EML Reports Record FY22 GDV of $80.2 Billion and Revenue of $234.1 Million

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EML Payments Limited (ASX: EML) today released its financial results and annual report for FY22.

This press release is multimedia. Read the full press release here: https://www.businesswire.com/news/home/20220821005024/en/

EML publishes its FY22 annual report. (Graphic: Business Wire)

Today’s result demonstrates the substantial growth opportunities in both EML’s global markets and its range of payment solutions and services. However, the 4% and 1% decline in FY22 underlying EBITDA and NPATA performance, respectively, underscores the importance of the strategic review (“review”) that will be led by the new chief executive. General Manager and CEO of EML, Emma Shand.

Ms Shand, who took office in July this year, will lead the review through September and October with a particular focus on the company’s growth strategy, development of a more customer-centric, streamlined and strengthened operating model, including process improvements compliance and regulation. The Board recognizes that improvements are needed, particularly in these aspects of the business, to support reliable growth in revenue and shareholder benefits over the next three to five years.

Ms Shand will present the results of the review to shareholders at EML’s annual general meeting at the end of November this year.

Highlights for the year ended June 30, 2022 include:

Gross Debit Volume (“GDV”) of $80.2 billion, up 308% on PCP

GDV represents the volume processed by the Group through its proprietary processing platforms, indicating the demand for its payment services. During the year, it experienced both organic growth across all segments and growth through acquisitions by consolidating Sentenial Group in the digital payments segment from October 1.

  • The General Purpose Refills (“GPR”) segment recorded global organic volume growth of 27% to $12.4 billion (PCP: $9.7 billion);

  • The Gift & Incentive (“G&I”) segment grew volumes organically by 21% to $1.3 billion as it recovered from the impacts of Covid-19 (PCP: $1.1 billion);

  • The digital payments (“DP”) segment increased its volumes by 654%, mainly driven by the acquisition of Sentenial, which was consolidated from October 1, 2021, to $66.6 billion (PCP: 8, $8 billion);

Revenue of $234.1 million, up 21% on PCP

The Group achieved a record turnover of 234.1 million dollars1, representing growth of 21% on PCP. The Group benefited from the introduction of new account maintenance fees (“AMF”) on certain European GPR programs when the account has been inactive for more than 12 months. This resulted in $23.5 million in new AMF revenue streams, of which $17.9 million is non-recurring related to the dormant card book. Income came from:

  • GPR revenue increased 30% to $148.1 million, benefiting from new AMF revenue stream;

  • The G&I segment generated $68.4 million in revenue, down 3%. This is a positive result considering that the prior comparable period included $11.1 million of high breakage rates in North American business;

  • The DP segment increased its revenue, thanks to the acquisition of Sentenial, to $17.6 million, up 71% on PCP. The Open Banking product, Nuapay, is strategically important and should show a solid growth profile over the next 10 years;

The Group generated a gross margin of 68%, up 1% on PCP

EML’s gross profit margins were 68%, with the contribution of general purpose refills increasing relative to other segments, with 57% of gross margin generated by the general purpose refills segment.

EML expects to benefit in the short to medium term from the expected continuation of interest rate hikes by central banks in general. EML holds $2.2 billion of stored value ($2.1 billion in FY21) earning interest income. EML has been impacted by negative interest in Euro balances in the current and prior periods.

Underlying overhead increased 41% to $108.4 million (PCP: $76.8 million)

Underlying general expenses increased as the Company invested in its European operations to meet regulatory resource expectations. The consolidation of Sentenial overhead for 9 months from September 30, 2021 also contributed to this increase.

Underlying EBITDA $51.2 million2down 4% on PCP

The Group recorded a reduction in underlying EBITDA of 4% to $51.2 million, largely reflecting increased investment in EML’s European operations.

Strategic review

In the six weeks since taking office as CEO and CEO, Ms. Shand has toured EML’s global operations to get first-hand observations of the company’s strengths and weaknesses as they arise. are perceived by both management and long-term and newly appointed staff members, as well as by customers, shareholders. , business partners and, above all, key regulators.

”My early conversations with key stakeholders were very constructive and helpful in shaping my immediate focus. It confirms to me that while we have a solid foundation, it is time for a proactive strategic review of all aspects of the business,” Ms. Shand said.

”From what I’ve already learned, I’m very excited about EML’s potential for growth and value. However, we will not succeed in enhancing the value of these opportunities for our shareholders unless we carefully consider how best to define our operating structure and align our capabilities, systems and processes to effectively execute growth.

We have already taken some preliminary steps to improve operational focus, elevate a culture of regulatory compliance to support sustainable growth and optimize balance sheet strength.

I look forward to presenting the results and initiatives of our strategic review to shareholders at the November AGM,” said Ms. Shand.

About EML Payments

EML provides a platform for innovative payment solutions, helping businesses around the world create exceptional customer experiences. Wherever money is in motion, our agile technology can power the payment process, so money can be transferred quickly, easily and securely. We offer industry-leading program management and highly skilled payments expertise to create feature-rich, customizable solutions for businesses, brands and their customers.

Come and discover the many opportunities our platform has to offer by visiting us at: EMLPayments.com

Read more EML stories by visiting our newsroom: https://www.emlpayments.com/newsroom/

Footnotes :

1 Bond investments include a reduction of $1,736,000 (2021: $1,958,000) for the non-cash amortization of the increase in AASB 3 fair value of the PFS bond portfolio at the acquisition date.

2 EML generates interest income on stored value balances and as such is a core revenue stream. Earnings before interest, taxes, depreciation and amortization (“EBITDA”) is used as the most appropriate measure to assess the performance of the Group. Underlying EBITDA includes R&D tax offset and excludes share-based payments, acquisition costs, foreign exchange gains or losses and non-recurring costs related to CBI remediation and Shine Group proceedings. Underlying EBITDA is reconciled with statutory result in the FY22 annual report.

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