Lesaka Technologies, Inc. · NASDAQ:LSAK
Lesaka Technologies — Net1 UEPS Technologies — Investor Day (December 2017)
95 slides from Lesaka Technologies's investor day presentation, December 2017
Slide 1: Investor Day December 2017
INVESTOR DAY DECEMBER 2017 www.net1.com
Slide 2: Welcome
WELCOME
Slide 3: Safe Harbour Statement
Safe Harbour 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 4: Agenda
Agenda 1 2 3 4 5 6 Overview and Net1 International International Investment Southern Africa KSNET & India company strategy UEPS/EMV Payments Group summary 40min 30min 30min 15min 30min 30min Philip Meyer, Herman G. Kotze, Nanda Pillay, Carl Scheible, Herman G. Kotze, Herman G. Kotze, MD Internationa
Slide 5: Net1 Executive Team
Net1 Executive Team Herman G. Kotze, Nanda Pillay, Dhruv Chopra, Nitin Soma, Philip Meyer, Carl Scheible, CEO MD Southern Head of Investor Head of MD International Head of Africa Relations Information Payments Group UEPS/EMV Technology DECEMBER 2017 NET1 5
Slide 6: Why Net1 Exists
WHY NET1 EXISTS
Slide 7: Why We Exist
Why We Exist NET1 VALUE PROPOSITION: Our core purpose is to improve people’s lives by bringing financial inclusion to the world’s underbanked consumers and helping small businesses access the financial services they need to prosper. We achieve this through our unique ability to efficiently digitise
Slide 8: Net1 is a Global Payment Solution Provider
Net1 is a Global Payment Solution Provider Net1 has a global business with the required skills, products and licenses to pursue our mission of bringing financial inclusiveness to the unbanked individuals and small businesses of the world and to be at the forefront of new innovation in the fintech in
Slide 9: Using Our Powers for Good
Using Our Powers for Good NET1 IS NOT JUST ANOTHER PAYMENTS BUSINESS - WE USE OUR DISRUPTIVE TECHNOLOGY TO EMPOWER PEOPLE AT THE BOTTOM OF THE PYRAMID Purchasing Power Parity in US$ $25,000+ 2BN PEOPLE EARNING MORE $5,000 to THAN $1,500 PER $25,000 YEAR Exactly the same aspirations as other people:
Slide 10: Servicing Consumers at the Bottom of the Pyramid
Servicing Consumers at the Bottom of the Pyramid TO MAKE MONEY OUR TECHNOLOGY NEEDS TO BE ROBUST AND SCALABLE AND WE HAVE TO BE A VERTICALLY INTEGRATED BUSINESS, TAPPING INTO ALL THE REVENUE STREAMS THAT WE ENABLE FINANCIAL INFLOWS Net1 is vertically integrated: Social Grant Money Transfer Micro Loa
Slide 11: Key Foundations of DNA to Build Strategy On
Key Foundations of DNA to Build Strategy On NET1 STRATEGY Innovative global culture Disruptive technologies Profitable business development Efficient logistical support Financially inclusive services DECEMBER 2017 NET1 11
Slide 12: Understanding Net1
UNDERSTANDING NET1
Slide 13: Net1 History
Net1 History Acquires Cash Paymaster Lists on NASDAQ Stock Acquires C4U and makes Services Exchange strategic investments in Five-year SASSA contract Bank Frick, DNI and Cell C Acquires Moneyline awarded through a IPO on tender process Johannesburg Disrupts SA grant Stock Exchange payments using UEP
Slide 14: Proven Technology Implementation Track Record
Proven Technology Implementation Track Record NET1 HAS A TRACK RECORD OF DEPLOYING AND IMPLEMENTING COMPLETE PAYMENT SYSTEMS IN COUNTRIES THROUGHOUT AFRICA Ghana National switch implemented with 21 banks on behalf of the Ghanaian Reserve Bank Iraq UEPS switch implemented to distribute 2 million gran
Slide 15: SASSA Contract Reality
