Unifiedpost grows digital revenue while further improving operational efficiency
Capturing digital trends and navigating the evolving e-invoicing and e-payment market
La Hulpe, Belgium – August 29, 2023, 7:00 a.m. CET – [INSIDE INFORMATION] Today, Unifiedpost Group (Euronext: UPG), a leading provider of integrated business communications solutions, presents its results for H1 2023. The digital processing revenue has increased, showing a 9,9% growth y/y, supported by a 12,3% rise in recurring digital processing revenue. This is reflected in Unifiedpost’s growing customer base, totalling 1.172.197 businesses by the end of H1 2023. As Europe continues its shift towards full digital invoicing, with some countries taking more time to adapt, the Group’s focus remains on a positive cash flow while continuing a trajectory filled with growth and innovation.
Highlights
- Digital processing revenue grows 9,9% in H1 2023 y/y, supported by a 12,3% rise in recurring digital processing revenue
- Digital processing gross margin improves to 41,5%, up 1,5 %pts y/y
- Revenue decline in postage and parcel optimisation y/y is primarily due to SEK-EUR exchange rate fluctuations
- Cash at end of H1 2023 at € 24,7 million with undrawn financing available
- A binding offer was made for the divestment of FitekIN and Onea at € 7,2m with closing set for H2 2023
- Focus remains on becoming cash flow positive
- The Group is preparing for EU e-invoicing shifts including divestments of its non-core services
Commenting on the H1 2023 results, Hans Leybaert, CEO and founder, remarked: "H1 2023 shows how committed we are to adapting in a digital world that keeps changing. The recent postponement by the French Ministry of Finance underscores the ground-breaking changes of the digital transition. The broader market now sees what we've known for a while: we need broad and integrated solutions. Our strategic choice to offer a fully integrated platform has positioned us not only to adapt but to lead in these exciting times. I am immensely grateful to our Unifiedpost team and partners for their continued dedication and for anticipating the multifaceted needs of the future.”
Key financial figures
| (EUR million) | H1 2023 | H1 2022 | Change (%) |
| Group revenue | 93,2 | 91,7 | +1,5% |
| Digital processing revenue | 65,2 | 59,3 | + 9,9% |
| Recurring digital processing revenue | 62,8 | 55,9 | +12,3% |
| Non-recurring digital revenue (licences + project) | 2,4 | 3,4 | -29,4% |
| Postage & parcel optimisation revenue | 27,9 | 32,4 | -13,9% |
| Recurring revenue (in % of total revenue) | 97,4% | 96,3% | +1,1%pts |
| Gross margin digital processing | 41,5% | 40,0% | +1,5%pts |
| EBITDA margin | -3,1% | -7,1% | +4,0%pts |
| Loss for the period | -24,0 | -21,1 | +13,7% |
| Cash and cash equivalents | 24,7 | 42,7 | -42,2% |
Key business KPI’s
| (#) | End Q2 2023 | End Q1 2023 | End Q4 2022 | End Q3 2022 | End Q2 2022 |
| Customers | 1.172.197 | 1.133.706 | 1.063.776 | 986.971 | 910.845 |
| Paying customers | 490.936 | 473.679 | 468.128 | 453.417 | 430.524 |
| Customers paid by 3rd parties | 681.261 | 660.027 | 595.648 | 533.554 | 480.321 |
| Companies in business network | 2.254.762 | 2.186.270 | 2.109.297 | 2.023.460 | 1.745.401 |
| Banqup customers |
151.931 | 143.902 | 124.333 | 80.420 | 68.546 |
| Billtobox customers Belgium |
48.651 | 45.359 | 40.363 | 37.459 | 35.382 |
| JeFacture customers France (JeFacture) |
14.291 | 11.973 | 5.428 | 4.087 | 3.591 |
Growing digital processing revenue while improving operational efficiency
In H1 2023, we concentrated on moving closer to our main goal: a positive cashflow. We combine three main strategies, which we have diligently pursued in the past and continue to uphold:
- Consistent growth of digital processing gross profit, preferable recurring in nature
- Balanced approach to postage & parcel optimisation services
- Focus on synergy realisation and streamlining organisation
These markers not only highlight our H1 2023 endeavours but also provide a glimpse into our strategic roadmap for the coming periods.
