NEXI S.P.A.

Good afternoon. This is the Coral School Conference Operator. Welcome and thank you for joining the NEXI Full Year 2020 Preliminary Results Conference Call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Paolo Bertoluzzo, CEO of Nexi. Please go ahead, sir.

Good afternoon or good morning for those of you connecting from the U.S. This is Paolo. It's very nice to find you again in the new year. Welcome to our full year results, premium results call for 2020. As usual, I'm here with Bernardo Mingroni, our CFO, and Stefania Mantegazza, who's leading investor relations, and a few other members of of our team. As we've done in the recent past, we will be covering our results, but before I do that, we will also give you an update on what we see happening on the back of the evolution of the COVID-19 pandemic. And obviously at the end of the presentation, we'll have time as usual for your questions. Now, before we jump into the details of the content and so on and so forth, let me start with page three, where we try to basically highlight the three key messages that we believe are important from today's session. The first message has to do with our 2020 performance. We believe we had a strong overall performance despite COVID, and I would add despite the second wave of COVID. This performance is also better than the anticipated ambition that I want to remember for everybody that was given in July. So before we could even foresee the second wave of the pandemic, despite that we had done a bit better than what we had communicated as our ambition for 2020. EBITDA closed up 2.5% at 601 million euros. BIDA minus CAPEX closed at 466 up double digit plus 11.2%. Revenues were at 1,044,000,000 euros minus 2.8% in the year with a positive Q3 and a basically flat Q4 over last year, minus 0.7. And overall, we had a very resilient operating performance with good performance traction despite COVID on our key propositions. The second key message is that despite the complexity of managing the COVID situation and obviously the pressure on volumes and therefore on top line, we continue to see visible signals of possible digital payment acceleration. This is very clear when we observe customer habits changes towards digital payments throughout the pandemic, and we try to highlight a couple of factoids here. We see at the same time, and this is probably even more important from a strategic point of view, a growing interest from merchants and consumers for more advanced digital and omnichannel solutions, and we'll comment on this. And finally, we've seen good action on government cashless initiatives, in particular on cashback debt that was started in that Christmas, I would say, version of at some point at the beginning of December and will continue for 21 and probably 22. Third key message, as you well know, in the latter part of the year, we have accelerated our transformation from an Italian paytech leader into a European paytech leader. At the beginning of the year, we have basically closed the acquisition, completed the acquisition of the Intesa merchant book and integration is executed since Q3, and our activities right now are well integrated and progressing well with the new partner. Second, as you know, we signed the NexiNet merger agreement, and we have already filed with European antitrust to move as fast as possible towards closing. And over the last few hours, we also signed the NexiSEA, merger and we are overall on track with our overall plan. If you bring all of this together, we actually see a very positive outlook in the coming years. Clearly, 2021 performance will continue to depend in a very relevant way on the dynamics from COVID. We will comment our outlook for the new year at the end of the presentation, but it's very clear that is a positive mid-long-term outlook as society and economy gradually recover from COVID-19. Now, let me jump into a more detailed summary of today's session, page four. And let me start with the COVID-19 update. Transaction volumes for the year as a combination of acquiring and issuing were down 11% versus 2019. In the last quarter, they were down minus 8.6% due to the effect of the second wave of COVID. The second wave of COVID, however, did have a much more limited impact versus the first wave of COVID. To cut a long story short, while the first wave of COVID was at around minus 50% impact on overall volume, this second wave decreased. seen at peak around minus 20% on volumes, thanks to the fact that compared to the first wave, the measures that have been implemented by the government in Italy did have two qualities compared to the first one. Obviously, they were much better planned, given the fact that the first wave came as an absolutely new thing. First of all, they were more selective in nature. For example, industrial production and business-to-business deals were open, and also the broader retail activities were only selectively closed. And second, the government took an approach that was a region by region segmented approach based on the local situation with COVID. However, now from basically mid-January, we see a rapid volume recovery, quite similar to the one that we've seen in May, June, July at the back of the