results to 30 june 2017 - cerved company · 4 executive summary macro highlights italian macro...

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July 28th, 2017

Cerved Information Solutions S.p.A.

Results to 30 June 2017

1

Disclaimer

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.

2

Today’s Presenters

Marco Nespolo – Chief Executive Officer

Giovanni Sartor – Chief Financial Officer

8 years at Cerved

8 years of TMT industry experience

Prior experience: Seves Group, Nylstar (RP-Snia JV), Eni, Heinz

Education: MBA from Eni University; Statistics and Economics degree from University of Padua

Pietro Masera – Head of Corporate Development & IR

4 years at Cerved


Prior experience: CVC, Deutsche Bank, Bankers Trust, UBS, SEAT

Education: degree in Economics and Business Administration from University of Bergamo

9 years at Cerved


Prior experience: Bain Capital, Bain & Company, Citibank

Education: degree in Business Administration from Bocconi University of Milan

3

Table of Contents

Highlights 1

Half-Year Business Review 2

Financial Review 3

Appendices 4

4

Executive Summary

Macro Highlights

Italian macro improving with upgraded GPD forecasts for 2017-2018

Decisive actions on troubled Italian banks by Italian State/ECB/EU

H1’17

Financial Results

Revenues +6.8% vs H1’16, +5.1% organic

Adjusted EBITDA1) +5.0% vs H1’16, +4.3% organic

Operating Cash Flow2) €74.5m in H1’17, +13.9% vs H1’16

Adjusted Net Income €48.6m in H1’17, +10.4% vs H1’16

Leverage 2.8x LTM Adjusted EBITDA

Other Significant ongoing M&A activity albeit limited impact on 2017

Amendment of financing facilities effective from Q4’17

Note: 1) Adjusted EBITDA excludes provisions of €0.7m related to the Long Term Incentive Plan in H1’17 2) Based on Adjusted EBITDA

5

116 126 136 144

65 74

2013 2014 2015 2016 H1'16 H1'17

152 160 171 180

89 93

2013 2014 2015 2016 H1'16 H1'17

313 331 353

377

188 201

2013 2014 2015 2016 H1'16 H1'17

+6.8%/ +5.1%

Consistent Growth and Cash Flow Generation

Note: 1) Adjusted EBITDA excludes provisions of €0.7m related to the Long Term Incentive Plan in FY'16 and €0.7m in H1'17 2) Based on Adjusted EBITDA; 2013 pro-forma for business disruption arising from adoption of new ERP systems in September 2013

Consistent Growth Adjusted EBITDA Growth1) High Cash Flows

Revenue (€m) Adjusted EBITDA (€m)1) Operating Cash Flow (€m)2)

