Slides
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1 March 2025 Investor Day 2025 Overview of Lesaka Presentation
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2 Safe Harbor Statement The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for certain forward-looking statements so long as such information is identified as forward- looking and is accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those projected in the information. The use of words such as “may”, “might”, “will”, “should”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “project”, “intend”, “future”, “potential” or “continue”, and other similar expressions are intended to identify forward-looking statements. All of these forward-looking statements are based on estimates and assumptions by our management that, although we believe to be reasonable, are inherently uncertain. Forward-looking statements involve risks and uncertainties, including, but not limited to, economic, competitive, governmental and technological factors outside of our control, that may cause our business, industry, strategy or actual results to differ materially from the forward-looking statements. These risks and uncertainties may include those discussed in the Company’s annual report on Form 10-K for the year ended June 30, 2024, and in the Company’s quarterly report on Form 10-Q for the quarter ended December 31, 2024, on file with the Securities and Exchange Commission, and other factors which may not be known to us. Any forward-looking statement speaks only as of its date. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law. As a domestic filer in the US, we report results in US dollars under US GAAP as evident in our 10 -K and 10 -Q filings. It is impo rtant to note that our operational currency is South African Rand and as such we analyze our performance in South African Rand. The company's results reported in US dollars can be significantly affe cted by the currency fluctuations between the US dollar and the South African Rand and thus we refer investors to results reported in ZAR in analyzing the company’s performance. Please refer to a ppendix for information presented in this presentation in US dollars.
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3 Overview of1. community security wealth
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4 Today’s Presenter Ali Mazanderani Executive Chairman • Fintech entrepreneur and investor with significant investment and operating experience in emerging markets • Appointed Executive Chairman for Lesaka in February 2024 • Co-founder and Chairman of Teya, a pan -European Fintech • Current: Non -Executive Director of Thunes and Kushki • Prior: Non -Executive Director StoneCo (Brazil) and Network Holdings (UAE) • Partner at Actis, a London based emerging market private equity firm (invested in and built Fintechs to multi billion -dollar valuations and exits) • Prior to Actis, advised private equity and corporate clients for OC&C Strategy Consultants (London) and served as lead strategy consultant for First National Bank (Johannesburg).
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5 Key Takeaways Investor Day 1. Southern Africa is Amongst the Most Attractive FinTech Opportunities in the World 2. Lesaka is Uniquely Positioned to Win and Capture this Opportunity 3. Our Plan is Already Working and Producing Strong Results 4. We Have Significant Upside Potential to Grow and Compound Value
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6 World-Class Platforms & Advantages to Win The Substantial & Expanding Fintech Opportunities Across Africa in the Next 25+ Years Consumers Businesses Payments Services Billing Banking Cash Management Credit Software Social Grants Bill Payments Banking Cash Access Loans Payouts Insurance PAYMENTS FINANCIAL SERVICES SOFTWARE Empowering Consumers to Manage Their Financial Lives in a Better Way… Powering Mission-Critical Commerce Enablement Tools for Businesses
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7 Our Platforms & Solutions Designed For Consumers, Merchants & Enterprises Consumers Merchants Enterprises Micro Small-to-Medium • Social Grants • Bill Payments • Employee Payments • Customer Rewards • Accounts • Personal Loans • Personal Insurance • Digital Accounts • Cash Management • Merchant Advances • POS Solutions • Data Analysis • Card Acceptance • Supplier Payments • Bill Payment Enablement • Merchant Accounts • Cash Management • SMB Business Credit • Retail POS • Restaurant POS • Fuel Management • Card Acceptance • Hardware Security Module (“HSM”) Tokenization • Billing & Switching • Utility Metering PAYMENTS FINANCIAL SERVICES SOFTWARE 30% Revenue & Net Revenue1 Breakdown (Q2 FY25) 60% 10% Net Revenue Revenue 15% Net Revenue Revenue 80% Net Revenue Revenue 5%Note (1) Net Revenue is a non -GAAP measure. Refer to Appendix for reconciliation of non -GAAP measures. • Transaction switching
