|
Three months ending
September 30, 2021 |
|
Year ending
December 31, 2021 |
| (In U.S. dollars) |
$ |
|
$ |
$ |
|
|
|
Previous |
Updated |
| Total Volume(2) (in billions) |
21.5 – 22.5 |
|
83 – 89 |
88 – 91 |
| Revenue (in millions) |
174 – 180 |
|
610 – 640 |
690 – 705 |
| Adjusted EBITDA(1) (in millions) |
71 – 75 |
|
264 – 277 |
295 – 305 |
Growth Targets
Nuvei’s medium-term(3) compound annual growth rate (“CAGR”) targets for total volume(2) and revenue, as well as its longer-term target for Adjusted EBITDA margin(1), are shown in the table below. The Company expects to achieve its medium(3) and long-term(3) targets through continuing momentum and performance of its core business driven by geographic expansion, product innovation, growing wallet share with its existing merchant customers, new merchant customer wins through its direct sales channel and growing sales pipeline, and the favorable tailwinds of the industries it serves.
|
Growth Targets |
|
|
| Total Volume(2) |
30%+ CAGR in the medium term(3) |
| Revenue |
30%+ CAGR in the medium term(3) |
| Adjusted EBITDA margin(1) |
50%+ over the long term(3) |
(1) Adjusted EBITDA, Adjusted EBITDA margin and Adjusted net income are non-IFRS measures. See “Non-IFRS Measures”.
(2) Total volume does not represent revenue earned by the Company, but rather the total dollar value of transactions processed by merchants under contractual agreement with the Company. Total volume is explained in further detail in the Company’s most recent Management’s Discussion and Analysis of Financial Condition and Results of Operations.
(3) “Medium-term” and “long term” have not been defined by Nuvei nor does Nuvei intend to define them. These targets should not be considered as projections, forecasts or expected results but rather goals that may result from the execution of our strategy. These growth targets are fully qualified and based on a number of assumptions described under the heading “Forward-Looking Information” of this press release.
Pursuing Additional Listing in the United States on Nasdaq
Consistent with its growth strategy, Nuvei has filed an application with Nasdaq to list its subordinate voting shares. The listing application remains subject to satisfaction of all applicable listing and regulatory requirements as well as the approval of Nasdaq, and there is no certainty as to the timing of any listing or that the listing will take place. Nuvei will continue to be listed on the Toronto Stock Exchange. See “Forward-looking information”.
Conference Call Information
Nuvei will host a conference call to discuss its second quarter 2021 financial results today August 10, 2021 at 8:30 am ET. Hosting the call will be Philip Fayer, Chair and CEO, and David Schwartz, CFO.
The conference call will be webcast live from the Company’s investor relations website at https://investors.nuvei.com under the “Events & Presentations” section. A replay will be available on the investor relations website following the call.
The conference call can also be accessed live over the phone by dialing 877-425-9470 (US/Canada toll-free), or 201-389-0878 (international). A replay will be available one hour after the call and can be accessed by dialing 844-512-2921 (US/Canada toll-free), or 412-317-6671 (international); the conference ID is 13721533. The replay will be available through Tuesday, August 24, 2021.
About Nuvei
We are Nuvei (TSX: NVEI and NVEI.U), the global payment technology partner of thriving brands. We provide the intelligence and technology businesses need to succeed locally and globally, through one integration – propelling them further, faster. Uniting payment technology and consulting, we help businesses remove payment barriers, optimize operating costs and increase acceptance rates. Our proprietary platform provides seamless pay-in and payout capabilities, connecting merchants with their customers in 204 markets worldwide, with local acquiring in 45 markets. With support for over 480 local and alternative payment methods, nearly 150 currencies and 40 cryptocurrencies, merchants can capture every payment opportunity that comes their way. Our purpose is to make our world a local marketplace.
