AUSTRIACARD — Outlook points to H2-weighted growth

AUSTRIACARD (ASE: ACAG)

Last close As at 19/07/2024

EUR5.81

−0.04 (−0.68%)

Market capitalisation

EUR212m

More on this equity

Research: TMT

AUSTRIACARD — Outlook points to H2-weighted growth

AUSTRIACARD reported adjusted revenue growth of 1.4% for Q124, reflecting comparison to a particularly strong Q123. Better sales mix and good control over the cost base resulted in expansion of the adjusted EBITDA margin to 15.2% (+0.1pp y-o-y). Contracts signed in all three business areas should drive revenue acceleration from Q2, providing support for management’s target of 10% growth in adjusted revenue in FY24. We revise our forecasts to reflect management guidance, higher working capital and the recent LSTech acquisition, resulting in small reductions in our EPS forecasts.

Katherine Thompson

Written by

Katherine Thompson

Director

TMT

AUSTRIACARD

Outlook points to H2-weighted growth

Q124 results

Software and comp services

5 June 2024

Price

€5.86

Market cap

€213m

Net debt (€m) at end Q124

102.6

Shares in issue

36.4m

Free float

28%

Code

ACAG

Primary exchange

Athens

Secondary exchange

Vienna Stock Exchange

Share price performance

%

1m

3m

12m

Abs

(6.0)

(2.8)

(16.1)

Rel (local)

(7.6)

(9.4)

(26.4)

52-week high/low

€7.35

€5.70

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

AGM

9 July

H124 results

29 August

Analyst

Katherine Thompson

+44 (0)20 3077 5700

AUSTRIACARD is a research client of Edison Investment Research Limited

AUSTRIACARD reported adjusted revenue growth of 1.4% for Q124, reflecting comparison to a particularly strong Q123. Better sales mix and good control over the cost base resulted in expansion of the adjusted EBITDA margin to 15.2% (+0.1pp y-o-y). Contracts signed in all three business areas should drive revenue acceleration from Q2, providing support for management’s target of 10% growth in adjusted revenue in FY24. We revise our forecasts to reflect management guidance, higher working capital and the recent LSTech acquisition, resulting in small reductions in our EPS forecasts.

Year end

Revenue* (€m)

PBT**
(€m)

EPS**
(€)

DPS
(€)

P/E
(x)

Yield
(%)

12/22

314.7

23.0

0.42

0.03

14.0

0.4

12/23

364.6

29.8

0.62

0.10

9.4

1.7

12/24e

398.6

34.5

0.64

0.10

9.1

1.7

12/25e

428.4

42.6

0.81

0.14

7.2

2.4

Note: *Reported, after hyperinflation adjustment. **PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Mixed revenue performance in Q124

In Q124, Secure Chip and Payment Solutions revenue declined 8.4% y-o-y, reflecting slower sales of metal cards, a management decision to reduce the sale of part-finished products and a particularly strong performance in Q123. Document Lifecycle Management grew revenue 9.6% y-o-y, helped by the inclusion of Pink Post from Q223. Digital Transformation Technology revenue was 181.0% higher, reflecting good progress in winning digitalisation projects in Romania and Greece.

Outlook: Double-digit revenue and EBITDA growth

Management expects to generate c 10% growth in adjusted revenue and 10–12% growth in adjusted EBITDA in FY24. New and renewal contracts signed with challenger and traditional banks, the start of a new EU-funded project in Greece and entry into the PayTV market provide scope for an acceleration in revenues from Q224. We slightly increase our revenue forecasts and slightly reduce our EBITDA forecasts to match company guidance and factor in slightly higher working capital due to the build-up of chip module inventory.

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 pro forma forecasts to FY26, conservative revenue growth of 3% for FY27–33 and flat EBITDA margins from FY27, we arrive at a per share value of €9.85 (from €10.0/share), 68% above the current share price. In our view, factors that could reduce this gap include further adoption of digital services outside of the Greek public sector, market share gains in the US and other focus payment card markets, customer wins for card-as-a-service and a further increase in free float.

