ersonal use only

Investor Presentation

OFX to acquire 100% of Canadian Corporate foreign exchange business Firma Foreign Exchange Corporation

(Firma)

20-Dec-21

Confidential

Strategic acquisition that provides significant scale at attractive returns

only

Accelerates growth in

EPS accretive, value creation

Funded via a combination

Corporate and North America

for OFX shareholders

of debt and available cash

ersonal use

  • Firma is a global foreign exchange service provider based in Canada, providing spot and forward products to Corporate clients
  • Firma is a profitable business with
    A$51.9m in FY211 revenue and A$10.9m in FY211 EBITDA
  • Accelerates Corporate growth, equivalent to 5 years' organic growth, driving Corporate segment (+93% revenue)2 and North American region (+121% revenue)2
  • Refer to Section [1] for an overview of Firma and Section [2] for strategic rationale of the transaction
  • Consideration represents 9.0x3 Firma's last- twelve-monthsEBITDA to 30 Sep 2021
  • Expected to deliver underlying EPS accretion of c. >20% in Year 1 and >30% in Year 24
  • Pre-taxsynergies of A$5m in FY25, through leveraging OFX's global technology platform, a larger footprint of licenses, enhanced product offering and benefits of scale
  • Refer to Section [2] for synergies and Section [3] for financial impact
  • Total consideration consists of C$90m (A$98m) upfront cash1
  • Cash consideration will be funded by an underwritten debt facility, with transaction costs to be funded by available cash
  • Estimated net debt to pro-formaEBITDA of c.1.5x at close, with the ability to de-leverage by FY26 through strong cash flow generation
  • Refer to Section [3] for the financial impact and funding of the transaction

Delivers 40% incremental revenue and >20% year 1 underlying EPS accretion

Note: the acquisition is subject to customary conditions, including Financial Conduct Authority approval in the UK which OFX is confident of receiving. Completion is expected to occur in 1Q23, subject to the completion of these conditions. All Firma AUD figures are based on AUD/CAD FX rate of 0.915. 1 Based on Sep-YE.2 Based on OFX LTM Sep 21 Fee and Trading income (Revenue) ex-slippage. Growth calculated excluding synergies. 3 Calculated as

C$90m of consideration over C$9.95m of LTM Sep 21 EBITDA. 4 Underlying EPS accretion excludes transaction costs and other integration costs. Statutory EPS accretion of c (20.0)% FY23 and c.20.0% in FY24.

2

Firma is a c. A$50m revenue business generating attractive EBTIDA margins

ersonal use only

Firma financial profile

In A$ millions, September YE

Historic underinvestment in technology has limited growth, though provides significant opportunity for OFX to drive value through synergies

+2%

46.9

49.2

49.9

49.3

51.9

Revenue

(A$m)

2017A

2018A

2019A

2020A

2021A

EBITDA

7.9

6.1

10.2

11.3

10.9

(A$m)

EBITDA

16.7 %2

12.4 %2

20.3 %

22.8 %

20.9 %3

Margin1

95%

Corporate Clients

(FY21)

Consumer 5%

Corporate 95%

88%

Spot Transactions

(FY21)

Other 2%

Forward 10%

Spot 88%

3

Note: FY21 figures are LTM Sep 21 (unaudited). All figures based on AUD/CAD FX rate of 0.915. 1 EBTIDA margin = Reported EBITDA/ Reported Revenue. 2 EBITDA in FY17 and FY18 excluding amortisation of lease assets. 3 EBITDA decline due to an investment in technology and people and higher bad debts

onlyuse2

3

ersonal4

Strategic Rationale

Financial Impact

Firma is a Corporate foreign exchange business based in Canada

only

Business overview

Geographic coverage by turnover

Based in Edmonton, Canada, Firma has 190+ employees1 and operates

from 9 offices in Canada, Australia, the UK & New Zealand

~9,600 active Corporate clients

80%

11%

Strong management team with combined 25 years+ of FX experience

use

Strong commercial expertise, with 701

sales people and a strong service

culture serving diverse industries

4%

5%

ersonal

Key metrics

~9.6k

76

~A$2.2m

71%

~A$60k

7%

# of Corporate

Net promoter

Target Corporate client

Turnover in

Average transaction

Revenue from digital

clients

score

annual FX turnover

CAD/USD corridor

values

online clients2 vs

~90% in OFX

1 Firma's total employees as at 30 Sep 21 were 194, 72 sales FTE. 2 LTM Sep 21.

5

This is an excerpt of the original content. To continue reading it, access the original document here.

Attachments

  • Original Link
  • Original Document
  • Permalink

Disclaimer

OFX Group Limited published this content on 19 December 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 December 2021 21:39:03 UTC.