Credit Corp Group Limited · ASX:CCP

Credit — FY2023 Earnings Presentation

23 slides from Credit's earnings presentation, Aug 1, 2023

  1. Slide 1: Thomas Beregi, CEO and Michael Eadie, CFO

    THOMAS BEREGI MICHAEL EADIE CEO CFO

  2. Slide 2: Continued leadership of the credit impaired consumer segment

    CONTINUED LEADERSHIP OF THE CREDIT IMPAIRED CONSUMER SEGMENT … ANALYTICS AND DISCIPLINE OPERATIONAL EXCELLENCE SUSTAINABILITY AND COMPLIANCE TARGET: Australian / NZ debt buying Long term growth  Large database  High asset turnover 1  Low dispute rate ROE 16% - 18%  History of pricing accuracy 

  3. Slide 3: In challenging market conditions

    ... IN CHALLENGING MARKET CONDITIONS … SEGMENT ASSESSMENT OF CONDITIONS CCP RESPONSE Australian / NZ debt buying  Continued low market volumes:  Manage cost base to minimise loss of operating leverage - Interest-bearing credit card balances still ~40 per  Maintain resourcing through redeployment

  4. Slide 4: Has produced solid FY2023 earnings

    … HAS PRODUCED SOLID FY2023 EARNINGS FY2022 FY2023 Var % AU/NZ debt buying $230.2m $224.8m 3 (2%) 3 US debt buying $87.3m $100.8m 4 7% 4 AU/NZ lending $93.7m $147.8m 58% Revenue total $411.2m $473.4m 15% AU/NZ debt buying $55.0m $39.1m 3 (29%) 3 US debt buying $20.6m $17.1m 4 (21%) 4 AU/NZ lending 1

  5. Slide 5: US operational performance recovered over H2

    US OPERATIONAL PERFORMANCE RECOVERED OVER H2 …  Solid recovery in productivity and collections despite increased repayment plan delinquency late in Q4 US Productivity Per Hour (A$) US Collections and Arrangement Book (A$m) $m $ 60 450 400 400 350 50 350 300 40 300 250 250 200 30 200 150 20 150 100

  6. Slide 6: And the consumer lending book was maintained at record levels

    … AND THE CONSUMER LENDING BOOK WAS MAINTAINED AT RECORD LEVELS … Consumer Lending Book and Annualised Revenue $m 400 $361m $358m 350 $331m 300 $251m 250 $200m 200 $160m 150 100 50 0 Dec-21 Jun-22 Dec-22 Mar-23 Jun-23 Gross loan book (excl provisions) Annualised revenue FY2023 Results Presentation –

  7. Slide 7: While arrears and losses remain within pro-forma

    … WHILE ARREARS AND LOSSES REMAIN WITHIN PRO-FORMA  Delinquency has increased Loss Provision to Realised Losses (%)  Losses likely to remain within the pro-forma  Limited origination of longer-duration auto loans 30% 27%  Provision maintained in excess of pro-forma 24% 25% 21% 21% 19% 20% 18% Im

  8. Slide 8: Investment in growth segments

    INVESTMENT IN GROWTH SEGMENTS …  Record consumer lending volume of $351 million PDL Investment and Lending Volumes $m 800 700 600 500 400 300 200 100 0 FY2019 FY2020 FY2021 FY2022 FY2023 Lending volume (gross) US debt buying AU/NZ secondary: Baycorp/Collection House/Radio Rentals/Other AU/NZ debt b

  9. Slide 9: Will underpin strong FY24 earnings growth in these segments

    … WILL UNDERPIN STRONG FY24 EARNINGS GROWTH IN THESE SEGMENTS NPAT and Return on Assets NPAT by Segment $m $m 120 120 14% 100 +4% 100 12% 80 10% 80 8% 60 60 6% 40 40 4% 20 20 2% 0 0% 0 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 Guidance Guidance

  10. Slide 10: Improved US purchasing conditions provided a solid FY24 pipeline

    IMPROVED US PURCHASING CONDITIONS PROVIDED A SOLID FY24 PIPELINE … Investment $m 450 400 350 300 250 FY24 purchasing guidance - $200 200 - $250 million 150 100 FY24 purchasing pipeline of $97 50 million secured at Jul-23 0 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 AU/NZ debt buying US debt buying AU

  11. Slide 11: Borrowing facilities extended to preserve capacity for opportunistic investment

    … WITH BORROWING FACILITIES EXTENDED TO PRESERVE THE CAPACITY FOR OPPORTUNISTIC INVESTMENT  Syndicated corporate banking facility extended to Jun-26 Gearing and Cash Facilities $m 400 32% 350 27% 300 22% 250 17% 200 150 12% 100 7% 50 2% 0 H2 FY2021 H1 FY2022 H2 FY2022 H1 FY2023 H2 FY2023 -3% -50 -1

  12. Slide 12: FY24 Guidance

    OUTLOOK FOR SOLID EARNINGS IN FY24 FY24 GUIDANCE Ledger investment $200 - $250 million Net lending $45 - $55 million NPAT $90 - $100 million EPS (basic) 132 - 147 cents FY2023 Results Presentation – 12

