Euronet Worldwide, Inc. · NASDAQ:EEFT
Euronet Worldwide — Q3 2023 Earnings Presentation
32 slides from Euronet Worldwide's earnings presentation, Oct 20, 2023
Slide 1: Third Quarter 2023 Financial Results
Third Quarter 2023 Financial Results Michael J. Brown | Chairman & CEO Rick L. Weller | EVP & CFO Scott Claassen | General Counsel Euronet | www.euronetworldwide.com 1
Slide 2: Forward Looking Statements
Forward Looking Statements Statements contained in this news release that concern Euronet's or its management's intentions, expectations, or predictions of future performance, are forward-looking statements. Euronet's actual results may vary materially from those anticipated in such forward-looking
Slide 3: Defined Terms
Defined Terms Unless specifically noted otherwise within this presentation, the following terms are hereby defined as follows: Constant currency measures are computed as if foreign currency exchange rates did not change from the prior period. This information is provided to illustrate the impact of
Slide 4: Financial Highlights Third Quarter 2023
Financial Highlights Third Quarter 2023 Rick L. Weller | EVP & CFO Euronet | www.euronetworldwide.com 4 121322-1
Slide 5: Financial Highlights Third Quarter 2023
Financial Highlights Third Quarter 2023 • Revenue – $1,004.0 million • Adjusted EBITDA - $212.5 million • 8% increase from $931.3 million for Q3 2022 • 0% increase from $211.6 million for Q3 2022 • 3% increase on a constant currency basis • 4% decrease on a constant currency basis • Operating Income
Slide 6: Balance Sheet Overview
Financial Highlights Third Quarter 2023 Balance Sheet Overview USD 6/30/2023 9/30/2023 (in millions) Unrestricted Cash $ 1,137.5 $ 1,074.4 ATM Cash 776.3 603.5 Settlement Assets 1,068.9 1,242.3 Total Assets 5,221.0 5,162.9 Total Debt 1,760.8 1,717.3 Total Debt to Trailing Twelve Month Adjusted EBITD
Slide 7: Same Quarter Prior Year Comparison
Financial Highlights Third Quarter 2023 Same Quarter Prior Year Comparison USD (in millions) Revenue Operating Income Adjusted EBITDA Q3 2022 Q3 2023 Q3 2022 Q3 2023 Q3 2022 Q3 2023 EFT Processing $ 319.5 $ 345.8 $ 116.4 $ 104.8 $ 139.5 $ 128.7 % Change 8% -10% -8% epay 248.9 264.5 29.1 28.3 30.5 30
Slide 8: Same Quarter Prior Year Comparison – Constant Currency
Financial Highlights Third Quarter 2023 Same Quarter Prior Year Comparison – Constant Currency* USD (in millions) Revenue Operating Income Adjusted EBITDA Q3 2022 Q3 2023* Q3 2022 Q3 2023* Q3 2022 Q3 2023* EFT Processing $ 319.5 $ 326.5 $ 116.4 $ 99.4 $ 139.5 $ 122.1 % Change 2% -15% -12% epay 248.9
Slide 9: Business Update
Business Update Michael J. Brown| Chairman & CEO Euronet | www.euronetworldwide.com 9 121322-1
Slide 10: Diversity of Euronet Earnings
Diversity of Euronet Earnings Adjusted EBITDA by Segment* Digital Initiatives Money EFT ATMs • POS Acquiring Transfer 35% • Digital money transfers 34% • Dandelion • Ren • Digital distribution of epay content epay EFT Other 19% 12% *Estimated full year 2023 Adjusted EBITDA % and excludes Corporate E
Slide 11: International Cards Used vs. Eurocontrol
International Cards Used vs. Eurocontrol Euronet % change vs. 2019 September Eurocontrol % change vs. 2019 June Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 There is not an abrupt shift in consumer behavior from cash to card, but rather economic pressures have resulted in lower tra
Slide 12: Consumer Behavior at the ATM
Consumer Behavior at the ATM DCC Opt-In Rates Average Withdrawal Amount per Transaction Jan-19 Sep-23 Series2 Euronet | www.euronetworldwide.com 12
Slide 13: All International Cards Used Cross-Border on ATMs
All International Cards Used Cross-Border on ATMs Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2019 2022 2023 Euronet | www.euronetworldwide.com 13
Slide 14: Non-European Issued Cards Used on ATMs by Month
Non-European Issued Cards Used on ATMs by Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2019 2022 2023 Euronet | www.euronetworldwide.com 14
Slide 15: European-Issued Cards Used Cross Border on ATMs by Month
European-Issued Cards Used Cross Border on ATMs by Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2019 2022 2023 Euronet | www.euronetworldwide.com 15
Slide 16: Key Economic Indicators in Europe
Key Economic Indicators in Europe Euronet | www.euronetworldwide.com 16
Slide 17: Cards Used vs. Eurocontrol
Cards Used vs. Eurocontrol Euronet % change vs. 2019 Eurocontrol % change vs. 2019 Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Euronet | www.euronetworldwide.com 17
Slide 18: EFT Business Segment