SASSA Contract Reality PERCEPTION: NET1 IS ENTIRELY DEPENDENT ON ITS CONTRACT WITH SASSA AND THE SOUTH AFRICAN GOVERNMENT AND THAT THERE IS NO SUBSTANCE TO THE GROUP WITHOUT THIS BUSINESS REALITY: • Infrastructure and national footprint that we have established over the last 20 years does not become
Slide 16: Net1 Products
Net1 Products Payment Technologies Financial Services • UEPS/EMV • Microloans • Insurance • Voting & ID • Working Capital Finance • Banking • Biometric ID • Virtual Card • Online/Offline Capability • Multiple Wallets • Social Security Issuing, Acquiring and Processing • Voice Biometrics • Card Proce
Slide 17: Net1's Innovative & Unrivalled UEPS & EMV Technologies
Net1’s Innovative & Unrivalled UEPS & EMV Technologies • Integrated with the MasterCard EMV chip application • Interoperability with any EMV Point of Sale or ATM device • Verification with biometrics and/or PIN methods • Supports multiple wallets • A unique 10 digit cryptogram is utilized to update
Slide 18: Ongoing Technology Innovation & Future Projects
Ongoing Technology Innovation & Future Projects Recent Technology Achievements Example Future Projects • Deploying contactless version of UEPS smart cards • Money transfers, prepaid airtime and prepaid • Developed multi-currency prepaid card issuing electricity functionality on ATMs, mobiles and sys
Slide 19: Strategy Summary
Strategy Summary Our key opportunities include: • Financial Inclusion in South Africa – EPE, Cell C, DNI • UEPS International – large scale UEPS/EMV projects in new countries, current initiatives in India and Nigeria • IPG geographic and product expansion – consolidated offering, new products like c
Slide 20: Q&A
Q&A DECEMBER 2017 NET1 20
Slide 21: Agenda
Agenda 1 2 3 4 5 6 Overview and Net1 International International Investment Southern Africa KSNET & India company strategy UEPS/EMV Payments Group summary 40min 30min 30min 15min 30min 30min Philip Meyer, Herman G. Kotze, Nanda Pillay, Carl Scheible, Herman G. Kotze, Herman G. Kotze, MD Internationa
Slide 22: Southern Africa
SOUTHERN AFRICA
Slide 23: The Net1 Journey
THE NET1 JOURNEY DECEMBER 2017 NET1 23
Slide 24: What Does The NET1 Journey Consist of?
What Does The NET1 Journey Consist of? Lifestyle Payment New Pension Product Enabling Business Related Business Offering Platforms Developments Heritage Future DECEMBER 2017 NET1 24
Slide 25: The NET1 Journey
The NET1 Journey Lifestyle Payment New Pension Product Enabling Business Related Business Offerings Platforms Developments Heritage Future DECEMBER 2017 NET1 25
Slide 26: South Africa – Pension Related Business
South Africa – Pension Related Business Unrivaled Coverage Every South African • 600 mobile payment vehicles equipped with 1,200 mobile ATMS within a 3-mile radius • 150 Fixed Stores • 10,000+ Pay points • 3,800+ experienced staff • Exceptionally strong management team including 100 people with over
Slide 27: Pension Related Business
Pension Related Business UNIQUE COMPETITIVE ADVANTAGE – OWNING THE LAST MILE 600 Mobile • Paid more than 10.7 million beneficiaries per Vehicles month without fail for the last 60 months • Face to face access to an untapped customer base 3,800 150 Fixed Staff • Own bespoke, robust and scalable infra
Slide 28: Net1's Innovative & Unrivalled UEPS & EMV Technologies
Net1’s Innovative & Unrivalled UEPS & EMV Technologies • Integrated with the MasterCard EMV chip application • Interoperability with any EMV Point of Sale or ATM device • Verification with biometrics and/or PIN methods • Supports multiple wallets • A unique 10 digit cryptogram is utilized to update
Slide 29: What Have We Learned?
