Lesaka Technologies, Inc. · NASDAQ:LSAK

Lesaka Technologies — Q3 FY2024 Earnings Presentation

51 slides from Lesaka Technologies's earnings presentation, May 9, 2024

1. Slide 1: Q3 FY24 Results Presentation

   FY24 Q3 Results | 1 Q3 FY24 Results Presentation 9 May 2024

2. Slide 2: Safe harbor statement

   FY24 Q3 Results | 2 Safe harbor 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 fa

3. Slide 3: Agenda

   FY24 Q3 Results | 3 Agenda Overview Ali Mazanderani – Chairman Merchant Division Steven Heilbron – Head of Merchant Division & Corporate Development Consumer Division Lincoln Mali – CEO Southern Africa Financial Performance and Outlook Naeem Kola – Group CFO

4. Slide 4: GAAP Income Statement for the quarter (FY24 Q3 and FY23 Q3)

   FY24 Q3 Results | 4 GAAP Income Statement for the quarter (FY24 Q3 and FY23 Q3) ZAR’000 $’000 % Growth % Growth Q3 - ended 31 March FY24 Q3 FY23 Q3 YoY FY24 Q3 FY23 Q3 YoY Average exchange rate for conversion from ZAR to $ R18.88 R17.93 5% R18.88 R17.93 5% Revenue 2 609 913 2 402 288 9% 138 194 133

5. Slide 5: Overview

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6. Slide 6: FY24 Q3 | Continuation of our strong & consistent performance

   FY24 Q3 Results | 6 FY24 Q3 | Continuation of our strong & consistent performance YTD performance FY23 Q3 FY24 Q3 Growth Nine months ended 31 March Revenue R6 871 million R7 842 million  14% Group Adjusted EBITDA¹ R296 million R501 million  69% Quarterly performance FY23 Q3 FY24 Q3 Growth Three mo

7. Slide 7: Our operations and immediate opportunity are greater than just South Africa

   FY24 Q3 Results | 7 OVERVIEW Our operations and immediate opportunity are greater than just South Africa MERCHANT South Africa Lesaka’s coverage DIVISION CONSUMER DIVISION GDP Agg. GDP $381bn $176bn PERFORMANCE FINANCIAL Population Agg. population 62 million South Africa 78 million OUTLOOK APPENDIX

8. Slide 8: The Lesaka platform serves consumers and merchants across the spectrum

   FY24 Q3 Results | 8 OVERVIEW The Lesaka platform serves consumers and merchants across the spectrum MERCHANT DIVISION 3 300+ employees1 1.7+ million Customers1 119 000+ Merchants1 R250+ billion in Throughput annually1 CONSUMER1 MICRO MERCHANT1 MERCHANT1 ENTERPRISE1 CONSUMER DIVISION PERFORMANCE FINA

9. Slide 9: Merchant Division

   Merchant Division

10. Slide 10: Merchant MSME revenue drivers | VAS, supplier payments and card acquiring

    FY24 Q3 Results | 10 OVERVIEW Merchant MSME revenue drivers | VAS, supplier payments and card acquiring Holistic offering and innovative solutions to merchants Value-Added Services & supplier payments Card Acquiring MERCHANT DIVISION Devices1 deployed Devices1 deployed 80 250+ | ▲12% (yoy) 50 200+ |

11. Slide 11: Merchant MSME revenue drivers | Cash and Merchant Credit

    FY24 Q3 Results | 11 OVERVIEW Merchant MSME revenue drivers | Cash and Merchant Credit Holistic offering and innovative solutions to merchants Digitalization of Cash Merchant Credit1 MERCHANT DIVISION Devices deployed 4 455+ ▲2% (yoy) Throughput (ZAR) 13% yoy 2 CONSUMER 3% yoy DIVISION R343m R299m R

