Contact Financial Holding Sae · EGX:CNFN
Contact Financial Holding Sae — Contact Financial Holding — H1 2023 Earnings Presentation
46 slides from Contact Financial Holding Sae's earnings presentation, 2023
Slide 1: Results Presentation 1H-2023
Results Presentation 1H-2023
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 9 3 Digital Platforms 22 4 Debt Capital Markets 27 5 Africa Expansion 30 6 1H-2023 Performance Review 32 7 Appendix 43
Slide 4: Introduction
ion Introduct ~
Slide 5: Important note regarding updates to group financial reporting
Introduction Important note regarding updates to group financial reporting Starting with the FY 2021 financial statements, the Group has changed the structure and constituents of its financial reporting, with changes affecting primarily the Consolidated Income Statement and segmental reporting in th
Slide 6: 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 E
Slide 7: Results Snapshot
Introduction Results Snapshot Contact continued building on a strong start to the year, recording impressive financial and operational results for the second quarter of 2023 Total New Lending| EGP mn Total Operating Income| EGP mn Normalized Net Income1| EGP mn +45% +57% +48% 3,792 544 206 2,609 368
Slide 8: Results Snapshot
Introduction Results Snapshot Building on a strong start to the year, Contact achieved solid financial and operational growth for the six-month period ended 30 June 2023. EGP 1,091.7 mn EGP 384.4 mn 25.3% Consolidated Total Operating Income Consolidated Normalized Net Income Annualized Return on Ave
Slide 9: Our Edge
Our Edge
Slide 10: 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 11: 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 offe
Slide 12: What We Do
Our Edge – What We Do What We Do Contact is the largest non-bank financial services provider in Egypt and for the past two decades has been actively changing the way businesses and individuals access financial and insurance services. Financing 86% Insurance 14% Financing products targeting Egypt’s b
Slide 13: 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 2023 4% 2% 3% 1% 6% 7% 8% 10% 2% 4% 55% 75% 24%
Slide 14: 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 15: 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 the first half of 2023 Zamalek Shar
Slide 16: 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) 16
Slide 17: 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 A
Slide 18: 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 ConsumerCredit ConsumerCredit LT
Slide 19: Diversified, Highly Liquid Funding Base
Our Edge – Diversified Funding Base Diversified, Highly Liquid Funding Base Funding Strategy Overview Overview of 1H-2023 Funding Base Amounts in EGP MN Utilized Available Diversified funding base enabling consistent liquidity with efficient pricing A B C D 21,877 3,908 Fixed rate to match portfolio
Slide 20: 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 Space 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, Contac
Slide 21: Consistent Growth and Profitability
Our Edge – Historical Performance Consistent Growth and Profitability Throughout the years, Contact has delivered consistent growth and attractive profitability leveraging its increasingly broad reach and service offering, and a growing digital presence to weather challenging market conditions and o
Slide 22: Digital Platforms
Digital Platforms -
Slide 23: A Digital Business
Digital Platforms A Digital Business Contact is leading the financing and insurance sectors’ digitization movement, strengthening its digital capabilities and offering through strategic investments and partnerships. Increase Create new Maintain market Contact’s Improve Retain customer customer reven
Slide 24: 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 Classifieds for retail played a crucial role in our focus on platform growth in 1H-2023. Due to the present state of
Slide 25: 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 Origin
Slide 26: Digital Platforms – Wasla
Digital Platforms – Wasla Digital Platforms – Wasla In February 2022, the Company concluded a USD 9 million investment in e-commerce super-app Wasla, adding to Contact’s growing footprint in fintech and reinforcing its quest to enable tech-first ventures in Egypt’s financing ecosystem. Wasla at a gl
Slide 27: Debt Capital Markets
Debt Capital Markets
Slide 28: Overview of the Debt Capital Markets
Debt Capital Markets Overview of the Debt Capital Markets 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 39 • Introducing new products to the market: D
Slide 29: 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 2023 2022 Issued despite Issued despite Issued despite Issued despite ongoi
Slide 30: Africa Expansion
Africa Expansion
Slide 31: 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, the newly launched joint venture between Contact and Mansour
