Company Presentation - Cerved Company Company... · Company Presentation Last update – 2015 9M...
Transcript of Company Presentation - Cerved Company Company... · Company Presentation Last update – 2015 9M...
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
First Nine-Months 2015 Business Review 3
Overview 1
Investment Case 4
First Nine-Months 2015 Results 2
Appendices 5
Source: PwC 1) No. 1 player In the non-captive market, considering pro-forma revenues in 2013 which include Recus and Tarida
2% 42%
Corporates
290 (+3.6%)
Business Information
627 (+3.9%)
721 (+8.5%)
Ce
rve
d
Po
sitio
n a
nd
Ma
rke
t Sh
are
in
20
13
359 (-4.3%)
4.2% 42.7% 7.3%1)
Financial Institutions
Consumer 321
Corporates 305
€14.7m
4% of Group
(+18.4% CAGR)
€142.7m
43% of Group
(+8.5% CAGR)
€53.3m
16% of Group
(+63.7% CAGR)
€122.0m
37% of Group
(-3.3% CAGR)
No. 9 No.1 No. 11) No.1
Ma
rke
t
20
13 D
ata
(€
m)
(CA
GR
11
-13
)
Ce
rve
d
20
14
Re
ve
nu
es
(CA
GR
1
1-1
4)
NPLs 502
Corporate receivables
219
The Italian Leader in the Credit Information Market
Credit Information Credit Management Marketing Solutions
Business Information
120
Rating & Analytics 39
Real Estate
97
Consumer Information
103
3
4
113 119 125 132
92 98
2011 2012 2013 2014 9M'14 9M'15
Consistent Growth and Cash Flow Generation
Consistent Growth EBITDA Growth High Cash Flows
Revenue (€m) EBITDA (€m) EBITDA – Capex (€m)
138 145 152 160
112 120
2011 2012 2013 2014 9M'14 9M'15
267 291
313 331
236 256
2011 2012 2013 2014 9M'14 9M'15
+8.6%/ 2.2%
+7.4% / +3.9%
% / % Total Growth % / Organic Growth %
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
+5.1% / +3.8%
+5.7%
+6.8%/ +4.8% +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
2 Growth
3 Cash flow
1 Resiliency
Our Growth Strategy
6
Credit Information - Consolidate position in financial institutions
Credit Information and Marketing Services - Continue to exploit the
underpenetrated corporate market
Exploit opportunities in adjacent markets
Credit Management - Grow AUM and keep focused on collection
Continue to invest in new product development and innovation
Add-on opportunities focused on the Italian market
Table of Contents
7
First Nine-Months 2015 Results 2
Investment Case 4
Appendices 5
Overview 1
First Nine-Months 2015 Business Review 3
8
Group Revenues
290.6 313.5 331.3
235.5 255.9
2012 2013 2014 9M'14 9M'15
Revenue Bridge (9M’2014 – 9M’2015) – (€m)
235.5
255.9
1.7 (0.0)
19.2 0.4 (1.0)
Revenues
9M'2014
CI -
Financial Institutions
CI -
Corporates
Credit
Management
Marketing Solutions Other & Conso
clearing
Revenues
9M'2015
Credit Information
+7.9% / +5.7%
+5.7% / +3.8%
% / % Total Growth % / Organic Growth %
Revenues (€m) and Revenue growth (%)
+8.6% / 2.2%
9
112.4
120.1
0.8
6.7 0.2
EBITDA
9M'2014
Credit
Information
Credit
Management
Marketing
Solutions
EBITDA
9M'2015
Group EBITDA
EBITDA Bridge (9M’2014 – 9M’2015) – (€m)
EBITDA (1) (€m) and EBITDA margin (%)
144.7 151.5 160.1
112.4 120.1
2012 2013 2014 9M'14 9M'15
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 %
+6.8% / +4.8%
47.7% 46.9%
10
Group Divisional Performance
Credit Information Credit Management Marketing Solutions
127.4 126.3 122.0 90.5 92.2
128.8 138.2 142.7
102.9 102.9
256.2 264.5 264.7
193.4 195.1
2012 2013 2014 9M'14 9M'15
Re
ve
nu
e
EB
ITD
A
136.8 139.3 142.1
103.1 103.9
2012 2013 2014 9M'14 9M'15
25.0 36.6
53.3
34.1
53.3
2012 2013 2014 9M'14 9M'15
4.4 7.6
11.2
6.2
12.9
2012 2013 2014 9M'14 9M'15
9.9 12.8 14.7
8.8 9.2
2012 2013 2014 9M'14 9M'15
3.5 4.7
6.8
3.1 3.3
2012 2013 2014 9M'14 9M'15
35.6%
36.5%
45.9% 20.7%
21.0% 53.4% 52.7% 53.7%
4.8%
Fin. Inst.
