International Personal Finance Plc · LSE:IPF
International Personal Finance — FY2021 Earnings Presentation
30 slides from International Personal Finance's earnings presentation, Feb 23, 2022
Slide 1: IPF plc 2021 full-year results
IPF plc 2021 full-year results Strong rebound in growth and full-year profitability Gerard Ryan – CEO Kris Adamski – Group Treasurer Wednesday 23 February 2022
Slide 2: Strong financial performance: profit before tax
STRONG FINANCIAL PERFORMANCE PROFIT BEFORE TAX Group profit before tax £67.7 million • Successful execution of rebuild strategy £67.7m • Credit issued growing to meet consumer demand • All business divisions profitable (£40.7m) • Investing in growth activities enabled by tight cost 2020 2021 managem
Slide 3: Firmly back in growth mode
FIRMLY BACK IN GROWTH MODE High quality new lending driving receivables * 33% Credit issued £982m • Highly effective credit relaxation strategies delivering growth and quality • Strong correlation between relaxation of Covid * rules and increased customer demand 13% Closing receivables £717m • Custo
Slide 4: Financial performance
Financial performance Kris Adamski, Group Treasurer 4
Slide 5: Key drivers of £108 million profitability rebound
KEY DRIVERS OF £108 MILLION PROFITABILITY REBOUND Credit issued Closing receivables Revenue £717m £661m £982m £669m £549m £772m 13%* 15%* 33%* 2020 2021 2020 2021 2020 2021 Impairment % revenue Costs Profit before tax £67.7m 37.4% £315m £305m 27ppts 0.1%* £108.4m 10.2% 2020 2021 2020 2021 (£40.7m) 5
Slide 6: 33% credit issued growth, all divisions returned to growth
33% CREDIT ISSUED GROWTH ALL DIVISIONS RETURNED TO GROWTH £599m £194m £268m £454m £144m 39%* 40%* £255m £245m £214m European home credit Mexico home credit £189m £175m Q1 2021 Q2 2021 Q3 2021 Q4 2021 10%* IPF Digital 6 *at constant exchange rates
Slide 7: Closing receivables growth led to revenue growth in H2
CLOSING RECEIVABLES GROWTH……. ..….LED TO REVENUE GROWTH IN H2 * YOY * H2 VS H1 13% 10% £974m £362m £299m £286m £756m £717m £263m £669m £674m Dec June Dec June Dec H1 H2 H1 H2 2019 2020 2020 2021 2021 2020 2020 2021 2021 7 *at constant exchange rates
Slide 8: Excellent credit quality: impairment journey
EXCELLENT CREDIT QUALITY 2020 TO 2021 IMPAIRMENT JOURNEY £248m £96 million operational performance £80m £16m £32m £56m £64m 2020 Covid-19 Book size Provisions Collections 2021 unwinding performance GROUP IMPAIRMENT % REVENUE 37.4% 10.2% 2020 2021 8
Slide 9: Strong funding position and well capitalised balance sheet
STRONG FUNDING POSITION AND WELL Bonds CAPITALISED BALANCE SHEET Total debt facilities £402m • Well diversified funding Banks £575m • Upgrade in outlook from Fitch £173m • Successful SEK 450 million bond to 2024, 7% coupon • Bank funding extensions of £148 million Capacity Equity to receivables • St
Slide 10: Strategy and outlook
Strategy and outlook Gerard Ryan, CEO 10
Slide 11: Regulation
REGULATION • Covid-19 repayment moratorium in Hungary due to • Current moratorium 11k customers (previous: 45k) expire 30 June 2022 • Focus on re-engaging with ex-moratorium customers • Wide ranging and long-planned review • EU review of Consumer Credit Directive • Proposals this year, implementatio
Slide 12: Our purpose
OUR PURPOSE Building a better world through financial inclusion Our heritage • Providing access to regulated credit • Core ethos of forbearance and payment flexibility • Low and grow strategy to align with affordability • Provide unique value-added services Our journey • We have listened to stakehol
Slide 13: Our strategy: delivering a sustainable business
OUR STRATEGY Delivering a sustainable business Deliver excellent service Attract next generation to our loyal customers of customers Investing in technology More product choices • Delivers speed and simplicity • Digital, hybrid and mobile Being more than a lender New access points • Providing value-
Slide 14: European home credit
EUROPEAN HOME CREDIT Excellent execution delivering significant rebound in growth and profitability Serving our loyal customers Attracting the next generation What we’re doing What we’re investing in • Tailored credit relaxations to local conditions • Digital and hybrid in every country and demand •
Slide 15: Mexico home credit