What Have We Learned? 1. Market has evolved from “banking” platform 600 Mobile Vehicles 2. Customer centric and service delivery is core 150 Fixed 3,800 Staff Stores Comple- SASSA / ment BANKING 3. Financial services requirements are increasing PLATFORM Merchant 10,000 Pay Acquiring Points INTEGRATE
Slide 30: The NET1 Journey
The NET1 Journey Lifestyle Payment New Pension Product Enabling Business Related Business Offerings Platforms Developments Heritage Future DECEMBER 2017 NET1 30
Slide 31: Lifestyle Product Offerings
Lifestyle Product Offerings 600 Mobile Created a bespoke lifestyle product offering that Vehicles 3,800 is specifically tailored for this market: Merchant Staff Acquiring Comple- ment 1. BANKING PRODUCT 2. LOAN PRODUCT 150 Fixed 10,000 Pay Stores LIFESTYLE Points 3. INSURANCE PRODUCT PRODUCT OFFERIN
Slide 32: Lifestyle Product Offerings Early Achievements
Lifestyle Product Offerings Early Achievements 600 Mobile Vehicles 3,800 1. Opened more than 2 million EPE bank accounts Merchant Staff Acquiring Comple- Created a lifestyle product offering ment 2. that is specifically tailored for this market 3. Current offering includes: • Banking products 150 Fi
Slide 33: The NET1 Journey
The NET1 Journey Lifestyle Payment New Pension Product Enabling Business Related Business Offerings Platforms Developments Heritage Future DECEMBER 2017 NET1 33
Slide 34: Payment Enabling Platforms Business
Payment Enabling Platforms Business OUR TRANSACTIONAL BUSINESS HAS EVOLVED OVER THE PAST 10 YEARS INTO A PAYMENT ENABLING SOLUTION Chip/ SIM VTU EasyPay PAYMENT • New competitors in the market and margins have been ENABLING squeezed PLATFORMS • Investments to date provide unique and unrivalled platf
Slide 35: Payment Enabling Platforms Early Achievements
Payment Enabling Platforms Early Achievements 1. Consolidation of these businesses has allowed us to leverage our specific technology that exists between various business units Chip/ • Allowing us to do vertical integration SIM • Controlling the larger part of the value chain • Resulting in higher m
Slide 36: The NET1 Journey
The NET1 Journey Lifestyle Payment New Pension Product Enabling Business Related Business Offerings Platforms Developments Heritage Future DECEMBER 2017 NET1 36
Slide 37: New Business Development
New Business Development South Africa is one of Net1’s core markets, where we have maximum expertise, infrastructure and distribution. We intend to expand our customer base as well as the products provided to that base. #3 MOBILE OPERATOR IN SA – 15M+ SUBSCRIBERS LEADING DISTRIBUTOR OF STARTER PACKS
Slide 38: CELL C & DNI Investments
CELL C & DNI Investments • Cell C enables the ability to provide banking and prepaid • Largest provider of prepaid SIM cards in Southern Africa services on mobile devices • Issue an additional 5 – 7000 per month so that we can • Enhance the offering i.e. EasyPay on mobile platforms access that demog
Slide 39: Southern Africa Summary
Southern Africa Summary • SASSA risks are manageable and investments provides business optionality • The South African business has provided the Net1 Group with a platform that will enable the expansion of our UEPS banking solution outside South Africa – Rand based cost platform – Deep experience –
Slide 40: Q&A
Q&A DECEMBER 2017 NET1 40
Slide 41: International UEPS/EMV
INTERNATIONAL UEPS/EMV
Slide 42: Financial Inclusion Tipping Point
Financial Inclusion Tipping Point We are at a tipping point around Financial Inclusion. 1. POLITICAL & REGULATORY 2. INNOVATION 3. URGENCY Political and regulatory tailwind Interesting and relevant product & Urgency: The time is now enabling a more conducive business model innovation taking • “The O
Slide 43: The Opportunity
The Opportunity WHERE THE UNBANKED LIVE % of people aged 15 and over with an “Banking the unbanked is a $380bn opportunity…” account at a financial institution 62% of adults worldwide have an account at a financial institution or through a mobile device, up from 51% 17.9% in 2011. of people aged 15
