Plenti Group Ltd. · ASX:PLT
Plenti — FY2023 Earnings Presentation
34 slides from Plenti's earnings presentation, May 24, 2023
Slide 1: FY23 Results Presentation
ASX RELEASE Plenti Group Limited (ASX:PLT) Authorised for release by the Board of Plenti Group Limited For more information please contact: Daniel Foggo, CEO, shareholders@plenti.com.au Miles Drury, CFO, shareholders@plenti.com.au FY23 Results Presentation Year to 31 March 2023
Slide 2: Who are we
Who are we Plenti is a technology-led lender We are on a mission • We are Australia’s largest fintech Purpose consumer lender To bring our customers’ big ideas to life • We are Cash NPAT profitable • We deliver market leading customer Vision experiences via our proprietary Fairer, faster loans throu
Slide 3: Highlights
Highlights Operational Performance Financial Priorities and Outlook Results
Slide 4: FY23 highlights
FY23 highlights Another successful year operationally and financially Key highlights Originations Loan portfolio Revenue Cash NPAT $1.1bn $1.8bn $143m $4.5m +3% yoy +36% yoy +62% yoy $4.0m improvement 90+ arrears Retail platform $300m personal and Innovative 42 bps investment markets green loan ABS
Slide 5: Growth
Growth Our loan portfolio continued to Loan portfolio ($bn) grow strongly 1.8 1.6 Loan portfolio YOY growth 1.4 36% 1.2 72% 3-year CAGR Loan portfolio 3-year CAGR 1.0 72% 0.8 0.6 Cumulative lending since launch $3.5bn 0.4 0.2 0.0 FY18 FY19 FY20 FY21 FY22 FY23 5
Slide 6: Profitability
Profitability Our strong revenue growth drove robust Cash NPAT growth in FY23, despite a substantial increase in funding costs Revenue ($m) Cash NPAT ($m) 140 10 120 5 100 51% 3-year CAGR 0 80 60 (5) 40 Technology investment fully (10) expensed ($10.4m in FY23) 20 0 (15) FY18 FY19 FY20 FY21 FY22 FY2
Slide 7: Short-term objectives
Short-term objectives We delivered on our 2H23 objectives Objectives for 2H23 Achievements in 2H23 Growth Reach $1.75bn loan portfolio by 31 March 2023 Achieved – loan portfolio $1.77 billion at 31 March 2023 Profitability Achieve robust Cash NPAT growth in 2H23 Achieved – 125% increase in Cash NPAT
Slide 8: Competitive strengths
Competitive strengths Our competitive strengths continued to underpin our overall performance • Entrepreneurial, founder-led team with long term commitment People • Significant breadth and depth of expertise • Modern, end-to-end platform delivers speed, flexibility and efficiency Proprietary technol
Slide 9: Operational Performance
Highlights Operational Performance Financial Priorities and Outlook Results
Slide 10: Automotive finance
Automotive finance We continued to build out our automotive capabilities and distribution FY23 highlights Automotive loan book ($m) Automotive lending opportunity • Drove NIM recovery following funding cost 1,000 $35bn+ increases • Grew commercial loan originations 211% annual lending – Stronger cre
Slide 11: Renewable energy finance
Renewable energy finance We accelerated our renewable finance growth and entered significant strategic partnerships FY23 highlights Renewable energy loan book ($m) Renewables finance opportunity • Strong growth in loan book 200 • Launched innovative GreenConnect platform – Brings together energy ret
Slide 12: Personal lending
Personal lending We continued to attract customers and partners to our leading digital personal loan offering in a fragmented market FY23 highlights Personal loan book ($m) Personal lending market opportunity • Substantial uplift in direct-to-consumer 600 $12bn+ resourcing and team capabilities – 51
Slide 13: Technology advancements
Technology advancements Our technology advancements allow us to continually raise the bar for lending in Australia GreenConnect platform build & launch Extended EV partner integration Increased decisioning automation 1. Growth 1. Growth 1. Growth 2. Efficiency 2. Impact 2. Efficiency 3. Credit perfo
Slide 14: Operating leverage
Operating leverage We continued to demonstrate the benefits of our scale and our technology-led efficiency Cost-to-income Cost-to-loan originations Average loan portfolio per FTE ($m) 100% 10% 10 8% 8 75% 6% 6 50% 4% 4 25% 2% 2 0% 0% 0 FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21
Slide 15: Credit performance
Credit performance We continued to demonstrate our differentiated credit performance Average customer credit score 90+ days arrears Net loss rate – quarter annualised 850 1.0% 2.5% 800 0.8% 2.0% 750 0.6% 1.5% 700 0.4% 1.0% 650 0.2% 0.5% 600 0.0% 0.0% • Very high weighted average credit scores • 90+
Slide 16: Financial Results
Highlights Operational Performance Financial Priorities and Outlook Results
Slide 17: Financial highlights
Financial highlights We grew Cash NPAT by $4.0m to $4.5m through loan portfolio growth, effective margin strategy and cost management Loan portfolio • 67% increase in average portfolio on pcp to $1.55bn Growth Revenue • 62% revenue growth to $143.5m Cash NPAT • Cash NPAT of $4.5m despite funding cos
