Contact Financial Holding Sae · EGX:CNFN
Contact Financial Holding Sae — Contact Financial Holding — 9M 2023 Earnings Presentation
46 slides from Contact Financial Holding Sae's earnings presentation, 2023
Slide 1: Results Presentation 9M-2023
Results Presentation 9M-2023
Slide 2: Disclaimer
Introduction Disclaimer This presentation has been prepared by Contact Financial Holding (the “Company”. The distribution of this presentation in certain jurisdictions may be restricted by law and persons into whose possession this presentation comes should inform themselves about, and observe, any
Slide 3: Agenda
AGENDA 1 Introduction 4 2 Our Edge 9 3 Digital Platforms 22 4 Debt Capital Markets 27 5 Africa Expansion 30 6 9M-2023 Performance Review 32 7 Appendix 43
Slide 4: Introduction
ion Introduct ~
Slide 5: Important note regarding updates to group financial reporting
Introduction Important note regarding updates to group financial reporting Starting with the FY 2021 financial statements, the Group has changed the structure and constituents of its financial reporting, with changes affecting primarily the Consolidated Income Statement and segmental reporting in th
Slide 6: At a Glance
Introduction At a Glance Egypt’s leading non-bank financial services provider. Group Structure 1st EGX Consumer Finance License in Egypt with +20yrs and Largest Consumer Finance Player in the Listed Since 2018 Under the Ticker CNFN.CA Market Offering Innovative Financial Services Financial Holding E
Slide 7: Results Snapshot
Introduction Results Snapshot Contact continued its streak of impressive performances, delivering strong results in 3Q-2023 Total New Lending| EGP mn Total Operating Income| EGP mn Normalized Net Income1| EGP mn +30% +58% +45% 4,136 158 509 3,187 126 100 351 320 1,772 3Q-2021 3Q-2022 3Q-2023 3Q-2021
Slide 8: Results Snapshot 9M-2023
Introduction Results Snapshot Contact carried its momentum into the second half of the year, achieving solid financial and operational growth for the nine-month period ended 30 September 2023. EGP 1,600.4 mn EGP 541.9 mn 23.6% Consolidated Total Operating Income Consolidated Normalized Net Income1 A
Slide 9: Our Edge
Our Edge
Slide 10: How We Differentiate Ourselves
Our Edge How We Differentiate Ourselves Highly experienced management Highly team Targets the profitable banked & operation unbanked population Contact has a clear vision for the business with a well- Superior Widest product defined growth strategy to funding capabilities offering in the market achi
Slide 11: Well-Defined Growth Strategy
Our Edge – Well-Defined Growth Strategy Well-Defined Growth Strategy Contact has a clear vision for the business with a well-defined growth strategy to achieve it. Contact Today A B C D E The widest product Fully digitized proprietary Strong physical & digital Superior funding Highly profitable offe
Slide 12: What We Do
Our Edge – What We Do What We Do Contact is the largest non-bank financial services provider in Egypt and for the past two decades has been actively changing the way businesses and individuals access financial and insurance services. Financing 85% Insurance 15% Financing products targeting Egypt’s b
Slide 13: Diversified and Synergistic Product Base Driving Growth Across All Segments
Our Edge – Diversified Product Base Diversified and Synergistic Product Base Driving Growth Across All Segments Broad & Increasingly Diversified Consumer Finance Offering New Lending Breakdown by Product for 2019 New Lending Breakdown by Product for 9M-2023 4% 2% 3% 1% 6% 7% 8% 9% 2% 4% 56% 75% 24%
Slide 14: Proprietary AI Instant Credit Scoring Engine
Our Edge – Exceptional Credit Scoring Engine Proprietary AI Instant Credit Scoring Engine Unique Credit Assessment Approach through Creditech Distinctive credit assessment methodology refined over +20 years of financing experience Loan disbursed or application Credit application submitted Data asses
Slide 15: Market-wide Coverage Including Banked and Unbanked Population
Our Edge – Wide Market Coverage Market-wide Coverage Including Banked and Unbanked Population Powered by Physical Presence Expanding the branch network in high-potential areas outside the main cities Wide Geographical Footprint took place throughout 2021, 2022 and the first nine months of 2023 Zamal
Slide 16: A Diversified Digital Distribution Network
Our Edge – Wide Market Coverage … And A Diversified Digital Distribution Network Direct to Consumer Distribution (DTC) Lending as a Service (LaaS) 16
Slide 17: A Digital One-Stop-Shop for all Financial Needs
