Credit Corp Group Limited · ASX:CCP

Credit — Shareholder Meeting (October 2023)

19 slides from Credit's shareholder meeting presentation, Oct 24, 2023

  1. Slide 1: FY2024 Performance Update

    For personal use only 24 OCTOBER 2023 FY2024 PERFORMANCE UPDATE THOMAS BEREGI CEO

  2. Slide 2: Leadership of the credit impaired consumer segment

    LEADERSHIP OF THE CREDIT IMPAIRED CONSUMER SEGMENT … ANALYTICS AND DISCIPLINE OPERATIONAL EXCELLENCE SUSTAINABILITY AND COMPLIANCE For personal use only TARGET Australian / NZ debt buying Long term growth  Large database  High asset turnover 1  Low dispute rate  History of pricing accuracy  Low

  3. Slide 3: In challenging conditions

    … IN CHALLENGING CONDITIONS … SEGMENT ASSESSMENT OF CONDITIONS CREDIT CORP RESPONSE For personal use only US debt buying  PDL1 pricing reduced with continuing strong supply  Secure strong FY24 investment pipeline at historically low pricing  Collection conditions more challenging since late FY23

  4. Slide 4: Which have affected performance

    … WHICH HAVE AFFECTED PERFORMANCE …  Sustained deterioration in US collection conditions For personal use only - Increased repayment plan delinquency emerged in Q4 FY23 - Elevated delinquency persisted throughout Q1 FY24  Reforecast of remaining collections to reflect a continuation of these condi

  5. Slide 5: Despite US operational improvement

    … DESPITE US OPERATIONAL IMPROVEMENT  Sustained productivity improvement For personal use only  September collections and closing payment arrangement book impacted by one-off factors (including Hurricane Idalia) US Productivity Per Hour (A$) US Collections and Arrangement Book (A$m) $ $m $m 350 60

  6. Slide 6: Lending growth is tracking to expectation

    LENDING GROWTH IS TRACKING TO EXPECTATION …  Volumes sufficient to grow the loan book and segment earnings For personal use only Consumer Lending Book and Annualised Revenue Lending Volumes by Quarter $m $m 120 400 $358m $368m $331m 100 300 $251m 80 $200m 200 60 $162m 40 100 20 0 0 Q2 FY22 Q4 FY22

  7. Slide 7: While credit performance improves

    … WHILE CREDIT PERFORMANCE IMPROVES  Arrears and losses remain within pro-forma For personal use only  Recent fall in arrears 30+ days arrears 1 Loss Provision to Realised Losses (%) 30% 1.3 27% 24% 25% 21% 21% 21% 1.2 20% 19% 18% 1.1 15% 13% 16% 12% 15% 15% 1.0 10% 5% 0.9 - FY19 FY20 FY21 FY22 FY

  8. Slide 8: Balancing cost reduction and performance in AU/NZ debt buying

    BALANCING COST REDUCTION AND PERFORMANCE IN AU/NZ DEBT BUYING  Asset turnover maintained For personal use only  Cost reduction as collections run-off AU/NZ PDL Collections, Asset Turnover and Cost to Collect Ratio $m 100 1.6 80 1.2 60 0.8 40 38% 38% 39% 41% 37% 0.4 20 0 0.0 Q1 FY23 Q2 FY23 Q3 FY23

  9. Slide 9: PDL investment pipeline approaching guidance range

    PDL INVESTMENT PIPELINE APPROACHING GUIDANCE RANGE …  $50 million to contract to reach guidance range For personal use only  Historically low US pricing represents an opportunity to underpin future earnings growth Purchased Debt Ledger (PDL) Investment $m 400 350 300 250 FY24 purchasing guidance -

  10. Slide 10: With the capacity to increase investment

    … WITH THE CAPACITY TO INCREASE INVESTMENT  Current investment guidance implies strong free cash flow generation over the balance of FY24 For personal use only Free cash flow $m Current 2 Projected 80 30 June 2024 60 Undrawn facility / cash $80m $140m 40 Net debt to financial assets 29% 22% 20 Net

