Lesaka Technologies, Inc. · NASDAQ:LSAK
Lesaka Technologies — Net1 UEPS Technologies — Q3 2018 Earnings Presentation
33 slides from Lesaka Technologies's earnings presentation, May 2018
Slide 1: Q3 2018 Investor Presentation
Q3 2018 Investor Presentation www.net1.com
Slide 2: Safe Harbor Statement
Safe Harbor Statement The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for certain forward-looking statements so long as such information is identified as forward-looking and is accompanied by meaningful cautionary statements identifying important factors that could caus
Slide 3: Defined Terms
Defined Terms Unless specifically noted otherwise within this presentation, the following terms are hereby defined as follows: Constant Currency: We analyze our results of operations both in U.S. dollars, as presented in the consolidated financial statements, and supplementally in ZAR, because ZAR i
Slide 4: Financial Highlights
FINANCIAL HIGHLIGHTS Third Quarter 2018
Slide 5: Q3 2018 Financial Report: Quarterly Financial Highlights
Q3 2018 Financial Report Quarterly Financial Highlights • Revenue - $162.7 million • 10% increase from $147.9 million in Q3 2017 • 1% decrease on a constant currency basis • Adjusted EBITDA - $34.3 million • 5% decrease from $36.3 million in Q3 2017 • 21% Adjusted EBITDA Margin compared to 25% in Q3
Slide 6: Q3 2018 Financial Report: Year to date Financial Highlights
Q3 2018 Financial Report Year to date Financial Highlights • Revenue - $463.7 million • 2% increase from $455.0 million in 2017 • 5% decrease on a constant currency basis • Adjusted EBITDA - $102.8 million • 12% decrease from $116.14million in 2017 • 22% Adjusted EBITDA Margin compared to 26% in 201
Slide 7: Business Segment Results – Third quarter
Q3 2018 Financial Report Business Segment Results – Third quarter 3Q constant currency SATP Revenue 3Q USD ITP Revenue R 878 $46 $48 R880 R 846 ZAR Millions $46 $ Millions R860 $42 R840 $44 $41 R 800 R820 $42 R800 $40 6% 4% R780 $38 2% 11% R760 $36 2016 2017 2018 2016 2017 2018 3Q constant currency
Slide 8: Business Segment Results – Third quarter
Q3 2018 Financial Report Business Segment Results – Third quarter USD Revenue Operating Income Operating Margin (Millions) 3Q 2018 3Q 2017 3Q 2018 3Q 2017 3Q 2018 3Q 2017 SATP $ 73.5 $ 64.0 $ 12.7 $ 15.5 17% 24% % Change* 4% (26%) ITP 46.2 41.5 (14.9) 2.0 (32%) 5% % Change* (7%) (784%) FIAT 59.6 56.
Slide 9: Business Segment Results – Year to date
Q3 2018 Financial Report Business Segment Results – Year to date USD Revenue Operating Income Operating Margin (Millions) YTD 2018 YTD 2017 YTD 2018 YTD 2017 YTD 2018 YTD 2017 SATP $ 204.1 $ 181.4 $ 38.5 $ 44.5 19% 25% % Change* 13% (13%) ITP 136.4 131.7 (14.6) 11.7 (11%) 9% % Change* 4% (225%) FIAT
Slide 10: Balance Sheet Overview
Q3 2018 Financial Report Balance Sheet Overview USD (Millions) Mar 31, 2018 June 30, 2017 Cash $ 87.2 $ 258.5 Investments and Equity Accounted Investments 427.7 52.0 Total Assets 1,398.0 1,450.8 Total Equity 830.0 708.0 Total Debt 75.5 16.2 Book Value / Share 12.64 12.51 Net Cash / Share $ 0.21 $ 4.
Slide 11: Key Investments
Q3 2018 Financial Report Key Investments % held Balance Sheet Value (Mar 2018) Equity Accounted: DNI 49% $102 million >$102 million (1) Bank Frick 35% $52 million >$52 million (1) Finbond (JSE listed) 26% $34 million $74 million (2) OneFi 25% $5 million >$5 million (1) Investments: Cell C 15% $207 m
Slide 12: Business Overview: South African Transaction Processing
BUSINESS OVERVIEW SOUTH AFRICAN TRANSACTION PROCESSING Third Quarter 2018
Slide 13: SATP Segment Highlights
SATP Segment Highlights Q3 2018 Financial Highlights • Revenue - $73.5 million • 15% increase from $64.0 million in Q3 2017 • 4% increase on a constant currency basis • Operating Income - $12.7 million • 18% decrease from $15.5 million in Q3 2017 • 26% decrease on a constant currency basis 13
Slide 14: SATP Segment Highlights (cont.)
SATP Segment Highlights (cont.) Q3 2018 Key Trends • Social Grant Distribution • Marginal increase in the average number of grants paid during the quarter • CPS has extended its full support to government and SA citizens and in the interim continues to deliver uninterrupted service Number of Social
Slide 15: SATP Segment Highlights (cont.)