Review of Q124 results

Exhibit 1 summarises AUSTRIACARD’s Q124 results. We show both reported and adjusted results (which exclude the impact of accounting for hyperinflation). The effect of IAS 29 hyperinflation accounting for Turkish operations added €2.1m to revenue, and €0.2m to gross profit, operating expenses, adjusted EBITDA, adjusted EBIT, profit before tax and profit after tax.

Exhibit 1: Q124 results highlights

€m

Before hyperinflation accounting

As reported

Q123

Q124

Q123

Q124

Revenue

88.5

89.7

89.8

91.8

Gross profit I

37.7

42.1

Gross profit II

21.9

22.5

22.1

22.7

Adjusted EBITDA

13.4

13.6

11.6

12.6

D&A

(3.7)

(4.0)

(3.7)

(4.0)

Adjusted EBIT

9.7

9.6

One-offs

(1.9)

(1.2)

EBIT

7.8

8.4

7.8

8.6

Finance income

0.0

0.0

0.0

0.2

Finance expense

(1.4)

(1.8)

(1.7)

(2.2)

Associates & JVs

0.0

(0.2)

0.0

0.0

One-offs

0.0

0.0

0.0

0.0

Profit before tax

6.4

6.4

6.2

6.6

Tax

(1.5)

(1.4)

(1.5)

(1.4)

Profit after tax

4.9

5.0

4.7

5.2

Minority interest

(0.4)

(0.1)

Net income

4.3

5.1

Gross margin I

42.6%

46.9%

N/A

N/A

Gross margin II

24.7%

25.1%

24.6%

24.8%

Adjusted EBITDA margin

15.1%

15.2%

12.9%

13.7%

Adjusted EBIT margin

11.0%

10.7%

N/A

N/A

Tax rate

23.4%

21.9%

24.0%

21.7%

Net margin

5.5%

5.6%

5.2%

5.6%

Revenue growth

46.5%

1.4%

48.7%

2.2%

Source: AUSTRIACARD. Note: Gross profit I is after costs of material and mailing; gross profit II is gross profit I less production costs. Gross profit II is equivalent to reported gross profit.

Exhibit 2: Revenue by solution type

Source: AUSTRIACARD

Based on management accounts (before IAS 29 adjustments):

Revenue grew 1.4% y-o-y. Growth in DTT of €3.8m and in DLM of €2.5m was offset by a decline of €5.8m in revenue from the sale of chip modules and wafers in SCPS (the company decided to significantly reduce sales of semi-finished products). We note that in Q123, the company reported revenue growth of 49% y-o-y, mainly driven by strong growth in payment cards across the US, the UK and Turkey and to challenger/neobanks.

Gross margin expanded 0.4pp to 25.1% on a better sales mix.

Adjusted EBITDA grew 2.2%, increasing the margin by 0.1pp to 15.2%.

Adjusted EBIT grew at only 0.4%, reflecting higher amortisation due to acquisitions, resulting in an adjusted EBIT margin of 10.8%, down 0.1pp y-o-y.

One-off items included a €1.2m charge for the management participation programme (Q123: €1.9m), €0.1m of foreign exchange gains and a €0.2m charge for the revaluation of financial assets and liabilities through the P&L.

Profit after tax increased by 2% y-o-y due to a slightly lower tax rate and a lower level of one-offs, resulting in a net margin of 5.6%.

Net debt increased by €7.5m from the end of FY23 to €102.6m at the end of Q124, mainly due to higher working capital requirements (+€12.5m vs end FY23). The company’s inventory levels are normalising post supply chain disruption.

Divisional performance

Exhibit 3: Divisional performance excluding hyperinflation accounting and as reported

 

Q123

Q124

Revenue growth

 

Western Europe/Nordics/Americas

 

N/A

-25.0%

Central Eastern Europe/DACH

 

N/A

23.0%

Turkey/Middle East/Africa

 

N/A

34.7%

Corporate & eliminations

 

N/A

60.4%

Total – before IAS 29 adjustment

 

N/A

1.4%

Reported revenue growth

 

N/A

2.3%

Gross margin I

 

Western Europe/Nordics/Americas

 

43.6%

50.3%

Central Eastern Europe/DACH

 

