Paysafe Limited · NYSE:PSFE
Paysafe — Optimal Payments — Canaccord Genuity Growth Conference 2011
35 slides from Paysafe's conference presentation, Aug 11, 2011
Slide 1: Optimal Payments Plc
Optimal Payments Plc Canaccord Genuity Growth Conference Boston, 11 August 2011 1 1 © Optimal Payments Plc.
Slide 2: Agenda
Agenda 1 Introduction 2 The market 3 Our business 4 Financials 5 Conclusion Appendices Joel Leonoff President & CEO joel@optimalpayments.com www.optimalpayments.com 2 © Optimal Payments Plc.
Slide 3: Legal Disclaimer
Legal Disclaimer Certain statements in this document are forward-looking statements. These forward- looking statements speak only as at the date of this document. These statements concern, or may affect, future matters and include matters that are not facts. Such statements are based on current expe
Slide 4: Introduction
1 Introduction 4 4 © Optimal Payments Plc.
Slide 5: About Optimal Payments
• Leading online payments company Ab t About • Proven P since i 1996 • Global scale – focused on eCommerce market Optimal Payments • Trusted solutions – safe and secure Leading online payments company, processing more than $9 billion in transactions annually Optimal Payments formed from combinat
Slide 6: Optimal Payments key facts
• Leading online payments company Ab t About • Proven P since i 1996 • Global scale – focused on eCommerce market Optimal Payments • Trusted solutions – safe and secure 15 years 5 000 000 + consumer accounts 5,000,000 $700m prepaid card program Publicly traded since 2004 on London’s AIM $9bn process
Slide 7: Sample clients
• Over 10,000 merchants serviced Sample • Brands with global reach or aspirations • Both bricks and clicks clients • Companies who value innovation … and security 7 © Optimal Payments Plc.
Slide 8: The market
2 The market 8 8 © Optimal Payments Plc.
Slide 9: The changing payments landscape
• Online payments is a rapidly developing market Th changing The h i • Traditional payment methods and players giving payments landscape way to “alternative payments” and new entrants 20th Century… 21st Century – today… 9 © Optimal Payments Plc.
Slide 10: Where does Optimal Payments fit?
• True combination of online processing (NETBANX) Wh Where does d Optimal O ti l andd stored t d value l (NETELLER) solutions l ti • Branded propositions built on innovation … Payments fit? and differentiation eCommerce Engine / Gateway / ISO / Acquirer / Alternative Shopping Carts A Aggregator t Pr
Slide 11: The online payments market
Global alternate payments industry eWallet penetration of global y segment market size by g (($bn)) B2C eCommerce ((%)) 2010-2015 • Strong growth forecast in alternate payments industry – The online across multiple channels (online, mobile, contactless) payments market • eWallet penetration forecast
Slide 12: Our business
3 Our business 12 12 © Optimal Payments Plc.
Slide 13: Our two growth platforms
• Focused on growing CNP / eCommerce markets O two Our t growth th • Merchant proposition driven by tailored solutions platforms built on differentiation and innovation Straight Through Processing Stored Value (“STP”) ( (NETELLER eWallet ll & Net+ prepaid id cards) d ) Focused on “cardholder not p
Slide 14: STP - the NETBANX payment processing offering
STP - the NETBANX payment processing offering NETBANX Processing gateway Merchant account Risk & Compliance services Why merchants need it To accept customer-not-present (“CNP”) payments from merchant websites, over the phone (IVR), mail order, or via contact centres Feature rich gatew
Slide 15: STP - the NETBANX transaction flow
STP - the NETBANX transaction flow Hosted Page eCommerce or Virtual Terminal MOTO Merchant API Payment Batch Upload Gateway Risk Engine Merchant Funds Settled To Account 15 © Optimal Payments Plc.
Slide 16: Stored Value - the NETELLER Payment Account
Stored Value - the NETELLER Payment Account NETELLER Payment Account Online stored value consumer account Strong privacy and convenience for online financial transactions Direct settlement with merchants bypassing card networks Accepted at 30m locations either directly or via physical, web
Slide 17: Stored Value - transaction model
Stored Value - transaction model Payment account loaded via multiple CONSUMER options, then “no risk” transfer to merchant, funds easily available to consumer via many “withdrawal” methods 1. SIGN-UP 2. TRANSFER TO Payment LOADS ACCOUNT Account 3 3. TRANSFER FROM 4. ONLINE WITHDRAWS DIRECTLY TO BANK
Slide 18: The Optimal solution
The Optimal solution A partnership for a private Private Label full-service label full service offering Customer that bridges the in-store Account and online consumer Loyalty and Credit & Cash experience. retention Management Provided by a sophisticated array of cutting edge technology – The whe
Slide 19: ACME Account: Hub of customer engagement
ACME Account: Hub of customer engagement Powered by Optimal Payments’ NETELLER® Uses NETELLER platform that annually processes over $3b Branded 13 languages: EN FR, EN, FR DE, DE IT, IT ES, ES SE, SE DK, DK PL, PL PT, PT JP, JP NO, NO TR, TR RU 18 currencies: AUD, BGN, CAD, DKK, EEK, EUR, GBP, HUF,
Slide 20: Extends merchants' channels beyond store & web
Extends merchants’ channels beyond store & web Desktop, Mobile and TV Set-top Shopping Apps/Widgets Virtual card Embedded app micro-cart for mobile/device shopping Socially connected POS/contactless/ mobile payment barcode app 20 © Optimal Payments Plc.
