Good morning. Good morning. Welcome to Nexi Capital Market Day. Welcome to Milan for those of you that are flying from distance. Welcome to those of you that are here in the room. Thank you for making it. It's a real pleasure. Welcome to the many that are connected in video. If I can, a special welcome to the many new investors that are with us for the first time. We have many, many conversations with many of you over time in one-to-ones, in meetings, in conferences. A Capital Market Day is always a special opportunity because you can step back, you know, look at it a little from distance and actually go through the progress we made so far, how we see the market going forward, and most importantly, our plans for the future.
This is what we'll be covering today. The key message of this Capital Market Day, the key message of today is obviously in the title. Nexi is today an enduring Platform, an enduring business Platform, even more than a technology platform. Now, that thanks to its resilient growth, combined with continued focus on efficiency, now can and will continue to generate cash, more and more cash over time and then distribute it to the shareholders. Over the day, over the morning, we'll provide you with as much evidence as possible. We'll go into a lot of products initiatives in the latter part of the morning, to give substance, to give content to this title, to this super strong conviction that we have.
Let me start from where we left it, about three years ago when we were in this same room, for last Capital Market Day. Since then, we have made a lot of progress. We know not necessarily all the progress we would've wanted to do, but we definitely made a lot of progress in an environment that has been quite articulated, I would say, from the macro point of view, from the market point of view. Our revenues did grow from EUR 3.1 billion to EUR 3.6 billion. In parallel with that, our EBITDA did grow from EUR 1.6 billion to EUR 1.9 billion, expanding EBITDA margin by 250 basis points. A very high margin to begin with and with an exceptional EBITDA margin expansion, very much at the high end for the sector.
Most importantly, we did double the cash that the company is generating from EUR 400 million in 2022 to EUR 800 million last year, generating more than EUR 2 billion over the last three years. This has allowed us to reduce very materially leverage from 3.3x to 2.6x and become, at the end of 2024, investment grade for our very first time. In parallel with that, these cash generations allowed us to start returning capital back to shareholders with our first buyback in 2024, our first dividend in 2025, for a total of EUR 1.1 billion over the last three years. Today, Nexi is an enduring Platform, a platform that is here to stay, it is here to succeed in the future. Why? Because it's characterized by three key characteristics.
The first one, it's a platform that has a strong, unique positioning. Clearly, we are a critical European infrastructure, very entrenched in our local ecosystems, and we always hear about the need for more Europe. We are at the center of that. We can be at the center of that. Second, together with that, we are a unique combination of our unique scale together with a strong local in-market entrenchment. Two characteristics that are really necessary, we believe, to succeed, at least to succeed in the segments that are the real focus for our company. This strong, unique positioning is combined with high quality, resilient growth that derives from a combination of things. First of all, exposure to a market that will continue to grow and will also expand in terms of opportunities as the complexity of payments evolves.
We have a diversified portfolio of products, geographies, customers that is a richness for us. We are focused on the most attractive Merchant Services segments, and we'll come back to that later on. Last but not least, now we drive growth out of a portfolio of defendable large core engines and very attractive accelerating growth engines. Last but not least, when we look at the future, you know, when we think about the new themes emerging in our sector and more broadly for businesses, we are deeply convinced that we have not only resilience, but actually we see opportunities in this future. For example, payment complexity, growing payment complexity is something that we believe we can leverage and we are already leveraging.
Together with it, the hot topic of the day, AI, GenAI, agentic AI, agentic commerce, not only we will leverage on that, we really believe it can be an opportunity for our company. An enduring Platform for these very unique characteristics. Today, we'll cover these topics. We'll start with a session that will give you an overview of where we are, how we see the market and our plans for the future. We'll have a break, and then we'll have two deep dives. First one, how we win Merchant Solutions, and second, how we grow value in Issuing Solutions. Value, we believe, is the real theme in Issuing Solutions. After that, I come back on stage for a few more minutes of closing remarks, and then we'll have about an hour for your questions, comments, reactions.
Now, let me jump in the first session. I will at some point call on stage Bernardo with me to cover obviously the financial plan and all the, those aspects. The key messages of these sessions are well summarized on this page. The enduring Platform to power cash generation. Why? Because we have a unique position in a growing dynamic market. This unique position is allowing us to have enduring growth from a diversified attractive portfolio. We'll talk about mid-single digit structural growth here. That combined with a continued focus on efficiency, further powered by AI, will allow us to continue to have strong cash generation and distribution to shareholders. This formula will continue for the very long term, thanks to the structural long-term resilience that we will talk about later on.
Now, let me jump into the first part, the one on who we are today, market and our positioning. Here I will have to ask to those of you that know us well to be a little bit patient because I will be repeating things that you heard many times. We are really doing it for the benefit of the many investors that are newer to Nexi. For those, for them, it's clearly useful to understand first, you know, the company and its portfolio of businesses. Let me go into it. Nexi is very unique for its leadership, for its scale, for its reach. Let me just point out, we serve more or less 2 million merchants across our geographies.
We serve more or less 140 million cards, and this is giving us many opportunities for growing value, upselling, cross-selling, so on and so forth. Capabilities. Let me again underline more than 3,000 people dedicated to technology development, product development, future development. You know, with five digital factories, we have added that one fully dedicated to AI agents development. As a consequence of all of this, cash and capital distribution. The company is operating with a diversified portfolio of solutions for merchants and for financial institutions. We are articulated with three business units. The first one is looking obviously at Merchant Solutions, about 57% of our total revenues. Here we serve in particular SMEs, mid corporates, and mid market eCommerce. The second business is Issuing Solutions, which is about 30% of our revenues.
Here we have the full portfolio of solutions from the more traditional processes one to the issuing products, which is very unique of Nexi. Last but not least, with about 10% of our revenues, digital banking solutions where we serve normally financial institutions and corporates across account to account, corporate payments, open banking and a few more solutions. We look at the presence across our geographies and the characteristics of the presence that we have across our geographies for these businesses is focusing on Merchant Services and Issuing. It is a fairly diversified presence with a mix of leader and challenger positions.
If we start with Merchant Services, you know we cover this part of Europe vertically from the top of Norway to the Southeast part of Europe, here with Sicily and Greece. We are leaders in Italy. We are leaders in Denmark, Norway, and Finland. We are challengers, I would say, a little bit everywhere else, you know, with slightly different positions, but we are challengers in all of them. We operate very much with banks, basically in Italy, Croatia, and Greece, where everywhere else, you know, our approach to market is only direct and with other type of partners, including ISVs. When it comes to Issuing Solutions, we have a little bit of a similar picture. In Issuing Solutions, we are leaders in Italy, Norway, Finland, and Denmark.
The Baltics as well, even though they are very little. We are mainly processor or challenging processor, challenger processor in the other geographies. Here, the additional element that's important to always keep in mind is that in Italy we are not just like the other issuer issuing players, because we are actually an issuer ourselves, a co-issuer together with the banks. It is a very successful business model that we are now starting to export into the rest of Europe. Bringing it all together, our diversified and resilient business, geographical, and customer portfolio. Business mix, we already covered. Geographical revenue mix, Italy is still more than half of the business. We are happy with that because it's a very attractive market. We believe it remains the most attractive market in Europe, Nordics, DACH, and CSE.
When it comes to customer concentration, our top five customers represent more or less 22% of our revenues. The very good news is that most of these revenues are already secured for the very long term, and Bernardo will come back to that later on. Now, moving to the market. As you know, as Nexi, we are exposed to the most attractive markets of Europe. In these markets, penetration did grow since last time we met. Today, the average penetration in our markets for digital payments is about 36%. Especially, you know, if you focus on DACH, Italy, you know, this is very much below the European average of 46%, and very much below the average penetration that you have in the other markets where we're not present, which is at 55%.
Yes, penetration will grow, but there is a lot of more room for secular growth in our industry, and in particular, in our markets. We expect the market to continue to evolve penetration by more or less 1 percentage points- 1.5 percentage points per year. You know, and these, together with the growth of the economy and consumer spending, which is the one that is most connected to us, we expect the market to evolve over the next basically five years, about a 5 percentage point- 6 percentage point with percent in terms of value of transaction overall in our geographies. Clearly, on the higher end of this range, in the less penetrated geographies and shorter term, more of a 5%, if you look longer term.
If we now focus on the Merchant Services market, which is the one that is for us, ultimately, the most important, we're talking about a market that in terms of revenue pools, net revenue pools, is more or less a EUR 9 billion market today, you know. We expect this market, on the back of what I said before, to grow another EUR 4 billion-EUR 5 billion as a combination of volume growth, but also expansion in terms of products and services that we can sell to our customers, from merchant financing to integrated payments to other things that Roberto will talk about. When you look at the segmentation in this market, SMEs represent more or less half of this market. Corporates represent about another 25%, and eCommerce that is clearly growing, is representing more or less the remaining 25%.
When you look at the characteristics of this market, the one thing that now you realize that is very relevant for us is that the vast majority of the revenues of this market are coming from customers that are very local, and they continue to buy in a very local way. The SME market is local by itself. In the corporate market, the mid corporates and more national corporates still buy very much local. Also, the local branches of some international corporates continue to buy very locally, with the exception of certain verticals. Last but not least, even when you look at the world of eCommerce and you look at it in terms of revenues, not volumes, now most of the market is concentrated into the mid-market, which again is very local, requires very specific services locally.
As Nexi, we have an obsession for staying focused on SMEs, mid corporates and mid-market eCom. We don't want to compete on the large global merchants in the large eCommerce space. That's not our space. We have marginal business there. We have no investments in that space. We are completely focused on the dark blue that you see on this page. Looking forward, now, there are two characteristics that will shape the market, will continue to shape the market over the next several years. The first one is that payments will become more and more complex. I guess you recognize all the titles on this page, and many of them we'll cover during the morning. The key point is that this complexity is a lot for our customers, and therefore this offers us the opportunity to help them.
Because ultimately, you know, if you are a small merchant, you just want to accept any type of payment that your customer can put in front of you. You don't want to get into this mess. If you're a bank, you will struggle to stay with this complexity. Think about agentic commerce. It's far away from the competencies, the interest, the core of a bank, you know. Their customers may want to be, you know, enabled for agentic commerce on their cards. This complexity will continue to increase, and is a great opportunity for players like Nexi that have scale and ability to invest capabilities. The second key element of the future remains the fact that the market in Europe is very fragmented and local and will remain very fragmented and local.
This is exactly the same page that we had, three years ago. We just updated on one aspect that I will tell you in a second. The United States of Europe, as we know well, don't exist. Definitely they don't exist in our industry. Think about the local payment methods, think about the software integrations, think about the nature of SMEs, but also the local corporates. When you add on top of this, the integrated payments world, the world of ISVs, the world of software, the world of platforms, it is even more so very specific ECR integrations. 90% of ISVs are local, probably more than that in our industry. We believe the market will continue to be very local.
By the way, again, this is a big opportunity for Nexi as a company is very entrenched in the local ecosystems. In this environment where payments are becoming more complex and being local is very important, we believe two elements will be key for long-term success: scale and in-market presence, in-market entrenchment. If we map the different players across this axis, local entrenchment and scale, we realize that Nexi really enjoys a unique positioning. Because we are the only one that is able to combine these two elements. Yes, we compete with a number of smaller local players, traditional, maybe some new ones and so on and so forth, but they don't have the scale to follow through, you know, the complexity of the industry, the investments required by the industry.
Yes, we compete with, you know, a number of larger players, European or even American, but they're far from being locally entrenched as we are. By the way, the fact that product development, technology choices, platform evolutions, you know, capital allocation is decided somewhere else in the U.S. really doesn't enable them to be closer to the markets and do what is needed in the individual local market, in Europe. Yes, there are a number of, you know, we call them here Neo PayTechs. You know the name better than I do, no? Actually, no, at least for now, they are missing definitely, no, the local entrenchment, and for many of them, also the scale necessary to invest. You know, There is a lot of conversation around the single platform topic.
Be sensible to the fact that, with a single platform is very, very difficult to play on this axis and to be close to your customers, being entrenched in the market, do what is necessary in terms of payment methods and customer support in the specific market. These are just examples of the benefits that we get out of scale and locally market entrenchment. Scale brings you the ability to do product investments, tech and AI investments, to play strategically with partners, you know, both in the scheme space, but more in general in technology. You know, the possibility to shape the evolution of payments in Europe, obviously operating leverage.
When you go into local market entrenchment, actually the ability to not only work with, but sometimes run local schemes, play with the local relevant APMs, have in-market sales and customer support, local partnership and distribution, local integration, and deep engagement with the local ecosystems, is really the combination of these elements, these capabilities that makes Nexi unique. If we bring it all together, what is our overall vision? Our perspective, payments will continue to grow for the very long term with an increasing complexity and threshold fragmentation across Europe. Both these elements are good for us. In this context, our purpose is very simple. No, we want to simplify payments for our customers, from the smaller, you know, merchant to the larger banks, by being always reliable and secure in our services, with having localized solutions that are customer-first and having close customer support.
We want to do this with a very clear position is summarized by a few words that were the title of our 2022 Capital Market Day, European by scale, local by nature. Best combination of scale and in market entrenchment. Overall, if we bring it all together, our ambition is to be the trusted European platform transforming the complexity of payments. It is almost astonishing for customers into opportunities for citizens, businesses and institutions that don't need to think about this complexity. They can just enjoy the benefits of technology evolution and more possibilities. Let me jump into, you know, how this unique positioning is translating into opportunities for growth for our company and in resilient growth going forward.
In order to understand the short-term dynamics of our revenue growth and therefore understand the future dynamics of our revenue growth, it is really important to separate the two components that coexist as we speak. The underlying growth and the bank contract effects. To be clear, we perfectly understand that ultimately what really matters is the net revenue generation, because this is what ultimately generate profits, generates cash, generates return to shareholders. In order to understand what's happening today and what will happen in the future, it's really important to separate these two components because they live completely different dynamics. Let me start with the second. Bernardo will dive into it much more and give you much more evidence.
To be clear, bank contract effects, which are ultimately renegotiations with banks, with discounts and, you know, some potential losses, have always been with us and will always be with us. Historically, this has been more or less than 1% to 1.5% of our revenues, and this is what we believe will happen in the future because they're a part of the nature of our business, where volumes are growing, you know, more services are offered. You know, it's normal that you have this dynamic. In 2025, 2026 and 2027, you know, these bank contract effects have been, will be exceptionally high. Basically, for 2 reasons, because back, 3 years ago, you know, we lost a few but material customers on the back of a very harsh competition, normally on merchant book acquisitions.
As we look backwards, we still believe we've done the right thing not to overinvest and overspend on that type of M&A, given the multiples at which it was going. Sorry, I want to be clear, these losses were not to the new names, to the Neo PayTechs. It was to very traditional competitors, people, you know, similar to the ones that you can have in mind, either local or European. Therefore, it was based on price, not on other elements. Together with that, no, these exceptional bank contract effects are also driven by a number of successful anticipated renewals that we had on the one side, the need to do due to competition or the opportunity to do in anticipation to secure future revenues.
These bank contract effects will be reducing to normal historical level of about 1%- 1.5% from 2028, as most valuable contracts are now extended for a very long term. By the way, at very much market competitive prices. Here we have pretty good visibility. Sorry, the other element, the underlying growth, we will cover a lot in the rest of this session. Ultimately, you know, the key message is that we want to leave with you structurally, we are resilient to mid-single digit plus. That's where we're coming from, that's where we will go. All the dynamics of the new market in Merchant Services ultimately, you know, have proven a good resilience for Nexi as we've been winning in challenger markets and defending our leadership positions in the other ones.
This growth will continue to be driven by a portfolio of core engines and growth engines, further powered by a number of very specific initiatives that we will cover later on. If we bring these components together, this is the profile that you have. An underlying growth that is coming from a 5%, 6%, and last year as well was at about 6%, that we believe will continue. Obviously, we will have the ambition to increase it, but we believe at least it will continue. That combines with these bank contract effects that historically were at around 1%. From 2028, they will come back to about the same level.
Now, last year, you know, had a material impact, about 4%, this will continue over the next couple of years with a lower, if you want, impact, but still very material impact. Here I want to underline the fact that we have a very strong visibility, even for the contracts that we still have to renew over the next couple of years, we've already embedded into these projections what we believe the effects will be. This is the profile of ultimately what really matters, that are net revenues, net revenue growth over the next few years. Therefore, you know, we will have a 2026 and 2027, pretty close to 2025 for these reasons. Then as these bank contract effects disappear or go back to normal, we will have a reacceleration about 5%.
If you want, the good news is that, in order to believe we will go back to mid-single digit growth, you don't need to believe that suddenly we win market share everywhere, or we have some new product that will, you know, devastate the market, or that we go to the moon. You just need to believe that we will continue to grow resiliently at our historical level, and that these ex-extraordinary effects will basically expire over the next year or two. Looking into the profile of growth going forward, and before I tell you how we'll be driving growth going forward, let me go back for a second to the concept of resilience, looking backwards, you know, and looking at today as well.
