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  • Group Gross Debit Volume (‘GDV’) of $19.7 billion, up 42% on FY20;
  • Group Revenue of $194.2 million, up 60% on FY20 and above the guidance range of $180-$190 million;
  • Group underlying EBITDA[1] of $53.5 million, up 65% on FY20 and towards the top end of the guidance range of $50-54 million;
  • Group underlying NPATA[2] of $32.4 million, up 54% over PCP; and
  • Underlying operating cash inflows of $46.7 million, representing 87% of underlying EBITDA



EML Payments Limited (ASX: EML) is pleased to release its 2021 Annual Report.

Highlights for the twelve months ended 30 June 2021 include:


Record Underlying Group EBITDA of $53.5 million, up 65% on FY20

The Group achieved very strong EBITDA growth on an underlying basis driven by a 42% increase in Gross Debit Volume (“GDV”). Underlying EBITDA came in at a record $53.5 million – up 65% on the Prior Comparative Period (“PCP”). Statutory  EBITDA rose 30% to $42.2 million despite incurring $11.4 million of one-off costs associated with the Central Bank of Ireland (‘CBI’) matter and headwinds in our global Gift & Incentive segment due to the ongoing impacts of COVID-19 related shopping mall closures in Europe, Canada and North America.

Excluding the financial impact of the CBI matter, underlying EBITDA was at the top of our previous guidance range of $50-54 million.


Gross Debit Volume of $19.7 billion, up 42% on FY20

The Group has a strong track record of growing GDV over the past 10 years. Since FY12, we have grown GDV from $100.9 million to a record $19.7 billion in FY21, representing 10-year CAGR of 80%. EML has completed its transition into a majority GPR business with 50% of GDV now deriving from this segment and all three segments, GPR, G&I and VANS, continuing to launch new programs in the financial year as demand for our innovative payment solutions continued.

The General Purpose Reloadable (GPR) segment grew GDV to $9.8 billion, up 134% on PCP, driven by volumes in segments including digital banking, fintech, government, salary packaging and gaming programs.

The Gift & Incentive (G&I) segment continued to experience the impacts of COVID-19 lockdowns, reducing foot traffic through malls and reducing GDV in this segment. Despite these conditions, G&I has generated $1.1 billion in GDV. GDV generated from Malls represents 56% of this volume, with the remaining 44% generated from Incentive programs.

EML provides customers with a competitive multi-payment Virtual Account Numbers (VANS) offer, and this segment continued to deliver GDV growth of 4%, contributing to total GDV of $8.8 billion in FY21, up from $8.5 billion in FY20 at a yield of 12 bps converting to revenue of $10.3 million (FY20: $10.7 million, 13 bps yield).

During FY21, we signed a Share Purchase Agreement to acquire Sentenial Limited, which will broaden our product offering into Open Banking and Account to Account payments.


Revenue of $194.2 million, up 60% on FY20

Revenues grew strongly, up $72.5 million to $194.2 million. PFS contributed Revenue of $78.3 million (up $62.7m) with a full, 12-month contribution relative to 3 months included in the FY20 year. Organic revenue growth from other GPR programs grew by 34%, driven by growth in salary packaging and gaming programs. Globally, the GPR segment was resilient to numerous challenges, including COVID-19, Brexit and impacts from the CBI matter late in the financial year.

The Group derived 58% of revenues from the GPR segment, continuing the transition to generate the majority of our revenues from GPR programs, and we ended the year with approximately 4 million active cards on our platform.

Revenue in the Gift and Incentive (“G&I”) segment was $70.2 million, up marginally on the PCP of $68.2 million, despite mall closures in most markets in which we operate in throughout the year. In May 2021, we saw malls start to re-open in the United Kingdom and Germany, followed by Canada in June and July. The closure of most malls during the peak trading week prior to Christmas impacted our results through reduced GDV.

The G&I segment proved relatively resilient despite these trading conditions. We benefited from an $11.1m increase in breakage rates over historical averages, as malls were closed and consumer footfall was lower, which impacted gift card usage, and that helped offset the revenue that we would ordinarily have generated from higher unit sales. The increased yield in the G&I segment in FY21 to 635 basis points reflects this benefit, but in FY20, our yield was 580 basis points, with mall programs converting at a higher yield (circa 6-8%) and incentive gift card programs converting at a lower yield (circa 2-4%).