Consistent Revenue, Adjusted EBITDA1) and Cash Flow growth

% / % Total Growth % / Organic Growth %

+6.3% / +3.2%

CAGR 2013-16

+5.9% / +4.5%

CAGR 2013-16

+7.5%

CAGR 2013-16

+5.0% / +4.3%

+13.9%

6

Source: Bank of Italy

11,9% 12,8% 12,3% 11,7% 11,6%

9,2%

7,6% 7,4% 6,9%

6,6%

Macro Highlights

Italian unemployment Italian GDP New lending

% of companies paying over 60 days late versus contractual

terms

Number of proceedings (seasonally

adjusted) and growth rates as change

versus same quarter of previous year

Growth rate compared to the

previous quarter

Late paying companies Bankruptcies NPLs

Default rate on outstanding loans; Cerved estimates on

Bank of Italy data

Source: Osservatorio Cerved

Q1’17

50

100

150

200

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

14.0%

6.5% -1.7% -3.6% -4.1%

Source: Osservatorio Cerved

3,1% 3,5% 3,8% 3,9%

3,6%

Source: Osservatorio Cerved, Bank of Italy

Q4

(0,1)%

Q4

(0.1)%

Q4

0,2%

Q4

0,3% 0,4%

Source: ISTAT, OECD

YoY +0.8%

YoY -0.4%

YoY -1.7%

Source: ISTAT

-49%

YoY +1.0%

Q1 Q2 Q3 Q4

2013

Q1 Q2 Q3 Q4

2014

Q1 Q2 Q3 Q4

2015

Q1 Q2 Q3 Q4

2016 Q1

’17

Q1 Q2 Q3 Q4

2013

Q1 Q2 Q3 Q4

2014

Q1 Q2 Q3 Q4

2015

Q1 Q2 Q3 Q4

2016 Q1

’17

Q1 Q2 Q3 Q4

2013

Q1 Q2 Q3 Q4

2014

Q1 Q2 Q3 Q4

2015

Q1 Q2 Q3 Q4

2016 Q1

’17

Q1 Q2 Q3 Q4

2013

Q1 Q2 Q3 Q4

2014

Q1 Q2 Q3 Q4

2015

Q1 Q2 Q3 Q4

2016 Q1

’17

Unemployment as % of total working

population

Q1 Q2 Q3 Q4

2013

Q1 Q2 Q3 Q4

2014

Q1 Q2 Q3 Q4

2015

Q1 Q2 Q3 Q4

2016 Q1

’17

Note: figures and estimates are subject to periodical revisions

Key Economic Indicators

Cerved Proprietary

Data

New lending volumes to

corporates in € billions (quarterly) Bank of Italy upgraded

its GDP growth forecasts

for 2017 to 1.4% from

0.9% (1.3% for 2018 and

1.2% for 2019)

Lower unemployment

rate at 11.6% in Q1’17

New bank lending to

corporates declined

(-6.3% in Q1’17),

whereas lending to

families improved

Late paying companies

and number of

bankruptcies highlight

an improving situation in

Q1’17

Default rates on loans

increased at a lower

pace in Q1’17 (3.6%)

versus last year (3.9%)

New NPL generation

rates are finally declining

Key highlights

Key highlights

7

Table of Contents


Financial Review 3

Appendices 4

Highlights 1

8

Snapshot of 2017 H1 Divisional Results

Overall H1 results in higher end of guidance range, despite delay in Credit Management

Total

Credit Info

Financial Inst.

Credit Info

Corporate

Credit Management

Marketing Solutions

64 65

75 80

+1.1%

+5.9%

+11.2%

+35.5%

+6.8% (+5.1% organic)

+4.6%

+4.0%

+18.3%

+5.0% (+4.3% organic)

3 4

11 12

9 12

41 46

Drivers Adjusted EBITDA1) Revenues Area

74 78

H1'16 H1'17

+3.7%

Note: 1) Adjusted EBITDA excludes provisions of €0.7m related to the Long Term Incentive Plan in H1'17

F.I.: growth in Business Info complementing

solid increase in Real Estate appraisals

Corporate: consistent trajectory, supported

by commercial excellence initiatives and

product innovation

EBITDA: favorable revenue mix in H1

enabled some operating leverage

Revenues: Double digit organic growth

despite lack of new portfolio intake. Soft Q2

due to tough comp and calendarization

EBITDA: unfavorable mix vs H1’16 impacted

margins

Revenues: consistent organic growth

complemented by impact of PayClick

(organic from Q2)

EBITDA: limited margin dilution driven by

PayClick lower margin vs legacy business

and specific one-off items in Q2

9

Credit Information – Financial Institutions

After a strong +2.1% in Q1, revenues grew +0.1% in Q2, leading to a satisfactory +1.1%

growth in H1 2017, in line with Investor Day guidance

Real Estate appraisals segment continues to yield strong growth, driven by underlying

market trajectory, Cerved share gain and penetration on new customers

Also Business Information segment grew in H1, mainly thanks to reduced impact of

contract renewals and increased penetration on selected banks

Recent acceleration in bank consolidation has not yet impacted Cerved

Positive trajectory continues, with Business Information playing a role

Bank New Lending – Quarterly from 2008 (€bn) 1)

1) Source: Bank of Italy

50,0

100,0

150,0

200,0

Q1'08 Q1'09 Q1'10 Q1'11 Q1'12 Q1'13 Q1'14 Q1'15 Q1'16 Q1'17

-49%

-6.3% Q1 2017

32,0 32,0 30,0 32,6 32,7 32,0

Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17

Revenues (€m) % YoY

+2.7% +0.3% +1.2% (0.1%)