Consistent growth of digital processing gross profit
Unifiedpost’s digital processing services are the cloud-based platforms that serve small, medium, and large businesses in areas of document flows, payments, and additional value-added services.
The first half of 2023 clearly demonstrated Unifiedpost's strong dedication to its digital path. Digital processing revenue saw an increase of 9,9% y/y to € 65,2 million. Driving this was the growth of our recurring digital processing revenue, which registered a 12,3% increase y/y, reaching € 62,8 million.
Non-recurring digital revenue experienced a decline, down by 29,4% y/y to a total of € 2,4 million for H1 2023. This fluctuation is indicative of the inherent cyclical nature associated with non-recurring revenue sources.
Our goal to continually augment the gross profit of the digital processing service remains unwavering. The growth in gross profit of digital processing services y/y amounting to € 3,3 million is partially driven (i) by revenue growth amounting to € 2,3 million additional gross profit and partially driven (ii) by increasing margin-% amounting to € 1,0 million additional gross profit.
Steady gross profit of postage and parcel optimisation services
Unifiedpost has services in the Nordics to optimise postage to its clients. Depending on client preferences, Unifiedpost's service can be solely for 'optimisation', or extended to printing and overseeing all associated postage expenses. Unifiedpost can extend these services to (small) parcel distribution.
In H1 2023, Unifiedpost's postage & parcel revenue declined 13,9% y/y, settling at € 27,9 million, down from € 32,4 million in H1 2022. This can be largely attributed to the impact of the SEK-EUR exchange rate change (-9,7% from 30 June 2022 to 30 June 2023). Another influential factor has been the evident shift from paper to digital among our clientele.
Our improved gross margin in this segment shows our resilience. The margin climbed from 10,3% in H1 2022 to 11,3% in H1 2023. This improvement in gross margin compensated the missing gross profit from reduced volumes.
Focus on synergy realisation and streamlining organisation drives Unifiedpost towards a sustainable future
In the domain of strategic cash management, it's essential to manage both operational and investment costs. Following our acquisitions and integrations, Unifiedpost has shifted its focus towards operational efficiency, capitalizing on the synergies. Activating these synergies results in the reallocation of teams, a heightened emphasis on efficiencies, and bolstering our cost-saving program. The reallocation of teams affects how our expenses by nature are presented. It's vital to recognize that a direct year-on-year comparison of expenses (2022-2023) by category may not yield a comprehensive picture.
The implementation of our strategic initiatives is evident. As of 30 June 2023, we have reduced the employee count from 1.479 (recorded on 30 June 2022) to 1.322. Although H1 2023 still bears significant one-off costs, the cumulative impact of a 10,6% workforce reduction will manifest in subsequent quarters. This will be observable in the operational costs associated with S&M, R&D,
G&A, and in CAPEX. Notably, the Group's total personnel costs for H1 2023 decreased to € 40,9 million from € 41,2 million in H1 2022, despite an approximate 5% wage surge across the Group due to inflation. By June 2023, our monthly personnel expense had further reduced to € 6,1 million. The total expenses declined year over year from € 109,5 million to € 108,9 million for the first semester.
It's noteworthy that the company has recorded a larger portion of R&D in its results (€ 1,4 million) as it stopped development on some local products but continued maintain services for these products.
By diligently managing personnel expenses without sacrificing service quality or growth trajectories, and with a keen commitment to R&D investments for emerging markets, Unifiedpost Group is resolutely navigating towards a cash flow-positive business.
