Slide 1: 1H24 Results
1H24 RESULTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2023 Stuart Grimshaw | CEO Adrian Fisk | CFO 20 February 2024 Authorised for release by the hummgroup Board of Directors humm Group Limited, ACN 122 574 583 Level 1, 121 Harrington Street, The Rocks, Sydney NSW 2000
Slide 2: Agenda
1H24 INTERIM REPORT // February 2024 01 | HIGHLIGHTS 02 | COMMERCIAL UPDATE AGENDA 03 | CONSUMER FINANCE 04 | GROUP FINANCIALS 05 | SUMMARY 06 | APPENDICES 2
Slide 3: Highlights
01 HIGHLIGHTS
Slide 4: 1H24 Highlights
1H24 INTERIM REPORT // February 2024 1H24 HIGHLIGHTS STRONG AND STABLE ROBUST CREDIT IMPROVING COST DRIVING SHAREHOLDER BALANCE SHEET PERFORMANCE EFFICIENCY VALUE $159m Unrestricted cash 1.68% Group Net Loss/ANR3 $26.1m Costs removed since start of $28.1m Normalised Cash Profit Historical low for th
Slide 5: Group Normalised Cash Profit and Segment Contributions
1H24 INTERIM REPORT // February 2024 GROUP NORMALISED CASH PROFT AND SEGMENT CONTRIBUTIONS POSPP ($5.0m) HUMMGROUP ($M) 1H24 1H23 MVMT Gross income 298.7 240.4 58.3 Origination costs (14.0) (15.7) 1.7 Interest expense (132.1) (70.4) (61.7) Net operating income 152.6 154.3 (1.7) 21.6 Commercial Net l
Slide 6: Growth Drivers
1H24 INTERIM REPORT // February 2024 GROWTH DRIVERS COMMERCIAL CONSUMER • Targeting further growth in Commercial business focusing on: • Launch of personal loan product in 2H24 in humm AU business leveraging our current ecosystem to address existing merchant - geography; client needs - new industry
Slide 7: Commercial Update
02 COMMERCIAL UPDATE
Slide 8: Commercial
1H24 INTERIM REPORT // February 2024 COMMERCIAL $M 1H24 1H23 MVMT STRONG MOMENTUM IN COMMERCIAL BUSINESS • Normalised Cash Profit (after tax) of $21.6m up 12% on pcp Gross income 132.8 85.3 56% • 56% increase in gross income to $132.8m, the result of from strong receivable growth with Interest expen
Slide 9: Credit Quality – Strong Diversification
1H24 INTERIM REPORT // February 2024 CREDIT QUALITY –STRONG DIVERSIFICATION SECTOR CONCENTRATION STATE CONCENTRATION CREDIT SCORE 619 630 622 630 630 ` 1H22 2H22 1H23 2H23 1H24 0-399 400-499 500-599 600-699 700-799 800+ BROAD BASED EXPOSURE AND DIVERSIFICATION WITH IMPROVED CREDIT SCORES >> Low sect
Slide 10: Consumer Finance
03 CONSUMER FINANCE
Slide 11: Consumer Finance
1H24 INTERIM REPORT // February 2024 CONSUMER FINANCE $M 1H24 1H23 MVMT REDUCED EARNINGS AS WE REPLATFORM THE CONSUMER BUSINESS Normalised Cash Profit (after tax) of $6.5m – down 66% on pcp a result of: Gross income 165.9 155.1 7% • Gross income benefiting from 6% higher receivables and continued re
Slide 12: Consumer Business – Segment Performance
1H24 INTERIM REPORT // February 2024 CONSUMER BUSINESS – SEGMENT PERFORMANCE CONSUMER NZ CARDS AU POSPP • $432m volume up 13% on PCP (including LTIF) • 1H24 volume of $254m was down 5% on PCP • 1H24 humm AU volume up $58m to $355m, with • 4.6% growth in receivables in 1H24 to $634.5m • Receivables c
Slide 13: Consumer Business – Priorities
1H24 INTERIM REPORT // February 2024 CONSUMER BUSINESS – PRIORITIES CONSUMER NZ CARDS AU POSPP • Enhance Q Brand to leverage further opportunities • Long term interest free volumes underpinned by 1H24 • Continued focus on larger ticket purchases with the • Roll out APR increases with benefit realisa
Slide 14: Group Financials
04 GROUP FINANCIALS
Slide 15: Hummgroup Financial Performance
1H24 INTERIM REPORT // February 2024 HUMMGROUP FINANCIAL PERFORMANCE NORMALISED CASH PROFIT (AFTER TAX) HUMMGROUP ($M) 1H24 1H23 MVMT % • Normalised cash profit of 28.1m down 27% on pcp Gross income 298.7 240.4 58.3 24% • Gross income of $298.7m a 24% increase on pcp aligned to receivable growth and
Slide 16: Base Rates and Credit Spreads Increasing Interest Expense
1H24 INTERIM REPORT // February 2024 BASE RATES AND CREDIT SPREADS INCREASING INTEREST EXPENSE INDICATIVE INCREASES IN INTEREST EXPENSE BBSW 3M CURVE 4.8% 4.6% 4.4% 4.2% 34bps 4.0% 3.8% 3.6% Spot 1-Year 2-Year 3-Year 4-Year 5-Year At 30 June 2023 Current ` The increase in interest expense was mainly
Slide 17: Committed to Cost Efficiency
1H24 INTERIM REPORT // February 2024 COMMITTED TO COST EFFICIENCY $m HUMMGROUP OPERATING EXPENDITURE ($M) COST REDUCTIONS DELIVERED $26.1M IN SAVINGS TO DATE • $7.5m of cost savings delivered in the current period. $26.1m in cost savings delivered since cost out program commenced in 1H23 • Further m
