• No results found

4finance investor presentation for 3 month 2016 results. 2 June, 2016

N/A
N/A
Protected

Academic year: 2021

Share "4finance investor presentation for 3 month 2016 results. 2 June, 2016"

Copied!
16
0
0

Loading.... (view fulltext now)

Full text

(1)

4finance investor presentation for

3 month 2016 results

(2)

1

Solid results delivered

• Revenue up 30% to EUR 90.3 million

• Regulatory changes implemented in 4 key markets

• Record quarterly profit of EUR 16.7m

Seeing benefits of new platforms and technology

• Mobile applications up to 32% of total (13% in Q1 ‘15)

• Marketing expense/revenue down to 15.4% (16.8% in Q1 ‘15) • Diversification into new markets and products is on track

• Preparations for Dominican Republic launch in June

• Instalment loans launched in Spain in May • Capitalisation continues to build

• 42% capital / assets ratio

• 62% capital / net loans ratio

Cost/revenue and asset quality trends are in line with expectations

Highlights of First Quarter 2016

69

90

Q1'2015 Q1'2016

Revenue

+30%

15.6

16.7

Q1'2015 Q1'2016

+7%

Net Profit

continuing

operations

m

EU

R

m

EU

(3)

Diversification by geography and product

13%

9%

25%

8% 6%

9% 14%

11%

4% 1% Latvia

Lithuania Poland Sweden Finland Denmark Spain Georgia Czech Rep. Other

Q1’2016 Revenue: EUR 90.3m

98

135

Q1 2015 Q1 2016

m

EU

R

Instalment Loan Portfolio (Gross)

(4)

3

11.6 11.8 12.1 14.6 13.8

6.3 8.3

11.9 12.9 13.9

2.4 2.9 0.6 5.2 3.2 6.3 7.3 7.9 11.8 11.5

38% 39% 39%

50% 47% 0% 10% 20% 30% 40% 50% 60% 0 10 20 30 40 50 60

Q1 Q2 Q3 Q4 Q1

E

UR

mi

lli

on

Marketing Staff IT Other Cost/revenue ratio, %

Quarterly expenses breakdown

Note: Other includes debt collection, legal and consulting, application inspection costs, communications, bank expenses, travel, rent and utilities, depreciation & amortisation and other expenses

Q1-3 figures reflect reported unaudited results and Q4 figures reflect balance to FY 2015 audited results

2015 2016

Marketing efficiency improving: marketing expense / revenue decreased to 15.4% (1Q16) from 16.8% (1Q15)

(5)

Country March 31, 2015

March 31, 2016 HQ (Latvia, UK) 199 304

Latvia 114 145

Lithuania 85 108

Finland 37 36

Sweden 34 40

Poland 243 350

Denmark 24 35

Spain 84 135

Czech Republic 75 135

Georgia 128 165

Bulgaria 19 52

Romania 10 37

Armenia 26

Argentina 32

Mexico 36

Miami 7

Dominican Republic 3

Total 1,052 1,646

Investing in staff to support future growth

Functions March 31, 2015

March 31, 2016

Management 33 58

Administration 23 36

Finance 74 117

Risk management 38 72

Customer care 396 676

Debt collection 234 256

IT and Product development 145 260

HR 32 42

Internal audit 6 7

Legal & Compliance 14 43

Marketing 52 73

Lean Management 5 6

(6)

5

Non-performing loans and provisioning

Conservative provision coverage

Non-performing loans (NPLs) as % of total loans issued

(1)

9.4% of total loans issued

Stable NPLs to issued loans ratio

(1)

9.2%

8.8%

9.0%

9.4%

2013 2014 2015 Q1 2016

Loans that are overdue more than 90 days are considered as non-performing (NPLs)

At the end of Q1 2016 NPLs represented 9.4% of total issued loans over the last 730 days

Actual loss experienced on NPLs is approximately 50% (51% as of 31/03/2016)

Provisions for default are typically 5-10 p.p. higher

(1) Total issued loans include the amount of loans issued during 730 days ending 90 days prior to the end of period EUR

1,867m 1,691mEUR

EUR 176m

Loans issued 01/2014-12/2015 (730 days)

NPLs as of 31/03/2016

Repaid and performing loans 31/03/2016

51%

59%

74%

8%

Loss given default Provision for default

portfolio

Provision coverage buffer

Overall provision coverage

(7)

Asset quality trends for single payment loans

0% 5% 10% 15% 20%

2013 2014 2015 Q1 2016

NPL

/ 2

yea

r

loa

n

issua

nce

Spain Georgia Denmark Czech Poland Finland Latvia Lithuania Sweden

Non-performing loans to loan issuance ratio tends to improve over time in each market

More data: better scorecards

More experience: better debt collection

More returning customers

Different characteristics for each market

Portfolio mix shift drives overall Group

NPL/sales ratio (eg growth in Spain)

Current trend is in line with expectations

Higher NPL ratio countries also have higher

interest rates and revenue

(8)

7

Google policy changes

30%

4%

16% 5%

12% 19%

14%

Direct

Paid Search (SPL, non branded) Paid Search (SPL, branded) Paid Search (Instalments) Affiliates

Organic Search

Other (email, phone, etc)

Lending volume by marketing

channel, 2015

Applies to entire industry

• Global policy update from Google

• Final restrictions not yet clear, expected in July …but does not reduce the underlying customer demand4finance is well positioned

• Diversified multi-channel marketing strategy

• Reduced emphasis on Google (drives <20% of lending volumes vs c.40% 18 months ago)

