Unifiedpost continues its strategic focus on growing core digital services alongside portfolio rationalisation

REGULATED INFORMATION

Unifiedpost continues its strategic focus on growing core digital services alongside portfolio rationalisation

La Hulpe, Belgium – August 27, 2024, 7:00 a.m. CET – [REGULATED INFORMATION] Unifiedpost Group SA (Euronext: UPG) (Unifiedpost), a leading provider of integrated business communications solutions, presents its results for H1 2024. Digital Services revenue reported solid growth of 12,8% y/y, excluding the divestments of 21 Grams, FitekIN and ONEA. This is reflected in Unifiedpost’s growing customer base, which exceeded 1,3 million businesses at the end of H1 2024.

Strategic & Operational Highlights

• On July 5, 2024, Unifiedpost signed an agreement to sell all shares of 21 Grams to PostNord Strålfors and formed a partnership. PostNord Strålfors will exclusively distribute Banqup in the Nordic countries for at least 5 years and use Unifiedpost’s e-invoicing connections. Therefore, this set of results is presented as a discontinued operation with H1 2023 also restated.
• On July 8, 2024, Unifiedpost successfully closed the divestment of the stand-alone products FitekIN and ONEA for a cash consideration of €7,2 million post balance sheet. This was used to accelerate the reimbursement of the subordinated loan of € 1,2 million and for working capital management.
• On August 26, 2024, Unifiedpost signed a binding term sheet with Your.World BV to sell its Wholesale Identity Access business in the Netherlands for an enterprise value of € 133,0 million including an earn-out of € 7,7 million. This agreement includes a partnership to distribute Unifiedpost’s Banqup platform to over one million Your.World customers across Europe.

H1 2024 Financial Highlights – Continuing operations¹

• Digital services revenue growth of 10,9% y/y.
• Excluding all divestments (21 Grams, FitekIN and ONEA), our digital services revenue growth amounts to 12,8% y/y
• Digital service gross margin improved by 2,1 % y/y to 67,0%
• Revenue in traditional communication services decreased by 11,1% y/y due to the conversion of services into digital and decreasing volume in management services
• Cash and cash equivalents at the end of H1 2024 amounted to € 18,7 million, of which € 7,4 million is restricted cash including € 6,2 million is to be considered as client money²
• Continued focus on free cash flow³ with a reset of expectations to account for realised and planned divestments in the year.  We are committed to achieve a free cash flow break-even position by the end of 2025.

Commenting on the H1 2024 results, Hans Leybaert, CEO and founder, remarked: “The company continues to focus on growing its core digital services and during the first half we reported solid growth, with further upside potential to be unlocked following the expected regulatory wave. We are pleased with the progress made on the divestment of 21 Grams whilst leveraging the partnership opportunity with PostNord to distribute our Banqup in the Nordic countries. With the completion of the FitekIN and ONEA stand-alone product divestment, we were able to accelerate the repayment of our outstanding loan. Furthermore, we recently announced the sale of our Wholesale Identity Access business in the Netherlands, which presents a unique opportunity to crystalise the value of the business and ensure that Unifiedpost will be in a stronger financial position moving forward. Amid these ongoing developments, we remain focused and committed to future-proofing the business and enhancing the board composition and overall corporate governance.”

Key financial figures – Continuing operations

Key business KPI’s

Aligning financial reporting with the business strategy model

Our business strategy revolves around 4 interconnected digital products: e-Identity, e-Invoice, e-Payment, and e-Reporting. These products are available through Unifiedpost’s secure, cloud-based Banqup platform. We target 3 key market segments: Corporate, SME, and Governmental. Our goal for each product line is to drive growth by upselling from single-product usage to a step-by-step comprehensive adoption of our entire digital product suite.

Our go-to-market strategy varies by market segment. For the Corporate segment, we prioritise direct sales, while for the SME segment, we focus on forging partnerships to boost sales through the SME channel. Expanding within the Government sector requires a tailored approach, necessitating a dedicated team with specialised expertise.

In addition to our digital offerings, our traditional communication services, though non-digital, remain valuable as they support and enhance our digital business model.

Our financial reporting and KPIs have been updated and integrated into our internal reporting tools to align with this strategic structure.

Significant divestments and investments were closed or successfully initiated in H1 2024

• FitekIN/ONEA

Following the binding term sheet dated December 29, 2023, Unifiedpost successfully closed the transaction on July 5, 2024. The entire transaction was sold for a cash consideration of € 7,2 million. This divestment is a strategic move for the Group, enabling a sharper focus on its core offerings. At closing, the carrying value of the related assets and liabilities amounts to € 4,6 million. The business associated with this transaction generates stable annual digital services revenue of € 3,5 million with a near break-even EBITDA. In the financial position, this transaction is presented as an asset held for sale but is still presented as continued business in the income statement.

• 21 Grams

On April 30, 2024, Unifiedpost announced exclusive negotiations with PostNord Strålfors regarding the sale of all shares in the 21 Grams subgroup, culminating in a binding agreement on July 5, 2024. The completion of this transaction is subject to three pre-closing conditions: (i) approval from the Swedish Competition Authority, (ii) release of pledges on shares and bank accounts, and (iii) obtaining a review report on the consolidated accounts of the subgroup as of December 31, 2023. The enterprise value is SEK 200 million, subject to adjustments for net financial debt and working capital at closing. This transaction is presented as an asset held for sale in the financial position and is classified as a discontinued operation effective from January 1, 2024, including comparative figures. The business associated with this transaction generated in 2023 an annual digital services revenue of € 28,5 million and an annual traditional communication services revenue of € 54,8 million, and contributed € 0,6 million to our EBITDA. This transaction’s fair value preliminary impact amounts to a negative of € 4,9 million.

• Balkan

On June 28, 2024, Unifiedpost divested its majority stake in the Balkan printing activities New Image doo, reducing its ownership to 22%, and decreased its shareholding in a real estate entity Sirius Star Ltd to 20%. Conversely, Unifiedpost increased its stake in the digital company Unifiedpost doo by 20% up to 95%, strengthening its position in the digital sector. These transactions, including the settlement of intergroup current accounts, were executed on a cash-neutral basis. The realised gain due to consolidation of these entities results in a positive impact in the financial result of € 1,3 million.

Opportunity for value crystallisation through the sale of the Wholesale Identity Access Business

On August 26, 2024, Unifiedpost announced that it had signed a binding term sheet with Your.World B.V to sell its Wholesale Identity Access business in the Netherlands, which forms part of Unifiedpost’s e-Identity product line, for an enterprise value of € 133,0 million including an earn-out amount of € 7,7 million. This agreement includes a partnership to distribute the Banqup platform in the Netherlands via Your.World.

Consistent growth in digital services business with future upside from regulatory wave to be unlocked

In the first half of 2024, Unifiedpost continued to achieve steady year-over-year growth in its digital services business, recording low-teens growth overall. Specifically, Unifiedpost realised a 9,1% y/y growth in its recurring activities and a 32,7% y/y growth in its non-recurring business, driven by successful project completions. Notably, this growth was achieved without the benefit of regulatory tailwinds, which signals strong potential for further acceleration in the near future.  In total the digital services business grew with 10,9%  and excluding the all the divestments the growth amounts even to 12,8% y/y.

The gross margin in the digital services segment increased by € 2,5 million year-over-year, driven by two key factors: (i) an improvement in efficiency which impacted the gross margin percentage, as it increased from 64,9% in H1 2023 to 67,0% in H1 2024 (a positive impact of € 0,6 million), and (ii) a rise in transaction volumes and subscription levels (impact € 1,9 million).

Traditional communication services business

The traditional communication services business has not met expectations, driven by a continued shift towards digital solutions and a decrease in managed service volumes. Year-over-year, revenue declined by € 2,5 million, leading to a corresponding reduction in gross profit of € 0,9 million. Additionally, the gross margin percentage decreased by 1% point to 25,5%.

