Banqup Group SA (BANQ) Earnings Call Transcript & Summary

Good afternoon, everyone, and welcome to our Strategy Day. We're delighted to you joining us online. And I just want to introduce myself, I'm Alex Nicoll, Investor Relations at Unifiedpost. Today, we're having an exciting agenda planned for you. We'll discuss Unifiedpost's strategy, recent developments and future prospects. We aim to provide you a comprehensive understanding of where we stand and where we are headed. The presentation will last approximately 1.5 hours, and then we'll open the floor to Q&A for 30 minutes. If we overrun slightly on the presentation, we might -- we might go over in time to ensure there's enough time to answer all the questions. During the presentation, please use the chat to submit your questions, which we will answer at the end. Before we begin the presentation, I would like to draw your attention to the disclaimer on Slide 2, which has set up the legal framework under which this presentation must be considered and which I will assume you have read. I will now hand you over to our CEO and Founder, Hans Leybaert.

Thank you, Alex. Welcome, everybody on this strategy update session. Today, we want to give you an overview of where we stand and what is -- what will the future bring? So first of all, we want to give you a clear message about our core business and the core business where we grow to and how it can bring us to a very profitable company and how we can build that company as a sustainable business with long-term and independent focus. So secondly, we understand that we -- our business model is quite regulation dependent. However, underlying, there are quite some business drivers which are within a modular approach, also important business drivers without being dependent on this regulation. So we want to crystallize this untapped potential, give more insight in this and make and show you that this model can works in a modular approach and on the other hand, an integrated approach based on invoicing. Of course, the operational execution of all this is crucial to make that we can realize all these opportunities and all the onboardings that come to us. On the governance level, we are -- our reality is constantly changing. The mix of shareholders is changing, so our governance is always open for introspection and open to get aligned to the exact reflection of our shareholdership, including or complemented with independent board members. The past 4 years, I have to stress that we have worked together in a very prosperous way and a very cooperative way and I thank actually the team to get here because it was not always a difficult -- an easy period, quite complex because of different circumstances, but we achieved what we needed to achieve to get here, to get here to grab that big opportunity of digitization in the future. So always open to reflect on it, always open to reflect on the team, always with the goal to realize the plan that we have. Point four, important here. A proactive stakeholder engagement. I must say that -- or I must admit here that this could be better. So in the past, clarifying our model, explaining where we work on and what could -- what we are trying to achieve, it was not always -- that's not always the best way how to present and represent it to the outside world. There is certainly room for improvement. Also, on the model and the accountability and the transparency level, we can improve the model. So we hope that we can bring you to a level that you will give you more insight in our business, the business drivers and how our model will evolve what it is today and how it will evolve in the future. So taking a few steps back, we -- of course, we are on a long track since 2000, but of course, the IPO was a crucial point in time and changed our reality so let's reflect from there and see where we stand. On the first place, we had an IPO and if I look to the initial ambitions in the prospectus and the corresponding stock price, it's fair to say that we underperformed that the results are ideal. We can always find reasons for this, but of course, there was a macroeconomical circumstances but -- and the impact of the delay in France impacted our short-term figures. But on the other hand, we executed our plan to become a pan-European player, building a state-of-the-art technology that can bring us for -- that will guarantee a future for the coming 10, 20 years. And so that makes that parallel to that on the first glance, underperforming figures, we have really built a company that's ready for taking the opportunity of the digital age. ViDA, VAT in the digital age will be approved in the coming days by the European Commission, which makes -- that's really kicking off the digitization of our business. [Technical Difficulty] was the necessary step to have the right technology in-house for digital communication. We come from a hybrid world where PDF and e-mail were the standards, and we go to full data communication. There were only a few players in this market. Pagero was one of them recently bought by Thomson Reuters, Crossinx was another one and market leader in Germany at the same time. I see this more as a strategic partnership with the shareholders of Crossinx because they were paid more than half in shares, which makes that they joined our long-term vision and our long-term approach to make a pan-European platform for digitization. To get there, to get this all integrated to make that one company also from an organizational level and on a technology level, we had to attract a bridge financing, bridge financing from Francisco Partners initially seen as quite expensive but it is a bridge financing. On that moment, it wasn't -- we were not ready to have traditional bank financing because it's a bridge to a business model that can bring this to a level that is -- it becomes bankable. So this bridge financing is a facility over 5 years, still 3 years to go with -- yes, the step also a bit the reason of the underperformance. The delay in France, which was a key item in our prospectus but again, the opportunity of France is not away. It's only postponed, and it's even more anchored because the partnership that we had in time with accounting association in France has turned out now in a joint venture that we have with the accounting association, which is called JeFacture, and which is actually the host of eFaktura where we go in detail afterwards. So today, following colleagues will join me in explaining our business. On the first place, our new CFO, Koen De Brabander. He will explain you the financial framework and how we can translate our business model in a simple model to extrapolate what our business will reflect in the future. Jan responsible for international business, will give you an insight in the different models on invoices, to corporates, to SMEs and also on the government models where -- because some countries choose for a centralized government-driven model. Very important, still small, but huge opportunity, the ultimate leverage on our e-invoicing layer is payments. So Arthur, CEO of Unifiedpost payments and the regulated payment institute will give you some details and insights in our payments business. Finally, David will give you as Director of Strategy, a detailed overview of our -- implementation of our strategy and how we turn our vision into practice. So the topics of today then, of course, the business model, what's our core business -- what's our core business and what is not core and how we want to handle this in the future. The value chain that we have, like I said in the beginning, a modular approach or an integrated approach or a step-up model from modular to integrated, and of course, digitization as the catalyst for growth. Invoicing, it's only the start for a full digital working -- full digital interaction between buyer and supplier. So invoicing as the catalyst for grow in a lot of directions and dimensions. Scalability readiness, the plus 25 million companies, 25 million independents in the EU must go over in the coming 5, 7 years towards this -- towards full digitization. It's an absolute must to have a platform which is -- which can absorb this massive amount of connectivities of members of the network, so scalability, self-service is crucial in this approach. We have to do this in a -- with a cost discipline approach, getting that breakeven position because like I said, regulation can delay. We have a modular approach, but cost discipline is crucial to further elaborate the company if you have a long-term independent strategy. Financial commitment with -- where we explained the financial framework to ensure the cash generation and meet the medium-term targets. So let's remain on the digital services, our core services. They are built around 5 pillars: the e-invoicing as such, e-invoicing as a service. The payments, complementary to this and relatively new, the reporting because tax compliance becomes a very important topic and it's immediately related to real-time invoicing. Nothing without a strong identity. Business identities are a core element in digitization without a secure identity, secure services, digital services are not an option. Finally, we will zoom in on the government platforms, which is actually complementary to invoicing as a service. Countries -- some countries choose for buying a license and install it and give it for free to their businesses. That's -- and there, we also have a proposition. So actually, we fade away from hybrid digital services, PDF, e-mail, and, of course, paper towards this core digital services. So first of all, we have a divestment. We are now in some divestment cases. Why? Actually, we did an acquisition track where we wanted to step in, in the market by, let's say, step in the hybrid communication. Why? That secures the volumes. A paper invoice will become an electronic invoice somewhere over time, so stepping in this business, locking in the customers and getting footprint in a country from where we can build the network, that was the rationality to do the investments and acquisitions in 2021, -- '21, '22. So now we are [Technical Difficulty] be the rationale that we bought that company if we push it away. It's -- the goal was always to make the step up towards full digital. I think the recent announcement now of 21 grams where we are in discussions with PostNord, it shows what we want to achieve there. The print and post and the postal and parcel service goes to the company, which is best placed to manage this but at the same time, we made a partnership to serve these customers for our full B2B proposition. So it's on one hand, putting the hybrid business on the right place and on the other hand, it's making -- unlocking a very important Nordic market with the right party who has the customers and where we can do upselling from the -- from their existing customer relationship and their existing services. So there are some divestments with a different nature. It can go from postal and parcel, it can go from -- with Fitekin, we have the robotic accounting, which is not our core business, but the network for e-invoicing, it's core. So it goes hand in hand, partnership on the network, robotic accounting as a divestment and we continue the business together. So different techs are running, and it's a high priority in '24 to conclude them all so that we can -- so that we can have filtered out our real core business. Of course, there are proceeds coming in, which makes that we reduce our net debt, and we can strengthen our cash position complementary to the business model that develops themselves, which makes that our balance sheet becomes lighter and we can reflect on how we finance our business in the future. So on the core business, I talked about invoicing, payments, identity reporting. But like I said, the 4 topics are only a catalyst for -- of 4 broader services. We are stepping in a world where everything will be digital, everything will be data. That's very, very simple. From quote to cash, it must be all integrated, all real time and it will be all data. Data that can be analyzed, that kind of artificial intelligence on top it, but fully integrated full data, order to cash, procure to pay, it will be all data exchange instead of PDF paper exchange. Additional services or in this order to cash flow, additional services like cash optimization, like complementary to payments, of course, working capital financing or extra services that can be plugged in on top of it. So once digital, there is a whole world opening that for additional services to streamline the full process of doing business. So our goal is to build that network with these 4 triangles in hand and actually work out a network. E-Reporting with the complexity of product data management, tax regimes, different taxes, VAT, plastic tax, all these things must be incorporated in that central model. We want to do this -- and that's quite ambitious, we want to do this for any type of business. And that's a bit different from our competition, who one parties focus or on small businesses or on larger businesses. We focus on every type of misses. Why? Because we believe that a small business communicates with a large business and refer. So we have to serve any type of needs for whatever business. So that makes that we incorporate a few different models because if you go from a massive subscription-based model for hundred thousands of businesses, that's different from a corporate that buys a solution for the -- for being compliant on a global scale. Yes, that's another sales process. All these types of sales processes require a typical partnerships, partnerships, accountants for SMEs, consultancy companies for larger businesses, so we try to build out a network of partners that can leverage on our platform to give the right solutions to our customer base. Last but not least, always behind an identity. No secure services without a strong identity. eIDAS 2.0, which is a European regulation on identity will become an obligation for every member state of the EU by '26, may be within 18, 20 months. And then we can rely on strong identities for any person individual, and we upgraded to the level of businesses. We will zoom on this -- zoom in on this in our further explanation. So like I said, and that's a bit -- that's important for today to understand and to explain is that this integrated approach is not or nothing approach. No one steps in with taking the 4 triangles at the same time. So that's why we have incorporated in our model actually a gradual upgrade. We will give you an example of pure the identity case, what we have rolled out in the Netherlands and then upstep to e-invoicing or the upstep to payments and further on towards the full integrated solution. No one steps in with the more in digitization evolves, of course, the more we move to the complete integrated approach. But until today, it's a mixture, that makes also that our business model looks like something yes, a bit of everything and we need to split that. That's what we want to give you insights on the different, let's say, triangles, where they fit in, what's the business model behind and how is the ARPU evolution based on this rollout towards the fully -- full 4 triangles. So that's also the guideline for this presentation where we explained what's the modularity, which is not regulated dependent but the full triangle is what we need when regulation kicks off, which is, of course, which will become an important booster in for our further elaboration of our business model. So let's go now to David who will give you more insights in what we exactly do and how our digital processing is configured.

