08 March 2021, 07:00

Source - LSE Regulatory

RNS Number : 4066R

Network International Holdings PLC

08 March 2021

Network International Holdings Plc, 8^th March 2021

Preliminary Results for the twelve months ending 31 December 2020

Strongly positioned across our rapidly accelerating digital payments markets

Group financial summary

(USD '000)	FY 2020	FY 2019	y/y change
Revenue¹	284,844	335,379	(15.1)%
Underlying EBITDA^1,2	112,561	168,522	(33.2)%
Underlying EBITDA margin² (excl. share of associate)	36.1%	47.4%	(11.3) pp
Profit from continuing operations¹	5,598	57,317	(90.2)%
Underlying free cash flow^1,2,3	51,790	69,232	(25.2)%
Cash flow from operating activities¹	107,500	132,426	(18.8)%
Leverage⁴	2.3x	1.6x	0.7x
Leverage⁴(including the funds raised for the DPO acquisition)	0.0x	1.6x	-

Key Performance Indicators (KPIs)⁵
Total processed volume (TPV) (USD m)	33,540	43,779	(23.4)%
Total number of cards hosted (m)	16.2	14.2	14.1%
Total number of transactions (m)	758.1	752.0	0.8%

· Total revenue¹ (15.1)% y/y with performance significantly impacted by COVID-19, but ending the year with positive momentum across both business lines

· Merchant Solutions revenue (28.5)% y/y, with improving trends in the final months of 2020

o Although total TPV declined (23.4)% y/y, we saw particularly strong growth in directly acquired TPV from online merchants of 53% y/y (excluding Government and airline online TPV)

o Directly acquired TPV saw significant impacts from COVID-19 lockdowns but as we exited the year, domestic volumes saw a full recovery to 2019 levels and international volumes were only down (45)% y/y as UAE tourism began to see a recovery

o Take rates⁶ were lower y/y; reflecting merchant sector mix, the regulatory impact on acquiring fees in Jordan, and higher non-TPV related revenue streams in the prior year

· Issuer Solutions revenue (7.1)% y/y, showing a greater resilience due to the defensive nature of fixed billings such as card hosting, and contractual minimums in some contracts

· Underlying EBITDA^1,2 USD 112.6 million reflects reduced revenues and our largely fixed cost base, albeit we have mitigated some of this impact with cost savings. The reclassification of Mercury as a continuing operation¹ has also reduced underlying EBITDA by USD (1.3) million

· Profit from continuing operations¹ was USD 5.6 million, reflecting lower underlying EBITDA and the write-off of USD 6.7 million of capitalised debt issuance fees linked with the previous lending facility, as a result of our refinancing during the year

1. The financial performance of Mercury, a domestic card scheme where the Group retains 70% ownership, has been reclassified as a continuing operation. Mercury was previously reported as a discontinued operation, but due to the pandemic the sale process has been delayed and the IFRS requirements for recognising Mercury as a discontinued operation are no longer satisfied. The prior year has been reclassified on the same basis.

2. This is an Alternative Performance Measure (APM). See note 4 of the consolidated financial information for APMs definition and the reconciliations of reported figures to APMs

3. Underlying FCF now includes additional deductions, including: SDIs affecting EBITDA; and the share of EBITDA, minus dividends, for the Group's associate Transguard Cash. The prior year has been reclassified on the same basis.

4. Refer to page 27 for the leverage ratio computation and reconciliation of net debt figures to the consolidated financial information

5. For KPIs and constant currency definition, refer to page 29.

6. Take rates are an output measure in the Merchant Solutions business, and reflect revenue as a proportion of TPV.

· Underlying free cash flow^1,2 was USD 51.8 million and cash flow from operating activities was USD 107.5 million. Whilst this reflects COVID-19 impacts and FCF generation was low in the H1, we saw stronger positive cash flow generation in H2

Strategic and operational achievements

· Maintained new business momentum: Signed four new payment processing contracts for banks across Africa; saw significant growth in online payments with over 1,600 UAE merchants signing up to our N-Genius^TM payment gateway; and will be entering Sudan as a new market in 2021

· Expanded capabilities through the launch of a digital payments platform in partnership with Mastercard which will accelerate the adoption of digital payments across all our markets

· Excellent results from our annual employee engagement survey with a significant step up in overall engagement to 73% (2019: 65%)

· Proposed acquisition of DPO progressing as we work towards final regulatory approvals, which are now expected in the second quarter. DPO saw strong performance in 2020 with TPV growth of over 30% y/y in constant currency

Nandan Mer, Chief Executive Officer, commented

"Network has made great strides during a challenging year; seeing a number of new business wins, strong demand for online payment acceptance, and the expansion of our capabilities through the launch of the digital product platform in partnership with Mastercard. Whilst trading and revenue was naturally subdued during the year we started to see a number of positive indicators as we exited 2020, including the progressive recovery of volumes and transactions and a pickup in the pace of new business. The pandemic has also accelerated the move away from cash, towards card and other forms of digital payments, which will help to drive our growth.

Having recently joined Network it is exciting to be part of a business at such an important juncture. We are the leading player in a high growth and rapidly accelerating digital payments market. I am motivated by the substantial opportunity available to us; through a combination of our scale and reach across more than 50 markets, our product offering and technology infrastructure, and the multiple growth drivers we have at our disposal.

Our business remains strong and we have excellent foundations. I will be placing an emphasis on innovation and agility, so that Network further extends its leadership position across our markets. My priorities are focused upon being at the forefront of rapidly evolving customer needs, enabling them to serve their consumers with a wide choice of payment options, successful execution, and progressing with growth accelerators such as the completion of DPO and our market entry into Saudi Arabia."

2021 outlook and financial guidance

(All outlook commentary excludes DPO Group, as the acquisition has not yet completed)

We are encouraged by the positive momentum we saw at the latter end of 2020 and the accelerating secular trends that will support our business, which gives us confidence in the long term outlook. We have seen some headwinds to trading during the initial months of 2021, linked to the rise in COVID-19 cases across the UAE and some restrictive measures that have been introduced. Whilst the fluidity of the pandemic creates some uncertainty, we expect 2021 total revenues to return approximately to those recorded in 2019.

1. This is an Alternative Performance Measure (APM). See note 4 of the consolidated financial information for APMs definition and the reconciliations of reported figures to APMs

2. Underlying FCF now includes additional deductions, including: SDIs affecting EBITDA; and the share of EBITDA, minus dividends, for the Group's associate Transguard Cash. The prior year has been reclassified on the same basis.

In Merchant Solutions, this assumes directly acquired domestic TPV will be higher than that recorded in 2019, but we prudently expect international TPV to be c.50% lower than 2019. In Issuer Solutions we expect to see increased new card issuance, transaction volumes and new business activity, leading to revenue exceeding 2019 levels.

We expect low double digit year-on-year underlying expenses growth. This reflects a disciplined approach to cost management, alongside expenses associated with; volume growth, progression in our market entry to Saudi Arabia, separation from Emirates NBD, and the partial return of costs such as bonuses and incentives that were proactively managed through the pandemic.

2021 technical guidance

· Underlying depreciation and amortisation charge USD 56-60 million. This includes amortisation related to the historical technology transformation programme of c.USD 14 million which was previously classified as a Specially Disclosed Item (this reclassification is discussed in the CFO Review).

· Interest cost USD 19-21 million

· Underlying tax rate 8-9%. Effective tax rates are unchanged. However, the underlying tax rate has increased due to the reclassification of amortisation associated with the technology transformation programme into underlying financial performance

· Specially Disclosed Items lower: i) impacting underlying EBITDA to be c.USD 5 million, plus costs associated with the DPO acquisition; and ii) impacting net income to be a further c.USD 4 million

· Capital expenditure consists of: i) Core capital expenditure for maintenance and growth of c.USD 35 million; ii) up to USD 20 million to enable our entry to Saudi Arabia, subject to border restrictions easing. The total project investment remains at USD 25 million, with the remaining USD 5 million to be incurred in 2022 iii) up to USD 10 million to continue the separation of shared services from Emirates NBD. The total project investment remains at USD 30 million with the remaining USD 10 million to be incurred in 2022

Results Presentation

A presentation for analysts and investors will be held today at 9am UK / 1pm GST with a conference call dial-in facility to facilitate live Q&A, as well as a listen only video webcast option:

· Conference call dial-ins: UK: +44 (0) 20 3936 2999 / UAE: 800 0357 04553 / US: +1 646 664 1960 using the confirmation code: 789891

· Webcast link:

https://www.investis-live.com/networkinternational/602a62999a13881000e0d559/afed

A replay will be available through the same link above one hour after the presentation finishes.

Contacts

Investor enquiries	Media enquiries
Network International	Finsbury
Amie Gramlick, Head of Investor Relations	Jamie Leviton and Robert Allen
InvestorRelations@Network.Global	Network-Lon@Finsbury.com 0207 251 3801

Forward Looking Statements

This announcement contains certain forward-looking statements with respect to the financial condition, results or operation and businesses of Network International Holdings Plc. Such statements and forecasts by their nature involve risks and uncertainty because they relate to future events and circumstances. There are a number of other factors that may cause actual results, performance or achievements, or industry results, to be materially different from those projected in the forward-looking statements. These factors include general economic and business conditions; changes in technology; timing or delay in signing, commencement, implementation and performance of programmes, or the delivery of products or services under them; industry; relationships with customers; competition; and ability to attract personnel. You are cautioned not to rely on these forward-looking statements, which speak only as of the date of this announcement. We undertake no obligation to update or revise any forward-looking statements to reflect any change in our expectations or any change in events, conditions or circumstances.

Business response to COVID-19

Our business purpose and strategy, to enable the transition from cash to digital payments across our regions, has remained consistent throughout the pandemic. However, in the short term COVID-19 has had a substantial impact on our financial performance over the course of 2020. As a result we developed a Coronavirus Management Strategy to oversee our response for our colleagues, business operations, supply chain, cyber security infrastructure and financial stability. This strategy has served us well and we have seen customer and colleague support for the actions we have taken.

Working hard for our customers: Our payments and processing activities continued uninterrupted as a result of our colleagues' dedication and expertise, as well as our prior investment in our technology platforms. Our priority was to support customers through a difficult period. In Merchant Solutions this included fee reductions for some SME merchant customers, assistance in transitioning payments for traditional retail businesses to online, and direct cash support to micro merchants. In Issuer Solutions we assisted bank customers and their cardholders by enabling payment holidays or extending expiry periods on cards where suppliers could not guarantee a timely replacement.

Supporting colleagues and our community: From March 2020 we introduced a phased implementation of working from home across our office locations, with a seamless transition in working practices. We ensured our employees were provided with virtual medical services where available, while our leadership team provided regular strategic and operational updates and engaged with colleagues through several digital channels. We also continued our community engagement; making donations to the Rashid Center in Dubai which supports those with disabilities or additional needs, and the Beit Al Khair Society which provides financial and humanitarian support across the UAE.

Managing our risks: The onset of stringent lockdown measures early in the year impacted our merchants' ability to trade. We took steps to assess and mitigate chargeback loss risk, particularly for merchants that were offering delayed delivery products and services. As a result our chargeback losses were only 0.003% of TPV during the year. We also ensured our approach to cyber security was enhanced in response to emerging cyber risks, particularly in an environment where the majority of colleagues were working from home. We proactively addressed this additional risk through increased security monitoring and controls.

Balancing short term disruption with a focus on the long term: At the start of the financial year and prior to COVID-19 impacts, the business continued its positive momentum from the prior year. The pandemic and related lockdowns started to impact consumer spending and tourism across our markets from the middle of February through to the end of the period. As a result, Merchant Solutions saw a significant reduction in TPV while Issuer Solutions was more resilient, with a proportion of fixed billings or contractual minimums cushioning lower transaction volumes. Whilst the pandemic has certainly caused short term disruption, emerging data indicates COVID-19 will be an accelerant in the transition to digital payments, which underpins our confidence and reinforces our strategic focus.

Maintaining a robust financial position: As a result of the financial impact to our business we undertook prudent actions to reduce operational expenses and capital spending. Board members voluntarily reduced their fees for part of the year, and the CEO and CFO forewent elements of their compensation. During the year we also refinanced our syndicated lending facility and ended the period with a strong balance sheet including leverage well within the lending covenants.

Chief Executive Officer's Strategic Review

Market transition to digital payments

COVID-19 is further accelerating market growth

We are seeing a number of trends and developments through the pandemic that indicate fast changing Government and consumer sentiment towards cash. Whilst some of these trends may temper as the pandemic recedes, we believe it is likely there has been a structural acceleration towards digital payments across our markets.

· ATM usage declining in the UAE: Analysing the cards hosted by Network International in the UAE in January 2020, a cohort of consumers who used their cards almost exclusively at ATMs to withdraw cash are now only using their card at the ATM for less than half (47%) of their transactions in December 2020, with the remainder taking place at a POS terminal or online.

· Deployment of POS terminals accelerating in some markets: The number of POS terminals in Nigeria has increased by 50%, and by c64% in Saudi Arabia during 2020.

· Accelerating e-commerce growth through the pandemic: A Mastercard study published in November 2020 has revealed that nearly three out of four consumers in the Middle East and Africa are shopping more online than they did before the pandemic.

· Mobile money transactions also growing strongly: The Central Bank of Kenya enabled measures to facilitate increased use of mobile money transactions, instead of cash, through the pandemic. The monthly value of mobile money payments grew by 44.5% from March to November 2020.

Delivery of strategic and business initiatives

Our strategy is to provide solutions that allow our customers to bring digital payments to more consumers across our regions, leveraging our scale and competitive advantages.

Progress across the core business

Whilst COVID-19 had a significant impact on transactions and volumes during the year, we saw a steady recovery in trading through the second half and exited the year with positive momentum across both business lines. In our core market of the UAE, domestic direct acquiring fully recovered to prior year levels as we reached December 2020, whilst international volumes (which largely represent overseas visitors) also benefited from a pickup in tourism over the holiday period. Data from STR Global showed hotel occupancy for Dubai returning to almost 70% through December. Naturally, the pace of new business slowed through the pandemic as banks focused more on the immediate operational challenges caused by COVID-19. But our relationships with existing customers and the pipeline of opportunities remains strong and we are already seeing a pickup in new business wins during 2021, such as the recent signings of Kuda Digital Bank and Carbon Bank in Nigeria, Bank Windhoek in Namibia and Bank Gabarone in Botswana.

Middle East

New customer wins: In Merchant Solutions this includes a number of new Point-of-Sale (POS) direct acquiring merchant customers such as Alexander McQueen, Adidas and Western Union. We won the e-commerce direct acquiring business for NowNow (noon.com's on-demand delivery app, part of the digital ecosystem of products and services from the Noon Group), major supermarket Spinneys and Majid Al Futtaim Management Services. We have also signed partnership arrangements with several global brands, including HyperPay, in the online acquiring space. In Issuer Solutions we won a competitive tender to provide exclusive services across five countries for CareemPAY and a mandate to support the issuance of the first Islamic credit card for a bank customer in Jordan.

Contract renewals: We renewed a significant contract with Abu Dhabi Commercial Bank to provide fully outsourced Merchant Solutions and we also renewed our Issuer Solutions contract with United Arab Bank.

Growth in online payments: Our N-Genius^TM roll-out continues apace and we finished the year with c1,900 merchants using our proprietary online gateway, an increase of c1,600 during the year and with record volumes processed through our platform during December. This is reflected in our TPV growth from e-commerce merchants (excluding Government and airline online TPV) which grew at 53% during the year (versus 16% y/y growth in 2019).

