Beforepay Group Limited · ASX:B4P
Beforepay — Investor Presentation (February 2024)
35 slides from Beforepay's investor presentation, Feb 26, 2024
Slide 1: H1 FY24 Half Year Results Presentation
Beforepay Group Limited ASX:B4P H1 FY24 Half Year Results Presentation 26 February 2024 Unaudited
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by Beforepay Group Limited (‘Beforepay’ or the ‘Company’). This presentation may contain forward-looking statements, guidance, forecasts, estimates, prospects, projections or statements in relation to future matters (‘Forward Statements’). Forward State
Slide 3: What we do
What we do Beforepay provides fast and affordable Ethical short-term Designed to be Designed for short-term finance to Australians, designed finance2 affordable customer safety to prevent customers getting into too much debt or paying compound interest We are a 2 time ethical award We charge a one-t
Slide 4: Ethical lending
Ethical lending Awards we’ve won The use case. We believe that nobody wants to be in debt. 1 We believe that most people, when money is tight, only want to borrow a small amount of money for a short period of time, to tide them over until they get paid. The product. We advance small amounts of money
Slide 5: Efficient platform; AI-powered risk management
Efficient platform; AI-powered risk management The need. We offer small, short-term advances that cost 1 customers less than $20 all-in, on average. To do so, we need to keep our operating costs and defaults low. Efficient and automated platform. While customer 2 support is available, the vast major
Slide 6: Business Update
Business Update
Slide 7: H1 FY24 Highlights
H1 FY24 Highlights $2.2m $4.2m $359m 16% NPBT profit in H1 FY24, up EBITDA profit in H1 FY24, up Advances in H1 FY24, Growth in Active Users YoY from a loss ($4.4m) in H1 FY23. from a loss ($2.7m) in H1 FY23. up 18% from H1 FY23. to 235,644 in H1 FY24. 2.8% 1.3% $1.4 billion 96% Net Transaction Marg
Slide 8: H1 FY24 Highlights: Key Metrics
H1 FY24 Highlights Key Metrics H1 FY24 H1 FY23 % Change H2 FY23 % Change Advances ($m) 358.6 303.9 18% 324.1 11% Average advance ($) 387 391 (1%) 346 12% Active users (no. of users) 235,644 203,937 16% 234,034 1% Beforepay revenue ($m) 17.6 14.6 21% 16.1 9% Net transaction margin ($m) 10.1 5.1 99% 6
Slide 9: Strong Growth in Net Transaction Margin Along with Tight Cost Control
Strong Growth in Net Transaction Margin $ Along with Tight Cost Control Net Transaction Margin and Operating Expenses by Half Year Operating Expenses $12.8m $12.6m down 27% to $7.7m in H1 FY24 from 10.6m in H1 FY23. $10.6m $10.1m $8.1m $7.7m $6.6m $5.1m $3.2m Net Transaction Margin up 99% to $10.1m
Slide 10: Total and Average Advances
Total and Average Advances Incremental Growth in Advances Total Advances ($m) Average Advances ($) by Half Year by Half Year +18% (1%) $391 $387 $359m $324m $346 $304m $291 $241 $195m $179 $132m $124 $73m $20m H1-FY21 H2-FY21 H1-FY22 H2-FY22 H1-FY23 H2-FY23 H1-FY24 H1-FY21 H2-FY21 H1-FY22 H2-FY22 H1
Slide 11: Active Users
Active Users 235,644 Active Users or 16% Growth in H1 FY24 +16% Active Users by Half Year 96% 234,034 235,644 203,937 of Active Users who have successfully repaid their first Advance have since taken out a 173,398 second Advance at end of H1 FY24. 139,071 102,671 46,486 Dec-20 Jun-21 Dec-21 Jun-22 D
Slide 12: Declining Trend in Loan Defaults
Declining Trend in Loan Defaults Demonstrating Consistent Improvement in Credit Quality Gross and Net Defaults % by Half Year H1 FY23 H1 H1 FY24 FY24 7.4% 3.2% gross 2.3% net 2.3% gross 1.3% net 7.4% 4.6% 4.6% 3.3% 3.2% 2.9% 3.0% 2.9% 2.3% 2.3% 2.0% 2.0% 1.3% Gross defaults % (of advances inclusive
Slide 13: Funding Costs – Debt Facility
Funding Costs – Debt Facility The short duration of our advances keeps funding costs low. 26 days 15.31% 80% ~87 bps (0.07 years) x Cost of external x Theoretical maximum = Third party funding costs % loan-to-value ratio of external Average duration debt facility based on average duration* debt faci
Slide 14: Direct Service Costs
Direct Service Costs Continue to be Tightly Managed Direct Service Costs per Advance by Half Year H1 FY23 H1 FY24 Direct service costs include the costs in facilitating Advances to customers: data collection, transaction 0.3% of Advances 0.2% of Advances categorisation, direct credit and direct debi
Slide 15: Balance Sheet
Balance Sheet Strong Cash and Equity Position $m H1 FY24 FY23 $ Change % Change Commentary Cash position 18.9 21.8 (2.9) (13%) Reflects timing of issuing advances and customer repayments, as well as drawdown of receivables financing Receivables 46.0 41.8 4.2 10% Reflects growth in loan book and leve
Slide 16: Cash Flow Statement
Cash Flow Statement Operating, Investing and Financing Activities $32.9m H1 FY24 H2 FY23 H1 FY23 Receipts from repayment of customers advances 355.1 328.5 276.5 Receipts of Beforepay income 12.0 3.8 21.3 Payments to suppliers and employees (7.9) (8.3) (10.9) Advances to customers (358.6) (324.1) (30
Slide 17: Our Profitability Model
