Humm Group Limited · ASX:HUM
Humm — Investor Presentation (February 2022)
35 slides from Humm's investor presentation, Feb 22, 2022
Slide 1: 1H22 Results
1H22 RESULTS Rebecca James | CEO Adrian Fisk | CFO 22 February 2022 Authorised for release by the hummgroup Board of Directors humm group limited ACN 122 574 583 Level 1, 121 Harrington St, The Rocks, Sydney NSW 2000
Slide 2: Who We Are
1H22 RESULTS | 22 FEBRUARY 2022 WHO WE ARE Bigger ticket Strength through a Leader in credit Profitable with the instalment plan range of consumer decisioning and ability to self-fund financier and SME offerings funding for larger our growth purchases PURPOSE | To help our customers and their famili
Slide 3: Proposal from Latitude Financial
1H22 RESULTS | 22 FEBRUARY 2022 PROPOSAL FROM LATITUDE FINANCIAL Latitude has offered an aggregate consideration of $335 million for HCF1,2, 3 As consideration for HCF Latitude HUM shareholders will receive approximately $0.68 per share, consisting has offered: of 0.30 Latitude shares and $0.07 cash
Slide 4: Agenda
1H22 RESULTS | 22 FEBRUARY 2022 01 | 1H22 KEY HIGHLIGHTS 02 | STRATEGY UPDATE • AGENDA 03 | 1H22 GROUP FINANCIALS 04 | SUMMARY 05 | APPENDICES Agenda // 4
Slide 5: 1H22 Key Highlights
-1H22 KEY HIGHLIGHTS
Slide 6: Key Highlights vs PCP
1H22 RESULTS | 22 FEBRUARY 2022 1H22 KEY HIGHLIGHTS VS PCP $27.8 million $132 million $651 million Cash NPAT Cash balance BNPL volume 1H22 statutory net loss after tax of Non-restricted cash at bank $168.3m including a non-cash impairment of intangible assets of $181.2m -37% 1H21: $53m +37% ` 1.7c 2
Slide 7: Impact of COVID-19 on quarterly volumes
1H22 RESULTS | 22 FEBRUARY 2022 IMPACT OF COVID-19 SUBDUED PERFORMANCE IN LARGER TICKET BNPL AND LONG TERM INTEREST FREE CARDS – WITH GROWTH DRIVEN BY SMALL TICKET BNPL AND COMMERCIAL QUARTERLY VOLUMES: BNPL QUARTERLY VOLUMES: COMMERCIAL Big Things Other BNPL 169 134 145 47 88 103 52 205 228 27 42 4
Slide 8: Strategy Update
STRATEGY UPDATE
Slide 9: HCF Strategy for Growth
1H22 RESULTS | 22 FEBRUARY 2022 HCF STRATEGY FOR GROWTH New audiences Driving customer Expanding International New products engagement the instalment expansion New partnerships payment core Finding new audiences Driving customer New merchants and Expansion into new markets through partnerships for o
Slide 10: BNPL Products Growing Strongly
1H22 RESULTS | 22 FEBRUARY 2022 BNPL PRODUCTS GROWING STRONGLY BNPL VOLUME1 (A$M) BNPL ‘BIG THINGS’ VOLUME 2 (A$M) +103% +24% 651 351 284 321 2H19 1H20 2H20 1H21 2H21 1H22 2H19 1H20 2H20 1H21 2H21 1H22 ` BNPL ‘LITTLE THINGS’ VOLUME3 (A$M) BUNDLL & HUMMPRO VOLUME (A$M) (QUARTERLY) +569% 194 +400% 55
Slide 11: Diversified Revenue with Marketplace
1H22 RESULTS | 22 FEBRUARY 2022 DIVERSIFIED REVENUE WITH MARKETPLACE • Launched humm marketplace which when combined with humm//CARD functionality, allows humm to offer a broader range of merchants and products without cost and time of onboarding • Shift to a curated merchant offering driving increm
Slide 12: United Kingdom International Expansion
1H22 RESULTS | 22 FEBRUARY 2022 INTERNATIONAL EXPANSION ESTABLISH BOARD AND LOCALISE THE LAUNCH LAUNCH LAUNCH SCALE IN UNITED KINGDOM MANAGEMENT TEAM PLATFORM ‘LITTLE THINGS’ ‘MID THINGS’ ‘BIG THINGS’ KEY VERTICALS Integrated software and UNITED KINGDOM eCommerce platforms across key verticals in he
Slide 13: Commercial Positioning
