Ezcorp, Inc. · NASDAQ:EZPW
Ezcorp — Q4 FY2023 Earnings Presentation
42 slides from Ezcorp's earnings presentation, November 2023
Slide 1: Fourth Quarter and Full Year Fiscal 2023 Earnings
FOURTH QUARTER AND FULL YEAR FISCAL 2023 EARNINGS NOVEMBER 2023
Slide 2: Preliminary Statements
PRELIMINARY STATEMENTS Forward Looking Statements Other Available Information Comparisons This presentation contains certain forward- This information should be read in All comparisons in this presentation are looking statements. These statements are conjunction with, and not in lieu of, the relativ
Slide 3: Company Overview
COMPANY OVERVIEW Leader in Pawn and Pre-Owned and Recycled Retail Formed in 1989, EZCORP has grown 1,231 stores in 5 countries into a leading provider of pawn transactions in the United States and Latin America. We also sell pre- owned and recycled merchandise through a broad network of retail locat
Slide 4: Company Overview: People, Pawn, Passion
COMPANY OVERVIEW People, Pawn, Passion • Engaged workforce • Refined talent and performance management programs • Enhanced staffing strategies • Strengthened cultural alignment Ready to Meet Our Customers’ Needs • Increasing reach and access to financial services in local store neighborhoods with bu
Slide 5: Our Path to Strengthen and Grow the Core
OUR PATH TO STRENGTHEN AND GROW THE CORE Q4 FY23 Progression Toward Our Strategic Goals Team Members Customer Focus The most passionate, productive A passion for pawnbroking, pre- and tenured team in the industry owned retailing and solving • Completed global operational customer needs talent and su
Slide 6: Q4 FY23 Key Financial Themes
Q4 FY23 KEY FINANCIAL THEMES Strong Consumer Demand for Pawn and Pre-Owned Goods Continue to Drive Record Revenues and Earnings Growth Revenue & Earnings Focus on Inventory Management Strong Balance Sheet • Q4 record total revenues of $261.4M, • Same store sales up 5% • $220.6M cash balance, down fr
Slide 7: EBITDA Margin Focus
EBITDA MARGIN FOCUS ($ millions) Growing EBITDA and Maintaining EBITDA Margins in an Inflationary Environment Consolidated $130 13% 13% 13% 12% 13% $120 $110 • LTM EBITDA Margin remains flat at $100 LTM Sep FY22 LTM Dec FY23 LTM Mar FY23 LTM Jun FY23 LTM Sep FY23 13% compared to LTM Sep FY22 U.S. Pa
Slide 8: Strengthen the Core
STRENGTHEN THE CORE Focus on People and Technology to Drive Increased Earnings People, Pawn, and Passion Technology, Process Efficiency • Launched Workday human capital management system • Redesigning general merchandise pricing for better price globally, providing team members with improved access
Slide 9: Innovate and Grow
INNOVATE AND GROW Broaden Customer Engagement to Serve More Customers, More Frequently EZ+ Grow Customer Base Store Count • Grew EZ+ Rewards members to 3.8M • Increased transacting customers by 5% globally, with U.S. and Mexico each across all geographies surpassing 1.7M total members • Grew visits
Slide 10: FY23 ESG Highlights
FY23 ESG HIGHLIGHTS Providing environmentally friendly retail experiences to our customers through a network of neighborhood recommerce stores Contributing to a Circular Economy • Resold approximately 5.4M pre-owned general merchandise and jewelry items procured through pawn forfeitures and direct p
Slide 11: FY23 ESG Highlights
FY23 ESG HIGHLIGHTS Promoting Diversity and Inclusion FY23 - U.S. Race & Ethnicity • Continued Women’s Empowerment affinity groups (U.S. and LatAm), Black Empowerment Affinity Group (U.S.), HOLA, the Hispanic Organization for Leadership Advocacy (U.S.), Working Parents Affinity Group (LatAm) and EZ
Slide 12: Financial Results – Consolidated
