Announcement PDF ASX: FND FULL YEAR RESULTS & FY24 GUIDANCE PRESENTATION MAY 2023 IMPORTANT NOTICE & DISCLAIMER This presentation (Presentation) has been prepared by Findi Limited (Findi or the Company) and is authorised for release by its Directors. You must read and accept the conditions in this notice before considering the information set out in or referred to in this Presentation. If you do not agree, accept or understand the terms on which this Presentation is supplied, or if you are subject to the laws of any jurisdiction in which it would be unlawful to receive this Presentation or which requires compliance with obligations that have not been complied with in respect of it, you must immediately return or destroy this Presentation and any other confidential information supplied to you by Findi. By accepting this Presentation, you acknowledge and agree to the conditions in this notice and agree that you irrevocably release Findi from any claims you may have (presently or in the future) in connection with the provision or content of this Presentation. SUMMARY INFORMATION This presentation contains summary information about Findi, its subsidiaries and their activities which is current as at the date of this Presentation. The information in this Presentation is of a general nature and does not purport to be complete nor does it contain all the information which a prospective investor may require in evaluating a possible investment in Findi or that would be required in a prospectus or product disclosure statement prepared in accordance with the requirements of the Corporations Act. While Findi has taken every effort to ensure the accuracy of the material in the Presentation, neither the Company nor its advisers have verified the accuracy or completeness of the information, or any statements and opinions contained in this Presentation. This Presentation should be read in conjunction with the Company’s annual report, market releases and other periodic and continuous disclosure announcements, which are available at www.asx.com.au and findi.co. NOT INVESTMENT ADVICE Each recipient of this Presentation should make its own enquires and investigations regarding all information in this Presentation including but not limited to the assumptions, uncertainties and contingencies which may affect the future operations of Findi and the impact that different future outcomes may have on Findi. This Presentation has been prepared without taking account of any person’s individual investment objectives, financial situation or particular needs. Before making an investment decision, prospective investors should consider the appropriateness of the information having regard to their own investment objectives, financial situation and needs and seek legal, accounting and taxation advice appropriate to their jurisdiction. Findi is not licensed to provide financial product advice in respect of the Company’s shares. INVESTMENT RISK An investment in Findi shares is subject to known and unknown risks, some of which are beyond the control of Findi. Findi does not guarantee any particular rate of return or the performance of Findi nor does it guarantee any particular tax treatment. An investment in Findi should be considered as highly speculative and high risk due to the nature of the Company and its business. FORWARD-LOOKING STATEMENTS This Presentation contains forward looking statements. The words ‘anticipate’, ‘believe’, ‘expect’, ‘protect’, ‘forecast’, ‘estimate’, ‘likely’, ‘intend’, ‘should’, ‘could’, ‘may’, ‘target’, ‘plan’ and other similar expressions are intended to identify forward-looking statements. Indications of, and guidance on, future earnings and financial position and performance are also forward-looking statements. Forward-looking statements are subject to risk factors associated with the Company’s business, many of which are beyond the control of the Company. It is believed that the expectations reflected in these statements are reasonable, but they may be affected by a variety of variables and changes in underlying assumptions which could cause actual results or trends to differ materially from those expressed or implied in such statements. There can be no assurance that actual outcomes will not differ materially from these statements. You should not place undue reliance on forward-looking statements and neither Findi nor any of its directors, advisers or agents assume any obligation to update such information. DISCLAIMER None of Findi’s respective advisers or any of their respective affiliates, related bodies corporate, directors, officers, partners, employees and agents, have