FINANCIAL COMMUNICATION 2020 HALF YEAR RESULTS · Les choix technologiques pris doivent permettre...
Transcript of FINANCIAL COMMUNICATION 2020 HALF YEAR RESULTS · Les choix technologiques pris doivent permettre...
2020 HALF YEAR RESULTS
Casablanca– 22 September 2020
FINANCIAL COMMUNICATION
1
Contents
S1 2020 Highlights & Context
Operational & financial business review
Prospects
S1 2020 HIGHLIGHTS& CONTEXT
CEO
Abdeslam Alaoui
3
World Economic Outlook
UPDATE TO THE WORLD ECONOMIC OUTLOOK, JUNE 2020
PROJECTIONS FOR GROWTH
GLOBAL
ECONOMY
ADVANCED
ECONOMIESEMERGING AND
DEVELOPING ECONOMIES
INTERNATIONAL MONETARY FUND
4
Response by HPS to COVID-19
Staff protection Client support Strengthened resilience
Technology
• Workplace health and safety measures and guidelines
• Implementation of remote work across all of our offices
• Travel restriction policy
• Medical and psychological support
• Regular communication in several channels
• Strengthened project and support follow up offered to our clients through more frequent committees (internal and external)
• Regular communication with our clients regarding the Covid19 situation
• Assessment of different scenarios to test the financial resilience of the group
• Increased frequency of financial forecasts
• Intensification of Cash flow management
• Generalised work from home assisted by activating our BCP
• Collaborative software tools readiness : Office 365, Salesforce, etc.
• Security awareness
Crisis management committee
5
• Strong upswing in Processing activity
• Stable growth in Solutions activity
• Services activity limited to remote projects due to the emergency health crisis measures in France
Operating revenue
361.6 M MAD
+3.4%
• Growing contribution of the Processing activity
• Strong growth in recurring revenue
Operating income
61.6M MAD
+9.4%
• Controlled financial result
• Increase in equity affiliates results
Net result
49.5M MAD
+22.8%
• Optimized working capital management
• Achieved billing milestones of large-scale projects
Treasury
224M MAD
+ 162%
S1 2020 in short
• Positive impact of variable cost strategy adopted by HPS
• Better use of available resources at ongoing project level
Operating margin
17.0%vs.
+16.1%
6
The payment market in the world
CAGR
(2017–22F)
Growth
(2017–18F)
Global 14.0% 11.2%
MEA 21.6% 17.9%
Latin America 6.0% 5.5%
Emerging Asia 29.7% 28.6%
MatureAsia-Pacific
10.2% 10.2%
Europe (Including Eurozone)
8.5% 6.3%
North America 4.7% 4.7%
7.1%
Developing
23.5%
MatureNo
n-c
ash
tra
nsa
ctio
ns
(bill
ion
s)
1.200
900
600
300
02,017 2019F 2020F 2021F 2022F
176.3 192.8 201.8
156.3 185.9203.6
161.1
269.5
352.8
67.681.7
90.2
48.4
54.3
111.257.7
139.3
160.6
133.8
96.2
55.6
43.149.3
538.6
168.2
144.2
123.7
61.3
45.5
604.7
684.1
184.5
170.4
208.7
74.2
51.190.2
779.2
895.5
1,045.5
2018F
61.9
74.4
Source: Capgimini payment report 2020
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1st half 2020, pursuing the movement towards meeting our strategic goals
Achievements in 1st half 2020
Ambitions Solutions Processing Services
Regional diversification
Business Diversification
Recurring revenue
Operational excellence
OPERATIONAL & FINANCIALREVIEW
DG Corporate
Brahim Berrada
9
S1 2020 result highlights
Group business maintained and strengthened recurring revenues
Pursued development
Improved operating margin
Strengthened liquidity position
Net income making strong progress
10
19,2%
25,2%
22,8%
5,5%
7,7%
3,7%
72,7%
15,9%
11,4%
S1 highlights by activity
Business continuity ensured by the deployment of projects and support to our customers
Strong increase in recurring revenue due to the entry of new maintenance clients and the growth in Upselling
Slight impact on project deployment due to clients that did not have the capacity to work remotely
Constraints of the health emergency limiting activity on projects managed remotely
Deployment of teams on projects from the Solutions activity
Impact of COVID-19 on Switching activity due to the lockdown in Morocco
Growth in payment activity because of the deployment of the SG project in Africa and the signing of new contracts
+0.3%Solutions
+17.0%Processing
-5.9%Services
Projects
Upselling
Maintenance
Licence
Switching
Payment
11
Solutions Activity
Contribution to overall incomeStrategic directions
Anchor our presence by targeting “Tier 3” banks and ISOs in the United States
Offer our solutions to major European processors and middle-ranking banks in Europe
Develop a presence through partnerships in Southeast Asia and Latin America
Develop E-Wallet solutions and solutions for various players (telecom, retail, etc.)
