MANAGEMENT
PRESENTATION
2018 HALF YEAR RESULTS
MANAGEMENT PRESENTATION 2018 H ALF Y EAR R ESULTS SAFE HARBOR - - PowerPoint PPT Presentation
MANAGEMENT PRESENTATION 2018 H ALF Y EAR R ESULTS SAFE HARBOR STATEMENT Net Element, Inc. is traded on the NASDAQ Capital Market under the >cker symbol NETE This presenta>on is for discussion purposes only. All prices and rates
2018 HALF YEAR RESULTS
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Net Element, Inc. is traded on the NASDAQ Capital Market under the >cker symbol “NETE”
This presenta>on is for discussion purposes only. All prices and rates referenced herein are indica>ve and subject to market condi>ons. The material is based upon informa>on that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such. The material available in this presenta>on may contain forward-looking statements, which are subject to risks, uncertain>es and assump>ons. In some cases, you can iden>fy these statements by forward-looking words such as “may”, “might”, “will”, “should”, “expect”, “plan”, “an>cipate”, “believe”, “es>mate”, “predict”, “op>mis>c”, “poten>al”, “future” or “con>nue”, the nega>ve of these terms and other comparable terminology. Such forward-looking statements are based on current plans, es>mates and expecta>ons and are made pursuant to the Private Securi>es Li>ga>on Reform Act of 1995. Forward-looking statements are based
achievements may differ materially from any future results, performance, or achievements expressed or implied by such forward- looking statements. We do not assume responsibility for the accuracy or completeness of any forward-looking statement and you should not rely on forward-looking statements as predic>ons of future events. We are under no duty to update any of these forward- looking statements to conform them to actual results or revised expecta>ons. This presenta>on contains certain non-GAAP financial measures determined by methods other than in accordance with generally accepted accoun>ng principles. Such non-GAAP financial measures include: general and administra>ve expense before non-cash compensa>on expense. Management uses these non-GAAP financial measures to assess the performance of Net Element’s core
to assist investors in evalua>ng Net Element’s opera>ng results. These non-GAAP financial measures should not be considered as a subs>tute for opera>ng results determined in accordance with GAAP and may not be comparable to other similarly >tled measures of
Any investment in Net Element will be subject to certain risks related to the nature of the Company’s business and the structure and
described in the Company’s filings with the SEC.
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CHARTERING A COURSE TOWARDS SEAMLESS COMMERCE
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NET ELEMENT OVERVIEW
global technology and value-added solu>ons group
payment acceptance, processing, support, authoriza>on and se\lement services for tradi>onal, mobile and alterna>ve payments in a mul>-channel environment
management and tokeniza>on technologies
framework for a number of value-added payment services
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LARGE & GROWING INDUSTRY
steadily increased over the past then years and con>nues to climb RECURRING REVENUE BUSINESS MODEL
RESILIENT OPERATING LEVERAGE
base and good visibility
deployment, ac>va>on, client services, data entry and reten>on
PROVEN MANAGEMENT TEAM
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CONTINUED GROWTH
million in gross profits over 4 years
agreement, projected to add over $1.5 million in gross profits over 4 years POSITIONED FOR GROWTH
FOCUS ON VALUE-ADDED RELATIONSHIPS
ACQUISITION OF ONLINE PAYMENT PLATFORM
OPERATIONAL OPTIMIZATION
H1 2018 2017 2016 2015 2014
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We focus on maximizing opportuni>es for our brands. Our vision is to set the standard for global cross-channel payments acceptance and value-added service offerings with focus on crea>on of unified global transac>on acceptance ecosystem
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SalesCentral
One of the leading providers
solu>ons in the United States All the features and building blocks to make global commerce a reality Visual POS solu>on includes all that the business needs to streamline opera>ons Seamlessly redefine and modernize experience at the POS and behind the scenes No fees. Merchants get the full purchase price for the transac>on Enterprise-class infrastructure tools for back-office processing Our technology development team brings ideas to life Payment acceptance without
Allows users to make purchases by charging payments to their mobile phone bill
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OLEG FIRER
Chief Execu>ve Officer
STEVEN WOLBERG
Chief Legal Officer
JEFFREY GINSBERG
Chief Financial Officer
ANDREY KROTOV
Chief Technology Officer
DAYAN MARTINEZ
Investor Rela>ons
VLAD SADOVSKIY
Head of Integrated Payments
ALEXANDER BORISOV
Head of Online Solu>ons
SHAWN BROWN
Head of Risk Management
GIOVANNI DI FEBO
Head of Acquiring & Compliance
CHRISTA SHOOK
Partner Growth
KENES RAKISHEV
Chairman Noted global Industrialist
DREW FREEMAN
Director 30+ yrs payments Experience
HOWARD ASH
Director International Value-added specialist
JON NAJARIAN
Director CNBC cast member “Haloime Report”
JAMES CAAN
Director Accomplished Actor & director
EXECUTIVE MANAGEMENT TEAM EXPERIENCE
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BUSINESS LINE MANAGEMENT BOARD OF DIRECTORS JONATHAN FICHMAN
Director Seasoned Fintech Execu>ve
OLEG FIRER
Director Chief Execu>ve Officer Net Element
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For the five-year period ending December 31, 2017, Net Element has executed several complex ini>a>ves and con>nued to deliver double digit percentage year-over-year organic growth