  11. Slide 11: Revised guidance

    REVISED GUIDANCE For personal use only FY24 GUIDANCE FY24 GUIDANCE ISSUED AUG-23 REVISED OCT-23 Ledger investment $200 - $250 million $200 - $250 million Net lending $45 - $55 million $45 - $55 million NPAT ex-impairment $90 - $100 million $80 - $90 million NPAT statutory $90 - $100 million $35 - $4

  12. Slide 12: Appendices: Key operating metrics

    APPENDICES: For personal use only KEY OPERATING METRICS Credit Corp Group AGM update 2023 – 12

  13. Slide 13: Appendices: Key operating metrics

    APPENDICES KEY OPERATING METRICS Appendix 1: AU/NZ and US operational debt buying metrics 14 For personal use only Appendix 2: Payers base 15 Appendix 3: Productivity 16 Appendix 4: Collections life cycle 17 Appendix 5: Operational and total headcount 18 Credit Corp Group AGM Update 2023 – 13

  14. Slide 14: AU/NZ and US debt buying operational metrics

    APPENDIX 1 AU/NZ AND US DEBT BUYING OPERATIONAL METRICS AU/NZ DEBT BUYING Q1 FY2024 Δ Q1 FY2023 For personal use only Collections $73m (16%) Productivity $320 per hour 1% Operations headcount 1 649 (17%) Payers book 1 $1,330m (6%) US DEBT BUYING Q1 FY2024 Δ Q1 FY2023 Collections $48m 6% 2 Productivi

  15. Slide 15: Payers base

    APPENDIX 2 PAYERS BASE Portfolio Summary: Debt buying For personal use only AU/NZ COMBINED AU/NZ/US 1 TOTAL PORTFOLIO DEC-20 JUN-21 DEC-21 JUN-22 DEC-22 JUN-23 SEP-23 Face value $8.6b $8.5b $7.9b $11.8b $12.7b $12.8b $13.1b Number of accounts 1,392,000 1,326,000 1,252,000 2,863,000 2,993,000 2,952,0

  16. Slide 16: Productivity

    APPENDIX 3 PRODUCTIVITY Productivity Per Hour (A$) 1 For personal use only $ 400 350 300 250 YTD SEP-23 AVERAGE: 200 FY2024: $294 150 FY2023: $313 100 50 0 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep 12m to Sep-22 12m to Sep-23 1. Combined AU/NZ and US segment productivity Credit Corp Group AGM

  17. Slide 17: Collections life cycle

    APPENDIX 4 COLLECTIONS LIFE CYCLE PDL Collections by Vintage 1 For personal use only $m 160 (8%) 2 140 120 34% 29% 33% 33% 30% 32% 33% 37% 33% 32% 100 33% 33% 40% 39% 40% 35% 41% 32% 34% 19% 30% 34% 34% 12% 12% 80 30% 31% 18% 13% 14% 19% 15% 20% 15% 15% 15% 13% 14% 16% 16% 18% 16% 14% 17% 17% 60 14%

  18. Slide 18: Operational and total headcount

    APPENDIX 5 OPERATIONAL AND TOTAL HEADCOUNT For personal use only Period End Headcount (FTE) 2,500 JUN-22 JUN-23 SEP-23 2,000 Debt buying operations 1,296 1,255 1,185 Collection services 229 571 1 612 1 1,500 Lending 162 231 249 1,000 Support 153 204 1 213 1 500 Total 1,840 2,261 2,259 Support % 8% 9

  19. Slide 19: For more information, please contact

    For personal use only FOR MORE INFORMATION, PLEASE CONTACT: THOMAS BEREGI MICHAEL EADIE Chief Executive Officer Chief Financial Officer Tel +61 2 8651 5777 Tel +61 2 8651 5542 tberegi@creditcorp.com.au meadie@creditcorp.com.au

Credit Corp Group — Shareholder Meeting (October 2023) on 6ix