  13. Slide 13: Appendices: Key Operating Metrics

    APPENDICES: KEY OPERATING METRICS FY2023 Results Presentation – 13

  14. Slide 14: Appendices Key Operating Metrics

    APPENDICES KEY OPERATING METRICS Appendix 1: Operating cash flow and gearing 15 Appendix 2: Pricing discipline and accuracy 16 Appendix 3: Collections life cycle 17 Appendix 4: Productivity 18 Appendix 5: Payers base 19 Appendix 6: Operational and total headcount 20 Appendix 7: AU/NZ and US operatio

  15. Slide 15: Operating Cash Flow and Gearing

    APPENDIX 1 OPERATING CASH FLOW AND GEARING OPERATING CASH FLOWS AND GEARING JUN-21 DEC-21 JUN-22 DEC-22 JUN-23 Collections $243.8m $272.8m $264.3m $257.2m $236.6m Other income $55.0m $60.4m $69.6m $80.7m $117.4m Interest expense / income ($2.1m) ($2.1m) ($2.6m) ($6.0m) ($9.6m) Operating expenses inc

  16. Slide 16: Pricing Discipline and Accuracy

    APPENDIX 2 PRICING DISCIPLINE AND ACCURACY Pricing Discipline and Accuracy $m 6,000 5,000 Cumulative collections 4,000 Actual cash 3,000 collections 2,000 1,000 Initial projections 1 0 1. For all PDLs held at June 2008, initial projections represent the forecast at June 2008 FY2023 Results Presentat

  17. Slide 17: Collections Life Cycle

    APPENDIX 3 COLLECTIONS LIFE CYCLE PDL Collections by Vintage $m (8%)1 160 140 120 34% 29% 33% 33% 30% 32% 33% 37% 100 33% 32% 33% 33% 40% 39% 35% 41% 32% 34% 19% 30% 30% 34% 34% 12% 12% 80 30% 31% 18% 13% 14% 19% 15% 20% 15% 15% 15% 13% 13% 14% 16% 16% 18% 16% 14% 17% 60 14% 16% 18% 25% 17% 17% 20%

  18. Slide 18: Productivity

    APPENDIX 4 PRODUCTIVITY Productivity Per Hour (A$) $ 400 350 300 250 FULL YEAR AVERAGE: 200 FY2022: $312 FY2023: $284 150 100 50 0 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 12m to Jun-22 12m to Jun-23 FY2023 Results Presentation – 18

  19. Slide 19: Payers Base

    APPENDIX 5 PAYERS BASE Portfolio Summary: Debt buying AU/NZ COMBINED AU/NZ/US 1 TOTAL PORTFOLIO DEC-20 JUN-21 DEC-21 JUN-22 DEC-22 JUN-23 Face value $8.6b $8.5b $7.9b $11.8b $12.7b $12.8b Number of accounts 1,392,000 1,326,000 1,252,000 2,863,000 2,993,000 2,952,000 PAYMENT ARRANGEMENTS Face value $

  20. Slide 20: Operational and Total Headcount

    APPENDIX 6 OPERATIONAL AND TOTAL HEADCOUNT Period End Headcount (FTE) 3,000 JUN-22 DEC-22 JUN-23 2,500 Debt buying operations 1,296 1,401 1,255 2,000 Collection services 229 558 1 571 1 1,500 Lending 162 243 231 1,000 Support 153 217 1 204 1 Total 1,840 2,419 2,261 500 Support % 8% 9% 9% 0 Jun-22 De

  21. Slide 21: AU/NZ and US Debt Buying Operational Metrics

    APPENDIX 7 AU/NZ AND US DEBT BUYING OPERATIONAL METRICS AU/NZ DEBT BUYING FY2023 ∆ FY2022 Collections $304m (18%) Productivity $308 per hour (2%) Operations headcount 2 697 (12%) Payers book 2 $1,336m (7%) US DEBT BUYING FY2023 ∆ FY2022 Collections 1 $189m 7% Productivity 1 $248 per hour (32%) Opera

  22. Slide 22: Leading Approach to Responsible Practices

    APPENDIX 8 LEADING APPROACH TO RESPONSIBLE PRACTICES H1 FY2023 AU EDR rate 1 12 months to Mar-23 US dispute rate 2  Continued industry leadership Credit Corp Credit Corp – Lowest EDR rate in AU 1 and low US dispute rate 2 Other debt Publicly traded debt buyer A buyers – Highest rating from Publicly

  23. Slide 23: For more information, please contact

    FOR MORE INFORMATION, PLEASE CONTACT: THOMAS BEREGI MICHAEL EADIE Chief Executive Officer Chief Financial Officer Tel +61 2 8651 5777 Tel: +61 2 8651 5542 tberegi@creditcorp.com.au meadie@creditcorp.com.au

Credit Corp Group — FY2023 Earnings Presentation on 6ix