Credit Corp Group Limited · ASX:CCP
Credit — H1 FY2010 Earnings Presentation
15 slides from Credit's earnings presentation, Feb 16, 2010
Slide 1: H1 of FY10 Results Presentation
For personal use only H1 of FY10 Results Presentation Thomas Beregi Chief Executive Officer Todd Vogel Chi f Fi Chief Financial i l Offi Officer
Slide 2: EBITDA growth accelerates to 18%
EBITDA growth th accelerates l t to t 18% For personal use only H1 of FY10 Financials FY10 versus pcp H1 of FY10 Actual Nov 09 Guidance PDL acquisitions up 176% to $36.7m $50-60m Revenue ((1)) up 14% to $89 2m $89.2m EBITDA (1) up 18% to $58.6m $94-98m NPAT up 11% to $6.9m $12-13.5m EPS (basic) up 1
Slide 3: Cash flow and balance sheet strength despite increased purchasing
Cash flow and balance sheet strength despite i increased d purchasing h i For personal use only Six months ended $ million 31 Dec 09 30 June 09 31 Dec 08 EBITDA 58.6 47.9 49.5 Operating cash flow 53 0 53.0 40 9 40.9 41 1 41.1 PDL acquisitions and capex (27.0) (24.2) (13.5) Free cash flow 26.0 16.7 2
Slide 4: Recent purchases are yielding acceptable returns
R Recent t purchases h are yielding i ldi acceptable t bl returns… t For personal use only Average purchases over the 18 months to December 2009 Cumulative percentage of purchase price collected by month FY10 Guide 230% 225%-250% 50% 47% Actual Forecast 45% 40% 37% % of purchase 35% 30% 25% price co
Slide 5: We continue to drive collections from older PDLs
…and d we continue ti tto drive d i collections ll ti ffrom older ld PDLs… PDL For personal use only PDL Revenue by date of purchase $m 45 40 24% 25% 9% 12% 22% 35 8% 9% 15% 25% 7% 7% 20% 9% 16% 30 19% > 3 years 13% 22% 2 % 27% 22% 27% 2-3 years 26% 28% 25 21% 28% 1-2 years 27% 35% 20 < 1 year 41% 1
Slide 6: Maintaining our focus on the certainty of returns
…while hil maintaining i t i i our ffocus on th the certainty t i t off returns t For personal use only Total Portfolio Dec 2009 June 2009 Dec 2008 June 2008 Dec 2007 Face value $2 5bn $2.5bn $2 2bn $2.2bn $2 2bn $2.2bn $2 2bn $2.2bn $1 9bn $1.9bn Number of accounts 306,000 284,000 319,000 370,000 3
Slide 7: We have started to grow our collection capacity
W have We h started t t d to t grow our collection ll ti capacity… it For personal use only Headcount by function (FTE) 600 500 Support 400 Process Serving / Mercantile 300 D bt P Debt Purchase h O Operations ti 200 100 0 FY04 FY05 FY06 FY07 FY08 FY09 Dec 09 Function FY04 FY05 FY06 FY07 FY08 FY09 De
Slide 8: Preserving collection efficiency
…while hil preserving i collection ll ti efficiency ffi i For personal use only Debt Purchase Productivity (direct collection staff only) $250 $245 $238 $239 $234 $234 $235 2009 $229 $229 $228 2008 $239 $224 $225 $231 $231 $229 $227 $212 $227 Revenue per hour $214 $209 FY10 Guide $200 $204 $205-$215
Slide 9: Historically high rate of impairment
Hi t i ll hi Historically high h rate t off iimpairment… i t For personal use only H1 of FY10 FY09 FY08 Impairment charge $42.5m $70.2m $59.6m Percentage of PDL revenue 48% 46% 42% Percentage of average PDL 51% 38% 31% carrying value (annualised) 9
Slide 10: Driven by above forecast collections
…driven di b by above b fforecastt collections ll ti For personal use only Sample purchase assumptions: • 2.3 TEC multiple • 20% over-performance to year 2 • “Normal” collection distribution • Over performance to date assumed to be timing – 2.3 TEC multiple held 100% Actual/revised forecast collecti
Slide 11: Our FY10 purchasing pipeline remains strong
O FY10 purchasing Our h i pipeline i li remains i strong… t For personal use only Purchases by half-year FY09 FY10 FY10 Guide $37m $61m $50-$60m 40 37 35 $m 30 24 24 25 20 18 15 13 10 5 0 H208 H109 H209 H110 H210 Actual Committed at Feb eb 10 0 11
Slide 12: But the outlook into FY11 is uncertain
…but b t the th outlook tl k iinto t FY11 is i uncertain t i For personal use only • Forward flow recovery environment is deteriorating – Limited originations putting credit portfolios into run-off Card volume growth(1) at 1% pa to Nov 09 v 6% pa for preceding 4 years Aggregate personal lending
Slide 13: Continued focus on our FY10 priorities
C ti Continued d ffocus on our FY10 priorities i iti For personal use only • Expanded collection capacity • Improved asset management • Additional initiatives to drive productivity • Closer relationships p with clients ((debt sellers)) • National Consumer Credit Protection Bill compliance • Continue
Slide 14: Increased guidance
I Increased d guidance id For personal use only FY10 U d t dF Updated Feb b 10 I Issued dNNov 09 PDL acquisitions $55 - 65m $50 - $60m EBITDA $104 - $110m $110 $94 - $98m $98 NPAT $12.5 - $14.0m $12 - $13.5m EPS (basic) 28 - 31cents 27 - 30cents Guidance excludes potential: (1) business sales; (2) s
Slide 15: Questions
For personal use only H1 of FY10 Results Presentation Questions