Our Profitability Model
Slide 18: Our Profitability Model
Our Profitability Model Advances Net transaction Monthly operating per month x margin % ≥ expenses Active users Revenue Monthly overheads x _ + Advances per AU Net defaults Monthly marketing per month expense x _ Average advance Funding costs _ Direct costs © Beforepay Group Ltd | All Rights Reserve
Slide 19: NTM & Profit/(Loss) by Half Year
NTM & Profit/(Loss) by Half Year H1 FY24 H2 FY23 H1 FY23 H2 FY22 H1 FY22 Active users (no. of users) 235,644 234,034 203,937 173,398 139,071 Average advance ($) 387 346 391 291 241 Advances ($m) 358.6 324.1 303.9 195.3 132.0 Beforepay revenue* % (of advances) 4.9% 5.0% 4.8% 4.8% 4.4% Net defaults %
Slide 20: Strategy Update
Strategy Update B} Beforepay
Slide 21: Our strategy has been to achieve profitability in our core product and market
Our strategy has been to achieve profitability in our core product and market Q3 – Q4 FY22 “Beforepay will continue to explore international expansion ● We achieved profitability in opportunities, however maintains a current focus on its 1 H1 FY24 ($2.2m NPBT). path to profitability by managing cost
Slide 22: The addressable market continues to be significant
The addressable market continues to be significant… Active user growth Market penetration 235,644 234,034 5,300,000 203,937 173,398 139,071 102,671 46,486 235,644 H1-FY21 H2-FY21 H1-FY22 H2-FY22 H1-FY23 H2-FY23 H1-FY24 Active Users Employed population in Australia, ages 20-54, without extensive savi
Slide 23: Strong competitive advantages to drive the next phase of growth
…and we have strong competitive advantages to drive the next phase of our growth A low direct cost base A proprietary data asset supported by highly of more than 1.3 billion rows automated, highly efficient and more than 4 million origination and servicing advances issued to date systems, and lean o
Slide 24: Potential opportunities: partner-based and product expansion
Potential opportunities: Our risk capabilities and platform enable geographic and product expansion Rest of Additional products in Australia World 1 Partner-based • Larger, longer-dated loans. international expansion America • Alternative pricing models and North structures. • Custom risk models for
Slide 25: Our strategy – now and next steps
Our strategy – now and next steps Underway/start now Next steps after that Replatform our business Start product experimentation 1 1 Upgrade and extend our lending platform to Test different loan durations and sizes, support a wider range of products and to enable starting adjacent to our current pr
Slide 26: What you'll see when
What you’ll see when FY24: Preparation FY25: Launch phase and Build phase • Start with additional domestic • Expect moderate cost increases products. as we ramp up and replatform. • Growth rate is unknown and • Progress important milestones depends on results of required for launch. experimentation
Slide 27: Q&A
Q&A
Slide 28: Thank You
Thank You
Slide 29: Appendix
Appendix
Slide 30: H1 FY24 Management Profit & Loss (P&L)
H1 FY24 Management Profit & Loss (P&L) A$, unless otherwise stated H1 FY24 A$, unless otherwise stated H1 FY24 Beforepay revenue 17,635,458 EBITDA, excluding one-off and/or significant items 4,244,438 Gross defaults (8,609,586) Gross % (of advances inclusive of fees) (2.3%) Depreciation & amortisati
Slide 31: H1 FY24 NTM Reconciliation to Statutory P&L
H1 FY24 NTM Reconciliation to Statutory P&L Management P&L – Revenue to Net Transaction Margin Statutory Profit and Loss A$, unless otherwise stated H1 FY24 Reference to Statutory A$, unless otherwise stated H1 FY24 Profit and Loss Beforepay revenue 17,635,458 Revenue 1 Beforepay income Beforepay in
Slide 32: H1 FY24 EBITDA Reconciliation to Statutory P&L
H1 FY24 EBITDA Reconciliation to Statutory P&L Management P&L – Net Transaction Margin to EBITDA Statutory Profit and Loss A$, unless otherwise stated H1 FY24 A$, unless otherwise stated H1 FY24 Reference to Net transaction margin 10,061,384 Statutory Profit Revenue and Loss Net transaction margin %
Slide 33: Glossary
Glossary Term Definition Term Definition Active Users A customer of Beforepay, who has taken out an advance in the Customer Advertising and marketing expenses attributable to customer previous 12 months from the date of the relevant information. Acquisition Costs acquisition divided by the number of
Slide 34: Glossary
Glossary Term Definition Term Definition Finance Costs Finance costs are related to the debt facility with Longreach Net Defaults Actual and expected credit losses (net of recoveries). It comprises Credit investors and Balmain Group (Lenders ) and interest on customer defaults plus current advances
Slide 35: Glossary
Glossary Term Definition Term Definition Operating Expenses The sum of all expenses less one-off and/or significant items, Third-Party Debt The third-party debt facility agreement with Australian Commercial net defaults, direct costs, finance costs, and depreciation and Facility Mortgage Corporation
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