Paysafe Limited · NYSE:PSFE
Paysafe — Optimal Payments — FY2012 Earnings Presentation
35 slides from Paysafe's earnings presentation, Mar 19, 2013
Slide 1: Audited Results for the year ended 31 December 2012
O ti l Payments Optimal P t Plc Pl Audited Results for the year ended 31 December 2012 Joel Leonoff Leonoff, CEO Keith Butcher, CFO Tuesday, 19 March 2013 © Optimal Payments Plc. 1 1 www.optimalpayments.com www.optimalpayments.com © Optimal Payments Plc.
Slide 2: Agenda
Agenda 1 Highlights 2 2012 performance 3 Looking forward 4 Summary Presentation team: Joel Leonoff Keith Butcher President & CEO CFO Tel: + 1 561 613 9628 Tel: +44 (0) 7584 344784 joel@optimalpayments.com Keith.butcher@optimalpayments.com © Optimal Payments Plc. 2 www.optimalpayments.com
Slide 3: Highlights
Highlights 2012 full year Excellent year with significant revenue and EBITDA growth St Strong performance f ffrom NETBANX STP businesses, b i particularly ti l l in i Asian A i processing business Material upturn in NETELLER Stored Value business in second half Company well positioned for fu
Slide 4: Agenda
Agenda 1 Highlights 2 2012 performance - financials 3 Looking forward 4 Summary © Optimal Payments Plc. 4 www.optimalpayments.com
Slide 5: Financial highlights
Financial highlights Full year 2012 Revenue +40% EBITDA +58% © Optimal Payments Plc. 5 www.optimalpayments.com
Slide 6: Highlights 2012 full year - financial
Highlights 2012 full year - financial Strong financial performance – exceeded market expectations – Revenues up 40% to $179.1m (2011: $127.9m) – EBITDA up 58% tto $27 $27.6m 6 (2011 (2011: $17 $17.5m) 5 ) – Underpinned by strong H2 growth across all business lines Gross margin of $89.6m (2011: $
Slide 7: Gross margins – a leveraged business model
Gross margins – a leveraged business model Straight Through Processing Stored Value ONLINE MERCHANT ONLINE MERCHANT CONSUMER 100% C. 60% C. 40% STP revenue $138.9m Stored Value revenue $38.8m PROCESSING COSTS PROCESSING COSTS BAD DEBTS BAD DEBTS c 42% margin c.42% $57 9m $57.9m c 78% margin c.78% $3
Slide 8: Cash / debt position
Cash / debt position As at 31 December 2012 Balance sheet strengthened with total Group cash of $57.9m net of merchant cash (2011: $44.1m). Group convertible loans reduced to $24.2m at year end (2011: $32.8m) and further reduced to $ $16.6m at today’s y date as some loans have converted in 2013.
Slide 9: Agenda
Agenda 1 Highlights 2 2012 performance – business update 3 Looking forward 4 Summary © Optimal Payments Plc. 9 www.optimalpayments.com
Slide 10: Our two growth platforms
Our two growth platforms Built on innovation and diff differentiation ti ti International Gateway eWallet and PrePaid Cards Payment Gateway Stored Value Account Consumer Account/ Wallet Card Programs Risk & Identity On‐Us Network Merchant Account Micropayments & Device Payments Professional Services
Slide 11: NETBANX Straight Through Processing (STP)
NETBANX Straight Through Processing (STP) Revenues H1 2012 H2 2012 FY 2012 FY 2011 NETBANX STP $ 61.9 m $ 77.0 m $ 138.9 m $86.8 m 60% growth compared to 2011, up $52.1m year-on-year Healthy run rate exiting 2012 leveraging off strong second half growth Processed more than $8.5 billion in tran
Slide 12: Mobile Payments integral to NETBANX offering
Mobile Payments integral to NETBANX offering Automatic mobile browser detection Mobile-friendly user experience No merchant re-integration re integration required Shop Direct Group figures for 2012 In real-world use today © Optimal Payments Plc. 12 www.optimalpayments.com
Slide 13: NETELLER Stored Value
NETELLER Stored Value Revenues H1 2012 H2 2012 FY 2012 FY 2011 NETELLER Stored Value $ 16.4 m $ 22.4 m $ 38.8 m $37.9 m eMoney M expiry i (di (discontinued) ti d) - - - $2 1 m $2.1 2012 slightly ahead of 2011, with strong growth in H2 H2 revenue 37% (+$6m) ahead of H1 ($22.4m vs $16.4m) KPIs s
Slide 14: NETELLER Stored Value
NETELLER Stored Value First sustained material uplift in NETELLER revenues since 2007, driven by: New hires into SV management, merchant account VIP teams account, Member loyalty programme launch, VIP programme relaunch Enhanced affiliate programme Improved deposit options Revised pricing
Slide 15: Agenda
Agenda 1 Highlights 2 2012 performance 3 Looking forward 4 Summary © Optimal Payments Plc. 15 www.optimalpayments.com
Slide 16: Optimal success strategies
Optimal success strategies … …underpinned by four initiatives for organic growth 1 2 3 4 Drive growth Develop Position for US Build and in core STP multi-channel gaming market white- and e-wallet e wallet e commerce e-commerce opportunity label businesses solutions propositions for both STP
Slide 17: Core business – wins in last six months
Core business – wins in last six months Continuing to build the customer base Phase 2, batch processing And add new acquiring banks… © Optimal Payments Plc. 17 www.optimalpayments.com
Slide 18: Leveraging our partnerships