Slide 18: Margins
Margins We successfully increased borrower rates to restore net interest margins Effective yield (%) Commentary • Net interest margin (NIM) for FY23 was 5.2%, with 1H23 and 2H23 at 5.3% and 5.2% respectively – Down on FY22 NIM of 6.0%, primarily due to margin compression from 12.0% rapid increase in
Slide 19: Credit
Credit We delivered strong credit outcomes in FY23 although, as expected, credit losses have adjusted upwards from the lows of recent years Realised loan impairment expense (%) Commentary • Credit losses remained at relatively low levels in FY23, reflecting the credit strength of Plenti’s portfolio
Slide 20: Profit & loss
Profit & loss We grew revenue strongly and controlled costs leading to a material increase in Cash NPAT to $4.5m • Full year Cash NPAT result of $4.5m, an increase of $4.0m on prior year $m, year ending 31 Mar FY22 FY23 % change • Growth in Cash NPAT reflected 62% growth in revenue with operating co
Slide 21: Funding
Funding We continued to expand and deepen our funding Loan portfolio funding ($m)1 Loan portfolio and corporate funding • Plenti now established as recognised programmatic issuer in debt capital markets – Two ABS transactions undertaken in the year for a total of ~$740m 234 Warehouse headroom – Tran
Slide 22: Priorities and Outlook
Highlights Operational Performance Financial Priorities and Outlook Results
Slide 23: Priorities
Priorities We have set ambitious but achievable priorities for FY24 FY24 full year priorities • Drive solid growth in loan originations and loan portfolio Growth • Grow revenue to over $200m Profitability • Deliver robust full year Cash NPAT growth, skewed towards 2H24 • Reduce cost-to-income ratio
Slide 24: Outlook half-on-half
Outlook half-on-half We expect to achieve continued growth in loan portfolio and profitability, with Cash NPAT generation skewed towards 2H24 First half (1H24) expectations • Growth in loan originations and loan portfolio • Positive Cash NPAT, although impacted by: ˗ Higher direct-to-consumer market
Slide 25: Our scale cost-benefit ambition
Our scale cost-benefit ambition Our ambition is to achieve a $25m cost-benefit as we double our loan portfolio to $3bn Estimated cost base as loan portfolio doubles ($m) Cost benefits of scale • Technology-led model allows loan portfolio growth to exceed cost base growth • $25m+ cost-benefit ambitio
Slide 26: Appendices
Plenti Appendices
Slide 27: Cash flow
Cash flow We moved to delivering positive operating cashflow in FY23 $m FY22 FY23 • Statutory operating cashflow for FY23 of $20.6m, compared with an outflow of $3.9m in FY22 Operating cash flow – Includes $2.3m Provision Fund cash inflow Interest income received 97.4 153.0 – Includes net $9.8m of m
Slide 28: Balance sheet
Balance sheet We continue to effectively expand our funding base and recycle capital to support growth • Corporate cash position at 31 March 2023 of $27.8m $m 31-Mar-22 31-Mar-23 – $10.0m relates to loan collection accounts which are not available for Assets corporate activities (31 March 2022: $8.1
Slide 29: Half-on-half summary P&L
Half-on-half summary P&L $m, 6 month periods 1H211 2H21 1H22 2H22 1H23 2H23 1H22 / 2H21 2H22 / 1H22 1H23 / 2H22 2H23 / 1H23 Interest revenue 23.9 26.8 36.6 50.6 63.2 78.9 37% 38% 25% 25% Other income 2.1 0.4 0.6 0.6 0.6 0.8 65% 10% (7)% 31% Total revenue pre transaction costs 26.0 27.2 37.2 51.3 63.
Slide 30: Key metrics
Key metrics $m H1 FY21 H2 FY21 H1 FY22 H2 FY22 H1 FY23 H2 FY23 FY21 FY22 FY23 Loan originations ($m) 167.0 303.3 472.8 629.5 558.2 572.8 470.3 1,102.3 1,131.0 Average term of new originations (months) 62.5 61.8 64.8 65.0 64.6 64.2 62.1 64.9 64.4 Closing loan portfolio ($m) 435.1 614.6 915.1 1,299.7
Slide 31: Lending vertical metrics
Lending vertical metrics $m H1 FY21 H2 FY21 H1 FY22 H2 FY22 H1 FY23 H2 FY23 FY21 FY22 FY23 Loan originations ($m) 167.0 303.3 472.8 629.5 558.2 572.8 470.3 1,102.3 1,131.0 Automotive 81.1 149.7 257.7 381.6 302.3 269.3 230.8 639.3 571.7 Renewable energy 28.5 28.7 46.3 51.9 52.6 69.4 57.2 98.3 122.0 P
Slide 32: NPAT to Cash NPAT reconciliation
NPAT to Cash NPAT reconciliation $m 1H211 2H21 1H22 2H22 1H23 2H23 FY21 FY22 FY23 NPAT (3.4) (8.5) (7.5) 1.2 2.6 (16.2) (11.9) (6.3) (13.6) Add: ECL provision expense2 1.0 2.2 3.6 3.8 4.2 10.1 3.1 7.4 14.3 Add: Share-based payments 0.6 0.9 1.2 1.6 1.4 1.9 1.4 2.8 3.4 Add: Depreciation & amortisation
Slide 33: Disclaimer and important notices
Disclaimer and important notices No recommendation, offer, invitation or advice The material in this presentation is general background information about Plenti Group Limited (the Company) and its subsidiaries, and is current at the date of the presentation, 24 May 2023 The information in this prese
Slide 34: Plenti
Plenti