Humm Group Limited · ASX:HUM
Humm — Investor Presentation (August 2021)
41 slides from Humm's investor presentation, Aug 19, 2021
Slide 1: FY21 Results
FY21 RESULTS // 19 AUGUST 2021 RESULTS // 2021 REBECCA JAMES // CEO ADRIAN FISK // CFO 19 AUGUST 2021 Authorised for release by the hummgroup Board of Directors humm group limited ACN 122 574 583 Level 1, 121 Harrington St, The Rocks, Sydney NSW 2000 1
Slide 2: Agenda
FY21 RESULTS // 19 AUGUST 2021 01. FY21 key highlights 02. Strategy update AGENDA. 03. Commercial update 04. FY21 group financials 05. Summary 06. Appendices 2
Slide 3: Buy on your terms
FY21 RESULTS // 19 AUGUST 2021 hummgroup// Buy on your terms We’re liberating people from a ‘one size fits all’ approach. We enable seamless approvals for purchases, big, small or business related. Empowering consumers to choose how they wish to pay, with terms from five fortnights through to five y
Slide 4: FY21 Key Highlights
FY21 RESULTS // 19 AUGUST 2021 FY21 KEY HIGHLIGHTS. 4
Slide 5: FY21 key highlights
FY21 RESULTS // 19 AUGUST 2021 FY21 key highlights // $68.4 million $108 million $1,035 million Cash NPAT Cash balance1 BNPL volume +121% FY20: $15m +31% 2.7 million 3.5% $540 million Customers Net loss/ANR Commercial volume +20% -60bps +56% 1. Non-restricted cash at bank. 5
Slide 6: Strategy Update
FY21 RESULTS // 19 AUGUST 2021 STRATEGY UPDATE. 6
Slide 7: Strategy for growth
FY21 RESULTS // 19 AUGUST 2021 Strategy for growth // New audiences Driving customer Expanding the International New products engagement reach of expansion New partnerships instalment payments Finding new audiences Driving customer New merchants and Expansion into through partnerships for our engage
Slide 8: For every purchase occasion
FY21 RESULTS // 19 AUGUST 2021 1 // NEW AUDIENCES NEW PRODUCTS NEW PARTNERSHIPS An interest free instalment product // for every purchase occasion FY21 Current cross-sell 42 transactions per customer p.a. 18% overlap between humm (‘Big things’ and ‘Little things’) Buy your way ‘Big things’ 25% of bu
Slide 9: Customer engagement and retention
FY21 RESULTS // 19 AUGUST 2021 1 // NEW AUDIENCES NEW PRODUCTS NEW PARTNERSHIPS Enterprises looking to BNPL for // customer engagement and retention BANKS LOYALTY PROGRAMS RETAILERS ISSUERS ` A subsidiary of Westpac New Zealand Banks partnering with BNPL Loyalty programs partnering Merchants looking
Slide 10: More places to shop
FY21 RESULTS // 19 AUGUST 2021 2 // DRIVING CUSTOMER ENGAGEMENT // More places to shop 1. Figures relate to humm AU, NZ and IE transaction volumes for FY21. 10
Slide 11: New BNPL products growing rapidly
FY21 RESULTS // 19 AUGUST 2021 3 // EXPANDING THE REACH OF INSTALMENT PAYMENTS // New BNPL products growing rapidly BNPL VOLUME 1 (A$M) BNPL ‘BIG THINGS’ VOLUME 2 (A$M) 561 +66% +7% 321 337 300 1H19 2H19 1H20 2H20 1H21 2H21 1H19 2H19 1H20 2H20 1H21 2H21 BNPL ‘LITTLE THINGS’ VOLUME3 (A$M) ‘BUNDLL & H
Slide 12: Reinvigorated and rebranded
FY21 RESULTS // 19 AUGUST 2021 3 // EXPANDING THE REACH OF INSTALMENT PAYMENTS // Reinvigorated and rebranded BRAND NO FEES HUMM90WRAP 60 MONTHS LTIF CRUSH OVERSEAS Enjoy 10% Pay zero FX fees, Convert purchases Enjoy up to 60 cashbacks at whenever, of $250 or more to months LTIF crush-worthy whereve
Slide 13: International expansion
FY21 RESULTS // 19 AUGUST 2021 4 // INTERNATIONAL EXPANSION // International expansion Digital and customer-centric solutions that offer fixed term instalments like humm are increasingly being considered and utilised by retailers across the globe for financing. OUR APPROACH SOFTWARE PARTNERSHIPS Tot
Slide 14: International expansion: UK and Canada
FY21 RESULTS // 19 AUGUST 2021 4 // INTERNATIONAL EXPANSION // International expansion UNITED KINGDOM ESTABLISH BOARD AND LOCALISE THE PLATFORM LAUNCH LAUNCH LAUNCH SCALE IN SIGNED RETAIL MANAGEMENT TEAM ‘LITTLE THINGS’ ‘MID THINGS’ ‘BIG THINGS’ KEY VERTICALS MERCHANTS UNITED KINGDOM 300+ Board and
