International Personal Finance Plc · LSE:IPF
International Personal Finance — H1 2022 Earnings Presentation
29 slides from International Personal Finance's earnings presentation, Jul 27, 2022
Slide 1: IPF plc 2022 half-year results
IPF plc 2022 half-year results Building a better world through financial inclusion Gerard Ryan – CEO Gary Thompson – CFO Wednesday 27 July 2022
Slide 2: Delivered strong financial performance
DELIVERED STRONG FINANCIAL PERFORMANCE Underlying profit before tax growth of 45% £43.3m £33.8m £33.8m • Excellent operational performance and strengthened £23.3m customer proposition 45% • All businesses profitable • Robust funding position and well-capitalised balance sheet H1-21 H1-22 H1-21 H1-22
Slide 3: Delivering sustainable growth
DELIVERING SUSTAINABLE GROWTH Strong growth in customer lending and excellent credit quality * 14% • Strategy successful in returning the Group to sustainable growth Customer lending £982m £513m • Meeting improvement in consumer demand with broadening product family * • Customer lending growth in al
Slide 4: Our purpose and strategy
IPF plc 2022 half-year results Our purpose and strategy Gerard Ryan, CEO
Slide 5: Clear alignment between purpose, strategy and financial model
CLEAR ALIGNMENT BETWEEN PURPOSE, STRATEGY AND FINANCIAL MODEL Financial model Delivering ROE 15%+ Strategy Deliver excellent service to our loyal customers and increase product choices and channels to attract the next generation Our purpose Building a better world through financial inclusion 5
Slide 6: Our strategy
OUR STRATEGY Enhancing our proposition to be more attractive and relevant to customers Investing in technology ✓ Digitise onboarding ✓ Customer app ✓ Mobile wallet ✓ Omni channel Enhancing customer Expanding product range experience Building distribution ✓ Mobile wallet ✓ Retail partnerships ✓ Loan
Slide 7: Financial performance
IPF plc 2022 half-year results Financial performance Gary Thompson, CFO
Slide 8: Changes to terminology and KPIs
CHANGES TO TERMINOLOGY AND KPIs Reflecting our broader distribution channels and alignment with other consumer finance lenders Terminology changes Previous terminology New terminology Credit issued Customer lending Collections Customer repayments KPI changes Previous KPI New KPI Revenue divided by a
Slide 9: Target financial model
TARGET FINANCIAL MODEL Rigorous financial discipline delivering sustainable returns ROE 15%+ • We are currently growing receivables at a rate greater than 10% as we rebuild scale: - Capital in excess of our 40% equity to receivables target is being used to fund the Maintains Target Supports extra gr
Slide 10: Target KPIs
TARGET KPIs Delivering a 15%+ ROE Targets H1-22 FY-19 • Target yield reflects a more sustainable level than FY-19 following: Equity to receivables 40% 52% 45% Revenue yield 53%-56% 50% 59% - Changes in rebates in Poland - Closure of Finland and price caps in the Impairment rate 14%-16% 8% 16% Baltic
Slide 11: Strong lending growth
STRONG LENDING GROWTH Group customer lending up 14% £116.4m £108.8m • IPF Digital: £87.5m £84.0m 24%* 32%* - Mexico +90%* - Poland +60%* - Australia +20%* - Baltics +25%* H1-21 H1-22 H1-21 H1-22 IPF Digital Mexico home credit • Mexico home credit: £288.0m £288.1m - 470 new agencies opened in H1-22 -
Slide 12: Strong receivables growth
STRONG RECEIVABLES GROWTH * Group closing net receivables growth of 14% £770m • Strong growth more than compensated for £18m £717m £674m reduction from Finland and Spain which are in collect out * • H1-22 growth of 14% higher than financial model growth of 10% as we rebuild scale: - Extra growth fun
Slide 13: Strong progress against all KPIs (1)
STRONG PROGRESS AGAINST ALL KPIs (1) Annualised revenue yield Annualised impairment rate Annualised cost-income ratio 7.5% 65.8% 65.0% 47.7% 49.8% 6.5% 2.1ppts 1ppt 0.8ppts H1-21 H1-22 H1-21 H1-22 H1-21 H1-22 • Mexico home credit returned to a more • Impairment rate remains artificially low: • H1-21
Slide 14: Strong progress against all KPIs (2)
STRONG PROGRESS AGAINST ALL KPIs (2) Profit before tax Pre-exceptional EPS Annualised pre-exceptional ROE £43.3m 10.3p 9.1p 10.4% £33.8m 45% 1 5.5p 65% 1 6.4% 4.0ppts £23.3m Underlying Underlying Reported Reported H1-21 H1-22 H1-21 H1-22 H1-21 H1-22 • Underlying profit growth reflects • EPS stated b
