company presentation company... · 2015 guidance (q1 results presentation) eur 170m (+6.2%) fy 2015...
Post on 22-Aug-2020
0 Views
Preview:
TRANSCRIPT
Company Presentation
Last update – 2015 FY Results
CERVED INFORMATION SOLUTIONS S.p.A.
Disclaimer
1
This presentation and any materials distributed in connection herewith (together, the “Presentation”) do not constitute or form a part of, and should not be construed as, an offer for sale or subscription of or solicitation of any offer to purchase or subscribe for any securities, and neither this Presentation nor anything contained herein shall form the basis of, or be relied upon in connection with, or act as an inducement to enter into, any contract or commitment whatsoever. The information contained in this Presentation has not been independently verified and no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness, reasonableness or correctness of the information or opinions contained herein. None of Cerved Information Solutions S.p.A., its subsidiaries or any of their respective employees, advisers, representatives or affiliates shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this Presentation. The information contained in this Presentation is provided as at the date of this Presentation and is subject to change without notice.
Statements made in this Presentation may include forward-looking statements. These statements may be identified by the fact that they use words such as “anticipate”, “estimate”, “should”, “expect”, “guidance”, “project”, “intend”, “plan”, “believe”, and/or other words and terms of similar meaning in connection with, among other things, any discussion of results of operations, financial condition, liquidity, prospects, growth, strategies or developments in the industry in which we operate. Such statements are based on management’s current intentions, expectations or beliefs and involve inherent risks, assumptions and uncertainties, including factors that could delay, divert or change any of them. Forward-looking statements contained in this Presentation regarding trends or current activities should not be taken as a representation that such trends or activities will continue in the future. Actual outcomes, results and other future events may differ materially from those expressed or implied by the statements contained herein. Such differences may adversely affect the outcome and financial effects of the plans and events described herein and may result from, among other things, changes in economic, business, competitive, technological, strategic or regulatory factors and other factors affecting the business and operations of the company. Neither Cerved Information Solutions S.p.A. nor any of its affiliates is under any obligation, and each such entity expressly disclaims any such obligation, to update, revise or amend any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on any such forward-looking statements, which speak only as of the date of this Presentation. It should be noted that past performance is not a guide to future performance. Please also note that interim results are not necessarily indicative of full-year results.
Table of Contents
2
Full Year 2015 Business Review 3
Overview 1
Investment Case 4
Full Year 2015 Results 2
Appendices 5
The Italian Leader in the Credit Information Market
3
2% 42%
290 (+3.6%)
Business Information
627 (+3.9%) 721 (+8.5%)
Cerved
Position and
Market Share in 2013
359 (-4.3%)
4.2% 42.7% 7.3%1)
Consumer 321
Corporates 305
€13.8m
4% of Group
(11.7% CAGR)
€142.6m
40% of Group
(+6.3% CAGR)
€75.0m
21% of Group
(+57.7% CAGR)
€124.5m
35% of Group
(-2.0% CAGR)
No. 9 No.1 No. 11) No.1
Market
2013 Data (€m)
(CAGR11-13)
Cerved
2015 Revenues1)
(CAGR11-15)
NPLs 502
Corporate receivables
219
Business Information
120
Rating & Analytics 39
Real Estate
97
Consumer Information
103
Credit Information Credit Management Marketing Solutions
Source: PwC 1) Preliminary figures 2) No. 1 player In the non-captive market, considering pro-forma revenues in 2013 which include Recus and Tarida
4
Consistent Growth and Cash Flow Generation
Consistent Growth EBITDA Growth High Cash Flows
Revenue (€m) EBITDA (€m) EBITDA – Capex (€m)
Consistent Revenue, EBITDA and Cash Flow growth