I'll do it specifically focused on MS, which is obviously the topic that we all are interested in. It's always difficult to construct market shares in our industry. It's basically impossible. Let's be clear, okay? If you go back and you try to aggregate numbers, and here we'll be leveraging on a few very well done external reports, this is more or less the picture that you observe if you try to reconstruct the market shares for Nexi, the other traditional competitors, banks and the newer competitors. What do you observe? Yes, the new competition has taken share in a growing market, you know. This share has been coming mainly from the banks and the other traditional PSPs, also because very often these newer players are playing in spaces where Nexi is not really exposed.
Think about global commerce, think about the very large merchants in certain verticals. We are not exposed to that, and we don't want to be exposed to that. Overall, the Nexi market share has been broadly resilient despite new competition. Probably lost more or less 1 percentage point. Obviously in 2025, we've been affected by the bank contract losses that have nothing to do with these new competitors. You know, at the same time, you know, we're recovering from banks and other traditional PSPs most of the limited losses that we had over the last few years. If now we look at this with our own internal data and initiatives, and here the focus is really again on MS and is more, if you like, short term, last year, you know, today and so on and so forth.
Let me tell you how we see it, region by region. Italy, which is more than half of our business. Yes, we're seeing a market share erosion also last year, but it's due to these bank contract effects. The underlying share is proven to be resilient, thanks also to the development of the new distribution channels, and we are having a growing exposure to eCom. Overall, the underlying SME market share has been stabilizing towards the latter part of last year. Volumes, underlying net of these bank contracts have been growing more or less 10% for international schemes. eCommerce revenues up 8%. You at the Nordics here, we've been defending leadership position, I would say very effectively in Norway, a bit less in Denmark and Finland. We've been winning market share as a challenger.
In Sweden, we did develop a lot eCommerce and value-added services. Overall, revenues for Merchant Services up 3%, eCommerce revenues up 8%. If you look at DACH, we've been winning share, no, in the SMEs, in Germany and also a little bit across the region, growing with ISV partnerships and strengthening our position in eCom. German revenues last year about 9% up. CSE, strong growth in Polish, in Poland, SMEs about 10% and developing ISV partnerships, in the region and new channels in Greece and Croatia. Overall, if you look at the international schemes, net of this contract effect that had nothing to do with the new competitive dynamics, our volumes last year did grow more or less 10%, no.
By the way, with a broadly stable net take rate, which I think is a good signal as yes, we have some price pressure, but on the other side, we sell more and more services to our customers. Overall, on the one side, we are defending our core, well, yes, we get pressure, but, no, we are broadly defending it, while at the same time accelerating on the growth engines. Now, going forward, we see our growth driven by a portfolio of core engines and growth engines. We like to map our businesses across these two axes. The market position we have, challenger, leader, in some cases greenfield, no, and the growth potential that we see for that market. We basically seek to set off businesses for us. Now, on the one side, you have Italy and the Nordics, no, very large.
The bubble represents the size, no, of the business with further opportunity for expansion. The further opportunity for expansion is where the next five years is the white, if you want. Obviously, we are leaders. We can't imagine we take share. Everybody is trying to eat into our own plate. We will defend our own plate and enjoy the growth of the market. These are our core engines. At the same time, we have a number of growth engines where instead we are a challenger, and therefore we can invest to grow share, we can invest to accelerate growth and to grow the business. Here we have a number of them. Let me point at three. The German and DACH region, definitely, no. eCommerce across the Board, I told you that we are growing 8%, 9% eCommerce both in Italy and the Nordics.
Italy and the Nordics are, if you look at them more broadly, markets where we have a strong leadership position, but actually, commerce is a great opportunity also there. Integrated payments, that is the new theme for us, and obviously issuing products where we have a great experience in Italy that we want to export elsewhere. In this portfolio, We'll power growth with a number of additional initiatives, and this initiative will be focused on our strategic segments. To begin with, in SMEs, we'll be driving growth and customer value with strong localized omni-acceptance payment solutions. Nexi SmartPay is the key title. We'll be winning in integrated payments with ISV partners, and here we will have a dual approach Nexi Integrated for ISVs and Nexi Smart Commerce for SMEs.
In parallel, we'll be investing in multi-channel distribution across the Board to win in SMEs. In mid-market eCommerce, we'll be accelerating with our localized collecting checkout solutions, starting to embed during the year also agentic commerce capability. Nexi Checkout is the core proposition here. In mid-corporates, no, we'll drive growth with compressing our acceptance solutions with unique. We'll continue to invest in unique local components that are very important for the segment, extending gradually to omnichannel that is gradually becoming more important for this segment. Last but not least, you know, with banks and corporates, by the way, no, we'll drive growth in issuing through a stronger focus on issuing products that allow us to grow value and not only number of customers. Nexi Ready is the key topic. During the morning, we'll cover all of them.
I want to focus on two. The first one is obviously integrated payments, which is our biggest priority, is my personal biggest priority, given the strategic relevance of that. I'll also say a few words on multi-channel distribution. Now, let me start with the market of integrated payments, because when we discuss it, we feel that everybody's very much looking at the U.S. experience, but U.S. experience, we believe is quite specific. Very large market with very unique characteristics, with very large SMEs, very large players. When you look at Europe, we see the world of integrated payments that is starting to develop, but it's still at very different levels. This is the penetration of integrated payment solutions on the front book of payments. In the U.S., this is already well above 50%, no.
When you look at Europe, you have different degrees. Yes, the Nordics are more advanced, more digitalized economies also for SMEs. DACH is probably around 15%, 10%, 15%. Italy is super well below 5%. Also because the characteristics of this market in Europe are very, very specific, no. There are 1,200 ISVs only in our geographies. The average size is below 1,000 customers each, so very, very small. 90% more than them are actually active on one single market. A large number of small and many local ISVs. Honestly, large U.S. ISVs are quite marginal on our footprint. We see something in Germany and Switzerland targeting the restaurant sector, but ultimately, no, quite marginal. Also because you have into every single country we operate a number of entry barriers.
The other element is that a lot of them are really, no, basic ECR plus payments with limited software integrations. There are a number of local fiscal integration and regulations. By the way, every market has a different dynamic in terms of distributional software, in terms of competitive dynamics around software. Yes, this is coming. It's coming slowly, and with very unique characteristics. We want to invest ahead because we believe this is gonna be a shaping topic, and we believe it can also be a good opportunity for us. Here, our strategy, we discussed this in one of our calls for results in the past. Here, our strategy is completely focused around partnerships with the ISVs, no, with a dual approach. On the one side, Nexi Integrated, we will serve ISVs.
In here, we will provide our payment solutions to as many ISVs, local ISVs as possible. Today, we serve already more than 500, that will integrate them with their local solutions and bring them to the market with their sales channels. We will invest, we are already investing in actually serving, selling, and serving to these ISVs that are, in this context, our customers. On the other side, with Nexi Smart Commerce, we'll pick in every market. We are picking, actually, it's already happening. In every market, two or three verticals. In each of the verticals that are particularly strategic. In each one of these verticals, we'll select one partner and we'll do the reverse.
We will bundle the software of this partner into our products and services and bring Nexi Integrated proposition to the market through our channels, including banks, with a strong focus on upselling to our customer base. We talked about, you know, 2 million customers in the SME space. Actually, in SMEs, a bit less, but most of them are in the SME space. Those customers are a great opportunity for us for upselling. In order to do it, we will also invest in more distribution to them. There are a number of common components here. A visible one is the Nexi Station, that by the way, you find there in the corner, and Roberto will talk to you about, that will be serving both proposition in a very unique way.
On the one Nexi Integrated to consolidate and grow Nexi share across verticals. On the other side, differentiate Nexi, grow customer base value, and we share into verticals. Distribution. We will continue to invest, we will accelerate investments this year on multi-channel distribution. Multi-channel is not new news for us. We are used to it, but I want to tell you what we'll be doing by channel. Let's start with banks. Banks are a big part of our present. We believe they will be very much a part of our future as well. They're relevant mostly for Italy. Don't forget it, no, 11,000 branches is a great asset for a company like us in terms of distribution and customer management. Some of them are also investing in outbound SME sales force, field sales force, which is great.
They are very key for upselling, cross-selling, and so on and so forth. We will continue to invest. We're having in Italy some specific dedicated investment to support them into this complexity to sell more, also on Smart Commerce. We really include field sales, telesales, and digital. This is very key for the Nordics, DACH, and Poland, but also in Italy. This is already now representing 25% of our firepower, up from the 10% that we had in the past. We will invest in field sales capacity with a strong focus on mid SMEs and then extend it to Smart Commerce. Last but not the least, partners and ISVs. In this space, you don't have only ISVs, you also have ISOs, retail, and other things. They're already very relevant for the Nordics and DACH.
Very early stage in Italy, consistently where the market is, which is very underdeveloped. Today, we already work with more than 500, and obviously, as I said before, we'll invest a lot in terms of dedicated sales force and support to ISVs in particular. Overall, over the next five years, no, we will add another 600 people selling products and services to SMEs, to ISVs, together with banks, in the case of Italy. Overall, we'll go from 800 people on the ground to 1,400, and in Italy, we'll basically double from the current 300. This approach will basically allow us, going forward, to basically power up our firepower in terms of new sales in the market. In particular, it will power up in direct and ISVs, no.
In places, for example, like Italy, will also help complement banks that we believe will continue to be incredibly relevant. Clearly, these investments in direct and ISV partners are giving us an edge on no, the evolution of relevance of banks in our industry. Together with this resilient growth, we combine, and we'll continue to combine operational excellence, discipline investment. Here, I want to focus on three things: technology, efficiency, and AI. Let me start with technology. Here, I want to be very clear. We are not obsessed with the single platform theme. We understand the value of it, but we are not obsessed with it. What we are obsessed with is working against these three objectives, innovation agility, local differentiation, and efficiency. Continuously making choice, investments, decisions, no, that balance over time these three objectives. What are we doing?
What is the progress here? First of all, on products and solution, we are developing, we already developed partially and we continue to develop modular group reference solutions to drive scale across markets that we can deploy across geographies. We continue to use, in many cases, local front ends, call it the gateways, call it terminals, for having to have in-market integrations and customer proximity where necessary. We are developing integrated product factories, for faster product development, more agile product development that are leveraging, obviously, AI as much as possible. We have a number of common, no, API capabilities that enable to move these products and services cross-platform. When it comes to processing platforms, our next gen target processing platforms are broadly developed, no?
We approach the migration on these target platforms in a very pragmatic way. There are cases where it doesn't make any sense, to be honest with you, to do it, because you're just creating a massive complexity for customers. You lose capabilities that are very relevant for them, and by the way, it doesn't work from the economic standpoint. We continue to migrate, and we will continue to migrate and converge. Today, these target platforms already cover about 60% of our volumes. Our target over the next five years is probably to converge on them about 80%-90% of our total volume, and that's it for the visibility that we have today, because we are fine to maintain some local platforms that give us strong competitive advantage that you could not have with the one platform approach.
Take into consideration, however, that as we do this, compared to where we were in 2022, we've already taken out and shut down 2025, you know, platforms or platform components. Last but not least, obviously, we will continue to work and converge infrastructure as well. On data center consolidation over the last three years, we did cut by 45%, 50%, no, the footprint of our data centers, which is real efficiency. We will keep on going, but ultimately, we are close to, no, where we want to go. I think we'll go there in one or two years, no? At the same time, we continue our evolution towards cloud, open cloud, architecture, and obviously we keep security at the center of everything we do, and clearly we are already working on AI-proof security.
Now, a few examples of where we are going with this in terms of innovation, agility, local differentiation and efficiency. A couple of examples here. The SmartStation you see there is a group developed product being rolled out very early on this year in the Nordics and then in Italy, Germany, and so on and so forth. If you don't have scale, you can't do that. Okay? Nexi Ready. Christian will talk about it later. Based on Ital experience, we developed a pan-European platform that is ready for any country across Europe to bring our experience there. Local differentiation, two examples. Here we announced PagoPA is a local payment, public administration payment system.
We announced a few days ago that we will bring to the terminals, to any terminal in any small shop, the possibility to accept public administration payments. That's not something that you can do if you have a one single platform being developed from somewhere around the world. That's a flexibility you can't have. Another example here in Finland, talk a lot about unified commerce. In Finland, we are developing it on the back of a very local and very successful platform that is the Paytrail platform targeting SMEs. You can't do that if you have a single platform approach given the specificity of the market. Last but not least, efficiency. Just to give you a sense of it, if you look at IT OpEx over the last three years, they've been broadly flat.
Broadly flat, despite the growth of volumes, despite the augmentation of the portfolio. Second topic, efficiency. As you know, as a company, we've been focused on efficiency since day number one. If you look at our historical performance, our OpEx did grow at 2%-3% structurally. We've been working on this front. We talked about IT efficiency and platform consolidation, operations transformation, continuous operating model review and organizational rightsizing. We will continue to do that. We are continuing to do that. On top of it, we'll be leveraging as much as possible on the opportunities offered by AI. However, therefore, going forward, we expect to continue to grow at 2%-3%.
This year we have decided that in order to go after those growth opportunities and support those strategic investments, especially, no, on Merchant Services, ISV products, SME products, and so on and so forth, Salesforce, [Nexi] Gen AI, this year we will increase a little bit the growth of OpEx as this includes more or less 2 percentage points-3 percentage points of additional investment that we believe is strategic for the future, and we prefer to anticipate it. The third topic, AI. Again, we see AI, especially on the efficiency front, as a big opportunity. As a company, we did start working on AI or actually machine learning, the way it was called back then, seven, eight years ago, in many different areas.
Obviously, over the last couple of years, with the arrival of GenAI and agentic AI, we did double down on the space. We are continuously exploring opportunities, no? We go as fast as we can into execution and scaling. Here on the right, you see just some examples. Let me pick you one of them. As we speak, we have about 1,500 software developers that are developing with the support and testing with the support of AI. The productivity levels that we see are already well above 20% after 18 months. As we speak, we are starting to apply that also on COBOL and mainframe, which is still with us and will remain with us for a long time.
In parallel, we are developing a number of enablers because we see AI as something that is pervasive in our business. A resilient, enduring growth on the one side, continued focus on efficiency. These two things combined will allow us to continue to generate strong cash and distribute it to shareholders. Let me now call on stage Bernardo and hand over to him for the session.
Thanks, Paolo. Oh, sorry. Well, good morning and welcome from me as well. In the next few slides, the next session, we will attempt to translate what Paolo told us about positioning and strategy into revenue, into margin, ultimately into cash. I'll try and make the point that our infrastructure position in Europe positions us very well to become a very significant cash compounder. Before we start with the session on our financials going forward. Sorry, there's some feedback from behind us. Let me start with the results for the year. I believe pretty strong operational performance with revenues growing just north of 2% for the year. Importantly, as Paolo's highlighted, our underlying revenues continue to grow around 6%.
This has been pretty homogeneous throughout the year, as we have seen in previous slides, if you look back in time, it's been pretty consistent over time. Our costs growing just under 2%, demonstrating our steadfast commitment to cost control in the face of, as we have said, inflation, volume growth. Volume growth in terms of cost is about a number of transactions. The number of transactions grows very, very consistently. Containment of costs, thanks to all the work we're doing on efficiencies in the IT department. You've seen how IT costs have been flat over the last few years. EBITDA growing just north of 2% with slight margin accretion in the year. Normalized EPS growing double digit.
Here it's important to highlight also the fact that we did take an accounting charge at a goodwill impairment. This is obviously non-cash of EUR 3.7 billion to align, let's say, the carrying value of the companies we merged with back in 2021 to the more recent market valuation parameters for the payment sector. Excess cash, importantly, has been growing double digits to we close the year in line with our ambition to grow in excess of EUR 800 million to EUR 806 million. Importantly, balance sheet continues to be strengthened. We believe balance sheet strength is a strategic asset for us, bringing leverage down to 2.6x .
Again, before we start, just a quick word with regards to rebaselining the numbers for 2026 onwards, and there are two minor adjustments. One of them is about, let's say, making more homogeneous the way we within the group account for partner commissions, and this is moving basically costs to contra revenues. The other is to basically reflect the fact that from the fourth quarter last year, we are consolidating Computop line by line. Adjustments which are pretty much neutral from an EBITDA perspective, it's just housekeeping, and I would say, just for the purpose of pro forming your baseline. Now, Paolo's told us how Europe is very local.
It's fragmented, it's locally regulated, where it's local, presence, local leadership that wins you, that wins you business. It's our platform scale that allows us to generate incremental economics with high margins, high cash conversion. What I would like to start with is again, a slide which some of you who've been following us for some time might have seen in either the previous capital market date or even back in the day when Nexi IPOed. It's a slide which basically summarizes how this positioning in the market generates these five attributes, that Nexi possesses. Each individual one of these, I think it's common to be found in any given payments company. It's very common to see, you know, large companies or companies which generate profit or cash.
What positions us as unique within this sector is we have all five under the same roof. We are by far the largest, I'd say, payments company in Europe, EUR 3.6 billion of revenues, close to EUR 2 billion of EBITDA. We have sustainable, profitable growth. We've been growing both revenues and EBITDA over the years. We have generated a substantial amount of cash, EUR 2.1 billion over the last three years, EUR 800 million just in 2025. We started to distribute this cash to investors. We paid out EUR 1.1 billion in the 2024/2025 period. EUR 300 million was our first dividend last year, one we'll speak of later during the course of this morning or this presentation. EUR 800 million was used to buy back stock.
