PLC GROUP EQUALS2020 REPORT ANNUAL

Annual Report 2020

Equals Group PLC

COMPANY INFORMATION

  1. About Equals Group
  2. Business developments
  • Financial summary and highlights
  1. Directors and advisors
  2. History

STRATEGIC REPORT

  • Chairman's Statement

8-13 Chief Executive Officer's Report

14-23 Chief Financial Officer's Report

24-25 Compliance with Companies Act 2006, Section 172 Statement

GOVERNANCE

27-29 Corporate governance report

30-40 ESG report

41-43 Report of the Audit Committee

44-45 Report of the Risk Committee

46-48 Directors' remuneration report

49-51 Directors' report

52 Statement of Directors' responsibilities in respect of the annual report and financial statements 53-58 Independent Auditors' report to the members of Equals Group PLC

FINANCIAL STATEMENTS

  1. Consolidated Statement of comprehensive income
  2. Consolidated and Company Statement of financial position
  3. Consolidated and Company Statement of changes in equity
  4. Consolidated Statement of cash flows
  5. Company Statement of cash flows
    65-93 Notes to the consolidated financial statements

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ANNUAL REPORT 2020 | STRATEGIC REPORT

Equals Group PLC

About Equals

Equals is a leading payments company offering SMEs a suite of payments products across FX transactions, prepaid card solutions, Faster Payments and accounts into which receipts can be credited and payments made. The Group enables its personal and business customers to make easy, low-cost payments both domestically and in a broad range of currencies, across a range of products, all via one integrated system.

Equals provides money movement services to both business and personal customers through five inter-connected channels: International Payments; Corporate Expenses platform; Bank Accounts; and Travel Money, comprising currency cards and physical currency. The International Payments channel supports wire transfer foreign exchange transactions direct to bank accounts. For corporates, Equals has a market-leading business expenses solution based around its corporate platform and

prepaid card, which yields significant cost savings via tighter control on expenses before they are incurred, coupled with eliminating inefficient processes. Equals also offers business and retail bank accounts with all the payments functionality offered by banks, namely faster payments, BACs, direct debits, international payments and a debit card. The Travel Money offerings (retail currency card and physical currency) represent cost-effective and secure methods for travelers to spend abroad.

Equals Group PLC (the "Company") is a public limited liability company incorporated in England and Wales and domiciled in the UK whose shares are admitted to AIM, a market operated by The London Stock Exchange. These consolidated financial statements comprise the Company and its subsidiaries (together referred to as "the Group").

Our Values:

Make it happen; Succeed together; Be the customer; Go beyond

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EQUALS GROUP PLC

Business developments

Highlights

  • B2B Payments agreement with HomeSend (a joint venture between MasterCard and eServeGlobal), via an API, utilising the Group's outstanding FX capabilities in conjunction with its directly connected and settling status with the Faster Payments network;
  • Implementation of core payment partnership with Citi, supplementing existing arrangements with Barclays and Royal Bank of Scotland and providing additional functionality and improved 'in-country' settlement capabilities paving the way to straight-through­processing ("STP");
  • Refined the Equals Go-To-Market strategy under the Equals umbrella to be Equals Money for B2B customers and FairFX for B2C customers;
  • Launch of an all-newcustomer-facing international payments product: 'Equals Pay'. This is a functionality-richself-service platform that will help customer acquisition whilst increasing capacity and efficiency;
  • Rebuild and rebrand of the B2C FairFX website and app to support a new multi-currency card offering;
  • Acquisition of Effective FX, a predominantly B2B focused international payments business with over 200 corporate clients and strong B2B sales culture;
  • Implementation of:
    • a new CRM system;
    • a new customer services platform across the Group, fully integrated with both the new CRM and telephony solutions; and
    • a new compliance system to lower onboarding friction particularly for B2B customers.
  • Further investment into finance, compliance and regulatory capabilities.

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ANNUAL REPORT 2020 | STRATEGIC REPORT

Financial summary and highlights

2020 Financial Summary

In £ millions

FY-2020

FY-2019

Change

Restated

Underlying transaction values

3,493

2,888

+605

-

B2B*

2,843

2,156

+687

-

B2C*

650

731

-81

Revenue

29.0

30.9

-1.9

-

B2B*

20.3

18.5

+1.8

-

B2C*

8.7

12.4

-3.7

Gross profit

18.3

20.6

-2.3

Capitalised internal software

(4.4)

(8.3)

+3.9

Separately reported items

(2.6)

(3.4)

+0.8

Adjusted EBITDA**

1.2

5.6

-4.4

R&D Credits

1.4

3.5

-2.1

Loss after taxation

(6.9)

(5.4)

-1.5

FY-2020 Highlights

  • Successful refocus on business customers with B2B transactions up by 32%
  • International Payments: revenue increased by 46%; and its B2B segment revenue increased by 51%
  • Total B2B revenues represented 70% (FY-2019: 56%)
  • Non travel-money revenues increased by 18% to £26.6 million (FY-2019: £22.9 million)
  • Over 18,000 active unique B2B customers
  • Total underlying expenditure reduced by 18% from £30.6 million to £25.0 million
  • Cash break-even achieved in Q4-2020
  • Further bolt-on acquisition of Effective FX in October 2020
  • Adjusted EBITDA of £1.2 million, ahead of market expectations and achieved against COVID-19 and Wirecard headwinds
  • The 50% reduction in staff costs capitalised combined with COVID-19/Wirecard headwinds and single-year R&D tax relief led to loss after tax widening from £5.4million to £6.9 million
  • Transactions with business customers are reported as 'B2B' and transactions with retail customers reported as 'B2C',
  • Adjusted EBITDA is defined as: earnings before depreciation, amortisation, impairment charges, share option charges, foreign exchange differences and separately reported items. Separately reported items are large, non-recurring items.

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Disclaimer

Equals Group plc published this content on 14 April 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 April 2021 15:56:03 UTC.