Full Year 2016 Results Update. Investor Presentation

Transcription

1 Full Year 06 Results Update Investor Presentation April 07

2 DISCLAIMER Important notice You must read the following before continuing. No representation and no liability: The information contained in this documentation has been supplied by Mercury UK HoldCo Limited (the "Company") and its affiliates (together, the Group ), including Setefi Services S.p.A. (now Mercury Payment Services S.p.A.) and Intesa Sanpaolo Card d.o.o. (now Mercury Processing Services International d.o.o.) which were acquired from Intesa Sanpaolo on 5-Dec-06, or has come from specific data or publicly available sources. Furthermore, certain information was provided by the merchant acquiring business of Banca Monte dei Paschi di Siena S.p.A. ("MPS Acquiring Services"), Bassilichi S.p.A. ("Bassilichi Payments") and the merchant acquiring business of Deutsche Bank S.p.A. ("DB Cards Acquiring" and together with MPS Acquiring Services and Bassilichi Payments, the "Targets") in connection with the pending acquisitions of the Targets by the Group. None of the Group or the Targets makes any representation or warranty or other assurance, express or implied, that this document or the information contained herein or the assumptions on which they are based are accurate, complete, adequate, fair, reasonable or up to date and they should not be relied upon as such. None of the Group or the Targets accepts any liability for any direct, indirect or consequential loss or damage suffered by any person as a result of relying on all or any part of this document and any liability is expressly disclaimed. No recommendation: The sole purpose of this document is to provide background information to assist investors in obtaining a general understanding of the business and the outlook of the Group and the Targets. This document contains only summary information and does not purport to and is not intended to contain all of the information that may be required to evaluate, and should not be relied upon in connection with, any potential transaction. It is not intended to be (and should not be used as) the sole basis of any credit analysis or other evaluation, and it should not be considered as a recommendation by any person for you to participate in any potential transaction. The Group and the Targets expressly disclaim any duty, undertaking or obligation to update publicly or release any revisions to any of the information, opinions or forward-looking statements contained in this document to reflect any events or circumstances occurring after the date of the presentation of this document. No advice: None of the Group or the Targets provides legal, accounting or tax advice, and you are strongly advised to consult your own independent advisers on any legal, tax or accounting issues relating to these materials. Forward-Looking Statements: This document may include projections and other forward-looking statements within the meaning of applicable securities laws. Forward-looking statements are based on assumptions and current expectations and involve a number of known and unknown risks, uncertainties and other factors that could cause actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. You should not place undue reliance on forwardlooking statements and none of the Group or the Targets undertakes publicly to update or revise any forward-looking statement that may be made herein, whether as a result of new information, future events or otherwise. Projections: Any projections or forecasts in this document are illustrative only and have been based on the estimates and assumptions described in this document in relation to them which may or may not prove to be correct. Each recipient of this document should be aware that these projections do not constitute a forecast or prediction of actual results and there can be no assurance that the projected results will actually be realised or achieved. Actual results may depend on future events which are not in the Group s control and may be materially affected by unforeseen economic or other circumstances. None of the Group or the Targets undertakes to publicly update or revise any such forward-looking statements. Financial Information: We present herein financial information derived from the unaudited financial statements of the Group for the fiscal year ended December 3, 06 and selected unaudited financial information for the Targets as of September 30, 06. We also present herein certain unaudited pro forma financial information for the P&L of the Group (the "Unaudited Pro Forma Financial Information") combining, for the fiscal year ended December 3, 06, ICBPI s financial information, Mercury UK HoldCo s financial information, the Mercury Payment Services s financial information and Mercury Processing Services International s financial information, as if the acquisition by the Group of Mercury Payment Services and Mercury Processing Services International had become effective on January, 06. This information has not been audited, reviewed or compiled, and no procedures have been performed by any independent auditors with respect thereto. The Unaudited Pro Forma Financial information presented herein is for informational purposes only, and does not represent the results that would have been achieved had the acquisition of Mercury Payment Services and Mercury Processing Services International been achieved as of the dates or for the periods presented. The calculation of pro forma data is based on management estimates and the unaudited financial statements and internal management accounts of Mercury Payment Services and Mercury Processing Services International. These numbers have not been audited and may not be derived from financial statements prepared in accordance with IFRS. Results indicated by these pro forma measures may not be realized, and funds depicted by these measures may not be available for management s discretionary use if such results are not realized. Expected cost savings and synergies presented herein are based on assumptions about our ability to implement these measures in a timely fashion and within certain cost parameters. The ability of the Group to achieve these cost savings and synergies is dependent upon a significant number of factors, some of which are out of our control. The Group may not be able to fully realize, or realize in the expected timeframe, the expected benefits from our cost measures. We present herein certain financial measures that are not recognized by IFRS. Different companies and analysts may calculate these Non-IFRS measures differently, so making comparisons among companies on this basis should be done very carefully. These Non-IFRS measures have limitations as analytical tools, are not measures of performance or financial condition under IFRS and should not be considered in isolation or construed as substitutes for operating profit or net profit as an indicator of our operations in accordance with IFRS. We believe the Non-IFRS measures presented herein are useful to investors because they can provide a useful additional basis for comparing the current performance and condition of the underlying operations being evaluated by eliminating potential differences in results of operations and financial condition between periods or companies caused by factors such as depreciation and amortization methods, historical cost and age of assets, financing and capital structures, taxation positions or regimes and temporary accounting or non-recurring effects. No offer: This document, the information contained in it or any other information about the Group shall not constitute or form part of any legal agreement, and does not constitute or form part of, and should not be construed as, an offer to sell or a solicitation of an offer to subscribe for, underwrite or otherwise acquire any securities of the Group or any subsidiary or affiliate, nor should it or any part of it form the basis of, or be relied on in connection with, any contract to purchase or subscribe for any securities of the Group or any subsidiary or affiliate, nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever. The distribution of this document in certain jurisdictions may be restricted by law. Persons into whose possession this document comes are required to inform themselves about and to observe any such restrictions. No liability to any person is accepted by the Group, including in relation to the distribution of the document in any jurisdiction. By reviewing this document, you agree to be bound by the limitations set out herein. This document contains information that prior to its disclosure may have constituted inside information under European Union Regulation 596/04 on market abuse.

