Nu Holdings Ltd. · NYSE:NU
Nu — Q1 2022 Earnings Presentation
38 slides from Nu's earnings presentation, May 16, 2022
Slide 1: Q1 2022 Earnings Presentation
Q1 2022 Earnings Presentation May 16, 2022
Slide 2: Disclaimer
Disclaimer This presentation speaks at the date hereof, and Nu Holdings Ltd. (“The Company”) is under no obligation to update or keep current the information contained in this presentation. Any information expressed herein is subject to change without notice. Any market or third-party data included
Slide 3: Continued Acceleration of Q1'22 Results
Continued Acceleration of One Of The World’s Largest Acquisition / Marketplace Q1’22 Results Digital Banking Platforms NuPay / NuCripto Ultraviolet, BNPL, FX Remittances 59.6MM Acquisition Customers (+61% YoY) Secured Credit 59.6 53.9 46.5MM Active customers (+82% YoY) Nu Colombia 48.1 SME Bank Acco
Slide 4: Powerful, Expanding Ecosystem Across the Five Financial Seasons
Powerful, Expanding Ecosystem Across the Five Financial Seasons Spending. Saving. Investing. Protecting. Borrowing. Notable New Products NuPay Brand Styleguide 2022 Logo variations Digital Banking NuCripto Digital Banking Platform for Credit NuAccounts Platform for Consumers Cards NuPay SMEs Brand S
Slide 5: LatAm is Ripe for Disruption
LatAm is Ripe for Disruption US$ 1.3Tr GDP 130MM People 61% Unbanked 75% Without Credit Card 51% Under 30 Years Old US$ 1.6Tr GDP 214MM People US$ 0.3Tr GDP 15% Unbanked 51MM People 64% Without Credit Card 47% Unbanked 44% Under 30 years old 80% Without Credit Card 47% Under 30 Years Old Our Markets
Slide 6: It's Day 1 in Latin America for Nu
It's Day 1 in Latin America for Nu Brazil Mexico Colombia Total Customers (% of adult population) 33.0% 2.2% 0.5% Active Customer s (% of adult population) 25.9% 1.9% 0.4% Credit Card (% of total credit card portfolio) 7.0% 1.1% 0.4% Personal Loans (% of total personal loan portfolio) 3.7% 0.0% 0.0%
Slide 7: Q1 2022 Results
Q1 2022 Results
Slide 8: Our Model Powers Our Earnings Generating Formula
Our Model Powers Our Earnings Generating Formula Rapidly Growing Increasing Revenue Low Cost Substantial Customer Base Per Customer Operating Platform Earnings Power ACTIVE CUSTOMERS ARPAC COST TO SERVE First Quarter 2022 Results 8
Slide 9: Customer Acquisition and Activity Rate Continued their Strong Momentum
Customer Acquisition and Activity Rate Continued their Strong Momentum Total Customers (MM) Active Customers 25.5 29.9 35.2 41.1 46.5 (M) Activity Rate (%) YoY: 61% Active Customers: 82% YoY 59.6 53.9 78% 48.1 76% 41.7 37.1 73% 72% 69% Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 First Quarter 2022 Results 9 Note
Slide 10: Compounding Effect of More Engagement and Products
Compounding Effect of More Engagement and Products Active Customers Using NuAccount as their Monthly ARPAC by Quarterly Cohort Primary Banking Account (%) Number of Products Per Active Customer US$ (US$ | FX Neutral) month/ Jan-22 4.0 customer. 70% Jan-21 Jan-20 Jan-19 Jan-18 Jan-17 Avg. monthly ARP
Slide 11: Compounding Effect of Customer Additions and ARPAC Expansion Driving Revenue Growth
Compounding Effect of Customer Additions and ARPAC Expansion Driving Revenue Growth ARPAC (US$) Revenues (US$MM) YoY: 226% YoY: 63% FXN 877.2 FXN 6.7 5.6 4.9 636.0 4.0 480.9 3.5 335.0 246.0 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Note 1: Amounts are presented in US dollars and gr
Slide 12: Strong Purchase Volume Growth Despite Seasonality
Strong Purchase Volume Growth Despite Seasonality Purchase Volume (US$Bn) Purchase Volume per Customer US$ Credit Card month/ customer. Prepaid $350 YoY: 94% 15.9 FXN 14.4 $300 Credit Card: 71% YoY FXN Prepaid: 165% YoY FXN 12.1 5.3 $250 4.8 9.9 3.7 $200 10.6 7.5 2.7 9.5 $150 8.4 1.8 7.2 1Q17 2017 $
Slide 13: Robust Growth in Credit Portfolio
Robust Growth in Credit Portfolio Total Portfolio (US$Bn) Total Portfolio (%) Credit Card Personal Loans 8.8 9% YoY: 126% 13% 17% 21% 23% FXN Credit Card: 89% FXN 2.0 Personal Loans: 400% FXN 6.6 5.3 1.4 4.7 0.9 91% 87% 3.3 0.6 83% 79% 77% 6.8 0.3 5.2 4.1 4.4 3.0 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q1'21
