SIA defies Covid tribulations with low-margin growth in revenues and profits

SIA’s Board of Directors, meeting under the chairmanship of Federico Lovadina, approved the preliminary consolidated financial results at 31 December 2020, confirming the positive trend of 2019 and growing in the fourth quarter of 2020, despite the economic contraction caused by the Covid-19 pandemic.
 
„In 2020, SIA Group recorded consolidated revenues of €748 million, an increase of 2% YoY, entirely on an organic basis of which approximately 50% is generated by recurring activities. Revenues maintain a geographical diversification in line with 2019 with 68% in Italy and 32% abroad,” according to the press release.
 
At the level of the market segments in which SIA Group operates, the following results were obtained to 31 December 2020:

Card & Merchant Solutions, representing 67% of the total revenues generated by the Group – approximately divided between 64% for activities related to issuing services and 36% for acquiring services – recorded revenues of €499 million, up 2% compared with 2019, benefiting from a growth in transactions volumes;

Digital Payment Solutions, representing 21% of the Group’s total revenues, recorded proceeds of €155 million, up 4% compared to 2019. The segment was boosted by the trend in volumes processed, which were not impacted by the economic contraction due to Covid-19, and were especially related to PagoPA (+76% YoY) and corporates (Telcos, Utilities, Retailers) using Gateway services for the collection of payments from their customers (+8% YoY); 

Capital Market & Network Solutions, representing 12% of the Group’s total revenues, recorded proceeds of €94 million, up 1% on 2019, due to the growth in Network services volumes processed.

Despite the complexity of the current context, SIA Group can count on a diversified and resilient business model, thanks to 32% of revenues generated abroad and about 50% of total revenues associated with the installed base (number of POS terminals, number of cards managed, etc.), fee-based services and development activities, therefore not directly impacted by the dynamics of volumes in the short term.
 
EBITDA reached €285 million, up 3% compared to the previous year with a 38% EBITDA margin.
 
In 2020, costs amounted to €463 million, with an increase of 2% YoY due to higher personnel costs incurred for organic growth and operating costs (+1% YoY) related to regulatory compliance, the development of new technology platforms and, in general, increased processing capacity.
 
Investments amounted to €93 million, substantially in line with 2019. 

At 31 December 2020, Net Financial Debt was €688 million (2.4x EBITDA) compared to €812 million at the end of 2019 (2.9x EBITDA), „a significant improvement thanks to cash generation” during the period in question.
 
PRELIMINARY CONSOLIDATED FINANCIAL RESULTS – FOURTH QUARTER 2020
 
In the fourth quarter of 2020, SIA Group recorded revenues of €222 million, up 7% q/q, while EBITDA amounted to €89 million, with a 13% increase q/q.
 
At the level of the market segments in which SIA Group operates, the following results were obtained in the fourth quarter:

Card & Merchant Solutions, recorded revenues of €143 million, up 9% compared to the same period in 2019, benefiting from the addition of new customers in Italy and abroad, as well as from an increase in the number of transactions processed over the same quarter of the previous year and the development of anti-fraud services; 

Digital Payment Solutions, recorded revenues of €50 million, with a 3% increase compared to the same period in 2019. This segment continues to be positively affected by the trend in volumes managed, which were not impacted by the economic downturn generated by Covid-19, and benefited from the start-up of a number of new corporate clients; 

Capital Market & Network Solutions, recorded revenues of €29 million, up 4% compared to the same period in 2019, due to the growth of volumes managed.