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
H1 2019 results
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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
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Overview - Promoth Manghat, Group Chief Executive Officer
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H1 2019 Highlights
(US$ Millions, unless stated)
H1 2019 H1 2018 Growth
742.2 680.5 9.1%
103.3 81.4 26.9%
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.
Disciplined execution of strategy
Expanding relationships with global partners
Technology transformation on course
Acquisitions completed, enhancing capability building
✓ ✓ ✓
Distribution network strengthened
✓
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Growing opportunity from increasing mobility and invisible payments
to entry: Decades
capability building create barriers that are hard to displace
modular provisioning and accelerated deployment
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
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.
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.
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:
Segmental Adj. Income 1 ($Mn) Segmental Adj. EBITDA 2 ($Mn)
Consumer Foreign Exchange Solutions
Segment income increased 3.0% on the back of continued growth in travel and tourism
Income growth driven by stronger margin, channel expansion and new/renewed contracts Continued optimization of the cost base through better contracts terms
✓ ✓ ✓
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Notes:
Segmental Adj. Income 1 ($Mn) Segmental Adj. EBITDA2 ($Mn)
B2B and Payment Technology Solutions
Continues to be the fastest growing segment, contributing to 21.7% of Group Income EBITDA margin of 37.4%, makes the Segment the largest contributor to Group EBITDA EBITDA expansion benefiting from growth in volumes as marginal costs decrease
✓ ✓ ✓
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Notes:
Segmental Adj. Income 1 ($Mn) Segmental Adj. EBITDA 2 ($Mn)
Contribution to Group Adjusted Income to 25.5% vs 25.0% in H1 2018. Rising volumes across omnichannel network. Segment Adjusted EBITDA reached $56.7 Mn, up 14.0% YoY Contribution to Group Adjusted Income to 25.5% vs 25.0% in H1 2018. Rising volumes across omnichannel network.
✓ ✓ ✓
(US$ Millions, unless stated)
H1 2019 FY 2018 Growth Capex 39.7 87.3
22.1 56.7
17.6 30.6 Maintenance Capex 4.3 8.6
2.0 3.8
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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Free Cash Flow and Useable Cash
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.
requirements with future cash generation benefits from prior investments
✓
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)
Net Debt
Net Debt as at 30 Jun 2019
Notes:
(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$119.5million. Similarly, to the Obligations of Visa B shares, this borrowing is not covered under any of the existing covenant testing obligations
(US$ 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
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%
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
Technology Updates – Mehul Desai, Group Chief Technology Officer
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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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Finablr’s FinTech and FinServ Organization
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Closing Remarks - Promoth Manghat, Group Chief Executive Officer
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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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Appendix
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Clearly defined strategy for growth
Continuing to build global strategic partnerships Accelerating market share in digital distribution channels Capturing
high-growth markets Growing and enhancing an engaged customer ecosystem Strategic investments, selective bolt-on acquisitions and
innovation Strategic partnerships Accelerating digital agenda Community building and engagement High growth markets Strategic investments
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Reported Income to Adjusted Income Bridge
the business we present the financials on an adjusted basis.
to reported numbers to bridge the gap to adjusted numbers.
below categories:
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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
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