FINANCIAL RESULTS – CONSOLIDATED ($ millions) Q4 Highlights Pawn Loans Outstanding Pawn Service Charges • PLO balance up 14%, 11% on a $250 $400 $376.5 same store basis, due to improved $320.9 $200 $300 operational performance and continued strong pawn demand $150 $240.4 $200 $100 $210.1 • PSC up 15
Slide 13: Financial Results – U.S. Pawn
FINANCIAL RESULTS – U.S. PAWN ($ millions) Q4 Highlights Pawn Loans Outstanding Pawn Service Charges • PLO balance up 17%, 13% on a $300 $285.9 $200 same store basis, due to improved $241.0 customer service and increased $150 $200 pawn demand $100 $190.6 • PSC up 17%, driven by higher $163.5 $100 av
Slide 14: Financial Results – Latin America Pawn
FINANCIAL RESULTS – LATIN AMERICA PAWN ($ millions) Q4 Highlights Pawn Loans Outstanding Pawn Service Charges • PLO balance up 7%, 4% on a same $60 $100 $90.6 store basis, as consumer demand $79.9 $50 $80 increased, reflecting recoveries $40 from Q3 $60 $30 • PSC up 9%, driven by higher $49.7 $40 $2
Slide 15: Three Year Strategy Recap FY21-FY23
THREE YEAR STRATEGY RECAP FY21 - FY23
Slide 16: FY21 to FY23 Strategy Recap
FY21 to FY23 STRATEGY RECAP Focused Execution on Core Strategic Pillars and Foundational Capabilities Delivered Measurable Results • Transitioned in FY20 to a seasoned management team deeply committed to and passionate about the pawn business • Completed a comprehensive strategic review across all b
Slide 17: People, Pawn & Passion
PEOPLE, PAWN & PASSION Three-year commitment to improving culture and pawn fundamentals drove record-setting FY23 results • Invested in building and retaining engaged store teams ◦ Redesigned onboarding process and training programs ◦ Focused on developing next-level talent bench with personalized E
Slide 18: Consolidated PLO and PSC Performance
CONSOLIDATED PLO AND PSC PERFORMANCE • PLO is the key driver of our revenue and Pawn Loans Outstanding Pawn Service Charges earnings $240 $377 $250 $400 • Seasonally (excluding COVID effects), Q2 $210 $321 ($ millions) ($ millions) ends with the lowest PLO balance for the $200 $300 $273 $260 $176 fi
Slide 19: Consolidated Inventory Management Performance
CONSOLIDATED INVENTORY MANAGEMENT PERFORMANCE Inventory Inventory Turns 2.9 $200 2.0 3.0 2.8 2.8 1.6 2.4 1.5 1.4 1.4 $150 1.5 2.0 ($ millions) $100 1.0 $152 $162 1.0 $111 FY20 FY21 FY22 FY23 $50 $96 0.5 $— 0.0 Aged GM FY20 FY21 FY22 FY23 5.8% 6.0% INVENTORY_NET PLO / INV 3.0% 0.9% 1.3% 0.5% Focus on
Slide 20: Consolidated Sales Performance
CONSOLIDATED SALES PERFORMANCE Growing Sales and Sales Gross Profit Sales Gross Profit • Record merchandise sales and sales gross profit in FY23 reflect the $250 improvements made to our operating model over the past three $216 years $203 $200 ($ millions) • FY21 merchandise margin was an anomaly du
Slide 21: Customer Engagement Growth
CUSTOMER ENGAGEMENT GROWTH Sustained Growth in Customer Engagement driving Increased Earnings EZ+ Rewards Cumulative EZ+ Rewards % EZ+ Members of ▪ Launched EZ+ Rewards across all Members Transacting Customers geographies to improve customer 5 100% 73% engagement and retention 3.8 67% (millions) ▪ B
Slide 22: Consolidated Store Growth and Balance Sheet
CONSOLIDATED STORE GROWTH AND BALANCE SHEET Store Count Store Count 1,231 • In the last 3 years we have increased store count 1,200 1,175 1,148 by 226 stores by: ◦ Acquiring 154 stores; 128 in LatAm and 26 in 1,050 1,005 the U.S. ◦ Opening 90 de novo stores; 87 in LatAm and 3 900 in the U.S. FY20 FY
Slide 23: U.S. Pawn Segment Highlights
U.S. PAWN SEGMENT HIGHLIGHTS Highlights PLO Net Revenue • Compared to FY20: $200 $191 $500 $456 ◦ PLO balance up 80% $163 $406 $150 $136 $400 ($ millions) ($ millions) ◦ PLO on a per store average basis of $361 $350 $360k, up 71%, a new record $106 ◦ Net Revenue growth of 26% driven $100 $300 by str
Slide 24: Latin America Pawn Segment Highlights
