JSC Kaspi.kz - 3rd Quarter & 9 Months 2022 Financial Results
24/10/2022 07:00
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RNS Number : 8411D JSC Kaspi.kz 24 October 2022
Kaspi.kz 3(rd) Quarter & 9 Months 2022 Financial Results and 2022
Guidance Upgrade
Kazakhstan, 24 October 2022 - JSC Kaspi.kz ("Kaspi.kz", "we", or the
"Company") which operates the Kaspi.kz Super App, Kazakhstan's leading mobile
Super App, today publishes its unaudited consolidated IFRS financial results
for the quarter and nine months ending 30 September 2022.
Third quarter & nine months 2022 highlights
· Average monthly transactions per active consumer up 28%
year-over-year to 58.
· RTPV transactions increased 53% year-over-year and Marketplace
purchases increased 76%.
· Kaspi Pay continues to scale at a rapid rate, significantly
increasing its number of merchants.
o Active merchants up 126% year-over-year to reach 413K. Expect growth in our
merchant base to remain at elevated levels in 2023.
o 422K active Kaspi Pay POS devices by September 2022, up 96% year-over-year.
o By number of transactions, Kaspi Pay accounted for 91% of all Kaspi.kz
in-store transactions, with third-party acquiring down to just 9%.
o With a large, highly engaged and growing merchant base, we expect rapid
growth in earlier stage merchant services over the next few years including
Kaspi Marketing, Kaspi Delivery and financing for merchants and
SMEs.
· Kaspi e-Grocery, in conjunction with Kazakhstan's largest grocery
retailer Magnum, is seeing accelerating momentum and extremely positive
consumer feedback.
o e-Grocery GMV up 16.1x & purchases up 9.8x year-over-year.
o Active consumers up 8.0x year-over-year.
· Kaspi Pay B2B emerging as a new transformative payments proposition
for merchants and their suppliers, with B2B RTPV volumes up 4.7x
year-over-year.
· Kaspi Travel GMV and tickets sold both up 2.7x year-over-year.
Package holidays planned for 2023. With Travel, e-Commerce and m-Commerce,
Marketplace now includes three large, diverse and fast-growing propositions.
E-grocery will be the 4(th).
· The breadth and depth of Marketplace's product proposition
significantly enhanced.
o Marketplace merchants up 218% year-over-year to reach 258K.
o e-Commerce SKUs up 2.0x year-over-year to 2.4 million.
· We also continue to scale Kaspi Smart Logistics Platform, with total
orders delivered up 184% year-over-year to 4.9 million.
o 97% of deliveries free for the consumer.
o 50% of orders delivered in ≤2 days.
o 3,026 Kaspi Postomats operational in September across 55 cities, accounting
for 19% of orders delivered. Around 4,000 lockers planned by year-end, up from
our previous goal of 3,000.
· During the first nine months of 2022, Kaspi.kz continued to deliver
strong financials. Nine months 2022 consolidated adj. net income up 36% year-
over-year to KZT422 billion.
· Following a cautious approach to credit origination earlier in the
year, TFV accelerated 30% year-over-year in the third quarter of 2022, with
better than expected cost of risk.
· July's Kaspi Juma saw GMV up 175% compared to our previous event in
2019. We plan to repeat Kaspi Juma in November and expect it to be bigger than
ever.
· Upgrading Payments RTPV growth to above 50% year-over-year.
· Upgrading Marketplace take-rate guidance to above 8%.
· Upgrading Fintech cost of risk guidance to below 2%.
· With our business continuing to deliver and the outlook improving, we
now expect Kaspi.kz's consolidated adj. net income to grow above 30%
year-over-year in 2022. This is above our previous 27-30% guidance range and
our second consolidated net income guidance upgrade so far this year.
· In the first nine months of 2022 our faster growing, high
profitability Payments and Marketplace Platform's reached 57% of consolidated
net income. Contribution from our Fintech Platform, will keep reducing over
the mid-term.
· Based on our third quarter 2022 results, our Board of Directors has
proposed a dividend of KZT600/GDR, subject to shareholder approval.
· Two GDR repurchase programs completed year-to-date, worth $51 million
and $45 million respectively.
· Our Board of Directors has approved a new 4-month GDR repurchase
program of up to $100 million. We will continue to use the combination of both
dividends and buybacks to create value for our shareholders.
