Investor Presentation

Transcription

1 Investor Presentation August

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 15-Dec-2016, the merchant acquiring business of Banca Monte dei Paschi di Siena S.p.A. ("MPS Acquiring Services ) acquired on 30- Jun-2017 and the merchant acquiring business of Deutsche Bank S.p.A. ("DB Cards Acquiring) acquired on 1-Jun-2017 or has come from specific data or publicly available sources. Furthermore, certain information was provided by Bassilichi S.p.A. ("Bassilichi Payments, the "Target") in connection with the acquisition of the Target by the Group on 3 Jul None of the Group or the Target 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 Target 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 Target. 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 Target 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 Target 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 forward-looking statements and none of the Group or the Target 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 Target 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 six months ended June 30, 2017 and selected unaudited financial information for the Target as of September 30, We also present herein certain unaudited pro forma financial information for the Group (the "Unaudited Pro Forma Financial Information") combining for the twelve months period ended June 30, 2017, the twelve months period ended March 31, 2017, the fiscal year ended December 31, 2016 and for the twelve months period ended September 30, 2016 the financial information of (i) Istituto Centrale delle Banche Popolari Italiane S.p.A. (ICBPI), (ii) Mercury UK HoldCo Ltd, (iii) Mercury Payment Services S.p.A. ( Mercury Payments Services ), (iv) Mercury Processing Services International d.o.o. ( Mercury Processing Services International ), (v) MPS Acquiring Services and (vi) DB Cards Acquiring, as if the acquisition by the Group of Mercury Payment Services, Mercury Processing Services International, MPS Acquiring Services and DB Cards Acquiring had become effective on April 1, 2016, January 1, 2016 and October 1, 2015 as applicable. We also present herein certain unaudited pro forma financial information for the Group in relation to its capital position to show for illustrative purposes the effects of the acquisition of the Target, which was completed after the balance sheet date of June 30, 2017, on the consolidated regulatory capital ratios of the Group as of Jun-2017 (the Unaudited Pro Forma Regulatory Capital Information ). 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 and the Unaudited Pro Forma Regulatory Capital Information presented herein are for informational purposes only, and do not represent the results that would have been achieved had the acquisition of Mercury Payment Services, Mercury Processing Services International, MPS Acquiring Services, DB Cards Acquiring and the Target been completed as of the dates or for the periods presented. The calculation of pro forma data is based on management estimates, the unaudited financial statements and internal management accounts of Mercury Payment Services and Mercury Processing Services International, MPS Acquiring Services and DB Cards Acquiring and selected unaudited financial information for the Target as of September 30, 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 attending the meeting at which this presentation is made, dialling into the teleconference during which the presentation is made or reading this presentation, 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 596/2014 on market abuse. 2

3 TODAY S PRESENTERS Bernardo Mingrone Group Chief Financial Officer Appointed CFO of ICBPI in 2016 Extensive experience in capital markets from previous roles as CFO of UniCredit and Banca Monte dei Paschi di Siena, two of Italy s largest public market issuers Previously Managing Director at Bear Stearns & J.P. Morgan Davide Rusnati Group Director of Planning & Control Department Director of Planning & Control Department since years of business experience within ICBPI, holding a number of positions in the most significant departments 3

4 EXECUTIVE SUMMARY During the course of Q2 2017, 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 strategy, with the key objective to create the leading Italian payments company and one of the largest payments businesses in Europe as underlined in the business plan of ICBPI approved in Feb-2017 On 1-Jun-2017 CartaSi completed the acquisition of DB Cards Acquiring and on 30-Jun-2017 completed the acquisition of Monte Paschi di Siena Acquiring (MPS Acquiring Services) On 3-Jul-2017 ICBPI completed the acquisition of Bassilichi Payments These transactions will improve ICBPI s merchant proposition, strengthen its payments capabilities and provide significant synergy opportunities In H the Mercury Group s performance has been strong. Both Operating Revenue and EBITDA have increased organically compared to 2016 levels, mainly due to the significantly improved performance across ICBPI s reporting segments on the back of higher business volumes The unaudited consolidated Mercury UK Holdco income statement for H (that include at ICBPI Group s level one-off costs for the acquisitions, but not yet including the contribution to P&L of MPS Acquiring Services and including only a one-month contribution of DB Cards Acquiring) showed: Operating Revenue of 445m, as a result of ICBPI s Group operating revenue of 357m (+7.5% vs H1 2016) and Mercury Payments & Processing combined operating revenue of 87m (+0.3% y-o-y) EBITDA at 178m, as a result of ICBPI s Group EBITDA of 131m (+34.3% vs H1 2016) and Mercury Payments & Processing combined EBITDA of 47m (+0.7% y-o-y) Net profit of 11m, impacted by 126m of gross non-recurring items for (i) HR restructuring costs ( 81m), (ii) advisory costs for transformation program ( 22m), (iii) taxes on M&A transactions ( 17m), (iv) investments in Atlante write-off ( 3m) and (v) other one-off costs ( 3m) Mercury UK HoldCo CET1 ratio (that fully included effect of the acquisitions of DB Cards Acquiring and MPS Acquiring Services but not yet including the impact of Bassilichi Payments acquisition) was equal to 21.6% 1 as of 30-Jun-2017 On a pro-forma basis 1, including the contribution to P&L of MPS Acquiring, Mercury Group s financial performance showed: Pro-forma H Operating Revenue of 484m, up 4.9% vs. H Pro-forma H EBITDA of 200m, up 18.5% vs. H1 2016; EBITDA margin increased by 4.7p.p. to 41.2% LTM 30-Jun-2017 Adjusted Pro Forma EBITDA 2 of 457m and LTM 30-Jun-2017 Adjusted Pro Forma Net Profit Available to Sponsors Holdco 2 of 257m 1. Pro forma financial information based on management accounts presented to illustrate the effects of the acquisition closed by the end of 30-Jun-2017 on UK HoldCo's reported financial position and results of operations. Figures include income, expenses and other items as well as consolidation adjustments for the Group. Figures not taking into account the impacts of Bassilichi Payments acquisition (closed in Jul-2017) 2. Calculated as pro forma normalised EBITDA / profit 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 40m of expected gross synergies ( 27m net of tax) with Mercury Payments & Processing, MPS Acquiring and DB Cards. Adjusted pro forma profit also adjusted for tax benefits due to equity investment and extraordinary revenue / costs and refers to profit available to Sponsors HoldCo 4

