Preliminary Results for the year ended
30th June 2010
25 August 2010
George Osborne in India
Click to play
2
Agenda
• Introduction
• Market update
• Company update
• Finance update
• Summary
Introduction
The Network Effect
UK iPhone launch
Page number
New Media Age winner ‘Best Use of Mobile 2010’
Lloyds TSB “Say Hello” campaign
O2 16 apps press campaign
Multi state roll out during the
tax season
5
Overview
• Mobile money market - large, validated and fast-growing global market
• Monitise platform established as a market leader
• Gaining significant traction
– Strong UK track record with platform already adopted by RBS Group,
HSBC & Lloyds & available across all mobile phone networks
– Customer base growing rapidly
– International partners include Visa, SCB, Travelex & FIS
– JVs in place to access fast-growing markets of USA, Asia Pacific &
India
6
Overview Continued
• Strengthening of relationship with Visa
– Equity investment increases shareholding to 14.4%
– Extension of Global Alliance Agreement (GAA) and licensing of
new strategic territories (Mexico and Russia)
• Cash raised provides funding for Group until cash generative
– UK operations expected to reach cash break-even by December
2010
– Current live operations expected to reach cash break-even
during FY12
• Significant opportunity to cement leading international position
7
Market
update
Mobile Money and the Opportunity
• Mobile Money is securely accessing your finances through your mobile phone
• Mobile Money gives you the freedom to bank and pay on the move
– Direct connection to accounts
– Ability to make payments/transfer funds
• The scale of the opportunity is enormous
– There are 2.2 billion people using financial services in the world
(Financial Access
Initiative, McKinsey 2009)
– There are 4.6 billion mobile phone users in the world
(International Telecommunications
Union, “Measuring the Information Society” 2010)
400m
The number of subscribers
who will use their phones for
mobile banking by 2013
(Juniper Research, 2010)
108.6m
The number of people who will
make payments by mobile
phones in 2010 – up from 70.2m
in 2009 (Gartner, June 2010)
$250bn
The value of mobile
payments by 2012, growing
globally at 68% p.a. from
2008 (Arthur D Little, 2009)
9
Company
update
Group Overview
Global
opportunity
Banking & payments touch the lives of billions of consumers worldwide
Blue chip business
partners
Adopted by major
UK and other
financial
institutions
Wide platform
applicability
Any phone, any network
Via SMS, Java, Brew, Browser, iPhone, Blackberry, Android
Broad range of
services
From balance enquiry to instant payment
Account management, payments, mCommerce
11
- A Key Strategic Partner
Visa Inc.
• A global leader in payments
• A key strategic partner for Monitise
• Mobile channel is a major strategic imperative for Visa
•
•
•
•
16,000 financial institution customers
1.8 billion Visa cards (31 Dec 2009)
64 billion total transactions
$2.9 trillion payments volume
Source: Visa website. Figures as of 31 March 2010 unless stated otherwise
Strengthening of Global Alliance Agreement (GAA)
• Equity investment increased to 14.4% in Monitise plc
“Mobile – the next payments frontier”
(Visa Inc.)
