Banqup Group (BANQ) Q2 2026 Earnings Call Transcript

thank you good morning everyone and welcome to the 2026 half-year financial results webcast of bank group group thank you for joining us online today my name is david helen and i am head of investor relations at bank to walk you through the half-year results i am joined by our ceo and cfo koende brabander along with key operational leaders driving our business unit structure Jan Drupal, leading our Documents Business Unit, and Anouk Arendt, leading our Payments Business Unit. Before we move on, I would like to draw your attention to the forward-looking statement disclaimer on slide two of the presentation, which is available on our Investor Relations website. I assume you had the opportunity to review. About today's agenda, Kuhn will open with a number of introductory remarks, followed by brief operational updates by our business unit leaders. Next, Kuhn will walk you through the financials and close the presentation before we open the floor for Q&A. You can submit your questions via the webcast Q&A input. Today's press release, presentation deck, and replay of this webcast are available on our Investor Relations website at investors.bankclub.com. With that being said, I give the floor to Kunde Brahmannert.

Thank you, David, for your introduction and welcome. I'm very pleased to have you supporting us on all investor relation matters going forward. Thank you all for joining this webcast and this call where we will try to explain evolution at BankUp Group. A lot has changed since our last webcast. You will already have noticed this through our recent press releases. And of course, it will become even more clear through the presentation we share with you today. So a very logical question is, why have we changed vision and approach? And what does this mean for BankUp and ultimately for investors and shareholders? I do not want to spend too much time looking backwards or reflecting on what might have been done differently. With hindsight, it is always easy to identify things that could have been improved, but I believe that is neither constructive nor respectful to many colleagues who have worked hard to build BankUp over the past years. I would therefore first like to recognize and thank all of them for their commitment and contribution. What we are doing now is looking forward. Following a comprehensive 360 degree strategic analysis, the board has concluded that we need to take the next step in the evolution of the group by organizing the business more clearly around its key business functions and importantly by giving each business unit greater autonomy and accountability. This means creating a clearer focus around product development, customer acquisition and customer support within each business unit. At the same time, we are adapting our governance model accordingly. Each business unit needs to have the appropriate level of operational autonomy, while an executive committee will provide the overall group perspective, ensure alignment across the businesses, and drive decisions where they have an impact across the group. the reason for this approach is quite straightforward we have learned that the business in which we are operate documents payments consult including business to governments are fundamentally different in a number of important aspects they require different technical expertise and know-how they have different go-to-market models they have different scaling potential and they have different capital and financing requirements this means for us that a one-size-fits-all management approach is no longer the most effective way to develop these businesses instead we need to create the right conditions for each business to grow and perform according to its own characteristics this evolution towards more autonomous business units has several important consequences first the product strategy needs to reflect the specific requirements and capabilities of each business. Second, the operational priorities and management focus can, will be different for each business unit. Third, the go-to-market strategy needs to be tailored to the specific market dynamics and customer propositions of each business unit. and finally we need to recognize that european markets are evolving at different speeds different countries are implementing different components of our product suite in different formats and different points in time as a result we need to be much more agile in the way we steer and develop the business. This is why we are moving towards clearer business units accountability, supported by agile steering structures that can respond to the specific evolution of each business and each market. Ultimately, this is about one thing, creating a simpler, more focused and more accountable organization that can execute faster and allocate its resources more effectively. And I believe this is an important step in positioning BankUp for sustainable growth and importantly for creating value for our shareholders. Let me now say a few words about the extended executive team. One of the strengths of this team is the depth, the in-depth or the depth of experience it brings to the organization. the members of the team have long and proven track records in their respective areas of expertise combined with in-depth knowledge of the market products for those leading our business activities and strong professional expertise for those responsible for key back office functions and just to avoid misunderstanding when you look at the numbers next to each person on the slide These numbers are not their ages, fortunately, or perhaps unfortunately, depending on how you look at it. They represent the number of years of professional experience they bring to BankUp. You will also notice that three of our four business units are represented within the central management team. However, I would not want to overlook our four businesses, our B2G business and e-invoicing activities in the Balkan, who are managing and developing their business locally. This business is organized through separate legal entities and operates across specific jurisdictions, which requires a somewhat different governance approach. Matthias Barth and I are therefore closely following the evolution of this business and will remain directly involved in key strategic decisions and priorities going forward. Let me now briefly bring the key priorities and the short term of the newly installed executive team. The short term goals of the newly installed executive team. We have a clear focus, and we are translating that focus into action across four areas. Market, company, liquidity, and transformation. First on the market side, France is our immediate strategic launchpad. We have built a strong position ahead of the upcoming e-invoicing mandate, with around already 150k enterprises onboarded, ready for accepting e-invoices from 8,000 potential e-invoice customers. Jan will tell you more about this. This gives us a strong basis to demonstrate that our new operating model works at scale, before expanding further into other key European markets, such as Germany. At the same time, we continue to benefit from the Belgian mandate, which is already supporting digital adoption. Second, we are simplifying the company itself. We are moving towards a much flatter organization, with clear ownership and accountability. We are putting the customer much more explicitly at the center of everything we do, while at the same time increasing product discipline and focusing on development efforts on the core BankUp platform. third liquidity remains a key management priority we continue to manage cash very tightly with continuous cash flow monitoring and strong focus on working capital and portfolio optimization the divestments we have completed together with the continued support of our senior lenders have helped controlling our liquidity position and extend our runway. And finally, transformation. We are moving towards a more decentralized operating model with clearly defined business units and dedicated leadership. Each division will have a clear P&L, responsibility, and the ability to execute according its own market dynamics. This creates much greater accountability while allowing us to distinguish clearly between our core digital platform activities and our professional consulting services. So, taking together these four priorities are about one thing. creating a simpler more focused more disciplined organization that can execute faster and convert the significant market opportunity ahead of us into sustainable digital growth now i give the floor to jan drippel who will explain more about business developments within our document business.

