Credit Corp Group Limited · ASX:CCP

Credit — FY2021 Earnings Presentation

21 slides from Credit's earnings presentation, Aug 3, 2021

  1. Slide 1: Credit Corp Group FY2021 Results

    as Credit Corp Group ens ti on Se BUILDING FY2021 “\. MOMENTUM RESULTS “i as Beregi_ Michael Eadie

  2. Slide 2: Leadership in the credit impaired consumer segment

    Leadership in the credit impaired consumer segment … ANALYTICS & DISCIPLINE OPERATIONAL EXCELLENCE SUSTAINABILITY & COMPLIANCE Australian / NZ debt buying  Largest database  Highest asset turnover 1  No adverse orders or undertakings  History of pricing accuracy  Lowest cost to collect 2  Low

  3. Slide 3: Return to pre-COVID growth trajectory

    … has delivered a return to pre-COVID growth trajectory … NPAT AND RETURN ON ASSETS $ 105m 20% +11% $ 90m 15% $ 75m $ 60m 10% $ 45m $ 30m 5% $ 15m - - FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 Total NPAT (LHS) COVID adjustments NPAT (LHS) ROA (RHS) Credit Corp Group FY2021 Results Pres

  4. Slide 4: Considerable investment to sustain momentum

    … and considerable investment to sustain momentum … PDL INVESTMENT AND LENDING VOLUME $ 600m  Near-record investment outlay $ 500m in FY2021 driven by: $ 400m  The Collection House PDL $ 300m acquisition; and $ 200m  A return to lending growth, despite a COVID-induced $ 100m temporary reduction i

  5. Slide 5: Financial capacity to seize opportunities

    … with the financial capacity to seize opportunities as they arise … FACILITY HEADROOM AND GEARING 50% $ 396m $ 400m $ 372m $ 350m $ 350m $ 300m 40% $ 300m  Capital position critical to securing $ 250m $ 212m opportunities like the Collection House PDL 30% $ 200m acquisition $ 150m $120m  Potentia

  6. Slide 6: As the PDL investment outlook improves

    … as the PDL investment outlook improves PDL INVESTMENT $ 300m $ 250m FY2022 purchasing guidance $ 200m $200 - $240m  Record July contracted purchasing pipeline $ 150m FY2022 purchasing  Month-on-month charge-off $ 100m pipeline of $150m volumes starting to grow $ 50m contracted at July 2021 - FY2

  7. Slide 7: Strong financial results driven by US growth

    Strong financial results driven by US growth … Pre-COVID FY2021 Var % 2 FY2020 1 AU/NZ debt buying $225.3m $219.4m (3%) US debt buying $57.3m $76.5m 34% AU/NZ lending $99.4m $78.9m (21%) 11% Revenue total AU/NZ debt buying $382.0m $48.7m $374.8m $54.1m (1%) 11% growth in NPAT US debt buying $8.1m $1

  8. Slide 8: Strong operational performance

    … and strong operational performance  AU/NZ  Collection House PDL acquisition offset the impact of temporarily reduced organic PDL supply  Collections on FY2021 purchases tracked at pre-COVID levels  Collections on starting book in-line with expectations  US  Strong US consumer position supple

  9. Slide 9: Strong US segment performance

    Strong US segment performance …  NPAT more than doubled over the prior year to $17.7 million  Strong returns on past purchases through operational improvement  Increased share of purchasing as PDL supply temporarily affected by COVID US NPAT and US COLLECTIONS (A$m) US PURCHASING (A$m) $12m $90m

  10. Slide 10: Momentum for continued US growth

    … with momentum for continued US growth  Record July contracted purchasing pipeline of A$110 million - near triple prior year  Diversified purchasing relationships to support further market share gains  Growth in unsecured lending to drive a recovery in PDL supply  Operational infrastructure in

  11. Slide 11: Consumer lending volumes have recovered to pre-COVID levels

    Consumer lending volumes have recovered to pre-COVID levels …  Loan book has regrown from a stimulus-induced low in September 2020  Volumes now tracking in line with pre-COVID levels for both new and returning customers 1 CONSUMER LENDING BOOK AND REVENUE LENDING VOLUMES INDEXED TO PRE-COVID COMPA