Note: 2011 and 2012 EBITDA adjusted for shareholder’s fees and 2011 adjusted to review accounting policy related to the database acquisition costs
113 119 125 132 139
2011 2012 2013 2014 2015
138 145 152 160 171
2011 2012 2013 2014 2015
267 291
313 331 353
2011 2012 2013 2014 2015
+6.7%/ 1.6%
+7.4% / +3.9%
% / % Total Growth % / Organic Growth %
+5.1% / +3.8%
+5.5%
+6.7%/ +5.2%
+5.2%
Proven Model, Bound for Growth
5
Mission-critical products and services through the cycle
Undisputed market leadership
Significant competitive advantages
High revenue visibility
Fundamental sector growth
Untapped potential within the Italian market
Cerved specific organic growth initiatives
M&A
Best-in-class EBITDA margins
Cash conversion
Attractive dividend payout
2 Growth
3 Cash flow
1 Resiliency
Our Growth Strategy
6
Credit Management - Grow AUM and keep focused on collection
Credit Information and Marketing Services - Continue to exploit the
underpenetrated corporate market
Exploit opportunities in adjacent markets
Credit Information - Consolidate position in financial institutions
Continue to invest in new product development and innovation
Add-on opportunities focused on the Italian market
Table of Contents
7
Full Year 2015 Results 2
Investment Case 4
Appendices 5
Overview 1
Full Year 2015 Business Review 3
8
Group Revenues
Revenue Bridge (FY’2014 – FY’2015) – (€m)
Revenues (€m) and Revenue growth (%)
290.6 313.5 331.3
353.5
2012 2013 2014 2015
331.3
353.5
2.5 (0.1)
21.7 (0.9) (1.0)
Revenues
2014
CI -
Financial Institutions
CI -
Corporates
Credit
Management
Marketing Solutions Other & Conso
clearing
Revenues
2015
Credit Information
+7.9% / +5.7%
+5.7% / +3.8%
% / % Total Growth % / Organic Growth %
+6.7% / 1.6%
9
Group EBITDA
EBITDA Bridge (FY’2014 – FY’2015) – (€m)
EBITDA (1) (€m) and EBITDA margin (%)
160.1
170.8
3.3
8.3 (0.9)
EBITDA
2014
Credit
Information
Credit
Management
Marketing
Solutions
EBITDA
2015
144.7 151.5 160.1 170.8
2012 2013 2014 2015
48.3% 49.8% 48.3%
(1) FY 2012 EBITDA is adjusted for Shareholder Fees;
+4.7% / +4.6%
+5.6/ +4.5%
% / % Total Growth % / Organic Growth %
+6.7% / +5.2%
48.3%
10
Group Divisional Performance
Credit Information Credit Management Marketing Solutions
127.4 126.3 122.0 124.5
128.8 138.2 142.7 142.6
256.232 264.5 264.7 267.1
2012 2013 2014 2015
Re
ve
nu
e
EB
ITD
A
136.8 139.3 142.1 145.4
2012 2013 2014 2015
25.0 36.6
53.3
75.0
2012 2013 2014 2015
4.4 7.6
11.2
19.5
2012 2013 2014 2015
9.9 12.8 14.7 13.8
2012 2013 2014 2015
3.5 4.7
6.8 5.9
2012 2013 2014 2015
35.6%
36.5%
45.9%
20.7%
21.0%
53.4% 52.7% 53.7%
(6.2%)
Fin. Inst.
Corp.
% YoY Growth %
11.8%
40.8% 44.2%
1.4% 0.9%
2.0%
17.6%
(12.6%)
18.8%
74.5% 64.2%
% EBITDA margin % % CAGR
42.7%
26.0% 54.4%
%
2.3%
€m 2012 2013 2014 2015
Revenues 290.6 313.5 331.3 353.5
% growth (YoY) 8.8% 7.9% 5.7% 6.7%
EBITDA 144.7 151.5 160.1 170.8
% Revenues 49.8% 48.3% 48.3% 48.3%
Depreciation & Amortization (16.5) (23.3) (25.1) (28.5)
EBITA 128.3 128.2 135.0 142.3
PPA Amortization (53.1) (39.4) (42.9) (45.8)
Non recurring income and expenses 2.5 (7.4) (4.5) (3.8)
EBIT 75.5 81.4 87.6 92.8
Financial income 0.9 0.8 1.1 1.1
Financial expenses - non recurring - - (10.1) (52.4)
Financial expenses (29.1) (59.6) (54.6) (43.2)
PBT 20.5 22.6 24.0 (1.7)
Income tax expenses (15.4) (14.7) (12.0) 5.3
Reported Net Income 5.1 8.0 12.0 3.6
Adjusted Net Income 62.6 43.0 55.0 68.5
of which: Minorities 0.8 1.1 1.4 2.5
11
Summary Profit and Loss
Summary Profit and Loss (€m)
119.5
151.5 145.3 139.8
(25.4) (30.1) (32.4) (30.0)
(82.5) (81.9) (73.3) (74.0)
11.7
40.8 40.4 37.8
2012 2013 2014 2015
Inventories Trade receivables Trade payables
Deferred revenues Net Working Capital
12
Net Working Capital
Net Working Capital (€m)
4.0% 13.0% 11.7% 10.7%
NWC as % of Revenues %
€m 2012 2013 2014 2015
EBITDA 144.7 151.5 160.1 170.8
Net Capex (25.7) (26.6) (28.2) (31.6)
EBITDA-Capex 119.0 125.0 131.9 139.1
as % of EBITDA 82% 82% 82% 81%
Cash change in Net Working
Capital(1)(6.1) (24.7) 8.2 3.0
Change in other assets /
liabilities / provisions(1.9) 7.3 (13.9) (6.0)
Operating Cash Flow 111.1 107.5 126.2 136.1
as % of EBITDA 77% 71% 79% 80%
Operating Cash Flow (€m)
Operating Cash Flow
13
(1) Cash change in Net Working Capital exludes non recurring items
€m 2013 2014 H1'15 2015