Jan, the floor is yours. Thank you, Kuhn. So, first of all, the scope of what we're doing in the documents division. Today, what we're doing is, in a way, enabling automation of purchase-to-pay order-to-cash and cross-border e-invoicing through an API-first platform. That's That's basically our core business in the documents division. What we're trying to do is, and what we are bringing to the table, is turning key administrative friction into connected automated workflows. That's basically the core of our documents platform with a clear strategic focus. We want to position BankUp as a solution for upcoming mandatory European regulation on b2b invoicing and e-reporting mandates and this includes tax validation today what we're seeing is that everybody's talking about formats of electronic invoices and really the question of tomorrow and the problem of tomorrow is going to be everything to do with data so we are focusing today on multicultural country scalability and effortless integration with all the systems we can connect to such as erp accounting networks etc now giving you some insights into the key commercial milestones and strategic wins first of all of course there's the french market we had the launch of the mandate for electronic invoicing end of 25 beginning 26 and now we are preparing for the french mandate which will kick off in a couple of days today we are at the situation where we onboarded 150,000 businesses through 4,700 accounting firms who are our natural partners on the Jefacture platform and 100, little over 100 technology partners. They are all ready to accept, because this is step one in the French mandate, they're all ready to accept electronic invoices in September 26. second important win and it's really an important one is the tax automation partnerships and the tax validation partnerships so in the past months we signed two partnerships for rolling out the tax validation engine and the tax validation engine has today capabilities in more than 40 countries important one it includes france and it also includes the dom-tom areas french dom-tom areas who have slightly different tax regulation in place a third important win is the partnership we have signed with austrian post so basically what we're going to do in austria is give smes and corporate structures the possibility to send out electronic invoices to other countries why is it an important one well as you all know we are also preparing for the german mandate of electronic invoicing which is quite a liberal a liberal mandate in a way because you are able to receive your electronic invoices via email there is not yet been a german platform that has been identified And why is the Austrian Post partnership really important? Because it will give the SMEs and corporate structures the possibility to deliver their invoices to their German customers in the correct format that is expected by the German mandate. So we're talking about Zugwert and we're talking about E-Rechnung. So Austrian Post is for us an important partnership that has been signed during the first semester. Operational focus, I think we need to have a clear and very strict operational focus that is really driven by the regulatory tailwind. So we know in Belgium, the mandate has kicked off. Today, more than 90% of all businesses in Belgium are using electronic invoicing in their B2B transactions. What will come next? Well, first of all, there is now a legislation in place for the PEPL access point who need an ISO certification. We have upcoming ADAS 2.0 regulation that is going to be implemented in Europe and something new called the business wallet. And this will have huge impact on the current more than 400 active vendors in the Belgian space, just in Belgium. So these are really the elements. ESO certification for PEPL access points will be mandatory as from July 1st, 2027. And the Belgian government has released or is planning to have e-reporting implemented by January 1st, 2028. Now, legislation is still following its process. Technical specs have not been released, but clearly, this is something that will impact the Belgian market in the years to come. France, so we said we have the mandate kicking off in a couple of days. So really, today, there's only about 8,000 companies in France, so the really big corporate structures that have the obligation to send out their invoices to their B2B customers in an electronic way. The big bang, in a way, if you want, is going to come in September 27, where at that time, all businesses, so even the small ones, will have to send out their B2B invoices in an electronic format. So it's going to be a year, more or less, that France is going to go through this process. We're also preparing for Spain. We have the verifactual e-reporting obligation that is going to become effective in January 27. And then you will have the mandatory e-invoicing for all companies in October 27, described by the Le Crea a Crece. so this is an upcoming regulation change in Spain and then finally Germany also very important market for our company so Germany you today you have the obligation in Germany to be able as a company to be able to receive your electronic invoices in a structured format in an electronic way so this is ongoing again it's a very liberal market Communications has been done recently by the German government where they are specific on one thing, and it's the e-reporting part. They have clearly identified that they are going to use the data from the e-reporting in combination with AI to do everything they can to avoid and to detect fraud on invoicing levels, VAT fraud, etc. So these are really, for the documents division, the main drivers for the months to come. So Anouk, I'll let you take the floor for payments.

