The Leading PayTech Redefining Payments in Italy September 2019 1 - PowerPoint PPT Presentation

The Leading PayTech Redefining Payments in Italy September 2019 1

Ita Italy: Lar Large an and underpenetrated mar arket with ith uniq ique str structural ch characteris istics € 851bn 3.7 .7m #4 #4 La Largest ec econ onomy 2018 2018 Largest SM La SME in Europe (1,3) in Cons Co nsumer po popu pula latio ion in n pend (1) ope (2) spe Europ Eur One e of of th the e most under erpenetrated 26% 26% card Italy ly vs 45% % Wes estern Eur Europe in Europe (4) payments markets in penetration (1) card pa payment pen + ~ 10% + 10% Str trong and resilie ient ope (4) Italy ly vs. ~6 ~6% % for or Wes estern Eur Europ secu ecular gr growth card pa payments tr transaction valu alue GR (1) 15 15-18 CA CAGR  SME-domin inated d and nd main mainly ly ph physic ical l com ommerce mar market  Unde Unique stru tructural nderdevelop oped and nd fas ast t gr grow owin ing e-com ommerce mar market (6.5 6.5% pe penetr tratio ion (5) ) characteristics ch  Fragmented and ing (6) ) nd ba bank k led d di distr trib ibutio ion (93 93% of f acquir irin  Cou ountr try y di digi gitaliz lizatio tion cor ore for or na natio tional l agenda Note: Selected countries include Western European countries and exclude Turkey and countries with data based on modelled assumptions made by Euromonitor International. Total Consumer Spending is defined as the sum of Card Payment Transactions (Excl Commercial), Cash Transactions, Other Paper Payment Transactions and Electronic Direct/ACH Transactions. This tracks retail purchases, purchases of services, utility payments, rent payments, etc. Excluded transactions include peer-to-peer payments, taxes, fines, loan interest charges, and investments (including real estate). Card Payment Penetration is defined as Card Payment Transactions (Excl Commercial) divided by Total Consumer Spending. Consumer Card Payments is defined as Card Payment Transactions (Excl Commercial). (1) Euromonitor International Consumer Finance 2019 Edition. (2) Eurostat 2015. (3) Based on Total Consumer Spending. (4) Refers to consumer card payments market. (5) 2018 online share of total retail consumption. E-commerce penetration calculated as 2 the ratio between online spending and total spending (online and physical). Online spending includes purchases of products and services, excluding digital-only contents. Total spending is calculated on those categories of products that are sold online but that are also available offline (i.e. excluding cigarettes, gaming, betting etc.). (6) Management estimates.

Ne Nexi: i: The le lead adin ing Pay ayTech with ith fu full ll co coverage of of th the pay ayment eco cosystem % of Group Pro-Forma 2018 Revenues 48% 48% 39% 39% 13% 13% Mer erchant Ser Services s & Solu Solutions a Cards an Car and Dig Digital Payments Di Digital l Ban Banking Solu Solutions s One ne-stop op so solut lution n pro provide der for or mer ercha hants Com Leading the Lead omprehe hensi he evolu sive po olution towards portfolio, lead leading ds com g towards ompl plete e s Driving Dr ng ad adop option on of of ad advan vanced ed ba bank nking g of all of all cat ategories s an and d siz size com omplete dig dig digital alisa digit sation italisa on of sation of of pa paym of pa yments paym yments solut so lutions ns an and d de devel veloping ng Open pen Ban anking Bus usines iness s Act Activ ivitie ies Self Self Ba Banki nking SME SME solut solutio ions Lar Large merchants Consum Consumer Ca Cards ds Commercia Com ial l Ca Cards Ins nstant Payments omni ni-channel Mer erchant Ser Services s Mer erchant Ser Services s Mer erchant Ser Services s PSD2 PSD 2 & Dig igit ital al Cor Corporate e-Com Commerce & Data-enable led & Solu Solutio ions & Solu Solutio ions Payment App Apps & Solu Solutio ions Mo Mobile bile Payments Ope pen n Ba Banki nking Ba Bank nking ing Invis isib ible le Payments prod pr oducts 936m 936m 13.4 .4k ~420k ~4 3.2 .2bn ~8 ~890k € 249bn 41m 41m € 197bn 2.4 .4bn Sc Scale ale (1) 1) Number of ATMs Corporate Number of Number of Merchants Value of Payment Cards Value of Clearing managed Banking Transactions served Transactions Managed Transactions Transactions Transactions Workstations Sh Share are of of ~70% ~70 ~90% (3) ~90 ~60% ~60 16-70% 16 70% 3) Served Ser ved Mark arket (2) 2) Clien lients s Ser Served ved Mer erchant Ser Services s & & Sol Solutio ions 150 15 0 Ban anks ~30 30m Card ardho holders >800 >8 00k SM SMEs Es Source: Company information. Note: leading Italian PayTech in terms of revenues. (1) 2018 data. (2) Merchant Acquiring and Card Issuing data refer to International Schemes only 2018; Digital Banking solutions shares are based on 2018 data (excl. Clearing 3 based on 2017). (3) Spending Flows through Nexi. Market share calculated as a ratio of Nexi's Net Issuing + Acquiring volumes on Total Market Acquiring volumes, estimated allocating proportionally Other Issuers’ cards v olumes among Nexi’s clients and Other Merchants. Data refer to International Schemes only (VISA and MC) for 2018.

