Dlocal Limited · NASDAQ:DLO
Dlocal — Investor Day (June 2023)
114 slides from Dlocal's investor day presentation, Jun 8, 2023
Slide 1: Investor Day June 8, 2023
Investor Day June 8, 2023
Slide 2: Agenda
Agenda 01 Building the best financial platform in 05 Growing together with our merchants emerging markets 02 Fueling our growth engine: products, markets and 06 Our powerful financial model merchants 03 Developing new markets and navigating global 07 Q&A regulatory complexity for our clients 04 Delive
Slide 3: Safe Harbor
Safe Harbor This presentation contains certain forward-looking statements. These forward-looking statements convey dLocal’s current expectations or forecasts of future events. Forward-looking statements regarding dLocal involve known and unknown risks, uncertainties and other factors that may cause
Slide 4: Building the best financial platform in emerging markets
Sebastián Kanovich CEO Building the best financial platform in emerging markets Sergio Fogel Co-President and Chief Strategy Officer
Slide 5: We started this journey in 2016
We started this journey in Solving high 2016, understanding the complexity at scale urgent need to connect global merchants with billions of Emerging USD 1.4 TN market opportunity1 Market consumers Note: 1Market opportunity represents estimated total digital payments volume in the countries in which
Slide 6: We are riding a secular trend in emerging markets
We are riding a secular trend as global merchants 10x Developed Markets (DM) population growth 2022-20301 realize the growing power of Emerging Markets: population and urban middle class growth, ~3.5x DM urban GDP growth 2021-20402 remote work and faster payment innovation Source: 1. United Nations
Slide 7: +2BN people covered by dLocal
Emerging Market consumers are young, +2BN people connected, ever more affluent, talented, avid covered by 1 to consume… dLocal And forgotten Note: 1Potential interaction with over 2 billion combined internet users in the countries we serve; estimated figure based on each country population and internet
Slide 8: The problem: What the users want
The problem What the users want Note: Publicly available information 8
Slide 9: Y-Combinator question
Y-Combinator question: You would not believe what emerging market customers go through to buy some products ,, VPNs ,, What do users do or go through UK-issued prepaid cards now because what you're Virtual Phone Numbers making doesn't exist yet? Virtual Addresses Boxes … 9
Slide 10: The problem: without dLocal
O sonny @®= The problem: wrHouT d- local 1API 900+ Payment methods 10
Slide 11: The solution: with dLocal
The problem: wrHouT d- local The solution: witH d-local v dn cuantas cuotas ‘deseas pagar? Total - $ 79.298 3 cuotas de $ 26.433 sin interés 6 cuotas de $ 21.052 con interés de 59.29% mensual 1cuotas de $ 14.956 con interés de 126.32% mensual 1API 900+ Payment methods 11
Slide 12: We have come a long way since 2016
10.6 We have come a long In 2022 we processed 2016 TPV in less than a way since 2016 week 6.0 TPV ($B): +107% CAGR 2.1 1.3 0.3 0.6 0.1 2016 2017 2018 2019 2020 2021 2022 Our team (#): 66 726 12
Slide 13: Our strategy and DNA have enabled consistent growth
Our strategy and DNA have enabled us to consistently deliver outstanding growth REVENUE ($M) Gross profit ($M) Adj. EBITDA1 ($M) and Adjusted EBITDA / Gross profit (%) 76% 76% 70% +96% +78% 56% CAGR CAGR 153 1.7x 99 1.5x 1.5x 42 20 Adj. EBITDA ($M) Adjusted EBITDA / Gross profit (%) Note: 1dLocal has o
Slide 14: Over-delivered vs IPO targets: TPV
As a result, we have TPV ($B) 1.4x also over-delivered by an average of 40% 10.6 from our own internal 1.4x targets at the time of 7.4 the IPO 6.0 4.4 2021 2022 IPO internal targets Actual 14
Slide 15: Over-delivered vs IPO targets: Revenue
As a result, we have Revenue ($M) also over-delivered by 1.5x an average of 40% from our own internal 419 1.4x targets at the time of the IPO 244 279 173 2021 2022 IPO internal targets Actual 15
Slide 16: Over-delivered vs IPO targets: Adjusted EBITDA
