Contact Financial Holding Sae · EGX:CNFN
Contact Financial Holding Sae — Contact Financial Holding — Q1 2024 Earnings Presentation
44 slides from Contact Financial Holding Sae's earnings presentation, 2024
Slide 1: Results Presentation 1Q-2024
Results Presentation 1Q-2024
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 7 3 Digital Platforms 20 4 Debt Capital Markets 25 5 Africa Expansion 28 6 FY-2023 Performance Review 30 7 Appendix 43
Slide 4: Introduction
ion Introduct ~
Slide 5: 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 EG
Slide 6: Results Snapshot
Introduction Results Snapshot Contact took the decision to slow down portfolio transfer during the quarter due to the elevated interest rate environment, heavily impacting the performance of the Financing Division, which historically has generated a large proportion of its revenues from portfolio tr
Slide 7: Our Edge
Our Edge
Slide 8: 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 9: 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 offer
Slide 10: What We Do
Our Edge – What We Do What We Do Contact is Egypt’s largest non-bank financial services provider and has been actively changing the way businesses and individuals access financial and insurance services over the past twenty years. Financing 73% Insurance 27% Financing products targeting Egypt’s bank
Slide 11: 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 1Q-2024 4% 2% 2% 6% 4% 11% 8% 2% 4% 15% 56% 75% 13
Slide 12: 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 13: 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 2023 Zamalek Sharm El Sheikh Tah
Slide 14: And 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) 14
Slide 15: 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 Ad
Slide 16: 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 Consumer Credit Consumer Credit
Slide 17: Diversified, Highly Liquid Funding Base
Our Edge – Diversified Funding Base Diversified, Highly Liquid Funding Base Funding Strategy Overview Overview of 1Q-2024 Funding Base Amounts in EGP MN Utilized Available Diversified funding base enabling 22,597 consistent liquidity with efficient pricing A B C D 1,854 Fixed rate to match portfolio
Slide 18: 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 Space1 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, Conta
Slide 19: Consistent Growth and Expansion
Our Edge – Historical Performance Consistent Growth and Expansion By successfully leveraging its growing digital presence, coupled with the Group’s increasingly broad reach and service offering, Contact is able to overcome difficult market conditions and a challenging macroeconomic environment to co
Slide 20: Digital Platforms
Digital Platforms -
Slide 21: A Digital Business
Digital Platforms A Digital Business Through strategic investments and partnerships, Contact is continuously strengthening its digital capabilities, placing it at the forefront of the financing and insurance sectors’ digitization movement Increase Create new Maintain market Contact’s Improve Retain
Slide 22: 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 In 1Q-2024, the average number of paid dealer subscriptions rose 116% y-o-y. Additionally, on the back of Contact’s
Slide 23: 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 Origina
Slide 24: Digital Platforms – Wasla
Digital Platforms – Wasla Digital Platforms – Wasla Contact concluded a USD 9 million investment in e-commerce super-app Wasla in February 2022, further expanding the Company’s growing footprint in fintech and reinforcing its quest to enable tech-first ventures in Egypt’s financing ecosystem Wasla a
Slide 25: Debt Capital Markets
Debt Capital Markets
Slide 26: Overview of the Debt Capital Markets
Debt Capital Markets Overview of the Debt Capital Markets1 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 41 • Introducing new products to the market:
Slide 27: 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 ongoin
Slide 28: Africa Expansion
Africa Expansion
Slide 29: 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 30: 1Q-2024 Performance Review
© tS) c je) = = te) = iD) a. zr N (>) a ©) - > a > iD) o
Slide 31: Comprehensive Financing Offering
1Q-2024 Performance Review Comprehensive Financing Offering New lending during the quarter was impacted by a restrictive interest rate environment coupled with product price uncertainty Passenger Commercial Contact Mortgage Medical Working Cars Vehicles Shopping Capital Contact Auto offers Contact T