first wave. Now, after the easing of the restriction and we see a continued double-digit growth in basic consumption, a very fast recovery in discretionary spending, if you strip out the foreign cards, the cards that are used by inbound tourists and visitors that obviously remain very weak, and you focus on the Italian cards only, the Italian cards only, are actually already back into visible growth overall, and even more so if you just look at basic consumption and discretionary consumptions. Basically, over the last few days and week, we've seen as a total volume dynamic that is marginally negative, minus 2% year over year already. We saw throughout the year a strong e-commerce acceleration, net obviously of the tourism sector, And travel-related sectors, we've seen basically this acceleration fluctuating around 35%, 37%, 40%. It was actually 42% in the last quarter. Overall e-commerce performance was overall, including travel-related sectors, less impacted than physical commerce. The total for the year was minus 2%. And finally, as I said before, we continue to see signals of acceleration from cash to digital transactions, and we're seeing a good traction for government cashless initiatives, especially on cashback. We can comment more on Q&A. I anticipate that we will not be providing detailed data on customer behaviors, not because we don't observe them. As you can imagine, we observe them with a lot of rigor. but because they feel unstable and we really don't want to misguide the market on data that are not yet reliable. As you probably read in the media, the cashback initiative did have an overall very good traction. We basically had about 10% of Italian cards that did sign up into this initiative in December, beginning of January. We continue to see this interest growing. The government has launched a only a couple of weeks ago, a new initiative that was planned already that is the lottery initiative. It's a bit more complex in terms of customer experience. We probably take a bit more time in terms of gaining traction, but in general, we see a very high level of interest from consumers and from merchants on these initiatives, and I would say nice changes of behaviors and good elasticity. Now, coming to our results on page five, As I've anticipated, EBITDA was up 2.5 for the year. It was actually up 8.3% in the quarter, in the last quarter. EBITDA minus capex overall was up double digit plus 11.2%. Revenues were down minus 2.8 in the full year and basically flat year over year. We will comment the business updates of the three business units later on, so let me jump over it. We had a strong performance on cost that obviously supported the growth of EBITDA despite COVID. Costs were down 9% year over year, basically due to our continued effort on efficiency and the 100 million plus cash cost containment plan that we did overachieve. And last but not least, when it comes to our financial results, the net financial debt over EBITDA multiple was down 3.5 times, which is really remarkable if you net from these numbers the effect of the acquisition of the Intesa book, a billion that we funded with debt. Actually, our leverage would be already 2.5 times EBITDA. Only in April 2018, when we did take the company public and we worked around 3.5, we set very clearly that we were seeing a long-term target for our leverage at 2 to 2.5 times EBITDA. We are already at 2.5 despite if you strip out the Intesa book investment that you are all aware of. Now, let me also give you an update on where we are on the CNS transaction, as I said. We are progressing as planned. We basically signed this morning the binding documentation on the SEER transaction. As far as the NET transaction is concerned, we have filed already the cross-border merger plan with the European antitrust. We continue to see closing happening in second quarter this year for NET and in third quarter this year for SEER. Let me also give you the highlights of the results that SIA and NETS have published over the last few hours. SIA closed the year with an EBITDA up 3%, so similar to us, with a very strong performance in the last quarter of the year, plus 13%. Revenues were also growing, plus 2% in the year, and a nice 7% growth in the last quarter of this year, thanks to a resilient business model and a few projects and customer wins outside of Italy as well as partially in Italy. Net results were also pretty much in line with our expectations on EBITDA despite the second wave of COVID. On an underlying basis, EBITDA was up 4% in the year, actually up 21.5% in the fourth quarter, which is very remarkable and is happening also on the back of very positive cost measures that the company is undertaking. Revenues were, again, on an underlying basis, marginally down in the year at minus 1.2%, with a minus 1.9 year-over-year in the fourth quarter. Again, please always keep in mind the fact that the second wave basically came out in the third quarter. and therefore is after when we announced basically our deal. And differently from Italy, the second wave has impacted more than the first wave. The geographies where NET is present, in particular Germany with the lockdowns that you are aware of, and the Nordics as well, which