• Significant scale and resources to deploy • Strong brand recognition is critical

• Searches using our brand names make up c.80% of paid search

• Organic search rankings will drive traffic • Challenges we are addressing

• Reviewing possible changes to product profile

• Marketing approach for early phase of new markets

20% of volume from paid search for Single Payment Loans

(9)

Intended acquisition of TBI Bank

Potential to offer consumer loans in all European markets

– Certain EU countries require a banking license for consumer lending

– Gives greater flexibility in responding to changes in licensing / regulatory regimes for non-bank lenders • Potential to develop deposit funding

– Lower funding costs

– Diversify funding beyond capital markets • Potential to enhance credit card offering

– New product development already underway – Ability to control more of credit card value chain – Attractive market volume

Small, profitable, consumer-focused bank in existing markets (Bulgaria and Romania)

Track record of profitability

− EUR 4 million net profit in Q1 2016 − RoA of 6%, RoE of 27%

Strong capitalization

− 26% Tier 1 ratio (8.5% minimum) • Simple, deposit funded balance sheet

− EUR 168 million net customer loans − EUR 58 million cash

− EUR 279 million total assets − EUR 178 million customer deposits • Purchase price approx. EUR 75 million (c.1.25x

price/book)

• Closing expected in July 2016, subject to conditions

(10)

9

Financial Review

(11)

Financial highlights

36

46

64

17

24% 21% 20%

18%

2013 2014 2015 Q1'2016

Revenue, m EUR

Net profit (m

EUR

) and net margin

149

220

318

90

2013 2014 2015 Q1'2016

112

198

173

189

66

113

173

191

Net debt Total equity

Net debt

(1)

and total equity, m EUR

29%

31%

40%

42%

Capital to assets ratio, %

(1)

4.6x

3.7x

4.2x

4.0x

2013 2014 2015 Q1'2016

Adjusted interest coverage ratio

37%

47%

56%

62%

2013 2014 2015 Q1'2016

(12)

11

INCOME STATEMENT, M EUR Q1’2015 Q1’2016 % Change

Interest income 69.2 90.3 30%

Interest expense (7.1) (7.5) 6%

Net interest income 62.1 82.8 33%

Net impairment losses on loans and receivables (17.2) (22.3) 30%

General administrative expenses (26.6) (42.4) 59%

Other (expense)/income 1.3 1.8 38%

Profit before tax 19.6 20.0 2%

Tax (4.0) (3.2) (20)%

Profit from continuing operations 15.6 16.7 7%

Discontinued operations, net of tax 5.1

-Net profit 20.7 16.7 (19)%

Net impairment to revenue ratio %

25% 25%

Cost to income ratio % 38% 47%

Net profit margin, % 30% 18%

(13)

Balance sheet

KEY RATIOS Q1’2015 Q1’2016

Capital/assets ratio 35% 42%

Capital/net loan portfolio 49% 62%

Adjusted interest coverage ratio 3.4x 4.0x

Return on average equity(1) 51% 37%

Return on average assets(1) 16.7% 15.0%

BALANCE SHEET, M EUR Q1’2015 Q1’2016 % Change

Loans and advances 271.2 309.1 14%

Cash and cash equivalents 46.3 30.5 (34)%

Intangible assets (IT platform) 4.6 21.6 370%

All other assets 57.2 92.4 62%

Total assets 379.3 453.6 20%

Loans and borrowings 227.8 219.7 (4)%

All other liabilities 19.6 42.7 118%

Total liabilities 247.4 262.4 6%

Total equity 131.9 191.2 45%

(14)

13

144 153

167

198 201

224

249 258

276 282

268

160

177 184

218

234

261 272

301

320

351

334

0 50 100 150 200 250 300 350 400

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

m

EU

R

Total outgoing Total incoming

Last 12 months net incoming cash* EUR 223m

Loan portfolio cash flow

* From continuing operations

(15)
(16)

15

Solid first quarter results

Strong revenue growth and record quarterly profitability

Delivered alongside regulatory changes

Trends in expenses and risk in line with expectations

Laying the foundations for future growth

Investment in people & technology

Diversification: new markets on track, Instalment Loans on track

Funding: 5 year EUR 100 million bond

Strategic & corporate governance progress

Attractive bank acquisition with multiple potential business benefits

Separation of Chairman and CEO roles

Strengthening management team: George Georgakopoulos joins as CEO

References

Related documents

b) Purpose: The chosen parking lot drain in the Boynton St. parking lot of the WPI campus was identified as a sampling location due the the high amount of shallow concentrated

Inorganic Chemistry; Journal of Bioinorganic Chemistry; Journal of Theory and Computations, Proceedings of the National Academy of Sciences; Journal of the Brazilian Chemical

extended for the delivery of the stores shall be deemed to be the essence of the contract and the supplier shall deliver the goods and perform the services under the

Most of the class time is spent working on introductory conversational skills and includes the following topics: pronunciation, introductory phrases, and vocabulary that will

The high incidence of child labour is much higher in rural areas than urban areas and most of the child labour in rural areas is engaged in agricultural activities .During

This is an open access article under the CC BY-NC-SA license ( http://creativecommons.org/licenses/by-nc-sa/4.0/ )... guidelines have any relation to such experiences. It is

Yips and Lost Move Syndrome : assessing impact and exploring levels of perfectionism, rumination, and reinvestment.. Sport and exercise psychology review,

Keywords: activity-based working, work- style, workplace strategy, implementation approach, change