Hello, everyone and welcome to the Lesaka Technologies Webcast and Conference call for the Fourth Quarter of Fiscal 2024. As a reminder, the webcast is being recorded and the presentation can be accessed through the webcast link, as well as dialing into the Zoom conference call dial-in numbers provided. Management will address any questions you may have at the end of the presentation. For those joining us via the webcast, you can ask your questions live by raising your hand in Zoom. For those joining via the Zoom teleconference line, you cannot ask a question live. The webcast link, Zoom conference call dial-in numbers, as well as our press release and supplementary investor presentation are available on our investor relations website, ir.lesakatech.com. Additionally, Lesaka filed its Form 10-K after the U.S. market closed yesterday, which is also available on our investor relations website. As a reminder, during this call, we will be making forward-looking statements, and I ask you to look at the cautionary language contained in our Form 10-K regarding the risks and uncertainties associated with forward-looking statements. Also, as a domestic filer in the United States, we report results in US dollars under US GAAP. However, it is important to note that our operational currency is South African Rand and as such, we analyze our performance in South African Rand. In this presentation, we will discuss our results in South African Rand, which is non-GAAP. This assists investors' understanding of our underlying trends in our business. As you know, the company's results can be significantly affected by the currency fluctuations between the U.S. dollar and the South African Rand. Taking a quick look at today's agenda, Ali Mazanderani, Chairman of Lesaka, will give a quick overview of the year and quarter. Steve Heilbron, CEO of Merchant Division and Head of Corporate Development will provide an update on the Merchant Division, followed by Lincoln Mali, CEO of Lesaka Southern Africa, who will then take us through the consumer division's performance. Naeem Kola, Group CFO, will present a detailed overview of our financial performance for the three months and year ended June 30th, 2024. Thereafter, Ali will turn and talk about Lesaka's outlook, which includes fiscal 2025 guidance. With all that said, I'd now like to turn the call over to Ali.

Good morning, and good afternoon. We're reporting another successful year for Lesaka. Group adjusted EBITDA increased 55% to ZAR691 million, in line with our guidance for the year. At an operating income level, we have managed to turn around a ZAR275 million loss in FY 2023 to a profit of ZAR67 million this year. Fundamental earnings per share turned positive to ZAR1.06 , improving by ZAR3.72 per share. Our net debt to group adjusted EBITDA ratio improved to 2.5 times from 4.5 times a year ago. The first chapter of the Lesaka story has been written. For me, the story began four years ago when I presented the transformation strategy for the business at the Q4 2020 earnings call. It was given shape in April 2022 with the joining of the Connect Group. The past four years have been about setting the foundations, building a team, and forging a business out of a collection of assets. The execution has not been perfect. And without doubt, there are many things we could have done better, things we could have done faster and more efficiently. This is part of the maturity curve we are on, and we have to hold ourselves to the highest standard. That said, we should recognize that while in a previous incarnation, NetOne may have listed almost 20 years ago, Lesaka has many of the characteristics, challenges and opportunities of a scaling startup. There should be an expectation that we still have much to learn with the good news that we are learning fast. The company beats with enthusiasm and optimism. It believes it will define a fantastic future, both for its customers and for itself. Reflecting on the past four years, all involved should be pleased and proud to be associated with what has been achieved to date. FY 2024 affirms opposition as the leading independent fintech in southern Africa in terms of both revenue and EBITDA, an impressive achievement. Steven, Lincoln and Naeem will now go into more detail on the underlying financial and operational performance of the business over the last year. After that, I will lay out how we will organize ourselves going forward to take advantage of the enormous opportunity ahead of us and provide financial guidance for FY 2025. Over to you, Steve.