39.3%

44.1%

Turkey/Middle East/Africa

 

21.0%

15.8%

Total – before IAS 29 adjustment

 

42.7%

46.9%

Reported gross margin I

 

42.3%

46.2%

Gross margin II

 

Western Europe/Nordics/Americas

 

28.7%

29.0%

Central Eastern Europe/DACH

 

20.7%

23.3%

Turkey/Middle East/Africa

 

12.0%

10.1%

Total – before IAS 29 adjustment

 

24.7%

25.1%

Reported gross margin II

 

24.5%

24.8%

Adjusted EBITDA margin

 

Western Europe/Nordics/Americas

 

20.9%

19.7%

Central Eastern Europe/DACH

 

10.5%

12.9%

Turkey/Middle East/Africa

 

9.9%

7.8%

Total – before IAS29 adjustment

 

15.1%

15.2%

Reported adjusted EBITDA margin

 

15.0%

15.1%

Adjusted operating margin

 

Western Europe/Nordics/Americas

 

17.0%

14.1%

Central Eastern Europe/DACH

 

6.0%

8.9%

Turkey/Middle East/Africa

 

9.0%

7.4%

Total – before IAS 29 adjustment

 

10.9%

10.8%

Reported adjusted operating margin

 

10.8%

10.7%

Source: AUSTRIACARD

Western Europe, Nordics, Americas

In Q124, revenue declined €8.6m or 25.0% y-o-y, with €6.4m of the decline from Secure Chip and Payment Solutions. As mentioned above, most of the decline was due the decision to stop selling part-finished products (€5.1m). The company signed significant contracts in Q124, which include the supply of metal cards to a leading challenger bank and renewing a long-term agreement with a major fintech company as exclusive supplier of personalisation services. Gross margin increased by 0.3pp to 29.0% on a better sales mix. Adjusted EBITDA declined 29.4%, resulting in the margin declining 1.2pp to 19.7%. Adjusted operating margin declined 2.9pp to 14.1%.

Central Eastern Europe

Q124 revenue grew €11.6m or 23.0% y-o-y. The March 2023 Pink Post acquisition contributed €2.8m to revenue growth, strong growth in DTT added €3.8m and the production of cards for Turkey helped drive Secure Chip and Payment Solutions revenue up €5.8m. The business signed key contract renewals with major banking groups (one for five years, one for three years), entered the PayTV market (supplying access cards), and won new card clients in Romania and Bulgaria. DTT continues to grow as it implements agreements for services such as digital conversion and electronic archiving, including the start of public sector contracts in Greece funded by the EU’s Recovery and Resilience Facility (RRF). Gross margin increased by 2.7pp to 23.3% on higher sales. Adjusted EBITDA increased 51.0% resulting in margin expansion of 2.4pp to 12.9%. Adjusted operating margin increased 2.9pp to 8.9%.

Turkey/Middle East and Africa

Q124 revenue grew €5.2m or 34.7% y-o-y, mainly due to strong demand for payment products. The business won Turkey’s largest bank as a client and now supplies all of Turkey’s major banks. It sees ongoing opportunities in the MEA smart card and citizen identity markets. Gross margin declined 2pp to 10.1% due to the sales mix. Adjusted EBITDA increased 6.1% resulting in the margin declining 2.1pp to 7.8%. Adjusted operating margin declined 1.6pp to 7.4%.

Business update

Acquisition of LSTech enhances data analytics capabilities

As we previously wrote, AUSTRIACARD acquired a UK-based data analytics specialist for €1.6m on 21 May. This should strengthen the digital transformation technology practice.

RRF-funded contract won in Greece

In April, INFORM signed a contract in Greece to digitise the archives of the Public Health System following a tender process; the project is funded by the EU Recovery Fund. The contract includes the digitisation of more than 197 million pages and images, including medical records, X-rays and ECG/EEG films. The aim of digitising records is to improve care, reduce costs and modernise the system.

Free float increased via secondary placement

On 30 April, a secondary placement saw 5,470,321 shares (15.05% of share capital) sold to qualified investors at a range of €6.0–6.1. This included 2.2 million shares (6.05% of share capital) held by Chairman Nikolaos Lykos, whose stake has now reduced to 71.5%. This increases the company’s free float to 28%.