Corp.
% YoY Growth %
21.9%
56.3%
45.9%
1.6%
0.9%
1.9%
17.6%
5.2% 38.5%
107.5%
59.3%
% EBITDA margin % % CAGR
35.9% 36.1%
18.2%
24.2%
53.3% 53.3%
%
0.8%
11
Summary Profit and Loss
Summary Profit and Loss (€m)
€m 2013 2014 9M'14 9M'15
Revenues 313.5 331.3 235.5 255.9
% growth (YoY) 7.9% 5.7% 5.5% 8.6%
EBITDA 151.5 160.1 112.4 120.1
% Revenues 48.3% 48.3% 47.7% 46.9%
Depreciation & Amortization (23.3) (25.1) (18.3) (21.3)
EBITA 128.2 135.0 94.1 98.8
PPA Amortization (39.4) (42.9) (32.0) (32.7)
Non recurring income and expenses (7.4) (4.5) (2.1) (3.3)
EBIT 81.4 87.6 60.0 62.8
Financial income 0.8 1.1 1.0 0.7
Financial expenses - non recurring - (10.1) (10.1) (36.4)
Financial expenses (59.6) (54.6) (40.8) (32.2)
PBT 22.6 24.0 10.2 (5.1)
Income tax expenses (14.7) (12.0) (5.2) (3.4)
Reported Net Income 8.0 12.0 5.0 (8.5)
Adjusted Net Income 43.0 55.0 37.6 46.3
of which: Minorities 1.1 1.4 0.8 1.8
12
Net Working Capital
Net Working Capital (€m)
119.5
151.5 135.3 145.3
125.5 109.6 120.2
(25.4) (30.1) (31.8) (32.4) (27.3) (24.0) (25.2)
(82.5) (81.9) (73.3) (73.3) (62.9) (57.8) (57.8)
11.6
40.8 31.0
40.4 37.4 29.6
38.9
2012 2013 2014
Ex-M&A
2014 9M'14 9M'15
Ex-M&A
9M'15
Inventories Trade receivables Trade payables Deferred revenues Net Working Capital
4.0% 13.0%
NWC as % of Revenues %
9.5%1) 11.5% 11.7%2) 11.0%2)
(1) Data excludes Recus , RLValue and the Creval transaction
(2) NWC/Revenues based on Revenues of Recus and RL Value for the last 12 months
8.9%1)
Operating Cash Flow (€m)
Operating Cash Flow
13
(1) Cash change in Net Working Capital exludes non recurring items
€m 2013 2014 9M'14 9M'15
EBITDA 151.5 160.1 112.4 120.1
Net Capex (26.6) (28.2) (20.0) (22.5)
EBITDA-Capex 125.0 131.9 92.4 97.6
as % of EBITDA 82% 82% 82% 81%
Cash change in Net Working
Capital(1)(24.7) 8.2 (2.3) 1.8
Change in other assets / liabilities 7.3 (13.9) (6.1) (4.2)
Operating Cash Flow 107.5 126.2 84.0 95.2
as % of EBITDA 71% 79% 75% 79%
Financial Indebtedness
14
Net Financial Indebtedness (€m)
(1)9M’15 includes 10m of Revolving Credit Facility,16m of Vendor Loan, and 23.6m 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 €5.3m included related to the refinancing transaction
(3) LTM EBITDA pro-forma including Recus, RLValue and the Creval transaction for the last 12 months
(4) Proforma excluding extraordinary cots related to the refinancing transaction
€m 2013 2014 H1'15 9M'15
Bonds 780,0 530,0 530,0 530,0
Other financial Debt 1) 0,6 4,0 25,9 50,7
Accrued Interests 20,6 17,3 17,3 8,6
Gross Debt 801,1 551,3 573,2 589,3
Cash (50,3) (46,1) (14,3) (32,3)
Capitalized financing fees 2) (28,6) (17,6) (16,2) (10,3)
IFRS Net Debt 722,2 487,6 542,7 546,7
Net Debt/ LTM EBITDA 3) 4,8x 3,0x 3,3x 3,3x
deduct costs related to the
Refinancing Transact ion(28,9)
Proforma IFRS Net Debt 4) 517,8
Proforma Net Debt/ LTM EBITDA 4) 3,1x
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
Source: Bank of Italy
11.3% 12.4% 12.8% 12.4%
10.8%
8.6% 8.1%
7.0%