Bonds 780.0 530.0 530.0 530.0
Other financial Debt 1) 0.6 4.0 25.9 41.8
Accrued Interests 20.6 17.3 17.3 17.3
Gross Debt 801.1 551.3 573.2 589.1
Cash (50.3) (46.1) (14.3) (50.7)
Capitalized financing fees 2) (28.6) (17.6) (16.2) (1.5)
IFRS Net Debt 722.2 487.6 542.7 536.8
Net Debt/ LTM EBITDA 3) 4.8x 3.0x 3.3x 3.1x
Non-recurring impact of "Forward Start"
transaction- - - 37.3
Adjusted Net Debt 722.2 487.6 542.7 499.6
Adjusted Net Debt/ LTM EBITDA 4.8x 3.0x 3.3x 2.9x
Financial Indebtedness
14
Net Financial Indebtedness (€m)
(1) FY’15 includes 1m of Revolving Credit Facility,16m of Vendor Loan, and 24m of breakage costs related to the refinancing transaction; H1’15 includes 5m of Revolving Credit Facility and 16m of Vendor Loan
(2) Extraordinary write-off of €13.3m in FY’15 and €5.3m in 9M’15 related to the refinancing transaction
(3) LTM EBITDA pro-forma including Recus, RL Value and the Creval transaction for the last 12 months
2015 Guidance (Q1 Results Presentation)
EUR 170m (+6.2%) FY 2015
including Creval Partnership for 3 quarters
Leverage 3.0x EBITDA long-term target, save for non-recurring
or strategic transactions and quarterly fluctuations
Dividends
EUR 174m (+8.7%)
Organic Growth + EUR 4m (+2.5%) + EUR 7m (+4.5%)
EUR 160.1m FY 2014 Reported
EUR 163.2m FY 2014 Proforma Including Recus & RLValue
Maximize distribution of available cash, to the extent permitted by our financial condition and future investment opportunities, as per board’s programmatic resolution
15
EBITDA
Leverage & Dividends
16
Revenue Growth Corporate and Mktg Solutions behind target
EBITDA Growth In line with guidance
Net Profit In line with targets
Cash Flow In line with targets
Leverage Reduce to c. 3.0x by year-end
Refinancing New committed facilities in place
M&A Unlikely to close another deal in 2015
Guidance for 2015 EBITDA confirmed in range of €170-174m
Cerved’s performance YTD in line with most key objectives for 2015
2015 Guidance Update (Q3 Results Presentation)
17
Macro Highlights
Source: Bank of Italy
11.3% 12.4% 12.8% 11.7%
10.8%
8.6% 8.1%
6.6%
Key Economic Indicators
Cerved Proprietary
Data
Italian unemployment Italian GDP New lending
% of companies paying over 60 days late versus contractual
terms
Number of proceedings (seasonally
adjusted) and growth rates versus
same quarter of previous year
2015 GDP grew +0.8%
versus 2014, first yearly
GDP growth since 2011
Strong decline in
unemployment, and
healthy increase in
new bank lending
Despite being positive,
all macroeconomic
indicators remain well
below pre-crisis levels
Cerved proprietary
data also reflecting an
improved macro
Fewer late paying
companies and
bankruptcies reflect
the improved health of
SMEs in Italy
NPLs confirm lower
growth vs prior years
Growth rate compared to the
previous quarter
New lending volumes in € billions (quarterly)
Key highlights
Late paying companies Bankruptcies NPLs Key highlights
Unemployment as % of total working
population
Default rate on outstanding loans; Cerved estimates on
Bank of Italy data
Source: Osservatorio Cerved
50
100
150
200
2008
2009
2010
2011
2012
2013
2014
2015
5.8% 12.8% 8.6% -12.2%
Source: Osservatorio Cerved
3.0% 3.5% 3.7%
3.9%
Source: Osservatorio Cerved, Bank of Italy
Q4
-0,5%
Q4
0,0%
Q4
0,0%
Q4
0,1%
Source: ISTAT, OECD
2012
Q1 Q2 Q3 Q4
YoY -0.4%
YoY -1.7%
YoY -2.8%
Source: ISTAT
Q1 Q2 Q3 Q4
2012 2013
Q1 Q2 Q3 Q4
2014
Q1 Q2 Q3 Q4
-36%
2015
Q1 Q2 Q3
Q1 Q2 Q3 Q4
2012 2013
Q1 Q2 Q3 Q4
2014
Q1 Q2 Q3 Q4
2015
Q1 Q2 Q3 Q1 Q2 Q3 Q4
2012 2013
Q1 Q2 Q3 Q4
2014
Q1 Q2 Q3 Q4
2015
Q1 Q2 Q3
2013
Q1 Q2 Q3 Q4
2014
Q1 Q2 Q3 Q4
2015
Q1 Q2 Q3 Q4
YoY +0.8%
2012
Q1 Q2 Q3 Q4
2013
Q1 Q2 Q3 Q4
2014
Q1 Q2 Q3 Q4
2015
Q1 Q2 Q3 Q4
Table of Contents
18
Full Year 2015 Results 2
Full Year 2015 Business Review 3
Investment Case 4
Appendices 5
Overview 1
Operational and Strategic Update for 2015 and Key Actions for 2016
Business Review Topics
19
Business
Corporate
Credit Information – Corporate
Credit Information – Financial Institutions
Credit Management
Marketing Solutions
Governance
Mergers & Acquisitions
Investor Relations
Credit Information – Corporates
20
2015 represents a year of discontinuity, with a significant investment in the revamp of the sales network
Business
Corporate
4.0% 2.4%
5.9% 4.3%
Lost
Clients
Existing