5 AGENDA I. MERCURY GROUP: KEY CREDIT HIGHLIGHTS II. H TRADING UPDATE A. MERCURY GROUP B. ICBPI GROUP C. MERCURY PAYMENTS & PROCESSING III. UPDATE ON CAPITAL AND LIQUIDITY 5

6 AGENDA I. MERCURY GROUP: KEY CREDIT HIGHLIGHTS II. H TRADING UPDATE A. MERCURY GROUP B. ICBPI GROUP C. MERCURY PAYMENTS & PROCESSING III. UPDATE ON CAPITAL AND LIQUIDITY 6

7 MERCURY GROUP S EVOLUTION SO FAR Transformation into a scale player, with an expanded presence, improved financials and enhanced growth prospects THEN NOW From established Italian player with a Popolari focused customer base......to one of the largest payments players in Europe with Leading positioning across the various segments of the payments value chain and more diversified customer base Strengthened set of capabilities that will improve services and customer proposition Enhanced growth prospects and value creation from synergies ICBPI Group 2015A EBITDA: 200m Significant Build-up of Scale and Capabilities Through Disciplined M&A Mercury Group Adjusted Pro Forma EBITDA: 459m 1 Cards Acquiring Acquisition of ICBPI by Advent, Bain and Clessidra Acquisition of DB s merchant acquiring business in Italy 2015 (Closed) 2016 (Closed) Q (Closed) Q (Closed) Acquisition of ISP s issuing and acquiring processing businesses Acquisition of MPS s merchant acquiring business Acquisition of payment business of Bassilichi Group Now called Mercury Payments and Processing MPS Acquiring Services Payments Source: Group information (management accounts) 1. LTM Q EBITDA for Mercury Group including pending acquisitions, refer to page 8 for additional details 7

8 EBITDA Margin FINANCIAL PROFILE Mercury Group Reported EBITDA and Other Key Financials ( m) ICBPI Group (Acquisition Completed in 2015) 29.4% % 261 New acquisitions 1 (Completed from Dec 16 to Jun 17) Mercury Group % MPS Acquiring Services 55.3% Mercury Payments and Processing % 37.4% 46.9% 41.5% LTM Q2 17 Net Income 105m LTM Q2 17 Adj. PF Profit % 280m 3 257m CET1 Ratio (as of Jun-2017) Excess Capital vs. 14% (as of Jun-2017) 2015 YE LTM Q3' YE LTM Q1'17 LTM Q2'17 LTM Q3' YE LTM Q1'17 LTM Q2'17 LTM Q3' YE LTM Q1'17 Mercury Group Including Pending Acquisitions LTM Q Adjusted Pro Forma EBITDA ( m) 5 LTM Q2'17 Adjusted Pro forma EBITDA 4 Reported Pro Forma EBITDA NOTE: adjusted pro forma EBITDA including pending acquisitions based on LTM Q figures and shown for illustrative purposes Source: Group information (management accounts). 1. Include Mercury Payments & Processing and MPS Acquiring 2. Mercury Payments & Processing included in the consolidation perimeter for the P&L figures of Mercury Group starting from Jan MPS Acquiring will be included in the consolidation perimeter for the P&L figures of Mercury Group starting from Jul Pro forma financial information for LTM Q3 16, 2016 YE, LTM Q1 17 and LTM Q2 17 based on management accounts presented to illustrate the effects of the mentioned acquisition on UK HoldCo's reported financial position and results of operations. Figures include income, expenses and other items as well as consolidation adjustments for the Group 3. Excess capital on a phased-in basis taking into account impact from capital distribution on thresholds for the calculation of the deductions related to equity investments in FSE 4. Calculated as pro forma normalised EBITDA / profit 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 40m of expected gross synergies ( 27m net of tax) with Mercury Payments & Processing, MPS Acquiring and DB Cards. Adjusted pro forma profit also adjusted for tax benefits due to equity investment and extraordinary revenue / costs and refers to profit available to Sponsors HoldCo 5. Includes expected contribution of pending acquisition (Bassilichi Payments) and related expected synergies 8

