25 Nov

2021 AGM Chairmans address & presentation

Change Financial Limited General Meeting 25 November 2021 Chairman’s Address Good afternoon my name is Ben Harrison and as Chairman, I am pleased to welcome you to the 2021 Annual General Meeting of Cha nge Financial Limited . The format for today’s AGM will firstly cover the formal part of the meeting which is to consider and vote on the relevant re sol utions set out in the notice of meeting. This will be followed by a short presentation from our CEO, Alastair Wilkie . Before we move to the formal part of the meeting, I would like to acknowledge the hard work and effort of the Change Financia l t eam over the last 12 months. As you can all appreciate FY21 was another busy and challenging year to advance our business against the back dro p of the continuing global pandemic . FY21 was a pivotal year for Change as we completed transformative initiatives and laid strong foundations to capitalise on th e s hift in the global payments industry . Following completion of the technology build of our issuer processing business in the US, we were able to accelerate our deve lop ment road map through a highly strategic and complementary acquisition. Over the year we successfully integrated the acquisition with our e xis ting technology and operations to create a leading and globally competitive payments solutions platform which includes Vertexon and PaySim , our testing platform . In the process, Change has also significantly expanded its client base across the globe and with our technology platform supp ort ing valuable clients including leading Australian bank, ME Bank and Philippines based bank, BDO Unibank . Change has also considerably strengthened its team increasing employees and has an impressive geographical reach with staff i n A ustralia, New Zealand, Dominican Republic, the US, and Greece to service its growing global client base. Importantly we are making positive st eps in enhancing the diversity and culture of the organisation. The Board will continue to support and encourage greater diversity in the orga nis ation as it continues to grow . I would like to thank shareholders for their support over FY21. The board believes that the company is in a strong position t o c apitalise on the foundation that it has created over the last few years and capitalise through accelerated growth in the global payments indus try with our leading payments and testing solutions . 1 AGM Presentation 25 November 2021 Change Financial Limited ASX: CCA Disclaimer Important Notice This presentation has been prepared by Change Financial Limited (Change Financial) in good faith. No express or implied warra nty is given as to the accuracy or completeness of the information in this document or the accompanying presentation. All statutory representations and warranties are exclud ed, and any liability in negligence is excluded, in both cases to the fullest extent permitted by law. No responsibility is assumed for any reliance by any person on this docume nt or the accompanying presentation. Summary information The information contained in this presentation is a summary overview of the current activities of Change Financial. This pres ent ation does not purport to be all inclusive or to contain all the information that a prospective investor may require in evaluating a possible investment. This presentation is fo r general information purposes and is not intended to be and does not constitute an offer to sell or a solicitation of an offer to buy or sell securities, a prospectus , p roduct disclosure statement, pathfinder document or other disclosure document for the purposes of the Corporations Act and has not been, and is not required to be, lodged with t he Australian Securities & Investments Commission. This presentation should be read in conjunction with all other periodic and continuous disclosure announcements l odg ed by Change Financial with the Australian Securities Exchange, available at www.asx.com.au. Not financial product advice The material contained in this presentation is not, and should not be considered as, financial product or investment advice. Thi s presentation is not an offer, invitation or recommendation to acquire New Shares, and does not take into account the investment objectives, financial situation or partic ula r needs of any particular investor. You must make your own independent assessment and review of Change Financial, and the information contained, or referred to, in this p res entation, including its financial condition, assets and liabilities, financial position, profits and losses, prospects and business affairs, including the merits and risk s i nvolved. Nothing in this presentation constitutes investment, legal, tax or other advice. You should seek legal, financial, tax and other advice appropriate