Humm Group Limited · ASX:HUM
Humm — FY2024 Earnings Presentation
33 slides from Humm's earnings presentation, Aug 21, 2024
Slide 1: FY24 Results
@hunmcroup FOR THE YEAR ENDED 30 JUNE 2024 Stuart Grimshaw CEO | Adrian Fisk CFO 21 August 2024 Authorised for release by the hummgroup Board of Directors humm Group Limited, ABN 75 122 574 583 Level 1, 121 Harrington Street, The Rocks, Sydney NSW 2000 io) a | v | au io Vi . _ | ESULTS
Slide 2: Disclaimer
FY24 RESULTS // AUGUST 2024 DISCLAIMER No recommendation, offer, invitation or advice and its related bodies corporate, directors, officers, employees, advisers and agents disclaim all This presentation is not a financial product or investment advice or recommendation, offer or liability and respons
Slide 3: Agenda
FY24 RESULTS // AUGUST 2024 01 | HIGHLIGHTS 02 | GROUP FINANCIALS AGENDA 03 | COMMERCIAL 04 | CONSUMER 05 | SUMMARY 06 | APPENDICES 3
Slide 4: Highlights
01 HIGHLIGHTS
Slide 5: Strong half-on-half performance
FY24 RESULTS // AUGUST 2024 STRONG HALF-ON-HALF PERFORMANCE 01 02 03 04 18% loan $13.6m Net interest Credit losses growth in 2H24 margin maintained at delivered cost savings stabilised historic lows $5.0b in delivered in 2H24 of 1.8% receivables at 5.5% 5
Slide 6: FY24 Highlights
FY24 RESULTS // AUGUST 2024 FY24 HIGHLIGHTS BALANCE SHEET STRONG NET IMPROVING COST DRIVING SHAREHOLDER GROWTH OPERATING INCOME EFFICIENCY VALUE $5.0b 18% increase 5.5% 2 NIM stabilising in 2H24 $13.6m $60.6m Normalised cash profit (after tax) Costs removed in 2H24 offsetting in receivables June 202
Slide 7: Group key performance metrics
FY24 RESULTS // AUGUST 2024 GROUP KEY PERFORMANCE METRICS CONTINUED GROWTH1 2H24 NIM STABILISED 8.0% 45 CAGR: +15% 7.0% 6.3% 7.0% 40 5.6% 5.5% 35 6.0% 30 5.0% 25 4.0% $38.5m $36.5m 20 3.0% $32.5m 15 2.0% $28.1m 10 1.0% 5 0.0% 0 Closing 1H23 2H23 1H24 2H24 receivables Normalised Cash Profit (after ta
Slide 8: FY25+ Growth Drivers
FY24 RESULTS // AUGUST 2024 FY25+ GROWTH DRIVERS COMMERCIAL CONSUMER FLEXICOMMERCIAL CLOSING RECEIVABLES RETURN TO PROFIT IN CONSUMER BUSINESS IN 2H24 Continued volume and receivables growth from: - Repositioning the consumer business for growth via: • Expanding offering to repeat customers with hig
Slide 9: Group Financials
02 GROUP FINANCIALS
Slide 10: Hummgroup Financial Performance
FY24 RESULTS // AUGUST 2024 HUMMGROUP FINANCIAL PERFORMANCE HUMMGROUP ($M) 1H24 2H24 MVMT FY23 FY24 MVMT STRONG SECOND HALF PERFORMANCE Interest income 254.8 276.2 8% 413.7 531.0 28% • 5% increase on 1H24 in Net interest income following stabilisation of net interest margin. Interest expense (132.1)
Slide 11: Net Interest Margin stabilising over 2H24
FY24 RESULTS // AUGUST 2024 NET INTEREST MARGIN (“NIM”) STABILISING OVER 2H24 11.0% EXIT NIM EXIT NIM EXIT NIM +10BPS EXIT NIM EXIT NIM +30BPS Jun 2023 Dec 2023 Jun 2024 10.0% 5.1% 5.4% 5.5% 9.0% 8.0% (110bps) (20bps) 0bps 7.0% 6.6% 5.6% 5.5% 6.0% (0.5%) 5.6% 0.0% 5.5% Net Interest (0.5%) Net Intere
