International Personal Finance. Debt Investor Update

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Millicent Jordan
8 years ago
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1 International Personal Finance Debt Investor Update April 2015

business model Digital business established Strong funding

2 International Personal Finance Profitable business and strong track record A tested and resilient home credit business model Digital business established Strong funding position, cash generation and robust balance sheet Strategy for growth 2

3 A tested and resilient home credit business model

4 Home credit business model Long-established, resilient and cash generative business model Small sum, short-term unsecured cash loans in local currency 100-2,000 loans repaid over around 14 months Money transfer or optional home collection service No default penalty charges on home collected loans Agents provide weekly face-to-face visits to customers homes Credit vetting in the home by agent and supported by application and behavioural scoring Low and grow lending strategy 4

5 Well-established home credit operations Sales process 30,000 agents Well-recognised brand National, regional and online marketing Strong customer retention Powerful credit management systems Based around customer and agent relationship, supported by application and behavioural scoring systems Collections process Field-based and debt recovery operations Prudent provisioning methodology Short-term loans and prudent provisioning means impairment charged to income statement quickly 5

6 Profitable business and strong track record

7 International Personal Finance Leading international consumer credit provider Long established, resilient and cash generative home credit business model Digital business established in 2014 Focused on markets with increasing demand for credit FTSE250 company with c. 1BN market capitalisation Listed on the London Stock Exchange in 2007 and the Warsaw Stock Exchange in markets in Europe & Mexico 2.6M customers 30,000 Agents 8,000 employees 123.5M 2014 PBT 7

8 Strong track record Profit before tax ( M) Impairment % revenue ** ** 123.5** 118.1** 35% 30% 25% 29.3% 29.9% 27.6% 27.0% 25.8% 26.6% 28.1% 23.2% 21.8% Target range * 20% * 61.7* 15% % 20 5% % * from continuing operations. ** profit stated before exceptional items 8

ratings Golden Purse Czech Republic recognised as one of the best providers of consumer

9 A valued and responsible business Top Employer Award 2014 Poland Excellence in Customer Service Award 2014 Hungary Ranked amongst best scoring financial services companies for ESG ratings Golden Purse Czech Republic recognised as one of the best providers of consumer credit Commendation for Have Your Share plan Silver Leaf Award Poland for sustainability strategy 9

10 Digital business established 10

over 1,000 customers MCB brings four new markets, two new products and delivery channels

11 Accelerating our digital strategy Launch of hapiloans and acquisition of MCB fits our multi-channel vision hapiloans commenced trading in December early performance encouraging with over 1,000 customers MCB brings four new markets, two new products and delivery channels Experience of lending to our target market Expansion plans being developed MCB hapiloans Strategic growth agenda 11

12 Regulation Quoted UK plc in FTSE 250 complying with all listing requirements Regulated by relevant national banks in a number of jurisdictions In all other markets operating under local consumer credit legislation Operate in rate cap environments in most European markets Good track record of evolving products and services 12

13 Strong funding position, cash generation and robust balance sheet 13

14 Strong financial profile FY 2012 FY 2013 FY 2014 Gearing* (Covenant max. 3.75x) 0.8x 1.0x 1.3x Interest cover** (Covenant min. 2.0x) 3.3x 3.4x 3.7x Equity to receivables ratio (Equivalent Tier 1 ratio) 57.8% 50.2% 47.5% Return on equity** 20.1% 22.9% 23.6% New target equity to receivables ratio 40% * Adjusted for derivatives and pension liabilities ** Adjusted for exceptional items 14

15 Strong cash generation M * 111.3* 116.7* 70.4* Cash generated from operations before receivables growth * From continuing operations Cash generated from operations after receivables growth 15

16 Home credit - good profit margins at maturity Revenue 100% Agents commission 11 12% Impairment 25%-30% Interest 6% Direct expenses 30%-35% Profit margin c.20%-25% Credit issued per customer 2014 Group 392 Poland-Lithuania 441 Czech-Slovakia 529 Hungary 438 Mexico 272 Romania-Bulgaria

17 We lend short, borrow long Receivables M % Borrowings M % Less than one year More than one year At 31 December

18 Strong funding position Long-term debt facilities from diversified sources at materially lower cost Refinanced core Eurobond at half the coupon: 300M 5.75% 7-year Eurobond issued New 40M 4.25% 4-year Eurobond 85% of 2010 Eurobond bought back Sources and maturity profile of debt facilities Bank facilities % Main Eurobond and retail bond Increased diversity of funding Over half of facilities have maturity dates in 2020/ % 51% 170M* headroom on funding facilities Other bonds Debt pari passu As at 31 st December

19 Strategy for Growth 19

Existing business, new markets New business, new markets Existing business,

20 Geographic expansion Substantial opportunities for balanced growth Focus on growing home credit business and expanding product and channel offering Existing business, new markets New business, new markets Existing business, existing markets New business, existing markets Product / channel expansion 20

21 Contact Nick Dahlgreen Group Treasurer Rachel Moran IR Manager International Personal Finance No 3 Leeds City Office Park Leeds LS11 5BD United Kingdom T: +44 (0) E: investors@ipfin.co.uk 21

Delivering continued growth

23 October International Personal Finance plc Interim Management Statement Delivering continued growth Highlights Further growth achieved o Q3 before tax increased by 19% to 32.5M o Strong underlying growth