Plenti Group Ltd. · ASX:PLT
Plenti — FY2024 Earnings Presentation
38 slides from Plenti's earnings presentation, May 22, 2024
Slide 1: ASX Release
ASX RELEASE Plenti Group Limited (ASX:PLT) Authorised for release by the Board of Plenti Group Limited For more information please contact: Daniel Foggo, CEO, shareholders@plenti.com.au Miles Drury, CFO, shareholders@plenti.com.au Year to 31 March 2024
Slide 2: To bring our customers' big ideas to life
• We are Australia’s largest fintech consumer lender • We are Cash NPAT positive • We deliver market leading customer To bring our customers’ big ideas to life experiences via our proprietary technology platform • We’re taking market share by setting new standards in automotive, renewable energy and
Slide 3: Committed team, modern platform, flexible funding
• Committed, growth-focused team • Significant breadth and depth of expertise • Modern, end-to-end platform delivers speed, flexibility and efficiency • Built and maintained in-house, allowing rapid improvement • Broad product suite, for borrowers and investors • Distribution across digital, broker,
Slide 4: Highlights
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Slide 5: FY24 highlights: originations, loan portfolio, revenue, Cash NPAT
Originations Closing loan portfolio Revenue Cash NPAT +6% pcp +21% pcp +47% pcp +36% on pcp Successfully grew Announced strategic Cash NPAT despite partnership with NAB. funding cost and credit First product, a ‘NAB headwinds Cost-to-income Closing 90+ arrears powered by Plenti’ car experienced by l
Slide 6: Loan portfolio growth by product
2,000 200 52% 3-year 58% 3-year CAGR CAGR 1,500 150 1,000 70%1 100 500 50 0 0 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY18 FY19 FY20 FY21 FY22 FY23 FY24 Automotive Renewable energy Personal 6 1. Lower credit risk secured automotive and renewable energy loans represented 70% of the loan portfolio at the e
Slide 7: Cash NPAT growth
) • Cash NPAT is after the expensing of all technology investment 5 48% 2H – $12.6m of technology cost in FY24 10 growth yoy • Profitability is typically skewed to 2H – $4.6m Cash NPAT in 2H24 was up 48% on 4 pcp 5 • Cash NPAT growth of 48% in 2H on pcp, versus 36% growth for the full year 3 0 2 (5)
Slide 8: FY24 objectives achieved
Drive growth in loan originations and loan portfolio Achieved – loan portfolio grew 21%, revenue $211 million Grow revenue to over $200 million Deliver full year Cash NPAT growth, skewed Achieved – 36% growth in Cash NPAT despite industry towards 2H24 headwinds Reduce cost-to-income ratio to <30% Re
Slide 9: Operational Performance
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Slide 10: Automotive lending
• Optimised loan origination levels versus loan 1,250 margins and credit appetite in a competitive market annual lending1 • Grew commercial loan originations by 50%, to represent 37% of auto originations up from 27% in FY23 1,000 67% 3-year ~3% estimated Plenti market penetration 2 CAGR • Dealer poi
Slide 11: Renewable energy lending
) • Strong growth in loan originations and loan book 300 • Significant expansion of GreenConnect platform, increasing market impact solar installations annually1 – 7 virtual power plant (VPP) operators now on platform including major energy retailers 250 ~10% estimated finance market penetration2 47
Slide 12: Personal lending
• Optimised loan origination levels versus loan margins and future credit performance 600 – Tightened credit criteria early in FY24 annual lending2 • Maintained our dual channel strategy, direct-to- 35% 3 -year consumer and broker channels, with direct-to- 500 CAGR 3% estimated market penetration3 c
Slide 13: Technology and platform priorities
1. Growth 1. Efficiency 1. Cost saving 2. Diversification 2. Customer experience 1. Growth 1. Growth 1. Efficiency 2. Impact 2. Efficiency 2. Agility 3. Credit performance 3. Scalability 13
Slide 14: Access exclusive household renewable energy offers and discounts
