Propel Holdings, Inc. · TSX:PRL
Propel — Investor Presentation (May 2022)
32 slides from Propel's investor presentation, May 10, 2022
Slide 1: Investor Presentation
INVESTOR PRESENTATION TSX:PRL May 10, 2022
Slide 2: Disclaimer
Disclaimer FORWARD-LOOKING INFORMATION Certain statements made in this presentation may constitute forward-looking information under applicable securities laws. These statements may relate to our financial and operating targets for fiscal 2022 and 2023, our preliminary Q4 2021 operational results al
Slide 3: Investment Highlights
Investment Highlights ▪ Consumer-focused fintech lending platform ▪ Leading-edge, AI-driven, agile tech infrastructure unlocking credit market opportunity ▪ Innovative, transparent products and services, including 3 transformational bank programs ▪ Profitable, scalable business with ample growth opp
Slide 4: Our Mission
OUR MISSION Inclusion Evolution Experience Every individual deserves Help consumers evolve to better Provide a best-in-class access to credit credit products over time consumer experience We facilitate access to credit for underserved consumers through our belief that every individual deserves credi
Slide 5: More than 25% of U.S. adults are unable to afford a $400 emergency expense
More than 25% of U.S. adults 3 in 10 U.S. adults are unable to afford a experience hardships due to $400 emergency expense income volatility Despite regulatory encouragement, +60M U.S. adults lack access to traditional credit from mainstream credit providers, making even a small unexpected expense a
Slide 6: Propel: the fintech platform for underserved consumers
PROPEL: the fintech platform for underserved consumers focused on helping 25% of U.S. adults get access to the credit they need 6
Slide 7: Financial Inclusion for the Underserved Population
Financial Inclusion for the Underserved Population Mainstream Bank Credit Products Legacy Products Online, scalable fintech offering convenient, fair and transparent access to credit with potential to build credit and NO surprise fees, DECLINED origination fees, late fees or prepayment penalties Tie
Slide 8: Propel Today
Propel Today 100% online At Scale Fintech Profitable $751M ~7.96M <10 second Fiscal 2021 Q1 2022 in originations* unique applications initial credit decisions per year** Revenue 76% 85% growth 878,000 30,000+ ~88% Adjusted $25.4M $9.7M funded loans and unique applications of applications EBITDA*** l
Slide 9: Products
PRODUCTS Inclusive Transparent Evolving “MoneyKey was there for me when no one else was. They help give me the money for bills I did [not] have a clue if I could pay. I’m really thankful that they came through for me.” ~ Christopher, MoneyKey Customer 9
Slide 10: Brands & Products
Brands & Products Propel Brand Consumer Product Operating Structure Fully amortizing installment State-Licensed Direct Lender loans Credit Services Organization/Credit Access Business Open-ended Lines of Credit Bank Sub-servicer Open-ended Lines of Credit Bank Partner Product and service offerings a
Slide 11: Putting Consumers First
Putting Consumers First OUR TYPICAL CONSUMER: Employed Consistently Lowered Graduation Ability to Improve Financial Wellness Cost of Credit Over Time Programs Low-Moderate Income Credit Score and Education • Over the last two • Propel platform • Some programs • Financial literacy years, the cost of
Slide 12: Platform to Succeed
Platform to Succeed Convenient Seamless Mobile “I would like to thank this company for helping me through this tough time. […] I would like for you to know that they see the best in you and will help in your time of need thank you so much.” ~ TyJuan, MoneyKey Customer 12
Slide 13: Industry-Leading Proprietary Technology
Industry-Leading Proprietary Technology Designed for Consumer Needs 47+ person in-house tech team Major subsystems: proven 6-week Agile delivery cycle • Acquisition and underwriting engine (AI-powered) • Loan management system • Customer self-service portal (mobile optimized) $15M+ invested to date
Slide 14: Looking Beyond Traditional Credit Scores
Looking Beyond Traditional Credit Scores Our sophisticated AI-powered engine with machine learning algorithms provides opportunities for creditworthy consumers 1,000+ Attributes Evaluate Credit Worthiness $600,000,000 Fund More 16% 14% $500,000,000 Alternative Credit Bureau Data Sub-10 second, Misse
Slide 15: World Class Operations Team
World Class Operations Team Relentless focus on service and performance “I believe CreditFresh helped me out in a very difficult time. They were enthusiastic, supportive, interested in my personal needs… Thank you CreditFresh!!” ~ Joseph, CreditFresh Customer Excellent 4.5 and 4.6 ratings from thous
Slide 16: Financial Overview
FINANCIAL OVERVIEW Profitable Diversified Resilient “CreditFresh accepted me when no one else would. The process was quick and easy. The loan was very helpful. Thank you.” ~ Benjamin, CreditFresh Customer 16
Slide 17: Evolving into a Diversified Online Global Fintech Company
Evolving into a Diversified Online Global Fintech Company Adjacent products • Design, deliver and cross-sell Geographic expansion complementary • Expansion into products aligned new states and with Propel’s core jurisdictions purpose Serving lower risk markets Graduating • Extension of existing cons
Slide 18: Q1 2022 Financial Performance
Q1 2022 Financial Performance Total Originations Funded* +156% in Q1 2022 Loans and Advances Receivable Revenue Adjusted EBITDA* US$M US$M $129.6 US$M $124.8 $25.4 $103.8 $20.0 $73.5 $68.0 $49.8 $50.5 $10.2 $9.7 $8.0 $26.4 $27.3 2019 2020 2021 Q1 2022 2019 2020 2021 Q1 2021 Q1 2022 2019 2020 2021 Q1
Slide 19: Q1 2022 Financial Performance
Q1 2022 Financial Performance Revenue US$M ▪ Record Total Originations Funded*, Loans and Advances Receivable and Ending Combined Loan and Advance $129.6 Balances* ▪ Building on 2021 expansion: new bank partner; bank partners rolled out 10 new states each through MoneyKey and CreditFresh brands $73.
