Eleving Group · OMXRSE:ELEVR
Eleving — Mogo Finance — Debt Investor Presentation (November 2019)
41 slides from Eleving's debt investor presentation, November 2019
Slide 1: Mogo Finance Investor Presentation
Mogo Finance Investor Presentation November 2019
Slide 2: Disclaimer
Disclaimer The information contained in this presentation has been prepared by Aalto Capital Partners GmbH, a registered corporate finance boutique located in Munich, Germany, based among others on materials provided to us by Mogo Finance S.A. (the ”Company”). All information or opinions contained i
Slide 3: Disclaimer (Continued)
Disclaimer (Continued) MiFID II product governance / Professional investors and eligible counterparties only target market – Solely for the purposes of each manufacturer's product approval process, the target market assessment in respect of the Bonds, taking into account the five categories referred
Slide 4: Term sheet
Term sheet Issuer Mogo Finance S.A. (ISIN: XS1831877755) Status Senior secured bond Structure Guaranteed and secured Pledgors • As of the Settlement Date: AS “mogo” (Latvia), mogo OÜ (Estonia); UAB “mogo LT” (Lithuania), Mogo LLC (Georgia), Mogo Bulgaria EOOD (Bulgaria), MOGO Universal Credit Organi
Slide 5: Index
Index 6 Company background 14 Products and customers 18 Business process flow 24 Portfolio and NPL analysis 27 Financials 31 Strategy 33 Appendix 5
Slide 6: Presenters
Presenters Modestas Sudnius Maris Kreics Chief Executive Officer Chief Financial Officer ● Modestas has been at Mogo Finance since 2013 ● Maris has been at Mogo Finance since 2015 ● He started as country manager for Lithuania, where he ● Before joining Mogo Finance he spent two years in a establishe
Slide 7: Mogo Finance at a glance
Mogo Finance at a glance Group financials, Leading European used car finance EUR m 2016 2017 2018 6M 2018 6M 2019 provider Interest and similar 27.5 35.6 54.4 24.8 33.9 income ● Unique provider of used car financing to underserved EBITDA 15.1 20.0 20.4 8.1 14.9 customers across Europe and Central As
Slide 8: Mogo Finance - Investment Highlights
Mogo Finance - Investment Highlights Mogo has built a platform focused on facilitating and financing transactions with used cars, successfully addressing Leading European underserved demand not met by traditional leasing companies or banks in strategically targeted regions Used Car With a strong
Slide 9: Market opportunity
Market opportunity ● In the Baltics, sales of used cars far exceed those of new cars, in terms of both units and value, creating a significant market opportunity for used car financing Average age of the EU car fleet in 2016 ● The Company operates in countries with a higher average vehicle age, wher
Slide 10: Low risk profile due to used car economics
Low risk profile due to used car economics Loan to value during the life of the loan ● High-quality used cars preserve their value. Mogo’s borrowers repay a portion of the loan Risk buffer / LTV / Car value principal each month. Therefore, the LTV of the loan is constantly decreasing LTV is decreasi
Slide 11: Geographic and financial expansion
Geographic and financial expansion Nov 2018 Mogo Finance S:A. July 2018 tapped the Eurobond in the Establishment of amount of EUR 25m 160 regional HUBs Net loan portfolio EUR m May 2012 June 2018 Dec 2017 140 Mogo founded in Operations in North Jan 2019 EUR 50m of loans issued by Riga, Latvia Macedo
Slide 12: Diversification of operations eliminating single market risk
Diversification of operations eliminating single market risk Poland Lithuania Estonia Latvia ● Population: 38.0m ● Population: 2.8m ● Population: 1.3m ● Population: 2.0m ● Passenger cars: 20.7m ● Passenger cars: 1.2m ● Passenger cars: 0.7m ● Passenger cars: 0.7m ● Launch: August 2016 ● Launch: May 2
Slide 13: Index
Index 6 Company background 14 Products and customers 18 Business process flow 24 Portfolio and NPL analysis 27 Financials 31 Strategy 33 Appendix 13
Slide 14: Clear product offering
Clear product offering Core Products Complementary Products Product Financial leasing Sale and lease back Long term rent Instalment loans Share of portfolio (%) 65% 26% 4% 5% Loan amount • Up to EUR 15,000 • Up to EUR 10,000 • Up to EUR 15,000 • Up to EUR 5,000 Term • Up to 84 months • Up to 84 mont
