Paypoint Plc · LSE:PAY
Paypoint — FY2014 Earnings Presentation
63 slides from Paypoint's earnings presentation, May 29, 2014
Slide 1: Results for the year ended 31 March 2014
Dominic Taylor & George Earle 29 May 2014 Results for the year ended 31 March 2014
Slide 2: Agenda
Agenda Results summary 3 Strategy update 4 Financial review 17 Operational review 22 Summary and future developments 31 Appendices 34 2 Results for the year ended 31 March 2014
Slide 3: Results summary
Results summary Net revenue £m • A set of strong results with progress across all parts of the business • Mobile and Online now at the centre of our group capability to create a single multi-channel proposition with a new modern identity 90.4 105.7 113.7 • Net revenue up 7.7%1 and operating profit u
Slide 4: Strategy: An update on Mobile and Online
Strategy An update on Mobile and Online
Slide 5: Change is creating complexity for consumer service organisations
Change is creating complexity for consumer service organisations • The world is changing in almost every aspect ₋ how we shop, pay and get things • Technology is freeing the consumer to demand more choice and convenience ₋ what, how, where and when they want e&m commerce transaction value2 (Forecast
Slide 6: Mobile and Online now in the centre of PayPoint's offer
Mobile and Online now in the centre of PayPoint’s offer Consolidating deep multi-channel payments experience PayPoint Retail Mobile and Online Years of mobile Proven multi- Millions of existing Deep payments experience channel capability accounts experience 6 Results for the year ended 31 March 2014
Slide 7: Our refreshed identity reflects our strategic breadth
Our refreshed identity reflects our strategic breadth - Communicates our brand, not one channel - More modern to support our Mobile and Online credentials - Emphasises the full spectrum of services - All inclusive - Our B2B and Group identity initially - Consumer identity in Retail will change in du
Slide 8: Traditional payment experience
Traditional payment experience: Finish what you are doing and then take time out to pay FRONT END BACK END Consumer Activity Point of Interaction Payment Processing Traditional separation of industries 8 Results for the year ended 31 March 2014
Slide 9: Mobile payment experience
Mobile payment experience: The payment is embedded in the consumer activity 9 Results for the year ended 31 March 2014
Slide 10: We provide consumer experience AND payments expertise
We provide consumer experience AND payments expertise FRONT END BACK END Consumer Activity Point of interaction Payment Processing One, integrated solution 10 Results for the year ended 31 March 2014
Slide 11: PayPoint Mobile and Online: Flexible approach to consumer
PayPoint Mobile and Online: Flexible approach to consumer Our approach is to provide 3 levels of service at the consumer ―front end‖ : Engagement: Value add to the consumer; loyalty Consumer engagement rewards, appropriate advertising and promotion Functionality relating to the activity: Added value
Slide 12: Each consumer registration adds potential for more value
Each consumer registration adds the potential for more value to the consumer, client and PayPoint Mobile advertising New PayPoint Location relevant value added services services Ecosystem of Utility new apps in bills adjacent markets Urban mobility solutions Parking 7 million consumer registrations
Slide 13: Urban Mobility
Urban Mobility: Taxis, bicycle rental, electric vehicles, tolling, transit and parking 13 Results for the year ended 31 March 2014
Slide 14: Energy: Enabling the smart meter revolution
Energy: Enabling the smart meter revolution Smart meter remote screen in home showing consumption data: Online smart meter account under development: Mobile smart meter account enabling a cash payment: 14 Results for the year ended 31 March 2014
Slide 15: Convenience for consumers
Convenience for consumers: Register for one of our services, gain access to more 15 Results for the year ended 31 March 2014
Slide 16: PayPoint's differentiation
PayPoint’s differentiation • True multi-channel capability • Genuine ‗app to bank‘ service proposition for our clients • A mobile company that understands payments • A payment company that understands the consumer 16 Results for the year ended 31 March 2014
Slide 17: Financial review
Financial review
Slide 18: Strong business momentum, improved profitability
Strong business momentum, improved profitability 53 weeks 52 weeks Period ended March 2013 2014 £m £m Net revenue1 105.7 113.7 Other cost of sales (16.0) (16.8) Administrative costs (47.7) (52.7) Share of Collect+ JV (1.0) 0.9 Operating profit2 41.0 45.4 Investment income less costs 0.3 0.8 Profit b