Liquidity position pave the way for future growth
By the end of H1 2023, Unifiedpost Group reported a financial position with cash and cash equivalents totalling € 24,7 million. Additionally, the Group has € 15,9 million in undrawn invoice financing and € 2,0 million in undrawn financing facilities. Our working capital continues to align with the figures observed at the end of 2022.
As 2023 unfolds, Unifiedpost Group's outlook remains positive. The projected growth in revenue and gross profit is being realised. With a growing customer base that adds to our recurring digital processing revenue, combined with effective cost management, the Group is progressing to reach the cash flow break-even point. With the data from the first half of the year now available, we are further committed to generate over H2 a positive operating cash flow that exceeds the capital expenditure of the Group over the same period.
Growing the network: robust customer growth
Unifiedpost's emphasis on customer onboarding has proven fruitful. By Q2 2023, our customer count rose to 1.172.197, a 10,2% growth from the end figure of 2022. In detail, Q1 2023 saw 69.930 new customers, and Q2 added 38.491. Our paid customer segment reached 490.936, while third-party financed customers grew to 681.261.
Our business network, i.e. own customers and other companies that we can reach in a digital way, now serves over 2,25 million companies, up from 2,11 million at the end of 2022. This growth cements our position in the e-invoice and e-payment segment, particularly among Europe's SMEs.
Our core SME platforms, including Banqup, Billtobox, and JeFacture, gained momentum. Their combined customer base reached 151.931 by Q2 2023. Impressively, H1 2023 added 27.598 new subscriptions. Belgium and France, key markets for us, also reported growth. Banqup's Belgian customers (Billtobox) increased to 48.651. In France, early adopters of JeFacture reached 14.291 by Q2's end.
Proactively navigating the evolving e-invoicing and e-payment landscape
On 28 July 2023, the French Ministry of Finance announced a postponement in the e-invoicing and e-reporting mandates originally starting July 2024. These mandates, planned in phases, now face revision due to challenges integrating daily B2C sales data, international B2B sales invoices, and more. This digital transition is compounded by technological, operational, and regulatory challenges.
Unifiedpost Group has consistently been at the forefront, actively preparing for these complexities. The recent developments underscore the importance of flexible and diverse solutions, an area where Unifiedpost has consistently excelled. Our strategy revolves around offering an extensive integrated range of services suitable for businesses of all sizes. Ready to adopt the new systems swiftly, we have always anticipated potential market complexities and possible delays. Nevertheless, our commitment to our mission remains strong.
With Europe transitioning to a new framework for e-invoicing and e-payment, Unifiedpost Group consistently evaluates its services, ensuring we maintain a comprehensive offering that addresses all requirements. Services that are not integrated or not fully digital are scrutinised for potential divestment. The divestment of FitekIN and Onea as standalone products, expected to close in Q4 2023, marked a strategic move in this direction. Announced on 1 August 2023, this decision emphasizes our commitment to streamlining core business operations. On the other hand, Unifiedpost Group successfully incorporated the software product Valitax, a mandatory feature for the future e-invoicing market, further enhancing its suite of solutions. This functionality will be embedded in the Banqup product offering and delivers important added value on validating indirect taxes applied on e-invoices.
This constantly evolving landscape presents numerous opportunities for Unifiedpost Group. The escalating demand for e-invoicing and e-reporting highlights the vast potential for growth across the EU. While challenges persist, they also signal the start of new partnerships and collaborations, helping Unifiedpost Group to strengthen its market position.