for your jurisdict ion . Past and future performance This presentation contains information as to past performance of Change Financial. Such information is given for illustrative pu rposes only, and is not – and should not be relied upon as – an indication of future performance of Change Financial. The historical information in this presentation is, or is based upon, information contained in previous announcements made by Change Financial to the market. These announcements are available at www.asx.com.au. This presentation contains certain “forward looking statements”. Forward looking words such as “expect”, “should”, “could”, “ may ”, “will”, “believe”, “forecast”, “estimate” and other similar expressions are intended to identify forward - looking statements. Such statements are subject to various known and unknown risks, uncertainties and other factors that are in some cases beyond Change Financial’s control. These risks, uncertainties and factors may cause actual results, performance or achievements to differ materially from those expressed or implied by the forward - looking statements and from past results, performance or achievements. Change Financial cannot give any assurance or guarantee that the assumptions upon which management based its forward - looking statements will prove to be correct or exhaustive beyond the date of its making, or that Change Financial’s business and operations will not be affected by other factors not currently foreseeable by management or beyond its control. Su ch forward - looking statements only speak as at the date of this announcement and Change Financial assumes no obligation to update such i nfo rmation. 3 4 Global fintech with local expertise We have a diverse team of over 85 people with local knowledge to support our loyal and growing client base. 146 Clients in 41 countries Global footprint 16m+ cards Scalable payments platform Processing for the major schemes 8 + years average tenure Highly engaged clients Our offices / staff Our clients Los Angeles Athens Brisbane Melbourne Auckland Santo Domingo Payments solutions provider, driving innovation in the Banking as a Service ecosystem. 5 Simplifying payment experiences worldwide Payments as a Service Banking as a Service Payment testing Payment simulation All network management and financial transactions Testing automation BNPL, Digital wallets, Apple Pay, Google Pay and Samsung Pay Transaction processing for major schemes Mastercard, VISA, Union Pay, JCB and AMEX Issuing physical, digital and virtual prepaid, debit and credit cards Business Update Change has delivered significant milestones to strengthen the business. 7 FY21 Highlights Completed Certified Processor u MasterCard certified processor launched u Payment Card Industry PCI - DSS certification u UpChange prepaid card & mobile app launched Complementary Strategic Acquisition u Strategic acquisition u Blue - chip client base u Geographical reach u Accelerated technology and product roadmaps u Global workforce Completed Business Integration u Completed Phase 1 of platform integration project on time and within budget u Completed business integration including novation of client contracts and staff integration u Key Executive Team and BDM appointments Go To Market Strategy u Completed an immersive 10 week engagement with Deloitte to refresh Change’s vision, strategy, measures of success and execution roadmap for FY22 - 25 u Developed a strategy execution plan to guide Change’s commercial, technical, and organisational investments and actions We have built strong foundations to drive future growth. 8 Business Update New US Issuing Bank Partnership u Partnership with Axiom Bank provides key relationship for onboarding clients in the US u Partnership leverages Change’s Mastercard registered processor and payments platform New US Payments as a Service Client u Secured new US fintech card program client in the US – targeting go - live in Q3 FY22 u Revenue generation will commence upon go - live, adding to Annual Recurring Revenue Vertexon SaaS Platform launch u Launched a new Payments as a Service (PaaS) offering in Oceania - can be launched into new jurisdictions in a matter of days u Provides physical, digital and virtual card issuing to banks and fintechs u Phase 2 delivered on time and within budget Operational updates u Strengthened the Board with appointment of leading global payments executive u Additional payments, operational and strategic experience added to Board u Launched new website u Increasing PR and IR to drive awareness Year ended 30 June (US$’000) FY21 Actual Adjustments¹ FY21 Combined Proforma² FY20 Actual FY21 Actual v FY20 Actual Revenue 6,313 2,120 8,433 258 2,344% Operating Expenses (8,966) (1,572) (10,539) (3,758) 139% EBITDA (2,653) 547 (2,106) (3,500) 24% Depreciation & Amortisation (635) (267) (902) (12) 4,991% Profit / (Loss) before Tax (3,288) 281 (3,008) (3,513) 6% Income Tax (Expense) / Benefit (189) (16) (205) - N/A Profit / (Loss) from Operations (3,477) 265 (3,213) (3,513) 1% Proforma Revenue US$8.4M¹ ¹ Wirecard FY21 management accounts (unaudited) for the period prior to acquisition, being 1 July 2020 to 30 September 2020 ² On a proforma basis assuming the acquisition occurred on 1 July 2020 ³Run rate Annualised Recurring Revenue as at 30 June 2021 4 Customer retention for the period 1 October 2020 to 30 June 2021 Annualised Recurring Revenue US$4.4M³ Customer Retention 4 96% Average Customer Tenure >8 years Transformative year for the business, generating strong ARR and laying the foundations for future growth. Financial Performance 9 Diverse range of customers and product usage globally. Expansive regional presence and a platform for future growth and expansion . 10 Revenue Breakdown 35% 60% 5% Revenue by Product SE Asia 46% Oceania 26% LATAM 17% USA 8% Rest of the World 3% Revenue by Region 2% 2% 3% 3% 4% 4% 5% 6% 15% 19% Fintech - SE Asia Fintech - Oceania Fintech - SE Asia Partner - Oceania Fintech - Oceania Bank - Oceania Fintech - SE Asia Bank - SE Asia Bank - LATAM Bank - SE Asia Top 10 Customers by Revenue Other Products Bank 54% Fintech 32% Partners 11% Retail & Government 3% Revenue by Client Type Business Development activities has delivered new customers and opportunities. 11 Business Development Update Strategic Activities u Hired a team of specialist payments BDMs u Sales strategies in place for all key regions u Partner growth program under development u Implemented Salesforce CRM to provide greater visibility and management of sales activities across all regions Business Development Activities u Deep engagement with existing clients and strong buy in to product roadmap u Significant growth in opportunities pipeline across Vertexon and PaySim u Strong interest in Vertexon SaaS solutions from new and existing clients that will drive ARR growth u Contract ARR run rate grown to US$4.6 million u Now 146 clients including 5 of the Top 10 payments companies globally 6 10 23 42 49 134 FY2020 Q4 FY2021 Q1 FY2021 Q2 FY2021 Q3 FY2021 Q4 FY2022 Q1 Qualified Leads Number of Opportunities Looking Forward Evolve Change’s products and explore growth accelerators Change leads the market with innovative payment solutions Enhance SaaS solutions and features Focus on market leading user experiences and product features Complement existing solutions with enhanced capabilities and ecosystem partnerships Growth through banks early - stage fintechs Explore retail, government and corporate opportunities while growing banks and fintech Accelerate growth through global opportunities Develop partnerships and build regional relationships with schemes Scale partnership model to increase pipeline and scale client engagement Build out partner ecosystem with complementary financial and banking solutions Prioritise growth for LATAM and SEA Unlock growth for US and ANZ Strengthen client engagement across LATAM, SEA, US and ANZ Explore opportunities in new regions and countries Working with Deloitte, we analysed our products, capabilities and global market opportunities. 13 Core strategies to drive growth Be competitive FY22 Be different FY23 Be famous FY24 Objective Growth Regions Solutions Partnerships We are focusing on 4 key markets; US, LATAM, SE Asia and Oceania. Our target countries have a TAM of over USD $1 0 trillion . 14 A large addressable market for growth opportunities Source: Deloitte June 2021 US TAM $8.3T Transaction value 6% Transaction volume growth 153B Transaction volume # Oceania TAM $565B Transaction value 6% Transaction volume growth 13B Transaction volume # South East Asia TAM $487B Transaction value 19% Transaction volume growth 63B Transaction volume # LATAM TAM $1.1T Transaction value 11% Transaction volume growth 46B Transaction volume # 49% Unbanked Population 15 FY22 Key deliverables for growth FY22 Q1 - Q2 ü Payment Card Industry PA - DSS Certification ü BDO Unibank Major Platform Upgrade ü Established Global Business Development team ü New US Issuing Bank Partnership ü New US Payments as a Service Client FY22 Q3 - Q4 Our Be Competitive year will focus on integration of our platforms, feature development, partnerships and customer growth . ü Board changes announced ü Vertexon SaaS Platform launch ü New Website Launch u Vertexon Eventing u PaySim API launch u Partnership model enabled u Vertexon SaaS Platform launch in new region u Vertexon Product Roadmap release u PaySim Product Roadmap Release u Enhanced Customer Support Model u PaySim SaaS Launch u Axiom Bank issuing onboarding u First Vertexon SaaS Customer Thank you. Get in touch investors@changefinancial.com
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