As a result, we have Adjusted also over-delivered by EBITDA1 ($M) an average of 40% 1.3x from our own internal targets at the time of 1.4x 153 the IPO 120 99 71 2021 2022 Note: 1 dLocal has only one operating segment. Although Adjusted EBITDA may be commonly viewed as non-IFRS measure in other conte
Slide 17: The culture is our key differentiator
The culture is our key differentiator WE ARE… Obsessed with solving complex payments problems for global merchants in EMs Built for speed at scale, leveraging technology and local knowledge A focused, passionate global team Frugal spenders and careful investors 17
Slide 18: Our One dLocal model
Our One dLocal model enables global merchants to rapidly and easily reach billions of users across Emerging Markets ₦ B/. S/. ₨ ₹ One ₱ R$ AFRICA ASIA LATAM Global COP$ Merchants Rp One API Consumers in E£ PSP MXN$ Emerging Markets Acquiring One platform ARS$ One contract $U Multiple One source of s
Slide 19: The biggest names trust us
The biggest names trust us Among many other global brands! Note: Selection of merchants and merchant logos that we have previously disclosed as existing clients 19
Slide 20: And we are just getting started
And we are just getting started 20
Slide 21: Fueling our growth engine: products, markets & merchants
Fueling our growth engine: products, markets & merchants Maria Oldham VP Corporate Development & IR
Slide 22: Section 1: Market Opportunity
Section 1: Market Opportunity 22
Slide 23: Huge market opportunity
Huge market opportunity Note: Market opportunity represents estimated total digital payments volume in the countries in which we operate. The calculation of market opportunity is based on a report prepared by Americas Market Intelligence, LLC, or AMI, as commissioned by dLocal at the time of its IPO
Slide 24: dLocal's opportunity $1.4TN
<1% dLocal’s opportunity $1.4TN Just scratching the surface Note: Market opportunity represents estimated total digital payments volume in the countries in which we operate. The calculation of market opportunity is based on a report prepared by Americas Market Intelligence, LLC, or AMI, as commissio
Slide 25: Structural Tailwinds
Structural Tailwinds Internet Usage Consumer Spending Growth - EMs vs. DMs E-Commerce Penetration (% of population with internet access) (% of consumer spending - 2022) 22 - 27E CAGR 21% 14% 17% 17% 7% 8% 8% 2x 3x 6x 39x EM DM Source: Euromonitor 25
Slide 26: Tailwinds continuing to drive rapid growth of market
Tailwinds continuing to drive rapid growth of market Note: Market opportunity represents estimated total digital payments volume in the countries in which we operate. The calculation of market opportunity is based on a report prepared by Americas Market Intelligence, LLC, or AMI, as commissioned by
Slide 27: 3-fold growth strategy
What fuels our growth engine? 3-fold growth strategy Merchant-centric approach Growing merchant base Cross-selling High diversification Simplifies complexity Single connection Deep local expertise Product agnostic Geographic expansion New payment methods Local knowledge 27
Slide 28: Axis 1: Product
Axis 1: Product 28
Slide 29: dLocal business today
dLocal business today Building the best Payments Platform for Global Merchants in Emerging Markets unlocking 2B+ potential consumers in Emerging Markets One API Global One platform Merchants One contract AFRICA ASIA LATAM One stop shop in emerging markets Multiple solutions 900+ 40 Improved acceptan
Slide 30: Unique product: addressing multiple problems/complexities
1 Unique product: addressing multiple problems/complexities Fragmented payment systems 2022 local-to-local TPV and methods Payment methods Other than Credit cards Unstable, volatile and complex Other Credit card accounted for two thirds of regulatory environments 59% 41% TPV in 2022 2022 cross-borde
Slide 31: Axis 2: Merchants
Axis 2: Merchants 31
Slide 32: Rapid merchant acquisition
2 Rapid merchant acquisition Total Merchants 600+ +50% CAGR 400+ 300+ 190+ 100+ 50+ 70+ 2016 2017 2018 2019 2020 2021 2022 Note: Total merchants exclude small and medium-sized businesses in our marketplace solution 32