Group revenue yield increased to 99 bps during FY21.


Gross Profit Margins of 67%, down from 73% in FY20 due to reweighting of segment mix to GPR

Gross Profit Margins were down to 67% (FY20: 73%) due to a segment mix shift away from the G&I segment and lower margins in PFS, which outsources its processing costs and incurs costs for this. We have now launched several new PFS programs on our new modern proprietary processor (Trace), including the UK Home Office Aspen card program and the Jersey stimulus program, and it will be used for our recent Northern Ireland stimulus program win. Trace is currently processing less than 5% of PFS GDV, and we expect material synergies in FY23 and FY24 following a ramp of volume on this new processor.

We also received the necessary approvals for a direct connection to the Bank of England Faster Payments Network, which will further improve PFS margins, with the first payments scheduled to occur in September and a pro-rata saving in FY22.


Underlying Operating Cash Flow of $46.7 million and Cash on hand of $141.2 million, up $22.8 million on FY20

Underlying operating cash flows totalled $46.7 million or an EBITDA conversation rate of 87%, in line with guidance.

The Group has a strong balance sheet which supports our growth ambitions and provides us with operational resilience to deal with operational and global economic uncertainties.

The Group expects to use some of its $141.2 million in cash reserves to complete the acquisition of Sentenial Limited in FY22, alongside a drawdown from the Group debt facility.


New Growth & New Verticals

As a result of our Accelerator strategy, we continue to see strong growth in new business, signing 121 more clients in FY21, with nearly 70% of these coming from our new growth verticals in GPR programs, which we project to generate approximately $2.7 billion at maturity, typically in years 3-4 post-launch. We believe the growing demand for embedded, innovative and highly configurable payment solutions will drive further growth for the next 5 – 10 years. We implemented 144 new programs in FY21, and given the timeframes between contract signing and launch, we enter FY22 with a strong pipeline of programs to be implemented.

The growth in digitisation and e-commerce is driving a greater demand for globalisation across many verticals. Last year alone, we signed 23 multi-regional deals, including Quid, Laybuy, Humm and Coinjar, and we have a growing demand in our pipeline. This supports our strategy to invest in global technology architecture and universal product design. These are key pillars of Project Accelerator.

As we enter FY22, our pipeline has more than 300 prospects which correlates to GDV at maturity, typically in years 3-4, of $10.5 billion. Given our historical “win rate” of 40%, if we continue to close at the rate we have in the past, or improve that close rate, the combination of existing programs in market continuing to scale, new programs awaiting implementation, and opportunities in our pipeline should continue to support strong GDV growth.


Transformative Strategy for Growth: Project Accelerator

Last year, we announced our three-year strategy to accelerate our growth by expanding into new verticals and investing to remain at the forefront of payment innovations globally. We have made a strong start in the first 12 months.

Notable achievements include deploying our modern state of the art processor in Europe and successfully launching new programs to this platform; building our developer portal – DevHub – which will launch in Q1FY22, enhanced functionality of our website to improve accessibility for our clients which will launch in Q1 FY22, completing the foundational phase of our global migration to cloud-first technology and integrating with Visa, which gives our clients a choice between Mastercard or Visa.

We established FINLAB, a minority investment arm, to expand our product and distribution capabilities through best-in-class partnerships. In FY21, we invested in two partnerships:

  • Interchecks (USA), a fully white labelled and customisable platform of non-card payment options. We are on track with this investment (invested US$2 million) and have now integrated with Interchecks and launched our first program in FY21; and
  • Hydrogen (USA), a banking and payments platform that embeds finance solutions, which expand our distribution into new fintechs and SMBs through no/low-code options. We invested US$5 million in Hydrogen, which went live in July 2021, and the team are actively working through first opportunities in the sales pipeline.

The Group used our cash reserves to fund the combined $9.8 million for these investments, and despite the relatively short period of time we have been an investor, both companies have performed well post our investment round. The valuation of our investment in Interchecks has increased following a valuation analysis, and there has been no change to the valuation of our investment in Hydrogen.


