Pioneer Credit Ltd · ASX:PNC
Pioneer Credit — Shareholder Meeting (November 2018)
27 slides from Pioneer Credit's shareholder meeting presentation, Nov 29, 2018
Slide 1: Annual General Meeting – 29 November 2018
ASX release 29 November 2018 Annual General Meeting – 29 November 2018 Following are the Chairman’s Address and Chairman and Managing Director presentations to the Annual General Meeting of Pioneer Credit Limited (ASX: PNC) to be held today 29 November 2018 at 10 am at the Conference Centre, Ground
Slide 2: Chairman's Address to 2018 AGM – Michael Smith
ASX release 29 November 2018 Chairman’s Address to 2018 AGM – Michael Smith This is my fifth AGM address as Chairman of Pioneer Credit Limited, and it has been an honour to serve the Company and its shareholders over this period. I am very grateful to have the opportunity to work for such an effecti
Slide 3: Chairman's Address (continued): compliance record, NPS and remuneration
Our empathetic approach to our customers has ensured we have maintained our unblemished and unique compliance record, where Pioneer:- o has never had a negative determination by any Ombudsman, o has never had a reportable systemic issue, and o has never had to enter an enforceable undertaking of any
Slide 4: Community support and Pioneer Hearts program
Throughout FY18 and in FY19 we continue to support Telethon, Tour de Cure, a cycling event that supports cancer research, Starlight Children’s Foundation, ToyBox International, a Western Australian charity helping families of disadvantaged children, Variety, the children’s charity, and SF Super Seri
Slide 5: 2018 Annual General Meeting
29 November 2018 2018 Annual General Meeting
Slide 6: Important notice: Disclaimer
2 Important notice: Disclaimer This presentation has been prepared by Pioneer Credit Limited (“Pioneer”). Disclaimer: This presentation contains information about Pioneer’s activities current as at the date of the presentation and should not be considered to be comprehensive or to comprise all the i
Slide 7: Annual General Meeting Chairman's Address
29 November 2018 Annual General Meeting Chairman’s Address
Slide 8: FY18 key financial metrics
4 FY18 key financial metrics Record PDP liquidations drive record profit FY17 FY18 Profit after tax ($m) PDP liquidations $70.7m $101.7m +44% Services & lending revenue $1.9m $2.9m +53% CAGR = 40% 17.6 Net revenue $56.3m $81.5m +45% 10.8 EBITDA $35.0m $54.3m +55% 9.5 7.8 EBIT margin 31.0% 35.4% +14%
Slide 9: Key financial metrics since IPO
5 Key financial metrics since IPO Increasing operational scale underpins continued earnings growth EBITDA ($m) EPS (cps) DPS (cps) CAGR = 29% CAGR = 38% CAGR = 47% 54.3 14.33 28.88 35.0 20.36 20.77 9.80 9.50 29.7 31.2 8.55 16.40 19.5 7.97 3.10 FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 FY14 F
Slide 10: Net Promoter Score
6 Net Promoter Score NPS measures the willingness of a customer to recommend a product or service Pioneer historical NPS 48% Promoters 20 18 18 22% Passives +18 16 14 12 Pioneer NPS 10 NPS 30% Detractors 8 6 4 2 0 “Pioneer is a great company. Oct-17 Dec-17 Feb-18 Apr-18 Jun-18 Aug-18 Oct-18 They are
Slide 11: Custodians of shareholder wealth
7 Custodians of shareholder wealth Significant management ownership with incentives driving sustainable performance Incentivisation Vesting profile of EIP • Only 2 operational leaders are eligible for an STI with Executive and senior 2019 2020 2021 2022 2023 hard closes for any compliance issue mana
Slide 12: Community engagement
8 Community engagement Initiative that raises funds to WA Children’s Charity Children focused Charity Children's charity support cancer research Sponsorship to create moments Pioneer’s own community-based 24 hour telephone crisis Research focused to cure of joy and comfort for hospitalised volunteer
Slide 13: Annual General Meeting Managing Director's Presentation
29 November 2018 Annual General Meeting Managing Director’s Presentation
Slide 14: Our culture is our difference
10 Our culture is our difference Leadership Principles provide a framework to drive great outcomes for all stakeholders
Slide 15: Our culture is our difference