Thank you, Ali. We've had a busy year and quarter in the merchant division. Whilst competing in this dynamic fast-paced market, we have executed two acquisitions during the year. Touchsides efficiently joined Lesaka in May 2024 and has been integrated into our micro merchant pillar. This is a very exciting platform for us. There's limited Kazang Touchsides customer overlap. It brings day one 6,400 new sites and further growth opportunities for our Kazang business. Through this acquisition, we have entered a vibrant vertical in the informal sector, being the licensed tavern market in which we will now deepen our penetration. Further to this, the data monetization opportunity, its technology and expertise that this investment brings enhances our offering to our merchants and their suppliers. The data and insights gathered from our deployed terminals carry significant value and potential to be monetized through relationships with a range of clients including FMCG companies, retailers, wholesalers, route to market suppliers and financiers. We have received shareholder and competition commission approval for the Adumo acquisition. We are completing the remaining procedural CPs and anticipate closing at the beginning of October 2024. This is a transformative acquisition which substantially broadens the scale and opportunity in our merchant offering. Adumo Payments offers payment processing, integrated payments and reconciliation solutions to SME merchants in South Africa, Namibia and Botswana. The well-known hospitality platform [GARP] (ph) allows us to enter a new market vertical being the hospitality sector. GARP is the leading provider of integrated point of sale software and hardware to the segment in southern Africa, servicing 9,000 customers in 24 countries with on-the-ground operations in South Africa, Botswana, and Kenya. These acquisitions have bolstered our existing SME business penetration through Connect and Kazang. We are now a leading provider in both the SME merchant and micro…

Thank you, Steve. Firstly, I'd like to thank our consumer team for delivering an excellent set of results for the year, characterized by four consecutive quarters of improved revenues and profitability. The consumer business today is unrecognizable compared to three years ago when the strategy was set and the turnaround commenced. During this period, we had to: one, fundamentally change from a grant and cash dispensing business to a customer and sales focused business; two, design and build an entirely new distribution model from scratch with relevant and convenient channels; three, rethink our entire product value proposition to line up with the needs of our customers and reposition the EasyPay Everywhere brand to one that resonates with our customers; four, train all of our staff across the country who had never sold before about how to attract and retain customers. And lastly, rebuild relationships with multiple stakeholders, including community and traditional leaders, [SASA] (ph) officials and regulators. The turnaround strategy we set out almost three years ago has been executed and is demonstrated in our results. I could not be more proud of what our team has achieved. We operate in a large market of approximately 26 million consumers in the lower income segments. Within that customer segment, there are 12 million grant beneficiaries with child support and old age grants making up most of the base. As the only financial services provider focused exclusively on grant recipients, we dedicate 100% of our resources to understanding the grant beneficiary base. This has allowed us to design products and service channels exclusive to their needs, and this is paying dividends. We estimate our share of this market to be approximately 11%, leaving a significant growth opportunity ahead of us as we enhance our products, distribution, and service. We have dedicated significant…

Thank you, Lincoln. The 2024 financial year has been another year of progress for Lesaka, delivering on what was committed in terms of group adjusted EBITDA, guidance, balance sheet strength, and M&A activity. At the same time, we have continued to reinforce our group corporate and governance structures, making numerous key appointments to our group and divisional leadership teams. Black Economic Empowerment is a key strategic priority for us, and we set out to achieve a Level 4 rating in fiscal 2024, which was achieved in Q2 2024. Our revenue grew 11% for the year, but was negatively impacted by the change in sales mix of airtime revenue, recognized as principal versus agent in our merchant VAS business. This does not impact our profitability. Our EBITDA grew 55% to ZAR691 million for the year, achieving midpoint of guidance range with our operating income turning positive for the first time in five years and improving by ZAR343 million to ZAR67 million. Our cash flows, debt ratio and balance sheet continue to improve. Cash provided by operating activities in FY 2024 improved to ZAR538 million compared to ZAR7.4 million a year ago and an outflow of ZAR565 million two years ago. I will go into more detail shortly. As a reminder, Lesaka is a domestic filer in the United States. We report results in the US dollars under US GAAP. However, our operational currency is South African Rand, and as such, we analyze our performance in South African rand. We have continued to deliver consistent growth in revenue, growing at 11% on an annual basis, from ZAR9.5 billion to ZAR10.6 billion, which was marginally lower than our guidance range. Year-on-year, merchant revenue grew 12% and consumer revenue grew 15%. As discussed in our previous results presentation, we saw an increased percentage of…

