Contact Financial Holding Sae · EGX:CNFN
Contact Financial Holding Sae — Contact Financial Holding — H1 2024 Earnings Presentation
45 slides from Contact Financial Holding Sae's earnings presentation, 2024
Slide 1: Results Presentation 1H-2024
Results Presentation 1H-2024
Slide 2: Disclaimer
Introduction Disclaimer This presentation has been prepared by Contact Financial Holding (the “Company”. The distribution of this presentation in certain jurisdictions may be restricted by law and persons into whose possession this presentation comes should inform themselves about, and observe, any
Slide 3: Agenda
AGENDA 1 Introduction 4 2 Our Edge 7 3 Digital Platforms 20 4 Debt Capital Markets 25 5 Africa Expansion 28 6 1H-2024 Performance Review 30 7 Appendix 42
Slide 4: Introduction
ion Introduct ~
Slide 5: At a Glance
Introduction At a Glance Egypt’s leading non-bank financial services provider Group Structure 1st EGX Consumer Finance License in Egypt with +20yrs and Largest Consumer Finance Player in the Listed Since 2018 Under the Ticker CNFN.CA Market Offering Innovative Financial Services Financial Holding EG
Slide 6: Results Snapshot
Introduction Results Snapshot Current market conditions – including the elevated interest rate environment – has impacted new issuance and contributed to the management’s decision to slow down portfolio transfer activities, which has historically generated a substantial proportion of the company’s r
Slide 7: Our Edge
Our Edge
Slide 8: How We Differentiate Ourselves
Our Edge How We Differentiate Ourselves Highly experienced management Highly team Targets the profitable banked & operation unbanked population Contact has a clear vision for the business with a well- Superior Widest product defined growth strategy to funding capabilities offering in the market achi
Slide 9: Well-Defined Growth Strategy
Our Edge – Well-Defined Growth Strategy Well-Defined Growth Strategy Contact has a clear vision for the business with a well-defined growth strategy to achieve it Contact Today A B C D E The widest product Fully digitized proprietary Strong physical & digital Superior funding Highly profitable offer
Slide 10: What We Do
Our Edge – What We Do What We Do Contact is Egypt’s largest non-bank financial services provider and has been actively changing the way businesses and individuals access financial and insurance services over the past twenty years. Financing 74% Insurance 26% Financing products targeting Egypt’s bank
Slide 11: Diversified and Synergistic Product Base Driving Growth Across All Segments
Our Edge – Diversified Product Base Diversified and Synergistic Product Base Driving Growth Across All Segments Broad & Increasingly Diversified Consumer Finance Offering New Lending Breakdown by Product for 2019 New Lending Breakdown by Product for 1H-2024 4% 2% 3% 2% 6% 10% 8% 2% 4% 14% 53% 75% 17
Slide 12: Proprietary AI Instant Credit Scoring Engine
Our Edge – Exceptional Credit Scoring Engine Proprietary AI Instant Credit Scoring Engine Unique Credit Assessment Approach through Creditech Distinctive credit assessment methodology refined over +20 years of financing experience Loan disbursed or application Credit application submitted Data asses
Slide 13: Market-wide Coverage Including Banked and Unbanked Population
Our Edge – Wide Market Coverage Market-wide Coverage Including Banked and Unbanked Population Powered by Physical Presence … Expanding the branch network in high-potential areas outside the main cities Wide Geographical Footprint took place throughout 2021, 2022, and 2023 Zamalek Sharm El Sheikh Tah
Slide 14: And A Diversified Digital Distribution Network
Our Edge – Wide Market Coverage … And A Diversified Digital Distribution Network Direct to Consumer Distribution (DTC) Lending as a Service (LaaS) 14
Slide 15: A Digital One-Stop-Shop for all Financial Needs
Our Edge – A Digital One-Stop-Shop A Digital One-Stop-Shop for all Financial Needs Relaunched in January 2023, the ContactNow app is Egypt’s first fully-fledged app offering the full suite of digital financial solutions A Digital One-Stop-Shop Covering the Consumer’s Financial Lifecycle Strategic Ad
Slide 16: 20 Years of Strong Track Record of Credit Extension & Collection
Our Edge – Solid Track Record 20 Years of Strong Track Record of Credit Extension & Collection Track Record of Growth and Operational Evolution LaaS Successful product deployment on the back of market know-how Insurance Insurance Credit Credit Specialized Specialized Consumer Credit Consumer Credit
