Lesaka Technologies, Inc. · NASDAQ:LSAK
Lesaka Technologies — Q1 2023 Earnings Presentation
36 slides from Lesaka Technologies's earnings presentation, Nov 9, 2022
Slide 1: Q1 FY23 Results Presentation
FY23 Q1 Results | 1 Q1 FY23 Results Presentation 9 November 2022
Slide 2: Agenda
FY23 Q1 Results | 2 Agenda Performance Highlights & Business Overview Chris Meyer – Group CEO Merchant Business Steven Heilbron – Head of Merchant Business Consumer Business Lincoln Mali – CEO Southern Africa Financial Performance Naeem Kola – Group CFO Outlook Chris Meyer – Group CEO
Slide 3: Performance Highlights
Performance Highlights
Slide 4: Execution on strategic priorities translating into financial performance
FY23 Q1 Results | 4 Execution on strategic priorities translating into financial performance Connect acquisition Organic turnaround outperformance continues of the Consumer Business Strong underlying fundamentals Consumer pathway underpinning the business remain unchanged to breakeven in November 20
Slide 5: Financial highlights for FY23 Q1
FY23 Q1 Results | 5 Financial highlights for FY23 Q1 Group Revenue for the quarter Segment Adj. EBITDA¹ for the quarter R 2 138m $125m {R 2 015m - R 2 062m} R 6m R 111m $7.9m R 1 897m R 107m <R 1m R 8m R 2m {R 106m - R 112m} R 3m R 28m R 124m <R 135m $6.5m (R 137m) (R 19m) (R 26m)³ (R 24m) ($1.4m) (
Slide 6: Business Overview
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Slide 7: Bringing financial inclusion to Consumers & Merchants in southern Africa
FY23 Q1 Results | 7 Bringing financial inclusion to Consumers & Merchants in southern Africa Innovative solutions to merchants to grow, manage Enabling access to financial services & cash & digitize their businesses & capital for individuals in informal communities
Slide 8: Encouraging financial inclusion & digitization in the informal market
FY23 Q1 Results | 8 Encouraging financial inclusion & digitization in the informal market Source: Lesaka images, managements best estimates & GG Alcock “Kasinomics”
Slide 9: Southern Africa's informal economy is highly cash-driven & continues to grow
FY23 Q1 Results | 9 Southern Africa’s informal economy is highly cash-driven & continues to grow Size of South Africa’s informal economy is estimated at >R300bn +R150bn ~R90bn ~R45bn ~R18bn +R10bn ~100 000 spaza/rettes ~50 000 kasi kos spaza ~150 000 50 000 hair salons & backroom rental muthi trader
Slide 10: Merchant Business
Merchant Business
Slide 11: Expanded Merchant Business continues to grow
FY23 Q1 Results | 11 Expanded Merchant Business continues to grow Transformational shift in performance (pre-existing merchant business & Connect for full quarter) Merchant revenue for the quarter Seg adj. Merchant EBITDA¹ for the quarter Connect Group contribution included for Q1 FY23 July 01 to Se
Slide 12: Merchant | Key revenue drivers in Connect
FY23 Q1 Results | 12 Merchant | Key revenue drivers in Connect Growth momentum carries through to the end of September 2022 Kazang cumulative throughput Cash settlements Card cumulative throughput Capital Connect 29% yoy 19% yoy 115% yoy 190 178 123 R 4.5bn R 5.5bn R 5.8bn R 23.0bn R 23.6bn R27.5bn
Slide 13: Merchant | Key revenue drivers in pre-existing Merchant Business
FY23 Q1 Results | 13 Merchant | Key revenue drivers in pre-existing Merchant Business Performance by key product areas Terminals VAS value processed (ZARm) Bill payment volumes (millions) 8 522 12% 7 761 1 349 2% 7 924 4 536 4 442 >100% QoQ 1 184 8% Revenue drivers 5 010 739 683 3 700 3 365 FY22 Q1
Slide 14: Offering innovative solutions to the formal & informal sectors
FY23 Q1 Results | 14 Offering innovative solutions to the formal & informal sectors Building a leading position in a growing & underserved market Digitization of cash Value-Added Services¹ ~4 200 ~57 000 Cash vaults ▲ 12% Devices deployed ▲ 40% FY23 Q1 FY23 Q1 Card Acquiring Working Capital ~27 700
Slide 15: Partnerships enabling supply chain payments at Merchant locations
FY23 Q1 Results | 15 Partnerships enabling supply chain payments at Merchant locations
Slide 16: Consumer Business
Consumer Business
Slide 17: Offering high-quality & cost-effective Financial Services to underserved consumers
FY23 Q1 Results | 17 Offering high-quality & cost-effective Financial Services to underserved consumers Fit for purpose consumer platform within our dual-sided digital ecosystem Short-term loans Banking Banking <4% loss ratio per year BANKING 1.17m ~2.4m EPE active accounts EPE issuer transactions1
Slide 18: Progress in transforming consumer business & reinventing consumer distribution model
FY23 Q1 Results | 18 Progress in transforming consumer business & reinventing consumer distribution model Pure play grant distribution model to a retail banking offering for underserved consumers • Shift from traditional bricks & mortar Building instore partnerships Onboarding streamlined ATM optimi
