Cembra Money Bank Ag · SIX:CMBN
Cembra Money Bank — Mirabaud Swiss Equity Forum 2024
40 slides from Cembra Money Bank's conference presentation, May 16, 2024
Slide 1: Cembra - a leading player in financing solutions and services in Switzerland
Cembra - a leading player in financing solutions and services in Switzerland Mirabaud Swiss Equity Forum Geneva, 16 May 2024
Slide 2: Key messages
Key messages Focus on strategy execution 1 Solid results in 2023 and on track to deliver on strategy and mid-term targets by 2026 2 Cembra’s DNA impact: robust loss performance, pricing and cost discipline, diversified funding mix Personal loans and auto leasing businesses focused on profitable grow
Slide 3: Agenda
Agenda 1. Cembra at a glance 2. Business performance 3. Strategy execution and outlook Appendix 3 May 2024 Investor presentation C e m bra
Slide 4: Cembra at a glance
Cembra at a glance Cembra at a glance A leading provider of financing solutions and services in Switzerland Who we are Key figures Net revenues FY 2023 (CHF) • A leading independent consumer finance specialist, serving >2 million customers in Switzerland 10% • Strong positions in personal loans, aut
Slide 5: Market positions
Cembra at a glance Market positions Serving >2 million customers across the business lines Lending and Payments Lending Payment Personal loans: 38% market share Auto business: 20% market share Credit cards: 12% market share BNPL: 30-40% market share 31 December 2023, personal loans market 31 Decembe
Slide 6: Long-term risk performance
Cembra at a glance Long-term risk performance High quality of assets – loss performance resilient through economic cycles Loss rate NPL and delinquencies1 Reported 3% Adjusted for one-off 30+ days past due 2% 1.0 1.1 Non-performing loans (NPL) 0.8 0.9 0.9 0.8 0.8 1% 0.6 0.6 0% Jun’07 Dec-16 Dec-17 D
Slide 7: Sustainability
Cembra at a glance Sustainability Strong external ESG recognition, and commitment to further improve Sustainability performance Selected targets External recognition • Reduced Scope 1+2 emissions intensity significantly since 2014 Reduce Scope 1+2 carbon emissions by 75% by 2025 Low ESG risk E • 100
Slide 8: Dividends
Cembra at a glance Dividends About CHF 1.2 billion dividends paid out since the IPO in 2013 Dividends CHF per share Extraordinary dividend from excess capital 4.45 3.95 4.00 3.75 3.75 3.75 3.85 3.55 3.35 • 69% average payout ratio since 3.10 2.85 the IPO • Dividend for 2024 of at least CHF 4.00 Pay-
Slide 9: Agenda
Agenda 1. Cembra at a glance 2. Business performance 3. Strategy execution and outlook Appendix 9 May 2024 Investor presentation C e m bra
Slide 10: FY 2023 performance
Business performance FY 2023 performance Continued solid business performance Highlights Net income Net financing receivables Net revenues in CHF m in CHF m in CHF m • Net income of CHF 158.0 million (-7%); Net interest income H2 2023: +5% year on year -7% +3% Commission and fees +1% • +3% net finan
Slide 11: Products and markets
Business performance Products and markets Continued profitable growth, with leading positions in attractive markets Lending Payments Personal loans Auto loans and leases Credit cards Buy now pay later (BNPL) • Continued decisive repricing • Launch of leasing platform • Certo! transition completed, •
Slide 12: Net revenues and net interest margin
Business performance Net revenues and net interest margin Repricing actions led to rebound of net interest margin in H2 2023 Net revenues Comments In CHF m H1 2023 H2 2023 • Net revenues +1% with increase of interest expense more than offset by additional revenues • Q4 2023 as a turning point in ful
Slide 13: Provision for losses
Business performance Provision for losses Continued robust loss performance Provision for losses NPL and delinquencies 56.4 56.9 3% 51.2¹ 48.5² 2.1% 2.0% 40.9 2% 1.8% 1.8% 1.6% 30+ days past due Reported 0.7% 0.7% 0.8% 45.1 1% 0.6% 0.6% 40.3 Adjusted for one-off¹,² Non-performing loans (NPL)4 0% Dec
Slide 14: Funding
Business performance Funding Further diversified, with retail funding growing Funding mix Funding instruments In CHF m1 6,602 6,133 150 1 - AT1 subordinated One issuance, remaining term to first call 0.9 years at 2.50%1 5,700 150 250 Non-deposits – 47% 1 150 250 2 250 2,180 2 - Convertible bond One