Thank you, Jan. Good morning, everyone. I want to give you a summarize on the structure and strategy we will follow with the payment. we are now independent and that means that we can we will be able to support Jan and all the country where Jan is developing the document part to add payment as a part of the business to make sure that SMEs are able to pay their invoices in euro and non-euro with our visa partnership and on the second part of the business now that we are independent we are leveraged the fact that we have a license we are able to be an acquirer for bank contact visa mastercard i want to approach new business like post business e-com business and be able to support sme everywhere every time and give them a clear view on the financial situation. We want to be a partner of SME, but also the fact that our company decided in the past to have everything that we offer to our customer API-based, we are able to find partners that need also to have embedded payment solution for their customer. This, we will have the dual strategy. my focus today is really to refocus back to the basic and sell what we have with a very clear approach on the market and then on the other part in the payment business unit we have trust and identity still not sure about the name but i call it today like that it's the business wallet like Like Jan was telling, it's becoming very important on the EU regulation. And since, I think, three or four weeks, we have as first the certificate for QTSP that will give the possibility also to the colleagues of documents to seal e-invoicing in the future.

That's in a nutshell what we will do with the payment team, very focusing on growing on the market thank you and i give the word back to david thank you kun for the insights into the business unit structure and thank you anuk and jan for the introduction an operational overview of the payments and documents business unit can you as cfo give us an overview of the financials thank you david again so now i will debrief as usually i did in the past in my role as CFO of this group.

