LSAK - Earnings call 1 2024 | Lesaka Technologies, Inc.

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Operator

Hello, everyone, and welcome to Lesaka Technologies Webcast and Conference Call.

As a reminder, the webcast is being recorded, and the presentation can be accessed through the webcast link as well as dialing in to the Zoom conference call dial-in numbers provided. Management will address any questions you may have at the end of the presentation.

For those joining us via webcast, you can ask your questions by using the raise your hand button in Zoom. And for those joining via the Zoom conference line, you cannot ask your questions live today. The webcast link Zoom conference call dial-in numbers as well as our press release and supplementary investor presentation are available on the Investor Relations website at ir.lesakatech.com.

Form the its filed Lesaka XX-Q U.S. after Additionally, also the Investor closed yesterday, website. on is which market Relations available

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may the the like on turn the performance you for to back update to the and Chris. Africa, handing for agenda. progress quick and objectives. highlights Lincoln X will Merchant will overview quarter. Naeem with Kola, look you September on Steve year over of and Connect performance Head Chris an QX an have. I'd our to at call financial a floor and provide quarter Taking fiscal XXXX, detailed Lesaka, through Meyer, Division's first before take Group's will today's Lesaka, of Division, to full us Merchant the strategic its Lesaka's of Group this months guidance Consumer start review any of the Southern CEO of division, of questions performance followed the the open now CEO CFO, of Chris for a will key overview Mali, Heilbron, by CEO present against XX, ended who update XXXX

Chris Meyer

Lesaka another division, conference growth Today, and the our division good both Consumer Merchant of welcome our is EasyPay earnings in services million Southern using turnaround businesses. improvement grant pleased grow XX,XXX with the continuation Africa and Everywhere fruit. of XXXX over to our using efforts in call. in continued solutions over to quarter and I'm fintech fintech leading morning the webcast merchants bear MSME platform a quarter and and our our as their afternoon, to growth X.X financial first initiatives and present Good beneficiaries

markets, and consumer with dual-sided an penetrates Our financial ecosystem to across into providing meaningfully opportunity informal deep previously underserved Africa's South merchant inclusion communities. drive us

our milestone ZAR in have at an this around income on business employees for division of the profit from value our efforts customers an services. We time did interest division. resilience of challenging. Despite to profit for environment Group demonstrate African the in million model, Merchant with merchants effect the and this X the a the resilience of executing quarter, the a consumers to operating but the and this ZAR The also quarters. economic that directly digital it's strategy cash the is these they X needs starting to off. It South the South prior very and while comparable it operating is platform, technology I'm remains Consumer strategy more to level, set operating years. the achieved pleased of with placed an this reduction to quarter only not value quarter, made of our is and rates, Africa's testament the loss high has difficult, also and And seeing XX the turning in wider inflation ZAR to X.X million servicing in evidence Africa's develop our this quarter. shareholder results by to unemployment and mind, an important million pay and first the Connect both load our full our shedding generate of financial period economy. just that first which included of South year, And continue over report is Board significant that the growing can impact improvement commitment the is in negatively we

We are proud of these achievements.

already our achieved new a our our they adjusted X.X grew are have of the this quarter. midpoint in to range, results more So EBITDA X.X September. XX% it XX% And initiatives consumer incurred by have adjusted detail during at note is impact revenue the very it merchant highlighted the delivering. EBITDA some EBITDA I'm through billion, came of in upper and turning that the in the on positive merchant and later. But increase our revenue at end businesses restructuring our a we our overall, Naeem starting X.XX would the of annual ZAR ZAR primarily presentation and to consumer our to the ATM see business, pleasing year-on-year encouraged increase a XX% to in in And consumer the group was exceeded from adjusted at we for is revenue. Lincoln revenue without unpack and will million important costs, which, performance ZAR guidance guidance, are We guidance billion quarter. in that growth financials is for which to of business. Group

to a in existing and and that is market provide And as well will firmly includes the solutions Our to consumers cash broaden to will will we M&A bolt-on enhance us and our help that clients. in positioning. leading evaluate this those product digital that to this merchants opportunities fintech our scale sights. providing will offering in as continue acquisitions our offering our our build play vision, role Southern achieving vision Africa small to

is primarily business. on merchant focus our M&A Our

of fundamentally around into adjusted Consumer and have recorded division customer-oriented We And have quarters business EBITDA is turned have consecutive X and which one, successfully sales-focused. this the also profitability. we transformed

over this a our past in We are encouraging made in X activities sheet acquisition million team year. an the of XX of improved activations, operating quarters. far to efforts last traction XXX is outflow flow come account have year, consumer cash very From how evidence and and quarter ZAR just customer in generated significant ZAR which million demonstrating we positive seeing QX early few is the by compared balance our perspective, from

net reduced X.Xx X.XXx, Our with to near-term at we being XXXX. quarter this expect our to below fiscal in achieve debt-to-EBITDA and end target ratio

continue We noncore to which sheet will further focus on our when and balance ratios asset our improve debt disposals, strength complete.

