H1 2019 results 1 Disclaimer This presentation has been prepared by - - PowerPoint PPT Presentation

h1 2019 results
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H1 2019 results 1 Disclaimer This presentation has been prepared by - - PowerPoint PPT Presentation

H1 2019 results 1 Disclaimer This presentation has been prepared by Finablr PLC (the "Company" and, together with its subsidiaries, the Group) . This presentation may not be copied, distributed or reproduced, directly or


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SLIDE 1

H1 2019 results

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SLIDE 2

Disclaimer

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This presentation has been prepared by Finablr PLC (the "Company" and, together with its subsidiaries, the “Group”). This presentation may not be copied, distributed or reproduced, directly or indirectly, in whole or in part, or published in whole or in part, for any purpose or under any circumstances, by any person other than the Company. No representation or warranty, express or implied, is made or given in relation to the information set out in this presentation. This presentation does not constitute or form part of, and should not be construed as, any offer, invitation or recommendation to purchase, sell or subscribe for any securities in any jurisdiction and neither the issue of the information nor anything contained herein shall form the basis of or be relied upon in connection with, or act as an inducement to enter into, any investment activity. This presentation does not purport to contain all of the information that may be required to evaluate any investment in the Company or any of its securities and should not be relied upon to form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. The information contained herein is not for release, publication or distribution, in whole or in part, directly or indirectly, or into Australia, Canada, Japan, South Africa or the United States or any jurisdiction in which it would be unlawful to do so. Any failure to comply with this restriction may constitute a violation of applicable securities law and regulations. Persons into whose possession this document comes should

  • bserve all relevant restrictions. Any securities referred to herein have not been, and will not be, registered under the United States Securities Act of 1933.

All statements other than statements of historical facts included in this presentation, including, without limitation, those regarding the Group’s financial position, business strategy, plans and objectives of management for future operations are ‘forward-looking statements’ within the meaning of the United States Private Securities Litigation Reform Act of 1995. The words “believes”, “expects”, “may”, “will”, “could”, “should”, “shall”, “risk”, “intends”, “estimates”, “aims ”, “targets”, “plans”, “predicts”, “continues”, “assumes”, “positioned”, “anticipates” or “might” and similar expressions (or their negative) identify certain of these forward-looking statements. These forward-looking statements and other statements contains in this presentation regarding matters that are not historical facts involve predictions. The forward-looking statements in this presentation are based on numerous assumptions and no assurance can be given that such future results will be achieved; actual events or results may differ materially as a result of risks and uncertainties facing the Group. Forward-looking statements involve inherent known and unknown risks, uncertainties and contingencies because they relate to events and depend on circumstances that may or may not occur in the future and may cause the actual results, performance or achievements of the Group to be materially different from those expressed or implied by such forward looking statements. Many of these risks and uncertainties relate to factors that are beyond the Company's ability to control or estimate precisely, these include, but are not limited to: global and regional economic, social and political changes; fluctuations in foreign exchange rates; rapid technological changes in the financial services market; actions taken by the Group’s competitors, such as consolidation of key competitors; the loss

  • f a trademark or diminution in the perceived quality associated with the Group’s brands; new or existing legal, regulatory and licensing requirements, including anti-money laundering, sanctions and anti-

bribery laws; status of operations of the Group’s computer and communication systems, including the its proprietary processing platforms, as well as third-party systems; and actions of the Group’s agents and third-party partners and service providers. Past performance should not be taken as an indication or guarantee of future results, and no representation or warranty, express or implied, is made regarding future

  • performance. Except as required by any applicable law or regulation, the Group expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements

contained herein to reflect any change in the Group's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. By attending the meeting or call where the presentation is made, or by reading the presentation slides, you agree to be bound by the foregoing limitations. Those attending the meeting where this presentation is made must observe applicable laws and regulations in relation to insider dealing, market abuse and related matters in all relevant jurisdictions.

