Tyro Payments Ltd. · ASX:TYR
Tyro Payments — Investor Presentation (February 2023)
28 slides from Tyro Payments's investor presentation, Feb 28, 2023
Slide 1: H1 FY23 Investor Presentation
H1 FY23 INVESTOR PRESENTATION 28 FEBRUARY 2023 Tyro Payments Limited ABN 49 103 575 042
Slide 2: Disclaimer
Disclaimer This presentation is given on behalf of Tyro Payments Limited (Tyro) (ASX:TYR) (ABN 49 103 575 042). Information in this presentation: • is for general information purposes only, and is not an offer or invitation for subscription, or purchase of, or a recommendation to invest in Tyro secu
Slide 3: CEO Overview
tyre CEO Overview Jon Davey
Slide 4: A Rejuvenated Tyro
A Rejuvenated Tyro • Transaction value growth + 37% | Merchant number growth + 9% | Gross profit growth + 40% Growth • Lending origination growth + 101% • Distribution through iconic Australian retailers - Telstra + Australia Post • $11 million annualised benefit - cost reduction program • 79.6% ope
Slide 5: Tyro's Value Proposition
Tyro’s Value Proposition 1 1. Focus on Industry Verticals • Industry specific features and services (eg. Pay@Table, Split Bills, Tipping, BarTab/GuestTab and Health Claiming) • Merchant and industry knowledge and recognition • Close of day for settlement and billing based on merchant trading days 2.
Slide 6: Payments Opportunity
Payments Opportunity 5.4% market share growing at 6x market growth Annual transaction value of card payments acquired in Australia1 ($’billion) - Tyro’s estimated market share of total card payments acquired in Australia - as at 31 December 2022 as at 31 December 2022 5.4% ~5.4% 4.4% market share $7
Slide 7: Banking Opportunity
Banking Opportunity < 10% Tyro Bank Account Customer Penetration Targeting 20% Banking contribution to Group gross profit by FY27 Total merchants vs. activated accounts Banking contribution to Group gross profit Interest income on lending product1 66,884 20.0% 24.4% Total Merchants Average annualise
Slide 8: Immediate Strategic Priorities
Immediate Strategic Priorities INNOVATION Tyro Go Roll-out to Bendigo General Availability Telstra Distribution AusPost Distribution General Availability General Availability General Availability Enhanced Vertical PRODUCT Tyro Pro Merchant trial (non-integrated) (Integrated) (Health Integrated) Spec
Slide 9: H1 FY23 Performance
H1 FY23 Performance Transaction Value Merchants Gross Profit EBITDA $21.7B 66,884 $95.2M $19.5M 9% GROWTH ON H1 FY22: $2.8M 37% GROWTH ON PCP 40% GROWTH ON PCP PCP H2 FY22: $7.9M 16% GROWTH FOR TYRO CORE ACHIEVEMENT OF STRONG BALANCE SHEET STATUTORY NET PROFIT H1 FY23 OPERATING LEVERAGE $0.6M POSITI
Slide 10: Payments Business - Overview
Payments Business - Overview Transaction Value ($’billion) Merchant Numbers1 (#) Merchant Churn (%) 9% 37% 68% 13.7% Bendigo H1 FY18 - H1 FY23 CAGR +27% 16,717 H1 FY18 - H1 FY23 CAGR +26% 11.9% 12.0% 11.8% 11.7% 31% Bendigo $21.7b 18,236 10.2% 10% 13% Tyro 10.1% 30% 23% 50,167 Tyro 31% 27% 9.3% 43,3
Slide 11: Banking Business - Overview
Banking Business - Overview Loan Originations ($’million) Merchant Deposits - Transaction and Term Deposit Accounts ($’million) $104.0m 101% $100.8m $95.0m 1,279% $72.7m H1 FY19 - H1 FY23 CAGR +37% 82% 97% $37.4m $36.2m $41.6m 227% (93%) $20.6m $21.6m $10.5m $9.5m $3.2m $2.6m $2.2m H1 H1 H1 H1 H1 H1
Slide 12: Detailed Financial Performance
Detailed Financial Performance Prav Pala, CFO
Slide 13: Key Financial Performance Metrics
Key Financial Performance Metrics Gross Profit ($’million) EBITDA ($’million) Free Cashflow - before Banking ($’million) $95.2m $19.5m $80.4m $68.1m $0.6m $58.6m ($6.4m) $7.9m $5.7m ($27.1m) $2.8m ($46.0m) H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 FY21 FY22 FY22 FY23 FY21 FY22 FY22 FY23 FY21 FY22 FY22 FY2
Slide 14: Financial Performance Analysis
Financial Performance Analysis PAYMENTS BUSINESS H1 FY23 $’000 H1 FY22 $’000 GROWTH % Revenue 209,423 145,984 p 43.5% H1 FY23 H1 FY22 GROWTH $’000 $’000 % Less: Interchange, scheme, (117,492) (77,926) p 50.8% integration + support fees Transaction value 21,693,388 15,826,286 p 37.1% Gross profit (st
Slide 15: Margin Analysis
Margin Analysis Tyro Core Payments Business1 Margins as a proportion of Transaction Value (bps) • MSF up 4.0bps on H2 FY22 and 7.2bps 100.0 on H1 FY22: 91.2 › Implemented price increases in March 2022 95.0 87.5 88.0 and September 2022 to account for scheme 90.0 84.0 and interchange fee increases fro
