Hightech Payment Systems Sa · CSEMA:HPS
Hightech Payment Systems Sa — FY2023 Earnings Presentation
37 slides from Hightech Payment Systems Sa's earnings presentation, Mar 26, 2024
Slide 1: Earnings Presentation Full year 2023
Feel good about payments Earnings Presentation Full year 2023 March 26, 2024
Slide 2: Disclaimer about forward looking statements
Disclaimer about forward looking statements This presentation (“Presentation”) has been prepared by Hightech Payment Systems S.A. (”HPS” or the “Company”). This Presentation may contain forward-looking statements within the meaning of applicable Moroccan securities laws, including, but not limited t
Slide 3: Agenda
Agenda 1 Our commitments & results 2 FY 2023 Financial & Operating Performance 3 Key Takeaways / IR Calendar 4 Consolidated Financial Statements
Slide 4: Our commitments & results
Our commitments & results Abdeslam ALAOUI CEO
Slide 5: Market Global Dynamic
Market Global Dynamic Non-cash transaction volume should grow by 15% p.a. in the next 5 years, mainly driven by the accelerated transition of less mature countries Global non-cash transaction volume [# bn; 2017-2027F] • Increased number of non-cash transactions driven by: CAGR CAGR ~2,046 17'-22' 22
Slide 6: Value creation leverages
Value creation leverages Diversified and strong revenue base Revenues generated across +90 countries 70% of revenues recurring or regular Best-in-class technology Version 4 of PowerCARD rated best technology worldwide1 HPS invests a higher proportion of its revenue in R&D than most of its competitor
Slide 7: HPS, the technology leader worldwide
product features, and client services. Each provider is rated based primarily on data HPS, the provided technology in response leader to the RFI distributed worldwide by Datos Insights. Additionally, client interviews and an analysis of the provider’s platform help drive the ratings. “ HPSFigure 20
Slide 8: Continuous R&D and revenue boost with each new version
Continuous R&D and revenue boost with each new version Revenue evolution [2002-2023F; MAD m] • A cutting-edge technology - Cloud-native solution - Limitless scalability PowerCARD 4.0 ∼1,191 - Micro-services technology Microservices and full Cloud technology - Database technology agnostic ∼1,007 Powe
Slide 9: AccelR8 objectives: Several levers and positive indicators
AccelR8 objectives: Several levers and positive indicators ANNUAL ORGANIC GROWTH EXTERNAL GROWTH EBITDA MARGIN TO INCREASE OF 12%-17% TO ADD 40 - 80 MUSD TO 25% - 30% Track record: CAGR of 14% over Track record: successfully integrated multiple Faster development of the SaaS mode past 10 years acqui
Slide 10: Key 2023 highlights
Key 2023 highlights Strong achievements, aligned with our long-term objectives ⏵ 18% revenue growth, despite negative currency impact, and 20% growth at constant exchange rates ⏵ Increased the share of Tier 1 customers in our portfolio, which include some of the world's largest banks ⏵ Major achieve
Slide 11: Long term objectives
Long term objectives Long term objectives 2023 Achievements Annual organic growth between 12% to 17% 18.3% International advisory firm hired M&A to add 40 to 80 MUSD by 2027 Strong M&A pipeline Faster growth for SaaS EBITDA margin to increase to 25% - 30% by 2027 Convergence program India office 202
Slide 12: 2024 outlook (M&A excluded)
2024 outlook (M&A excluded) 2024 ORGANIC GROWTH 2024 EBITDA Margin Comprised between 12%-17% Flat Year-on-Year Backlog down slightly by 12%, but stronger and accelerating Strong development of SaaS in 2023 and 2024 (45% of the opportunities in 2024 vs 2023 opportunities) New Logos opportunities in p
Slide 13: FY 2023 Financial & Operating Performance
FY 2023 Financial & Operating Performance Brahim BERRADA Corporate Services Managing Director