Slide 32: Financing Division – Resilient Results Across Financing Segments
1Q-2024 Performance Review Financing Division – Resilient Results Across Financing Segments In 1Q-2024, total new financing extended stood at EGP 2.6 billion, a 38% year-on-year decline, with the Consumer Finance and Auto segments witnessing the largest year-on-year drops during the period. The divi
Slide 33: Financing Division – Increasingly Diversified Portfolio with Favorable Margins
1Q-2024 Performance Review Financing Division – Increasingly Diversified Portfolio with Favorable Margins Contact’s financing portfolio reached EGP 20.85 billion in 1Q-2024, a 24% year-on-year increase. Throughout the year, Contact continued to diversify its portfolio with an increased focus on high
Slide 34: Financing Division – Resilient Results Across all Financing Revenue Components
1Q-2024 Performance Review Financing Division – Resilient Results Across all Financing Revenue Components An elevated interest rate environment coupled with prevalent price uncertainty weighed on the Financing Division’s results during 1Q-2024, which negatively impacted customers’ purchasing power,
Slide 35: Financing Division – High-Quality Portfolio as Evident by the Low Delinquency Ratio
1Q-2024 Performance Review Financing Division – High-Quality Portfolio as Evident by the Low Delinquency Ratio Contact’s PaR 150+ delinquencies (Portfolio at Risk) ratio as at March 2024 stood at 3.3% 150+ Days Portfolio at Risk 3.2% 3.3% 2.8% 2.5% 2.3% FY-2021 FY-2022 FY-2023 1Q-2023 1Q-2024 Contac
Slide 36: Financing Division – Declining Profitability amidst a Difficult Operating Environment
1Q-2024 Performance Review Financing Division – Declining Profitability amidst a Difficult Operating Environment The Financing Division’s net income shrank by 83% year-on-year in 1Q-2024 following the company’s decision to slow down portfolio transfer activities given the prevailing interest rate en
Slide 37: Insurance Division – Operational and Business Developments – 1Q-2024
1Q-2024 Performance Review Insurance Division – Operational and Business Developments – 1Q-2024 Gross written premiums generated by both insurance companies continued to report strong year-on-year growth driven by new product launches and increased cross-selling, while total policies underwritten in
Slide 38: Insurance Division – Performance Review
1Q-2024 Performance Review Insurance Division – Performance Review Underwriting Income | EGP mn Insurance Operating Income | EGP mn +7% 349 +48% 150 On a consolidated basis, Underwriting income expanded insurance operating income 97 by a 7% year-on-year to reach 195 reached EGP 120 million a 48% EGP
Slide 39: Consolidated Performance – Income Statement
1Q-2024 Performance Review Consolidated Performance – Income Statement A weak performance at the Financing Division overshadowed the Insurance Division’s positive performance, and weighed on the Group’s consolidated results during the quarter Consolidated Operating Expenses | EGP mn Total Operating
Slide 40: Consolidated Performance – Income Statement
1Q-2024 Performance Review Consolidated Performance – Income Statement Consolidated normalized net income after minorities contracted by 68% year-on-year to EGP 57 million in 1Q-2024 Normalized Net Income1| EGP mn Consolidated Return on Equity | % Adjustments Actual Net Income 693 27.2% 1 609 21.6%
Slide 41: Appendix
Appendix
Slide 42: Financing Business Income Statement
Appendix Financing Business Income Statement FY-2022 FY-2023 change (FY-2022 vs FY-2023) 1Q-2023 1Q-2024 change (1Q-2023 vs 1Q-2024) Revenue from Portfolio Transfer 767,104 1,005,772 31% 269,827 95,905 -64% Off Balance Sheet Portfolio Management Fee 199,248 326,241 64% 68,678 94,649 38% Securitizati
Slide 43: Insurance Business Income Statement
Appendix Insurance Business Income Statement FY-2022 FY-2023 change (FY-2022 vs FY-2023) 1Q-2023 1Q-2024 change (1Q-2023 vs 1Q-2024) Gross Written Premiums 948,316 1,491,843 57% 436,966 695,605 59% Provisions of Unearned Premiums (105,734) (194,195) 84% (71,293) (134,088) 88% Outward Reinsurance Pre
Slide 44: Consolidated Income Statement
Appendix Consolidated Income Statement Financing Business FY-2022 FY-2023 change (FY-2022 vs FY-2023) 1Q-2023 1Q-2024 change (1Q-2023 vs 1Q-2024) Revenue from Portfolio Transfer 767,104 1,005,772 31% 269,827 95,905 -64% Off Balance Sheet Portfolio Management Fee 199,248 326,241 64% 68,678 94,649 38%
Contact Financial Holding — Q1 2024 Earnings Presentation on 6ix