Curo — Investor Presentation (November 2023)
15 slides from Curo's investor presentation, Nov 13, 2023
Slide 1: Investor Presentation November 2023
Investor Presentation November 2023
Slide 2: Important Information and Forward-Looking Statements
IMPORTANT: You must read the following information before continuing to the presentation, which is being provided to you for informational purposes only. NOTE: All financial information is presented on a continuing operations basis, which excludes the Canada POS Lending segment due to the sale of Fl
Slide 3: Key Management
Key Management 3 Doug Clark Chief Executive Officer Izzy Dawood Chief Financial Officer Gary Fulk Chief Operating Officer ▪ Joined CURO in 2021 as President of North American Direct Lending through the acquisition of Heights, where he served as CEO ▪ Named CEO of CURO in 2022 ▪ Nearly 20 years of co
Slide 4: Company Overview
4 Company Overview ▪ Omni-channel consumer finance company serving consumers in the U.S. and Canada ▪ Operates in almost 500 branches across 13 states in the U.S. and nearly 150 branches in Canada – eight provinces with retail locations and eight provinces and one territory online ▪ Secured and unse
Slide 5: Strategic Transformation
Strategic Transformation 5 Acquisition of First Heritage Expands <36% APR lending capabilities, adding new strategic geographies Sale of Legacy U.S. Direct Lending Business Accelerated transition from and reduces exposure to high APR loan products Acquisition of Heights Entrance into the <36% APR lo
Slide 6: U.S. and Canada Direct Lending Brands by Geography
U.S. DIRECT LENDING Secured and unsecured installment loan products to non-prime consumers as well as credit insurance and other ancillary financial products Direct Lending Brands by Geography 6 CANADA DIRECT LENDING Non-prime open-end loans and payment protection insurance
Slide 7: Direct Lending (U.S.) Overview
Direct Lending (U.S.) Overview 7 Overview: • Gross AR >$700M • Almost 500 branches across 13 states • Non-Prime, both secured and unsecured • Ongoing shift to larger, lower rate loans decreases regulatory risk • Typical customer: 46% homeowners and average net income of ~$28,000 Loan Characteristics
Slide 8: Direct Lending (Canada) Overview
Direct Lending (Canada) Overview 8 Open-end Loan Characteristics1 Avg Original Balance ~C$3,400 Avg Term n/a2 Avg Credit Vision Score 625 Avg APR ~45% 1 As of 9/30/23, all values are rounded and exclude insurance and other ancillary fees 2 Our primary product in Canada is an open-ended product Overv
Slide 9: Continued Progress on Strategic Framework
Continued Progress on Strategic Framework Strengthen our Foundation Execute with ExcellenceGrow Responsibly 9 • Recommenced receivables growth without sacrificing credit quality • Increased the secured mix of our U.S. portfolio 6% YTD, representing ~25% as of 3Q23 • Three consecutive quarters of dec
Slide 10: Continued Responsible Receivables Growth
Continued Responsible Receivables Growth 10 ($ Millions) Note: In 3Q23, Loans receivable in Canada grew 2% vs prior quarter on a constant currency basis
Slide 11: Credit Overview: Net Charge-offs
Credit Overview: Net Charge-offs Highlights: • Net charge-offs improved sequentially and YTD 3Q23 primarily driven by credit tightening, servicing optimization and continued strategic mix shift to larger dollar, longer duration loans ($ Millions) Direct Lending NCOs by Geography 11 1 1Q23 NCOs exclu
Slide 12: Outlook
Outlook Strengthen our Foundation Execute with ExcellenceGrow Responsibly Cost of funds: ~$60M $90-$140M of unrestricted cash 4Q23 Targets: EOP Receivables: $1.26-$1.28B Revenue: $165-$175M Net Charge-off %: 16.5-18.5% Operating Expenses: $85-$95M 12 $90-$140M quarterly unrestricted cash balance Ful
Slide 13: Performance KPIs and Long-Term Path to Profitability
13 Performance KPIs 3Q23 Annualized Inflection point1 Long-term Target Range NIM, post charge-offs (excl. recourse interest)2 27% 28-30% 28-31% OpEx Ratio 30% 20-24% 20-22% Pre-tax ROA3 (3)% 4-10% 6-11% Net Leverage n/a n/a 5.0x-6.0x Average Receivables $1.25B ~$1.5B Pro-forma Pre-tax Income (excl.
Slide 14: Debt and Funding Summary
14 Debt and Funding Summary 56% 44% Fixed vs Variable of Funded Debt1 Fixed Variable 1 As of November 7, 2023 2 Refer to Quarterly Report on Form 10-Q, FN 6 - Debt for additional maturity date information 3 Borrowing Capacity amounts are denominated in CAD, but were converted to USD using a 09/30/23
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