ASX/AIM: EPY South East Asia’s Leading e-payments Platform 2006 Annual Results Presentation February 2007 Simon Loh, Managing Director 0
Disclaimer The presentation (in this projected form and as verbally presented) (Presentation) is provided on the basis that none of the Company nor its respective officers, shareholders, related bodies corporate, partners, affiliates, employees, representatives and advisers make any representation or warranty (express or implied) as to the accuracy, reliability, relevance or completeness of the material contained in the Presentation and nothing contained in the Presentation is, or may be relied upon as, a promise, representation or warranty, whether as to the past or the future. The Company hereby excludes all warranties that can be excluded by law. The Presentation contains prospective financial material which is predictive in nature and may be affected by inaccurate assumptions or by known or unknown risks and uncertainties, and may differ materially from results ultimately achieved. The Presentation contains "forward-looking statements". All statements other than those of historical facts included in the Presentation are forward-looking statements including, without limitation, (i) estimates of future earnings; (ii) estimates of future cash costs; (iii) estimates of future cash flows; and (iv) estimates of future capital expenditures. Where the Company expresses or implies and expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, forward- looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by such forward-looking statements. The Company does not undertake any obligation to release publicly any revisions to any "forward-looking statement" to reflect events or circumstances after the date of the Presentation, or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws. All persons should consider seeking appropriate professional advice in reviewing the Presentation and all other information with respect to the Company and evaluating the business, financial performance and operations of the Company. Neither the provision of the Presentation nor any information contained in the Presentation or subsequently communicated to any person in connection with the Presentation is, or should be taken as, constituting the giving of investment advice to any person. The Presentation does not relate to any securities which will be registered under the United States Securities Act of 1933 nor any securities which may be offered or sold in the United States or to a U.S. person unless registered under the United States Securities Act of 1933 or in a transaction exempt from registration. 1
Summary CY06, strong trading in core markets including Malaysia (prepaid mobile airtime) and software services 4 th quarter affected by flood, normal trading resumed in 1Q07 Optimistic for future 2
2006 Financial Results 31 Dec '06 Headline Numbers Comment (A$m) Gross Revenue Net Revenue 19.73 Strong growth in Malaysia & software services EBITDA 10.27 EBITDA margins over 50% Net Profit Before Tax 7.69 NPAT 7.61 Profit Attributable to Members 6.01 EPS 3.06 DPS 1.36 Maiden Dividend Dividend Payout Ratio** 44.4% *204,430,568 shares on issue at 31 Dec 06 **unfranked 3
How were results reached? Revenue breakdown by product: Product Full Year CY06 (A$m) % of Total Airtime 11.789 59.74% Software services 5.450 27.62% Others 2.495 12.64% Total 19.734 100.00% Others 13% Software Prepaid Services Airtime 28% 59% 4
Explanation of Result Strong organic trading in core markets Q4 affected by one-offs Profit attributable to members 20% above IPO forecast (Dec ‘05) Maiden annual dividend of 1.36 cents per share proposed, payout ratio of 44% 5
Update on Key Drivers Growth Driver % Comment 1. Mobile phone penetration in core markets 20-30% Low & rising 2. Growth in handsets 20-30% pa Dynamic 3. Physical Cards / Electronic Top Up 80/20 Significant room for further shift 4. New Territories China/India Further developments in 2007 expected 5. New Products 28% Net Revenue Software & Services 6
Key issue for year trading & expectation 07 In Malaysia Increase new products and services, e.g. act as payment collection intermediary for non-prepaid airtime business Widen corporate distribution channels POS Malaysia Malaysia ATM network 7