Clients
New Clients Y-o-Y
Consumption
2015 negatively impacted by decline in lost points, despite positive trends regarding the
sale and consumption of prepaid points and services (+7.9% and +4.3%, respectively)
Revamp of sales force network well underway: completion expected by June 2016, with
full impacts expected by year-end 2016
2016 also expected to benefit from product innovation: recent launch of Cerved
Credibility, as well as a new platform for Corporate products and services
Consumption of Credit Information Points &
Services: 2015 vs 2014 1) Status Quo Sales Force Revamp
1) Consumption of points and services in 2015 compared to 2014 for credit information products by c. 20k corporate clients covered by the field sales network
Key
Initiatives
New Go-to-Market
Teleselling for Small Clients
Salesforce Reinforcement
New CRM
Churn Reduction Initiatives
finalised
ongoing ongoing
advanced advanced
Credit Information – Financial Institutions
21
Business
Corporate
2015 characterised by positive conditions with limited renewals and no impact from consolidation
Bank New Lending from 2008 (€bn) 1) CI Financial Institutions – Revenue Breakdown 2015
1) Source: Bank of Italy
682
572 517
488 463 401 395
451
(20%)
(15%)
(10%)
(5%)
0%
5%
10%
15%
20%
25%
2008 2009 2010 2011 2012 2013 2014 2015
Real Estate
Rating &
Analytics Business
Information
2015 Revenue growth of +2.0% exceeded initial guidance of -1.0% to +1.0%
Better than expected results due to a combination of few bank renewals, no impact yet
from bank consolidation, new bank lending returning to growth, and most importantly
strong results from the real estate appraisals segment
Popolari banks currently preparing themselves for consolidation, which is expected to
start to materialise in the latter part of 2016
Credit Management
22
Business
Corporate
Another record year for the Credit Management division with Sales and EBITDA up 40.8% and 74.5%, respectively
Revenues Breakdown 2015 Credit Management AuMs
Significant opportunities in 2016 offered by government reforms regarding bankruptcy
and foreclosure procedures, together with specific initiatives to reduce bank NPLs
Strong focus also on optimising the “small tickets” segment, integrating the operations of
Recus (utility and finance company clients) with Finservice (corporate clients)
Assets Under Management at EUR 12.5bn at YE 2015, reflecting an outflow of EUR 1.6bn
of old portfolios. The outflow does not have any impact on future Revenues
NPLs and Problematic
Credits
1.8
7.8
10.3
14.1
1.6
12.5
2012 2013 2014 FY'15
(ex.
outflows)
Outflows FY'15
Banks &
Investors
Utilities &
Financials Corporates
Legal
Services
Re-
marketing
Marketing Solutions
23
Business
Corporate
8.9 9.9
12.8
14.7 13.8
3.1 3.5
4.7
6.8 5.9
2011 2012 2013 2014 2015
Revenues Breakdown 2015 Revenues and EBITDA (€m)
2015 was a lacklustre year for the Marketing Solutions division, despite continuing product innovation
Despite the positive launch of the Marketing+ platform, 2015 Revenues and EBITDA
declined vs the prior year, due to commercial issues and revenue recognition phasing
2015 saw a solid increase in marketing platforms (eg. Marketing+) and database-
derived products, at the expense of projects on industry and competitor analysis
2016 to continue this trend, and also to focus on improving the commercial synergies
between the corporate and marketing solutions field sales forces
Database &
Marketing
Platforms
Ad-Hoc
Projects
Industrial
and
Competitor
Analysis
Mergers and Acquisitions
24
Corporate
Business
Continue to complement organic growth with acquisitions in core and adjacent markets in Italy
2015 deals were the Creval transaction (valued €21.7m) and a further stake in
SpazioDati (€1m capital increase to reach 43%)
2016 has already seen the acquisition of a further 11% stake (reaching 91%) in the
holding company of the Credit Management activities
Currently working on a rich pipeline of small, bolt-on transactions in all key business
areas in Italy
A few deals at a very advanced stage, with Closing expected in the short term
Recus SpA 81% 19.0m
RLValue Srl 100% 1.4m
Creval Partnership 100% 21.7m
SpazioDati Srl 43% 2.3m
M&A Since IPO in June 2014 Illustrative Targets
Company Stake % Investment
CI
BI
CM
Adj.
