International Personal Finance Plc · LSE:IPF
International Personal Finance — H1 2023 Earnings Presentation
29 slides from International Personal Finance's earnings presentation, Aug 1, 2023
Slide 1: IPF plc 2023 half-year results
IPF plc 2023 half-year results Gerard Ryan – CEO Gary Thompson – CFO Tuesday 1 August 2023 Building a better world through financial inclusion
Slide 2: Business and strategic update
IPF plc 2023 half-year results Business and strategic update Gerard Ryan, CEO Building a better world through financial inclusion
Slide 3: Strong financial results
STRONG FINANCIAL RESULTS Profit before tax up 12% to £37.8m and15% increase in interim dividend £37.8m £33.8m • PBT ahead of plan as a result of strong operational performance 12% • Pre-exceptional RORE of 14.7%, building to target level • Robust funding position and balance sheet to fund future H1-
Slide 4: Excellent operational execution capturing growth opportunities
EXCELLENT OPERATIONAL EXECUTION CAPTURING GROWTH OPPORTUNITIES Helping more people access affordable credit 10%* • Successfully meeting strong consumer demand Closing net receivables £893m • Double-digit net receivables growth in all three divisions • Retained tighter lending criteria to avoid over-
Slide 5: Effectively executing our strategy
EFFECTIVELY EXECUTING OUR STRATEGY Delivering for our existing customers and making our offer attractive for the next generation Expand product range, channels and territories ✓ Diversifying product range ✓ Enhanced channels ✓ Delivering more value for customers Enhancing customer experience Smart e
Slide 6: Exciting new proposition in Poland
EXCITING NEW PROPOSITION IN POLAND Customers and customer representatives responding well to new credit card Credit cards 53,000 * issued • Phased rollout – national coverage now in place Average credit £717m • Huge logistical and training strategy fully executed card balance £500 • Customers adapti
Slide 7: Expanding geographic footprint and products in Mexico
EXPANDING GEOGRAPHIC FOOTPRINT AND PRODUCTS IN MEXICO Significant growth potential Expanding home credit coverage Mobile wallet Tijuana 2022 Tampico 2023 Building a better world through financial inclusion 7
Slide 8: ESG – a strong social purpose
ESG – A STRONG SOCIAL PURPOSE Striving to have a positive impact on all our stakeholders • Global ‘Invisibles’ programme launched in Hungary, Romania and the Baltics • 2,000 colleagues took part in our 6th Volunteer and Financial Inclusion month • Global People Survey demonstrated high level of coll
Slide 9: Financial performance
IPF plc 2023 half-year results Financial performance Gary Thompson, CFO Building a better world through financial inclusion
Slide 10: Target financial model
TARGET FINANCIAL MODEL Rigorous financial discipline delivering sustainable earnings and returns RORE • All investment decisions based on delivering 20%+ RORE * 15%-20% • Our financial model is supported by rigorous focus on: - Revenue yield - Impairment rate - Cost-income ratio Maintains Target Sup
Slide 11: Lending growth
LENDING GROWTH Strong demand supported 15% growth in Group customer lending, excluding Poland £579m £288m £318m • European home credit: £513m - Good growth against weak Q1-22 5%* 6%* - Strong growth in Hungary (+26%), Czech Republic (+19%) and Romania (+17%) - Expected contraction of 13% in Poland d
Slide 12: Receivables growth
RECEIVABLES GROWTH All three divisions delivered strong growth whilst maintaining tight credit standards £893m £505m • European home credit: £770m £441m - Strong growth in Hungary (+26%), Romania 10%* 9%* (+23%) with 9% growth in Czech Republic - Expected contraction of 4% in Poland due to transitio
Slide 13: KPIs
KPIs Excellent progress against all KPIs Annualised revenue yield Annualised impairment rate Annualised cost-income ratio 60% 54.2% 25% 70% 56% 55% Target range 20% 65% 53% 57.4% 16% 60% 50% 15% Target range 14% 55% 10% Target range 54% 11.4% 50% 52% 45% 5% 45% 0% 40% 40% H1-19 FY-19 H1-20 FY-20 H1-
Slide 14: Earnings and dividends
EARNINGS AND DIVIDENDS Growing earnings and progressive dividends Profit before tax Pre-exceptional earnings per share (EPS) Dividend per share 12% 12% 15% £56.1m £43.3m1 14.8p £37.8m £33.8m 4.6p 10.3p1 9.1p 10.2p 2.7p 3.1p 2.2p (£53.3m) (24.7p) - H1-19 H1-20 H1-21 H1-22 H1-23 H1-19 H1-20 H1-21 H1-2
Slide 15: Returns
