For the 6 months ended

30 September 2020

INTERIM RESULTS PRESENTATION

2

OUTLINE

Introduction

Highlights for the period

The opportunity

Financial performance

About our investments

Prospects

1

2

3

4

5

6

3

CAPITAL APPRECIATIONWe are a financial technology company

that seeks to serve or partner with

established and emerging financial

institutions and other large corporates

We endeavour to deliver innovation

and value to our clients and their

customers

PAYMENTS DIVISION

SERVICES DIVISION

CTA ENTERPRISE

DEVELOPMENT

35% interest

4

COVID-19

Group companies were classified as

essential services and were fully

operational throughout levels 1 – 5 of

lockdown

ORGANISATIONAL RESPONSE

Our team’s health was our first priority

Remote work of all non-essential staff

Essential staff had protective gear and

we implemented social distancing

Regular decontamination of work area

All staff remained employed and

fully remunerated

All suppliers paid on time

OPERATIONAL RESPONSE

Client service was our priority

Prior disaster preparedness and

infrastructure investment paid

dividends

All services continued uninterrupted

Used our expertise to help Government

address the crisis – GovChat led

initatives

5

MACRO ENVIRONMENT

All sectors of economy impacted

Consumer confidence shattered

Serious unemployment crisis

Non-essential retail impacted markedly,

slow recovery

Many small businesses did not reopen

and many still struggling

SILVER LINING & OPPORTUNITY

FOR CAPITAL APPRECIATTION

New technology solutions needed to

address many key issues that have

arisen

- Social distancing

- Remote work

- Remote customer engagement

- Remote learning

- Retail and commerce

Era of digitalisation has been yanked

forward and likely to accelerate

Increased impetus to reduce cash

transactions

Increased focus on financial inclusion

IMPACT OF COVID-19Long-tail effects of COVID-19 amplify

positive secular trends already driving

Capital Appreciation’s businesses

6

Note: Based on Nedbank POS & digital payment data (client turnover). Numbers above the graphs show Rand turnover volumes as percentage of March.