LATIN AMERICA PAWN SEGMENT HIGHLIGHTS Highlights PLO Net Revenue • Compared to FY20: $60 $150 $142 ◦ PLO up 100% $50 $50 $47 $122 $40 $125 PLO on a per store average basis of ($ millions) ◦ ($ millions) $40 $100 $71k, up 43% $100 $30 $25 $87 ◦ Net Revenue up 63% $20 $75 ◦ EBITDA up 80% $10 $50 • Sin
Slide 25: Strategic Investments
Strategic Investments Cash Converters International Simple Management Group • CCV is an Australian listed consumer lender, pawnbroker and • SMG owns and operates 95 pawn stores in 13 countries — 42 secondhand goods retailer with both corporate and franchise in the Caribbean, 31 in Florida and 22 in
Slide 26: Consolidated Earnings Performance
CONSOLIDATED EARNINGS PERFORMANCE Earnings • Focus on People, Pawn & Passion has driven significant earnings and Net Income EBITDA margin improvement. Since FY20: 13% 13% $180 14% ◦ Net Income has more than 7% $80 6% 8% 12% tripled ($ millions) ◦ EBITDA almost doubled $70 6% 9% $130 11% ($ millions)
Slide 27: Appendix
EZCORP APPENDIX
Slide 28: Higher PLO & Revenue Drive Increased Earnings (GAAP)
HIGHER PLO & REVENUE DRIVE INCREASED EARNINGS Q4 GAAP Results ($ millions, except per share amounts) Q4 %△ Full Year %△ Gross profit improvement, primarily FY23 FY22 B/(W) FY23 FY22 B/(W) driven by higher PSC as a result of higher average PLO and higher sales gross profit Pawn Loans Outstanding $ 24
Slide 29: Higher PLO & Revenue Drive Increased Earnings (Adjusted)
HIGHER PLO & REVENUE DRIVE INCREASED EARNINGS Q4 Adjusted Results ($ millions, except per share amounts) Q4 %△ Full Year %△ Q4 Gross Profit improvement, primarily FY23 FY22 B/(W) FY23 FY22 B/(W) driven by higher PSC as a result of higher average PLO and higher sales gross profit Pawn Loans Outstandi
Slide 30: Environmental, Social and Governance
ENVIRONMENTAL, SOCIAL AND GOVERNANCE Our Business is Unique, Essential and Sustainable We are committed to meeting our customers’ needs in a responsible manner and contributing to a sustainable future by limiting our environmental impact, serving underserved customers and communities and maintaining
Slide 31: Definition of Terms
DEFINITION OF TERMS Cash Converters International Limited, a publicly-traded company based in CCV Australia, in which EZCORP holds a minority interest ESG Environmental, Social and Governance Founders Founder One, LLC GM General merchandise (non-jewelry) Latin America, including Mexico, Central LatA
Slide 32: GAAP to Non-GAAP Reconciliation
GAAP TO NON-GAAP RECONCILIATION In addition to the financial information prepared in conformity with generally accepted accounting principles in the United States of America ("GAAP"), we provide certain other financial information that is adjusted to exclude the impact of restructuring and restateme
Slide 33: GAAP to Non-GAAP Reconciliation Q4 – Consolidated
GAAP TO NON-GAAP RECONCILIATION Q4 – CONSOLIDATED* ($ millions, except per share amounts) Constant Adjusted Item Adjusted Currency Constant Item Adjusted Base Adjustments Base Impact Currency Base Adjustments Base FY23 FY23 FY23 FY23 FY23 FY22 FY22 FY22 Revenues 270.5 — 270.5 (9.1) 261.4 233.4 — 233
Slide 34: GAAP to Non-GAAP Reconciliation Q4 – U.S. Pawn
GAAP TO NON-GAAP RECONCILIATION Q4 – U.S. PAWN ($ millions) Constant Adjusted Item Adjusted Currency Constant Item Adjusted Base Adjustments Base Impact Currency Base Adjustments Base FY23 FY23 FY23 FY23 FY23 FY22 FY22 FY22 Revenues 194.5 — 194.5 — 194.5 174.0 — 174.0 PSC Revenue 77.9 — 77.9 — 77.9
Slide 35: GAAP to Non-GAAP Reconciliation Q4 – Latin America Pawn
GAAP TO NON-GAAP RECONCILIATION Q4 – LATIN AMERICA PAWN* ($ millions) Constant Adjusted Item Adjusted Currency Constant Item Adjusted Base Adjustments Base Impact Currency Base Adjustments Base FY23 FY23 FY23 FY23 FY23 FY22 FY22 FY22 Revenues 76.0 — 76.0 (9.1) 66.9 59.4 — 59.4 PSC Revenue 26.5 — 26.