12. Slide 12: Merchant MSME | EasyPay

    FY24 Q3 Results | 12 OVERVIEW Merchant MSME | EasyPay Encouraging momentum as we execute on upgrading and modernizing our EasyPay enterprise market solution VAS and bill payments MERCHANT DIVISION Throughput for the quarter (ZAR) 6% yoy • Strategically important asset with scale CONSUMER - Servicing

13. Slide 13: Merchant Division Revenue

    FY24 Q3 Results | 13 OVERVIEW Merchant Division Revenue Merchant Revenue (ZARm) MERCHANT DIVISION 8% yoy CONSUMER DIVISION R2 395m R2 285m R2 263m PERFORMANCE R2 113m R2 118m R2 158m FINANCIAL R1 881m OUTLOOK Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY23 FY24 APPENDIX “R” = South African Rands, ZAR.

14. Slide 14: Merchant Division EBITDA

    FY24 Q3 Results | 14 OVERVIEW Merchant Division EBITDA Merchant EBITDA 1 (ZARm) MERCHANT DIVISION 7% yoy 16% yoy 2 R159m R 149m R163m R158m CONSUMER R160m DIVISION R154m R150m R137m R135m PERFORMANCE FINANCIAL R12m R1m OUTLOOK Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY23 FY24 NUETS & Kazang Pay Advance 2 Merchant APPE

15. Slide 15: Consumer Division

    Consumer Division

16. Slide 16: EasyPay Everywhere | Sales and customer focused business

    FY24 Q3 Results | 16 EasyPay Everywhere | Sales and customer focused business OVERVIEW Cross selling and upselling initiatives yielding encouraging results Momentum in driving Deepening our relationship MERCHANT customer acquisition with our customers DIVISION CONSUMER DIVISION +63 000 PERFORMANCE F

17. Slide 17: Consumer | Offering straight forward and cost-effective Financial Services

    FY24 Q3 Results | 17 OVERVIEW Consumer | Offering straight forward and cost-effective Financial Services MERCHANT BANKING SHORT-TERM LOANS PERSONAL INSURANCE DIVISION CONSUMER DIVISION ~1.5m R509m ~414 000 Active EPE customers Loan book before allowances Active insurance policies ▲15% YoY1 ▲28% YoY

18. Slide 18: EPE Growth strategy yielding encouraging results

    FY24 Q3 Results | 18 OVERVIEW EPE Growth strategy yielding encouraging results Momentum in delivering growth in client base and ARPU¹ Consumer Segment Revenue (Rm) Consumer Segment Adjusted EBITDA 2 (Rm) Delivery against MERCHANT strategic focus areas DIVISION 19% yoy 178% yoy 8% qoq 49% qoq 1. Grow

19. Slide 19: Financial Highlights

    Financial Highlights

20. Slide 20: Exceeded upper end of Group Adjusted EBITDA guidance

    FY24 Q3 Results | 20 OVERVIEW Exceeded upper end of Group Adjusted EBITDA guidance Reduced leverage and continued improvement in net cash provided by operating activities Group Revenue Group Adjusted EBITDA 2 MERCHANT DIVISION 9% yoy 47% yoy R183m Guidance before Guidance lease expenses 3 Guidance a

21. Slide 21: GAAP Income Statement for the quarter (FY24 Q3 and FY23 Q3)

    FY24 Q3 Results | 21 GAAP Income Statement for the quarter (FY24 Q3 and FY23 Q3) ZAR’000 $’000 % Growth % Growth Q3 - ended 31 March FY24 Q3 FY23 Q3 YoY FY24 Q3 FY23 Q3 YoY Average exchange rate for conversion from ZAR to $ R18.88 R17.93 5% R18.88 R17.93 5% Revenue 2 609 913 2 402 288 9% 138 194 133

22. Slide 22: Net income (loss) before tax

    FY24 Q3 Results | 22 OVERVIEW Net income (loss) before tax Unpacking the non-cash charges & once-off transaction costs Net income (loss) before tax MERCHANT DIVISION (R18m) CONSUMER (R67m) (R67m) DIVISION (R67m) (R12m) (R67m) (R39m) (R74m) (R60m) PERFORMANCE (R120m) FINANCIAL OUTLOOK FY23 Q3 FY24 Q1

