Italy's Nexi beats first-quarter core profit expectations

By Alberto Chiumento

(Reuters) -Italian payments group Nexi beat first-quarter core profit expectations on Thursday, boosted by its main merchant solutions business and cost control, and confirmed its financial guidance for the year.

Group CEO Paolo Bertoluzzo told analysts that January-March was regarded as the "strongest quarter of the year", and put the company on track to achieve the 2025 guidance.

The company is targeting low-to-mid single-digit percentage growth in net revenue and at least a 50-basis-point increase in its core profit margin.

Shares of European payments firms, which surged during the COVID-19 digital payments boom, have since dropped sharply, weighed down by compliance concerns after German regulators cracked down on Worldline in 2023.

The French group on April 24 postponed its annual financial outlook update until July, citing the arrival of new management and increased global economic volatility.

J.P. Morgan analysts said Nexi's first-quarter results were helped by cost control, leading to improved margins.

Nexi's costs increased by 0.8% year-on-year, while the core profit margin was 48%, up 149 basis points on the same period last year.

Core profit rose 7% to 386.9 million euros ($437.85 million), beating analysts' consensus forecast of 381 million euros in a company poll.

Nexi said it would start its already-announced 300-million-euro share buyback programme on May 21 and pledged to use existing excess cash to pay back around 507 million euros in debt due in June and December.

The company said in late April that quarterly revenue rose 3.7% over the previous year. It added on Thursday that the main boost came from its merchant solutions division, which represents 56% of total revenue and saw revenue increase 4.5%.

Nexi shares were up 0.2% at 0815 GMT.

($1 = 0.8836 euros)

(Reporting by Alberto Chiumento. Editing by Christian Schmollinger and Mark Potter)