Macro Highlights
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
In Q2 2015 GDP grew
+0.3% vs the prior
quarter. FMI expects
+0.8% in calendar 2015
Unemployment at
12.4%, in line with Q1,
Bank of Italy expects
less than 12% in 2016
New bank lending YTD
August 2015 grew by
21.1% vs 2014
Cerved proprietary
data also reflecting an
improved macro
Continuing decline in
late paying companies
Bankruptcies in Q2 2015
fell -11.1% vs Q2 2014
Growth in the stock of
NPLs continues to slow
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 (Q3 and Q4 2014 are forecasts; Cerved estimates
on Bank of Italy data)
Source: Osservatorio Cerved
50
100
150
200
2008 – 2010 – 2012 – Q2’15
2012
Q1 Q2 Q3 Q4
2013
Q1 Q2 Q3 Q4
2014
Q1 Q2 Q3 Q4
5.8% 12.6%
8.6%
-11.1%
Source: Osservatorio Cerved
2012
Q1 Q2 Q3 Q4
2013
Q1 Q2 Q3 Q4
2014
Q1 Q2 Q3 Q4
03% 03% 04% 04%
Source: Osservatorio Cerved, Bank of Italy
2012
Q1 Q2 Q3 Q4
2013
Q1 Q2 Q3 Q4
2014
Q1 Q2 Q3 Q4
Q4
-0,5%
Q4
0,0%
Q4
0,0%
Source: ISTAT, OECD
2012
Q1 Q2 Q3 Q4
2013
Q1 Q2 Q3 Q4
2014
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
-39%
2015
Q1 Q2
2015
Q1 Q2
2015
Q1 Q2
2015
Q1 Q2
2015
Q1 Q2
Table of Contents
18
First Nine-Months 2015 Results 2
First Nine-Months 2015 Business Review 3
Investment Case 4
Appendices 5
Overview 1
Operational and Strategic Update
Business Review Topics
19
Finance,
M&A,
AGM & EGM
Business
Credit Information – Corporate
Credit Information – Financial Institutions
Credit Management
Marketing Solutions
Refinancing
Mergers & Acquisitions
New Product Development
AGM & EGM
Credit Information – Corporates
20
Investing in the business to improve performance in the medium term
Low growth in Revenues in Q2 and Q3 (+1.3% and +1.2%, respectively), adversely
impacted by high churn in H1 2014 and lower sales in H2 2014
Key performance indicators are solid for the first 9 months of 2015 with respect to the sale
and consumption of prepaid points
Currently implementing strategic revamping project to improve sales force efficiency
and effectiveness to enhance growth starting from 2016
Corporate Sales Force Revamp Revenues (€m)
142.7
35.2 38.1 29.6
102.9
2014 Q1'15 Q2'15 Q3'15 9M'15
+3.3%
% YTD
+1.3% (2.4)% Key
Initiatives
New Go-to-Market (Segmentation & Prospect Clients)
Teleselling for Small Clients
Salesforce
Reinforcement
New
CRM
New Churn Reduction Initiatives
Q1'16
Q2'16
Q1Q3'16 Q2'16
Q1'16
Go Live Date
Business
Finance, M&A, AGM & EGM
+1.2%
(0.1)%
Credit Information – Financial Institutions
21
After a tough 2014 the environment appears less challenging in 2015
Bank New Lending – Quarterly from 2008 (€bn) 1)
50
100
150
200
Q1'08 Q1'09 Q1'10 Q1'11 Q1'12 Q1'13 Q1'14 Q2'15
Performance in 9M 2015 at +1.9% (+2.6% in Q1, +0.2% in Q2, and +3.1% in Q3) slightly
above upper target of expectations for 2015
Positive performance in real estate appraisals, balancing contraction in cadastral
surveys. No impact yet from the envisaged consolidation of the Banche Popolari
