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Open sesame

EML Payments 14 April 2021 Update
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EML Payments

Open sesame

Acquisition

Software & comp services

14 April 2021

Price

A$5.72

Market cap

A$2,070m

US$0.76/€0.64/£0.56/A$

Net cash (A$m) at end H121

100.3

Shares in issue

361.8m

Free float

93%

Code

EML

Primary exchange

ASX

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

11.9

56.7

128.2

Rel (local)

8.5

50.7

71.6

52-week high/low

A$5.75

A$2.23

Business description

EML Payments is a payment solutions company specialising in the prepaid stored value market, with mobile, physical and virtual card offerings. It provides solutions for payouts, gifts, incentives, rewards and supplier payments, managing thousands of programmes across 28 countries in Europe, North America and Australia.

Next events

Trading update

May 2021

Analyst

Katherine Thompson

+44 (0)20 3077 5730

EML Payments is a research client of Edison Investment Research Limited

With the planned acquisition of Sentenial Group (SG), EML Payments is entering the open banking market, adding non-card-based payments technology to its portfolio. EML is paying initial consideration of €70m (56% cash, 44% equity) and an earn-out of up to €40m dependent on strong revenue growth of SG’s Nuapay division. The deal is subject to regulatory approval and is expected to close by the end of June.

Year end

Revenue (A$m)

PBT*
(A$m)

NPATA** (A$m)

Dil. EPS*
(c)

DPS
(c)

P/E
(x)

EV/EBITDA
(x)

06/19

97.2

25.6

20.6

7.8

0.0

73.2

70.8

06/20

121.0

21.6

24.0

5.5

0.0

103.4

64.6

06/21e

182.2

34.7

30.8

7.5

0.0

76.0

42.0

06/22e

249.4

50.7

42.6

10.7

0.0

53.6

29.5

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. **Net profit after tax, excluding acquisition-related costs.

Buying into the fast-growing open banking market

The majority of SG’s revenue (67% of CY20 revenue of €7.5m) is currently generated by its Sentenial SaaS platform, which supports direct debit, credit transfers and instant payments and has modest growth prospects. SG’s Nuapay division (33% of CY20 revenue), which specialises in open banking account-to-account payments, has a larger growth opportunity and leverages SG’s technology platform and operational cost base. The maximum earn-out payment is based on Nuapay growing revenues from €2.5m in CY20 to at least €30m in CY23. Over the same period, EML expects SG’s EBITDA margin to grow from 11% to at least 35%. As EML expects to invest in growing the Nuapay business over the next three years, management does not expect the deal to be accretive to NPATA/share until FY24. The maximum consideration payable values SG at c 3.1x CY23e sales and c 8.4x CY23e EBITDA. Incorporating SG into our forecasts from 1 July, our NPATA/share forecast is flat in FY21, down 5.7% in FY22 and up 5.2% in FY23.

Diversifying the offering

EML has been open about its desire to diversify its revenue streams and to add different payment technologies to its product portfolio. The acquisition of SG will bring open banking technologies into the group, which will enable EML to offer both card-based and direct-from-bank-account technologies to its customer base.

Valuation: Deal well received

The stock is up 11% since the deal was announced. On EV/EBITDA multiples, EML trades at a discount to global payment processing companies and at a premium to prepaid card companies, reflecting the scale and profitability of the former, and EML’s better growth prospects compared to the latter. We note that earnings accretion from the acquisition is not likely until FY23 at the earliest. A reverse DCF analysis implies that the market is factoring in double-digit revenue growth for the company after our forecast period, which successful execution of Project Accelerator and growth from the open banking market should support.

Planned acquisition of Sentenial

EML announced it has signed an agreement to acquire 100% of Sentenial Group (SG), an Irish provider of payment services technology to banks, enterprises, SMEs and payment service providers. The deal requires approval from the UK and French regulators and EML expects it to close by the end of June. As management expects to invest to grow the Nuapay side of the business, it does not expect the deal to be accretive to NPATA/share until FY24.

Terms of the deal

EML is paying an initial consideration of €70m and an earn-out of up to €40m. Exhibit 1 shows how this is to be funded.

