Lesaka Technologies, Inc. · NASDAQ:LSAK
Lesaka Technologies — Net1 UEPS Technologies — Q4 2018 Earnings Presentation
34 slides from Lesaka Technologies's earnings presentation, September 2018
Slide 1: Q4 2018 Investor Presentation
Q4 2018 Investor Presentation www.net1.com
Slide 2: Safe Harbor Statement
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 factors that could cau
Slide 3: Defined Terms
Defined Terms Unless specifically noted otherwise within this presentation, the following terms are hereby defined as follows: Constant Currency: We analyze our results of operations both in U.S. dollars, as presented in the consolidated financial statements, and supplementally in ZAR, because ZAR i
Slide 4: Performance Summary
Performance Summary Preliminary Full Year Fiscal 2018 company highlights include: • Revenue of $613 million and Fundamental EPS of $2.00 ($1.56 excl. fair value adjustment) • Adjusted EBITDA of $127 million; Free Cash Flow of $123 million • Added 0.9 million new EPE accounts. At June 30, 2018, we ha
Slide 5: Financial Highlights
FINANCIAL HIGHLIGHTS Fourth Quarter and Full Year 2018
Slide 6: Q4 2018 Financial Report: 2018 Financial Highlights
Q4 2018 Financial Report 2018 Financial Highlights • Revenue - $613 million • 0% increase from $610 million in 2017 • 6% decrease on a constant currency basis • Adjusted EBITDA - $127 million • 15% decrease from $150 million in 2017 • 21% Adjusted EBITDA Margin compared to 25% in 2017 • Fundamental
Slide 7: Q4 2018 Financial Report: Q4 2018 Financial Highlights
Q4 2018 Financial Report Q4 2018 Financial Highlights • Revenue - $149 million • 4% decrease from $155 million in Q4 2017 • 16% decrease on a constant currency basis • Adjusted EBITDA - $24 million • 31% decrease from $35 million in Q4 2017 • 16% Adjusted EBITDA Margin compared to 18% in Q4 2017 • F
Slide 8: Business Segment Results – Fourth quarter
Q4 2018 Financial Report Business Segment Results – Fourth quarter Q4 constant currency SATP Revenue Q4 USD ITP Revenue R 893 60 1,000 R 805 R 732 55 800 $ 47 USD Millions 50 $ 45 ZAR Millions $ 44 600 45 11% 400 (18%) 40 (5%) (3%) 200 35 30 - 2016 2017 2018 2016 2017 2018 • SATP constant currency r
Slide 9: Business Segment Results – Fiscal 2018
Q4 2018 Financial Report Business Segment Results – Fiscal 2018 USD Revenue Operating Income Operating Margin (Millions) F2018 F2017 F2018 F2017 F2018 F2017 SATP $ 268 $ 249 $ 43 $ 59 16% 24% % Change* 0% (33%) ITP 180 177 (12) 14 (7%) 8% % Change* (5%) (185%) FIAT 222 236 55 58 25% 24% % Change* (1
Slide 10: Business Segment Results – Fourth quarter
Q4 2018 Financial Report Business Segment Results – Fourth quarter USD Revenue Operating Income Operating Margin (Millions) Q4 2018 Q4 2017 Q4 2018 Q4 2017 Q4 2018 Q4 2017 SATP $ 64 $ 68 $4 $ 15 7% 22% % Change* (18%) (75%) ITP 44 45 2 2 5% 4% % Change* (16%) (10%) FIAT 54 56 14 14 26% 26% % Change*
Slide 11: Balance Sheet Overview
Q4 2018 Financial Report Balance Sheet Overview USD (Millions) June 30, 2018 June 30, 2017 Cash $ 90 $ 259 Investments and Equity Accounted Investments 299 52 Total Assets 1,219 1,451 Total Equity 738 600 Total Debt 50 16 Book Value / Share 13.03 10.65 Net Cash / Share $ 0.70 $ 4.30 Debt / Equity 0.
Slide 12: Key Investments
Q4 2018 Financial Report Key Investments % held Balance Sheet Value (June 2018) Equity Accounted: Bank Frick 35% $48 million >$52 million (1) Finbond (JSE listed) 28.5% $31 million $74 million (2) OneFi 25% $8 million $25 - $35 million (3) Investments: Cell C 15% $173 million >$173 million (4) MobiK
Slide 13: Business Overview: South African Transaction Processing
BUSINESS OVERVIEW SOUTH AFRICAN TRANSACTION PROCESSING Fourth Quarter 2018
Slide 14: SATP Segment Highlights
SATP Segment Highlights Q4 2018 Financial Highlights • Revenue - $64 million • 6% decrease from $68 million in Q4 2017 • 18% decrease on a constant currency basis • CPS paid 82 % fewer beneficiaries than in Q3 2018, resulting in revenue being lower by 81% and considerable operating loss incurred. Aw
Slide 15: SATP Segment Highlights (cont.)
