Net 1 U E P S Technology : Q4 2020 Presentation

Q4 2020 Investor Presentation

www.net1.com

Safe Harbor Statement

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for certain forward-looking statements so long as such information is identified as forward-looking and is accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those projected in the information.

The use of words such as "may", "might", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "project", "intend", "future", "potential" or "continue", and other similar expressions are intended to identify forward-looking statements.

All of these forward-looking statements are based on estimates and assumptions by our management that, although we believe to be reasonable, are inherently uncertain. Forward-looking statements involve risks and uncertainties, including, but not limited to, economic, competitive, governmental and technological factors outside of our control, that may cause our business, industry, strategy or actual results to differ materially from the forward-looking statements.

These risks and uncertainties may include those discussed in the Company's annual report on Form 10-Kfor the year ended June 30, 2020, on file with the Securities and Exchange Commission, and other factors which may not be known to us. Any forward-looking statement speaks only as of its date. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.

2

Defined Terms

Unless specifically noted otherwise within this presentation, the following terms are hereby defined as follows:

Constant Currency: We analyze our results of operations both in U.S. dollars, as presented in the consolidated financial statements, and supplementally in ZAR, because ZAR is the functional currency of the entities which contribute the majority of our revenue and costs, and is the currency in which the majority of our transactions are initially incurred and measured. Due to the significant impact of currency fluctuations between the U.S. dollar and ZAR on our reported results and because we use the U.S. dollar as our reporting currency, we believe that the supplemental presentation of our results of operations in ZAR is useful to investors to understand the changes in the underlying trends of our business. The use of constant currency is a non-GAAPmeasure.

Adjusted EBITDA: Net (loss) income before non-controlling interests, earnings from equity accounted investments, interest, taxation, depreciation and amortization expenses ("EBITDA") adjusted for impairment losses, transaction or financing related charges, and other non-operating or non-recurring items that are considered expenses or income under U.S. GAAP. EBITDA and adjusted EBITDA are non-GAAP measures and represent a performance measure that is not intended to represent a liquidity measure.

Reconciliation of US GAAP measures to EBITDA, Adjusted EBITDA, Fundamental (Loss) Earnings and (Loss) Earnings Per Share: The reconciliation is included in Appendix A.

We do not provide reconciliation of our forward-lookingnon-GAAP measures to GAAP due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for GAAP and the related GAAP to non- GAAP reconciliation, including adjustments, that could be made for currency exchange rate fluctuations and other charges reflected in our reconciliation of historic numbers, the amount of which, based on historical experience, could be significant.

Discontinued operations: Refer to Note 3 to our Q4 2020 Form 10-K for discontinued operation disclosures. Unless otherwise specified, the results of KSNET and DNI are excluded from analysis included in this presentation.

3

CHAIRMAN'S INTRODUCTION

A Time of Change and Renewal at Net1

All changes with the aim of driving renewal at Net1 and unlocking value for shareholders in this deeply undervalued company.

• Material changes to the board during Q4:
• • 3 new directors appointed in May 2020
  • 4 long-serving directors announced their resignations in June 2020
  • Jabu Mabuza assumed the role of Board Chair in July 2020
  • Established Capital Allocation Committee
• Changes to the executive team post-Q4 2020:
• • CEO, Mr. Herman Kotze, announced that he will be stepping down from the role on September 30, 2020, after 22 years with Net1
  • CFO, Mr. Alex Smith, will take over as interim CEO until the board finalizes the appointment of a permanent CEO
• Strategic review process initiated during Q4 2020

5

STRATEGIC UPDATE

Net1's Core Competencies Today

Low cost financial services to		Secure payment processing, incl.
underserved consumers		offline and rural environments

• Net1 provides a suite of low-cost financial services to underserved and underbanked populations, through digital and brick & mortar distribution platforms.
• The financial services provided comprise: o Low-risk unsecured credit (Moneyline)
  o Transactional banking (EasyPay Everywhere) o Funeral insurance (SmartLife)
  o Airtime and other value-added services (EasyPay)

• Net1 provides secure payment processing services underlined by the following core technologies:
  o Net1's UEPS technology, which combines biometric authentication, last mile payment processing infrastructure, and cash interoperability to enable secure and accurate payments on a large scale, including in offline and rural environments
  o EasyPay'stransaction switch and bill payment technology
• Other payment processing capabilities include Point-of-Sale and ATM offerings

Net1 has unique competencies and infrastructure to drive financial inclusion for underserved consumers and underserved merchants. These competencies are proven in the South African market.