+1.0%

+2.1% +0.1%

+1.1%

FY 2016 H1 2017

10

Credit Information – Corporates

A satisfactory +5.3% in Q2’16 – following a very strong +6.5% in Q1 - led to a good 5.9%

growth in H1’17

The successful integration of the small acquisitions made in 2016 (Major 1 and

Fox&Parker) is complementing the organic growth

As anticipated in prior presentation, strong focus on product evolution led to relevant

additional launches in 2017

In combination with continued efforts on salesforce excellence initiatives, this is leading

to a consistent growth trajectory over the last several quarters

Growing in line with targets, also thanks to continued product innovation

36,6 38,9 30,9

41,7 39,0 40,9

Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17

Product innovation: selected examples Revenues (€m) % YoY

+4.2% +2.7% +5.1% +6.0%

+4.5%

+6.5% +5.3%

+5.9%

Cerved Credit Suite

Cerved Connect

Payline Collection

Cerved Credibility

Real Estate Appraisals

Fully renovated Credit Information Suite

Jun ‘17

Cerved Application for SalesForce.com CRM

Apr ‘17

Credit Collection features into Credit Information platform

Dec’16

“Credit on self” platform Jun’16

Extension of RE Appraisals to Corporate segment

Dec’16

FY 2016 H1 2017

11

Credit Management

After a very strong (and anticipated as non sustainable) Revenue and EBITDA growth in

Q1, Q2 has been softer, leading to +11.2% in Sales and +4.0% in EBITDA in H1’17

Q2 softness in terms of Revenue and EBITDA growth is mainly driven by a very tough

comparable in 2016 and calendarizazion of few relevant items between Q1 and Q3

Despite delays in AUM expansion, NPL servicing segment continues to deliver growth

Ramp-up of partnership with Barclays on their € 11.6bn portfolio and new expected NPL

servicing activities should bring FY results on track with strategic outlook targets

Softer Q2 dragged H1 below targets. But mid term trajectory confirmed

Evolution of AuM in H1’17 (€bn)

Note: Barclays is an estimate based on average GBV and number of loans No interrupted portfolios or disposal in the period

Q1, Q2 and H1 Results 2015, 2016, 2017 (€m)

'15 '16 '17 '15 '16 '17 '15 '16 '17

Revenues 14,1 17,4 21,5 21,9 23,9 24,5 36,1 41,3 46,0

% growth 23% 23% 9% 2% 15% 11%

EBITDA 2,4 3,8 4,5 6,3 7,6 7,4 8,7 11,4 11,9

% growth 55% 18% 21% -3% 31% 4%

% margin 17% 22% 21% 29% 32% 30% 24% 28% 26%

Q2 H1Q1

13,3 0,9

11,6

(0,6)

25,2

2016 New

Portfolios

Barclays Organic

Reduction

H1'17

12

Marketing Solutions

Revenues performed +11.7% in Q2’17 (fully organic as PayClick was acquired in Q2‘16),

bringing H1’17 to +35.5%

Organic growth remains consistent with high single digit/ low double digit strategic

outlook, with PayClick contributing more than the Cerved legacy business

Adj. EBITDA decline in Q2’17 is entirely attributable to a number of one-off adjustments

related to the integration of PayClick into Cerved

Solid results and successful integration of PayClick has triggered increased interest in

the Digital Marketing arena

Consistent organic performance alongside successful integration of PayClick

LTM Revenue Breakdown to June ‘17 Revenues & Adj. EBITDA (€m)

Cerved

Legacy

Business

63%

PayClick

37%

High single digit growth

Double digit growth

% YoY

21,1

5,6 6,4 12,0

2016 Q1'17 Q2'17 H1'17

+35.5% +11.7% +79.8%

+52.7%

8,2

1,7 2,0 3,7

2016 Q1'17 Q2'17 H1'17

+18.3% (2.8%) +57.4%

+38.0%

Re

ve

nu

es

Ad

j. E

BIT

DA

13

Financial Review 3

Table of Contents

Appendices 4

Highlights 1


14

Group Revenues

Revenue Bridge (H1’16 – H1’17, €m)

Revenues (€m) and Revenue growth (%)

331,3 353,5

377,0

187,8 200,7

2014 2015 2016 H1'16 H1'17

187,8

200,7

0,7 4,5

4,6 3,1 (0,1)

Revenues

H1'16

CI - Financial

Institutions

CI -

Corporates

Credit

Management

Marketing

Solutions

Other & Conso

clearing

Revenues

H1'17

Credit Information


+6.8% / +5.1%

+6.7% / +1.6%

+6.6% / +4.1%

15

88,9

92,7 93,3

3,4 0,5 0,6 (0,7)