Business trends in M MAD Highlights
Completion of ABSA Project with all the affiliates migrated on PowerCARD platform (8 countries, including 6 in 2020)
Implementation of version 3.5 within several important clients (SIA, ABSA,Tier1 client in Europe, etc.)
Instant payment with QR Code implemented within GhIPPS in Ghana
Completion of preliminary studies with big prospects
Strong Upselling activity mainly around contactless payment and mobilepayment solutions
Increase in maintenance revenue
240.9 M MAD +0.3% vs. S1 2019
72.7%
241240
197
147
S1 2017 S1 2018 S1 2019 S1 2020
TCAM: 18%
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Solutions Activity
Asia
32.2%2019
Americas
4.8%2019
Europe
31.3%2019
Africa
31.7%2019
ProjectsUpselling Maintenance Licence
34.6%26.4% 31.4% 7.8%
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Processing activity
Organic growth in the activity and by acquisition in Africa and the Middle East
Diversification of the offer 37.4 M MAD +17.0% vs. S1 2019
Contribution to overall incomeStrategic directions
Business trends in M MADHighlights
Payment
Deployment of the Société Générale project in line with the objectives
Loomis contract: management of the ATM server in France and in Belgium
Mansa Bank operational on the HPS platform
Implementation of connections to international networks finalised
Switching
Signing of several contracts for Switch Mobile in Morocco: BCP, CMI, CFG Bank, DIGIGI, Lana Cash, BMCE Cash
11.4%
24
30 32
37
S1 2017 S1 2018 S1 2019 S1 2020
TCAM: 16%
14
Switching Activity S1 2020
-0.87%
-11.5%
Change in interoperable operations processed by HPS
Switch vs. S1 2019
Month 2017 2,018 2,019 2,020
January 7,023,914 7,835,032 10,647,483 11,874,580
February 6,356,747 7,025,791 8,919,999 11,287,035
March 7,205,265 8,661,189 10,321,082 10,333,872
April 7,268,281 8,358,851 10,023,688 6,728,546
May 7,612,415 8,383,889 9,930,419 7,505,658
June 7,181,004 8,623,563 10,636,655 9,762,198
42,647,626 48,888,315 60,479,326 57,491,889
Authorisation & Transaction Request
2017 2,018 2,019 2,020
January February March April May June
+15.7%
in Q1
+6%
in Q1
15
Switching Mobile Activity S1 2020
Status in production
AAB BCP CAM W-CASH SGMA CIH BMCE M2T CMI NAPS ORANGE INWI IAM MSF ATW FPAY B-CASH CFG
Status in production
Cash DIGIFILANACASH
BMCECASH
CDMSOGE-
PAIMENT
Production – Changes to authorisations per month
The total number of authorisations is: 12,600
Oct. 18
Nov. 18
Dec. 18
Jan. 19
Feb. 19
Mar. 19
Apr. 19
May 19
June 19
July 19
Aug. 19
Sept. 19
Oct. 19
Nov. 19
Dec. 19
Jan. 20
Feb. 20
Mar 20
Apr. 20
May 20
June 20
69 87 24115
64153 139 125
255
456
270 314402
339371
550
405
304
1,2251,150
1,641
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Services Activity
52.3 M MAD -5.9% vs. S1 2019
15.9%
Impact of the lockdown measures on project deployment
Implementation of a continuity plan for the management of projects that could be conducted remotely
Deployment of Services teams on projects from other activities
Pursuit of the sales effort remotely
Contribution to overall incomeStrategic directions
Business trends in M MAD Highlights
Diversification of activity towards high added value services
Diversification in French territory and establishment of regional agencies
53
61
56
52
S1 2017 S1 2018 S1 2019 S1 2020
17
Diversification of the offer & strengthening of recurring revenues
Solutions