regarding in repurchase a XXXX, debt. In Finbond for XX As will a we cash Finbond million, mentioned in released agreement signed in ZAR QX announcement leading we of approve a firm to of interest have our shareholders in our held means of November we partially expected results, consideration approximately a meeting settle which Finbond transaction. share to utilize XXXX. respect the This intention in in the the is December to be close in XXXX sectors Lesaka repurchase expect to player participate. a which transaction, choose and to is December the we transaction

is through of informal available data often Lesaka Africa launching space. be our empirical markets Economy thought available in market consistency to important our X defining is more will November, hope utilizing this with understanding and combined contradictory. We the economy, leadership. into sets quarterly readily thereof our and informal that data and the in We There Informal in tomorrow, to bring township unique our is work sector insights this little relevant South Index the and which very

to Lesaka Consumer position and division at markets poised and over I breadth next turnaround to Steve of the on exciting would hand through performance an phase an in Group, to entering you platform depth with the development. And of with like fintech its of the Africa's South to and are Merchant that, the Lesaka its division. the of is our Connect informal period its take scale in integrated We capitalize leading

Steven Heilbron

Chris. you, Thank

our through performance, I QX will Before strategy. briefly our run outline I merchant

product digital and and cash and have both We portfolio formal informal comprehensive covering markets. a

position economy to cash the benefit significant us place. from both allows that digital unique taking currently reliance shift the and Our is African the to South in on rapid

at our risks, quick learn adaptable. being turnaround and with formal street As of merchants I annual needs results, the ways get take informal the the to times our we onto incumbents this we pioneer on development to and the referenced are and for shift in innovative traditional responsive up transacting opens products without opportunities delay. We rely ability the and calculated and of We disrupt markets. us to markets recent quickly, the

instilling the holistic is are success we group for merchants. across for offering the strategy as fight culture these our We we our this in Critical have to markets. competitive

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will embed ourselves and and critical We offering in to the formal as markets solutions our value. by continuing extend to primary our offer a entrench our real partner merchants We to X merchants. position informal by MSME

our VAS to XX% make of have which device Our our have VAS that by to to portfolio value a cash merchants. We provide our linked VAS suppliers Kazang X% higher utilizing for result volumes supplier increased underpin have a products, sales adoption, consumer with converted from and increase with XX,XXX or and This driving Pay many products utilizing device Many bill wallet devices. over platform card to stake example, all usually risk. them to relationships our way with partnership our payment starts of device of efficiencies than pay our merchants via drives payments sell our A whilst of our in they a digital merchants of more the across quarter-on-quarter perspective, VAS and informal Kazang strategy. From XX% are payments growth them and card swipes instant take year-on-year an our deeper reduce device. merchants tap settlement. customers, with and also pay These offering. merchant we for products. By stickiness providing can improve by increased

or unprofitable at contributing a is core growth fleet device. results device to can factors. a this following are strategy, decision business, in our our of important large I on major of operations the mentioned with. companies that in to to increased order derisks factors of from from usage supplier devices double devices, from payments of time. uplift than to in admin a with year-on-year throughput. The talk arise resulted an optimization which throughput profitability, and the This to payments service it cash shortly. In supplier on campaign. I Two in a we a merchants QX per is more a in that installed value-add we which last device to payments specific in reduces significantly drop-off number quality informal platform on as competition, our the supplier the margin in during partnered has support at to placement reflected healthy increase year, is XXXX which will our few drives merchants results financial line a which we Focusing a our focus This number strategy QX FMCG perspective

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platform. suppliers new bring to continue onto We our

During partnerships net the basis. onboarding This this when are the focused which are Kazang the impacted last X or up removing quarters, occurrence devices we cleaning growth by delivery has new cashless pattern fleet profitability of sites, on expected partnerships in then optimizing a quarterly from device expanded. an and major existing have any is initiated low business on routes on

include compared to mix South XX% international flat throughput, increase, been money change quarter transfers, relating has money QX a saw transfers. to the impacted which change quarter-on-quarter to international VAS year-on-year quarter-on-quarter whole. the There in significant Africa, XX% a we as our regulatory product to in with International money Turning you has being growth. year-on-year transfers if reduced a a XX% and which in due impacted environment industry have the

we material is have for impact on profit. gross a this a low-margin overall Fortunately, and us, seen product not

units, the POS our throughput XXXX demonstrates our XX% QX by off economy continued payments XX% XX% core a showed of gross converting a devices the IMD, perspective, in of to of the devices. From process this a quarterly card-enabled devices VAS This compared in XXXX, at increase representing QX grew card These frictionless are quarter-on-quarter informal we X% business, Excluding or On numbers saw present much a X% growth throughput VAS to device card our considering XX,XXX year-on-year our very on acquiring representing The a and quarter-on-quarter VAS year-on-year. basis, business of quarter-on-quarter higher or profit merchants' increased growth increased annualized. time. XX% a adoption and customers X% a an installed healthy base. XX% growth XX% are our year-on-year increased and a throughput growth. In good pressure growth under basis. annualized to