MS
Advanced Preliminary Status
Mo
re
Less
Eff
ort
M&A Effort and Status
2015 was a very busy year also considering CVC’s full exit via 3 ABBs, increasing Cerved’s
free float from 44% to 100% and significantly widening its institutional shareholder base
IR activity for 2016 focussed on further increasing analyst coverage (currently 11) and
attracting new investors, with the objective of increasing average daily volumes
In line with 2015 we have planned a rich schedule of conferences and roadshows,
together with the Investor Day on May 10th in London
Investor Relations
25
Corporate
Business
Marked effort to increase liquidity and share price, in line with Cerved’s status as public company
Tentative Agenda for 2016 Cerved Share Price evolution in 2015
Mar 23 Equity Conference (HSBC) Paris
May 10 Investor Day London
May 11 Business Services Conference (JPM) London
May 18 Italy Conference (DB) London
Jun 8 Italian Equity Conference (Kepler) Milan
Jun 22 CEO Conference (Mediobanca) Milan
Jun 28 European Business Services (GS) London
Sep 8 Equity Conference (HSBC) Frankfurt
Dec 6 Mid Cap Conference (Berenberg) Pennyhill
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
80%
90%
100%
110%
120%
130%
140%
150%
160%
AVG NOSH
(monthly, k)
CERVED FTSE Mid-Cap
Corporate Governance
AGM/EGM on 14 December 2015 aligned Cerved to international best practice in key areas
Corporate
Business
26
Appointment of the new Board of Directors
A new Board of Directors will be voted at the AGM to be held on 29 April 2016
Total board members to remain at 11, of which a maximum of 2 from minority slates
The incumbent board will propose its own slate, to be published 30 days pre-AGM
Authorisation to issue shares for acquisitions
Enabling resolution for the BoD to issue shares for a maximum of 10% of existing shares,
without pre-emption rights, in order to maintain leverage and dividend targets
Long-term Incentive Plan (LTIP)
Performance share plan, 3 year vesting, maximum dilution of 1.5% dilution up to 2021:
- 70% of target based on Adjusted Pre-Tax Profit/Share CAGR, vesting from 6.0%
- 30% of target based on TSR, vesting from median of FTSE Italy mid-cap index
Table of Contents
27
Full Year 2015 Results 2
Investment Case 4
Appendices 5
Overview 1
Full Year 2015 Business Review 3
Cerved is a Systemic, Mission-Critical Asset for Italy …
28
Mission-critical for the majority of corporates
At the core of the Italian economy supporting
c.€1.5trn credit positions
700
1,455
390
365
Sto
ck o
f
mo
nito
red
len
din
g
Ne
w le
nd
ing
Co
mm
erc
ial
cre
dit
Tota
l cre
dit
sup
po
rte
d b
y
Ce
rve
d
Credit positions supported by Cerved Information (€bn)
Monitoring
Covering the full spectrum of the credit value chain
Recovery
Underwriting
Origination
c.700 c.31.200 Credit Information client base
Financial insitutions
Corporates
Credit management
Credit Information
Marketing solutions
Credit management
Decision analytics and Monitoring
Credit limit sizing
29
…in a growing market with room for increased penetration
2% 42%
290 (+3.6%)
Business Information
627 (+3.9%) 721 (+8.5%)
Cerved
Position and
Market Share in 2013
359 (-4.3%)
4.2% 42.7% 7.3%1)
Consumer 321
Corporates 305
€13.8m
4% of Group
(11.7% CAGR)
€142.6m
40% of Group
(+6.3% CAGR)
€75.0m
21% of Group
(+57.7% CAGR)
€124.5m
35% of Group
(-2.0% CAGR)
No. 9 No.1 No. 11) No.1
Market
2013 Data (€m)
(CAGR11-13)
Cerved
2015 Revenues1)
(CAGR11-15)
NPLs 502
Corporate receivables
219
Business Information
120
Rating & Analytics 39
Real Estate
97
Consumer Information
103
Credit Information Credit Management Marketing Solutions
Source: PwC 1) Preliminary figures 2) No. 1 player In the non-captive market, considering pro-forma revenues in 2013 which include Recus and Tarida
30
Data sourcing Data processing Products Sales
Investment of c.€40m
p.a.
16mm companies
and 20mm company-
related individuals for
>40 years
Mix of proprietary,
unofficial and official
information making it
difficult to replicate
More than 450 FTEs
who process, analyse
and check the data
More than 200 FTEs in
the IT department:
almost all of the
products are online
Broadest product
range for corporates
and financial
institutions: c.30
families and c.180
individual products
More than 30 FTEs in
the marketing
department
National sales network
of approx. 350 FTEs
− More than 300 FTEs
for corporates
− Around 45 FTEs for
financial institutions
Business Information Value Chain based on Scale
Cerved revenue Breakdown 2014
31
RMS 2013 (1)
Cerved CAGR 11-14
Cerved CAGR 11-13
Market CAGR 11-13
Source: Company information, PwC (1) Relative Market Share: Cerved’s revenue divided by revenue of No. 2 market player
Credit
Information
1.6x
2.4%
3.6%
(1.0%)
€649m
Credit Information
80%
Market size and Cerved’s market share in Credit Information 2014
41% market share
Undisputed Leader in Italian Credit Information
Crif
Infocamere
Ribes
Assicom
Visura
REAG 4
Prometeia Wise
0%
10%
20%
30%
40%
50%
60%
0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 2.00
EB
ITD
A M
arg
in %
Relative Market Share in Credit Information (RMS)(1)
