Propel Holdings, Inc. · TSX:PRL
Propel — Investor Presentation (November 2022)
32 slides from Propel's investor presentation, Nov 21, 2022
Slide 1: Investor Presentation TSX:PRL November 21, 2022
INVESTOR PRESENTATION TSX:PRL November 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. Such statements are based on management’s reas
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 and Lending as a Service (LaaS) partnership Profita
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: Financial Inclusion for the Underserved Population
Financial Inclusion for the Underserved Population 32% 30% 25% 54% U.S. adults are Americans Canadians are Canadians say unable to afford a experience unserved or they’re living $400 emergency hardships due to underserved in paycheque to expense1 income volatility2 the credit market3 paycheque4 Inac
Slide 6: Propel Today
Propel Today 100% online At Scale Profitable $947M ~8.2M YTD Q3 2022 Fiscal 2021 in originations* unique applications per year** Revenue 86% 76% growth 947,000 ~20,000 Adjusted $26.6M $25.4M funded loans and unique applications EBITDA*** lines of credit* per day Net $10.1M $6.6M 400+ 2 Income Employ
Slide 7: Products
PRODUCTS Inclusive Transparent Evolving “MoneyKey was there for me when no one else was. They helped me with 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 7
Slide 8: Brands & Products
Brands & Products Propel Brand Fully amortizing installment Open-ended Lines of Open-ended Lines of loans Credit Credit Consumer Product Open-ended Lines of Credit State-Licensed Direct Lender Bank Partner Direct Lender Credit Services Operating Structure Organization/Credit Access Business Bank Sub
Slide 9: Personal Lines of Credit Launched November 21, 2022
Launched November 21, 2022 Personal Lines of Credit from $1,000 - $10,000 Maximum interest rate of 46.9% Currently offered in Ontario and Alberta with plans to roll out into additional provinces starting Q1 2023 The financial flexibility consumers have been looking for 9
Slide 10: Lending-as-a-Service (LaaS)
Lending-as-a-Service (LaaS) End-to-end solution for Pathward’s <36% APR lending product Borrower Purchaser 1 Sub-36% APR Originating bank Seamless integration Purchaser 2 into Propel’s proprietary infrastructure Purchaser 3 Fee and service revenue earned for services provided to Purchaser 4 Pathward
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. […] 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 65 person Major subsystems: in-house tech team proven 6-week Agile delivery cycle • Acquisition and underwriting engine (AI-powered) • Loan management system Customer self-service portal (mobile optimized) $17M+ • 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 Reducing Risk as we Scale 1,000+ Attributes Evaluate Credit Worthiness $600,000,000 Fund More 16% 14% $500,000,000 Alternative Credit Bureau
Slide 15: World Class Operations Team
World Class Operations Team Relentless focus on service and performance “I believe CreditFresh helped me out in a very difficult time. They were enthusiastic, supportive, interested in my personal needs… Thank you CreditFresh!!” ~ Joseph, CreditFresh Customer Excellent 4.6 ratings from thousands of
Slide 16: Financial Overview
FINANCIAL OVERVIEW Profitable Diversified Resilient “CreditFresh accepted me when no one else would. The process was quick and easy. The loan was very helpful. Thank you.” ~ Benjamin, CreditFresh Customer 16
Slide 17: Q3 2022 Financial Performance
Q3 2022 Financial Performance US$M Total Originations Funded* +75% in Q3 2022 and +108% for YTD Q3 2022 Loans and Advances Receivable Revenue Adjusted EBITDA* $166.3 $164.3 $27.0 $25.4 $22.7 $129.6 $20.0 $103.8 $88.5 $68.0 $73.5 $59.7 $8.8 $49.8 $8.0 $32.7 $5.0 $26.4 2019 2020 2021 Q3 2022 2019 2020
Slide 18: Q3 2022 Financial Performance: Revenue
Q3 2022 Financial Performance Revenue US$M Record Total Originations Funded*, Loans and Advances Receivable and Ending Combined Loan and Advance Balances* $164.3 Expansion into new states with 3 Bank Partners $129.6 Variable pricing and graduation capabilities New marketing partners and chan