To the shareholders of Kaspi.kz:
Amidst ongoing uncertainty around the world, Kaspi.kz's Super App business
model keeps delivering fast and profitable growth. This isn't luck but the
result of best-in-class execution by our dedicated team. We are unrelenting in
our efforts to develop high quality digital products, that are used day-in,
day-out. We must always be there for our customers and continually innovate to
make their day-to-day lives better. If we do this, I'm confident that Kaspi.kz
can keep delivering strong growth for many more years to come, no matter what
the external environment throws at us.
The third quarter got off to a great start with Kaspi Juma, our nationwide
shopping festival, surpassing all our expectations. We will hold Juma again in
November and expect it to be bigger and better than ever before.
The underlying growth drivers of our business remain strong. Merchant
onboarding to Kaspi Pay, m-Commerce and e-Commerce increased 126%
year-over-year, to reach 413K active merchants. Average monthly transactions
per active consumer reached 58 per month, with revenue generating payment
transactions (RTPV) and Marketplace purchases up 53% and 76% year-over-year
respectively, during the third quarter. With the relevance of our Super App to
consumers and merchants continuing to increase, we are well positioned to
deliver fast growth into 2023. Having reached 57% of net income in the first
nine months, we expect our Payments and Marketplace Platforms to continue
contributing to a growing share of future profits.
In the first half of 2022, we deliberately took a more cautious approach to
Total Finance Value (TFV) origination. However, in the third quarter, we once
again pushed down on the accelerator, growing origination 30% year-over-year.
Accelerating TFV momentum and improving risk in the final quarter of this
year, puts our Fintech Platform in great shape to deliver faster net income
growth next year.
At a time when many leading internet technology companies around the world are
lowering their earnings expectations, we are pleased to once again increase
our guidance. Stark proof just how powerful our Super App strategy is and that
the Kaspi.kz team knows how to deliver.
In our Payments Platform, we now expect higher RTPV growth of above 50%
year-over-year in 2022. In Marketplace, the success of Juma leads us to expect
a higher, above 8% take-rate and in our Fintech Platform, superior loan
quality leads us to upgrade our cost of risk assumption to below 2%. Taking
this all together, I'm delighted to report that we're upgrading our 2022
Kaspi.kz consolidated adj. net income growth guidance to above 30%
year-over-year.
As we inevitably start to think about what 2023 holds, Kaspi.kz's strategy
remains unchanged. We develop innovative products and services that improve
the everyday lives of our large and engaged user base. Kaspi Pay and Kaspi
Travel are good recent examples of how this creates real value for all out
stakeholders. It took us just 2 years to bring Kaspi Travel from start-up to
the N1 airline and railway booking service in the country. In 2023 we will add
package holidays, an approximately $1 billion market opportunity, with highly
attractive economics.
Over the same period, Kaspi Pay has become the payment's platform of choice
for consumers and merchants in Kazakhstan. B2B Payments are a natural
evolution and another massive opportunity for us. B2B is already up to 3% of
RTPV in a short period, which given the absolute scale of our payments volume
is a significant achievement. e-Grocery continues to scale at a phenomenal
rate and can be transformative to our relationship with consumers over the
next couple of years.
All in all, we're on-track for a good 2022 and are as upbeat about our
mid-term growth outlook. As is now the custom, we will provide detailed 2023
KPIs and financial guidance at our full-year 2022 results, early next
year.
Subject to shareholder approval, our Board of Directors has approved a
dividend equivalent to KZT600/GDR. This follows a dividend payment of
KZT500/GDR based on our second quarter financials. While we will always
prioritise investments in growth, in the event of excess capital we will
return this to our shareholders. Nothing has changed in terms of our long-term
approach to capital allocation.
We will also keep taking steps to narrow the valuation discount upon which our
GDR's trade. In April we started to buyback our GDRs and although stock
liquidity has been a constraint, we have completed two buyback programs, worth
$51 million and $45 million respectively. Our Board has once again allocated
up to $100 million for a new 4-months buyback program. Given our valuation and
growth outlook, we believe buybacks have the potential to be substantially
earnings and dividend accretive, over the medium-term.
As we have said multiple times before, we remain committed to taking steps to
ensure Kaspi.kz is listed on the most appropriate exchange. Admittedly the
timing of this event is difficult to predict but hopefully market conditions
will be right in 2023.
