Australian Finance Group Ltd. · ASX:AFG
Australian Finance — Investor Presentation (December 2023)
42 slides from Australian Finance's investor presentation, Dec 5, 2023
Slide 1: Market Release: AFG Strategy Investor Briefing Presentation
Market Release 5 December 2023 Market Announcements Office ASX Limited Exchange Centre 20 Bridge Street SYDNEY NSW 2000 For personal use only Dear Sir/Madam AFG STRATEGY INVESTOR BRIEFING PRESENTATION Australian Finance Group Ltd will address investors at a Strategy Investor Briefing today. Attached
Slide 2: AFG Strategy Investor Briefing
For personal use only AFG Strategy Investor Briefing December 2023
Slide 3: Presentation Outline
Presentation Outline Item Presenter Pages AFG David Bailey, Chief Executive Officer AFG 3-15 For personal use only Technology & data Sam McCready, Chief Customer Experience & Digital Transformation Officer 16-21 Fintelligence Chris Slater, Chief Executive Officer – Fintelligence 22-30 Financial disc
Slide 4: AFG Introduction
For personal use only AFG Introduction David Bailey, CEO
Slide 5: Helping Australians find a fairer deal for over 29 years
Helping Australians find a fairer deal for over 29 years Our founders saw an opportunity for mortgage brokers to provide a better solution for Australians’ finance needs. So, 29 years ago, they founded AFG and helped to create an industry. For personal use only 3,800+ 9,000+ Brokers Finance products
Slide 6: AFG's strategy is to be the aggregator of choice
AFG’s strategy is to be the aggregator of choice, distributing higher margin products through its national network Our purpose... Fairer financial future for all For personal use only Delivered through our competitive 3,800+ active brokers advantage… Creating… Competition and choice for brokers, cus
Slide 7: Operating in the large Australian finance market
Operating in the large Australian finance market Third largest industry in the Australian economy1 Combined $787 Billion settlements per annum with average 10-year growth of 6% per annum2 AFG offers Residential, Commercial, Asset Finance, Personal Loans For personal use only Residential Commercial &
Slide 8: AFG's diversified position in the finance value chain
AFG’s diversified position in the finance value chain Diversification strategy has seen AFG expand from Distribution to Manufacturing. This vertical expansion results in deeper margins. The industry is fragmented, which we expect will result in a period of broker consolidation Finance industry – Ser
Slide 9: Customers choose broker for 72% of all home loans
Customers choose broker for 72% of all home loans For most Australians, a mortgage is the largest financial decision in their life. We expect broker growth to continue and exceed 80% of the market – providing guidance, delivering competition & choice. For personal use only Lender direct Australian B
Slide 10: Residential mortgage market is transitioning
Residential mortgage market is transitioning Broker consolidation is inevitable, with aging broker demographics & increasing industry complexity, as well as a growing investment need in digital to meet evolving customer expectations. For personal use only Bigger and Consolidation Technology to drive
Slide 11: How we support AFG brokers
For personal use only How we support AFG brokers
Slide 12: Our 'shared growth' broker proposition
Our ‘shared growth’ broker proposition, means we’re invested in seeing our brokers succeed We are invested in helping our brokers grow, improving their efficiency and success. Our business model means when brokers grow, so do we creating earnings to reinvest and grow. Tools Platform Support For pers
Slide 13: Positioned for industry consolidation ahead
Positioned for industry consolidation ahead As the industry transitions aggregators that have the strength to invest in technology, establish new margin opportunities and advocate for the evolving industry complexities will take market share. • We are growth experts – The majority of AFG’s large gro
Slide 14: A history of driving change in the broking industry
A history of driving change in the broking industry We have helped our broker partners over our 29-year history through changing market dynamics & trends. Long-term partner of choice to stay ahead of new market conditions and continue to grow. When mortgage broking began When social media increased
Slide 15: Our 3,800+ broker distribution network is our biggest asset
Our 3,800+ broker distribution network is our biggest asset, with AFG executing on a range of initiatives to deliver growth ‘Grow the ocean’ ‘Deeper margins’ Deliver on Scale the AFG broker network New products / markets For personal use only Through our Grow our Provide market Leverage our distribu
Slide 16: Executed by an experienced executive team
Executed by an experienced executive team For personal use only David Bailey, CEO Lisa Bevan, COO Luca Pietropiccolo, CFO Sam McCready, CXO 21 years 25 years 1 year 18 years Chris Slater, Damian Percy, Them Lam, Brad Wearn, CEO Fintelligence GM Securitisation Head of Sales & Distribution CTO 28 year
Slide 17: Technology & data
For personal use only Technology & data Sam McCready Chief Customer Experience & Digital Transformation Officer
Slide 18: Enhancing broker experience through technology
Enhancing broker experience through technology AFG is an advice-based business, providing high quality support, backed by technology to drive efficiency, scalability and performance insights to brokers. Dedicated Partnership Complete broker technology Manager toolkit with Suite360 For personal use o
Slide 19: AFG is delivering a differentiated technology offering to brokers
AFG is delivering a differentiated technology offering to brokers Product Experience Operations Technology Ecosystem Operations focused on broker value For personal use only Products offered, information Delivery of broker-first experiences to Platforms and partnerships to while improving efficiency
Slide 20: AFG is progressing the execution of its digital strategy
AFG is progressing the execution of its digital strategy A digital strategy focused on delivering the immediate Streamlining how we operate and the pace needs of AFG brokers, providing a transformed at which we deliver for our brokers enables operating model and supporting business growth continued
Slide 21: Digital strategy supported by six foundations
AFG’s digital strategy is supported by six foundations providing a platform for sustainable growth Broker Experience Cyber Security Creating the digital eco system that enables For personal use only Cyber controls that aim to keep our brokers to provide best in market brokers & their customers safe
