Propel Holdings, Inc. · TSX:PRL
Propel — Investor Presentation (November 2021)
31 slides from Propel's investor presentation, Nov 22, 2021
Slide 1: Investor Presentation
INVESTOR PRESENTATION TSX:PRL November 22, 2021
Slide 2: Disclaimer
Disclaimer FORWARD-LOOKING INFORMATION Certain statements made in this presentation may constitute forward-looking information under applicable securities laws. These statements may relate to our future financial outlook and anticipated events or results and include the reaffirmation of our short-te
Slide 3: Investment Highlights
Investment Highlights § Consumer-focused fintech lending platform § Leading-edge, AI-driven, agile tech infrastructure unlocking credit market opportunity § Innovative, transparent products and services, including 3 transformational bank programs § Profitable, scalable business with ample growth opp
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: More than 25% of U.S. adults are unable to afford a $400 emergency expense
More than 25% of U.S. adults 3 in 10 U.S. adults are unable to afford a experience hardships due to $400 emergency expense income volatility Despite regulatory encouragement, +60M U.S. adults lack access to traditional credit from mainstream credit providers, making even a small unexpected expense a
Slide 6: Propel: the fintech platform for underserved consumers
PROPEL: the fintech platform for underserved consumers focused on helping 25% of U.S. adults get access to the credit they need 6
Slide 7: Financial Inclusion for the Underserved Population
Financial Inclusion for the Underserved Population Mainstream Bank Credit Products Legacy Products Online, scalable fintech offering convenient, fair and transparent access to credit with potential to build credit and NO surprise fees, DECLINED origination fees, late fees or prepayment penalties Tie
Slide 8: Propel Today
Propel Today 100% online At Scale Fintech Profitable $571M ~7M <10 second 73% in originations* unique applications per year** initial credit decisions YOY growth in revenue YTD Q3 2021 789,000 20,000+ ~88% $23M funded loans and unique applications per of applications Adjusted EBITDA YTD Q3 2021 line
Slide 9: Products
PRODUCTS Inclusive Transparent Evolving “MoneyKey was there for me when no one else was. They help give me the money for bills I did [not] have a clue if I could pay. I’m really thankful that they came through for me.” ~ Christopher, MoneyKey Customer 9
Slide 10: Brands & Products
Brands & Products Propel Brand Consumer Product Operating Structure Fully amortizing installment State-Licensed Direct Lender loans Credit Services Organization/Credit Access Business Open-ended Lines of Credit Bank Sub-servicer Open-ended Lines of Credit Bank Partner Product and service offerings a
Slide 11: 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 2+ years, • Propel platform • Some programs • Financial literacy the cost of c
Slide 12: Platform to Succeed
Platform to Succeed Convenient Seamless Mobile “I would like to thank this company for helping me through this tough time. […] I would like for you to know that they see the best in you and will help in your time of need thank you so much.” ~ TyJuan, MoneyKey Customer 12
Slide 13: Industry-Leading Proprietary Technology
Industry-Leading Proprietary Technology Designed for Consumer Needs 30-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) + $12M invested to date
Slide 14: Looking Beyond Traditional Credit Scores
Looking Beyond Traditional Credit Scores Our sophisticated AI-powered engine with machine learning algorithms provides opportunities for creditworthy consumers 1,000+ Attributes Evaluate Credit Worthiness $600,000,000 Fund More 16% 14% $500,000,000 Alternative Credit Bureau Data Sub-10 second, Misse
Slide 15: World Class Operations Team
World Class Operations Team Relentless focus on service and performance “I believe CreditFresh helped me out in a very difficult time. They were enthusiastic, supportive, interested in my personal needs… Thank you CreditFresh!!” ~ Joseph, CreditFresh Customer Excellent 4.6 and 4.7 ratings from thous
Slide 16: Financial Overview
FINANCIAL OVERVIEW Profitable Diversified Resilient “CreditFresh accepted me when no one else would. The process was quick and easy. The loan was very helpful. Thank you.” ~ Benjamin, CreditFresh Customer 16
Slide 17: Recent Financial Performance
