Paysafe Limited · NYSE:PSFE
Paysafe — Neteller — H1 2005 Earnings Presentation
25 slides from Paysafe's earnings presentation, Sep 2, 2005
Slide 1: Interim Results 2005
Speed, simplicity and innovation Quoted On AIM market, London Ticker / EPIC: “NLR” Interim Results 2005 2 September 2005
Slide 2: Agenda
► Highlights ► Financial Overview ► Strategy Update ► Summary and Outlook ► Additional Information 2
Slide 3: H1 2005 (vs H1 2004)
H1 2005 (vs H1 2004) Revenue: US $73.5 million (up 122%) EBITDA: US $42.9 million (up 124%) Gross margin: 73.2% (69% in H1 2004) Profit before tax: US $40.6 million (up 126%) Net profit: US $37.0 million (up 210%) Net margin: 50.3% (36.0%) Basic EPS(1): US $0.31 Signed up users: 1.75 million (up 101
Slide 4: Continued strong growth, investment and global expansion
4 Continued strong growth • Customer base at 1.75 million – doubled from H1 2004 • ‘Coat tailing’ on strong gaming sector adoption • Merchant base exceeds 1,700 • Strong trading momentum in H1 2005 expected to continue throughout year with sustained margins 4 Investment in business to sustain growth
Slide 5: 1.75 million signed up customers at 30 June 2005
Revenue (US $’000) Customers (‘000) 45,000 2,000 40,000 1,800 Revenue Customers 1,600 35,000 1,400 30,000 1,200 25,000 1,000 20,000 800 15,000 600 10,000 400 5,000 200 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2002 2003 2004 2005 ► 1.75 million signed up customers at 30 June 2005 – up 101% y-o-y
Slide 6: Financial Overview
: > The Fastest Way to Pay and Be Paid Online Financial Overview
Slide 7: Each $1 of Customer Receipts
FEES 45 % 27 % 14 % 14 % CUSTOMERS ONLINE MERCHANTS Each $1 Of $0.1349 $0.0987 $0.068 Customer Revenue Gross Profit Net Income Receipts 7
Slide 8: Income Statement
HALF HALF Unaudited figures in US Dollars YEAR 2005 YEAR 2004 Change Revenues 73,484,674 33,124,074 122% Direct Costs 19,707,519 10,244,756 92% Gross Profit 53,777,155 22,879,318 135% Operating Expenses 13,134,581 4,928,642 Profit Before Tax 40,642,574 17,950,676 126% Income Taxes 3,675,208 6,018,19
Slide 9: Balance Sheet at 30 June 2005
Unaudited figures In US Dollars 30 June 2005 31 December 2004 Assets Current 101,961,058 81,278,410 Non-current 26,117,161 10,640,075 128,078,219 91,918,485 Liabilities Current 6,228,591 11,825,551 Non-current 2,602,742 - 8,831,333 11,825,551 Shareholders’ Equity 119,246,885 80,092,933 128,078,219 9
Slide 10: Cash Flow Statement
Six months ended Six months ended Unaudited figures In US Dollars 30 June 2005 30 June 2004 Cash generated by Operations 44,055,437 38,033,399 Income Tax paid (15,244,719) - Net cashflow from Operating 28,810,718 38,033,399 Activities Investing Activities (25,409,137) (2,566,786) Financing Activitie
Slide 11: Strategy Update
: > The Fastest Way to Pay and Be Paid Online Strategy Update 11
Slide 12: Focus On Market Sector Leadership
4 Establish global footprint as online payment service provider • ‘Coat tailing’ on strong gaming sector adoption • Continued European and Asian expansion • Implementation of next generation, web-based platform with new level of functionality (e.g. mobile enabled, internationalised, multi-currency d
Slide 13: Regional goals: Europe, North America, Asia
Europe ► Triple current customer base North America ► Build profitable operations in 12 ► Increase current customer countries base by 80% ► Establish profitable bank ► Achieve productivity gains partnership Asia ► Migrate to next generation system ► Establish first-mover advantage ► Integrate e-wall
Slide 14: H1 2005 achievements and H2 2005 through 2006 plans
H1 2005 H2 2005 through 2006 9 Strong growth continues ► Continue investment in quality 9 Income tax rate reduced to people to drive growth less than 10% ► Continue Asian and European 9 Commence Asian business expansion with Japanese platform and ► Pursue strategic acquisition Quick Access opportuni
Slide 15: Q & A Session
: > The Fastest Way to Pay and Be Paid Online Q & A Session 15
Slide 16: Additional Information
: > The Fastest Way to Pay and Be Paid Online Additional Information 16
Slide 17: Payment Options
1. Go To Merchant Site & Select CUSTOMER NETELLER Payment Option 2. Sign Up 3. Load Account (InstaCash Option) 4. Transfer To 6a. Withdraw e-Wallet 5. Transfer From OTHER POS ONLINE PAYMENT MERCHANT OPTIONS 6b. Pay For Goods & Services At POS 7. Transfer To Peer PEER 17
Slide 18: Identity verification, indemnification, instant in and out
f Superior Identity Verification • We can verify our customers’ identity • Personal information provided to just one trusted site f Indemnification Of Merchants • 100% non-refutable funds f Instant In • Customers can access funds in their e-wallets in real time f Instant Out • NETELLER’s ATM/debit c
Slide 19: Benefits for customers
f Instant access to funds for online purchases or withdrawals (via ATMs) f “Anytime, anywhere” access to NETELLER account f Fastest and most convenient way to transfer funds both to and from multiple merchants f Access to overwhelming majority of global gaming merchants f Security of personal inform
Slide 20: Benefits for merchants
f Fully indemnified funds from NETELLER customer accounts f Settlement in multiple countries and currencies, including two-way transfers of funds f Secure funds in segregated trust accounts f Single-point accounting with regulatory compliance handled by NETELLER (NETELLER UK Ltd regulated by FSA) f
Slide 21: Regulation and online gambling legal environment
f NETELLER (UK) Limited is a FSA-regulated e-money issuer • Regulated status ‘passported’ to 28 EEA states f Online gambling merchants face regulatory risks in many jurisdictions • 82 jurisdictions worldwide regulate online gambling • The USA pursues prohibitionist stance with some ‘carve outs’ f US
Slide 22: Competition
f Does not serve gaming industry (US based) f Smaller competitors with e-wallet solutions f Issuing banks increasingly seeking to avoid “high risk” types of online markets; still largest “competitor” f Does not offer instant and non-refutable funds to merchants f Do not offer indemnified or instant
Slide 23: Share price and market capitalisation
f Share price at 845p, up 320% since IPO at 200p (April 2004) f Market capitalisation now in excess of £1 billion (US$ 1.8 billion) f Second largest company on AIM market, behind Sportingbet f Examine possible move to LSE Full List during 2006 23
Slide 24: Management team
Gordon Herman, MBA (President and Chief Executive Officer) - appointed COO in September 2002, Gord has significant operational and management experience, including prior appointments as President of General Electric Capital Leasing Inc. Canada (a division of General Electric), Chairman of Madison Co
Slide 25: Notes and forward-looking statements
The principal operating currency of the Group is US dollars and accordingly the financial statements have been prepared in US dollars. The interim results for the period ended 30 June 2005 are unaudited and do not constitute statutory accounts within the meaning of the Isle of Man Companies Acts 193