TIDMNETW
RNS Number : 7739W
Network International Holdings PLC
28 April 2021
28(th) April 2021: Network International Holdings Plc , Q1 2021
trading update
Encouraging start to the year with solid trading, continued
customer wins and new partnerships
Network International Holdings plc, the leading enabler of
digital commerce across the Middle East and Africa, provides an
update on trading performance in the first quarter of the financial
year 2021.
Q1 2021 growth compared with Q1 2020 Q1 2021 growth compared with Q1 2019
=====================================
Total revenue 1% 1%
=====================================
Merchant Solutions revenue (3)% (11)%
=====================================
Issuer Solutions revenue 5% 7%
=====================================
Note: Our financial guidance for 2021 is based upon a return of
revenue to pre-Covid levels, and hence revenue growth rates are
provided for Q1 2021 compared with both Q1 2020 and Q1 2019.
-- Overall trading during the first quarter in line with our
expectations, against a quarterly comparator in the prior year that
was significantly less impacted by COVID-19
-- Merchant Solutions business update
o Multiple merchant wins: including point-of-sale (POS) with
Hilton Hotels and e-commerce with the Dubai Racing Club
o SME merchant signups are significantly ahead of 2020 run
rates
o Strong growth in online merchant direct TPV at 55% y/y and 89%
compared with Q1 2019 (Excludes Government and airline online
TPV)
o New partnerships : supporting Stripe as it launches online
payment services to merchants in the UAE; and have partnered with
Mastercard and PayMate in the B2B payments space
-- Issuer Solutions business update
o Accelerating new customer signings: Kuda Digital Bank and
Carbon Bank in Nigeria, Bank Windhoek in Namibia, Bank Gabarone in
Botswana, Commercial Bank Centrafrique in Cameroon and Al Masraf in
the UAE
o Renewed our contract with ADCB for Issuer Solutions services,
having already renewed our agreement to provide Merchant Solutions
services during 2020
-- Added new capabilities to our digital product platform
developed in conjunction with Mastercard. New technology licensing
will allow us to provide white label customer apps that enable a
range of push payments and support instant virtual card
issuance
-- DPO's strong TPV and revenue growth continues, with
completion expected in the second quarter subject to regulatory
approvals
Nandan Mer, Chief Executive Officer, commented:
"We are encouraged by trading and the momentum of customer wins,
particularly our new partnerships which will help us to drive scale
and innovation across the business. I have also restructured and
expanded our senior management team, aligning responsibilities to
better serve customers and appointing country heads to further
localise our approach without compromising our high-quality control
environment or opportunities for future operational leverage.
Whilst lockdowns have eased and normal conditions have returned
in several of our markets, the pandemic remains fluid and we are
cognisant that our recovery from COVID-19 disruption may not always
be straightforward. My focus is to execute against our strategy to
drive long term profitable high growth. We continue to progress
discussions around significant financial institution payment
outsourcing mandates, and Saudi Arabia remains a key priority
despite the challenges of temporary border closure. Our goal is
unambiguous; to scale our presence across our markets, innovate to
deliver market leading solutions for our customers, and accelerate
our delivery. We have clear plans in place and I firmly believe
that Network is poised for greater growth."
Strategic and business update
Leveraging partnerships to innovate and scale our business
We have partnered with Stripe as it launches online merchant
payment services into the UAE. We have supported its entry into the
market by acting as their sponsor for the Visa and Mastercard
schemes. This helps Stripe to settle funds to their merchants.
Stripe is just one of multiple international brand partnerships
held by Network in the online acquiring space, as we work with
partners to expand the fast growing online acquiring market and
grow merchant appetite for online payments.
We have entered into two partnerships in the B2B payments space.
Network International is one of Mastercard's first partners in the
Middle East and Africa region to be part of the Mastercard Track
Business Payment Service, an innovative solution that addresses the
need for automated B2B payments and collections. Mastercard Track
Business Payment Service allows merchants to receive business
payments directly into their bank account, enabled by a virtual
card, where Network is acting as the acquirer. Our partnership with
Mastercard delivers on our shared commitment to provide our
customers with more convenient alternatives to traditional B2B
payment methods such as cheques or electronic fund transfers. In
addition, we have partnered with PayMate in the UAE. PayMate is a
provider of B2B payment automation services and supports both large
businesses and SMEs, managing their accounts payable and
receivable. Network will facilitate the settlement of commercial
card payments as an acquirer, powering PayMate's B2B payments
platform.