Within this context, we have brought our leverage down to 2.6x. We're on the edge of reaching our 2x-2.5x target because we were always eyeing and we're always commitment to achieving investment grade status, which is what we did at the end of 2024, and we remain committed to maintaining and building on this going forward. As I said, these five characteristics are, I would say, unique to be found in any one single company. Again, another slide which you are probably familiar with, we call that, let's say amongst ourselves, our cash generation formula. It shows how we possess operating leverage. Our revenues grow. We've seen the underlying growth translates into reported growth as well, lower than what we have historically, but we'll speak about that.
Our top line growth, based on the fact that we have a predominantly fixed operating cost base, 20% of our costs are variable, 80% are fixed, translates into operating leverage, which feeds into EBITDA growth, cash growth. Cash growth, which is then compounded because we have cash leverage through the fact that CapEx continues to come down as we digest our transformation and integration and non-recurring items which have come down substantially in the last three or four years, compounding this cash growth going forward. You see the progression in the chart here. It's, I believe, this ability to compound cash growth and generate these significant amount of cash, which ultimately will be the driver, the engine behind the equity value creation for investors going forward.
Something we have, or Paolo has spoken of and just like to represent in this chart. Essentially, what we do is go back in time and see how our nominal, our revenues, our reported revenues have pretty much always been growing between 5% and 6%. If we had the numbers and it weren't too hard to perform them going back, even if we went back to 2018, 2017, 2016, I'm sure they would show a similar picture. They've always been growing more than nominal GDP. That's why we believe our business is a GDP plus business. Of course, you know, we've spoken and we'll dive into a bit more detail, 2025.
I've shown you the numbers that report the 2% is really about the bank contracts effect with Paolo mentioned, we will see more in detail in a few slides. The underlying growth is still that 6% that we were speaking of. Importantly, this is structural growth. Structural growth, which is ingrained and based on the fact that as we have seen, the markets in which we operate are still under-penetrated compared to the average for Europe and much less than the average for countries which are, let's say, at the forefront of the adoption of cash payments. There's a lot of headroom for further growth. This means our growth is really infrastructural growth. It's not, it's not cyclical, and it's very resilient and predictable.
This slide Paolo showed you earlier, again, we can see how that 6% underlying growth we expect to continue going forward. We don't expect our underlying growth to change. What we expect to do is to change the profile of the growth of our reported revenues, which is the only one that counts. Why do we believe that? You can see it at the bottom here, the bank contract effects, which we have spoken of, which basically were crystallized or were generated back in 2023, beginning of 2024. Because of the difficulty of moving volumes and business away from a payment company like Nexi to someone else, are only materializing today. We've seen the peak of the impact being in 2025, with a 4 percentage point gap between reported and the underlying revenue growth.
Unfortunately, we will still suffer from this in 2026 and 2027, in 2028, we will revert back to more normalized levels of doing business, which means often offering discounts to renew contracts and the likes. We'll speak about the fact that we've already done a lot of this, and we'll continue this way thereafter. I'll spend a few words with regards to why we believe that this profile is the right one. It's important that you note that structural demand is intact, and therefore, reported growth is expected to follow this profile going forward and to return, as Paolo was saying, to what we were already delivering. You don't need to believe we'll do anything different to what we've already been doing in the past. Apologies, this slide is very busy.
A lot of logos, but it's important to look into greater detail as to why we believe that the reported numbers in terms of top-line growth will revert back to what they used to be. It's important to highlight how strengthened our relationship is with banks, primarily Italian banks, not only, but primarily Italian banks, which were at the heart of the gap, of the dip in terms of revenue growth that we've seen so far. This material is, as I was suggesting, back in 2023 and the first half of 2024, when the market was characterized by much higher multiples in terms of the M&A landscape and the payment space.
This both enticed banks to sell their contracts and distribution and, you know, they were willing to go through the two-year ordeal, I would say, of shifting business from one payments partner to another. It was characterized also by some players that were willing to pay significant premiums, significant multiples in order to acquire position in the Italian market. Without mentioning names, I'm sure you will agree with me that some of these are probably no longer in that business anymore and unlikely to return to where they were only a few years ago. Indeed, we've had a wave of renewals since then.
If you look at the slide from second half to 2024 to today, basically that's in the last 21 months, I believe, we have had a 100% renewal rate of anything which has come up. This is much more normal kind of development of the payments market. Renewals with contracts which now give us greater revenue visibility going forward and are priced at levels which are very similar or very much more aligned to market and don't suffer from, let's say, legacy M&A driven contracts.
Revenue visibility really has materially improved and gives us the comfort that I was referring to. If we look at the top, and this is again another little deep dive in terms of our revenue visibility, which I hope helps you understand and and and come around to my point of revenue visibility being very high. In this chart, we're showing you our top 20 contracts with mostly Italian banks, but it's European. They represent more than EUR 1.6 billion of revenues, if you include revenues generated through merchant referral agreements in Italy. This is 50% or more of our issuing and acquiring revenues in Italy. 90% of these revenues don't have any renewals attached to them, which come due before 2029.
The largest ones, these ones here, which you say large-sized banks, they are hundreds of millions of Euros of revenues associated with contracts with large banks. These are 2035 and beyond. 90% of what you see on this slide of that EUR 1.6 billion of revenues of these 20 top 20 banks, 90% are 2029 and beyond. The remaining 10%, what you see, bank number three, Merchant Solutions is being extended, issuing is in the process of being negotiated and so on and so forth. These are negotiations in a broader context of a very strong and deep relationship with a bank. It's not about M&A, which is what happened in 2023, which is what, you know, derived the gap between reported and underlying revenues. We are in a strong position to secure these.
We're in advanced discussions. Importantly, our expectations with regards to the outcome of this have already been built into those bank contract effects I was referring to earlier. I reiterate that, you know, our visibility is very high with regards to these bank-related revenues and contracts and has materially improved over time. If we move on from bank relationships to and visibility and revenues to speaking about growth drivers, we have a target to reach EUR 4 billion of revenues in 2028 and some common themes across Europe which help across the divisions that we operate in to deliver this growth.
First one, obviously, is just the secular shift of cash to card payments in Europe, predicated on the fact that that 36% market, let's say, penetration or penetration of payments will trend towards that 46% on average in Europe. That 55% we've seen in the markets in which we don't operate. That 100% that you see in countries which are already cashless, where you're not talking about increased penetration of payments. You know, cash doesn't exist. A lot of headroom to continue to grow, and this is a common theme across our geographies and across the business units we have. Unfortunately, we have common themes in issuing and acquiring on in terms of bank contract effects. You see them highlighted there.
More so on acquiring even this year, so in 2026, definitely last year, more so in issuing in 2027. That means that Merchant Solutions was actually, and Paolo referred to this earlier, will accelerate first. Or maybe he didn't. I have just said it. We'll re-accelerate first in our plan period. Merchant Solutions will of course be the biggest contributor to our growth. There's some themes there that have been highlighted and Paolo's gone through. We'll talk about them more later, about SME, how important that is for us, that sector. Integrated payments, that's the convergence of software and payments. eCom, which continues to grow in omni-channel expansion.
Christian will tell us about Nexi Ready, which we're already rolled out in Germany. We continue to upsell and cross-sell advanced digital issuing products in the rest of Europe. Digital banking solution, which also benefits from the growth in instant payments. What we continue to see is secular growth in our, in our, in our space, which is supported by our execution and our strategy. We don't see disruption in this space. If we look at geographic diversification, I can come back to a point that Paolo made earlier.
Our portfolio of geographies comprises both countries in which we're leaders, core markets like Italy, like Denmark, but it also has countries like Germany, where we are a challenger and are growth market for us. Indeed, we have common themes geographically across Europe as well. The markets in which we're present has the market growth phenomena that I was mentioning earlier. Integrated payments is a theme across Europe. Of course, eCommerce growth continues across Europe, is a feature in most markets in which we operate in. In this context, Italy continues to be foundational for us, notwithstanding what I spoke of in terms of the bank contract effect. We will recapture through our strategy of growing our direct channels, part of the market share that we lost because of this. We already are.
The Nordics continue to grow despite the high penetration levels we have there, also thanks to our upselling of value-added products and services. Germany, of course, allows us to compound the natural growth in the market because of the under-penetration of the German market, with our market share gains, given our positioning as a challenger. Moving on to costs. Historically, we have grown costs in the 2022-2024 period by about 3%, and this period was characterized by very high inflation, 7%-8%. Number of transactions growing double-digit, you know, impacting us on that 20% of our cost base which is variable. Notwithstanding this, I think we've demonstrated structural cost discipline. I think we can claim credit for that.
I'd like to put, as I like to put it to my colleagues, we have demonstrated, I think, a healthy aversion to cost growth. This has delivered this structural growth of 3%, just under 2%, this year, which is, I think, a good result. Going forward, in 2026, we see we've divided this chart in two. The same kind of structural cost growth that we've experienced in the past, which is, increased, I'd say, by our targeted strategic investments in product and distribution that Paolo just spoke about. MS products, the sales force, and of course AI, GenAI. All these investments or these benefits that we seek to reap and are already reaping come at a cost of investment, and we see this in 2026.
Importantly, in a predictable fashion, we will revert back to what our historical cost growth has been already in 2027, so you can see that 2%-3% range. This investment peak, for me, it's important to convey to you, is about supporting future growth. It's not expansive, it's disciplined. Margin expansion will resume in meaningful margin expansion will resume in 2028. We plan to reach EUR 2.1 billion of EBITDA then. A significant contribution clearly is expected to come from market growth and initiatives we've spoken of. We will continue to combat cost growth. You can see the two bar chart. Inertial growth. This is volumes, investments, inflation combated by our work on IT efficiencies, on operational efficiency. This is a constant improvement game in that space, one which we have proven over time to be successful in.
Importantly, back to the points I was making about contract effects, we have, thanks to the visibility we've spoken of, been able to de-risk our predictions with regards to where we will land in 2028 in terms of EBITDA by the effects of these contracts. Therefore, we expect significant margin expansion actually to resume in 2028 and this EBITDA to our EBITDA to achieve that EUR 2.1 billion point. Now, when I speak of costs, I look at cash CapEx. It's an investment, of course, as my colleagues will say, but for me, it's also a cost. You can see that in terms of CapEx, I think we've come a long way, frankly speaking. Only, when was it?
2022, I think we had EUR 522 million of CapEx. In this period, we've soaked up a lot of inflation. We've soaked up a lot of investment in transformation and integration. Yet we have come down by EUR 100 million or more in terms of CapEx. Our CapEx intensity has also come down from more than 16%- 12% today. We expect this to trend towards that all-important 10% line, which we will achieve in the not-too-distant future. I would say the maturity of our infrastructure following the transformation spend that we had in the prior years, lowers our CapEx intensity, but importantly also improves the predictability again of our cash flows going forward.
This CapEx intensity coming down to 10%, we'll see it with the cash generation over time, also helps in terms of supporting our cash conversion predictability. This is again, I would say, reiterating a point I just made. This is essentially our cash conversion, our cash generation formula. Going forward, the key messages that I want to leave with you are the same that we've already discussed a number of times. We'll continue to benefit from operating leverage. We will continue to benefit from cash leverage, and conversion will be increasing in recent years, which is compounded by, as I said, the reduction, the further reduction in CapEx, the further reduction in our RI. I'm profoundly convinced that it is this that I believe will be the engine of equity value creation over time for Nexi.
If you look at the cumulative number, we believe we will generate EUR 2.4 billion of cash over the next three years. We generated EUR 800 million this year, this year being 2025, EUR 2.4 billion over the next three years. This, at today's prices, is probably more than 60% of our market cap. I believe this is a key point to be underlined. Going forward, as we said, the first guidance for 2026 I can give you is that we expect to generate EUR 750 million of cash this year. This is impacted. Why is it down from the EUR 806 million? Simply put, we have more taxes to pay in 2026.
This is a gift of the budget law which came in late in the year, where bank taxes, banks which benefited from higher rates and were taxed, caught us in the midst, and this cost us essentially the difference between that EUR 806 million and the EUR 750 million. We expect cash generation growth to accelerate over the plan period. As I said, in total, we expect to generate EUR 2.4 billion of excess cash in the next three years, and we expect this growth profile to be accelerating over time. Now, before I move on to guidance and wrap up, another word with regards to 2026 and capital allocation going forward. First and foremost, you should note that we remain steadfastly committed as a management team, as a Board, to our investment grade status. Not the rating, status.
A broader commitment than just the leverage target you see here. We believe the balance sheet strength, I said it earlier, is crucially important. It's a strategic asset for us. Discipline on this front, frankly speaking, comes first. As I mentioned, we closed the year at 2.6x leverage. This is just on the edge of the 2x-2.5x target we had always set as being the kind of sweet spot in which we should operate in. That puts us in a comfortable position to address the second point, which is also equally important, which is return of capital to our shareholders. We've chosen to focus this year on a dividend per share of EUR 0.30, only that. This is a 20% increase on last year's dividend.
It is accompanied by a policy which we'll speak of in a second, to increase this dividend every year by at least 5%. That means over the next three years, we commit to distribute at least EUR 1.1 billion by way of dividends. That is 30% of our market cap or more today. We will obviously continue to scout the market for M&A opportunities, but we'll engage in them only if they are very value accretive for us and make strategic sense. Whereas we will continue also to focus on rationalizing our portfolio and optimizing it. This will primarily come in the DBS area, would be my guess. They won't be huge transactions, but it shows, again, discipline in terms of the strategic composition of our portfolio and our commitment to optimize cash and capital.
Obviously, I've spoken about EUR 1.1 billion of dividend distribution. The balance between that EUR 1.1 billion and the EUR 2.4 billion of cash we will generate over the plan. We will assess on a year-by-year basis what best use there is for this incremental cash generation. It may well be further acceleration in deleverage. It may well be bigger dividends. It might be share buybacks as we've done in the past. All of this will be assessed on a year-by-year basis. I think the important thing to focus on is we believe, from a capital perspective, that we are in a strong position to build on our investment-grade rating and at the same time, continue to distribute capital to our shareholders and pursue selective M&A if and when the opportunities arise. Final slide on our guidance.
Starting from 2026, we guide towards basically revenue growth, which is broadly in line with this year. You saw around 2%. I expect or we expect Merchant Solutions to be re-accelerating, particularly in the second half of the year. All of 2026 will be an acceleration compared to the second half of 2025. Moving forward, looking further down the line in the plan period, we expect to return to that mid-single-digit growth that we've seen has been our historic reported level of growth in 2028. We look at EBITDA. Also EBITDA, given the strategic investments we're gonna be making this year, I expect to be broadly stable in absolute terms compared to 2025, and we will return to meaningful margin expansion of the EBITDA in 2028.
With regards to the use of excess cash, before I go to that, excess cash generation will be around about EUR 750 million. I mentioned the taxes. I also mentioned and call out the fact that we are investing in our, you know, future growth in 2026, which also helps explain this number. Going further down the line in cumulative terms over the plan period, we will generate EUR 2.4 billion of excess cash. Going to capital allocation, I've just mentioned it, the Board has chosen to focus on dividend distribution because we believe that provides you with maximum certainty and commitment in terms of our ability and willingness to distribute capital to shareholders.
We start with a EUR 0.30 per share dividend, which is a 20% increase on last year's EUR 0.25 dividend, and this will grow at least 5% over the plan period. Before handing the floor back to Paolo, just let me wrap up. I mean Europe remains fragmented and regulated, as we have seen. Nexi is embedded at the core of all of this complexity. Our local leadership really does allow us to generate durable revenues, which, coupled with our cost discipline and platform scale, allows us to deliver this cash compounding feature, which I've spoken so much of. We are essentially the infrastructure backbone of Europe. We act as an orchestrator, as an integrator in a very structurally complex and essential ecosystem. This gives us great visibility in terms of cash generation and compounding capacity.
That said, let me hand the floor back to Paolo. Thank you very much for your time.
Thank you. Thank you, Bernardo. Let me wrap up this session with the last point that we wanted to deliver that I think Bernardo has already now moved towards, which is our structural long-term resilience. Here, I want to address it, going straight into the, I would say, the four topics that we feel being a little bit the hot topics in our conversations with you and with investors.
The four topics are this newer MS competition. I think we discussed it. We can come back to it in our Q&A. We see an underlying resilience with this newer MS competition, and as you understood, we are investing to not grow stronger in SMEs and integrated payments going forward and Salesforce. Second, we discussed a lot of debate around the relevance of banking, the banking channel. We believe the banking channel will continue to be relevant, at least, you know, for Italy, but at the same time, we are also hedging and investing into additional strength in a multi-channel approach. Now let me briefly talk about the other two topics that tend to come up in our conversation: alternative payment methods and AI and agentic commerce, agentic payments.