momentum market our card that guidance. we margin growth to and the good and shows communicated the supports VAS rates throughput growth Our in

bolts market, cash by more on and Our throughput approximately good interest our falls cash pressures loss informal increasing exposed which the load by we a primarily we has been is to with X% increase rates shedding, or in XX% SME a in digitization have market. Year-on-year, annualized. former or consumer the impacted up severely a with quarterly of throughput QX over number X%. basis, QX momentum in X% seen On cash saw

We effectively risk operating stores profiles merchant driving our also positively a their putting are efficiencies. bank in whilst enhance and

informal interest in to and a is As across anticipate dynamically we businesses. we solution by and inflation, with our the High high real impacting merchants' making difference compete the credit formal grow. extend market, them enabling informal rates our lives coupled

execute As to don't change if we quickly, I we and the result, innovate hesitate but course. don't mentioned achieve we earlier, desired

or are resumption downward for credit recent interest sector operating the such, encouraging merchants, which reductions anticipate informal trading not and at of result the the decision. By and Kazang many is are proving data an origination allow its loan of offering, gone in loans, drawing later And the effective a disbursements Advance with and product rate have new the we a showing form. in primarily this favorable year. Our may of current our we growth and withdrawn Pay board. The book back credit in more accounts, a top to as near we for in environment trend, cycle inflation

the difficult be its the by term. The a encouraged replicate. Whilst meaningful with challenging that it believe stage, very would are recent the I'm can which environment with and payments pleased that we and is remains platform performance partners by yearly be not to an make EasyPay which billers this, our quarter-on-quarter, our we business bill contributor this profit at market contribution the achieved retail and offers formal the the this major in increasing market deem has over the important, platform, solution, in into all during With retail Our are it switching on and XXXX management and VAS, we extensive the structures. embedded strategically pressure through X% quarterly to growth circumstances. a in has economic financial enterprise experienced this device years. Despite have XXX technology invested and material under throughput medium been systems, and footprint changed throughput and we XXXX

and We have In few a development critical agility our success. exciting innovations cycle. are long-term in this fintech-enabled environment, innovation to

fortunate installed delivered the to strength, which a we reported in are Considering continue the can increase with with are quarter-on-quarter. adjusted over X% We drive experiment and and year-on-year large very quarter-on-quarter. result. From X% a decrease XX% pleased this period, growth. headwinds, merchants we perspective, our segment EBITDA we year-on-year have merchant faced XX% this to increase the a and a revenue skill across innovate, division The base financial position client an

Our items, pulled few back. first us quarter profits were which impacted by a

Firstly, a merchants, small our adjusted on outstanding impact X necessary Pay approximately providing the Advance, Whilst of credit of Advance exposures to withdrawing ZAR in the EBITDA Kazang credit profit Advance Pay for expected million. remaining we the for losses Kazang Pay quarter provided result at as this segment loans on and Kazang informal overall made was conservative. The the on offering of outstanding end our quarter-on-quarter we suspension of was the quarter. a

million of the This restructured Connect charge we in ZAR Secondly, one-off resulted quarter. when it business. business integrated was ATM our a with this X.X restructuring Cash

recycler EBITDA factors of a growth of to is these X the X% QX. quarter-on-quarter significant for results VAS adjusted alternative generating in interest ATM innovative segment in bulk Our effect an as merchants. Adjusting

do presentations, of and in discloses time, These impact time given mentioned material each previous in deals take profitability. slides our VAS As our improves offering advantage from deals flow. cash bulk we group Naeem to in the his these which separately quarter on be can

deals, than combined benefit the the comparison. to material, also quarter-on-quarter but a individually in EBITDA in included negative of Whilst for. contributed of on hoped had results we growth effect repeat had profitability such segment a impact the had lower a which not bug no QX, QX Our from this we adjusted

conclusion, to pleased profitability considering profitability very environment. results However, over in our through of to Lincoln are challenging achieved line strong. In with underlying I'd we hand growth the take Division you the and QX, business the Consumer top remains like and strategy. to the

Lincoln Mali

in segment another morning EBITDA. the Steve. Consumer increase report and you, pleased to Good with continued afternoon, profitability in everyone. adjusted Thank Division I'm

channels. At reducing As have the incentivization provider product dedicated marketing distribution this, exclusively on report we including spoke see about a as Division and networks Consumer only service through results experience effectively design focus initiatives promote as the repositioning and with implemented I results, resources force very financial of improved growth, our through. brand understanding support to friction of their on coming grant active sales possible the enhance are to programs. I'm customer-focused on with engagement based activations, and to part budget, some increased to to customer pleased of These XXX% and convenience sales switching, investment business. we to servicing have we our needs and fit-for-purpose and continued starting renewal to focused that fundamentally onboarding to and quarter change are that customer our fourth various their encouraging wider SASSA service account in incentives initiatives in address recipients, systems,

months change as We over few in start pay account the to our have broader step initiatives seen openings past a off.