Kaspi.kz is at the forefront of the new digital revolution, redefined by Super
Apps. The combination of our scale with consumers and merchants, reinforced by
our Super App strategy, puts us in a completely unique position to capture the
multi-year structural growth opportunity offered by digitalisation in
Kazakhstan and over time across the broader region.
As always, I would like to thank our team for their incredible execution and
our shareholders, for your ongoing trust and support.
Mikheil Lomtadze
Kaspi.kz CEO and co-founder
Kaspi.kz 3Q 2022 transaction highlights
RTPV transactions up 53%, Marketplace purchases up 76% YoY & 58
transactions per consumer/month
Kaspi.kz's Super App is Kazakhstan's most popular Super App and gives our
Payments, Marketplace and Fintech Platforms unrivalled competitive advantages.
During the third quarter of 2022, Super App transaction levels continued to
hit all-time highs.
Increased adoption of our existing products by merchants and consumers, along
with a growing suite of new products facilitates higher engagement and
transactions across more areas of household and merchant spending. Average
monthly transactions per active consumer, increased by 28% year-over-year to
58 during the third quarter of 2022.
To drive transactions even higher, we continue to prioritise onboarding as
many merchants, as rapidly as possible. During the third quarter of 2022,
growth in the total number of active merchants increased 126% year-over-year
to reach 413K. We expect growth in our merchant base to remain at elevated
levels in 2023.
We design best-in-class digital products to monetise transactions volumes.
During the third quarter of 2022, RTPV transactions increased 53%
year-over-year and Marketplace purchases increased 76%. High levels of growth
in monetized transactions, despite economic volatility illustrates just how
important our products are to our customers.
Products like Kaspi Pay, m-Commerce and e-Commerce all facilitate merchant
acquisition. In turn, as our merchant base scales, we will increasingly grow
earlier stage merchant services including B2B payments, Kaspi Marketing, Kaspi
Delivery and financing for merchants and SMEs. These products all help our
merchants invest in their business, reach new customers and increase their
sales. The growth opportunity ahead is substantial and as these initiatives
scale in future years, we will of course provide more details.
Similar to our merchant strategy, consumer products like P2P, Bill Payments,
BNPL, Kaspi QR and our GovTech Platform are the basis of our day-to-day
relationship with users. Going forward, we will grow less mature services
including m-Commerce, e-Commerce, Kaspi Travel and e-Grocery. These services
all help our consumers discover the products they need, at the best possible
prices, from local merchants, with free delivery, ultimately saving time and
money. With consumer penetration across our full range of Super App services
still low, here too the opportunity ahead remains significant.
Consumer feedback about Kaspi e-Grocery is extremely positive and over the
next 18 months we are committed to its rapid development. If we're successful,
e-Grocery can have dramatically positive implications for Super App
engagement, Marketplace GMV growth and our ability to create value. During the
third quarter of 2022 growth in purchases accelerated, increasing 9.8x
year-over-year, with the number of customers up 8.0x. Here too, as we scale
e-Grocery, we will provide more detailed operating and financial metrics.
Kaspi Travel is now Kazakhstan's N1 online flight and rail booking service.
Kaspi Travel purchases tickets sold increased 2.7x year-over-year, with GMV
accounting for 9% of Marketplace GMV in the third quarter of 2022. We will
continue to broaden Kaspi Travel's offering, with the addition of package
holidays planned for the first half of 2023. Combined with the recovery in
international travel, we expect Kaspi Travel to remain additive to Marketplace
growth for some time.
Kaspi B2B, which was born out of Bill Payments, is an example of how we can
grow transactions by targeting new segments, in this case wholesalers,
distributors and manufacturers.
Number of B2B transactions increased 4.4x year-over-year, during the third
quarter of 2022 and with this product still in its early days, B2B offers
another huge opportunity to create value over the medium-term.
As always, we will continue to launch new services and our product pipeline
looking into 2023 and beyond is as exciting as ever.
Kaspi.kz 3Q and 9 months 2022 financial
highlights
Revenue up 39% and adj. net income up 30% YoY in 3Q22
During the third quarter of 2022, total revenue, increased 39% year-over-year
to reach KZT349 billion. For the first nine months of 2022, total revenue
increased 40% to reach KZT910 billion.
Our Payments Platform continues to deliver excellent results due to the
success of Kaspi Pay. In Marketplace, ongoing efforts to expand our merchant
base, combined with the success of Kaspi Juma led to a significant
acceleration in revenue growth. Kaspi Travel GMV growth is also additive to
Marketplace growth. Our cautious approach to TFV origination in the first half
of this year, is now translating into slightly more modest Fintech revenue
growth but with TFV origination accelerating again, revenue growth will
subsequently move up in 2023.