Slide 21: Financials
4 Financials 21 21 © Optimal Payments Plc.
Slide 22: The Optimal Payments business model
• Revenues principally driven by merchants The Optimal p Payments y • Gross margin higher for stored value as business model lower variable costs Straight Through Processing Stored Value ONLINE MERCHANT ONLINE MERCHANT CONSUMER 100% C. 60% C. 40% STP revenue PROCESSING COSTS Stored Value revenue BAD
Slide 23: Actuals and Consensus forecasts
• Return to growth following acquisition of OP business Actuals and Consensus forecasts • EBITDA growth driven by margin leverage Revenue ($m) EBITDA ($m) & EBITDA margin (%) +12% growth 124.6 Interest Income (1) 111.0 STP +38% growth Stored Value +55% 55% 80 7 80.7 growth 69.6 61.6 24.0 16.7 17.4 1
Slide 24: Valuation comparisons
• Optimal EV/EBITDA multiples below traditional payment Valuation processing companies • And A d also l b below l multiples lti l for f “alternative” “ lt ti ” paymentst comparisons Companies such as Wirecard and Green Dot Corp EV/EBITDA – traditional payments and EV/EBITDA – alternative payments pe
Slide 25: A highly leveragable business
Illustrative impact of a $10m increase in revenue Mix Revenue Gross EBITDA uplift lift margin i (1) uplift lift Stored Value 36% $ 3.6m 89% $ 3.24m STP 64% $ 6.4m 55% $ 3.52m $ 10.0m $ 6.76m +67% 67% Increases in revenue drive significant improvements in gross margin … and EBITDA due to fixed natu
Slide 26: Balance sheet improving
• Cash position remains solid post- post-deal Balance sheet improving • 2 year convertible debt $28.5m issued to fund deal Group “own” cash 31 Dec 10 Cash $ 51.1 51 1 m Restricted cash $ 13.1 m Total group cash $ 64.2 m less Merchant cash included in cash ($ 10.6 m) (within current liabilities) Grou
Slide 27: Conclusion
Conclusion 27 27 © Optimal Payments Plc.
Slide 28: Why invest in Optimal Payments
• Uniquely positioned… Whyy invest in Optimal Payments … to provide the “Optimal” solution in payments+ Uniquely positioned as a technology provider (platform, people, processes, technology) Ability to move quickly quickly, providing flexible tailored solutions to our customers Versatility, ag
Slide 29: A Winning Combination for Alternative Payments
A Winning Combination for Alternative Payments For further information contact Optimal Payments Plc at investorrelations@optimalpayments.com Joel Leonoff Andrew Gilchrist President & CEO EVP Corporate Affairs joel@optimalpayments.com andrew.gilchrist@optimalpayments.com Tel: + 1 561 613 9628 Tel: +
Slide 30: Appendices: Further information
Appendices Further information 30 30 © Optimal Payments Plc.
Slide 31: Optimal Payments: a short but eventful history
Optimal Payments: a short … but eventful … history Exceptional US issues Stabilisation Business growth and & and transformation success resolution refocus Drive to scale 1999 - 2006 2006 - 2007 2007 - 2009 2010 - ongoing 2006 Entered STP market with Netbanx acquisition 2007 DPA 2009 Strengthened 201
Slide 32: Optimal Payments: a balanced business
Optimal Payments: a balanced business… 32 © Optimal Payments Plc.
Slide 33: Senior leadership team
Optimal Payments Plc - senior leadership team Leadership team combines expertise and experience in payments, cards, online gaming and internet technology Joel Leonoff President & CEO Danny Keith Chazonoff Butcher Chief Operating Chief Financial Officer Officer Supported by experienced executive
Slide 34: Senior leadership team biographies
Senior leadership team biographies Joel CEO Joel is an entrepreneurial leader and visionary, with a proven track record, having served as CEO, COO and CFO of private and publicly traded companies. Joel founded SureFire Leonoff Commerce Inc. (renamed Terra Payments), a Canadian TSE‐listed company, wh
Slide 35: Optimal Payments Plc – shareholder structure
Optimal Payments Plc – shareholder structure Shareholder structure – 10 August 2011 Total shares in issue 126,279,043 Source: Company website IIU Nominees Limited 28.52% (Ireland) Franklin Templeton Institutional LLC 18.36% 18 36% (US) QVT Fund LP 10.72% (UK/US) 97.9% Free float Blackrock Asset Mana
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