11 Our culture is our difference Pioneer’s competitive advantage • Inclusive and empowering Our culture Leadership Principles • Embedded in values for all stakeholders • Strict investment discipline Analytics drives selection of lower risk portfolios PDP selection • ‘Tier 1’ portfolios Preferr
Slide 16: Investment discipline
12 Investment discipline Demonstrated ability to invest in quality portfolios at fair price points over time Annual PDP investment cents per $ $m 0.20 90 80 70 60 50 40 30 20 10 - FY14 FY15 FY16 FY17 FY18 FY19F Bank forward flow (RHS) Inventory and non-bank forward flow (RHS) FY19 forecast Weighted
Slide 17: Sustainable cash generation
13 Sustainable cash generation Contribution from older vintages to increase in FY19 Portfolio liquidations by investment date • Liquidation contribution from newer vintages in FY18 influenced 7% 19% 18% 20% 15% 18% by investment growth immediately prior and during that period 18% 11% 10% • As invest
Slide 18: Payment arrangement portfolio
14 Payment arrangement portfolio Sustainable arrangements lead great customer outcomes Growth in PA book PA book metrics 22,685 CAGR = 31% customers 3.6% >30 days in arrears $237 average monthly payment 2.4 years June 2016 June 2017 November 2018 average existing relationship $155m $215m $300m outst
Slide 19: PDP investment
15 PDP investment Growing liquidations with efficient recycling of invested capital Cumulative cash generation $450m $400m $350m $300m $250m $200m $150m $100m $50m - FY14 FY15 FY16 FY17 FY18 FY19 YTD Cumulative liquidations Cumulative investment
Slide 20: Personal lending
16 Personal lending • Acquired a completed loan portfolio to supplement existing data set by +130,000 consumers • Internal data on over 360,000 financial consumers now referenced during credit risk assessment Unsecured rates from 11.99% to 18.99% • Product team with extensive lending experience • Ri
Slide 21: Personal loan portfolio
17 Personal loan portfolio Credit settings are tight and will continue for some time Personal loan customers by state # of loans disbursed 502 Average loan disbursed $19,663 Total loans disbursed $9.9m Average term 5.1 years 1% Average interest rate 13.7% 23% Average age of customer 38 years 25% 5%
Slide 22: Investment in technology
18 Investment in technology InDebted is a technology business providing data-driven solutions • A data-driven receivables platform leveraging machine learning to provide a personalised customer experience at scale • InDebted has a wide and growing range of customers in Australia, New Zealand and the
Slide 23: Investment in technology
19 Investment in technology Pioneer is commencing a two phase pilot programme • Phase one • Commences with Pioneer team members working from Indebted’s Sydney offices • Three employees (Solutions Specialists) with support provided by all functions from Pioneer • Focus on lowest risk product type • C
Slide 24: FY19 outlook
20 FY19 outlook Financiers continue to support growth and opportunities Funding • Pioneer is reviewing its debt funding following strong inbound enquiry from financiers o No imperative to settle a position in the short term o Focus on positioning the Company for next 3 years+ • ~$20m in funding capa
Slide 25: FY19 outlook
21 FY19 outlook A market of increasing opportunity for a disciplined Pioneer M&A opportunities • Continue to progress, albeit at a slower pace than desired, with our usual discipline and caution • Focus remains on developing a strong understanding of opportunities, particularly on cultural issues •
Slide 26: FY19 outlook
22 FY19 outlook A market of increasing opportunity for a disciplined Pioneer PDP investment • PDP investment opportunities are plentiful for Pioneer • The Banking Royal Commission has increased focus on quality with engagement for Pioneer increasing • LMI agreement has been renewed, off the back of
Slide 27: Contacts
23 Contacts Keith R. John Leslie Crockett Sue Symmons Managing Director Chief Financial Officer Company Secretary & General Counsel P: 08 9323 5001 P: 08 9323 5008 P: 08 9323 5020 E: krjohn@pioneercredit.com.au E: lcrockett@pioneercredit.com.au E: ssymmons@pioneercredit.com.au