Investor Day 2021 Cerved Group - March 26, 2021 - Cerved Company
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Investor Day 2021 Cerved Group March 26, 2021
Agenda
1. Introduction by the Chairman (G. De Bernardis – Executive Chairman)
2. Cerved investment case (A. Mignanelli - CEO)
3. Cerved for Italy (A. Mignanelli - CEO)
4. Data intelligence (A. Mignanelli - CEO)
− Offering
− Channels
5. Credit management (A. Mignanelli - CEO)
6. Talents, technology, sustainability (A. Mignanelli – CEO)
7. Financials & strategic outlook 2021-2023 (E. Bona – CFO)
A brief overview of Cerved’s history
Institutional ownership Private equity ownership Public ownership
1974 2009 2014 2021
SPIN-OFF SECOND LBO
100% FREE
BY INFOCAMERE FLOAT
Italian banks Public company
INCEPTION FIRST LBO IPO TODAY
1995 2013 2015
Cerved history and governance reinforce its institutional role and fully independent positioning 3
A success story documented by our 1st and 2nd Investor Days
Since its IPO in June 2014 Cerved has been a success story of resilience, growth and cash
flow resulting in its shares almost doubling over the period
1 s t an d 2 nd
I n v e stor D a y s
in 2016 and 2018
2020 Revenues €488m, +47% from 2014 Share price +86% since June 2014 IPO of €5,1
2020 Adj. EBITDA €204m, +27% from 2014 €242m dividends paid out 2015-2019
4
Now gearing up for the next phase with our 3rd Investor Day
Cerved is setting its strategy and financial targets until 2023, with a refocus on Data
Intelligence, and an ambitious set of targets for the medium term
3 r d I n v e s tor D a y
2 6 M a rch 2 0 2 1
a Post Covid recovery outlook
a Strategic refocus on data business
a Focus on organization and execution
5
Assessing strategic alternatives for Credit Management to refocus on DAT
Credit Management has been an Refocus on the core Data Additional firepower to create
outstanding success story for Intelligence businesses, capitalising shareholder value via M&A and
Cerved since 2011 unique market and competitive dividend strategies in line with
strengths track record
The performance of Credit Since mid-2018 Cerved has The disposal would create
Management has been been assessing strategic Italy’s leading player in DAT
strong since the IPO, options for the Credit benefiting from outstanding
c r e a t i n g t h e 2 nd l a r g e s t Management division in cash generation capabilities
Italian player and order to focus on Data, at the service of M&A and
multiplying revenues, Te c h n o l o g i e s a n d A n a l y t i c s dividend policies
EBITDA and AUM by 3x-4x
CM 2014
2014 2020
2020 x x
Cerved Since IPO
Revenues €m 53,3 152,3 2,9x M&A Deals 18
Adj. EBITDA €m 11,2 46,8 4,2x M&A Cash Outflow €m 288
Adj. EBITDA margin 21% 31% Dividends & Buybacks €m 272
AUM €bn 10,3 41,7 4,0x Dividend Yield 2015-2019 3,5%
6
With sustainability at the core to protect from risk and to grow
IDENTITY OFFERING
Our Purpose
We help the country to protect
We help the country to protect
itself from risk and to grow in a ESG ESG
itself from risk and to grow in a commitment solutions
sustainable way
sustainable way
We do it by putting data, technology Client 100%
We do it by putting data, technology Public
and talent at the service of people, satisfaction company
and talent at the service of people,
businesses, banks and institutions
businesses, banks and institutions
People &
talent
7
Prospected voluntary public tender offer
Cerved Group SpA received a prospective voluntary tender offer from Castor Srl on 8 March 2021
The offer was unsolicited and unexpected
The Board of Directors is currently evaluating the relevant terms and conditions of the offer
It will provide all the information useful for the Company’s shareholders to properly evaluate the offer under the
Statement of the Board of Directors to be published by the trading day before the beginning of the tender period
UBS and Mediobanca have been appointed as financial advisers as well as BonelliErede and Carbonetti as legal advisers
Determinations on distribution of part of available reserves
The conditions of the offer explicitly refer to the absence of distribution of reserves and extraordinary dividends
Therefore the Board of Directors took the view that a different determination in this respect could have immediately
resulted in an interference in the execution of the Offer or in the termination of the effectiveness of the Offer and, in
any event, in a possible decrease in the price of the Offer
The Board of Directors will evaluate the opportunity to propose to distribute part of the available reserves over the
next few months, taking into account the scenario and the outcome of the offer
Impact of the offer on Cerved’s day-to-day business activities
No adverse affect Cerved’s day-to-day business activities
The Board of Directors and management are conducting the business in the ordinary course, in the best interest of
Cerved, its shareholders and stakeholders and with the utmost attention for, and in strict compliance with, applicable
laws and regulations
8
Prospected voluntary public tender offer (continued)
Extraordinary transactions at subsidiaries’ level – Credit Management division
The Board of Directors has not yet assumed any final decision on the potential sale of the Credit Management division
The Company has already commented on the rumors (press release dated 7 March 2021)
The Company will provide any update in accordance with the applicable laws and regulations
Publication of the Strategic Outlook 2021-2023
The Strategic Outlook 2021-2023 represents the outcome of a process started before the launch of the offer
The date of the Investor Day was announced with the 2020 preliminary results on February 2021
Therefore, it could not be in any way intended as an act to hinder or undermine the offer
The Strategic Outlook 2021-2023 does not factorize any potential tender offer and change in the ownership
structure of Cerved
Today’s focus is on the Cerved Group stand-alone without any consideration nor impact from the prospected voluntary public
tender offer
In this respect the Q&A session will not address any questions related to such voluntary public tender offer
9
Agenda
1. Introduction by the Chairman (G. De Bernardis – Executive Chairman)
2. Cerved investment case (A. Mignanelli - CEO)
3. Cerved for Italy (A. Mignanelli - CEO)
4. Data intelligence (A. Mignanelli - CEO)
− Offering
− Channels
5. Credit management (A. Mignanelli - CEO)
6. Talents, technology, sustainability (A. Mignanelli – CEO)
7. Financials & strategic outlook 2021-2023 (E. Bona – CFO)Market leader in Italy in Data Intelligence
Data intelligence Credit management
Risk intelligence Marketing intelligence
Credit risk Market & sales intelligence Banking UTP & NPL
Credit & ESG Ratings Digital marketing Corporate receivables
Real estate Advanced analytics Credit operations
Regulatory & compliance Legal services
Revenues 2020: €274.3m Adi. EBITDA: €139.2m Revenues 2020: €59.7m Adi. EBITDA: €16.1m Revenues 2020: €152.3m Adi. EBITDA: €46.8m