Continuing activity on the renewal and extension of contracts with large banks
Actively working with Experian to review go-to-market and product offering for the
consumer credit bureau
1) Source: Bank of Italy
122.0
31.1 31.6 29.5
92.2
2014 Q1'15 Q2'15 Q3'15 9M'15
(3.4)%
+1.9%
Revenues (€m) % YTD
+2.6% +0.2%
-39%
3.1%
Business
Finance, M&A, AGM & EGM
Credit Management
22
Continuing strong results with positive tailwind from market and regulatory
11.2
2.4 6.3
4.2
12.9
EBITDA 2014 Q1'15 Q2'15 Q3'15 9M'15
AuM Evolution (€bn)
Strong performance to Q3 2015 with +56.3% Revenues and +107.5% EBITDA
Balanced growth in all business lines: credit workout, legal services and asset
remarketing, both organic and via M&A
Improved profitability reflects slightly higher collection rates, ramp-up of new
portfolios, favourable product mix and benefits from cross
Legislative changes appear promising as confirmed by Bank of Italy report1)
13.7
10.3
7.8
1.8 1.3 0.5
9M'2015 2014 2013 2012 2011 2010
53.3
14.1 21.9 17.2
53.3
Rev 2014 Q1'15 Q2'15 Q3'15 9M'15
+45.5%
+47.2%
Revenues and EBITDA (€m) % YTD
+73.3% +37.3%
+142.0%
+34.2%
54.5%
56.3%
107.5% 131.7%
Business
Finance, M&A, AGM & EGM
1) Bank of Italy: “The changes of the Italian insolvency and foreclosure regulation adopted in 2015”, M. Marcucci, A. Pischedda, V. Profeta, November 2015
Marketing Solutions
23
Positive acceptance of Marketing+ despite go-to-market
Marketing+ Web-based Platform
YTD results slightly below expectations, with +4.8% Revenues and +5.2% EBITDA
Marketing Solutions sales force suffering from fewer leads from the Corporate Credit
Information field sales, due to the latter’s focus on the revamp
Positive results from new product launches, and in particular Marketing+, the new
web-based marketing platform
Increased focus of commercial network on avoid cannibalization with the corporate
credit information activities
14.7
2.9 3.4 2.8
9.2
Rev 2014 Q1'15 Q2'15 Q3'15 9M'15
+15.3%
Revenues and EBITDA (€m) % YTD
6.8
1.0 1.4 0.9
3.3
EBITDA 2014 Q1'15 Q2'15 Q3'15 9M'15
+45.0%
+6.0% +4.8%
+12.2% (2.2)%
Find and compare companies
Analyze sectors
Improve performance
1. One-stop platform to satisfy key marketing and commercial needs
2. Vertical applicatoin dedicated to specific needs
Geomarketing tool
DBforYou (web visualization tool)
3. Easy way to access a network of marketing analysts
Ad-hoc projects
3.4%
4.8%
4.3%
5.2%
Business
Finance, M&A, AGM & EGM
New Product Development
24
Unprecedented effort to renew product range and offer new services
Data Sources Platforms & Applications Adjacent Services
Web Data
Open Data integration
Real Estate DataBase
Marketing+
Credit Monitoring
Decision analytics
Upgrade of main applications
Real Estate
Value-Added BPO
Anti Money Laundering
Credit on Self
Proprietary Technology
Proprietary Content
Higher value-added output
Improved customer experience
Enriched value proposition
Cross-selling opportunities
Business
Finance, M&A, AGM & EGM