Slide 19: Net revenue bridge between 2014 and prior period
Net revenue bridge between 2014 and prior period £m 116 £1.1m 112 £3.7m £(0.3)m 108 £3.6m £113.7m 104 £105.7m 100 2013 2014 Top-ups Bill and general Mobile and Online Retail services 19 Results for the year ended 31 March 2014
Slide 20: Cash generation and use, with strong conversion of profit to cash
Cash generation and use, with strong conversion of profit to cash 53 weeks 52 weeks Period ended March 2013 2014 £m £m Operating cash flows 47.4 50.8 Working capital 3.3 5.0 Cash generated by operations 50.7 55.8 Tax paid (10.6) (10.4) Net cash inflow from operating activities 40.1 45.4 Net cash use
Slide 21: Financial review - summary
Financial review - summary • Strong balance sheet • Continued growth in: - net revenues - earnings - dividends • Ongoing investment to secure future growth 21 Results for the year ended 31 March 2014
Slide 22: Operational review
Operational review
Slide 23: Retail Payments and Services – UK, Ireland and Romania
Retail Payments and Services – UK, Ireland and Romania • Strongly differentiated, over-the-counter payment proposition Retail as a percentage of group net revenue: • The network: • Over 35,500 convenience stores open until late • Servicing major utilities and service companies with long term contrac
Slide 24: Retail Payments and Services: UK & Ireland
Retail Payments and Services £m UK & Ireland 95 UK & Ireland retail net revenue bridge • Bill and general net revenues continued to show growth 93 91 £3.7m • Retail services net revenue growth driven by parcels, debit/credit and ATM performance £(0.8)m 89 £2.4m £93.1m • Added 700 ATMs, 1,600 debit/c
Slide 25: Retail Payments and Services: Romania
Retail Payments and Services Romania • Bill payment transactions increased by 53.5% helped by the addition of DIGI, one of the larger bill issuers in Romania, and top- Romania 2013 2014 ups by 5.3% Transactions (m) 30.7 44.7 • Bill payment market share 15.3% (March 2014) with significant growth oppo
Slide 26: Collect+
Collect+ • Joint venture with Yodel to transform shopping fulfillment for consumers Collect+ at 100% 2013 2014 • Pioneer and clear market leader in parcel collection and returns through Transactions (m) 7.7 13.6 local shops, as convenient alternatives to home delivery or Post Offices Collect+ revenu
Slide 27: Collect+ customer research
Collect+ • Customer research continues to demonstrate a growing preference for collection point services; customers love • 63% of shoppers would be more likely to use the service (TrustPilot reviews rate service at highest an online retailer if it offers delivery to a rating)* convenient collection
Slide 28: Mobile and Online
Mobile and Online Mobile and Online as a • Mobile and Online now operating as one business bringing together percentage of group net revenue: PayPoint.net, PayByPhone and Adaptis under our new, unified PayPoint group brand 13% • Adaptis acquisition in February adds parking permits and other services
Slide 29: Mobile and Online: Parking vertical
Mobile and Online Parking vertical Parking proposition: • Flagship Mobile and Online consumer product is PayByPhone parking • Leader in mobile parking payments in UK, France, USA and Canada • Processed more than 100 million transactions since launch • Over 7 million users have registered on our syst
Slide 30: Mobile and Online: Payments and consumer services
Mobile and Online Payments and consumer services Consumer Services: • We see opportunity to grow our consumer base beyond parking by Consumer engagement extending into other verticals, most notably urban mobility and utilities • We will also be adding value through consumer engagement. Sector functi
Slide 31: Summary and future developments
Summary and future developments
Slide 32: Summary and future developments
Summary and future developments Current year trading is in line with the company‘s expectations and provides a strong foundation for future growth We will continue to execute our strategy: • Leverage and grow our retail business - retail network expansion - continued development of our retail servic
Slide 33: Results for the year ended 31 March 2014
Results for the year ended 31 March 2014 29 May 2014
Slide 34: Appendices
Appendices
Slide 35: Appendix 1: 10 year trading history
Appendix 1 10 year trading history
Slide 36: 10 year trading history
10 year trading history 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 £m £m £m £m £m £m £m £m £m £m Revenue 89.1 120.0 157.1 212.1 224.4 196.6 193.2 200.0 208.5 212.2 Net revenue 36.9 46.1 57.7 69.9 77.4 77.4 82.7 90.4 105.7 113.7 Profit before tax 8.1 20.3 26.6 30.4 34.6 32.6 34.5 37.2 41.3 46.
