Latitude Group Holdings Ltd. · ASX:LFS

Latitude — Investor Presentation (February 2023)

45 slides from Latitude's investor presentation, Feb 17, 2023

  1. Slide 1: Latitude Group Holdings Limited

    Latitude Group Holdings Limited ACN 604 747 391

  2. Slide 2: Investor Presentation FY22

    Investor Presentation FY22 2

  3. Slide 3: Investor Presentation FY22

    • • • Investor Presentation FY22 3

  4. Slide 4: Ahmed Fahour, Managing Director & CEO

    r te = Ahmed Fahour Managing Director & CEO co, 3 73

  5. Slide 5: Investor Presentation FY22

    Investor Presentation FY22 5

  6. Slide 6: 2H22 / FY22 Result Highlights

    rt te Lees! 2H22/ FY22 Result Highlights .. a 75

  7. Slide 7: Investor Presentation FY22

    ✓ ❖ ✓ • ❖ • ❖ ✓ ✓ Repayment rate (ex cards/ BNPL) HH savings ratio (rhs) • • 140% 25% • 120% 20% ‐ ✓ 100% 15% • 80% 10% ✓ • 60% 5% ✓ 40% 0% ✓ Source: Company Data, ABS (5206) Investor Presentation FY22 (1) See appendix for reconciliation between statutory NPAT and cash NPAT Refer also appendix slide

  8. Slide 8: Gross loan receivables, volume and RAI/AGR

    Volume ($m) Gross loan receivables ($m) +3% +14% +0.5% 4,240 6,474 6,349 6,257 6,474 +2% 3,640 3,695 3,713 1H21 2H21 1H22 2H22 1H21 2H21 1H22 2H22 Pay A&NZ Money A&NZ Total GLR Pay A&NZ Money A&NZ Total Volume 10.1% 9.0% RAI/AGR % FY21 FY22 Cash Opex ($m) 10.2% 10.0% 192 9.5% 174 174 157 8.5% 1H21 2

  9. Slide 9: Volume Money A&NZ and Pay A&NZ

    Volume ($m) Money A&NZ • 869 886 814 770 790 727 • 530 528 • 1H19 2H19 1H20 2H20 1H21 2H21 1H22 2H22 • Volume ($m) Pay A&NZ 3,707 • 3,489 3,340 2,922 3,052 2,913 2,924 2,910 1H19 2H19 1H20 2H20 1H21 2H21 1H22 2H22 Investor Presentation FY22 9

  10. Slide 10: Investor Presentation FY22

    ❖ ✓ • • ❖ ✓ ❖ ❖ Investor Presentation FY22 (1) Design and Distribution Obligations (DDO) 10

  11. Slide 11: Interest yield and cost of funds

    • Interest yield Cost of funds • • • • Pre-COVID COVID Normalisation • Rec'bles ~$7.5bn Rec'bles ~$6.4bn Rec'bles ~$++bn • Source: Company Data, Iress Investor Presentation FY22 11

  12. Slide 12: AU PL Volumes

    • • • • • • AU PL Volumes ($m) • 4% 61% 96% • 39% Q1 FY22 Q4 FY22 PL Fixed Loan PL Variable Loan Investor Presentation FY22 12

  13. Slide 13: Investor Presentation FY22

    • • • Investor Presentation FY22 13

  14. Slide 14: DPS (cents) 100% franked

    DPS (cents) • • • FY22 7.85 4.00 100% franked 100% franked FY21 7.85 7.85 0% franked 100% franked 1H 2H Investor Presentation FY22 Note: Dividend reinvestment plan (DRP) to be offered with the 2H22 dividend 14

  15. Slide 15: Investor Presentation FY22

    Investor Presentation FY22 15

  16. Slide 16: Investor Presentation FY22

    • • • Investor Presentation FY22 Note: RBA also increased its cash rate by a further 25bps on 7 February 2023, outside the reporting period 16

  17. Slide 17: Paul Varro, Chief Financial Officer

    ‘ee Paul Varro 1 Chief Financial Officer Lé “6

  18. Slide 18: Cash NPAT, TER and RAI/AGR

    Cash NPAT ($m) Volume ($m) RAI / AGR (%) TER (%) 200 7,335 7,953 ↑8% 154 2H 95 2H 3,695 4,240 ↑15% 61 8.7% 8.5% 10.1% 9.0% 1H 105 93 1H 3,640 3,713 ↑2% FY21 FY22 FY21 FY22 FY21 FY22 FY21 FY22 NCO 2.33% 2.35% RoAGR 3.1% 2.4% RoE 14.3% 10.1% Statutory NPAT ($m) Gross loan receivables ($m) Cash Opex ($