• Extension of Global Alliance Agreement
•
Term increased to 2015 , minimum fee commitment increases from $13m to $16m
•
Monitise to grant Visa Inc. license for further deployment in Mexico and Russia – licence fee of
$1.5m anticipated for FY10/11
• Appointment of Elizabeth Buse, Group Executive, International, for Visa Inc. to the Monitise Board
12
Our managed services make the complex
simple…
Patent
Protected
12
Monitise Customer Propositions
Advanced
28%
Essentials
24%
Feeder
48%
Customers
who have multiple
services Customers
who have
downloaded an app
Customers who have registered
for text alerts services
Customers who have registered
for account updates (via text)
Typically customers who have
registered for our pre-paid
card and card activation services
(£7+ ARPU)
(£2-3 ARPU)
(<£1 ARPU)
14
Typical Feeder Services
• Debit and credit card activation by text
• Pre pay card balance notification
• Update and event confirmation
text messages
15
Typical Essentials Services
• Pull an account Balance via text
• Weekly Text Update
• Low Balance Text Alerts
• Actionable Alerts
• Overdraft Sweep
• PayDay Sweep
16
Advanced Services
• App Stores: Apple, RIM,
Ovi, Android
• Secure Browser alternative
• Bank Accounts, Prepaid
Cards, Credit Cards
• Account Management
• Set & Manage Alerts
• Lock/ Unlock Cards
• Branch/ATM Locator
• Bill Present & Pay
• Payments: Pay
Anyone & P2P
• Reloads: Airtime top-up
Transit, Prepaid
• Cross Sales/CRM Prompts
• Loyalty
• 2FA for secure log in
• Stock Trading
• Coupons & Vouchers
• Lottery
• NFC Ready
Live
Future roadmap
17
Emerging new customer behaviour
Advanced segment usage trends
•Banking channel of choice, with 16 transactions
a month
•App usage highest between 7am and 9am (on
the way into work)
•Usage peaks on Friday’s and Monday’s and at
the end of the month (‘have I been paid yet?’)
•90% of customers who download it, go on to use
the app regularly
18
Unlocking the Potential
In the developed world, factors that drive
addressable market are:
 Adult population
 % banked or with prepaid cards
 % pop with mobile phone
Asia Pac (Inc
China) 400m+
Consumers
India 230m+
Consumers
USA 212m
Consumers
UK 36m
Consumers
In the developing world, factors that drive
addressable market are:
Adult population
% pop with mobile phone
% with banked or with prepaid cards but also
offer an m-wallet for the unbanked if the
regulations allow
Time
19
Finance
update
Business Evolution
UK
2007
Americas
2008
Visa Global
2009
Asia Pacific
2010
India
2011
Africa
2012
TECHNOLOGY
Investment Areas
Live Operations
Live
21
Financial Summary
Revenues
FY08 to FY10 Revenues by Type
• Revenues of £6m, up from £2.7m in FY09 (↑125%)
£6.0m
• H2: £4.3m, up from £1.6m in H2 FY09 (↑170%)
6.0
• Transactional revenues gaining traction (↑490%)
5.0
Live Operations
2.9
£m
4.0
£2.7m
• Reducing losses from H1 to H2
3.0
• Driving towards profitability
2.0
• UK operation on track to cash break-even by Dec 2010
• Monitise Americas close to cash break-even
Transactional
Revenues
0.5
£1.5m
1.7
License Fees /
Royalties
1.1
1.0
0.0
0.4
Development
Revenues
1.0
1.1
1.4
FY 08
FY 07/08
FY 09
FY 08/09
FY 10
FY 09/10
Investments
H1 FY08 to H2 FY10 Transactional Revenues
• Increase in investment spend H1 to H2
• Asia Pacific JV
• Enhancement of platform capability
• Growing appetite for mobile payments
• Retaining / extending our technological advantage
Cash
2.5
2.0
1.5
£m
2.1
1.0
0.5
0.8
• Cash balance of £13.2m at 30 June 2010
• Cash balance, post fund-raising, in excess of £42m
0.0
H1 FY
H1 08
FY
07/08
0.1
H2 FY
H208
FY
07/08
0.2
H1 FY
H1 09
FY
08/09
0.3
H2 FY
H2 09
FY
08/09
H1 FY
H110FY
09/10
H2 FY
H210
FY
09/10
22
Segmental Performance – Year on Year
FY 10
FY 09
Year
Year
Revenue
Op (loss)*
Revenue
Op (loss)
£m
£m
£m
£m
Live operations
4.8
(2.5)
2.1
(2.0)**
Future Ops/Technology/Corporate
1.2
(11.8)
0.6
(10.0)
Total
6.0
(14.3)
