Multitude Ag · XETR:MULT
Multitude — Ferratum — FY2018 Earnings Presentation
30 slides from Multitude's earnings presentation, Mar 14, 2019
Slide 1: Financial Results Full Year 2018
ferratum IFRS Unaudited |" Financial Results. Full Year 2018 14 March 2019
Slide 2: Forward-looking statements disclaimer
This presentation contains, or may be deemed to identify forward-looking statements. contain, forward-looking statements. These By their nature, forward-looking statements involve statements relate to future events or future financial risks and uncertainties because they relate to events Nothing in
Slide 3: Overview
ferratum Overview ferratum
Slide 4: 2018 Highlights
2018 Highlights – Results are well within the guidance range & operational improvement in 2H/18 was achieved ▪ 2018 Group revenues grew with +18.3% to EUR 262m, revenues within the guidance range of EUR 260m-265m ▪ 2018 EBIT up by 18.7% to EUR 37.9m, margin at 14.4% ▪ Approval rate issues with Credi
Slide 5: Key takeaways for 2018
Key takeaways for 2018 Consumer Business Mobile Bank loans loans ▪ FY performance well within guidance ▪ Risk procedures improved and overall cost base was decreased Years profitable Active & former Countries growth customers ▪ We have a positive outlook into the future FY 2018 Year-on-year Year-on-
Slide 6: Digital lending – product category evolution
Digital lending – product category evolution LOW LOAN AMOUNT HIGH All products are based on the same principles: PRODUCT: SOLUTION: Full digital setup and high user convenience, real-time, paperless LONG SME SME – Business loan offering for small and medium size companies Primeloan Primeloan - strat
Slide 7: Diversifying to address a range of borrowing needs
Diversifying to address a range of borrowing needs Average Average Loan Revenue FY Revenues by Active Products Loan Value Term Share Product (€,000) Markets Primeloan (incl. Mobile Bank ) 2017 529 +177.5% y-o-y €3,000 – €20,000 / €6,004 4.9 years 0.6% 2 (5) 1 – 10 years 2018 1,468 Business (SMEs) 20
Slide 8: Quarterly revenue by product
40.000 ▪ Credit Limit – Growth EUR ‘000 accelerating in Q3 and Q4 35.000 and back on track ▪ PlusLoan – remains stable 30.000 throughout 2018 25.000 ▪ Microloan – revenues stable/decreasing in line 20.000 with strategy ▪ SME – growth trend 15.000 continues ▪ Prime Loan: continued 10.000 growth but s
Slide 9: Total customers and active customers
Total customers* Active customers*** 792.080 782.220 2.000.622** 1.876.144 1,561,687 695.440 2016 2017 2018 2016 2017 2018 * Active and former customers who have been granted one or *** Customers with a Mobile Bank account and lending several loans in the past or has an open mobile account. customer
Slide 10: Operating costs have stabilized while revenue growth is recovering
Operating costs have stabilized Management progress while revenue growth is recovering to improve performance Accelerate growth of lending by improving risk & increase customer intake EUR ‘000 ▪ Improve conversion rate, scoring & underwriting 80.000 ▪ Processes for increasing customer intake and eff
Slide 11: Experience adapting to regulatory changes and interest rate caps
14 years of experience adapting to regulatory changes Ferratum’s experience with interest rate cap changes: Current and expected interest rate caps ▪ Adjusted pricing to meet legislation, leading to lower yield per loan Sweden – implemented in September 2018 ▪ Increased loan amount and term, leading
Slide 12: Estonia developments
Estonia Estonia developments Chart presented with indexed figures since 2014 ▪ Interest Rate cap introduced in 2015 1.400 90% ▪ Ferratum significantly reduced interest rate accordingly 80% 1.200 ▪ Portfolio increased significantly 70% 1.000 60% ▪ Portfolio return (Revenues/portfolio) down from 118%
Slide 13: Financial performance
Risk modelling review programme IFRS 9 adjustments Financial performance Balance sheet Operating cash flow Cost of capital and financing 13
Slide 14: Risk modelling review programme
2018 2019 Intended benefits Scoring Risk & IT Risk & Marketing to 2019: ▪ New heads of data science & ▪ New scorecard implementation ▪ 5 cylinder model ▪ Increase number of credit management appointed tool implemented (Score Mada) established – improving new customers handshaking ▪ Increase active ▪
Slide 15: IFRS 9 application
Ferratum Group applied IFRS 9 as of 1 January 2018. IFRS 9 requires the recognition of loans at fair value, therefore any expected losses must be accounted for at the disbursement date Based on the initial assessments undertaken in Q1 2018, the total adjustment (net of tax) of the adoption of IFRS 9
Slide 16: Accounts receivable and reserves under IFRS 9