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SLIDE 3

Overview - Promoth Manghat, Group Chief Executive Officer

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SLIDE 4

H1 2019 Highlights

(US$ Millions, unless stated)

H1 2019 H1 2018 Growth

  • Adj. Group Income 1

742.2 680.5 9.1%

  • Adj. Group EBITDA 2

103.3 81.4 26.9%

  • Adj. EBITDA Margin (%) 3

13.9 12.0 1.9 Processed volumes 64,861 56,707 14.4%

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Note: 1. Adjusted Group Income is calculated as total income, as adjusted for disposed /discontinued operations & non-core operations and impairments, entities not included in the financials but being brought into the group as part of reorganization, 100% of Income from JVs and associates, presented on a Constant Exchange Rate (CER) basis. The constant-currency financial information has been calculated by applying the 2019 period average exchange rate to the Group’s actual performance in the prior period. 2. Adjusted Group EBITDA is calculated as Profit before interest, taxes, depreciation and amortization adjusted as adjusted for disposed /discontinued operations & non-core operations and impairments, entities not included in the financials but being brought into the group as part of reorganization, 100% of Income from JVs and associates and exceptional & one off Costs presented on a CER basis. 3. Adjusted EBITDA margin calculated as Adjusted Group EBITDA / Adjusted Group Income.

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SLIDE 5

Disciplined execution of strategy

Expanding relationships with global partners

  • Partnership with LG to provide in-app digital gifting services via LG Pay using Swych technology
  • Heathrow concession renewed for a further five years

Technology transformation on course

  • On track and on budget execution of technology initiatives

Acquisitions completed, enhancing capability building

  • Bayan Pay shareholding increased to 70%; opens potential in Saudi Arabia
  • Acquisition of PEaaS (US and India) enhances IP based product engineering capabilities

✓ ✓ ✓

Distribution network strengthened

  • Roll-out of kiosks in Middle Eastern markets
  • New partnerships with banks, MTOs and mobile wallet operators

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SLIDE 6

Growing opportunity from increasing mobility and invisible payments

  • Barriers

to entry: Decades

  • f

capability building create barriers that are hard to displace

  • Market Agility: Technology platform allows

modular provisioning and accelerated deployment

  • Fully

invested platform: Economies and Efficiencies of scale enable low marginal costs matched by few in the industry

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Omni-Channel Distribution Network Global Regulatory Licensing Technology

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SLIDE 7

Financial Review – Rahul Pai, Group Chief Financial Officer

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Key Financials - Reported vs. Adjusted

8 (US$ Millions, unless stated)

REPORTED ADJUSTED

H1 2019 H1 2018 H1 2019 H1 2018 Change FY 2018 KEY FINANCIALS

Group Income1 733.6 690.8 742.2 680.5 9.1% 1,472.05 Group EBITDA2 167.9 88.2 103.3 81.4 26.9% 209.95 Net debt3 334.1 n/a 334.1 n/a 564.2 Profit / (loss) for the period (30.1) (9.5) EPS – Basic / Diluted4 (0.05) (0.04)

KEY PERFORMANCE INDICATORS

EBITDA Margin6 13.9% 12.0% 1.9% 14.3% Free Cash Flow7 99.0 n/a 201.7 Usable cash8 486.2 n/a 311.7 Processed volumes 64,861 56,707 14.4% 114,310

Notes: 1. Adjusted Group Income is calculated as total income, as adjusted for disposed /discontinued operations & non-core operations and impairments, entities not included in the financials but being brought into the group as part of reorganization, 100% of Income from JVs and associates, presented on a Constant Exchange Rate (CER) basis. The constant-currency financial information has been calculated by applying the 2019 period average exchange rate to the Group’s actual performance in the prior period. 2. Adjusted Group EBITDA is calculated as Profit before interest, taxes, depreciation and amortization adjusted as adjusted for disposed /discontinued operations & non-core operations and impairments, entities not included in the financials but being brought into the group as part of reorganization, 100% of Income from JVs and associates and exceptional & one off costs presented on a CER basis. 3. Net Debt is calculated as gross debt (comprising borrowings excluding borrowings from related parties) minus usable cash 4. Basic and Diluted Earnings per Share (EPS) are the same. The figure is in US$. 5. FY 2018 numbers restated and presented on a CER basis. 6. Adjusted EBITDA margin calculated as Adjusted Group EBITDA / Adjusted Group Income. 7. Free Cash Flow is calculated as Group Adjusted EBITDA minus maintenance capital expenditure 8. Usable Cash is calculated as reported bank balances and cash minus client money and net due to financial institutions, working capital cash in vaults and tills and other cash, which comprises buffer cash, regulatory cash and bank overdrafts and other relevant short-term bank loans.

