Delfingroup As · OMXRSE:DGR1R
Delfingroup As — FY2023 Earnings Presentation
38 slides from Delfingroup As's earnings presentation, February 2024
Slide 1: Financial report
Financial report Unaudited results for 12 months Ending 31 December 2023
Slide 2: Key results
Financial report Key results Business highlights Business performance Appendix
Slide 3: Key characteristics of 2023
Financial report Key characteristics of 2023 +13% +20% Pawn loan issuance +32% Net loan portfolio growth Consumer loan issuance growth in 2023 growth in 2023 in 2023 +41% +39% +14% Profit before tax Revenue growth in 2023 EBITDA growth in 2023 growth in 2023
Slide 4: Segment performance
Financial report Segment performance Stable income growth in all the main business segments in 2023. Consumer lending income, mEUR Pawn lending income, mEUR* Retail of pre-owned goods income mEUR** +36% +47% +21% 6.7 34.2 8.1 6.7 4.9 23.3 2022 2023 2022 2023 2022 2023 *including sold pawn pledges an
Slide 5: Key results
Financial report Key results Total loans issued Net loan portfolio m€ Q4 y-o-y Q4 y-o-y m€ Q4 y-o-y Q4 y-o-y +23.8 +54% +21.5 +32% Demand for lending products +7.9 +54% +0.5 +2% remained solid. A moderate increase 89.0 22.2 22.6 24.0 21.8 23.5 23.1 78.1 84.6 in issuance due to the development 20.4 7
Slide 6: Business highlights
Financial report Key results Business highlights Business performance Appendix
Slide 7: On the way to an improved pawnshop market in Lithuania
Financial report On the way to an improved pawnshop market in Lithuania Expansion opportunity The fragmented pawnshop market in Lithuania presents a significant business opportunity. Leveraging experience We utilise over 14 years of knowledge and expertise gained in the Latvian market. Lucrative mar
Slide 8: Expansion strategy in Lithuania
Financial report Expansion strategy in Lithuania First step Launch of 5 branches in Vilnius and online store shop.banknote.lt during December 2023. Product offering Offering pawn lending and retail of pre-owned goods as the first expansion step. Future plans • To gradually grow the branch network in
Slide 9: Launch of the new Banknote mobile app
Financial report Launch of the new Banknote mobile app Improved user experience Available digital payment card Simple and clear view of all existing agreements Efficient filling of new loan applications Quick search of the nearest branch
Slide 10: Digital VISA payment card in mobile app
Financial report Digital VISA payment card in mobile app Instantly accessible Banknote credit line on Banknote mobile app Made for online and in-store purchases Simple integration with Apple Pay and Google Wallet High security standards with built-in biometric security checks
Slide 11: Branch network development in Latvia and Lithuania
Financial report Branch network development in Latvia and Lithuania In Q4 2023 the first branch in Mārupe was opened. The branch is located in the center of Mārupe, next to the municipality council building. • Opening of Banknote XL Main branch network • New branches in Jēkabpils and Mārupe improvem
Slide 12: Banknote online store
Financial report Banknote online store Banknote online store is a fast-growing sales channel where clients can conveniently purchase pre-owned and verified items. +50 000 14 pre-owned and verified items day return option for goods available purchased online Up to 24 2-3 days months guarantee deliver
Slide 13: Focus on AI
Financial report Focus on AI Employee training on Virtual assistant for E-commerce AI tool utilization internal regulations enhancement • Active user training to • GPT-4-based virtual • Development of AI effectively utilise AI tools assistant is a key solutions to improve our e- like ChatGPT and Git
Slide 14: Improved mission, vision and values