Mar Apr May Jun Jul

Total

100% 47% 73% 82% 89%

Mar Apr May Jun Jul

Telecoms

100% 57% 111% 122% 141%

Mar Apr May Jun Jul

Retail shops

100% 18% 86% 119% 106%

Mar Apr May Jun Jul

Wholesale stores

100% 47% 103% 103% 111%

Mar Apr May Jun Jul

Auto

100% 30% 66% 82% 95%

Mar Apr May Jun Jul

Healthcare

100% 62% 88% 81% 91%

Mar Apr May Jun Jul

Supermarkets

100% 81% 87% 81% 86%

Mar Apr May Jun Jul

Education

100% 54% 56% 60% 74%

Mar Apr May Jun Jul

Entertainment

100% 10% 12% 20% 81%

Mar Apr May Jun Jul

Restaurants

100% 2% 11% 60% 74%

Mar Apr May Jun Jul

Hotel & lodgings

100% 9% 8% 14% 22%

Mar Apr May Jun Jul

Airlines

100% 2% 1% 9% 17%

COVID IMPACT ON PAYMENT SERVICES ACTIVITY

Prior to lockdown

Level 5

Level 3

Level 4

Per Nedbank’s public disclosure,

only Telecom sector relatively

unharmed

Indicators

7

COVID IMPACT ON PAYMENT INFRASTRUCTUREACTIVITY 0%

20%

40%

60%

80%

100%

120%

140%

160%

H2'20 Avg April May June July Aug Sept Oct

Terminal Handling

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%

H2'20 Avg April May June July Aug Sept Oct

RepairsCapacity Utilisation – reflects

reduced activity and delayed

business

Indicators

Below pre COVID activity

Prior to lockdown

Exceeds pre COVID activity

88

CAPITAL APPRECIATION’S POSITIONING

While challenges exist and operating

conditions are tough, CAPPREC’s

business is resilient

Healthy balance sheet, enables management to focus on execution

Experienced management team

Deep domain expertise and proprietary technologies in high demand areas

Accelerating need for economy to digitalise

Client exposure mostly to larger, more resilient and essential businesses

Manageable exposure to “at risk” businesses

Asset light business model with efficient working capital management

9

GROUP FINANCIAL HIGHLIGHTS

23.4% increase in Trading Profit

reflects good growth and effective cost

containment in a very challenging

market

H1 Fiscal 2021 -

6 Months Ended 30 September 2020

EBITDA R 81.6m

Trading profit R 84.2 m

Headline earnings R 54.2 m

Profit

Revenue R 323.7 m

Revenue

Payments Division R 215.3 m

Services Division R 108.4 m

20.2%

23.4%

7.8%

15.0%

15.6%

13.8%

EPS 4.45 cents

Dividends 2.50 cents

Earnings & Dividends

Capitalisation & Cash resources

Equity R 1 332.0 m

Available cash per share 37 cents

Cash available for investment R 488.4 m

11.1%

12.9%

Noteworthy observations

Cash conversion – 78% of Trading Profit

Interest income much reduced given 3% reduction in SA prime

rate and lower cash balance post 2019 repurchase transaction

Items impacting results

Specific Share Repurchase and other related

transactions concluded in September 2019

HEPS 4.45 cents 29.7%

1010

DIVISIONAL CONTRIBUTION

REVENUE

Group Up 15.0%

Group headcount grew to 324

(September 2019: 298)

66.2%

FY19 FY20

Payments

Services

66.5%

33.8%33.5%

EBITDA

Group Up 20.2%

64.5%

FY19 FY20

Payments

Services

70.3%

35.5%

29.7%

+ 1

3.8

%+

15

.6%

+ 3

.1%

+ 3

3.0

%

11

PAYMENTSHIGHLIGHTS

✓ The number of terminals sold period on period grew by 17.6%

✓ More than 202 000 terminals in the hands of clients (September

2019: 154 000), up 31% YoY and up 9% since March

✓ Continued to gain market share

✓ Strong pipeline with portfolio of device form factors

✓ Transitioned entire Payment Services activity to new platform

✓ Expanded portfolio of transaction solutions

✓ Enhanced capability of solutions

✓ Android solutions warmly received with devices already in the hands

of merchants

✓ Increased operational capacity

Payments Division well positioned

to capitalise on anticipated

evolution in the Payments

landscape

12

SERVICESHIGHLIGHTS

✓ Strengthened relationship with existing clients, new contract wins

✓ New blue-chip client relationships established

✓ Secured additional AWS accreditation

✓ Continued to advance AWS leadership

✓ Further diversified revenue stream

✓ Increased operational capacity, hiring commitment prior to COVID

✓ Additional partnerships with complementary technology platforms

and solutions in pipeline

✓ Recognised as Social Impact Partner of the year by AWS

✓ AWS SA-based cloud region launched April 2020

Secular trends in Cloud, AI,

RegTech and digitalisation are

tailwinds for Synthesis’ business

13

THE OPPORTUNITY

14

2020 FUTURE OF FINTECH CONFERENCE

“The Covid-19 pandemic accelerated the adoption of digital

tools in financial services by 3 to 5 years — and the shift to

digital will continue long after a vaccine becomes available.”

Held week of 16 November 2020 Anand Selva, CEO of US

consumer banking at Citigroup,

defined the bank's outlook as

“physical-light and digital-heavy,”

and stated that “customers are adapting

to a different means of banking

because of the lockdowns and the

commuting concerns. [...] We believe

digital is the way to go [for banking].”

15

COMPETITIVE POSITIONING OF FINANCIAL SERVICES PARTICIPANTS IS TIED TO TECHNOLOGY ENABLEMENT

INVISIBLE

INSIGHTS-DRIVEN

CONNECTED

PURPOSEFUL

Collaborator

Bank

Consumer

Source: Forrester Research

RE

GU

LA

TIO

N

16

DIGITALISATION IS A TOP 3 PRIORITY

Which of the following initiatives are likely to be your

organization’s top business priorities over the next 12 months?