1 Jan 2018 IFRS 9 (1 Jan 2018 Restated) IFRS 9 (31 Dec 2018) Gross AR Reserves Net AR % Gross AR Reserves Net AR % Gross AR Reserves Net AR % Not due 158,368 (4,695) 153,673 3.0% 158,368 (12,810 ) 145,558 8.1% 205,616 (13,898) 191,718 6.8% 1-90 days due 72,398 (17,649) 54,749 24.4% 72,398 (20,720) 5
Slide 17: Restated interim income statements
Based on the modifications during year end closing to the IFRS 9 based credit loss provisioning model, the subsequent credit loss calculations of the interim reports for 2018 had to be adjusted accordingly (all details availbale on www.ferratumgroup.com) Consolidated Income Statement for the Period
Slide 18: Revenue, EBIT, EBT and net profit
37,8 +18.3% 31,8 +18.7% 262,1 +43.8% 221,6 +50.7% 21,1 154,1 2016 2017 2018 2016 2017 2018 22.8* 25.3* 23.2 22,3 20,1 19,3 -3.9 % 15.6* -3.9% +54.6% 13.0 14,7 +57.8% 2016 2017 2018 2016 2017 2018 *Comparable FX neutral 18
Slide 19: Foreign exchange impact
Q1-Q4 ▪ The Group’s foreign exchange risk, mainly arises EUR’000 Q1 2018 Q2 2018 Q3 2018 Q4 2018 2018 from fluctuations of the Polish Zloty, Swedish Krona, AUD -0,193 0,045 -0,048 -0,055 -0,251 Czech Koruna, Australian Dollar and British Pound against the Euro CZK 0,049 -0,381 0,138 0,037 -0,157 ▪ F
Slide 20: Quarterly revenue and EBIT
EUR millions 80 72,0 70 66,0 61,4 62,8 60,6 60 57,3 53,7 50,0 50 45,5 37,2 38,2 40 33,2 30 20 12.4 8,1 8,9 10,1* 8,8* 6,9 6,8 8,0 6,5* 10 5,2 4,9 4,2 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Revenue EBIT *Restated, as per IFRS 9 adjustments 20
Slide 21: Operating profit (EBIT) up by 18.7%
Operating profit (EBIT) up by 18.7% EUR, 000 2018 2017 % Change ▪ EBIT increasing initiatives show effect – 2018 EBIT profitability level comparable to Revenue 262,148 221,638 +18.3% 2017 Other income 241 534 -54.8% ▪ Net financial cost include a € 2.8 million FX Impairment of loans (88,496) (75,629
Slide 22: Product margins by segment
Microloan PlusLoan Credit Limit SME Mobile Bank** Total EUR ,000 ▪ Credit Limit > 50% of 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 revenue share Revenue* 41,709 43,886 65,641 60,315 132,321 103,774 21,008 13,135 1,468 529 262,148 221,638 Impairments (19,692) (21,822) (20,477) (22,8
Slide 23: Still high cash level based on sound deposit volume
Still high cash level based on sound deposit volume but reducing 23 EUR ‘000 31 Dec 2018 31 Dec 2017 EUR ‘000 31 Dec 2018 31 Dec 2017 Assets Equity and liabilities Non-current assets 53,714 36,128 Equity 107,380 105,243 Accounts receivable – consumer loans (net) 320,538 257,406 Non-current liabiliti
Slide 24: Diversified rating
Diversified rating In March 2019, Fitch assigned Ferratum Oyj a Long-Term Issuer Default Rating of BB- / Stable Outlook • Credit rating assessed to international statistical standards by one of the top three global credit rating agencies • Fitch rating is in addition to the Group’s credit rating of
Slide 25: Cash flow
Assets 2018 2017 Net cash from operating activities before movements in portfolio and deposits 122,010 109,148 Net cash from operating activities (40,363) 33,324 Net cash used in investing activities (16,802) (11,329) Net cash used in financing activities 44,003 38,990 Net increase/decrease in cash
Slide 26: Funding and bond maturities
10 €25M €25M 9 €25M €100M 8 €40M €40M 7 6 €24.7M €20M 5 €20M €183.4M 4 €174.3M 3 2 1 0 2015 2016 2017 2018 Ferratum Capital Germany 8.00% 2018* Ferratum Capital Germany 5.5% + 3m Ferratum Capital Germany 4.00% 2018* Euribor 2022 Ferratum Capital Germany 4.875% 2019 Nordea Credit Line Ferratum Bank 6
Slide 27: Summary
ferratum Summary
Slide 28: Financial calendar and shareholders
Date Financial Calendar Events 14 Mar 2019 Ferratum Group 2018 preliminary results 27 Mar 2019 Ferratum Group full year 2018 results 17 Apr 2019 Ferratum Group AGM Ferratum Bank and Ferratum Capital Germany 29 April 2019 report 2018 published 16 May 2019 Ferratum Group Q1 results 21 Aug 2019 Ferratu
Slide 29: FY performance within guidance; 2019 EBIT guidance
• FY performance well within guidance • Risk procedures improved and overall cost base was decreased • 2019 EBIT guidance of > EUR 45m • Future focus is on EBIT development and profitability • Positive outlook for the future € millions 50 >45 45 40 37,8 35 31,8 30 25 21,5 20 16,5 15 10 5 0 0 2015 20
Slide 30: Investor relations contacts
Dr. Clemens Krause Emmi Kyykkä Paul Wasastjerna Ferratum Group Chief Financial Officer Head of Group Communications and Head of Investor Relations, Ratamestarinkatu 11 A Telephone: + 49 (0) 30 921005844 Investor Relations Fixed-Income 00520 Helsinki, Finland e-Mail: [email protected] Telep