Outlook and changes to forecasts

Management expects to achieve adjusted revenue growth of c 10% for FY24 and growth in adjusted EBITDA in the range of 10–12%, potentially enhancing margins. After limited growth in Q124, management expects revenue to accelerate as new contracts across all three business areas are implemented. Management is putting in place measures to reduce working capital, particularly inventory, and is targeting working capital/sales in the range 16–20% by year-end.

We have revised our forecasts to reflect slightly higher growth in adjusted revenue and slightly lower growth in adjusted EBITDA, in line with guidance. We have increased our working capital assumptions, with working capital/sales of 17.9% for FY24. We have also factored in the LSTech acquisition. Overall, this results in cuts to our normalised diluted EPS of 3.5% in FY24, 1.9% in FY25 and 0.6% in FY26.

Exhibit 4: Changes to forecasts

€m

FY24e

FY24e

FY25e

FY25e

FY26e

FY26e

Old

New

Change

y-o-y

Old

New

Change

y-o-y

Old

New

Change

y-o-y

Revenues

395.2

398.6

0.9%

9.3%

424.7

428.4

0.9%

7.5%

455.2

459.1

0.9%

7.2%

EBITDA

57.1

55.9

-2.1%

10.8%

64.6

63.8

-1.2%

14.1%

72.4

72.1

-0.4%

13.0%

EBITDA margin

14.4%

14.0%

-0.4%

0.2%

15.2%

14.9%

-0.3%

0.9%

15.9%

15.7%

-0.2%

0.8%

Normalised operating profit

43.0

41.8

-2.8%

13.6%

50.0

49.2

-1.6%

17.6%

57.2

56.9

-0.5%

15.7%

Normalised operating margin

10.9%

10.5%

-0.4%

0.4%

11.8%

11.5%

-0.3%

1.0%

12.6%

12.4%

-0.2%

0.9%

Reported operating profit

35.0

33.8

-3.4%

7.7%

42.0

41.2

-1.9%

21.7%

49.2

48.9

-0.6%

18.7%

Reported operating margin

8.9%

8.5%

-0.4%

-0.1%

9.9%

9.6%

-0.3%

1.1%

10.8%

10.6%

-0.2%

1.0%

Normalised PBT

35.7

34.5

-3.4%

15.8%

43.4

42.6

-1.8%

23.7%

51.4

51.1

-0.6%

20.0%

Reported PBT

26.5

25.3

-4.5%

20.4%

34.2

33.5

-2.3%

32.2%

42.3

42.0

-0.7%

25.5%

Normalised net income

26.3

25.3

-3.5%

11.1%

32.6

32.0

-1.9%

26.2%

39.0

38.8

-0.6%

21.4%

Reported net income

19.2

18.3

-4.8%

15.6%

25.4

24.8

-2.4%

35.8%

31.9

31.6

-0.7%

27.3%

Normalised basic EPS (€)

0.72

0.70

-3.5%

7.1%

0.90

0.88

-1.9%

26.3%

1.07

1.07

-0.6%

21.4%

Normalised diluted EPS (€)

0.66

0.64

-3.5%

3.0%

0.83

0.81

-1.9%

26.3%

0.99

0.98

-0.6%

21.4%

Reported basic EPS (€)

0.53

0.50

-4.8%

-22.6%

0.70

0.68

-2.4%

35.9%

0.88

0.87

-0.7%

27.3%

Dividend per share (€)

0.11

0.10

-4.8%

1.8%

0.14

0.14

-2.4%

35.9%

0.18

0.18

-0.7%

27.3%

Net debt

61.8

68.2

10.2%

-15.2%

36.5

41.2

13.0%

-39.5%

6.4

10.0

56.9%

-75.7%

Net debt including leases

76.5

82.9

-12.8%

51.2

55.9

-32.5%

21.1

24.7

-55.8%

Source: Edison Investment Research


Exhibit 5: Financial summary

Year end 31 December

€m

2019

2020

2021

2022

2023

2024e

2025e

2026e

INCOME STATEMENT

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

Revenue

 