Cagr 14–19: +1.4% Adj. EBITDA %: 50.7% Cagr 14–19: + 28.3% Adj. EBITDA %: + 27.0% Cagr 14–19: + 28.3% Adj. EBITDA %: 30.7%
Customer Customer Customer
% of Sales Mkt share % of Sales Mkt share % of Sales Mkt share
satisfaction satisfaction satisfaction
56% >37% 92% 12%Cerved is a public company with a consistent track record of results
Not restated
Revenues (€m) Adj. EBITDA (€m) IFRS 9, 15, 16
CAGR +9.5% -6.3% CAGR +8.1% 14.0%
458 521 4881 2 2132 237 204
331 353 377 394 160 171 180 186
2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020
Note: 1) Includes €1.5m of capital gain deriving from the sale of the Turin real estate property Note: 2)2017 and 2018 restated; 2017 Adj. EBITDA includes €4.0m adjustment for IFRS 16
Operating cash flow (€m) Revenues vs. GDP
IPO CV19 CAGR YoY
CAGR +4.3% -12.4% Subprime crisis Sovereign ‘08-’19 ‘19-’20
Financialcollapse debt crisis
Revenues + 7.2% (6.3)%
126 136 144 143 160 158 139
Italian GDP3 (0.3)% (8,9)%
2014 2015 2016 2017 2018 2019 2020 08 09 10 11 12 13 14 15 16 17 18 19 20
Div. Yield 4.4% 3.6% 3.4% 2.8% 3.3%
Note: 3) Italian GDP (volume change - linked to reference year 2015). Source: ISTAT, Mar-21
Resilient business model with a balanced mix of a-cyclical, cyclical and anti-cyclical components 12Bolt-on M&A has always had a key role in Cerved’s strategy
Cerved has a consolidated track record in delivering accretive M&A transactions in its core business areas as
well as in adjacencies
Since IPO:
#19 deals in 7 years
>230 €m acquisitions in terms of enterprise value
(NPL servicing platform)
(joint venture)
(NPL servicing platform)
(NPL servicing
(NPL servicing platform) platform)
CPS
50% 100% 100% 51% 100% 100% 100%
2014 13 2015 2016 2017 2018 2019 2020
#3 #1 #4 #1 #5 #4 #2
13ESG identity and enabler for Italian sustainability transition
ESG identity in line with best practice ESG offering: enabler for the Italian sustainability transition
Strong Foster transparency in the system with
commitment Independent ESG ratings and assessment
Supply chain ESG platform
Top quality ratings
ESG targets in STI Help companies to change Share ESG landscape
in a positive and sustainable view and understanding
Clear roadmap way
ESG ratings on Cerved
Top management
remuneration linked to
ESG targets reflecting
selected SDGs
14Attractive investment case
Best practice public company Unique data set and technologies
A public company with top quality Unique data ecosystem
investor base 6 1 Proprietary scores & algorithms
Best in class corporate governance State-of-the-arts technologies to manage
and analyse data
M&A track record Growth opportunities in data & analytics
5 2
Consolidated track record in accretive M&A Evolve towards new types of
Focus on both core business and adjacencies Risk Intelligence
Ample firepower from capital structure Surf the fast growing Marketing
Intelligence wave
4 3
Strong cash flows and returns Favorable macro trends
Solid capital structure, consistently in the 3x area Cerved positioned to capture favourable
Strong and resilient cash conversion megatrends and macrotrends
Dividend yield has averaged at 3.5% from 2015 to ESG themes moving to the top of the
2019 agenda
151
Unique data ecosystem
Official Chambers of Commerce data Other official data
Financial statements Chamber of Commerce Insolv. proceedings Real Estate Detrimental acts Ownership Workers &
19,9m – from 1984 reports 2,7m (bankruptcy, ❨Registry❨ ❨Registry❨ ❨CONSOB❨ employees
15,1m valid reports liquidation…) 123m real estate 0,9m valid records Owners and shares ❨INPS❨
registered, >95% associated with 774K related to limited 4,9m companies with
National coverage subjects companies # of workers, job
Protests Ownership Corporate members (estimate) detail and type of
0,65m valid ID records 10,8m list owners report 11m owners and managers links
contract
Proprietary data Open data
PayLine Territorial data Beneficial owners Public tenders Public financing Government aid
63m payment experiences on 2,3m +2k Data & Concentration Index 3,8m beneficial owners Opened, closed, winners: 19,6m 1,1m European national register
companies based on Census cells (until 17° level of analysis) (ANAC) and 370K Italian 2,2m aid in 2020
Industries Unregistered Relationships Company groups ISTAT & BANKIT Public Administration Start-up register
32% of Italian economic activities 152m between all 256K Italian groups Statistical (134 variables) and 21,2K public entities and 14,8K (Infocamere)
companies revised (2,2 m) economics subject financial analysis subsidiaries 10K registered start-ups
Web and social data Clients
Partnerships
News Corporate websites Web pages
70K analyzed daily 1,2m Italian corporate websites 500m analyzed weekly Experian Real estate appraisal
Credit Bureau 100K appraisals in 2020 (400K in
the last 5 years)
Enrichment
Social feeds Corporate social pages with
90K analyzed daily 750K social references Client’s data
> 40 years of time series and + 600k business rules to qualify and correlate the dataset 16Cerved’s proprietary scores are the market benchmarks
The biggest data graph in Italy
Proprietary scores & algorithms providing deep connections among
Cerved Group companies, people and real estate
Benchmark credit risk score available on 3 million companies
Score (CGS)
Credit rating Certified ECAI & Rating Tool for solicited and unsolicited ratings
11 million
ESG rating Proprietary methodology to assign ESG ratings and scorres people 8 million
Environmental companies1
Proprietary score based on hydrogeological data of the territory
risk score
Payline score Proprietary payment bureau tracking 63m payment experiences
Open banking
AI-based risk score on SMEs & Individuals via checking account data
(PSD2) score
Collection score Algorithms that assess and prioritize collection of credit portfolios
Real Estate
Proprietary automated valuation model to assess Real Estate values
valuation model
Anti-fraud Score Graph-technology powered score integrated with Credit Bureau 152 million
123 million real
relationships
Growth Score Proprietary score using inter alia companies digital capabilities estate assets
ECAI = External Credit Assessment Institutions; AI = Artificial Intelligence
Note: 1) Including 2,2 Mln Unregistred economics activities
17Natural Language Processing
State-of-the-art technologies
Insight
Graph database: tool for the analysis and Natural language processing concerns the
Data representation of relationships between querying of databases and returning of
visualisation individuals and companies generated results in visual format
Cognitive
ergonomics
Cyber security & encryption: algorithms Blockchain to improve 100% GDPR and
Data usability service design
based on cutting edge methodologies and «notarization» processes compliant
& security Multi Factor Authentication architecture applied to
company’s
processes and
Semantic Platform products
Artificial Intelligence: comprehensive application which exploits
text with >100
Machine & Deep Learning algorithms and technologies (i.e.
