Lesaka Technologies, Inc. · NASDAQ:LSAK
Lesaka Technologies — Q4 FY2022 Earnings Presentation
37 slides from Lesaka Technologies's earnings presentation, Sep 12, 2022
Slide 1: Q4 & FY22 Results Presentation
Q4 & FY22 Results | 1 Q4 & FY22 Results Presentation 12 September 2022
Slide 2: Agenda
Q4 & FY22 Results | 2 Agenda Business Overview & Performance Highlights Chris Meyer – Group CEO Merchant Business Steven Heilbron – Head of Merchant Business Consumer Business Lincoln Mali – CEO Southern Africa Financial Performance Naeem Kola – Group CFO Outlook Chris Meyer – Group CEO
Slide 3: Business Overview
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Slide 4: Our Mission
Q4 & FY22 Results | 4 Our Mission We Strive to Bring Financial Inclusion to Merchants and Consumers in Southern Africa Our Mission NASDAQ: LSAK Building a World Class Fintech Platform Re-inventing How Merchants Revolutionizing How a Large Grow, Manage, and Digitize Their Consumer Base Accesses, Mana
Slide 5: Key sources of friction for our customer
Q4 & FY22 Results | 5 Key sources of friction for our customer Financial services providers in South Africa face significant barriers to inclusion & digitization in the informal market Lack of trust High Lack of Low levels Lower in cash connectivity convenient of financial smartphone alternatives co
Slide 6: Our Mutually Reinforcing Business Model is Unique in South Africa
Q4 & FY22 Results | 6 Our Mutually Reinforcing Business Model is Unique in South Africa Incentivizing & rewarding both Merchants & Consumers for interacting in our ecosystem Digitization of cash Working Capital finance Banking Card acquiring Bill & supplier payments MERCHANTS CONSUMERS Consumer cred
Slide 7: The Lesaka platform offers growth & broader reach in an underpenetrated market
Q4 & FY22 Results | 7 The Lesaka platform offers growth & broader reach in an underpenetrated market A FinTech platform focused on cash & digitization delivering financial inclusion to merchants & consumers Merchants Consumer TAM over TAM 26m: LSM¹ 1-6 58 500 Branches Retailer pay point 700k 1.4m fo
Slide 8: A Unique Dual-sided FinTech Platform in South Africa
Q4 & FY22 Results | 8 A Unique Dual-sided FinTech Platform in South Africa Other Listed & Leading Fintech Ecosystems Around the World opportunity 3rd $415bn 6th 59m Largest African economy GDP (2021) Most populous African country Population (2021) South Africa is one of the most vibrant and develope
Slide 9: Ecosystem Compounds Value for Merchants, Consumers & Shareholders
Q4 & FY22 Results | 9 Ecosystem Compounds Value for Merchants, Consumers & Shareholders Connecting & serving consumers & merchants in one ecosystem Our Business Model enables us to: • Design innovative products to better serve our customers • Offering more value to Increasing Increasing incentivize
Slide 10: Integrating Merchant & Consumer into our dual-sided self reinforcing ecosystem
Q4 & FY22 Results | 10 Integrating Merchant & Consumer into our dual-sided self reinforcing ecosystem An opportunity to capture growth synergies & grow our ecosystem Extended reach to Complimentary small/micro Merchants distribution Expanded Differentiated footprint Repositioned, merchant solutions
Slide 11: Performance Highlights
Performance Highlights
Slide 12: Highlights for FY22
Q4 & FY22 Results | 12 Highlights for FY22 FY22 Q4 FY22 Revenue Seg Adj. EBITDA¹ FY22 Q4 Seg Adj. EBITDA¹ FY22 Q4 Seg Adj. Merchant EBITDA¹ $223m ($5m) $6m $7m FY21: $131m FY21: ($32m) FY21 Q4: ($7m) FY21 Q4: $<1m Seg Adj. Merchant EBITDA¹ Seg Adj. Consumer EBITDA¹ EPE consumer accounts 2 FY22 Q4 Se