RETURNS Rebuilding towards Group target returns of 15% - 20% Group European home credit 35% 20% 30% Target range 15% 14.7% 25% 21.0% 10% 20% 15% Target range 5% 10% 0% 5% -5% 0% -10% -5% -15% -10% -20% -15% FY-19 H1-20 FY-20 H1-21 FY-21 H1-22 FY-22 H1-23 FY-19 H1-20 FY-20 H1-21 FY-21 H1-22 FY-22 H1-
Slide 16: Funding and capital
FUNDING AND CAPITAL Robust funding and capital position Bonds • Successfully extended £39m of facilities in H1-23: Total debt facilities £413m - £32m bank facilities - £7m retail bonds held in treasury • Average period to maturity of funding of 2.1 years £609m Banks • Funding capacity and strong cas
Slide 17: Funding costs
FUNDING COSTS Rising base rates have increased cost of funding Market Base rate • Blended cost of funding of 14.0% (H1-22:12.2%) UK 5.0% • Significant rise in interest rates across all markets Eurozone 4.0% • Hedging policy swaps sterling / euro borrowings into Hungary 13.0% local currency when onwa
Slide 18: Revised target KPIs
REVISED TARGET KPIs Upgraded KPI ranges to deliver target returns Group key metrics Previous target range New target range H1-23 Revenue yield 53% - 56% 56% - 58% 54.2% Impairment rate 14% - 16% 14% - 16% 11.4% Cost-income ratio 52% - 54% 49% - 51% 57.4% • Previous KPI targets set 12 months ago • Re
Slide 19: Summary and outlook
IPF plc 2023 half-year results Summary and outlook Gerard Ryan, CEO Building a better world through financial inclusion
Slide 20: Summary and outlook
SUMMARY AND OUTLOOK • Good growth and excellent operational execution delivering strong financial results ahead of plan • Significant long-term demand for affordable credit • Confidence in growth strategy with key focus on: - Transitioning Poland to new product proposition - Expanding in Mexico to m
Slide 21: Appendices
IPF plc 2023 half-year results Building a better world through financial inclusion Appendices Building a better world through financial inclusion
Slide 22: Group H1 2023 £m
GROUP Change at H1 2023 H1 2022 Change Change CER £m £m £m % % Customer numbers (000s) 1,718 1,718 - - - Customer lending 578.8 513.3 65.5 12.8 4.8 Average gross receivables 1,343.2 1,170.6 172.6 14.7 9.9 Closing net receivables 893.1 769.9 123.2 16.0 9.7 Revenue 380.0 297.4 82.6 27.8 17.6 Impairmen
Slide 23: European home credit H1 2023 £m
EUROPEAN HOME CREDIT Change at H1 2023 H1 2022 Change Change CER £m £m £m % % Customer numbers (000s) 785 786 (1) (0.1) (0.1) Customer lending 318.3 288.1 30.2 10.5 5.6 Average gross receivables 792.5 722.0 70.5 9.8 9.0 Closing net receivables 505.4 441.4 64.0 14.5 9.3 Revenue 192.2 148.8 43.4 29.2
Slide 24: Mexico home credit H1 2023 £m
MEXICO HOME CREDIT Change at H1 2023 H1 2022 Change Change CER £m £m £m % % Customer numbers (000s) 700 676 24 3.6 3.6 Customer lending 142.9 116.4 26.5 22.8 4.5 Average gross receivables 274.8 201.2 73.6 36.6 15.8 Closing net receivables 176.1 140.8 35.3 25.1 9.7 Revenue 125.4 93.1 32.3 34.7 14.8 I
Slide 25: IPF Digital H1 2023 £m
IPF DIGITAL Change at H1 2023 H1 2022 Change Change CER £m £m £m % % Customer numbers (000s) 233 256 (23) (9.0) (9.0) Customer lending 117.6 108.8 8.8 8.1 2.8 Average gross receivables 275.9 247.4 28.5 11.5 6.9 Closing net receivables 211.6 187.7 23.9 12.7 11.0 Revenue 62.4 55.5 6.9 12.4 6.7 Impairm
Slide 26: Strong financial profile
STRONG FINANCIAL PROFILE H1 2023 H1 2022 Receivables (£m) 893.1 769.9 Equity (£m) 462.9 403.8 Equity to receivables 51.8% 52.4% Gearing 1.2 times 1.3 times Interest cover 2.2 times 2.4 times Pre-exceptional EPS 10.2p 9.1p Pre-exceptional ROE 11.3% 10.4% Pre-exceptional RORE 14.7% 12.3% Building a be
Slide 27: Balance sheet H1 2023 £m
BALANCE SHEET H1 2023 H1 2022 Change at CER £m £m % Goodwill 23.4 23.4 - Fixed assets 64.2 60.3 2.6 Receivables 893.1 769.9 9.7 Cash 28.2 43.7 (38.0) Borrowings (523.0) (507.6) 1.3 Other net (liabilities) / assets (23.0) 14.1 (220.4) Equity 462.9 403.8 6.6 At HY-22, borrowings is stated net of defer
Slide 28: Exchange rates
EXCHANGE RATES Closing rates June Average Closing rates Average 2023 H1 2023 June 2022 H1 2022 Polish zloty 5.2 5.3 5.4 5.5 Czech crown 27.5 27.1 28.7 29.1 Euro 1.2 1.1 1.2 1.2 Hungarian forint 430.0 433.2 464.9 443.6 Romanian leu 5.8 5.7 5.8 5.9 Mexican peso 21.8 22.2 24.8 26.2 Australian dollar 1.
Slide 29: Contacts
CONTACTS Equity IR contact Rachel Moran Investor Relations Telephone: +44 (0)7760 167637 Email: rachel.moran@ipfin.co.uk Debt funding IR contact Krzysztof Adamski Group Treasurer Telephone: +48 600400394 Email: krzysztof.adamski@ipfdigital.com Building a better world through financial inclusion
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