FULL YEAR RESULTSfor the period ended 31 March 2019

2

CAPPREC overview

Highlights for the period

The opportunity

Financial performance

About our investments

Prospects

OUTLINE 1

2

3

4

5

6

7 Annexure

3

ABOUT CAPITAL APPRECIATION

We own, manage, invest in, and promote enterprises that innovate and seek to serve or

partner with established and emerging financial institutions

PAYMENTS & PAYMENT

INFRASTRUCTUREINTERNATIONAL *

AUSTRALIA

CAPPREC

100% 100% 17.45%

CTA ENTERPRISE

DEVELOPMENT FUND

SOFTWARE &

SERVICES

CTA 35%

4

HIGHLIGHTS

5

COMPARING 2019 TO 2018

The acquisition of subsidiaries became effective 5 May 2017. The 2018 financial

results include performance of the acquired businesses for 11 months only.COMPARISON VS.

PRIOR YEAR

Subsidiaries are generating substantial topline growth and an investment in

capacity to accommodate future growth was expensed during the year. This

investment is in anticipation of future increased activity.

INVESTMENT IN

OPERATING

INFRASTRUCTURE

In the interests of gaining increased volume and further market share gains,

African Resonance renegotiated certain terms of its relationship with a major

client.

CONTRACT WITH

MAJOR CLIENT

6

OPERATIONAL ACCOMPLISHMENTS

Expanded and enhanced client relationships in both the Payments

and Software divisions

• New blue-chip clients

Established new Synthesis office in Cape Town

• Expanded reach with retailers

Additional Amazon Web Services (AWS) accreditation received

• Financial Services

• DevOps52% increase in number of terminals in the hands of clients

• More than 140 000 terminals (92 000 last year)

• Good pipeline

• Scale operator with market share gains

Executive recruitment

• Hired key experienced executives

• Management continuity

Successful soft launch of Dashpay with annualised gross

transaction value (GTV) of more than R2.2 billion*, an

increase of c.57% since interim results

Improved B-BBEE rating

• African Resonance – Level 2 contributor

• Synthesis – Level 3 contributor

* Based on GTV through the Dashpay network in April 2019 annualised

Recruited additional accomplished team members

• Increased talent pool by 12% (27 new employees) and

21 new learnerships

Concluded “ISO Agreement” with Nedbank to complement

“Aggregator Agreement” with Mercantile Bank

• Progressing very well

Proud to now be associated with all major SA banks and also many other banks and financial institutions

7

GROUP FINANCIAL METRICS

EBITDA R 159.5 million

Trading profit R 173.2 million

Profit after tax R 124.6 million

Normalised profit after tax R 134.7 million

(9.8%)

(7.5%)

(12.8%)

(11.6%)

Cash flow from operations R 212.7 million

Cash conversion

(% of trading profit)

122.8%

27.4%

5.2%

HEPS 8.33 cents

NHEPS 9.01 cents

Cash EPS 10.93 cents

Full year dividends 4.25 cents

(12.6%)

(11.0%)

49.8%

6.3%

Earnings & Dividends

Capitalisation & Cash resources

Equity R 1.447 billion

Available cash per share 39 cents

3.9%

19.1%

Cash available for

investmentR 611.2 million 19.1%

Profit

Cash flow

Solid results against backdrop of political uncertainty and economic difficulty

NAV per share 93 cents 3.9%

Revenue R 607.7 million 19.6%

Revenue

Payments R 469.9 million

Services R 137.8 million

13.2%

48.0%

8

INCREASE VS. PRIOR

48.0%13.2%

Payments Software

77.3%

22.7%

FY18FY19

DIVISIONAL PERFORMANCE

REVENUE

Payments & Payment

Infrastructure

Software & Services

PAYMENTS & PAYMENT INFRASTRUCTURE SOFTWARE & SERVICES

• Strengthened relationship with existing clients

• New blue-chip client relationships established

• Strong pipeline

• Continued to increase the number of devices supplied to market

• Continued investment in and development of innovative platforms and

products

• Successful soft launch of new Dashpay platform

• Continuing with deliberate, progressive roll-out of Dashpay services

• Increased operational capacity

• Strengthened relationship with existing clients

• New blue-chip client relationships established

• Secured additional AWS accreditation

• Continued to cement AWS leadership

• Diversified revenue stream

• New office opened in Cape Town

• Increased operational capacity

• AWS announced SA based regional data centre to open in early 2020

HIG

HL

IGH

TS

(DECREASE) / INCREASE

VS. PRIOR

31.0%(10.9%)