Slide 37: Appendix 2: The 'essence' of what we do
Appendix 2 The ‘essence’ of what we do
Slide 38: The 'essence' of what we do
The ‘essence’ of what we do • We process high volume consumer transactions, for multi-channel payments and retail services (e.g. parcels) for clients in vertical markets, through integrated flexible platforms • Payments are typically low value and cover retail, internet and mobile, with money flowin
Slide 39: Appendix 3: PayPoint Intelligent Commerce Platform
Appendix 3 PayPoint Intelligent Commerce Platform
Slide 40: Intelligent Commerce Platform is modular, functionally rich, scalable and secure
PayPoint’s Intelligent Commerce Platform is modular, functionally rich, scalable and secure The PayPoint Intelligent Commerce Platform is the new name for PayPoint‘s underlying Mobile PAYPOINT INTELLIGENT COMMERCE PLATFORM and Online technology offering to clients. It brings together rich existing f
Slide 41: Consumer Experience and PayByPhone
PayPoint Intelligent Commerce Platform: Consumer Experience and PayByPhone Consumer Experience products include: • Cashless parking: Phone parking service that reduces costs, increases revenue and delights customers • Parking permits: Paper and virtual permits with cash and cashless payment options
Slide 42: Advanced Payments
PayPoint Intelligent Commerce Platform: Advanced Payments Advanced Payments products include: • Hosted Cashier: Our new Hosted Cashier is one of the most powerful hosted solutions on the market. It removes PCI and hosting difficulties, delivers full payment page control, enables a fast one- click ch
Slide 43: Smart Controls
PayPoint Intelligent Commerce Platform: Smart Controls Smart Controls products include: • FraudGuard: Before clients can automate decision making, they need to have a fairly good idea of the decisions that need to be made. FraudGuard simplifies risk management for clients. From transaction scoring,
Slide 44: Intelligent Reporting
PayPoint Intelligent Commerce Platform: Intelligent Reporting Intelligent Reporting products: Designed with simplicity in mind, our Intelligent Reporting tools are entirely standalone, meaning they can be used with transactions processed via PayPoint as well as through any other provider. Clients ca
Slide 45: Appendix 4: Materials to support consumer transactions – UK Retail
Appendix 4 Materials to support the consumer transactions – UK Retail
Slide 46: UK Retail: Client payment media
Materials to support the consumer transactions UK Retail: Client payment media Appendix 4
Slide 47: UK Retail: Retail store
Materials to support the consumer transactions UK Retail: Retail store Appendix 4
Slide 48: UK Retail: Retailer external signage
Materials to support the consumer transactions UK Retail: Retailer external signage Appendix 4
Slide 49: UK Retail: In store merchandising
Materials to support the consumer transactions UK Retail: In store merchandising Appendix 4
Slide 50: UK Retail: Terminals and ATMs
Materials to support the consumer transactions UK Retail: Terminals and ATMs Appendix 4
Slide 51: UK Retail: Receipts
Materials to support the consumer transactions UK Retail: Receipts E Top-up Sample SPAR Tag E Voucher Utility Payment Transport Ticketing Appendix 4
Slide 52: UK Retail: PPOS virtual terminal
Materials to support the consumer transactions UK Retail: PPOS virtual terminal Appendix 4
Slide 53: Appendix 5: Materials to support consumer transactions - PayByPhone
Appendix 5 Materials to support the consumer transactions - PayByPhone
Slide 54: PayByPhone: Parking payment: IVR, SMS, mobile web
Materials to support the consumer transactions PayByPhone: Parking payment: IVR, SMS, mobile web Appendix 5
Slide 55: PayByPhone: Les Taxi Bleus
Materials to support the consumer transactions PayByPhone: Les Taxi Bleus 3883 Appendix 5
Slide 56: Appendix 6: Materials to support consumer transactions – Collect+
Appendix 6 Materials to support the consumer transactions – Collect+
Slide 57: Collect+ website
Materials to support the consumer transactions www.collectplus.co.uk Appendix 6
Slide 58: Collect+ parcel delivery
Materials to support the consumer transactions www.collectplus.co.uk – parcel delivery Appendix 6
Slide 59: Collect+ parcel returns
Materials to support the consumer transactions www.collectplus.co.uk – parcel returns Appendix 6
Slide 60: Collect+: phone pick up barcode
Materials to support the consumer transactions Collect+: phone pick up barcode Appendix 6
Slide 61: Collect+: UK network
Materials to support the consumer transactions Collect+: UK network Collect+ live agents • Target network density - 1 Mile urban - 5 Mile rural Almost 5,600 locations live Appendix 6
Slide 62: Appendix 7: Consumer research – Collect+
Appendix 7 Consumer research – Collect+
Slide 63: Consumer research – Collect+
Consumer research – Collect+ Annual market growth of UK Click & Collect volume* Market volume (million parcels) 165 129 97 68 46 30 2012 2013 2014 2015 2016 2017 If customers could choose alternative delivery locations, 40% would select locations consistent with the PayPoint/Collect+ network (2012: