Lesaka Technologies, Inc. · NASDAQ:LSAK
Lesaka Technologies — Q2 FY2023 Earnings Presentation
36 slides from Lesaka Technologies's earnings presentation, Feb 8, 2023
Slide 1: Q2 FY23 Results Presentation
FY23 Q2 Results 1 Q2 FY23 Results Presentation 8 February 2023
Slide 2: Agenda
FY23 Q2 Results 2 Agenda Performance Highlights Chris Meyer – Group CEO Merchant Division Steven Heilbron – CEO Connect & Head of Merchant Division Consumer Division Lincoln Mali – CEO Southern Africa Financial Performance Naeem Kola – Group CFO Outlook Chris Meyer – Group CEO
Slide 3: Business overview | The Lesaka platform offers growth and broader reach
FY23 Q2 Results 3 Business overview | The Lesaka platform offers growth and broader reach B2B | Merchant B2C | Consumer Formal market Informal market Informal market VAS VAS Banking Bill &supplier payments Bill &supplier payments Lending Digitization of cash Digitization of cash Insurance Working ca
Slide 4: Performance Highlights
Performance Highlights
Slide 5: Exceeding guidance – delivering to plan
FY23 Q2 Results 5 Exceeding guidance – delivering to plan FY23 Q2: A landmark quarter in the transformation of Lesaka • Secular growth trends remain in-tact • Particularly adoption of card payments & demand for credit by MSMEs Merchant Consumer 1 in the informal sector Growth & Profitable • Rapid ro
Slide 6: Financial highlights for FY23 Q2
FY23 Q2 Results 6 Financial highlights for FY23 Q2 Group Revenue Group Adjusted EBITDA Guidance {R2.0bn - R2.3bn} R2 383m $136m Guidance {R116m - R123m } R130m $7.4m 3.3x R2 138m R72m Net Debt to EBITDA ratio (annualized) FY23 Q1: 5.9x R160m $9.1m R15m R135m R10m $0.6m (R67m) (R24m)² (R40m) ($2.3m)
Slide 7: Merchant Division
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Slide 8: Expanding Merchant Division performs ahead of expectations
FY23 Q2 Results 8 Expanding Merchant Division performs ahead of expectations Driven by The Connect Group Merchant revenue for the quarter Merchant Segment Adjusted EBITDA¹ for the quarter 12% Q2oQ1 19% Q2oQ1 $109.8m $120.6m $1.0m $7.9m $9.1m $14.5m R1 881m R2 113m R15m R135m R160m R223m FY22 Q2 FY23
Slide 9: Offering innovative solutions to the formal & informal sectors
FY23 Q2 Results 9 Offering innovative solutions to the formal & informal sectors Building a leading position in a growing & underserved market Digitization of cash Value-Added Services¹ ~4 300 ~64 500 Cash vaults Devices 1 deployed FY23 Q2 ▲ 11% (yoy) FY23 Q2 ▲ 47% (yoy) Card Acquiring 2 Merchant Cr
Slide 10: Merchant MSME
FY23 Q2 Results 10 Merchant MSME Growth momentum carries through driven by strong performance in card acquiring & merchant credit Kazang VAS throughput Cash settlements Card acquiring¹ Merchant Credit² ~2 900 40% yoy 9% yoy 106% yoy ~1 900 ~200 71% yoy R 4.8bn R 5.8bn R 6.8bn R 27.0bn R 27.5bn R29.5
Slide 11: Partnerships enabling supply chain payments at Merchant locations
FY23 Q2 Results 11 Partnerships enabling supply chain payments at Merchant locations
Slide 12: Merchant Enterprise
FY23 Q2 Results 12 Merchant Enterprise Stable enterprise offering VAS throughput (Rm) Bill payment transaction volumes (‘000s) Payment devices deployed ↓10% yoy ↑4% yoy ↓5% yoy 13 235 8 646 8 522 7 914 9 763 >100% QoQ 7 761 5 225 3 809 3 700 1 151 1 184 1 055 745 739 766 4 524 4 442 4 298 Prepaid el
Slide 13: Consumer Division
Consumer Division
Slide 14: Return of Consumer Division to profitability
FY23 Q2 Results 14 Return of Consumer Division to profitability Strong & stable footing, positioned for growth Consumer Segment Adjusted EBITDA (Rm) FY22 Q1 FY22 Q2 FY22 Q3¹ FY22 Q4² FY23 Q1 FY23 Q2 Delivery against $0.6m R10m strategic focus areas (R137m) (R67m) (R14m) (R26m)² (R24m) ($1.2m) ($9.4m
Slide 15: Offering straight forward & cost-effective Financial Services
FY23 Q2 Results 15 Offering straight forward & cost-effective Financial Services Strong & stable base to grow our customer base & deepen our product offering BANKING SHORT-TERM LOANS PERSONAL INSURANCE ARPU¹▲ ~R 69 ~R 71 ~R 74 ~4.5m FY22 Q2 FY23 Q1 FY23 Q2 Transactions through our ATMs Short-term lo
Slide 16: Financial Performance
Financial Performance
Slide 17: Basis for preparation of combined accounts for 3 months to 31 December 2022
FY23 Q2 Results 17 Basis for preparation of combined accounts for 3 months to 31 December 2022 FY22 Q2 FY23 Q1 FY23 Q2 1 October 2021 31 December 2021 14 April 2022 1 July 2022 1 October 2022 31 December 2022 Acquisition of the Connect Group Prior to acquiring Connect Includes Connect for the full q
Slide 18: Financial performance overview FY23 Q2
FY23 Q2 Results 18 Financial performance overview FY23 Q2 Group revenue Group Adjusted EBITDA/(loss) Operating income/(loss) before PPA Operating (loss)/income R130m amortization of acquired investments R2 383m (R145m) (R80m) (R38m) R2 138m R29m R72m (R145m) (R13m) (R84m) R479m FY22 Q2 FY23 Q1 FY23
Slide 19: Income Statement for the quarter (FY23 Q2, FY23 Q1 & FY22 Q2)
FY23 Q2 Results 19 Income Statement for the quarter (FY23 Q2, FY23 Q1 & FY22 Q2) ZAR’000 $’000 Q2 - ended 31 December FY23 Q2 FY23 Q1 % Growth FY22 Q2 FY23 Q2 FY23 Q1 % Growth 1 FY22 Q2 Average exchange rate for conversion from ZAR to $ R17.52 R17.13 2% R15.38 R17.52 R17.13 2% R15.38 Revenue 2 383 3
Slide 20: Segmental EBITDA analysis for the quarter
FY23 Q2 Results 20 Segmental EBITDA analysis for the quarter (FY23 Q2, FY23 Q1 & FY22 Q2) ZAR’000 $’000 Q2 - ended 31 December FY23 Q2 FY23 Q1 % Growth¹ FY22 Q2 FY23 Q2 FY23 Q1 % Growth¹ FY22 Q2 Average exchange rate for conversion from ZAR to $ R17.52 R17.13 2% R15.38 R17.52 R17.13 2% R15.38 Revenu
Slide 21: Group Adjusted EBITDA (ZARm) | Turnaround
FY23 Q2 Results 21 Group Adjusted EBITDA (ZARm) | Turnaround FY22 Q2 FY22 Q3¹ FY22 Q4 FY23 Q1 FY23 Q2 FY23 Q2 vs. FY23 Q1 82% R130.4m $7.4m FY23 Q2 vs. FY22 Q2 >100% R60.6m $3.9m R71.9m $4.2m R8.8m $0.6m R107.5m $6.9m R111.3m $6.5m R169.9m $9.7m (R51.7m) ($3.4m) (R30.1m) ($1.9m) (R46.8m) ($3.0m) (R3
Slide 22: Generating positive cash flow at an operational level
FY23 Q2 Results 22 Generating positive cash flow at an operational level Ordinary working capital requirements stable & loan book growth largely self-funded Summary Group cash flow (Rm) Dec 2022 Sep 2022 Ordinary working capital requirements stable Cash generated from/(utilized in) • Ordinary workin
Slide 23: CAPEX primarily driven by growth
FY23 Q2 Results 23 CAPEX primarily driven by growth Capex (Rm) FY23 Q2 FY23 Q1 Capex (70) (77) R70m R27m | Kazang • Point-of-sales devices have a 36-month useful life • Highly cash generative / short pay-back period R34m | Cash vaults R64m Growth • Large upfront cost, with lower refurb cost in the f
Slide 24: Outlook on stock-based compensation charges (SBC)