Payments Software

75.5%

24.5%

FY18FY19

EBITDA

81.6%

18.4%

82.4%

17.6%

Payments & Payment

Infrastructure

Software & Services

9

POST YEAR-END TRANSACTIONS

CTA acquires all IP underlying

African Resonance from Uplink Dr. Neishlos will resign from

Executive role within Group

Dr. Neishlos and Eitan

Neishlos will resign from Board

of CTA

Revised licence agreement

between Uplink and Dashpay

re transaction processing

platform

• Access to source code

• Allow for independent

development

Various outstanding obligations

among the parties will be

settled

CTA will employ large

compliment of Uplink

development team

CTA will acquire 245 million

shares held by Dr. Neishlos

and related parties at 80 cents

per share

CTA will sell its interest in

Resonance Australia to a party

nominated by Dr. Neishlos

Transaction remains

dependent on shareholder and

JSE approval

10

B-BBEE COMMITMENT: ENTERPRISE DEVELOPMENTCAPPREC’s subsidiaries established a not-for-profit fund to coordinate its enterprise development spend

SA startup GovChat announces it’s secured

investment facility of up to R20m

Pretoria-based citizen engagement platform GovChat has secured an

investment facility from The Enterprise Development Fund of JSE-listed firm

Capital Appreciation.

Capital Appreciation has also

acquired a minority interest in

black-controlled GovChat

Motty Sacks appointed as

Chairman of GovChat

Eldrid Jordaan, Founder & CEO of GovChat with Motty Sacks, Chairman of

Capital Appreciation

THE OPPORTUNITY

11

c. 11 million clients

Sought to be low-cost

provider

Vitality success demonstrates

the power of user experience,

product bundling and data

analytics

Reportedly 4 minutes to

on-board a client

Cost of delivery

Customer

experience

Focused strategy

Profitable, narrow

market segment

Bespoke offering

User experience

Pain points

User experience

Simplicity of offering

and value

proposition

TECH-ENABLED NEW ENTRANTS IN SOUTH AFRICA

South Africa’s newest bank,

aiming to launch this year

Focus on cost

User experience

Innovation

12

CHARACTERISTICS OF FUTURE PAYMENTS GLOBALLYInnovations will make payments more cashless and invisible, also enabling data driven engagement platforms for clients

LESS CASH INVISIBLE PAYMENTS PAYMENTS AS A MEANS

OF ENGAGMENT

THE VALUE OF DATA LOANS MADE EASIER TRANSACTION COSTS

DECLINING RAPIDLY

SOURCE: DERIVED FROM WORLD ECONOMIC FORUM REPORT

13

ELECTRONIC PAYMENTS CONTINUE TO GROW AND MUTATE IN RESPONSE TO CONSUMER BEHAVIOUR

• Increasing adoption and

comfort with card-based and

digital currency:

• Mobile

• Govt. payment distribution

(SASSA)

• Formalization (India)

• Proliferation of payment

methods (incl. wearables)

DIGITAL CURRENCY

• Growing middle-class

in emerging economies

across Africa

• Digital awareness and

engagement increasing

MIDDLE CLASS

• Consumer comfort with data sharing

leads to integration with payments

• New products

• New credit tools

• Payment linked to and with content

BIG DATA

• Regulation and security

driving installation and

acceptance of devices

• Forcing accountability

• Encouraging digitization

REGULATION

PAYMENTS

REG TECH

DIGITAL CHANNELS

PLATFORMS

14

MOVE TO ELECTRONIC PAYMENTS CONTINUESSouth Africa

SOURCE: PASA ANNUAL REPORT 2017

RE

TA

IL P

AY

ME

NT

SC

AR

D A

CT

IVIT

Y

In 2016, card-based

payments represented 56%

of transaction volume

Combined Card Volumes Combined Card Values

CARD45%

EFT CREDIT

19%

AEDO0%

EFT DEBIT15%

CLC2%

NAEDO5%

RTC0%

ATM14%

VOLUMES2010

CARD60%

EFT CREDIT

13%

AEDO1%

EFT DEBIT10%

CLC0%

NAEDO4%

RTC1%

ATM11%

VOLUMES2017

MIL

LIO

NS

(R

AN

DS

)