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Financial Calendar 2023
- 16 November 2023 Publication Q3 2023 Business Update
Contact
Laurent Marcelis
+32 477 61 81 37
Laurent.marcelis@unifiedpost.com
Interim consolidated statement of profit or loss and other comprehensive income (unaudited)
| Thousands of Euro, except per share data | For the 6-month period ended 30 June | |
| 2023 | 2022 | |
| Digital processing revenues | 65.220 | 59.260 |
| Digital processing cost of services | -38.183 | -35.557 |
| Digital processing gross profit | 27.037 | 23.703 |
| Postage & Parcel optimisation revenues | 27.941 | 32.404 |
| Postage & Parcel optimisation cost of services | -24.770 | -29.067 |
| Postage & Parcel optimisation gross profit | 3.171 | 3.337 |
| Research and development expenses | -11.321 | -7.549 |
| General and administrative expenses | -20.733 | -22.659 |
| Selling and marketing expenses | -13.899 | -14.624 |
| Other income / (expenses) | -452 | -440 |
| Profit / loss (-) from operations | -16.197 | -18.232 |
| Financial income | 88 | 245 |
| Financial expenses | -7.640 | -3.552 |
| Change in fair value of financial liabilities | - | 535 |
| Share of profit / loss (-) of associates | - | - |
| Profit / loss (-) before tax | -23.749 | -21.004 |
| Income tax | -292 | -146 |
| PROFIT / LOSS (-) FOR THE YEAR | -24.041 | -21.150 |
| Other comprehensive income / loss (-): | -1.388 | -1.971 |
| Items that will not be reclassified to profit or loss (-), net of tax: | ||
| Remeasurements of defined benefit pension obligations | - | - |
| Items that will or may be reclassified to profit or loss, net of tax: | ||
| Exchange gains / losses (-) arising on translation of foreign operations | -1.388 | -1.971 |
| TOTAL COMPREHENSIVE INCOME / LOSS (-) FOR THE YEAR | -25.429 | -23.121 |
| Profit / loss (-) is attributable to: | ||
| Owners of the parent | -24.058 | -20.760 |
| Non-controlling interests | 17 | -390 |
| Total comprehensive income / loss (-) is attributable to: | ||
| Owners of the parent | -25.446 | -22.731 |
| Non-controlling interests | 17 | -390 |
| Earnings per share attributable to the equity holders of the parent: | ||
| Basic | -0,67 | -0,61 |
| Diluted | -0,67 | -0,61 |
Interim consolidated statement of financial position (unaudited)
| Thousands of Euro | As at 30 June As at 31 December | |
| 2023 | 2022 | |
| ASSETS | ||
| Goodwill | 152.580 | 153.429 |
| Other intangible assets | 88.439 | 85.516 |
| Property and equipment | 7.741 | 8.231 |
| Right-of-use assets | 10.457 | 10.214 |
| Investments in associates | 1.875 | 1.875 |
| Non-current contract costs | 678 | 872 |
| Deferred tax assets | 760 | 462 |
| Other non-current assets | 2.165 | 1.728 |
| Non-current assets | 264.695 | 262.327 |
| Inventories | 691 | 822 |
| Trade and other receivables | 27.547 | 31.890 |
| Contract assets | 688 | 426 |
| Contract costs | 1.533 | 1.859 |
| Current tax assets | 1.030 | 705 |
| Prepaid expenses | 1.942 | 2.275 |
| Cash and cash equivalents | 24.696 | 40.033 |
| Current assets | 58.127 | 78.010 |
| TOTAL ASSETS | 322.822 | 340.337 |
| SHAREHOLDERS’ EQUITY AND LIABILITIES | ||
| Share capital | 326.806 | 326.806 |
| Costs related to equity issuance | -16.029 | -16.029 |
| Share premium reserve | 492 | 492 |
| Accumulated deficit | -172.541 | -148.497 |
| Reserve for share-based payments | 1.831 | 1.813 |
| Other reserve | -3.034 | -2.863 |
| Cumulative translation adjustment reserve | -5.101 | -3.713 |
| Equity attributable to equity holders of the parent | 132.424 | 158.009 |
| Non-controlling interests | 467 | 281 |
| Total shareholders’ equity | 132.891 | 158.290 |
| Non-current loans and borrowings | 106.904 | 97.408 |
| Liabilities associated with puttable non-controlling interests | 859 | 840 |