Slide 17: Diversified, Highly Liquid Funding Base
Our Edge – Diversified Funding Base Diversified, Highly Liquid Funding Base Funding Strategy Overview Overview of 1H-2024 Funding Base Amounts in EGP MN Utilized Available Diversified funding base enabling 28,471 consistent liquidity with efficient pricing A B C D E 8,990 Fixed rate to match portfol
Slide 18: Funding Driven by Continued Innovation in the DCM Space
Our Edge – An Innovator in the DCM Space Funding Driven by Continued Innovation in the DCM Space1 Overview of Debt Capital Markets Activities DCM Segment Highlights • Originally established to deepen Egypt’s debt capital markets and further enhance the Group’s availability and cost of funding, Conta
Slide 19: Consistent Growth and Expansion
Our Edge – Historical Performance Consistent Growth and Expansion Through its growing digital presence, as well as its increasingly broad reach and service offering, Contact is able to overcome the difficult market conditions and a challenging macroeconomic environment to continue outperforming risi
Slide 20: Digital Platforms
Digital Platforms -
Slide 21: A Digital Business
Digital Platforms A Digital Business Through strategic investments and partnerships, Contact is continuously strengthening its digital capabilities, placing it at the forefront of the financing and insurance sectors’ digitization movement Increase Create new Maintain market Contact’s Improve Retain
Slide 22: Digital Platforms – Contactcars.com
Digital Platforms – Contact Cars Digital Platforms – Contactcars.com The portal, originally set up in 2002, was relaunched in 2021 as a stand-alone business ContactCars.com Relaunched In 1H-2024, the average number of paid dealer subscriptions increased by 82% y-o- y, and organic traffic (the most s
Slide 23: Digital Platforms – ContactNow
Digital Platforms – ContactNow Digital Platforms – ContactNow The Company rolled out its ContactNow app in early 2021 (relaunched in 2023) with the platform rapidly rising in popularity ever since The ContactNow app ContactNow has secured several partnerships alongside major New Bill Payment Origina
Slide 24: Digital Platforms – Wasla
Digital Platforms – Wasla Digital Platforms – Wasla Wasla In February 2022 Contact concluded a USD 9 million investment in e-commerce super-app, further expanding the Company’s growing footprint in fintech and reinforcing its quest to enable tech-first ventures in Egypt’s financing ecosystem Wasla a
Slide 25: Debt Capital Markets
Debt Capital Markets
Slide 26: Overview of the Debt Capital Markets
Debt Capital Markets Overview of the Debt Capital Markets1 Overview of Debt Capital Markets Activities DCM Segment Highlights • Originally established to deepen Egypt’s debt capital markets and further enhance the Group’s availability and cost of funding 42 • Introducing new products to the market:
Slide 27: Overview of the Debt Capital Markets
Debt Capital Markets Overview of the Debt Capital Markets Egypt’s Leading DCM Player with a Proven Record of Executing Transactions in Challenging Market Conditions, Safeguarding the Group’s Liquidity Requirements 2022 2023 2024 2022 Issued despite Issued despite Issued despite Issued despite ongoin
Slide 28: Africa Expansion
Africa Expansion
Slide 29: The Perfect Opportunity for Further Expansion
Africa Expansion The Perfect Opportunity for Further Expansion Expanding into Kenya and other emerging African markets presents a great opportunity for Contact to replicate its domestic success in markets with similar demographics. Almasi, a joint venture between Contact and Mansour Group, will init
Slide 30: 1H-2024 Performance Review
® tS) c .e) iS = fe) = cd) a. zr N (>) “ a5 - > a > iD) o
Slide 31: Comprehensive Financing Offering
1H-2024 Performance Review Comprehensive Financing Offering New lending during the six-month period was impacted by a restrictive interest rate environment coupled with product price uncertainty Passenger Commercial Contact Mortgage Medical Working Cars Vehicles Shopping Capital Contact Auto offers
Slide 32: Financing Division – Resilient Results Across Financing Segments
1H-2024 Performance Review Financing Division – Resilient Results Across Financing Segments In 1H-2024, total new financing extended was EGP 4.8 billion, a 40% year-on-year drop, with the Consumer Finance and Auto segments experiencing the largest year-on-year declines during the period. The divisio