9 AGENDA I. MERCURY GROUP: KEY CREDIT HIGHLIGHTS II. H TRADING UPDATE A. MERCURY GROUP B. ICBPI GROUP C. MERCURY PAYMENTS & PROCESSING III. UPDATE ON CAPITAL AND LIQUIDITY 9

10 UPDATE ON MERCURY GROUP Spotlight on H Results Commentary on proforma financials Operating revenue for H increased by 22.6m vs. H1 2016, or 4.9%, driven by strong performance of ICBPI which saw improved performance across almost all reporting segments Stable performance for Mercury Payments & Processing vs. H1 2016, notwithstanding the negative one-off impacts stemming from the transfer of acquiring activity to Intesa Sanpaolo and the termination of Banca ITB acquiring contract at YE 2016 MPS Acquiring operating revenue increased by 0.9m in H1 2017, or 2.4%, net of one-off effect related to scheme fee change in H Operating costs excluding D&A for H decreased by 8.6m vs. H1 2016, or 2.9%, driven by reductions in non-payroll expenses EBITDA increased by 31.2m, or 18.5%, vs. H1 2016, and EBITDA margin increased by 4.7p.p. H proforma net profit at 25m, due to non-recurring items of (126)m LTM Q Results Breakdown 1 Consolidated Summary Financials ( m) 1 Key P&L Figures Proforma LTM Q Proforma H H1 17 vs. H1 16 Pro Forma (Y-o-Y) Unaudited consolidated H Operating Revenue 976m 484m +4.9% 445m EBITDA 405m 200m +18.5% 178m EBITDA Margin 41.5% 41.2% +4.7p.p. 40.0% Adjusted Pro forma EBITDA 2 457m n.a. n.a. n.a. Adjusted Pro forma EBITDA margin 46.9% n.a. n.a. n.a. Operating Revenue Breakdown 0.2% 8.6% 18.1% 73.1% EBITDA Breakdown 0.1% 11.5% 24.0% 64,4% Net Profit 105m 25m -84.4% 11m Adjusted Pro Forma Net Profit Available to 257m n.a. n.a. n.a. Sponsors HoldCo 2 Capital Position H Q LTM Q2 17 Operating revenue: 976m LTM Q2 17 EBITDA: 405m ICBPI Group MPS/MPSI 3 MPS Acq HoldCo / Consol. Adjustments 4 CET1 Rt. Phased-in 21.62% 23.18% Exc.Capital vs.14% 5 280m 330m Source: Group information (management accounts) 1. Mercury Payments & Processing included in the consolidation perimeter for the P&L figures of Mercury Group starting from Jan MPS Acquiring will be included in the consolidation perimeter for the P&L figures of Mercury Group starting from Jul Pro forma financial information for LTM Q2 17 based on management accounts presented to illustrate the effects of the mentioned acquisition on UK HoldCo's reported financial position and results of operations. Figures include income, expenses and other items as well as consolidation adjustments for the Group 2. Calculated as pro forma normalised EBITDA / profit 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 40m of expected gross synergies ( 27m net of tax) with Mercury Payments & Processing, MPS Acquiring and DB Cards. Adjusted pro forma profit also adjusted for tax benefits due to equity investment and extraordinary revenue / costs and refers to profit available to Sponsors HoldCo 3. Figures exclude income, expenses and other items at Latino level 4. Figures include income, expenses and other items at Latino and Mercury UK HoldCo level as well as consolidation adjustments for the Group 5. Excess capital on a phased-in basis taking into account impact from capital distribution on thresholds for the calculation of the deductions related to equity investments in FSE 10

11 UPDATE ON MERCURY GROUP (CONT D) Selected KPIs Combined Group Key Performance Indicators = Normalised Growth Rate 6 LTM Q Figures 1 H Figures ICBPI Group 2 Mercury Payments & Processing Total Mercury Group Total Mercury Group % Q2'17 vs. Q2'16 Issuing & Acquiring Managed cards (# - m) % Value of cards transactions ( bn) % o/w Issuing % o/w Acquiring % Managed transactions (# - m) 3 2,748 2,166 4,914 2, % o/w Issuing 1, ,144 1, % o/w Acquiring 1,493 1,277 2,770 1, % POS terminals (# - '000) ,218 1, % Managed ATM (#) 9,145 9,265 18,410 18, % +3.8% +7.1% +6.0% Payments Number of banking payment transactions (# - m) % Number of clearing transactions (# - m) % Number of e-banking workstations (# - '000) % Securities Services Depositary bank - AuM ( bn) % Global custody - AuM ( bn) % Value of brokerage negotiations ( bn) % Positive performance in terms of volumes and number of transactions across the main business segments of Mercury Group Source: Group information (management accounts) 1.LTM Q or June 2017 figures as applicable 2. Includes MPS Acquiring values 3. Includes debit, credit, charge and prepaid cards 4. Includes credit, charge and prepaid cards managed under the licensing model 5. Global Custody AuC includes most of the Depositary Bank AuM 6. Normalised % change for managed cards and value of transactions taking into account the clean-up of inactive pre-paid cards carried out by CartaSi in 2016 and the card outflow related to ISP 11

