Ofx Group Ltd. · ASX:OFX
Ofx — H1 FY2017 Earnings Presentation
28 slides from Ofx's earnings presentation, Nov 15, 2016
Slide 1: Results announcement for the half-year ended 30 September 2016
Results announcement for the half-year ended 30 September 2016 15 November 2016 November 2016
Slide 2: Agenda
Agenda CEO update Financial update Outlook Strategy update Q&A A Appendix November 2016
Slide 3: CEO Update
CEO Update Richard Kimber Chief Executive Officer November 2016
Slide 4: Investment Highlights
Investment Highlights CEO Update We commenced our 3 year Accelerate Strategy with a step change in investment for marketing and technology and continue to be profitable in all segments. In the half we achieved; Increased Australian Market Penetration • Marketing mix broadened with increased investme
Slide 5: Operating Highlights
Operating Highlights CEO Update Scalability and Customer Experience Infrastructure process improvements • Improvements to client • Continued expansion • Migration to cloud based on-boarding process of banking capabilities provider Amazon Web Services, through use of technology providing variability
Slide 6: Finance Update
Finance Update Mark Ledsham Chief Financial Officer November 2016
Slide 7: Underlying results
Underlying results Finance Update • Return to half on half revenue growth • Driven by growth in transactions • Improving quality of active client base with more transactions per client • ATV is a driver of revenue, and has been impacted by post BREXIT market conditions • Controlled investment inline
Slide 8: Operating metrics underpin result
Operating metrics underpin result Finance Update More corporate clients … combined with an … a turnover result resulting in more ATV impacted by market that is consistent transactions per client … events has driven … with 2HFY16. Active Clients Transactions ATV Turnover 152k 419k $23k $9.3b 0.5% up
Slide 9: Robust build up of cohorts drives strong transactional growth
Robust build up of cohorts drives strong transactional growth Finance Update Corporate clients Individual clients 300 200 Corporate Transactions Individual Transactions 180 250 160 Thousands 140 200 120 Thousands 150 100 80 100 60 40 50 20 - - 3+ 2-3yr 1-2yr <1yr 3+ 2-3yr 1-2yr <1yr • On average tra
Slide 10: Market conditions have caused lower ATVs impacting revenue
Market conditions have caused lower ATV’s impacting revenue Finance Update 25 40 Corporate Revenue Individual Revenue 35 20 30 15 25 Millions 20 Millions 10 15 10 5 5 - - 3+ 2-3yr 1-2yr <1yr 3+ 2-3yr 1-2yr <1yr Corporate ATV Individual ATV 40,000 25,000 35,000 20,000 30,000 25,000 15,000 20,000 15,0
Slide 11: Half on half revenue growth from all segments
Half on half revenue growth from all segments Finance Update Segment Net Operating Income • Record net operating income revenue in Australia and North America • Investment in brand and improving marketing mix in Australia, resulted in half on half revenue growth of 7.4%. Only the North America busin
Slide 12: Selective investments in strategic capabilities
Selective investments in strategic capabilities Finance Update Underlying operating expenses • Strategic increase in operating expenses in order to 1HFY17 2HFY16 1HFY16 invest in future growth is in line with previously disclosed Accelerate Strategy Employee costs 20.3 18.1 18.0 Promotional costs 9.
Slide 13: Balance Sheet
Balance Sheet Finance Update • Net cash $41.5m up 9% from 31 March 1HFY17 2HFY16 % change • The Group requires net cash to enable Assets • Adherence with regulatory capital Cash 129.4 142.1 (9%) requirements Receivables due from financial institutions 26.6 20.8 28% • Collateral with banking counterp
Slide 14: Strong cash flow conversion supports investment
Strong cash flow conversion supports investment Finance Update EBTDA to net free cash flow (excluding customer liabilities) 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 - EBTDA Net Share based Settlement of Tax Net operating Capitalised PP&E Net free cash Dividends receivables - paymen
Slide 15: Outlook
Outlook November 2016
Slide 16: Outlook
Outlook Outlook 500 Transactions 450 The Group will continue to acquire quality clients building 400 on current cohorts, and maintaining the momentum in 350 transactional growth. 300 Thousands 250 Assuming the AUD continues to trade within current ranges 200 against USD, GBP, EUR, CAD and NZD the tr
Slide 17: Strategy Update
Strategy Update November 2016
Slide 18: A 3 year Accelerate strategy
A 3 year Accelerate strategy Strategy Update Our investments over 1H17 position OFX to achieve $200m revenue by FY19, with accelerated earnings growth. GROWTH OPPORTUNITIES Increase AUD Increase non-AUD Target adjacencies penetration penetration Scaling out new online Tilt towards Executing US selle
Slide 19: Scalable operating model supported by world class assets
Scalable operating model supported by world class assets Strategy Update BRAND 1 single global brand developing Online scalable platform Targeting mass affluent and corporates combined with global 24/7 service SERVICE POSITIONING Preferred option for high transaction value and regular payment needs
Slide 20: Summary
Summary Strategy Update • Delivered half on half revenue growth across all key markets. • Period of significant investment: split equally between generating transaction growth and in underlying infrastructure to build a scalable and flexible business • Anticipate good second half margin growth as tr
Slide 21: Q&A
Q&A November 2016
Slide 22: Appendix
A Appendix November 2016
Slide 23: AUD penetration: tilt towards corporates and unlock value from our client base
AUD penetration: tilt towards corporates and unlock value from our client base A PHASE 2 Targeted performance marketing across the customer value chain ACQUIRE: launching targeted Programmatic Display advertising with new creative to drive registrations OPPORTUNITY PHASE 1 CONVERT: improving the on-
Slide 24: Non-AUD penetration: US go-to-market strategy
Non-AUD penetration: US go-to-market strategy Appendix A OPPORTUNITY PHASE 1 PHASE 2 5x bigger payment flows than Completed market research Introducing OFX brand in December Australia yet 5x smaller share and identified target segments 2016; full launch in April 2017 in OFX portfolio Ramping up B2B
Slide 25: Target adjacencies: scaling out new online sellers business line
Target adjacencies: scaling out new online sellers business line Appendix A OPPORTUNITY POSITIONING PHASE 1 PHASE 2 Global Retail Ecommerce is estimated to be worth 1.9 trn in 2017. Providing 3rd party Online Leverage our banking Continue to roll out product Marketplaces account for 30% Sellers expo
Slide 26: Technology: building scalable and agile technology in the cloud
Technology: building scalable and agile technology in the cloud Appendix A SCALABLE AND RESILIENT NEW TECHNOLOGY AGILE PRODUCT INFRASTRUCTURE ARCHITECTURE DELIVERY CAPABILITY Executing via product aligned All core applications now in the cloud Progressing well with migration development teams (AWS)D
Slide 27: People: empowering innovation
People: empowering innovation Appendix A “Support every OFXer to be their best self” Individuals who work as their best self will thrive. Thriving individuals will do their best work and make their greatest contribution which will ensure we achieve results beyond expectations. CORE ENABLERS Leadersh
Slide 28: Thank you
Thank you November 2016