FirstCash Holdings, Inc. · NASDAQ:FCFS
FirstCash — Investor Day (November 2016)
38 slides from FirstCash's investor day presentation, Nov 10, 2016
Slide 1: Analyst & Commercial Banker Day
Analyst & Commercial Banker Day November 10, 2016 1
Slide 2: Forward Looking Information
Forward Looking Information “This presentation contains “forward-looking statements” (as defined in the Securities Litigation Reform Act of 1995) regarding, among other things, future events or the future financial performance of FirstCash. Words such as “anticipate,” “expect,” “project,” “intend,”
Slide 3: Today's Agenda
Today’s Agenda 8:30-10:00 Management Presentation • Merger Overview • Domestic Operations • LatAm Operations • Looking Ahead 10:30-12:15 Store Tours 12:45-2:00 Lunch 2:00-2:30 Bus to Airport 2:00-3:30 Stadium Tour 3
Slide 4: Merger Review & Update
Merger Review & Update pirstcasn Cash Ameri¢a Sh
Slide 5: Strategic Rationale for Merger
Strategic Rationale for Merger • Enhanced scale and geographic reach – Creates leading operator of more than 2,000 retail pawn stores with operations in the United States and three Latin American countries – Market Cap of over $2 billion • Strong cash flows and financial flexibility – Financial stre
Slide 6: 25 Year Combined History
25 Year Combined History Total Assets (millions) $2,278 $716 $239 $555 $216 $161 $22 1992 2004 As of 9/30/16 FCFS CSH Sources: Factset; CapIQ; Public Filings; Internal Documents 6
Slide 7: 25 Year Combined History
25 Year Combined History Revenue (millions) $1,780 $649 $469 $194 $185 $180 $9 1992 2004 LTM 9/30/2016, Pro Forma FCFS CSH Sources: Factset; CapIQ; Public Filings; Internal Documents 7
Slide 8: 25 Year Combined History
25 Year Combined History Store Count 2,081 1,123 839 378 355 284 23 1992 2004 As of 9/30/16 FCFS CSH Sources: Factset; CapIQ; Public Filings; Internal Documents 8
Slide 9: Integration Strategy
Integration Strategy • Corporate Office – Headquarters in Fort Worth, Texas – Significant opportunities to consolidate corporate expenses and support functions • Stores – Maintain existing footprints – no planned consolidation or closures of pawn stores – Maintain established “brands” in local marke
Slide 10: First Pawn Technology Platform
First Pawn Technology Platform Proven, Propriety Pawn Store Operating System Pawn Transactions Retail Ops • Collateral Valuation • Retail POS • Pawn Contracts • Pricing • Customer Loan Disbursements • Inventory Management & Repayments • Layaways • Collateral Storage • Compliance Customers Merchandis
Slide 11: Technology Integration Plan
Technology Integration Plan • All stores will standardize on the First Pawn system • Benefits at the store: – Improved transaction times and system reliability – Real-time pricing look-ups to determine optimum loan to value ratio – Improved on-demand reporting of key performance indicators – Reduced
Slide 12: Synergy Update
Synergy Update • Estimated cost synergies continued to be forecast at $45 million – Headcount efficiencies – Technology support costs – Interest savings • Estimated D&A synergies of up to $20 million – Primarily related to technology integration • Potential future store-level synergies – Store opera
Slide 13: Domestic Operations
Domestic Operations = —h
Slide 14: Domestic Footprint: 1,128 Stores
Domestic Footprint: 1,128 Stores Store Count as of 9/30/2016 FCFS States CSH States Shared States 14
Slide 15: Domestic Locations
