Austriacard Holdings reports group revenues of 192 million Euro, up 7 percent in the first six months of 2024

Austriacard Holdings AG (ACAG) revenues and profitability growth accelerates in H1 2024 driven by technology segment expansion.

H1 2024 Group Revenues increase by 7.0 percent vs H1 2023 reaching 192 million Euro, driven by a near quadrupling of Digital Transformation Technologies’ revenues and good growth in the Document Lifecycle Management segment.

Net Profit after Tax reached 11.2 million Euro, and the margin stood at 5.9 percent.

Austriacard Holdings AG Group Vice-Chairman and CEO, Manolis Kontos, noted:“Consistent with the potential we had highlighted in the first quarter of 2024, growth accelerated significantly in the second quarter driven by an approx. 13 percent increase in revenues, leading H1 2024 to 7 percent revenues increase and an even stronger EBITDA growth of 11.2 percent. Our strategy to transition the company into a technology solutions provider is already materializing, with the revenues of that segment increasing 4 times to € 16.3m compared to € 4.4m in H1 2023.

Growth was also achieved in the Document Lifecycle Management segment, while Secure Chip & Payment Solutions recorded a slight decrease on a reported level due to the discontinuation of low margin wholesale chip module sales business, resulting from our decision to focus on selling complete smart card solutions.

We continue expanding in Türkiye, Middle East and Africa, a geographical cluster from which we have high expectations for growth, while retaining our commanding presence in all markets that we operate, as well as the Challenger/Neo Banks, where more sophisticated products like metal cards prove to be a strong marketing tool for our B2B clients that are looking for innovation in their offering.

We are on track to meet or exceeded our guidance of 10 percent revenue growth and a higher percentage EBITDA growth, resulting from enhanced operating synergies and an improved sales mix more skewed towards Digital Transformation Technologies.”

In H1 2024 Austriacard Holdings Group’s Revenues reached € 192.0m increasing by € 12.5m or 7.0 percent compared to the same period in 2023. The growth was mainly driven by Digital Transformation Technologies, which increased by € 11.9m and nearly quadrupled their revenues compared to last year. This is the result of the focus given by the Group in this solution category. The main contributors to this stage are public sector digitalization projects in Greece as well as continued growth of this solution category in the Romanian market. Document Lifecycle Management also contributed to the growth, increasing by € 2.8m or 5.1 percent, mainly driven from the Romanian market.

Secure Chip & Payment Solutions are slightly lower vs last year by € -2.2m or -1.8 percent. However, if we exclude from the comparative period the impact of our strategic decision to de-prioritize wholesale chip module sales and focus in selling complete smart card solutions (with total effect amounting to € 15.5m), the like-for-like organic growth of the Secure Chip & Payment category recorded is € 13.4m or 12.8 percent. The growth is coming from both regular banking cards sales as well as high end metal cards offered to our clients which have a significantly higher selling price per card and are accompanied by increased revenue from personalization and fulfilment services.

From a geographical segment perspective, revenue growth was driven by CEE and MEA with revenue increases of € 15.1m or 14.2 percent and € 7.4m or 24.5 percent respectively being mainly attributable to digitalization projects in the CEE segment and to Secure Chip & Payment solutions in the MEA segment. The WEST segment lagged compared to 2023 by € 2.4m or -3.6 percent mainly due to the above-described de-prioritization of wholesale chip module sales totalling € 13.9m in this segment. Excluding this impact, like-for-like revenues from WEST increased by € 11.5m or 21.7 percent with metal payment cards, personalization & fulfilment services being the main driver of this strong growth. The increase of Eliminations & Corporate mainly reflects the increase in intra-segment revenues between the CEE and the MEA segment related to payment card deliveries to the Turkish market.

Operating expenses (OPEX) excluding depreciation, amortization and impairment increased by € 6.8m, or 12.6 percent totalling to € 60.4m. A significant part of the Production costs increase (€ 3.0m) relates to the consolidation of Pink Post in Romania (company offering distribution & postal services enabling us to provide end to end services in that market), which was first consolidated in the Group post the majority stake acquisition in March 2023. Administrative expenses increased by € 1.8m as a result of the strengthening of the Group management team following the Group’s listing and reorganization in H1 2023. In addition, OPEX also increased due to adjustments on salaries and other costs due to inflation. As a proportion of revenues, OPEX increased by 1.5 percentage points to 31.4 percent, compared to 29.8 percent in the first six months of 2023.

Adjusted EBITDA increased by € 2.9m, or 11.2 percent, from € 25.9m to € 28.8m, due to revenue and gross margin growth. The adjusted EBITDA margin increased by 0.6 percentage points from 14.4 percent to 15.0 percent in H1 2024.

Adjusted EBIT improved by € 2.3m, or 12.4 percent and reached € 20.5m, fully offsetting the € 0.6m increase in depreciation & amortization, related to machinery and equipment added in the previous year to support business expansion.

Adjusted profit before tax increased by € 1.6m or 10.1 percent reaching € 17.0m as the growth in EBIT was partially offset by the increase in net finance costs amounting to € 0.7m resulting from the hike in interest rates and the higher average outstanding financial debt.  

Profit decreased by € 0.7m or 6.2 percent and reached € 11.2m which is mainly attributable to the normalization of the expenses for management participation programs (€ +1.4m) which in H1 2023 had been positively affected by a provision release and higher corporate income tax expenses (€ +0.9m), resulting from a change in tax rules in Romania and the United Kingdom. In more detail, expenses for management participation programs (SOP) amounted to € 2.1m in H1 2024 compared to only € 0.6m in H1 2023.