Hightech Payment Systems Sa · CSEMA:HPS
Hightech Payment Systems Sa — HPS — FY2022 Earnings Presentation
36 slides from Hightech Payment Systems Sa's earnings presentation, Mar 27, 2023
Slide 1: Earnings Presentation Full Year 2022
Earnings Presentation Full Year 2022 March 27, 2023 1
Slide 2: Business & Strategy update
Business & Strategy update Abdeslam Alaoui, CEO 2
Slide 3: Key 2022 highlights
Key 2022 highlights Historic level of 2022 FY Results ⏵ Revenues of >1 billion MAD + 21%, a 1st in HPS’s history ⏵ Net Income Group share at 117 MMAD +18%, a record level Booming backlog (+27.5%) setting the company up for revenue acceleration in 2023 ⏵ Doubling of sales led to growth of 84% growth
Slide 4: 2022: Governance and Transformation Program
2022: Governance and Transformation Program NEW GOVERNANCE STRATEGIC FUTURE ALIGNMENT STRUCTURE REVIEW FORWARD PROGRAM • Separation of the functions of • Appointment of Abdeslam Transformation Program to drive: Alignment of the organization to Chairman of the Board and CEO Alaoui as CEO • Accelerati
Slide 5: Why an acceleration now?
Why an acceleration now? • Strong demand for payments software and solutions in HPS’s core markets • Best-in-class software and this competitive advantage should widen with release of Version 4.0 • HPS is winning business of Tier 1 customers – some of the biggest banks and companies in the world inc
Slide 6: Accelr8: Key market drivers to 2027 Ambition
Accelr8 : Key market drivers to 2027 Ambition Governance & Organisation Technological innovations Transformation Regulatory framework evolution Innovation and R&D Accelr8 Industry consolidation & new Key positioning with the industry player emergence value chain Consumer behaviour and Diversified bu
Slide 7: Accelr8: Our strategic initiatives
Our strategic initiatives Sustainable growth ⏵ New business stream 2 Product & service quality 1 ⏵ New territories stream ⏵ Software versions consolidation ⏵ New business models ⏵ M&A stream ⏵ Package of the software in order to minimize deployment effort ⏵ Partnerships stream ⏵ Build ‘‘ Ready produ
Slide 8: Accelr8 - Transformation program for 2023-2027
Accelr8 - Transformation program for 2023-2027 ACCELR8 HPS in 2022 Non-recurring HPS in 2027 Non-recurring 15% 29% Organic growth Between 1,000 12% < CAGR < 15% 2,200 MMAD Recurring MMAD and Recurring 3,000 MMAD 48% Regular Regular External growth 60% 25% Between 400 MMAD 23% and 800 MMAD EBITDA mar
Slide 9: M&A priorities
M&A priorities Priorities Priority 1 Priority 2 Priority 3 Expand our geographical footprint On premise offer ü SaaS offer ü Consolidate our market shares On premise offer ü SaaS offer ü Expanding the technology and services offering ü New payment Businesses ü Priority 1: Targets that are essential
Slide 10: PowerCARD Version 4 main differentiators
PowerCARD Version 4 main differentiators C L O U D N AT I V E MICRO-SERVICES D ATA B A S E A G N O S T I C Scalability: Customers instantly scale up or Scalability: Scaling of individual services Constraint free: Utilizing state-of-the-art down their IT resources helping businesses database technolo
Slide 11: New versions have historically accelerated revenue growth
New versions have historically accelerated revenue growth 1.200 V4 CCAGR: 14.5% 1.000 800 600 CCAGR: 21% V3 400 CCAGR: 20% V2 200 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 11
Slide 12: ESG priorities aligned with UN sustainable development goals