3 EXECUTIVE SUMMARY During the course of 06, the Mercury Group has continued to deliver on its strategic plans, growing its core activities, implementing key initiatives to accelerate performance and pursuing inorganic growth opportunities, with the key objective to create the leading Italian payments company and one of the largest payments businesses in Europe as underlined in the new business plan of ICBPI approved in Feb-07 On 5-Dec-06, the Mercury Group completed the acquisition of Setefi Services (now Mercury Payment Services) and Intesa Sanpaolo Card (now Mercury Processing Services International) from Intesa Sanpaolo, further strengthening its positioning as a leading player across the payments value chain In addition, ICBPI has signed definitive agreements to acquire MPS Acquiring Services, Bassilichi Payments and DB Cards Acquiring; these transactions, which are expected to close by July 07, will improve ICBPI s merchant proposition, strengthen its payments capabilities and provide significant synergy opportunities In 06 the ICBPI Group s performance has been strong. Both Operating Revenue and EBITDA have increased organically compared to 05 levels, mainly due to the significantly improved performance across the CartaSi and Payments reporting segments on the back of higher business volumes Significant increase in net fee, commission and other business income, as a result of the increase in value of card transactions and managed transactions, as well as in the number of payment / clearing transactions and digital corporate banking services 06 EBITDA totalled 7m (+3.5% vs. 05 levels), with Business Lines EBITDA (i.e. excluding other group activities and consolidation adjustments) increasing by 47.m to 7m (or +7.8% vs. 05 levels), more than offsetting the decrease in the EBITDA related to treasury and corporate centre activities. EBITDA margin increased by 3.6p.p. to 33% in 06, reflecting the margin improvement across all Business Lines Net profit attributable to the owners of the parent for 06 equal to 04m (+4.9% y-o-y), increasing by 3.5m vs. 05 benefitting from higher EBITDA and higher ACE tax benefit, notwithstanding the gross negative impact of (55)m of non-recurring items The (currently) unaudited consolidated net profit of Mercury UK HoldCo for 06 was equal to 7m, reflecting among other things both the aforementioned ICBPI Group results and the cumulative gross negative impact of (3)m of one-off costs for M&A initiatives at Mercury UK HoldCo and Latino level, but not yet including the contribution to P&L of Mercury Payments & Processing as the acquisition was finalised close to year-end Mercury Payments and Processing combined EBITDA for 06 was equal to 97m, increasing by c.0% vs. 05 mainly as a consequence of the additional revenues for Mercury Payment Services related to new contracts with Intesa Sanpaolo; lower EBITDA y-o-y for Mercury Processing Services International (-8.6%) as a result of lower revenues due to decreased pricing applied from January 06 following pricelist review; combined net profit for 06 was equal to 35m, benefitting from one-off gross proceeds of 83.6m which were paid by Visa in connection with the Visa Europe acquisition Adjusted pro forma EBITDA for 06 for Mercury UK HoldCo was equal to 370m (including the impacts and expected synergies from the acquisition of the Mercury Payments & Processing); adjusted pro forma profit available to Sponsors' HoldCo (adjusted, among other things, for all the aforementioned non-recurring items and expected synergies) was equal to 07m, Mercury UK HoldCo CET ratio (calculated for consolidated regulatory reporting purposes) was equal to 4.3% as of year-end 06. Pro forma financial information based on management accounts presented to illustrate the effects of the acquisition of Mercury Payments & Processing on UK HoldCo's reported financial position and results of operations for 06. Figures not taking into account the impacts of the pending acquisitions of MPS Acquiring Services, Bassilichi Payments and DB Cards Acquiring. Please refer to page of this document for additional information on pro forma figures / adjustments 3