12 AGENDA I. MERCURY GROUP: KEY CREDIT HIGHLIGHTS II. H TRADING UPDATE A. MERCURY GROUP B. ICBPI GROUP C. MERCURY PAYMENTS & PROCESSING III. UPDATE ON CAPITAL AND LIQUIDITY 12

13 CartaSi Payments Securities Services BPO Services Other Group ICBPI Group UPDATE ON ICBPI GROUP Spotlight on H Results Commentary In H the ICBPI Group s performance continued to be strong, with its core business growing significantly on an EBITDA basis Operating revenue for H increased by 25.0m, or 7.5%, vs. H1 2016, driven by an increase of 18.9m in net fee and commission income and of 5.1m in net interest income Improved performance of CartaSi and Securities Services reporting segments, as a result of the increase across almost all KPIs and operating data The Payments reporting segment shows revenues consistent with H1 2016; BPO Services segment shows a lower net fee and commission income, mainly due to the run-off of the ICT Security and Internal Controls business line Operating costs excluding D&A for H decreased by 8.4m, or 3.6%, vs. H1 2016, mainly driven by efficiency initiatives EBITDA for H increased by 33.4m, or +34.3%, vs. H EBITDA margin increased by 7.3p.p. to 36.6% in H1 2017, reflecting the margin improvement across all Business Lines Net loss of 10m, due to extraordinary and non-recurring expenses of 117m for restructuring costs ( 81m), taxes on M&A operations ( 17m), one-off projects for transformation program ( 15m), investment write-down ( 3m) Operating Revenue ( m) EBITDA Margin EBITDA ( m) June YTD Results +7.5% +26.2% +6.5% June YTD Results 29.3% +7.3p.p. 36.6% % (12.3%) 6.1 LTM Results YE LTM Q2'17 LTM Results 33.0% 36.5% June YTD 2017 Figures Activities % % of Group Operating Revenue 68% 12% 10% 4% 6% 100% 2016 YE LTM Q2'17 Business Lines Other Group Activities (Treasury / Corporate Centre) % of Group EBITDA 75% 10% 7% 4% 4% 100% 13

14 UPDATE ON ICBPI GROUP (CONT D) Focus on Operating Expenses June YTD Operating Expenses (Excl. D&A, m) H1 17 vs. H1 16 (Y-o-Y growth) 70.7% 63.4% (7.3p.p.) (3.6%) Continued focus on efficiency enhancement, with visible cost base reduction achieved within a short timeframe (82.9%) +6.1% (5.0%) (11.0%) Significant reduction recorded vs. H with regards to production costs (-11.0%) and ICT costs (-5.0%) Other G&A impacts by having fully expensed yearly ordinary contribution to SRF in H % Payroll Production ICT Other GA Other 1 Cost / Income (Excl. D&A) FTE Evolution (#) 1,802 (27) 2015 YE "Natural Attrition" 17 (19) 18 (20) (5) 20 (16) 9 (5) 9 (65) FTEs Reduction 73 1,783 New Hirings H Completed the strategic enhancement of the ICBPI top management team, resulting in a strong leadership in place with proven execution capabilities Acquired new capabilities and talent across all business units, in particular focus on CVM, Digital and ICT Acceptance of restructuring plan by 326 employees (303 FTE) at 30-Jun Exit to be spread over next 2 years (275 employees or 254 FTE by 31-Dec-2017) Top Management Staff CIO Business OASI Source: Group information (management accounts) 1. Other includes: (i) net accruals to provisions for risks and charges and (ii) other net operating expenses / income 14

15 Acquiring & POS Business Issuing Business EVOLUTION OF ICBPI GROUP S KPIS Annual Figures CAGR LTM Q2 17 Half Yearly Figures H1 17 vs. H1 16 (Y-o-Y growth) Managed Cards¹ (# - m) % 6.3% (1.0%) +6.6% In H1 2017, the Issuing business registered a positive volume performance Value of Cards Transactions 2 ( bn) Managed Transactions 1 (# - m) Value of Cards Transactions 2 ( bn) Managed Transactions 1 (# - m) (2.5%) % % % (2.4%) % % % (3.8%) 5.1% +6.0% 11.5% (1.0%) 6.8% 9.6% Value of cards transactions and number of managed transactions registered increases vs. H of 5.1% (6.0% on a likefor-like basis) and 11.5%, respectively Number of managed cards for the Issuing business increased by 481k vs. Q The Acquiring business has also shown a solid growth with value of cards transactions and number of managed transactions increasing vs. H by 6.8% and 7.9%, respectively POS Terminals (# - 000) (1.5%) LTM Q % Number of POS terminals increasing vs. H of 3.2% = Normalised Growth Rate Source: Group information (managerial figures) 4 = Average Ticket ( ) 2 1. Includes charge, prepaid and credit cards 2. Includes credit, charge and prepaid cards managed under the licensing model 3. LTM Q or June 2017 figures 4. Normalised % change for the number of total cards for the Issuing Business based on adjusted figures for 2015 and Q1 2016, taking into account (i) the clean-up of inactive pre-paid cards carried out by CartaSi and (ii) the card outflow related to ISP. Normalised % change for the value of transactions for the Issuing Business based on adjusted figures for 2015 and Q1 2016, taking into account the outflow related to ISP. Normalised % change for the value of transactions for the Acquiring & POS Business based on adjusted figures for 2015, taking into account the outflow related to UniCredit 15