Slide 33: Well-diversified across business verticals
2 Well-diversified across 10.6B business verticals 97% 236% Others2 Travel Exposure to a wide range 176% SaaS of of fast-growing verticals 89% Ride hailing across digital commerce 167% Advertising 6.0B and services 471% On-demand Delivery 109% Streaming 166% Commerce 2.1B 72% Financial Services1 2020
Slide 34: Positive cohort trends across a range of metrics
2 Positive cohort trends across a range of metrics TPV composition Average Countries Average Payment by annual per Merchant Methods cohort ($M) per Merchant Note: Each cohort is comprised of all the merchants that began processing TPV in that annual period, regardless of volume of TPV processed. As
Slide 35: NRR driven by high growth and low churn
2 NRR driven by high growth and low churn 7% 165% ~30% 6% NRR1 Breakdown ~20% 0% 100% Very high NRR shows stickiness of our product 2021 Churn 2 Estimated Organic Estimated increase in New Payment New Geographies 2022 3 6 growth SoW 4 Methods in in the period Existing Geos5 165% NRR as of 2022 Churn
Slide 36: Mapped opportunity among main merchants
Mapped opportunity among main merchants: Huge potential still to be captured 1 current SoW ~10-12% Note: ¹Share of wallet is an average calculated as dLocal’s current TPV for selected merchants divided by these merchant’s mapped opportunity in all countries dLocal operates in. Total wallet data are
Slide 37: Strong growth in share of wallet
2 Strong growth in share of wallet Share of wallet example: one merchant, one geography, one payment method Merchant I Merchant II Merchant III TPV Evolution APM TPV Evolution Credit and Debit Card TPV Evolution Credit and Debit Card 90% 100% 50% Share of Wallet Credit and Debit Share of Wallet Shar
Slide 38: Axis 3: Geographies
Axis 3: Geographies 38
Slide 39: Solid and well thought-out expansion strategy
2 Solid and well thought-out expansion strategy We started by providing a simple payment infrastructure for one client in one country, then grew to add new countries and payment methods, driven by our merchants' needs # of Countries 8 9 12 16 26 35 40 # of Payment 80+ 120+ 200+ 300+ 450+ 700+ 900+ M
Slide 40: Global Company, Global Merchants, Local Expertise
Global Company, Global Merchants, Local Expertise I. Discover II. Launch III. Accelerate Evaluate merchants’ needs Build the team: we bring dLocal Scale volume: leverage sales team to “ambassadors” to the new geo and we grow the region Analyze market attractiveness hire local experts Enhance connect
Slide 41: Opening new geos through building deep local knowledge
Opening new geos through building deep local knowledge CASE EXAMPLES MOROCCO PHILIPPINES Market Entry Fragmented Payment Space 2018 2020 Untapped market lacking robust global e-commerce payment infrastructure Motivated by: Improved Conversion Non-card e-commerce transactions: global streaming and gl
Slide 42: dLocal's Platform: Triggering Network effects
~100K ~5K dLocal's Platform: Triggering Network effects Note: Total network is the product of each of these variables in the specific year: (i) dLocal's current merchant base excluding small and medium-sized businesses in our marketplace solution; (ii) dLocal's total number of operating countries; an
Slide 43: Competitive landscape
Competitive landscape Merchants Product Markets GLOBAL PAYIN PAYOUT CROSS-BORDER LOCAL-TO-LOCAL LATAM AFRICA ASIA Adyen International Limited to international Acquirers enabled cards Global banks Other regional PSPs Local acquirers Limited to single market Note: based on DLO’s internal assessment 43
Slide 44: dLocal positioned to lead in pursuing the $1.4TN market opportunity
dLocal positioned to lead in pursuing the $1.4TN1 market opportunity Unique, difficult to replicate product Exceptional relationships with global customers, who expand with us Outstanding execution in new countries: global outlook and local expertise All this is driving exponential growth in the value
Slide 45: Developing new markets