4 AGENDA I. Update on ICBPI Group II. III. IV. Update on Mercury Payments & Processing Update on Mercury UK HoldCo Update on New Business Plan and Recent Acquisitions

5 CartaSi Payments Securities Services BPO Services Other Group Activities ICBPI Group UPDATE ON ICBPI GROUP Spotlight on Full Year 06 Results Commentary In 06 the ICBPI Group s performance has been strong, with its core business growing significantly, particularly on an EBITDA basis Operating revenue for 06 of 689m increased by 8.6m (or +.3%) vs. 05, driven by an increase of c. 8m in net fee, commission and other business income mainly resulting from the improved operating performance of the CartaSi and Payments reporting segments (which stemmed from increases in business volumes and number of transactions). The positive performance in terms of net fee, commission and other business income was partially offset by the c. 9m decrease in net interest income, which resulted from a decrease in interbank and Italian government bond interest rates Operating Revenue ( m Full Year) % (37.6%) % 655 Business Lines revenues increased by 8.6m (or +4.6%) vs. 05 Operating costs excluding D&A for 06 of 46m, decreasing by 8.5m (or -3.8%) vs. 05, on the back of the decrease registered in terms of other administrative expenses EBITDA for 06 of 7m, increasing by 7.m (or +3.5%) vs. 05, driven by the solid performance of the Business Lines, for which the EBITDA increased by 47.m (or +7.8%) vs. 05, more than offsetting the 0.m decrease in Other Group Activities (treasury and corporate centre) EBITDA EBITDA margin increased by 3.6p.p. to 33% in 06, reflecting the margin improvement across all Business Lines Business Lines EBITDA ( m Full Year) EBITDA Margin Other Group Activities (Treasury / Corporate Centre) 9.4% + 356bps 33.0% +3.5% (65.6%) 7 FY 06 EBITDA % 7 % of Group EBITDA 75.% 0.5% 5.8% 3.8% 4.6% 00% Performance vs. 05 change > 5% change > % % > change > -% change < -% change < -5% Source: group information (management accounts). Include treasury activities and consolidation adjustments Business Lines Other Group Activities (Treasury / Corporate Centre) 5

