Propel Holdings, Inc. · TSX:PRL
Propel — Investor Presentation (March 2022)
32 slides from Propel's investor presentation, Mar 21, 2022
Slide 1: Investor Presentation
INVESTOR PRESENTATION TSX:PRL March 21, 2022
Slide 2: Disclaimer
Disclaimer FORWARD-LOOKING INFORMATION Certain statements made in this presentation may constitute forward-looking information under applicable securities laws. These statements may relate to our financial and operating targets for fiscal 2022 and 2023, our preliminary Q4 2021 operational results al
Slide 3: Investment Highlights
Investment Highlights § Consumer-focused fintech lending platform § Leading-edge, AI-driven, agile tech infrastructure unlocking credit market opportunity § Innovative, transparent products and services, including 3 transformational bank programs § Profitable, scalable business with ample growth opp
Slide 4: Our Mission
OUR MISSION Inclusion Evolution Experience Every individual deserves Help consumers evolve to better Provide a best-in-class access to credit credit products over time consumer experience We facilitate access to credit for underserved consumers through our belief that every individual deserves credi
Slide 5: More than 25% of U.S. adults are unable to afford a $400 emergency expense
More than 25% of U.S. adults 3 in 10 U.S. adults are unable to afford a experience hardships due to $400 emergency expense income volatility Despite regulatory encouragement, +60M U.S. adults lack access to traditional credit from mainstream credit providers, making even a small unexpected expense a
Slide 6: Propel: the fintech platform for underserved consumers
PROPEL: the fintech platform for underserved consumers focused on helping 25% of U.S. adults get access to the credit they need 6
Slide 7: Financial Inclusion for the Underserved Population
Financial Inclusion for the Underserved Population Mainstream Bank Credit Products Legacy Products Online, scalable fintech offering convenient, fair and transparent access to credit with potential to build credit and NO surprise fees, DECLINED origination fees, late fees or prepayment penalties Tie
Slide 8: Propel Today
Propel Today 100% online At Scale Fintech Profitable $661M ~7.1M <10 second Fiscal 2021: in originations* unique applications per year** initial credit decisions 76% Revenue growth 836,500 31,000 ~88% $25.4M funded loans and unique applications per Adjusted EBITDA*** of applications lines of credit*
Slide 9: Products
PRODUCTS Inclusive Transparent Evolving “MoneyKey was there for me when no one else was. They help give me the money for bills I did [not] have a clue if I could pay. I’m really thankful that they came through for me.” ~ Christopher, MoneyKey Customer 9
Slide 10: Brands & Products
Brands & Products Propel Brand Consumer Product Operating Structure Fully amortizing installment State-Licensed Direct Lender loans Credit Services Organization/Credit Access Business Open-ended Lines of Credit Bank Sub-servicer Open-ended Lines of Credit Bank Partner Product and service offerings a
Slide 11: Putting Consumers First
Putting Consumers First OUR TYPICAL CONSUMER: Employed Consistently Lowered Graduation Ability to Improve Financial Wellness Cost of Credit Over Time Programs Low-Moderate Income Credit Score and Education • Over the last two • Propel platform • Some programs • Financial literacy years, the cost of
Slide 12: Platform to Succeed
Platform to Succeed Convenient Seamless Mobile “I would like to thank this company for helping me through this tough time. […] I would like for you to know that they see the best in you and will help in your time of need thank you so much.” ~ TyJuan, MoneyKey Customer 12
Slide 13: Industry-Leading Proprietary Technology Designed for Consumer Needs
Industry-Leading Proprietary Technology Designed for Consumer Needs 45+ person in-house tech team Major subsystems: proven 6-week Agile delivery cycle • Acquisition and underwriting engine (AI-powered) • Loan management system • Customer self-service portal (mobile optimized) $14M+ invested to date
Slide 14: Looking Beyond Traditional Credit Scores
Looking Beyond Traditional Credit Scores Our sophisticated AI-powered engine with machine learning algorithms provides opportunities for creditworthy consumers 1,000+ Attributes Evaluate Credit Worthiness $600,000,000 Fund More 16% 14% $500,000,000 Alternative Credit Bureau Data Sub-10 second, Misse
Slide 15: World Class Operations Team
World Class Operations Team Relentless focus on service and performance “I believe CreditFresh helped me out in a very difficult time. They were enthusiastic, supportive, interested in my personal needs… Thank you CreditFresh!!” ~ Joseph, CreditFresh Customer Excellent 4.5 and 4.6 ratings from thous
Slide 16: Financial Overview
FINANCIAL OVERVIEW Profitable Diversified Resilient “CreditFresh accepted me when no one else would. The process was quick and easy. The loan was very helpful. Thank you.” ~ Benjamin, CreditFresh Customer 16