Alternative payment methods, we already say a few words about it. They are not new news for us. We've been used to it, now over the last several years. Every, you know, day we activate a new alternative payment methods, and this complexity coming from additional payment methods is actually good for us. They are more intended for person to person and eCommerce, given the fact that the experience of cards and wallets is superior in store, but they also coming a bit more in store. We will continue to do what we are doing now, which is integrate all the new payment methods that come up, you know, from the specific markets into our accept propositions, because it's all about simplifying payments for these merchants that want to be able to accept these payment methods.
Actually, we do it with good economics that are comparable to the economics that we see with debit cards, which is the comparable. We'll keep on going. This complexity is good for us. Obviously, there is a lot of discussion around stablecoins. Will they change this world? Our point of view is that stablecoins are really now creating some customer value beyond the other applications they can have, beyond the store of value concept for countries with unstable currencies and so on and so forth. In commerce, they can create some value probably for business to business and cross-border. That's not our business. Our business is retail payments. We don't see at the moment material application or material space for stablecoins there.
Nevertheless, now we are already organizing ourselves to be able, as the regulation stabilizes as well, you know, to accept stablecoins in our geographies in store and online through, initially at least, through, partners. Last but not least, the digital euro. A lot of discussion around it. We believe it will come. It will come, at some point. Pilots will start into next year, and we'll be a part of it. Ultimately, we see this as, you know, another payment method, which has specific characteristics, but ultimately, you know, it's a European product and as a critical European platform, we are very entrenched into the space of the digital euro, and we believe it present opportunities across our, you know, our breadth of solutions, Merchant Services, IAS, and DBS as well.
This exploding complexity of payment method, we believe, is for us, ultimately an opportunity. Last but not least, AI. A lot of discussions. Now, obviously, AI for efficiency is a great opportunity. We already talked about it. Let me move to the other front, which is obviously AI for innovation. In general, we believe AI offers a number of opportunities for making our products, you know, stronger, our customer experience, better, you know. We're working on a number of these things. Just to give you an example, and Roberto will come back to that, we just rolled out MCP, Model Context Protocol, to allow merchants that already operate with agents, which trust me, they're not that many, to interact with our, you know, properties, with our platforms, with our systems through APIs. Okay?
Now, when you look at AI, you know, in the more innovation space, obviously the topic is agentic commerce, you know, or better agentic payments. Here I think it's really, really important that we are clear on a few basic elements. First of all, this is really relevant for eCommerce, you know. eCommerce, you know, in the case of Nexi, is about 6% of our total revenues. Second, it will be relevant, especially, you know, in the initial phase, really for the more global large merchants, sophisticated merchants, which are not really, you know, our target. We don't have no exposure to them. In general, in terms of, is this something that we're exposed to in a very, very limited way.
Second element is that there is no doubt that agentic commerce will transform the search, the discovery phase of a commercial journey, a buying journey. Reality is that we are focused on the payment moment, and the payment moment is, requires a lot of trust and a lot of human interaction. Would you give permission to your agent to buy something without even knowing what he's buying, how he's buying, from where it's coming, and so on and so forth? I think that's the key question. As a merchant, would you accept a payment from someone that, you know, is represented by an agent? It will require a lot of development also from the regulatory standpoint.
Said that, you know, we believe that in Europe now, these will have specific characteristics, and we are working already with the global leaders to shape this evolution, Google, Visa, Mastercard. Now, you know, we'll be piloting agentic commerce during this year, having in mind our market, which is a mid eCom market, which is a very attractive market because, you know, it will require a lot of support to come on Board with the agentic commerce space. Last but not least, you know, there is also the other side of the moon. Think about now issuing. You know, we have about 140 million cards. You know, the bank will want to make these cards agentic commerce, which again, can be an opportunity.
All in, we see AI as an opportunity, an opportunity for further development, and in an environment where we're actually protected from a potential disruption risk. This closes a little bit the picture. A unique positioning in a growing market, in a very dynamic market that will continue to stay dynamic. A resilient revenue growth, mid-single digit going forward, combined with continued efficiency that will continue to generate cash that we'll be able to return to shareholders, and this formula, we expect it to work for a very long term. Let me pause there and let's go for a break. We are a few minutes longer. If I can ask you to come back at around 10:20, would be great. Thank you. Welcome back.
Thank you for helping us to recover a few minutes here on the break. Bernardo and I, we gave you the overview of our positioning, of our strategy, our plan going forward. Now we'll deep dive into the real substance: products, customers, customer needs, initiatives. We'll start with winning in Merchant Solutions, and the session will be led by Roberto, our leader for Merchant Services across the group, that will be joined at some point by Sarah, that probably you never met, that is our Chief Product Officer for Merchant Services. Roberto, the floor is yours.
Thank you, Paolo. Good morning and a warm welcome to Milan also from my side. Let me start by quickly recapping our starting point in Merchant Solutions. We are a EUR 2 billion business, basically 55% of the overall group revenues. We are very proud that every day we help hundreds of thousands of businesses, albeit small or large, run and grow their own business and endeavors, whether they are in store, online, or omni-channel. If we look at our revenue mix, you will see immediately that the majority of our net revenues and all our margins come from a very strong and unique position in the SME market. Of course, the corporate business is an important foundation in general for our franchise and so on, but SME is where we're really enjoying a leadership positions across markets.
Let me remind you that we operate in multiple markets. In Italy and in three out of four of the Nordic countries, we enjoy a leadership position, while we have a established challenger position in the DACH region more broadly and in CESEE, so basically in Poland, Greece, and Croatia, with a smaller and lighter presence in the other Eastern European markets. If you take the perspective of the future growth that we expect during the plan horizon, you will see immediately that the bulk of it will come again from SMEs with a particularly strong contribution from DACH and CESEE, where we expect not only to continue to drive customer value, but also to gain market share and from eCommerce across the Board. You will see in a moment where exactly we plan to focus into the broader eCommerce space.
Now, without any further ado, let me deep dive into the key segments and initiative that we are enacting. We are investing in to drive the future growth, and that already Paolo has outlined before. I will not touch in detail the investments in distribution, but let me stress again that this is an extremely important part of our plan, an extremely important area for investment that is also highly synergic with all the other things that myself and Sarah will present to you today, given the importance of accelerating distribution capabilities on new products, new solution, new proposition, and so on and so forth. Let me start from SMEs. In every section, I would like to start from the customer, which is ultimately our true north for everything.
Maybe giving you a few insight on exactly who are our target customers and what is the European landscape in each segment. Again, on SME, we are looking at business that are much smaller than their U.S. equivalents. Typically, in our footprint markets, they are below EUR 5 million turnover, often much smaller, owned by families, very often single location of low single-digit number of location with a relatively low level of digitalization, which ultimately translates into two things. One is that still a very limited presence of eCommerce. The other one is that when you look at things that really digitalize the business, for example, use of business management software, they spend much less than their U.S. equivalent.
These kind of characteristics immediately translate into what they need from a payment service provider, and this is where we really like to start to then drive our proposition and solution. Ultimately, the first order of business for SMEs in Europe is ensuring a super reliable, always-on service. They need not to care about whether the service is available or not, because ultimately this drives their earnings and their ability to continue the business. The second point is making sure that their customers enjoy a very frictionless checkout. Often a frictionless checkout in Europe means one very simple thing: ensuring that all the local payment methods, local schemes and APMs, are accepted without any hitch, so that the customers can pay with whatever payment mean is of their own liking. Again, these are people who are passionate about their business. They are not passionate about payments.
We are passionate about payments. Another key need is ensuring that they don't have to care about the complexity, the fragmentation of this business. They look for someone who can provide simple solution in a bundle. Last but not the least, they are not international companies. They are super local, and therefore they really strive to find the ability to find someone who is talking to them with the local language, who is very close in terms of proximity, for example, in customer service or in any kind of other service interaction. Keeping that in mind, let's look at the bit, the three pillars of our SME focus, and let me start from SmartPay, which is our core proposition for SME. The idea of SmartPay is to combine the very best of digitalization for SMEs with a very strong set of local capabilities.
When you look at the digital angle, we are actually heavily invested in this space over the last few years, and we'll continue to invest on this, starting for something that we'll deep dive in a moment, which is our range of acceptance devices. Moving into other digital capabilities, such as the ability to be flexible in settlement, the fast onboarding, again, through the use of AI to accelerate efficiencies and effectiveness, and through the interaction with the merchants through digital properties. A very important piece that I will then deep dive, in a few pages is the space of value-added services, where we see, for example, embedded finance, such as merchant financing, is a key element for driving in the future customer value.
At the same time, we are providing a very large set of things that really make us very local and very close to these kind of customers. Starting from the ability to accept any kind of local payment method, whether it's a local debit schemes like BANCOMAT in Italy or an APM, a wallet like Visma [ByPay] in the Nordics, we are there. We have all this kind of integration, and we provide that in a bundle within a single acceptance solution. We are also very closely integrated with all the kind of national, let me say, ecosystem or infrastructure, starting from tax, moving into local standards for cash registers, all are things that are very specific to single markets like meal vouchers in Italy and in Germany. We are not just integrated.
Often, we are closely partnering with institution or other stakeholders in the local ecosystem to co-develop these standards, therefore we enjoy, again, a unique starting point in it. Last but not least, we also, in every market in which we are present, we have local customer operations, operators who speak in local language that we are making more and more efficient through the use of AI over time, we enjoy local terminal logistics, which help drive very strong service levels, for example, in terminal replacement. SmartPay already today is a significant part of our front book in most of our markets is already enjoying a very important differential in customer satisfaction vis-à-vis more traditional and legacy propositions, as reflected into the NPS score. Let me go quickly on one other point, which is our acceptance devices, our terminals, if you want.
We like to call them software-defined for a very simple reason. Our philosophy in this space is that the hardware is a form factor. What matters is the customer experience, and the customer experience is driven by the payment application, which is something that we have on our own, that we develop in our digital lab in Finland, where we have a set of specialized developers for this. As you can see, it's a wide range, all within the same family feeling. These devices can be mixed and matched for different store formats, from mobility to large multi-lane kind of shop setups. They are ready for all the future developments in terms of payment methods. For example, think about digital euro or stablecoins that we are going to pilot, as Paolo was mentioning before.
Really are the heart at our integration with ISVs and software, given their capabilities to be easily integrated through APIs. Talking about integrated payments, now let's move into that space, which is something that is super important and a super important area of investment for the future. Again, let me start with the customers. When we talk about ISVs, we often think of global leaders like, I don't know, Lightspeed or Toast in the U.S. Actually, the European landscape is very different. There are very few exceptions, but more broadly, European ISV are very small. They are extremely focalized in terms of vertical. Not just in terms of vertical overall, but often in subvertical. In healthcare, there are different software for gyms or salons.
In the vast majority of cases, they are single country with a very, very low limited international footprint. Their starting point from a technical angle is very much varied. There are some of them who are super digital, there are others who come from the traditional cash register environment, and therefore, the architecture, the technology that they enjoy is quite differentiated. This again drives their needs and their approach to integrated payments. The first need is about flexibility. Flexibility in business models because they start from a very different point and they have different growth priorities. Flexibility in technical integration because as I said, not every one of them has already a very digital infrastructure. The second is Proximity and simplicity. Again, similar to SMEs.
They don't want to care about all the regulatory compliance in payments, they want to make sure that there's someone locally that can help them first integrate payments into their own solutions and then market those solution. In general, they like to think of their payment partners as someone that can really be a strategic accelerator for their distribution, their expansion, and so on, given how much they have competing priorities, for example, between investing on the product and investing on distribution. Starting from these needs, our strategy, as Paulo already presented to you, has been focused on two pillars. Let me start from the first, which Nexi Integrated, where just a very quick recap. We plan to integrate our payment capabilities into the ISV software distributed by the ISV.
I remember that three years ago in our previous Capital Market Day, I was on this stage talking about the start of integrated payments. From that moment on, we have invested and we will continue to invest in a set of capabilities and proposition that comes under the umbrella name Nexi Integrated, that actually address all the different elements of the ISV needs. Let me start with the first one, with Nexi Partner Hub. Nexi Partner Hub is really the platform that is at the core of our integrated payment strategy. It's a very flexible solution that allow ISVs to integrate seamlessly to APIs when they are more digital or to basic portal interaction to manage their business. It is going to enjoy all the best of the AI capabilities in terms of digital onboarding and so on.
It already has a lot of digitalization to speed merchant onboarding, but we'll continue to invest in this in this angle. It has a specific set of solutions and features that are allowing ISVs to manage price, bundled offer and solution selling more in general to the merchant. Last but not the least, it allows ISV not just to accept the core capabilities, but also the wider set of value-added services, for example, in terms of merchant financing to drive, again, overall customer value. The second pillar of our integrated payments proposition is the set of, again, lock solution, physical solution for acceptance. Starting from the SmartStation, which is a modular commerce solution that I will explore more in detail in the next page that you can find at the back of this room, and moving into the SmartPOS range.
The SmartPOS range that is easily integrated into software solution to a wider set of cloud-based APIs. Very important is also the possibility for ISVs to load the software into the terminals to provide only one solution that, for example, are very useful for simpler stores or for mobility use case. All these solution can be mixed and matched. For example, putting together a SmartStation with a more traditional terminal for a pay at the table capability. They have the same software underlying. We will continue to evolve and add the form factor and models into this range. Talking about the SmartStation, the angle of the SmartStation is very simple.
We are trying to bring to local ISVs the set of world-class capabilities that some, for example, the large U.S. players are enjoying, and that the local players, the European players cannot really address given their lack of scale. It's basically a very modular solution that combines double screen interaction with dedicated payment hardware. It can be flexibly configured. For example, you can remove the front tablet to use it for some for pay at the table or for the pay at the aisle kind of situations. The ISVs can load their software into the solution, of course, and that can use the device API to integrate with the device. As I said before, can be combined with all the other solution into the range.
This is something that we just presented at the start of February to our Nordic partners with very good commercial traction and that will proceed to roll out across our markets during 2026 and the start of 2027. Let me move now into the topic of the business models. As I said, ISVs like flexibility because they have a very different starting point and therefore we have a set of different business models. That is something that really differentiated us from some of our competitors to address these different stages. The very basic business model is the lead generation. We can close the payment contract on behalf of the ISV. This allows any kind of ISV to really start bundling solution with payments with a very limited investment. Extremely suited for startups and smaller scale ISVs.
The second one is a more traditional agent service seller model with different name by market, but actually is the same stuff in which the ISV is selling on behalf of Nexi. This of course require a little bit more investment from the ISV side because at that point you integrate more deeply the software solution with the payments and therefore is where we see the bulk of slightly bigger ISVs being interested into. The last model, the Smart PayFac, is for really sophisticated and bigger ISVs that want to take full control of the user experience, deeply embedding payments within their checkout and store management flow. This requires much more technical work.
However, in this case, we take out the complexity from a regulatory standpoint from the ISV, which again differentiate this model from the traditional Payment Facilitator that are quite used in the U.S. but much less present in Europe. Exactly due to the regulatory cost. The ISV can enjoy the same user experience, the same kind of flexibility of a traditional Payment Facilitator without the regulatory complexity, without the regulatory risk. In every model, the presence of a local customer support is exactly the same. We have local solution engineers that help the ISV design and perform the integration. We have local success managers, both on operations and on the sales side, that help the ISV drive the right decision for scaling the business. Last but not the least, Nexi Alliance.
Nexi Alliance is a partner program where we actually put together our partner ISVs to create network effects and actually to a little bit help them, for example, with marketing materials, with tools and so on, to scale their business. This overall set of proposition is already enjoying quite a good commercial growth. Today, we already partner with 525 ISVs with a good pipeline of new wins and new contracts during the last year. Of course, the number by region varies based on the local evolution of the market. In the Nordics, highly digitalized societies, we have the bulk of our ISV partners. Greece, Croatia, Poland and Italy are a little bit at the start of this journey, but they are catching up fast.
Germany and Switzerland are a little bit in the middle ground between Nordics and the other region. You will see in the deck a few examples. Let me just spend a couple of minutes on a couple. The first one is a Swiss example of RunMyResto that we are partnering now, been a couple of years with them, where we provide the full set of restaurant management capabilities, integrating payments and store management solution for quick and food service restaurants, providing capabilities from pay at the table, self-checkout kiosks, integration with waitstaff devices, and so on and so forth. The other one is TeamSystem, which is a little bit of a different versus the majority of ISV in Europe. Is a much bigger company.
Is a leading provider of business management solutions, serving over 2.5 million SMEs across multiple markets, which is a recent win. Starting from Italy and expanding over time, potentially to other markets, we will integrate all our solutions into their softwares, including the SmartPOS range that you have seen before. We're starting from verticals such as hospitality and retail. Let me move to the second strategy, Nexi Smart Commerce. In Nexi Smart Commerce, we a little bit reverse the angle. We select for every market, two to four verticals where we believe that integrated payments can enjoy a faster traction.
For every vertical, we select one, maximum two strategic partners from the ISV that work with us Nexi Integrated, and we distribute the bundle solutions through the Nexi distribution footprint, including all the future investment on distribution scaleup that we have seen before with Paolo. This is a fantastic way for us to drive customer value and to cross-sell on the other over 2 million base of terminals that we already enjoy on SME. Really combining the possibility of our distribution firepower with broader solutions coming from the ISV angle. Strategic rationale for this, customer value increase, almost doubling the customer value. Over time, increased merchant stickiness, given how much it's complicated to replace software. It's a much higher barrier versus moving to other players or providers.