2.7
(12.0)**
*Before Share Base Payments/Exceptionals
** Prior year loss for live ops includes 50% share of Monitise Europe.
Like for like Group operating loss is broadly flat year on year
23
Segmental Performance – FY10
H1/H2 Revenue & Loss Trend
H1
H2
Year
Revenue
Op(loss)
Revenue
Op(loss)
Revenue
Op(loss)
£m
£m
£m
£m
£m
£m
Live Operations
1.6
(1.6)
3.2
(0.9)
4.8
(2.5)
Future Ops/Technology/Corporate
0.1
(5.3)
1.1
(6.5)
1.2
(11.8)
Total
1.7
(6.9)
4.3
(7.4)
6.0
(14.3)
24
Segmental Performance – FY10
H1/H2 Margin & Overhead Trend
H1
H2
Year
£m
£m
£m
Revenue
1.7
4.3
6.0
Gross Margin
0.9
2.9
3.8
Total Overheads
(7.8)
(10.3)
(18.1)
Operating Loss
(6.9)
(7.4)
(14.3)
25
Key Milestones
Year to 30
June 2011
 UK operation
moves to cash
break-even
 Hong Kong launch
 China pilot launch
 India launch
 First Monitise
enabled Visa
product launch
 First Visa
transactional
revenues
Year to 30
June 2012
 All existing live
operations at cash
break-even (UK /
N America / Visa)
 First Indian
transactional
revenues
 First deployment
of live services in
China
 Further rollout
within Asia Pacific
region
2013 Onwards
 Group cash
generative
 Major
mCommerce
launch
26
Summary
• Fast growing demand for mobile money worldwide
• Established market leader with 8 years of investment in technology and relationships
• Highly motivated team supported by experienced Board, strengthened by new
appointments
• Blue chip partners & strategic investors
– Facilitating global access
– Deepening relationship with Visa
• Transactional revenues growing rapidly
• UK operations expected to reach cash break-even by December 2010
• Fundraising enables Monitise to
– Retain and extend its technological advantage
– Fund new areas of operation
– Take the Group to cash generation
Right partners, right team, right technology, right time
27
Appendix
Global Footprint
Monitise Europe
Monitise Americas
•
JV with FIS to tackle world’s
largest consumer markets
•
Launched 2008
•
Over 200 financial institutions
signed up
Monitise Asia Pacific
•
Launched in 2006
•
•
UK as flagship home market before
international roll out
Recent JV formed with First
Eastern
•
•
Significant customer growth in 2010
Showcase launch planned for Hong
Kong as springboard into China
•
>55% of UK retail banking market
coverage
•
Available through all mobile
networks
Monitise India
•
New JV formed with Visa Inc.
Monitise Africa
•
Development underway
supported by grant funding
(Africa Enterprise Challenge
Fund)
29
Driving Transactions in a Mobile World
Enquiries
Payments
Information
Financial
Transaction
Processors
Bank Accounts, Savings Accounts, Credit Card and other Accounts
VISA
Payments
FIS
VocaLink
Payments
Consumer
interface
Cheques
POS
30
The Mobile Evolution
If you don’t establish the secure link now it is lost
Importance of mobile commerce to the Banking industry
Phase 2 mCommerce
Mass market payments
Network extension of A2A
Cheque replacement
mCommerce - Proximity “NFC”
person to person payment “text
money”
Phase 1 mCommerce
Extend payment reach
mCommerce – Remote “text to buy”
Vouchers & offers (add revenue)
Leverage payment infrastructure
Defend payment position
Account to account payment
Mass market self service channel
Cost reduction & service enhancement
Account information/money management
Foundation for driving asset value
Database
MSISDN - PAN
31
Mobile Money will be
a massive market
‘‘
The number of mobile subscribers who use their phones for mobile banking will exceed
400m globally by 2013, according to a new in depth study by Juniper Research. This
equates to double the number of users this year. Juniper Research, July 2010
'The number of people using their mobile phones to make payments is set to grow from
70.2 million in 2009 to 108.6 million this year, a 54.5% rise. Gartner, June 2010
‘‘
'New types of SMS mobile banking alerts will help to treble the volume of mobile banking
messages to almost 90 billion per annum by 2015, equating to one message every two
days for every mobile banking user. Juniper Research, August 2010
32
Emerging new behaviors
%
33
Understanding their finances
sets them up for a day
34
Appealing to a mass market
35
NatWest iPhone Proposition
Q2 16 apps press campaign
App store home page
36
August Lloyds TSB collateral
37
Example live apps.