Our Edge – A Digital One-Stop-Shop A Digital One-Stop-Shop for all Financial Needs Relaunched in January 2023, the ContactNow app is Egypt’s first fully-fledged app offering the full suite of digital financial solutions. A Digital One-Stop-Shop Covering the Consumer’s Financial Lifecycle Strategic A
Slide 18: 20 Years of Strong Track Record of Credit Extension & Collection
Our Edge – Solid Track Record 20 Years of Strong Track Record of Credit Extension & Collection Track Record of Growth and Operational Evolution LaaS Successful product deployment on the back of market know-how Insurance Insurance Credit Credit Specialized Specialized ConsumerCredit ConsumerCredit LT
Slide 19: Diversified, Highly Liquid Funding Base
Our Edge – Diversified Funding Base Diversified, Highly Liquid Funding Base Funding Strategy Overview Overview of 9M-2023 Funding Base Amounts in EGP MN Utilized Available Diversified funding base enabling 23,185 consistent liquidity with efficient pricing A B C D 2,700 Fixed rate to match portfolio
Slide 20: Funding Driven by Continued Innovation in the DCM Space
Our Edge – An Innovator in the DCM Space Funding Driven by Continued Innovation in the DCM Space1 Overview of Debt Capital Markets Activities DCM Segment Highlights • Originally established to deepen Egypt’s debt capital markets and further enhance the Group’s availability and cost of funding, Conta
Slide 21: Consistent Growth and Profitability
Our Edge – Historical Performance Consistent Growth and Profitability Over the years, Contact has leveraged its growing digital presence, and increasingly broad reach and service offering to deliver consistent growth and attractive profitability, as well as weather challenging market conditions and
Slide 22: Digital Platforms
Digital Platforms -
Slide 23: A Digital Business
Digital Platforms A Digital Business Contact is leading the financing and insurance sectors’ digitization movement, strengthening its digital capabilities and offering through strategic investments and partnerships. Increase Create new Maintain market Contact’s Improve Retain customer customer reven
Slide 24: Digital Platforms – Contactcars.com
Digital Platforms – Contact Cars Digital Platforms – Contactcars.com The portal, originally set up in 2002, was relaunched in 2021 as a stand-alone business ContactCars.com Relaunched Classifieds for retail were instrumental in influencing our 2023 platform growth strategy. The present state of the
Slide 25: Digital Platforms – ContactNow
Digital Platforms – ContactNow Digital Platforms – ContactNow The Company rolled out its ContactNow app in early 2021 (relaunched in 2023) with the platform rapidly rising in popularity ever since. The ContactNow app ContactNow has secured several partnerships alongside major New Bill Payment Origin
Slide 26: Digital Platforms – Wasla
Digital Platforms – Wasla Digital Platforms – Wasla In February 2022, the Company concluded a USD 9 million investment in e-commerce super-app Wasla, adding to Contact’s growing footprint in fintech and reinforcing its quest to enable tech-first ventures in Egypt’s financing ecosystem. Wasla at a gl
Slide 27: Debt Capital Markets
Debt Capital Markets
Slide 28: Overview of the Debt Capital Markets
Debt Capital Markets Overview of the Debt Capital Markets1 Overview of Debt Capital Markets Activities DCM Segment Highlights • Originally established to deepen Egypt’s debt capital markets and further enhance the Group’s availability and cost of funding 40 • Introducing new products to the market:
Slide 29: Overview of the Debt Capital Markets
Debt Capital Markets Overview of the Debt Capital Markets Egypt’s Leading DCM Player with a Proven Record of Executing Transactions in Challenging Market Conditions, Safeguarding the Group’s Liquidity Requirements. 2022 2023 2023 2022 Issued despite Issued despite Issued despite Issued despite ongoi
Slide 30: Africa Expansion
Africa Expansion
Slide 31: The Perfect Opportunity for Further Expansion
Africa Expansion The Perfect Opportunity for Further Expansion Expanding into Kenya and other emerging African markets presents a great opportunity for Contact to replicate its domestic success in markets with similar demographics. Almasi, the newly launched joint venture between Contact and Mansour
Slide 32: 9M-2023 Performance Review
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Slide 33: Comprehensive Financing Offering
9M-2023 Performance Review Comprehensive Financing Offering Contact offers a full range of financing products targeting Egypt’s banked and unbanked population in both the retail and commercial spaces. Passenger Commercial Contact Mortgage Medical Working Cars Vehicles Shopping Capital Contact Auto o