7

South Africa is Net1's primary market

Following the sale of KSNET in South Korea, South Africa is Net1's primary market. South Africa has, and continues to remain, the engine room and cash generator for the group.

SA as % of Revenue	SA as % of Employees
	0			0
3%	4%

97%

96%

South Africa		International		South Africa		International

8

South Africa in the International Context

Cash Payments as a % of Consumer Retail Payments by Country (2018)

Egypt

Indonesia

India

Philippines

Malaysia

Thailand

Turkey

South Africa

Brazil

UK

Australia

United States

Sweden

South Korea

99%

92%

90%

82%

78%

77%

65%

60% 59%

42%

37%

32%

20%

14%	1: Sources: McKinsey, BIS, Proprietary Research, Cash Essentials, Payments Diary Studies

South Africa remains primarily a cash economy with 60% of consumer retail
payments in cash. This is comparable to other middle-income economies like
Turkey and Brazil. Lots of room for secular shift away from cash to continue.	9

Total Addressable Market in South Africa

Consumer Finl Svcs: ~R57bn TAM

Consumer / B2C Revenue Pool1

Lending			Insurance
(Short-Term
R22B	R24B	(Funeral &
& Unsecured)
(21%)	(23%)	Credit Life)

R11B

(11%)

Transactional Banking (to LSM 1-6)

Unique feature of this underserved segment of the market is the relative sizing of funeral and credit life insurance, which is comparable in size to the revenue pool from lending.

Merchants: ~R104bn TAM

Merchant / B2B Revenue Pool2

Merchant

R30B Payments (28%)

R66B	R8B
(64%)
Merchant	(8%)Bill Payments
Lending

While bill payments are only 8% of the industry TAM, in the SMB segment bill payments are a primary use case and would be a larger part of the revenue pool.

Net1 has two sizable addressable markets in SA with a combined TAM of >R150bn.

1: Sources: South African Reserve Bank Long-Term Insurance Industry (2017), Solidarity Bank Charges Report (2019), Finscope South Africa (2013), NCR Consumer Credit	10
Report (2019)
2: Sources: Genesis Analytics (2018), BIS Data. Electrum, IFC Report (The Unseen Sector - A Report on the MSME Opportunity in South Africa)

Characteristics of Addressable Markets in SA

Consumer Financial Services / B2C

• Sizable market with underserved niches that align with Net1's core competencies
• Attractive unit economics in Net1's niche customer base - we know the customer base well and are able to price the risk
• However, industry's growth prospects are limited by the low single digit growth of consumer disposable income in South Africa

Merchant / B2B

• Secular growth driven by movement from cash to card payments
• • 13% CAGR in card payments since 2012
• Lots of room for the secular growth to continue
• • Cash is ~49% of transactions by volume and ~42% by value
  • Only ~33% of South Africa's 700k formal MSMEs are enabled to accept card payments
• Sizable underserved segments in SME/MSME
• Merchants are a stickier client base with higher switching costs and less churn than consumers

Both consumer and merchant financial services are sizable markets with underserved niches that align with Net1's core competencies - For consumers, the bottom-of-the- pyramid base and for merchants, the SME and MSMEs. The merchant side in particular has attractive secular tailwinds. Net1 well-positioned to serve both underserved markets.

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Strategic Vision: A FinTech Platform for Payment Processing and Financial Services to Underserved Merchants and Consumers

Illustration: Sample products and revenue streams from a single merchant

Cash Deposits/ Withdrawals

Insurance

MSME Merchant	Acquiring

Lending

Issuing		Bill Payment &
	VAS
	Turnover: ZAR 600,000/year

Addressable Total Take Rate

~2-5%

Layer multiple services in merchant and consumer propositions, increase revenue and	12
stickiness. There are ~700k and ~1.4m formal and informal merchants in S. Africa.

Strategic Vision: A FinTech Platform for Payment Processing and Financial Services to Underserved Merchants and Consumers

Key Licenses

and Approvals

Back Office

System and

Infrastructure

Capabilities

and

Technologies

Distribution

Infrastructure

National Credit Provider

Long-Term Insurance License

Principal Member Approval (or ISO

Mutual Banking License

Enables Net 1 (through

Enables Net 1 (through

relationship with a Principal Member)