EBITDA

H1'16

Credit

Information

Credit

Management

Marketing

Solutions

Adjusted EBITDA

H1'17

Impact

PSP 2019-2021

EBITDA

H1'17

160,1 170,8 180,0

88,9 93,3

2014 2015 2016 H1'16 H1'17

Group Adjusted EBITDA1)

EBITDA Bridge (H1’16 – H1’17, €m)

Adjusted EBITDA (€m) and Adjusted EBITDA margin (%)1)

48.3% 48.3%


47.3% 46.5%

47.8%

+6.7% / +5.2%

+5.0% / +4.3%

Note: 1) Adjusted EBITDA excludes provisions of €0.7m related to the Long Term Incentive Plan in FY'16 and €0.7m in H1'17

+5.4% / +3.9%

16 Note: 1) Adjusted EBITDA excludes provisions of €0.7m related to the Long Term Incentive Plan in FY'16 and €0.7m in H1'17 2) Excluding impact of €37.3 million of non-recurring financial charges related to the “Forward Start” financing agreement, not having had any cash impact in 2015

Group Operating Cash Flow and Financial Leverage

Net Debt (€m) and Net Debt/ LTM Adjusted EBITDA

Operating Cash Flow (€m) and Operating Cash Flow /Adjusted EBITDA (%)1)

144,0 126,2

136,1

65,4 74,5

2014 2015 2016 H1'16 H1'17

78.8% 79.7%

% Operating Cash Flow (as % of Adjusted EBITDA) YoY Growth % %

73.6% 79.8%

80.0%

722

488 500 523 523

2013 2014 2015 2016 H1'17

4.8x

3.0x

x Net debt/Adjusted EBITDA

2.9x2) 2.9x

+13.9%

2.8x

+7.9% +5.8%

17

53,3

75,0 84,7

41,3 46,0

2014 2015 2016 H1'16 H1'17

Note: 1) Breakdown between Corporates and Financial Institutions could be slightly different from past figures due to the reclassification of some clients within segments 2) Adjusted EBITDA excludes provisions of €0.7m related to the Long Term Incentive Plan in H1'17

Group Divisional Performance

Credit Information Credit Management Marketing Solutions

122,0 125,4 126,6

64,0 64,7

142,7 141,7 148,1

75,5 79,9

264,7 267,1 274,7

139,5 144,6

2014 2015 2016 H1'16 H1'17

Re

ve

nu

e

Ad

just

ed

EB

ITD

A2)

142,1 145,4 147,5

74,4 77,8

2014 2015 2016 H1'16 H1'17

11,2

19,5 24,4

11,4 11,9

2014 2015 2016 H1'16 H1'17

14,7 13,8

21,1

8,8 12,0

2014 2015 2016 H1'16 H1'17

6,8 5,9 8,2

3,1 3,7

2014 2015 2016 H1'16 H1'17

45.9% 42.7%

21.0%

26.0%

53.7% 54.4% 53.7%

Fin. Inst.

Corp.

% YoY Growth % Adjusted EBITDA margin % % CAGR

31.1% 27.6% 25.8% 53.3%

53.8%

%

28.8%

38.7%

1)

35.6%

+9.9%

18.3% CAGR ‘14-16

+47.8%

4.0% CAGR ‘14-16

+1.9%

CAGR ‘14-16 4.6%

+19.7%

35.5% CAGR ‘14-16

+26.1%

11.2% CAGR ‘14-16

+1.9%

CAGR ‘14-16

3.7%

18

€m 2015 2016 H1' 16 H1'17

Revenues 353,5 377,0 187,8 200,7

% growth (YoY) 6,7% 6,6% 5,8% 6,8%

Adjusted EBITDA 170,8 180,0 88,9 93,3

% Revenues 48,3% 47,8% 47,3% 46,5%

EBITDA 170,8 179,3 88,9 92,7

Depreciation & Amortization (28,5) (30,6) (14,8) (16,8)

EBITA 142,3 148,7 74,1 75,9

PPA Amortization (45,8) (47,4) (23,3) (17,8)

Non recurring income and expenses (3,8) (6,5) (4,4) (3,9)

EBIT 92,8 94,8 46,4 54,2

Financial income 1,1 0,8 0,5 0,5

Financial expenses (43,2) (19,5) (10,7) (16,3)

