Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Nexi Third Quarter 2021 financial results conference call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Paolo Bertoluzzo, CEO of Nexi. Please go ahead, sir.
Good morning. Good morning to everybody on this call, and thank you for joining us in our third quarter results session. As usual, I'm here with Bernardo Mingrone, our CFO, and Stefania Mantegazza is leading investor relations, but we have also a few other colleagues connected in here with us in case it is needed. As usual, I will start giving you a little bit of an update on where we see the volumes going and evolving on the back of the evolution of COVID, and I will also give you a short business update with focus on merchant services. I will hand over to Bernardo, who cover financial results. I will come back to give you a quick update on where we are in creating the European PayTech leader and bringing the new group together.
Obviously, I will conclude commenting on guidance that, as you know, has been confirmed for the full year already. Before I go in, let me remind to everybody this is the first time for us in presenting the aggregated numbers of Nexi and Nets. Last time, you may remember, Bernardo gave you an overview of what pro forma, the profile of the new group would have looked like to kind of introduce the topic. This time, we are reporting integrated Nexi-Nets. We will cover the performances by region, which will give you an indication on how things are going. We'll probably make a few more comments on the standalone performances, but as I said, we are reporting for the first time in an integrated way.
At the end of the presentation, we'll have time, as always, for your questions. Now, let me start, as usual, with key messages at page three. The three messages basically are reinforcing the same three messages we had over the last couple of quarters. Number one, we observed a continued volume recovery and acceleration across the various geographies. In Italy, we continue to see a strong volume performance with Italian cards growing anywhere in between 20%-25% versus 2019. That again, I remember to everybody, is always our benchmark year because it was the pre-COVID year. Next to Italy, we've seen also a good recovery in the Nordics that came back to positive over the last few weeks as a total, with some strong performances across many sectors.
The DACH region is still in recovery, is not back to the previous level at full, but actually seeing a strong basic consumption growth. Also, more recently, we've seen the discretionary sector coming back to positive here. The travel sector, impact that for our business there is still relevant in volumes, is the one that is still behind, although recovering. Third point, we see an acceleration stronger in SMEs than in LAKA. This has to do also with the different profiles of the different sectors in terms of mix of SMEs and LAKA, but we believe this is really positive for our positioning and for the outlook as well.
Last but not least, we continue to see clear signals of acceleration of cash to digital payment transition across all sectors and visible in all geographies, also the ones that are already more penetrated. Message number one. Message number two, also in the third quarter, we've seen a strong and growing financial performance. Revenues for the group were up 10.1% in the quarter, in acceleration versus the previous two quarters for a total of 9.6% in the nine months. We've seen, in particular, strong revenue growth performance in Merchant Services and Solutions with, for both Nexi and Nets, very similar levels, plus 12.2% for the total in the third quarter, 10.6 year to date. Again, here you see an acceleration.
E-commerce revenues were particularly strong at +32%, despite the fact that the travel-related sectors are still affected by COVID. EBITDA in the quarter was up 14.6%, up 12.3% from the beginning of the year, with continued margin expansion that in the third quarter was at 53%, up 2 percentage points versus last year. Third message, we continue to progress in the creation of the European PayTech leader. SIA has reported again stronger standalone performance and will comment on a dedicated page. As you know, we have received the antitrust approval on October 14th on the combination of Nexi and SIA, and the closing is now expected by year-end.
In the meantime, we have closed the deal with Intesa on the UBI merchant book. Yesterday, we've also signed the deal with Alpha Bank to create a joint venture in merchant services in Greece. Closing is expected at some point in the second half, probably the second quarter of next year. Last but not least, we've done a small but actually strategic investment for our future in a company. It's called orderbird and is the leading DACH merchant software solution for hospitality sector, present also in other geographies. It's a small investment. I'm talking only about EUR 60 million.
We've increased our ownership from 20%, we were already there, to 40% with a clear path to control. We're very happy for this because it's the first real, you know, somehow, you know, test for us in entering in a deeper way the software space, especially for SMEs starting from Germany, that is a very strategic market for us, and expanding in other places, as well. On the back of all of this, we have confirmed our ambition for 2021 on a Nexi-Nets combined level. Revenues, we expect them to grow at about 10% year-over-year, and EBITDA, expect EBITDA to grow at 11%-13% year-over-year. Now, before I go into volumes, let me jump to page five.
As a quick reminder, this is the new profile of the group. We have a group that sees about 60% of the revenues in Merchant Services and Solutions with a strong exposure to e-commerce. 29% is what we call Cards and Digital Payments, and the remaining 10% in what we call Digital Banking and Corporate Solutions. Second, the group is highly exposed to markets with super strong and very long-term and secular growth opportunity in digital payments. 71% of our revenues are in low penetration markets, such as Italy, such as Germany, such as the central European ones and Southern European ones.
Number three, 64% of our revenues are coming from volume and the 36% from installed, like, type of revenue. Last but not least, we have a very strong operating leverage. Now, let me jump into volumes. I'll cover Italy first, and then I will also give you a highlight on what we see happening in the other key geographies. Page number six is the usual page. The dark blue line is the total. Here, we're focusing on merchant services, where we have more insights and therefore the dynamics are more interesting. The dark blue line is the total. The lighter blue one is actually on Italian cards. The gray one is on international cards and therefore visitors to Italy.
Here you see that after the summer, we continue to basically grow revenues compared to 2019 anywhere in between 10%-20%, sometimes also above 20%. Here there is a clear strong contribution from Italian cards that have been growing anywhere in between 20%-30% over the last few months. I would say particularly interesting is also the dynamic in the international visitors cards. Here, you see that we had a very, very fast recovery in the summer leading to August, where now we went back to the levels of pre-COVID, mainly driven by European visitors with Americans and Asians being still not present or present in a very limited way. With the slowdown again, but a strong recovery over the last few weeks.
This dynamic is probably explained by the fact that the touristic side of international travel is recovering fast. People are really keen to travel as soon as they can do it. While actually the business traveler dynamic is still behind, and therefore, depending on the moment of the season, probably we'll continue to see these dynamics happening. Hopefully, the recovery of October is also due to the fact that we had lesser restrictions also for business travelers. It's probably a combination of business travelers coming a bit back and actually holidays in some countries in Europe in the latter part of October as well. Jumping to page seven, we have the usual split by macro sectors.
This is the total, so this is not separating Italian cards versus international cards, and therefore, the sectors are also affected by the dynamics that I was explaining before. Here we see a very strong continued growth in the basic consumption sectors like groceries, utilities, medical, and so on and so forth, growing anywhere now around 30%, 34%, 37% in the last week. We see the other two sectors now moving kind of similarly, anywhere in between, I would say, 5%-10% year-over-year with a super strong recovery, I would say definitely faster than expected, in particular in the high-impact sectors, and I would say in particular in restaurants and bars.
This is the dynamic we are observing in Italy. We'll come back in a moment to give you a bit more insight on specific subsectors because I think it's interesting. On page eight, we see instead the dynamics in the Nordics area and in the DACH region. If you just take the total before going into the subsectors, we have observed +12% growth in October across both the Nets, if you like, geographies, 12% growth of our SMEs versus 2019. LAKA instead was still behind, but actually, if you strip out the effect of the impacted consumption sectors growing as well, +8%.
Last but not least, we also see a good recovery in issuing, now growing at 5% in net geographies, and basically this is mainly relating to the Nordics. As we're talking about the Nordics, here you see in the top graph, the dynamics in the Nordics have been back to positive from September and actually growing further in October. As a total, they've been growing 7% versus 2019 in terms of volumes. Actually, the last week, you know, was actually double-digit with 12%. Very strong and continued performance on the basic consumption sectors, above 30%, actually 45% in the last week. The discretionary consumption sector trending a bit slower, but now close to zero.
A good recovery over the last few months also for the high impact sectors over the last month at -1%. Last but not least, in the DACH region, and here the most of the volumes are actually associated to Germany. Here you see a continued strong performance of growth in the basic consumption sectors. You see actually discretionary services going back to a positive 8% last week, 2% in October versus 2019. Here, the sector that is still behind is actually the one that is related to travel.