were less affected in the first wave. So a little bit of the opposite dynamic that we have seen there. in Italy. Now, let me jump into page six and give you the usual overview of what are the volume dynamics that we are observing. As in the past, we are presenting you on page six the combination of our issuing volumes and acquiring volumes. You see, again, the fast recovery from the first wave. The first wave was minus 50%, basically back to marginal growth in August. And then as the second wave of COVID appeared, I would say outside of Italy before Italy itself, you did start to see a new slowdown. And here you see that that slowdown had peaked basically around mid-late November at around minus 20, to then recover at the beginning of December when basically no reopenings were allowed there. in the preparation of the Christmas season, then went down again basically during the Christmas holidays because Italy decided to have a hard shutdown in the holiday period to avoid the acceleration of the pandemic. And then, given that the results and the evolution of the pandemic was positive, there was a reopening after that, and you see that rapidly the volumes came back up. to much better levels and again closer to last year results. Following page, page 7, gives you the split that we've talked about in the past as well in between Italian cars, so Italian consumers, and international inbound travelers. This is obviously very, very important because we continuously track the standalone Italian customers' behaviors because that's where we expect to see the acceleration from cash to digital. And here you see, and that's basically the light blue line, and here you see that while the international traveler's contribution remains negative, very negative, I would say it's minus 70, minus 80% still, you see that instead the Italian customers already at the beginning of February, late January, were back to positive growth, and you will see the details later. in a moment. So, very similar behaviors to what we've observed in the summer, even if the international travelers are not back to Italy yet, are not actually traveling anywhere around the world yet. Page 8, I will spend a few more seconds on page 8, because page 8 is a very rich page in terms of information, but it's a very important page as well. Here, we provide you with the overview of what has happened across the three macro sector in merchant services. Again, we separate between basic consumptions, groceries, medical, retail, utility services, so activities that remain broadly open throughout, 35% of our overall volumes. Second category, what we call discretionary consumption, clothing, household, other type of retail, and this is obviously very affected by the reopening and closing of And last but not least, the high-impact consumption sector that is the smallest one with a 31% weight, even if it's actually the largest one when it comes to e-commerce. On the table on the right, you see the evolution of this. Starting from the total, you basically find the numbers that we saw before, and now they are presented in quarters, and you see the dynamics of the last few months as well. As I said before, we closed the year minus 12% in terms of overall volumes, minus 13% on physical, minus 1% on e-commerce. It's important to underline the fact that throughout the year, basic consumption has been growing 16%, so faster than what it was growing in the past. It has been running at a high double-digit level basically throughout the year. I would also underline the fact that in basic consumption and discretionary consumption sectors, e-commerce has been growing around 36%, 39%, so really, really fast, while obviously it's been suffering in the high-impact driver-related type of sectors. I want to focus your attention on the last column, which is literally the last week rolling. The last week rolling is particularly important because it is the first week after a long period of time where The Italian regions are basically all in what is called the yellow zone, the yellow category, which is basically meaning that most of the retail is open with certain limitations. Restaurants and bars can stay open up until 6 o'clock in the evening. You can, again, travel online. across regions, but still you have certain measures of lockdown implemented. What you see here is that as a total, volumes were down minus 2%, so very close to last year values. But I think this is even more interesting to look at sector by sector. Basic consumption was up 24%. It was 26 for Italian cards, so what you see in the circles are the Italian customers only, so 24% for total, 26 for Italian customers. The discretionary consumption is particularly telling, up 3% on a total and up double digits for Italian customers only, while obviously the impact consumption is still negative on a total basis, minus 45%, even if you see an improvement compared to the recent months. with Italians being at minus 35%. Overall, again, Italians are at plus 6%. On the following page, you see basically these dynamics represented graphically. And again, I want to draw your attention to the fact that the dynamics that we're seeing now after mid-January are very similar to the recovery, the