Euronet Worldwide, Inc. · NASDAQ:EEFT
Euronet Worldwide — Q2 2003 Earnings Presentation
43 slides from Euronet Worldwide's earnings presentation, Jul 30, 2003
Slide 1: Welcome to Euronet Worldwide: Q2 2003 Corporate Results
Welcome to Euronet Worldwide Q2 2003 Corporate Results July 30, 2003 Presenters Michael J. Brown, Chairman & CEO Rick L. Weller, EVP & CFO Jeff B. Newman, EVP & General Counsel Symbol: EEFT www.euronetworldwide.com
Slide 2: Forward-Looking Statements
Forward-Looking Statements 97/30/03 Any statements contained in this presentation, which concern Euronet’s or its management's intentions, expectations, or are predictions of future performance, are forward-looking statements. Euronet's actual results may vary materially from those anticipated in su
Slide 3: Q2 2003 Financial Report
Q2 2003 Financial Report Rick L. Weller Chief Financial Officer
Slide 4: Financial Highlights
Q2 2003 Financial Report: a Financial Highlights ANY PLACE » Revenue —- $48.1 million » 45% increase over $33.1 million in Q1 2003 » 175% increase over Q2 2002 » Operating Income - $2.8 million » 133% increase over $1.2 million in Q1 2003 » 180% increase over Q2 2002 « EBITDA - $5.9 million » 51% in
Slide 5: Guidance Update
Q2 2003 Financial Report: ca Guidance Update a » 2003 EPS revised to $0.10 to $0.13 » Update factors » Timing of ATM outsourcing contract signatures (approx. $0.04) » Slower than expected take over of contracted ATMs in Slovakia and India (approx. $0.01) » Market development expenses in prepaid segm
Slide 6: Euronet's Business Segments
97/30/03 Euronet’s Business Segments ANY PLACE - ANY TIME EFT Prepaid Software Processing Processing Solutions, including R&D [— EMEA (— Europe |__ Asia/Pacific \— Asia/Pacific L__ U.S.-PaySpot
Slide 7: Quarterly Transaction Growth: EFT & Prepaid Processing Combined
07/30/03 Quarterly Transaction Growth: EFT & Prepaid Processing Combined 60 50 40 Pre- paid 2 Pre- 5 paid = 30 = 20 Note: Data includes January 2008 e-pay transactions and excludes U.S.- based Dash (Sold Jan 4, 2002) and France (Transferred on July 25, 2002,
Slide 8: Quarterly Processing Revenue Growth
97/30/03 Quarterly Processing Revenue Growth: EFT & Brspald Bracessing Combined 50 45 40 35 30 25 20 15 10 i 0 Q102 Q2 02 Qa 02 402 Q103 203 Note: All data includes U.K, business and excludes U.S.-based Dash (sold Jan 4, 2002) and France (transferred on July 15, 2002). e-pay’s January 2003 revenue i
Slide 9: Q2 2003 Consolidated Revenue
Q2 2003 Financial Report: a Q2 2003 Consolidated Revenue ANY P 2 50 © 45 = 40 f 35 C Prepaid » 30 Processing 8 25 Software i) Solutions 36 @ EFT 10 Processing 5 CY) 402 Q1 03 Q203 Note: For comparability purposes, Q4 2002 data adjusted to exclude $4.2 million from the U.K. ATM operations and include
Slide 10: Consolidated Operating Results & EBITDA
Q2 2003 Financial Report: a Consolidated Operating Results & EBITDA jons w Income USD op BITDA Income Op A Loss Q4 02 103 Ae Note: All data excludes discontinued operations and adjusted for the effects of