Here, in Germany, you know, this is an important impact on the total mix, and this is one of the reasons why, the key reason why actually Germany is still behind compared to 2019 volumes. This is the total picture. Page 9 digs a bit more into the specific sectors to reinforce the point that I think we made over the last many calls. I would say that we have been observing underneath these COVID-related dynamics a very strong acceleration of the transition from cash to digital payments, not only in under-penetrated markets like Italy, but also in more penetrated markets like the Nordics.
Here you see at page nine a few examples here with the pic from top to bottom, the top eight sectors per market. Some of them may be less relevant in size, but here you see actually also very relevant sectors. Think of restaurants and bars in Italy, 34% growth, or groceries, 25% growth, you know, nicely growing, all double-digit, next to, you know, some very special ones like doctors at 82%, for example. Nordics, similarly, groceries at 25% versus 2019. Again, for a market that we tend to believe that is already highly penetrated, it's a big positive, in our opinion.
You see some more specialized and smaller sectors such as, for example, cosmetic or hardware growing at 40%, 59%, and so on. Last but not least, also in the DACH region, groceries at 49%. Also restaurants, despite some limitations being still in place, 13% and many other sectors growing double digit with, actually department stores growing triple digit. I would look at it with a lot of sympathy that it's probably not the benchmark for the other sectors at least not for now. This is basically the picture in terms of volumes.
Before I hand over to Bernardo to cover financial results, I would like to deep dive with you for a few minutes on the dynamics and the key initiatives that we are observing, in particular in merchant services that, as you know, is more than half of our revenues and is always up here focused not just for us, but also for you and for investors more broadly. Here we try to give a little bit of a feeling of what we're doing in the different segments. It will be covered, this, by SMEs that represent almost 60% of our revenues in merchant services, e-com that represents about 25%, and also LAKA that is a bit less than 10% of total revenues.
If you're asking yourself why it don't sum up to 100, the reason is that there is a 7% that has to do with acquiring ATMs, as we call it, cash, you know, and that is not allocatable to any segment. For simplicity reasons, we have allocated [Posterm] as revenues to SMEs because most of it is really SMEs. Now, going one by one. In SMEs, we see a strong acceleration on our digital proposition in Germany, positive results in Germany on the back of the very positive results we had in the Nordics, as well as in Italy. We are promoting more and more the mobile POS proposition for new to merchant subsector.
At the same time, you know, we are very successfully pushing on vertical propositions in the specific sectors. We've started in Italy with a dedicated go-to-market for very narrow verticals. For example, restaurants, cafes, hotels, retail, and so on and so forth, where we package very often from the distribution go-to-market point of view, but sometimes also pricing and product itself, and this is really hitting the ground well with customers. At the same time, we are increasing our focus on ISVs and more in general, the software space. Here, basically, there are two things we are doing. On the one side, we're expanding our partnerships across all geographies, I would say with ISVs.
If you count them across the board, we count them actually for this call, it's actually more than 500 partnerships in the ISV space. They are a mix of partnerships with local leaders on merchants, CRM and ERP softwares. For example, TeamSystem, we need to just mention one. Many smaller, much smaller vertical specialists that very often are local companies as well. We normally partner, we do technical integration with some of them. We do also go to market together. As I anticipated, now with orderbird, we're going one level deeper as now we'll integrate more on the proposition side as well, and we'll test it in one segment, in one market to expand it further as we go along.
In the SME segment, basically, we are not seeing any major news in terms of competitive dynamics. We know, I mean, we discussed it in the past that we have important competition in the new to digital payments segment, the smaller merchants that are starting to use digital payments for the first time, in particular in Italy, in particular say also in Germany from basically one player, that is SumUp. They're actually successful in the market in winning a number of customers, but actually the value associated with these customers, even the size of them, is normally very small. We have also increased in Italy our focus in that segment, and we're actually quite successful.
We have doubled, you know, our acquisition volumes, but we're also focusing in, winning back these customers as they grow, and when they need a proposition that is more structural and more complete. This is it in terms of SMEs. The volumes across our geographies were up about 14% in the quarter compared to the same quarter, 2019. E-commerce, which represents about 25% of our revenues in Merchant Services, seeing a lot of dynamics, a lot of new players coming, some of them going as well, to be honest with you. By the way, this is a sector where we have a new segment, and new propositions emerging as well. We maybe talk more about it in our Q&A sessions, but let me give you a flavor of what we're doing here.
First of all, when it comes to the more PSP like type of proposition for the acceptance propositions, we are launching Easy in Germany after a pretty good success in the Nordics as a collecting PSP proposition. At the same time, we are extending our PSP proposition in terms of capability in Italy. It's called XPay, and we are extending this proposition also on the back of the experience and the capabilities that we have in Nets, for example, in one-click checkout and card pre-onboarding. In the nine months, our e-commerce activations in Italy have been up 70% compared to the same period two years ago, just to give you a flavor. At the same time, we are seeing a lot of activity in the alternative payment method space here.
Our angle is twofold. We own alternative payment methods, and at the same time, we partner with third party payment methods to make them available through our gateways to our merchant customers. If you focus for a moment on account to account propositions, we actually have a very strong position, a successful position both in Poland and Finland, and they're growing very, very strongly. At the same time, we are onboarding more and more account to account solutions to our gateways, for example, BANCOMAT Pay in Italy. Similarly in Buy Now, Pay Later, we have a very strong proposition called Ratepay in Germany. We own that proposition. That proposition is growing very, very strongly.
Again, that is a proposition that is made available not only through our gateway solutions in Germany, but also to basically every other national, international PSP active in the country. At the same time, in the other geographies, we are partnering more and more with third party Buy Now, Pay Later providers, because at the end of the day, as a PSP, we must be able to offer all possible payment methods to our merchant customers in order to allow them to basically maximize their conversion rates at checkout. Last but not least, we continue to strike partnerships with e-commerce enabler platforms across all markets. We have about, well, actually, we have more than 10 partnerships across the group.
Many of them are with players that are present in more than one market. Today, we cover about 66%-76% of the relevant market. Today, e-commerce enablers cover across our geography about 10% of the volumes. They basically serve the tiniest, the micro merchants, the micro SMEs in e-commerce. We cover through technology integration and in certain cases also go-to-market partnership, 76% of that. Again, here, volumes are growing 13% despite the travel-related sector still being suffering.
The reason why the growth rate of revenues is actually well above 30% is because, when it comes to account to account and buy now, pay later solutions that we own, the growth rate is very, very strong, and it's contributing to the total growth. Last but not least, the LAKA segment represents about 9% of our total revenues in merchant services. Here, we don't see any major news in terms of competition. Obviously, we continue to see active, very active players like Adyen in very specific segments that are basically segments of the global brands, in particular, I would say in luxury and in fashion.
To be very clear, we continue to compete successfully and win in the sectors that instead are more local in nature, such as, for example, food retail, household goods, mobility, insurance, public administration, and so on and so forth. Basically, you know, we win and continue to win where the physical component of the omni-channel solutions is actually relevant for these companies, where they need the complex needs in terms of terminals and terminals acquiring acceptance, integration, where the local integration with local payment methods is important, where the vertical sector integration is important, where customization is important. You know, at the end of the day, you know, that's the core of what we do thanks to our local entrenchment.
Here we continue to serve successfully, you know, not only the local large merchants, but also global brands that are present in market with the characteristics I just described. Across our geographies, we cover and serve merchants such as, for example, IKEA, Sky, Decathlon, Vodafone, Zara. I mean, names that are clearly international names, but require very specific local support, integration and delivery. Now, before I move on, let me use one example of something that we have announced yesterday. It is actually to date small, but I think it's also a good example of what we see as the core of the nature of the new Nexi Group.
I think we said in the past that in many one-to-one conversations, that at the end of the day, our strategy is quite simple. We want to combine the scale that is necessary to drive hard innovation, digital innovation in particular, and we understand competence is important, investments are important for winning scale. So we want to remain competitive with the global players, specialized players when it comes to product proposition innovation. But at the same time, you know, we also want to be very, very locally entrenched, thanks to our people, thanks to the ecosystem integration that we have in the different geographies. One simple example of this on top of the many I've given to you over the last few minutes has to do with the product we launched yesterday. It's called PagoInConto. It's translatable as pay by account.
