Araxi Limited · JSE:AXX
Araxi — Capital Appreciation — Investor Presentation (February 2023)
28 slides from Araxi's investor presentation, February 2023
Slide 1: Unlock the Stock
Unlock the Stock February 2023 1
Slide 2: International Payments Software
We are a financial technology company that seeks to serve and partner with established and emerging financial institutions and other large corporates International Payments Software 2
Slide 3: Investment Case
Capital Appreciation’s ✓ Strong Secular Trends Investment ✓ Large Market Opportunity Case ✓ Trusted Partner to Blue-Chip Clients ✓ Demonstrated Leadership and Track An extremely strong Record foundation on which to grow – organically and by ✓ Cash Generative, Resilient Business acquisition Model ✓ H
Slide 4: CTA Snapshot
CTA Snapshot General Payments Software Acquiring, developing and The Payments division The Software division is a growing innovative financial manages payment leading provider of world-class services, technologies & infrastructure, payment technology products and solutions technology solutions and a
Slide 5: Everything Digital
Everything Digital The new, post-Covid world General Payments Software ✓ Increased interest in digitalisation ✓ Substantial demand for payment ✓ Increasing demand for Synthesis terminals offerings ✓ Increased understanding of strategic importance and ✓ Strong demand for Android ✓ Demand across multi
Slide 6: Expanding Representative Blue-Chip Clients
Expanding Representative Blue-Chip Clients Financial Services Retail Healthcare Telecoms Logistics 6
Slide 7: Investing for Tomorrow
Investing Expensed for H1 ‘23 Tomorrow Launch of Halo Dot offering in international markets Launch of Dashpay Glass R14m Substantial investment in South Africa expensed in H1 FY2023 International expansion in Europe Net new employee hires, excluding Responsive R19m (81 YoY) 7
Slide 8: Payments Highlights
Payments Revenue R 318m 1.4% Highlights EBITDA R 120m 5.4% Terminal sales remain near ✓ More than 315,000 terminals in hands of clients, up 22% YoY record levels ✓ Android solutions in high demand 533.8 506.2 6 months 469.9 ✓ 23% increase in annuity revenue 415.1 397.4 ✓ R million Halo Dot live in m
Slide 9: Software Highlights
Software Revenue R 220m 75.4% Highlights EBITDA R 46m 57.1% Superb results with ✓ Strong pipeline of new business strong momentum ✓ Significant increase in cloud projects 297.2 6 months ✓ Diversified revenue stream ✓ New market sectors ✓ New geographies - Europe and Australasia 222.1 219.8 195.0 ✓ S
Slide 10: International Highlights
International ✓ International revenue up 195% Highlights ✓ Offices in Amsterdam gaining momentum Considerable progress in ✓ Focused effort to further diversify the establishing an customer base international presence ✓ Enhanced access to international opportunities ✓ Sponsorship of FinTech event sho
Slide 11: Global View of Terminal Demand
Global View Drivers of Ongoing Demand of Terminal Demand ✓ Growing Market – Increase in terminal enabled retail footprint ✓ Enhanced Technology 136 million ✓ Increased Functionality – Provide terminals shipped in 2021 % YoY merchants enhanced services Geography Volume (m) Change ✓ Terminal Envy – Me
Slide 12: CTA Estate Continues To Grow
Payment Terminals 277 315 CTA Estate 185 217 Total Terminal Estate • Number of terminals in clients’ Continues 140 hands grew 22% YoY 92 • Includes terminals subject to rental agreements To Grow 49 Apr 17 Mar 18 Mar 19 Mar 20 Mar 21 Mar 22 Sep 22 12 months 233 6 months Terminals at period 220 end, i
Slide 13: Halo Dot Pursuing Opportunities Globally
Market Opportunity Is Huge Halo Dot Pursuing Opportunities Globally According to a 2021 study by Juniper Research, the global number of smartphones being used for SoftPOS payments will increase from 3.2 million in 2021 to almost 24 million in 2026 13
Slide 14: Anatomy of Dashpay Glass Experience
Anatomy of Dashpay Glass Experience Day: Sunday || Location: Remote Market 12.43pm App downloaded Merchant account registered 12.46pm (create a profile) First transaction initiated and first card 1.07pm payment received – R450 14
Slide 15: Encouraged By LayUp's Progress