MIL

LIO

NS

(T

RA

NS

AC

TIO

NS

) CAGR CAGR

15

CLOUD OPPORTUNITY IS MASSIVE

• According to IDC, spending on public cloud

services in South Africa will nearly triple over

five years from R4.3-billion in 2017 to R11.5-

billion in 2022

• The adoption of cloud services will generate

112 000 net new jobs in South Africa by the

end of 2022

• The new AWS “infrastructure region” will be

launched in the first half of 2020

• African organisations already moving to AWS

• Enterprises such as Absa, Investec,

MedScheme, MiX Telematics, Old

Mutual, Pick n Pay, Standard Bank,

Travelstart, and Vodacom already use AWS

• Microsoft Azure opened its data centres in

Cape Town and Johannesburg in March 2019

AWS33%

GOOGLE6%

AZURE13%

OTHERS48%

CLOUDMARKETSHARE

16

CLOUD PLATFORMS INDESPENSIBLE

Vodacom is starting to move its services to the AWS cloud already but a lot of services,

especially where there are latency issues, will be functional early next year once the AWS

region is fully operational in South Africa.

“

”Shameel Joosub

CEO of Vodacom

For Standard Bank Group to remain a leader in African financial services, we recognize we need

to adopt a cloud-first approach to our business,” said Group CEO Sim Tshabalala. "AWS Cloud

technology will create a springboard for Standard Bank Group, helping us to rapidly roll out our

digitization and data strategy to better cater to customers whose needs are constantly

evolving."

He says the move will allow the bank to "build Africa’s financial services organization of the

future and to be positioned as more than a bank” using AWS’s agility and security combined

with Standard Bank’s "customer obsession.

“

”

Sim Tshabalala,

Group CEO of

Standard Bank

…AWS is the world leader

17

ABOUT OUR INVESTMENTS

18

CONSISTENT EXECUTION STRATEGY

INNOVATE

State of the art proprietary technology

platforms for services

Entrepreneurial culture

Hardware agnostic

Integrate seamlessly with legacy

systems

Add value

Grow market

EXECUTE

Service excellence

Alleviate pain points

User experience

Create ecosystem

Engender trust

Act as an innovation

catalyst for clients

Work with financial institutions

PARTNER

Create ecosystems for

collaboration

B2B2C

Deliver solutions to help clients

realise their strategy

Focus on infrastructure

B2B

Strategy has delivered substantial growth over last 18 months and our objectives remain unchanged since initially formulated

19

PAYMENTS & PAYMENT INFRASTRUCTURE SEGMENT

BLUE CHIP

CLIENTS

Provide and operate

payment and processing

solutions for leading brands

and International Banks

PROPRIETARY

PLATFORM

Unique, proprietary technology

platform enabling rapid

development and implementation

of customised corporate solutions

across a diverse range of sectors

END-TO-END

SOLUTIONS

Design, develop, implement and

manage innovative, end-to-end

solutions thereby enhancing and

strengthening the relationships

between banks, corporates and

their clients

COMPREHENSIVE

OFFERINGS

Available on a turn-key all-

inclusive basis or

à la carte

UNIVERSAL

ACQUIRING

Pioneer of “Universal

Acquiring” by supporting

one uniform infrastructure

for financial and

non‐financial transactions

Manages POS terminal estates at scale

Enables banks and corporates to extract additional value and differentiate at the point of acquiring