6 UPDATE ON ICBPI GROUP (CONT D) Key Performance Indicators ICBPI Group Key Performance Indicators Commentary 3 4 FY 06 FY 05 % Change Issuing Business Total cards (# - '000) 5,36 5,556 (.%) Value of transactions ( m) 8,848 7,980 3.% Managed transactions (# - m) % Acquiring & POS Business Value of transactions ( m) 5,48 50,5 4.0% Managed transactions (# - m) % Managed POS (#) 543, ,8 (3.8%) Other CartaSi Business 3 Debit cards (# - '000),67,5.4% Debit cards transactions (# - m),99,36 5.6% Managed ATM (#) 9,9 9,367 (0.8%) Payments Business Banking payment transactions (# - m) % Clearing transactions (# - m) % E-Banking (workstation #) 6,455 48, % Securities Services Business Depositary bank (AuC - m) 59,456 56,74 4.8% Global custody (AuC - m) 3,453 7,608 (3.3%) Brokerage negotiation (value - m) 38,556 46,89 (7.8%) = Normalised % change On a like-for-like basis, y-o-y growth in number of managed cards (c.6% 4 ) and value of transactions (c.4% 4 ) Solid performance in terms of volume of managed transactions which increase by c.0% Solid growth trends in acquiring volumes, notwithstanding the anticipated UCG outflow Y-o-y growth in value of transactions of c.6% 4 on a like-for-like basis, and c.9% increase in terms of volume of managed transactions Managed reduction of POS terminals driven by anticipated outflow of a customer Improved performance in the banking services business and digital corporate banking service business, with significant volume increases recorded in 06, especially for the clearing business recovering from the decline experienced in 04 / 05 mainly due to SEPA migration Increase in depositary bank assets in custody (by c.5%) and decreases in global custody assets in custody (by c.3%) as well as in value of brokerage negotiation (by c.8%) compared to the previous year Source: group information (managerial figures). Includes charge, prepaid and credit cards. Includes credit, charge and prepaid cards managed under the licensing model 3. Includes issuing and acquiring businesses 4. Normalised % change for the number of total cards for the Issuing Business based on adjusted figures for 05, taking into account (i) the clean-up of inactive pre-paid cards carried out by CartaSi in 06 and (ii) the card outflow related to Intesa Sanpaolo. Normalised % change for the value of transactions for the Issuing Business based on adjusted figures for 05, taking into account the outflow related to Intesa Sanpaolo. Normalised % change for the value of transactions for the Acquiring & POS Business based on adjusted figures for 05, taking into account the outflow related to UniCredit 6.3% 3.8% 6.4% 6