Slide 17: Q4 2021 and Fiscal 2021 Financial Performance
Q4 2021 and Fiscal 2021 Financial Performance Total Originations Funded* +123% in Fiscal 2021 Loans and Advances Receivable Revenue Adjusted EBITDA* US$M US$M $129.6 US$M $103.8 $25.4 $20.0 $73.5 $68.0 $49.8 $41.2 $8.0 $26.4 $22.4 $4.0 $2.6 2019 2020 2021 2019 2020 2021 Q4 2020 Q4 2021 2019 2020 202
Slide 18: Q4 2021 and Fiscal 2021 Financial Performance
Q4 2021 and Fiscal 2021 Financial Performance Revenue US$M § Record Total Originations Funded*, Loans and Advances Receivable and Ending Combined Loan and Advance $129.6 Balances* § Expansion and growth in bank programs: new bank partner; bank partners rolled out 10 new states each through MoneyKey
Slide 19: Q4 2021 and Fiscal 2021 Financial Performance
Q4 2021 and Fiscal 2021 Financial Performance Provision for loan losses and other liabilities (“Provision”) and Net Charge-offs* § Net-Charge-offs as % of Funded* decreasing over the long-term due to evolution towards lower-risk 49% consumers in portfolio 53% 50% § Q4 2021 and fiscal 2021 performanc
Slide 20: Q4 2021 and Fiscal 2021 Financial Performance
Q4 2021 and Fiscal 2021 Financial Performance Net Income Adjusted Net Income* US$M US$M $7.3 $12.9 $6.6 $9.2 § Profitability metrics impacted by: $2.0 § Up-front costs that support record revenue $2.0 $1.2 $1.0 growth 2019 2020 2021 Q4 2020 Q4 2021 2019 2020 2021 Q4 2020 Q4 2021 § Public company cos
Slide 21: Solid Financial Position
Solid Financial Position § IPO and over-allotment proceeds deployed towards: Outstanding Debt Maturities § Portfolio expansion (in US$M ) § Supporting roll-out of bank programs to new states MoneyKey (Capacity) $120.0 MoneyKey (Utilized) § Temporary repayment of debt CreditFresh (Capacity) § Over $9
Slide 22: Updated Operating and Financial Targets
Updated Operating and Financial Targets Target CAGR 2022 2023 Ending Combined Loan and Advance Balances* Facilitated over the Propel 80% - 90% 45% - 55% Platform Target Metric 2022 2023 Revenue $230 - $245 million $345 - $375 million Adjusted EBITDA Margin* 18% - 22% 25% - 30% Net Income Margin 7% -
Slide 23: Ready for Tomorrow
READY FOR TOMORROW Poised Focused Strategic “Excellent staff, outstanding services, affordable payment rates, very customer-friendly – CreditFresh is the best…!” ~ Linus, CreditFresh Customer 23
Slide 24: Evolving into a Diversified Online Global Fintech Company
Evolving into a Diversified Online Global Fintech Company Adjacent products • Design, deliver and cross-sell Geographic expansion complementary • Expansion into products aligned new states and with Propel’s core jurisdictions purpose Serving lower risk markets Graduating • Extension of existing cons
Slide 25: Appendix A
Appendix A g!PROPEL HOLDIN
Slide 26: Our Senior Leadership Team
Our Senior Leadership Team Clive Kinross Gary Edelstein Noah Buchman Sheldon Saidakovsky Co-Founder and President Co-Founder and Co-Founder and Chief Executive Officer Executive Vice President; Executive Vice President; President of CreditFresh Chief Financial Officer Sarika Ahluwalia Dr. Jonathan G
Slide 27: Board of Directors
Board of Directors Michael Stein Clive Kinross Peter Monaco Poonam Puri Geoff Greenwade Karen Martin Yousry Bissada Mr. Stein is the founder, Co-Founder and CEO Mr. Monaco is Managing Ms. Puri is a professor of Mr. Greenwade was the Ms. Martin was the Mr. Bissada is President Chairman and CEO of of
Slide 28: Appendix B
Appendix B g!PROPEL HOLDIN
Slide 29: Non-IFRS Measure Reconciliation
Non-IFRS Measure Reconciliation Three Months Ended Dec 31, Year Ended Dec 31, US$ 2021 2020 2021 2020 Net Income (2,213,057) (1,130,772) 6,562,442 7,332,388 Interest on Debt 1,193,162 1,163,830 5,317,923 4,052,783 Interest on lease liabilities 106,035 111,498 440,043 468,428 Amortization of internal
Slide 30: Non-IFRS Measure Reconciliation
Non-IFRS Measure Reconciliation Three Months Ended Dec 31, Year Ended Dec 31, 2021 2020 2021 2020 Charge-offs (17,360,239) (5,715,458) (46,898,488) (26,059,774) Recoveries 2,593,659 322,510 6,909,063 3,874,018 Net charge-offs1 (14,766,580) (5,392,948) (39,989,425) (22,185,756) Change in Provision fo
Slide 31: Non-IFRS Measure Reconciliation
Non-IFRS Measure Reconciliation Three Months Ended Dec 31, Year Ended Dec 31, 2021 2020 2021 2020 2019 Net Income (2,213,057) (1,130,772) 6,562,442 7,332,388 1,994,849 Transaction Costs and Financing Costs net of 944,500 2,901 1,212,643 19,181 18,814 taxes2 Provision for credit losses on current sta
Slide 32: Non-IFRS Measure Reconciliation
Non-IFRS Measure Reconciliation As at Dec 31, 2021 2020 Ending Combined Loan and Advance balances 1 134,843,170 62,643,735 Less: Loan and Advance balances owned by third (4,260,648) (2,487,802) party lenders pursuant to CSO program Less: Loan and Advance balances owned by a (17,782,252) (3,316,386)