Austriacard Holdings reports net profit of 12.3 million Euro, up 156.8 percent in first half of 2023
Austriacard Holdings announces its financial results for the first half of the year. Group Revenues increased by 32.1 percent reaching 181.2 million Euro, driven by strong performance in payment products and solutions and the contribution of the recently acquired majority stake in a postal services business in Romania.
Growth was strong across all markets – Western Europe, Nordics, Americas grew by 30.4 percent to 68.2 million Euro – Central Eastern Europe & DACH grew by 19.7 percent to 84.5 million Euro – Turkiye, Middle East and Africa grew by 74.7 percent to 32 million Euro.
Economies of scale largely offset material cost increases, leading gross profit to a 28.5 percent increase, at 43.9 million Euro.
Net Profit after Tax increased by 156.8 percent to 12.3 million Euro, improving margin to 6.8 percent compared to 3.5 percent in last year’s half, due to significantly less adjustments compared to H1 2022.
Austriacard Holdings AG Vice Chairman and CEO, Panagiotis Spyropoulos, noted: “In the first half of 2023 we continued delivering strong results, posting 32.1 percent growth in Revenue, 31.5 percent growth in Adj. EBITDA and 156.8 percent growth in Net Profit.
In order to better capitalize on the expanded scale and reach, as well as on the enhanced solutions portfolio that the recent successful acquisitions brought to us, we proceeded to the strategic reorganization of our Group based on geographical areas. We integrated the major markets in which we operate (Central Eastern Europe & DACH – Western Europe, Nordics & Americas – Turkiye, Middle East & Africa) into separate clusters, each of them led by an EVP, member of the Management Board.
This structure will enable us to better address the needs of our customers through the provision of an expanded integrated portfolio of products and services with one point of service.
Further to the strong organic growth we drive, we would consider selective bolt-on acquisitions that could enhance our portfolio, reach and scale, consistent with our stated strategy to become an international leader in Payment Solutions, Secure Data Management and Digital Technologies.”
Austriacard Holdings Group revenues reached € 181.2 million in H1 2023 increasing by € 44.0 million or 32.1 percent compared to same period of 2022. From products and services perspective this increase mainly results from a significant increase in sales of smart cards (€ +19.8 million), as well as printing and postal services (€ +10.1 million) mainly attributed to the Romanian market through the majority stake acquisition of Pink Post solutions business (€ +9.8 million). The number of cards sold increased by 13.1 percent and reached 68.9 million in the first half 2023. From segment perspective, all market clusters contributed to the revenue growth compared to H1 2022 as presented in the table below.
Operating expenses increased by € 11.2 million or 26.5 percent mainly because of higher personnel costs (€ +7.1 million) and expenses for third party services (€ 2.3 million). The main underlying reason for this increase is the incremental business activities, shown by the increase in headcount by nearly 1,000 employees, among others as a result of the addition of the Pink Post business in Romania, as well as the salary inflationary raises and costs associated with the cross-border merger with Inform P. Lykos, Greece and the new listing at ATHEX and VSE that was concluded in H1 2023. Nevertheless, OPEX as percentage of revenues, decreased from 31.0 percent to 29.6 percent having the additional activities being integrated with accretive margin.
Adjusted EBITDA increased by € 6.2 million in the first half of 2023 and reached € 26.0 million as a result of an increased Gross profit which was only partially offset by the increase in Operating expenses. As a result of these economies of scale the adjusted EBITDA margin remained at 14.4 percent. Adjusted EBIT increased by € 5.3 million or 40.7 percent as the increase in adjusted EBITDA was partially compensated by regular depreciation & amortization (€ 0.9 million).
Adjusted Profit before tax increased by € 4.2 million or 38.1 percent as the increase in adjusted EBIT was partially offset by higher interest expenses related to the significant increase in interest rates and the ensuing high interest costs (€ +1.0 million). Profit after tax increased by € 7.5 million or 156.8 percent from € 4.8 million to € 12.3 million mainly due to a significantly lower balance of Adjustments as presented in the table below amounting to € -0.5 million in the first half 2023 compared € -4.6 million in H1 2022.
Total assets increased by € 14.4 million from € 270.2 million as of 31.12.2022 to € 284.6 million as of 30.06.2023 which is mainly related to higher inventory and contract assets due to a higher business activity level during the financial year. The reduction in non-current liabilities mainly concerns the de-recognition of put-option liabilities related to a divisional share option plan that was cancelled in H1 2023.
Net cash flow from financing activities was a net inflow of € 0.3 million compared to a net inflow of € 4.3 million in the first half of 2022 and mostly relates to the higher use of existing credit lines for financing net working capital and investments.
Net debt increased by € 10.5 million from € 76.6 million as at 31 December 2022 to € 87.1 million as at 30 June 2023 which is mainly due to the increase in Inventory and Contract assets paired with continued investment in the Group’s businesses. The net debt / adjusted EBITDA (12 months) ratio decreased from 2.8x in H1 2022 to 1.9x in H1 2023.