Slide 15: Commercial Update
FY21 RESULTS // 19 AUGUST 2021 COMMERCIAL UPDATE. 15
Slide 16: Invest and grow flexicommercial broker channel
FY21 RESULTS // 19 AUGUST 2021 // Invest and grow flexicommercial broker channel KEY AUSTRALIAN BUSINESS HIGHLIGHTS TOP 3 ASSETS FINANCED MARKET LEADING SERVICE DRIVEN BY TECHNOLOGY Transport Construction Light commercial vehicles ~45% of deals decisioned on same ` day ~$75k 4,300+ 549 2nd ~35% aver
Slide 17: Successfully refocused the AU business
FY21 RESULTS // 19 AUGUST 2021 // AUSTRALIA COMMERCIAL 29% 28% 29% Successfully refocused the AU business. 27% 25% • Strategic review completed with recommendation to invest and grow the flexicommercial broker channel following successful refocusing of the 17% business, favourable market conditions
Slide 18: FY21 Group Financials
FY21 RESULTS // 19 AUGUST 2021 FY21 GROUP FINANCIALS. 18
Slide 19: Financial performance
FY21 RESULTS // 19 AUGUST 2021 hummgroup ($m)1 FY21 FY20 v PCP Financial performance. Gross income 443.9 478.9 (7.3%) • Gross income of $443.9m, down 7.3% with growth in Australia Commercial and Net operating income 342.9 361.0 (5.0%) numerous BNPL products offset by a decline in Cards receivables,
Slide 20: Buy Now Pay Later
FY21 RESULTS // 19 AUGUST 2021 Buy Now Pay Later // $22.8m Investment for growth. • Cash NPAT of $1.2m (FY20: $-2.7m), impacted by investments in new products and markets of: +31% – $-15.8m in FY21 for bundll and hummpro (FY20: $-8.8m) – $-5.8m in FY21 for humm New Zealand, United Kingdom and Canada
Slide 21: Cards
FY21 RESULTS // 19 AUGUST 2021 Cards // AU CARDS 121% $597m Strong profitability. (30%) Australia Cards Cash NPAT for FY21 of $16.8m, up 121.1% with: $434m $16.8m • Volume down by 30.1% due to COVID-19 impacts on merchant activity, particularly in travel. • Gross income of $91.1m, down 20.6% (FY20:
Slide 22: Commercial and Leasing
FY21 RESULTS // 19 AUGUST 2021 Commercial and Leasing // Benefits of a diversified portfolio. 56% • Cash NPAT of $22.3m, up 431.0% in (FY20: $4.2m). 431% • Volume up 55.6% driven by strong origination growth in Australia, solidifying the strategy to focus on lending via the broker channel. • Strong
Slide 23: Operating expenses
FY21 RESULTS // 19 AUGUST 2021 Operating expenses // OPERATING EXPENSES FY21 VERSUS FY20 (A$M) 186.9 7.1 6.3 Increased investments for growth. 176.5 3.9 • FY21 operating expenses of $186.9m, up 5.9% on FY20. 0.9 • Payroll expense down $3.9m. This includes removal of duplicate roles and functions and
Slide 24: Net loss and provisions
FY21 RESULTS // 19 AUGUST 2021 Net loss and NET LOSS MOVEMENT (PRE-TAX) ($M) provisions // 109.0 10.3 9.1 Credit performance driving provision reduction. 2.5 3.1 88.9 Net loss1 of $88.9m, down 18.4%: • BNPL down $10.3m despite volume growth with the continued benefit from investments in a scalable c
Slide 25: Credit risk management
FY21 RESULTS // 19 AUGUST 2021 Credit risk NET LOSS/ANR management // BNPL 5.7% 6.3% 4.4% FY19 FY20 FY21 Portfolio continuing to improve. BNPL • Net loss/ANR down 190bps to 4.4%. AU CARDS 5.0% 4.5% 4.3% • Lower net loss driven by reduced humm ‘Big things’ arrears and portfolio performance from impro
Slide 26: Wholesale funding facilities
FY21 RESULTS // 19 AUGUST 2021 Wholesale funding facilities // $3,381m Headroom to fund future growth. $2,903m • Well established funding platform a strategic differentiator against peers with increased $2,754m $975m capacity to support growth. $433m $648m • Record $1b of ABS issuance during FY21. •
Slide 27: Corporate debt facilities
FY21 RESULTS // 19 AUGUST 2021 Corporate debt facilities // Growth underpinned by balance sheet flexibility. • Substantially strengthened the balance sheet to position hummgroup for growth. • A portion of the FY21 capital raise proceeds utilised to repay corporate borrowings. • hummgroup secured com