Exhibit 1: Funding of deal

€m

A$m

Details

Initial consideration

Cash

38.9

60.3

Equity

31.1

48.2

Based on 10-day VWAP prior to date of completion; at A$5 = 9.6m shares

Total

70.0

108.5

Source of cash:

From cash reserves

18.9

29.3

From new credit facility

20.0

31.0

Three-year term. Maximum secured credit facility A$225m including A$100m accordion

Earn-out

Up to

40.0

62.1

If Nuapay generates revs ≥€30m in CY23; in cash or equity at EML’s discretion

Source: EML Payments

EML had a net cash position of A$100.3m at the end of H121, so after paying the initial consideration, the company will still have a significant cash balance.

Background on Sentenial

SG was founded in 2003 as a provider of technology for payment services. The majority of the business currently comes from providing direct debit, credit transfers and instant payments for major European banks via its software-as-a-service (SaaS) platform.

The chart below shows various milestones achieved by the company since it was founded.

Exhibit 2: Sentenial history

Source: EML Payments

In 2014, SG developed an account-to-account (A2A) service called Nuapay. Nuapay became an FCA authorised payment institution the same year. In 2018, Nuapay took advantage of the opening up of the banking market (open banking) under the EU’s PSD21 regulations and became an authorised third-party provider for both payments and data. As part of PSD2, banks have been required to open their payment services to third-party services providers (TPPs), with two types of companies defined:

  PSD2: Second Payment Services Directive – entered into force January 2016; member states required to implement rules as national law by 13 January 2018; certain rules (such as strong customer authentication and secure communication) delayed until the end of 2020.

Payment initiation service providers (PISPs): these companies are able to initiate a payment from a customer’s bank account to a merchant’s account. In effect, this means that customers can use their online banking accounts to pay for online purchases rather than paying with a debit/credit/prepaid card or digital wallet. Companies that are active in this market include Plaid, Klarna, Tink and Yolt.

Account information services providers (AISPs): these companies are able to take advantage of bank APIs to bring together data from one or more bank accounts to provide a global view to customers. Companies that offer this service include fintechs (eg Revolut, Starling Bank, Wise), traditional banks and also accounting software providers such as Xero, FreeAgent and Sage.

Since then, in addition to its UK customer base Nuapay has worked on signing up banking partners in various EU countries including France, Germany and Italy, and is now connected to more than 1,750 banks and financial institutions across Europe. In 2021, Nuapay received a licence from L’Autorité de contrôle prudentiel et de résolution (ACPR) in France, which allows it to operate in the EU post-Brexit.

Financial performance

Exhibit 3: Sentenial’s financials

CY18

CY19

CY20

CY21e

CY22e

CY23e

Gross debit volume (GDV)

€bn

39

43.9

45.9

49.5

55.9

67.5

Sentenial

€bn

38.6

43.3

45.3

47.6

49.9

52.4

Nuapay

€bn

0.4

0.6

0.6

2.0

5.9

15.0

Revenue

€m

7.1

7.2

7.5

11.2

20.4

35.8

Sentenial

€m

4.7

5.0

5.3

5.5

5.8

Nuapay

€m

2.5

2.5

5.9

14.9

30.1

Yield

bp

1.8

1.6

1.6

2.3

3.6

5.3

Sentenial

bp

1.1

1.1

1.1

1.1

1.1

Nuapay

bp

41.7

41.7

30.0

25.0

20.0

Gross profit

€m

6.6

6.5

6.8

9.8

17.2

29.6

Sentenial

€m

4.8

5.0

5.3

5.6

Nuapay

€m

2.0

4.8

11.9

24.0

Gross margin

93.0%

90.3%

90.7%

87.5%

84.3%

82.6%

Sentenial

96.0%

96.0%

96.0%

96.0%

Nuapay

80.0%

80.0%

80.0%

80.0%

Overheads

€m

(6.4)

(6.2)

(6.0)

(9.5)

(13.0)

(16.5)

EBITDA

€m

0.2

0.3

0.8

0.3

4.2

13.1

EBITDA margin

2.8%

4.2%

10.7%

2.6%

20.5%

36.6%

Valuation metrics (x)

EV/sales (initial consideration only)

9.9

9.7

9.3

EV/EBITDA (initial consideration only)

350.0

233.3

87.5

EV/sales (max consideration)

15.5

15.3

14.7

9.8

5.4

3.1

EV/EBITDA (max consideration)

550.0

366.7

137.5

376.7

26.4

8.4

Source: EML Payments, Edison Investment Research. Note: Numbers in italics are Edison estimates.

