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LEARNINGS FROM THE IPO OF NETSDIRF 15 June 2017
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Things were looking good
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When things don’t go as planned
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When you IPO and the share price immediately drops
– initially all you have (more or less) are frustrated shareholders
Investors are trying to understand if they missed something when
they assessed the business case originally
Spending a lot of time on “what went wrong” with the IPO
Dealing with frustrated investors
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Investment highlights at the IPO
5
The Nordic countries are among the world's most advanced payments
countries and fast-growing digital societies1
Leading provider of mission-critical services to the Nordic payments
ecosystem2
Well-positioned with an innovative and scalable platform3
Robust and attractive financial profile4
Multiple drivers of future growth and upside opportunities5
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Nets had 12 banks in the consortium
Joint global
coordinators
Joint
bookrunners
Co-lead
managers
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Educating analysts
Danish analysts
International
analysts
Knows about the Danish
products and solutions
Less knowledgeable of the
sector in general
Primarily sector specialist
New to the special Nordic
products like Dankort and
Betalingsservice
Non-consortium
analysts
They will be the primary voice
in the market during the black-
out period
Co
ns
ort
ium
an
aly
sts
Knowledge What they cover
Banks
IT and telco companies
Visa, Mastercard,
WorldPay, Worldline
etc.
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Dealing with negative press stories
105
110
115
120
125
130
135
140
145
150
155
160
165
22-Sep 30-Sep 09-Oct 17-Oct 26-Oct 04-Nov 12-Nov 21-Nov 30-Nov
Rebased o
n N
ets
share
price (
DK
K)
(0.4)%
x.x%/(x.x)%: change vs previous day closing price
(20.0)%
30 Sept
ABG initiates
“Sell”, TP
DKK130
30 Sept
Mobilepay
chooses
Bambora
5 Oct
Danish shareholder
association comments
on Nets’ pricing
13 Oct
Nordea drops
Swipp, switches
to Mobilepay
20 Oct
End of
Stabilisation
period
25 Oct
ATP CEO
“disappointed” with
share performance
3 Nov
Initiation of coverage
IPO banks: 2 ‘Buy’, 3
‘Hold’
7 Nov
Carnegie initiates
“Hold”, TP 130
11 Nov
Q3
Earnings
release
11 Nov
Deutsche Bank
reiterates Buy -
TP: DKK152
11 Nov
JPMorgan raises
Nets to 'Buy' -
TP: DKK158
15 Nov
Sydbank
initiates
'Hold'
16 Nov
Nordea reiterates
"Hold", TP:
DKK140
14 Nov
Danish Banks
join MobilePay
(3.6)%
2.8%
(2.1)%
(4.4)%
0.9%0.0%
(0.7)%
(2.2)%(2.1)%
3.9%
(1.4)%
(1.7)%
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From stable business model
to a story of disruption?
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Not all themes have something specific to do with the business performance
“Failed IPO” and analysts don’t support the DKK 150 IPO price
”Bonuses” to senior management
Banks joining mobile Pay – creation of a Nets 2.0?
Will MobilePay launch a major attach on Dankort and Betalingsservice?
Will new regulation (PSD2) change the entire payment space as we know
it?
The press loves a good story
Don’t forget the organisation if they are not used to the media attention
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Investment highlights today
11
The Nordic countries are among the world's most advanced payments
countries and fast-growing digital societies1
Leading provider of mission-critical services to the Nordic payments
ecosystem2
Well-positioned with an innovative and scalable platform3
Robust and attractive financial profile4
Multiple drivers of future growth and upside opportunities5
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Try to understand where you think analysts misunderstand the story
Consider the disclosure level
No matter how difficult you think your business is, analysts and investors will always try and fit it in an Excel spreadsheet
It is not always the best solution to let analysts make their own assumptions
Analysts and investors will dive deep into the business operations to assess the risk in greater detail
Management have had to spend far more time on roadshows and investor meetings than anticipated
Time will have to proof the equity story