Slide 14: 2023 achievements aligned with AccelR8
2023 achievments aligned with AccelR8 REVENUE EBITDA / MARGIN BACKLOG 1,191 MMAD 247 MMAD 20.7% 821 MMAD +18.3% Growth +18.8% Growth -12.2% Growth +20.0% Constant ex. rate +30.0% Constant ex. rate SEGMENT PERFOMANCE PAYMENT ACTIVITY SWITCHING ACTIVITY TESTING ACTIVITY 86% 7% 7% 977 MMAD 78 MMAD 83 M
Slide 15: Sustainable Business Model
Sustainable Business Model RECURRING 49% NON-RECURRING 29% Growth drivers 7% Growth drivers • New clients in maintenance and increase of maintenance rate 7% • Strong backlog end 2022, leading to accelerated deployment of major • Increase in Merchant and withdrawal projects, , particularly in Europe
Slide 16: Payment activity: On-Premise Model
Payment activity On-Premise Model Share in Consolidated Revenues ⏵ After signature with one of the biggest bank ⏵ Strong effort to accelerate the deployment is Asia in 2021 and the deployment of the for one the Tier-1 bank in multiple countries: Switch module in 2022, HPS successfully after UK, Hong
Slide 17: Payment activity: SaaS Model
Payment activity SaaS Model Share in Consolidated Revenues ⏵ Signature of a new SaaS agreement with one ⏵ Discovery agreement signed with Caribbean of the largest bank in Canada. The platform bank for a SaaS agreement. Final agreement will be hosted by Amazon in Canada and will expected to be finali
Slide 18: Payment activity
Payment activity Revenues Breakdown & Growth by Sub-activity Revenues Breakdown & Growth By Geographic Area Licenses 76 MDH / 7% +38.8% Europe 190 MDH SaaS fees 17% +11.6% 19.9% Americas 5.8% +16.3% 211 MDH Maintenance 18% +19.1% +0.6% Middle East Asia 18.2% 14.3% On premise 246 MDH +27.0% Africa +1
Slide 19: Switching activity: Platform enhancements
Switching activity Platform enhancements Share in Consolidated Revenues ⏵ Finalization of the new Active-Active ⏵ Implementation of new Visa tokenization architecture, providing high availability for services for some banks participants ⏵ Migration of all financial institutions to the new platform 7
Slide 20: Switching activity: Morocco Payments Figures
Switching activity Morocco Payments Figures 2023 vs. 2022 Total cards outstanding Card transactions ATM network 20.2 million cards 562 million transactions 8,242 units +1.2 million (+6.3%) vs Dec 2022 +14% vs. Dec 2022 +1% vs. Dec 2022 Withdrawal Payment E-commerce Number of operations in Millions N
Slide 21: Switching activity: Evolution of Interoperability
Switching activity Evolution of Interoperability 2023 vs 2022 Withdrawals Payment transactions E-commerce operation in Millions in Millions in Millions Average change over 15.5% 14.7% 4 years 15.4% 30.6% 18.8% 70,3 121,4 139,3 20.4% 32.3% -8.3% 60,9 41.3% +19.5% 47,7 52,8 0.4% 93,0 39,4 43,8 40.9% 3
Slide 22: Adjusted revenue growth (in MMAD)
Adjusted revenue growth (in MMAD) +18.3% Reported growth +45 -20 1,191 +181 +9 -4 1,166 1,007 -27 980 +19.0% Adjusted growth 2022 Other 2022 Payment Switching Testing 2023 Other FX 2023 reported revenue adjusted activity activity activity adjusted revenue impact reported © 2024 HIGHTECH PAYMENT SYST
Slide 23: Operating expenses (in MMAD)
Operating expenses (in MMAD) +17.9% Reported growth ⏵ HR Costs : 491 MMAD vs. 443 MMAD (+11%), excluding ESOP cost +58 -7 980 +12 +3 995 • Strong headcount increase: +14% +37 • Salaries increases to address high inflation in 2022. +48 Impact of 2% 844 No additional salary adjustment made in 2023 ⏵ S
Slide 24: Reported and adjusted EBITDA (in MMAD)
Reported and adjusted EBITDA (in MMAD) +18.8% Reported growth 20.6% 22.6% 20.7% +193 -130 +11 -20 271 -12 -3 247 208 +30.3% Adjusted growth 2022 Adjusted Adjusted 2023 ESOP FX impact ESOP FX impact 2023 reported revenue costs adjusted subvention / revenue cost / costs reported © 2024 HIGHTECH PAYMEN
