Eml Payments Ltd. · ASX:EML
Eml Payments — FY2023 Earnings Presentation
31 slides from Eml Payments's earnings presentation, Aug 29, 2023
Slide 1: Investor Presentation
29 August 2023 ASX Market Announcements 20 Bridge Street SYDNEY NSW 2000 INVESTOR PRESENTATION EML Payments Limited (ASX: EML) is pleased to provide investors with the following presentation ahead of its Annual Results and Investor briefing for the full year ended 30 June 2023. +61 (07) 3557 1100 Le
Slide 2: FY23 Financial Results
FY23 Financial Results. 29 August 2023
Slide 3: Contents
01 FY23 Highlights and Business Overview Kevin Murphy. 02 Strategic Review and Operational Priorities Contents. Interim Group CEO 03 Financial Performance Jonathan Gatt. Interim Group CFO 04 FY24 Focus 05 Q&A Important Notice This investor presentation has been prepared by EML Payments Limited ABN 9
Slide 4: FY23 Highlights and Business Overview
— 01 FY23 Highlights and Business Overview.
Slide 5: Strong Core Business Attributes
Strong Core Business Attributes. MARKET CUSTOMER Large and growing total addressable market 1,800+ clients across 32 markets Rationalising competition due to tightened capital markets Diversified and long-term client base and increased regulatory oversight globally Well positioned in several vertica
Slide 6: FY23 Headlines
FY23 Headlines. Challenged acquisitions, disappointing performance, ineffective leadership change in July 2022 and a long-range strategy coupled with a 01 . complex organisational restructure created a need for change. A new Chair, Board and Interim CEO joined in H2 FY23. 02 The long-range strategy
Slide 7: Outperformed Guidance
Outperformed Guidance . Returning to historical track record of meeting or beating earnings guidance FY23 GUIDANCE FY23 ACTUALS REVENUE $235 - $245m $254.2m up 4% on $245m UNDERLYING EBITDA1 $26 - $34m $37.1m up 9% on $34m STATUTORY NET LOSS AFTER TAX ($284.8m) includes after tax impairment of ($258
Slide 8: FY23 Highlights
FY23 Highlights. GROSS DEBIT VOLUME REVENUE SEGMENT PERFORMANCE $129.6bn $254.2m GROSS DEBIT VOLUME REVENUE UNDERLYING GROSS PROFIT1 up 62% PCP up 9% PCP GIFTING $1.7bn $74.6m $60.5m up 24% up 9% up 11% GROSS DEBIT VOLUME REVENUE UNDERLYING GROSS PROFIT1 UNDERLYING EBITDA2 CASH BALANCE GENERAL $12.8
Slide 9: Strategic Review and Operational Priorities
— 02 Strategic Review and Operational Priorities.
Slide 10: Need for change
Need for change. . . EML has faced several major challenges, stemming from European business PFS, which was acquired in March 2020 These challenges include: — A complex remediation process in PFS, unrelated to EML’s foundational businesses — Increased overhead and significant reduction in Group prof
Slide 11: Timeline
Timeline. — PFS remediation continues (after commencing mid 2021) — Appointment of a new CEO, significant leadership change and attrition 2022 — Development of long-range strategy Jul 22 – Jan 23 — Ongoing and elevation of remediation costs — Continued expansion of cost base — Significant share pric
Slide 12: Operational Priorities – Progress to Jun-23
Operational Priorities – Progress to Jun-23 Remediation Cost optimisation Growth in core business Talent New Board sub-committee Comprehensive cost Immediately implemented Strengthened Executive and established analysis complete treasury improvements to Leadership Team deliver $11m upside in FY24 PF
Slide 13: Strategic Review
Strategic Review. Per 16 April 2023 announcement, “...The strategic review will consider all options available to the Board including a potential sale of all or parts of the business in order to maximise shareholder value.” 01 EML Board and leadership team has made progress on its strategic review a
Slide 14: PFS Europe Structural Optimisation
PFS Europe Structural Optimisation. EML will operationally split its PFS Group into self-sufficient business units by the end of H1 FY2024 to unlock value PFSL– UK Domiciled EMI1 PCSIL – Ireland Domiciled EMI1 1 country with 1 regulatory relationship 30 countries 3 principal regulators and 27 passpo
Slide 15: Financial Performance
=MI.. — 03 Financial Performance.