We have also added more capabilities to our digital product
platform, which has been developed in conjunction with Mastercard.
We have licensed and integrated technology from Fabrik, which
enables mobile application technology solutions. This will allow us
to provide white label apps for customers that enable a range of
push payments between consumers and merchants, and support the
instant issuance of virtual cards by financial institutions.
Accelerating our progress through new customer wins
Good momentum with financial institution customers: We will
provide Issuer Solutions services to two digital banks in Nigeria,
Carbon Bank and Kuda Bank; and have also signed new relationships
with Bank Windhoek in Namibia, Bank Gabarone in Botswana,
Commercial Bank Centrafrique in Cameroon and Al Masraf in the
UAE.
We have renewed our contract with long standing customer, Abu
Dhabi Commercial Bank (ADCB), to continue providing them with
Issuer Solutions services for a further five years. We will also be
supplying Arab African International Bank with N-Genius(TM) POS
terminals for their Egyptian merchants, helping to support the
Central Bank of Egypt's accelerated drive towards a cashless
economy.
Merchant signings across both POS and e-commerce: New key
merchant signings include Point-Of-Sale (POS) payment acceptance
for the Hilton Hotel portfolio, Shaklan Supermarket Group, an
additional Carrefour Hypermarket, and both POS and e-commerce for
Dubai Racing Club. We will also begin providing data analytic
services to existing customer, the iconic Atlantis Hotel in Dubai,
providing them with an interactive dashboard to monitor consumer
spending at merchant outlets in the hotel. We continue to focus on
the fast growing SME merchant customer base, where sign-ups are
significantly ahead of the average rates seen during 2020. A recent
survey from Visa (Jan 2021) showed that 97% of SMEs in the UAE have
recently embraced new digital technologies and a number of SMEs are
assessing which payment technologies are critical to meeting
consumer expectations, such as security and fraud protection, and
online payments.
We also supported Smart Dubai with the 100 Million Meals
campaign for the month of Ramadan, through donations made using our
N-Genius(TM) Payment Solution. The campaign is run in collaboration
with the World Food Programme and aims to support low income
communities across Uganda, Lebanon, Egypt, Sudan, Angola, Jordan
and Pakistan.
Aligning our business to better serve our customers
Good progress on the project to separate the shared datacentre
with Emirates NBD: We have now migrated all physical infrastructure
into our new data centre in the Gulf Data Hub, are in the process
of migrating customer connectivity, and are activating production
services from our new datacentre infrastructure. The separation of
our datacentre will continue over the coming year and will provide
our business with improved long-term operational agility,
flexibility and availability.
Expanding our senior management team during the quarter: This
included the internal promotion of a number of our country heads,
expanding the responsibility of existing senior management team
members, as well as the external hire of Marcello Baricordi as
President, Financial Institutions, Fintechs and Payments
Partnerships. These changes align our management responsibilities
to better serve customers and include the appointment of local
country heads to further localise our approach.
First quarter trading
Note: Our financial guidance for 2021 is based upon a return of
revenue to pre-Covid levels, and hence revenue growth rates are
provided for Q1 2021 compared with both Q1 2020 and Q1 2019.
Q1 2021 growth compared with Q1 2020 Q1 2021 growth compared with Q1
2019
=====================================
Total revenue 1% 1%
=====================================
Merchant Solutions revenue (3)% (11)%
=====================================
Direct Total Processed Volume (TPV) (8)%(1) (15)%
=====================================
Of which domestic TPV 0% (2)%
=====================================
Of which international TPV (34)% (51)%
=====================================
Issuer Solutions revenue 5% 7%
=====================================
1. Growth data presented on a like-for-like basis, removing the
impact of one additional day in the calendar month of February
2020
COVID-19 related restrictions across our main markets
In our core market, the UAE, cases of COVID-19 have fallen
significantly in the first quarter of the year with the rolling
seven-day average infection rate down almost 50% since its peak in
January, and over ten million vaccine doses have been administered.
Whilst this is positive progress, some social restrictions continue
to remain in place. In our other major markets, lockdown conditions
are variable; in Jordan, although many activities are back to
normal, night-time curfews and weekend restrictions are in place,
whilst Egypt and South Africa have largely returned to normal
conditions.