Slide 25: Impact of SaaS model on Revenues and EBITDA
Impact of SaaS model on Revenues and EBITDA Since 2017, HPS started a transformation by introducing the SaaS model. -40 MMAD The acceleration of the last 2 years (100% of sales in 2023 are SaaS and Total 2023 impact 40% of pipeline opportunities as well) has impacted revenues and margins in the shor
Slide 26: Net income analysis
Net income analysis The dollar fell by 5.5% between December 31, 2022 and December 31, 2023. The impact of asset revaluation (receivables and foreign bank accounts) represented a financial cost of -32 M MAD, recoverable with the recovery of the dollar -1.9% Net Financial income due to FX: -23 MMAD T
Slide 27: Cash flow (in MMAD)
Cash flow (in MMAD) +44 -29 -37 238 -4 211 LT Debt compared to equity 116 MMAD 15% -22.5% growth Cash position in MMAD - CAGR 25% End 2022 cash Operations Investments Financing Currency End 2023 305 position exchange cash position 224 238 211 ⏵ Operational cash flow 43.4 M MAD versus 19.1 M MAD in 2
Slide 28: Backlog
Backlog NON-RECURRING 22% Compared to annual Revenues Switch 9% Projects SaaS 22% 821 MMAD 70% 26% -12.2% growth Upselling 13% Click fee 2% Maintenance 28% Backlog in MMAD - CAGR 12.3% 934 821 STABLE 13% 733 RECURRING 65% 573 516 ⏵ Lower sales in 2023 due to longer negotiations on major contracts ⏵
Slide 29: M&A strategy execution
M&A strategy execution Key elements on HPS M&A strategy M&A pipeline 4 Objectives Priority for HPS Assessment based on priority criteria for HPS On-premise Priority 2 1 Geographic growth SaaS Priority 1 Prioritized companies with On-premise Priority 3 2 Consolidate market share ~30 revenue between E
Slide 30: Key takeaways & IR calendar
Key takeaways & IR calendar
Slide 31: Key takeaways
Key takeaways Strong revenue growth in 2023 Successful Strategic Execution Market Penetration High revenue growth achieved in Successful execution of Successful expansion into new 2023, demonstrating the relevance "AccelR8", positioning the geographies (Canada and India) of HPS' strategic initiative
Slide 32: IR calendar & information
IR calendar & information Upcoming meeting for 2024 Upcoming meeting for 2025 APRIL 30, 2024 FEBRUARY 25, 2025 Release of 2023 Annual Report and ESG Report Release of Q4-2024 indicators MAY 29, 2024 MARCH 27, 2025 - ONLINE Release of Q1-2024 indicators Release of 2024 Annual Results AUGUST 23, 2024
Slide 33: Appendices: Consolidated financial statements
Appendices Consolidated financial statements
Slide 34: Consolidated Balance sheet (in MAD)
Consolidated Balance sheet (in MAD) ASSETS 31/12/2023 31/12/2022 LIABILITIES 31/12/2023 31/12/2022 Shareholders' equity 757 160 757 652 158 218 Fixed assets 306 153 376 300 052 568 - Capital 74 061 900 70 359 900 Goodwill 81 052 209 92 321 077 - Additional paid-in capital 83 451 410 31 623 410 Intan
Slide 35: Consolidated Income Statement (in MAD)
Consolidated Income Statement (in MAD) 31/12/2023 31/12/2022 Change Sales 1 116 805 978 980 722 582 13.9% Change in product inventories 39 655 144 1 989 444 1,893.3% Capitalized production - (509 252) -100.0% Other operating income 35 000 340 24 860 711 40.8% Operating income (Revenues) 1 191 461 46
Slide 36: Cash-flow Statement (in MAD)
Cash-flow Statement (in MAD) 31/12/2023 31/12/2022 Net income 99.934.967 117 078 596. Elimination of non-cash and non-operating income and expenses, net - - Depreciation and amortization 38.292 910 34 700 113 - Change in deferred taxes 2.050.782 656 307 - Capital gains or losses 703.007 - - Other no
Slide 37: Invest@hps-worldwide.com
J lnvest@hps-worldwide.com
Hightech Payment Systems — FY2023 Earnings Presentation on 6ix