child churn, in cease which permanent of XX% shown X, EPA represents persistence approximately a when XX,XXX a Our important improvement year. as the recipients. ended turns quarter over over activations, the a XX approximately a support to as with XX% activation chain to us and momentum mortality we grant coming be grant is is to impacts a was million compared gross grant quarter over account last factor growth. activations estimate from XX,XXX of X.X We XXXX. Natural the per resulted grow XX,XXX annum. to which recipients. first evidences the ground the It active in reduction past old of base are aid is and increase quarters. I've net an growth This the child in about through, space We were growth, up. account see I'm further for maintain encouraging have this this in quarter X,XXX which customers, to it already which EPE seen have which and year-on-year excited cross-sell our but account teams the core quarter our with provide few the a referenced XX% to XX%

Our million XX% loan XX% Gross to XXX ZAR of XXX book end. quarter increased compared quarter were last at million the EasyPay ZAR for year-on-year up quarter to advances year. X

basis. Our at X% stable loan remained on loss ratio annualized an approximately

product insurance active good from its policies end, increasing XX% continued growth a growth. last Our XXX,XXX of year. at to quarter

XX% Our insurance book penetration quarter approximately of the XX% end increased from X. year last to at below

beneficiaries an by on our grow their based to reported and by policies serve to to whereas industry industry clients compared Our with funeral our above the retain over the which the whole, our grant as funeral value those lapse has policy contracted. insurance replace statistics, rate lapse competitors. are demonstrating funeral policy industry by to of for book offering our holder around key less well likely a longer XX%, that we X%, rate our customers. We've our indication is an offered grown the continues annual Furthermore, insurance offering annual in-force policies XX%

increasingly and both the ratio books our despite managing are with we pleased to lending the are of quality collection and as economic tough We high rate environment. the maintain loss low insurance

month over has from of back ARPU at our the of to per XX efficient improved quarter. approximately XX On ZAR last ZAR month the end per year cross-selling, this

last saw we a to X, ZAR revenue year. to increase quarter in For XX% million XXX compared

to XX quarter ZAR a Our flat. profit improvement, continued show from EBITDA year. Compared adjusted for this million XXXX, quarter EBITDA a primary was segment profitability loss ZAR to XX achieving excellent last X million measure,

placed X of quarter cost will detail. in improvements base The and period. X% and through in first our in adjusted products, would this South especially very grant are Africa. I our the you and if hand ZAR who revenue are would jaws However, like million, rightsized the conclusion, bearing take during profitability. In recipient share quickly The improvement sustainably I'm that to delivering expenses positive of have to quarter for and see market over have and and seen EPE we results, X.X Naeem EBITDA account technology more income been our in distribution sheet pleased balance increase openings expand restructuring improved one-off we higher. to the the in statement with well fruit, now, the

Naeem Kola

you, Thank Lincoln.

performance overall the Chris quarter. The what revenue is operational and year important trends exceeded remain ATM division merchant As It positive. ZAR of Consumer the of in first despite would adjusted million with the of guidance. our our the Division out in our have our guidance against we XXXX X.X fiscal set again do environment. EBITDA and which merchant delivered our the note the drivers to that trading we costs divisions business signs EBITDA end also momentum group momentum mainly quarter for we into incurred is restructuring without revenue in said, both seeing increased of key within reflects We to upper challenging reported positive in translating at financial guidance

is in U.S. domestic a a States. filer As results reminder, in dollars report U.S. We under the Lesaka United GAAP.

performance South African rand This However, as such, currency is the and periods. full quarter to African Group prior our for first with in Connect included our comparable both year is operational directly in that analyze we the rand. South

compared acquisition, up XXXX QX the reported the due for in consolidated asset XXXX we $XXX ZAR reflective caption, condensed treatment the QX charge. In is quarter, to million reporting nonoperational X% the XXXX, the statement to acquired Group $XXX in Related weakness both this in reflects million include our million in ZAR QX billion acquired dollars, second interest. Connect an XX% our million the a we million tranche compared a ZAR the amortization is of thus, QX accounting created for the XXXX. In in QX for operations. Looking which accounted revenue quarter over the and at U.S. acquired for million consolidated which and amortization the X.X important loss dollar X% received, fell XX an allowance receivable revenue equity related intangibles. loans we upon reversed of in income loans million a quarter, of the the to ZAR compared sold investment, level, we consolidated U.S. for This the we in and to XXXX statement ZAR EMI of accounting included assets, to has by of amortization an in doubtful to of X.X September for profit compared ZAR and noncash been allowance ZAR X.XX quarter, quarter for grew doubtful X% XXXX. the is receivable the XX X.X and interest of the reversal reversal to against a carbon, income for sale ZAR noncore a equity milestone million achieved of XXX payment Depreciation period. At of of of the fiscal of operating XXXX the

in measures net in QX further XX XXXX is by impacted XXXX in investment. XXXX XXXX investment reported QX period, South Our of QX expense to the QX to made the XX in QX optimization Africa XXXX. cash XXXX the rationalization decreased the compared Finbond, from million interest progress group. through ZAR benchmark we interest in million in the another versus across QX ZAR rate mainly In noncore increase prior in