Slide 15: Capital position
Business performance Capital position Tier 1 capital ratio of 17.2% and attractive dividend policy Tier 1 capital walk Risk-weighted assets In CHF m In CHF m 17.8% 158 17.2% +3% 1,055 1,046 -117 -50 6,090 31.12.2022 Net income Dividend Adoption US GAAP 31.12.2023 5,938 (local stat) for Group (US GAA
Slide 16: Agenda
Agenda 1. Cembra at a glance 2. Business performance 3. Strategy execution and outlook Appendix 16 May 2024 Investor presentation C e m bra
Slide 17: Strategic programmes
Strategy execution and outlook Strategy 2022 – 20261 Reimagining Cembra Key messages Strategic ambition We will leverage technology to deliver the most intuitive customer solutions in consumer finance Cembra’s We will draw on the strengths of our world-class credit factory and our leadership Core DN
Slide 18: Review strategy execution
Strategy execution and outlook Review strategy execution Progress 2022 and 2023 overall in line with targets Strategy execution 2022-23 Financial targets achievement 2022-23 • Decisively implemented repricing measures KPI Targets 2022-262 2022 2023 Cembra’s • Continued solid loss performance, cost d
Slide 19: Consumer finance market trends
Strategy execution and outlook Consumer finance market trends Attractive markets in Lending and Payments Macro view (as %) Trends in lending Swiss GDP growth Addressable lending market, in CHF bn 2.5 CAGR +3% 1.3 1.1 20 • Steady growth supported by long-term market • Resilient Swiss economy; 18 Cons
Slide 20: Business lines Lending and Payments
Strategy execution and outlook Business lines Lending and Payments Two distinct business lines addressing market opportunities Business characteristics Lending and Payments New simplified organisation Lending Payments Business lines Functions Market More stable and More dynamic and Operations dynami
Slide 21: Business line Lending
Strategy execution and outlook Business line Lending Continued delivery on profitable growth and leveraging new platforms Leverage DNA to drive profitability Personal loans Auto Cembra’s Continuously calibrate price/volume/risk DNA equation to drive profitable growth Pricing • Initiate platform rene
Slide 22: Business line Payments (I)
Strategy execution and outlook Business line Payments (I) Market trends creating opportunities, and Cembra well-positioned to capitalise Legend: Strengthening Strong Leading Key trends Description Cembra’s position Digital mobile payment / Easy payment options with mobile app, 400k+ users; co
Slide 23: Business line Payments (II)
Strategy execution and outlook Business line Payments (II) Building on unique capabilities to accelerate growth Foundation Targeted programmes Ambition Insights on more than ▪ Issuing push with new proposition for BNPL customers Cross-selling 2 million customers1 Increase product ▪ Establish Cembra
Slide 24: Cost/income ratio development
Strategy execution and outlook Cost/income ratio development < 39% target by 2026 confirmed Cost / income ratio Strategic investments Benefits from strategic programmes 50.6% 50.6% 50.9% 4% - 6% < 39% 5% - 7% 1% - 2% FY 2021 FY 2022 FY 2023 Income growth Cost reduction Cost reduction (other) FY 2026
Slide 25: Outlook
Strategy execution and outlook Outlook Continued resilient business performance expected in 2024 Outlook 20241 Financial targets until 20262 Deliver on strategic priorities • Lending: Continued delivery of profitable growth in auto leasing and ROE Tier 1 capital ratio Dividend per share personal loa
Slide 26: Appendix
Agenda Appendix 26 May 2024 Investor presentation C e m bra
Slide 27: Macroeconomic outlook
Appendix Macroeconomic outlook Swiss economy expected to remain resilient GDP in Switzerland Swiss vs. Eurozone CPI Inflation CHF interest rates Swiss unemployment rate Change vs. previous period as % End-of-period 3-year swap rates as % As %, average per year 10 8.4 6 5.1 8 Switzerland 4 2 1.69 5 2
Slide 28: P&L
Appendix P&L Commission and fee income +10% In CHF m 2023 2022 as % Interest income 422.1 385.6 9 Comments Interest expense -74.9 -29.4 >100 1 Higher interest income in all products 3 Increase driven by organic growth and Net interest income 1 347.2 356.2 -3 driven by repricing measures for new by t
