Credit Corp Group Limited · ASX:CCP
Credit — H1 FY2025 Earnings Presentation
22 slides from Credit's earnings presentation, Jan 30, 2025
Slide 1: H1 FY2025 Results
30 January 2025 Hl FY202 Results THOMAS BEREGI MICHAEL EADIE Chief Executive Officer Chief Financial Officer
Slide 2: Leadership of the credit impaired consumer segment…
Leadership of the credit impaired consumer segment… Analytics and discipline Operational excellence Responsibility & compliance US DEBT BUYING • Large market opportunity • Significant productive capacity • Low regulator complaint rate TARGET • Diversified purchasing across across several sites Long
Slide 3: …has produced performance in line with expectation…
…has produced performance in line with expectation… Expectation Outcome US debt buying • Establish competitive platform for growth • Continued operational improvement • Stand-alone local leadership in place • Re-focus of purchasing on “faster-collecting” assets Australian / NZ lending • Moderated Wa
Slide 4: …and financial results on track with full year guidance
…and financial results on track with full year guidance H1 FY24 H1 FY25 Var % Australian / NZ debt buying and collection services $118.3m $115.0m (3%) US debt buying (pre-impairment) 1 2 $54.7m $58.3m 15% Australian / NZ lending $82.0m $98.2m 20% Revenue total $255.0m $271.5m 6% Australian / NZ debt
Slide 5: US operational outcomes continue to build…
US operational outcomes continue to build… • Collections growth despite 24 months of reduced investment and no improvement in conditions • Operational improvement initiatives have focused on: - Improving purchasing competitiveness - Establishing the capacity to grow collections without increasing he
Slide 6: …enabling sustained investment
…enabling sustained investment • US investment linked to operational improvement • On track to secure at least $150 million of US purchasing during FY25 • >80 per cent of US purchasing comprised of shorter-duration credit cards PDL Investment Volume ($m) 450 375 300 FY25 purchasing guidance 225 $200
Slide 7: Consumer loan book growth has moderated…
Consumer loan book growth has moderated… • Wallet Wizard new customer volume has stabilised Lending Volumes ($m) Consumer Lending Book and Annualised Revenue ($m) 250 500 200 400 150 300 100 200 50 100 - - H2 FY22 H1 FY23 H2 FY23 H1 FY24 H2 FY24 H1 FY25 H2 FY22 H1 FY23 H2 FY23 H1 FY24 H2 FY24 H1 FY2
Slide 8: …while credit metrics remain strong…
…while credit metrics remain strong… • Credit settings continue to produce losses below the pro-forma ingoing loss provision 30+ days arrears 1 Loss Provision to Realised Losses (%) 1.3 30% 26.5% 24.1% 25% 1.2 20.7% 20.5% 19.5% 18.9% 20% 18.6% 1.1 18.3% 15% 15.9% 15.9% 15.8% 14.7% 1.0 12.6% 10% 11.8
Slide 9: …as we look to newer products for additional growth
…as we look to newer products for additional growth • Wizit digital credit card on track to be released from pilot in H2 • Used car price deflation is approaching our target level Australia Used Car Price Index 1 150 125 100 1 1. Retail & Wholesale Used Vehicle Market Insights (Full Year 2024), Cox
Slide 10: AU/NZ debt buying run-off has stabilised
AU/NZ debt buying run-off has stabilised • Investment now sufficient to offset run-off and hold collections and earnings • Cost discipline and strong operating performance has minimised loss of operating leverage AU/NZ PDL Investment Volume ($m) AU/NZ Collections ($m) and Cost to Collect (%) 250 400
Slide 11: We have maintained our differentiated position as a responsible operator…
We have maintained our differentiated position as a responsible operator… • Leading dispute metrics FY24 AU EDR Rate 1 12 Months to Sep-24 US Dispute Rate 2 Credit Corp Credit Corp Publicly traded debt buyer A Other debt buyers Publicly traded debt buyer B - 1 2 3 4 - 1 2 3 4 5 • Superior response t