Fundamental receive expected from loss million We statement equity impairment XXXX in the consideration improving loss that million approximately position management's by during and against XX% the expect have compared of expectation is held to of foreign measure to and nonoperating because XX share the this into due to will per per to December asset which impairment be we net to adjustment end entered In cash items approximately other amortization on the recognized ZAR loss transaction share, close. The currency of nonrepeatable the narrow, when XXXX. Overall, to is QX sold share. the quarter. relates on no the XXXX investments this given are continues the excludes investment reserve per value. translation the investment income accounted the view, noncash The agreement for ZAR items, Finbond impact X.XX eliminate required one-off ZAR Finbond items. appropriate arises PPA this to December we and a earnings exit in to position XX

loss ZAR an XX% a a Division, improvement and result robust a serve. In million Consumer increase at reporting given compared Consumer XX to X% income mentioned, As we and an improvement year-on-year. compared performance. After of operating quarter-on-quarter, amortization million nonoperational for milestone delivered of merchant this and acquired XX% to merchants QX year-on-year income in environment adjusting the level, challenging largely quarter, income ZAR operating million to to an we million is X.X the operating noncash At operating the QX hit level, XX which XXXX. for accounting attributed important a of divisional charge, intangibles Division's we ZAR XX in have grew XXXX, in delivered of operating ZAR the an revenue revenues

reduced very XXX audit, adjusted to September consumer ZAR the segment Group slide. Group million next adjusted in in Division XXX% XXXX. quarter. Merchant seeing million growth foundation new income the to building reported quarter-on-quarter XXX XXXX. QX transactions, at driven level The the quarter third-party at adjusted the the would are highlighted in million QX to EBITDA our XXX ATM reported his consulting in the year-on-year, XXXX. compared on ZAR momentum compared XXX division Steve ZAR acquired have detail to but cost came lower EPE revenue increased million a XX EBITDA division, Division million Kazang for XXX Adjusting ZAR million external of will for our quarter, for for annuity provisions initiatives are to in delivered earlier. vouchers results decreased XXXX XXXX XXXX quarter the during segment compared by consumer Merchant Advance million QX and to to primary million QX million ZAR indicator consumer the Consumer airtime QX I revenue unpack of legal decreased and midpoint Merchant XX X% X% base. Year-on-year, although in market as in bulk this increased XXXX. in XXXX. segment of million ZAR mainly lower to EBITDA which VAS Merchant and revenue of product the group by reasons is to good revenue revenue activations XX% due million compared QX for our XXX in We of related overview, ZAR and This for guidance Pay of the in related deals by for increased of it of this account the XX ZAR QX ATM positive EBITDA. Consumer ZAR XX further is addressed ZAR sequential in to X% adjusted EBITDA a adjusted ZAR loss costs quarterly fees. the XXX in resale restructuring XX% are Lincoln the in from Division the a

per to would translate net cash momentum share the XXXX. Quarter-on-quarter, in XXX quarter-on-quarter in Consumer we loss QX million. In impact the activities quarter XXXX adjusted loss per per to to Fundamental segment improving a momentum cash this is will operating by EBITDA to first the million cash anticipate XX ZAR used ZAR XXXX. account loss share restructuring a scale the reflect an in of activities provided adjusting flow XX% ZAR XX to VAS Division, million bulk have quarter. Advance of in share and net we saw XXXX. the consumer Pay for purchases continued to X.XX ZAR the segment QX after as ZAR X% our ZAR financial of costs EPE for achieving perspective, ZAR from narrow per EBITDA in cash XXX of XXXX million compared withdrawal, of to XX a similar QX X.XX QX Excluding between Merchant X.XX we positive Kazang continued of million activations XXXX services From generation in improvement compared of adjusted in continues improved ZAR XX% into platform. increased a operating

business, are in requirements negative acquiring a our growth ZAR XXX every approximately additional book and we We small. in further working generated in XXX capital this working ZAR how paid, estimate working of from ZAR generated card funding. million cash and ZAR relatively merchant million our in XXX X throughput that capital. The statement generated business We ZAR cash. In increase paid, before items movement Looking of define EBITDA of an generated on year. flow to business In operations net XXXX, We business compares per operations. consider an million, million activities requires Kazang XXXX capital-related QX cash purchases from VAS million QX interest as cash XX the in to we cash mainly our requirements falling and prefund capital it to loan end working month to ensure in requires operating appropriate relates XX ZAR at volume utilized over this cash weekend, tax indicator the weekend. meet conversion operating to flow million