Slide 15: Diverse customer profile
Diverse customer profile Typical characteristics of Mogo’s customers Customer split by age ● Has regular income Issued from 01.07.2018 – 30.06.2019 ● Possesses a bank account 34% ● Uses a car on a regular basis ● Regularly changes cars 20% 20% ● Cares about low monthly payments 12% 9% ● Limited savi
Slide 16: Portfolio analysis
Portfolio analysis Product overview Car manufacturing year Issued from 01.07.2018 – 30.06.2019 ● Finance lease or vehicle sale Product structure 26% 30% and leaseback options available 15% 19% ● 65% Finance lease 7% Loan portfolio breakout 26% Leaseback 3% (% of portfolio) 5% Instalment 4% Rent <199
Slide 17: Index
Index 6 Company background 14 Products and customers 18 Business process flow 24 Portfolio and NPL analysis 27 Financials 31 Strategy 33 Appendix 17
Slide 18: Marketing tailored to geography
Marketing tailored to geography Marketing strategy Omni-channel loan issuance Issued from 01.07.2018 – 30.06.2019 North Macedonia 24% 28% 47% ● Application tool for desktop Online and mobile devices Kazakhstan 39% 27% 34% Uzbekistan 8% 30% 62% Latvia 16% 14% 70% ● Phone Lithuania 33% 66% 1% Offline
Slide 19: Solid sales and underwriting network
Solid sales and underwriting network Strong onsite presence and established relationships with car dealerships and brokers 9 3 Latvia 1 Riga Romania 102 3 38 72 ● 8 branches 10 ● 11 branches 9 5 ● 237 car dealerships ● 250+ car dealerships 140 Bucharest 2 5 17 Lithuania 12 6 Bulgaria 7 2 4 ● 6 branc
Slide 20: Data driven underwriting
Data driven underwriting Rigorous credit assessment with fast decision output Car: Automated instant valuation Client: Automated scoring Total applications vs total acceptance Internally developed state-of-the-art solution Third-party and in-house models Input from the client 45,000 14% Customer pro
Slide 21: Fraud prevention
Fraud prevention Chief Security Officer 1) Security Cars officer at equipped with country level GPS devices For the purpose of vehicle evaluation, Mogo has internally developed a state-of-the-art solution with the integration of multiple relevant databases Evaluate the Regular Permanent Verification
Slide 22: Efficient debt collection process
Efficient debt collection process Not overdue Payments are made in due course Client pays Client pays Reminders to make a payment 1-34 days overdue by SMS, e-mail, phone Client does not pay: agreement termination Renewal of loan 35-60 days overdue Loan repayment Car repossession agreement (4%) (52%)
Slide 23: Index
Index 6 Company background 14 Products and customers 18 Business process flow 24 Portfolio and NPL analysis 27 Financials 31 Strategy 33 Appendix 23
Slide 24: Diversified loan portfolio
Diversified loan portfolio Net loan and rent portfolio by country Net loan and rent portfolio diversification 6M 2019 2017: EUR 97.2m 2018: EUR 141.3m 6M 2019: EUR 171.5m 3% 1% 1% 1% 29% 2% 2% 7% 4% 23% 13% 26% 32% 24% 7% 7% 33% 8% 16% 7% 9% 11% 17% 18% 16% 16% 20% 13% 68% 14% 9% 24% 8% 11% Latvia L
Slide 25: Non-performing loans and provisioning
Non-performing loans and provisioning Net loan portfolio quality analysis Gross and net NPL (35+ DPD) portfolio 1) As at 6M 2019 7% 20% Stage 1: Current 15% 7% Stage 1: 1-10 days overdue 5% 10% Stage 1: 11-30 days overdue 7% Stage 2: 31-34 days overdue 5% Stage 2: 35-60 days overdue (NPL) 0% Stage 3
Slide 26: Index
Index 6 Company background 14 Products and customers 18 Business process flow 24 Portfolio and NPL analysis 27 Financials 31 Strategy 33 Appendix 26
Slide 27: Financial highlights
Financial highlights Revenue EUR m EBITDA EUR m Net profit EUR m and margin 54.4 20.0 20.4 25% 12 .0 14.9 12 .0 33.9 25 .00% 35.6 9.0 20 .00% 10% 20 .00% 10 .0 10 .0 24.8 8% 15 .00% 9% 15 .00% 8.0 8.0 8.1 10 .00% 10 .00% 6.0 4.6 6.0 5.0 0% 5.0 0% 3.3 0.0 0% 2.1 4.0 0.0 0% 4.0 -5 .00 % -5 .00 % 2.0 2
Slide 28: Mid-tier markets on the path to maturity
Mid-tier markets on the path to maturity 1) Positive growth and profitability trajectory in all mid-tier countries operating since 2017 Revenue EUR m EBITDA EUR m Net profit EUR m and margin 6.9 6.4 2.6 6% 0.4 0.6 0 6% 0.4 0 2017 2018 0.2 0 6M 2018 1% 2.8 0.0 0 0.0 0 20 % 6M 2019 -4 % -0 .20 0% -0.3