Cross-sell of products and value added services: We saw good demand from merchants for our Easy Payment Plan, which allows consumers to set up a monthly repayment plan for goods or services purchased through a POS terminal. (The Easy Payment Plan is a service we enable, where the lending is provided by the cardholder's issuing bank). We have also expanded our contracts with UAE based tourism authorities that will see them leverage merchant spending data in order to better understand domestic consumer and tourist spending patterns.

Africa

New customers: Payment processing outsourcing wins included; Issuer and Merchant Solutions for Access Bank Kenya, Merchant Solutions for CCA Cameroon Bank, and Issuer Solutions services for Globus Bank in Nigeria and Republic Bank in Ghana.

Expanded contracts: We have supported eight of our banking customers with the issuance and processing of expanded card portfolios, including well-known institutions such as Fidelity Bank, Access Bank and RCS Group. We have further expanded our relationship with GTBank into a ninth country by supporting their subsidiary in Cote'D'Ivoire, and Woolworths Financial Services in South Africa has renewed our Issuer Solutions contract.

Cross-sell of products: We continue to upsell to existing customers across the region. Signing expanded contracts with Polaris Bank Nigeria and ARCA Nigeria, e-commerce Merchant Solutions using our N-Genius payment gateway for NBS Bank Malawi, and the rollout of our N-Genius^TM POS devices continues with Standard Bank and Orabank across eight countries. We are also working towards N-Genius^TM gateway implementation with customers after certification in five countries.

New market entry: In Africa we will be launching services in Sudan, a new market entry which has been supported through our partnership with Mastercard. We will be providing Issuer Solutions to Faisal Islamic Bank by enabling the bank to issue and accept Mastercard branded debit, credit and prepaid cards through ATMs, Point-Of-Sale terminals and online. This makes Faisal Islamic Bank one of the first in the country to obtain a card issuing and acquiring license from Mastercard.

Executing on our strategic partnership with Mastercard

Our strategic partnership with Mastercard is progressing well and we have launched a new digital product platform which will accelerate the adoption of digital payments across all our markets. With this new digital platform we will help our customers to enable mobile-based payments for their end consumers and merchants across various payment channels. Merchants will now have one simple to use technology interface through which they will be able to accept multiple payment types, ranging from USSD (text message), QR codes, to POS terminals and ecommerce, with mobile money and SoftPoS (technology which allows merchants to accept contactless card payments directly on their smartphone or tablet) coming later in 2021. Payment issuers and banks will be able to offer their consumers state-of-the-art payment solutions including digital wallets, person-to-person (P2P) payments and virtual cards. The launch of this platform is the first in a series of steps towards delivering simplified, collaborative payment solutions across the payments value chain in the Middle East and Africa.

Accelerating growth through the proposed acquisition of DPO

We continue to progress towards completing the acquisition of DPO. Regulatory approvals are still outstanding in a small number of countries, which we expect to finalise and complete in the second quarter. DPO is the largest online commerce payments platform operating at scale across Africa, offering online and mobile money payment services to over 59,000 active merchants across 19 countries. DPO benefits from a well invested technology platform with a unique combination of intellectual property, products, licences and partnerships in multiple markets, which is particularly advantageous to global merchant brands operating across the continent. The acquisition will further consolidate our presence in Africa, strengthening our position across the entire payments value chain and accelerating our growth. Whilst the acquisition is not yet complete and the 2020 financial performance of DPO is not consolidated within our financial results, we are providing an indicative business and trading update for DPO. The business is performing well, having seen over 30% y/y TPV growth in constant currency.

Our commitment to a sustainable and responsible business

We are committed to operating sustainably and responsibly across our entire business. We aim to operate in a way that maintains strong ethics, respects human rights, supports responsible labour practices and safeguards the environment - while promoting positive social and economic impacts in the markets in which we operate. In 2020 we began working with an expert third-party on the development of a new ESG Strategy. This includes a gap analysis to benchmark our existing approach against international sustainability best practice, prevailing legal requirements and evolving stakeholder expectations. The outputs from this process will inform the development and rollout of the new strategy in 2021.

Our people are at the heart of our business and are instrumental in the delivery of our strategy. We are very pleased to have seen the results of our annual employee engagement survey during the period. Overall we saw both an improvement in survey participation, where 83% of colleagues participated (2019: 72%), and a significant step up in overall engagement to 73% (2019: 65%). Colleagues were also highly satisfied with the business' approach to employee wellbeing, care and remote working arrangements through the COVID-19 pandemic.

As a digital payments provider, our business activities support and promote the financial inclusion of communities across the markets in which we operate. This includes our ongoing participation in the 'Smart Dubai Government' initiative which works to accelerate the adoption of digital payments across the Emirate, or our support of Egypt's Meeza national payment scheme. In addition, our support for community development projects helps us to deliver further social and economic benefits at a local level. In 2020, over 140 colleagues volunteered in local community initiatives. The Group also collaborated with, or made charitable donations to community organisations that support food distribution, cultural development and individuals with additional needs across the UAE, South Africa and Egypt.

Future strategic focus

As the digital payments leader in markets with significant structural and secular trends, Network has strong foundations. Whilst our overall strategic approach remains consistent, a CEO transition will bring elements of change and new ideas. We intend to ensure that we remain at the forefront of rapidly evolving customer needs so that we can grow our share and extend our leadership position across our markets. Our strategic aspirations will place more focus upon acceleration and innovation in order to deliver profitable high growth.

Core business and Mastercard strategic partnership: We will continue to support our merchant and financial institution customers through their ongoing recovery from COVID-19. In our acquiring business we will place emphasis on growing high value merchant sectors within the online and SME segments, and providing further value to merchants through the launch of interactive data and spending analytic dashboards. In Issuer Solutions we will have a strong focus on new business generation, including the cross-sell of value added services such as our digital payment platform into the existing customer base.

Our Mastercard partnership will focus on the rollout of the newly launched commercial card solution, the digital payment platform and executing against our market entry to Sudan. We will also continue working together to explore the development of low cost payment acceptance solutions which are targeted at the African market.

Completion and integration of DPO: Whilst ensuring that DPO continues to grow its TPV and revenues ahead of the market. We will work hard to cross-sell DPO's services to our existing bank customers in order to support the delivery of revenue synergies.

Capital allocation and Saudi Arabia market entry: Our capital allocation policy is designed to support both the core business and growth opportunities, whilst generating appropriate returns. In such attractive markets our business has substantial opportunities to deploy capital through both organic and inorganic investment, in order to deliver incremental profitable growth and returns. Given our conviction around the potential growth opportunities for the business, the Board has decided not to declare an ordinary dividend in respect of the 2020 financial year. This decision has been taken after careful consideration and in order to ensure capital allocation is prioritised towards such opportunities that will drive growth, generate attractive returns for shareholders and also to maintain financial flexibility.

Outside of core investment, we will deploy capital to continue the separation of shared services from Emirates NBD. This includes the separation of a shared data centre in the UAE and the deployment of independent human resources and finance systems in order to improve our operational flexibility. We also remain excited by the opportunity in Saudi Arabia, which is one of the largest payments markets in the MEA region. We intend to progress with our market entry as soon as border restrictions ease and when this occurs, we will update investors on the financial opportunity and expected returns from this new market entry. Our capital investment budget for Saudi Arabia remains the same as previously communicated and is incorporated in our 2021 financial guidance.

In summary: We have started to see a recovery from the impacts of the pandemic and the underlying drivers of the business and our markets remain strong. We have seen some headwinds to trading during the initial months of 2021, linked to the rise in COVID-19 cases across the UAE and some restrictive measures that have been introduced. Whilst the fluidity of the pandemic creates some uncertainty our overall outlook is unchanged at this stage. There is an intense focus on strong execution and maintaining the good momentum in the business.

Nandan Mer

Chief Executive Officer

7 March 2021

Financial Review

	2020	2019⁷
	USD'000	USD'000	Change
Select financials
Revenue	284,844	335,379	(15.1)%
Underlying EBITDA¹	112,561	168,522	(33.2)%
Underlying EBITDA margin (excl. share of associate) ¹	36.1%	47.4%	(11.3)pp
Profit from continuing operations	5,598	57,317	(90.2)%
Underlying net income¹	34,664	88,309	(60.7)%
Underlying earnings per share (USD cents)^1,2	6.7	17.7	(62.1)%
Reported earnings per share (USD cents) ^2,3	1.2	11.5	(89.6)%
Underlying free cash flow (underlying FCF) ¹	51,790	69,232	(25.2)%
Cash flow from operating activities	107,500	132,426	(18.8)%
Leverage⁴	2.3x	1.6x	0.7x
Leverage (including funds raised for DPO acquisition)⁴	0.0x	1.6x	-

Segmental results
Middle East revenue	198,224	244,833		(19.0)%
Africa revenue	80,020	90,546		(11.6)%
Other revenue⁵	6,600	-		-
Middle East contribution margin¹	65.5%	72.9%		(740)bps
Africa contribution margin¹	67.9%	70.6%		(270)bps

Business line results
Merchant Solutions revenue	109,415	152,955		(28.5)%
Issuer Solutions revenue	165,011	177,572		(7.1)%
Other revenue⁵	10,418	4,852		114.7%

Key Performance Indicators⁶
Total Processed Volume (TPV) (USD m)	33,540	43,779		(23.4)%
Total number of cards hosted (m)	16.2	14.2		14.1%
Total number of transactions (m)	758.1	752.0		0.8%

1. This is an Alternative Performance Measure (APM). See notes 4 and 5 of the consolidated financial information for APMs definition and the reconciliations of reported figures to APMs.

2. Average share count has increased as a result of the issuance of 50 million new shares to fund the DPO acquisition.

3. Reported earnings per share is calculated after deducting the non-controlling interest from the profit for the year, in line with the IFRS requirement.

4. Refer to page 27 for the leverage ratio computation and reconciliation of net debt figures to the consolidated financial information.

5. Other revenue primarily includes revenues recognised relating to the Mastercard strategic partnership. See details on page 13.

6. For KPIs definition, please refer to page 29.

7. There have been reclassifications in financial measures due to the change in presentation of some Specially Disclosed Items (SDIs) and the treatment of Mercury as a continuing operation. Details on page 11 and 19.

Updates to the presentation of the financial information

In 2020, management has undertaken a review of its disclosures including APMs. In undertaking this review, management has sought to simplify the disclosures and has taken into account evolving best practice from the FRC and ESMA guidance on the use of APMs, and feedback from investors and other key stakeholders following the issuance of Network's first set of accounts as a UK listed group. Key updates include:

a) reclassifications, where prior year comparatives have also been reclassified on the same basis, and;

b) reconciliations and analysis, as below:

a) Reclassifications (prior year comparatives have been reclassified on the same basis)

Mercury Payments Services LLC: is a domestic scheme where the Group retains 70% ownership, and was an asset held for sale at 31 December 2019. The disposal process has been delayed due to the niche nature of the asset and disruption as a result of the pandemic. As per IFRS requirements, the criteria for recognising Mercury as a discontinued operation is no longer satisfied. The financial performance of Mercury is now included as part of continuing operations. Further detail on page 19.

Specially Disclosed Items: Underlying EBITDA¹ and underlying net income¹ now include items that were previously classified as Specially Disclosed Items (SDIs).

· Reorganisation, restructuring and settlements: these expenses are not material in the period, nor are they anticipated to be material in future periods. The Group no longer believes it is necessary to report such items separately, and they are therefore classified within underlying expenses. Further detail on page 19.

· Unrealised foreign exchange (gains/losses): arise mainly in relation to FX volatility. As these are not material in the current or prior periods, and are expected to remain immaterial in future periods, the Group no longer believe it is necessary to report separately as an SDI. Further detail on page 19.

· Amortisation related to IT transformation: The IT transformation was a historical one-off capital investment project that included the development of a new technology and card management platform, the Group's proprietary payment gateway, and a significant upgrade to the switching system. Following completion of the project, and in response to shareholder feedback regarding the classification of this item, amortisation related to the IT transformation has now been classified within underlying depreciation and amortisation. Further detail on page 19.

Underlying free cash flow (Underlying FCF)¹: In order to enhance the clarity of underlying cash flow performance; and to aid the comparability of our financial KPIs with peers, we have included additional deductions in the definition of underlying FCF¹ which are: SDIs affecting EBITDA; and the share of EBITDA, less dividends received from associate Transguard Cash. Further detail on page 24.

In order to aid understanding of the financial information, the table below shows the key financial highlights for the year, without the impact of the above mentioned reclassifications:

	2020	2019
	USD'000	USD'000
Revenue	284,219	334,906
Underlying EBITDA	113,820	172,314
Underlying net income	50,105	104,764
Underlying FCF	80,873	103,237
Underlying EPS (USD cents)	9.6	21.0

1. This is an Alternative Performance Measure (APM). See note 4 of the consolidated financial information for APMs definition and the reconciliations of reported figures to APMs.

b) Reconciliations and analysis

· A reconciliation of reported operating cash flow to underlying FCF¹. Further detail on page 25.

· A detailed breakdown and analysis of net interest expenses. Further detail on page 17.

· A reconciliation of the movement in net debt from the prior to current year. Further detail on page 28.

· A reconciliation of capital expenditure to capital spend in the consolidated statement of cash flows. Further detail on page 24.

Total revenue

Total revenue declined by (15.1)% (similar on a constant currency basis²) to USD 284.8 million (2019: USD 335.4 million). This now includes USD 0.6 million of revenue from Mercury (2019: USD 0.5 million) which was previously classified as a discontinued operation (further detail can be found on page 19).

Performance through the period was significantly impacted by COVID-19 related lockdowns, and the resultant reductions in transactions throughout our regions, which is described in the relevant business line sections below.

year-on-year (y/y) growth	Q1	Q2	H1	Q3	Q4	H2	FY
Total revenue	0%	(23)%	(12)%	(17)%	(19)%	(18)%	(15)%
of which Merchant Solutions	(8)%	(43)%	(26)%	(30)%	(31)%	(30)%	(28)%
of which Issuer Solutions	2%	(10)%	(4)%	(6)%	(13)%	(10)%	(7)%

Revenue results by operating segment

Middle East

The Group's largest segment is the Middle East, where revenues are generated from both Merchant and Issuer Solutions and represents 70% of total revenue (2019: 73%). During the period, Middle East revenue declined by (19.0)% to USD 198.2 million (2019: USD 244.8 million). This represented a broadly flat performance through the first quarter, where we experienced normal trends until mid-February, following which there was an initial reduction in Merchant Solutions TPV as a result of reduced inbound tourism to the UAE. From March onwards, more significant COVID-19 related impacts were seen across both business lines as a result of the stringent lockdown measures implemented across the region. The impact was less severe in Issuer Solutions due to the resilient nature of the revenue streams and contractual minimums or fixed billings, which are discussed further in the business line section below. This resulted in H1 2020 Middle East revenues declining by (15.3)% y/y. The second half remained impacted by COVID-19 with reduced transactions, domestic spending and lower international tourism, with revenues declining by (22.2)%, but saw a progressive recovery across both business lines towards the end of the year. Contribution¹ for the Middle East segment declined by (27.2)%, to USD 129.9 million (2019: USD 178.4 million), with contribution margin¹ reducing by (740) bps to 65.5% (2019: 72.9%). This is reflective of revenue reductions on a largely fixed cost base.

1. This is an Alternative Performance Measure (APM). See notes 4 and 5 of the consolidated financial information for APMs definition and the reconciliations of reported figures to APMs.