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8 Advantaged Consumer Reach Diversified Business Relationships Strong Financial Performance 30,000+ SMB Merchants2 750+ Enterprise Clients2 US$575 Million Revenue (FY25E) ~30% Expected Organic EBITDA Growth Note All data as at Q4 FY24 unless stated otherwise. Financial Performance based on mid -point of FY25 Guidance (Fiscal year ending Ju ne) of ZAR 11.5bn Revenue and ZAR 950m Group Adjusted EBTIDA using an FX rate of $1 = R18.25. Guidance is at of February 5 th, 2025. Nothing herein should be construed as reaffirming, disaffirming or updating such guidance. (1) Includes approximately 1.5 million grant recipients and approximately 200k Adumo Payouts cardholders as at Q4 FY24 US$52 Million Group Adjusted EBITDA (FY25E) 90,000+ Micro Merchants2 1.7 Million Monthly Active Consumers1 Delivering Diversified Growth & Profitability That Is Just Beginning To Ramp Up 500,000+ Micro-Loan Borrowers2 400,000+ Active Insurance Policies2
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9 Led By An Experienced Team Record of Success and Deep Expertise in Fintech & Africa Denzel Landie Group CRO Nomaxabiso Teyise Head of HR Naeem E. Kola Group COO Lincoln C. Mali CEO of Southern Africa Ali Mazanderani Exec. Chairman Dan Smith Group CFO Steven J. Heilbron Head of Corp. Dev. Basie Kok CEO - Enterprise Martin Wright CEO - Micro Merchant George Roussos CEO - Consumer Paul Kent CEO – Merchant Monique Maree Group General Counsel
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We Are Focused & Positioned To Penetrate one of the Most Attractive Fintech Opportunities in the World 10 South Africa Namibia Zambia Botswana Kenya
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11 North America 4.0x $520bn LATAM 12.5x $125bn AFRICA 13x $65bn Europe 5.5x $190bn APAC 8.5x $600bn S. Africa ZambiaNamibia Botswana Kenya Growth Multiple (x) 2030 Revenues ($bn) Africa Projected To Be Amongst the Fastest Growing Fintech Regions in the World The 5 Markets We Operate In Provide a Very Attractive & Fertile Base To Benefit From Africa’s Long-Term Tailwinds Global Fintech Revenue Growth By Region 2021 to 2030 32% CAGR Source BCG Global Fintech Analysis 2023
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12 2nd Largest Population Share Youngest Population Composition Fastest Population Growth Median Age (2034E) Share of Global Population (2050E) Population Growth (2024-2034E CAGR) 2.2% 0.6% 0.5% 0.5% -0.2% Africa Latin America Asia North America Europe Africa is Booming The Most Attractive Demographic Trends in the World Providing A Strong Backbone for Economic Growth 45 41 35 35 21 Europe North America Asia Latin America Africa Will Drive Substantial Demand for Fintech Services For Several Generations Africa Asia (55%) Latin America (8%) Europe (7%) North America (4%) 25% 1 2 3 Source IMF World Population Prospects 2024
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13 Money is Moving Providing Strong Underlying Growth in Fintech For Several Generations 1 2 Significant Volumes Remain “Un-Disrupted” and Ripe for Penetration 3 Market Share Will Continue to Shift From Banks to Non-Bank Providers Cash Use Will Continue to Decline 2011 2022 3% 57% Banks Market Share of Global Top 50 Acquirers2 BANKS TOTAL CARD VOLUME ($M) MERCHANT OUTLETS ABSA 29,694 80,074 FIRST NATIONAL BANK 22,955 65,705 NEDBANK 20,350 58,870 STANDARD BANK 14,502 64,555 CAPITEC 2,799 39,113 MAURITIUS COMMERCIAL BANK 2,085 19,812 EQUITY BANK 1,552 43,845 FIRSTBANK 748 12,600 CO-OPERATIVE BANK 254 18,787 MILLENIUM BIM 211 7,420 Top 10 Merchant Acquirers in Africa3 $95B Total Card Volume (US$) Non-Banks 44% 36% 26% 16% 11% 31% 24% 17% 8% 6% Africa & Mid-East Latin America Europe Asia Pacific North America Share of Point-of-Sale Transactions Made with Cash1 2021 2025E 3 Secular “Bets” to Believe In Africa’s Growth Potential Source (1) FIS, The Global Payments Report (March 2, 2022) (2) Nilson Report #1250, estimated using share of total transactions (3) Nilson Report #1266