Expansion into Open Banking – Update on Sentenial Group Acquisition

EML entered into a binding agreement in April 2021 to acquire 100% of Sentenial Group for an enterprise value of €70.0 million (A$110.9 million), plus an earn-out component of up to €40.0 million (A$63.3 million). Sentenial Group, through its regulated subsidiary Nuapay, operates in the fast-growing European Open Banking sector and is expected to be earnings accretive in FY24, with EML intending to reinvest Group profits into Sentenial growth opportunities in FY22 and FY23, in addition to investing approximately $2.5m incrementally into sales and marketing in FY22. The earn-out is dependent on generating an incremental €27 million in annual revenue in calendar year 2023.

We received regulatory approval from the United Kingdom’s Financial Conduct Authority on 18 July 2021 and expect to complete the acquisition in early September pending approval from French regulator, ACPR. Should approval from the ACPR be received, Sentenial would be consolidated into Group financials from 1 October 2021.


Change for Good – a sustainability mission

 In FY20, we launched an environmental initiative as part of our EML Change for Good program to remove 25 million pieces of plastic from our business to help us protect the global communities where we operate. In FY21, EML is proud to have converted 20% of our plastic card orders to digital and other eco-friendly options, which equates to 2.5 million plastic cards.


Regulatory Update on CBI

EML has been working constructively with the Central Bank of Ireland (CBI) in relation to regulatory correspondence received in May 2021 about our PFS Card Services Ireland Limited (“PCSIL”) business. The CBI has investigated various aspects of PCSIL business from a governance, resourcing, reporting, risk methodologies, controls and risk frameworks, capital adequacy, safeguarding and transaction monitoring perspective.

EML has responded in significant detail to the CBI on all matters and has provided the CBI with a detailed remediation plan, and is actively engaged with the CBI in the implementation of this plan. We have engaged specialist advice in relation to the remediation plan, and our intention is to complete a substantive part of the remediation by the end of calendar year 2021, with remaining elements to be completed by the end of March 2022.

We have incurred costs and provisions of $11.4 million In FY21, relating to remediation, advisory and other expenses relating to this matter.


Earnings Guidance  

The Group has traditionally provided earnings guidance in November at our Annual General Meeting, but we have elected to provide a guidance range for the financial year 2022 today, and we will update that as the year progresses. Our guidance range is:

  • Gross Debit Volume: $93-100 billion

(Prepaid GDV $24-26 billion, up from $19.8 billion, with Sentenial generating $69-74 billion)

  • Revenue: $220-255 million (up from $194.2 million)
  • Underlying EBITDA: $58-65 million (up from $53.5 million)
  • Operating Cash Flow: 80-90% of EBITDA (87% in FY21)
  • Re



About EML Payments Limited

EML provides an innovative payment solutions platform, helping businesses all over the world create awesome customer experiences. Wherever money is in motion, our agile technology can power the payment process, so money can be moved quickly, conveniently and securely. We offer market-leading programme management and highly skilled payments expertise to create customisable feature-rich solutions for businesses, brands and their customers.

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

This announcement has been authorised for release by the Board of Directors.

  1. Earnings Before Interest, Tax, Depreciation & Amortisation (‘EBITDA’) is used as an appropriate measure of assessing performance of the Group. EBITDA includes R&D tax offset and excludes share-based payments, acquisition costs and foreign exchange gains or losses and is reconciled to statutory profit and loss within the FY2021 Annual Report. Underlying EBITDA excludes non-recurring costs associated with the Central Bank of Ireland matter.
  2. Net Profit after tax with adjustments for all acquisition-related costs (‘NPATA’) is used as an appropriate measure of assessing performance of the Group. NPATA includes statutory net profit after tax, with adjustments for all acquisition-related cost, including; Amortisation of acquired software and intangibles, fair value movements and finance costs on contingent consideration and is reconciled to statutory profit and loss within the FY2021 Annual Report. Underlying NPATA excludes non-recurring costs associated with the Central Bank of Ireland matter.


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