Slide 14: Strong Growth in Deposits Franchise
Strong Growth in Deposits Franchise Deposits (US$Bn) YoY: 94% FXN 12.6 9.7 8.1 7.5 5.5 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 First Quarter 2022 Results 14 Note 1: Amounts are presented in US dollars and growth rates on an FX Neutral basis. For additional detail on calculations please refer to the appendix N
Slide 15: Growth Bringing Meaningful Scale Benefits On Cost to Serve
Growth Bringing Meaningful Scale Benefits On Cost to Serve Cost to Serve per Active Customer (US$) Cost to Serve (58) (71) (80) (98) (96) (US$M) YoY: (30)% FXN 0.8 0.9 0.8 0.8 0.7 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Note 1: Amounts are presented in US dollars and growth rates on an FX Neutral basis. For a
Slide 16: Continuous Gross Profit Expansion, Despite Front-Loading Loan Loss Provisions
Continuous Gross Profit Expansion, Despite Front-Loading Loan Loss Provisions Gross Profit (US$MM) Gross Margin 47% 50% 47% 36% 34% YoY: 131% FXN 294.1 223.9 226.9 166.4 115.7 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 First Quarter 2022 Results 16 Note 1: Amounts are presented in US dollars and growth rates on
Slide 17: Sequential Improvement in Adj. Net Income
Sequential Improvement in Adj. Net Income Adj. Net Income (US$MM) Net Income (Loss) (49) (15) (34) (66) (45) 16.5 3.2 10.1 (11.9) (1.2) Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 First Quarter 2022 Results 17 Note 1: For additional detail on calculations please refer to the appendix Non-IFRS Financial measures a
Slide 18: Strong Capital and Liquidity Position to Navigate the Cycle
Strong Capital and Liquidity Position to Navigate the Cycle Capital Position (US$Bn) Liquidity Position (US$Bn) As of Q1’22 As of Q1’22 Capital Requirement Capital Excess NuHoldings Cash & Equivalents 4.0 LDR ~6x 24% 3.4 12.6 0.6 0.1 0.1 3.1 0.5 0.5 NuFIN Capital Position NuFIN Adj. Capital Position
Slide 19: Q1 2022 Credit Underwriting
Q1 2022 Credit Underwriting
Slide 20: Our Actual Risk-adjusted Margins Show Consistently Strong Levels and Rapid Payback
Our Actual Risk-adjusted Margins Show Consistently Strong Levels and Rapid Payback Actual Cumulative Risk-Adjusted Margin (as % of Revenues minus cost of funding) Nu Credit Card Cohorts Nu Personal Loan Cohorts This chart is not a representation, it contains actual data This chart is not a represent
Slide 21: Asset Quality Normalization Cycle Has Continued As Expected
Asset Quality Normalization Cycle Has Continued Consumer Finance As Expected 15-90 NPLs 90+ NPLs Historical Q1 15-90 Historical Q1 90+ NPL Seasonality NPL Seasonality 6.1% +80 bps 0 bps 5.0% 4.9% 5.1% 5.3% 4.8%4.8%4.8% 4.8% 5.2% 4.7% 4.3% 4.2% 3.7% 6.0% 3.5% 3.6% 3.4% 3.5% 3.1% 3.0% 3.0% 5.1% 2.7% 2
Slide 22: Nu is Operating Below pre-Covid Levels of Delinquency
Unlike the Rest of the Brazilian Market, Nu is Operating Below pre-Covid Levels of Delinquency Lagged 15-90 NPLs Lagged 90+ NPLs 2019 2020 2021 2022 2019 2020 2021 2022 Nu Market Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec First Quarter 2022 Result
Slide 23: How Expected Credit Loss (ECL) Provisioning Affects the P&L of High-Growth Companies
How Expected Credit Loss (ECL) Provisioning Affects the P&L of High-Growth Companies Illustrative IFRS View Illustrative Cash Flow View Cumulative Gross Profit Illustration Cumulative Gross Profit Illustration X X ECL 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 Time Time First Quarter 2022
Slide 24: Growth Drives 80% of Provision Balance Increase
Growth Drives 80% of Provision Balance Increase Provision Balance Bridge (FX Neutral, US$MM) % of delta 80% 20% 47 189 921 684 Provision Balan ce - Dec 31st Portfolio Growth Risk Normalization & Seasonality Provision Balan ce - Mar 31st First Quarter 2022 Results 24 Note 1: The information presented
Slide 25: Wrapping up...