During the third quarter of 2022, adj. net income increased 30% year-over-year
to KZT170 billion. Adj. net income profitability decreased to 48.7% from 52.1%
in the third quarter of 2021. For the first nine months of 2022, adj. net
income increased 36% to reach KZT422 billion, with 46.4% profitability down
from 48.1% year-over-year.
As our proprietary payments network scales, we continue to benefit from our
Payments Platform's operational gearing. Marketplace profitability was
slightly lower, due to our planned investment in free consumer delivery. In
Fintech, the combination of a lower yield and higher funding costs lowered
profitability, partially offset by lower provisioning and tight control of
operating costs. Higher funding costs did however help us successfully attract
substantial deposit inflows, with total Kaspi Deposit balances up 26%
year-over-year in the third quarter of 2022. An enlarged deposit base, will
fund higher origination volumes in both the final quarter of this year and
especially in 2023.
With our faster growing and higher profitability Payments and Marketplace
Platforms continuing to deliver strong bottom-line growth, they accounted for
57% of adj. net income in the first nine months of 2022, up from 50% in the
same period in 2021. In the fourth quarter of 2022 and over the medium-term,
we expect the contribution to net income from our Payments and Marketplace
Platforms to continue increasing.
Our cash generation capacity remains as strong. As a result, our Board of
Directors has proposed a dividend equivalent to KZT600/GDR. In addition, our
Board has approved a new up to $100 million GDR buyback program. This follows
on from two competed buyback programs this year, worth $51 million and $45
million respectively.
Payments
Platform
RTPV up 52%, revenue up 51% and adj. net income up 51% YoY
Our Payments Platform has always offered consumers a highly convenient way to
shop, pay bills and make peer-to-peer (P2P) payments via the Kaspi.kz Super
App. As has been the case globally, in Kazakhstan there has been a huge shift
to mobile payments, with consumers demanding a seamless digital experience no
matter where they shop. Kaspi Pay is our response to help merchants exceed
their customers' expectations and Kaspi B2B helps merchants digitalise their
supplier payments.
Payments Platform products are also amongst our most important tools to
attract new customers and increase engagement, making their popularity
fundamental to Kaspi.kz's growth outlook. We continue adding new opportunities
to spend and pay, which is a function of new merchants and product
development.
In the third quarter of 2022, Payments Platform merchant onboarding remained
strong, up 130% year-over-year to 413K merchants. Over the same period, there
were 422K active Kaspi Pay POS devices, up 96% year- over-year. The benefits
of this will continue being seen as existing merchants shift more of their
volumes to Kaspi Pay, leading to high ongoing growth in RTPV.
By creating our own closed-loop proprietary payments network, we have
eliminated the need for third-party processors and Kaspi Pay offers merchants
and consumers at scale, a best-in-class end-to-end experience and low pricing.
This resulted in Kaspi Pay acquiring accounting for 91% of all Kaspi Gold POS
in-store retail transactions during third quarter of 2022, with third-party
acquirers now only processing 9% of our transactions.
As we add new opportunities to pay, consumer growth has remained robust.
Payments Platform active consumers increased 17% year-over-year, to reach 10.9
million, in the third quarter of 2022.
During the third quarter of 2022, Revenue Generating TPV (RTPV) remained
consistently strong, increasing 52% year-over-year to reach KZT5.4 trillion.
RTPV continues to grow significantly faster than Total Payment Value (TPV) due
to our success rolling out Kaspi POS devices. For the first nine months of
2022, RTPV increased 55% year-over-year to KZT13.6 trillion.
Average interest free balances increased 10% year-over- year in the third
quarter of 2022 to KZT631 billion. More modest growth in balances during the
period, in part reflects the increased attractiveness of interest bearing
Kaspi Deposit accounts, as well as being a natural consequence of growth in
Payments Platform consumers stabilising. For the first nine months of the
year, average interest free balances increased 24% to KZT617 billion.
During the third quarter of 2022, Payments Platform revenue growth increased
51% year- over-year to reach KZT88 billion. For the first nine months of the
year, Payments Platform revenue growth increased 54% to reach KZT228 billion.
Take-rate in the third quarter and first nine months of 2022 was stable
year-over-year at 1.2%.