Jacobo Singer Co-President & COO Developing new markets Moses Sule Head of Growth Africa
Slide 46: Building the best payments platform for global merchants
Building the best Payments Platform for Global Merchants in Emerging Markets ₹ B/. ₱ COP$ AFRICA R$ ₨ ARS$ PSP Acquirer Rp ASIA Global Issuers Merchants E£ S/. MXN$ LATAM ₦ Rp B/. Consumers in Emerging ₹ Markets 46
Slide 47: Navigating global regulatory complexity for our clients
Navigating global regulatory complexity for our clients Gabriela Vieira General Counsel
Slide 48: Building the best payments platform for global merchants
Building the best payments platform for global merchants in Emerging Markets ₹ B/. ₱ COP$ AFRICA R$ ₨ ARS$ PSP Acquirer Rp ASIA Global Issuers Merchants E£ S/. MXN$ LATAM ₦ Rp B/. Consumers in Emerging ₹ Markets 48
Slide 49: Complexity takes different shapes and regulatory adaptability is key
Complexity takes different shapes and regulatory adaptability is key Highly diverse and Ever changing and Local idiosyncrasies complex regulatory evolving legal require country by environment framework country approach 49
Slide 50: One contract: compliance across 40 countries
One contract: compliance across 40 countries One contract Commercial layer dLocal API | No-code tools | Plugins Integration layer Product layer dLocal Core Services Localization layer Brazil | Mexico | Nigeria | India 40 countries Compliance, Tax Management, FX, KYC, Treasury, and more Local partner
Slide 51: All-in-one EM compliance solution for global merchants
Our value proposition is to provide an all-in-one EM compliance solution for global merchants One contract International settlement Local settlement & FX Management FULL LOCAL COMPLIANCE Licenses Fraud and Financial Crime Prevention Tax Management FX Regulatory Updates Note: dLocal does not provide
Slide 52: We deploy regulatory infrastructure to unlock EMs
We deploy regulatory infrastructure to unlock EMs for our merchants Payment License, Registration or Permission Holder Payment License, Registration or Permission in Process Obtained one License, Registration or Permission, additional ones in process. Countries where dLocal operates without need of
Slide 53: Efficiently building EM compliance infrastructure
We have become experts in efficiently building EM compliance infrastructure Months to obtain license after application/market entry: With each new license 14.5 and registration we apply for, we acquire 10.0 experience and know-how, becoming 6.5 6.5 more efficient and optimizing synergies 1.0 Year of Nig
Slide 54: Quick to adapt to local regulatory changes
dLocal is quick to adapt to local regulatory changes and update merchants Merchants can rely on dLocal to navigate the fluctuating reality of emerging markets We provide a stable, adaptable solution throughout dLocal has become a proactive participant in payment regulation evolution in emerging marke
Slide 55: Deep understanding of tax and FX regulation
We have a deep understanding of tax and FX regulation in the markets we operate Multiple tax and FX regulations, multiple exchange rates, highly influenced by macroeconomic conditions As tax authorities understand the importance of ecommerce, the legal framework can evolve quickly dLocal works to sol
Slide 56: Cross border tech-intensive fraud and financial crime prevention
Our solution provides cross border tech-intensive fraud and financial crime prevention Transaction Identity Verification Cooperation with Cross data Monitoring System Systems local authorities among countries powered by Artificial and regions Intelligence 56
Slide 57: Why global merchants choose dLocal
Why global merchants choose dLocal We provide many We reduce regulatory We adapt fast to We use technology local and cross uncertainty in the local changes and and local expertise border compliance markets in which maintain a resilient to not only react, solutions in one we operate solution througho
Slide 58: We are ready to tackle new markets and realities