Execution of cost-saving plan 2023-2024

Unifiedpost launched a cost-saving plan in H1 2023, with significant impacts observed in H2 2023 and H1 2024.

• R&D expenses slightly increased from € 9,2 million to € 9,5 million year-over-year. However, the cash component within these costs decreased by nearly € 1,0 million, while non-cash expenses (amortisation) rose by € 1,2 million. R&D Capex spending in H1 2024 totaled € 8,2 million, compared to € 9,0 million in H1 2023.  R&D staff costs (cash out Opex and Capex) represent 31,0 % of digital services revenue in H1 2024.
• G&A expenses decreased by € 1,3 million year-over-year to € 17,1 million. It is important to note that G&A expenses for H1 2024 included € 0,5 million in non-recurring costs directly associated with the aforementioned divestment transactions. The recurring G&A expenses represent 32,6% of total revenue level in H1 2024.
• S&M expenses decreased by € 1,7 million year-over-year to € 10,2 million. The recurring S&M expenses represent 20,1% of total revenue level in H1 2024.

The recent divestments will allow us to take further efficiency measures and align the cost structure with the size of the business.

Liquidity position normalised with cash inflow from divestment

At the end of H1 2024, Unifiedpost Group reported a financial position with cash and cash equivalents totaling € 18,7 million, including € 6,2 million of client money and € 1,2 million of restricted cash. This cash position was further strengthened on July 5, 2024 following the completion of the FitekIN/ONEA transaction, which generated additional cash proceeds of € 7,2 million. Of this amount, € 1,2 million was immediately used to accelerate the repayment of a subordinated loan to SFPIM.  While working capital was under pressure compared to December 31, 2023, it has since then normalized following the post-balance sheet cash inflow from the FitekIN/ONEA transaction.

Additionally, the Group maintains € 16,1 million in an undrawn invoice financing facility, which is based on experience, only callable at 30% of the current usage level.

Recent divestments, substantially improving the balance sheet, require a reset of expectations regarding the free cash flow breakeven position for 2024. Management remains committed to achieving this goal by the end of 2025.  The incoming cash proceeds from the divestments provide a sufficient cash buffer, enabling Unifiedpost to navigate this extended period while positioning us to capitalise on the global digital transformation wave in the coming years.

Current organic customer growth ensures our future model

Unifiedpost’s strong focus on customer onboarding continues to yield attractive results. By the end of Q2 2024, our customer base exceeded 1,3 million, reflecting a 7,5% growth since the end of 2023. In Q1 and Q2 2024, we onboarded 15 thousand in each quarter. Our paid customer segment has grown to 500 thousand, while third-party financed customers have reached 775 thousand, and other customers now total 52 thousand.

Our business network—which includes our own customers and other companies we can reach digitally—now encompasses over 2,6 million companies, up from 2,4 million at the close of 2023. This expansion solidifies our leadership in the e-Invoice and e-Payment segments, particularly among Europe’s SMEs.

Our core SME platforms, including Banqup, Billtobox, and jefacture.com, have also demonstrated continuous growth, with a combined customer base reaching 174 thousand by Q2 2024. In H1 2024, we onboarded 12 thousand new subscriptions across these platforms. Key markets like Belgium and France have shown positive momentum as well. Banqup’s Belgian customer base (via Billtobox) increased to 30 thousand, while in France, early adopters of jefacture.com reached 19 thousand by the end of Q2 2024.

The ARPU on subscription revenue dropped slightly in Q1 2024 to € 5,6/month due to a changing product mix, whereby new e-Identity onboardings were registered at the start of the year. In Q2 2024, the ARPU on subscription revenue improved to € 5,8/month.

Collection of ‘client money’ is becoming an active source of revenue

Unifiedpost Payments SA is certified as a payment institute. As announced on August 7, 2024, Unifiedpost Payments obtained certification from the National Bank of Belgium to purchase receivables. This certification takes immediate effect and can be passported into the EU. Out of our current customer base, especially on contracted business in the Netherlands, Unifiedpost is collecting additional funds as client money.  These funds generate net interest revenues which are currently presented as financial result. The level of client money in our financial position is thus increasing and amounts to € 6,2 million at end of H1 2024.

