Presenting team. Strong team with track record of integrating acquisitions and delivering shareholder value

Transcription

1 Optimal Payments

2 Disclaimer

3 Disclaimer (cont d)

4 Presenting team Strong team with track record of integrating acquisitions and delivering shareholder value Joel Leonoff, President & Chief Executive Officer Brian McArthur-Muscroft, Chief Financial Officer

5 Transaction overview

6 Optimal Payments + Skrill A transformational and value enhancing combination 1 Creates a leading global payment and digital wallet provider with significant international scale and reach 2 Highly complementary businesses with compelling strategic fit 3 Diversifies customer base, product offering, geographic exposure and sector presence 4 Profit margin expansion, increased scalability and improved expected growth opportunities 5 Value uplift opportunity from synergies (targeting on-going c. $40m cost reduction from synergies by end of FY 2016). EPS accretion expected in first full fiscal year of ownership 6 Well-positioned to capture expected growth in North American gambling market 7 Intention to seek a Main Market listing and join FTSE250 as soon as possible following completion

7 FY 2014 Highlights

8 Full year highlights Solid foundation to build on in 2015 Substantial increases in revenue and profitability boosted by FIFA World Cup in H1 Acquisition of Meritus and GMA businesses in the US (completed July 2014) contributed to revenue growth and diversification of the Group in H2; integration progressing well Good progress on strategic initiatives: Principal Membership granted & launched (with Visa and MasterCard in Europe) Well positioned in US gaming & fantasy sports Launch of card issuing services division and NETELLERGO! (for merchants outside of gaming) Continued investment to deliver further growth Board and Executive Management strengthened

9 Group revenue Gross Revenue ($m) Fee revenue by geography (2014) Europe 21% North America 27% Asia & ROW 52% Significant increases in revenue - H2 revenues c. 30% higher (to H1) incorporating revenue from US acquisitions ($45 million from end July) Material organic and inorganic growth 44% overall; organic growth of 26% in 2014 (excl. US acquisitions) Concentration of Asian revenues balanced by further diversification of Group

10 NETELLER SV Revenues H H FY 2014 Change Stored Value $41.4 m $48.2 m $89.6 m +50% FY 2013 $59.8 m Gross margin 85% 84% Sustained business growth VIP Focus NETELLER Sign ups Jan14-Dec14 Non VIP program

11 NETBANX STP Revenues H H FY 2014 Change FY 2013 Straight Through Processing $117.4 m $157.0 m $274.7 m +42% $193.0 m Gross margin 41% 42% Organic & inorganic growth NETBANX: Acquiring Volume (Bureau)

12 Strong earnings growth Adjusted EBITDA ($m) Earnings per Share (cents)

13 Acquisition of Skrill

14 Transaction overview A fully funded acquisition financing structure Skrill offer enterprise value 1,111m Fully underwritten Rights Issue to raise cash of approx. 609m ( 451m) Historical acqn. multiples 1 : (LTM to 30 Sep 14) EV/EBITDA 13.5x (Pre-synergies) EV/EBITDA 9.3x (Post-synergies 2 ) 37.5m ordinary equity shares in Optimal Payments to Skrill shareholders, equivalent to 135m 4 Estimated transaction costs 62m Refinanced Optimal Payments debt 77m 3 New debt raised and drawdown on RCF of 505m 5 Total: 1,250m

15 The Enlarged Group a compelling business combination 1 Complementary business combination will create a leading payment provider e-wallet 5 Revenue 12m to 31 Dec m to 30 Sep 2014 $90m $151m 1 2 Customer accounts 8m 19m 3 4 Merchants 1.2k 1k Broadened geographic and sector exposure 2 Payment gateway 5 Revenue 12m to 31 Dec 2014 $275m 3 4 Merchants c.16.6k c.40k 20+ global acquiring relationships 6 3 Prepaid 5 Revenue 2 $181m 12m to 30 Sep bn transaction value processed in 12 months to 30 September c. 595k mypsc accounts k cash-in locations and 5.7k web shops

16 Optimal Payments - business overview Optimal Payments provides payment solutions and stored value products through two principal business divisions

17 Skrill - business overview Leading provider of online payment and e-money solutions

18 Creating a leading payments provider The combined entity would be a more diversified, vertically integrated player facilitating payments across a wider addressable market Pre-funding Immediate funding Future funding Prepaid 1 Digital wallet Payment processing Invoice payment languages payment types currencies

19 Creates a global payments player with a full suite of products Customer Merchant Key players / verticals Online bank transfer Mobile Cash-in/ prepaid voucher Prepaid debit card Remittance Invoice & instalments Digital wallet Currency services Online PSP Integrated global payments provider Digital Wallet PSP evoucher Emerging payments Traditional payment providers Acquiring banks

20 Significant consolidation opportunities Targeting on-going c. $40m cost reduction from synergies by end of FY 2016 Near term Medium term Longer term

21 Historical financial performance Creates a diversified business with significant scale and strong financial profile Revenue 2,3 ($m) Optimal Payments Skrill Enlarged Group 1 EBITDA 3 ($m) EBITDA Margin m to 31 Dec m to 30 Sep Revenue by geography 4

22 Strong and efficient financing structure Balance sheet efficiency and expected rapid deleveraging profile Currency summary New debt Leverage

23 Enlarged group future growth strategy Transaction expected to deliver on stated strategic objectives Leverage strong position in stored value Drive organic growth in payment processing Continued focus on online gambling Monetise wider addressable market Continue to pursue inorganic growth