Slide 19: Consumer turnaround – Monthly EBITDA break-even position evident
FY23 Q1 Results | 19 Consumer turnaround – Monthly EBITDA break-even position evident Cost savings achieved whilst growing our active account base & maintaining transaction volumes & revenues FY22 Q1 FY22 Q2 FY22 Q3¹ FY22 Q4 FY23 Q1 Sep 2022 Cost Savings achieved in FY23 Q1 ($9.4m) ($4.4m) ($0.8m) (
Slide 20: Financial Performance
Financial Performance
Slide 21: Group Income Statement ($'000)
FY23 Q1 Results | 21 Group Income Statement ($’000) $’000 Three months ended September 30 Three months ended June 30 2022 2021 2022 FY23 Q1 FY22 Q1 FY22 Q4 Revenue 124 786 34 504 121 789 Expense 121 997 44 340 120 934 Cost of goods sold, IT processing, servicing & support 100 528 24 207 100 522 Sell
Slide 22: Basis for preparation of combined accounts for 3 months to 30 September 2022
FY23 Q1 Results | 22 Basis for preparation of combined accounts for 3 months to 30 September 2022 FY22 Q1 FY23 Q1 1 July 2021 30 September 2021 1 July 2022 30 September 2022 Prior to acquiring Connect Includes Connect for the full quarter
Slide 23: Results for the Group on a normalized basis (ZAR)
FY23 Q1 Results | 23 Results for the Group on a normalized basis (ZAR) ZAR’000 Three months ended September 30 Three months ended June 30 2022 2021 Growth QoQ 2022 Growth QoQ FY23 Q1 vs. FY22 FY23 Q1 vs. FY22 FY23 Q1 FY22 Q1 Q1 FY22 Q4 Q4 Revenue Consumer 257 029 250 816 2% 244 358 5% Merchant 1 874
Slide 24: Results for the Group on a normalized basis ($)
FY23 Q1 Results | 24 Results for the Group on a normalized basis ($) $’000 Three months ended September 30 Three months ended June 30 2022 2021 Growth QoQ 2022 Growth QoQ FY23 Q1 FY22 Q1 FY23 Q1 vs. FY22 Q1 FY22 Q4 FY23 Q1 vs. FY22 Q4 Revenue Consumer 15 004 17 164 (13%) 15 700 (4%) Merchant 109 437
Slide 25: Revenue growth momentum continues ($'000)
FY23 Q1 Results | 25 Revenue growth momentum continues ($’000) Revenue includes the impact of the Connect acquisition Revenue (from external customers) Revenue breakdown (from external customers) Merchant Consumer 17 164 124 786 109 408 361 15 004 374 1 245 129 3 897 5 376 1 223 4 711 2 193 76 120 2
Slide 26: Normalized EBITDA (ZAR'000) | Turnaround
FY23 Q1 Results | 26 Normalized EBITDA (ZAR’000) | Turnaround FY22 Q1 FY22 Q2 FY22 Q3¹ FY22 Q4¹ FY23 Q1 58 022 40 674 FY23 Q1 vs. FY22 Q4 43% FY23 Q1 vs. FY22 Q1 >100% 8 775 107 471 111 332 (106 397) (51 707) (43 995) (66 797) (53 310) (35 220) (44 741) (96 448) (36 487) (142 884) Total segment adju
Slide 27: Normalized EBITDA ($'000) | Turnaround
FY23 Q1 Results | 27 Normalized EBITDA ($’000) | Turnaround FY22 Q1 FY22 Q2 FY22 Q3¹ FY22 Q4¹ FY23 Q1 3 387 2 588 FY23 Q1 vs. FY22 Q4 >100% FY23 Q1 vs. FY22 Q1 >100% 604 6 905 6 499 (7 281) (3 362) (2 818) (4 317) (3 112) (2 214) (2 909) (6 271) (2 497) (9 778) Total segment adjusted EBITDA Corporat
Slide 28: Earnings per Share (R) | Turnaround
FY23 Q1 Results | 28 Earnings per Share (R) | Turnaround Basic Earnings per Share (R) Fundamental Earnings per Share (R) (R1.36) (R1.43) (R2.93) (R3.33) (R3.83) (R3.17) FY22 Q1 FY22 Q4 FY23 Q1 FY22 Q1 FY22 Q4 FY23 Q1
Slide 29: Cashflow & net debt ($'000)
FY23 Q1 Results | 29 Cashflow & net debt ($’000) Operational cashflows improving Cash used in operating activities (ex Working Capital) Net debt position at September 30, 2022 ( 419) $ (millions) September 30 2022 1 Cash on hand 93 Debt (197) Acquisition debt (115) Other long-term borrowings (13) Ex
Slide 30: Outlook
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Slide 31: Outlook for FY23 Q2 & FY23
FY23 Q1 Results | 31 Outlook for FY23 Q2 & FY23 FY23 FY23 Q2 Outlook Full Year Outlook 3 Revenue R 2.0bn - R 2.3bn R 8.7bn - R 9.3bn Total Segment Adj. EBITDA¹ R 157m - R164m R 645m - R 675m Merchant Segment Adj. EBITDA¹ R 145m - R 150m R 550m - R 565m Consumer Segment Adj. EBITDA¹ R 12m - R14m R 95
Slide 32: Thank you
FY23 Q1 Results | 32 Thank you
Slide 33: Appendix
Appendix
Slide 34: Reconciliation of non-GAAP measures
FY23 Q1 Results | 34 Reconciliation of non-GAAP measures Three months ended September 30 2022 2021 $’000 EPS, basic $’000 EPS, basic Fundamental net loss (Non-GAAP) (4 946) (0.08) (12 374) (0.22) Gain on disposal of equity accounted investment 248 - Intangible asset amortization, net of tax (2 828)
Slide 35: Balance sheet
FY23 Q1 Results | 35 Balance sheet $ (millions) September 30 2022 June 30 2022 June 30 2021 Cash, cash equivalents & restricted cash 1 93 105 210 Investments and equity accounted investments 81 82 86 Total assets 606 657 428 Total equity and RCS 285 314 361 Total debt 197 208 14 Book value / share 4
Slide 36: SAFE HARBOR STATEMENT
FY23 Q1 Results | 36 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 fa