authorised, permitted or caused the issue, submission, dispatch or provision of this Presentation and, to the extent referred to in this Presentation, none of them makes or purports to make any statement in this Presentation and there is no statement in this Presentation which is based on any statement by any of them. To the maximum extent permitted by law, Findi and its respective advisers, affiliates, related bodies corporate, directors, officers, partners, employees and agents exclude and disclaim all liability, including without limitation for negligence or for any expenses, losses, damages or costs incurred by you as a result of your participation in an investment in Findi and the information in this Presentation being inaccurate or incomplete in any way for any reason, whether by negligence or otherwise. To the maximum extent permitted by law, Findi and its respective advisers, affiliates, related bodies corporate, directors, officers, partners, employees and agents make no representation or warranty, express or implied, as to the currency, accuracy, reliability or completeness of information in this Presentation. Statements made in this presentation are made only as at the date of this Presentation. The information in this Presentation remains subject to change without notice. 2 FINDI PROVIDES TAILORED, SCALABLE PAYMENT SOLUTIONS FOR ONE OF THE WORLD’S LARGEST DEVELOPING MARKETS WITH AN INCREASING FOCUS ON DIGITAL BANKING SERVICES 3 CURRENT BUSINESS OVERVIEW Findi provides customised & scalable payments services for one of the world’s largest developing markets whilst being part of the digital banking revolution allowing customers to transact in a fast and flexible way from any location. Findi is seeking to increase the breadth of its services and become a transaction banking services provider… New Delhi HEAD OFFICE MANAGED SERVICES CENTRE (1) 1.5 trillion INR Processed across all services lines including ATMs and digital payment solutions in FY22 1 billion+ Transactions supported during FY22 20+ states with Findi operations, going into all states with CBI rollout 20+ institutions Serving multiples strategic partnerships withleading entities 500+ Employees managed day-to-day by the Executive team 20,000+ Owned or managed ATMs across India with Tier 1 banks 10,000+ Findi-Pay merchants currently being serviced REGIONAL OFFICES (4) SALES OFFICES (1) ATM AND / OR FINDI PRESENCE (25) 4 CORPORATE OVERVIEW Findi is an ASX-listed fintech with operations across India, one of the world’s largest directly addressable payments markets. BOARD MEMBERS CAPITAL STRUCTURE Market Capitalisation – 22 May 2023 A$16.77M Closing Share Price – 22 May 2023 A$0.46 Shares on Issue 36.46M Options (strike price 90c) 21.73M Ownership (%)– Board & Management ~25% Cash – 31 March 2023 A$18.3M A$M Nicholas Smedley Non-Executive Chairman Mohnish Kumar Managing Director and CEO Experienced Investment Banker & M&A advisor, with 14 years’ experience at UBS and KPMG. Mohnish joined the executive team in 2006 after 15 years with Citibank creating, developing and executing strategic plans for a range of prepaid card, cross border payments and cash management offerings across the retail and corporate bank in India. Nicholas currently oversees investments in the property, aged care, technology and medical technology sectors and acts as Executive Chairman of Respiri Limited and as a NonExecutive Director of AD1 HoldingsLtd. Simon Vertullo Non-Executive Director He has over 30 years of marketing & business development experience across the financial services, FMCG and consumer durable sectors. Experienced board director, finance executive and consultant with previous roles as the CFO of an ASX300 company and as Chairman of a wi-fi and software technology business. Mohnish holds a post-graduate MBA. Simon is a Chartered Accountant and has significant exposure with listed and private companies in complex situations across Asia, Europe and Australia. FINANCIAL SNAPSHOT FY23 FY24F Revenue A$54.5M A$67.3M EBITDA A$16.8M A$23.6M EXECUTIVE TEAM Jason Titman Non-Executive Director Jason is a boutique investor who often takes an active role to scale-up the companies he invests in. He has extensive experience as an advisory board member, CEO, COO & CFO across eCommerce, fintech and cryptocurrency businesses, including cross-border experience in the US, South East Asia, UK and India. Deepak Verma Executive Director and CFO Deepak is an experienced Chartered Accountant with 20 years' experience in the financial services and telecommunications sectors. Deepak previously held leadership positions at Bharti Airtel