2. For constant currency definition, please refer to page 29.

Africa

The Group's Africa segment operates across 43 countries and contributed 28% of total revenue in the period (2019: 27%). Africa revenue declined by (11.6)% to USD 80.0 million (2019: USD 90.5 million), which is also largely attributed to COVID-19. Performance in Africa was less impacted than the Middle East, linked to the weighting of the business towards Issuer Solutions, which demonstrates greater resilience due to the nature of the revenue streams. Some of our major markets in Africa, such as Egypt and Nigeria, experienced particularly stringent lockdown measures in the first half.

This created a number of challenging dynamics, including: significantly reduced transaction volumes; limited new card issuance and an increased rate of card inactivation and cancellation as a result of our financial institution clients being cost conscious; and lower TPV in Merchant Solutions acquirer processing. As a result H1 2020 Africa revenues declined by (10.5)%. During the second half, lockdown measures began to ease across a number of countries and as we exited the year, transaction volumes and business momentum were improving. Africa H2 2020 revenues declined by (12.6)% y/y, but this was more reflective of a strong comparable period in the prior year where the final quarter of 2019 saw a revenue benefit from a number of financial institution customers renewing card portfolios and requesting additional project based services.

Contribution¹ for the Africa segment declined by (15.1)%, to USD 54.3 million (2019: USD 64.0 million), with contribution margin¹ reducing by (270) bps to 67.9%. This was reflective of the revenue reductions on a direct cost base which is largely fixed and remained broadly flat compared with the prior year.

Other revenue, not allocated to an Operating Segment

The Group's other revenue, which contributes 2.3% of total revenue, is derived from solutions developed as part of the Mastercard strategic partnership during the period (2019: Nil). The solutions developed in 2020 included the launch of the corporate card and digital platform (discussed in the CEO statement). These solutions are developed for use with customers across both the Middle East and Africa, and therefore are not allocated to either of the two operating segments.

Revenue results by business line

We serve customers via two core business lines; Merchant Solutions and Issuer Solutions.

Merchant Solutions revenue

Revenue for the Merchant Solutions business, which comprised 38% of total revenue, decreased by (28.5)% to USD 109.4 million (2019: USD 153.0 million). Total TPV² declined by (23.4)% to USD 33.5 billion (2019: USD 43.8 billion). In Merchant Solutions our revenues are generated through fees dependent upon the value of transactions (TPV²) as well as through value added services and are tightly correlated to the underlying value of transactions taking place. Merchant Solutions services are largely focused on our direct acquiring markets in the UAE and Jordan, with performance over the first half period therefore closely linked to the lockdown measures in place and the related reduction in consumer spending. Through the second half of the year, as the lockdown measures started to ease in the region, we saw a gradual and ongoing improvement in domestic TPV² which recovered to prior year levels as we exited the period. International volumes (which are largely spends from international travellers) remained significantly depressed at (60)% y/y, reflective of reduced tourism and business travel into the region, but showed promising improvement as we exited the year where the UAE was one of only a few countries open to tourism. We also continued to see an acceleration and growing participation of online TPV², with growth of 53% y/y from e-commerce merchants (excluding Government and airline online TPV²).

1. This is an Alternative Performance Measure (APM). See note 5 of the consolidated financial information for APMs definition and the reconciliations of reported figures to APMs.

2 .For KPIs definition, please refer to page 29.

Take rates² were slightly lower than the prior year, driven by: the change in merchant segment mix as a result of the pandemic, where we saw an increased participation of TPV¹ from lower margin sectors; regulatory changes introduced in Jordan during August, where caps have been placed on the fees we charge to merchants; and higher non-TPV related revenue streams in the prior year.

Refunds and chargebacks remained low and within expected tolerances through the pandemic, with no significant increases in unrecoverable chargebacks or single client losses. This is representative of our diverse merchant sector base and the ongoing steps we have taken to manage our risks, including holding cash reserves where appropriate.

2020 trends in directly acquired Total Processed Volume (TPV) ¹

Directly acquired TPV, y/y	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
Total	5%	3%	(28)%	(59)%	(46)%	(34)%	(25)%	(16)%	(21)%	(23)%	(20)%	(11)%
of which Retail	12%	2%	(39)%	(75)%	(43)%	(30)%	(9)%	(6)%	(21)%	(21)%	(5)%	0%
of which Supermarkets	5%	17%	40%	24%	6%	11%	12%	15%	4%	9%	11%	9%
of which Travel & Entertainment	0%	(11)%	(62)%	(93)%	(85)%	(78)%	(67)%	(54)%	(57)%	(55)%	(53)%	(35)%
of which Other (Government, Healthcare & Education, Other)	5%	10%	(16)%	(51)%	(40)%	(20)%	(16)%	(5)%	(7)%	(12)%	(12)%	(6)%

Total	5%	3%	(28)%	(59)%	(46)%	(34)%	(25)%	(16)%	(21)%	(23)%	(20)%	(11)%
of which Domestic	5%	9%	(14)%	(47)%	(36)%	(21)%	(10)%	1%	(6)%	(7)%	(3)%	0%
of which International	5%	(13)%	(65)%	(94)%	(94)%	(84)%	(83)%	(78)%	(73)%	(72)%	(65)%	(45)%

Issuer Solutions revenue

Revenue for Issuer Solutions, which comprises 58% of total revenue, decreased by (7.1)% to USD 165.0 million (2019: USD 177.6 million). In Issuer Solutions we generate revenue from three streams: fees linked with the number of cards hosted on our platform; fees linked to transaction volumes; and fees from value added services. Our customers are typically financial institutions, where we have multi-year contracts in place and a number have contractual minimums. Therefore our revenues for this business line are somewhat correlated to underlying transaction volumes but have a greater resilience due to the card hosting and contractually fixed elements and were therefore fairly defensive in the face of COVID-19 challenges. Issuer Solutions experienced normal trading through January and February but following the implementation of lockdown measures across nearly all of our markets towards the end of March, we saw a reduction in revenues of just over (10)% year-on-year through Q2. As lockdowns started to ease and consumer confidence began to recover across a number of countries, we saw a gradual improvement in transactions and absolute revenues in the business line improved sequentially through Q3 and Q4. The two KPIs associated with Issuer Solutions include the number of cards hosted on our platform¹, which grew by 14.1% to 16.2 million, and transaction volumes¹ which were largely flat at 758.1 million. During the year, we adjusted the billing mechanism for one of our larger bank customers. Previously, the customer was billed according to the number of cards and accounts hosted but has now moved to billing based on the number of cards hosted and transactions processed, which is our preferred approach. Without this change, the number of transactions billed would have declined by (8)%, which is reflective of COVID-19 impacts, and growth in cards hosted and billed would have been 19%. Whilst overall we saw growth in the number of cards hosted, this number was significantly boosted by the addition of 2.1 million prepaid retail cards from RCS Group in South Africa. Aside from this addition, COVID-19 significantly limited new card issuance due to the closure of bank branches, and financial pressures on banks also led to a greater number of inactive card cancellations than would otherwise occur in a normal year.

1. For KPIs definition, please refer to page 29.

2. Take rates are an output measure in the Merchant Solutions business, and reflect revenue as a proportion of TPV.

Other revenue not allocated to a business line

The Group's other revenue of USD 10.4 million, which contributes 4% of total revenue, is mainly derived from the Mastercard strategic partnership, cash advance fees on withdrawals from ATMs, and foreign exchange gains / (losses) arising from the Merchant and Issuer Solutions business lines.

Expenses

		2020			2019
		USD'000			USD'000
	Reported	Specially disclosed items	Underlying results¹ (A)	Reported²	Specially disclosed items ²	Underlying results^1,2 (B)	Change (A&B)
Salaries and allowances	71,965	-	71,965	63,647	(2,572)	61,075	17.8%
Bonus and sales incentives	3,787	-	3,787	11,498	-	11,498	(67.1)%
Share based compensation	10,870	(10,445)	425	11,398	(10,679)	719	(40.9)%
Terminal and other benefits	10,311	-	10,311	10,201	(1,203)	8,998	14.6%
Total personnel expenses	96,933	(10,445)	86,488	96,744	(14,454)	82,290	5.1%
Technology and communication costs	44,288	-	44,288	42,358	-	42,358	4.6%
Third-party costs	23,518	-	23,518	26,786	-	26,786	(12.2)%
Legal and professional fees	22,102	(7,696)	14,406	24,762	(13,987)	10,775	33.7%
Provision for expected credit loss	2,183	-	2,183	510	-	510	328.0%
Other general and administrative expenses	11,083	-	11,083	12,008	1,651	13,659	18.9%
Selling, operating and other expenses	103,174	(7,696)	95,478	106,424	(12,336)	94,088	1.5%
Depreciation and amortisation	51,537	(4,204)	47,333	46,817	(4,202)	42,615	11.1%
Share of depreciation from associate	3,863	-	3,863	4,222	-	4,222	(8.5)%
Total depreciation and amortisation	55,400	(4,204)	51,196	51,039	(4,202)	46,837	9.3%
Net Interest expense	21,669	-	21,669	24,844	-	24,844	(12.8)%
Write-off of unamortised debt issuance cost	6,721	-	6,721	-	-	-	-
Unrealised foreign exchange losses	328	-	328	1,894	-	1,894	(82.7)%
Taxes	4,704	-	4,704	6,638	-	6,638	(29.1)%

1. This is an Alternative Performance Measure (APM). See note 4 of the consolidated financial information for APMs definition and the reconciliations of reported figures to APMs.

2. There have been certain reclassifications in that have also been adjusted in the prior year period, and are discussed in the respective sections to the CFO review.

Personnel expenses: Total personnel expenses were USD 97.0 million (2019: USD 96.7 million). This includes SDIs of USD 10.4 million (2019: USD 14.5 million). Underlying personnel expenses¹ now includes expenses relating to reorganisation, restructuring and settlements (USD Nil; 2019: USD 2.1 million) that were previously classified as a SDI. The prior year has also been reclassified on the same basis. Adjusting for SDIs, on a like for like basis, underlying personnel expenses¹ were USD 86.5 million (2019: USD 82.3 million), 5.1% higher when compared with the prior year, reflecting our growth in employee headcount, added in the second half of 2019, offset by COVID-19 related cost saving measures such as a hiring freeze and reduced payout for annual performance bonuses and sales incentives.

Selling, operating and other expenses: Total selling, operating and other expenses were USD 103.2 million (2019: USD 106.4 million). This includes SDIs of USD 7.7 million (2019: USD 12.3 million).

Underlying selling, operating and other expenses¹ grew by 1.5% to USD 95.5 million (2019: USD 94.1 million). This reflects: our ongoing investments in cyber security, IT systems and compliance; costs associated with the roll out of our product range; and the stronger uptake of online payment solutions during the year. Third party costs were lower y/y reflecting the reduction in volumes and transactions processed through the period. (Whilst we conduct all core payments processing activities in-house, we utilise third party vendors to provide certain components of our value added services such card embossing and personalisation services, SMS services and 3D secure). We also saw a reduction in spends across discretionary expenses, travel and entertainment, advertising and marketing as a result of our COVID-19 cost saving measures.

Expected credit losses (ECL) increased to USD 2.2 million (2019: USD 0.5 million). The increase is reflective of: i) the provision on chargeback and other receivables (related to POS rental and other charges) at USD 1.8 million (2019: USD 0.3 million). While this has increased y/y, our overall provision on chargeback losses and other receivables remains very low despite the pandemic and tough economic environment; ii) the provision for issuer and acquirer processing receivables at USD 0.4 million (2019: USD 0.2 million). Although some payments from customers were delayed during the pandemic, the overall provision remained low as a result of our proactive steps taken to ensure payments.

Share of EBITDA¹ of associate

The Group's share of EBITDA of associate, Transguard Cash, was USD 9.7 million (2019: USD 9.5 million). Transguard Cash provides end to end ATM management services in the UAE and business performance was impacted by the lockdown measures in place, resulting in reduced volumes of ATM replenishments and cash collections from merchant outlets, which was offset by cost savings and operational efficiencies, resulting in the share of EBITDA being marginally higher than 2019.

Underlying EBITDA¹

Underlying EBITDA¹ decreased by (33.2)% to USD 112.6 million (2019: USD 168.5 million). This now includes losses from Mercury, which were USD (1.3) million (2019: USD (1.7) million), an asset which was previously classified as a discontinued operation (further detail can be found on page 19). Underlying EBITDA margin¹ (which excludes the Group's share of its associate, Transguard Cash) was 36.1% (2019: 47.4%). The decrease in underlying EBITDA margin is reflective of COVID-19 related impacts, including: the reduction in revenues for the period; our largely fixed cost base, alongside the full weighting of expenses associated with being a publicly listed business that were only partially reflected in the 2019 comparative period.

The table below presents a reconciliation of the Group's reported profit from continuing operations to underlying EBITDA¹.

1. This is an Alternative Performance Measure (APM). See note 4 of the consolidated financial information for APMs definition and the reconciliations of reported figures to APMs.

	2020	2019²
	USD'000	USD'000
Profit from continuing operations	5,598	57,317
Depreciation and amortisation	51,537	46,817
Write-off of unamortised debt issuance cost	6,721	-
Net interest expense	21,669	24,844
Unrealised foreign exchange losses	328	1,894
Taxes	4,704	6,638
Share of depreciation from associate	3,863	4,222
Specially disclosed items affecting EBITDA	18,141	26,790
Underlying EBITDA¹	112,561	168,522

Depreciation and amortisation

The Group's total depreciation and amortisation (D&A) charge, including the share of depreciation from associate, Transguard Cash, increased by USD 4.4 million to USD 55.4 million (2019: USD 51.0 million). This includes a SDI of USD 4.2 million (2019: USD 4.2 million) for the amortisation of acquired intangibles. The Group's underlying D&A¹ charge grew by 9.3% to USD 51.2 million (2019: USD 46.8 million). The underlying D&A charge now includes USD 14.1 million of amortisation related to the Group's IT transformation project (2019: USD 10.7 million) which was previously classified as a SDI.

Net interest expense

The Group's reported net interest expense decreased by USD 3.2 million to USD 21.7 million (2019: USD 24.8 million). Net interest expense is composed of; i) interest charged on the drawdown or utilisation of our syndicated term loan facility and revolver facility ii) interest charged on utilisation of the working capital overdraft facilities (mainly used for funding settlement related balances) iii) amortisation of the costs associated with issuance of the syndicated term loan facility; and iv) IFRS16 lease financing and other charges. The overall decline in the net interest charge y/y largely reflects lower underlying interest rates, despite higher facility utilisation and lower amortisation of debt issuance costs.

	2020 USD'000	2019 USD'000	Comments
Interest Expense on:
Term loan facility ^a	12,935	16,800	Average drawdown in 2020: USD354m. Average interest rate of 3.4%^b. Average drawdown in 2019: USD325m, Average interest rate of 5.0% ^c. 2020 cost also includes c. USD 1 million of commitment fees.
Revolving credit facility	1,837	200	Average drawdown in 2020: USD55m. Average interest rate of 3.1%. Average drawdown in 2019: USD5m. Average interest rate of 3.7%
Bank overdrafts for working capital	3,780	2,800	UAE working capital facility contributes c.80% of the associated costs. Average utilisation in 2020 c.USD75m, average interest rate 4.1%. Average utilisation in 2019 c.USD55m, average interest rate 4.4%. Remaining ~20% of the cost is associated with working capital facilities in Jordan and Egypt.
Debt Issuance amortisation	1,642	4,504	Amortisation of debt issuance cost costs associated with term loan and revolving credit facility.
Other Interest expense	1,916	1,833	Relates to interest charges on lease liabilities.
Interest income	(441)	(1,293)	Relates to interest income on fixed deposits
Net Interest Expense	21,669	24,844

Note: 1. This is an Alternative Performance Measure (APM). See note 4 of the consolidated financial information for APMs definition and the reconciliations of reported figures to APMs.