Slide 34: Financing Division – Widespread Growth Across Financing Segments
9M-2023 Performance Review Financing Division – Widespread Growth Across Financing Segments Total new financing extended in 9M-2023 reached EGP 12.1 billion, up 45% year-on-year and mainly driven by Contact’s passenger cars and shopping segments. Contact also witnessed new lending growth at its comm
Slide 35: Financing Division – Increasingly Diversified Portfolio with Favorable Margins
9M-2023 Performance Review Financing Division – Increasingly Diversified Portfolio with Favorable Margins Contact’s financing portfolio reached EGP 19.68 billion, up by 44% year-on-year as at September 2023. Throughout the year, Contact continued to diversify its portfolio with an increased focus on
Slide 36: Financing Division – Sustained Growth Across all Financing Revenue Components
9M-2023 Performance Review Financing Division – Sustained Growth Across all Financing Revenue Components The financing division delivered strong growth in 9M-2023 through its ability to leverage an increasingly diversified product offering and a wider direct-to-consumer reach despite consumers’ purc
Slide 37: Financing Division – High-Quality Portfolio as Evident by the Low Delinquency Ratio
9M-2023 Performance Review Financing Division – High-Quality Portfolio as Evident by the Low Delinquency Ratio Contact’s PaR 150+ delinquencies (Portfolio at Risk) ratio as at September 2023 stood at 3.4%. 150+ Days Portfolio at Risk 3.4% 3.1% 2.5% 2.3% 2.3% FY-2020 FY-2021 FY-2022 9M-2022 9M-2023 C
Slide 38: Financing Division – Strong Profitability Supported by Controlled Costs
9M-2023 Performance Review Financing Division – Strong Profitability Supported by Controlled Costs and Low Risk Profile The Financing Division saw its net income increase 33% year-on-year in 9M-2023 supported by a strong operational performance during the nine-month period. Operating Costs and Cost
Slide 39: Insurance Division – Operational and Business Developments – 9M-2023
9M-2023 Performance Review Insurance Division – Operational and Business Developments – 9M-2023 Gross written premiums continue to report solid year-on-year expansion across both companies supported by new product launches and increased cross-selling. Total policies underwritten in 9M-2023 stood at
Slide 40: Insurance Division – Performance Review
9M-2023 Performance Review Insurance Division – Performance Review Underwriting Income | EGP mn Insurance Operating Income | EGP mn 54% +48% 238 123 Underwriting income expanded 195 On a consolidated basis, 97 by a solid 48% year-on-year to 154 insurance operating income 83 record EGP 123 million in
Slide 41: Consolidated Performance – Income Statement
9M-2023 Performance Review Consolidated Performance – Income Statement Broad-based growth across both segments continued to support impressive results at the consolidated level. Consolidated Operating Expenses | EGP mn Total Operating Income| EGP mn EBT | EGP mn Cost-to-Income | % +32% +41% 747 1,64
Slide 42: Consolidated Performance – Income Statement
9M-2023 Performance Review Consolidated Performance – Income Statement Consolidated normalized net income after minorities rose 34% year-on-year to record EGP 542 million in 9M-2023. Normalized Net Income1| EGP mn Consolidated Return on Equity | % Adjustments +34% Actual Net Income 609 542 23.6% 98
Slide 43: Appendix
Appendix
Slide 44: Financing Business Income Statement
Appendix Financing Business Income Statement FY-2021 FY-2022 change (FY-2021 vs FY-2022) 9M-2022 9M-2023 change (9M-2022 vs 9M-2023) Revenue from Portfolio Transfer 486,813 767,104 58% 473,045 836,028 77% Off Balance Sheet Portfolio Management Fee 156,799 199,248 27% 152,990 232,040 52% Securitizati
Slide 45: Insurance Business Income Statement
Appendix Insurance Business Income Statement FY-2021 FY-2022 change (FY-2021 vs FY-2022) 9M-2022 9M-2023 change (9M-2022 vs 9M-2023) Gross Written Premiums 516,835 948,316 83% 723,601 1,168,772 62% Provisions of Unearned Premiums (44,152) (105,734) 139% (98,662) (186,257) 89% Outward Reinsurance Pre
Slide 46: Consolidated Income Statement
Appendix Consolidated Income Statement Financing Business FY-2021 FY-2022 change (FY-2021 vs FY-2022) 9M-2022 9M-2023 change (9M-2022 vs 9M-2023) Revenue from Portfolio Transfer 486,813 767,104 58% 473,045 836,028 77% Off Balance Sheet Portfolio Management Fee 156,799 199,248 27% 152,990 232,040 52%
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