The Impact of the Covid-19 Pandemic Confirms the Resiliency of the Group’s Business Model

  • Revenues: 487.8 million euros, -6.3% compared to 520.6 million euros in 2019;
  • Adjusted1 Consolidated EBITDA: 203.6 million euros, -14,0% compared to 236.6 million euros in 2019, representing a percentage of revenues of 7%;
  • Adjusted1 net profit: 92.7 million euros, -13.6% compared to 107.2 million euros in 2019;
  • Operating Cash Flow: 138.6 million euros, -12.4% compared to 158.1 million euros in 2019;
  • Consolidated Net Financial Debt: 587.7 million euros as at December 31, 2020, equal to 2.9 x Adjusted

1) The adjusted EBITDA excludes the impact of the Performance Share Plan with reference to the 2019-2021 plan and the 2022- 2024 plan; Adjusted Net Income excludes non-recurring income and expenses, amortized loan expenses, amortisation of the Purchase Price Allocations resulting from company consolidation and non-current tax items.

Andrea Mignanelli, Chief Executive Officer of the Group, commented:

“We closed 2020 with results affected by the economic consequences of the pandemic, but nevertheless outperformed the guidance presented to the market last Autumn. In light of the new business plan the Company looks toward the future with confidence.

We expanded our Risk Management services for Financial Institutions, partly thanks to the new line of services for the Central Guarantee Fund. We also increased revenues in Growth Services, at double-digit rates, boosted by the acquisition of MBS Consulting, which broadened our range of high value-added services.

The lockdown negatively impacted our Corporate Risk Management services, as many clients suffered periods of inactivity, and Credit Management, which was affected by long periods of court closures.

Tomorrow we will present our strategy and financial targets up to 2023 during our third Investor Day. We have approved an ambitious yet very solid business plan, consistent with our strengths, with technology trends and the needs of our customers. The cornerstone of the strategy is the focus on Data Intelligence: we will develop our business to accompany the digital and sustainable transition of banks, companies and institutions by relying on a greater penetration of our services for small and medium-sized enterprises and by selecting our M&A activities in order to grow in domestic and foreign markets.”

Analysis of Consolidated Revenues

In the 2020 financial year the Group’s consolidated revenues decreased by 6.3% and now stand at 487.8 million euros compared to 520.6 million euros the previous year (-9.5% on an organic basis).

Divisional revenues decreased by 6.6%, from 520.6 million euros to 486.3 million euros, net of the capital gain of 1.5 million euros made on a property sold in Turin, which was deemed no longer functional for current operating requirements.

The Risk Management business unit recorded significant growth in the Financial Institutions segment thanks to the good performance posted by our Business Information services and the new support services to banks in the disbursement of loans guaranteed by the Central Fund. With reference to the Business segment, the Covid-19 Impact Assessment services partly offset the lower consumption of businesses that suffered during the lockdown period.

The Growth Services business unit grew both in terms of external lines with the consolidation of the companies acquired in 2019 in the field of advisory services, and in terms of internal lines with the Atoka intelligence sales services.

The decline in revenues of the Credit Management business unit is mainly due to the slowdown in court activities, particularly marked during the second quarter lockdown, and to lower volumes linked to servicing contracts in 2020.

1) Includes a capital gain of 1.5 million euros related to the sale of a property in Turin

Analysis of Quarterly Revenues

During the fourth quarter of 2020, the drop in consolidated revenues amounted to -14.7% compared with the fourth quarter of 2019 (-15.0% on an organic basis). The Risk Management business unit fell by 2.2%, the Growth Services business unit by 19.9%, and the Credit Management business unit incurred a decrease of -29.6%.

Source:  Cerved Group Earnings Release