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14 Southern Africa Is Positioned To Be The “Next Brazil” With More Favorable Market Dynamics & Opportunities Lesaka’s Current & Adjacent Anglophone Markets Brazil ~ 90% (South Africa) Market Share of Loans By Top 5 Banks2 Market Share of Loans By Major Fintechs2 72% (2017) 67% (2023) < 1% (South Africa) < 5% (2017) ~ 20% (2023) Lesaka’s Current & Adjacent Anglophone Markets Compares Favorably A Market of Similar Scale Market Opportunity To Serve ~ 250 million Total Population1 215 million Greater Opportunity to Disrupt Bank Concentration Significantly Less Fintech Competition Sources & Notes (1) PRB World Population Data (2) Using market share by total asset value as a proxy for South Africa; JP Morgan Research (12 July 2024) “Latin American Banks: Market Share & Credit Bible”; UBS Research (28 May 2024) “Brazilian Banks Side -by-Side”; The Prudential Authority (South African Reserve Bank); Company Estima tes. (3) South African Reserve Bank Payments Study Report 2023; Morgan Stanley “The End of Growth” – forecasts digital payments penetrati on of personal consumption to be at 94% for 2024E. Share of Cash Payments3 ~ 56% (South Africa) < 6% (2024) Significant Runway for Digitization of Cash
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15 For Example: South Africa With Real Pain Points Legacy Providers Are Not Equipped to Address Consumer Market Business Market Poor Customer Experience Consumers travel a long distance to visit a bank’s branch & wait long hours to open an account to receive their grants Limited Access to Financial Services Grant recipients, in particular, do not have access to formal credit & can only borrow from informal micro -lenders Excessive Charges Consumers often face expensive charges with opaque pricing structure & terms that are difficult to understand Low Smartphone Penetration & Usage Lower LSM consumers have limited smartphone functionality & need physical help and presence to navigate any banking activities Limited Access to Digital Payments A small portion of the Micro merchant base can accept digital payments, relying mostly on cash transactions to grow their business Limited Access to Growth Capital SMB merchants have typically experienced limited access to formal credit, while Micro merchants have no access to formal channels of credit Poor Cash Management Solutions With 50% of the transactions conducted in cash in S. Africa, merchants bear significant costs & risks managing cash every day Lack of Holistic Offering Some digital providers are tackling specific market gaps but there is no platform that can offer a complete set of merchant solutions Source Global Data Analytics (2024)
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16 $200m $380m $1.4bn $2.0bn $2.8bn $5.0bn $3.0bn $1.7bn Sources & Notes Global Data Analytics (2024), McKinsey & Company – The Future of Payments in Africa (September 2022), BDO Fintech in Africa (June 2024), Genesis Analytics (20 24), IMF Database (2024), Management Estimates & Company Information (2024). Merchant division aggregates both Micro -Merchant and Merchant pillars whereby the revenue pool assoc iated with Alternative Digital Payments within Micro -Merchant are represented on a net revenue basis Product augmentation Enterprise Merchant Consumer Geography expansion +10%-15% +10%-15% +5%-10% Forecasted 5-Year CAGR ~$4.4bn Serviceable Addressable Net Revenue Today Enterprise Merchant Consumer ~$12.0bn Serviceable Addressable Net Revenue in 5 years $4.4 Billion Revenue Opportunity A Signficant Serviceable Addressable Market (SAM) That Is Growing Rapidly
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17 Highly Fragmented Ecosystem of Alternative ProvidersIntegrated Suite Software Cash Merchant Acquiring Lending Alternative Digital Payments $2.8 Billion Addressable Revenue Sources & Notes Global Data Analytics (2024), Genesis Analytics commissioned by Lesaka (2024), South African Reserve Bank Interchange Rate (2 021), IFC MSME Opportunity in South Africa (2019), Electrum Value Added Services in South Africa (2020), Company Information (2024), Peer Company Public Quarterly Results (2024). Market sizing analysis has aggregated the Merchant and Micro -Merchant divisions. Alternative digital payments represents the following sub -products: Prepaid solutions and supplier payments on a net revenue basis. Merchant Division Revenue Opportunity Today ~7% Market Share
