Nexi, the leading digital payments company, has recently made headlines after announcing its return to profitability alongside surprising dividend proposals. This news has stirred market excitement, propelling the company’s stock to new heights on the Borsa Italiana.
Closing the year 2024, Nexi reported impressive profits of 171 million euros, marking a significant recovery from the staggering loss of 1 billion euros experienced the previous year. The normalized net profit attributable to shareholders also climbed to 731 million euros, representing a 4.1% increase against the 702.3 million euros recorded the prior year. Meanwhile, the group's revenue surged to 3.5 billion euros, reflecting growth of 5.1% on the year, complemented by earnings before interest, taxes, depreciation, and amortization (EBITDA) of 1.8 billion euros, which represented a 7.1% increase and secured a 53% margin.
Adding to the optimism, Nexi's Chief Executive Officer, Paolo Bertoluzzo, revealed plans for dividend distribution starting 2025, proposing 0.25 euros per share which he noted would be set to grow over time. This positive announcement not only highlights Nexi's successful turnaround but also demonstrates the company's confidence moving forward. Bertoluzzo articulated, "for 2025, we will propose to the next Shareholders' Meeting a capital return of 600 million euros, of which 300 million euros will be dividends, and an additional 300 million euros through a share buyback program."
The firm's solid financial performance received validation from market analysts. Intermonte noted, "The results of Nexi are consistent with expectations and with the consensus," emphasizing the significant surprise related to the shareholder remuneration policy. They added, "Despite expected growth slowdowns for 2025 due to the current banking consolidation trends in Italy, the confirmations for progressive cash generation year after year are positive."
Analysts from Equita also echoed this sentiment, recommending Nexi’s shares with a 'Buy' rating and setting their target price at 9 euros. Equita pointed out, "The results align closely with estimates, supporting our outlook for the company." Meanwhile, Barclays highlighted Nexi’s fourth-quarter revenue growth, marking it at 3.7%, slightly under the projected 4%, yet they maintained positive views about the EBITDA metrics holding steady.
The solid financial metrics paint a picture of Nexi's aggressive strategies to conquer the digital payments market. Nexi's commitment to revenue enhancements anticipates growth categorized as low-to-mid-single digits for the forecast year, along with expectations of EBITDA margin expansion of at least 50 basis points per annum. Alongside this, the company predicts excess cash generation of at least 800 million euros, laying the groundwork for its ambitious shareholder payout initiatives.
Market sentiment remains cautiously optimistic. Following the announcements, Nexi's stock experienced acknowledged gains of over 7 points, earning top performance accolades on the FTSE MIB exchange. Investors view the developments as not just recovery but as strategic steps toward sustainable growth.
Despite some analysts noting concerns about macroeconomic factors—including the broader banking consolidation impacting growth expectations—most agree on the attractive nature of Nexi's shareholder remuneration stance. Jefferies noted, "The results for 2024 are largely consistent with expectations," providing reassuring commentary on Nexi's performance metrics which, overall, show resilience and adaptability. Analysts rationalized concerns about quarterly revenue performance but maintained confidence citing June's financial health signals as solid for future growth potential.
Looking forward, Nexi will not only need to navigate the immediate financial markets but also adapt to the shifting dynamics of the digital payments sector. The strategic moves made today, particularly aimed at shareholders, could very well dictate the company's potential to retain its competitive edge within the industry.
Overall, Nexi's optimistic outlook for the upcoming year, marked by its dividend initiatives and profitability levels, reflects broader trends within the financial technology and payment processing landscapes. With plans set for continued engagement and growth, Nexi appears poised for success amid varying economic conditions.