Slide 20: Q1 2022 Financial Performance
Q1 2022 Financial Performance Provision for loan losses and other liabilities (“Provision”) and Net Charge-offs* ▪ Net-Charge-offs as % of Funded* decreasing over time due to evolution towards lower-risk consumers in 49% portfolio 47% ▪ Expect trend to continue moving forward 42% 42% ▪ Q1 2022 Provi
Slide 21: Q1 2022 Financial Performance
Q1 2022 Financial Performance Net Income Adjusted Net Income* US$M US$M $12.9 $7.3 $6.6 $5.7 $9.2 ▪ Profitability metrics impacted by: $3.9 $5.8 $5.6 ▪ Up-front costs that support record revenue $2.0 growth $2.0 ▪ Atypically high credit quality in FY 2020 and Q1 2021 2019 2020 2021 Q1 2021 Q1 2022 2
Slide 22: Solid Financial Position
Solid Financial Position ▪ IPO and over-allotment proceeds deployed towards: Outstanding Debt Maturities ▪ Portfolio expansion (in US$M ) ▪ Supporting roll-out of bank programs to new states MoneyKey (Capacity) $120.0 MoneyKey (Utilized) ▪ Temporary repayment of debt CreditFresh (Capacity) $57.2 ▪ O
Slide 23: Growth Outlook: 2022 and 2023
Growth Outlook: 2022 and 2023 Ending Combined Loan and Advance Balances* Target 2022 2023 ▪ Continued geographic penetration in bank programs ▪ Penetration of variable pricing and graduation Ending Combined Loan and 80% - 90% 45% - 55% Advance Balances* Growth Rate capabilities ▪ New marketing partn
Slide 24: Ready for Tomorrow
READY FOR TOMORROW Poised Focused Strategic “Excellent staff, outstanding services, affordable payment rates, very customer-friendly – CreditFresh is the best…!” ~ Linus, CreditFresh Customer 24
Slide 25: Appendix A
Appendix A 25
Slide 26: Our Senior Leadership Team
Our Senior Leadership Team Clive Kinross Gary Edelstein Noah Buchman Sheldon Saidakovsky Co-Founder and President Co-Founder and Co-Founder and Chief Executive Officer Executive Vice President; Executive Vice President; President of CreditFresh Chief Financial Officer Sarika Ahluwalia Dr. Jonathan G
Slide 27: Board of Directors
Board of Directors Michael Stein Clive Kinross Peter Monaco Poonam Puri Geoff Greenwade Karen Martin Yousry Bissada Mr. Stein is the founder, Co-Founder and CEO Mr. Monaco is Managing Ms. Puri is a professor of Mr. Greenwade was the Ms. Martin was the Mr. Bissada is President Chairman and CEO of of
Slide 28: Appendix B
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Slide 29: Non-IFRS Measure Reconciliation
Non-IFRS Measure Reconciliation Three Months Ended March 31, Year Ended Dec 31, US$ 2022 2021 2021 2020 2019 Net Income 3,876,527 5,672,381 6,562,442 7,332,388 1,994,849 Interest on Debt 1,293,277 1,489,114 5,317,923 4,052,783 2,851,941 Interest on lease liabilities 102,420 113,952 440,043 468,428 4
Slide 30: Non-IFRS Measure Reconciliation
Non-IFRS Measure Reconciliation US$ Three Months Ended March 31, Year Ended Dec 31, 2022 2021 2021 2020 2019 Net Income 3,876,527 5,672,381 6,562,442 7,332,388 1,994,849 Transaction Costs and Financing Costs net of - - 1,212,643 19,181 18,814 taxes2 Provision for credit losses on current status 1,14
Slide 31: Non-IFRS Measure Reconciliation
Non-IFRS Measure Reconciliation US$ As at March 31, As at Dec 31, 2022 2021 2021 2020 2019 Ending Combined Loan and Advance balances 1 158,151,577 67,462,965 134,843,170 62,643,735 37,339,842 Less: Loan and Advance balances owned by third (3,752,500) (1,755,313) (4,260,648) (2,487,802) (4,125,377) p
Slide 32: Non-IFRS Measure Reconciliation
Non-IFRS Measure Reconciliation Three Months Ended March 31, Year Ended Dec 31, US$ 2022 2021 2021 2020 2019 Charge-offs (21,781,825) (8,452,305) (46,898,488) (26,059,774) (30,146,501) Recoveries 2,818,823 1,152,382 6,909,063 3,874,018 3,804,778 Net charge-offs1 (18,963,002) (7,299,923) (39,989,426)