2. There have been certain reclassifications in that have also been adjusted in the prior year period, and are discussed in the respective sections to the CFO review.

a. Syndicated debt facility was refinanced during H1 2020. The current interest rates associated with the new facility are 3/6 month EIBOR +2.45% on the AED tranche and 3/6 month LIBOR +2.70% on the USD tranche. Covenants set at 3.5x net debt: underlying EBITDA

b. Opening balance USD290m, closing balance USD375m (gross of debt issuance costs)

c. Opening balance USD334m, closing balance USD290m (gross of debt issuance costs)

Unrealised foreign exchange losses

Unrealised foreign exchange losses relate to the translation of Group's foreign currency denominated assets and liabilities. These were previously classified as a SDI within selling, operating & other expenses but are now reported as a separate line item below 'profit before interest and tax'. The charge during the year was USD 0.3 million (2019: USD 1.9 million). The prior year has also been reclassified on the same basis.

Write-off of unamortised debt issuance cost

This cost relates to the write-off of capitalised debt issuance fees associated with the previous syndicated debt facility, following the re-financing of the facility.

Taxes

The Group's total tax charge during the period was USD 4.7 million (2019: USD 6.6 million) with an underlying effective tax rate of 11.9% (2019: 7.0%). Whilst the applicable tax rates in our operating jurisdictions remain unchanged, the underlying effective tax rate is higher than prior years and is reflective of two factors: i) COVID-19 impact on the business and the associated lower proportion of profits from the UAE where corporate tax is not payable; and ii) the reclassification of amortisation associated with the technology transformation programme into underlying financial performance.

Profit from continuing operations, underlying net income, reported and underlying EPS¹

Profit from continuing operations was USD 5.6 million (2019: USD 57.3 million). Underlying net income¹ declined by (60.7)% to USD 34.7 million (2019: USD 88.3 million).

The table below presents a reconciliation of the profit from continuing operations to underlying net income¹.

	2020	2019²
	USD'000	USD'000
Profit from continuing operations	5,598	57,317
Write-off of unamortised debt issuance cost	6,721	-
Specially Disclosed Items affecting EBITDA	18,141	26,790
Specially Disclosed Items affecting net income	4,204	4,202
Underlying net income¹	34,664	88,309

Earnings per share: During the period, 50,000,000 additional shares were issued as part of the capital raising to fund the proposed acquisition of the DPO Group. This is described in more detail below.

Reported earnings per share from continuing operations is 1.2 USD cents (2019: 11.5 USD cents) and underlying Earnings Per Share (EPS)¹ declined by (62.1)% to 6.7 USD cents.

	2020	2019²
Underlying net income¹ (USD'000)	34,664	88,309
No. of shares ('000)^*	520,833	500,000
Underlying earnings per share¹ (USD cents)	6.7	17.7

* weighted average number of ordinary shares in issue during the financial period.

1.This is an Alternative Performance Measure (APM). See note 4 of the consolidated financial information for APMs definition and the reconciliations of reported figures to APMs.

2.There have been certain reclassifications in that have also been adjusted in the prior year period, and are discussed in the respective sections to the CFO review.

Assets previously classified as discontinued operations

During the period, losses from discontinued operations were Nil (2019: USD 0.4 million). Prior year losses reflect those from Merchant Solutions services in Bahrain, which have now been closed.

Mercury is a domestic scheme where the Group retains 70% ownership. In 2018, it was classified as a discontinued operation, as part of a strategic decision made to divest the scheme. Management remains committed to the sale of Mercury and is exploring various opportunities. However, the sale process has been delayed due to the niche nature of the asset and disruption to the process as a result of the pandemic. As per IFRS requirements, the criteria for recognising Mercury as a discontinued operation is no longer satisfied and the financial performance of Mercury for 2020 is now included as part of continuing operations. The prior year has also been reclassified on the same basis.

The table below demonstrates the consolidation impact of Mercury on key income statement items:

	2020 USD'000				2019 USD'000
	Currently presented	Mercury results	Without consolidation	Currently presented		Mercury results	Without consolidation
Revenue	284,844	(625)	284,219	335,379		(473)	334,906
Underlying EBITDA	112,561	1,259	113,820	168,522		1,660	170,182
Underlying net income	34,664	1,346	36,010	88,309		1,694	90,003
Discontinued operations	-	(1,346)	(1,346)	-		(1,694)	(1,694)
Net profit	5,598	-	5,598	56,958		-	56,958

Specially Disclosed items (SDIs) ¹

SDIs are items of income or expenses that have been recognised in a given period which management believes, due to their materiality and being one-off /exceptional in nature, should be disclosed separately to give a more comparable view of the period-to-period underlying financial performance.

SDIs affecting EBITDA during the period were USD 18.1 million (2019: USD 26.8 million) and SDIs affecting net income were USD 4.2 million (2019: USD 4.2 million).

The key SDIs affecting EBITDA in the period were:

1. Share-based compensation: Includes the charge related to the Management Incentive Award Plan, IPO Cash Bonus, and certain Long-Term Incentive Plans awarded to Group wide eligible employees, all of which are specific payments relating to the Group's Initial Public Offering (IPO). These charges will decline in 2021, after which they will no longer recur.

2. M&A and IPO related costs: This includes costs incurred during the period, including those paid for diligence, advisory, and execution in relation to the proposed acquisition of DPO. The prior year period includes one-off expenses related to the IPO. In 2021 such costs are expected to be lower and reflect the remainder of costs expected to be incurred through to completion of the acquisition.

1.This is an Alternative Performance Measure (APM). See note 4 of the consolidated financial information for APMs definition and the reconciliations of reported figures to APMs.

The key SDIs affecting net income in the period were:

Amortisation of acquired intangibles: Amortisation charge on the intangible assets recognised in the Group's consolidated statement of financial position from the acquisition of Emerging Market Payments Services in 2016.

	2020 USD'000 (A)	2019 USD'000 (B)	2019 Reclassification USD'000	2019 Previously reported USD'000	Change (A&B)
Items affecting EBITDA
Reorganisation, restructuring and settlements	-	-	2,132	2,132	-
Share-based compensation	10,445	10,679	-	10,679	(2.2)%
M&A and IPO related costs	7,696	16,111	-	16,111	(52.2)%
Other one-off items	-	-	1,894	1,894	-
Total SDIs affecting EBITDA	18,141	26,790	4,026	30,816	(32.3)%

Items affecting Net Income
Amortisation related to IT transformation	-	-	10,735	10,735	-
Amortisation of acquired intangibles	4,204	4,202	-	4,202	-
Total SDIs affecting net income	4,204	4,202	10,735	14,937	-
Total specially disclosed items	22,345	30,992	14,761	45,753	(27.9)%

Cash flow

The Group's net cash flow from operating activities was USD 107.5 million (2019: USD 132.4 million), a decrease of USD (24.9) million and reflective of the movement in our settlement related balances as well as the decrease in our profit from operations. The Group's net cash flow from operating activities, before settlement related balances, was USD 88.2 million (2019: USD 92.0 million).

The Group's net cash outflow from investing activities was USD (49.0) million (2019: USD (75.5) million), reflecting the lower capital expenditure, mainly on account of completion of the IT Transformation programme.

The Group's net cash movement from financing activities was USD 325.2 million (2019: USD (30.0) million) which reflects: i) the issuance of share capital of USD 258.7 million (gross proceeds of USD 264.7 million, net of issuance expenses of USD 6.0 million); ii) net proceeds from the refinancing of syndicated debt facility (USD 79.6 million, net of repayment of the outstanding principal from the prior facility and debt issuance costs of USD 6.7 million for the new facility; iii) purchase of shares under the Long Term Incentive Plan (LTIP) for eligible Group employees (USD (10.4) million); iv) payment on account of lease liabilities (USD (4.6) million); and issuance of subsidiary's capital (Mercury) to Non-controlling interest of USD 2.0 million.

	2020	2019¹
	USD'000	USD'000	Change
Net cash flows from operating activities before settlement related balances	88,214	92,035	(4.2)%
Changes in settlement related balances	19,286	40,391	(52.3)%
Net cash movement from operating activities	107,500	132,426	(18.8)%
Net cash movement from investing activities	(49,038)	(75,494)	(35.0)%
Net cash movement from financing activities	325,229	(30,036)	-

Working capital

The Group's working capital requirements are broadly classified into the following two categories:

Settlement related working capital

Background to settlement related working capital: mainly pertains to the funding cycle associated with the direct merchant acquiring business in the UAE. In line with market practice in the Middle East, which can differ to other global markets, Network International generally remits cash due to its merchant customers on the day following a transaction (T+1) and we receive funds into our banks accounts through the scheme settlement processes on T+2 and from any issuing banks on T+1. Therefore, at any given point in time, there will be around two days of 'scheme debtor' receivables pending whereas 'merchant creditor' payables are outstanding for only a day. Although there are certain circumstances that can cause this timing to vary, which are detailed below. As a result, a working capital requirement arises in order to fund these settlement balances. This funding is provided by our banking partners via an overdraft facility which is continuously settled as schemes remit money to us.

Scheme debtors and merchant creditors balances on our balance sheet are reflective of a snapshot in time at a period end. The balances and their relative movements can be determined by: i) the day of the week on which period end falls. For example, if the period end falls on a weekend, when banks are closed in the US but open in the UAE, this causes an extra day delay (T+2/3) in receipt of funds through the scheme

settlement processes; ii) the proportion of merchants who are not settled on a daily basis; iii) TPV in the last few days prior to the period end; and iv) currency mix of TPV and receipt of such funds through the scheme settlement processes.

Restricted cash should be considered separately, and mainly represents settlement amounts withheld for a period of time from merchants, predominantly airlines, where there is a higher risk of potential chargebacks. These withheld balances form part of merchant creditor balance.

The definition of net debt which is specified in our syndicated lending syndicate documentation excludes the overdraft facilities which are mainly used to facilitate settlement related working capital balances, and restricted cash balances. Settlement related working capital should be considered as very short term in nature, against which the counterparty risk lies with global payment schemes, for consumer transactions which have already been approved by both schemes and issuing banks.

Movement in 2020 settlement related balances: During the period, there was an inflow of USD 19.3 million (2019: USD 40.4 million) in settlement related balances. Scheme debtors declined by USD 19.8 million, (10.7)% y/y, which is reflective of y/y decline in TPV during the last few days of December 2020.

1. There have been certain reclassifications in that have also been adjusted in the prior year period, and are discussed in the respective sections to the CFO review.

Restricted cash declined marginally. Whilst the restricted cash balance increased through the first half of the year as we prudently withheld merchant funds as collateral to manage chargeback risk through the initial stages of the pandemic, we released funds during the second half as those risks reduced.

Merchant creditors declined by USD 2.0 million. Excluding settlement related balances on hold, merchant creditors were marginally lower compared to 2019. This also reflects TPV processed during the last few days of December, which was lower y/y, but was offset by two factors: i) some merchants are not settled on a daily basis and amounts payable to them increased at the end of the year; and ii) the regulatory changes to acquiring fees in Jordan have also contributed, where there has been a timing delay between the implementation of the regulation and the reduction in our fees, leading to reimbursement delays to some merchants.

	2020 USD' 000	2019¹ USD' 000	Cash inflow/ (outflow) USD' 000
Scheme Debtors	165,436	185,268	19,832
Restricted Cash	52,550	54,029	1,479
Total Merchant Creditors	(165,142)	(167,167)	2,025
Settlement balances On-Hold*	(51,688)	(53,245)	(1,557)
Other Merchant Creditors	(113,454)	(113,922)	(468)
Settlement Related Working Capital Balances	52,844	72,130	19,286

* represents the off-set balance to restricted cash

Working capital before settlement related balances

This represents the amount of capital used by the Group to fund its day-to-day trading operations, other than the settlement related balances as explained above. The overall cash movement in working capital before settlement related balances was USD 19.6 million, largely driven by trade receivables which were lower y/y as a result of the proactive steps taken to ensure timely payment from issuer and acquirer processing customers.

	2020 USD'000	2019¹ USD'000	2020 vs. 2019 USD'000
Trade receivables & chargeback receivables (Net of provisions for expected credit loss)	45,874	71,228	25,354
Prepayments and other receivables	22,000	17,268	(4,732)
Trade and other payables	(127,732)	(127,453)	279
	(59,858)	(38,957)	20,901
Items excluded*:
Capex accrual				3,595
Provisions for expected credit loss (Refer to page 16)				(2,183)
Other movements**				(2,732)
Subtotal				(1,320)
Working capital before settlement related balances				19,581

* These items are excluded as these are either shown separately in the consolidated statement of cash flows or non-cash in nature.

** Other movement mainly includes movement in advance taxes paid, share based compensation liability and interest payables.

1. There have been certain reclassifications in that have also been adjusted in the prior year period, and are discussed in the respective sections to the CFO review.

Capital expenditure

The business has taken a cautious approach to managing capital spending during the period as a result of the COVID-19 pandemic and associated reduction in revenue. This included a pause in our market entry to Saudi Arabia, which was impeded by border closures.

	2020	2019²
	USD'000	USD'000	Change
Total capital expenditure	46,470	84,265	(44.9)%
Core capital expenditure:	46,470	45,662	1.8%
of which is maintenance capital expenditure¹	21,038	25,725	(18.2)%
of which is growth capital expenditure¹	25,432	19,937	27.6%
IT transformation capital expenditure¹	-	38,603	(100)%

1. This is an Alternative Performance Measure (APM). See note 4 of the consolidated financial information for APMs definition and the reconciliations of reported figures to APMs.

2. There have been certain reclassifications in that have also been adjusted in the prior year period, and are discussed in the respective sections to the CFO review.

Core capital expenditure consists of both maintenance and growth capex. Maintenance capital expenditure relates to that incurred for additions or improvements that sustain the existing operations of the Group. Growth capital expenditure relates to that associated with delivering business growth, including; onboarding of new customers, expansion of services with existing customers or the development of new product offerings.

Maintenance capital expenditure was USD 21.0 million (2019: USD 25.7 million) and was mainly composed of investment in regard to maintaining and enhancing our technology infrastructure, and capex incurred for the separation of shared services from Emirates NBD.

Growth capital expenditure was USD 25.4 million (2019: USD 19.9 million) and was mainly composed of investment in regard to the procurement of POS terminals for new merchant relationships, product development including those built in partnership with Mastercard and on-boarding of new issuer and acquirer processing customers.

Reconciliation of capital expenditure to capital spend in the consolidated cash flows

	2020 USD'000	2019² USD'000	Change
Total Capital expenditure	46,470	84,265	(44.9)%
Goods/services received in the current period, but yet to be paid
Transformation capital expenditure	-	(7,296)	- -
Growth and Maintenance Capex	(12,639)	(12,959)	(2.5)%
Goods/services received in prior period, and paid in the current period
Transformation Capex	7,296	8,711	(16.2)% (16.1)%
Growth and Maintenance Capex	8,937	6,589	35.6%
Total Consolidated capital expenditure Spend (as per consolidated statement of cash flows)	50,064	79,310	(36.9)%

Underlying free cash flow¹

Underlying Free Cash Flow¹ (underlying FCF) was USD 51.8 million (2019: USD 69.2 million), reflective of the reduction in revenue and operating profit due to COVID-19 pandemic. Underlying FCF now includes deductions that were not previously included in our definition, including: SDIs affecting EBITDA; and the share of EBITDA for associate Transguard Cash less dividends.