Slide 13: Merchant Business
Merchant Business
Slide 14: Offering Innovative Solutions to the Formal & Informal Sectors
Q4 & FY22 Results | 14 Offering Innovative Solutions to the Formal & Informal Sectors Our dual-sided digital ecosystem solves daily pain points for merchants Informal Sector Formal Sector (<R150 000pm t/o rural, (higher t/o, urban, access township, spaza, trader) to formal bank relationships) Value-
Slide 15: Growing Merchant Business
Q4 & FY22 Results | 15 Growing Merchant Business Transformational shift in performance (Pre-existing merchant business & Connect since April 14, 2022) Merchant revenue for the quarter Seg Adj. Merchant EBITDA1 for the quarter $7.4m $105.7m ZAR 114m ZAR 1 645m $5.8m $86.2m Connect Group contribution
Slide 16: Revenue drivers
Q4 & FY22 Results | 16 Merchant | Pre-Existing Growth driven by key product areas Terminals VAS Value processed (ZARm) Bill payment volumes (Millions) 17 117 9% 13% 1 183 4 836 1 089 4 272 >100% 754 Revenue drivers 8 301 7 719 5 000 278 FY21 Q4 FY22 Q4 Prepaid electricity Prepaid airtime FY21 Q4 FY2
Slide 17: Growth momentum carries through to the end of June 2022
Q4 & FY22 Results | 17 Merchant | Connect Growth momentum carries through to the end of June 2022 Kazang cumulative throughput Cash settlements Card cumulative throughput Capital Connect 14% 29% 248 116% 183 ZAR 158m ZAR 223m ZAR 31.0bn ZAR 35.5bn ZAR 149m ZAR 1.2bn ZAR 2.6bn ZAR 229m ZAR 7.5bn ZAR
Slide 18: Consumer Business
Consumer Business
Slide 19: Offering High-Quality & Cost-Effective Financial Services to Underserved Consumers
Q4 & FY22 Results | 19 Offering High-Quality & Cost-Effective Financial Services to Underserved Consumers Fit for purpose consumer platform within our dual-sided digital ecosystem Commerce FinTech Enablement Processing Platform Platform Merchant Services Consumer Financial Payment Acceptance Service
Slide 20: Consumer turnaround - A cultural transformation
Q4 & FY22 Results | 20 Consumer turnaround - A cultural transformation Cost savings achieved whilst growing our active account base & maintaining transaction volumes & revenues Grow active EPE customers Stable lending book Cost Optimization driving EBITDA recovery 97% >100% 89% ZAR 1 424 ZAR 1 461 7
Slide 21: Financial Performance
Financial Performance
Slide 22: Group Income Statement ($'000)
Q4 & FY22 Results | 22 Group Income Statement ($’000) $’000 Three months ended June 30 Twelve months ended June 30 2022 2021 2022 2021 Revenue 121 789 34 517 222 609 130 786 Expense 122 185 46 899 243 310 180 311 Cost of goods sold, IT processing, servicing & support 100 522 22 353 168 317 96 248 Se
Slide 23: Basis for preparation of combined accounts for 12 months to 30 June 2022
Q4 & FY22 Results | 23 Basis for preparation of combined accounts for 12 months to 30 June 2022 Strong Business Attractive Model Market Consolidated Performance 1 July 2021 14 April 2022 30 June 2022
Slide 24: Combined Results
Q4 & FY22 Results | 24 Combined Results $’000 Three months ended June 30 Twelve months ended June 30 2022 2021 Growth QoQ 2022 2021 Growth YoY Revenue Consumer 15 700 18 282 (14%) 65 932 66 149 0% Merchant 105 714 15 855 >100% 155 366 61 478 >100% Pre-Existing business 19 521 15 855 23% 69 173 61 47
Slide 25: Lesaka Pre-Connect acquisition