Deployment of important projects
Growth in Upselling with existing clients
Several clients entered into maintenance, generating strong growth in maintenance revenue
Processing
Deployment of the projects in progress
Low growth in transactions at national level during the lockdown period
Services
Limitation on achieving projects conducted remotely due to the health crisis emergency measures in France
349.5 +0.6 -3.3361.6
+5.4
Operating revenue S1 2019
Solutions Activity
Services Activity
Processing Activity
Other Operating revenue S1 2020
184.8(52%)
207.6(58%)
Recurring revenueIn M MADIn % of operating revenues
In M MAD
+9.3
18
Geographic footprint and regional diversification
Americas
11.5 M MADS1-2020
-11.1% vs. S1-2019
Europe
126.9 M MADS1-2020
+30.9% vs. S1-2019
Asia
76.8 M MADS1-2020
+11.8% vs. S1-2019
Africa
113.1 M MADS1-2020
-21,7% vs. S1-2019
Americas
3.5%
Europe
38.7%
Africa
34.4%
Asia
23.4%
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Operational excellence
Staff expenses
Increase in total payroll due to change in the workforce combined with an increase in salaries in S2-2019
External expenses
Decrease in sales travel expenses and expenses related to events (fairs & exhibitions)
Increase in rental expenses relating to the installation of new premises
Consumables purchased
Alignment of the subcontracting with the pace of business
Operating allowances
Depreciation relating to existing investments
* Variation compared to S1 2019** Share in operating income
361.6
-158.4+6,1%*
(43,8%)** -56.3-15.3%*
(15.6%)** -46.0+5.5%*
(12.7%)**
-7.3
61.4+9.1%*
(17.1%)**
Operating revenue S1
2020
Staff expenses
External expenses
Consumables purchased
Operating allowances
Other operating
exp.
Miscellaneous Operating income S1
2020
In M MAD
-16.2-9.3%*(4.5%)**
-15.8+61.7%*(4.4%)**
20
R&D in 2020 and beyond... 48.6 M MAD
Strengthening of R&D efforts
+17.4%vs. S1 2019
Note de Synthèse Budget 2020 34
Re f ce e de E i e QA
Le budget 2020 prévoit le renforcement de l équipe QA afin de poursuivre les efforts commencés en 2018 pour déployer les best practices du test dans tous les départements Produit et Projet avec comme objectif une automatisation totale des tests
Il est à noter que depuis la mise en place de l équipe QA courant l année 2018 :
Le déploiement a été fait dans les équipes Produit chaque produit dispose d un premier niveau de référentiel de tests et d automatisation des tests).
L intégration dans la 3.5 de l automatisation des tests unitaires et des tests fonctionnels pour les écrans.
La prise en compte de cette logique dans le cadre de nouveaux grand projets (ABSA, SG, SIA ).
Le déploiement auprès de toutes les équipes Projet et la consolidation des bancs de test Produit.
PowerCARD V4
L année a connu le lancement des travaux autour de la V4 de PowerCARD qui a été présentée lors du PowerCARD Users Meeting 2019.
Les principes de la V4 sont :
Architecture micro-services permettant : o D avoir une scalabilité infinie o De bénéficier des possibilités du cloud pour variabiliser simplement les coûts d infrastructure
notamment dans la gestion des pics. o Rendre tous les traitements de PowerCARD y compris arrêtés de comptes en temps réel
pour répondre aux enjeux des nouveaux moyens de paiements instantanés.
Les choix technologiques pris doivent permettre de récupérer la couche écran de la 3.5 pour mutualiser l investissement réalisé sur cette partie.
