Propel Holdings, Inc. · TSX:PRL
Propel — Investor Presentation (May 2024)
27 slides from Propel's investor presentation, May 2024
Slide 1: Investor Presentation
INVESTOR PRESENTATION TSX:PRL May 2024
Slide 2: Disclaimer
Disclaimer FORWARD-LOOKING INFORMATION Certain statements made in this press release may constitute forward-looking information under applicable securities laws. These statements may relate to our 2024 Operating and Financial Targets, our profitable growth prospects, our dividend, our ability to pro
Slide 3: Investment Highlights
Investment Highlights ▪ Consumer-focused fintech lending platform serving the US and Canadian markets ▪ Leading-edge, AI-driven, agile tech infrastructure unlocking credit market opportunity ▪ Innovative, transparent products and services, including 3 transformational bank programs and 2 Lending as
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 37% 30% 25% 54% U.S. adults are Americans Canadians are Canadians say unable to afford a experience unserved or they’re living $400 emergency hardships due to underserved in paycheque to expense1 income volatility1 the credit market2 paycheque3 Inac
Slide 6: Propel Today
Propel Today 100% online At Scale Profitable Financials shown in US$ Financials shown in US$ Q1 2024 Fiscal 2023 $1.58B ~12.5M Revenue $96.5M $316.5M in originations1 unique applications per year2 Net Income $13.1M $27.8M Adjusted Net Income3 $15.3M $36.1M ~1.19M ~36,000 facilitated loans unique app
Slide 7: Products
PRODUCTS Inclusive Transparent Evolving “This loan was painless and straight forward. The customer service was like talking to a family member. There was no judgment on me but very understanding and helpful.” ~ Valene, Fora Credit customer 7
Slide 8: Products and Services
Products and Services Lending-as-a-Service Product/Service Fully amortizing installment loans Open-ended lines of Open-ended lines of Open-ended lines of Consumer Product credit credit credit Open-ended lines of credit State-licensed direct lender Lending-as-a-service Credit services partner / White
Slide 9: 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 10: Platform to Succeed
Platform to Succeed Convenient Seamless Mobile “The representative I worked with was great and extremely professional. They made the process easy and explained all the details well. I was impressed.” ~ Theresa, CreditFresh customer 10
Slide 11: Industry-Leading Proprietary Technology Designed for Consumer Needs
Industry-Leading Proprietary Technology Designed for Consumer Needs 88 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) US$25.1M invested to dat
Slide 12: 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 5,000+ Attributes Evaluate Credit Worthiness $350,000,000 12% Fund More $300,000,000 Alternative Credit Bureau Dat
Slide 13: World Class Operations Team
World Class Operations Team Relentless focus on service and performance “The application process was simple and quick. The customer service representative was professional, courteous, and very knowledgeable.” Excellent 4.4+ ratings from thousands of consumers 24 / 7 7 days 225+ online platform a wee
Slide 14: Financial Overview
FINANCIAL OVERVIEW Profitable Diversified Resilient “Excellent customer service and support. From start to finish they help you along the way! ” ~ Shannon, CreditFresh Customer 14
Slide 15: Q1 2024 Financial Performance
Q1 2024 Financial Performance Record Results Driving Significant Profitable Growth Loans and Advances Receivable Revenue Adjusted EBITDA* US$M $271.2 US$M US$M $259.3 $316.5 $76.3 $195.6 $226.9 $40.8 $103.8 $129.6 $29.5 $96.5 $25.4 $73.5 $20.0 $49.8 $65.6 $17.0 2020 2021 2022 2023 Q1 2024 2020 2021
Slide 16: Q1 2024 Financial Performance: Revenue