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SLIDE 9

Group Adjusted Income and Adjusted EBITDA

Growth across all business segments with B2B and PTS segment growing fastest Income growth on the back of higher processed volumes and stable take rates EBITDA growth due to change in segmental income mix and cost efficiency measures

✓ ✓ ✓

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Notes: 1. Adjusted Group Income is calculated as total income, as adjusted for disposed /discontinued operations & non-core operations and impairments, entities not included in the financials but being brought into the group as part of reorganization, 100% of Income from JVs and associates, presented on a Constant Exchange Rate (CER) basis. The constant-currency financial information has been calculated by applying the 2019 period average exchange rate to the Group’s actual performance in the prior period. 2. Adjusted Group EBITDA is calculated as Profit before interest, taxes, depreciation and amortization adjusted as adjusted for disposed /discontinued operations & non-core operations and impairments, entities not included in the financials but being brought into the group as part of reorganization, 100% of Income from JVs and associates and exceptional & one off costs presented on a CER basis.

  • Adj. Income1 ($Mn)
  • Adj. EBITDA2 $Mn
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SLIDE 10

Cross-Border Payments and Consumer Solutions

Segment Income increased 11.6% contributing to 25.5% of total Income

Growth on the back of higher processed volumes due to market share gains

Continued segmental margin expansion

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Notes:

  • 1. Segment Adjusted Income is calculated as income by segment, as adjusted for entities not included in the financial statements and 100% of JVs and associates and CER.
  • 2. Segment Adjusted EBITDA is calculated as EBITDA by segment, as adjusted for entities not included in the financial statements and 100% of JVs and associates and CER.
  • 3. Segment Adjusted EBITDA margin calculated as Segment Adjusted EBITDA / Segment Adjusted Income.
  • 4. Take rates are defined as Segment Adjusted Income divided by the corresponding processed volumes

Segmental Adj. Income 1 ($Mn) Segmental Adj. EBITDA 2 ($Mn)

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SLIDE 11

Consumer Foreign Exchange Solutions

Segment income increased 3.0% on the back of continued growth in travel and tourism

Income growth driven by stronger margin, channel expansion and new/renewed contracts Continued optimization of the cost base through better contracts terms

✓ ✓ ✓

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Notes:

  • 1. Segment Adjusted Income is calculated as income by segment, as adjusted for entities not included in the financial statements and 100% of JVs and associates and CER.
  • 2. Segment Adjusted EBITDA is calculated as EBITDA by segment, as adjusted for entities not included in the financial statements and 100% of JVs and associates and CER.
  • 3. Segment Adjusted EBITDA margin calculated as Segment Adjusted EBITDA / Segment Adjusted Income.
  • 4. Take rates are defined as Segment Adjusted Income divided by the corresponding processed volumes

Segmental Adj. Income 1 ($Mn) Segmental Adj. EBITDA2 ($Mn)

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SLIDE 12

B2B and Payment Technology Solutions

Continues to be the fastest growing segment, contributing to 21.7% of Group Income EBITDA margin of 37.4%, makes the Segment the largest contributor to Group EBITDA EBITDA expansion benefiting from growth in volumes as marginal costs decrease

✓ ✓ ✓

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Notes:

  • 1. Segment Adjusted Income is calculated as income by segment, as adjusted for entities not included in the financial statements and 100% of JVs and associates and CER.
  • 2. Segment Adjusted EBITDA is calculated as EBITDA by segment, as adjusted for entities not included in the financial statements and 100% of JVs and associates and CER.
  • 3. Segment Adjusted EBITDA margin calculated as Segment Adjusted EBITDA / Segment Adjusted Income.

