Plenti Group Ltd. · ASX:PLT
Plenti — H1 2023 Earnings Presentation
32 slides from Plenti's earnings presentation, Nov 16, 2022
Slide 1: 1H23 Results Presentation
ASX RELEASE Plenti Group Limited (ASX:PLT) Authorised for release by the Board of Plenti Group Limited For more information please contact: Daniel Foggo, CEO, shareholders@plenti.com.au Miles Drury, CFO, shareholders@plenti.com.au 1H23 Results Presentation Six months to 30 September 2022
Slide 2: Who are we?
Who are we? Plenti is a technology-led lender We are on a mission • We are Australia’s largest fintech Purpose consumer lender. To bring our customers’ big ideas to life • We are Cash NPAT profitable. • We deliver market leading customer Vision experiences via our proprietary technology Fairer, fast
Slide 3: Our differentiated performance
Our differentiated performance Our competitive strengths helped us deliver a differentiated performance whilst raising the bar for lending in Australia Diversified loan offerings and Strong loan portfolio growth customer reach Deep and diversified funding Cash NPAT profitability Loan yields re-price
Slide 4: 1H23 highlights
1H23 highlights Our continued portfolio growth and the cost benefits of scale drove our positive Cash NPAT result, despite a period of compressed NIMs Highlights Originations Loan portfolio Revenue Pro forma Cash NPAT $558m $1.5bn $64m $1.4m +18% pcp +69% pcp +71% pcp $3.6m improve on pcp 90+ arrear
Slide 5: Our growth
Our growth We have a track record for Loan portfolio ($m) continually driving loan portfolio 1,548 growth 1,500 69% growth on pcp 1,300 1,250 Total portfolio growth pcp 69% 1,000 915 750 Cumulative lending since launch 615 >$3bn 500 435 250 0 1H21 2H21 1H22 2H22 1H23 5
Slide 6: Our operational leverage and profitability
Our operational leverage and profitability We have continued to grow our revenue more rapidly than our cost base Cost-to-income (%) Operational leverage • Track record for growing revenue at a higher 70 rate than cost base, driving: – Significant reduction in cost-to-income ratio 60 – Cash NPAT prof
Slide 7: Our growing customer base
Our growing customer base We have continued to rapidly grow our high quality customer base, including our over 26,000 retail investors Borrowers with loan outstanding Total customers – all time The Plenti borrower 75 150 • Average loan balance ~$17,800 48% growth 38% growth • 66% homeowners on pcp 1
Slide 8: Our funding differentiation
Our funding differentiation We have uniquely diverse funding options, all supported by our strong credit performance Warehouse funding Retail investor platform • Three warehouses supported by Big Four banks • $340mheadroom1 • Strong credit performance supports on-going • 5 high quality mezzanine fin
Slide 9: Our technology differentiation – overview
Our technology differentiation – overview Venus, our full featured, end-to-end technology platform underpins our growth and is our key competitive advantage One platform drives it all Great customer/partner Loan application experiences experiences Referrer sales portal Partner API integrations Secur
Slide 10: Our technology differentiation – 1H23 advancements
Our technology differentiation – 1H23 advancements Our technology advancements allow us to continually raise the bar for all lending businesses in Australia Referrer portal enhancements Smart loan application features Increased decisioning automation 1. Growth 1. Growth 1. Growth 2. Efficiency 2. Ef
Slide 11: Our prime credit focus
Our prime credit focus We continued to demonstrate outstanding credit performance and further shifted our portfolio towards secured loans Annualised net loss rate over time Average borrower credit score1 90+ days arrears2 3.0% 900 1.0% Supported by shift towards secured 2.5% automotive lending 0.8%
Slide 12: Our automotive finance
Our automotive finance We achieved exceptional growth in our prime automotive lending 1H23 highlights Automotive loan book ($m) Automotive lending opportunity • Grew commercial automotive originations to $35bn+ 1,000 $60.5m, up 65% on preceding half, as made available to more referral partners annua
Slide 13: Our renewable finance
Our renewable finance We accelerated our renewable finance growth and entered a significant strategic partnership 1H23 highlights Renewable energy loan book ($m) Renewable energy opportunity • Executed successful launch of bundled energy 389k 175 (supply, solar, storage, finance) partnership with AG
Slide 14: Our personal lending
Our personal lending We continued to increase our market share in the fragmented personal loan market 1H23 highlights Personal loan book ($m) Personal lending market opportunity • Delivered strong broker channel performance, $12bn+ 500 reflecting strength of relationships, and speed and ease of offe