These achievements will further strengthen and grow our e-payment business.

Reiterating guidance

• Digital services revenue growth 2024: low teens
• Search for additional Board members to strengthen the Board and align it with evolving good corporate governance standards
• Subject to successful closing of all announced divestments, attaining FCF breakeven by the end of 2025

Investors & Media webcast

Management will host a live video webcast for analysts, investors and media today at 11:00 a.m. CET.

To register and attend the webcast, please click here:

https://unifiedpost-group-hy24-financial-results-august-2025.open-exchange.net/

A full replay will be available after the webcast at: https://investors.unifiedpostgroup.com/

Financial Calendar:

• 14 November 2024: Publication Q3 2024 Business Update
• 13 March 2025: Publication FY 2024 Financial Results
• 18 April 2025: Publication of the annual report for 2024
• 15 May 2025: Publication of the Q1 2025 business update
• 20 May 2025: General Shareholder Meeting

Contact

Alex Nicoll
Investor Relations
Unifiedpost Group
alex.nicoll@unifiedpost.com

Interim consolidated statement of profit or loss and other comprehensive income (unaudited)

(*) The comparative figures for six-month period ended 30 June 2023 have been restated to reflect the restatement of the profit and loss related to the discontinued operations in accordance with IFRS 5 as explained in note 5.4 and 5.7, and to demonstrate the new reporting structure as explained in note 5.4

Interim consolidated statement of financial position (unaudited)

Interim consolidated statement of changes in equity (unaudited)

Interim consolidated statement of cash flows (unaudited)

About Unifiedpost Group

Unifiedpost is a leading cloud-based platform for SME business services built on “Documents”, “Identity” and “Payments”. Unifiedpost operates and develops a 100% cloud-based platform for administrative and financial services that allows real-time and seamless connections between Unifiedpost’s customers, their suppliers, their customers, and other parties along the financial value chain. With its one-stop-shop solutions, Unifiedpost’s mission is to make administrative and financial processes simple and smart for its customers. For more information about Unifiedpost Group and its offerings, please visit our website: Unifiedpost Group | Global leaders in digital solutions

Noteworthy facts and figures:

• Established in 2001, with a proven track record
• 2023 group revenue €191 million 
• 1.200+ employees 
• Offices in 33 countries
• Diverse portfolio of clients across a wide variety of industries (banking, leasing, utilities, media, telecommunications, travel, social security service providers, public organisations, etc.) ranging from large internationals to SMEs
• Unifiedpost Payments, a fully owned subsidiary, is recognised as a payment institution by the National Bank of Belgium
• Certified Swift partner
• International M&A track record
• Listed on the regulated market of Euronext Brussels, symbol: UPG

Cautionary note regarding forward-looking statements: The statements contained herein may include prospects, statements of future expectations, opinions, and other forward-looking statements in relation to the expected future performance of Unifiedpost Group and the markets in which it is active. Such forward-looking statements are based on management’s current views and assumptions regarding future events. By nature, they involve known and unknown risks, uncertainties, and other factors that appear justified at the time at which they are made but may not turn out to be accurate. Actual results, performance or events may, therefore, differ materially from those expressed or implied in such forward-looking statements. Except as required by applicable law, Unifiedpost Group does not undertake any obligation to update, clarify or correct any forward-looking statements contained in this press release in light of new information, future events or otherwise and disclaims any liability in respect hereto. The reader is cautioned not to place undue reliance on forward-looking statements.

¹ Excluding discontinued operations related to the 21 Grams business

² Money a company receives from or holds for, or on behalf of, a client (application IAS 7).

³   Free cash flow is defined as net income (i) plus non-cash items in the income statement, (ii) minus cash out for IFRS 16 adjustments, (iii) minus capital expenditure, (iv) minus reimbursement on loans and leasing for the reporting period

Attachment

• Press release H1 2024