Let me briefly walk over the key financials. I think the nine tiles here on the screen, they are self-explanatory. And sure, you overlook them even faster than I can comment them. Total revenue amounts to $26.5 million for the first half, representing 21.1 million that came from recurring digital revenue or digital services the strongest growth was in subscription revenue which increased by 40.42.3 percent year on year to 10.4 million this continued growth is also reflected in our recurring revenue base with ARR already reaching 48.2 million at the end of June, representing a growth of 12.1% compared to June 2025. And this is mainly driven by the mandate in the Belgian market and is not yet considering the growth of our French opportunity, as Jan explained, which will launch from September onwards. On profitability, our adjusted EBDA amounted to a negative of 6.1 million. We incurred 1.4 million of non-recurring costs during the first half related to the actions we are taking to reshape and simplify the organization and the management change. At the end of June, the net financial debt position stood at 46.1 million while we still have a capex level of 8.1 million for the first half reflecting continued investment in our digital platform and the regular regulatory requirements that are installed by different governments as previously announced we expect a decreasing number of capex for the coming future as the e-invoice product reaches a mature position capex and payments will still be maintained at current level and finally our total workforce stood at 632 fdes at the end of june so in summary the key financials messages for h1 or strong subscription growth continued growth in our recurring digital revenue base and continued focus on profitability liquidity and disciplined investment as already said the non-recurring costs amount to 1.4 million related to divestments and transformation exercise the opex exclusive these non-recurring costs increased by 4.8 percent i think i can go here year on year that's 1.4 million mainly driven by higher depreciations of own development costs due to the release of the btx platform in q4 2025 btx platform is the banker platform we are using in the budget market and as and also for jeffactu.com in the french market The cash spent increased with less than 2%, which is a positive evolution, but which needs to show further decrease in the second half of this year. In-depth cost management is installed and discussed during weekly ex-co meeting to assure the further decrease. A clear internal ambition and target is defined for Q4 2026. In H1, the group employed an average of 527 indirect FTEs. So I just spoke about 632 FTEs in total. Nearly 90 persons are dealing with our direct operating activities, so are classified under the line gross margin or cost of service. 522 are dealing with our indirect staff which is mainly or which is for a big portion r&d staff and general and administrative staff and sales and marketing within capex we maintain a document focus on belgian and french markets requirements for accountants and the user experience for our accountants. Within payment, we did quite a lot of investment in the trust component, as Anouk already explained, for which we are certified since June 2026 as the first one in Europe. Looking at cash flow positions, equity and net financial debt, which is also an important or important graphs we are following closely our operating cash flow amounts to minus 6.4 compensated by working capital elements of 0.4 million positive some a small amount in income tax due and one of non-recurring restructuring costs of 1.4 million so the operating cash flow minus 6.4 million cash flow from investments is a positive of 3.3 million it reflects the divestment we have done and realized in March 2026 regarding the Baltic business it reflects also the cash in from an escrow account that was linked to the transaction with 21 grams we have realized also in 25 and an escrow account needed to be released so those two components were supportive for 11.4 million in our cash flows and we spent asset already 1.8 million in our current capix level mainly the intangible asset and finally cash flow from financing activities is a minus 0.7 related to repayment of loans and leasings for 10.8 million but also we collected on the other hand 10.7 million mainly shareholders loans for 8 million and funding from bnp bank of 2 million and we paid of course our net interests or our interest to our funding partners so the The available cash position end of Q2 is 5 million compared to 8.6 million end of December 25. Equity position is evolving considering the loss of the period including the continued and discontinued business. And then the net financial debt position is presented as the level of $46.1 million, which is mainly coming from the senior facility from Francisco Partner for an amount of $32.7 million, different bank borrowings of $3.8 million, and the newly shareholder loan of $8 million, inclusive accrued interest $8.3 million.

Thank you, Koum, for the financial overview. Kun, as a CEO, can you look ahead and tell us what we need to remember of this presentation?