Enables Net 1 to act as a Payment Clearing

Moneyline) to provide

Smartlife) to provide funeral

Enables Net 1 to issue accounts and

House, recycle cash, provide ATM acquiring

credit

policies

acquire merchants directly

services, take deposits and provide credit

Core Banking System supported

Other back-office processing

by a strong IT infrastructure

applications

Transactional Banking and

Cryptography

Payments Processing

UEPS

Financial

Brand

Lending

Capabilities

Capabilities

Technology

Switch

Products and

Offerings

Key

Customers

Branch

Fixed ATM

Mobile ATM

POS Terminals

Infrastructure

Infrastructure

Infrastructure

Consumer Facing Financial Services

SME & General Merchant Acquiring

Business

Consumer

Transactional

Funeral

VAS

SMME Financing

Merchant

Credit

Banking

Insurance

Offerings

Acquiring

MoneyLine

EPE

SmartLife

EasyPay

MoneyLine

Financial Switch

Deposits

Remittance

POS Acquiring

ATM Acquiring

Low LSM Consumers

Small & Medium Enterprises (SMEs)

Currently targeted by EPE,

Currently underserved by Net 1.

Moneyline and SmartLife

Mobile			Web
Applications			Applications
Other Payment Processing
Bill			Welfare		Issuing
Payments			distribution		Processing
EasyPay			UEPS		ATM
					Cards

Corporates & Utilities

Currently targeted by EasyPay

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FY 2021 | Short-Term Strategy

2021 Focus Areas

1) Accelerate rollout of services to underserved consumers in South Africa

Metrics:

1. • Expand banked customer base;
   • Increase penetration of financial services
2. Consolidate and buildout transaction and financial services for underserved merchants in South Africa

Metrics:

1. • Leverage existing solutions/capabilities into an off-the-shelf merchant offering;
   • Build out distribution channels to reach and service small merchants
2. Resolve corporate issues

Metrics:

• Address Investment Company issue

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QUARTERLY SUMMARY

Q4 2020

Quarterly Summary

Q4 2020 Company highlights include:

• Adjusted EBITDA loss was $9.1 million excluding impacts of COVID and one-off items
• Suspended fees and origination of financial services restarted on June 1, 2020
• Over 120,000 new loans originated in June 2020
• June revenue was approximately 24% higher than the average for April and May

Q4 2020 financial summary:

• Revenue from continuing operations of $26.0 million down 14% y/y in constant currency excluding the impact of reversal of SASSA implementation fee in Q4 2019
• Adj. EBITDA loss of $(12.2) million
• Fundamental loss per share of $(0.22)

Q4 2020 Investment portfolio update:

• Cell C's recapitalization is ongoing while reporting EBITDA of ZAR 1.8 billion in H1 2020
• Bank Frick reported net income of CHF 1.8 million in H1 2020
• Carbon operating at $12 million revenue run rate and is actively managing pandemic impact
• MobiKwik June Q revenue declined 12% Y/Y due to effects of a hard lockdown in India; Cash EBITDA loss was less than $1 million during the quarter

At June 30, 2020:

• $218 million unrestricted cash and zero debt
• Total equity of $375 million or $6.57/share
• Loan book outstanding at June 30, 2020 was ZAR 307 million, similar to Q3 2020 despite unwinding significantly in April and May

16

July and August 2020 Trends

Trends through August:

• Record transaction volumes for ATM network and EasyPay bill payments
• Over 120,000 loans issued in June compared to 30,000 in May and 500 in April
• 100% uptime of network
• Demonstrates relevance and importance of our network
• Developed and launched (in May 2020) new mobile phone-based loan origination channel

1 900		Bill Payment Volume ('000s)
1 800
1 700
1 600
1 500
1 400
1 300
1 200
1 100
1 000
Jan	Feb Mar Apr May Jun	Jul	Aug

Financial impacts:

• Net effect of COVID-related impacts was an adverse ZAR 45 million or $2.6 million to adjusted EBITDA
• Loan and financial service originations restarted on June 1, 2020
• As loan book grows rapidly, cash will be utilized at origination and then returned over the following six month period

17

NAV Breakdown

At the share price of $3.27, Net1 is trading at a significant discount to its NAV per share of $6.57, and a discount to its net cash balance of $3.81/share

$7.00

$6.00			$1.06	Other Net Assets Per
			Share
			$0.55	Other Long-term Assets
$5.00			Per Share
		$1.15	Equity Accounted
$4.00				Investments Per Share
$3.00
$2.00
	$3.27	$3.81
$3.04
	Net Cash Per Share
$1.00
-
Share Price at 30 June 2020	Share Price at 09 September 2020	NAV at 30 June 2020 *

