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How Network International’s FY21 revenue ahead of market expectations continued strong growth

Q4 revenue [1] up 30% y/y driven by spending recovery in the UAE; Continued strong growth at newly acquired DPO group in Africa, with Q4 2021 TPV growth of 40% y/y; and revenue growth of 29% y/y; FY21 revenue ahead of market expectations; group underlying EBITDA also anticipated to be slightly ahead of market expectations; the Strongest quarter of the year for the value of both domestic and international consumer payments processed (Total Processed Volumes2 (TPV)), now above pre-pandemic levels driven by seasonal activities, major sporting events, and Dubai EXPO 2020; Kingdom of Saudi Arabia market entry on track with a new customer signed, a healthy pipeline and appointment of Managing Director for Saudi Arabia operations

Nandan Mer, Chief Executive Officer, commented:

“There is much to feel positive about, having ended the year strongly. We have made excellent progress on successfully refocusing our strategy to drive accelerated growth and innovation.

The UAE market has seen a significant rebound in consumer spending and international tourism, and it is encouraging to see our merchant business going from strength to strength. This has been supported by record levels of merchant signups, reflecting our continued efforts to enhance our sales strategies, improve merchant on-boarding and continually bring new services to customers.

DPO continues to trade strongly, with their revenue performance for the year representing an acquisition revenue multiple of less than 11x. They have also moved into positive EBITDA generation, ahead of our expectations.

Our market entry to Saudi Arabia is on-track and we have signed a new processing customer that is expected to become a key contributor to long term revenues.

Overall, we are pleased with the positive momentum across our business, giving us confidence as we enter 2022 and work towards our target of 20%+ revenue growth.”

DPO is trading well and delivering strong growth

The acquisition of DPO Group continues to deliver with Total Processed Volume in Q4 2021 increasing 40% year-on-year and revenue growing 29% over the same period. On a full-year basis, this translates to revenue growth of 45% year-on-year.

Mastercard partnership continues to strengthen

Network’s strategic partnership with Mastercard continues to progress, with significant strides being made to accelerate the acceptance of digital payments across the Middle East and Africa. The Company will soon be launching its new ‘SME in a box’ offering, allowing new merchants and SMEs to accept digital payments using a mobile phone, without the need for a payment terminal.

The partnership will also enable the launch of a next-generation authentication solution for UAE merchants and financial institutions, through 3-D Secure 2.0. The service provides enhanced insights and fraud-checking capabilities through data for processing customers.

Record number of new merchant wins and several contract renewals

Our Merchant Solutions business continues to see high levels of new business wins, including record levels of merchant signings in the quarter. Within the new merchant additions, notable wins away from competitors include several hotels such as DoubleTree Hilton, Yas Residences and Courtyard by Marriot Al Jaddaf. Merchant wins across the entertainment, and food and beverage sectors remained high. In our data solutions business, we signed an expanded and extended contract with a major UAE tourist authority, as well as a new agreement with a significant UAE government authority. We also secured a new e-commerce contract, cross-selling DPO’s capabilities into three West and Central African countries through our partnership with Orabank, which will allow us to grow our merchant footprint across the Cote D’Ivoire, Senegal and the Togolese Republic.

In Issuer Solutions, we continue to gain traction and secured three new financial institutions and fintech in the period. This includes two in the Levant region; NeoBank, and Jordan’s first licensed fintech MadfooatCom; where we will issue, host and process credentials alongside a range of other services including 3-D Secure for both financial institutions. We also renewed our existing processing agreement with Société General in Ghana for a further five years, extended our partnership with the Bank of Egypt and renewed our contract with the National Bank of Fujairah in the UAE.

New services and solutions for financial institution customers

The network recently supported the launch of the first-ever digital card offering in the UAE for Al Maryah Community Bank, providing their customers with both digital and physical cards.

Through its partnership with Infobip, Network will soon be launching its Chat banking solutions for financial institution customers.

New capability launches for merchant customers

The network continues to innovate and strengthen its direct-to-merchant business to extend its market-leading positions in the UAE and Jordan. During the quarter the company added the ability for merchants to accept payments from India’s UPI Payments and partnered with Amazon Payment Services to provide UAE merchants with a wider selection of online acceptance methods for their e-commerce offering.

The network extended its existing value-added services launching Smartview interactive dashboards that provide valuable insights to merchants on consumer spending trends.

The company also continues to leverage synergies from the recent acquisition of DPO and is launching ‘DPO Pay’ to merchants in the UAE, a cost-effective and convenient online payment solution for SMEs. The offering includes the setup of an online store and payment checkout.

Kingdom of Saudi Arabia market entry on-track and new customer signed

A network secured a new Issuer Solutions prepaid card processing client win, which is expected to become a meaningful revenue contributor over the long term; with a healthy pipeline of potential future customers. The testing of its technology platform is progressing well and the company remains optimistic and committed to launching its full Issuer processing services in Q1 2022.  The company appointed Abdulaziz Al-Dahmash as Managing Director for its operations in Saudi Arabia, effective 1st January 2022.

Fourth quarter trading [1]

Q4 2021 growth compared with Q4 2020Q4 2021 growth compared with Q4 2019

Total revenue

30% [3]6%

  

Merchant Solutions revenue

58%8%

   Direct Total Processed Volume (TPV)2

36%12%

        Of which domestic TPV

18%14%

        Of which international TPV

168%5%

 

Issuer Solutions revenue

13%(2)%
   

The network delivered a strong set of results during the fourth quarter of 2021 with total revenue increasing 30% compared to the same period last year, and rising 6% compared to pre-pandemic levels in 2019. This was primarily driven by the robust performance of its Merchant Solutions business where revenues grew 58% in Q4 2021 compared to the same period last year, and was 8% ahead of pre-pandemic levels in 2019, supported by a strong recovery in domestic and international consumer spending in the UAE and Jordan.

Consequently, Q4 2021 marked the strongest quarter of the year for Direct Total Processed Volume (TPV) [2] which was up 36% year-on-year, representing a 12% increase compared to pre-pandemic levels. The growth in domestic consumer TPV was up 18% year on year and 14% above pre-pandemic levels and international spending also continued to improve, finishing the year very strongly with December spend up 12% compared with pre-pandemic levels. For Q4 2021, international TPV more than doubled year-on-year. The strong overall Q4 TPV performance is reflective of regional economic recovery from the pandemic, improving travel confidence from international tourists coming to Dubai, and seasonal activities including major sporting events and the Dubai EXPO.

Issuer Solutions, which was less impacted by COVID-19, delivered healthy revenue growth of 13% in Q4 2021 compared to the same period last year.

We have made excellent progress on successfully refocusing our strategy to drive accelerated growth and innovation


[1] Q4 financials detailed represent the Network International standalone business and do not include the DPO Group acquisition, unless otherwise stated.

[2] Refers to the direct Total Processed Volume from merchant customers in the UAE and Jordan

[3] Including the three month contribution from DPO, y/y growth is 39%.

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