| Non-current lease liabilities | 6.689 | 6.438 |
| Non-current contract liabilities | 4.641 | 4.039 |
| Retirement benefit obligations | 88 | 83 |
| Deferred tax liabilities | 5.016 | 5.720 |
| Non-current liabilities | 124.197 | 114.528 |
| Current loans and borrowings | 8.611 | 6.967 |
| Current liabilities associated with puttable non-controlling interests | 7.650 | 7.670 |
| Current lease liabilities | 3.761 | 3.800 |
| Trade and other payables | 30.411 | 34.853 |
| Contract liabilities | 13.545 | 12.701 |
| Current income tax liabilities | 1.756 | 1.528 |
| Current liabilities | 65.734 | 67.519 |
| TOTAL EQUITY AND LIABILITIES | 322.822 | 340.337 |
Interim consolidated statement of changes in equity (unaudited)
| Thousands of Euro |
Share capital | Costs related to equity issuance | Share premium reserve | Accumulated deficit | Share based payments | Other reserves | Cumulative translation adjustment reserve | Non-controlling interests | Total equity | |
| Balance as at 1 January 2023 | 326.806 | -16.029 | 492 | -148.497 | 1.813 | -2.863 | -3.713 | 281 | 158.290 | |
| Result for the period |
- | - | - | -24.058 | - | - | - | 17 | -24.041 | |
| Other comprehensive income / loss (-) | - | - | - | - | - | - | -1.388 | - | -1.388 | |
| Total comprehensive income / loss (-) for the period | - | - | - | -24.058 | - | - | -1.388 | 17 | -25.429 | |
| Share-based payments | - | - | - | - | 18 | - | - | - | 18 | |
| Current year profit AND OCI of NCI with put option | - | - | - | - | - | -169 | - | 169 | - | |
| Other | - | - | - | 14 | - | -2 | - | - | 12 | |
| Balance as at 30 June 2023 | 326.806 | -16.029 | 492 | -172.541 | 1.831 | -3.034 | -5.101 | 467 | 132.891 | |
| Thousands of Euro |
Share capital | Costs related to equity issuance | Share premium reserve | Accumulated deficit | Share based payments | Other reserves | Cumulative translation adjustment reserve | Non-controlling interests | Total equity | |
| Balance as at 1 January 2022 | 309.220 | -15.926 | 492 | -101.332 | 1.545 | 2.529 | -376 | 277 | 196.429 | |
| Result for the period | - | - | - | -20.760 | - | - | - | -390 | -21.150 | |
| Other comprehensive income / loss (-) | - | - | - | - | - | - | -1.971 | - | -1.971 | |
| Total comprehensive income / loss (-) for the period | - | - | - | -20.760 | - | - | -1.971 | -390 | -23.121 | |
| Issuance of new shares | 12.756 | - | - | - | - | -3.801 | - | - | 8.955 | |
| Share-based payments | - | - | - | - | 53 | - | - | - | 53 | |
| Current year profit AND OCI of NCI with put option | - | - | - | - | - | -346 | - | 346 | - | |
| Changes in carrying value of liabilities associated with puttable NCI | - | - | - | - | - | -3.290 | - | - | -3.290 | |
| Other | - | - | - | -16 | -1 | - | - | - | -17 | |
| Balance as at 30 June 2022 | 321.976 | -15.926 | 492 | -122.108 | 1.597 | -4.908 | -2.347 | 233 | 179.009 | |
Interim consolidated statement of cash flows (unaudited)
| Thousands of Euro | For the 6-month For the 6-month period ended period ended 30 June 30 June |
|||
| 2023 | 2022 | |||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||
| Profit / loss for the year | -24.041 | -21.150 | ||
| Adjustments for: | ||||
|
10.351 | 8.994 | ||
|
746 | 757 | ||
|
2.162 | 2.002 | ||
|
35 | 105 | ||
|
-25 | - | ||
|
-87 | -245 | ||
|
7.640 | 3.552 | ||
|
- | -535 | ||
|
292 | 146 | ||
|
18 | 53 | ||
| Subtotal | -2.909 | -6.321 | ||
| Changes in Working Capital | ||||
|
4.566 | -243 | ||
|
-141 | -237 | ||
|
131 | -302 | ||
|
-2.561 | -6.023 | ||
| Cash generated from / used in (-) operations | -914 | -13.126 | ||
| Income taxes paid | -1.592 | -1.260 | ||
| Net cash provided by / used in (-) operating activities | -2.506 | -14.386 | ||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||