and Kroll where he spearheaded the finance divisions during various strategic and transformation initiatives for national network, broadband and data, retail and online businesses. Deepak is a Commerce graduate from the Delhi University. Most recent two placements, totaling $5.1m, completed at no discount with directors subscribing for a total of $750,000 5 FY23 RESULTS Findi’s financial results to 31 March 2023 show the excellent performance from the team with the Company having significantly exceeded its forecasts announced to the ASX REVENUE EBITDA NET PROFIT OPERATING CASH FLOW A$54.503M A$16.795M A$2.438M A$4.67M Up 34.4%¹ Up 127.9%¹ FY22 – A$2.675M LOSS ¹ On a pro forma, consolidated basis – see ASX announcement 15 May 2023 6 FY24 EARNINGS GUIDANCE¹ Continued growth expected after the deployment of more than 2,000 ATMs for Central Bank of India REVENUE EBITDA NET PROFIT OPERATING CASH FLOW A$67.28M A$23.61M A$3.99M A$19.67M Up 23.4% YoY Up 40.6% YoY Up 64.2% YoY Up 321% YoY ¹ See ASX announcement 24 May 2023 7 FINDI ANNOUNCES DIVIDEND POLICY • Six-monthly dividend to shareholders announced¹ following strong FY23 & expected FY24 results • Cash dividend of up to 30% of after-tax earnings, before significant items • Takes into consideration cash required for strategic initiatives & capital expenditure over the next 12 months ¹ See ASX announcement 24 May 2023 8 CENTRAL BANK OF INDIA (CBI) ROLLOUT ON TARGET Findi has now advanced deployment past 2,000 ATMs, continuing ahead of expectations  The remaining ATM locations have now all been approved by CBI, with rollout to be completed by H1 FY24  Transaction trends continue to be strong ATMs in place for >90 days delivering 100+ transactions per day per ATM (forecast of 75)  The CBI contract remains on course to deliver: - Revenue of $25-30m per year - EBITDA of $11-13m annually  Findi will be operating in every state in India upon completion of the rollout  Strong market dynamics in India expected to aide growth in cash transactions through ATMs¹ 9 ¹ https://www.bloomberg.com/news/articles/2023-01-04/india-s-services-sector-expands-at-fastest-pace-in-six-months STATE BANK OF INDIA ISSUES CONTRACT EXTENSION State Bank of India (SBI) extends Findi’s contract to 31/12/23 SBI extends ATM supply contract with Findi to end of calendar 2023 Findi is well positioned to retain the contract beyond 2023 The contract sees Findi supply 3,912 ATMs into various states in India 10 EXISTING KEY FINANCIAL AND OPERATING HIGHLIGHTS Findi has several attractive investment fundamentals which can be leveraged to generate long-term profitable and cash flow generative earnings. This is supported by long-term contracts, including the new five-year agreement with the Central Bank of India, and key strategic initiatives, such as the planned expansion into the White Label ATM market… ROBUST MARKET DYNAMICS LONG TERM & CONTRACTED BUSINESS MODEL NEW FIVE YEAR AGREEMENT WITH CENTRAL BANK OFINDIA $16.8M EBITDA DELIVERED IN FY23 32T INR of currency in circulation with 80% of eCommerce conducted via cash in non-metropolitan areas Findi’s has contracted 80%+ of its total revenue with arevenue weighted average contract length of 56 months Agreement is forecast to generate A$25-30M of revenue annually Findi achieved revenue and EBITDA of $54.5M and $16.8M respectively in FY23 STRONG CASH FLOW GENERATION $23.6M FY24 EBITDA TARGET STRONG MANAGEMENT TEAM EXPANSION INTO THE WHITE LABEL ATM MARKET Findi achieved A$4.67m Operating cash flow in FY23, forecast to reach A$19.67m in FY24 Supported by existing contracts and key strategic initiatives, FY24 revenue and EBITDA forecasts are $67.28M and $23.6M respectively Findi’s Board and Executive Team have strong expertise in the financial services sector domestically and internationally Findi plans to expand into the WLA market,diversifying and de-risking the business and improving margins 11 E investors@findi.co I P +61 8 6444 1798 Level 4, 90 William Street, Melbourne 3000 Australia FINTECH DIGITAL PAYMENTS INNOVATION findi.co APPENDIX 1 – TIMELINE The Company has rebranded its ATM and digital payments business in India to “Findi” following the recent buyout of its joint venture partner. Established in 2004, Transaction Solutions International Pvt Ltd (TSI India) commenced as an ATM managed services provider before expanding into payments and digital banking… TSI INDIA FO UNDED GROWTH INTO CLOUD & C Y BERSEC URITY SALE OF CLOUD & CYBERSECURITY BUSINESS VORTIV REBRANDS AS FINDI SPECIALISED TRANSACTION BANKING SERVICES PROVIDER Focusedon ATM managed services acrossIndia Through acquisitionsof DecipherWorksandCloudten