Cash Converters International Limited · ASX:CCV
Cash Converters International — CommSec 2007 Emerging Companies Conference
45 slides from Cash Converters International's conference presentation, Nov 15, 2007
Slide 1: CommSec 2007 Emerging Companies Conference
For personal use only CommSec 2007 Emerging Companies Conference
Slide 2: Our Brand
For personal use only Our Brand
Slide 3: Our Brand
For personal use only Our Brand • Cash Converters is Not an Alternative but a highly unique business – Unique range of solutions for cash requirements – Unique retail trading experience • Major change in positioning is one of tone of personality • Brand of last resort – Brand of choice!
Slide 4: Our Opportunities
For personal use only Our Opportunities • Contemporize our look and feel • Get relevant • Over-come consumer perception barriers • Consolidate the micro-finance business • Establish new ways to interact with consumers • Further complimentary acquisitions
Slide 5: Our Communications
For personal use only Our Communications
Slide 6: First suite of ads
First suite of ads For personal use only Hot Date - Cash Advance Couple - Jewellery Wedding - Secured Loan Big Game - Retail Boyfriend - Buys Rock Concert - Unsecured New Shoes - Loans
Slide 7: Second suite of ads
Second suite of ads For personal use only Hedge - Netball - Cash Retail/Warranty Advance Tuba - Loans Hoops - PFC Jewellery Tradey - Loans Moving in - Buys
Slide 8: Our Look and Feel
For personal use only Our Look and Feel
Slide 9: Look and Feel - communication: Retail Press
For personal use only Look and Feel - communication Retail Press
Slide 10: Look and Feel - communication: Loans Press
For personal use only Look and Feel - communication Loans Press
Slide 11: Look and Feel - uniforms
For personal use only Look and Feel - uniforms
Slide 12: Look and Feel – Old store
For personal use only Look and Feel – Old store
Slide 13: Look and Feel – New store
For personal use only Look and Feel – New store
Slide 14: Look and Feel – New store
For personal use only Look and Feel – New store
Slide 15: Look and Feel – New store
For personal use only Look and Feel – New store
Slide 16: Look and Feel – New store
For personal use only Look and Feel – New store
Slide 17: Look and Feel – New store
For personal use only Look and Feel – New store
Slide 18: Our Culture
For personal use only Our Culture
Slide 19: Our shopping experience
For personal use only Our shopping experience • Contemporary retail space • Professional and friendly service • “The people are really friendly and if you don’t understand anything, like the way to borrow money they’ll break it down and make it easy for you.” Customer comment
Slide 20: Our Customers
For personal use only Our Customers
Slide 21: Our customers
For personal use only Our customers
Slide 22: Our customers
For personal use only Our customers
Slide 23: Our customers
For personal use only Our customers
Slide 24: Legislation
For personal use only Legislation
Slide 25: Legislation
For personal use only Legislation • Regulatory environment – Consumer Credit Review – State regulations limit effective interest rates: • NSW: 48% (includes fees and charges) • Vic: 48% - unsecured, 30% - secured (does not include fees and charges) • WA, Qld & SA – no capping on interest rate – Qld
Slide 26: Why 48% doesn’t work
For personal use only Why 48% doesn’t work • Average loan - $250 • Payback period - 1 month. • $250 loan with 48% cap - $260 paid back in one month (+$10) • Time to process transaction – 30 minutes • Most Basic Wage - $12.30 per hour (not incl rent, holiday pay, training, etc etc) • Labour cost per
Slide 27: Options
For personal use only Options 1. The introduction of a total cost of credit limit – not exceeding the amount borrowed, or 2. The introduction of a 48% cap on interest rates, excluding fees and charges, plus an associated “unreasonableness” test, or 3. The introduction of a 48% cap on interest in con
Slide 28: Recommendations
For personal use only Recommendations A. The introduction of an External Dispute Resolution scheme, and B. The introduction of a self-funded Licensing Scheme, applicable to all Queensland microlenders, and C. The establishment of a Ministerial Liaison Committee, providing the Minister with Consumer
Slide 29: Financials
For personal use only Financials
