Nexi S.p.A. Earnings Call Highlights Growth Amid Challenges

Nexi S.p.A. ((IT:NEXI)) has held its Q4 earnings call. Read on for the main highlights of the call.

The recent earnings call for Nexi S.p.A. conveyed a generally positive sentiment, highlighting strong cash generation and shareholder returns. Despite this optimism, the company acknowledged challenges such as the impact of bank mergers and difficult macroeconomic conditions in the Nordics.

Strong Cash Generation

Nexi reported impressive cash generation, closing the year with EUR 717 million in excess cash, marking a 19% increase from the previous year. The company anticipates this figure to exceed EUR 800 million by 2025, underscoring its robust financial health and operational efficiency.

Investment Grade Rating Achievement

A significant highlight for Nexi was its upgrade to investment grade by Fitch Ratings in December 2024. This milestone reflects the company’s solid financial position and enhances its credibility in the financial markets.

Revenue and EBITDA Growth

Nexi achieved a 5.1% growth in revenue, with Merchant Solutions seeing a 6.3% increase. EBITDA also rose by 7.1%, accompanied by a 101 basis points expansion in EBITDA margin, demonstrating effective cost management and operational efficiency.

Shareholder Returns

The company completed a EUR 500 million share buyback in 2024 and plans to return EUR 600 million to shareholders in 2025 through dividends and additional share buybacks. This strategy highlights Nexi’s commitment to delivering value to its shareholders.

Bank M&A Impact

The concentration of bank mergers, particularly involving Banco BPM, is expected to impact Nexi’s revenue growth in 2025. This presents a challenge as the company navigates the evolving banking landscape.

Challenges in the Nordics

Nexi faced weaker macroeconomic conditions in the Nordics, coupled with phasing effects on partner commissions, which impacted growth. This region remains a focal point for addressing external economic challenges.

Migration of Large Client

In Italy, the migration of a large client began affecting Merchant Solutions in the fourth quarter, posing a challenge for Nexi as it adapts to this transition.

Forward-Looking Guidance

Looking ahead, Nexi provided guidance for 2025, forecasting low to mid-single-digit revenue growth despite a softer macroeconomic environment. The company aims to expand its EBITDA margin by at least 50 basis points through strong cost controls and plans to distribute EUR 600 million to shareholders, a 20% increase from the previous year.

In summary, Nexi’s earnings call reflected a positive outlook with strong financial performance and shareholder returns. However, challenges such as bank M&A impacts and macroeconomic conditions in the Nordics remain areas of concern. The company’s forward-looking guidance indicates a focus on maintaining growth and profitability through strategic initiatives.