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HPS / FINANCIAL COMMUNICATION HALF - YEAR RESULTS / 2021 Casablanca - September 24 , 2021 Highlights ▸ Recurring revenues of 245 MMAD , up 20.0 % ▸ Overall revenues of 392 MMAD , up 8.5 % ▸ EBITDA up by 6.3 % and EBITDA margin at 21.1 % ▸ Acquisition of ICPS and IPRC with a full year revenue contribution of 100 MMAD << Despite the still fragile economic environment , we had a solid first half with growth of 8.5 % , in line with our expectations . This increase continues to be based on our ability to generate organic growth , but has also been accelerated in 2021 with the acquisitions of ICPS and IPRC . In this context , it is encouraging to see that our backlog and pipeline continue to strengthen and that our stream revenue continues its strong upward trend . » Mr. Mohamed HORANI - HPS Group's Chairman The Board of Directors of HPS met on September 22 , 2021 under the chairmanship of Mr. Mohamed HORANI to review the company's activity and approve the financial statements as of June 30 , 2021 . Activity Analysis Global Revenues During this first half of 2021 , HPS maintained its growth and development momentum , with revenues at 392.4 MMAD , up 8.5 % compared to the same half - year period of 2020. This growth is explained mainly by the following elements : - Organic growth at constant exchange rates of 6.1 % - External growth generated by acquisitions of 7.4 % - Impact of the decline in the US dollar , which reduced revenues by 5.5 % In analytical terms , the Group's growth is as follows : - A very solid growth in the Processing activity : + 140 % - A slight decline in the Solutions activity : -4.4 % - A decline in the Services activity : -7.7 % Processing Activity At the end of the first half of 2021 , the Processing activity continued to record very strong growth , reaching 89.9 MMAD , i.e. 25 % of the Group's total turnover . This growth is explained by : - the Payment activity grew by 139 % with the start - up of new African subsidiaries of the Société Générale Group , as well as the start - up of new customers in Europe , Africa and the Middle East ; the Switching activity grew by 26 % as the Moroccan market went back to normal after a strict confinement in the Q2 ; - the integration of the IPRC and ICPS activities , which will generate an additional 68 % growth in the Group's Processing activity compared to the first half of 2020 . The strong development of the Processing activity has strengthened the Group's recurring revenues - up 20 % compared to H1 2020 to 62.5 % of the Group revenues . Solutions Activity At constant exchange rates , the Solutions activity recorded a 3.1 % growth compared to the first half of 2020 to reach 246 MMAD . The 8.2 % fall in the US dollar exchange rate between June 2020 and June 2021 impacted Solutions revenues by 18 MMAD , representing a slight decline in activity of 4.4 % ( including the currency impact ) . The first half of the year was also marked by a strong recovery in Sales activity and a strengthening of the pipeline . However , the finalization of certain strategic projects was delayed due to the constraints imposed by the global health crisis . Services Activity Services activity is showing a gradual improvement in its performance , particularly in the second quarter , following the easing of restrictive measures in France . Revenues decline was thus narrowed to 7.7 % , with the implementation of significant synergies with the Group's other activities . External Growth As part of its external growth strategy , HPS secured two major acquisitions ( ICPS and IPRC ) , which will reinforce the Processing activity by consolidating the activities of ICPS and HPS on the one hand , and by adding new supervision services ( ATM and Fraud ) to IPRC on the other . With these acquisitions , HPS is now positioned as a major player in the African Processing segment . Increased R & D Efforts Around PowerCARD Version 4 In line with its objectives , HPS has accelerated its R & D efforts in 2021 , in particular the development of version 4 of PowerCARD . For the first half of the year , R & D investments amounted to 57.2 MMAD , up 17.7 % compared with the first half of 2020. Version 4 was presented at the Users Meeting held in May of this year . EBITDA , Operating Income and Net Income EBITDA increased by 6.3 % to 82.6 MMAD at the end of June 2021. The EBITDA margin stood at 21.1 % in the first half of 2021 compared with 21.5 % in the first half of 2020. This evolution is mainly due to : -The increase in subcontracting to cope with the decrease in recruitment during the confinement and teleworking phase ; -The increase in R & D efforts , which amounted to 14.6 % of consolidated revenues compared with 13.4 % in the first half of 2020 ; - Unfavorable fluctuations in exchange rates , which impacted revenues by 20 MMAD , while 2 MMAD were gained on operating expenses , mainly in foreign currency . At constant exchange rates , EBITDA would have amounted to 101 MMAD and the EBITDA margin would have been of 24.4 % . Operating Income amounted to 58.8 MMAD , down 4.5 % , generating an Operating Margin of 15.0 % . This trend is primarily due to the increase in depreciation and amortization charges due to the change in the scope of consolidation ( ICPS and IPRC ) . At constant exchange rate , the Operating Income amounted to 77 MMAD ( up 25 % ) , and an Operating Margin of 18.6 % . Net income amounted to 36.8 MMAD , down 25.5 % compared with the first half of 2020. Partly due to the factors that influence the operating indicators , ( Operating Income and EBITDA ) , the decline in Net Income can also be explained by : - Financial expenses have risen as a result of an increase in bank loans used to partially fund external growth operations ; -The full consolidation of ICPS has resulted in a decline in the share of companies ' results that are accounted for using the equity method ; -The increase in goodwill amortization due to the amortization of the goodwill of ICPS and IPRC .