Refinancing
Crystallizing refinancing conditions for January 2016
25
39
16
23
Bond Interest
Expenses
Interest
Savings
New Facilities
Interest Expenses
TLA –Amortizing 160m E+2.00% 4 year
avg. life
TLB – Bullet 400m E+2.50% 6 years
Revolving Credit
Facility 100m E+2.00% 5 years
Committed facilities of €660m (including €100m RCF) available to be drawn in January
2016, locking in attractive terms to refinance Cerved’s outstanding bonds
Reduction in interest cost of approx. €23m p.a. with a reduction in weighted average
cost from 7.1% to 2.7% (assuming 75% of the new facilities are swapped to fixed rate)
One-off cash costs estimated at €37m (€23.4m prepayment penalties, plus upfront and
ticking fees and other costs) almost entirely payable in January 2016
Non-recurring financing costs of approx. €38m in 2015 P&L include prepayment
penalties (€23.4m) and the write-off the old upfront fees (approx. €15m)
Comparison of Yearly Interest Costs Overview of the New Facilities
Initial Margin %
Tenor Facility Amount
(€)
Business
Finance, M&A, AGM & EGM
Mergers & Acquisitions
26
Creval, RLValue and SpazioDati on track, Recus below expectations
Mergers & Acquisitions – Summary Data
Recus SpA 81% 19.0m
RLValue Srl 100% 1.4m
Creval Partnership 100% 21.7m
SpazioDati Srl 43% 2.3m
Company Stake % Investment
CI
BI CM
Adj. MS
Advanced Preliminary Status
Mo
re
Less
Eff
ort
M&A Effort and Status
Illustrative Pipeline 2015
Creval performing in line with plan, merger effective from 1 July 2015
RLValue performing above plan, merger effective from 1 April 2015
SpazioDati €1.0m capital increase to increase stake to 43% and develop new projects
Recus hit by numerous factors, performance below plan, contingency plan under way
Numerous opportunities in pipeline in all divisions as well as in adjacencies
Pipeline exclusively focussed on opportunities in Italy
Business
Finance, M&A, AGM & EGM
27
Ordinary and Extraordinary General Meeting
AGM/EGM
AGM/EGM to be called on 14 December 2015 to equip Cerved
with management incentives and governance rules in line with
market standards for companies with highly fragmented ownership
Key items for the agenda are:
Long Term Incentive Plan (“LTIP”) for management
Enabling resolution to issue shares up to 10% without pre-
emption rights
Attributing the incumbent Board the possibility to submit its
own slate of candidates
Business
Finance, M&A, AGM & EGM
28
Summary Long Term Incentive Plan – AGM & EGM
Key Features of
New LTIP
Performance Shares with 3-year vesting. Performance indicators for
rights awarded in 2016 and vesting in 2019 are:
Adjusted Pre-Tax Profit CAGR per share from 2016-2018 (70%
weight): 0% vesting below 6% CAGR, 40% vesting at 6% CAGR,
100% vesting from 10% CAGR
Total Shareholder Return vs Italian FTSE Mid-Cap Index (30%
weight): 0% vesting below median, 50% to 100% vesting in 3rd
quartile, 100% vesting in 4th quartile
Total compensation for key managers in line with market standards.