For more information, visit www.nuvei.com
Non-IFRS Measures
Nuvei’s unaudited condensed interim consolidated financial statements have been prepared in accordance with IFRS as issued by the International Accounting Standards Board. The information presented in this press release includes non-IFRS financial measures, namely Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net income, Adjusted net income per basic share, and Adjusted net income per diluted share. These measures are not recognized measures under IFRS and do not have standardized meanings prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement IFRS measures by providing further understanding of the Company’s results of operations from management’s perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of the Company’s financial information reported under IFRS. Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net income, Adjusted net income per basic share, and Adjusted net income per diluted share are used to provide investors with a supplemental measure of the Company’s operating performance and thus highlight trends in Nuvei’s core business that may not otherwise be apparent when relying solely on IFRS measures. The Company’s management also believes that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers. Nuvei’s management also uses non-IFRS measures in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts and to determine components of management compensation. The Company’s management believes Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net income, Adjusted net income per basic share and Adjusted net income per diluted share are important supplemental measures of Nuvei’s performance, primarily because they and similar measures are used widely among others in the payment technology industry as a means of evaluating a company’s underlying operating performance.
Forward-Looking Information
This press release contains “forward-looking information” within the meaning of applicable securities laws, including Nuvei’s (a) objective to expand headcount by approximately 200 employees globally across the organization by year end 2021, (b) expectation to complete the acquisition of Simplex in the second half of 2021, (c) intention to explore a listing in the United States on Nasdaq, (d) outlook on total volume, revenue and Adjusted EBITDA for the three months ending September 30, 2021 and the year ending December 31, 2021 as well as medium and long-term targets on total volume, revenue and Adjusted EBITDA margin. Nuvei’s outlook and targets, as the case may be, on revenue, Adjusted EBITDA and Adjusted EBITDA margin also constitutes “financial outlook” within the meaning of applicable securities laws and is provided for the purposes of assisting the reader in understanding the Company’s financial performance and measuring progress toward management’s objectives and the reader is cautioned that it may not be appropriate for other purposes. Forward-looking information involves known and unknown risks and uncertainties, many of which are beyond the Company’s control, that could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. These risks and uncertainties include but are not limited to those described under the “Risks Factors” section of the Company’s annual information form filed on March 17, 2021. Forward-looking information is based on management’s beliefs and assumptions and on information currently available to management. Particularly, management’s assessments of, outlook for, and targets for, total volume, revenue, Adjusted EBITDA and Adjusted EBITDA margin set out herein are generally based on the following assumptions: (a) Nuvei’s results of operations will continue as expected, (b) the Company will continue to effectively execute against its key strategic growth priorities, despite the current COVID-19 pandemic and measures taken to contain the virus, (c) the Company will continue to retain and grow its existing customer base while adding new customers, (d) the Company will not complete any acquisitions or divestitures (e) economic conditions will remain relatively stable throughout the period, (f) the industries Nuvei operates in will continue to grow consistent with past experience, (g) there will be no fluctuations in currency exchange rates and volatility in financial markets, (h) there will be no changes in legislative or regulatory matters that negatively impact Nuvei’s business, and (i) current tax laws will remain in effect and will not be materially changed. Although the forward-looking information contained in this press release is based upon what management believes are reasonable assumptions, you are cautioned against placing undue reliance on this information since actual results may vary from the forward-looking information. Unless otherwise noted or the context otherwise indicates, the forward-looking information contained in this press release is provided as of the date of this press release, and the Company does not undertake to update or amend such forward-looking information whether as a result of new information, future events or otherwise, except as may be required by applicable law.