Financial report Improved mission, vision and values MISSION Make financial inclusion and RESPECT PROGRESS sustainable consumption more Respect and trust are Progress means getting better cornerstones for success every day available COURAGE CUSTOMER-ORIENTED VISION Courage turns ambition into Caring
Slide 15: Business performance
Financial report Key results Business highlights Business performance Appendix
Slide 16: Consumer loans
Consumer loans Financial report Consumer net loan portfolio Average loan* m€ Q4 y-o-y Q4 y-o-y € Q4 y-o-y Q4 y-o-y +21.5 +54% +20.4 +33% +351 +30% +304 +20% 1765 1840 1837 1669 81.6 1533 76.9 1432 67.7 71.7 1337 54.8 61.2 1182 1258 Growth of the consumer 39.7 43.5 49.1 lending segment continued thro
Slide 17: Age analysis of consumer lending portfolio
Financial report Age analysis of consumer lending portfolio* 1.7% 2.1% 3.8% 2.5% 6.9% 5.9% Loan portfolio quality remains solid with slight improvements in 2023. Focus on lower risk lending clients. 87.6% 89.5% Improved underwriting processes and risk policy. 31.12.2022. 31.12.2023. Loans not due ye
Slide 18: Pawn loans
Pawn loans Financial report Pawn net loan portfolio* Average pawn loan amount m€ € Q4 y-o-y Q4 y-o-y Q4 y-o-y Q4 y-o-y +1.4 +55% +0.2 +4% +16 +21% +5 +5% 4.0 4.1 4.0 4.1 3.6 3.8 3.4 96 97 92 89 84 85 84 2.5 2.6 76 77 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2021 2022 2023 2021 2022 2023
Slide 19: Retail of pre-owned goods
Retail of pre-owned goods* Financial report Sale of pre-owned goods** m€ Q4 y-o-y Q4 y-o-y +0.8 +33% +0.8 +25% 3.9 4.0 3.5 3.3 3.2 3.3 2.6 2.4 2.3 Sales in 2023 increased by 28%, reaching EUR 14.7 million. Q4 2023 sales increased by 25% reaching EUR 4 million. Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2021 2022 20
Slide 20: Sales split by product category
Financial report Sales split by product category Sales split by product category (12M 2023) Clients have access to a wide range of pre-owned goods at Banknote online store and branch network. The most demanded product categories are electronics, such as smartphones, computers, TVs and jewelry.
Slide 21: Diversification
Financial report Revenue by business segments 12M 2023 Diversification 14% Banknote consumer loans Although the most significant part of the VIZIA consumer loans revenue stream comes from the 16% 50% Pawn loans * consumer loan segment, we see great potential in gradually growing other ** Retail of p
Slide 22: Influence of Corporate income tax changes
Financial report Influence of Corporate income tax changes ● At the end of 2023, the Latvian government approved changes to applying Corporate income tax (CIT). ● After the changes, banking and non-bank lending industry participants must pay 20% CIT advance from Estimated Actual Change, profit. Posi
Slide 23: Consolidated income statement
Consolidated income statement Financial report 2023 2022 Change 2023 2022 Change INCOME STATEMENT, EUR’000 Q4 Q4 % 12M 12M % Total revenue 13,912 10,507 +32% 50,423 35,776 +41% Cost of sales -1,977 -1,164 +70% -6,086 -4,204 +45% Credit loss expense -2,608 -2,041 +28% -10,687 -6,161 +73%* Interest ex
Slide 24: Consolidated balance sheet
Consolidated balance sheet Financial report BALANCE SHEET, EUR’000 31.12.2023 31.12.2022* Change % Fixed and intangible assets 2,671 1,470 +82% Right-of-use assets 2,887 2,636 +10% Net loan portfolio 89,026 67,518 +32% Inventory and scrap 3,391 2,290 +48% Other assets 1,157 875 +32% Cash 5,929 2,369
Slide 25: Financial ratios
Financial ratios Financial report EBITDA margin* Equity ratio ROE** 32.3% 25.3% 23.7% 23.5% 37.6% 37.6% 37.6% 36.6% 36.6% 36.2% 22.2% 21.8% 21.6% 20.3% 41.3% 38.0% 39.8% 35.9% 36.1% 31.4% 34.9% 37.2% 26.4% 26.3% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2022 2022 2023 2