Nexi: Ne i: The le lead adin ing Pay ayTech re redefin inin ing pay ayments in in Ita Italy Europe’s most attractive payments market with strong secular growth drivers 1 Es Established mar arket leader r at t sc scale with ext xtensive pa payments ec ecosystem coverage 2 3 Long term erm, ext xtensive an and valu lue-oriented par partnership ips wit ith It Itali lian ba banks 4 Superior pr products dr driv iving mult ltiple growth op opportunit itie ies Leading technology capabil ilities dr driv iving innovation an and Next xt Generation 5 Pla latform de deployment 6 Str tron ong lea leadership ip tea eam with ith pr proven tr trac ack rec ecord acr across al all l val alue cr creatio ion le levers Attractive fin inancial profile combining profitable growth, resilience, operating le leverage 7 and strong cash flo low generation 4

Significantly underpenetrated dig Si igit ital l pay ayments market with ith str strong an and resi re silie lient gro rowth, broadly in independent fro from th the economic cyc cycle 1 Gr Growt wth of of Itali alian car ard pa payments valu alues ou outp tperfor ormin ing ion (% by value) (1) 2018 Car Card pa payment pen penetratio Italia ian tot otal l con onsumer spe pendin ing g and and no nomi minal l GDP GDP (1,2) CAGR CAGR 2015 ~3x ~3 2015-2018 2015 2018 2009-2018 2009 2018 Index as of 100 7.2% 9.7% 2x 2x 69% 180 63% 62% 62% Car ard Paym yments ts 160 58% 58% 52% ons (3) Tran ansacti tion 45% 49% 49% 140 42% 42% Nominal Nom l GDP (2) 26% 1.7% 2.1% 120 21% 21% 1.0% 1.6% Tot otal Con onsumer 100 Spe pendin ing 80 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 W. Europe Card Card Payments 9.7% 9. 7% 5. 5.6% 6% 3. 3.9% 9% 5.9% 5. 9% 6.2% 6. 2% Payment 15% 15% 15% 15% 15% 15% 16% 16% 17% 17% 19% 19% 21% 21% 23% 23% 24% 24% 26% 26% CAGR 15-18 Penetration (1) by Value (3)(4) Note: Selected countries include Western European countries and exclude Turkey and countries with data based on modelled assumptions made by Euromonitor International. Total Consumer Spending is defined as the sum of Card Payment Transactions (Excl Commercial), Cash Transactions, Other Paper Payment Transactions and Electronic Direct/ACH Transactions. This tracks retail purchases, purchases of services, utility payments, rent payments, etc. Excluded transactions include peer-to-peer payments, taxes, fines, loan interest charges, and investments (including real estate). Card Payment Penetration is defined as Card Payment Transactions (Excl Commercial) divided by Total Consumer Spending. Consumer Card Payments is defined as Card Payment Transactions (Excl Commercial). (1) Euromonitor International Consumer Finance 2019 Edition. (2) Economist Intelligence Unit. (3) Refers to consumer card payments market. (4) Consumer card payments CAGR 15-18 by value for Western Europe total and Nordics based on fixed 5 2018 euro exchange rates and for all other countries based on local currency.

Exte tensive pay ayments eco cosystem co coverage exte tendin ing to to dig igit ital l an and te technology so solu lutions 2 Coverin ing Tradit itional l …Relevant Adjacent …and Extended Payment Card Payments Rails… Digital Services… Solutions So Advanced POS SME Merchant Merchant Instant Self Banking Solutions Software Acceptance Processing Payments E- Commerce & Invisible Payments Co-issuing Card Issuer Digital B2B & (no credit risk) Processing Corporate Banking e-invoicing Payment Mobile Payments Apps POS terminal Omni PSD2 Gateway & Antifraud, disputes Engagement lifecycle Data-Enabled and chargebacks Acceptance Open Banking Platforms management Products … … … 6