Slide 44: The Market
The Market The scale of the problem and the opportunity to solve for it is large HUGE + = MARKET OPPORTUNITY 2.5bn people $380bn DECEMBER 2017 NET1 44
Slide 45: Market Sizing
Market Sizing Applying a multi variable filtering and scoring system to prioritise markets. Market Size & Demographics Commitment to Social Benefits, Financial Inclusion & Ease of Entry Payment Efficiency & Digitization DECEMBER 2017 NET1 45
Slide 46: The Potential
The Potential MARKET SIZE AND We see the potential for 50-100m active users in 10-20 markets. DEMOGRAPHICS Egypt, Tanzania, Ethiopia, Nigeria, Kenya, DRC, Ghana, UAE, Turkey, Pakistan, India, PAYMENT Myanmar, Indonesia, COMMITMENT EFFICIENCY Philippines, Thailand, TO SOCIAL AND Vietnam, Malaysia, BE
Slide 47: Net1 Uniquely Positioned
Net1 Uniquely Positioned $40B 11m processed since active cards 2012 in South Africa Net1 is uniquely positioned with proven $10B technology and a track record. 17m processed active users annually 700k $200m active in closed savings loop annually DECEMBER 2017 NET1 47
Slide 48: Go to Market Strategy
Go to Market Strategy Multi year services and operating contract • JVCO vehicle • KYC/enroll recipients • Option at full • Govt/Agency deployment • Local bank • Gradual roll-out for • Hand over • Net1 benefit acceptance • Offer managed • Urban service • Tailored product service offering • Rural • On
Slide 49: International UEPS/EMV Summary
International UEPS/EMV Summary • There is a huge opportunity to solve the financial inclusion problem for the 2.5 billion unbanked • Net1 is well positioned to leverage its identification and payments technology, track record and core competence around social benefit disbursements internationally •
Slide 50: Q&A
Q&A DECEMBER 2017 NET1 50
Slide 51: KSNET & India
KSNET & INDIA
Slide 52: South Korea is a Sophisticated eCommerce Market
South Korea is a Sophisticated eCommerce Market SOUTH KOREA IS ONE OF THE LARGEST ECOMMERCE MARKETS IN ASIA GDP of 92% 1.23 Population of mobile $1.5 trillion of the 51.5 million population has subscriptions in 2017 per person internet Source: Global Payment Report, Worldpay, 2017 WITH AN ADVANCED I
Slide 53: A Closer Look at KSNET
A Closer Look at KSNET • The only total payment service provider in Korea (CardVAN/Payment Gateway/Banking VAN). • Largest CardVAN sales network of over 600 agents throughout Korea. • VAN services offered through 220,000 merchants (20% of merchants in Korea) with 450,000 Net1 POS terminals in operat
Slide 54: KSNET Opportunities
KSNET Opportunities FOCUS ON FURTHER IMPROVING PROFITABILITY AND DELIVERING SYNERGIES WITH INTERNATIONAL PAYMENTS GROUP • Higher cash conversion ratio following government mandated changes to terminal subsidies • Significant upside from Working Capital Finance offering to existing SME user base • Ro
Slide 55: KSNET Cash Flow Profile
KSNET Cash Flow Profile KSNET’s EBITDA was $42 million in FY 2017, while free cash flow was approximately $35 million. EBITDA less Capex (KRW billions) 45 40 35 30 25 20 15 10 5 0 2011 2012 2013 2014 2015 2016 2017 Source: FT Partners, CEO Monthly Payments Market Analysis, December 2017 The Median 2
Slide 56: India is a Large Opportunity That Requires Patience and Persistence
India is a Large Opportunity That Requires Patience and Persistence INDIA’S MIDDLE CLASS IS EXPECTED TO REACH 547 MILLION IN 2026 FROM 267 MILLION IN 2016 KEY Population: 1.26 billion Per Cap. Income: $1,475 Urban Density: 32% METRICS GDP: $2.5 trillion GDP Growth: 7.5 – 8% Median Age: 27 years INDI
Slide 57: New Government Driving Digitization to Achieve Financial Inclusion
New Government Driving Digitization to Achieve Financial Inclusion 53% (2016) OF INDIA’s POPULATION IS BANKED, UP FROM 36% IN 2014 860 M 31 m 2.6m pos more debit cards. credit cards 210k ATMs than 76% are for ATM ~2% of people > 75% in top 600,000 villages cash out metros Source: RBI Stats, April 20