 

135.0

173.9

178.0

314.7

364.6

398.6

428.4

459.1

Cost of sales

(105.2)

(134.2)

(137.1)

(239.9)

(276.3)

(300.4)

(320.9)

(342.4)

Gross profit

 

 

29.8

39.7

40.9

74.9

88.3

98.1

107.5

116.7

Operating costs

(16.8)

(18.5)

(19.1)

(35.7)

(37.9)

(42.2)

(43.7)

(44.6)

EBITDA

 

 

13.0

21.1

21.8

39.1

50.4

55.9

63.8

72.1

Normalised operating profit

 

 

6.2

12.3

11.4

27.2

36.8

41.8

49.2

56.9

Amortisation of acquired intangibles

(0.1)

(1.4)

(1.4)

(2.5)

(2.5)

(2.5)

(2.5)

(2.5)

Exceptionals

0.0

(1.1)

5.0

(7.9)

(2.9)

(5.5)

(5.5)

(5.5)

Share-based payments

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Reported operating profit

6.1

9.8

15.0

16.8

31.4

33.8

41.2

48.9

Net Interest

(2.7)

(3.3)

(2.7)

(4.3)

(7.1)

(7.4)

(6.6)

(5.8)

Joint ventures & associates

0.0

0.0

0.0

0.1

0.1

0.0

0.0

0.0

Exceptionals

0.0

0.0

(0.0)

(4.2)

(3.4)

(1.2)

(1.2)

(1.2)

Profit Before Tax (norm)

 

 

3.4

8.9

8.7

23.0

29.8

34.5

42.6

51.1

Profit Before Tax (reported)

 

 

3.3

6.5

12.3

8.4

21.0

25.3

33.5

42.0

Reported tax

(1.8)

(1.0)

(2.2)

(3.5)

(4.2)

(5.8)

(7.4)

(9.0)

Profit After Tax (norm)

1.5

7.5

7.2

13.3

23.8

26.5

33.2

40.1

Profit After Tax (reported)

1.5

5.4

10.0

4.8

16.8

19.5

26.1

32.9

Minority interests

(0.1)

(0.3)

(0.8)

(0.7)

(1.0)

(1.2)

(1.3)

(1.3)

Net income (normalised)

1.5

7.2

6.4

12.6

22.8

25.3

32.0

38.8

Net income (reported)

1.4

5.1

9.2

4.2

15.8

18.3

24.8

31.6

Basic average number of shares outstanding (m)

29.3

29.3

29.3

30.0

35.0

36.3

36.3

36.3

EPS - basic normalised (€)

 

 

0.05

0.25

0.22

0.42

0.65

0.70

0.88

1.07

EPS - diluted normalised (€)

 

 

0.05

0.25

0.22

0.42

0.62

0.64

0.81

0.98

EPS - basic reported (€)

 

 

0.10*

0.35*

0.63*

0.28*

0.65*

0.50

0.68

0.87

Dividend (€)

0.00

0.00

0.00

0.03

0.10

0.10

0.14

0.18

Revenue growth (%)

28.8%

2.4%

76.9%

15.8%

9.3%

7.5%

7.2%

EBITDA Margin (%)

9.7%

12.1%

12.3%

12.4%

13.8%

14.0%

14.9%

15.7%

Normalised Operating Margin (%)

4.6%

7.1%

6.4%

8.6%

10.1%

10.5%

11.5%

12.4%

BALANCE SHEET

Fixed Assets

 

 

114.2

115.2

145.4

153.8

156.8

156.6

155.2

154.2

Intangible Assets

29.3

31.4

60.7

57.2

55.5

54.6

52.2

50.2

Tangible Assets

80.3

79.6

83.0

90.4

96.3

97.1

98.0

99.1

Investments & other

4.6

4.2

1.8

6.2

5.0

5.0

5.0

5.0

Current Assets

 

 

77.3

66.2

81.0

116.4

164.9

181.7

205.4

234.3

Stocks

19.2

19.8

23.2

36.1

58.2

66.7

68.1

70.4

Debtors

21.3

19.3

29.3

40.0

44.7

48.8

52.5

56.3

Cash & cash equivalents

22.3

11.0

11.5

21.6

23.8

26.0

43.0

64.1

Other

14.5

16.1

17.1

18.7

38.3

40.2

41.8

43.5

Current Liabilities

 

