Paysafe Limited · NYSE:PSFE
Paysafe — Optimal Payments — H1 2014 Earnings Presentation
27 slides from Paysafe's earnings presentation, Sep 10, 2014
Slide 1: 2014 Interim Results
2014 Interim Results 10 September 2014
Slide 2: Agenda
Agenda 1. Interim highlights 2. Business performance 3. Corporate strategy 4. Summary
Slide 3: Interim highlights
Interim highlights Strong first half results – significant opportunities ahead • Material increases in revenue and profitability – boosted by World Cup • Balance sheet and cash position strengthened • Progress on strategic initiatives • US acquisitions (completed in July) • NETELLER and Net+ launche
Slide 4: Exceptional Performance
Exceptional Performance Revenue ($m) EBITDA ($m) +34% +54% +50% +127% $159.1 $39.0 +38% $118.4 $25.3 $79.0 +75% $57.4 $11.2 $6.4 H1 2011 H1 2012 H1 2013 H1 2014 H1 2011 H1 2012 H1 2013 H1 2014 • Net Profit for the period $27.4m (H1 2013: $14.4m). • Blended gross margin improved to 55% (H1 2013: 53%)
Slide 5: Cash position
Cash position As at 30 June 2014 US$ m 30 June 2014 31 Dec 2013 Cash and cash equivalents 193.5 164.4 Restricted cash (merchants) 1.8 1.6 Restricted cash (members)* 2.9 4.6 Total Group cash 198.2 170.6 less Merchant cash/deposits (76.6) (76.8) Group “own” cash 121.6 93.8 GROUP FREE CASH 56.1 38.0 5
Slide 6: Balance sheet strengthened
Balance sheet strengthened Group Loans • Group materially debt free (as at end June) • Remaining loans converted and cleared in Jan-2014 with successful placement of c25% shares in issue • New bank debt facility - $150m to fund US acquisitions (repayable over three years) Group Cash • Group cash inc
Slide 7: Agenda
Agenda 1. Interim highlights 2. Business performance 3. Corporate strategy 4. Summary
Slide 8: Business Line KPIs
Business Line KPIs Straight Through Processing Stored Value Merchant Merchant Consumer 100% C. 60% C. 40% Revenue $ 117.4 m Revenue $ 41.4 m Processing Cost Processing Cost Bad Debts Bad Debts Margin 43% $ 50.6 m Margin 87% $ 36.0 m Group Product Margin 55% $ 86.6 m 8
Slide 9: Sustained Business Growth
Revenues H1 2014 H1 2013 Change FY 2013 Stored Value $ 41.4 m $ 28.3 m $ 13.1 m +46% $ 59.8 m Sustained Business Growth NETELLER - Product Line Fees ($m) VIP Focus 46% • Enhanced loyalty cash back program 75% • Increased relationships with VIP Ambassador $41.4 $28.3 • VIP revenue continues to grow +
Slide 10: NETBANX - Product Line Fees
Revenues H1 2014 H1 2013 Change FY 2013 Stored Value $ 117.4 m $ 89.9 m $ 27.5 m +31% $ 193.0 m NETBANX - Product Line Fees • Strong existing customer growth – ($m) 31% particularly in Asia 45% • Increased demand from gaming & non- $117.4 gaming customers $89.9 $61.9 • Continued new merchant acquisi
Slide 11: Agenda
Agenda 1. Interim highlights 2. Business performance 3. Corporate strategy 4. Summary
Slide 12: Progress on strategic initiatives
Progress on strategic initiatives Delivering the present and building the future 1 2 3 4 5 Drive growth Develop Deliver new Position for Inorganic in core multi- white-label US gaming growth business channel propositions opportunity through lines solutions acquisition 12
Slide 13: 1. Drive growth in core business
1. Drive growth in core business Acquiring: Principal Membership with Visa and MasterCard for merchant acquiring in the UK & European Union (launch in Q4 2014) Issuer Scheme Card holder Merchant • Facilitates a more competitive framework with higher margins and profitability – extending the NETBANX
Slide 14: 2. Develop multi-channel solutions
2. Develop multi-channel solutions Integrated payment solutions Manage all payment channels through one central hub Offer customers other options to pay across multiple devices Track customer payments seamlessly across multiple channels Collect customer information for targeted marketing tac
Slide 15: 3. White label propositions
3. White label propositions Deploy our technologies in new markets White label product opportunities: • Net+ Card issuing opportunities (e.g. remittance, general purpose, travel, student, prepaid consumer cards) • NETBANX gateway and processing engine • Mobile enabled digital wallet 15
Slide 16: 4. US gaming opportunity
4. US gaming opportunity Strong and growing presence Processing in all three regulated states: Nevada, New Jersey & Delaware Launched NETELLER and Net+ stored value service (March 2014) Partnerships 16
Slide 17: 5. M&A strategy
5. M&A strategy Enhance growth & diversify the business US acquisitions create significant opportunities: • expand in to the US market • diversify the business • progress on strategic initiatives as a combined entity Financial position improved: cash generative - effectively debt free (prior to US a
Slide 18: Positioned for further growth
Positioned for further growth 18
Slide 19: Positioned for further growth
Positioned for further growth $18+ billion in transaction volume processed in 2013 20+ global acquiring relationships 17 years track record, UK FCA regulated & PCI certified 100+ payment types & multi-currency options 200 countries and territories served 17,000+ corporate customers from various indu
Slide 20: Agenda
Agenda 1. Interim highlights 2. Business performance 3. Corporate strategy 4. Summary
Slide 21: Summary
Summary Continued focus on strategic objectives Exceptional performance in H1 • Significant improvement in NETELLER • Achieved Principal Membership with Visa & MasterCard in EU • Well positioned in US gaming • Strong trading continued in H2 Completed US acquisitions – integration underway Board chan
Slide 22: Appendices
Appendices
Slide 23: Financials
Financials Reconciliation of EBITDA to profit / (loss) before tax In US$ 000 H1 2014 H1 2013 FY 2013 EBITDA 38,992 25,308 52,212 Depreciation and amortisation 7,270 6,519 13,518 Finance costs 9 616 995 Share option expense 2,757 2,197 4,512 Foreign exchange gain (95) (181) (893) Loss on disposal of
Slide 24: Financials
Financials Balance sheet – as at 30 June 2014 US$ millions ASSETS 30-Jun-14 31-Dec-13 EQUITY AND LIABILITIES 30-Jun-14 31-Dec-13 Current assets 356.8 307.9 Current Liabilities 248.3 241.1 Cash and cash equivalents 193.5 164.4 Trade and other payables 99.5 100.8 Restricted cash 1.8 1.6 Payable to NET
Slide 25: Share price performance
Share price performance Share price 8-Sept-2014: 475.50p 52 week intraday high (5-Mar-14): 519.5p 52 week intraday low (13-Aug-13): 185.8p _________ Market cap: £769m ($1,230m*) Fully diluted: £800m ($1,281m*) * Based on $1.6:£ FX rate Issued share capital: 161,748,260 Fully diluted shares: 180,432,
Slide 26: An award winning business
An award winning business Recognised for innovation Winner, Joel Leonoff Winner, Keith Butcher CEO of the Year (March 2014) Finance Director of the Year (2013) Winner: Best General Spend Winner, Best Payment Winner, Payment Solutions Winner, Card Not Prepaid Card, Best Gaming System for Affiliates (
Slide 27: 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 expec