20

PAYMENTS REVENUE MODEL

MAINTENANCE

& REPAIRS

• Generates monthly

recurring revenue

depending on level

and scope of services

contracted

TRANSACTIONS

• Variable based on

transaction type and

value of transaction

LICENSING &

SOLUTIONS

• Generates monthly

recurring revenue

dependent on

solution

• Flat fee

• Commission

POS ESTATE

MANAGEMENT

• Generates monthly

recurring revenue

depending on level

and scope of services

contracted

POS DEVICES

• Terminal sales

generate gross profit

• Rentals generate

monthly recurring

revenue

• Relationship with

major clients subject

to long-term master

supply agreements

Predictable but

lumpy

Recurring revenue

tied to the size of

the estate

Recurring revenue

and predictable

Unlimited, subject

to established

economic models

Unlimited

21

EXTENSIVE RANGE OF DEVICES…

Devices range in functionality, price and margin

…AND MORE TO COME

22

DASHPAY – INNOVATION IN PROCESSING

Creating new value opportunities through platform ecosystem

New economic model – Platform economics

• Introduces brutal efficiency to transaction processing

• Universal processing - processes all transaction types on a

single platform

• Platform economics drives boundary, frictional and

transactional costs lower

• Multi-party environment leads to multi-product opportunity

• Opportunity for new B2B applications – those that don’t

exist and those that benefit from digitisation

• Opportunity to integrate multiple disparate products on

single platform

• Traditional acquiring is possible but not the focus

• To be done in cooperation with banking clients

Challenged

economic

model

Traditional

processing

BASE 24

TANDEM

POSTILLIONEV

OL

UT

ION

DASHPAY

PROCESSING

23

DASHPAY’S EVOLUTION

BANK RELATIONSHIPS

NOW^THEN*

Others in negotiation

* MAY 2017 (FIRST ACQUISITION MONTH) // ^ APRIL 2019 (LATEST TRADING MONTH) // ANNUALISED

TARGET MARKET OPPORTUNITIES

Small independent

merchants

Small independent

merchants

Larger merchants

Enterprise customers for

B2B and B2B2C

deployment

NOW^THEN*

PRODUCT OFFERING

Multiple products and

services

Acquiring is now only

ancilliary

Traditional

Merchant

Acquiring only

NOW^THEN*

Material progress has been made in readying Dashpay for mass deployment

24

DASHPAY OPERATIONAL UPDATE

* MAY 2017 (FIRST ACQUISITION MONTH) // ^ APRIL 2019 (LATEST TRADING MONTH) // ANNUALISED

THEN* NOV ‘18

R500m

R1.4bn

R2.2bn

NOW^

340%

THEN* NOV ‘18

1.6m

4.1m

5.7m

NOW^

Gross Tx Value Gross Tx Volume

Transaction (Tx) Data

180%

57%

250%

156%

39%

18 months 6 months 18 months 6 months

25

DASHPAY

Expanding client and brand penetration

26

SOFTWARE & SERVICES SEGMENT – SYNTHESIS

BLUE-CHIP CLIENTS

Absa, Investec, Standard Bank, HSBC,

Nedbank CIB, Citibank, RMB, Capitec,

Afgri and others

Leading provider of technology products and solutions within the financial services industry

CLIENT CENTRIC

Delivering the highest business

value with a strong service ethic

THOUGHT LEADERS

Acquiring and retaining the best

software development skills

FOCUSED

Focus in the financial

services sector

EXPERIENCED

Highly innovative team with track

record of only successful delivery

STRATEGIC RELATIONSHIPS

Key partnerships with Amazon’s

AWS, the top rated provider of cloud

services globally

27

OPERATING UNITS WITHIN SYNTHESIS

Cloud transformation to assist the

Enterprise in becoming cloud ready,

execute mass migrations and harness

the benefits of public cloud platform

First AWS Advanced Consulting

partner in MEA

CLOUD

CONSULTING

Delivering exceptional end-user client

experience web and mobile touch points

for financial services institutions while

maintaining information security and

transactional integrity

DIGITAL

CHANNELS

Integration to enable regulatory

reporting solutions for SARS (tax) and

SARB (balance of payments), payment

processing and exchange connectivity

PLATFORM INTEGRATION

PRODUCTS

SYNTHESIS LABS

Artificial intelligence, blockchain, machine learning

SYNTHESIS ACADEMY

Technical and cloud training tailored to organisational objectives

28

SYNTHESIS ACADEMY

Technical and cloud training tailored to organisational objectives

“Synthesis is a learning organisation

with deep technical and business

skills. We are well positioned to

provide both these practical and

theoretical skills to our customers. By

providing scaled learning we can

address the vast technical skills

shortage in the South African

technology sector “

Darren Bak, Head Synthesis Academy

“

”

• Outcomes-driven onsite or e-Learning LMS

based training

• Practical Labs to move from theory to

application

• 120+ Amazon Web Services (AWS)

certifications

• Tap into real insight and experience to fast-

track projects

29

GLOBAL STABILITY – DISCOVERY VITALITY USE CASE

VITALITY STATS

140m

Synthesis delivers

advanced support and

global scalability to

Discovery Vitality Group

15

Insurance customers

4m

Countries

Discovery Vitality Group has built a

massively flexible and scalable platform on

AWS Cloud for its global Vitality program

using a microservices architecture

Synthesis provides a managed service

offering to meet the objectives of security,

standardisation, stability and performance on

this platformWorldwide members

30

REG TECH – REPORTING & COMPLIANCE

One of the largest

authorised Forex dealers

in the country, benefits

from an improvement to

speed, accuracy and

stability of reporting, and

ability to quickly and

easily respond to future

regulatory changes

Synthesis helped one of

SA’s biggest banks to

upgrade their Balance of

Payments (BoP)