Non recurring financial expenses (52,4) (0,5) (0,5) -

PBT (1,7) 75,5 35,7 38,4

Income tax expenses 5,3 (22,4) (11,7) (13,6)

Non recurring Income tax expenses - (4,5) - -

Reported Net Income 3,6 48,7 24,0 24,8

Adjusted Net Income 68,5 92,0 44,0 48,6

of which: Minorities 2,5 1,9 0,5 0,7

Adjusted Net Income increased

+10.4% versus the previous year,

reaching €48.6m in H1’17

PPA amortization significantly

declined due to the end of

amortization of database

allocated from business

combinations in prior years

Non-recurring items, €0.5m lower

than the previous year, include

€2.5m for layoffs and personnel

optimization, and €1.3m for M&A-

related activities

Financial expenses include €7.5m

of fair value adjustment related

to the put&call options of CCMG,

ClickAdv and Major 1, expected

to result in cash-outs during the

course of 2018-2020

Summary Profit and Loss (€m)

Summary Profit and Loss

Key highlights

Note: 1) Adjusted EBITDA excludes provisions of €0.7m related to the Long Term Incentive Plan in FY'16 and €0.7m in H1'17

19

Net Working Capital at 11.2% of

LTM Revenues (pro-forma for

acquisitions), lower than in H1’16

The limited growth in Receivables

attributable to the Credit

Management division, which

registered favourable collection

dynamics, as well as lower

growth compared to the recent

past

Trade payables in H1 ‘17 stable

vs YE ‘16, versus an increase of

€1.9m in H1 ‘16 vs YE ‘15

The minor contraction in

Deferred Revenues is due to the

increasing contribution of large

corporate accounts, less linked

to prepaid points

The expected pickup of Revenue

growth in the Credit

Management division will lead to

an increase in the Cerved

group’s NWC/Revenue ratio

0,7 2,0 1,7 2,2 0,9

145,3 139,8 154,9

142,4 143,2

(32,4) (30,0) (38,5) (31,9) (38,7)

(73,3) (74,0) (77,3)

(62,5) (61,8)

40,4 37,8 40,9 50,2

43,6

2014 2015 2016 H1'16 H1'17

Inventories Trade receivables Trade payables

Deferred revenues Net Working Capital

Net Working Capital

11.7%

Net Working Capital (€m)

NWC as % of Revenues 1) %

10.7% 10.8% 13.3% 11.2%

Note: 1) NWC/Revenues based on pro-forma Revenues for the previous 12 months

Key highlights

20

€m 2015 2016 H1'16 H1'17

Adjusted EBITDA 170,8 180,0 88,9 93,3

Net Capex (31,6) (33,5) (17,0) (20,1)

Adjusted EBITDA-Capex 139,1 146,5 71,9 73,2

as % of Adjusted EBITDA 81% 81% 81% 78%

Cash change in Net Working

Capital3,0 (4,6) (8,2) (0,2)

Change in other assets /

liabilities / provisions(6,0) 2,0 1,7 1,4

Operating Cash Flow1) 136,1 144,0 65,4 74,5

Operating Cash Flow increased

+13.9%, from €65.4m to €74.5m

Beyond the limited growth in

Receivables, Operating Cash

Flow benefited from favourable

collections from clients, coupled

with limited growth of the Credit

Management division

Net capex continues to grow

due to the increased effort in

product innovation and new

product launches (eg. Cerved

Credit Suite launched in June)

Trade receivables continue to

remain at record levels,

benefiting from the improving

macroeconomic situation,

coupled with Cerved’s stringent

collection policy

Other payables positively

impacted by a cash contribution

for future rent installments related

to the new headquarters

Operating Cash Flow (€m)

Operating Cash Flow

Note: 1) Based on Adjusted EBITDA

Key highlights

21

€m 2015 H1'16 2016 H1'17

Bonds 530,0 - - -

New Facilities - 560,0 557,6 552,8

Revolv ing Facility - 25,0 - -

Other financial Debt 1) 41,8 18,3 19,7 18,7

Accrued Interests 17,3 5,7 3,9 2,9

Gross Debt 589,1 609,0 581,3 574,4

Cash (50,7) (30,0) (48,5) (43,0)

Capitalized financing fees 2) (1,5) (10,4) (9,3) (8,5)

