Public Lenders Presentation January 2019
Disclaimer This presentation contains certain forward- looking statements with respect to certain of the Company’s current expectations and projections about future events. These statements, which sometimes use words such as “intend,” “proposed,” “plan,” “expect,” and words of similar meaning, reflect management’s beliefs and expectations and involve a number of risks, uncertainties and assumptions (including the completion of the transactions described in this presentation) that could cause actual results and performance to differ materially from any expected future results or performance expressed or implied by the forward-looking statement. Statements contained in this presentation regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. The information contained in this presentation is subject to change without notice and, except as required by applicable law, the Company assumes no responsibility or obligation to update publicly or review any of the forward-looking statements contained in it. Readers should not place undue reliance on forward-looking statements, which speak only as at the date of this presentation.
Agenda 1 Introduction 2 Refresher on Nets and overview of Concardis and Dotpay / eCard 3 Nets current trading update 3
Introduction Following the closing of the Dotpay and Concardis acquisitions, Nets A/S (“Nets” or the “Company”) continues to explore potential opportunities for opportunistic bolt-on M&A growth, in line with the strategy outlined previously Concardis closed on 31 st December 2018 and Dotpay closed on 4 th January 2019 The combined group encompassing Nets, Concardis and Dotpay (the “Group”) is a leading European payments player, hence validating Hellman & Friedman’s (“H&F”) vision to create a payments European champion following their take -private of Nets (which closed in February 2018) As part of the continued optimization of the Group’s capital structure and liquidity position, the Group is considering a € 100m EUR Term Loan B add-on , (the “Transaction”) for the purposes of r epaying drawn RCF and funding excess cash to balance sheet, which may be used to fund a small bolt-on acquisition in the future The € 2.7bn equity contributed at the time of the LBO and the additional rolled equity from Bain & Advent as part of the Concardis transaction together imply a significant equity cushion The transaction will leave senior secured net leverage and total net leverage unchanged at 5.0x and 6.1x respectively, based on Financing EBITDA of € 530m 1 / DKK3,947m which is based on Nets standalone Q3 LTM EBITDA as reported pro forma for the Concardis and Dotpay acquisitions Notes Based on EUR / DKK FX rate of 7.45 Comprises Nets LTM Sept-18 adjusted EBITDA of DKK3,298m (as per Q3 2018 Compliance certificate), Concardis and Dotpay FY18E adjusted EBITDA of € 83m and € 4m respectively. Excludes any 1. synergies arising from the combination of Nets with Concardis and Dotpay 4
Agenda 1 Introduction 2 Refresher on Nets and overview of Concardis and Dotpay / eCard 3 Nets current trading update 5
Key credit highlights 1 Strong presence in key segments of the payments value chain with increased scale Diversified and complimentary presence in attractive growth markets across the Nordic 2 and DACH region which are amongst the strongest economies in Europe Long-standing customer base with high retention rates and limited customer 3 concentration Well positioned to capitalise on structural growth drivers, with an innovative, fully 4 invested, and scalable platform Robust and attractive financial profile with a recurring and growing revenue base, 5 attractive margins, and high cash conversion 6 Experienced, industry-leading management with proven track-record 6