Recent Financial Performance Track Record of Profitable Growth Revenue Net Income Adjusted EBITDA* US$M US$M US$M $88.5 $22.7 $8.8 $8.5 $20.0 $73.5 $68.0 $7.3 $60.2 $16.0 $51.0 $32.7 $8.0 $2.6 $6.8 $2.0 $5.0 $16.5 $4.2 $0.6 2018 2019 2020 YTD Q3 YTD Q3 Q3 2020 Q3 2021 2018 2019 2020 YTD Q3 YTD Q3 Q3
Slide 18: Q3 2021 Financial Performance: Revenue
Q3 2021 Financial Performance Revenue US$M § Record Originations and Ending Loan and Advance Balances § Expansion and growth in bank programs $88.5 § Propel platform facilitating lower cost products, increasing credit spectrum coverage $73.5 $68.0 § New marketing partners and channels $60.2 § Wider
Slide 19: Q3 2021 Financial Performance: Provisions and Net Charge-offs
Q3 2021 Financial Performance Provision for loan losses and other liabilities (“Provision”) and Net Charge-offs* § Credit metrics improving over the long-term due to evolution towards lower-risk consumers 49% 47% § Q3 2021 performance reflects: 42% § Q3 2020 uncharacteristically low due to COVID- re
Slide 20: Q3 2021 Financial Performance: Net Income
Q3 2021 Financial Performance Net Income US$M § In Q3 2021, Net Income impacted by: § Low portfolio growth in Q3 2020, therefore lower $8.5 $8.8 provisioning and customer acquisition costs in that period $7.3 § Atypically high credit quality in Q3 2020 § Return to normalized growth and seasonality p
Slide 21: Q3 2021 Financial Performance: Adjusted EBITDA
Q3 2021 Financial Performance Adjusted EBITDA* US$M § Adjusted EBITDA excludes transaction costs and provisioning for Stage 1 loans, better reflective of operating $22.7 performance $20.0 § Variances consistent with the factors impacting Net Income: $16.0 § Low portfolio growth in Q3 2020, therefore
Slide 22: Solid Financial Position
Solid Financial Position § Ending Combined Loan and Advance Balances* of $96.8 million Outstanding Debt Maturities (in US$M ) § Over $83 million in undrawn credit capacity as of September 30, 2021 MoneyKey (Capacity) $120.0 MoneyKey (Utilized) § Debt:equity 2.1x at quarter-end , post-IPO 0.7x Credit
Slide 23: Maintaining Financial Targets
Maintaining Financial Targets Target CAGR Short-Term Target Ending Combined Loan and Advance Balances Facilitated over 100% the Propel Platform Target Metric Short-Term Target Revenue Yield 140% - 150% Annualized Adj. EBITDA Margin 22% - 26% Annualized Net Income Margin 8% - 10% 23
Slide 24: Ready for Tomorrow
READY FOR TOMORROW Poised Focused Strategic “Excellent staff, outstanding services, affordable payment rates, very customer-friendly – CreditFresh is the best…!” ~ Linus, CreditFresh Customer 24
Slide 25: Evolving into a Diversified Online Global Fintech Company
Evolving into a Diversified Online Global Fintech Company Adjacent products • Design, deliver and cross-sell Geographic expansion complementary • Expansion into products aligned new states and with Propel’s core jurisdictions purpose Serving lower risk markets Graduating • Extension of existing cons
Slide 26: Appendix A
Appendix A g!PROPEL HOLDIN
Slide 27: Our Management Team
Our Management Team Clive Kinross Gary Edelstein Noah Buchman Sheldon Saidakovsky Sarika Ahluwalia Co-Founder and President Co-Founder and Co-Founder and Vice President, Chief Executive Officer Executive Vice President; Executive Vice President; Chief Compliance Officer President of CreditFresh Chie
Slide 28: Board of Directors
Board of Directors Michael Stein Clive Kinross Peter Monaco Poonam Puri Geoff Greenwade Karen Martin Yousry Bissada Mr. Stein is the founder, Co-Founder and CEO Mr. Monaco is Managing Ms. Puri is a professor of Mr. Greenwade was the Ms. Martin was the Mr. Bissada is President Chairman and CEO of of
Slide 29: Appendix B
Appendix B g!PROPEL HOLDIN
Slide 30: Non-IFRS Measure Reconciliation
Non-IFRS Measure Reconciliation US$ Three Months Ended Sept 30, Nine Months Ended Sept 30, 2021 2020 2021 2020 Net Income 626,044 2,566,736 8,775,498 8,463,160 Interest on Debt 1,212,845 902,706 4,124,761 2,888,953 Interest on lease liabilities 106,564 114,941 334,008 356,929 Amortization of intangi
Slide 31: Non-IFRS Measure Reconciliation
Non-IFRS Measure Reconciliation US$ Three Months Ended Sept 30, Nine Months Ended Sept 30, 2021 2020 2021 2020 Charge-Offs (12,367,844) (3,213,703) (29,538,250) (20,344,316) Recoveries 1,896,699 1,216,119 4,315,404 3,551,508 Net Charge-Offs (10,471,145) (1,997,584) (25,222,846) (16,792,808) Movement
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