1
September 2020
ASX Small and Mid-Cap Conference 2020. September 2020 1 - - PowerPoint PPT Presentation
ASX Small and Mid-Cap Conference 2020. September 2020 1 Disclaimer This presentatjon (Presentatjon) has been This Presentatjon is for informatjon purposes This Presentatjon contains certain forward- Forward-looking statements are not
1
September 2020
2
This presentatjon (Presentatjon) has been prepared by Openpay Group Limited (ACN 637 148 200) (Company). Any references to “Openpay” or “Group” in this Presentatjon refer to the Company and its controlled entjtjes. The informatjon in this Presentatjon contains summary informatjon about Openpay and its actjvitjes as at 31 August 2020, is correct as at the date of this Presentatjon and is of a general nature and does not purport to be
with the Company’s other periodic and contjnuous disclosure announcements lodged with ASX. This Presentatjon has been prepared without taking into account the objectjves, fjnancial situatjon or needs
the basis that you will carry out your own independent inquiries into the matuers contained in this Presentatjon and make your
fjnancial positjon or prospects of Openpay. This Presentatjon is for informatjon purposes
investment advice or a recommendatjon to acquire Company shares. The informatjon in this Presentatjon has been prepared by the Company in good faith and with due care, but the Company does not make any representatjon or warranty, express or implied, as to the fairness, accuracy, correctness or completeness of the informatjon, opinions or conclusions contained in this Presentatjon. The informatjon in this Presentatjon is subject to change without notjce and, subject to any obligatjons under applicable law, the Company does not undertake any obligatjon to update any informatjon contained in this Presentatjon, including any errors or
with it. This Presentatjon includes a number of non-IFRS measures, including EBITDA. These non-IFRS measures are used by management to measure the performance of the business. These measures have not been subject to audit review. This Presentatjon contains certain “forward- looking statements”. Forward-looking statements can generally be identjfjed by the use of words such as “may”, “will”, “expect”, “intend”, “plan”, “estjmate”, “antjcipate”, “believe”, “contjnue”, “objectjves”, “outlook”, “guidance” and similar expressions. Indicatjons of plans, strategies and objectjves or management, sales and fjnancial performance are also forward-looking statements. These statements are based on an assessment of present economic and operatjng conditjons, and on a number of assumptjons regarding future events and actjons that, as at the date of this Presentatjon, are expected to take place. While due care and atuentjon has been used in preparing any forward- looking statements, any such statements,
are based on assumptjons and contjngencies subject to change without notjce, as are statements about market and industry trends, projectjons, guidance and estjmates. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertaintjes and
the control of Openpay. These forward- looking statements are subject to various risk factors that could cause Openpay’s actual results to difger materially from the results expressed or antjcipated in these statements. Readers are cautjoned not to place undue reliance on forward-looking statements, which are current only as at the date of this Presentatjon.
3
The smarter way to pay – our strongly difgerentjated approach.
B2C Buy now. Pay smarter. Merchant – Consumer
Strong & fmexible platgorm. Enables us to deliver the most fmexible plans in the market. Plan lengths of 2–24 months, up to $20,000 Key BNPL vertjcals. Focus on industries where we can make a true difgerence – Automotjve, Healthcare and Home Improvement Target customers. Finance-savvy and of an older demographic who use our plans as a cashfmow management tool
B2B Openpay for Business: Enterprise Merchant – Business Customer
Unique B2B ofgering. Allows companies to manage trade accounts end-to-end, including applicatjons, credit checks, approvals and account management in the one system Launch with inaugural client Woolworths. Revenue from the partnership is expected in H1 FY21 A capital light, low-risk business. It will deliver revenue based on usage which scales with enterprise merchants’ operatjons
4
Some of the ways we delivered on our FY20 strategy.
Local market growth
Strong growth in Australia across all industry vertjcals Record operatjonal and fjnancial results Signifjcant wins of new merchants and integratjon partnerships Sofu launch into new vertjcals: Educatjon and Memberships
Successful UK launch
Strong and rapid growth Signing and launching
JD Sports
Well funded
IPO and ASX Listjng – Dec 2019 UK debt facility
Instjtutjonal placement raises $33.8m at 50% premium to IPO
Launch into B2B
Launch of Openpay for Business
SaaS-based product Signing of three-year deal with Woolworths Group (Woolworths)
Strong people focus
Strengthened Board and Management teams Supported merchants, customers and team members during COVID-19
5
Number of Actjve Plans FY19 FY20 FY18 250k 824k 120k +229% +141% +52% +98% +64% Total Transactjon Value FY19 FY20 FY18 $97.3m $192.8m $60.5m Revenue FY19 FY20 FY18 $11.0m $18.0m $6.8m Number of Actjve Merchants FY19 FY20 FY18 1,420 2,162 896 Number of Actjve Customers FY19 FY20 FY18 133k 319k 82k
Record Actjve Plans up 229% Record Actjve Customers, up 141%, with increased repeat usage Actjve Merchants up 52% Total Transactjon Value (TTV) grew to a record $192.8m in FY20, up 98% Revenue for FY20
EBITDA1 loss before signifjcant items2 of $30.1m well in line with management expectatjons
1. EBITDA is a non-IFRS measure that has not been audited but is a key fjnancial metric used by management to operate the business at the group level. EBITDA represents Earnings Before Interest Tax Depreciatjon and Amortjsatjon. 2. Signifjcant items include fair value calculatjon of fjnancial derivatjves, convertjble notes; share-based payments expense arising on Initjal Public Ofgering; costs of equity raising, IPO and share placement.