% indicating critical/high priority

Rank Pre COVID % Post COVID %

1 Grow revenue 42% Grow revenue 38%

2

Improve the experience of

our business ecosystem

partners

39% Reduce costs 36%

3 Reduce costs 34%Accelerate our shift to digital

business35%

4

Better comply with

regulations and

requirements

34%Improve our ability to

innovate32%

5Improve our

products/services34%

Better comply with

regulations and requirements31%

Base: Banking Purchase influencers (past 12 months/next 12 months), Purchase influencers (past 12 months/next

12 months) who answered during COVID-19; Sources: Business Technographics Priorities and Journey COVID-19

Recontact, 2020 (April 29 – May 22); Business Technographics Priorities and Journey Survey, 2020.

Source: Forrester Research

TOP FIVE BANKING BUSINESS PRIORITIES

Was not even Top 10 prior to

COVID-19

17

MARKET FOR CLOUD IS HUGE . . . . . . SA MARKET EXPECTS 30% 4 YEAR CAGR

$11.6bnAWS Revenue, grew 29% YoY (CY’20 Q3)

Estimate Microsoft Azure Revenue, up 48% YoY (CY’20 Q3)

SA cloud market in 2023, expected to grow at c.30% over next 4 years

$6.3bn

R22bnSource: BMIT SA Cloud Computing Overview & Market Sizing 2019

18

Cash is increasingly unwelcome, limit

spread of COVID-19

Increasing interest by merchants in

digital payment solutions

Merchants increasingly interested in

Value Added functionality

Contactless payment – per Mastercard

survey 46% of consumers change “Top

of Wallet” card

Mobile payment

QR Code payment

eCommerce

Technology is solution to financial

inclusion

COVID’S LONGER-TERM IMPACT ON PAYMENTS

CTA Payments positioned

to benefit

19

Source: Global Payments Map by McKinsey

Emerging markets

100 100 97 95

8693

999689 86 87

74 72

41

Indonesia India Mexico Argentina Brazil Malaysia China

2010 2020

Mature markets

79

59

66

51 53 5552

5654

3934

2824 23

149

Japan Singapore Korea US Finland UK Netherlands Sweden

2010 2020

COVID CRISIS LIKELY LEADS TO FURTHER DECLINE IN CASH USAGECash usage by region, % of

cash used in total transactions

by volume

2020

PAYMENTS IN SOUTH AFRICA

Mix of consumer payments instruments

(value and number of transactions)

Cash is big and continues to be a

primary source of opportunity for

digitalisation . . .

. . . particularly since there are

more than 50 million debit and

credit cards in issue

>70% of transactions done are

Cash

60 billion+ cash transactions

p.a.

Cash volumes are high for low

value payments (R100 and

less)

c.3% total card transactions

are eCommerce-related

SOURCE: GENESIS RESEARCH; MC ADVISORS

% of Value of

Consumer

Payments

Cash

Cheque

Credit Card

Credit Trans

Debit Card

Direct Debit

Cash

Cheque

Credit CardCredit Trans

Debit Card

Direct Debit

OtherOther

100%

90%

80%

70%

60%

50%

% of # Consumer

Payment

Transactions

21

394403

418

2014 2016 2018

Standalone POS devices

(No of terminals, thousands)

Breakdown of acceptance frontier by

number of stores per business segment

(2017)

The conventional

acceptance frontier is

located here

Area where innovation in

the acceptance space can

have an effect, driving

digital payments

Merchants in these sectors will be

well within the current acceptance

frontier, and should all have

access to a POS device

Informal sector

2.89 million

Small & micro business

~ 837,944 companies

Medium

~ 8,193 companies

Large &

corporate

~ 2,654 companies

Source: SA payments statistics, BIS, 2019

DIGITAL ACCEPTANCEMarket opportunity of more than 800 000

payment acceptance devices in South

Africa alone . . .

