Tyro Payments Ltd. · ASX:TYR
Tyro Payments — Investor Presentation (August 2022)
30 slides from Tyro Payments's investor presentation, Aug 29, 2022
Slide 1: FY22 Investor Presentation
FY22 INVESTOR PRESENTATION 29 AUGUST 2022 Presented by: Robbie Cooke - CEO | Managing Director Prav Pala - Chief Financial Officer Giovanni Rizzo - Chief of Investor Relations Tyro Payments Limited ABN 49 103 575 042
Slide 2: Disclaimer
Disclaimer The material in this presentation is general background information about Tyro Payments Limited (Tyro) and is current at the date of the presentation, 29 August 2022. The information in the presentation is given for informational purposes only, is in summary form and does not purport to b
Slide 3: Key Call Outs - FY22
Key Call Outs - FY22 Transaction Value Merchants Gross Profit EBITDA $34.2B 63,770 $148.5M $10.7M H1 FY22: $2.8M 34% GROWTH YEAR- 10% GROWTH YEAR- 24% GROWTH YEAR- ON-YEAR ON-YEAR ON-YEAR H2 FY22: $7.9M STRONG BALANCE SHEET Q4 FY22 OPERATING LEVERAGE TARGETING POSITIVE FREE 88.6% CASH FLOW EXITING F
Slide 4: Transaction Value Performance
Transaction Value Performance QUARTERLY TRANSACTION VALUE PERFORMANCE - FY22 FY 22 Transaction Value Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 FY22 Tyro Core Payments $5.35b $7.97b $7.32b $8.34b $28.98b $34.2b Growth on pcp 0% 18% 18% 25% 16% FY17 - FY22 CAGR +26% Bendigo Alliance $1.18b $1.33b $1.34b $1.38b
Slide 5: Merchant Acquisition
Merchant Acquisition Lead Generation: 55% Digital & ATL 45% Partners & Referrals Merchant Numbers (FY17 to FY22) FY17 - FY22 CAGR +28% 63,770 58,186 17,394 42,839 New Leads 18,490 34% Conversion Rate from Lead to Application 46,376 39,696 32,176 29,031 x34% 23,245 18,329 14,777 14,777 Applications F
Slide 6: Operating Leverage
Operating Leverage 116.4% 114.2% 110.3% 104.7% • Improved operating leverage achieved 97.5% in Q4 FY22 after impact of Covid 92.8% 95.9% lockdowns on H1 FY22 88.2% 88.6% • Positive EBITDA result of $10.7 million 85% achieved (FY21: $14.2 million) - reflecting: • Continuing investment in growth initi
Slide 7: Increased Focus on Cost Management
Increased Focus on Cost Management Permanent Headcount Contractor Headcount • Focus on maintaining a headcount March 2022 to August 2022 March 2022 to August 2022 level in both permanent employees + contractors that will drive operating leverage 630 160 • Reduction in headcount achieved 140 625 thro
Slide 8: Strategic Partnerships and Acquisitions Driving Growth
Strategic Partnerships and Acquisitions Driving Growth 1 2 3 4 Australia’s first merchant Investment in Health Strategic partnerships with Investment in eCommerce + acquiring alliance Business large organisations Alternative Payment Types to enhance offerings • Tyro exclusively provides merchant • M
Slide 9: Strategic Priorities
Strategic Priorities Roll-out Tyro Go Roll-out Tyro Pro Digitisation card reader new generation merchant terminal onboarding + servicing lin tly ly 2 in ut rol rren 023 g-o ear ming Cu Co Strategic benefit: Strategic benefit: Strategic benefit: • Facilitating entry into the trades and • Best-in-clas
Slide 10: Strategic Priorities (continued)
Strategic Priorities (continued) Leveraging Tyro Margin Unified Connect Management Commerce Unified Commerce Strategic benefit: Strategic benefit: Strategic benefit: Providing individual merchants with: • Refine pricing of merchant service fee • Enhance offerings leveraged to growth • A real time fe
Slide 11: Financial Performance Analysis
Financial Performance Analysis FY22 FY21 GROWTH • Transaction Value h 34% PAYMENTS BUSINESS $’000 $’000 % • Payments Gross Profit h 34% statutory + h 28% normalised1 Revenue 318,847 229,221 p 39.1% • Group Gross Profit h 30% statutory + h 24% normalised1 Less: Interchange, scheme, (171,190) (118,694
Slide 12: Gross Profit Analysis
Gross Profit Analysis Tyro Core Payments Business1 Margins as a proportion of Transaction Value (bps) 100.0 91.2 • H1 FY22 net MAF and gross profit margin 95.0 90.0 87.5 impacted after not passing on scheme 85.0 81.6 80.8 84.0 and interchange fee increases incurred in 79.7 80.0 the half to assist me
Slide 13: Operating Cost Base Analysis
Operating Cost Base Analysis FY22 FY21 Growth Normalised operating expenses1 (excl. share-based payments) - FY21 vs. FY22 $’000 $’000 % $4.1m $137.8m Normalised operating expenses : 1 $14.6m Employee benefits expense (excl. share-based payments) (92,628) (75,365) p 22.9% Contractor and consulting ex
Slide 14: Reconciliation of Statutory to Normalised Results
Reconciliation of Statutory to Normalised Results NORMALISATION ADJUSTMENTS Summary of adjustments FY22 BENDIGO ALLIANCE BENDIGO ALLIANCE FY22 1. Bendigo Alliance gross profit share - reflects economic reality of STATUTORY GROSS PROFIT TRANSITIONAL INVESTMENT IN NORMALISED transaction and is treated
Slide 15: Liquidity + Capital Adequacy Analysis