Thank you Naeem. The Adumo acquisition which is expected to close in October 2024, will enhance our platform, adding customers and products as well as meaningful scale. The completion of this transaction marks the beginning of a new chapter in the Lesaka story. As we alluded to on the previous earnings presentation, we will use the transaction as a catalyst to approach the market with a more customer-centric operating model. From a financial reporting standpoint, we will continue to maintain the consumer and merchant split. However, starting next quarter, we will present our KPIs and performance with a more granular breakdown. Our consumer segment will remain substantially the same, however the perimeter will be expanded to include the Adumo Payouts business. This business provides cash incentives to employees of companies in a store of value, typically a scheme branded card, in a similar way to a grant payout except the payment originates from a corporate rather than SASA. This will enlarge our addressable market and provides us with a meaningful beachhead into the broader consumer market. While there is significant room to grow our existing grant recipient revenue, both through increasing our market share and increasing our average revenue per user, we will build out on our consumer proposition to serve additional use cases and address a much bigger total addressable market. We expect that over time we will serve new segments of underserved consumers organically and potentially through acquisitions. We have demonstrated our ability in the consumer space to not just win market share against traditional incumbents, but to do so profitably and sustainably. With the incorporation of Adumo, Lesaka will serve approximately 1.7 million customers. We think this is just the beginning and we have earned the right to raise our sites. In our merchant segment, the Adumo…

Thank you, Ali. We're now going to open up the Q&A session. [Operator Instructions] The first question is coming from Rajiv Sharma of B. Riley.

Hi. You have alluded to further bolt-on and transformative M&A. Can you elaborate on the group's M&A strategy and how you're thinking about the funding of these opportunities and any potential dilution? Hello?

Raj, we're just working on an audio mic issue. Stand by.

Raj, would you mind repeating that question?

Yes. Congratulations on solid results and guidance. You've alluded to further bolt-on transformative M&A. Can you elaborate on the group's M&A strategy and how you're thinking about the funding of these opportunities?

So from a funding perspective, if I heard the question correctly, it was, how do we intend to actually fund these transactions? So first of all, we're very cognizant of the debt ratios that we've put forward and we remain incredibly disciplined in that respect. So the group, we've talked about maintaining our debt ratios in the region of 2 times in terms of debt to EBITDA. Everything that we do is accretive. And separate to that, we have a very supportive shareholder base. So, I think funding is rather not really going to be an issue in terms of the targeted transactions. You saw we recently did the Adumo transaction, where we're going to be putting 17.3 million shares into the market and we funded that transaction with ZAR230 odd million of cash. So again, we've got a number of very exciting opportunities. If you look just over the last period, if you just look over the last period, we've actually brought the Connect transaction into the group and integrated successfully. In the [indiscernible] review, we brought Touchsides in, and separate to that, we are very excited about the Adumo transaction, which will now close on the 1st of October.

Great, thank you. We’ll now take our second question, which is submitted by Frank Geng from Briarwood Chase Management. You indicated that you'll be updating your medium-term financial objectives in Q2 of 2025. Can you provide some color on what metrics will be covered and if it's fair to expect that these medium-term financial objectives will be higher more ambitious than the medium-term objectives provided a year ago.

Can you guys hear me okay?

Yes.

Okay. Firstly, just to give a bit of colour, the Adumo transaction is expected to complete in October, so we think that it is appropriate to update the medium term subsequent to that, which is what we outlined. We've already stated that we will be providing GP guidance from Q1, so you should also expect that in that medium term update, we will also be providing GP. I think rather than commenting on the specificity of what that will be ahead of time, I think it is worth noting that the like-for-like growth that we are putting in our FY 2025 guidance at the midpoint of the range, excluding the Adumo transaction, so the underlying growth of the Lesaka business, adjusting also for the way that interest is expected to operate in the consumer business going forward is 30% year-on-year, which is more than the medium term guidance that we had previously provided.

Great, thank you. We have a second question from Frank Geng at Briarwood. The full year 2024 merchant division results included quite a few moving parts. Is it fair to conclude that the [indiscernible] offering in the informal market and the Connect in the context of the persistent challenging operating environment for these merchants delivered strong growth? Please comment on the outlook for this division going forward on a normalized basis.

So let me take that question. I mean, to start with, as we presented, the normalized growth rate in the merchant division is 15% for the year ended FY 2024. Let me also remind -- if I can also remind you that that is of a significant growth in the prior year. Also if you have a look at the year under review you will see that our VAS throughput increased by 43% for the year ended FY 2024 and our card throughput was up by 30%. So we had relatively muted growth in cash and credit, but those strong growth rates supported the underlying 15% organic and this is -- as we look into FY 2025 from an organic perspective we are very comfortable with that as a sustainable growth rate. During the year as well, we've just taken the Touchsides business in and as Ali mentioned from 1 October we will be closing the Adumo transaction. So at an organic growth rate at 15% both historic and going forward there's a strong comfort and momentum.