  12. Slide 12: Segment profit is growing

    … and segment profit is growing LENDING NPAT (A$m)  Strong H2 recovery in segment profit $ 25m 15%  On track to re-grow loan book to pre- $ 20m COVID levels  Product diversification in place 10% $ 15m  Q4 auto loan re-launch producing solid results $ 10m 5%  Other pilots launched / in developme

  13. Slide 13: On track for sustained growth in FY2022

    On track for sustained growth in FY2022 FY2022 guidance Ledger investment $200 - $240 million Net lending $45 - $55 million NPAT $85 - $95 million EPS (basic) 126 - 141 cents Credit Corp Group FY2021 Results Presentation 13

  14. Slide 14: Appendices: Key Operating Metrics

    Appendices: Key Operating Metrics Appendix 1: Operating cash flow and gearing Appendix 2: Pricing discipline and accuracy Appendix 3: Collections life cycle Appendix 4: Productivity Appendix 5: Payers base Appendix 6: Operational and total headcount Appendix 7: Industry leading compliance and sustai

  15. Slide 15: Operating cash flow and gearing

    APPENDIX 1 Operating cash flow and gearing Operating cash flows and gearing Dec 2019 Jun 2020 Dec 2020 Jun 2021 Pre-tax operating cash flow $182.4m $212.3m $196.1m $217.4m Tax payments ($27.4m) ($7.8m) ($5.1m) ($22.4m) PDL acquisitions, net lending and ($227.7m)2 ($94.1m) ($197.8m)1 ($123.2m) capex

  16. Slide 16: Pricing discipline and accuracy

    APPENDIX 2 Pricing discipline and accuracy PRICING DISCIPLINE AND ACCURACY Cumulative collections $ 4,000m Actual cash $ 3,500m collections $ 3,000m $ 2,500m $ 2,000m $ 1,500m $ 1,000m Initial $ 500m projections 1 - 1. For all PDLs held at June 2008, initial projections represent the forecast at Jun

  17. Slide 17: Collections life cycle

    APPENDIX 3 Collections life cycle PDL COLLECTIONS BY VINTAGE +4%1,2 $ 160m $ 140m $ 120m 33% 34% 32% 32% $ 100m 31% 32% 34% 35% 29% 30% 12% 12% $ 80m 31% 32% 33% 32% 30% 30% 32% 14% 15% 30% 32% 16% 16% 18% 13% $ 60m 15% 15% 15% 12% 10% 11% 14% 18% 17% 17% 13% 14% 26% 23% 23% 19% 25% 25% 19% 15% 15%

  18. Slide 18: Productivity

    APPENDIX 4 Productivity PDL COLLECTIONS PER HOUR $ 350 Full year average $ 300 FY2021: $290 12m to Jun-21 $ 250 FY2020: $257 $ 200 12m to Jun-20 $ 150 $ 100 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Credit Corp Group FY2021 Results Presentation 18

  19. Slide 19: Payers base

    APPENDIX 5 Payers base PORTFOLIO SUMMARY: AU/NZ DEBT BUYING ONLY Total portfolio Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 Dec-20 Jun-21 Face value $5.9b $6.0b $6.2b $6.4b $7.8b $7.7b $8.6b $8.5b Number of accounts 710,000 710,000 753,000 786,000 1,268,000 1,193,000 1,392,000 1,326,000 Payment arran

  20. Slide 20: Operational and total headcount

    APPENDIX 6 Operational and total headcount PERIOD END HEADCOUNT (FTE) PERIOD END HEADCOUNT (FTE) Jun-19 Jun-20 Jun-21 2,000 1,800 Debt buying 1,250 1,378 1,261 operations 1,600 1,400 Agency 90 251 218 1,200 Lending 119 118 111 1,000 800 Support 108 135 143 600 Total 1,567 1,882 1,733 400 Jun-19 Jun-

  21. Slide 21: Industry leading compliance and sustainability

    APPENDIX 7 Industry leading compliance and sustainability H1 FY2021 AUS EDR rate 1 12 months to Mar-21 US dispute rate 2 Credit Corp Credit Corp Publicly traded Other debt buyer A  Continued industry leadership debt buyers Publicly traded  Lowest EDR rate in AU 1 and low US dispute debt buyer B ra

Credit Corp Group — FY2021 Earnings Presentation on 6ix