Thank you, Hans. Also a warm welcome from my side. Before I dive into the details of our business, I will briefly outline the market we operate in. Next, I will talk about which position we take in that market, how we are going to make a difference, how our growth model works and what the impact is of the regulatory changes expected in the years ahead. Let's start. In today's markets, businesses are outsourcing nondifferentiating activities while managing costs and ensuring data integrity. There's a rising demand for integrated business solutions to meet regulatory requirements, but also to streamline informations. Companies face challenges with data volume, while advances in cloud data and artificial intelligence, accelerate innovation, regulatory complexity and digital security concerns require careful attention. Businesses must adapt their operational models to remain agile and resilient, avoiding operational delays and reputational damage. Let's delve deeper into which role we play in these markets. First of all, with Banqup, we provide businesses with services across 4 domains as outlined by Hans using the 4 triangles concept. We digitize and streamline purchase and sales processes with e-invoicing as a central component, with e-payments we enable companies to pay and get paid, with e-identity, we authenticate and authorize private persons to act on behalf of verified businesses fully aligned with our mandates. And with e-reporting we make businesses compliant with statutory reporting requirements. For all these services, our business model primarily consists of subscription and transaction revenue. In the payments domain, we also generate additional revenue streams through financial and financing fees. We have reported about our license business for governments in the past. Those licenses are commercialized under the eFaktura brand and are complementary to our business offering. As eFaktura focuses on e-invoicing and VAT reporting for governments, there is a pathway for us to offer value-added services via Banqup to the businesses that are linked to the governmental platform. Later in this presentation, Jan will present a case study regarding eFaktura. So now you have an idea of our key drivers of our business, let me guide you to our competitive advantages. We operate in a fragmented market with a diverse mix of global and local companies. While many competitors fall into 1 of the 4 triangles, the extent and design of their offerings within a specific product area can vary. We build our platform from the ground for a multi-country market and with multifunctions, all related to the administrative side of sales and purchase processes with e-invoicing being the central component. We stand out by providing a comprehensive model and an integrated solution that goes beyond geographical boundaries. This unique approach allows us to address a broader customer segment compared to most peers. We collect those customers, which are buyers and sellers to the Banqup network, no matter the size and whatever they are on our network or on a third-party network with a goal to exchange business documents, such as quotes, orders and invoices and perform payments. The crucial advantage is our own famous infrastructure. Others have integrated third-party payment providers, but with our own payment infrastructure, we have the advantage that we can go further in the integration than any other platform as we deeply understand the invoicing and the payment business needs as we believe that all interactions between businesses should happen in a trustworthy manner and not only payments, we require every customer to go to a total KYC and KYB process. To cope with the scale, we made the onboarding process completely self-service, and we are automating the processing of onboarding requests. Later in this presentation, Arthur will go in more depth in our identity and payment solutions. This wraps up the quick overview of the competitive advantages we achieved with our technology platform. About our technology platform. In 2020, we have clearly expressed our ambition to become a leading cloud-based platform for SME business services. We did acquisitions to expand in both regions and capabilities after a period of integrating all the different solutions, we started consolidating the different solutions into one single platform under the brand Banqup. Today, one centralized product division builds and expands our capabilities in the 4 triangles, driven by the insights of our leading experts in those domains. Those capabilities are offered in one global scalable platform that offers a high degree of flexibility, which allows us to adapt to the specific needs of countries, industries and individual customers. They have maximum control over compliance, functionality, costs, pricing and usability. We want to have full ownership of the core offering, which boils down to the 4 triangles. On the other hand, we are very open as we have made the platform ready for third parties to build upon. We facilitate integration into existing software products and IT landscapes. We don't have the ambition to replace existing ERP or CRM systems, we merely want to enrich them with the capabilities for the 4 triangles. While doing so, we gather a lot of valuable business data about the purchase and sales process of our business, including payment transactions. This allows us to build data-driven services that use a network of connected data, that includes data from individual companies, their suppliers and their customers. This opens the door for new opportunities and solutions that leverage those business insights. For our commercial approach, we have segmented our target customers into multiple categories. For our large enterprise clients, we have a direct approach. We have a dedicated sales team that engages with these organizations to understand their specific requirements. Our solutions for large enterprises are designed to be highly configurable, which allows us to create tailored solutions that seamlessly integrate with existing systems of those large enterprises. That also gives us the opportunity to collaborate with top consulting firms that do the implementation with the additional benefits that they bring us, leads and projects. In contrast for SMEs, we adopt an indirect approach to our partner network. We recognize that SMEs often have similar operational needs, so we provide a standardized solution that addresses these common requirements efficiently. Through our partner ecosystem, we collaborate with organizations that have a deep understanding of the local markets that can effectively reach SMEs. A good example of our partnership approach is our collaboration with ECMA in France. Together with ECMA, we introduced Jefacture to the French market. Jan will give an update about our partnership later in this presentation. With eFaktura, we provide a trusted platform to enable governments to introduce all tax compliance and reporting models. We use a direct approach that are often supported by global implementation partners. To ensure our strategy is implemented effectively throughout the organization, we have set up a strong product division that works very closely with sales through bridge to business teams that focus on specific areas like compliance, presales, marketing and partner management. The success story of MIM, which will be explained in more detail by Jan later in his presentation, illustrates how this approach pays off. Initially, MIM a client of Crossinx faced challenges in onboarding small suppliers to e-invoicing. Our sales team identified this need and recognized that Banqup for SMEs could provide a solution, a customized demonstration by our presales team convinced MIM that Banqup was indeed our choice by using our expertise in compliance and the forthcoming regulations to our advantage, we convinced MIM to promote the adoption of Banqup among its smaller suppliers. This collaboration led to joint marketing efforts with MIM and any necessary platform adjustments were prioritized by our development teams. This kind of collaborations will help us to grow our business. But let's talk about growth. To foster business growth, it's crucial to retain existing customers. That's why we actively listen and address common customer needs, resulting in low churn rate which we aim to maintain. Additionally, there exists potential for upselling and upgrading within our customer base, including increased transaction volume, additional subscriptions, expanded services or even adoption of additional domains. Historically, many of our customers have utilized services from only 1 or 2 of the triangles, presenting opportunities for upselling. Also, our network holds the opportunity to attract businesses that we reach but are not using a paid subscription of Banqup yet. To attract new corporate customers, our primary approach is direct engagement with the market, supported by consultancy fronts. For SMEs, our strategy aims to acquire new customers through an indirect approach, leveraging our partner network. As our platform continues to grow, the power of network effects comes into play. With each new company and partner joining our ecosystem, the value of our platform increases. Moreover, as the network expands, it attracts even more companies and partners, creating a virtuous cycle of growth and value creation. Our growth strategy will benefit from the regulatory momentum expected in the years ahead. While the time lines for mandates may vary, their eventual activation is inevitable. As these regulatory changes are beyond our control, our focus remains of diligent preparation to effectively navigate and capitalize on the forthcoming mandates. I'll indicate how we do that in a minute, but first, let's turn over some key figures, providing evidence that our size of business is gaining momentum. I won't delve into the numbers extensively at this point, Koen will provide a detailed analysis later in this presentation. Instead, I'll highlight some key areas that deserve attention. First to notice is that a substantial part of our revenue is recurring revenue that consists of subscription and transaction revenue streams. Importantly, both subscription and transaction revenue have demonstrated consistent growth. We also observe disparity between served customers and direct paying customers. This is where the network effect becomes evident. For example, large corporations, often buyers, invite their business partners, such as suppliers and covered for their subscription costs. Our network also holds the opportunity to attract businesses that we reach but are not using a paid subscription. Within our network of under 2 million customers, there is a potential of another 1 or 2 million businesses not using Banqup. We also noticed that the revenue per customer is increasing. Koen will show how our modular business model offers an opportunity to accelerate ARPU growth that clear ARPU targets per triangle. As I indicated before, our growth strategy will benefit from the regulatory momentum expected in the years ahead. ViDA, VAT and the digital age is a new proposal to tackle the challenges presented to additional VAT systems due to the emergence of the digital economy. Now, ViDA spars the rush towards e-invoicing and e-reporting regulations and mandates in the member states. We outlined some upcoming milestone, but most importantly, for each of those member states, we have defined a comprehensive strategy to increase our market share. Let's take France as an example. For France, the e-invoicing mandate is expected to become active by September '26. We have been preparing for this since 2020. We have a joint venture with ECMA to bring Banqup into the market under the brand eFaktura. Together with ECMA, we can access about 20,000 accounting firms, which all have on average, 150 clients. This is already a significant share of the addressable market in France. As we understand that ecosystem integration is the key to success of the platform, we are continuously adding partnerships with accounting solutions, CRM solutions and ERP packages to improve our position. So we will be ready for the French e-invoicing mandate that is expected in September '26. This mandate will push a lot of SMEs towards solutions like Banqup, especially in the segment of micro and small companies. To wrap this section up, we have a long-lasting, in-depth understanding of the market dynamics with leading experts in each triangle that contributed strategic direction. But how is that going to make us win deals? Well, the combination of our modular proposition, the integrated solution on top of it and the way we network those allows us to offer solutions for entire ecosystems of companies of different sizes. We can make the difference in level of integration, customization and business model as all triangles of our platform, including payments are our own proprietary technology. We have meticulously crafted the commercial engine that takes into account how each customer segment operates. For corporations, we have chosen a direct approach with implementation partners. In context for SMEs, we adopt an indirect approach through our partner network. The growth drivers in each of those segments are similar; automation, control and compliance. Businesses want to increase cost efficiency to more control and automation of processes. Governments want to decrease the VAT gap by optimizing tax reporting, leading to regulations that result in compliance challenges for businesses that need to be addressed. Now for both businesses and governments, tax administrations, we have a solution, and that is how we will scale. This concludes the overview of our digital processing activities. I will now pass it over to first Jan, and then Arthur to demonstrate how we use our platform in practice.