Reporting system

The new software is

replicable and scalable,

offering opportunities for

the bank to roll it out into

other SADC markets in

which it operates, with

support for multiple

regulators

Use of the Synthesis

RegTech product allows

dealers in foreign

currency to easily ensure

regulatory compliance

31

FINANCIAL PERFORMANCE

32

FINANCIAL PERFORMANCEPayments & Payment Infrastructure Division

CAGR

Revenue 60%

EBITDA 71%

GROWTH

Revenue 13.2%

EBITDA (10.9%)

Operating profit (14.4%)

44

.2

14

0.7

19

6.1

20

2.9

41

5.1

46

9.9

9.4 2

4.9 42

.1

77

.5

15

1.7

13

5.5

1.1 1

0.6 22

.7

60

.9

14

9.5

12

7.9

0

50

100

150

200

250

300

350

400

450

500

FY '14 FY '15 FY '16 FY '17 FY '18 FY '19

Revenue EBITDA Operating Profit

33

3200040000

53000

77000

95000

April '17 Sep '17 Mar '18 Sep '18 Mar '19

TERMINAL ESTATE ANALYSISTerminals at period end

OWNED BY CLIENTS ACTIVE – IN MARKET AWAITING DEPLOYMENT

• Number of terminals delivered to

clients grew by 24% in last 6

months and 68% during the year

• Paid for at time of delivery

• Start to generate recurring

revenue once activated

• Number of terminals in use grew

by 23% in last 6 months and 78%

during the year

• Includes terminals subject to

rental contracts

• Rentals may be renewed upon

expiry or replaced with owned

terminals

• New terminals, once imported,

are prepared for client and

readied for deployment

• Represents prospective recurring

revenue once activated

• Includes ”rotating stock” for

backup and replacement

32000

48000

76000

103000

128000

April '17 Sep '17 Mar '18 Sep '18 Mar '19

16000

22000

38000 40000 41000

April '17 Sep '17 Mar '18 Sep '18 Mar '19

TOTAL TERMINAL ESTATE

• Number of terminals in clients’

hands grew 18% in the last 6

months and 52% during the year

• Includes terminals subject to

rental agreements

49000

60000

92000

118000

140000

April '17 Sep '17 Mar '18 Sep '18 Mar '19

34

41

.6 46

.1 51

.9

77

.6

93

.1

13

7.8

12

.6

15

.9 19

.8

29

.9 33

.9

44

.0

12

.4 15

.6

19

.4 29

.4 33

.2

42

.1

0

20

40

60

80

100

120

140

160

FY '14 FY '15 FY '16 FY '17 FY '18 FY '19

Gross Revenue EBITDA Operating Profit

FINANCIAL PERFORMANCESoftware & Services Division

CAGR

Revenue 27%

EBITDA 28%

PERIOD GROWTH

Revenue 48.0%

EBITDA 31.0%

Operating profit 26.7%

EBITDA and Operating Profit is

after expensing additional

ramp-up costs related to AWS

Cloud Migration projects, the

benefits of which will accrue in

subsequent periods

The benefit of last year’s

expenditures is visible in this

year’s growth

35

GROUP SUMMARISED STATEMENT OF COMPREHENSIVE INCOME

(R million) 31 March 2019 31 March 2018% increase /

(decrease)

Revenue 607.7 508.2 19.6%

Operating expenses 128.0 80.0 59.9%

EBITDA 159.5 176.8 (9.8%)

Trading profit 173.2 187.2 (7.5%)

Net finance income 37.7 38.7 (2.5%)

Profit before taxation 173.8 200.0 (13.1%)

Profit after tax 124.6 142.9 (12.8%)

Normalised profit after tax 134.7 152.3 (11.6%)

Headline earnings per share (cents) 8.33 9.53 (12.6%)

Normalised headline earnings per share (cents) 9.01 10.12 (11.0%)