* Redeemable common stock treated as ordinary equity

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FINANCIAL HIGHLIGHTS

Q4 2020

Q4 2020 Financial Report

Q4 2020 Financial Highlights

	Q4 2020	Q4 2019	Q3 2020
($ Millions)
Revenue	26	17	37
% change USD		52%	(29%)
% change Const. FX		86%	(20%)
Adjusted EBITDA	(12)	(7)	(6)
% change USD		68%	90%
EBITDA Margin (%)	(47%)	(43%)	(18%)
Fundamental Net Income*	(12)	(173)	(6)
% change USD		(93%)	95%
% change Const. FX		(91%)	119%
Fundamental EPS	$(0.22)	$(3.05)	$(0.11)
% change USD		(93%)
% change Const. FX		(91%)

Note:
(1) Adjusted EBITDA (loss) is adjusted for transaction related costs and other adjustments. Fundamental EPS also
includes these and other adjustments; see reconciliations in Appendix A for additional details.	20

Fiscal 2020 Financial Report

FY 2020 Financial Highlights

	FY 2020	FY 2019
($ Millions)
Revenue	151	166
% change USD		(9%)
% change Const. FX		12%
Adjusted EBITDA	(30)	(65)
% change USD		(53%)
EBITDA Margin (%)	(20%)	(39%)
Fundamental Net Income*	(59)	(257)
% change USD		(77%)
% change Const. FX		(72%)
Fundamental EPS	$(1.04)	$(4.53)
% change USD		(77%)
% change Const. FX		(72%)

Note:
(1) Adjusted EBITDA (loss) is adjusted for transaction related costs and other adjustments. Fundamental EPS also
includes these and other adjustments; see reconciliations in Appendix A for additional details.	21

Q4 2020 Financial Report

Business Segment Results - Q4 2020

ZAR Millions

USD Millions

800

700

600

500

400

300

200

100

-

11

9

8

6

5

3

2

-

Q4 constant currency SATP Revenue R 732

(36%)
R 268	R 245

(63%)(9%)

2018

2019

2020

Q4 USD ITP Revenue

$ 4

(14%)

	$ 2	$ 1
	(52%)	(28%)
2018	2019	2020

• SATP constant currency revenue down 9% vs. Q4 2019
• • Impact from lost revenue on certain transaction due to COVID-19 and FIHRST disposal
• ITP USD revenue down 28% vs Q4 2019
• • Lower international processing volumes
• FIAT constant currency revenue down 13% vs Q4 2019
• • Lower technology, telecom sales and insurance
  • COVID impacts on financial services

				Q4 constant currency FIAT Revenue
	700			R 617
	600
Millions	500
400					R 248		R 217
	300
ZAR
200				(60%)	(13%)
	100
	-									22
	2018	2019	2020

Q4 2020 Financial Report

Business Segment Results - Q4 2020

USD (Millions)	Revenue	Operating Income	Operating Margin
	4Q 2020	4Q 2019	4Q 2020	4Q 2019	4Q 2020	4Q 2019
SATP	$14	$19	$(5)	$(2)	(32%)	(13%)
% Change*	(9%)		125%
ITP	1	2	(4)	(3)	(290%)	(138%)
% Change*	(12%)		85%
FIAT	13	18	(2)	(11)	(19%)	(61%)
% Change*	(13%)		(72%)
Sub-total	28	38	(11)	(16)	(39%)	(41%)
% Change*	(53%)		23%
Inter-segment Eliminations	(2)	(21)	(2)	(39)	nm	nm
% Change*	(88%)		(93%)
Total	26	17	(13)	(52)	(51%)	(307%)
% Change*	86%		(69%)

*% change in constant currency

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Q4 2020 Financial Report

Balance Sheet Overview

USD (Millions)	June 30, 2020	Jun 30, 2019
Net Unrestricted Cash	$ 218	$ 20
Investments and Equity Accounted Investments	$ 93	$ 175
Total Assets	$ 454	$ 670
Total Equity	$ 375	$ 425
Total Debt	$ 0	$ 0
Book Value / Share	$ 6.57	$ 7.51
Net Cash / Share	$ 3.81	$ 0.35
Debt / Equity	0.00	0.00

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Q4 2020 Financial Report

Strategic Investments

	% held	Balance Sheet	Value
Equity Accounted:		(Jun2020)
Bank Frick	35%	$30 million	$30 million (1)
Finbond (JSE listed)	31%	$31 million	$36 million (2)
Carbon	25%	$7 million	$16 million (3)
Investments:
Cell C	15%	$0 million	$0 million
MobiKwik	13%	$27 million	$35 million (4)
TOTAL		$95million	$117 million

1. Based on carrying value
2. Jun30, 2020 value - 269m shares at R2.30 at $1/R17.33
3. Based on peer analysis of other neobanks
4. 13% of $290m (MobiKwik valuation at Bajaj investment) Values at carrying value unless stated otherwise