Access exclusive household renewable energy offers and discounts Single application experience extends to easy sign- up to energy plans and virtual power plants (VPPs) Unlock on-going financial savings accelerating the payback period on equipment (including batteries) Access attractive Plenti financ
Slide 15: Operating efficiency and cost-to-income
100% 160% 10 9 140% 80% 8 120% 7 100% 60% 6 80% 5 40% 4 60% 3 40% 20% 2 20% 1 0% 0% 0 FY19 FY20 FY21 FY22 FY23 FY24 FY19 FY20 FY21 FY22 FY23 FY24 FY19 FY20 FY21 FY22 FY23 FY24 • Cost-to-income of 26.5% beat FY24 target of • Costs as a proportion of net interest income • Operating efficiency continue
Slide 16: Plenti is a prime lender with strong credit characteristics
• Plenti is a prime lender, focused on lending to borrowers with strong credit characteristics. 5.0% 900 Period end portfolio characteristics included: – 835 weighted average Equifax credit score, well Decline supported by above credit active population average 4.0% benign COVID period 800 – 72% of
Slide 17: NAB Strategic Partnership
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Slide 18: NAB strategic partnership: co-branded car and EV loan
• Co-branded car and EV loan • Select Plenti renewable energy • NAB has rights to acquire up to • Initial partnership term of 5 expected to be launched in 1H finance solutions expected to be 15% of Plenti shares1 years, ability to extend for CY24 made available to NAB – Increases alignment between f
Slide 19: Distributed direct to consumers via NAB's customer base
• Distributed direct to consumers, drawing on NAB’s large personal banking customer base • Plenti is responsible for: – Loan application experiences – Credit assessment and loan settlement – On-going loan and customer management • NAB, as product issuer, is responsible for: – Marketing activities –
Slide 20: Implementation completed; testing underway
• Implementation work completed; testing underway – Co-branded customer journey – Integration with NAB systems – Operational processes • Launch plan – Phase 1: available to NAB staff – Phase 2: available to NAB existing customers via online banking and personal banking app – Phase 3: available to ne
Slide 21: Financial Results
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Slide 22: FY24 financial results summary
Loan portfolio • 28% increase in average portfolio on pcp Revenue • 47% revenue growth to $211m Cash NPAT • Cash NPAT of $6.1m – up 36% on pcp Margins • Maintained portfolio margins despite funding cost headwinds Costs • Continued to demonstrate economies of scale – operating costs up 14% against 28
Slide 23: Net interest margin
• Net interest margin (NIM) for FY24 was 5.2%, with margins stable half- on-half 12.4% – NIM also stable year-on-year with FY23 portfolio margin of 5.2% 10.2% 10.8% 10.5% – Margins maintained despite ongoing increase in market interest rates, particularly in 1H24, with Plenti active in managing borr
Slide 24: Net loss rate and ECL provision
• FY24 net realised loan impairment expense of 1.06% was in line with expectations in the current macroeconomic environment • Moderate variation between 1H24 and 2H24, noting the first half 1.13% 1.16% benefitted from a debt sale which concentrated recoveries in this period 1.06% • The net loss rate
Slide 25: Full year Cash NPAT of $6.1m, up 36%
• Full year Cash NPAT of $6.1m, an increase of 36% on prior year • Cash NPAT growth achieved due to strong revenue and margin growth, Interest revenue 142.1 207.2 46% with controlled costs offsetting funding and impairment expense headwinds Other income 1.4 3.8 177% • Growth in revenue of 46% reflec
Slide 26: Plenti's $25m cost benefit ambition
$10 0m • Plenti’s 1H23 results set out an $3.0bn ambition to achieve a $25m cost benefit as we double the loan $3. 0bn $90 m $2.1bn book from $1.5bn to $3.0bn $2.0bn $80 m $1.8bn $2. 0bn • The chart on the left shows the $70 m $1.5bn required trajectory of costs $60 m against loan book growth to $1.