Slide 12: Credit Risk Management
FY24 RESULTS // AUGUST 2024 CREDIT RISK MANAGEMENT NET LOSS TO ANR FY23 FY24 MVMT • Group Net Loss/ANR remain at historical low level of 1.8%. Group 1.8% 1.8% 0bps • Strength in credit decisioning and collections. Commercial 0.5% 0.7% 20bps • Commercial Net Loss/ANR increased by 20bps to 0.7% from l
Slide 13: Committed to Cost Efficiency
FY24 RESULTS // AUGUST 2024 COMMITTED TO COST1 EFFICIENCY $13.2M COST SAVINGS DELIVERED IN FY24 IMPROVED OPERATING LEVERAGE (COST TO INCOME RATIO2) 65% COST SAVINGS 63% 64% 61% 61% 59% 53% 57% 55% FY23 1H24 2H24 OPERATING EXPENSES ($M) 1H24 2H24 MVMT FY23 FY24 MVMT • 2H24 delivered $13.6m in cost sa
Slide 14: Differentiated Funding Platform
FY24 RESULTS // AUGUST 2024 DIFFERENTIATED FUNDING PLATFORM UNLOCKS GROWTH RELATIVE TO COMPETITORS STRATEGIC OPPORTUNITY AS PRIVATE CREDIT EXPANDS GLOBALLY • Leading global and local banks and investors. Recent growth trajectory Forecast $2.3t E • Diversified funding platform with scale for growth.
Slide 15: Forward Flow – Capital 'Lite' Funding Model
FY24 RESULTS // AUGUST 2024 FORWARD FLOW – CAPITAL ‘LITE’ FUNDING MODEL KEY FEATURES MEDIUM TERM P&L IMPACT KEY BENEFITS • Strategic partnership arrangement with MA Financial Group. • Lower Net Interest Income. • Capital ‘lite’ funding model. • flexicommercial continue to originate, credit assess, s
Slide 16: Efficient and Effective Use of Capital
FY24 RESULTS // AUGUST 2024 EFFICIENT AND EFFECTIVE USE OF CAPITAL STRONG AND STABLE PRE-TAX DIVIDEND BALANCE SHEET RETURN OF 6.02%1 CAPITAL INITIATIVES $10m Board approved share buy-back completed Fully franked final dividend of 1.25cps totaling $6.2m 31.2m shares Loans and advances grew 18% to $5.
Slide 17: Commercial
03 COMMERCIAL
Slide 18: Commercial
FY24 RESULTS // AUGUST 2024 COMMERCIAL HUMMGROUP ($M) 1H24 2H24 MVMT FY23 FY24 MVMT STRONG MOMENTUM IN COMMERCIAL BUSINESS • Net interest income grew during period of margin compression, Interest income 123.5 136.4 10% 170.7 259.9 52% which arose from assets written at lower margins in FY22. Interes
Slide 19: flexicommercial Credit Quality – Secured and Diversified
FY24 RESULTS // AUGUST 2024 flexicommercial CREDIT QUALITY – SECURED AND DIVERSIFIED ASSET CATEGORY SECTOR CONCENTRATION STATE CONCENTRATION DIVERSE CUSTOMER BASE WEIGHTED AVERAGE CREDIT RISK RATING1 BROAD BASED EXPOSURE AND DIVERSIFICATION Credit worthiness rated from 1 (Highest) to 10 (Lowest) • L
Slide 20: Consumer
04 CONSUMER
Slide 21: Consumer Finance
FY24 RESULTS // AUGUST 2024 CONSUMER FINANCE HUMMGROUP ($M) 1H24 2H24 MVMT FY23 FY24 MVMT IMPROVED RESULTS IN 2H24 WITH STABLE NIM Interest income 131.3 139.8 6% 243.0 271.1 12% • NIM stabilised in 2H24 to 8.2%. Interest expense (53.8) (59.7) 10% (76.0) (113.5) 49% • 74% growth in 2H24 Normalised ca
Slide 22: Consumer Business Segment Update