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18 7% Highly Fragmented Ecosystem of Alternative ProvidersIntegrated Suite Lending Insurance Transactional Accounts Payouts Emerald Life $1.4 Billion Addressable Revenue Sources & Notes SASSA Grant Data Portal (2024), Company Information (2024). Market sizing analysis based on internal ARPU (as at Q1 FY25) measures per product assuming a full cross -sell to all South African grant beneficiaries. Consumer Division Revenue Opportunity Today ~6.5% Market Share
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19 Highly Fragmented Ecosystem of Alternative ProvidersIntegrated Suite Utility Payments Hardware Security Modules Bill payments POS management & Switching ~10% Market Share $200 Million Addressable Revenue Sources & Notes South African Local Government Association (2024), Statista (2024), South African Treasury (2024), Grand View Research (2024) , Company Information (2024). Bill payments is a representation of the non -bank bill collection market. Enterprise Division Revenue Opportunity Today
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20 We Developed & Built Lesaka’s Strategy & Platforms To WIN Very Attractive Market Opportunities
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21 The 5 Pillars of Our Strategy To Address & WIN Fintech Opportunities Across Diversified Channels & Markets Own Platforms to Address The Most Attractive & Underserved Opportunities Across Channels & Markets Position to Gain Unique Access to Data That Provides Valuable Customer Insights Assemble a Wide Range of Fintech Solutions with Superior Functionality Combine Data-Driven Insights with Our Suite of Solutions to Sell & Serve in An Advantaged Way Find & Integrate Attractive Assets & Consolidation Opportunities to Grow & Compound Shareholder Value • Consumer Platforms • Merchant Platforms • Enterprise Platforms • 5+ Countries in Southern Africa • Access to Consumers – Grants, Spending & Employee Payouts • Access to Merchants – Cash Vaults & Transaction Volume • Client Acquisition & Retention • Bundling, Cross -Sales & Up -Sales • Underwriting • Risk Management • Acquired: Net1 + Connect • Acquired: Touchsides • Acquired: Adumo • Acquired: Recharger ADDRESS POSITION DEVELOP COMBINE CONSOLIDATE • Positioned Across – Consumer & Merchant Financial Lifecycles – Enterprise Clients with Force Multiplier Effects
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22 Developing Differentiation 3 Principles We Use to Foster Differentiation & Drive Monetization Integrated Technologies Proprietary Model Compounding Value Hardware + Software → Service Differentiated Client Experience Land & Expand… + Multiply Develop and Combine the Right Hardware and Software to Deliver the Best Service Solutions for Our Customers Across Different Channels and Environments Unique Business Model Enables Us to Win & Retain Customers and Grow Our Base By Providing a Superior End-to-End Client Experience Complementary Suites of Solutions Designed Around the Financial Lifecycles or Ecosystem Needs of Our Customers to Grow With Them In Multiple Ways + +
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23 Our Proprietary Business Model Enables Us to WIN & Create Value Across the Customer Journey …Then We Offer Complementary Services to Expand Our Share of Wallet Over Time We Go to Market Hyper-Locally with HUBs & Salespeople We Offer Critical Financial Solutions to WIN a Customer Relationship …Specifically Designed & Trained to Connect With Hard-To-Reach Customers & Educate Them on the Value & Advantages of Our Solutions We Use Technology & Digital Tools to Engage More Effectively …Empowering Our Customers to Manage Their Money & Transact More Conveniently & Efficiently We Established Strong Brand & Trust in the Market …Enabling Us To Attract New Customers & Retain Existing Customers Over Time We Position To Gain Unique Access To Data …Provides Valuable & Proprietary Insights to Our Customers and Enables Us To Serve Them Better Than Our Competitors
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24 Designed For Consumers & Merchants We Use a Similar Foundational Approach To Win & Serve Clients Lesaka Consumer Model Lesaka Merchant Model Similar Strategies With Complementary Capabilities That Serve Both Sides of Our Ecosystem
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25 Positioned Across Their Respective “Financial Lifecycles” To Serve Them with Complementary Fintech Solutions End-to-End Consumers Merchants