SATP Segment Highlights (cont.) Q4 2018 Key Trends • Social Grant Distribution • Significant decrease in the average number of grants paid during the quarter • CPS has extended its full support to government and SA citizens and in the interim continues to deliver uninterrupted service Number of Soci
Slide 16: SATP Segment Highlights
SATP Segment Highlights Q4 2018 Key Trends EasyPay Number of EasyPay Transactions 150 145 140 135 Millions 130 125 120 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Total 16
Slide 17: Business Overview: International Transaction Processing
BUSINESS OVERVIEW INTERNATIONAL TRANSACTION PROCESSING Fourth Quarter 2018
Slide 18: ITP Segment Highlights
ITP Segment Highlights Q4 2018 Financial Highlights • Revenue - $44 million • 3% decrease compared to $45 million in Q4 2017 • Mastertrading working capital finance operations ceased in Q2 2018 • Operating profit - $2 million • Consistent with Q4 2017 18
Slide 19: ITP Segment Highlights
ITP Segment Highlights Q4 2018 Key Trends • South Korea and Rest of the World (ROW) Growth • South Korea revenue starting to show sequential improvement, though margins will lag by 1-2 quarters • ROW revenue impacted by volatility in cryptocurrency trading and elimination of working capital finance
Slide 20: Business Overview: Financial Inclusion & Applied Technologies
BUSINESS OVERVIEW FINANCIAL INCLUSION & APPLIED TECHNOLOGIES Fourth Quarter 2018
Slide 21: FIAT Segment Highlights
FIAT Segment Highlights Q4 2018 Financial Highlights • Revenue - $54 million • 4% decrease from $56 million in Q4 2017 • 17% decrease on a constant currency basis • Operating Income - $14 million • 5% decrease from $14 million in Q 2017 • 17% decrease on a constant currency basis • EPE Accounts • 2.
Slide 22: FIAT Segment Highlights
FIAT Segment Highlights Q4 2018 Key Trends Number of EPE Accounts Value of Loans Outstanding 1,400 Millions 3.0 1,200 Millions 1,000 2.0 800 600 1.0 400 0.0 200 0 Outstanding Capital Deferred Service Fees Number of SmartLife Policies 5,00,000 4,00,000 3,00,000 2,00,000 1,00,000 0 22
Slide 23: Net1 Opportunities
NET1 OPPORTUNITIES ——— NET1 74
Slide 24: South Africa – Biggest Near Term Opportunity
South Africa – Biggest Near Term Opportunity SOUTH AFRICA IS NET1’S CORE MARKET, ONE IN WHICH WE HAVE MAXIMUM EXPERTISE, INFRASTRUCTURE AND DISTRIBUTION. WE ARE EXPANDING OUR CUSTOMER BASE AS WELL AS THE PRODUCTS PROVIDED TO THAT BASE. Q4 2018 PROGRESS UPDATES: EPE Expect growth to be driven by new
Slide 25: Blockchain and Cryptocurrencies
Blockchain and Cryptocurrencies Q4 2018 PROGRESS UPDATES: It is a little known or understood fact that the UEPS technology has always Net1/ IPG / Bank Frick been based on a form of blockchain • are combining expertise and abilities to technology. We have always referred implement a next generation,
Slide 26: IPG Consolidation and Expansion
IPG Consolidation and Expansion IPG PLAYS AN INTEGRAL ROLE IN PROVIDING END-TO-END SOLUTIONS FOR ISSUING, ACQUIRING AND PROCESSING GLOBALLY. Q4 2018 PROGRESS UPDATES: Card Processing Volume ($Mil) 120 • Consolidation of various business units largely 100 complete with appropriate management structur
Slide 27: OneFi – Our 25% investment in neobank
OneFi – Our 25% investment in neobank OneFi - first Sub-Saharan African neobank offering loans, fixed savings and payments services via Paylater, a proprietary 100%-mobile app platform. Aims to provide financial services to the next billion through expansion into West Africa in calendar 2019 (curren
Slide 28: Summary & Outlook
SUMMARY & OUTLOOK Fiscal Year 2019
Slide 29: Fiscal 2019 Guidance
Fiscal 2019 Guidance • 2019 GUIDANCE: Fundamental EPS of at least $1.05 assuming: • EPE accounts remain stable at 2.5 million and at current ARPU • DNI revenue and earnings growth of 10% • South Korea full year results consistent with 2018, and • Constant currency base of ZAR 12.70/$1, 56.8 million
Slide 30: Appendix A
Appendix A ——— NET1 Sar 5
Slide 31: Reconciliation of non-GAAP measures
Reconciliation of non-GAAP measures Fourth quarter – Fundamental Net Income and EBITDA Three months ended Jun-18 Jun-17 $ '000 EPS, basic $ '000 EPS, basic Fundamental net income (Non-GAAP) 12,687 0.22 23,185 0.20 Net unrealized income on asset available for sale, net of tax 4,167 - Impairment loss
Slide 32: Reconciliation of non-GAAP measures
Reconciliation of non-GAAP measures Year to date – Fundamental net income Year ended Jun-18 Jun-17 $ '000 EPS, basic $ '000 EPS, basic Fundamental net income (Non-GAAP) 113,823 2.00 94,721 1.74 Net unrealized income on asset available for sale, net of tax (25,199) - Impairment loss (20,917) - Amorti
Slide 33: Reconciliation of non-GAAP measures
Reconciliation of non-GAAP measures Year to date – EBITDA Year ended Jun-18 Jun-17 $ '000 EPS, basic $ '000 EPS, basic Net income attributable to net1 (GAAP) 39,150 0.69 72,954 1.34 Non-controlling interest (880) 1,694 Earnings from equity-accounted investments (11,730) (2,664) Interest income (17,8
Slide 34: Thank you!
4 m - — Thank you! www.netl.com
Net1 UEPS Technologies — Q4 2018 Earnings Presentation on 6ix