Tyro Payments Ltd. · ASX:TYR
Tyro Payments — FY2023 Earnings Presentation
30 slides from Tyro Payments's earnings presentation, Aug 29, 2023
Slide 1: Investor Briefing Full Year Results FY23
Investor Briefing Full Year Results FY23 29 August 2023 Tyro Payments Limited ABN 49 103 575 042 1
Slide 2: Disclaimer
Disclaimer This presentation is provided by Tyro Payments Limited ABN 49 103 575 042 and its controlled entities (variously, “Tyro”, “us”, “we”, “our” and “Group”) and is current at 29 August 2023. It is information given in summary form only and does not purport to be complete. It does not constitu
Slide 3: Agenda
Agenda 1. Business Update 2. Financial Results 3. Outlook 4. Q&A Jon Davey Prav Pala CEO CFO 3
Slide 4: Business Update
Business Update Jon Davey CEO 29 August 2023 4
Slide 5: Key themes
Key themes FY23 performance 1 Delivering our plan • Strong delivery of our three key strategic priorities: • enhancing our product portfolio. • pricing optimisation. • operating efficiency, including the delivery of our cost reduction program. 2 Growing sustainably • Ongoing focus on cost management
Slide 6: Driving sustainable growth
Driving sustainable growth FY23 performance highlights $42.6b $193.2m $42.3m $5.7m Transaction Value Gross Profit EBITDA Free Cash Flow1 +25% YoY +30% YoY +297% YoY +$39.8m YoY 42.3 21.9% 193.2 FY23 Margin 5.7 148.5 42.6 34.2 119.7 25.5 14.2 10.7 (34.1) Total Transaction Value (TTV) ($b) Gross Profi
Slide 7: Delivered our plan
Delivered our plan Strong execution of FY23 strategic priorities Enhanced Pricing Operating product portfolio optimisation efficiency Tyro Pro – Android Cost reduction payment terminal P No Cost EFTPOS P program P Tap & Save – Tyro Go – EFTPOS New operating model card reader P “Least Cost Routing” P
Slide 8: Sustainable growth
Sustainable growth Streamlined costs and operating leverage driving scale and growth Operating expenses to Gross Profit 105% 88% 93% 78% Significant improvement in Operating Leverage 193.2 30% increase in gross profit 148.5 $7m FY23 cost savings – H2 119.7 $500k lower than H1 93.5 Gross Profit ($m)
Slide 9: Strong business performance
Strong business performance Tyro’s core merchant base grew 14% in FY23 +8% +10% +81% 68,665 Total merchant growth 8% 63,770 58,186 Core Tyro customer growth 15,676 14% 17,394 18,490 Bendigo customer reduction 52,989 +14% (10%) following migration 32,176 46,376 Growth in Tyro core merchant 39,696 bas
Slide 10: Increased diversification in core merchants
Increased diversification in core merchants Merchant growth1 by industry vertical FY21-FY23 +9% 17,425 +24% Tyro Health (+24%) and 15,984 16,165 Services (Other) (+21%) saw the highest growth 13,952 13,033 in merchant numbers +5% 10,332 10,874 10,768 Specialised verticals +21% (Health and 9,236 8,52
Slide 11: Improved banking uptake
Improved banking uptake Positive growth in lending and deposits $149.7m $92.7m Loan originations Deposits +51% YoY +11% YoY 149.7 99.1 92.7 83.3 75.5 60.1 50.5 25.8 FY20 FY21 FY22 FY23 Merchant Loan Orginations ($m) Deposits ($m) 11
Slide 12: Financial Results
Financial Results Prav Pala CFO 29 August 2023 12
Slide 13: Strong financial performance
Strong financial performance Positive free cash flow for FY23 193.2 $193.2m $42.3m $5.7m Gross Profit EBITDA Free Cash Flow +30% YoY 22% EBITDA margin +$39.8m YoY 148.5 119.7 Free Cash Flow ($m) (before banking balances) 5.7 42.3 14.2 10.7 (34.1) Gross Profit ($m) EBITDA ($m) (44.1) FY21 FY22 FY23 F
Slide 14: Payments gross profit driven by growth in transaction value
Payments gross profit driven by growth in transaction value Payments transaction value $42.6b, +25% YoY FY23 FY22 GROWTH PAYMENTS BUSINESS $’000 $’000 % 42.6 Bendigo 5.4 +3% Services 3.2 +26% Transaction value 42,601,263 34,197,453 24.6% Health 5.4 34.2 +34% Revenue 419,215 318,847 31.5% Less: Inter
Slide 15: Margin improvement
Margin improvement Tyro core Payments business1 margins as a proportion of transaction value Card mix as a proportion of transaction value (%) (bps) 2.6% 100 89.5 89.6 90 80.7 82.5 1.1% 80 0.7% 70 Basis Points (bps) 60 50 42.8 43.8 41.9 42.5 61.1% 60.3% 59.1% 40 30 34.7 34.0 32.0 32.8 38.6% 20 38.2%
