Cab Payments Holdings Plc · LSE:CABA
Cab Payments — FY2023 Earnings Presentation
27 slides from Cab Payments's earnings presentation, Mar 26, 2024
Slide 1: 26 March 2024
26 March 2024 Classification: CONFIDENTIAL
Slide 2: Introduction
Introduction Bhairav Trivedi, CEO 2
Slide 3: We move money where it's needed
We move money where it’s needed: to and from the world’s most hard-to-reach markets Moving money Payments and FX infrastructure • Opening often complex • Sophisticated global institutional clients hard-to-reach markets to the global economy • Focus on emerging and frontier markets • Provide equitabl
Slide 4: Performance in 2023
Performance in 2023 1 Large, fast-growing market undergoing favourable structural shift Between 1 and 2% of our target addressable market 2 Highly diversified blue chip client base 509 clients (up 12% like-for-like) Globally >10k potential clients 3 Deep global payments and FX infrastructure 331 ban
Slide 5: FY 2023 Financial performance
FY 2023 Financial performance Richard Hallett, CFO 5
Slide 6: FY 2023 performance snapshot
FY 2023 performance snapshot A record set of results and high levels of cash generation (all figures in £m) +25% 137.1 28% 50% 47% 68% 91% 88% 109.4 Adjusted EBITDA margin Cash conversion +17% 64.6 +14% 53.5 55.0 56.7 Adjusted 49.8 5.3 21.1 EBITDA 49.6 43.5 EBITDA 14.9 10.2 Gross Income Adjusted EBI
Slide 7: Income statement summary
Income statement summary (£m – DecYE) FY23 FY22 YoY % • Record revenue year of £137m, reflecting growth FX FX 68.5 63.4 8% of 25% - however not at original expected levels Payments Payments FX 19.9 19.5 2% Banking and other payments 14.3 14.3 0% • NII largest growth factor, driven by UK and US Banki
Slide 8: Income performance
120 100 Income performance Strong FX and cross currency payments growth excluding Naira, but total income impacted by Naira reductions 80 (all figures in £m) 73 72 NGN 65 15 3 Period to Period • Total Income grew by 25%, 60 NII 22 Growth Rates driven by Core FX and Cross Other Revenue (1) 16 Currenc
Slide 9: Cost base supports profitable growth
Cost base supports profitable growth Well managed costs drive economies of scale and effectiveness of the platform 60 OpEx (all figures in £m) Total Costs exc. Non-recurring OpEx • Expenses grew in line with three-year trends, at 30% YoY +23% 8 13 • Action was taken to reduce +40% 5 expenditure in Q
Slide 10: Continued investment in CAB Payments' future
Continued investment in CAB Payments’ future Increased, focussed, capital investments to drive scalability and resilience FY’21 FY’22 FY’23 ⚫ Historical investment focused on building platform ⚫ Future investments for growth and globalisation Capex (£m) 4.6 4.9 7.4 - Amsterdam and US licences and of
Slide 11: Capital
Capital The group’s overall and available capital has significantly increased over the past 3 years whilst seeing increased capital allocation to operational risk and credit exposures (all figures in £m) Operational Risk, 28.6 , 27% Available Growth Capital, • We have the balance sheet of a 33.9 , 3
Slide 12: Financial summary
Financial summary Core business continues to deliver strategic plan • Growth delivery o Key metrics all increased on 2022: Gross Income (+25%), Adjusted EBITDA (+18%) and Operating Free Cash (+14%) o Core FX and Cross Currency Payment book grew 28% excluding highly volatile NGN revenues • Continued
Slide 13: Strategic and operational review
Strategic and operational review Bhairav Trivedi, CEO 13
Slide 14: Attractive market
Attractive market Large TAM with structural shift from legacy banks to specialists Structural shift Independent • Large 15-20% 15-25% 25-40% specialists - Over $200TN in cross border flows (e.g. CAB) - Roughly $10TN flowing into emerging markets and roughly $2TN in our target market - At £34BN in fl
Slide 15: Client segments
Client segments All four client segments are growing; this is even clearer without Naira 80 Segment revenue (£m) Revenue Growth Rev Growth ex NGN 2023 v 2022 H223 v H222 2023 v 2022 H223 v H222 Major Market Banks 4 3 6% (35%) 46% 37% 3 IDO 60 8% (43%) 58% 35% NBFI and fintech 23 22 13 EMFI 11% (15%)
Slide 16: Network
Network Our global network of banking partners is large and growing 2022 v 2023 2021 2022 2023 growth Payment • Local and regional banks who allow us to 159 186 218 17% source FX and deliver funds locally partners • Bid on inbound currency flows, allowing CAB Liquidity 82 101 113 12% Payments to sou
Slide 17: Corridor performance
Corridor performance Volume was flat and margins grew sustainably; diversification improved Volume and take rate by corridor Corridor concentration as % of revenue Volume (£BN) Take rate (%) Revenue (£m) 2020 2021 2022 2023 2021 2022 2023 2021 2022 2023 2021 2022 2023 Top 5 37% 48% 49% 45% Total 23.
Slide 18: Positive global impact
Positive global impact CABP continues to deliver social impact 2023 flows1 Driving financial inclusion Development Providing backbone to make financial services accessible and affordable aid flows £3.1bn Formalising financial markets Flows into low and Digital payments via UK regulated bank provide
Slide 19: Summary
Summary Moving money where it is needed • Execution of strategy continues to deliver growth in revenue, underlying profit and cash generation • Good progress on adding additional high-quality clients o Focus on income optimisation • Concentrating on further diversification o Client base o Currency c
Slide 20: Leading B2B FX & payments platform for flows between DMs and EMs
Leading B2B FX & Strong, sustainable High profitability & ESG leadership payments platform growth cash generation & commitment for flows between DMs and EMs 20
Slide 21: Appendix
Appendix 21
Slide 22: Alternative Performance Measures
Alternative Performance Measures APM How the metric is used Calculation Definition CAB Payments uses Gross Income, As a fast-growing organisation, the Group’s focus is on driving Gross income is the same as the reported Total income, net of alternative performance Total Income or income growth throu
Slide 23: Capital
Capital The group’s overall and available capital has significantly increased over the past 3 years whilst seeing increased capital allocation to operational risk and credit exposures Operational risk Standardised calculation for risk as per Basel 3, based on prior 3 years revenue Local bank account
Slide 24: What do we do?
What do we do? CABP’s proprietary network removes friction from traditional payment rails B C A A F F E D Traditional international payments - multiple hops based CAB Payments single hop using dedicated emerging market on regional bilateral arrangements infrastructure 24
Slide 25: Blue chip clients
Blue chip clients CAB Payment’s segments include many of the most important players in emerging market payments • Includes UN organisations, development banks and western governments along with charities IDOs • Tend to be FX clients sending aid flows and budgets into market where they work Major Mar
Slide 26: Platform
Platform CAB Payments has three main EM product platforms, each with a distinct value proposition • Desktop and mobile trading platform to manage FX exposures and monitor market fluctuations Real-time access to • Real-time, competitive pricing and real-time data feeds;. CAB Payments covers many comp
Slide 27: Thank you
Thank you This material is for your information and should not be distributed further The views expressed are the views of CAB Payments Holdings plc and are subject to change based on market and other conditions and should not be taken as statements of policy or intent. There is no representation or