32 Sources: Company information, AIDA, PwC Estimates (1) RMS = Competitor revenue / Cerved’s revenue; except for Cerved’s RMS which is defined as Cerved’s revenue divided by the revenue of the No. 2 market player
Scale vs. profitability – Cerved vs. competitors 2013A
A bubble of this size represents €30 million in revenue
Cerved’s Market Share commands Best-In-Class Margins
29.7%
34.6%
35.1%
48.3%
33
EBITDA margin 2014A Operating cash flow margin 2014A(1)
Source: Company information for Cerved and comparables (1) Defined as (adj. EBITDA – Capex)/Revenue (2) LTM as of September 2014
26.5%
31.0%
27.0%
39.9%
(2) (2)
Compared to the Largest Publicly Listed Peers, Cerved’s Profitability is also Unmatched
Credit Information and Credit Management Markets
255 265 270 275 290
123 126 123 119 120
123 134 118 98
97
41 44
41 40
39
123 115
110 102
103
665 684
662 634
649
2009 2010 2011 2012 2013
34
Credit Information Market (€m)
(6,1)%
(1,0)%
(7,4)%
(1,0)%
2,6%
(0.6)%
Source: IMF, AIFI (Associazione Italiana Private Equity e Venture Capital), AIDA, Financial Reports, PwC Estimates
Consumer
Information
Banks
Rating &
Scoring Banks
Real Estate
Banks
Business
Information
Banks
Business
Information
Corporate 152 164 180 192
219
256 276
311 323
359
100
107
121
133
142
508
547
612
648
721
2009 2010 2011 2012 2013
+9.1%
10.1%
8.0%
8.1%
Bank
NPLs
Consumer
Finance
NPLs
Corporate
NPLs
CAGR
‘09-’13
CAGR
‘09-’13
Credit Management Market (€m)
Resilient Demand for Credit Information across Economic and Credit Cycles
35
Increasing need for credit checks
Increasing receivable volumes
Increasing new lending and stock of loans
Increasing economic activity
Higher scrutiny and monitoring
Increasing need for more frequent checks and credit information
Resiliency Growth
Negative macro
environment
Positive macro
environment
Increasing counterparty risk
Corporates Financial institutions Corporates Financial institutions
Resiliency
Cash flow
Growth
Increasing SME Credit Information penetration expected to continue
1,185
510 437 395 394
The SME Market represents Significant Untapped Potential for Credit Information
Large SME market
Thousands of SMEs (10-250 FTEs) 2013A
Long enforcement times
Average days to enforce a contract 2014A
34% 34% 35% 35% 37%
38% 40%
41% 43%
44%
08A 09A 10A 11A 12A 13E 14E 15E 16E 17E
(1) For companies with more than €1mm in revenue (2) For Italy, penetration represents the weighted average of: 25/35% penetration for ~170k small companies (10-49 FTEs); 60/70% penetration for ~20k medium companies (50-200 FTEs); 70/80% penetration for ~4k large companies (>200 FTEs)
Credit Information penetration 2012A (%) Credit Information penetration 2008A-17E(%)
36
Italian SMEs usage of Credit Information underpenetrated vs. UK
Resiliency
Cash flow
Growth
78%(1)
37%(2)
Source: World Bank Source: Annual Report of European SMEs 2014 – European Commission (data on 2013)
191 186 158
123
392
Source: Eurostat, Cerved Group, Interviews to industry experts Source: Eurostat, Cerved Group, Interviews to industry experts
0
50,000
100,000
150,000
200,000
250,000
20
04
2
00
5
20
06
2
00
7
20
08
2
00
9
20
10
2
01
1
20
12
2
01
3
20
14
2
01
5
20
16
2
01
7
20
18
2
01
9
20
20
37
12.5
10.3
7.8
1.8 1.3 0.5
2015 2014 2013 2012 2011 2010
Cerved NPLs
Captive
portfolio
purchased
prior to 2009
€0.8bn SPV corporate
/SME
€4.3bn on 3 SPVs
€1.9bn
consumer
finance
€0.9bn SPV
consumer
loan
Market Growth
Credit Management Growth in NPLs(1) Resiliency
Cash flow
Growth
(1)1) Excludes Finservice which operates on the collection of NPLs for corporates. (2)2) As of December 31st, 2015
€0.5bn
various banks
contracts
€2.1bn from
Creval
agreement
Cerved Growth
Pre-crisis level of €40-50bn
Current level of €197bn, expected to
decrease to €107bn by 2020, thanks to
positive impact of reforms and GACS
#1 Independent Player
Growth from i) NPL growth and ii)
increased outsourcing/NPLs disposals
acted by banks
Source: Company information
NPLs Evolution in Italy Cerved NPLs
Forecasts
Shorter lenghts of procedures
Inertial scenario (7.3 years)
Shorter lenghts of procedure + full effectiveness of
GACS system
€216 bn
€175 bn
€107 bn
Bad debt stock (€m)
Increasing NPL volumes
Low liquidity, low collections, higher fees
Decreasing NPL prices, outsourcing
Credit Management Model across the Economic Cycle
38
Negative economic cycle
Opportunistically intake massive portfolios
Maximize collections
Positive economic cycle
Increasing liquidity
Refinancing options for debt holders
Increasing collections
Resiliency
Cash flow
Growth
Illustrative impact of economic cycle
NPL stock
Collection rates
Time
Consolidation of core
markets
Deal Revenue
€28mm Dec 2003
€6mm Dec 2007
€67mm Dec 2008
€16mm Dec 2011
€10mm Mar 2013
n.m.
Start-up
€1mm Dec 2010
Data Services
Cerved M&A track record 2004-2015
2004
2005
2008
€14mm Mar 2012 Information Services
2012
2011
2013
2014
Illustrative M&A pipeline for 2016
Resiliency
Cash flow
Growth
Entry into adjacent
markets
M&A Track Record and Pipeline
€0.5 Dec 2013
€15.7mm Dec 2014
€8-9m in FY2015
39
CI
BI CM
Adj.
