Euronet Worldwide, Inc. · NASDAQ:EEFT
Euronet Worldwide — Q3 2003 Earnings Presentation
42 slides from Euronet Worldwide's earnings presentation, Oct 28, 2003
Slide 1: Welcome to Euronet Worldwide Q3 2003 Corporate Results
Welcome to Euronet Worldwide Q3 2003 Corporate Results October 28, 2003 Presenters Michael J. Brown, Chairman & CEO Rick L. Weller, EVP & CFO Jeff B. Newman, EVP & General Counsel Symbol: EEFT www.euronetworldwide.com
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements contained in this presentation, which concern Euronet’s or its management's intentions, expectations, or predictions of future performance, are forward-looking statements. Euronet's actual results may vary materially from those anticipated in such forward-lookin
Slide 3: Q3 2003 Financial Report
Rick L. Weller Chief Financial Officer Q3 2003 Financial Report
Slide 4: Q3 2003 Financial Report: Financial Highlights
Q3 2003 Financial Report: Financial Highlights Revenue – $53.1 million 10% increase over $48.1 million in Q2 2003 197% increase over Q3 2002 Operating Income – $3.7 million 32% increase over $2.8 million in Q2 2003 $4.3 million change over last year’s <$0.6> million EBITDA - $6.8 million 15% increas
Slide 5: Euronet's Business Segments
Euronet’s Business Segments More than 90% of revenues are recurring Corporate EFT Processing Software Solutions, including R&D Prepaid Processing EMEA Asia Pacific Europe Asia Pacific U.S.-PaySpot
Slide 6: Quarterly Transaction Growth: EFT & Prepaid Processing Combined
EFT EFT EFT EFT Quarterly Transaction Growth: EFT & Prepaid Processing Combined Note: Data includes January 2003 e-pay transactions Prepaid Prepaid Prepaid
Slide 7: Quarterly Processing Revenue Growth
Note: e-pay’s January 2003 revenue is not included. Quarterly Processing Revenue Growth: EFT & Prepaid Processing Combined
Slide 8: Q3 2003 Consolidated Revenue
Q3 2003 Financial Report : Q3 2003 Consolidated Revenue Note: For comparability purposes, Q4 2002 data adjusted to exclude $4.1 million from the U.K. ATM operations and include $420,000 for the U.K. outsourcing agreement. e-pay’s January 2003 revenue is not included.
Slide 9: Consolidated Operating Results & EBITDA
EBITDA EBITDA EBITDA EBITDA Q3 2003 Financial Report : Consolidated Operating Results & EBITDA Note: All data excludes discontinued operations and adjusted for the effects of the U.K. sale / outsourcing agreement. e-pay’s January 2003 results are not included. EBITDA is computed by adding depreciati
Slide 10: Business Segments: Q3 2003 Sequential Quarterly Results Comparison
Business Segments: Q3 2003 Sequential Qrtly Results Comparison $5.9 (1.5) - 7.4 0.6 3.7 $3.1 Q2 03 EBITDA $6.8 (1.9) - 8.7 0.7 3.9 $4.1 Q3 03 $2.8 (1.5) - 4.3 0.4 2.7 $1.2 Q2 03 Operating Income $3.7 (1.9) (0.1) 5.7 0.4 3.0 $2.3 Q3 03 Q3 03 Q2 03 $48.1 - (0.1) 48.2 3.8 32.2 $12.2 Revenue (0.1) Elimi
Slide 11: Balance Sheet – Highlights
Q3 2003 Financial Report : Balance Sheet – Highlights $71.8 $97.5 $78.7 $40.8 $13.1 $45.3 $58.4 6/30/2003 (in millions) $68.7 $104.0 $80.0 $50.0 $12.9 $43.4 $56.2 9/30/2003 (in millions) Total Debt Current Liabilities Goodwill & Intangibles Accounts Receivable Unrestricted Cash Restricted Cash Total
Slide 12: Balance Sheet – Other Items
Q3 2003 Financial Report : Balance Sheet – Other Items (USD Millions) *Includes $7.4 million convertible debt. Debt at end of Q2 2003 $71.8 Exchange rate impact and capital leases $1.0 Payments $<4.1> Debt at end of Q3 2003 $68.7 Payment on acquisition debt-October 2003 $<4.0> Debt balance end of Oc
Slide 13: Business Overview
Michael J. Brown Chairman & CEO Business Overview
Slide 14: EFT Processing Segment
EFT Processing Segment
Slide 15: EFT Processing: Operating Income & EBITDA
EBITDA EBITDA EBITDA EFT Processing : Operating Income & EBITDA Op Income Op Income Op Income
Slide 16: EFT Processing: Q3 2003 Financial Highlights
EFT Processing: Q3 2003 Financial Highlights (USD Millions) Total EMEA Asia Pacific Revenue $12.9 $12.8 $ 0.1 Op Income $2.3 $2.9 $<0.6> EBITDA $4.1 $4.6 $<0.5> 23% op income margin in EMEA up from 14% margin in Q2 16% op income margin if excluding the net benefits of the Hungarian ATM sale