It is a very nice product because it is an account to account payment product that we are making available to begin with in e-commerce, but will be available also on omni-channel solutions for LAKAs and SMEs as well. This is actually integrating many capabilities that we have in Nexi, not only in merchant services, but also in the payment space, in the open banking space. Now, to deliver a solution that we're making available to our PSP merchant customers, and I would believe progressively also to other PSPs that want to operate in Italy. This solution is basically leveraging open banking enablement that we provide, because we are the provider of the open banking system for Italy. Our capability in this space, plus our local licenses, plus our local integration, plus our local capabilities on the e-commerce side.
Basically, a merchant can offer the opportunity to its own customer to pay by the bank account without pre-registering on anything, because thanks to open banking, the customer will find a click button on the checkout page, will click on the button, then basically the page of the bank will open. The customer will identify himself with the standard identification method of the bank, and the transaction will happen because it will be already filled on the different components of the transaction itself, and the reconciliation will happen automatically. Again, it's a small thing, but I believe it gives you an idea what it means, you know, having global scale, but also being locally entrenched and integrated.
Clearly, this is targeting not necessarily the small transaction, but actually a large transaction, because being free by account, you can pay for the moment up to EUR 15,000 per transaction and going forward even more. Let me now hand over to Bernardo. Sorry if I took a bit more time here, but I really wanted to try and give you a flavor of what is happening in this space. Bernardo.
Thanks, Paolo. Just, we'll try and be quick here, so we leave as much space as possible for Q&A. Starting on slide 12, we've seen how revenues have grown approximately 10% in the quarter and 10% for the 9 months. As Paolo said earlier, this is how what we discussed in terms of volumes and in terms of the business updates translates into the financials. I think it's important to underline how growth in revenues was very similar, both Nets and Nexi. I guess that's the message I would like to leave you with. In terms of EBITDA, we can see there's been a 2 percentage points accretion year-on-year in the quarter, and the same applies if we look at the nine months.
Most of this accretion actually comes from Nets. We have less of an accretion this year on Nexi as we've discussed in the past due to the fact that we're unwinding or let's say there is the coming out of last year. We have the effect of certain costs, the cost cutting exercise we had last year, which impacts our growth and costs in Nexi this year as expected. 2 percentage points accretion, which is in line with our expectations. On slide number 13, we see how the various geographies performed.
Italy is strong, a strong performance in the quarter with 12% growth accelerating compared to 12%, sorry, versus 2019, accelerating compared to the 8% we had in the first nine months. Again, good signs of recovery from COVID. DACH and Poland had even stronger growth. We have close to 18% growth for the nine months, 19% if you look at it in the quarter, actually Germany growing more than Poland, thanks to the strong exposure we have in Germany to e-commerce and BNPL, which Paolo also referred to earlier. In the Nordics and Southeastern Europe, slightly different dynamic.
Again, there is less exposure, I would say, to e-commerce compensated in Germany and Poland for the slow recovery in terms of coming out of the lockdown in some of the former or in some of the geographies Nets is present in. Plus as we will see later, the effect in the Nordics of the as we had mentioned in the past, the fact that we have renegotiated the last major contract at Nets, and that has hit us in 2021. Moving on to the various division on slide 15, we have merchant services and solutions where we've had a very strong quarter with double-digit revenue growth across the group.
This is true, as I said, both at Nexi and at Nets level. Nets has proved to be extremely resilient in all its geographies. We can see that transactions have recovered very nicely throughout the group. In Italy, we have 15% year-over-year growth for the nine months. This was only partially offset by slightly slower growth in some of the other geographies due to the different phasing of lockdown. I think it's important to underscore how e-commerce is continuing to grow nicely. We have 37% growth in the third quarter this year, 32% if you look at the nine months. This is also sustained, as I said earlier, through a strong performance in Germany and Poland.
Just a word of explanation with regards to a trend which in the past has been different in terms of the growth and volumes of international schemes, which is lower than the overall volume growth. This is due to a factor in Italy of domestic debit cards now being able to transact contactless, transacting on the domestic scheme rather than the international schemes and this has caused this inversion of the trend. On slide 15, we can see the data for Cards & Digital Payments. Even in this division, we have good revenue growth with good volume recovery.
Here, the volume recovery, as you can see, is what we're more used to, where the trend I highlighted earlier of the shift to domestic debit in Italy on contactless transactions is more than offset by the fact that we're progressively moving our domestic debit cards into international debit cards, which fuel the growth in international schemes. Overall, we have strong growth in the quarter also in Cards and Digital Payments. Slide 16, we can see how DBS or Digital Banking Corporate Solutions, as it's now called, performed in the nine months.
This we've discussed in the past is a division in which project-related revenue, which is recurring by nature, even though it's not contractualized, but every year we have project work for our partner banks mainly in the various geographies, has been from a seasonality perspective, you know, present in our P&L more in the first half of the year. Hence, the deceleration you can see from 11% to 5%. 11% for the first nine months and 5% for the last quarter. Overall, I would say that performance, you know, has been in line with our overall expectations.
Maybe in Italy, we have had a bit of a slowdown, which will also impact us, you know, has impacted us this year on MultiPass, as they, we're discussing a potential transaction with UniCredit. That is no longer the case. Hopefully we'll recover some of the lost revenues there in 2022. Slide 17 shows us the cost dynamic. I think it's important to look at the commentary we put into the slide of this slide, where we try and give you a picture of what the cost dynamics really look like if we normalize for last year.
I reminded you that Nexi had a cost containment program, which was EUR 100 million of cash cost cut last year to protect our P&L and our cash flow. This unwinds this year, and hence we have a bounce back of full on variable compensation, a bounce back of travel expenses and the likes. If we normalize for those, you know, I'd say two items in HR costs, for instance, the overall HR costs would actually be flat year-on-year. There is some slight, let's say, increase due to the annualization of people who were hired last year. Overall, basically flat HR costs if we normalize for variable comp.
With regards to other non-HR costs, these will be up 1.4% if we normalize for the growth in volume. Effectively, you know, obviously revenues are growing. We've seen double digit. Our cost base grows by 1.4% showing if we take out the growth in volume-driven processing costs, testament to the fixed nature of most of our cost base. With regard to, let's say, the net debt position of the group, we should look at it with SIA or at least I look at it with SIA included. We have received antitrust approval, and Paolo will speak to this in a second.
Basically, you know, now we have the old certainty, if we look at the combined numbers, both of net debt and EBITDA. As adding on to our last 12 months EBITDA, also SIA's EUR 327 million of EBITDA for the last 12 months, and we include SIA's EUR 820 million of net debt. Our overall ratio is 3.6 x leverage, which is three times if we include also run rate synergies, which we announced as part of this transaction. This we expect to unwind pretty quickly and deleverage with the profile we highlighted at announcement. Just a reminder that 3/4 of our indebtedness is fixed rate.
Moving into, let's say, a potentially higher rate environment, I think we feel pretty comfortable with regards to our capital structure. With that said, I will pass the floor back on to Paolo, so he can take us through the M&A update, including remarks.
Thank you, Bernardo. Page 20, quick update on SIA. SIA reported over the last few days the results for the quarter. The revenues were up 9.3%, and EBITDA was up 12.9%, so very close to the rest of the group performance. Year-to-date results are even higher than this. I think as we had anticipated at the beginning of the conversation around SIA, first half of the year is a bit richer than the second half, basically due to phasing and very specific events, nothing to do with underlying. As far as the closing agenda is concerned, as you know, the Italian antitrust has approved the deal on October 14.
There were remedies, specifically in the areas that are connected to national products. This is certainly consistent with what we believe is very much correct. In terms of remedies, there is only one of them that is structural, and this remedy has to do with what I would call the national clearing, non-SEPA clearing. To be precise, the size of that business is about EUR 6 million of revenues full year, about EUR 2 million-EUR 3 million of EBITDA, more or less, with, by the way, revenues declining because we are talking about products such as, for example, checks. We will be obviously implementing or working to implement these remedies as we speak.