In an age of artificial intelligence, also giving us more access to data such as the card content, which of course is extremely important. As you can imagine, being a partner on Nexi commerce for an ISV is a fantastic strategic opportunity, and therefore this again goes back synergically to the other proposition, Nexi Integrated, on keeping partners very much engaged with us. This is something already live in eight countries with more maturity in the Nordics and evolving into the other markets with 15 partners. This is one example for Denmark, which is Shopbox, which is a leading provider of retail solution for many small and mid-sized shops that is already live with us from the end of 2024 with a very good commercial traction and value increase.
Talking about customer value, let me just remind that we continuously working on our broad SME base on optimizing average value, and we do this via three different levers and pillars. The first one, of course, is pricing and bundled offers. We continue to revisit price every year, more or less from 20% of the overall volume based on SME. We every year change the way in which our pricing is structured in terms of bundles and leveraging also our acceptance capabilities where we are not the acquirer. Typically, this leads to an increase in customer value between 20% and 30%. The second pillar is selling more stuff, so bundling more solutions, more product and so on.
For example, creating store packages of multiple terminals or extending into simple value-added services such as Nexi Smart Converters. On average, if you look at the portfolio, for example, in the Nordics, this leads to another 30% of customer value increase. The last one is cross-selling more adjacent products. You already discussed Smart Commerce. Let me name another one, which is Nexi Smart Financing, which is merchant working capital financing that we have live in multiple markets with specialized partners that is already seeing extremely good traction in terms of customer base, over 60%, and with very high customer satisfaction. We will continue to extend Nexi Smart Financing in terms of capabilities and markets over the next years.
Let me call on stage, Sarah, that will lead us to our strategy and solution in the commerce space. Sarah, floor is yours.
Thank you, Roberto. Good morning, everyone. Great to be here with all of you. Let us take a look at eCommerce. In eCommerce, our sweet spot is the mid-market segment. You can think of a smaller Italian merchant and a Mittelstand German merchant as a sort of bookends of that segment. This segment represents around 70% of the market revenue pool. Merchants in this segment are typically reasonably eCommerce savvy and very local needs oriented. That make them overall a good fit for Nexi's particular mix of global and local. On the one hand, they need the type of eCommerce proposition that you need scale to build. On the other side, they attribute high value to the local servicing model that we offer them. This in turn means that they have a pretty good willingness to pay for our services.
What we see in this segment is 2x-3x the take rate that we see on a larger enterprise-grade merchant. We also face less competition in this space, and perhaps most importantly, we have a great opportunity here on the back of our in-store base to upsell and cross-sell. Put all of this together, and you have a great driver for growth in eCommerce, as evidenced by our 20%-25% growth that Paolo was mentioning. Let me talk a little bit about the proposition that we offer within eCommerce. We offer a full scale, full stack collecting solution with all of the bells and whistles that you would expect from a strong eCommerce proposition. That is combined with a local servicing model. That means that our customers can call a person who speaks their language if they need to during their integration.
That also means that we offer a local product flavor to our eCom checkout proposition. Let me give you a few examples of the things that our leads and our customers appreciate from our offering. I wanna start with the checkout per se. We obsess endlessly with the quality of our checkout. That means we work continuously on removing friction from the checkout. We work on optimizing conversions of that checkout in every step of the flow. Now, we can draw on a few advantages here by virtue of the length of time that we have been in our markets and by virtue of our market share. Let me give you a few example. If you go to account-to-account markets like Finland and Poland, we have spent years honing the integration that we have with local banks there. Take Finland as an example.
Eight out of nine banks that we are integrated to there, we see success rates between 94% and 98% on account-to-account payments. You won't find a lot of benchmarks online, but I can assure you that those are numbers that are really quite impressive. In the Nordics, our brand is strong, the consumer trust is strong, and that means that we essentially can gather consent from our consumers to save their payment preferences. If you combine that with a large market share, then you essentially get a nice networking effect across all of our merchants. In Italy, issuing and acceptance propositions both are so strong and we are so entrenched in the market, that when we put things like Click to Pay into the market, we can drive adoption on consumer side and merchant side at the same time.
If you add all of this together, we have so many levers for improving the checkout flow and convergence for our customers. On the local side of things, we quite frequently survey our merchants for, you know, what are their preferences when they choose a payment service provider. It does not matter what geography we survey in, it does not matter what segment we survey or whether we survey our merchants or merchants who use one of our competitors. There is one thing which consistently comes out in the top three things that merchants attribute value to when they choose a provider. That one thing is the payment mix. It's not so much the number of payment methods that are made available, it is the availability of that specific thing that I need in my local market with that specific quality.
Not so surprising, really, because, as a consumer, I wanna find the method that I trust, low-friction method, and perhaps most importantly, you know, in markets that don't have huge digital trust, and we have those across our geographies, you wanna find something that essentially you trust. It is also an important parameter to the payments, to the price of the payment mix for our merchants. Again, we derive a few advantages here by virtue of our place in the ecosystem. The partnership that we have, for example, with BLIK and Vipps MobilePay or our role in industry initiatives, most recently, case in point, Wero, that we are launching at the moment in Germany. I have talked about the checkout experience, I have talked about the payments mix.
I'm missing, perhaps just one component, which is also substantial. Card payments still make up a substantial part of the payment mix for most of our merchants in most of our geographies. Let me just touch quickly on the performance here. These are overall Nexi authentication and fraud rates for card payments. We perform well in both of those areas consistently. Those are things that they are important to our profitability, but they're certainly also important to our merchant profitability. This is an area that we continue to optimize on with the various levers and tools that are available for that. Okay. Let me turn the perspective a little bit and talk a bit about our profitability in the area.
In general, the fragmentation in Europe and the complexity of payments in Europe is our friend. The first data point that I'm showing you here is our take rates across a series of the APMs that are most prevalent. We have indexed them at one for debit cards and anonymized a little bit across the APMs, but the point should still be clear. We managed to negotiate what are pretty healthy margins for us, while also providing our merchants with these attractive payment methods. It probably goes a little without saying that the complexity represents a moat against newcomers in the market. Perhaps a little bit less obvious, we also see that our merchants will pay higher margins for us to solve the complexity for them.
We see way stronger margins when we sell combined all-in-one solution, where all of the APMs get collected by us, paid out in one with one settlement report, than what we would see if we do just the acquiring and the gateway, and certainly stronger than what we see when we just sell a technical gateway and leave the complexity to the merchants of figuring out all the payment methods. A few client examples to just perhaps make it a little bit real. Kop & Kande is a high street retailer. They do home decor type goods in Denmark. You will find them in pretty much every shopping mall and every shopping street. They chose us a number of years ago for their eCommerce solution.
They're very happy with the solution, in particular, the simplicity of the all-in-one, and again, the one payout and the simplified reporting solution on the back of that. Sport Bittl is an example of the German Mittelstand customer. They are an online retailer of outdoor goods and skiing equipment. They are a slightly newer customer. They came to us two, three years ago, and they essentially chose us because we were able to offer an invoicing solution white label with a series of bells and whistles, which was what they wanted for that invoice payment, which is very important in the German market. I will finish off on technology. You will remember that Paolo said that we are consolidating our technology base, and that, of course, is not least true very much in eCommerce.
I guess today, standing sort of at the brink of transformation of at least some of the online shopping experience towards a more agentic driven world, many of you will be asking whether Nexi is ready for this transformation technology-wise. The short answer to that question is yes, we are. In the last three to four years after merger, we have been consolidating our technology stack. We have obviously been choosing the most modern of our technology stack. We have been refactoring, we have been re-platforming where we thought we needed to. That essentially gives us a few advantages here. If we start with the customer front ends.
Our customer front ends are built on modern frameworks and modern security standards, which means it is not too hard for us to deploy all of these AI protocols. There is a proliferation of them at the moment on top of that customer endpoint. Our business logic is decoupled. We've built a number of new shared components in recent years. That is a great flexibility to have as we will need to innovate the proposition, the business model, the service model. Finally, when you go to our infrastructure, it is polycloud, which essentially gives us a little bit of choice of different technology boxes when we want to move fast on something new. This is hand in hand, of course, with empowered end-to-end teams that can move fast.
We use AI pervasively, throughout our products and technology teams in design, in product, in engineering, and perhaps the best way I can evidence that is by saying that our lead technologist within AI has not written a line of code since November. On that note, I'll pass it back to Roberto to give you an overview of our efforts in agentic.
Thank you very much, Sarah. Let me now again, focus a bit on the topic of agentic, and start from the broader view. In general, in Nexi, as Paolo mentioned before, we are investing, to bring AI into the efficiency angle and into the product innovation angle on a number of very different dimensions. Let me deep dive on, the specific, angle of agentic AI on two different perspectives. The first one is what we call agentic servicing. We firmly believe that as we do, also our customers and our merchants are using agents to automate their own internal workflows and to create efficiencies for them into their own business logic.
We have just launched, and we will continue to extend in terms of capabilities and market coverages, a solution called MCP Server that allows our merchant customers to interact with all our eCommerce capabilities via APIs in a way that is designed to enable automated workflows via agents. We will use the same capabilities to embed a chatbot interaction within our merchant properties, but really believe that the value here lies in allowing a merchant, for example, to mine transaction data using an agent from their own properties or, for example, to use a merchant customer service to send payment links through agentic interaction. We are starting to see very much interest in the Nordic merchant on this, and we will continue to add merchants to pilots and evolutions and to co-develop with merchants over the next months.
Moving to agentic eCommerce, I think it's important to reflect a little bit on the different parts of the purchase journey and where agents play a role and where agentic payments play a role. If you look at the classical purchase journey, you have a phase that I call upstream, which is the search, discovery, and consideration phase, where we already see the disruption coming from AI. It's obvious, this is a part where the regulation is much less impactful. There is the consumer protection, but not much more than that. It's where actually there is a significant benefit for consumers in terms of speed and simplification, and there is not much trust required on that.
Ultimately, I'm asking ChatGPT to select my new running shoes is not something where I require a lot of trust into the capabilities of the technology. This is a space for other industries. This is a space of the advertising industry, of the search industry, where you're already starting to see the disruption happening. If you move downstream, sir, into the purchase itself and the payments, this is where the agentic payments start to matter, and this is the real Nexi space. This is something where the regulation is much more present, especially in the European context in general, where you really need to have a much bigger consumer trust into the technology because ultimately you're asking agents to perform a payment for you with your own payment credentials.
Where the jury is still out, to be honest, whether this will become relevant for every kind of purchases, for more low, more commoditized kind of payments, vis-à-vis bigger transactions. This is also the space where the technology and the competitive landscape is less clear. However, we believe that this is for us an opportunity anyhow, and we are starting to invest early to make sure that we are the one that are shaping the European market in agentic eCommerce. During the next months, we will progressively add to our Nexi Checkout proposition agentic payment capabilities, starting from the next few weeks with human-in-the-loop payments and evolving into full agentic payments as standards become more adapted to the European setup.
We are working together with all the important players in this space to actually shape the European market, starting from Google, from the big tech angle, and moving into schemes such as Visa and Mastercard. We believe that we have really an opportunity here to be the one that lead the mid-market merchants, but also our partners such as ISVs and banks into this space. If you really want to take the downside perspective anyhow on this and consider this a threat for Nexi, let's remember anyhow that the overall eCommerce space is 6% of our revenues, and this is probably going to be relevant on specific verticals and on specific sets on average tickets, so probably much less than that. Again, we believe, and we firmly believe that this will be for us a net opportunity.
Let me finish with the last segment, with the mid-corporate space. Why mid-corporate is our key target? For a number of reason. The first one is that this is a space where margins are much more interesting than in larger segments. The second is this. This is a space of companies up to EUR 500 million of revenues that really value in terms of needs what we can offer them. For example, by ensuring that they have very high conversion, both online and in-store, to local payment methods, by requiring seamless integration with local standards for C-CRM, ERP software or ECR software, and really valuing reliability, both in terms of platform reliability and of local presence, for example, for customer support, and for terminal logistics.
These are companies that are often coming from the in-store, and now they are evolving into the omni-channel space, as eCommerce become more relevant also for them. This is why we like to think of our solution as combining again the best of digitalization, especially for omni-channel capabilities over time, with local presence and proximity. In terms of digitalization, I would like to highlight three elements. The first one, that we use the same SmartPOS devices with dedicated features also in this space. We have for eCommerce and omni-channel a dedicated set of payment gateways.
The Nexi name is Nexi PayGate for this solution that are specifically targeting the enterprise needs and solution. We enjoy, again, in, as a very important value point for us, the authorization and fraud rates that are superior to the market average that Sarah already highlighted to you. On the local angle, the payment mix in terms of local schemes, but also the deep entrenchment into the local infrastructure has already been covered. I would like to highlight that even in this space, we have in each and every market, solution and pre-sales engineers that work with our sales teams in answering to tenders or to tailor-made solution into the merchant needs. We typically verticalize our Nexi unified proposition on four vertical solution. Nexi unified retail for the broader high, high-end and high-street retail. Nexi unified express for grocery.
Nexi unified hospitality, specifically designed for the hospitality sector and restaurant sector, also leveraging in the hotel space our strategic partnership with Planet. Nexi unified go is instead targeting EV charging, smart mobility and petrol industries. Very good commercial traction across markets also this solution. These are just a few names that entered the Nexi family during 2025. If you don't know these names, it is good, because this means that we are exactly targeting the space of the mid-corporates that we are designing solution and go to market for. Again, a couple of examples in this space. For example, the Bünting Group in Germany, which is running a couple of very well-known supermarket brands like Famila, that is also present in Italy, where we provide a full stack solution that is already seeing quite good business growth together.
The Phoenix group, which actually is a multinational merchants operating pharmacies chains in multiple markets, where we serve the Italian entity, with a very deep solution that includes also a API integration on ECR and CRM software. Again, another case where an international group is valuing more the local proximity and the ability to provide local tailor-made solutions. Just recapping, we have covered the SME space to what we plan to do to the SmartPay core proposition, how we plan to win in integrated payments, and how we will be having traction in the mid-market eCommerce and to the mid-corporates through a combination of dedicated solution and specific go-to-market. Let me finish by highlight that all of these, including the distribution, are important area for investment for us into the next five years of the plan.
We are laser-focused on targeting this segment, these capabilities, as the real engine of growth during the plan horizon. That was it for me and Sarah, and thank you for your attention. Giving the floor back to Paolo.
Thank you. Thank you, Roberto. Thank you, Sarah. I guess during the session, you could appreciate how much focus there is on these teams. I would really underline the integrated payment space that for us is very, very important, where I think we are starting from a pretty good position, where the market in Europe is evolving in a direction that fits very well the nature of Nexi and where we are investing ahead of the growth. Thank you so much. I will now call on stage Christian for his session on Issuing Solutions and how we grow value in issuing solution.
Thank you, Paolo, and welcome, everyone also on my behalf. Let me now deep dive into how we grow value in Issuing Solutions. Let me start by briefly introduce to you who we are. We are a leading player in the European issuing market. We are serving 250 banks, 1,000 corporates, and daily managing more than 140 million cards with an annual transaction volume of close to EUR 1 trillion. We hold, as Paolo explained, clear market leadership positions in Italy and the Nordics, while being challengers in the rest of Europe. In Italy, we primarily operate as the co-issuer under the bank's own brands, managing the entire issuing value chain, while bank, they act as the distribution channels to the card products.
In the Nordics, we operate as the leading issuing processor and technology partner. We are covering the full value chain or part of the value chain for the banks. Our client base, as you can see here, is extremely diversified and large. We are very embedded into our customers, reflecting the strategic role we play in our customers' daily payment business. This slide shows our real strengths, that we are able to attract customers that actually goes across a very broad spectrum of the financial institutions, payment players, local schemes, as well as a lot of corporates. Our customer base spans from the really large tier ones to local players, including the local schemes. Our customer relationships are typically long-standing.
Our tenure with our customers more than 20 years, in some case even much longer. This demonstrates strength, reliability, and a lot of stickiness. This diversified customer base provide us with resilience, scale, and multiple growth opportunities. We are extremely proud to offer our customers the most comprehensive and advanced digital issuing solution portfolio in Europe. We are covering, as said, the entire value chain of issuing. At the core and foundation, we have the issuing processing, and that includes authorization, that includes clearing, settlement, card management. This is the core of the issuing business. In addition to the core, we deliver what we call the end-to-end operational services, including the fraud prevention, the monitoring, dispute, chargebacks, and obviously also customer value management tools.
Our broad portfolio of issuing products, they are covering all possible payment methods for both the consumer side and as well as the commercial purposes. We operate two business models. This enables us to serve with different levels of involvement with our customers. With the issuing processing model, we are active in all geographies. In this model, the bank owns and manages the card product and distributes it to their end customer. We in Nexi serve as the processor. We provide issuing infrastructure while innovation and new capabilities, value-added services we can deliver on demand as requested by the banks and corporates.