Slide 17: EFT Processing: Q3 2003 Business Highlights
EFT Processing : Q3 2003 Business Highlights EMEA Raiffeissen Romania– 600 ATMs and 2,700 POS terminals outsourcing, plans to add 300 ATMs and 3,300 POS terminals in 24 months HVB Poland – 700+ ATMs outsourced Hungary sale – Sold 272 “Category 1” ATMs to a bank and signed a 5+ year outsourcing agree
Slide 18: EFT Processing: ATM Categories by Quarter
EFT Processing: ATM Categories by Quarter 3,254 1,721* 831* Live 09/30/03 1,666 N/A Under Contract After Implement- ation Live 06/30/03 3,120 1,295 1,135 4,920 2,595 1,494 Total ATMs ATM Category 3 Bank-owned, Euronet-driven ATM Category 2 Euronet-owned, bank-branded ATM Category 1 Euronet-owned & b
Slide 19: EFT Processing: Q3 2003 ATMs by Country
Hungary Total: 413 Greece Total: 169 United Kingdom Total: 823 Germany Total: 392 Poland Total: 916 Croatia Total: 149 Czech Republic Total: 108 Egypt Total: 86 EFT Processing: Q3 2003 ATMs by Country Kosovo Total: 10 India Total: 26 Slovakia Total: 162
Slide 20: EFT Processing: Q3 2003 ATM Categories by Country
EFT Processing: Q3 2003 ATM Categories by Country Slovakia Hungary Czech Rep Egypt India Greece Poland 3,254 1,721 Total Kosovo Croatia Germany U.K. Total Category 3 Category 2 Category 1 Country
Slide 21: Prepaid Processing Segment
Prepaid Processing Segment
Slide 22: Prepaid Processing: Operating Income & EBITDA
EBITDA EBITDA EBITDA Prepaid Processing : Operating Income & EBITDA Op Income Note: In accordance with U.S. GAAP, e-pay results consolidated with EEFT from effective date February 3, 2003 and forward. Jan. Op Income Op Income
Slide 23: Prepaid Processing: Q3 2003 Financial Highlights
Prepaid Processing: Q3 2003 Financial Highlights Revenue - $36.5 million 13% increase over $32.2 million in reported Q2 2003 Op income - $3.0 million 11% increase over $2.7 million in reported Q2 2003 25% increase if equalized incentive compensation $3.45 million without purchase price intangible am
Slide 24: Prepaid Processing: Q3 2003 Business Highlights
Prepaid Processing: Q3 2003 Business Highlights Retailers update Independent retailers (500 in U.K. & 300 in Poland) Iceland convenience stores (full roll-out) Tesco supermarket stores (U.K. & Ireland) Sainsbury’s supermarket stores (3rd largest in U.K.) Mobile operator conversion to electronic top-
Slide 25: Prepaid Processing: Markets Summary — Points of Sale
Prepaid Processing: Q3 2003 Business Highlights Markets Summary — points of sale U.K. – 62,000 POS Australia – 4,700 POS New Zealand – 700 POS Poland – 400 POS Ireland – 1,000 POS United States – PaySpot - 1,900 POS (AIM) Malaysia – 3,700 POS Indonesia – 600 POS Current Prepaid Total POS Count – App
Slide 26: Software Solutions Segment, including R&D
Software Solutions Segment, including R&D
Slide 27: Software Solutions: Q3 2003 Financial Highlights
Software Solutions, including R&D : Q3 2003 Financial Highlights Financial Highlights Q3 YTD Revenue $3.7 million $11.4 million Op income $0.4 million $1.0 million EBITDA $0.7 million $1.8 million Other Highlights Q3 YTD Contract sales $3.6 million $9.9 million Software backlog of $5.5 million
Slide 28: Software Solutions: Q3 2003 Business Highlights
Software Solutions, including R&D : Q3 2003 Business Highlights Onsite implementations in 17 different countries YTD Splitska Banka signs large software contract Internet Banking - installed at three sites with five more in the pipeline Five upgrade projects completed, including our third largest cu
Slide 29: Q3 2003 Summary
Q3 2003 Summary Positive EPS of $0.06 in Q3, excluding FX & disc. ops Year-to-date EPS is $0.04, excluding FX and gain on sale of U.K. network All three business lines show good Q-on-Q improvement Additional 1,400+ new outsourced ATMs under contract New retailer contracts for prepaid segment in mult
Slide 30: Questions?
Michael Brown Chairman & CEO Rick Weller EVP & CFO Jeff Newman EVP & Corporate Counsel Questions?
