Latitude Group Holdings Ltd. · ASX:LFS
Latitude — Investor Presentation (August 2021)
30 slides from Latitude's investor presentation, Aug 23, 2021
Slide 1: Latitude 1H21 Results
Latitude 1H21 Results 23 August 2021 Latitude Group Holdings Limited ACN 604 747 391
Slide 2: Important notice and disclaimers
Important notice and disclaimers Important notice and disclaimer The following important notice and disclaimer applies to this presentation (“Presentation”) and you are therefore advised to read this carefully before reading or making any other use of this Presentation or any information contained i
Slide 3: Important notice and disclaimers (cont'd)
Important notice and disclaimers (cont’d) Information and liability To the maximum extent permitted by law, LFS and its respective affiliates and related bodies corporate and each of their respective directors, officers, partners, employees, agents and advisers (together, the “Beneficiaries”) exclud
Slide 4: Table of contents
Table of contents 1H21 key highlights 05 Business performance 09 2H21 outlook and growth initiatives 14 Financial update 18 Outlook 26 Appendices 28 Investor Presentation 1H21 4
Slide 5: 1H21 key highlights
OL | 1121 key highlights e [U2 Latitube
Slide 6: Executive summary: strong volume growth and positive strategic developments despite COVID-19 challenges
Executive summary: strong volume growth and positive strategic developments despite continuing COVID-19 affected industry challenges What went well: Challenges: • Total volume up 5.4% vs PCP, • Continued lockdowns in Australia excluding international and travel it is impacting international and trav
Slide 7: Latitude delivers strong first half 2021 profit at the top end of guidance
Latitude delivers strong first half 2021 profit at the top end of guidance with strong volume momentum Cash NPAT ($m) 1H21 highlights: ↑+81% Cash EPS(1) • 1H21 Cash NPAT at the top end DPS (cents) of 1H21 guidance 121 (cents) • Strong progress on strategic initiatives 67 7.85 12.1 • Positive volume
Slide 8: Solid 1H21 operational performance in mixed conditions
Solid 1H21 operational performance in mixed conditions Strong volume recovery with group volumes up 5.4%, Improved cost efficiency whilst maintaining investments excluding international and travel volume is up 10.9% Volume ($m) Management Opex ($m) 3,452 3,640 10 AU – ↑+2% (22) 1,398 ↑+9%(1) 1,531 (
Slide 9: Business performance
02 | Business performance [{ LaTITUDE
Slide 10: Home economy spending continues to drive Instalments performance
Home economy spending continues to drive Instalments performance Delivery on volume growth initiatives Other 1H21 highlights • Successfully returned underwriting settings and restarted • BNPL customer base continued to grow during 1H21 up Unwinding COVID-19 actions ✓ marketing and sponsorships inclu
Slide 11: Volumes returning to 2019 levels, except international and travel
Volumes returning to 2019 levels, except international and travel Group volume run-rate nearing 2019 levels, excluding international & travel related volume 800 Group volume (A$m) Instalments • Volumes up 3% (vs PCP) on strong growth in New 600 Zealand and continued demand in Australia in home segme
Slide 12: Personal and Auto volume growth is up 37% vs PCP
Personal and Auto volume growth is up 37% vs PCP Delivery on volume growth initiatives Other 1H21 highlights • Continued enhancement of broker portal to simplify the • Personal Loans performed strongly in both Increasing activation ✓ • Personal Loans have again topped The Adviser’s 2021 quote and ap
Slide 13: Repayment levels remain elevated
Repayment levels remain elevated Repayment rates remained elevated throughout Repayment % (2)(3) 1H21 due to elevated levels of household 140% deposits, government support and access to superannuation withdrawals 130% 120% Repayments experienced across the portfolio in 110% both Australia and New Ze
Slide 14: 2H21 outlook and growth initiatives
03 2H21 outlook and growth initiatives
Slide 15: Latitude is differentiated by its platform model across Instalments and Lending
Latitude is differentiated by its platform model across Instalments and Lending A leader in consumer finance disrupting payments and traditional lenders Shop small, pay weekly Shop big, pay monthly Shop anywhere, pay flexibly INSTALMENTS BNPL BIG TICKET GO & GEM Disrupting consumer LatitudePay growi