Slide 11: Business Segments: Q2 2003 Results Comparison
Business Segments: Q2 2003 Results Comparison 97/30/03 USD Millions Revenue —_| Operating Income EBITDA Q103 |Q203 |Q103 | Q203 EFT Processing Q103 Q2 03 Prepaid Processing* Software/R&D Total Eliminations / rounding Corporate Consolidated *Q1 Pre
Slide 12: Balance Sheet – Highlights
Q2 2003 Financial Report: a Balance Sheet — Highlights Z cere lh Yen fi Total Cash $58.4 $51.9 5 Restricted Cash $45.3 $38.0 Unrestricted Cash $13.1 $13.9 Accounts Receivable $40.8 $36.2 Goodwill & Intangibles $78.7 $80.1 Current Liabilities $97.5 $87.2 Total Debt $71.8 $70.9
Slide 13: Balance Sheet – Other Items
Q2 2003 Financial Report: ca Balance Sheet - Other Items (usp millions) — ANY PLACE 3 » Debt at end of Q1 2003 $70.9 = ~ Short-term borrowings $ 0.3 = » Exchange rate impact $ 3.5 ' » Payments $<2.9> » Debt at end of Q2 2003 $71.8 S » Payment on acquisition B debt-July 2003 ($3.0) eS » Debt balance
Slide 14: Business Overview
Business Overview Michael J. Brown Chairman & CEO
Slide 15: EFT Processing Segment
97/30/03 Y PLACE N - ANY TIME. A EFT Processing Segment SACTIONS
Slide 16: EFT Processing: Quarterly Transaction Growth
97/30/03 EFT Processing: Qu arterly Transaction Growth 30 ANY 25 20 15 mn 5 0 %, &, % % % %& - ANY TIME a ic i} Ge a ee Note: All data includes U.K. transactions and excludes U.. (sold Jan 4, 2002) and France (transferred on july 15, 200: cy Q, 2, based Dash
Slide 17: EFT Processing: Quarterly Revenue Growth
ANY - ANY TIME EFT Processing: Quarterly Revenue Growth 97/30/03 USD Millions U.K. sale effect 12 11 10 3 8 F 6 QL'02 Q2'02 Q3'02 Q4'02 Q1'03 Q2'0s Note: all data includes U.K, business and excludes U.S.-based Dash (Sold Jan 4, 2002) and France (transferred on july 15, 2002).
Slide 18: EFT Processing: Operating Income & EBITDA
97/30/03 | EFT Processing: 5 Operating Income & EBITDA Ee 35 3 2 5 25 2 EBITDA USD Millions Q1 ‘03 Q2 03
Slide 19: EFT Processing: Q2 2003 Financial Highlights
EFT Processing: arrsoren Q2 2003 Financial Highlights (uso mittions) ANY PLACE : Total EMEA Asia Pacific sm ~~ Revenue $12.2 $12.1 $0.1 » Op Income 1.2 1.7 (0.5) » EBITDA $3.1 $ 3.5 $(0.4) » 14% op income margin in EMEA up from 12% margin in Q1 » 29% EBITDA margin in EMEA up from 27% margin in Q1 AN
Slide 20: EFT Processing: Q2 2003 Business Highlights
EFT Processing: orrswyas Q2 2003 Business Highlights —————————————————————————————— » EMEA » Tatra/Raiffeissen Slovakia - now live with 8 ATMs from the 150-ATM agreement » HVB Germany - Extension of cash management contract — 24 increased to 200 ATMs » Indonesia - Mobile Recharge » 50,000+ customers
Slide 21: EFT Processing: ATM Categories by Quarter
97/30/03 EFT Processing: ATM Categories by Quarter ANY PLACE 6/30/02 ~ z Live Live Devices 03/31/03 | 06/30/03 As reported | Post U.K.* - ANY TIME ATM Category 1 Euronet-owned & branded 1,707 1,147 1,115 1,135 ATM Category 2 Euronet-owned, bank-branded 625 625 660 690 ATM Category 3 Bank-owned, Euro
Slide 22: EFT Processing: Q2 2003 ATMs by Country