Uh, this model, uh, obviously it leaves the bank with the complexity, uh, uh, uh, to cope with regulatory frameworks, uh, compliancy, uh, uh, and, and, and, and we are handling the, the, the technology and, and, and operational side of it. The issuing product model, again, which as said before here, is well-established in Italy and now recently launched in, uh, Germany. We manage and operate the card products while the bank does act as the, the distribution, uh, uh, channel to the end customers. Uh, um, we serve in this model, uh, uh, uh, as, as the issuer or co-issuer, as we, as-as we call it, and we operate the full issuing, uh, value chain. Uh, we are driving, uh, product innovation, we are ensuring, uh, regulatory, uh, compliance, and we are continuously adding innovation and new features and functionalities to the end, uh, uh, uh, customers.
The issuing product model is much more compelling for the banks and corporates. It reduces TCO, it reduces complexity and operational burden. It is also much more attractive for us, Nexi, as we are able to leverage our scale. The issuing product model, it generates at least, usually much more than 3x revenue per card compared to the issuing processing model. We are growing high single digit in issuing processing while it's low single digit on purpose in issuing processing, and this moves our business mix in the right direction. Our clear strategic ambition is to expand the issuing product model across Europe, building on the success we have in Italy and the recent launch in Germany. We've mentioned many time Italy, and in Italy we have built an extensive experience with the issuing product model.
We are serving 80 banks, and we are managing 13 million cards on our platform here. Customer satisfaction is exceptionally high, reflected in an NPS score of 79. This obviously demonstrates the value and the competitiveness of our proposition. Banks partnering with us can gain access to a full suite of card products, and it's also supported, as I explained before, with a broad range of value-added services. Beyond the actual product offering, we also actively partner with our customers and co-invest in marketing initiatives to boost the usage of card and also the penetration of the cards in the market. This partnership model enables the bank to accelerate growth while they reduce operational complexity as well as TCO.
Banks and corporates, as of today, are facing rising consumer expectations. Paolo also mentioned this. They are facing complexity and accelerating innovation cycles that never before. Today's customers, as we know, expect superior customer experience. That's what they are used to. Real-time personalized communication and high standards of security and data privacy. At the same time, banks are navigating growing complexity driven by expanding regulatory requirements, increasing scheme mandates, and on top of all, they are running legacy technology stacks that are not very well suited for today's business requirements. Actually, industry research shows that most of the investment on technology for the banks goes into what is called as the run the bank, such as maintaining this legacy infrastructure and meeting up with the regulatory requirements.
As a result, obviously, only a limited share of the budget is available for keeping up with the ever-increasing innovation. The pressure of this is particularly acute for the mid-size and small bank segments, as well as the corporates, because many of these institutions, they lack the knowledge, they lack scale, and they lack investment capacity required to keep up with this pace of increasing complexity and intensified competition. This drives a strong demand for highly competitive card products, lower total cost of ownership, and more agile operating models. Our issuing products directly addresses these needs and open up a EUR 5 billion addressable market in Europe for Nexi by 2030.
We are strongly positioned to capture this growing demand, thanks to a combination of deep banking relationships and a proven credibility and advanced issuing product capabilities. Comparing to the traditional processors, as Paolo also mentioned, that might have a credibility and scale with the banks, however, they lack often the ability to deliver the advanced issuing products. That actually is the products that is in the hands of the consumers. On the other hand, the NEO PayTechs coming with product innovation, coming with modern technology, but they lack the operational experience, regulatory experience, and the credibility required to serve banks at real scale. Our advantage is that we are the only one combining these two strengths of these two models.
We have trusted long-term partners with banks, full issuing product capabilities, deep regulatory and operational experience, as well as proven ability to scale across large banking ecosystems. This unique position enables us to bridge the gap between the traditional players and the new innovative PayTechs. Our growth strategy, it is based on two clear priorities. Number one, growing value within our existing customer base. Number two, winning new customers. We see a significant opportunity to continuously increase value within our client base by both expanding adoption of value-added services and introducing new card products. We are also expanding our customer base with our issuing product model, and to support this ambition, we have recently launched a new product family we call Nexi Ready. This is designed to accelerate growth across Europe.
Nexi Ready can be offered both to existing customers as well as attracting new customers. I will come back and explain Nexi Ready more in details in just a second. First, let me explain how we grow the value of our existing customer base utilizing broad value-added services portfolio and also introducing new card products to them. Our unique portfolio of value-added services, as I said, covers the full spectrum of issuing business. Nexi fraud and dispute delivers market-leading fraud performance with the fraud to spend ratio below 2 basis points, and this is recognized by the schemes as market-leading. Nexi Digital Channels, our front-end solution, enables bank to deliver modern digital experiences for cardholders, and here we get top ratings from the cardholders. We have an NPS of 70.
We also see that from the Apple and Android app stores, we get top ratings. The end user and the banks are extremely happy with our solutions. With Nexi customer value management, CVM, as we call it, issuers can actively manage and optimize the card portfolio, and our data shows that the customers that use these CVM tools see a clear uplift in spend per card. Nexi Insights provides a comprehensive library of pre-designed reports supporting a wide range of stakeholders, also including the ever-increasing regulatory reporting.
We continuously expand our portfolio with new added value-added services and we are already actually engaging with our customer base to support them with future feature and initiatives like the agentic payments and digital euro. We actually expect to launch, as was mentioned here earlier, the first pilot of agentic payments already this year. Here another example. This is a great example of our ability to actually scale the and launch issuing products to our customers. This is the international debit card that we launched in 2018 here in Italy.
we target banks that were looking to complement their domestic card scheme with an international debit functionality, allowing them to online shop and to actually travel to get the international acceptance. Since launch, the product has had strong traction. We have over 65 banks onboarded, and we've launched 9 million cards, and this generates EUR 130 million in revenue, continuously growing. This same product is particularly relevant in countries with a strong domestic scheme, like Italy, obviously, and Germany, which we will introduce later. Moving into winning new customers with Nexi Ready. As said, recently, we launched Nexi Ready in Germany, our new digital issuing product.
Nexi Ready is a fully integrated solution providing everything needed to run a competitive card business while remaining branded totally under the bank's own identity and brand. Nexi Ready dramatically reduces the complexity and implementation time. Banks can go from deciding to issuing their first card in just a few months. We will see proof of this in just a few seconds. This is a step change in time to market compared to more traditional issuing implementation models. For those of you who have been into issuing, this can usually take years. Going from years to months is a real step change. We will obviously ensure that the platform remains compliant while incorporating latest and greatest of the innovation of value-added services, including the digital euro, including stablecoins, including agentic payments.
This ensures that the customer using Nexi Ready can remain at the forefront of innovation without the need for heavy investments. I promised you to illustrate a bit this in real life. Let's now hear directly from our first German customer of Nexi Ready, Bank11. Wow. A happy and engaged customer is the best proof we can get that we are doing the right things, right? As you heard, Nexi Ready revolutionizes the customer experience and the time to market. Shortly, how do we do this? Nexi Ready, the platform is pan-European by design. It supports multiple languages, multiple currencies, and it enables us to scale across markets. It is built on next-generation cloud-native architectures using the best of group-wide capabilities.
This enables it to run real-time data and analytics, and it has a highly scalable infrastructure, and gives the most important thing, a state-of-the-art user experience. Nexi Ready allow the customer to operate more efficiently and to deliver the user experience that the customers of today demands. We keep the platform compliant with evolving the regulations and all the scheme requirements, and we bring the latest and greatest of payment innovation directly into the platform. As said earlier, we are today serving the Italian market with a comprehensive issuing product portfolio built over many years, strong partnerships with the bank. We are here constantly adding new functionality to our platform, allowing the Italian business to grow.
Our strategic ambition, however, is to expand this successful model across Europe with an initial focus on Germany, as I said. Leveraging the launch of Nexi Ready and expanding the Nexi Ready family with additional card products, the debit, as I showed you, and corporate, premium, and so on and so forth. This positions us, as Nexi very well to capture the EUR 5 billion growing issuing product market across Europe. Let me come back here to our strategic initiatives where Sarah and Roberto left and give you my three key takeaways. Number one, we have the most comprehensive advanced digital issuing portfolio in Europe and a proven track record that we can scale the products. Number two, banks and corporates are under growing pressure and increasing complexity and consumer expectations.
Number three, we've launched Nexi Ready in Germany. We are having a clear ambition to further expand in Europe. With these words, I wanna thank you for the attention. Please, Paolo, the stage is yours again.
Thank you. Thank you, Christian. Overall, as you probably understood from Christian, we're quite excited by Nexi Ready. It's really a unique proposition built on the unique capabilities of Nexi in this space. It's leveraging on real experience built over the last several years in Italy, and the traction that we see in the market is very, very encouraging. It's not something that you sell hundreds of it with fast activation because it's typical of issuing products, but reality is that we really see this as a very strong opportunity going forward. Let me quickly recap the key messages before opening to your questions. First of all, Nexi is an enduring Platform, a platform that is characterized by a unique positioning in the market.
Let me remind again this combination of scale, European scale and local market entrenchment. Second characteristics, we're a company that can enjoy high quality, resilient growth. Not obviously super high, you know that, but we are convinced we can grow long, long term on a mid-single digit plus level. Last but not least, a company that for its own characteristics and for what we are doing, its own positioning, now is also ready to address the emerging themes, and we talked a lot about payment methods and agentic commerce and AI more broadly. Again, the key themes are the ones summarized on this slide, a unique positioning in a market that we believe will continue to grow and has exciting opportunities for companies like Nexi in terms of further expansion.
This allows us to have this resilient growth that we are powering further with very specific growth investments. We'll continue to combine this with the efficiency that has characterized always Nexi and will continue to character as Nexi going forward. This will allow us to continue generating strong cash and return it to shareholders. This is true today, will be true tomorrow, and will be true also for the long term, given our structural resilience. Let me close by recapping the guidance that was presented by Bernardo. In terms of revenues, 2026, we expect to grow broadly in line with last year, with some visible acceleration in the second half of the year after a softer first half.
We expect Merchant Solutions instead to reaccelerate consistently with the fact that the exceptional bank contracts effect in Merchant Solutions will basically go down and almost now finish towards the end of this year. Therefore, into next year, we will have more normal bank effects for Merchant Solutions, and then we come back to more visible growth. In the longer term, in the midterm, now we expect to go back to mid-single digit growth into 2028 as these bank effects basically go back to normal levels. As far as EBITDA is concerned, now we expect this year to deliver an EBITDA more or less in line with this year.
On the back also of the strategic investments that we have decided to do this year in order to support the growth initiatives. We expect to come back to EBITDA margin expansion in 2028 on the back of the reaccelerated growth. Overall, excess cash is about EUR 750 million projected for this year, now on the back of these strategic investments and also the higher taxes that Bernardo has talked about. Without this would have been continued growth compared to last year. Overall, we expect to generate about EUR 2.4 billion over these three years, 2026, 2027, and 2028. Last but not least, you know, in terms of capital allocation, we are increasing by 20% our dividend per share this year to EUR 0.30 per share.
Now, this is equivalent to more or less EUR 350 million, maintaining a commitment to investment grade and continuing our leverage reduction. Looking into 2026 and 2028, we expect to continue this dividend distribution, growing it about 5% per year A distribution to shareholders that is higher than EUR 1.1 billion over the period, still continuing the leverage path and remaining investment grade. Let me now pause there. Let me call back Bernardo for your questions. We'll take questions from the room, obviously, but also from remote, from the people that are connected. I would ask you to, you know, say your name and your company so that everybody else can understand where the question is coming from.
I see a lot of hands. Let me start here.
Awesome. Thank you very much, Paolo and Bernardo and the team for the presentation. This is Justin Forsythe from UBS speaking. A few questions from me, if I don't mind. That commitment to investment grade, can we just talk a little bit about the debt load? We're still at around EUR 7 billion gross in debt. We're now at a point where leverage is 2x or more the equity value of the company and continues to shrink as a proportion of the overall enterprise value. I think I speak for most investors in suggesting maybe a debt pay down would be welcome. Maybe you could talk a little bit about that, and in particular, the 2026 maturities. Are you planning to pay down a portion of that with cash as they come due this year? I think there's around EUR 1 billion outstanding.
On the second question, on the GDP plus point that you're making, revenue growth clearly in line or slightly above GDP, as you were saying, I think 4%. You're giving 5%-6% on an underlying basis. On a transaction volume perspective, is that the same number? I think maybe ex bank M&A, you're slightly under GDP. Maybe you could just talk about that for a second. Finally, appreciated all of the ISV points that you were making. Seems like you're really investing there despite it being a small portion of the mix today. Maybe you talk a little bit about the distribution channels that you discussed. You talked about a referral channel, a lead generation channel, and then the full PayFac model. What is the mix today? Are you mostly skewed to the lead referral channel for the smaller ISVs?
Is there any added benefit to functionality that a small business gets from working with you Nexi Integrated on the lead referral channel? Or are they just simply a lead referral, and they get the same functionality they would get if they bought from you directly or via a bank?
Bernardo, you want to take the first two, and then I go on the third one?
Yep, sure. With regards to investment grade and our journey towards investment grade and hopefully continuing in terms of, you know, this journey going forward in terms of improving further our investment grade rating, I think there is not one metric that is used by rating agencies in order to rate us, right? You referred or referenced, you know, net leverage that's coming down. It's close to the 2x-2.5x, which we have in the past indicated as being, in our minds at least, and having discussed this with the rating agencies, kind of a sweet spot where to be in.
Gross leverage, which you also re-referenced, is gonna come down because, as you suggested, we have EUR 1 billion of maturities, which is gonna be reimbursed in the coming weeks or months. That will be used, as you were suggesting, with existing cash. By the way, part of this was pre-financed last year. All of this is part of a, you know, I would say, carefully crafted plan, which is of a gradual leverage, simply because, I mean, the leverage we have has been conveniently, let's say, it was created at a time where rates were very low. It's still today, I mean, our average cost is less than 2.5%, right?
There's no rush to reimburse these maturities early on, even though, as you were suggesting today, you know, the debt, the debt pile is worth more than twice the market cap. At the same time, if I stand back from a financial standpoint, I believe that what we're doing is prudent. We're bringing down that leverage. We continue to focus on generating cash, which gives us optionality. Part of this cash, not all of it, has been used to pay out in the form of dividend. At the same time, by conserving, by keeping cash within the business, we're bringing down net leverage, and every time a maturity comes due, we are reimbursing it. Over time, obviously leverage will come down just by the nature of our business.
I don't see a rush or a financial sense, in terms of early reimbursing, you know, a convertible bond, which is a zero coupon. I think that's the path we will continue to go down. You know, fortunately, given what's happening in the world, we don't have to tap credit markets today because, you know, we have such a strong balance sheet, and we'll go down that route.
Yeah.
The second question on nominal GDP, you know, we're talking about revenue growth. I think that's what counts. I mean, whether if you look at volumes, maybe they're below, I don't know the numbers off the top of my mind, but, you know, we have a number of, you know, not 100% of our revenues grow with volumes, right? I mean, there's a lot of things we do to, you know, to try and underpin our revenue growth, to underpin our revenues, which are besides, you know, the sheer volume growth I think you were referring to. Remember, 40% of our volumes, our revenues are basically more subscription-like and allow us to work that base and try and compound the growth that comes from...
This is how you deliver that 5%-6% growth we've seen in the past, which is above nominal GDP growth. If you look at just purely volume growth, it might have dipped. In general, I think we should just look at revenues, and we do work 100% of our revenues, not just the ones that work on volumes.
I guess real quick on that point.
Yeah
just to clarify, because I think there was a slide in there you mentioned increased bundling. I think you talked about repricing actions as well.
Yep.
Also merchant financing. I guess the question would be if positive repricing is a portion of the growth algo, then, you know, you're growing lower than GDP. That might be perceived negatively, I suppose.
If I may, we should always remember that the volume-driven growth is just a part of our growth. We have a mix of install base, and volume-driven growth, and therefore, when you take the GDP growth, plus if you want also the expansion of penetration, that comes down to a 3% growth for us. From there, we work with new products and services. We work with optimization of pricing, as you rightly mentioned. We believe it's a healthy way of managing the business in a context where volumes are growing and therefore there is always some price pressure. It's a little bit of portfolio that has always worked, and we continue to focus on.
Coming, on your question Nexi Integrated and Nexi Smart Commerce and so on and so forth, and the broader space of ISVs, I think it's always really, really important to remember the specific characteristics that it has in Europe. A lot of these, I would say the vast majority, are small ISVs with less than 1,000 merchants each. Therefore, sometimes they also have limited capabilities to go to market themselves. No? They really focus on their products, which is also very nice. Some of them are in the evolution from being ECR providers into becoming digital ECR providers into becoming software product providers. On the two fronts, we try to help them in this journey. Now, Nexi Integrated, we provide them with tools, support.
I think the Nexi Station is a great example. In Europe, almost none of these ISVs have the scale to develop their own hardware, like instead you see in the U.S.. Therefore, you see these solutions with cables, tablets, you know, stands, which actually are a little bit messy, especially for a merchant. We are helping all of them to come out with more integrated, robust solution, serving them to their customers through their channels. At the same time, as we said, we also want to be able to bring directly to our customer base in particular. That's really the focus. No integrated products where we have no, a more direct role also in distribution.
