Network International Holdings plc (LON: NETW), the leading enabler of digital commerce across the Middle East and Africa, has announced its third quarter business update. Network International plans to announce its Full Year Results the week commencing 2 March 2020.
The Group continues to perform well, building on a strong first half of the year. We are pleased with the good growth across all of our key performance indicators, which is driving strong revenue growth in both the business lines and geographic segments. We are also encouraged by the progress we continue to make across our strategic priorities, including a number of exciting growth accelerator opportunities that we have highlighted earlier.
Successful technology migration
Our new technology platform, Network One, is a highly scalable, next-generation platform. It is seamlessly integrated across all payments methods and geographies and will deliver significant benefits in terms of providing differentiated services to the customers, greater ease of innovation, cross selling more effectively and faster entry into new markets while driving operational efficiencies.
The migration of customers onto the new platform is progressing as planned. We are pleased to confirm that we successfully migrated Abu Dhabi Commercial Bank’s issuing portfolio earlier this month. With this migration, Network’s customers representing more than 99% of its revenues have been migrated to the new platform, with the remaining few customers on schedule to migrate before the end of 2019. This will complete Network’s biggest ever technology project and the capex associated with this program will finish this year.
Expanding the customer base
We have signed a multi-year contract renewal with Orabank for the provision of a range of services across issuer and merchant solutions in 12 markets, including the deployment of newly available digital banking services. We have won new customer mandates in Africa, notably in Nigeria, where we have seen the mass adoption of card control services from First Bank of Nigeria Limited for millions of cards. We were also selected as the third-party processor for Polaris Bank Visa Debit Cards. In addition, we continue to win new business across the Key and SME segments of our direct acquiring business in the Middle East.
Developing leading payment solutions
The Group has progressed a number of important initiatives during the period, including signing an agreement with CR2 (www.cr2.com) to provide mobile banking as a Managed Hosted Service to our bank customers across the region, allowing them to rapidly deploy and cost-effectively manage their mobile banking services
We now have over 13,000 installed units of our N-Genius POS solution in the UAE, with good demand and feedback from customers. Usage of Alipay is ahead of expectations, particularly in our integrated retailers and helps further expand the acceptance of alternative forms of payment, thus adding value for our merchant customers.
Our N-Genius Online gateway launched earlier this year continues to gain good traction, with over 100 customers now live on the platform.
Product expansion in new markets
We are excited about the opportunity to deploy our N-Genius capabilities in Africa, having already completed the first transaction in an African country during the period. We will commence initial deployment in five countries in Africa before the end of the year and we expect to expand the N-Genius solution beyond card payments into new payment types and new value-added services as we make it made more widely available across Africa during 2020.
Capitalising on adoption of digital payments
Reflecting changes in local regulations, the Central Bank of Jordan has recently awarded licenses to our Jordanian business, allowing us to operate as a direct merchant acquirer, operate the ATM switch (JONET) and facilitate clearing and settlement of transactions in electronic payments systems. This will further strengthen our competitive positioning in a market that is very important for us in the Middle East.
New market entry into Kingdom of Saudi Arabia
The Kingdom of Saudi Arabia presents an exciting opportunity for the Group. Over time, we believe it has the potential to be our second largest market, providing significant upside to our revenue and EBITDA guidance, accelerating the Group’s growth profile and providing attractive returns on investment. As announced in August, we are carefully planning the incremental investment needed to enter the Saudi Arabian market, which we will undertake in a phased and disciplined manner. We will provide an update on our plans when we announce our full year results in March 2020.
Mastercard strategic partnership
Following the signing of the commercial agreement with Mastercard in August, we are close to finalizing the initial set of product and sales initiatives that we will jointly deploy in order to accelerate the adoption of digital payments across the region. We will provide an update on the progress and financial benefits of the partnership, which as previously described will be incremental to the core guidance set out at the time of our IPO, with our full year results.
The Board remains confident in the Group’s growth prospects and ability to capture the very significant opportunities that exist across our markets and we remain on track to deliver low double-digit constant currency organic revenue growth while maintaining stable underlying EBITDA margins for 2019, in line with the guidance shared earlier.