Segmental Adj. Income 1 ($Mn) Segmental Adj. EBITDA 2 ($Mn)

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SLIDE 13

Contribution to Group Adjusted Income to 25.5% vs 25.0% in H1 2018. Rising volumes across omnichannel network. Segment Adjusted EBITDA reached $56.7 Mn, up 14.0% YoY Contribution to Group Adjusted Income to 25.5% vs 25.0% in H1 2018. Rising volumes across omnichannel network.

  • Historic investments in platform enable reductions in capex
  • Continued investment in digital capabilities and transformation
  • Majority of capex invested in growth of the business

✓ ✓ ✓

(US$ Millions, unless stated)

H1 2019 FY 2018 Growth Capex 39.7 87.3

  • o/w Technology

22.1 56.7

  • o/w Other

17.6 30.6 Maintenance Capex 4.3 8.6

  • o/w Technology

2.0 3.8

  • o/w Other

2.3 4.8 Total 44.0 95.9 Breakdown of Capex

. Note: Capex defined as sum of purchase of property and equipment and purchase of intangible assets. .

Well invested for the future

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SLIDE 14

Free Cash Flow and Useable Cash

  • Note:
  • 1. Free cash flow defined as adj. EBITDA – maintenance capex.
  • 2. Cash conversion defined as (adj. EBITDA – maintenance capex)/adj. EBITDA.
  • 3. Adjusted Group EBITDA is calculated as Profit before interest, taxes, depreciation and amortization adjusted as adjusted for disposed /discontinued operations & non-core operations and impairments, entities not included in the financials but being brought into the group as part of reorganization,

100% of Income from JVs and associates and exceptional & one off Costs presented on a CER basis.

  • .

Contribution to Group Adjusted Income to 25.5% vs 25.0% in H1 2018. Contribution to Group Adjusted Income to 25.5% vs 25.0% in H1 2018.

  • Strong cash conversion rates reflecting limited ongoing capital

requirements with future cash generation benefits from prior investments

  • Increase in usable driven by IPO proceeds, partially offset by

repayment of term loan and pay-outs for acquisitions

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Free cash flow 1 ($Mn) Usable cash as at 30 Jun 2019 ($Mn)

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SLIDE 15

Net Debt

Net Debt as at 30 Jun 2019

Notes:

  • 1. For the purpose of computation of gross debt, the Obligations of Visa B shares amounting to US$18.2million is excluded as this is not covered under any of the existing covenant testing obligations. Moreover, a further US$104.8million

(US$96.6million of current liabilities and US$8.3million of non-current liabilities) of borrowings by the Group’s India operations have also been excluded, as this liability is offset by a corresponding asset in the Group balance sheet for an amount of US$119.5million. Similarly, to the Obligations of Visa B shares, this borrowing is not covered under any of the existing covenant testing obligations

  • 2. Net debt defined as Gross debt net off Net usable cash.
  • 3. The EBITDA used for 30th June 2019 is LTM EBITDA

(US$ Millions, unless stated)

31 Dec 18 30 Jun 19 Changes

Gross Debt 1 876.0 820.3 (55.7) Less: Usable cash (311.0) (486.2) 175.2 Net debt 2 565.0 334.1 (230.9) Adjusted EBITDA 3 210.0 231.8 Leverage 2.7 1.4 (1.3)

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The Group reaffirms the medium-term guidance provided during the IPO

▪ High single digit income growth ▪ Driven by continued double digit growth in Cross Border Payments and Consumer Solutions and B2B and Payment Technology Solutions ▪ These segments expected to represent c. 50% of total income in the medium term ▪ Approaching 20% in the medium term ▪ Driven by mix shift between the segments and segmental margin expansion

  • Adj. income
  • Adj. EBITDA

margin CAPEX Tax

▪ Capex to trend towards 3-4% in the medium term, albeit D&A will likely be slightly higher than capex initially