We are ready to tackle new markets and realities We understand and share the mission with local regulators of empowering Emerging Markets and promoting financial inclusion 58
Slide 59: Delivering tailored solutions at scale
Delivering tailored solutions at scale Federico Mazzoli VP Product
Slide 60: Building the best payments infrastructure for global merchants
Building the best payments infrastructure for global merchants in Emerging Markets ₹ B/. ₱ COP$ AFRICA R$ ₨ ARS$ Rp ASIA Global Merchants E£ S/. MXN$ LATAM ₦ Rp B/. Consumers in Emerging ₹ Markets 60
Slide 61: Payment service provider powering a range of business models
dLocal is the payment service provider of choice powering a range of business models in emerging markets Brazil - Pix Chile - Local Cards Kenya - M-Pesa Philippines - Payouts with Installments to e-wallets Social Network E-commerce Marketplace Music Streaming Payroll 61
Slide 62: Centralizing payment operations from 40+ complex markets
Centralizing payment operations from 40+ complex markets in one place 62
Slide 63: Customer and profit-driven approach to building products
We have a clear, customer and profit-driven approach to building products B2B Native Prioritize new Develop scalable Agile to the core developments by solutions with our Cater to enterprise business impact one-API principle needs & ensure product-market fit Gross Profit as our north star 63
Slide 64: Why choose dLocal over the competition?
Why choose dLocal over the competition? Dlocal Local PSPs Regional PSPs Global PSPs Stone in BR, Mercadopago in Example Adyen, Stripe Prisma in AR LATAM, Xendit in SEA Cross-border Yes, always No Rarely Not always Payments Localized payment Yes, but extremely Yes Yes Very limited methods in EM fragm
Slide 65: dLocal Stack
dLocal Stack is reflected both on our teams and technology Commercial layer One contract Integration layer Reverse APIs & Custom No-code tools dLocal API | | Checkouts & Plugins Product layer Payins, Payouts, Dlocal for Platforms, dLocal Core Services Invoice Collection, Local Issuing, Fraud Preventi
Slide 66: Maximize reach with local acquiring + local payment methods
Maximize reach with local acquiring + local payment methods Before Dlocal With Dlocal Merchant Merchant International Card Acquirer Customers with access to international Local Local Local Payment Local Payment Local Payment Acquirer 1 Acquirer 2 Method 1 Method 2 Method 3 credit card 66
Slide 67: Maximize conversion rates with Smart Routing & Chaining
Maximize conversion rates with Smart Routing & Chaining Merchant Didi Food in MX 2.6pp increase with Smart Router 7pp increase by also enabling Smart Chaining Smart Router If there’s a soft-decline, dynamically chooses the Smart Chaining re-routes to best-performing acquirer the second-best alternat
Slide 68: Solving friction in emerging markets since 2016
Solving friction in emerging markets since 2016 2016 2018 2020 2022 Today Save cards White-label local Multi-currency Refunds for New Smart Router Payins payment methods Tax Management APMs Payment Links Payouts to Payouts via Beneficiary account Payouts digital accounts SFTP validation Local Local I
Slide 69: dLocal for Platforms
Dlocal for Platforms End-to-end suite of products for marketplaces and other platforms One solution for 40+ complex emerging markets Trusted by Note: Selected merchants 69
Slide 70: dLocal for Platforms is designed for flexibility
dLocal for Platforms is designed for flexibility Marketplace Ride-sharing Social Media Split payments and Cross-border Direct-to-seller + wallet-as-a-service Centralized Balance and settlement + card issuing Local + Cross-Border Payout Seller Driver Seller Platform Seller Driver Platform Content Buye
Slide 71: dLocal for Platforms suite of products
dLocal for Platforms suite of products 1 2 3 4 5 Onboarding Accept Platform & KYC Payments Move funds Settlement Management Seamlessly onboard Allow users to pay in Split payments or Manage and Manage a global and verify users at local currency, using transfer funds automate settlements platform fro
Slide 72: The challenge?
