Net 1 UEPS Technologies, Inc. reports 58.2% revenue decline in FY2020 and 8.7 pp EBITDA Margin growth from -21.1% to -12.4%
09/10/2020 • About Net 1 UEPS Technologies, Inc. (
$UEPS) • By InTwits
Net 1 UEPS Technologies, Inc. reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
- Net 1 UEPS Technologies, Inc. is a company in decline: FY2020 revenue growth was -58.2%, 5 years revenue CAGR was -24.8%
- The company operates at negative EBITDA Margin: -12.4%
- EBITDA Margin is quite volatile: -12.4% in FY2020, -21.1% in FY2019, 15.4% in FY2018, 22.7% in FY2017, 26.2% in FY2016
- Net 1 UEPS Technologies, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.2%.
- CAPEX is quite volatile: $6m in FY2020, $9m in FY2019, $10m in FY2018, $11m in FY2017, $36m in FY2016
- The company has unprofitable business model: ROIC is -9.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Net 1 UEPS Technologies, Inc.'s Revenue dropped on 58.2%. Annual revenue decline showed slowdown in FY20Q4 - revenue dropped on 49.1%. During FY2016-FY2020 Revenue growth topped in FY2017 at 3.3% and was decelerating since that time. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 8.7 pp from -21.1% to -12.4% in FY2020. EBITDA Margin declined at -12.1 pp per annum in the last 5 years.
Gross Margin dropped on 12.5 pp from 40.3% to 27.8% in FY2020. Gross Margin stuck to a declining trend at -5.8 pp per annum in the last 5 years. SG&A as a % of Revenue decreased on 6.1 pp from 56.0% to 49.8% in FY2020. SG&A as a % of Revenue followed a growing trend at 7.8 pp per annum in FY2016-FY2020.
Net Income margin surged on 33.3 pp from -85.2% to -51.9% in FY2020. During the last 5 years Net Income margin bottomed in FY2019 at -85.2%.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 3.9% in FY2020. Net 1 UEPS Technologies, Inc.'s CAPEX/Revenue increased on 2.1 pp from 1.8% in FY2017 to 3.9% in FY2020. It's average CAPEX/Revenue for the last three years was 2.7%. During the last 5 years CAPEX as a % of Revenue bottomed in FY2018 at 1.6% and was growing since that time.
Return on investment
The company operates at negative ROIC (-9.1%) and ROE (-19.6%). ROIC increased on 6.4 pp from -15.4% to -9.1% in FY2020. ROE jumped on 32.7 pp from -52.3% to -19.6% in FY2020. ROIC followed a declining trend at -8.5 pp per annum in FY2016-FY2020. During FY2016-FY2020 ROE bottomed in FY2019 at -52.3%.
Leverage (Debt)
Company's Net Debt / EBITDA is and Debt / EBITDA is . Debt dropped on 76.0% while cash surged on 373%.
Net 1 UEPS Technologies, Inc. has no short term refinancing risk: cash is higher than short term debt (1,275.5%).
