Milan-based payment technology firm Nexi announced it would increase profits more than markets expected over the next three years and generate around 2.8 billion euros ($2.7 billion) in excess cash.
Unveiling a strategic growth plan that was well-received by the stock market, the firm said in a Tuesday (Sept. 27) webcast that it could use the additional cash for mergers and acquisitions if opportunities arose, return it to shareholders through dividends and buybacks or use it to cut debt.
Having not traded above 8.60 euros at all on Monday, Nexi shares hit a high of 9.07 euros during the Tuesday webcast.
Nexi’s leadership made the case that the company had experienced a positive effect of inflation on revenues without any erosion of profit margins.
As seen in a presentation that accompanied the webcast, Nexi has forecast average annual revenue growth of 9% between 2021 and 2025, to around 4.2 billion euros ($4.03 billion), with a 14% annual rise in earnings before interest, taxes, depreciation and amortization (EBITDA) over the same period.
Nexi predicted sustained growth across all the geographies in which it operates. The largest share of this will come from Italy, where Nexi currently generates over half of its business. However, the firm also expects profits in the “DACH & Poland” and the “Nordics & Baltics” country groupings to each contribute around 0.5% per year of the 9% total growth expected by 2025.
Earlier this month, the European Central Bank (ECB) revealed that it had selected Nexi as one of five partners that will be involved in a “prototyping exercise” as part of the two-year investigation phase of the digital euro project, which is exploring the possibility of the ECB issuing a central bank digital currency (CBDC).
Read more: Amazon, Nexi, Worldline, CaixaBank, EPI Join Digital Euro Project
Since its initial public offering (IPO) in 2019, Nexi has acquired its domestic peer SIA and the Danish group Nets, making it one of the largest European payments groups.
Nexi Group CEO Paolo Bertoluzzo said in the webcast that the firm’s acquisition targets included buying merchant acquiring services in countries where it is already present as well as new European markets where the penetration of electronic payments is still low and banks are behind in selling off their merchant acquiring units.
As Reuters reported last week, Spanish bank Sabadell is said to have received bids from Nexi as well as France’s Worldline and the U.S. firm Fiserv for its payments arm, with a deal valued at up to 400 million euros ($383.62 million).
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