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26 Digital Approach Our low overhead “hubs” are strategically located near SASSA offices, providing a more welcoming and friendly retail experience to customers (than the banks and post offices) We are driving mobile app adoption and are the only provider that can issue & activate a card immediately without the need for a customer to visit an ATM Differentiated Go-To-Market Model Access to Proprietary Data We have unique access to consumers’ cash inflows (timing & the amount) enabling us to be the only regulated credit provider to the grant recipients Consumer Solutions Empower 1.7 Million Consumers1 to Manage Their Financial Lives in a Better Way Sources & Notes SASSA is the South African Social Security Agency and is responsible for the disbursement of various government grants to eli gible people across the country. (1) Includes approximately 1.5 million grant recipients and approximately 200k Adumo Payouts cardholders as at Q4 FY24.
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27 Differentiated Go-To-Market Model Superior Functionality & Convenience Merchant Solutions Empower 90,000+ Micro Merchants1 to Manage Their Businesses & Money “End-to-End” All-In-One Solutions to Grow Their Business Maximizing Productivity : ✓ Township-Based Teams ✓ In-Person Approach ✓ Digital Sign-Up & Onboarding ✓ Low Touch Requirements Addressing Key Needs: ✓ Secure & Manage Cash ✓ Accept Payments Beyond Cash ✓ Make Supplier Payments ✓ Access to Merchant Credit Solving Critical Pain Points: ✓ Digital Banking Features ✓ Large Suite of Bill Payment Offerings to Resell at the POS ✓ Immediate Funds Availability ✓ Data-Driven Insights Notes (1) As at Q4 FY24
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28 Advanced Suite of Solutions Superior Functionality & Client Service Merchant Solutions Help 30,000+ Small-to-Medium Businesses1 Run Their Operations & Finances More Effectively Specialized ISV Integrations Maximizing Productivity : ✓ On Premise ATMs ✓ In-Store, Online & Mobile with Multi-Lane Capabilities ✓ Loyalty & Gift Card Programs Sector Specific Capabilities: ✓ Vertical Software Solutions with 80+ ISV Integrations ✓ Retail POS ✓ Restaurant POS ✓ Fuel Service POS Solving Critical Pain Points: ✓ Advanced Risk Management ✓ Instant Reconciliation ✓ Advanced Reporting Tools ✓ Data-Driven Insights Notes (1) As at Q4 FY24
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29 A Specialized Model Designed to Serve Enterprises A Force Multiplier to “Unlock Access” To New Customers & Revenues Inside Their Ecosystems Lesaka Enterprise Model
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30 Enterprise Solutions Help 750+ Enterprises1 Engage & Transact More Efficiently With Their Ecosystem Bill Payments Solutions Enabling Billers & Payers to Transact More Effectively Network of Billers & Payment Points Proprietary Capabilities Strong Retail Distribution Leading Utility Vending Solutions Enabling Landlords, Tenants & Utilities to Transact Large & Attractive Ecosystem Proprietary Capabilities Strong Retail Distribution Security Technology Solutions Mission-Critical Security Solutions for Prepaid Vending 1 of 2 HSM Providers Highly cost-effective Tokenization, Key Management & Storage, Encryption/Decryption Notes (1) As at Q4 FY24 and includes a network of 650 service providers in the bill payment network and 100 corporate clients Security Technologies Bill Payments Utility Vending • Biller Network • Bill Payment Collection • Bill Payment Solutions • Hardware Security Modules (HSMs) • Tokenization Services Bill & Utility Payments Platform Security Platform • Electricity Metering • Prepaid Utility Vending
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31 Our Plan is Succeeding Producing Strong Results
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32 We Have Been Growing Our Grant Market Share With Opportunity to Gain More Share From the Market State-Owned Bank Private Banks 11 % 29 % 31% 7-8% Each Under Provisional Liquidation as of Feb 2023 We Are The Largest Non-Bank Grant Enabler in South Africa Market Share (FY24) Incomplete Product Set (None Lend To The Grant Consumers) Excessive Fees No Customer Relationships No Customer Education Very Bureaucratic Note Market share represented is based on number of grant beneficiary capture as at FY24 (June 2024).