net EBITDA the Our debt the quarter. for specific calculated net is divided group annualized ratio adjusted debt-to-EBITDA by at as the date a

year XXXX, this in X.Xx quarter compared to due in in QX a X.Xx performance For to QX and ago improved XXXX. EBITDA QX improved XXXX to X.Xx the

with mentioned in of are we are our funding now which QX arrangements, XXXX, very conclusion the new As finalized. pleased

loan the defined XXX ratio, QX of in expenditure in our we reduction debt result strategic G&H. Capital million. the on If this ZAR ratio. facilities debt-to-EBITDA points bps of a basis in X.XXx, on in margin net objective a further G&H agreements XXXX to agreed amounted on over margin group. improvement achieve will XX as basis below to by reduce have XX the Reducing our lenders a for debt-to-EBITDA facilities net net remains a Our the

highlighted, is to As we mainly merchant related growth previously CapEx the this division.

comments the out Our hand growth the continued improvement and quarter. Chris to financial outlook on for a Thank strong delivering performance invested. In CapEx full delivers will conclusion, the capital operational over IRR QX his of for we year and set evidence QX in guidance the XXXX is results. the on and for against you. I

Chris Meyer

Thank you, Naeem.

provide million of ZAR and X.XX to ZAR of billion our year of like ZAR revenue to our million. guidance guidance XXX XX.X XXX to ZAR of would XXX revenue reaffirm like adjusted our to full group XXXX EBITDA group ZAR ZAR quarter I I ZAR to billion, XX.X and X.XX adjusted would to million. ZAR Turning also million XXX guidance. to billion X EBITDA billion

stage. outlook impact questions transactions Our for any presentation attending have Thank you you invite at the And for this to M&A to of any the of not you. you does occur. Thank provided like would ask results XXXX. September include the may that first quarter our ended period I XX

Operator

We're you, ways the going open now to are From there Q&A X can Zoom, participate. you up session. Thank Chris.

which your and is a on Clicking hand on. placed ask called of you'll to the first be at the queue a alert operator raise will that bottom icon, your you be question, screen. so and want live The in called to this the use to is

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to live Raj going be question first The is Sharma B. of question from a Riley.

Rajiv Sharma

also a churn understand, accounts the immediate it about could of about what you little the acquisition on side, you do I the you for And believe set available to going opportunity cadence the can I Yes. bit can on in of bit months. little dynamics all, last have wanted consumer I that EPE several then customer that's consumer the the pretty natural/deliberate and accounts the the a forward. the up talk Connect -- churn talk going? a are on But first question of be and side. in down see follow-on and the where adding

Chris Meyer

maybe see we take churn. growth it. And as going Thanks, the to market ask question the to a I'm about in the Raj. then opportunity speak on little bit Lincoln I'll

it the take we'll So other way around, if mind. don't you

at therefore, terms in the we really in achieved natural grant old-age the firstly, and natural child it churn for recipient think other beneficiary the And -- attrition is call and category, natural qualifies space that churn XX% you numbers, churn XX% generally that natural -- each to our about is XX% approximately our piece firstly of is to the account in where the about seeing. And the year. churn space for attrition age the that grant there's in we are just if seeing grant look to a in then at of some that of grant We're churn did categories from we have longer XX% numbers passes grant which do XX, that with account that the to no we do away. And grant. Those we do with So in time. the did parent the is a spike annum. In base what the time child per churn, some mainly we space. moment with in as, cleanup to dormancy, in natal away, was if would QX, attrition

So and for saw that that is we action that our It in the an was we But was that -- a part. some why churn on time. quarter. decision took spike at

to immediate we that we want the pick growth question the of up opportunity focus sort the quarter, the and to what normal regard. in would ranges. Lincoln, This you if on consider back

Lincoln Mali

Yes.

remember conversations over we've you So the Raj, had previous if the quarters.

as and on We X -- of been relationship opportunities. with was able we've turnaround out first the on and got cost of growth taking now SASSA part improving training brand, focus business, stakeholders. we the we've that growth complete. us The to our staff, our And phase out repositioning indicated, those our

The financial base to to going able we you is are attract somebody to a that versus be come grant one always getting the first of that to who every one have to positioning recipients month, new and customer else. us are ourselves grant or customers institutions key that

customers The office. that one those the are post leaving are second

And giving be position to so opportunity to combined those. of take us ourselves those advantage opportunities to able are X the

we've our able to the have gross look our number see you done year. if the the quarter net in we're to XX,XXX. And because So to able initiatives, and at rebranding customer for XX,XXX base exercise, grow we to sales activations previous marketing, of poised be we been more momentum our well are think this had is and that quarter, much starting we of communication than our

opportunities those for advantage of we them. So us, are and able to there are take

Rajiv Sharma

it pressure? Or competitive it Great. a own to And Advance Connect little purely about it the product? talk on product Is competitive it revamped? bit pulling needed color you that on could back. a the your more you this give was Was Kazang Steve, be Pay just Could side, was also -- it that?

