Pioneer Credit Ltd · ASX:PNC
Pioneer Credit — Investor Presentation (September 2020)
26 slides from Pioneer Credit's investor presentation, Sep 24, 2020
Slide 1: FY20 Results and Refinancing Completion
24 Sep 20 FY20 Results and Refinancing Completion INVESTOR PRESENTATION
Slide 2: Important notice: Disclaimer
Important notice: Disclaimer 2 This presentation has been prepared by Pioneer Credit Limited (“Pioneer” or the “Company”). Disclaimer: This presentation contains information about Pioneer’s activities current as at the date of the presentation and should not be considered to be comprehensive or to c
Slide 3: Situational Overview
Situational Overview 3 Pioneer has refinanced its senior debt facilities, bringing an end to a difficult chapter, and is once again positioned for growth New senior debt facility - a $169m term facility and a $20m purchasing facility Pioneer is well positioned to: $40m Medium Term Notes restructured
Slide 4: Refinancing - $189m Senior Debt
Refinancing - $189m Senior Debt 4 The debt package provides headroom to acquire ‘above expectation’ portfolio opportunities • $169m term facility New senior debt package • $20m purchasing facility • 15,750,626 warrants issued to incoming financiers, ensuring long term alignment with shareholders • $
Slide 5: Refinancing - $40m Medium Term Notes
Refinancing - $40m Medium Term Notes 5 As part of the refinancing, the subordinated MTNs were restructured, with consent received from Noteholders in Jul 20 • Margin: increased from +5.25% p.a. to +7.25% p.a. Key MTN restructured terms • Maturity: increased by 12 months to 22 Mar 23 • Quarterly rede
Slide 6: Capital Structure
Capital Structure 6 Pioneer has sufficient headroom under the new facility and restructured MTNs to meet covenants and pursue growth Pro Forma Capital Structure At Financial Close $’000 Uses of Funds $’000 Senior Term Facility 169,000 Repayment of Carlyle facility 163,396 Cash funded transaction cos
Slide 7: Strong alignment of purpose
Strong alignment of purpose 7 Incentive scheme based on significant gains for shareholders, with executive remuneration that rewards sustainable growth and ensures strong alignment to shareholder value creation Key aspects of Equity Incentive Plan • Every KMP member is equity aligned to shareholders
Slide 8: Future focused
8 Future focused
Slide 9: FY21 Strategy Overview
FY21 Strategy Overview 9 Pioneer is focussed on its strategy of disciplined growth, diversification and operational efficiency Capitalise on growth • There has been a re-emergence of available PDP volumes following the onset of COVID-19 in Australia 1 opportunities while • Pioneer will seek to capit
Slide 10: Differentiated Approach
Differentiated Approach 10 Pioneer is differentiated by its approach of providing high-quality, flexible and customised financial services to help everyday Australians out of financial difficulty Strong Vendor Disciplined PDP Resilient Portfolio Do the right thing Relationships Acquisition • Data sc
Slide 11: FY20 Operational and Financial Performance
11 FY20 Operational and Financial Performance
Slide 12: Key FY20 Observations
Key FY20 Observations 12 COVID-19 response focused on preserving portfolio value and improving liquidations from older vintages • While liquidations softened over the course of the pandemic our PA portfolio grew from $290m (FY19) to $356m (FY20) and is now at $366m (Aug 20) Pioneer PA portfolio cont
Slide 13: Profit or Loss
Profit or Loss1 13 FY20 earnings were softer due to significant one-off costs and some impact from COVID-19 Profit or Loss ($’000) FY19 FY20 • Significant one-off costs mostly caused by Carlyle related corporate activity have Liquidations revenue 118,466 100,924 negatively impacted earnings Other in
Slide 14: Liquidations focused on the back book
Liquidations focused on the back book 14 With lower purchasing due to COVID-19, Pioneer has continued its focus on liquidating from older vintages, further demonstrating the quality of the underlying customers in its portfolio Liquidations of ~35% from accounts greater than two years old Discipline
Slide 15: Increased emphasis on Payment Arrangements
Increased emphasis on Payment Arrangements 15 PA portfolio growth through COVID-19 is further testament to underlying customer quality PA Portfolio Balance ($m) Key PA Portfolio Metrics 30 Jun 20 31 Aug 20 CAGR = 23% $356m $366m # Customers 27,597 29,637 $290m $257m % Active customers 12% 13% on a P
Slide 16: Cash Flows
Cash Flows 16 While liquidations were softer, reduced purchasing assisted with cash conservation Cash Flows ($’000) FY19 FY20 Cash flows from operating activities Liquidations and receivables 120,842 102,985 • Reduced PDP investment during Q4 FY20 is a direct result of the suspension of vendor Trade
Slide 17: Balance Sheet
Balance Sheet 17 Impact to the balance sheet is mostly one-off costs caused by Carlyle related corporate activity Balance Sheet ($’000) FY19 FY20 Assets • PDP Investment was $57.6m, below expectations due to suspended sale programmes Cash and cash equivalents 11,184 11,019 through 4Q20 by major vend
Slide 18: Outlook
18 Outlook
Slide 19: Our Culture
Our Culture 19 The Pioneer Principles are the foundation of our Company
Slide 20: Experienced team to execute on strategy
Experienced team to execute on strategy 20 Board of Directors Executive Leadership • Managing Director of strategic marketing consultancy firm Black House • Appointed General Counsel and Company Secretary on 1 Oct 15 • Chairman of 7-Eleven Stores and Starbucks Australia • Over 25 years experience in
Slide 21: Outlook (1/2)
Outlook (1/2) 21 Pioneer is well positioned to benefit from current market trends in a growing, oligopolistic industry PDP sales have recommenced, on improved terms for Pioneer • Industry fundamentals remain strong with PDP volumes expected to grow as Australia exits the pandemic • Well funded and c
Slide 22: Outlook (2/2)
Outlook (2/2) 22 Free cash flow and the purchasing facility will fund growth while more favorable refinancing terms are sought Continue to utilise free cash flow to invest in PDPs, with purchasing facility available for any ‘out of sight’ opportunities • Normalised EBITDA of $51m in FY20, expected t
Slide 23: Appendix
23 Appendix
Slide 24: Statutory Profit or Loss Statement (ref slide 13)
Statutory Profit or Loss Statement (ref slide 13) 24 Continuing operations $’000 FY19 FY20 Interest income at amortised cost 58,072 60,122 Net impairment gain (loss) on PDPs 14,168 (6,320) Other revenue 3,072 2,133 75,312 55,935 Employee expenses (39,916) (34,816) Finance expenses (8,422) (38,472) I
Slide 25: Normalised EBITDA (ref slide 13)
Normalised EBITDA (ref slide 13) 25
Slide 26: Definitions
Definitions 26 AASB – Australian Accounting Standards Board ATO – Australian Taxation Office BBSY – Bank Bill Swap Bid Rate Carlyle – Robin Bidco Pty Ltd and/or Robin Holdco Holdings Limited and/or Project Robin, L.P., all entities part of the group of entities doing business as ‘The Carlyle Group’
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