International Personal Finance Plc · LSE:IPF
International Personal Finance — FY2023 Earnings Presentation
32 slides from International Personal Finance's earnings presentation, Mar 14, 2024
Slide 1: Delivering the growth opportunity
2023 full-year results Delivering the growth opportunity March 2024 Building a better world through financial inclusion
Slide 2: Performance, strategy and regulation
Performance, strategy and regulation Gerard Ryan Chief Executive Officer 2
Slide 3: Delivering on our promises
Delivering on our promises Executing on our strategy +8% Rebuilding scale and delivering growth £83.9m 14.8% Profit before tax RoRE Financial results well ahead of plan Returns close to target threshold 10.3p Dividend per Strong balance sheet to deliver growth 56% share Equity to receivables +12% 3
Slide 4: Delivering purposeful, profitable growth
Delivering purposeful, 2.5m profitable growth customer ambition Multiple growth opportunities Complete transition in Poland Solid foundation Building a better world through financial inclusion 4
Slide 5: New credit card in Poland
Case study New credit card in Poland 130k + 12 month amortisation of transactions cards issued to eliminate persistent debt £500 average balance 953,000 ATM, retail and online transactions Customers appreciate additional utility of a credit card Impairment performance consistent with instalment loan
Slide 6: Expanding in Mexico
Case study Expanding in Mexico Financially including more consumers in Mexico by expanding new locations and growing our digital offering 1m+ Good potential to grow customers 21,000 mobile wallet customers since launch in 2023 Expanded into Tampico in 2023 New branch opening in Mexicali planned in 2
Slide 7: Exciting retail partnership opportunities
Case study Exciting retail partnership opportunities Creating more points at which consumers can access our offering to deliver additional growth momentum through instore credit Expanding distribution following successful concept tests Provident loans to finance consumer purchases 160 + New partners
Slide 8: Our Next Gen strategy
Our Next Gen strategy We aim to be the leading provider of financial services for underserved communities around the A new vision world, data driven, technology-enabled and always with a human touch Three strategic Financial inclusion Organisation Technology and data pillars Deploy product family Be
Slide 9: Strong product growth opportunities in Europe
Strong product growth opportunities in Europe Poland Czech Republic Hungary Romania Value Value Value Value Home Home Home Home added added added added credit credit credit credit services services services services Digital Hybrid Digital Hybrid Digital Hybrid Digital Hybrid loans loans loans loans
Slide 10: Improving customer experience
Case study Improving customer experience Think Customer Heroes Our scale gives us additional benefits and generates insight that can be rapidly deployed across our markets +69 91% Net Promoter Score customer satisfaction Speed of customer call-back improved from 72% of customers contacted within 15
Slide 11: Instant messaging transforming lead management
Case study Instant messaging transforming lead management Account verified with META Leveraging customers’ preference for Facebook and WhatsApp in Mexico to transform our lead 24-hour service management processes Interactive chatbot 8 questions to check eligibility 165%+ Sale of integral insurance 5
Slide 12: Regulatory update
Regulatory update Romania • Proposed total cost of credit cap expected to be enacted – no material impact Poland • Polish financial supervision authority, KNF, issued guidance to all credit card issuers • KNF expects: - credit card charges to be subject to limits on non-interest costs - issuers to d
Slide 13: Financial performance
Financial performance Gary Thompson Chief Financial Officer 13
Slide 14: Our target financial model
Our target financial model RoRE 15% - 20% • All investment decisions based on delivering 20%+ RoRE* • Our financial model is supported by rigorous focus on: Target - Revenue yield 56% - 58% Maintains equity to Supports minimum - Impairment rate 14% - 16% receivables ratio dividend payout at 40% rati
Slide 15: Customer lending - robust demand for affordable credit
Customer lending - robust demand for affordable credit £398m £303m £362m £289m • Group customer lending: £312m £248m - Reduction of 3.5% at a headline level - Growth of 8% excluding Poland 10% 5% • European home credit: - Romania (+14%), Hungary (+8%) and Czech Republic (+8%) all delivered good grow
Slide 16: Strong receivables growth despite tight credit standards