SATP Segment Highlights (cont.) Q3 2018 Key Trends continued… Number of transactions per channel through which grants were paid the latest quarter Distribution Channels 8.0% 21.4% 17.8% 2.3% 50.5% NET1 ATM NET1 CPS NET1 POS NPS ATM NPS POS 15
Slide 16: SATP Segment Highlights
SATP Segment Highlights Q3 2018 Key Trends EasyPay Number of EasyPay Transactions 150 145 140 135 Millions 130 125 120 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Total 16
Slide 17: Business Overview: International Transaction Processing
BUSINESS OVERVIEW INTERNATIONAL TRANSACTION PROCESSING Third Quarter 2018
Slide 18: ITP Segment Highlights
ITP Segment Highlights Q3 2018 Financial Highlights • Revenue - $46.2 million • 11% increase compared to $41.5 million in Q3 2017 • Operating loss - $14.9 million • decrease from $2.0 million operating income in Q3 2017 • Adjusted operating income of $2.4 million, an increase of 20% compared with Q3
Slide 19: ITP Segment Highlights
ITP Segment Highlights Q3 2018 Key Trends • South Korea and Rest of the World (ROW) Growth • South Korea revenue continues to be adversely impacted by pricing impact of interchange regulation • MP revenue improved due to growth in processing volumes and value • ROW initiatives and investment startin
Slide 20: Business Overview: Financial Inclusion & Applied Technologies
BUSINESS OVERVIEW FINANCIAL INCLUSION & APPLIED TECHNOLOGIES Third Quarter 2018
Slide 21: FIAT Segment Highlights
FIAT Segment Highlights Q3 2018 Financial Highlights • Revenue - $59.6 million • 5% increase from $56.9 million in Q3 2017 • 5% decrease on a constant currency basis • Operating Income - $15.0 million • 6% increase from $14.1 million in Q3 2017 • 4% decrease on a constant currency basis • EPE Accoun
Slide 22: FIAT Segment Highlights
FIAT Segment Highlights Q3 2018 Key Trends Expect growth to be driven by new initiatives with Cell C/DNI Quarter End Value of Number of EPE Accounts Loans Outstanding 2.5 1,400 2.0 1,200 1.5 1,000 Millions 1.0 800 Millions 0.5 600 0.0 400 200 0 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Number of ind
Slide 23: Net1 Opportunities
NET1 OPPORTUNITIES ——— NET1 74
Slide 24: South Africa – Biggest Near Term Opportunity
South Africa – Biggest Near Term Opportunity SOUTH AFRICA IS NET1’S CORE MARKET, ONE IN WHICH WE HAVE MAXIMUM EXPERTISE, INFRASTRUCTURE AND DISTRIBUTION. WE ARE EXPANDING OUR CUSTOMER BASE AS WELL AS THE PRODUCTS PROVIDED TO THAT BASE. Q3 2018 PROGRESS UPDATES: EPE Portable work stations & additiona
Slide 25: Blockchain and Cryptocurrencies
Blockchain and Cryptocurrencies Q3 2018 PROGRESS UPDATES: It is a little known or understood fact that the UEPS technology has always Net1/ IPG / Bank Frick been based on a form of blockchain • are combining expertise and abilities to technology. We have always referred implement a next generation,
Slide 26: IPG Consolidation and Expansion
IPG Consolidation and Expansion IPG PLAYS AN INTEGRAL ROLE IN PROVIDING END-TO-END SOLUTIONS FOR ISSUING, ACQUIRING AND PROCESSING GLOBALLY. Q3 2018 PROGRESS UPDATES: Card Processing Volume ($Mil) 120 • Consolidation of various business units largely 100 complete with appropriate management structur
Slide 27: Summary & Outlook
SUMMARY & OUTLOOK Third Quarter 2018
Slide 28: Fiscal 2018 Guidance
Fiscal 2018 Guidance • 2018 GUIDANCE: Fundamental EPS of at least $1.61, assuming • USD/ZAR rate of 13.62 • 56.6 million shares, and • tax rate of 34-36%. • Impact of Cell C fair value adjustment on FEPS guidance • Cell C fair value adjustment of $0.52 increases guidance to over $2.00 for fiscal 201
Slide 29: Appendix A
Appendix A ——— NET1 Sar 5
Slide 30: Reconciliation of non-GAAP measures
Reconciliation of non-GAAP measures Third quarter Three months ended Mar-18 Mar-17 $ '000 EPS, basic $ '000 EPS, basic Fundamental net income (Non-GAAP) 53,759 0.95 23,468 0.43 Net unrealized income on asset available for sale, net of tax (29,366) - Impairment loss (19,865) - Amortisation of intangi
Slide 31: Reconciliation of non-GAAP measures
Reconciliation of non-GAAP measures Year to date – Fundamental net income Nine months ended Year ended Mar-18 Mar-17 Jun-17 $ '000 EPS, basic $ '000 EPS, basic $ '000 EPS, basic Fundamental net income (Non-GAAP) 100,656 1.77 71,859 1.34 94,721 1.74 Net unrealized income on asset available for sale,
Slide 32: Reconciliation of non-GAAP measures
Reconciliation of non-GAAP measures Year to date – EBITDA Nine months ended Year ended Mar-18 Mar-17 Jun-17 $ '000 EPS, basic $ '000 EPS, basic $ '000 EPS, basic Net income attributable to Net1 (GAAP) 32,114 0.57 61,665 1.15 72,954 1.34 Non-controlling interest 903 1,826 1,694 Earnings from equity-a
Slide 33: Thank you!
4 m - — Thank you! www.netl.com
Net1 UEPS Technologies — Q3 2018 Earnings Presentation on 6ix