1H22 RESULTS | 22 FEBRUARY 2022 COMMERCIAL POSITIONING ANZ’s leading provider of specialist asset finance with over $1 billion in receivables 1. 2. 3. 4. 5. 2nd largest NBFI in asset Primarily offers Key differentiators include Large, under-served Profitable, growing finance in Australia and equipme
Slide 14: Momentum Continues
1H22 RESULTS | 22 FEBRUARY 2022 MOMENTUM CONTINUES QUARTERLY VOLUMES: COMMERCIAL AUSTRALIA COMMERCIAL 28% 29% 27% 25% 17% 9% ` 205 228 ` $34.6m 182 142 $23.5m $27.0m 112 101 114 $16.3m $17.8m 88 $15.7m 82 65 2H19 1H20 2H20 1H21 2H21 1H22 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 Operating in
Slide 15: 1H22 Group Financials
~1H22 GROUP FINANCIALS
Slide 16: Bridge to Statutory NPAT
1H22 RESULTS | 22 FEBRUARY 2022 BRIDGE TO STATUTORY NPAT 1H21 Cash NPAT HUMMGROUP ($M) 1H22 (RESTATED) • Cash NPAT $27.8m versus $44.2m in 1H21 Cash NPAT 27.8 44.2 • Volume growth (up 33.5%) supporting ongoing momentum in the business Adjusting items • CNPAT down due to impact of COVID-19 on re
Slide 17: COVID-19 & Planned Investments Impacting Cash NPAT
1H22 RESULTS | 22 FEBRUARY 2022 COVID-19 & PLANNED INVESTMENTS IMPACTING CASH NPAT HUMMGROUP ($M) 1H22 1H21 V PCP Financial performance (RESTATED) • Cash NPAT $27.8m down 37.1% on pcp Gross income 220.7 223.8 (1.4%) • Gross income down 1.4%: – strong volume growth in Commercial and BNPL Net operatin
Slide 18: Cash NPAT by HCF and Commercial
1H22 RESULTS | 22 FEBRUARY 2022 CASH NPAT BY HCF AND COMMERCIAL HCF COMMERCIAL 1H21 1H21 HUMMGROUP ($M) 1H22 (RESTATED) V PCP 1H22 (RESTATED) V PCP Gross income 163.6 175.2 (6.6%) 57.1 48.6 17.5% Net operating income 124.0 137.7 (9.9%) 45.4 39.0 16.4% Marketing expense (16.6) (15.3) (8.5%) (0.2) (0.
Slide 19: Cost to Income
1H22 RESULTS | 22 FEBRUARY 2022 COST TO INCOME OPERATING EXPENSES 1H21 VERSUS 1H20 ($M) COST TO INCOME RATIO1 $108.1 $1.7 $0.7 $4.5 63.8% $6.5 58.1% $88.6 $6.1 ` 50.1% ` 43.5% 45.8% 42.2% 42.6% 35.4% 1H21 2H21 1H22 1H21 International Payroll Other opex Marketing Depreciation 1H22 Expansion CTI repor
Slide 20: HCF: Buy Now Pay Later
1H22 RESULTS | 22 FEBRUARY 2022 HCF: BUY NOW PAY LATER Investing for growth BNPL 1H22 1H21 V PCP • Cash NPAT of -$9.7m (1H21: $2.6m), impacted by the expansion into international markets and investment in new products bundll and hummpro Gross income (A$m) 61.6 58.8 5% • Volume of $651m, up 38% on 1H
Slide 21: Big Things and Little Things
1H22 RESULTS | 22 FEBRUARY 2022 BIG THINGS AND LITTLE THINGS HUMM AUSTRALIA 1H22 2H21 1H21 humm Australia • Product yield and funding metrics are measured across humm Australia Product yield (%)1, 2 15.4 16.3 17.7 • Product yield continues to be affected by competitive environment with our focus on
Slide 22: Buy Now. Pay Later. Anywhere.
1H22 RESULTS | 22 FEBRUARY 2022 | BUY NOW. PAY LATER. ANYWHERE. REPLACES THE DEBIT CARD | BUY NOW PAY LATER DESIGNED FOR BUSINESS BUNDLL AUSTRALIA HUMMPRO AUSTRALIA 1H22 2H21 1H21 1H22 2H21 1H21 AND NEW ZEALAND AND NEW ZEALAND Volume (A$m) 94.5 83.7 33.5 Volume (A$m) 11.8 4.7 0.0 Income/volume (%) 3
Slide 23: HCF: Cards
1H22 RESULTS | 22 FEBRUARY 2022 HCF: CARDS AUSTRALIA NEW ZEALAND HUMM90 1H22 2H21 1H21 NEW ZEALAND CARDS 1H22 2H21 1H21 Volume (A$m) 223.9 216.1 200.8 Volume (A$m) 359.2 336.2 359.2 Interest bearing balances (%) 58.5 59.4 59.7 Interest bearing balances (%) 61.2 60.6 61.0 Product yield (%) ` 18.0 19.