The challenge? Make Platforms possible in 40 emerging markets 72
Slide 73: Invoice Collection
Invoice Collection The power of Dlocal now made available to collect payments from large paying customers One solution for 40 complex emerging markets Trusted by Note: Selected merchants 73
Slide 74: Flexible tools for multiple use cases
Merchant-initiated payments Flexible tools for multiple use cases No coding required Local tax management Customer-initiated payments Pay using local rails One solution for 40 complex emerging markets 74
Slide 75: Expanding our target market
With Dlocal for Platforms and Invoice Collection we continue to expand our target market Customer dLocal Merchant Payments Payins Teams Small Customers Small & dLocal for Medium Global Platforms Enterprises business Accounts Enterprise Invoice Receivables Customers Collection teams 75
Slide 76: Growing together with our merchants
Growing together with our merchants John O'Brien CRO
Slide 77: Building the best payments platform for global merchants
Building the best payments platform for global merchants in Emerging Markets ₹ B/. ₱ COP$ AFRICA R$ ₨ ARS$ PSP Acquirer Rp ASIA Issuers Global E£ Merchants S/. MXN$ LATAM ₦ Rp B/. Consumers in Emerging ₹ Markets 77
Slide 78: The biggest names trust us
The biggest names trust us Among many other global brands! Note: Selection of merchants and merchant logos that we have previously disclosed as existing clients 78
Slide 79: Customer obsessed commercial strategy and structure
We are customer obsessed, which reflects on our commercial strategy and structure Dedicated client teams One dLocal Constructive feedback loops with clients Single API/contract: 900+ payment methods in 40+ EMs Regional team structure Proven ability to develop tailor-made solutions “Follow the Sun” cu
Slide 80: Our Go-to-Market strategy has three stages
Our Go-to-Market strategy has three stages: each one with a clear and proven approach 4 Constructive feedback loop New client onboarding Long-standing partnerships – 1 Lead generation 2 3 Land and Expand and integration Inbound and outbound lead Localized Sales teams Designated Account Managers gene
Slide 81: Lead generation
1 Lead generation Inbound lead Events: participation and sponsorship in targeted industry events We target generation Marketing campaigns: tailor-made content to generate awareness potential new and potential leads In-house content generation: Localized content to engage with clients through potenti
Slide 82: New client onboarding and integration
2 New client onboarding Once a lead qualifies as a selling opportunity, and integration we engage the Sales team to close the deal and onboard the new merchant Detailed next Proposal Initial Due diligence communication and commercial negotiation and agreement Integration GO LIVE Live tests Actions Sa
Slide 83: Proposal and commercial negotiation
New client onboarding 2 and integration Identify clear client pain-points and develop solutions Proposal and commercial negotiation: Define pricing schedules based on value dLocal brings to the deal We have a clear commercial strategy that we ask our teams to deploy Prioritize absolute gross profit do
Slide 84: Healthy commercial pipeline
Healthy commercial pipeline, with major deals New client onboarding 2 and integration coming up in both new sales and existing clients Proposal Initial Due diligence and commercial Integration communication and agreement negotiation Global Multi Vertical 0 0 1 2 Regional & vertical champions ≈80 ≈60
Slide 85: Land and expand: new client onboarding
Initial Purchase 3 Long-standing partnerships – Land and Expand Land and expand: new client onboarding Selected merchants examples Note: dLocal analysis. Selected merchants. 85
Slide 86: Land and expand: upselling of new markets and products
Initial Purchase 3 Long-standing partnerships – Land and Expand New Country Land and expand: upselling of new markets and products Selected merchants examples Note: dLocal analysis. Selected merchants. 86