faster recovery we've seen from May to June after the first wave. The real difference, if you wish, is that the recovery of the underlying travel category is actually a bit slower, while the basic consumption is running quite visibly faster than what it was before during the rest of the pandemic and much faster than what it was before the pandemic. Now, before we move to results, let me close on page 10 with a couple of observations on what we see in terms of customer behaviors. Here, as always, we try to separate the effect of the pandemic from the underlying customer behaviors here. And basically, we are providing you two snapshots. The first one is on the left. This is basically the growth of the grocery segment here. on Italian cards so if you basically focus on this segment where basically the retail has been open with a lot of limitations in terms of access to stores and all of that but has been broadly speaking open throughout and here you focus on Italian cards you see that throughout fourth quarter the growth has been 21% full year 22% January was 25% so overall a strong trend growth much higher than what it was before the pandemic, although this sector was already a nicely growing sector. So a visible acceleration when you don't have the impact of COVID. Second data point that I think is also very remarkable. Here on the bottom on the right, you see the evolution of Italy from the Christmas period. It was already mid-January. It was still a partial red situation with a remarkable focus on Lombardy, that is a large chunk of the Italian economy. It was red together with Sicily. And you see that now, basically, it is, broadly speaking, yellow with still some orange areas. And on the top part, top right part here, you see what is the performance that we have been observing a couple of weeks back when it was still a mix, so it was coming from mid-late January across the different zones. And again, here we look at Italian cards only. So red zone was minus 4%. If you remove year-on-year performance, if you remove the effect of the high-impact consumption, which is basically, broadly speaking, closed across all the zones, basically, red zone was actually up 5%. Orange zone is up plus 3% if you remove the high-impact consumption sector, which was above last year by about 20%, and the yellow zone 2%. which overall was up 17%, was actually going up 29% without the effect of the high-impact consumption sectors. Obviously, here there is a little bit of rebound. When you reopen stores, people have the tendency to to buy more than normal simply because they could not buy before. But we've seen that these numbers then tend to stick at a much higher level than before. So this is the overall pitch on volumes. Again, to cut a long story short, second wave obviously impacting our overall volumes and the fourth line. The fast recovery being observed over the last three, four weeks. And again, visible signals of digital payments acceleration, I would say, wherever you look at neutralizing the effect of COVID. Now, let me jump into our financial results, and let me jump to page 12. Overall, as anticipated with a strong financial performance, EBITDA grew in the quarter 8.3%. with a total for the year basically 2.5% up. EBITDA margin went from 19.55% to full year 2020, 58%, also on the back of important cost measures that we took also on this cost of postponing certain investments and also on the back of the slowdown of certain activities that were actually not effective in the context of COVID. Overall revenues were marginally down minus 2.8% with the quarter basically almost flat year over year at 290 million euros. Let me just now jump into the business unit by business unit focus. Let me start with merchant services and solutions. Obviously, the key drivers throughout the years have been the continued development of our propositions for both, for actually SME, LACA, and SME. e-commerce we continue to make progress to be able to address the broader merchant needs but also more and more vertical needs in particular I would say in LACA and e-commerce. We saw not just the volume dynamics as I just described but also more and more demand for advanced omnichannel solutions also from SMEs and obviously we've seen a good traction with the merchants of the cashless initiatives. Going into a more granular update by segment on SMEs, we saw a strong growth of the post-customer base. So despite COVID, despite a lot of stores being closed, we saw a growth for the overall base of about 4%, also driven by the vertical industry propositions. We see this actually continuing. Second, We saw a significant acceleration on the channel mobility solutions. I think we spoke in the past about pay-by-link offer that is actually allowing merchants without an e-commerce presence to be able to sell and accept payments from remote by sending SMS, emails, WhatsApps, whatever they want to their customers. Actually, we had a good progress on smart post sales as well. We now launched also the proposition on InPesa Booker. We have completely redesigned the mobile post proposition. We launched the new ones at the end of last year, and it's seeing good traction. It's fully integrated with our digital