Slide 36: GAAP to Non-GAAP Reconciliation FY – Consolidated
GAAP TO NON-GAAP RECONCILIATION FY – CONSOLIDATED* ($ millions, except per share amounts) Constant Adjusted Item Adjusted Currency Constant Item Adjusted Base Adjustments Base Impact Currency Base Adjustments Base FY23 FY23 FY23 FY23 FY23 FY22 FY22 FY22 Revenues 1,049.0 — 1,049.0 (22.8) 1,026.3 886.
Slide 37: GAAP to Non-GAAP Reconciliation FY – U.S. Pawn
GAAP TO NON-GAAP RECONCILIATION FY – U.S. PAWN ($ millions) Constant Adjusted Item Adjusted Currency Constant Item Adjusted Base Adjustments Base Impact Currency Base Adjustments Base FY23 FY23 FY23 FY23 FY23 FY22 FY22 FY22 Revenues 761.9 — 761.9 — 761.9 658.8 — 658.8 PSC Revenue 285.9 — 285.9 — 285
Slide 38: GAAP to Non-GAAP Reconciliation FY – Latin America Pawn
GAAP TO NON-GAAP RECONCILIATION FY – LATIN AMERICA PAWN* ($ millions) Constant Adjusted Item Adjusted Currency Constant Item Adjusted Base Adjustments Base Impact Currency Base Adjustments Base FY23 FY23 FY23 FY23 FY23 FY22 FY22 FY22 Revenues 287.1 — 287.1 (22.8) 264.3 227.4 — 227.4 PSC Revenue 97.9
Slide 39: Consolidated Growth FY20-FY23 Reconciliation
CONSOLIDATED GROWTH FY20-FY23 RECONCILIATION* Consolidated Growth FY19-FY21 Reconciliation* ($ millions) FY20 FY20 FY20 FY20 FY20 FY21 FY21 FY21 FY21 FY21 Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Continuing Ops PBT 3.0 (34.2) (10.2) (28.7) (70.1) 5.5 6.8 (0.8) 4.5 16.1 Add Back Net Interest 4.5 4.9 4.8 5.1 19.
Slide 40: Pawn Businesses FY20-FY23 Reconciliation
PAWN BUSINESSES FY20-FY23 RECONCILIATION* Pawn Businesses FY18-FY21 Reconciliation* ($ millions) FY20 FY20 FY20 FY20 FY20 FY21 FY21 FY21 FY21 FY21 FY22 FY22 FY22 FY22 FY22 FY23 FY23 FY23 FY23 FY23 Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY U.S. Pawn PBT 28.6 20.4 16.5 7.7 73.1 20.7
Slide 41: Constant Currency
Constant Currency CONSTANT CURRENCY In addition to the financial information prepared in conformity with generally accepted accounting principles in the United States ("GAAP"), we provide certain other non-GAAP financial information on a constant currency basis ("constant currency"). We use constant
Slide 42: Thank You
EZCORP THANK YOU