The table above shows historical performance for SG, splitting out the original Sentenial business and the Nuapay business separately. We have produced forecasts for SG based on management targets to the end of CY23. We understand that this business will be combined with the existing Virtual Account Numbers (VANs) business and renamed Digital Payments.

Revenue from the original Sentenial business is mostly generated from subscription licensing of its SaaS platform. This does not necessarily scale with GDV processed. The revenue yield equates to c 1–2bps and this business generates a gross margin of 95%+. Management expects future revenue growth of 5–10% pa.

Revenue from the Nuapay business, based on transaction fees and technical implementation services, is more closely linked to GDV processed. In CY20 we calculate that the revenue yield was 42bps and management points to a yield of 10–50bp. Nuapay gross margin is more in the region of 80%. EML has stated that it expects to increase overheads for Nuapay by c €3m pa; we also assume a small increase in overheads for the original Sentenial business. Over the next three years, management expects a volume CAGR of at least 150%, to reach a GDV of c €15bn by CY23. For the first 18 months post acquisition, the majority of revenue growth is expected to come from existing signed customers – as they increase the number of merchants they offer the service to, and those merchants start to offer direct-from-bank-account as a payment option, the volumes should ramp up. Longer-term revenue forecasts depend on new customers being signed up.

At the bottom of the table, we have included valuation metrics based on both initial and total consideration. Clearly, the total consideration of €110m will only be payable if Nuapay achieves its €30m revenue target in CY23.

Rationale for the deal

EML has made no secret of its desire to add other payment technologies to its portfolio and to diversify its revenue streams. This deal adds open banking solutions to EML’s offering, which EML should be able to sell to its existing base of digital banking and corporate customers.

The combined entity will process a gross debit volume of c A$90bn, making it one the largest fintech enablers of prepaid and open banking services. The deal will also scale up the group’s European operations and take advantage of EML’s direct Faster Payments connection via the Bank of England.

Management expects to be able to provide broader solutions that combine EML and Nuapay technology, for example in digital wallets, earned-wage access/salary wallets, gaming accounts and merchant payment accounts. In the chart below, EML illustrates how the two businesses will be combined to provide an integrated approach to customers.

Exhibit 4: Combined platform

Source: EML Payments

Changes to forecasts

We have taken the forecasts in Exhibit 3 and adjusted for EML’s 30 June year end. We assume the deal completes at the very end of Q421 and makes no contribution to the income statement until 1 July 2021. The table below shows the changes to our forecasts. We estimate a small accretion in FY23, slightly earlier than the company’s expectation of mid-teens accretion in FY24. We note that the forecasts for SG are based on targets which imply rapid growth of the Nuapay business – the pace of growth could vary from our estimates and the rate at which EML increases overheads to grow the business could also vary. The only change to our FY21 forecasts is the addition of A$5m in acquisition-related costs – this has no impact on NPATA or NPATA/share.