Slide 27: Funding and warehouse headroom
• Plenti remains differentiated by the diversity of its loan funding, which includes its retail investor platform • Continued to effectively manage warehouse facilities with good funder support 268 Warehouse headroom – All facilities extended, with restructure of one to an innovative rated structure
Slide 28: Outlook
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Slide 29: FY25 objectives
• Drive growth in loan originations and loan portfolio • Deliver full year Cash NPAT growth, skewed towards 2H25 • Reduce cost-to-income ratio to <24% • Remain on target to deliver $25m in efficiencies as loan portfolio scales towards $3bn 29
Slide 30: Appendices
Plenti Appendices
Slide 31: Operating cash flow
• Statutory operating cash flow for FY24 of $39.2m (FY23: $20.6m) – Includes $1.3m Provision Fund cash inflow (FY23: $2.3m) Operating cash flow • Corporate cash increased in the period by $17.0m, but excluding $14.0m Interest income received 153.0 220.4 relating to customer collection accounts, unde
Slide 32: Corporate cash position and balance sheet
• Corporate cash position at 31 March 2023 of $44.8m (31 March 2023: $27.8m) Assets – $24.0m relates to loan collection accounts which are not available for Cash and cash equivalents 143.0 148.9 corporate activities (31 March 2023: $10.0m) Customer loans 1,714.8 2,061.8 • Customers loan asset of $2,
Slide 33: Income statement summary
Interest revenue 36.6 50.6 63.2 78.9 95.9 111.2 25% 25% 22% 16% Other income 0.6 0.6 0.6 0.8 0.9 3.0 (7)% 31% 9% 251% Total revenue pre transaction costs 37.2 51.3 63.8 79.7 96.8 114.2 24% 25% 21% 18% Transaction costs (3.2) (7.7) (8.7) (10.0) (11.0) (11.7) 14% 15% 10% 6% Net income 34.0 43.6 55.0 6
Slide 34: Loan originations and portfolio metrics
Loan originations ($m) 558.2 572.8 624.1 577.2 1,102.3 1,131.0 1,201.3 472.8 629.5 Average term of new originations (months) 64.8 65.0 64.6 64.2 64.4 63.8 64.9 64.4 64.1 Closing loan portfolio ($m) 915.1 1,299.7 1,547.6 1,766.2 1,992.4 2,138.3 1,299.7 1,766.2 2,138.3 Average loan portfolio ($m) 754.
Slide 35: Originations and portfolio by product
Loan originations ($m) 472.8 629.5 558.2 572.8 624.1 577.2 1,131.0 1,201.3 1,102.3 Automotive 269.3 327.6 296.5 571.7 624.2 257.7 381.6 302.3 639.3 Renewable energy 69.4 76.3 83.2 122.0 159.5 46.3 51.9 52.6 98.3 Personal 234.1 220.1 197.4 437.3 417.6 168.8 195.9 203.2 364.7 Closing loan portfolio ($
Slide 36: Cash NPAT reconciliation
NPAT (7.5) 1.2 2.6 (16.2) 0.6 (15.3) (6.3) (13.6) (14.7) Add: ECL provision expense1 3.6 3.8 4.2 10.1 1.5 11.5 7.4 14.3 13.0 Add: Share-based payments 1.2 1.6 1.4 1.9 1.8 1.4 2.8 3.4 3.2 Add: Depreciation & amortisation 0.5 0.6 0.7 0.8 0.8 0.8 1.0 1.5 1.5 Add: Income tax expense on hedge gain 0.0 (4
Slide 37: No recommendation, offer, invitation or advice
No recommendation, offer, invitation or advice The material in this presentation is general background information about Plenti Group Limited (the Company) and its subsidiaries, and is current at the date of the presentation, 22 May 2024. The information in this presentation is of a general nature a
Slide 38: Plenti
Plenti