We expect to close by the end of the year. We still have two or three authorizations missing, but they tend to be either a bit more technical or in many cases, due at the end of the process, such as, for example, Italian Stock Exchange Regulator for the approval of the prospectus. Everything else is in line in terms of preparing for the execution of the closing within this timeframe. On page 21, you have a bit broader update on what is happening on the various fronts. You may remember, we detailed in the past, so we're structuring our transformation plan on different work streams and so on and so forth. A quick update on the technology side.
Basically, we already have one new group technology plan and already started to execute around some areas. For example, CapEx savings and the duplication, pulling together, you know, group digital delivery under one hub, optimizing infrastructure, ready to execute processing platform consolidation as soon as we close SIA and many other areas of initiatives. As far as institutional operations action is concerned, we have already started to optimize the knowledge management in the HR side, and we are ready to execute the full integration of Nexi and SIA in Italy, while there are many other operational excellence initiatives already ongoing.
As far as procurement is concerned, we start working on this a few months back, and we have a very detailed plan defined, and we've already closed or close to close already 12 strategic renegotiations. As far as revenue synergies are concerned, we touched on a few of them before, but teams are already working together, starting from the lower end influence. Even on the SIA side, we did use a clean team approach to prepare a very detailed commercial plan to be able to go out as soon as we close in upselling, selling more products and services to our customers in Italy to begin with. All in, we expect to have synergies for about EUR 100 million of cash for next year. Important part of this is CapEx.
As you can imagine, this is one of the years where it's easier to optimize and faster to optimize, but we're progressing on all initiatives. Here I'm talking about EUR 100 million of cash synergies in the year, and therefore, obviously, the exit rate will be much higher than that. Let me now move to page 23. In short, we are basically simply confirming the guidance that we gave you last time when we talked for the first time about the new aggregated group. This is valid, obviously, for Nexi and Nets.
I just remember that we did upgrade our guidance at quarter one results when we were talking about Nexi only, and we're now confirming all of this, about 10% revenue growth. In the year about 11%-13% EBITDA growth with margin expansion, both versus 2021, 2020 and even more 2019. It was a more normal year, about 3 percentage points growth to 2019. Broadly stable capital intensity ratio with anticipation of the M&A synergies. Last but not least, as Bernardo showed you, continued cash flow generation and progressing the leveraging over the long run, starting from a new level that is exactly in line with what the plan was, with what we had announced when we did sign the deals with SIA and Nexi.
Page 24, I will not go through all of it again. Key messages for today, continued recovery and acceleration of volumes across all geographies with clear signals of acceleration of cash to digital payment across, again, all geographies. Very strong financial performance with double-digit revenue growth in the quarter and further margin expansion as well, and a particularly strong performance in Merchant Services and Solutions. Last but not least, progressing according to our plan and marching ahead in putting the new group together as a combination of Nexi and SIA. Last but not least, as I just said, reconfirmed the ambition for the full year. I'll stop there and open up for your questions.
Excuse me, this is the Chorus Call Conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question, please press star and one on their touchtone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. The first question is from Sébastien Sztabowicz with Kepler Cheuvreux. Please go ahead.
Yeah, hello everyone, and thanks for taking the question. I know it is a bit too early to provide any precise indication for 2022, but just wondering if you could help us a little bit understand the dynamic behind your sales and your margins moving into 2022. We are seeing the Nordics gradually recovering. Is it reasonable to assume a kind of acceleration of the trends moving into next year? A second question would be more on a competitive landscape to understand a little bit what is happening in your main market, Italy.
We discussed a couple of times competitive landscape, but on your new markets like Nordics or DACH, who do you see usually in those markets and do you see any fast-growing acquirers in those markets moving from online to in-store and trying to compete on the SMBs or it is not already the case? Thank you.
Hi, Sébastien, and thank you for the questions. Listen, 2022, we'll talk about guidance for 2022 in February. That's when I will try to give you our view for the year. I think when we announced these, we said that our ambition was to obviously, you know, increase the speed of growth of the company on a larger and more resilient perimeter. Our previous pre-COVID, if you wish, guidance was 5%-7% on revenues and I don't know, 13%-16% of EBITDA. Our plan is to do obviously better than that on the back of the new context and the new group profile. Every single region has its own dynamics.
Clearly, we see it as we are preparing the budget. As you can imagine, we're actually having, in terms of volumes, good expectations from the Nordics. There are many other specific dynamics that have to do with, you know, specific contracts, specific areas of investment, so on and so forth. I would really prefer to wait and give you more detailed commentary when we come to February and within a broader picture.
I believe that what we are observing as we speak and the data that I did show you in terms of specific individual sectors are confirming that we see growth potential in the Nordics as well on top of obviously Italy or Germany and obviously places like Poland or Central Eastern Europe. Listen, when it comes down to the dynamics in the other markets, I think that in the other markets we are seeing a little bit dynamics that I mentioned before. I mean, in the SME space you see these new entrants, but to be honest with you, it's really more the same.
We don't see for the moment in our geographies other players becoming more visible or more aggressive. This is a competition that we know and is very much focused on new to card segments. In the commerce space, you tend to see a little bit the same players around. I mean, the Stripe and the PayPal and the like. I would say no major new dynamic there. Clearly, Stripe are making more inroads with smaller merchants on the back of the strong partnership that they have in Shopify or in the markets where Shopify is strong.
As I said before, now we're also strengthening their position through the partnerships with the other content management systems and e-commerce enablers. When it comes to LAKA, I would say a bit more of the same of what I said before, you know, so Adyen being more present and in general international acquirers being present, but nothing really major. As you know, buy now pay later is becoming a bigger phenomenon, and we're actually benefiting from that ourselves with Ratepay. Klarna is becoming more active in the Nordics, and I would say in Germany as well.
You know, it's particularly successful in Sweden, where honestly we're not very exposed, as we discussed in the past. When it comes to online players moving more in-store, in particular SMEs, to be honest with you, for the moment, we don't see a lot of movement. You don't have yet any particularly successful case of other PSPs or account to account providers or buy now pay later providers in SMEs SME space, which is actually, as you've seen, is the majority of our revenues in Merchant Services, remains a very specific space. It's very local.
It is still very much connected with banks, requires a lot of specific attention, and the more we segment, the more we realize that it becomes even more local somehow. I would say nothing really new from that angle.
Thank you, Paolo.
The next question is from James Goodman with Barclays. Please go ahead.
Yeah, good afternoon. Thank you very much. Just looking into the fourth quarter, firstly, I mean, you've reiterated clearly the guidance for the year, 10% growth. You previously specified an H2 growth to get there, I think it was 11%-13%, and obviously we can sort of do the calculation around Q4. But I guess my question is: Is it fair to expect an acceleration perhaps across all your geographies into Q4? I mean, we've got a weaker comparative base, I think, in the Italian business, and clearly there's the progressive reopening across the Nordics, but particularly DACH, I mean, given the travel exposure that you have there. That's the first question.
Maybe to sort of follow up on the EBITDA for the quarter and for the outlook, can you make a comment just on, I mean, we can see the revenue, I suppose, more or less for Nexi and Nets for the quarter, but can you just make a comment on the EBITDA performance between Nexi and Nets for the quarter? As we, you know, look out to the full year there, I mean, you're sort of in the middle of your 11%-13% range at the moment, but depending on what you say about revenues for Q4, is there any reason to expect EBITDA not to sort of grow similar to revenues in the fourth quarter? Thank you.
Hi, James. This is Paolo. Bernardo, you want to take it?
Yeah, sure. The question on the fourth quarter is, and I'd say it's the difference between our guidance and where we are on the third quarter. As you said, the math is pretty easy. What we can say is that we expect the fourth quarter revenue growth to accelerate compared to the third quarter, and this is primarily driven by Merchant Services' performance, which we expect to be strong in the fourth quarter and stronger, if you want, than the third quarter. Overall for the year though, I would take what Paolo said with regards to our overall guidance, which is to grow revenues double-digit. The second question you asked was on what was it?
