Credit Clear Limited · ASX:CCR
Credit Clear — H1 2024 Earnings Presentation
20 slides from Credit Clear's earnings presentation, Feb 26, 2024
Slide 1: Building momentum: 1H'24 Results Presentation
For personal use only Building momentum • Upgraded guidance 1H’24 Results Presentation • Cash flow and EBITDA positive ASX: CCR | 26 February 2024 • Expanding operating leverage
Slide 2: Important information
Important information This presentation has been prepared by and is the sole responsibility of Credit Clear No representation or warranty, express or implied, is made by any person as to the Limited ACN 604 797 033 (Company). The information contained in this presentation fairness, accuracy, complet
Slide 3: Agenda
Agenda 1. CEO Update For personal use only Andrew Smith 2. Financial Update Victor Peplow 3. Technology and Strategy Update Jason Serafino 4. Q&A 3
Slide 4: 1H'24 a pivotal inflection point for Credit Clear
1H’24 a pivotal inflection point for Credit Clear For personal use only • Cash flow positive Credit Clear delivered record half in 1H’24 revenue of $20.03m, up 15% on generating $1.6m pcp and tracking ahead of cash from operations guidance which has been upgraded: • The Company is now • FY24 revenue
Slide 5: 1H'24 – Key Metrics
1H’24 – Key Metrics Growing revenue, improving profitability, cash flow and a strong balance sheet $20.03m $1.8m $13.0m For personal use only 1H’24 Revenue Underlying EBITDA1 Cash at bank +15% PCP $1.8m improvement on PCP Funded for growth opportunities Revenue ($m) Underlying EBITDA ($m) Cash from
Slide 6: 1H'24 – Highlights
1H’24 – Highlights $20.03M 9% For personal use only RECORD REVENUE UNDERLYING EBITDA 1 UP 15% ON PCP MARGIN TO REVENUE IMPROVES FROM 0% TO 9% $1.0M 54% STATUTORY EBITDA GROSS MARGIN A $5.4M IMPROVEMENT ON PCP UP FROM 50% IN 1H’23 DRIVEN BY DIGITAL $1.8M $1.6M UNDERLYING EBITDA 1 CASH FROM OPERATIONS
Slide 7: 1H'24 – Underlying vs Statutory EBITDA
1H’24 – Underlying vs Statutory EBITDA 1H'24 2H'23 1H'23 $000's $000's $000's Notes For personal use only EBITDA - Underlying Business Revenue 20,030 17,577 17,374 Revenue up 15% on pcp (1H'23) Expenses Employee Benefits (10,417) (9,876) (10,675) Employee benefits down 2% on PCP Tech Development - O
Slide 8: Credit Clear, ARMA and Oakbridge Lawyers merger
In February 2022 Credit Clear, ARMA and Oakbridge Lawyers merged to create an integrated, digitally For personal use only enabled, end-to-end provider of debt resolution services. We believed “traditional plus digital” would be a unique and successful proposition… 5
Slide 9: Since the merger we have
Since the merger we have: ü Won material new clients including leading ü We expected gross margins to improve, and For personal use only insurers, big four banks, large utilities they have, from 50% in 1H’23 to 54% in 1H’24 providers, and government bodies ü Our top line revenue is growing off a rel
Slide 10: Our strategy... is working
Our strategy... To transform the debt collection industry through technology, improved regulatory adherence and a focus on For personal use only our client’s customer experience ...is working Winning new business Outperforming Expanding profit Proven ability to and market share over competitors on m
Slide 11: 1H'24 – Leading indicators
1H’24 – Leading indicators Referred debt files increasing in value and volume $2.2bn 1.3m 225 For personal use only Value of files under Active files New clients management (FUM) +32% PCP +24% PCP +48% PCP FUM ($bn) Files Under Management (m) New clients 3 2 250 2 200 1 2 150 1 1 2.2 225 100 1.3 182
Slide 12: Clients building momentum
Clients building momentum Combined end-to-end and integrated offering is unmatched in Australia with SaaS platform and integrated contingent collections resonating strongly with clients providing strong sales momentum For personal use only 16 39 Tier 1 clients1 in 1H’24, Tier 2 clients2 in 1H’24 Inc
Slide 13: Clients already signed building momentum
Clients already signed building momentum • Tier 1 clients already signed • 2 not generating any revenue yet (still For personal use only onboarding) • 3 are onboarded and beginning to build momentum Credit Clear delivered record revenue of $20.03m, up 15% on The average tier-1 client size in 1H’24 w
Slide 14: Illustrative client onboarding timeline
Illustrative client onboarding timeline For personal use only Reduce size of panel and broadening scope of work Increase share of business on panel 0 0-3 mths 3-6 mths 3 6-9 mths 6 9-12 mths 9 12-1512+ mths Optimisation, champion / Onboarding challenger testing, performance reporting Initial portfol
Slide 15: FY24 Outlook
FY24 Outlook • Economic conditions are supportive with internal and external data suggesting a significant For personal use only Macroeconomic increase in overdue accounts from all time lows pre and during COVID-19 tailwinds • Australian companies clearly preparing for a deterioration in the economi
Slide 16: For personal use only
For personal use only CEO & MD Andrew Smith Credit Clear E: andrew@armagroup.com.au Investor Relations Warrick Lace Credit Clear e: warrick.lace@creditclear.com.au m: +61 404 656 408 16
Slide 17: What sets us apart?
What sets us apart? Credit Clear Limited is an integrated and end-to-end provider of debt resolution services For personal use only An ASX-listed company Trusted by thousands of clients, in highly Strong economic Aligned with rapidly that has a commercially regulated and diverse tailwinds and indust
Slide 18: Business model
Business model For personal use only Sales: Client appoints Credit Clear Notes: 1. We do NOT buy debt, we Finance: Onboarding: work with our clients to Credit Clear resolve their customers’ Credit Clear and receives a commission client establish a overdue accounts two-way data and/or fee for account
Slide 19: Economic tailwinds
Economic tailwinds Deterioration in economic conditions Household real incomes are not For personal use only expected to recover to their pre- pandemic levels until 2027, with new data showing Australia’s prolonged decline in living standards extended into the second half of 2024. In the 12 months t
Slide 20: Large and growing addressable market
Large and growing addressable market • Debt under collections in Australia was ~$21bn at the end of 2022 For personal use only • Made up of third-party contingent collections (~40%) and debt purchasers (~60%), with strong trend towards less debt being sold • Does not include debt being worked intern