Divestment of the business toCyberCX An ASX-listed fintech with a dynamic offering tailored to one of the world’slargest addressablemarkets Anticipatesto be offering a full suite of transaction banking services operating under a transactionbanking licence 2019 2013 2004 2017-19 DIVESTMENT OF MAJORITY INTEREST IN TSI INDIA 75% stakeacquiredby a private equitygroup 2021 2022-23 CURRENT 2020 CHANGES NAME TO VORTIV BUYOUT OF JOINT VENTURE PARTNER Corporateentityrenamed Vortiv Limited in September2019 With senior management subsequently issued a10% equityinterest 2024+ EXPANDED SERVICES OFFERING • Findi to apply for White Label ATM licence • Intention to begin the process of applying for a transaction banking licence 13 APPENDIX 2 – COMPETITIVE LANDSCAPE FOR ATMS Findi is one of the top companies within the Indian ATM managed services market and has a diverse product offering… PRODUCT / SERVICE OFFERING OPERATOR ATMsEquipment Supply ATM FirstLine Maintenance ATM Managed Services White LabelATM Management E-Surveillance Payment Processing Utility Companies                                                         Findi’s Key Differentiators 14 APPENDIX 3 – MARKET OPPORTUNITY – FINANCIAL SERVICES TO THE UNDERBANKED Findi is well known and regarded within the Indian payments and banking industry. Findi’s further expansion will be supported by the continued growth in currency in circulation, the number of ATMs across India and cash payments as a percentage of GDP… 32T INR1 17 ATMs1 80%2 of currency in circulation per 100,000 people in India (global average: 433) of ecommerce conducted via cash in non-metropolitan areas Currency in circulation (in Cr.)1 Number of ATMs in India1 Cash payments as a percentage of GDP1 3,500,000 275,000 16.0% 3,000,000 260,000 14.0% 2,500,000 245,000 12.0% 11.3% 11.6% 2018 2019 10.3% 2020 2017 8.2% 2016 Jun-22 Mar-22 Mar-21 Mar-20 Mar-19 Mar-18 6.0% Mar-17 200,000 Mar-16 1,000,000 Jun-22 8.0% Jun-21 215,000 Jun-20 1,500,000 Jun-19 10.0% Jun-18 230,000 Jun-17 2,000,000 14.0% Source: (1) Reserve Bank of India (2) Redcore Analysis (3) IMF & World Bank 15 APPENDIX 4 – KEY STRATEGIC INITIATIVES In March 2022, Findi secured a new five-year agreement with the Central Bank of India (CBI) and is planning to apply for a transaction banking licence whilst continuing to develop and commercialise its digital payments solutions which will be a key growth driver for the business into the future and create an ecosystem of cash, payments and digital … 5-Year CBI Agreement  Up to an additional 3,175 ATMs  Guaranteed revenue thresholds  Expected to increase profitability and improve cash flows  Roll-out has commenced and is anticipated to be largely completed by 1H FY24 Following full deployment, this is expected to contribute an additional A$25-30M in revenue annually Planned expansion into White Label ATMs  Reduces the impact of contract expiry by converting to WLAs, extending the income producing life of ATMs  Diversifies income streams and derisks the business  Expected to improve EBITDA margins Findi has applied for a White Label ATM licence Payments and Digital Banking solutions  Leverage existing capabilities into managed services clients  Focus on Findi-Pay to penetrate the growing digital money transfer ecosystem Further development and commercialisation of these solutions is in progress creating an ecosystem of cash, payments and digital 16 APPENDIX 5: RECONCILIATION TO STATUTORYACCOUNTS Reconciliation of Pro Forma Financial Information to Statutory Accounts… Basis of Preparation Profit and Loss FY23 FY22 A$000’s Reported Adjustment Pro Forma Actual Revenue (excl interest) $4,698 $39,664 $44,362) $53,109 Operating expenses ($2,069) ($27,577) ($29,646) ($24,706) Gross Profit $2,629 $12,086) $14,715) $28,403 Employee expenses ($1,014) ($4,641) ($5,654) ($6,686) Professional services ($155) ($481) ($636) ($884) Other expenses ($170) ($1,391) ($1,561) ($2,829) EBITDA (pre-corporate costs) Corporate costs $1,291 $5,574) $6,865) $18,004 ($1,381) $345 ($1,036) ($1,209) ($90) $5,919) $5,829) $16,795 EBITDA (post-corporate costs) Reported • Based on the audited accounts of Findi as provided in the FY22 Annual Report Adjustments: • The Pro Forma Profit and Loss has been adjusted to present investors with Findi’s financial results as if the acquisition had taken place on 1 April 2021 • The corporate costs in FY22 have also been adjusted to remove transaction costsassociated with the buyout of Findi’s previous joint venture partner • Note, the pro forma results have not been adjusted to reflect management’s 10% noncontrolling interest in the underlyingoperations 19