. . . with many more across Africa

• Standalone

• Multilane / Integrated

• Mass market

22

5 10 15 5 25 30 35

AUSTRALIA

TURKEY

SPAIN

FRANCE

UK

ITALY

U.S.

CANADA

BRAZIL

SOUTH AMERICA

GERMANY

MEXICO

CHINA

RUSSIA

INDIA

SOURCE: BANK OF INTERNATIONAL SETTLEMENTS

SOUTH AFRICA’S

PENETRATION IS ONLY 4.5

Significant opportunity to

increase penetration as costs

decline and value increases

POS DEVICE PENETRATIONPOS installed devices

per 1 000 people

23

ABOUT OURINVESTMENTS

24

CONSISTENTSTRATEGY

Strategy of delivering innovative

solutions excellently has delivered

substantial growth

PARTNER INNOVATE EXECUTE

Work with financial institutions

Create ecosystems for

collaboration

B2B

B2B2C

Deliver solutions to help clients

realise their strategy

Focus on infrastructure and the

Enterprise

State of the art proprietary

technology

Entrepreneurial culture

Hardware agnostic

Add value

Integrate seamlessly with

legacy systems

Grow market

Service excellence

Alleviate pain points

User experience

Create ecosystem

Act as a innovation catalyst

for clients

Engender trust

25

PAYMENTS

Enables banks and corporates to

extract additional value and

differentiate at the point of acquiring

PROPRIETARY PLATFORM

Unique, proprietary technology platform enabling rapid development and

implementation of customised corporate solutions across a diverse range of

sectors

BLUE CHIP CLIENTS

Provide and operate payment and processing solutions for leading brands and

International Banks

END-TO-END

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

26

EXPANDED DEVICE PORTFOLIODiverse range, multiple platforms,

varied price points and expansive use

cases Proprietary – Tetra/Telium

World leaders in payment devices and technology

27

Contactless payments on any

Android device – without any

additional hardware

Halo has obtained EMV L2

Certification for Mastercard

and VISA

Developed by SynthesisContactless

Cards

Mobile

Wallets

Gadget

Wallets

is a software application that enables contactless payment acceptance on any

NFC-enabled Android device. Supports contactless cards and mobile wallets such as

Samsung Pay. Available as an SDK for App integration.

TAP ON PHONE BENEFITS

Affordable – No additional hardware needs to be purchased

Simple – No training or device maintenance required

Eco-friendly – No paper or consumables

Safe – Contactless payments are more hygienic (as per WHO)