Slide 26: Capital structure
Financial report Capital structure Capital structure 31.12.2023 Bond financing track record 15.0 m€ 7% 11.7 21% 10.0 10.0 5.0 5.0 5.0 5.0 4.8 42% 3.5 3.5 30% 2013 2014 2016 2019 2020 2021 2021 2022 2023 2023 2023 Secured Unsecured Unsecured Secured Unsecured Unsecured Unsecured Unsecured Subordinate
Slide 27: Dividends
Financial report Dividends Dividend yield of 5.8%* Unique dividend distribution Dividend Dividend payment Payout EUR/share EUR total proposal in Baltics period date ratio*** Upon shareholders Q4 2023 0.0143** 648 898** 49.99%** approval** Q3 2023 28.12.2023 0.0214 969 839 49.80% Quarterly dividends
Slide 28: Share performance
Financial report Share performance Share price, € Share dynamics compared to indexes 1.6 115% 1.55 110% 1.5 105% 1.45 100% 1.4 95% 1.35 90% 1.3 85% 1.25 80% 1.2 75% 03.01.2022 03.07.2022 03.01.2023 03.07.2023 03.01.2024 03.01.2022 03.07.2022 03.01.2023 03.07.2023 03.01.2024 DGR1R – DelfinGroup OMX_B
Slide 29: Follow our news in e-mail and social networks
Financial report Follow our news in e-mail and social networks Visit our website to subscribe to the newsletter www.delfingroup.lv
Slide 30: Appendix
Financial report Key results Business highlights Business performance Appendix
Slide 31: Consolidated income statement
Consolidated income statement Financial report 2020* 2021 2022 2023 BALANCE SHEET, EUR’000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1* Q2* Q3* Q4 Total revenue 5,877 5,028 5,605 6,782 5,890 5,765 6,335 7,199 7,586 8,095 9,587 10,507 11,333 11,970 13,208 13,912 Cost of sales -1072 -794 -810 -903 -620 -86
Slide 32: Consolidated balance sheet
Consolidated balance sheet Financial report 2020* 2021* 2022* 2023 BALANCE SHEET, EUR’000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Fixed and intangible assets 748 859 927 1,038 864 818 789 1,201 1,301 1,351 1,387 1,470 1,595 1,823 2,150 2,671 Right-of-use assets 1,950 3,056 2,927 3,194 3,281
Slide 33: Sustainability
Financial report DelfinGroup ESG report for 2022 available here. Sustainability Promotion of circular economy Inclusive society Sustainable corporate governance • Prolonged life-cycle of consumer • The most geographically available financial • 3 independent members of the goods. institution in Latvi
Slide 34: Historic timeline
Financial report Historic timeline Received ISO Initial Public Starting operations 9001 and 50001 Offering at in Lithuania certification Corporate identity Nasdaq Riga changed to New service – 50 branches Online lending First ESG report remote purchasing opened in major rebranding started published
Slide 35: Highly appreciated company
Financial report Highly appreciated company CV-Online Latvia Latvian Traders Association Institute for Corporate Sustainability and Responsibility Top employer Best Trader of Latvia Gold category in Sustainability Index 2023 Latvian Corporate Governance The Society Advisory Board Integration Foundat
Slide 36: Definitions for Alternative Performance Measures
Financial report Definitions for Alternative Performance Measures EBITDA Earnings before interest, taxes, depreciation and amortization = (Profit before tax) + (Interest Return on Equity (ROE) expenses and similar expenses) + (Rights of used assets depreciation) + (Depreciation of fixed Net profit f
Slide 37: Disclaimer
Financial report Disclaimer This presentation is of selective nature and is made to provide an overview of the Company’s (AS DelfinGroup and its subsidiaries) business. Unless stated otherwise, this presentation shows information from consolidated perspective. Facts and information used in this pres
Slide 38: AS DelfinGroup
AS DelfinGroup Skanstes street 50A Riga, Latvia, LV-1013 IR@delfingroup.lv (+371) 26 18 99 88 www.delfingroup.lv