Slide 12: …and have the financial capacity to use our position to increase investment
…and have the financial capacity to use our position to increase investment • Gearing remains conservative • Capacity intact under expanded facility Cash Facilities ($m) and Gearing (%) 400 35% 350 30% 300 25% 250 20% 200 15% 150 10% 100 50 5% - - H2 FY22 H1 FY23 H2 FY23 H1 FY24 H2 FY24 H1 FY25 1 Ne
Slide 13: Outlook for solid earnings growth in FY25
Outlook for solid earnings growth in FY25 • Growth in NPAT of 11 - 23 per cent against FY24 underlying result FY25 Guidance FY25 Guidance Issued Jul-24 Confirmed Jan-25 Ledger investment $200 - $250 million $200 - $250 million Net lending $45 - $55 million $45 - $55 million NPAT $90 - $100 million $
Slide 14: Appendices: Key Operating Metrics
APPENDICES: KEY OPERATING METRICS Credit Corp Group H1 FY25 Results Presentation — 14
Slide 15: Appendices: Key Operating Metrics
APPENDICES: KEY OPERATING METRICS APPENDIX 1: Operating cash flow and gearing 16 APPENDIX 2: AU/NZ & US debt buying operational metrics 17 APPENDIX 3: Payers base 18 APPENDIX 4: Productivity 19 APPENDIX 5: Collections life cycle 20 APPENDIX 6: Operational and total headcount 21 Credit Corp Group H1
Slide 16: Appendix 1: Operating cash flow and gearing
Appendix 1: Operating cash flow and gearing Operating cash flow and gearing FY22 FY23 FY24 H1 FY25 PDL collections $535.2m $493.8m $463.7m $236.9m Lending income $93.7m $147.8m $179.1m $98.2m Other income $38.3m $50.3m $92.8m $41.0m Interest expense / income ($4.7m) ($15.6m) ($23.8m) ($16.1m) Operat
Slide 17: Appendix 2: AU/NZ & US Debt buying operational metrics
Appendix 2: AU/NZ & US Debt buying operational metrics AU/NZ Debt Buying H1 FY25 Δ H1 FY24 Collections $132m (6%) Productivity $314 (3%) Operations headcount 1 581 (9%) Payers book (face value) 1 $1,285m (2%) US Debt Buying H1 FY25 Δ H1 FY24 2 Collections $105m 12% 2 Productivity $334 28% Operations
Slide 18: Appendix 3: Payers base
Appendix 3: Payers base Portfolio summary: Debt buying AU/NZ Combined AU/NZ/US 1 Total portfolio Dec-21 Jun-22 Dec-22 Jun-23 Dec-23 Jun-24 Dec-24 Face value $7.9b $11.8b $12.7b $12.8b $12.9b $13.0b $12.8b Number of accounts 1,252,000 2,863,000 2,993,000 2,952,000 2,904,000 2,820,000 2,740,000 Paymen
Slide 19: Appendix 4: Productivity
Appendix 4: Productivity Productivity per Hour (A$) 1 400 YTD DEC-24 average 350 FY25: $323 FY24: $295 300 250 200 150 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 12m to Dec-23 12m to Dec-24 1. Combined AU/NZ and US segment productivity Credit Corp Group H1 FY25 Results Presentation — 19
Slide 20: Appendix 5: Collections life cycle
Appendix 5: Collections life cycle PDL Collections by Vintage ($m) 1 160 Steady 2 140 120 29% 33% 34% 33% 30% 32% 33% 37% 33% 32% 100 33% 33% 40% 39% 40% 35% 41% 43% 44% 34% 40% 43% 12% 12% 19% 44% 34% 18% 80 13% 19% 14% 20% 15% 15% 15% 15% 13% 16% 18% 16% 14% 17% 17% 60 25% 17% 16% 17% 20% 17% 16%
Slide 21: Appendix 6: Operational and total headcount
Appendix 6: Operational and total headcount Period End Headcount (FTE) 2,500 Dec-23 Jun-24 Dec-24 2,000 Debt buying operations 1,184 1,142 1,082 Collection services 613 628 599 1,500 Lending 253 254 263 1,000 Support 213 207 201 500 Total 2,263 2,231 2,145 Support % 9% 9% 9% - Dec-23 Jun-24 Dec-24 S
Slide 22: For more information please contact:
For more information please contact: THOMAS BEREGI MICHAEL EADIE Chlef Executive Officer Chief Financial Officer | Tel +61 2 8651 5777 Tel +61 2 8651 5542 AA tberegi@creditcorp.com.au meadie@creditcorp.com.au