Total revenue grew by 1% compared with the prior year, which was
the strongest quarter in 2020 and least impacted by COVID-19. Total
revenue was also up 1% compared with Q1 2019.
Merchant Solutions revenue was (3)% y/y, within which directly
acquired TPV was (8)% y/y.
Compared with Q1 2019, revenue was (11)% and directly acquired
TPV was (15)%. International spending remains at broadly half that
of pre pandemic levels, in line with our expectations and
reflective of the gradual recovery of tourism into Dubai. Domestic
spending is slightly subdued, which is mainly linked to some of the
social restrictions in the UAE and Jordan. From a merchant segment
perspective, supermarket, healthcare and education spending has
shown significant growth, whilst retail is broadly flat compared
with pre pandemic levels. Travel and entertainment remains
depressed, largely as a result of the segment's exposure to tourism
spending. We also continue to see a fast-growing participation of
online TPV, with growth of 89% from e-commerce merchants (excluding
Government and airline online TPV).
Merchant sector trends in directly acquired Total Processed
Volume (TPV)
Growth vs Q1 2020 Growth vs Q1 2019
------------------------- ---------------------- ----------------------
Directly acquired Jan Feb Mar Jan Feb Mar
TPV (2) (2)
------------------------- ------ ------ ------ ------ ------ ------
Total (18)% (17)% 19% (14)% (18)% (14)%
of which Retail (7)% 0% 65% 4% (3)% 1%
of which Supermarkets 8% 8% (17)% 13% 19% 17%
of which T&E (44)% (46)% 36% (44)% (53)% (48)%
of which Other(1) (13)% (14)% 16% (9)% (8)% (3)%
1. Includes Government, Healthcare & Education, Other
2. February growth data presented on a like-for-like basis,
removing the impact of one additional day in the calendar month of
February 2020
Domestic and International trends in directly acquired Total
Processed Volume (TPV)
Growth vs Q1 2020 Growth vs Q1 2019
------------------- ---------------------- ----------------------
Directly acquired Jan Feb Mar Jan Feb Mar
TPV
------------------- ------- ------- ---- ------ ------ ------
Domestic(1) (7)% (8)% 17% (3)% (3)% 0%
International (47)% (47)% 35% (44)% (55)% (52)%
1. Domestic volumes reflect the spends on cards issued by banks
in the UAE and Jordan. International volumes reflect the spends on
cards issued by banks in countries outside of those regions, and
are largely reflective of tourism and business travellers
Issuer Solutions continued to demonstrate a resilient
performance and revenue grew 5% y/y.
In comparison to Q1 2019, revenue growth was 7%, accompanied by
positive progress across both KPIs; the number of cards hosted and
transactions processed. Revenue growth was seen across both the
Middle East and Africa, with accelerated growth in Africa as might
be expected given the stronger market dynamics, where the region is
at a much earlier phase in the transition to digital
transactions.
Investor Relations enquiries
Network International InvestorRelations@Network.Global
Amie Gramlick, Head of Investor Relations
Media enquiries
Finsbury Network-Lon@Finsbury.com
James Leviton, Rob Allen
Forward Looking Statements
This announcement contains certain forward-looking statements
with respect to the financial condition, results or operation and
businesses of Network International Holdings Plc. Such statements
and forecasts by their nature involve risks and uncertainty because
they relate to future events and circumstances. There are a number
of other factors that may cause actual results, performance or
achievements, or industry results, to be materially different from
those projected in the forward- looking statements.
These factors include general economic and business conditions;
changes in technology; timing or delay in signing, commencement,
implementation and performance of programmes, or the delivery of
products or services under them; industry; relationships with
customers; competition; and ability to attract personnel. You are
cautioned not to rely on these forward-looking statements, which
speak only as of the date of this announcement. We undertake no
obligation to update or revise any forward-looking statements to
reflect any change in our expectations or any change in events,
conditions or circumstances.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
TSTUBOVRAKUSUAR
(END) Dow Jones Newswires
April 28, 2021 02:00 ET (06:00 GMT)
Network (LSE:NETW)
Historical Stock Chart
From Apr 2024 to May 2024
Network (LSE:NETW)
Historical Stock Chart
From May 2023 to May 2024