Coinvestment requirements for all categories of beneficiaries
1.5% maximum dilution of share capital to 2021 (2.925m shares)
Guidelines for
New LTIP
Incentivise and loyalise the management team in the long term
Wide group of beneficiaries to foster alignment with shareholders
Transparent LTIP in line with market standards
Business
Finance, M&A, AGM & EGM
29
Summary Governance Resolutions – AGM & EGM
Mechanism to Appoint
a New Board
Proposed change to the by-laws will allow the incumbent Board of
Directors to propose its own slate for a forthcoming EGM
Current by-laws envisage that only shareholders can propose a
slate slate of candidates (subject to 2.5% backing)
Total board members to remain at 11, of which 9 or 10 to be
appointed by the majority list, 1 or 2 for minority lists
Enabling Resolution
for Capital
Increases
Enabling resolution lasting 30 months to allow the Board of Directors
to issue up to 10% of shares without pre-emption rights for existing
shareholders
This resolution aims at ensuring that the use of shares to finance
acquisitions takes place in a speedy and efficient manner
Subject to guidelines provided to the markets in terms of leverage
and dividend distributions
Business
Finance, M&A, AGM & EGM
Table of Contents
30
First Nine-Months 2015 Results 2
Investment Case 4
Appendices 5
Overview 1
First Nine-Months 2015 Business Review 3
Cerved is a Systemic, Mission-Critical Asset for Italy …
31
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
32
…in a growing market with room for increased penetration
Source: PwC 1) No. 1 player In the non-captive market, considering pro-forma revenues in 2013 which include Recus and Tarida
2% 42%
Corporates
290 (+3.6%)
Business Information
627 (+3.9%)
721 (+8.5%)
Ce
rve
d
Po
sitio
n a
nd
Ma
rke
t Sh
are
in
20
13
359 (-4.3%)
4.2% 42.7% 7.3%1)
Financial Institutions
Consumer 321
Corporates 305
€14,7m
4% of Group
(+18.4% CAGR)
€142.7m
43% of Group
(+8.5% CAGR)
€53,3m
16% of Group
(+63.7% CAGR)
€122,0m
37% of Group
(-3.3% CAGR)
No. 9 No.1 No. 11) No.1
Ma
rke
t
20
13 D
ata
(€
m)
(CA
GR
11
-13
)
Ce
rve
d
20
14
Re
ve
nu
es
(CA
GR
1
1-1
4)
NPLs 502
Corporate receivables
219
Credit Information Credit Management Marketing Solutions
Business Information
120
Rating & Analytics 39
Real Estate
97
Consumer Information
103
33
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
34
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)
35 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%
36
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
37
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
38
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(%)
39
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
227 216
201
183
156
125
107
78
59
2017E 2016E 2015E 2014E 2013 2012 2011 2010 2009
Market NPLs
40
13.7
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 June 30th, 2015
25.4%
7.4%
CAGR 2009A–14E:
CAGR 2014E–17E:
€0.5bn
various banks
contracts
€2.1bn from
Creval
agreement
Cerved Growth
Pre-crisis level of €40-50bn
Current level of €183bn, expected to increase
to €227bn by 2017
#1 Independent Player
Growth from i) NPL growth and ii)
increased outsourcing/NPLs disposals
acted by banks
(1)Source: Prometeia Source: Company information
Market NPLS Cerved NPLs
Increasing NPL volumes
Low liquidity, low collections, higher fees
Decreasing NPL prices, outsourcing
Credit Management Model across the Economic Cycle
41
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 2004-2014
2004
2005
2008
€14mm Mar 2012 Information Services
2012
2011
2013
2014
Illustrative M&A pipeline for 2015
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
42
CI
BI CM
Adj.
