Announcement PDF ASX:FND CAPEX & CASHFLOW RETURN ANALYSIS OCTOBER 2023 Processing over 1 billion transactions a year, Findi provides bespoke payments services at scale, in one of the world’s largest developing markets. The Company is estimated to deliver Total Revenue and EBITDA of $67.3M and $23.6M in FY24, respectively, in line with previous guidance, driven by Q1 FY24 results & trailing six month run-rate. As we continue to drive scale in one of the world’s largest developing markets, we expect Operating Cash Flows to experience rapid growth through higher & sustained cash conversion, supporting our objective to return value to shareholders. 2 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. FORWARD-LOOKING STATEMENTS This Presentation contains forward looking statements. The words ‘anticipate’, ‘believe’, ‘expect’, ‘project’, ‘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. All currency amounts are in Australian dollars unless stated otherwise. All INR to AUD conversions have been performed at a constant FX rate of ~55. 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. 3 FY241 AT A GLANCE Findi is on track to deliver our previous FY24 guidance for Revenue, EBITDA and Operating Cash Flows (OCFs) of $67.3M, $23.6M, and $20.6M, respectively, aided by the expected full deployment of Central Bank of India (CBI) ATMs, providing significant scale & sustainable cash flow conversion… TOTAL REVENUE EBITDA2 OPERATING CASH FLOWS 2023 contract win projected to contribute $18.3M of revenue in FY24 2023 contract win projected to deliver $7.4M of EBITDA in FY24 Heightened focus on debtor collection timing is forecast to improve cash conversion in FY24 Forecast Forecast Forecast +23.4% +40.6% +341% $54.5M $67.3M $16.8M $23.6M $4.7M (27.8%)3 $20.6M (87.2%)3 FY23 FY24 FY23 FY24 FY23 FY24 FREE CASH FLOW CONVERSION 61.3% in FY24 (FY23: -186%) First period of positive EBITDA to free cash flow (FCF) conversion, as Findi attains scale 1) Comprised of 3 months of unaudited results plus 9 months of forecast 2) EBITDA includes the impact of AASB 16 Leases CBI PROJECTED CUMULATIVE FCFs BLA4 INTERNAL RATE OF RETURN $120M+ 35%+ CBI contract is projected to generate $120.6M of FCFs and predicted to payback by December 2025 Internal rate of return (IRR) of BLAs are expected to be 35%+ going forward 3) EBITDA to OCF conversion (also refer to as “cash conversion”) 4) Brown Label ATM 4 OUR STRATEGIC INITIATIVES Under the current Board, Findi has achieved a series of key milestones, including the 100% acquisition of TSI India and executing a landmark BLA deal with CBI. Delivery of our strategic objectives & scale has significantly improved our cash flow conversion, and will continue to drive our expansion & evolution towards becoming a transactions giant in India… REVENUE FY22: $44.4M FY23: $54.5M FY24: $67.3M EBITDA FY22: $5.8M FY23: $16.8M FY24: $23.6M FY25-FY27 (DIGITAL OPERATIONS) 3. EXPANSION The prevalence of cash in the Indian economy will remain for many years even as digital payments begin to increase. FY24 (INCREASE FOOTPRINT & ENHANCE CASH CONVERSION) 2. BUILD FOUNDATION FY23 (SCALABLE PLATFORM) 1. CONSOLIDATION FY22 (PLATFORM ACQUISITION) • Acquired the remaining 75% interest in TSI India (settled in January 2022). • Set a strategic growth plan for the business focussed on ATM growth & digital payments solutions. • Rebranded to Findi Limited. • Won Central Bank of India contract and deployed 2,000+ ATMs. • Extended State Bank of India (SBI) contract to supply 3,912 ATMs. • Completed $4.3M capital raise. • Submitted White Label ATM (WLA) licence application. • Introduced dividend policy. • Enhanced FindiPay platform and ramped up merchant acquisition. • Complete rollout of CBI ATMs. • Convert ATM contract pipeline. • Execute WLA strategy & establish physical FindiPay stores. • Develop & commercialise further FindiPay capabilities. • Expand FindiPay merchant footprint. • Assess inorganic strategic, earnings accretive acquisitions. • Retain & extend the SBI contract. • Depending on strategy, declare dividend. • Set up an expanded ESG framework. 