant. Therefore, we have interesting conversations with large customers, banks, partners and also in some case, as well.

As far as the renewals are concerned, you do these renewals, it’s quite normal that you provide an incentive that never forget is on top of growing volumes, okay? So when you get to the moment of the renewal, you may have a shorter term heat, but then as volume continue to grow, it is well recovered. In general, we’re pretty happy with the long list of renewals that we’ve been able to successfully complete over the last twenty four months. And as I mentioned before, also cover the major ones that could have been starting this year.

Gaguar Hermann, Analyst, Barclays: Thank you.

Conference Operator: Mr. Vethoruto, there are no more questions registered at this time.

Paolo Bertrulcu, CEO, Nexi: Thank you. Thank you very much. Thank you for attending our call. My last, if you like, wrap a comment. I understand that you have a lot of curiosity and interest in understanding the short term dynamics of volumes for the quarter this summer and so on and so forth.

We are obviously very focused on that ourselves. So we fully understand it. At the same time, I really want to make sure that the main focus remains on the fact that we are confirming the guidance for this year and navigating through this year and most importantly, building the basis for the acceleration into the coming years. As also in 2025, we will deliver a strong cash generation and higher cash generation versus what we’ve done last year, materially higher versus what we’ve done last year. Let us stop here.

Thank you very much for your attendance, and enjoy the summer break. Thank you. Bye bye.

Conference Operator: Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect

Paolo Bertrulcu, CEO, Nexi0: your

Conference Operator: telephone

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