properties already. Our merchant app that was already quite successful is now above 55% penetration, and we're starting to use it for upselling or pro-selling of higher-value products and services. And in parallel to all this, we've been working for a year now in terms of adding next to the banks in a bank friendly way additional channels to make sure that we can be with the customers whatever they decide to shop and here clearly the rules of the game are online retail and particular electronics and technology leading retails software developers partnerships ISVs and ECR distribution partnerships and we believe that will be an important contribution as we go forward So this is it in terms of SME sector moving to the other two sectors, large merchants, omnichannel. We basically saw good volume resilience thanks to the leading position on large scale food retailers. We were obviously affected in the travel sector even if we are not exposed to risk. because it remains with the banks, but we obviously saw on large retail and large food categories strong progress. Basically, we are continuing to develop our omnichannel proposition and it's becoming more and more differentiated, basically combining the best-in-class capabilities that you can find also with other international players with actually very specific, country-specific capabilities needs and requirements such as for example implementing cashback capabilities, implementing local schema digital products and so on and so forth. We've seen an acceleration also in projects in terms of omnichannel. We saw a growing pipeline of customer demand in a list of emerging verticals that are understanding that omnichannel acceptance is very critical for them just to mentioned one insurance agent's networks or pharma and new retail chains. We also saw a strong pipeline on transport. Clearly, transport has been on our topic for Italy for a while, and now we have more and more projects ongoing with local administrations. And we said in the past that we had prepared a specialist sales support program team by vertical sector for larger merchants. We are now doing the same also for mid-corporates that we believe in Italy are an important opportunity given the structure of our economy. As far as e-commerce is concerned, we saw strong sales results across all segments. Gateway activation, we have been up 50% year over year and actually four times if you include pay-by-link that is technically like a gateway activation, but putting that aside, we It has been up 50%. We have enlarged our strategic partnership footprint with content management providers and marketplaces like Italian Lines, Jordan, and a few others. We already had many, and we simply continue to reach them. We had new wins in invisible payments, good traction on public administration segment where we've been successful. the largest acquirer with a 1% year-end growth in Pagopia, and we are now applying a strong focus in managing the impacts of the evolution of the strong customer authentication regulation in the Italian market, both at the merchant and the consumer end as well. Now, coming to results for the segment page 15, In the quarter, revenues were down about 1% for the full year, minus 3.4%. This was achieved despite a decrease on volumes that is consistent with the numbers and the graphs that have been shown you before, minus around minus 10% to 15%, depending if you look at managed transactions or value of managed transactions. Basically, the ratings have been supported by a long list of measures that have been put in place and the evolution of the mix of the volumes. Let me underline the fact that for the year, we've been more successful in selling technology products and technology solutions across the various segments SMEs lack, but also e-commerce. I think e-commerce is probably the most visible example where Basically, we had, despite the total volumes did marginally decline, actually our revenues in the segment did go up thanks to the sales of more technology-advanced solutions. Now, moving on page 16 and moving on the second largest business unit, cards and digital payments. Here, the key drivers as well being the development of our proposition towards more and more advanced products and services. The increased demand from customers and banks of more advanced solutions and not only products but also processes, for example, digital onboarding and remote selling. And last but not least, we also saw a good traction of government cashless initiatives as well. Moving into more specific updates, On the CART side, we saw a growth of the CART base. I would say in particular on the debit and prepaid segments that are more oriented to the mass market and for the everyday spending and e-commerce. We saw an accelerated interest on international debit with now over 50 banks selling the product. We are now launching a new version, a further premium version of international debit because we believe there is room for segmentation into these mass market products. At the same time, we continue to support the evolution of national debit, implementing all the digital capabilities that are becoming available. And actually, we continue to see a growing interest and a growing