On EBITDA growth for Nexi and Nets, is that right?
Yeah, just in the quarter, EBITDA between the two businesses, and yeah, the sort of relationship.
Yeah, no. I get-
in the fourth quarter between revenue and EBITDA.
Yeah. In the third quarter, the EBITDA, as I said when we discussed the margin accretion came, you know, primarily from the growth at Nets, right? Where we had a significant step up from second quarter to third quarter, 19% growth in EBITDA. I think that's what we would like to stick to for now in the comment, the fourth quarter EBITDA performance. Having said that, we've confirmed guidance, where you have a guidance for EBITDA growth as well.
Great. Thank you.
The next question is from Stéphane Houri with ODDO. Please go ahead.
Yes. Good afternoon. First of all, I'd like to ask an update maybe on the SIA process, if you have any view on when you will start to consolidate SIA into the group. The second question is also regarding Italy, where you said that there was a 20%-25% growth. Do you see this trend continuing into 2020? If you expect kind of help plan from the Italian government to push further this penetration. Thank you.
Hi, Stéphane. Thank you for the question. Let me take the second one, and then I will ask Bernardo to cover the first one and give you more details to what I've already done. Listen, I think we are very happy with what we are seeing in Italy in terms of growth of volumes in particular on Italian cards. We expect this actually to continue into next year, even if the comparisons become more and more difficult. The reality is that today you still have a little bit of limitations here and there. But honestly, even we project the fourth quarter this year, we expect to continue to see a bit of further recovery and potentially therefore volume acceleration.
We remain quite optimistic on the outlook. Take into consideration the fact that even if most of the activity, I don't know, all the activities are now open, you still have some kind of complexities for some of these activities. Government initiatives, I think, as we've commented in the past, we believe every government will continue to support these programs because of the many positive contribution that it gives to society, the economy, taxation, transparency, and so on and so forth. In this government has decided not to basically stop the cashback.
That was the most visible initiative because basically was not convinced on some of the mechanics. It's obviously fine. As we said in the past, our plans, our expectations are not driven by that. We said the cashback was a very good initiative, a nice initiative, but no basically changing the shape of our profile. The good thing is that this government actually has actually decided and implemented two newer initiatives that are more on the merchant side, and therefore by incentivizing the merchants to basically upgrade their shop equipment and the terminals, basically.
At the same time, basically for one year, they're also supporting new to merchants in terms of giving them the possibility to deduct from their taxes, the commissions that they pay. Changing direction on cashback, but actually a confirmed belief of the importance of supporting digital payments through, I would say the merchant side. We are happily cooperating with as much as we can with the government institutions, but broadly in implementing all of this and continuously provide further ideas, and opportunities. Bernardo, you want to cover-
Sorry.
The process one?
On SIA, in terms of the process, there's a bullet point on slide 20, where are we? We're expecting BaFin approval anytime soon. It's a pretty, I would say, administrative process here. There's actually a typo in the presentation. Danish Business Authority have approved the transaction, and then we will need to have the prospectus with the pro forma numbers approved by Italian Stock Exchange regulators, similarly to what we did with Nets, and that should happen again somewhere in mid-December. We now have, I'd say, deal certainty given that antitrust approval, which was the one where most of the work needed to be done, has been obtained, and we're looking to close at midnight of the 31st of December.
That means, going back to your question, we will be consolidating from the first of January next year, so you'll have a full year of consolidated numbers for SIA. We will obviously, as part of this, provide you with comparison numbers for 2021, which includes SIA and Nets as if we had bought it from the first of January of this year. You will have the same perimeter, and the same will go with the database that Daniele puts on the website. This, by the way, is also true for the UBI Banca acquisition, which closed on the 26th of October, but has retroactive effects from the 1st of January.
The same will happen when we close the Alpha Bank deal, which will be at some point in the second quarter next year. We will always strive to make sure you have a meaningful like-for-like comparison of the same perimeter. The closing of SIA is midnight this year, so from first of January next year, you have the consolidated numbers in the actual accounts.
Okay, thank you. I have a quick follow-up on Germany. Did you see any weakness in Q3 compared to what you were expecting? Are you concerned about the rise in number of COVID case that could probably or potentially have some impact on your fourth quarter? Thank you.
Well, I think in Germany, we see super strong, as you understood, e-commerce in particular, let's say, and in other areas as well. In terms of COVID, yes, I mean, you're right that, on the fact that, in the third quarter, there was still restriction in Germany more than in the other geographies. There is an index that is actually called the Stringency Index that is quite telling from this point of view, and Germany was across Europe, the country was still restrictions. I was there two weeks ago, and you could really feel it. I was there with Bernardo, you could really feel it, from the smaller things in hotels to the more visible ones.
This is actually, as we said before, affecting in particular, I would say the LAKA sector, the larger merchants, where we have, as I said, still an important exposure to the travel industry. I would say there are two angles that are particularly relevant, that are kind of intersecting between international travelers coming in and business travel more broadly. As you can imagine, while in places like Italy you have a huge amount of inbound from tourists, so international travel being tourism in the summer don't have that many people going to Germany to enjoy the summer. It's actually the other way around. The traffic there is much more business related and this is still suffering.
Again, we've seen a good recovery also there. Listen, on what is happening these days, difficult to comment, honestly. I think that I need to understand exactly what will happen in terms of measures. I was reading before coming the new news, before coming into this call about cases growing again, but at the same time, the measures that we're thinking about implementing were not really comparable to lockdowns and stuff like that. I think they were talking about asking the green pass to enter in certain places like restaurants or clubs and stuff like that, which is something that in Italy is already happening. Let's see. I think it is really too early to say.
I think the good news is that, you know, whether more or less, the percentage of people who are vaccinated is now high and therefore, with the cases increasing, the impact on the health of the people is more limited and therefore hopefully the need for restrictions.
Thank you very much.
The next question is from Hannes Leitner with UBS. Please go ahead.
Yes, thanks for letting me on. A couple of questions also from my side. Maybe on the partnership strategy with ISV, maybe you can talk a little bit about the economics there. Is there geographic kind of statistics around what is currently served by those partners, especially then maybe also breaking it down between in-store and online. Maybe you can give some more color on e-commerce growth for the group. You have stated here e-commerce revenue growth, but it would be helpful to understand also the transaction volume growth. Just in general, did you see throughout the quarter as it developed some shift between in-store and e-commerce. That's it.
Hi, Hannes, and thank you for your questions. Let me start from the first one here. Maybe we can follow up more precisely. I think in general, as I said, these partnerships, I mean, they're happening, I would say in every single geography, and probably they're actually a bit more new to Italy, even if we are very active, are happening with two types of players. Obviously it really depends on geography. Let me give you the Italian case, it is probably a more closer one. If you take in Italy, there are two types of players. You have the ones that are coming from the ERP systems, the CRM systems, and they are keen to integrate payments.
They're active across merchants from all possible industries. Sometimes they have products that are more specialized for certain industries. We're partnering the same partnerships with the two super key ones. That at the same time, you have a bit more developments with the ones that we'd call vertical ones. I don't know, I'll give you an example, Farmakom that is serving pharmacies, just to mention one of them. We're really talking about, I mean, in Italy, talking about statistics, we have 48 of these partnerships today.
Denmark, more than 100, Sweden, more than 100, Norway, almost 100, Finland, more than 100, Germany, more than 100, and so on and so forth. There are many, many of those. The economics vary a lot depending on what is the relationship. Sometimes these partnerships are more technical integration, so there is not a very specific economy partnership. In some other cases, like the one I was mentioning before, instead you have a go-to-market initiatives. You invest together, you go to market together, and you share the benefit together. Very, very different situation, but also evolving in an important way. As far as I leave it maybe on e-commerce volume and revenue growth, you can comment, Bernardo.
On the shift, this is a bit more a qualitative question, but it's a very important question. The thing is, to be honest with you, over the last, I would say few quarters, we've not seen any further acceleration of e-commerce, in terms of, people moving even furthermore, even more from physical to e-commerce. If anything, you had that in some sectors, the opposite direction, and therefore people are keen to go out and shop again in the physical world. I guess, obviously because our stores are open again, but more in general, people being keen to go out and socialize and buy and eat, in real places.