Financial and operational results
FY ended 06/30/2020
Net 1 UEPS Technologies, Inc. ($UEPS) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 590.7 | 610.1 | 612.9 | 361.0 | 151.0 | -58.2% |
| Gross Profit | 300.6 | 317.7 | 308.4 | 145.6 | 42.0 | -71.2% |
| SG&A | 143.6 | 179.3 | 193.0 | 202.1 | 75.3 | -62.8% |
| EBITDA | 154.8 | 138.4 | 94.4 | -76.2 | -18.8 | |
| Net Income | 82.5 | 73.0 | 39.2 | -307.6 | -78.4 | |
Balance Sheet
|
|---|
| Cash | 223.6 | 258.5 | 90.1 | 46.1 | 217.7 | 372.5% |
| Short Term Debt | 8.7 | 8.7 | 44.7 | 85.0 | 17.1 | -79.9% |
| Long Term Debt | 43.1 | 7.5 | 5.5 | 0.0 | 3.3 | |
Cash flow
|
|---|
| Capex | 35.8 | 11.2 | 9.6 | 9.4 | 5.9 | -36.9% |
Ratios
|
|---|
| Revenue growth | -5.6% | 3.3% | 0.5% | -41.1% | -58.2% | |
| EBITDA growth | -8.5% | -10.6% | -31.8% | -180.6% | -75.4% | |
|
|---|
| Gross Margin | 50.9% | 52.1% | 50.3% | 40.3% | 27.8% | -12.5% |
| EBITDA Margin | 26.2% | 22.7% | 15.4% | -21.1% | -12.4% | 8.7% |
| SG&A, % of revenue | 24.3% | 29.4% | 31.5% | 56.0% | 49.8% | -6.1% |
| Net Income Margin | 14.0% | 12.0% | 6.4% | -85.2% | -51.9% | 33.3% |
| CAPEX, % of revenue | 6.1% | 1.8% | 1.6% | 2.6% | 3.9% | 1.3% |
|
|---|
| ROIC | 18.7% | 13.8% | 7.0% | -15.4% | -9.1% | 6.4% |
| ROE | 15.1% | 11.3% | 5.4% | -52.3% | -19.6% | 32.7% |
| Net Debt/EBITDA | -1.1x | -1.7x | -0.4x | | |
Net 1 UEPS Technologies, Inc. ($UEPS) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 81 | 74 | 37 | 26 | | -35.9% | -23.6% | -57.5% | -49.1% |
| EBITDA | 3 | -1 | -5 | -20 | | -75.6% | - | - | - |
| Net Income | -4 | -0 | -35 | -39 | | - | - | - | - |
Balance Sheet
|
|---|
| Cash | 42 | 51 | 261 | 218 | | -57.6% | -27.5% | 111.9% | 373.2% |
| Short Term Debt | 88 | 92 | 57 | 17 | | -26.2% | 4.5% | -36.6% | -79.9% |
| Long Term Debt | 1 | 4 | 4 | 3 | | -88.0% | -55.0% | - | - |
Ratios
|
|---|
| Gross Margin | 42.1% | 41.7% | 29.4% | 13.8% | | -0.9% | -5.3% | -12.6% | -5.2% |
| EBITDA Margin | 3.6% | -1.9% | -13.7% | -78.3% | | -5.9% | 32.2% | 0.3% | 6.0% |
| Net Income Margin | -5.4% | -0.3% | -95.5% | -149.7% | | -1.5% | 65.7% | -31.6% | 211.1% |
Peers in Data Processing & Outsourced Services
Below we provide Net 1 UEPS Technologies, Inc. benchmarking against other companies in Data Processing & Outsourced Services industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Square, Inc. ($SQ) | - | 29.6% | 49.0% | 42.9% | 101.5% |
| Global Payments Inc. ($GPN) | - | 37.2% | -15.3% | 45.9% | 51.1% |
| Fiserv, Inc. ($FISV) | - | 3.5% | 2.2% | 74.9% | 45.8% |
| NIC Inc. ($EGOV) | - | 5.8% | 2.5% | 2.7% | 30.0% |
| StoneCo Ltd ($STNE) | - | 74.3% | 106.0% | 63.1% | 28.9% |
| |
|---|
| Median (39 companies) | 6.7% | 11.8% | 7.5% | 11.5% | -2.7% |
|---|