97/30/03 EFT Processing: Q: 2 2003 ATMs by Country: United 2 rem Total: 809 : Germany i : 4 Total: 423 “ = x Total: 107 4 Total: 8 Slovakia a Greece Total: 165 > Total: 1
Slide 23: EFT Processing: Q2 2003 ATM Categories by Count
97/30/03 EFT Processing: Q2 2003 ATM Categories by Count Hungary 301 138 0) 439 Germany 379 a 41 423 Greece ° 0 165 165 Groatia 0 ° 139 139 Gzech Rep 92 10 5 107 Egypt ° ° 87 87 India 0 25 ° 25 Slovakia ° 0 it i Kosovo 0 0 8 8 Total 1,135 690 1,295 3,120
Slide 24: Prepaid Processing Segment
97/30/03 Prepaid Processing Segment
Slide 25: Prepaid Processing: Quarterly Transaction Growth
97/30/03 Prepaid Processing: Guarterly Transaction Growth 26 Includes Jan. 2003 & ~~ 16 ie 2 emo \ 5 oll . . & 2 & GF 2 & a & Oe % & @ % @ % @ @ Rows Unaudited: There can be no assurance that these growth rates will continue,
Slide 26: Prepaid Processing: Quarterly Revenue Growth
| Prepaid Processing: a Guarterly Revenue Growth Ee 35 a 30 si 25 4 i= 2 20 = Q Oo = 10 Feb & Mar 5 oO cr es Note: 94 2002 and January 2003 are not included in Euronet Worldwide results
Slide 27: Prepaid Processing: Operating Income & EBITDA
97/30/03 —| Prepaid Processing: . Operating Income & EBITDA — 7 +S a1 03 92 "03 Note: In accordance with U.S. GAAP, e-pay results consolidated with EEFT from effective date February 3, 2003 and forward.
Slide 28: Prepaid Processing: Q2 2003 Financial Highlights
Prepaid Processing: west Q2 2003 Financial Highlights » Revenue - $32.2 million ~ 85% increase over $17.4 million in reported Qi 2003 » 20% increase over $26.8 million in pro-forma full Q1 2003, including January » Op income - $2.7 million » 78% increase over $1.5 milli nin reported Qi 2003 » 11% in
Slide 29: Prepaid Processing: Q2 2003 Business Highlights
Prepaid Processing: Q2 2003 Business Highlights ANY PLACE » New Retailers » Independent retailers - ANY TIME » Iceland grocery store » New Markets » Poland » Ireland ONS » New Zealand » United States
Slide 30: Software Solutions Segment
97/30/03 Software Solutions Segment
Slide 31: Software Solutions: Q2 2003 Financial Highlights
Software Solutions: arrsoren Q2 2003 Financial Highlights ANY PLACE » Financial Highlights » Revenue - $3.8 million - ANY TIME » Op income - $0.4 million » EBITDA - $0.6 million « Other Highlights » Contract sales - $3.7 million ANCIAL TRANSACTIONS » Software backlog - $4.9 million
Slide 32: Software Solutions: Q2 2003 Business Highlights
ANY PLACE - ANY TIME Software Solutions: Q2 2003 Business Highlights 97/30/03 » 7 banks, including USAA Federal Credit Union, sign 5-year maintenance agreements » Splitska Banka signs large software contract » ICCS goes live in several locations in Asia- Pacific and Europe » Released new version of
Slide 33: Summary
97/30/03 Summary | ANY PLACE » Positive EPS, excluding FX, achieved for the first time - ANY TIME NS » All three business lines show good Q-on-Q improvement « Net reductions in debt of $2.6 million » Company revised guidance for 2003 EPS : <<
Slide 34: Questions?