Business Segment EFT • New Markets Entered • POS Acquiring in Spain and Portugal • Signed: • ATM deployment agreement with Warsaw Chopin Airport Poland • Merchant Services agreement with 3,100 new merchants • Network Participation Agreements (NPAs) with 23 new merchants in Poland for ATM deposits •
Slide 19: EFT Active and Installed ATM Rollforward
Business Segment EFT • Active ATM Rollforward Active ATM Rollforward Sequential ATMs at Beginning of Quarter 51,402 Traditional High Value ATM Changes Independently Deployed ATMs 532 Outsourcing ATMs 425 Low-Margin India ATMs (12) Seasonally Re-activated / (De-activated) ATMs (851) ATMs at September
Slide 20: epay Business Segment Highlights
Business Segment Highlights • Launched: • Expanded Sony Digital Code Server technology platform to Europe and Asia • NordVPN launched in 20 countries with Startselect, the largest digital code reseller in Europe • Digital-branded content in Currys online, a consumer electronics retailer in the UK •
Slide 21: Money Transfer Business Segment
Business Segment Money Transfer • Network Growth: • Our network reaches: • 194 countries and territories • 540,000 total locations, a 6% increase vs. 3Q 2022 • 4.0 billion bank accounts and 1.9 billion wallet accounts • Correspondent Expansion • Launched 28 correspondents in 21 countries • Including
Slide 22: Dandelion Solution
Solution • Targeting the $156 trillion cross-border payment market • Dandelion customers are now sending to 141 of Ria’s 194 network countries • Signed: • Agreement with Sendwave, a leading digital money service business in the North America, Europe and UK • Agreement with Flash Payments - an innova
Slide 23: Ren Solution
Solution • Launched: • Union Pay International debit cards for Standard Chartered Bank in Hong Kong as part of the ongoing payments modernization project • P2P real time payment transactions for East West Bank in the Philippines • QR based merchant acquiring for Bank of Philippine Islands on Instapa
Slide 24: EFT CAGR & Value Analysis
EFT CAGR & Value Analysis Euronet has a long-term demonstrated record of double-digit earnings growth Yet, market has recognized less than half of our earnings in the increase in share price 10 Year CAGR Comparison 10 Year % Change as of October 16 16.00% 150% 137% Current P/E Ratio • S&P 500: Expec
Slide 25: Benefits of Simplicity
Benefits of Simplicity • We have studied companies that simplified their guidance and found very favorable investor recognition Companies S&P Companies S&P Simplification helps eliminate all the variables of complexity Euronet | www.euronetworldwide.com 25
Slide 26: Reformatting Guidance Communication
Reformatting Guidance Communication 1. Euronet has proven its ability to consistently generate very attractive earnings growth both short term and long term • Achieved with the same core executive leadership team since 2007 2. The company’s breadth is a strength and a weakness • Diversity in product
Slide 27: Summary
Summary • No abrupt shift in Consumer behavior from Cash to Card • Both Ren and Dandelion signed new agreements and launched new products during the quarter • Euronet generated $146 million of cash flows from operations • EFT international transactions were back in sync with the Eurocontrol travel d
Slide 28: Reconciliation of Net Income to Operating Income and Adjusted EBITDA
Reconciliation of Net Income to Operating Income (Expense) and Adjusted EBITDA Three months ended September 30, 2023 EFT Money Corporate Processing epay Transfer Services Consolidated Net income $ 104.2 Add: Income tax expense 43.0 Add: Total other expense, net 19.8 Operating income (expense) $ 104.
Slide 29: Reconciliation of Net Income to Operating Income and Adjusted EBITDA
Reconciliation of Net Income to Operating Income (Expense) and Adjusted EBITDA Three months ended September 30, 2023 EFT Money Corporate Processing epay Transfer Services Consolidated Net income $ 104.2 Add: Income tax expense 43.0 Add: Total other expense, net 19.8 Operating income (expense) $ 104.
Slide 30: Reconciliation of Revenue and Adjusted EBITDA to Constant Currency by Segment
Reconciliation of Revenue and Adjusted EBITDA to Constant Currency Amounts by Segment Three months ended ended September 30, 2023 EFT Money Corporate Processing epay Transfer Services Consolidated Revenue $ 345.8 $ 264.5 $ 395.9 $ (2.2) $ 1,004.0 Add: Estimated foreign currency impact * (19.3) (12.0
Slide 31: Reconciliation of Adjusted Earnings per Share
Reconciliation of Adjusted Earnings per Share Three Months Ended September 30 2023 2022 Net income attributable to Euronet Worldwide, Inc. $ 104.2 $ 97.7 Foreign currency exchange loss 8.8 15.8 Intangible asset amortization 5.5 6.8 Share-based compensation 12.7 10.3 Income tax effect of above adjust
Slide 32: Thank you
Thank you Euronet | www.euronetworldwide.com 32