Slide 29: Assets & Liabilities
Assets & Liabilities Assets, EUR m Liabilities, EUR m 213.8 174.3 112.5 73.4 Interest bearing 97.7 71.0 liabilities Bonds 71.5 EUR 187m 26.2 EUR 97.7m 15.9 2016 2017 2018 6M 2019 2017 2018 6M 2019 Bonds Non-related parties** P2P Latvian bond Euro bond Capitalisation 11.8% 12.7% 12.8% ratio* ● 88% of
Slide 30: Index
Index 6 Company background 14 Products and customers 18 Business process flow 24 Portfolio and NPL analysis 27 Financials 31 Strategy 33 Appendix 30
Slide 31: Strategy
Strategy Focusing on operational excellence Leveraging expertise and expanding into new markets • Leveraging fully established Facilitating and financing regional teams to ensure the transactions with used exchange of best practices Leveraging Focusing on and knowledge cars expertise and operational
Slide 32: Index
Index 6 Company background 14 Products and customers 18 Business process flow 24 Portfolio and NPL analysis 27 Financials 31 Strategy 33 Appendix 32
Slide 33: Regulatory framework
Regulatory framework Country Products Regulator License Interest cap required Albania • Lease/leaseback • Bank of Albania • Yes • No APR cap Armenia • Lease/leaseback • Central Bank of the Republic of • Yes • No APR cap Armenia • Interest rate cap 24% annually Bulgaria • Lease/leaseback • Bulgarian
Slide 34: Regulatory framework
Regulatory framework Country Products Regulator License Interest cap required Moldova • Lease/leaseback • National Commission of Financial • Yes • No APR cap Market 1) North • Lease/leaseback • Ministry of Finance • Yes • APR cap 51.25% Macedonia Poland • Lease/leaseback • Office of Competition and
Slide 35: P2P market place (Mintos)
P2P market place (Mintos) Benefits for Mogo ● Perfect asset / liability match (same duration as loans issued) ● No cash drag – funding need is managed through the number of loans listed on platform Mortgage ● Access to retail investors Loans ● Simple security structure – assignment of the Car loans
Slide 36: Operational structure
Operational structure In July 2018, the Company implemented a new decentralized organizational structure with the creation of five HUB units. Each hub unit has its own management team which reports to Group-level, to encourage efficiency at a regional-level. Management, current Founders and former e
Slide 37: Management Structure and Employees
Management Structure and Employees The Group and the HUB units share a common structure 815 total employees as at 30 June 2019 CEO / Head of HUB Administration Head of Head of Data Head of CFO Head of IT Head of Legal Head of Risk Head of HR Marketing Science Operations Marketing Analytics Finance O
Slide 38: Income statement
Income statement Group financials, EUR m 2016 2017 2018 6M 2018 6M 2019 Interest revenue calculated using the effective interest method 27.5 35.6 54.4 24.8 33.9 Interest expense calculated using the effective interest method (6.9) (8.5) (12.6) (6.7) (9.2) Net interest income 20.6 27.0 41.8 18.1 24.8
Slide 39: Balance sheet
Balance sheet Assets, EUR m 2016 2017 2018 6M 2019 Equity & Liabilities, EUR m 2016 2017 2018 6M 2019 ASSETS EQUITY Cash and cash equivalents 2.2 5.2 6.5 5.3 Share capital 1) 0.0 0.0 0.0 0.0 Non-current finance lease receivables 42.3 63.8 88.2 108.1 Share premium 10.0 - - - Non-current loans and adv
Slide 40: Statement of Cash Flow
Statement of Cash Flow 6M 6M 6M 6M EUR m 2016 2017 2018 EUR m 2016 2017 2018 2018 2019 2018 2019 Cash flows to/from operating activities Cash flows to/from investing activities Purchase of property, plant and (1.2) (0.7) (1.9) (1.9) (3.5) Profit before tax 6.8 10.0 5.7 1.9 3.1 equipment and intangib
Slide 41: Thank you for your attention!
Thank you for your attention! Mogo Finance Group Contact person Contact person Skanstes street 50 Māris Kreics, Group CFO Simonas Jurgionis, Investor Relations Manager LV-1013 Riga, Latvia E-mail: maris.kreics@mogofinance.com Phone: +371 27 073 993 Home page: www.mogofinance.com E-mail: simonas.jurg
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