Propel Holdings, Inc. · TSX:PRL
Propel — Investor Presentation (November 2024)
36 slides from Propel's investor presentation, November 2024
Slide 1: Investor Presentation
TSX:PRL Investor Presentation November 2024 1
Slide 2: Disclaimer
Disclaimer FORWARD-LOOKING INFORMATION Certain statements made in this press release may constitute forward-looking information under applicable securities laws. These statements may relate to our 2024 Operating and Financial Targets, our profitable growth prospects, our dividend, our ability to pro
Slide 3: Building a new world of financial opportunity
Building a new world of financial opportunity INVESTOR PRESENTATION Q3 2024 CONFIDENTIAL 3
Slide 4: We Enable Credit to Underserved Consumers
US$1.9+ Billion in Credit Facilitated¹ We Enable Credit to US$416 Million Underserved Consumers LTM Revenue2 Traditional financial institutions rely on credit scores, but that locks out millions of everyday consumers >970,000 We are changing that through our proprietary AI-powered Consumers Served3
Slide 5: Investment Highlights
Investment Highlights Innovative, Consumer Fintech transparent products lending platform AI-powered tech and services, serving the US and platform unlocking including 3 bank Canadian markets credit opportunity programs and 2 Lending as a Service partnerships Experienced and Profitable, scalable Quar
Slide 6: Our Mission
Mission Our Mission Inclusion Evolution Experience Every individual Committed to giving Provide a best-in- deserves access to credit consumers the potential to class consumer experience evolve to better credit products over time CONFIDENTIAL 6 INVESTOR PRESENTATION Q3 2024 CONFIDENTIAL 6
Slide 7: Financial Inclusion for the Underserved Consumer
Financial Inclusion for the Underserved Consumer ~70 Million 37% 54% $1 Trillion + USD Estimated size of US U.S. adults are unable Canadians say they’re Estimated size of + Canada underserved to afford a $400 living paycheque to Global fintech lending market1 emergency expense2 paycheque3 market4 In
Slide 8: Propel Today
Propel Today Highly profitable, diversified and scalable business with significant growth opportunity 100% online At Scale Profitable YTD 2024 Fiscal 2023 US$1.9B+ ~15.9M US$ in originations1 unique applications Revenue $320.4M $316.5M per year2 Net Income $34.8M $27.8M ~1.3M ~66,000 Adj. Net Income
Slide 9: Our Products
Our Products INVESTOR PRESENTATION Q3 2024 CONFIDENTIAL 9
Slide 10: Products and Services
Products and Services Product/Service Geography Served Loan Amount Range USD $500-$3,500 USD $500-$5,000 CAN $1,000-$10,000 USD $1,000-$8,000 Direct Lender Bank Program Direct Lender Operating Structure Credit Services Lending-as-a-Service Lending-as-a-Service Embedded Lending Bank Program Installme
Slide 11: Putting Customers First
Putting Customers First Consistently Lowered Cost of Credit Over Time Over the last two years, the cost of credit of products offered through the Propel platform have been reduced by half. “It was so simple, easy and quick. Within 24 hours, I got accepted and had access to Graduation Programs a line
Slide 12: Acquisition of QuidMarket
Acquisition of QuidMarket INVESTOR PRESENTATION Q3 2024 CONFIDENTIAL 12
Slide 13: The Right Acquisition For Propel's Growth
The Right Acquisition For Propel’s Growth Propel announced the acquisition of QuidMarket for US$71 million on September 26, 2024 with an expected close in Q4 2024 or Q1 2025 Financially Accretive Jurisdiction Culture (LTM @ Sep-24) UK GAAP ~20M Launched in 2011 US$29.7M Purpose-driven to empower LTM
Slide 14: QuidMarket Historical Financials
QuidMarket Historical Financials Expected to be immediately accretive, with further upside by utilizing Propel’s technology, AI and operating capabilities Revenue1 Net Income and Margin1 (US$M in UK GAAP) US$M (US$M in UK GAAP) US$M CAGR of 44% CAGR of 45% $29.7 34.7% 34.9% 31.6% $22.6 $10.4 $15.6 $
Slide 15: Proven Operator With High Growth Potential
Proven Operator With High Growth Potential QuidMarket is one of the largest and fastest growing UK consumer lenders with the opportunity to unlock further growth through Propel’s proprietary tech, AI underwriting and capital Business & Products Operations Technology Trusted Direct Lender Tenured Tea
Slide 16: Our Platform
Our Platform INVESTOR PRESENTATION Q3 2024 CONFIDENTIAL 16
Slide 17: Industry-Leading Proprietary Technology
Industry-Leading 90% of applications auto-decisioned Proprietary Technology 96% of ad hoc card payments made online Three Major Subsystems Open Architecture AI-Powered Acquisition + Integrates easily and securely with: 100+ Person In-House 1 Tech team Underwriting Engine • 30 marketing partners & Lo
Slide 18: Looking Beyond Traditional Credit Scores
Looking Beyond Traditional Credit Scores Traditional financial institutions rely on credit scores, Employment Data but that locks out millions of everyday consumers Consumer Behaviour Income Verification We use AI to build our own risk score --- and can use Consumer Verification Data up to 5,000 dat
Slide 19: Driving Growth While Managing Risk
Driving Growth While Managing Risk Credit Performance Remains Strong and Stable While Loan Balances Grow Substantially $450,000,000 20.0% $400,000,000 18.0% Fund More 16.0% $350,000,000 Consumers 14.0% $300,000,000 12.0% $250,000,000 10.0% $200,000,000 Manage Risk 8.0% $150,000,000 6.0% $100,000,000
Slide 20: Best-in-Class Operations + Customer Service
Best-in-Class Operations + Customer Service 300+ 7 days strong operations team across 2 a week live agent service centralized locations Serving customers with urgency, 24/7 “ Excellent 4.4+ Ratings respect and online platform exceptional customer service The application process was simple and quick.