FY23 Q2 Results 24 Outlook on stock-based compensation charges (SBC) (ZARm) Stock-based compensation charges (ZARm) • Current level of SBC reflects higher amounts due to senior R135m R136m executive sign-on, that will vest over the next 3-years linked to R17m R30m performance R109m • Higher FY23, Q2
Slide 25: Outlook
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Slide 26: Re-affirming our outlook for FY23
FY23 Q2 Results 26 Re-affirming our outlook for FY23 FY23 FY23 Q3 Outlook Full year Outlook 3 Revenue R 2.5bn - R 2.8bn R 8.7bn - R 9.3bn Merchant Segment Adjusted EBITDA 1,2 R 140m - R 145m R 550m - R 565m Consumer Segment Adjusted EBITDA 1 R 40m - R 45m R 95m - R 110m Group costs (R 45m) – (R 40m)
Slide 27: Thank you
FY23 Q2 Results 27 Thank you
Slide 28: Appendix
Appendix
Slide 29: Our Mission is to bring financial inclusion to Consumers & Merchants in Southern Africa
FY23 Q2 Results 29 Our Mission is to bring financial inclusion to Consumers & Merchants in Southern Africa Innovative solutions to merchants to grow, Enabling access to financial services & cash manage & digitize their businesses & capital for individuals in informal communities
Slide 30: Income Statement for the half-year (HY23 & HY22)
FY23 Q2 Results 30 Income Statement for the half-year (HY23 & HY22) ZAR’000 $’000 Year to date ended 31 December 1H23 1H22 1H23 1H22 Average exchange rate for conversion from ZAR to $ R17.25 R14.97 R17.25 R14.97 Revenue 4 499 262 982 616 260 854 65 618 Expense (4 617 637) (1 291 876) (267 717) (86 2
Slide 31: Segmental EBITDA analysis for the half-year (HY23 & HY22)
FY23 Q2 Results 31 Segmental EBITDA analysis for the half-year (HY23 & HY22) ZAR’000 $’000 Six months ended 31 December FY23Q2 FY22 Q2 FY23 Q2 FY22 Q2 Average exchange rate for conversion from ZAR to $ R17.52 R15.38 R17.25 R14.97 Revenue Consumer 525 001 506 193 30 438 33 803 Merchant 3 974 261 476
Slide 32: Disaggregation of revenue (ZAR'000)
FY23 Q2 Results 32 Disaggregation of revenue (ZAR’000) Revenue (from external customers) Revenue breakdown (from external customers) ↑11% Q2oQ1 Merchant Consumer ↑12% Q2oQ1 ↑5% Q2oQ1 2 383 367 2 113 025 257 029 270 342 2 137 671 255 908 1 880 642 21 457 2 172 2 538 2 210 21 238 137 290 66 758 25 854
Slide 33: Disaggregation of revenue ($'000)
FY23 Q2 Results 33 Disaggregation of revenue ($’000) Revenue (from external customers) Revenue breakdown (from external customers) ↑9% Q2oQ1 Merchant Consumer ↑10% Q2oQ1 ↑3% Q2oQ1 136 068 124 786 120 634 16 639 15 434 1 225 109 782 165 15 004 124 1 245 7 838 129 3 897 1 476 1 223 4 569 5 181 4 711 2
Slide 34: Reconciliation of non-GAAP measures
FY23 Q2 Results 34 Reconciliation of non-GAAP measures Q2 - ended 31 December FY23 Q2 FY22 Q2 FY23 Q2 FY22 Q2 ZAR’000 EPS, basic ZAR’000 EPS, basic $’000 EPS, basic $’000 EPS, basic Average exchange rate for conversion from ZAR to $ R17.52 R15.38 R17.52 R15.38 Fundamental net loss (non-GAAP) (14 082
Slide 35: Defined terms
FY23 Q2 Results 35 Defined terms Segment We evaluate segment performance based on segment earnings before interest, tax, depreciation and amortization (“EBITDA”), adj usted for items mentioned in the Adjusted EBITDA next sentence. We do not allocate once-off items, stock-based compensation charges,
Slide 36: Safe harbor statement
FY23 Q2 Results 36 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 fac
Lesaka Technologies — Q2 FY2023 Earnings Presentation on 6ix