4. TRANSFORMATION Findi’s payment systems (physical & digital) capture rich transaction data which can be mined to provide tailored solutions. • ATM Solutions & FindiPay bringing ‘unbanked’ population into the financial system – significantly increasing digital payments ecosystem. • Realise synergies & cross-selling opportunities between WLA operations & FindiPay stores. • Increase market size for FindiPay digital products, including digital wallet. • Continue to assess inorganic value accretive acquisitions as the logical consolidator in the local market. 5 FY23 & FY24 QUARTERLY OCFs During Q1 FY24, Findi’s experienced strong growth in operating cash flows to $5M (+45.5% on Q4 FY23), driven by higher & sustained cash conversion from EBITDA, creating a robust cash position of $35.4M, as of 30 June 2023… Cash conversion: (42%) 3% 53% 2.7 3.6 4.2 (1.1) 0.1 2.2 (1.6) (1.8) (7.9) $10M - ($10M) Capex relates to CBI contract, as announced on 15 March 2022, funded by corporate debt ($20M) 55% 109% 6.3 71% 87% 6.5 6.9 5.0 4.6 6.0 4.9 (3.1) (2.7) (0.2) (0.2) 4.6 3.5 (24.6) 88% 5.6 Forecast ($30M) Q1 FY23 Q2 FY23 Q3 FY23 Note: see Appendix 1 for a detailed quarterly cash flow statement Q4 FY23 OCFs Q1 FY24 Capex Q2 FY24 Q3 FY24 Q4 FY24 EBITDA OPERATING CASH FLOW HIGHLIGHTS • Findi anticipates to maintain its current OCF run-rate of $5M through to the end of FY24, with quarterly cash conversion projected to range from 70% to 90% • Higher & sustained cash conversion will be supported by our expanding BLA portfolio, underpinned the ongoing rollout of CBI ATMs. • Going forward, we anticipate BLA contracts to generate 35%+ IRR and payback within four years, enabling cash generation at scale (refer to page 8 for details on typical Findi BLA projects). • Historically, Findi’s capex requirements were funded by corporate debt. • We expect future capex will be supported by internal cash reserves ($35.4M as of 30 June 2023). 6 FY24 FREE CASH FLOW BRIDGE FCF conversion is budgeted achieve 61.3% ($14.5M) in FY24, as we work towards finalising the CBI ATM rollout by the end of November 2023. Further, we are projecting to reduce corporate debt by $6.8M, resulting in Free Cash Flow to Equity (FCFE) of $7.6M, which can be deployed to satisfy and/or progress a number of key FY24 strategic objectives… $25M (4.6) $20M 2.4 (0.8) (6.1) $15M 23.6 Cash conversion of 87.2% projected in FY24 $10M (6.8) 20.6 14.5 $5M 7.6 - FY24 EBITDA Change in current assets Change in current liabilities Interest received FY24 OCFs Capex FY24 FCF Net repayment of borrowings FY24 FCFE Note: see Appendix 1 for EBITDA reconciliation to net profit after tax FREE CASH FLOW HIGHLIGHTS • Free cash flow (to the Findi) is projected to be $14.5M in FY24, after allocating $6.1M to capex required to complete the CBI ATM rollout. • FY24 will be Findi’s first financial period of positive free cash flows, as we attain scale. • As such, we plan to commence paying down gross corporate debt by leveraging our growing FCFs. • In FY24, we will pay-down gross corporate debt by $6.8M, with net repayment of borrowings comprising of $7.6M of repayments and $0.7M of proceeds from external debt providers. • FCFE of $7.6M projected in FY24 will provide us the opportunity to meet certain strategic objectives, such as pursuing inorganic acquisitions, accelerating our WLA strategy, expanding our FindiPay footprint, and returning value to shareholders – by way of an ordinary dividend. 