Slide 28: Summary
FY21 RESULTS // 19 AUGUST 2021 SUMMARY. 28
Slide 29: Moving forward
FY21 RESULTS // 19 AUGUST 2021 // Moving forward • hummgroup has numerous growth initiatives including international expansion, new product growth and new partnerships. • hummgroup will be holding an investor day on 27 October 2021 where it will provide a full strategic update alongside volume and o
Slide 30: Appendices
FY21 RESULTS // 19 AUGUST 2021 APPENDICES. 30
Slide 31: NPAT reconciliation
FY21 RESULTS // 19 AUGUST 2021 NPAT reconciliation // hummgroup ($m) FY21 FY20 FY19 v PCP% Cash NPAT 68.4 30.9 76.1 121.4% Non-cash items Amortisation of acquired intangible assets 2.1 3.3 2.9 (36.4%) Share plan cancelation expense 1.6 – – 100.0% ` Sale of Think Office Technology 1.2 – (2.2) 100.0
Slide 32: Profit and Loss ($m)
FY21 RESULTS // 19 AUGUST 2021 Profit and Loss ($m) FY21 FY201 FY19 v PCP % Interest income 337.2 359.4 352.8 (6.2%) Fee and other income 103.3 114.9 139.5 (10.1%) Gross income 440.5 474.3 492.3 (7.1%) Cost of origination (26.8) (28.6) (19.6) (6.3%) Interest expense (74.2) (89.3) (100.6) (16.9%) Net
Slide 33: Balance Sheet ($m)
FY21 RESULTS // 19 AUGUST 2021 Balance Sheet ($m) FY21 FY20 FY19 v PCP % Cash and cash equivalents 218.2 157.5 143.1 38.5% Receivables and customer loans1 2,653.1 2,452.6 2,577.4 8.2% Equity and other investments 9.6 14.3 13.7 (32.9%) Other assets 22.1 21.8 10.5 1.4% Current and deferred tax assets
Slide 34: Consolidated Cash Flow ($m)
FY21 RESULTS // 19 AUGUST 2021 Consolidated Cash Flow ($m) FY21 FY20 FY19 v PCP % NPAT 60.1 23.1 61.7 160.2% Share-based payments 2.7 0.2 0.7 1,250.0% Depreciation and amortisation 25.8 19.0 17.1 35.8% Impairment of other intangible assets - 1.5 10.5 (100.0%) Impairment losses on loans and receivabl
Slide 35: FY20 Profit and Loss by segment
FY21 RESULTS // 19 AUGUST 2021 COMMERCIAL BNPL AU CARDS NZ CARDS HUMMGROUP AND LEASING FY20 Profit and Loss ($m) Published Restated Published Restated Published Restated Published Restated Published Restated Interest income 93.9 93.9 86.9 86.9 120.8 120.8 58.6 62.4 360.2 364.0 Fee and other income 2
Slide 36: Everywhere, everyday
FY21 RESULTS // 19 AUGUST 2021 // everywhere, everyday Interest free shopping for everything, • Buy Now Pay Later “Always interest free” High-value, ‘000s long terms plans • Available at humm merchants only • Up to $30,000 ‘00s • Repay over 2.5 – 60 months Low-value, ` short term plans • 3 min to ap
Slide 37: Everywhere, everyday: competitors
FY21 RESULTS // 19 AUGUST 2021 // everywhere, everyday Interest free shopping for everything, COMPETITORS • Long term interest free, up to $50k • Up to 90 days interest free on all transactions • Use anywhere Mastercard is accepted ` • Payment terms up to 60 months • Better suited to an in-store con
Slide 38: Markets we're disrupting: business credit cards
FY21 RESULTS // 19 AUGUST 2021 // everywhere, everyday Interest free shopping for everything, MARKETS WE’RE DISRUPTING • Buy Now Pay Later for small business Business Credit Cards • Use anywhere Mastercard is accepted • Up to $30,000 • 3 min to apply and get approved ` • Pause payments for 30 days;
Slide 39: Markets we're disrupting: personal debit cards
FY21 RESULTS // 19 AUGUST 2021 // everywhere, everyday Interest free shopping for everything, MARKETS WE’RE DISRUPTING • Buy Now Pay Later “Everywhere” Personal Debit Cards • Use anywhere Mastercard is accepted • Everyday purchases, no minimum spend • 3 min to apply and get approved ` • No less than
Slide 40: Disclaimer
FY21 RESULTS // 19 AUGUST 2021 Disclaimer // No recommendation, offer, invitation or advice anything contained in, or omitted from, this presentation. This presentation is not a financial product or investment advice or recommendation, offer or invitation by any person or to any person to sell or pu
Slide 41: Thank you
FY21 RESULTS // 19 AUGUST 2021 THANK YOU. 41