When we talk to these partners, they love the idea of being able to work with us and leverage our customer base and our distribution reach the customer base. We're providing value to these partners and to their customers in both, on both sides.
Thank you very much.
Thank you.
I don't understand.
Let's go with this. Please.
I think we'll answer it right after everyone.
Yeah.
Okay, perfect. thanks for the presentations and for taking my questions.
Pavan Daswani from Citi here. I've got a couple. Firstly, on OPEX. Can you talk about the phasing of OPEX growth from the 5%-6% expected in 2026 to the 2%-3% CAGR in 2029, and whether most of that shift will happen in 2028 or sooner? Because my rough math based on the EUR 2 billion-2.1 billion 2028 EBITDA target seems to imply a roughly 50 basis point margin expansion out to 2028. Secondly, following up on the ISV question, good to see the significant number of partnerships and distribution channels. Given a lot of these are not exclusive, can you share some data points on volumes coming in from ISVs? M aybe more broadly, how do you measure the success of these partnerships?
You want to take the first one?
The cost, yeah. On the cost front, you should think of. I tried to highlight this. You should think of 2026 as being an exception to the rule where our costs grow between 2% and 3%, and I would expect that to be the case in 2027 and 2028. I think it's really specific to 2026 what's happening to the otherwise very consistent trend in terms of costs. You should think of it not as a 2028 event where we go back to that level, but already in 2027. This should help you, I think, with your margin accretion in 2028, because I do think that we will go back, and we said that, to meaningful margin accretion in 2028. North of, I would guess, that 50 basis points that you have in your model.
You should always consider that, if growth now is in the mid-single digit space, with our operating leverage and so on and so forth, basically, you immediately gain the opportunity to expand margin, 50-100 basis points.
Okay.
Going back to the point, on ISV exclusivity and so on and so forth, let me try to answer you in two different ways. First of all, when we look at the markets where ISVs and more broadly partners are more established, we see this as being our fastest-growing channel in terms of volumes, in terms of front book, in terms of the volumes they generate, which tells you that not only we're winning new ISVs, I think last year we won 100, bringing the total to 500 and 25, but they're also coming with customers, merchants that they sell our products to. That's one side of it.
The second side has to do with the fact that as Roberto has shown you know, we are really developing a suite of products and services for them, and we believe that this is very important. Some of these relationship as you're rightly saying, are historically a bit more tactical. I work with several players. I sell a little bit of this, a little bit of that. Now, we are in the journey through this proposition to consolidate those volumes on us.
Because the moment when you give them the hardware, the moment when you give them operating systems that make their life easier, the moment when you get them the flexible business model that suits their need, you help them with development and distribution, that's when we expect them to converge more and more on us. Clearly, for example, the station will be for the ones that work with us, you know, exclusively with us.
Yeah. Hello, everyone. Sebastian from Kepler Cheuvreux. One question on the short-term demand market dynamics. Could you please elaborate a little bit on the trends since the start of the year? We are already two months into the quarter. How do you see the revenue trending in the first quarter and through the next quarter? You are talking about a bit lower growth in H1, then accelerating in H2. Can you provide a little bit more color on that? The second one is on the contracts renewals. You mentioned limited renewals over the next three years. What are the revenue that are coming for renewals over the next three years to understand a little bit the maximum downside in case of a bad outcome over the next three years. Thank you.
Thank you. Listen, on, um, uh, on volumes, um, the, uh, again, the drag that we see on volumes, uh, is coming from these, uh, contracts, especially with a couple of banks that we lost back in 2023, 2024. So, uh, this is a, a material drag, especially in Italy. So volume dynamics are affected mainly, uh, mainly by, uh, that. Um, so th-that's the comment. And, and th-that you will still see a visible impact, uh, in, uh, uh, the first, uh, quarter this year from that. Then, uh, over, over throughout the year will, uh, uh, ease up and therefore you will see a volume, uh, re-acceleration. On, um, uh, uh, on, uh, on, on the contracts, Bernardo, do you want to-
We had a slide. I think you're referring to that slide where we had those 20 contracts representing approximately EUR 1.6 billion of revenues. The point we made is on 90% of these revenues, they are contracted out through beyond 2029. A lot of them, I can't remember the percentage, precise percentages, but probably around half of it is actually beyond 2035. This is, you know, in my mind, this is perceived as extremely low risk, right? Primarily potentially tied to bank M&A intended as, I don't know, BNP buys, I don't know, a bank in Italy or something like that. BNP is not a customer, they take it all away from us.
That impact would only happen later on in time, as we have seen the impact from this kind of event takes years to materialize. You know, we lost Banco in 2023. We're paying the consequences in 2025. The other 10%, which is I think more to the point, we showed on the slide how this again is not the kind of impact as in bank M&A impact. It's part of negotiations on contracts where we have a broader relationship with that same client. I think there is some highlighted there where we have already a very long dated, I know, distribution agreement on Merchant Solutions. This year we need to renegotiate the issuing.
The likelihood that that goes south, you know, it's, you know, exists as a possibility, but it's less so than if we only had that relationship or, and let's say if there was an M&A deal in the midst. We have built our expectations in terms of the probability of that happening, and the cost of renewing, because when you renew these long dated contracts, you often catch up, you know, the way the market has moved. We've built that in our expectations to land at that EUR 2.1 billion of EBITDA at the end of the period. I think there's very high visibility in terms of the revenues going forward.
Going back to the points both Paolo and I made, the growth in revenues, in reported revenues compared to underlying revenues, so the closing of that gap is really about the unwinding of what happened in 2023. Then going back to a more normal level, where every year we have a lot of contracts being renegotiated, renewed, et cetera, just like we had before 2025. We showed, I think it was 1 percentage point of drag on our top line, which we expect to revert back to once we have digested this, you know, the loss of those banks that I highlighted.
I would add that, with the wave of renegotiation that we have just done, the new renegotiation that will happen, you know, forward, will also start from a different level. Some of these contracts are still M&A based somehow, and that's the reasons why we had this type of impact as well.
Mo.
Great. Thank you for the presentations as well. Mo from Goldman Sachs. Two from me. Firstly, in the Merchant Solutions division, you talked about being a leader in Italy, leader in the Nordics, challenger in Germany and some of those central markets. My question is, you know, where is the kind of big competitive threat in those middle markets like Central Europe? Particularly when it comes to the platform side, you know, who do you see there as kind of the bigger competitive headwinds that you need to navigate? In particular, I'm thinking SumUp Shopify, how big of a threat are they? Second question is you talked about also the platform convergence that you're kind of 60% the way there. You'll never get to 100%.
How big of a impediment is that sort of fragmentation of the platforms around striking some of these ISV relationships to kind of deliver this platform offering? Maybe one for Bernardo. You've committed to a dividend and a dividend growth plan. Does that mean that you've kind of ruled out any buybacks over the medium term as well? Thank you.
Thank you, Mo. In terms of competitive dynamics more broadly, the reality is that we don't see massively different competitive dynamics across these markets. In the sense that in each one of these markets, we tend to compete with, you know, banks, especially outside of Italy. In Italy, banks are our partners, therefore we don't compete with them. You know, in Germany, in Switzerland, Austria, you know, Poland, the Nordics, banks are competitors. Traditional players or local players and the newcomers. We always have to keep in mind that the behavior of the newcomers, you know, there are basically two type of newcomers. The ones that newcomers to a certain extent, you have, you know, Adyen of this world that play in a specific space where we have very little exposure, okay?
They've been there for long, they list the companies healthy, you know, and so on and so forth. In the SME space and sometimes also in the commerce space, you play with compete with players that to be honest with you, are nothing exceptional in terms of proposition and platform technology. They simply are not commercially focused, they invest a lot, by the way, as non-listed companies, very often private equity owned. There is not something that they have, or I don't know, SMEs ask something very sophisticated into the embedded finance space. That's not the type of competition that makes a difference. Depending on the market that we play with, you know, you have a different mix.
Obviously, where you're a leader, by definition, no, in order to maintain a 60% market share, you need to every day win 60% of the front book. When you are a challenger, you're starting from a 10%, 15% market share. If you win 30% of the front book, you grow share, you know. Normally what happens is that, you know, in these markets, coming to the Germanys of this world, you know, we tend to win with traditional players, we tend to win with banks, and on a customer basis, it's actually smaller, we are also attacked by the newer players. That's if you like the structural dynamic in difference in between being a challenger or being a leader in the market.
I would say that more or less the same applies, with eCom, you know? Specifically on eCom, we really see a strong traction, you know, with this mid-market, which is a combination of local digital-only merchants or small marketplaces, I don't know, wine, pharmacy, these type of things. They really appreciate, you know, the strength of our proposition and our closeness and ability to help them to integrate it. That's really our space. We win a lot also against some of the names that I was mentioning before.
We have a number of wins against, you know, also U.S. players in this space that are very strong from the technology standpoint, but actually that strength without the local presence is more appreciated by the global merchants or the global marketplaces that are not really our space and our target. When it comes to platform convergences, there's an issue with ISVs. Honestly, no. They, they basically don't care, to be very, very blunt. They care about, you know, the support we give them. They care a lot about the commercial model that we help them to operate with. They care about the platforms that we are giving them.
They care about the devices, the software, the hardware and software solutions we can give them. I think Roberto talked about how positive the reaction was in the Nordics when we presented the Station. Ultimately, the platforms that are on the back of it, they don't care. The these, for example, hub, software hub that we are developing for merchants, CRM is something that we are rolling out in the Nordics as we speak, and then we will roll it out in Italy and then... That's not really an issue. Last but not least, the dividend versus buyback and so on and so forth. Also, let me address one question that was coming from distance.
Listen, obviously, when you think about how to allocate capital, you know, you would like to do a little bit of everything, you know? Depending on the investor you talk to, there is the one that want to have all buybacks, the other one wants to have all dividend, the other ones that tells you just reduce leverage, the other one that tells you, "I really, no, I want you to invest much more in the long term, so do nothing," and so on and so forth. Then, we need to make a call on that.
We made the call for this year and for the next several years to basically choose the instrument that is the more direct to provide return to shareholders, which is the dividend. Together with that, you know, is also the one that provides the clearest signal of long-term growth, long-term resilience of that growth, as the buyback is always seen as something that can be there, cannot be there. You know, continue to combine that with, you know, gradual leverage reduction. That was the clear choice. By the way, this year we also have to pay the Banco, sorry, the Banca Popolare di Sondrio book, which is about EUR 150 million.
There we have all other, and other uses of cash from this point of view. If you project this over the three years, you know, we are committing to dividends about EUR 1.1 billion out of a cash generation of EUR 2.4 billion, there are EUR 1.3 billion left. You know, again, every, you know, year we'll reconsider how to allocate these EUR 1.3 billion based on the evolution of the market and the evolution of our priorities.
If you look at it right now, we're really trying to give a signal, a strong signal of sustainable long-term growth and sustainable long-term cash generation and growth of cash generation as a combination of investments we discussed, you know, gradual leverage reduction and a dividend.
Hello, hello, Paolo, Bernardo. Thank you very much for the presentation. This is Grégoire Hermann from Barclays. Just getting back on the growth outlook, and I think you've been quite transparent in the way bank contracts affect the growth over the next years. More specifically on 2027, just curious about exactly what drives the headwind. I think you, in the past, you've been quite clear on the impact on 2025 and 2026, but 2027, can you be a bit more precise on the nature basically of these headwinds and whether this is mainly impacting MS or Issuing Solutions as well, please?
As well, if there is potential risk of spillover, 2028's growth. Maybe, I think you just spoke about the growth potential in Germany and Poland as well, where it's exceeding the group growth there. Can you tell us about the level of cash generation in these regions as well, compared with the rest of the group, please? Thank you.
Let me, as Bernardo talked a lot about it, try to reiterate the messages that Bernardo gave on this exceptional contract negotiations. I guess three questions into your comment. The first one, there is material, no, impact also in 2027. Absolutely true. We see it more or less in line with what we expect to have in 2026, which is a bit lower than what we had in 2025. Why? Basically two reasons. Number one, because again, it's on issuing the migration of some of actually the one loss that we had, which is still the Banco thing, is actually taking longer to happen, and therefore it rolls over into 2027.
Second, because honestly, we capture the opportunity to anticipate some renewals, you know, with some large customers, as we said, to lock in the revenues for the next several years. This is a need in terms of new price conditions in 2027. Let me give you an example is a large bank outside of Italy, which is more than EUR 50 million in terms of revenues. You know, we have a long-term contract with them, which, by the way, is M&A driven. We convince them to basically anticipate this renewal compared to what was planned, you know, without running a tender and so on and so forth. You know, we gave them good conditions, but now the contract is a 10-year contract.
10-year contract. Therefore, the revenues with this bank are locked in up until 2036, 2037, based on this new agreement. By the way, we will continue to grow volume, we will continue to grow business, so it's a need that then creates a new base for growth. Point number one. Point number two, IS MS, as I've anticipated, basically in 2027, most of the extraordinary is gonna be IS. On MS, we didn't have any loss beyond the ones that you know, and that were in that box 2023, 20, first half, 2024. Therefore, we'll just have, you know, the effect of some discounts that we are giving into the renegotiations, but that's a little bit back to normal somehow.
You should see in 2027, MS back to mid-single digit plus growth. Last but not least, still on contracts, do we see the risk of this continuing in 2028? Not at this stage, but another thing has been extremely clear. We only have two contracts that are material. It can make a material difference for us. They're with two banks that we have a very strong relationship with, and where there is a clear joint interest to extend and renew. Again, the potential impact of these renewals already being factored into the exceptional effects that we have budgeted into the plan for 2026 and 2027. That's what we see.
Like, as I said, I think today we have a pretty good visibility. By the way, as Bernardo said, even if something goes wrong, you know, even if something goes wrong, it will take another two to three years, you know, before they migrate or so, which means that any unexpected effect may be 20, I don't know, 2029, 2030. Honestly, that's not our expectation. On cash generation from Poland and from Germany, I think we should make a distinction here. I think Poland is a good cash generation. Is a fairly light business model. As they grow, they generate more and more cash. Germany is in a slightly different situation.
They are growing very fast, their EBITDA, you know? The cost of operating in Germany is in general, higher than operating in Poland, you know? Therefore, I don't remember the exact numbers, but their EBITDA margin did grow from the 20s% into the 30s% last year, and will continue to grow in that direction. As on the one side, we rightsize the cost base, but we also invest into additional sales force and so on and so forth. On the other side, we grow, we grow revenues.
Please.
Hannes Leitner from Jefferies. A couple of questions. Maybe the first one, looking back at your last CMD in September 2022, you had a TAM growth of around 10%, a guidance around 9% CAGR. Today you talked about mid-single digit market growth, and that's also the target in underlying basis. Maybe you can just talk zooming out, not for Nexi, but for the industry, what really is the slowing part? If I look at the same CMD, eCommerce was also one talking point. It was around 20% of Merchant Services, which is around EUR 220 million revenues. Today, you said it's 6% of total revenue. It looked like it was tailing but while volume's growing. Maybe you can just talk, has there been some de-emphasizing of some part of the business?
Switching to the OpEx side. It seems like you invest this year more. Why is that just 5%, 6%? Why isn't it 10% to maybe front-load more investments for higher growth and taking market share? Just on the platform convergence, you mentioned 2025 have been decommissioned. Maybe you can just say how many are left and how many are the target platforms you are envisage. Thank you.
So thank you, Hannes. The... Let me go through them. Uh, on, uh, market growth, um, we are basically adjusting to what are the current projections that, that we see out there. Uh, clearly, you know, some more penetration has happened. Going forward, there is a bit less so, and I think also projections for the economy are not, uh-uh, the same that, uh, we had, uh, back, uh-uh, then. Um, and basically, now we are adjusting to those. Um, as far as, um, uh, eCom is concerned, we will, uh, help you reconcile, uh, the numbers there, but eCom is a big priority for us. It always depends what's included in eCom with cap no pres and cap pre... It is always a little bit-
The restatement you saw, a lot of that EUR 17 million, which was a cost and now contra revenue, probably at the time was only a cost and now is a contra revenue.
plus Ratepay.
Ratepay.
There are a number of things we will help you to reconcile. Said that, you know, eCommerce for us is a big priority because we really believe that we can take share in the space of eCommerce that we have mentioned. As you know, we are not exposed to the larger platforms that sometimes are also in certain markets are now faster growing. That's fine for us because there is no risk there for us. At the same time, there is only the opportunity to grow. Would we like to have more exposure to eCommerce? Yes. Do we see this position as an opportunity to grow stronger in eCommerce? Absolutely, yes. The traction that we are seeing out there in the market is confirming that.
On OpEx, the number is not a top-down number. No five, six or 10. It's a bottom-up number, this is what comes out from the bottom-up growth plans that we talked about. There is a certain number of people to be hired for Salesforce, certain number of investments in ISVs, in Nexi Ready, and so on and so forth. We believe that's the right number for this year. We will not exhaust the investments into this year, but with the efficiency measures now that 5%- 6% will go back to the normal levels in the coming year.
