Credit Corp Group Limited · ASX:CCP
Credit — H1 2009 Earnings Presentation
16 slides from Credit's earnings presentation, Feb 17, 2009
Slide 1: H109 Results Presentation
For personal use only H109 Results Presentation Thomas Beregi Chief Executive Officer Todd Vogel Chief Financial Officer
Slide 2: EBITDA growth of 14% on significantly reduced purchasing
EBITDA growth of 14% on significantly reduced purchasing For personal use only H109 Financials FY09 versus pcp H109 Actual August 08 Guidance PDL acquisitions down 78% to $13 3m $13.3m $45-55m $45 55m Revenue up 8% to $78.5m EBITDA up 14% to $49 5m $49.5m $85-89m $85 89m NPAT up 2% to $6.2m $8-10m E
Slide 3: Strong financial position
Strong financial position For personal use only • $46m turnaround in free cash flow from H108 • Gearing at lowest level since 2005 (2) Six months ended $ million 31 Dec 08 30 June 08 31 Dec 07 EBITDA 49 5 49.5 0(1) 44.0 44 43 8 43.8 Operating cash flow 41.1 39.1(1) 43.8 PDL acquisitions and capex (1
Slide 4: Recent purchases continue to yield acceptable returns
Recent purchases continue to yield acceptable returns… For personal use only Average March 08 to Dec 08 purchases Cumulative percentage of purchase price collected by month FY09 Guide 230% 225%-250% 50% 47% Actual Forecast 39% 44% 40% % of 31% 35% purchase 30% price collected 21% 26% 20% 17% 10% 0%
Slide 5: We have improved the performance of older PDLs
…and we have improved the performance of older PDLs For personal use only PDL Revenue by date of purchase $ $m 40 35 14% 16% 25% 31% 30 38% 37% % 21% 23% 26% > 2 years 25 27% 35% 1-2 1 2 years 20 41% 40% 15 37% < 1 year 63% 10 58% 52% 40% 5 28% 22% 26% 0 Q1 Q2 Q3 Q4 Q1 Q2 FY09 Guide Sep 07 Dec 07 Ma
Slide 6: We continue to focus on the certainty of returns
We continue to focus on the certainty of returns For personal use only Total Portfolio Dec 2008 June 2008 Dec 2007 Face value $2.2bn $2.2bn $1.9bn Number of accounts 319,000 , 370,000 , 388,000 , Payment arrangements Face value $268m $267m $187m Number of accounts 42,000 42,000 28,000 % of PDL colle
Slide 7: Operational improvement initiatives are on track
Operational improvement initiatives are on track For personal use only Debt Purchase Productivity (direct collection staff only) Revenue per hour $250 $239 $234 $231 $227 $227 $225 $214 $209 $204 FY09 Guide $197 $210-$220 $200 $194 $194 $188 $179 $175 $150 Dec Qtr Jan Feb Mar Apr May Jun Jul Aug Sep
Slide 8: Maintaining our focus on our front line people
Maintaining our focus on our front line people For personal use only Headcount by function (FTE) 600 Debt Purchase Operations p 500 Process Serving / Mercantile 400 Malaysian Mercantile 300 Support 200 100 0 FY04 FY05 FY06 FY07 FY08 H109 Function FY04 FY05 FY06 FY07 FY08 H109 FY09 Guide Debt Purchas
Slide 9: Approach to PDL carrying value is unchanged
Approach to PDL carrying value is unchanged For personal use only • PDLs are held at fair value in accordance with AASB139 Discounted cash flow analysis assumptions Input Assumptions and/or basis for assumptions • Maximum of 6 years from the date of acquisition Useful life or term • Aligns with stat
Slide 10: Accelerated impairment of PDLs in the first half
Accelerated impairment of PDLs in the first half For personal use only Drivers of additional impairment: • Above forecast collection revenue • Modest first half purchasing of only $13m H109 FY08 Impairment charge $34.5m $59.6m Percentage of PDL revenue 45% 42% Percentage of average PDL 36% 31% carry
Slide 11: Bank facility secures the ability to commit to purchases in excess of $60m pa
Bank facility secures the ability to commit to purchases in excess of $60m pa For personal use only • Operating well within banking covenants 31 Dec 08 Facility Limits Actual 1 Jan 09 1 Jul 09 1 Oct 09 1 Jan 10 1 Jan 11 30 Jun 11 A Amount t drawn d $99 4 $99.4m $130 $130m $120 $120m $120 $120m $120
Slide 12: Purchasing is set to increase over the second half
Purchasing is set to increase over the second half For personal use only • H1 purchases of $13.3m • Jan & Feb 09 purchases of $10 $10.2m 2m • Currently part of the debt sale programme of 3 of the 4 major banks • Presently in discussion on several purchasing opportunities • Increased purchasing will
Slide 13: Sale of peripheral businesses is on track, but will not be significant
Sale of peripheral businesses is on track, but will not be significant For personal use only • Maximum combined proceeds estimated to be $3.0m • Some businesses mayy be retained if acceptable p terms are not achieved B i Business St t Status Process serving Sold Feb 09 – proceeds $1.4m* M l Malaysia
Slide 14: Continued focus on our FY09 priorities
Continued focus on our FY09 priorities For personal use only • Improved asset management • Additional initiatives to drive productivity • Closer relationships with clients (debt sellers) • Continued focus on generating free cash flow to reduce debt 14
Slide 15: Performance to date suggests an improved full year outlook
Performance to date suggests an improved full year outlook For personal use only Revised Guidance Original Guidance EBITDA $87 - $91m $85 - $89m NPAT $ - $11m $9 $ $ - $10m $8 $ EPS 20 - 25 cents 18 - 23 cents PDL acquisitions $35 - $45m $45 - $55m Excludes business sales & litigation defence costs
Slide 16: Questions
For personal use only H109 Results Presentation Questions