Slide 18: Credit Risk Management
1H24 INTERIM REPORT // February 2024 CREDIT RISK MANAGEMENT CONTINUED REDUCTION IN NET LOSS TO ANR ACROSS THE GROUP GROUP PRODUCT 1 BASE 1H24 1H23 MVMT • Net Loss/ANR of 1.68% down 27bps on 1H23 reflecting strength in credit decisioning and collections management practices across both the Commercial
Slide 19: A Differentiated Funding Platform
1H24 INTERIM REPORT // February 2024 A DIFFERENTIATED FUNDING PLATFORM $47.1M INCREASE IN UNRESTRICTED CASH BALANCE WHOLESALE FUNDING AND CORPORATE DEBT FACILITY DEC 23 JUN 23 6,000 5,662 5,662 4 999 4,999 5,000 1,156 Unrestricted Cash 159.4 112.3 4,000 983 3,000 Material increase in unrestricted ca
Slide 20: Efficient and Effective Use of Capital to Drive Returns
1H24 INTERIM REPORT // February 2024 EFFICIENT AND EFFECTIVE USE OF CAPITAL TO DRIVE RETURNS STRONG AND STABLE PRE-TAX DIVIDEND RETURN CAPITAL INITIATIVES BALANCE SHEET OF 3.3%1 TO DRIVE RETURNS Fully franked 1H24 dividend Receivables grew 23% of 0.75cps totaling $3.8m 40% of Board approved share to
Slide 21: Summary
05 SUMMARY
Slide 22: Outlook
1H24 INTERIM REPORT // February 2024 OUTLOOK STRONG BALANCE POSITIVE CREDIT INITIATIVES TO RENEWED FOCUS DRIVE PROFITABLE SHEET POSITION PERFORMANCE DELIVER IN-YEAR ON CUSTOMER GROWTH COST SAVINGS VALUE CAPITAL INITIATIVES PROPOSITION TO IMPROVE SHAREHOLDER VALUE 22
Slide 23: Appendices
06 APPENDICES
Slide 24: To Be the Provider of Finance for Bigger Purchases
1H24 INTERIM REPORT // February 2024 TO BE THE PROVIDER OF FINANCE FOR BIGGER PURCHASES CONSUMER FINANCE ANZ leading provider #1 POS financer for POSITIONING of specialist asset finance transactions over $1,000 RECEIVABLES $2.7b CORE EXPERTISE $2.0b VERTICALS/ Logistics // Engineering // >> Instant
Slide 25: Non-Bank Lenders Overtake Banks as Providers of SME Lending
1H24 INTERIM REPORT // February 2024 NON-BANK LENDERS OVERTAKE BANKS AU AND NZ’S LEADING PROVIDER SPEED TO DECISION AND AS PROVIDERS OF SME LENDING OF SPECIALIST ASSET FINANCE SETTLEMENT, with specialist offering Equipment finance TAM $45b (AU) and $8b (NZ) Delivered solely through the broker channe
Slide 26: Reconciliation of Normalised Cash Profit to Statutory Profit
1H24 INTERIM REPORT // February 2024 RECONCILIATION OF NORMALISED CASH PROFIT TO STATUTORY PROFIT HUMMGROUP ($M) 1H24 1H23 MVMT Normalised cash profit (after tax) 28.1 38.5 (10.4) Amortisation of intangibles (2.4) (2.3) (0.1) Impairment of intangibles (2.8) (2.0) (0.8) Movement in AASB9 provision (8
Slide 27: Flexicommercial
1H24 INTERIM REPORT // February 2024 FLEXICOMMERCIAL FLEXICOMMERCIAL (AU/NZ) 1H24 2H23 1H23 • 55% CAGR in receivables since 1H22 demonstrating our competitive service offering and strong market position with small and medium enterprise. High volume in 2H23 attached Volume (A$m) 761.5 819.5 744.8 to
Slide 28: Consumer AU
1H24 INTERIM REPORT // February 2024 CONSUMER AU HUMM AUSTRALIA2 1H24 2H23 1H23 AUSTRALIA CARDS 1H24 2H23 1H23 Volume (A$m) 405.7 428.8 434.5 Volume (A$m) 254.0 248.9 266.0 Receivables (A$m) 732.2 683.8 664.7 Receivables (A$m) 429.1 434.2 437.8 Product yield (%)1 14.2 13.3 15.4 Interest bearing bala
Slide 29: Consumer NZ
1H24 INTERIM REPORT // February 2024 CONSUMER NZ • Volume has grown as a result of increased customer spend in the New Zealand market NEW ZEALAND CARDS 1H24 2H23 1H23 • Receivables were impacted by lower prior period volumes and higher paydown rates, Volume (A$m) 432.0 366.5 381.1 consistent with th
Slide 30: AASB9 Provision Movements
1H24 INTERIM REPORT // February 2024 AASB9 PROVISION MOVEMENTS NET LOSS INCREASE OF $2.8M ON PCP $M 1H24 1H23 MVMT • Net loss of $37.2m increased by $2.8m on pcp driven by increases in receivables. Net loss to Net loss1 37.2 34.4 2.8 ANR at Group level reduced by 27bps to 1.68% for the current year
Slide 31: Disclaimer
1H24 INTERIM REPORT // February 2024 DISCLAIMER No recommendation, offer, invitation or advice anything contained in, or omitted from, this presentation. This presentation is not a financial product or investment advice or recommendation, offer or invitation by any person or to any person to sell or
Slide 32: Thank You
THANK YOU