Payments Platform adj. net income increased 51% year-over-year to KZT57
billion, with net income profitability of 64.2% stable compared to 64.1% in
the third quarter of 2021. Payments Platform profitability continues to
benefit from our proprietary payments network's operational gearing and tight
control of operating costs. For the first nine months of the year, Payments
Platform adj. net income increased 60% year-over-year to reach KZT144 billion,
with net income profitability increasing to 63.1% from 60.9% in the same
period last year.
Over the last year, Kaspi Pay B2B has emerged as a new and fast-growing
component of our RTPV. Our B2B proposition connects small merchants with
wholesalers, distributors and manufacturers, allowing them to settle invoices
instantly and conveniently. During the third quarter of 2022, B2B RTPV
increased 4.7x year-over-year to KZT160 billion and reached 3% of RTPV.
Although still early days, we believe a leading B2B payments solution, will
open up a new sizeable market opportunity and put us in pole position to
design other innovative merchant products.
Going forward, we will continue to prioritise growing our merchant base and
expect this to contribute to ongoing strong growth in RTPV and a more diverse
mix of Payments Platform revenue streams including B2B payments.
With strong top-line trends continuing, we now expect Payment's Platform to
deliver 2022 RTPV growth above 50% year-over-year, an upgrade from our
previous around 50% guidance. As a result of tight cost control and
operational gearing we continue to expect Payment's full-year adj. net income
profitability above 60%. We continue to expect growth in average current
account balances of around 20% year-over-year.
Marketplace Platform
GMV up 58%, revenue up 63% & adj. net income up 59%
Our Marketplace Platform connects merchants with consumers. Merchants can
reach over 12 million consumers and consumers can find a broad selection of
products and services, at the best possible prices. Kaspi Marketplace
champions domestic Kazakh brands and merchants.
m-Commerce is our mobile solution for shopping in person, while consumers can
use e- Commerce to shop anywhere, any time with free delivery. Kaspi Travel
allows consumers to book domestic and international flights and domestic rail
tickets. In partnership with Magnum, Kazakhstan's largest food retailer, Kaspi
e-Grocery serves households everyday shopping needs. Marketplace offers a
unified digital experience, irrespective of online or offline, relevant across
practically all areas of consumer spending.
Just as with our Payments Platform, the rapid expansion of our Marketplace
merchant base is an important focus. During the third quarter of 2022,
Marketplace merchants increased to 258K, equivalent to 218% year-over-year
growth. Marketplace consumers increased 34% year-over-year to 5.7 million.
We expect merchant growth to remain at high levels, with more merchants and
enhanced shopping categories leading to sustained growth in consumers and
faster growth in transactions per consumer. An enlarged merchant base will
contribute to rapid growth from earlier-stage products like Kaspi Marketing
and Kaspi Delivery over the medium-term.
The quarter started with the return of Kaspi Juma, our nationwide shopping
festival. This was the first Juma since the start of the Covid-19 pandemic and
it surpassed all our expectations. Over 3 days GMV amounted to KZT166 billion,
up 175% compared to the previous Kaspi Juma in 2019.
During the third quarter of 2022, Marketplace GMV momentum accelerated,
increasing 58% year-over-year to KZT803 billion. For the first nine months of
2022, GMV increased 53% year-over-year to KZT1.8 trillion.
m-Commerce continues to deliver excellent results with third quarter and first
nine months of 2022 GMV growth of 67% and 62% year-over-year respectively.
m-Commerce GMV was KZT468 billion and KZT1.1 trillion during the third quarter
and first nine months of 2022.
e-Commerce demand was strong with orders up 143% year-over-year in the third
quarter of 2022. GMV increased 32% year-over-year to KZT267 billion during the
same period, accelerating from 23% year-over-year growth in the second
quarter. GMV growth below order growth, reflects expansion in the breadth and
depth of everyday items, at lower price points as we increased e-Commerce SKUs
2.0x year-over-year to 2.4 million.
For the remainder of 2022, we expect items sold to continue growing faster
than GMV. However, as new lower ticket categories grow in share, faster GMV
growth will follow and with Kaspi Juma planned to take place again in
November, we expect e-Commerce GMV growth to continue accelerating. In the
first nine months of 2022, e-Commerce orders and GMV increased by 110% and 24%
year-over-year respectively. e-Commerce GMV reached KZT614 billion during the
first nine months of 2022.