IFRS Net Debt 536,8 568,6 523,4 522,8

Net Debt/ LTM Adj. EBITDA 3) 3,1x 3,2x 2,9x 2,8x

Non-recurring impact of "Forward

Start" transaction37,3 - - -

Adjusted Net Debt 499,6 568,6 523,4 522,8

Adj. Net Debt/ LTM Adj. EBITDA 3) 2,9x 3,2x 2,9x 2,8x

Financial Indebtedness

Financial Indebtedness table (€m)

IFRS Net Debt of €522.8m in H1’17,

higher than the €510.0m in Q1’17

but in line with the €532.4m in

FY’16

The increase in the quantum of

debt is attributable to the

payment of dividends for a total

of €48.2m in May 2017

Leverage ratio in H1’17 at 2.83x

based on LTM Adjusted EBITDA

(pro-forma for acquisitions)

Absent cash outflows related to

large-scale M&A transactions,

the leverage ratio is expected to

further improve by the end of

2017

1) FY’15, Q1’16 and FY’16 and H1’17 include €16.0m of Vendor Loan; FY’15 includes also €24.3m of breakage costs related to the refinancing;

2) Extraordinary write-off of €13.3m in FY’15;

3) LTM Adjusted EBITDA pro-forma including the M&A transactions for the last 12 months and the impact of provisions related to the Long Term Incentive Plan.

Key highlights

22

Net Debt / EBITDA old new

3,5x-4,0x 2,250% 2,000%2,85x-3,5x 2,000% 1,750%2,25x-2,85x 1,750% 1,500%

Net Debt / EBITDA old new

3,5x-4,0x 2,750% 2,500%2,85x-3,5x 2,500% 2,125%2,25x-2,85x 2,250% 1,875%

Margin ratchet

TLA (€153m, Jan 2021) & RFC (€100m, Jan 2021)

TLB (€400m, Jan 2022)

Margin ratchet

Amendment of Financing Facilities

Cerved has secured binding commitments from its lead bank group (BNP Paribas,

Calyon, Intesa, Mediobanca and Unicredit) to amend its existing facilities

The formal amendment process will be launched on 1 August 2017 to allow the rest of

the bank syndicate to adhere to the amendment process. Completion of the

amendment process is expected at the end of September

On a full-year basis, expected interest savings amount to approx. €2.0m

Cerved is exploring the opportunity to refinance a portion of its TLB facility with

alternative instruments (private placement, listed bonds, convertible bond)

Cerved has secured an agreement with 5 leading banks to amend its existing facilities

Terms of Amendment Margin Ratchets

TLA amortisation: the residual €153m of TLA will entirely bullet pay maturing in January 2021 (initially amortising, 4-year avg life)

Security package: none (previously pledge over 100% stake of Cerved Group SpA)

Margins: reduction of margin grids between 25 and 37.5 bps up to maturity

23

Table of Contents

Appendices 4

Highlights 1


Financial Review 3

0 73

132

0 128 142

109 189 255

191 191 191

0 103 188

16 159 189

221 221 221

92 188 210

24

127,4

152,5 24,3

89,3

Revenues LTM PF H1’17

(€ and % Group)

Credit Information

Corporate Financial Institution

1.9% +26.1% +19.7% 1.9%

39%

23%

6%

32%

Credit Management Marketing Solutions

Scope of Business

Growth H1 ’17 vs’16

CAGR % ‘14-’16

Products and services sold to financial institutions and corporations to assess the solvency, creditworthiness and financial condition of commercial counterparties

and clients

Based on Italy’s largest and most comprehensive database on corporates

Market analysis, lead generation and

performance marketing products and services arising

from Cerved’s database

Servicing of all types of performing,

NPLs and problematic receivables on behalf

of banks, investors, finance companies,

utilities and corporates

+5.9% +11.2% +35.5% +1.1%

The Italian Leader in the Credit Information Market

Note: figures includes intercompanies

0 73

132

0 128 142

109 189 255

191 191 191

0 103 188

16 159 189

221 221 221

92 188 210

25

2% 42%

291 (+2.5%)

Business Information

627 (+3.9%) 802 (+9.4%)

Cerved

Position and

Market Share in 20141)

369 (-2.0%)

4.2% 41.9% 8.2%

Consumer 321

Corporates 305

No. 9 No.1 No.1 3) No.1

Market

2014 Data (€m)

(CAGR11-14)