Thank you, David. Thank you, and good afternoon, everybody. My name is Jan Druppel. I'm in charge of the International Business Development at Unifiedpost Group. And I will be talking to you about 3 case studies on e-invoicing. I'll be talking to you about a governmental initiative with eFaktura, I will be talking to you about Jefacture that has been mentioned before, the SME platform in France. And I will be talking about MAN, MRN, corporate, of course, that was customer by -- of Crossinx and for which we have done a recent project. So let's just dive into these 3 business cases, these 3 case studies. So the first one is eFaktura. eFaktura is a solution -- a governmental solution. It's a centralized e-invoicing exchange system, which basically means that all the invoices in Serbia will have to go through this system. That is basically what we mean with centralized e-invoice exchange, and it's for all kind of activities. So I mean is for business to government, business-to-business, government to business, government to government, so all of the invoices in these domains have to go through this centralized government system. Now of course, our contracting party is diminished to your finance and what they wanted to do actually with this platform, with this initiative, as we know Serbia has the ambition to join the European Union. What they wanted to do and what they wanted to show was to show to other countries and the European Union that they are in control of their VAT, what we call the VAT gap. So this is the case. A couple of interesting facts about this platform. Well, the first one is the use of the platform for the users, so for the companies who have to send their invoices, upload their invoices, receive their invoices, is free of charge. Our contracting party is the government. And what we provide is a user interface and an API system and both of them are free. What basically happens is that all of the invoices are delivered to the platform. As a company, you have to pick up your purchase invoices from the platform, and all commercial e-invoicing platforms must be integrated with eFaktura. Of course, what we see is that in the mid-market companies, the slightly more evolved companies, a lot of them are using the APIs. They don't want to change their way of working, their ERP, their CRM, they simply want to connect to this platform, and therefore, they're using the APIs. The small companies and traditionally, what we see is the company is using Word, Excel as an engine to generate their invoices, well, that is no longer possible because you have to send your invoices basically have data. So you cannot use these tools anymore. You really have to have a platform to generate electronic invoices, and there, we have the solution on eFaktura to generate e-invoices through the user interface. A couple of interesting facts is that it took us 22 months from the commercial agreement to the go-live. Another interesting fact is the fact that, of course, through this platform, we are connected to the entirety of the European network. So we are compatible with all of the different e-invoice formats in all the different countries. Again, what I said before, the usage is free but of course, we have a commercial contract with the Serbian government for the implementation, for the maintenance and for the upgrades. Now what I really want to show you with this case study is -- and you can see the graph on the right-hand side. The Serbian Government implemented the first mandate for electronic invoicing was on a G2B and a G2G level, so government to business and government to government. And what we saw is we had low activity. We were at about 700,000, 800,000 invoices per month. And the formal mandate for electronic invoicing came in the B2B environment or business to business, it came in January '23. And if you look at the graph, you will immediately see what the impact of regulation will be on e-invoicing. You could see that even in the first month, the volume of invoices really went through the roof. And in 3 months' time, 220,000 SMEs, so basically SMEs and other companies, by the way, basically in 3 months -- or 3 months' time, all of these companies onboarded on the platform and started using it. So you can see the impact of regulation. As soon as regulation kicks in and we see it in all of the countries, automatically, all of these companies will start using e-invoicing platform. Maybe a couple of interesting facts. Just to give you an idea on the volumes, et cetera, 6%, maybe first 50% of our users of eFaktura are using the user interface. So like I explained, it's mostly small companies, 50% are using the APIs. And if you look at the linked volumes of it, you can see that only 6% of the volume is generated through the user interface. So what this means is 50% of the companies are using the interface, but they're only generating about 6% of the 10 million to 11 million invoices, we are actually treating on a monthly basis. So maybe a couple of results we can take away from this case is that the Serbian government implemented the system, and it's really a huge success story for a couple of reasons: First of all, what we see is that we had a very short implementation time. Second thing is that we are compatible with all other European and even worldwide formats and compatible with all the government initiatives that we have in the European Union. And a third one, and I think it's a really important one, this platform, this initiative that was implemented by our Serbian team proves that we can actually own our technology, we can handle large volumes, we can onboard a lot of companies in a very short time. So I think that eFaktura is really a success story that we can share with other countries, which basically we are doing today. So we are discussing this implementation, we are talking to different countries on different continents because the Serbian case has been such a success story. Second case I want to talk to you about is the Jefacture. So Jefacture like both Hans and David have mentioned before, Jefacture is actually a decentralized continuous transaction control and exchange system. What does it mean? It's a private initiative. So contrary to eFaktura in Serbia, Jefacture is a private initiative and is the result of a joint venture between ECMA and Unifiedpost Group. And ECMA is actually the technological daughter, if you want, of the institution of accountants, the national institutions of accountants in France. Now how does it work? So ECMA, the division, the technologic division -- technological division of the institute will invite their members who are the accounting firms and these accounting firms will invite their customers to onboard on the platform. And like David said, we have about 4 million SMEs. Again, same as in Jefacture, we are -- we offer them a solution with the user interface and with API technology and we are fully and automatically integrated with the governmental platform in France that is called Chorus Pro. Of course, very important for the SME community, very important for the accounting industry, is that we are, of course, connected to all major accounting software. I think that I can say today that we are integrated with basically all of the major players, and we're still adding. And another element that I want to stress as in France, the VAT declaration is closely linked to the payments. So you can only deduct VAT if your invoice is paid. We added the layer of payments, so the users of our system can upgrade to Banqup with a fully integrated payment module and of course, other value -- other added value proposals. Now just to give you an idea, again, on the time line. So in January 2022, we launched the beta platform. We started in 2020. We launched the beta platform in '22, January '22, and we saw the first accounting first coming on board. We had the official launch in January 2023. And what you can see, if you look at the graph or the graph on the right-hand side, the upper one, what you can see is that in January '22, a lot of accounting firms started to onboard, we practically doubled in 1 month time. We doubled because the original plan for the French government was to make it -- was to have the mandate for electronic invoicing in 2024. So the accountants were getting prepared. Sadly, as we know, the French government basically delayed the obligation for electronic invoicing, so then the curve kind of flattened. But still today, and I'm looking at the situation of March 2024, so last month, we have today 18% of all accounting firms, about 3,550 accounting firms have today onboarded on the platform. And just to give you an idea, these 3,550 accounting firms represent 710,000 customers, 710,000 SMEs, which is a substantial number. Now as we know, and we see it on the graph of the onboarded SMEs, I mean, we're seeing it in all the countries. As long as there is no obligated mandate for -- as long as the e-invoicing hasn't been made -- made an obligation by the government. You can see that the companies don't really adapt easily, they want to keep their way of working. There is not really a push from the accounting industry because it's not an obligation yet. But what we see is that as soon as the mandate will kick in, you will automatically have a growth as I should say, of the SME. So I think this is an important thing to consider is that we have today a potential of 710,000 customers, and we're still 2 years away from the deadline. So there's potential for growth with Jefacture as well. Maybe the final case I will talk to you about is MAN. So this is an e-invoicing delivery system for small and medium suppliers of MAN. Now just to give you some background on what happened at MAN. MAN is, of course, an automotive player that everybody knows. And we had the situation where more or less 175,000 invoices, purchase invoices at MAN, They were not digital. Of course, this is a company that is fully EDI-based, so their procurement is EDI-based and what we saw is that the top 20% of the suppliers, they generated more or less 80% of the incoming volume at MAN. And these 20% of the supplier database, of course, we're fully integrated in the EDI procurement. The other 80% of suppliers were basically SMEs. SMEs distributed over 17 countries in Europe. So what MAN asked us is they said, "Listen, we need an internationally available platform, integrating with [ Open Pebble ], but also other systems, other initiatives. We have 28,000 SMEs, like I said, generating 175,000 invoices in 17 countries. Of course, the condition for this platform is that it's easy to use -- easy to use, not expensive to implement, it has to be a standard solution that companies are able to use very quickly. So easy onboarding, easy to use. And it has to be connected to the SAP, ERP at MAN for automatic entry. Now what we did is we started in 2023, and we set up a proof of concept with 25 companies in 7 countries, so Poland, Czech Republic, the Netherlands, Sweden, Austria and Italy. So this is what we did. We started it. The company started to send their sales invoices to MAN. Of course, that MAN became purchasing voices, and we started automatically injecting them into the SAP. What we're doing now this project went very well, by the way, so it was a success. What we are currently doing at MAN is that we are kind of building a proof-of-concept, marketing initiative with 1,800 suppliers in Poland. So we are both communicating. So MAN is communicating and kind of guiding their suppliers in Poland towards the Banqup solution and we are, of course, on our Banqup website also talking about MAN, and we are guiding -- we are kind of doing the same thing, but from our side. The idea is that in Q3 and Q4 of 2024, all of the suppliers, so the 28,000 suppliers will become customers of Banqup and can use our platform. They will be invited by the way, by MAN in a one-to-one, one-on-one e-mail to start using Banqup to generate their sales invoices so that they are automatically picked up at the MAN. So this is, again, a huge opportunity, it means 28,000 additional users. Remember that I talked in the Jefacture case about today already 710,000 users. And of course, as you know, we have the 220,000 users in the government -- the government initiative in Serbia. So this concludes the -- a little bit the e-invoicing initiatives. Of course, these are just examples, and I'm open to any kind of Q&A afterwards, but I would now like to hand over to Arthur, and Arthur will give you some more information on some case studies that we have in the identity and payment industry. So Arthur, over to you.