I think that, I mean, the trend to more e-commerce remains there. It's interesting because some of the acceleration that we've seen when COVID started and in the first period of COVID, then now is going down a bit in certain cases. Again, in general, the trend will continue. Bernardo, you want to comment on
On e-commerce?
Yeah.
Yeah, sure. I mean, we saw that revenues grow, you know, in the third quarter, grew 36%-37%, if I remember correctly from the slide we had in the documents. Volume growth was actually approximately 13%, you see it on slide 10 of the document. Within this, clearly SMEs are growing. LAKA suffers from the fact that LAKA has an e-commerce component, including travel high impact, which, you know, has caused it actually to shrink in the quarter. If you look at LAKA without the high impact, it's actually growing 9%. Overall e-commerce volumes as I said are growing 13%, and it's a mix of both.
It's about EUR 25 billion e-commerce revenue volumes in Q3?
Approximately 23.
For the group?
Yeah, for the group.
Okay. Okay. Thank you.
The next question is from Sandeep Deshpande with JP Morgan. Please go ahead.
Thanks for letting me on. I didn't hear all the questions, so please excuse me if some of this was asked before. In your Nordics or in your overall business, you're saying that the LAKA accounts are lagging behind the recovery compared to the SME accounts. We have seen quite a different effect at players like Adyen. Maybe you can explain why Nexi is different in this regard as such, really? Secondly, is there an explanation why you think that the DACH regions are lagging so much behind in terms of the recovery in terms of the volumes and thus the revenues as such? Thank you.
Hi, Sandeep, and thank you for the questions. Listen, on LAKA, the dynamic that we are observing is very much driven by the industry mix, and it's very, very clear. I mean, if you net it from the high impact sectors like airlines, to use the typical example or travel agencies, and so on and so forth, the overall volumes are growing 9% compared to pre-COVID levels. Actually, even more so in places like Italy. Therefore you have growth coming back despite the fact that there are still some restrictions around.
I think that the different dynamic that you observe with Adyen is probably driven by two elements. Number one is that they're less exposed to travel sectors, I think more broadly. Number two, you should also consider the fact that they're actually entering new markets and expanding further. If you are pointing precisely on the relative dynamics with a player like them, I go back to what I said before. Clearly, you know, Adyen is a very strong player that we immensely respect to be very, very clear. We continue to see them successful when they play on a global merchant with global CRM systems integrated with a lot of alignment, more limited in store.
We continue to be successful also against them, you know, instead, you have a more local or regional merchants, more locally integrated, that require local assistance and require more specialized solutions and more customized solutions, so on and so forth. When it comes to DACH is two elements that explain the dynamic there. I think it's very visible when you go to page eight of the presentation where you have the volumes for DACH by micro sector.
As you can see there, on the one side, there is a mix effect, and the mix effect has to do with the fact that Nets, not Germany per se, but Nets, was more exposed and still more exposed in terms of mix of sectors to the high impact sectors in terms of volumes. We are talking about in terms of volumes to travel and airlines in particular. This exposure has been diminished over time, but still, is a relatively high exposure, and therefore there's a mix effect in Germany. When you look at the other sectors instead, you know, you see a very strong performance in the basic consumption growing anywhere around 30% + versus 2019.
Also, you know, the more discretionary products and services sectors coming back to growth. At page nine on the right, you see some very visible examples of sectors growing double digit in that space, as well. I would say it is more driven by the exposure to travel in the mix.
I'd say also, Paolo, the Italian SMEs were under-penetrated. I think there is structural under-penetration there, which is now, we're now closing the gap.
Yeah. Thank you.
The next question is from Mohammed Moawalla with Goldman Sachs. Please go ahead.
Yes, good afternoon. Hi, Paolo. Hi, Bernardo. I had a couple as well. Firstly, just, you know, coming back to sort of the progression in the back end of the year, given the easy comparisons, and I think you've kind of grown broad-based across both Core Nexi and Core Nets, you know, is there kind of essentially your guidance being perhaps a bit more prudent or conservative? And if so, what is the kind of thinking behind that prudence? Secondly, a question around, again, on sort of competition. Here, I just wanna nuance it a bit more in that, there's clearly an appetite for larger merchants to take kind of more traditional omni-channel.
We also see the likes of sort of Adyen, moving in with a kind of platform approach to address the longer tail of the mid-market. Now, what's your sort of strategy to sort of compete against that? And if I kind of nuance that further, you know, the Nordics is a fairly well-penetrated market. And, you know, we have, you know, a number of kind of digital-first players there. So what's your sort of strategy to perhaps defend your position or even kind of grow your business there? And then the last one for Bernardo. When we look at the kind of EBITDA performance, this was quite strong. In terms of sort of the synergy realization at Nets, it seemed like there was sort of mid-teens type cost savings.
Could you give us a bit more color around where those savings came from? As we go forward, what's kind of the path and what are the kind of levers in terms of the synergies that you expect to extract to sort of hit the milestones for the Nets payout to be achieved? Thank you.
Hi, Mo, and thank you for the three questions. I will cover the second, and then I will hand over to Bernardo. It's obviously a very, very good question. Let me try to be explicit here. First of all, LAKA, as you understood for the group, is about 5%, a bit less than 10% of total revenues. It's about 9% of total merchant services, about 40%-60%. We're talking about more or less 5% of total revenues to begin with. Nevertheless, we believe it's actually an opportunity for the new Nexi, in particular. To be clear, you know, the competition from players like Adyen is there.
As I said before, they are very good. They're more focused on certain markets than others. I'm sure they will try to move a bit more into markets on smaller players. At the same time, you know, I think the good news is that in those markets, the markets where we're present, we are very entrenched, and we are actually investing to build stronger in the camp of omni-channel products and services, omni-channel integration, analytics capabilities, and that would continue.
You will see a nice competitive dynamic where they will probably try to do it, and we will defend our turf from the back of being local, but also scale that up, and therefore being able to invest in new products and services. At the end of the day, if you wish, each one of the two of us is strong and weak at the same time based on our strategies.
In a sense that the key strength of players like Adyen is the one platform theme that has many positives, but also a lot of limitations when you have to start playing with smaller players, more complex players, more integrated players, merchants, I mean, that don't have integrated CRMs, that are less sophisticated, that require a lot of local care, and so on and so forth. Our position is the other way around. It's true, you know, we are more complex in terms of technology set up and platforms, so on and so forth.
At the end of the day, it makes us quite effective in serving the local needs, in being closer to the customers, being able to integrate effectively with their needs, and for example, segmenting by industry more effectively for what is relevant locally. I think we continue to see this dynamic and each one of the two of us will do its best. I think the good news is that in many cases, the market that is growing, yeah. You know, I'm sure that there will be space for players like Adyen, will be space for players like us, and customers will choose depending on what is the prevailing need that they have. Bernardo, just to add?
I think going back to also I think James asked a similar question earlier on, so I can only go back to what we said earlier. We expect the fourth quarter to be better than the third quarter in terms of top line growth. That you know I think with regards to the degree of prudence in this, we won't comment on that. Our guidance is our guidance. We're committed to deliver it. Hopefully, we'll do better, but that's what I'm prepared to say on that front.
With regard to Nets, as I mentioned earlier, the EBITDA growth in the third quarter for Nets was 19%, 18.8%, if I remember correctly, 19%, compared to 2020. I expect that to improve in the fourth quarter of this year. I think that's also implicit in what we had said some time ago, how we were aiming to hit an EBITDA for Nets, which lies within the earn out range for Nets. It was agreed with the sellers back at the end of last year.
This growth in EBITDA, which is obviously, you know, fueled by top line growth, is also aided by the realization of synergies within Nets. I think that was your question, Mo, because synergies coming from the Nexi-Nets integration, while those this year are, I would say in total approximately EUR 10 million, mostly CapEx, a small portion of that will be in our fourth quarter numbers. With regards to next year, Paolo has already said we're targeting EUR 100 million of cash synergies from the three entities. Approximately, let's say 60% of that will be P&L synergies, and the rest will be CapEx synergies.