Slide 58: Mobikwik Allows Us to Build Scale, Capability & Recognition in India
Mobikwik Allows Us to Build Scale, Capability & Recognition in India We are now live with two virtual card deployments and looking to add new products and customers over the next two years. Market size & demographics Mobile Virtual Card ACS Services Commitment to Financial Inclusion International Re
Slide 59: Revenue Models in India Will Vary and Evolve
Revenue Models in India Will Vary and Evolve We currently have three revenue models in India, and these will evolve over time to optimize our returns. Pricing in India is very competitive and therefore building scale and volumes is critical in the near-to-medium term. License Fees Transaction Fees R
Slide 60: Mobikwik - #2 Digital Wallet Provider in India
Mobikwik - #2 Digital Wallet Provider in India With 65 Million Users We currently own 12% of MobiKwik and have board representation. We have worked closely with MobiKwik to evolve its strategy from a payments only focus to one being a comprehensive financial services provider. Registered Users (Mill
Slide 61: Mobikwik – Launched One of the Largest Virtual Card Deployments
Mobikwik – Launched One of the Largest Virtual Card Deployments XXXX XXXX XXX B. SMART 260+ MILLION USERS WILL EVENTUALLY HAVE ACCESS TO MOBIKWIK’S VIRTUAL VISA CARD IN PHASES, WITH 65 MILLION EXISTING USERS IN THE FIRST PHASE DECEMBER 2017 NET1 61
Slide 62: UEPS/EMV Presents the Largest & Most Differentiated Opportunity
UEPS/EMV Presents the Largest & Most Differentiated Opportunity 700+ million Indians live in rural areas and to date most of the government and bank led initiatives do not address their financial inclusion needs as the focus is the urban youth. This is an opportunity for UEPS. GOVERNMENT PROGRAMS 1.
Slide 63: KSNET Summary
KSNET Summary • Major value added network with unique focus on SME’s in sophisticated market. • Well positioned to weather the current regulatory headwinds with strong balance sheet and cash generation. • New products such as working capital finance and cryptocurrency processing will re-accelarate g
Slide 64: India Summary
India Summary • Net1 is now established in India with core infrastructure in place, and market recognition is increasing. • Short-term: scale up existing virtual card and ACS projects • Medium-term: introduce new products and start owning more of the value chain • Long-term: establish proof-of-conce
Slide 65: Q&A
Q&A DECEMBER 2017 NET1 65
Slide 66: International Payments
INTERNATIONAL PAYMENTS
Slide 67: Series of Targeted Investments to Build an International Payments Group
Series of Targeted Investments to Build an International Payments Group • Increasing breadth of services; • Increasing international reach; • Increasing processing volumes • NET1 have invested to gain access to international payments as wells as regulatory licenses including SWIFT membership Look an
Slide 68: NET1 International Payments Group (IPG) Overview
NET1 International Payments Group (IPG) Overview Enschede & Munich Munich Maryland London Oregon (AWS) Zurich Vienna Gibraltar Malta China Virginia (AWS) Hong Kong Offices Singapore Service Entities Hosting Colocations Mauritius Pretoria Sydney DECEMBER 2017 NET1 68
Slide 69: The IPG offer a Compelling Suite of Payments Products
The IPG offer a Compelling Suite of Payments Products PRODUCT SERVICE DESCRIPTION MARKET SERVED VALUE CREATED • Debits and Credits to and from US bank accounts - • USA based merchants ACH • Enable payments by US consumers B2B, B2C, C2B (NACHA) • White-label to other PSP’s • Credit and debit card pro
Slide 70: Investments Provide A Formidable Foundation For Growth
