Fawry Releases 9M2024 Results

Fawry (the “Company”, FWRY.CA on the Egyptian Exchange), Egypt’s leading provider of e-payments and digital finance solutions, announced today its consolidated results for the quarter ended 30 September 2024. The Company booked revenues of EGP 3,845.2 million in 9M2024, up by 65.9% year-on-year (y-o-y). Strong top-line performance was driven by the expansion and diversification of the Company’s business offerings, which alongside effective cost control measures resulted in robust profitability margins leading to a net profit growth of 127.4% to reach EGP 1,106.6 million. Net profit for the quarter stood at EGP 477.8 million, up by an impressive 134.8% y-o-y yielding an associated net profit margin (NPM) of 30.9%.

Record breaking results across all financial KPIs
Fawry continues to surpass expectations, achieving outstanding growth with year-over-year revenue increases of 65.9% for 9M2024 and 77.0% for 3Q2024. Bottom-line growth has been even more impressive, with profits rising by 127.4% y-o-y for 9M2024 and 134.8% for 3Q2024. This performance reflects the highest EBITDA and net income margins since the company’s inception, driven by Fawry’s success in diversifying revenue streams and effectively leveraging its infrastructure and client base.

Financial & Operational Highlights
• Throughput value maintained its upward momentum, up 72.2% year-on-year to EGP 418.6 billion in 9M2024, supported by the company’s ability to broaden its portfolio to address a diverse user base in Egypt.
• Fawry’s top-line increased by 65.9% year-on-year, marking its highest growth rate since 2015, reaching EGP 3,845.2 million in 9M2024. While for 3Q2024, topline year-on-year growth recorded a whopping 77.0%. This robust performance was driven by strong results across the company’s business lines.
• The ADP segment experienced substantial year-on-year growth of 33.8%, fueled by the continuous addition of new billers, expansion of Point of Sale (POS) services, increased engagement with customers and merchants, and a rise in average ticket sizes driven by price increases in select industries. Despite this growth, ADP’s contribution decreased to 32.4% in 9M2024 from 40.2% in 9M2023 as other revenue streams continued to grow.
• As a testament for the company’s success in its revenue diversification strategy, Banking services saw revenues increase by 81.8% year-on-year, financial services surged by 130.5% year-on-year, supply chain solutions experienced a notable year-on-year increase of 57.0%, and the technology and other sectors grew by 52.4% year-on-year.
• EBITDA more than doubled in 9M2024 to EGP 1,879.4 million, reaching an EBITDA margin of 48.9%, with an EBITDA margin expansion of 9.5 ppts year over year, reflecting the company’s success in growing its revenue streams while capitalizing on service synergy and improving operational cost efficiency. It is worth mentioning that the EBITDA margin has gone up by 20.5% vs. 9M2022.
• Fawry’s bottom-line increased by an impressive 127.4% year-on-year to EGP 1,106.5 million in 9M2024, reflecting both revenue growth and EBITDA margin enhancement.

Chief Executive’s Review
I am excited to report our 3Q2024 results, where we once again exceeded market expectations, delivering record-breaking growth across both the top and bottom lines. Our continued success comes as we expand and develop our offerings across diverse verticals, advancing our long-term strategy for value creation and revenue diversification.

Overall, Fawry’s top-line recorded a solid 77.0% year-on-year increase in 3Q2024, while profitability remained robust with an impressive EBITDA margin of 51.9% (+10.0 points) the highest since the company’s inception, and bottom-line growth of 134.8%, with an associated margin enhancement of 7.6 percentage points to 30.9%, again the highest since the company’s inception. This was achieved despite the challenging macroeconomic environment – characterized by soaring inflation, interest rate hikes, and supply chain disruption, through rigorous cost control measures and a synergistic approach to business development.

Expanding our offerings to MSMEs, larger corporates, and banks, our Banking Services division was the primary driver of top-line growth, with revenue doubling year-over-year in 3Q2024, underscoring our commitment to diversifying revenue streams. Our Supply Chain Solutions division also saw a 42.5% increase in revenue, marking our transformation into an ecosystem with a broad range of value-added services.

In our financial services for MSMEs and consumers, we are reaping the rewards of our neobanking expansion, with this nascent venture generating a substantial 159.5% year-on-year increase in financial services revenue in 3Q2024. This success follows the launch of our new SME lending business and the Overdraft (BNPL for Business) product in 2024, which led to a 97.8% increase in the MSME gross loan portfolio, now totaling EGP 1.7 billion. On the consumer side, the BNPL gross loan portfolio reached EGP 653 million as of 30 September 2024, with cumulative disbursements exceeding EGP 1 billion by the end of September. This growth is supported by the expanding capabilities of the myFawry app, which serves as a comprehensive platform for bill payments, promotions, and a range of services, achieving an annualized throughput increase of 186.8% year-on-year to EGP 19.2 billion. This surge is further bolstered by the integration of the Prepaid Card, BNPL services, and the Money Market Fund “Fawry Yawmy,” as well as the recent addition of Emergency and Medical insurance options on the card and app. This strategic shift enables us to provide users with an expansive suite of financial services covering payments, lending, savings, and investments.

Our Alternative Digital Payments segment demonstrated solid year-on-year growth of 37.9%, highlighting its crucial role as the foundation of our interconnected platform and maturing alongside our other expanding business lines.

Operationally, Fawry delivered exceptional performance in 3Q2024, with mobile wallet transactions up by 54.1% year-on-year and total processed value via mobile wallets more than tripling to EGP 152.9 billion.

Additionally, we recently announced that our fully in-house developed Soft POS solution, “Tap N Pay,” has successfully completed the MPoC certification cycle, making Fawry the first company in the MENA region and the 10th globally to achieve both CPoC and MPoC certifications. This dual certification enhances our capability to provide secure, compliant, and cutting-edge payment solutions in the MENA region. Holding both certifications underscores our commitment to the highest standards of contactless payment security.

Looking ahead, we remain focused on building a multi-sided platform that facilitates seamless interactions across our network. Through ongoing innovation and service expansion, we are addressing the diverse needs of our customer base and furthering financial inclusion by reaching Egypt’s unbanked and underserved communities.