Cash earnings per share (cents) 10.93 7.30 49.8%

Number of shares in issue (millions) 1 555.0 1 555.0

Weighted average number of shares in issue

(millions)1495.5 1505.4

Number of shares in issue, net of treasury shares

(millions)1 491.4 1499.4

Strong growth from all

divisions

Includes c.R19m of

incremental capacity and

support-related

expenditure

Includes R2.4m loss, after

tax, attributable to

Resonance Australia

Purchased 8.02m treasury

shares

Total number of treasury

shares is 63.6m

After reversal of

amortisation of intangibles

arising from acquisitions

Development of new

innovative products and

building of operating

capacity

Effective asset

management

36

DIVISIONAL REVENUE COMPOSITION

(R million) 31 March 2019 31 March 2018 Growth

Payments & Payment Infrastructure division

Rental income 79.3 82.4 (3.8%)

Maintenance and support service fees 73.9 45.1 63.9%

Sale of terminals 290.9 276.0 5.4%

Transaction fees 15.1 11.6 30.2%

Other revenue * 10.7 - -

Total 469.9 415.1 13.2%

Software & Services division

Services and consultancy fees 102.2 71.3 43.3%

Licence and subscription fees 32.9 18.8 75.0%

Hardware 2.7 3.0 (10.0%)

Other turnover - - -

Total 137.8 93.1 48.0%

Total revenue 607.7 508.2 19.6%

Geographic region

South Africa 593.6 496.3 19.6%

Rest of Africa and Indian Ocean Islands 14.1 11.9 18.5%

Total revenue 607.7 508.2 19.6

Recurring income represents approximately 47.4% of total revenue in 2019 (2018: 42.8%)

* IN FY2018 REFLECTED AS OTHER INCOME

37

CONDENSED GROUP STATEMENT OF FINANCIAL POSITION AT 30 SEPTEMBER 2018

(R million) 31 March 2019 31 Mar 2018

ASSETS

Goodwill 728.6 728.6

Intangible assets 62.3 71.5

Other non-current assets 72.2 64.3

Non-current assets 863.1 864.4

Cash and cash equivalents 611.2 513.2

Other current assets 70.3 94.1

Total assets 1544.6 1 471.7

EQUITY AND LIABILITIES

Equity 1447.1 1 392.3

Non-current liabilities 34.6 35.7

Current liabilities 62.9 43.7

Total equity and liabilities 1544.6 1 471.7

NAV per share (cents) 93.1 89.5

Cash available per share (cents) 39.3 34.2

Available for investment

in organic growth and

acquisition opportunities

38

CASHFLOW (KEY FEATURES)

(R million) 31 March 2019 31 March 2018

Cashflow from operations 212.7 166.3

Changes in working capital 51.7 (12.6)

Acquisition of property, plant and equipment (16.5) (4.8)

Acquisition of subsidiaries net of cash acquired - (553.0)

Acquisition of associate - (30.2)

Purchase of 8.0 million treasury shares (2018: 55.6 million) (7.1) (41.4)

Repayment of loans (3.0) (14.9)

Dividends paid (63.6) (30.4)

Cash & cash equivalents at period end 611.2 513.2

Cash conversion ratio of

112.8% of Trading Profit

Effective asset

management

Total of 63.6 million

shares at an average price

of 76 cents per share

39

PROSPECTS

40

▪ Accelerated growth in POS device estate as

penetration increases in banking as well as

SME sector

▪ Introduction of new platforms will generate

new growth

▪ New product pipeline

PAYMENTS & PAYMENT INFRASTRUCTURE SOFTWARE & SERVICES

▪ Strong and growing adoption of cloud-based

solutions

▪ Regulatory compliance requirements

▪ Further international expansion, especially

African hub

▪ Significant opportunity in new technologies

• A broad range of organic as well as acquisitive growth opportunities available to CAPPREC

• Acquisition activity will depend on strategic fit as well as valuations

• Political environment and economic climate are impacting our clients and remain present in our planning

GR

OW

TH

OP

PO

RT

UN

ITIE

S

PROSPECTSCapital Appreciation is well capitalised, with the management skills and

technology to drive it’s growth strategy

41

OUR INVESTMENT CASE

• Well-positioned in an industry with healthy organic growth prospects

• A trusted partner to a strong network of large financial institutions

• Clients are well capitalised and established

• Clients already have a presence in Africa – providing the potential ability for CAPPREC to expand regionally with them

