Lesaka Technologies, Inc. · NASDAQ:LSAK
Lesaka Technologies — Net1 UEPS Technologies — Q3 2020 Earnings Presentation
26 slides from Lesaka Technologies's earnings presentation, May 2020
Slide 1: Q3 2020 Investor Presentation
Q3 2020 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 caus
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: Quarterly Summary
QUARTERLY SUMMARY Q3 2020 ——— NET1 74
Slide 5: Quarterly Summary
Quarterly Summary Q3 2020 Company highlights include: Q3 2020 Investment portfolio update: • Sold KSNET for $237 million in March 2020 and DNI • Cell C’s recapitalization ongoing. Operating for $48 million in April 2020 performance improvements in 1H 2020 vs 1H 2019 • Cancelled Bank Frick option to
Slide 6: April and May 2020 Trends
April and May 2020 Trends Preliminary trends: Bill Payment Volume ('000s) 1,900 • Record transaction volumes for EasyPay and growing 1,800 usage of mobile ATMs 1,700 • Record bill payment volumes and number of new 1,600 customers signed 1,500 • 100% uptime of network 1,400 1,300 • Demonstrates relev
Slide 7: COVID-19 Response
COVID-19 Response • Immediate focus on safety and wellbeing of employees, partners, customers and communities • Closed most offices and provided necessary facilities for employees to work remotely • Waived fees for certain types of essential services by grant beneficiaries, such as ATM withdrawal fe
Slide 8: Capital Allocation
Capital Allocation We have raised significant cash from asset divestitures. Our board has initiated a strategic review, conserved liquidity in the short-term due to uncertainty related to COVID-19, while addressing the investment company issue arising from asset divestitures. We still intend to rein
Slide 9: Strategic Investments
STRATEGIC INVESTMENTS Q3 2020
Slide 10: Bank Investments
BANK Investments FINBOND (South Africa) Ownership: 31% Carrying Value: $30m South African mutual bank and lender with 400+ branches. Traded on JSE (Ticker: FGL) PROJECT 2020: Launch new UEPS/EMV products Leverage combined branch, ATM and POS infrastructure DEVELOPMENTS: Launched new banking offering
Slide 11: Mobile Payment Investments
MOBILE PAYMENT Investments MOBIKWIK (India) Ownership: 13% Carrying Value: $27m Leading digital fintech and payments company in India with 80+ million customers PROJECT 2020: Expand financial services offerings – loans, insurance, wealth Scale virtual card and introduce new Net1 offerings DEVELOPMEN
Slide 12: Mobile Payment Investments (Cont'd)
MOBILE PAYMENT Investments (Cont’d) V2 Limited Ownership: 50% Carrying Value: $1m Startup Africa-focused mobile payments company leveraging QR-code technology PROJECT 2020: Commercially scale operations in Ghana Enter at least one additional African market DEVELOPMENTS: Commercial products ready for
Slide 13: Financial Highlights
FINANCIAL HIGHLIGHTS Q3 2020
Slide 14: Q3 2020 Financial Highlights
Q3 2020 Financial Report Q3 2020 Financial Highlights Q3 2020 Q3 2019 Q2 2020 ($ Millions) Revenue 37 37 41 % change USD (0%) (10%) % change Const. FX 8% (5%) Adjusted EBITDA (6) (15) (7) % change USD (57%) (14%) EBITDA Margin (%) (18%) (41%) (18%) Fundamental Net Income* (6) (35) (6) % change USD (
Slide 15: Business Segment Results – Q3 2020