Leveraging our partnerships A white label gateway solution for major banks and partners Partner: Large, global cooperative financial group (6th largest in NA) Challenge: Out dated ECOM gateway. Unable to gain & maintain share in ECOM sector Solution: Fast deployment of a compliant, reliable &
Slide 19: Multi-channel commerce
Multi-channel commerce … essential to online success Desktop Mobile Apps/QR Optimal manages all payments for Shop Direct Group, across all platforms – strong mobile presence Multi-regional, multi-scheme, multi-currency © Optimal Payments Plc. 19 www.optimalpayments.com
Slide 20: Regulated gaming
Regulated gaming A track record of success in regulated markets Optimal developed a customised online payment solution for Espacejeux.com Account A t registration/management i t ti / t Compliant account funding/ disbursement Secure p payment y p processing g Fraud management Optimal sele
Slide 21: US gaming opportunity
US gaming opportunity US gaming g g Dedicated focus to position Optimal for US re-entry Bridging online and real world gaming Offering integrated “Payments +” solutions Partnership discussions announced & ongoing US facing gaming operators (Caesars) Software providers Banks (Vantiv)
Slide 22: Building the future of payments… today
Building the future of payments… today The future retail experience Next generation P2P payments © Optimal Payments Plc. 22 www.optimalpayments.com
Slide 23: Accelerate growth through M&A opportunities
Accelerate growth through M&A opportunities Payments market continues to consolidate at pace Ogone Payment Services purchased by Ingenico for €360m (29x 2012 EBITDA) Skrill being marketed for trade sale Organic growth, cash generation, debt conversion allow consideration of M&A Combination
Slide 24: Agenda
Agenda 1 Highlights 2 2011 performance 3 Looking forward 4 Summary © Optimal Payments Plc. 24 www.optimalpayments.com
Slide 25: Summary
Summary 2012 was an excellent year for Optimal Payments, with strong growth Building on successful integration of OP Inc acquisition and foundation of technology and risk management expertise Strong financial performance, exceeded market expectations Revenues and EBITDA significantly up St
Slide 26: Legal Disclaimer
Legal Disclaimer Certain statements in this document are forward-looking statements. These forward- looking statements speak only as at the date of this document. These statements concern, or may affect, future matters and include matters that are not facts. Such statements are based on current expe
Slide 27: Contact details
For further information contact Optimal p Payments y Plc at investorrelations@optimalpayments.com p p y Keith Butcher Andrew Gilchrist CFO EVP Corporate Affairs keith.butcher@optimalpayments.com andrew.gilchrist@optimalpayments.com Tel: +44 ((0)) 7584 344784 Tel: +44 ((0)) 203 544 7250 Mob: +44 (0)
Slide 28: Further information
Further information © Optimal Payments Plc. 28 28 www.optimalpayments.com www.optimalpayments.com © Optimal Payments Plc.
Slide 29: Further information
Further information A Detailed financial statements B Share price performance and shareholders © Optimal Payments Plc. 29 www.optimalpayments.com
Slide 30: Consolidated income statement – FY 2012
Financials Consolidated income statement – FY 2012 In US$ millions FY 2012 FY 2011 Revenue 179.1 127.9 Cost of Sales 89.4 53.9 Gross margin 88.3 50% 74.1 58% Salaries and employee expenses 36.1 32.2 Technology and software 12.9 11.3 Other operating expenses 13.1 13.0 EBITDA 27.6 15.4% 17.5 13.6% Adj
Slide 31: Revenue analysis
Financials Revenue analysis Group revenue – by business line ($ millions)) 2012 2011 +/- / H1 2011 H2 2011 +/- / STP revenue 138.9 86.8 +52.1 61.9 77.0 +15.1 SV revenue 38.8 37.9 +0.9 16.4 22.4 +6.0 SV revenue - discontinued (1) - 2.1 -2.1 - - - Trading revenue 177.1 126.8 +50.9 78.3 99.4 +21.1 Inte
Slide 32: Reconciliation of EBITDA to profit before tax
Financials Reconciliation of EBITDA to profit before tax In US$ 000 FY 2012 FY 2011 EBITDA 27,563 17,454 Depreciation and amortisation 11,776 16,740 Share option expense 3,931 1,007 Impairment charge - 21,283 Interest on loans 1 800 1,800 1 540 1,540 Supplementary management bonus 5,620 3,000 Acquis
Slide 33: Balance sheet – as at December 2012
Financials Balance sheet – as at 31 December 2012 All in US$ millions ASSETS 31-Dec-12 31-Dec-11 EQUITY AND LIABILITIES 31-Dec-12 31-Dec-11 Current assets 219.2 172.7 Current Liabilities 192.1 144.0 Cash and cash equivalents 82.2 58.0 Trade and other payables 58.8 40.0 Restricted cash 5.4 2.8 Payabl
Slide 34: Further information
Further information A Detailed financial statements B Share price performance and shareholders © Optimal Payments Plc. 34 www.optimalpayments.com
Slide 35: Shareholders and share price performance
Shareholders and share price performance ISIN GB0034264548 PERFORMANCE OF OPTIMAL PAYMENTS STOCK Ti k Symbol Ticker S b l OPAY 1 Jan 2012 to 15 Mar 2013 Market AIM London Index FTSE AIM All Share Share price 15 Mar 13 182.5 p Market cap £ 259 m ($386 $ m*) Fully diluted mkt cap £ 304 m ($455 m*) * B