Lesaka Technologies, Inc. · NASDAQ:LSAK
Lesaka Technologies — Net1 UEPS Technologies — Q3 2019 Earnings Presentation
29 slides from Lesaka Technologies's earnings presentation, May 2019
Slide 1: Q3 2019 Investor Presentation
Q3 2019 Investor Presentation www.net1.com
Slide 2: Safe Harbor Statement
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 factors that could cau
Slide 3: Defined Terms
Defined Terms Unless specifically noted otherwise within this presentation, the following terms are hereby defined as follows: Constant Currency: We analyze our results of operations both in U.S. dollars, as presented in the consolidated financial statements, and supplementally in ZAR, because ZAR i
Slide 4: Performance Summary
Performance Summary Company highlights include: • Progress made to achieved break-even of South African operations by the end of Q4 2019 • Continued deleveraging of balance sheet – early-settled long-term debt on May 3, 2019 • Commenced corporate actions with a reduction in DNI interest from 55% to
Slide 5: Financial Highlights Third Quarter 2019
FINANCIAL HIGHLIGHTS Third Quarter 2019
Slide 6: Q3 2019 Financial Report: Year to date highlights
Q3 2019 Financial Report Year to date F2019 Financial Highlights – including DNI • Revenue - $310 million • 33% decrease from $464 million in YTD 2018 • 26% decrease on a constant currency basis • Adjusted Negative EBITDA - ($12) million • YTD 2018 EBITDA $103 million • Fundamental Net Loss – ($84)
Slide 7: Q3 2019 Financial Report: Highlights
Q3 2019 Financial Report Q3 2019 Financial Highlights – including DNI • Revenue - $86 million • 47% decrease from $163 million in Q3 2018 • 37% decrease on a constant currency basis • Adjusted Negative EBITDA - ($1) million • Q3 2018 EBITDA $34 million • Fundamental Net loss – ($35) million • Q3 201
Slide 8: Business Segment Results – Third quarter
Q3 2019 Financial Report Business Segment Results – Third quarter – excluding DNI Q3 constant currency SATP Revenue Q3 USD ITP Revenue R 846 R 878 60 1,000 $ 46 50 $ 42 800 $ 34 USD Millions 40 ZAR Millions 600 30 4% 400 R 246 20 11% (26%) 200 (72%) 10 - - 2017 2018 2019 2017 2018 2019 • SATP consta
Slide 9: Business Segment Results – year to date
Q3 2019 Financial Report Business Segment Results – year to date – excluding DNI USD Revenue Operating Operating Margin (Millions) (Loss) Income F2019 F2018 F2019 F2018 F2019 F2018 SATP $ 77 $ 204 ($ 28) $ 39 (37%) 19% % Change* (62%) nm ITP 112 136 1 (15) 1% (11%) % Change* (18%) nm FIAT 72 168 (28
Slide 10: Business Segment Results – Third quarter
Q3 2019 Financial Report Business Segment Results – Third quarter – excluding DNI USD Revenue Operating Operating Margin (Millions) (Loss) Income Q3 2019 Q3 2018 Q3 2019 Q3 2018 Q3 2019 Q3 2018 SATP $ 17 $ 74 ($ 13) $ 13 (75%) 17% % Change* (72%) nm ITP 34 46 2 (15) 6% (32%) % Change* (12%) nm FIAT
Slide 11: 2019 Revenue Analysis – Key contributors
Q3 2019 Financial Report 2019 Revenue Analysis – Key contributors 11
Slide 12: Balance Sheet Overview
Q3 2019 Financial Report Balance Sheet Overview USD (Millions) Mar 31, 2019 Jun 30, 2018 Net Unrestricted Cash $ 40 $ 90 Investments and Equity Accounted Investments(1) $ 323 $ 299 Total Assets $ 840 $ 1,219 Total Equity $ 501 $ 738 Total Long-Term Debt(2) $ 16 $ 50 Book Value / Share $ 8.81 $ 13.03
Slide 13: Key Investments
Q3 2019 Financial Report Key Investments % held Balance Sheet Value (Mar 2019) Equity Accounted: Bank Frick 35% $46 million >$46 million (1) Finbond (JSE listed) 29% 46 million $87 million (2) OneFi 25% $8 million $25 - $35 million (3) DNI 38% $74 million $74 million (4) Investments: Cell C 15% $122
Slide 14: Business Overview: South African Transaction Processing
BUSINESS OVERVIEW SOUTH AFRICAN TRANSACTION PROCESSING Third Quarter 2019
Slide 15: SATP Segment Highlights
SATP Segment Highlights Q3 2019 Financial Highlights • Revenue - $17 million • 76% decrease from $74 million in Q3 2018 • 72% decrease on a constant currency basis • Lower transaction revenue from fewer EPE accounts and SASSA Grindrod accounts • Expiration of contract in CPS at end of Q1 2019, no re