Slide 87: Land and expand: increasing our share-of-wallet
Initial Purchase 3 Long-standing partnerships – Land and Expand New Country Country > 1 M USD/Month Land and expand: increasing our share-of-wallet Selected merchants examples Note: dLocal analysis. Selected merchants. 87
Slide 88: Land and expand: long-lasting and profitable relationships
2nd product in existing country Initial Purchase > 1 M USD/Month 3 Long-standing partnerships – Land and Expand New Country Invoicing Expansion in a New Country Country > 1 M USD/Month Invoicing Expansion in a New Country 2nd product in existing country Land and expand: long-lasting and profitable re
Slide 89: Continuous learning feedback loop
Constructive feedback ecosystem 4 Constructive feedback loop dLocal’s continuous We onboard and … we learn about their pain learning feedback loop successfully partner with the world’s leading and points and develop solutions that meet their high standards most demanding – we then leverage them to p
Slide 90: Commercial structure close to our clients
We have designed our commercial structure to be as close as possible to our clients CRO John O'Brien EMEA APAC CHINA AMERICAS Dedicated teams to each geo Localized client facing teams New Sales Sales Engineers Account Management Customer Success Revenue Operations Support Areas Marketing & SDR 90
Slide 91: Case Example 1: Leading Global Satellite Internet Provider
Case Example 1: Leading Global Satellite dLocal’s expertise Internet Provider Local entities in each of these countries The problem Recurring capabilities in remote places dLocal became their ideal solution The company needed a fast and easy They integrated 11 countries at once expansion in LATAM, A
Slide 92: Case Example 2: Spotify in Nigeria
Case Example 2: The problem dLocal’s solution March 2022: Spotify sales in largest Our local Nigerian team established African market affected overnight – partnerships with local banks to enable local acquiring in Nigerian Naira for Nigerian banks imposed limits on US Spotify, in record time dollar
Slide 93: We win the most significant deals because of our unique value proposition
We win the most One dLocal significant deals Single API/contract: 900+ payment methods in 40 EMs Proven ability to deliver tailor made solutions because of our Distinctive service and expertise through “True Localisation” unique value Local expertise and increased proposition conversion rates Improve
Slide 94: Our powerful financial model
Our powerful financial model Diego Cabrera Canay CFO
Slide 95: Unique Growth + Profit + Cash financial model
We built a unique “Growth + Profit + Cash” financial model 1 2 3 High Gross Profit Growth High Profitability Strong Cash Flow Generation Adjusted EBITDA / Gross Profit FCF / Net Income Conversion2 ‘20-’22 CAGR 83% 76% ‘21-’221 100% ‘21-’22 1Q23 (YoY) 42% 1Q23 74% 1Q23 119% ● Retention and cross-selling ●
Slide 96: High gross profit growth
1 High gross profit growth TPV ($B) Revenue ($M) Gross Profit ($M) 10.6 ANNUAL 419 202 +126% +101% +83% CAGR¹ CAGR¹ CAGR¹ 2020 2021 2022 2020 2021 2022 2020 2021 2022 137 +57% YoY 3.6 +70% YoY +42% YoY QUARTERLY 3.3 118 +16% QoQ 62 +8% QoQ 55 +12% QoQ 87 44 2.1 1Q22 4Q22 1Q23 1Q22 4Q22 1Q23 1Q22 4Q22
Slide 97: High profitability
2 High profitability Adjusted EBITDA ($M) Adjusted EBITDA / Gross Profit (%) 153 ANNUAL 76% 76% +91% CAGR¹ 70% 2020 2021 2022 2020 2021 2022 75% QUARTERLY 45 +38% YoY 73% 74% 40 +13% QoQ 33 1Q22 4Q22 1Q23 1Q22 4Q22 1Q23 Note: ¹CAGRs were calculated for a two year period from 2020 to 2022. Unaudited qu
Slide 98: Disciplined and austere spending culture and lean organization
Driven by disciplined and austere spending culture and lean organization Incremental expenditure focused Initial scale of the G&A team and capabilities Lean organizational structure on technology, sales and expansion to meet public company standards Operational Expenditures ($M) Headcount Opex1 / CA
Slide 99: Strong cash generation