It's always good in such a presentation to focus on the takeaways, what should you take away from this presentation and looking forward. Today we can say that management believes based on the impact of the transformation we are working on on the one hand and the french market expectations as a second component that we can still maintain our guidance as announced at start of year so i think this is a message of confidence we are sharing with the market and then my three takeaways I think it's very important to, yeah, to keep them in mind is BankUp is evolving. And the first one for me is we are just in front of launching the French market. Jan clearly explained this. We were dealing with that French market now for many years and announced it for many years, but it's now tomorrow. so this is a very important moment and the company and the teams are really focused and I have to thank them for their focus and commitment and dedication but we are as management team together with the staff we are focused on launching the French market that's a very important element second point I would like to stress is you have understood we are working on an operational transformation of this company we are clearly setting up the different business units with autonomy autonomy in its functions and I mean functions such as sales customer support product development and of course these business units should all business units should also operate autonomous in its financial working and the third point and this is clear the company yeah worked on it since many since long time but we have to we should be disciplined and even more disciplined in our financial management in our cost structure cost efficiency and in our capital management and that is where the executive committee is committed to to work on it and yeah to realize evolution positive evolution by year end so thank you for listening and i give the floor back to david who will coordinate now the q a and um yeah thank you kuhn thank you david which questions we have we have a couple of questions uh first question can you deep dive in the french market um and indicate what this would mean for bank group i think you can tackle okay so uh yes so in a matter uh in in briefly uh what we have today like i said we have the mandate

that makes more or less 8 000 company uh we'll have to send out their electronic their invoices in a b2b market in an electronic way so that's stage one uh in january what what we know and And what we see, what we've seen also in Belgium is that today, and we have more or less 3 million companies that have registered with one of the more than 100 PAs that have a temporary recognition as a platform agri in France. So this is stage one. Companies have to be able to receive these invoices. Don't forget the invoice format. The format in France is FactureX. It's kind of a PDF document with the metadata attached to the document permitting automatic processing. So this is stage one. Now stage two, which will happen in January 27, will also bring this obligation to what we call the ETI in France. So it's the intermediate companies. They will also have to send out their invoices in B2B transactions electronically. And then finally, in September 27, so next year, you will have the mandate and the obligation for all companies to send out their invoices, B2B transactions in an electronic way. What we've seen in the past, and we've seen this in other countries, we've seen this in Belgium, we've seen it in other European countries where you have a mandate for electronic invoicing, is that the majority and a large part of the market is going to make a choice of a platform at the very last moment. In France, in the month of august traditionally is the holiday month so in august things have slowed down a little bit uh but we expect a further pull of the market uh in going to happen in september 2026 so in the coming month uh and we we really hope to to go a lot further still uh on the number of subscriptions that we have we expect to grow um the next part is of course the e-reporting uh so today we're talking about formats of electronic invoicing tomorrow we will talk about data quality data consistency and as we know the french market is going to be crucial they have a very extended regulation that's put in place and one of the things now is going to be how about the content of the invoices how about the data quality how about the taxes that have been calculated so we're is really going to undergo a major change in the French market. Again, in total, we have about 6.2, 6.3 million companies that are going to be impacted, and we're only a little bit over half at this stage. So, a big chunk of the market is still to come.

Thank you, Jan. Next question. We see a continued level of investments in your payment business.

Will that be maintained at the same level? i will take this one maybe yes uh at the moment we are looking into all this investment that we are doing and we know from the past that the investment was big but we have to invest also in qtsp and in trust and identity but that level of big investment will be on a run rate as from now because we have the certificated and on the payment the level of investment is there but we will compensate by growing the level of transaction to make sure that we will reimburse the investment. Thank you David.

Exploring the next question. Exploring the German market would be next.