MEXICO HOME CREDIT Rigorous operating rhythm delivering consistently improving results Serving our loyal customers Attracting the next generation What we’re doing What we’re investing in • All customer representatives using hand-held • Developing retailer relationships – pilot technology underway •
Slide 16: IPF Digital
IPF DIGITAL Improving product functionality to drive customer engagement Serving our loyal customers Attracting the next generation What we’re doing What we’re investing in • Unstable politics • Provided more payment holiday options • Developing Creditea brand to build out potential of Mexico, Polan
Slide 17: Capital management strategy
STRONG BALANCE SHEET CAPITAL MANAGEMENT STRATEGY Very positive growth momentum • Broad target equity / receivables 40% • Maintain strong equity-backed balance sheet • Equity / receivables Dec 2021 51% • Full year dividend of 8 pence per share • Balance sheet strength allows for: • Interim dividend t
Slide 18: Outlook
OUTLOOK • Growing demand for affordable credit • Expanding product / channel options to attract next generation customers • Leveraging technology to drive scale and improve customer experience • Purpose to shape future direction of the business 18
Slide 19: Questions
IPF plc 2021 full-results Questions 19
Slide 20: Appendix
IPF plc 2021 full-results Appendix 20
Slide 21: Group
Group 2020 2021 Change Change Change @ £m £m £m % CER % Customer numbers (000s) 1,682 1,727 45 2.7 Closing receivables 669.1 716.8 47.7 7.1 13.4 Credit issued 772.2 982.1 209.9 27.2 32.8 Average net receivables 777.6 677.0 (100.6) (12.9) (9.4) Revenue 661.3 548.7 (112.6) (17.0) (15.0) Impairment (24
Slide 22: European home credit
European home credit 2020 2021 Change Change Change @ £m £m £m % CER % Customer numbers (000s) 827 810 (17) (2.1) Closing receivables 389.5 425.9 36.4 9.3 16.6 Credit issued 453.8 599.2 145.4 32.0 39.4 Average net receivables 443.0 403.3 (39.7) (9.0) (4.5) Revenue 351.1 284.7 (66.4) (18.9) (16.4) Im
Slide 23: Mexico home credit
Mexico home credit 2020 2021 Change Change Change @ £m £m £m % CER % Customer numbers (000s) 599 654 55 9.2 Closing receivables 92.8 117.6 24.8 26.7 29.5 Credit issued 143.6 194.2 50.6 35.2 40.2 Average net receivables 102.5 102.8 0.3 0.3 2.9 Revenue 157.1 146.0 (11.1) (7.1) (6.5) Impairment (53.0)
Slide 24: IPF Digital
IPF Digital 2020 2021 Change Change Change @ £m £m £m % CER % Customer numbers (000s) 256 263 7 2.7 Closing receivables 186.8 173.3 (13.5) (7.2) (1.6) Credit issued 174.8 188.7 13.9 8.0 10.2 Average net receivables 232.1 170.9 (61.2) (26.4) (24.1) Revenue 153.1 118.0 (35.1) (22.9) (20.6) Impairment
Slide 25: IPF Digital established markets
IPF Digital established markets 2020 2021 Change Change Change @ £m £m £m % CER % Customer numbers (000s) 116 95 (21) (18.1) Closing receivables 98.8 78.5 (20.3) (20.5) (15.6) Credit issued 85.0 66.6 (18.4) (21.6) (20.2) Average net receivables 117.9 83.6 (34.3) (29.1) (27.0) Revenue 71.6 48.3 (23.3
Slide 26: IPF Digital new markets
IPF Digital new markets 2020 2021 Change Change Change @ £m £m £m % CER % Customer numbers (000s) 140 168 28 20.0 Closing receivables 88.0 94.8 6.8 7.7 13.9 Credit issued 89.8 122.1 32.3 36.0 39.2 Average net receivables 114.2 87.3 (26.9) (23.6) (21.2) Revenue 81.5 69.7 (11.8) (14.5) (12.1) Impairme
Slide 27: Strong financial profile
Strong financial profile 2020 2021 £m £m Receivables (£m) 669.1 716.8 Equity (£m) 370.5 367.1 Equity to receivables 55.4% 51.2% Gearing 1.4x 1.3x (Loss)/earnings per share (p) (28.9) 18.8 Interest cover 2.1x 2.5x 27
Slide 28: Balance sheet
Balance sheet Dec 2020 Dec 2021 Change at CER % Goodwill 24.4 22.9 - Fixed assets 63.1 56.7 (7.2%) Receivables 669.1 716.8 13.4% Cash 116.3 41.7 (63.8%) Borrowings (492.0) (471.6) 0.2% Other net assets / (liabilities) (10.4) 0.6 105.9% Equity 370.5 367.1 5.2% Borrowings is stated net of deferred iss
Slide 29: Exchange rates
Exchange rates FX rates Closing rates Average Closing rates Average 21 Feb 2022 Dec 2021 2021 Dec 2020 2020 Polish zloty 5.4 5.4 5.3 5.1 5.0 Czech crown 29.1 29.5 29.7 29.3 30.1 Euro 1.2 1.2 1.2 1.1 1.1 Hungarian forint 427.0 438.7 415.3 405.7 399.0 Romanian leu 5.9 5.9 5.7 5.4 5.5 Mexican peso 27.6
Slide 30: Contacts
Contacts Equity IR contact Rachel Moran Investor Relations Manager Telephone: +44 (0)7760 167637 Email: rachel.moran@ipfin.co.uk Debt funding IR contact Krzysztof Adamski Group Treasurer Telephone: +48 600400394 Email: krzysztof.adamski@ipfdigital.com 30
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