Lesaka Technologies, Inc. · NASDAQ:LSAK
Lesaka Technologies — Q3 FY2022 Earnings Presentation
31 slides from Lesaka Technologies's earnings presentation, May 11, 2022
Slide 1: Lesaka FY22 Q3 Results Presentation
FY22 Q3 Results Lesaka FY22 Q3 Results Presentation 11 May 2022
Slide 2: Safe Harbor Statement
FY22 Q3 Results 2 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 facto
Slide 3: Introduction
Lesaka Introduction
Slide 4: The Lesaka platform offers growth and broader reach
FY22 Q3 Results 4 INTRODUCTION The Lesaka platform offers growth and broader reach Merchant Consumer CORE FOCUS AREAS TAM TAM 700k Formal 1.4m Informal over 26m: LSM* 1-6 58 500 >1% >4% MARKET SHARE Branches MARKET SHARE FINANCIAL NUMBERS +6 500 +45 500 Retailer pay points EPE & EPE lite Formal segm
Slide 5: Expanded Senior Leadership team
FY22 Q3 Results 5 Expanded Senior Leadership team Chris Meyer Naeem Kola Lincoln Mali Steven Heilbron Denzil Landie Basie Kok Karabo Mothibi Group Group CEO Connect Group Chief Head: CEO Financial Officer Southern Africa Group CEO Head of Risk Technology Human and Compliance Officer Resources
Slide 6: Highlights for the Third-Quarter 2022 (ex Connect)
FY22 Q3 Results 6 INTRODUCTION Highlights for the Third-Quarter 2022 (ex Connect) Revenue Seg Adj EBITDA* Seg Adj Merchant EBITDA* Seg Adj Consumer EBITDA* CORE FOCUS AREAS $35.2m $344k*** $1.3m ($1.0m)*** ($10.7m) $273k ($7.6m) +27% yoy** FINANCIAL NUMBERS prior year prior year prior year Active EP
Slide 7: Strategic Focus Areas
Strategic Focus Areas
Slide 8: Strategic focus areas for FY2022
FY22 Q3 Results 8 INTRODUCTION Strategic focus areas for FY2022 CORE FOCUS AREAS Return consumer business to breakeven FINANCIAL NUMBERS Grow merchant Grow Grow Optimise Be a Engage base active EPE ARPU costs world-class fintech stakeholders organisation OUTLOOK
Slide 9: Grow merchant | Introducing the Connect Group
FY22 Q3 Results 9 INTRODUCTION Grow merchant | Introducing the Connect Group Addressable market CORE FOCUS AREAS • Large reliance on cash with >90% of South Africans purchasing food and groceries using cash and >85% Cash management & payment solutions paying their bills using cash Digitised cash vau
Slide 10: Grow merchant | Introducing the Connect Group (cont'd)
FY22 Q3 Results 10 INTRODUCTION Grow merchant | Introducing the Connect Group (cont’d) CORE FOCUS AREAS Merchant lending platform Addressable market Fully-digital, short-term business funding solutions GROWTH • Retail merchants in SA operating for more than 3 years, for the South African retail sect
Slide 11: Connect Group: Key revenue drivers
FY22 Q3 Results 11 INTRODUCTION Connect Group: Key revenue drivers* Kazang (VAS & Bill payment) Card Connect & Kazang Pay 3 yr CAGR value processed: 53% 3 yr CAGR value processed: 16% 3 yr CAGR devices: 26% 3 yr CAGR terminals: 67% CORE FOCUS AREAS Value processed (Rbn) Devices Card value processed
Slide 12: Growing Merchant Business | Existing merchant segment
FY22 Q3 Results 12 INTRODUCTION Growing Merchant Business | Existing merchant segment Increasing Segment Revenue* Terminals VAS value processed (Rm) CORE FOCUS AREAS 10 454 1 071 12% 142% 58% yoy yoy 960 yoy 7 924 7 914 8 181 736 5 010 305 1 420 $18.5m Revenue drivers Q1 Q2 Q3 Prepaid electrictity P
Slide 13: Deep understanding of our consumers
FY22 Q3 Results 13 INTRODUCTION Deep understanding of our consumers Gender demographics Age demographics Personal income Grant type 3% CORE FOCUS AREAS 10% 80 - 100 3% Average deposit into customer’s account <R1,200 60 - 80 25% 26% 50 - 60 11% 61% Age 40 - 50 19% 82% 18% Child support grant Old age
Slide 14: Returning consumer business to breakeven
FY22 Q3 Results 14 INTRODUCTION Returning consumer business to breakeven Grow active EPE customers Grow ARPU: stable lending book Optimise cost: driving EBITDA recovery FY21 FY21 FY22 FY22 FY22 FY22 CORE FOCUS AREAS Q3 Q4 Q1 Q2 Q3 Q3** R1 417 -R16 -$1m -$4.6m -$6.9m -$6.9m -$9.5m R1 293 -$7.6m $24.0
Slide 15: Being a world class Fintech organisation
FY22 Q3 Results 15 Being a world class Fintech organisation Being a world class Fintech organisation requires… requires… 1 Highly talented people 2 An environment where they can outperform 3 A clear vision and strategy
Slide 16: Improving Stakeholder Engagements in South Africa
FY22 Q3 Results 16 INTRODUCTION Improving Stakeholder Engagements in South Africa CORE FOCUS AREAS Enterprise Offering learnerships development Proactive to employees and through supporting engagement communities small business with SASSA* FINANCIAL NUMBERS Offering financial Supporting Supporting i