Exhibit 5: Changes to forecasts

FY21e

FY21e

FY22e

FY22e

FY23e

FY23e

Old

New

Change

y-o-y

Old

New

Change

y-o-y

Old

New

Change

y-o-y

Revenues

A$m

182.2

182.2

0.0%

50.6%

226.3

249.4

10.2%

36.9%

255.9

298.9

16.8%

19.8%

Gross profit

A$m

125.4

125.4

0.0%

42.4%

157.0

176.9

12.7%

41.1%

179.6

215.4

19.9%

21.8%

Gross margin

68.8%

68.8%

0.0%

-4.0%

69.4%

70.9%

1.5%

2.1%

70.2%

72.1%

1.9%

1.1%

EBITDA

A$m

50.1

50.1

0.0%

53.9%

70.7

71.2

0.8%

42.3%

87.9

98.0

11.5%

37.6%

EBITDA margin

27.5%

27.5%

0.0%

0.6%

31.2%

28.6%

-8.6%

1.1%

34.4%

32.8%

-4.6%

4.2%

Normalised operating profit

A$m

36.1

36.1

0.0%

61.5%

53.8

53.6

-0.4%

48.5%

68.5

75.5

10.2%

40.8%

Normalised operating margin

19.8%

19.8%

0.0%

1.3%

23.8%

21.5%

-2.3%

1.7%

26.8%

25.3%

-1.5%

3.8%

Reported operating profit

A$m

7.7

2.7

-65.4%

-147.0%

37.3

37.1

-0.6%

1301%

52.0

59.0

13.4%

58.9%

Reported operating margin

4.2%

1.5%

-2.7%

6.1%

16.5%

14.9%

-1.6%

13.4%

20.3%

19.7%

-0.6%

4.9%

Normalised PBT

A$m

34.7

34.7

0.0%

60.5%

52.4

50.7

-3.4%

45.9%

67.1

72.5

8.0%

43.2%

Reported PBT

A$m

-26.1

-31.1

19.1%

373.8%

34.4

32.7

-5.2%

-204.9%

49.6

55.0

10.9%

68.5%

Normalised net income

A$m

27.8

27.8

0.0%

60.5%

42.0

40.5

-3.4%

45.9%

53.7

58.0

8.0%

43.2%

NPATA

A$m

30.8

30.8

0.0%

28.0%

44.1

42.6

-3.3%

38.5%

54.7

59.0

7.9%

38.5%

Reported net income

A$m

-20.9

-24.9

19.1%

325.6%

27.6

26.1

-5.2%

-204.9%

39.7

44.0

10.9%

68.5%

Normalised basic EPS

A$

0.08

0.08

0.0%

35.2%

0.12

0.11

-5.9%

41.6%

0.15

0.16

5.2%

43.2%

Normalised diluted EPS

A$

0.08

0.08

0.0%

36.0%

0.11

0.11

-5.9%

41.7%

0.15

0.15

5.3%

43.2%

Reported basic EPS

A$

-0.06

-0.07

19.1%

258.5%

0.08

0.07

-7.6%

-201.8%

0.11

0.12

8.0%

68.5%

NPATA/share

A$

0.08

0.08

0.0%

8.5%

0.12

0.11

-5.7%

34.5%

0.15

0.16

5.2%

38.5%

Dividend per share

A$

0.00

0.00

N/A

N/A

0.00

0.00

N/A

N/A

0.00

0.00

N/A

N/A

Net debt/(cash)

A$m

(109.1)

(47.0)

-56.9%

-43.0%

(114.0)

(54.4)

-52.3%

15.7%

(129.7)

(75.6)

-41.7%

39.0%

GDV

A$bn

20.6

20.6

0.0%

48.6%

24.2

105.9

337.9%

413.7%

27.2

122.9

351.4%

16.1%

Yield

0.88%

0.88%

0.0%

0.01%

0.94%

0.24%

-0.7%

-0.65%

0.94%

0.24%

-0.7%

0.01%

Source: Edison Investment Research

Valuation

The table below shows how EML is trading in relation to three groups: global payment processors, pre-paid card companies and Australian fintechs. We do not expect the SG acquisition to have a major impact on forecasts until FY23 (ie NY+1). In this year, EML is trading at a discount to global payment processor peers on an EV/EBITDA basis and on a P/E basis, reflecting the scale and profitability of peers. EML trades at a premium to prepaid card peers on all metrics, reflecting its higher growth prospects.

We have performed a discounted cash flow analysis to estimate the growth rates and margin assumptions factored into the current share price after the explicit forecast period. Using a WACC of 8% and a long-term growth rate of 3%, we estimate that the market is pricing in revenue growth of 12% in FY25–30e with an EBITDA margin of 37.3% (unchanged since we last wrote). In our view, the double-digit revenue growth rate is reasonable considering EML’s Project Accelerator strategy and the growth potential in the Open Banking market.

Exhibit 6: Peer valuation multiples

Currency

Market

EV/Sales

EV/EBITDA

P/E

cap (m)