Liquidity + Capital Adequacy Analysis Liquidity • Total cash and investments of $122.8 million (FY21: $172.8 million) 162% • Sufficient to support the Group through to positive free cash $186m flow $179m 143% $173m $166m Total Capital Ratio 145% $165m • Total capital ratio of 39% at 30 June 2022. Mo
Slide 16: Trading Update
Trading Update1 PAYMENTS BUSINESS: • Strong start to FY23 • Transaction value 1 July 2022 to 26 August 2022 - $6.3 billion, up 57% on pcp Weekly Transaction Value Growth - Q1 FY23 › Victoria h70% 70% 70% › NSW h118% 65% › Queensland h39% 60% › WA h27% 55% › SA h43% 50% › Other (includes Bendigo Alli
Slide 17: FY23 Key Initiatives + Guidance
FY23 Key Initiatives + Guidance1 Key Initiatives for FY23: Earnings guidance range for FY231: • Customer Growth FY23 • Cost Management GUIDANCE RANGE • Margin Improvement Transaction Value $40 billion to $42 billion Gross profit2 (after Bendigo commission) $175 million to $181 million Positive Free
Slide 18: Appendix
APPENDIX Supporting Supplementary Information 18
Slide 19: Tyro Payments Business
Tyro Payments Business FY22 FY21 GROWTH Transaction value growth of 34.4% - Drivers of growth $’000 $’000 % Revenue 318,847 229,221 p 39.1% Less: Interchange, scheme, integration + support fees (171,190) (118,694) p 44.2% New Growth in Low Merchant Gross profit (statutory) 147,657 110,527 p 33.6% Me
Slide 20: Tyro Payments Business (continued)
Tyro Payments Business (continued) Geographical Performance - Tyro core only Merchant Count + Transaction Value by Vertical (Tyro core only) • Transaction value growth rate outside of NSW + ACT: Merchant › 27% average growth rate in states excluding NSW + ACT 27% 34% 24% 15% Count (12,463) (15,984)
Slide 21: Tyro Payments Business (continued)
Tyro Payments Business (continued) Improvement in margins from Q3 FY22 Tyro Core Payments Business Margins H1 FY22 Q3 FY22 Q4 FY22 FY22 FY21 Merchant service fee (MSF) 80.8bps 82.7bps 85.1bps 82.5bps 80.7bps Net merchant acquiring fee (MAF) 32.2bps 32.6bps 33.9bps 32.8bps 34.7bps Payments gross prof
Slide 22: Tyro Payments Business - New Health Business
Tyro Payments Business - New Health Business • Tyro Health launched on 1 July 2022 Unified Multi-Sided Digital Approval + Payments Platform • Brings together all of Tyro’s health offerings: • Medipass’ digital health payments platform combined with Tyro’s card-present • One leadership team and one b
Slide 23: Tyro Payments Business - Tyro Connect
Tyro Payments Business - Tyro Connect Unified Commerce Payments POS/PMS Acquiring Connect Banking We integrate payments & Payment Experiences payments experiences We set businesses free by simplifying payments and commerce Focus Areas How we Help our Merchants Our Value Proposition 1. We are respons
Slide 24: Tyro Banking Business
Tyro Banking Business FY22 Growth in Monthly Originations Since Impact of Covid ($’million) FY22 FY21 GROWTH $12.7m $’000 $’000 % $11.5m Loan Originations 99,071 25,843 p 283.4% New Record Revenue 5,504 3,222 p 70.8% monthly $10.5m $11.3m Originations Interest income on loans 4,877 1,952 p 149.8% of
Slide 25: Tyro Banking Business - Key Initiatives to Drive Growth
Tyro Banking Business - Key Initiatives to Drive Growth Delivering on banking innovation Implemented Mambu’s cloud-native banking platform in FY20 - Platform will be used to grow value-add banking products P Launched Web Banking - Merchants will now be able to view their Banking products and balance
Slide 26: Financial Position
Financial Position Balance Sheet Reflective of Prudent Capital Management 30 JUN 2022 30 JUNE 2021 $’000 $’000 Cash + Financial Investments ASSETS • Total cash and financial investments of $122.8 million (30 June 2021: $172.8 million) Cash1 51,583 103,712 • Movement of negative $48.5 million in cash
Slide 27: Cash Flow Analysis
Cash Flow Analysis FY22 FY21 $’000 $’000 Net payments income 148,150 110,120 Operating Cash Flows: Net interest and other income 6,831 8,672 • Operating cash flows (excluding loans and deposits) of negative $9.0 million Employee expenses (including contractors) paid (99,067) (76,592) (FY21: negative
Slide 28: Card-Present Terminal Segment Share
Card-Present Terminal Segment Share Card Present Segment Share by EFTPOS Terminal Count by ADI (#’000), June 2020 vs June 2021 (FY21 vs FY22 for Tyro) ~76% of Total (718,000 of 946,000 terminals) 0% 244 244 (1%) Includes Bendigo reported terminals • Includes Adyen, First Data (incl. 188 186 BOQ), Sm
Slide 29: Segment Share in Growing Total Addressable Market
Segment Share in Growing Total Addressable Market Annual transaction value of card payments acquired in Australia1 ($’billion) - Tyro’s estimated segment share of total card payments acquired in Australia - as at 30 June 2022 as at 30 June 2022 5.1% 3.8% ~5.1% 3.0% segment share $668b 2.2% 2.7% 3.4%
Slide 30: Investor Relations contact details
Investor Relations contact details: Giovanni Rizzo Phone: +61 (0) 439 775 030 Email: grizzo@tyro.com Address: 18/55 Market St, Sydney NSW 2000 Company website: https://investors.tyro.com