Nets has compelling value proposition to customers through integrated solutions Merchant Services (MS) Financial & Network Services (FNS) Corporate Services (CS) Integrated payment solutions for merchants Operator of only national debit card networks in Operating critical account-based payments and digital ID Denmark and Norway ecosystem primarily to corporates Overview Omni-channel offering Offers payment and processing solutions to financial institutions Primary revenue % Of Acquired Transaction Value Fee per Transaction Processed Fee per Transaction Processed model Total transactions processed: DKK5.9bn Total transactions volume: DKK0.95bn Total transactions value: DKK517bn KPI 4% growth y-o-y 3% growth y-o-y -2% growth y-o-y (2018Prelim.) 32% 38% Net revenue (2018Prelim.) 30% DKK2,415m DKK2,319m DKK2,882m 30 % 36% EBITDA b.s.i. (2018Prelim.) 35% 35% DKK855m, margin: 35.4% DKK1,000m, margin: 43.1% DKK1,034m, margin: 35.9% Merchants Banks Corporates Key customers >90% of Danish households use Nets’ recurring bill #1 in online/mobile and in-store in the Nordics (1) c.78% of Danish and c.88% of Norwegian issued card transactions volume payment for utility bills in Denmark Excellent local scale and scope Competitive position >80% of Norwegians access online/mobile banking using Nets’ BankID platform Strong integrated value chain offering European real-time product offering Notes 1. First Annapolis. Ranking based on number of card payment transactions processed or acquired 7
Concardis is a scale player with a strong track record For over 35 years successfully operating at scale… (as of 2017) …driving revenue growth… 2,4 Net revenue (3) , € m € 67bn 1 € 225m 2,3 Transaction Volume Net Revenue 116k 470k 246 225 Customers Connected Terminals 191 Leading full service provided across the merchant payment value chain Position #1 #2 #4 2016 2017 LTM Sept-18 Illustrative Concardis offering German …and profitability 2,4 Payments POS Terminals Value Chain (software/ hardware) Adj. EBITDA, € m Capture/Routing Merchant Acquiring 30% 29% 30% e-Commerce 6 75 5 66 58 Network Acquiring (incl. front-office) Value-Added Issuing Processing Services Technical 2016 2017 LTM Sept-18 Processing Own the capability via Adj. EBITDA Margin (% of net revenue) Source Company Information MPSI Notes 1. Total value of transactions processed by Concardis Payments Group (DACH Merchant Services, MPSI, RatePAY) 2. Based on DACH Merchant Services, MPSI, RatePAY, PCS & Simplepay 3. Based on Contribution Margin 0 before deduction of commissions to sales partners 4. DACH Merchant Services in 2016 adjusted for c. € 9.1m net revenue / € 9.1m EBITDA of one-time windfall profits 5. Excluding c. € 2m of exceptional costs in 2017 not normalised by management, translating into a decrease in adj. EBITDA margin compared to 2016 8 6. Adj. EBITDA excludes pro forma adjustments from the combination of Concardis and MPSI
Dotpay / eCard is one of the leading e-payment services providers in Poland Business overview Business overview Investment highlights Dotpay is a leading provider of online banking transfers (Pay-By-Link), the One of the leading e-payment services provider in Poland with most popular payment method in Poland. The company offers more than 1 20% market share 200 Pay-By-Link channels and mobile payment solutions such as BLIK and mobile SDK Growing payments market supported by a strong macro- 2 eCard is licensed card acquirer focused on delivering payment cards economic backdrop with penetration upside solutions including: one click payments, recurring payments, multiple currencies as well as cashless terminals POS & mPOS Excellent existing relationships with domestic and 3 international organisations Provides more than 250 payment methods to clients, cooperating with all Polish banks, a network of leading international PSPs and card associations Diverse product offering and extensive client portfolio of >30k 4 blue-chip and SME merchants More than 15 years of experience in the Polish market Transaction Volume Key Financials Consolidated TPV 1 Consolidated net revenue 2 Consolidated normalized EBITDA PLNbn PLNm PLNm 21% 30% 35% 25% 39% 42% 52% 57% 34.6 8.6 29.4 6.9 23.6 24.2 5.1 19.7 3.9 15.4 10.1 9.1 2015 2016 2017 LTM 2015 2016 2017 LTM Sept-18 2015 2016 2017 LTM Sept-18 Sept-18 y/y growth Normalised EBITDA margin 3 Source Company Information Notes 1. TPV from discounted operations (top-up, SMS) has been excluded 2. Net revenue is based on revenue after deduction of direct costs (bank and scheme fees) which is equal to gross profit 3. Based on gross profit (revenue after deduction of direct costs, which include bank and scheme fees) 9
Agenda 1 Introduction 2 Refresher on Nets and overview of Concardis and Dotpay / eCard 3 Nets current trading update 10
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