  19. Slide 19: Volume and gross loan receivables

    Volume ($m) 26 (47) 449 191 Scheme: +$592m Gross loan receivables ($m) Cash: +$14m 7,974 7,953 7,953 7,335 7,335 IF: 7,526 ($157m) 6,872 6,522 6,474 6,474 6,349 6,257 FY21 Money ANZ Pay ANZ Other FX FY22 2H22 vs 3,695 125 446 13 (39) 4,240 2H21 Repayment rate (ex CC&BNPL) 1H20 2H20 1H21 2H21 1H22 2H

  20. Slide 20: Operating Income

    Operating Income ($m) Rate impact: $41m • (4) 4 (48) 3 Pay A&NZ: +11 Pay A&NZ: (36) • 387 383 Money A&NZ: (5) 383 Money A&NZ: (10) Other: +1 339 Other: (2)m 339 342 Mix: (3) Mix: (0)m ― 2H21 AGR Interest Income Interest Expense Other Op Income 2H22 vs 1H22 370 3 8 (40) 1 ― Operating Income (%) 0.13%

  21. Slide 21: Operating income yield: reprice impacts lagging CoF increases

    Operating income yield: reprice impacts lagging CoF increases 15.82% 15.15% 15.19% 14.65% 14.60% 14.87% •  12.71% 12.14% 10.83% •  • 2.66% 2.44% 2.48% 2.51% 2.77% 4.05% 1H20 2H20 1 1H21 1 2H21 1H22 2H22 •  Investor Presentation FY22 21 (1) 1H20 and 2H20 is in line with Pro Forma numbers presented

  22. Slide 22: 30+ DPD and 90+ DPD

    27% 27% 31% 32% 34% 33% 33% 34% 3.83% 3.37% 3.28% 37% 37% 38% 2.66% 2.54% 38% 37% 37% 37% 36% 2.37% 2.32% 2.12% 30% 30% 27% 25% 24% 24% 24% 24% 6% 6% 4% 4% 5% 6% 5% 6% 1H19 2H19 1H20 2H20 1H21 2H21 1H22 2H22 CR4 CR3 CR2 CR1 1H19 2H19 1H20 2H20 1H21 2H21 1H22 2H22 30+ DPD (%) 4.38% 4.03% 3.78% 4.19%

  23. Slide 23: RAI ($m) and RAI (%)

    RAI ($m) Rate impact: $48m • (3) 4 (48) 3 (6) 320 316 316 272 272 268 268 •  2H21 AGR Interest Income Interest Expense Other Op Income Net charge offs 2H22 • ― RAI (%) 0.13% (1.53%) ― 0.09% (0.21%) ― NIM (141)bps 10.02% 10.02% 8.61% 8.61% 8.50% 8.50% Yield: +21bps Int Exp: (153)bps ― Mix: (9)bps •

  24. Slide 24: Cash operating expenses

    • (19) (9) (6) 4 (3) Incl one-off STI $12m •  Lower FTE’s $7m Incl one-off facilities $5m Run rate saving of $5m 192 172 163 157 157 157 157 •  •  2H21 Employee Marketing Occupancy IT Other 2H22 vs 1H22 174 (5) (4) (7) 3 (5) 157 • CTI 49.6% 46.1% FTE 1,282 1,008 % of AGR 6.0% 5.0% Investor Presen

  25. Slide 25: Investor Presentation FY22

    • • • • • • 44.9% 44.4% 10.6% 2023 2024 2025 (1) Represents Gross loan receivables less loan provisions for impairments, deferred income and customer acquisition costs Investor Presentation FY22 25

  26. Slide 26: Who we are

    37 7 Who we are 4 i=

  27. Slide 27: Company history and ownership

    Range of White label Latitude is Separation from GE Establishment of Launch of Acquisition of IPO Acquisitions of International AGC founded acquisitions capabilities acquired from as a standalone standalone Latitude Genoapay & launch of Symple & OctiFi expansion begins by GE established GE business

  28. Slide 28: Investor Presentation FY22

    Investor Presentation FY22 28

  29. Slide 29: Investor Presentation FY22

    ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ Investor Presentation FY22 29