Thank you, Jan, for showing these interesting cases. My name is Arthur Paijens and I'm responsible for payments and identity with the Unifiedpost. Today, I will start with a short introduction on identity, followed by an identity case, then I will go for payment solution and finally, I will discuss the payment case. Let's first have a look at our identity solution. As explained by Hans and David, identity is a core component of our solution. When a business is authorizing a payment, approving an invoice, communicating with the government, it is important to maintain a high level of integrity, security and validity when executing these transactions. Therefore, businesses need a strong identity solution. We have built a pan-European solution by which businesses can identify and authorize their business transactions online. Our current solution is fully aligned with the existing identity regulation, the eIDAS regulation. The EU recently approved the second eIDAS regulation. This includes the rollout of a European digital identity wallet. This is something which Hans also explained in his introduction. Each EU citizen will get this wallet and will hold your most important credential such as your ID card, passport, but it could also hold the IBAN bank account you own. The wallet can also contain a business identity, for example, I am a legal representative of company XIZ. This credential will be provided by an eIDAS certified company. We will be an important player in this market by creating these business credentials and certificates for this wallet. Let me just discuss the eHerkenning case in the Netherlands. eHerkenning is one of the largest business identity schemes in Europe. Actually, there are 2 countries today who have a business identity, which is the Netherlands and Italy. It started in 2009 as a public private partnership. During the last years, we've become the largest provider of eHerkenning in the Netherlands via 2 of our brands. There are today, more than 1 million businesses using eHerkenning, 75,000 log-ins per day with over 6,000 server providers reachable. This case represents that we are well positioned to capture part of the upcoming European market as well. Let's have a look at our payment capabilities. As already mentioned by Hans, Unifiedpost payment has an EU payment license from the National Bank in Belgium. In addition, over the last couple of years, we have obtained local regulatory approval from local central banks to issue local IBAN payment accounts in 19 countries from which today, 12 countries are fully live and operational. This gives us a unique position to give our customers a local IBAN account to pay and get paid on and hold credit balances on these accounts. Next to that, we also issue MasterCard debit cards. Our customers can use this card to pay online and in-store from their own Banqup payment account. Customers can also give debit cards to their employees and control their spending by setting limits on their cards. Our debit card can also be used with Google and Apple Pay. We offer our customers also a full range of international and local payment methods. We have open banking connections with 350 banks in Europe and the U.K., reaching more than 1,500 sub-banks. We are fully licensed MasterCard and Visa acquirer and have a full range of local and international payment methods for our customers to use. With these payment methods, we enable our client customers to pay online via payment link or QR code and pay their invoices or orders using their preferred payment method. As mentioned before, all this will only work if we know our clients, if we know our businesses, and we can identify our clients. For this, we've built a complete online onboarding interface by which customers can simply -- simply and quickly onboard and start working with us. In addition, we have several payment solutions for specific customer segments such as our mobile payment terminal, providing retail customers in-store payment functionality on their own device by just simply downloading the software from the Apple and Google store. We provide a complete payment interface for large corporate customers who want to initiate bill payment files in a very simple and easy way, that could be from their existing bank accounts, but that could be also from our own payment accounts, which we can deliver to these corporates. We also have an integrated foreign currency payment solution for customers to pay their foreign currency supplier invoices. Finally, as Hans already mentioned and also David, we offer our customers the possibility to get instant finance, like invoice financing, distribution is funded via capital from external funders, such as Munich Re, one of the largest insurance company in the world. Now let's go over to this slide where you can see we have embedded all these identity and payment solutions in Banqup, our SME cloud solution. You can pay and get paid via your own local Banqup payment account. And again, that local payment account is crucial because SMEs in a particular country want to use, of course, a local payment account in the country and not some account of another country. So this is crucial that we have this local Banqup payment accounts now in 12 countries. But you will also, as a user of Banqup get insight in your transactions and cash position today and in the near future, you will be able to do smart reconciliation because we are actually giving you insight not only in our payment account, which you get from us, but also in your existing bank accounts you already have with your existing banks. You can use the instant finance options if you are short in cash, if you see that in the near future, you have a short cash position, you can ask your customers to pay faster, you can pay your supplier later, but you can also use our instant finance options. You can use your mobile terminal to let your customers pay in store. So not any hardware needed, you just download it on your own device, and you can use it to get your customers pay in-store. You can integrate or payment functionality in your webshop and you can get paid faster by integrating payment links automatically your sales invoices, pay your foreign currency suppliers directly and pay your bills easy and simply using the payment account you will get from us. And you and your staff can pay with the MasterCard debit card and control of the expenses online. You've seen that the complete range of identity and payment solutions are embedded in Banqup or SME client application. But more importantly, what Hans also said in the beginning, this is fully then embedded in our Banqup solution, but we also embed our solution in third-party applications, such as other e-invoicing providers, accountancy application and B2C and B2B e-commerce providers. One of the leading accountancy software companies in Europe have started embedding our open banking capabilities for their clients that they get the account information, but also able to pay invoices using their existing bank accounts. We have several e-commerce providers using open banking as an alternative for expensive card payments and multiple e-invoicing and biller providers have integrated their payment capabilities in their customer application. We see the digitization has massively expanded opportunities to embed our payment capability further in third-party application. Let me go in a payment case, a very interesting one. One of the examples of how we embedded payment solutions is the guardianship case in the Netherlands. In the Netherlands, there are over 340,000 people on the care. These are people unable to manage their financing themselves. This could be because they are a debt, but it also can be that the person is not able to manage these finances because of illnesses like dementia. There are more than 2,000 caretakers in the Netherlands, of which 20% of the 2,000 take care of 80% of the clients under care. One of the largest caretaker trade organization, Horus and the solution provider, Fincard came to us with a question to help them providing a better and more innovative way to provide payment services to the caretaker industry. Today, it takes over 30 days to open an account with a traditional bank and more than 45 days extra to get all setup on this bank account by the caretaker, time lost and a lot of frustration with both client and caretaker. We have provided an innovative solution to the caretaker and his client to be able to quickly open a care account for the caretaker to manage the client finances and an expense account with an app and a debit card for the client to do this -- to do his day-to-day expenses. As a result, our solution improved the opening time of accounts and management of the accounts substantially, providing a much more better service than the traditional banks in the Netherlands did. This is really a token that we are replacing traditional banks in the Netherlands, the main 3 banks, prominently in the Netherlands by providing the same but better service and more innovative service to the guardian industry in the Netherlands. This concludes the overview of our identity and payment activities, and I will now pass it over to Hans.

