Propel Holdings, Inc. · TSX:PRL
Propel — Investor Presentation (August 2024)
32 slides from Propel's investor presentation, August 2024
Slide 1: Investor Presentation
TSX:PRL Investor Presentation August 2024 1
Slide 2: Disclaimer
Disclaimer FORWARD-LOOKING INFORMATION Certain statements made in this press release may constitute forward-looking information under applicable securities laws. These statements may relate to our 2024 Operating and Financial Targets, our profitable growth prospects, our dividend, our ability to pro
Slide 3: Building a new world of financial opportunity
Building a new world of financial opportunity INVESTOR PRESENTATION Q2 2024 CONFIDENTIAL 3
Slide 4: We Enable Credit to Underserved Consumers
US$1.7+ Billion in Credit Facilitated¹ We Enable Credit to US$382 Million Underserved Consumers LTM Revenue2 Traditional financial institutions rely on credit scores, but that locks out millions of everyday consumers >900,000 We are changing that through our proprietary AI-powered Consumers Served3
Slide 5: Investment Highlights
Investment Highlights Innovative, Consumer Fintech transparent products lending platform AI-powered tech and services, serving the US and platform unlocking including 3 bank Canadian markets credit opportunity programs and 2 Lending as a Service partnerships Experienced and Profitable, scalable Quar
Slide 6: Our Mission
Mission Our Mission Inclusion Evolution Experience Every individual Committed to giving Provide a best-in- deserves access to credit consumers the potential to class consumer experience evolve to better credit products over time CONFIDENTIAL 6 INVESTOR PRESENTATION Q2 2024 CONFIDENTIAL 6
Slide 7: Financial Inclusion for the Underserved Consumer
Financial Inclusion for the Underserved Consumer ~70 Million 37% 54% $1 Trillion + USD Estimated size of US U.S. adults are unable Canadians say they’re Estimated size of + Canada underserved to afford a $400 living paycheque to Global fintech lending market1 emergency expense2 paycheque3 market4 In
Slide 8: Propel Today
Propel Today Highly profitable, diversified and scalable business with significant growth opportunity 100% online At Scale Profitable YTD 2024 Fiscal 2023 US$1.7B ~13.7M US$ in originations1 unique applications Revenue $203.3M $316.5M per year2 Net Income $24.2M $27.8M ~1.24M ~51,000 Adj. Net Income
Slide 9: Our Products
Our Products INVESTOR PRESENTATION Q2 2024 CONFIDENTIAL 9
Slide 10: Products and Services
Products and Services Product/Service Geography Served Loan Amount Range USD $500-$3,500 USD $500-$5,000 CAN $1,000-$10,000 USD $1,000-$8,000 Direct Lender Bank Program Operating Structure Credit Services Direct Lender Lending-as-a-Service Lending-as-a-Service Bank Program Installment loans Consumer
Slide 11: Putting Customers First
Putting Customers First Consistently Lowered Cost of Credit Over Time Over the last two years, the cost of credit of products offered through the Propel platform have been reduced by half. “It was so simple, easy and quick. Within 24 hours, I got accepted and had access to Graduation Programs a line
Slide 12: Our Platform
Our Platform INVESTOR PRESENTATION Q2 2024 CONFIDENTIAL 12
Slide 13: Industry-Leading Proprietary Technology
Industry-Leading 89% Proprietary Technology of applications auto-decisioned 96% of ad hoc card payments made Three Major Subsystems Open Architecture online AI-Powered Acquisition + Integrates easily and securely with: 90 Person In-House 1 Tech team Underwriting Engine • 30 marketing partners & Loan
Slide 14: Looking Beyond Traditional Credit Scores
Looking Beyond Traditional Credit Scores Traditional financial institutions rely on credit scores, Employment Data but that locks out millions of everyday consumers Consumer Behaviour Income Verification We use AI to build our own risk score --- and can use Consumer Verification Data up to 5,000 dat
Slide 15: Driving Growth While Managing Risk
Driving Growth While Managing Risk Credit Performance Remains Strong and Stable While Loan Balances Grow Substantially $400,000,000 20.0% 18.0% $350,000,000 Fund More 16.0% $300,000,000 Consumers 14.0% $250,000,000 12.0% $200,000,000 10.0% Manage Risk 8.0% $150,000,000 6.0% $100,000,000 4.0% $50,000
Slide 16: Best-in-Class Operations + Customer Service
Best-in-Class Operations + Customer Service 250+ 7 days strong operations team across 2 a week live agent service centralized locations Serving customers with urgency, 24/7 “ Excellent 4.4+ Ratings respect and online platform exceptional customer service The application process was simple and quick.