Slide 32: 1H-2023 Performance Review
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Slide 33: Comprehensive Financing Offering
1H-2023 Performance Review Comprehensive Financing Offering Contact offers a full range of financing products targeting Egypt’s banked and unbanked population in both the retail and commercial spaces. Passenger Commercial Contact Mortgage Medical Working Cars Vehicles Shopping Capital Contact Auto o
Slide 34: Financing Division – Widespread Growth Across Financing Segments
1H-2023 Performance Review Financing Division – Widespread Growth Across Financing Segments Total new financing extended in 1H-2023 rose 55% year-on-year to reach EGP 7.9 billion, mainly driven by Contact’s passenger cars and shopping segments. Contact also witnessed new lending growth at its commer
Slide 35: Financing Division – Increasingly Diversified Portfolio with Favorable Margins
1H-2023 Performance Review Financing Division – Increasingly Diversified Portfolio with Favorable Margins The Financing portfolio recorded EGP 18.13 billion, up by 46% year-on-year as at June 2023. Throughout the year, Contact continued to diversify its portfolio in favor of higher-spread products t
Slide 36: Financing Division – Sustained Growth Across all Financing Revenue Components
1H-2023 Performance Review Financing Division – Sustained Growth Across all Financing Revenue Components The financing division continued leveraging an increasingly diversified product offering and expanded direct-to-consumer reach to deliver solid growth in 1H-2023, despite ongoing challenges impac
Slide 37: Financing Division – High-Quality Portfolio, Low Delinquencies
1H-2023 Performance Review Financing Division – High-Quality Portfolio as Evident in Low Delinquencies with Sufficient Coverage1 Contact’s PaR 150+ delinquencies (Portfolio at Risk) ratio as at June 2023 stood at 3.2%. 150+ Days Portfolio at Risk and Coverage Ratio Percentage 3.1% 3.2% 2.5% 2.5% 2.3
Slide 38: Financing Division – Strong Profitability Supported by Controlled Costs
1H-2023 Performance Review Financing Division – Strong Profitability Supported by Controlled Costs and Low Risk Profile The Financing Division saw its net income increase 21% year-on-year in 1H-2023 following a strong operational performance during the six-month period. Operating Costs and Cost to I
Slide 39: Insurance Division – Operational and Business Developments – 1H-2023
1H-2023 Performance Review Insurance Division – Operational and Business Developments – 1H-2023 Gross written premiums continue to witness robust year-on-year growth across both companies on the back of new product launches and increased cross-selling. Total policies underwritten in 1H-2023 stood at
Slide 40: Insurance Division – Performance Review
1H-2023 Performance Review Insurance Division – Performance Review Insurance Operating Income | EGP mn Underwriting Income | EGP mn 48% +52% 195 On a consolidated basis, 155 Underwriting income rose by a insurance operating income 97 136 89 strong 52% year-on-year to was up by an impressive 48% 105
Slide 41: Consolidated Performance – Income Statement
1H-2023 Performance Review Consolidated Performance – Income Statement Broad-based growth across both segments continued to support a solid performance at the consolidated level. Consolidated Operating Expenses | EGP mn Total Operating Income| EGP mn Consolidated Return on Equity | % Cost-to-Income
Slide 42: Consolidated Performance – Income Statement
1H-2023 Performance Review Consolidated Performance – Income Statement Consolidated normalized net income after minorities rose 26% year-on-year to record EGP 384 million in 1H-2023. EBT | EGP mn Normalized Net Income1| EGP mn 747 +21% 609 662 +26% 501 527 392 462 384 381 304 FY-2020 FY-2021 FY-2022
Slide 43: Appendix
Appendix
Slide 44: Financing Business Income Statement
Appendix Financing Business Income Statement change (FY-2021 vs FY- change (1H-2022 vs 1H- FY-2021 FY-2022 1H-2022 1H-2023 2022) 2023) Revenue from Portfolio Transfer 486,813 767,104 58% 349,493 564,851 62% Off Balance Sheet Portfolio Management Fee 156,799 199,248 27% 105,810 147,781 40% Securitiza
Slide 45: Insurance Business Income Statement
Appendix Insurance Business Income Statement change (FY-2021 vs FY- change (1H-2022 vs 1H- FY-2021 FY-2022 1H-2022 1H-2023 2022) 2023) Gross Written Premiums 516,835 948,316 83% 504,334 832,375 65% Provisions of Unearned Premiums (44,152) (105,734) 139% (99,840) (164,338) 65% Outward Reinsurance Pre
Slide 46: Consolidated Income Statement
Appendix Consolidated Income Statement Financing Business FY-2021 FY-2022 change (FY-2021 vs FY-2022) 1H-2022 1H-2023 change (1H-2022 vs 1H-2023) Revenue from Portfolio Transfer 486,813 767,104 58% 349,493 564,851 62% Off Balance Sheet Portfolio Management Fee 156,799 199,248 27% 105,810 147,781 40%
Contact Financial Holding — H1 2023 Earnings Presentation on 6ix