Nexi, that’s what’s (not) right
Not only technical problems after last Friday's blackout of electronic payments with ATM cards and international circuits for Nexi. Even the state of debt and the collapse of the stock on the stock market which began last July …
What's up with Nexi?
We are not referring only to the blocking of electronic payments throughout Italy on Friday morning for ATMs and POS that pass through the circuits managed by Nexi. The postal police are working with Nexi technicians to trace the causes of the technical problems that created the malfunctions. From the first investigations, no traces of cyber attacks emerged: the experts would have found a technical failure due to some IBM problems, which lasted about forty minutes.
What worries shareholders and investors is the collapse of the share of the Italian electronic payments giant, which began almost a year ago.
Since July 2021, Nexi's stock has begun to decline from € 19 to the current € 9.
“Nexi is suffering from a double tilt. Together with that of the ATMs, which went out of use last Friday, the deep red of the stock market prices has weighed on the Pay Tech giant for some time. The fault is due to a net financial debt which has risen to 5.2 billion at the end of 2021 and the report cards of the rating agencies ”, reports Fabio Pavesi in the daily newspaper Verità & Affari .
Yet the group (Nexi + Sia + Nets ) closed the balance of the year positively. Nexi achieved revenues of € 2.268 billion (+ 10%) in 2021, with an ebitda of € 1.094 billion, up 12.1%, according to the preliminary consolidated results approved on February 10 by the board of directors. But the 2022 guidance (growth between 7 and 9%) had disappointed the market.i The day following the disclosure of the accounts, the stock closed with a drop of 4.96%.
All the details.
CHAOS ATM
On Friday morning, users and operators suffered problems with electronic payments with ATM cards and international circuits, such as Visa and Mastercard. Reports concerning cards linked to Unicredit, Poste Italiane, Bnl, Fineco and Intesa Sanpaolo, as also confirmed by the Downdetector service.
The lawsuit derives from technical problems occurring on the infrastructure of Nexi, the main electronic payment manager in Italy, and linked to a disservice by Ibm, one of the paytech suppliers. According to reports from the company, the problems were temporary, lasting about half an hour – between 11.45 and 12.15. Furthermore, the inefficiencies affected only some areas, slowing down transactions.
Meanwhile, the company said it is investigating the reasons behind the slowdowns with IBM.
THE COMMENT OF UMBERTO RAPETTO
But Nexi's statement perplexes experts.
“The Nexi company has announced that the services are operational again . Someone would be inclined to say “good” to technicians who have simply done their job and remedied something that should never / could have happened ”, commented Umberto Rapetto, director of Infosec.news . "Surely those who" resurrected " the dramatically collapsed system have the merit of having avoided the civil revolution, but the episode certainly cannot be archived with the classic" solved! " with which the technological failures that occur every day in the hi-tech Third World we are honored to be part of and for whose primacy we try every day to provide a significant testimony of inefficiency are buried in order not to be evicted from the elite of primitive nations "he added Rapet.
IT IS NOT ACCOUNT PROBLEM
But to hit the Nexi group beyond the blackout on Friday, also the dizzying fall of the stock in Piazza Affari in the last eight months.
As Pavesi underlines, already at Sole 24 Or and now the signature of the daily newspaper directed by Franco Bechis, “The two events are obviously not related to each other, but the coincidence sounds mocking. Last Friday while ATMs throughout Italy were black out, the price of the Nexi share stopped at € 9.12, just above the placement price of 3 years ago. It is far, and far, from the highs of 19 euros reached in the summer of 2021. A violent sboom, in some respects incomprehensible, in the eyes of shareholders who were thinking of easy earnings by focusing on one of the protagonists of the thriving electronic payments market ".
Yet it shouldn't be a question of accounts. In 2021, the company recorded revenues of 2.27 billion, up from just over 2 billion in 2020. Consolidated Ebitda amounted to 1,094.5 million in 2021, up 12.1% year on year. Nexi's 2021 results are in line with consensus, but what disappointed the market was the company's 2022 guidance, which according to experts predicts a slightly more conservative revenue estimate than imagined by the market.
SHOPPING PERIOD
Furthermore, just in the last year Nexi started the expansion abroad by acquiring the Danish Nets, and then merging at the end of 2021 with Sia, the technological infrastructure company for the banking market that was owned by Cdp.
"The merger, which follows the one with Nets completed on 1 July, will allow Nexi to consolidate itself as the leading Italian paytech at a European level, a company with around 2.9 billion in revenues and 1.5 billion Ebitda on an aggregate basis. – form as of December 31, 2020 including fully operational synergies ", put in writing the group led by the managing director Paolo Bertoluzzo, former head of Nexi before the merger.
Without forgetting that Nexi also made an offer to buy Bper's merchant acquiring division. Just today Bper Banca announced that it had granted Nexi an extension of the exclusive negotiation period as part of the potential revision of some existing commercial agreements.
PURCHASES AT THE EXPENSE OF A DEBT …
However, Pavesi again stresses that “in the face of such reassuring prospects, one should have expected a reaction on the stock market. Which hasn't arrived. A nice mystery it seems. In reality there is very little inscrutable in the coldness of the market. There should be growth, but at the expense of heavy debt. Yes, because to conduct the purchasing campaign the group, listed on the stock exchange in April 2019, was heavily in debt ".
WORRY ABOUT DEBT
In fact, "The net financial debt at the end of 2021 rose to 5.2 billion in the pre-acquisitions year" highlights Verità & Affari . “And this obviously risks weighing much, much more than the promises of revenue growth. True, the margin remains high, but the financial leverage passes from a more than physiological level to a guard level of about 3.6 times the margins that the company will produce in 2022. In the end, Nexi took the long step, but to do so it is due to resort to debt ”concluded Pavesi.
All that remains is to wait for the assembly on the financial statements and the renewal of the board called on May 5 to get more details from the Nexi management.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/nexi/ on Tue, 19 Apr 2022 11:10:31 +0000.