Paysafe Limited · NYSE:PSFE
Paysafe — Neteller — Desjardins Online Gambling Conference 2006
34 slides from Paysafe's conference presentation, May 15, 2006
Slide 1: Ron Martin, President & CEO, NETELLER
Ron Martin President & Chief Executive Officer, NETELLER © NETELLER. Proprietary and Confidential. www.neteller.com
Slide 2: Agenda
Agenda ► Business overview ► 2005 Highlights & Q1 2006 update ► Financial Performance ► Strategy Update ► Competitive / Regulatory Environment ► Summary and Outlook ► Additional Information © NETELLER. Proprietary and Confidential. www.neteller.com 2
Slide 3: Agenda
Agenda ► Business Overview ► 2005 Highlights & Q1 2006 update ► Financial Performance ► Strategy Update ► Competitive / Regulatory Environment ► Summary and Outlook ► Additional Information © NETELLER. Proprietary and Confidential. www.neteller.com 3
Slide 4: About the Company
About the Company Consumer ► World’s largest independent online money transfer business ; Market leading e-wallet product with instant payments Payment processor with underwriting services TRUST FSA regulated e-money issuer Global presence ► Specialise in markets where money transfer difficu
Slide 5: Differentiation through Core Competencies
Differentiation through Core Competencies Superior Identity Verification We can verify our customers’ identity Personal information provided to just one trusted site Indemnification Of Merchants 100% non-refutable funds Value added services Instant In Real time access for customers through
Slide 6: How the NETELLER service works
How the NETELLER service works Superior Identity Verification Indemnification of Merchants Instant In and Out Credit/Debit Card Processing & Identity Security in development © NETELLER. Proprietary and Confidential. www.neteller.com 6
Slide 7: Global presence
Global presence Calgary, Canada N Am Operations Isle of Man, UK London, UK Hong Kong/Macau Hong Kong / Customer Support Corporate HQ European Asian Product Sales & Marketing operations operations Technology / IT Security Investor Relations © NETELLER. Proprietary and Confidential. www.neteller.com 7
Slide 8: Agenda
Agenda ► Business Overview ► 2005 Highlights & Q1 2006 update ► Financial Performance ► Strategy Update ► Competitive / Regulatory Environment ► Summary and Outlook ► Additional Information © NETELLER. Proprietary and Confidential. www.neteller.com 8
Slide 9: 2005 Business Highlights
2005 Business Highlights 2005 2004 % increase Total Customer Receipts $1,265 m $ 660 m ▲ 92 % Average Daily Receipts $3.44 m $1.81 m ▲ 90 % Average Daily Sign-ups 2,930 1,821 ▲ 61 % Total Customer Base 2,320,670 1,251,031 ▲ 86 % KEY ACHIEVEMENTS - Business in Fast Forward ► FSA certification and rel
Slide 10: 2005 Financial Highlights
2005 Financial Highlights 2005 2004 % increase Revenue $172.1 m $82.6 m ▲ 108 % Gross margin 73.5 % 69.4 % Profit before tax $97.8 m $45.8 m ▲ 114 % Net profit $91.5 m $33.0 m ▲ 177 % Basic EPS $0.76 $0.37 ▲ 105 % Net operating cashflow $96.4 m $45.8 m ▲ 110 % Net cash (Group) $114.6 m $77.0 m ▲ 49
Slide 11: Q1 2006 Update
Q1 2006 Update Q1 2006 Q4 2005 %q-o-q Q1 2005 %y-o-y Revenue $57.9m $53.6m ▲ 8% $34.2m ▲ 69% Gross profit $42.6m $39.5m ▲ 8% $24.9m ▲ 71% Gross margin 73.5% 73.6% 72.7% Profit before tax $27.7m $30.9m ▼10 % $18.2m ▲ 53% Net profit $26.5m $30.9m ▼14 % $16.4m ▲ 62% Total receipts $422.3m $384.6m ▲10 %
Slide 12: Agenda
Agenda ► Business Overview ► 2005 Highlights & Q1 2006 update ► Financial Performance ► Strategy Update ► Competitive / Regulatory Environment ► Summary and Outlook ► Additional Information © NETELLER. Proprietary and Confidential. www.neteller.com 12
Slide 13: Key Business Measures
Key Business Measures Strong growth across all business metrics Seasonal variations in sign ups not reflected in receipts trends © NETELLER. Proprietary and Confidential. www.neteller.com 13
Slide 14: Strong revenue growth and improving margins
Strong revenue growth and improving margins © NETELLER. Proprietary and Confidential. www.neteller.com 14
Slide 15: Transaction Fee Model
Transaction Fee Model © NETELLER. Proprietary and Confidential. www.neteller.com 15
Slide 16: Margins sustained through cost control
Margins sustained through cost control © NETELLER. Proprietary and Confidential. www.neteller.com 16
Slide 17: Cash flow / cash position
Cash flow / cash position © NETELLER. Proprietary and Confidential. www.neteller.com 17
Slide 18: Agenda
Agenda ► Business Overview ► 2005 Highlights & Q1 2006 update ► Financial Performance ► Strategy Update ► Competitive / Regulatory Environment ► Summary and Outlook ► Additional Information © NETELLER. Proprietary and Confidential. www.neteller.com 18
Slide 19: Global Growth Strategy → Market Sector Leadership
Global Growth Strategy → Market Sector Leadership f Renewed focus on customer in the form of innovative products and services DEEPEN Better acquisition, conversion and retention execution Streamlined total user experience Strategic use of contact centre Game-changing merchant value f Expand
Slide 20: Product Release Timelines
Product Release Timelines H1 2006 H2 2006 Q1 2005 EXTEND f German, Spanish, French, Italian f 4 additional European languages - Language translation f Maestro 3D secure - Local payment options f Japan official launch f Australian launch - Phone support f China 1-Pay e-wallet launch DEEPEN - Customer
Slide 21: Japan Official Launch
Japan Official Launch Japan official f 14 Japanese speaking CSRs for f Available Now launch phone and email support f Internet Banking (Local Bank f Live 18 Jan 2006 Transfer) f Japanese Visa/Mastercard f Live 1 March 2006 f JCB launch fExpected H1 2006 © NETELLER. Proprietary and Confidential. www.