Steven Heilbron

we with our in our I performance number we mentioned product. Kazang the something is we Sure. and we as not philosophy brought a last were We Raj, advanced year. on market that on had experimenting of product, algorithms product of so the our to vintages a loans. certain happy that based have think of -- I of launched, those The with Pay presentation, back

make we basis, a is to what mentioned, going but but we learnings we data Kazang tweak a the the some need made some the small into some healthy back profit to an in the pull warehouse. of and Pay We're the I as Now credit product to on base, piece. decided points the into product tweaks overall and relaunch of

were with not were that we we getting. happy the just So response

which still to pull opportunity. excited if can felt are and relaunch. will But we we the see we excited So we say, back, I And culture about just an I experiment quite we're quarter reengineer today, think a next. of talking to part like been learning, presentation not to the present but as this as true -- about that the failure, we've from really the is each

Operator

questions widget. over next Our Q&A came the have we X

M&A, the would one. one can potential your market go go any line Guys, and for transactions, give time for? looking funding you how you the sense about thoughts to what potential by of us going on a you're I'm So

Chris Meyer

line question? thoughts on M&A you market? want take and the time to do Steve, the

Steven Heilbron

Yes.

talk difficult very So to I think is to. timing always

this financial We're we We point, are year. These to within very I expecting specific with transactions good say are we it's -- think -- sorry, engaged targets. real financial fair progress. making would will particular very opportunities. very, at close 'XX FY that the are and hoping within on we the that QX

be a really equity really our will again, this combination own transactions, In and funding of raising using of equity, those debt. combination terms a of

involve a of looking we are straight the Some share will transactions at swap.

Chris Meyer

the if strategy focus we think on for levels important to funding parameters strategy, that, we've us, debt that debt number a M&A, market our the put I pertaining add ratio. a to capital we could of EBITDA about and I spoken around have to

So important thing. that's an

be any at a always will point relative the value Secondly, and our shareholders And key value in time. our relative of thinking share about value to determinant.

bring we So accretive underpinning opportunities anything might and M&A that disciplined we're the to very mindful around table.

Steven Heilbron

areas If the saying accretive, core -- pay is to scale being but addition bolt-on to And of the client merchant just majority existing think I an this services our currently we also create thrust the is from besides in is play, to can space. is add on in of say new focus in our the is I terms the M&A perspective critical merchant merchant that focus maybe either what Chris product offerings we did the on business. base of to

Operator

Thanks that for color.

is business, how Consumer the coming Postbank? growth from Moving consumer to of much

Chris Meyer

to in. the start I'll maybe bring So approach I'll Lincoln and question maybe

there's empirical from. where growth of So no exactly comes evidence

can customers in anecdotal in as see we onboard the significant in our evidence Postbank's speaking what's is the information. we market. customer we of on going base, terms numbers reduction them, to see that have We can public and

So yes.

recipients away universe grant talked recipients. new entering that base. coming about is this post moving of per I think about annum grant there's X is And XX% then a trend Postbank into X from number Lincoln categories. Category And the the the office.

the is the And most positioned that something and trend, well post we're biggest opportunity I and that of that that that is is from for. the is for whole, on obviously very trend on moving -- focused is us. present think office the away

Lincoln Mali

community on And how customers with the the that And we're could post come and to us add because that how us a to just appears leaders we customers to to of them that. wrong of is to important of them. to of relying want want we're want proposition something to getting office. customers for with lot that and to getting so from become referrals see competitive a I What's services if to our that. have customers, goes engagement proposition value be lot very from us. We a not we we all existing attracted speaks also traction a to other just provide. We're to our Yes, we that want

us So helps position to of work well. that all ourselves

So then on count if we a in fixes for problems that we if are obviously, are to making office, if post there give this rely troubles post just the we favor. and will But our we our Because relevant that sense grow. it the is sure in office customers. post focus problem, proposition don't only makes room have office, in the our

there competitive So market a those that we be retailers, value and with out to there is want banks one by are and because of proposition. our preferred customers of

Operator

the reduction Congratulations submitted the quarter funding Next good on solid on a from David news costs. question Garrity. and of was

XX.X% year-over-year revenue about What you've to midpoint this? indicated the you previous factors the growth. are leading This given, is guidance year's lower growth. On that than