Slide 19: Q3 2022 Financial Performance: Provision and Net Charge-offs
Q3 2022 Financial Performance Provision for loan losses and other liabilities (“Provision”) and Net Charge-offs* Q3 2022 Provision % Revenue reflects: 75% growth in Total Originations Funded* 58% IFRS-9 requires high provision at origination, 49% 53% 54% without commensurate revenue 47% 47% 42
Slide 20: Q3 2022 Financial Performance: Income and EBITDA
Q3 2022 Financial Performance US$M Net Income Adjusted Net Income* All metrics represent growth over prior year and record performance for a YTD period $10.1 $12.9 $11.9 $13.7 through Q3 $8.8 $7.3 $6.6 $9.2 Overall growth in revenue $4.2 Cost efficiencies $3.8 $2.0 $2.0 $2.2 Above is offset
Slide 21: Solid Financial Position
Solid Financial Position Company well funded for existing business, the launch of the Pathward and Canada growth initiatives and to support dividend Outstanding Debt Maturities (in US$M ) Increased CreditFresh credit capacity by $40 million to $160 million in Q3 2022 $160.0 MoneyKey (Capacity)
Slide 22: Growth Outlook: Operating and Financial Targets
Growth Outlook: Operating and Financial Targets Target 2022 2023 Ending Combined Loan and N/A 45% - 55% Advance Balances* Growth Rate Target Metric 2022 2023 $230 - $245 $345 - $375 Revenue million million Adjusted EBITDA Margin* 18% - 22% 25% - 30% Net Income Margin 7% - 9% 12% - 16% Adjusted Net I
Slide 23: Evolving into a Diversified Online Global Fintech Company
Evolving into a Diversified Online Global Fintech Company Adjacent products • Design, deliver and cross-sell Geographic expansion complementary • Expansion into products aligned new states and with Propel’s core jurisdictions purpose Serving lower risk markets Graduating • Extension of existing cons
Slide 24: Ready for Tomorrow
READY FOR TOMORROW Poised Focused Strategic “Excellent staff, outstanding services, affordable payment rates, very customer-friendly – CreditFresh is the best…!” ~ Linus, CreditFresh Customer 24
Slide 25: Appendix A
Appendix A s!PROPEL HOLDIN
Slide 26: Our Senior Leadership Team
Our Senior Leadership Team Clive Kinross Gary Edelstein Noah Buchman Sheldon Saidakovsky Co-Founder and President Co-Founder and Co-Founder and Chief Executive Officer Executive Vice President; Executive Vice President; President of CreditFresh Chief Financial Officer Sarika Ahluwalia Dr. Jonathan G
Slide 27: Board of Directors
Board of Directors Michael Stein Clive Kinross Peter Monaco Poonam Puri Geoff Greenwade Karen Martin Peter Anderson Mr. Stein is the founder, Co-Founder and CEO Mr. Monaco is Managing Ms. Puri is a professor of Mr. Greenwade was the Ms. Martin was the Mr. Anderson was the CEO Chairman and CEO of of
Slide 28: Appendix B
Appendix B s!PROPEL HOLDIN
Slide 29: Non-IFRS Measure Reconciliation
Non-IFRS Measure Reconciliation Three Months Ended Sept 30, Nine Months Ended Sept 30, Year Ended December 31, US$ 2022 2021 2022 2021 2021 2020 2019 Net Income 4,193,631 626,044 10,083,262 8,775,498 6,562,442 7,332,388 1,994,849 Interest on Debt 2,714,756 1,212,845 5,737,791 4,124,761 5,317,923 4,0
Slide 30: Non-IFRS Measure Reconciliation
Non-IFRS Measure Reconciliation US$ Three Months Ended Sept 30, Nine Months Ended Sept 30, Year Ended December 31, 2022 2021 2022 2021 2021 2020 2019 Net Income 4,193,631 626,044 10,083,262 8,775,498 6,562,442 7,332,388 1,994,849 Transaction Costs and Financing Costs net of - 239,826 - 270,697 1,212
Slide 31: Non-IFRS Measure Reconciliation
Non-IFRS Measure Reconciliation As at Sept 30, As at December 31, US$ 2022 2021 2021 2020 2019 Ending Combined Loan and Advance balances 1 208,380,159 96,841,777 134,843,170 62,643,735 37,339,842 Less: Loan and Advance balances owned by third (3,171,971) (3,204,174) (4,260,648) (2,487,802) (4,125,37
Slide 32: Non-IFRS Measure Reconciliation
Non-IFRS Measure Reconciliation US$ Three Months Ended Sept 30, Nine Months Ended Sept 30, Year Ended December 31, 2022 2021 2022 2021 2021 2020 2019 Charge-offs (31,916,477) (12,367,844) (81,878,195) (29,538,250) (46,898,488) (26,059,774) (30,146,501) Recoveries 4,762,551 1,896,699 10,916,704 4,315
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