EML Payments Announces Record EBTDA Up 43% to $20.8 Million in FY18
EML Payments Limited (ASX: EML) (“EML”) is pleased to release its results for 2018 Financial Year (FY18) for the full year ending 30 June 2018.
- Revenue – increased by 23% over the prior year to $71.0m. In line with the Company’s expanded international presence, 75% of revenues were generated offshore and 92% of revenues were recurring in nature (ie. excluding one-time establishment fees).
- Revenue growth – was largely organic in nature, driven by an increase in Gross Debit Volume (GDV) to $6.75 billion, an increase of 53% across all regions and sales segments. Australia has contributed significantly to the growth with the launch of Reloadable programs in the Salary Packaging industry and strong growth from the Company’s Reloadable programs for the online gaming industry. The year ended with a 36% increase in EML’s Stored Value balance at $411.0m and positive growth in all regions.
- EBITDA – increased by 43% to A$20.8m, with all regional business units generating EBTDA growth and improving against the prior year.
- Gross margins – remained consistently strong at 75% down marginally from the prior year (2017: 76%) primarily due to product mix. The continued growth of the Reloadable vertical in Australia, Europe and North America has resulted in a slightly lower gross margin. Longer term, as EML’s Reloadable products move to Self-Issuance in Australia and Europe the Company expect gross profit margins to improve.
- Operating cash inflows – Second half operating cash inflows of $9.7m were in line with expectations following significant one-off cash outflows in the first half, carried over from FY17, which saw negative operating cash flows of $(3.5m). Underlying operating cash inflow for the year was $15.7m or 75% of EBITDA. The group has no one off abnormal operating cash outflows planned in FY19.
- Investing cash outflows – During the year EML had significant investing cash outflows with the acquisition of PreSend Nordic AB, expanding the Company’s geographic presence in six Nordic and Baltic countries. Post-acquisition, Presend has signed approximately 20 programs for small mall and town centre Non-Reloadable programs, but importantly has signed their first Reloadable program with Instabank, a Norwegian bank, expected to launch in FY19.
- EML continued to invest in the Company’s further developing of its proprietary processing platforms, to support Apple Pay, Google Pay and SamsungPay which will continue to evolve the Company’s business model and growth prospects, alongside efficiency improvements to support integration of the Company’s acquisitions and automation of high volume processes. The Company also increased its investment in PayWith Worldwide, Inc. via a convertible loan instrument for US$0.5m, taking EML’s total investment to A$5.8m.
- Cash – Cash on EML’s balance sheet decreased by 2% to $39.0m which continues to provide the group with sufficient cash to meet its immediate operating and investment ambitions.
- Acquisition of Presend Nordic AB (‘Presend’) – Effective 1 February 2018, EML acquired 100% of Presend, a leading provider of Non-Reloadable solutions for shopping malls and city/town programs in Europe, principally in the Nordic and Baltic regions. EML welcomes Presend to the Group and look forward to expanding its geographic reach into the Nordic and Baltic regions in Europe.
- Acquisition of Perfectcard DAC (‘Perfectcard’) – Effective 4 July 2018, EML acquired 74.86% of Perfectcard, Ireland’s first authorised eMoney institution and a FinTech company providing incentive and corporate expense solutions. EML is excited that the Perfectcard have joined the group and looks forward to realising regulatory & cost synergies alongside expanding the reach of their innovative corporate expense solution worldwide.
Organic Business development
- During the year EML has concluded a number of significant new business partnerships that will be accretive in FY19 and beyond. The most significant of these is with German shopping mall operator ECE Projektmanagement G.m.b.H & Co. KG (‘ECE’) to manage the new consumer gift card program for 87 of their shopping malls in Germany. This program is expected to be fully launched in Q2 of FY19 and deliver annualised GDV of approx. $142 million.
- Also in Europe, the Company is preparing to launch in H1 FY19 key new reloadable programs to provide winnings payout cards for the online gaming industry with Fortuna, Betsson, and most recently GVC. GVC is one of the largest online gaming companies in the world and operates in more than 20 regulated jurisdictions.
- In the USA, EML’s first Reloadable program which launched in April 2017 continues to make a material GDV contribution of approx. 28% but at a lower conversion rate contributes less than 8% of Group Gross Profit. EML’s program with Caesars Entertainment launched in June 2018 and EML has added to its executive team, with specific experience in Reloadable programs, so the Company continues to expand its Reloadable pipeline over time.
- Outside of the Company’s material contract wins which have been previously announced, the Group continues to sign a variety of new deals, many of which are individually immaterial, such as Reloadable programs with Instabank (Norway), Wildcard, ImpactPay, QPay & MyCryptoWallet (All Australia) which will provide growth opportunities in FY19 and beyond.
- EML’s B2B Virtual Payments segment has continued to expand with 51 programs now in market generating loads, up from 14 in November 2017. Excluding the Company’s historical and non-core processing only volumes of $2.5 billion, its full service B2B programs are now generating GDV at a run rate in excess of $500m per annum (up from $160m in November 2017).
Please click here to view the EML Payment’s 2018 Financial Year Results Presentation.
About EML Payments Limited
With payment solutions from EML, you will be empowered with more control, transparency and flexibility over your payment processes. Whether you serve businesses or consumers, EML makes your payment process more efficient and secure from start to finish, while helping you improve customer service and increase brand loyalty. Our portfolio offers innovative payment technology solutions for payouts, gifts, incentives and rewards, and supplier payments. We issue mobile, virtual and physical card solutions to some of the largest corporate brands around the world, process billions of dollars in payments each year, and manage more than 1,100 programs across 19 countries in North America, Europe and Australia.
Learn more at www.EMLpayments.com
For further information, please contact:
Tom Cregan, Managing Director & Group CEO,
EML Payments Limited
M: 0488 041 910
E: [email protected]
Rod North, Managing Director,
Bourse Communications Pty Ltd
T: (03) 9510 8309, M: 0408 670 706
E: [email protected]