Key issue for year trading & expectation 07 in Indonesia Act as electronic distributor and physical card distributor for prepaid airtime concurrently Launch new software services, airtime distribution through SMS, GPRS and web based reload solutions 8
Key issue for year trading & expectation 07 In Pakistan Steady progress Significant alliance tie up with new telco (Ufone) Growth opportunity remains intact 9
Strategic Next Steps Strategic Next Steps: China & India remain key priorities Grow software services through technology including Mobiepay Malaysia high margin revenues facilitate EPY’s entry into new markets Continued growth & profitability in current markets increasing mobile agents new revenue streams 10
Business Model Supplier Intermediary Retailer Consumer product product product product financial receipts: + $92 + $3 + $5 - $100 Suppliers sell airtime (tickets, etc.) in bulk to EPY EPY resells airtime (tickets, etc.) at a margin to retail agents Cash based consumers ‘Top Up’ their airtime (or purchase event tickets) from retail outlets Retailer receives handling margin using leased terminal Mobile Top Up replacing scratch cards, driving EBITDA margin growth 15,000 POS terminals & 18,000 mobile agents as at 31 Dec 06 11
Conclusions Largest provider of prepaid mobile top up airtime in S.E. Asia Agreements with 13 mobile operators in 4 countries with plans to enter in to new markets (China, India) Low risk access to high volume consumer growth in Asian markets One of South East Asia’s fastest growing ePayment companies Multiple growth drivers including new markets (India, China) remain intact Current trading is strong, confident of outlook for the year 12
Appendix - Fact Book 1. Long Term Financial Results (‘02 - ‘05) 2. Company information 3. Company History 4. Growth Drivers 5. Increasing mobile penetration 6. Conversion from Scratch Cards to e-payments 7. Technology switch 8. New markets in Asia 9. Opportunities for Growth in Asia 10. Board & management 13
Long Term Financial Results Note that only e-pay Malaysia contributed to ‘02-’05 Revenue & EBITDA 14
Company Information Listed on ASX & AIM (ticker: EPY) The e-pay Malaysia group (2002 – 2005) 39% CAGR for past 4 years revenue growth 40% CAGR for past 4 years EBITDA growth Market Cap A$90 million Agreements with 13 mobile operators in Malaysia, Thailand, Indonesia, & Pakistan Retail e-payments network of 15,000 POS Terminals (31 Dec 06) Direct sales network of 18,000 Mobile Agents (31 Dec 06) 275 employees, HQ in Kuala Lumpur, corporate office in Sydney (31 Dec 06) December end financial year 15
Company History 1999 e-pay joint venture established in Malaysia with Nasdaq listed Euronet (EENT) 2002/03 Joint ventures with local partners established in Indonesia, Pakistan & Thailand 2004 Becomes prepaid top-up market leader in Malaysia and Pakistan Nov 2005 Shareholders approve capital raising and name change to e-pay Asia Agrees reverse take over deal with SkyNetGlobal Limited ASX & AIM listed SkyNetGlobal suspend shares Dec 2005 Raises A$4 million at 20 cents per share Re-lists on ASX & AIM markets (stock code: EPY) Trading on AIM commences 4 Jan 2006 Aug 2006 Purchases 100% of Mobiepay, a European communications technology company Feb 2007 FY06 results A$6m net profits, dividend 1.36 cents 16
Growth Drivers 1. Increasing mobile penetration • Mobile penetration rate low in Asia (20-30%) • Mobile penetration rates increasing (25-40% p.a) 2. Conversion from Scratch Cards to ePayments (c. 20% share) • Delivers higher margins for telcos & significant benefits for retailers 3. Commitment to enter New Markets (China, India) • $3bn market potential 4. Technology switch from fixed terminals to mobile POS • Greater flexibility for consumers • Margin benefits for EPY • Allows rapid, minimal capex, expansion into new markets 5. Alternative delivery channels for distribution • Bill payments, numbered tickets (airline, F1GP) 17
(1) Increasing mobile penetration in Asia 39.1% 9.5% Source: Frost & Sullivan Report Increase in mobile phone usage (from 9.5% in ‘02 to 39.1% in ‘09e) Significant capacity for future growth in Asia 80% of mobile users in EPY’s current markets are prepaid users Cash based economies have cultural aversion to debt & credit cards 18
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