7 UPDATE ON ICBPI GROUP (CONT D) Selected Financial Information by Reporting Segment ICBPI Group Breakdown by Reporting Segment Commentary ( '000) FY 06 % of Group FY 05 Change % Change CartaSi Revenue 469, % 44,70 7, % Costs (98,060) (3,854) 3,794 (4.4%) EBITDA 70, % 9,35 4,68 3.% 36% 9% Payments Revenue 9,7 3.% 88,056 3,5 3.5% Costs (67,36) (67,894) 658 (.0%) EBITDA 3, % 0,6 3,77 8.7% 6% 3% Securities Services Revenue 67,03 9.7% 68,05 (,09) (.6%) Costs (53,79) (55,947),56 (3.9%) EBITDA 3, 5.8%,58, % 0% 8% BPO Services Revenue 8,0 4.% 9,7 (,5) (4.%) Costs (9,36) (,96),935 (9.%) EBITDA 8,65 3.8% 7, % 3% 7% Other Group Activities Revenue 33,37 4.8% 53,374 (0,047) (37.6%) Costs (,787) (,707) (80) 0.4% EBITDA 0,54 4.6% 30,667 (0,7) (65.6%) Group Revenue 688, % 679,93 8,595.3% o/w: Business Lines 655,00 66,557 8,64 4.6% Costs (46,36) (479,698) 8,46 (3.8%) EBITDA 7,9 00.0% 00,33 7, % o/w: Business Lines 6,750 69,566 47,84 7.8% EBITDA Margin 33.0% 9.4% +356 bps 3 Net Profit 03,998 90,484 3,54 4.9% = EBITDA Margin (%) Source: group information (management accounts). Costs excluding D&A. Include treasury activities and consolidation adjustments 3. Net profit attributable to the owners of the Parent ICBPI Group recorded an EBITDA of 7m (+3.5% vs. 05), with EBITDA margin increasing to 33% (from 9% in 05) reflecting the positive EBITDA performance across all Business Lines. In particular: CartaSi EBITDA equal to 7m, increasing by 4.6m (or +3.%) vs. 05, as a result of the significant increase in revenue mainly driven by the positive performance of the Merchant Acquiring and POS Business, coupled with lower production costs Payments EBITDA equal to 4m, increasing by 3.7m (or +8.7%) vs. 05, primarily due to an increase in net fee, commission and other business income, stemming from the improved operating performance in the banking services business and digital corporate banking service business Securities Services EBITDA equal to 3m, increasing by.m (or +8.7%) vs. 05, on the back of lower ICT costs recorded in 06, which more than offset the lower revenues primarily due to the decrease in the value of brokerage negotiation BPO Services EBITDA equal to 9m, increasing by 0.7m (or +9%) vs. 05, on the back of the positive performance in regulatory reporting services and lower ICT costs recorded in 06, which compensated for the lower performance of the anti-money laundering services and ICT security services Other Group Activities EBITDA equal to m, decreasing by 0.m (or 65.6%) vs. 05, mainly due to the decrease in net interest income generated by the treasury activities Net profit equal to 04m 3, increasing by 3.5m (or +4.9%) vs. 05 benefitting from higher EBITDA and higher ACE tax benefit, notwithstanding the gross negative impact of (55)m of nonrecurring items mainly related to one-off costs for transformation initiatives initiated by the Sponsors (vs. gross negative impact of (6)m of non-recurring items in 05) Pre-tax profit excluding impact of non-recurring items increased organically by c.4% y-o-y 7

8 AGENDA I. Update on ICBPI Group II. III. IV. Update on Mercury Payments & Processing Update on Mercury UK HoldCo Update on New Business Plan and Recent Acquisitions

9 UPDATE ON MERCURY PAYMENTS & PROCESSING Spotlight on Full Year 06 Results Commentary Operating Revenue ( m Full Year) Mercury Payment Services % 76 Operating revenue for 06 of 40m increased by 0.7m (or +8.3%) vs. 05, mainly as a consequence of the additional revenues from the new ATM and POS contracts with Intesa Sanpaolo effective from Jan-06 EBITDA for 06 of 88m increased by 9.5m (or +.%) vs. 05, as a result of the aforementioned increase in net fee, commission and other business income due to new contracts 39 3% (7.3%) % +8.3% Payment Services Processing Services International % 79% % of Group Revenue Mercury Processing Services International Operating revenue for 06 of 36m decreased by.8m (or -7.3%) vs. 05, mainly driven by lower net fee, commission and other business income, due to decreased pricing applied from January 06 as a result of the pricelist review against market benchmarks for related-party clients EBITDA ( m Full Year) EBITDA Margin 5.3% + 59bps 54.9% 88 0 % +9.8% (8.6%) % 06 EBITDA Margin 4% EBITDA for 06 of 9m decreased by 0.8m (or -8.6%) vs. 05, as a result of lower revenues which were partially offset by a decrease in administrative expenses 79 89% +.% 88 9% 63% Payment Services Processing Services International % of Group EBITDA Source: group information (management accounts). 06 figures for Mercury Payment Services (i) reflect the new ATM and POS contracts entered into between Mercury Payments Services and Intesa Sanpaolo effective from..06 and (ii) include also the effect (for 9 month) of the fees for the acquiring services to those customers transferred on.0.06 to Intesa Sanpaolo. 05 figures based on historical data 9