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33 Consumer ARPU (ZAR) 80 90 4Q FY23 4Q FY24 13% YoY 1.5M Active Consumers ~18% Currently Have Both Personal Loan & Insurance …AND Lesaka Has A Similar ARPU Upside Opportunity In Our Merchant Business Significant Opportunity to Compound Revenue Growth With Improving Unit Economics That Still Have Significant Opportunity to Expand + More Penetration of Existing Products + New Solutions to Provide e.g. Bill Pay, Remittances Immediate Potential Average ARPU of S.A. Banks > 3.0x ~ 280 Note Average retail banking ARPU for the top 4 banks of South Africa (Standard Bank, Nedbank, ABSA and Capitec) based on latest pu blic earnings investor presentations Consumer ARPU includes rounded values for the analysis presented above. Actuals disclosed at FY25 Q2: ZAR94, FY24 Q2: ZAR85, FY23 Q2: ZAR74 *
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34 Key Elements Benefits & Advantages • Enables faster, more efficient customer onboarding • Provides efficient environment for product additions & enhancements • Highly scalable transaction processing Modern, Purpose -Built Technology Platforms • Enables collection of customer-level transaction data across segments • Feeds fast-growing, proprietary data lake • Supports data analytics, cross-selling, and underwriting efforts Proprietary Data Collection & Analysis • One of the largest teams in South Africa with market-leading skills • Expertise across all business lines (consumer, Micro, SMB, enterprise) • Facilitates faster, more efficient product enhancements & roll-outs Specialized Development Team • We have developed proprietary, software-driven solutions to automate many back-office functions and business processes • Facilitates a leaner operating environment that improves operating leverage as we continue to scale Software -Driven Automation • We operate without expensive fixed assets, leveraging a low-cost infrastructure network • We are not regulated as a bank Asset-Light Business Model Significant Operating Leverage to Unlock Operating Model & Tech Infrastructure Provide Us with Key Advantages Model Automation Development Data Tech
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35 (611) (275) 67 (667) (629) (326) FY22 FY23 FY24 Our Plan is Working & Producing Strong Results Our Strategies Are Just Starting to Ramp 3.4 9.5 10.6 FY22 FY23 FY24 Revenue Operating Income & Net Income (Loss) Net Cash Flow from Operating Activities +180% +11% (565) 7 538 FY22 FY23 FY24 Diversified Revenue Channels − Merchant − Consumer − Enterprise Visibility To Higher Profitability − Recurring growth − Expanding operating leverage Growing Free Cash Flow − Limited future capex requirements +343M Note (1) Group Adjusted EBITDA is a non -GAAP measure. Refer to Appendix for reconciliation of non -GAAP measures. (328) 445 691 FY22 FY23 FY24 Group Adjusted EBITDA1 +55% Improving Operating Metrics − Low churn: < 1% − Declining leverage − Improving cash generation Operating Income Net Loss ZAR billion ZAR million ZAR million ZAR million +343M
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36 Our Strategic Positioning Provides Significant Upside Potential
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37 Wider Footprint to Penetrate & Grow Flexibility & Breadth for Expansion Highly Defensible Business M&A Playbook & Capabilities South Africa Namibia Botswana Zambia Kenya Benefit From: Established Investments with Real Barriers to Entry Benefit From: Positioned as the “Natural Consolidator” in Africa Benefit From: Diversified Model To Capture Growth Opportunities Benefit From: A Very Large & Fast-Growing Addressable Market ✓ Advantaged Positions ✓ Key Infrastructure ✓ Extensive Networks • 1.7M Consumers1 • 120k Merchants2 • 750+ Enterprises2 ✓ Brand Reputation ✓ Consumer • Grant Recipients • Other Consumers ✓ Merchants • Micro Merchants • Medium-to-Small Merchants ✓ Enterprises • Large Corporates ✓ 5 Markets of Operations ✓ Disciplined Principles • Strategic Focus: Won't “Buy” Our Growth • Focus on EBITDA Accretive Deals • Target 2.0x Leverage • Balanced Funding ✓ Funding Advantage • NASDAQ Shares Provide a Currency We Have Key Advantages To Grow, Expand Our Markets & Increase Profitability Over the Long Term Notes (1) 1.7m Consumers includes approximately 1.5 million grant recipients and approximately 200k Adumo Payouts cardholders as at Q4 FY24. (2) As at Q4 FY24.