	2020	2019²	Change
	USD'000	USD'000
Profit from continuing operations	5,598	57,317	(90.2)%
Depreciation and amortisation	51,537	46,817	10.1%
Write-off of unamortised debt issuance cost	6,721	-	-
Net interest expense	21,669	24,844	(12.8)%
Unrealised foreign exchange losses	328	1,894	(82.7)%
Taxes	4,704	6,638	(29.1)%
Share of depreciation of associate	3,863	4,222	(8.5)%
Specially disclosed Items affecting EBITDA	18,141	26,790	(32.3)%
Underlying EBITDA¹	112,561	168,522	(33.2)%
Changes in working capital before settlement related balances	19,581	(9,625)	-
Taxes paid	(6,058)	(10,415)	(41.8)%
Core capital expenditure	(46,470)	(45,662)	1.8%
Specially disclosed Items affecting EBITDA	(18,141)	(26,790)	(32.3)%
Adjustment for share of EBITDA of associate, less dividend	(9,683)	(6,798)	42.4%
Underlying free cash flow¹	51,790	69,232	(25.2)%

As per the historical 2019 Annual Reports and Accounts, underlying FCF was stated as USD 103.2 million. For ease of understanding, the table below shows the reconciliation between underlying FCF as stated then, and the new definition as described above.

1. This is an Alternative Performance Measure (APM). See note 4 of the consolidated financial information for APMs definition and the reconciliations of reported figures to APMs.

2. There have been certain reclassifications in that have also been adjusted in the prior year period, and are discussed in the respective sections to the CFO review.

	2020	2019
	USD'000	USD'000	Change
Underlying free cash flow - as Reported above	51,790	69,232	(25.2)%
Impact of items not previously included in definition of underlying cash flow:
Underlying EBITDA (mercury and SDI reclassification - as explained earlier)	1,259	3,792	(66.8)%
Specially disclosed Items affecting EBITDA	18,141	26,790	(32.3)%
Adjustment for share of EBITDA of associate, less dividend	9,683	6,798	42.4%
Changes in working capital before settlement related balances and Capital expenditure - related to Mercury (as previously classified as discontinued operation)	-	(3,375)	-
Underlying free cash flow - Old Presentation	80,873	103,237	(21.7)%

Reconciliation of cash flows from operating activities to underlying free cash flow

	2020	2019²
	USD'000	USD'000	Change
Net cash inflows from operating activities	107,500	132,426	(18.8)%
Less: Cash inflows included in the statutory cash flow but not in the Underlying free cash flow
Changes in settlement related balances, long term receivables and other liabilities	(19,942)	(35,405)	(43.7)%
Charge for share based payment	(4,070)	(1,404)	189.9%
Add: Cash outflows included in the statutory cash flow but not in the Underlying free cash flow
Dividends received from associate	-	2,723	-
Interest Paid	16,985	21,300	(20.3)%
Others*	(2,213)	(4,746)	(53.4)% (13.7)%
Underlying free cash flow before capital expenditure	98,260	114,894	(14.5)%
Core capital expenditure	(46,470)	(45,662)	1.8%
Underlying free cash flow¹	51,790	69,232	(25.2)%

* Others include provision for expected credit losses, foreign exchange gains and losses, and loss from discontinued operations

Capital raise for the acquisition of DPO

The Group is working towards the completion of the DPO acquisition. The acquisition was announced on 28 July 2020, and subsequently, an equity capital raise was completed to support funding.

The total consideration for DPO is USD 288 million, to be paid as mixture of cash and equity vendor consideration shares. The vendor consideration portion totals USD 63 million and constitutes a rollover of USD 50 million by APIS (the former private equity owner) and USD 13 million by the co-founders of DPO, into Network International shares. The issuance of these Network shares will be executed at completion.

The remainder of the consideration will be funded from the equity capital raise; of 50 million shares at a price of 410p, that took place on 28 July 2020 raising gross proceeds of USD 265 million. Of the gross proceeds, USD 6.0 million was used for costs associated with the equity raise which is accounted for in the statement of changes in equity.

1. This is an Alternative Performance Measure (APM). See note 4 of the consolidated financial information for APMs definition and the reconciliations of reported figures to APMs.

2. There have been certain reclassifications in that have also been adjusted in the prior year period, and are discussed in the respective sections to the CFO review.

Debt

The Group's total debt, including current borrowings, amounted to USD 434.5 million (2019: USD 377.4 million).

	2020	2019
	USD'000	USD'000	Change
Syndicated term loan
Principal Outstanding	375,000	288,744	29.9%
Unamortised debt issuance Cost	(6,134)	(7,814)	(21.5)%
Sub total	368,866	280,930	31.3%
Revolving credit facility	35,000	35,000	0.0%
Lease liability	925	1,619	(42.9)%
Bank overdraft (for working capital)	29,681	59,895	(50.4)%
Total	434,472	377,444	15.1%

Non-current borrowing	369,025	211,783	74.2%
Current borrowing	65,447	165,661	(60.5)%
Total	434,472	377,444	15.1%

During the year, we refinanced our syndicated debt facility with a group of 16 banks who have a global and regional presence. The refinancing was conducted for the purposes of providing the Group with increased liquidity to fund growth accelerator projects, as well as for general corporate purposes. The new facility carries similar interest rates and the same financial covenants as the prior.

The facility is for USD 525 million and replaced the Group's USD 350 million term financing facility, which had a drawn down balance of USD 289 million (gross of debt issuance cost of USD 7.8 million) on 31 December 2019. At inception of the new facility, USD 375 million was drawn, of which USD 289 million was used to repay the previous facility, USD 6.7 million used to pay for issuance costs and the remainder held as part of our cash balances for future investment requirements. USD 79 million remains unutilised and is included as cash in the financial information. The undrawn balance remains available for a period of one year from the date of refinancing which can be further extended subject to approval from the lenders.

The new facility consists of both conventional AED and USD tranches with a coupon of EIBOR plus margin and LIBOR plus margin respectively, together with one USD denominated Islamic finance tranche with a coupon of LIBOR plus margin. The margin is calculated by reference to the Leverage (net debt / underlying EBITDA), as per the definition and methodology provided in the financing documents. Financial covenants limits are set to 3.5x net debt: underlying EBITDA. Capital repayments will commence in 2022.

Our leverage ratio², which represents net debt² to underlying EBITDA¹, is calculated as per the methodology provided in the financing facility agreement with the lending banks. Under these agreements net debt excludes: the overdraft facilities which are mainly used to facilitate settlement related working capital balances; and restricted cash balances which are largely the amounts withheld from merchants for a period of time to cover the risk of chargebacks. EBITDA is measured on an underlying basis over the last twelve month period.

1. This is an Alternative Performance Measure (APM). See note 4 of the consolidated financial information for APMs definition and the reconciliations of reported figures to APMs.

2. These are Alternative Performance Measures, the definitions and calculations of which are included in the next page.

Leverage Ratio

	2020 USD'000	2019² USD'000
Net debt	252	273,754
Underlying EBITDA¹	112,561	168,522
Leverage ratio	0.0	1.6

Leverage Ratio - excluding the cash raised to fund the acquisition of DPO

	2020 USD'000	2019² USD'000
Net debt	259,655	273,754
Underlying EBITDA¹	112,561	168,522
Leverage ratio	2.3	1.6

The table below provides the reconciliation of net debt as per the consolidated financial information and methodology prescribed in the financing agreement.

Particulars	2020 USD'000	2019² USD'000
Non-current borrowings	369,025	211,783
Current borrowings	65,447	165,661
Cash balance	(398,781)	(45,473)
Net debt as per consolidated financial information	35,691	331,971
Less: Working capital facility overdraft (Refer Note 8 of the consolidated financial information)	(29,681)	(59,895)
Less: Cash Balance (Share of held for sales assets and associate)	(11,422)	(3,598)
Add: Unamortised debt issuance cost	6,134	7,814
Other Adjustments *	(470)	(2,538)
Net debt as per the financing facility agreement - including cash raised for DPO acquisition	252	273,754
Cash generated from equity raise (net of issuance cost)	259,403	-
Net debt as per the financing facility agreement - excluding cash raised for DPO acquisition	259,655	273,754

*Other adjustments include restricted cash of Group's subsidiaries and adjustment for any temporary end of day excess / short drawdown position of the working capital facility.

1. This is an Alternative Performance Measure (APM). See note 4 of the consolidated financial information for APMs definition and the reconciliations of reported figures to APMs.

2. There have been certain reclassifications in that have also been adjusted in the prior year period, and are discussed in the respective sections to the CFO review.

The table below reconciles the movement in net debt through the period:


Net Debt Movement	2020 USD'000	2019 USD'000
Opening balance	273,754	278,473
Proceeds from new borrowing
Term Loan	375,000	-
Revolving Credit Facility	40,000	35,000
Repayment of borrowing
Term Loan	(288,751)	(44,918)
Revolving Credit Facility	(40,000)	-
ATM lease liabilities	(694)	(652)
Cash balances	(353,308)	14,802
Cash balance of associate (50%)	(7,908)	1,089
Others ^*	2,159	(10,040)
Closing balance - including cash raised for DPO acquisition	252	273,754
Cash generated from equity raise (net of issuance cost)	259,403	-
Closing balance - excluding cash raised for DPO acquisition	259,655	273,754

* Others mainly include changes in restricted cash from Group subsidiaries, cash balance relating to non-controlling interest of Mercury, Merchant Solutions services in Bahrain and adjustment for any temporary end of day excess / short drawdown position of the working capital facility.

Definitions

Constant Currency Revenue

Constant Currency Revenue is current period revenue recalculated by applying the average exchange rate of the prior period to enable comparability with the prior period revenue. Foreign currency revenue is primarily denominated in Egyptian Pound (EGP). The other non-US backed currencies that have a significant impact on the Group as a result of foreign operations in Nigeria and South Africa are the Nigerian Naira (NGN) and the South African Rand (ZAR) respectively. The table shows the average rate of these currencies per USD for 2020 and 2019.

Currency rate vs USD	2020 Average rate	2019 Average rate
Egyptian Pound (EGP)	15.8	16.8
Nigerian Naira (NGN)	359.4	306.4
South African Rand (ZAR)	15.6	14.4

Key Performance Indicators

To assist in comparing the Group's financial performance from period-to-period, the Group uses certain key performance indicators which are defined as follows.

Total Processed Volume (TPV) (USD million)

TPV is defined as the aggregate monetary volume of purchases processed by the Group within its Merchant Solutions business line.

Number of cards hosted (million)

Number of cards hosted is defined as the aggregate number of cards hosted and billed by the Group within its Issuer Solutions business line.

Number of transactions (million)

Number of transactions is defined as the aggregate number of transactions processed and billed by the Group within its Issuer Solutions business line.

Consolidated statement of financial position

As at 31 December

	2020	2019*
	USD'000	USD'000
Assets
Non-current assets
Goodwill	262,609	262,561
Intangible assets	188,523	186,499
Property and equipment	50,285	57,400
Investment in associate	59,808	54,432
Investment securities	246	246
Long term receivables	2,617	2,533

Total non-current assets	564,088	563,671

Current assets
Scheme debtors	165,436	185,268
Receivables and prepayments	67,874	88,496
Restricted cash	52,550	54,029
Cash and cash equivalents	398,781	45,473

Total current assets	684,641	373,266
Total assets	1,248,729	936,937

Liabilities
Non-current liabilities
Borrowings	369,025	211,783
Other long term liabilities	21,584	24,379
Deferred tax liabilities	1,837	1,788

Total non-current liabilities	392,446	237,950

Current liabilities
Merchant creditors	165,142	167,167
Trade and other payables	127,732	127,453
Borrowings	65,447	165,661

Total current liabilities	358,321	460,281

Shareholders' equity
Share capital	71,557	65,100
Share premium	252,279	-
Foreign exchange reserve	(19,438)	(20,115)
Reorganisation reserve	(1,552,365)	(1,552,365)
Other reserves	4,773	5,851
Retained earnings	1,741,609	1,742,096

Equity attributable to equity holders	498,415	240,567

Non-controlling interest	(453)	(1,861)
Total shareholders' equity	497,962	238,706

Total liabilities and shareholders' equity	1,248,729	936,937

* 2019 figures have been re-presented following the classification of Mercury Payments Services LLC ('Mercury', a subsidiary of the Group) from discontinued operations to continuing operations in 2020.

Consolidated statement of profit or loss

For the year ended 31 December

	2020	2019*
	USD'000	USD'000
Continuing operations

Revenue	284,844	335,379

Personnel expenses	(96,933)	(96,744)
Selling, operating and other expenses	(103,174)	(106,424)
Depreciation and amortisation	(51,537)	(46,817)
Share of profit of associate	5,820	5,299

Profit before interest and tax	39,020	90,693

Net interest expense	(21,669)	(24,844)
Write-off of unamortised debt issuance cost	(6,721)	-
Unrealised foreign exchange losses	(328)	(1,894)

Profit before tax	10,302	63,955

Taxes	(4,704)	(6,638)

Profit from continuing operations	5,598	57,317
Discontinued operations
Loss from discontinued operations, net of taxes	-	(359)

Profit for the year	5,598	56,958

Attributable to:
Equity holders of the Group	6,155	57,604
Non-controlling interest	(557)	(646)

Profit for the year	5,598	56,958

Earnings per share (basic and diluted) in USD cents	1.2	11.5
Earnings per share - Continuing operations (basic and diluted) in USD cents	1.2	11.6

Consolidated statement of other comprehensive income

For the year ended 31 December

	2020	2019
	USD'000	USD'000

Profit for the year	5,598	56,958

Other comprehensive income
Items that may subsequently be reclassified to profit or loss
Foreign currency translation difference on foreign operations	677	3,160

Items that will never be reclassified to profit or loss
Re-measurement of defined benefit liability	(1,365)	(1,692)

Net change in other comprehensive income	(688)	1,468

Total comprehensive income for the year	4,910	58,426

Attributable to:
Equity holders of the Group	5,467	59,072
Non-controlling interest	(557)	(646)

Total comprehensive income	4,910	58,426

Consolidated statement of changes in equity

For the year ended 31 December

	Share capital	Share premium	Foreign exchange reserve	Reorganisation reserve	Other reserves	Retained earnings	Equity attributable to equity holders	Non-controlling interest	Total shareholders' equity
	USD'000
As at 1 January 2020	65,100	-	(20,115)	(1,552,365)	5,851	1,742,096	240,567	(1,861)	238,706

Total comprehensive income for the year
Profit for the year	-	-	-	-	-	6,155	6,155	(557)	5,598

Other comprehensive income for the year:
Foreign currency translation differences	-	-	677	-	-	-	677	-	677
Re-measurement of defined benefit liability	-	-	-	-	(1,365)	-	(1,365)	-	(1,365)
Total other comprehensive income for the year			677	-	(1,365)	-	(688)	-	(688)
Total comprehensive income for the year	-	-	677	-	(1,365)	6,155	5,467	(557)	4,910
Issuance of new shares	6,457	258,280	-	-	-	-	264,737	-	264,737
Share issuance cost	-	(6,001)	-	-	-	-	(6,001)	-	(6,001)
Increase in statutory reverse	-	-	-	-	287	(287)	-	-	-
Purchase of treasury shares	-	-	-	-	-	(10,425)	(10,425)	-	(10,425)
Share based payment	-	-	-	-	-	4,070	4,070	-	4,070
Increase in shareholding of subsidiary with non-controlling interest	-	-	-	-	-	-	-	1,965	1,965
As at 31 December 2020	71,557	252,279	(19,438)	(1,552,365)	4,773	1,741,609	498,415	(453)	497,962

