AUSTRIACARD HOLDINGS AG (ACAG) strategy of expansion in new markets and technology services drives a strong operating performance in 9M24.

• Q3 2024 Group Adj. Revenues increased by 29.6% and as such improving the 9M 2024 comparable growth vs 9M 2023 to 14.0% and reaching € 298.3m.
• Performance is driven by 3 factors: a) near tripling of Digital Transformation revenues, b) strong growth in Document Lifecycle Management from MEA region, and c) Secure Chip & Payment segment increased revenue from the metal cards business.
• Underlying 9M 2024 organic growth of the largest segment being Secure Chip & Payment at 20.8%.
• From a geographic cluster point, Central Eastern Europe 9M Revenues grow by 8.3% to € 173.9m due to digitalization projects, Western Europe, Nordics, Americas grow by 13.8% to € 105.7m due to metal card strong contribution, and Türkiye, Middle East and Africa Revenues grow by 28.5% to € 57.9m led by the combination of security printing and digital services.
• 9M 2024 Group Adj. EBITDA increased by 18.1%, reaching € 43.1m, due to revenue and gross profit growth, reaching a margin of 14.4% on Sales compared to 13.9% in 9M 2023.
• Net Profit after Tax increased by 10.1% to € 16.3m, with a margin of 5.4%.
• 9M 2024 operating cash flow generation at € 18.9m, compared to € -1.1m in 9M 2023.

AUSTRIACARD HOLDINGS AG Group Vice-Chairman and CEO, Manolis Kontos, noted:

“The 9M 2024 results exemplify the validity of our strategy for growth based on geographic and market share expansion, as well as product and services portfolio enhancement. Our focus is to capture all possible growth areas of the segments in which we operate, by capitalizing on our expertise and the long-standing relationships we have with our clients.

During the third quarter we posted strong performance with Revenues increasing by approx. 30%, leading 9M 2024 results to a 14.0% growth, due to strong performance in new markets, and contribution of both new products and digital services.

Notably, we expanded in Secure Chip & Payment solutions with novel products such as metal cards, in Document Lifecycle Management with complex security printing combined with digital services projects in MEA, and in Digital Transformation Technologies with state and private sector projects.

Adj. EBITDA increased by 18.1% to € 43.1m due to revenue and gross profit growth, leading to enhanced margin of 14.4%, while Net Profit after Tax grew by 10.1% to € 16.3m.

We have also managed to increase our operating cash flow generation in the process to address the working capital challenge and we continue to work in this direction of working capital normalization.

As we had outlined in the beginning of 2024, growth accelerated in all markets as the year progressed, enabling us to deliver results in line with our 2024 full year guidance.” 

In the first nine months of 2024, AUSTRIACARD HOLDINGS Group’s Revenues reached € 298.3m increasing by € 36.7m or 14.0% compared to the same period in 2023. This growth was largely driven by Digital Transformation Technologies, which increased by € 12.8m, or 153.4% compared to last year. This is the result of the focus given by the Group to this solution category. The main contributors 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 significantly increasing by € 13.3m or 16.2%, primarily as a result of a new security printing contract in the MEA region.

Secure Chip & Payment Solutions’ revenue increased by € 10.7m or 6.2% compared to last year. If we exclude from the comparative period the impact of our strategic decision to de-prioritize wholesale chip sales and focus on selling complete smart card solutions with the total effect amounting to € -20.6m, the like-for-like organic growth of the Secure Chip & Payment category amounts to € 31.3m or 20.8%. This growth is supported by banking and transportation card sales and especially by premium high-end metal cards sales (€ +20.5m), which have a significantly higher price per card and are accompanied by additional revenue from personalization and fulfillment services.

From a geographical perspective, revenue growth was evenly spread across the three segments with each segment growing by approx. € 13.0m. Growth in the Central Eastern Europe & DACH (CEE) segment was primarily driven by the solution category Digital transformation and in the Middle East and Africa (MEA) segment by a new security printing contract. Revenue growth in the segment Western Europe, Nordics, Americas (WEST) mainly relates to Secure Chip & Payment solutions and more specifically to high demand for premium metal payment cards and personalization and fulfillment services. The increase in Eliminations & Corporate primarily reflects higher inter-segment revenue with the MEA segment.

Gross profit I increased by € 21.2m or 18.3% reaching € 137.5m as a result of revenue growth. Gross margin I improved from 44.4% to 46.1%, mainly due to a higher proportion of service revenues without associated material costs.

Gross profit II increased by € 9.1m or 14.1%, reaching € 73.3m. Gross margin II improved by 0.1 percentage points and reached 24.6% mainly as a result of a different sales mix having higher contribution from services and security printing in the MEA.

Operating expenses (OPEX) excluding depreciation, amortization and impairment increased by € 14.3m or 17.4% totalling to € 96.3m. The increase in Production costs by € 12.1m or 23.3% mainly relates to the implementation of a new security printing business in the MEA region and to Digital transformation services in CEE as well as 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 in March 2023. Administrative expenses increased by € 2.2m or 11.7% mainly 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 0.9 percentage points to 32.3%, compared to 31.4% in the first nine months of 2023.

Adjusted EBITDA increased by € 6.6m or 18.1%, from € 36.5m to € 43.1m, as a result of the increase in gross margin and the adjusted EBITDA margin increased by 0.5 percentage points from 13.9% to 14.4% in the first nine months of 2024.

Adjusted EBIT improved by € 5.6m or 22.8% reaching € 30.4m, more than offsetting the € 1.0m increase in depreciation & amortization related to investments in machinery and equipment to support business expansion.

Adjusted Profit before tax increased by € 4.5m or 22.2% reaching € 24.7m as the growth in EBIT was partially offset by the increase in net finance costs by € 1.2m related to the hike in interest rates and the higher average outstanding financial debt.

Profit increased by € 2.3m or 15.7%, reaching € 16.8m. This increase is due to the strong operating performance and the resulting growth in adjusted Profit before tax which was partially compensated by higher costs related to Special items and higher corporate income tax expenses. Costs included in Special items increased by € 0.7m or 34.1% due to the normalization of expenses for management participation programs (SOPs), which in 2023 were lower due to a one-time provision release in connection with a restructuring of the then existing SOPs. Additionally, corporate income tax expenses increased by € 1.4m due to higher Profit before taxes and changes in tax regulations in Romania and the UK leading to a higher effective tax rate of 22.7% compared to 19.4% in 2023.

Total assets increased by € 20.8 from € 321.7m on 31 December 2023, to € 342.5m on 30 September 2024 as a result of higher current assets (€ +14.4m) and non-current assets (€ +6.3m). The increase in non-current assets relates to the acquisition of new subsidiaries resulting in additional goodwill amounting to € 3.8m as well as regular investing activities. The increase in non-current liabilities is related to the increase in financial liabilities (€ +9.8) as well as to contingent purchase price liabilities in connection with M&A activity (€ +1.7m). As a result of the profits generated and share-option expense recognized in the relevant reserve in equity, Total Equity increased by € 14.4m to € 121.6m. The Equity ratio of the AUSTRIACARD HOLDINGS Group improved from 33.3% on 31 December 2023 to 35.5% on 30 September 2024.

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