Secure – All payments are authorised in real-time

Supported Card Schemes

Partnering with Nedbank to introduce

Tap on Phone to South Africa

28

Powered by

2929

PAYMENTREVENUEMODEL

POS DEVICES

• Terminal sales generate gross profit

• Rentals generate monthly recurring

revenue

• Relationship with major clients subject to

long-term master supply agreements

MAINTENANCE & SERVICES

• Generates monthly recurring

revenue depending on level and

scope of services contracted

POS ESTATE MANAGEMENT

• 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

Predictable but lumpy Recurring revenue and predictable

Recurring revenue tied to

the size of the estate

Unlimited, subject to

established economic models Unlimited

Indicators

Emerging, growth activities

Solid, well established business activity

30

SUBSTANTIALGROWTH IN TERMINALESTATE

Terminals at period end, in thousands

• Number of terminals in clients’ hands grew 31% YoY,

50% 3yr CAGR

• Includes terminals subject to rental agreements

TOTAL TERMINAL ESTATE

OWNED BY CLIENTS

• Number of terminals delivered to clients grew by 32%

YoY, 59% 3yr CAGR

• Paid for at time of delivery / prior to deployment

• Start to generate recurring revenue once activated

ACTIVE – IN MARKET

• Number of terminals in use grew by 32% YoY, 57% 3yr

CAGR

• Includes terminals subject to rental contracts

• Rentals may be renewed upon expiry or replaced with

owned terminals

AWAITING DEPLOYMENT

• 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

32 4053

7795

117135

154

April'17

Sep'17

Mar'18

Sep'18

Mar'19

Sep'19

Mar'20

Sep'20

3248

76103

128146

178192

April'17

Sep'17

Mar'18

Sep'18

Mar'19

Sep'19

Mar'20

Sep'20

1622

38 40 4133 30

40

April'17

Sep'17

Mar'18

Sep'18

Mar'19

Sep'19

Mar'20

Sep'20

49 60

92118

140154

185202

April'17

Sep'17

Mar'18

Sep'18

Mar'19

Sep'19

Mar'20

Sep'20

31

EVOLUTION INPAYMENT SERVICES OFFERING

Dashpay’s progress continues, even in

the face of COVID and a migration of

platform from Mercantile Bank to Absa

and Nedbank

✓ Merchant terminal count

continues to increase

✓ Transaction related

revenue continues to

increase

✓ Focus on solving complex

enterprise problems

✓ Enhanced service offering

✓ Remote Terminal

Management

System (RTMS)

✓ Vouchers

✓ Loyalty

✓ eCommerce

✓ Enhanced transacting

platform

MAY ‘17 NOV ’18

R500m

R1.4bn

R2.2bn

~ 11x in

3.5 years

180%

57%

OCT ‘19APR‘19

R2.9bn

31%

GROSS Tx VALUE

MAR ‘20

R4.9bn

69%

SEP ‘20

R5.6bn14%

3232

The solution involves a mobi app

with digital stamp card, product

reminders, store locator and

product subscriptions, as well as

a Web portal which allows

customers to register, collect and

redeem digital stamps in-store

MSD (BRAVECTO)

Key features:

• Product reminders, notifying pet owners when their pets are due for their Bravecto dosage

• Built-in store locator allows consumers to find their nearest veterinary practice

• Veterinary practices have a detailed store listing, including location, map, contact details & operating hours

• Customers to collect & redeem digital stamps based on rules linked to every purchase

• Subscriptions, allowing customers to pay monthly for their pets’ Bravectoproducts

USE CASE

3333

Allows consumers to apply for

consumer finance directly on

the terminal in-store, allowing

them to compare quotes for

short-and long-term personal

loans from R1 000

More than 50 lending sources

are canvassed

USE CASE

Consumer lending marketplace

34

USE CASE

Insurance and benefit administration

35

✓ Grow market for devices

✓ Continue to take market share in established segments

✓ Support existing clients

✓ Grow SA client base

✓ Follow clients across Africa

✓ Introduce new payment services products and solutions

✓ Develop and enhance Enterprise ecosystems

✓ Take solutions into international markets – Europe, Asia, Americas

✓ Continue to innovate

PAYMENTS’ GROWTH STRATEGYOrganic growth opportunities

are plentiful for a business with

an established base, immense

industrial knowledge and deep

technical expertise

36

SOFTWARE &SERVICES SEGMENT

Leading provider of technology

products and solutions within the

financial services industry

BLUE-CHIP CLIENTS

Absa, AFGRI, Capitec, Discovery

Vitality, Investec, Nedbank,

Standard Bank, Woolworths

Financial Services and others

CLIENT CENTRIC

Delivering the highest business

value with a strong service ethic

THOUGHT LEADERS

Acquiring and retaining the best

software development skills

FOCUSED

Initial focus on financial

services sector established

domain expertise that now

translates into new sectors

EXPERIENCED

Highly innovative team with a track

record of only successful delivery

STRATEGIC RELATIONSHIPS

Key partnerships with Amazon’s

AWS, the top-rated provider of

cloud services globally

37

OPERATING UNITS WITHIN SYNTHESIS

SYNTHESIS LABS

Artificial intelligence, blockchain,

machine learning

SYNTHESIS ACADEMY

Technical and cloud training tailored to

organisational objectives

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

Delivering exceptional

end-user client experience,

web and mobile touchpoints

for financial services

institutions while maintaining

information security and

transactional integrity

Integration to enable

regulatory reporting

solutions for SARS (tax)

and SARB (balance of

payments), payment

processing and exchange

connectivity

DIGITAL

CHANNELS

PLATFORM

INTEGRATION

PRODUCTS

(REG TECH)