Contact:
Investors
Anthony Gerstein
Vice President, Head of Investor Relations
anthony.gerstein@nuvei.com
Consolidated Statements of Profit or Loss and Comprehensive Income or Loss Data
(in thousands of U.S. dollars except for share and per share amounts)
|
|
|
|
Three months ended
June 30, |
Six months ended
June 30, |
|
|
|
|
2021
$ |
2020
$ |
2021
$ |
2020
$ |
| Revenue |
|
|
|
178,239 |
83,325 |
328,719 |
166,564 |
| Cost of revenue |
|
|
|
33,124 |
13,561 |
60,308 |
28,729 |
| Gross profit |
|
|
|
145,115 |
69,764 |
268,411 |
137,835 |
|
|
|
|
|
|
|
|
| Selling, general and administrative expenses |
|
|
|
95,870 |
50,893 |
184,306 |
105,759 |
| Operating profit |
|
|
|
49,245 |
18,871 |
84,105 |
32,076 |
|
|
|
|
|
|
|
|
| Finance income |
|
|
|
(912) |
(1,449) |
(1,771) |
(2,795) |
| Finance costs |
|
|
|
3,432 |
24,083 |
6,747 |
55,342 |
| Net finance costs |
|
|
|
2,520 |
22,634 |
4,976 |
52,547 |
| Loss (gain) on foreign currency exchange |
|
|
|
1,691 |
(18,286) |
1,246 |
27,433 |
| Income (loss) before income tax |
|
|
|
45,034 |
14,523 |
77,883 |
(47,904) |
|
|
|
|
|
|
|
|
| Income tax expense |
|
|
|
6,120 |
558 |
11,179 |
474 |
| Net income (loss) |
|
|
|
38,914 |
13,965 |
66,704 |
(48,378) |
|
|
|
|
|
|
|
|
| Other comprehensive income (loss) |
|
|
|
|
|
|
|
| Items that may be reclassified subsequently to profit or loss |
|
|
|
|
|
|
|
| Foreign operations – foreign currency translation differences |
|
|
|
4,310 |
(16,357) |
(10,539) |
23,310 |
| Comprehensive income (loss) |
|
|
|
43,224 |
(2,392) |
56,165 |
(25,068) |
| Net income (loss) attributable to: |
|
|
|
|
|
|
|
| Common shareholders of the Company |
|
|
|
37,830 |
13,216 |
64,644 |
(49,377) |
| Non-controlling interest |
|
|
|
1,084 |
749 |
2,060 |
999 |
|
|
|
|
38,914 |
13,965 |
66,704 |
(48,378) |
| Comprehensive income (loss) attributable to |
|
|
|
|
|
|
|
| Common shareholders of the Company |
|
|
|
42,140 |
(3,141) |
54,105 |
(26,067) |
| Non-controlling interest |
|
|
|
1,084 |
749 |
2,060 |
999 |
|
|
|
|
43,224 |
(2,392) |
56,165 |
(25,068) |
| Net income (loss) per share |
|
|
|
|
|
|
|
| Net income (loss) per share attributable to common shareholders of the Company |
|
|
|
|
|
|
|
| Basic |
|
|
|
0.27 |
0.16 |
0.47 |
(0.58) |
| Diluted |
|
|
|
0.26 |
0.15 |
0.45 |
(0.58) |
|
|
|
|
|
|
|
|
| Weighted average number of common shares outstanding |
|
|
|
|
|
|
|
| Basic |
|
|
|
138,719,227 |
84,606,171 |
138,462,027 |
84,605,470 |
| Diluted |
|
|
|
143,265,259 |
86,992,447 |
142,991,370 |
84,605,470 |
Reconciliation of Adjusted EBITDA to net income (loss)
(In thousands of U.S. dollars)
|
Three months
ended June 30, |
|
Six months
ended June 30, |
|
2021 |
2020 |
|
2021 |
2020 |
| (In thousands of U.S. dollars) |
$ |
$ |
|
$ |
$ |
|
|
|
|
|
|
| Net income (loss) |
38,914 |
13,965 |
|
66,704 |
(48,378) |
| Finance cost |
3,432 |
24,083 |
|
6,747 |
55,342 |
| Finance income |
(912) |
(1,449) |
|
(1,771) |
(2,795) |
| Depreciation and amortization |
20,740 |
17,020 |
|
41,738 |
34,333 |
| Income tax expense |
6,120 |
558 |
|
11,179 |
474 |
| Acquisition, integration and severance costs (a) |
4,500 |
1,208 |
|
9,840 |
2,878 |
| Share-based payments (b) |
4,953 |
402 |
|
9,058 |
735 |
| Loss (gain) on foreign currency exchange |
1,691 |
(18,286) |
|
1,246 |
27,433 |
| Legal settlement and other (c) |
(63) |
(111) |
|
96 |
656 |
| Adjusted EBITDA (d) |
79,375 |
37,390 |
|
144,837 |
70,678 |
| Advance from third party – merchant residual received (e) |
3,138 |
2,719 |
|
5,866 |
5,668 |
(a) These expenses relate to:
(i) professional, legal, consulting, accounting and other fees and expenses related to our acquisition activities and financing activities. For the three months and the six months ended June 30, 2021, those expenses were $4.5 million and $9.8 million respectively ($2.0 million and $3.2 million for the three months and the six months ended June 30, 2020). These costs are presented in the professional fees line item of selling, general and administrative expenses.