23. Slide 23: Segmental EBITDA analysis (FY24 Q3 and FY23 Q3)

    FY24 Q3 Results | 23 PERFORMANCE HIGHLIGHTS Segmental EBITDA analysis for the quarter (FY24 Q3 and FY23 Q3) ZAR’000 $’000 Q3 - ended 31 March FY24 Q3 FY23 Q3 % Growth FY24 Q3 FY23 Q3 % Growth Average exchange rate for conversion from ZAR to $ R18.88 R17.93 5% R18.88 R17.93 5% MERCHANT DIVISION Reven

24. Slide 24: Segmental EBITDA analysis (FY24 Q3 and FY24 Q2)

    FY24 Q3 Results | 24 PERFORMANCE HIGHLIGHTS Segmental EBITDA analysis for the quarter (FY24 Q3 and FY24 Q2) ZAR’000 $’000 MERCHANT Quarter FY24 Q3 FY24 Q2 % Growth FY24 Q3 FY24 Q2 % Growth DIVISION Average exchange rate for conversion from ZAR to $ R 18.88 R18.71 1% R18.88 R18.71 1% Revenue Merchant

25. Slide 25: Group Revenue

    FY24 Q3 Results | 25 PERFORMANCE HIGHLIGHTS Group Revenue Consistent execution | Continue to deliver on both growth and profitability Group Revenue MERCHANT DIVISION 9% yoy R2 695m R2 610m R2 495m R2 538m R2 402m R2 383m R2 138m CONSUMER DIVISION R2 395m R2 285m R2 159m R2 263m R2 113m R2 118m R1 88

26. Slide 26: Group Adjusted EBITDA (loss)

    FY24 Q3 Results | 26 PERFORMANCE HIGHLIGHTS Group Adjusted EBITDA (loss) Consistent execution | Continue to deliver on both growth and profitability Group Adjusted EBITDA (loss) MERCHANT DIVISION 47% yoy 9% qoq R183m CONSUMER DIVISION R168m R146m R150m R117m R125m R58m R159m R163m R154m R150m R149m

27. Slide 27: Fundamental earnings (loss) per share continues to improve | Quarterly

    FY24 Q3 Results | 27 OVERVIEW Fundamental earnings (loss) per share continues to improve | Quarterly Delivering positive cash from business operations at Group level Basic and fundamental 1 earnings (loss) per share (ZAR) Net Cash provided by (used in) MERCHANT operating activities DIVISION 73% qoq

28. Slide 28: Fundamental earnings (loss) per share continues to improve | Year-to-date

    FY24 Q3 Results | 28 OVERVIEW Fundamental earnings (loss) per share continues to improve | Year-to-date Delivering positive cash from business operations at Group level Basic and fundamental 1 earnings (loss) per share (ZAR) Net Cash provided by (used in) MERCHANT operating activities DIVISION R0.64

29. Slide 29: Leverage ratio improved with focus on reducing debt and growing Adjusted EBITDA

    FY24 Q3 Results | 29 OVERVIEW Leverage ratio improved with focus on reducing debt and growing Adjusted EBITDA Generating positive cash flow at an operational level Ordinary working capital requirements stable MERCHANT Summary Group cash flow (Rm) FY24 Q3 FY24 Q2 FY24 Q1 FY23 Q3 DIVISION 1 Cash gener

30. Slide 30: CAPEX primarily driven by growth

    FY24 Q3 Results | 30 OVERVIEW CAPEX primarily driven by growth Capex (Rm) FY24 Q3 FY24 Q2 FY24 Q1 FY23 Q3 MERCHANT DIVISION Capex (56) (41) (53) (85) CONSUMER R85m DIVISION R23m | Kazang • Point-of-sales devices on average have a payback of < 4 months and a 36-month useful life R56m R53m • Highly ca

31. Slide 31: Outlook

    LeESsaka Outlook

32. Slide 32: Re-affirming revenue guidance & raising Group Adjusted EBITDA guidance for FY24

    FY24 Q3 Results | 32 OVERVIEW Re-affirming revenue guidance & raising Group Adjusted EBITDA guidance for FY24 Guidance for FY25 to be provided in September 2024 MERCHANT DIVISION Annual FY23 FY24 Outlook FY24 Outlook Actual previously provided 2 re-affirmed/raised 3 Group Revenue R9.4bn R10.7bn-R11.