• Founders with a very strong network of relationships on which to build future business

• Well-established FinTech subsidiaries with strong track records

• Innovation

• Quality execution

• Financial performance

• Subsidiaries have strong organic growth prospects and acquisition opportunities

• Strong Group balance sheet with adequate headroom for organic and acquisitive growth

• Subsidiaries are highly cash generative with cash conversion exceeding 100%

• Our products and services are targeted at mission-critical applications

42

T H A N K Y O U

43

ANNEXURE

44

COMPARABLE INTERNATIONAL COMPANIESIllustrative of breadth and depth of international “Payments” marketplace

NETWORKS

$370 290 // 23.1x

$264 043 // 25.9x

POS / CASH

DISBURSEMENT

$5 288 // 10.9x

$913 // 10.4x

$1 423 // 7.6x

$273 // 13.8x

MARKET CAPITALISATION (IN US $ MILLIONS) // CY19E EV/EBITDA AS OF JUNE 6 2019

MERCHANT ACQUIRORS

$26 048 // 13.2x

$8 857 // 13.9x

$4 672 // 8.5x

$24 917 // 18.0x

$2 201 // 12.3x

$203 // NA $22 684 // 18.1x

$38 792 // 21.6x

$2 503 // 19.5x $651 // 19.5x

EMERGING PAYMENTS

$133 501 // 27. 5x

$1 086 // 3.8x

$30 226 // 72.4x

$305 // NA

$20 680 // 24.2x

$865 // 14.2x

$20 680 // NM

$7 964 // 13.4x

$4 225 // NM

45

PAYMENTS & PAYMENT INFRASTRUCTUREHistorical performance

(R million) 2014 2015 2016 2017 2018 2019CAGR

’14 – ‘19

Revenue 44.2 140.7 196.1 202.9 415.1 469.9 60%

EBITDA 9.4 24.9 42.1 77.5 151.7 135.5 71%

Margin

EBITDA 21.3% 17.7% 21.5% 38.2% 36.5% 28.8%

Growth

Revenue 218.3% 39.4% 3.5% 104.6% 13.2%

EBITDA 164.9% 69.1% 84.1% 96.1% (10.9%)

46

SOFTWARE & SERVICESHistorical performance

(R million) 2014 2015 2016 2017 2018 2019CAGR

‘14 – ‘19

Revenue 41.6 46.1 51.9 77.6 93.1 137.8 27%

EBITDA 12.6 15.9 19.8 29.9 33.9 44.0 28%

Margin

EBITDA 30.3% 34.5% 38.2% 38.5% 36.4% 31.9%

Growth

Revenue 10.8% 12.6% 49.5% 20.0% 48.0%

EBITDA 26.2% 24.5% 51.0% 12.4% 31.%

47

PERIOD ON PERIOD SECTOR PERFORMANCEFinancial performance

(R million) H1 ‘18 H2 ‘18 H1 ‘19 H2 ‘19

Revenue 173.8 241.3 253.6 216.3

EBITDA 57.3 94.7 70.9 64.6

Margin

EBITDA 33% 39% 28% 30%

PA

YM

EN

TS

&

PA

YM

EN

T

INF

RA

ST

RU

CT

UR

E

(R million) H1 ‘18 H2 ‘18 H1 ‘19 H2 ‘19

Revenue 37.6 55.5 61.8 76.0

EBITDA 10.8 22.8 19.3 24.7

Margin

EBITDA 29% 41% 31% 33%

SO

FT

WA

RE

&

SE

RV

ICE

S

48

GLOSSARY

AEDO Authenticated early debit order

AI Artificial intelligence

ATM Automated teller machine

AWS Amazon Web Services

B2B Business to business

B2B2C Business to business to consumer

B-BBEE Broad-Based Black Economic Empowerment

Bn Billion

CAGR Compound annual growth rate

CAPPREC Capital Appreciation Limited

Cash EPS Cash flow from operations, less taxation paid, divided by weighted

average number of shares in issue

CLC Code line clearing

CRM Customer relationship management

EBIT Earnings before interest and tax

EBITDA Earnings before interest, tax, depreciation and amortisation

EFT Electronic fund transfer

EMV Europay, Mastercard, Visa

EPS Earnings per share

FinTech Financial technology

FY Fiscal year

GTV Gross transaction value

HEPS Headline earnings per share

ISO Independent sale organisation

IT Information technology

M Million

NA Not available

NAEDO Non-authenticated early debit order

NAV Net asset value

NFC Near field communication

NHEPS Normalised headline earnings per share

NM Not meaningful

POS Point of sale

R Rand

R&D Research and development

REIT Real Estate Investment Trust

RTC Request to credit

SA South Africa

SARB South African Reserve Bank

SARS South African Revenue Services

SME Small and medium enterprise

Tx Transaction

US$ United States Dollar

ZAR South African Rands

49

For the purposes of this notice, this presentation (the “Presentation”) shall mean