16 Securities Services Payments Other CartaSi Businesses EVOLUTION OF ICBPI GROUP S KPIS (CONT D) Annual Figures CAGR LTM Q2 17 Half Yearly Figures H1 17 vs. H1 16 (Y-o-Y growth) Debit Cards (# - m) % 0.6% Debit Cards Transactions 1 (# - m) Managed ATMs (#) Total Transactions 2 (# - m) E-Banking Work Stations (# - 000) 1,136 1,199 1, % 597 9,367 9,291 9,145 9,232 9,145 (1.6%) 1,186 1,418 1, % % % (0.9%) 10.5% 5.1% Improved performance Improved performance in debit card servicing in debit card servicing with a H volume with Q volume growth of 3.5% growth of 3.3% Strong performance of Strong performance of the Payments segment payments in terms of in terms of banking banking services and services and clearing clearing business, with business, with total total transactions transactions increasing increasing by 15.7% by 10.5% and number and number of e- of e-banking banking workstations workstations increasing increasing by 4.6% by 5.1% vs. H Increase in depositary Increase in depositary bank AuM (+9.7% vs. Q1 bank AuM (+7.6% vs. H1 2016), driving increase 2016) driving increase in global custody assets in global custody assets Depositary Bank AuM ( bn) % LTM Q % Source: Group information (managerial figures) 1. Includes issuing and acquiring businesses 2. Including banking payment and clearing transactions 3. LTM Q or June 2017 figures 16

17 ICBPI SEGMENTAL RESULTS CartaSi Commentary In H1 2017, CartaSi recorded an operating revenue increase of 19.1m (or 8.5%), primarily driven by increases in the number and value of cards transactions across issuing and acquiring and in managed POS All CartaSi segments recorded a revenue growth vs. H Card Issuing increased by 6.2m, or 6.3% Merchant Acquiring and POS Business increased by 10.6m, or 11.2% Other business units (debit services, ATM management and Help Line) increased by 2.2m, or 7.6% Operating costs excluding D&A for H decreased by 9.5m, or 6.2%, driven by efficiency initiatives which resulted in lower nonpayroll expenses CartaSi EBITDA recorded a growth of 28.5m in H1 2017, or 41.0% and an improvement in EBITDA margin of 9.3p.p. Selected Financials ( m) June YTD Results Operating Revenue LTM Results Selected KPIs Managed Cards 1 (# - m) June YTD Results Value of Cards Transactions 2 ( bn) EBITDA Credit Managed Transactions (# - m) 16.0 (1.0%) % % % Charge Cards Prepaid Credit Cards +7.1% , Card Issuing Card Acquiring 414 LTM Results Card Issuing = Normalised Growth Rate 3 Card Acquiring 31.2% +9.3p.p. 40.5% 36.4% 40.9% 67% 68% 68% 68% 71% 75% 75% 77% % % YE LTM Q2' YE LTM Q2'17 Source: Group information (management accounts) EBITDA Margin % of ICBPI Group Operating Revenue / EBITDA 1. Includes charge, prepaid and credit cards 2. Includes credit, charge and prepaid cards managed under the licensing model 3. Normalised % change for the number of total cards for the Issuing Business based on adjusted figures for Q1 2016, taking into account (i) the clean-up of inactive pre-paid cards carried out by CartaSi and (ii) the card outflow related to ISP. Normalised % change for the value of transactions for the Issuing Business based on adjusted figures for Q1 2016, taking into account the outflow related to ISP 17

18 ICBPI SEGMENTAL RESULTS (CONT D) Payments Commentary The Payments business shows growing KPIs vs. H Operating revenue decreased by 0.5m in H1 2017, or -1.1%, driven primarily by weakness of cheques and receivables business Operating costs excluding D&A for Q decreased by 2.1m, or 6.2%, driven by efficiency initiatives which resulted in lower nonpayroll expenses Payments business EBITDA recorded a growth of 1.6m in Q1 2017, or 14.3% and an improvement in EBITDA margin of 3.9p.p. Selected KPIs Total Transactions (# - m) E-Banking Workstations (# - 000) % % Banking Payment Trans. Clearing Transactions Selected Financials ( m) Operating Revenue EBITDA June YTD Results LTM Results June YTD Results LTM Results 24.9% +3.9 p.p. 28.8% 26.3% 28.1% 13% 12% 13% 13% 11% 10% 11% 10% % % YE LTM Q2' YE LTM Q2'17 EBITDA Margin % of ICBPI Group Operating Revenue / EBITDA Source: Group information (management accounts) 18