Consolidated statement of changes in equity (continued)

For the year ended 31 December

	Share capital	Share premium	Foreign exchange reserve	Reorganisation reserve	Other reserves	Retained earnings	Equity attributable to equity holders	Non-controlling interest	Total shareholders' equity
	USD'000
As at 1 January 2019	1,559,796	6,184	(23,275)	(1,552,365)	7,543	195,028	192,911	(1,215)	191,696

Total comprehensive income for the year
Profit for the year	-	-	-	-	-	57,604	57,604	(646)	56,958

Other comprehensive income for the year:
Foreign currency translation differences	-	-	3,160	-	-	-	3,160	-	3,160
Re-measurement of defined benefit liability	-	-	-	-	(1,692)	-	(1,692)	-	(1,692)
Total other comprehensive income for the year	-	-	3,160	-	(1,692)	-	1,468	-	1,468
Total comprehensive income for the year	-	-	3,160	-	(1,692)	57,604	59,072	(646)	58,426
Capital reduction	(1,494,696)	(6,184)	-	-	-	1,500,880	-	-	-
Purchase of treasury shares	-	-	-	-	-	(12,821)	(12,821)	-	(12,821)
Share based payment	-	-	-	-	-	1,405	1,405	-	1,405
As at 31 December 2019	65,100	-	(20,115)	(1,552,365)	5,851	1,742,096	240,567	(1,861)	238,706

Consolidated statement of cash flows

For the year ended 31 December

	2020	2019*
	USD'000	USD'000

Operating activities
Profit for the year from operations	5,598	56,958
§ Adjustments for:
Depreciation and amortisation	51,537	46,817
Write-off of unamortised debt issuance cost	6,721	-
Provision for expected credit losses	2,183	510
Net interest expense	21,669	24,844
Taxes	4,704	6,638
Foreign exchange losses and others	358	6,471
Loss on sale of assets	-	17
Share of profits from associate	(5,820)	(5,299)
Charge for Share based payment	4,070	1,405
§ Changes in long term receivables and other liabilities	656	(4,986)
§ Interest paid	(16,985)	(21,300)
§ Taxes paid	(6,058)	(10,415)
§ Changes in working capital before settlement related balances¹	19,581	(9,625)

Net cash flows before settlement related balances	88,214	92,035

§ Changes in settlement related balances²	19,286	40,391

Net cash flows from operating activities	107,500	132,426

Investing activities
§ Purchase of intangible assets and property and equipment	(50,064)	(79,310)
§ Dividends received from associate §	-	2,723
§ Sale of intangible assets and property and equipment	585	-
§ Interest received §	441	1,093
Net cash flows from investing activities	(49,038)	(75,494)

1- Changes in working capital before settlement related balances reflects movements in receivables and prepayments and trade and other payables adjusted for non-cash items.

2- Changes in settlement related balances reflects movement in scheme debtors, merchant creditors and restricted cash.

Consolidated statement of cash flows

For the year ended 31 December


	2020	2019*
	USD'000	USD'000

Financing activities
§ Proceeds from new borrowings	415,000	35,000
§ Repayment of borrowings	(328,751)	(44,918)
§ Purchase of treasury shares	(10,425)	(12,821)
§ Payment of debt issuance cost	(6,676)	(2,903)
§ Payment of lease liabilities	(4,620)	(4,394)
§ Issuance of subsidiary's capital to Non-controlling interest	1,965	-
§ Proceeds from issuance of new shares	264,737	-
§ Payment of share issuance expenses §	(6,001)	-

Net cash flows from financing activities	325,229	(30,036)

Net increase in cash and cash equivalents	383,691	26,896
§ Cash as part of held for sale	-	744
§ Effect of movements in exchange rates on cash held	(169)	405

Cash and cash equivalents at the beginning of the year	(14,422)	(42,467)

Cash and cash equivalents at the end of the year (refer (i) below)	369,100	(14,422)

Note (i): Cash and cash equivalents - as per consolidated information of	398,781	45,473
- financial position	(29,681)	(59,895)
- Bank overdraft	369,100	(14,422)

1 Legal status and activities

Network International Holdings PLC ('the Company') listed its shares on the London Stock Exchange on 12 April 2019. The principal activities of the Group are enabling payments acceptance at merchants, acquirer processing, switching financial transactions, hosting cards and processing payment transactions and providing end to end management services, digital payment services.

The registered office of the Company is situated in England and Wales.

The consolidated financial information of the Group as at and for the year ended 31 December 2020 comprise the Company and its subsidiaries (together referred to as the 'Group') and the Group's interest in associates.

A Group reorganisation was done in 2019 prior to its listing in London Stock Exchange to facilitate the process. The result of the application of the capital reorganisation was to present the consolidated financial information of 2019 as if the Company has always owned the Group. A Group Reorganisation Reserve is created as a separate component of equity, representing the difference between the share capital of the Company at the date of the Group reorganisation and that of the previous top organisation of the Group, Network International LLC.

The principal steps of the Group reorganisation were as follows:

· On 27 February 2019, the Company was incorporated by Network International LLC for 100 ordinary shares of GBP 1 each.

· On 20 March 2019, Network International LLC transferred investment in Network International Holdings PLC to the shareholders.

· On 29 March 2019, the existing share capital of the Company comprising of 100 shares of GBP 1 each was split 10:1 into 1000 shares of GBP 0.10 each. Subsequently, on the same day, the Company issued 1,396 new shares of GBP 0.10 each for GBP 139 / USD 180. This was followed by a share consolidation resulting in total share capital comprising of 100 shares of GBP 2.396 / USD 3.119592 each. The net effect of this restructuring of capital was to increase the nominal value per share to GBP 2.396 / USD 3.119592 for 100 shares outstanding.

· On 29 March 2019, the Company issued 499,999,900 shares to existing shareholders (254,999,949 to Emirates NBD PJSC and 244,999,951 to WP / GA) of par value GBP 2.396 / USD 3.119592 per share in exchange for acquiring the shares of the subsidiary (Network International Holding 1 Limited) and the shareholder's receivables from Network International Holding 1 Limited. This resulted in the creation of share capital of USD 1,559,795,688 and share premium of USD 6,183,530 (being the difference between the carrying value of the shareholder's receivable of USD 13,614,704 and the corresponding nominal value of shares issued of USD 7,431,174).

· On 1 April 2019, the Company undertook a capital reduction by reducing the nominal value of its shares in issue from GBP 2.396 / USD 3.119592 to GBP 0.1000 per share / USD 0.1302 and cancellation of share premium created above.

The capital reduction resulted in the creation of distributable reserves of USD 1,507,767,530. The difference in the GBP/USD foreign exchange rate between the date of share issuance and capital reduction resulted in the creation of a foreign exchange difference of USD 6,888,000, which would be considered as a realised loss and hence, has been netted off against the Company's retained earnings on the consolidated statement of financial position.

During the year, the Group has increased its share capital. For details, please refer to note 9 of these consolidated financial information.

2 Basis of preparation

(a) Statement of compliance

The financial information set out in this preliminary statement of annual results does not constitute the Company's statutory accounts for the years ended 31 December 2020 or 2019. Statutory accounts for 2019 have been delivered to the registrar of companies, and those for 2020 will be delivered in due course. The auditor has reported on those accounts; their reports were:

i. unqualified,

ii. did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and

iii. did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

(b) Basis of measurement

The consolidated financial information have been prepared under the historical cost basis except for the liability for defined benefit obligation, which is recognised at the present value of the defined benefit obligation and financial assets at fair value through profit or loss which are measured at fair value.

(c) Functional and presentation currency

Items included in the financial information of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The Company's functional currency is GBP.

The presentation currency of the Group is United States Dollar ('USD') as this is a more globally recognised currency and moreover two of the Group's largest entities functional currencies (United Arab Emirates dirhams (AED) for Network International LLC and Jordanian Dinar (JOD) for Network International Services Limited Jordan) are pegged with USD. All financial information presented in USD has been rounded to the nearest thousands, except when otherwise indicated.

(d) New standards and interpretations

New standards and interpretations that are effective

The following amendments and interpretations apply for the first time in 2020, but do not have any significant impact on the consolidated financial information.

- Amendments to IFRS 3: clarify the definition of business

- Amendments to IFRS 7, 9 and IAS 39: addressing issues affecting financial reporting in the period leading up to IBOR reform

- Amendments to IAS 1 and IAS 8: update the definition of material

- Amendments to References to the Conceptual Framework in IFRS Standards:

o Amendments to IFRS 2, IFRS 3, IFRS 6, IFRS 14, IAS 1, IAS 8, IAS 34, IAS 37, IAS 38, IFRIC 12, IFRIC 19, IFRIC 20, IFRIC 22, and SIC-32 to update those pronouncements with regard to the revised Conceptual Framework.

(e) Accounting judgements and estimates

The preparation of consolidated financial information requires Directors to make judgements and estimates that affect the application of accounting policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates

2 Basis of preparation (continued)

(e) Accounting judgements and estimates (continued)

Critical accounting judgements

Accounting judgements made by the Directors in the process of applying the Group's accounting policies, that have the most significant effect on the amounts recognised in the consolidated financial information, are as follows:

i. Specially disclosed items

The Directors have exercised their judgement to identify one-off items, either income or expense in nature, and has separately disclosed these items as specially disclosed items (SDIs) in the notes to the consolidated financial information. The Directors consider the following key criteria when exercising their judgement to classify any items as SDI:

- Whether the item being considered is material and represents one-off / exceptional events that needs to be disclosed separately as SDIs; and

- Will it aid the user of the financial information in understanding the activities taking place across the Group by enhancing the comparability of information between reporting periods.

The Directors classified these items under SDIs to compute underlying metrics (referred as Alternative Performance Measures) to assess the Group's underlying performance on a day-to-day basis, developing budgets and measuring performance against those budgets and in determining management remuneration.

Critical accounting estimates

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period that could have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:

ii. Impairment review of goodwill and non-financial assets

Impairment testing requires the Directors to assess whether the carrying value of assets or a Cash Generating Unit (CGU) can be supported by their recoverable amount (i.e. the greater of value in use or its fair value less costs to sell). An Impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount.

2 Basis of preparation (continued)

Critical accounting estimates (continued)

Goodwill

The Group performs an impairment assessment at least on an annual basis, and more regularly if impairment indicators exist. This requires an estimation of the recoverable amount of the CGU's to which the goodwill is allocated.

The Group has identified Africa and Jordan as two separate CGUs of the Group. The key assumptions considered by the Group in identifying Africa and Jordan as a CGUs included the following:

- The CGUs considered by the Group are the smallest units that includes the asset and generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets.

- Africa and Jordan are the two separate units of the Group to which goodwill has been allocated.

The recoverable amount of an asset or CGU is based on its value in use which is calculated by estimating the future cash flows and discounting them to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to that asset or CGU.

Non-critical judgements and estimates

Following are the accounting judgements and estimates that has been exercised and applied in these consolidated financial information, but does not have most significant effect on the amounts recognised in these consolidated financial information. The brief description of these accounting judgements and estimates and the rationale of not considering these critical judgements and estimates is as follows:

i. Held for sale classification

The Directors classified Mercury Payments Services LLC ('Mercury', a subsidiary of the Group) operations as discontinued operations in 2018 and 2019 and considered as critical accounting judgement. As at 31 December 2020, the management have reassessed its classification in line with IFRS 5 and classified it under continuing operations and therefore, believes that classification of Mercury is no longer a critical judgment area in preparing the consolidated financial information.

2 Basis of preparation (continued)

Non-critical judgements and estimates (continued)

ii. Employee benefits

Employee benefits were considered a significant estimate in 2019. During the year, the Directors have reassessed and concluded that the sensitivity of changing the relevant assumptions used in estimating the employee benefits obligations is not expected to cause a significant risk of material adjustments to the carrying amounts of assets and liabilities within the next financial year. Accordingly, the Directors have classified employee benefits as a non-critical estimate.

The Group's net obligation in respect of defined benefit plans is calculated as the present value of the defined benefit obligation at the end of the reporting period. The present value of the net defined benefit pension obligation is dependent on a number of factors that are determined on an actuarial basis, using a number of assumptions. These assumptions include salary increments, discount rates, and retirement age and mortality rates. The Group's employee benefits obligation as at 31 December 2020 amounted to USD 12.8 million (2019: USD 10.9 million).

The following are the principal actuarial assumptions at the reporting date:

	31 December 2020
Discount rate p.a.	1.75%
Pre-retirement non-death/disability termination rate p.a.	14.5% until end-2020 going down by 0.5% each year to an ultimate rate of 12.5% p.a from 2024 onward
Salary escalation rate p.a.	3.50%
Involuntary termination rate p.a.	Nil
Retirement age	60

2 Basis of preparation (continued)

Non-critical judgements and estimates (continued)

ii. Employee benefits (continued)

Sensitivity analysis

Reasonable possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation as follows:

	(+) 0.5 percentage	(-) 0.5 percentage
Discount rate p.a.	2.25%	1.25%
+ / (-) in defined benefit obligation (in USD '000)	(402)	429

Salary escalation rate p.a.	4.00%	3.00%
+ / (-) in defined benefit obligation (in USD '000)	432	(410)

Voluntary exit rate	Withdrawal rate 9.5% until end-2020 going down by 0.5% each year to an ultimate rate of 7.5% p.a. from 2024 onward	Withdrawal rate 19.5% until end-2020 going down by 0.5% each year to an ultimate rate of 17.5% p.a. from 2024 onward
+ / (-) in defined benefit obligation (in USD '000)	831	(552)

iii. Revenue recognition

The Group has certain non-transaction based project related revenue. The management applied judgement in measuring the progress of the project through internal process to recognise revenue based on the completion of the project. The project related revenue (where the Group applies its judgement in measuring the completion status of the project) is only 2% (2019: 3%) of the total Group's revenue and hence the Directors do not consider this as a critical accounting judgement that has most significant effect in preparing these consolidated financial information.

iv. Impairment of loans and receivables

The Group is following the Simplified approach under IFRS 9 provisioning model for estimating the impairment of financial assets and according to it the Group measures the loss allowance at an amount equal to full lifetime expected credit losses.

2 Basis of preparation (continued)

Non-critical judgements and estimates (continued)

iv. Impairment of loans and receivables (continued)

The Group applies a provision matrix which uses historical loss experience for each trade receivables segment and adjust the historical loss rates for current conditions, and reasonable and supportable forecasts of future economic conditions. The Group has considered receivables outstanding for more than 180 days as default under IFRS 9. The expected credit loss recognised during the year amounted to USD 2.2 million (2019: USD 0.5 million).

The Directors have assessed the sensitivity of the various estimates used in computing the provision including considering changing probability of default (PD) and macroeconomic factors used in the model and concluded that a reasonable possible change in assumptions would not have a material impact.

v. Taxes

The Group's tax charge on ordinary activities is the sum of the total current and deferred tax charges. The calculation of the Group's total tax charge involves estimation and judgement in respect of certain matters particularly on recognising deferred tax assets and uncertain tax position. Judgement and estimation involved in deferred tax mainly relates to the carried forward tax losses which is based on management assessment that it is probable that there will be sufficient and suitable taxable profits in the relevant legal entity against which these tax losses can be set off in the future. Judgement and estimation involved in current tax accruals relates to uncertain tax position until a conclusion is reached with the relevant tax authority or through a legal process.