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38 Substantial Compounding Upside We have meaningful potential for synergies on the top-line (e.g. joint sales) & bottom-line (cost sharing) to improve profitability at the Lesaka Group level As we unlock more growth & earnings, with stable cost base, we generate increasing levels of free cash flow to fuel re-investment in the business As we continue to scale & gain more market share away from the legacy providers, we can compound our valuation more easily than competitors FY22 FY23 FY24 Free Cash Flow $30M $0.5M $400M $21B Strong Cash Flow for Growth Significant Untapped Synergies Lesaka Has The Right Ingredients To Compound Value Providing One Of The Best Opportunities to Generate Differentiated Shareholder Returns in Fintech & Africa 1 2 3 Synergies Note Company market capitalizations as at 25 March 2025
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Appendix
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40 Defined terms – non-GAAP measures Group Adjusted EBITDA (loss) 1 Represents Segment Adjusted EBITDA after the allocation of group costs and lease expenses and is our primary group operating performance measures. We provide our future financial guidance using this operating measure and also measure our historical performance against our gu idance expectation using this measure. Calculated as net loss before tax adjusted for gain on disposal of equity securities, loss on disposal of equity -accoun ted investments, gain related to fair value adjustments to currency options and change in fair value of equity securities, impairment loss, depreciation and a mortization, stock -based compensation charges, once -off items, inter -group foreign currency mark to market translation adjustments on certain intercompan y accounts U.S. securities laws require that when we publish any non-GAAP measures, we disclose the reason for using these non-GAAP measures and provide reconciliations to the most directly comparable GAAP measures. We have received requests from investors and analysts to provi de additional details regarding our reported results and we provide these non -GAAP measures to enhance our own evaluation, as well as our investors’ a nd analysts’ understanding, of our financial performance We do not provide reconciliation of our forward -looking non-GAAP measures to GAAP due to the inherent difficulty in forecasting and quantifying certain amounts that are not necessary for GAAP and related GAAP to non -GAAP reconciliation, including adjustments, that could by made f or currency exchange rate fluctuations and other charges reflected in our reconciliation of historic numbers, the amount of which, based on histor ical experience could be experience 1. Lease expenses which were previously excluded from the calculation of Group Adjusted EBITDA have now been included in the cal culation of Group Adjusted EBITDA. This change is in response to comments received from the staff of the SEC in March 2024 regarding our non -GAAP financial reporti ng. Comparative information has been adjusted to conform with the updated presentation . Use of Non-GAAP Measures
