Credit Corp Group Limited · ASX:CCP
Credit — Shareholder Meeting (November 2019)
21 slides from Credit's shareholder meeting presentation, Nov 4, 2019
Slide 1: For personal use only
For personal use only
Slide 2: For personal use only
For personal use only
Slide 3: Leadership in the credit-impaired consumer segment
of Leadership in the credit-impaired consumer segment ... credit corp ‘Group +Long-term growth *ROE 16% - 18% + Low gearing ANALYTICS & DISCIPLINE OPERATIONAL EXCELLENCE SUSTAINABILITY & COMPLIANCE Australian / NZ debt buying + Largest database « Highest asset turnover * + No adverse orders or under
Slide 4: ...has delivered sustained growth and returns...
— ...has delivered sustained growth and returns... For personal use only Credit Corp Group NPAT and Return on Equity $ 85m 30% $ 70m 25% pee NPAT CAGR 21% 1 $55m o 20% $ 40m 15% $ 25m 10% ‘ “ ti i ll . ($ 5m) - FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 mum Total NP
Slide 5: ...while positioning CCP to seize opportunity across all segments
...while positioning CCP to seize opportunity across all segments cS | seoment | Manet . “ss Aus/NZ debt buying Increased issuer compliance sensitivity Competitors showing signs of stress Reduced capital availability to sector Credit Corp positioning Further reduction in EDR ‘ complaint rate in FY20
Slide 6: Continued step-up in investment...
— Continued step-up in investment... Greate comp stow + Baycorp and recent Aus/NZ debt buying wins mark a return to core business investment growth + Strong growth in US debt buying and net lending PDL investment and net lending $ 450m $ 400m $ 350m @ Net lending $ 300m $ 250m $ 200m = Baycorp $ 150
Slide 7: ...and substantial capital headroom to fund a further step-up in investment...
... and substantial capital headroom to fund a further step-up in investment ... of Credit Corp Group Facility headroom and gearing $ 400m $ 350m $ 300m $ 250m $ 200m $ 150m $ 100m $ 50m FY2017 FY2018 FY2019 Oct 2019 1 mm Net borrowings mmm Total facilities —-++++++ Gearing % 50% 40% 30% 20% 10% 4.
Slide 8: The Baycorp acquisition is on track ...
cS The Baycorp acquisition is on track ... Credit Corp Group + Business case financial outcomes are on track to be achieved + Integration progressing ahead of pro-forma: - Annualised cost savings of $11m achieved - Majority of purchased debts now migrated to CCP operation - Both Aus and NZ agency op
Slide 9: ... and is contributing to a strong operational performance
of ... and is contributing to a strong operational performance Credit Corp Group + Total cumulative collections above aggregate pricing expectations + Productivity up by 8% over the pcp ' + Total collections up 17% over the pcp ' + Aus/NZ collections tracking at record levels, 9% over the pcp * (Ref
Slide 10: Continued lending growth ...
of Continued lending growth ... Credit Corp Group + Despite unexpectedly strong growth in the prior year: - Total settlements up by 14% over pcp ' - Newcustomer settlements up 6% over pcp ' + Strong consumer proposition supports customer acquisition and retention 2 Customer settlements ($m) $ 80m $
Slide 11: ...and the auto loan pilot is progressing strongly
— ..and the auto loan pilot is progressing strongly Credit Corp Group Auto volumes up by over 72% on the pep * - Finance-only product now accounts for half of volume - Arrears and losses trending satisfactorily Auto lending customer settlements ($m) $5m $4m $3m YTD Oct-18 YTD Oct-19 For personal use
Slide 12: US debt buying market remains a substantial opportunity ...
— US debt buying market remains a substantial opportunity ... Credit Corp Group Market conditions remain favourable: - Nosigns of pricing pressure despite growing competitor purchasing ' - Continued growth in unsecured credit and charge-off rates * — Significant opportunity for CCP to grow from a po
Slide 13: ... and expanding productive capacity is allowing investment to step up ...
... and expanding productive capacity is allowing investment to step up ... — Credit Corp Group Salt Lake City site is now at practical capacity of ~400 heads Second office located near Seattle, WA with ultimate capacity of ~300 seats opened in October Investment run-rate reflects >A$100m of annuali
Slide 14: ... producing a strong earnings outlook for the US
— ... producing a strong earnings outlook for the US credit corp ‘Group + Earnings will grow >50% in FY2020 despite the impact of rapid recruitment and the new office opening + Afurther step-up in earnings growth expected for FY2021 US NPAT (A$m) $ 10m $ 8m LO $6m | ($ 2m) FY2016 FY2017 FY2018 FY201
Slide 15: Guidance of 15% to 18% growth in NPAT maintained
Guidance of 15% to 18% growth in NPAT maintained — Credit Corp Group = < ‘e) Revised guidance @ Aug 2019 - PDL acquisitions $300 - $320m ici Net lending $60 - $65m = ©) NPAT $81 - $83m ) @ EPS (basic) 149 - 151 cents or = oe) LL Credit Corp Group FY20 Performance Update | 15
Slide 16: Appendix | Key operating metrics
Fompersonal use only Appendix | Key operating metrics c— Credit Corp Group Credit Corp Group FY20 Performance Update |
Slide 17: Appendix A | Pricing discipline and accuracy
— Appendix A | Pricing discipline and accuracy Credit Corp Group Pricing discipline and accuracy Cumulative collections $ 3,500m Actual cash $ 3,000m collections $ 2,500m $ 2,000m $ 1,500m $ 1,000m $ 500m FESS ESP SS SAP SS oS EP CSS SF oe Pe SKF FF FF FF KF yi F FF vi i yV & VV F&F Xe * For all PDL
Slide 18: Appendix B | Collections life cycle
— Appendix B | Collections life cycle For personal use onl Credit Corp Group PDL collections by vintage $ 140m 417%" $ 120m ee $ 100m 32% 30% 31% som | sox 31% 32% 33% «= 32% «= 20% 30% 30% 32% 32% $ 60m $ 40m $20m a1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 4 months Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-1
Slide 19: Appendix C | Productivity
Appendix C | Productivity — Credit Corp Group PDL collections per hour $ 300 $ 250 es Bereeeeees © $ 200 $ 150 $ 100 Nov Dec Jan Jul Aug Sep Oct YTD Oct-2019 average FY2020: $256 FY2019: $236 sees 12m to Oct 18 —— 12m to Oct-19 For personal use onl Credit Corp Group FY20 Performance Update | 19
Slide 20: Appendix D | Payers base
Appendix D | Payers base — Credit Corp Group Portfolio summary - Aus/NZ debt buying only 5 Total portfolio Dec-17 Jun-18 Dec-18 Jun-19 Oct 19 Face value $5.9b $6.0b $6.2b $6.4b $7.9b =) Number of accounts 710,000 710,000 753,000 786,000 1,292,000 @ WY Face value $1,300m $1,300m $1,300m $1,300m $1,40
Slide 21: Appendix E | Superior consumer lending proposition
Appendix E | Superior consumer lending proposition — Credit Corp Group * Most sustainable product in the segment - Priced below mainstream pricing cap - Cheaper than competitors - Cheaper than not for profit alternative Unaffected by recommendations from recent senate inquiry Price 4 Credit Corp che
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