Bank NPLs 233

Corporate Receivables

220

Business Information

119

Rating & Analytics 43

Real Estate

100

Consumer Information

107

Source: PwC, Cerved 1) Market share on 2014 figures proforma for RLValue and Recus; Credit Information market share includes the consolidation of the JV with Experian 2) Market figures on Marketing Solutions referred to 2013 fiscal year 3) No. 1 player In the non-captive market

Consumer Receivables

349

Corporate Financial Institution

Key Drivers

Pricing pressure

Cross-selling

New bank lending

Underpenetration

Industrial production

Credit checks

Growth of NPLs

Bank outsourcing

Collection levels

Cross-selling

Consolidation

Product innovation

Credit Information Marketing Solutions2)

The Italian Leader in the Credit Information Market

Credit Management

26

Group Revenues and EBITDA – Quarterly Analysis

88,9 93,3

H1

2016

2017

187,8 200,7

H1

2016

2017

Quarterly Analysis - Revenues (€m)

Quarterly Analysis – Adjusted EBITDA(€m)

88,5

99,3 97,8 102,8

Q1 Q2

41,8

47,1 44,5

48,9

Q1 Q2

Total Growth % / Organic Growth % % / %

+10.5% / +7.4%

+3.3% / +3.0%

+6.8% / +5.1%

+6.3% / +5.0%

+3.8% / +3.7%

+5.0% / +4.3%

27

Credit Information – Quarterly Analysis

68,6 70,9

139,5

71,7 73,0

144,6

Rev CI - Q1 Rev CI - Q2 Rev CI - H1

2016

2017

32,0 32,0

64,0

32,7 32,0

64,7

Rev- Q1 Rev - Q2 Rev - H1

Credit Information – Financial Institutions – Rev (€m)

36,6 38,9

75,5

39,0 40,9

79,9

Rev- Q1 Rev - Q2 Rev - H1

2016 2017

Credit Information – Corporate – Rev (€m)

36,9 37,4

74,4

38,3 39,5

77,8

EBITDA - Q1 EBITDA - Q2 EBITDA - H1

2016

2017

Credit Information – Revenues (€m)

Credit Information – Adjusted EBITDA (€m)

+3.6% +5.6%

+4.6%

+4.4% +3.0%

+3.7%

+2.1% +0.1%

+1.1%

+6.5% +5.3%

+5.9%

28

Credit Mgmt and Marketing Solutions – Quarterly Analysis

1,1

2,0

3,1

1,7 2,0

3,7


2016

2017

3,8

7,6

11,4

4,5

7,4

11,9


2016

201717,4

23,9

41,3

21,5 24,5

46,0

Rev - Q1 Rev - Q2 Rev - H1

3,1

5,7

8,8

5,6 6,4

12,0

Rev - Q1 Rev - Q2 Rev - H1

Credit Management – Revenues and Adjusted EBITDA (€m)

Marketing Solutions – Revenues and Adjusted EBITDA (€m)

+23.3% +2.4%

+11.2%

+18.2%

(3.0%)

+4.0%

+79.8% +11.7%

+35.5%

+57.4% (2.8%)

+18.3%

29

€m 2015 2016 H1'16 H1'17

Total Revenues (including other income) 353,7 377,1 188,0 200,7

Cost of raw material and other materials (8,3) (7,4) (3,9) (4,2)

Cost of Serv ices (78,9) (84,9) (42,6) (47,5)

Personnel costs (81,5) (91,7) (45,9) (48,3)

Other operating costs (8,5) (8,6) (4,1) (4,3)

Impairment of receivables and other provisions (5,7) (4,5) (2,6) (3,1)

Adjusted EBITDA 170,8 180,0 88,9 93,3

Performance Share Plan - (0,7) - (0,7)

EBITDA 170,8 179,3 177,8 92,7

Depreciation & amortization (28,5) (30,6) (14,8) (16,8)

EBITA 142,3 148,7 163,0 75,9

PPA Amortization (45,8) (47,4) (23,3) (17,8)

Non-recurring Income and expenses (3,8) (6,5) (4,4) (3,9)

EBIT 92,8 94,8 135,3 54,2

PBT (1,7) 75,5 35,7 38,4

Income tax expenses 5,3 (22,4) (11,7) (13,6)

