Credit Corp Group Limited · ASX:CCP
Credit — Corporate Update (April 2017)
18 slides from Credit's corporate update, Apr 27, 2017
Slide 1: FY17 Market update
cc Credit Corp Group /FY17 Market upda / 27 April 2017 y Thomas Beregi, CEO Michael Eadie, CFO
Slide 2: Leadership in the credit impaired consumer segment
Leadership in the credit impaired consumer segment... —s Credit Corp Group ANALYTICS & OPERATIONAL DISCIPLINE EXCELLENCE Core Australian / NZ debt buying SUSTAINABILITY & COMPLIANCE « Largest database ¢ Highest asset turnover 1 . ¢ History of pricing accuracy ¢ Lowest cost to collect 2 Australian /
Slide 3: ...and return disciplines have generated sustained performance
—, ...and return disciplines have generated sustained performance... credit Corp Group Cents per share ROE % Prey ee eeeeseeeet tO Oeeeeeesy, pensenenn assesses ee TEPER Ce esac cece eee ceenecen nnn seen ssseensseseseeeeeeseeeessseeeeeeee . eeeeeee a A A a Ao . a EPS CAGR 21% FY10 FY11 FY12 FY13 FY
Slide 4: ...while positioning CCP for the next wave of opportunity
…while positioning CCP for the next wave of opportunity Market conditions CCP response • Maintain discipline and AUS / NZ • Pricing remains strong with signs of easing ahead preserve resources for easing PDL purchasing - New capital has stimulated pricing ahead - At the same time CCP has renewed som
Slide 5: Expanded loan facility to seize the opportunity
Expanded loan facility to seize the opportunity <7 Credit Corp Group $300m of funding lines in place until 2020 - Delivers >$100m headroom Includes $85m securitised consumer loan warehouse facility - Unique in credit-impaired segment - 50% advance rate Gearing 70% 60% 50% 40% 30% 20% 10% Gearing rem
Slide 6: AUS / NZ PDL market remains competitive
<7 AUS / NZ PDL market remains competitive Credit Corp Group « Pricing continues to be strong - Both listed competitors upgraded purchasing guidance for FY17 - New capital has entered the market (equity raising / private equity) - Loss of some share in maintaining return discipline ¢ Signs of easing
Slide 7: Debt purchasing metrics remain strong
Debt purchasing metrics remain strong Pricing accuracy and returns on track Productivity maintained • Total cumulative collections above aggregate • YTD productivity in line with pcp expectations • Total collections up 12% over pcp • Collections life cycle on track with 6% increase in collections fr
Slide 8: Consumer loan revenue growing strongly...
—, Consumer loan revenue growing strongly... Credit Corp Group Gross loan book excl. provisions $161m $156m $72m i<—— Yield maintained Jun 12 Dec 12 Jun 13 Dec 13 Jun 14 Dec 14 Jun 15 Dec 15 Jun 16 Dec 16 Mar 17 mms Gross loan book (excluding provisions) +eeeeee Annualised revenue FY17 Market update
Slide 9: ...driving returns and profit
—s ...driving returns and profit Credit Corp Group ¢ Returns and profit accelerate with scale ROA % NPAT ¢« Seasonal earnings skew to H2 12% $12m * On track for pro-forma ROA of 12% in FY18 i 8% £ i : $8m i H2 } 4% : $4m (4%) (8%) ($4m) FY14 FY15 FY16 FY17 meee NPAT ee ROA 9 se cnne ROA (projected)
Slide 10: US market conditions continue to improve
US market conditions continue to improve • Reduced demand - Industry consolidation over the past 3 years - Major debt buyer placed into bankruptcy (SquareTwo) 1 • Enlarged supply - Charge-off rates increased from 3.04% (Q1 2016) to 3.56% (Q4 2016) 2 • Competitors report improved returns - 15% price
Slide 11: Expanding operational capacity to service increased purchasing
Expanding operational capacity to service increased purchasing • Increased operational capacity - US headcount now 177, up from 152 at H1 - On track for 200 by year end • Step-up in purchasing over recent months - On track to outlay A$45m in US in FY17 - Recent purchases made at CCP hurdle return •
Slide 12: Updated FY17 guidance
Updated FY17 guidance Issued Jan 2017 Updated Apr 2017 PDL acquisitions $225 - $235m $235 - $240m Net lending $35 - $45m $40 - $45m NPAT $53 - $55m $53 - $55m EPS (basic) 112 - 116 cents 112 - 116 cents FY17 Market update | 12
Slide 13: Questions
Credit Corp Group Questions FY17 Market update |13
Slide 14: Appendix
Credit Corp Group Appendix FY17 Market update |14
Slide 15: Chart 1: Operational metrics - pricing discipline and accuracy
—s Chart 1: Operational metrics - pricing discipline and accuracy Credit Corp Group Cumulative collections $2.5bn Actual cash collections $2.0bn $1.5bn Initial projections $1.0bn $0.5bn < & A & © 3S ~ * Rn ol ~ oS Rn ¢ . * ° 3S < y ¥ y ¥ y ¥ y ¥ y ¥ y ¥ y ¥ y ¥ y ¥ w * For all PDLs held at June 2008
Slide 16: Chart 2: Operational metrics - collection life-cycle
—, Chart 2: Operational metrics - collection life-cycle Credit Corp Group PDL collections by vintage +12% | $105m A a ™ $90m A ia ™ $75m aN 32% 32% 32% Pe 28% 29% 31% $60m 24% 25% 26% $45m $30m Qi Q2 Q3 Q4 Qi Q2 Q3 Q4 Qi Q2 Q3 Sep 14 Dec 14 Mar 15 Jun 15 Sep 15 Dec 15 Mar 16 Jun 16 Sep 16 Dec 16 Mar
Slide 17: Chart 3: Operational metrics - productivity
—s Chart 3: Operational metrics - productivity Credit Corp Group Debt purchase productivity (direct collection staff only) PDL collections per hour $ 300 YTD Mar-17 average: $202 FY16 average: $203 $ 250 —e— 2016/17 $ 200 ser@ees 2015/16 $ 150 $ 100 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun FY
Slide 18: Chart 4: Operational metrics - payers base
Chart 4: Operational metrics - payers base Total portfolio Dec 14 Jun 15 Dec 15 Jun 16 Dec 16 Mar 17 Face value $4.8bn $4.9bn $5.1bn $5.3bn $5.7bn $5.7bn Number of accounts 698,000 703,000 687,000 673,000 699,000 697,000 Payment arrangements Face value $963m $1,044m $1,099m $1,171m $1,235m $1,290m N