Domestic Locations Store Count At End of Period 1,400 1,178 1,190 1,200 1,160 1,107 1,128 57 65 42 40 39 25 1,007 65 21 20 982 979 1,000 951 930 937 83 67 252 266 296 99 74 291 86 103 86 102 88 211 800 96 157 304 135 295 248 97 600 95 94 94 829 820 748 801 792 400 682 697 641 485 475 486 200 - 2006
Slide 16: Domestic Locations: Acquisitions and Start-Ups
Domestic Locations Acquisitions and Start-Ups 90 First Cash - Domestic Cash America - Domestic 80 2015: Quick Cash (25) 2013: Top Dollar (41), PawnMart (34) 2014: PHC (15) 2012: Pawn & Bargains (25) 70 2013: Valu + Pawn (19), Money Man (12) 2010: Maxit (39) 2012: Mister Money (24) 60 50 40 30 20 10
Slide 17: Population Growth by US State
Population Growth by US State Top 15 States by 2015 Population 2015 Store Store % of 2015 Pop. Growth Rank Banked Quartile Pop. Rank Count Dom. TOT vs. 2014 vs. 2013 Un- Under- CA 1 11 1.0% 3 2 Q3 Q2 TX 2 416 36.9% 1 1 Q4 Q4 FL 3 77 6.8% 2 3 Q3 Q2 NY 4 0 0.0% 15 11 Q3 Q4 IL 5 25 2.2% 51 51 Q3 Q1 PA
Slide 18: Domestic Population Growth by Origin
Domestic Population Growth by Origin YoY Change in Population and Hispanic Growth by State (2015 vs. 2013) Total Non Hispanic Hispanic Hispanic Population 2015 Growth Rank Pop. Rank vs. 2013 California 1 2 Texas 2 1 Florida 3 3 New York 4 4 Illinois 5 11 Arizona 6 5 New Jersey 7 6 Colorado 8 8 2.2%
Slide 19: Average Loan & Average Gold Price
Average Loan & Average Gold Price Domestic Stores $200 $2,000 185 178 171 171 169 163 $160 $1,600 Average Price of Gold Per Ounce 145 146 148 142 144 141 Average Loan $120 $1,200 $80 $800 $40 $400 $0 $0 2011 2012 2013 2014 2015 YTD Sep 2016 CSH FCFS Avg. Gold Price 19
Slide 20: Reduced Reliance on Scrap
Reduced Reliance on Scrap (000’s) $90,000 200 80,953 186 $80,000 180 $70,000 160 140 $60,000 119 111 120 Gold Ounces $50,000 Scrap GP 87 100 $40,000 33,124 74 80 $30,000 60 $20,000 17,218 12,114 40 6,884 8,494 $10,000 20 4,064 3,347 1,850 $0 0 -911 -$10,000 -20 2012 2013 2014 2015 TTM Sep 2016 CSH F
Slide 21: 10 Year Legacy Store Analysis
10 Year Legacy Store Analysis Positive Comps Despite Recent Headwinds1 Legacy Store Count 2 434 92 Retail Sales 3.0% 1.0% Retail Sales GP 0.9% 1.2% Pawn Fees 4.1% 3.9% Core Pawn Gross Profit 2.9% 2.8% Core Store Contribution 3 4.9% 5.1% Pawn Loan Balance 2.1% 2.3% 1CAGR is calculated over the period
Slide 22: Latin America Operations
Latin America Operations = Sh
Slide 23: Latin America Locations
Latin America Locations Store Count At End of Period 1,000 953 900 800 737 700 674 637 644 566 585 600 505 500 953 381 447 400 386 737 329 597 674 300 538 207 269 200 157 100 207 176 180 190 157 112 47 47 - 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 YTD Sep CSH FCFS 2016 23
Slide 24: LatAm Locations: Acquisitions and Start-Ups
LatAm Locations Acquisitions and Start-Ups 250 First Cash - LatAm Cash America - LatAm 2016: Maxi Prenda - El Salvador (13) 2008: Prenda Facil (112) 200 2016: Maxi Prenda - Mexico (166) 2015: Maxi Prenda - Guatemala (32) 2014: Cash America - Mexico (47) 150 2012: Cash & Go (49) 100 50 0 2006 2007 20
Slide 25: Foreign Exchange Rates – YTD Average
Foreign Exchange Rates – YTD Average Mexican Peso to US Dollar EPS Impact* $0.06-$0.08 20.0 EPS Impact* $0.06-$0.10 19.0 18.0 EPS Impact* 17.0 $0.08-$0.12 16.0 15.0 EPS Impact* $0.10-$0.14 14.0 13.0 12.0 11.0 10.0 *Annualized impact of a “one point” (one peso) movement in the exchange rate vs. the U
Slide 26: LatAm Revenue Growth
LatAm Revenue Growth (millions) $700 9 Year CAGR $641 22.9% $600 $527 $500 $468 $419 $378 $400 $312 $300 $250 $206 $200 $388 $402 $143 $363 $368 $322 $101 $281 $222 $100 $175 $141 $101 $0 2007 2008 2009 2010 2011 2012 2013 2014 2015 T12M, Sep-2016 Total Revenue, USD CC Revenue, 2007 MXN* *Constant c