7 OUR TYPICAL BLA PROJECT A typical Findi-owned ATM delivers an enviable $65K+ of cumulative FCFs over its lifespan of 12 years. Initial capex requirements are expected to be recouped in ~3 years, providing a platform for 8+ years of highly profitable FCF generation… $15K $70K Cash flow positive phase Investment phase 65.4 $60K $65K+ Cumulative FCFs over ATM life $10K $50K $5K - ($5K) 2.0 3.0 6.3 5.3 4.1 6.9 7.3 7.8 8.3 8.8 8.8 8.8 $30K $12.2K $20K Initial capex per ATM 1 $40K $10K (12.2) ($10K) 35%+ ($20K) IRR per ATM over its life FY34 1,233 403 830 830 3+ year ($10K) ($15K) FY23 FY24 FY25 FY26 FY27 OCFs Average per month ($) FY23 Revenue 321 Expenses 153 OCFs 168 Capex (1,019) FCFs (851) FY24 622 368 253 253 FY25 772 431 341 341 FY28 Capex FY26 861 418 443 443 FY27 937 410 527 527 FY29 FY30 FY31 FY32 FY33 FY34 FY31 1,096 403 693 693 FY32 1,140 403 737 737 FY33 1,185 403 782 782 Cumulative FCFs (RHS) FY28 974 403 571 571 FY29 1,013 403 610 610 FY30 1,054 403 651 651 Payback period 1) Includes ~$700 for a very-small-aperture terminal (VSAT), which is not necessary for all ATMs 8 QUARTERLY NET DEBT POSITION As of 30 June 2023, Findi’s net debt position was $21.7M. We plan to leverage the Company’s strong forecast operating cash flows in FY24, to pay-down corporate debt, resulting in a net debt position of $13.1M by 31 March 2024… $60M Forecast $40M $20M - 34.3 24.1 27.9 (16.6) (17.8) 40.8 37.0 (21.7) (21.0) (54.5) (57.1) (58.1) (56.3) (53.9) Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 (7.1) ($20M) ($40M) 39.5 35.4 25.9 (16.7) (13.1) (28.6) (41.4) (40.7) (45.7) ($60M) ($80M) Q1 FY23 Q2 FY23 Q3 FY23 Cash reserves Gross corporate debt Net debt NET DEBT HIGHLIGHTS • As of 30 June 2023, net debt was $21.7M, comprised of $35.4M in cash reserves (including cash & term-deposits), and $57.1M in gross corporate debt. • Net debt is projected to decline to $13.1M by 31 March 2024, driven by improving cash reserves and reducing gross corporate debt. • Note, net debt excludes finance lease liabilities on right-of-use assets (or business premises). 9 QUESTIONS 10 APPENDIX 1 Quarterly cash flow statements… Actual Actual Actual Actual Actual Forecast Forecast Forecast Q1 FY23 0.1 Q2 FY23 0.1 Q3 FY23 0.4 Q4 FY23 1.8 Q1 FY24 0.4 Q2 FY24 0.9 Q3 FY24 1.9 Q4 FY24 0.8 Net finance (income)/costs 0.6 1.4 1.2 1.0 1.0 1.5 1.4 1.3 Depreciation & amortisation 2.0 2.1 2.6 3.5 3.2 4.1 3.5 3.6 EBITDA 2.7 3.6 4.2 6.3 4.6 6.5 6.9 5.6 Change in current assets (5.1) 0.5 (2.3) (5.2) (3.4) (1.5) (0.7) 0.9 Change in current liabilities 1.0 (6.5) 0.1 3.3 3.2 (1.0) (0.8) (2.2) Non-cash items - 2.2 - (1.5) - - - - Interest received 0.3 0.3 0.3 0.5 0.6 0.6 0.6 0.6 Operating cash flows (OCFs) (1.1) 0.1 2.2 3.5 5.0 4.6 6.0 4.9 Capex (1.6) (1.8) (7.9) (24.6) (3.1) (2.7) (0.2) (0.2) Free cash flows (FCFs) to Findi (2.7) (1.7) (5.7) (21.1) 2.0 1.9 5.8 4.8 - (4.1) 10.7 0.6 (18.2) - - - Net proceeds/(repayment) of borrowings 13.6 (5.0) 1.4 27.1 0.7 (0.5) (3.4) (3.7) Other financing cash flows (0.7) 0.7 6.3 (2.3) (0.6) (0.0) (0.0) (0.0) Net change in cash & cash equivalents 10.1 (10.1) 12.7 4.3 (16.1) 1.4 2.3 1.1 Opening cash & cash equivalents 1.2 11.3 1.2 13.9 18.3 2.2 3.6 6.0 Closing cash & cash equivalents 11.3 1.2 13.9 18.3 2.2 3.6 6.0 7.0 $M Profit for the period Other investing cash flows1 1) Primarily relates to term deposits 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