Slide 29: Net financing receivables and yield development
Appendix Net financing receivables and yield development Repricing measures favourably impacting yield In CHF m Net financing receivables Personal loans Auto leases and loans Credit cards Net financing receivables Net financing receivables Net financing receivables +3% +6% -1% 3,147 -2% 2,975 3,068
Slide 30: Profitability by source
Appendix Profitability by source Decline of net interest margin offset by growing share of fee business Return on financing receivables 2.5% 2.6% 2.3% Comments FY 2023 + Net revenues • Net interest income affected by higher interest Net interest income 5.6% 5.5% 5.2% expense, compensated by price in
Slide 31: Credit cards
Appendix Credit cards Migration programme concluded – more than 2/3 of transition portfolio migrated FY 2023 credit cards vs guidance Transition to own offering Transition results Migrated Not-migrated Credit cards assets and revenues largely in line Migration Proprietary credit cards (B2C)1 with pr
Slide 32: Operating expenses
Appendix Operating expenses Diligent execution, -5% year on year in second half of 20231 In CHF m 2023 2022 as % Comments Compensation and benefits 1 137.0 135.5 1 1 Increase driven by acquisition of Byjuno 6 Decrease driven by reduction of office Professional services 2 20.8 22.0 -5 and consolidati
Slide 33: Balance sheet
Appendix Balance sheet Net financing receivables +3% In CHF m Assets 31.12.23 31.12.22 as % Comments Cash and equivalents 1 922 633 46 1 Higher balance driven by continued 4 For details see slide on ‘Funding’ Financing receivables1 6,844 6,612 4 disciplined funding management Allowance for losses 2
Slide 34: FY 2023 pro-forma segment reporting
Appendix FY 2023 pro-forma segment reporting Shift in net revenues mix (%) FY 2023 pro-forma segment reporting Lending Payments FY-2023 pro-forma Cembra Cembra Cembra CAGR +3% segment reporting Lending Payments total 379 439 516 Personal loans Credit cards Products Auto loans and Buy Now Pay leases
Slide 35: Glossary of key figures
Appendix Glossary of key figures including alternative performance measures To measure its performance, Cembra uses some key figures that are not defined under US GAAP. This glossary provides definitions of alternative performance measures (APM) and other key figures Key figures (including APM) Defi
Slide 36: Key figures over 10 years
Appendix Key figures over 10 years US GAAP 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Net revenues (CHF m) 379 389 394 396 439 480 497 487 509 516 Net income (CHF m) 140 145 144 145 154 159 153 161 169 158 Cost/income ratio (%) 42.5 41.5 42.5 42.4 44.0 48.3 49.8 50.6% 50.6% 50.9% Net fin rece
Slide 37: History
Appendix History Foundation as “Banque commerciale Launched credit Launched saving First public IPO at SIX Launched eny Finance Launched Updated Acquisition Launched et Agricole E. Uldry & Cie” in Fribourg cards through products for retail Auto ABS Swiss FNAC cards transaction IKEA cards strategy of
Slide 38: The Cembra share
Appendix The Cembra share Shareholder structure Institutional owners by domicile1 Based on nominal share capital of CHF 30m, as % Others Own shares UK 7% 2% 8% ~18,000 registered 23% private shareholders EU 10% 55% Switzerland 20% 75% US incl. CND ~1,100 institutional investors Main investors and in
Slide 39: Cautionary statement regarding forward-looking statements
Appendix Cautionary statement regarding forward-looking statements This presentation by Cembra Money Bank AG (“the Group”) includes forward-looking statements that reflect the Group’s intentions, beliefs or current expectations and projections about the Group’s future results of operations, financia
Slide 40: Calendar and further information
Calendar and further information Visit us at www.cembra.ch/investors Corporate events Investor conferences, roadshows and calls 24 July 2024 Publication 2024 half-year results 13 May 2024 Mirabaud Swiss Equities Forum, Geneva 11 June 2024 Stifel Swiss equities conference, Interlaken 25 July 2024 Roa