Chris Meyer

thank think I very question. the for David, -- much you So

partial I need the a prior year you inclusion period. that between Connect FY you the remember Group take and 'XX, into of think firstly, growth so the to 'XX account -- for FY must

last quarter, Group to of XX%. we said that it of revenue why 'XX of last at difficult look numbers addition so very I make gave the start medium-term guidance expected -- to XX% our year into we like-for-like think the around at and is the targets FY growth, a So we beyond. And Connect when make comparison the year, around

revenue would XX gave, to beyond that that. XX.X an full year where of billion. And recall, indication expectation you sort also ZAR billion we ZAR if a our year of be full between of we our expectation said guidance medium-term outlook So around

what's important believe guidance in we're guidance. And highlighted the into an in important QX merchant the coming I presentation that seen highlight we're slides earlier. time, terms is particularly our today in we is And Seasonally, busiest have and also it's QX is that our year quarter next and consistent full outlook medium-term with is giving So of think to business. the seasonally would for you time. in us

look that need revenue we well. within think at the context I to guidance So as

Operator

to in going come Hills Theodore The question from Litchfield Research. is phone the O'Neill at next from

Theodore O'Neill

My good the in the on question segment. is Congratulations ARPU consumer quarter. about

that for target going an if about we absolute could forward, a think a issues. then showing ARPU. do Just about as XX% number wondering you a headwinds? talk to or growth given I was that. questions Should that that growth in the in of expect wondering we those achieve ARPU? rate number couple And to slow You're year-over-year And economic number around you

Chris Meyer

question I'm thanks for happy around the question. to Theodore, take ARPU. the

happy the we've growth we're that So yes, seen in us, for ARPU. with

base focus of the terms our provide. ancillary into actually we penetration that the is For us, around in products customer

to base, transactional So from customer on base. remind spoke our and from the our primary focus the were levels. credit XX%. fees just ARPU account come insurance around penetration look from moving where focus -- about is has both we and levels and offer And And in our there, account. the to our penetration we EPE growth growing XX% is -- to And the we to from insurance moving the

months back number around look you ago, that was XX%. XX If

book, maintained we've So our very seen we've seen in good around the penetration we've base. a with insurance. that XX% even growth and loan on the customer And penetration growth of in

drivers. those are the So

like, if target, you We penetration. of in a overall haven't set terms

you give underpinned primarily. been I what's too sense what's think -- that the in but increase it's overall should set for revenue us to early of out, a that

Lincoln Mali

in material loan still the this the ratio quality our the has seen industry. these in stable any in deterioration that not industry lapse loss of that in have our our continuously we are times, high what's book, also have of but below norms remained difficult rates time, even and also that quality we maybe add in that watching and space we insurance even businesses. well side, I happening watch difficult the we Can regard. And above rates And are are during also the collection

just was So as but we quality these watching also Chris of saying, therefore, times. are and that during growth. growth, for resilient therefore, is ARPU difficult us, not And that

Operator

Merchant removal the few next growth Division the few the impact Pay Advance over Kazang in been the more quarters of in revenue chat. submitted other A on How have lines? here that does

Chris Meyer

to up? do want pick Steve, that you

Steven Heilbron

Yes.

in saying of me I off have momentum start essentially, by 'XX think let numbers FY So has that Chris given and that QX that guidance. and the support guidance disclosed we terms the

the into QX can a back to and I'm are bring impact we though, profitability like we've from early So do Pay that or that Kazang think that we and of try more factored that have QX. we presented. numbers I that Advance table. We would in The to perspective, of be all hoping, hoping FY will in the enjoyed 'XX.

to X end segment adequately we're are Merchant neutral as over the on made So in look as presentation, product. ZAR I a EBITDA. we'll at in provided it million, quarter we affected provision we product less which that We believe we earlier, and -- the tweaking QX It's mentioned adjusted conservative or the of the we period. and mentioned that of the we our P&L We a basis back. -- now bring more pulled

Operator

an Can today. and question final performance update you offer MobiKwik on its our And plans? Great. listing

Chris Meyer

I'm to we'll that. quick. Yes, do. happy take Maybe

be So I performance in least generative. consecutive have X I to EBITDA cash They overall reported for, quarters continues business at the think good. the positive and think,

to their calendar XXXX. look cash The a it management of that business, is to spoke recently. in MobiKwik when the of is talk us to them second business. We in list in track the IPO focus positivity founders business. range to the So is put reaffirmed expected They a to position and we to the the building understand half intention we record and to EBITDA them generation

June, after focus. somewhere their So probably is around September, that

MobiKwik remain direction positive of overall terms -- travel we exposure the business. overall the so and to And in of the of our

Operator

We've mark. great. Well, you, our hour Thank everyone. hit

So everyone the after be questions, disconnect, a Lesaka a the We we're wrap for there you replay website. on participation. And someone will will them. answer team going were this from reminder Investor there thank to of shortly webcast you, here. reach you out everyone, your remaining to to any to it IR If

Lesaka (LSAK) 8 Nov 232024 Q1 Earnings call transcript