Investments Provide A Formidable Foundation For Growth Global Reach TECHNOLOGY 13 office or service locations globally • Card processing gateways • ACH processing gateway • SEPA processing gateway • Pre-paid card Platform (PCI level 1 compliant, inhouse developed and supported) PARTNERSHIPS • Bank F
Slide 71: Very Strong Worldwide Leadership Team In Place To Grow The Business
Very Strong Worldwide Leadership Team In Place To Grow The Business Philip Meyer Martin Prout John Yeomans Christian Mangold Stephan Voigt Grace Lam Ernest Lau MD NET1 Intl. DB Director and MD Director T24 UK Sales Director & MD IT Director Europe Payments Director IT Director APAC Payments Group of
Slide 72: Processing Volumes ~US$1.4bn Per Year With Significant Upside
Processing Volumes ~US$1.4bn Per Year With Significant Upside NET1 International Payments Volumes By Quarter (US$m) Continued volume growth forecast Prepaid & SEPA 385 driven by combination of: ACH 359 339 Credit Card T24 • Strong underlying growth in Credit Card MP payments volumes (see next 273 Ch
Slide 73: Strong Underlying Growth In Payments Volumes Underpins Value Case
Strong Underlying Growth In Payments Volumes Underpins Value Case Three compelling trends are driving rapid market growth: Global E-Commerce, US$bn • Steady GDP growth in emerging markets GLOBAL E- 4500 COMMERCE • Increasing desktop and mobile broadband adoptions (99% OECD) 4000 GROWTH • Cross-borde
Slide 74: Compelling Value Proposition in International Payments
Compelling Value Proposition in International Payments ACCESSING A 80% 85% MAJORITY OF 70% ON-LINE CONSUMERS SIMPLIFYING PAYMENTS POWERING GLOBAL REACH INNOVATING IN FINTECH • Bridging traditional gaps between • Using financial regulation to access • Customer and market insight driven banking, acqui
Slide 75: Vision And Strategy Overview
Vision And Strategy Overview TO BE A LEADING DIGITAL PAYMENT SREVICE PROVIDER, BY LEVERAGING OUR INTERNATIONAL REACH, OUR WEALTH OF PAYMENT OPTION, OUR REGULATORY FOOTPRINT AND CUSTOM TECHNOLOGY TO SERVE ALL FACCETS OF THE PAYMENTS AND ECOMMERCE VALUE CHAIN TECHNOLOGY Restructure and consolidate to
Slide 76: Short-Term Focus On Driving Revenue Growth In Three Key Areas
Short-Term Focus On Driving Revenue Growth In Three Key Areas GROWING MERCHANT SERVICES NEW PRODUCTS CHINA & NEW MARKETS • TARGET Under-served mid-market • TARGET Growing business models, e.g. • TARGET International businesses selling retailers and new industry sectors marketplaces and cryptocurrenc
Slide 77: Taskforce Established To Accelerate Cryptocurrency Product Growth
Taskforce Established To Accelerate Cryptocurrency Product Growth September Bank Frick start issuing crypto currency investment certificates 2017 “NET1 recognises the importance and disruptive power of blockchain NET1 IPG pen deal with largest EU crypto currency exchange – November technologies and
Slide 78: Differentiated Strategy And Significant Growth Upside
Differentiated Strategy And Significant Growth Upside Broad NET1 International Payments Group is differentiated from key competitors by: International SERVICES OFFERING • Providing a global payment reach with multiple Payments Group payment products • Combining this with regulated entities in key te
Slide 79: International Payments Group Summary
International Payments Group Summary • Key acquisitions and investments that Net1 has made, created the foundation for the formation of a truly International Payment Group (IPG) • As one group, and by leveraging its existing payment options, the IPG can now cross sell its payment products internatio
Slide 80: Q&A
Q&A DECEMBER 2017 NET1 80
Slide 81: Investment Summary
INVESTMENT SUMMARY
Slide 82: Long-Term Growth and Profitability
$1 = ZAR 14 Long-Term Growth and Profitability Growth in Revenue and EBITDA since 2004. Revenue EBITDA R9 R 2.5 R8 R7 R 2.0 ZAR BILLIONS ZAR BILLIONS R6 R5 R 1.5 R4 R 1.0 R3 R2 R 0.5 R1 R0 R 0.0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2004 2005 2006 2007 2008 2009 2010