Non-recurring Income tax expenses - (4,5) - -



of which: Minorities 2,5 1,9 0,5 0,7

Profit and Loss

Source: Company Information; for further details refer to Cerved Information Solutions S.p.A. Annual and Quarterly Reports

30

€m 2015 H1'16 2016 H1'17

Intangible assets 459,7 438,7 423,7 408,8

Goodwill 718,8 729,8 732,5 732,3

Tangible assets 16,4 16,3 19,8 20,8

Financial assets 8,3 8,8 8,7 8,8

Fixed assets 1.203,1 1.193,6 1.184,7 1.170,7

Inventories 2,0 2,2 1,7 0,9

Trade receivables 139,8 142,4 154,9 143,2

Trade payables (30,0) (31,9) (38,5) (38,7)

Deferred revenues (74,0) (62,5) (77,3) (61,8)

Net working capital 37,8 50,2 40,9 43,6

Other receivables 7,6 8,0 7,7 9,0

Other payables (32,2) (49,3) (53,9) (58,3)

Net corporate income tax items (1,0) (4,8) 0,3 (8,3)

Employees Leaving Indemnity (12,5) (13,4) (13,1) (12,4)

Provisions (8,5) (7,8) (7,3) (6,9)

Deferred taxes (1) (88,7) (89,3) (91,9) (92,6)

Net Invested Capital 1.105,6 1.087,3 1.067,4 1.044,7

IFRS Net Debt (2) 536,8 568,6 523,4 522,8

Group Equity 568,8 518,7 543,9 521,9

Total Sources 1.105,6 1.087,3 1.067,4 1.044,7

Balance Sheet

Source: Company Information; for further details refer to Cerved Information Solutions S.p.A. Annual and Quarterly Reports (1) Non cash item; (2) Net of capitalized financing fees

31

€m 2015 2016 H1'16 H1'17

Adjusted EBITDA 170,8 180,0 88,9 93,3

Net Capex (31,6) (33,5) (17,0) (20,1)

Adjusted EBITDA-Capex 139,1 146,5 71,9 73,2

as % of Adjusted EBITDA 81% 81% 81% 78%

Cash change in Net Working Capital 3,0 (4,6) (8,2) (0,2)

Change in other assets / liabilities (6,0) 2,0 1,7 1,4

Operating Cash Flow 136,1 144,0 65,4 74,5

Shareholder's fees - - - -

Interests paid (40,3) (29,2) (22,7) (8,7)

Cash taxes (40,2) (27,3) (10,6) (9,6)

Non recurring items 1) (3,2) (8,8) (3,7) (7,2)

Cash Flow (before debt and equity movements) 52,3 78,7 28,4 49,1

Net Div idends (40,1) (44,4) (44,5) (47,7)

Acquisitions / deferred payments / earnout (23,5) (27,9) (23,6) (1,8)

IPO Capital Increase (net of IPO costs) - - - -

Other (1,1) - - -

Debt drawdown / (repayment) - - - -

"Forward-Start" Refinancing - (35,5) (35,5) -

Net Cash Flow of the Period (12,3) (29,1) (75,1) (0,4)

Cash Flow

Source: Company Information; for further details refer to Cerved Information Solutions S.p.A. Annual and Quarterly Reports (1) FY 2016 figure Includes €2.2m cash outflow for the new headquarters

32

€m 2015 2016 H1'16 H1'17


Non recurring income and expenses 3,8 6,5 4,4 3,9

Non recurring financial charges 52,4 0,5 0,5 -

Capitalized financing fees 2,9 2,2 1,1 0,8

PPA Amortization 45,8 47,4 23,3 17,8

IRS termination - - - -

Fair Value adjustment of options - - - 7,5

Fiscal Impact of above components (28,4) (17,7) (9,3) (6,1)

Adjustments 76,4 38,8 20,0 23,8

Impact of IRES change treatment (11,5) - - -

Non recurring income tax expenses - 4,5 - -


Adjusted Net Income Bridge

Source: Company Information; for further details refer to Cerved Information Solutions S.p.A. Annual and Quarterly Reports

Cerved Information Solutions S.p.A. Via dell’Unione Europea, 6A/6B –

20097 San Donato Milanese Tel. +39 02 77541

company.cerved.com

results to 30 june 2017 - cerved company · 4 executive summary macro highlights italian macro...

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