Slide 16: Achieving Operating Leverage
Achieving Operating Leverage 116.4% 114.2% 110.3% 104.7% Operating Expenses ($’million) 92.8% 88.2% 79.6% 79% 24% ~$187m 11% to ~$191m 4% Gross Profit (normalised) $75.7m $148.5m $72.5m $65.3m $119.7m $95.2m $93.5m $83.3m $69.1m $56.0m H1 H2 H1 FY22 FY22 FY23 FY17 FY18 FY19 FY20 FY21 FY22 H1 FY23 FY
Slide 17: Achieving Positive Free Cash Flow
Achieving Positive Free Cash Flow H1 FY23 FY22 Free Cash Flow 1 $’000 $’000 EBITDA 19,456 10,667 Capital expenditure (17,024) (33,482) Rent - (2,788) Redundancy payments (1,240) - Remediation (221) (5,041) Bendigo payment - (3,536) Other (388) 633 Free Cash Flow 583 (33,547) 1 Free cash flow is calc
Slide 18: Reconciliation of Statutory to Normalised Results
Reconciliation of Statutory to Normalised Results NORMALISATION ADJUSTMENTS Summary of adjustments H1 FY23 BENDIGO ALLIANCE BENDIGO ALLIANCE INVESTMENT IN H1 FY23 1. Bendigo Alliance gross profit share - reflects STATUTORY GROSS PROFIT TRANSITIONAL ASSOCIATES & COST REDUCTION NORMALISED economic rea
Slide 19: Trading Update
Trading Update1 PAYMENTS BUSINESS: • Strong start to H2 FY23 • Transaction value 1 January 2023 to 24 February 2023 - $6.3 billion, up 23% on pcp › Victoria h 27% › NSW h 28% › Queensland h 24% › WA h 22% › SA h 44% › Other (includes Bendigo Alliance) h 5% BANKING BUSINESS: • Loan originations 1 Jan
Slide 20: FY23 Guidance Re-Affirmed
FY23 Guidance Re-Affirmed1 Earnings guidance range for FY231: FY23 GUIDANCE RANGE Positive Free Cash Flow1: Transaction Value2 $42.5 billion to $43.5 billion • Targeting positive free cash flow6 exiting FY23 (after all Gross profit3 (after Bendigo commission) $187 million to $191 million operating e
Slide 21: Appendix
APPENDIX Supporting Supplementary Information 21
Slide 22: Financial Position
Financial Position Balance Sheet Reflective of Prudent Capital Management 31 DEC 2022 30 JUN 2022 $’000 $’000 Cash + Financial Investments ASSETS • Total cash and FRNs of $117.4 million (30 June 2022: $122.8 million) Cash1 51,438 51,583 • Movement of negative $5.4 million in cash and FRNs reflecting
Slide 23: Liquidity + Capital Adequacy Analysis
Liquidity + Capital Adequacy Analysis 143% $220m Liquidity • Total cash and investments of $117.4 million (30 June 2022: $122.8 million) $186m • Sufficient to support the Group through to positive free cash flow exiting $173m FY23 $165m 73% Total Capital Ratio • Total capital ratio of 34% at 31 Dece
Slide 24: Reconciliation of Free Cash Flow to Statutory Cash Flow
Reconciliation of Free Cash Flow to Statutory Cash Flow from Operating Activities H1 FY23 FY22 $’000 $’000 Free cash flow1 (before banking) 583 (33,547) Add back: Bendigo payment - 3,536 Add back: Rent - 2,788 Add back: Capital expenditure (excluding terminals) 5,826 20,653 Less: Timing differences
Slide 25: Operating Cost Base Analysis
Operating Cost Base Analysis Operating expenses1 (excl. share-based payments) - H1 FY23 vs. H1 FY22 H1 FY23 H1 FY22 Growth $’000 $’000 % $0.6m $1.4m Operating expenses1: $75.7m $3.8m Employee benefits expense (excl. share-based payments) 47,693 45,113 p 5.7% $4.6m Contractor and consulting expenses
Slide 26: Payments Business - Supplementary Information
Payments Business - Supplementary Information 1. Geographical Performance (Tyro core only): H1 FY23 H1 FY22 GROWTH PROPORTION OF $’million $’million % TYRO CORE TV (%) Geographical Transaction value performance NSW 6,776 4,253 59% 36% Victoria 4,467 2,941 52% 23% Queensland 4,125 3,294 25% 22% Weste
Slide 27: Payments Business - Supplementary Information (cont.)
Payments Business - Supplementary Information (cont.) 3. Payments Card Mix (Tyro core only): FY20 to H1 FY23 Period prior to the impact of COVID-19 COVID-19 lockdown impacted period Absence of COVID-19 lockdowns 5.0% Proportion of 4.2% International 3.4% 2.8% Transaction Vaue 2.6% 2.3% 1.9% 1.9% 2.0
Slide 28: Investor Relations contact details
Investor Relations contact details: Giovanni Rizzo Phone: +61 (0) 439 775 030 Email: grizzo@tyro.com Address: 18/55 Market St, Sydney NSW 2000 Company website: https://investors.tyro.com
Tyro Payments — Investor Presentation (February 2023) on 6ix