25

SEGMENT HIGHLIGHTS

Q4 2020

Q4 2020 | SATP Segment Highlights

Financial Highlights

• Revenue - $14 million
• • 9% constant currency decrease from $19 million in Q4 2019
  • 20% constant currency decrease compared to Q3 2020
  • Fee income lower by ZAR 27.0 million due to COVID-19
• Operating Loss - $5 million
• • Higher loss due to COVID-19 impact

27

Q4 2020 | ITP Segment Highlights

Financial Highlights (continuing operations)

• Revenue - $1.4 million
• • 28% decrease compared to Q4 2019
  • Contraction in international processing activities
• Operating loss - $(4) million
• • Ongoing losses from international unit

28

Q4 2020 | FIAT Segment Highlights

Financial Highlights (continuing operations)

• Revenue - $13 million
• • 13% constant currency decrease from $18 million in Q4 2019
  • 20% constant currency decrease compared to Q3 2020
• Operating loss - $2 million
• • Operating loss of $37 million in Q4 2019
  • Operating loss of $1 million in Q3 2020
• Number of Accounts
• • EPE and Finbond accounts remained relatively stable at 1 million as natural attrition in EPE offset by growth in Finbond
• Financial Services
• • Loan book growth towards end of Q4 2020, with performance reverting to historical averages. Insurance book stable.
  • Early Q4 2020 impacted by COVID-19 due to loan origination

restrictions	29

Q4 2020 | FIAT Segment Highlights (Cont'd)

Key Trends

Average Active EPE accounts

Millions	2.0
1.5
	1.0

0.5

0.0

As of quarter ended

Number of Paying SmartLife Policies

1. 000

1. 000

1. 000

1. 000

1. 000

1. 000

1. 000

1. 000

Q3FY19 Q4FY19 Q1FY20 Q2FY20 Q3FY20 Q4FY20

Value of Loans Outstanding

Millions	1 400
1 200
	1 000

800

600

400

200

0

	Outstanding Capital		Deferred Service Fees

30

Appendix A

Reconciliation of non-GAAP measures

Q4 2020 - Fundamental Net Loss and GAAP Net Loss

			Three months ended
	Jun-20			Jun-19
	$ '000		EPS, basic		$ '000		EPS, basic
Fundamental net loss (Non-GAAP)	(12,291)		(0.22)		(173,290)		(3.05)
Termination fee to cancel Bank Frick option	(17,517)			-
Loss on deconsolidation of CPS	(7,148)			-
(Loss) Gain on disposal of DNI	(1,010)			177
Stock-based charge	(558)			1,370
Interest related to SASSA implementation costs refund	(298)			-
Amortisation of intangible assets, net of tax	(58)			(2,785)
Impairment loss	-			(6,249)
Amortisation of intangible assets, net of tax - equity accounted investments	-			(655)
Transaction costs	-			(762)
Retrenchment costs, net of tax	-			(739)
Facility fee	-			(115)
Net loss attributable to net1 (GAAP)	(38,880)		(0.68)		(183,048)		(3.22)

Three months ended June 2020 has been restated for the misstatements described in Note 1 to the Company's Form 10-K for the year ended June 30, 2020

32

Reconciliation of non-GAAP measures

Q4 2020 - GAAP Net Loss and EBITDA loss

			Three months ended
	Jun-20			Jun-20
	$ '000		EPS, basic		$ '000	EPS, basic
Net loss attributable to Net1 (GAAP)	(38,880)		(0.68)		(183,048)	(3.22)
Loss on disposal of discontinued operation	279			-
Net income from discontinued operations, after tax	-			(1,272)
Non-controlling interest	-			10
Income) from equity-accounted investments	(1,082)			(1,611)
Income tax expense	339			272
Impairment of Cedar Cellular note	-			7,439
Interest expense	1,279			1,659
Interest income	(790)			(988)
Termination fee to cancel Bank Frick option	17,517			-
Loss on deconsolidation of CPS	7,148			-
Loss (Gain) on disposal of DNI	1,010			(177)
Change in fair value of equity securities	-			125,360
Impairment loss	-			6,249
Depreciation and amortization	996			3,019
EBITDA (Non-GAAP)	(12,184)				(43,088)
Adjusted for:
Accrual of implementation costs to be refunded to SASSA	-			34,039
Retrenchment costs	-			1,026
Transaction costs	-			762
Adjusted EBITDA (Non-GAAP)	(12,184)				(7,261)

33