MS
Advanced Preliminary Status
Mo
re
Less
Effo
rt
M&A Effort and Status
2015
Illustrative Free Cash Flow
40
Resiliency
Cash flow
Growth
Illustrative Free Cash Flow Bridge excluding non-recurring items
178
83
32
16
5
43
Co
nse
nsu
s 2016
EB
ITD
A
Co
nse
nsu
s 2016
Ca
pe
x
Inte
rest
Exp
en
ses
NW
C a
nd
Oth
er
Ca
sh T
axe
s
@ 3
4%
*
Fre
e C
ash
Flo
w
* Estimated value for the long term using an overall 34% tax rate; cash taxes in 2016 expected to be lower due to non-recurring timing effects
Previously €39m
Table of Contents
41
Full Year 2015 Results 2
Appendices 5
Investment Case 4
Overview 1
Full Year 2015 Business Review 3
42
Basis for Financial Information
Please note that Cerved Information Solutions SpA (“CIS SpA”) was
incorporated on 14 March 2014 and holds a 100% stake in Cerved Group SpA
(“CG SpA”) since 28 March 2014
In order to provide complete financial information to reflect CIS SpA
consolidated business operations, the financial data referred to FY2014 and
FY2013 are represented via the following accounts’ aggregation respectively:
(i.) CG SpA from 1 January to 31 March 2014 and CIS SpA from 14 March to 31
December 2014, and (ii.) Cerved Holding SpA from 1 January to 27 February
2013 and CG SpA from 9 January to 31 December 2013
On a consolidated basis, there are minor differences between the accounts of
CIS SpA and CG SpA, mainly related to costs connected to CIS SpA’s status as
listed company, and costs incurred to carry out the IPO of CIS SpA (in 2014
results)
43
Group Revenues and EBITDA - Quarterly Analysis
Quarterly Analysis - Revenues (€m)
Quarterly Analysis - EBITDA(€m)
160.1 170.8
FY
2014
2015
38.1 41.3
33.1
47.6
39.4
45.0
35.7
50.7
Q1 Q2 Q3 Q4
+6.7% / +5.2%
+9.1%/ 7.4%
+3.6% / +1.1%
+7.7% / +5.9%
+6.4% / +6.0%
331.3
353.5
FY
2014
2015
79.3 84.7
71.5
95.8
83.0
94.6
78.3
97.6
Q1 Q2 Q3 Q4
Total Growth % / Organic Growth %
+11.6% / +4.6%
% / %
+6.7% / +1.6%
+4.7% / (0.7)% +9.5% /
+2.3%
+1.9% / +0.2%
44
Credit Information – Quarterly Analysis
66.4 69.2 57.9 71.3
264.7
66.3 69.7 59.1 72.1
267.2
Rev CI - Q1 Rev CI - Q2 Rev CI - Q3 Rev CI - Q4 Rev CI - FY
2014
2015
Credit Information – Financial Institutions – Rev (€m) Credit Information – Corporate – Rev (€m)
35.2 37.4 30.4 39.1
142.1
36.0 37.4 30.6 41.5
145.4
EBITDA - Q1 EBITDA - Q2 EBITDA - Q3 EBITDA - Q4 EBITDA - FY
2014
2015
Credit Information – Revenues (€m)
(0.1)% 2.1%
Credit Information – EBITDA (€m)
2.2% (0.2)%
0.8%
0.9%
2.3%
0.4% 6.2%
1.0%
30.3 31.5 28.6 31.6
122.0
31.1 31.6 29.5 32.3
124.5
Rev- Q1 Rev - Q2 Rev - Q3 Rev - Q4 Rev - FY
3.1%
2.0%
1.3% (2.4%) 0.2% 2.6% 1.2%
2.3% (0.1)%
(0.1)%
36.1 37.7 29.2 39.8
142.7
35.2 38.1 29.6 39.7
142.6
Rev- Q1 Rev - Q2 Rev - Q3 Rev - Q4 Rev - FY
45
Credit Mgmt and Marketing Solutions – Quarterly Analysis
1.0 1.2 0.9
3.6
6.8
1.0 1.4 0.9
2.6
5.9
EBITDA -
Q1
EBITDA -
Q2
EBITDA -
Q3
EBITDA -
Q4
EBITDA -
FY
2014
2015
1.8 2.6
1.8
5.0
11.2
2.4
6.3 4.2
6.6
19.5
EBITDA -
Q1
EBITDA -
Q2
EBITDA -
Q3
EBITDA -
Q4
EBITDA -
FY
2014
2015
Marketing Solutions – Revenues and EBITDA (€m)
10.3 12.7 11.2 19.2
53.3
14.1 21.9
17.2 21.7
75.0
Rev - Q1 Rev - Q2 Rev - Q3 Rev - Q4 Rev - FY
Credit Management – Revenues and EBITDA (€m)
2.8 3.2 2.8
6.0
14.7
2.9 3.4 2.8
4.7
13.8
Rev - Q1 Rev - Q2 Rev - Q3 Rev - Q4 Rev - FY
37.3%
73.3%
54.5%
34.2%
4.8% 6.0%
3.4%
142.0%
74.5%
12.2%
4.2%
131.7%
40.8%
(22.2%)
(6.2%)
(28.0%)
(12.6%)
(2.2%)
13.1% 33.1%
Profit and Loss
46
Source: Company Information, 2013 as “Added data”, 2014 as “Aggregated data”; for further details refer to CIS S.p.A. Quarterly and Annual Reports
€m 2012 2013 2014 2015
Total Revenues (including other income) 290,6 313,7 331,6 353,7