Encouraged By LayUp’s MTN Business App of the Year Progress R550k Largest Purchase R30k Average Order Size in Key Segment R80 Smallest Purchase > 2x YoY Increase in Merchants 88% Completion Rate * > 11x Payment Plans Created * Completion rate measures the % of payment plans initiated with currently
Slide 16: Strategic Benefits are Driving Cloud Adoption
Agility and Productivity Strategic 8% 13% Benefits are Cost Savings Reduces the percentage of IT Operational Resilience Cloud availability and security Driving Cloud spend on infrastructure, freeing enables customers to improve budget for reinvestment in other SLAs while reducing unplanned areas dow
Slide 17: The Value Of Cloud Transcends IT
The Value Of Cloud 1 Rejuvenate Transcends IT $340 billion • IT cost optimization • Risk reduction • Core-operations digitization Estimated at more than US$1 trillion 2 Innovate $750 billion • Innovation-driven growth Source: McKinsey & Company - Independent third-party research data (Omnicom Group
Slide 18: Synthesis Operating Units
Synthesis Operating Intelligent Data Managed Services Payment Technology • Data Intelligence is critical to (MSP) & Cryptography Units drive business success • 24 x 7 x 365 support and Responsible for Keystone and • Our team of Machine Learning management of high availability Halo Dot development En
Slide 19: Use Case
Use Case Solution Automated quality assurance system that parses verbiage to check agent compliance How a top 5 bank has Using: scaled to meet • An inference pipeline using multiple AWS services to process text with a Transformer language model regulatory • Analytics dashboard to ingest the results
Slide 20: Use Case
Use Case Capitec approached Responsive to partner in the redesign and development of their public facing website. The goal was to be more customer centric and to drive new client acquisition from a Africa’s First Optimizely Digital retail banking perspective. Experience Cloud Responsive enabled and
Slide 21: Robust Cash Flow From Operations Supports Dividends
Robust Cash Flow From Operations Supports Dividends R million Dividends 250 (cents per share) 7 200 H1’23 H1’23 6 3.75 5 150 4 3.00 212.7 206.1 2.75 204.4 200.9 100 2.00 3 2.00 166.3 2 4.25 103.1 3.75 98.3 50 74.9 55.7 72.1 66.1 62.2 2.25 2.25 2.50 1 2.00 0 0 2018 2019 2020 2021 2022 HY 23 2018 2019
Slide 22: Positioning Remains Strong
Capital Appreciation’s Positioning ✓ Large and growing addressable markets Remains ✓ Experienced executive and formidable skills pool Strong ✓ Deep domain expertise and proprietary technologies in high demand (in high priority areas) ✓ Products and services have demonstrable global While challenges
Slide 23: Q&A Thank you
KX Q&A Thank you [A
Slide 24: Payment Revenue Model
Payment Revenue Model POS Devices Maintenance & POS Estate Transactions Licensing & Services Management Solutions Terminal sales Generates monthly Generates monthly Variable based on Generates monthly generate gross profit recurring revenue recurring revenue transaction type and recurring revenue Re
Slide 25: Payment Services Offered
Payment Services Offered Customers can select packages or selected services a la carte Devices Software Activations & Logistics Call Centre • Stand alone: counter-top and • Software development and testing • Asset management • Product support portable • R&D • Key injection • Problem identification •
Slide 26: Software Revenue Model
Software Revenue Model Services and Licensing of Third-Party Software Hardware Sales Consulting Proprietary Software Licensing Generates monthly Generates monthly Generates monthly Sale of specialised recurring revenue on recurring revenue recurring revenue from Hardware Security project basis depen
Slide 27: Payments Revenue Composition
Payments Revenue Composition Sale of Terminals Maintenance and Support Service Fees down 8.5% from terminals up 24% R million R million 210 193 85 • Terminal sales resilient after record 64 68 125 57 sales in prior year 99 Sep 19 Sep 20 Sep 21 Sep 22 Sep 19 Sep 20 Sep 21 Sep 22 • Strong demand for A
Slide 28: Software Revenue Composition
Software Revenue Composition Services and Consultancy Fees Licence and Subscription Fees up 51% up 3% • Positive trajectory and strong pipeline R million R million 145 68 82 96 26 26 26 27 • International opportunities Sep 19 Sep 20 Sep 21 Sep22 Sep 19 Sep 20 Sep 21 Sep 22 promising, currently mainl
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