pipeline for our business-to-business virtual cards, working capital optimization product, while obviously the broader business and commercial card segment has been affected in terms of volume by the COVID restrictions and very much reduced level of demand. business travel and activity more in general. When it comes to digital and VASA, we actually continue to see a growth of contractual transactions, the penetration of the number jumped from 38% to 45%, basically from pre-lockdown to December. Here in this space, it's important to notice that basically in the first half of this year, we'll be rolling out the upgrade of the contactless limit from 25 to 50. What does it mean? Today, if you transact contactless below 25, you can avoid to basically put your PIN or sign the receipt. Over the next few months, this limit will go from 25 to 50, as by the way has happened already in a few other countries. We also saw a step up in mobile data payments. Overall volumes were up 140% year-over-year. It's still small, but I think also here the needs of the customers are evolving and we saw a good traction. And all our analysis suggests that this is an enabler of further digital payments, cash-to-digital payments conversion. Basically, we did continue to promote our loyalty program and all the other value-added services we have around it with further penetration. And we actually did a lot of effort to support the government initiative in particular, cashback, allowing our customers to have easy access from our apps and banks' apps as well, and basically a role in the program as fast as possible, basically with one click, just to give another point, if the country average is about 10%. registration on the cards where we manage the customer experience and more directly tarred licensing cards, that penetration has been above 15%. Last but not least, on YAP, even if we reduce the level of push, commercial push, in the year we saw in the last quarter an increase of almost 100% year-over-year in terms of person-to-business transactions. Moving to page 17, here you see the performance of of the business unit, plus 2.4% on revenues in the quarter, supported by many of the initiatives that I've just listed, despite actually transactions have been going down single digit, mid-single digit, I would say, throughout the year, and were a bit negative also in the fourth quarter on the back of the COVID second wave. Third and last division accounting for about 10% of our total revenues, digital banking solutions. Again, it's similar key drivers here. The evolution of our offer becoming more and more digital, but also the increased interest from the banks and from third parties for self-remote and open banking solutions. The year was affected not that much by volumes but actually by the fact that a lot of these projects depend on the willingness and the possibility for the banks to drive the execution and some of the activities have been delayed or actually go around at a lower level. key business updates here again in the self-banking space we basically complete the rollout of our new front-end platform for ATMs we continue to see a growing interest actually a good traction on advanced ATMs that are more valuable for us plus 5% growth year over year while the overall stock as banks rationalize their distribution networks has gone down 2% and here again we continue to drive evolution for example now we have personalized CRM on our ATMs if the bank wants to implement it. Second, the important area, digital corporate banking, again, also here, we continue to innovate on the product. The nice thing is that despite all the challenges of COVID here, we saw a growth in this toll base for the product, plus 2%. This was an important year, 2020, also for the business-to-business and corporate payments. We did continue to evolve on instant payments, and actually we now have a strong commercial pipeline on corporate payments, basically from two angles. Number one is actually very related to merchant services as well. We are launching a new pay-by-account product for very large tickets, for very large tickets based on open banking, where basically the merchant services enables the customer on large tickets to pay directly from his own bank account, basically having direct access to the banking of the bank through PSD2-enabled solutions in our gateway, as well as we saw growing traction for payment as a service for corporate and payment providers more in general. We've also renewed and extended our strategic partnership with Depo Bank that is now being acquired by Bank of Pharma Factoring, which is very important, is very strategic because it is allowing us to offer our digital payments technology-based services bundled with treasury supplement banking services, providing especially to the medium and small-sized banks a bundle of payment and banking payment services at the same time. Last but not least, we continue to see a good crash on open banking, where we've seen an explosion of volumes on the CBI global, though a bit less than what we expected because of COVID and also because of Brexit, given the fact that some of the third parties, the many third parties that are registered to the platform are