Slide 31: Supplemental Data: Non-GAAP Financial Measures
Supplemental Data: The following schedules provided a full reconciliation of Non-GAAP Financial Measures. Management believes that EBITDA is an important measure of the Company’s current performance of business units without consideration of financing expenses, depreciation and amortization of histo
Slide 32: Reconciliation of Net Income to EBITDA: Q3 2003
Supplemental Data: Reconciliation of Net Income to EBITDA for Euronet Worldwide Q3 2003 (USD Millions) Consolidated Net Income $1.4 Taxes 0.7 FX 0.2 Equity in Income from Subs (0.2) Interest Expense 1.8 Interest Income (0.3) Depreciation 3.1 Rounding 0.1 EBITDA $6.8
Slide 33: Reconciliation of Net Income to EBITDA: Q2 2003
Supplemental Data: Reconciliation of Net Income to EBITDA for Euronet Worldwide Q2 2003 (USD Millions) Consolidated Net Income $(2.8) Taxes 0.9 FX 3.1 Equity in Income from Subs (0.1) Interest Expense 1.9 Interest Income (0.3) Depreciation 3.1 Rounding 0.1 EBITDA $5.9
Slide 34: Reconciliation of Net Income to EBITDA: Q1 2003
Supplemental Data: Reconciliation of Net Income to EBITDA for Euronet Worldwide Q1 2003 (USD Millions) Consolidated Net Income $15.4 Taxes 0.7 FX 1.8 Interest Expense 1.6 Interest Income (0.4) Equity in Income from subs 0.0 Gain on U.K. sale (18.0) Depreciation 2.8 EBITDA $3.9
Slide 35: EBITDA Reconciliation for Business Segments: Q3 2003
Supplemental Data: Reconciliation of Net Income to EBITDA for Business Segments Q3 2003 (USD Millions) Prepaid Software Corp Net Income $2.8 $0.4 $(3.4) Taxes 0.8 0.0 (0.5) FX 0.0 0.0 0.2 Interest Expense 0.0 0.0 1.7 Interest Income (0.3) 0.0 0.0 Equity-Income from subs (0.3) 0.0 0.0 Depreciation 0.
Slide 36: EBITDA Reconciliation for Business Segments: Q2 2003
Supplemental Data: Reconciliation of Net Income to EBITDA for Business Segments Q2 2003 (USD Millions) Prepaid Software Corp Net Income $(0.7) $0.4 $(3.2) Taxes 0.5 0.0 0.1 FX 3.4 0.0 0.3 Interest Expense 0.0 0.0 1.8 Interest Income (0.3) 0.0 0.0 Equity-Income from subs (0.1) 0.0 0.0 Gain on U.K. sa
Slide 37: EBITDA Reconciliation: EFT Processing Q3 2003
Supplemental Data: Reconciliation of Net Income to EBITDA for Business Segments EFT Processing Q3 2003 (USD Millions) Total EMEA Asia Pacific Net Income $1.6 $2.2 $ (0.6) Taxes 0.5 0.5 0.0 Interest Expense 0.1 0.1 0.0 Depreciation 1.8 1.7 0.1 Rounding 0.1 0.1 0.0 EBITDA $4.1 $4.6 $ (0.5)
Slide 38: EBITDA Reconciliation: EFT Processing Q2 2003
Supplemental Data: Reconciliation of Net Income to EBITDA for Business Segments EFT Processing Q2 2003 (USD Millions) Total Net Income $1.2 Taxes 0.4 FX (0.6) Interest Expense 0.2 Depreciation 1.9 EBITDA $3.1
Slide 39: EBITDA Reconciliation: Software YTD Q3 2003
Supplemental Data: Reconciliation of Net Income to EBITDA for Business Segments YTD Q3 2003 (USD Millions) Software Net Income $1.0 Depreciation 0.8 EBITDA $1.8
Slide 40: Revenue & Operating Income Adjusted for U.K. Sale and Outsourcing
Supplemental Data: Reconciliation of Revenue & Operating Income as Adjusted for U.K. Sale and Outsourcing Contract EFT Processing Q4 2002 ( USD Millions ) Revenue Operating Income As reported Q4 ‘02 $15.5 $(0.9) Less: U.K. (4.1) (1.0) Add: U.K. Outsourcing 0.4 0.4 Rounding - 0.1 Adjusted for U.K. Sa
Slide 41: Prepaid Processing Operating Income Excluding Intangible Amortization
Supplemental Data: Reconciliation of Prepaid Processing Division Operating Income Excluding Intangible Amortization Expense $3.45 Results before amortization expense of intangible assets 0.45 Add: Amortization of Acquired Intangible Assets $3.00 Results as reported Operating Income Q3-2003 (USD mill
Slide 42: Reconciliation of YTD-03 EPS to Adjusted EPS
Supplemental Data: Reconciliation of YTD-03 EPS to EPS without Gain on the Sale of the U.K. ATM Network, Foreign Exchange Losses and Discontinued Operations Losses (USD Millions, except per share data) $0.04 Adjusted EPS without FX loss, discontinued operations and U.K. Gain 29.0 Weighted Average Sh