FY24 RESULTS // AUGUST 2024 CONSUMER BUSINESS SEGMENT UPDATE CONSUMER NZ CARDS AU HUMM AU GROWTH IN RECEIVABLES AND YIELD1 HIGHER PRODUCT YIELD1 EVOLUTION OF THE VOLUME MIX 25 .0 % 19.6% 50 0 21 .0% 20.1% 20.6% 65 0 17.9% 18.6% 20 .5% 20.0% 63 0 20 .0 % 45 0 20 .0% 61 0 40 0 15 .0 % 19 .5% 59 0 35 0
Slide 23: Summary
05 SUMMARY
Slide 24: Outlook
FY24 RESULTS // AUGUST 2024 OUTLOOK Strong balance Continued Focused cost Focus on Stablised net sheet position strong credit management customer value interest margin performance proposition Efficient funding Improving cost platform Secured to income ratio Technology Commercial and data Forward Flo
Slide 25: Appendices
06 APPENDICES
Slide 26: To be the provider of finance for bigger purchases
FY24 RESULTS // AUGUST 2024 TO BE THE PROVIDER OF FINANCE FOR BIGGER PURCHASES CONSUMER FINANCE ANZ leading provider #1 POS financer for POSITIONING of specialist asset finance transactions over $1,000 CORE EXPERTISE LOANS AND ADVANCES $3.0b $2.0b >> Instant credit decisioning VERTICALS/ Logistics /
Slide 27: flexicommercial
FY24 RESULTS // AUGUST 2024 FLEXICOMMERCIAL NON-BANK LENDERS OVERTAKE BANKS AU AND NZ’S LEADING PROVIDER SPEED TO DECISION AND AS PROVIDERS OF SME LENDING OF SPECIALIST ASSET FINANCE SETTLEMENT, with specialist offering Equipment finance TAM $45b (AU) and $8b (NZ) a key differentiator Delivered sole
Slide 28: Reconciliation of normalised cash profit to statutory profit and new reporting metric
FY24 RESULTS // AUGUST 2024 RECONCILIATION OF NORMALISED CASH PROFIT TO STATUTORY PROFIT AND NEW REPORTING METRIC CURRENT REVISED HUMMGROUP ($M) 1H24 2H24 MVMT FY23 FY24 MVMT HUMMGROUP ($M) 1H24 2H24 MVMT FY23 FY24 MVMT Normalised cash profit2 28.1 32.5 4.4 75.0 60.6 (14.4) Normalised cash profit2 2
Slide 29: flexicommercial
FY24 RESULTS // AUGUST 2024 FLEXICOMMERCIAL FLEXICOMMERCIAL (AU/NZ) 1H24 2H24 FY23 FY24 • 53% CAGR in loans and advances from FY22 demonstrating our Volume (A$m) 761.5 772.9 1,564.4 1,534.4 competitive service offering and strong market position with small and medium enterprises. Average Net Receiva
Slide 30: Consumer AU
FY24 RESULTS // AUGUST 2024 CONSUMER AU HUMM AUSTRALIA3 1H24 2H24 FY23 FY24 AUSTRALIA CARDS 1H24 2H24 FY23 FY24 Total volume (A$m) 405.7 373.5 863.3 779.2 Volume (A$m) 254.0 241.5 514.9 495.5 Closing loans and advances (A$m) 732.2 784.7 683.8 784.7 Closing loans and advances (A$m) 429.1 420.0 434.2
Slide 31: Consumer NZ
FY24 RESULTS // AUGUST 2024 CONSUMER NZ NEW ZEALAND CARDS 1H24 2H24 FY23 FY24 • Volume has grown 9%, while the legacy portfolio is running down at -12% on prior year. Scheme cards performed above market with a 15% Volume (A$m) 432.0 385.8 747.6 817.8 increase in volume on prior year. Closing loans a
Slide 32: Regulation and humm's new hybrid loan product
FY24 RESULTS // AUGUST 2024 REGULATION AND HUMM’S NEW HYBRID LOAN PRODUCT BNPL REGULATION • Regulation presents an opportunity for hummgroup. • Buy-now-pay-later regulation maintains caps on customer fees and does not allow interest to be charged to customers. • humm has a long history and strong ex
Slide 33: Thank you
@hunmgoup