MS
Advanced Preliminary Status
Mo
re
Less
Effo
rt
M&A Effort and Status
2015
126
58
74
39
30 23
6
Ac
tua
l 2014
Op
era
tin
g C
ash
Flo
w
Inte
rest
on
Exis
tin
g
€530m
Bo
nd
s
Illu
stra
tive
Ca
sh
Taxe
s (1
)
Illu
stra
tive
Fre
e
Ca
sh F
low
(Pre
-re
fin
an
cin
g)
Inte
rest
Sa
vin
gs
on
Fo
rwa
rd S
tart
Re
fin
an
cin
g
Ca
sh T
axe
s o
n
Inte
rest
Sa
vin
gs
Illu
stra
tive
Fre
e
Ca
sh F
low
(Po
st-r
efin
an
cin
g)
(1) Estimated value for the long term using an overall 34% tax rate; cash taxes in 2015 expected to be higher due to non-recurring timing effects
Illustrative Free Cash Flow
43
Resiliency
Cash flow
Growth
Illustrative 2014 Free Cash Flow Bridge excluding non-recurring items
Pre Bond Refinancing
Post Bond Refinancing
Table of Contents
44
First Nine-Months 2015 Results 2
Appendices 5
Investment Case 4
Overview 1
First Nine-Months 2015 Business Review 3
45
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 Cerved Group 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)
Financial information are provided to investors at two different levels: CIS SpA
(listed on the Milan Stock Exchange) and CG SpA (issuer of €530m of bonds)
46
Group Revenues and EBITDA - Quarterly Analysis
112.4 120.1
9M
2014
2015
235.5 255.9
9M
2014
2015
Quarterly Analysis - Revenues (€m)
Quarterly Analysis - EBITDA(€m)
79.3 84.7
71.5
83.0
94.6
78.3
Q1 Q2 Q3
38.1
41.3
33.1
39.4
45.0
35.7
Q1 Q2 Q3
Total Growth % / Organic Growth %
+11.6% / +4.6%
% / %
+8.6% / +2.2%
+4.7% / (0.7)%
+6.8% / +4.8%
+9.1%/ 7.4%
+3.6% / +1.1%
+9.5% / +2.3%
+7.7% / +5.9%
47
Credit Information – Quarterly Analysis
66.4 69.2 57.9
193.4
66.3 69.7 59.1
195.1
Rev CI - Q1 Rev CI - Q2 Rev CI - Q3 Rev CI - 9M
2014
2015
30.3 31.5 28.6
90.5
31.1 31.6 29.5
92.2
Rev- Q1 Rev - Q2 Rev - Q3 Rev - 9M
Credit Information – Financial Institutions – Rev (€m)
3.1%
36.1 37.7 29.2
102.9
35.2 38.1 29.6
102.9
Rev- Q1 Rev - Q2 Rev - Q3 Rev - 9M
2014 2015
Credit Information – Corporate – Rev (€m)
35.2 37.4 30.4
103.1
36.0 37.4 30.6
103.9
EBITDA - Q1 EBITDA - Q2 EBITDA - Q3 EBITDA - 9M
2014
2015
Credit Information – Revenues (€m)
(0.1)% 2.1%
Credit Information – EBITDA (€m)
1.9%
1.3% (2.4%)
2.2% (0.2)%
0.8%
0.2% 2.6%
1.2%
(0.1)%
0.9%
0.8%
0.4%
48
Credit Mgmt and Marketing Solutions – Quarterly Analysis
1.0 1.2 0.9
3.2
1.0 1.4
0.9
3.3
EBITDA - Q1 EBITDA - Q2 EBITDA - Q3 EBITDA - 9M
2014
2015
(2.2%)
1.8 2.6 1.8
6.2
2.4
6.3 4.2
12.9
EBITDA - Q1 EBITDA - Q2 EBITDA - Q3 EBITDA - 9M
2014
2015
Marketing Solutions – Revenues and EBITDA (€m)
10.3 12.7 11.2
34.1
14.1
21.9 17.2
53.3
Rev - Q1 Rev - Q2 Rev - Q3 Rev - 9M
Credit Management – Revenues and EBITDA (€m)
2.8 3.2 2.8
8.8
2.9 3.4 2.8
9.2
Rev - Q1 Rev - Q2 Rev - Q3 Rev - 9M
37.3%
73.3%
54.5%
34.2%
4.8% 6.0%
3.4%
142.0%
107.5%
12.2%
4.3%
131.7%
4.8%
5.2%
56.3%
Profit and Loss
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
€m 2013 2014 9M'14 9M'15
Total Revenues (including other income) 313.7 331.6 235.6 256.0