223% GROWTH
Revenue growth over five-year period ending December 31, 2017
2013 2014 2015 2016 2017 $ 18.7 $ 21.2 $ 40.2 $ 54.3 $ 60.1
26.4%
2013-18 CAGR
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We have amassed a broad porkolio of value added applica>ons that leverage the growth in payments to create a diverse array of recurring revenues and differen>ate us in the marketplace. Recurring service revenue is the primary revenue component for the Company
RECURRING REVENUE TRANSACTION PROCESSING DATA & ANALYTICS SOFTWARE LICENSE
TRANSACTION PROCESSING SOFTWARE LICENSE DATA & ANALYTICS Fees charged on a per transac>on and processed volume basis for payment acceptance services provided to the merchant Sooware as a license (SaaS) model allows merchants to get point-
upfront capital expenditure Business Intelligence tools are priced based on
is charged over volume processed
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Extensive network of over 100 independent sales groups and agents, including integrators, value- added resellers, affinity and referral partners boost the Company’s merchant growth
2013 2014 2015 2016 2017
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Internal Sales Force focused on ver>cals and value-added services External Partners enable rapid scalability and expansion through indirect distribu>on Value-Added Resellers and Integrators focus on technology and synergis>c sales
2018E
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innovaCve technology under the trusted bank brand
channel
FINANCIAL INSTITUTIONS
mobile commerce soluCons including DCB, one-click, PSMS, WAP, A2P/P2A and PIN submit
consumer engagement
any device worldwide
enhanced security
program allowing consumers to earn points across all devices
CONSUMERS
with consumers
relaConship
soluCon (“Payment as a Service”)
MERCHANTS
POS Solutions Mobile Payments Value-Add Offerings Payment Acceptance Big Data/Analytics
100+
PAYMENT OPTIONS WITH 1 Integration API 1 Back Office 1 Settlement 1 Dedicated Team
MULTI-CHANNEL PROCESSING
MOBILE NETWORK OPERATORS
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INTERNATIONAL MERCHANTS MOBILE NETWORK OPERATORS FINANCIAL INSTITUTIONS
S
At Net Element we are commi\ed to finding the most innova>ve and impackul strategic partnership ideas, no ma\er where they reside
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Card Processing Electronic Commerce Mobile Commerce Gift Cards Alternative Payments Marketing Security & Risk Management Customer Service Mobile Payments Advisory Bill Payments Business Analytics Reporting Tools
Integration Loyalty / Rewards Point of Sale
COMPREHENSIVE SOLUTION SET DISTRIBUTION
INTERNAL SALES FORCE EXTERNAL PARTNERS 1 2
in North America, Europe, CIS and Asia
INTEGRATED TECHNOLOGY PLATFORM
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Momentum in the transi>on of consumer payments away from paper and towards card and electronic alterna>ves is expected to result in total cash and
billion, respec>vely, over the forecast period. Factors accelera>ng the transi>on to paper payment alterna>ves include increased access to financial services and government policies. Despite substan>al growth in card payment value,
payment value is expected to increase fastest between 2017 and 2022
A LARGE, GLOBAL AND FAST-GROWING MARKET
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Fintech transacYon value
+18%
Mobile commerce
+23%
Blockchain market
+61.5%
Sources: Sta,sta Digital Market Outlook; Euromonitor; Blockchain News
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Forecast compound annual growth rates 2016-2021
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The global payments industry con>nues to deliver healthy growth, with underlying fundamentals such as transac>on volumes and account balances demonstra>ng even greater strength. This scenario also lays the groundwork for significant disrup>on likely to alter the dynamics between financial ins>tu>ons and fintechs.
Asia-Pacific EMEA LATAM North America 2013 2014 2015 2016 2021E 0.4 0.4 0.4 0.4 0.5 0.1 0.1 0.1 0.2 0.3 0.3 0.3 0.3 0.3 0.3 0.6 0.7 0.7 0.7 1.1 2014 2016 2019E 1,336 1,915 3,418 392 620 1,080 Mobile Payments Online Commerce
28% 30% 32% 34% 36%
Share of total banking, %
CAGR % 2016-21
+8% +4% +9% +6% Payments revenue $ trillions Volume $ billions 1,728 2,535 4,498 1.3 1.4 1.5 1.6 2.2 Source: McKinsey Global Payments Map Source: StaYsta, TrendForce
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Demand for SaaS-based solu>ons provides and opportunity for iPOS. We believe that we are well posi>oned to benefit from merchant’s demand for integrated payments solu>ons and the easy stage of an upgrade cycle.
2013 31% 79% 2020 2013 31% 79% 2020 2017
>$4.4 2020
SMB Spending on SaaS Expected to Increase
11% CAGR
SaaS Spending Among SMB(1)
Driving AdopYon of Technology-Enabled iPOS
Offering Value Added Services Creates New Revenue Streams & SYckier Merchants
✓ Visual POS ✓ Product organiza>on tools ✓ Omni-channel payment acceptance ✓ Ability to manage supplier rela>onships ✓ Invoicing and reconcilia>on ✓ Analy>cs and addi>onal repor>ng
As Merchants Seek to Upgrade their SoluYons CreaYng a Significant Revenue Opportunity
+48%
iPOS Usage (% of Total Retailers)(2) iPOS & mPOS Addressable Market ($BN)(2)
+5% CAGR
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Global technology and value-added solutions group that supports electronic payments acceptance in a multi-channel environment
investors@netelement.com https://www.linkedin.com/company/net-element/ https://www.facebook.com/netelement https://twitter.com/neteinc +1 (305) 507-8808 www.netelement.com