24 Conclusions A transformational and value enhancing combination Creates a leading global payment and digital wallet provider Compelling strategic fit of two complementary businesses, well-positioned for long term organic growth Substantially diversified customer base, product offering, geographic exposure and sector presence Significant annual cost saving synergies (targeting on-going c. $40m cost reduction by end of FY 2016) and value creation opportunity. EPS accretion expected in first full fiscal year of ownership Intention to seek a Main Market listing and join FTSE250 as soon as possible following completion

25 Indicative term sheets Indicative terms of equity capital raising Indicative terms of debt Listing Arrangers Size Deal type Quantum Rights ratio Discount to TERP 2 Maturity Use of proceeds Amortisation Syndicate structure Financial Adviser Covenants

26 Expected timetable 1 Transaction announcement and publication of the prospectus 23 March Posting of rights issue prospectus, including notice of General Meeting 23 March Record date for rights issue 14 April General Meeting 16 April Nil-paids trading expected to commence 17 April Latest time for acceptance of rights issue 1 May Announcement of results of rights issue expected 5 May Commencement of dealing in new ordinary shares, fully paid 5 May Expected completion of acquisition Q3 2015

27 Appendix I: FY 2014 Financials

28 Business performance Fee Revenue ($m) Gross Profit ($m) Continued improvement in high margin NETELLER SV revenues; strong growth in NETBANX STP (incorporating contribution of Meritus & GMA from end July 2014) NETELLER SV: 50% YOY growth in fee revenue NETBANX STP: 42% YOY growth in fee revenue; organic growth of 19% in full year (excluding Meritus/GMA in H2)

29 Selling, general & administrative costs ($m) FY 2014 FY 2013 Growth Total %

30 Reconciliation of profit before tax to EBITDA ($ 000s) FY 2014 FY 2013 Profit before provision for income taxes 58,979 32,713 EBITDA (1) 86,063 52,212

31 Adjusted results FY 2014 FY 2013 FY 2014 FY 2013 ($m) ($m) EPS ($) EPS ($) Reported profit before tax / diluted EPS* Adjusted profit before tax / adjusted diluted EPS* Adjusted profit after tax / diluted EPS*

32 Balance sheet Group Cash Group own cash of $106.5m (2013: $93.8m) with free cash of $44.0m after using $26.6m cash to partly fund US acquisitions Highly cash generative with strong cash conversion Group Loans Shareholder loans converted and cleared in Jan-2014 with successful placement of c25% shares in issue Net debt of $23.2m - $150m bank facility secured to fund US acquisitions; in full compliance with debt covenants Capacity to raise additional funding for further M&A opportunities

33 Strategic initiatives Delivering the present and building the future Drive growth in core business lines Develop multichannel solutions Deliver new white-label propositions Position for US gaming opportunity Inorganic growth through acquisition

34 Appendix II: Optimal Payments + Skrill Transaction

35 Executive team Highly experienced team with significant payment industry expertise Executive directors Supporting executive team Joel Leonoff, President & Chief Executive Officer Danny Chazonoff, Chief Operating Officer Brian McArthur Muscroft, Chief Financial Officer Elliott Wiseman, General Counsel Board of Directors Dennis Jones, Non-Executive Chairman Andrew Dark, Non-Executive Director Ian Francis, Non-Executive Director Brahm Gelfand, Non-Executive Director Ian Jenks, Non-Executive Director Stephen Shaper, Non-Executive Director Board member

36 Market overview - estimates Enlarged group even better positioned to capture opportunities in dynamic, structural growth markets Global e-commerce market (US$bn) Global online gross gambling yield (US$bn) Transaction value for payment methods 2012 vs Geographic trends Europe 41% of e-transactions made using non-card methods US & Canada 29% of e-transactions made using non-card methods Asia 63% of e-transactions made using non-card methods

37 Stored value business model Stored value transactional flow and revenue model Consumer Merchant a BANK ACCOUNT ALTERNATIVE UPLOAD METHODS CARDS e-wallet b BANK ACCOUNT f PREPAID MASTERCARD e c d Fee flows a b c d e f

38 Typical STP transaction Optimal Payments has merchant acquirer status, and so can achieve higher fees on transactions in which it acts as the acquiring bank STP + acquirer relationship / merchant acquirer status

39 Skrill paysafecard overview Growing, incremental revenue stream that would broaden Optimal Payments payment offering

40 Historical financials Y/E Dec 2012A 2013A 2014A 1 Y/E Dec 2012A 2013A 12m to Sept 14 Dec 14 Topco

41 Regulatory overview Compliance procedures in place for both Optimal Payments and Skrill

42 Online gambling regulation The gambling regulatory landscape is varied and subject to change. Both Optimal Payments and Skrill have systems for identification of a customer s geography and the corresponding regulatory regime Introduction Compliance and market categorisation North America Europe Rest of the world

43 Optimal Payments evolution At the forefront of payment innovation since : NETBANX 2005: NETBANX 2006: Neteller 2008: Neteller 1999: Neteller 2001: Neteller 2004: Neteller Neovia Financial Jan 2014: Optimal Payments plc SureFire 1999: SureFire Commerce Payments Terra 2004: Terra Payments OP Payments 2005: OP Payments 2006: 2008: 2011: Neovia Financial OP Payments Optimal Payments plc July 2014: Optimal Payments plc Meritus GMA,

44 Bonus adjustments The effects of the Rights Issue Rights Issue summary (1)