Thank you, Arthur. Thank you for also Jan, for giving some insight in our payments identity and the invoice business. So let's now wrap up on what are the strategic initiatives that we deploy in the -- currently deploy and what we will deploy in the future. So simplifying the financial value chain between businesses is clearly our mission, digitize it and simplify it and optimize it. That's what we -- that's now our goal to do all the necessary steps to realize this. For us, it's absolutely crucial that the DNA of this model stays intact, that this plan can be executed. Okay, we are in the middle of a process, the market is popping up in the near future, but execution of the plan and continuation of the plan is crucial. And we have the ambition to realize this vision as I repeated again with a long-term strategy as an independent company that's able to work with every type of partner. Because if we want to build that network, we need a lot of partners, a lot of stakeholders, to establish that network and connect everyone with everyone. And that's why our independency is an absolute must to become our model successful. So if I overlook the strategic actions that we will take in the coming period is, of course, expansion within the digital processing ecosystem, more businesses, more upselling, more capabilities for our businesses so that they can interact in a more integrated way and actually work together in a more efficient way. We need to execute the divestment plans to be able to focus clearly on our core business, and have an investment-only approach on this core business. Sustainable profitable goal, very important. Our business model passes to a phase where it is cash generation that the drivers, which Koen will explain, is the volumes and the number of customers that we have and the upselling that can do -- that we can bring on a high gross margin business. We have the customer centricity, the technology must be there, we have a commercial engine, which is based on partnerships. Operational excellence right from the beginning, the first touch point on our company first suspect phase towards the full customer service afterwards, it must be an end-to-end experience, which is perfect from A to Z. So the solutions need to be -- to build the sustainable solutions. It's -- of course, it's a real-time business, it's a 24/7 business with large volumes, fully self-service, that are the absolute requirements to become successful in this fast-growing ecosystem. Disciplined performance yes, growth is important, the profitability is important and so that means that we have a financial discipline, which is crucial to respect. Of course, this is -- and we explained to you the modular approach, the integrated approach. It all comes together when regulation kicks off. So being able to onboard millions of businesses is -- yes, you need to be ready for this. You need to be ready on different levels, partners need to be able to onboard our customers, massive amounts of customers need to be and need to have a correct service. So the dimensions are different when you have hundreds or thousands of customers and when you go to millions of customers. So that's why we also prepared ourselves to be able to do this massive onboarding. I always say that our market is far big enough for distributing it between us and our colleagues, it's the capability to onboard that will make the difference. So that's the challenge that we have to conquer in the coming months, years. So that comes together, of course, with cash generation -- cash generation, together with the divestments so that we can strengthen and clean up our balance sheet. So finally. On the sustainability front. I want to highlight, it's important for us on 2 fronts. Firstly, as we focus on building a sustainable business for the future, we have committed to several KPIs to track progress, emphasizing employee welfare and talent retention. We are encouraged by the process we have made to date and will continue to drive this agenda forward, given its importance and relevance in today's world. Secondly, and more broadly spoken to the ecosystem that we operate in, we enable companies to share information for indirect emissions, Scope 3 from the emission regulation. So emissions between businesses, particularly in a bio-supplier relationship with invoicing serving as the ideal conduit for this purpose. We see this as an area of increasing importance in the future and expect to positively influence the drive towards carbon neutrality in a wider setting. Sometimes, we summarize it as Unifiedpost must become the most -- the first customer of his own network to serve to solve these topics and to implement it for itself like we will sell it to our customers. So these are our strategic actions to take in the coming months, years. So how this is financially managed now will be explained by Koen. Koen, the floor is yours.