Leverage

▪ Effective tax rate of 18-20%

  • Leverage to remain at or below 2.5x in the medium term

Dividend

▪ Intend to begin paying dividends with effect from 2020 ▪ Anticipate a progressive dividend policy, with an initial payout ratio of at least 15% of adjusted net income ▪ Dividends will be split approximately one-third / two-thirds between interim and final 16

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SLIDE 17

Technology Updates – Mehul Desai, Group Chief Technology Officer

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SLIDE 18

Finablr Technology Transformation: on track

Mobile apps

3rd Party usability

Web apps IOT Devices / bots Partner systems 3rd party apps

Group usability

Usability

Enterprise Service Bus

Manager Unifier Aggregator

API

Next Generation Platform

Cross Border Payments Foreign Exchange Payments Transactional Platform

Data a lake

Resp esponsi sible le Profil filing & & Ana naly lytic tics

Utility

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SLIDE 19

Finablr’s FinTech and FinServ Organization

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SLIDE 20

Closing Remarks - Promoth Manghat, Group Chief Executive Officer

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SLIDE 21

Summary

Strong results at the upper end of guidance Disciplined execution of strategy Growing opportunity from increasing mobility and invisible payments

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Reaffirm guidance at IPO

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SLIDE 22

Q&A

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SLIDE 23

Appendix

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SLIDE 24

Clearly defined strategy for growth

Continuing to build global strategic partnerships Accelerating market share in digital distribution channels Capturing

  • pportunities in

high-growth markets Growing and enhancing an engaged customer ecosystem Strategic investments, selective bolt-on acquisitions and

  • ngoing

innovation Strategic partnerships Accelerating digital agenda Community building and engagement High growth markets Strategic investments

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SLIDE 25

Reported Income to Adjusted Income Bridge

  • To demonstrate the underlying quality of

the business we present the financials on an adjusted basis.

  • The table illustrates the adjustments made

to reported numbers to bridge the gap to adjusted numbers.

  • The bridge can be summarized under

below categories:

  • Disposed / discontinued and noncore
  • perations and impairments
  • Adjusted perimeter of the group
  • Adjustment for constant exchange rates

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Group Adj. Income For Half Year ended 30 June Group Adj. EBITDA For Half Year ended 30 June 2019 2018 2019 2018

Total Income/Profit before Interest, Taxes, Depreciation and Amortization 733.6 690.8 167.9 88.2 Disposed/Discontinued and non-core operations and impairment (-) Gain on disposals/acquisition of businesses (1.4) (1.4) (-) Non-core travellers cheques (0.9) (1.2) (0.3) (0.5) (-) Net exchange gain (8.1) (4.2) (8.1) (4.2) (-) Interest Income on related party loans (3.4) (6.4) (3.4) (6.4) Continuing activities in the process of being brought into the Finablr perimeter as a part of reorganization (+) Entities not included in HFI 13.8 17.4 0.3 0.6 (+) Adjustments due to JVs 13.3 14.5 2.7 2.4 Exceptional/One-off costs (+) Exceptional / one off costs and write off’s (4.6) 8.0 2.0 (+) Floatation cost 28.1 (-) IFRS 16 Impact (90.6) Adjusted Financials at reported exchange rates 742.2 710.9 103.3 82.2 (-) Constant Exchange Rate Differential (30.4) (0.8) Adjusted Financials at constant exchange rates 742.2 680.5 103.3 81.4

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SLIDE 26

Bridge from reported cash to usable cash

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(US$ Millions, unless stated) H1 2019 2018A

REPORTED CASH 1,926 1,134 (-) Outstanding remittance obligations (98) (64) (-) Due to exchange houses and other financial institutions (61) (63) (-) Ring-fenced cash (400) (318) (-) Customer settlements received in advance (391) (52) (+) Due from exchange houses and other financial institutions 69 83 (-) Client money and net due to FIs (A) (881) (413) (-) Cash in vaults and tills (B) (435) (314) (-) Buffer cash (21) (19) (-) Regulatory cash (19) (24) (-) Indebtedness (bank loan & overdraft) (84) (52) (-) Other (C) (124) (95) NET USABLE CASH 486 312