AUSTRIACARD — FY24 net income growth of 20%

AUSTRIACARD (ASE: ACAG)

Last close As at 04/04/2025

EUR5.69

−0.16 (−2.74%)

Market capitalisation

EUR207m

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Research: TMT

AUSTRIACARD — FY24 net income growth of 20%

AUSTRIACARD’s FY24 adjusted revenue and EBITDA met guidance, although slightly below our forecasts. Document lifecycle management and digital transformation technologies were the key drivers of revenue growth (up 20% and 70%, respectively). While identity and payments revenues were flat, underlying growth adjusting for discontinued chip module sales was 10%. With growth drivers in place, we expect continued revenue and profit growth in FY25 and FY26, albeit at a slightly moderated rate.

Katherine Thompson

Written by

Katherine Thompson

Director

Software and comp services

FY24 results

7 April 2025

Price €5.69
Market cap €213m

Net cash/(debt) at end FY24

€(95.6)m

Shares in issue

36.4m
Free float 25.1%
Code ACAG
Primary exchange VSX
Secondary exchange ATHENS
Price Performance
% 1m 3m 12m
Abs (2.3) (0.8) (3.4)
52-week high/low €6.6 €5.2

Business description

AUSTRIACARD is a Vienna-headquartered group of companies with a portfolio of services in secure chip and payment solutions, document lifecycle management, and digital transformation technologies for the financial, government and wider private sectors.

Next events

Q125 results

15 May 2025

Analyst

Katherine Thompson
+44 (0)20 3077 5700

AUSTRIACARD is a research client of Edison Investment Research Limited

Note: Revenue is reported, after hyperinflation adjustment. PBT and EPS (diluted) are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Year end Revenue (€m) PBT (€m) EPS (€) DPS (€) P/E (x) Yield (%)
12/23 364.6 29.8 0.61 0.10 9.3 1.8
12/24e 392.3 32.8 0.62 0.11 9.2 1.9
12/25e 421.1 37.8 0.75 0.14 7.6 2.5
12/26e 451.2 43.2 0.86 0.17 6.6 2.9

FY24 results in line with guidance

AUSTRIACARD reported adjusted revenue growth of 9.7% (guidance: c 10%), adjusted EBITDA growth of 11.4% (guidance 10–12%) and net income growth of 20%. Drivers of growth included strong sales of metal cards, a new secure printing contract in Africa and an increasing number of digitisation projects in the financial services and public sectors. Net debt was essentially flat, but gearing reduced to 1.7x from 1.9x at the end of FY23. The company expects revenue growth in FY25 with profit margins at least in line with FY24. We have revised our forecasts to reflect slightly lower than expected revenue in FY24, resulting in reductions to our FY25 and FY26 revenue, adjusted EBITDA and EPS forecasts.

Growth drivers in place

The group continues to target revenue growth through a combination of geographic expansion (target markets: UK, France, Middle East/Africa (MEA)), market share expansion, and product and services portfolio enhancements. Internal R&D combined with selective M&A has added AI functionality across the digital technologies portfolio, including the launch of the GaiaB agentic AI platform earlier this year. The recent secure printing win in Africa could mark the beginning of more contracts with higher recurring revenue potential and forthcoming elections in Africa provide further new contract opportunities.

Valuation: Sustained growth to reduce the discount

With a limited number of listed peers for the smart card business and a growing exposure to digital transformation software and services, peer multiple valuation analysis is of limited relevance. On a discounted cash flow basis, using a WACC of 10%, a terminal growth rate of 2%, our forecasts to FY26, conservative revenue growth of 3% for FY27–33 and flat EBITDA margins from FY27, we arrive at a value of €8.56/share (down from €9.74/share), 50% above the current share price. In our view, factors that could reduce this gap include further adoption of digital services outside the Greek public sector, market share gains in the US and other focus payment card markets, faster reduction of net debt, customer wins for card-as-a-service and a further increase in the free float.