10 UPDATE ON MERCURY PAYMENTS & PROCESSING (CONT D) Key Performance Indicators Mercury Payment Services Key Performance Indicators Commentary 3 Issuing Business Issuing Business FY 06 FY 05 % Change Total cards excl. debit (# - '000),07,88 (6.3%) Debit cards (# - '000) 4,675 4,879 (4.%) Managed transactions (# - m) % Acquiring & POS Business Managed transactions (# - m) % Managed POS (#) 8,605,0 3.% Other FY 06 FY 05 % Change Total cards excl. debit (# - '000) 4,976 5,034 (.%) Debit cards (# - '000) 9,958 9,40 5.9% Managed transactions (# - m) % Acquiring & POS Business Managed transactions (# - m) % Managed POS (#) 45, , 6.9% Other Managed ATM (#) 6,649 6,500.3% Mercury Processing Services Int. Key Performance Indicators Managed ATM (#),303,330 (.%) Source: group information (managerial figures). Includes charge and prepaid cards for Mercury Payment Services, charge and credit cards for Mercury Processing Services International. Includes debit, credit, charge and prepaid cards 3 Charge and Prepaid cards decrease (-.%) is due to a shift in Intesa Sanpaolo's focus towards International Debit Cards Increase in managed transactions (+7.4%) is related to a growing usage per card, in line with the trends in the Italian payments market Managed transactions increase (+3.%) is mainly due to growing number of POS (+6.9%) The market success of Mobile POS (with a lower transaction per terminal ratio) explains the higher POS number growth compared to the managed transactions growth Decrease in number of managed cards (-6.3%) reflects client banks business initiatives towards increasing profitability of cardholder base by closing non-active or non-performing card accounts Focus on performing customers as well as on expanding merchant acquiring network was enhanced, resulting in an increased number of managed transactions both for the issuing and acquiring business 0

11 AGENDA I. Update on ICBPI Group II. III. IV. Update on Mercury Payments & Processing Update on Mercury UK HoldCo Update on New Business Plan and Recent Acquisitions

12 UPDATE ON MERCURY UK HOLDCO Selected Financial Information as of Dec-06 Pro Forma Selected Financial Information for Mercury UK HoldCo Commentary ( m, unless otherwise stated) Year End 06 Selected P&L Information Pro forma total combined segment operating revenue Pro forma normalised EBITDA 34.3 Pro forma normalised EBITDA margin 37.4% Adjusted pro forma EBITDA (incl. expected synergies with Mercury Payments & Processing) Adjusted pro forma EBITDA margin 4.7% Pro forma profit for the period attributable to the owners of the parent Adjusted pro forma profit (incl. expected synergies with Mercury Payments & Processing) Adjusted pro forma profit available to Sponsors' HoldCo 07. Based on 06 managerial figures, pro forma normalised EBITDA of 34m for the combined platform with ICBPI Group and Mercury Payments & Processing Adjusted pro forma EBITDA (incl. 0m of expected synergies with Mercury Payments & Processing) of 370m Adjusted pro forma profit available to Sponsors' HoldCo (net of minority and tax leakage) equal to 07m 4 Selected Debt Information 5 Net financial debt.7bn Pro forma cash interest expense 4.8 Net financial debt / Adjusted pro forma EBITDA 4.6x Adjusted pro forma EBITDA / Pro forma cash interest expense.6x Adjusted pro forma profit available to Sponsors' HoldCo / Pro forma cash interest expense.5x Selected Capital Information CET Capital Ratio 4.3% Net financial debt of.7bn, not including additional 0.6bn of debt raised in February 07 for the acquisition of MPS Acquiring Services, Bassilichi Payments and DB Cards Acquiring Common Equity Tier (CET) ratio equal to 4.3% 6 as of 3st December 06 NOTE: pro forma financial information based on management accounts presented to illustrate the effects of the acquisition of Mercury Payments & Processing on UK HoldCo's reported financial position and results of operations for 06 (figures do not take into account the impacts of the acquisitions of MPS Acquiring Services, Bassilichi Payments and DB Cards Acquiring) Source: group information (management accounts). Excluding D&A and non-recurring/extraordinary items. Calculated as pro forma normalised EBITDA adjusted for: capitalization of ICT expenditures, ICT and procurement savings, monetization of free card issuing services, expected average annualised decrease in interest income from AFS Portfolio, International Debt Initiative, other normalization and 0m of expected gross synergies with Mercury Payments & Processing 3. Calculated as pro forma profit for the period attributable to the owners of the parent adjusted for: extraordinary revenue/costs (incl. 83.6m of gross proceeds paid by Visa in connection with Visa Europe acquisition), capitalization of ICT expenditures, ICT and procurement savings, monetization of free card issuing services, expected average annualised decrease in interest income from AFS Portfolio, International Debt Initiative, other normalization, tax benefits due to equity investment and 3m of expected net synergies with Mercury Payments & Processing 4. Calculated as adjusted pro forma profit net of minority equity interests and tax leakage 5. Net financial debt at Sponsors HoldCo level not including additional 0.6bn of debt raised in February 07 for the acquisition of MPS Acquiring Services, Bassilichi Payments and DB Cards Acquiring 6. Figure not taking into account the impacts of the pending acquisitions of MPS Acquiring Services, Bassilichi Payments and DB Cards Acquiring 6

