Nexi SpA

The stable outlook reflects our expectation that Nexi's weighted-average debt to EBITDA and funds from operations (FFO) to debt will remain below our 5x and above our 12% thresholds, respectively, over the next 12 months. We could lower the ratings if we anticipated weighted-average debt to EBITDA would significantly increase above 5x and weighted-average FFO to debt ratio would decrease below 12%, likely because of a stronger-than-expected economic downturn or following more debt-financed M&A. We could consider a positive action if we believed that Nexi withstood the decline in consumer spending with a moderate deterioration in its credit metrics and we anticipated it had remained committed to its publicly announced path of financial strengthening. This would include comfortably maintaining weighted-average

...Nexi's revenue will likely face pressure in 2020 due to the COVID-19 pandemic. S&P Global Ratings expects the COVID-19 pandemic will affect consumer spending, pressuring Nexi's revenue and EBITDA in 2020 and partially in 2021. That said, we note that about 52% of Nexi's revenue is installed-base driven (not dependent on volumes of issuing, acquiring, and digital banking activities performed by the group). This would likely mitigate the effect of lower consumption on total revenue, in our view. We also note that purchases of essential goods, representing an important share of total transactions processed by Nexi, showed some resilience in recent months. Medium-term prospects for the electronic payments market in Italy remain supportive. We believe that Nexi's market shares in the acquiring and issuing businesses, of 70% and 55% at year-end 2019, will allow it to enjoy growth in Italy's card payments market. Electronic payments penetration in the country was about 24% at year-end 2018, and...

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