33. Slide 33: Questions

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34. Slide 34: Appendix

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35. Slide 35: Mission and values

    FY24 Q3 Results | 35 OVERVIEW Enabling merchants Improving the lives of South Africa’s to compete and grow grant beneficiaries by providing MERCHANT DIVISION innovative financial technology and value-creating solutions CONSUMER DIVISION PERFORMANCE FINANCIAL OUTLOOK APPENDIX Our Values Entrepreneuri

36. Slide 36: Income Statement year-to-date (FY24 Q3 and FY23 Q3)

    FY24 Q3 Results | 36 Income Statement year-to-date (FY23 Q3 and FY22 Q3) ZAR’000 $’000 Nine months ended 31 March FY24 Q3 FY23 Q3 FY24 Q3 FY23 Q3 Average exchange rate for conversion from ZAR to $ R18.76 R17.40 R18.76 R17.40 Revenue 7 842 078 6 871 364 418 176 394 822 Expense (7 780 449) (7 023 054)

37. Slide 37: Disaggregation of revenue before intersegment eliminations per quarter

    FY24 Q3 Results | 37 OVERVIEW Disaggregation of revenue (ZAR’000) before intersegment eliminations per quarter Total Segment Revenue¹ Segment Revenue¹ MERCHANT Merchant Consumer DIVISION 9% 8% 19% 338 171 2 394 515 312 767 9 312 2 707 282 27 139 2 285 394 2 623 564 - 59 980 284 686 9 042 2 117 602 2

38. Slide 38: Group Revenue (ZAR and USD)

    FY24 Q3 Results | 38 OVERVIEW Group Revenue Consistent execution | Continue to deliver on both growth and profitability Group Revenue MERCHANT DIVISION 9% yoy R2 695m $144m R2 538m $137m R2 610m $138m R2 495m $133m R2 383m $136m R2 402m $134m R2 138m $125m R2 094m $135m CONSUMER DIVISION R1 895m $12

39. Slide 39: Group Adjusted EBITDA (loss) (ZAR and USD)

    FY24 Q3 Results | 39 OVERVIEW Group Adjusted EBITDA (loss) Consistent execution | Continue to deliver on both growth and profitability Group Adjusted EBITDA (loss) MERCHANT DIVISION 47% yoy 9% qoq R183m $10m R168m $9m $8m CONSUMER R146m $8m R150m DIVISION R125m $7m R117m $7m R59m $4m R58m $3m R159m

40. Slide 40: Outlook on stock-based compensation charges

    FY24 Q3 Results | 40 OVERVIEW Outlook on stock-based compensation charges (SBC) (ZARM) Stock-based compensation charges MERCHANT DIVISION R196m • Current level of SBC reflects higher amounts due to senior executive sign-on that will vest over the next 3-years linked R46m to performance R151m • Highe

41. Slide 41: Reconciliation of non-GAAP measures | Quarterly

    FY24 Q3 Results | 41 OVERVIEW Reconciliation of non-GAAP measures | Quarterly FY24 Q3 FY24 Q2 FY23 Q3 FY24 Q3 FY24 Q2 FY23 Q3 MERCHANT For the quarter ZAR’000 ZAR’000 ZAR’000 $’000 $’000 $’000 DIVISION Average exchange rate for conversion from ZAR to $ R18.88 R18.71 R17.93 R18.88 R18.71 R17.93 Loss

