Latitude Group Holdings Ltd. · ASX:LFS
Latitude — Investor Presentation (February 2022)
18 slides from Latitude's investor presentation, Feb 18, 2022
Slide 1: Market Briefing: Latitude accelerates its growth strategy with the acquisition of the Humm Consumer Business
Market Briefing Latitude accelerates its growth strategy with the acquisition of the Humm Consumer Business LATITUDE GROUP HOLDINGS LIMIITED ACN 604 747 391
Slide 2: Agenda
Agenda Transaction Overview 3 Strategic Rationale 4 Other Transaction Details 13 Appendix: About Humm Consumer 15 2
Slide 3: A compelling acquisition with substantial strategic and economic benefits
A compelling acquisition with substantial strategic and economic benefits Transaction ▪ Acquisition of Humm Consumer for consideration of $335 million, comprising 150 million Latitude shares1,2 and $35 million cash3 overview ▪ Cements Latitude’s position as the leading non-bank consumer lender in Au
Slide 4: The acquisition of Humm Consumer accelerates our growth strategy and consolidates our position
The acquisition of Humm Consumer accelerates our growth strategy and consolidates our position as ANZ’s leading non-bank consumer lender ▪ Rapidly accelerates Latitude’s strategy to win customers and merchants across ACCELERATED Australia and internationally ~60k +5m #1 GROWTH ▪ Leverage and grow in
Slide 5: Latitude is differentiated by its platform model across Instalments and Lending
Latitude is differentiated by its platform model across Instalments and Lending – Humm Consumer enhances our position across multiple areas The leader in consumer finance disrupting payments and traditional lenders Shop small, pay weekly Shop big, pay monthly Shop anywhere, pay flexibly BNPL BIG TIC
Slide 6: Accelerated growth strategy
Accelerated growth strategy #1 Rapidly accelerates Latitude’s strategy to win customers and merchants across Australia and internationally Pro 2.8m customers1 2.6m customers1 Forma 5.5k merchants 60k merchants2 2 Receivables 2 Receivables 3 Receivables Customers1 2.8m 2.6m 5m+ Platforms5 Platforms P
Slide 7: Accelerated growth strategy
Accelerated growth strategy #1 Rapidly accelerates Latitude’s strategy to win customers and merchants across Australia and internationally Leverage Humm’s established presence in adjacent verticals with minimal investment Latitude Today Humm Consumer Verticals Solar and Other Health Fashion Travel T
Slide 8: Significant scale and monetisation opportunities
#2 Significant scale and monetisation opportunities Consolidation of ~$1.9b of BNPL and Cards receivables and expansion into Big Things Gross Receivables ($m) and Customers (m) (Jun-21)1 Immediate scale in BNPL; Volume ($m, Jun-21 LTM)3 Humm Consumer - $1.9b +1,025% 2.8m 240k 490k 1.9m +5m 1,136 763
Slide 9: Significant scale and monetisation opportunities
#2 Significant scale and monetisation opportunities Opportunity to monetise Latitude and Humm products across the combined 5m+ customer base Interest free instalments Scheme spending and credit of interest free instalments of instalments products customers 84% products volume was generated 50% reuse
Slide 10: Enhanced economics
#3 Enhanced economics $65m full run rate synergies with $55m from cost and funding synergies $65 million (pre-tax) of expected full run rate synergies Synergies estimates are conservative and executable Conservative ~9% of combined cost ▪ Technology and operations cost benefits from base1 fully real
Slide 11: Enhanced economics
#3 Enhanced economics Double digit Cash EPS accretion from full run rate synergies Incremental Cash Profit Before Tax (A$m) 55 90 Annualised 10 100 Annualised Synergies FY23 Cash PBT 35 35 In-Year 20 35 Synergies 55 In-Year Cash PBT Humm Consumer Cost & Funding Incremental Cash PBT Revenue Synergies
Slide 12: Integration plan
Integration plan Symple integration on track, exemplifying Latitude’s ability to integrate, migrate and realise synergies Target Transaction Cost synergies fully realised in Completion1 4Q23 following migration ▪ Latitude has experience in scale 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 transformation
Slide 13: Other Transaction details
Other Transaction details ▪ Completion of the Transaction is subject to satisfaction of a number of conditions including : – Humm shareholder approval under ASX Listing Rule 11.1.2 and 11.2 (requiring simple majority approval by the Humm shareholders); – Humm receiving a draft ATO ruling in respect
Slide 14: Appendix: About Humm Consumer
Appendix: About Humm Consumer
Slide 15: Humm Consumer is a leading consumer finance provider in Australia and New Zealand
Humm Consumer is a leading consumer finance provider in Australia and New Zealand Division Products Gross Receivables1 Volume Customers2 Segment Gross Receivables Contribution (%)1,3 (Jun-21) (Jun-21 LTM) (Dec-21) 34% BNPL $763m $1,035m 1.9m 41% $1,858m 24% AU Cards $455m $417m 240k Segment Volume C
Slide 16: Humm Consumer financials under Latitude ownership
Humm Consumer financials under Latitude ownership Humm Consumer Run Rate KPIs (Pre-Synergies) Post-Synergies Net Operating Income Margin1,2 ~14% Net Charge Offs1 ~4% $90 million cash profit before tax excluding revenue synergies5 Risk Adjusted Income Yield1,3 ~10% $100 million cash profit before tax
Slide 17: 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 18: Important notice and disclaimers
Important notice and disclaimers Forward looking statements (Cont’d) Nothing in this Presentation is a promise or representation as to the future. Forward-looking statements are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. Actual
Latitude Group Holdings — Investor Presentation (February 2022) on 6ix