Okay, good. Thank you.
The next question is from Alberto Villa with Intermonte SIM. Please go ahead.
Hi, good afternoon. Thank you for the presentation. I have just one question on the buy now, pay later business. Can you give us some color on the revenues you are generating in this unit, the growth you're expecting, and if you have any thoughts on the strategy on this segment going forward, if you want to expand it or to exit, or what's your thought on the opportunity there? Thank you very much.
Our strategy in the space is, at the end of the day, twofold. Now, we are happy to have this asset that is called Ratepay. Just to be explicit, this is operating at the moment in Germany only with potential to expand elsewhere at some point. It is buy now to pay later, it is focused on the merchant side. We don't have a consumer-facing strategy like the Klarna. We really partner with the merchants. They normally white label and therefore they're really the best possible partner for merchants. That's where they are successful. The business is growing very rapidly, depending on the quarter, anywhere between 50% and 100%. I think last quarter was about 70-75. It's become a sizable business.
We don't provide the details of this, but it is getting bigger and bigger. We're talking about tens of millions euros per quarter now. This is one side of the strategy. At the same time, we also recognize the fact that if you have as your core e-commerce strategy the one of providing a great acceptance to merchants, now you have to be able to provide the locally relevant buy now pay later methods together with other alternative payment methods. Therefore, in our geographies, we're also offering more and more the possibility to use other buy now pay later methods that we partner with. I believe this will continue to be the way forward.
Now, clearly, the other way around works as well. Therefore, a company like Ratepay, because it's technically our company, is also partnering with other PSPs. In Germany, they are used by the Adyen's, the Worldpay's, the Unzer, and the Computops, and you name one. At the moment, we have these two parallel strategies. It is very, very, very clear that, going forward, we continue to partner with more and more of them, and we're happy owners of this fast-growing and sizable buy now pay later asset. Bernardo, anything else?
No. You said it. 75% growth.
Yeah.
Okay. Thank you.
Thank you, Alberto.
The next question is from Paul Kratz with Jefferies. Please go ahead.
Hi. Thank you for taking my questions. Just three questions from my end. I think firstly, when I look at your net figures on the presentation, that excludes volumes from Dankort. So it'd be helpful if you maybe give us some color over how kind of the volumes look including these figures, and if they differ materially, I guess, from what you presented. The other thing that I'd also be interested in hearing as well is on the girocard side. You know, I appreciate it's a minority of your volumes in Germany, but you know, how have the volumes on the girocard side trended, where historically, I think you guys have been actually a share gainer in that market, admittedly off of a relatively low base.
I guess the final question is a little bit bigger picture, but when we start thinking about capital allocation of the combined entity, I mean, you guys will be able to delever the business relatively rapidly at the current pace. I mean, is there any kind of updated thoughts you have around potential M&A, whether that switches maybe more towards e-com, maybe looking at assets, for example, like a Computop in Germany to maybe strengthen your presence in e-com? Thanks.
Hi, Paul. A good mix of detailed questions and super strategic ones as well. That's great. On the first two, I think we'll come back to you with a bit more detail if it's important to you. I think in general, and on the second one, on girocard, we are clearly challenged in that space, and therefore, we want to grow in that space. Never forget that, Concardis is coming from a position where there were mainly acquirers for international schemes, a little bit like what CartaSi was in Italy back five years ago, six years ago. From there, the move there over the last year or two into offering the full package, the terminal and basically acquiring across all schemes, including girocard.
I don't have the tens of the numbers, but clearly that's a space for development. On Dankort, I think we'll come back to you because honestly, we don't have a precise answer. More broadly, instead of capital allocation, coming to the very strategic question. Listen, our focus today is really on getting the three companies together, delivering the synergies, and most importantly, building a stronger company for our customers, our people, and our shareholders. Along the way, as we always said, we will continue to consider opportunities, but it's our duty somehow. We really focus on the ones that makes absolute sense. For us, I think what we've done with UBI or Alpha Bank is very clear.
We'll be looking at other stuff what we didn't do for very good reasons, but it was our duty to look at it. I think we'll continue to do so going forward. As you can imagine, we cannot talk about specific cases. Take into account the fact that as we deleverage and we divest, with the potential divest also assets that are not core and so on and so forth, I will also consider putting more investments, more organic investments, not because there is always this feeling that M&A is easier than massive organic investments.
Actually, you know, given where we are as a company, given how much we are keen to invest in geographies such as Germany or in spaces such as e-commerce, that is also another important area of investment. So I believe you see a portfolio of those, but really our focus today is, you know, to deliver in what we have already committed to you.
Thank you.
Bernardo is trying to give you a precise answer on what?
It's probably best if we come back to you on this one.
Okay, let us come back to you before we give you an answer that is not reliable.
No, that's really fair. Thank you very much. Just maybe one quick follow-up. Is on the divestment of non-core assets, I mean, how should we start thinking of that? Is that, you know, part of a regular portfolio review that you would do on an annual basis, or are we just talking more about, you know, concessions that would come as a result of antitrust?
No. I want to be very clear. I think, actually, thank you for giving me the opportunity to clarify this. On the antitrust thing, we will have to do, because it's a request by the antitrust. But again, it's about a business that is EUR 6 million of revenues, probably two or three will be that, declining revenues because it's a legacy business, it's checks and the likes. So that has nothing to do with the divestment strategy. I don't even know how much that is worth. We are doing a lot more work, but we're really talking about a very, very small thing.
Instead, what is very much right is the first of the two things you said, that is an ongoing and regular strategic review of our portfolio of assets to make sure that we put our resources and focus and energy on what is strategic for our future. Instead, we let the other assets to be owned by better owners than us, for whom they are strategic. Never forget as a benchmark data, even before the company was listed, actually, we did do 5 or 6 M&A deal where we bought stuff. We did do 12 where we sold stuff. We like to clean as much as possible the portfolio and focus and we continue to do it. Some of the business, we love them.
We would love to continue to have them, but actually it doesn't make sense for them and for us. It's very rational. I think we always need to be very rigorous. We continue to be very rigorous. I mean, look at what, for example, also Nets has done when they sold their corporate services and instant clearing services to Mastercard. By the way, it's a very interesting and attractive valuation. We'll continue to do so. I think it's good discipline. We'll try to give you an update on this ideally in February together with the outlook for the new year.
That's really clear. Thank you very much.
The next question is from Alexandre Faure with Exane BNP Paribas. Please go ahead.
Hi, good afternoon. Thanks for squeezing me in. Had a couple of questions. One is going back on your sort of own alternative payment methods with account to account in Poland or Ratepay in Germany. Was wondering if you could go back on the economics of this payment method and whether they're accretive to your take rate, for instance. And as a side question to that, I was wondering if you view them as differentiating factors to win wallet shares with a given account. You know, have you found yourself in a position where you went to a merchant to sell on their Ratepay and you ended up selling, you know, a much wider range of services? That'd be my first two-part question. Second question is on Italy this time.
I think we're you mentioned in the past that there's quite a bit of appetite to move to digital payments in Italy at least from the consumer side. I was wondering if you have your own initiatives to perhaps lower acceptance costs for merchant and accompany this transition to digital, new pricing plans, low-cost terminals, any specific initiatives you're pushing as we go into 2022. Thank you.
Hi, Alexandre. Understand APMs, both economics and strategy and Italy, if we're doing anything to lower cost for merchants. Well, listen, let me start from the second one, around Italy. I think the good news for merchants actually is that prices are structurally going down in our sector. It's absolutely normal because when volumes go up, unitary prices go down. It's almost a law of economics. Unless you have monopolies or duopolies, which is not the case in our industry, that is very competitive. The good news is that the combination of volume growth and unitary prices going down is positive, and on top of it, you also have value-added service.
Prices tend to go down. As always happened, if you like, the one thing that we are doing more proactively, and this is driven by competitive dynamics, is also to design propositions for the merchants that are newer to these to these products and services, not the typical new to card segment. We are offering a nice entry levels, almost try-buy type of situations we believe is important. Although it is not necessarily on the rates because a customer that is new to card doesn't know how much they will use. For them, the barrier to entry is more the terminal.