Slide 24: Commercial and Leasing
1H22 RESULTS | 22 FEBRUARY 2022 COMMERCIAL AND LEASING Strong momentum in Commercial and Leasing segment COMMERCIAL AND LEASING • CNPAT of $15.3m up 3% on 1H21, driven by continued growth in operating $M 1H22 1H21 V PCP income as the business has seen significant volume and receivables growth offset
Slide 25: Summary
1H22 RESULTS | 22 FEBRUARY 2022 SUMMARY FLEXICOMMERCIAL AUSTRALIA 1H22 2H21 1H21 FLEXICOMMERCIAL NEW ZEALAND 1H22 2H21 1H21 Volume (A$m) 393.9 286.2 179.2 Volume (A$m) 38.9 38.4 36.5 Number of transactions 4,322 3,417 2,724 Number of transactions 1,618 3,063 4,482 ` ` Product yield (%) 10.4 11.3 11.
Slide 26: Credit Risk Management
1H22 RESULTS | 22 FEBRUARY 2022 CREDIT RISK MANAGEMENT Data driving improvements over time NET LOSS1 DENOMINATOR 1H22 1H21 GROUP BNPL ‘big ticket’2, 3 ANR 2.5% 2.7% • Net loss/ANR of 2.8% down 40bps reflecting our strength in credit decisioning and management practices BNPL ‘ small ticket’ 2, 4 Volu
Slide 27: Strong Balance Sheet
1H22 RESULTS | 22 FEBRUARY 2022 STRONG BALANCE SHEET WHOLESALE FUNDING FACILITIES $3,496m $2,946m $797m Wholesale funding facilities $737m • Record $1.4b of ABS issuance during calendar year 2021 delivering funding efficiencies • Over $540m of green ABS notes now issued across seven BNPL ABS $2,699m
Slide 28: Summary
“SUMMARY
Slide 29: Outlook
1H22 RESULTS | 22 FEBRUARY 2022 OUTLOOK In 2H22, hummgroup expects: • a rebound in consumer spending on ‘Big things’ as consumers return to in-store experiences • continued profitable growth in commercial following business repositioning • stable loss rates, with an improvement in ‘Little things’ ne
Slide 30: Appendices
-APPENDICES
Slide 31: Profit and Loss
1H22 RESULTS | 22 FEBRUARY 2022 1H21 PROFIT AND LOSS ($m) 1H22 v PCP % (RESTATED) Interest income 169.8 171.5 (1.0%) Fee and other income 50.9 52.3 (2.7%) Gross income 220.7 223.8 (1.4%) Cost of origination (13.7) (10.3) 33.0% Interest expense (37.6) (36.8) 2.2% Net operating income 169.4 176.7 (4.1
Slide 32: Balance Sheet
1H22 RESULTS | 22 FEBRUARY 2022 BALANCE SHEET ($M) 31 DEC 21 30 JUN 21 VARIANCE % Cash and cash equivalents 272.1 218.2 24.7% Receivables and customer loans1 2,920.0 2,653.1 10.1% Equity and other investments 15.1 17.0 (11.2%) Other assets 11.9 14.7 (19.0%) Current and deferred tax assets 45.7 46.3
Slide 33: Consolidated Cash Flow
1H22 RESULTS | 22 FEBRUARY 2022 CONSOLIDATED CASH FLOW ($m) 1H22 1H21 v PCP % Interest income received from customers 171.8 176.1 (2.4%) Fee and other income received from customers less cost of origination 50.9 60.3 (15.6%) Payment to suppliers and employees (127.6) (87.6) 45.7% Borrowing costs (37
Slide 34: Disclaimer
1H22 RESULTS | 22 FEBRUARY 2022 DISCLAIMER NO RECOMMENDATION, OFFER, INVITATION OR ADVICE corporate, directors, officers, employees, advisers and agents disclaim all liability and responsibility This presentation is not a financial product or investment advice or recommendation, offer or (including
Slide 35: Thank You
/THANK YOU