(ii) acquisition-related compensation. For the three months and the six months ended June 30, 2021, those expenses were nil ($0.2 million and $0.5 million for the three months and the six months ended June 30, 2020). These costs are presented in the employee compensation line item of selling, general and administrative expenses.
(iii) change in deferred purchase consideration for previously acquired businesses, which was nil for the three and the six months ended June 30, 2021 (gain of $1.3 million for the three and the six months ended June 30, 2020).
(iv) severances and integration expenses. For the three months and the six months ended June 30, 2021, severances were immaterial ($0.2 million and $0.4 million for the three months and the six months ended June 30, 2020). Severance expenses are presented in the employee compensation line item of selling, general and administrative expenses.
(b) These expenses represent non-cash expenses recognized in connection with stock options and other awards issued under share-based plans.
(c) This line item primarily represents legal settlements and associated legal costs reached outside of the normal course of business, as well as non-cash gains, losses and provisions and certain other costs. These costs are presented in the other line item of the selling, general and administrative expenses.
(d) Adjusted EBITDA is a non-IFRS measure that the Company uses to assess its operating performance and cash flows.
(e) Commencing in 2018, the Company entered into various agreements with a single third-party independent sales organization to acquire the rights to future cash flows from a portfolio of merchant contracts.
Reconciliation of Adjusted net income to net income (loss)
(In thousands of U.S. dollars except for per share amounts)
|
Three months
ended June 30 |
|
Six months
ended June 30 |
| (In thousands of U.S. dollars except for per share amounts) |
2021 |
2020 |
|
2021 |
2020 |
| $ |
$ |
|
$ |
$ |
|
|
|
|
|
|
| Net income (loss) |
38,914 |
13,965 |
|
66,704 |
(48,378) |
| Change in redemption value of liability-classified common and preferred shares (a) |
– |
5,850 |
|
– |
17,486 |
| Amortization of acquisition-related intangible assets (b) |
17,897 |
14,875 |
|
36,109 |
29,050 |
| Acquisition, integration and severance costs (c) |
4,500 |
1,208 |
|
9,840 |
2,878 |
| Share-based payments (d) |
4,953 |
402 |
|
9,058 |
735 |
| Loss (gain) on foreign currency exchange |
1,691 |
(18,286) |
|
1,246 |
27,433 |
| Legal settlement and other (e) |
(63) |
(111) |
|
96 |
656 |
| Adjustments |
28,978 |
3,938 |
|
56,349 |
78,238 |
| Income tax expense related to adjustments(f) |
(3,386) |
(1,644) |
|
(7,386) |
(3,820) |
| Adjusted net income (g) |
64,506 |
16,259 |
|
115,667 |
26,040 |
|
|
|
|
|
|
| Adjusted net income per share attributable to common shareholders of the Company (h) |
|
|
|
|
|
| Basic |
0.46 |
0.18 |
|
0.82 |
0.30 |
| Diluted |
0.44 |
0.18 |
|
0.79 |
0.29 |
(a) This line item represents change in redemption value related to shares classified as liabilities prior to the Company’s initial public offering (“IPO”). As part of the IPO, such shares were converted into equity as Subordinate Voting Shares. These expenses are included in finance costs.
(b) This line item relates to amortization expense taken on intangible assets created from the purchase price adjustment process on acquired companies and businesses and from the acquisition of all the outstanding shares of Pivotal Holdings Ltd. by Nuvei in September 2017.
(c) These expenses relate to:
(i) professional, legal, consulting, accounting and other fees and expenses related to our acquisition activities and financing activities. For the three months and the six months ended June 30, 2021, those expenses were $4.5 million and $9.8 million respectively ($2.0 million and $3.2 million for the three months and the six months ended June 30, 2020). These costs are presented in the professional fees line item of selling, general and administrative expenses.
(ii) acquisition-related compensation. For the three months and the six months ended June 30, 2021, those expenses were nil ($0.2 million and $0.5 million for the three months and the six months ended June 30, 2020). These costs are presented in the employee compensation line item of selling, general and administrative expenses.
(iii) change in deferred purchase consideration for previously acquired businesses, which was nil for the three and the six months ended June 30, 2021 (gain of $1.3 million for the three and the six months ended June 30, 2020).