Data analytics xgboost, neural network, tensorflow) for data elaboration and analytics APIs
decision-making processes engine to
extract Digital
value from Invoicing
>1.1 >1.000 600m >EUR 40m Data lake algorithms
non
PetaByte Servers events data partitions to read and
Data lake of stored (physical monitored purchased for clients
structured
data certify
data and virtual) annually every year invoices
Raw data Technology Business
API = Application Programming Interface 18Strategy evolution
European
DAT player
Growth path
repositioning Export data intelligence technology,
platforms and algorithms
Diversify the product offering
towards Risk Intelligence and Evolve product offering and IT
Marketing Intelligence architecture to fully move into ‘‘Data
as a Service’’ model
Performance Expand the customer base by number
excellence and segments (Small & Micro
business)
Achieved strong growth in Credit Develop selective international
Management presence
Defended market share and Divest from Credit Management and
profitability on Credit Info refocus resources on Data Intelligence
Acquired new technology and skills to
play in fast growing markets
2014 - 2020 2021 - 2023 2024 - onwards
DAT = Data, Analytics and Technologies 19Cerved strategy
Business strategy M&A strategy
Business
units Risk Marketing
Intelligence Intelligence
Market
segments
- DAT accretive -
Financial
Institutions UPSELL CROSS-SELL - SW driven -
ESG Market Intelligence
Corporate Regulatory/AML Sales Intelligence
TOP/Large - European focus -
Corporate
EXPAND Assessing exit options for
More medium clients Credit Management
SMEs/Micro
Enter small clients segment
DAT = Data, Analytics and Technologies; SW = Software 20Offering evolution
From Risk Management Growth Services
To Risk Intelligence Marketing Intelligence
Move from credit risk to other types of Leverage a unique data ecosystem to boost
risk intelligence: marketing intelligence:
Business
Anti-Money Laundering Market & Sales Intelligence
unit
strategy Anti-fraud Digital Marketing
Regulatory risk Advanced Analytics
Real Estate risk
ESG risk
Data
Analytics
Technologies
21Channels evolution
Financial institutions Corporates
Large
Advisery/ Multi-specialist
Productive external
Medium network
Small Phygital
22Data Intelligence growth strategy
Business unit Service lines
Historical positioning
Recent development
EXPAND
Customer base with dedicated offering and
Target positioning
go-to-market
Credit Risk
RISK INTELLIGENCE Credit & ESG ratings UPSELL
Real Estate Non credit risk services
leveraging BI leadership
Reg & Compliance
Market Intelligence
MARKETING Sales Intelligence X-SELL
INTELLIGENCE Digital Marketing Exploiting scalable and
modular based platforms
Advanced Analytics
Banking UTP & NPLs
CREDIT Corporate Receivables Leverage high performance
organization and diversified
MANAGEMENT Legal Services business model
Credit Operations
LARGE MEDIUM SMALL
BI = Business Information 23M&A strategy
From.. …to …to
Both Data Intelligence and Credit Focus on Data Intelligence: data, analytics and technology-
Management driven in adjacent segments
Only Italy Mainly Italy with gradual expansion in other
European countries
Low multiples and growing in line with Higher multiples growing faster than core business
core business
24Ready for a new season of high quality M&A and international expansion
Client needs Rationale for Cerved
Entry point to deliver Cerved offering to small
businesses
ERP New data sources for credit monitoring and
Attributes of M&A targets marketing insights
DAT Increase high quality Risk & Expand current sales intelligence platform
Marketing data and analytics to Sales Access to new market / new data (e.g.,
accretive
exploit synergies with current georgraphy and alternative data)
+ data set
Increase analytical power of current
Software Invest in scalable platforms for Procurement procurement platorms with Cerved DAT
driven complementary / adjacent use cases Entry point for «supply chain finance» solutions
+ Reg &
Completing Cerved KYC/digital onboarding
Expand from “Italy Only” to offering
European Compliance Leveraging on PSD2/open banking capabilities
European corporate development
focus strategy (detailed in the
following slide) Entering the fast growing digital learning
market
Getting ready for a new season of high Learning Increasing penetration of smaller customer
quality and high value added M&A segment
DAT = Data, Analytics and Technologies; ERP = Enterprise Resource Planning 25International corporate development: execution guidelines
Expand the most exportable & distinctive businesses / technologies
Objectives
Quickly and profitably enter as many EU countries as possible
Service line to grow internationally Guidelines
Credit Ratings #1 ECAI provider Light distribution and delivery model
Intelligence
No champions in EU for SMEs
Exportable (ESMA) License & Methodology Progressive expansion country by country,
Risk
with a clear roadmap
ESG Fast-growing & fragmented market
Ratings
Exportable Methodology Comprehensive data model and data sourcing
strategy for service lines simultaneous
expansion
Sales #1 in ITA
Define a country-specific entry strategy
Intelligence
Intelligence No champions in EU
Marketing
Scalable platform and technologies
Organic vs. M&A (based on opportunities
Market available)
Intelligence Pull from Sales Intelligence (Atoka)
Scalable platform and technologies Data sourcing maps
ECAI = External Credit Assessment Institutions; ESMA = European Securities and Markets Authority 26Strategic outlook 2021-2023
Guidance
Risk Intelligence Low single digit
Corporates: Mid single digit - Financial Institutions: Stable
Divisional organic
revenues Marketing Intelligence Low double digit
(CAGR’20-’23)
Total Data Intelligence Mid single digit
Credit Management High single digit
Revenues 5% - 7%
Consolidated
organic growth Adjusted EBITDA 5% - 7%
(CAGR’20-’23)
Operating Cash Flows 75%-80% cash conversion by 2023
Growth from M&A Adjusted EBITDA
(CAGR’20-’23) 2.0% - 3.5%
from bolt-on M&A
Consolidated organic + Total Adjusted EBITDA 7.0% - 10.5%
M&A growth
(CAGR ’20-’23)
Leverage Target Long-term target of 3.0x Adjusted EBITDA, save for M&A and non-recurring events
Capital Structure Dividend equal to 40%-50% payout of consolidated profits, coupled with variable
Dividend Policy additional dividend/ buybacks, subject to M&A
27Agenda
1. Introduction by the Chairman (G. De Bernardis – Executive Chairman)
2. Cerved investment case (A. Mignanelli - CEO)