Q4 & FY22 Results | 25 Lesaka Pre-Connect acquisition $’000 Three months ended June 30 Twelve months ended June 30 2022 2021 Growth QoQ 2022 2021 Growth YoY Revenue Consumer 15 700 18 282 (14%) 65 932 66 149 0% Merchant 19 521 15 855 23% 69 173 61 478 13% Other 475 463 3% 1 695 3 318 (49%) Eliminati
Slide 26: Momentum in Revenue Improvement Continued into FY22 Q4
Q4 & FY22 Results | 26 Momentum in Revenue Improvement Continued into FY22 Q4 ($’000) Revenue includes the impact of the Connect acquisition Revenue (from external customers) Revenue breakdown (from external customers) Merchant Consumer 121 789 105 614 18 282 375 1 595 15 700 10 040 1 121 5 710 5 40
Slide 27: Contracting SG&A contributing to EBITDA improvement
Q4 & FY22 Results | 27 Contracting SG&A1 contributing to EBITDA improvement | Pre-Existing Business Quarterly Full year 77% 65% 67% 63% 60% 53% 46% 45% 310 305 297 268 232 236 1 212 1 032 FY21 Q3 FY21 Q4 FY22 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY21 FY22 Opex (ZARm) Opex ratio Opex (ZARm) Opex ratio 1. Selli
Slide 28: Segment ADJ. EBITDA ($'000) | Turnaround
Q4 & FY22 Results | 28 Segment ADJ. EBITDA ($’000) | Turnaround FY21 Q4 FY22 Q1 FY22 Q2 FY22 Q3 FY22 Q3 (normalized)¹ FY22 Q4 FY22 Q4 (normalized)¹ 1 337 Adj. for reorg costs 386 6 143 6 143 (6 740) (7 426) (3 633) (5 508) (3 450) (10 774) (4 806) (3 064) (5 068) (3 450) Adj. for (5 642) once off (2
Slide 29: Cashflow & Net Debt ($'000)
Q4 & FY22 Results | 29 Cashflow & Net Debt ($’000) Improvement in operational cashflows Cash used in operating activities (ex Working Capital) Net debt position at June 30, 2022 $ (millions) June 30 2022 Cash on hand 1 105 (26 688) Debt (208) Acquisition debt (64) (63 066) Existing short-term facili
Slide 30: Outlook
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Slide 31: Our Growth Strategies
Q4 & FY22 Results | 31 Our Growth Strategies We have multiple avenues to drive accelerated growth 1 2 3 Grow merchant Accelerate Develop new solutions and consumer base flywheel effect in unified ecosystem Continue to provide high quality A self reinforcing business model Leverage our dual-sided eco
Slide 32: Outlook
Q4 & FY22 Results | 32 Outlook Well positioned for growth with multiple levers for expansion FY23 Q1 FY22 Q4 Outlook Revenue $121m $130m - $133m Total Segment Adj. EBITDA 1 $6.1m $6.1m - $6.5m Consumer monthly EBITDA break-even position evident FY21 Q3 FY21 Q4 FY22 Q1 FY22 Q2 FY22 Q32 FY22 Q4 ($7.6m
Slide 33: Thank you
Q4 & FY22 Results | 33 Thank you
Slide 34: Appendix
Appendix
Slide 35: Reconciliation of Non-GAAP Measures
Q4 & FY22 Results | 35 Reconciliation of Non-GAAP Measures Three months ended June 30 2022 2021 $’000 EPS, basic $’000 EPS, basic Fundamental net loss (Non-GAAP) (5 692) (0.09) (10 159) (0.18) Loss on disposal of equity accounted investment (30) - Transaction costs (4 339) (174) Legacy processing ad
Slide 36: Balance Sheet
Q4 & FY22 Results | 36 Balance Sheet $ (millions) June 30 2022 March 31 2022 June 30 2021 Net cash 1 53 194 210 Investments and equity accounted investments 82 84 86 Total assets 657 434 428 Total equity and RCS 314 338 361 Total debt 208 46 14 Book value / share 5.04 5.83 5.79 Net cash / share 0.86
Slide 37: Safe Harbor Statement
Q4 & FY22 Results | 37 SAFE HARBOR STATEMENT The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for certain forward-looking statements so long as such information is identified as forward-looking and is accompanied by meaningful cautionary statements identifying important
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