Kaspi Travel's GMV increased 2.7x year-over-year to KZT68 billion during the
third quarter of 2022, with ticket sales up 2.7x to 2.8 million. Travel's GMV
reached 9% of Marketplace GMV, which is impressive scale and makes Travel's
ongoing fast growth materially additive to Marketplace GMV growth. For the
first nine months of the year, Travel's GMV increased 243% year-over-year to
KZT168 billion.
Free delivery for consumers is helping us grow our e-Commerce merchant and
consumer base and we're very pleased with the results of this investment. In
the third quarter of 2022, orders delivered increased 184% year-over-year.
Delivery now accounts for 93% of orders, was free for the consumer on 97% of
orders and with 50% of orders delivered within 48 hours.
We started to roll out Kaspi Postomat last year and have added 3,026 lockers
by the end of September. These lockers are now installed in 55 cities across
Kazakhstan and accounted for 18.7% of e-Commerce deliveries during the third
quarter of 2022. We use Kaspi.kz's proprietary big data to identify the most
appropriate locations and given positive customer feedback, we recently
decided to target for around 4,000 Postomats by year end, up from our previous
goal of 3,000.
Marketplace take-rate increased to 8.4% from 8.1% in the third quarter of 2021
and resulted in Marketplace revenue growth of 63% year-over-year to KZT68
billion. For the first nine months of 2022, Marketplace take-rate declined
slightly to 7.9% from 8.1% in the same period in 2021, with nine months 2022
Marketplace revenue growing 50% year-over-year to KZT149 billion. The decline
in year-over-year take-rate mainly reflects the blended contribution from
Kaspi Travel which is GMV growth enhancing but take-rate dilutive, partially
offset by take-rate upside from Juma in the third quarter. Kaspi Juma is set
to boost take-rate again in the final quarter of this year.
Earlier this year we started disclosing m-Commerce and e-Commerce take-rates
separately. During the third quarter of 2022, m-Commerce and e-Commerce
take-rates were 8.3% and 9.6% respectively. Reduced promotional activity
contributed to lower take rate in the first half of the year, but take-rate in
the second half of the year, will see the benefit of two Kaspi Juma events.
The inclusion of Kaspi Travel reduces reported Marketplace take-rate, although
Travel's take-rate increased to 3.8% from 3.3% in the third quarter of 2021,
due to the growing share of higher take-rate railway bookings.
During the third quarter of 2022, Marketplace Platform adj. net income reached
KZT45 billion, representing a 59% increase year-over-year. Net income
profitability was 66.8% down from 68.3% in the same period in 2021, due to
investment in free delivery. For the first nine months of 2022, Marketplace
adj. net income increased 45% year-over-year to KZT96 billion, with
profitability of 64.5% down from 66.4% in the first nine months of 2022.
In 2021 we started testing e-Grocery, in partnership with Magnum, Kazakhstan's
largest food retail chain. Grocery retail is the largest possible spending
opportunity our Marketplace can address, with Kazakhstan's modern grocery
market valued at $12 billion in 2021 and informal grocery retail estimated to
be similar in size. Under this partnership Magnum is responsible for operating
dark stores, purchasing SKUs and same day, free delivery to consumers. Our
main role is to generate orders and define assortment and pricing. We also
provide integrated payments via Kaspi Pay and use Kaspi Marketing to run
highly personalised advertising campaigns.
We started pilot testing e-Grocery last year and within month's volumes scaled
so fast that we became Kazakhstan's N1 e-Grocer, albeit in a nascent market.
In the third quarter of 2022, 124K consumers made 416K orders. Average ticket
size was around $25. Going forward, scaling e-Grocery is now one of our most
important priorities and although average ticket-size and take-rate are lower
than our e-Commerce average, we would expect a strong e-Grocery proposition to
be materially additive to engagement and Marketplace mid-term growth.
The breadth and depth of our merchant proposition is one of the most important
drivers of transactions per consumer growth and our long-term competitive
advantage. Going forward, we therefore expect to continue merchant onboarding
at high levels. Kaspi Travel should continue to see strong growth as consumer
adoption increases and package holidays are added. We also expect rapid growth
of e-Grocery and on the back of our investments, Kaspi Smart Logistics will
continue to scale.