ESG priorities aligned with UN sustainable development goals QUALITY EDUCATION CLIMATE ACTION Actions under responsibility of HPS Foundation • Mitigating the effects of climate change • Contribute to the improvement of quality • Reducing the carbon footprint of HPS education in Morocco and Africa •
Slide 13: Operating & Financial performance
Operating & Financial performance Brahim Berrada, MD Corporate 13
Slide 14: Historical financial performance
Historical financial performance REVENUE EBITDA / MARGIN BACKLOG 1,007 MMAD 208 MMAD 20.6% 934 MMAD +20.8% Growth +10.1% Growth +27.5% Growth +18.8% Proforma SEGMENT PERFOMANCE PAYMENT ACTIVITY SWITCHING ACTIVITY TESTING ACTIVITY 84% 7% 9% 820 MMAD 69 MMAD 87 MMAD +28.1% Growth +10.3% Growth -7.8% G
Slide 15: Sustainable Business Model
Sustainable Business Model NON RECURRING 29% Growth drivers • New License deals RECURRING 48% • New Testing contracts Growth drivers • License model +7.1% Growth 20% - License fee • New SaaS deals - PS fee 9% • Volume growth for existing SaaS 23% customers • Testing -7.8% Growth • New License custom
Slide 16: Payment activity: License Model
Payment activity License Model Share in Consolidated Revenues ⏵ Confirmation of our technology by one of the ⏵ New contract to implement PowerCARD for largest banks worldwide with the Credit the National Switch in Gambia Card module after Debit Card in 2019 ⏵ Continued rollout of PowerCARD for the ⏵
Slide 17: Payment activity: SaaS Model
Payment activity SaaS Model Share in Consolidated Revenues ⏵ Continued Rollout of PowerCARD on the ⏵ Internal project launched to consolidate Amazon Cloud for Uno Bank in Philippines platforms and PowerCARD versions used on SaaS model ⏵ Signature of our 1st contract in SaaS in Saudi Arabia ⏵ New mon
Slide 18: Payment activity
Payment activity Revenues Breakdown & Growth by Sub-activity Revenues Breakdown & Growth By Geographic Area License 6,7% +128,6% SaaS fees 20,8% +43,9% Europe 20,4% Americas 6,8% +16,5% Asia Upselling 27,3% +38,5% -10,9% 9,5% Middle East 18,8% +110% Maintenance 21,6% +14,3% Africa +4,8% 44,5% On pre
Slide 19: Switching activity
Switching activity Cards Switching Contribution to Consolidated Revenues ⏵ Full business recovery after the Covid period. ⏵ Strong acceleration of cards payments and e- Return in 2022 to a normalized situation commerce transactions after the Covid ⏵ Internal project launched to build an Active- Acti
Slide 20: Morocco Electronic Payment Figures in 2022
Morocco Electronic Payment Figures in 2022 Total Payment Cards Outstanding Transactions ATM Network 18.9 million cards 543.7 million transactions 8,151 units +1 million vs. 2021 +18.1% vs. 2021 +211 installations vs. 2021 Withdrawal POS Payment E-Commerce Number of transactions in Millions Number of
Slide 21: Adjusted Revenue growth
Adjusted Revenue growth Amounts in MMAD +20.8% Total growth +51 1,007 +129 +6 -7 946 +10 833 -15 818 +15.6% Adjusted growth 2021 Write-back 2021 Payment Switching Testing 2022 Write-back Currency 2022 reported adjusted activity activity activity adjusted impact reported 21
Slide 22: Operating Expenses
Operating Expenses Amounts in MMAD ⏵ HR Costs : 443 MMAD vs. 365 MMAD (+21%) +55 844 • Increase in headcount by 14.5% -5 • Salaries increases to address high inflation in 2022. Impact of 4.4% +27 • Redesign of the position map resulting in an exceptional salary +78 adjustment for certain positions.