Slide 33: Financing Division – Increasingly Diversified Portfolio with Favorable Margins
1H-2024 Performance Review Financing Division – Increasingly Diversified Portfolio with Favorable Margins Contact’s financing portfolio reached EGP 20.36 billion in 1H-2024, a 12% year-on-year increase. Throughout the year, Contact continued to diversify its portfolio with an increased focus on high
Slide 34: Financing Division – Resilient Results Across all Financing Revenue Components
1H-2024 Performance Review Financing Division – Resilient Results Across all Financing Revenue Components The Financing Division’s 1H-2024 results were heavily affected by an elevated interest rate environment as well as the prevalent price uncertainty, which negatively impacted customers’ purchasin
Slide 35: Financing Division – High-Quality Portfolio as Evident by the Low Delinquency Ratio
1H-2024 Performance Review Financing Division – High-Quality Portfolio as Evident by the Low Delinquency Ratio Contact’s PaR 150+ delinquencies (Portfolio at Risk) ratio as at June 2024 stood at 3.6% 150+ Days Portfolio at Risk 3.6% 3.2% 3.2% 2.5% 2.3% FY-2021 FY-2022 FY-2023 1H-2023 1H-2024 Contact
Slide 36: Financing Division – Declining Profitability amidst a Difficult Operating Environment
1H-2024 Performance Review Financing Division – Declining Profitability amidst a Difficult Operating Environment The Financing Division’s net income dropped by 62% year-on-year in 1H-2024 following the company’s decision to slow down portfolio transfer activities given the prevailing interest rate e
Slide 37: Insurance Division – Operational and Business Developments – 1H-2024
1H-2024 Performance Review Insurance Division – Operational and Business Developments – 1H-2024 Gross written premiums generated by both insurance companies continued to report strong year-on-year growth on the back of new product launches and increased cross-selling, while total policies underwritt
Slide 38: Insurance Division – Performance Review
1H-2024 Performance Review Insurance Division – Performance Review Underwriting Income | EGP mn Insurance Operating Income | EGP mn +38% 349 +69% 150 On a consolidated basis, 123 Underwriting income expanded 261 insurance operating income 97 by 38% year-on-year to EGP 89 195 reached EGP 261 million
Slide 39: Consolidated Performance – Income Statement
1H-2024 Performance Review Consolidated Performance – Income Statement The Financing Division’s weak performance overshadowed the Insurance Division’s positive results, and weighed on the Group’s consolidated results for the six-month period Consolidated Operating Expenses | EGP mn Total Operating I
Slide 40: Consolidated Performance – Income Statement
1H-2024 Performance Review Consolidated Performance – Income Statement Consolidated normalized net income after minorities shrank by 44% year-on-year to EGP 216 million in 1H-2024 Normalized Net Income1| EGP mn Consolidated Return on Equity | % Adjustments Actual Net Income 693 27.2% 1 25.3% 609 -44
Slide 41: Consolidated Performance – Income Statement
2Q-2024 Performance Review Consolidated Performance – Income Statement The gradual improvement in market condition witnessed in 2Q-2024 reflected on the Group’s quarterly results, with consolidated performance improving strongly quarter-on-quarter Total Operating Income| EGP mn Consolidated Operatin
Slide 42: Appendix
Appendix
Slide 43: Financing Business Income Statement
Appendix Financing Business Income Statement FY-2022 FY-2023 change (FY-2022 vs FY-2023) 1H-2023 1H-2024 change (1H-2023 vs 1H-2024) Revenue from Portfolio Transfer 767,104 1,005,772 31% 564,851 273,754 -52% Off Balance Sheet Portfolio Management Fee 199,248 326,241 64% 147,781 183,370 24% Securitiz
Slide 44: Insurance Business Income Statement
Appendix Insurance Business Income Statement FY-2022 FY-2023 change (FY-2022 vs FY-2023) 1H-2023 1H-2024 change (1H-2023 vs 1H-2024) Gross Written Premiums 948,316 1,491,843 57% 832,375 1,216,007 46% Provisions of Unearned Premiums (105,734) (194,195) 84% (164,338) (151,256) -8% Outward Reinsurance
Slide 45: Consolidated Income Statement
Appendix Consolidated Income Statement Financing Business FY-2022 FY-2023 change (FY-2022 vs FY-2023) 1H-2023 1H-2024 change (1H-2023 vs 1H-2024) Revenue from Portfolio Transfer 767,104 1,005,772 31% 564,851 273,754 -52% Off Balance Sheet Portfolio Management Fee 199,248 326,241 64% 147,781 183,370
Contact Financial Holding — H1 2024 Earnings Presentation on 6ix