• Data Intelligence is critical

to drive business success

• Our team of Machine

Learning Engineers and

Data Scientists are

enabling clients to become

truly data-driven

• Strategic use of data leads

to higher customer

satisfaction and improved

competitiveness

• 24 x 7 x 365 support

and management of

high availability cloud

and hyper-scale

infrastructure

• Remote upkeep and

strategic improvements

to alleviate client

operational concerns

• Service contracts are

long term and annuity in

nature

INTELLIGENT

DATA

MANAGED

SERVICES

(MSP)

PAYMENT TECHNOLOGY & CRYPTO • Responsible for HALO development

CLOUD

3838

South Africa Artificial Intelligence (AI) in Technology and

Communication Industry Databook Series (2016-2025) –

(Applications, Services, Hardware), March 2019

Roundup Of Machine Learning Forecasts And Market Estimates,

2020, Forbes

AWS for AI

Global Machine Learning

AWS named a Magic

Quadrant leader in Gartner's

Cloud AI Developer services

• 89% of deep learning

projects in the cloud are on

AWS

• Up to 10 times

improvement in data

scientists’ productivity

• 100s of algorithms and

models available on AWS

marketplace

CLOUD IS A CATALYST FOR THE ADOPTION OF AISynthesis is well positioned to benefit

from this trend

• Data Intelligence is a critical

to drive business success

• Our team of Machine

Learning Engineers and

Data Scientists are enabling

clients to become truly

Data-Driven

• Strategic use of data leads

to higher customer

satisfaction and improved

competitiveness

INTELLIGENT

DATA

$1.5 bn

$20.8 bn

2017 2024

44.% CAGR

$44.1m$74.7m

$651.4m

2018 2019 2025

36% CAGR

AI Spend in SA

39

SYNTHESIS MSPCAPABILITIES

• 24 x 7 x 365 support and

management of high

availability cloud and hyper-

scale infrastructure

• Remote upkeep and

strategic improvements to

alleviate client operational

concerns

• Service contracts are long

term and annuity in nature

MANAGED

SERVICES

(MSP)

Global demand for Cloud MSP

By 2024 expected to exceed $80 billion, CAGR 17.5%

International markets materially more mature than SA but demand is accelerating

Existing Synthesis delivery capability in

consultation and migration positions it

well for ongoing managed services

Build end-to-end engagement approach

Consult / Assess

/ Plan

Workload

Migration

Ongoing

Operation

Existing Synthesis delivery capability Growth

40

AWS APN SOCIAL IMPACT PARTNER OF THE YEAR AWARD

Sub Saharan Africa

4141

PRIOR CASESTUDIES

Use of AI and

machine learning in

brand management

24/7/365 cloud managed

infrastructure services

globally

RegTech &

Customer

Engagement

Financial services in

agricultural sector

Outcomes-driven

e-Learning LMS-based

training to client

organisations

SYNTHESIS ACADEMY

RegTech

Platform

Solution

AI Customer

Claims

Management

4242

Synthesis integrated Al Baraka’s

modernised banking platform with the

SARB through txstream, resulting in a

streamlined reporting solution

“I would recommend

Synthesis and txtream. The

team and solution are

definitely fit for purpose.”