Thanks for getting the floor, I hope you all have a bit of energy left for this financial catching. My name is Koen De Brabander, appointed new CFO of Unifiedpost Group. I will guide you max 20 minutes through our vision on financial reporting. First, a word of thanks to Laurent Marcelis, my predecessor in the role of CFO. What have we learned so far? Revenue growth in our digital business can be realized through one, product upselling; two, teasing our network with the product suite; three, onboarding and activating partner network such as ECMA, Ita, Munich Re, [ Finguard ], but fourth, the tailwind of regulation. Next to revenue growth, we have potential to upscale our gross margin by the simple usage of economy of scale and cost efficiencies by eliminating all platforms and decreasing onboarding costs. These growth factors should become visible in our financial and therefore, we have reflected on how to present the future -- figures in the future, all this to better answer on your market expectations. Let's guide you through this slide as it is crucial in the understanding of our financial mechanics. In the most left bar, we recall the current presentation of our revenue as it was used in the past. And as you can read in our annual report, we realized digital processing revenue of EUR 136.6 million with a gross margin of 43.2%. And we had a second block posted parcel revenue, EUR 54.8 million with a gross margin of 12.6%. In the second bar, we present the 2024 approach. We have shifted all hybrid digital revenue from digital processing revenue towards a basket called, Traditional Communication Services. So the latter is the new name and groups the postage and parcel activities in the Nordics, the hybrid digital activities such as paper delivery activities and printing activities and to the pure digital activities or by doing this presented in one separate block. As you can see, our 2023 business is nearly 50% pure digital -- core digital, with a margin of 51.8%. And the other 50% is traditional communication services with a margin of 17.5%. Let's now zoom in the pure digital business as it is the engine for growth, as it is what it was all about in the preceding presentations. We will look at the digital business from 3 different interesting angles. The first one, we look at it by product line, so-called e-identity, e-invoice, e-payment and e-reporting. Identity, the start of everything represents 14% of our revenues -- of our digital revenues, e-invoice represents 80% of our digital revenues and e-payments and e-reporting represent each 3%. The second interesting angle of looking at our figures is by type. What does mean? Nearly 50% of digital revenue are volume-based, 30% is based on subscriptions, 16% is coming from license sales, and the final balance 6% is coming from project revenue. The third interesting angle is periodicity and of course, interesting to read and to see that 88% of digital revenue is recurring and only 12% is nonrecurring. As already outlined by David, the bullets next to the product line show which product type generates this revenue. For example, in identity is purely generated by subscriptions, e-invoice is generated based on volume, subscriptions and projects. This format of presenting other figures will be applicable from 2024 onwards. And of course, we will, as we required by IFRS guidelines adapt the figures reported in 2023 in the same format. Let's present a breakdown of the growth figures so that this is clear and understandable for everyone with the right -- within the right context. The reporting model 2023, our digital processing revenue amounted EUR 136.6 million compared to EUR 126.9 million in 2022, which is a growth on the face of these figures of 7.6%. But digging a bit deeper into this growth, we have split that up between the recurring revenue and the nonrecurring revenue. And you can see that in recurring revenue, which is the engine of our growth is 10.7%, and the nonrecurring revenue, and we come back on that one, is even decreasing. Digging a bit deeper into that, we have also excluded the impact of foreign exchange mainly from our -- from the Swedish krona and the Norwegian kroner and then excluding the foreign exchange impact, we can show that the 10.7% growth in recurring digital revenue represents in volume at the basis organic 13.2%. At the right side of this slide, I made the exact the same analysis, but now applying the new reporting model of 2024. You will see that the digital services, exclusive hybrid, represents EUR 94.8 million in 2023 compared to EUR 86.4 million in 2022. So at the face of our income statement, this would represent a growth of 8.5%, splitting it up in recurring and nonrecurring, you can see that the recurring digital service revenue showed a growth of 13.6% and going a bit deeper, looking at the organic, so excluding the foreign exchange impact on the Swedish and the Norwegian kroner mainly, we show organic growth in our digital recurring business of 17.3%. On this slide, I will zoom with you into the growth drivers per product type. As mentioned on the first slide, the drivers we are looking at are revenue growth and gross margin evolution. We do expect important growth in transactions and subscriptions. This has seen the business drivers, exploring the network and the partnerships. Based on the clear plan explained earlier, these 2 blocks are the real engines of future growth model. I will further explore on the evolution of the subscription revenue on the next slide. Gross margin for this will mainly grow based on further cost savings due to synergy effects and efficiency effects. License revenue has still growth potential but is dependent on timely realization of projects. In this area, we already have attractive margins which we will maintain. The project revenue is not our first focus as it concerns implementation, projects and change request issues. Margin will be under pressure, seeing the biggest portion of the cost of sales is coming from direct staff costs. I promised to zoom in the heart of our future model, that is the growth coming from subscription revenue. I recall the slide with the triangles already shown by Hans and David, which represents the current product offering. I give some insights on subscription rates for each of the products. This is by example, as these indicative rates can differ by region or differ in the partnership agreement, existing partnership agreements. But anyhow, it explains the mechanics. The current ARPU for the pure subscription revenue is at the level of EUR 6.10 a month. A big portion of our subscription revenue is generated by e-identity products and e-invoice products and still a minority is coming from the full pallet presented in the triangle. It is clear that we have potential to raise the ARPU figure by increasing the cross-sell of full pallet offerings or at least selling more combined triangles of the pallet. Identity will always be part of the offering as usage of the platform needs always authentification feature to know who you are. This slide zooms in the impact of increasing ARPU, but do not forget, next to increase in the ARPU, we explore at the same time, the market and we will raise the number of subscriptions by and I repeat, activating the network and usage of the partnerships. Great, so far. I spoke about the potential, but let's also look at the evolution of our cost structure. What have we done so far? And where are we in the process is the question. R&D is a combination of 2 components: R&D capitalized and R&D expensed through income statement. I prefer to present a parameter, which only relates to our digital service business as the current R&D spend is purely focused on the development of these tools and products. The R&D spend and relative percentage compared to digital revenue, slightly decreases partially by cutting in the cost structure and partially by growth in our digital revenue. The spend today is still 25%, 27% of digital revenue, ambition based on mainly revenue growth is to further decrease this gradually over time to 6%, 7% to be reached in the midterm. G&A, sales and marketing, the relative impact of this envelope compared to total revenue, and I underline total revenue decreased from above 40% to a level, which is actually below 35%. A big portion of these costs are coming from our staff costs and this is well presented in the graph on the top right, where you can see that over a period of 18 months, we decreased the number of staff in R&D, G&A and sales and marketing in the digital service activities with 150 full-time equivalents. And in traditional communication services worth 10 full-time equivalents and within the corporate staff, which is a separate block in our presentation, with about 30 full-time equivalents. So in total, 190 in total. The full impact of this staff cut is not yet in the figures of 2023 as these figures are still impacted with the cost structure for some active months and are also impacted with nonrecurring severance pay. Please note that our 2023 figures are still impacted by at least EUR 2.3 million nonrecurring costs, mainly severance pay and due diligence costs. All this is summarized in our EBITDA evolution, where you should mainly compare the same quarters with each other. I mean, compare Q1 2022 with Q1 2023 and Q2 2022 with Q2 2023. And so further, we noticed a clear improve, and this trend line will be continued in 2024. The word free cash flow is crucial in our financial management. To remove any doubt or misunderstanding beforehand, I clearly state that free cash flow means EBITDA minus all financial cash out, I mean, interest and reimbursement obligations of loans, minus cash out on corporate income tax and minus cash out on CapEx. In the top graph, we repeat the CapEx spend over the past 8 quarters, which is decreasing, but as said to be reached and interpreted together with the OpEx. In the bottom graph, we show that we kept our cash position over the past 3 quarters quite stable. But of course, we manage currently working capital elements. We acknowledge that step by step the company should improve its solidity of its financial position. Our current net financial debt position is EUR 95.2 million end of December 2023 and our current cash position exclusive restricted cash is still maintained at the level of EUR 21 million. We have potential of additional cash-ins from divestments, from subscription rights and potentially also increase of our factoring line. Cash from divestment opportunities may or will strengthen our current available cash position and/or decrease our net financial debt position. Furthermore, the growing revenues, growing margin, continued cost savings will strengthen our cash flow. I confirm that so far, the group met all covenants -- all covenant checks foreseen in the senior facility loan with Francisco Partners. But it is our objective within finance to support this goal with high discipline in finance management. And finally, what are now the building blocks of our future outlook. I know that is all what you were expecting from me or from us to see. Our current digital revenue, as shown, is at the level of EUR 95 million. Based on expected CAGR, we may grow in the midterm, our business to the level exceeding EUR 160 million. This is the add of the green block. The activation of partnerships such as Munich Re, ECMA, software houses will add additional potential. This is the light blue colored block and supports the ambition to double our current digital revenue level in the midterm. On top, we are forward-looking and believing that the mandatory corrector of e-invoicing to be implemented in the different European countries, referenced the ViDA, as already mentioned by Hans, is seen as a real booster and means that the company should have the potential to grow to a EUR 500 million company by exploring an acceptable market share in the different European markets, representing plus 25 million SMEs. Short-term is what really counts today. We foresee low teens growth in digital business and to be cash flow or free cash flow breakeven considering the current group structure. I cannot and will not anticipate on the impact on one or another divestment as timing and financial consequences related to these are difficult to forecast. Let's conclude with 4 takeaways. One, organic development is based on continued growth in digital markets with internal focus on realizing synergy and efficiency cost savings. Two, CapEx is maintained at same level but pure focus on adoption of key products for the core markets. Three, UP investigate each opportunity to divest components of traditional communication services. And four, free cash flow positive is primary focus for 2024, subject to impact of divestments. Finally, all this should be realized with a high discipline in financial management. Thanks for your attention, and I hand over back to Hans.