actually UK-based and still trying to understand how to manage the implications of Brexit on their business. And last but not least, here we continue to sign up world-class companies world-class fintechs on our next year open platform and partnership program like Miniga, Experian, and we see more and more interest from the banks as well. Page 19, the results for the business units overall, the revenues went down about 3% year-over-year with higher decrease in the last quarter of this year. We're talking about a couple of million euros here. It is basically important to go back to what I said before. This is basically driven by the fact that certain projects were postponed and at the same time we had a lower level of activities on this topic. I'll give you an example. ATM interventions and technical assistance, so lower levels given the type of behaviors we're seeing today. in the country in the year. Let me now hand it over to Bernardo that will complete the overview of the results and I will come back tomorrow.

We'll give Paolo a chance to catch us after a long introductory session on how I think hopefully you have appreciated how strong the performance was in terms of revenues and the resilience of our business models. But it's important also to have a look at how we were able to protect our P&L and our cash flow in terms of the cost containment. Overall, for the year, we reduced costs by 45 million euros. That's a 9% reduction driven by the cost containment program, where we exceeded our 100 million target. The continued focus we have on our overall efficiency and the benefits we're getting from the implementation of our IT strategy. As you see, the fourth quarter had an acceleration in cost reduction compared to the average for the year. We're down 11.5%. This is due I'd say primarily through seasonality and the fact that the cost-cutting program was announced in May, but it took full speed in the second half of the year. We have a reduction in staff costs. This was driven by the variable component of compensation, which was tied to performance targets linked to EBITDA, which we clearly didn't reach compared to our budget, which was set at the end of 2019 and reduced the bonus pool significantly. for some of us, and reduction travel expenses, the benefits of smart working and therefore lower costs related to overtime payments and fuel consumption and meal vouchers, etc. This is accompanied by a double-digit reduction in admin costs. These include clearly the benefit of lower volumes driving lower processing costs, but also the cost-cutting program that we mentioned earlier. I think it's important to note also, this is particularly the case when we look back to concerns that we had and a lot of you had walking into the COVID environment back in the first quarter of this year when the cost of credit was a major concern. Indeed, we closed the year pretty much in line with what we had last year for both issuing and acquiring. In total, we had 6.3 million of credit-related losses. This is basically flat year on year compared to 2019 on the same accounts. Moving on to slide 21, just a summary with regards to the cost containment, the cash flow protection plan we put in place. This was really about, as I said, protecting our cash flow, our cash position, not really structurally improving the P&L. What we did was cut everything which we could cut, which was variable or discretionary, which wouldn't hurt. future growth in terms of our IT strategy or our business, but it was about reducing, well, what automatically fell in terms of processing costs with lower volumes, but also we froze some of the hiring or pushed them out into the second half of the year when we had greater visibility in COVID, consulting, et cetera, et cetera. Overall, we overachieved compared to our target. We'd set ourselves 100 million euros of cash containment. We exceeded that by approximately 5 million euros. Part of this fed into the P&L part of it was just cash flow CapEx therefore balance sheet part of it was under EBITDA but it helped outperform I would say what had been our ambition with regards to the EBITDA we'd set ourselves back during the course of the summer. Slide 22 moves on to CapEx as you can see we have a reduction of 20% in CapEx 235 million euros Ordinary CapEx is approximately 10% of revenues, as you would expect. The transformation CapEx, I mean, we kept on investing in what is core for future growth. What we delayed were initiatives which were primarily tied to our client business, which was probably more heavily impacted than it was than for us. And therefore, we moved some of those expenses out into 2021. Some of it was avoidance, and I'll speak to that in a second, of CapEx, which would have been a duplication of CapEx, which we will fund through the synergies or effectively the mergers with SIA, and we spoke of at the time of the announcement of SIA. We can see that on slide 23, where we show the graph which summarizes the evolution of our IT strategy and the transformation CapEx spend. Back in the June results, at the end of July, we had approximately 120 million euros of IT strategy or transformation capex spend left. We are now 65% complete. We would have had 103 million euros left, so approximately 17 million left. We would have had 103 million of transformation capex to be completed by 2023. And since announcing SIA, we have effectively crystallized the reduction of approximately 40 million euros of this 103 million euros. Therefore, we will save approximately two-thirds of what we announced at the time of the SIA transaction, the 65 million one-off CAPEX savings. 