Mohammed Kaka, Al Baraka

Chief Operating Officer

RESULTS

• Accurate reporting to the SARB

• Efficient storage, reporting and

audit

• Reporting that updates every

time SARB requirements

change

• Smooth UAT and sign-off by

the SARB

• Improved client experience

• Additional time for the Al

Baraka developers to focus on

their core processes

AL BARAKA BANK

STREAMLINES

SARB REPORTING

USE CASE

4343

Migration and implementation in less than

six months

“We now have utilisation

transparency, and

exceptional stability. This

has proved to be a

worthwhile investment”

Johann Barnard, UNIGRO

Chief Operating Officer

RESULTS

• Scalability

• Cost insights and control

• Advanced monitoring and

alerting

• Exceptional stability

• Improved customer

experience

• Infrastructure that supports

innovation

• While developing AWS cut

core service (EKS) cost by

50%

AFGRI eACCOUNTS

BANKING

PLATFORM

MIGRATED TO AWS

USE CASE

44

FINANCIALPERFORMANCE

45

Revenue growth – 15.6% YoY EBITDA growth – 33.0% YoY

DIVISIONALPERFORMANCE

Payments Division

R million

44

.2

14

0.7 1

96

.1

20

2.9

41

5.1 4

69

.9 50

6.2

18

6.3

21

5.3

9.4 24

.9

42

.1 77

.5

15

1.7

13

5.5

16

1.8

50

.0

66

.5

0

100

200

300

400

500

600

FY '14 FY '15 FY '16 FY '17 FY '18 FY '19 FY '20 30 Sep'19

30 Sep'20

FY Revenue FY EBITDA

H1 Revenue H1 EBITDA

46

41

.6

46

.1

51

.9

77

.6 93

.1

13

7.8

19

5.0

95

.3 10

8.4

12

.6

15

.9

19

.8 29

.9

33

.9 44

.0 53

.8

27

.2

28

.0

0

50

100

150

200

250

FY '14 FY '15 FY '16 FY '17 FY '18 FY '19 FY '20 30 Sep '19 30 Sep '20

R million

DIVISIONALPERFORMANCE

Services Division

Revenue growth 13.8% YoY EBITDA growth – 3.1% YoY

Continuing investment in

infrastructure and skills.

COVID-19 timing delays in projects

and associated revenues

FY Revenue FY EBITDA

H1 Revenue H1 EBITDA

47

(R million) 30 September 2020 30 September 2019% increase /

(decrease)

Revenue 323.7 281.6 15.0%

Operating expenses 59.2 53.6 10.4%

EBITDA 81.6 67.9 20.2%

Trading profit 84.2 68.2 23.5%

Finance income 11.1 21.8 (49.1)%

Profit before taxation 74.6 80.2 (6.9)%

Headline earnings 54.2 50.3 7.8%

Earnings per share (cents) 4.45 3.94 12.9%

Headline earnings per share (cents) 4.45 3.43 29.7%

Cash earnings per share (cents) 2.76 (0.48) > 100%

Number of shares in issue (millions) 1 310.0 1 310.0

Weighted average number of shares in issue (millions) 1 219.1 1 468.5

Number of shares in issue, net of treasury shares (millions) 1 231.2 1 244.4

Strong growth from all

divisions

Lower cash balances post

the share repurchase and

3% reduction in SA prime

rate (R7.1m)

Total number of treasury

shares is 78.8m

Includes gain on disposal

of Resonance Australia

(R8.7m)

Includes continued

development of new

innovative products and

building of capacity

245m ordinary shares

cancelled

in September 2019

GROUP SUMMARISED STATEMENT OF COMPREHENSIVE INCOME

48

(R million) 30 September 2020 30 September 2019 Growth

Payments

Terminal rental income 10.0 15.8 (36.6%)

Maintenance and support service fees from terminals 64.1 57.0 12.4%

Sale of terminals 125.3 99.0 26.6%

Transaction related income from terminals 9.0 8.3 8.4%

Other revenue 6.9 6.2 11.3%

Total 215.3 186.3 15.6%

Services

Services and consultancy fees 81.9 68.2 20.1%

Licence and subscription fees 25.8 25.7 0.4%

Hardware 0.7 1.4 (50.0)%

Total 108.4 95.3 13.8%

Total revenue 323.7 281.6 15.0%

Geographic region

South Africa 305.6 268.4 13.9%

Rest of the world 18.1 13.2 37.1%

Total revenue 323.7 281.6 15.0%

Recurring income continues to increase and constitutes c.56% of total revenue in 2020 (2019: 52%)