Strong receivables growth despite tight credit standards £187m £302m £173m • Strong growth in Group receivables, excluding Poland, of 12% £269m £151m £223m • European home credit: 12% 8% - Strong growth in Romania (23%) and Hungary (10%) - Improvements to field processes in Czech Republic lay the fo
Slide 17: Progressing well towards medium-term targets
Progressing well towards medium-term targets Revenue yield Impairment rate Cost-income ratio 60% 25% 70% 58% Target range 65% 56% 20% 55% 55.3% 15% Target range 16% 60% 14% 50% 55% 57.0% 10% 12.2% 51% 50% Target range 45% 5% 49% 45% 0% 40% 40% FY-20 FY-21 FY-22 FY-23 FY-20 FY-21 FY-22 FY-23 FY-20 FY
Slide 18: Growth in profit, earnings and dividends
Growth in profit, earnings and dividends Profit before tax Pre-exceptional earnings per share (EPS) Dividend per share 8% 23.2p 12% 12% £83.9m 20.8p 10.3p £77.4m 18.8p 9.2p £67.7m 8.0p 2021 2022 2023 2021 2022 2023 2021 2022 2023 • Profit growth of 8% significantly ahead of • 12% growth in EPS compa
Slide 19: Rebuilding returns towards Group target of 15% to 20%
Rebuilding returns towards Group target of 15% to 20% Group European home credit 25% 20% Target range 14.8% 20% 20.5% 15% Target range 10% 11.1% 15% 5% 10% 0% 5% -5% HY-20 FY-20 HY-21 FY-21 HY-22 FY-22 HY-23 FY-23 0% -10% HY-20 FY-20 HY-21 FY-21 HY-22 FY-22 HY-23 FY-23 -5% -15% -20% -10% RORE RORE a
Slide 20: Diversified funding and conservative capital position
Diversified funding and conservative capital position • Successfully raised and extended £146m of debt facilities in 2023 £433m • £170m+ of facilities maturing beyond 2025 Bonds £126m • Substantial headroom of £126m and strong cash flow £629m Headroom1 generation Total debt facilities • Engaging wit
Slide 21: Outlook
Outlook Gerard Ryan Chief Executive Officer 21
Slide 22: Delivering the growth opportunity
Delivering the growth opportunity • Strong momentum from 2023 continues into 2024 • Significant demand for affordable consumer credit • Focus on extending financial inclusion by expanding product choices and geographic reach • Deploying more digital solutions to improve customer experience • Continu
Slide 23: Questions
Questions Building a better world through financial inclusion
Slide 24: Appendices
Appendices Building a better world through financial inclusion
Slide 25: Group
Group Change at FY 2023 FY 2022 Change Change CER £m £m £m % % Customer numbers (000s) 1,700 1,733 (33) (1.9) (1.9) Customer lending 1,150.6 1,126.4 24.2 2.1 (3.5) Average gross receivables 1,388.9 1,244.5 144.4 11.6 5.9 Closing net receivables 892.9 868.8 24.1 2.8 (0.2) Revenue 767.8 645.5 122.3 18
Slide 26: European home credit
European home credit Change at FY 2023 FY 2022 Change Change CER £m £m £m % % Customer numbers (000s) 761 784 (23) (2.9) (2.9) Customer lending 616.6 637.0 (20.4) (3.2) (7.1) Average gross receivables 801.6 747.5 54.1 7.2 3.0 Closing net receivables 483.0 501.0 (18.0) (3.6) (5.5) Revenue 379.7 317.5
Slide 27: Mexico home credit
Mexico home credit Change at FY 2023 FY 2022 Change Change CER £m £m £m % % Customer numbers (000s) 716 696 20 2.9 2.9 Customer lending 302.8 257.4 45.4 17.6 4.8 Average gross receivables 299.4 239.0 60.4 25.3 11.7 Closing net receivables 187.1 158.5 28.6 18.0 8.3 Revenue 261.6 210.9 50.7 24.0 10.8
Slide 28: IPF Digital
IPF Digital Change at FY 2023 FY 2022 Change Change CER £m £m £m % % Customer numbers (000s) 223 253 (30) (11.9) (11.9) Customer lending 231.2 232.0 (0.8) (0.3) (3.4) Average gross receivables 287.9 258.0 29.9 11.6 8.4 Closing net receivables 222.8 209.3 13.5 6.5 5.8 Revenue 126.5 117.1 9.4 8.0 4.5
Slide 29: Strong financial profile
Strong financial profile FY 2023 FY 2022 Receivables (£m) 892.9 868.8 Equity (£m) 501.9 445.2 Equity to receivables 56.2% 51.2% Gearing 1.0 times 1.2 times Interest cover 2.5 times 2.3 times Pre-exceptional EPS 23.2p 20.8p Pre-exceptional RoE 11.1% 11.5% Pre-exceptional RoRE 14.8% 14.6% 29
Slide 30: Balance sheet
Balance sheet FY 2023 FY 2022 Change at £m £m CER Goodwill 23.6 24.2 - Fixed assets 70.0 64.5 6.2% Receivables 892.9 868.8 (0.2%) Cash 42.5 50.7 (18.4%) Borrowings (511.8) (548.8) 8.6% Other net liabilities (15.3) (14.2) (27.5%) Equity 501.9 445.2 8.1% At FY-23, borrowings is stated net of deferred
Slide 31: Exchange rates
Exchange rates Closing rates Average Closing rates Average Dec 2023 2023 Dec 2022 2022 Polish zloty 5.0 5.2 5.3 5.5 Czech crown 28.5 27.9 27.2 28.5 Euro 1.2 1.1 1.1 1.2 Hungarian forint 441.3 437.3 450.8 452.3 Romanian leu 5.7 5.7 5.6 5.8 Mexican peso 21.5 21.9 23.5 24.6 Australian dollar 1.9 1.9 1.
Slide 32: Contacts
Contacts Rachel Moran Investor Relations Mobile: +44 7760 167637 Email: rachel.moran@ipfin.co.uk Krzysztof Adamski Group Treasurer Mobile: +48 600 400 394 Email: krzysztof.adamski@ipfdigital.com Building a better world through financial inclusion
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