Slide 23: Adjusted EBITDA growth at constant currency
Adjusted EBITDA growth at constant currency Amounts in MMAD +123 -136 22.6% 18.4% 20.6% +51 -19 208 189 176 2021 Revenue growth Cost growth 2022 Currency Currency 2022 reported (constant currency) (constant currency) (constant currency) Revenue impact Cost impact reported 23
Slide 24: EBITDA analysis
EBITDA analysis Exceptional salary adjustments (inflation and new organization) compared to normal fiscal year: impact of 1% lower EBITDA margins. No additional adjustments expected for 2023 Some large projects were essentially PS provision with a low level of license. Global license level is 60% in
Slide 25: EBITDA analysis
EBITDA analysis Amounts in MMAD 20.6% 25.7% +8 259 +15 ⏵The transformation program will require some +18 investment to be deployed, which will slightly +10 impact our margins in the short term 208 ⏵Margin levels will remain broadly unchanged in 2023 and 2024 ⏵Our objective is to achieve an EBITDA ma
Slide 26: R&D investment
R&D investment Share in Consolidated Revenues On-Premise and Cloud- Micro-services & Composable enabled: Hybrid Cloud Technology 130 MMAD 12.9% Limitless scalability Works on all database +25.7% growth systems Version 4 progress R&D in MMAD - CAGR 19.1% ⏵ PowerCARD-Switch, PowerCARD-xPOS, ⏵ Certific
Slide 27: Net cash
Net cash Amounts in MMAD +19 -14 -82 305 LT Debt compared to equity +10 238 149.9 MMAD 23.0% -16.7% growth Net cash in MMAD - CAGR 39.8% 125 2021 cash Operations Investments Financing Currency 2022 cash 112 position exchange position 88 ⏵ Operational cash flow: Increase in working capital in the con
Slide 28: Backlog
Backlog NON RECURRING 36% Compared to annual Revenues Switch 934 MMAD 92.8% 7% +27.5% growth Projects 36% Processing 19% Click fee Upselling Backlog in MMAD - CAGR 11.4% 2% 13% Maintenance 934 23% 733 546 573 516 RECURRING REGULAR 51% 13% ⏵ High level of sales contributing to a strong increase in th
Slide 29: Key takeaways & 2023 guidance
Key takeaways & 2023 guidance Reinforced Backlog giving strong visibility for Ambitious Acceleration program with a 2023 and beyond slight impact on the margin in the short term Revenue organic growth for Profitability preserved for 2023 2023 between EBITDA ≃ 250 MDH 20% and 25% 29
Slide 30: Annexes
Annexes HPS,
Slide 31: Scope of consolidation at December 31, 2022
Scope of consolidation at December 31, 2022 Consolidated Corporate financial accounts statements Comptes Comptes Comptes Comptes Comptes Comptes Comptes Comptes Comptes Consolidés Comptes Comptes Consolidés Comptes Consolidés Comptes Consolidés Consolidés Consolidés Comptes Consolidés Sociaux Sociau
Slide 32: Consolidated Balance Sheet (in MAD)
Consolidated Balance Sheet (in MAD) ASSETS 31/12/2022 31/12/2021 LIABILITIES 31/12/2022 31/12/2021 Fixed assets 300 052 568 293 636 527 Shareholders' equity 652 158 218 556 582 145 - Capital 70 359 900 70 359 900 Goodwill 92 321 077 103 589 946 - Share premium 31 623 410 31 623 410 Intangible assets
Slide 33: Consolidated P&L (in MAD)
Consolidated P&L (in MAD) 31/12/2022 31/12/2021 Variation 12/31/2021 PRO FORMA Variation Sales figures 980 722 582 796 695 604 23.1% 812 542 709 20.7% Change in product inventories 1 989 444 2 152 441 -7.6% 197 606 NA Capitalized production - 509 252 - NA - NA Other operating income 24 860 711 34 48
Slide 34: Cash Flow Statement (in MAD)
Cash Flow Statement (in MAD) 31/12/2022 31/12/2021 Net income 117 078 596 98 853 277 Elimination of non-cash and non-operating income and expenses - - Depreciation and amortization 34 700 113 33 048 322 - Change in deferred taxes 656 307 927 547 - Gain or loss on disposal - - 865 198 Other non-cash
Slide 35: Subsidiaries accounts - In MAD
Subsidiaries accounts - In MAD 31-Dec-22 31-Dec-21 Subsidiaries Operating revenues Operating result Net income Operating revenues Operating result Net income Full consolidation (Morocco) HPS SA 754 640 292 100 660 922 85 500 797 613 754 290 72 235 220 76 555 397 HPS Switch 71 423 458 31 904 801 20 9
Slide 36: invest@hps-worldwide.com
invest@hps-worldwide.com 36