DIVISIONAL REVENUE COMPOSITION

Aligned to growth of

deployed estate

AR rental contracts

reaching maturity replaced

by terminal sales

Robust growth and

strong pipeline

Will continue to be a focus

in coming periods

Reflects material growth in

Cloud and digital projects

Constrained by COVID

disruption

49

(R million) 30 September 2020 30 September 2019 31 March 2020

ASSETS

Non-current assets 847.4 854.3 851.1

Goodwill 728.6 728.6 728.6

Intangible assets 62.0 65.6 61.8

Other non-current assets 56.8 60.1 60.7

Current assets 592.1 603.6 596.7

Cash and cash equivalents 488.4 415.9 505.1

Other current assets 103.7 187.7 91.6

Total assets 1 439.5 1 457.9 1 447.8

EQUITY AND LIABILITIES

Equity 1 332.0 1 277.1 1 309.0

Non-current liabilities 33.8 55.4 40.8

Current liabilities 73.7 125.4 98.0

Total equity and liabilities 1439.5 1 457.9 1 447.8

NAV per share (cents) 108.0 97.5 109.0

Cash available per share (cents) 37.3 31.7 38.6

Current ratio 8.0:1 4.8:1 6.1:1

Available for investment

in organic growth and

acquisition opportunities

CONDENSED GROUP STATEMENT OF FINANCIAL POSITION

Uncomplicated Balance

Sheet

Amortisation of R8.9m

(2019: R7.9m)

50

CASH FLOW (KEY FEATURES)

(R million) 30 September 2020 30 September 2019 31 March 2020

Cashflow from operations 65.7 20.1 206.1

Changes in working capital (18.6) (45.5) 23.6

Finance income 11.1 21.1 38.1

Acquisition of property, plant and equipment and

intangible assets(12.0) (21.0) (34.0)

Proceeds from disposal of associate - 35.0 35.0

Repurchase and cancellation of 245 million ordinary

shares (cancelled)- (192.7) (192.7)

Purchase of treasury shares - (1.4) (33.9)

Payment of cash portion of performance warranty (10.0) - -

Taxation paid (29.5) (26.3) (57.9)

Dividends paid (33.9) (29.8) (57.8)

Cash & cash equivalents at period end 488.4 415.9 505.1

Lower cash balances post

the share repurchase and

3% reduction in SA prime

rate (R7.1m)

Strong cash generation

Synthesis achieved the

profit warranty - R10m and

30m treasury shares

Resources to fund organic

growth and acquisitions

Disposal of share in

Resonance Australia

51

PROSPECTS

5252

• Accelerated growth in POS device

estate as penetration increases in

banking as well as SMME sector

• Introduction of new platforms will

generate new growth and open up

new market segments

• New product pipeline

PAYMENTS SERVICES

• Strong and growing adoption of

cloud-based solutions

• Regulatory compliance

requirements

• Further international expansion

• 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

• Economic climate is impacting our clients and remains present in our

planning

GROWTH OPPORTUNITIES

GENERAL PROSPECTSCapital Appreciation is well capitalised,

with the management skills and

technology to drive it’s growth strategy

53

OUR INVESTMENTCASE

✓ Leadership position in industry with strong secular

growth trajectory

✓ Strong culture of innovation resulting in relevant

client solutions

✓ Established track record of delivery

✓ A trusted partner to blue-chip clients

✓ Healthy balance sheet supports cash generative

businesses that enable growth & agility

An extremely strong foundation on

which to grow – organically and by

acquisition

54

T H A N K Y O U

5555

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

IaaS Infrastructure as a Service

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

PaaS Platform as a Service

POS Point of sale

R Rand

R&D Research and development

REIT Real Estate Investment Trust

SA South Africa

SaaS Software as a Service

SARB South African Reserve Bank

SARS South African Revenue Services

SDK Software Development Kit

SME Small and medium enterprise

Tx Transaction

UAT User acceptance testing

US$ United States Dollar

ZAR South African Rands

GLOSSARY