Slide 1: Financial Year 2023 Investor Presentation
Financial Year 2023 Investor Presentation 15 August 2023 Scott Baldwin (CEO & Managing Director) Siva Subramani (CFO)
Slide 2: Highlights – FY23
Highlights – FY23 Revenue EBITDA Bad Debt Cash NPAT $209.3m $110.8m 3.7% $145.9m $47.6m of loan book Increase 11.4% on pcp Increase 11.9% on pcp Unrestricted cash of Down 7.7% on pcp $187.9m $99.0m flat on pcp (3.7%) $78.3m $51.6m Loan Book Originations EPS - 22.6c RoE Shareholder 12.8% Return $910.
Slide 3: FY23 Group performance
FY23 Group AUD m Revenue AUD m Loan Book 250 1000 910 performance 209 200 188 800 733 145 601 150 124 600 434 92 373 100 74 400 253 50 200 • Loan book continuing to deliver revenue growth 0 0 FY18 FY19 FY20 FY21 FY22 FY23 • Stable credit quality moderating FY18 FY19 FY20 FY21 FY22 FY23 bad debts • S
Slide 4: Solvar Group
Solvar Group Loan Book $m Specialist Commercial Lender Personal Strategy Vehicles (5%) Loans (8%) $171 Consumer Commercial Personal Sustainable and Vehicles (87%) Vehicles (5%) Loans (8%) profitable growth $540 >95% secured Strong collections lending focus ~93% secured lending Track Record Loans to
Slide 5: Financial Review
Financial Review 5
Slide 6: Financial results
Group financial results FY23 FY22 Growth % Financial results Amounts in $m unless otherwise stated Revenue 209.3 187.9 11.4% Bad debts (33.4) (27.2) 22.8% • Strong, double digit organic Movement in impairment provisions (4.4) (5.3) (17.0%) revenue growth in Australia Other operating expenses (60.7)
Slide 7: Loan book – Key drivers
Loan book - Key drivers FY23 FY22 Loan book – Key drivers Amounts in $m unless otherwise stated Gross loan book 910.1 733.4 Deferred revenue (62.0) (49.7) • $62.0m of deferred revenue to be recognised over the life of the Impairment provision (43.7) (39.1) loans Impairment provision % • Impairment p
Slide 8: Debt facilities
Debt facilities Debt $m facilities 1000 940 • Diversified debt facilities (including major Australian, New 229 Zealand and International banks) 800 $323m headroom • $323.3m debt funding headroom 74 617 600 35 • Existing facilitates enable book 64 35 growth to over $1.3b 238 158 • $78.3m of unrestric
Slide 9: Interest expense & borrowings
$m Average borrowings & interest rates $m Interest expense & 600 50 41.9 borrowings 521.3 40 400 23.1 30 22.2 • Significant reduction in interest rate spread achieved over 3 344.0 20 years 200 218.0 • ~28.0% of borrowings fully 10 hedged • ~68.0% loan book leverage 0 0 • RBA rate 4.1% (30 June 2023)
Slide 10: Stable credit quality
Loan book quality Stable credit quality FY23 56% 23% 16% 5% • Stable credit quality profile despite 0.01% inflationary pressures and recessionary environment FY22 58% 25% 14% 3% 0.02% • 79.0% of portfolio is in ‘Strong and Good’ credit quality category FY21 58% 25% 14% 3% • Full-year bad debts at 3.
Slide 11: Outlook
Outlook 11
Slide 12: FY24 – Outlook
FY24 – Outlook Market Outlook • Reduced competition providing opportunity to take market share in Australia • Further increases in front book margins to improve yield on book over time • Recession in New Zealand contracting demand will see GCF loan book contract Financial Outlook for FY24 • Loan boo
Slide 13: Appendices
Appendices 13
Slide 14: Appendix 1 – Alternate P&L
Appendix 1 – Alternate P&L Financial Financial results results FY23 FY22 MVT % Amounts in $m unless otherwise stated • Presentation of financial results in line Interest income, fees & charges 209.3 187.9 11.4% with non-bank peers Interest expense (41.9) (23.1) 81.4% Net Interest Income 167.4 164.8
Slide 15: Appendix 2 - Products
Appendix 2 - Products Product Location Australia New Zealand Consumer Consumer Consumer Commercial Consumer Purpose Vehicle Finance Personal loans Vehicle Finance Vehicle Finance Vehicle Finance Target up to $75,000 up to $30,000 up to $100,000 up to $100,000 loan amount Term 24 - 72 months 12 - 60
Slide 16: Appendix 3 – Group performance
Appendix 3 – Group performance Financial results FY17 FY18 FY19 FY20 FY21 FY22 FY23 (In $m unless stated otherwise) Revenue 56.0 73.6 91.7 124.0 145.1 187.9 209.3 EBITDA 30.5 40.5 46.3 49.1 80.9 99.0 110.8 EPS 10.30 13.20 13.00 12.08 19.85 24.40 22.55 (cents) Dividends 5.65 9.50 10.00 8.00 10.00 13.
Slide 17: Appendix 4 – Corporate information
Appendix 4 – Corporate information Capital Structure Shares on issue 208.0 million Share Price (11 August 2023) $1.195 Market Capitalisation $248.6 million Board of Directors Stuart Robertson Non-Executive Chairman Scott Baldwin CEO & Managing Director Symon Brewis-Weston Non-Executive Director Kate
Slide 18: Glossary of terms
Glossary of terms A$ or $ - Australian dollars NPAT – Net Profit After Tax Active customer - A customer with an outstanding balance NIM – Net Interest Margin ASIC – Australian Securities and Investment Commission NAF – Net Amount Financed: The amount of credit advanced to a customer in respect to th
Slide 19: Disclaimer
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, represent estimates of
Slide 20: Managing Director & CEO
Managing Director & CEO 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 Simon Hinsley +61 401 809 653 simon@nwrcommunications.com.au