Slide 22: China Launch
China Launch 1-Pay e-wallet f NETELLER-like e-wallet developed f Soft launch with payouts to bank accounts f API is available f Launch 1 April 2006 f 9 CSRs in Macau to support calls and e-mail 1-Pay Direct f White-label payment processing f Ongoing © NETELLER. Proprietary and Confidential. www.nete
Slide 23: Agenda
Agenda ► Business Overview ► 2005 Highlights & Q1 2006 update ► Financial Performance ► Strategy Update ► Competitive / Regulatory Environment ► Summary and Outlook ► Additional Information © NETELLER. Proprietary and Confidential. www.neteller.com 23
Slide 24: Competitive Environment
Competitive Environment ► Issuing banks increasingly seeking to avoid high risk types of online markets; still largest competitor ► Smaller competitors with e-wallet solutions ► In-house payment providers of leading merchants offer own wallet solutions ► Does not offer instant and non-refutable fund
Slide 25: Regulatory Considerations
Regulatory Considerations f Online gambling merchants face regulatory risks in many jurisdictions – 82 jurisdictions worldwide regulate online gambling including the UK and IOM f USA prohibitionist stance with some “carve outs” Current Situation Recent Proposals Selective prohibition based Kyl / Lea
Slide 26: Agenda
Agenda ► Business Overview ► 2005 Highlights & Q1 2006 update ► Financial Performance ► Strategy Update ► Competitive / Regulatory Environment ► Summary and Outlook ► Additional Information © NETELLER. Proprietary and Confidential. www.neteller.com 26
Slide 27: Summary and Outlook
Summary and Outlook Another successful year Record customer, revenue and profit growth Implementation of next generation platform almost complete Bench strength in place for next phase of growth Application of significant resources to drive sustainable competitive advantage > User experience >
Slide 28: Business in Fast Forward
Business in Fast Forward Investor Relations Contact: Andrew Gilchrist Vice President Corporate Development & Communications [email protected] } [email protected] + 44 (0) 1293 555 726 © NETELLER. Proprietary and Confidential. www.neteller.com 28
Slide 29: Agenda
Agenda ► Business Overview ► 2005 Highlights & Q1 2006 update ► Financial Performance ► Strategy Update ► Competitive / Regulatory Environment ► Summary and Outlook ► Additional Information © NETELLER. Proprietary and Confidential. www.neteller.com 29
Slide 30: Additional Information
Additional Information ► Detailed Financial Statements © NETELLER. Proprietary and Confidential. www.neteller.com 30
Slide 31: Profit and loss account
Profit and loss account NETELLER PLC Consolidated Income Statement for the year ended 31 December 2005 Year ended 31 Year ended 31 December 2005 December 2004 US$ US$ Revenue 172,055,462 82,580,750 Cost of sales Customer support 12,113,493 7,011,251 Website maintenance 3,326,272 2,618,791 Deposit an
Slide 32: Balance sheet
Balance sheet NETELLER PLC Consolidated Balance Sheet As at 31 December 2005 ASSETS 31 December 31 December 2005 2004 US$ US$ CURRENT Cash and cash equivalents 114,570,429 76,969,314 Restricted cash 16,116,858 1,783,787 Qualifying Liquid Assets held for European customers 31,595,306 - Receivable fro
Slide 33: Balance sheet
Balance sheet NETELLER PLC Consolidated Balance Sheet As at 31 December 2005 LIABILITIES 31 December 31 December 2005 2004 US$ US$ CURRENT Trade and other payables 5,493,711 2,616,196 Payable to European customers 28,891,291 - Taxes payable 3,559,783 9,209,356 Conditional consideration payable 2,608
Slide 34: Cash flow statement
Cash flow statement NETELLER PLC Consolidated Cash Flow Statement for year ended 31 December 2005 Year ended Year ended 31 December 2005 31 December 2004 US$ US$ OPERATING ACTIVITIES Cash generated by operations 108,291,053 49,434,244 Tax paid (11,916,848) (3,587,963) Net cash from operating activit
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