Slide 21: Financial Performance
Financial Performance INVESTOR PRESENTATION Q3 2024 CONFIDENTIAL 21
Slide 22: Robust Loan and Revenue Growth
Robust Loan and Revenue Growth Loans and Advances Receivable Ending Combined Loan and Advance Revenue Balances* US$M US$M $432.3 US$M $350.00 $333.0 $337.3 $316.5 $320.4 $300.00 $259.3 $250.00 $226.9 $195.6 $247.5 $220.5 $200.00 $150.00 $134.8 $129.6 $117.2 $103.8 $100.00 $73.5 $83.2 $49.8 $62.6 $50
Slide 23: Stability and Scalability of Business Model
Stability and Scalability of Business Model Q3 2024 Provision % Revenue constant and Net Provision for loan losses and other liabilities (“Provision”) and Net Charge-offs Charge-offs as % of Avg. CLAB declined from Q3 2023 as % of Average CLAB* • Reflects ongoing strong credit performance driven by
Slide 24: Generating Strong Profitability
Generating Strong Profitability Net Income Adjusted Net Income* Adjusted EBITDA* US$M US$M US$M $34.8 $45.0 $88.9 $27.8 $36.1 $76.3 $19.3 $25.4 $53.9 $15.1 $20.4 $40.8 $10.5 $12.9 $14.1 $25.4 $29.0 $7.3 $6.6 $6.2 $9.2 $8.5 $20.0 $18.7 2020 2021 2022 2023 Q3 2023 Q3 2024 YTD Q3 YTD Q3 2020 2021 2022
Slide 25: Focus on Maximizing Shareholder Returns
Focus on Maximizing Shareholder Returns Return on Equity Adjusted Return on Equity* Continued earnings growth leading to strong ROE and Adj. ROE* and ability to raise dividend 40% 52% 30% 34% 29% 40% 45% • Company’s operating cash flow and debt 37% 38% 27% 36% capacity sufficient to grow business 19
Slide 26: Solid Financial Position
Solid Financial Position • Company well-funded for • Approximately $117 million in Credit Capacity (in US$M) continued growth, new undrawn credit capacity as strategic initiatives and to of September 30, 2024 support increased dividend • Debt: equity 2.0x as $117.1M • Upsized CreditFresh facility by
Slide 27: Growth Outlook: FY2024 Operating and Financial Targets
Growth Outlook: FY2024 Operating and Financial Targets Ending Revenue Adjusted Net Income Adjusted Net Return on Adjusted Combined (US$) EBITDA Margin Income Equity*** ROE** Loan and Margin** Margin** Advance Balances*, ** 25% - $410M - 24% - 9.5% - 11.75% - 30%+ 40%+ 35% $450M 29% 12.5% 14.75% 2023
Slide 28: Growth Strategy
Growth Strategy Serving lower risk Graduating Geographic Adjacent products markets consumers up the expansion credit spectrum Extension of existing Continue to graduate Expansion into Design, deliver and product suite into near- existing clients to new new states/provinces, cross-sell prime market a
Slide 29: The immediate response and service were great. During an emergency time of need it
The immediate response and service were great. During an emergency time of need it was a great relief for fast response. The online application was appreciated and easy. Thank you. INVESTOR PRESENTATION Q3 2024 CONFIDENTIAL 29
Slide 30: Welcome to a new world of financial opportunity
Over a million loans facilitated. Over a billion dollars in lending. Welcome to a new world of financial opportunity. INVESTOR PRESENTATION Q3 2024 CONFIDENTIAL 30
Slide 31: Appendix
Appendix INVESTOR PRESENTATION Q3 2024 CONFIDENTIAL 31
Slide 32: Non-IFRS Measure Reconciliation
Non-IFRS Measure Reconciliation Three months ended September 30, Nine months ended September 30, Year Ended December 31, US$ 2024 2023 2024 2023 2023 2022 2021 2020 Net income 10,521,257 6,171,961 34,766,689 19,292,237 27,776,133 15,127,447 6,562,442 7,332,388 Interest on Debt 8,401,947 5,943,899 23
Slide 33: Non-IFRS Measure Reconciliation
Non-IFRS Measure Reconciliation Three months ended September 30, Nine months ended September 30, Year Ended December 31, US$ 2024 2023 2024 2023 2023 2022 2021 2020 Net income 10,521,257 6,171,961 34,766,689 19,292,237 27,776,133 15,127,447 6,562,442 7,332,388 Transaction and Financing Costs net of
Slide 34: Non-IFRS Measure Reconciliation
Non-IFRS Measure Reconciliation As at September 30, As at December 31, US$ 2024 2023 2023 2022 2021 2020 Ending Combined Loan and Advance balances1 432,273,487 299,374,790 337,282,804 247,488,344 134,843,170 62,643,735 Less: Loan and Advance balances owned by third party lenders pursuant to CSO prog
Slide 35: Non-IFRS Measure Reconciliation
Non-IFRS Measure Reconciliation Three months ended September 30, Nine months ended September 30, Year Ended December 31, US$ 2024 2023 2024 2023 2023 2022 2021 2020 Charge-offs 50,264,599 38,250,714 142,605,299 111,206,601 (148,955,126) (109,981,529) (46,898,488) (26,059,774) Recoveries (6,167,864)
Slide 36: Building a new world of financial opportunity.
Building a new world of financial opportunity. INVESTOR PRESENTATION Q3 2024 CONFIDENTIAL 36
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