For 2022 Marketplace remains ontrack to deliver GMV growth of around 55%
year-over-year. However, due to the success of Kaspi Juma we now expect
take-rate to be above 8%, which is an upgrade from our previous around 8%
guidance. We will continue to invest in free consumer delivery but given the
growing scale of Marketplace, this will increasingly have less impact on
profitability. For full year 2022 we continue to expect a Marketplace net
income margin in the mid-60% region.
Fintech
Platform
TFV up 30% YoY, Buy-Now-Pay-Later 45% of TFV & 1.3% CoR
The short-term nature of all our financing and more specifically Buy-Now-Pay-
Later (BNPL) products, allow us to quickly ramp-up or scale back origination
as we observe changes in consumer transaction activity. During the third
quarter of 2022, Total Finance Value (TFV) growth reaccelerated to 30%
year-over-year, reaching KZT1.6 trillion. With underlying consumer momentum
healthy, approval levels are now back at business-as-usual levels. Following
our more cautious approach to origination in the first half of 2022, we expect
TFV origination in the second half of the year to materially step-up. For the
first nine months of 2022, TFV increased 23% year-over-year to KZT3.6
trillion.
Our average net loan portfolio increased by 40% year-over-year, to reach
KZT2.7 trillion during the third quarter of 2022. Total deposits increased by
26% year-over-year and 14% quarter-over-quarter to reach KZT3.3 trillion.
Strong quarterly growth in our deposit base, in part reflects our decision to
immediately increase Kaspi Deposit rates, in line with central bank interest
rate increases. Our loan to deposit ratio increased to 83% from 79% in the
third quarter of 2021 and 80% in the second quarter of 2022. We view our
current loan to deposit ratio as broadly optimal. For the first nine months of
2022, our average net loan portfolio increased by 51% year-over-year and total
deposits increased by 25%.
Portfolio conversion of 2.0x in the third quarter of 2022, is in line with
trends in the previous quarter, reflecting ongoing high early repayments
levels, as financially healthy consumers borrow, transact and repay regularly.
With consumer credit quality extremely high, we expect to continue benefiting
from rapid portfolio conversion, although Juma does mean slightly higher avg.
ticket size and longer maturities.
Low risk, small ticket, short duration Buy-Now-Pay-Later (BNPL) loans
accounted for 45% of TFV in the third quarter of 2022, making them our most
important Fintech Platform product. Our Merchant and Micro Business Finance
products accounted for 11% of TFV and will grow further in importance in 2023.
Fintech yield was 26.7% and 26.9% during the third quarter and first nine
months of 2022 respectively, reflecting the growing share of lower yielding
BNPL and Merchant Finance loans. Kaspi Juma leads to a higher share of BNPL
and we continue to expect our full year 2022 yield to be around 25%.
During the third quarter and first nine months of 2022, our underlying credit
cost of risk was 1.3% and 2.0% respectively. Low credit cost of risk reflects
the low-risk nature of our products, especially BNPL, ongoing improvements in
our data driven origination capabilities, as well as our efforts to constantly
improve the efficiency of our collection processes. We continue to expect to
fully amortise higher near-term macro risk assumptions and with underlying
credit trends better than initially expected, we now expect our full year 2022
credit cost of risk to be below 2%, an improvement on previous guidance of
around 2%.
Consumer credit performance is always in focus for investors when the economic
situation appears to worsen. To expand on why our credit quality remains high,
it is important to remember that with Kaspi.kz BNPL, our consumers do not
maintain a continually revolving line of credit, that was approved in a
different economic climate. Each transaction is a separate borrowing event,
that allows us to check using our proprietary technology and data that our
consumers are not overextending themselves. In addition, because our average
loan term is short, just over 6 months, in the event of a downturn older loans
are quickly paid off.
Fintech Platform revenue increased by 28% year-over-year, reaching KZT192
billion during the third quarter of 2022. As a result of both lower Fintech
origination and a higher share of lower yielding BNPL, Fintech revenue growth
has moderated, but will reaccelerate in 2023 on the back of faster TFV
origination in the second half of this year. For the first nine months of
2022, Fintech Platform revenue increased by 34% year-over-year, reaching
KZT535 billion.
In the third quarter of 2022, Fintech Platform's adj. net income increased by
5% year- over-year to reach net income of KZT68 billion. Adj. net income
margin of 35.3% compares with 42.9% in the third quarter of 2021. Declining
profitability mainly resulted from higher year-over-year funding costs,
partially offset by lower provisioning and tight operating cost control. For
the first nine months of 2022, Fintech Platform adj. net income increased by
17% year-over-year, reaching KZT182 billion, with adj.net income margin of
34.1% compared with 38.8% in the same period in 2021.