13 AGENDA I. Update on ICBPI Group II. III. IV. Update on Mercury Payments & Processing Update on Mercury UK HoldCo Update on New Business Plan and Recent Acquisitions

14 ICBPI 07-0 BUSINESS PLAN Strategic Plan Approved by the BoD on 0-Feb-07 Total planned investment by the Sponsors in Mercury of 5bn, the largest ever investment made by private equity funds in Italy and among the largest in Europe Envisaged development of ICBPI's platform to result in the acceleration of the digitisation and modernisation process of the Italian banking system ICBPI Strategic Goal CartaSi is to become the national champion of digital payments in partnership with banks, through substantial investments in technology and expertise, acquiring international scale Strategic Pillars 3 Delivery of organic growth will be achieved through the creation of new offers on secure and high quality products Provision of innovative services in partnership with banks that will significantly improve customer experience, such as those related to the world of e-commerce, instant payments, mobile digital payments and highly innovative debit cards Achievement of inorganic growth through acquisitions aimed at increasing scale to the level of major international companies c. bn already invested and committed to date for the acquisition of ISP Processing (Setefi and ISP Cards), Bassilichi and the merchant acquiring businesses of BMPS and Deutsche Bank Investment of over bn in technology and digital products, coupled with the entry of new skilled and innovationoriented resources in the Company Further strengthening of the Company's existing capabilities and talent base 4 Continued focus on efficiency enhancement Objective to free up additional resources to support investments Source: group information. Including: bn for the initial acquisition of ICBPI, bn for the acquisition of companies and businesses specialized in the world of electronic money and payments, bn investment in the development of innovative technologies for the addition of new expertise and the development of the partnership with banks 4

15 UPDATE ON RECENT ACQUISITIONS The recently signed acquisitions will improve ICBPI s merchant proposition, strengthen the partnerships with BMPS and DB, increase the share of revenue pool captured, add key payments capabilities and provide significant synergy opportunities MPS Acquiring Services Bassilichi Payments DB Cards Acquiring Business Overview Merchant acquiring business of fourth largest Italian bank BMPS, serving 00k merchants ICBPI has an existing strong relationship with MPS Acquiring and BMPS and currently operates under an indirect / associate merchant acquiring model (excluding POS servicing) 0-year long term referral contract for merchant acquiring with BMPS Bassilichi Payments is the Payments business of Bassilichi Group and operates as an independent entity, with BMPS being the largest customer for the business Under the relationship model with BMPS, Bassilichi provides POS installation and servicing to all merchants and ATMs Majority of Bassilichi Payments revenue is driven by POS rental income DB Cards Acquiring is the merchant acquiring business of Deutsche Bank Italy, serving 5k merchants Merchant portfolio including large base of valuable and loyal SME merchants, which represent a significant portion of volumes 5 years referral contract, with option for renewal for additional 5 years Roughly 40% of the POS base uses innovative contactless technology and majority of POS terminals (~300K) are less than one year old Strategic Rationale Increase exposure to direct acquiring model with an ability to increase commercialisation to implement value creation playbook Secure partnership with key Italian Bank, with long term referral contract ensuring recurring cash flows and aligning incentives for distribution Significant synergies with low integration risk Broaden footprint in POS market Fill the product gap by providing POS services to BMPS (CartaSi already services BMPS acquiring volumes and signed acquiring deal) Revenue synergies led by commercialisation initiatives including cross selling initiatives Significant cost synergies Increase exposure to direct acquiring model with an ability increase commercialisation to implement value creation playbook Significant cost synergies with low integration risk Status Update Antitrust authorization obtained Filed with Bank of Italy, pending approval Expected closing: end of June / beginning of July 07 Antitrust authorization obtained Filed with Bank of Italy, pending approval Expected closing: beginning of July 07 Filed with Bank of Italy, pending approval Expected closing: end of May 07 5