Cost of raw material and other materials (0,7) (2,8) (7,0) (8,3)
Cost of Serv ices (76,3) (77,6) (76,3) (78,9)
Personnel costs (67,2) (67,2) (73,7) (81,5)
Other operating costs (7,4) (8,1) (8,2) (8,5)
Impairment of receivables and other provisions (7,1) (6,4) (6,3) (5,7)
EBITDA 144,7 151,5 160,1 170,8
Depreciation & amortization (16,4) (23,3) (25,1) (28,5)
EBITA 128,2 128,2 135,0 142,3
PPA Amortization (53,1) (39,4) (42,9) (45,8)
Non-recurring income and expenses (7,4) (4,5) (3,8)
EBIT 75,5 81,4 87,6 92,8
PBT 20,5 22,6 24,0 (1,7)
Income tax expenses (15,4) (14,7) (12,0) 5,3
Reported Net Income 5,1 8,0 12,0 3,6
Adjusted Net Income 62,6 43,0 55,0 68,5
of which: Minorities 0,8 1,1 1,4 2,5
47
Balance Sheet
Source: Company Information, 2013 as “Added data”, 2014 as “Aggregated data”; for further details refer to CIS S.p.A. Quarterly and Annual Reports (1) Non cash item (2) Net of capitalized financing fees
€m 2012 2013 2014 2015
Intangible assets 248,7 501,1 472,4 459,7
Goodwill 275,8 708,6 718,8 718,8
Tangible assets 16,5 16,6 17,3 16,4
Financial assets 15,0 14,9 14,9 8,3
Fixed assets 556,1 1.241,3 1.223,4 1.203,1
Inventories 0,1 1,3 0,7 2,0
Trade receivables 119,5 151,5 145,3 139,8
Trade payables (25,4) (30,1) (32,4) (30,0)
Deferred revenues (82,5) (83,1) (73,3) (74,0)
Net working capital 11,6 39,6 40,4 37,8
Other receivables 15,4 5,8 7,1 7,6
Other payables (53,8) (20,4) (26,1) (32,2)
Net corporate income tax items (3,0) (27,2) (18,8) (1,0)
Employees Leaving Indemnity (9,6) (10,9) (13,1) (12,5)
Provisions (10,6) (15,0) (11,1) (8,5)
Deferred taxes (1) (60,4) (119,8) (109,1) (88,7)
Net Invested Capital 445,7 1.093,3 1.092,7 1.105,6
IFRS Net Debt (2) 280,6 722,2 487,6 536,8
Group Equity 165,1 371,1 605,1 568,8
Total Sources 445,7 1.093,3 1.092,7 1.105,6
48
Cash Flow
Source: Company Information, 2013 as “Added data”, 2014 as “Aggregated data”; for further details refer to CIS S.p.A. Quarterly and Annual Reports
€m 2012 2013 2014 2015
EBITDA 144,7 151,5 160,1 170,8
Net Capex (25,7) (26,6) (28,2) (31,6)
EBITDA-Capex 119,0 125,0 131,9 139,1
as % of EBITDA 82% 82% 82% 81%
Cash change in Net Working Capital (6,1) (24,7) 8,2 3,0
Change in other assets / liabilities (1,9) 7,3 (13,9) (6,0)
Operating Cash Flow 111,1 107,5 126,2 136,1
Interests paid (6,9) (29,1) (51,7) (40,3)
Cash taxes (21,3) (18,4) (24,1) (40,2)
Non recurring items (3,9) 0,1 (3,4) (3,2)
Cash Flow (before debt and equity movements) 76,8 60,1 46,9 52,3
Net Div idends (13,1) (0,1) 1,0 (40,1)
Acquisitions / deferred payments / earnout (3,4) (509,4) (20,9) (23,5)
IPO Capital Increase (net of IPO costs) - - 220,2 -
Other - - (0,1) (1,1)
Debt drawdown / (repayment) (48,0) 482,8 (254,5) -
Net Cash Flow of the Period 12,3 33,5 (7,5) (12,3)
Adjusted Net Income Bridge
49
Source: Company Information, 2013 as “Added data”, 2014 as “Aggregated data”; for further details refer to CIS S.p.A. Quarterly and Annual Reports Note: PPA Amortization refers to business aggregation processes
€m 2012 2013 2014 2015
Reported Net Income 5,1 8,0 12,0 3,6
Non recurring income and expenses (2,5) 7,4 4,5 3,8
Shareholders Fee 2,2 - -
Capitalized financing fees 3,2 4,1 3,4 2,9
Earn-out 26,8 - -
PPA Amortization 53,1 39,4 42,9 45,8
Financial charges non-recurring - - 10,1 52,4
IRS termination - - 1,0 -
Fiscal Impact of above components (25,3) (15,8) (18,9) (28,4)
Adjustments 57,5 35,1 43,0 76,4
Impact of IRES change treatment - - - (11,5)
Adjusted Net Income 62,6 43,0 55,0 68,5
Cerved Information Solutions S.p.A. Via San Vigilio, 1 - 20142 Milano
Tel. +39 02 77541 Fax +39 02 76020458
company.cerved.com
top related