Q3 2020 Financial Report Business Segment Results – Q3 2020 Q3 constant currency SATP Revenue • SATP constant currency revenue grew 24% vs. Q2 2019 • Sequential and Y/Y growth, partial impact from lost R 878 1,000 revenue on certain transaction due to COVID-19 800 • ITP USD revenue down 26% vs Q3 20
Slide 16: Business Segment Results – Q3 2020
Q3 2020 Financial Report Business Segment Results – Q3 2020 USD (Millions) Revenue Operating Income Operating Margin 3Q 2020 3Q 2019 3Q 2020 3Q 2019 3Q 2020 3Q 2019 SATP $20 $17 $(9) $(13) (44%) (75%) % Change* 24% 24% ITP 2 2 (3) (2) (203%) (84%) % Change* (26%) (26%) FIAT 18 19 (1) (5) (5%) (26%)
Slide 17: Balance Sheet Overview
Q3 2020 Financial Report Balance Sheet Overview USD (Millions) Mar 31, 2020 Jun 30, 2019 Net Unrestricted Cash $ 209 $ 20 Investments and Equity Accounted Investments(1) $ 103 $ 151 Total Assets $ 510 $ 673 Total Equity $ 367 $ 427 Total Debt(2) $3 $ 10 Book Value / Share $ 6.42 $ 7.52 Net Cash / Sh
Slide 18: Key Investments
Q3 2020 Financial Report Key Investments % held Balance Sheet Value (Mar2020) Equity Accounted: Bank Frick 35% $30 million $30 million (1) Finbond (JSE listed) 30% $30 million $34 million (2) Carbon 25% $8 million $16 million (3) DNI – Sold on April 1, 2020 for $48 million Investments: Cell C 15% $0
Slide 19: Segment Highlights
SEGMENT HIGHLIGHTS Q3 2020 ——— NET1 74
Slide 20: SATP Segment Highlights
Q3 2020 | SATP Segment Highlights Financial Highlights • Revenue - $20 million • 24% constant currency increase from $17 million in Q3 2019 • 2% constant currency increase compared to Q2 2020 • Higher transaction revenue from increased ATM and EasyPay volumes, offset by fewer EPE and SASSA Grindrod
Slide 21: ITP Segment Highlights
Q3 2020 | ITP Segment Highlights Financial Highlights (continuing operations) • Revenue - $2 million • 26% decrease compared to Q3 2019 • Contraction in internationals processing activities particularly China processing and crypto-currency transactions • Operating loss – $(3) million • Ongoing losse
Slide 22: FIAT Segment Highlights
Q3 2020 | FIAT Segment Highlights Financial Highlights (continuing operations) • Revenue - $18 million • 2% constant currency increase from $19 million in Q3 2019 • 16% constant currency decrease compared to Q2 2020 • Operating loss - $1 million • Operating loss of $5 million in Q3 2019 • Operating
Slide 23: FIAT Segment Highlights (Cont'd)
Q3 2020 | FIAT Segment Highlights (Cont’d) Key Trends Average Active EPE accounts Value of Loans Outstanding 1,400 Millions 1,200 2.0 1,000 Millions 1.5 800 1.0 600 0.5 400 0.0 200 0 As of quarter ended Outstanding Capital Deferred Service Fees Number of Paying SmartLife Policies 2,25,000 2,20,000 2
Slide 24: Appendix A
Appendix A ——— NET1 Sar 5
Slide 25: Reconciliation of non-GAAP measures
Reconciliation of non-GAAP measures Q3 2020 – Fundamental Net Loss and GAAP Net Loss Three months ended Mar-20 Mar-19 $ '000 EPS, basic $ '000 EPS, basic Fundamental net loss (Non-GAAP) (6,296) (0.11) (34,951) (0.62) Impairment of equity method investments (32,277) - (Gain) Loss on discontinued oper
Slide 26: Reconciliation of non-GAAP measures
Reconciliation of non-GAAP measures Q3 2020 – GAAP Net Loss and EBITDA loss Three months ended Mar-20 Mar-19 $ '000 EPS, basic $ '000 EPS, basic Net loss attributable to Net1 (GAAP) (34,881) (0.61) (58,819) (1.03) (Gain) loss on disposal of discontinued operation (12,733) 9,175 Net income from disco
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