Slide 16: Profit & Loss - Summary
Profit & Loss - Summary. Change Change $’millions FY23 FY22 $ % Revenue $254.2 $232.4 $21.8 9% Revenue up 9% on PCP Underlying Gross profit1 $174.2 $159.6 $14.6 9% — Excluding non-recurring revenue (net $14.2 million), revenue up 16% on PCP EBITDA ($2.6) $34.3 ($36.9) (108%) — Interest revenue $32.5
Slide 17: Impairments
Impairments. Acquisition under-performance vs expectations driving impairments PFS Group Sentenial Group Acquisition: $264.8 million 1 Acquisition: $102.9 million 1 — March 2020 — September 2021 — $40 million vendor loan notes included — Plus, a potential earnout of $62 million — Recent deterioratio
Slide 18: Segment Performance
Digital Payments Segment Performance. Gifting General Purpose Reloadable Digital Payments Incorporates global gift cards and incentives Incorporates PFS business Incorporates Sentenial GDV $1.7bn 24% GDV $12.8bn 3% GDV $115.1bn 73% (FY22: $1.3bn) (FY22: $12.4bn) (FY22: $66.6bn) — Incentives up 41% o
Slide 19: Interest investment returns continue to improve
Interest investment returns continue to improve. Interest income is a core part of our revenue mix Stored float at June 2023 Net interest income FY23 Central Bank Interest Rates1 FY22 FY23 Macro-economic events $1.4m $32.7m have led to a prolonged period of depressed rates vs CAD Other 20 year avera
Slide 20: Underlying overheads
Underlying overheads1. $137.4m 27% +27% $2.0m $137.4m $5.1m up 59% $7.8m $4.2m $1.0m $7.7m up 33% FY20 substantially $5.2m $5.1m up 545% clean of PFS and $3.7m Sentenial $7.8m $9.5m up 49% acquisitions. $108.4m $10.1m up 18% +41% ~$35m cost base $20.7m up 32% for PCSIL, Ireland +34% in underlying $7
Slide 21: Cashflow - Summary
Cashflow - Summary. Cash remained broadly stable despite operating losses Change Receipts from customers up $12.8 million on PCP $’millions FY23 FY22 $ — Receipts from customers has increased on PCP from recurring revenues as Receipts from customers 206.5 194.6 11.9 well as cash recoveries from the
Slide 22: EBITDA to Operating Cashflow
EBITDA to Operating Cashflow. Business generated ~$30m operating cashflow in FY23 in absence of one-off costs and individually significant items ($11.9m) $29.6m ($8.7m) ($6.4m) ($2.6m) ($2.6m) ($2.6m) Underlying Regulatory European fraud Restructuring and Litigation Tax/debt interest EBITDA Operatin
Slide 23: FY24 Focus
=MI.. — 04 FY24 Focus.
Slide 24: Operational Priorities – heading into FY24
Operational Priorities – heading into FY24. Remediation Cost optimisation Growth in core business Talent Complete PFSL, UK Organising all subsidiaries Continued treasury Complete leadership team separation and commence to be break even or better optimization on $2.6 billion rebuild growth post remed
Slide 25: =MI.. —
=MI.. — 05
Slide 26: Thank you
Thank you.
Slide 27: Other Information and Analyst Briefing Data
Other Information and Analyst Briefing Data.
Slide 28: Statutory reconciliation
Statutory reconciliation. FY23 FY22 FY23 FY22 $’000 $’000 % Growth % Growth $’000 $’000 Revenue 254,190 232,383 9% 12 months Net loss for the Period (284,824) (4,801) 5,833% Add back: Non-cash amortisation of AASB3 fair value uplift to bond Add back: Amortisation on acquisition intangibles, net of t
Slide 29: Summary Balance Sheet
Summary Balance Sheet1. 30 June 30 June Cardholder Corporate ($’millions) 2023 2022 Growth assets/liabilities balance sheet Cash and cash equivalents 71 74 (3%) - 71 Contract asset 63 50 26% - 63 Intangibles 192 448 (57%) - 192 Segregated funds and Bond investments 2,576 2,006 28% 2,567 10 Other ass
Slide 30: Glossary
MI. > ae O op) op) 9 CO
Slide 31: Glossary
Glossary. Abbreviation Meaning Abbreviation Meaning Abbreviation Meaning A2A Account-2-Account EBITDA Earnings Before Interest, Taxes, Depreciation OH Overheads and Amortisation. AASB Australian Accounting Standards Board PCI-DSS Payment Card Industry Data Security EBITDA is equivalent to the net pr