(iv) severances and integration expenses. For the three months and the six months ended June 30, 2021, severances were immaterial ($0.2 million and $0.4 million for the three months and the six months ended June 30, 2020). Severance expenses are presented in the employee compensation line item of selling, general and administrative expenses.
(d) These expenses represent non-cash expenses recognized in connection with stock options and other awards issued under share-based plans.
(e) This line item primarily represents legal settlements and associated legal costs reached outside of the normal course of business, as well as non-cash gains, losses and provisions and certain other costs. These costs are presented in the other line item of the selling, general and administrative expenses.
(f) This line item reflects income tax expense on taxable adjustments using the tax rate of the applicable jurisdiction.
(g) Adjusted net income is a non-IFRS measure that the Company uses to further assess its operating performance.
(h) Adjusted net income per diluted share is calculated using share-based awards outstanding at the end of each period on a fully diluted basis if they were in-the-money at that time.
| Consolidated Statements of Cash Flow Data
(in thousands of U.S. dollars) |
|
|
|
2021
$ |
|
2020
$ |
|
|
|
|
|
|
|
| Cash flows from operating activities |
|
|
|
|
|
|
| Net income (loss) |
|
|
|
66,704 |
|
(48,378) |
| Adjustments for: |
|
|
|
|
|
|
| Depreciation of property and equipment |
|
|
|
2,780 |
|
2,702 |
| Amortization of intangible assets |
|
|
|
38,958 |
|
31,631 |
| Amortization of contract assets |
|
|
|
1,017 |
|
1,076 |
| Share-based payments |
|
|
|
9,058 |
|
735 |
| Net finance costs |
|
|
|
4,976 |
|
52,547 |
| Loss on foreign currency exchange |
|
|
|
1,246 |
|
27,433 |
| Impairment on disposal of a subsidiary |
|
|
|
– |
|
487 |
| Income tax expense |
|
|
|
11,179 |
|
474 |
|
|
|
|
|
|
|
| Changes in non-cash working capital items |
|
|
|
14,265 |
|
(6,138) |
|
|
|
|
|
|
|
| Interest paid |
|
|
|
(5,435) |
|
(29,424) |
| Income taxes paid |
|
|
|
(5,754) |
|
(304) |
|
|
|
|
|
|
|
|
|
|
|
138,994 |
|
32,841 |
|
|
|
|
|
|
|
| Cash flows from (used in) investing activities |
|
|
|
|
|
|
| Business acquisitions, net of cash acquired |
|
|
|
(88,930) |
|
– |
| Proceeds from the sale of a subsidiary, net of cash |
|
|
|
– |
|
18,896 |
| Decrease in other non-current assets |
|
|
|
9,787 |
|
321 |
| Net decrease (increase) in advances to third parties |
|
|
|
5,982 |
|
(473) |
| Acquisition of property and equipment |
|
|
|
(2,419) |
|
(1,292) |
| Acquisition of intangible assets |
|
|
|
(8,706) |
|
(6,842) |
|
|
|
|
|
|
|
|
|
|
|
(84,286) |
|
10,610 |
|
|
|
|
|
|
|
| Cash flows from (used in) financing activities |
|
|
|
|
|
|
| Transaction costs related to loans and borrowings |
|
|
|
(5,373) |
|
(452) |
| Proceeds from exercise of stock options |
|
|
|
3,968 |
|
– |
| Proceeds from issuance of share capital |
|
|
|
– |
|
150 |
| Proceeds from loans and borrowings |
|
|
|
300,000 |
|
56,999 |
| Repayment of loans and borrowings |
|
|
|
– |
|
(84,185) |
| Payment of lease liabilities |
|
|
|
(1,327) |
|
(1,218) |
| Dividend paid by subsidiary to non-controlling interest |
|
|
|
(680) |
|
(400) |
|
|
|
|
|
|
|
|
|
|
|
296,588 |
|
(29,106) |
|
|
|
|
|
|
|
| Effect of movements in exchange rates on cash |
|
|
|
1,670 |
|
806 |
|
|
|
|
|
|
|
| Net increase in cash |
|
|
|
352,966 |
|
15,151 |
|
|
|
|
|
|
|
| Cash – Beginning of period |
|
|
|
180,722 |
|
60,072 |
|
|
|
|
|
|
|
| Cash – End of period |
|
|
|
533,688 |
|
75,223 |
|
|
|
|
|
|
|
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