In the Directors' view, both the recognition of deferred taxes and corporate tax accruals are not considered critical judgement or estimate for these consolidated financial information and it does not have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

vi. Intangible assets and property and equipment - estimation of useful life

Intangible assets (excluding goodwill) and property and equipment represents 15.1% (2019: 19.9%) and 4.0% (2019: 6.1%) of the Group's total assets, respectively. Intangible assets and property and equipment are amortised / depreciated on a straight-line basis in the consolidated statement of profit or loss over their estimated useful lives (except for leased assets which are depreciated over the shorter of the lease term and their useful lives), from the date that they are available for use.

The useful life of these intangible assets and property and equipment depends on management's estimate of the period over which economic benefit will be derived from the asset. Directors assess the useful lives for these assets when they are acquired, based on their prior experience with similar assets and after considering the impact of other relevant factors such as any expected changes in technology. In Directors' view if any of these estimates related to useful life of intangible assets and property and equipment are revised during the year ending 31 December 2020, this is not expected to result in material adjustment to the carrying values of intangible assets. Hence estimates related to useful life of the intangible assets and property and equipment are not considered critical for the purpose of the consolidated financial information.

3 Going concern

The directors have adopted the going concern basis in preparing these consolidated financial information after assessing the principal risks and having considered the impact of COVID-19 on the Group financial performance including under a base case and a severe but plausible downside scenario. The COVID-19 pandemic has significantly impacted the performance of the Group throughout the period, and is discussed in detail in the "Business response to COVID-19".

In making this assessment, the Directors have considered a forecast period of more than 12 months (until June 2022), estimating key performance indicators including revenues, underlying EBITDA, underlying and reported net income, capital expenditure and liquidity position of the Group based upon the known and expected impacts of COVID-19 as of now. The base forecast has been done based on the budget for 2021 approved by the Board. The base forecast excludes the impact of the acquisition of DPO and proceeds of equity raise to the fund the acquisition

The forecast has been done based on assumptions related to key variables including but not limited to Transaction Processing Volumes (TPV), number of cards hosted and transactions processed, which are the key drivers of the Group revenues and cash flows. Both business lines of Merchant Solutions and Issuer Solutions have been impacted differently by the COVID-19 crisis. In Merchant Solutions, Group's revenues are generated through fees dependent upon the value of transactions processed (TPV), as well as through value added services, and overall are very closely correlated to the underlying value of transactions taking place, and hence, significantly impacted with COVID-19 pandemic. While in Issuer Solutions, Group's customers are typically financial institutions, where we have multi-year contracts in place and a number of them have contractual minimums. Therefore our revenues for this business line are somewhat correlated to underlying transaction volumes, but have a greater resilience due to the card hosting and contractually fixed elements.

During the period, the Group has refinanced the syndicated term lending facility. The loan placement was considerably over subscribed by banks with both global and regional presence. The group has additional committed revolving credit lines in place. The Group, continues to have significant liquidity headroom to meet its financial obligations, as described in the 'Chief Financial Officer's Review' section in the strategic report. The Group's leverage ratio also remains below the maximum threshold prescribed under the financing facility agreement in the base case scenario as well as under severe but plausible downside scenario as described below.

The base forecast has been further stress tested by using a severe but plausible downside scenario, to assess the Group's resilience against the possible adverse effect of the continued impact of COVID-19 pandemic on the economy. In the stress scenario, the directors assumed slower economic recovery as compared to the base case forecast and assumed that recovery of financial performance to the level of 2019 could be delayed until mid-2022. The Group forecasted revenues for 2021 and 2022 under stress scenario assumptions are lower than what these would have been prior to onset of COVID-19 pandemic (2019 revenues: USD 335.4 million).

The costs do not go down in the same proportion as decrease in revenues as significant proportion of Group cost base is fixed in nature. This also impacts the headroom available in the Group's leverage ratio. However, with forecast operating cash flow generation and available and committed financing facilities as explained above, leverage ratio remains below the threshold in downside scenario.

3 Going concern (continued)

Furthermore the directors further assessed and concluded that proposed acquisition of DPO Group does not materially impact the headroom available in the Group's leverage ratio under the base case and the severe but plausible downside scenario.

Having considered the above factors, the Directors have a reasonable expectation that the Group have adequate resources to remain in operation for at least 12 months from the approval of these consolidated financial information and therefore continue to adopt the going concern basis in preparing the consolidated financial information.

4 Alternative performance measures

The Group uses these Alternative Performance Measures to enhance the comparability of information between reporting periods either by adjusting for uncontrollable or one-off items, to aid the user of the financial information in understanding the activities taking place across the Group. In addition these alternative measures are used by the Group as key measures of assessing the Group's underlying performance on day-to-day basis, developing budgets and measuring performance against those budgets and in determining management remuneration.

4.1 Specially disclosed items

Specially disclosed items (SDIs) are items of income or expenses that have been recognised in a given period which management believes, due to their materiality and being one-off / exceptional in nature, should be disclosed separately, to give a more comparable view of the period-to-period underlying financial performance.

Certain items that were previously reported as SDIs have been reconsidered and the Directors are no longer reporting them as SDIs. These items are i) expenses relating to reorganisation, restructuring and settlement ii) unrealised loss / (gain) from re-measurement of foreign currency denominated assets or liabilities iii) amortisation associated with the IT transformation programme.

4 Alternative performance measures (continued)

4.1 Specially disclosed items (continued)

The table below presents a breakdown of the specially disclosed items for each of the years ended 31 December 2020 and 2019.

	2020 USD'000	2019 USD'000	2019 Reclassification⁴ USD'000	2019 Previously reported USD'000
Items affecting EBITDA
Reorganisation, restructuring and settlements	-	-	2,132	2,132
Share-based compensation¹	10,445	10,679	-	10,679
M&A and IPO related costs²	7,696	16,111	-	16,111
Other one-off items	-	-	1,894	1,894
Total SDIs affecting EBITDA	18,141	26,790	4,026	30,816

Items affecting Net Income
Amortisation related to IT transformation	-	-	10,735	10,735
Amortisation of acquired intangibles³	4,204	4,202	-	4,202
Total SDIs affecting net income	4,204	4,202	10,735	14,937

Total specially disclosed items	22,345	30,992	14,761	45,753

1 Includes charge for the year in relation to the Management Incentive Award Plan, IPO Cash Bonus, and Long Term Incentive Plan, all of which were specific one-off payments relating to the listing.

2 These are one-off expenses incurred in relation to proposed acquisition of DPO (2019: expenses related to the Initial Public Offering including fees paid to various advisors).

3 Amortisation charge on the intangible assets (acquired under business combination) recognised in the Group's consolidated statement of financial position as part of the Group's acquisition of Emerging Market Payments Services ('EMP') in 2016.

4 Specially Disclosed Items: below items are no longer classified as SDIs.

a) Reorganisation, restructuring and settlements: these expenses are not material in the period, nor are they anticipated to be material in future periods. The Group no longer believes it is necessary to report such items separately, and they are therefore classified within underlying expenses.

b) Unrealised foreign exchange (gains/losses): arise mainly in relation to FX volatility. As these are not material in the current or prior periods, and are expected to remain immaterial in future periods, the Group no longer believe it is necessary to report separately as an SDI.

c) Amortisation related to IT transformation: The IT transformation was a historic one-off capital investment project that included the development of a new technology and card management platform, the Group's proprietary payment gateway, and a significant upgrade to the switching system. Following completion of the project, and in response to shareholder feedback regarding the classification of this item, amortisation related to the IT transformation has now been classified within underlying depreciation and amortisation.

4 Alternative performance measures (continued)

4.2 Underlying EBITDA

Underlying EBITDA is defined as earnings from continuing operations before interest, taxes, depreciation and amortisation, write-off of unamortised debt issuance cost, unrealised foreign exchange losses, share of depreciation of associate and specially disclosed items affecting EBITDA. The table below presents a reconciliation of the Group's reported profit from continuing operations to underlying EBITDA for each of the years ended 31 December 2020 and 2019.

	2020	2019
	USD'000	USD'000
Profit from continuing operations	5,598	57,317
Depreciation and amortisation	51,537	46,817
Write-off of unamortised debt issuance cost	6,721	-
Net Interest expense	21,669	24,844
Unrealised foreign exchange losses	328	1,894
Taxes	4,704	6,638
Share of depreciation from associate	3,863	4,222
Specially disclosed items affecting EBITDA	18,141	26,790
Underlying EBITDA	112,561	168,522

4.3 Underlying EBITDA margin excluding share of associate

Underlying EBITDA margin excluding share of associate represents the Group's underlying EBITDA margin which is considered by the Group to give a more comparable view of period-to-period EBITDA margins. The table below presents a computation of the Group's underlying EBITDA margin, which is defined as underlying EBITDA before share of associate divided by the revenue.

	2020	2019
	USD'000	USD'000

Revenue	284,844	335,379

Underlying EBITDA	112,561	168,522
Share of EBITDA of associate	(9,683)	(9,521)
Underlying EBITDA before share of associate	102,878	159,001
Underlying EBITDA margin excluding share of associate	36.1%	47.4%

4 Alternative performance measures (continued)

4.4 Underlying net income

Underlying net income represents the Group's profit from continuing operations adjusted for write-off of unamortised debt issuance cost and specially disclosed items. Underlying net income is considered by the Group to give a more comparable view of period-to-period profitability.

The table below presents a reconciliation of the Group's reported profit from continuing operations to underlying net income for each of the years ended 31 December 2020 and 2019.

	2020	2019
	USD'000	USD'000

Profit from continuing operations	5,598	57,317
Write-off of unamortised debt issuance cost	6,721	-
Specially disclosed items affecting EBITDA (refer to note 4.1)	18,141	26,790
Specially disclosed items affecting net income (refer to note 4.1)	4,204	4,202
Underlying net income	34,664	88,309

4.5 Underlying earnings per share (EPS)

The Group's underlying EPS is defined as the underlying net income (as explained above) divided by the weighted average numbers of ordinary shares at the end of the relevant financial year.

	2020	2019

Underlying net income (USD'000)	34,664	88,309
Weighted average number of shares ('000)	520,833	500,000
Underlying EPS (USD cents)	6.7	17.7

4.6 Capital expenditure

The table below provides the split of total capital expenditure into the IT transformation programme, growth and maintenance capital expenditure for 2020 and 2019. Growth and maintenance capital expenditure collectively are referred to as core capital expenditure (ex. IT transformation).

	2020	2019
	USD'000	USD'000

Total capital expenditure	46,470	84,265
Core capital expenditure	46,470	45,662
of which is maintenance capital expenditure	21,038	25,725
of which is growth capital expenditure	25,432	19,937
IT transformation capital expenditure	-	38,603

4 Alternative performance measures (continued)

4.6 Capital expenditure (continued)

Reconciliation of capital expenditure to the cash spend in the consolidated cash flows

	2020	2019
	USD'000	USD'000
Total capital expenditure	46,470	84,265
Goods and services received in the current period, but yet to be paid
Transformation capital expenditure	-	(7,296)
Growth and maintenance capital expenditure	(12,639)	(12,959)
Goods and services received in the previous period, and paid in the current period
Transformation capital expenditure	7,296	8,711
Growth and maintenance capital expenditure	8,937	6,589
Total Consolidated Capital Expenditure Spend (as per Cash flows)	50,064	79,310

4.7 Underlying free cash flow

Underlying free cash flow is calculated as underlying EBITDA adjusted for changes in working capital before settlement related balances, taxes paid, core capital expenditure, SDI affecting EBITDA and Adjustment for share of EBITDA of associate, less dividend. The Group uses underlying free cash flow as an operating performance measure that helps management determine the conversion of underlying EBITDA to underlying free cash flow.

	2020	2019
	USD'000	USD'000

Underlying EBITDA	112,561	168,522
Changes in working capital before settlement related balances	19,581	(9,625)
Taxes paid	(6,058)	(10,415)
Core capital expenditure	(46,470)	(45,662)
Specially disclosed Items affecting EBITDA	(18,141)	(26,790)
Adjustment for share of EBITDA of associate, less dividend	(9,683)	(6,798)
Underlying free cash flow	51,790	69,232

4 Alternative performance measures (continued)

4.8 Reconciliation of cash flows from operating activities to Underlying free cash flow

	2020	2019
	USD'000	USD'000

Net cash inflows from operating activities	107,500	132,426

Less: Cash flows included in the statutory cash flows but not in the Underlying free cash flows
Changes in settlement related balances, long term receivables and other liabilities	(19,942)	(35,405)
Charge for share based payment	(4,070)	(1,404)
Add: Cash flows included in the statutory cash flow but not in the Underlying free cash flow
Dividends received from associate	-	2,723
Interest Paid	16,985	21,300
Others*	(2,213)	(4,746)
Underlying free cash flow before capital expenditure	98,260	114,894
Core capital expenditure	(46,470)	(45,662)
Underlying free cash flow	51,790	69,232

* Others include provision for expected credit losses, foreign exchange gains and losses, and loss from discontinued operations.

4.9 Underlying effective tax rate

The Group's underlying effective tax rate is defined as the underlying taxes as a percentage of the Group's underlying net income before tax. The underlying effective tax rate for the Group for 2020 and 2019 was 11.9 % and 7.0%, respectively.

	2020	2019
	USD'000	USD'000
Underlying net income before tax	39,368	94,947
Taxes	4,704	6,638
Underlying effective tax rate	11.9%	7.0%

5 Segment reporting

IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Chief Operating Decision Maker (Network Leadership Team) and the Board of Directors to allocate resources and assess performance. For each identified operating segment, the Group has disclosed information that is assessed internally to review and steer performance.

The Group manages its business operations on a geographic basis and reports two operating segments, i.e. i) Middle East and ii) Africa. The Group reviews and manages the performance of these segments based on total revenue and contribution for each operating segment. Contribution is defined as segment revenue less operating costs (personnel cost and selling, operating and other expenses) that can be directly attributed to or controlled by the segments. Contribution does not include allocation of shared costs that are managed at group level and hence shown separately under central function costs.

31 December 2020	Middle East	Africa	Non-attributable	Total

Statement of profit or loss
Revenue	198,224	80,020	6,600*	284,844

Contribution	129,934	54,314	6,660	190,848
Contribution margin (%)	65.5%	67.9%	-	67.0%
Central functions costs	-	-	(95,019)	(95,019)
Specially disclosed items affecting EBITDA	-	-	(18,141)	(18,141)
Depreciation and amortisation	-	-	(51,537)	(51,537)
Share of profit of associate	-	-	5,820	5,820
Net interest expense	-	-	(21,669)	(21,669)
Taxes	-	-	(4,704)	(4,704)
Profit from continuing operations	129,934	54,314	(178,650)	5,598

* USD 6.6 million (2019: Nil) relates to the revenue derived from solutions developed as part of the Mastercard strategic partnership.