CY

NY

NY+1

CY

NY

NY+1

CY

NY

NY+1

EML Payments

A$

2,070

11.5

8.4

7.0

42.0

29.5

21.4

76.0

53.6

37.5

Payment processors

Adyen

60,612

59.8

43.2

31.3

97.8

69.3

49.7

142.1

100.5

72.0

FIS

US$

91,231

7.8

7.2

6.7

17.5

15.7

14.3

23.1

20.0

17.7

Fiserv

US$

82,073

6.8

6.3

5.9

16.4

14.8

13.2

22.7

19.3

16.5

Global Payments

US$

61,875

9.2

8.4

7.8

19.5

17.4

15.8

26.4

22.8

19.6

PayPal Holdings

US$

299,353

11.5

9.5

7.9

39.2

32.4

26.4

56.0

44.5

35.8

Square

US$

111,435

8.0

6.7

5.6

154.1

97.0

65.7

200.9

130.5

90.1

Worldline

20,534

4.8

4.4

4.2

19.2

16.3

14.5

30.2

25.3

21.9

Average

15.4

12.3

9.9

52.0

37.6

28.5

71.6

51.8

39.1

Prepaid card companies

Appreciate Group

£

69

0.5

0.5

0.4

7.6

5.0

4.1

18.5

11.2

8.7

Edenred

11,264

8.0

7.2

6.5

19.6

17.2

15.3

36.2

30.8

26.8

Euronet Worldwide

US$

7,521

2.8

2.4

2.2

15.8

11.0

10.4

25.4

17.1

15.4

Fleetcor Technologies

US$

23,463

10.1

9.1

8.1

17.8

15.7

13.8

22.5

19.3

16.2

Green Dot Corp

US$

2,515

3.0

2.8

2.7

17.4

14.6

12.6

22.0

17.9

15.1

WEX

US$

9,513

6.5

5.7

5.2

15.5

12.8

11.4

26.1

20.1

16.9

Average

5.2

4.6

4.2

15.6

12.7

11.2

25.1

19.4

16.5

Australian fintechs

Afterpay Ltd

A$

34,301

36.2

22.0

15.9

396.7

141.3

75.8

N/A

297.5

143.5

FlexiGroup Ltd

A$

500

6.1

5.5

4.7

21.1

23.3

19.9

6.4

7.6

6.4

Zip Co Ltd

A$

4,576

16.1

9.9

7.1

N/A

N/A

N/A

N/A

N/A

N/A

Average

19.4

12.5

9.3

208.9

82.3

47.9

6.4

152.6

74.9

Source: Edison Investment Research, Refinitiv (as at 8 April)


Exhibit 7: Financial summary

A$m

2017

2018

2019

2020

2021e

2022e

2023e

30-June

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

58.0

71.0

97.2

121.0

182.2

249.4

298.9

Cost of Sales

(13.7)

(17.7)

(24.2)

(32.9)

(56.8)

(72.5)

(83.5)

Gross Profit

44.2

53.3

73.0

88.1

125.4

176.9

215.4

EBITDA

 

 

14.5

21.0

29.7

32.5

50.1

71.2

98.0

Normalised operating profit

 

 

11.9

18.1

25.6

22.4

36.1

53.6

75.5

Amortisation of acquired intangibles

(8.9)

(7.2)

(7.5)

(10.6)

(18.5)

(14.0)

(14.0)

Exceptionals

0.2

(0.3)

(3.0)

(11.2)

(8.6)

0.0

0.0

Share-based payments

(5.3)

(5.0)

(4.2)

(6.1)

(6.3)

(2.5)

(2.5)

Reported operating profit

(2.1)

5.6

10.9

(5.6)

2.7

37.1

59.0

Net Interest

0.0

(0.1)

(0.0)

(0.7)

(1.4)

(3.0)

(3.0)

Joint ventures & associates (post tax)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Exceptionals

0.0

(0.5)

(1.8)

(0.2)

(32.4)

(1.5)

(1.0)

Profit Before Tax (norm)

 

 

11.9

17.9

25.6

21.6

34.7

50.7

72.5

Profit Before Tax (reported)

 

 

(2.1)

5.0

9.0

(6.6)

(31.1)

32.7

55.0

Reported tax

2.1

(2.8)

(0.6)

0.7

6.2

(6.5)

(11.0)

Profit After Tax (norm)

8.9

14.4

20.5

17.3

27.8

40.5

58.0

Profit After Tax (reported)

0.0

2.2

8.5

(5.9)

(24.9)

26.1

44.0

Minority interests

0.0

0.0

(0.2)

0.0

0.0

0.0

0.0

Discontinued operations

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Net income (normalised)

8.9

14.4

20.3

17.3

27.8

40.5

58.0

Net income (reported)

0.0

2.2

8.3

(5.9)

(24.9)

26.1

44.0

Basic ave. number of shares outstanding (m)

245

246

249

304

361

372

372

EPS - basic normalised (A$)

 

 

0.036

0.058

0.081

0.057

0.077

0.109

0.156

EPS - diluted normalised (A$)

 

 

0.036

0.057

0.078

0.055

0.075

0.107

0.153

EPS - basic reported (A$)

 

 

0.000

0.009

0.033

(0.019)

(0.069)

0.070

0.118

Dividend (A$)

0.00

0.00

0.00

0.00

0.00

0.00

0.00

Revenue growth (%)

148.6

22.5

36.9

24.4

50.6

36.9

19.8

Gross Margin (%)