Slide 22: AFG technology is driving differentiation
AFG technology is driving differentiation in an industry that is becoming increasingly digitally focused We are … We have … A business that has deep functionally that enables brokers Industry experts, backed by rich data and insights that support growth opportunities for brokers & our team For perso
Slide 23: Fintelligence
For personal use only Fintelligence Chris Slater CEO, Fintelligence
Slide 24: Executed by an experienced executive team
Executed by an experienced executive team For personal use only Darren Rumble Liz Somers Greg Bellchambers Strategy & Partnerships Growth & Distribution Head of IT Scott Valle Tim Stevenson Group Operations Manager Broker & Referral Services 23
Slide 25: Fintelligence: a digital asset finance platform
Fintelligence: a digital asset finance platform Fintelligence provides a full-suite of services to brokers, assisting them to maximise their profit, grow and improve broker business efficiency. For personal use only • Built by brokers, for brokers • Proprietary ‘Ambition Cloud’ platform • Open API t
Slide 26: One of Australia's fastest growing asset finance aggregators
One of Australia’s fastest growing asset finance aggregator, currently <3% market share, with lots of growth opportunities Queensland origins, with national Predominately motor vehicle, with expansion commencing in ‘20 opportunity to expand across categories For personal use only NAF by NAF by State
Slide 27: Creating digital success, with proven technology capability
Creating digital success, with proven technology capability “Built by brokers, for brokers” delivering a unique fully digital end-to-end platform for Asset Finance brokers to integrate into their business For personal use only Product Experience Technology Ecosystem Operations Aggregation Platform p
Slide 28: Fintelligence benefits from AFG's distribution strength
Fintelligence benefits from AFG’s distribution strength, leading to an acceleration of its growth Grow our Provide market Leverage our distribution Strategic Pillars For personal use only broker network leading technology delivering higher margin Leverage broker recruitment and Develop and enhance o
Slide 29: Delivering $2.6bn in settlements in FY23
Delivering $2.6bn in settlements in FY23 Fintelligence and AFG provide brokers an opportunity to participate in the $257bn Asset Finance & Commercial market, with the highest exposure to the largest component of the asset finance market, motor vehicles at nearly 80% Fintelligence FY20 For personal u
Slide 30: Fintelligence's plan for continued growth
Fintelligence’s plan for continued growth Fintelligence introduces non-AFG brokers to the AFG proposition. Growth through expansion of the distribution network and the introduction of higher margin products ‘Grow the ocean’ ‘Deeper margins’ For personal use only Deliver on Scale the AFG broker netwo
Slide 31: Fintelligence is a digital business
Fintelligence is a digital business, with a broker efficiency mindset Delivering a full-service broker offer enabling both AFG & non-AFG brokers to efficiently grow in commercial & consumer asset finance a key differentiator for AFG to be Australia’s aggregator of choice We are … We have … For perso
Slide 32: AFG's financial discipline
For personal use only AFG’s financial discipline Luca Pietropiccolo, CFO
Slide 33: Returns focused decisions & strong cash generation
Returns focused decisions & strong cash generation has delivered 120% in total shareholder returns since listing Stable & predictable cashflows provides the platform for growth investment For personal use only Returns focused decisions Predictable cashflows Strong balance sheet • Rigorous investment
Slide 34: AFG's diversification strategy supports broker growth
AFG’s diversification strategy supports broker growth through new markets & higher margin products Earnings have grown 9% on a ... driven by increasing product diversity delivering higher compound average since listing … margin products distributed through AFG brokers Average margin For personal use
Slide 35: Distribution provides predictable earnings
Distribution provides predictable earnings, with higher margins from manufacturing when economics make sense Distribution Manufacturing Central services Underlying FY23 NPATA For personal use only Underlying ROE 45% Underlying ROE 21% $40 M $25 M -$17 M Business model comparison • No credit risk, or
Slide 36: Delivering earnings growth through investment
Delivering earnings growth through investment Investment positions AFG to capitalise on the industry transition. The investment is funded from the group’s strong cash generation, and the temporary reduction in the dividend payout to 50 to 60% for up to 24 months 1 Investment to support Investment in
Slide 37: AFG's investment evaluation approach
AFG’s investment evaluation approach Underlying Return on Equity of 24%1, with a through the cycle investment approach to create sustainable shareholder value. For personal use only Return on Capital Long term value creation Free cash flow Cash returns Optionality Share price Portfolio Shareholder I
Slide 38: AFG's strategic investments create a portfolio of growth options
AFG’s strategic investments create a portfolio of growth options Industry Trend Strategic Fit Digital business, provides brokers efficient processes to scale & diversify income For personal use only Fintelligence Strengthens AFG’s Asset Finance presence, reaching brokers beyond AFG network Optionali
Slide 39: Secure & predictable cashflows provide the foundation for growth
AFG’s secure & predictable cashflows provide the foundation for its next growth phase We have … For personal use only High quality recurring incomes, providing secure Returns-focused decisions & commercial discipline & predictable cash flows to reinvest or return delivering top quartile return on eq
Slide 40: Summary
For personal use only Summary
Slide 41: AFG's purpose is to provide a fairer financial future for all
AFG’s purpose is to provide a fairer financial future for all Delivered by our competitive 3,800+ quality brokers advantage… For personal use only with strategies Grow our Provide market leading Leverage our distribution to to grow … distribution network technology deliver higher margin Safe digital
Slide 42: Q&A
For personal use only Q&A
Australian Finance Group — Investor Presentation (December 2023) on 6ix