Cost of raw material and other materials (2.8) (7.0) (5.0) (6.0)
Cost of Serv ices (77.6) (76.3) (55.7) (57.8)
Personnel costs (67.2) (73.7) (52.2) (61.4)
Other operating costs (8.1) (8.2) (5.8) (6.4)
Impairment of receivables and other provisions (6.4) (6.3) (4.5) (4.4)
EBITDA 151.5 160.1 112.4 120.1
Depreciation & amortization (23.3) (25.1) (18.3) (21.3)
EBITA 128.2 135.0 94.1 98.8
PPA Amortization (39.4) (42.9) (32.0) (32.7)
Non-recurring income and expenses (7.4) (4.5) (2.1) (3.3)
EBIT 81.4 87.6 60.0 62.8
PBT 22.6 24.0 10.2 (5.1)
Income tax expenses (14.7) (12.0) (5.2) (3.4)
Reported Net Income 8.0 12.0 5.0 (8.5)
Adjusted Net Income 43.0 55.0 37.6 46.3
of which: Minorities 1.1 1.4 0.8 1.8
50
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 2013 2014 9M'14 9M'15
Intangible assets 501.1 472.4 470.7 441.3
Goodwill 708.6 718.8 709.1 739.6
Tangible assets 16.6 17.3 16.7 16.9
Financial assets 14.9 14.9 16.8 15.2
Fixed assets 1,241.3 1,223.4 1,213.3 1,213.0
Inventories 1.3 0.7 2.1 1.8
Trade receivables 151.5 145.3 125.5 120.2
Trade payables (30.1) (32.4) (27.3) (25.2)
Deferred revenues (83.1) (73.3) (62.9) (57.8)
Net working capital 39.6 40.4 37.4 38.9
Other receivables 5.8 7.1 7.2 8.0
Other payables (20.4) (26.1) (23.9) (31.4)
Net corporate income tax items (27.2) (18.8) (17.2) (8.7)
Employees Leaving Indemnity (10.9) (13.1) (12.2) (13.1)
Provisions (15.0) (11.1) (11.5) (8.6)
Deferred taxes (1) (119.8) (109.1) (107.5) (94.6)
Net Invested Capital 1,093.3 1,092.7 1,085.5 1,103.7
IFRS Net Debt (2) 722.2 487.6 488.9 546.7
Group Equity 371.1 605.1 596.6 557.0
Total Sources 1,093.3 1,092.7 1,085.5 1,103.7
51
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 2013 2014 9M'14 9M'15
EBITDA 151.5 160.1 112.4 120.1
Net Capex (26.6) (28.2) (20.0) (22.5)
EBITDA-Capex 125.0 131.9 92.4 97.6
as % of EBITDA 82% 82% 82% 81%
Cash change in Net Working Capital (24.7) 8.2 (2.3) 1.8
Change in other assets / liabilities 7.3 (13.9) (6.1) (4.2)
Operating Cash Flow 107.5 126.2 84.0 95.2
Interests paid (29.1) (51.7) (51.7) (38.1)
Cash taxes (18.4) (24.1) (19.2) (28.4)
Non recurring items 0.1 (3.4) (1.4) (2.3)
Cash Flow (before debt and equity movements) 60.1 46.9 11.6 26.3
Net Div idends (0.1) 1.0 0.9 (39.8)
Acquisitions / deferred payments / earnout (509.4) (20.9) (1.5) (23.5)
IPO Capital Increase (net of IPO costs) - 220.2 226.6 -
Other - (0.1) (4.3) (1.1)
Debt drawdown / (repayment) 482.8 (254.5) (252.5) -
Net Cash Flow of the Period 33.5 (7.5) (19.2) (38.0)
Adjusted Net Income Bridge
52
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 2013 2014 9M'14 9M'15
Reported Net Income 8.0 12.0 5.0 (8.5)
Non recurring income and expenses 7.4 4.5 2.1 3.3
Capitalized financing fees 4.1 3.4 2.6 2.1
PPA Amortization 39.4 42.9 32.0 32.7
Financial charges non-recurring - 10.1 10.1 36.4
IRS termination - 1.0 - -
Fiscal Impact of above components (15.8) (18.9) (14.2) (19.7)
Adjustments 35.1 43.0 32.6 54.8
Adjusted Net Income 43.0 55.0 37.6 46.3