19 ICBPI SEGMENTAL RESULTS (CONT D) Securities Services Commentary In H the Securities Services business has recorded a strong growth in depositary bank AuM driven by Pension Funds and Mutual Funds Operating revenue increased by 2.9m in H1 2017, or 8.9%, driven primarily by an increase in the spread on deposits and by the average gross deposit volume growth Operating costs excluding D&A for H decreased by 0.5m, or 1.8%, driven by lower payroll costs and administrative expenses, due to efficiency initiatives Securities Services business EBITDA recorded a growth of 3.4m, or 59.9% and an improvement in EBITDA margin of 8.1p.p. Selected KPIs Depositary Bank Global Custody Value of Brokerage - AuM ( bn) 1 - AuC ( bn) 1 Negotiations ( bn) % % % 26.0 Selected Financials ( m) Operating Revenue EBITDA June YTD Results LTM Results June YTD Results LTM Results 17.4% +8.1p.p. 25.5% 19.7% 23.8% 10% 10% 10% 10% 6% 7% 6% 6% % % YE LTM Q2' YE LTM Q2'17 EBITDA Margin % of ICBPI Group Operating Revenue / EBITDA Source: Group information (management accounts) 1. Global Custody AuC includes most of the Depositary Bank AuM 19

20 ICBPI SEGMENTAL RESULTS (CONT D) BPO Services and Other Group Activities BPO Services Selected Financials ( m) Operating Revenue EBITDA June YTD Results LTM Results June YTD Results 27.8% +7.7p.p. 35.5% LTM Results 30.9% 34.8% 4% 4% 4% 4% 4% 4% 4% 4% (8.1%) +17.4% 2016 YE LTM Q2' YE LTM Q2'17 Other Group Activities Selected Financials 1 ( m) Operating Revenue EBITDA June YTD Results LTM Results June YTD Results LTM Results 5% 6% 5% 5% 7% 5% 5% 4% BPO Services Operating revenue decreased by 1.2m, or 8.1%, primarily due to the disposal of ICT Security and Internal Controls business line, which generated 2.4m of operating revenue in H1 2016; excluding discontinued activities revenue would have grown YoY by 1.2m (+10.5%) EBITDA recorded a growth of 0.7m, or 17.4% and an improvement in EBITDA margin of 7.7p.p. Other Group Activities 1 Operating revenue increased by 4.7m, or 26.2%, driven primarily by Treasury performance % (12.3%) YE LTM Q2'17 % of ICBPI Group Operating Revenue / EBITDA EBITDA Margin 2016 YE LTM Q2'17 Source: Group information (management accounts) 1. Other Group Activities include treasury activities, corporate centre and consolidation adjustments 20

21 AGENDA I. MERCURY GROUP: KEY CREDIT HIGHLIGHTS II. H TRADING UPDATE A. MERCURY GROUP B. ICBPI GROUP C. MERCURY PAYMENTS & PROCESSING III. UPDATE ON CAPITAL AND LIQUIDITY 21

22 UPDATE ON MERCURY PAYMENTS & PROCESSING Spotlight on H Results Commentary Mercury Payment Services 1 Operating revenue increased YoY by 0.5m, or 0.7%, driven by the increase in net fees and commissions increase, which was influenced by the transfer of acquiring activity to ISP (effective ) and by termination of the acquiring contract with Banca ITB by mutual agreement (from ) Operating Revenue ( m) H1 Results % (1.6%) 17.2 LTM Results EBITDA recorded a decrease of 0.1m, or 0.2%, and a reduction in EBITDA margin of 0.5p.p % Net profit of 22m, including gross extraordinary/non recurring costs 2 of 8m EBITDA ( m) 2016 YE LTM Q2'17 June YTD Results LTM Results Mercury Processing Services International EBITDA Margin 54.2% 54.5% +0.3p.p. EBITDA Margin 54.9% 55.1% Operating revenue decreased by 0.3m, or 1.6%, mainly due to less business advisory services provided % % EBITDA recorded an increase of 0.4m, or 11.7%, and an improvement in EBITDA margin of 2.9p.p. Net profit of 2.5m, increasing by 0.7m (or 36.0%) vs. H benefitting from higher EBITDA and lower D&A as a result of decreased depreciation of both software and hardware equipment 43.3 (0.2%) YE LTM Q2'17 Mercury Payment Services Mercury Processing Services International Source: Group information (management accounts) 1. H P&L figures consider the effects of perimeter changes and updated contracts with ISP from the exact time in which they occurred, while H P&L figures fully consider the effects of perimeter changes and updated contracts with ISP occurred in Non-recurring expenses in H were 7.9m and consisted of (i) a charge of 5.5m for one-off project costs for the transformation program initiated by the Sponsors, (ii) a charge of 1.8m for VAT costs of capitalized POS terminals due to mandatory requirements of the circuits, (iii) a charge of 0.7m for company restructuring 22