That's where, you know, we have launched as well the mobile POS terminal that doesn't have a fixed rate per month, but is basically a small one-off that depending on the campaign and so on and so forth is normally below EUR 50, EUR 49. But again, with a higher, you know, merchant fee, then we upgrade the merchant to a proposition that is more suited for higher volumes. When it comes instead on the APM methods and so on and so forth, let me try to give you the overview, then Bernardo can help me and comment a bit better. First of all, economics.
Clearly, the economics are very different if you're talking about APMs that you own or APMs that you distribute and you partner with. We should distinguish in between account to account and buy now, pay later for the ones that you own. Buy now, pay later has an amazing growth. Profitability-wise is actually lower because obviously it comes with a certain cost of risk. It is very much under control, but it's actually material. By the way, in a specific case, Ratepay is also investing in growth, you know, as well as every other player in the industry. I'm sure you've seen the numbers from some of these players and they are quite explicit about it. Actually, Ratepay is profitable.
This is good news, but keep on investing in growth. Account to account is normally more profitable. There is a cost to develop the ecosystem because it's a two-sided business model. You have to sell it to the consumer and sell it to the merchant. Once this ecosystem is developed, normally it comes with nice variable margins. Instead when you distribute, you can really have any type of deal, to be honest with you. The more you are the one facing the customer and distributing to the customer, the better the economics are. If it is just a technical integration, then your economics are much lighter. Actually, for some of them, the economics are quite comparable with the ones that we have on cards, to be clear, you know.
I cannot give you a specific example because I could, but I cannot in terms of disclosure. I have in mind at least a couple of examples where the economics are exactly like one in Italy and one in another place where the economics are basically the same that we have on cards. Broader strategy, I mean, I think I'm not sure I understood exactly your question because the communication was not very clean. If your question is how do you guys balance on the strategy when I have a strong APM, do I give it to everybody or to expand it or do I monetize it by differentiating myself as on the acceptance side?
I think that's a very, very, very relevant strategic question that does not have one answer that is always the same by product and by market, because it really depends on the specific market dynamics. Again, if I use the example I said before on buy now, pay later, it's quite clear, no? Ratepay is a buy now, pay later acceptance method on basically every merchant e-commerce PSP in Germany. Why? Because we have a lower market share, you know, and therefore, if you were leaving it only to us, it would be too much of a restriction for the full potential of the product.
Maybe, in another market with a different, starting competitive position or market shares, you go in a different direction.
Sorry, I'm on the margin, yeah. I think we need to distinguish, as Paolo did, between account to account and BNPL. Starting with BNPL, we should really think of it as a different product, a different business. In terms of the margin accretion or the take rate accretion, it really depends where you cut the P&L because there is a cost of risk element there that you have in BNPL, but not in account to account. Take rates will be higher, but then if you go to the very bottom line right now, obviously, as you've seen in some of the other larger listed players in the BNPL space, you have the cost of risk element that you need to take into account.
Whereas account to account, I think in terms of the top line, you should think of it as being priced in the various geographies in which it's present, more similar to domestic rails. Depending on how lean or efficient they are with the margin being similar to what a card acquirer could be in that same market. In terms of the margins, it shouldn't be dilutive.
Got it. Thank you. Thanks very much for the color here.
The next question is from Simonetta Chiriotti with Mediobanca. Please go ahead.
Hi, good afternoon. Just a quick question on synergies. During the presentation of the first half results, you mentioned the possibility of increasing synergies by 10% in the long term. Is it something that you are still considering possible? Thank you.
Simonetta, this has a short answer. Yes.
Good.
Yes, absolutely. I mean, as we're defining better and better plans, that's the reason why last time we gave you these highlights, this time we're giving you know, our outlook for next year. We'll continue to do it. We'll continue to update the more we have visibility. To be honest with you, it also goes in phases, in the sense that obviously, when we did close to this, we had our own view that was outside in on the opportunities. Then as we are closing the deals, we do a first round of inside out view of the opportunities in the long term, and then we go into the more year by year detail plans. This is a little bit what is happening.
We'll continue to keep you updated, but the short answer is yes.
Thank you.
The next question is from Antonin Baudry with HSBC. Please go ahead.
Hi, good afternoon, everyone, and thank you for taking my question. Two, if I may. I would want to have your view on the current macroeconomic environment, especially inflation. We see inflation coming in the U.S. and certainly in Europe soon. How do you see inflation impacting your revenue growth? I mean, your revenue is partly related to value of transaction. At the same time, inflation could decrease the number of transactions. How do you see inflation on your revenue growth? My second question is about M&A.
I understand that your focus will be to integrate the two acquisitions you did, but how do you consider evolutions of your model, to address adjacent segments like business to business payment, for example? Thank you.
Hi, Antonin. Let me take the second one on M&A, and then I'll pass over to Bernardo because I'm a poor engineer, he's an economist, so he can probably give you much more.
Yes, right.
Insightful for what we're looking at. On M&A, I think here we will have to remain focused not only on what we do, but also what we consider, because also the screening opportunities or engaging in processes is by itself an organizational cost, and we are trying to stay as much focused as we can. I reiterate probably what I said in the past, the two key areas of focus for us where we engage and remain our priorities remain at the end of the day merchant. I mean, first of all is mainly merchant services.
First one being merchant books especially in the markets where we are already and on relationships that we already have, because for us it's important to follow our banks and other strategies and partner with them, and this is what we've done, for example, on UBI, on Alpha Bank as well, and so on. Secondary is more broadly e-commerce, both in terms of geographies and also capabilities. If you wish, as an extension to this, you could also consider this world of a software that can be effectively integrated with payments, and this small example of orderbird is a nice one. That does not mean that we go after many of those necessarily.
We will pace it very, very carefully, and we really want to understand it before we do it also because, like, given the position we're in the market, the partnerships are also very good, and therefore, we want to learn more about the business. Clearly, e-com and e-commerce, multi-channel and merchant books are for us the key areas. Bernardo?
On inflation as well, thanks, Paolo, for the economist, but I'll give you my ten cents worth. I don't believe Europe will definitely lag the U.S. and probably not have such a steep increase in inflation even though it's lingering. Our view or my view is that our business is actually geared to benefit from inflation. As you were saying, 2/3 of our revenues are volume driven, and most of that comes from the value of the transaction. Conversely, our cost base is predominantly fixed, and obviously there may be some wage price inflation. Europe tends to be stickier or more resilient than the U.S. on that front.
That should give us some protection, but more importantly, we pay our processing costs on a per transaction basis, so we'd have a nice spread between revenues growing because of volume growth, thanks to inflation, and as you were suggesting, lower transaction numbers with lower processing costs. In addition, on the capital structure front, I mentioned it earlier. I think two, 3/4 of our capital base is, or our, you know, our fixed income capital base is effectively fixed rate. You know, any inflationary pressure should deflate the value of this debt, so beneficial to us.
In the very short term, I think it's EUR 1.5 billion of our liabilities are indexed to EURIBOR, but EURIBOR is floored at zero, and therefore we have some absorption capacity in that built into our debt structure. Overall, net net, my take is that, you know, we're net beneficiaries of any inflationary pressures.
Thank you.
As a reminder, if you wish to register for a question, please press star and one on your telephone. Mr. Bertoluzzo, there are no more questions registered at this time. Do you perhaps have any closing comments?
Well, thank you. I think that's a simple comment. Thank you for being with us. Thank you for the many important questions raised across numbers, outlook, and strategy as well. I think it's important to have always that at the core as well. Again, simple messages for us are continuing the volume recovery across all geographies. I think this is really important strategically, not just financially for us. A good, strong financial performance across the board in revenues and margin as well. Last but not least, that we continue to progress in the group coming together to have a stronger company for the future across the board.
Thank you very much, and looking forward to see many of you over the next few days and week and hopefully in person and it's great to see that some of the meetings are starting to be in person again. Thank you very much. Enjoy the rest of the day.
Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.