SIA-SSB publishes annual report

Source: SIA-SSB

The ordinary and extraordinary general shareholders' meeting of SIA-SSB, convened today with Carlo Tresoldi as Chairman, has approved the Annual Accounts at 31st December 2010 and the change of the company's name to SIA S.p.A.

Notwithstanding the prevalence of considerable market uncertainty, the results achieved by the parent company SIA-SSB in 2010 exceeded expectations, mainly thanks to the positive trend in the sectors of payment cards processing and network services, which outweighed the downturn in the Capital Market and Payments Systems sectors.

Following the management and organizational changes introduced by the new 2011-2013 Strategic Plan, the objectives achieved by the Group have also exceeded the forecasts: as of the second half of 2010, the Group has recorded an overall improvement in the main economic indicators.

"In a market scenario characterized by strong competition and pressure on margins, the company has achieved results that exceeded expectations thanks to incisive cost reduction and business development actions," declared Massimo Arrighetti, CEO of SIA-SSB.

During the financial year, the SIA-SSB Group - made up of the parent company SIA-SSB plus GBC, Perago, RA Computer, SiNSYS, T.Fin and TSP - confirmed its positioning as the leading operator on the Italian market and among the leaders in Europe in the card processing and payment services and systems sectors, where by size it is comparable or superior to the main international players, as well as in the areas of solutions for financial intermediaries and networking services.

With regard to the opportunities relating to the changes in the European regulatory framework and to the objectives set out in the Strategic Plan, the Group also reaffirms its role as primary player in the SEPA area and as partner of reference for banks, central institutions, corporates and public administration bodies.

The geographical coverage of the services supplied by the SIA-SSB Group presently extends to around 40 countriesspread throughout Europe, the Middle East, Africa and South America.

Financial results

SIA-SSB closed 2010 with a value of production which remained fundamentally stable and an operating margin showing a strong upward trend compared to the previous financial year.

In more detail, total revenues were €281.8 million, while the value of production amounts to €293.7 million.

Operating costs fell significantly (-11.3%) compared to 2009, going from €286.1 million to €253.9 million.

On the other hand, there was a considerable increase in the operating margin which reached €39.8 million compared to €6.9 million in 2009.

The year-end operating result is equal to -21.2 million Euros due to the depreciation of the subsidiary companies by a total amount of €48.6 million and to taxes of €11.9 million.

At consolidated level, the 2010 results show an operating margin in line with that of the previous financial year (€23.1 million compared to €24.3 million).

The SIA-SSB Group has recorded higher than expected revenues of €333.9 million and production costs of €331.1 million.

It should also be noted that in 2010 there was a variation in the consolidation perimeter following the sale of 51% of Kedrios to the Xchanging Group.

Business trend


In 2010, the Group processed a total of 7.5 billion transactions (+6.8% compared to 2009), 4.9 billion of which were made on cards (credit, debit and prepaid) and 2.6 billion related to payments and collections.

The number of transactions processed on financial markets (proposals and orders) rose from 7.5 billion to 9.2 billion in 2010, representing an increase of 22.7%.

In 2010, SIA-SSB managed network traffic equal to 11.1 terabytes of data (11.1 thousand billion bytes), with an infrastructure availability that, for the first time, reached 100% on an annual basis.

PAYMENTS SYSTEMS

Over 2.6 billion transactions processed in 2010 against the 2.5 billion in the previous financial year.

The volumes trend relating to collections and payments has highlighted a significant increase in traffic of almost 30% on EBA Clearing's STEP2 platform resulting from the acquisition of new volumes connected to the progressive migration at European level of payment instruments from domestic to SEPA standards, credit transfers in particular.

The volumes managed by EBA for the various types of traffic (XCT, SCT, ICT, SDD) reached a new peak in 2010 with a daily average of more than 1.5 million transactions.

It should be noted that in December the SEPA credit transfers service (SCT) reached a maximum daily peak with over 3.5 million transactions.

As far as the projects for CentralBanks relating to RTGS systems are concerned, in November 2010 the Palestine Monetary Authority successfully introduced a new technology infrastructure for interbank payments created by the SIA-SSB Group through its subsidiary Perago. The platform permits the complete automation of the payments flow exchanged between all the banks in Palestine (at present 20 banks - of which 10 are foreign - operating through a network made up of 210 branches) and manages four different currencies simultaneously.