Slide 16: Future growth opportunities
Future growth opportunities 12 month focus Long term 12 months+ Variable rate and new South East Asia Expanded industry product constructs international expansion growth opportunities Launch new products Major Payments Institution Complement international (redraw/LoC, variable products) in License a
Slide 17: BNPL Big Ticket opportunity
BNPL Big Ticket opportunity Latitude Pay+ LatitudePay+ highlights: • A single provider that enables Pay over 6-24 months a wider buying audience Low friction customer experience • Point of difference in the industry with Consumer benefits: Key merchant benefits: BNPL (6-24 months available) • Up to
Slide 18: Financial update
04 | Financial update [UE LaTITUDE
Slide 19: 1H21 Financial highlights
1H21 Financial highlights Statutory NPAT Cash NPAT ROE 1H21 highlights: • Strong Cash NPAT and 90 volume momentum 121 18.2% 19.1% • AGR below 1H20 driving (21) 67 lower Operating Income, but similar to 2H20: 1H20 1H21 1H20 1H21 FY20 1H21 – Volume growth offset by elevated RAI yield CTI TER (1) repay
Slide 20: 1H21 Cash NPAT up 81% on PCP
1H21 Cash NPAT up 81% on PCP Operating Income Management Opex Loan Impairment Pre-Provision PBT Cash NPAT 198 Mvmt in Loss Prov 58 NCO 10 70 140 501 208 195 186 87 82 153 151 158 157 434 426 121 (77) (12) 67 1H20 2H20 1H21 1H20 2H20 1H21 1H20 2H20 1H21 1H20 2H20 1H21 1H20 2H20 1H21 Operating Income
Slide 21: Lower 1H21 Operating Income largely driven by lower receivables from FY20
Lower 1H21 Operating Income largely driven by lower receivables from FY20 5% Volume growth in 1H21 v PCP AGR stabilised in 1H21 after reducing 12% in 2H20 v 1H20 (12) 52 (474) (206) (61) (74) (31) 97 (36) 9 21 (28) 1 (33) 83 3,640 3,640 7,372 3,599 6,898 3,502 6,692 6,631 6,557 6,526 6,526 6,490 6,4
Slide 22: 1H21 Operating Expenses down 10.5% on PCP
1H21 Operating Expenses down 10.5% on PCP Management Opex ($m) • 10.5% reduction in 10 operating expenses (22) in 1H21 compared to PCP (9) driven by: 208 208 195 186 186 • Reduced employee expense due to operating 1H20 Marketing Op Model Changes & Other 1H21 Productivity model changes and simplifica
Slide 23: 1H21 Asset quality strengthens
1H21 Asset quality strengthens Credit quality of new customer originations continues to improve with 72% of customers rated CR1-2(1) Improved net charge off ratios … 27% 28% 27% 27% 31% 32% 34% 3.83% 3.37% 3.28% 2.66% 2.54% 36% 36% 37% 37% 38% 38% 37% 30% 30% 30% 30% 27% 25% 23% 7% 6% 6% 6% 4% 4% 5%
Slide 24: Investment & significant items
Investment & significant items 1H21 1H21 1H21 ($m) Opex Capex (1) Total Investment-related expense Technology Investment and Simplification 6.9 18.7 25.5 BNPL – Big Ticket 1.8 6.4 8.3 International 1.3 – 1.3 Total Investment-related Significant items 10.0 25.1 35.1 Other Significant items Restructur
Slide 25: Diverse, cost-effective funding underpinned by prudent capital management
Diverse, cost-effective funding underpinned by prudent capital management 50+ Prudent capital management Diverse Funding Platform Cost Effective Investors approach • Settled refinancing of its $1,038 million Australian Personal Loans Warehouse Facility Warehouse • Appropriate capital strength to pro
Slide 26: Outlook
05 | Outlook [CE LaTITUDE
Slide 27: Outlook
Outlook While the current Australian and New Zealand lockdowns have temporarily slowed economic activity, based on last year’s experience Latitude anticipates spending will recover quickly once restrictions are eased Pent-up demand led to a 43% increase in Latitude’s Victorian volumes in November la
Slide 28: Appendix
06 | Appendix [{E LaTITUDE
Slide 29: Cash NPAT to Statutory NPAT reconciliation
Cash NPAT to Statutory NPAT reconciliation Pro forma Pro forma Change % Change % ($m) 1H21 2H20 1H20 1H21 vs 2H20 1H21 vs 1H20 Net interest income 400.9 408.2 471.9 (1.8)% (15.0)% Total other operating income 25.1 25.3 28.8 (0.8)% (12.6)% Total Operating Income 426.0 433.5 500.7 (1.7)% (14.9)% Manag
Slide 30: Thank you
Thank you Investor Relations Nehemiah Richardson +61 476 834 478 Media Mark Gardy +61 412 376 817
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