and include the pages and slides that follow, its contents including the

information forming part thereof or referred to in the Presentation, the oral

presentation of the pages and slides by Capital Appreciation Limited

("CAPPREC") its officers, directors, employees and/or advisers, any question-

and-answer session that follows that oral presentation, hard copies of this

document and any materials and/or information (in whatever form) distributed at,

or in connection with, that oral presentation. By attending the meeting at which

the Presentation is made, or by reading the Presentation slides, you will be

deemed to have (i) agreed to all of the following restrictions and made the

following undertakings; and (ii) acknowledged that you understand the legal and

regulatory sanctions attached to the misuse, disclosure or improper circulation of

the Presentation.

This Presentation is provided to you solely for information purposes and does

not constitute, and may not be relied on in any manner as, legal, tax or

investment advice and/or an investment recommendation.

This Presentation is not directed to, or intended for distribution to or use by, any

person or entity that is a citizen or resident of, or located in, any locality, state,

country or other jurisdiction where such distribution or use would be contrary to

law or regulation or which would require any action (including registration or

licensing) within such jurisdiction for such purpose.

This Presentation is not, and should not be construed so as to constitute, an

offer of securities for sale or acquisition in any jurisdiction, including in the

United States, Canada, Australia or Japan.

This Presentation does not constitute or form part of, and should not be

construed as, an advertisement, invitation, solicitation and/or offer to sell, issue,

purchase or subscribe for, any shares and/or securities in any jurisdiction, or an

inducement to enter into investment activity. This Presentation does not

constitute an offer to the public for the sale of or subscription for, or an

advertisement or the solicitation of an offer to buy and/or subscribe for, securities

as defined in the Companies Act, 71 of 2008 ("the Act") or otherwise and will not

be distributed to any person in South Africa in any manner which could be

construed as an offer to the public in terms of the Act. Furthermore, this

Presentation does not constitute an advertisement or a prospectus registered

and/or issued under the Act.

The information contained herein has been prepared using information available

to CAPPREC at the time of preparation of this Presentation. External or other

factors may have impacted on the business of CAPPREC and the content of this

Presentation, since its preparation. In addition all relevant information about

CAPPREC may not be included in this Presentation.

The information in this Presentation has not been independently verified. No

representation or warranty, expressed or implied, is made as to the accuracy,

completeness or reliability of the information contained herein and no reliance

should be placed on such information.

Neither CAPPREC, its officers, directors, employees nor any of its advisers,

connected persons or any other person accepts any

liability for any loss howsoever arising, directly or indirectly, from this

Presentation or its contents.

This Presentation contains forward-looking statements, including in relation to

the prospects of CAPPREC, which include all statements other than statements

of historical facts, including, without limitation, any statements preceded by,

followed by or including the words “targets”, “believes”, “expects”, “aims”,

“intends”, “may”, “anticipates”, “would”, “could” or similar expressions or the

negative thereof. Forward-looking statements by their nature involve known and

unknown risks, uncertainties, assumptions and other important factors because

they relate to events and depend on circumstances that might occur in the future

whether or not outside the control of CAPPREC.

Such factors may cause actual results, performance or achievements to be

materially different from future results, performance, developments or

achievements expressed or implied by such forward-looking statements. Such

forward-looking statements are based on numerous assumptions regarding

present and future business strategies, prospects and the relevant operating

environment in the future.

Accordingly, no assurance is given that any such forward-looking statements will

prove to have been correct. These forward-looking statements speak only as at

the date of this Presentation. CAPPREC expressly disclaims any obligation or

undertaking to disseminate any updates or revisions to any forward-looking

statements contained herein to reflect any change in its expectations with regard

thereto or any change in events, conditions or circumstances on which any of

such statements are based.

IMPORTANT NOTICE, DISCLAIMER AND BASIS OF PRESENTATION