We see this as a peak that is driven bottom-up of the specific initiatives. On the specific initiatives, I want to be clear, some of them have a very, very clear visibility in terms of return on investments. When you hire a new salesperson, you can measure very well productivity, return on investments. Normally it's six to 12 months, so we will be able to phase them as we go along. In some other cases, we may consider them a little bit more, best. For example, on ISVs, as we said, we are trying to anticipate the market. I hope we'll agree that it's a good space to invest for a player like Nexi. On platforms, I think it's very difficult to count the number of platforms.
You may realize that now we've extended the count of platforms to IS, MS, DBS, including all the platform, not just the core, issuing ones. We went down by 25, starting from an older, larger number. It was about 40+ . We will take out another, I think, 20 or so over the next over the next few years. Again, I will not be obsessed with these numbers because ultimately what count for us is the ability to innovate on top of them, okay? We have that ability to innovate. While actually the good news is that as every single time we shut down a platform, there are associated savings.
That's the reason why, you know, in the technology space over the last, three years, we've been basically flat on OpEx, and we expect to continue to be very efficient, going forward.
Thanks. It's Nooshin from Deutsche. Three on my side. How do you expect AI to change the business model and monetization of your ISV channel, given that smaller and niche ISVs are most at risk of being displaced? Then you mentioned embedded finance is in working with ISVs. Can you walk us through how this works in practice in terms of capital allocation, risk management, and maybe P&L contribution? Then in terms of sales force expansion, you mentioned, how should we think about it in terms of the timing? Is the majority for this year or it's gonna be uniform? Thank you.
Sorry, can you repeat the second one because I couldn't... Merchant finance you wanna take it? Okay. On, on AI, listen, we said AI, we consider it overall an opportunity. Honestly, we don't see at the moment a disruption happening for these players that we work with normally not really develop a very dedicated to specific vertical solutions that are really integrating with the business, are evolving with the business. They're not generic software developments. They have real products. You know, as I said before, very often they evolve from being ECR providers into software ECR into. Rather, they have real customer experiences. They have real customer bases.
They have real reach to their customers. We don't see them particularly exposed to the ways that is out there at the moment on the broader software development. On software development, we are also benefiting ourselves, as I said before. You know, we are enjoying a much higher productivity in developing software. It's a really different space. On Salesforce timing, I will leave you with merchant financing. On Salesforce timing, there is a jump start into this year. There will be more to come into the coming years. As I said, we expect this peak to basically be only in 2026.
Again, because some of the other initiatives, for example, shutting down further platforms, will kick in, into next year and will help us to rebalance.
On embedded finance or working capital financing and the likes, I think this is a great example of how fragmented and local Europe actually is. I mean, we are already in the market with this product in seven countries now, Italy being the latest addition to our portfolio. It was first developed in the Nordics, Poland, then Germany, and now Italy as well. Within this development, I must say there's not really one country which is identical to the other in the way you do it. Our, let's say, role as a group is to make sure that we harmonize what can be harmonized, including, with reference to your question, the risk management. We don't want to take credit risk on this, with the exception, if you want, let me caveat that, with the exception of, say, seeding a startup.
For instance, in Italy, we are seeding a startup probably, you know, with the first EUR 10 million to be lent to merchants that it gets traction. We're not a balance sheet player. We're not gonna blow it or expand our balance sheet to lend EUR 500 million or EUR 1 billion and take credit risk on that. This is a common theme across Europe. That said, you have local regulations, I don't know, usury law, tax law, licenses that you require, which makes it so that you need to pick partners for you which are different in each country. I'm trying to optimize this, but it's very local. In terms of risk management, we are, let's say, not a balance sheet player. This is a bank's job, and we tend...
We'll get funding from others.
Please.
Hey, Paolo. Hey, Bernardo. Thanks very much for taking my question, and thanks very much for the presentations. It's Mark Hyatt from Morgan Stanley. First of all, just on agentic commerce, if we listen to some of your peers, the likes of Adyen and Stripe, they all talk about the benefits of having a single unified platform from an identification, fraud prevention perspective. You've been very clear around your view on platform convergence. Why do you see agentic commerce a little bit differently than some of your other peers? Secondly, on the issuing side, you know, a lot of the growth algorithms surrounds increase the mix towards issuing products, and you've obviously had a lot of success in driving adoption so far in Italy, but a lot of the growth lies outside your home market.
Could you talk a little bit about how you plan to drive penetration of Nexi Ready? What does the sales process look like, and how quickly do you think that could drive a re-acceleration on the issuing side? Finally, just maybe a big picture question on the future of payments in Europe. You know, Nexi has pretty big involvement in both Wero and the digital euro. How do you see the growth in both of these future payment options? If we start to see consumer traction in either of those, what impact do you think that that could have on the payment ecosystem, which obviously you're a part of? Thanks.
Very good. Well, agentic commerce, and platforms and so on and so forth, Roberto, add on top of my answer if you want. At the moment, I mean, the concept of platform is always a very little bit, you can call platform anything, you know, from something very big and integrated or something very small and so on and so forth. At this stage, we don't see that being a limitation on agentic commerce. By the way, when we think about eCommerce, we don't have 20 platforms, okay? The one that are relevant, from the agentic standpoint are two or three across the group. For us, the rolling out of this capability is not limited by that.
You know, the fact that we have these platforms allows us to roll it out in a way that is very entrenched into the market, the customer base, and so on and so forth. It's not that's the only thing that matters today to merchants. Again, don't forget the type of target we have. We're really talking to local merchants, mid-sized digital players, the eCommerce leg of national corporates, and so on and so forth. We don't see that as being a limitation at all. If not, if anything, an asset. On issuing products on Nexi Ready, part of the investments that we are making this year are also into dedicated sales force, you know, to promote this. There are basically two fronts.
One front is upselling Nexi Ready into our existing customer base, and there we'll be working on our footprint of banks, and that will happen over time. In that specific case, we already have the people. In Germany, where we don't have material presence in terms of issuing, we have been hiring already a few Germans, now, to support the development of the proposition. It's a part of the dedicated investment. Also because the type of people that are able to sell and serve this type of product are not necessarily the same that you have for a more traditional issuing type of product. On the future of payment, Wero, digital euro, and so on and so forth. Well, digital euro, let's see.
It's impossible to do, to make any projection, any prediction. Even on Wero, I think we are still in the early days, you know. It's also difficult to do, to make any relevant prediction there. Ultimately, we're quite neutral to that, as we tried to say before. Ultimately, more complexity, no, and more options are offered to the customers also mean that there is more need for someone specialized in payments to deliver these products and services, but also at the same time to integrate them with the needs and the habits of customers. Think about the two things you mentioned.
Our customer base of 2 million merchants around Europe at some point may want or may need to integrate Wero, no, may want or may need to integrate digital euro. Therefore, there is the opportunity for us to go there and upsell these products and services, strengthen our customer relationships, and so on and so forth. Ultimately, yes, this is complexity. It's not for us to say who will win. By the way, these are mainly consumer-driven place because a new payment method is driven by consumer demand or consumer push rather than, no, merchant pull. Therefore, we are playing into all these situations, ready now to capture, if you like, the opportunity to serve more and sell more to our customers.
Yeah, digital euro, no?
Keep in mind that when you look at agentic commerce and agentic payments, the interaction with that happens in a very specific part of the stack. If you remember the slide that we showed before, is where we have more componentized capabilities that we use across the group, across markets, across platforms where there are some local differences in platforms. This is something where that angle is a bit less relevant, but happy to do deep dive as needed afterwards.
Yeah, of course. I mean, Roberto is making a very important point. Our focus is on the payment moment, which again, is very specific characteristics. We are not in this space competing with the ChatGPTs of this world and stuff like that, obviously. Please.
Antonio Gianfrancesco, Intermonte. Thank you for taking my question. Three from my side. The first one is on industry consolidation because you highlight a disciplined stance on M&A with a focus on selective opportunities. At the same time, you presented an European payments landscape that remains highly fragmented and competitive. It would be interesting to understand whether Nexi still could be considered as a potential consolidator over time. Also, let's say, to address a raising competitive pressure or whether the strategic focus is now only on organic execution. The second one is on DBS portfolio rationalization, because during the presentation you mentioned continued DBS portfolio rationalization.
Given that DBS has historically been one of the more complex parts of Nexi perimeter, at least for me, it will be useful to understand what could be taken into consideration for the rationalization of this segment, this division. The third one is on contract renegotiation, because you said earlier that you have recently renegotiated a contract with a large bank client with a better condition for the bank. Could you please provide us a comparison between Nexi margin before and after the renegotiation? Thank you.
No, questo no.
On industry consolidation, listen, we are always, no, considering opportunities out there, but the reality is that the screening criteria are very, very rigorous in terms of strategic fit, in terms of value creation, and in terms of obviously, no, alternative allocation of capital. Do we see us potentially doing further? Yes. Really our focus is 99.9% on our own organic plan, because ultimately we believe we have what we need to succeed in the future and buying out competitors is not necessarily the right the right approach. On the portfolio rationalization, let us have some flexibility. There are two or three assets that we are considering there.
We've done it in the past, we'll continue. No, we've been considering a larger disposal over the last few months, and therefore, we've been posing now the more single disposals that are now instead back on the table. I think on contract negotiation, these contracts normally are coming with high good margins. No? And by the way, these are contracts where the cost base is very well known. No? And normally they're contracts that develop value over time. The way you think about it is also something that basically goes like this.
You have these contracts that grow in value. At some point you have a negotiation that doesn't kill the value, simply brings it back, and then it continues to grow again. Yes, there is a margin impact. Then it redevelops again because there is very good operating leverage. Don't forget that when we say that we have these extraordinary impacts from these contract renegotiations, we talk about revenues, but, no, they also come down to EBITDA in cash quite rapidly. When you think about our performance, keep in mind that we've been able to expand margin and to grow cash in a context where we had this drag that was top line, but even more so EBITDA and cash flow. Please.
Hi, good morning. Aleksandra Arsova from Equita. Three questions on my end. The first one a follow-up on contract renegotiations. Going on, in maybe 2028, you said that you have more significant contract renegotiations in 2029. What is the likelihood that you will renegotiate earlier, as you did this year or next year with the contract you spoke before? You see, downward pressure on margins in 2028 eroding, the cost efficiencies you were mentioning and the positive effect of the new products you are developing. This is the first one. The second one, is maybe more short-term on 2026. We have this guidance of low single-digit growth, flattish EBITDA. What is the evolution over the quarters you expect?
If I remember correctly, over the past few months you said the first half of 2026 will be a little bit slower because of a higher effect of the loss in contracts we know, and then an acceleration in the second half. Is this still the case? The third one is maybe a sensitivity on the remuneration for shareholders. What are the KPIs or any level of leverage, EBITDA or free cash flow, whatever, that you look at that could become an upside risk or downside risk for the dividend policy you provided us today? Thank you.
I will let Bernardo maybe take this, the last one. Listen, on contract negotiation, I think, we had the chance to talk about it, a lot, and rightly so, because it is a very important element also to understand the overall dynamic. For where we are today, we don't see, as I said before, beyond these couple of renegotiation, anything major happening over the next couple of years. Obviously you may have opportunities here and there to do something different, but we don't see them at the moment.
I believe we have pretty good visibility also because with this wave of recent renewals, we've been extending quite a bit, depending on the type of relationship you normally extend, I would say from three to 10 years. That's the thing. Downward pressure on margin in 2028. Honestly, we don't see at the moment any specific downward pressure on margin. The combination is what we mentioned. We should see a relief on margins, because again, going back to these contracts, now don't forget that when you renegotiate a contract or you lose a contract, this has a pretty heavy pressure on margins, you know.
The reason why we believe that we'll be going back to material EBITDA margin, especially in 2028, because we will go back to a normal evolution of the business where, yes, you have a little bit of these contract negotiations, but they'd be 1.5% of the total. You have growth, you have investments, and you also have a lot of efficiency measures going in. We don't see any new margin pressure in 2028. On 2026 profile, if I understand well, I can just reiterate what I said before. Our growth profile is mainly driven by the phasing of these, you know, contract effects.
We should expect a first half, a bit lighter versus the second half and therefore a stronger second half. By the way, with a different dynamic, Merchant Services and issuing. Merchant services will be still, you know, visibly affected by these dynamics in the first half, and then will unwind quite rapidly in the second half. Issuing will probably go the other way around and therefore a stronger beginning of the year. You will have, depending on how rapidly or not rapidly the bank, you know, evolve, migrate and so on, so forth, a slower down in the second half of the year.
I think the question then was on the criteria we use to determine the distribution policy or general capital allocation. I think, you know, first and foremost, as I said earlier, the Board, we are all, you know, committed to ensuring that whatever distribution policy doesn't impact our investment grade and our and our commitment to deleverage to that 2x-2.5x. Now, if you believe our numbers, which obviously I believe very much, you only need a slight EBITDA growth in the coming few years to be within that 2x-2.5x range, even distributing a lot more than that EUR 1.1 billion we are committed to.
I think we have a lot of space to evaluate every year, the dividend policy, potential buybacks, focusing on accelerating this deleverage. I think there's not one KPI. In general, I would say that gross leverage and net leverage are the most important criteria with regard to investment, sorry, the rating agencies, but obviously they look at the overall performance of the business and it's a broader, let's say, assessment they make, but that's where we start from. You know, we're kind of getting comfortable that our capital allocation policy is consistent with this investment grade rating.
We believe that we have built sufficient headroom in the dividend policy that we have committed to, and which is, you know, I would say irreversible, given the its nature, to have room to maneuver on the upside from that front.
It's 12:30, but I've seen also still another couple of hands, and then, we also have a question here. Please.
Hello. Paolo Bernardo, this is Aditya Buddhavarapu from Bank of America. Thanks for taking my questions. Firstly, on your expansion of the sales force, could you just talk about when you expect that to start having or start showing a positive impact on metrics in Merchant Solutions or in issuing? What are the KPIs that we should be looking at to know that you have the payback on those investments? Second, Germany, could you just talk about the competitive dynamics in that market and maybe what gives you confidence on sustaining that stronger growth in Germany going forward? Finally, on the ISV partnerships, what is the percentage of the SME front book today coming from those ISV partnerships? Where do you see that going look in the next two, three years?
How do the economics differ on ISV partnerships versus direct or bank channels? Is that better for you on a take rate or a margin basis, or is that worse? Is there upside to those as you sell more products?
Let me start with the first one. I will also try to answer into it the question that I have here in front of me from Alexandre Faure from BNP Paribas. Sales, no, sales investments, and so on and so forth. Listen, we've already started to strengthen our both direct sales force, in particular field force, so people on the ground, okay? Which is really relevant to target the mid SME segment and is also very relevant to become able to upsell and sell integrated payment solution like Smart Commerce. This is something that has started, no?
We are obviously hiring a good number of those, 500 people this year. It will also continue into the next year and probably the third one. We will phase it very, very carefully based on the returns that we see. Out of the investments in sales force, most of them are really dedicated to SMEs and ISVs, the vast majority. We're also doing something, for example, on Nexi Ready, but it's really something very, very small. We're really hiring very operational people. We are not hiring middle management or senior managers here. We're really hiring people that are on the ground selling.
We call it direct, but for example, in the case of Italy, or in, also in other markets where you have individual agents as a sales model, we have also included them there. It's even more a variable cost model. In Germany, we try to stay as focused as we can to where we see profitable segments, no, in SMEs and also in smaller
Thanks. Can I just one quick follow-up? Do you think that the... Sorry, Paolo,
Okay, sorry.
Sorry, just to follow up. Do you think that the investments in the sales force and the product, is that the only thing which you think was a issue in terms of, you know, the market share dynamics you've seen over the last few years? Do you think that's all you need to do to, you know, go back to that missing leg of growth? Is there anything else in terms of, you know, the competitors having a more nimble business model? Anything else?
Well, listen, you know, when you do a plan, and in our specific case, the plan that was approved by the Board has been a five-year plan, so not just the next three years. With the market, we commit to a three-year plan, for a number of reasons. We really try to, you know, put in, you know, all the refresh views on the market evolution, your plans, your investments, and so on and so forth.
We believe that what we put in the plan is the right right-sized investment to address the new opportunities and face the new challenges, also because we're starting from a pretty strong position on a number of fronts. In the plan, we put in the resources that we believe would be necessary to deliver those revenues. I said before, the big focus is really SMEs, ISVs, you know, where a lot of investments are going. I want to be very, very clear. There is no such a thing as, "Oh, we need to do technology transformations or big transformation." Not at all.
These are very, very specific investments, mainly on the product and commercial front, while on the technology front, we keep on going with our, you know, ultimately running CapEx, and we continue to run our migration, our evolution that is now, for us, business as usual. Very good. Listen, I think we can close it there. Thank you very much for attending. Thank you very much for being physically here in Milan, for those of you that have been here. We'll have many conversations over the next few days. We are obviously always available. Again, the key message, you know, Nexi as a platform, you know, an enduring Platform, with strong resilience into the future, investing to create sustainable growth and sustainable returns to shareholders. Thank you. Thank you very much