Nubank Investors Earnings Presentation Feb. 2022 Wrapping up...
Slide 26: Why Nu?
Why ? A Technology Company Leading One of the Most Loved, Trusted the Digital Banking Revolution And Innovative Brands 59.6MM Customers NPS 90+ NPS Lowest Cost Provider in a Highly Profitable Strong Unit Economics Sector Compounding at Scale 90%lower ~85% lower cost cost to to serve servevs. vs.incu
Slide 27: Q&A
nu Q&A May 16, 2022
Slide 28: Appendix
Appendix First Quarter 2022 Results 28
Slide 29: Payments With NuPay Finalized on Average in 24 Seconds
With 3 Simple Steps, Payments With NuPay are Finalized on Average in 24 Seconds 1 2 3 Select NuPay at Select funding source & number Confirm PIN Paid checkout of installments First Quarter 2022 Results 29
Slide 30: G&A Expenses Reaping the Benefits of Scale
G&A Expenses Reaping the Benefits of Scale G&A (US$MM) G&A – Exc. Share-based compensation Share-based Compensation G&A – Exc. Share-based compensation (as % of Revenues) 27% 245.4 26% 224.2 24% 21% 77.7 166.5 90.1 20% 115.8 122.3 43.9 42.5 48.9 167.7 122.6 134.1 66.9 79.8 Q1'21 Q2'21 Q3'21 Q4'21 Q1
Slide 31: Evolution of Coverage Ratios
Evolution of Coverage Ratios Prudent coverage ratios throughout the cycles Coverage Ratio Over Total Balance Coverage Ratio Over NPL 90+ 274% 247% 239% 9.7% 230% 229% 8.5%8.4% 8.8%8.5% 204% 8.4% 7.8% 184% 7.4% 7.2%7.5%7.1% 7.7% 178%180% 174% 205% 6.6% 140% 151% 6.2% 6.3% 5.8% 5.9% 7.6% 5.4% 125% 122
Slide 32: Delinquency Seasonality in Brazil
Delinquency Seasonality in Brazil Seasonal Factors Derived from Brazil’s Central Bank (2014 – 2019) Credit Card Personal Loans 0.8% 0.8% 15-90 days Late 90+ days Late 15-90 days Late 90+ days Late 0.3% 0.3% 0.2% 0.2% -0.1% 0.0% -0.1% -0.2% -0.1% -0.2% -0.2% -0.4% -0.4% -0.4% Q4-Q1 Q1-Q2 Q2-Q3 Q3-Q4
Slide 33: Losses Continue To Be Below Historical Average
Losses Continue To Be Below Historical Average Losses (NPL 360+) by Booking Yearly Cohort 2018 2019 2020 2021 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 Months First Quarter 2022 Results 33 Note 1: The inf
Slide 34: Non-IFRS Financial Measures and Reconciliations
Non-IFRS Financial Measures and Reconcilliations Adjusted Net Income (Loss) is defined as profit (loss) attributable to shareholders of the parent company for the period, adjusted for expenses and allocated tax effects on share-based compensation in such period. Adjusted Net Income (Loss) is present
Slide 35: Non-IFRS Adj. Net Income Reconciliation
Non-IFRS Adj. Net Income Reconciliation As reported For the three months ended March 31 2022 2021 2020 Adjusted Net Income (Loss) (in US$ millions): Profit (loss) attributable to shareholders of the parent company (45.1) (49.5) (30.3) Share-based compensation 77.7 48.9 8.5 Allocated tax effects on s
Slide 36: Non-IFRS Financial Measures and Reconciliations
Non-IFRS Financial Measures and Reconcilliations FX Neutral measures are prepared and presented to eliminate the effect of foreign exchange, or “FX,” volatility between the comparison periods, allowing management and investors to evaluate our financial performance despite variations in foreign curre
Slide 37: Non-IFRS Financial Measures and Reconciliations
Non-IFRS Financial Measures and Reconcilliations FX Rates - On a monthly basis, Nu translates its subsidiaries figures from their individual functional currency into Nu Holdings functional currency, the U.S. Dollars ("US$"), following the requirements of IAS 21 "The Effects of Changes in Foreign Exc
Slide 38: www.investors.nu
www.investors.nu investors@nubank.com.br