Review of FY24 results

In Exhibit 1, we summarise AUSTRIACARD’s FY24 reported financial performance compared to FY23 and our forecasts. In Exhibit 2, we show underlying business performance before IAS 29 hyperinflation adjustments. Based on underlying performance, revenue grew 9.7% y-o-y to €385.3m, below our €391.2m forecast and in line with management guidance of c 10%. Gross profit of €93.8m (24.8% margin) was 3.4% below our €97.1m forecast. Adjusted EBITDA of €54.9m grew 11.4% y-o-y (management guidance 10–12%) and was 0.7% below our €55.3m forecast. The adjusted EBITDA margin expanded by 0.1pp to 14.1% and the adjusted EBIT margin by 0.5pp to 9.9%.

The company closed the year with a net debt position of €95.6m, 2.4% lower than our forecast. While the company generated operating cash flow of €34.0m, it paid out €4.1m in dividends, €7.2m for net interest, €1.7m for acquisitions, €13.7m for capex, €2.1m for share buybacks and made net debt repayments of €7.5m.

Working capital increased to 18.5% of revenue from 16.6% in FY23, due to the build-up of inventory that was ordered during the period of supply chain disruption around COVID. The company has initiated renegotiations with suppliers, is re-phasing and postponing deliveries and, where possible, terminating contracts, and expects a positive impact on inventories in FY25 and FY26.

The company announced a dividend of €0.11, equating to a payout ratio of 22.5% of net profit (company target range 20–25%).

Performance by solution category

In Exhibit 3, we summarise revenue by solution type. Identity chip and payment solutions revenue was flat year-on-year. While metal cards contributed incremental revenue of €20.8m, the previously discussed decision to stop selling chips wholesale contributed to a revenue decline of €19.9m. Document lifecycle management grew 20.4% y-o-y, mainly due to a new contract in Africa for security document solutions that contributed revenue of €18.7m. Digital transformation technologies continued to grow, up 70.2% y-o-y, mainly due to the continued implementation of EU-funded public administration digitalisation projects in Greece.

The exhibit below demonstrates some of the projects that AUSTRIACARD has undertaken in FY24.

Performance by division

The company has organised its business into three geographical segments. We discuss performance by segment, as per Exhibit 5. All discussion is at the underlying level, prior to adjustments for hyperinflation.

  • Western Europe, Nordics, Americas: this segment generated revenue of €130.9m in FY24, up 12.8% y-o-y. The supply of metal cards to fintechs and challenger banks was the key driver of growth. Excluding the impact of the discontinuation of wholesale chip module sales (€18.1m in FY23), like-for-like revenue grew 33.7% y-o-y. Adjusted EBITDA grew 15% y-o-y, expanding the margin by 0.3pp to 15.7%.
  • Central Eastern Europe/DACH: this segment generated revenue of €224.9m, flat year-on-year. Digital transformation revenues contributed €11.3m in FY24, offsetting the impact of the discontinuation of wholesale chip module sales. Adjusted EBITDA declined by 2%, reducing the margin by 0.3pp to 13.2%.
  • Turkey/Middle East/Africa: this segment generated revenue of €72.1m, up 34.4% y-o-y. The company won a contract in Africa to supply a security documents solution for exam papers. This contributed revenue of €18.7m and is potentially recurring in nature. Adjusted EBITDA increased 68% y-o-y with the margin expanding 2.3pp to 11.5%.

Outlook and changes to forecasts

Management did not give any quantitative guidance for FY25, as it plans to do so later in the year, but expects revenue growth and EBITDA margins at least at the level of FY24. Areas that support continued growth include the potential for election ballot printing in Africa (c 15 elections are timetabled for 2025), several contracts in the identity and payments sector (particularly for citizen ID) that are close to being signed and continued growth in digitalisation projects in Greece.

We have revised our forecasts to reflect the FY24 results, moderating our revenue and EBITDA estimates for FY25 and FY26. This results in a reduction in our EPS forecasts and, maintaining the same payout ratio as in FY24, we trim our dividend forecasts.

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This report has been commissioned by AUSTRIACARD and prepared and issued by Edison, in consideration of a fee payable by AUSTRIACARD. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

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