Network International Holdings Plc, Q3 2021 trading

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Strong trading in the UAE combined with the launch of a wide range of new capabilities; remain confident in achieving full year expectations and longer-term growth aspirations

  • Revenue growth of 19% y/y; driven by spending recovery in the UAE
  • UAE and Jordan value of payments processed with merchant customers (directly acquired Total Processed Volumes, TPV) increased 22% y/y and recovered to 2019 levels by the end of the quarter
  • Launched several new capabilities for UAE merchants including new types of payment acceptance and low cost acceptance solutions
  • Record levels of new merchant signups during the quarter. Notable names include Hugo Boss (Al Futtaim UAE Trading LLC) and Mercedes (Gargash Enterprises); Madame Tussauds Dubai and Ain Dubai.
  • Acquiring ticketing partner for Dubai EXPO 2020 providing integrated POS solutions for ticketing retail and food and beverage outlets.
  • Mastercard partnership continues to deliver solutions through new agreement to enable state of the art authentication solutions for UAE merchants and financial institutions, using 3-D Secure 2.0. 
  • Kingdom of Saudi Arabia market entry on-track with a healthy pipeline of indicative commitments from potential customers

Nandan Mer, Chief Executive Officer, commented:

“We have set out our new strategy to accelerate, innovate and drive faster long-term growth. We are making progress already, giving the business strong foundations from which to deliver our medium-term target of 20%+ revenue growth.

I am pleased to see the strength of trading in our UAE merchant business. This is a reflection of our enhanced sales strategies, faster merchant onboarding and new capability launches; as well as improving underling market dynamics. Consumer spending in the region has also continued to improve, supported by the ongoing return of tourism and growing domestic consumer confidence.

Our market entry to Saudi Arabia is on-track. We have made significant progress in the build of our technology platform, a pipeline of customer commitments and expect to launch services in early 2022.

We also successfully completed the acquisition of DPO during the quarter. DPO continues to trade strongly as a standalone business; and we are excited to have already entered into cross-selling agreements for DPO’s online payments services to two of our existing bank customers.

Our efforts are laying the foundations for future growth and we remain confident in our outlook.”

New capability launches for UAE merchant customers

Network International continues to bolster its capabilities in its UAE direct-to-merchant business. The business remains a key strategic priority of the company. During the quarter, Network International delivered a number of innovative launches, with a healthy pipeline to come, some of which include:

  • New types of payment acceptance including Rupay (the Indian card scheme), MIR (the Russian card scheme) and upcoming mobile money wallets through partnership with TerraPay. Buy Now Pay Later (BNPL) will be launching in the coming weeks in partnership with Tabby, the first and largest BNPL provider in the Middle East.
  • “DPO Pay”, a cost effective and convenient online payment solution for SMEs, will launch soon. The solution includes the setup of an online store and payment checkout, along with mobile money wallet payment acceptance.
  • Low-cost payment acceptance through the new N-GeniusTM App, which allows merchants to enable card payment acceptance on their own android smartphone, with no need for a separate Point-Of-Sale (POS) terminal.
  • Faster merchant digital onboarding in 60 minutes.
  • Queue-busting payment solutions through partnership with Ezetap. Using a pocket-sized mobile card payment acceptance machine, which can scan products and accept payments both in-store or by delivery, without an integrated till system or need for customers to wait in-line.
  • Currently launching new data and spending analytics dashboards, which will provide merchants with value-added insights into consumer purchasing trends.

Record new business additions

The quarter saw continued momentum in Network International’s Merchant Solutions business line with record levels of new signings, particularly in the SME space. Notable point-of-sale merchant additions include Hugo Boss (Al Futtaim UAE Trading LLC) and Mercedes (Gargash Enterprises); whilst online signups were strong across the food and beverage, and entertainment sectors, including Madame Tussauds Dubai and Ain Dubai.

EXPO 2020 acquiring ticketing partner

Network International is the acquiring ticketing partner for EXPO 2020, providing integrated POS solutions for ticketing, retail and food and beverage outlets across the event; whilst online the business is supporting delivery of quick Click2Pay ticketing checkout.

Mastercard partnership delivering new solutions

In partnership with Mastercard, Network International will be launching the latest state of the art authentication solutions for merchants and financial institutions, using 3-D Secure 2.0.  Advanced authentication and fraud solutions are increasingly important to customers in an environment where more transactions are taking place online through phones, tablets and wearables. 3-DS 2.0 provides enhanced insights and fraud checking capabilities that can analyse ten times more data compared to 3-DS 1.0. It is also compatible with biometric and alternative authentication methods, which provides a smoother consumer experience and leads to high transaction approval rates.

Kingdom of Saudi Arabia market entry on-track

Network International’s Saudi Arabia market entry is progressing as planned, with a healthy pipeline of indicative commitments from potential customers. The company expects to launch Issuer processing payment services to financial institutions in Q1 2022, with its technology platform on track for deployment and testing, and with regulatory applications progressing.

Third quarter 2021 trading

 Q3 2021 growth compared with Q3 2020
Total revenue19%
  
Merchant Solutions revenue38%
   Direct Total Processed Volume (TPV)22%1
        Of which domestic TPV12%
        Of which international TPV171%
  
Issuer Solutions revenue9%
  

Trading results do not include DPO. 1. Growth data presented on a like-for-like basis, removing the impact of one additional day in the calendar month of February 2020

Network International delivered a healthy set of results in the third quarter of 2021, with total revenue increasing 19% compared to the same period last year, supported by a strong performance from its Merchant Solutions business, which delivered revenue growth of 38% in Q3 2021 compared to the same period last year. The value of payments processed (directly acquired total processed volume (TPV)) was up 22% for the same period.

Performance was particularly strong in the UAE and Jordan, where directly acquired TPV fully recovered to 2019 levels towards the end of the quarter. In September, directly acquired domestic TPV was 9% ahead of 2019, signalling a complete recovery in UAE domestic spending from the COVID-19 pandemic. International spending continues to improve, reflective of the recovery of international tourism into Dubai.

The company also reported strong growth in online direct TPV up 38% and 124% in Q3 2021 compared Q3 2020 and Q3 2019 respectively, demonstrating the continued growth and increasing importance of the Network International’s online Merchant Solutions business.

Issuer Solutions, which was less impacted by COVID-19, delivered healthy revenue growth of 9% in Q3 2021 compared to the same period last year.