CSB Mobile Money
Health Mobile – Wealthcare
PyraMax
HIB Mobile – Highlands
AmBank Mobi - ABT
Magna Mobile
Avidia Bank
Stoneham bank
38
Recent milestones
Q2 ‘08
Q4 ‘08
October 2008: 1st
1 million
transaction
month
June 2009:
Visa 5 year
global alliance
signed
Q1 ‘09
Q2 ‘09
Aug 2009: Monitise
breaks 750,000
customer barrier
and takes 100%
control of UK joint
venture
Nov 2009:
Monitise launches
Smartphone
platform
Q4 ‘09
Q1 ‘10
Q2 ‘10
Q3 ‘10
June 2010:
Agreement signed
with VISA for India
JV
March/April 2010:
Monitise
hits 2 million
customers and JV in
Asia Pacific agreed
with First Eastern
July 2010: Further
£32m raised on
capital markets
Dec 2009: Monitise
breaks 1.5 million
customer barrier
39
Financial Results: Summary Cashflow
Year ended
30-Jun
2010
30-Jun
2009
£'m
£'m
10.1
9.7
Cash utilised in operations
(13.9)
(11.4)
Fixed asset purchases
(1.1)
(0.3)
Cash from fundraising
17.9
11.5
Other movements
0.2
0.6
Increase in cash in the year
3.1
0.4
Closing cash balance
13.2
10.1
Opening cash balance
40
Leadership Team
Remove detail
Executive Team
Alastair Lukies
CEO
• Co-founder of Monitise; co-founder of Epolitix.com (portal for
Westminster, Whitehall and devolved institutions)
John Brougham
CFO
• Formerly FD of BT Transformation and BT Global Services
Lee Cameron
CCO
• Formerly General Counsel of Morse PLC
Tom Spurgeon
Co Sec
• Formerly FD of Morse UK
Non-Executive Directors
Duncan McIntyre
NED
• Formerly CEO of Morse plc
David Dey
NED
• Founder of Energis, formerly BT PLC board member
Colin Tucker
NED
• Formerly Deputy Chair Hutchison 3G & Technical Director
Orange
Peter Radcliffe
NED
• Formerly MD First Data Asia Pacific
Elizabeth Buse
NED
• Group Executive, international, for Visa Inc
Jan Verplancke
NED
• CIO of Standard Chartered Bank
Other Advisors : Lord Mervyn Davies, Lord Digby Jones, Christopher Rodrigues (ex President
Visa International), Andrew Harrison (UK CEO The Carphone Warehouse )
41
Monitise: Investor Centre
22p (23 Aug 10)
AIM
MONI.L
£151m (23 Aug 10)
692,727,757 (23 Aug 10)
30000
30
25000
25
20000
20
15000
15
10000
10
5000
5
Profile of major Shareholders (% held)*
14%
5%
Price (p)
Share price
Market
Ticker
Market cap.
Ord. shares in issue
6%
6%
55%
7%
7%
0
Ju
n0
Se 7
pNo 07
v0
Ja 7
n0
Ap 8
r-0
Ju 8
nAu 08
g0
Oc 8
t -0
Ja 8
nM 09
ar
M 09
ay
-0
Au 9
g0
Oc 9
t -0
De 9
cM 09
ar
M -10
ay
-1
0
Ju
l-1
0
Volume (000's)
•
•
•
•
•
0
Visa 14.4%
Standard Chartered 5.5%
Other 56%
3i Group 4.6%
First Eastern 6.8%
UBS Global 6.0%
Norges Bank 6.7%
Sub 3% holdings reflect increased base of institutional shareholders
following recent placing (Standard Life, Fidelity, Schroders etc)
*Shareholders as at 23rd Aug 2010
42