Plenti Group Ltd. · ASX:PLT
Plenti — H1 2022 Earnings Presentation
39 slides from Plenti's earnings presentation, Nov 17, 2021
Slide 1: Plenti 1H22 Results Presentation
Plenti 1H22 Results Presentation 6 months to 30 September 2021 ASX RELEASE Plenti Group Limited (ASX:PLT) Authorised Name for release by the Board of Plenti Group Limited For Titlemore information please contact: Daniel Date Foggo, CEO, shareholders@plenti.com.au Miles Drury, CFO, shareholders@plent
Slide 2: Highlights
Highlights Operational Financial Outlook Performance Results 2
Slide 3: Who we are
Who we are Plenti is a fintech lender. We’re on a mission We are Australia’s largest fintech consumer Purpose lender. To bring our customers’ big ideas to life We are differentiated by our proprietary technology platform and technology capabilities. Vision We’re taking market share in three lending
Slide 4: Our growth
Our growth We have a long track record of achieving strong growth, which has now accelerated. Loan originations by half-year ($m) Loan portfolio ($m) 500 1,000 450 900 400 800 59% 3 year CAGR 64% 3 year CAGR 350 183% pcp growth 700 110% pcp growth 300 600 250 500 200 400 150 300 100 200 50 100 0 0 F
Slide 5: Our H1 highlights
Our H1 highlights We delivered an exceptional half-year. Originations Loan portfolio Revenue Cash NPAT $473m $915m $37m $(2.2m) +183% pcp +110% pcp +43% pcp 56% improve on prior half 90+ arrears Launched Inaugural $306m auto Net cash position 26 bps commercial auto loan in May, doubling our loan ABS
Slide 6: Our priorities achieved
Our priorities achieved Our strong H1 performance has allowed us to achieve financial priorities ahead of target. Financial objectives announced May 20211 Status November 2021 Growth • Reach $1bn loan book by March • $1bn loan book achieved 12 November 2022 Profitability • Achieve positive monthly C
Slide 7: Our ambition
Our ambition We’ve set an ambition to achieve a $5bn loan portfolio in calendar 2025. Loan portfolio ($bn) 5 How? Deepen presence in existing lending 4 verticals Extend technology leadership 3 A $5bn loan Build brand & portfolio awareness represents ~4.6% Large commercial market share1 partner agree
Slide 8: Operational Performance
Who We Are Operational Financial Outlook Performance Results 8
Slide 9: Automotive – H1 performance
Automotive – H1 performance We achieved exceptional growth in our prime automotive lending. H1 highlights Auto lending by half ($m) • Strong loan origination growth, including through lockdown periods 300 218% pcp – Driven by market share gains with specialist auto brokers growth • Commercial auto l
Slide 10: Automotive – opportunities
Automotive – opportunities Our continued automotive growth is supported by exciting initiatives underway, as well as ongoing structural changes and our technology advantages. Why Plenti? Growth drivers in place “Plenti being one of our primary lenders across our extensive • Strategic entry into the
Slide 11: Strategic EV market entry
Strategic EV market entry We’ve strategically launched into the EV finance market, where we’re well-placed to build a leading presence. Why Plenti? • Our technology-led, digital first business model fits manufacturer move to sell EVs sales model • We have expertise in both auto and home renewable en
Slide 12: Renewable finance – H1 performance
Renewable finance – H1 performance Our renewable energy growth accelerated through our introduction of BNPL finance. H1 highlights Renewable finance lending by half • Strong merchant uptake of our BNPL finance offering, which was ($m) launched at start of calendar 2021 70 – BNPL now represents ~60%
Slide 13: Renewable finance – opportunities
Renewable finance – opportunities We’re implementing partnerships that will help Australian households save money and reduce their carbon footprint, whilst growing our presence in renewables. Why Plenti? Growth drivers underway “In an ever-changing environment, Plenti’s technology-led • Continued me
Slide 14: Personal lending – H1 performance
Personal lending – H1 performance We delivered strong H1 loan originations despite the impact of lockdowns on demand. H1 highlights Personal lending by half ($m) • Strong loan origination growth, including through lockdown periods 250 – 7% growth in Q1 and again in Q2, despite lockdowns in NSW havin
Slide 15: Personal lending – opportunities
Personal lending – opportunities We continued to drive a consumer-led shift to superior digital offerings. Why Plenti? Growth drivers underway • Return of traditional loan purposes which have been impacted during lockdowns (e.g. travel, medical, weddings, etc.) • Continued enhancement of customer cr
Slide 16: Brand development
Brand development Our high impact “Destroy your dreams. Make them real” campaign is underway. Campaign highlights • Committed to building our brand and expanding our direct- to-consumer presence • Edgy, punchy, fun campaign launched in November across digital media – Emphasises our purpose, which is
Slide 17: Proprietary technology
Proprietary technology Our technology underpins our competitive advantages and helps explain our superior growth and operational leverage. Proprietary technology with a difference Selected H1 highlights • Build of custom EV offerings for i) broker and direct channels, and ii) manufacturers • Deploym
Slide 18: Credit performance
Credit performance We maintain a low-risk, prime loan portfolio, with market leading levels of arrears. Average credit score on loan portfolio 90+ days arrears 850 1.20% 1.00% 800 Wisr (0.87%, Sept) 0.80% Latitude (0.82%, June) 750 0.60% 700 Harmoney (0.47%, Sept) Indicative big four1 0.40% Plenti (