We expect fast TFV origination to remain a theme for the remainder of this
year. Although we will continue to prioritise our BNPL product, we also expect
Kaspi Business merchant and SME financing products to continue scaling
rapidly. BNPL integrated with Kaspi Travel is also expected to see strong
growth.
In 2022 our Fintech Platform should see solid top-line growth, even
considering more modest origination and some yield reduction. With cost of
risk now expected to be below 2% and tight cost control, profitability growth
will be healthy, even taking higher deposit interest rate costs into account.
We continue to expect our 2022 Fintech net income margin guidance to be around
low-30%, which is consistent with our guidance throughout this year.
Guidance for full-year 2022
In response to increased macro volatility, we scaled back credit origination
(TFV) and postponed promotional campaigns in the first half of 2022. However,
since then the underlying drivers of Kaspi.kz's business, including consumer
and merchant engagement have remained strong. In July, Kaspi Juma surpassed
all our expectations. Credit quality remains extremely high and better than we
expected at the beginning of the year. As a result, we're now able to scale up
credit origination with lower cost of risk. We plan to repeat Juma in
November.
We are increasing our 2022 RTPV growth and Marketplace take-rate guidance. In
our Fintech Platform, we now expect full-year cost of risk to be below 2%,
which is better than our previous guidance of around 2%. We now expect
Kaspi.kz's consolidated adj. net income growth to be above 30% year-over-year
in 2022, which is higher than our previous 27-30% guidance and our second
consolidated net income guidance upgrade so far this year.
As is now the custom, we will provide detailed 2023 KPIs and financial
guidance at our full-year 2022 results, early next year.
GDR buyback program
In July 2022 we completed our first GDR buyback program, totalling 998,429
GDR's and equivalent to $51 million. At our first half 2022 financial results,
we announced a second GDR buyback program, which was completed last week with
788,153 million GDR's repurchased for $45 million. Total GDR's outstanding as
at 30 September 2022 were 191,176,929 and total GDR's outstanding as at 24
October 2022 were 190,899,013.
Conference call information
On Monday 24 October 2022 the management of Kaspi.kz will hold a conference
call and webcast at 1.00pm (London) (8.00am U.S. Eastern Time, 6.00pm
Nur-Sultan time) to review and discuss the company's results for the third
quarter and nine months 2022.
To pre-register for this call, please go to the following link:
https://www.netroadshow.com/events/login?show=29861a32&confId=42525
You will receive your access details via email.
Kaspi.kz Financial Statements
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About Kaspi.kz
Kaspi.kz's mission is to improve people's lives by developing innovative
mobile products and services. At our core is the Kaspi.kz Super App, the
leading mobile app in Kazakhstan.
The Kaspi.kz Super App serves as a single gateway to our Payments, Marketplace
and Fintech Platforms and is an integral part of our users' daily lives. As
people's lives become increasingly digitalised, Super App usage is expected to
grow supported by accelerating adoption of cashless payments, e-Commerce and
digital financial services.
Kaspi.kz Super App business model ensures the growth and development of one
service contributes to the growth and development of other services, creating
a powerful virtuous cycle. Increasing usage of a growing number of services
puts Kaspi.kz in a strong position to keep innovating, delighting our users
and fulfilling our mission.
Kaspi.kz has been listed on the London Stock Exchange since 2020. For further
information david.ferguson@kaspi.kz +44 7427 751 275
Forward-looking statements
Some of the information in this announcement may contain projections or other
forward- looking statements regarding future events or the future financial
performance of Kaspi.kz. You can identify forward looking statements by terms
such as "expect", "believe", "anticipate", "estimate", "intend", "will",
"could," "may" or "might", the negative of such terms or other similar
expressions. Kaspi.kz wish to caution you that these statements are only
predictions and that actual events or results may differ materially. Kaspi.kz
does not intend to update these statements to reflect events and circumstances
occurring after the date hereof or to reflect the occurrence of unanticipated
events. Many factors could cause the actual results to differ materially from
those contained in projections or forward-looking statements of Kaspi.kz,
including, among others, general economic conditions, the competitive
environment, risks associated with operating in Kazakhstan, rapid
technological and market change in the industries the Company operates in, as
well as many other risks specifically related to Kaspi.kz and its respective
operations.
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