Slide 16: Business Overview: International Transaction Processing
BUSINESS OVERVIEW INTERNATIONAL TRANSACTION PROCESSING Third Quarter 2019
Slide 17: ITP Segment Highlights
ITP Segment Highlights Q3 2019 Financial Highlights • Revenue - $34 million • 26% decrease compared to $46 million in Q3 2018 • Lower transaction values and volume in South Korea • Contraction in IPG processing activities particularly China processing and crypto-currency transactions • Operating inc
Slide 18: ITP Segment Highlights: Q3 2019 Key Trends
ITP Segment Highlights Q3 2019 Key Trends • South Korea and Rest of the World (ROW) Growth • South Korea revenue down 13% in KRW compared to Q3 2018 due to lower transaction values and volumes • ROW revenue impacted by contraction in IPG processing activities Revenue KRW Billions Revenue ROW (excl K
Slide 19: IPG Consolidation and Expansion
IPG Consolidation and Expansion IPG PLAYS AN INTEGRAL ROLE IN PROVIDING END-TO-END SOLUTIONS FOR ISSUING, ACQUIRING AND PROCESSING GLOBALLY. Q3 2019 PROGRESS UPDATES: Card Processing Volume ($Mil) 120 • Consolidation of various business units largely 100 complete with appropriate management structur
Slide 20: Business Overview: Financial Inclusion & Applied Technologies
BUSINESS OVERVIEW FINANCIAL INCLUSION & APPLIED TECHNOLOGIES Third Quarter 2019
Slide 21: FIAT Segment Highlights
FIAT Segment Highlights Q3 2019 Financial Highlights • Revenue - $19 million • 68% decrease from $60 million in Q3 2018 • 63% decrease on a constant currency basis • Operating Loss - $5 million • Operating income $15 million in Q3 2018 • Q3 2019 Includes retrenchment costs of $1.6 million • EPE Acco
Slide 22: FIAT Segment Highlights: Q3 2019 Key Trends
FIAT Segment Highlights Q3 2019 Key Trends # of EPE Accounts Receiving Grants Value of Loans Outstanding 1,400 Millions 1,200 2.0 1,000 Millions 1.5 800 600 1.0 400 0.5 200 0 0.0 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19 As of quarter ended Outstanding Capital Deferred Service Fees Number of
Slide 23: Investment's Highlights
2018 revenue and EBITDA of ZAR 16.8 billion and ZAR 3.5 billion resp. MTN tower sharing agreement operational in November 2018 Offer from Buffet Consortium as a new minority investor Q3-2019 KEY UPDATES MOBIKWIK v Carbon: expanded offering to be full-fledged digital financial services platform Curre
Slide 24: Appendix A
Appendix A > Ne NET1 bo aE “a
Slide 25: Reconciliation of non-GAAP measures
Reconciliation of non-GAAP measures Third quarter – Fundamental Net (Loss) Income and Negative EBITDA Three months ended Mar-19 Mar-18 $ '000 EPS, basic $ '000 EPS, basic Fundamental net (loss) income (Non-GAAP) (34,951) (0.62) 53,759 0.95 Impairment loss (5,305) (19,865) Loss on disposal of DNI (5,
Slide 26: Reconciliation of non-GAAP measures
Reconciliation of non-GAAP measures Year to date – Fundamental Net (Loss) Income Nine months ended Mar-19 Mar-18 $ '000 EPS, basic $ '000 EPS, basic Fundamental net income (Non-GAAP) (83,781) (1.48) 100,656 1.77 Impairment loss (13,502) (19,865) Loss on disposal of DNI (5,140) - Amortisation of inta
Slide 27: Reconciliation of non-GAAP measures
Reconciliation of non-GAAP measures Year to date –Negative EBITDA Nine months ended Mar-19 Mar-18 $ '000 EPS, basic $ '000 EPS, basic Net income attributable to net1 (GAAP) (123,924) (2.18) 61,480 1.08 Change in fair value of equity securities 42,099 (37,843) Loss on disposal of DNI 5,140 - Non-cont
Slide 28: Appendix B
Appendix B > Ne NET1 bo aE “a
Slide 29: Reconciliation of non-GAAP measures
Reconciliation of non-GAAP measures Third quarter –Negative EBITDA (continuing and discontinued operations) Three months ended March 31, 2019: Continuing Discontinued Total Operating income (GAAP) (22,355) 672 (21,683) Depreciation and amortization 7,454 2,427 9,881 Impairment loss - 5,305 5,305 (Ne
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