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41 Reconciliation of Non-GAAP measures | Group Adjusted EBTIDA for the Year Year ended 30 June FY24 FY23 FY22 FY24 FY23 FY22 ZAR’000 ZAR’000 ZAR’000 $’000 $’000 $’000 Average exchange rate for conversion from ZAR to $ 18.68 17.94 18.68 18.68 17.94 17.94 Loss attributable to Lesaka – GAAP (326 070) (629 227) (666 818) (17 440) (35 074) (43 876) Loss from equity accounted investments 24 298 91 799 55 457 1 279 5 117 3 649 Net loss before loss from equity -accounted investments (301 772) (537 428) (611 361) (16 161) (29 957) (40 227) Income tax (benefit) expense 62 616 (41 423) 4 970 3 363 (2 309) 327 Loss before income tax expense (239 156) (578 851) (606 391) (12 798) (32 266) (39 900) Reversal of (allowance) of EMI doubtful debt (4 741) - - (250) - - Net loss on disposal of equity -accounted investment - 3 678 5 714 - 205 376 Gain on disposal of equity securities - - (10 942) - - (720) Loss on sale of Bank Frick - - - - - - Gain related to fair value adjustment to currency options - - (56 095) - - (3 691) Impairment loss - 126 280 - - 7 039 - Unrealized loss FV for currency adjustments (1 421) 3 983 - (83) 222 - Operating income/(loss) after PPA amortization and net interest (non -GAAP) (245 318) (444 910) (667 714) (13 131) (24 800) (43 935) PPA amortization (amortization of acquired intangible assets) 269 709 269 063 58 351 14 419 15 149 3 826 Operating income/(loss) before PPA amortization after net interest (non -GAAP) 24 391 (175 847) (609 363) 1,288 (9 651) (40 109) Interest expense 354 048 333 092 88 587 18 932 18 567 5 829 Interest income (42 896) (33 243) (31 748) (2 294) (1 853) (2 089) Operating income/(loss) before PPA amortization and net interest (non -GAAP) 335 543 124 002 (552 524) 17 926 7 063 (36 369) Depreciation (excluding amortization of intangibles) 172,861 155 846 56 772 9 246 8 536 3 749 Stock -based compensation charges 148 001 131 123 45 016 7 911 7 309 2 962 Once -off items (Refer to slide 41) 34 538 34 479 122 920 1 853 1 922 8 088 Group Adjusted EBITDA (non -GAAP) 690 943 445 450 (327 816) 36 936 24 830 (21 570)
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42 Reconciliation of Non-GAAP measures – Net Revenue For the Quarter Net Revenue – Group Q2 FY25 Q2 FY24 Q2 FY25 Q2 FY24 ZAR’000 ZAR’000 $’000 $’000 Average exchange rate for conversion from ZAR to $ 17.85 18.71 17.85 18.71 Revenue - GAAP 2,629,200 2,694,506 146,818 143,893 Cost of prepaid airtime vouchers sold by us & commissions paid to third parties selling all other agency -based products (1,249,274) (1,725,838) (69,758) (92,163) Net revenue (non -GAAP) 1,379,926 968,668 77,060 51,730 Net Revenue/ Revenue 52% 36% 52% 36% Net Revenue – Merchant Q2 FY25 Q2 FY24 Q2 FY25 Q2 FY24 ZAR’000 ZAR’000 $’000 $’000 Average exchange rate for conversion from ZAR to $ 17.85 18.71 17.85 18.71 Revenue - GAAP 2,074,003 2,194,260 146,217 117,182 Cost of prepaid airtime vouchers sold by us & commissions paid to third parties selling all other agency -based products (1,219,511) (1,684,739) (68,097) (89,968) Net revenue (non -GAAP) 854,492 509,521 78,120 27,214 Net Revenue/ Revenue 41% 23% 53% 23% Net Revenue – Enterprise Q2 FY25 Q2 FY24 Q2 FY25 Q2 FY24 ZAR’000 ZAR’000 $’000 $’000 Average exchange rate for conversion from ZAR to $ 17.85 18.71 17.85 18.71 Revenue - GAAP 159,846 223,193 14,317 11,921 Cost of prepaid airtime vouchers sold by us & commissions paid to third parties selling all other agency -based products (29,763) (41,100) (1,661) (2,195) Net revenue (non -GAAP) 130,083 182,093 12,656 9,726 Net Revenue/ Revenue 81% 82% 88% 82%