6
Signifjcant growth since June 2019 launch.
UK Retail opportunity alone: ~£390b1
Major growth in Openpay UK business from standing start in June 2019 Openpay UK currently trades in
Substantjal opportunitjes exist to move into other Openpay vertjcals Signifjcant growth in Actjve Plans and Actjve Customers Merchant additjons in FY20 included leading brands: The Watch Hut, Masdings and JD Sports. Post year end, The Hut Group
1. United Kingdom Offjce of Natjonal Statjstjcs: Retail Sales, Great Britain, July 2019.
+329% Number of Actjve Plans H1 FY20 H2 FY20 44k 187k Number of Actjve Customers Number of Actjve Plans +223% H1 FY20 H2 FY20 34k 109k Number of Actjve Customers
7
Median age of customers is 38 in ANZ (FY19 39) and 39 in UK Average plan length shortened in FY20 to 3.7 months (FY19 4.0 months) creatjng capital effjciencies Overall ATV has lowered to $272 (FY19 $467) as customers make it routjne to use Openpay across multjple areas of their lives Home Improvement has a signifjcantly higher ATV at an average of $3,919, and now focuses on service led actjvity. Consumer product merchants (e.g. Total Tools) have been transitjoned out of the Home Improvement vertjcal into Retail
Targetjng mature, fjnancially responsible consumers.
Average plan length Customer demographics 20% 20% 9% 25-31 32-38 18-24 53-59 60+ 46-52 39-45 16% 13% 11% 11% Average transactjon value (ATV)
Home Improvement Healthcare Overall Retail
$201 $272 $782 $949 $3,919 3.7 5.3 5.6 14.3 3.5
Parents Home owners Car owners Digital natjves Pet owners
8
Signifjcant pipeline for further growth.
New vertjcals: Educatjon and Memberships
In line with IPO strategy, we conducted a sofu launch into new industry vertjcals: Educatjon and Memberships in H2 FY20
New Actjve Merchants
Launch has been promising with a number of Actjve Merchants established in each new vertjcal
Signifjcant growth pipeline
Also driven by new partnerships with Australian Society of Associatjon Executjves, Sports Community, among others
Hard launch in H1 FY21
With products that specifjcally target the needs of merchants and customers in these vertjcals
Select Educatjon & Memberships Merchants:
9
Leveraging our platgorm capabilitjes and showcasing exceptjonal B2B innovatjon.
A platgorm that unlocks the growth potentjal
Openpay for Business is a unique SaaS-based capital light, low risk, transactjonal product Clearly difgerentjates Openpay from all other BNPL players and fjnancial services providers Major market opportunity across enterprise segment Supportjng Woolworths Australia with their B2B business Platgorm launching in H1 FY21 From account applicatjons through to reconciliatjon and remituance, Openpay for Business is a B2B platgorm that fully digitjses business and trade accounts, end to end
10
Caring for our community.
Actjons we took:
Providing vulnerable customers with fjnancial hardship support Closely supportjng essentjal services merchants to provide relevant support to customers Adjustjng plan settjngs and tjghtening credit rules, strengthening credit risk decisioning and fraud preventjon technology Temporarily reducing Board and employee expenses by 35% to preserve cash
From natjonal bushfjres to COVID-19, it has been a matuer
business and shareholders during these crises.
We acted quickly and fmexibly to enable
Thanks to our strong performance and investor support, our team returned to full tjme hours from 1 July 2020, providing us with the bench strength to contjnue to grow.
11
Well funded for growth and current environment.
Strong demand from equity investors
Strong demand for pre-IPO raise via convertjble note issue of $26.2m Oversubscribed IPO, raised $50m (gross) in December 2019 Instjtutjonal share placement of $33.8m (gross) in June 2020
New and renewed debt facilitjes secured to support growth
Extended the existjng Global Credit Investments (GCI) facility to $40m with a 3-year term New Australian receivables funding facility with 255 Finance for $25m (potentjal to extend to $100m), not due to renew untjl September 2021 Secured UK facility in June 2020 with Global Growth Capital (GGC) for £25m (potentjal to extend to £60m) with a 21-month term
Facility Total Facility Undrawn as at 30 June 2020 GCI AUD $40m AUD $10m 255 Finance AUD $25m AUD $25m GGC GPB £25m GPB £20m Working Capital1 AUD $10m AUD $10m
FY19 Cash + Undrawn Debt FY20 Cash + Undrawn Debt Net Capital Raised New Debt Facilitjes Cash Outglows 220 200 180 160 140 120 100 80 60 40 20 $9m +$103m +$100m $151m
$151m of cash and undrawn debt available
1. Working capital facility provided by A H Meydan Pty Ltd, a related party
12
The view from here looks good!
A strong local market Drive platgorm utjlisatjon and Repeat Customers growth Capitalise on strong positjon in existjng vertjcals (driving revenue from exclusive agreements) Enter strategic partnerships (e.g. merchants, tech platgorm
A global vision Contjnue success and momentum in UK Seek Financial Conduct Authority (FCA) authorisatjon to drive further product diversity Explore other markets to complement current strong growth Platgorm enrichment Generate fjrst revenue from Openpay for Business platgorm in FY21 Extend capabilitjes into new vertjcals (i.e. hard launch in Educatjon and Memberships) Contjnue investment in core platgorm (automatjon, self-service, integratjons), product innovatjons, customer experience and advanced analytjcs
13
Contact: Michael Eidel Managing Director and CEO investors@openpay.com.au