3. Cerved for Italy (A. Mignanelli - CEO)
4. Data intelligence (A. Mignanelli - CEO)
− Offering
− Channels
5. Credit management (A. Mignanelli - CEO)
6. Talents, technology, sustainability (A. Mignanelli – CEO)
7. Financials & strategic outlook 2021-2023 (E. Bona – CFO)Our purpose
We help the country to protect itself from
risk and to grow sustainably
We do it by putting data, technology and talent at the service of
people, businesses, banks and institutionsCerved is the reference point for institutions on the Italian economy
We watch the economy from a vantage point Our customers
Rating Agency certified 95% Primary
by ESMA A+ of Italian institutions
Banks using our data Key observer on SMEs for
periodic consultations provided
by article IV (Country
The most comprehensive dataset Surveillance)
on Italian companies, stakeholders
and real estate assets
30k
companies1
Provider of data on
bankruptcy procedures
The biggest Payments Bureau and companies’ Provider of synthetic indicator of
in Italy (Payline) payment periods the risk faced by companies
and FIs
+150 Provider of data on
The biggest independent NPL Public bankruptcy procedures and
Authorities companies’ payment periods
service provider in Italy
ESMA = European Securities and Markets Authority 30
Note: 1) Including Micro companies with purchases on Cervedirect.comCapability of capturing favourable megatrends and macrotrends
TREND
Digital Green Finance & Structural
transition transition new normal reforms
Post-Covid restructuring Italy needs structural reforms to
Zero CO2 emission in EU in
Increase in use of data corporate sector boost growth
2050
DRIVER
Technology trends in AI & ML NPE increase and a larger Many structural reforms
Green finance & green
45€bn from Recovery Fund regulation European market favourable to Cerved:
Reforms to boost the digital 209€bn from the Recovery Bankruptcy reform
Customer preferences
transition Fund Digitalisation of courts
67€bn from the Recovery Fund Institutional investments in SMEs
IMPACT
Cerved is an enabler of SMEs Cerved ESG scores and ratings Cerved can support banks and Structural reforms expected in
digital capabilities and expected to be widely used by institutions to address finance Italy to boost growth for
strongly benefits from firms’ SME, corporations, banks and towards the most productive Cerved and open markets in
digitalization institutional investors firms and to dispose of NPE which Cerved is a key player
AI = Artificial Intelligence; ML = Machine Learning; NPE = Non Performing Exposures 31Digital Green Finance & Structural
transition transition New Normal reforms
Digital & green transitions
Higher digitalization of Italian firms can boost Cerved market ESG tools expected to be widely used in the Italian economy and
penetration and growth sustainability is part of the Cerved strategy
Cerved mkt penetration by companies’ Digital Score1 by size Average probability of default by ESG score Seismic hazard map of Sicily
Cerved On 200 Italian firms with non financial report expected earthquake intensity in 50 years
Digital Score penetration 43%
low 1,0%
32%
medium 5,1% 26% 3.37%
high 9,5% 19% 2.35%
16%
10% 10% 1.15%
7%
1% 2% 3%
0%
ESG ESG low ESG medium ESG high
micro small medium large score (65.64)
Recovery Fund and technology trends expected to strongly increase Boom in green finance and forthcoming regulation: tools to
the digital capabilities of Italian firms measure ESG performance needed
45€bn from Recovery Fund 67€bn from Recovery Fund
Cerved matches PA goals and digitalized firms in Industry 4.0 like New opportunities in adjacent markets (carbon credit register,
incentive schemes (subsidized finance solutions) white certifications, etc.)
A digital academy to support digitalization of SMEs and PA
Cerved becoming the enabler of the Italian digital transition leveraging on Cerved ESG scores, ratings and tools expected to be mission
its comprehensive offering covering the whole Mktg Intelligence cycle critical for SME, corporations, banks and institutional investors
PA = Public Administration
Note: 1) Digital score is a Cerved proprietary score based on machine learning information used to estimate the digital capability of Italian firms;
32Digital Green Finance & Structural
transition transition New Normal reforms
New normal & structural reforms
In the new normal Cerved will support financial institutions to address Structural reforms open markets in which Cerved is a key player
finance to the most productive firms
How to address public intervention in finance: # of firms with public guarantees from the
Fondo Centrale di Garanzia, pre- and post- Covid
Digital public services index1
post-Covid default risk 16 IT
Safe Vulnerable Risky 14 €11,5bn for digital
pre-Covid default risk
12 transformation in
308k 182k 9.3k
Safe
safe impacted impacted
10 Public Administration
8 can help Cerved
284k 181k 6
Vulnerable
non-impacted zombie light increase market
4
2 penetration in PA
81k
Risky 0
zombie
Cerved can support the government to select zombie firms and
economic sustainable firms
Draghi G30 report: finance economic viable firms with equity and/or Bankruptcy reform will incentive credit-risk forward looking
lending, let zombies out of the market methodologies among SMEs
Forthcoming €209bn from Recovery Fund open opportunities in EBA guidelines on LOM (Loan Origination and Monitoring) requires
subsidized finance banks to implement forward looking analyses
60-100bn of NPE expected as a consequence of Covid-19 also
following calendar provisioning and stricter regulation
Cerved information key to support policy makers and banks to Cerved solutions in bankruptcy reform coherent with LOM supporting
address finance to the most productive firms both SMEs and banks (Fw, Alert System, Treasury Management Tool)
PA = Public Administration; EBA = European Banking Authority; FW = Forward Looking
Source: 1) Digital Economy and Society Index (DESI) - European Commission file:///C:/Users/cg12612/Desktop/DESI2020Thematicchapters-Digitalpublicservices.pdf 33Agenda
1. Introduction by the Chairman (G. De Bernardis – Executive Chairman)
2. Cerved investment case (A. Mignanelli - CEO)
3. Cerved for Italy (A. Mignanelli - CEO)
4. Data intelligence (A. Mignanelli - CEO)
− Offering
− Channels
5. Credit management (A. Mignanelli - CEO)
6. Talents, technology, sustainability (A. Mignanelli – CEO)
7. Financials & strategic outlook 2021-2023 (E. Bona – CFO)Offering evolution – Data intelligence
Next slides focus
From Risk Management Growth Services
To Risk Intelligence Marketing Intelligence
Move from credit risk to other types of Leverage a unique data ecosystem to boost
Business risk intelligence: marketing intelligence:
unit
Anti-money laundering Market & sales intelligence
strategy
Anti-fraud Digital marketing
Regulatory risk Advanced analytics
Real estate risk
ESG risk
Data
Analytics
Technologies
35The Risk Intelligence market includes fast growing adjacent segments
Target markets (€m) & Cerved market share Market trends
€bn
CAGR Stable trends in Credit Information:
+17% ‒ Pressure on pricing on standard products
CAGR 1.8 ‒ Increased attention on risk management due to
+6% CAGR higher uncertainty post Covid19
20-23E
1.1 1.1 ‒ Evolution of credit risk assessment logic
1.0 1.0
+34% ‒ Digitalization of products and better UX
0.3 0.4 0.4
Strong growth in Adjacent Risks:
0.7 0.8 0.7 0.8 +2%
‒ Open banking, although early stage
2017 ‒ Higher money laundering & frauds risks due to
2019 2020 2023E
Credit info Adjacent risks
increasing digital interactions
‒ State higher activism with stronger regulations
Cerved mkt share 2019 >37% (e.g. for SMEs)
Source: Cerved Analysis 36Risk Intelligence: low single digit growth expected from 2021 to 2023
Service line Historical trends
2017 2018 2019 2020 CAGR YOY
Revenues (€m) 17-19 19-20 Overall stable performance from 2017 to
90 88 2020, with contraction of Credit Risk
FIs
83 86 -4% 4%
Credit Risk1
segment
A
Corp 143 145 149 Strong Covid-19 impact on Credit Risk for
134 2% -10%
corporate clients in 2020
+
Credit & 7 8 8 8 Growth in Regulatory & Compliance
B ESG Rating 1% 10% benefiting from cross-selling
+ Outlook 2021-2023
Real
C
Estate 35 40 40 32 7% Low single digit growth
-21%
+ Managing pricing pressure by delivering
Reg & 15
D 5 high value services
Compliance 1 2 163% 202%
= Product development on new risks
Risk Products & platforms for medium and
Intelligence 282 284 1.4% -3.5%
276 274 small clients
Note: 1) Credit Risk includes Business Information & Risk Analytics 37A
Credit Risk: market leader with numerous growth opportunities
Business Information Risk Analytics Growth drivers
Business Information platforms Score development Pressure on pricing of data proving and
Cerved Credit Suite for CeBi Convention (standard for
Product
corporates banks’ financial data
standard reports
Silos platform for banks reclassification)
Customized solutions w/APIs Risk analytics consulting
Increased appetite for risk management
products prompted by higher
transactions uncertainty
Unique data ecosystem Market standard products for
Product development to address
Competitive
advantage
Leading technology and credit assessment services
industrialized operations enabling Embedded within bank credit changes in customer needs
market leading SLAs processes
Capabilities c. 200+ analysts, Capabilities of c. 20+ data Regulatory push towards credit risk re-
marketing, product specialists scientists design to integrate forward looking
metrics and alternative data (e.g., PSD2)
Financial Institutions Corporates and Artificial Intelligence
Market. share
Market
High customer penetration and lock-in
>80% 5-7x RMS >45% through risk projects for top clients
2.5x RMS
leveraging data scientists (CeBi) and MBS
API = Application Programming Interface; SLAs = Service Level Agreement (equal to 99.77% uptime for Cerved Credit Suite and 99.96% uptime for Silos); AI = Artificial Intelligence; RMS = Relative Market Share
Source: Cerved analysis
38A
Unique installed base of platforms for credit risk management
Financial institutions Corporates
SILOS CERVED Portfolio analysis
CREDIT CREDIT
DESK SUITE Payment Bureau
16k clients
C Management
Portfolio
600 clients c.50% market
>80% market share share
Full set of platforms to support the entire
credit process Collection Services
Specialized vertical platforms for financial
Decisioning
and sector deep analysis
Best-in-class platform to support commercial credit process
Complete integrated monitoring service on
MONDO any credit position changes 63m payment experiences on 2,5m companies
PAYLINE
Daily checks capturing any changes in Proprietary database and real-time delivery
directors, rating, financial statements, etc.
Data
Analytics
Technologies
39B
Credit & ESG: the leading Italian rating agency with an ESG angle
Credit ratings ESG Solutions Growth drivers
Solicited Ratings ESG Rating and Assessment
Unsolicited Ratings ESG External Reviews
• Italian market of more than 1mln of SMEs1
Product
ECAI Rating Supply Chain ESG Platform in need of credit and ESG ratings for
Research Research accessing sustainable and/or government
guaranteed instruments
• Cross-selling opportunity on solicited
Largest SME Corporate Credit Proprietary ESG methodology and ratings and ESG solutions toward c. 20k
Competitive
Rating Team in EU (120+ analysts) database
advantage
ECAI recognized since 2008 Comprehensive offering for banks, Cerved clients compared to 1k current
(among the first in EU) investors and corporates clients
Highly reputed by banks and Operating from an ESMA
capital markets practitioners regulated entity in anticipation of • ECAI and Credit ratings expected to
forthcoming regulation benefit from banking, insurance and
#1 Rating Agency in EU by number of Sole Rating Agency in Italy
financial markets regulators
corporate ratings1 with ESG mandates from:
• ESG solutions benefiting from capital
Market
Banks
#1 Rating Agency in Italy Corporates market tailwinds and incoming ESG
#2 in EU by revenues among Financial investors Regulation and Supervision (eg, ESMA call
“Challenger” Rating Agencies to action on ESG Ratings and assessment
tools)
ESMA = European Securities and Markets Authority; ECAI = External Credit Assessment Institution
1) N. of Italian Joint stock company SMEs ; 2) Source: CEREP (ESMA Central repository for publishing the rating activity statistics) 40C
Real Estate: leading player in residential evaluation and VIPO services
Real estate appraisals Visure ipocatastali (VIPO) Growth drivers
Residential and commercial appraisals Cadastral data • Market returning to pre-Covid conditions
Technical due diligence Land registry
Product
reports thanks to ample liquidity and mortgages
BPO services
• Increase presence in commercial
appraisals & technical services (ecobonus)
• Development of Automated Valuation
Unique database covering c. 95% of 123m real estate assets Models, including monitoring platforms
Competitive
advantage
100k appraisals in 2020 (400k in the last 5 years)
Technical staff composed of 100+ internal experts and 300+ external for banks, RE companies and RE funds
appraisors boasting a capillary presence in Italy
Comprehensive product offering, fully linked into the Risk Management • Regulatory changes including EBA and
platforms of clients automated RE monitoring and Ecobonus
• Stable market share in both Appraisals
Leader in a mature market of One of the three major players
and VIPO, after years of growth in
Market
Residential Appraisals with the in the Italian market Appraisals
highest profit margins
• Reduced demand for VIPO services due to
Upside in Commercial Appraisals insourcing trends by banks
BPO = Business Process Outsourcing 41D
Regulatory & compliance to deal with regulatory risks & opportunities
KYC Reg Tech Subsid. Finance Growth drivers
End-to-end digital EWS alert systems BPO for Banks for
onboarding • Digitalization of business interactions with
Professional services Gar. Fondo Centrale
Product
AML suite Treasury mgmt. SW “Cerca Bando” higher relevance of AML and fraud risks via
Graph 4 You Advisory for SMEs fast and compliant workflows
Anomaly Detection
• Increase AML penetration on banks via
distinctive modules (eg Visius) and non-
Biggest business graph available Acquisition of banking segments (eg Easy AML)
Competitive
Proprietary or exclusive platforms & Finline in 2019
advantage
workflows 58k dossier
• New regulation with increasingly
Acquisition of Hawk in 2020, AML specialist +120 cliens stringent compliance obligations for SMEs
Largest DB on Italian Companies eg. new Codice della Crisi di Impresa and
forward-looking indicators for banks
• Subsidized finance to continue to benefit
from Government support of SMEs
AML leading player New business Service launched in
Market
(e.g., gaming) with 2019 with the
(€145bn1 requests received to access the
an incumbent on acquisition of Finline Fondo di Centrale Garanzia)
banks
• Cross-selling opportunity toward c.20k
Cerved banking and Corporate clients
Note: 1)Ministero dell'Economia e delle Finanze (MEF)
AML = Anti-money laundering 42Offering evolution – Data intelligence
Next slides focus
From Risk Management Growth Services
To Risk Intelligence Marketing Intelligence
Move from credit risk to other types of Leverage a unique data ecosystem to boost
Business risk intelligence: marketing intelligence:
unit
Anti-money laundering Market & sales intelligence
strategy
Anti-fraud Digital marketing
Regulatory risk Advanced analytics
Real estate risk
ESG risk
Data
Analytics
Technologies
43Marketing Intelligence: low double digit growth from 2021 to 2023
Service line Historical trends
Revenues (€m)
CAGR YOY Acquisition of MBS in 2019 doubled the
17-19 19-20
2017 2018 2019 2020 size of the business unit and improved
growth prospects
A Market & sales
Overall growth in other segments from
intelligence
16 181 21 19 14% -9% 2017 to 2020 despite Covid-19 impact
+ Sales Intelligence benefiting from
Digital contribution of Atoka
B marketing 16
9 12 11 30% -29% Outlook 2021-2023
+ Low double digit Growth
Acquisition of MBS as of
Advanced 1st July 29
analytics 15 Evolve Atoka into market leading tool
D n.m. 101% Launch of new Marketing Intelligence
= platform
Marketing Market expansion on mid and small
Intelligence 60 clients
26 29 51 42% 16%
Selective international expansion
Note: 1) Includes c. €1m one-off impact of internationalisation incentives offered by the State (MISE voucher) 44Comprehensive bouquet of services covering the entire marketing cycle
Cerved positioning & portfolio expansion Market macro-trends
A B C
• Marketing services industry persists
Market Sales Digital Advanced
Intelligence Intelligence Marketing Analytics
in being highly fragmented
Marketing
cycle
Know the Find Engage clients Generate • Growing importance of data &
Market new clients & prospects powerful Insights analytics in driving marketing
decisions
2005 2014 2016 2017 2019
• Digital solutions takes over legacy
Market intel Sales intel Digital traffic Data driven products at growing rate
Business platform platform generation management
portfolio Market research AI for sales From traffic to consulting
Media monitoring Sales analytics value Advanced • Worldwide success of platform-
Digital analytics analytics
based solutions providing real-time
marketing insights
Shared Semantic engine Cerved Dedicated sales network • Increasing appetite of SMEs &
assets DAT 4k media sources Micro companies for Marketing
Business graph Markets specialists
monitored
Intelligence
Source (1) Revenues 2020E: Finance Cerved data 45A
Market Intelligence: unique market insights via a digital platform
Growth drivers
New platform (Q1 2021) KNOW AND • Underpenetrated and highly fragmented
Product
MONITOR
Market & sector analysis
THE MARKET TO
Italian market and unique offering
Data providing FIND inspired by global best practice (eg,
Media monitoring GROWTH
OPPORTUNITIES
GlobalData and Statista)
• Fully scalable business model enabling
shift to a recurring revenues model
Competitive
advantage
Largest and unique database on Italian companies
30-year track record and knowledge of markets • Strong commercial network with 70
Strong team of c. 60 experts, fully in-house dedicated accounts
Synergies with Cerved: data, go-to-market, brand, clients
• Cross-selling opportunity toward c. 20k
Cerved existing clients compared to 1.4k
current clients
Underpenetrated and highly fragmented Italian market
Market
Cerved has a unique offering for the Italian market
• Synergies with Atoka and MBS projects
Only 7% penetration of Cerved Clients
46A
Sales Intelligence: Atoka is the reference sales intelligence solution in Italy
Growth drivers
FIND NEW • Underpenetrated and fragmented Italian
Sales funnel management
Product
Sales intel. Platform CLIENTS market & unique offering inspired by global
Lead generation +6m best practice (eg, ZoomInfo)
Mkt prospect similarity Italian
companies • Cross-selling opportunity toward c. 20k
Cerved existing clients compared to 1,5k
current clients
Competitive
State of the art product, benchmarked to international leaders
advantage
Largest and unique database on Italian companies • Expand on Small & Micro segments
Strong team of c. 29 data scientists, fully in-house
Synergies with Cerved: data, go-to-market, brand, clients
leveraging on (i.) dedicated product (i.e.
Atoka Pocket) as platform and (ii.) digital
channel and sales
Untapped users in Italy >500k within Number of Clients • Potential upside in Europe by leveraging on
financial institutions and corporates partnerships and M&A to accelerate data
Market
1,427 1,535
1,261 1,258 1400
Similar KPIs compared to ZoomInfo 1,132 acquisition and commercial expansion
1200
(users/ client, ARPU)
Q4 19 Q1 20 Q2 20 Q3 20 Q4 20
1000
• Fully scalable business model enabling shift
to a recurring revenues model
47B
Digital Marketing: covering all customers’ digital engagement needs
Growth drivers
Sales SEO, CRO, SEA, SEM • Underpenetrated and highly
ENGAGING
Product
Web analytics CUSTOMERS fragmented Italian market
E-mail marketing VIA ALL DIGITAL
Lead generation CHANNELS • Cross-selling opportunity toward c. 20k
Social media advertising Cerved existing clients compared to 260
current clients
Case study1 of value generation: +97% traffic increase
Fullly compliant with GDPR
• New digital marketing offering: content
110k
Competitive
State-of-the-art offering Increasing
advantage
SEO performance marketing, social selling & Influencer
Comprehensive offering New website marketing, e-commerce development
# visit
the entire digital funnel Old website
Synergies with Cerved:
10k
• Focus on SME market with a dedicated
data, go-to-market, brand, Go Live
SEO platform
clients Time
• Partnerships with best of breed
Digital marketing is rapidly replacing traditional advertising thanks to partners further enrich and expand
Market
superior ROI and segmentation capabilities
offering
Increasing appetite by SMEs in fostering digital visibility and e-
commerce
SEO = Search Engine Optimization; CRO = Conversion Rate Optimization; SEA = Search Engine Advertising; SEM = Search Engine Marketing
Note: 1) Cerved Real Case of value generation for Utility company: +97% traffic increase 2020 vs 2019 following the go live of the new website developed by Cerved 48C
Advanced Analytics: a unique offering combined with Cerved’s dataset
Growth drivers
AA for performance improvement:
Churn prediction • Pursue full exploitation of synergies
POWERFUL INSIGHT
Product
Pricing strategy TO IMPROVE STRATEGY offering MBS Advanced Analytics
Cost excellent program AND BOOST GROWTH AND projects to Cerved clients
Digital interaction model PRODUCTIVITY
Mkt and credit strategy • Selective M&A to fuel competitive
Go to mkt strategy advantage on data-driven consulting
projects
Competitive
100+ consultants with 25 partners with long tenure
advantage
• Potential upside in delivering
Leader in insurance segment
Leader in pricing models for banks Advanced Analytics for medium
Strong performance in 2020 corporates
MBS – Cerved synergies
Strengthens go-to-market and
Mngmt consulting market value at €4bn1 o/w 20% Advanced Analytics client relationship
Helps promote use cases and
Market
Raise of advanced analytics consulting doubling the growth of
For
focus on innovation
traditional advisory (12,7% vs. 6,4%)1
Cross-selling advisory to Italian
Cerved as challanger with strong positioning on specific verticals (e.g., banks
Advanced Analytics project for insurers) Expanding client base
AA = Advanced Analytics
Note: 1) Cerved Estimates on Market Data 49Agenda
1. Introduction by the Chairman (G. De Bernardis – Executive Chairman)
2. Cerved investment case (A. Mignanelli - CEO)
3. Cerved for Italy (A. Mignanelli - CEO)
4. Data intelligence (A. Mignanelli - CEO)
− Offering
− Channels
5. Credit management (A. Mignanelli - CEO)
6. Talents, technology, sustainability (A. Mignanelli – CEO)
7. Financials & strategic outlook 2021-2023 (E. Bona – CFO)Channels evolution
Next slides focus
Financial institutions Corporates
Large
Advisory/ Multi-specialist
Productive external
Medium network
Small Phygital
51Financial institutions channel - performance & outlook
Service line 2017 2018 2019 2020 CAGR YOY Historical trends
Revenues (€m) 17-19 19-20
Stable risk intelligence with contraction
in Credit Risk and Real Estate more than
Mktg intelligence
Market & sales compensated by strong growth in
Intelligence 1 1 6 6 Regulatory & Compliance
103% 5%
Solid organic growth in Market and Sales
Advanced Acquisition of MBS
Analytics 4 Intelligence which benefitted from
2 n.m. 48% increased focus on cross-selling with
Credit risk
regards to the legacy offering and the
90 88 83 86 -4% 4% Atoka service range
Risk intelligence
Credit & 3 3 3 3
ESG ratings -2% 18% Outlook 2021-2023
Real estate 33 38 39 31 Stable outlook in Risk Intelligence,
8% -20% with potential for Credit/ ESG ratings,
Regulatory & 12
compliance 1 2
125% 427% analytics & KYC
Financial institutions Further contribution from Marketing
Channel 131 134 141 2% 5% Intelligence, growing and still largely
128
underpenetrated
52Evolution from provider of data to provider of value-added services
Product innovation New service model
Proprietary systems linked to the Leading
Analytics database allowing banks to improve their Market’s largest salesforce with 30 resources
sales
& Early Warning accuracy ratios within credit processes
and rating models force
Geared toward achieving:
Commercial, technical and
Largest & most complete database consulting skills plus MBS comprehensive coverage &
Data & scores combined with Analytics & Early Warning for data driven solutions
systems creates a unique offering for an and transformational client acquisition Client
estimated 90% of Italian banks initiatives
cross-selling and upselling service
New platform with end-to-end solutions teams
Subsidized
over the credit cycle which in 2020
finance related to approx. EUR 5,5bn of Large banks: 9 groups, 122 licenses,
underlying loan volumes EUR 71 Revenues in 2020
Almost all large banks have new Medium banks: 40 groups, 135 licenses,
contracts or pilots, further EUR 28 Revenues in 2020 FIs
contractualised growth in 2021 cluster
Update of Cerved Group Score to assist Small/ BCC/ Other1: 2 large groups
banks in dealing with Covid-related risks, 308 licenses & other (205 licenses),
CGS Covid
similarly to the Corporate EUR 43 Revenues in 2020
channel offering
Note: 1) Other = Insurance companies, financial firms, car companies 53Clear strategy to defend from pricing pressure and consolidation
Flat Fee Consumption
Contract renewals Bank consolidation
39% 35%
61% 65%
Pressure on Credit Risk data, particularly if Common client overlap
sold stand-alone 2018 2020
Higher bargaining power of enlarged bank
Product innovation within Cerved’s Average residual weighted
Analytics & Early Warning systems life: 1.7 years Lower sophistication of purchased bank,
Latest expiry: Dec 2023 offering product upgrade potential
Stronger cross-selling capabilities > 50% of value expiring in
Dec 2023 High complexity & decommissioning,
Anticipation of contract expiries coupled particularly during mergers
with product innovation and cross-selling Cerved commercial strategy
less oriented on long term Mergers expected to occur mainly between
High complexity & decommissioning contracts, which imply higher Cerved existing client base
discounts and tenders
1% 7%
1% 6%
Strong track record in growing overall revenues (+3,0% CAGR from 2017 Marketing
Intelligence
1% 2% 9%
28% 31%
to 2020) while cross-selling and diversifying the product offering 31% 24%
Othe risks
Increased contribution from Regulatory & Compliance, Marketing
Credit & ESG 70% 67%
Intelligence and Advanced Analytics more than covering contration in rating + R.E.