40 million, we've already defined where they're going to come from, and therefore we can reduce the next transformation CAPEX spent for the next few years by 40 million euros, so reducing it to 63 million euros. The remaining CAPEX savings, so between the $40 million we're saving in NEXE and the $65 million target we gave you, will be savings that SIA will have in their CAPEX spend. Just to exemplify it, we were planning to build our own issuing processing platform. We will no longer do that because we will adopt the SIA platform. Similarly, SIA was going to work on their core acquiring platform. We have a new state-of-the-art core acquiring platform, which is ready to go, and therefore there will be saving CAPEX related to that The overall impact of COVID is being to flatten this, what used to look like a curve is flattened out because of us pushing out some of the CapEx we're going to incur in 2020 out to 2021. So you see a slight pickup next year in transformation CapEx and overall CapEx. But overall, the quantum is reduced by the savings I just mentioned. Slide 24 shows that also below EBITDA, we continue to reduce transformation costs. They've been halved compared to where they were in 2019, and I remember that 2019 was down more than 60% compared to 2018. Essentially, half of this transformation is now related to YAP. The other half is equally split between some pure transformation costs. I'll mention, for instance, some penalty payments we made to get out of certain contracts, including rental contracts. for our monthly payment services subsidiary where we've closed their headquarters and relocated them here to the Nexi headquarters. So there's some penalties associated with that, associated with the exit of certain long-term contracts and the maintenance of our laptops or our desktops, etc. And the other is just, Sandra, I would say, consulting expenses associated with the ongoing and almost finalized transformation here at Nexi. On the right-hand side, we show a chart which takes us from the transformation cost to everything which is below EBITDA. And this includes essentially two big buckets, which are M&A fees related to the NETS and the SIA transaction, which are clearly one-off. And in the 23.4 million bucket, we have half of this is the non-cash LTI component of deferred compensation. The other half is related to COVID costs. sanitation of head offices, buying masks and vaccination of the flu, the COVID, unfortunately, with the other flu, etc. We also have 17 million euros of costs which flow through our P&L, but are actually met by Mercury UK, so they have a zero impact on EXI, but need to be accounting purposes booked into our P&L, and this is a legacy of the ipo scheme which was triggered with the ipo back in 2019. slide 25 shows the bridge from ebitda to normalize net profit um we have a normalized net profit which is substantially i'd say in line with uh with uh last year slightly down at 245.8 million euros um took out from last year uh the capital gain on the sale of oz you would have a slightly better performance this year compared to last year But in general, in line with last year, which is not surprising given that EBITDA is roughly in line, slightly higher than last year, but roughly in line with last year. Page 26 is a strong, I'd say, testament to the strength of our balance sheet and our ability to convert EBITDA into cash, 80% compared to 77% in 2019. This is before interest and taxes. After interest and taxes, we have 280 million normalized free cash flow. We will be upstreaming around about 350 million euros of cash from the subsidiaries to service debt at the parent company level, which is what you see from this page now, normalized free cash flow. Add back the interest expense, which is borne at the next C-level, and you get the cash which gets upstreamed from the payments subsidiaries. Slide 27 is a summary of the evolution of our net financial indebtedness. We continue to be leveraged. What we have shown here is what the trajectory would have been excluding the acquisition of Intesa, which closed in June. So we took on board additional 1 billion euros of debt. Had we not done that, we would land at the end of 2020, notwithstanding COVID, at two and a half times leverage, which is in line with the guidance we gave at IPO in terms of our midterm target, which was expected for 2021. So we were a year early in reaching this leveraged target. Clearly, it did happen, and that's a great deal for us, but that increases leverage in the short term. We're still within what we had highlighted at IPO to be our comfort range in terms of leverage. So we closed the year three and a half times, which is the $2.1 billion of net financial debt compared to the $600 million EBITDA. So Paolo, now I can hand the floor back to you for guidance.