Furthermore, in 2010 SIA-SSB won the tender called by the Bank of Italy for the management of the interbank computerised archive of bad cheques and payment cards (CAI) and interconnections with banks and financial intermediaries' remote sites.

CARD PROCESSING

The SIA-SSB Group has confirmed its position as the only processor in Europe to manage centrally, in a single technology environment, around 62.4 million internationally branded payment cards, 4.9 billion transactions and over one million merchants, and to supply issuing and acquiring services in 12 countries.

In 2010, card transactions (on debit, credit and prepaid cards) showed great dynamism within an overall 7.2% growth in volumes. More specifically, the most significant variations concerned the domestic circuits, transactions with international debit cards and prepaid cards, as well as services such as utilities payments and mobile phone reloads, with an increase mainly connected to non-banking channels.

2010 was characterized by the Group's activities in the field of acquiring both in Italy and in Europe, in line with the market trend towards a more international outlook, with a specific focus on the management of POS and ATM acceptance networks.

SIA-SSB also continued to develop innovativeservices and supported its customers with solutions that enjoyed significant success on the market: in particular, web payment functions were introduced for the management of money transfers between cardsand for the management of contactless cards. In addition, contracts have been signed to widen the use of bank channels for the processing of postal payment slips.

The mobile payments sector has seen the development of various experimental projects in mobile banking, mobility and ticketing.

CAPITAL MARKET

On financial markets, in 2010 SIA-SSB processed 9.2 billion transactions, up by 22.7% versus 2009.

In this area, SIA-SSB confirmed its focus and strategic positioning in the post-trading (Montetitoli) and fixed income trading (MTS) sectors. With regard to the offering for MiFID (Markets in Financial Instruments Directive), the company has been able to consolidate the market in Italy and promote its offering also beyond national borders.

2010 was a period of consolidation of relations with the foreign clientele already acquired in 15 countries adopting the MTS platform and also the development of markets selected as having potential in areas of surveillance and complianceintroduced by the EU MiFID directive.

During the financial year, SIA-SSB won the international tender called by the Brazilian financial marketsupervision authority (CVM, Commisao de Valores Mobiliaros) for the design and creation of the new technological surveillance system for the country's capital market.

NETWORK SERVICES

As far as SIAnet, the multi-service broadband infrastructure, is concerned, there are now 582 active nodes (481 in Italy and 101 in the rest of Europe). In 2010, SIAnet handled approximately half a billion messages.

Attention should also be drawn to the high service level achieved in all network services, which for the first time have reached 100% on an annual basis: this means the guarantee of full availability of the network infrastructure for 365 days a year, 24 hours a day, supporting the supply of SIA-SSB services.

The company confirmed its position as the principal provider of connectivity and messaging services for the banking and financial system and among the major players overall in Europe. The offering portfolio for network services has been consolidated by introducing new connectivity services to the bank and corporate clientele.

In response to the needs of financial intermediaries to reach the widest possible number of stock exchanges through a single network infrastructure, thus achieving greater cost synergies and high service levels, SIA-SSB has created a financial ring between Milan and London enabling access to the major international stock exchanges.

Thanks to the opening in 2010 of the new London hub, SIA-SSB has extended its broadband network infrastructure at international level to include a total of 11 financial markets.

New company name

During the Extraordinary General Meeting, the amendment of article 1 of the company by-laws in order to change the company name to SIA S.p.A. was approved, with effect from 16 May.

This simplification of the brand is part of the international development strategy consistent with the Strategic Plan approved during the last quarter of 2010.

Opening of the new headquarters

In conclusion, to support the current re-launch and repositioning of the company, the inauguration of the new headquartersat the eco-technology hub in the Lorenteggio district of Milan is planned for the second half of 2011. The registered office of the company will also be transferred to these new premises.

The innovative, modern building, extending over a total area of 27,000 m², was designed using special architectural solutions that are eco-compatible and sustainable from an environmental viewpoint. The new headquarters, which will bring together the present offices in via Taramelli and viale Certosa, will provide greater overall logistical efficiency while safeguarding the high standards of security traditionally guaranteed by the company, also by means of significant investments in technology (€65 million by 2013 under the Strategic Plan).

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