Italy’s Nexi aims to generate 2.8 billion euros for M&A, buybacks in 2023-25

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Stock Markets 1 hour ago (Sep 27, 2022 04:15AM ET)

Italy © Reuters. FILE PHOTO: The logo of Italian payments group Nexi is pictured inside their headquarters in Milan, Italy, March 28, 2019. REUTERS/Alessandro Garofalo/

By Valentina Za and Gianluca Semeraro

MILAN (Reuters) -Italy’s Nexi (BIT:) expects to generate around 2.8 billion euros ($2.7 billion) in excess cash in 2023-2025, which it can use for mergers and acquisitions or to return to shareholders, Europe’s biggest payments group by volume said on Tuesday.

Under a new strategic plan, Milan-based Nexi forecast average annual revenue growth of 9% between 2021 and 2025, to around 4.2 billion euros, with a 14% annual rise in core profit over the same period.

“Targets are above consensus and imply a solid growth profile for both the top and bottom line, coupled with strong deleveraging,” Equita analyst Gianmarco Bonacina said.

Nexi’s ambition to grow normalised earnings per share by 20% per year through 2025 compares with a 14% market forecast, he added.

Steered to a 2019 public listing by its private equity owners, Nexi became a top European payments group rivalling France’s Worldline through the acquisition of domestic peer SIA and Danish group Nets.

“The European payments market is complex and fragmented, and we love it,” CEO Paolo Bertoluzzo said.

Shares in Nexi, which have fallen below their IPO price of 9 euros as the sector suffers from recession fears and high inflation, were up 6.8% to 8.99 euros at 0740 GMT.

Bonacina said Nexi’s targets were similar to those set by Worldline last year, adding the 20% discount at which Nexi shares traded versus Worldline was unwarranted.

Nexi trades at 14 times its 2023 earnings while Worldline trades at 17 times.

($1 = 1.0378 euros)

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