[Technical Difficulty] for your explanation. I suppose that you will get quite some questions, if I look to the question list popping in. Yes, we always have to do an explanation, but figures at the end are the most important part. So before we go to the Q&A, let's wrap up on the takeaways and what we will do. So we have a robust foundation to execute an organic growth agenda, an organic focus. We have all the fundamentals now to step in this digital world. A modular approach, which makes us more independent from this -- from a regulation only, and the modular approach is also the driver for increasing our ARPU, the upsell from surfaces, starting with identity and so on. So ARPU increases by extending the number of services to our businesses. Partnerships all right from the beginning, crucial in building out our network, different type of industries are partners. Independency is a crucial element to enable us to work with every type of partner. Optimal positioning, we can't neglect the regulation coming to us every week, there is an announcement somewhere that the country has decided to officially to launch e-invoicing. So it will come, we must be ready on the moment that it happens. Can there be some delays? Yes. Some countries will postpone it, that's for sure. But we have to act where it happens. So we must be ready in all circumstances and being able to deliver on the moment that it happens. So that's combined with a disciplined approach on capital management and further strengthen our balance sheet, which is, of course, the best guarantee for our long-term vision on our company. Thank you all for listening to us. And thank you for the speakers to bring this overview. Let's go to Q&A. Alex?

Okay. Thank you, Hans and team. Okay. We've got quite a few questions here in the Q&A. So we will start maybe Hans with you looking at the top here. Why does Unifiedpost not use a common brand across all countries?

Well, that's a good one. We are in a branding exercise. And we -- the Banqup brand becomes a dominant brand in all what we do. That's clear on the agenda. We come from a landscape where we have a lot of solutions initiated by the acquisitions that we did, but we migrate 4 small and medium and larger businesses to the Banqup brand. Of course, there are exceptions, which are like if you factor the ownership and the partnership stipulates that our partner, in this case, the accounting association stipulates that the brand needs to be Jefacture. Underlying technology is, of course, the same. On the other hand, Banqup will come back in Jefacture, when we talk about payments. So we really want to put Banqup as a European brand and actually our common brands everywhere.

Yes. And there's another one here for you Koen, could you elaborate more on the EUR 6 ARPU that you've talked about earlier in the presentation and how compared to what's previously been mentioned around Banqup and different products?

Yes. I noticed the quite many questions on the ARPU. We should, in fact, go back to the slide with the bars. My second slide, I do not know what's possible to return to that one. But in the past and also in our annual report, we have presented ARPU as it was calculated in the past and also definition APM was defined in such a way that we looked at ARPU combining the transaction revenue and subscription revenue. And the second -- yes, we see that slides are going back now. So these were 2 big blocks of our revenue levels. Subscription revenue was representing 29%, transaction revenue is representing 50%. So in the past, we have computed this total subscription to total transaction divided by the number of paying customers. That is also an APM that is in our annual report. I think, and I do believe that an ARPU figure is really linked to subscription revenues. It has less gray zones, it is a clear KPI, which does not lie. So I have the intention to bring a clear KPI without discussion and there, we have decided now the subscription revenue from our digital business over the number of paying customers in the digital business. So that is making a big difference in approach. You can see that the 50% of such transactions are now excluded. The second KPI, of course, is looking into the annual growth rate of our transaction business. So we will keep those 2 KPIs next to each other, but I prefer to have a KPI which is clear without any gray zones of what a clear number of customers. Is that sufficiently clear? So the level is today, 6.1 purely calculated on subscriptions you could have seen on another slide that the identity indicative rating is about EUR 4. The indicative rating or, for example, e-invoice is about EUR 10, payments is even EUR 27. That's purely indicative. So today, we are in a mixture of ARPU from mainly identity and e-invoice subscription contracts. I hope this answers the question.

Sure. Thank you very much, Koen. Next question we have here around scalability probably for you, Hans. How much digital services sales can you handle with the current technology infrastructure? And the second part of that is maybe more Koen, but how much CapEx would you need for every EUR 15 million of extra digital service sales?

Great. So -- what we have done over the past 2 years is actually my build technology or bring together all the technology of all acquisition and our existing Unifiedpost platform and all capabilities like payments together in one central cloud platform, cloud platform that we -- that hosted on Google infrastructure, which means that there is actually we have no infrastructure limits because we can grow endless on the Google infrastructure. So it's now fully cloud and actually, we migrate all our business towards this fully -- full cloud infrastructure. I must add one comment to this, and that's a new trend that we see popping up because of data privacy and data security reasons, we are confronted today with what they call [indiscernible] cloud, which is actually cloud, but where the requirement is that the data is hosted in the country where it belongs. So we need to set up a platform in France for French data. Although we look at it as one platform wherever -- from wherever in the world, data needs to be stored in a sort of a distributed way, and it needs to be signed with security keys belonging to a company in that which has his roots in that country. So Google is partnering with a local French company to make -- to actually guarantee that the governance of the data is managed through a French company. And that's a trend that we will have to follow in the next years so that different countries are preparing themselves to establish.

Thank you, Hans. And Koen, one for you. Can you please explain your user case, what is your definition of recurring revenue? And what do you split between subscription and transactions?

Okay. Thank you, Alex. Yes, subscription revenue is, yes, mainly a revenue that -- where we have monthly billings for a well-described or predefined service we are delivering, it is, in most cases, it's a fixed fee. And as Hans already said, our subscription or Banqup model is self-servicing, so you can easily access the website or by means of by intervenience of our partnerships, you can subscribe to subscription, where we will have a recurring monthly revenue. Volume business on the contrary is where we have a contractual relationship with our customers and the price, the monthly price paid by the customer is based on the number of hits passing over our platform. It can also be a combination that subscription as said, it is a well-described or predefined service. But once you pass a number of volume, we can have a combination of subscription revenue and a volume-based revenue. Another nice example is and do not forget that. I think Jan explained clearly how eFaktura is organized in Serbia. We have sold to the Serbian government, of course, licensed so that they can make use of our platform and the technology, but on top of that, the Serbian government base on a monthly basis, based on the number of transactions, I can say the number of invoices passing the platform an additional fee, so that we have not only a project or a one-off income by selling the license, but we have on top of that volume-based income on the Serbian platform.

Thank you, Koen. Okay. So we've got another one here from [ Marcus Hold ] for you, Hans. Do you expect further delays in case of the 2030 or beyond?