| Net 1 UEPS Technologies, Inc. ($UEPS) | - | 3.3% | 0.5% | -41.1% | -58.2% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Verra Mobility Corp ($VRRM) | - | 97.4% | 97.5% | 95.7% | 91.5% |
| EVO Payments, Inc. ($EVOP) | - | - | - | 80.2% | 80.8% |
| StoneCo Ltd ($STNE) | 69.7% | 70.8% | 79.5% | 83.4% | 76.8% |
| WEX Inc. ($WEX) | 54.7% | 58.8% | 63.3% | 61.7% | 56.8% |
| Sabre Corporation ($SABR) | 32.2% | 30.1% | 27.8% | 56.6% | 56.6% |
| |
|---|
| Median (31 companies) | 39.2% | 38.9% | 40.9% | 41.7% | 36.7% |
|---|
| Net 1 UEPS Technologies, Inc. ($UEPS) | 50.9% | 52.1% | 50.3% | 40.3% | 27.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Visa Inc. ($V) | 55.6% | 69.2% | 65.8% | 68.1% | 68.5% |
| Mastercard Incorporated ($MA) | 56.9% | 56.5% | 51.8% | 60.9% | 56.6% |
| FleetCor Technologies, Inc. ($FLT) | 52.0% | 50.8% | 55.9% | 57.6% | 52.2% |
| StoneCo Ltd ($STNE) | 31.4% | 26.0% | 53.0% | 62.4% | 52.1% |
| Black Knight, Inc. ($BKI) | 43.0% | 44.6% | 43.3% | 46.0% | 44.9% |
| |
|---|
| Median (38 companies) | 21.2% | 20.6% | 19.4% | 22.2% | 19.1% |
|---|
| Net 1 UEPS Technologies, Inc. ($UEPS) | 26.2% | 22.7% | 15.4% | -21.1% | -12.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| PagSeguro Digital Ltd. ($PAGS) | 6.4% | 4.3% | 1.4% | 5.8% | 22.3% |
| StoneCo Ltd ($STNE) | 7.2% | 18.4% | 8.9% | 12.9% | 11.2% |
| Cardtronics plc ($CATM) | 9.9% | 9.6% | 8.0% | 9.3% | 8.3% |
| Verra Mobility Corp ($VRRM) | - | 11.5% | 7.2% | 6.6% | 6.2% |
| Fiserv, Inc. ($FISV) | 5.3% | 5.0% | 6.2% | 7.1% | 6.1% |
| |
|---|
| Median (38 companies) | 3.2% | 2.9% | 3.2% | 3.3% | 3.0% |
|---|
| Net 1 UEPS Technologies, Inc. ($UEPS) | 6.1% | 1.8% | 1.6% | 2.6% | 3.9% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Mastercard Incorporated ($MA) | 57.5% | 60.6% | 64.7% | 72.7% | 47.6% |
| International Money Express, Inc. ($IMXI) | -1.3% | -1.4% | 12.1% | 36.0% | 31.4% |
| NIC Inc. ($EGOV) | 63.1% | 52.1% | 39.3% | 26.5% | 30.8% |
| Visa Inc. ($V) | 18.1% | 21.9% | 23.0% | 27.2% | 23.2% |
| Western Union Company (The) ($WU) | 10.7% | 11.9% | 27.8% | 21.5% | 22.1% |
| |
|---|
| Median (39 companies) | 11.1% | 10.6% | 12.1% | 8.3% | 6.4% |
|---|
| Net 1 UEPS Technologies, Inc. ($UEPS) | 18.7% | 13.8% | 7.0% | -15.4% | -9.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| WEX Inc. ($WEX) | 6.7x | 4.4x | 3.1x | 3.4x | 12.1x |
| Exela Technologies Inc ($XELAU) | 8.1x | - | 9.7x | - | 10.7x |
| Alliance Data Systems Corporation ($ADS) | 10.7x | 10.1x | 9.0x | 11.7x | 9.2x |
| Verra Mobility Corp ($VRRM) | - | 10.7x | 6.9x | 3.5x | 4.7x |
| GreenSky, Inc. ($GSKY) | -1.5x | -1.5x | 0.5x | 1.5x | 4.6x |
| |
|---|
| Median (36 companies) | 1.6x | 2.3x | 2.2x | 2.2x | 2.0x |
|---|