Slide 17: Financial Performance
Financial Performance INVESTOR PRESENTATION Q2 2024 CONFIDENTIAL 17
Slide 18: Robust Loan and Revenue Growth
Robust Loan and Revenue Growth Loans and Advances Receivable Ending Combined Loan and Advance Revenue Balances* US$M US$M US$M $392.2 $316.5 $305.2 $337.3 $259.3 $226.9 $247.5 $203.3 $195.6 $129.6 $137.3 $134.8 $106.8 $103.8 $73.5 $71.7 $49.8 $62.6 2020 2021 2022 2023 Q2 2024 2020 2021 2022 2023 Q2
Slide 19: Stability and Scalability of Business Model
Stability and Scalability of Business Model Provision for loan losses and other liabilities (“Provision”) and Net Charge-offs as % of Average CLAB* Q2 2024 Provision % Revenue and Net Charge- offs as % of Avg. CLAB declined from Q2 2023 58% • Reflects ongoing strong credit performance driven by our
Slide 20: Generating Strong Profitability
Generating Strong Profitability Net Income Adjusted Net Income* Adjusted EBITDA* US$M US$M US$M $27.8 $36.1 $24.2 $31.0 $76.3 $59.9 $15.1 $20.4 $13.1 $16.9 $11.1 $15.6 $40.8 $12.9 $35.3 $30.4 $7.3 $6.6 $9.2 $25.4 $5.7 $8.6 $20.0 $18.2 2020 2021 2022 2023 Q2 2023 Q2 2024 YTD Q2 YTD Q2 2020 2021 2022
Slide 21: Focus on Maximizing Shareholder Returns
Focus on Maximizing Shareholder Returns Return on Equity Adjusted Return on Equity* Continued earnings growth leading to strong ROE and Adj. ROE* and ability 44% 54% 56% to raise dividend 38% 30% 30% 40% 39% 39% • Company’s operating cash flow and debt 26% 36% capacity sufficient to grow business; n
Slide 22: Solid Financial Position
Solid Financial Position Credit Capacity (in US$M) • Company well-funded for • Three credit facilities are continued growth, new supported by a syndicate of strategic initiatives and to lenders to ensure redundancy support dividend across the Company’s funding $80.0M ~$130M CreditFresh facility upsi
Slide 23: Growth Outlook: FY2024 Operating and Financial Targets
Growth Outlook: FY2024 Operating and Financial Targets Ending Revenue Adjusted Net Income Adjusted Net Return on Adjusted Combined (US$) EBITDA Margin Income Equity*** ROE** Loan and Margin** Margin** Advance Balances*, ** 25% - $410M - 24% - 9.5% - 11.75% - 30%+ 40%+ 35% $450M 29% 12.5% 14.75% 2023
Slide 24: Growth Strategy
Growth Strategy Serving lower risk Graduating Geographic Adjacent products markets consumers up the expansion credit spectrum Extension of existing Continue to graduate Expansion into Design, deliver and product suite into near- existing clients to new new states/provinces, cross-sell prime market a
Slide 25: Customer testimonial
The immediate response and serve were great. During an emergency time of need it was a great relief for fast response. The online application was appreciated and easy. Thank you. INVESTOR PRESENTATION Q2 2024 CONFIDENTIAL 25
Slide 26: Welcome to a new world of financial opportunity
Over a million loans facilitated. Over a billion dollars in lending. Welcome to a new world of financial opportunity. INVESTOR PRESENTATION Q2 2024 CONFIDENTIAL 26
Slide 27: Appendix
Appendix INVESTOR PRESENTATION Q2 2024 CONFIDENTIAL 27
Slide 28: Non-IFRS Measure Reconciliation
Non-IFRS Measure Reconciliation 1) See "Disclaimer – Non-IFRS Measures and Industry Metrics 2) Provision included for (i) loan losses on good standing current principal (Stage 1 — Performing) balances (see “Critical Accounting Estimates and Judgements — Loans and advances receivable” in MD&A) INVEST
Slide 29: Non-IFRS Measure Reconciliation
Non-IFRS Measure Reconciliation 1) Each item is adjusted for after-tax impact. Please see the accompanying Q2 2024 MD&A for further details 2) See "Disclaimer – Non-IFRS Measures and Industry Metrics INVESTOR PRESENTATION Q2 2024 CONFIDENTIAL 29
Slide 30: Non-IFRS Measure Reconciliation
Non-IFRS Measure Reconciliation 1) See "Disclaimer – Non-IFRS Measures and Industry Metrics INVESTOR PRESENTATION Q2 2024 CONFIDENTIAL 30
Slide 31: Non-IFRS Measure Reconciliation
Non-IFRS Measure Reconciliation 1) See "Disclaimer – Non-IFRS Measures and Industry Metrics 2) Movement in financial obligation is equivalent to Provisions for CSO Guarantee liabilities and Bank Service Program liabilities INVESTOR PRESENTATION Q2 2024 CONFIDENTIAL 31
Slide 32: Building a new world of financial opportunity.
Building a new world of financial opportunity. INVESTOR PRESENTATION Q2 2024 CONFIDENTIAL 32
Propel Holdings — Investor Presentation (August 2024) on 6ix