Slide 83: Revenue Growth By Segment
Revenue Growth By Segment Const. currency SATP revenue USD ITP revenue Const. currency FIAT revenue R 4.0 $200 R 4.0 R 3.39 $177 R 3.59 R 3.5 $180 $165 $170 R 3.06 R 3.5 R 3.21 $160 $153 R 3.12 R 3.0 ZAR BILLIONS ZAR BILLIONS R 2.72 R 2.70 $136 R 3.0 USD MILLIONS $140 R 2.5 R 2.5 R 2.11 $120 R 2.16
Slide 84: Operating Income And Margin By Segment
Operating Income And Margin By Segment Const. currency SATP operating USD ITP operating income Const. currency FIAT operating income income $30,000 R 1,000 R 1,000 $26,805 R 831 R 808 $25,000 $23,389 R 791 R 787 $21,952 R 800 R 800 R 739 USD THOUSANDS R 638 ZAR MILLIONS $20,000 R 631 R 583 ZAR MILLI
Slide 85: Cash Flow and Balance Sheet Snapshot
Cash Flow and Balance Sheet Snapshot Q1 2018 2017 2016 2015 2014 2013 USD in 000’s USD in 000’s USD in 000’s USD in 000’s USD in 000’s USD in 000’s Adjusted net cash provided by operating activities 28,135 113,337 116,552 135,258 37,145 55,917 Net cash used in investing activities (225,006) (52,133)
Slide 86: Cash and Debt Movement - Sep 30 2017
Cash and Debt Movement - Sep 30 2017 A closer look at the movement of cash and debt at September 30 2017. $138m CASH $16m Oct debt payment $16m South Korea $94m DEBT $41m investment in 30% of Bank Frick in Oct $81m available $78m South Africa Repay South Korean Debt Bank Frick Available South Africa
Slide 87: Valuation Review
Valuation Review TANGIBLE NET ASSET HIGH MID LOW VALUE $m $m $m $m Sum Parts SATP ITP FIAT Total EBITDA valuation: operating segments Valuation $m $m $m $m SATP 511 320 192 Operating income 59 14 58 131 ITP 491 386 281 Depreciation and FIAT 533 355 178 5 21 1 27 amortization Operating segments: 1 53
Slide 88: Fiscal 2018 Outlook and 1Q Overview
Fiscal 2018 Outlook and 1Q Overview 2018 GUIDANCE - Fundamental EPS of at least $1.61, assuming the following: - Modest dilution from Cell C/DNI transactions - USD/ZAR rate of 13.62 - 56.6 million shares and tax rate of 34-36% - No significant disruptions in any of our key business units Overview of
Slide 89: Vision 2020
Vision 2020 By Fiscal 2020, we believe the initiatives we are focusing on will help us achieve the following targets: REVENUE >US$800m EPS > US$2.50 INTERNATIONAL REVENUE >40% TOTAL 800 $2.50 40% +33% +44% 600 $1.74 29% 2017 2020 Target 2017 2020 Target 2017 2020 Target All figures assuming constant
Slide 90: Summary
Summary • Net1 has demonstrated resilient growth over the last 12 years – we have succeeded where few choose to tread. • Demonstrable track record of introducing disruptive technologies that rapidly become significant contributors to revenue and operating profit through multiplier-effect. • The sum
Slide 91: Q&A
Q&A DECEMBER 2017 NET1 91
Slide 92: Annexure 1 - Reconciliation of Non-GAAP Measures
Annexure 1 - Reconciliation of Non-GAAP Measures Earnings and earnings per share. FISCAL 2013 2014 2015 2016 2017 Q1 2018 $ '000 $ '000 $ '000 $ '000 $ '000 $ '000 Net income attributable to Net1 (GAAP) 12,977 70,111 94,735 82,454 72,954 19,483 Amortisation of intangible assets, net of tax 13,679 12
Slide 93: Annexure 2 - Reconciliation of Non-GAAP Measures
Annexure 2 - Reconciliation of Non-GAAP Measures EBITDA and adjusted EBITDA FISCAL 2013 2014 2015 2016 2017 Q1 2018 $ '000 $ '000 $ '000 $ '000 $ '000 $ '000 Net income attributable to Net1 (GAAP) 12,977 70,111 94,735 82,454 72,954 19,483 Non-controlling interest (3) (50) 1,999 2,342 1,694 244 Earni
Slide 94: Annexure 3 - Reconciliation of Non-GAAP Measures
Annexure 3 - Reconciliation of Non-GAAP Measures Cash flow and adjusted cash flow Q1 2018 2017 2016 2015 2014 2013 USD ‘000 USD ‘000 USD ‘000 USD ‘000 USD ‘000 USD ‘000 Net cash (used in) provided by operating activities (GAAP) (793) 97,161 116,552 135,258 37,145 55,917 Net funding to grow Working C
Slide 95: Be included.
Be included.
Net1 UEPS Technologies — Investor Day (December 2017) on 6ix