42. Slide 42: Once-off items | Quarterly

    FY24 Q3 Results | 42 OVERVIEW Once-off items | Quarterly The table below presents the components of once-off items for the periods presented: MERCHANT DIVISION For the quarter FY24 Q3 FY24 Q2 FY23 Q3 FY24 Q3 FY24 Q2 FY23 Q3 ZAR’000 ZAR’000 ZAR’000 $’000 $’000 $’000 Average exchange rate for conversi

43. Slide 43: Reconciliation of non-GAAP measures | Quarterly

    FY24 Q3 Results | 43 OVERVIEW Reconciliation of non-GAAP measures | Quarterly MERCHANT DIVISION FY24 Q3 FY24 Q2 FY23 Q3 FY24 Q3 FY24 Q2 FY23 Q3 EPS, EPS, EPS, EPS, EPS, EPS, ZAR’000 BASIC ZAR’000 BASIC ZAR’000 BASIC $’000 BASIC $’000 BASIC $’000 BASIC Average exchange rate for conversion from ZAR to

44. Slide 44: Reconciliation of non-GAAP measures | Year-to-date

    FY24 Q3 Results | 44 OVERVIEW Reconciliation of non-GAAP measures | Year-to-date MERCHANT DIVISION Mar 31 Mar 31 Mar 31 Mar 31 2024 2023 2024 2023 ZAR’000 EPS, BASIC ZAR’000 EPS, BASIC $’000 EPS, BASIC $’000 EPS, BASIC Average exchange rate for conversion from ZAR to $ R18.76 R17.94 R18.76 R17.94 CO

45. Slide 45: Use of Non-GAAP measures

    FY24 Q3 Results | 45 OVERVIEW Use of Non-GAAP measures U.S. securities laws require that when we publish any non-GAAP measures, we disclose the reason for using these non-GAAP measures and provide reconciliations to the most directly comparable GAAP measures. We have received requests from investors

46. Slide 46: Fundamental earnings per share turns positive (USD)

    FY24 Q3 Results | 46 OVERVIEW Fundamental earnings per share turns positive Delivering positive cash from business operations at Group level Basic and fundamental 1 earnings (loss) per share (ZAR) Net Cash provided by (used in) MERCHANT operating activities DIVISION ($0.04) CONSUMER ($0.06) ($0.06)

47. Slide 47: Net income (loss) before tax (USD)

    FY24 Q3 Results | 47 OVERVIEW Net income (loss) before tax Unpacking the non-cash charges & once-off transaction costs Net income (loss) before tax MERCHANT DIVISION $1m CONSUMER ($4m) ($4m) DIVISION ($4m) ($1m) ($4m) ($2m) ($4m) ($3m) PERFORMANCE ($7m) FINANCIAL OUTLOOK FY23 Q3 FY24 Q1 FY24 Q2 FY24

48. Slide 48: Glossary

    FY24 Q3 Results | 48 OVERVIEW Glossary MSME Micro small and medium enterprise SMME Small, medium, and micro enterprise MERCHANT DIVISION Kazang VAS offering Kazang is a leader in prepaid value-added services in Southern Africa. We help shop owners, traders and other entrepreneurs to i ncrease sales

49. Slide 49: Glossary

    FY24 Q3 Results | 49 OVERVIEW Glossary MERCHANT DIVISION CONSUMER DIVISION PERFORMANCE Cash vault Kazang offering FINANCIAL OUTLOOK Partnerships enabling supply chain payments Lesaka ” means “ kraal” in Sesotho and Setswana Spaza shops and superettes APPENDIX at Merchant locations

50. Slide 50: Glossary

    FY24 Q3 Results | 50 OVERVIEW Glossary Lesaka "kraal" Lesaka ” means “ kraal” in Sesotho and Setswana. A “kraal” protects the most valuable assets of a community, their livestock LSM Living standards measure MERCHANT DIVISION EPE EasyPay Everywhere Easy Pay Insurance EasyPay insurance (previously na

51. Slide 51: Lesaka

    LESQKA

Lesaka Technologies — Q3 FY2024 Earnings Presentation on 6ix