| Payments made for purchase of intangibles and development expenses | -9.050 | -10.359 | ||
| Proceeds from the disposals of intangibles and development expenses | - | 1 | ||
| Payments made for purchase of property, plant & equipment | -344 | -1.237 | ||
| Proceeds from the disposals of property, plant & equipment | 94 | 14 | ||
| Interest received | 87 | 56 | ||
| Net cash provided by / used in (-) investing activities | -9.213 | -11.525 | ||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||
| Issue of ordinary shares | - | 12.756 | ||
| Proceeds from loans and borrowings | 5.752 | 63.360 | ||
| Repayments of loans and borrowings | -4.762 | -21.696 | ||
| Repayment of lease liabilities | -2.373 | -2.252 | ||
| Interest paid on loans, borrowings and leasings | -2.235 | -563 | ||
| Net cash provided by / used in (-) financing activities | -3.618 | 51.605 | ||
| Effect of exchange rate changes | - | - | ||
| Net increase / decrease (-) in cash & cash equivalents | -15.337 | 25.694 | ||
| Cash and cash equivalents at beginning of period | 40.033 | 16.970 | ||
| Cash and cash equivalents at end of period | 24.696 | 42.664 | ||
About Unifiedpost Group
Unifiedpost is a leading cloud-based platform for SME business services built on “Documents”, “Identity” and “Payments”. Unifiedpost operates and develops a 100% cloud-based platform for administrative and financial services that allows real-time and seamless connections between Unifiedpost’s customers, their suppliers, their customers, and other parties along the financial value chain. With its one-stop-shop solutions, Unifiedpost’s mission is to make administrative and financial processes simple and smart for its customers. Since its founding in 2001, Unifiedpost has grown significantly, expanding to offices in 32 countries, with more than 500 million documents processed in 2021, reaching over 1.600.000 SMEs and more than 2.500 Corporates across its platform today.
Noteworthy facts and figures:
- Established in 2001, with a proven track record
- 2022 turnover €191 million
- 1300+ employees
- Diverse portfolio of clients across a wide variety of industries (banking, leasing, utilities, media, telecommunications, travel, social security service providers, public organisations, etc.) ranging from large internationals to SMEs
- Unifiedpost Payments, a fully owned subsidiary, is recognised as a payment institution by the National Bank of Belgium
- Certified Swift partner
- International M&A track record
- Listed on the regulated market of Euronext Brussels, symbol: UPG
(*) Warning about future statements: The statements contained herein may contain forecasts, future expectations, opinions and other future-oriented statements concerning the expected further performance of Unifiedpost Group on the markets in which it is active. Such future-oriented statements are based on the current insights and assumptions of management concerning future events. They naturally include known and unknown risks, uncertainties and other factors, which seem justified at the time that the statements are made but may possibly turn out to be inaccurate. The actual results, performance or events may differ essentially
from the results, performance or events which are expressed or implied in such future-oriented statements. Except where required by the applicable legislation, Unifiedpost Group shall assume no obligation to update, elucidate or improve future-oriented statements in this press release in the light of new information, future events or other elements and shall not be held liable on that account. The reader is warned not to rely unduly on future-oriented statements.
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