  30. Slide 30: Investor Presentation FY22

    ❖ ❖ ❖ ❖ Investor Presentation FY22 30

  31. Slide 31: Investor Presentation FY22

    ° Internal Latitude company information. Investor Presentation FY22 (1) FY22 profit before tax and notable items 31 (2) Proportion of group gross loan receivables as at 31 December 2022 (3) Up to $10,000 for new growth segments

  32. Slide 32: Latitude Customer Base and New Originations FY22

    Latitude Customer Base New Originations FY22 1% 10% 5% 6% 10% 18% 19% 16% 15% 18% 60% 15% 24% 25% 33% 24% 18-27 28-37 38-47 48-57 58-67 68+ <=1 year 1-3 years 3-5 years 5+ years 3% 5% 4% 7% 48% 35% - with mortgage 12% 52% 17% - no mortgage 69% Full-time Part-time Self-employed Casual Contractors Oth

  33. Slide 33: Appendix

    1 3! Appendix 4 i

  34. Slide 34: Investor Presentation FY22

    Investor Presentation FY22 34

  35. Slide 35: Summary profit & loss statement (cont. ops)

    Summary profit & loss statement (cont. ops) Investor Presentation FY22 35

  36. Slide 36: Investor Presentation FY22

    Investor Presentation FY22 36

  37. Slide 37: Investor Presentation FY22

    Investor Presentation FY22 37

  38. Slide 38: Notable Items – FY22 v FY21

    Notable Items – FY22 v FY21 19.7 0.4 13.1 29.2 $6m ICBS/Genesis $5m Originations $4m Tech resilience Simplified $4m Other operating structure 0.7 5.5 133.7 133.7 $19m Symple $9m Humm 114.4 101.2 78.2 77.5 72.0 72.0 FY21 Notable Items Amortisation of Amortisation of Corporate Restructuring Costs Fixe

  39. Slide 39: Actual AU cash rate

    4.5% • 4.0% AU 3-yr swap rate 3.5% 1H23 ave cash rate 3.18% • 3.0% AU 1-mth bill 2.5% • 2H22 ave cash rate 2.14% 2.0% 1.5% • 1.0% 0.5% Actual AU 1H22 ave cash rate 0.24% cash rate 0.0% Dec-21 Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 • Source:

  40. Slide 40: Repayment rate and household deposits

    $m MoM chg HH deps (rhs) Repay't rate Pre C19 ave LT ave C19 ave 130% 36000 120% 29333 110% 22667 100% 16000 90% 9333 80% 2667 70% -4000 Jan-16 Sep-16 May-17 Jan-18 Sep-18 May-19 Jan-20 Sep-20 May-21 Jan-22 Sep-22 Source: Company data, APRA Investor Presentation FY22 40

  41. Slide 41: Macro scenarios and covenant tests

    • Base Severe downside 0 1 2 3 • GDP growth % 3.4% (11.0%) (2.0%) 7.5% Unemployment % 3.5% 10.0% 10.0% 8.0% • Real cash interest rate % (3.4%) (0.2%) (0.4%) (1.0%) House price change YoY % 24% (6.5%) (9.0%) (1.0%) ― ― Rapid amortisation trigger breaches (securitisation trusts): - net yield No No No

  42. Slide 42: Investor Presentation FY22

    Source: Company data, RBA, ABS Investor Presentation FY22 42

  43. Slide 43: Delinquencies (30+ days past due) by product

    Delinquencies (30+ days past due) by product, Australia Delinquencies (30+ days past due) by product, New Zealand % Accounts 30+ days past due % Accounts 30+ days past due 9% 9% 8% 8% 7% 7% 6% 6% 5% 5% 4% 4% 3% 3% 2% 2% 1% 1% 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2

  44. Slide 44: Better Giving

    BETTER GIVING Since Aug 2017 we have collectively donated $908,070 to our charity partners via LGD workplace é giving. Jumped to #15 on Australia’s Best Workplace to Give Back list COMMUNITY PARTNERSHIPS Durty Duffy Books in Home (NZ) Celebrated 20 years of partnership with Ardoch to improve educati

  45. Slide 45: Thank you

    [C3 LATITUDE Thank you Investor Relations Matthew Wilson +61 401 454 621 Media Mark Gardy +6] 412 376 817

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