Great, thank you Steve. Our next question is a live one from Theo O’Neill with Litchfield Hills Research. Theo, we're going to unmute your line and please go ahead. Theo O’Neill: Thanks very much. I've got two questions. My first question -- first congratulations to the consumer segment which demonstrated some solid growth here. And so, thinking about the future, how should we think about the future growth which seems finite if you're just servicing the grant -- servicing grant recipients.

We can't hear. Yes, we can't hear what the question is. Should I check the...

Can you hear me?

Send the question, because we can't hear the question.

Theo, we hear you. I'm just not sure it's broadcasted where they're sitting.

Thank you. Thank you for the question. If you think about our current market share at 11%, we have about 1.3 million active permanent grant recipients in about a 12 million base of grant recipients. The post office has got about 28% market share of that and they are shedding customers in that space. We think that there's still a lot of room to grow in that space. Secondly if you think about our cross-sell opportunities we are only penetrated into 40% of our base in lending and only above 30% in insurance which gives us a lot of opportunities for cross-sell. Thirdly, we have introduced new VAS, value added services products into that base which means there's a lot of opportunity to grow. But what excites us about the future is that, the Adumo pay out gives us 250,000 new customers who are non-grant customers. These customers are customers as Ali pointed out earlier of large corporates that pay out their employees on meeting certain metrics either for safety or anything like that. We now have an opportunity to sell our products into that base and that provides us a beachhead into a non-grant future. We see ourselves finding pockets of underserved beyond the grant space. So yes, there is a lot of room for us to grow in the grant space, but we're starting to put on opportunities to look beyond the grant space and look at other pockets of underserved customers. Theo O’Neill: Okay, thanks. I have one more question. Could you just give us some comments on CapEx plans for 2025?

The question was from Theo, can you provide some info on CapEx plans for fiscal 2025?

I'm not sure whether they can hear you. WhatsApp the question? WhatsApp the question to Naeem?

Theo, would you mind asking the question again? Theo O’Neill: I was wondering if you could give us some insight into CapEx plans for 2025?

All right, thank you. I think that's Theo. Theo, thank you for the question. In terms of our CapEx plans for 2025, as I've highlighted in my presentation with CapEx, with the business, we remain focused on growth CapEx. So we would be expecting to spend a fairly similar CapEx amount for FY 2025. And this will be mainly spent within the merchant business, specifically within our Main Street business, which is a Kazang business for investments in our POS, and that is mainly related to growth of our merchant base. And then also with regards to the cash business, as Steve highlighted, the market is looking a bit more favorable and the economy is looking better. So we also investing within that cash structure. So I would say that, CapEx spend on -- on growth CapEx would be very similar. Theo O’Neill: Thank you very much.

Okay. And our final question here comes from Jared Houston at All Weather Capital. Ali, how are you thinking about reflection in the group's debt levels? Will the further improvement in net debt to EBITDA be driven mainly by EBITDA growth, or can we expect some debt reduction at a group level? Where do you see the direction of leverage ratio when considering your outlook?

Well, I'm going to let Naeem actually answer the question, but just to kick it off, we are intending to manage the business at that 2 times ratio as a whole. The consequence of our existing debt position and the Adumo transaction completing and the guidance that we've provided would result in a materially lower net debt to EBITDA ratio than we currently are, but maybe if Naeem you can unpack that. Theo O’Neill: Yes, sure. Jared, thanks. Just to give a better understanding, if you look at our FY 2024 balance sheet, we've had significant progress in terms of releasing close on to about ZAR140 million of the [South Sea] (ph) stock that we've been holding for a few years. I think that cash and the funds that we've generated from that has given us the ability to reduce some of our capitalized interest expense. We're sitting now with around ZAR30 million of the South Sea stock. That was quite a significant cash inflow for us. We've also moved a year ago from a leverage ratio of 4.5 times to about 2.5 times is what we've closed at the end of FY 2024. And I think as Ali has stated in terms of our group debt restructuring, there is some further benefits that we'll get from an interest -- reduced interest cost going forward into FY 2025. And post the Adumo transaction, if we achieve the midpoint of our guidance, as well as the restructuring of our consumer loan book into a separate structure, we should be getting to -- our target is to be at a leverage ratio below 2 times.

Thank you, Naeem. Thank you, Ali. That's going to bring us to the end of the webcast today. We've run short on time. We had a few technical difficulties at the end that we worked through, but we will be following up with anybody who had a question that wasn't asked. So please stand by and thank you for your participation. This concludes today's webcast.