Slide 27: Case Study: Cash America Mexico
Case Study: Cash America Mexico TTM Sep-16 vs. TTM Sep-14 Per store contribution1 growth of 169% (MXN) 9,000 20.0% Thousands 8,008 8,000 7,575 7,695 18.0% 7,217 16.0% 7,000 14.0% 6,000 12.0% 5,000 10.0% 4,000 8.0% 3,000 6.0% 2,000 1,338 4.0% 1,081 856 1,000 2.0% 126 - 0.0% 2013 2014 2015 TTM Sep 201
Slide 28: Maxi Prenda Update
Maxi Prenda Update • Merger Highlights – Acquired 211 Maxi Prenda stores in late 2015 and early 2016 – Stores located in Southern & Central Mexico, Guatemala & El Salvador • Integration Update – Most corporate functions fully integrated at this point – Reduced approximately 90% of corporate staff an
Slide 29: Population Growth for Mexico
Population Growth for Mexico Store Count as of 9/30/2016 BAJA CALIFORNIA 2015 Pop. Store Pop. Projections 74 (millions) Count 2030 2050 SONORA Mexico 128.6 907 148.1 163.8 24 CHIHUAHUA 39 COAHUILA U.S. 323.9 1,128 359.4 398.3 BAJA 41 SUR 9 SINALOA NUEVO LEON 19 DURANGO 65 14 TAMAULIPAS ZACATECAS 6 S
Slide 30: Population Growth for Central America
Population Growth for Central America Store Count as of 9/30/2016 2015 Pop. Store Pop. Projections Belmopan BELIZE (millions) Count 2030 2050 Guatemala 16.6 33 21.3 27.6 GUATEMALA Honduras 8.2 0 10.2 12.6 33 HONDURAS El Salvador 6.4 13 6.7 6.7 Guatemala Nicaragua 6.3 0 7.5 9.1 Tegucigalpa Costa Rica
Slide 31: New Market Update
New Market Update Population Growth for South America GUYANA 2015 Pop. Pop. Projections VENEZUELA SURINAME (millions) 2030 2050 FRENCH GUIANA COLOMBIA* Brazil 206.1 223.1 226.3 ECUADOR Colombia* 48.8 53.3 55.0 Argentina 43.6 49.1 55.2 Peru 31.5 35.9 40.1 BRAZIL Venezuela 31.0 36.1 40.5 PERU Chile 18
Slide 32: Looking Ahead
Looking Ahead = Sh
Slide 33: Store Growth
Store Growth Projected 2016 Projected Adds Projected 2017 Domestic 1,128 10 1,138 Pawn Lending Only 757 10 767 Consumer Lending Only 45 0 45 Pawn & Consumer Lending 326 0 326 Latin America 958 75 1,033 Pawn Lending Only 881 75 956 Consumer Lending Only 28 0 28 Pawn & Consumer Lending 49 0 49 Consoli
Slide 34: Balance Sheet
Balance Sheet (millions) $2,500 Liabilities to Equity $2,278 Ratio 58.9% $285 $2,000 $972 $560 $1,500 $1,000 $1,433 $1,306 $500 $0 Assets Liabilities and Equity Operating Assets Intangibles Equity Interest Bearing Liabilities, Prin Outstanding Other Liabilities 34
Slide 35: Leverage Profile
Leverage Profile (millions) $600 $560 $436 Increase in debt due to transaction costs and $500 redemption of Cash America RSUs $4 $400 $360 $181 $300 Maturity $51 Date 6/30/2016 9/30/2016 $200 Cash America Line of Credit 3.69% - Cash America Notes 5.75% - $200 First Cash Line of Credit 3.00% - $100 $
Slide 36: Consumer Lending Update
Consumer Lending Update • Consumer Lending Revenues and Store Counts Continue to Strategically Diminish – Year-to-date (Sept. 30) proforma revenues down 19% – 18 total consumer loan store closings in 2016 (includes Cash America and First Cash) – Expected to be 5% of total revenues in 2017 • Enova Sh
Slide 37: Shareholder Payout Strategy
Shareholder Payout Strategy • Target shareholder payout of up to 50% of Net Income • Increased Dividend – Previous Cash America Dividend: $0.32 per share – Previous First Cash Dividend: $0.50 per share – New Dividend Policy: $0.76 per share • Future Share Buybacks – No buybacks in 2016 given merger
Slide 38: Analyst & Commercial Banker Day
Analyst & Commercial Banker Day November 10, 2016 38