Slide 16: Greater contribution from banking and corporate
Greater contribution from banking and corporate FY23 FY22 GROWTH OTHER REVENUE AND FY23 FY22 GROWTH BANKING BUSINESS $’000 $’000 % INCOME $’000 $’000 % Loan Originations 149,710 99,071 51.1% Investment income 7,653 753 916.3% Interest income 11,069 4,877 127.0% Other revenue and income 3,536 1,039 2
Slide 17: Continued reduction in expenses
Continued reduction in expenses Operating expenses1 (excl. share-based payments) ($m) Costs well managed post October cost reduction program 75.7 H2 costs $500k lower than H1 FY23 total operating expenses - 75.2 $150.9m (FY22: $137.8m) Salary increases offset by half Operating Expenses ($m) year imp
Slide 18: Achieved positive free cash flow
Achieved positive free cash flow FY23 FY22 Variance Free Cash Flow1 $’000 $’000 $’000 Operational cash flows EBITDA 42,299 10,667 31,632 Capital expenditure (32,090) (33,482) 1,392 Rent (1,173) (2,788) 1,615 Bendigo top-up payment (1,861) (3,536) 1,675 Bendigo transitional costs (974) (4,669) 3,695
Slide 19: FY24 Outlook
FY24 Outlook Jon Davey CEO 29 August 2023 19
Slide 20: Trading update
Trading update1 Soft start to H1 FY24 driven by weaker discretionary spending factored into FY24 Guidance. Transaction value 1 July 2023 to 25 August 2023: $6.5 billion, up 6.3% on pcp. 24% • Hospitality +8.4% 16.9 14% 4.1 • Health +28.9% • Retail -1.9% 2.2 15.2 • Services/Other +12.3% • Bendigo pow
Slide 21: Guiding for continued profit growth
Guiding for continued profit growth1 Focus on cost and revenue to further improve EBITDA margin Earnings guidance range for FY24 Transaction value $45.0 billion to $47.5 billion Positive Free Cash Flow Gross Profit2 (after Bendigo commission) $206 million to $215 million • Targeting continued increa
Slide 22: Investor Update Tyro Strategy
Investor Update Tyro Strategy 18 October 2023 Details to follow 22
Slide 23: Thank you
tyro Thank you 29 August 2023
Slide 24: Appendix
tyro Appendix 29 August 2023
Slide 25: Reconciliation of statutory to normalised results
Reconciliation of statutory to normalised results NORMALISATION ADJUSTMENTS INVESTMENT IN FY23 BENDIGO ALLIANCE BENDIGO ALLIANCE ASSOCIATES & Summary of adjustments GROSS PROFIT TRANSITIONAL OTHER FY23 NORMALISED STATUTORY MINORITY SHARE COSTS $’000 $’000 $’000 $’000 $’000 INTERESTS 1. Bendigo Allia
Slide 26: Financial performance
Financial performance FY23 FY22 GROWTH $’000 $’000 % Transaction value 42,601,263 34,197,453 24.6% Payments revenue and income 419,215 318,847 31.5% Banking revenue (including fair value gain/(loss)) 9,372 5,504 70.3% Other revenue and income (normalised) 7,215 1,792 302.6% Revenue (normalised) 435,
Slide 27: Financial position
Financial position 30 Jun 2023 30 Jun 2022 Cash + Financial Investments $’000 $’000 • Total cash and liquid investments of $128.9 million (30 June 2022: ASSETS $122.8 million) • Movement of positive $6.1 million in cash and FRNs reflecting: positive Cash1 58,382 51,583 free cash flow of $5.7 million
Slide 28: Liquidity and capital adequacy analysis
Liquidity and capital adequacy analysis 250 160% 143% Liquidity 140% • Total cash and liquid 220 investments of $128.9 million 200 (30 June 2022: $122.8 million) 120% • Free cash flow generation of 186 $5.7 million 173 170 100% 150 Total Capital Ratio • Total capital ratio of 52% at 30 73% 80% June
Slide 29: Reconciliation of free cash flow to statutory cash flow from operating activities
Reconciliation of free cash flow to statutory cash flow from operating activities FY23 FY22 $’000 $’000 Free cash flow1 (before loans and deposits) 5,700 (34,146) Add back: Capital expenditure (excluding terminals) 12,463 20,653 Add back: Bendigo top-up payment 1,861 3,536 Add back: Rent 1,173 2,788
Slide 30: Payments business - supplementary information
Payments business - supplementary information Performance by Vertical (Tyro core + Bendigo): MERCHANT COUNT FY23 FY22 GROWTH PROPORTION OF GROWTH FY23 (#) FY22 (#) $’million $’million % TOTAL TV (%) % Performance by Vertical Hospitality 18,347 13,382 37% 43% 17,425 15,984 9% Retail (now excludes pha