97/30/03 Questions? Michael Brown Chairman & CEO Rick Weller EVP & CFO Jeff Newman EVP & Corporate Counsel
Slide 35: Supplemental Data
ANY PLACE - ANY TIME Supplemental Data: The following schedules are provided to reconcile disclosed information to GAAP balances
Slide 36: Reconciliation of Net Income to EBITDA: EFT Processing Q2 2003
Supplemental Data: —_ Reconciliation of Net Income to EBITDA for Business SSUTUGILE EFT Processing ANY PLACE - ANY TIME Q2 2003 (USD Millions) Total EMEA Asia Pacific ~ Net Income $1.2 $1.6 $ (0.4) » Taxes 0.4 0.4 0.0 ~ FX (0.6) (0.5) (0.1) » Interest Expense 0.2 0.2 0.0 « Depreciation 1.9 1.8 0.1 ~
Slide 37: Reconciliation of Net Income to EBITDA: Q2 2003
l|emental Data: os ANY Q2 2003 (USD Millions) Prepaid Software Corp - ANY TIME » Net Income $ (0.7) $0.4 $ (8.2) » Taxes 0.5 0.0 O.1 » FX 3.4 0.0 O3 » Interest Expense 0.0 0.0 1.8 » Interest Income (0.3) 0.0 0.0 » Income from subs (0.1) 0.0 0.0 * Gain on U.K. sale 0.0 0.0 (0.5) » Depreciation 0.9 0.
Slide 38: Reconciliation of Net Income to EBITDA: Q2 2002
fece tion of Net Income to EBITDA for Business Q2 2002 (USD Millions) Supplemental Data: a7royaa Recon ment ANY EFT Software Corp - ANY TIME » Net Income $2.6 $0.6 $ (7.9) » Taxes 0.3 0.0 0.0 » xX (1.5) 0.0 5.2 » Interest Expense 0.3 0.0 1.4 . Interest Income 0.0 (0.1) 0.0 * Disc. Operations, net (0
Slide 39: Reconciliation of Net Income to EBITDA: Q1 2003
Supplemental Data: —_ Recon tion of Net Income to EBITDA for Business ~ seamen. . Qi 2003 : (USD Millions) = EFT Software Corp |. Net Income $ (0.3) $0.2 $14.1 + Taxes 0.3 0.0 (0.1) ~ FX 0.6 0.0 12 » Interest Expense 0.2 0.0 1.4 » Interest Income 0.0 0.0 (0.1) » Gain on U.K. sale 0.0 0.0 (18.0) « De
Slide 40: Reconciliation of Net Income to EBITDA: Q1 2003 Prepaid and Consolidated
ANY - ANY TIME 97/30/03 Supplemental Data: Reconciliation of Net Income to EBITDA for business ogee Qi 2003 (USD Millions) Prepaid Consolidated » Net Income $1.4 $15.4 » Taxes 0.4 0.7 - Fx 0.0 1.8 » Interest Expense 0.0 1.6 » Interest Income (0.2) (0.4) » Income from subs (0.1) 0.0 * Gain onU.K. sal
Slide 41: Reconciliation of Revenue & Operating Income Adjusted for UK Sale
Supplemental Data: So Reconciliation of Revenue & Operating Income as Adjusted for UK Sale and Cutsoursing Contract ANY PLACE EFT Processing a Q4 2002 = (USD Millions) Revenue Operating Income «As reported Q4°02 $15.5 $(0.9) » Less: U.K. (4.1) (1.0) » Add: U.K. Outsourcing 0.4 0.4 » Rounding & —_5.1
Slide 42: Reconciliation of EFT Business Segment
97/30/03 Supplemental Data: Reconciliation of EFT Business Segment —— >= >E>E>~_SS_ EE ANY PLACE = (USD Millions) = Total EMEA Asia Pacific » Revenue $12.2 $12.1 $0.1 » Op Income 1.2 1.7 (0.5) + Depreciation q a 0.1 + EBITDA $3.1 $ 3.5 $(0.4) » 14% op income margin in EMEA » 29% EBITDA margin in EME
Slide 43: Reconciliation of EFT Segment's Q1 to Q2 Revenues and Operating Profit
Supplemental Data: ici Reconciliation of EFT Segment’s Q1 to Q2 Revenues & Sporting Profit without One-Time Items ANY PLACE = (USD Millions) a One-time = As reported Items Q1 Adjusted 7 Qt » Revenue $11.9 ($0.8) $11.1 » Operating Income $0.8 ($0.8) $0.0 » Q2 » Revenue $12.2 ($0.2) $12.0 » Operating