Q1 2024 Financial Performance Revenue US$M ▪ Record Loans and Advances Receivable and Ending Combined Loan and Advance Balances* ▪ Continued expansion of originations in Q1 2024 $316.5 ▪ Ongoing growth of 3 Bank Partnerships ▪ Expansion across underserved consumer market $226.9 ▪ Origination growth
Slide 17: Q1 2024 Financial Performance: Provisions and Charge-offs
Q1 2024 Financial Performance Provision for loan losses and other liabilities (“Provision”) as % of Revenue* ▪ Q1 2024 Provision % Revenue* decreased from Q1 2023: 58% 54% 53% 51% 52% 54% ▪ Reflects ongoing strong credit performance driven by 47% our proprietary AI-driven underwriting and ability to
Slide 18: Q1 2024 Financial Performance: Net Income
Q1 2024 Financial Performance Net Income Adjusted Net Income* US$M $27.8 US$M ▪ All Q1 2024 metrics increased significantly over Q1 2023 $36.1 and represent records ▪ Continued growth in revenue $15.1 $13.1 $20.4 ▪ Lower provision as % of revenue $15.3 $7.3 $6.6 $7.4 $9.2 $12.9 ▪ Operating leverage
Slide 19: Solid Financial Position
Solid Financial Position US$M ▪ Company well positioned for continued expansion of our existing programs, 2024 Credit Capacity growth initiatives, and to support the increased dividend (in US$M) ▪ Approximately $76 million in undrawn credit capacity as of March 31, 2024 $76.0 Capacity at ▪ Each of t
Slide 20: Growth Outlook: Operating and Financial Targets
Growth Outlook: Operating and Financial Targets Metric 2024 Target (US$) Ending Combined Loan and Advance 25% to 35% Balances1 Year-Over-Year Growth Revenue $410 million to $450 million Adjusted EBITDA Margin1 24% to 29% Net Income Margin 9.5% to 12.5% Adjusted Net Income Margin1 11.75% to 14.75% Re
Slide 21: Evolving into a Diversified Online Global Fintech Company
Evolving into a Diversified Online Global Fintech Company Adjacent products • Design, deliver and cross-sell Geographic expansion complementary • Expansion into products aligned new states and with Propel’s core jurisdictions purpose Serving lower risk markets Graduating • Extension of existing cons
Slide 22: Ready for Tomorrow
READY FOR TOMORROW Poised Focused Strategic “My experience was great. Talking to the customer service agent was very easy and she did a great job explaining the process. Then getting approved for the funds was very easy. I will spread the word if my friends or family need money in the future to go w
Slide 23: Appendix
Appendix 23 23
Slide 24: Non-IFRS Measure Reconciliation
Non-IFRS Measure Reconciliation Three Months Ended March 31, Year Ended December 31, US$ 2024 2023 2023 2022 2021 2020 Net Income 13,121,853 7,415,178 27,776,133 15,127,447 6,562,442 7,332,388 Interest on Debt 7,104,827 4,856,533 22,473,216 9,784,859 5,317,923 4,052,783 Interest expense on lease lia
Slide 25: Non-IFRS Measure Reconciliation
Non-IFRS Measure Reconciliation Three Months Ended March 31, Year Ended December 31, US$ 2024 2023 2023 2022 2021 2020 Net Income 13,121,853 7,415,178 27,776,133 15,127,447 6,562,442 7,332,388 Transaction Costs and Financing Costs net of - - - - 1,212,643 19,181 taxes 1 Provision for credit losses o
Slide 26: Non-IFRS Measure Reconciliation
Non-IFRS Measure Reconciliation As at March 31, As at December 31, US$ 2024 2023 2023 2022 2021 2020 Ending Combined Loan and Advance balances 1 349,228,416 248,051,240 337,282,804 247,488,344 134,843,170 62,643,735 Less: Loan and Advance balances owned by third party lenders pursuant to CSO program
Slide 27: Non-IFRS Measure Reconciliation
Non-IFRS Measure Reconciliation Three Months Ended March 31, Year Ended December 31, US$ 2024 2023 2023 2022 2021 2020 Charge-offs (47,066,746) (36,648,172) (148,955,126) (109,981,529) (46,898,488) (26,059,774) Recoveries 6,295,706 4,441,146 19,231,240 16,675,403 6,909,063 3,874,018 Net charge-offs