3 Strong cash generation Free Cash Flow - own funds¹ ($M) Free Cash Flow - own funds¹ / Net Income (%) +76% CAGR² Changes in Other Assets 111 158% (*) +64% 127% 39% (*) 75 56 YoY 96% 102% 119% 56 (*) 14 (*) 51% 36 55 42 51% 2020 2021 2022 1Q23 2020 2021 2022 1Q23 Note: ¹FCF is calculated as profit be
Slide 100: Best-in-class financial performance
Best-in-class financial performance 100
Slide 101: We stand out among our peers in each key financial metric
Net Revenue (Gross Profit) 2020-2022 CAGR 83% 74% 63% Peers’ average 48% 48% 39% 8% 47% 185% EBITDA 2020-2022 CAGR We stand out among our peers in each key 91% 82% Peers’ average 45% 47% 45% 35% 3% financial metric EBITDA / Net Revenue (Gross Profit) 2021-2022 76% 61% 61% 58% Peers’ 54% average 44% 19%
Slide 102: 2021-2022 EBITDA / Net Revenue (Gross Profit)
2021-2022 EBITDA / Net Revenue (Gross Profit) 100% 90% 80% 159% 70% 69% Best result for rule 60% 98% 124% 101% of 40 is over 100% 50% 40% 30% 20% 92% 67% 10% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2020-2022 Net Revenue (Gross Profit) CAGR Note: Peers data collected from publicly available financial s
Slide 103: Product, country and service mix determine changes in net take rate
Product, country and service mix determine changes in net take rate 103
Slide 104: Share of revenues and net take rate
Net take rate1 reflects higher share of payouts, local-to-local and country mix Payouts (with lower net take rate) sequentially gained share Local to local (with lower net take rate) sequentially gained share Share of TPV 24% 22% 23% 25% 29% 30% 37% 38% 39% 44% 47% 45% 76% 78% 77% 75% 71% 70% 63% 62%
Slide 105: Take rate driven by mix of products, services and countries
Take rate is mainly driven by mix of products, services and countries 2.1% -0.1% 0.1% 0.1% 1.7% 0.0% 1.7% -0.2% -0.1% 0.0% -0.3% Payout TPV Local to Decrease in AR Payout TPV Cross-border Increase in share +5pp Local TPV TPV share & share +1pp TPV share AR & NG share +10pp increase in MX +2pp TPV sh
Slide 106: Disciplined capital allocation
Disciplined capital allocation 106
Slide 107: Capital allocation strategy designed to maximize shareholder value
Capital allocation strategy designed to maximize shareholder value Organic Growth Strategic Acquisitions Share Buybacks 1 2 3 Technology Commercial distribution As long as returns exceed potential strategic acquisitions Expansion Expansion with focus in Asia and Africa Prudent approach maintaining C
Slide 108: First share buyback program for $100M
Our first share Between Dec-2022 and May 15, 2023, we repurchased: buyback program for $100M started in December 2022 and 4.4 M shares 3.4% will end in July 2023 at an average price of our float of $15 ($67M) The $37M acquired in Q1 23 represented 87% of our own FCF, and therefore our own funds contin
Slide 109: Undervalued on a PEG ratio basis
1.0x PEG 2.1x 2.0x Undervalued on a PEG P/E 2023E ratio basis 0.8x 1.0x 0.6x 1.0x 0.5x Net Income Growth 2024E Source: Capital IQ as of June 5, 2023. Considers consensus estimates for all companies. 109
Slide 110: Financial objectives aligned with pillars of our business model
Financial objectives aligned with pillars of our business model 110
Slide 111: Overall medium term objective: Rule of 40 > 100%
Overall medium term objective: Rule of 40 > 100% For 2023: Maintain annual guidance shared in Q4 ‘22 earnings For medium term: Growth Profitability Cash Flow Generation Focus on gross profit dollars Sustain EBITDA/gross profit ratio Maintain sustainable capex level ● Financial discipline ● Low acquisit
Slide 112: Closing remarks
d-local Closing remarks
Slide 113: On track to build a multi-billion dollar revenue business
On track to build We are going after a massive opportunity a multi-billion in Emerging Markets. dollar revenue Unrivaled global merchant base. business High stickiness. No churn. Highly profitable, cash generative business. Committed to financial inclusion. Passionate global team, obsessed with solvin
Slide 114: d-local
d-local