What -- first of all, delays, it happened and it will happen again. That's for sure. Look what happened in France, the government themselves -- themselves were not ready. More and more countries realize that they have to act. There is a sort of a maturity coming in the market, but delays can't be excluded. Look what happened in Poland, almost -- the deadline was almost there and it was postponed. So the thing is here that it's crucial to have a business model where we are partly independent of this regulation and that's why it's so important that we initially built our payment capabilities to act on top of the invoicing services, but we can also propose them for different use cases in as a separate case. That's what the caretaker case that Arthur showed, several others are in the pipeline. So the modular approach allows us to create a sort of a independency from -- to realize growth on one hand and on the other hand, stay a bit independent from the regulation. Of course, when the regulation comes, we must be -- we must be ready. That's absolutely the case, but we can act in a different way. What I expect from -- if you look to the invoicing evolution now is also that by opening up regulation and legislation in a lot of countries, the larger businesses are preparing themselves because there is always one country where they have to be compliant. And they choose their partners now on the moment that they have to be compliant in one country, they choose their partner and then afterwards, we need to be compliant for any company. So it becomes a source of an upsell within the country. So we get a quite -- so quite some activity on the larger businesses preparing themselves for the wave of compliancy, although it's not mandatory in all countries yet.

Okay. Hans. Another one here for you Hans is, does the negotiations to sell 21 brands include the digital business?

So what we do with -- the goal is what we want to achieve in the discussions we have today with PostNord is a partner on the digital business and hand over the hybrid and the paper business. What the construction will be that will be disclosed on the moment. We have more clarity about it, but that's exactly the part of the discussions we have now.

Thanks. Hans, another one for you here from [indiscernible] Jan. How do you see the near future of the Unifiedpost given the events of yesterday?

Well, the events of yesterday, okay, that's -- what's important here is that there is an open discussion, that -- okay, we listen to Alychlo. We understand their concerns, we want to grow to a balanced governance, and we are open for partner in this. We don't want to go to an unbalanced governance, and that's what the door is always open, and it's only respectful to work together in a balanced way.

Thank you. I'm just looking through here. Okay. And just another one here on who probably more for you, what are the main levers for decreasing onboarding costs, especially for large customers? I don't know if that's for you or someone else on the panel?

Can you repeat what are the drivers for decrease of?

What are the main levers for decreasing onboarding costs?

Well, I think the main drivers for decreasing onboarding cost is linked to the self-service of onboarding of subscription customers. So the new platform, as already explained by Hans, as is a real strong feature on self-onboarding. That replaces, of course, yes, a lot of energy we have invested in the past or we can still invest today in onboarding customers by using a direct sales channel or by investing in other types of attracting customers. So the self-service of the new platform is an important one. I think also that today in the cost of onboarding customers with hybrid to digital. We invest quite a lot of money in the OCR so there is a complex procedure where you receive a PDF. We apply an OCR procedure in order to convert it into digital. This kind of activities is no longer our base procedure going or moving more and more to the pure digital work on core digital board.

Okay, thank you Koen. Another one for you Koen from Peter Jan again. Can you give guidance for EBITDA in 2024?

EBITDA, I think we have given a clear message that our key drivers today and for 2024, is growth on the top line and is being free cash flow positive in 2024. These are our key drivers, I would like to stick to that one. Of course, you may calculate going from bottom up or top down, how you can come to that. You can see in our financials, our cash out on financial interest, you can see the nonrecurring -- the recurrent financial debt position. So -- but we will stick with a guideline on the free cash flow, being free cash flow positive. That's key for me. And yes, we will focus on that one. I made subject to because I'm there a bit dependent on how we will -- which transactions of divestment, we are capable to realize in the course of the year. We are working on that, but the time line of each of these is always a bit unclear. And I can only make that final calculation at the moment, the divestment is closed. And then, of course, we will have an impact because we will get cash in and in some cases, we will sell a part of our EBITDA. And in some cases, it will be nil. But it's a bit depending the divestment operation we are facing.

Okay. Thank you very much. One from Kurt. Identity -- one for you, Arthur. Identity has been a growth engine for subscription revenue, but focused on the Netherlands. Do you see business opportunities in other European countries for the business?

Yes. As I explained -- thank you, Alex, as I explained in my presentation part, it is especially the business identity, which we have done in the Netherlands in a public-private partnership. I also mentioned that there will be an EU digital identity wallet for every citizen in Europe. And actually, the business identity part of that, that will be one of the credentials under an individual person's EU digital wallet, will also be actually done in a public private partnership and because we have showed in the Netherlands that we are able to do that. We also see a lot of opportunity to do that on a pan-European scale in other countries. As I already said, there aren't many business identities in the countries today. Also, you need to be actually certified for that, which we are, and you also need to provide certificates towards the business identity. For example, I am responsible, again, as legal representative for company XIZ, and I can also sign on behalf of the company, and I can mandate others within the company. That's exactly what we are doing, actually day-to-day in our business but what we also have done in the Netherlands. And again, coming back to the previous question which Koen answered, we've done it also on a very scalable way because we have onboarded in a relatively short period of time when the eHerkenning bumped up, we have done that in a relatively short time onboard more than 400,000, 500,000 companies in the Netherlands on eHerkenning.

Okay. Thank you, Arthur. The next one we have from Nicolas, 49%, Hans this will be for you. 49% of your revenue is generated by transactions on the digital processing side. Do you expect this mix to change in favor of subscriptions in the future? Or will the transaction part continue to be dominated?

Yes. Actually, the subscription evolution will become more prominent on the -- in our revenue stream. The reason is that, on one hand you have the rollout of the small businesses who work with a subscription, it's not a volume-based model. But also important is that the upsell that we do on top of e-invoicing like payments, like other services are subscription-based. We don't count to volumes on payments, we offer a payment service. But of course, there is always a part of a transactional part, for instance, if you do payment links, then you count the links even for larger businesses. But in essence, it's -- the business model evolves more and more to a subscription-based model, to 2 drivers; the rollout in the SME market and the upsell on top of e-invoicing transactions.

Okay. Thank you very much, Hans. The last question here, we'll wrap it up is for you, Jan. MAN is a corporate clients, so what are the cross-sell opportunities in Germany or more generally with corporate plants?

Well, what you have with these corporate clients who will invite their suppliers or -- I mean these suppliers go onto a network so they will, of course, at a certain moment in time, they will be confronted with the mandate that will come, in Germany, we're talking about '27. So these customers will not only use the platform to send their invoices to -- to MAN, but they will also use this to receive and to send to other suppliers, other customers. So we automatically create this kind of, I would call it, I would call LinkedIn procedure where you're starting to invite your other connections. So there's a whole bunch of things that we will start to do. Of course, once you use the platform, it also offers you the possibility to present additional services. One of the things that we're seeing in some of the countries is that people start to use a platform, all of a sudden, they identify the possibility to have integrated e-signing, they start to send quotes or whatever through the platform to their customer base. They request digital signing of documents. So there's a whole bunch of, Arthur talked, of course, about integrated payments to facilitate reconciliation. I mean there's a whole bunch of services. It's not only about the invoice, it's additional digital services that we can offer to the platform, which will automatically create new opportunities, but also raise the ARPU for that customer. Second of all, of course, you will have -- MAN is now a very clear case who've been in the digital process. You will see other corporate clients. What's really important is that we are building this network and on this network, based on the unique identifiers of a company, which can be VAT, which can be a Chamber of Commerce, which can be [indiscernible] in France and others, companies are able to identify the other companies who are part of the network. So it only creates opportunities to go more and more digital, and again, all of this is hugely due to the mandate of electronic invoice.

Can I add something on to it? Because what's also important to mention here is that you can -- the flows between buyer and supplier can become more sophisticated, things like dynamic discounting, buy now be later, so pro forma invoices. Actually, yes, once digitally connected, you can optimize whatever flow between parties. And dynamic discounting is a very nice one because that shows the interaction between buyer and supplier in a real-time way to give them discounts on the moment that he can pay immediately. And that's exactly what digitization will bring in the future.

Thanks, Hans and Jan. Okay, I think we'll wrap it up there. Thank you all for joining today, and this concludes our Strategy Day. We will speak to you again in May, where we will report on the Q1 results. If you have any questions in the interim or we'll joined, please reach out to me. Thank you very much, and have a good rest of the week.