Slide 1: 1H FY24 Investor Presentation
For personal use only 1H FY24 Investor Presentation 20 February 2024 Scott Baldwin (Managing Director & CEO) Siva Subramani (CFO)
Slide 2: Presenting Today and Agenda
Presenting Today Agenda For personal use only • Highlights • 1H FY24 Results • Risk and Governance • Outlook Scott Baldwin Siva Subramani Managing Director & Chief Chief Financial Officer • Questions Executive Officer 2
Slide 3: Highlights – 1H FY24
Highlights – 1H FY24 Asset Quality Revenue NPAT (underlying) 1H bad debts For personal use only Lifting minimum credit $109.7m $14.6m * 4.2% # acceptance criteria expected to lower Group up 5.9% on pcp full-year bad debts expected bad debt profile AU $87.0m + 14.2% on pcp Statutory NPAT $13.2m to be
Slide 4: Group Performance
AUD m 120 1H Revenue 104 110 AUD m 1000 Loan Book 910 942 Group 100 91 800 733 Performance For personal use only 80 601 68 63 600 60 434 400 40 • Strong AU loan book growth is offsetting NZ 200 20 contraction and lifting AU contribution to Group 0 0 performance FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY2
Slide 5: Country Performance
AUD m 100 AU 1H Revenue AUD m 900 AU Loan Book Country Performance 87 770 712 For personal use only 76 750 80 68 600 543 60 52 54 443 450 Australia 351 40 300 • Revenue growth up 14.2% to $87.0m on pcp 20 150 • Loan book growth up 23.3% to $769.7m on pcp • Focus on lower credit risk new lending 0 0
Slide 6: 1H FY24 Results
For personal use only 1H FY24 Results 6
Slide 7: Financial Results
Financial Results AUDm unless stated otherwise 1H FY24 (Underlying) Adjustments 1H FY24 (Statutory) 1H FY23 (Statutory) Growth %* Financial Results • Revenue increase driven by: For personal use only Revenue 109.7 - 109.7 103.6 5.9% − Loan book growth from taking market share, particularly in Austra
Slide 8: Debt Facilities
Current Forecast A $m Debt facilities – 1H FY24 A $m Debt facilities - 2H FY24 Debt Facilities For personal use only 1000 1000 934 • Diversified facilities (including major Australian, New Zealand and international banks) 775 800 232 800 • Consolidation in funding partners driving 75 simplicity 621
Slide 9: Credit Quality
Credit Quality Loan book quality For personal use only 1H FY24 55% 23% 16.5% 5.4% 0.10% • Credit quality of the portfolio is better than pre- COVID levels despite significant increase in inflation and tight macroeconomic factors FY23 56% 23% 16% 5% 0.04% • 78.0% of portfolio is in ‘Strong and Good’
Slide 10: Risk & Governance Framework
For personal use only Risk & Governance Framework 10
Slide 11: Regulatory Update
Regulatory Update Australian Securities and Investment Commission For personal use only • No material change to the status of the regulatory action from the update provided in 2023 Annual Report & AGM • ASIC has filed and served their evidence in December 2023 • Case management hearing conducted in
Slide 12: Risk & Governance
Australia • Lifted minimum credit acceptance criteria for new loans Risk & Governance • Focused growth in lower credit risk loans For personal use only • Increased compliance training (developed externally by an industry leading professional education provider) to strengthen understanding of respons
Slide 13: Summary & Outlook
For personal use only Summary & Outlook 13
Slide 14: Summary
Summary Funding Productivity • Simplification of NZ funding facilities • NZ productivity review targeting return to For personal use only • Commencing programs to reduce profitability in FY25 funding costs & complexity • Continued focus to extract synergies between business units Operations • Risk m
Slide 15: FY24 Outlook
FY24 Outlook For personal use only Macroeconomic Business Financial • Record demand for new vehicles • Ongoing action to reprice new • Loan book expected to be $970m - driving strong growth in secondary lending to lift margins whilst $1,000m markets maintaining target level of new loan volume • Bad
Slide 16: Questions
For personal use only Questions 16
Slide 17: Thank you!
Thank you! For personal use only CEO & Managing Director Scott Baldwin +61 3 7031 6019 s.baldwin@solvar.com.au Chief Financial Officer Siva Subramani +61 3 7031 6018 s.subramani@solvar.com.au Investor Relations Tom Ng +61 490 796 752 t.ng@solvar.com.au
Slide 18: About Solvar
For personal use only About Solvar 18
Slide 19: The Group
The Group Market Opportunity Specialist Lender Track Record For personal use only Addressable market 1m new vehicles2 Consumer vehicles Commercial vehicles Operating over 20 Management aligned $40+ billion 1 3m used vehicles3 87% 5% years across with shareholders sold annually AUS & NZ Profitable &
Slide 20: ESG, people and culture
ESG, people and culture OUR VALUES For personal use only Customers are at the Heart of Care and Over 6,000 trees Recycling & employee everything Respect Carbon Neutral planted & 7+ climate engagement programs status achieved in We deliver products We treat people as projects funded in all Solvar off
Slide 21: Appendix
For personal use only Appendix 21
Slide 22: Alternate P&L Financial results
Alternate P&L Financial results For personal use only Financial results 1H FY24 1H FY23 Growth % Amounts in $m unless otherwise stated • Presentation of financial results in line Interest income, fees & charges 109.7 103.6 5.9% with non-bank peers Interest expense (26.7) (19.1) (39.8%) Net Interest
Slide 23: Product Summary
Product Summary For personal use only Product Location Australia New Zealand Consumer Consumer Consumer Commercial Consumer Purpose Vehicle Finance Personal loans Vehicle Finance Vehicle Finance Vehicle Finance Maximum up to $100,000* up to $35,000* up to $100,000* up to NZ$100,000 loan amount Term
Slide 24: Glossary of terms
Glossary of terms For personal use only A$ or $ - Australian dollars M3 - Money3 business unit Active customer - A customer with an outstanding balance NPAT – Net Profit After Tax ASIC – Australian Securities and Investment Commission NIM – Net Interest Margin AFCA – Australian Financial Complaints
Slide 25: Disclaimer
For personal use only Disclaimer The content of this presentation has been prepared by Solvar Limited (the Company) for general information purposes only. Any information included in this presentation on future financial performance, including industry sectors, income, profit and employment types, r