Slide 19: Financial Results
Who We Are Operational Financial Outlook Performance Results 19
Slide 20: Financial highlights
Financial highlights We delivered strong results 1H22 across growth, profit drivers and balance sheet efficiency. 183% origination growth driving 92% increase in average portfolio on pcp Loan portfolio as loan amortisation slowed Growth Revenue Revenue up 43% on pcp to $37.2m, interest revenue up 53
Slide 21: Originations and loan portfolio
Originations and loan portfolio Accelerating originations and slowing amortisation drove strong growth in our loan portfolio. Origination growth 183% 3.8% Amortisation rate (/mth) (172) 915 88% 4.0% 473 33% 4.8% (124) 615 303 (113) 435 167 381 Loan portfolio 1H21 1H21 1H21 Loan portfolio 2H21 2H21 2
Slide 22: Margins
Margins Our NIM post credit losses expanded as a result of a material decline in funding costs and low credit losses. NIM post credit losses (%) • NIM post credit-losses increased to 5.2% in the period • Key driver of improvement was 1.2% reduction in 5.2 funding rate due to growing share of securit
Slide 23: Operating leverage
Operating leverage Our cost ratios improved materially due to strong origination growth. Operating cost1/income ratio (%) Operating cost1/originations ratio (%) Employees/$1m originations • Cost / income reduced >10% from • Cost / originations continues to • Significant growth in originations 2H21 d
Slide 24: P&L summary
P&L summary Our Cash NPAT improved by 58% from 2H21 to 1H22. ($m, 6 months ending 30 Sept, • Comparison of current period to 1H22 vs 1H22 vs 1H21 impacted by COVID – costs pro forma1) 1H21 2H21 1H22 1H21 2H21 not comparable Interest revenue 23.9 26.8 36.6 53% 37% • 2H21 vs 1H22 provides more Other i
Slide 25: Balance sheet and cash flow
Balance sheet and cash flow Our cash balance remained flat despite loan portfolio growth of ~$300m as a result of improved efficiency of securitised funding structures. • Corporate cash remained flat between March and September Key balance sheet items despite significant growth in the loan portfolio
Slide 26: “Run-rate” analysis
“Run-rate” analysis Exploring our steady state loan portfolio based on past origination levels can help provide perspective to how our loan portfolio grows and financials evolve. Steady-state loan portfolio based on Sept originations $2.1 billion Annualised origination run-rate $1.15 billion Septemb
Slide 27: Outlook
Who We Are Operational Financial Outlook Performance Results 27
Slide 28: Our financial priorities
Our financial priorities We have set clear financial priorities. March 2022 / 2H22 Growth • Loan portfolio at 31 March 2021 > $1.25bn Profitability • 2H22 Cash NPAT > $1.0m Efficiency • 2H22 cost-to-income ratio <50% (in progress towards medium-term target of < 35%) Additionally, we have set an ambi
Slide 29: Plenti Appendices
Plenti Appendices
Slide 30: Our customer experience
Our customer experience With more 5 star reviews than any other consumer lender, we are recognised for providing outstanding customer experiences – ease, simplicity, speed, value – driving trust and adoption. Outstanding value personal Outstanding value car loan Expert’s choice personal Gold award –
Slide 31: Cash flow
Cash flow • Overall group operating cash outflow of $4.3m ($m) 1H21 1H22 compared with inflow of $2.2m in 1H21 Operating cash flow • Two key underlying drivers of the variance were Interest income received 24.2 42.8 – $1.5m Government R&D rebate received in 1H21 and not 1H22 (now received as future
Slide 32: Balance sheet
Balance sheet • Total cash position at half-year end of $98.4m includes ($m) 31-Mar-21 30-Sep-21 $29.3m of corporate cash Assets • Provision Fund cash of $14.3m available to cover credit Cash and cash equivalents 87.9 98.4 losses on the Retail Lending Platform • Cash held on trust primarily relates
Slide 33: Key metrics
Key metrics ($m) 1H20 2H20 1H21 2H21 1H22 Loan originations ($m) 125.2 161.3 167.0 303.3 472.8 Average term of new originations (months) 53.7 55.9 62.5 61.8 64.8 Closing loan portfolio ($m) 306.0 380.9 435.1 614.6 915.1 Average loan portfolio ($m) 274.9 346.8 393.5 511.0 754.8 Average borrowings ($m
Slide 34: Lending vertical metrics
Lending vertical metrics ($m) 1H20 2H20 1H21 2H21 1H22 Loan originations 125.2 161.3 167.0 303.3 472.8 Automotive 19.2 38.4 81.1 149.7 257.7 Renewable energy 19.4 23.6 28.5 46.3 28.7 Personal 86.6 99.3 57.5 168.8 125.0 Closing loan portfolio 306.0 380.9 435.1 614.6 915.1 Automotive 55.7 83.4 146.0 4
Slide 35: NPAT to Cash NPAT reconciliation
NPAT to Cash NPAT reconciliation ($m) 1H21 2H21 1H22 NPAT (pro forma) (3.4) (8.5) (7.5) Add: movement in provision for expected losses 1.0 2.2 3.6 Add: share-based payments 0.6 0.9 1.2 Add: depreciation & amortisation 0.4 0.4 0.5 Cash NPAT (pro forma) (1.5) (5.1) (2.2) 35
Slide 36: Cost analysis – transaction costs
Cost analysis – transaction costs • Transaction costs primarily relate to recognition of upfront broker commission payments, treated under the effective interest rate method • Transaction costs have historically been about 0.5% of the value of the average loan portfolio for a period • From 1H21 thes
Slide 37: Cost analysis – operating costs
Cost analysis – operating costs • Sales and marketing costs are primarily sales and marketing team costs and digital marketing spend relating to loan originations in direct lending channels. These costs reduced materially in 1H21 as spend was constrained due to COVID and increased in 2H21 / 1H22 as
Slide 38: 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, 17 November 2021. The information in this
Slide 39: Plenti
Plenti Faster, fairer loans