Slide 15: Robust funding and capital position
ROBUST FUNDING AND CAPITAL POSITION Bonds Total debt facilities £408m • Well-diversified funding • Bank funding extensions of £46m completed recently Banks £571m • Funding rate of 12.2% (H1-21: 10.6%) £163m • Credit ratings unchanged: - Fitch BB-, Outlook stable - Moody’s Ba3, Outlook stable 1 • Str
Slide 16: Regulation and outlook
IPF plc 2022 half-year results Regulation and outlook Gerard Ryan, CEO
Slide 17: Outlook
OUTLOOK • Significant long-term demand for affordable credit • Expanding product / channel options to attract next generation customers • Leveraging technology to drive scale and improve customer experience • Navigating challenging macroeconomic and geopolitical landscape • Good sustainable growth i
Slide 18: Questions
IPF plc 2022 half-year results Building a better world through financial inclusion Questions
Slide 19: Appendix
IPF plc 2022 half-year results Building a better world through financial inclusion Appendix
Slide 20: Target KPIs: delivering a 15% ROE
Target KPIs: DELIVERING A 15% ROE Illustrative P&L (based on lower range of targets) Key performance indicator Targets £ Equity to receivables 40% Revenue 80 Gross receivable x revenue yield (£151 x 53%) Revenue yield 53%-56% Impairment (21) Gross receivable x impairment rate (£151 x 14%) Revenue le
Slide 21: Group
GROUP Change at H1-22 H1-21 Change Change CER £m £m £m % % Customer numbers (000s) 1,718 1,679 39 2.3 Customer lending 513.3 459.5 53.8 11.7 13.9 Closing net receivables 769.9 674.2 95.7 14.2 14.0 Revenue 297.4 262.9 34.5 13.1 14.5 Impairment (43.3) (11.7) (31.6) (270.1) (243.7) Revenue less impairm
Slide 22: European home credit
EUROPEAN HOME CREDIT Change at H1-22 H1-21 Change Change CER £m £m £m % % Customer numbers (000s) 786 808 (22) (2.7) Customer lending 288.1 288.0 0.1 - 5.0 Closing net receivables 441.4 405.9 35.5 8.7 12.9 Revenue 148.8 140.1 8.7 6.2 11.2 Impairment (1.1) 9.0 (10.1) (112.2) (112.6) Revenue less impa
Slide 23: Mexico home credit
MEXICO HOME CREDIT Change at H1-22 H1-21 Change Change CER £m £m £m % % Customer numbers (000s) 676 624 52 8.3 Customer lending 116.4 87.5 28.9 33.0 24.0 Closing net receivables 140.8 99.8 41.0 41.1 23.2 Revenue 93.1 64.9 28.2 43.5 34.0 Impairment (31.0) (8.5) (22.5) (264.7) (233.3) Revenue less imp
Slide 24: IPF Digital
IPF DIGITAL Change at H1-22 H1-21 Change Change CER £m £m £m % % Customer numbers (000s) 256 247 9 3.6 Customer lending 108.8 84.0 24.8 29.5 32.0 Closing net receivables 187.7 168.5 19.2 11.4 10.3 Revenue 55.5 57.9 (2.4) (4.1) (1.8) Impairment (11.2) (12.2) 1.0 8.2 6.7 Revenue less impairment 44.3 4
Slide 25: Strong financial profile
STRONG FINANCIAL PROFILE H1-22 H1-21 Receivables (£m) 769.9 674.2 Equity (£m) 403.8 363.0 Equity to receivables 52.4% 53.8% Gearing 1.3 times 1.3 times Pre-exceptional EPS (p) 9.1p 10.3p Interest cover 2.4 times 2.8 times Pre-exceptional ROE 10.4% 6.4% 25
Slide 26: Balance sheet
BALANCE SHEET H1-22 H1-21 Change at CER % Goodwill 23.4 23.4 - Fixed assets 60.3 56.0 5.8 Receivables 769.9 674.2 14.0 Cash 43.7 100.4 (56.7) Borrowings (507.6) (471.8) (8.1) Other net assets / (liabilities) 14.1 (19.2) 200.7 Equity 403.8 363.0 8.2 At HY-22, borrowings is stated net of deferred issu
Slide 27: Key performance indicators
KEY PERFORMANCE INDICATORS FY-19 FY-21 H1-22 New Previous New Previous New Previous Revenue yield 59.2% 90.1% 48.1% 81.0% 49.8% 81.8% Impairment to revenue/impairment rate 16.2% 27.4% 4.9% 10.2% 7.5% 15.0% Cost-income ratio 52.7% 43.6% 67.6% 55.7% 65.0% 53.2% 27
Slide 28: Exchange rates
EXCHANGE RATES Closing rates Average Closing rates Average June 2022 H1-22 June 2021 H1-21 Polish zloty 5.4 5.5 5.3 5.2 Czech crown 28.7 29.1 29.6 29.7 Euro 1.2 1.2 1.2 1.1 Hungarian forint 464.9 443.6 413.3 408.6 Romanian leu 5.8 5.9 5.7 5.6 Mexican peso 24.8 26.2 28.4 28.1 Australian dollar 1.8 1.
Slide 29: Contacts
CONTACTS Equity IR contact Rachel Moran Investor Relations Manager Telephone: +44 (0)7760 167637 Email: rachel.moran@ipfin.co.uk Debt funding IR contact Krzysztof Adamski Group Treasurer Telephone: +48 600400394 Email: krzysztof.adamski@ipfdigital.com 29
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