 

(90.3)

(49.3)

(62.9)

(99.4)

(99.3)

(104.8)

(109.2)

(113.7)

Creditors

(32.1)

(29.8)

(40.3)

(64.8)

(79.4)

(84.9)

(89.3)

(93.8)

Tax and social security

(0.4)

(0.3)

(1.6)

(3.5)

(3.0)

(3.0)

(3.0)

(3.0)

Short term borrowings

(54.6)

(14.9)

(16.2)

(25.3)

(12.7)

(12.7)

(12.7)

(12.7)

Lease liabilities

(2.7)

(2.5)

(4.5)

(2.3)

(3.8)

(3.8)

(3.8)

(3.8)

Other

(0.5)

(1.8)

(0.2)

(3.5)

(0.5)

(0.5)

(0.5)

(0.5)

Long-term Liabilities

 

 

(44.6)

(71.4)

(97.3)

(90.0)

(115.2)

(105.2)

(95.2)

(85.2)

Long-term borrowings

(19.6)

(46.4)

(72.3)

(62.0)

(91.5)

(81.5)

(71.5)

(61.5)

Lease liabilities

(6.8)

(5.1)

(3.5)

(8.6)

(10.9)

(10.9)

(10.9)

(10.9)

Other long-term liabilities

(18.2)

(20.0)

(21.4)

(19.3)

(12.8)

(12.8)

(12.8)

(12.8)

Net Assets

 

 

56.5

60.7

66.2

80.8

107.2

128.3

156.2

189.6

Minority interests

(12.5)

(12.0)

(13.0)

(11.6)

(0.8)

(2.0)

(3.2)

(4.5)

Shareholders' equity

 

 

44.0

48.7

53.3

69.2

106.4

126.3

153.0

185.1

CASH FLOW

Op Cash Flow before WC and tax

3.3

6.5

12.3

8.4

21.0

25.3

33.5

42.0

Working capital

2.0

(2.0)

(4.0)

2.7

(35.3)

(9.1)

(2.4)

(3.2)

Exceptional & other

9.9

13.8

6.5

31.4

29.8

29.4

29.2

29.0

Tax

(0.2)

(1.4)

(1.6)

(1.6)

(6.4)

(5.8)

(7.4)

(9.0)

Net operating cash flow

 

 

15.0

16.9

13.2

40.9

9.1

39.8

52.9

58.7

Capex

(5.3)

(8.8)

(9.0)

(14.5)

(11.1)

(11.7)

(12.5)

(13.4)

Acquisitions/disposals

(18.7)

0.2

(16.5)

(2.9)

(1.1)

(1.6)

0.0

0.0

Net interest

(2.2)

(2.3)

(2.4)

(4.1)

(7.4)

(7.4)

(6.6)

(5.8)

Equity financing

0.0

0.0

0.0

0.0

0.0

(0.2)

0.0

0.0

Dividends

(0.8)

(0.7)

0.0

0.0

(0.9)

(3.6)

(3.7)

(5.0)

Other

(2.1)

(3.2)

(11.0)

(7.4)

(2.9)

(3.1)

(3.2)

(3.3)

Net Cash Flow

(14.2)

2.2

(25.8)

12.0

(14.2)

12.2

27.0

31.2

Opening net debt/(cash)

 

 

35.9

51.9

50.2

77.1

65.7

80.3

68.2

41.2

FX

(0.1)

(0.5)

(0.3)

(0.6)

(0.7)

0.0

0.0

0.0

Other non-cash movements

(1.7)

0.0

(0.7)

(0.1)

0.3

(0.0)

0.0

0.0

Closing net debt/(cash)

 

 

51.9

50.2

77.1

65.7

80.3

68.2

41.2

10.0

Source: AUSTRIACARD, Edison Investment Research. Note: *Not adjusted for share split in August 2023.

General disclaimer and copyright

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.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2024 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

General disclaimer and copyright

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.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2024 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

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