Slide 17: Financial Performance (excluding Connect Group)
Financial Performance (excluding Connect Group)
Slide 18: Income Statement ($'000)
FY22 Q3 Results 18 INTRODUCTION Income Statement ($’000) Three Months Ended March 31 Nine Months Ended March 31 2022 2021 2022 2021 CORE FOCUS AREAS $’000 $’000 $’000 $’000 Revenue 35 202 28 828 100 820 96 269 Expense (44 623) (43 120) (130 893) (136 541) Cost of Goods Sold, IT Processing, Servicing
Slide 19: Revenue Improvement underpinned by growth in Merchant
FY22 Q3 Results 19 INTRODUCTION Revenue Improvement underpinned by growth in Merchant ($’000) Revenue (from external customers) Revenue breakdown (from external customers) Merchant Consumer CORE FOCUS AREAS 22% yoy 18 376 35 202 501 - 16 429 51% 16 236 1% 397 yoy 460 137 yoy 28 828 1 709 2 169 12 17
Slide 20: Contracting SG&A contributing to EBITDA improvement
FY22 Q3 Results 20 INTRODUCTION Contracting SG&A* ($’000) contributing to EBITDA improvement 30 00 0 80% CORE FOCUS AREAS 71% 66% 70% 25 000 59% 57% 60% 20 000 50% 43% FINANCIAL NUMBERS 1 5 0 00 40% 30% 1 0 000 20% 20 442 24 546 18 892 5 000 15 184 17 746 10% OUTLOOK - 0% FY21 Q3 FY21 Q4 FY22 Q1 FY2
Slide 21: Segment ADJ EBITDA | Turnaround is Evident
FY22 Q3 Results 21 INTRODUCTION Segment ADJ EBITDA ($’000) | Turnaround is Evident FY21 Q3 FY21 Q4 FY22 Q1 FY22 Q2 FY22 Q3 FY22 Q3 (normalised*) CORE FOCUS AREAS Adj for reorg costs 344 (2 216)* (2 560) (6 740) (3 633) (7 426) (5 508) (10 652) FINANCIAL NUMBERS (4 235) (2 560) 82% yoy (1 980) improv
Slide 22: Consumer lending book continues to grow year over year
FY22 Q3 Results 22 INTRODUCTION Consumer lending book continues to grow year over year 6% yoy CORE FOCUS AREAS 1.4% 1.2% 1.2% 1.3% 1.0% $24.0m $22.9m $22.9m $23.5m $24.7m FINANCIAL NUMBERS R346m R382m R336m R339m R359m OUTLOOK FY21 Q3 FY21 Q4 FY22 Q1 FY22 Q2 FY22 Q3 Capital outstanding Loss ratio No
Slide 23: Improvement in operational cashflow
FY22 Q3 Results 23 INTRODUCTION Improvement in operational cashflow ($’000) FY21 Q3 FY21 Q4 FY22 Q1 FY22 Q2 FY22 Q3 FY22 Q3 (normalised*) CORE FOCUS AREAS - 142 -5 994 FINANCIAL NUMBERS -9 565 -10 288 -10 474 -13 574 OUTLOOK Cash used in operating activities (ex Working capital) *Normalised for $5.9
Slide 24: Proforma net debt position after Connect Group acquisition
FY22 Q3 Results 24 INTRODUCTION Proforma net debt position after Connect Group acquisition USD (millions) March 31, 2022 CORE FOCUS AREAS Company cash on hand* 184 Connect Group Net debt on hand (70) FINANCIAL NUMBERS Net cash 114 Acquisition funding (240) Lesaka debt raised (76) Connect debt raised
Slide 25: Outlook
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Slide 26: Continue execution on FY2022 strategic focus areas
FY22 Q3 Results 26 26 INTRODUCTION Continue execution on FY2022 strategic focus areas CORE FOCUS AREAS Return consumer business to breakeven FINANCIAL NUMBERS Grow merchant Grow Grow Optimise Be a Engage base active EPE ARPU costs world-class fintech stakeholders organisation OUTLOOK
Slide 27: Thank you
FY22 Q3 Results 11 April 2022 Thank you Annexure A
Slide 28: Annexure A: Reconciliation of Non-GAAP measures
FY22 Q3 Results 28 Annexure A: Reconciliation of Non-GAAP measures RECONCILATION OF NON-GAAP MEASURES THREE MONTHS ENDED MAR-22 MAR-21 $ '000 EPS, BASIC $ '000 EPS, BASIC FUNDAMENTAL NET LOSS (NON-GAAP) (3 108) (0.05) (13 627) (0.24) GAIN RELATED TO FAIR VALUE ADJUSTMENT TO CURRENCY OPTIONS 6 120 -
Slide 29: Annexure A: Balance sheet
FY22 Q3 Results 29 Annexure A: Balance sheet USD (MILLIONS) March 31, 2022 June 30, 2021 NET CASH* $ 194 $ 210 INVESTMENTS AND EQUITY ACCOUNTED INVESTMENTS $ 84 $ 86 TOTAL ASSETS $ 434 $ 428 TOTAL EQUITY AND RCS $ 338 $ 361 TOTAL DEBT $ 46 $ 14 BOOK VALUE / SHARE $ 5.83 $ 6.36 NET CASH / SHARE $ 3.3
Slide 30: Annexure A: Contribution to improvement in EBITDA
FY22 Q3 Results 30 INTRODUCTION Annexure A: Contribution to improvement in EBITDA ($m) CORE FOCUS AREAS (2 216) (1 156) 3 402 (8 068) 998 (5 852) FINANCIAL NUMBERS (12 056) 6 596 OUTLOOK FY21 Q3 Segment Consumer (excluding Merchant Other Corporate/eliminations FY22 Q3 EBITDA Reorganisation costs FY2
Slide 31: Annexure A: Defined Terms
FY22 Q3 Results 31 Annexure A: 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 suppl
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