61% 61%
mature Credit Risk and Covid-related issues with Real Estate Credit Risk
2017 2018 2019 2020
54Channels evolution
Next slides focus
Financial institutions Corporates
Top
Advisory/Multi-specialist
Productive external
Large/ Mid network
Small/ Micro Phygital
55Corporate channel - Cerved performance & outlook
Service line 2017 2018 2019 2020 CAGR YOY Historical trends
Revenues (€m) 17-19 19-20
Mid single digit growth in Risk
Market & Sales
Marketing Intelligence
Intelligence
Intelligence until 2019. Contraction of
15 16
1
15 13 1% -15%
consumption in 2020 due Covid-19 related
Digital impact on underlying business trends
Marketing 9 12 16 11 30% -29%
Solid growth in Marketing Intelligence
Advanced
Analytics
Acquisition of MBS
26 benefiting from cross-selling and enlarged
12 n.m. 111% product offering, with limited impact
Credit Risk 143 145 149 134 2% -10% from Covid-19 mainly thanks to AA
Risk Intelligence
Credit &
4 4 5 5 4% 5%
ESG Ratings Outlook 2021-2023
Real Estate 2 -4% -35%
1 1 1 Mid Single Digit in Risk Intelligence ,
Regulatory & with a focus on KYC
Compliance 0 1 3 3 219% 7%
Corporate Further contribution from Marketing
CM
Receivables 17 21 26 30 21% 16%
Intelligence and Corporate Receivables
Corporates
191 201 227 223 9% -2%
Channel
Note : 1) Includes c. €1m one-off impact of internationalisation incentives offered by the State (MISE voucher)
CM = Credit Management ; AA = Advanced Analytics
56Strategy to foster cross-selling, upselling and new clients
Go-to-market Commercial strategy
Risk Intelligence
& Credit Collection
Marketing Intelligence All business units
Delivery via client service teams with
#25 key accounts commercial and technical skills
#5 advisory accounts Strong focus on projects which
Top 4 industry sectors integrate the service offering
Incorporation of sector characteristics
#70 field sales
3 geographic areas
#160 field sales Develop project s for clients which
#25 Telemarketing staff integrate business information with
Large/Mid 3 geographic areas other Cerved services, via (i.) Usage
4 industry sectors stimulation and specialist account
#50 resources in special dedicated teams, and (ii.) New client
accounts teams (Usage generation
stimulation, Credit collection,
Ratings, Digital marketing)
Small / Micro #20 Teleselling New client generation
Website Develop off the shelf products
Partnerships Push on digital/online approach for
both sales and usage stimulation
57The leading go-to-market in Italy
Corporate channel KPIs Client dynamics for Risk Intelligence products
# of clients 2020 Rev. €m ‘ARPU1 (€k) Churn and new client generation have averaged at
Top Top 1k 92 €94k c. 6% and 5%, respectively, from 2017 to 2020, limited
Covid impact
Large/ Mid 13,7k 119 €9,0k Consumption of existing clients averaged 5% except
2020, due to lower consumption in particular of
Small/ 8,8k 12 €1,4k SME clients due to Covid
Micro
Large/Mid
Corporate Channel Key Objectives Churn Existing New
Top and Large clients: increase ARPU and share of
7.1% 6.9%
wallet 4.6% 3.1% 4.5% 4.3% 4.3%
Medium clients: increase penetration, ARPU and n.
-5.9% -5.1% -5.9%
of clients -7.1% -7.9%
Small and Micro clients: increase number via
dedicated product platforms
2017 2018 2019 2020
Note : 1) Average Revenues per Unit 58Agenda
1. Introduction by the Chairman (G. De Bernardis – Executive Chairman)
2. Cerved investment case (A. Mignanelli - CEO)
3. Cerved for Italy (A. Mignanelli - CEO)
4. Data intelligence (A. Mignanelli - CEO)
− Offering
− Channels
5. Credit management (A. Mignanelli - CEO)
6. Talents, technology, sustainability (A. Mignanelli – CEO)
7. Financials & strategic outlook 2021-2023 (E. Bona – CFO)Truly independent player with a comprehensive product offering
Product offering and client segmentation
# of Banking Corporate Credit Legal
Type of client
clients UTP & NPLs Receivables Operations Service
Cerved is the only player in Italy with a highly
Banks 19 diversified product offering in order to tackle
Investors 8
all client needs
Consumer Finance 26 Leading position in Banking NPEs, having
Utilities & Large comp. 79 completed a number of high-profile and long
SMEs 1,575 term operations with banks and funds
Public Admin. 21
Revenue diversification Client concentration High Revenue diversification with a strong
focus on the Banking NPE segment and the
Banking UTP & NPL Corporate Receivables segment complemented
20% 22% Top 3
Corporate Receivables 12% 4 to 10
by ancillary services
49% 20%
Credit Operations
37% 11 to 20
High client diversification with almost 1700
11% 29% Other
clients, of which top 10 clients chiefly related to
Legal Services
large NPE servicing contracts
60Credit Management: high single digit growth expected to 2023
Historical trends
CAGR YOY
Service line 2017 2018 2019 2020 17-19 19-20 Strong growth to 2019 thanks to organic
Revenues (€m)
growth, high-profile transactions and
Banking diversification
UTP & NPL 88 110 74 68% -32%
39
Decline in 2020 in Banking NPE due to
+ the Covid-19 pandemic, albeit segments
Corporate
Receivables 17 21 26 30 21% 16%
offering growth and resiliency
+ Outlook 2021-2023
Credit
Operations 25 23 32 30 14% -4% High single digit growth
+ Develop UTP servicing for banks
Legal
Services 12 15 18 17 24% -3% New NPL servicing contracts
= Growth in corporate receivables
Credit
Management 93 147 185 152 41% -18% J/V with investors
61NPE servicing market expected to return to growth post Covid-19
NPL servicing market outlook
Total Servicing
Revenue Pool Cerved’s 2018 Investor Day anticipated
AuM (Servicer) stabilising NPE volumes albeit growing
revenues due to performance, macro and
280-300B€ Ancillary Services
1,500M€ The Covid-19 is expected to generate EUR 60-
240B€
100b new NPE volumes, and consequently also
Servicing Revenues
900M€
220B€ Trajectory
in 2018
Healthier banks coupled with new instruments
Investor such as GACS expected to accelerate NPE
Day
440M€ disposal timeframe by banks
Revenue impact
50B€
due to Covid-19
Continuing pressure from BCE on banks to
110M€ maintain balance sheets healthy
2014 2018 2020 2021 2023
Ownership and Large revenue pool
Explosive AUM growth
servicing to be extracted New wave of NPEs due
due to portfolio sales
largely captive to from more liquid to Covid-19 crisis
and outsourcing deals
banks assets
Note: 1) Cerved analysis 62Covid-19 impact has changed the medium to long term perspective
Cerved market positioning
Ranking by AuM as of 30/06/2020 (€396bn total)
Truly independent player well positioned with
#2 player with an 11% share 140 key institutional investors such as Atlante/ DeA,
77 (20% MKT share ex. Purchasers)
AMCO and REV
45 38 30 25 23 17 Knowledgeable and experienced servicer with
data driven expertise on credit towards
DoValue Cerved Intrum Prelios IFIS AMCO Credito Others
corporate and SMEs
Fondiario
Cerved AUM and collection rates (excl. MPS)
Cerved’s NPL AuM (ex. MPS) Avg. recovery rate Target of new AUMs of approx. 2b per annum
from 2021 to 2025, leading to total NPL AUMS
34.2
33.3
3.00%
3.20% remaining stable
2.70%
30.3
30.9
Net NPLs already secured in 2021 of 700m from
AMCO, plus up to €2,5bn in the medium term
via Polis
Dec 2018 Dec 2019 Dec 2020 Feb 2021 2018 2019 2020
Source = PwC - The Italian NPL Market, December 2020 63You can also read