23 Debit Card Servicing & ATM Management Acquiring Processing & POS Business Issuing Processing Business EVOLUTION OF KPIS Mercury Payment Services & Mercury Processing Services International Managed Cards 1 (# - 000) Managed Transactions 2 (# - m) Managed Transactions 2 (# - m) POS Terminals (# - 000) Debit Cards ( # - 000) Debit Cards Transactions 3 (# - m) Managed ATMs (#) Annual Figures 5,034 4,976 5,112 4,982 5, ,402 9,958 10,333 9,730 10, ,500 6,649 Mercury Payment Services ,169 CAGR 2015 LTM Q % 19.5% 23.7% 15.2% % 6.2% 4,879 4,675 4, % 4,868 4, % 3.2% 6.7% Half Yearly Figures , ,169 H1 17 vs. H1 16 (Y-o-Y growth) 2.6% 21.6% 28.1% 13.4% 2.7% 11.0% Annual Figures On the issuing processing side, strong performance in terms of managed transactions for Mercury Payment Services, driven by the growing usage per managed card Mercury Payments Services number of managed transactions increased by 21.6% vs. H Mercury Processing Services International number of managed transactions decreased by 5.0% vs. H1 2016, due to continued reduction in number of managed cards (closing of non-active or nonperforming card accounts) Mercury Payment Services also recorded strong growth in terms of managed transactions on the acquiring processing side Mercury Payments Services number of managed transactions increased by 28.1% vs. H1 2016, mainly driven by the increasing number of POS (+ 13.4%) Mercury Processing Services International number of managed transactions decreased by 2.0% vs. H1 2016, improving trend on previous quarter Debit Cards volumes for Mercury Payments Services in terms of managed transactions increased by 2.7% vs. H while increasing 9.6% for Mercury Processing Services International LTM Q2 Q Q LTM Q2 Q Q Source: Group information (managerial figures) 1. Includes charge, prepaid and credit cards 2. Includes credit, charge, prepaid cards and international circuit 3. Figures for MPSI Debit Cards Transactions include also Other Transactions such as SMS messaging, Loyalty, Switching and Clearing & Settlement Transactions. 4. LTM Q or June 2017 figures CAGR 2015 LTM Q2 17 Half Yearly Figures 1,288 1,207 1,185 1,261 1, ,330 2,303 Mercury Processing Services International 2,096 (5.4%) 1.6% 0.3% % % (6.8%) 2,296 2,096 H1 17 vs. H1 16 (Y-o-Y growth) (6.1%) (5.0%) (2.0%) 0.6% 9.6% (8.7%) 23

24 AGENDA I. MERCURY GROUP: KEY CREDIT HIGHLIGHTS II. H TRADING UPDATE A. MERCURY GROUP B. ICBPI GROUP C. MERCURY PAYMENTS & PROCESSING III. UPDATE ON CAPITAL AND LIQUIDITY 24

25 CAPITAL ADEQUACY PROFILE Commentary Mercury UK HoldCo Capital Adequacy 1 CET1 Ratio Phased-in Strong capital adequacy profile for Mercury UK HoldCo as of Jun- 2017, with CET1 Ratio Phased-in of 21.62% (CET1 Ratio Fully- Loaded estimated at 21.63% based on figures as of Jun-2017) Substantial excess capital position (vs. CET1 Ratio target of 14%) of 280m as of Jun-2017 Decrease in CET1 Ratio Phased-in vs. Mar-2017 mainly due to (i) MPS Acquiring Services and DB Cards Acquiring acquisitions impact on CET1 Cap. and RWA and (ii) Mercury UK HoldCo capital increase of 485m Capital position of Mercury UK HoldCo expected to remain very solid post completion of the Bassilichi Payments acquisitions (completed on Jul-2017) Pro forma at 30-Jun-2017 CET1 Ratio Phased-in of 16.66% (or 18.92% incl. 99m of "cash overfund at Sponsors HoldCo level) Ratio fully reflecting the effects of (i) the MPS Acquiring Services and DB Cards Acquiring acquisition completed on Jun-2017 and (ii) 485m MUKH capital increase CET1 Cap. ( m) Reported capital ratios assume full deduction of accrued earnings, i.e. dividend payout ratio equal to 100% ( 43m for Q and 11m for H1 2017) 23.18% Reported Figures 2 (1.56%) Q Q Development 21.62% Q Pro Forma for Pending Acquisitions 3 (4.96%) Impact of M&A Transactions Pro forma capital ratio / excess capital assuming equity injection into Mercury UK HoldCo of 99m of Cash Overfund currently at Sponsors HoldCo level 18.92% 16.66% Q Pro Forma (Estimated) Pro forma at 30-Jun-2017 excess capital position (vs. CET1 Ratio target of 14%) of 108m (or 207m incl. 99m of "cash overfund at Sponsors HoldCo level) RWA ( m) 3,760 3,954 4,424 Excess Capital vs.14% (Phased-in) Excess Capital vs. 14% (Fully Loaded) NOTE: pro forma capital position of Mercury UK HoldCo presented to illustrate the effects of the Bassilichi Payments acquisitions (completed in Jul-2017); pro-forma CET1 Ratio Phased-in as of Jun-2017 calculated for illustrative purposes based on: (i) the reported figures for Mercury UK HoldCo as of Jun-2017 (which already reflect the effects on Mercury UK HoldCo's capital position of the acquisition of MPS Acquiring Services and DB Cards Acquiring, which were completed in Jun-2017) and (ii) the capital impacts related to the Bassilichi Payments acquisitions, estimated using unaudited financial information as of 30-Sep-2016 Source: Company Information 1. Based on prudential scope of consolidation 2. Reported figures do not take into account the impact of the Bassilichi Payments acquisitions (completed in Jul-2017) 3. Cumulative CET1 Ratio impact stemming from the Bassilichi Payments acquisitions (completed in Jul-2017) 4. Excess capital taking into account impact from capital distribution on thresholds for the calculation of the deductions related to equity investments in FSE 5. Calculated without applying the transitional provisions of CRD IV 25