Slide 30: Cash Advance - MON-E
For personal use only Cash Advance - MON-E • Provides the IT software platform for cash advances <$1,000 to the Cash Converters network • Franchisee charges a fee of 35% of principal loaned • MON-E charges 28% ($9.80) of this fee, MON-E pays area managers 10% ($0.98) to service franchise network • C
Slide 31: Cash Advance – MON-E & Quickdraw
For personal use only Cash Advance – MON-E & Quickdraw Key Statistics FY 2005 FY 2006 FY 2007 Total No. of Loans 281,000 440,000 486,000 Total No. of customers 93,000 154,000 202,300 Total Value of Loans $68.6m $103.3m $124.6m Group commissions received $2.7m $3.9m $8.0m
Slide 32: Personal Loans – Safrock Finance
For personal use only Personal Loans – Safrock Finance • Provides secured and unsecured loans using Cash Converters franchisees as its agent • Core product are unsecured loans: – Current active loans 10,160 – Current loan book $13.0m – Average loan $1,500 • Fees on average loan: – Establishment fee
Slide 33: Company Transforming
For personal use only Company Transforming • Transformed company FY 2006 EBIT Contribution – Australia – 134 stores Cash – UK – 122 stores Advance Personal Loans 3% – Other – 226 sub- 50% franchised stores Franchise 47% • Three key divisions going forward: – Safrock Finance FY 2007 EBIT Contribution
Slide 34: Franchise Consolidation
For personal use only Franchise Consolidation
Slide 35: Franchise Consolidation
For personal use only Franchise Consolidation • Franchise consolidation simply means buying back the franchised stores • Franchising allowed Cash Converters to harness the collective capital of over 500 franchisees to develop a global brand and extensive shop front network • The consolidation strate
Slide 36: Franchise Consolidation: Store ownership
For personal use only Franchise Consolidation Store ownership • Delivers increased earnings • Greater control of the brand • Opportunity to develop new products and services • Control the implementation of new products and services • Spread risk
Slide 37: Size Of The Opportunity
For personal use only Size Of The Opportunity
Slide 38: Size of the Opportunity: CC Australia stores
For personal use only Size of the Opportunity CC Australia 135 stores • Combined retail sales $91.8 m • Total pawn broking loans per annum $62.7 m • Total MON-E principal lent per annum $144.2 m • Total loan numbers per annum 563,215 • Total Safrock principal lent per annum $22.3 m • Total loan numb
Slide 39: Size of the Opportunity: CC UK Stores
For personal use only Size of the Opportunity CC UK 125 Stores • Combined retail sales $104.9 m • Total pawn & buyback loans per annum $66.8m • Total cheques cashed $248.5 m • Total log book principal lent per annum $12.7 m • Total over the counter buys per annum $28.8 m
Slide 40: Estimated Annual EBIT of Franchised Networks
For personal use only Size of the Opportunity Estimated Annual EBIT of Franchised Networks Cash Converters UK $43.12 m Cash Converters Australia $54.14 m Total $97.56 m
Slide 41: Implementation Strategy
For personal use only Implementation Strategy
Slide 42: Implementation Strategy: Background
For personal use only Implementation Strategy Background • CCIL acquired 5 franchised stores in the UK in July 2007 and 8 franchised stores in the in Victoria in October 2007 • Total consideration $15.9m • Total EBIT contribution $3.3m • Total assets acquired $6.1m • Average PE on EV equals 4.8 • Br
Slide 43: Implementation Strategy
For personal use only Implementation Strategy • The company will continue to open new franchised and company owned stores in both Australia and the UK to maintain its competitive advantage • In addition the Company intends to buy back as many franchised stores as are available in the short to medium
Slide 44: Implementation Strategy
For personal use only Implementation Strategy • Based upon our experience with the acquisition of 13 stores in the first half of 07, we expect to pay a multiple in the order of 3 to 4 times EV to acquire stores going forward • Acquisitions will be funded by a combination of debt and capital dependin
Slide 45: We thank you, are there any questions about CCV?
For personal use only We thank you, are there any questions about CCV?
Cash Converters International — CommSec 2007 Emerging Companies Conference on 6ix