Slide 15: Financial results
Plenti Financial results
Slide 16: Our financial highlights
Our financial highlights Our continued portfolio growth and the cost benefits of scale drove our positive Cash NPAT result, despite a period of compressed NIMs Loan portfolio • 89% increase in average portfolio on pcp to $1.43bn Growth Revenue • 71% revenue growth to $63.8m Cash NPAT • Cash NPAT of
Slide 17: Our margins
Our margins We increased borrower rates in the period to restore margins, with exit margins in line with the portfolio average Effective yield (%) Commentary • Net interest margin (NIM) in 1H23 was 5.3%, with average effective yield of 8.9% and funding cost of 3.5% – Down on 2H22 NIM of 6.0%, primar
Slide 18: Our operating leverage demonstrated
Our operating leverage demonstrated We continued to demonstrate operating leverage as our loan portfolio scaled 1H21 2H21 1H22 2H22 1H23 Operating cost leverage Cost / loan book growth1 0.36x 036x 0.47x 0.25x 0.35x • Since the start of FY21, average half-yearly operating cost increase has been 0.36x
Slide 19: Our profit & loss
Our profit & loss We increased our profitability year-on-year by $3.6m to $1.4m • Plenti continued to deliver Cash NPAT profits despite market funding rate $m 1H22 1H23 Change headwind – increased Cash NPAT by $3.6m on pcp to $1.4m Interest revenue 36.6 63.2 72% • Key drivers of this result were: Ot
Slide 20: Our funding
Our funding We have continued to expand our funding capacity and we remain well placed to fund further loan book growth Loan portfolio funding ($m)1 1H23 loan portfolio and corporate funding • Continued to establish Plenti as regular issuer in debt capital markets – $437m Auto ABS completed June 202
Slide 21: Our ambition
Plenti Our ambition
Slide 22: Our FY23 ambitions
Our FY23 ambitions We have set our objectives for the second half of FY23 2H23 objectives Growth • Reach loan portfolio of ~$1.75 billion at 31 March 2023 (~35% annual growth) Profitability • Drive robust Cash NPAT growth in 2H23 Efficiency • Achieve cost-to-income target of <35% in 2H23 22
Slide 23: Our scale cost-benefit ambition
Our scale cost-benefit ambition Our ambition is to achieve a $25m cost benefit as we double our loan portfolio to $3bn Estimated cost base as loan portfolio doubles ($m) Cost benefits of scale • Technology-led model allows loan portfolio growth to exceed cost base growth • $25m+ cost benefit ambitio
Slide 24: Annexures
Plenti Annexures
Slide 25: Cash flow
Cash flow Our operating cashflow for 1H23 was $6.6m • Total statutory cash flow from operating activities in the period was $6.6m $m 1H22 1H23 (1H22: outflow of $4.3m) Operating cash flow • Cash inflow from operating activities excluding the Provision Fund was $5.2m (1H22: outflow of $6.7m) Interest
Slide 26: Balance sheet
Balance sheet Net assets increased to $74.4m driven by material loan hedging derivative gains in the period • Corporate cash position at 30 September 2022 of $30.5m $m 31 Mar 22 30 Sept 22 – $11.7m relates to loan collection accounts which are not available for Assets corporate activities (31 March
Slide 27: Half-on-half summary P&L
Half-on-half summary P&L 2H22 / 1H23 / $m, 6 month periods, pro forma1 1H21 2H21 1H22 2H22 1H23 1H22 / 2H21 1H22 2H22 Interest revenue 23.9 26.8 36.6 50.6 63.2 37% 38% 25% Other income 2.1 0.4 0.6 0.6 0.6 65% 10% (7)% Total revenue pre transaction costs 26.0 27.2 37.2 51.3 63.8 37% 38% 24% Transacti
Slide 28: Key metrics
Key metrics $m 1H20 2H20 1H21 2H21 1H22 2H22 1H23 FY20 FY21 FY22 Loan originations ($m) 125.2 161.3 167.0 303.3 472.8 629.5 558.2 286.5 470.3 1,102.3 Average term of new originations (months) 53.7 55.9 62.5 61.8 64.8 65.0 64.6 52.7 62.1 64.9 Closing loan portfolio ($m) 306.0 380.9 435.1 614.6 915.1
Slide 29: Lending vertical metrics
Lending vertical metrics $m 1H20 2H20 1H21 2H21 1H22 2H22 1H23 FY20 FY21 FY22 Loan originations 125.2 161.3 167.0 303.3 472.8 629.5 558.2 286.5 470.3 1,102.3 Automotive 19.2 38.4 81.1 149.7 257.7 381.6 302.3 57.6 230.8 639.3 Renewable energy 19.4 23.6 28.5 28.7 46.3 51.9 52.6 43.0 57.2 98.3 Personal
Slide 30: NPAT to Cash NPAT reconciliation
NPAT to Cash NPAT reconciliation $m 1H21 2H21 1H22 2H22 1H23 FY21 FY22 NPAT (pro forma) (3.4) (8.5) (7.5) 1.2 2.6 (11.9) (6.3) Add: movement in provision for expected losses 1.0 2.2 3.6 3.8 4.2 3.1 7.4 Add: share-based payments 0.6 0.9 1.2 1.6 1.4 1.4 2.8 Add: depreciation & amortisation 0.4 0.4 0.5
Slide 31: Plenti
Plenti
Slide 32: Disclaimer and important notices
Disclaimer and important notices No recommendation, offer, invitation or advice The material in this presentation is general background information about Plenti Group Limited (the Company) and its subsidiaries, and is current at the date of the presentation,16 November 2022 The information in this p