Suppression de la dépendance à Oracle (remplacement du Pl/SQL par les langages de développement actuels Javas scala .
Strategic directions for PowerCARD
Have “infinite” scalability.
Take advantage of cloud possibilities to vary the infrastructure costs, especially in peak management.
Ensure all PowerCARD processing is real-time to meet the challenges of new instant payment methods.
Remove dependency on Oracle
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PowerCARD Roadmap
20232020 2021 2022 2024
PowerCARD v4
PowerCARD v3.X
PowerCARD v2
End of life
48.6 M MAD
Strengthening of R&D efforts
+17.4%vs. S1 2019
22
Backlog in S1 2020
Backlog of more than 473 MDH, representing more than 132% of total income in the first semester and 66% of overall revenue realised in 2019
Fulfilment and delivery of several large-scale projects.
Growth in the share of Processing revenues in the backlog due to the commercial success of 2019 (Middle East and Europe).
Projects
Upselling
Maintenance (1 year)
Click Fees (1 year)
Run Payment (1 year)
Projects
Switching (1 year)
11.7%
21%Processing
79%Solutions
7.8%
1.6%
14.7%
23.3%
37.5%
3.4%
23
-14
+16+135
Treasury flow
85
224
Treasurystart 2020
Activities Investments Financing TreasuryJune 2020
In M MAD
24
Operational Performance
PCI-DSS Certification
BCP Implementation
BCP triggered at all sites in March 2020
No activity interruption
Maintained client activity with no disruption
PROSPECTS
26
S2 2020 Prospects
The Group benefits from a unique position given
the diversity and resilience of its portfolio.
While managing the disruptions linked to the
Covid-19 force majeure situation, HPS plans in
2020:
Resilience of Group activity limiting the impacts related to the Covid-19 crisis
To continue improving the operating margin
To pursue growth and diversification through external growth
To strengthen R&D efforts
27
Conclusion
Business resilience
Solid operational performance
Continuation of the initiatives in our strategic plan
ANNEXES
29
Scope of Consolidation
100% 100% 100% 100% 100%
HPS Switch ACPQualife HPS Europe HPS Dubai HPS Singapore
ACPQ Switzerland
Subsidiaries
HPS S.A.
Corporate Financial
Statements
JV
GPS ICPS
Consolidated Accounts
30% 20%
Comptes Sociaux
HPS S.A.
HPS SingapourHPS Switch ACPQualife HPS Europe HPS Dubaï
GPS ICPSFiliales
JV
10
0%
10
0%
10
0%
10
0%
10
0%
25
%
20
%
Comptes Consolidés
ACPQ Suisse
10
0%
Comptes Sociaux
HPS S.A.
HPS SingapourHPS Switch ACPQualife HPS Europe HPS Dubaï
GPS ICPSFiliales
JV
10
0%
10
0%
10
0%
10
0%
10
0%
25
%
20
%
Comptes Consolidés
ACPQ Suisse
10
0%
Comptes Sociaux
HPS S.A.
HPS SingapourHPS Switch ACPQualife HPS Europe HPS Dubaï
GPS ICPSFiliales
JV
10
0%
10
0%
10
0%
10
0%
10
0%
25
%
20
%
Comptes Consolidés
ACPQ Suisse
10
0%
Comptes Sociaux
HPS S.A.
HPS SingapourHPS Switch ACPQualife HPS Europe HPS Dubaï
GPS ICPSFiliales
JV
10
0%
10
0%
10
0%
10
0%
10
0%
25
%
20
%
Comptes Consolidés
ACPQ Suisse
10
0%
Comptes Sociaux
HPS S.A.
HPS SingapourHPS Switch ACPQualife HPS Europe HPS Dubaï
GPS ICPSFiliales
JV
10
0%
10
0%
10
0%
10
0%
10
0%
25
%
20
%Comptes Consolidés
ACPQ Suisse
10
0%
Comptes Sociaux
HPS S.A.