76.3

75.1

75.1

72.8

68.8

70.9

72.1

EBITDA Margin (%)

25.1

29.6

30.6

26.9

27.5

28.6

32.8

Normalised Operating Margin

20.5

25.4

26.4

18.5

19.8

21.5

25.3

BALANCE SHEET

Fixed Assets

 

 

90.6

108.0

162.9

905.2

1,076.3

1,159.3

1,220.2

Intangible Assets

60.1

65.8

104.6

404.7

554.6

541.8

527.3

Tangible Assets

2.8

3.5

5.4

14.6

12.0

9.6

7.1

Investments & other

27.6

38.7

53.0

485.8

509.6

607.9

685.9

Current Assets

 

 

96.9

131.6

313.8

1,001.1

1,240.7

1,489.0

1,700.7

Stocks

10.3

12.6

18.2

22.3

20.9

23.0

25.3

Debtors

6.3

8.9

14.4

21.7

32.3

43.9

52.5

Cash & cash equivalents

39.9

39.0

33.1

118.4

113.9

121.3

142.5

Other

40.4

71.1

248.2

838.7

1,073.6

1,300.8

1,480.5

Current Liabilities

 

 

(62.8)

(90.5)

(299.0)

(1,326.3)

(1,630.8)

(1,973.7)

(2,220.5)

Creditors

(23.8)

(21.2)

(33.9)

(47.5)

(62.5)

(80.9)

(91.1)

Tax and social security

(0.0)

0.0

(0.8)

(0.2)

(0.2)

(0.2)

(0.2)

Short term borrowings

0.0

0.0

(15.0)

0.0

0.0

0.0

0.0

Other

(39.0)

(69.3)

(249.4)

(1,278.6)

(1,568.1)

(1,892.6)

(2,129.1)

Long Term Liabilities

 

 

(4.2)

(19.3)

(33.5)

(139.0)

(218.4)

(178.1)

(157.4)

Long term borrowings

0.0

0.0

0.0

(35.8)

(66.8)

(66.8)

(66.8)

Other long term liabilities

(4.2)

(19.3)

(33.5)

(103.2)

(151.5)

(111.2)

(90.6)

Net Assets

 

 

120.6

129.8

144.2

441.0

467.8

496.5

543.0

Minority interests

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Shareholders' equity

 

 

120.6

129.8

144.2

441.0

467.8

496.5

543.0

CASH FLOW

Op Cash Flow before WC and tax

13.1

19.7

28.4

31.2

48.2

69.4

96.2

Working capital

4.9

(9.2)

2.0

3.6

6.5

3.8

(1.6)

Exceptional & other

(0.8)

(1.2)

(0.7)

(12.7)

(6.5)

0.0

0.0

Tax

2.1

(2.8)

(0.6)

0.7

6.2

(6.5)

(11.0)

Net operating cash flow

 

 

19.3

6.5

29.2

22.8

54.4

66.7

83.6

Capex

(2.9)

(5.3)

(5.8)

(11.0)

(13.1)

(14.6)

(17.6)

Acquisitions/disposals

0.0

(0.7)

(44.0)

(142.5)

(73.6)

(40.0)

(40.0)

Net interest

0.0

(0.1)

(0.0)

(0.7)

(1.4)

(3.0)

(3.0)

Equity financing

0.2

0.0

0.4

240.8

0.0

0.0

0.0

Dividends

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Other

(3.6)

(0.6)

(0.4)

(7.0)

(1.8)

(1.8)

(1.8)

Net Cash Flow

13.0

(0.2)

(20.6)

102.3

(35.5)

7.4

21.2

Opening net debt/(cash)

 

 

(26.9)

(39.9)

(39.0)

(18.1)

(82.5)

(47.0)

(54.4)

FX

(0.0)

(0.6)

(0.3)

(2.0)

0.0

0.0

0.0

Other non-cash movements

0.0

0.0

0.0

(35.8)

0.0

0.0

0.0

Closing net debt/(cash)

 

 

(39.9)

(39.0)

(18.1)

(82.5)

(47.0)

(54.4)

(75.6)

Source: EML Payments, Edison Investment Research

General disclaimer and copyright

This report has been commissioned by EML Payments and prepared and issued by Edison, in consideration of a fee payable by EML Payments. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

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United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

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United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

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Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by EML Payments and prepared and issued by Edison, in consideration of a fee payable by EML Payments. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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