16 UPDATE ON RECENT ACQUISITIONS (CONT D) Key Financials and Synergies Potential Overview MPS Acquiring Services Bassilichi Payments DB Cards Acquiring Key Financials LTM Sep-6 EBITDA pro forma for synergies of LTM Sep-6 EBITDA pro forma for synergies of LTM Sep-6 EBITDA pro forma for synergies of 59m m 6m Synergy Type Amount ( m) Comment Synergy Type Amount ( m) Comment Synergy Type Amount ( m) Comment VAT savings 5.0 Removal of VAT from intra-group services ICT cost savings 4. Reductions in ICT costs Synergies Savings from FTE Total cost savings Cross-selling / upselling Potential savings from FTE rationalisation due to in-house migration to CartaSi platform Bring loss making merchant contracts to breakeven Up-selling and crossselling of value added services G&A savings 4.6 Cost base rationalization 7.6 ~ 4.m from consolidation of general expenses (administration, consulting and compensation) ~ 0.4m from savings arising out of real estate expenditures Rationalisation of Bassilichi Payments cost base Opex 5.5 VAT savings Reduced card scheme fees Rationalizing cost base Upgrade of POS terminals proposition in-line with CartaSi benchmarks Integration savings 3.8 Integration of Bassilichi Payments into the ICBPI Group s existing payments infrastructure Total synergies 5.0 Total synergies 0. Total synergies 5.5 Further synergies potentially achievable given Sponsors past experience with similar transactions. MPS Acquiring synergies incl. adjustments (net value of c. 3m) relating to MIF regulation and bad debt provisions. Bassilichi Payments EBITDA reflects the transaction perimeter and a one-off cost related to MPS payment Note: These estimated operational efficiencies and synergies are based on our Sponsors experience with previous investments in the industry, as well as industry benchmarking, advice from industry experts and management consultants retained in connection with the acquisitions. There can be no assurance that we will realize all or any of these potential operational efficiencies and synergies 6

17 APPENDIX

18 GROUP STRUCTURE Advent Bain Clessidra Mercury (AI) S.à.r.l. Mercury A Capital Ltd 00% 00% 00% Mercury (BC) S.à.r.l. Mercury B Capital Ltd Fides S.p.A. 4.5% (of Issuer) 4.5% (of Issuer) 5% (of Issuer) 7.5% (of ABC) 7.5% (of ABC) 45% (of ABC) 600m Private Placement Notes 00% 00% Mercury ABC Capital Ltd 33.3% 33.3% 33.3% Issuer 95m Undrawn Revolving Credit Facility 900m Original Fixed Rate Notes 00m Original Floating Rate Notes 89.07% Mercury UK HoldCo ICBPI Group Latino 00.0% 600m Notes for Pending Acquisitions 5m Additional Undrawn Revolving Credit Facility for Pending Acquisitions 98.7% 00.0% 70.0% CartaSi S.p.A. Oasi Diagram S.p.A. 9.% Help Line S.p.A. 00.0% Mercury Payment Services 00% Mercury Processing Services International Legend Pending Acquistions MPS Acquiring Bassilichi Payments DB Cards Acquiring CET Perimeter Pending Acquistions Source: group information 8