HPS SingapourHPS Switch ACPQualife HPS Europe HPS Dubaï
GPS ICPSFiliales
JV
10
0%
10
0%
10
0%
10
0%
10
0%
25
%
20
%
Comptes Consolidés
ACPQ Suisse
10
0%
Comptes Sociaux
HPS S.A.
HPS SingapourHPS Switch ACPQualife HPS Europe HPS Dubaï
GPS ICPSFiliales
JV
10
0%
10
0%
10
0%
10
0%
10
0%
25
%
20
%Comptes Consolidés
ACPQ Suisse
10
0%
Comptes Sociaux
HPS S.A.
HPS SingapourHPS Switch ACPQualife HPS Europe HPS Dubaï
GPS ICPSFiliales
JV
10
0%
10
0%
10
0%
10
0%
10
0%
25
%
20
%
Comptes Consolidés
ACPQ Suisse
10
0%
100%
30
Consolidated balance sheet (revenues and expenses) S1 2020
Consolidated balance sheet (revenues and expenses) 30/06/2020 30/06/2019 Var
Operating revenue 359,611,114 349,542,992 2.88%
Turnover 330,519,833 328,265,601 0.69%
Other operating revenues 29,091,281 21,277,391 36.72%
Operating expenses -298,169,229 -293,250,376 1.68%
Purchases for resale - -1,368,242 -100.00%
Consumables purchased -46,008,127 -43,627,510 5.46%
External expenses -56,321,537 -66,487,136 -15.29%
Staff expenses -160,436,358 -149,256,153 7.49%
Other operating expenses -11,927,556 -9,803,185 21.67%
Taxes and levies -7,305,360 -4,879,127 49.73%
Operating allowances -16,170,290 -17,829,023 -9.30%
Operating income 61,441,885 56,292,616 9.15%
Operating margin 17.1% 16.1%
Financial expenses and income -713.570 -1,932,451 -63.07%
Profit on ordinary activities for consolidated companies 60,728,316 54,360,165 11.71%
Non-recurring revenues and expenses -4,517,727 -3,205,559 40.93%
Income taxes -15,393,268 -13,432,811 14.59%
Net profit for consolidated companies 40,817,320 37,721,796 8.21%
Share in earnings from equity affiliates 8,835,762 4,415,911 100.09%
Acquisition adjustment depreciation -1,898,851 -1,845,456 2.89%
Consolidated net income 47,754,232 40,292,251 18.52%
Minority interests 0 0 NA
NET PROFIT (group share) 47,754,232 40,292,251 18.52%
Net margin 13.3% 11.5%
31
S1 2020 Consolidated cash flow statement CASH FLOW STATEMENT 30/06/2020 31/12/2019
NET PROFIT (group share) 47,754,232 93,796,375
Elimination of net income and expenses without effect on available cash
- Depreciation allowances 10,686,992 19,702,875
-Change in deferred income taxes -597.152 -1,143,132
- Gains or losses on disposal - 2.956
- Other net non-cash revenue (expense) without effect on available cash 2,231,571 3,622,813
Net share in earnings from equity affiliates of dividends received -4,949,915 -6,088,172
Self-financing capacity of consolidated companies 55,125,729 109,893,714
Dividends received from equity affiliates - -
Change in activity-related working capital needs 79,685,880 -61,024,039
Net cash flow provided by operating activities 134,811,609 48,869,674
Acquisition of tangible and intangible fixed assets -6,439,654 -30,429,281
Disposals of fixed assets net of tax - -
Disposal of investments in companies accounted for by the equity method - -
Net consolidated company acquisition -7,409,203 -
Cash flows from investment activities -13,848,857 -30,429,281
Dividends paid to shareholders of parent company - -35,179,950
Capital increase in cash - -
Other 39.238 -336.667
Changes in borrowings 16,615,707 -19,210,542
Cash flows from financial operations 16,654,945 -54,727,159
Conversion adjustment 935,857 -1,140,883
Increase (decrease) in cash account 138,553,554 -37,427,648
Cash and cash equivalents at beginning of year 85,466,344 122,893,992
Cash and cash equivalents at end of year 224,019,898 85,466,344
Q & A