5 Segment reporting (continued)

31 December 2020	Middle East	Africa	Non- attributable	Total
Statement of financial position	--------------------------------USD'000 --------------------------

Current assets	187,697	23,613	473,331	684,641
Non-current assets	33,387	3,142	527,559	564,088
Total assets	221,084	26,755	1,000,890	1,248,729

Current liabilities	193,454	5,632	159,235	358,321
Non-current liabilities	12,996	-	379,450	392,446
Total liabilities	206,450	5,632	538,685	750,767

31 December 2019	Middle East	Africa	Non-attributable	Total
	----------------------------- USD'000-------------------------
Statement of profit or loss
Revenue	244,833	90,546	-	335,379

Contribution	178,429	63,964	-	242,393
Contribution margin (%)	72.9%	70.6%	-	72.3%
Central functions costs	-	-	(85,286)	(85,286)
Specially disclosed items affecting EBITDA	-	-	(26,790)	(26,790)
Depreciation and amortisation	-	-	(46,817)	(46,817)
Share of profit of associate	-	-	5,299	5,299
Net interest expense	-	-	(24,844)	(24,844)
Taxes	-	-	(6,638)	(6,638)
Profit from continuing operations	178,429	63,964	(185,076)	57,317

5 Segment reporting (continued)

31 December 2019	Middle East	Africa	Non-attributable	Total
Statement of financial position	----------------------------- USD'000 ---------------------

Current assets	227,521	28,975	116,770	373,266
Non-current assets	42,321	2,108	519,242	563,671
Total assets	269,842	31,083	636,012	936,937

Current liabilities	205,167	10,357	244,757	460,281
Non-current liabilities	11,722	-	226,228	237,950
Total liabilities	216,889	10,357	470,985	698,231

Middle East

The Group's primary market in the Middle East region is UAE whereas the second most significant market is Jordan. In both the markets, the Group provides Merchant Acquiring, Acquirer Processing and Issuer Solutions services to various financial and non-financial institutional clients.

Africa

Under Africa region, the Group's key sub-markets are North Africa, Sub-Saharan Africa and Southern Africa.

(i) North Africa

One of the most significant markets in North Africa is Egypt. The Group currently provide services to several of Egypt's leading financial institutions, for both their Merchant Acquiring and Issuer Solution needs. North Africa contributed 47% of the total Africa Revenue in 2020 (2019: 47%).

(ii) Sub-Saharan Africa

One of the most significant markets in sub-Saharan Africa is Nigeria where the Group has an established presence serving several of Nigeria's leading financial institutions, mainly providing Issuer Processing services. Sub-Saharan Africa contributed 36% of the total Africa Revenue in 2020 (2019: 32%).

(iii) Southern Africa

The significant market in Southern Africa is South Africa, where the Group provides retail processing services. South Africa contributed 17% of the total Africa Revenue in 2020 (2019: 21%).

Major Customer

The Group's major customer is Emirates NBD PJSC and its subsidiaries whose revenue accounts for approximately 21.4% (2019: 18.1%) of the total Group revenue (refer to note 10). All of the revenue of Emirates NBD PJSC comes from Issuer Solutions and are included under the Middle East segment. Please refer to note 10 for the split of revenues by business lines (i.e Merchant and Issuer solutions).

6 Scheme debtors and merchant creditors

Scheme debtors and merchant creditors represent intermediary balances that arise as part of the daily settlement process related to Network's direct acquiring business and processing of transactions on behalf of Network's issuer processing and acquirer processing clients in accordance with contractual arrangements.

	2020	2019
	USD'000	USD'000

Scheme debtors	165,436	185,268
Restricted cash	52,550	54,029
Merchant creditors	(165,142)	(167,167)
Settlement balances on-hold*	(51,688)	(53,245)
Other merchant creditors	(113,454)	(113,922)
Settlement related working capital balances	52,844	72,130

* Represents the off-set balance to restricted cash

Scheme debtors

Scheme debtors consist primarily of the Group's receivables from the issuer banks, card schemes for transactions processed for merchants; and settlement related receivable from issuer processing clients for amounts settled to card schemes on their behalf.

Merchant creditors

Merchant creditors consist primarily of the Group's liability to merchants for transactions that have been processed but not yet settled including any deferred settlements or amounts withheld to cover chargeback risks. This also includes balances received from card schemes to be settled to acquirer processing clients.

The Group has limited ability to influence the working capital related to scheme debtors and merchant creditors, (which is referred to as settlement related balances), on a day-to-day basis, as these are principally driven by the volume and mix of transactions and the time elapsed since the last clearing by card issuers/payment schemes, which is why these balances fluctuate from one reporting date to another.

Scheme debtors and merchant creditors balances are reflective of a snapshot in time at a period end. The balances and their relative movements can be determined by: i) the day of the week on which period end falls. For example, if the period end falls on a weekend, when banks are closed in the US but open in the UAE, this causes an extra day delay (T+2/3) in receipt of funds through the scheme settlement processes; ii) proportion of merchants who are not settled on a daily basis; iii) TPV in the last few days prior to the period end; iv) currency mix of TPV and receipt of such funds through the scheme settlement process.

7 Cash and cash equivalents and restricted cash

7.1 Cash and cash equivalents

Cash and cash equivalents include cash on hand, unrestricted balances held with banks and highly liquid financial assets with original maturities of less than three months, which are subject to an insignificant credit risk, and are used by the Group in the management of its short-term commitments. Cash and cash equivalents are carried at amortised cost in the consolidated statement of financial position.

	2020	2019
	USD'000	USD'000
Cash and cash equivalents	398,781	45,473

7.2 Restricted cash

Restricted cash largely includes amounts payable for deferred settlements of transactions to merchants and other third parties that has been withheld in accordance with its contractual rights or otherwise remained unpaid not in ordinary course of business and are eventually payable on demand or as mutually agreed. The breakup of restricted cash is as follows:

	2020	2019
	USD'000	USD'000

Settlement balances on-hold	51,689	53,245
Cash collaterals and collaterals against bank guarantees	861	784
	52,550	54,029

8 Borrowings

The Group's total borrowings amounted to USD 434.5 million (2019: USD 377.4 million).

During the period, the Group refinanced the syndicated debt facility with a syndicate of 16 banks who have both a global and regional presence. The refinancing was conducted for the purposes of providing the Group with a larger facility and increased liquidity to fund growth accelerator projects, as well as for general corporate purposes. The new facility carries similar interest rates and the same financial covenants as the prior facility.

The facility is for USD 525 million and replaced the Group's USD 350 million term financing facility, which had a drawn down balance of USD 289 million on 31 December 2019. The new facility consists of both AED and USD tranches of conventional financing and one USD tranche of Islamic financing facility. The facility carries a quarterly coupon rate of EIBOR plus margin on the AED conventional financing and LIBOR plus margin on the USD conventional financing and equivalent on the Islamic finance tranche. The margin is calculated by reference to the Leverage (net debt / underlying EBITDA, as per definition and methodology provided in the financing documents), based on a grid which provides for reduced pricing as Leverage of the Group reduces and vice versa. The margin was initially set at 1.95% per annum applicable on the AED conventional financing and 2.20% per annum applicable on the USD conventional and Islamic financing tranches.

8 Borrowings (continued)

Financial covenants limits are set to 3.5x net debt: underlying EBITDA. The facility has a tenor of six years. Principal repayments will commence in 2022.

The revolving credit facility was availed in November 2019, syndicated with three banks for general corporate funding purposes and carries an applicable interest period coupon rate of LIBOR plus a leverage linked margin, currently at 2.10% (2019: 1.85%). During the year, the Group have drawn an additional USD 40 million which was subsequently repaid. This has been classified as current liability.

The table below provides a breakdown of the borrowings:

	2020	2019
	USD'000	USD'000
Term loan
Principal outstanding	375,000	288,744
Unamoritised debt issue cost	(6,134)	(7,814)
Net amount included in borrowings	368,866	280,930
Revolving credit facility	35,000	35,000
Lease liability	925	1,619
Bank overdraft (for working capital)	29,681	59,895
Total	434,472	377,444

Split into:
a) Term loan
-Non-current portion [a]	368,866	210,930
-Current portion [b]	-	70,000
Sub Total	368,866	280,930

b) Revolving credit facility
-Current portion [b]	35,000	35,000
Sub Total	35,000	35,000

c) Lease liability
-Non-current portion [a]	159	853
-Current portion [b]	766	766
Sub Total	925	1,619

Bank overdraft (for working capital) [b]	29,681	59,895
Total	434,472	377,444
As per consolidated statement of financial position
Non-current borrowings [a]	369,025	211,783
Current borrowings [b]	65,447	165,661
Total	434,472	377,444

9 Share capital and reserves

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity.

	2020	2019
	USD'000	USD'000
Issued and fully paid up
550,000,000 shares of GBP 0.10 each (2019: 500,000,000 shares of GBP 0.10 each)	71,557	65,100

On 31 July 2020, the Company has issued additional shares capital equivalent to 50 million shares. The shares were issued at a price of USD 5.3 per share (GBP: 4.1 per share; par value: GBP 0.10 each). Accordingly, the Company's share capital has increased by USD 6.5 million and the Company has recognised share premium of USD 258.3 million, out of which an amount of USD 6.0 million has been set off in relation to the costs that are directly attributable to the issuance of additional share capital.

Reserves comprise of the following:

Foreign exchange reserves amounted to USD (19.4) million (2019: USD (20.1) million), include the cumulative net change due to changes in value of subsidiaries functional currency to USD from the date of previous reporting period to date of current reporting period.

Reorganisation reserve amounted to USD (1.5) billion (2019: USD (1.5) billion, includes the reserve created as part of restructuring undertaken by the Group in 2019.

Other reserves includes statutory reserve amounting to USD 7.5 million (2019: USD 7.3 million) and fair value reserve amounting to USD (2.7) million (2019: USD (1.4) million). Statutory reserve are the reserves representing a proportion of profit that are required to be maintained in subsidiary companies based on the local regulatory laws of the respective countries in which the Group operates.

10 Revenue

Merchant solutions

Under Merchant Solutions, the Group provides a broad range of technology-led payment solutions to its merchants through a full omni-channel service allowing them to accept payments of multiple types, across multiple payment channels. The Group offers functionality in most aspects of payment acceptance, whether in-store, online or on a mobile device, by providing access to a global payments network through its agile, integrated, secure, reliable and highly scalable technology platforms, Network One and Network Lite. The Group's Merchant Solutions business comprises its direct acquiring businesses and acquirer processing services, whereby the Group provides processing for its financial institutions direct acquiring business. The Group generates both, transactional and non-transactional revenue (refer below for detail) under Merchant Solutions.

Issuer Solutions

Through its Issuer Solutions business line, the Group provides a range of innovative card products and services to its consumers. The Group provides its issuer solution customers with a comprehensive proposition supporting all components of the card issuing value chain, including account hosting, transaction processing, settlement, reconciliation, chargebacks and other ancillary services. The Group provides its issuer solution customers with the ability to open card accounts for consumers and issue and create a range of card products, including credit, debit, Islamic, pre-paid and digital/virtual cards. The Group also provides support for its issuer solution customers to enable them to host and manage a large portfolio of card product solutions ranging from simple card usage to VIP card products, including highly configurable and personalised usage. The Group generates both, transactional and non-transactional revenue (refer below for detail) under Issuer Solutions.

For both Merchant and Issuer solutions, the Group's sources of revenue can be broadly categorised into transaction based revenue and non-transaction based revenue.

· Transaction based revenue: includes revenue generated through a combination of: (a) a Gross Merchant Service Charge (MSC), charged to the merchant on the total processed volume (TPV); (b) a fee per transaction processed and billed, (c) a fee per card hosted and billed and (d) fees for the provision of Value Added Services including foreign exchange services. The revenue is reported on a net basis, i.e., after the deduction of interchange and scheme fees paid to the card issuer and payment schemes, respectively. The transactional based revenue are recognised at a point in time in line with the group accounting policy.

Interchange fees are the fees that are paid to the card issuing banks which are generally based on transaction value, but could also be a fixed fee combined with an ad valorem fee. Scheme fees are the fees paid to the payment schemes for using cards licensed under their brand names and for using their network for transaction authorisation and routing.

10 Revenue (continued)

· Non-transaction based revenue: which includes but not limited to revenue generated through provision of various value-added services (those that are fixed periodic charge), rental from point-of-sale (POS) terminals and project related revenue.

The non-transactional based revenue is recognised at a point in time or over time depending upon the type of service being provided, contractual terms and timing when the performing obligation is met by the Group, in line with the group accounting policy.

The Group recognises the revenue over time mainly in the following cases:

§ Project related revenue, where the Group provides service to develop or enhances the tangible / intangible assets which is short term in nature; and

§ Other services provided by the Group where customer simultaneously receives and consumes the benefits as and when the Group performs its obligation.

The breakdown of revenue is as under:

	2020	2019
	USD'000	USD'000

Merchant solutions	109,415	152,955
Issuer solutions	165,011	177,572
Other revenue	10,418	4,852

	284,844	335,379

11 Earnings per share (EPS)

Basic earnings / (loss) per share amounts are calculated by dividing the profit / (loss) attributable to owners of the parent by the weighted average number of ordinary shares in issue during the financial period.

Diluted earnings / (loss) per share amounts are calculated by dividing the profit / (loss) attributable to owners of the parent by the weighted average number of ordinary shares in issue during the financial period adjusted for the effects of potentially dilutive options.

The basic and diluted earnings per share is based on earnings of USD 6.2 million (2019: USD 57.6 million), USD 6.2 million for continuing operations (2019: USD 57.9 million) and nil for discontinued operations (2019: USD (0.4) million).

During the year Company issued 50.0 million new ordinary shares and earnings per share is computed on weighted average number of 520.8 million shares (2019: 500,000,000 million shares). For 2019, there was no change in the number of shares used in the calculation of weighted average number of shares in issue because the principles of reverse acquisition were applied in accordance with IAS 33, following the Group reorganisation in April 2019 prior to the Group's listing in London Stock Exchange. For details on the Group reorganisation, please refer to note 1.

11 Earnings per share (EPS) (continued)

There is no change in the basic and diluted (EPS). The diluted earnings per share have been calculated after considering potential dilutive options for Group scheme for employee's shares based payment.

The profit attributable to the equity holders for the year ended 31 December 2020 is based on weighted average number of 520,833,333 shares (2019: 500,000,000 shares).

	2020	2019
	USD cents	USD cents

Earnings per share (basic and diluted)	1.2	11.5
Earnings per share - Continuing operations (basic and diluted)	1.2	11.6
Earnings per share - Discontinued operations (basic and diluted)	-	(0.072)

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END

FR SSSFWWEFSEID

Preliminary Financial Results 2020

Consolidated statement of financial position

Consolidated statement of profit or loss

Consolidated statement of other comprehensive income

Consolidated statement of changes in equity

Consolidated statement of changes in equity (continued)

Consolidated statement of cash flows

Consolidated statement of cash flows

1 Legal status and activities

2 Basis of preparation

(a) Statement of compliance

(b) Basis of measurement

(c) Functional and presentation currency

(d) New standards and interpretations

(e) Accounting judgements and estimates

2 Basis of preparation (continued)

(e) Accounting judgements and estimates (continued)

2 Basis of preparation (continued)

2 Basis of preparation (continued)

2 Basis of preparation (continued)

2 Basis of preparation (continued)

3 Going concern

3 Going concern (continued)

4 Alternative performance measures

4.1 Specially disclosed items

4 Alternative performance measures (continued)

4.1 Specially disclosed items (continued)

4 Alternative performance measures (continued)

4.2 Underlying EBITDA

4.3 Underlying EBITDA margin excluding share of associate

4 Alternative performance measures (continued)

4.4 Underlying net income

4.5 Underlying earnings per share (EPS)

4.6 Capital expenditure

4 Alternative performance measures (continued)

4.6 Capital expenditure (continued)

4.7 Underlying free cash flow

4 Alternative performance measures (continued)

4.8 Reconciliation of cash flows from operating activities to Underlying free cash flow

4.9 Underlying effective tax rate

5 Segment reporting

5 Segment reporting (continued)

5 Segment reporting (continued)

Africa

7 Cash and cash equivalents and restricted cash

8 Borrowings

8 Borrowings (continued)

9 Share capital and reserves

10 Revenue

10 Revenue (continued)

The breakdown of revenue is as under:

Other revenue

11 Earnings per share (EPS)

11 Earnings per share (EPS) (continued)

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Network International Holdings PLC (NETW)

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