AUSTRIACARD — Targeting growth in FY25

AUSTRIACARD (ASE: ACAG)

Last close As at 11/06/2025

EUR5.31

0.04 (0.76%)

Market capitalisation

EUR195m

More on this equity

Research: TMT

AUSTRIACARD — Targeting growth in FY25

AUSTRIACARD’s Q125 results were affected by the normalisation of demand for payment cards in Turkey, which outweighed the strong growth generated by document lifecycle management (DLM) and digital technologies (DT). This resulted in a 10% y-o-y revenue decline and a 19% y-o-y decline in adjusted EBITDA. The business is subject to cyclical fluctuations and the company expects a stronger second half as certain citizen identity card projects come to fruition. We have revised our forecasts down to reflect the weaker Turkish performance, with group revenue growth slightly below management’s medium-term target in FY25 but recovering in FY26.

Katherine Thompson

Written by

Katherine Thompson

Director

Software and comp services

Q125 results

22 May 2025

Price €5.60
Market cap €204m

Net cash/(debt) at end Q125

€(98.2)m

Shares in issue

36.4m
Free float 25.1%
Code ACAG
Primary exchange VSX
Secondary exchange ATHENS
Price Performance
% 1m 3m 12m
Abs (4.7) (9.1) (6.0)
52-week high/low €6.4 €5.2

Business description

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

Next events

AGM

24 June 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 9.2 1.8
12/24 392.3 32.8 0.62 0.11 9.0 2.0
12/25e 412.8 33.1 0.65 0.12 8.6 2.2
12/26e 443.0 38.8 0.78 0.15 7.2 2.7

Turkey payment card normalisation pressures Q125

AUSTRIACARD reported revenue of €82.6m in Q125, down 10% y-o-y. This resulted in a 19% y-o-y decline in adjusted EBITDA to €11.2m (13.6% margin) and a 35% decline in adjusted EBIT to €6.4m (7.7% margin). While DLM grew 8% y-o-y and DT 22% y-o-y, lower demand for payment cards in Turkey resulted in a 22% decline in identity & payment solutions (IPS).

Revising forecasts to reflect Q125 results

We have moderated our revenue growth assumptions to reflect lower demand from Turkey during FY25. We assume a higher weighting in H2 as contracts signed for government identity projects are implemented. We have reduced our revenue estimates by 2.0% in FY25 and 1.8% in FY26, resulting in a normalised diluted EPS reduction of 12.6% in FY25 and 10.1% in FY26. Our revenue growth assumption is 5.2% for FY25 and 7.3% for FY26 compared to the company’s medium-term target of 6–7% average growth per year.

Valuation: Sustained growth to reduce 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% and 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 €7.71/share (down from €8.56/share), 38% 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 Q125 results

Exhibit 1 summarises Q125 performance. Group revenue declined 10% y-o-y, with a drop in sales of cards into the Turkish market the main reason for the decline. On lower revenue, the company reported lower gross, EBITDA and EBIT margins compared to Q124. Adjustments in Q125 comprised a €0.8m management participation scheme charge, €0.6m FX loss and a €0.1m hyperinflation charge. Net debt including leases was €98.2m at the end of Q125.

The tables below shows the split of revenue by business type and by region.

IPS revenue declined by 22%, reflecting lower demand for payment cards in Turkey, partly due to high customer inventories and partly to economic uncertainty. Turkey had been a strong driver of MEA growth, with annualised growth of 52% over the last five years. DLM revenue was 8% higher year-on-year, reflecting an increase in document output revenues in the CEE region and higher distribution revenues associated with card personalisation services. DT revenue was 22% higher year-on-year, driven by the implementation of digital solutions in Greece and Romania and the inclusion of services provided by acquisitions LS Tech and GlobalTrust.

Outlook and changes to forecasts

Management expects a positive trajectory for FY25, albeit with a subdued H125. We understand that H225 revenue should benefit from citizen identity and digital technology projects across the three regions.

We note that at its recent investor day, the company outlined its medium-term financial targets for the business:

  • Revenue: average growth 6–7% per year. Over a three-year period, it expects to grow IPS revenue by an average 6–7% per year, DLM by 4–6% and DLT by 20–25%. For FY25, we have a lower assumption for IPS due to the normalisation of demand in Turkey resulting in growth at the group level of 5.2%.
  • Adjusted EBITDA margin in the range 15–17%.
  • Capex/sales in the range 4–5% per year.
  • Progressive dividend of 20–25% of net profit.
  • Net debt/EBITDA of 1.5–2.0x, excluding M&A activity.

The table below summarises the changes to our forecasts. Lower revenue for IPS results in a reduction in group revenue, EBITDA and EPS for FY25 and FY26.


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