So what are the steps to take? that's for you yeah so in in germany you already have part of the mandate uh so companies are uh are obligated to be able to receive electronic invoices in a couple of formats so so you have this mandate now how there's one major difference with what we're seeing in france and what we're seeing in belgium the difference is that there is no official governmental platform today the government has communicated about it there will be a platform PEPL is growing in Germany but it's still only a small part of the market of course in Germany you also have a lot of EDI invoicing with the automotive sector that's very big in Germany the government has now discussed and has now communicated on the e-reporting part and what we're seeing and this is quite interesting is that they've already communicated that all the data will need to be hosted on German territory. So it's a kind of a, when I make the comparison with France, what you're seeing, France has a second cloud. One of the components is that the data has to be stored on French territory. You're seeing the same thing in Germany now. So this is clearly becoming a trend. We will have to prepare for this. So you will have separate instances for the German market, but that's okay because we built this experience in france so it's not really a problem i think for me uh germany is really going to focus on everything that has to do with fraud detection fraud prevention they're going to use the data of the e-reporting from the invoices they're going to use it they're going to apply ai they've communicated on this and they will actually have strong controls on everything to do with tax validation is the tax correct so really we we are seeing in in all of these countries that they are creating in a way the digital highway uh but tomorrow the question will be is is everybody that is driving on this digital highway are they really content wise are they correct is is the data that they're sending to each other is it correct is the reporting correct How is the comparison going to be with the traditional VAT returns? We've already seen in Belgium that with the introduction of e-invoicing, the annual VAT listing will disappear. So we're going really, we're moving towards diminishing the administrative burden, and we're going to automated controls, thanks to the e-reporting and the e-invoicing mandate. So Germany clearly is very high on our radar. are we have a mandate coming up now in january 1st still a very liberal market delivery of invoices through email and clearly the direction of the control of e-reporting that's going to happen in the years ago okay thank you jan next question is for you kun um looking at the cash burn in the first half year and available cash at hand do you feel you have sufficient liquidity to implement your business model and growth targets?

Thank you, David. Yeah, I could have expected this question. Yes, we are confident. We have received the support of our senior lender, Francisco Partners. We have a clear transformation plan. As said, we are really focused on realizing that plan. and that plan brings the company into a situation where we we already discussed previously i know that but we we will will bring the company in a cash break-even situation and the support of francisco partners and the relationship is very constructive the support of francisco partners gives us that runway to realize that process and that project so this goes hand in hand with the plans we have and of course we shared these plans with our senior lender thank you another one for you how is the proposed restructure going to be different from the previous structure yeah well how will it be different you refer to previous restructuring are we talking about restructuring and to my belief we are structuring the company in its different components as explained at start and I clearly said why we are doing that I really believe that payment business document business consult business they have different business drivers and that is potentially the difference I give now autonomy to the people left and right of from my side they steer document business payment business respectively they know the business yeah from their long history and from their long experience they have they know the markets so we are clearly listening to these and using the experience we have and I think from management committee we are really believing that this is the right way to go we should listen to our customers adapt the products to what customers are expecting from us and that will bring revenue and it's all about revenue revenue is cash cash is helping the company forward so is it different in some way yes in another way i think we are on the right track the products are there the assets are there we should make them valuable And that is the focus we have, potentially a bit different, but we are really focused. Jan is focused on his document business. Anouk is focused on payment business. And we have not mentioned, but Christophe is focused, Christophe Seu, part of the management team, is focused on driving a consult business. Consult business in itself is, again, different from a product, document, and payments. It is people business and people business that does mean that Christophe is focused on selling number of mandates and selling them at a correct rate and make sure that the team who is available for these kind of jobs are productive, billable, sufficiently billable to show up correct income statement. And I said, each of these people are responsible for their own P&L, so that makes them accountable. Potentially, this is different than what we did in the past. I leave it to all of you to take decision, but that is where we are focused on, and I really believe in that focus.

Right, thank you Kun. One last question, also for you Kun. Could you give more information on the strategic review that has been announced, supported by Lazar?

You refer to the press release we have shared with the external markets in, I think, beginning of June. This process is ongoing. I think I cannot share much more at this moment about it I said it is ongoing and as soon as well news can be after the board has taken correct decisions in the process so as soon as the board has taken decisions we have a clear picture or we envision new points that can be shared with the market of course i will take immediate action to inform the market about it but today i can't say more we are a listed company this is uh forward looking and i know that the process

is ongoing at this moment so i let the process going as it works okay that's clear thank you that concludes the bank of group half year financial results webcast as always feel free to contact me if you have any questions or if any of your questions were not answered during this q a thank you anuk thank you jan and thank you koon thank you for joining us online and enjoy the rest of your week