26 2018 Cash Interest Payments 2017 Cash Interest Payments LIQUIDITY PROFILE Current Perimeter Memo: Net Profit Metrics Metric Amount ( m) Perimeter Reported H ICBPI + Mercury Payments & Processing Pro-forma LTM H1' ICBPI + Mercury Pay.&Pro. + MPS Acq. Adjusted PF LTM H1' ICBPI + Mercury Pay.&Pro. + MPS Acq. Key Dates Future Cash Interest Payments Source of Funds to Service Cash Interest Payments May-2017 Paid Nov m Total m Excess Capital (Fully Loaded) / "Cash Overfund" Total Available Funds for m 103m 206m 206m November 2017 cash interest payment for a total of 103m is more than fully covered by funds already available as of today Existing excess capital (fully loaded) and cash overfund at Sponsors HoldCo level for a total amount of 206m = 2017 cash interest payment May m Nov m Total m Residual Excess Capital Post 2017 Interest Payments Accrued Earnings (H1 2017) Residual Amount to Be Covered Total Required Funds for m 114m 71m 11m Already fully deducted from regulatory capital as of Jun (assuming 100% Payout Ratio) 71m 185m Equivalent to ~ 35m of earnings to be generated in each of the next two quarters, which will benefit from additional earnings from pending acquisitions after closing = Amount already available for cash interest payments for a total of 185m (both May and November) are covered at ca. 60% by funds already available as of today: Residual excess capital of 103m, post payment of 2017 cash interest expenses Accrued Q earnings of 11m (already fully deducted from the capital base) Residual amount to be covered for 2018 cash interest payments in the region of 71m, equivalent to approximately 35m of earnings to be generated in each of the next two quarters Additional flexibility to service the upcoming cash interest payments in light of 100m from Revolving Credit Facility which is currently undrawn Source: Group information 1. Pro forma financial information based on management accounts presented to illustrate the effects of the acquisition closed by the end of 30-Jun-2017 on UK HoldCo's reported financial position and results of operations. Figures include income, expenses and other items as well as consolidation adjustments for the Group 2. Calculated as adjusted pro forma profit for the period (net of minority equity interests and tax leakage) attributable to the owners of the parent adjusted for: extraordinary revenue/costs, 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 27m of expected net synergies with Mercury Payments & Processing, DB Cards and MPS Acquiring 26

27 27 APPENDIX ADDITIONAL MATERIALS

28 SPOTLIGHT ON MERCURY UK HOLDCO Selected Financial Information as of Jun-17 Pro Forma Selected Financial Information for Mercury UK HoldCo ( m, unless otherwise stated) LTM Q2'17 Selected P&L Information Pro forma total combined segment operating revenue Pro forma normalised EBITDA Pro forma normalized EBITDA margin % Adjusted pro forma EBITDA Adjusted pro forma EBITDA margin % Proforma profit for the period attributable to the owners of the parent Adjusted pro forma profit Adjusted pro forma profit available to HoldCo Selected Debt Information Net financial debt 2.2bn 5 Pro forma cash interest expense Ratio of pro forma net financial debt to adjusted pro forma EBITDA 4.8x Ratio of adjusted pro forma EBITDA to pro forma cash interest expense 2.5x Ratio of adjusted pro forma profit available to Sponsors' HoldCo to pro forma cash interest e 1.5x Selected Capital Information CET1 Capital Ratio 21.62% 6 Commentary Based on LTM Q managerial figures, pro forma normalised EBITDA of 405m for the combined platform with ICBPI Group, MPS Acquiring and Mercury Payments & Processing Adjusted pro forma EBITDA (incl. 40.5m of expected synergies with Mercury Payments & Processing, DB Cards and MPS Acquiring) of 457m 2 Adjusted pro forma profit available to Sponsors' HoldCo (net of minority and tax leakage) equal to 257m 4 Net financial debt of 2.2bn, net of 99m of cash overfund Common Equity Tier 1 (CET1) ratio equal to 21.6% 6 as of 30 th June 2017 NOTE: pro forma financial information based on management accounts presented to illustrate the effects of the acquisition of Mercury Payments & Processing, DB Cards and MPS Acquiring on UK HoldCo's reported financial position and results of operations for the twelve months period ending 30 June 2017 (figures do not take into account the impacts of the Bassilichi Payments acquisition closed in Jul-2017, apart from net financial debt and interest expense) Source: Group information (management accounts) 1. Excluding D&A and non-recurring/extraordinary items 2. 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 40m of expected gross synergies with Mercury Payments & Processing, DB Cards and MPS Acquiring; figure not taking into account the impacts of the Bassilichi Payments acquisitions (completed in Jul-2017) 3. Calculated as pro forma profit for the period attributable to the owners of the parent adjusted for: extraordinary revenue/costs, 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 27m of expected net synergies with Mercury Payments & Processing, DB Cards and MPS Acquiring; figure not taking into account the impacts of the Bassilichi Payments acquisitions (completed in Jul-2017) 4. Calculated as adjusted pro forma profit net of minority equity interests and tax leakage 5. Net financial debt defined as gross financial debt of the Sponsors HoldCos of 2.3bn minus cash at the Issuer and/or the Sponsors HoldCos 6. Figure not taking into account the impacts of the Bassilichi Payments acquisitions (completed in Jul-2017) 28